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1121

COMPANY (XIX) Shares and Stock.

(17) MORTGAGE OF SHARES.
not exceeding 68 per cent., or to repay the
sum in bank notes on B. giving A. six months'
notice, it is in the election of B. whether he
will have the money reinvested or paid in
bank notes. Chippendale v. Thurston, 4 Car.
& P. 98.

Damages for Default-Assessment.]—
In assessing damages on a writ of inquiry, on
a bond to replace stock, the fair rule is to
take the price of the stock on the day of the
Harrison v.
trial or the day previously.
Harrison, 1 Car. & P. 412.

And not, as was formerly held, on the day
when it ought to have been replaced, or the
price at the day of the trial, at the option of
the plaintiff. M'Arthur v. Seaforth (Lord),
S. P., Downes v. Back, 1
2 Taunt. 257.
Stark. 318.

On a bond conditioned for replacing stock,
the obligee is not entitled to special damages
for a profit he might have made if it had been
sooner replaced, unless he shows that he
Ib.
actually would have made it.

But in one case it was held not enough to
take the value of the stock on that day if it
had risen in the meantime, but the highest
value as it stood at the time of the trial; there
being no offer of the defendant to replace it
in the intermediate time while the market
was rising. Shepherd v. Johnson, 2 East,
211.

Sufficiency of Stamp.]-Upon the loan of money, produced by the sale of stock, a bond was given, conditioned to replace the stock on a given day. By agreement of the same date, reciting the bond and a deposit of title deeds of property, it was agreed that the deeds should remain as a collateral security for replacing the stock, and that the borrower should execute a mortgage of the property to secure the replacing of the stock :-Held, first, that the bond was properly stamped with an ad valorem stamp. Blair v. Ormond, 14 Q. B. 732; 19 L. J. Q. B. 228; 14 Jur. 191-Ex. Ch. Held, secondly, that it was not affected by the insufficiency of the stamp on the agreeIb.

ment.

same

When Mortgagee a Contributory.]-A. and B. held shares in a company as a security for a debt. They exchanged these shares for consolidated shares in the company, and at the time took other shares in lieu of dividends then due. The circumtances under which the shares were held by A. and B. were well known to the directors :-Held, that A. and B. were contributories in respect of all Wales the shares held by them. Price and Brown's Case; Vale of Neath and South Brewery Co., In re, 3 De G. & Sm. 146; 19 L. J. Ch. 123; 14 Jur. 405.

·-

The rules of an unregistered mutual marine insurance company provided, that where any ship insured with the company was mortgaged the mortgagee should give a guarantee for the payment of all averages and contributions due or to become due in respect of the ship:Held, that a mortgagee who had given such a guarantee to the company was not a contributory within the meaning of the Companies Lee and Moor's Case, L. R. Act, 1862, s. 200. 5 Eq. 368; 16 W. R. 685. VOL. IV.

ΟΙ

and Com

Shares Transferred into Name Mortgagee Company.]-A banking company, I., the articles of which in general terms gave the directors very ample powers of management, advanced money on the deposit of shares in company A. The directors becoming alarmed by a judicial opinion, that the shares remained within the order and disposition of the depositors, passed a resolution to have the shares transferred into the name of company I., or its manager. They were accordingly transferred into the name of company I., the transfers being executed on behalf of company I. by an agent, not under the common seal. The company was registered as shareholder, sold some of the shares, and received the purchase money, received the dividends on the rest. pany A. was afterwards ordered to be wound up-Held, that although the acts of ownersship exercised by company I. over the shares would not have prevented it repudiating them if the transaction had been ultra vires, company I. was rightly placed on the list of contributories; for that, although buying the shares of another company, as a speculation would have been ultra vires it was within the powers of the company, as bankers, to advance money on the deposit of shares, and to do all such acts as were reasonable and proper for making the security available. Royal Bank of India, Ex p.; Asiatic Banking Co., in re, L. R. 4 Ch. 252; 19 L. T. 805; 17 W. R. 359. And see Bloomenthal v. Ford, 66 L. J. Ch. 253; [1897] A. C. 156; 76 L. T. 205; 45 W. R. 449-H. L. (E.), col. 1043.

