H.L. (Sc.) Nelson Mitchell v. City of Glasgow Bank. 1879 that there was no valid or effectual contract for the sale of the stock, the provision of Leeman's Act (30 Vict. c. 29) not being complied with; secondly, that, having regard to the facts of the stoppage and insolvency of the bank, the officials of the bank were neither bound nor entitled to alter the register of members as required by the appellant; and that, therefore, there was no default or unnecessary delay on their part, so as to bring the case within the 35th section of the Companies Act, 1862. The First Division of the Court of Session on the 21st of December, 1878, decided both the above points in favor of the respondents ('). On appeal, April 3. Mr. Higgins, Q.C., Mr. Balfour, and Mr. James Bryce, for the appellant, contended; the first question was whether there was here a solid and effectual contract for the sale of this stock, considering the statute 30 Vict. c. 29; and the second, whether there was default on the part of the company in refusing to complete the transfer. If the second question was decided against them, then the first was immaterial as far as regards creditors, though in any question inter socios which might hereafter arise they might have the right to indemnify if it was held to be a proper transaction. On the first point the words of the act which applied to the case were: "Or where there is no such register of shares or stock by distinguishing numbers, then unless such contract, agreement, or *other token shall set forth the [628 person or persons in whose name or names such shares, stock, or interest shall at the time of making such contract stand as the registered proprietor thereof in the books of such banking company. Assuming that the act required a contract, agreement, or token to be in writing, and held void any contract for the sale of stock except it were in writing, the appellant had complied with the act, for the contract notes were part of the agreement. The respondents were not correct in saying that the advice note sent to a seller by his broker intimating the sale was not a compliance with the act, and that such note was no part of the contract. Also the contract need not be on one document; several might constitute it. And it would be a compliance with the act, if in some document the name of the holder of the shares was set forth : see Leigh's Digest of the Law of Contracts, 1878, pp. 264, 265, (1) Court Sess. Cas., 4th Series, vol. vi, p. 420; Scot. Law Rep., vol. xvi, p. 155. 1879 Nelson Mitchell v. City of Glasgow Bank. H.L. (Sc.) also Gibson v. Holland ('). It made no difference that they had not after the name of the vendor the accompanying words: "that the person so set forth is the person in whose name the stock stands." In the Stamp Act, 41 Vict. c. 15, s. 26, see also 33 & 34 Vict. c. 97, s. 69, the advice note was fixed upon as the essence of the transaction and as the most important note in the transaction, to bear the stamp duty; and the advice notes here ought therefore to be resorted to, to show what the real transaction was. Then, alternatively, if the act did not require every contract to be in writing, according to the law of England and Scotland a valid contract might be effected for the sale of stock or shares in a bank without writing: Humble v. Mitchell ('); Duncuft v. Albrecht(); Bowlby v. Bell (). The verbal contract was made here the moment the broker called out on exchange that he accepted the stock of the selling broker. The act did not apply to this particular case; and ought not to be strained to make null and void a bona fide transaction, which the Legislature had never contemplated. On the second point there was nothing in the stoppage to prevent the mere ministerial act required of the directors in registering the transfer. 629] *The commencement of the winding-up was the event which fixed the register, and when a company had accepted a surrender-as this was in terms-perfectly bona fide, if the transaction was not completed before the winding-up, the seller, or the person who surrendered, could not be liable. The creditors could not object to the removal of the appellant's name, for he would be still liable as a past member. And the contributories could not complain, as it was simply carrying out a contract which the directors had entered into in exercise of their powers. There was nothing which could prevent the appellant from enforcing his contract with his socii, supposing the creditor's rights not prejudiced, as they were not. [They also commented on their printed papers: Stair's Instit., 4, 43, 4; Erskine, 4, 2, 20; Bell's Prin., ss. 89, 1338; Alison v. Fraser ('); Allan v. Gilchrist (*); Forbes_v. Caird (); Dickson on Evidence, vol. i, sects. 555-557; Nation's Case (); Shepherd's Case (°).] (1) Law Rep., 1 C. P., 1, p. 5. (2) 11 Ad. & Ell., 205. (3) 12 Sim., 189. (4) 3 Scott, C. B., 284. (5) 1868; Court Sess. Cas., 3d Series, vol. vii, p. 39. (6) 1875; Court Sess. Cas., 4th Series, vol. ii, p. 587. (7) 1877; Court Sess. Cas., 4th Series, vol. iv, p. 1141. (9) Law Rep., 3 Eq., 77. (*) Law Rep., 2 Eq., 564, and 2 Ch., 16. H.L. (Sc.) Nelson Mitchell v. City of Glasgow Bank. 1879 The Lords reserved judgment without calling upon Mr. Kay, Q.C., Mr. Benjamin, Q.C., Mr. Davey, Q.C., and Mr. Kinnear, who appeared for the respondents. The appellant subsequently presented further petitions to the House, praying to be heard further by counsel as to, tnter alia, a fact which had come to his knowledge after the argument. On the 20th of May, Mr. Higgins, Q.C., by the indulgence of the House, was further heard; and stated that the admissions between the parties were erroneous in stating that the whole sum of £2,500 was registered in the appellant's name on the 2d of October, whereas the transfers to the appellant of £500, part of the said sum, were not registered or recorded till some days after the 2d of October, the date of the stoppage. Counsel for the respondents agreeing to the proposed order, were not called upon to address the House. *EARL CAIRNS, L.C.: My Lords, the appellant in [630 this case sold on the Glasgow Stock Exchange certain stock belonging to him in the City of Glasgow Bank. The sales were made on the 28th and 30th of September, 1878, the settling day being the 16th of October. The brokers who bought, bought for the bank, and there is no doubt that the bank, who