ignorance of the circumstances under which the shares were issued to him. He is put on inquiry, In re Gomersall, Jones v. Gordon (4). The onus is on the allottee to prove payment.

[VAUGHAN WILLIAMS, J.: That is so, but Parbury claims that the onus has shifted. He referred also to Blyth's case, In re Heaton Steel & Iron Co. (5).]

No reply was called for.

VAUGHAN WILLIAMS, J.: This is a curious case, and raises a new point. Parbury-the applicant-was an allottee of 100 shares in the Building Estates Brickfields Co. There was no contract in writing to take the shares-admittedly; but Parbury dealt with them as his own. He disposed of 20 of the shares, and he has only now got 80 left. It is in respect of these, that he has been put on the list of contributories. No cash was paid at the time for the shares, and it is now said on behalf of the liquidator that Parbury is liable to pay for the shares in cash under section 25, there being admittedly no registered contract in writing within section 25. Now as far as I know, there is no case in which an allottee has been allowed to avoid the stringency except by showing a registered contract. But though that is so, I am of opinion that in this case Parbury, notwithstanding he is an allottee, is not liable to be placed on the list of contributories. Mr. Upjohn called my attention to Carling's Case (6), and to In re Macdonald Sons & Co. (1) but I do not decide the case on the basis of those authorities. The facts are that Parbury paid 500l. to Wright before the incorporation of the company, and asked him to apply for the shares for him and to employ the 5001. in paying up the necessary amount on the shares if and when they were allotted to him. In truth, Wright never applied for any shares on behalf of Parbury. What he did was this. Being entitled to certain shares as between himself and the company, heWright-got the company to issue fully paid shares to certain persons as his nominees, and among them Parbury, and he appropriated the

(4) 2 App. Cas. 616; 47 L. J. Bkcy. 1; 37 L. T. 477; 26 W. R. 172.

(5) 4 Ch. D. 140; 36 L. T. 124; 25 W. R. 200.

(6) 1 Ch. D. 115; 45 L. J. Ch. ò; 33 L. T. 645; 24 W. R. 165.

500l. These shares were issued under a contract between Wright and the company, not between Parbury and the company. This is not in dispute. Parbury held the shares, did not repudiate them, dealt with some of them. They were registered in his name at the date of the winding-up. Now he seeks to say that there has been payment of the whole amount in cash. In fact there has been no payment in cash, but Parbury says that he is entitled to rely on the general law of estoppel-that upon putting in the share certificates representing the shares as fully paid the company is estopped from saying that the shares have not been paid for.

As I understand the British Farmers' case (2), the transferee of the shares in that case was allowed to say, I produce certificates representing the shares as fully paid-up, and after the issue of that certificate, on the faith of which I acted, the company cannot say Lord Justice JAMES says, at

that the shares are not paid for. p. 538: "I think that the section to which we have been referred, and which has been so often before the Court, does not, in the slightest degree, alter the general law of the land as to the effect of conduct by, or a representation by companies or companies acting through their officers and servants. They are still liable, as they always were, to be bound by any representation made by them or by the officers to whom they have intrusted the management of their affairs. If a person goes to a company, and finding there the proper officer to give answers, says, 'Has such money been paid to you in respect of such and such shares?' and the answer is 'Yes,' then the company is bound by the representation so made. A joint stock company has no statutory immunity from the consequences of its acts and representations." And Lord Justice THESIGER says the same. Apply that principle of estoppel here. Has there been a representation here by the company that the shares in question were paid up? There has. Is Parbury a person who was unaware of the untruth of that representation and acted on the faith of it? It is not denied that he was. Why, then, is not the general law of estoppel to be applied? Because, so I am told, of a passage in

Mr. Buckley's book on the Companies Acts, p. 557.

I am asked to say, on the authority of that passage, that an original allottee must be held liable irrespective of the allottee's knowledge-irrespective of his having acted on the faith of the

representation contained in the share certificates. That is not to apply the general law of the land as to estoppel-to give effect to Lord Justice JAMES's remarks. All that Mr. Buckley means by the passage which has been read to me is that, generally speaking, an allottee has such notice that the shares have not been paid for that he cannot set up an estoppel. That is true. The original onus of proof is on him, the allottee, but as soon as he puts in the minutebook and shews, as Parbury has done here, that the shares have been issued to him as fully paid on the face of the certificates, the onus shifts the obligation disappears. Parbury was in truth misled. He believed, and was justified in believing, that the contract was with him. He believed, and was justified in believing, that the cash had been paid for them. In truth the shares were

Is he prevented then

not issued to him, the cash was not paid. from relying on the doctrine of estoppel? The answer is, No. He had no knowledge of the truth. It is urged that he is prevented from availing himself of the doctrine: that he was put on inquiry and that he wilfully abstained from inquiry. If that was so he would be prevented from claiming the benefit of the doctrine of estoppel; but what is the meaning of put on inquiry, and disentitled to rely on the truth? I cannot say that an allottee is so disentitled, unless he consciously abstains from doing what a person in his position ordinarily would do, because he does not want to know. I know of no reason why an allottee should not rely on the general law of estoppel merely because he is an allottee. Why should Parbury have imputed to him such knowledge of the truth as to prevent him setting up an estoppel against the company? I see no reason, and I therefore make the declaration asked

for.