Priorities.]-The doctrine that incumbranbrancers of real estate take rank by the date of their incumbrances, and not by date of notice to the trustee, applies to the case of stock or money which is in equity real estate. Carew, In re, 16 W. R. 1077.

Mortgagee and Cestui que Trusts.]— A. held shares as trustee, and executed a declaration of trust, but no notice was given A. afterwards at the office of the company. mortgaged his shares to secure his private debt. Notice of this mortgage was given to entered in their the company, books -Held, that the mortgagee had priority Martin v. Sedgover the cestui que trust. wick, 9 Beav. 333; 10 Jur. 463.

:

and was

in Stock Mortgagee Reversion Security not Perfected.]-A., for valuable consideration, takes a security upon a reversionary sum of stock, at a time when, by reason of the death of the person in whose name the stock stood, without legal representatives, no notice of the incumbrance could be given to the trustee of the fund. A., however, does not attempt by distringas or otherwise to perfect the security. Afterwards B., for valuable consideration and without notice of A.'s incumbrance, takes a security upon the same fund, and at the same time serves a writ of distringas on the Bank of England. B.'s security has priority over that of A. Etty v. Bridges, 2 Y. & Coll. C. C. 486; 12 L. J. Ch. 474; 7 Jur. 936.

Notice of Prior Title.]-A sole trustee of shares executed a transfer, and delivered it, 36

(17) MORTGAGE OF SHARES.

1125

COMPANY-(XIX) Shares and Stock.

(a) Contracts for Generally.
(18) TRANSFER OF SHARES.

receipt. On bill to discover which receipt it
was B. sold, it being by issue found to be that
was decreed for
deposited by A., account
difference, with interest and costs.
Mercer, 2 Bro. P. C. 563.

Sale in Breach

Tutt v.

of Contract.]—A.

having borrowed £30,000 of B. transferred to him £14,000 stock, by way of pledge for the repayment of the money so borrowed; and B. agreed that he would not sell any part of the stock until after the expiration of one year from that time. Notwithstanding this agreement, B. sold the stock on the very same day-Held, that he was answerable for the money received by such sale, with interest. André v. Crawford, 1 Bro. P. C. 366.

Wrongful Sale.]-A banking company, who were mortgagees of Spanish bonds, employed the defendant to raise money upon them by deposit in his own name; the party with whom the defendant deposited them called on the defendant for repayment, and, on default, sold the bonds, with the concurrence of the defendant, without the knowledge of the company, and paid the balance of the proceeds to the defendant. The company was afterwards compelled by their mortgagor to replace the bonds or their value :-Held, that the defendant was answerable to the company for the market price of the bonds at the time of the actual sale, and that he was not answerable for the value of the bonds at any other time. Gordon v. Pym, 3 Hare, 223.

as

Reversionary Interest-Sale at Undervalue -Setting Aside. ]-B. being entitled to a sum of £2,916 stock in reversion expectant on the death of an old lady aged eighty-two, obtained through the defendant E., who acted solicitor for both parties, a loan of £1,650 upon The mortgage contained a power mortgage. of sale upon three months' notice, or on interest being one month in arrear. The interest being in arrear, the stock was sold, under the power, for £1,950, as subject to The tenant for succession duty at 3 per cent. life was then in a precarious state of health, and died within three months. It was afterwards found that only £7 was payable for succession duty. None of the purchase-money was paid except the deposit, the rest being left upon mortgage of the stock. There evidence that having regard to the age and health of the tenant for life, from £100 to £200 might have been obtained for the reversion :Held, that the sale could not be set aside, either on the ground of undervalue, as there no fraud; nor the leaving of the purchase-money on mortgage; nor the mistake as to succession duty, that being merely a matter for compensation. Bettyes v. Maynard, 49 L. T. 389; 31 W. R. 461-C. A.

was

name

was

Re-transfer of Security.]-A. invests in
of trustees stock as security for B.
remains
certain payment. Stock
against
uncalled upon for length of time. A. cannot
have it re-transferred himself, but dividends
ordered in future to be paid to A.
Hyde, 2 Madd. 94.

