13 C. B. 826. See supra, p. 112; and see, as to section 70 of the Act, infra, Form 117. p. 120. Unless such a clause is inserted, the instalments do not constitute a statutory debt. Care should also be taken that the forfeiture clauses extend to unpaid instalments. See clause 21, infra.

9. The joint holders of a share shall be severally as well as jointly Liability of liable for the paymt of all instalmts and calls due in respect of such joint holders

share.

This clause is not uncommon. It appears to be very reasonable, and affords an additional security to the company. It extends only to instalments payable and calls made during the joint lives.

of share.

10. The co shall be entled to treat the registered holder of any share Trusts not as the absolute owner thereof, and accordingly shall not be bound recognised. to recognise any equitable or other claim to or interest in such share on

the pt of any other person save as herein provided.

The above clause is sometimes inserted and may be useful. It goes further than section 30 of the Act, "No notice of any trust, expressed, implied, or constructive, shall be entered on the register, or be receivable by the registrar in the case of companies under this Act, and registered in England or Ireland." It would seem to enable the company to treat the registered holder of a share as the absolute owner thereof notwithstanding any notice of equities. But the clause cannot prevent a person equitably interested in shares, from procuring the intervention of the Court to protect his rights. Binney v. Ince Hall Coal Co.,35 L. J. Ch. 363; Taylor v. Midland Ry. Co., 8 W. R. 401. Nor can the clause prevent an equitable mortgagee from taking the shares out of the reputed ownership of the mortgagor, by giving notice to the company. Ex parte Stewart,

13 W. R. 356; 11 Jur. N. S. 25; In re Jackson, 12 Eq. 354. And so, too, as between competing equitable assignees of shares, he who first gives notice to the company will, cæteris paribus, be preferred, notwithstanding the above clause.

As to what a company ought to do where it receives notice not to register a transfer, see Tahiti Cotton Co., 17 Eq. 280; Ex parte Rolt, W. N. 1876, 91.

The company need not register a person as a member under a transfer of shares of which they have any doubt, but can leave the transferee to come to the Court and make out his title. Per Mellor, J., Bahia & San Francisco Ry., L. R. 3 Q. B. 597.

Under section 30 of the Act, a trustee who is the registered holder of shares is personally liable. Chapman v. Barber's case, 3 Eq. 361; Hemming v. Maddick, 7 Ch. 395. And the same rule applies to Scotch companies even where the trustees are registered "as trustees." Muir v. City of Glasgow Bank, 4 App. Cas. 337. But a trustee is entitled to be indemnified by his cestui que trust. Hemming v. Maddick, ubi supra; Buckley, 81.

CERTIFICATES.

11. The certificates of title to shares shall be issued under the seal of Certificates. the co, and signed by two directors, and countersigned by the secretary

or some other person appointed by the directors.

As to the serious responsibility incurred by a company in issuing certificates, see infra, "Certificates," where also will be found forms of certificates.

12. Every member shall be entled to one certificate for the shares Members'

right to.

As to issue of

Form 117. registered in his name, or to several certificates, each for a pt of such shares. Every certificate of shares shall specify the number of the share in respect of which it is issued and the amount pd up thereon. 13. If any certificate be worn out or defaced, then, upon production new certificate thereof to the directors, they may order the same to be cancelled, and may issue a new certificate in lieu thereof; and if any certificate be lost or destroyed, then, upon proof thereof to the satisfon of the directors, and on such indemnity as the directors deem adequate being given, a new certificate in lieu thereof shall be given to the party entled to such lost or destroyed certificate.

in place of one defaced,

lost, or destroyed.

Fee.

To which of joint-holders certificate to be issued.

Calls.

The company incurs a serious responsibility by issuing a new certificate, unless the old one is cancelled; and it ought not to be done except on very satisfactory proof of loss or destruction, or on a satisfactory indemnity being given. See further, infra, "Certificates."

14. The sum of [one shilling], or such smaller sum as the directors may determine, shall be pd to the co for every certificate issued.

Whether the above clause should be used or the following one is a matter for consideration. Both are common, but there seems no particular reason why the original members should get certificates gratis. It is, however, usually so provided where the company is formed to effect a reconstruction or an amalgamation; and promoters sometimes require the insertion of a clause as to issue of certificates gratis.

The following is another form :—

Every person to whom shares (in the original capital) shall be allotted shall be entitled, gratis, to one certificate in respect of each share allotted to him; but for every other certificate there shall be paid to the company such sum, not exceeding one shilling, as the directors may from time to time determine.

15. The certificates of shares registered in the names of two or more persons shall be delivered to the person first named on the register.

CALLS.

16. The directors may, from time to time, make such calls as they think fit upon the members in respect of all monies unpd on the shares held by them respively, and not by the conditions of allotmt thereof made payable at fixed times, and each member shall pay the amount of every call so made on him to the persons and at the times and places appointed by the directors. A call may be made payable by instalmts.

