Page v. Austin

Page v. Austin

Because the original $130,000 capital had not been paid in, the by-law purporting to increase capital was ultra vires and shares issued under that increase were void; accordingly the defendant could not be treated as a legal shareholder liable for unpaid calls. Separately, a mortgagee who received an absolute transfer may, consistent with the statute and prima facie character of company books, prove the transfer was collateral security and avoid personal liability under s.29.

Citation
(1884) 10 SCR 132
Parties
Appellants (judgment Creditors): George S. Page et al.; Respondent (defendant): James Austin
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
8 March 1884
Procedural Posture
Scire Facias Judgment Creditor Action Under 27 & 28 Vic. C.23; Appeal to Supreme Court of Canada / Final Appeal — Judgment on Appeal
Outcome
Appeal dismissed — judgment of Court of Appeal for Ontario affirmed
Legal Topics
Shareholder Liability, Increase of Capital (ultra Vires), Mortgage of Shares, Estoppel, Statutory Interpretation
Source Language
English
Commercial Law Company Law Corporate Law Equity Shareholder Liability Increase of Capital (ultra Vires) Mortgage of Shares Estoppel +1 more

Case Brief

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Parties

George S. Page et al.

Appellants (judgment Creditors)

James Austin

Respondent (defendant)

Procedural Posture

Scire Facias Judgment Creditor Action Under 27 & 28 Vic. C.23; Appeal to Supreme Court of Canada / Final Appeal — Judgment on Appeal

Legal Issues

  1. 1 Whether defendant was a legal shareholder liable for unpaid calls on 111 shares
  2. 2 Whether directors had power to increase capital where original capital was not fully paid (validity of by-law)
  3. 3 Whether shares issued under an invalid increase of capital are void and give no liability

Ratio Decidendi

Because the original $130,000 capital had not been paid in, the by-law purporting to increase capital was ultra vires and shares issued under that increase were void; accordingly the defendant could not be treated as a legal shareholder liable for unpaid calls. Separately, a mortgagee who received an absolute transfer may, consistent with the statute and prima facie character of company books, prove the transfer was collateral security and avoid personal liability under s.29.

Court Disposition

Appeal dismissed — judgment of Court of Appeal for Ontario affirmed

Orders

  • Appeal dismissed with costs
  • Judgment of the Court of Appeal for Ontario affirmed