IN RE COMMON PETROLEUM ENGINE Co. the same, three shares of 17. each of the new company, credited with the sum of 198. as paid up on each of the shares so to be allotted and issued in respect of every two shares of 5l. each held by him in Spiel's Company, and such shares of the new company so to be allotted and issued as last aforesaid shall be numbered in the books of the new company and in the share certificates for the same 2,558 to 20,000 inclusive. Every such shareholder in Spiel's Company shall apply for such shares in the new company within the time limited by notice to be given to him of his right to apply for and accept the same, and shall undertake in writing to pay up the 1s. per share remaining unpaid on such shares either prior to or at the time of the allotment and issue of such shares to him, or by such instalments and at such times as may be fixed for the payment of the same. If any such shareholder who may so apply for shares as aforesaid shall hold an odd number of shares in Spiel's Company he shall only have the right to apply for and have allotted and issued to him in respect of such odd share one share of the new company of 17. so credited as aforesaid. All of the said shares of the new company not applied for by shareholders in Spiel's Company within the time so limited as aforesaid may be sold when and to such persons and on such terms, or may be otherwise dealt with by the new company, as the new company may think fit." By clause 3 "the purchase of the said premises shall be completed on the 15th day of March, 1892, when the said purchaseprice shall be paid and satisfied in manner aforesaid, and thereupon Spiel's Company and all other necessary parties" were to execute the necessary conveyances. By clause 4 this contract, or some other proper and sufficient contract, was to be filed with the Registrar of Joint-Stock Companies before the issue of any of the above shares under the contract. 5. In consideration of the purchase-price Spiel's Company were to pay all costs of bringing out the new company. This contract was executed by two directors of Spiel's Company, who affixed the seal of their company to it, and by Mr. Elsner. By an indenture of the 19th of March, 1892, in

dorsed on the contract and made between Spiel's Company of the first part, Mr. Elsner of the second part, and the new company of the third part, it was witnessed that in pursuance of the contract and to give effect thereto the new company did ratify and adopt the contract, and declared the same to be binding on the new company as if it had been incorporated before the date of the contract and had entered into the contract instead of Mr. Elsner. This indenture was executed by the parties. The indenture and indorsement were registered prior to the issue of the shares of the new company. No other contract was registered in respect of the shares in question. By an indenture of the 30th of March, 1892, after reciting an agreement that the 2,5507. should be paid, 350l. in cash and 2,2007. in shares, Spiel's Company assigned to the new company the property in question in consideration of 2,550l. paid as aforesaid.

Messrs. Elsner and M'Arthur applied in their own names for 250 and fifty of the shares in the new company with 198. per share credited as paid, and the same were duly allotted to them on the 23rd of March, 1892. Neither the application nor the allotment referred to any registered agreement. Mr. M'Arthur's application was made on one of the forms which had been sent only to shareholders in Spiel's Company. Mr. Elsner's was on a form referring to "extra shares ”—that is, shares which had not been taken up by shareholders in Spiel's Company. This form also was only sent to shareholders. Neither Mr. Elsner nor Mr. M'Arthur were shareholders in Spiel's Company, but both applied for shares as nominees of persons who were shareholders and entitled to exercise the option given by clause 2 of the contract. Both were placed on the register of shareholders as holders of fully paid shares, though as a matter of fact they only paid 18. per share. Both received certificates for fully paid-up shares.

On the 14th of November, 1894, the new company was ordered to be wound up by the Court. Messrs. Elsner and M'Arthur were subsequently placed by the liquidator on the list of contributories for 198. per share. Mr. Sugden was in a

IN RE COMMON PETROLEUM ENGINE Co. ROMER, J. (on August 5).-The first question that arises on this summons, so far as concerns the respondents Elsner and M'Arthur, is one of fact. Were the shares the subject of this application allotted to them as nominees of shareholders in Spiel's Company in pursuance of the option given to those shareholders by the second clause of the agreement of the 15th of February, 1892, confirmed by the deed of the 19th of March, 1892? I am satisfied, on the evidence, that the shares were so allotted, and that they were not issued, as suggested on behalf of the liquidator of this company (the Common Petroleum Engine Company, Limited), under the provisions at the end of clause 2 of the agreement, as shares not applied for by the shareholders in Spiel's Company. The circumstance relied on by the liquidator, that Elsner's application was on a form labelled "extra shares," admits of easy explanation. The facts are that Spiel's Company (wholly without the authority of this company) issued to their shareholders two forms of application for shares-one as for shares to which they were directly entitled under the agreement, and the other as for extra shares not taken up by some of the shareholders; and the applicants seem not to have noticed any distinction between the two forms, but to have used them indiscriminately. As a matter of fact, this company, at the time the shares in question were allotted, had not authorised the issue of any shares, and did not in fact allot any shares except to shareholders of Spiel's Company or their nominees in respect of the shares to which they were entitled under the agreement. And I should add that this company never limited a time within which the shares should be applied for, though Spiel's Company did make an abortive and ineffectual attempt to limit a time.

