Part II. Chap. 2. unpaid at the rate of £ Mortgage of Shares. per cent. per annum, such interest days of the months of to be payable quarterly on the day of next. THIRDLY. The shareholder doth hereby charge, transfer, assign, and set over by way of mortgage to the mortgagee all those the (fifty) shares of the shareholder in the capital of "The Company, Limited," a company duly incorporated under The Companies Act, such shares being numbered to inclusive in the books of the company, and the shareholder is registered as the holder thereof, and that the mortgagee shall be entitled to retain and hold the share certificates for the said shares. FOURTHLY. That all moneys payable in respect of the said shares have been duly paid to the company, and his certificates for the said shares are not void nor voidable, nor are the shares liable to forfeiture. FIFTHLY. That the shareholder will at all times duly and punctually pay all calls and other moneys which may at any time hereafter become due to the company in respect of the said shares, and if the shareholder shall at any time become indebted to the company so that the company would, either notwithstanding this mortgage or but for this mortgage, have a lien on the said shares in respect of such indebtedness, he (the shareholder) will forthwith pay and discharge such indebtedness to the company, and will do no act whereby the said shares may be rendered liable to forfeiture, and will not omit to do any act or to pay any sum of money necessary to keep the shareholder's title to said shares unaffected, good, valid, and subsisting. SIXTHLY. That it shall be lawful for but not obligatory upon the mortgagee to do any act or pay any sum of money necessary, or which may in the opinion of the mortgagee be necessary or expedient, to protect the title of the shareholder or of the mortgagee to the said shares, and the shareholder will repay to the mortgagee all moneys paid and all expenses incurred by him accordingly, and the same shall be added to and become part of the principal sum hereby secured, and shall bear interest accordingly as from the date or dates of such payment. SEVENTHLY. That in consideration of the premises the shareholder doth hereby irrevocably (while any moneys shall remain due and owing on the security of, these presents) nominate, constitute, and appoint the mortgagee or, in case of his death, his executors or administrators, and in case of his assigning his security the assignee or assignees thereof to be the attorney and attorneys of him (the shareholder) for the purpose of receiving from the company all dividends, bonuses, and income which may at any time hereafter be payable or paid in respect of the said shares, and for the purpose of transferring the said shares or any parcel or parcels thereof to any person or persons either on a sale thereof or to hold the same for the mortgagee or otherwise, and that the production of these presents by the mortgagee shall be sufficient authority to the company to pay such dividends, bonuses, and income or to register any transfer or Mortgage of Shares. transfers of the said shares or any parcel or parcels thereof, and that, as Part II. between the shareholder and the company, the company shall not be Chap. 2. bound to enquire if or require proof that any moneys remain due and owing on these presents before paying any such dividends, bonuses, or income or approving and registering such transfer or transfers. EIGHTHLY. That in case default shall be made by the shareholder in the payment of any moneys hereby secured or in the performance or observance of any covenant, condition, or agreement herein expressed or implied, it shall be lawful for the mortgagee, without waiting any period or time after such default or allowing such default to continue, and without giving any notice whatever to the shareholder, to sell and dispose of the said shares or any parcel or parcels thereof by public auction or private contract, and subject or not to any special conditions, and the mortgagee shall have power to buy in at any such sale and resell, and may vary or rescind any contract for sale without being responsible for any consequent loss, and no purchaser shall be bound to enquire as to the propriety or regularity of such sale or sales or be affected by express knowledge or notice that the same are improper or irregular, nor shall any purchaser be bound to see to the application of the purchase-money. AND that all moneys to be received by the mortgagee, whether by way of dividends, bonuses, or income from the said shares or as the proceeds of any such sale, shall be applied, firstly, in paying all costs and expenses incurred in and about the exercise of the powers hereby given; secondly, in paying all principal, interest, and other moneys hereby secured, and the balance (if any) shall be paid to the shareholder, and that the mortgagee shall not be liable for any involuntary losses which may happen in or about the exercise of the power of sale or any of the other powers hereby conferred. AND THE MORTGAGEE doth hereby covenant with the shareholder that if and so long as the shareholder shall duly and punctually pay the said interest and perform and observe the covenants herein contained on his part other than the covenants for the payment of the said principal sum on the day of next, the mortgagee will not exercise the power of sale hereby conferred before the day of 19 unless in his opinion the shares hereby mortgaged are likely to fall in value. IN WITNESS, &c. CHAPTER III. Register of Members and Rectification of Part II. Register of members. Contents of register. List. Register of Members. EVERY company is required to keep in one or more books a register of its members (Sec. 100 of 1903) at the registered office of the company (Sec. 104 of 1903). The register of members shall be prima facie evidence of any matters directed or authorised by the Companies Act to be inserted therein (Sec. 109 of 1903). The following are the matters required by the Act to be entered in the register: 1. The names and addresses and the occupations (if any) of the members of the company. 