Nashua Savings Bank v. Anglo-American Land, Mortgage & Agency Co.
Headline: Court upheld a company's right to collect a directors’ assessment from a shareholder, allowing official English statutes and company articles as proof and making unpaid share calls recoverable.
Holding: The Court affirmed that a corporation may recover a directors’ assessment from a member because the registered articles and English statute make unpaid calls a debt, and posted and mailed notice met the articles’ requirements.
- Allows companies to recover unpaid share calls as debts.
- Permits official printed foreign statutes to prove corporate authority.
- Limits court review of directors’ assessments absent evidence of fraud.
Summary
Background
A company organized under English law sued a bank to collect an unpaid assessment that the company’s directors imposed on shares. The company’s managing director, who was also an English attorney, testified and produced printed copies of English statutes and the company’s amended articles that authorized directors to make calls on unpaid shares. The bank objected, arguing that the foreign statutes were not properly proved and that the declaration lacked details such as notice and an express promise to pay.
Reasoning
The Court considered whether the assessment was properly proved and enforceable. It allowed the managing director to authenticate the printed English statutes and the articles under the local practice of evidence. The Court explained that the registered articles and the English statute (25 and 26 Vict. chap. 89) bind members and make moneys payable under calls a debt, so no separate written promise was required. The Court also said directors may decide when to levy calls and courts will not question those decisions unless there is fraud. Notice posted at the register’s office and mailed to the bank satisfied the articles’ rule. Sale or forfeiture of shares is an additional remedy, not a required step before suing for the debt.
Real world impact
The decision affirms that companies can enforce directors’ calls as debts when their articles and the governing statute authorize them and notice is given. It makes it easier for companies to use official printed foreign statutes to prove incorporation and obligations. The Court did not decide whether a call could be overturned for fraud because no such evidence was offered.
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