CO129-535-5 N.I. Brewer- transcript of trial and evidence 1-1-1929 - 31-12-1931 — Page 59

His Lordship:

Mr. Breweri

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alleged there was any ground for setting it aside. That at the present moment the Officiel Receiver 18 sueing for the full amount, although the calls have not yet been made 100 per cent. Then it has been Buglected by this scheme the shares were capable of indefinite expansion, that you could equally make the capital $10,000.000.00 if desired. But the answer there, is that it was not possible to do these transactions at all unless you have the person willing to accept liability. Although actual banknotes may not have been taken out of the pockets of these persons, the mere fact of a person having tb guarantee to pay cabh on demand, is sufficient to prevent him from going in for an- limited quantities of shares in that manner. The man with property will not sign his name to a legal document unless he is prepared to pay. We have had evidence to show these men were men of substance, we have not evidence to show that they were not. As such they would not sign their willingness to pay the money on demand. A man with property would hesitate before signing to pay a demand, as he could be sent to prison for debt. I believe that is 80,

The other point was the question of a married woman.

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in this way you will get exactly the sume legal effect of all perties, the exact same book transactions throughout the whole of your ledgers, but the only book that will be altered will be the cash book.

instead of having that applica- tion, if you have a doowment which reads as follows:

In coneideration of your issuing to me 10,000 full paid shares, I see that in addition to the $2,000.00, have already paid, I will pay a further $9,000.00 and i pledge my shares as security ---" The only difference between such a form and that of the Instone Dank is that the Instone Dank provides that a payment of cash be made and a loan of cash to the shareholder against a promise to repay on demand. The essence of the transaction 13 that the Company issue fully paid shares 10,000- and the shareholder pránises that in addition to the $1000.00 he has already paid he will pay the other $9,000.00. The only difference is that the form used by the Instone Bank calls for a payment of cash for the shares and calls for the ank to loan cash to the shareholder. The shares are allotted and the loan is allotted. The only difference is

that cush has been paid for the share and for the loan,

The method adopted by the Bank is more difficult than the one I have suggested but in practice this was compensated

The nature of the transaction is identical in both cases, the effect on the parties is identical. before the transac- tion took place the position of the shareholder was he had 10% paid up and has no right to pay any part of that 9,000.00 except by legal

after

zick the transaction he has shares 100 per cent paid up and has the right to pay the 19,000.00 or any part of the $9,000.00

The Company's position before the transaction is that though they have the right to call the remainder of the capital it would take four calls and the capital liability of the Company would be 10%. After this transaction