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When shares

not in bankand disposi

rupt's order

tion.

tioner; but no notice was given to the company of the trust, nor did the bankrupt sign a written declaration of trust, until seven days before the fiat was issued: it was held, that the shares were in the order and disposition of the bankrupt, as reputed owner, and passed to his assignees. Ex parte Ord, 1 Dea. 166; 2 Mont. & A. 724. Where shares of a company stand in the name of the bankrupt, who is on all occasions the only apparent owner and has possession of the certificates, but the shares belong to another in whose favour there is a secret declaration of trust, the shares are in the bankrupt's reputed ownership. Knowledge by one of the directors and by the actuary that the shares were not the bankrupt's, is insufficient to prevent reputed ownership. Ex parte Watkins, 1 Dea. 131; 2 Mont. & A. 348; reversing S. C., 1 M. & A. 689; 4 Dea. & C. 87.

Shares will not be considered in the order and disposition of the bankrupt when he has parted with the possession of the certificates, and no transfer could be made without the authority of the parties for whose use the certificates had been deposited by the bankrupt. The bankrupt agreed with A., the managing director of a railway company, that certain shares belonging to the bankrupt should be a security for the payment of a bill accepted by A. for the accommodation of the bankrupt, which the bankrupt discounted with B., with whom the certificates of the shares were deposited; but no formal notice to the company was given of the transaction until four days before the fiat issued; nor was any transfer made of the shares in the books of the company, which were still standing in the bankrupt's name at the time of his bankruptcy. By the rules of the company no shares could be transferred without the consent of the directors; and A., as managing director, received all applications for the transfer of shares it was held that the shares were not in the order and disposition or reputed ownership of the bankrupt. Ex parte Harrison, 3 Deac. 185.

A railway act prescribed a form of instrument for the transfer of shares, and provided that a memorial of the transfer should be entered in the company's books, and that until such memorial should be made the purchaser should have no share in the undertaking. A shareholder in the railway borrowed money on a deposit of the certificates of his shares, with assignments executed by him, but with the name of the transferee left in blank, and the blanks are not filled up before the shareholder becomes bankrupt: it was held, that the depositary had a lien on the shares, and that the lien extended to sums paid by him in respect of calls. Ex parte Dobson, 2 Mont. D. & D. 685.

A transfer of shares in a joint stock company completely registered under 7 & 8 Vict. c. 110, was executed by a shareholder, a blank being left for the name of the transferee and for the date. On the day on which the transfer was executed

by the transferee, the assistant secretary certified on the transfer, on the application of the purchaser, that the certificates for the shares were at the company's office, the certificates not having yet been issued to the shareholders. Before the name of the purchaser was inserted in the transfer, the transferor became bankrupt. The assistant secretary of the company, in his evidence, said that after the certificate which he had made on the transfer, a transfer of the shares would not have been permitted except under the above transfer or upon the production of that transfer cancelled: it was held, by Stuart, V. C. that the shares were in the order and disposition of the transferor at the date of the bankruptcy; but upon appeal the Lord Chancellor reversed that decision upon the ground that the production of the deeds of transfer would have shown that the shares had been parted with or about to be parted with, and without the production of such deeds of transfer no alienation would have been permitted by the company, and as such deeds had been delivered over to a third party it was plain that the shares no longer remained in the bankrupt's order and disposition. Morris v. Cannon, 31 L. J., Ch. 425.

