8 Vict.

destroyed, then, upon proof thereof to the satisfaction of the c. 16, s. 14. directors, a similar certificate shall be given to the party entitled

Transfer of
Shares.

Transfers of shares to be

to the certificate so lost or destroyed; and in either case a due entry of the substituted certificate shall be made by the secretary in the register of shareholders; and for every such certificate so given or exchanged the company may demand any sum not exceeding the prescribed amount, or if no amount be prescribed, a sum not exceeding two shillings and sixpence.

And with respect to the transfer or transmission of shares, be it enacted as follows:

14. Subject to the regulations herein or in the special Act contained, every shareholder may sell and transfer all or any of by deed duly his shares in the undertaking, or all or any part of his interest in

stamped.

Parol

contract.

Real purchaser must indemnify.

Pending call.

Agreement by company to buy its own shares.

Remedy against direc

tors.

the capital stock of the company, in case such shares shall, under the provision hereinafter contained, be consolidated into capital stock; and every such transfer shall be by deed duly stamped, in which the consideration shall be truly stated; and such deed may be according to the form in the schedule (B.) to this Act annexed, or to the like effect.

A parol agreement to transfer railway shares, even though nothing has been paid on them, can be specifically enforced (Duncuft v. Albrecht, 12 Sim. 189, 199; Cheale v. Kenward, 3 De G. & J. 27; Humble v. Mitchell, 2 R. C. 70; 11 A. & E. 205).

The transferee will be bound to indemnify the vendor and to have himself properly registered (Wynne v. Price, 3 De G. & Sm. 310; 5 R. C. 465; Shaw v. Fisher, 2 De G. & Sm. 11; 5 D. M. & G. 596; 5 R. C. 461; Sayles v. Blane, 14 Q. B. 205; Paine v. Hutchinson, 3 Ch. 388; Hawkins v. Maltby, 4 Ch. 200. See 4 Drew. 686. The case of Humble v. Langston, 7 M. & W. 517, if contrà, must be considered overruled. See Walker v. Bartlett, 18 C. B. 845, 862).

If the contract is entered into with a nominee or trustee for the purchaser and a transfer executed to the nominee, the real purchaser will be bound to indemnify the vendor (Castellan v. Hobson, 10 Eq. 47; Brown v. Black, 8 Ch. 939. See Maynard v. Eaton, 9 Ch. 414. The case of Torrington v. Lowe, L. R. 4 C. P. 26, if contrà, must be considered overruled).

Where there are several purchasers each will be bound to indemnify the vendor to the extent of his interest. They will not be jointly and severally liable for the whole number of shares (Brown v. Black, supra).

The fact that at the date of the contract a call has been made, of which the purchaser is not aware, would not, it seems, be a defence to an action for specific performance by the vendor (Hawkins v. Maltby, 3 Ch. 190; 4 Ch. 200).

A company having power to purchase its own shares cannot, after it has become insolvent, be compelled to register a transfer of shares which it has contracted to purchase (Nelson Mitchell v. City of Glasgow Bank, 4 App. C. 624).

Where directors, who have agreed to allot shares to a plaintiff, allot all the shares to other persons, the plaintiff's proper remedy is an action for damages, and not for specific performance or indemnity (Ferguson v. Wilson, 2 Ch. 77).

In the case of sales upon the Stock Exchange the practice is for the broker to Sales on Stock chaser is passed to the vendor. sell to a jobber, and, after several subpurchases, the name of the ultimate purExchange. If the vendor accepts the name and executes a transfer which is accepted by the transferee, the contract between the ultimate purchaser and vendor is complete, notwithstanding the intermediate sales at varying prices, and may be specifically enforced or damages may be recovered (Musgrave & Hart's Case, 5 Eq. 193; Evans v. Wood, 5 Eq. 9; Hodgkinson v. Kelly, 6 Eq. 496; Bowring v. Shepherd, L. R. 6 Q. B. 309. See Davis v. Haycock, L. R. 4 Ex. 373). An acceptance of the transfer by the purchaser's brokers is sufficient to bind the purchaser (Sheppard v. Murphy, I. R. 2 Eq. 544; Bowring v. Shepherd, L. R. 6 Q. B. 309; Loring v. Davis, 32 Ch. D. 625).

Purchaser's

broker binds principal.

Jobber's

liability.

