Page v. Austin, , 10 S.C.R. 132 (1884)
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Page v. Austin, , 10 S.C.R. 132 (1884)
Supreme Court of Canada
Page v. Austin, 10 S.C.R. 132Date: 1884-03-08George S. Page et al. (Plaintiffs) Appellants;andJames Austin (Defendant) Respondent.1882: December 4; 1884: March 8.Present: Sir William J. Ritchie, C.J., and Strong, Fournier, Henry, Taschereau and Gwynne, JJ.ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.Company-27 & 28 Vic., ch. 23-Shareholder, liability of-Estoppel-Mortgagee of shares.The Ontario Wood Pavement Company, incorporated under 27 & 28 Vic., ch. 23, with power to increase by by-law the capital stock of the company "after the whole capital stock of the company shall have been allotted and paid in, but not sooner," assumed to pass a by-law increasing the capital stock from $130,000 to $250,000 before the original capital stock had been paid in. P. et al, execution-creditors of the company, whose writ had been returned unsatisfied, instituted proceedings by way of sci. fa. against A. as holder of shares not fully paid up in said company. It appeared from an examination of the books that the shares alleged to be held by A. were shares of the increased capital and not of that originally authorized.Held (affirming the judgment of the Court of Appeal) that as there was evidence that the original nominal capital of $130,000 was never paid in, the directors had no power to increase the stock of the company, and as the stock held by A. consisted wholly of new unauthorized stock, P. et al were not entitled to recover. (Gwynne, J., dissenting, on the ground that the objection not having been taken by the defendant or tried, the court, under sec. 22, ch. 38 R.S.O., should put the questions of fact upon which the validity and sufficiency of the objections suggested by the court rested, into a course for trial in due form of law.)Where a statutory liability is attempted to be imposed on a party which can only attach to an actual legal shareholder in a company, he is not estopped by the mere fact of having received transfers of certificates of stock from questioning the legality of the issue of such stock.Per Strong and Henry, JJ., (Gwynne, J., contra), that although A.,a mortgagee of the shares and not an absolute owner, had taken a transfer absolute in form and caused it to be entered in the books of the company as an absolute transfer, he was not estopped from proving that the transfer of the shares was by way of mortgage. (23 of sub-sec. 19, of sec. 5, 27 & 28 Vic., ch. 23).APPEAL from a judgment of the Court of Appeal[1] for Ontario, reversing the judgment of the Court of Common Pleas[2]. The facts and pleadings are fully stated in the opinions of the judges on the present appeal.Mr. Bethune, Q.C., for appellants, and Mr. Robinson, Q.C., and Mr. MacLennan, Q.C., for respondent.The points relied on and the cases cited are reviewed in the judgments.RITCHIE, C.J.:This is an action brought by writ of scire facias by the appellants, who are creditors of the Ontario Wood Pavement Company of Toronto, a body corporate, to recover against the respondent the amount unpaid by him upon the one hundred and eleven shares held by him in the stock of the company.The company was incorporated under a statute of the late Province of Canada, passed in the 27th and 28th years of Her Majesty's reign, chap. 23. The appellants recovered judgment on the 28th of July, 1874, against the company.An execution issued by them against the company was returned nulla bona, and this action was commenced: on the 22nd September, 1875, by scire facias.To the said scire facias the respondent pleaded, amongst other defences:1. For a first plea to the plaintiffs' declaration,that he was not a stockholder of the said "The Ontario Wood Pavement Company, Toronto," as alleged.2nd. And for a second plea, the defendant says that there is not still due and unpaid by him on the capital stock of the said company the sum of $8,880 or thereabouts, or any sum whatever, as alleged.3. And for a third plea, the defendant says that one George Arthurs was the holder of 111 shares of the capital stock of the said company, amounting to the sum of $11,100, and was entered on the books of the said company as the holder thereof, and on the said books the said shares were entered as shares fully paid up; and the defendant says that he purchased the said shares from the said George Arthurs in good faith and for valuable consideration, believing the same to be fully paid up shares, and without any notice or knowledge that the same were not, in fact, so fully paid up, and the defendant says that the last mentioned shares are the same shares as in the declaration mentioned.4. And for a fourth plea, the defendant says that the said writ of fieri facias has not been returned "nulla bona" by the said sheriff, as alleged.5. And for a fifth plea, the defendant says that the stock held by him, and referred to in the declarati...See the full content of this document
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