In order to take shares out of the order and disposition of a Notice of bankrupt shareholder who has deposited or mortgaged his transfer of shares requishares, notice thereof must be given to the company; Ex site. parte Littledale, 6 De G., M. & G. 714. Notice has been implied where all the parties were partners in the company, the shares of which were deposited; Ex parte Waitman, 1 Mont. & A. 364; but now see Thomas v. Speirs, 13 Sim. 496. The mortgagee of shares in a company must give notice of his incumbrance to the secretary, or his lien will be lost as against a subsequent purchaser for valuable consideration. Cumming v. Prescott, 2 Y. & Col. 488. Where the bankrupt, who was a director of a joint stock company, mortgaged his shares to secure an advance of money, but stipulated that no notice should be given of the transaction to the company, not wishing it to be known to his brother directors, and the mortgagee acceded to this stipulation, the shares were to be held to be in the order and disposition of the bankrupt, within the meaning of the Bankrupt Act. Ex parte Nutting, 2 Mont., D. & D. 302; see Ex parte Vallance, 2 Dea. 354. A bankrupt, whose wife, previously to her marriage was entitled to some shares in a gas company, which were still standing in her name, deposited the certificates with a banking company for the security of advances; but no notice was given to the gas company until after the act of bankruptcy: it was held, that the banking company were not entitled to those shares as against the creditors of the bankrupt. Ex parte Spencer, 1 Dea. 468. By a clause in the deed of settlement of a banking company, it was stipulated that the company should have a lien on the shares of such proprietors as were customers and indebted to the bank, and that no share

Public com

should be transferred without the consent of the directors; and an abstract of these provisions was indorsed on the certificate of the shares held by each proprietor. The bankrupt, at the time of his bankruptcy, was the owner of thirty of these shares, and had in his possession the certificates of ownership thus indorsed, being then largely indebted to the bank for advances. It was held, that these shares did not pass to the assignees under the clause of reputed ownership in the act 6 Geo. 4, c. 16, s. 72, which is the same as the 125th sect. of 12 & 13 Vict. c. 106, so as to defeat the lien of the bank, which had been provided for in the deed. Ex parte Plant, Re Butterworth, 4 Dea. & Ch. 160.

The bankrupt, on the 1st of March, deposited with the petitioner certificates of shares in a German mining company for securing a loan of money, with an agreement accompanying the deposit, by which he engaged to complete the transfer of the shares when required. The petitioner sealed up these documents in a packet, which she entrusted to the bankrupt to keep in his iron safe for better security, where the same remained until three weeks before the bankruptcy, when it was reclaimed by the petitioner. The bankrupt, long before his bankruptcy, told one of the directors of the company that he had deposited the certificates with the petitioner; and such director, on the morning of the 7th December, communicated that fact to the board of directors; and in the evening of that day the act of bankruptcy was committed. It was held, that the shares were not in the reputed ownership or in the order and disposition of the bankrupt at the time of his bankruptcy. Ex parte Richardson, 3 Dea. 496.

On a contract for the purchase of fifty shares in a mining company the vendor agreed to take acceptances of bills of exchange for the amount of the purchase-money. It ultimately turned out that the vendor only possessed nineteen shares. On the purchaser producing the transfer of the shares, the officer of the company refused to register on account of the discrepancies between the number of the shares named in the transfer and the number standing in the company's books in the name of the vendor. The contract remained uncompleted at the time of the bankruptcy of the vendor. The purchaser satisfied the bills of exchange at maturity. It was held by Mr. Commissioner Goulburn, that the shares were not in the bankrupt's order and disposition. Ex parte Rayner, Re Hommersham, 1 Bank. & Ins. R. 256.

It was said that, though a bankrupt may be up to his ears in insolvency, notice at any fractional period of the day on which the act of bankruptcy is committed is sufficient to take the case out of the clause of reputed ownership, if the notice be given before the act of bankruptcy is in fact committed. Per Sir G. Rose, Ex parte Richardson, 3 Dea. 506; see Garlick v. Sangster, 9 Bing. 46; Russell v. Ledsam, 14 M. & W. 582. All bodies politic and public companies incorporated or

Proof in Bankruptcy.

93

authorized to sue or bring actions, either by charter or act of pany may parliament, may prove by an agent, provided such agent prove in bankruptcy. shall, in his declaration, declare that he is such agent, and that he is authorized to make such proof; and such declaration, signed by such creditor and agent as aforesaid, shall be in such form as general orders shall direct. 24 & 25 Vict. c. 134, s. 144. See also 12 & 13 Vict. c. 10; c. 106, s. 164. The following is the form of declaration under section 144 of 24 & 25 Vict. c. 134, s. 144.

Declaration for Proof of Debt by Agent of Company incorporated, or authorized to sue and bring Actions.

In the Court of Bankruptcy, London. [Or," In the Court of Bankruptcy for the

In the matter of

trict at

."] bankrupt.

