MAY, STE 119 & 120, Leake's Pri By A. E. R. Bulleii and in the K iiiL Edition. B a Master of Smith's Cor By EDWA Law. Two Russell's T trator, and POLLOCK Barrister-ai 1906. UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY NS, )ON, W.C. -Fifth Edit. ce II. lls. cloth. in Actions ith Notes. Sixth Barrister-at-Law, cloth. Eleventh Edit. EY, Barristers-at- of an Arbi- . By EDWARD I. W. POLLOCK, Williams' I tors. Tenth Edition. I ELLIAMS. a Lord Justice of i 10 Vols. Royal 8vo. 1905. Priu ,.. ,*,.. Dart's Vendors and Purchasers. Seventh Edition. By BENJAMIN L. CHERRY, one of the Editors of " Prideaux's Precedents in Con- veyancing," G. E. TYRRELL, ARTHUR DICKSON and ISAAC MARSHALL, assisted by L. H. ELPHINSTONE, Barristers-at-Law. Two Vols. Royal 8vo. 1905. Price Zl. 15s. cloth. Prideaux's Precedents in Conveyancing. With Disserta- tions on its Law and Practice. Nineteenth Edition. By JOHN WHITCOMBE and BENJAMIN LENNARD CHERRY, Barristers-at-Law. Two Vols. Royal 8vo. 1904. Price SI. 10*. cloth. Brickdale and Sheldon's Land Transfer Acts. By C. FORTESCUE BRICKDALE, Registrar at the Land Registry, and W. R. SHELDON, Barristers-at-Law. Second Edition. Royal 8vo. 1905. Price 25*. cloth. Theobald's Concise Treatise on the Law of Wills. Sixth Edition. By H. S. THEOBALD, K.C. Royal 8vo. 1905. Price II. 15s. cloth. Odgers on Libel and Slander. Fourth Edition. By W. BLAKE ODGERS, LL.D., K.C., and J. BROMLEY EAMES, Barrister-at- Law. Royal 8vo. 1905. Price 11. 12*. cloth. Carver's Treatise on the Law relating to the Carriage of Goods by Sea. Fourth Edition. By THOMAS GILBERT CARVER, K.C. Royal 8vo. 1905. Price 11. 16*. cloth. Schwabe & Branson's Treatise on the Laws of the Stock Exchange. By WALTER S. SCHWABE and G. A. H. BRANSON, Barristers-at- Law. Demy 8vo. 1905. Price 12*. 6d. cloth. Cripps' Treatise on the Principles of the Law of Com- pensation. By C. A. CRIPPS, K.C. Fifth Edition. By the AUTHOR, assisted by A. T. LAWRENCE, Barrister-at-Law. Royal 8vo. 1905. Price 11. Gs. cloth. Highmore's Customs Laws. By NATHANIEL J. HIGHMORE, Barrister-at-Law. Solicitor for His Majesty's Customs. Demy 8vo. 1906. Price 6s. cl. ** A Catalogue of New Law Works post free on application. * STEVENS AND SONS, LIMITED, 119 & 120, CHANCERY LANE, LONDON. * Archbold's Pleading, Evidence and Practice in Criminal Cases. With the Statutes, Precedents of Indictments. &c. Twenty-third Edition. By WILLIAM F. CRAIES and GUY STEPHENSON, Barristers - at - Law. Demy 8vo. 1905. Price II. 15*. half morocco. Cohen's London Building Acts, 1894 to 1905. With Introductions and Xotes, and the Bye-Laws, Regulations and Standing Orders of the Council, &c., &c. By E. ARAK1E COHEX, Barrister-at-Law. Royal 8vo. 1906. Price 25*. cloth. Pollock's Digest of the Law of Partnership. Eighth Edition. With an Appendix of Forms. By SIB FREDERICK POLLOCK, Bart., Barrister-at-Law, Author of "Principles of Contract," "The Law of Torts," &c. Demy 8"n. 1905. frier 10s. r.loth. Williams' Law and Practice in Bankruptcy. By the Right Hon. SIB ROLAND L. VAUGHAN WILLIAMS, a LoH Justice of Appeal. Eighth Edition. By EDWARD WM. HANSELL, assisted by R. E.L. VAUGHAN WILLIAMS and D. H. CROMPTON, Barristers -at -Law. Royal Svo. 1904. Price II. 10*. cloth. Coote's Treatise on the Law of Mortgages. Seventh Edition. By SYDNEY EDWARD WILLIAMS, Barrister-at-Law, Author of "The Law Relating to Legal Representatives, "&c. Two Vols. Roy.8vo. 1904. Price 31. 3*. cloth. Bonner & Farrant's Law of Motor Cars, Hackney and other Carriages. Second Edition. By G. A. BONNER and H. ^G. FARRANT Barristers- at-Law. Demy 8vo. 1904. Price 12*. fid. cloth. Bowen-Rowlands on Criminal Proceedings on Indict- ment and Information. By E. BOWEN-ROWLANDS, Barrister-at-Law. Demy 8vo. 1904. Pric- 12*. fid. cloth. Talbot's Law and Practice of Licensing. Second Edition. By GEORGE JOHN TALBOT, Barrister-at-Law. Royal llmo. 190-5. Price 10*. fid. cloth. Heywood & Massey's Lunacy Practice. Second Edition. By ARTHUR HEYWOOD and ARNOLD MASSEY, Solicitors, with the assistance of CHARLES GARNETT, Barrister-at-Law. Demy 8vo. 1905. Price 9*. cloth. Hall's Law relating to Children. Second Edition. By W. CLARKE HALL and CECIL W. LILLEY, Barristers -at -Law. Demy 8vo. 1905. Price 10*. fid. cloth. Pritchard's Quarter Sessions. Second Edition. By JOSEPH B. MATTHEWS and V. GRAHAM MILWARD, Barristers-at-Law. 8vo. 1904. Price II. 11*. fid. cloth. Fry's Treatise on the Specific Performance of Contracts. By the Right Hon. SIB EDWARD FRY. Fourth Edition. By W. D. RAWLINS, K.C. Royal 8vo. 1903. Price 36*. cloth. Addison on Contracts. A Treatise on the Law of Con- tracts. Tenth Edition. By A. P. PERCEVAL KEEP and WILLIAM E. GORDON, Barristers-at-Law. Royal 8vo. 1903. Price 21. 2*. cloth. Buchan's Law relating to the Taxation of Foreign Income. By JOHN BUG HAN, Barrister-at-Law. With Preface by the Right Hon. R. B. HALDANE, K.C., M.P. Demy 8-vo. 1905. Price 10*. Qd. cloth. Deans' Student's Legal History. Second Edition. By R. STORRY DEANS, Barrister-at-Law. Demy 8vo. 1905. Price 6s. cloth. Ridges' Constitutional Law of England. By E. WAVELL RIDGES, Barrister-at-Law. Demy 8vo. 1905. Price 12*. fid. cloth. Dixon's Law of the Farm: including the Cases and Statutes relating to the subject ; and the Agricultural Customs of England and Wales. Sixth Edition. By AUBREY J. SPENCER, Barrister-at-Law. Demy 8vo. 1904. Price 26*. cloth. Spencer's Agricultural Holdings (England) Acts, 1883 1SOO, with Explanatory Notes. Third Edition. By AUBREY J. SPENCER, Barrister-at-Law. Demy 8vo. 1906. Price Is. Gd. cloth. $ 2 ** A large Stock of Second-hand Law Reports and Text-books on Sale. ( 2 ) ON THE LAWS OF THE STOCK EXCHANGE, BY WALTER S. SCHWABE MI AND G. A. H. BRANSON, OF THE INNEK TEMPLE, ESQUIRES, BARRISTERS-AT-LAW. LONDON: STEVENS AND SONS, LIMITED, 119 & 120, CHANCEEY LANE, 1905. r ^^A If O PREFACE. THE law of the Stock Exchange is a branch of the law of business, and a branch of that law which affects a very large section of the public ; for, apart from those whose business it is to deal in stocks and shares, there are few persons of any means who do not at some time have deal- ings on the Stock Exchange. This work is an attempt to give a concise but comprehensive account of the method in which the business of the Stock Exchange is conducted, and of the law relating to sucli business ; to treat of the business somewhat from the point of view of a lawyer, and of the law somewhat from the point of view of a business man ; and to provide a text-book which will be of use to business men and the general public as well as to lawyers. a2 IV PREFACE. Of recent years many points of Stock Exchange law, previously in doubt, have been settled by the Courts, and particularly by the Commercial Court, which has in so efficacious and expeditious a manner dealt with cases involving the con- sideration of the law of business. Particularly is this the case with regard to the position of persons who have dealings open on the Stock Exchange when a " default" occurs; the result of the decision being to establish that the default of a broker, generally speaking, does not affect his clients' bargains, and that on the default of a jobber a client has no legal right to look to his broker for the fulfilment of bargains that the broker has made for him with the defaulting jobber. That so many points have recently been settled is one reason that we have ventured to think that a new work on this subject may be of value. In its preparation we have been ex- ceptionally fortunate in receiving considerable assistance from two recognised authorities on the law arid practice of the Stock Exchange, Mr. RUFUS ISAACS, K.C., and Dr. H. L. S. RICHARDSON, LL.D., the Official Assignee of the Stock Exchange. PREFACE. V This work owes its origin to Mr. ISAACS. He had intended to join in its authorship, but found his time already too fully occupied to enable him to collaborate ; but he has always been ready to assist, and has discussed with us many of the more difficult points. Further, we have had at our disposal most of the numerous opinions given by him in recent years on the subject. Dr. RICHARDSON, from his official position on the Stock Exchange, was prevented from in any way collaborating; but he has rendered very great assistance in reading the original draft of the parts of the work which deal more particu- larly with the practice of the Stock Exchange, and with Default, and has placed at our disposal his great knowledge and experience of the subject, and made many valuable suggestions. We desire to express our great gratitude to Mr. ISAACS and Dr. RICHARDSON. Our thanks are also due to the latter's " Deputy," Mr. D. J. STUART, who also took the trouble to read through and make suggestions upon the chapters submitted to Dr. RICHARDSON. We are indebted to the courtesy of the Com- mittee of the Stock Exchange for the permission to publish the Rules and Regulations as an Appendix. VI PREFACE. In order to save mere repetition, many minor points referred to in the Rules have not been mentioned in the text; but considerable care has been devoted to the preparation of the Index ; and it is hoped that it will be easy to find any point which is referred to either in the text or in the Rules. A series of new Rules regulating the admission of members has recently been passed by the Committee, and has necessitated the revision of that portion which deals with the subject. W. S. SCHWABE, G. A. H. BRANSON. THE TEMPLE, December, 1904. TABLE OF CONTENTS. PAOB TABLE OF CASES xi ABBREVIATIONS xxix OHAPTEE I. THE CONSTITUTION OF THE STOCK EXCHANGE. Sect. I. The Committee 1 Sub-sect, (i) The Constitution and General Powers 1 (ii) Settling Days and the Account . . 6 (iii) Official Quotations 9 II. Members , 11 Sub-sect, (i) Brokers 14 (ii) Jobbers 16 (iii) Partnership 17 III. Clerks . 18 CHAPTEE II. STOCK EXCHANGE SECURITIES 20 Sect. I. English, Indian, Corporation and Colonial Govern- ment Inscribed Stocks, &c 22 II. Companies' Securities 26 Sub-sect, (i) Transfer by Deed 28 (ii) Certificates 29 (iii) Certification 35 III. Securities to Bearer 36 IV. Dividends and Eights 42 viii TABLE OF CONTENTS. CHAPTER III. PAOK THE COURSE OF BUSINESS 50 Sect. I. The Making of Bargains 51 Sub-sect, (i) Ordinary Purchases and Sales. . 51 (ii) Options 56 (iii) Arbitrage 60 II. Continuation of Bargains 61 Sub-sect, (i) Carrying-over 61 (ii) Stock Exchange Loans 66 III. Completion of Bargains 67 Sub-sect, (i) Making-up 67 (ii) Passing Names and Payment of Differences 69 (iii) Delivery and Payment 78 IV. Breach 81 V. Default , . . 85 Sub- sect, (i) Closing Bargains at Hammer Price 86 (ii) Distribution of a Defaulter's Assets 88 (iii) Default as affecting Bargains " out of time " and Options. . 94 (iv) Default as affecting Loans .... 96 (v) Re-admission of Defaulters .... 97 CHAPTER IV. THE STOCK EXCHANGE AND THE PUBLIC. Sect. I. The Duties of a Broker 100 1. Strictly to adhere to the position of Agent . 102 2. To act diligently for his Principal and solely in his interest 105 TABLE OF CONTENTS. IX CHAP. IV. Sect. I. continued. PAGE 3. To act according to his mandate 107 (a) To carry out his instructions 107 (b) To make enforceable Bargains for his Principal 108 (c) To deal according to the Rules and Customs of the Stock Exchange.. 115 4. To render full and proper Accounts to his Principal when required 122 II. A Broker's Indemnity and Remuneration 124 III. Formation of Contract 126 IV. Continuation 1 34 Sub-sect, (i) Continuation properly so-called. 134 (ii) Mortgage and Pledge of Stock Exchange Securities 139 V. Completion 150 Sub-sect, (i) The bringing together of Ulti- mate Seller and Ultimate Purchaser, and the Release of Intermediaries 151 (ii) Transfer and Registration .... 161 (iii) Warranty of Title 166 (iv) Payment 169 VI. Breach 183 Sub-sect, (i) Breach of Contract as between Broker and Client 1 84 (ii) Breach of the Contract between Buyer and Seller 204 (a) Specific Performance. . 204 (b) Damages 207 (iii) Detention of Securities 209 VII. Default 211 Sub-sect, (i) Default of Broker 211 (ii) Default of Jobber 214 (iii) A Defaulter's Estate and the Public. . . 215 X TABLE OF CONTENTS. CHAPTEE V. PAGE GAMING AND WAGERING LEEMAN'S ACT. Sect. I. Gaming and Wagering 222 II. Leeman's Act . . 235 CHAPTER VI. MAEKET MAKING RIGGING CORNERS FRAUD . . 238 APPENDIX. THE RULES AND REGULATIONS OF THE STOCK EXCHANGE. 247 INDEX . . 299 TABLE OF CASES. PAGE Addison's Case, 5 Ch. 294 ; 39 L. J. Ch. 558 ; 22 L. T. 692 ; 18 W. E. 365 - - - - - - - - 149 Alhainbra, The, 6 P. D. 68 ; 50 L. J. P. 36 ; 43 L. T. 636 ; 29 W. E. 655 - - - - - - - - 116 Allen v. Graves, L. E. 5 Q. B. 478; 39 L. J. Q. B. 157 ; 22 L. T. 677 ; 18 W. E. 919 - - - - 65, 80, 154 Allen v. Wingrove, 19 T. L. E. 261 213 Anderson v. Beard, [1900] 2 Q. B. 260 ; 69 L. J. Q. B. 610; 82 L. T. 714; 5 Com. Cas. 261 ----- 211 Anderson v. Sutherland, 2 Com. Cas. 65; 13 T. L. E. 163 - 118, 178 Andreae Wallace & Co. v. Burke (1904), unreported - - 114 Attorney-General v. Bowens, 4 M. & W. 171 ; 1 H. & H. 319 ; 7 L. J. Ex. 297 - - 40 Aylward v. Lamotte, Financial Neivs, June llth, 1902 - 132, 133, 134, 196 Bahia and San Francisco Eail. Co., In re, L. E. 3 Q. B. 584 ; 37L.J. Q.B. 176; 9B.&S. 844; 18L.T.467; 16W.E. 862 - - - - - - - - 31, 35 Balkis Consolidated Co. v. Tomkinson, [1893] A. C. 396 ; 63 L. J. Q. B. 134 ; 1 E. 178 ; 69 L. T. 598 ; 42 W. E. 204 - 31, 32, 34, 35 Bank of Ireland v. Evans' Trustees, 5 H. L. C. 389 ; 3 W. E. 573 - 24 Barclay v. Messenger, 43 L. J. Ch. 449; 30 L. T. 350; 22 W. E. 522 183 Baring v. Corrie, 2 B. & A. 137 ; 20 E. E. 383 - - - 176 Barker v. Greenwood, 2 Y. & C. Ex. 414 ; 1 Jur. 541- 178, 179 Earned v. Hamilton, 2 Ey. Cas. 624 190 Barned's Banking Co., In re, 3 Ch. 105 ; 37 L. J. Ch. 81 ; 16 W. E. 193; 17 L. T. 269 158 Barrow v. Arnaud, 8 Q. B. 595; 10 Jur. 313 - - - 207 xii TABLE OF CASES. PAGE Barry v. Croskey, 2 J. & H. 1 - - - - - 240, 244 Bartlett v. Pentland, 10 B. & C. 760 ; 1 B. & A. 704 ; 8 L. J. (0. S.) K B. 264 - - - - - - - - 178 Bayley v. Wilkins, 7 C. B. 886 ; 18 L. J. C. P. 273 ; 13 Jur. 283 - - 80, 125 Bayliffe v. Butterworth, 1 Ex. 425 ; 17 L. J. Ex. 78 ; 11 Jur. 1019 ---------- 120 Bechuanaland Exploration Co. v. London Trading Bank, [1898] 2 Q. B. 658 ; 67 L. J. Q. B. 986 ; 79 L. T. 270 - 27, 40, 116 Beckhusen and Gibbs v. Hamblet, [1900] 2 Q. B. 18 ; 5 Com. Cas. 215; 69 L. J. Q. B. 631; 82 L. T. 459; [1901] 2 K. B. 73 ; 6 Com. Cas. 101 ; 70 L. J. K. B. 600 ; 84 L. T. 617 ; 49 W. E. 481 ----- 110,111,211 Bedford v. Bagshaw, 4 H. & N. 538 ; 29 L. J. Ex. 59 - 11, 240 Bcgbie v. Phosphate Sewage Co., L. E. 10 Q. B. 491 ; 44 L. J. Q. B. 233 ; 33 L. T. 370 ; 24 W. E. 115 ; 1 Q. B. D. 679 ; 35 L. T. 350 ; 25 W. E. 85 - - - - -241 Belfast Banking Co. v. Doherty, 4 L. E. Ir. Q. B. D. 124 - 235 BeU v. Plumbly, 16 T. L. E. 393 - - - - -137 Benjamin v. Barnett, 8 Com. Cas. 244 ; 19 T. L. E. 564 - 5, 80, 81, 122, 125, 170, 200 Bentinck v. London Joint Stock Bank, [1893] 2 Oh. 120; 62 L. J. Ch. 358; 68 L. T. 315; 42 W. E. 140 - 40,41, 138, 140 Bermingham v. Sheridan, 33 Beav. 660 ; 10 L. T. 256 - 162 Biederman v. Stone, 2 C. P. 504; 36 L. J. C. P. 198; 16 L. T. 415; 15 W. E. 811 163,206 Bishop v. Balkis Consolidated Co., 25 Q. B. D. 512 ; 59 L. J. Q. B. 565 ; 39 W. E. 99 ; 63 L. T. 316 - - - - 36 Black v. Homersham, 4 Ex. D. 24; 48 L. J. Ex. 79; 39 L. T. 671 ; 27 W. E. 171 - - - - - - 42 Blackburn v. Mason, 68 L. T. 510; 4 E. 297 ; 9 T. L. E. 284 - 118, 175, 178 Blackwood v. London Chartered Bank, L. E. 5 P. C. 92 ; 43 L. J. P. C. 25 ; 30 L. T. 45 ; 22 W. E. 419 - - - 146 Blyth v. Carpenter, 2 Eq. 501 ; 35 L. J. Ch. 823 ; 12 Jur. (N. S.) 898; 15 L. T. 154; 15 W. E. 3 - - - -210 Bongiovanni v. Societe Generale, 54 L. T. 320 ; 2 T. L. E. 247 65, 140, 141 Boorman v. Nash, 9 B. & C. 145 ; 7 L. J. (0. S.) K. B. 150 - 207 Bostock v. Jardine, 3 H. & C. 700 ; 34 L. J. Ex. 142 ; 11 Jur. (N. S.) 586; 11 L. T. 577 ; 13 W. E. 970 - - 109 Bowlby v. BeU, 3 C. B. 284 ; 16 L. J. C. P. 18 ; 10 Jur. 669 - 79, 125, 129, 131, 165 Bowring v. Shepherd, L. E. 6 Q. B. 309 ; 40 L. J. Q. B. 129; 24 L. T. 721 ; 19 W. E. 852 72,156 TABLE OF CASES. Xlll PAGE Bradford Banking Co. v. Briggs, 12 A. C. 29 ; 56 L. J. Oh. 364; 56 L. T. 62; 35 W. E. 521 - - - - -149 Bradley v. Holdsworth, 3 M. & W. 422 ; 1 H. & H. 156; 7 L. J. Ex. 153 - - - 129 Bridges v. Garrett, 5 0. P. 451 ; 39 L. J. 0. P. 251 ; 22 L. T. 448; 18 W. E. 815 - - - - - - - 179 British and American Telegraph Co. v. Albion Bank, 7 Ex. 119 ; 41 L. J. Ex. 67 ; 26 L. T. 257 ; 20 W. E. 413 - 244 British Mutual Banking Co. v. Charnwood Forest Eail. Co., 18 Q. B. D. 714; 56 L. J. Q,. B. 449; 57 L. T. 833; 35 W. E. 590 ; 52 J. P. 150 - - - - - - 34 Brookman v. Eothschild. (See Eothschild v. Brookman.) Brown v. Black, 15 Eq. 363; 8 Ch. 939; 42 L. J. Ch. 814; 29 L. T. 362; 21 W. E. 892 - ... - -160 Brown v. Boorman, 1 1 01. & F. 1 ; 3 Q. B. 51 1 - - - 126 Brown v. Muller, L. E. 7 Ex. 319 ; 41 L. J. Ex. 214 ; 27 L. T. 272; 21 W. E. 18 - - - - - -207 Budd's Case, 3 De G. F. & J. 297 ; 30 Beav. 143 ; 31 L. J. Ch. 4; 5 L. T. 332; 10 W. E. 51 - - - - - 160 Buitenlandsche Bankvereeniging v. Hildersheim, 19 T. L. E. 640 - - - 60, 227 Bulmer v. Norris, 30 L. J. C. P. 25 ; K. & Q-. 321 ; 9 C. B. (N. S.)19; 7 Jur. (N. S.) 342 ; 3L. T.470; 9W. E. 122- 129 Burkinshaw v. Nicholls, 3 A. C. 1004 ; 48 L. J. Ch. 179 ; 39 L. T. 308 ; 26 W. E. 819 - - - ... r - - 32 Burra v. Eicardo, 1 C. & E. 478 - - - - - 67 Campbell v. Hassell, 1 Stark. 233 - - - - -176 Capel v. Thornton, 3 C. & P. 352 - - - - - 176 Capper's Case (cited in Nickalls v. Merry), L. E. 7 H. L. 545 ; 3 Ch. 458 ; 16 W. E. 1002 - - - - -155 Cappur v. Harris, Bunb. 135- - - - - - 205 Carter v. Wake, 4 Ch. D. 605 ; 46 L. J. Ch. 841 - - 143 Case v. McCleUan, 25 L. T. 753; 20 W. E. 113 - - - 165 Casey v. Bentley, [1902] 1 Ir. E. 376 - 162, 163, 206 Castellan v. Hobson, 10 Eq. 47 ; 39 L. J. Ch. 490 ; 22 L. T. 575; 18 W. E. 731 - - - - - - - 160 Chapman v. Shepherd, 2 C. P. 228; 36 L. J. C. P. 113 ; 15 L. T. 477; 15 W. E. 314 - - - 115, 163, 208 Chapman v. Walton, 10 Bing. 57 ; 3 M. & S. 389 ; 2 L. J. C. P. 213 126 Cheale v. Kenward, 3 De Gr. & J. 27 ; 27 L. J. Ch. 784 ; 4 Jur. (N. S.) 981 ; 6 W. E. 810 205 Chedworth v. Edwards, 8 Ves. 46 ; 6 E. E. 212 - - - 123 XIV TABLE OF CASES. PAGE Clark i>. Gilbert, 2 Bing. (N. C.) 343; 2 Scott, 520; 1 Hodges, 347; 5 L. J. 0. P. 61 201 Clayton's Case, 1 Her. 572 ; 15 E. E. 161 - - - 180, 181 Clegg v. Townshend, 16 L. T. 180 - - - - 125 Coates v. Pacey, 8 T. L. B. 351 , 474 - - - 115, 119, 236 Coleman v. Bucks & Oxon Bank, [1897] 2 Ch. 243 ; 66 L. J. Ch. 564; 76 L. T. 684; 45 W. B. 616 - - - 179,182 Coles v. Bank of England, 10 A. & E. 437 ; 2 Per. & D. 521 ; 9 L. J. Q. B. 36 24 Coles v. Bristowe, 4 Ch. 3 ; 38 L. J. Ch. 81 ; 19 L. T. 403 ; 17 W. E. 105 74, 115, 156, 206 Collen v. Wright, 27 L. J. Q. B. 215 ; 8 E. & B. 647 ; 4 Jur. (N. S.) 357 ; 6 W. E. 123 - - - - 202, 204 Colonial Bank v. Cady, 15 A. C. 267 ; 60 L. J. Ch. 131 ; 63 L. T. 27; 39 W. E. 17. (See Williams v. Colonial Bank) - - 25, 37, 38 Colonial Bank v. Hepworth, 36 C. D. 36 ; 56 L. J. Ch. 1089 ; 57 L. T. 148 ; 36 W. E. 259 148 Colonial Bank v. Whinney, 11 A. C. 426 ; 56 L. J. Ch. 43 ; 55 L. T. 362 ; 34 W. E. 705 149 Concessions Trust, In re, Mackay's Case, [1896] 2 Ch. 757; 65 L. J. Ch. 909 ; 75 L. T. 298 - - - - - 36 Cooke, In re, Saffery, Ex parte. See Saffery , Ex parte. Cooke, In re, Strachan, Ex parte, 4 Ch. D. 123 ; 46 L. J. Bk. 52; 35 L. T. 649; 25 W. E. 171 - - - -181 Cooper v. Neil (1878), W. N. June 1st; 27 W. E. 159, n. - 223, 227 Cronroire, In re, Waud, Ex parte, [1898] 2 Q. B. 383; 67 L. J. Q. B. 620; 78 L. T. 483; 46 W. E. 679- - 231, 233 Crossley v. Magniac, [1893] 1 Ch. 594 ; 3 E. 202 ; 67 L. T. 798; 41 W. E. 598 - - -23, 118, 177, 178, 179, 180 Crouch v. Credit Foncier of England, L. E. 8 Q,. B. 374 ; 42 L. J. Q. B. 183 ; 29 L. T. 259 - - - 39, 116, 120 Cruse v. Paine, 6 Eq. 641 ; 4 Ch. 441 ; 37 L. J. Ch. 711 ; 38 L. J. Ch. 225 ; 19 L. T. 127 - - - - 161, 163, 206 Cuddee v. Eutter, 1 P. Wms. 570 ; 5 Vin. Abr. 538 ; 2 White & Tudor's L. C. 7th ed. 416 - 205 Cullum v. Hodges, 18 T. L. E. 6 - - 100, 134, 185, 190 Currie v. Booth, 7 Com[ Cas. 77 69, 152, 212 Dadswell v. Jacobs, 34 Ch. D. 278 ; 56 L. J. Ch. 233 ; 55 L. T. 857 ; 35 W. E. 261 124 Bails v. Lloyd, 12 Q. B. 531 ; 5 Ey. Cas. 572 ; 17 L. J. Q. B. 247; 12 Jur. 827- 133 TABLE OF CASES. XV PAGE Davis v. Bank of England, 2 Bing. 393; 9 Moore, 737-; 3 L. J. 0. P. 4 - - - 24 Davis v. Haycock, L. E. 4 Ex. 373 ; 38 L. J. Ex. 155 ; 20 L. T. 954 - - - - - - - - 154, 157 Davis v. Howard, 24 Q. B. D. 691 ; 59 L. J. Q. B. 133 - 184, 185 Dearie v. Hall, 3 Euss. 1 149 De Mattos v. Benjamin, 63 L. J. Q. B. 248 ; 10 E. 103 ; 70 L. T. 560; 42 W. E. 284 234 Dent v. Nichalls, 29 L. T. 536; 30 L. T. 644; 22 W. E. 218 119, 120, 158 Deverges v. Sandeman, [1902] 1 Ch. 579 ; 71 L. J. Ch. 328 ; 86 L. T. 269 ; 50 W. E. 404 - - - - - 142, 143 De Waal v. Alder, 12 A. 0. 141 ; 56 L. J. P. C. 25 - - 183 Dixon v. Kennaway, [1900] 1 Ch. 833 ; 69 L. J. Ch. 501 ; 82 L. T. 527 - - - 31,33,35 Dodds v. Hills, 2 H. & M. 424 ; 12 L. T. 139 - - - 146 Doloret v. Eothschild, 1 Sim. & S. 590; 2 L. J. (0. S.) Ch. 125; 24 E. E. 243 183,205 Downes v. Back, 1 Stark. 318 ; 18 E. E. 772 - - - 209 Druce v. Levy, 7 T. L. E. 259 - 185 Duncan, In re, The Times, Mar. 17th, 1903 - 229, 230, 231, 232 Duncan v. Hill, L. E. 8 Ex. 242; 42 L. J. Ex. 179; 29 L. T. 268; 21 W. E. 797 - 122, 124, 125, 195, 197, 198, 211, 213, 214 Duncuft v. Albrecht, 12 Sim. 189 - - - 129, 131, 205 Easton v. London Joint Stock Bank, 13 A. C. 333 ; 57 L. J. Ch. 329 ; 58 L. T. 364 ; 36 W. E. 375 - - - - 40 Edelstein v. Schuler, [1902] 2 K. B. 144; 71 L. J. K B. 572 ; 87 L. T. 204 ; 50 W. E. 493 ; 7 Com. Cas. 172 - 27, 40, 42 Eicholz v. Bannister, 17 C. B. (N. S.) 708; 34 L. J. C. P. 105 ; 11 Jur. (N. S.) 15 ; 12 L. T. 76 ; 13 W. E. 96 - 166 Elbinger Actiengesellschaft v. Armstrong, L. E. 9 Q. B. 473; 43 L. J. Q. B. 211 ; 30 L. T. 871 ; 23 W. E. 127 - 189 Ellis v. Pond, [1898] 1 Q. B. 426 ; 67 L. J. Q. B. 345 ; 78 L. T. 125 - - - - 187, 195, 196, 197, 198, 213 Emmerson's Case, 1 Ch. 433 ; 36 L. J. Ch. 177 ; 12 Jur. (N. S.) 592 ; 14 L. T. 746 ; 14 W. E. 905 - 164 Erskine Oxenford v. Sachs, [1901] 2 K. B. 504 ; 70 L. J. K. B. 978 ; 85 L. T. 385 193,194 Evans v. Wood, 5 Eq. 9; 37 L. J. Ch. 159; 17 L. T. 190; 16 W. E. 67 - - - - 161, 162, 163, 164, 206 XVI TABLE OF CASES. PAGE Fenwick v. Buck, 24 L. T. 274; 19 W. E. 597 - - - 134 Fitch v. Jones, 5 E. & B. 238 ; 24 L. J. Q. B. 293 ; 1 Jur. (N. S.) 854 ; 3 W. E. 507 235 Fletcher v. Marshall, 15 M. & W. 755 ; 5 Ry. Gas. 340 ; 10 Jur. 528 - 101, 128, 183 Foley v. Hill, 2 H. L. C. 28 ; 9 E. E. 1002 ; 1 Ph. 399 ; 13 L. J. Ch. 182 ; 8 Jur. 347 - - - - - - 181 Forget v. Baxter, [1900] A. C. 467 ; 69 L. J. P. 0. 101 ; 82 L. T. 110 115 Forget v. Ostigny, [1895] A. 0. 318 ; 64 L. J. P. C. 62 ; 11 E. 474 ; 72 L. T. 399 ; 43 W. E. 590 - - 51, 224, 226 Fox v. Martin, 64 L. J. Oh. 675 ----- 149 Foxton v. Manchester and Liverpool District Banking Co., 44 L. T. 406 182 France v. Clark, 22 Ch. D. 830 ; 52 L. J. Ch. 362 ; 48 L. T. 185 ; 31 W. E. 374 ; 26 Ch. D. 257 ; 53 L. J. Ch. 585 ; 50 L. T. 1 ; 32 W. E. 466 - - - 65, 142, 144, 148, 186 Frost v. Knight, L. E. 7 Ex. Ill ; 47 L. J. Ex. 78; 26 L. T. 77 ; 20 W. E. 471 - - - - 187, 188, 189 General Credit and Discount Co. v. Glegg, 22 Ch. D. 549 ; 52 L. J. Ch. 297; 48 L. T. 182 ; 31 W. E. 421 - 142, 143 Gibbon v. Young, 8 Taunt. 510 ; 2 Moore, 224 ; 19 E. E. 510 - - - - 116 Gieve, In re, [1899] 1 Q. B. 794; 68 L. J. Q. B. 509; 80 L. T. 438 ; 47 W. E. 441 - - - - - 229, 230 Gill v. Shepherd, 8 Com. Gas. 48 107, 214 Glyn v. Baker, 13 East, 509; 12 E. E. 414 - 37 Godwin v. Francis, 5 C. P. 295; 39 L. J. C. P. 121- 22 L. T. 338 - - - 204 Goldschmidt v. Jones, 22 L. T. 220 ; 18 W. E. 513 - - 154 Goleborn v. Alcock, 2 Sim. 552 _____ 146 Goodwin v. Eobarts, L. E. 10 Ex. 346 ; 1 A. C. 476 ; 45 L. J. Ex. 748; 35 L. T. 179; 24 W. E. 987 39, 40, 116, 120 Gorgier v. MieviUe, 3 B. & C. 45 ; 4 D. & E. 641 ; 2 L. J. (O. S.) K B. 206 ; 27 E. E. 290 - - - - 38, 40 Gray v. Lewis, 8 Ch. 1035 ; 43 L. J. Ch. 281 ; 29 L. T. 12 21 W. E. 923 . 244 Grissell v. Bristowe, 4 C. P. 36 ; 38 L. J. C. P. 10 ; 19 L. T 390; 17W.E. 123 - - _ _ _ 120,156 Grizewood v. Blane, 11 C. B. 526; 21 L. J. C. P. 46 - 226, 227 Hamilton v. Young, 7 L. E. Ir. 289 - - - - 118, 143 Hampden v. Walsh, 1 Q. B. D. 189 ; 45 L. J. Q, B. 238 ' 33 L. T. 852 ; 24 W. E. 607 - - - _ _ _ 2 31 TABLE OF CASES. XV11 PAGE Hancock v. Smith, 41 Ch. D. 456 ; 58 L. J. Ch. 725 ; 61 L. T. 341 181, 182 Hardoon v. Belilios, [1901] A. C. 118 ; 70 L. J. P. 0. 9; 83 L. T. 573 ; 49 W. E. 209 - - - - - - 160 Harker v. Edwards, 57 L. J. Q. B. 147 4, 121, 168 Harriett v. Yielding, 2 Sch. & L. 549 ; 9 E. E. 98 - - 204 Harrison v. Harrison, 1 0. & P. 412 - - - - - 209 Harrold v. Plenty, [1901] 2 Oh. 314 ; 70 L. J. Oh. 562 ; 85 L. T. 45 ; 49 W. E. 646 - - - - - - 143 Hart v. Frontino Gold Mining Co., L. E. 5 Ex. Ill; 39 L. J. Ex. 93 ; 22 L. T. 30 - - - - - 32, 35 Hartas v. Eibbons, 22 Q. B. D. 254 ; 58 L. J. Q. B. 187 ; 37 W. E. 278 211, 213 Hawkins v. Maltby (No. 1), 4 Eq. 572; 3 Oh. 188; 37 L. J. Oh. 58 ; 17 L. T. 51, 397 ; 16 W. E. 209 - - 163 Hawkins v. Maltby (No. 2), 6 Eq. 505 ; 4 Oh. 200 ; 38 L. J. Ch. 313; 20 L. T. 335 ; 17 W. E. 557 - - 161, 163, 206 Hawkins v. Pearse, 9 Com. Gas. 87 - - - - - 174 Henderson v. Bise, 3 Stark. 158 222 Henkel v. Pape, L. E. 6 Ex. 7 ; 40 L. J. Ex. 15 ; 23 L. T. 419; 19 W. E. 106 128 Heritage v. Paine, 2 Ch. D. 594 ; 45 L. J. Ch. 295 ; 34 L. T. 947 - - - - - - - - - 158 Heseltine v. Siggers, 1 Ex. 856; 18 L. J. Ex. 166 - - 131 Heyworth v. Knight, 17 C. B. (N. S.) 298; 33 L. J. 0. P. 298 ; 10 Jur. (N. S.) 866 116 Higgins v. Senior, 8 M. & W. 834 ; 11 L. J. Ex. 199 - - 130 Hilder v. Dexter, [1902] A. C. 474; 71 L. J. Ch. 781 ; 87 L. T. 311 ; 7 Com. Gas. 258 125 Hinde v. Haskew, 1 T. L. E. 94 - - - - 99, 221 Hitchcock v. Highton (1900), unreported - - - - 124 Hochster v. Delatour, 2 E. & B. 678 ; 22 L. J. Q. B. 455 ; 17 Jur. 972 ; 1 W. E. 469 187 Hodgkinson v. Kelly, 6Eq.496; 37 L. J. Ch. 837 ; 16 W. E. 1078 _._ 120, 161, 162 Hogan v. Shaw, 5 T. L. E. 613 185 Hopkinson v. Eolt, 9 H. L. C. 514 149 Hughes v. Graeme, 33 L. J. Q. B. 335 ; 12 W. E. 857 - 204 Humphrey v. Lucas, 2 Gar. & K. 152 - - - - 174 Hunt v. Gunn, 13 C. B. (N. S.) 226 ; 7 L. T. 277 - - 164 Hunt, Cox & Co. v. Chamberlain, 12 T. L. E. 74, 186 - 55, 125 Hyam's Case, 1 De G. F. & J. 75 ; 29 L. J. Ch. 243 ; 6 Jur. (N. S.) 181 ; 1 L. T. 115 ; 8 W. E. 52 - - - - 160 S. TABLE OF CASES. PAGE Imperial Loan Co. t>. Stone, [1892] 1 Q. B. 599; 61 L. J. Q. B. 449 ; 66 L. T. 566 ; 56 J. P. 436 - - - 155, 159 Ireland v. Livingstone, L. E. 5 H. L. 395 ; 41 L. J. Q,. B. 201 ; 27 L. T. 79 128 James v. May, L. E. 6 H. L. 328 ; 42 L. J. Ch. 802 ; 29 L. T. 217 160 Johnstone v. Milling, 16 Q. B. D. 460 ; 55 L. J. Q. B. 162 ; 54 L. T. 629; 34 W. E. 238; 50 J. P. 694 - 187, 188, 189 Jones v. Littledale, 6 A. & E. 486 ; 6 L. J. K. B. 169 - 130 Jones v. Peppercorne, 1 Johns. 430; 28 L. J. Ch. 158; 5 Jur. (N. 8.) 140; 7 W. E. 103 - - - 147,200,201 Kaemena v. Central Bank of London, 4 T. L. E. 657 - - 146 King v. Hutton, [1899] 2 Q. B. 555 ; [1900] 2 Q. B. 504 ; 69 L. J. Q. B. 786 ; 83 L. T. 68 ; 48 W. E. 95 - 182, 219 Knatchbull v. Hallett, 13 Ch. D. 696; 49 L. J. Ch. 415; 42 L. T. 421 ; 28 W. E. 732 - 181 Knight v. Barber, 16 M. & W. 66 ; 16 L. J. Ex. 18 ; 2 Car. & K. 333 - - - 131 Knight v. Cambers, Knight v. Fitch, 15 C. B. 566 ; 24 L. J. C. P. 14, 122 ; 1 Jur. (N. S.) 506 233 Lacey v. Hill, Crowley's Claim, 18 Eq. 182 ; 43 L. J. Ch. 551 ; 30 L. T. 484; 22 W. E. 586 - - 99, 186, 190, 213 Lacey v. Hill, Scrimgeour's Claim, 8 Ch. 921 ; 42 L. J. Ch. 657 ; 29 L. T. 281 ; 21 W. E. 857 - - - - 186, 198 Lamert v. Heath, 15 M. & W. 486; 15 L. J. Ex. 297; 10 Jur. 481 -------- 108, 126 Land Credit Co. of Ireland, In re. (See Weickersheim's Case.) Lang v. Smyth, 7 Bing. 284 ; 5 M. & P. 78 ; 9 L. J. (O. S.) C. P. 91 - - 38, 39 Langton v. Waite, 6 Eq. 165 ; 4 Ch. 402 ; 37 L. J. Ch. 345 ; 18 L. T. 80; 16 W. E. 508 - - - 65, 140, 174, 186 Lawford v. Harris, 12 T. L. E. 275 128 Learoyd v. Bracken, [1894] 1 Q. B. 114 ; 63 L. J. Q. B. 96; 9 E. 92 ; 69 L. T. 668 ; 42 W. E. 196 - - - - 130 Leigh v. Paterson, 2 Moore, 588 ; 20 E. E. 552 - - - 187 Leitch v. Abbott, 31 Ch. D. 374 ; 55 L. J. Ch. 460 ; 54 L. T. 258 ; 34 W. E. 506 ; 50 J. P. 441 123 TABLE OF CASES. XIX PAGE Levitt and Thornton v. Hamblet, [1901] 2 K. B. 53 ; 6 Com. Gas. 79 ; 70 L. J. K. B. 520 ; 84 L. T. 638 - 87, 112, 211, 212 Lilley v. Eankin, 56 L. J. Q. B. 248 ; 55 L. T. 814 - - 235 Lilly, Walsh & Co. v. Smales, [1892] 1 Q. B. 456 ; 40 W. E. 544 ---------- 128 Lomas v. Graves, [1904] 2 K. B. 557 ; 73 L. J. K. B. 803 - 99, 220 London and County Bank v, London and Eiver Plate Bank, 20 Q. B. D. 232; 21 Q. B. D. 535; 57 L. J. Q. B. 601 ; 61 L. T. 37 ; 37 W. E. 89 - - - - 38, 39, 40, 42 London and Globe Finance Corporation, In re, [1902] 2 Ch. 416 ; 71 L. J. Ch. 893 ; 87 L. T. 49 - - - - 201 London and Hamburg Exchange, In re, Zulueta's Claim, 5 Ch. 444; 39 L. J. Ch. 598; 18 W. E. 778 - - - 125 London and Midland Bank v. Mitchell, [1899] 2 Ch. 161 ; 68 L. J. Ch. 568 ; 81 L. T. 263 ; 47 W. E. 602 - - 143 London Founders' Association v. Clarke, 20 Q. B. D. 576 ; 57 L. J. Q. B. 291 ; 59 L. T. 93 ; 36 W. E. 489 - - 162 London Joint Stock Bank v. Simmonds, [1892] A. C. 201 ; 61 L. J. Ch. 723 ; 66 L. T. 625 ; 41 W. E. 108 - 40, 41, 146, 147 Loring v. Davis, 32 Ch. D. 625 ; 55 L. J. Ch. 725 ; 54 L. T. 899 ; 34 W. E. 701 128, 206, 237 Lowenfeld v. Howat, Court of Sess. Cas., 4th Series, XIX. 128 229 McArthur v. Seaforth, 2 Taunt. 