of, or in the property proposed to be acquired by,
the company, or, where the interest of such a di-
rector consists in being a partner in a firm, the na-`
ture and extent of the interest of the firm, with a
statement of all sums paid or agreed to be paid to
him or to the firm in cash or shares or otherwise by
any person either to induce him to become, or to
qualify him as, a director, or, otherwise for services
rendered by him or by the firm in connexion with
the promotion or formation of the company; and
(n) where the company is a company having shares of
more than one class, the right of voting at meetings

of the company conferred by the several classes of
shares respectively.

(2) For the purposes of this section every person shall be deemed to be a vendor who has entered into any contract, absolute or conditional, for the sale or purchase, or for any option of purchase, of any property to be acquired by the company, in any case where

(a) the purchase money is not fully paid at the date of
issue of the prospectus; or

(b) the purchase money is to be paid or satisfied wholly
or in part out of the proceeds of the issue offered
for subscription by the prospectus; or

2 Ch. Div. 571, 76 L. J. Ch. N. S.
692); Macleay v. Tait, 1906, App.
Cas. 24, 75 L. J. Ch. N. S. 90, and
cases cited; Nash V. Calthorpe,
1905, 2 Ch. Div. 237; Broome v.
Speak, 1903, 1 Ch. Div. 586, af-
firmed, sub nom. Shepheard
Broome, 1904, App. Cas. 342; Cack-
ett v. Keswick, 1902, 2 Ch. Div.
456, 463-464; Baty v. Keswick, 85
L. T. N. S. 18; Sullivan v. Mitcalfe,

V.

L. R. 5 C. P. D. 455, 460; Calthorpe v. Trechmann, 1906, App. Cas. 24, 75 L. J. Ch. N. S. 90, 94 L. T. N. S. 68, 22 Times Law Rep. 149; Stevens v. Hoare, 20 Times Law Rep. 407; Marshall v. Morrison, 1907, Weekly Notes 29.

The omission to specify a contract is, of course, immaterial if the plaintiff had in fact notice thereof. Stevens v. Hoare, 20 Times Law Rep. 407.

(c) the contract depends for its validity or fulfilment on

the result of that issue.

(3) Where any of the property to be acquired by the company is to be taken on lease, this section shall apply as if the expression "vendor" included the lessor, and the expression "purchase "included the consideration for the lease, and the expression "sub-purchaser " included a sub-lessee.

money

(4) Any condition requiring or binding any applicant for shares or debentures to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document, or matter not specifically referred to in the prospectus, shall be void.

(5) Where any such prospectus as is mentioned in this section is published as a newspaper advertisement, it shall not be necessary in the advertisement to specify the contents of the memorandum or the signatories thereto, and the number of shares subscribed for by them.

(6) In the event of non-compliance with any of the requirements of this section, a director or other person responsible for the prospectus shall not incur any liability by reason of the noncompliance, if he proves that

(a) as regards any matter not disclosed, he was not cog-
nisant thereof; or

It was held both under the act of 1867 and under the act of 1900 that if the name of the vendor of property purchased by the company and the amount of the consideration paid to him was disclosed by the prospectus, it was not necessary to state how, when, or at what price such vendor acquired the property. Sullivan v. Mitcalfe, L. R. 5 C. P. D. 455, 466-467; Brookes v. Hansen, 1906, 2 Ch. Div. 129.

It seems to have been held under

the act of 1867 that if the promoter sold to the company, property which he acquired before he became its promoter, it was not necessary to disclose the contract under which the promoter acquired the property. Gover's Case, L. R. 1 Ch. Div. 182, affirming, L. R. 20 Eq. 114; Craig v. Phillips, L. R. 3 Ch. Div. 722.

See the notes on this statute in Lord Halsbury's "The Laws of England," Vol. V, p. 123, et seq.

(b) the non-compliance arose from an honest mistake of

fact on his part:

Provided that in the event of non-compliance with the requirements contained in paragraph (m) of subsection (1) of this section no director or other person shall incur any liability in respect of the non-compliance unless it be proved that he had knowledge of the matters not disclosed.

