H. L. (So.) Lords with White Staves, and to be transmitted to the Lord Clerk Registrar of Scotland. 1875 MAR PEERAGE. Ordered, That at the future meetings of the peers of Scotland assembled under any royal proclamation for the election of a peer or peers to represent the peerage of Scotland in Parliament, the Lord Clerk Registrar, or the Clerks of Session officiating thereat in his name, do call the title of the Earl of Mar according to its place in the Roll of Peers of Scotland called at such election, and do receive and count the vote of the Earl of Mar claiming to vote in right of the said earldom, and do permit him to take part in the proceedings in such election. Agents for Lord Kellie: Grahames & Wardlaw. Agent for Mr. Goodeve Erskine: Preston Karslake. ON APPEAL FROM THE SUPREME COURT OF VICTORIA Shares-Invalid Forfeiture-Waiver-Acquiescence. There must be properly appointed directors to make a call or to declare a forfeiture of shares. A declaration of forfeiture (for non-payment of a call) of shares in a company registered in Victoria under 27 Vict. No. 228, was made on the 18th of June, 1869, by a resolution of the board of directors, consisting of a quorum of three, H., B., and A., who had been elected (with two others) at a quarterly general meeting of the company held on the 14th of April, 1869; which meeting had been convened by advertisement, published on the 8th, 10th, and 13th of April, for the election of a full board of directors. It appeared that H. and A. had been previously elected directors on the 14th of January, 1867, had not retired from office as provided by the rules of the company, but had continued to act as directors up to the 14th of April, 1869: Held, that the said meeting of the 14th of April, 1869, having been held without due notice thereof, according to the rules of the company passed under the provisions of 27 Vict. No. 228, and of the business to be transacted thereat, the election of a full board of directors thereby was invalid, and consequently the subsequent declaration of forfeiture of the 18th of June, 1869, was also invalid. Even if H. and A. had before that election legally held office, they could not thereafter act under their former title, for the election of a full board, though invalid, necessarily involved the retirement of those, if any, who up to that time had legally held the office of director. A declaration of forfeiture of shares invalid under the rules of a company registered under 27 Vict. No. 228, before Act No. 354 came into force, is not rendered valid by the latter Act. Mere laches does not disentitle the holder of shares to equitable relief against an invalid declaration of forfeiture. THIS was an appeal from a decree of the Supreme Court of the colony of Victoria in Equity dated the 8th of October, 1874, * Present:-SIR James W. CoLVILE, SIR BARNES PEACOCK, Sir Montague E. SMITH, and SIR HENRY S. KEATING. J. C. 1875 GARDEN GULLY UNITED QUARTZ MINING COMPANY v. MCLISTER. whereby it was declared that the forfeiture by the Appellant Company of certain shares held by the Respondent in the Appellant Company ought to be set aside, and that the Appellant Company should pay to the Respondent the dividends which had accrued due upon the shares in and since the month of July, 1871, after deducting certain unpaid calls thereon. The Appellant Company is a company duly registered and incorporated under the provisions of the Colonial Act, 27 Vict. No. 228, its memorial of registration being dated the 18th of June, 1866. The Respondent was, from the date of its incorporation, a holder of 2181 shares. The Appellant Company is carried on under certain rules and regulations made in the year 1866, in accordance with the Act 27 Vict. No. 228, and signed by a majority in number and value of the shareholders of the Appellant Company. The said rules and regulations, so far as they are material, are set out in the judgment of their Lordships. The Respondent filed his bill of complaint on the 21st of October, 1873. The facts of the case and the proceedings in the suit are sufficiently set forth in the judgment of their Lordships, from which it will appear that the question of the validity of the forfeiture, which was set aside by the above-mentioned decree, ultimately depended on the validity of the election of the persons who, assuming to be directors, declared that the Respondent's shares were forfeited for non-payment of a call purporting to have been made thereon. Mr. Fry, Q.C., and Mr. W. F. Robinson, Q.C., for the Appellants (after a preliminary objection by the Respondents that the appeal ought to have been made, under Colonial Act 19 Vict. No. 13, s. 5, to the full Court in Victoria had been overruled), contended that, having regard to the rules and regulations of the company, the board of directors by which the Respondent's