257 - - - - 210 McDevitt v. ConoUy, 15 L. E, Ir. 500 - 105 McEwan v. West London Wharves Co., 6 Ch. 655 ; 40 L. J. Ch. 471; 25 L. T. 143; 19 W. E. 837 - 37 Macoun v. Erskine Oxenford, [1901] 2 K. B. 493 ; 70 L. J. K B. 973; 85 L. T. 372 - - 170, 184, 190, 192, 199 Maffett v. Stewart, Court of Sess. Cas., 4th Series, XIV. 506 110, 111 Magnus v. Queensland National Bank, 37 Ch. D. 466 ; 57 L. J. Ch. 413 ; 58 L. T. 248 ; 36 W. E. 577 - - - 179 Makepeace v. Eogers, 4 De G. J. & S. 649 ; 34 L. J. Ch. 396; 11 Jur. (N. S.) 314; 12 L. T. 221 ; 13 W. E. 566 - 124 Manning v. Purcell, 7 De G. M. & G. 55 ; 24 L. J. Ch. 522 ; 3 Eq. E. 387 ; 3 W. E. 273 230 Marten v. Gibbon, 33 L. T. 561 ; 24 W. E. 87 - - - 46 Matthews, In re. (See Powell, Exparte.) Maxted v. Morris, 21 L. T. 535 - 134, 158 Maxted v. Paine (No. 1), L. E. 4 Ex. 81 ; 38 L. J. Ex. 41 ; 20 L. T. 34 - - 134,158 62 XX TABLE OF CASES. PAGE Maxted v. Paine (No. 2), L. R. 6 Ex. 132 ; 40 L. J. Ex. 57 ; 24 L. T. 149; 19 W. R. 527 - - - - 157, 159, 160 May v. Angeli, 13 T. L. R. 568 ; 14 T. L, R. 551 110, 132 Meek v. Wendt, 21 Q. B. D. 126; 59 L. T. 558 - - - 203 Mendelssohn, In re, Mendelssohn, Ex parte, [1903] 1 K. B. 216; 72 L. J. K. B. 106; 87 L. T. 721 ; II. of L., The Times, July 15th, 1904 99,218,219 Merry v. Nickalls, 7 Oh. 733 ; 42 L. J. Ch. 479 ; 28 L. T. 296; 21 W. R. 305. (And see Nickalls v. Merry) - 155, 158, 161 Metropolitan Coal Consumers' Association v. Scrimgeour, [1895] 2 Q. B. 604 ; 65 L. J. Q. B. 22 ; 73 L. T. 137 ; 44 W. R. 35 - - - - - - - - - 125 Mewburn v. Eaton, 20 L. T. 449 165 Michael v. Hart, [1901] 2 K. B. 867; [1902] 1 K. B. 482; 70 L. J. K. B. 1000 ; 85 L. T. 548 ; 50 W. R. 154 - 187, 188, 196 Miles v. Lowenfeld, The Times, December 21st, 1900, and May 8th, 1901 229, 230 Mitchell v. Newhall, 15 M. & W. 308 ; 15 L. J. Ex. 292 ; 10 Jur. 318 - - - - - - - - - 108 Mocatta v. Bell, 24 Beav. 585 ; 27 L. J. Ch. 237 ; 4 Jur. (N. S.) 77 - - 66, 144, 170 Moore v. North Western Bank, [1891] 2 Ch. 599 ; 60 L. J. Ch. 627 ; 64 L. T. 456 ; 40 W. R. 93 - - - - 145 Morel v. Westmoreland, [1903] 1 K. B. 64 ; [1904] A. C. 11 ; 72 L. J. K. B. 66; 87 L. T. 635 ; 51 W. R. 290 - 175 Morgan, In re, Ex parte Phillips and Ex parte Marnham, 2 De G. F. & J. 634; 30 L. J. Bk. 1 ; 6 Jur. (N. S.) 1273; 3 L. T. 516 ; 9 W. R. 131 - - - - 66, 97, 225 Morley v. A.ttenborough, 3 Ex. 500 ; 18 L. J. Ex. 148 ; 13 Jur. 282 166 Morris v. Cleasby, 1 M. & S. 576 ; 14 R. R. 531 - - 174 Morritt, In re, 18 Q. B. D. 222 ; 56 L. J. Q. B. 139 ; 56 L. T. 42 ; 36 W. R. 277- - 142 Mortimer v. McCallan, 6 M. & W. 58 ; 9 L. J. Ex. 73 ; 4 Jur. 173 ; 7 M. & W. 20 ; 10 L. J. Ex. 136 ; 9 M. & W. 636; 11 L. J. Ex. 429 - ----- 174,222 Mulliner v. Florence, 3 Q. B. D. 484 ; 47 L. J. Q. B. 700 ; 38 L. T. 167 ; 26 W. R. 385 - - - - - - 201 Murray v. Hewitt, 2 T. L. R. 872 - - - - 184, 194 Musgrave and Hart's Case. (See Overend, Gurney & Co., In re.) Mutton v. Peat, [1900] 2 Ch. 79 ; 69 L. J. Ch. 484 ; 82 L. T. 440 ; 48 W. R. 486 - - - - - 182 Mynn v. Joliffe, 1 M. & R. 326 176 TABLE OF CASES. XXI PAGE Nanney v. Morgan, 37 Ch. D. 346; 57 L. J. Ch. 811; 58 L. T. 238 ; 36 W. E. 677 30,145 National Coffee Palace Co., In re, Ex parte Panmure, 24 Ch. D. 367 ; 53 L. J. Ch. 57 ; 50 L. T. 38 ; 32 W. E. 236 - 202, 203 Neilson v. James, 9 Q. B. D. 546; 51 L. J. Q. B. 369 ; 46 L. T. 791 - - - 114, 118, 126, 162, 163, 236, 237 Nelson Mitchell v. City of Glasgow Bank, 4 A. C. 624 ; 27 W. E. 875 ; Court of Session Cas. 4th Ser. VI. 420 ; Scot. L. E. XVI. 155 236 Nicholson v. Gooch, 5 E. & B. 999 ; 25 L. J. Q. B. 137 ; 2 Jur. (N. S.) 303 - - 223 Nicholson v. Mansfield, 17 T. L. E. 259 - - - 104, 109 NickaUs v. Eaton, 23 L. T. 689; 19 "W. E. 172 - - - 158 NickaUs v. Merry, L. E. 7 H. L. 530 ; 45 L. J. Ch. 575 ; 32 L. T. 623 ; 23 "W. E. 663. (And see Merry v. Nickalls) - 155, 157, 158 Nutbrown v. Thornton, 10 Ves. 163 205 Ogle v. Earl Vane, L. E. 3 Q. B. 272 ; 37 L. J. Q. B. 77 ; 9 B. & S. 182 ; 16 W. E. 463 209 Oliver v. Bank of England, [1901] 1 Ch. 652 ; 70 L. J. Ch. 377; 84 L. T. 253; 49 W. E, 391; 65 J. P. 294; [1902] 1 Ch. 610 ; 71 L. J. Ch. 388 ; 86 L. T. 248 ; 50 W. E. 340 ; 7 Com. Cas. 89. (And see Starkey v. Bank of England) - 24, 202, 204 Otto's Kopje Diamond Mines, Ltd., In re, [1893] 1 Ch. 618 ; 62 L. J. Ch. 166; 68 L. T. 138; 41 W. E. 258 - 31, 32, 35 Overend, Gurney & Co., In re, Musgrave and Hart's Case, 5 Eq. 193; 37 L. J. Ch. 161 ; 16 W. E. 247 - - 157, 161 Overweg, In re, Haas v. Durant, [1900] 1 Ch. 209 ; 69 L. J. Ch. 255; 81 L. T. 776 - - - - -65, 134, 135, 186 Owen v. Eouth, 14 C. B. 327 ; 23 L. J. 0. P. 105 ; 18 Jur. 356 ; 2 W. E. 222 - - 209 Paine v. Hutchinson, 3 Ch. 388 ; 37 L. J. Ch. 485 ; 18 L. T. 380; 16 W. E. 553 - - 161, 162, 163, 164, 206 Panmure, Ex parte. (See National Coffee Palace, In re,} Partridge v. Bank of England, 9 Q. B. 396 ; 13 L. J. Q. B. 281 ; 8 Jur. 803 - - - 38 Pearse v. Green, 1 J. & W. 135 ; 20 E. E. 258 - - - 123 Pearson v. Scott, 9 Ch. D. 198 ; 47 L. J. Oh. 705 ; 38 L. T. 747 ; 26 W. E. 796 - - - 118,175,176,178,179 Peek v. Gurney, L. E. 6 H. L. 377 ; 43 L. J. Ch. 19 ; 22 W. B. 29 11, 240 XX11 TABLE OF CASES. PAGE Peppercorne v. Clench, 26 L. T. 656 - - - - - 161 Perry v. Barnett, 14 Q. B. D. 467 ; 15 Q. B. D. 388 ; 54 L. J. Q. B. 466; 53 L. T. 585 - 115, 118, 119, 120, 122, 236 Petre v. Sutherland, 3 T. L. E. 422 - - - - - 138 Phillips, Ex parte, In re Morgan. (See Morgan, In re.) Phillips v. Jones, 4 T. L. E. 401 186 Philp v. Bennett, 18 T. L. E. 128 230 Philpotts v. Eyans, 5 M. & W. 475 ; 9 L. J. Ex. 33 - 187, 207 Picker v. London and County Bank, 18 Q. B. D. 515 ; 56 L. J. Q. B. 299 ; 35 W. E. 469 - - - - 25, 39, 40 Pigot v. Cubley, 15 C. B. (N. S.) 701 ; 33 L. J. C. P. 134; 10 Jur. (N. S.) 318; 9 L. T. 804; 12 W. E. 467 - - 143 Plumbly, In re, Ex parte Grant, 13 Ch. D. 667 ; 42 L. T. 387; 28 W. E. 755 - - - - 78, 87, 117, 219 Pollock v. Stables, 12 Q. B. 765 ; 17 L. J. Q. B. 352 ; 12 Jur. 1043 _.. 120 Poole v. Middleton, 29 Beav. 646; 7 Jur. (N. S.) 1262; 4 L. T. 631 ; 9 W. E. 758 162 Postlewaite v. Freeland, 5 A. C. 599 ; 49 L. J. Ex. 630 ; 42 L. T. 845 ; 28 W. E. 833 208 Pott v. Flather, 16 L. J. Q. B. 366 - - - - 190, 207 Powell, Ex parte, In re Matthews, 1 Ch. D. 501 ; 45 L. J. Bk. 100; 34 L. T. 224; 24 W. E. 378 - - - - 120 Powell v. Jessopp, 18 C. B. 336 ; 25 L. J. C. P. 199; 4 W. E. 465 --.-_.-.. 129 Powell v. London and Provincial Bank, [1893] 2 Ch. 555; 62 L. J. Ch. 795 ; 2 E. 482 ; 69 L. T. 421 ; 41 W. E. 545 144, 148 Queensland Investment Co. v. O'Connell and Palmer, 12 T. L. E. 502 158, 159 E. v. Aspinall, 1 Q. B. D. 730 ; 2 Q. B. D. 48 ; 46 L. J. M. C. 145 ; 36 L. T. 297 ; 25 W. E. 283 ; 13 Cox C. C. 563 10, 239, 244, 246 E. v. De Beringer, 3 M. & S. 67 ; 15 E. E. 415 - - 238, 239 Eandell v. Trimen, 18 C. B. 786; 25 L. J. C. P. 307 - - 204 Eatclifle and Dealtry v. Mendelssohn, [1902] 2 K. B. 653 ; 7 Com. Cas. 247 ; 71 L. J. K B. 984; 87 L. T. 422; 51 W. E. 3 ; H. of L. The Times, July 15th, 1904 - - 99 Eead v. Anderson, 13 Q. B. D. 779 ; 53 L. J. Q. B. 532 ; 51 L. T. 55 ; 32 W. E. 950 - 119, 172, 223, 233 Eeggio v. Fosket, 4 T. L. E. 240 231 TABLE OF CASES. XXlii PAGE Eeggio v. Steven, 4 T. L. E. 316 231 Bemfry v. Butler, 1 E. B. & E. 887; 5 Jur. (N. S.) 1298 ; 6 W. E. 230, 682 - - 162 Eeuter v. Sala, 4 0. P. D. 239 ; 48 L. J. 0. P. 492 ; 40 L. T. 476 ; 27 W. E. 631 183 Eichardson v. Stormont, Todd & Co., [1900] 1 Q. B. 701 ; 69 L. J. Q. B. 369 ; 82 L. T. 316 ; 48 W. E. 451 ; 5 Com. Cas. 134 ----- 99, 217, 219, 220, 221 Eichardson v. Williamson, L. E. 6 Q. B. 276 ; 40 L. J. Q. B. 145 203 Eobins v. Segar, [1903] unreported ----- 191 Eobinson v. Mollett, L. E. 7 H. L. 802 ; 44 L. J. C. P. 362 ; 33 L. T. 544 - 105, 109, 'ill, 118, 126 Eogers, In re, 15 Oh. D. 207 ; 43 L. T. 163 ; 29 W. E. 29 - 111, 225 Eooney v. Stanton, 17 T. L. E. 28 49 Eoots v. Williamson, 38 Oh. D. 485 ; 57 L. J. Cb. 995 ; 58 L. T. 802 ; 36 W. E. 758 30, 145 Eoper v. Jobnson, 8 C. P. 167 ; 42 L. J. C. P. 65 ; 28 L. T. 296; 21 W. E. 384 - - - - 187, 188, 189, 207 Eotb v. Tayzen Townsend, 1 Com. Cas. 240, 313 ; 73 L. T. 628 - 188 Eotbscbild v. Brookman, 5 Bli. (N. S.) 165 ; 2 D. & C. 188; 3 Sim. 153; 7 L. J. Cb. 163; 30 E. E. 147 - - 103, 104 Eoyal Bank of India's Case, 7 Eq. 91 ; 4 Ch. 252 - 149, 158 Eoyal Exchange Assurance Co. v. Moore, 8 L. T. 242; 11 W. E. 592 ; 2 New Eep. Q. B. 63 - - - - - 130 Euben v. Great Fingall Co., [1904] 2 K. B. 712 ; 73 L. J. K. B. 872 - - - 35 Eudge v. Bowman, L. E. 3 Q, B. 689; 37 L. J. Q. B. 193 - 163 Eumball v. Metropolitan Bank, 2 Q. B. D. 194 ; 46 L. J. a. B. 346 ; 36 L. T. 240 ; 25 W. E. 366 ... 39 Eussell v. Bendigo Goldfields, Tbe Times, Nov. 28th, 1896- 174 Sacbs v. Spielmann, 5 T. L. E. 487 138 Saffery, Ex parte, In re Cooke, 4 Ch. 555. (See Tomkins v. Saffery) - - - 217 Saffery v. Mayer, [1901] 1 K. B. 11; 70 L. J. K. B. 145; 83 L. T. 394 ; 49 W. E. 54 234 Salaman v. Warner, [1891] 1 Q. B. 734; 60 L. J. Q. B. 624 ; 65 L. T. 132 ; 39 W. E. 547 - - - - 241,243 Samuel v. Eowe, 8 T. L. E. 488 185, 194, 207 Sandars v. Kentish, 8 T. E. 162 223 XXIV TABLE OF CASES. Sanderson and Levi v. British Mercantile Marine and Share Co., Ltd., The Times, July 19th, 1899 - - - - 241 Sargent, Ex parte. (See Tahiti Cotton Co., In re.) Scott v. Brown, [1892] 2 Q. B. 724 ; 61 L. J. Q. B. 738 ; 4R. 42; 67 L. T. 782; 41 W. E. 116; 57 J. P. 213-239,241 Scott v. Ernest, 16 T. L. R. 498 - - - - 192, 211 Scott v. Godfrey, [1901] 2 K. B. 726 ; 70 L. J. K B. 954 ; 85 L. T. 415 ; 50 W. R. 61 ; 6 Com. Gas. 226- - - 111 Seymour v. Bridge, 14 Q. B. D. 460; 54 L. J. Q. B. 347 - 119 Shaw v. Bayley, The Times, Jan. 24th, 1893 - - 229, 230 Shaw v. Caledonian Rail. Co., Court of Sess. Cas. 4th Ser. XVII. 466 - - 229 Shaw v. Fisher, 2 De G. & S. 91 ; 5 De G. M. & G. 596 : 12 Jur. 162 206 Shaw v. Holland, 15 M. & W. 136 ; 15 L. J. Ex. 87 - - 208 Shaw v. Port Philip Gold Mining Co., 13 Q. B. D. 103 ; 53 L. J. Q. B. 369 ; 50 L. T. 685 ; 32 W. R. 771 - 34, 35 Sheffield v. London Joint Stock Bank, 13 A. C. 333; 57 L. J. Ch. 986 ; 58 L. T. 735 ; 37 W. R. 33 - - 41, 146 Sheffield Corporation v. Barclay, [1903] 2 K. B. 580; 72 L. J. K. B. 777 ; 89 L. T. 227 ; 52 W. R. 54 ; 9 Com. Cas. 53-- 34 Shepherd v. Johnson, 2 East, 211 209 Shepherd v. Murphy, Ir. Rep. 2 Eq. 544 ; 16 W. R. 948 - 79, 154, 156, 161, 162 SichelTs Case, 3 Ch. 119; 37 L. J. Ch. 373; 17 L. T. 363; 16 W. R. 292 - 149 Simm v. Anglo-American Telegraph Co., 5 Q. B. D. 188; 49 L. J. Q, B. 392 ; 42 L. T. 37 ; 28 W. R. 290; 44 J. P. 280 - - - 33, 34 Sims v. Marryat, 17 Q,. B. 281 ; 20 L. J. Q. B. 454 - - 166 Skelton v. Wood, 15 R. 130; 71 L. T. 616 - 114 Skinner v. City of London Marine Insurance Co., 14 Q. B. D. 882 ; 54 L. J. Q. B. 437; 53 L. T. 191 ; 33 W. R. 628 - 162 Sloman v. Bank of England, 14 Sim. 475 ; 14 L. J. Ch. 226 ; 9 Jur. 243 24 Smart v. Sandars, 5 C. B. 895; 17 L. J. C. P. 258; 12 Jur. 751 ; 3 C. B. 380; 16 L. J. C. P. 39; 10 Jur. 841 - - 172 Smith v. Reynolds, 66 L. T. 808 - 4, 121, 125, 167, 168, 169 Societe Generale de Paris v. Walker, 1 1 A. C. 20 ; 55 L. J. Q. B. 169 ; 54 L. T. 389 ; 34 W. R. 662 - 29, 30, 145, 146, 149 Spooner v. Browning, [1898] 1 Q. B. 528; 67 L. J. Q. B. 339 ; 78 L. T. 98 ; 46 W. R. 369 15 Stange v. Lowitz, 14 T. L. R. 468 - 103, 104, 108 TABLE OF CASES. XXV PAGE Starkey v. Bank of England, [1903] A. C. 114 ; 72 L. J. Ch. 402; 88 L. T. 244; 51 W. E. 513; 8 Com. Gas. 142. (And see Oliver v. Bank of England) - - - 24, 202 Stenning, In re, Wood v. Stenning, [1895] 2 Ch. 433 ; 13 E. 807 ; 73 L. T. 207 180 Stephens v. De Medina, 4 Q. B. 422; 3 G. & D. 110; 12 L. J. Q. B. 120 79, 165 Stewart v. Cauty, 8 M. & W. 160; 10 L. J. Ex. 348 - - 208 Stewart v. Lupton, 22 W. E. 855 - - 43, 46, 211 Stewart v. Weber, The Times, May 27, June 19 and Dec. 8, 1903 '84, 200, 240, 244, 245, 246 Stock and Share Auction Co. v. Galmoye, 3 T. L. E. 808 - 132, 170 Stoneham v. Wyman, 6 Com. Cas. 174 212 Strachan v. Universal Stock Exchange (No. 1), [1895] 2 Q, B. 329; 64 L. J. Q. B. 723. (And see Universal Stock Exchange v. Strachan) 229, 231 Strachan v. Universal Stock Exchange (No. 2), [1895] 2 Q. B. 697 ; 65 L. J. Q. B. 178 ; 73 L. T. 492 ; 44 W. E. 90 ; 59 J. P. 789 230, 231 Stray v. Eussell, 28 L. J. Q. B. 279; 29 L. J. Q. B. 115; 1 E. & E. 888 ; 1 L. T. 443 ; 8 W. E. 240 ; 6 Jur. 168 -162, 174 Sutton v. Gray, [1894] 1 Q. B. 285 ; 63 L. J. Q. B. 633 ; 9 E. 106 ; 69 L. T. 673 ; 42 W. E. 195 - - - - 15 Sutton v. Tatham, 10 A. & E. 27 ; 8 L. J. Q. B. 210 - 120, 125 Sweeting v. Pearce, 9 0. B. (N. S.) 534 ; 30 L. J. C. P. 109 ; 7 Jur. (N. S.)800; 5 L. T. 79; 9 W. E. 343 - - -178 Swinbanks, Ex parte, In re Shanks, 11 Ch. D. 525 - 176, 179 Symonds v. Mulkern, 46 L. T. 763 ; 30 W. E. 875 - - 40 Tahiti Cotton Co., In re, Ex parte Sargent, 17 Eq. 273 ; 43 L. J. Ch. 425 ; 22 W. E. 815- 28, 29, 144 Tatam v. Eeeve, [1893] 1 Q. B. 44 ; 62 L. J. Q. B. 30 ; 5 E. 83; 67 L. T. 683; 41 W. E. 174; 57 J. P. 118 - 233, 234 Tayler v. Great Indian Peninsular Eail. Co., 28 L. J. Ch. 285, 709; 4 De G. & J. 559; 5 Jur. (N. S.) 331, 1087; 7W. E. 182, 637 29,166 Taylor v. Chester, L. E. 4 Q. B. 309 ; 10 B. & S. 237 ; 38 L. J. Q. B. 225; 21 L. T. 359 241 Taylor v. Plumer, 3 M. & S. 562 ; 2 Eose, 415; 16 E. E. 361 - - - 180 Taylor v. Stray, 2 C. B. N. S. 175, 197; 26 L. J. C. P. 185, 287 ; 3 Jur. (N. S.) 540, 964; 5 W. E. 761 - 120, 162, 164 XXVI TABLE OF CASES. PAGE Tempest v. Kilner, 3 0. B. 249 - - - 108, 129, 195, 207 Thacker v. Hardy, 4 Q. B. D. 685 ; 48 L. J. Q. B. 289 ; 39 L. T. 595; 27 W. E. 158 - 100, 134, 213, 223, 224, 225, 226, 227 Thames Ironworks Co. v. Patent Derrick Co., 1 J. & H. 93 ; 29 L. J. Oh. 714; 6 Jur. (N. S.) 1013; 2 L. T. 208; 8 W. E. 408 201 Thompson v. Meade, 7 T. L. E. 698 - - - - 102, 128 Thomson v. Clydesdale Bank, [1893] A. C. 282 ; 62 L. J. P. C. 91; IE. 255; 67 L. T. 156 - - - - -182 Tomkins v. SafEery, 3 A. 0. 213 ; 47 L. J. Bk. 11 ; 37 L. T. 758; 26 W. E. 62. (See Ex parte Saffery) - 99, 216, 217, 218, 219, 220 Torrington v. Lowe, 4 C. P. 26 ; 38 L. J. C. P. 121 ; 19 L. T. 316 ; 17 W. E. 78 - - - - - - 159 Tredegar Iron & Coal Co. v. Hawthorn, 18 T. L. E. 716 - 187, 189 Trevor v. Whitworth, 12 A. C. 409 ; 57 L. J. Ch. 28 ; 57 L. T. 457 ; 36 W. E. 145 - - - - - - 158 Trimble v. Hill, 5 A. C. 342; 49 L. J. P. C. 49; 42 L. T. 103 ; 28 W. E. 479 231 Tucker v. Wilson, 1 P. Wms. 261 ; 24 E. E. 379 - 142, 185 Union Corporation v. Charrington, 8 Com. Gas. 99 - 5, 80, 81, 84, 174, 200, 246 Universal Stock Exchange v. Stevens, 66 L. T. 612 ; 40 W. E. 494 229 Universal Stock Exchange v. Strachan, [1896] A. C. 166 ; 65 L. J. Q. B. 429 ; 74 L. T. 468 ; 44 W. E. 497 ; 60 J. P. 468. (See Strachan v. Universal Stock Exchange, No. 1) 229, 230, 231 Varney v. Hickman, 5 C. B. 271 ; 5 D. & L. 364; 17 L. J. C. P. 102 231 Venables v. Baring, [1892] 3 Ch. 527 ; 61 L. J. Ch. 609 ; 67 L. T. 110; 40 W. E. 699 40 Viney v. Chaplin, 2 De G. & J. 468 ; 27 L. J. Ch. 434 ; 4 Jur. (N. S.) 619 ; 6 W. E. 562 ; 3 De G. & J. 282 ; 28 L. J. Ch. 164 ; 7 W. E. 159 176 Vulcan Ironworks Co., In re (1885), W. N. 120- - - 33 Walker v. Hacking, 1887, W. N. 202 - 158 Walter and Gould v. Bang, 13 T. L. E. 270 - 190, 192, 193, 199 TABLE OF CASES. XXV11 PAGB Ward, Ex parte (No. 1), 20 Ch. D. 356 ; 51 L. J. Oh. 752 ; 47 L. T. 106 ; 30 W. E. 560 - - - - - 9, 99 Ward, Ex parte (No. 2), 22 Oh. D. 132 ; 52 L. J. Ch. 73; 48 L. T. 332; 31 W. E. 112 ----- 99,216 Ward and Henry's Case, 2 Ch. 431 ; 36 L. J. Ch. 462 ; 16 L. T. 254 ; 15 W. E. 569 - - - - - - 162 Waterhouse v. London and Southwestern Eail. Co., 41 L. T. 553 ; 44 J. P. 154 33, 167 Watson v. Spratley, 10 Ex. 222 ; 24 L. J. Ex. 53 ; 2 W. E. 627 129, 131 Weeks v. Propert, 8 0. P. 427 ; 42 L. J. C. P. 129 ; 21 W. E. 676 ---------- 203 Weickersheim's Case, 8 Ch. 831 ; 42 L. J. Ch. 435 ; 28 L. T. 653; 21 W. E. 612 ------- 149 WeUs v. Porter, 3 Scott, 141 ; 2 Bing. N. 0. 722; 5 L. J. C. P. 250 - - - - - - - - - 222 Westropp v. Soloman, 8 C. B. 345 ; 19 L. J. C. P. 1 ; 13 Jur. 1104 --------- 166, 168 Whitechurch v. Cavanagh, [1902] A. C. 107 ; 71 L. J. K B. 400 ; 85 L. T. 349 ; 50 W. E. 218 - - - - 34, 36 Wildey v. Stephenson, 1 Cab. & E. 3 - - - - 106 Wilkinson v. Lloyd, 7 Q. B. 27 ; 14 L. J. Q. B. 165 ; 9 Jur. 328 162 Williams v. Archer, 5 C. B. 318 ; 17 L. J. C. P. 82 - - 210 Williams v. Colonial Bank, 38 Ch. D. 388 ; 57 L. J. Ch. 826 ; 59 L. T. 643 ; 36 W. E. 625 (see Colonial Bank v. Cady) 25, 39 Williams v. Peel Eiver Co., 55 L. T. 689 - - - 196, 210 Wilson v. Williams, 29 L. E. Ir. 176 - 18 Wiltshire v. Sims, 1 Camp. 258; 10 E. E. 673 - - - 116 Wolmerhausen v. Gullick [1893], 2 Ch. 514; 62 L. J. Ch. 772; 3 E. 610; 68 L. T. 753 - 125,190,191 Woodd, In re, Ex parte~Kiug, 82 L. T. 504; 1900, W. N. 84 - 88, 175, 182, 219 Woolf v. Hamilton [1898], 2 Q. B. 337 ; 67 L. J. Q. B. 917 ; 79 L. T. 49 ; 47 W. E. 70 234 Wreford (deceased), In re, Carmichael v. Eudkin, 13 T. L. E. 153 - 132 Wynne v. Price, 3 De GK & S. 310 ; 5 Ey. Cas. 465 ; 3 Jur. 295 161 Young v. Cole, 3 Bing. N. C. 724 ; 4 Scott, 489 ; 3 Hodges, 126; 6L. J. C. P. 201 125, 166 ( xxix ) A. Law Keports Appeal Cases. A. & E Adolphus and Ellis. B. & Aid Barnewall and Alderson. B. & C Barnewall and Cresswell. B. &S Best and Smith. Beav Beavan. Bing Bingham. Bing. N. C Bingham New Cases. Bunb Bunbury. Camp Campbell. Cab. & E Cababe and Ellis. Car. & K Carrington and Kirwan. 01. &F Clark and Finnelly. C. & P Carrington and Payne. C. B Common Bench Keports. 0. B. (N. S.) NewSeries. Ch Law Keports Chancery. Ch. D ,, ,, Chancery Division. [1900] 1 Ch Chancery, 1900, Vol. I. Com. Cas Commercial Cases. C. P Law Reports Common Pleas. C. P. D ,, ,, Common Pleas Division. Court of Sess. Cas. ...Court of Session Cases (Scotland). D. & C Deacon and Chitty. D. & L Dowling and Lowndes Practice Cases. D. & R Dowling and Ryland. De G. F. & J De Gex, Fisher and Jones. De G. & J De Gex and Jones. De G. J. & S De Gex, Jones and Smith. De G. M. & G De Gex, Macnaghten and Gordon. De G. & S. . . . . .De Gex and Snmle. XXX ABBREVIATIONS OF NAMES OF REPORTS. E. &B Ellis and Blackburn. E. B. &E Ellis, Blackburn and Ellis. E. &E Ellis and Ellis. E. R English Reports. Eq Law Reports Equity Cases. Eq. R Equity Reports. Ex Exchequer Reports. Ex. D Law Reports Exchequer Division. Or, & D Gale and Davison. H. & C Hurlstone and Coltman. H. & H Horn and Hurlstone. H. & M Hemming and Miller. H. & N Hurlstone and Norman. [1900] Ir. R Irish Law Reports, 1900. J. & H Johnson and Hemming. J. & W Jacob and Walker. Johns Johnson Chancery. Jur The Jurist. J. P Justice of the Peace Reports. K. & Gr Keane and Grant. [1901] 2 K. B Law Reports Bong's Bench, 1901,Vol. II. L. J. Bk Law Journal Reports Bankruptcy. L. J. Oh ,, ,, ,, Chancery. L. J. 0. P ,, ,, Common Pleas. L. J. Ex ,, ,, ,, Exchequer. L. J. M. ,, ,, ,, Magistrates' Cases L. J. P ,, ,, ,, Probate. L. J. P. C ,, ,, ,, Privy Council. L. J. Q. B ,, ,, Queen's Bench. L. R. Ex Law Reports Exchequer Cases. L. R. H. L ,, ,, English and Irish Appeals. L. R. P. C Privy Council. L. R. Q,. B ,, ,, Queen's Bench Cases. L. R. Ir ,, ,, Ireland. L. T Law Times Reports. M. & P Moore and Payne. M. & R Moody and Robinson. M. & S Maule and Selwyn. M. & W Meeson and Welsby. ABBREVIATIONS OF NAMES OF REPORTS. XXXI Mer Merivale. Ph Phillip Chancery. P. D Law Keports Probate Division. P. & D Perry and Davison. P. Wms Peere Williams. Q. B Queen's Bench Cases. Q. B. D Law Eeports Queen's Bench Division. [1900] 1 Q. B Queen'sBench, 1900, Vol.1. E TheEeports. E. E Eevised Eeports. Euss Eussell. Ey. Cas Eailway and Canal Cases. Sch. & L Schoales and Lefroy. Scot. L. E Law Eeports Scotland. Sim Simons. Sim. & S Simons and Stuart. Stark Starkie. Taunt Taunton. T. L. E Times Law Eeports. Term E Durnford and East Term Eeports. Ves Vesey. Via. Abr Viner's Abridgment. W. N Weekly Notes. W. E Weekly Eeporter. T. & 0. Ex Younge and Collyer Exchequer. THE LAW OF THE STOCK EXCHANGE, CHAPTER I. THE CONSTITUTION OF THE STOCK EXCHANGE. THE Stock Exchange is a building situated in Throg- morton Street, in the City of London, resorted to by its members and their clerks, the public being excluded, for the purpose of dealing with each other in various securities. It is colloquially known as the " House." Its constitution is now regulated by the Deed of Settle- ment of 1886. The proprietors of the Stock Exchange Shareholders, are the holders of shares in that institution. The capital consists of 20,000 shares, 121. paid, with un- limited liability. There is a debenture debt of 500,000/. The shareholders must be members of the Stock Ex- change, and any shareholder ceasing to be a member must transfer his shares to a member within a year. They are represented by a board of nine Managers, Managers, who, as representing the proprietors, act as landlords of the building, fix and alter at their discretion the amounts to be paid for admission and subscription by the members and their clerks, and receive and control the money so paid. s. B THE CONSTITUTION OF THE STOCK EXCHANGE. Election. Officials. Meetings. SECT. I. THE COMMITTEE. SUB-SECT, (i). ITS CONSTITUTION AND GENERAL POWERS. The members elect annually by ballot thirty of their number as a Committee for General Purposes (a) . No one can be elected as a member of the Committee unless he is and has been for the last five years a member of the Stock Exchange (b) . The Committee have a chairman and deputy chair- man, who are elected annually by the Committee and hold office for one year (c). The Committee also elect a secretary, who holds office during the pleasure of the Committee, three scrutineers of ballot () Rules 134136. (?) Rule 136. (r) Ib. 134. THE COMMITTEE. 9 (6) Whether any of the company's capital which has not been issued is to be held in reserve for f uture issue, to provide working capital, or to be issued to the public. The object of these queries is to ensure, first, that the securities are ready for issue, and, secondly, that the special settlement shall only be granted in those shares which are issued to the public, and that it shall not be possible for any shares issued to vendors or others, or any securities subsequently issued, to be confused with those in respect of which the special settlement is asked for. The fact that a special settlement was obtained by Special settle- fraud does not affect bargains in the securities between P 16 ^* obtained persons not parties to the fraud () ; nor does it make any difference that persons interested in obtaining the special settlement were members of the Committee that granted it (t). SUB-SECT, (iii). OFFICIAL QUOTATIONS. The Committee also have control over the price list of Official List. securities which is published under their authority (). No member may publish or sell a price list without the sanction of the Committee (u). The Official List is made up from the bargains marked (x) ; and no bargain is allowed to be marked unless it is made in the House between members and at the real market price (y). Until permission has been obtained from the Com- Quotations in mittee no new security can be quoted in the Official Official List ' List. Before granting an official quotation the Com- mittee require to be satisfied that everything is in proper order (z). It is, however, to be observed that the fact that securities are quoted in the Official List is no guarantee that the concern to which the securities relate is sound, but only that the requisite formalities have been complied with ; formalities, indeed, with (*) Ex p. Ward (No. 1), 20 (x) See post, p. 54. Ch. D. 356. (y] Eule 145. (M) Eule 144. (z) Ib. 137 et seq. 10 THE CONSTITUTION OF THE STOCK EXCHANGE. requisites for. Quotation in Official List obtained by fraud. which, in case of fraud, it would be somewhat difficult to comply. The requirements of the Committee as regards loans are set out in Rule 137. As regards new companies the requirements appear in Eule 139, and may be summarised thus : No quotation will be granted unless the company is of sufficient magnitude and importance. Three days' notice has to be given, and numerous documents have to be deposited with the Secretary of the Share and Loan Department, including the prospectus, which must contain various matters set out with particularity in the rule, and the allotment books for shares. Fur- ther, at least two-thirds of the amount of securities proposed to be issued must have been applied for by, and unconditionally allotted to, the public ; securities given to vendors or others as fully paid not being con- sidered as allotted to the public. There must be a broker, a member of the Stock Exchange, who is autho- rized to give full information as to the undertaking. No application will be considered by the Committee for a quotation of securities issued to vendors or others as fully or partly paid until six months after the same securities, subscribed for by the public, have been quoted (a). If, in making application to the Committee for a quotation, false statements are fraudulently made, the persons responsible can be criminally prosecuted for false pretences to deceive the Committee (b) . They would also be civilly responsible to any person who acted on these representations, and thereby suffered loss, provided the representations were made to that person ; and it has been held that one who knew the rules of the Stock Exchange, and therefore, on seeing shares quoted in the Official List, believed that at least two-thirds had been bond fide applied for and allotted to the public, and thereupon bought shares, and suffered loss thereby, could recover damages from the directors of the com- pany, who had made false statements to the Committee, (a) Eule 141. (b) JR. v. Asjnnatt, I Q. B. D. 730 ; 2 Q. 13. D. 48. MEMBERS. 11 and so obtained the quotation (c). This decision has since been doubted (d), and certainly seems to stretch the law as to actions for deceit beyond its ordinarily recognised limits. SECT. II. MEMBERS. The members of the Stock Exchange, who now Annual re- number about 5,000, are elected by the Committee by el on * ballot on the first Monday in March, for one year com- mencing March 25th. All members have to be re- elected annually (e). Every person seeking admission to membership for Admission the first time has to sign a letter in which he agrees to t member - be bound by the Rules and Regulations (/). For this purpose a copy of the printed rules is sent to him, and he has to state that he has read them. Since November 23rd, 1904, there are two methods in which a new applicant may obtain admission to membership. He may obtain a nomination from a member willing to Nomination, retire in his favour, or from a former member, or from the legal personal representatives of a deceased member (g). The right of nomination is personal and not trans- ferable (h] . It can be exercised by a member resigning, or by the legal personal representatives of a deceased member, only within twelve months of resignation or of death ; and by a member discontinuing his subscription only within the current Stock Exchange year (i) . The right can only be exercised once, unless the nominee be rejected, in which case a further nomination may be given, provided that the right to nominate has not lapsed by expiration of the time limit (/). Members admitted on or before November 23rd, (c) Bedford v. Bagshaw, 4 (/) Appendix, p. 294. H. & N. 538 ; 29 L. J. Ex. 59. (g) Rule 21a. (d) Peekv. Gurney, L. E. 6 (h) II. 21e. H. L. 377, see post, p. 240. (?) Ib. 21d. (<} Rule 21. (/.-) 76. 21a. 12 THE CONSTITUTION OF THE STOCK EXCHANGE. 1904, and members admitted without nomination, are not allowed themselves to exercise the right of nomina- tion for a period of four years from the date of their admission ; but should such a member die within the four years, the right may be exercised by his legal personal representatives (/). A defaulter, or a member who has been expelled or suspended, or has ceased to be a member under Eule 153, or by reason of his failure to pay fees, or to acquire or hold the Stock Exchange shares required to be held (w), has no right of nomination (11) . Admission of The second method of obtaining admission is open on j y ^ p ersons wno h ave served as clerks in the House or settling rooms for four years, with a minimum service in the House of three years. Such persons may apply to have their names placed on a list called the Waiting List of Applicants for Admission without Nomination (o). The Committee, at a special meeting held in December of each year, fixes the number of such applicants to be elected in the following year (p). Applicants nominated for admission must, unless eligible for the "Waiting List, be recommended by three members of not less than four years' standing, who have fulfilled all their engagements on the Stock Exchange (q) . Each recommender must undertake to pay 500/. to the creditors of the applicant, if he shall be declared a defaulter within four years from his admission (q) . The recommender must not be indemnified by the applicant, and, if subsequently indemnified, must, on the applicant's default within the four years, pay to the creditors the amount of the indemnity in addition to the amount guaranteed (r). Applicants on the Waiting List, or clerks eligible for the Waiting List who have received nominations, need Sureties. (Z) Eules 21e, 22. (m) Eule 21g. (n) IJ>. 21e. o n. 2if. (p) Eule 21a. , } n ^ (*) n>> 26. MEMBERS. 13 only "be recommended by two members, who enter into a similar guarantee, but only for 300/. each (s) . Should the clerk have been engaged as principal in any other business before his employment on the Stock Exchange, he requires three recommenders, who have to guarantee 500/. for four years (s). The recommenders must have personal knowledge of the applicant, and must be able to satisfy the Committee of his eligibility (f). The applicant must not be in their employment as an authorized clerk, nor may they them- selves be clerks, and their own sureties must no longer be liable (u). The recommenders have to answer questions about the applicant; and they are asked, amongst other things, whether he has been bankrupt, and whether they would take his cheque for 3,000/. in the ordinary course of business, and whether they consider he can safely be dealt with (x). If a member becomes a partner with, or authorized clerk to, one of his recommenders he must find a new surety (y). All applicants must be of age, and be British subjects, Qualification and if of foreign birth, must have been resident in Great f ? meml)er - Britain for seven years, and naturalized for two years (z) . No applicant, or member, may be engaged as principal, or clerk, in any other business, nor may his wife (a). No. new applicant can be admitted who has been bankrupt, or against whom a receiving order has been made, or who has been proved to be insolvent, unless he has paid 20s. in the ; and if he has been bankrupt, or insolvent, more than once, he is wholly ineligible (b). Every member elected after November 23rd, 1904, must, before exercising any privilege of membership, become a proprietor of the Stock Exchange by acquiring, (s) Rule 22. (y) Eule 28. (t) Ib. 25. (z) II. 23. (ft) II. 27. (a) II. 29. () Ib. 37. (ft) Ib. 30. 14 THE CONSTITUTION OF THE STOCK EXCHANGE. in the case of nominated members, at least three shares, or, in the case of members elected from the "Waiting List, at least one share. If a member fails to acquire his share qualification within six months, or if he at any time ceases to hold the same, he ceases to be a member (q). Any member may object to the election of any other, or of any new applicant. Any such objector must com- municate, in writing, to the Committee the grounds of his objection (r). There are also rules regulating the re-election of persons who have ceased to be members by default or otherwise, which will be dealt with elsewhere (s). Entrance fee The annual subscription of members is 40 guineas (t), tion subscnp " and the entrance fee 500 guineas, unless the applicant has been a clerk on the Stock Exchange for four years, in which case the subscription is the same, but the entrance fee only 150 guineas. No member of the Stock Exchange is allowed to advertise. The secretary will on application forward a list of brokers to anyone who asks for it. Advertising forbidden. SUB-SECT, (i). BROKERS. Brokers. The members are divided into two classes, namely, brokers and jobbers. The latter are also called dealers. A broker's business is to buy and sell for the public, as an agent for reward, in the shape of a commission, which varies according to the nature of the securities dealt in, or which can be the subject of agreement between the broker and his client. Generally speaking, a broker will effect bargains in any class of security the client desires, provided he can find a jobber ready to deal. Brokers may also, and often do, make bargains with jobbers on their own account ; and, as a rule, a (j) Kule 21g. (r) Ib. 31. (s) Post, p. 97, and see Eule 33. (t] Those elected prior to March, 1899, pay 30 guineas, and a few members of long standing only 20 guineas. MEMBERS. 