Page:Halsbury Laws of England v1 1907.pdf/858

 Bankees and Banking.

636 Sect.

18.

Securities for

Advances.

nature of the stock or shares. In order to avoid the danger of the person transferring being in a fiduciary position and not beneficial owner, it is essential that the banker should not only take the stock or shares bond fide and for value, but also acquire the legal estate

(i).

Where

Blank transfers.

stock or shares can only be transferred by deed(/c), a blank transfer will not carry the legal estate {I). Such a blank transfer may be validated by redelivery after the blanks are filled up, but an agent cannot effect such redelivery unless himself authorised bydeed(7?i)- Where the transfer is not necessarily by deed, a blank transfer operates as an authority to the transferee to fill up all necessary blanks, and, when so filled up, operates as an effective transfer without redelivery (n). But, to preclude the rights of third parties, the transfer must in its then condition purport to carry to any person taking it in good faith and for value a full

immediate and absolute Deposit of certificates.

Power

of

sale.

the subject-matter (o). share certificates only constitutes an equitable mortgage of the stock or shares which the Court will enforce by order for transfer and foreclosure (jo). Such remedy is not barred by reason of the debt not being recoverable by virtue of the Statute of Limitations {q). Where stock or shares have been effectually transferred to a banker as security, even though not by deed, he has an implied

The mere deposit

power

of sale

on

title to

of stock certificates or

default.

If

no time

is

fixed for

repayment, he

must

give the borrower reasonable notice of his intention to unless repaid. A month's notice would be sufficient (r). Kegistration.

sell

1283. In addition to actual transfer, registration is necessary to render the banker's title indefeasible or good against parties other (i) For the effect of notice on the legal estate, see Bank of Montreal v. Sweeny and contrast Bentinck v. London Joint Stock Bank, [1893] (1887), 56 L. T. 897 See, further, title Mortgage. 2 Ch. 120. {k) The Companies Act, 1862 (25 & 26 Vict. c. 89), s. 22, provides that transfer shall be in the manner provided by the regulations of the company. These may or may not provide that transfer shall be by cleed {Re Tahiti Cotton Go. (1873), L. E. 17 Eq. 273). The stock or shares of corporations governed by the Companies Clauses Consolidation Act, 1845 (8 & 9 Vict. c. 16), are only transferable by deed (s. 14). (/) HihUewUte v. McMorine (1840), 6 M. & W. 200 ; Swan v. North Britiah Australasian Co. (1863), 32 L. J. (ex.) 273 ; all know that both at common law and under these statutes, if you execute a transfer in blank, that instrument with the blanks is not a deed " {Powell v. London and Provincial Bank, [1893]

"We

2 Ch. 555,

jper

Lindley,

L.J., at p. 560).

See

titles

Companies



Deeds and

Documents. (m) Powell V, London and Provincial Bank, supra, at p. 565 ; Societe Generale de Paris v. Walker (1885), 11 App. Cas. 20. {n) Ireland v. Hart, [1902] 1 Cii. 522, 527. (o) Colonial Bank v. Cadij (1890), 15 App. Cas. 267. (p) Such certificates are not negotiable, and are merely evidence of the title as Their against the company of the specified person to whom they are issued. object is to facilitate dealings with the stock or shares, not to effectuate them. As to the remedy, see Harrold v. Plenty, [1901] 2 Ch. 314. The equitable mortgagee may obtain an injunction against transfer in fraud of his rights {Societe Generale de Paris v. Tramways Union Co., Ltd. (1884), 14 Q. B. D. 424, per Lindley, L.J., at J). 453). This decision was affirmed in Societe Generale de Paris v. Walker supra, but this particular point was not mentioned. {q) London and Midland Bank v. Mitchell, [1899] 2 Ch. 161. (r) Deuerges v. Sandeman, Clark dh Co., [1902] 1 Ch. 579.

.