stock company for the purposes *thereinafter expressed, and to *527] raise a capital of such amount and in such shares as thereinafter specified; and that each subscriber had taken one or more shares in the said capital, and the number or numbers of his share or shares was or were expressed opposite to his respective signature and seal thereto; and that, on the 8th of August, 1854, the society was provisionally registered, and it was intended to obtain the complete registration thereof under the acts of parliament for that purpose passed in the seventh and eighth years and in the tenth and eleventh years of the reign of her present Majesty,-in consideration of the premises, every subscriber (except the said Hew Dalrymple), but as concerning only the acts and defaults of himself, his heirs, executors, administrators, and not otherwise, did thereby covenant with the said Sir Charles Douglas (as a trustee on behalf of the said society), and with his executors and administrators, in manner following, that is to say,-that the subscribers, and such other persons as should thereafter become entitled to shares in the capital of the society (thereinafter called "the shareholders"), and each of them, would, when thereunto in accordance with these presents required, pay the amount of deposit and calls due upon his respective share or shares, and would perform, fulfil, and keep all the several engagements, obligations, and conditions therein contained, and in all other respects observe, conform to, and abide by the rules and regulations of the society,-and that the qualification of a director should be the ownership of not less than 100 shares in the capital of the said society, and that the defendant and divers, to wit, five others should be and were thereby appointed the first and the then directors of the said society, with power to add to their number as therein prescribed, until the first ordinary general meeting,-and that the directors should have *528] full powers to allot and appropriate, upon such terms and conditions as they should think fit to prescribe as to recalling or cancelling any such allotments or appropriations of the shares of the capital of the society so far as the same had not been then taken or subscribed for, and having regard to the rights of all persons desirous of becoming shareholders, as the board of directors should approve, and to reserve for investment during a period of twelve months from the date of these presents such portion of the said capital, not exceeding 5000 shares, as the board of directors should think fit, and to reallot and reappropriate any share or shares the allotment whereof should be recalled or cancelled, as occasion might require, and from time to time to declare and make calls in respect of such shares, for such sums of money, to be paid at such times and in such manner as the board of directors should think fit, and that no call should exceed the sum of 17. per share, and that a period of at least three months should intervene between the payment of any call and the payment of the next or the subsequent call,and that, if any shareholder should fail to pay any call upon or in respect of his share or shares at the time appointed for the payment of such call, the board of directors should have power to sue such shareholder for the amount of such call in any court of law or equity, or other court having competent jurisdiction, and might recover the same, with interest after the rate of 51. per cent. per annum, calculated from the day on which such call ought to have been paid: And that such deed of settlement, which was so executed by the defendant as aforesaid, contained no pro

vision or condition that the said intended capital should be raised, or that the said number of shares should be subscribed for or taken, or a part thereof amounting to two-thirds of the said number of 10,000 shares, or prohibiting the said *company from commencing or carrying on business, as in the said third plea in that behalf [*529 alleged.

To this replication, the defendant rejoined that the said company was completely registered under the said act of parliament in the declaration mentioned on the 13th of December, 1854; and that, on the 9th of January, 1855, the defendant resigned his office of director of the said. company, and that such resignation was duly accepted, to wit, by the board of directors thereof, at a meeting of such board on the 22d of January, 1855; and that, from the time of his said resignation, he had not in any manner interfered in the concerns of the said company.

To this rejoinder the plaintiffs demurred, the grounds of demurrer stated in the margin being, that the "defendant's having ceased to be a director affords no answer to this action, which is against him as a shareholder; and, if it could be an answer, the defendant should have stated that he ceased to be a director before the calls were made or became due." Joinder.

Bovill, Q. C. (with whom was Baylis), in support of the demurrer.(a)— The real question is, whether, having signed the deed of settlement, the defendant can defend himself against a claim for calls, on the

ground that the company has proceeded to carry on business [*530 with less than the stipulated amount of capital subscribed for. It is submitted that he cannot. Before a joint stock company can be completely registered, there must be a deed of settlement: but the moment that is executed, the parties are incorporated and the company is formed. By the interpretation clause of the 7 & 8 Vict. c. 110, s. 3, par. 5, the word "subscriber" is declared to mean "any person who shall have agreed in writing to take or have taken any shares in a proposed company or a company formed, and who shall not have executed the deed. of settlement or a deed referring thereto;" and par. 6 defines "shareholder" to mean 66 any person entitled to a share in a company, and who has executed the deed of settlement or a deed referring to it, or, in the case of mutual assurance societies, any person who shall be an assured member thereof." The defendant, therefore, clearly is a shareholder in this company. The 7th section enacts that "it shall not be lawful for any joint stock company hereafter to be formed for any purpose within the meaning of this act, &c., to act otherwise than provisionally in accordance with this act [s. 4], until such company shall have obtained a certificate of complete registration as hereinafter provided; and no joint stock company shall be entitled to receive a certificate of complete

