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Preference Share-Promoters.

by which the fictitious stock was declared valid, and it was enacted, that the directors should apply a sum of 243,000l., which was applicable for profits up to December, 1856, in purchasing and cancelling stock equivalent to that which had been fraudulently created. It was then enacted that it should be lawful for the directors to apply the balance of the 243,000l., so far as the same would extend, in paying to the proprietors of the several classes of preference stock or shares the dividends to which they would have been entitled out of the said sum, if the same had been declared and apportioned as dividend, &c. The preference shareholders not having received the full amount of their dividends in 1856 claimed to be paid the deficiency out of the first half-year's profits in 1857; but this claim was resisted by the directors and the ordinary shareholders; and thereupon a bill was filed to obtain an injunction to restrain the declaration of a dividend on the ordinary stock, without regard to the prior right of the preference shareholders to be paid the full amount of their dividend, to be computed from June, 1856. Held (affirming the decision of one of the Vice-Chancellors), that the preference shareholders were entitled to the injunction, it being considered that the right of the preference shareholders was to have the full amount of their respective dividends before any payment in respect of dividends on the ordinary stock, and that the act of 1857 had not deprived them of that right. Henry v. Great Northern Railway Company, 27 L. J. 1, Ch., on appeal; 3 Jur. (N.S.) 1133.

Injunction to restrain application to legislature of foreign country.] A Company was formed in California for purposes connected with land in that country, but nearly all the shareholders were resident in England. A resolution was passed at a meeting of English shareholders, authorising the trustees to take steps for increasing the preference shares to an extent not allowed by the existing constitution of the Company. It appearing that there was no intention to create preference shares, except with the sanction of the Californian legislature: Held, that an injunction ought not to be granted to restrain the Company from acting on the resolution, for that the court will not in general restrain parties from applying to the legislature, whether of this or of a foreign country. Bill v. The Sierra Nevada Lake Water and Mining Company, 1 D. F. & J. 177, on appeal.

PROMOTERS.

Agreement by promoters-Subsequent adoption.] An agreement by the promoters of a Company prior to incorporation is not binding upon the Company unless such agreement is afterwards adopted. Williams v. St. George's Harbour Company, 3 Jur. (N.S.) 1,014, Ch. ; 30 L. T. 330.

Partnership.] The promoters of an abortive Company are not partners, even though they have bought property for the purposes of the Company. One of the promoters of an abortive Company will not be restrained from bringing an action for money advanced by him to the other promoters for the purposes of the Company. Hamilton v. Smith, 5 Jur. (N.S.) 32 Ch.; 32 L. T. 330.

Promoters-Registration.

Order for work.] A Company was projected for the filtration and supply of water. Whilst the bill for its formation was before a committee of the House of Commons, the engineer (upon the suggestion of counsel), employed a builder to erect a cistern for the purpose of testing the process of filtration (for which the engineer had obtained a patent). The defendant was a member of the provisional Committee, and the cistern was, with his assent, erected on land in his occupation. Held, no evidence to warrant a jury inferring that the order for the work was given by the defendant's authority, or that the work was done upon his credit. Patrick v. Reynolds, 1 Č. B. (N.S.) 727.

Insurance Company-Deed of settlement-Promotership deedDirectors, proposal to relieve, in respect of shares taken for purposes of registration Parties.] A. and B., the two principal defendants, by deed dated the 1st Nov. 1854, transferred to trustees their interest in leasehold property, and also the copyright of an unpublished book on life insurance, with a view to the formation of an Insurance Company, in consideration of 2,000l. A. subscribed for 25,000 shares, and paid the sum of 2501., part of the deposit, leaving 1,000l. due in respect thereof. B. subscribed for 30,000 shares, and paid the sum of 500%., part of the deposit, leaving 1,000l. due. The deed was duly adopted by an extraordinary general meeting of the shareholders; and the two sums of 1,000l. were paid to the defendants, and by them repaid in respect of their deposits. In March, 1856, the plaintiff became a shareholder and director of the Company, and shortly after, in Dec. 1856, at a board meeting, at which the plaintiff was present, a minute was entered, by which it was provided that the defendants A. and B. having surrendered all right to 20,000 shares held by them in order to effect the complete registration of the Company, they should be relieved from all responsibility in respect of such shares, and that the said shares should be transferred into the names of other directors. On the 24th April, 1858, after the bill was filed, this minute was adopted at a general meeting of the shareholders. The bill prayed for a declaration that the defendants A. and B. were liable to calls on the whole amount of the shares; and that the entry in the minute-book of Dec. 1856, might be declared to be fraudulent and void. Held, that the transaction carried out on the 24th April, 1858, was unimpeachable, either as contrary to the Act of Parliament, or the stipulations of the deed of settlement. Semble, that the transaction of Dec. 1856, if completed, would not have been sustainable, as its object was only to create a number of shares sufficient for the registration of the Company. Held, further, that there was nothing illegal in the provisions of the deed of Nov. 1854. Burt v. The British Nation Life Insurance Association, 5 Jur. (N.S.) 356, Ch. ; 33 L. T. 74.

