J. C. 1875 GARDEN GULLY UNITED QUARTZ MINING COMPANY lowest number of votes at the January and July meetings respectively, and the election of others in their place. If the five persons who were directors on the 11th of April, 1867, are to be deemed to have been re-elected prior to the meeting of the 14th of April, 1869, they must, according to Rule 17, be deemed to have been re-elected at a general meeting in January, 1869, for they ought to have retired at that meeting if it had been held; MOLISTER. and in that case, if they had been re-elected, the three who had received the lowest number of votes (and which were those three it is impossible to say) ought to have retired at the meeting of the 14th of April, 1869. It would be a strong measure under any circumstances to hold that Hunter, who in April 1867 was in express terms elected for six months only, continued in office for two years. But the advertisement for the meeting in April, 1869, was express that the meeting would be held for the election of a full board of directors, and at that meeting a full board was elected. Their Lordships cannot treat the proceedings at the meeting of the 14th of April, 1869, as having any other operation than that of an election of a full board of five directors. They concur in the opinion expressed by Mr. Justice Molesworth, that those, if any, of the five directors who before that election legally held office, could not, after that election, act under their former title. The election of a full board necessarily involved the retirement of those, if any, who, up to that time, legally held the office of director. If the meeting of the 14th of April, 1869, is to be considered as an extraordinary meeting, fourteen days' notice of the meeting, and of the nature of the business to be transacted at it was necessary, and ought to have been published according to the provisions of section 23 of Act No. 228. If it is to be considered as the quarterly general meeting directed by Rule 8 to be held in the month of April, a similar notice was necessary under the provisions of that rule and of section 23, Act No. 228 above quoted, especially as the business of electing a full board of directors was not any part of the business of a meeting held in the month of April. In any view, the meeting of the 14th of April, 1869, was held without due notice of the meeting and of the business to be transacted thereat; and their Lordships are of opinion that the election of a full board of directors at that meeting, upon which the Defen v. dants relied in their answer, was invalid, and that the persons so elected had no power to declare a forfeiture. The forfeiture of the 18th of June, 1869, was consequently invalid, whether Rule 17 was a valid rule or not; for if it was invalid, Hunter, Bruce, and Ashley ceased to be directors after one year from the date of their appointments. Such forfeiture was, therefore, properly declared void by the decree of the 8th of October, 1874, from which this appeal is preferred. It was contended at the Bar, on behalf of the Appellants, that the Colonial Act, No. 354, passed on the 29th of December, 1869, rendered all forfeitures valid. The object of that Act was to authorize any company, registered under Act No. 228 to make rules in the manner pointed out by the 39th section, for the forfeiture of shares, and to declare that any such company should be deemed to have had such power. Section 2 rendered valid all forfeitures of shares made in conformity with such rules which would have been valid if the company at the time of declaring such forfeitures had had the power under any rules of declaring forfeitures; and section 4 expressly enacted that nothing theretofore contained should be deemed to confer upon any person any right or remedy which he would not have possessed, if the power to make rules for the forfeiture of shares had been contained in the said first-mentioned Act. It is perfectly clear that a declaration of forfeiture invalid under the rules of the company was not rendered valid by that Act. It was further contended that, by virtue of Rule 10, the resolution passed at the meeting of directors of the 18th of June, 1869, by which the shares were declared forfeited, could not be impeached upon any ground; but that rule applied to meetings of shareholders, and not to meetings of the directors, or to resolutions passed at a meeting of directors; and it is evident that such rule could not have been and was not intended to extend to resolutions passed at invalid meetings, or to resolutions which were ultra vires. If it could by possibility apply to such meetings, it would itself be ultra vires as enabling the directors to violate the provisions of Act. No. 228. The case was argued very elaborately and with great ability on both sides. Two points were raised on behalf of the Appellants which do not appear to have been even suggested in the Court below. They were certainly not set up by the answer, or even adverted to by the Court in the judgment or in the decree. They are, 1st, That the Plaintiff's shares were forfeited by a resolution of a board of directors on the 23rd of August, 1867. J. C. 1875 GARDEN QUARTZ MINING COMPANY V. 2ndly. That the conduct of the Plaintiff amounted to a waiver or abandonment of his shares, and precluded him from contending McLISTER. that they had not been forfeited, or that he continued to be the proprietor of them. It appears that on the 26th of July, 1867, an extraordinary meeting of shareholders was advertised for the purpose, amongst other things, of considering what action was best to be taken with defaulting shareholders; that on the 16th of August in that year an extraordinary meeting was held, at which the Plaintiff was present by proxy, and that it was there proposed and carried unanimously that the directors should be, and were thereby empowered to forfeit any shares on which calls were owing within fourteen days from that date, if they should deem the same advisable; and that at a meeting of directors held on the 23rd of August, 1867, it was proposed and carried that, in accordance with the resolution