CO129-535-5 N.I. Brewer- transcript of trial and evidence 1-1-1929 - 31-12-1931 — Page 87

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"if the parties meet together and agree to set the one

"against the other, they need not go through the form and

"ceremony of handing the money backwards and forward".

Spargo's case was followed and approved of in

Larocque v.Beauchemin, reported in 76 Law times, page 473 and

Lord Macnaughten when giving judgemant in that case on

behalf of all the Judges of the Privy Council states:-

"Their Lordships are not prepared to dissent from the

"decision in Spargo's case. It is a decision of the highest

"authority. It was pronounced by James and Mellish L.J.J.,

"and the view which those eminent judges expressed had,

"as appears from their judgments, the approval of Selborne,

"L.C.".

Such being the position of the law, what are the

facts in Brewer's case? Brewer with others formed and

registered a public company known as the Instone Banking

Corporation with a share capital divided into shares of

the face value of $100 each. The Articles of the Company

permitted the shareholder to pay up his calls in advance.

The shareholders were a close corporation and it was

decided that the shares should be issued as fully paid up

on the basis that the whole face value of the shares was

paid up for cash and to enable this to be done, the share-

holder paid up in cash 5% or in some cases 10% of the face

value of the shares, the balance being provided by the

Company advancing to the shareholder the requisite ninety

or ninety-five per cent for which it received the share-

holder's promissory note repayable on demand, the shareholder

then used the money in paying up the balance of the amount

due in respect of his shares. The result was that the

shareholder received fully paid up shares, and the Company

held his promissory note, repayable on demand for the

equivalent of the ninety or ninety-five per cent. As a

matter of fact no actual Cash passed between the Company

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