Membership by subscription continues despite non-payment; heirs may be contributories, and interest on unpaid shares denied.

Subscription to a company's memorandum creates membership that does not cease simply by failure to pay; membership ends only by valid surrender accepted under the articles, valid transfer, or payment. Absent evidence of a company-accepted surrender or valid repudiation by the subscriber, heirs succeed to the subscriber's position and may be placed on the list of contributories. On interest, where there was only initial correspondence and no subsequent lawful demand, refusal or neglect to comply was not established, and interest on the unpaid subscription was not awarded.

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Issues: (i) Whether the heirs of a deceased subscriber to the memorandum who failed to pay for subscribed shares should be placed on the list of contributories; (ii) Whether interest should be ordered on the outstanding amount.

Analysis: The Court examined the effect of subscription to the memorandum of association and the legal consequences of non-payment for shares. The facts show the subscriber signed the memorandum and subscribed for 50 shares, failed to respond to repeated demands for payment, and was subsequently struck off the register of directors and believed (wrongly in law) to have ceased to be a member. The Court applied the legal framework that a subscriber to the memorandum remains a member of the company unless the company, authorised by its articles, accepts a surrender of the shares for valid reasons, or the subscriber pays for and validly transfers the shares. The Court found no evidence of a valid surrender or acceptance by the company and no valid repudiation by the subscriber; the only facts were failure to pay and mistaken belief by the parties that membership had ceased. On the question of interest, the Court considered that there had been no subsequent demand after the initial letters and no refusal or neglect to comply with a lawful demand; having regard to these circumstances, the Court concluded that interest was not appropriate.

Conclusion: (i) Heirs of the deceased subscriber are to be included in the list of contributories (decision in favour of the petitioner). (ii) Interest on the outstanding amount is not ordered (decision against the petitioner's claim for interest).

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