The purchasing jobber is discharged from liability as soon as the name of a person competent to accept shares has been furnished to the vendor and a transfer

has been executed by him and accepted by the transferee (Grissell v. Bristowe, L. R. 4 C. P. 37; Coles v. Bristowe, 4 Ch. 3).

It is immaterial that the transferee is only a nominee for the purchaser or a man of straw if he has in fact been accepted by the vendor (Maxted v. Paine (2nd action), L. R. 6 Ex. 132).

8 Vict.

c. 16, s. 14.

It would seem to be doubtful whether the vendor could refuse to accept a name Refusal to passed by the jobber where it represents a real person capable of contracting (see accept name. Marted v. Paine, L. R. 6 Ex. 132. In Allen v. Graves, L. R. 5 Q. B. 478, it was expressly held that the contract was out of the ordinary course of business, and not

within the customs of the Stock Exchange).

If, however, the jobber guarantees registration, he is not discharged till the Registration transferees have been accepted by the company and duly registered (Cruse v. Paine, guaranteed. 4 Ch. 441).

The jobber is not discharged by giving the name of a person from whom he has Passing name no authority, or the name of an infant or other person incapable of being the holder of infant. of shares (Maxted v. Paine, L. R. 4 Ex. 81; Nickalls v. Merry, L. R. 7 H. L. 530.

See Heritage v. Paine, 2 Ch. D. 594).

Upon a sale of shares the purchaser is entitled to a dividend declared after the Dividend contract has been entered into, though before the time appointed for completion after contract. (Black v. Hamersham, 4 Ex. D. 24).

A person who employs a broker to speculate in shares for him on the Stock Exchange, the intention being not to buy shares, but only to pay or receive the differences between the contract and market price on the settling day, is bound to indemnify the broker against sums he is compelled to pay (Thacker v. Hardy, 4 Q. B. D. 685, and see the cases there cited; Ex parte Rogers, 15 Ch. D. 207). A written agreement for the sale of scrip in a railway company must be stamped Stamp on sale with a sixpenny stamp (see Knight v. Barber, 16 M. & W. 66). of scrip.

There is no equity to prevent the transfer of shares to a nominee to increase Transfers to voting power (Pender v. Lushington, 6 Ch. D. 70; Moffatt v. Farquhar, 7 Ch. D. 591). increase votBut directors may be restrained from acting upon an old resolution for the issue ing power. of shares where the issue is intended to secure votes in favour of the directors (Fraser v. Whalley, 2 H. & M. 10).

A deed of transfer in which the name of the transferee is left in blank and Transfer in afterwards filled up by an agent is void as a deed (Hibblewhite v. M'Morine, 6 M. & blank. W. 200; Société Générale de Paris v. Walker, 11 App. C. 20; see Colonial Bank v. Hepworth, 36 Ch. D. 36).

Where a transferee signs a deed of transfer and procures himself to be registered, Estoppel. he cannot dispute his liability to the company though the transferor executed the transfer in blank (Sheffield, Ashton-under-Lyne, &c. Ry. Co. v. Woodcock, 7 M. & W. 574; 2 R. C. 522; Straffon's Executors' Case, 1 D. M. & G. 576. See Re Barned's Banking Co., 16 L. T. N. S. 514; 3 Ch. 105).

Where the company omits certain formalities required for the validity of a transfer they will, nevertheless, be bound by it as between the transferor and the company (Bargate v. Shortridge, 5 H. L. 297).

It appears to be the duty of the purchaser to tender a deed of transfer (Stephens Tender of v. Medina, 3 R. C. 454 ; 4 Q. B. 422; Bowlby v. Bell, 4 R. C. 692 ; 3 C. B. 284, 294), deed. No title can be founded on a forgery (Davis v. Bank of England, 2 Bing. 393). Forgery. If the company registers the transferee under a forged transfer, the real owner Right of is entitled to have the shares re-transferred to him, and he may proceed against the transferor company either by mandamus or by way of equitable relief, or he may claim damages where trans(Midland Ry. Co. v. Taylor, 8 H. L. C. 751; Swan v. North British Australasian Co., fer forged. 2 H. & C. 175; Cottam v. Eastern Counties Ry. Co., 1 J. & H. 243; Johnston v. Renton, 9 Eq. 181).

