Smith against Goldsworthy

smith against goldsworthy. Friday, January 28th, 1842. Where a defendant has obtained a Judge's order, and a rule of Court thereupon, for pleading several matters, a rule of this Court to add further pleas may be granted without reading the order and the former rule to plead, if it does not appear that the effect of such latter rule would be to reverse the Judge's order. This was an action brought by the secretary of the British Iron Company for calls. Kelly, in the present term, obtained a rule to shew cause " why the defendant should not be at liberty to add to the pleas already delivered in this cause the several pleas following; that is to say " &c.: giving a short abstract of the proposed pleas. The rule was drawn up on reading the declaration, and an affidavit, which was in substance as follows. The defendant took out a summons to shew cause at chambers why he should not be at liberty to plead the several matters specified in an abstract, which described shortly fifty-five proposed pleas; and the summons was attended before Wightman J. at chambers on December 3d, 1841, " when his Lordship made an order giving the defendant in this action liberty to plead the thirty-eight^pleas in the" "affidavit firstly [718] mentioned, subject to the consolidation of two as hereinafter mentioned ; but, "the pleas in the said affidavit lastly mentioned were not allowed by that order, although application for leave to plead them among others was made to Mr, Justice Wightman, who, upon hearing the summons taken out for that purpose, allowed the thirty-eight pleas in the said affidavit firstly mentioned, the defendant agreeing to consolidate the pleas stating the alteration in the amount of capital and number of shares into one, and the plaintiff undertaking not to demur specially to the consolidated plea for duplicity." The affidavit further stated that the proposed additional pleas were material and necessary to the defence. The rule was not drawn up on reading the order of Wightman J. or the rule to plead; nor did the terms of either appear, otherwise than as above stated. An affidavit in answer stated "That the right to plead the pleas now proposed to be added by the said defendant was fully discussed on the hearing of a summons to plead several matters, before Mr. Justice Wightman, in this cause, on the 3d day of December last, by counsel on both sides; when the learned Judge, after considering and going through the whole of the pleas, refused permission to the defendant to plead the said pleas." In this term (a), Sir W. W. Follett, Solicitor General, shewed cause. The application should have been to set aside the order of Wightman J. and the rule to plead ; and, on the present motion, if it could be entertained, both documents [719] ought to be before the Court. It was decided in The Smith Eastern Railway Company v. Sprut (11 A. & E. 167), that, where a plaintiff wishes to set aside pleas pleaded by a rule of Court or Judge's order, the motion must be to discharge the rule or order. If the rule to plead is to be varied, the Court must see what its terms are. [Patteson J. Probably the rule would not give any additional information. The order would be, that such and such pleas should be allowed. It would not be inconsistent with that decision to add others. Striking out some might be so. Lord Denman C.J. If the learned Judge has refused to allow the very pleas which it is now proposed to add, there ought to be strong reasons shewn for allowing them.] In the case just cited the Court would not give leave to strike out pleas, because the counts pleaded to were not brought before it by affidavit. The same objection, in principle, applies there. [Wightraan J. The application is, to add to some thing which is not before the Court.] Kelly and J. W. Smith, contra, were then called upon by the Court. If the applica-had been, in effect, to rescind the order, as in The South Eastern Railway Company v. (a) January 27th. Before Lord Denman C.J., Patteson, Coleridge, and Wightman Js. 2Q. B. 720. IN THE MATTER OF SAWYER 281 Sprot (11 A. & E. 167), it must undoubtedly have been before the Court. But the defendants here have acted upon the order, and are still relying on its authority. As to the rule; no attempt ia made to discharge or vary it. The determination of the Court in The South Eastern Railway Company v. Sprat (11 A. & E. 167), confessedly alters an existing practice, and cannot be taken to alter it in any but similar cases. The question here is, substantially, whether, on [720] this or any motion, it be necessary to draw up the rule on reading all prior proceedings in the cause, to which the rule may possibly refer ; or whether it be not sufficient to notice them, as far as occasion may require, in the affidavits. Here the affidavits state as much of the pleadings as is requisite for the information