(a) The points marked for argument on the part of the plaintiff, were,

"That the declaration and replication are good, and the plea and rejoinder bad, and that, inasmuch as it is admitted that the defendant executed the deed of settlement in respect of the shares for calls on which he is sued, he is properly sued in the statutable form of declaration by the plaintiffs, a completely registered company; but neither the act of parliament nor the deed prohibit the plaintiffs from suing the defendant for calls in consequence of all the capital not being raised or shares subscribed for, as alleged in the plea; and that the defendant's having ceased to be a director does not discharge him from his liability for calls as a shareholder, as pretended in his rejoinder; and that, even if it could, the rejoinder should have stated that he ceased to be a director before the calls became due."

registration unless it be formed by some deed or writing under the hands and seals of the shareholders therein," &c. Then the 25th section enacts, "that, on the complete registration of any company being certified by the registrar of joint stock companies, such company and the *then shareholders therein, and all the succeeding shareholders, *531] whilst shareholders, shall be and are hereby incorporated as from the date of such certificate, by the name of the company as set forth in the deed of settlement, and for the purpose of carrying on the trade or business for which the company was formed, but only according to the provisions of this act and of such deed as aforesaid, and for the purpose of suing and being sued, and of taking and enjoying the property and effects of the said company," &c. And then s. 55 enacts, "that, if any shareholder fail to pay any instalment of capital due upon or in respect of any share held by him, when the same shall become due, it shall be lawful for any such company, and they are hereby authorized, to sue such shareholder for the amount in an action of debt in any court having competent jurisdiction in respect of the same; and that, in the declaration in any such action, it shall be sufficient to state only that at the time of the commencement of the suit the defendant, as the holder of certain shares (stating how many) in a certain company or undertaking, as the case may be (naming it), was indebted to the company in a certain sum (stating the amount of the instalments, or so much thereof as is sought to be recovered), for certain instalments of capital then due and payable in respect of the said shares, and that the defendant hath not paid the same," &c. The defendant here is sued in the statutory form as a shareholder in an incorporated company. The answer the defendant attempts to set up, is, that, before the complete registration of the company, he subscribed for shares in a company the capital whereof was to be 100,000l., in 10,000 shares of 107. each; that two-thirds only of that number of shares were subscribed for; and that he never agreed or consented that the company should commence or carry on business with less than the *number originally specified. The replication states *532] that the action is brought against the defendant as a shareholder,

that he executed the deed of settlement, and that the deed did not contain any provision or condition that the company should not commence or carry on business with any less number of shares subscribed than 10,000. [COCKBURN, C. J.-You contend, that, by executing the deed of settlement, the defendant shows his assent to the directors proceeding with less than the prescribed amount of capital?] The deed constitutes a new agreement. [COCKBURN, C. J.-Is there anything in the deed affirmatively giving the directors power to carry on the business of the company?] That does not appear upon this record. The original contract is superseded by the execution of the subscribers' agreement. This was decided in Watts v. Salter, 10 C. B. 477 (E. C. L. R. vol. 70), where Parke, B., in delivering the judgment of the Exchequer Chamber, says: "The plaintiff having executed the deed, has agreed under his hand and seal that the provisional directors shall do all that is therein contained; and by that deed he is bound, unless he was induced by fraud or misrepresentation to execute it. It has been contended that the directors had no power under the deed to deal with any part of the money until the whole amount had been subscribed. I do not, however, agree in that construction. If such had been the plaintiff's intention,

