district in which a large number of shareholders should be obtained, it was proposed to establish a branch store. Whatever an experienced business man might think of the ultimate success of such a project, I do not think there was anything improper or dishonest in its inception. There is no evidence to lead one to suppose that, so far as Kelly knew, it was anything but a legitimate business venture. And I do not think Kelly had the slightest suspicion that the $20 notes were obtained for an improper purpose or in an improper manner, or that there was any defect in the company's title thereto, or any reason why the plaintiffs ought not to take them as collateral for the company's bank account. One point taken for the defence is that under the Companies Act the Farmers Manufacturing and Supply Co. have not the right to take promissory notes for subscriptions of stock, much less to negotiate them. For this is cited Pellatt's Case (1867), L.R. 2 Ch. 527, and it is urged that it is contrary to the principle of the Act that a liability to pay calls on shares should be converted into a liability to pay a note to a third party. In Re Pakenham Pork Packing Co., Galloway's Case (1906), 12 O.L.R. 100, Galloway applied for shares, and it was arranged that he should give his promissory note for the amount of his application, payable 12 months after date. It would seem from the judgments given that, if his application had been properly accepted by the directors, and if they had been in a position to give him what he had applied for, the transaction would have been valid and binding. The same may be said of Higginbotham's Case (1906), before the Court at the same time, 12 O.L.R. 112. See also Ottawa Dairy Co. v. Sorley (1904), 34 S.C.R. 508; Manes Tailoring Co. v. Willson (1907), 14 O.L.R. 89; Bullion Mining Co. v. Cartwright (1905), 10 O.L.R. 438 (the last case having been on a note given for mining shares); 10 Cyc. 469, 470. I have not yet found any case in which an action was brought by the indorsee of a promissory note given for a subscription of stock, but I do not see any reason at present why such a note should not be negotiated. I think the plaintiffs in the present case were entitled to assume that a share had been properly allotted to the defendant, and that the note represented the debt due by him to the company for such share, and that the company had the right to negotiate it. This is the conclusion to which I have come at D. C. 1907 STANDARD BANK OF CANADA v. STEPHENS. Macbeth, D. C. 1907 STANDARD BANK OF v. STEPHENS. Macbeth, present, and I do not think that I should delay my decision any longer. I would hold that the defendant never received any notice of allotment, so that the contract between him and the company was not completed, and that the note in question is, therefore, without consideration. But I do not think this affects the plaintiffs, as, in my opinion, they became holders in due course of the note in question, and there should be judgment in their favour. In refusing the defendant's application for a new trial, the learned Judge referred to and distinguished First Natchez Bank v. Coleman (1903), 2 O.W.R. 358; citing also Power v. Hoey (1871), 19 W.R. 916; Fischer v. Borland Carriage Co. (1906-7), 8 O.W.R. 579, 9 O.W.R. 193; Pure Colour Co. v. O'Sullivan (1907), 10 O.W.R. 313; Thompson's Commentaries on Corporations, vol. 2, secs. 1657-8; Am. & Eng. Encyc. of Law, 2nd ed., vol. 26, p. 841. The appeal was heard by a Divisional Court composed of FalCONBRIDGE, C.J.K.B., BRITTON and RIDDELL, JJ., on the 2nd March, 1908. T. G. Meredith, K.C., for the defendant. The Judge found that the note was obtained by fraud and was made without consideration, but that the plaintiffs were not affected. The onus was on the plaintiffs to shew that they were holders in due course: Falconbridge on Banking, p. 454. Wilson v. Lockhart (1907), 10 O.W.R. 148, has now been reversed by the Supreme Court of Canada: Lockhart v. Wilson (1907), 39 S.C.R. 541. The plaintiffs were put on inquiry by the circumstances, and ought to have known if they did not know of the fraud and want of consideration. There was no proper transfer of this note by the company to the plaintiffs First Natchez Bank v. Coleman, 2 O.W.R. 358; Imperial Bank v. Farmers Trading Co., 13 Man. L.R. 412; Masten's Company Law, p. 161. There was no power under the by-laws of the company to hypothecate this note: Kelly v. Electrical Construction Co. (1907), 10 O.W.R. 704; Traders Bank v. White (11th November, 1907), a decision of a Divisional Court of the High Court of Justice for Ontario (not reported). The company had mo right to accept a note in payment of stock: Pellatt's Case, L.R. 2 Ch. 527; O'Sullivan v. Donovan (1906), 8 O.W.R. 319; Ottawa Dairy Co. v. Sorley, 34 S.C.R. 508. G. S. Gibbons, for the plaintiffs, relied on Thorold Manufacturing Co. v. Imperial Bank, 13 O.R. 330; Bridgewater Cheese Factory Co. v. Murphy (1896), 23 A.R. 66; and referred to some of the other cases cited in the judgment of the county court Judge. March 9. PER CURIAM:-We all agree with the conclusions of the learned county court Judge in his very able judgment, and have nothing to add to what he has said. The appeal will be dismissed with costs. D. C. 1908 STANDARD บ. STEPHENS. E. B. B. [IN THE COURT OF APPEAL.] FAULKNER V. GREER. Damages Wrongful Removal of Timber from Lands—Subsequent Bona Fide The