15 jobber has no knowledge, when dealing with a broker, whether the broker is or is not acting for a client. Nor, as a rule, does the question concern him ; for, by the rules of the Stock Exchange, all members deal as prin- cipals inter se, and the broker is himself primarily responsible to the jobber on all bargains made (u). Brokers frequently employ persons known as runners, Runners. or remisiersy who generally have seats in the brokers' office. The runner's business is to introduce clients to the broker, and his remuneration a share of commission earned : he often agrees with the broker to share any loss which the latter may incur by the failure of the person introduced to fulfil his obligations. Such an Runners not arrangement has been held by the Courts not to con- par ers> stitute a partnership, and, being a contract of indemnity rather than a guarantee, not to require to be in writing under the Statute of Frauds (x). The runner's authority to bind the broker, or the Authority of person introduced, must in each case depend on the particular circumstances (y). The mere fact that the broker has accepted some orders given to the runner, is not sufficient to make him liable on subsequent orders given to, and accepted by, the runner, but not com- municated to, or acted upon by, the broker (y). It not infrequently happens that a runner is given wide dis- cretion by a client to act for him, and in such case the client may constitute the runner his agent, and be bound by his acts within his authority or the apparent scope of his authority. Questions have arisen whether runners are entitled to a share of so-called "profit contangoes," or charges made by the broker for carrying-over (z) ; and it is submitted that, if the agreement is for a share of com- mission, the runner would not be so entitled ; but if it is for a share of the profits, he would. (w) Eule 54. (y} Spooner v. Broivning, (x} Button v. Gray, [1894] [1898] 1 Q. B. 528. 1 Q. B. 285. (2) Seopost, p. 63. 16 THE CONSTITUTION OF THE STOCK EXCHANGE. SUB-SECT, (ii). JOBBERS. Jobber. A jobber, as a rule, confines himself to one class of securities, such as Consols and similar funded securities, American railway securities, or South African shares. Markets. The jobbers take their stand in that part of the House devoted by custom to dealings in their special class of securities and known as the "market" for that class, such as the South African market, the West African market, and so on. Here they deal with the brokers who come there with bargains to make in these securities, and also with each other. The jobbers can also make bargains direct with members of the public, but, of course, not in the House. A jobber can buy securities with the intention of taking delivery of them, or he can sell securities with the intention of actually delivering, either having the shares, or intending to obtain them subsequently ; but, generally speaking, his desire is immediately to sell what he has bought and buy what he has sold, making his profit by the difference between the price at which he buys and the price at which he sells. It is the practice for jobbers to quote securities at two different Buying and prices ; namely, a higher one at which they are prepared selling prices, ^ ge j^ an( j a } ower one a t w hich they are prepared to buy. For instance, they may quote Consols at 88|-88| ; that is, they will buy at 881 an< i se ll a t 88J. The Turn of the difference between the two is called the " turn of the market. market," and varies according to the nature of the securities dealt in and the state of the market. When there are many dealings going on in the security, or, as it is termed, there is a free market, the jobbers are content with a smaller "turn," owing to the greater facilities for covering themselves by doing the converse bargains, and are therefore willing to give closer quotations. No member may act in the double capacity of jobber MEMBEKS. 17 and broker (b) ; but there is nothing to prevent a member at one time being a broker and at another a jobber. Members have, however, on their annual application for re-election, to state in which capacity they intend to act. SUB-SECT, (iii). PARTNERSHIP. Partnerships between brokers and jobbers are not Between permitted (6), for the reason, presumably, that it might jobbers, Por- tend to give a broker an adverse interest to his clients, bidden : No member may be a partner with a non-member (c) . with non- Members may be partners together either as brokers or jobbers, and either generally or to a limited extent ; as, for instance, in all bargains in a certain description of security (d). Members, while their sureties remain liable, may not enter into a partnership without the written consent of their sureties ; and this consent must be communicated to the Committee (e). All partnerships are notified to the Committee; a list of them is contained in the list of members, and all alterations in them are publicly announced by means of notices posted in the House (/). The failure of the partnership, or of any member thereof, at once operates as a dissolution of the part- nership ( 42 - s. c 18 THE CONSTITUTION OF THE STOCK EXCHANGE. must not consist of more than two members or firms ; and the dealings must be confined to those markets in which both parties are dealing (A). One firm may have several limited partnerships in different markets, but it is necessary that one member of every firm entering into a limited partnership shall deal in the market in which the limited partnership is to operate. Goodwill on On the dissolution of a Stock Exchange partnership o ution. ^ j iag ]j eeil decided that there is nothing payable by the continuing partner to the outgoing partner for goodwill, notwithstanding that the continuing partner carries on the business in the partnership name (i) ; but if an outgoing partner were restrained by covenant from carrying on business or soliciting clients, it is conceived that there might be a considerable goodwill in such business, and it is possible that the matter requires further elucidation. SECT. III. CLERKS. The clerks on the Stock Exchange are of two kinds, authorised and unauthorised, both having the privilege of entering the House. Clerks are admitted by the Committee, on the written application of their em- ployers^). Their number is limited by the rules (/). Qualification. All clerks must be at least seventeen, and authorised clerks must be at least twenty-one years of age. They must be in all respects eligible for membership except as regards age (m) . Authorised clerks must have been at least two years in the House, or Settling Eooms, of which one at least must have been spent in service in the House (m). Authorised An authorised clerk has authority to deal for his clerks. (7i) Eule 42. (&) Eule 46. (i) Wilson v. Williams, 29 (Z) Ib. 45. L. E. Ir. 176. (m) Ib. 44. CLERKS. 19 employer, and this authority continues until revoked by letter to the Committee (n). The employer is liable on all dealings by the clerk, except for money borrowed without security, to render him liable for which he must have given special authority (0). Members, whose sureties are still liable, must receive their consent before employing an authorised clerk (p). Any member may be authorised clerk to any other; but no member who is clerk to another may deal in his own name (g) ; and no authorised clerk to a jobber may deal in securities other than those his employer usually deals in (r). A defaulter may become clerk to a member if a majority of three-fourths of the Committee, at a meet- ing specially convened and consisting of at least twelve, approve (s). Unauthorised clerks are not allowed to deal, and are Unauthorised just like any other clerk, except that some can enter er 8> the House, and some the Settling Eooms only. When in either the House or Settling Eooms, they have, unless they are members, to wear distinctive badges (t) . The entrance fee of an authorised clerk, who is not a Entrance fee member, is fifty guineas, and his annual subscription tio n> su thirty guineas. If he is a member, he pays the usual members' fees. Unauthorised clerks pay ten guineas entrance fee, and twelve guineas annual subscription. (n) Eule 48. (r) Eule 44. (o) n. 50. (s) J&> (p) Ib. 47. Ib. 61. () n > 46 - 20 STOCK EXCHANGE SECURITIES. CHAPTER II. STOCK EXCHANGE SECURITIES. THE securities dealt in upon the Stock Exchange con- sist, in the main, of the loans raised by the British and by foreign governments and other public bodies, such as Municipalities and County Councils, and of the stocks, shares and debentures of Public Companies. Loans. Loans, are generally raised by governments and public bodies by the issue either of bonds or of stock. Where the loan is raised by the issue of bonds, the re- sult is that the amount of the individual bonds becomes the unit, to which, or to multiples of which, all dealings Stock. in the loan are restricted. Where, however, the loan is issued without any such division into units, but can be applied for, and dealt in, in any desired amounts (), it is spoken of as stock. In such cases the amounts of stock applied for or dealt in are denoted by their nominal value in money. Shares. The capital of companies consists either of stock, issued and dealt in like the stock of loans, or of shares, which are definite and indivisible fractions of the whole capital. When the shares of a company are fully paid, they can be converted into stock (b). (a) In the case of some the issue, provides that deal- stocks the Act of Parliament, in gs shall only take place in or articles of association, or multi P les of certain amounts, other instrument, regulating ^ Com P anies Act > 186 ?> Si 1 . STOCK EXCHANGE SECUKITIES. 2 L Stock is quoted on the Stock Exchange according to Method of the present market value of some certain amount, gtockTand generally 1001. nominal value. Thus, when 100/. shares, nominal value of Consols can be bought for 93/. 2s. 6e?., or sold for 931., the quotation for Consols is 93 93|. Bonds and shares are quoted according to the present value of each bond or share. For the purposes of the Stock Exchange rules, the stock Ex- securities dealt in are divided under three heads, the han . e c l ass> 1 ncation ot division being based on the mode of transferring the securities securities from one person to another. methods^f These three heads are : transfer. 1. English, India, Corporation and Colonial Go- vernment inscribed stocks, &c. 2. Securities deliverable by deed of transfer. 3. Securities to bearer. In giving the following general outline of Stock Exchange securities, it is not possible to follow entirely this division, but particular attention is paid to the method of transfer. The National Debts of the various parts of the National British Empire, and of other countries, are some of the Debts ' oldest of Stock Exchange securities. They consist of debts of the various governments for money borrowed, and owing to the lenders or their assignees. The British Government loans are of two kinds : the British loans. one called " funded " (c), and known as the British Funded. Funds or Consols (d), where the loan is, on the part of the lenders, for an indefinite period, the Government (c) The word "funded" has (d) Consols is an abbrevia- Other use of another meaning in relation tion for Consolidated Annui- *?f nded to foreign government loans, f s > so c f lled because rious Consols. ' .. , ,. , funded loans, or annuities, namely, that they are secured ^ ^ by ^ rf parlia _ on some particular source of ment consolidated into one revenue. fund. 22 STOCK EXCHANGE SECURITIES. being under no obligation to pay it off at any particular Unfunded. time ; and the other "unfunded," such as Treasury bills, Exchequer bonds, War Stocks and War Bonds, where the loan is for a definite time, repayable at certain dates. Funds trans f erable at banks. Method of transfer. SECT. I. ENGLISH, INDIA, COEPOEATION, AND COLONIAL GOVEENMENT INSCEIBED STOCKS, &c. British Government loans are transferable at the Banks of England and Ireland. The practice of the Banks is the same with respect to all funds transferable at the banks, which consist, in the case of the Bank of England alone, of some seventy different securities, including Colonial, Municipal, and Indian loans, Indian railway stock, and some foreign government loans, such as Chinese and Japanese. The Banks keep books, in which the names of holders of these securities are inscribed, and the securities can only be transferred by the holder, or his attorney, attending at one of the Banks and signing a transfer. When the transfer is to be made by the stockholder himself, a form of ticket called a Transfer Ticket is procured from the Bank, and filled in by the purchaser's broker, and sent by him to the seller. This ticket contains the purchaser's name, the amount of stock, and the pur- chase price. The seller then attends at the Bank, where, if he is not known, he is identified by a banker or broker, and there signs the transfer, which is pre- pared and witnessed by a clerk of the Bank. The Stock receipt, transfer is then noted in the books, and a Stock Eeceipt, which is a copy of the transfer, is handed to the seller, to be sent by him to the purchaser. When the transfer is made by an attorney for the stockholder, the practice is somewhat different. Blank forms of application for powers of attorney are kept at the Bank, and are also Transfer ticket. Power of attorney. GOVERNMENT, ETC. INSCRIBED STOCKS. 23 supplied by the Bank to some of the large firms of brokers. The form has spaces left for the name of the stockholder, his address both past and present, and the name and address of the attorney, and the amount and description of the security to be dealt in. This form is filled up by the applicant, and then lodged by him at the Power of Attorney Office at the Bank. A clerk of the Bank takes it to the Transfer Office, and com- pares it with the Stock Book and Index Book, which give the amount of stock held by the stockholder and his name and address. The Bank then fills up a power of attorney, and sends to the stockholder at the address given in the application, and, if it differs, also at the address appearing in the books, a circular informing him that application has been made for a power of attorney to transfer his stock, and that a reply is only necessary if he objects. If there is no objection made, and the circular is not returned by the Post Office, the power of attorney is issued by the Bank to the appli- cant (e) . The applicant obtains the stockholder's signa- ture to the power, and takes it back to the Bank, and there lodges it in the Executed Powers Office. There the signature is compared with any previous signature of the stockholder which the Bank may have in their books, and, if in order, the power is sent to the Transfer Office. There it is kept until the Transfer Ticket arrives. The ticket is compared with the Stock Book and the power, and, if all is in order, the transfer is made out and entered in the books. Upon the back of the power is a form of " demand to act " upon such power, which Demand to the attorney has to sign. Having done this, he executes act> the transfer, and receives the Stock Receipt. If the attorney is a banker, or broker well known to the Bank, the signing of the " demand to act " is dispensed with. (e) For form of power of attorney, see Croasley v. Mayniac, [1893] 1 Ch. 594. 24 STOCK EXCHANGE SECURITIES. Unauthorised transfer, e.g., under forged power of attorney. Liability of broker pre- senting forged power of attorney. Stock certificates. The transferee may, if he choose, also attend and sign the transfer. These elaborate precautions have not succeeded in entirely preventing frauds being committed in the transfer of such securities. If the Bank acts upon a forged power of attorney, or by other means is induced to permit the unauthorised transfer of stock, the Bank is liable to make good the loss to the true owner of the stock, provided it is not through his negligence that the fraud has succeeded (/) . It is now settled law that if a broker, bond fide and without negligence, presents to the Bank a forged power of attorney, and the Bank acts upon it, even though there are at the Bank genuine signatures of the person whose name is forged with which the forgery can be, and is, compared, the broker is liable to the Bank for any loss incurred by reason of having to replace on the books as the holder of stock the person whose name has been forged (g) . The reason for this is that the broker, by presenting the power of attorney, warrants that he has the authority of the person named in the power of attorney, and he is liable for breach of warranty of authority, if he has not such authority in fact. The transferee can obtain from the Bank certificates that he is the holder of so much of the stock or, as they are called, " stock certificates." These stock certificates either contain the name of the person entitled to the stock, or have blanks left for his name. In the former case the stock is only transferable in the books of the (/) Sloman v. Sank of Eng- land, 14 L. J. Oh. 226 ; Coles v. Sank of England, 10 A. & E. 437; Sank of Ireland v. Evan's Trustees, 5 H. L. 0. 389 ; Davis v. Sank of England, 2 Bing. 393 ; 3 L. J. 0. P. 4 ; Oliver v. Bank of England, [1902] 1 Oh. 610. (g} The transferee, being in- nocent in the matter, can re- tain his stock, as the bank are estopped from denying his title : Starkey v. Sank of England, [1903] A. 0. 114. GOVERNMENT, ETC. INSCRIBED STOCKS. 25 Bank in the manner already described ; in the latter, the certificates are transferable by delivery, unless and until the blanks are filled up, when they cease to be so transferable. Government loans carry a fixed rate of interest, pay- Dividends, able, as dividends, at fixed periods. These dividends are paid to the stockholder or his attorney at the head office or at country branches of the Bank, or, if the stockholder so desires, by dividend warrants sent through the post at his risk. Dividend warrants can be cashed as if they were cheques. To each stock certificate Coupons. coupons for five years' dividends are affixed, and the coupons, as they come due, are presented to the Bank, and paid as described. These coupons are payable to bearer, and the Bank is under no liability for paying a coupon to someone who has no title to it. Foreign government loans are regulated, as regards Foreign loans. transfer of the securities, by the laws of the countries which have created them (A). The documents of title are, in most cases, transferable by delivery, and are called Bearer Bonds (i). Whether they will be treated by the Courts of this country as negotiable instruments depends on the custom of English merchants and the law of England (k). Where the loans have been origi- nally raised in this country, it is usual to make the securities transferable at the Bank of England. Indian and Colonial loans are governed by the Acts Indian and of the English or Colonial legislatures which have colonial loans. (h) Colonial Bank v. Cady, termined by drawing numbers 15 A. C. 267. ^ the bonds by ballot. (&) Picker v. London and (i) Bonds are documents County Ban ^ 18 Q B D 515 . containing a promise by the Colonial Bankv. Cady ,ubi sup.; issuer to pay interest, and to _ c> gub nom> W illiams v. repay capital lent, at a future Co i onia i Bank , 33 Ch. D. 388 ; date, either fixed, or to be de- and BQep08t} p . 37. 26 STOCK EXCHANGE SECURITIES. Corporation loans. Scrip certificates. authorised their creation (/), and are mostly transferable at the Bank of England. Local authorities in England, such as County Councils and Municipal Corporations, are frequently given by Act of Parliament powers to borrow money for various purposes. In the case of such loans the method of transfer is provided for in the Acts, and generally resembles that of Consols. When a new issue is made of government securities, or other inscribed stock, payment by the subscribers is usually made by instalments. While any of these in- stalments are outstanding, documents of title are issued, called "scrip certificates" (m), and these are usually transferable by delivery. If a dividend is to become payable before the whole amount subscribed is paid up, a coupon for dividend is attached to the scrip certifi- cates. When fully paid, the scrip certificates can bo converted into stock, and stock certificates to bearer can be obtained, or the stock can be " inscribed." SECT. II. COMPANIES' SECUEITIES. Companies. Many of the securities dealt in on the Stock Exchange are those of joint stock companies, such as railway, docks, banking, industrial, and mining com- panies. English joint stock companies are now almost invariably formed with their shareholders' liability limited to the amount originally paid, or payable, for their shares. Companies' securities consist of debentures, and stock or shares, both of which may be either preferred, ordi- nary, or deferred. Debentures. Debentures are bonds whereby a company in con- sideration of money advanced charges its assets to secure (1} And see Colonial Stock Acts, 1877 and 1892. (m) The term " scrip " is often applied to all sorts of documents of title to securi- ties-. COMPANIES' SECURITIES. 27 the principal advanced, and the payment of interest upon such advance. They form what is called a " float- ing charge," that is to say, the assets for the time being of the company are charged in favour of the debenture holders, but the company can, nevertheless, deal with those assets in the course of its business as it pleases. As soon, however, as default is made in the payment of principal, or interest, the debenture holders can seize the company's assets, and so crystallise their floating charge, and prevent any further dealing with the assets. Debenture bonds are sometimes registered, in which case they are transferable in the books of the company in the same way as shares ; sometimes " to bearer," in which case they pass from hand to hand by delivery. Bearer debentures often have the additional incident of negotiability (n). The mutual relationship of the holders of preferred, Shares and ordinary, and deferred shares or stock in any company stock ' depends entirely upon the constitution of the parti- cular company, but the following is the usual system adopted : The ordinary and deferred shareholders receive no divi- Preferred, dend until the preferred have been paid a fixed amount, deferred! an Sometimes the preference shares are made cumulative ; that is to say, it is provided that nothing shall be pay- able to the other shareholders until the preferred have been paid, not only their fixed amount of dividend for the current period, but also all arrears. Preference shares can also be made to rank first for capital against the assets on a winding-up. The deferred shareholders receive, as a rule, nothing until the ordinary shareholders have received a certain dividend. (n) Bechuanaland Exploration Co. v. London Trading Sank, [1898] 2 Q. B. 658; EdeUtein v. Schukr, [1902] 2 K. B. 144. 28 STOCK EXCHANGE SECURITIES. Transfer. Table A. By deed or writing. Blank transfers. SUB-SECT, (i). TRANSFER BY DEED. Companies may, by their articles of association, have power to issue share warrants to bearer for fully paid shares or stock (o) ; but, as a rule, their securities are deliverable only by deed of transfer; and the documents of title are in the form of certificates, sealed by the company, and made out in the name of the person or persons entitled. In companies to which the Companies Acts apply the shares and stock are transferable as provided by the regulations of the company (p) ; that is, by the articles of association. A form of articles of association, called "Table A.," is appended to the Act of 1862, and, unless expressly excluded by the articles of the company, applies to all companies registered under the Acts. The provisions of Table A. as to transfer are, that the instrument of transfer must be signed by both trans- feror and transferee, and that the transferor remains the legal owner until the transfer is registered by the company (q) . Under Table A. the transfer need not be by deed, and therefore may be by writing only ; but the articles of most companies provide that it shall be by deed (r) . In companies governed by the Companies Clauses Act (.s), that is, generally speaking, railways and other similar undertakings incorporated by Act of Parliament, a deed is always necessary. The question whether a deed is required to transfer the shares of any particular company, or whether the (o) Companies Act, 1867, s. 27. (p) Companies Act, 1862, s. 22. (q) A form of transfer is given in Table A. Art. 9, and is usually copied into articles of association. (r) If a deed is not required by the articles, transfer may be by writing, notwithstanding any practice to the contrary : In re Tahiti Cotton Co., Ex p. Sargent, 17 Eq. 273. (s) 8 Viet. c. 16. COMPANIES' SECURITIES. 29 shares can be transferred by instrument in writing only, becomes of importance in cases where transfers of shares are executed by the transferor with any material parts thereof left in blank. Where the shares are transfer- able by instrument in writing only, the transferee, having implied authority to do anything he can to complete his title, can himself fill in the blanks and get the transfer registered (t). Where a deed is necessary, the transfer, if executed in blank and altered subsequently to execution, ceases to be the deed of the transferor and, in order to be operative, must be re- delivered by him (u) . The transferee, however, can in such a case compel the transferor to carry out his contract by executing a proper deed. All transfers for more than 51. have to be stamped Stamp duty with an ad valorem stamp of about | per cent, on the amount paid by the transferee (x). As on the Stock Exchange this amount generally differs from the amount received by the transferor, it is the usual practice to state in the transfer as the con- sideration received by the transferor, not what he actually receives, but what the transferee pays, and this is the amount on which duty is payable (y}. SUB-SECT, (ii). CERTIFICATES. Companies keep a register of their stockholders or Certificate, shareholders, and the legal title to registered stock or shares is in the person who is properly entered in the register as the holder thereof. As evidence of this title, (t) In re Tahiti Cotton Co., v. Walker, 11 A. C. 20. Ex p. Sargent, 17 Eq. 273. 0*0 See Stamp Act, 1891 () Tayler v. CO. Indian < M & 55 Tlct " c ' 39 )> ss ' 54 to 59, and Schedule, "Convey- Penmsula Ra^l. Co., 4 De G. anCQ Qn Transfer- & J. 559; 26 L. J. Ch. 285, ( y ) St amp Act, 1891, s. 58 709 ; Societe Generate de Paris (4) ; and see post, p. 169. 30 STOCK EXCHANGE SECURITIES. the company issues to the registered holder a certificate under the common seal of the company specifying the shares or stock held by him, and such certificate is prima facie evidence of the holder's title to the shares or stock specified therein (z) . Upon a sale being made of regis- tered shares or stock, although the equitable title thereto passes at once to the purchaser, the legal title (a) remains in the registered holder until the purchaser is registered in his place, or, at all events, has a present absolute and unconditional right as between himself and the company to have the transfer registered (&) . It is a rule with most companies to decline to register a new holder until the certificate issued in respect to the shares acquired by him has been received by the company ; and therefore, for a purchaser to be sure that he will be able to get the legal title, it is necessary for him to ascertain that the vendor's certificate will be surrendered to the company. In order to ensure this in the case of transactions upon the Stock Exchange, it is provided by Rule 104 that a buyer may refuse to pay for stocks or shares, unless the transfer is either accompanied by certificates or Certification. officially certified." Certification consists in writing upon the transfer words to the effect that the certificate relating to the stock or shares transferred is at the office of the company. Where the shares sold form only part of a larger block held by the vendor on one certificate, it is necessary, owing to the length of time which it would take to get new certificates, to have recourse to certification. By secretary I n the case of stock, if a seller has a certificate for a Loan Depart- larger amount than that to be transferred to any single incut. (z) Companies Act, 1862, s. 31. (a) See as to difference be- tween legal and equitable titles, post, p. 144. (b) Societe Oenerale de Paris v. Walker, 11 A. C. 20; Nanney V. Morgan, 37 Ch. D. 346; Moots v. Williamson, 38 Ch. D. 485. COMPANIES' SECUEITIES. 81 transferee, he may deposit the certificate with the secretary of the Share and Loan Department of the Stock Exchange, who forwards it to the company and certifies the transfer (c). In all cases where the certifi- By the cate relates to shares, and in the case of stock where the certificate does not require subdivision, the certifi- cation must be by the company. "When the new holder has been registered in respect of the shares sold, the company issues to him a certificate in respect of his holding. If the old certificate has been subdivided and the vendor retains any of the shares represented by it, the company issues to the vendor a new certificate for the shares remaining unsold. Such a certificate is commonly spoken of as a " balance certi- ficate." By issuing a certificate the company makes a state- Estoppel of ment, upon which all persons are entitled to act, that the person to whom it is issued is a shareholder, entitled to the shares specified therein ; and the company is estopped from denying the truth of that statement as against anyone altering his position to his detriment upon the faith of the certificate (d). The fact that the certificate was obtained from the company by fraud or mistake makes no difference to this estoppel (e) . Where, therefore, a purchaser bought and paid for shares upon the faith of a certificate held by his vendor, the company was compelled to compensate him upon the certificate proving to be invalid (/). So where one having bought shares and obtained a (c) Eule 104. (e} In re Bahia and San (d) Balkis Consolidated Co. Francisco Bail. Co., uli sup. ; V. TomJcinson, [1893] A. C. Sami8 Consolidated Co. v. Tom- 396 ; In re Bahia and San . . -.-, . T> -7 n T T> Q fcinson, uoi sup. : Dixon v. Francisco Bail. Co., L. Jtt. 3 Q. B. 584 ; In re Otto's Kopje Kennaway, [1900] 1 Ch. 833. Diamond Mines, Ltd., [1893] 1 (/) In re Bahia and San Ch. 618. Francisco Bail. Co., uli sup. STOCK EXCHANGE SECURITIES. certificate, resold the shares, believing, upon the faith of the certificate, that he had the shares to deliver, the company was held liable to pay him the amount of his loss incurred through acting upon its certificate (g). Again, where a purchaser, upon the faith of a certificate issued by the company, repaid to his vendor a call on the shares, and the certificate proved to be invalid, the company was held liable to pay the value of the shares (h). So also in the case of a sale of partly-paid shares the company was, as against a bond fide trans- feree, held bound by the certificate as to the amount paid upon the shares (i}. The obligation upon the company which arises upon title?" 