"The articles of association of the Direct United States Cable Company Ltd, registered under the Companies Act 1862 provided that no member would be allowed to vote on more than 100 shares at any meeting, and each block of ten shares was counted as one vote.

Mr Pender had split his votes and registered the holders under the names of a number of nominees.

He has a right, if he thinks fit, to give his vote from motives or promptings of what he considers his own individual interest.

This being so, the arguments which have been addressed to me as to whether or not the object for which the votes were given would bring about the ruin of the company, or whether or not the motive was an improper one which induced these gentlemen to give their votes, or whether or not their conduct shews a want of appreciation of the principles on which this company was founded, appear to me to be wholly irrelevant.

His Lordship then continued:—] It appears to me that it is plain from reading these articles alone that the articles meant to refer to a registered member, but I think it is made, if possible, plainer—though I doubt whether it could be made plainer when you come to consider that it would not be possible to work the company in any other way, for how else could the company hold meetings or demand a poll, or have the votes taken by the scrutineers?

— but if possible it is made plainer by the 19th article, which says: “The executors and administrators of a deceased member shall be the only persons recognised by the company as having any title to his share,” and also provides that “the company shall not be affected by notice of any trust.” And the 30th section of the Companies Act 1862, says: “No notice of any trust express, implied, or constructive, shall be entered on the register, or be receivable by the Registrar in the case of companies under this Act, and registered in England or Ireland .” It comes, therefore, to this, that the register of shareholders, on which there can be no notice of a trust, furnishes the only means of ascertaining whether you have a lawful meeting or a lawful demand for a poll, or of enabling the scrutineers to strike out votes.

The result appears to me to be manifest, that the company has no right whatever to enter into the question of the beneficial ownership of the shares.

Any such suggestion is quite inadmissible, and therefore it is clear that the chairman had no right to inquire who was the beneficial owner of the shares, and the votes in question ought to have been admitted as good votes independently of any inquiry as to whether the parties tendering them were or were not, and to what extent, trustees for other persons beneficially entitled to the shares.

I now come to the subordinate question, not very material in the view I take of the case, namely, whether you have the right Plaintiffs here.

The reasons given were reasons of some singularity, but there is no doubt of this, that under the articles the directors are the custodians of the seal of the company, and the directors, who in fact are Defendants, have certainly not given any authority to the solicitor for the Plaintiffs on this record to institute this suit in the name of the company as Plaintiffs.

It is equally clear, if I am right in the conclusion to which I have come as to the impropriety of the decision of the chairman in rejecting these votes, that it is a case in which the company might properly sue as Plaintiffs to restrain the directors from carrying out a resolution which had not been properly carried, and then comes the question whether I ought or ought not to allow the company now to remain as Plaintiffs.

The first point to be considered is this: Supposing there was no objection to the right of a general meeting to direct an action to be brought, could I, even in that case, allow the company to sue?

In that case the general meeting, having a right to direct an action to be brought, would act by the majority of the members.

A meeting could be called, and, if the Court was satisfied that the majority would direct an action to be brought, the company's name would not be taken away.

It would be an absolute denial of justice, and it appears to me that the Court of Appeal, in the case of MacDougall v Gardiner,[2] have deliberately adopted that view of the matter, as I read the following observations of Lord Justice James: “Any one of the shareholders might have filed his bill in the name of the company, and then, if the directors had said, ‘You are not the company; the majority do not act with you, but with us,’ the Court would, as it has done in other cases, have taken the means of ascertaining which party it is, the Plaintiff's or the Defendant's, which really represents the majority of the company.” I suppose he means that the Court may direct a meeting to be called.

But what is the Court to do in the meantime, if it is satisfied that a real majority decided in favour of bringing an action?

The only point on which I am asked to decide is to say they ought to have been passed, in other words, that there was a majority for them, and to restrain the Defendants until further order from acting in contravention of them.

It follows that, whether or not any reasons can be adduced at the trial to lead me to decide that the injunction shall be further continued, at the present moment it is my duty to say that the resolutions, being on the face of them quite legal, and having been passed by a majority, ought to be obeyed by the directors.

The summons will stand over till the trial or further order, with liberty to either party to call a meeting.