husband of the plaintiff conveyed certain land to his wife for valuable consideration. Previously, but without his knowledge or that of the plaintiff, certain timber was wrongfully cut and removed therefrom. The wrongdoers sold some of the timber to the defendants, who purchased bonâ fide, and subsequently sold the same to another bonâ fide purchaser. The plaintiff thereupon brought action against these two purchasers for damages, and for a declaration that as against them she was entitled to the proceeds of the timber. The second purchaser obtained leave to pay the purchase money into court, and an issue was directed to determine the rights to it as between the plaintiff and the first purchaser: Held (reversing the judgments of the Divisional Court and affirming the judgment of the trial Judge, reported 14 O.L.R. 360), that the plaintiff was entitled to recover the whole of the purchase money. The timber was the plaintiff's property where she found it, and she might have laid hold upon it in specie subject to no right or claim of lien or recoupment on the part of the wrongdoer, and the purchaser stood in no different position. Per MEREDITH, J.A.:-The plaintiff had at the time of the trespass no title to the timber, but an amendment of the interpleader order and issue should have been allowed, adding the husband as co-plaintiff, and such amendment should be made now. THIS was an appeal by the plaintiff and a cross-appeal by the defendants from the judgment of the Divisional Court in this action reported 14 O.L.R. 360. The appeal was argued on November 15th, 1907, before Moss, C.J.O., and OSLER, GARROW, MACLAREN and MEREDITH, JJ.A. G. F. Shepley, K.C., and C. A. Moss, for the plaintiff, contended that even if J. and C. Greer were the purchasers in good C. A. 1907 Dec. 23. C. A. 1907 FAULKNER V. GREER. no better faith of the logs in question, yet their title could be W. H. Blake, K.C., and J. T. Loftus, for the defendants, contended that the judgment at the trial would give the plaintiff not only the value of the logs, but the value of all the labour put into them; that the position of J. & C. Greer was that they bought the logs in good faith and sold them in good faith to the Barnett & McQueen Co.; that the defendants were not selling as agents for the plaintiff; that no case affirmed that an innocent purchaser who had sold to another the property which had been originally wrongfully taken and had parted with the dominium, could be attacked in respect to the purchase money received; that the money in court represented only the purchase money which the Barnett & McQueen Co. were to pay the defendants, and which the plaintiff was claiming; that the plaintiff was entitled either to all or else to none of the money in court; that the writ could not have been issued in trover, yet the effect of the judgment was to award the plaintiff the extreme limit of success which she could have obtained in an action in trover: Keener on Quasi-Contracts, p. 159; that the defendants were only asking the purchase price, and had nothing to do with the logs in specie, and the only question was whether the agreed purchase price should be paid to the defendants or to the plaintiff; that even if the plaintiff could shew that she was entitled to damages to the full amount of the money in court, she could not recover on this issue, but was bound to shew that she was entitled to this money as the purchase money of the logs, by shewing that she was entitled to the logs themselves—that is, that she was entitled to recover against the defendants in an action of trover and conversion; that when the timber in question was taken from the land the plaintiff had no right whatever to it, and the subsequent conveyance could not give her such right; that there could not be an amendment of an interpleader issue; that if the plaintiff could virtually make the defendants her agents in respect to the sale of the logs, she was bound to reimburse them for their expenditure, and that it was only on such a basis of ratification that she could claim this purchase money; that she was invoking equity as distinct from common law, and, therefore, must do equity; that an owner of chattels has no claim against one of a line of innocent purchasers through whose possession the chattels have gone. They also referred to Railway Co. v. Hutchins (1877), 32 Oh. 571; Peruvian Guano Co. v. Dreyfus Bros. & Co., [1892] A.C. 166; Gordon v. Harper (1796), 7 T.R. 9; Pyne v. Dor (1785), 1 T.R. 55; Owen v. Knight (1843), 5 Scott 307; Smith v. Milles (1786), 1 T.R. 475; Pilgrim v. Southampton, etc., R.W. Co. (1849), 8 C.B. 25; Kent v. Ellis (1900), 31 S.C.R. 110; White v. Spettigue (1845), 13 M. & W. 603; Powell v. Rees (1837), 7 Ad. & El. 426; Peer v. Humphrey (1835), 2 Ad. & El. 495; Lamine v. Dorrell (1706), 2 Ld. Raym. 1216; Brewer v. Sparrow (1827), 7 B. & C. 310; Scott v. Surman (1743), Willes 400; Wood v. Morewood (1841), 3 Q.B. 440; Jegon v. Vivian (1871), L.R. 6 Ch. 742; Re United Merthyr Collieries Company (1872), L.R. 15 Eq. 46; Trotter v. Maclean (1879), 13 Ch.D. 574; Livingston v. Rawyards (1880), 5 App. Cas. 25; Smith v. Baechler (1889), 18 O.R. 293; Lamb v. Kincaid (1907), 38 S.C.R. 516; Keener on Quasi-Contracts, p. 160 et seq. Shepley, in reply, contended that the respondent's argument aimed at placing the plaintiff in the position of one who was suing C. A. 1907 FAULKNER v. GREER. |