He then quoted the Sale of Land by Auction Act, 1867, which put an end to the previous practice of opening biddings made or given at an Auction under the direction of the Court merely upon the ground that a higher bid had subsequently been received. And he said that the Sale could not be confirmed because and only because the bidder had not bid up to the reserve price fixed by the Judge. This was the minimum figure which by mistake and in contravention of the direction of the Judge in person was supplied to the Auctioneer. He said further:

"This is not a case in which a mistake has been made by a vendor or his agent. The mistake was made by an officer of the Court. I should be sorry to think that, owing to a mistake of one of its officers, the Court is bound to give effect to a sale in such circumstances as to deprive the persons interested of their property at far less than the price which the judge had determined was the lowest price which could be accepted."

This apparently simple case occupies some 10 pages of a Report and has about 30 authorities cited pro and con and by the Judge. Yet the whole issue seems to rest on this: that the condition of the Sale had not been complied with-the condition, namely, that the highest bidder above the reserved price fixed by the Judge should be the purchaser. The bid of the man who claimed to be purchaser was far below the reserve price. The reserve price was never reached, and the mistake could not possibly make into a contract what was never intended to be contract.

The following, however, out of a mass, may be referred to:

Anonymous, 1794; 19 Ex parte Minor;20 Twigg v. Enfield; Sugden V. & P.22

A Slip Through an Insurance Policy.

Mumford v. Pennsylvania Company for Insurance, &c.,23 is an interesting case which was before the Court of Appeal in England very recently.

19 2 Ves. Jun. 335.

20 1805, 11 Ves. Jun. 559.

21 1807, 13 Ves. Jun. 519.

22 13 Ed. p. 79, 14 Ed. p. 101.

23 36 T. L. R. 423.

The Insurance was one against the loss by robbery of Employes, etcetera, of securities "which now are or by the assured are supposed or believed to be, or during the twelve months of the Insurance may be upon the assured's premises;" or by reason of such securities being stolen or lost "while in tranbetween any houses or places."

sit .

An employe of the Plaintiff-the Secretary of the Company-had managed to get delivery to himself of securities belonging to some ladies which had been deposited with the Plaintiff Company. He effected this by forged receipts and withdrawal cards. He appropriated the whole of them amounting to some £147,000. The Company believed these securities had been delivered to the women; and the women, of course, believed they were still with the Company. Williamson, the Secretary, had stolen them, and kept the crime secret from the women for some year or two by sending them regularly the interest.

The Plaintiffs made good the loss to the ladies, and then sued the Insurance Company. They failed utterly on the clear wording of the Insurance that the Securities were not in fact and were not believed by the Plaintiffs to be on their premises. They believed, as already stated, that they were withdrawn by and that they had been handed over to the women who owned them. This was the fraud of the Secretary.

N.B.-It is a hard case. But it shows how highly elusive are the most comprehensive Insurance Policies. The securities were stolen, no doubt, but they were not in fact on the premises, or believed to be on them, during the currency of the Policy. But the loss itself was intended to be covered in any event as is shown by the fact that the Insurance Company paid up £20,000 and claimed that was all it was liable for. It only raised the questions which upset the action when pressed to pay the difference between 20 and 147 thousand pounds.

VOL. XL. C.L.T.-40

The Lawyers did this. But I take this chance of saying there are very few men who really know how to draw up a general obligation of any sort so as to make it effectual. I have seen many attempts. They all particularize with regard to some condition or other which, though thought to be all embracing, yet invariably by strange combinations of fact or circumstances proves to be defective.

This is just where skill contrasts with slap-dashery which is the system to-day in drawing documents where there is no "precedent."

Company Law; Altering Articles for Compulsory Transfer of Shares.

Dafen Tinplate Company v. Llanley Steel Company is a case where a Company under the powers conferred by the Company's Act passed a special resolution to alter its articles by adding a power enabling the Company in general meeting to require any shareholder to transfer his shares to such persons as the Board of Directors should think fit.