1 y the issue of a certificate arises by estoppel, and not upon a warranty that the person to whom the certificate is issued has a good title to the shares represented by it (k). This distinction is of importance, for the company is only liable to one who can show a cause of action against it upon the assumption that those facts are true which it is estopped from denying. Further, as no estoppel can arise, unless the person to whom the repre- sentation has been made has acted upon it to his detri- ment, or has been lulled by it into a false security, and so suffered damage, the presence of one or other of these elements is necessary to give rise to an action against the company. Upon this principle it was held that where a transferee of shares had been registered and received a certificate, in pursuance of a transfer sent in by him, but which proved to be a forgery, the transferee had no right of action against the company, as he had not acted to his detriment upon the faith of any repre- Certificate not When com- pany is not estopped by certificate. (g) JBalMs Consolidated Co. V. Tomkinson, [1893] A. C. 396. (h} Hart v. Frontino Gold Mining Co., L. E. 5 Ex. 111. (i) Surkinshaw v. Nicolls, 3 A. 0. 1004. (k) In re Otto's Kopje Dia- mond Mines, Ltd., [1893] 1 Oh. 618. COMPANIES' SECURITIES. 33 sentation which the company was estopped from deny- ing. The person whose name had been forged to the transfer was in fact the owner of the shares, and the transferee had not acted to his detriment upon the cer- tificate issued to him (/). So when a transferee under a forged transfer received a certificate from the com- pany, and the only detriment to himself which he could allege was that he had not got his broker at once to apply to the Stock Exchange Committee to make the selling broker responsible under Rule 94, the company was held not to be estopped from denying his title. It is to be noted that it was not suggested that he had lost his remedy under Eule 94 (m). Where, however, a person who had no title to shares Transferee purported to transfer them to a transferee, and the res t" e by company issued a certificate to the transferee, who was certificate. Dixon v. thereby lulled to rest, and did not avail herself of the Kennaway. right of action which in the true state of circumstances she then possessed against those who had pretended to sell the shares, the company, upon removing her name from the register, and upon its being shown that the plaintiff's right of action had by then become valueless owing to the insolvency of the fraudulent vendors, was held liable to her for the value of the shares (n) . The result would have been different if the company could have shown that the right of action of the plaintiff against her vendors was valueless at the time when they issued the certificate : for, if that had been the case, she would have suffered no damage from the representation made by the company. In such a case the onus of proving that the right of action was ab initio valueless lies upon the company (). (1} Simmv. Anglo-American Vulcan Ironworks Co., W. N. Telegraph Co., 5 Q. B. D. 188. (1885) 120; and see post, (m) Waterhouse v. London p. 167. and South-Western Rail. Co., (n) Dixon v. Kennaway , 41 L. T. 553; see also In re [1900] 1 Ch. 833. s. D 34 STOCK EXCHANGE SECURITIES. No estoppel against per- son putting forward forged transfer. Simm v. Anglo- American Co. Company has no right of action against such person. Sheffield Cor- poration v. Barclay. Forged certificate. Where the certificate which is relied upon as raising the estoppel has been issued by the company in pur- suance of a forged transfer, the company is not estopped by the certificate as against the person who put forward the forged transfer, and requested the company to register him in respect thereof (o) . But the fact of the forgery would not, it is conceived, prevent the estoppel arising in favour of third persons acting to their detri- ment upon the faith of the certificate (p}. Although the putting forward of a forged transfer deprives the transferee of his right against the company by estoppel, it gives the company no right of action against him for any damages which may accrue to them in consequence of their having recognised him as transferee ( uli SU p. Gold Mining Co., L. E. 5 Ex. Ill ; Inre Otto's Kopje Diamond ( x } Eule 104 - 1)2 36 STOCK EXCHANGE SECURITIES. Whitechurch v. Cavanagh. company, it was formerly thought that the company was estopped from denying that a certificate complete and regular upon its face had been lodged, which, either alone, or together with other documents in the com- pany's possession, showed a primd facie title in the transferor, though it was not estopped from denying the genuineness of the documents or the transferor's title (y). It is now, however, established that no such estoppel arises ; for the company is under no duty to certify, and the secretary is only authorised to give a receipt for certificates which have been actually lodged with the company (z) . The effect of this is to reduce the value of the certification to nothing more than that of a personal assurance by the secretary of the company. Securities to bearer. In English companies. SECT. III. SECUEITIES TO BEAREB, Bearer securities are those for the transfer of which no writing is necessary, but which pass by mere delivery of the documents of title from hand to hand. The principal bearer securities dealt in upon the Stock Exchange are Exchequer Bonds, stock certificates to bearer issued in respect of holdings of Government stock, the bonds and scrip issued by foreign govern- ments, the bonds of companies made payable to bearer, and stock and share warrants to bearer issued by joint stock companies. In the case of English companies, though there is nothing in the Companies Act of 1862 which, in so many words, forbids the creation of shares transferable by delivery, such shares are clearly contrary to the spirit of that Act, and would in all probability be held to be (y) Bishop v. Balkis Consoli- dated Co., 25 Q. B. D. 512; In re Concessions Trust, Mackay's Case, [1896] 2 Ch. 757. (z) Whitechurchy. Cavanagh, [1902] A. C. 107. SECUKITIES TO BEARER. 37 illegal () . In respect, however, of fully paid shares or stock the Companies Act of 1867 expressly permits share warrants to bearer to be issued (6) . In companies subject to the Companies Clauses Act such shares are certainly illegal (c). In the case of most, if not all, American companies American the shares are transferable in the books of the com- panies. In order, however, to make them transferable by delivery, certificates are issued indorsed with blank transfers, and with powers of attorney, also in blank as to the name of the attorney. These, when the power of attorney is signed by the registered holder, pass from hand to hand by delivery (d). To what extent the documents of title to securities which pass by delivery are negotiable instruments de- pends, apart from statute (c), upon the form of the documents and the custom prevailing in England as to dealings in them. Where the form of an instru- Essentials for ment is such that it can be sued upon by the possessor ne gotiabili *y : of it for the time being in his own name, and not in the instrument. name of his transferor, and where, at the same time, ^ ' the instrument is by the custom of trade in this country transferable, like cash, by delivery, the instrument is a negotiable instrument, and passes a good title to the property secured thereby to any one taking it in good faith and for value, notwithstanding any defect in the title of the transferor. Where either of these conditions is absent, the instrument is not a negotiable instrument. In Glyn v. Baker (/), bonds of the East India Com- Glynv. Baker. pany, which were made payable to the obligee and " his () See Buckley (8th ed.), (d) Colonial Bank v. Cady, p. 515. 15 A. 0. at p. 285. (5) Companies Act, 1867, W K S>" East India Bonds v by 51 Geo. III. c. 64, and share warrants to bearer by (c) McEwen v. West London Companies Act, 1867, s. 28. Wharves Co., 6 Ch. 655. (/) 13 East, 509. 38 STOCK EXCHANGE SECUKITIES. Gorgier v. Mieville. London and River Plate Bank. Lang v. Smyth. executors, &c. (by indorsement hereon)," and were indorsed in blank by the obligee, were held not to be negotiable instruments. It was there stated by Lord Ellenborough, C. J., that, even if a custom to treat them as negotiable had been proved, "no right of action could be made to pass by such a practice to the holder of them, where by law no such right passes " (g). This case was cited with approval, but distinguished, by Abbott, C. J., in Gorgier v. Mieville (/?). There it was held that a Prussian bond, whereby the King of Prussia declared himself and his successors bound to every person who should, for the time being, be the holder of the bond, was negotiable, on the ground that it was payable to the bearer, and therefore in its nature precisely analogous to a bank note or bill of exchange indorsed in blank. In London and County Banking Company v. London ond River Plate Bank (i), share certificates of the Penn- sylvania Eailway Company which, upon the face of them, purported to be transferable only in the com- pany's books, though they were indorsed with blank transfers, and though it was proved that, both upon the Stock Exchange and by bankers, they were treated as negotiable instruments, were nevertheless held not negotiable upon the ground that their form was such that no custom could render them negotiable (k). The second condition of negotiability was absent in the case of Lang v. Smyth (/), in which Neapolitan obligations called Bordereaux, though in form entitling the bearer to the security represented by them, were held not (g} 13East, atp. 514. Itwas in consequence of this decision that the 51 Geo. III. c. 64, was passed, conferring the incident of negotiability upon these bonds. (h] 3 B. & C. 45. (?) 20 Q. B. D. 232; 21 Q. B. D. 535. (&) See also Colonial Bank v. Cady, 15 A. C. 267; Part- ridge v. Bank of England, 9 Q,. B. 396. (1} 7 Bing. 284. SECURITIES TO BEAEEE. 39 negotiable instruments, because they did not usually in England pass from hand to hand like money. To make a foreign instrument negotiable it is not Foreign in- enough to prove that it is so treated by the custom of the country of its origin, but it must also be shown in its own country and to be so treated by custom in England () . It has in England. been suggested that a foreign instrument, not treated as negotiable in the country of its origin, cannot be made negotiable by the custom of this country () . But proof that a foreign instrument is by custom negotiable in England is strong prima facie evidence of its negotia- bility in the country of its origin (o). As regards English instruments which were not Crouch v. amongst those treated as negotiable by the ancient law dlt Foncier ' merchant, it was held in Crouch v. Credit Fonder (p) that no usage, however general, could confer upon them the incident of negotiability. In the case, however, of Goodwin v. Robarts (q) , in i n e & ec t which the instruments in question were foreign instru- overruled by (joodwin v. ments, Cockburn, C. J., who delivered the judgment of Robarts. the Exchequer Chamber, said in reference to the deci- sion in Crouch v. Credit Fonder, " We cannot concur in thinking that, if proof of a general usage had been established, it would have been a sufficient ground for refusing to give effect to it, that it did not form part of what is called the ancient law merchant." This judg- ment was affirmed by the House of Lords (r), and in later cases (s) , has been treated as overruling the decision in Crouch v. Credit Fonder. (m) Picker v. London and (p) L. B. 8 Q. B. 374 ; see County Bank, 18 Q. B. D. 515 ; London and County Bank v. Williams v. Colonial Bank, 38 London and Eiver Plate Bank, Ch. D. 388, at p. 404. 20 Q. B. D. 232. () Lang v. Smyth, 7 Bing. ' , . L> R 1Q Ex> 337 ftt 2* 1 ' p. 356. (o) Picker v. London and . . /-* \. T> 7 i. T j m 1 A. C. 4 / 6. County Bank, urn sup. , per Lord. Ester, M. E. (s) Rumball v. Metropolitan 40 STOCK EXCHANGE SECURITIES. Foreign securities which have been held negotiable. Title of bond fide holder for value. Notice. London Joint Stock Bank v. Simmons. The following foreign securities have been held to be negotiable instruments : Prussian Bonds () ; Russian and Danish Bonds (M) ; Russian and Hungarian Scrip (x) ; Egyptian Bonds and New South "Wales Bonds (y) ; French Bonds (z) ; Argentine Cedulas (a) ; Bonds of the De Beers Consolidated Mines (b) ; and American Railway Bonds (c) . It is no longer necessary to tender evidence that such bonds are negotiable, as the Courts will now take judicial notice of the fact (d) Where an instrument is negotiable, anybody taking it in good faith, that is to say, without notice of any defect in the title of transferor, and for value, obtains a title thereto which is good against all the world, notwith- standing that the instrument may have been stolen or otherwise improperly dealt with by his transferor. Good faith is always a question of fact ; and notice of a possible defect in the title of the transferor will, or will not, be imputed to the transferee, according to all the circumstances of the particular case. Lord Herschell laid down the law as follows : " I apprehend that when a person, whose honesty there is no reason to doubt, Bank, 2 Q. B. D. 194 (scrip certificates of an English com- pany); Bechuanaland Explora- tion Co. v. London Trading Bank, [1898] 2 Q. B. 658; Edelstein v. Schuler, [1902] 2 K. B. 144 (debenture bonds of English companies). (t) Goryier v. Mieville, 3 B. & 0. 45 ; Picker v. London and County Bank, 18 Q. B. D. 515. (M) A.-G. v. Bowens, 4 M. &W. 171. (x) Goodwin v. Jiobarts, 1 A. C. 476. (y} London and County Bank v. London and River Plate Bank, 20 Q. B. D. 232. (z) Symonds v. Mulkern, 46 L. T. 763; 30 W. E. 875. (a) London Joint Stock Bank v. Simmons, [1892] A. C. 207. (b} Edelstein v. Schuler, [1902] 2 K B. 144. (c) Easton v. Joint Stock Bank, 13 A. 0. 333; Venables v. Baring, [1892] 3 Ch. 527 ; Bentinck v. London Joint Stock Bank, [1893] 2 Ch. 120; Edelstein v. Schuler, ubi sup. (d) Edelstein v. Schuler, ubi sup., per Bigham, J. SECURITIES TO BEAEER. 41 offers negotiable securities to a banker or any other person, the only consideration likely to engage his attention is, whether the security is sufficient to justify the advance required. And I do not think the law lays upon him the obligation of making any inquiry into the title of the person whom he finds in possession of them ; of course, if there is anything to arouse suspicion, to lead to a doubt whether the person purporting to transfer them is justified in entering into the contem- plated transaction, the case would be different ; the existence of such suspicion or doubt would be incon- sistent with good faith. And if no inquiry were made, or if on inquiry the doubt were not removed and the suspicion dissipated, I should have no hesitation in holding that good faith was wanting in the person thus acting" (e). So it was held that, where a bank advanced money When holder against a deposit of securities made by one whose P ut n . r inquiry. business they knew to be the lending of money to third Sheffield \. persons against deposits of securities, the circumstances J ^^\ Joi ^ i were such as to put the bank upon inquiry as to the andio* true ownership of the securities, and so prevent the bank gk v C from holding them against the true owner (/) . Where, Simmons. however, the same bank made advances to a stockbroker against a deposit of securities, the House of Lords held that the circumstances were not such as to put the bank upon inquiry, and that consequently the securities could be held by the bank against the true owner (g). The giving up of any right, even though the existence Value, of such right be unknown to its possessor, or the under- London and ... ,,.,.,.. ~, . County Bank - taking oi any personal liability, is sumcient to amount i n g Co. v. (e) London and Joint Stock (g} London Joint StocJc Sank Bank v. Simmons, ubi sup., at v. Simmons, [1892] A. 0. 201 ; p. 223. followed in Bentinck v. London (/) Sheffield v. London Joint Joint Stock Bank, [1893] 2 Oh. Stock Bank, 13 A. 0. 333. 120. 42 STOCK EXCHANGE SECURITIES. Lotidon atid Hirer Plate Bank. Edehtein v. Schiller. to a giving of value. For instance, where a bank manager stole bonds belonging to his bank and pledged them with a third person, and subsequently, before the theft was discovered, got them back by fraud from the third person, and replaced them, it was held that the loss by the bank of the civil action against its manager for the conversion of the bonds by him was a sufficient giving of value by the bank, to make them holders for value of the bonds (A). So also, where stolen negotiable instruments were sent to a broker for sale, and sold by him upon the London Stock Exchange, it was held that the fact that he had entered into a contract upon the Stock Exchange, whereby he became personally responsible, amounted to a giving of value, and protected him from liability for conversion of the bonds (i). SECT. IV. DIVIDENDS AND EIGHTS. Dividends and rights. The holder of securities may become entitled to interest or dividends, or to certain rights, such as the right to apply at a certain price for new shares issued by a company in which he is a shareholder, or for shares in some other company. Sale cum or ex. A sale of securities may be made to include such interest, dividends, or rights, or to exclude them, and the sale is accordingly spoken of as " cum " or " ex " interest, dividend, new, or rights. The general rule of law is that upon a sale, where nothing is said to the contrary, all such rights pass to the purchaser. So all dividends declared after the sale, although for a period anterior to the sale, belong to the purchaser (k) ; and when new shares are issued in respect General rule. (A) London and County Bank- ing Co. v. London and River Plate Bank, 21 Q. B. D. 535. (i) Edelstein v. Schuler, [1902] 2 K. B. 144. (k) Black y. Homersham, 4 Ex. D. 24. DIVIDENDS AND RIGHTS. 43 of old, and the seller, by reason of being on the register, receives the new shares, he is a trustee of them for the purchaser (I) . Further, in dealings on the Stock Exchange in secu- ? i f. 8 t pon ^ i " rities deliverable by deed of transfer, and which are for dividends. dealt in " cum div.," every seller is responsible to his immediate buyer for dividends received, until reason- able time has been given to the transferee to get his name on to the register (m). This time, in the case of American Railway Secu- rities, is fixed at thirteen days (n) , and, in the case of South African shares, when the office for registration is in South Africa, at six weeks (o), between delivery and the closing of the books of the company for the purpose of ascertaining who is entitled to dividends. If, in these cases, delivery is made less than thirteen days, or six weeks, before the closing, the seller remains liable, until the books have re-opened and the balance of the thirteen days or six weeks have elapsed. Presumably also in the case of other securities, where delivery is made at such time as not to allow the purchaser a reasonable time for getting on the register before the books are closed, the seller remains liable for the balance of the reasonable time after the books are re-opened. The result of these rules is that the ultimate purchaser can hold his immediate seller responsible for dividends re- ceived by the ultimate seller as trustee for the ultimate purchaser ; and each intermediate purchaser can simi- larly hold his seller responsible, provided the books close before the ultimate purchaser has had time to get on the register ; but if the ultimate purchaser delays, and the books close, without his having availed himself of the opportunity of being registered, all the intermediate (I) Stewart v. Lupton, 22 (m) Eule 94. W. E. 855. () Ii>- 75. ((>} Ib. 76. STOCK EXCHANGE SECURITIES. parties cease to be answerable for dividends, and he must look to the ultimate seller alone. OfficSf SB? On the Stock ExcllaD g e securities are quoted " ex " ex or cum. or " cum " these various rights in the Official List, and where nothing is said as to such rights at the time of the sale, they remain with the seller, or pass to the pur- chaser, according as the securities are at that time being quoted in the Official List " ex " or " cum." If the securities are not quoted in the Official List at all, the dealers in the market fix the dates on which they are quoted " ex " or " cum." British and India stocks are quoted " ex div." on the day after the books are closed for the purpose of ascer- taining to whom the dividend is payable (p). Shares or stock deliverable by deed of transfer, except those dealt in in the Mining Market, are quoted " ex interest " from the beginning of the account in which the interest becomes payable. When a dividend is payable in respect of such securities, they are quoted " ex div." from the beginning of the account following that in which the dividend is declared, pro- vided the dividend be made payable to the holders then registered (q] . When the dividend is not made payable to the holder registered at the time of the declaration, but the company subsequently closes its books to ascer- tain to whom the dividends should be paid, the secu- rities are not quoted "ex div." until the beginning of the account following that in which the books are closed (r). Securities deliverable by deed, and dealt in in the Mining Market, are quoted " ex div." from the begin- ning of the account in which the dividends are declared (r\. Securities to bearer are quoted " ex div." on the day upon which the dividend is payable (r). (p) Eule 148. (?) II. 149. (r} Ib. 149. DIVIDENDS AND EIGHTS, 45 Where the current coupon for interest or dividend on bearer securities is not payable until after the settling day of the account in which the bargain has been made, the securities must be delivered with the coupon attached (s), so that the purchaser may make use of it to get payment. If the coupon is not delivered, the purchaser has the right to demand its market value, which, in case of dispute, is fixed by the Secretary of the Share and Loan Department (s). When, however, the coupon is payable on the settling day, it is retained by the seller (s), and he gets it cashed; but, as the sale will have been "cum div." (t), the purchaser deducts the amount of the dividend from the price he has agreed to pay. Shares in foreign railways are, where practicable, quoted " ex div." or " ex interest " at the same time that they are so quoted on foreign bourses (u). In all these cases, as soon as the interest or dividend has been paid, the quotation will again be " cum " the next payment of interest or dividend. Exchequer Bills and Indian Rupee paper are always quoted " ex div.," the purchaser having to pay interest up to the date of sale in addition to the bargain price. It may, then, be stated that where the quotation is General rule, not " ex " interest or dividend, the accruing interest or dividend belongs to the purchaser. Bonds and debentures in railways in the United Kingdom and India are so dealt in, that the interest which accrues up to the day for which the bargain is done, which will usually be next account day, belongs to the seller, and is paid by the purchaser on completion, and received back by him in the next pay- ment of interest (x) . This does not apply to bonds and debentures in foreign and colonial railways, which are (s) Eule 74, (u) Ib. 148. (*) Ib. 149. () Eor the machinery 'by which this is effected, Bee post, pp. 69 et seqq. THE MAKING OF BARGAINS. 51 When this is the case, the dealings are said to be " speculative," as opposed to " investment " ; but such speculation is recognised as perfectly legitimate trad- ing (c'), and must in no way be confounded with dealings which are gaming and wagering (d). SECT. I. THE MAKING OF BABGAINS. SUB-SECT, (i). ORDINARY PURCHASES AND SALES. A member (e) desiring to purchase or sell securities Making a goes to that part of the Stock Exchange, which is frequented by the dealers in that particular class of security, and is called the "market." There, if the security is one much dealt in at that time, he may hear it being offered or bid for by the dealers. The dealers call out " Sell " or " Buy," as the case may be, naming the securities and the prices ; that is to say, they make general offers to sell or buy at the prices named. The dealer may state how many securities he is prepared to buy or sell. If he does so, it is open to (c) Forget v. Ostigny, [1895] enable him to re-buy at a A. C. 318, per Lord Herschell. lower price before the time for (d} See post, Chap. V . There delivery arrives. The two BuU and bear, are two Stock Exchange terms terms are used also in a some- in frequent use in referring to what wider sense, any one who speculative dealings, namely, has bought shares to be de- " bull" and "bear." A "bull" livered at a future date being is a person who has bought termed " bull," and anyone securities, to be paid for at a who has sold shares for de- future date, in the hope that livery at a future date being the price will rise, and thus termed a "bear." enable him to sell them at a ( e ) Usually a broker. If a profit before that future date. jobber wiglies to deal in anotlier A "bear" is a person who has , , , , v , market, he may deal himself, sold shares, for delivery at a future date, in the hope that but more frequently employs the price will fall, and thus a broker to deal for him. E2 THE COURSE OF BUSINESS. any one to accept the offer, and so make a binding contract. The acceptance must, however, be for a marketable quantity, not exceeding the amount offered. Further, in the case of securities to bearer, the accept- ance must be for not less than 1,000/. stock or scrip, 750 francs French Eentes, or ten shares ; and also must be for these amounts or exact multiples thereof (/). Thus an offer of 7,500 francs French Rentes may be accepted for 750, or for 1,500, but not for 1,000, francs. If the dealer does not limit the amount of his offer, it can be accepted up to the amount of 1,000/. stock or fifty shares, unless the shares are of market value either greater than 15/. each or not greater than 11. each, in the former of which cases the offer is only binding up to ten shares, while in the latter it is binding up to 100. United States bonds or shares to bearer when no amount is named can be accepted to the amount of 5,000 dollars or 100 shares (g). If the price quoted suits the member desiring to effect a bargain, he can close at once by saying " Yes," or otherwise indicating acceptance of any amount of the security within the prescribed limits. If the member offering inquires " How many ?", or otherwise shows that he is prepared to deal at the price named by him in any number the other may choose, the latter may close the bargain for an amount limited only by the number of shares, or amount of the security, that exists. So, it is said, a dealer offered several times a large amount of French Eentes at the same price. Each offer was accepted by the same buyer for the whole amount. The dealer then said, " How many do you want?" Thereupon the buyer replied, "Buy 750,000"; and the Committee decided that the dealer was bound to deliver that number. (/) Eules82, 93, 116. (g) Ib. THE MAKING OF BARGAINS. If the prices or amounts publicly offered do not suit, or if no dealer is offering to deal in the required security, the member desiring to deal may go to a dealer and ask him to " make a price," either generally, or in a specified number (h). The dealer, if it suits him to do so, then gives two quotations, one being the figure at which he is prepared to buy, the other that at which he is pre- pared to sell. The quotation having been given, it is an offer to buy or sell at the prices mentioned, the specified number, if any, or if no number is specified, any desired amount within the limits stated above, and can be turned into a contract by the other saying, in the case of a general offer, " Buy " or " Sell " so many, or, in the case of a price being made in a definite number, by simply saying, " Buy " or " Sell." Where a price has been asked for a definite amount, the offer can only be accepted for that amount, and not for any less quantity. It may happen that no dealer will make a price, no one being willing to take the risk of having to buy or sell at the other's option. In this case the person seeking a quotation may find himself forced to disclose to the dealer whether he wishes to buy or sell, or, as it is called, to "open" to him. The dealer can then quote or not as he pleases. The bargain being made, it is usually at once entered by both buyer and seller in a small book called the " Jobbing Book." No written contract is made ('). (h) A dealer is often asked so taken, it would be looked for a quotation, when informa- upon as very sharp practice, tion is desired as to the state Where an offer is required, the of the market, e.g., broker to usual formula is, "I want to jobber, "What are Char- deal in Chartered," or, " What tered?"; jobber to broker, are Chartered? I want to deal." " 2 to re " (i.e., 2 to 2f 6 ). This (?) As to the necessity in law might be technically an offer for a written contract, see post, to deal at these prices, but if p. 129. THE COURSE OF BUSINESS. Marking bargains. Books. Either party may then " mark " the bargain by writing on a slip of paper the name of the security and the price, signing the slip, and placing it in a box kept in the Stock Exchange for that purpose. The slip is taken from the box by the Clerk of the House, and the price written by him on the list. There is no obligation on any member to mark a bargain ; but, if it is done, it must be done at once, as otherwise there may be intervening fluctuations in the price of the security, and to place on the list the price at which the bargain had been effected would be mis- leading to other members. However, by Rule 150, under certain circumstances, the Clerk of the House, with the concurrence of a member of the Committee, may order the quotation of an omitted bargain. The prices of the bargains thus marked and quoted go into the Official List (7c), and can only be expunged by the authority of the chairman, deputy chairman, or two members of the Committee (/). On the return of the contracting members to their respective offices, a record of the transaction is made in their various books. A broker, if acting for a client, has entries made in his " clients' ledger," and also, in all cases, in his "checking book," "journal" or "day book," and "jobbers' ledger." The entries in the "journal" are made under the names of the various securities, those in the "jobbers' ledger" under the names of the various jobbers, and those in the " clients' ledger " under the names of the various clients. A jobber also enters the bargain in his " checking book," in his "journal," and "jobbers' ledger," this latter book being arranged according to the names of the brokers or jobbers dealt with (m). (k) Ante, p. 9. (Z) Eule 151. (m) No "brokers' ledger" is kept, all bargains with THE MAKING OF BARGAINS. 