On the 4th of August, Mr. Norrish, the secretary of the company, wrote to Pentelow a letter in the following terms: L. JJ. 1869 CASE. "Sir, I am instructed by the directors to notify to you that they PENTELOW'S have considered your application, and hereby allot you ten shares in the company, on your paying on or before Friday, the 11th instant, to the Bank of London, Threadneedle Street, or Charing Cross Branch, the sum of £20, which, with the amount already paid by you in order that your application for shares might be considered, will make up the sum of £3 per share on the shares allotted to you." After payment of the deposit of £10, Pentelow became aware that a bill had been filed by Mr. Robert Warren against the company for the purpose of restraining them from using the name of Warren's Blacking Company, and from the proceedings in that suit he ascertained that some of the statements in the prospectus were untrue. Accordingly, on the 10th of August, he wrote a letter to the secretary of the company as follows:— "In reply to yours of the 4th instant, I beg to say that I cannot think of taking up the shares by advancing more money on them after what has taken place before the Vice-Chancellor, as it is very evident that the statements there made do not correspond with those in your prospectus. In consequence of which I shall feel obliged by your returning me the £10 already advanced." In reply to this the secretary sent a letter to Pentelow on the 11th of August, in which he said : In reply to your letter of this morning, I beg to inform you that what you allude to is perfectly an ex parte statement. Mr. Hyatt, traveller for the firm, will call on you in a day or two, and will furnish you with any further information you may require." Pentelow still refusing to pay the balance payable on the allotment, an action was, on the 15th of December, 1865, brought against him in the Court of Queen's Bench, to which Pentelow pleaded several pleas denying his liability, and pleading that he had repudiated the shares after discovering the misrepresentations of the prospectus. In the month of December, 1866, while the action was still pending, an order was made for winding up the company; and L. JJ. 1869 PENTELOW'S Pentelov's name was included in the list of contributories. On the production of the register of the shareholders kept by the directors, the entry of Pentelow's name, as the holder of ten shares, appeared on the date of the 1st of August, but the entries did not seem to have been made in strict chronological order, and there was no evidence on what day the entry was actually made. Under these circumstances, the Vice-Chancellor directed Pentelow's name to be removed from the list of contributories; and from this decision the official liquidator appealed. Mr. Fry, for the Appellant: We contend that the acceptance of Pentelow's application by the company was unqualified, and that as soon as it was communicated to Pentelow the contract with him was complete, and he had no power to repudiate it. The mention of the 11th of August for the day of payment of the subsequent instalments did not introduce a new term into the contract, nor render it conditional upon his payment of the money. It was nothing more than naming a reasonable time, to which Pentelow would have been entitled under the words of the prospectus, which stipulated that the £2 was to be paid "on allotment." We admit that time was of the essence of the contract; but that fact does not give the purchaser power to repudiate the contract before the time for payment arrives. There was a contract to take the shares in præsenti, and the fact that the payment was to be postponed for a few days made no difference: Ex parte Barrett (1). Pentelow's name was entered on the register on the 1st of August, the day when the shares were allotted. If the contract had been considered conditional, the registration would have been postponed. The claim to repudiate the shares on the ground of misrepresentation cannot be sustained. Pentelow has failed to establish any such case, and if he had, he ought at once to have taken steps to get his name removed from the register; by not doing so he holds himself out to the creditors as a shareholder: Oakes v. Turquand (2); Peel's Case (3). (1) 2 Dr. & Sm. 415. (2) Law Rep. 2 H. L. 325. (3) Law Rep. 2 Ch. 674. Mr. Glasse, Q.C., and Mr. Higgins, for the Respondent :- L. JJ. 1869 CASE. The new term introduced into the contract made the contract incomplete till the day named for payment. Until that day Pen- PENTELOW'S telow had a right to repudiate the contract: Oriental Steam Company v. Briggs (1); Duke v. Andrews (2); Addinell's Case (3). The mere fact of the directors entering the name on the register is not sufficient to make the contract complete. That fact was not communicated to Pentelow; on the contrary, the directors treated the contract as still in fieri, and endeavoured to induce him to withdraw his repudiation, and accept the shares: Gunn's Case (4). But there is no evidence in the present case that the name was entered on the register till after the repudiation. The names are not in strict chronological order, and it is more probable that the names were entered afterwards in anticipation of the winding-up. The 25th section of the Companies Act, 1862, provides that the register shall contain "the date at which the name of any person was entered on the register as a member." There is no proof that