subscribed their money and connected themselves with the company in reliance upon their truthfulness, which entitles them to avoid the contract they have entered into with the projectors and managers, and recover back from them the amount of their deposits and subscriptions. (o)

In an action for the recovery of the deposit paid on an allotment of shares in a projected joint-stock company, it appeared that the plaintiff had applied for and obtained an allotment of sixty shares upon the faith of a prospectus issued by the authority of the provisional committee of management, stating that the capital of the company was to be three millions sterling, divided into 120,000 shares of 251. per share; that the plaintiff subsequently paid a deposit of 17. 7s. 6d. per share on his sixty shares, amounting to 827. 108. 6d., and executed the parliamentary contract and subscribers' agreement upon the faith of a letter inserted in the public papers by the authority of the provisional committee, stating that the allotment of shares was completed, and expressing the regret of the committee at their inability to comply with the numerous applications they had received for shares in the company;-that at the time of the publication of this letter, 58,000 shares only had been allotted, the committee having retained more than half the shares in their own hands, for their own private use, although they had received applications for 400,000 shares; that subsequently a panic had arisen in the share-market, and the shares had decreased in value, and out of sixty-three members of the committee, who had each agreed to take 150 shares, only nineteen had paid their deposits; that a committee of management was then appointed by the provisional committee, which committee of management was unable to go before parliament in consequence of the deranged state of the company's affairs, and the neglect of the forty-four provisional committeemen to pay up their deposits on the 6,600 shares reserved for them, and the project was consequently virtually abandoned; and it was holden that the plaintiff was entitled to recover from two of the provisional committee, who had signed the scrip certificates of shares, the amount of the deposit he had paid to the bankers of the company, notwithstanding the execution by him of the subscribers' agreement and parliamentary contract, inasmuch as the payment of the deposit and the execution of the deed had been obtained through the medium of a false and fraudulent representation, by the provisional committee, concerning the allotment of the shares, and the general state and condition of the company. (p)

(0) Wontner v. Shairp, (C. P.,) Sittings after Trinity Term, June 23, 1846.

(p) Wontner v. Shairp, (C. P.,) Sittings after Trinity Term, 1846.

If it is expressed on the face of the letters of allotment, or is in any way made a term of the contract that a certain proportion of the deposit shall be applied in payment of the preliminary expenses of carrying out the undertaking, and shall not consequently be returned if the scheme proves abortive, such a provision or term of the contract will not prevent the subscriber from recovering the full amount of his subscription, or deposit, if it should appear that the money was obtained through the medium of a false and fraudulent representation, on the part of the managers, concerning the actual state and condition of the company.

LIABILITIES of the MEMBERS of the COMMITTEE of MANAGEMENT, PROVISIONAL COMMITTEE-MEN-and SUBSCRIBERS and SHAREHOLDERS, to THIRD PARTIES. (Ante, 383-387.)

Of the liability of managers and members of the committee of management to third parties.—All persons who take an active part in working out a project, who attend meetings at which resolutions are made, or orders given for the employment of agents or servants, or the supply of goods in furtherance of a joint undertaking, naturally render themselves jointly responsible for the remuneration and payment of the services rendered, or goods supplied in obedience to the orders so given.(g) Every person also, who holds himself out, or permits himself to be published to the world as one of the managers of an undertaking, is responsible as such whether he is an actual manager or not, and whether he does or does not take an active part in the conduct of the business. If there has been no publication of the party to the world, as a manager, but it is sought to make him responsible as such by reason of his having privately consented to accept of the situation, it must be shown that the party who seeks to charge him as a manager knew of such consent at the time he contracted with the managing committee. (r) But if he has been publicly announced as a manager, he is then chargeable as such to all parties who subsequently to such announcement have dealt with the managing committee, whether they did or did not at the time know that he was a director or manager, or had been represented as such. (Ante, 500.) All the actual and publicly reputed or nominal managers are responsible upon all orders given, or con

(q) Lake v. Duke of Argyll, 6 Ad. & E., N. s. 477. Braithwaite v. Skofield, 9 B. & C. 402. Harrison v. Heathorn, 6 Sc. N. R. 787. Glenesser v. Hunter, 5 C. & P. 65. Ellis v. Schmoeck, 3 M. & P., 220. Doubleday v. Muskett, 4 M. & P. 757, 7 Bing. 110, s. c. Kerridge v. Hesse, 9 C.

& P., 200. Alderson v. Clay, 1 Stark. 405. Burls v. Smith, 5 M. & P. 735. Ante, 386.

(r) Vice v. Lady Anson, 7 B. & C., 409.; 1 M. & R. 116, s. c.; 1 M. & M., 97, s. c. Ante, 449. Holcroft v. Hoggins, 15 Law J., N. S. (C. P.,) 129.

tracts entered into by the managing committee, at meetings at which they have not been present, as well as at those at which they have been present. (8) Every member, or publicly reputed member, who does not think fit to attend to the active duties of his actual or apparent situation and office, may fairly be considered either to have given his colleagues a general authority to act as they may think fit, or to have sanctioned and approved their acts and contracts, and will be responsible accordingly. If he wishes to protect himself from the general liability resulting from his actual or apparent tenure of office, he must make himself acquainted with the proceedings of the managing body to which he belongs, or professes to belong, and if he disapproves of their management he ought to resign, and remove his name from the list of committee-men, and make his retirement from, as notorious as his accession to, the administration of affairs. "Every subscriber," (and every person who deals and contracts with the managing committee) “looks at the character and respectability of the members whose names appear as being engaged in the transaction; and it would necessarily lead to most dangerous consequences if a party can rid himself of liability as readily as he can a garment; if once a member, he continues so until he divests himself of his liability in a regular mode. By thus deciding, it will render persons of property and reputation cautious how they embark in speculations, from which they imagine they may easily get free, and leave others to struggle with difficulties which arise from the failure of projects into which they have been unwarily led."()

If the business of the company has always been transacted through the medium of resolutions passed by the committee, and through orders given by the secretary, or some accredited officer of the company, one committee-man would not, it is apprehended, be responsible for the private and individual orders and contracts of a co-committee-man, or of any of the projectors made without the knowledge and sanction of the board, and of which he has known nothing until a claim is made upon him in respect thereof.

