B lent to a limited company 1000 pounds on its promissory note on the terms that the company should give him collateral security on 10,000 fully paid up 1 pound preference shares, and that if the company should wish to pay off any part of the amount B. was to return shares at the same rate at which he had taken them. The company handed to B. certificates for 10,000 shares, which certificates stated that B was the registered holder of them, and that they were fully paid up. They were in fact shares on which nothing had been paid. The company sold some of these shares, and B executed transfers of the shares sold. His name remained on the register for the remainder when an order was made for winding up the company, and he was placed on the list of contributories in respect of them. B applied to have his name struck out from the list of contributories on the ground that the company were estopped by the certificates from denying that the shares were fully paid up.
Held: (affirming the decision of Vaughan Williams J), that as B knew that the shares were the property of the company, that they had not been transferred to him, and that they had not been fully paid up by himself, he knew facts enough to lead any one who considered them to the conclusion that the shares were not fully paid up; that he, therefore, could not rely on the certificates as an estoppel, and that he must remain on the list of contributories.
Lindley LJ, Rigby LJ
[1896] UKLawRpCh 103, (1896) 2 Ch 525
Commonlii
England and Wales
Cited by:
Appeal from – Bloomenthal v Ford HL 1897
The appellant lent money to a limited company upon the terms that he should have as collateral security fully paid shares in the company and the company handed to the appellant certificates for 10000 shares of 1 pound each. The certificates stated . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 September 2021; Ref: scu.653303