It seems the company may, upon ascertaining that a purchaser has been registered upon a transfer containing a forgery, of which the purchaser has no knowledge, restore the name of the vendor to the register, though he makes no claim to the shares, or at any rate the purchaser in such a case is not a shareholder (Hare v. L. & N. W. Ry. Co., fo. 722).

A person may be deprived of his right to insist on the invalidity of a forged What neglitransfer by negligence, but such negligence must be in the transaction itself, it gence of must be the proximate cause of leading the party who acts on the forgery into the transferor mistake, and it must be neglect of some duty owing to that party or the general destroys his public (Swan v. North British Australasian Co., 2 H. & C. 181; Arnold v. Cheque rights. Bank, 1 C. P. D. 578; Baxendale v. Bennett, 3 Q. B. D. 525; Coventry v. Gt. E. Ry. Co., 11 Q. B. D. 776).

The following circumstances have been held not to be negligence within this rule: negligence in the custody of a seal which is thereby put to a power of attorney (Bank of Ireland v. Evans' Charities, 5 H. L. 389).

8 Vict.

c. 16, s. 15.

Stamp upon joint transfer.

Shares in name of lunatic.

Form of transfer.

Charging order.

Judgment

debt payable in future.

Trustee having no beneficial

interest.

Equitable interest.

Order for sale.

Transfers of shares to be

registered, &c.

Execution of transfers in blank to enable a broker to sell shares A. where the broker fills in shares B. (Tayler v. Gt. Indian Peninsula Ry. Co., 4 De G. & J. 559 ; Swan v. North British Australasian Co., 2 H. & C. 175; see Donaldson v. Gillott, 3 Eq. 274).

A person whose shares have been transferred under a forged transfer may estop himself from setting up the forgery, if with knowledge of the facts he stands by and allows the company to act as if the transfer were valid (Coles v. Bank of England, 10 Ad. & E. 437; M Kenzie v. British Linen Co., 6 App. C. 82).

Where several persons jointly transfer their shares by one deed, an ad valorem stamp is sufficient (Wells v. Bridge, 4 Exch. 193).

A transfer altered after execution by the insertion of the name of a new transferee requires a fresh stamp (London & Brighton Ry. Co. v. Fairclough, 2 M. & G. 674; 2 R. C. 544).

Where a consideration greater than passed is stated the transfer is not avoided (R. v. Mid. Counties, &c. Ry. Co., 15 Ir. C. L. 525).

Notwithstanding this section, stock standing in the name of a lunatic may be ordered to be transferred in the books of the company by the secretary of the company under the Lunacy Regulation Act, 1853 (16 & 17 Vict. c. 70), s. 140 (In re Ives, 32 L. J. Ch. 673).

The deed of transfer should be in the statutory form, as the company will not be bound to register a deed materially differing from that form (R. v. General Cemetery Co., 6 E. & B. 415).

A person who has obtained judgment against a shareholder may obtain a charging order upon the debtor's interest, vested or contingent, in any shares standing in his name in his own right, or in the name of any person in trust for him, under Order 46, & 2 Vict. c. 110, ss. 14 and 15, and the company will be restrained from transferring such shares. The order when obtained operates from the date of the order nisi (Haly v. Barry, 3 Ch. 452).

It may be obtained though the judgment debt is not payable till a future day, but it cannot be obtained for an unascertained sum, such as costs not taxed (Younghusband v. Gisborne, 1 De G. & Sm. 209; Bagnall v. Charlton, 6 Ch. D. 130; Jones v. Williams, 8 M. & W. 349; Widgery v. Tepper, 6 Ch. D. 364, overruling Burns v. Irving, 3 Ch. D. 291).

A charging order cannot be obtained against a judgment debtor in respect of shares standing in his name as a trustee merely without any beneficial interest. If an order nisi is made in such a case the company may nevertheless transfer the shares (Gill v. Continental Gas Co., L. R. 7 Ex. 332; In re Blakely Ordnance Co., 35 L. T. N. S. 617. The case of Cragg v. Taylor, L. R. 1 Ex. 148, appears to be overruled). A debtor who has transferred shares to a trustee upon trusts for sale and payment of debts, with an ultimate trust in his own favour, has an interest which may be charged (Cragg v. Taylor, L. R. 2 Ex. 131).