The Plaintiff Company was a shareholder of the Defendant Company, whose principal other shareholders were Steel, Iron and Tinplate Companies, including the Briton Ferry Company whose name will re-appear again. It was in the same business as, but not in the same area or district and not in competition with, the Defendant Company. Its Managing Director was also Managing Director of the Defendant Company.

In 1912 the Plaintiff Company and its Managing Director formed the Bynea Steel Works, Limited, whose works were close to the Defendant Company; and after 1913 the Plaintiff Company patronized the products of the Bynea Company and not those of the Defendant Company.

It was a large shareholder in both. These facts are most important:24 36 T. L. R. p. 428.

(1) The Defendant Company, with the Plaintiff Company, one of its largest shareholders.

(2) The Plaintiff Company starts the Bynea Company-virtually a rival concern of the Defendant Company-and patronizes its products instead of those of the Defendant Company.

(3) The Plaintiff Company, a Shareholder of both and possibly using its knowledge of the one, in the interest of the other.

Here were antagonistic interests, and about 1918 it was endeavoured to buy up the shares of the Plaintiff Company in the Defendant Company. The price could not be adjusted though, if it could be, willingness to sell and buy was mutually expressed.

Then the Defendant Company passed this special resolution:

(a) That the company in general meeting may determine that the shares of any member (other than the Briton Ferry Company) shall within 50 days after passing such resolution, be offered for sale by the Board to such person as the Board shall think fit. at the fair value thereof, to be ascertained in accordance with Article 42a.

This Article 42a virtually made the Directors arbitrary assessors in matter of price of voluntary sales of shares; and whether the price so assessed was accepted or not, it effected the expulsion of the member selling his shares under it from membership.

The object of this was without a doubt to get rid of the Plaintiff Company from the Defendant Company. But this object does not appear. The new article is general, and not directed to anything particular against Plaintiff or in the interest of the Defendant Company. Sidebottom v. Kershaw 25 was relied upon as containing the principle on which the new article of association was founded.

Now the notes on this last named case in the CANADIAN LAW TIMES of April last, p. 322, clearly bring it out that a resolution authorizing a Company to buy up the shares of any of its members, carrying on a com

25 1920, L. R. Ch. p. 154, and C. L. T., 1920, p. 322.

petitive business with it, must be "bona fide, in the interest of the Company and not merely to promote the personal aim of some of its members."

If it is that, it cannot be impugned. But in the case of the Dafen Company v. Llanley Steel Company the new article went beyond that. It enabled the majority of the Shareholders to compel any of the Shareholders (except one, the Briton Ferry Company) to transfer their Shares quite irrespective of their doing anything to the detriment of the Company.

Peterson, J., said:

"As drawn, the resolution authorizes the majority at their will, and without any reason other than their desire to get into their hands the whole of the shares of the company, to expropriate the shares of the minority."

Thereafter referring to Allan v. Gold Reef Co." and Brown v. British Abrasive Wheel Co." and the case of Sidebottom v. Kershaw, above cited, said:

"What I have to decide is whether the alteration of the articles
as proposed .
can properly be said to be for the

benefit of the company.

"It may be for the benefit of the majority of shareholders, but how can it be for the benefit of the company, that any shareholder against whom no charge of acting to the detriment of the company can be urged . . . should be forced to transfer his shares to the majority, or to anyone else.

Such a provision might be very detrimental and prejudicial to the company's interest. For instance on an issue of new capital, the knowledge that he might be expropriated as soon as the capital was on the point of producing profitable results, might well exercise a deterrent influence on a man who was invited to take shares in the company. In my view it cannot be said that a power, on the part of a majority to expropriate any shareholder at their will or pleasure, is for the benefit of the company as a whole.

"Such a power can not be supported unless it is bona fide or genuinely for the company's benefit."

Here it is not. Besides the Briton Ferry Steel Company was excluded. The exclusion places this Company, as a Shareholder, in a position of privilege. If altered at all the articles must apply to all alike.

26 1900, 1 Ch. 656.
27 1919, 1 Ch. 290.