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secret trust.

A mining company, the shares in which passed by delivery Colourable of the certificates, being in difficulties, a shareholder, who transferwas desirous of avoiding liability, delivered his shares to a broker, and shortly afterwards introduced him to P., who bought them at the market price, and paid for them by handing to the broker some bank shares standing in P.'s own name, which the broker sold, and, after retaining the price of the mining shares, handed over the balance to P. The certificates of the mining shares were at the same time delivered to P. A few days afterwards an order was made for winding-up the mining company. P. was a clerk in the employ of H., and upon investigation it turned out that the bank shares, though standing in P.'s name, belonged to H.: it was held, that the transfer of the mining shares to P. must be regarded as merely colourable, and that the name of H. must be retained on the list of contributories. Re the Mexican and South American Mining Company, Hyam's Case, 1 De G., F. & J. 75, on appeal. A holder of shares in a company transferred them to a person who was an attorney's clerk for an alleged consideration. On examination before Wood, V.-C. in chambers, the transferor declared he had given the shares to the transferee. No consideration money was in fact paid for them. The transferee swore that at the time he accepted the transfer he was not even aware in what company the shares were; that he was in the habit of signing transfers for the transferor without making inquiries about them. The certificates of transfer were left with the transferor: it was held, by the court of appeal, that the transfers were not bond fide, and the name of the transferor was ordered to be put upon the list of contributories. Re Esgair Mwyn Mining Company, Ex parte Alexander, 9 W. R. 410; 8 W. R. 660.

A proposal was made by a director of a company to his co-directors, that for the benefit of the company a certain number of shares should be taken by each, and by way of example, such director signed the deed for 2,000 shares. The proposal was not entered on the minutes, nor were any shares handed over or taken by the other directors, but his name was returned to the stamp office for the shares. Having ceased to be a director, and knowing the failing circumstances of the company, at his request the directors cancelled his shares it was held, that this was beyond the powers of the directors, as they had no power by the deed of settlement to cancel or diminish the capital, but only to forfeit the shares, and was a fraud on the part of the shareholder, who was held to be a contributory in respect of the cancelled shares. Richmond's Case and Painter's Case, 4 Kay & J. 305.

Under a written agreement between B. and two of the directors of a completely registered company, B. accepted paidup shares, which were declared to be transferable by delivery, and to entitle the holder to rank as a shareholder. The

Sale of shares.

agreement also provided that the shares might be held or disposed of by B. without his signing the deed of settlement of the company. There was no mala fides in the agreement, and B. neither executed the deed of settlement nor signed any transfer to himself of the shares, but the directors of the company, on its being wound-up, registered and returned him as a shareholder: it was held, that the agreement exceeded the power of the directors; that under the circumstances, B. might avail himself of its invalidity; and therefore that he was not liable as a contributory. Electric Telegraph Company of Ireland v. Bunn, 6 Jur. N. S. 1223; 29 L. J., Chanc. 918; 9 W. R. 43.

If the directors of a company take a transfer of the shares of a shareholder to a nominee to prevent an exposure of its affairs and the prosecution of a petition to wind-up the company it will not relieve the shareholder from his liabilities to the company, or prevent him on a winding-up order being obtained from being put upon the list of contributories to the company in respect. Ex parte Eyre, Re the Mitre Assurance Company, 31 L. J., Chanc. 640.

In order to constitute a valid sale of shares so as to entitle the vendor to have his name excluded from the list of contributories, though it is not necessary that the purchaser should be a person capable of meeting all demands that may be made upon him in respect of the shares, the transaction must be bona fide as between the vendor and purchaser. Re the Phoenix Life Assurance Company, Ex parte Hatton, 31 L. J., Chanc. 340; 10 W. R. 313.

A shareholder withdrew from a company in pursuance of various resolutions passed at several general and special meetings; he paid what was required of him and the company was subsequently remodelled; twelve years and five months afterwards the company was wound-up under an order of the court: it was decided on appeal by the Lords Justices, affirming the judgment of M. R., that the lapse of time and the subsequent acts of the company prevented any inquiry into the validity of the transaction, and that the retiring shareholder could not be placed on the list of contributories. Ex parte Brotherhood, Re the Agricultural Cattle Insurance Company, 31 L. J., Chanc. 861.

Where, by the rules of a mutual guarantee society, notice of the withdrawal of any of the members was required to be given, but no particular form of notice was required, nor was it stated to whom the notice should be given, a parol notice of withdrawal given by a member to the agent through whom the original contract with the society was made was sufficient. Re the Solvency Mutual Guarantee Society, Hawthorne's Case, 31 L. J., Chanc. 625.

A. agreed to sell his shares in a joint stock bank to B. at par, the shares to be transferred by A. to C., who was to hold

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the same as a trustee for B., but charged with purchasemoney and interest at 51. per cent. payable half yearly, until the principal was fully paid. C. agreed to hold the shares upon the trusts expressed. The shares afterwards were transferred by A. to C. by deed; but the deed of settlement required a notice of all proposed transfers to be left at the office of the directors, which was not done. The assignment not having been registered when the first dividend after the transfer became due, A. received it and retained the surplus after payment of the interest of the purchase money of the shares on account of another debt due to him by B. A subsequent dividend was received by C. and paid over by him to A., who appropriated it as he had done with the former dividend it was held, that A. had ceased to be the owner of the shares, and was not properly included in the list of contributories. Ex parte Scully, 6 Ir. Eq. R. 524.


