such incorporation it shall be sufficient in any such act 8 & 9 VICT. c. 16. to enact that the clauses and provisions of this act, with respect to the matter so proposed to be incorporated, (describing such matter as it is described in this act in the words introductory to the enactment with respect to such matter,) shall be incorporated with such act; and thereupon all the clauses and provisions of this act with respect to the matter so incorporated shall, save so far as they shall be expressly varied or excepted by such act, form part of such act, and such act shall be construed as if the substance of such clauses and provisions were set forth therein with reference to the matter to which such act shall relate. amendment and (a) Upon the effect of the incorporation of this Act in Amend- Incorporation in ment and Extension Acts, see the notes to s. 5 of the Lands Clauses extension acts. Act, post. DISTRIBUTION OF CAPITAL. And with respect to the distribution of the capital of Distribution of the company into shares, be it enacted as follows: capital. divided into VI. The capital of the company shall be divided into Capital to be shares of the prescribed number and amount (a); and shares. such shares shall be numbered in arithmetical progression (b), beginning with number one; and every such share shall be distinguished by its appropriate number. (a) As to the creation of shares for raising additional capital, Additional see ss. 56-66, post, and also Companies Clauses Act, 1863, (26 & capital. Creation of pre27 Vict. c. 118, Part II.) It seems doubtful whether, without ference shares by express parliamentary enactment, that is, by the mere resolution resolution. of the company, it is lawful to create preference shares, or to convert the original shares of the company into half shares, a portion of which should bear a preferential or guaranteed dividend: (Sturge v. Eastern Union Railway Co., 7 De G. M. & G. 158, 175; Matthews v. Great Northern Railway Co., 28 L. J. (Ch.) 375; Fielden v. Lancashire and Yorkshire Railway Co., 2 De G. & Sm. 531.) amount. It seems that at law, if the prescribed number of shares have Unauthorised been issued, any additional and unauthorised issue would be illegal, issue beyond prescribed and no action for non-registration of such shares would be maintainable (Daly v. Thompson, 10 M. & W. 309.) But, if by enactment subsequent to the issue of such shares, their Recognition by existence is virtually recognised by Parliament, the defect, if any, or previously subsequent act would, it appears, be cured: (Ibid. See notes to s. 120, post, p. 110.) created capital. If there be nothing in the special act which prevents the com- Alteration of pany from altering the amount of the shares, they may from time to amount of each time do so: (Ambergate Railway Co. v. Mitchell, 6 R. C. 235.) It was decided in the case of Irish Peat Co. v. Phillips, 30 L. J. (Q. B.) 114; 9 W. R. 416, following the case of Wolverhampton New share. 8 & 9 VICT. c. 16. Numbered in arithmetic pro gression. Waterworks Co. v. Hawksford, 7 C. B. N. S. 795; 29 L. J. (C. P.) 121, that the fact that the shares which had been allotted to a defendant had not been specifically numbered and appropriated, was a bar to an action for calls. Some doubt, however, appears to have existed in the minds of some of the judges on the point, when the case afterwards came before them in the Exch. Chamber, (30 L. J. (Q. B.) 363); and in a very recent case, East Gloucestershire Railway Co. Merely directory. v. Bartholomew, L. R. 3 Exch. 15, it was decided, that this provision was directory merely; and if proof of the defendant's being a shareholder can be given aliunde, it is no objection to the reception of the register in evidence that it has not been complied with. See note to s. 28, post. Proof of ownership aliuntle. Shares to be per VII. All shares in the undertaking shall be personal sonal estate (a), estate, and transmissible as such, and shall not be of the nature of real estate (b). Statute of Factors Act. Bail. Canal shares. Railway and within Statute of Mortmain. National Debt (a) Railway shares are not "an interest in land," nor "goods and merchandise," within the Statute of Frauds, (29 Car. I. c. 3): Humble v. Mitchell, 2 R. C. 70; 11 A. & E. 205; Tempest v. Kilner, 3 C. B. 249; Bradley v. Holdsworth, 3 M. & W. 422; Duncuft v. Albrecht, 12 Sim. 189. Nor are they goods within the Factors Act, (5 and 6 Vict. c. 39) : Freeman v. Appleyard, 32 L. J. (Exch.) 175; 11 W. R. 175; 7 L. T. N. S. 282. They are property in respect of which bail may justify: Pierpoint v. Brewer, 15 M. & W. 201; 3 D. & L. 487. Canal shares in one case were held to pass to the assignees of a bankrupt as personal estate : (Ex parte Lancaster Canal Co., 1 Dea. & Chit. 411.) (b) Shares in railway and canal companies, as well as in companies canal shares not authorised to acquire and hold land, are not within the Statute of Mortmain, (9 Géo. II. c. 36 :) Myers v. Perigal, 2 De G. M. & G. 599; 16 Sim. 533; 11 C. B. 90; 21 L. J. (C. P.) 217; 16 Jur. 1118; Walker v. Milne, 11 Bea. 507; 18 L. J. (Ch.) 288; Thornton v. Ellis, 21 L. J. (Ch.) 714; Thompson v. Thompson, 