STEPHEN V. BUILDCO (NIGERIA) LTD

• Pages: 130-132

130

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NIGERIAN SUPREME COURT CASES

[1968] N.S.C.C.

STEPHEN V. BUILDCO (NIGERIA) LTD.

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N. STEPHEN

V

BUILDCO (NIG) LTD.

APPELLANT

RESPONDENT

SUIT NO. SC 207/67

10

SUPREME COURT OF NIGERIA

BRETT,

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J.S.C.

LEWIS,

MADARIKAN,

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17th May, 1968.

Company Law - Payment for allotment of shares - Agreement between company

and plaintiff implied for payment of allotment or if not within reasonable

time - Three and a half years not reasonable delay.

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ISSUE:

1. Within what period of time must an allotee of shares pay for them.

FACTS:

Stephen was amongst those appointed as first directors of Buildco (Nigeria)

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Limited. At the company's first board meeting on the 31st of May, 1961, he was

alloted 49% of the company's shares. When called on to pay for his shares he

asked for time to find the money, but he never did pay and at a board meeting

held on the 27th of November, 1964, his shares were declared forfeited and it was

noted that his office as director had been vacated on other grounds. Thereupon

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Stephen instituted Suit No. JD 23/1965 against the company, claiming the restora-

tion of his shares, a declaration that he was still a director and damages. Four

months later the company instituted suit No. JD49/1965 against Stephen, claiming

two sums of 215,018.19s.0d. and £690. 2s.9d. The suits were consolidated and

the trial judge dismissed Stephen's claims and gave the company judgment on the

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first sum. Stephen appealed, asking for a reversal of the order dismissing his claim.

HELD:

1. The liability of persons to whom shares were allotted by the company after its

formation, which is the position between M.H Said and Stephen, in this case,

is governed by the agreements between them and the company. If at the Board

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Meeting of the 31st May, 1961, the Secretary had suggested that an express

decision should be recorded that the shares were to be paid for at once in cash

Said and Stephen would both have said that that was taken for granted.

Alternatively, the Supreme Court would be prepared to regard it as an implied

condition that the shares were to be paid for within a reasonable time and

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three-and-a-half years exceeded what was reasonable.

CASE REFERRED TO IN JUDGMENT:

1.

Alexander v. Automatic Telephone Co.

[19501 2 Ch. 56.

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lmpey,

for the Appellant.

Brown-Peterside,

for the Respondent.