Palmerston Brewery COMPANY v. WOLLERMAN.

Manawatu Standard, Volume 4, Issue 265, 12 October 1883, Page 2

Palmerston Brewery COMPANY v. WOLLERMAN.

Appeal frornW dfcisipn ''■ of ; Ward, Resident Magistrate at ;Pttlmerston North. The appellants had sued the. respondent farjf^lO jlbr 'am6untS; payable on application and\ allotment of his shares in'the appellant^. Company, aud for two calls upon the same. |The facts of the case and the defence * set up, so far ac the same are material, are as follows-— Before v th&. Cpmpsny was floated, a perso"n7ac^ng as interim secretary, circulated prospectuses of the propos djOiwn-jjray, w^ ""Palmerston brewery Company ( t imi- , ted)/' incorporated under the Joint ! Stock Companies Acts; capital,! |WpOO,,i4.iOQ{y;sl-ares of -810 each,! and it set out a list bT provisi nal direc- ] r. tor*, m .^which appeared the, names of. "William J- • i ßattrarid J J. 07Batchelar.j ..The defendant was induced to take five! shares,? and signed a memorandum of j association, which was dated 22adj MarchVl3?2,.and registered under the -Act^ tatfleißjion the KTth &pril of the same year. The first meeting of subscribers was Held on April 1 24, whebjtne defendant attended and permitted his name to be submitted for election as a • director, but he was not elected. Sub. .. sequently ,he y^as allotted five shares m tne ; Cbmpanjr,/and wasWtered on the shareholders' register. Upon being ;»pplibd*to>for ; paymont^of «his caUsi he refused to pay at first without assigning any reason*, but afterwards on the ground that the whole capital of the Company had. not .been subscribed, and because Batt ' and Batchelar had not to their names being placed on- tlie Cprbvisiohal ; ; directory r . Z 'ffca l4tteTfaWwasT>roved«lr the-trialj-as 'was also the fact/ that only 500 shares haft-been allotted, And that the Company had been carried on with these shares only, irepresehtihg a capital of i 65000, without any resoluion of the Company! I The Mag^»te/fo-md?that ! the'fact iof ithe -whole capital not Toeing did not ' affect the matter, but he gave judgment for the defenddrit on tbe, ground that he had a right to repudiat^'pavinent as the prospectus' dontißane^'the names of tviro persons as' p'roVisi6"fial. y directors who were not ;BbaVeK6l:derS:-Y-Mr Gully, for; 'the ap^ ' peilants, was ; stopped by- the 1 f Codtt.-^ Mr For'wPbdy T or the respondents: ; The ; deibndant^as Inot1 not a shareholder at ; all. ! 'There be an acceptance after'the^ scares Have been allotted.— [Bis Honor' the 'Chief' Justice : That ; point is ; not open to yofa,;, it was not *^teed.]^-The deifen3a?nt ! t 'is',not liable, ■ as-' *tfie '"were not 'atl subscribed fqrJ''Glaniorganshirelron and CoaFOol '-v£ Hrw*h,' 4 I#:'"iis¥. 947; Howbeach Co. v. Teague,'-'S7H. and N. 151. .(Mr 'MgVl^ case was oVeifruled'by Ornamental Pyrographie Company' 1 V; .Brown, %& C, 63.) Thb respondent Hiali 'ar ight to repudiate; '-ori- ; ab.'coiirit of th l e A roisrepreseril»ati6in7i& the .names pf of tl the provjj3ipnajl^dfte6tsrsJ 'in l re" Scottish. Petroleum' Company^ Anderson's case, 50, li.J"J,'dh; 1 »269r HJS%pnpr''t]ie Chief Justice f Tt isiiiot' necessary-^tb hear Mr Gully: or -Ois w aU it is.clear the appeal must be "allowed. Resident } 'Magistral finds' in favor of the appeUant britbe the first point vys: on the ground of re'pudiktion be'oaiise 1 only the*' 6api± trl was ; subscribed, and I think rightly. -The "case:' of™the--Q*jn*n*ental^Pyro-graphic Co^^y, y, Broji-Ti clearly overrules any decisidrCdf 8., , which is to the contrary; and it is the commonest thing possible that a com pany is started before^, the nominal capital is subscribed, When the first person subscribe^ vtherp; is no subscribed capital; and it is* absurd to say | that the prospectus ; represents a sub-. ! scribed capital of 1000 shares 'when, 'persons are asked j, to; 'subspribe. The word incorporated^ at th a head of the prospectus that the Company- ms. then? {incorporated, but that it was' intended to* fee. The de- ■ f ehdant himself subscribed, and thereby, became a' provisional director under .clause 45 pf |iablfc ( B^~ The Magistrate , jdoes not f find ' ftiai he Was 'indu,oej4 to. Itake shares- -by v ßatt and, Batcia^elar being named m the 'firpspecjbus , hut he seems j to'^wtte $bun,d,.^as, a^ihatter of lawy'thafth/sVa^^^^ ii^^^-i|anding the s facts' prpye^ iii the, case. But; ■ the oase also finds T t&^ th,a: defeftdaht, after" slibscribfiig^" the' *nemprancliiai i; of iaseociation, attended a 'meetmg'W subscribers and f l t66k* pare m the election' of directors! At trjatj.time he must have part, as a subscriber,] and^ he must have known whe^he-vlfttt^a^'S^ were also subsdribers orn'ot." Xthinß:^ jtberef ore,_t.hat even if _the defejr\da^nt was induced to take snares by the f^ot bf theWpe^soW n^ef- beib|f on j-o-called p^v^^l^d^tory^yet Hel jwasboutiot by 'hjs r s^b^ aij| Wl|e ,h.as ; elekit'ett to ' lalie 'the, (shares'. 1 Justice i Richmdhd^; T am* pf tibe janpie opmibn*.):Hnder; clause. 4s,^ table B," the " subscribers themselves jte^a^^ a %^i<Sb>r, these pe-»o**,s were -yh6;Subscribea w with biiu;^ . The term provisional director; has ' no sense except as applicable to subscribers to a memorandum of association or to some pravisionally m, the articles of.asspoiatipn. Befpre,l£e company is constituted these cannot.be provisional directors. They are merely persons favorable to the formation .of the company . Looking at it ia that way It was not a material representation,-, and ( -cbuld not lave been .' relied upon by the •'-' defendant. Appeal allowed. , Judgmefir"fpr the plaintiff Spr Mo ; and }i Costs, td^be assessed by the Magistrate, and costs 1 'of appeal deiQlQs: ° !!i