UNPAID SHARE CAPITAL.

Auckland Star, Volume LX, Issue 303, 23 December 1929, Page 10

UNPAID SHARE CAPITAL.

PROOF OF DEBT ACCEPTED.

BANKRUPT HELD LIABLE.

(By Telegraph.—Own Correspondent.)' HAMILTON, this day.

The judgment of Mr. Justice Blair has been given in the case in which Dominion Securities, Limited, of Wellington, a creditor in the 'bankrupt estate, of William Duncan, farmer, of Frankton, moved for the reversal of the decision of the Official Assignee in rejecting an amended proof of debt lodged by the company. The company also asked that the Assignee be ordered to allow the company to prove as an unsecured creditor for the sum of £209, the amount of a judgment debt, and as a secured creditor.for £800, the balance of calls due on 3000 shares, the security allegedly being a lien conferred by the company's articles of association on the shares themselves.

Bankrupt was the registered proprietor of 3000 £1 shares in the capital of the company. He had paid £2000 on January 18, 192!), the company sued for a further instalment of £200 due, and obtained judgment. On April 18, 1929, Duncan was adjudicated 'bankrupt, on the company's petition. The company, in its petition, stated that it had no security for a debt of £200, for which judgment was obtained.

His Honor said he could find nothing which justified the contention that an arrangement between the parties resulted in the call liability on the shares being cancelled. Shares in the company wore, issued either with liability to pay the wiiole of the nominal amount thereof in cash, or as fully paid up or partly paid up for a consideration other than cash. Public companies issuing shares wholly or partly for consideration other than cash must lilo a written contract setting out the consideration which absolved the shares from their ordinary cash liability. In the present case he (the judge) was satisfied that the shares bad not been fully paid shares and were still subject to an unpaid, liability of £1000.

"The position would now be," said his Honor, "that the company will claim as an unsecured creditor for £1009, and 300 shares, for which there is liability of (i/8 per share, will become an asset in bankrupt's estate." The costs of the Assignee, and the company were allowed out of the estate.