I, A. B., of , agent of

dis

being a public company incorporated [or authorized to sue and bring actions] and carrying on business at do solemnly declare that I am such agent, and duly authorized to make this proof, and that the statement of the debt [and of the account, if any] between the said company and the said bankrupt, hereunto annexed, is a full, true and complete* statement of account between the said company and the said bankrupt, and that it is within my own knowledge that the debt thereby appearing to be due from the estate of the said bankrupt to the said company was incurred on or before the [the date of the bankruptcy] and for the consideration therein stated, and that to the best of my knowledge and belief the said debt still remains unpaid and unsatisfied.

[blocks in formation]

day of

Signed, A. B.

Agent of the company above named.

186

[The declaration may be made before any court or person authorized to take affidavits, &c. in bankruptcy, under sect. 207 of the act 24 & 25 Vict. c. 134. See Shelford's Law of Bankruptcy, pp. 644-647 (3rd ed.).]

A member of a joint stock banking company kept an ac- Banking count with them as his bankers, and at the time of his bank- company. ruptcy was indebted to them in a large balance on such banking account, the company being also considerably indebted to various other persons: it was held, that the company had a right of proof against the bankrupt for the balance due on such banking account. Re Caldecott, Ex parte Da

• Any bills, notes or other securities held in respect of the debt must be set forth in the statement of account, and if there be any set-off, the balance only should be claimed.

Bankrupt's interest in joint stock company.

vidson, 2 M., D. & D. 368; 1 Ib. 648; see 7 Geo. 4, c. 46, s. 46; 1 & 2 Vict. c. 96, s. 1; 3 & 4 Vict. c. 111; Ex parte Wallis, 2 Mont., D. & D. 201. The secretary of a railway company, who had been reported by the commissioner to be indebted for deposits on shares, was allowed to prove, the assignees of the company being left to their legal remedies for establishing their claim against him as a shareholder. Ex parte Green, Re Tring, &c. Railway Company, 13 Jur. 275.

The official manager might prove against the estate of a bankrupt contributory. If the creditors of a company also proved, the dividends payable to the official manager were to go to such creditors. If any such creditor be the petitioning creditor, the dividends received by him are to be set against dividends payable to the official manager. Winding-up Act, 1849, 12 & 13 Vict. c. 108, s. 30.

By the Joint Stock Companies Winding-up Acts (7 & 8 Vict. c. 111; 11 & 12 Vict. c. 45; 12 & 13 Vict. c. 108), the general body of separate creditors of a bankrupt who happens to be a contributory to a joint stock company, which is made liable to those acts, are placed in a different position from the general separate creditors of any other person engaged in a mercantile partnership. A shareholder in a joint stock banking company became bankrupt. Afterwards an order for the winding-up the affairs of the banking company was made. Subsequently the bankrupt obtained his certificate, and his name was afterwards included in the list of contributories. On a call being afterwards made, the official manager, by the master's direction, applied to prove for the balance due from the bankrupt after debiting him with the call. It was held, that the proof ought to have been admitted. Ex parte Nicholas's Assignees, Re Monmouthshire and Glamorganshire Banking Company, 2 De G., M. & G. 271; 1 Ib., B. C. 143; 21 L. J., Bank. 64; 17 Jur. 6.

A shareholder in a joint stock banking company directed to be wound up under the Joint Stock Companies Windingup Act, 1848, had a call made on him in respect of his shares, and was shortly after made a bankrupt: it was held, that the official manager had a right to prove for the amount against his separate estate. Ex parte Brown, 13 Jur. 978; 19 L. J., Bank. 4; 3 De G. & S. 590.

A shareholder in a joint stock trading company became bankrupt; the joint stock company continued for a year subsequent to the bankruptcy to carry on its business and then stopped, and its affairs were then ordered to be wound up under the Winding-up Acts. By the company's deed of settlement the assignees of the bankrupt shareholder were authorized to sell his shares. The assignees of this bankrupt shareholder did not avail themselves of this provision. The master placed the names of the assignees upon the list of contributories as liable in respect of the bankrupt's estate up

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