Liquidator of Union Club, Ltd, v Edinburgh Life Assurance Company
| Jurisdiction | Scotland |
| Judgment Date | 20 July 1906 |
| Date | 20 July 1906 |
| Docket Number | No. 171. |
| Court | Court of Session |
Lord President, Lord M'Laren, Lord Kinnear, Lord Pearson.
Assignation—Intimation—Assignation of Uncalled Capital—Statement of fact of Assignation in report by Committee of Management of Club read by Secretary of Club at general meeting.—
A club incorporated under the Companies Acts, in security of obligations undertaken by the club in the lease of the club premises, by relative minute of agreement assigned to the landlord the uncalled capital on its shares issued or to be issued. At a subsequent general meeting of the club, at which all the members were not present, the secretary read a report which contained a summary of the provisions of the lease and relative minute of agreement, and set forth that in security of these obligations the committee had assigned the uncalled capital to the landlord. Held that the assignation to the landlord of the uncalled capital had not been validly intimated to the shareholders, the members of the club, and that no preference had thereby been constituted in favour of the landlord.
In 1895 the Union Club, Limited, Edinburgh, was incorporated under the Companies Acts, 1862 to 1890.
By lease, dated 17th and 18th February 1896, the Club leased from the Edinburgh Life Assurance Company certain premises in Hanover Street, Edinburgh, at a yearly rent.
By minute of agreement between the Club and the Assurance Company, dated 25th February and 4th and 6th March 1896, the Club, in security of the obligations undertaken by them in the lease, assigned to the Assurance Company the uncalled capital of 5s. per share payable by the shareholders of the Club in respect of the shares of £1 each held by them on which the sum of 15s. had already been paid, and also the uncalled capital of 5s. per share which would become payable in respect of shares which might afterwards be issued.
The minute of the first general meeting of the members of the Club, held on 8th April 1896, bore that the secretary read a report by the Committee of Management. This report contained a summary of the provisions of the above lease and relative minute of agreement, and set forth as follows:—‘In security of these obligations the Committee has assigned to the Edinburgh Life Assurance Company the uncalled capital of 5s. per share.’
Another lease was entered into in November 1903 in which the Club assigned the uncalled capital. But, as it was not contended...
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