passed at the meeting of the 16th of August, the shares of the Plaintiff and of certain other specified shareholders should be and were thereby declared forfeited for non-payment of calls, and that their interest in the company should cease. It was contended on behalf of the Plaintiff that, as by Rule 30, it was provided that no forfeiture should be declared until seven days' notice should have been given to the defaulting shareholder by advertisement to be published, as therein mentioned, of the intention of the directors to forfeit such shares, an advertisement of the intention to forfeit the shares ought to have been issued before the forfeiture was declared: on the other hand, the Defendants contended that no such advertisement was necessary, at least so far as the Plaintiff's shares were concerned, inasmuch as he was present by proxy at the meeting at which power was given to the directors. It is clear, however, that the meeting neither gave nor intended to give power to the directors to forfeit shares in a manner contrary to the express provisions of the rules, and that the meeting had no power to do so. It was not the intention of the Plaintiff, voting by proxy, or of the other shareholders present, J. C. 1875 GARDEN GULLY UNITED QUARTZ MINING COMPANY v. MOLISTER. that the Plaintiff's shares, or those of any other shareholders present, should be forfeited in a manner different from that which would be binding upon other shareholders who were not present; and their Lordships are of opinion that, notwithstanding the resolution passed at the meeting of the 16th of August, every share-holder, including those present at that meeting, was entitled under Rule 30 to seven days' notice to enable him to pay his calls before a forfeiture of his shares could be declared; and that the forfeiture declared on the 23rd of August, 1867, was invalid. As to the second point, it appears that at a meeting, held on the 21st of May, 1869, at which Messrs. Hunter, Bruce, Ashley, and Wormald were present and acted as directors, and upon whose, or some of whose, proceedings the Appellants relied, both in their answer and at the hearing in the Court below, it was stated by themanager that the forfeiture of the shares already made, alluding to the forfeiture of the 23rd of August, 1867, was not legal, inasmuch as the clause in the company's deed requiring the shares to be advertised had not been complied with, whereupon it was moved and carried that the manager should be instructed to advertise the forfeiture of all shares on which the shilling call (that is the fifth call) had not been paid, unless the same and all back calls should be paid within twelve days from the date of the advertisement; that an advertisement was accordingly published on the 28th, 29th, and 30th of May, 1869, stating that, amongst others, the Plaintiff's shares would be forfeited, unless the calls were paid within twelve days from that date. It is clear that as late as the 30th of May, 1869, it was con-sidered by the manager and by a board of persons acting as directors, upon whose acts the company rested their case, that the Plaintiff's shares had not been legally forfeited, and that twelve days were given him to pay his calls. Up to that time, therefore, he cannot be treated by the Appellants as having abandoned his shares, or as having done anything to preclude himself from contending that they had not been forfeited, and that he was not thelegal proprietor of them. There is no evidence sufficient to induce their Lordships to hold that the conduct of the Plaintiff did amount to an abandonment of his shares, or of his interest therein, or estop him from averring that he continued to be the proprietor of them. There certainly J. C. 1875 GARDEN QUARTZ MINING COMPANY v. is no evidence to justify such a conclusion with regard to his conduct subsequent to the advertisement of the 30th of May, 1869. In this case, as in that of Prendergast v. Turton (1), the Plaintiff's interest was executed. In other words, he had a legal interest in his shares, and did not require a declaration of trust or the assistance of a Court of Equity to create in him an interest in them. Mere laches would not, therefore, disentitle him to equitable MCLISTER. relief: Clark and Chapman v. Hart (2). It was upon the ground of abandonment, and not upon that of mere laches, that Prendergast v. Turton (1) was decided. In March, 1870, the Plaintiff claimed his shares, and tendered the amount of his calls. The delay after that date in filing his bill was not evidence from which a waiver or abandonment of his right can be fairly inferred. There was some evidence as to statements having been made by the Respondent to the effect that he would allow his shares to be forfeited, as he could buy them for less than his calls; that the company might forfeit them, and that he did not see why they did not, and the like. The Respondent denied that he ever made the statements imputed to him. The Court below expressed no opinion upon that part of the case; nor was it necessary, as the point of abandonment, or estoppel, was not set up by the answer; nor, so far as it appears, at the hearing in that Court. Besides, the conversations in which the Plaintiff is alleged to have made those statements were long prior to the 30th of May, 1869, when the advertisement appeared giving the Plaintiff twelve days to pay his calls. Their Lordships are not disposed to hold parties too strictly to their pleadings in the Lower Courts; but they consider that it would be an act of great injustice to allow defences to be set up in appeal which have not been suggested or alluded to in the pleadings, or called to the attention of the Courts below. They do not, therefore, wish it to understood that by hearing the learned Counsel for the Appellant, and by expressing an opinion upon points which were not raised in the Court below, they would have felt themselves justified in reversing the decision of the Court below, if they had considered that the points thus raised constituted a defence to the Plaintiff's claim. (1) 1 Y. & C. Ch. 98. (2) 6 H. L. C. 633. |