1866.

RAMSGATE
VICTORIA
HOTEL CO.

V.

MONTEFIORE.

and the defendant, before any such allotment, and after such reasonable time as aforesaid had elapsed, withdrew, and gave notice to the plaintiffs that he withdrew, his said application for the said shares, and the defendant then, as he lawfully might, refused to accept the said shares, and to pay the said deposit and calls, which is the breach of agreement complained of.

-

Seventh. That the plaintiffs did not, within a reasonable time in that behalf, give notice to the defendant that they had allotted to him any of the said shares, and he, the defendant, after such reasonable time as aforesaid had elapsed, and before the giving to him by the plaintiffs of any such notice, withdrew, and gave notice to the plaintiffs that he withdrew, his said application, and then the defendant, as he lawfully might, refused to accept the said shares and to pay the said deposit and calls, which is the breach of the agreement complained of.-Issues thereon.

By consent a special case in each action was stated for the opinion of this Court (so far as material) as follows:

The plaintiffs in the first mentioned action are a Company completely registered, on the 6th June, 1864, under the Companies' Act, 1862, and articles of association were also registered on the same day.

On the 8th June, 1864, the defendant in the first mentioned action applied to the directors of the Company for fifty shares by the following letter:

"To the Directors of the Ramsgate Victoria Hotel

"Gentlemen,

66

Having paid to your bankers the sum of 50%., I hereby request you will allot me fifty shares of 201. each in the Ramsgate Victoria Hotel Company, Limited, and I hereby agree to accept such shares, or any smaller number

HILARY TERM, 29 VICT.

that may be allotted to me, to pay the deposit and calls thereon, and to sign the articles of association of the Company, at such time and in such manner as you may appoint.

"I am, Gentlemen,

"Moses Montefiore."

Prior to the said application the defendant had paid to the Company's bankers 50l. as stated in the above letter, and had received from them a receipt in the following form :

"Received the 8th day of June, 1864, on account of the directors of the Ramsgate Victoria Hotel Company, Limited, the sum of 501., being the deposit paid in accordance with the terms of the prospectus, on an application for an allotment of fifty shares in the said undertaking."

At a meteing of the directors, on the 17th of August, 1864, the secretary made out and submitted to the board the list of applicants for shares up to that time, amongst whom appeared the name of the defendant, Montefiore.

At a meeting of the directors, on the 2nd of November, the following minute was entered: "The secretary submitted the list of subscribers, but it was not deemed advisable to proceed to an immediate allotment."

Afterwards, and before the 23rd of November, the secretary prepared another list of subscribers and applicants for shares, which shewed opposite the defendant's name fifty shares in the column of shares applied for, and fifty shares in the column of shares allotted.

Between the month of June, 1864, and the receipt of the letter of the 23rd November, hereinafter mentioned, the defendant received no direct reply to his application for shares, nor any express notice of allotment, nor any information or communication whatever from the directors or secretary or agent of the Company, and he

1866.

RAMSGATE
VICTORIA
HOTEL CO.

v.

MONTEFIORE.

1866.

RAMSGATE VICTORIA HOTEL CO.

V.

MONTEFIORE.

consequently, on the 8th November, 1864, wrote to the directors of the Company the following letter:

"Gentlemen,

:

"The allotment of shares in this Company not having been made, I now withdraw my application for fifty shares, made some months since, and request that you will return to me the sum of 50l., being the deposit paid by me to the bankers of the Company. At the same time I beg to inform you that I shall decline to accept any shares in the Company (if allotted), or to sign the articles of association.

"I am, Gentlemen,

"Your obedient Servant,

"M. H. Montefiore."

No reply to this letter having been received, on the 18th November, 1864, the defendant's solicitors wrote to the plaintiffs requesting the return of the 50%.

On the 23rd November, 1864, the directors passed a resolution that notice be given to all shareholders that the directors do hereby make the first call of 41. already due on the allotment of their shares.

The defendant's name is on the register, or alleged register, for fifty shares, and notice of the same was given to the defendant, on the 23rd November, 1864, by the following letter:—

"I am instructed by the directors to acquaint you that in compliance with your application they have allotted to you fifty shares in this Company, and have entered your name in the register of shareholders for the same, and I have to request that you will pay the balance of the first call, as noted below, on or before the 15th day of De

cember, to the London and County Bank, 21, Lombard

Street.

"Number of shares 50

1866.

RAMSGATE
VICTORIA

"Your obdt. Servt.,

HOTEL CO.

"Deposit £50

"H. Winfield Crace."

v.

MONTEFIORE.

The solicitors of the defendant wrote in reply requesting that his name should be forthwith removed from the register of shareholders, and that the deposit should be returned.

The question for the opinion of the Court in the first mentioned action is, whether, under the above circumstances, the Company are entitled to maintain their action for the said sum of 2007., balance of deposit, or any other

sum.

In the second of the above mentioned actions the facts are the same, except that the defendant has never at any time withdrawn his application, or given notice of any intention to do so.

The question for the opinion of the Court is the same.

The third of the above mentioned actions is brought to recover back the deposit of 501. paid by the plaintiff to the bankers as above stated, and also for damages for not duly allotting.

The facts are the same, mutatis mutandis, as the first mentioned action, and the question for the opinion of the Court is, whether the plaintiff in the third mentioned action is entitled to maintain it for any and what amount.

Mellish (Digby with him), for the plaintiffs in the two

first above mentioned actions, and for the defendant in the
third. With respect to the first action, it is conceded
that the defendant had no notice of the allotment of
shares prior to his withdrawal of his application for them;
and he contends that there could be no binding contract
until he had notice that his application was accepted.
But the question is, whether in fact there has been an
allotment of shares to him, and that depends upon
what, in point of law, constitutes an allotment. It is sub-
mitted that the insertion of the defendant's name in the
lists of subscribers amounted to an allotment. [Martin, B.
-The defendant says, "Having paid to your bankers 50%,
I request you will allot me fifty shares, and I hereby agree
to accept them, or any smaller quantity that may be allotted
to me;" then the plaintiffs ought, within a reasonable time,
to have informed the defendant that they acceded to his
application.] No doubt, in ordinary cases, an assent to
a proposal is necessary to constitute a binding contract, and
the assent must be given within a reasonable time; but that
rule cannot apply to an allotment of shares, for the directors
must necessarily wait to see how many shares are applied
for before they can allot them. In Bloxam's Case (a) an
applicant for shares paid the deposit and his name was
entered as an allottee in a book called the "register of
allotment of shares," but no notice of the allotment was
sent to him, and Sir J. Romilly, M. R., held that he was a
shareholder. On appeal that decision was affirmed (b),
and Turner, L. J., said, "I think that the contract became
perfect and binding upon the appellant when the allotment
was made, and that notice of the
sary to perfect the contract."
authority to the same effect.
cases the question was whether
(a) 33 Beav. 529.

allotment was not necesCookney's Case (c) is an [Pollock, C. B.—In those the allottee was liable as

(c) 26 Beav. 6.

(b) 33 L. J. Chan. 574.