The next question that arises is one of law, whether the agreement and indorsed deed which have been duly registered comply with the provisions of section 25 of the Act of 1867. In my opinion they do, having regard to the cases I am about to refer to. In the first place, the agreement as confirmed by the indorsed deed is in itself a contract in writing made

before the issue of the shares, and not a mere offer by this company to allot shares, like the memorandum which formed the subject of the decision in In re The New Eberhardt Company; ex parte Menzies (3). By the agreement this company were bound to allot to each shareholder of Spiel's Company his proportion of shares if he applied for them; and the fact that each shareholder had an option and was not bound to apply did not the less render the agreement a contract, and one binding on this company. This company had no option in the matter; and, moreover, notwithstanding the curious wording of the agreement, and the form of the assignment made in pursuance of it dated the 30th of March, 1892, I think the option given formed part of the consideration for the sale of the property the subject of the agreement. I cannot hold here that the consideration paid for the shares issued was illusory, or that the agreement was a mere fraud or excuse to enable these shares to be issued at a discount or as nearly fully paid-up-see In re The Theatrical Trust, Limited (4). It was suggested by the liquidator that Spiel's Company had no right to distribute a valuable option, which was in the nature of capital, amongst its shareholders. That may be so; but that is a matter which concerns Spiel's Company and its shareholders and creditors, and which cannot now be relied on by the liquidator for the purpose of this application. There being then a contract in writing filed with the Registrar of Joint-Stock Companies before the issue of these shares, the next question is whether it is a sufficient contract within the meaning of section 25. Now, if the question were one arising for the first time, I think a great deal might be said in favour of the contention that a contract within the meaning of the section ought to be one-first, made direct with the allottee; and, secondly, shewing on the face of it which are the shares to be allotted or issued to him. But the cases shew that this is not necessary, and that the section (which is in the nature of a penal clause) must not be treated as by implication making essential details with regard to the contract in reference to the above points not

IN RE COMMON PETROLEUM ENGINE Co. mentioned in the section. For example, as to the first point, it has been held that if the contract be to allot shares to A, the shares may be allotted to B as A's nominee, and the contract will then protect B- -see Carling's Case (5) and the observations of Lord Justice James. And, apparently, even the company need not be directly a party to the contract. It is sufficient if the contract be with a trustee for the company and adopted by the company-see In re The Poole Firebrick and Blue Clay Company; Hartley's Case (7), where Lord Justice Cairns observes, "It is hardly necessary to advert to the argument that the shares ought not to be taken as paid-up shares, because the agreement for the sale of the land was not with the company, but with a trustee and before the company was formed. The Act of Parliament does not require the agreement to be with the company, and such agreements are very seldom made with the company directly." And with regard to the second point, it has been held that the contract need not on the face of it identify the shares-see In re The Delta Syndicate (Limited); ex parte Forde (8) and Hartley's Case (7); and see also on both points In re The Dominion of Canada Plumbago Company; Kirby's Case (6), decided by Mr. Justice Fry, and In re The Buenos Ayres and Campana Railway Company (9). In both these last-mentioned cases the registered contract did not specify the shares or the names of the allottees, and yet the allottees were held protected by the registered contract. In the lastnamed case the late Master of the Rolls (Sir G. Jessel) pointed out that section 25 did not render necessary the specification of the shares or of the name of the allottee, and he said that if the contract did not give such particulars the sole effect was to make it more difficult for the holders of shares not paid for in cash to discharge the burden of proving that their shares had in fact been issued to them in pursuance of the registered contract. And with reference to these

(7) 44 Law J. Rep. Chanc. 240; Law Rep. 10 Ch. 157.

(8) 54 Law J. Rep. Chanc. 724; Law Rep. 30 Ch. D. 153.

