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bearing on votes and proxies is Re Belcher's Patent Smoke
Preventer Company Limited (21
,

“ The Accountant,” p. 1028), where it was held that proxies should be counted on a show of hands. In that case, it appeared that the directors had given notice of an extraordinary general meeting to pass a special resolution, and the question arose, which had to be decided by Mr. Justice Kekewich, was whether or not the resolution had been lawfully passed by the requisite majority of three-fourths. According to the Articles of Association, three persons present, either in person or by proxy, were to form a quorum at general meetings of the company. Here, only four persons were present, though the directors had proxies for nine other persons. It was contended for the directors that two members personally present and the nine proxies had voted for the resolution, as against two persons personally present who voted against it. On the other hand, it was argued that proxies could not be counted unless a poll was demanded. Mr. Justice Kekewich held that the chairman was entitled to record the votes, not only of those present in person, but also those present by proxy. These divergent decisions with regard to the question of proxies and votes can only be overcome by a proper clause being introduced into the Articles of Association of each company. Such contradictory judgments as these, though it must be assumed that there were some distinctive differences in each case for such divergent decisions to be given, remind one of the case of the sovereign and the shilling. One man had given another a sovereign under the impression that it was a shilling. The receiver, likewise, had the idea that it was a shilling, but subsequently finding out that it was a sovereign, spent it all. The question arose had there been larceny. A court of fourteen judges discussed the point, and the judgments curiously enough were alternately one in favour of the conviction, and the

next against, with the result that seven were for and seven against the conviction. The prisoner had been sentenced by the lower court to hard labour, and as the views of the higher court were equally divided, the sentence stood.

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A Partnership Point. The meaning of sect. 2 of the Partnership Act, 1890 icontaining the repealed Bovill's Act), was discussed in the case of Re Young ; ex parte Lloyd Jones. There it was laid down that the receipt of a sum of money, payable contingently on profits, was a receipt of a share of profits sufficient to cause a primâ facie partnership between payer and payee. The point was whether the payment of a fixed weekly sum out of the profits of a business was equivalent to "receiving a share of the profits ” within the meaning of the Partnership Act, 1890, so as to fix the fact that the person so receiving was a partner. According to an agreement between Young and Jones the latter was entitled to draw out of the profits of the business specified a weekly sum for such services and, at the end of a term of months, have the option of entering into partnership with Young. Jones paid into the banking account in his own name a sum of £500 to be treated as an advance of capital to the business, and this was to be used under the sole superintendence and control of Jones in defraying the trade business debts, and in discharging the current business liabilities during the continuance of the agreement, and he was to receive out of the profits of the business during the continuance of the agreement for the use of such loan a certain weekly sum. The option was never exercised, but the weekly payments were afterwards reduced. On the bankruptcy of Young his trustee rejected the proof of Jones for £663 on the ground of Jones being a partner, and Mr. Justice Vaughan Williams held that the rejection was right. Jones was entitled to a payment contingent on or varying with the profits of the business, and the receipt of such a payment was primâ facie evidence that Jones was a partner in the business. It was not, however, the intention of the parties to the agreement that there should be any partnership until Jones exercised the option given by him by the agreement of becoming partner. The £500 paid into the banking account by Jones was held to be a loan to Young, and it was paid in on a contract under which Jones was to receive a share of the profits. A contract that a person shall receive a fixed amount out of the profits is equivalent to a contract that he shall receive a share of the profits. An agreement for the receipt of a fixed sum out of the profits is an agreement for the receipt of a share of the profits.

Trustees' Investments and Depreciation. A decision which somewhat clears the path of those willing to fulfil the arduous duties of trustees was that of Re Chapman ; Cocks v. Chapman. There the testator had died in 1880, and part of his estate comprised mortgages on agricultural land, the value of which was falling. Looking at this impending depreciation the trustees took advice as to whether they should hold on, until the apparently temporary depression passed away, or get rid of the estate, and the advice given was to hold on. No improvement, however, resulted, and the trustees were sued for the loss incurred by the beneficiaries under the testator's will. The Divisional Court held that the trustees were liable, following in this case the old practice on the subject. The Court of Appeal, however, reversed this decision, and held that the trustees had only committed an error of judgment such as any one might commit. The evidence shewed that agricultural and other experts would have acted in exactly the same way under the same circumstances, and, therefore, there was no ground for suggesting that there had been any carelessness or neglect on the part of the trustees. The result of the decision, therefore, indicates that it is not actually necessary for an executor to realise his mortgage securities, unless the immediate distribution of the estate is in prospect. When a good mortgage security, in which the testator's property is invested, drops in value, this is not in itself any reason for accusing the trustees of breach of trust for not realising at the best time. As Lord Justice Lindley pointed out, there is no rule which compels the Court to hold that an honest trustee is liable to make good loss sustained by retaining an authorised security in a falling market if he did so honestly and prudently, in the belief that it was the best course to take in the interest of all parties. Since this decision has been given, there has been passed the Judicial Trustees Act, 1896 (59 & 60 Vic., C. 35), under which, if it appears to the Court that a trustee is, or may be, personally liable for any breach of trust, but has acted honestly and reasonably, and ought to be fairly excused for the breach of trust and for omitting to obtain the directions of the Court, the Court may relieve the trustee either wholly or partly from personal liability for the

This clause is now in force, and legal opinion seems to consider that it is in defiance of all usual equity rules, inasmuch as it makes the more innocent (the cestui que trust) of two innocent persons suffer.

same.

Preference Shareholders and their Shares. The decision in Andrews v. Gas Meter Company shews that it should be made clear whether articles can be altered by special resolution so as to allow of the issue of new preference shares. The memorandum of association of a limited company gave power to increase capital as provided by the articles of association. The original articles had no provisions authorising the raising of preference capital, ner as to the priority of different classes of shares. The articles were altered so as to allow of the raising of preference shares, but the Court held that the preference shares were issued ultra vires. It appeared that the company for thirty years paid a preferential dividend of 5 per cent. to the holders of the preference shares. The ordinary shareholders had received considerably more in the shape of dividends, but, nevertheless, there was a large surplus available for distribution. The question then arose as to the validity of the preference shares, and as to the right of the preference shareholders to participate in the distribution. Following the decision of Hutton v. Scarborough Cliff Hotel Co. (4 De Gex Jones and Smith), the Court said the company had no right to issue the preference shares, and, moreover, the holders of such shares could not be recognised as shareholders of the company. The only benefit these unfortunate shareholders got, was to have their money returned to them. There have been some other decisions in conflict with Hutton v. Scarborough Cliff Hotel Co. supra, e.g., British Corporation v. Cowper (1894) A.C. 399, but this decision was not followed.

Transfers, Calls, and Contributories. According to the decision in Re National Bank of Wales it would seem to be very imprudent to transfer shares during liquidation, unless the transferee is perfectly solvent. In this case the company was in voluntary liquidation. A shareholder, T., after the liquidation transferred his shares and the transferee transferred them to a third person, and all this was done with the liquidator's assent. A necessity for making calls arising, the question cccurred if T. could be placed on the list as a contributory, and the Court held

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