''Parker v McKenna'' (1874–75) LR 10 Ch App 96 is a

UK company law The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary lega ...

case, concerning the rule against having any conflict of interest.

Facts

Mr McKenna was one of four directors of the National Bank of Ireland, a joint stock bank. In 1864 resolutions were passed to increase the capital by issuing 20,000 £50 shares. They were to be offered to old shareholders first according to how many they already held, for a £25 premium and £5 as a first call. Any not bought would be sold by directors at a £30 premium. The directors allotted 9778 shares to a Mr Stock, who paid only £5 a share. It was arranged that the certificates would be withheld, the bank had a lien on the shares for the premiums and no transfer could be made till £30 was paid up. He then said he could not take so many and asked the directors to relieve him. They took many at £30 a share, and then sold them on at a profit. The £30 per share was always paid to the bank.

Judgment

Lord Cairns LC Hugh McCalmont Cairns, 1st Earl Cairns (27 December 1819 – 2 April 1885), was an Irish-born British statesman who served as Lord High Chancellor of Great Britain during the first two ministries of Benjamin Disraeli. He was one of the most ...

, Sir WM James LJ and Sir G Mellish LJ held that the directors had to account for all profits made through the sale of the shares. James LJ made this famous statement:

Notes

{{reflist, 2 United Kingdom company case law Court of Appeal (England and Wales) cases 1874 in case law 1874 in British law

Facts

Judgment

See also

Notes