CO129-535-5 N.I. Brewer- transcript of trial and evidence 1-1-1929 - 31-12-1931 — Page 88

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and the shareholder other than the five or ten per cent,

were made between the Company and the

but book entries

It must

be borne in mind when considering Brewer's case that when

the Statutory Report was filed, all the shareholders were aware of the 'transaction and how it had been carried out.

shareholder on the basis of cash having passed.

Now what is the distinction between Brewer's case

and Spargo's case, In Spargo's case the existing debt of the Company was set off and extinguished by allotting to the shareholder fully paid up shares of the equivalent

amount. In Brewer's case fully paid up shares were

allotted to the shareholder, the Company receiving in

exchange, with the consent of all shareholders, the shareholders' undertaking to pay the amount in cash when demanded. In one case a liability became extinguished

and in the other the personal undertaking to pay was a

continuing one.

اي مديرية

Now if instead of the Brewer transaction being merely

recorded in the books of the Company by a cash entry on

either side, the Company had actually advanced the money in hard cash by way of loan to the shareholder, receiving the promissory note therefor, and the shareholder then handed back to the Company the cash amount for his shares, could it be possibly argued that the shares had not been

fully paid in cash? I do not think it could, the shares would have been paid for in cash and the shareholder would nevertheless be still liable to pay the amount of

the loan to the Company whenever demanded. purposes, where is the distinction between the book entries in Spargo's case and the book entries in Brewer's case? My submission is that Brewer on the basis of Spargo's

case was in law entitled to treat the transaction as a

cash transaction not only in the Statutory Report, but

until such time as the financial instability of the

Now for criminal

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