shares were declared to have been forfeited was duly constituted and was competent to act, and that its resolution of the 18th of June, 1869, and the consequent forfeiture, were valid. The fifth call was duly made and advertised by the directors, and ought to have been paid by the Respondent. They relied upon the fact that the Respondent was present by proxy at the extraordinary meeting of the members of the company on the 16th of August, 1867, when a resolution was unanimously passed authorizing the directors to forfeit his shares. And, accordingly, at a directors' meeting duly convened by circular and held on the 23rd of August, 1867, a resolution was passed declaring the forfeiture of the Respondent's shares for nonpayment of calls, which resolution was confirmed on the 20th of September, 1867, at a directors' meeting duly convened for that day. This resolution was empowered by the resolution of the 16th of August, 1867, passed at a meeting at which the Respondent was present by proxy, and therefore no advertisement of the intention to forfeit was necessary. Again, the resolution of the 18th of June, 1867, was duly passed and advertised, and was in all respects a valid forfeiture of the shares. They relied upon Colonial Act No. 354, passed on the 29th of December, 1869, which, it was contended, removed any question as to the validity of so much of the original rules as related to forfeiture," and availed to establish the validity of any forfeiture effected under the resolution of the general meeting of the 16th of August, 1867: See sections 1, 2, and 4; and see Schmidt v. Garden Gully Company (1), and Barfold Estate Gold Mining Company v. Klingender (2). As regards the election of the directors, if any irregularity existed, the same did not invalidate the acts of the de facto directors in respect of the forfeiture, and such irregularity was waived by the company and the members thereof in general meeting, and also by the Respondent. Further, assuming that the Respondent had at any time a right to relief against the forfeiture, he nevertheless, by his acquiescence in his exclusion from the company and his delay in asserting his claim to relief, had lost all right thereto. Such conduct amounted to a waiver or abandonment of his shares and of his interest therein, and precluded him from contending that they had not been forfeited, or that he continued to be the proprietor of them. Upon this point of acquiescence they referred to Lawrence's Case (3); Senhouse v. Christian (4); Knight's Case (5), (1) 4 Australian Jurist, pp. 63, 137. (4) Reported in the note to Hart v. Clarke, 19 Beav. 356. (5) Law Rep. 2 Ch. Ap. 321. J. C. 1875 GARDEN GULLY UNITED QUARTZ MINING COMPANY v. MOLISTER. J. C. 1875 GARDEN where a resolution to forfeit was presumed: Norway v. Rowe (1); COMPANY Partnership [3rd ed.], vol. ii. p. 951; v. MCLISTER. Mr. De Gex, Q.C., and Mr. J. D. Wood, for the Respondent, contended that the Appellants were not entitled now to raise for the first time the two points of acquiescence and of a valid forfeiture made on the 23rd of August, 1867, such contentions not having been raised in the Courts below. Moreover, the question of acquiescence being one of fact as well as law, could only be disposed of after evidence duly taken under an issue raised for that purpose. But upon such facts as appeared upon the record there was no sufficient evidence of the Respondent having by his conduct waived his shares, acquiesced in their forfeiture, or estopped himself from averring that he continued to be the proprietor of them. Powers of forfeiture are strictissimi juris, they must exist by statute or the clear terms of a contract, and those terms must be strictly followed. There is no difference between Law and Equity in cases of this kind. The distinction is between executory and executed interests; in the former case it is necessary to be prompt. The Respondent had a legal interest in his shares, it was executed, and did not require the assistance of a Court to create it. The case, therefore, must be brought within the rule in Pickard v. Sears (7) in order to bind the Respondent by any alleged acquiescence. Clarke v. Hart (4), relied upon on the other side, was not the case of a corporation, but of a partnership, and therefore there might have been a waiver in that case; but mere laches. does not disentitle a Plaintiff to equitable relief. Prendergast v. Turton (8) was not even a case where the legal estate was in the person forfeiting; it was a case, also, of partnership, not of a (1) 19 Ves. 144. (2) 1 Y. & C. (N.S.) 98; before L. JJ. 13 L. J. (Ch.) 268. (3) 8 De G. M. & G. 787. (4) 19 Beav. 349; before L. JJ. 6 De G. M. & G. 232; 6 H. L. C. 633. (5) 24 Beav. 333; 2 De G. & J. 173. (6) 4 De G. & J. 437. (7) 6 A. & E. 469. (8) 1 Y. & C. (N.S.) 98; before L. JJ. 13 L. J. (Ch.) 268. |