The Universal Corporation, Ltd v. Hughes [1909] ScotLR 839 (05 June 1909)

The Universal Corporation, Ltd v. Hughes [1909] ScotLR 839 (05 June 1909)

Two calls made at the same meeting but payable at different dates are separate calls, not a single call, and do not infringe the article limiting the amount per call. The words 'from time to time' do not restrict the directors from making more than one call at a single meeting. The validity of the calls is not affected unless both are made payable at the same time, which would constitute a single call exceeding the limit.

Citation
[1909] ScotLR 839
Parties
Pursuer: The Universal Corporation, Limited; Defender: George Hughes
Jurisdiction
Scotland
Judgment Date
05 June 1909
Procedural Posture
Company Call Action / Appeal From Sheriff Court to Court of Session, Inner House
Outcome
Appeal sustained; interlocutors of the Sheriff and Sheriff-Substitute recalled; cause remitted for proof on notice; pursuers awarded expenses since 15th July 1908.
Legal Topics
Shareholder Calls, Articles of Association, Ultra Vires Acts, Notice Requirements
Company Law Shareholder Calls Articles of Association Ultra Vires Acts Notice Requirements

Case Brief

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Parties

The Universal Corporation, Limited

Pursuer

George Hughes

Defender

Procedural Posture

Company Call Action / Appeal From Sheriff Court to Court of Session, Inner House

Legal Issues

  1. 1 Whether two calls of 2s. 6d. each made at the same directors' meeting were separate calls or a single call exceeding the limit per share
  2. 2 Whether the calls were validly made 'from time to time' as required by the articles of association
  3. 3 Whether proper notice of the calls was given to the shareholder

Ratio Decidendi

Two calls made at the same meeting but payable at different dates are separate calls, not a single call, and do not infringe the article limiting the amount per call. The words 'from time to time' do not restrict the directors from making more than one call at a single meeting. The validity of the calls is not affected unless both are made payable at the same time, which would constitute a single call exceeding the limit.

Court Disposition

Appeal sustained; interlocutors of the Sheriff and Sheriff-Substitute recalled; cause remitted for proof on notice; pursuers awarded expenses since 15th July 1908.

Orders

  • Recall interlocutors of 3rd December 1908 and 3rd August 1908
  • Remit cause to Sheriff for proof on notice of calls