See CONTRACT, DIRECTOR, SHAREHOLDER.

REGISTRATION.

Joint Stock Company-Statute 7 & 8 Vict. c. 110-RegistrationCompany established "for any purpose of profit."-A Company of more than twenty-five members was constituted by a deed of settle

Registration.

ment, which stated that the object of the Company was to enable each member to become the possessor of a freehold, copy hold, or leasehold house of a certain value, as tenant to the Company at a rent until its dissolution, and afterwards as absolute owner. The deed provided that the sum necessary for carrying the object of the Company into effect should be raised by the aid of monthly subscriptions and rents to be paid by members, and by the sale of superfluous houses and land, and by such other ways and means as thereinafter provided. The next clause of the deed stated that the business of the Company should be to take on lease or purchase certain land, and to erect houses thereon, and to take down and rebuild any existing houses on the land so taken or purchased, "and to make and sell bricks, and to purchase and sell all kinds of building materials, and to contract for and perform all kinds of work in the building business and in relation thereto." The deed enabled the Company to borrow money to be applied to building houses for the purposes of the society; and all moneys received from subscriptions or from any other source were to be paid to the bankers of the Company. There were provisions for the allotment of houses to members when a sufficient number for that purpose had been erected; and when every member had obtained a house answerable to the shares subscribed for, and all subscriptions, rents, and fines had been made good by the members, the Company was to be wound up and dissolved. Held, that this was not a Company established "for any purpose of profit," within the 7 & 8 Vict. c. 110, and, therefore, that it was not required to be registered under that act. Moore v. Rawlings, 28 L. J. 247, C.P.; 5 Jur. (N.S.) 941; 33 L. T. 205.

Rectification of register.] The power given to the court by the 25th section of the Joint Stock Companies Act, 1856, to order the register to be rectified was intended to avoid the inconvenience arising from capricious or frivolous objections on the part of the Company, but the court will not entertain such an application where there is an important question to be tried as to the right of the applicant to have the register rectified. Re British Sugar Refining Company, ex parte Faris, 26 L. J. 369, Ch.

Rectifying register by insertion of name of purchaser of shares at instance of seller.] The court refused to make an order, under the 19 & 20 Vict. c. 47, s. 23, on a Company to rectify its register, by inserting the name of a purchaser of shares, at the instance of the seller, pending an action by the Company against the seller for calls alleged to be due on the shares before the transfer. Ex parte Harris, re The Anglo-French Porcelain Company, 5 H. & N. 809; 29 L. J. 364, Ex.

Register of shareholders, what?] A book, purporting to be a register of shareholders, which was made up by the solicitor of a Company, by order of the board of directors, from papers and documents in the possession of the Company after the establishment was broken up and the Company virtually defunct, is a register within the meaning of the 16th section of the Joint Stock Companies Act,

Registration.

1856, and the fact that there are mistakes and omissions of dates therein will not alter the case. Where a Company had not provided any particular form for the acceptance of shares by the shareholders: Held, that the letter of application, inclosing the banker's receipt for the deposit money, and expressing a willingness on the part of the applicant to take the shares and pay the deposit and calls, &c., thereon, is a sufficient acceptance within table B., art. 1. of the Act of 1856. Re London, Harwich, and Continental Steam Packet Company (Limited), Greenfield's case, 30 L. T. 172, Bank.

