1. In this case Mr. Elmore subscribed the memorandum of association of the Electric Light Company for one share. The rule of law in such a case is that 'a man who signs the memorandum of association agrees to become a shareholder, and so long as there are shares that can be allotted to him he must fulfil that obligation'--per Jessel, M.R.,; Drummond's Case 7 Ch. App. At p. 780.
2. But Mr. Russell argued (a) that the special circumstances took this case out of the general rule, and (b) that the company had no shares available for allotment. As regards the first point, I do not think the transactions between Mr. Elmore and Mr. Premchand Roychand in any way bind or affect the company. The present of a paid-up share by a third party does not satisfy the obligation of a subscriber of the memorandum. The issue of the certificate does not estop the company as long as the certificate has not passed to a bond-fide transferee for value. If Mr. Elmore has not, in fact, paid money or money's worth for the one share subscribed for, the company is still able to prove the non-payment, and claim the Rs. 1,000.
3. As regards the second point, I think the case is governed by Evan's Case L.R. (sic) 427. There though all the shares were, in the first instance, allotted to other persons, the allotment was not confirmed, and it was consequently held that there were, in fact, shares which might have been allotted to Mr. Evans. So hero there were shares proposed to be allotted to Premchand if certain things were done which were not done. Thus the allotment was never final, and there were left at all times shares sufficient to supply the claim of Mr. Elmore. It makes no difference that no share was allotted to him, The liquidator on behalf of creditors is entitled, in law, to hold him now to his contract which he made with the company when he signed the memorandum. He must be placed on the list for one share, and he must pay the costs for this application.