had authority to buy their own stock under their deed, were the purchasers. Before the settling day came, the bank, as your Lordships know, stopped payment. On the 16th of October a deed of transfer of the stock was tendered by the appellant to the bank, of course without any expectation of receiving from the bank the purchasemoney for the stock; the bank refused to accept or register the transfer, and the name of the appellant was put on the list of contributories. Two questions were raised in the appeal, first, whether there was a valid contract for the sale of the stock having regard to the provisions of 30 Vict. c. 29; and, secondly, was the company in default for not accepting and registering the transfer? The Court of Session has decided both points against the appellant. My Lords, on the first point, viz., the effect of 30 Vict. c. 29, I have not been satisfied by the arguments of the appellant, either during the first argument or during the further argument which has taken place to-day (20th May), that the decision of the Court of Session was erroneous; but it appears to me unnecessary to decide that question, because I have no doubt that on the second point this case is not materally distinguishable from those already decided by 1879 Nelson Mitchell v. City of Glasgow Bank. H.L. (Sc.) your Lordships, and that, for the same reasons which were given in them, it would have been improper for the bank to have accepted or registered the transfer on the 16th of October, and therefore that the name of the appellant rightly remains upon the register and was rightly included on the list of contributories. I propose to move in this case that the appeal be dismissed with costs. With regard to the suggestion now made that the admissions entered into between the parties are erroneous in stating that the whole sum of £2,500 stock was registered in the appellant's name on the 2d of October, whereas the transfers to the appellant of £500 part of the said sum were not 631] registered or recorded until *some days after the 20 of October, I express no opinion whatever as to what ought to be the consequence of that fact, if it be a fact; but your Lordships may perhaps be disposed to say that the dismis sal of this appeal should not prejudice any application which the appellant may make to the Court of Session on this score. LORD HATHERLEY, LORD O'HAGAN, LORD SELBORNE, LORD BLACKBURN, and LORD GORDON, concurred. Judgment:-Ordered and adjudged, that the said interlocutor of the Lords of Session in Scotland, of the first division, of the 21st of December, 1878, complained of in the said appeal, be, and the same is hereby affirmed, and that the said petition and appeal be, and the same is hereby dismissed this House, but without prejudice to any application which the appellant may be advised to make to the Court of Session to reduce the amount of stock (£2,500) in respect of which his name has been placed on the list of contributories on the ground now alleged in his petition to this House, presented on the 19th day of May instant, namely, that the transfers to the appellant of £500 part of the said amount were not, on the 2d of October, 1878, nor until some days afterwards, registered or recorded in the books of the company: And it is further ordered, that the appellant do pay or cause to be paid to the said respondents the costs incurred in respect of the said appeal. Lords' Journals, May 20, 1879. Agents for appellant: Grahames, Wardlaw & Currey. Agents for respondents: Martin & Leslie. H.L. (Sc.) Gillespie v. City of Glasgow Bank. 1879 [4 Appeal Cases, 632.] [HOUSE OF LORDS.] H.L. (Sc), July 1, 1879. *GILLESPIE and PATERSON, Appellants; CITY OF [632 GLASGOW BANK AND LIQUIDATORS, Respondents ('). Company-Winding-up-Stock in the Names of Partners for themselves" and the Survivor for behoof of the Firm"-Trustees-Joint and several Liability. For some years previous to 1878 A. and B. had carried on in partnership the business of law agents in Edinburgh. By contract of copartnership, executed in August and October, 1878, A. and B. on the narrative that the former partnership had ceased, agreed to continue the same, and to assume C. as a partner on the terms, inter alia, that the new firm should continue under the firm name of A. and B.; that the bank account should be kept in the name of the firm; and that A. and B. should supply the necessary capital required in equal proportions, either by holding bank stock in the name of the firm, or by advancing the requisite funds. Prior to the execution of this contract, but with a view to the arrangements of the new firm, £1,000 of stock of the City of Glasgow Bank, an unlimited joint stock company, was purchased by A. and B. who supplied the price in equal proportions. A transfer was taken in favor of A. & B., "and the survivor of them for behoof of the firm" of A. & B. A similar entry appeared in the register of members. C. was not aware of the terms of the contract, or a party to the transfer. The bank stopped payment, and the liquidators placed A. & B. individually on the list of contributories as holders of £1,000 of stock as "trustee for the firm" of A. & B. In an application inter alia to vary the list by deleting the words trustee for the firm" and to place A. & B. on the list as contributories each for a separate sum of £500: Held, affirming the decision of the court below, that a trust was created for the benefit of the partnership, and that as trustees A. and B. were jointly and severally liable for all calls in respect of the £1,000 of stock. APPEAL against a portion of an interlocutor of the first division of the Court of Session. The only question involved in the appeal was whether the appellants, John Gillespie and Thomas Paterson, writers to the signet in Edinburgh, were rightly entered in the list of contributories of the City of Glasgow Bank as joint holders of £1,000 of stock standing in their names; or whether they were entitled to be entered as contributories each for a separate sum of £500. *In winding up the bank, the liquidators found, [633 under date of the 12th of August, 1878, the following entry in the stock ledger and in the transfer register: "John Gillespie and Thomas Paterson, and the survivor of them, for behoof of the firm of Gillespie & Paterson, W.S.;" and the stock was entered, "By stock purchased from Alex. Tod, (1) Affiming 16 Scot. L. Repr., 473. |