Decisions 
as to 
Allotment. 
56 
SECRETARIAL PRACTICE 
an undisclosed principal, the principal may be unable to 
rescind on the ground of misrepresentation contained in the 
prospectus issued to the agent [Collins v. Associated Grey- 
hound Racecourses Limated (1929), C. 45, T.L.R. 519]. Applica- 
tion in a fictitious name, followed by allotment, renders the 
applicant liable, and his real name may be entered on the 
register [Hercules Insurance Co., Pugh & Sharman’s Cases 
(1872), 13 Eq. 566]. Application by a father in the name of 
his infant son renders the father liable [Imperial Mercantile 
Association, Richardson’s Case (1875), 19 Eq. 588]. Applica- 
tion subject to a condition precedent will not give rise to a 
contract unless the condition is performed [Aldborough Hotel 
Co. (1870), 4 Ch. App. 184; where a builder applied on con- 
dition that he should have the building contract]. But if the 
condition is subsequent—in other words, if it can be construed 
as a separate agreement, collateral to the agreement to take 
shares—the applicant will be liable on the shares notwith- 
standing breach of the collateral agreement [Richmond Hill 
Hotel Co., Elkington’s Case (1867), 2 Ch. App. 511]. 
Allotment ‘is generally neither more or less than the 
acceptance by the company of the offer to take shares’ 
[per Chitty, J. Nicol's Case (1885), 29 Ch. D. 421]. 
Below are some of the more important decisions on allot- 
ment: 
An improperly constituted board of directors has no power 
to act for the company, and therefore an allotment by such a 
board will be invalid [re Homer District Gold Mines (1889), 39 
Ch. D. 546]. But an allotment by an irregularly constituted 
board may be subsequently ratified by a regular board 
[Portuguese Copper Mines, Badman's and Bosanquet's Cases 
(1890), 45 Ch. D. 16]. Directors cannot delegate their power 
to allot [Leeds Banking Co., Howard's Case (1866), 1 Ch. 
App. 561], unless by the articles they are authorised to do so 
[Harris's Case (1871), 7 Ch. App. 587]. The power of directors 
to allot is a fiduciary power, which must be exercised bond 
fide for the benefit of the company as a whole, and not for 
their own ends, e.g. to maintain their control, or to defeat 
the wishes of the majority of the shareholders [Piercy v. 
S. Mills & Co. (1920), 1 Ch. 77; see also Gas Meter Co. v. 
Diaphragm, etc., Co. (1925), 41 T.L.R. 342]. 
Allotment must be made within a reasonable time after 
application; otherwise the allottee may refuse to accept the 
shares [Ramsgate Hotel v. Montefiore (1865), 4 H. & C. 164]. 
It must be communicated, though the communication need 
not necessarily be in writing [Gunn's Case (1867), 3 Ch. 
App. 40; Lewta’s Case (1867), 3 Ch. App. 30]. Generally