By the articles of association the directors were empowered, with the sanction of the company previously given in general
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On 14th November 1900 Waddie & Company, Limited, and the individual shareholders of the company (with the exception of the said Charles John Waddie, who was called as a respondent) presented this petition, in which they craved the Court “to direct a memorandum in writing in the form in the appendix hereto, or in such other form as shall be approved by your Lordships specifying the considerations for which the said shares were issued, to be filed with the Registrar of Joint-Stock Companies in Scotland, and to direct that on such memorandum being filed within such time as your Lordships shall appoint, it shall, in relation to the whole of the said 3000 shares in the said company of Waddie & Company, Limited, operate as if a sufficient contract in writing within the meaning of said section 25 of the Companies Act 1867 had been duly filed with the registrar aforesaid before the issue of such shares or any of them to the said Charles Maule Waddie and Mrs Lilias Waddie or Ward and their said nominees.”
The memorandum which the petitioners craved authority to register declared as follows:—“The after mentioned 1000 preference shares and 2000 ordinary shares of £10 each in Waddie & Company, Limited, were (with the exception of the 100 preference shares, Nos. 501 to 600 inclusive, originally issued to Cecilia Jane Gregor or Waddie, wife of the after-mentioned Charles Maule Waddie, and now held by the said Charles Maule Waddie) issued as fully paid up to the several persons after named and designed in satisfaction of part of the con sideration agreed to be given by the said company to the said Charles Maule Waddie and Mrs Lilias Waddie or Ward as joint—proprietors of the business of manufacturing stationers, printing engineers, bookbinders, lithographers, and publishers carried on by them at St Stephen's Works, St Stephen Street, Edinburgh, in partnership under the style of Waddie & Company for the purchase of (1) the heritable property on the south side of St Stephen Street, Edinburgh, the property upon which the said business was carried on, and the goodwill of the said business; (2) the monies, bills, notes, and other negotiable instruments and securities for money, and the book and other debts and claims of the said partnership, and the full benefit of all contracts to which the said Charles Maule Waddie and Mrs Lilias Waddie or Ward were entitled in relation to the said business; and (3) the plant, machinery, patent rights, furniture, stock-in-trade, books, and effects of the said partnership in or about the said property, conform to minute of agreement between the said Charles Maule Waddie and Mrs Lilias Waddie or Ward as partners foresaid, and the said Waddie &
Company, Limited, dated the 5th day of July 1890, which minute of agreement was adjudicated as duly stamped on 30th July 1890. Said 1000 preference shares and 2000 ordinary shares are now held by the following persons as follows”—(From the list of shareholders appended to the memorandum it appeared that they were the same as those who subscribed the memorandum of association, and that they held the same shares, except that the shares Nos. 501 to 600 inclusive subscribed for by Mrs Cecilia Waddie had been transferred to Mr Charles Maule Waddie). The petitioners averred that the company was perfectly solvent, and that it paid substantial dividends.
The Companies Act 1867, section 25, enacts as follows:—“Every share in any company shall be deemed and taken to have been issued and to be held subject to the payment of the whole amount thereof in cash, unless the same shall have been otherwise determined by a contract duly made in writing, and filed with the Registrar of Joint-Stock Companies at or before the issue of such shares.”
The Companies Act 1898, section 1, enacts as follows:—“(1) Whenever before or after the commencement of this Act any shares in the capital of any company under the Companies Acts 1862 and 1890, credited as fully or partly paid up, shall have been or may be issued for a consideration other than cash, and at or before the issue of such shares no contract or no sufficient contract is filed with the Registrar of Joint-Stock Companies in compliance with section 25 of the Companies Act 1867, the company or any person interested in such shares or any of them may apply to the Court for relief, and the Court, if satisfied that the omission to file a contract or sufficient contract was accidental or due to inadvertence, or that for any reason it is just and equitable to grant relief, may make an order for the filing with the registrar of a sufficient contract in writing, and directing that on such contract being filed within a sufficient period, it shall, in relation to such shares, operate as if it had been duly filed with the registrar aforesaid before the issue of such shares.… (4) Where the Court in any such case is satisfied that the filing of the requisite contract would cause delay or inconvenience or is impracticable, it may in lieu thereof direct the filing of a memorandum in writing in a form approved by the Court specifying the consideration for which the shares were issued, and may direct that on such memorandum being filed within a specified period, it shall, in relation to such shares, operate as if it were a sufficient contract in writing within the meaning of section 25 of the Companies Act 1867, and had been duly filed with the registrar aforesaid before the issue of such shares. The memorandum shall before the filing thereof be stamped with the same amount of ad valorem stamp-duty as would be chargeable upon the requisite contract, unless the contract has been produced to the registrar duly stamped, or unless the registrar is otherwise satisfied that the contract was duly stamped.”
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Argued for the petitioners—The shares for which the petitioners had subscribed the memorandum of association were “issued” to them within the meaning of section 25 of the Companies Act 1867 immediately upon the registration of the company— Dalton Time Lock Company v. Dalton (1892), 66 L. T. 704. Consequently no contract had been filed in terms of that section at or before the issue of the shares. It was therefore necessary, and in the circumstances equitable, that the petitioners should be authorised to file a memorandum as provided by the Companies Act 1898. There was no difficulty in identifying the shares in respect of which relief was sought, as the whole shares of the company had been subscribed for in the memorandum, and were still held, with the exception of those transferred by Mrs Waddie to her husband, by the original subscribers. The present case was distinguished from Jarvis & Company, Limited [1899], 1 Ch. 193; and was ruled by Whitehead & Brothers, Limited [1900], 1 Ch. 804.
The Court pronounced the following interlocutor:—
“Direct a memorandum in writing in the form in the appendix to the petition specifying the considerations for which the said shares were issued to be filed with the Registrar of Joint-Stock Companies in Scotland within twenty-one days hereof, and on such memorandum being filed, appoint that it shall, in relation to the whole 3000 shares in Waddie & Company, Limited, operate as if a sufficient contract in writing, within the meaning of section 25 of the Companies Act 1867, had been duly filed with said registrar before the issue of such shares, and decern.”
Counsel for the Petitioners— Lorimer—J. B. Young. Agent— A. C. D. Vert, S.S.C.