that when $50,000 shall have been subscribed and $5,000 paid in, a meeting should be called for the election of directors to enable the company to exercise its corporate powers, as the persons named and the persons to be associated with them were only to become a body corporate after having complied with the requirements of the act as to the subscription of stock.

But neither the persons named in the act nor such other persons as desired to associate themselves with them were to be corporators or members until they had both subscribed and paid; and one can well understand, in a company of this kind requiring a large amount of capital in order to carry on its business safely and efficiently, that such a provision might be a very salutary one.

The present subscription was made after the complete organization; and I do not doubt that when the company accepted the subscription, it became legal and valid for what it purported to be; viz., an agreement on the one side to grant the stock on payment of the ten per cent., and an agreement on the other to pay that amount and take the stock; but it was not a subscription by the terms of which the party became then and there a stockholder, or entitled to shares.

In various charters, passed during the same session of the legislature, very different language is used; although I observe that many of the promoters are the same.

In that of the Canada Fire and Marine, immediately following the charter of this company, the shares are to vest at once in the persons who subscribe, although the provisional directors are authorized to receive from the shareholders a deposit of ten per cent. on the amount of their stock subscribed.

So in the case of the Industrial and Commercial, passed at the same session, the subscribers immediately became shareholders on subscription, and the provisional directors were authorised to receive a deposit of five per cent.

Mr. Bain relied upon an English case, East Gloucestershire R. W. Co. v. Bartholomew, L. R. 3 Ex. 15, as shewing

that the words in this charter could not be held to indicate that the payment of the ten per cent. was a condition precedent; but Mr. Galt gave, I think, a satisfactory answer, that there the defendant had signed the subscription contract, that particular shares had been allotted to him, and his name was on the register.

Sec. 3 of the special act provided that certain persons named, and all other persons who should thereafter subscribe to the undertaking, should be united into a company. They became, therefore, members at once on subscribing; and the only remaining question was, as to the construction to be given to the proviso which declared that the company should not issue any shares created under the authority of this act, nor should any share vest in the person accepting the same, unless and until a sum not less. than one-fifth part of the share shall have been paid up in respect thereof.

The proviso recognises that the subscription creates the share, and merely provides, as the court held, that no certificate should issue nor should the share vest in the subscriber so as to enable him to transfer it, but that he was nevertheless a shareholder. The restriction was, in fact, similar in its effect to that in many of the charters I have referred to, which prohibits a right to vote or transfer until a certain proportion of the subscription was paid up. Purdey's Case, 16 W. R. 660, is to the same effect.

The case in the New Hampshire Reports was more in point: Piscataqua Ferry Company v. Jones, 39 N. H. 491.

There, however, the Act of Incorporation provided that the capital stock should be divided into shares of $50 each, and the defendant subscribed the stock book agreeing to take the number of shares set opposite to his name, and to pay the assessments thereon at such times as the directors might order. At a meeting of stockholders held subsequently to the opening of the stock books, a resolution was passed that all the subscribers of stock not heretofore admitted be now admitted members of the corporation.

Under a by-law of the corporation made at the preliminary meeting for opening stock books, it was provided that ten per cent. should be payable on subscription, or the subscription should be void.

It was there held, that this being a regulation made by the company itself might be waived, and much stress was laid upon the circumstance that the provision was, that the ten per cent. was payable on subscription, and not as it is in the case before us that the ten per cent. shall be actually paid. The court there thought it was no forced construction to hold that the intention was not, that each subscriber by the terms of his subscription and the by-law was obliged actually to pay his ten per cent., but that this amount should, upon subscription and as part of the contract of subscription, be payable at once, or whenever the company

should choose to demand it.

The other case referred to by Mr. Bain, The Ogdensburg, &c., R. W. Co. v. Wolley, 40 N. Y. 118, seems rather to be an authority against him. The court there (p. 120) says: "If the statute not only requires a subscription on the books, but that such subscription should be attended by a cash payment of ten per cent., to make a valid contract, and one binding on the parties, the defence must succeed. On the contrary,

*** if the subsequent payment of the ten per cent. voluntarily or involuntarily, so that the company actually got the money, invested the defendant with all the rights of a stockholder, and he could have compelled a delivery of the stock to him when the action was brought, there is no defence."

I do not understand that an agreement to take stock is invalid or prohibited by the statute; but I understand that no subscription is of any actual validity until the ten per cent. has been paid. Until the payment the subscriber is in the position of a person who has agreed to take stock. After payment he is invested with the full rights of a shareholder.

I think that all that can be said in this case is, that Kelly contracted to take the shares, and upon the payment of the ten per cent. he would have been entitled to become

a shareholder; but he was not a shareholder, and therefore did not, under the terms of the amalgamation Act, become a shareholder in the Standard.

Upon this ground I think the appeal should be allowed, with costs; but as the objection was not taken below, no costs of the proceedings there.

BARBER'S CASE.

COPP, CLARK AND Co.'s CASE..

CASTON'S CASE.

In these cases the appellants signed powers of attorney authorizing a Mr. Crawford, the manager of the Alliance Company, to subscribe for shares in the company. Mr. Crawford did not subscribe the stock book, nor did he authorize ony one else to do so; but he caused an account to be opened in the company's books as if they were respectively shareholders, charging them on the debit side with the full price of the shares. It was urged, in support of the position, that this was a sufficient subscription; that a written application is never necessary, but an allotment on a verbal application is quite sufficient. The analogy is not very perfect. In such a case, the applicant having been allotted and having accepted shares is a shareholder; but it is not necessary to consider whether this would have. been a sufficient subscription, inasmuch as the ten per cent. was never paid in the two first cases, and, according to our judgment in Kelly's Case, there never was a legal and valid subscription.

Another nice question might have arisen if this were not sufficient to dispose of the case, viz., whether there was not a condition upon which alone they consented to become subscribers. The cases are very distinguishable from those in which a condition is spoken of at the time the subscription is made, but is not embodied in the contract. Here authority was given to be acted upon only in a certain event, and it may be open to doubt whether the principal

could have been bound by a subscription entered into under such circumstances until the company were prepared to carry out their portion of the contract; but, for the reasons given, it is unnecessary to consider that point.

Caston's Case stands on a different footing. He sent in a power of attorney in the same form as the others, and he was duly appointed solicitor for a certain local district, was allotted shares, was credited on account of them with his account for services to the extent of the ten per cent., and was furnished with a certificate of the stock standing in his

name.

I do not think there can be any doubt that he became a shareholder in the Alliance, and, upon the passing of the act amalgamating that company with the Standard, a shareholder in that company.

As to him the appeal must, I think, be dismissed, with costs; as to the others allowed, with costs in this court and in the court below.

HAGARTY, C. J. O.-As to Kelly, Barber, and Copp's Cases I agree in the judgment just delivered. As to Caston's Case I assume for the purposes of this case that the liquidator has no higher power than the company. If the company

had sued Mr. Caston for a call, I think he could not have successfully urged that he was not a shareholder. I think there are cases in which a person's status and liability as a shareholder can be established without an actual subscription or written agreement to take stock.

In the case before us he had a claim against the company for legal expenses, $100. He arranged with the company that this should go against the ten per cent. payable on ten shares. The company so entered it in their books, crediting his stock account with $100 as paid on stock, and sent him a certificate in the usual form as set out in the exhibits, certifying his holding of the ten shares on which $100 was paid.

He held this in his hands about two years. If the shares had gone to a premium, he could have sold and obtained an