(9) Weekly Notes (1875), p. 59.

observations of the late Master of the Rolls I need not again point out that in the present case the respondents have discharged the burden cast upon them, and satisfied me that their shares were issued in pursuance of the registered agreement. Having regard to the above authorities, I do not see on what principle the registered agreement is to be held not sufficient. And, indeed, with reference to an agreement which cannot, I think, on principle be distinguished from that now before me, Lord Justice Cotton in In re The New Eberhardt Company (3) observed: "If the company had registered, not this document, but the agreement between the new company and the liquidator, my present opinion is that that would have been a contract registered to issue these shares as fully paid-up shares"; and I gather that Lord Justice Bowen and Lord Justice Fry do not differ in that case from the opinion of Lord Justice Cotton. Under these circumstances the application must be dismissed, as against these respondents, with costs.

The respondent who has not appeared has not ventured to state that his shares were issued to him in pursuance of that registered contract as nominee of one of the shareholders. Then, that being so, the whole burden being upon him to discharge that onus, which is not discharged, I feel that all I can say is that as against him the liquidator is entitled to his order. There will be a declaration that the 500 shares issued to the respondent John Sugden were so issued to and are held by him subject to the payment to the company of the sum of 19s. in respect of each share, being the amount credited as paid up on the said shares beyond the amount actually paid to the company in respect thereof. I think it is a proper case for the liquidator to bring before the Court, and he may take his costs out of the assets.

Solicitors-J. B. Roberts; Eagleton & Sons;

Foss & Ledsam. [Reported by H. C. Roper, Esq., Barrister-at-Law.

The plaintiffs, who were leaseholders for a term of eighty-two years from Midsummer, 1856, of Weavers' Hall, in the City of London, claimed an injunction restraining the defendants from erecting or permitting to remain on the site of certain buildings which had been pulled down on the west side of Basinghall Street opposite to the plaintiffs' premises any building of a greater height than the height of the premises before they were pulled down, and from building so as to injure the lights of the plaintiffs' premises, as the same were enjoyed by the plaintiffs previously to the commencement of the defendants' building opera

tions.

The plaintiffs' windows were ancient. On the greater portion of the defendants' building site there formerly stood certain buildings numbered 72, 73, 74, and 75. No. 75 was pulled down before the end of June, 1875, or rather more than twenty years before the present action was brought. Nos. 72, 73, and 74 were pulled down in October or November, 1875, so that the plaintiffs had not for the full term of twenty years immediately before action brought (on the 16th of July, 1895) enjoyed the wholly uninterrupted access of light over the site on which these three last mentioned houses had stood, there having in fact been old buildings thereon as late as November, 1875.

The plaintiffs now moved for an injunction.

VOL. 65.-CHANC.

Swinfen Eady, Q.C., and J. G. Wood, for the plaintiffs.-As regards so much of the defendants' building as stands on the site of No. 75 and obscures our lights the case is clear, as the plaintiffs have enjoyed the light over this site since June, 1875. Then as to the sites formerly occupied by Nos. 72, 73, and 74, sections 3 and 4 of the Prescription Act shew that the plaintiffs' right to the light claimed has been acquired, although they have not actually enjoyed it for twenty years-Flight v. Thomas (1). The light has been in fact enjoyed for more than nineteen and a-half years, and no interruption whatsoever has existed for one year before action brought.

[NORTH, J., referred to The Governors of Bridewell Hospital v. Ward, Lock, Bowden & Co. (2), where Kekewich, J., refused to grant an injunction to protect an inchoate right to light before the lapse of the full term of twenty years.]

It may be that a prescriptive right could not be successfully claimed in respect of windows which have existed only nineteen and a-half years, but in the present case the plaintiffs' windows have existed more than twenty years. The time from July, 1875, until October or November, 1875, may be taken as an interruption which, according to the Act, is not to be deemed an ruption for this purpose, and thus the plaintiffs' right was established when the action was brought. The Act does not say when the interruption is to take place.

inter

S. Hall, Q.C., and John Henderson, for the defendants. As regards the site occupied by Nos. 72, 73, and 74, we rely on the decision of Kekewich, J. As to the time which elapsed between the 16th of July, 1875 (the date this action was brought), and October or November, 1875, when the old buildings were pulled down, that cannot be taken as an interruption, as the plaintiffs' right did not begin to run until the latter date. The twenty years must run from the commencement of the right to enjoy to the commencement of the action. See the judgment of Lopes, (1) 8 Cl. & F. 231; 10 Law J. Rep. Exch. 529. (2) 62 Law J. Rep. Chanc. 270; Weekly Notes (1892), p. 194. G