2. A statement of the shares or (where the company has divided any portion of its capital into stock) the amount of stock held by each member (Sec. 41 of 1903), distinguishing each share by its number and of the amount paid or agreed to be considered as paid on the shares of each member. 3. The date at which the name of any person was entered in the register as a member. 4. The date at which any person ceased to be a member. In a separate part of the register there shall be contained a list and summary specifying the following particulars respectively: List. 1. A list of all persons who are members of the company on the fourteenth day succeeding the day on which the ordinary general meeting is held, or, if there is more than one ordinary general meeting in each year, then on the fourteenth day after the first of such meetings. Such list shall state the names, addresses and occupations of all the members therein mentioned, and the number of shares held by each of them. Summary. Summary. 2. The amount of the capital of the company and the number of shares into which it is divided (Sec. 101 (1) (a) of 1903). Register of Members. 3. The number of shares taken from the commencement of the com- Part II. pany up to the date of the summary, distinguishing between (a) The shares issued for cash; (b) The shares issued otherwise than for cash; or (c) Only partly for cash. 4. The amount of calls made on each share. 5. The total amount of calls received. 6. The total amount of calls unpaid. 7. The total amount of shares forfeited. 8. The names, addresses and occupations of the persons who have ceased to be members since the last list was made, and the number of shares held by each of them. 9. The total amount of debt due from the company in respect of all mortgages required to be registered under the Act. 10. The names, addresses, and occupations of every person who is a director or manager of the company at the date of the summary. The list and summary shall be prepared once at least in every year, and shall be completed within twenty-one days after the annual meeting, and shall be signed by the manager or by the secretary of the company, and a copy shall forthwith be forwarded to the Registrar. As to information to be given where shares have been converted into stock, see Sec. 41 of 1903. No notice of any trust, express, implied, or constructive, shall be entered on the register or be receivable by the Registrar (Sec. 103 of 1903). Rectification of Register. 1. If the name of any person is, without sufficient cause, entered in or omitted from the register of members; or, 2. If default is made or unnecessary delay takes place in entering on the register the fact of any member having ceased to be a member of the company, the person or member aggrieved, or any member of the company, or the company itself, may apply to the Court for an order that the register be rectified. "Without Sufficient Cause." Chap. 3. No notice of entered. trust to be ا ارت In Ex p. Ward L.R. 3 Ex. 180, Kelly, C. B., said (p. Without 181): "If he had been induced by fraudulent misstatements or fraudulent suppression to become a member, and thereupon his name had been entered on the register, that entry would have been without sufficient cause." sufficient Part II. Where transaction cannot stand. Right to rescind. When right barred. Before winding-up. Shareholder cannot sue company for tation. Rectification of Register. "If there is a fraud, or if the transaction is such that it cannot stand, the name is on the register without sufficient cause" Ex p. Kintrea, 5 Ch. 95, per Sir G. M. Giffard, L.J., at p. 99. See also Jackson's case, 6 N.Z. 549, where a name had been entered on the register in pursuance of an amalgamation. declared ultra vires. Whenever a person has contracted to take shares under circumstances which would entitle him to rescind the contract, and his name is entered on the register, it is so entered "without sufficient cause," and he may, if he comes within a reasonable time after discovery of the ground for rescission, have his name. removed from the register, provided he commences proceedings while the company is a going concern and before it stops payment, or before proceedings are in course to have the company wound up Tennent v. City of Glasgow Bank, 4 A.C. 615; Oakes v. Turquand, L.R. 2 H.L. 325; Scottish Petroleum Co., 23 C.D. 413. But see Whiteley's case, 1900, 1 Ch. 365, where a shareholder obtained leave to defend an action for calls on the ground that he intended to counter-claim for rescission, and this occurred before the presentation of a winding-up petition, but the counter-claim was delivered after the petition and before the winding-up order was made, and was held not too late to apply for relief. It must be borne in mind that a shareholder retaining his shares cannot bring an action against the company for misrepresentations by which he was induced to take them, and the same misrepresen principles apply to breach of contract by the company, as, for instance, where a company contracted to issue shares fully paidup and the shares issued rendered the holder liable to pay their nominal amount in full, the shareholder, retaining his shares, could not bring an action against the company for damages for breach of contract, nor prove for such damages in a winding-up: Houldsworth v. City of Glasgow Bank, 5 A.C. 317; Addlestone Linoleum Co., 37 C.D. 191. A contract may be rescinded if it has been induced by an Innocent mis- innocent misrepresentation, or by a material suppressio veri : New Brunswick &c. v. Conybeare, 9 H.L.C. 724. representation Grounds for rescission. In Lynde v. Anglo-Italian &c. Co., 1896, 1 Ch. 178, Romer, J., said (p. 182) :— "It appears to me that, speaking generally, to make a company liable for misrepresentations inducing a contract to take shares from it, |