1 shares are often described as "uncalled capital," and, when pay- Chap. XVI. ment of them is demanded by the proper authority, as "calls." ' It sometimes happens that, when the shares are fully paid up, they are turned into "stock." The distinction between shares and "Stock." stock is that shares cannot be transferred in fractional parts, but stock can.s When the original shares in a company are subscribed, it is Scrip. the practice to issue to each subscriber documents called "scrip certificates," or, for brevity, "scrip," stating that he, or more commonly "the holder" of the scrip, is entitled to so many shares on which. have been paid. The scrip confers on the person named in it the right to acquire, but does not impose on him any obligation to accept the shares; and, as a general rule, the scripholder does not acquire the rights of a shareholder, until his scrip is exchanged for shares. In some few companies no shares are ever issued, and the scrip-holders are the shareholders. companies are called "scrip companies." "4 Such Prima facie scrip is not negotiable, but it may be proved to be negotiable by mercantile usage in any particular case; and, even if it is not, the true owner may by his own conduct preclude himself from denying that it is transferable by delivery to a bonâ fide holder for value." In the absence of any provision for management of a company's Management of companybusiness, it would seem that the majority of its shareholders must directors. determine how it is to be conducted; but it is generally provided that the management shall be entrusted to directors, who are the servants, not of individual shareholders, but of the company; they are not trustees for individual shareholders.8 A company which is neither incorporated nor privileged by the Crown or by statute is, as we have said, substantially a 1 See Lindley on Companies, Bk. III., Ch. 3, s. 2 (1), as to what is the proper authority; and Re Pyle Works, 44 Ch. D. 583, post, p. 283, that it is a matter to be regulated by the articles of association until there is a winding-up, when the liquidator is the person to make calls. • See Companies Clauses Consolidation Act, 1845 (8 & 9 Vict. c. 16), s. 61; Companies Act, 1862, s. 12. * See Morrice v. Aylmer, 10 Ch. 148; L. R. 7 H. L. 717. + Lindley on Companies, 84. See ante, p.168. Rumball v. Metro- Lindley on Companies, Bk. III., 7 Ib. As to the position and func- 8 Percival v. Wright, [1902] 2 Ch. 421. 9 I.e., companies formed under 7 Will. 4 & 1 Vict. c. 73. See post, P. 271. Chap. XVI. partnership; but an incorporated company is, in a legal point of view, distinct from its members, and its existence is not affected by changes among them. Cost-book companies. The history of the law relating to companies will be found in Lindley on Companies.1 We shall here confine our attention to(1) Cost-book mining companies; (2) Companies constituted by letters patent under the Chartered Companies Act, 1837; 2 (3) Companies regulated by a special Act of Parliament incorporating the Companies Clauses Consolidation Act, 1845;3 (4) Companies regulated by the Companies Acts, 1862 to 1900. 4 (1) Cost-book mining companies are partnerships, regulated by the general law of partnership except so far as that law is excluded by local custom, or by special agreement referring to and embody. ing such custom; and except that any partner may retire at any time upon the terms that, if the company is solvent, he is entitled to receive his share of the surplus left after deducting the liabilities from the assets, and that, if it is insolvent, he pays his share of the liabilities after deducting the assets. Formerly the liability of a shareholder who had retired to the creditors of the company was the same as if the company had been an ordinary partnership; but by the Stannaries Act, 1869,8 a part shareholder of a company working a mine within the Stannaries of Devon and Cornwall, and subject to the jurisdiction of the Court of, or within the cognizance of, the Vice-Warden, is not liable to contribute to the assets of the company if he ceased to be a shareholder two years before the mine ceased to be worked or before the date of the winding-up order. A cost-book company is formed by the agreement of the adventurers, who have undertaken to work a lode, to share the adventure in certain proportions. They have no fixed capital, and they 1 Introduction, p. 2. 27 Will. 4 & 1 Vict. c. 73. 38 & 9 Vict. c. 16. 4 Kittow v. Liskeard Union, L. R. 10 Q. B. 7. It follows that each shareholder is liable for all the debts of the company: Peel v. Thomas, 15 C. B. 714. 5 Lindley on Companies, Bk. I., Ch 4, class 1. 6 Re Frank Mills Mining Co., 23 Ch. D. 52; Re Prosper Co., 7 Ch. 286. 7 Tredwen v. Bourne, 6 M. & W. 461; 55 R. R. 689; Lanyon v. Smith, 3 B. & S. 938. 832 & 33 Vict. c. 19, s. 25. appoint an agent, called a purser, who manages the mine. The Chap. XVI. agreement, the receipts and expenditure in respect of the mine, the names of the shareholders, their accounts with the mine, and transfers of the shares, are entered in a book called the "cost-bock." The rules and regulations of the company (if any) formerly had to Stannaries be registered at the office of the registrar of the Court of the Vice- Court. Warden of the Stannaries. 'The Stannaries Court was abolished in 1896, and the jurisdiction transferred to the County Courts. Transfers of shares are usually effected by a document signed Transfer of by the transferor or transferee, by which the former acknowledges that he has made, and the latter that he has accepted, a transfer of the shares mentioned. This document is addressed to the purser, and on being sent to him is sufficient authority to him to register the transferee as a shareholder.3 shares in. A cost-book mining company may sue for unpaid calls in the Calls. name of the purser as nominal plaintiff for the company.