And the interest of the debtor in shares forming part of property held in trust for the debtor and other persons may be charged (South Western Loan Co. v. Robertson, 8 Q. B. D. 17).

But a person entitled to the residue of an estate which includes shares after payment of debts and legacies has not an interest in the shares which can be charged (Dixon v. French, L. R. 4 Ex. 154).

An order for sale of shares upon which a judgment creditor has obtained a charging order cannot be made in the action in which the judgment was recovered (Leggott v. Western, 12 Q. B. D. 287. See, too, Order 55, Rule 5a).

An order nisi charging shares is not affected by section 45 of the Bankruptcy Act, 1883, and the judgment creditor cannot be restrained by the trustee in the subsequent bankruptcy of the debtor from completing the order (In re Hutchinson, 16 Q. B. D. 515).

15. The said deed of transfer (when duly executed) shall be delivered to the secretary, and be kept by him; and the secretary shall enter a memorial thereof in a book to be called the "register of transfers," and shall endorse such entry on the deed of transfer, and shall, on demand, deliver a new certificate to the purchaser; and for every such entry, together with such endorsement and certificate, the company may demand any sum not exceeding the prescribed amount, or if no amount be prescribed, then a sum not exceeding two shillings and sixpence; and on the request of the purchaser of any share an endorsement of such transfer shall be

made on the certificate of such share, instead of a new certificate being granted; and such endorsement, being signed by the secretary, shall be considered in every respect the same as a new certificate; and until such transfer has been so delivered to the secretary as aforesaid the vendor of the share shall continue liable to the company for any calls that may be made upon such share, and the purchaser of the share shall not be entitled to receive any share of the profits of the undertaking, or to vote in respect of such share.

8 Vict.

c. 16, s. 16.

It would seem that where a properly-executed transfer of shares, accompanied by Whether the certificates of the shares, is sent to the company, the company is not bound company forthwith to register the transfer, but may take a reasonable time for inquiries bound to act (Société Générale de Paris v. Walker, 11 App. C. 21, 41; Colonial Bank v. Whinney, on transfer. 11 App. C. 426).

Delivery to the secretary of a defective transfer does not confer a right to be registered, at any rate till the defect is remedied (Nanney v. Morgan, 35 Ch. D. 598).

Having regard to section 20, it seems that where notice of an equitable claim is Effect of given to the company it is effectual only for a reasonable time, and operates only as notice of a notice to the company not to allow a transfer without giving the equitable equitable claimant an opportunity to establish his right, per Cotton, L. J. (Société Générale de rights. Paris v. Tramways Union Co., 14 Q. B. D. 424, 448; see Bradford Banking Co. v. Briggs, 12 App. C. 29).

Registration may be compelled by mandamus (Ward v. S. E. Ry. Co., 29 L. J. Mandamus to Q. B. 177; 2 E. & E. 812).

A company will not be compelled to register a transfer to an infant based upon contract (R. v. Midl. Counties, &c. Ry., 15 Ir. C. L. 514).

register. Transfer to infant; to pauper.

But a transfer to a pauper must be registered, if the transfer is bonâ fide without trust or reservation (R. v. Midl. Counties Ry., 15 Ir. Ch. 525). An action for damages lies against a company for not registering a proper deed Default in of transfer whereby the shares have been forfeited and sold (Catchpole v. Ambergate, registering. ge. Ry. Co., 1 E. & B. 111).

Where a company have once registered a person as shareholder they are not entitled to remove his name because his legal title is afterwards found to be defective (Ward v. S. E. Ry. Co., 29 L. J. Q. B. 177; 2 E. & E. 812).

Where the undertaking has been virtually abandoned, and a portion of the subscriptions returned to shareholders, a person who has purchased shares with notice of what has taken place, and whose bona fides in becoming a shareholder is questionable, is not entitled to be registered (R. v. Liverpool, &c. Ry. Co., 21 L. J. Q. B. 284; 16 Jur. 949).

A transfer by deed for a nominal consideration is a transfer within this section, and the transferee is not entitled to be registered without delivering the deed to the secretary (Copeland v. N. E. Ry. Co., 6 E. & B. 277).

Under section 4 of the Married Women's Property Act, 1870 (33 & 34 Vict. c. 93), a company was bound to register shares in the name of a married woman unless they could show a flaw in her title (R. v. Carnatic Ry. Co., L. R. 8 Q. B. 299).

