Clay v Rufford
| Jurisdiction | England & Wales |
| Judgment Date | 30 July 1852 |
| Date | 30 July 1852 |
| Court | High Court of Chancery |
English Reports Citation: 64 E.R. 1337
HIGH COURT OF CHANCERY
See Grant v. United Kingdom Switchback Railways Company, 1888, 40 Ch. D. 137.
[768] clay v. eufford. June. 11, 12, 25, July 2, 30, 1852! [See Grant v. United Kingdom Switchback Railways Company, 1888, 40 Ch. D. 137.] By the terms of the deed of settlement of a Joint Stock Salt Company it was declared that the company was formed for the purpose of manufacturing salt on their works, and on such other hereditaments near thereto as might be purchased, and for vending the salt. Power was given to the directors to sell, exchange and lease all or any of the partnership property, and to enter into any contract ; and the receipt clause provided that no lessee or purchaser should be bound to ascertain the regularity of any proceeding under the authority of that deed. It was also provided that no new rule or regulation altering the fundamental constitution of the partnership should be binding, unless confirmed by two-thirds of the 'votes of the partners present at two successive general meetings. The company purchased works and carried on the manufacture of salt. In consequence of the rivalry of the Joint Stock Alkali Company, the business was carried on at a loss. After negotiation, the managing director on behalf of the Salt Company, and a director on behalf of the Alkali Company entered- into and signed an agreement, dated in May 1846, whereby the former agreed to lease for the term of twenty-one years all their works to the latter at a specified rent. It was a term of the agreement that the lease should contain an option to the Alkali Company to purchase the works at any time within twenty-one years at a price named ; the agreement was to be subject to the consent of the proprietors of the Salt Company. At a meeting of proprietors properly convened, held in June 1846, it was unanimously resolved that the agreement should be confirmed. The Alkali Company entered into possession of the works ; disputes arose as to the state of the repairs, and the managing director for and oil behalf of the Salt Company, by bill, alleged that the parties to the agreement were respectively duly authorised by their respective companies to enter into the agreement, and also the confirmation thereof by the general meeting of the Salt Company, and sought to enforce the specific performance of the agreement. The answer admitted the due authority of the director of the Plaintiffs' company to enter into the negotiation, and that the general meeting authorised its being carried out, and no objection was taken to the agreement as being ultra vires. Held, that the directors had a power to lease or sell, or to do both ; but that the giving an option to the Alkali Company, extending over twenty-one years, to purchase or not, at a price now fixed, was beyond the powers of the managing body ; and that a confirmation by a meeting of the shareholders could not effectually sanction the contract ; also, that the consent of every member of the company was necessary to give validity to the contract ; and that this objection was available to the Defendant at the hearing, notwithstanding the admissions in the answer, and that it had not been taken on the pleadings. The Court was willing to give the Plaintiffs an opportunity to obtain the .consents of each proprietor individually; but, it being admitted that some of them were under disability, it dismissed the bill without costs. The Defendant's case was that a verbal agreement was added to the written agreement, as a part of it,! as to repairs, and that the Plaintiffs had not done the repairs agreed on, which disentitled them to enforce specific performance; and he filed a cross-bill to obtain discovery and evidence in support of this defence. 1338 CLAY V. HUFirOBD 5 DEG.& SM. 769. This ground not being in accordance with the view which the Court took of that defence, the cross-bill was dismissed with costs. . Where specific performance of a binding contract is sought, and there is a reference to the Master to look into the title, or to ascertain who the parties to the conveyance are, that reference enables the vendor to make good any defect in his own title, or to procure a conveyance up to the date of the Master's report and of the decree; and there are cases in which an Act of Parliament, has been obtained to remove defects; but when the Court had come to the conclusion upon the evidence that there was no binding contract, and refused to decree specific performance on the ground that the assent of the proprietors was a term of the contract, and that, at the hearing, such consent was not proved, the Court declined to refer it to the Master to inquire whether the required consent could be obtained, or to make any reference to the Master. Where a Plaintiff has failed at the hearing to prove his title to a decree for a specific performance on a point not raised by the pleadings, the, Court dismisses the bill, without prejudice to any other bill that the Plaintiff may be advised to file. This was a suit by Mr. Clay and others, suing on behalf of themselves and the other members of the Droitwich Patent Salt Company, against Mr. Thomas Eufford. [769] The following is a short statement of the circumstances out of which this suit arose, as they were represented on behalf of the Plaintiffs. The Droitwich Patent Salt Company, a joint stock company consisting of many hundred members, was constituted by an indenture, dated the 1st of March 1826. The clauses in this indenture, so far as they are important in reference to the questions in this suit,, are stated with sufficient particularity in the judgment of the Vice-Chancellor. (See post, pp. 777, 778.) Mr. Francis Eufford, the sole Defendant, was one of the board -of directors, and a trustee and member of the British Alkali Company, and was duly inrolled as such in pursuance of the provisions of the Joint Stock Companies Act. And by an Act of Parliament, passed in the year 1836, the British Alkali Company was enabled to sue and be sued in 'the name of the secretary, or of any one member for the time being of the company; and Mr. Eufford was made the sole Defendant as representing that company. The Droitwich Patent Salt Company carried on the manufacture of salt on the premises at Droitwich until the month of May 1846, at which period the company was entitled to certain parcels of lands, messuages and buildings, brine springs, pits, wells, salt works, lead works and wharfs, subject to an equitable lien for the sum of 3000 ; [770] and the company was also possessed of a plant, steam-engines and other apparatus, stock of salt, boats and machinery used in carrying on the manufacture and trade of the company. A negotiation was at that time opened between the Droitwich Patent Salt Company and the British Alkali Company for a lease or some other transfer by the Droitwich Patent Salt Company of all their property and works at Droitwich to the British Alkali Company; and such negotiation was carried on by William Clay on behalf of the Droitwich Patent Salt Company, and by Francis Eufford on behalf of the British Alkali Company; and the last-named Plaintiff and the said Defendant were duly authorised by the companies to which they respectively belonged to enter into such negotiation, and to execute the contract hereinafter set forth. An agreement, dated the 5th day of May 1846, was drawn up in writing and signed by the last-named Plaintiff and the said Defendant, Francis Eufford, in the words and figures or to 'the purport and effect following, that is to say : "...
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...grant an option is inconsistent with the free right to sell, but a company can deprive itself of the right to sell; (c) Clay v Rufford (5 de G. & Sm. 768; 64 E.R. 1337) and the cases following it, quoted by the Court a quo are decisions on the limited powers in English Law, of trustees to s......
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...They referred to Reid v. Shergold (10 Ves. 370), Orel v. Noel (5 Madd. 438), Cockerell v. Cholmky (1 Cl. & Fin. 60), Clay v. Euffard (5 De G. & Sm. 768), Gu&rreiro v. Peile (3 B. & A. 616), Sugden, Vend. & Pur. p. 53 (13th edit.), Orme v. Wright (3 Jur. 19), Matthie v. Edwards (2 Coll. 465;......
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Cairns (Pty) Ltd v Playdon & Co, Ltd
...a conclusion which in the circumstances was understandable enough. The cases on which they rested their judgment (Clay v Rufford (5 de G. & Sm. 768); Oceanic Steam Navigation Company v Sutherbury (43 L.T.R. 743); Johnson v Clark (1928, Ch. 847); and Sandground v Eloff (1903, T.S. 787)) were......
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