cates and In France v. Clark, in 1884, the holder of shares in a Share certificompany deposited the certificates with C. as security for transfers. 1507., and executed a transfer with the transferee's name in blank. C. deposited the certificates and transfer as security for 2507. with D. After C.'s death, D. filled in his own name as transferee. Held that D. had no title to the shares beyond a claim for the 150l. advanced by C., and that the same principle would have applied even if the shares had been negotiable instruments.1 In London County Bank v. River Plate Bank, in 1887, share certificates of the Pennsylvania Railway with blank transfer forms indorsed on the back, were stolen by a bank manager and pledged with the plaintiffs for his private account. He afterwards obtained them back from the plaintiffs by fraud and restored them to his own bank. It was shown that these shares were treated as negotiable by delivery in the English market. Held that they were not negotiable instruments and that the pledgees (plaintiffs) had no title to them.2 In Sheffield v. London Joint Stock Bank, in 1888, ante, p. 316, share certificates, and other securities, some of which were clearly negotiable, were pledged with a money dealer and afterwards deposited by him with his bankers to secure a running account. The case turned on the point that the bankers knew that the securities were not the money dealer's own and is therefore not in point here. In Williams v. Colonial Bank, in 1888, the executors of a shareholder in a New York railway executed blank transfers which were indorsed on the back of the share certificates, and handed them to a broker for sale. The broker fraudulently pledged them with the bank for advances to himself. Held that the executors were entitled to have 1 France v. Clark (1884), 26 Ch. D. 257, C. A. 2 London and County Bank v. London and River Plate Bank (1887), 20 Q. B. D. 232. The case was appealed on another point as to negotiable bonds, and affirmed, 21 Q. B. D. 535, C. A. Share certifi- the certificates back from the bank. cates and transfers. Warranty "It is admitted," said Bowen, L.J., "that the certificates are not negotiable instruments according to English law. The broad principle is that, except in the case of a sale in market overt, a person does not acquire a title to a personal chattel from anybody except the true owner"; and, dealing with the question of estoppel, he points out that it must consist in some express or implied representation, and that in this case there was nothing on the face of the documents to suggest that the "bearer" would become entitled to the shares. The decision was affirmed in 1890 by the House of Lords under the name of Colonial Bank v. Cady, when it was held that as the dealings with the certificates took place in England the rights in respect of such dealings must be determined by English law, and that the conduct of the executors in delivering the certificates to their broker, with the transferee's name in blank, did not estop them from setting up their title against the bank. After distinguishing the case of negotiable instruments, Lord Herschell says "the question, what is necessary or effectual to transfer the shares in such a company, or to perfect the title to them, where there is or must be held to have been an intention to transfer them, must be answered by reference to the law of the State of New York. But the rights arising out of a transaction entered into by parties in this country, whether, for example, it operated to effect a binding sale or pledge as against the owner of the shares, must be determined by the law prevailing here." In the case of a bill or note payable to bearer the obligations of the transferor as regards its genuineness and his right to transfer are defined by sect. 58 (3) of the Act, ante, p. 195. In the case of other negotiable securities, the precise extent of the transferor's liabilities is not very clear. It seems that, as in the case of a sale of goods, 1 Williams v. Colonial Bank (1888), 38 Ch. D. 388, at p. 408, C. A. the seller warrants his right to sell, but it is doubtful whether the buyer is only entitled to a return of his money if the seller have no title, or whether he can sue for damages beyond. Where the buyer had bought forged scrip which the seller had sold in good faith it was held that he was only entitled to a return of the money he had paid.2 1 Raphael v. Burt (1884), 1 C. & E. 325 (United States "called bonds"). 2 Westropp v. Solomon (1849), 8 C. B. 345, see at p. 373; cf. Young v. Cole (1837), 3 Bing. N. C. 724 (Guatemala bonds); Lamert v. Heath (1846), 15 M. & W. 486 (railway scrip); Gompertz v. Bartlett (1853), 2 E. & B. 849 (foreign bill); Gurney v. Womersley (1854), 4 E. & B. 133, at p. 141 (bill with forged acceptance). £100 APPENDIX I. FORMS. No. 1.-INLAND BILL OF EXCHANGE. London, 1st January, 1887. Three months after date pay to our order the sum of one hundred pounds for value received. ANDREWS & Co. To Messrs. Brown & Sons, Liverpool. No. 2.-FOREIGN BILL OF EXCHANGE. No. 025. Exchange for £100. Calcutta, 1st January, 1882. Six months after sight of this first of Exchange (second and third unpaid), pay to the order of Mr. John Charles one hundred pounds, for value received, and charge the same to account of Messrs. Smith & Co. against your letter of credit, No. 21. To Mr. J. Brown, London. JAMES ANDRews. No. 015. No. 3.-FOREIGN BILL OF EXCHANGE. London, 1st February, 1882. For Rs. 550—8—0. At sixty days after sight of this first of Exchange (second and third unpaid), pay to the order of Messrs. Charles and Co. five hundred and fifty rupees, eight annas, which place to account shipment of copper per "Swallow." Value received. To Messrs. Brown & Sons, Calcutta. ANDREWS & Co. |