Preference shareholders' right to share in winding-up surplus depends on the company's constitution, absent express exclusion.

Preference shareholders were held entitled to share in winding-up surplus assets with ordinary shareholders where, after payment of liabilities and return of paid-up capital, the memorandum and articles contained no express or necessarily implied exclusion. Preference rights to dividend and capital priority did not, by themselves, extinguish the ordinary incidents of membership or deny participation in the residue. The surplus was treated as common property of the contributories and had to be distributed in proportion to holdings without distinction of class. The appeal failed.

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Issues: Whether preference shareholders, after repayment of all liabilities and return of paid-up capital in a winding up, were entitled to share in the surplus assets along with ordinary shareholders.

Analysis: The rights of shareholders in surplus assets depended on the true construction of the memorandum and articles. Preference rights to dividend and priority in repayment of capital did not, without clear words, exhaust the rights attached to preference shares or exclude the ordinary incidents of membership. In the absence of express or necessarily implied language denying participation in the residue, the surplus represented the common property of all contributories and had to be divided in proportion to their holdings without distinction of class.

Conclusion: The preference shareholders were entitled to participate in the surplus assets pari passu with the ordinary shareholders, and the appeal failed.

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