this was complied with: Ex parte Gledhill (5). Pentelow did all that was necessary to get rid of his liability. As soon as he discovered the misrepresentations in the prospectus he 'not only repudiated the shares, but claimed a return of the deposit. The fact of his name remaining on the register is therefore immaterial: Fox's Case (6); Hebb's Case (7). Mr. Fry, in reply: The names in the register are all in chronological order, except in a few instances, which admit of explanation. Where there is no proof to the contrary, it must be assumed that the register is regular. SIR C. J. SELWYN, L.J.:— This is an appeal from a decision of the Vice-Chancellor, holding that Pentelow ought not to be included in the list of contribu (1) 10 W. R. 125; 31 L. J. (Ch.) 241. (3) Law Rep. 1 Eq. 225.. (4) Law Rep. 3 Ch. 40. (6) Law Rep. 5 Eq. 118. (7) Law Rep. 4 Eq. 9. L. JJ. 1869 CASE. tories of Warren's Blacking Company, Limited. It appears that the company was constituted in the usual manner as a limited comPENTELOW's pany, and that on the 28th of July, 1865, Pentelow sent an application for ten shares in the usual form. On the 1st of August the directors held a meeting, at which they resolved that the secretary should allot all the shares to those who had applied for them. Accordingly, on the 4th of August the secretary wrote to Pentelow a letter, not in the usual form, but as follows:-[His Lordship read the letter.] That letter, it is clear, introduces a new date into the contract, on or before which date the money is to be paid and the shares to be allotted. Therefore the contract remained in fieri till that day. Before that date, however, Pentelow wrote a letter to the secretary, refusing to take the shares, and asking for a return of the deposit. The letter is dated the 10th of August, and is as follows:-[His Lordship read the letter.] It is not disputed that circumstances existed which would have justified him in taking proceedings to repudiate the contract. But in answer to the letter the directors do not insist that the shares were already his, but say that the statements before the Vice-Chancellor were ex parte statements, and that he should have further information. Therefore it is clear that at that time the contract was still in fieri; that he repudiated it under circumstances which justified him in doing so; and that, so far from the directors objecting, they wrote to him to say that they would give him further information. His conduct afterwards was perfectly consistent; he persistently refused to pay any more of the allotment money, claimed the return of the deposit which he had paid, and defended the action brought against him by the company for calls. I think, therefore, that there has been a consistent repudiation of the shares, and that this was done before the date fixed by the directors for the completion of the contract. It was argued that his name was entered on the register under the authority of his letter of application, and that he cannot now escape from liability to the creditors. But the entries in the register are not satisfactory. The book is produced, and it shews that the entries could not have been made in chronological order; and it is inconsistent with the directors' own proceedings to sup pose that Pentelow's name was entered before they wrote to him the letter of the 11th of August. I am anxious not to throw any doubt upon those decisions which have held that persons who have become members of a company, and who have taken the chance of its becoming a prosperous concern, shall not afterwards, in the event of failure, be allowed to escape from responsibility, or to defeat the claims of creditors, by setting up some variance between the prospectus and the memorandum or articles of association, for I entirely concur in the justice of those decisions; but this is no case of that kind. Within the time limited Pentelow repudiated the contract, and he has all along consistently done so. I think, therefore, the order of the ViceChancellor is right, and the appeal must be dismissed with costs. SIR G. M. GIFFARD, L.J.: I am of the same opinion. This case is clearly distinguishable from the case of Oakes v. Turquand (1). In that case the transaction was complete. It was a contract which the shareholder could have avoided, but the directors could not. But here the contract was in fieri until the 10th of August, and the company might have repudiated it till that date. Before that time Pentelow discovered that he had been induced to apply for the shares by fraud; and before the 11th of August he repudiated the contract. Nothing had been said to lead him to suppose that his name was put on the register. On the contrary, he received this letter of the 4th of August, which, if it meant anything, postponed the allotment till the 11th of August. Before that date arrived he repudiated the contract. But besides this, there is no evidence that his name was on the register before the time when he had repudiated the contract; on the contrary, the book, when produced, convinces me that he was not placed on the list till after that date. It is not enough to produce a book kept as this book was, containing an entry purporting to have been made at a particular date, when the res gestæ lead to a different conclusion. On both grounds, therefore-that Pentelow repudiated the contract, and that his name was not on the register before such repu (1) Law Rep. 2 H. L. 325. L. JJ. 1869 PENTELOW'S |