A general meeting of shareholders of a mining company Relinquish(carried on on the cost-book principle) acting within the ment of scope of their authority, passed a resolution authorizing the committee of management to make an arrangement with the shareholders in arrear for calls, that on any shareholder in arrear surrendering to the committee the whole of his shares, he might be entitled to redeem within the month so many of his surrendered shares, which at 19s. per share (the amount of calls in arrear) would equal the amount paid by him provided the then call of 2s. per share were paid upon the shares when redeemed. In the month of January three of the shareholders executed a surrender of their shares to the committee in the usual form, and claimed to be entitled to the reduced number of shares upon payment of the call of 2s. per share. Nothing further was done either on the part of these shareholders or the company, but in May following the secretary wrote to them, stating that the number of their shares had been reduced, and requiring them to pay the call of 2s. and other calls since made. In answer to this letter one of the three shareholders wrote to the secretary stating that it would not be convenient for him to pay the calls upon the whole number of shares, and asking that the number might be reduced. The company was afterwards wound-up: it was held, that the transaction of January amounted to a relinquishment by the three shareholders of all their shares in the company, and that they ought not to be placed upon the list of contributories. It was held also, that the letter written by one of the shareholders was written in ignorance of his position, and did not alter the effect of the transaction of January. Re Bodmin United Mines, 3 Jur. N. S. 350, Ch.

A. was the holder of shares in a mining company established on the cost-book principle. In accordance with one of the rules of the company he gave notice in April, 1857,

to relinquish his shares, but he had not then paid all his arrears, and the purser declined to take the relinquishment. In May the arrears were paid, and on the 4th of June his solicitor applied to the purser to know why the name was retained on the list. On the 26th of June the company was registered as a limited company under the 19 & 20 Vict. c. 47, and A.'s name was then returned as a shareholder. The company being in July ordered to be wound-up, A.'s name was placed by the commissioner on the list of contributories. On appeal, it was considered that the proper course was for A. to apply to have his name removed from the list of shareholders, and the petition of appeal being agreed to be treated as such application, the name was removed from the list. Re Welsh Potosi Lead and Copper Mining Company, Ex parte Birch, 27 L. J., Bank. 4.

A. was holder of shares in a mining company established upon the cost-book principle. In October, 1856, it was determined by the shareholders to register the company as "limited," under the 19 & 20 Vict. c. 47, with a view to its being wound-up; but the registration was not effected until June, 1857. In January, 1857, A. sold his shares, and the transfer was completed, but his name was not returned as a shareholder on the company's being registered in June, 1857. In July the company was ordered to be wound-up: it was held, on appeal, that the holder's name was improperly placed on the list of contributories. Re Welsh Potosi Lead and Copper Mining Company (Limited), Ex parte Lofthouse, 27 L. J., Bank. 1.

By rule 27 of the cost-book, the interest of a shareholder, "who has transferred his shares in accordance with the company's rules," in such shares shall thereupon cease, and he or she shall be thereupon freed from all future liabilities in respect thereof. By sect. 62 of the Joint Stock Companies Act, 1856, a shareholder in a company, other than a limited company, who has ceased to be a shareholder for three years, and by sect. 63, a shareholder in a limited company who has respectively ceased to be a shareholder for one year prior to the commencement of the winding-up of the company, shall be deemed, for the purposes of contribution towards payment of the company's debts, &c., to be an existing shareholder, and be subject to the same liabilities to creditors as if he had not so ceased to be a shareholder. Where a shareholder had, within a year of the company being wound-up, transferred his shares, and the transfer had been accepted by the transferee, and his name duly registered in the cost-book of the company it was held, that he continued liable to the debts of the company incurred before the transfer, and that the circumstance that the company had since the transfer been registered under the Joint Stock Companies Act, 1856, as a

limited company, it having been previously other than a limited company, made no difference, except as to whether sect. 62 or 63 was to apply. It was held also, that the omis sion to enter the name of the transferor as well as of the transferee upon the list delivered to the registrar of Joint Stock Companies under sect. 111, will not, upon the construction of that and the 113th section, affect the liability of the transferor. Re Welsh Potosi Lead and Copper Mining Company, Limited, 29 L. J., Bank. 400.

shares in


A shareholder in a company carried on upon the cost-book Relinquishprinciple relinquished his shares, upon paying his propor- ment of tional portion of the liabilities of the company. All the formalities required for the relinquishment of such shares were regularly complied with and entered in the books of the company, and the correspondence was conducted with the purser, who fixed the amount to be paid by the shareholder, without the sanction of the managing committee: it was held, that the purser being the authorized officer of the company to conduct such transactions, the shareholder was exempted from liability in respect of any excess of power on the part of the purser, and upon the winding-up of the company it was ordered, that such shareholder should not be placed upon the list of contributories. Re the Wrysgan Slate Quarrying Company, Ex parte Birch, 28 L. J., Ch. 894.

The charter of a company empowered the directors to increase the capital by the issue of new shares of 100%. each, but not less than 10,000l. at a time; and it was provided, that the additional capital derived from such new shares should not be published and declared as a portion of the capital till the board of trade was satisfied that the whole amount of the increase of capital from time to time determined on had been subscribed for the shares issued, at least 50l. per share paid up, and a supplementary deed executed by the persons taking the shares. An issue of 2,000 new shares was determined upon, the subscribers to be entitled to 5l. per cent. interest on the sums paid by them until they had paid up 50l. per share, and afterwards to participate in dividends. A person took some of them, paid up 50%. per share, and executed a supplementary deed, obtained certificates of shares and received interest; but only a small part of the 2,000 shares was ever subscribed for, the sums received in respect of them were entered in the reports, under the head of liabilities: it was held, that he was a shareholder liable to be placed on the list of contributories, and not entitled to rank as a creditor for what he had paid. Re Royal British Bank, Mixer's Case, 4 De G. & J. 575.

One of the directors and promoters of a company took 500 Directorshares, in order to enable the company to be registered; calls forfeited were made on those shares, and at a meeting of the directors,


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