Every call or instalment under the above clause becomes a debt, for which the company can sue. See supra, note to Clause 8.

As to an action against a member for calls or other moneys, see infra, note to Clause 19a.

It is, perhaps, needless to say that a call made by persons not duly appointed directors is void. Howbeach Coal Co. v. Teague, 5 H. & N. 151; 29 L. J. Ex. 137; 8 W. R. 264. So, too, it will be a valid defence, in an action for calls, that the directors who purported to make the call were not duly qualified. The Ironship, &c., Co. v. Blunt, 3 C. P. 484. See also Sharp v. Dawes, 2 Q. B. Div. 26. But s. 67 of the Act and a clause like 112, infra, may make an act of directors done before discovery of undue appointment or disqualification valid.

A minute of the resolution making a call ought to be made, for there is some Form 117. question whether the call can otherwise be proved. Cornwall Mining Co. v. Bennett, 5 H. & N. 423 ; 29 L. J. Ex. 157. But the resolution need not specify when, where, and to whom the call shall be paid. These particulars may be fixed by subsequent resolution. Johnson v. Lyttle's Iron Agency, 5 C. Div. 687. See further, as to calls, Buckley, 401, et seq. It would seem that even without express authority a call may certainly be made payable by instalments. Ambergate Ry. Co. v. Norcliffe, 6 Ex. 629; Lawrence v. Wynn, 5 M. & W. 355.

17. A call shall be deemed to have been made at the time when the When call resolution of the directors authorising such call was passed.

This clause, which appears in Table A., is inserted in order to get rid of any doubt as to whether the call is "made," when the resolution is passed, or when notice of it is given to the members. Shaw v. Rowley, 16 M. & W. 810. See Clauses 31 & 33, infra, in connection with which the question is sometimes material.

deemed to have been made.

make calls.

[17a. Unless the co in general meeting shall otherwise determine, no Restrictions call, in respect of the shares in the original capital, shall exceed 7. on power to per share, or be made payable within months after the last preceding call was payable.]

The above clause is sometimes used, but it is generally considered better to leave the directors free to exercise their discretion. The prospectus not uncommonly states that it is not intended to make calls beyond a certain amount, but such a statement of intention is not binding on the company; and it was held in one case that an action would lie, though the shares were applied for on the faith of a prospectus which stated that "No further calls are contemplated." Accidental Insurance Co. v. Davis, 15 L. T. 182. Primâ facie a payment to be made on the allotment of a share is not a call. Croskey v. Bank of Wales, 4 Giff. 314.

18. Fourteen days' notice of any call shall be given specifying the Notice of call. time and place of paymt, and to whom such call shall be pd.

It is always expedient to allow a reasonable time for payment of a call. If money is urgently required, the directors should raise it temporarily on debentures or mortgage, or otherwise, so as to allow sufficient time for the members to pay up. Where so many "clear days' notice" is to be given, the day of giving the notice and the day on which the call is to be paid should not be counted. Watson v. Eales, 23 Beav. 294. If a call is made payable by instalments, the notice ought, it would seem, to be given the prescribed number of days before the time fixed for the payment of the first instalment. Notice must be given in accordance with the regulations of the company. Watson v. Eales, ubi supra. And see Cl. 150, infra.

on call, or

19. If the sum payable in respect of any call, or instalmt, be not pd When interest on or before the day appointed for paymt thereof, the holder for the instalment, time being of the share in respect of which the call shall have been payable. made, or the instalmt shall be due, shall pay interest for the same, at the rate of 107. p. c. p. a., from the day appointed for the paymt thereof to the time of the actual paymt.

What the rate of interest should be is a matter for consideration. Sometimes 25 per cent. is specified. See Stocken's case, 3 Ch. 412.

It appears that such a clause does not apply to calls made by the liquidators of a company. In re Welsh Flannel and Tweed Co., 20 Eq. 367.

Form 117.

Evidence in action for call.

Payment of calls in advance.

The duty of the directors, when a call is made, is to compel every shareholder to pay to the company the amount due from him in respect of that call; and they are guilty of a breach of their duty if they do not take all reasonable means for enforcing that payment. Spackman v. Evans, L. R. 3 H. L. 186.

[19a. On the trial or hearing of any action for the recovery of any money due for any call it shall be sufficient to prove that the name of the member sued is entered in the register of members of the co as the holder, or one of the holders, of the shares in respect of which such debt accrued; that the resolution making the call is duly recorded in the minute book; and that notice of such call was duly given to the member sued, in psuance of these presents; and it shall not be necessary to prove the appointmt of the directors who made such call, nor any other matters whatsoever, but the proof of the matters afsd shall be conclusive evidence of the debt.]

