PART III. MANAGEMENT AND ADMINISTRATION OF COMPANIES AND Provisions for Protection of Creditors. office of company. 39. Every company under this Act shall have a registered Registered office to which all communications and notices may be addressed (a). If any company under this Act carries on business without having such an office, it shall incur a penalty not exceeding five pounds for every day during which business is so carried on. (a) s. 62. Where a company has no registered office, a creditor may serve his demand under sect. 80 at the company's unregistered office (a). Where the registered office of a company had been demolished in the course of some alterations, and its business was being carried on at an office which had not been registered, service on directors at such unregistered office was held sufficient (b). Where a company, previous to this Act, though not formally dissolved, had practically ceased to exist, and had no office or officers, it was ordered that service of the bill, in a suit to which the company were defendants, on the late deputy-chairman and late secretary should be good service (c). See further, cases cited under General Order, November, 1862, Rule 3, infra. situation of registered 40. Notice of the situation of such registered office, and of Notice of any change therein, shall be given to the registrar, and recorded by him: Until such notice is given, the company shall office. not be deemed to have complied with the provisions of this Act with respect to having a registered office. 41. Every limited company under this Act, whether limited by shares or by guarantee, shall paint or affix, and shall keep painted or affixed, its name on the outside of every office or place in which the business of the company is carried on, in a conspicuous position, in letters easily legible, and shall have (a) Re British and Foreign Gas, &c. Co., 13 W. R. 649; 12 L. T. 368; 11 Jur. 559. (b) In re Fortune Copper Mining Co., L. R. 10 Eq. 390. (c) Gaskell v. Chambers, 26 Beav. 252. Publication a limited of name by company. Penalties on non-publication of name. its name engraven in legible characters on its seal, and shall have its name mentioned in legible characters in all notices, advertisements, and other official publications of such company, and in all bills of exchange, promissory notes, indorsements, cheques, and orders for money or goods purporting to be signed by or on behalf of such company, and in all bills of parcels, invoices, receipts, and letters of credit of the company. 42. If any limited company under this Act does not paint or affix, and keep painted or affixed, its name in manner directed by this Act (a), it shall be liable to a penalty not exceeding five pounds for not so painting or affixing its name, and for every day during which such name is not so kept painted or affixed, and every director and manager of the company who shall knowingly and wilfully authorize or permit such default shall be liable to the like penalty; and if any director, manager, or officer of such company, or any person on its behalf, uses or authorizes the use of any seal purporting to be a seal of the company whereon its name is not so engraven as aforesaid (a), or issues or authorizes the issue of any notice, advertisement, or other official publication of such company, or signs or authorizes to be signed on behalf of such company, any bill of exchange, promissory note, endorsement, cheque, order for money or goods, or issues or authorizes to be issued any bill of parcels, invoice, receipt, or letter of credit of the company, wherein its name is not mentioned in manner aforesaid (a), he shall be liable to a penalty of fifty pounds, and shall further be personally liable to the holder of any such bill of exchange, promissory note, cheque, or order for money or goods, for the amount thereof, unless the same is duly paid by the com pany. (a) s. 41. The secretary of a limited company having accepted on behalf of the company a bill directed to the company, in which the word "limited," as part of its name, was omitted, was held personally liable on the bill, the same not having been paid by the company (a). (a) Penrose v. Martyr, E. B. & E. 499, under 19 & 20 Vict. c. 47, s. 31, the wording of which is identically the same as that of this section on this point. 43. Every limited company under this Act shall keep a Register of register of all mortgages and charges specifically affecting mortgages. property of the company, and shall enter in such register in respect of each mortgage or charge a short description of the property mortgaged or charged, the amount of charge created, and the names of the mortgagees or persons entitled to such charge: If any property of the company is mortgaged or charged without such entry as aforesaid being made, every director, manager, or other officer of the company who knowingly and wilfully authorizes or permits the omission of such entry shall incur a penalty not exceeding fifty pounds: The register of mortgages required by this section shall be open to inspection by any creditor or member of the company at all reasonable times; and if such inspection is refused, any officer of the company refusing the same, and every director and manager of the company authorizing or knowingly and wilfully permitting such refusal, shall incur a penalty not exceeding five pounds, and a further penalty not exceeding two pounds for every day during which such refusal continues; and in addition to the above penalty, as respects companies registered in England and Ireland, any Judge sitting in Chambers, or the Vice-warden of the Stannaries in the case of companies subject to his jurisdiction (a), may by order compel an immediate inspection of the register. (a) v. s. 35, sub tit. "Stannaries." Semble, this section is directory only, and a mortgage is not rendered Effect of nonvoid by want of registration (a). registration; But every one standing in a fiduciary position towards the company as regards is bound to see that the company obeys the directions of the Legislature; and therefore no director, manager, or other officer of the company can avail himself of a charge which is not registered. officers