55 The next morning the checking books of both parties Checking are taken by their clerks to the checking room in the ar & ams - Stock Exchange, and each bargain is read out and checked, one clerk saying, e.g., "Sell you 500 Band- fonteins at 3," and the other replying, "Buy 500 Eandfonteins at 3." If the entries do not tally, and the members concerned cannot agree, the matter is sub- mitted to the arbitration of two other members. If none are willing to act, or if the arbitrators cannot agree, then it is referred to the Committee (n). All bargains, unless it is otherwise agreed, are for Time for completion on the settling day of the current account, bargains. 11 ' except that, in the case of securities transferable by deed, bargains made after one o'clock on the first making-up day, and, in the case of bearer securities, bargains made after one o'clock on the day before ticket day, are for completion on the settling day of the ensuing account (o). When there has not yet been a special settlement in the securities dealt in, all bargains therein, unless otherwise agreed, are for completion on the special settling day. Bargains for the " coming-out " of a new company registered abroad are for completion on the next settling day, special or otherwise, after the company has issued certificates (p). If specially agreed between the parties, the bargain may be for cash, that is to say, for immediate com- pletion, or for completion at any time the parties may choose ; but under the rules claims arising from any bargain for a future account in English, India, Corporation and Colonial Government inscribed stocks, if made more than eight days before the close of the members, whether jobbers or (o) Eules 80, 91, 114. brokers, being entered in the (P^ Hunt > Cox & Co - v - -uv . i j Chamberlain, 12 T. L. E. 74, " lobbers ledger." 186. Bargamsforthe"coming- (n) Exile 66. out" are now very rare. 56 THE COURSE OF BUSINESS. existing account, or in securities transferable by deed or bearer securities, if made for a period beyond the current and two ensuing accounts, will not be allowed to rank for dividend against a defaulter's estate until all other Stock Exchange creditors have been paid in fallfc). SUB-SECT, (ii). OPTIONS. Apart from ordinary purchases and sales, there is a method of dealing on the Stock Exchange which is carried on to a very large extent, known as option dealing. Options are of two kinds, called respectively " puts " and " calls." A "put" is the right to make the member giving the option take delivery at a future date of an agreed amount of some security at a fixed price. A " call " is the right to make the member giving the option deliver at a future date an agreed amount of some security at a fixed price (r). Put-and-call. The two are also combined in what is known as a " put-and-call," that is, the right either to " put " or "call" the securities as the person who obtains the option chooses (s). The consideration paid for options is known as option money: it varies according to the securities dealt in and the state of the market, and is a matter of arrange- ment between the parties. In many kinds of securities, however, the option dealings are so numerous that there are regular quotations for the put, call, and put-and- call, the charge for the put-and-call being the same as Put. Call. Option money. (q) Eules 81, 92, 115; and see post, p. 94. (r) The times for declaring whether the option will be exercised or not, when no special agreement is made, are fixed by Rule 77 ; and see post, p. 60. (s) Eules 81, 92, 115, apply to options; see>os, pp. 94 96. THE MAKING OP BARGAINS. 57 that for the put alone and the call alone added together, and the charge for a call being generally the same as that for a put of the same securities. These quotations for options are, like quotations for ordinary dealings, at two prices, namely, the price at which the dealers are prepared to give an option, the other the price at which they will take an option, the difference being the " turn of the market." Option money is not payable in advance, but becomes payable at the end of the period for which the option is given. As an illustration of an option let us suppose that the market price of Randfonteins is 3. A member desiring an option gets a quotation from another member, say, for a call of 1,000 shares at 3 for the end of the next account. For this he has to pay, say, | a share. If during the stipulated period the shares rise in price to more than 3i a sale can be effected, and when the time o * comes they can be called at 3, and so a profit is made. If, on the other hand, the price falls, the loss is limited to the amount paid for the option, which naturally is not exercised. So with a put of the same securities at the same price ; if the price falls below 2| the shares can be obtained at the current price, and when the time comes put at 3, while if it rises the loss is limited to the amount of the option money. With a put- and- call of the same shares obtained, say for , a profit can simi- larly be made if the shares either rise above 3| or fall below 2f . In all these cases, if the price at the end of the period shows any profit on the option price, even though it be less than the amount paid for the option, the holder of the option would exercise it, and so save a part of his option money. As an instance of what is sometimes done, if the option deal is successful, let us take the same case, namely, a call of 1,000 Eandfonteins at 3, for which | has been paid. Suppose the price rises to 3 ; the holder of the option sells on the market, say, 500 58 THE COURSE OF BUSINESS. Randfondteins at that price, with the result that he is without any risk of loss, and certain to make a profit, if the shares keep above 3 or fall below 3. For, if the price remains above 3, he can sell the second 500, and then call the whole 1,000, making his profit on the second 500. Or if the price falls below 3, he can abandon his option, and buy on the market 500 at the lower price to deliver against his sale at 31. The amount of profit in the first case would be anything more than 1,500/., which he succeeded in obtaining for the sale of the second 500 ; and, in the second case, the difference between 1,500/. and the amount paid for the 500 shares bought on the market. If after the sale of the first 500 at 3J, the price recedes again to 3|, he can sell the other 500 at that price, and, when the time comes, call the whole 1,000 at 3, and thus make a profit of | on 500 and | on the other 500, or, deducting the option price, a net profit of | on 500. If the price falls below 3, say to 2|, he does not exercise his option at all, and so loses the | option money on the 1,000 shares ; but he buys in the market 500 at 2|, and de- livers them to complete the sale he has made at 31, thus receiving a profit of | on 500 shares less the | option money on the 1,000, or a net profit of 1 on 500 shares. If after the sale of the first 500 at 31 there is a further advance in price, he calls the whole 1,000, gets his option money back by delivering 500 at 3j, and makes his profit by selling the second 500 at the advanced price. The above is a simple instance of option dealing, and it will be readily understood that option dealing becomes very complicated. Conversion of For practical purposes, a put can be rendered equiva- lent to a call, and vice versa ; for if the holder of a put buys the same amount of the securities in the market, he makes a profit on this purchase if the price rises ; while if it falls, he takes delivery of the securities THE MAKING OF BAKGAINS. 59 bought in the market, and puts them in the exercise of his option. So the holder of a call can, by selling the same amount of the securities, practically turn his call into a put ; for if the price falls, he makes a profit on his sale ; while if it rises, he exercises his call, and delivers to the person to whom he has sold. It sometimes happens that a put or a call of a large number of shares cannot be obtained, while a put-and- call can. By making other bargains in the shares in the market, a put-and-eall of one-half the amount re- quired can be rendered practically equivalent to a put or a call of the whole amount. For instance, if a call of 1,000 Randf onteins is desired and cannot be obtained, but a put-and-call of 500 can, the member desiring the option can take the put-and-call of the 500, for which he will have to pay the same amount as for a call of 1,000, and at the same time purchase 500 in the market at the option price. If the shares rise, he calls the 500 and sells at the enhanced price those 500 and the 500 bought, and thus makes a profit equal to that which he would have made by calling 1,000 ; while if they fall, he gets rid of the 500 which he has bought on the market by putting them at the option price, and so loses only the option money. When the public purchase options they are usually Broker con- speculating for the rise, and would therefore give their v ^f> g brokers instructions to buy for them a call. If a broker option, instructed to buy a call were to obtain a put-and-call of half the amount, and make a purchase of the other half, his client for practical purposes would get what he wanted, but unless the broker explained to him how the bargain had been carried out, it would seem that the client would not be bound by the bargain, for the broker has not made the bargain he was instructed to make, and, as to one-half of the shares, has really put himself into the position of a principal (t). (t) As to the effect of a broker acting as principal, see post, p. 102. 60 THE COUR8E OF BUSINESS. Declaring options. Option dealing not gaming. The times for declaring options, that is, for giving notice that they will be exercised, is fixed by the rules (M) ; and if the notice is given too late, the option will be lost. But by custom, if the price on the day for declaring is such as to show any profit at all, the option money not being taken into account for this purpose, the holder of the option is deemed to have exercised it, unless he gives notice to the contrary, for, as it is said in such case, the option " declares itself." Option dealing is a recognised method of dealing in stocks and shares, and option bargains made in the ordinary way on the Stock Exchange are not void under the Q-aming Acts (x). SUB-SECT, (iii). ARBITRAGE. Arbitrage. A very large amount of business in securities is done, both on and off the Stock Exchange, by buying in one market and selling in another. Prices at different exchanges are not always exactly the same, and it is often possible, especially by the use of the telegraph or telephone, to buy in one market, and almost contem- poraneously sell at a higher price in another. This operation when conducted between London and foreign exchanges is known as " arbitrage " ; when between London and provincial exchanges, or between Shunting. two provincial exchanges, is called "shunting." Arbitrage dealings, in order to be successful, of course require promptness, and also intricate calculations ; for many things have to be taken into consideration, such as the current rate of exchange where one bargain is to be paid for in English money and the other in foreign, and the question whether the quotations in the particular country include accruing interest or dividends. (tt) Rule 77. (x) Buitenlandische Bank- vereeniging v. Hildersheim, 19 T. L. E. 640; and see post, p. 227. CONTINUATION OF BARGAINS. 61 SECT. II. CONTINUATION OF BABGAINS. SUB-SECT, (i). CARRYING-OVER. It has been shown that securities are generally Carrying- hought or sold for delivery on the next settling day ; over- but it frequently happens that the seller does not wish to deliver, or the buyer does not wish to take delivery of, the securities he has dealt in. In this event com- pletion is often postponed to the next settling day, and so on from account to account, by the process known as " carrying-over." There is no obligation on either party to consent to carry-over, unless he has agreed to do so ; but each can always insist on delivering, or having delivered to him, what he has sold or bought. Unless, however, there is great scarcity of the particular security, or some other unusual circumstance, it is generally possible to effect a carry-over either with the party to the original bargain or with some one else. The first step in the machinery for carrying-over is the fixing of a standard price at which carrying-over may be effected. This price is called the making-up Making-up price. Two days before settling day in English, P nce< India, Corporation and Colonial Government stock, the Clerk of the House ascertains the price at which dealings have taken place between certain hours. He then takes the average of those prices, and fixes the making-up price at that average (y). For all other securities the Clerk of the House ascertains the actual market price at noon on contango day, and fixes that as the making-up price (z). As (y) Rule 90. He also takes also on account day. the average prices on ticket (2) Rules 111, 123. A day, and in the case of English, making-up price is also fixed India, and Corporation stocks in the same way on ticket day. THE COURSE OF BUSINESS. Sale and re-purchase. Differences. there are two prices current, namely, a buying and a selling price, he fixes the making-up price half way between the two. A list of the making-up prices is published in the Settling Room, and also printed. All continuations must be effected at the making-up price, or the then existing market price (). The carrying-over of bargains is effected on the first day of each settlement, which is known as contango day. When the carrying-over is effected between the parties to the original bargain, it consists of a sale for the current account at the making-up price (b) by the purchaser to the seller of the same amount of securities as he originally bought, which closes the bargain then open by rendering each party liable to deliver and to receive the same number of shares, and a contem- poraneous purchase at the making-up price for com- pletion on the settling day of the ensuing account by the original seller from the original purchaser of the same amount of the securities. The result of these two operations is that the old bargain is closed, and a new one is open for the ensuing account, at the price fixed. Unless the making-up or market price of the security is exactly the same as that at which the bargain was originally effected, there will be a sum of money, known as a " difference," payable by one party to the other, according as the price has risen or fallen, for each will have bought at one price and sold at another. If, for instance, A. buys 100 Randfonteins from B. at 8 and desires to carry-over the bargain, and on contango day the making-up price is 2f, A. re-sells to B. at 2f , and has to pay a difference of f per share ; he also makes a contemporaneous purchase, and so has open for the next account a purchase of 100 Eandfonteins at 2|. (a) Eule 71. (6) Continuation at the "then existing market price" only occurs under exceptional circumstances, as when a con- tinuation is arranged after contango day. . CONTINUATION OF BAEGAINS. 63 Differences are payable on the settling day of the current account. For the accommodation so afforded a charge is made, Contango and called a " contango," which is reckoned either at so much fa^. a share or so much per cent., the rate varying according to the nature of the security, the state of the money market, and state of the market in the particular security. If there is a large hull account open, that is to say, if many securities of that kind have been bought which the purchasers do not desire to take up and pay for, the rate charged will be a comparatively high one, and it may even be impossible to get the bargain con- tinued at all. If. on the other hand, there is a large bear account open, that is to say, if many of the securities have been sold which the sellers do not desire, or are unable to deliver, the rate will be comparatively low. If the bear account is very large, and consequently the securities are very scarce on the market, it may happen that a buyer, instead of having to pay a contango for having the completion of his bargain postponed, will be able to make the seller pay a sum of money to be allowed not to deliver the securities. This sum of money, which is at a varying rate, as in the case of a contango, is called a " backwardation " (c). If one of the original parties to the bargain is un- Carrying-over willing to have it so continued, the other can often effect ^otVparty to a carrying-over with some one else, by selling to him or the original buying of him, for the current account at the making-up price, and buying back of, or selling back to, him for the next account at the same price, paying or receiving a contango or backwardation, as the case may be. He also, of course, pays or receives the difference, if any, (c) Jobbers generally quote rying-over. The difference two prices, one the rate they between the two is the turn of will give, and the other the the market, and represents the rate they will require on car- jobber's profit. 64 THE COURSE OF BUSINESS. between the original price and the price at which he has carried-over. On the next day of the settlement, name day or ticket day, he passes, in the manner described hereafter (d), the name of the person with whom he has carried-over, or the name of some one else supplied by such person, to the other party to the original bargain. The bargain for the current account is completed by delivery and payment between these two, or such persons as they may name, and there remains open only a bargain for completion on the settling day of the ensuing account. It is to be observed that where the carrying-over is effected between the original parties no securities actually change hands, a difference merely being paid ; but where it is effected with a third person, such third person will have to deliver or take delivery, as the case may be, unless he in his turn is in a position to provide another who will do so. It is important to bear in mind that carrying-over is really two transactions of sale and purchase, and not in the legal sense a loan, particularly as the term "borrowing" and "lending" are sometimes applied to carrying-over. Thus, when the state of the market is such that there is neither a contango nor backwardation payable, a seller who has his bargain carried-over by buying from a third person for the current account and selling to him for the ensuing account is called a borrower of the securities, and the third person a lender ( whfle ^ other him by selling for the current to " take in " the securities. CONTINUATION OP BARGAINS. 65 treated as an entirely separate transaction (/). A member who has " taken in " securities upon continua- tion can deal with them as his own ; whereas, in the case of a real loan of money against a deposit of stocks or shares, the lender of the money simply holds them as security for the loan, and, subject to his right of repledging, cannot deal with them in any way, unless and until the person accommodated makes default, and can be called upon to return the identical securities when the loan is paid off (g). In the case of a con- tinuation all profit or loss accrues to the " taker in " or borrower of the securities ; in the case of a loan, to the borrower of the money. So if the price varies, in the case of a continuation the variation affects both parties ; if it rises the " taker in " makes a profit, and the other a loss ; if it falls the taker in makes a loss, and the other a profit. In the case of a loan the whole risk of profit or loss is on the owner of the securities, that is, the borrower of the money. So, too, if the securities are redeemed, as is often the case when bonds are drawn and paid off, in the case of a continuation any benefit or loss incurred by the redemption belongs to the " taker in," for his obligation is to deliver the same amount of securities, and not the identical securities ; in the case of a loan such benefit or loss belongs to the boiTOwer of the money, for the securities remain his, and the obligation of the lender of the money is to return the identical securities, or whatever properly represents them (A). (/) In re Overweg, Haas v. Bongimanni v . Socists Durant, [1900] 1 Oh. 209. ^ ^ L T 32 ( D> ^ Watte, 6 Eq. 165; Allen v. Graves, L. E. 5 Q. B. 478; W And see post, p. 139 s. 66 THE COURSE OF BUSINESS. SUB-SECT, (ii). STOCK EXCHANGE LOANS. Stock Ex- Loans are frequently made by one member to another ins * against the deposit of securities. Such loans are usually until the next account day, on the terms that either party shall be entitled to determine the loan on account day, or if not so determined, it shall continue until next account day, and so on from account to account. If the securities have fallen in price on any account day, the borrower pays off part of the loan or gives further security ; but if they have risen, the lender may make a further advance or return part of the securities. It was at one time stated to be the practice that such loans should be for the full market value of the securities (i) ; but now it is more usual that they should be for less than such value, and that the lender of the money should have a " margin " or " cover." On default being made by the borrower in the payment of interest, or in repayment of the principal, or, where the price has fallen, in the repayment of part, or the giving of further security, it was held by the Courts in 1861, that the lender is by custom entitled either to retain the securities as his own at the market price or to sell them, being entitled in either case to claim any deficiency from the borrower, and having to account to him for any surplus (&). The question does not seem to have come before the Courts since that date, and such custom seems no longer to obtain. It was at one time stated to be the practice for the lender to send the securities to the borrower on account day, and for the borrower, on the same day, either to pay off the loan or to return the securities to the lender. It was held that a lender (i] In re Morgan, Ex p. D7 . . 7 . , f ,, v ' * Phillips, urn sup. : see Mccatta Phillips, 30 L. J. Bk. 1 ; 2 De G. F. & J. 534. v> Bell > 27 L ' J " Ch> 237 ; 24 (&) In re Morgan, Ex p. Bea v- 585 - COMPLETION OF BARGAINS. 67 did not lose his right to the securities by so returning them, if the borrower did not give him a good cheque in payment of the loan, or send back other securities of an equal value (/). This practice also is obsolete ; the lender does not now return the securities without being paid. He does, however, often return them in exchange for a cheque, which, of course, may be dishonoured, and the case referred to would seem to be an authority under such circumstances. The practice as to such loans where one of the parties is declared a defaulter is dealt with elsewhere (m). SECT. III. COMPLETION OF BABGAINS. During each account there are, in the ordinary course, numerous dealings in the same kinds of securities, and on settling day there are consequently many members who have bargains to complete; and some of these members may have both bought and sold the same securities. No sale can take place without a correspond- ing purchase, and it therefore follows that there must always be exactly the same amount of any security bought as sold. It would be most laborious, and would cause in- finite delay, inconvenience, and expense, if every seller had to deliver securities to his immediate purchaser, and actually transfer to him, and receive payment, when both may have had other dealings in the securities, and have bought from or sold to other members, who also may have resold or repurchased. To avoid this, the following methods have been adopted. (I) Surra v. Ricardo, 1 0. & E. 478. (m) Post, p. 96. F2 68 THE COURSE OF BUSINESS. Making-up. Making- down. SUB-SECT, (i). MAKING-UP. If A. has bought from B., and B. from A., they can agree to set off one bargain against the other, and so save the necessity of completing both bargains ; or. if the bargains are not for the same amount, they can agree to complete only as to the balance. Further, if A. has bought from B., B. from 0., and C. from A., all three can agree, where the dealings have been in the same amounts, that there shall be no delivery, and that the whole matter shall be adjusted by payment of differ- ences, consisting of the profit or loss made by each. Where the dealings have not all been in the same amounts, they can agree that the whole matter shall be adjusted by the payment of differences on the amount each has both bought and sold, and a delivery of the balance only. Such arrangement is called a "make- up." A more complicated instance of a make-up occurs where A. buys from B., B. from 0., C. from D., D. from E., E. from B., and B. from X. On a make-up being agreed upon by B., 0., D. and E., C., D. and E. drop out and settle their bargains with each other, and with B., by payment of differences only, while X. delivers to B., and B. to A. It is to be observed that in so making-up no one has to open an account with any one with whom he has not already dealt. From this must be distinguished what is known as a " make-down," which is often confounded with a make-up. A make-down consists in one party to a con- tract agreeing to accept a third person in substitution for the party with whom he originally dealt, and it therefore involves the opening of a new account. Thus, when A. has bought of B., and B. of X., as is the position in the last instance after the make-up, B. may ask A. and X. to make-down. If they agree to do so, COMPLETION OF BARGAINS. 69 B. is relieved from further liability, and A. and X., who have not dealt together, have to open accounts with each other ; and X. delivers to A. in pursuance of the new bargain so made (n) . Making-up and making- down depend upon agreement between the parties. It has been decided that making-down is not obligatory (o) , and the same is true of making-up. Except where there is a making-up between all parties, there is always an ultimate seller and an ulti- mate purchaser, one of whom has to deliver the securities, and the other of whom has to take delivery. The machinery of the settlement, as presently described, is devised to bring these two persons together in as expe- ditious and economical a manner as possible. SUB-SECT, (ii). PASSING NAMES AND PAYMENT OF DIFFERENCES. A member who has bought securities has to do one Passing of two things; either pass his own name and take names - delivery of them himself, or pass the name of some one else who is liable to him to do so ; while a member who has sold securities has either to deliver them or, by passing on the name he receives, to provide a substitute who is liable to do so. The member who is thus sub- stituted has in turn the same alternative course. Thus, each member who has sold any security receives a " name," and, if he has also bought the same amount of the same security, passes it to the member from whom he has bought, until it comes to the member who intends to deliver, and so finally the ultimate seller and ultimate purchaser are put in direct communication. () Instances of making- broker, and when a client has down frequently occur when dealt through more than one a broker defaults, and a client broker in the same account, completes through another (o) Currie v. Sooth, 7 C. 0. 77. 70 THE COUltSE OF BUSINESS. But this is not all that has to be achieved. All the intermediate parties have probably bought at one price and sold at another, and it is necessary to provide a means for the settlement of their profit or loss. Here, again, except in the case of such securities deliverable by deed as are not subject to arrangement by the Settlement Department, and in the case of English, India, Corporation and Colonial inscribed stock, the making-up price is brought into use (p). The ultimate purchaser pays the making-up price to the ultimate seller ; and each member on the line along which the bargain is traced settles with his immediate contracting party by paying to, or receiving from, him the difference between the price of the bargain between them and the making-up price. The result is that the ultimate purchaser in fact pays his contract price ; for if the making-up price is higher than his contract price, he gets back the difference from his immediate contracting party, and if it is lower, he pays the difference to him. The ultimate seller in the same way receives his contract price, and the intermediate parties pay or receive only the amount of their loss or profit. In the case of securities deliverable by deed which are not subject to arrangement by the Settlement Department, and of English, India, &c. stock, the making-up price is not used in this way, but the adjustment is made with reference to the price marked on the ticket, which is that to be paid by the ultimate purchaser. The ultimate purchaser pays this amount to the ultimate seller, and the intermediate parties pay or receive the difference between that amount and their bargain prices. (p) Kules 96, 119. The by deed and bearer securities making-up price for this pur- is that fixed for the day before pose in securities deliverable ticket day. COMPLETION OF BARGAINS. 71 The passing of tickets from hand to hand between Tickets, all the intermediaries between the ultimate purchaser and ultimate seller has to some extent been superseded by the Settlement Department, which does this passing in a more expeditious manner. The particular rules as to tickets vary in matters of detail in the different classes of securities, as will be seen by reference to the rules (q) . The following explana- tion refers particularly to those deliverable by deed of transfer ; but the principle of the arrangement is the same in all cases. A member who is a purchaser (r) , and who intends to take up securities, issues on or before ticket day, which is the second day of the settlement, and is also called name day, a ticket, which is a document stating that he is prepared to pay the purchase money. The ticket contains the date of issue ; the amount and denomination of the security to be transferred; the name, address, and description of the person into whose name the purchaser wishes the securities to be transferred (s) ; the price at which the bargain was effected (t) ; and lastly, the name of the member who sold to the ultimate purchaser, that is, his immediate contracting party. The ticket is handed to this member. If he means to deliver the securities, he now has all the particulars requisite for making out a deed of transfer, and delivering the securities, and so completing the transaction. If, on the other hand, he does not intend to deliver, he endorses the ticket with the name of another member, who having sold to him is liable to deliver. This process is repeated until the ticket reaches the member who intends to deliver the securities, that (q) Kules 83, 84, 96, 119. broker's client, (r) For himself or for a non- (t) This is omitted in tickets member. relating to bearer securities : (s) Generally the buying Rule 119. 