Sect. 3. other names in their places. Such proceedings cannot be too Bk. I. Chap. 2. strongly reprobated (b). When once a person is registered as a shareholder, and his name has been since removed, the onus of justifying the removal is on the company; and it has been held, that even where his title is defective the company has no right to strike off his name unless his shares are claimed by a person establishing a better title to them (c). A company can however rectify its register in order to correct its own mistakes (d). from or insertion in register. proper exclusion A person entitled to be registered as a shareholder by a Actions for imcompany can maintain an action against the company, or those of its officers whose duty it is to register him as a share holder, if they wrongfully refuse to register him. In such an action it is no defence that the register is full, if it is so improperly (e): and if the plaintiff complains that, in consequence of his name not being registered, his shares have been forfeited without notice to him, it is no defence that the forfeiture is a mere nullity, and that the plaintiff has therefore sustained no damage (). In like manner a person who has transferred his shares is entitled to maintain an action for damages against a company for improperly refusing to register the name of his transferee (g). The principles on which these decisions are based are, it is conceived, sufficient to support an action for damages by a person improperly inserted in a company's register; but the writer is not aware of any case bearing directly on this point. It has been already seen that if a person is bound by agree- Right to register ment with a company to take shares in it, the company a person against is his will. entitled without more, to act on the agreement and to register him as a shareholder (h). (b) See the judgments in the 309. cases below. (c) See Ward v. South-E. Rail, Co., 2 E. & E. 812; Hart v. Frontino and Bolivia Mining Co., L. R. 5 Ex. 111. Compare Hare v. Lond. and North-W. Rail. Co., Johns. 722. (d) Hartley's case, 18 Eq. 542, and 10 Ch. 157; Re Etna Ins. Co., Ir. Rep. 7 Eq. 264. (e) Daly v. Thompson, 10 M. & W. (f) Catchpole v. Ambergate, &c., Rail. Co., 1 E. & B. 111. (g) Balkis Consolidated Co. V. Tomkinson [1893], A. C. 396, and other cases of that class cited p. 82, and Skinner v. City of London Marine Insurance Corporation, 14 Q. B. D. 882. (h) Ante, p. 63, 64. Bk. I. Chap. 2. Certificates of title. In addition to the evidence of membership obtainable from registers of shareholders, many companies are required by statute to give every shareholder, on demand, a sealed certificate of his ownership of the shares, to which he is entitled. The object of this is to enable a shareholder to prove that he is such; and particularly to enable him, upon a sale of his shares, to prove his title to them to the satisfaction of a purchaser, and to show how much has been paid up in respect of them (i). The company cannot dispute the truth of the certificate as against the person to whom it is issued if he has suffered loss by acting (k) or remaining inactive (1) on the faith of it, or as against a person who has bought on the faith of it (m). But there is no estoppel as against a person who knows that the certificate is untrue (n) except perhaps if he derives title through a purchaser without notice of the untruth (0). But the certificate applies only to the legal, not (i) See upon this subject, Hare v. Waring, 3 M. & W. 362; Curling v. Flight, 6 Ha. 41, and 2 Ph. 613; Shaw v. Fisher, 2 De G. & S. 11. (k) Balkis Consolidated Co. v. Tomkinson [1893], A. C. 396, affirming Tomkinson v. Balkis Consolidated Co. [1891], 2 Q. B. 614; Bloomenthal v. Ford [1897], A. C. 157, reversing Ex parte Bloomenthal [1896], 2 Ch. 525. (1) Dixon v. Kennaway & Co. [1900], 1 Ch. 833, distinguishing Simm v. Anglo-American Telegraph Co., 5 Q. B. D. 188, on the ground that in that case the transferee had conduced to the mistake by himself lodging with the company the forged transfer on the faith of which the certificate was issued. See also Parbury's case [1896], 1 Ch. 100. And as to estoppel by a letter accompanying the certificate see per Vaughan Williams Macdonald, Sons « C%. [1894], 1 Ch., p. 101. (m) See the following cases in which the company was estopped (1) from denying that the amount stated by the certificate to have been paid up was paid. Barrow's case, 14 Ch. D. 432; Burkinshaw v. Nicolls, 3 App. Ca. 1004, affirming British Farmers' Pure Linseed Cake Co., 7 Ch. D. 533; and compare the cases in the next two notes; (2) from denying the title of the person named in the certificate. In re Otto's Kopje Diamond Mines, Ld. [1893], 1 Ch. 618; Shaw v. Port Philip Gold Mining Co., 13 Q. B. D. 103; Bahia v. San Francisco Rail. Co., L. R. 3 Q. B. 584; Hart v. Frontino and Bolivia Mining Co., L. R. 5 Ex. 111; and compare Simm v. Anglo-American Telegraph Co., 5 Q. B. D. 188. (n) Ex parte Sandys, 42 Ch. D. 98; In re London Celluloid Co., 39 Ch. D. 190; and the judgment of Wright, J., in Markham and Dare's case [1899], 1 Ch. 414. (0) Compare Barrow's case, 14 Ch. D. 432, which was followed in Ex parte Sandys, 42 Ch. D. 98 (as to 150 shares repurchased), with In re London Celluloid Co., 39 C. D. Sect. 3. to the equitable title of the person named in it (p). No person Bk. I. Chap. 2. is entitled to demand a certificate of title to shares in a company until he has done everything necessary to constitute. himself a shareholder in the full sense of the word (q). A "certification" of shares must not be confused with a Certification. certificate; it is merely a representation that the certificate of the shares described in the transfer and other documents (if any) necessary to show the transferor's title have been lodged with the company, and it is not a representation as to the validity of the documents or of the transferor's title ('). Moreover, it has recently been decided by the House of Lords that a company is not estopped by a certification given by its secretary from showing that the certificate and the other documents were not in fact lodged with him (r). A person may be proved to be a member of a company by Admissions. his own admissions. Thus it has several times been held that a person who has admitted himself to be a shareholder in a company constituted by deed, may be rendered liable as a shareholder without any evidence being given as to that deed (s). Admissions, however, are not necessarily conclusive, and little weight ought to be attached to them if it is shown that they were made under erroneous suppositions (t). This seems to have been the true ground of the decision in the muchdebated case of Vice v. Anson (u). 