of Therefore in the winding-up of a company directors were not allowed Directors. to set up against the general creditors an unregistered charge on the property of the company (b). And where a solicitor not usually employed by a company was em- Solicitors. ployed by them to act in a particular matter, and, having required security for costs, they gave him a charge on certain debts due to them, but the charge was not registered, the solicitor could not avail himself of the charge in the winding-up; for it was his duty, so far as this North and South Wales Bank, L. R. 10 Eq. 515. (a) Ex parte Valpy and Chaplin, L. R. 7 Ch. 289. (b) He Wynn Hall Coal Co., Ex parte Power of companies to mortgage. Mortgage of calls. particular transaction was concerned, to see that the register was properly kept (a). An express power is not required to authorize a company to mortgage. A company, as a body corporate, can deal with its property as freely as an individual can, unless specially prohibited by its articles from so doing, and can therefore, in the absence of a prohibition in its articles, effect mortgages of its property. This power extends to a mortgage by deposit, and to the giving such a security as well for a past debt as for a future one (b). In the case of a company whose deed of settlement required that mortgages should be executed with certain prescribed formalities, a security given to the solicitors of the company, and not so executed, was held not binding on the company. In the case referred to, the deed required that mortgages should be sealed with the company's seal, be signed by two directors, and countersigned by the secretary or actuary; a deposit of title deeds with the company's solicitors, accompanied by a memorandum signed by the general manager, but not under the seal of the company, was held not to create a valid security, although there was evidence that the manager had been authorized by the directors to effect the loan and sign the memorandum (c). The fiduciary relation between the company and the mortgagees does not seem to have been much dwelt upon in the decision of this case; but it is conceived that it is in this fiduciary relation that the distinetion must be found between this case and a very recent case in the same company, and decided by the same learned judge, in which it was held that the formalities required by the company's deed for legal mortgages did not apply to equitable mortgages by deposit, and that such a security was therefore valid (d). The mortgage in this case was given to the bankers, as a collateral security for bills under discount. Under a power to mortgage, a mortgage of arrears of a call already made is valid (e), and so is a mortgage of the proceeds of a call not yet made, but already determined upon, although so determined upon with a view to giving a charge upon it (ƒ). And where the deed of settlement gave no express power of borrowing, but gave the directors large general powers, a charge upon the proceeds of a call already made, but not immediately payable, given to the bankers of the company as a security for moneys advanced to meet pressing demands, was valid (g). But a mortgage of the proceeds of a future call is invalid, for such a (a) Ex parte Valpy and Chaplin, L. R. 7 Ch. 289; see also Re General Prorident Assurance Co., 17 W. R. 514; 38 L. J. (Ch.) 320, noticed infra. (b) Re Patent File Co., Ex parte Birmingham Banking Co., L. R. 6 Ch. 83; and see Gibbs and West's Case, L. R. 10 Eq. 312. (c) Re General Provident Assurance Co., 38 L. J. (Ch.) 320; W. N. 1869, 58; 17 W. R. 514. (d) Re General Provident Assurance Co., Ex parte National Bank, W. N. 1872, 186. (e) Re Humber Ironworks Co., 16 W. R. 474, 667. (f) Re Sankey Brook Coal Co., L. R. 9 Eq. 721. (g) Gibbs and West's Case, L. R. 10 Eq. 312. charge would prevent the directors from freely exercising the discretion given them as to calling up capital (a). As to the inspection of the register of mortgages in the case of a Stannaries. company subject to the jurisdiction of the Stannaries Court, see sect. 35. entered in schedule. 44. Every limited banking company and every insurance Certain company, and deposit, provident, or benefit society under this companies to publish Act shall, before it commences business, and also on the first statement Monday in February, and the first Monday in August in every year during which it carries on business, make a statement in the form marked D. in the first schedule hereto, or as near thereto as circumstances will admit, and a copy of such statement shall be put up in a conspicuous place in the registered office of the company, and in every branch office or place where the business of the company is carried on, and if default is made in compliance with the provisions of this section the company shall be liable to a penalty not exceeding five pounds for every day during which such default continues, and every director and manager of the company who shall knowingly and wilfully authorize or permit such default shall incur the like penalty. Every member and every creditor of any company mentioned in this section shall be entitled to a copy of the abovementioned statement on payment of a sum not exceeding sixpence. 45. Every company under this Act, and not having a capital divided into shares (a), shall keep at its registered office a register containing the names and addresses and the occupations of its directors or managers, and shall send to the Registrar of Joint Stock Companies a copy of such register, and shall from time to time notify to the registrar any change that takes place in such directors or managers. (a) As to other companies, s. 26. 46. If any company under this Act, and not having a capital divided into shares, makes default in keeping register of its directors or managers, or in sending a copy of such register to the registrar in compliance with the foregoing rules, or in notifying to the registrar any change that takes (a) Ex parte Stanley, 33 L. J. (Ch.) L. R. 10 Eq. 381; and see King v. Mar 535; Re Sankey Brook Coal Co., (No. 2) shall, 33 Beav. 565. List of directors to be sent to registrar. Penalty on company not keeping register of directors. |