Linton v.

18. TRANSFER OF SHARES.

a. Contracts for Generally.

By Parol.]-A parol agreement for the sale
of railway shares is binding; for they are
neither an interest in or concerning lands
within s. 4 of the Statute of Frauds, nor goods,
Dun-
wares, or merchandises within s. 17.
S. P..
cuft v. Albrecht, 12 Sim. 189.
Bowlby v. Bell, 3 C. B. 284; 16 L. J. C. P.
18; Watson v. Spratley, 10 Ex. 222; 2
C. L. R. 1434; 24 L. J. Ex. 53; 2 W. R. 627.

How Satisfied.]-A contract for the sale of
shares in a projected railway is satisfied by a
tender of a letter of allotment, where from the
circumstances it may be inferred that the
parties dealt upon the footing of such docu-
ment being equivalent to scrip; and conse-
quently, there may be a complete breach of
such contract before the actual existence of any
scrip or shares properly so called. Tempest
v. Kilner, 3 C. B. 249.

A contract to deliver shares in a company does not require the actual delivery of scrip certificates, which are the mere indicia of property; but the party contracting to deliver the shares sufficiently performs his engagement when he places the other in the position of being the legal owner of them. Hunt v. Gunn, 13 C. B. (N.s.) 226; 7 L. T. 277.

Evidence of Custom.] Where the for bought and sold notes which constituted the provided expressly contract written the time for payment, but were wholly silent as to the time of delivery of the shares :Held, that parol evidence was admissible of a custom among brokers of mining shares, that the vendor was not bound to deliver the shares without contemporaneous payment. Field v. Lelean, 6 H. & N. 617; 30 L. J. Ex. 168; 7 Jur. (N.s.) 918; 4 L. T. 121; 9 W. R. 387Ex. Ch. And see STOCK EXCHANGE, col. 1230.

Right to Abstract of Title.]-The purchaser of shares in a mining company is not entitled to a regular abstract of title to the mines themselves, as if he were purchasing a share in the land in which they are worked; but he is entitled to such evidence of the constitution of the company and of the nature of the title under which the mines are worked, as will show that the subject-matter of the purchase is what it professes to be, and that the proposed form of transfer to him will give him a valid title to the shares. Curling v. Flight, 2 Ph. 613; 17 L. J. Ch. 359; 12 Jur. 423.

Error in Numbers of Shares.]-In a transfer of shares in a company an error in the distinguishing numbers of the shares is immaterial, provided the transferor has at the time a sufficient number of shares in the company. Ind's Case; Re International Contract Co., 41 L. J. Ch. 564; L. R. 7 Ch. 485; 26 L. T. 487; 20 W. R. 430.

Obligation to Prepare.]-On the purchase of shares in a company the obligation to prepare a transfer is, as a general rule, on the Cowper-Coles, purchaser. Birkett T. L. R. 298.

V.

35

(18) TRANSFER OF SHARES. (b) Action for Breach to Deliver. Seller must execute Transfer.]-It was provided by the deed of settlement of a company, that no shareholder should be at liberty to transfer his shares except in such manner as a board of directors should approve. A shareholder contracted to sell his shares :-Held, that he was bound specifically to perform the contract by execution of a transfer, though the directors refused to allow it. Poole v. Middleton, 29 Beav. 646.

Directors' Right to Require Execution of Acceptances.]-It is competent to the directors of a company registered under the Joint Stock Companies Act, 1856, to require a transferee of shares to execute an acceptance before being registered as proprietor. Ortigosa v. Brown, 47 L. J. Ch. 168; 38 L. T. 145.

Colonial Stock.]-55 & 56 Vict. c. 35, amends the Colonial Stock Act, 1877, so far as regards the mode of transfer.

Purchases taken subject to Liabilities of Company.]-Every person purchasing shares in a company formed for working mines in South America, and whose shares are transferable by delivery, takes them subject to the liabilities of the company at the time of the purchase. Grisewood, Ex p., 28 L. J. Ch. 769; 5 Jur. (N.S.) 1192.

