
    Merritt vs. Brown.
    When a shareholder sells shares, for which he has not paid the company, to a vendee, who assumes his liability to the company, and pays him $2500 in cash, this sum is the clear profits on the transaction.
    On exceptions to master’s report.
    
      Mr. Gilchrist, Attorney-General, for exceptant.
    
      Mr. Williamson, for complainant, contra.
   The Chancellor.

The order of the Court of Appeals directed Brown to account to Merritt for the proceeds of twenty-five shares of stock transferred to him. After the transfer, the company issued to Brown sixteen new shares of additional stock, for which Brown never paid, but -became responsible to the company for the amount, being $1600. He afterwards sold the forty-one shares to A. Baiz, the president of the company, for $2500; Baiz, in addition to the $2500, becoming responsible to the company for the price of the sixteen shares. Under this state of facts, the master has rightly concluded that Brown received the $2500 for the twenty-five shares transferred to him by Merritt, and that the assumption of the price of the sixteen shares by Baiz was the price of those shares.

The exceptions must be overruled.  