one-third of the capital should be subscribed. The applicant did not thereon refuse the shares: the court decided that he was rightly placed on the list of contributories, though there was no evidence of one-third of the capital having been paid. Hawkins, Ex parte, 2 K. & J. 253; 2 Jur. N. S. 85; 25 L. J., Ch. 221.

On an application by an official manager of a company ordered to be wound-up, the court refused to put on the list of contributories or to declare liable to contribute to the debts of the company a provisional director and allottee of shares who had attended meetings and taken part in the proceedings but had never signed the subscription contract. Hereford and Merthyr Tydvil Junction Railway Company (Maitland's Case), 3 Giff. 28.

Allottees of shares are not members, they have no right on the aggregate fund formed by the deposits, their right on the abandonment of a scheme is a personal right against the parties who have contracted with them, that in consideration of the deposit they shall become shareholders in the company about to be formed. Upon the abandonment of the project the allottee's right is not on a specific fund but a personal right of action, independent of the existence of any fund out of which payment can be made. An allottee is not to be placed on the list of contributories merely because he may be entitled to receive back his deposit. Re Great North of England Railway Company, Ex parte Caruch, 20 L. J., Ch. 670.

In order to render shareholders in a company liable as contributories, it is not essential that they should be correctly described in the company's register of shareholders. Yelland's Case, 5 De G. & S. 395. The company's deed required all transfers of shares to be made in a prescribed manner, with the consent of the directors, and the transferee to execute the deed, who was precluded from the privileges of a shareholder until he had executed the company's deed. Shares were transferred to a purchaser and certificates of shares were delivered and dividends paid to him, but the shares were not transferred in the mode prescribed in the deed executed by the purchaser. The executors of the purchaser were placed on the list of contributories, as enough had been done by both parties to make the purchaser virtually although not formally a shareholder. Straffon's Executor's Case, 1 De G., M. & G. 576; 4 De G. & S. 256.

A person in 1844 bought shares in a banking company and had them transferred to him. The company afterwards registered under 20 & 21 Vict. c. 49, so as to come within the Winding-up Act, 1856. He was never entered on the list of shareholders under that act but had received dividends, and after his death his executors received dividends and then sold the shares it was held, that as he would have been a contributory under the old acts, so the executors were contribu

Free shares.

Secret agreement.

tories. Re Northumberland District Banking Company, Ex parte Dixon's Executors, 1 Drew. & Sm. 225.

A director of a railway company for which a winding-up order had been made claimed against the company. The claim was disallowed by the master. Some years after the director's death his executors discovered letters which had not been brought before the master, and which they alleged proved his right. These letters were in the possession of the director at the time he made his claim: it was held, that as the evidence was known to the director who had not brought it forward, it could not be made use of by his executors. Re Warwick and Worcester Railway Company, Ex parte Kelly's Executors, 9 W. R. 329, V.-C. K.

So a transferee of shares who had availed himself of the privileges of a company on several occasions and signed a ticket, wherein he was described as a proprietor, was held to be liable as a contributory, although no instrument of transfer had been signed by him and his name was not on the list of shareholders returned to the joint stock registrar. Maguire's Case, 3 De G. & S. 31.

The purchaser of fifty shares of the executors of the late owner had them transferred to him, received certificates of shares from the company, and was registered as a shareholder in respect of the fifty, of which five only had been transferred conformably to the company's deed of settlement: notwithstanding such irregularity, the purchaser was held to be a contributory in respect of the whole fifty, although the bank stopped payment soon after the transfer had been made. Sanderson's Case, 3 De G. & S. 66; 3 H. L. Ca. 698; see Gordon's Case, 2 Jur. N. S. 1203; 3 De G. & S. 249.

The mere allotment by the directors of shares to a person as a consideration of a secret imparted by him to the company, will not exempt him from being placed upon the list of contributories upon the company being wound-up. Brooke's Case, 33 L. T., 307, Bank.