This clause is sometimes inserted; it is not contained in Table A. The provisions of the Act are generally deemed sufficient. They are as follows: Section 70 provides that, "In any action or suit brought by the company against any member to recover any call or other moneys due from such member in his character of member, it shall not be necessary to set forth the special matter; but it shall be sufficient to allege that the defendant is a member of the company, and is indebted to the company in respect of a call made or other moneys due, whereby an action or suit hath accrued to the company." Under Section 37, the production of the register is sufficient prima facie evidence of membership; and a minute of the resolution making the call, signed as required by Section 67 of the Act, is sufficient prima facie evidence of the call having been duly made, and the meeting duly held, and of the due appointment of the directors.

Notwithstanding the terms of the above clause, there is no doubt that the defendant would be entitled to show that he was not a member. It would, however, seem that as against a member the clause would render the duly recorded resolution of a call conclusive. See and consider Cornwall, &c., Co. v. Bennett, 5 H & N. 423; 29 L. J. Ex. 157; and Roney's case, 4 D. J. & S. 12 W. R. 815, 994.

20. The directors may, if they think fit, receive from any member willing to advance the same all or any pt of the money due upon the shares held by him beyond the sums actually called for, and upon the moneys so pd in advance, or so much thereof as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advance has been made, the co may pay interest at such rate as the member paying such sum in advance and the directors agree

upon.

As to the position in the winding up of persons who have paid in advance, see Maude's case, 6 Ch. 51, and notes to Cl. 152, infra.

The power to receive in advance is a trust for the benefit of the company. Hence, where directors paid up in advance their own shares, and on the same day appropriated the amount in payment of their fees, for which there were, at the time, as they knew, no other available assets, it was held that the transaction not being bonâ fide, the directors remained liable on their shares. Sykes' case, 13 Eq. 255. See also Gilbert's case, 5 Ch. 559; In re Wincham Shipbuilding Co., 9 C. Div. 322; and compare with Liverpool Guarantee Co., 30 W. R. 378; 46 L. T. 54.

It has not been settled whether under this clause [Table A., cl. 7] interest can Form 117. be paid irrespective of profits. According to Guiness v. Land Corporation of Ireland, 22 C. Div. 349, it would seem not. And at any rate if the bargain is not bona fide, but is designed to enable the company to pay dividend out of capital, it will be ultra vires. In Fisher v. Hull & Barnsley Ry. Co., before Jessel, M. R., 4 Mar. 1881, shareholders had paid in advance, and it was alleged that they were entitled to be paid interest though the company was not making any profits, but the M. R., in granting an injunction, said: "I can see that there may be questions of bona fides involved, which may or may not affect the right of the company to pay the interest, and therefore I reserve this point for decision on a future occasion."

FORFEITURE AND LIEN.

21. If any member fail to pay any call or instalmt on or before the If call or day appointed for the paymt of the same, the directors may at any time instalment not paid, notice thereafter during such time as the call or instalmt remains unpd, serve a may be given. notice on such member requiring him to pay the same, together with any interest that may have accrued, and all expenses that may have been incurred by the co, by reason of such non-paymt.

The power of forfeiture is a most valuable one for enforcing the payment of calls and instalments. But it is to be treated as strictissimi juris, and accordingly any irregularity in the procedure will invalidate the forfeiture. Hart v. Clark, 6 H. L. Cas. 633; The Garden Gully, &c., Co. and McLister, 1 App. Cas. 39; Johnson v. Lyttle's Iron Agency, 5 C. Div. 687; Goulton v. London Architectural Co., W. N. 1877, 141; Stubbs v. Lister, 1 Y. & C. 81. See Form 327, infra.

The power is a trust to be exercised for the benefit of the company, and, if it is used for the purpose of enabling members to escape from their liabilities, the transaction cannot stand. In re Esparto Trading Co., 12 C. Div. 191. A power to forfeit may probably be inserted by special resolution. Dawkins v. Antrobus, 17 C. D. 615.

22. The notice shall name a day (not being less than fourteen days Form of notice. from the date of the notice), and a place, or places, on and at which such call or instalmt and such interest and expenses as afsd are to be pd. The notice shall also state that in the event of non-paymt at or before the time and at the place appointed, the shares in respect of which the call was made or instalmt is payable, will be liable to be forfeited.

23. If the requisitions of any such notice as afsd are not complied If notice not with, any shares, in respect of which such notice has been given, may, chares may be complied with at any time thereafter, before paymt of all calls or instalmts, interest and forfeited. expenses, due in respect thereof, be forfeited by a resolution of the directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares, and not actually pd before the forfeiture.

The forfeiture may be held valid although this clause has not been strictly observed. Woolaston's case, 4 De G. & J. 437; Knight's case, 2 Ch. 321.

Of course the directors are not bound to exercise the power of forfeiture. Rigg's case, 1 Eq. 309.

[23a. When any shares shall have been so forfeited, notice of the Notice after resolution shall be given to the member in whose name it stood prior to

forfeiture.