190, and Simm v. Anglo-American Telegraph Co., 5 Q. B. D. 188. (p) Shropshire Union Rail, Co. v. R., L. R. 7 H. L. 496, reversing S. C. L. R. 8 Q. B. 420. (9) Wilkinson V. Anglo-Californian Gold Co., 18 Q. B. 728; Stewart v. Anglo-Californian Gold Co., ib. 736. (r) Bishop v. Balkis Consolidated Co., 25 Q. B. D. 512. (rr) George Whitechurch, Ld. v. Cavanagh, 17 Tim. L. R. 746. Semble, McKay's case [1896], 2 Ch. 757, must be treated as overruled, but notice that in the case before the House of Lords the secretary There the defendant supposed Vice v. Anson. was a party to the fraud. (8) Harvey v. Kay, 9 B. & C. 356; Ralph v. Harvey, 1 Q. B. 845; and see Tredwen v. Bourne, 6 M. & W. 461. (t) See Ridgway v. Philip, 1 Cr. M. & R. 415. (u) 7 B. & C. 409, and Moo. & M. 98. See, on this case, Owen v. Van Uster, 10 C. B. 318, and qu. if it is law; for though the defendant had no legal interest in the mine, was she not entitled as a partner to share the profits obtained by working the mine? and what more was necessary to make her liable to the supplier? Bk. I. Chap. 2. herself to be a shareholder in a mine; she had in private Sect. 3. letters and in private society written and spoken of herself as a shareholder; she had received certificates stating that her name was registered in the act-book of the mine, and that she was entitled to share the profits of it; and lastly, she had paid deposits on her shares. But Lord Tenterden held that she had not in point of fact any interest in the mine, and that as she never represented to the plaintiff that she was a shareholder therein, she could not be made liable to him simply because of her erroneous suppositions and admissions. Scrip. Scrip companies. Scripholders converted into shareholders. SECTION IV.-OF SCRIP. In order to enable persons who do not desire to become shareholders to acquire the right so to become and to transfer that right to others, recourse is had to what are called scrip certificates. A scrip certificate is an acknowledgment by a company or its projectors that the person named in the certificate (or more commonly the holder) is entitled to a certain specified number of shares in the undertaking. The certificate represents a right to acquire, but not necessarily an obligation to take a share (). The certificate must have a penny stamp (y). In some companies nothing is required to convert scripholders into shareholders. Companies constituted upon this principle are called scrip companies, and in them scrip and shares are synonymous, there being in fact no difference. between scripholders and shareholders (z). Usually, however, a person entitled to scrip does not acquire the rights of an actual shareholder until his scrip certificates have been delivered up and exchanged for share certificates, (x) Eustace v. Dublin Trunk Rail. a misdemeanour under 1 Wm. 4, c. 66. Compare 24 & 25 Vict. c. 98, § 23. (y) Stamp Act, 1891, 54 & 55 Vict. c. 39, schedule (z) As to the legality of scrip companies, see infra, ch. v. Sect. 4. nor until his name has been inserted upon the company's Bk. I. Chap. 2. register of shareholders. Generally speaking, after a company is formed, its scrip is called in; i.e., the holders of the scrip are required to exchange their certificates for share certificates, and to do whatever else may be necessary to render them members of the company, as distinguished from persons who have only a right to become members. In such cases as these, scripholders are not shareholders, nor are they partners either with each other or with the promoters of the company (a). This doctrine results from the distinction between agreements to form a future partnership and contracts for a present partnership (b); but as will be seen hereafter, it does not follow that a company which progresses no further than the issue of scrip cannot be wound up; nor that upon the winding up of such a company scripholders are not liable to be put upon the list of contributories (c). The effect of a transfer of scrip will be alluded to hereafter, Transfer of scrip. when treating of the transfer of shares. It may, however, be noticed here that scrip certificates to bearer have not yet been judicially treated as negotiable instruments; but if they are proved to be so by custom in this country () in any particular case, they cannot be recovered from a bona fide holder for value without notice of any infirmity in the title of the person from whom he has taken them (e). (a) See the cases in note (r), and Fox v. Frith, 1 Car. & M. 502. (b) As to which, see Partn., p. 15 et seq. (c) See, on this subject, Barclay's case, 26 Beav. 177; Re Aston, 27 ib. 474, and 4 De G. & J. 320; Grisewood and Smith's case, 4 De G. & J. 544, and the cases cited in note (r). (d) Picker v. London and County Banking Co., Ld., 18 Q. B. D. 515; negotiability abroad is not sufficient. (e) See Goodwin v. Robarts, 1 App. Cas. 476; a case of a foreign government loan. In Rumball v. Metropolitan Bank, 2 Q. B. D. 194, the scrip was that of a banking |