1 Coll. 381; and see Gift of shares to Entwistle v. Daviş, L. R. 4 Eq. 272. In Ashton v. Lord Langdale, (20 L. J. (Ch.) 234; 4 De G. & Sin. 402,) it was held that a gift of such shares could be made by will to the National Debt Commissioners; and in Sparling v. Parker (9 Bea. 450; 16 L. J. (Ch.) 57) the same rule was applied to a bequest of shares to " poor persons." A case Where line is in where a company leased their line to another company at an annual rent, secured by a power of re-entry, with an option of purchase by the lessees, did not form an exception to the above rule: (Taylor v. Linley, 2 De G. F. & J. 84; 1 Giff. 67.) Commissioners. To "poor persous." lease. Absence of clause that shares should be perSonalty. No distinction was made in respect of shares in a company whose act contained no clause declaring that the shares should be personal estate (Edwards v. Hall, 6 De G. M. & G. 74.*) * The Lord Chancellor in this case overruled the decision of the Master of the Rolls in Ware v. Cumberlege, (20 Bea. 503; 24 L. J. (Ch,) 630,) which decided that shares in the Grand Junction Waterworks Company were an exception to the rule. See also upon this subject, Morris v. Glyn, 27 Bea. 218; Hayter 8 & 9 VICT. c. 16. v. Tucker, 4 K. & J. 243; Jarman on Wills, 3d ed. vol. i. p. 201, et seq. By 23 & 24 Vict. c. 111, a note or memorandum or writing, com- Stamp. monly called a contract note, or by whatever name the same may be designated, for or relating to the sale or purchase of any government or other public stocks, funds, or securities, or any share or shares of or in any joint-stock or other public company, to the amount or value of £5 or upwards, must bear a penny stamp. VIII. Every person who shall have subscribed the pre- Shareholders. scribed sum or upwards to the capital of the company, or shall otherwise have become entitled to a share in the company, and whose name shall have been entered on the register of shareholders hereinafter mentioned, shall be deemed a shareholder of the company. (a) By the 21st section the term shareholder extends to and Shareholder. includes the legal personal representative of a shareholder. As to the liability of infant and lunatic shareholders, executors, &c., see note to s. 21, post. shares in order to file a bill, As to the right of a person having but a small interest in the Purchase of company, or an interest acquired for the purpose to file a bill on behalf of himself and all other the shareholders in the company, in order to impeach the conduct of the directors, see post, the notes to s. 90. shares in order The Court will not refuse relief on the ground that shares were Purchase of bought in order to enable the purchaser to attend a general meeting to attend general of the company, at which the acts of the directors were to be called meeting. into question: Exeter and Crediton Railway Co. v. Buller, 5 R. C. 211; 16 L. J. (Ch.) 449; Seaton v. Grant, L. R. 2 Ch. App. 459. shareholders. IX. The company shall (a) keep a book (b) to be called Registry of the "Register of Shareholders;" and in such book shall be fairly and distinctly entered, from time to time, the names of the several corporations, and the names and additions (c) of the several persons entitled to shares in the company, together with the number (d) of shares to which such shareholders shall be respectively entitled, distinguishing each share by its number, and the amount of the subscriptions paid on such shares, and the surnames or corporate names of the said shareholders shall be placed in alphabetical order; and such book shall be authenticated by the common seal (e) of the company being affixed thereto; and such authentication shall take place at the first ordinary meeting, or at the next subsequent meeting of the company, and so from time to time at each ordinary meeting of the company (ƒ). 8 & 9 VICT. c. 16. (a) It was formerly held, in cases arising under special acts conCases in which taining sections similar to this section, that the provisions thereby this section held enacted were merely directory. directory. (b) Thus, it has been said that a register containing mistakes Errors in register" may be said to be in substance the book directed to be kept," if bona fide kept, (Southampton Dock Co. v. Richards, 1 M. & G. 448, 461; 2 R. C. 215.) book. Names and additions of shareholders. Number and amount of subscriptions. (c) The requirements with respect to the names and additions of the shareholders, (London and Brighton Railway Co. v. Fairclough, 2 M. & G. 674; 2 R. C. 544); (d) the number of shares and amount of subscriptions paid on them, (Birmingham, Bristol, and Thames Railway Co. v. Locke, 1 Q. B. 256); (e) the authentication of all the entries by seal, (London Grand Junction Railway Co. v. Freeman, Time of sealing. 