(7) This section shall not apply to a circular or notice inviting existing members or debenture holders of a company to subscribe either for shares or for debentures of the company, whether with or without the right to renounce in favour of other persons, but subject as aforesaid, this section shall apply to any prospectus whether issued on or with reference to the formation of a company or subsequently.

(8) The requirements of this section as to the memorandum and the qualification, remuneration, and interest of directors, the names, descriptions, and addresses of directors or proposed directors, and the amount or estimated amount of preliminary expenses, shall not apply in the case of a prospectus issued more than one year after the date at which the company is entitled to commence business.

(9) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this Act apart from this section.

"82.—(1) A company which does not issue a prospectus on or with reference to its formation, shall not allot any of its shares or debentures unless before the first allotment of either shares or debentures there has been filed with the registrar of companies a statement in lieu of prospectus signed by every person who is named therein as a director or a proposed director of the company or by his agent authorised in writing, in the form and containing the particulars set out in the Second Schedule to this Act.75a

75a. For a case involving the construction of this section of the

statute, see In re Blair Open Hearth Furnace Co., Ltd., L. R. 1914, 1 Ch.

1

(2) This section shall not apply to a private company or to a company which has allotted any shares or debentures before the first day of July nineteen hundred and eight."

§ 212. Materiality of representations.

A misrepresentation or concealment must, to be actionable, relate to some material fact.76 The materiality of a matter misrepresented or concealed is to be determined by the court or jury as the case may be, and the circumstance that the defendant did not consider the matter of any importance will not relieve him from responsibility.77

Any facts substantially affecting the financial condition of the company, properties owned or to be acquired by it, contracts made or to be made by it, and any other facts affecting the desirability of the shares are material facts which may become the subject of an actionable misrepresentation.78

Div. 390; 83 L. J. Ch. N. S. 313; 109 L. T. N. S. 839; 21 Manson 49.

76. Smith v. Chadwick, L. R. 20 Ch. Div. 27, 45-46, 76-77, 46 L. T. N. S. 702, affirmed, L. R. 9 App. Cas. 187, 5 Am. & Eng. Corp. Cas. 23; see Directors of Central Ry. of Venezuela v. Kisch, L. R. 2 H. L. 99, 114, et seq., 16 L. T. N. S. 500.

See note to Cottrill v. Krum, 18 Am. St. Rep. 549, 559.

77. Peek v. Gurney, L. R. 13 Eq. 79, 111, et seq., affirmed, L. R. 6 H. L. 377.

The materiality of a misrepresentation is held to be a question of law in Caswell v. Hunton, 87 Me. 277, 32 Atl. 899.

78. Illustrative cases are: Connecticut.-Shelton V. Healy, 74 Conn. 265, 50 Atl. 742.

Indiana.-Grover v. Cavanaugh,

40 Ind. App. 340, 82 N. E. 104.

Iowa.-Coles v. Kennedy, 81 Iowa 360, 46 N. W. 1088, 25 Am. St. Rep. 503.

Maryland.-DuPuy v. Transportation & Terminal Co., 82 Md. 408, 33 Atl. 889, 34 Atl. 910.

Massachusetts.-Bradley v. Poole, 98 Mass. 169, 93 Am. Dec. 144; Walker v. Russell, 186 Mass. 69, 71 N. E. 86, 1 Am. & Eng. Ann. Cas. 688.

Mississippi.-Walker v. Mobile & Ohio R. R. Co., 34 Miss. 245; Selma M. & M. R. R. Co. v. Anderson, 51 Miss. 829.

Missouri.-Hess V. Draffen, 99 Mo. App. 580, 74 S. W. 440.

New Jersey.-Vreeland V. New Jersey Stone Co., 29 N. J. Eq. 188, and cases cited, affirmed, 29 N. J. Eq. 651.

§ 213. Materiality of concealment of mortgage.

The court in Petrie v. Guelph Lumber Co.79 seems to have held that the concealment of the fact that the property of the corporation is subject to a mortgage is immaterial if the existence of the debt secured by the mortgage is made known. The court reasons