If a secretary is appointed by the committee, such secretary has an implied authority from all the members of the committee to contract for such things as are absolutely necessary to enable the committee to commence its operations, and properly fulfil the end of its existence. Thus, where a projected railway company was provisionally registered, and a com

(8) Maudsley v Le Blanc, 2 C. & P. 409, n. Horsley v Bell, Amb. 770; 1 Br. C. C. 101, n. ante, 383-387.

(t) Best, C. J., Perring v. Hone, 12 Moore, 147. Ellis v. Schmack, 3 M. & P. 228. Doubleday v. Muskett, 4 M. & P. 760.

mittee of management was formed, and the defendant consented to become a member of such committee, and afterwards took the chair at one of its meetings, it was held that he was responsible for the payment of a stationer's bill, for pens, ink, and paper, supplied by the order of the secretary, for the use of the committee, after the defendant had become a mem ber of it. "When I say," observes Alderson, B., "that a party is liable in such a case, I mean that under such circumstances the judge ought to direct the jury to find, and the jury ought as reasonable men to find, that the defendant, as a member of the committee, had constituted the secretary his agent to pledge his credit for all things necessary for the working of the provisional committee, and to enable it to go on. It is a question of fact, not a question of law. The jury in such cases are called on to infer from a man's conduct, that he gave authority to another to pledge his credit for particular things. Where a subscription has been entered into it would be quite the reverse, for if A. gives money to B. to do a certain act, the natural inference is, that B. is to spend the money and not to pledge A.'s credit; but, if A. gives B. authority to do something, but gives him no money for the purpose, then he may pledge the credit of his principal for what is necessary. For some things, I admit, the defendant could not be held liable, as for instance, if the secretary were to purchase a horse, or a carriage, or such like; but in this case, the defendant, as a member of the provisional committee, must have known that pens, ink, and paper, would be required for the use of the committee, as also a room to sit in, &c.; and it was therefore for the jury to infer whether he did not give authority to some one to pledge his credit for those things, and for such others as were necessary to carry on the concern; and the jury, as reasonable men, could not have found otherwise. (u)

A question was raised in this case as to how far a minority of the committee would be bound by the acts and contracts of the majority. "The case has been put," observes Alderson, B., "of the defendant being one of a minority of the committee who dissented from these orders. I am by no means prepared to say that the defendant would not be exempt in such a case.(x) The defendant, however, would be bound to make his dissent as notorious to the public, as his attendance at and participation in, the resolutions and proceedings of the committee; (y) and ought, it is apprehended, in order to secure himself from liability, to withdraw from all further attendance at the meetings of the committee. If he continues to at

(u) Alderson, B., Bartlett v. Lambert, 10 Jur. 417; 15 Law J., N. s., (Exch.,) 305.

(x) 10 Jur. 417; 8 M. & W. 508.
(y) Minnett v. Whitney, 16 Vin. Abr. 244.

tend and to take part in their proceedings, he must be taken quoad the public, and third parties, to ratify and concur in the acts of the majority.

A person who has taken part in the management of the company, cannot, of course, be made responsible for the price of goods ordered, or work done, or upon contracts entered into, by the managing committee before he became a member, or held himself out to the world as a member of it; but, if after he has become a member of the committee, goods are delivered, or work done with his knowledge or concurrence, pursuant to orders previously given, he will be deemed to have adopted and ratified the contract, and will be responsible accordingly.(z)

The mere attendance of a party at a meeting called to consider the advisability of a scheme, and not to carry it into effect, and at which meeting no orders are given for expenses to be incurred, or for anything to be done for the purpose of working out the project, will not render the party responsible upon orders given at subsequent meetings which he has not attended.

Liabilities of provisional committee-men.—If the general management of the business of the company and the control over the expenditure are actually or apparently vested in the hands of a provisional committee, all the members of such provisional committee, and every person who has permitted himself to be held out to the public as a member thereof, will be responsible upon the contracts entered into by such committee. If there is both a provisional committee and a managing committee co-existing, and the provisional committee has the appointment of, and the control over, the managing committee, the members of the latter will be deemed to be the agents of the former, authorized to act for them as well as on their own account, and the members of the provisional committee will not consequently be released from responsibility by the appointment of the managing committee. But if on the appointment of the latter, the provisional committee is dissolved, and the members thereof have no longer any voice in the management, or any control over the expenditure, the acts and contracts of the managing committee are not the acts and contracts of the members of the preceding provisional committee, and the latter will not consequently be responsible thereon, provided the dissolution of the provisional committee, and the appointment of the select committee of management, has been made public and notorious, and notice thereof has been given to all parties who have been in the habit of dealing with the provisional committee.

(2) Kerridge v. Hesse, 9 C. & P. 200.