Subscriber liability: share subscriptions confer contributory liability unless a directors' acceptance of surrender is proven, so inclusion upheld.

Subscribers to the memorandum become first members on incorporation and their subscriptions create contributory liability; accordingly, where no documented directors' resolution or other admissible evidence shows acceptance of any share surrender, the alleged surrenders did not extinguish that liability and the individuals remained members for the statutory period, so Section 156-based relief was unavailable. Oral testimony contradicting earlier statements and lacking contemporaneous records was rejected for want of proof, and asserted non-service of notice was unsupported. Resultantly, inclusion in the contributories' list was correct and liability stood.

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Issues: Whether the appellants, as signatories to the memorandum of association and subscribers to shares, were rightly included in the list of contributories in the liquidation of the company.

Analysis: The Court applied the legal principle that subscribers to the memorandum of association become the first members from the date of incorporation and irrevocably agree to take the number of shares subscribed unless the company's share capital has been otherwise allotted; such subscription creates contributory liability. The appellants did not controvert this principle but asserted factual defences: (a) that they had surrendered their shares and the surrender had been accepted by the directors under the articles empowering directors to accept surrenders; and (b) that Section 156 of the Companies Act or the appellants' cessation as directors absolved them of liability. The record contains a letter from the appellants requesting a directors' meeting and a reply that the matter would be placed before the directors, but there is no documentary evidence of any directors' meeting or resolution accepting any surrender. A witness's later oral statement that directors had released the appellants from liability conflicted with earlier statements to the liquidator and lacked supporting documentation; the Court rejected that testimony as unreliable. There is no evidential basis that the directors accepted any surrender of shares. The appellants never ceased to be members for the statutory period required to rely on Section 156, and no record supports treatment of the appellants as past members. The appellant alleged non-service of notice for one person but failed to show any record of lack of service; the Court found no substance to that contention.

Conclusion: The appellants are liable as contributories and their inclusion in the list of contributories was correct; the appeal is dismissed against the appellants.

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