of the Court (a). It could not be necessary to incur the expense of setting out the pleas at large. The rule to plead would not shew fully that they were. The case, being different from that cited, is of the first impression; the defendants, therefore, even if they have proceeded erroneously, should be held entitled to the same indulgence which was granted in that case, and be let in to discuss the proposed application on its merits. [Lord Denman C.J. It is very inconvenient for this Court to be called upon to consider what pleas shall or shall not be allowed : and the application seems to be in the nature of an appeal. If the proposed addition is consistent with what the learned Judge has dotie already, I do not see why the parties should not go to him. As to the point of practice, I am inclined to think that we ought to have every thing strictly brought before us: but, as the question is depending in the other Courts also, we will speak to the rest of the Judges.] Cur. adv. vult. [721] Lord Denman C.J. now said : We have communicated with the other Judges and think it is not necessary that the order and rule to plead should be before us. The case will therefore go on. (Afterwards, with the consent of parties, it was ordered that the matters of the present rule " be referred to the Hon. Mr. Justice Wightman to direct as he shall think fit therein between the parties.")

[430] smith against goldsworthy (a). 1843. By a deed of settlement, reciting that certain persons had agreed to form themselves into a company for working iron mines, &c., it was covenanted that the parties should be and continue such company for the term of sixty-one years, unless sooner dissolved as in the deed was provided : that the company's capital should consist of two millions sterling, divided into 20,000 shares of 1001. each : that the management of the company should be confided to sixteen directors: and that the affairs and concerns of the company should from thenceforth be conducted and managed under and subject to the regulations, clauses and agreements after contained. These related to the calling of meetings, votes, resignation and appointment of directors, acquisition (a) For a preliminary point in this case, see Smith v. Goldsworthy, 2 Q. B. 717. *Q. B.CO. SMITH V. GOLDSWORTHY 961 and transfer of shares, making of calls, &c.; and clause 29 ordained that, for the better conduct and management of the affairs of the company, a special general meeting called for the purpose might from time to time amend, alter or annul all or any of the clauses of the deed, or of the existing regulations and provisions of the company, and make any new or other regulations and provisions in lieu thereof or in addition thereto. Provided that such amended or altered regulations and provisions should not extend to alter the regulations afterwards laid down in the deed, confining the individual responsibility of each proprietor as between himself and his coproprietors, for calls, debts, and other demands, to the amount of his share iu the company's capital for the time being. By other clauses provision was made for dissolving tbesociety by theresolution of aspecialgeneral meeting: and it wasordafned that the directors should never consist of more or fewer than sixteen, Held that, under clause 29, the company might, at a special general meeting, reduce the number of directors from sixteen to seven. Semble, that the amount of capital and value of shares were part of the constitution of the company, and that resolutions for reducing the capital to one million, divided into 20,000 shares of 501. each, were not warranted by clause 29, though they were not forbidden by the proviso, Aud Held that such resolutions, if illegal, were not ratified by a subsequent Act of Parliament (3 & 4 Viet. c. xcvi.) reciting that the company's affairs had been carried on under the regulations of the deed of settlement, as such regulations had sinee been varied or altered by resolutions of the company made in pursuance of powers for that purpose contained in the deed, and which resolutions had been subjoined to the deed : because the Act could only be taken to contemplate resolutions legally made : and because it was not shewn that in fact the new resolutions had been subjoined. But Held that the resolutions for altering the capital and shares, if illegal, did not dissolve the company, but were simply inoperative; that tha mere fact of their having passed was no defence to an action for calls since made : that, at any rate, a party who had taken shares after the resolutions passed could not allege that no company then existed : and that, assuming the shares to have been at one time reduced de facto to 501., it was a material question on the pleadings in such action, whether the defendant had not afterwards, and before the calls were made, concurred in a resolution...