A book, to be called the Register of Shareholders, is to be kept by the company, and the names of all shareholders must be entered therein; and the register must be from time to time authenticated by the common seal of the company. (Id., s. 9, post, App. 87).

A Shareholders' Address Book, containing an alphabetical list of all shareholders, with their places of abode and descriptions, must also be kept by the company, open to the perusal of every shareholder. (Id., s. 10, post, App. 87).

The holder of any share may demand of the company a certificate of the proprietorship of such share, under their seal. The certificate may be according to a form annexed to the act; (Id., s. 11, App. 87); and it is in all courts primâ facie evidence of title, though the want of such certificate does not prevent the holder from disposing of his share. (Id., s. 12, post, App. 88). If the certificate be lost or damaged, it may be renewed. (Id., s. 13, post, App. 88). The company, if authorised by three-fifths of the votes of the shareholders, may convert the shares paid up into a general capital stock, to be divided amongst the shareholders. (Id., s. 61, post, App. 96). After such consolidation, the provisions of the act, which require the capital of the company to be divided into shares, cease, and the holders of stock may thenceforth transfer it in the same manner as shares; and the company are required to enter every transfer of stock in a book. (Id., s. 62, post, App. 97). The names of the holders of stock must be entered in a book, called "The Register of Holders of Consolidated Stock," which is to be accessible to holders of shares or stock. (Id., s. 63, post, App. 97). The holders of stock, are entitled to dividends, and the same privileges as would be conferred by shares of equal amount. (Id., s. 64, post, App. 97).

Before the Joint Stock Companies Act (7 & 8 Vict. c. 110) required railway companies to be provisionally regis

tered, it was the practice of companies to issue at their pleasure scrip certificates payable to bearer; but now, as we have seen (d), a penalty is imposed upon any person who shall issue scrip or letters of allotment, before a certificate of provisional registration is obtained; and after provisional registration, the promoters of a company can only open subscription lists, and allot shares, and receive deposits by way of earnest thereon, of a certain specified amount (e).

Since this act has come into operation, railway companies have invariably been provisionally registered, and scrip certificates have been issued to those persons who have executed the preliminary contracts.

It is a matter of notoriety, that the scrip thus issued is publicly sold in the Stock Exchange, to the amount of many thousands (g); that the purchasers, for the most part, have no legal transfer made to them by the vendor, or the company who issued the scrip, but the transaction is completed by the payment of the purchase-money, and receiving the scrip; and it is equally notorious, that these purchases are very frequently made for the mere chance of selling the scrip at an advanced price, and that such speculations would not be engaged in if the purchasers were obliged to incur the expense of stamps, and a proper legal assignment (h).

(d) See ante, 3. (e) See ante, 7.

(g) See London Grand Junction Railway Company v. Freeman, 2 Man. & G. 639; Jackson v. Cocker, 2 Railway Cases, 372; S. C., 4 Beavan, 59.

(h) It is now well known that a grave doubt exists whether all this traffic is not altogether illegal, by force of the 26th sect. 8 Vict. c. 110. Since the author wrote the note (b) annexed to that section, (post. App. 52), in which he expressed an opinion

that the section does not apply to railway companies, he has been informed that several very eminent law. yers have expressed a different opinion; but, upon a careful reconsideration of the question, the writer, with great deference, still retains his original opinion, that the latter part of the section does not apply to railway companies, under any circumstances. The shares of railway companies come into being, as it were, by force of their special acts. This appears by the following language,

It appears, also, that railway companies have been accustomed, in times past, as soon as the special act has been obtained, to register the holders of these scrip certificates as shareholders, without inquiring whether they were the original subscribers, who had obtained the scrip and signed the preliminary contracts, or not; and thus the registry of the shareholders has been made according to numerical order, as the scrip is brought to the company's office, and not with reference to the numbers of the shares allotted, as they appeared on the face of the scrip. The legality of this practice has been questioned, in several cases, but it was finally determined, that parties who had been registered as shareholders, under circumstances similar to those above-mentioned, are liable to pay up the calls on the shares, although they had never signed the preliminary contracts, or obtained any legal transfer of the scrip, from the original allottees of the shares (i). These decisions appear to be applicable to the provisions of the above-mentioned statute with respect