Solicitors: Bonner, Thompson, Burnie & Co., for Parbury.

Phelps, Sidgwick & Biddle, for the Liquidator.

VOL. II.] IN RE COAL CO-OPERATIVE SOC. G. N. R. v. SAME. 621

IN RE COAL CO-OPERATIVE SOCIETY. GREAT NORTHERN RAILWAY CO. v. SAME.

1895, November 8. VAUGHAN WILLIAMS, J.

Company-Debenture of Industrial Society—Registration under Bills of Sale Acts -Exemption—" Incorporated Company."

Debentures issued by an industrial society are invalid unless registered as a bill of sale.

The exemption from registration contained in section 17 of the Bills of Sale Act, 1882, does not apply to an industrial society. Such a society is not an "incorporated company" within the meaning of the section.

THE Coal Co-operative Society was an industrial society established in 1872, and registered under the Industrial and Provident Societies Act, 1862. In 1893 the society issued to the Great Northern Railway Company debentures to secure a sum of 2,2421. owing by it to the railway company. These debentures contained an admission of indebtedness by the society, and charged with the payment of the sum all the society's freehold, copyhold and leasehold hereditaments and all its capital, stock, and goods, chattels and effects, and all other its property, both present and future, including its uncalled capital. These debentures were never registered under the Bills of Sale Acts.

The Industrial and Provident Societies Acts contain no provision for the registration of mortgages and charges by an industrial society. The Great Northern Railway Company had brought a debenture-holders' action on behalf of all the debenture-holders to realize their security. In June, 1894, the society went into liquidation, and the liquidator disputed the validity of the debentures. The Great Northern Railway Company took out a summons to have their rights determined.

A. àB. Terrell (Buckley, Q.C. with him), for the debentureholders:

These debentures are exempted from registration under the Bills of Sale Acts: In re Standard Manufacturing Co., Ex parte Lowe (1), (1) [1891] 1 Ch. (C. A.) 627; 60 L. J. Ch. 292; 64 L. T. 487; 39 W. R. 369

Bills of Sale Act, 1882, s. 17 (2). It is suggested that that section does not apply to an industrial society registered under the Industrial and Provident Societies Acts, 1862, 1876, 1893. But an industrial society is an "incorporated company.'

E. Macnaghten (Levett, Q.C. with him), for the liquidator representing unsecured creditors:

These debentures are bad. Industrial societies have always been distinguished from ordinary companies: Buckley, "Companies Acts," 6th ed. p. 433. Such a society is not an "incorporated company" within the section.

That is shewn by the Act of 1893, providing that a society may be turned into a limited company, and vice versa. Such a society cannot be wound up as an unregistered company within section 199. [He referred also to the Forged Transfers Act, 1891, s. 3.]

A society like this is not required by the Act to keep a register of mortgages, and is therefore within the mischief of the Acts: Jenkinson v. Brandley Mining Co. (3), Ross v. Army & Navy Hotel Co. (4), Attenborough's Case, In re Cunningham & Co. (5), In re Ma ine Mansions Co. (6), In re Stockton Iron Furnace Co. (7), Bills of Sale Act, 1878, ss. 6, 10, 12.

Buckley, in reply:

"Company" in section 17, means any association of co-adventurers welded into a legal entity. It includes a society like this. Jenkinson v. Brandley Mining Co. (3) was overruled in Read v. Joannon (8). The real ratio decidendi of In re Standard Manufac turing Co., Ex parte Lowe (9), was not that the Companies Act, 1862 and the Companies Clauses Act, 1845, make provision for registration

(2) Section 17 of the Bills of Sale Act, 1882, is as follows:

"Nothing in this Act shall apply to any debentures issued by any mort

(3) 19 Q. B. D. 568; 35 W. R. 834.

gage, loan, or other incorporated company, and secured upon the capital stock or goods, or goods, chattels, and effects of such company."

(4) 34 Ch. D. 43; 55 L. T. 472; 35 W. R. 40.

(5) 28 Ch. D. 682; 54 L. J. Ch. 448; 52 L. T. 214; 33 W. R. 387.

(6) 4 Eq. 601; 37 L. J. Ch. 113.

(7) 10 Ch. D. 335; 48 L. J. Ch. 417; 40 L. T. 19; 27 W. R. 433.

(8) 25 Q. B. D. 300;

(9) [1891] 1 Ch. 627;

59 L. J. Q. B. 544; 63 L. T. 387; 38 W. R. 734. 60 L. J. Ch. 292; 64 L. T. 487; 39 W. R. 369.