he should have taken care not to execute a deed which did not express it. No such express stipulation is to be found on the face of the deed: and none can be implie The distinction between "subscriber" and "shareholder" is pointedly taken in the case of The Galvanized Iron Company v. Westoby, 8 Exch. 17. The party exercises his option when he executes the deed. The 7th section of the 7 & 8 Vict. c. 110 contemplates that all the subscribers will not execute the deed. *Field, contrà.(a)—It is submitted,-first, that the defendant is not liable at all,-secondly, that he is at all events not liable [*533 to be sued in the statutory form. The plea alleges, and the replication admits, that the capital of the company was to consist of 100,000l., in 10,000 shares of 107. each; and then it goes on to allege that the defendant never agreed or consented that the company should commence or carry on business with any less than the proposed number of 10,000 shares. The defendant has a right to say that the company to which he proposed to become a subscriber never was formed at all. [CockBURN, C. J.-It appears by the declaration that the defendant executed the deed, and that the deed contained a recital that the whole capital had not been subscribed, and it also contains an unqualified covenant to pay calls. Is there anything in the subsequent provisions to control that?] There is nothing in the deed, as set out in the replication, in terms controlling that covenant: but, on the other hand, there is nothing to show that the company was formed. [COCKBURN, C. J.-The deed starts with a statement that the whole number of shares had not been allotted; and in the mean time the parties agree that the concern shall go on. Suppose there had been no preliminary agreement, but that there had been nothing but this deed,-could it be said that a party executing the deed did not thereby become liable to pay [*534 calls? The covenant is positive and not conditional on all the shares being subscribed for.] It is submitted that the deed here is as much conditional as were the agreements in Pitchford v. Davis, 5 M. & W. 2,† and Fox v. Clifton, 4 M. & P. 676, 6 Bingh. 776 (E. C. L. R. vol. 19), 2 M. & Scott 146 (E. C. L. R. vol. 28), 9 Bingh. 115 (E. C. L. R. vol. 23). [COCKBURN, C. J.-There, the parties agreed to become members of an association upon a condition which was not performed. But here, the defendant waives his right to insist upon the entire number of shares being subscribed as originally proposed, and testifies that by executing the deed. Does it lie in his mouth afterwards to insist upon the condition? He knew when he signed the deed (for, the deed recites the fact), that the entire sum had not been subscribed.] At all events, the defendant is not liable in the statutory form. The proper remedy for non-payment of calls is, by action upon the covenant which is referred to in the replication. [BYLES, J.-That covenant does not supersede the right of action for calls expressly given by the statute.]

COCKBURN, C. J.-I am of opinion that our judgment must be for the plaintiffs. There is no doubt that this association was originally formed (a) The points marked for argument on the part of the defendant, were,—

"That the plea is good and the replication bad; that it appears that the company to which the defendant subscribed was never formed, and that the defendant never consented to its concerns being carried on with a smaller capital than the one originally agreed on, and, under these circumstances, it will be contended that the defendant never became a shareholder, and is not liable for calls; and that, whatever might have been the case, had the action been upon the deed mentioned in the declaration, the plaintiffs cannot recover upon the present pleadings."

under an arrangement that its capital should consist of 100,000l., in 10,000 shares of 107. each, and that that number of shares was not subscribed for. But the defendant has thought proper to execute the deed of settlement of the company; and in that deed it is recited that "the subscribers had agreed to form a society or joint stock company for the purposes thereinafter expressed, and to raise a capital of such amount and in such shares as thereinafter specified," &c.; and then the deed contains provisions which clearly show, that, at the time of the execution of the deed, all the parties thereto were *aware that the

*535] shares had not been subscribed for to the full extent originally

proposed, but that, nevertheless, it was intended that the company should go on with such number of subscribers and such amount of capital as had already been obtained. That being so, and there being nothing in the deed to show either expressly or by implication that the directors were not to go on until all the shares had been taken up, but, on the contrary, it being manifestly contemplated that they should proceed at once, and as by the terms of the covenant the engagement on the part of the shareholders to pay calls is not made conditional upon all the shares being subscribed for, but it is absolute and unconditional, there is nothing upon this record to negative the defendant's liability. Without, therefore, in any respect interfering with the decisions, to which I entirely assent, which have established the non-liability of a party subscribing to an undertaking of this sort upon conditions which are not complied with, it seems to me that the defendant is liable to be sued for calls, and that in the form pointed out by the 55th section of the

statute.

WILLIAMS, J.-I am of the same opinion. The company has obtained a certificate of complete registration, to obtain which the provisions of the 7 & 8 Vict. c. 110, s. 7, must have been complied with. That section requires, as a preliminary to complete registration, that the company shall be formed "by some deed or writing under the hands and seals of the shareholders therein." The defendant has executed that deed. He is therefore a "shareholder" within s. 3, and consequently a person liable to be sued for calls under s. 55.

WILLES, J.-Assuming that Mr. Bovill has failed to show that there are any provisions in the deed *authorizing the directors to pro*536] ceed to carry on business without having the whole of the contemplated capital subscribed for, I think Mr. Field has also failed to relieve himself from the pressure of that part of the replication which alleges that the deed does not contain any provision or condition that the company should not commence or carry on business with less than 10,000 shares subscribed. Dickenson v. Valpy, 10 B. & C. 128 (E. C. L. R. vol. 21), 5 M. & R. 126, and that class of cases, are altogether inapplicable here, because in all of them there was an implied condition that the directors should not proceed without having obtained subscriptions for the stipulated amount of capital. Here, the replication shows that the defendant, when he executed the deed, knew that the whole number of 10,000 shares had not been subscribed for, without showing that there was any stipulation that the concern should not be commenced without the full capital. If it should turn out at the trial that the deed in extenso is inconsistent with what is stated in the replication, the defendant may succeed upon never indebted. But, upon the pleadings