Page:Federal Reporter, 1st Series, Volume 7.djvu/800

 788 FEDERAL REPORTER. �In delivering the opinion of the court of chancery, Lord Jus- tice Turner observed : �"These shares were allotted to Butcher under the authority given by the articles as paid-up shares, in part of the consideration of the purchase made by the directors from him. The purchase was either valid or invalid. If valid, it is clear that neither he nor his alienees can be called upon to contribute in respect to these shares. If invalid, I cannot see my way to hold that either a court of law or a court of equity could do more than treat the purchase as void, and undo the transaction altogether. It could not, as I apprehend, be competent either to a court of law or to a court of equity to alter the terms of a purchase, and treat as shares not paid up shares which were given as paid-up shares, in part consideration of the purchase. Fraud, assuming there was fraud, would of course warrant the court in treating the purchase as void, or in undoing it ; but it could not, as 1 conceive, authorize any court to substitute other terms." �,In Carling's Case, L. E. 1 Ch. Div. 115, an agreementwaa entered into with the trustee of an intended company for the sale to the company of a property for a certain sum in cash, and a certain number of fully -paid-up shares. The yendor applied to the appellants to become directors, which they agreed to do upon his promising to transfer to them fully paid-up shares to qualify them. They acted as directors and adopted the agreement for sale. Appellants were entered on the register as holder^. each of 30 f ully-paid-up shares, and received cer- tificates to that effect. An order was.afterwards made for •winding up the company, and the.master of the rolls put them, on the list of contributories for 30 unpaid shares each. It was held that as there was no contract between them and the company that they would take shares independently of their accepting certiucates, stating them to be the holders of fully-paid-up shares, they could not be placed on the list of contributories as holders of unpaid shares. In delivering the opinion, Lord Justice James said : �" Now, beyond all question, they never made themselves liable to take any shares at all. They never contracted to take shares or to pay for shares. The only contract between them and the company was the con- tract that arises from the faot that certiflcates of the shares as paid-up «hares were sent to them and they accepted these certiflcates. If, there- foie, the case depends upon a contract between them and the company, the contract must be either approbated or reprobated. If the contract was a contract that they would take paid-up shares, we cannot convert that into a contract lo take unpaid shares." ��� �