Where shares were issued by a joint stock company as fully "paid-up" in lieu of payment for the purchase of certain mines, for the working of which the company was established, it was held that such purchase was a sufficient consideration, and the company was estopped from questioning the validity of those shares. And that the holders of those paid-up shares could not be called upon to contribute to the debts of the company under a winding-up order. Re the Cardiff and Caerphilly Iron Company (Greenhill's Case), 4 L. T., N. S. 452, Bank.

Provisional directors entered into an agreement to give to the projector of the company 2,500l. in money, and 2,500l. in paid-up shares. The agreement did not appear in the deed of settlement which the projector had executed for 350 of

those shares it was held that the company were not bound by the agreement, and although they repudiated it, still that he was liable unconditionally as a contributory in respect of the 350 shares. Re Cosmopolitan Life Assurance Company (Nicholl's Case), 24 Beav. 639.

A party who has applied for shares in a company and paid Acceptance the preliminary deposit thereon and also the amount of a call of shares. made in respect of such shares and done other acts of membership, is a contributory, notwithstanding the form of acceptance of the shares received from the company though signed by him has not been returned to the company. Re National Deodorising and Manure Company (Rowland's Case), 31 L. T., 239, Bank.

A party who applies for shares and says, "which I hereby accept," and pays the deposit, if he writes, before the allotment is made, saying he withdraws, and desires to cancel his application, is not a contributory. Ex parte Graham, Re the Cardiff and Caerphilly Iron Company (Gledhill's Case), 30 L. J., 861, Ch.; on appeal, 7 Jur. N. S. 981.

A. gave to B. a cheque for 50l. to obtain fifty shares in a Taking company. B. applied for fifty shares, and they were allotted shares, but to A., and his name was entered in the books, &c. as a share- refusing to sign deed. holder. It did not appear that anything more had been done than that A. had refused to sign the deed: it was held, that not having repudiated the shares he was a contributory, and that a change in the company's books in the number of the shares first allotted to B. did not relieve him from his liability. The Electric Telegraph Company of Ireland (Cookney's Case), 26 Beav. 6.

Shares in a company which was in the course of formation were allotted to an applicant, whose application was merely a verbal request to a director to obtain the shares, but who subsequently paid the deposit. On being requested to execute the deed of settlement the allottee refused to do so. The company afterwards obtained an act of parliament, and in the register of shareholders made under the act the name of the allottee, omitting his first christian name, was inserted in the register as a shareholder in respect of the same number as had been allotted to him, but which were differently numbered-numbers corresponding to those in the allotment being ascribed in the new register to another shareholder: it was held, that no written agreement to take shares was necessary, but that he had become liable as a contributory and was not relieved from the liability, either by his refusal to execute the deed, by the change in the number of shares ascribed to him or by the mistake in his name; Ex parte Cookney, 3 De G. & J. 170; 5 Jur. N. S. 77; 28 L. J., Chan. 12; 7 W. R. 22; 32 L. T. 82, affirmed on appeal; 26 Beav. 6.

W. applied in writing for shares in a company constituted under 19 & 20 Vict. c. 47, subject to a condition that he

Non-signature, but payment.

should have the supplying of certain articles required by the company. Shares were allotted to him, but the company never having come to any definite arrangement as to his supplying them with the articles mentioned in the conditions, he neither signed the articles of association, paid any deposit, nor did any act amounting to an unqualified acceptance of the shares. The company being afterwards wound-up under the 19 & 20 Vict. c. 47: it was held, that W.'s name ought not to be placed on the list of contributories. Re Sunken Vessels Recovery Company, Ex parte Wood, 3 De G. & J. 85; 5 Jur. N. S. 1377; 28 L. J. Chan. 899; see New Brunswick and Canada Railway and Land Company, 4 H. & N. 580; 5 Jur. N. S. 1131.

