W. Morrison & Co., Ltd Petitioners

Subject_1 Company Subject_2 Reduction of Capital Subject_3 Confirmation of Resolution to Reduce Subject_4 Replacing of Lost Capital — Incompetent Procedure — Companies Act 1862, secs. 9 and 19 — Companies Act 1877, 3 and 4 . Facts: The Court refused to confirm a special resolution of a joint stock company, which purported to reduce the capital of the company, but which really only reduced the amount paid up upon each share with the view of thereby replacing certain capital which had been lost.

Upon 14th May 1892 W. Morrison & Company, Limited, printers and publishers, Hawick, presented a petition to the First Division of the Court of Session under the Companies Act 1867, sections 9 and 19, and the Companies Act 1877, sections 3 and 4, praying the Court, after due intimation and advertisement, “to pronounce an order confirming the reduction of capital resolved on by special resolution of 23rd March 1892.”

Upon 1st June 1892 the Court remitted to Mr Charles B. Logan, W.S., to inquire and report as to the regularity of the proceedings, and the reasons for the proposed reduction.

Argued for the petitioners—They might have reduced their capital by one resolution, and replaced it, in the way suggested by the reporter, after a second resolution. That they had sought to attain their object by a different method set forth in one resolution did not make the resolution to reduce incompetent. That resolution ought to be confirmed.

Lord Kinnear —I am of opinion that the objection, which the reporter has stated to the proposal here, is perfectly well founded, and I do not think that that objection could be more clearly brought out than by comparing the prayer of the petition with the statement of the reporter as to what the company really proposes to do.