2 M. & G. 606; 2 R. C. 468); (f) and the time of sealing the register, (Wolverhampton New Waterworks Co. v. Hawksford, 11 C. B. N. S. 456; 31 L. J. (C. P.) 184; 10 W. R. 153,) have all been held to be directory merely. Seal. Register in The fact that the register is contained in several volumes, to several volumes. the last of which only the common seal was affixed, did not prevent its being received in evidence: (Inglis v. Great Northern Railway Co., 1 M'Q. 112.) Insertion of So also where the register contained the names of persons not names of persons entitled to shares, the register was held not to be thereby invalinot being share- dated: (London Grand Junction Railway Co. v. Freeman, 2 M. & G. 606; 2 R. C. 468.) holders. Mode of keeping register. Cases in which section not held merely directory. Amount paid up on shares to be shown. Rectification of register. Seal improperly affixed. Addresses of shareholders (a) The register would not be invalidated by being called "Register of Proprietors" instead of "Register of Shareholders;" nor by each share not being distinguished by its particular number; nor, probably, by a lump sum being placed after the numbers of the shares as the amount paid up on the whole amount of such shares: (Bain v. Whitehaven and Furness Railway Co., 3 H. L. Cases, 1.) But the principle of the above decisions does not appear to have been fully supported. Since the company has, under this section, the privilege of making evidence for itself under s. 28 of the Companies Clauses Act, (see post,) it was held that the provisions of this section must be strictly complied with, and are not to be looked upon as merely directory for the purposes of that section; the register must, therefore, show distinctly the amount of subscriptions paid up on the shares held by each shareholder: (Bain v. Whitehaven, &c., R. C. 3 H. L. 1); see, however, East Gloucestershire Railway Co. v. Bartholomew, L. R. 3 Ex. 15, and post, the notes to s. 28. Where a person agrees to advance a sum of money upon the security of paid-up shares, the company cannot put his name on the register for shares not paid up, and the Court will, on his application, order the register to be rectified; (Ashworth v. Bristol and North Somersetshire Railway Co., 2 W. N. 30; 15 L. T. N. G. 561.) The Court of Queen's Bench have refused a mandamus to remove a seal improperly affixed to a register: (Ex parte Nash, 15 Q. B. 92; 19 L. J. (Q. B.) 296.) X. In addition to the said register of shareholders, the company shall provide a book, to be called the "Share Shareholders' Addresses-Share Certificates-Scrip. 9 holders' Address Book," in which the secretary shall from 8 & 9 VICT, C. 16. time to time enter in alphabetical order the corporate names and places of business of the several shareholders of the company, being corporations, and the surnames of the several other shareholders, with their respective christian names, places of abode, and descriptions, so far as the same shall be known to the company; and every shareholder, or if such shareholder be a corporation, the clerk or agent of such corporation, may at all convenient times peruse such book gratis, and may require a copy thereof or of any part thereof; and for every hundred words so required to be copied, the company may demand a sum not exceeding sixpence (b). (a) As to the provisions of this section, see London and Brighton Addresses. Railway Co. v. Fairclough, 2 M. & G. 674; 2 R. C. 544. (b) A mandamus will lie to inspect the register; and where the Mandamus to railway has been misdescribed in the writ the Court will amend inspect register. R. v. Derbyshire Junction Railway Co., 23 L. J. (Q. B.) 333; 3 E. & Misdescription of B. 784.) company in writ: leave to amend. shares to be XI. On demand of the holder of any share the company Certificates of shall cause a certificate of the proprietorship of such share issued to the to be delivered to such shareholder; and such certificate shareholders (a). shall have the common seal of the company affixed thereto; and such certificate shall specify the share in the undertaking to which such shareholder is entitled; and the same may be according to the form in the schedule (A.) to this act annexed, or to the like effect; and for such certificate the company may demand any sum not exceeding the prescribed amount, or if no amount be prescribed, then a sum not exceeding two shillings and sixpence. (a) Scrip certificates, or letters of allotment, although not men- Scrip certificates. tioned in this act, and although at law "a mere right to something which may hereafter exist, and the sale of them a mere assignment of a bargain," (per Parke B., in Knight v. Barber, 16 M. & W. 66,) holder. and though "the sale of such certificates does not constitute the Vendor of scrip vendee a shareholder in the company," (Midland Great Western Rail- not a shareway Co. v. Gordon, 16 M. & W. 804; 5 R. C. 76; 16 L. J. (Exch.) 166); yet since "such sale conveys to the vendee an equitable title to have Has certificate of the shares assigned to him, and his name entered on the register," proprietorship merely. ibid.); they have always possessed the character of certificates of proprietorship. Whatever may have been the doubts at the common law of the validity of their transfer by delivery merely, (see cases cited in London Grand Junction Railway Co. v. Freeman, 2 M. & G. 606; 2 Pass by delivery R. C. 468; and see also the judgment of Parke B., in Daly v. Thompson, 10 M. & W. 309,) it appears that there is no doubt only. |