Companies Clauses Consolidation Act-Time for making register.] In order to be a shareholder within the meaning of the 27th section of the Companies Clause Consolidation Act (8 & 9 Vict. c. 16), which defines the proof required in an action for calls, it is not necessary that the name of the holder of the shares should be on the register of shareholders, sealed at an ordinary meeting of the Company, but there must be a register, whether properly sealed or not, with the name of such holder inserted therein as the holder of shares numbered and specifically appropriated to him; and a sheet of paper containing a list of names, and sealed as a register of shareholders, but not having any of these essentials, is not a register within the meaning of the statute, and is, therefore, no evidence of proprietorship. The time within which a register of shareholders is directed, by the 8 & 9 Vict. c. 16, s. 9, to be made is not an essential condition, and therefore a register made after that time may be valid. The Wolverhampton New Waterworks Company v. Hawkesford, 29 L. J. 121, C.P.

Transfer of shares obtained by fraud-Rectifying register.] A holder of shares in a Joint Stock Company, by entrusting his broker with blank transfers signed by him, and affording him an opportunity of obtaining access to a box containing the certificates for the shares, enabled him by forgery and fraud to induce the Company to register the transfers of the shares in the names of bonâ fide purchasers. A motion under the 19 & 20 Vict. c. 47, s. 25, and 20 & 21 Vict. c. 14, 83. 8, 9, to rectify the register by replacing thereon the name of the original shareholder, failed; the court being equally divided :Erle, C.J., and Keating, J., holding that the applicant had precluded himself by his negligence from availing himself of the equitable jurisdiction of the court under the statutes; Willes, J., and Byles, J., holding that the property in the shares had not been changed by the forged transfers. Re the North British Australasian Company, ex parte Swan, 7 C. B. (N.S.) 400.

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Evidence of registration.] In an action against a Joint Stock Company for breach of contract to employ and pay for services, the certificates for shares issued under its seal are sufficient evidence as against the company that it is registered. Mostyn v. Calcott Hall Mining Company, 1 F. & F. 334, Willes, J.

See OFFICERS, Secretary.

Shares and Shareholder.

SHARES AND SHAREHOLDER.

I. WHO IS A SHAREHOLder.
II. BY OPERATION OF LAW.
III. RIGHTS OF SHAREHOLDERS.
IV. LIABILITIES OF SHAREHOLDERS.
V. TRANSFER OF SHARES.

VI. FORFEIture.

I. WHO IS A SHAREHOLDER.

Shares transferrable by delivery merely of certificates.] A Company whose shares were made transferable by delivering of the certificates, is not on that ground illegal by the common law; and the fact that the shares of such a Company formed before 7 & 8 Vict. c. 110, have become vested in other persons since the passing of that act does not make it subject to the provisions of that act. Aston's Case, re Mexican and South American Company, 4 De Gex & J. 320.

Shares Calls Complete contract.] The plaintiff's Company, having increased their capital by the issue of new shares, were applied to by the defendant, one of the shareholders who had signed the original articles of association, for an allotment of such new shares. The allotment was made, and the deposit thereon paid by the defendant, and his name was inserted on the register. The letter accepting the defendant's proposal for the shares stated, "that the banker's receipt must be exchanged, when required, for a share certificate under the seal of the Company, and the memorandum and articles of association must be signed by the allottee, or in default thereof the shares and deposit will be forfeited to the Company." The articles in respect of the new shares had not been signed, nor the shares forfeited: On demurrer to bill filed, praying that the defendant might be decreed to sign the articles and to pay certain calls which had become due: Held, that there was no binding or complete contract. The contract was one which, to the extent of the liability to execute the articles of association, this court would enforce if it were in other respects a binding contract. The Oriental Inland Steam Company v. Briggs, 8 Jur. (N.S.) 201, Ch.; 5 L. T. (N.S.) 477.

Signature of memorandum of association by subscriber before original signed or registered.] Under the Joint Stock Companies Act, 1856, a printed copy of the memorandum of association or articles of association may be signed by a subscriber before the original is signed or registered, in pursuance of the 3rd section of that act; and such signature of the subscriber is an authority for placing his name on the register of shareholders. Therefore, where a defendant, having applied for shares in a proposed Company and paid the deposit, signed a printed form of memorandum of association, and by the articles of association agreed to accept certain shares allotted to him; and some weeks afterwards the original

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