72 THE COURSE OF BUSINESS. is, the ultimate seller. The ultimate seller makes out the transfer, and delivers it to the ultimate purchaser, that is, the issuer of the ticket. Splitting If any member, into whose hands the ticket thus tickets. comes, has not purchased the whole of the securities mentioned on the ticket from one member, the practice, or custom, is for him to divide, or split up, such ticket among the several members from whom he has, in the aggregate, purchased, and for that purpose to make copies (technically called " splits ") of such ticket, sub- stituting in each copy the number of securities purchased from the member to whom he passes it, and adding his own name as the member splitting the ticket. Each of the splits is thenceforward passed in the same way as the original ticket, until it reaches the hands of a member who has sold without having also purchased for that account, and who therefore is, or represents, the ulti- mate seller of the securities included in that split (w). If extra expense is incurred by reason of the splitting, the member who splits is responsible for it (#). Where a ticket has been split, the ultimate purchaser is bound to pay for any securities tendered to him, provided they are at least for ten shares, or for stock of the value of at least 2001. (y). "Where a ticket has been split up into amounts less than these, the member splitting would pay and then deliver to the ultimate purchaser in amounts of not less than ten shares or 200/. stock, and so get paid. These amounts need not be on one transfer. The original ticket is retained by the person splitting, and so the line remains unbroken, and it is always easy to trace a ticket through to its source. (M) Bowring v. Shepherd, L. bearer securities, tickets can E. 6 Q. B. 309, in which case onl y be s P li<; b J tne Settlement the practice of splitting was Department: Bule 119. (x) Eule 96. recognised by the Courts. In ! ^ , 0< , COMPLETION OF BARGAINS. 73 The Settlement Department was instituted in order Settlement to bring together the parties delivering and taking epar delivery, without resort to the somewhat cumbrous method of passing tickets described above, and to do, as regards securities, much what the Bankers' Clearing House does as regards money. It only deals with certain securities, which are said to " clear " ; but these embrace a great number of the securities dealt in on the Stock Exchange. Members who desire to use this Department pay a subscription, and the Department assists the subscribers alone ; but no member need become a subscriber. The Department supplies to its subscribers forms, to be headed with the name of the security dealt in, divided into two columns, one for purchases, and the other for sales. The subscriber fills in on the one side the names of subscribers from whom he has bought during the account (2) , together with the amount of such security he has bought from each, and on the other side the names of the members to whom he has sold and the amounts sold. The forms are then returned to the Department, and the clerks collate them, and trace the bargains through. Those subscribers who are going to take delivery send in to the Department tickets containing the name of the transferee, but with the name of the seller left blank. These tickets are then endorsed in the Department with the names of those who have to make delivery, and are forwarded to them, and thus the ultimate purchaser and seller are brought into direct communication, and the transfer can take place. The Department, when necessary, splits the tickets. It is to be observed that the Settlement Department has nothing to do with the price actually to be paid by (z) A subscriber who "clears" a non-subscriber is subject to a fine. 74 THE COURSE OF BUSINESS. any member, but puts through all transactions at the making-up price. Though, under this practice, the ultimate purchaser, that is, the issuer of the ticket, is substituted as the member with whom the ultimate seller is to complete the transaction, the immediate purchaser is not released from his liability to pay for the securities ; and if the ultimate seller, having transferred or delivered to the ultimate purchaser, is unable to obtain payment, or receives a cheque which is dishonoured, he is entitled to be paid forthwith by his immediate purchaser (a). The following is a copy of a ticket relating to secu- rities which are not subject to arrangement by the Settlement Department : All dividends and rights are hereby claimed. [If this Ticket be divided, insert Number and Name of party dividing it, or the New Ticket will not be paid for.] B 3O7 Consideration - M/U @ M/U Price - Stamp .. - 3218 15 16 5 Claim - - 3235 1000 Anglo-Dutch Exp. @ 3 uV To Eliza Jones, Of 690, Oxford Street, London, W., Spinster. Given to HENRY BROWN & Co. JOHN SMITH & Co. pay 100, Old Jewry, E.G. December 24th, 1900. (a) Eule 69. And see Coles v. Bristovw, 4 Ch. 3. COMPLETION OF BARGAINS. 75 John Smith & Co. are the issuers of the ticket, i.e., the ultimate purchasers on the Stock Exchange. Henry Brown & Co. are the immediate sellers to John Smith & Co. On the back of the ticket axe endorsed the names of the other members to whom the ticket is passed, the last name being that of the ultimate seller on the Stock Exchange. He delivers the securities to John Smith & Co. and is paid by them. If this ticket is split by Henry Brown & Co., or one of the names endorsed, a note is made of the fact on the back of the original ticket, and a " split " is issued by the member splitting in the following form : N B 307 Part of 1000 split by HENEY BROWN & Co. 500 Anglo-Dutch Exp. @ 3A To Eliza Jones, 690, Oxford Street, London, W., Spinster. JOHN SMITH & Co. pay December 24th, 1900. In this case the stamp on each 500 is 8/. 5s., and therefore the splitting causes a loss of 5s. in stamp duty. There will also be an additional registration fee. Accordingly, the member splitting will have to pay this increase of expense. 76 THE COURSE OF BUSINESS. When the ticket is for securities which are subject to arrangement by the Settlement Department, the follow- ing form is used : All dividends and rights are hereby claimed. [If this Ticket be divided, insert Number and Name of party dividing it, or the New Ticket will not be paid for.] B 3O8 Consideration - M/U @ 12 M/U Price - Stamp - - 12,750 - 12,000 63 15 Claim - - 12,063 15 1000 Lake View Cons. To Eliza Jones, Of 690, Oxford Street, London, W., Spinster. Given to S/D. JOHN SMITH & Co. pay 100, Old Jewry, B.C. December 24M, 1900. The ticket, if given to the Settlement Department, is passed to a subscriber who, from the returns to the Department, appears to have to deliver. The Depart- ment endorses his name on the ticket. He may pass it to a non-subscriber, who in turn may pass it to a sub- scriber. If the latter is not going to deliver, he can pass it back to the Department. Whenever the ticket goes to the Department it is endorsed S/D. The con- sideration in the transfer is 12,750/., and the stamp duty is paid on that amount; but the deliverer will receive 12,000/. and the whole stamp duty against delivery, the 750/. having been adjusted in the form of differences. COMPLETION OF BAEGAINS. 77 If the Settlement Department splits this ticket, the form is the following : B 308 Settlement Department Split. 500 Lake View Cons. @ 12f To Eliza Jones, &c. JOHN SMITH & Co. pay December 24th, 1900. We now come to what takes place on "settling day," Settling day. also called "account day" and "pay day." Owing to the time that it may take to get transfers executed, or to make preparations for delivery, provision is made in the rules for some delay in the actual delivery of the securities (6). Where the ultimate seller avails himself of this delay, the ultimate purchaser withholds payment of the making-up price until delivery. With this exception, the various members who have Payment of dealt in the security settle up completely on settling d i ffer ence and day. The process is as follows : Each member adjusts or ticket, his account with the member, with whom his bargain pnce ' was made, upon the footing of the making-up price, or, in some cases, ticket price (c). So a member who has bought securities from another for 100/., if the securities at the making-up price are worth 90/., or in cases where the adjustment is at ticket price and that price is 90/., pays that other 10/. If he is going to take up the shares, he will pay the 90/. on tender of the transfer, so providing the 100/. for which he bought the shares. If, on the other hand, he is one of the intermediate parties who has dropped out, he has nothing further to do in the matter. All these payments are made by cheques (5) Rule 108. (c) Ante, p. 70. 78 THE COURSE OF BUSINESS. on Clearing House Bankers (d). The effect of this is that each member, through the operation of the Bankers' Clearing House, receives or pays the balance only which he has made or lost as the result of all his transactions during the account. It also prevents any hardship resulting from the working of the practice of adjusting accounts on the footing of the making-up price or ticket price, which may have the effect of compelling a member to draw cheques for amounts greater than his actual liabilities. Each member pays into his bank cheques in his favour to meet his own cheques as they are presented, so that his account at his bankers is diminished or increased only by the balance between the two sets of cheques, which balance represents his profit or loss on the account as a whole. Delivery. Government, &c. stock. SUB-SECT, (iii). DELIVERY AND PAYMENT. All that now remains to be done is to complete the outstanding bargains by delivery and by payment of the making-up or ticket price. The manner in which delivery is made varies according to the nature of the security in which the parties are dealing. In the case of English, India, or Corporation stock, the purchaser has to send to the seller before 1.30 p.m., or, if the day be a Saturday, before 12.45 p.m., on the day upon which delivery has to take place, a transfer ticket. The seller adds the name of the transferor to the ticket, the transferor takes it to the Bank of England, where he executes the transfer in the books of the bank, and receives a stock receipt. This stock receipt must be (d) See Eule 68, and the evidence in In re Plumbly, Ex p. Orant, 13 Ch. D. 667. COMPLETION OF BARGAINS. 79 handed to the buyer before 3.30 p.m., or, if on a Saturday, hefore 1.30 p.m. (e). In the case of Colonial Government inscribed stock, the buyer must issue a ticket to the seller before 3 p.m. on ticket day (/) . The remaining procedure is the same as in the last case. In the case of securities deliverable by deed of transfer, Securities the seller has ten days in which to make delivery (g) . The deed of transfer is accompanied by a coupon, or ( ertificate, or it is officially certified on the transfer that the coupon, or certificate, is lodged at the office of the company. Such certified transfer must be accepted as good delivery, though it may entail certain risks (h). The deed of transfer is, by the practice of the Stock Transfer Exchange, prepared by the deliverer, that is, the ultimate j^* re y seller, and not as in the case of other conveyances, by the purchaser. It would be impracticable for the pur- chaser to prepare the transfer, for he does not know who is going to transfer, while the seller does know, from the ticket, to whom he has to transfer. In some old cases it was laid down that the purchaser must prepare, and tender, a transfer as a condition precedent to his having a right to sue for non-delivery (i) ; but, in view of the practice of the Stock Exchange, it would seem that the principle of these decisions would no longer apply to Stock Exchange bargains. Further, in con- tracts subject to the rules, Rule 100, which requires the deliverer to cause the shares to be transferred at the price on the ticket, seems necessarily to imply that the transfer must be prepared by him (&). If registered shares are not fully paid, and a call has (e) Kules, 83, 86. p. 35. "(/) Eule 84. (i) Stephens v. De Medina, 4 (g] Eule 108. Shepherd v. Q. B. 422 ; Bowlly v. Bell, 3 Murphy, Ir. Eep. 2 Eq. 544. 0. P. 284; 16 L. J. 0. P. 18. (h) Eule 104, and see ante, (k) And see Eule 104. 80 THE COURSE OF BUSINESS. Securities to bearer. Delay in delivery. Is time of the essence of the contract as between members ? been made before delivery, but is not yet payable, tbe deliverer may himself pay the call, and claim the amount from the issuer of the ticket (I). Bearer securities, if they are English or Indian Government, or Corporation securities, must be delivered before 3 p.m. on settling day, or other day on which it may have been agreed they shall be delivered, or, if such day is a Saturday, then before 2 p.m. (m). Other bearer securities must be delivered by 2.30 p.m. on settling day, or other day for which they were bought, or, if such day is a Saturday, by 12.30 p.m. (n). If delivery is not promptly made by the ultimate seller, he loses certain of his remedies. In the case of securities deliverable by deed, if the seller allow thirteen days to elapse without delivering, he releases his imme- diate contracting party, from whom he has received the ticket, and the issuer of the ticket alone remains responsible for the purchase price (o). In the case of securities to bearer, if the holder of the ticket allows two clear days to elapse without delivering, he releases his buyer from any loss incurred in consequence of the declaration of any member as a defaulter (p). The question whether delivery can be refused alto- gether after the expiration of the time allowed has lately been discussed in the Courts; and it has been held that, time being of the essence of Stock Exchange contracts, if securities are tendered too late they can be refused altogether (q). On the Stock Exchange a bargain is considered to continue in existence until (1} KulelOl. And see Allen v. Graves, L. B. 5 Q. B. 478. If the issuer of the ticket is a broker acting for a client, he is entitled to an indemnity from his client, if under this rule he is made to pay the call : Bayley v. Wilkins, 7 C. B. 886. (m) Rule 85. (n) Ib. 121. (o) Ib. 105. (p) Ib. 122. (q) Union Corporation v. Charrinyton, 8 Com. Cas. 99 ; Benjamin v. Sarnelt, 8 Com. Cas. 244. BREACH. 81 definitely put an end to by buying-in, selling-out or default; in fact, on the Stock Exchange there is a custom that, as between ultimate seller and ultimate purchaser, time is not of the essence. How far such custom would bind a non-member, contracting in igno- rance of it, has not been decided. No evidence of such a custom was before the Court which decided the cases of Union Corporation v. Charrington and Benjamin v. Barnett, and what the effect of such a custom would be upon a client's liability is at present an open question. Payment is made by cheque, which must be passed Payment, through the Bankers' Clearing House, unless the drawer consents to its being otherwise presented. For secu- rities sold, however, the seller can insist on payment in bank notes, but, in order to do so, must give notice to that effect before 11.30 a.m. on the day of delivery (r). No member need take a reference for a payment to a non- member (s) ; that is to say, the ultimate purchaser on the Stock Exchange can always be compelled to make payment himself. Every seller is, by the rules, responsible for the genuineness and regularity of the documents de- livered (), and also, for a certain time, for dividends received (M). The rules on these points are discussed fully elsewhere (a-). SECT. IV. BREACH. As between members a breach of contract may occur by failure to pay differences ; and in the case of a seller, by his failure either himself to deliver the securities he has sold, or to pass on a ticket, and so provide another (r) Eule 68. (x) As to dividends, see ante, ( 8 ] Ib. 67. p. 43 as to documents, see () Rules 94, 130. post, p. 161. () Eule 94. s. n 82 THE COURSE OF BUSINESS. who will do so ; in the case of a buyer, by his failure either to pass to his seller a ticket within the times prescribed by the rules, or himself to take delivery of, and pay for, the securities, when tendered to him. Buying-in Apart from the ordinary legal remedies (y), the party out. e aggrieved has certain remedies peculiar to the Stock Exchange. In all cases of failure to deliver, or pro- vide for delivery at the proper time, the buyer can apply to the Buying-in and Selling-out Department of the Stock Exchange (s), and the officials of that depart- ment, after giving public notice in the House (a), close the bargains by buying-in (b) ; that is to say, they buy on the market the securities required to fulfil the bargain, and so provide a member who will deliver them to the original buyer. When a buyer does not issue a ticket, or hand a ticket on to his seller, in the case of securities deliverable by deed, and of Govern- ment securities when transfer tickets are used, the seller can apply to this department, and the officials close the bargain by selling-out (c) ; that is, by selling the securities on the market, and so providing some one who will take delivery (d ) . Selling-out may also be resorted to in the case of bearer securities, if the buyer does not pay for them by 2.30 p.m. on the day for which they are sold ; if the day be a Saturday the limit of time is 12 o'clock (e). (y] A member, while remain- (d] Where a ticket is not ing a member, may not sue passed, and the seller does not another member without his exercise his right of selling- consent, or, if the other mem- out, the bargain is called an ber is a defaulter, the consent unsettled bargain, and is of his creditors, or, in either brought down and temporarily case, of the Committee : Rule adjusted at the making-up 54. price; that is to say, differ - (2) Eule 72. ences are paid as if a ticket (a) Eules 108, 121. had been passed at niaking-up (i) Ib. 85, 108, 121. price: Eules 112, 124. (e) Ib. 83, 84, 105, 106. (e) Eule 118. When bearer BREACH. 83 Where, in the case of other securities, a ticket has been properly passed, and the buyer fails to pay, the remedy by selling-out is not available. The remedy of the seller in such case is to cause the buyer to be declared a defaulter, or "hammered" (/). In all cases of non-payment of differences this remedy by hammering is also available. When resort is had to the Buying-in and Selling- out Department, its officials ascertain which member's fault has occasioned the buying-in, or selling-out, and any loss that may arise owing to a difference between the original contract price and the price given or obtained by the department has to be borne by him(#). The times for buyingrin and selling- out vary in the different classes of securities, and are fixed by the rules (h). No buying-in for non-delivery is permitted when securities are known to be out of the control of the seller, for the payment of calls, receipt of dividends, or the like, except at a date to be fixed by the Committee on application (') . These remedies should be exercised promptly. In Effect of the case of securities deliverable by deed, if a member who intends to deliver does not get a ticket at the proper time, and then allows two days to elapse without selling-out, he releases his buyer from all loss, if the ticket had not been passed owing to any member being publicly declared a defaulter (A-). A member, who has bought, and issued a ticket, and allows thirteen days from the date of the ticket to elapse without getting delivery and without buying-in, releases his seller, securities are sold for account (g) Eule 72. day, the amount payable on (A) Eules 83, 84, 85, 105 account day is the making-up 107, 118, 121. price: Eule 119. (t) Eule 73. (/) See post, "Default." (/<) Ib. 105. 84 THE COUKSE OF BUSINESS. unless it was by his seller's request, or with his consent , that he waived his right to buy-in (/). In the case of securities to bearer, if a buyer allows two days to elapse without exercising his right to buy-in, he releases his seller from all loss occasioned by any member being publicly declared a defaulter (tn). Suspension of The Committee have on several occasions suspended the buying-in rule under the powers conferred by Rule 19, and now are expressly authorised to do so when circumstances appear to them to make such suspension desirable in the general interest (). Before the new rule it was held that such suspension did not, at law, extend the time for delivery, and that it did not prevent the release of intermediaries under the rules relating to buying-in (0) . As between members it always had practically both these effects. The Com- mittee consider that a bargain, once made, is always a bargain, and therefore that delivery can be made at any time prior to buying-in, which, owing to the suspension of the rule, is impossible. They also have taken the view, that, by the suspension of the buying-in rule, the operation of the rules as to the release of intermediaries is also suspended (p). Now by the new Rule 73a it is provided that the liability of intermediaries shall con- tinue during the suspension of the buying-in rule, unless otherwise determined by the Committee. The position at law which is created by the new rule is a peculiar one. It would seem that the decision, that time for delivery is not extended by suspension of the buying-in rule, is unaffected. Yet the rule says that the liability of intermediaries shall continue. The effect apparently (1} Eule 109. (p} Union Corporation v. (TO) Ib. 122. Charrington, ubi sup. ; Ste- (o) ffnfcn Corporation v. May 27th and June 19th ' Charrington, 8 Com. Cas. 99. 190;] - DEFAULT. 85 is that the ultimate purchaser can refuse delivery, while the intermediaries remain liable to the seller. As between members, no doubt, the Committee would hold the ultimate purchaser on the Stock Exchange respon- sible, for they do not consider time to be of the essence of the contract ; but it is certainly doubtful whether the Courts, which so far have held time to be of the essence of the contract, would compel a buying client to in- demnify his broker under such circumstances. SECT. V. DEFAULT. Should a member fail: to fulfil his engagements, he is Hammering, publicly declared a defaulter by direction of the Chair- man, Deputy Chairman, or two members of the Com- mittee (/). This declaration is called "hammering," and the defaulter is said to be " hammered," from the practice of calling attention to the declaration by a waiter at each end of the House striking his desk with a hammer. The member so declared at once ceases to be a member (r) . The rules that come into operation upon a default aim at distributing the loss thereby occasioned as fairly as possible among all members who have bargains open with the defaulter. ((?) Eule 152. A member can apply to the Committee, applying for shares or stock and the Committee can, if the of loans or companies, and not member does not pay, cause paying the deposit on the him to be declared a defaulter ; same, is considered as having but there seems to be no re- violated a contract, and shall corded instance of the aid of be compelled to fulfil his en- the rule having been invoked, gagement : Eule 62. This and it is very improbable that would seem to mean that the the Committee would act upon company or issuer of the loan it. (r) Eule 153. 86 THE COUKSE OF BUSINESS. Private failures. In order to prevent this distribution of loss being evaded, all attempts at private failure, or compromise by a member with his Stock Exchange creditors, are discountenanced. If a member gives private informa- tion to such creditors of his inability to fulfil his en- gagements, the creditors must immediately inform the officials of the fact, in order that the defaulter may be declared publicly (s) . Further, if any member connives at a private failure by accepting less than the full amount of his debt, or makes any arrangement for settlement in lieu of a bond fide money payment, he is liable, if the defaulter is publicly declared within two years, to refund any money or securities received from such defaulter (t). A member who makes any settlement with another before the day on which payment is due is compelled, in the event of the failure of the member with whom he has dealt, to refund anything he may have received for the benefit of the general body of the creditors, and to pay over again anything he may have paid in respect of such prior settlement (u) . If any member receives, under any circumstances, a larger proportion of differ- ences on a defaulter's estate than the other creditors, he has to refund the excess, so as to put him on an equality with the rest (#). Hammer Price. SUB-SECT, (i). CLOSING BARGAINS AT HAMMER PRICE. Immediately after the public declaration, one of the Official Assignees (y) proceeds to the various markets, and there ascertains, and publicly fixes, the prices which were current immediately before the declaration for the various securities in which the defaulter has dealings (s) Eule 154. (*) Ib. 155. (u) 2b. 156. (x) Ib. 157. ( out the spirit of this rule that the following practice has been adopted in the distribution of a defaulter's estate. When a defaulter is declared owing to his failure to Past differ- meet his obligations on account day, and a member has on that account day paid to the defaulter differences arising on the carrying-over of a bargain, or the adjustment of an unsettled bargain, and then, owing to the default and consequent closing of the account at hammer price, has to receive something back from the defaulter, the differences paid on the account day are taken into consideration. If the member has to receive less than he then paid, he receives it in full ; if more than he then paid, he is allowed to receive back what he paid, and only proves against the estate for the balance. To take an instance : suppose the member sells to the defaulter 100 Chartered at 3, and carries them over at 4, which is making-up price. He has to pay the defaulter WOl. on account day, and does so. Two days later the defaulter is declared, and the hammer price is 3|. On the hammer the defaulter owes him 50/. He is not made to prove for this, but gets it in full. If the hammer price had been 2 the defaulter would owe him 200/., (g) Eule 158. (h) 11. 159; and see ante, p. 12. 90 THE COURSE OF BUSINESS. and would be allowed the 1001. he had paid, and prove for the other 100/. Practice when As will be seen hereafter, when a broker, who has defaults and made a bargain for a client (e), defaults, the client, being a client unaffected by the hammer, frequently completes the completes. T. / i bargain with the jobber from whom he has bought, or to whom he has sold. The practice in these cases is not easy to understand, unless it is borne in mind that a jobber, when he makes a bargain, seeks at once to make the converse bargain at rather a better price to himself. Where the client, and consequently the broker, is a bull, and the hammer price is lower than the bargain price, or the client, and consequently the broker, is a bear, and the hammer price is higher than the bargain price, the jobber is a creditor on the estate, and in the ordinary course would prove for his difference. The client, however, conies forward and completes. The jobber is thereupon presumed to have received his difference in full from the client ; for, although, if the price has risen, or fallen, again between the hammer and the next account day, the jobber, in fact, may have to pay something to the client instead of receiving, it is, nevertheless, the practice to pay no regard to what happens to the price after the hammer, but to treat the loss as fixed by the hammer, or, in other words, to con- sider the client as completing at the hammer price. The jobber is assumed to have also a converse bargain running, which neutralizes any loss or profit occasioned by variation of price after the hammer. So, in order to bring him to an equality with the other creditors, the jobber is made to refund in full to the estate the differ- ence between bargain and hammer price, and to prove (?) If the broker's client is all parties on the default of himself a member of the Stock either the broker or the jobber Exchange, the bargain is witll whom he ha8 dealt, treated as closed as between DEFAULT. 91 against the estate for the same amount. For instance, if a broker purchases for a client from a jobber 100 Char- tered at 5, and is hammered, the hammer price being 3, the jobber is a creditor for 200/. If the client completes, the jobber, in theory, receives this 2007. from him. He has to hand it to the Official Assignee, and prove for that amount. If, the client and broker being bulls, the hammer price is higher than the bargain price, or if, the client and broker being bears, the hammer price is lower than the bargain price, the jobber is a debtor to the estate. If the client completes, the jobber will have to pay him, and therefore the Official Assignee makes no claim on him for the hammer price difference, and, if he has already paid the hammer price difference to the estate, the Official Assignee refunds what he has paid. For instance, if a broker sells 100 Chartered for a client at 5, and the hammer price is 3, the jobber owes the estate 2007. On the client completing, the jobber has, theoretically, to pay him 2007. (7c) ; and therefore the Official Assignee makes no claim against him, or, if he has already paid the difference to the estate, when the client completes, refunds to him anything he may have so paid. In practice, where the bargain has been carried-over, this principle is combined with that of bringing past differences into account. Thus, suppose a client sells to a jobber through his broker 100 Chartered at 4, that they are carried-over at 5, and that the broker is hammered for failing to meet his obligations on account day, the hammer price being 3 ; the jobber makes 1001. on one account, but loses 2007. on the next, and, on the whole, is a debtor for 1007. The client pays the broker on account day 1007., which sum has not been paid to the jobber. The client then completes, and the jobber (&) Any subsequent rise and fall of prices being disregarded. THE COURSE OF BUSINESS. will have, theoretically, to pay 200/. to the client. The Official Assignee pays the jobber the 1001. which the broker has received, and makes no claim against him ; or, if the jobber has already paid 100/. to the Official Assignee on the hammer, the jobber receives back 2007. namely, the 100/. he has paid and the 100/. the broker received, and is thus in the same position as other debtors to the estate, that is, he pays his debt in full, but no more. The hammer operates to close all Special Settlement, as well as other, bargains, and the above practice applies also to these. Another instance will show how this practice, though at first sight sometimes appearing to press unequally, is in reality quite fair to all. Suppose a client has sold to a jobber through a broker certain shares for Special Settlement at i, and the broker is hammered, and the o ' ' hammer price is 2|, and the jobber is therefore a creditor for 2/. a share. The client delivers the shares on Special Settlement to the jobber. The Official Assignee claims to be paid by the jobber 21. a share, and that the jobber should prove for that amount. The jobber receives no money, but only shares, but, never- theless, has to pay the Official Assignee 21. a share. The reason for this is that the jobber is assumed to have been even on his book, that is to have resold immediately after the first purchase at practically the same price. If he had in fact resold, his position at the date of the hammer would be that, his purchase bargain having been closed, he would be left with a sale of shares at |, which he would have to buy at 2| in order to make delivery, thus being involved in a loss of 21. a share. The effect of the client completing is to relieve him of this loss ; for the client supplies the shares for him to deliver. The practice of the Stock Exchange, however, is not to allow a member to be relieved of a loss, occasioned by dealing with a defaulter, DEFAULT. "by reason of the fact that the defaulter's client com- pletes. The effect of the jobber paying this 21. a share to the estate is to give all the creditors the benefit of the client's completion, and to put the jobber on an equality with the other creditors. The way that hammer price closing is in practice treated in the jobber's books illustrates the effect to a jobber, of his bargain being closed on the default of a broker, and the client completing. The jobber, who has sold, makes in the account of the broker in his books an entry of a purchase at hammer price. This shows what has to be paid to the Official Assignee, or claimed from him. When the client completes, the jobber makes a new entry of a sale at hammer price, and an entry on the other side, crediting the account with the original bargain price received from the client or his new broker. Thus, on a sale of 100 Chartered to a client through a broker at 3, hammer price being 2, the broker's account in the ledger of the jobber when the client completes is as follows : Dr. 100 Chartered 3 300 (original bargain). 