Attorney General v Davy

Attorney General v Davy (1741) 26 ER 531 is a UK company law case, which establishes this small but essential point of law: the default rule is that a majority of a corporate body can determine what it does.

Equivalent rules in contemporary company law are s 168 Companies Act 2006, which allows shareholders to remove directors through a simple majority, Foss v Harbottle which presupposed that a majority of shareholders can always take action to litigate, and the rule in Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame, which raises the requirement to 75% of the shareholders if they are to give instructions to the board.

Facts
King Edward VI had incorporated twelve people by name in a charter to elect a chaplain for the church of Kirton, just outside Boston, Lincolnshire. A clause stated that three of the twelve would choose a chaplain for the Sandford church as well, another village within the Kirton parish, with the consent of the majority of Sandford residents. A late vacancy had been created. Two of the three chose a chaplain with the majority of residents' consent, but the third dissented. The question was whether the choice was valid.

Judgment
Lord Hardwicke LC held that the chaplain was validly elected, for a corporate body can act by a majority vote at any duly summoned meeting of members.

It cannot be disputed that wherever a certain number are incorporated, a major part of them may do any corporate act; so if all are summoned, and part appear, a major part of those that appear may do a corporate act, though nothing be mentioned in the charter of the major part.

This is the common construction of charters, and I am of opinion that the three are a corporation for the purpose they are appointed, and the choice too was confirmed, and consequently not necessary that all the three should join; but if the act to be done by a select number of the twelve had been by a different charter, it would have been otherwise; it is not necessary that every corporate act should be under the seal of the corporation, nor did this need the corporation seal.