* under the Act, 1837. (2) By an Act called the Chartered Companies Act, 1837,5 Companies power was given to the Crown to grant by letters patent "to any Chartered company or body of persons associated together for any trading Companies or other purposes whatsoever, and to the heirs, executors, administrators, and assigns of any such persons, although not incorporated by such letters patent, any privilege or privileges which, according to the rules of the common law, it would be competent to His Majesty, his heirs and successors, to grant to any such company or body of persons in and by any charter of incorporation." It was also provided that the letters patent so granted might declare that all suits and proceedings by or against the company should be carried on in the name of, or against one of, the two officers appointed to sue and be sued on behalf of the company; that the individual liability of members of the company might be limited by the letters patent to such extent per share as should be declared in the letters patent; that every such company should 1 32 & 33 Vict. c. 19, s. 9; as to the duty of the purser to make entries in the cost-book, see the Stannaries Act, 1887 (50 & 51 Vict. c. 43), s. 23. The office of the registrar has been abolished by order of the Board of Trade, March 22nd, 1897. See London Gazette, March 23rd, 1897, p. 1677. 2 Stannaries Court Act, 1896 (59 & 60 Viet. c. 45, s. 1), and order of the Lord Chap. XVI. be entered into by a deed of partnership or agreement in writing, in which the number of shares should be specified, also the names or styles of the company and of its members, its business, and the principal or only place of carrying it on; that, on the transfer by deed or writing of any share, notice in writing should be given to the company by the transferee; that no transferee should be entitled to recover any share in the profits until the transfer should be registered; that a person ceasing to be a member should continue liable as a member until a return of the transfer or other fact whereby he ceased to be a member should be registered; that judgments against the officer of the company might be enforced against past and present members, but, in case the liability of the members was restricted, only as against any member to the amount remaining unpaid on his share. (3) Where a company is incorporated by a special Act of Parliament, the members of the company are not partners, and their liability in respect of the debts of the company depends upon the provisions of the special Act. In the absence of express provision, as we have observed above, the members are not personally liable for the debts of the company, except in respect of moneys unpaid on their shares. It is the practice to incorporate the Companies Clauses Consolidation Acts, 1845 to 18897 (sometimes with variations or exceptions), in the special Act. The Companies Clauses Consolidation Act, 1845, assumes that the company is incorporated by a special Act by which the amount of nominal capital and the number and amounts of the shares are prescribed. The Act provides that the shares are to be numbered regularly from one upwards, so that each share shall be distinguished by its own number. The company is to keep a book called the "Register of Shareholders," authenticated by the common seal of the company, containing the names and additions of the shareholders, the number of shares to which each is entitled, the distinguishing numbers of the shares and the amount of the subscriptions paid on them.1 The register of share- Chap. XVI. holders is primâ facie evidence against a person registered in it as a shareholder that he is such in fact. On demand of any shareholder, and on payment of a small fee, the company is required to deliver to him a certificate of membership, which is prima facie evidence of his legals title to the shares mentioned in it. By issuing a certificate, the company may be estopped from denying the title of the person therein named to the shares.5 It should be observed that a person may be a shareholder Register not though his name be not on the register of shareholders, as where conclusive. the special Act names him as a director and requires each director to hold shares; and that if the name of a person is improperly put on the register, the onus lies on him of showing that he is not a shareholder, which he can do by showing that his name was placed on the register without his express or implied authority.7 On the one hand, a person who is bound to accept shares may be registered as a shareholder, and, on the other hand, a person whose name is registered as a shareholder does not become a shareholder unless he is also entitled to a share in the company.7 But, where a person has been put on the register, the company have no right to strike him off unless they can show proper grounds for so doing." 8 Where the register is incorrect, the company can be compelled by mandamus or injunction respectively to insert the name of a person who has a right to be on the register, 10 or to strike out the name of a person who has been improperly placed on it.11 shares. The shares are transferable by deed, which may be in the form Transfer of prescribed by the Act or to the like effect, and must be delivered to the secretary of the company,12 who keeps it and enters a memorial in a book called "the Register of Transfers."13 In 1 Act of 1845, s. 9. 2 Ib. s. 28. 3 Shropshire Union R. Co. v. Reg., L. R. 7 H. L. 496. Act of 1845, ss. 11, 12. Balkis Co. v. Tomkinson, [1891] 2 Q. B. 614; [1893] A. C. 396; post, p. 282. 6 Portal v. Emmens, 1 C. P. D. 201, 664; Isaacs' Case, [1892] 2 Ch. 158; see Wolverhampton Water Co. v. Hawkesford, 6 C. B. N. S. 336, 7 ib. 795, 11 ib. 456; Re S. London Fish Market Co., 39 Ch. D. 324, 337; post, p. 290. G.P.P. 7 Lindley on Companies, Bk. I., Ch. 2, s. 3. 8 Midland Great Western R. Co. v. Gordon, 16 M. & W. 804. 9 Ward v. S. E. R. Co., 2 E. & E. 812. 10 Reg. v. Shropshire Union R. Co., L. R. 8 Q. B. 420. 11 Eustace v. Dublin Trunk R. Co., 6 Eq. 182. 12 Nanney v. Morgan, 37 Ch. D. 346; Roots v. Williamson, 38 Ch. D. 485, 494. 13 Act of 1845, ss. 14, 15; Nanney v. Morgan, 37 Ch. D 346 18 |