McCraken vs. McIntyre. issued for two shares were at $300 each when the full amount of the shares was $500 each. The Defendant became the absolute owner of these shares on 30th January, 1873, and he became a Director of the Company on the 4th February. In his position of Director he had ample means of knowing all about the transaction, in relation to the shares he held. As a Director of the Company, it is not unreasonable to suppose he would enquire into its concerns and hear something of its assets and management. If he had made such enquiry he would have learned that the shares now in dispute had been paid for at the rate of 60 per cent. of their nominal value. In one of the latest cases, in re Imperial Land Co. of Marseilles, ex parte Larking (1) it is said you must attribute to a Director all the knowledge which, by reasonable diligence, he could have acquired. If after that he chose to remain the holder of these unpaid shares, it is not unreasonable he should take the burthens that were upon them. A reasonable time had elapsed before the commencement of this suit (January, 1875) to enable him to make himself acquainted with the title under which he held the shares. If he did not choose to do so, he cannot now complain that he is called upon to discharge the liabilities attached to them. If he, knowing the whole truth about them, chose to retain them when possibly he might have had the transfer to himself set aside as fraudulent, he cannot now repudiate them. It appears to me he is in no better position in relation to these shares than Griffith was. It is laid down in some of the cases, that the owner of shares in a public company is bound to know how his title is derived, and after a reasonable time he (1) L. R. 4 Ch. Div., 576. BLIOT McCraken vs. McIntyre. must be presumed to have this knowledge, and, in this view, I think the Defendant should be held liable.. One of the cases which, I consider, lays down a doctrine that accords with the Respondent's view is Daniell's case (1) decided in 1857, which, if good law, fully sustains the view of the Court of Appeal, and although questioned in some of the subsequent cases, has never been expressly overruled, and if it had been, would not necessarily shew that the decision in the Court of Appeal was wrong. Oakes v. Turquand (2) (1867) reviews the whole law on the subject of these Joint Stock Companies, and traces the legislation in relation thereto. The Court there, adverting to the analogy between a stockholder under the act and a co-partner in a Company without a charter of incorporation, shows, that a person, who becomes a shareholder, incurs liabilities to the creditors of the Company, which, as between the stockholders themselves, may not arise. The views there put forth, I think, sustain the judgment of the Ontario Court of Appeals. There are some other cases decided in Chancery which seem to me also to be in accord with the doctrine that a stockholder may be called on to show that his stock has been paid up, though he himself, when he acquired it, did not intend to become the owner of unpaid stock. On the other hand, it is contended that Waterhouse v. Jamieson (3), favors the Appellant's views. That case, in effect, decides that the Appellant, having paid what he agreed for the shares, and all that was required to be paid by the registered articles of the association, was not liable to be called on to contribute to pay the debts of the Company, though it had been fraudulently (1) 1 De G. & J., 372; (2) L. R. 2 H. L., 325; (3) L. R. 2 Sc. App., 29, (1870). McCraken vs. McIntyre. entered on the articles of association that £100,000 was paid up and only £5,000 would be called for. It was not alleged or pretended that the Appellant was a party or knew of the fraud. The House of Lords held the Appellant was only liable to pay what he was required to pay by the articles of association and his agreement with the Company, and having done so he could not be compelled to pay more by the liquidator representing the rights of the creditors, than he would have been obliged to pay the Company under the articles of · association (1). There the deed showed the liability of the shareholders and persons taking stock under it, and by the statutes the articles of association bound the Company and the shareholders therein to the same extent as if the shareholder had subscribed his name and affixed his seal thereto, If, under the Canadian statute under which this Company's charter was obtained, the Company and the Directors had been authorized to issue stock on the terms on which these shares were issued to Griffith, then Waterhouse v. Jamieson would apply, and shew that the Defendant, if he had taken the stock from the Conpany or from Griffith, would not be liable for what is now the unpaid portion of the stock. Carling and Hespeler's cases (2) really do not touch the point which arises in the case before us. There the Company were authorized to issue paid-up shares to Walker, and they were issued at his request to Carling and Hespeler as such. They were Directors of the Company,; it was held that as they never intended to become proprietors of any but paid-up shares, they would not be liable as contributors. In that case ex (1) Joint Stock Companies Registration Act, 1856, sec. 10; (2) L. R. 1 Ch. Div., 115. McCraken vs. McIntyre. parte Daniell, though not sustained on the ground on which it was put in the report, another view was suggested which was thought to be more correct, yet the case itself, though not approved of, was not overruled. In argument it was clearly distinguished from Carling's case, as the Directors in Daniell's case were not authorized to issue paid-up shares; in Carling's they were. So here they were not authorized to issue stock as paid up, which was only half paid up. Currie's case (1), decided before the Lords Justices, asserts the same doctrine as in Carling's case, and lays down the proposition that you cannot fix upon any person any engagement larger or other than that into which he has entered. In that case the 100 shares on which Currie was intended to be made liable, were issued to one, Butcher, as paid-up shares on an arrangement between him and the Company, and Turner, L. J., said :----" The agreement with Butcher was either valid or invalid. If the agreement were valid, then neither Butcher himself nor any alienee from him could be called upon to contribute in respect of those shares. But if, on the other hand, that agreement was invalid, the transaction must be disregarded altogether." The Directors were held liable as contributors on a hundred shares required to be held by them as Directors, and which they had agreed to take under the articles of association. The case of Guest v. Worcester, Bromyard & Leominster Railway Company (2), which was not referred to in the Courts below or on the argument, seems to be in favor of the Appellant's contention. That was an application to issue a scire facias against Padmore & Abell, alleged shareholders in Defendant's Company. The ap (1) 32 L. J. Ch., 57; 7 L. T., N. S., 487; (2) L. R. 4. C. P., 9. McCraken vs. McIntyre. plication was made under section 36 of 8 & 9 Vic., c. 16, Imp. st., Companies' Act, 1845. That section, with others, having been made applicable by the special act, the effect of the section is, that if any execution be issued against the Company, and there cannot be found sufficient whereon to levy such execution, then such execution may, by order of the Court, to be made after notice given to the shareholder, be issued against any of the shareholders to the extent of their shares not then paid up; and the execution creditor may inspect the register of shareholders to ascertain the names of the shareholders, and the amount of capital remaining to be paid on their respective shares. An execution had been issued against the Company and returned nulla bona. It was sworn that Padmore & Abell, appeared, from an inspection of the register to be holders of 1500 shares of £10 each in the Company, no part of which had been paid up. From affidavits filed it appeared that the Company in 1864, being in want of money, applied to a Banking Company with whom they kept an account to allow them to overdraw £5,000. After some negotiation, their request was acceded to, on the terms of their depositing with the Bank, by way of security, fully paid up shares in their Company, to the nominal value of £15,000. On 7th September, 1864, a resolution of the Directors was agreed to for the purpose of carrying out the arrangement, and a certificate for 1,500 shares of £10 each was issued to Messrs. Padmore & Abell, the Chairman and Manager of the Bank, as trustees for the Bank, in the following form: "These are to certify that Richard Padmore and Martin Abell, of Worcester, Bankers, are the registered proprietors of 1,500 shares, No. 4308 to 5807 of the Worcester, Bromyard & Leominster Railway Co., subject to the |