National House Property Investment Co., Ltd v. Watson [1908] ScotLR 712 (05 June 1908)

National House Property Investment Co., Ltd v. Watson [1908] ScotLR 712 (05 June 1908)

The agreement to set off calls against fees was ultra vires of the directors and vitiated the contract; the defender was not a shareholder and not liable for calls.

Citation
[1908] ScotLR 712
Parties
Pursuer: National House Property Investment Company, Limited; Liquidator: James Mills Franklin; Defender: John Watson
Jurisdiction
Scotland
Judgment Date
05 June 1908
Procedural Posture
Company Law Action for Payment of Calls / Appeal (reclaiming Motion) From Lord Ordinary's Decision
Outcome
Defender assoilzied (absolved); action dismissed.
Legal Topics
Shareholder Liability, Ultra Vires, Conditional Share Applications, Set Off of Calls Against Fees
Company Law Shareholder Liability Ultra Vires Conditional Share Applications Set Off of Calls Against Fees

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Parties

National House Property Investment Company, Limited

Pursuer

James Mills Franklin

Liquidator

John Watson

Defender

Procedural Posture

Company Law Action for Payment of Calls / Appeal (reclaiming Motion) From Lord Ordinary's Decision

Legal Issues

  1. 1 Whether the defender became a shareholder subject to conditions precedent or subsequent
  2. 2 Whether the agreement to set off calls against fees was ultra vires of the directors

Ratio Decidendi

The agreement to set off calls against fees was ultra vires of the directors and vitiated the contract; the defender was not a shareholder and not liable for calls.

Court Disposition

Defender assoilzied (absolved); action dismissed.

Orders

  • Court adhered to Lord Ordinary's decision; defender absolved from liability for calls.