300 1 00 Chartered H. P. 2 200 (sale entry}. Balance to pay 0. A. in full . . 100 300 Or. 1 00 Chartered H. P. 2 200 (purchase entry}. Balance claim on estate for dividend . . . 100 300 100 Chartered made down with A. B. & Co. (client's neio brokers] (7) 3 300 300 (Z) If client completes without employing a new broker, the credit entry is in his name. 94 THE COURSE OF BUSINESS. Bargains out of time. Options. SUB-SECT, (iii). DEFAULT AS AFFECTING BARGAINS " OUT OF TIME " AND OPTIONS. By the rules, bargains for a period beyond the ensuing two accounts (w), or in the case of certain securities for any future account, if made more than eight days before the end of the pending account (), are said to be " out of time," and are penalised to the extent that claims against a defaulter's estate arising out of them are not allowed to rank against the estate, until all other creditors have been paid in full. Option dealings are frequently made for periods which render them " out of time," and when so made are penalised. Options, like other bargains, are closed at the hammer price upon default; so that where the value of the option, based upon the current price of the security, that is the hammer price, and taking into consideration the time the option has still to run, shows a profit to the defaulter, that profit is payable to the Official Assignee, though not until the date originally fixed for the exercise of the option (o). If it shows a loss, the other member can prove against the estate for this loss ; but if the option was for a period outside those mentioned above, he would prove as a deferred creditor. For instance, if the defaulter has given option money for a call of Chartered at 2 for the end-December account, and is hammered at the mid-November account, the hammer price of Chartered being 2|, the Official Assignee's claim is for the difference between the option money and the price at which an option at 2 for the end-December account could be purchased in the market on the day of the default. If the defaulter has taken option money for the same option, the giver of the option money proves for a similar amount (p). (m) Eules92, 115. () Eule 81. English, In- dian, &c. stock. (o) Eule 180. (p] As a deferred creditor, the bargain being "out of time." DEFAULT. 95 If the defaulter has bought an option, and at the time of the default the bargain does not show a profit to the defaulter at the then price, there will be nothing to pay, the option being treated as not exercised, and the other member will prove for the option money ( but he must keep the bargain open, and the liability of the third party alive. So, where a broker bought from a jobber for a client, and next day resold to the jobber the same securities, and on account day treated the bargains with the jobber as cancelling each other, but nevertheless purported to carry-over his client's bargain, it was held that he could not recover differences from his client, as there was no third party with whom the client had an enforceable bargain open (?) . (e) E.g., Neilson v. James, 9 18th, 1904, not yet reported, Q,. B. D. 546, at p. 550, per and under appeal to Court of Brett, L. J. Appeal. (/) Andreae Wallace v. (g] Skdton v. Wood, 71 L. T. Burlce, per Walton, J., Feb. 616 ; 15 E. 130. THE DUTIES OF A BROKER. 115 The broker's duty is to make an enforceable bargain, Bargain must and not to obtain a mere honourable understanding of at law. a member of the Stock Exchange (h) ; and, therefore, Leeman'sAct. unless authorised expressly or by implication, the broker is entitled to no indemnity when he has made a contract void under Leeinan's Act, but as between members enforceable on the Stock Exchange, owing to the custom to disregard that Act (e). (c) To deal according to the rules and customs of the Stock ( c ) To deal Change:- ZSSS* Where an agent is employed to deal for a principal customs. in a particular market, he has authority to deal accord- ing to the rules and customs of that market. The rule was thus stated by Willes, J., in Chapman v. Shepherd : Chapman v. < D 38g Q. B. D. 779 ; and see Coates u v. Pacey, 8 T. L. E. 351, 474. Bowen > L " J> For a fuller discussion of these ( he suffers ; but this rule is generally of little importance in Stock Exchange dealings, for there, although the jobber knows that a broker may have a client for whom he is acting, nevertheless, as by the rules the broker and jobber are inter sc principals, and the jobber looks to the broker and not to a possible client for fulfilment of his bargain, the jobber could not, except under special circumstances, say that he was dealing with the broker on the basis that he had a certain authority from a client. In the event of the instructions given to a broker Instructions being ambiguous, if the broker bond fide adopts one of a * 1 S UOUS - the possible meanings, and acts upon it, his principal cannot afterwards repudiate what he has done on the (TO) L. E. 7 H. L. at p. 826. 128 THE STOCK EXCHANGE AND THE PUBLIC. ground that lie meant his instructions to convey some- thing else. It is the principal's own fault, for he should have given clear and unambiguous instructions ; he is bound by the contract, and the broker is entitled to his indemnity and remuneration (). By telegraph. When instructions are given by telegraph, and a mistake is made by the telegraph officials in transmis- sion, the sender is not liable for the consequences ; for, though the telegraph officials were his agents to trans- mit a message, they were only his agents to send the message he instructed them to send(o). A broker, therefore, acting upon telegraphic instructions from a client which have been erroneously transmitted, could not make the client indemnify him in respect of the bargain entered into. A broker, accepting instructions to make a bargain for a client, does not undertake that he will make the bargain at all events, but only that he will use reason- able diligence to do so (p). Instructions If a broker is instructed to buy or sell without any price. price being fixed, his duty is to make the bargain at once at the best price obtainable ; if a limit of price is given, his duty is to make the bargain as soon as that price, or a better price, can be obtained (q) ; but his authority, in the absence of particular instructions, comes to an end at the next account day (r) . A client can always revoke his broker's authority before it is acted upon (). (ri) Ireland v. Livingstone, M. & W. 755, per Parke, B., L. E. 5 H. L. 416, per Lord at p. 762. Chelmsford; Loring v. Davis, () I.e., contract stamp, Is. ; C. B. 284; 16 L. J. C. P. 18 ; stamp on transfer, 15s. ; regis- K2 132 THE STOCK EXCHANGE AND THE PUBLIC. "Sold to' and" Bought noteg Where com- mission charged. "Nett." Aylward v. Lamotte. The form of a contract note rendered by the broker, and accepted by the client, is evidence of the nature of the instructions given to the broker, but not necessarily conclusive. Thus, where a contract note was rendered and accepted in the form " Bought for you," " 5,000 Klerksdorp Proprietary," the House of Lords held, upon evidence as to conversations, that the instructions had been to purchase an interest to the extent of 5,000 shares in a pool of Klerksdorp Proprietary shares, and that the broker, having secured such an interest, was entitled to his indemnity (q). If a broker, instructed to buy or sell, delivers contract hig olient bearing the wordgj g old to or " Bought of," instead of " Bought for " or " Sold for," thereby purporting to act as principal, and the client accepts such notes, a question may arise whether the broker is to be regarded in all respects as a principal. It has been held that the mere fact of rendering con- tracts in this form is not sufficient to prevent a client, not familiar with Stock Exchange transactions, from maintaining that the relation between him and his broker is of a fiduciary character (r) . If commission is charged on such contract, it is clear that the broker remains in a fiduciary relationship. If the contract note is in form a principal's note, but the word " nett " is added to the price, as is a common practice where a country broker employs a London broker to effect his bargains, this implies that a commission is charged, but is added to the price at which the bargain has been done, instead of being charged separately. So where a London broker, instructed to buy, sold his own shares tration fee payable to the com- pany, la. 6d. If securities are not to be taken up, the only charge under this head will be la. for contract stamp. (q) May v. Angeli, 14 T. L. E. 551. (r] Stock and Share Auction Co. v. Oalmoye, 3 T. L. E. 808 ; Re Wreford (deed.}, Carmichael v. fiudkw, 13 T. L. E. 153. FOKMATION OF CONTKACT. 133 and rendered to a country broker a contract note " sold to " at so much " nett," it was held that he could not maintain an action against the country broker or his client in respect of the transactions (*) . The question is really one of fact, namely, whether the broker was instructed to act as agent, and if so, whether he has given proper notice to his client, which the client has accepted, that he has in fact acted as principal. On this question the form of the contract note would be strong, but not conclusive, evidence. The commission chargeable by a broker may be agreed between him and his client, but, in the absence of an agreement, must be of a reasonable amount : what is reasonable depends on the rate generally charged on similar securities. A mistake in a contract note can subsequently be Mistake, rectified, although the client has acted upon the faith of its being correct (t). The contract having been properly made, the broker Privity, has, in the ordinary course, established privity between his client and a jobber, and there exists at once a binding contract between the jobber and client (u). In the absence of express terms to the contrary, the Contract contract is for completion on next account day, and the f^om^letion jobber has then to deliver, or take delivery, unless on account the performance has been postponed by continuation, ay ' or the obligation has been handed on by the methods before described (#). (s] Aylwardv. Lamotte,The (u} The question of privity Financial News, June llth, between jobber and client can 1902 ; S. ., Court of Appeal, be more conven i e ntly discussed March 25th, 1903, unreported. f*\ T-> -7 TI j 10 r\ -a hereafter; see post, p. Io6. (t} Daih v. Lloyd, 12 Q. B. 531 ; 17 L. J. Q. B. 247. (x) See last Chapter. 134 THE STOCK EXCHANGE AND THE PUBLIC. SECT. IV. CONTINUATION. SUB-SECT, (i). CONTINUATION PROPERLY so CALLED. If a client does not wish to deliver, or take delivery, on account day, he -may be able to get the performance of his bargain postponed, by having it carried-over, or continued, in the manner described (a) . No obligation j n the absence of agreement to that effect, there is over!" 7 " no obligation upon a broker to get a client's bargains, which were effected by him, carried-over (b) . Such an When agreement would, however, be implied from the fact implied. ^ na ^ fa Q broker had done so on previous accounts, and in such a case a broker would not be entitled to refuse to get his client's account carried-over at the end of any particular account, without giving his client reason- able notice of his intention (c). Carrying-over If a client wishes his bargain carried-over, he must without 1 ^- give his broker instructions to that effect before con- structions, tango day. In the absence of instructions, express or implied, a broker has no authority to carry-over his client's bargains, for they are primd facie ior completion on account day (d) . Such instructions will not be im- plied from the fact that the client, being a purchaser, does not find the purchase-money on account day (e). In a case where a broker carried-over without authority, when his duty was to have closed the account, his client having died, the carrying-over was split up into its component parts, and the first part treated as a closing (a) Ante, p. 61. 1902. (6) Outturn v. Hodges, 18 T. (d) Fenwickv.Buck,24Ij.T. L. E. 6; and see ThacJcer v. 274; Maxted v. Paine (No. 1), Hardy, 4 Q. B. D. 685, at L. E. 4 Ex. 81 ; In re Overweg, P- 691. #aasv.-Drcm,[1900]lCh,209. (c) Aylward v. Lamotte, The (e) Maxted y. Morris, 21 L. Financial News, June llth, T. 535. CONTINUATION. 135 of the client's account, but the second part as a new bargain made by the broker for himself (/). When a broker carries-over for a client, his duty, With whom apart from agreement to the contrary, is to do so with a ^ be effected, member of the Stock Exchange, the same rules applying on this point as in the case of a purchase or sale (g). It is not necessary that the member with whom the continuation is effected shall be that one with whom the original bargain was made, or with whom a prior continuation was effected. The continuation may be effected by the broker dealing with another member in such a way as to enable him to substitute that member for his client, as the person liable to complete the con- tract open for the current account, and at the same time to open with the other member a fresh transaction for the new account. For instance, supposing that a client wishes to continue a " bull," his broker can sell the securities in question to some other member for the current account, entering into a concurrent bargain for repurchase of the same for the next account. The broker can then, by passing that other member's name, substitute him as the person liable to complete the original bargain for the current account, leaving open for his client the bargain for the next account. The bargain with the other member is entered into at making-up price, and the difference, if any, between that price and the price at which the bargain stands for completion at the current account, and the charges for contango or backwardation, are settled by the broker on the client's behalf (Ji) . When a continuation has been effected by a broker, Contract note he must send a contract note to his client; and such tbn. n contract note must be stamped ; for the transaction is (/) In re Overweg, Haas v. (A) For the method in which. Durant, ubi sup. these operations are carried (g} Ante, p. 113. out, see ante, p. 63. 136 THE STOCK EXCHANGE AND THE PUBLIC. Form of: Commission on continua- tion. When by adding to or deducting from rate, notice neces- sary. really a sale and repurchase, and the various Stamp Acts (i) requiring contract notes to be sent and stamped must be complied with. As each continuation consists of a sale and a repurchase, the stamps will have to be of double the value of those required on a contract note relating to a purchase or sale. Some brokers send two contract notes for each con- tinuation, one showing the sale for the current account, and the other the repurchase for the ensuing account (A-). Others record the whole transaction on one note, e.g. : Sold for and on ac- count of A. B M 100 Eandfontein at 3 . [Broker's address, and date.~\ s. d. Bought for and on 8. d. account of A. B., L 100 Eandfontein 300 at 3 300 Ctgo. 8 per cent. . . . 1 Stamp 2 o 300 301 2 HHHMM unt. ^M^M For mid-May account. 0. I/- I/- For end- April account. (Signed) C. D. & Co. Subject to the Eules and Regulations of the London Stock Exchange. For effecting a continuation a broker is entitled to charge a commission to his client. For convenience this is often done by adding something to, or, in the case of sale, deducting something from, the rate of contango. If this course is adopted, specific notice should be given to the client, for otherwise it might be open to the client to contend, that the broker had not carried out his duty, to make a contract exactly corre- (i) Ante, p. 130. (k) In the case of a "bear " being earned, the contract notes will represent a purchase for the existing, and re-sale for the next, account. CONTINUATION. 137 spending with that which he renders to his client (/) ; for the broker would have a contract with the jobber at, say, 31. and 8 per cent, contango, while the client's only contract would appear to be at 3/. and 9 per cent. Where a broker with the consent of one client carried over with another client, and with the consent of that other kept for himself 1 per cent, of the rate charged for carrying over, it was held that he had created privity between the two clients (ni) ; but even in such case, especially in view of Eule 55, notice to both clients would seem advisable. The simplest way of giving the required notice is by adding at the foot of the contract note some words to the following effect : " In all con- Suggested tinuation transactions it is understood that we are entitled, when no commission is charged, to provide our own remuneration by adding to the rates paid by us " (n) . It happens sometimes, especially in dealing with Continuation large blocks of securities, that a broker finds it difficult, or even impossible, to get them continued with members of the Stock Exchange, but that he can do so more conveniently off the Stock Exchange, as with a bank or financial house. The broker's strict duty being to do his client's bargains with a member, he is probably not entitled to carry-over off the Stock Exchange without his client's consent. If, however, the client receives notice that the carrying-over has been done off the Stock Exchange, and does not dissent or repudiate, he would be bound by what was done. For the same reason, and also because an agent may not act for both buyer and seller (o), a broker may not carry-over with another client, without similar consent from his client. If a broker desires to carry-over with other clients, or other- (/) See ante, p. 108. there would have to be some (m) Bell v. Plumbly, 16 T. such, words as : "by deducting L. E. 393. from the rates received by us." (n) If a "bear "is carried, (o) See ante, pp. 105, 113, or there is a backwardation, and Rule 55. 138 THE STOCK EXCHANGE AND THE PUBLIC. Suggested form of notice. Taking in. Suggested form of notice. wise off the Stock Exchange, it is, therefore, advisable to add some such words to his contract note as: "In all continuation transactions it is understood that we are entitled to continue with clients and other non-members of the Stock Exchange." In carrying-over, a broker may wish to employ his own capital, and himself continue his client's bargain, or, as it is called, " take in " ( p) the securities for his client. In doing this the broker becomes a principal in the transaction, and the only person liable to complete the bargain at the proper time ; a position which the law does not allow an agent to assume without his client's consent. Such consent will be implied from the fact that the client knew that the broker had so acted on previous occasions, and made no objection (5-), or on the particular occasion received notice of what had been done, and did not repudiate (r). The requisite notice can be given by adding the following words to the contract note : "In all continuation transactions it is understood that we are entitled to employ our own capital." (p) This is so frequently done, that it was considered a reason for holding that a bank, with whom a client's securities were pledged by his broker, was not put upon inquiry as to their ownership : Bentinck v. London Joint Stock Sank, [1893] 2 Ch. 120. (q] Sachs v. Spielmann, 5 T. L. E. 487, where it was held that there was a custom for a broker to take in his client's securities, pledge them with a bank to obtain the money to pay for them, and then carry them over from account to account, paying or receiving differences, and charging a higher rate as contango, than he had to pay as interest to the bank. Such custom would, it is submitted, be clearly un- reasonable, and not binding on a client who was ignorant of it. In that case, however, it was found that the client " was sufficiently acquainted with that well-known usage on the Stock Exchange," he being " aware that something of the kind was being done." (r) Pttrc v. Sutherland, 3 T. L. E. 422. CONTINUATION. 139 In all these cases it is to be observed that, if the transaction is the first transaction between the client and broker, the client could, on receiving the contract note with the terms upon it, repudiate the bargain if it suited him to do so, provided he did so at once. If, however, he has had other carrying-over transactions, and has received such notice without objection, he would be taken to know that he was dealing on these terms, and would not be entitled to repudiate. To provide for all the above points, the notice on the continuation note might run : Subject to the rules and regulations of the Stock Exchange. In all continuation transactions it is understood that we are entitled : (1) To employ our own capital. (2) To continue with clients and other non-members of the Stock Exchange. (3) When no commission is charged, to provide our own remuneration by adding to the rates paid, or deducting from the rates received, by us. As soon as a continuation has been effected, the broker, in addition to the entries made in his jobbing book and jobber's ledger, makes entries in his clients' ledger and his Contango journal. SUB-SECT, (ii). MORTGAGE AND PLEDGE OF STOCK EXCHANGE SECURITIES. It may happen that a purchaser of securities is un- Mortgage or able to get them carried-over, or himself to provide the money to take them up. In these circumstances it is not unusual for him, or his broker, to arrange with a banker, or other person, to find the money to pay for 140 THE STOCK EXCHANGE AND THE PUBLIC. Distinction between mortgage or pledge and continuation. Langton v. Wa\te. the securities, the hanker, or other person, taking the securities, or the documents of title to them, into his own possession, as security for the repayment to him of the money he has so advanced. This method of con- tinuing an account is often found cheaper than carry- ing-over, and is now very largely resorted to. Such transaction is a mortgage, or a pledge, and differs very materially from a continuation. In the case of a con- tinuation the securities are the property of the person who carries them over, and he can deal with them as he pleases, his only obligation heing to deliver the same amount of similar securities on the next account day (t) ; while in the case of a mortgage, or pledge, the actual securities deposited remain the property of the borrower, and the lender is not entitled to deal with them as his own property in any way, until the borrower has made default in paying off the loan at the proper time, and, should he do so, is accountable to the borrower for any profit he may have made, and for any loss such dealing may have occasioned to the borrower. The distinction between the two positions is well illustrated by the cases of Langton v. Waite (11) and Bongiovanni v. Societe Generate (x) . In Langton v. Waite, the plaintiffs, a firm of stockbrokers, borrowed from the defendants, also stockbrokers, a sum of money for three months upon the security of certain railway stock which was transferred to the defendants. At the end of the three months the plaintiffs paid off the loan, and the defendants transferred to them the same amount of similar stock, but not the identical stock, having in the meanwhile sold what was deposited, and made a (<) Bongiovanni v. Societe Generate, 54 L. T. 320 ; Ben- tinck v. London Joint Stock Bank, [1893] 2 Ch. 120; and see ante, p. 65. (M) 6 Eq. 165 ; reversed in Court of Appeal on another point, 4 Ch. 402. The judg- ment on this point has not been questioned. (x) Uli supra. MOETGAGE. 141 profit thereby. It was held that the plaintiffs were entitled to this profit. " The law," said Malins, V.-C., " is perfectly clear, that in the absence of express con- tract, the pawnee of property cannot sell it until the debt for which it is pledged becomes payable, and if he does so, the owner has a right to charge the pawnee with the price he gets for the property, if he finds it to his interest to do so." In Bongiomnni v. Societe Generate, a broker, at the request of his client, continued certain shares with the defendants, who were bankers. The defendants resold and made a profit, and the client sought to recover this profit, but failed to do so, Lindley, L. J., saying, " To continue means to sell and agree to buy the same amount of stock at a future date at the same price, and a sum for the accommodation. Such a transaction is not a loan, but a sale and re-purchase. It is so like a loan as to be easily mistaken by business men for a loan." All deposits of the documents of title to stocks and Distinction shares, as security for a loan, are commonly spoken of morttnure and as mortgages ; but it would seem that, more correctly, pledge, this description should at any rate be confined to cases where the legal estate remains with the borrower. For where the lender obtains full possession of the deposit, as he does in all cases where bearer securities are deposited, and in those cases where the deposit of other securities is accompanied by a transfer of the legal estate to the lender, the transaction differs from a mort- gage, in that in a mortgage the possession remains in the borrower. Such a transaction should be more properly described as a pledge or pawn. Where there is a deposit of certificates, and the borrower remains on the register, it cannot be accurately said that the lender has possession of the shares, for all he really has is possession of certain documents of title to shares, in the same way that in an equitable mortgage of real estate 142 THE STOCK EXCHANGE AND THE PUBLIC. Where time fixed for repayment. Where none fixed. the mortgagee often has possession of the title deeds. When, however, shares were deposited, and the depositee's name was registered as the holder, the transaction was treated as a mortgage and not as a pledge, though apparently by the consent of all parties (y) ; and in another case the same view was taken, apparently without objection (z). The question whether a deposit of certifi- cates and a transfer to the depositee, acted upon by him in getting registered, is to be regarded as a pledge or a mortgage, seems still to be left open for decision in any case in which it may become material. If a time is fixed for repayment, a pledgee or mortgagee of stock or shares may sell, if not paid at that time, without express authority from the pledger or mortgagor, and without bringing an action ; for both pledge and mortgage imply a contract that they shall be made effectual to discharge the debt (a) . If no time is fixed for repayment, the mortgagee or pledgee can only sell after the debt is payable, and there has been a proper demand and a reasonable length of notice given (b) . On the other hand, the mortgagor or pledger can redeem at any time before actual sale (c). Where no time is fixed for redemption, and more is demanded from a pledger than is due, the right of sale (y} Deverges v. Sandeman, [1902] 1 Ch. 579. (z) General Credit and Dis- count Company v. Glegg, 22 Ch. D. 549. (a) Tucker v. Wilson, IP. W. 261; 24 E. E. 379; In re Morritt, 18 Q,. B. D. 222; Deverges v. Sandeman, [1902] 1 Ch. 579, per Stirling, L. J., at p. 592 ; Bobbins on Mort- gages, Vol. I. p. 276. (&) Deverges v. Sandeman, [1902] 1 Ch. 579 ; Langton v. Waite, 6 Eq. 165; France v. Clark, 22 Ch. D. 830 ; 26 Ch. D. 257 ; Story on Bailments (7th ed.), s. 308; Fisher on Mortgages (4th ed.), p. 454. In the case of Stock Exchange securities a fortnight, or at most a month, would be a sufficient length of notice : Deverges v. Sandeman, tibisup., per Cozens-Hardy, L. J., at p. 597. (c) Deverges v. Sandeman, ubi sup. MORTGAGE. does not arise (d ) ; but if a time is fixed, it would seem immaterial that the notice claims too much, for it is the duty of the pledgor to tender the amount due to the pledgee, and if he fail to do so the latter may sell (e) . As between mortgagor and mortgagee, properly so called, when no time is fixed, there must be a demand before the right of sale can arise, but it would seem immaterial that too much is demanded (/) . A pledgee of personal chattels has no right of fore- Foreclosure, closure, and therefore, in the case of a deposit of bearer securities, a pledgee cannot, on default, keep the securities and have his interest in them made abso- lute (#). When, however, in the case of shares, the legal estate is transferred to the pledgee (/*), and also where certificates are deposited, but the legal estate is not transferred to the pledgee (&'), the transaction has, in this respect, been treated as a mortgage, and on default foreclosure has been decreed. When an equitable mortgagee, or a pledgee, of shares Vesting order, is unable to transfer the shares in the exercise of his powers of sale, owing to his not being the registered owner thereof, and the mortgagor, or pledgor, will not assist him, the Court will make an order for sale and for the vesting of the shares in the purchasers. A mortgagee, or pledgee, who sells must account for Mortgagee the proceeds, and pay over to the mortgagor, or pledgor, must account - any surplus there may be over and above the debt and interest and necessary charges and expenses, and, if (d) Pigot v. Culley, 15 0. B. 605 ; Hamilton v. Young, 7 L. N. S. 701 ; 33 L. J. 0. P. 134. E. Ir. 289. (e) Deverges v. Sandeman, uli gup (h) General Credit and Dis- (/) Deverges v. Sandeman, count Co > v " 0le M> 22 Ch ' D " 549 ubi sup., per Cozens-Hardy, L. J., at p. 597; for Pigot v. (i] Harrold v. Plenty, [1901] Cubley, nU sup., does not apply 2 Ch. 314 ; and see London and to mortgages. Midland Bank v. Mitchell, (g) Carter v. Wake, 4 Ch. D. [1899] 2 Ch. 161. 