dividend as have accrued in the immediately preceding years. As the whole capital has earned the profit above what is necessary to pay the statutory dividend, so the whole capital should receive the benefit of being paid back dividends. In this way the previous deficiency of the smaller capital will be at last reached and made good to the holders of the shares representing the then capital.

By their special act a gas company established before 1847 were authorized to pay dividends limited to 10 per cent., and when that sum was reached, if there was a surplus, the price of gas was to be reduced; there was also a provision for a reserve or contingent fund, to be limited to 5,000/.; afterwards the dividends and interest thereon were to be no longer invested, but applied to any of the general purposes of the undertaking to which the profits of the company were applicable. By another section of the act it was enacted, that if in any year after the passing of the act the profit should not amount to 10 per cent. per annum on the amount paid on the shares (whether such deficiency should have occurred before or subsequently to the formation of the contingent fund), such a sum might be taken from the contingent fund as, with the actual divisible profits of such year, would enable the company to make a dividend of 10 per cent. per annum. The company sought to apply a sum of 3,9907., the amount raised of the contingent fund, to the payment of back dividends of past years. Held upon demurrer by the company to the bill of the plaintiff by the Master of the Rolls, that as long as the company paid 10 per cent. they could not touch the contingent fund, and were not entitled in any one year to divide more than 10 per cent., whether from profits or contingent fund. Chamberlain v. The New Worcester Gaslight Co., Journal of Gas Lighting, June 8th, 1875.

exceed the

to be invested

XXXI. If the clear profits of the undertaking in any year If profits amount to a larger sum than is sufficient, after making up amount the deficiency in the dividends of any previous year as afore- limited, excess said, to make a dividend at the prescribed rate, the excess and form a rebeyond the sum necessary for such purpose shall from time serve fund. to time be invested in government or other securities; and the dividends and interest arising from such securities shall also be invested in the same or like securities, in order that the same may accumulate at compound interest until the fund so formed amounts to the prescribed sum, or if no sum be prescribed a sum equal to one-tenth of the nominal capital of the undertakers, which sum shall form a reserved fund to answer any deficiency which may at any time happen in the amount of divisible profits, or to meet any extraordinary claim or demand which may at any time arise against the undertakers; and if such fund be at any time reduced, it may thereafter be again restored to the said sum, and so from time to time as often as such reduction shall happen.

The question of remuneration of directors of a company for past as well as future services, is within the powers of the company, and a court of chancery will not interfere in such a matter. Lambert v. The Northern Railway of Buenos Ayres Co., Limited (V.-C. M.), 18 W. R. 180.

Reserve fund

not to be resorted to,

an extraordinary claim.

XXXII. Provided always, that no sum of money shall be taken from the said fund for the purpose of meeting any unless to meet extraordinary claim, unless it be first certified in England or Ireland by two justices, and in Scotland by the sheriff, that the sum so proposed to be taken is required for the purpose of meeting an extraordinary claim within the meaning of this or the special act.

When fund

amounts to
prescribed
sum, interest
to be applied
to purposes of

the under-
taking.

If profits are

less than the prescribed

rate, a sum

from the re

Money taken from the reserved fund for the purpose of answering any deficiency in the amount of divisible profits, to make up the dividend, is not an extraordinary claim or demand, and therefore does not require to be certified by two justices or the sheriff.

XXXIII. When such fund shall, by accumulation or otherwise, amount to the prescribed sum, or one-tenth of the nominal capital of the company, as the case may be, the interest and dividends thereon shall no longer be invested, but shall be applied to any of the general purposes of the undertaking to which the profits thereof are applicable.

XXXIV. If in any year the profits of the undertaking divisible amongst the undertakers shall not amount to the may be taken prescribed rate, such a sum may be taken from the reserved fund as, with the actual divisible profits of such year, will enable the undertakers to make a dividend of the amount aforesaid, and so from time to time as often as the occasion shall require.

served fund to supply deficiency.

If profits are more than the amount pre

scribed, a rate

able reduction

to be made in the price of

gas.

XXXV. In England or Ireland the court of quarter sessions, and in Scotland the sheriff, may, on the petition of any two gas ratepayers within the limits of the special act, nominate and appoint some accountant or other competent person, not being a proprietor of any gasworks, to examine and ascertain, at the expense of the undertakers (the amount of such expense to be determined by the said court or sheriff), the actual state and conditions of the concerns of the undertakers, and to make report thereof to the said court at the then present or some following sessions or to the sheriff; and the said court or sheriff may examine any witnesses upon oath touching the truth of the said accounts and the matters therein referred to; and if it thereupon appear to the said court or sheriff that the profits of the undertakers for the preceding year have exceeded the prescribed rate, the under

takers shall, in case the whole of the said reserved fund has been and then remains invested as aforesaid, and in case dividends to the amount herein before limited have been paid, make such a rateable reduction in the rate for gas to be furnished by them as in the judgment of the said court or sheriff shall be proper, but so as such rates, when reduced, shall ensure to the undertakers (regard being had to the amount of profit before received) a profit as near as may be to the prescribed rate.

XXXVI. Provided always, that if, in the case of any petition so presented, it appear to the said court or sheriff that there was no sufficient ground for presenting the same, the said court or sheriff may, if they or he think fit, order the petitioner to pay the whole or any part of the costs of or incident to such petition (the amount thereof to be determined by the said court or sheriff), and the costs so ordered to be paid shall be recoverable in the same way as damages are recoverable under this or the special act.

Court may order petitioner to pay costs of

groundless petition.

undertakers

XXXVII. If the undertakers shall, for seven days after Penalty on being required to produce to the said court or sheriff, or to for refusing to the said accountant or other person as aforesaid, any books produce books, vouchers, &c. of account or other books, bills, receipts, vouchers, or papers relating to the pecuniary affairs of the undertakers, refuse or neglect to produce such books, bills, receipts, vouchers, or papers, they shall forfeit the sum of one hundred pounds for every such refusal or wilful neglect, and the further sum of ten pounds for every day such refusal or wilful neglect shall continue after the expiration of the said seven days, such respective penalties to be recovered by any person who will sue for the same, with full costs of suit, in any of the superior

courts.

count to be

undertakers,

XXXVIII. And with respect to the yearly receipt and Annual acexpenditure of the undertakers, be it enacted, that the under- made up by takers shall, in each year after they have begun to supply gas und sent to the under the provisions of this or the special act, cause an clerk of the account in abstract to be prepared of the total receipts and peace in Engexpenditure of all rents or funds levied under the powers of land, or to the this or the special act for the year preceding, under the several distinct heads of receipt and expenditure, with a statement of the balance of such account duly audited and certified

or Ire

sheriff clerk in

Scotland, and to be open to inspection.

by the chairman of the undertakers, and also by the auditors thereof, if any; and a copy of such annual account, if the gasworks be situated in England or Ireland, shall be transmitted free of charge to the clerk of the peace for the county in which the gasworks are situate, and if the gasworks be situated in Scotland such copy shall be transmitted, free of charge as aforesaid, to the sheriff clerk of such county, and such transmission shall be made on or before the thirty-first day of January in each year, under a penalty of twenty pounds for each default; and the copy of such account so sent to the said clerk of the peace or sheriff clerk shall be kept by him, and shall be open to inspection by all persons at all seasonable hours, on payment of one shilling for each inspection.

A form of return of accounts in abstract under the several heads is here subjoined :—

THE

GASLIGHT COMPANY.

CAPITAL ACCOUNT for the Year ending 30th June, 1871.

REVENUE ACCOUNT.

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