The deed of settlement of a banking company provided, that shares might be transferred with the consent of the directors, but that the transfers should be registered, and that an indorsement of the registry should be made on the deed of transfer, and should be sufficient evidence of the directors' consent. A shareholder placed his shares in the hands of a broker, and they were sold nominally to the solicitor of the company, but really (though without the knowledge of the shareholders) to the company itself, the purchase money having been paid out of the company's funds, and the subsequent dividends being carried to their credit: it was held, that although there was no indorsement on the transfer to the solicitor the directors' consent was sufficiently proved, and that on the company being wound-up the vendor ought not to be placed on the list of contributories as a shareholder. Nicol's Case, Re Royal British Bank, 3 De G. & J. 387.

Persons who were induced by fraud and misrepresentation to become shareholders of a company, which was virtually insolvent, and to sign the deed of settlement of such company, which was afterwards wound-up, were held not to be liable as contributories. Re Universal Provident Life Assurance, Ex parte Bell, 2.Jur. N. S. 344.

In January, 1854, P. applied for shares in the Amazon Life Assurance and Loan Company and Sick Benefit Society. In answer to his application, shares were allotted to him in the Amazon Life Assurance and Loan Company, upon which he paid a deposit of 251. but did not execute the company's deed. Subsequently an order was made for winding-up the Amazon Life Assurance and Loan Company, and P.'s name was put upon the list of contributories. Upon a motion to reverse the decision of the master: it was held, that the master had arrived at a just conclusion, and that this case was governed by the decision of the Lords Justices in Blackburn's Case, 8 De G., M. & G. 177; see post, p. 142; The Amazon Life Assurance and Loan Company, Ex parte Pickles, 27 L. T. 195, Ch.

A shareholder by the receipt of dividends upon his shares will become liable as a contributory to a joint stock company

registered under the act 7 & 8 Vict. c. 110, notwithstanding the company's deed when he executed it contained a false skin, fraudulently inserted by some of the directors, purporting to limit by the custom of the company the shares passed by mere delivery of the certificates, and the affairs of the company were wholly managed by the board of directors. After several years the company was ordered to be wound-up by an order dated 24th November, 1857. Messrs. G. & S. purchased shares a few days before the date of the windingup order, and the scrip certificates of some of them were thereupon delivered to them, and the remaining scrip certificates after the date of the order. Messrs. De P., being the holders of shares, and being aware of the failing state of the company and desiring to get rid of the responsibility, sold the scrip certificates absolutely and unconditionally for a nominal price to one of their clerks a few days before the order for winding-up was made. The names of Messrs. G. & S. and of Messrs. De P. were placed upon the list of contributories. Upon appeal, it was held that Messrs. G. & S. were liable in respect of all their shares, whether the certificates were delivered before or after the date of the order for winding-up, but that Messrs. De P. were not, because the sale by them was valid; wherefore the former would remain upon but the latter would be removed from the list of contributories. The holders of shares bought in open market, although they may have been fraudulently issued by the directors, cannot on that ground claim relief against the other shareholders, whatever may be their rights and remedies against the directors. Every person purchasing shares in such a company as that described above takes them subject to the liabilities of the company at the time of the purchase. Ex parte Grisewood, Re the Mexican and South American Company, 28 L. J., Ch. 769; 5 Jur. N. S. 1191; on appeal, 4 De G. & J. 544.

tation of

A. having agreed to become one of the medical referees Fraud and of an insurance company, on the understanding that there misrepresenwould only be two of them, the secretary of the company directors. called upon him, produced the deed of settlement, and induced him to execute it for 200 shares, representing that on his doing so he would be appointed one of the medical referees, of whom there would only be two; that the business would be equally divided between them, that the directors would not consent to his appointment unless he took 200 shares, and that all the office bearers were required to take and had taken that number. Soon after this A. discovered that four medical referees had been named, he thereupon claimed to be released from his shares and demanded a return of his calls. He afterwards discovered that most of the office bearers had never taken 200 shares: it was held, that whatever breach of contract there might have been on the part of the company towards A., there was nothing in the