Re STANDARD
FIRE
INSURANCE
COMPANY Nov. 30.
(CASTON'S CASE).
*Dec. 1. ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO. HENRY J.-The law requires that 10 per cent. of the stock of a joint stock company should be paid up, and that no subscription for stock shall be valid unless that amount is paid. The question arises then:. Was that amount paid in this case ?
The payment must be to the company, and it is claimed here that $100 was paid to the company in services. But it is in evidence that no such services were performed for the company.
Any services performed were for the promoters of the company, and the payment for the stock was arranged to be by services for the promoters, and not for the company.
I think it is necessary, to entitle a party to claim as one of the stockholders of a company, that he should be a regular and lawful stockholder.
I do not think Q. such could have been the case here unless ten per cent. of the stock was paid up.
The claimant had arranged for no services to the company; he had no claim against the company; and if he had applied to the company for Henry J. his stock, I think they could well have answered: " You have not paid the 10 per cent;" and if he had claimed that he had arranged that with the promoters, they could have replied: we have nothing to do with the promoters. I think the plaintiff could not have enforced his claim against this company in any way, and the rule should work both ways.
In my opinion the appeal should be allowed with costs.
GWYNNE J.-In my opinion the appeal in this case should be dismissed, and the appellant's name has been rightly placed on the list of contributories.
The condition upon which the appellant says he agreed to subscribe for the shares in the Alliance Insurance Company now merged into Ihe Standard, namely that the stock so subscribed for should be paid by services to be rendered by him as solicitor of the company, that is to say that the moneys to become due to him for services as solicitor should be applied by the company to his quotas in payment of his stock, was a condition subsequent, and although under the circumstances stated by the appellant in his evidence, he might have had the right to rescind the contract while the company was solvent, he has lost that right now.
In October, 1880, he executed a power of attorney to one Crawford, the manager of the company, authorizing him to subscribe for ten shares in the capital stock of the Alliance Insurance Company of the face value of $100 each, and in that power of attorney are the words following:-" And I herewith enclose ten per cent. thereof, and ratify and confirm all my said attorney may do by virtue thereof."
Nbw what his attorney did was to cause the appellant's name to be entered on the stock register as a holder of ten shares, Gwynne J. upon which ten per cent. was entered as paid. The appellant now says that he never did send the $100 mentioned in the power of attorney to be sent with it, and being asked, was there any arrangement between him and any person as to the credit of $ 100, he replied, " that was part of my services, it was not in cash," and being further asked if it had not been credited for services he had rendered the company in getting subscriptions, he replied
Yes, part of my arrangement." Again he says:
" It was distinctly understood that I should pay no cash on my stock."
And the question being again asked whether he was not to be credited on his stock for services, he replied, " yes."
He admitted also that he had received a scrip certificate of shares held by him, which on his examination he produced, and bears date the 9th November, 1880, whereby it is certified under the hand of the secretary of the company, that the appellant holds ten shares of the stock of the Alliance Insurance Company, of the par value of " one hundred dollars each on which ten per cent. has been paid in."
This certificate he held in his hands for years without repudiating it so long as the company continued in existence, nor in fact until the Standard Insurance Company into which the Alliance became merged, became insolvent and in process of being wound up. He also received a warrant of attorney under the seal of the company dated 30th of October, 1880, constituting him solicitor of the company for the transaction of their professional business arising out of and in and for the county of York and city of Toronto. Under these circumstances, I do not think that he can evade being placed on the list of contributories. The case as it appears to me, presents as clear a case of