North British Railway Co. v. Wingate [1913] ScotLR 857 (15 July 1913)

North British Railway Co. v. Wingate [1913] ScotLR 857 (15 July 1913)

The Court held that the rights of deferred ordinary shareholders under section 47 of the North British Railway Act 1888 and the approved scheme were not altered by the Railway Companies (Accounts and Returns) Act 1911. Dividends on preferred ordinary stock must be calculated and paid out of the profits of each separate half-year, and any deficiency in one half-year cannot be made up from profits of subsequent periods or other funds. The 1911 Act did not affect these private rights, as it was concerned with public accounting and not with altering contractual/statutory entitlements.

Citation
[1913] ScotLR 857
Parties
First Party: North British Railway Company; Second Party: George Wingate
Jurisdiction
Scotland
Judgment Date
15 July 1913
Procedural Posture
Special Case (court of Session, Inner House, First Division) / Judgment on Questions of Law Regarding Dividend Calculation
Outcome
Second question of law answered in the affirmative; remaining questions not answered.
Legal Topics
Dividends, Preference Shares, Statutory Rights of Shareholders, Interpretation of Private and Public Acts, Accounts and Returns of Railway Companies
Company Law Railway Law Statutory Interpretation Dividends Preference Shares Statutory Rights of Shareholders Interpretation of Private and Public Acts Accounts and Returns of Railway Companies

Case Brief

Summary, issues, holding and outcome

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Parties

North British Railway Company

First Party

George Wingate

Second Party

Procedural Posture

Special Case (court of Session, Inner House, First Division) / Judgment on Questions of Law Regarding Dividend Calculation

Legal Issues

  1. 1 Whether the dividend on preferred ordinary stock must be paid only out of the profits of each separate half-year as per the North British Railway Act 1888, section 47, or whether the Railway Companies (Accounts and Returns) Act 1911 permits calculation and payment out of annual profits.

Ratio Decidendi

The Court held that the rights of deferred ordinary shareholders under section 47 of the North British Railway Act 1888 and the approved scheme were not altered by the Railway Companies (Accounts and Returns) Act 1911. Dividends on preferred ordinary stock must be calculated and paid out of the profits of each separate half-year, and any deficiency in one half-year cannot be made up from profits of subsequent periods or other funds. The 1911 Act did not affect these private rights, as it was concerned with public accounting and not with altering contractual/statutory entitlements.

Court Disposition

Second question of law answered in the affirmative; remaining questions not answered.

Orders

  • Holders of deferred ordinary stock are entitled to insist that dividends on preferred ordinary stock be paid only out of the profits of each separate half-year, and that deficiencies cannot be made up from subsequent profits or other funds.