16. No shareholder shall be entitled to transfer any share, after any call shall have been made in respect thereof, until he shall have paid such call, nor until he shall have paid all calls for the time being due on every share held by him.

The meaning of this section is that the company may refuse to execute a transfer of shares while a call is unpaid, and not merely that the transferor remains liable to the call (R. v. Wing, 17 Q. B. 645; S. C. nom. Hall v. Norfolk Estuary Co., 21 L. J. Q. B. 94; 16 Jur. 149).

Removal of transferee for defect of title.

Transfer for nominal consideration. Married Women's Property Act.

Transfer not to be made

until calls

paid.

A call is made when the resolution to call is passed, and not when notice of it is When call given (R. v. Londonderry and Coleraine Ry. Co., 13 Q. B. 998; Ex parte Tooke, 18 made. L. J. Q. B. 343).

Upon the construction of an Act prohibiting a transfer while a call was due and payable, see In re British Provident Life and Fire Assurance Society, 32 L. J. Ch. 633. To an action for the purchase-money by the vendor of shares which he offers to transfer on receiving the name of the transferee, it is no answer that a call has been made on the shares which has not been paid, as the plaintiff can place himself in a condition to make the transfer by paying the call at any time before the transfer (Shaw v. Rowley, 16 M. & W. 810).

8 Vict. c. 16,

88. 17-19.

A broker employed to buy railway shares on which, after contract, the seller pays a call, may pay the call and claim it from the purchaser (Bayley v. Wilkins, 7 Č. B. 886).

A shareholder is entitled to transfer shares on which all calls have been paid Indemnity to though he may be the holder of other shares on which a call has been made broker paying (Hubbersty v. Manchester, &c. Ry. Co., L. R. 2 Q. B. 59, 471).

call.

Closing of transfer books.

Transmission

of shares by

other means

than transfer to be authen

ticated by a declaration.

Infant may be registered. Liability of

executor registered.

Proof of

transmission

And if a transfer of shares on which a call is due has in fact been registered, the transfer is valid, and the transferor is no longer a shareholder (In re Hoylake Ry. Co., 9 Ch. 257).

This section has no application to the case of a transmission of shares under section 18. See In re Bentham Mills Spinning Co., 28 W. R. 26, a case under the Companies Act, 1862.

17. It shall be lawful for the directors to close the register of transfers for the prescribed period, or if no period be prescribed, then for a period not exceeding fourteen days previous to each ordinary meeting, and they may fix a day for the closing of the same, of which seven days' notice shall be given by advertisement in some newspaper as after mentioned; and any transfer made during the time when the transfer books are so closed shall, as between the company and the party claiming under the same, but not otherwise, be considered as made subsequently to such ordinary meeting.

18. If the interest in any share have become transmitted in consequence of the death or bankruptcy or insolvency of any shareholder, or in consequence of the marriage of a female shareholder, or by any other lawful means than by a transfer according to the provisions of this or the special Act, such transmission shall be authenticated by a declaration in writing as hereinafter mentioned, or in such other manner as the directors shall require; and every such declaration shall state the manner in which and the party to whom such share shall have been so transmitted, and shall be made and signed by some credible person before a justice, or before a master or master extraordinary of the High Court of Chancery; and such declaration shall be left with the secretary, and thereupon he shall enter the name of the person entitled under such transmission in the register of shareholders; and for every such entry the company may demand any sum not exceeding the prescribed amount, and where no amount shall be prescribed then not exceeding five shillings; and until such transmission has been so authenticated no person claiming by virtue of any such transmission shall be entitled to receive any share of the profits of the undertaking, nor to vote in respect of any such share as the holder thereof.

It appears that under this section an infant may be registered (Cork & Bandon Ry. Co. v. Cazenove, 10 Q. B. 935; Leeds & Thirsk Ry. Co. v. Fearnley, 4 Ex. 27; and see section 79, which provides for the vote of a minor).

It seems that an executor who assents to the registration of his testator's shares in his own name becomes personally liable. If he does not wish to have the shares transferred into his own name a reasonable time ought to be allowed to him to find a purchaser (Buchan's Case, 4 App. C. 583).

19. If such transmission be by virtue of the marriage of a by marriage, female shareholder, the said declaration shall contain a copy of the will, &c.