"

Agreement to Sell Shares-Construction"Timber."]-The respondent agreed to sell to the appellants at an agreed price shares in a saw mills company which had extensive rights of cutting timber over a large area of ground for long periods of time. The agreement contained a provision to the effect that the vendor was to give a satisfactory guarantee to the purchasers that the quantity of timber on the different tracts of land as shewn by the statement.. attached hereto . . . is true and accurate"; and in the event of the quantity of timber on the said various tracts failing, on verification, to reach the quantity represented in the attached statement, the vendor was to repay to the purchasers the amount of shortage -Held, that the word

66

timber" must be held to mean all timber trees growing on the land which were reasonably fit for use in such a business as that carried on by the company, and should not be restricted to such trees as were at the date of the agreement capable of being felled and sold at a profit at the then current prices. Swift v. David, 107 L. T. 71-P. C.

Bankruptcy of Transferor.]-See col. 795. Dividends declared after Sale.]—The defendant sold by auction and the plaintiffs bought shares in a company on August 21. By the conditions of sale the purchase was to be completed on August 29, on which day it was accordingly duly completed. The ordinary half-yearly meeting of the shareholders of the company was held and a dividend declared on August 28. The conditions of sale contained no mention of any dividends :-Held, that the purchasers were entitled to the dividends on the shares declared at the meeting. Black v. Homersham, 48 L. J. Ex. 79; 4 Ex. D. 24; 39 L. T. 671; 27 W. R. 171.

(i) Right of.

Share not to vest till one-fifth paid—Transfer-Acceptance of Transferee by Company.] -M. agreed to take shares in a company incorporated by an Act of Parliament, providing that the company should not issue any share, nor should any share vest in the person accepting the same, unless and until a sum not being less than one-fifth of the amount of such share had been paid in respect thereof. He transferred his shares without paying onefifth of the amount; the transfer was duly registered, and his name removed from the register of shareholders. More than a year afterwards the company commenced to be wound up -Held, that his original agreement to take shares was discharged by the transfer, which operated as a new contract between the company, M., and the transferee. Towns Drainage and Sewage Utilization Co., In re; Morton's Case, 42 L. J. Ch. 786; L. R. 16 Eq. 104; 21 W. R. 933.

And see STOCK EXCHANGE.

b. Action for Breach to Deliver.
i. Right of.

Tender by Purchaser.] Where railway shares are by the act constituting them transferable by writing only, the purchaser of such shares cannot maintain an action for not transferring, unless he has previously tendered a conveyance to the seller for execution. Stephens v. De Medina, 4 Q. B. 422; 3 Railw. Cas. 454; 3 G. & D. 110; 12 L. J. Q. B. 120.

Consent of Directors withheld-Fall in Value before Delivery.]-The plaintiff agreed to purchase of the defendant shares in a company established under a deed of settlement, and sent a form of transfer to the defendant, for his execution. The deed required that on a transfer of shares, the intended proprietor should be approved of by the directors. The defendant executed and returned the transfer, and sent also a certificate (according to the provisions of the deed) verifying his title to the shares. The plaintiff, on receiving the transfer, paid for the shares, but before such payment the directors passed a resolution, unknown to the plaintiff till after the payment, stating that the defendant had commenced an action against the company, and that no transfer of shares standing in his name should be allowed while such action was pending. The directors never objected to the plaintiff as a proprietor, and the defendant denied their power to stay a transfer on the ground stated. While the transfer was suspended, the shares fell in the market, and the plaintiff brought an action to recover back the purchasemoney-Held, first, that the action lay, for the defendant, as vendor, was bound to obtain the assent of the directors, and do all that was necessary to vest the shares in the plaintiff. Wilkinson v. Lloyd, 7 Q. B. 27; 14 L. J. Q. B. 165; 9 Jur. 328.

Held, secondly, that the fact of their having fallen in value was no objection to the plaintiff's rescinding the contract, since he had never had the shares at all, and therefore had received no part of the consideration for his purchase. Ib.