usually to be found in the acts passed during the last session of parliament, "That the capital of the company shall be —, and the number of shares into which the capital shall be divided shall be thousand, and the amount of each share shall be -" See also the corresponding enactment, 8 Vict. c. 16, s. 6, post, App. 87. It seems, therefore, that only such certificates of shares as are issued, by companies acting under deeds of settlement, are pointed at in the latter part of the 26th section; and it is submitted that this plainly appears, if the form of the certificate given in Schedule I (evidently drawn with a view to one of the requirements of sect. 26) is referred to, (post App. 73). By this form of

certificate the share is mentioned by its number, and it is treated as an existing share; whereas, if the argu

ment above suggested has any force, the shares of railway companies are not brought into existence. See also the observations of Lord Langdale, M. R., in Jackson v. Cocker, 4 Beav. 63; S. C., 2 Railway Cases, 375. The mere circumstance that a right to possess shares in futuro is, by mistake and inadvertence, sometimes treated in the certificates which are issued, and in other documents, as if the shares were already created, seems undeserving of much weight in considering this important question.

(i) See Birmingham, Bristol, and Thames Junction Railway Company v. Locke, 1 Q. B. 256; London

Grand Junction Railway Company v. Graham, 1 Q. B. 271; London

Grand Junction Railway Company v. Freeman, 2 Man. & G. 606; 2 Railway Cases, 468.

to the registration of shares; and it may be assumed, that, if the holders of scrip apply to the company, and become registered as shareholders, they become liable to pay all subsequent calls (k) so long as the shares remain registered in their names.

In all the cases above referred to, the company, without offering any objection, registered the scrip, and placed the names of the holders on the registry; and under the provisions of the new statute, (sect. 8, ante, 120), such a step, when taken, seems to constitute the party a shareholder; but a question of a different kind will be raised, if a railway company should hereafter refuse to register the holder of scrip certificates, he not being the original allottee of the shares. It is obvious, that, in some cases, it may be of the utmost importance to directors who have obtained the special act, and are responsible to carry on the undertaking (1), to compel the parties who signed the provisional contracts to come in and register themselves as shareholders. Nor are there wanting authorities to shew that such original subscribers may be sued for calls, although they have never become registered (m). The point here suggested has never been decided; and when it arises, much may depend upon the form of the provisional contracts, and also of the letters of allotment and scrip certificates which were issued by the company.

(k) The Cheltenham and Great Western Union Railway Company v. Daniel, 2 Q. B. 292; S. C., 2 Railway Cases, 728: Sheffield and Manchester Railway Company v. Woodcock, 7 Mee. & W. 584; S. C. 2 Railway Cases, 522.

(1) R. v. Eastern Counties Railway Company, 10 A. & E. 531; R. v. The Trustees of the Luton Roads, 1 Q. B. 860.

(m) As to the mode of proceeding

to recover calls, against an original subscriber, who has never been registered, see Kidwelly Canal Company v. Raby, 2 Price, 93; The Great North of England Railway Company v. Biddulph, 7 Mee & W. 243; S. C. 2 Railway Cases, 401; West London Railway Company v. Bernard, 13 Law Journal, Q. B. 68; Thames Tunnel Company v. Sheldon, 6 B. & C. 341; 9 D. & R. 278.

On this point Daly v. Thompson (n) is a case deserving of notice. The plaintiff brought an action on the case, against the secretary of a company, to recover damages for not delivering a certificate in respect of twenty shares, alleged to have been purchased by him, and for refusing to register the shares in his name. By the act of Parliament, the number of shares were to be 10,000; and it appeared, that, before the plaintiff applied to the secretary, the whole number of 10,000 shares had been registered, in consequence of a fraudulent issue of fictitious scrip, and it was objected that the action would not lie, because the register was full, and the defendants had no power to add to the number of shares; and that appearing to be the case, the plaintiff was nonsuited.

The case afterwards came before the Court of Exchequer, and it was objected, that the plaintiff had not made out a good title to these shares, inasmuch as all that he had done was to produce scrip certificates payable to bearer.

Parke, B., in delivering judgment, said:—" The plaintiff must shew that he was entitled as assignee of an original subscriber; and there is a serious question whether he could shew that merely by the production of the scrip certificate payable to bearer, in which it is stated that the share belongs to the bearer of the certificate. To say the least of it, there is great doubt whether any person, not authorised 80 to do, can make such evidence admissible by an act of this description, as in the case of bills of exchange payable to bearer, or promissory notes or bills of lading, which are indorsed, and the property of which passes to the bonâ fide bearer of that indorsement. There must be a new trial; and if the plaintiff on that occasion cannot trace his title to the original subscriber, by shewing who that subscriber was, and by proving an assignment from that person, and so on from

(n) 10 Mee. & W. 309.