144 THE STOCK EXCHANGE AND THE PUBLIC. satisfied by the sale of a portion of the security only, must return any unsold part thereof. He may be ordered to pay the surplus into Court, and a receiver may be appointed of the proceeds of any part remaining unsold (). Right to sub- jt } ias b een f oun d to be the custom of the Stock Exchange that where securities are deposited with a broker, for the purpose of his advancing money upon them, he has implied authority to pledge them to some other person, for the purpose of obtaining the money (/) ; but it would seem to be unnecessary to rely on custom, for in the words of Jessel, M. R., " Every mortgagee has a right to reborrow and transfer the securities " (#?). The right to repledge is limited to the amount of the original advance (n). It has, however, happened that a pledgee has repledged for a greater amount than that which he advanced, and then questions have arisen as to the rights of the sub -pledgee as against the original pledgor (0). Legal and j n this connection, the distinction between legal and equitable titles. equitable titles is of importance. The legal title is in that person who has not only a title, but also the outward indicia of ownership (p) ; the equitable title is in the beneficial owner. For example, a trustee, with securities registered in his name, is legal owner ; his ce&tm que trust equitable owner : a vendor, before com- pletion of the purchase, is legally, his purchaser equit- (k] Fisher on Mortgages (o) The pledgee tinder such (4th ed.), p. 456; Story on circumstances is, of course, Bailments (7th ed.), s. 343. liable to the pledgor for any (?) Mocatta v. Hell, 27 L. J. loss he ma ? sustain ' Ch. 237 ; 24 Beav. 585. (*) The outward '* are not alone sufficient, for if a (n) In re Tahiti Copper Co., man has no title> the fact that Ex p. Sargent, 17 Eq. 273. he appears to have one will not [ere "mortgagee" includes give a legal estate: Powett ^ "pledgee." London and Provincial Bank, (n) France v. Clark, uli sup. [1893] 2 Ch. 555. MORTGAGE. 145 ably entitled. In the case of a pledge of registered securities by deposit of the share certificates and a duly executed transfer (q), the pledger's name remains on the books, and he has the legal estate, and the pledgee has only an equitable title. The requisites for a legal title to securities depend on the nature of the securities ; if they are negotiable instruments transferable by mere delivery, every holder in due course has a legal title ; if they are registered in a company's books, or other- wise inscribed, the legal title is in that person whose name is properly on the register as the owner. Possibly, too, a person, who has as between himself and the com- pany, before the company is informed of the existence of a better title, a present, absolute, and unconditional right to be placed on the register, is to be treated as if he had the legal estate (r) . In order to obtain, as against a company, such a present, absolute, and unconditional right, not only must a transfer have been duly executed by the registered holder, and presented for registration, but the company must also be provided with the certi- ficate. Such right therefore is not obtained by present- ing a transfer and offering to indemnify the company ( /-Y Y (K) Weickersheim s Case, 8 ell> 1 ' Ch. 831 ; Royal Bank of India's (li) Societe Oenerale v. Wai- Case, 7 Eq. 91 ; 4 Ch. 252 ; ker, 11 A. C. 20; Colonial Bank Addison'a Case, 5 Ch. 294. v. Whinney, 11 A. C. 426. (/) SicheWs Case, 3 Ch. 119. 160 Stamp duty oa mortgage. THE STOCK EXCHANGE AND THE PUBLIC. The stamp duty on a mortgage depends on its nature. If it is a legal mortgage, it requires an ad valorem stamp of Is. 3rf. for every 507. secured ; if it is an equitable mortgage, it requires an ad valorem stamp of Is. for every 100/. ; if it is only a collateral security, the ad valorem duty is 6d. per 100/. (w). But if, on the deposit of documents of title to stocks and shares, an instrument under hand only is given, it is treated as an agreement, and only requires a 6d. stamp whatever the amount (n). In deposits of stocks and shares by way of security, this form is most often adopted, so as to save expense. Fortnightly account. SECT. V. COMPLETION. On contango day the broker makes out, and sends to his client, a statement which is called a fortnightly account. This shows all the transactions done on behalf of the client during the account, all purchases, sales, and continuations, the commission charged, and contangoes. If the same number of each denomination of shares have been bought as sold, the account shows the differ- ences payable, or to be received, by the client on account day. If shares have been bought or sold, and then carried- over, the differences payable by, or to, the client likewise appear. If, on the other hand, the client is going to take delivery or deliver, the account shows what sum he will have to pay against delivery, or what sum he will receive when he delivers. (TO) Stamp Act, 1891, ss. 8689, and Schedule I., "Mortgage." (n) Stamp Act, 1891, s. 23. COMPLETION. 151 SUB-SECT, (i). THE BRINGING TOGETHER OF ULTIMATE SELLER AND ULTIMATE PURCHASER, AND THE RELEASE OF INTERMEDIARIES. A member of the public, who has dealt in any denomination of securities during an account, must either have bought and sold the same number, or have bought more or less than he has sold. In the latter case he will have to take, or give delivery of, some securities ; but in the former, by getting his broker to pass names, he will have nothing to do, but to pay or receive differences. When a client has bought and sold in the same Passing account the same number of securities through the same tlckets - broker, the broker passes the ticket, that comes to him from the ultimate purchaser of the securities sold by the client, to the person from whom the client bought, and so passes on his client's obligation to take, or make, delivery. In this case no account is opened with any- one which was not already open, but, in the process of completion, the ordinary method of passing names is adopted. When the client has bought through one broker and "Making sold through another, in order to save the trouble and down -" expense of completing his two contracts independently by taking delivery from the one and giving delivery to the other, he can ask the brokers to " make down." If they agree to do so, the two brokers enter in their books a sale from one to the other, so opening new accounts, and the broker through whom the client has sold, when he receives the ticket issued by the ultimate purchaser's broker, hands it on to the broker through whom the client has bought, and he in turn, instead of issuing a new ticket, as he otherwise would have to do, hands on to the jobber, or other person, from whom he has bought, the ticket he receives, and so finally the same ticket 152 THE STOCK EXCHANGE AND THE PUBLIC. No obligation on broker to make down. Ultimate purchaser and seller. arrives in the hands of the ultimate seller, or, if he is not a member of the Stock Exchange, of his broker. Where the securities are amongst those dealt with by the Settlement Department the result is the same, the brokers including the newly opened bargain between them in their returns to the department. It has now been decided that a client cannot compel his broker to make down; for to do so would be to insist on the broker releasing the client, and taking the other broker's liability instead (0). Further, the selling broker by the new contract becomes a purchaser from the buying broker, and, in the event of the default of the member to whom he has sold, will have to prove against his estate, but will have to complete his new bargain of purchase by payment and taking delivery, whereas before the make-down he would be under no such liability. Unless the client's purchases and sales during the account balance, or arrangements are made for carrying- over, the transaction must be completed by delivery and payment. At this stage, probably for the first time, the client is brought into communication with some one other than his broker. It is, however, to be observed that, generally speaking, he does not, even at this point, have anything to do with the member with whom his broker originally made the contract for him, but only with the person who is found to be the ultimate purchaser or seller. Originally, the client's bargain is with the jobber with whom his broker has contracted, and with him alone is there privity of contract ; but, when it comes to com- pletion, this privity frequently disappears, and a new privity arises between the client and the ultimate pur- chaser or seller, or in other words a novation takes place. (o) Currie v. Booth, 7 Com. Gas. 77. COMPLETION. J '53 As has been seen (p], a jobber, or other person who has made a bargain on the Stock Exchange, is bound, when the time for completion comes, to do one of two things; either himself to complete by delivering, or taking delivery and paying ; or to provide some other person who is competent and willing to do so. The practice, as before stated, is for names to be Completion passed, until the ultimate purchaser and ultimate seller are brought together. The ultimate seller executes a transfer, and sends it to the ultimate purchaser's broker, who has issued the ticket ( P er Brett > J " infant, the broker is respon- a * P* "^* sible to the seller: II. (a) L. E. 6 Ex. 132. 6 THE STOCK EXCHANGE AND THE PUBLIC. the seller has a right of indemnity against the latter ; for the nominee is but a trustee for him (^) . This is strictly a remedy in Equity, but it has been suggested that there is a remedy also at Law (w). However, since the fusion of law and equity by the Judicature Act this distinction is immaterial. The question whether the transferee is the real purchaser, or merely a nominee of the real purchaser, must in all cases be a question of fact. If the view suggested by Blackburn, J., is correct, it is, of course, immaterial whether the name passed is that of a nominee or of a bond fide purchaser from the issuing broker's client ; for in both cases the client would remain liable. But if such view is not correct, and by the acceptance of the transfer novation takes place as between ultimate seller and transferee, the question of fact above referred to would be of import- ance, for unless the transferee were a mere nominee the seller would have to look to him alone for his indemnity. In deciding whether a transfer is a real one, the relative positions of the parties and the amount of the considera- tion are elements to be taken into consideration (x) . Effect of The effect of a name being given of a person not passing bad . * name. competent and willing to contract is to leave the person who has passed the name liable to indemnify his imme- diate seller ; and he in turn has a similar remedy against the person who has passed the name to him ; and so on, until the ultimate purchaser's broker is reached ; and he, (f) Castellan v. Hdbson, 10 burn, J. Eq. 47; Brown v. Black, 15 (x) Hyam'sCase,lDeG.'F.& Eq.363; 8Ch.939. Anominee, J. 75; Budd's Case, 3 De Gr. F. & if called upon to pay calls, is J. 297 ; 30 Beav. 143. As re- entitled to an indemnity from gards companies subject to the the beneficial owner : Hardoon jurisdiction of the Stannaries v. Belilios, [1901] A. 0. 118; Court, the Stannaries Act, 1869 James v. May, L. B. 6 H. L. (32 & 33 Viet. c. 19), s. 35, 328. contains provisions directed (u) Maxted v. Paine (No. 2), against attempts to get rid of L. B. 6 Ex. 132, per Black- liability. COMPLETION. too, would have a right of indemnity against his client who provided him with the bad name (?/). The nature of the remedy given to the seller in all Seller's these cases depends upon the doctrine that, as soon as there is a contract of purchase and sale, the vendor is trustee for the purchaser of the subject-matter of the sale. The seller is entitled to indemnity against any liability in respect of what he has sold (z) ; and, where it is still possible to do so, the contract will be enforced by specific performance. SUB-SECT, (ii). TRANSFER AND REGISTRATION. A jobber does not in general guarantee registration, Registration and incurs no liability by reason of the failure of the "anteed "by transferee to get himself registered. If, however, the jobber, jobber chooses to guarantee registration, he remains liable until such registration takes place (a). It may be stated as a general rule that, apart from Seller does special agreement to the contrary, it is the duty of a guarantee^ C> purchaser to get himself registered, and that the seller registration. has done his part when he tenders duly executed trans- (y) Merry v. Nickalls, 7 Ch. tion arising out of the same at p. 759, per James, L. J. ; transaction, it was held that Peppercorne v. Clench, 26 L. T. the jobber was entitled, as 656. against the defendant, to whom , , T-, Tr ~ 7 , T-I n h e h a< l s ld, and who had au- (z) Evans v. Hood, 5 Eq. 9; . . ' Hodgkinson v. Kelly, 6 Eq. 496; f 6 ? h " name * be P assed ' Hawkins v. Maltby (No. 2), 6 but ^d t got on the register, Eq. 505; 4 Ch. 200; Shepherd to an mdemnlt y a S ainst tte v. Murphy, Ir. Kep. 2 Eq. 544; claims made u P on him b ? his T ^ , n , n vendor, Cruse. The question In re Overend, Gurney and Co., Musgrave & Hart's Case, 5 Eq. of the release of the ^ obber ^ 193, and cases cited supra; novation was not considered m and see post, pp. 204-206. [ hls . case ' but y in - to his having guaranteed registration (a) Wynne v. Price, 3 De G. he was not in fact released, & S. 310 ; Crusev. Paine, 6 Eq. and in any case the defendant 641; 4 Ch. 441. In Paine v. would have been liable to Hutchinson, 3 Ch. 388, an ac- Cruse. S. M 162 THE STOCK EXCHANGE AND THE PUBLIC. fers, and certificates (i), or, on the Stock Exchange, certificated transfers (c). This is clearly so in all Stock Exchange dealings, as there is a custom to that effect (d) ; and it is also so in dealings not on the Stock Exchange (e), unless the bar- gain is made with reference to the Articles of the com- pany whose securities are dealt in, and those Articles require the seller to do all that is essential to the transfer (/) . Should the directors of a company, having power to do so, refuse their consent to the transfer, the rule above their consent, enunciated applies, and such refusal affords no de- fence to a claim by the seller against the purchaser for specific performance, indemnity or damages (e] (/), When direc- tors of com- pany refuse (6) Neilson v. James, 9 Q. B. D. 546 ; Ward v. Henry's Case, 2 Ch. 431; Skinner v. City of London Marine Insurance Co., 14 Q. B. D. 882. "The only contract on a bargain and sale of shares is, that the seller shall execute a valid transfer of the shares and hand the same to the transferee, and so do all that is necessary to en- able the transferee to insist with the company on his right to be registered as a member in respect of such shares" : ib., per Brett, M. E. (c) Eule 104. (d) Remfry v. Butler, 1 E. B. & E. 887 ; Ei-ans v. Wood, 5 Eq. 9 ; Hodgkinson v. Kelly, 6 Eq. 496 ; Shepherd?. Murphy, IT. Eep. 2 Eq. 544 ; Stray v. Russell, 28 L. J. Q. B. 279 ; 29 L. J. Q. B. 115; 1 E. & E. 888 ; Taylor v. Stray, 2 0. B. N. S. 175, 197; 26 L. J. C. P. 185, 287 ; London Founders' Association v. Clarke, 20 Q. B. D.576; Casey v.Bentley, [1902] 1 Ir. Eep. 376. (e) Skinner v. City of London Marine Insurance Co., ubi sup. (/) Wilkinson v. Lloyd, 7 Q. B. 27; 14 L. J. Q. B. 165; Stray v. Russell, ubi sup. ; Bermingham v. Sheridan, 33 Beav. 660; 10 L. T. 256. In this latter case, Eomilly , M. E. , decided that sales of shares were always conditional on the company accepting the pur- chaser, but this is, it is sub- mitted, no longer law : see per the same judge in Poole v. Middleton, 29 Beav. 846; see also as to this case Taylor v. Stray, ubi sup. ; Evans v. Wood, ubi sup.; Paine v. Hutchiiison, 3 Ch. 388; and see Fry on Specific Perform- ance (4th ed.), pp. 638, 639. COMPLETION. 163 unless the bargain is made with reference to Articles requiring the seller to do all that is essential to the transfer, and not on the Stock Exchange ( shepherd, 2 1), 3 Ch. 188. p 228 ; Biederman v. Stone, (k) Hawkins v. Maltby (No. 2 C. P. 504 ; Neilson v. James, 2), 4 Ch. 200. Page- Wood, 9 Q. B. D. 546; Cruse v. Paine, V.-C., decided the contrary in 6 Eq. 641 ; 4 Ch. 441. When Hawkins v. Maliby (No. 1), 4 the failure to obtain registra- Eq. 572 ; but his decision was tion before winding-up is due reversed on appeal on other to delay on the part of the grounds, and Lord Chelmsford purchaser, the winding-up is said that, if necessary, he a fortiori no defence : Evans wouldhave reversed the Y.-C.'s v. Wood, 5 Eq. 9; Paine v. decision on this point (3 Ch. Hutchinson, 3 Ch. 388. 188); and in the further litiga- (rn) Rudgev. Bowman, L. E. tion between the same parties, 3 Q. B. 689. M 2 164 THE STOCK EXCHANGE AND THE PUBLIC. Transfer. On Stock Exchange prepared by seller's broker. an indemnity, even though by the Companies Acts all transfers without the consent of the liquidator are void, and he refuses his consent to the transfer. If, however, the contract has been made by both parties in ignorance of the winding-up proceedings having already been commenced, the Court will not make the purchaser a contributory, because that would be to enforce a bargain to buy property which, unknown to the parties, had been destroyed before the bargain was made (). If a seller of shares on the Stock Exchange is made a contributory in the winding-up, either as a present or a past member, the purchaser from him will be ordered to indemnify him (o). In such of these various events as give the purchaser no answer to a claim by the seller for the purchase price, the purchaser's broker is entitled to make payment in accordance with his obligation upon the Stock Exchange, and to be indemnified for so doing by his client (p). The actual completion is effected by the seller placing the purchaser in a position to become the legal owner of the securities (q). In the ordinary course this is done by the seller making a transfer in the method appropriate to the particular class of security in question (r) in exchange for payment by the pur- chaser of the price. In Stock Exchange dealings it is the custom for the seller's broker to prepare the transfer. In view of this (n) Emmersorfs Case, 1 Oh. 433 ; see per Page -Wood, L. J., Paine v. Hutchinson, 3 Ch. 388, at p. 391. (<>) Evans v. Wuod, 5 Eq. 9. (p) Taylor v. Stray, 26 L. J. C. P. 185, 287 ; 2 C. B. N. S. 175, 197. (5) Hunt v. Gunn, 13 C. B. N. S. 226 ; 7 L. T. 277. (r) Ante, Chap. If. COMPLETION. 165 custom and of Eule 100, it is conceived that the old Old cases ; cases, which decided that the tender of a transfer hy the between purchaser was a condition precedent to any right of dealings on, ,. , ,. / ., and off, the action for non-delivery (s), are no longer 01 authority stock where the dealings have taken place on the Stock Exchan & e - Exchange. Where the dealings have not taken place on the Stock Exchange, or subject to its, or to similar, rules, these cases would still seem to be authority for saying that the duty of preparing and tendering a transfer is on the purchaser. Owing to the system of passing names, the amount Price on to be paid by the ultimate purchaser is hardly ever the JJJJJJ 8 ^ ' that same as that to be received by the ultimate seller, ultimate The consideration appearing on the transfer, which is prepared by the ultimate purchaser's broker, is in the ordinary course the price marked on the ticket, that is, the price the purchaser is going to pay; and, for the purpose of stamp duty, this price governs the amount of duty payable (t) . There is upon most forms of transfer a note to the effect that there may be a difference between the consideration stated in the transfer and the price to be received by the transferor. Where this form of transfer is used, the transferor is bound, by custom, to execute the transfer, notwithstanding such difference in price (M). Without such a note, the custom probably would not be binding on a person contracting in ignorance of it, for it would be making the transferor state an untrue consideration for his sale (u), and perhaps acknowledge the receipt of more than he has in fact received. When the transfer has to be by () Stephens v. De Medina, 4 duty is payable by the pur- Q. B. 422; Bowlby v. Bell, 3 chaser< C. B. 284 ; 16 L. J. C. P. 18. McClellan, 25 L. 50Z. ; t'6. Schedule I., "Con- also Mewlurnv. Eaton, 20 L. veyance or Transfer." This T. 449. 1(36 THE STOCK EXCHANGE AND THE PUBLIC. deed, it must be filled up in all material parts when executed and delivered (#). Therefore, in such case, a transfer with the consideration left blank is void, and gives no title to the transferee ; nor has the transferee any authority to fill up the blank (y). An alleged custom that a blank transfer shall be good delivery is bad(y). SUB-SECT, (iii). WARRANTY or TITLE. Common By the old Common Law, a seller did not, in the absence of custom or particular circumstances, warrant that he had a good title to dispose of what he sold (z) . On this ground it has been decided that if, after a sale of securities, it is discovered that the seller had no title to dispose of them, and the purchaser in consequence is deprived of his securities, the purchaser can recover back what he paid, as on a consideration which has failed, but not any damages he may have suffered by reason of the loss of the securities, such as profit accrued owing to a rise in the price (a). But in a subsequent case it was said that there were so many exceptions as to " have well-nigh eaten up the rule " (b) ; and it is probably correct to say that the Common Law has changed, and that a sale of personal chattels implies an affirmation by the vendor that the chattels are his, and that, therefore, he warrants the title, unless it is shown by the facts and circumstances of the sale that the vendor did not intend to assert ownership, but only to transfer such interest as he might have (c) . When the (z) Ante, pp. 29, 147. Cole, 3 Bing. N. C. 724 ; 4 (y} Tayler v. Great Indian Scott, 489. Peninsula Bail. Co., 28 L. J. (&) Sims v. Marryat, 17 Q. Ch. 285, 709; 4DeQ.&J. 559. B - 281, at p. 291, ptr Lord 7 Campbell. (z) Morleii v. Attenborouqh. / \ -r> ^ , , , 3 Ex 500 ^ Ben J amm on Sale ( 4t]l ed.), pp. 634, 643; and see (a) Westropp v. Solomon, 8 Eichoh v. Bannister, 34 L. J". C. B. 345 ; and see Young v. C. P. 105 ; 17 0. B. N. S. 708. COMPLETION. 167 transfer is by deed, a warranty of title is implied (f/). Conveyancing Where such a warranty is implied, the damages, which were refused in the case of Westropp v. Solomon, would be recoverable for breach of the warranty. In Stock Exchange bargains this question is dealt On sale with, so far as concerns securities transferable by deed, f s * ck ' J ' Exchange by Rule 94 "a piece of crabbed English, and dim- securities cult to understand" (e) which has been held to mean a^a e Rule 94- that the seller remains responsible for the genuineness and regularity of the documents delivered by him (/) . Under this rule the Committee will, at any time before the expiration of a reasonable time for the purchaser to get himself registered, adjudicate upon any dispute which may arise as to the genuineness and regularity of documents delivered. After the expiration of this reasonable time, the Committee will not, in the absence of fraud, take cognisance of any dispute as to title until the " legal issue " has been decided (g). The exact meaning of the words "until the legal issue has been decided " is not very clear. It certainly includes the decision of the question of title in an action at law between the real principals to the transaction, that is to say, the persons for whom the shares were sold and bought, and that notwithstanding that the persons, who were the parties to the dispute before the Committee, were not parties to the action (h}. (d) Conveyancing Act, 1881, T. 553. s. 7. Such warranty is implied (h] Smith v. Reynolds, ubi in all sales of goods (Sale of sup. But it has not yet been Goods Act, 1893, s. 12), but decided whether it is necessary, securities are not goods. in order to found the juris- (e) Smith v. Reynolds, 66 L. diction of the Committee under T. 808, at p. 811, per Fry, L. J. this rule, that the decision of (/) Ib. a Court of law should have (g) See refusal by Committee been obtained, or whether it is to adjudicate, referred to in sufficient that the legal issue Waterhouse v. London and has been decided by admission South- Western Rail, Co., 41 L. of the parties. 168 THE STOCK EXCHANGE AND THE PUBLIC. Committee compels each selling member to make good delivery. Harker v. Edwards ; Smith v. Reynolds. Westropp v. Solomon dis- tinguishable. On sale of bearer securities ; Rule 130. The effect of the rule is that, where documents which are not genuine have been delivered upon the Stock Exchange, and the purchaser, in consequence, is either unable to get himself registered, or, having obtained registration, has been removed from the register as the result of a legal decision, the Committee will, as between the members who have participated in the transaction, compel each vendor to make good delivery to his pur- chaser, and so ultimately cast the loss upon that member who first sold the spurious securities. The member, so made responsible upon the Stock Exchange, is entitled, if he has acted in the matter for a client, to recover from that client, in an action for indemnity, what he has been compelled by the decision of the Committee to pay (). The case of Westropp v. Solomon (A 1 ), which seems at first sight to conflict with the decisions of Smith v. Reynolds and Harker v. Edwards, was decided upon its own special facts, and is probably distinguishable upon the ground that no rule of the Stock Exchange, making the seller, in effect, warrant the genuineness of docu- ments, was before the Court. The last part of Rule 94 provides that the seller shall bear the reasonable expenses of the legal proceedings to determine the " legal issue." This, presumably, means that where the person complaining to the Committee has, in order to found their jurisdiction, been put to expense in obtaining a legal decision, the Committee will make the seller pay that expense as part of the damages suffered. In the case of bearer securities, the matter is dealt with by Eule 130. The deliverer, that is, the ultimate seller on the Stock Exchange, is responsible for the (t) Harker v. Edwards, 57 L. J. Q. B. 147 ; Smith v. Reynolds, ubi sup. (fc) 8 C. B. 345. COMPLETION. 169 genuineness of securities delivered ; and in case the deliverer dies, defaults, or ceases to be a member, this responsibility attaches to the member to whom he sold, who in turn becomes the deliverer for the purpose of this rule. Under this rule the deliverer, or his estate, would presumably remain liable, notwithstanding his death, default, or ceasing to be a member ; but the member aggrieved would be allowed the alternative of recovering against the first solvent seller who remained a member. A broker, having to pay under this rule, has a right of indemnity against a client who has caused him to deliver the documents (/). A member of the public, who has suffered loss through receiving documents which are not genuine, will thus be able to recover his loss from the seller's broker, or, failing him, from the last solvent member on the "trace " ; for this is his broker's right under these rules, and he could, it is submitted, compel his broker to enforce this right on his behalf. SUB-SECT, (iv) . PAYMENT. Where a ticket has been issued by the purchaser of any securities, the payment of the price is not, as between the members who have dealt therein, made in one sum. As has been explained elsewhere, part of the purchase price may have been paid by way of differ- ences, which are settled upon account day and irrespective of any actual delivery or transfer of the securities. In such a case, the payment which remains to be made upon the actual completion of the bargain is either the making-up price or the price on the ticket, as the case may be. This has to be paid by the purchasing member either by cheque upon a clearing-house bank, or, if the seller so requires (m), in bank notes. But with these details the client has generally no concern. (Z) On the principle of Smith v. Reynolds, 66 L. T. 808. (m) Eule 68. 170 THE STOCK EXCHANGE AND THE PUBLIC. Custom to take members' cheques with- out inquiry. Client must put broker in funds before account day. Can non- member insist on completing direct with jobber? Discussed. It is customary for a broker to deliver securities against another member's crossed cheque ; and it is not negligence for him to do so without first inquiring if the other member has assets to meet the cheque (n). The client, when a purchaser, must put his broker in funds by account day, to enable him to pay the whole purchase price for the securities when tendered to him (o) ; and the broker, on receiving the securities, must hand them to his client, and, if he delays unreasonably in so doing, and his client thereby suffers loss, he may be made liable in an action for damages (p). The method in which payment is to be made between a client and his broker is a matter for arrangement between them, the rule as to cheques having no applica- tion except as between members. Where the client is a seller, he must put his broker in possession of the securities in time to enable him to make delivery within the time allowed. The client is entitled to receive the purchase price from his broker, when the broker has been paid by the person to whom the sale has been made, and not before. A question might arise as to whether a non-member, who has effected a purchase or sale through a broker upon the Stock Exchange, is entitled, if he so desires, to insist upon his bargain being completed with himself direct by the member with whom he has dealt, and without the further intervention of the broker. This is constantly done in cases where the broker has defaulted, and consequently ceased to be a member, but the point has never been decided in a case in which the broker has not been declared a defaulter. By Eule 67, no (n) Mocatta v. Sell, 24 Beav. 585 ; 27 L. J. Ch. 287. (o) Stock and Share Auction Co. v. Galmoye, 3 T. L. E. 808 ; Macoun v. Erskine Oxenford, [1901] 2 K. B. 493, at p. 501, per Vaughan Williams, L. J. (p} Benjamin v. Barnett, 8 Com. Cas. 244. COMPLETION. member need take a reference for payment to a non- member, and no member shall be obliged to pay a non- member for securities bought. The first part of this rule seems to aim at preventing a broker, who by the rules is personally responsible upon the Stock Exchange, from attempting to rid himself of his liability by referring the member with whom he has dealt to a non- member for payment. This merely enunciates the elementary principle of law that, where a man has entered into a contract in his own name, and upon which he is personally responsible, he cannot, without the consent of the other contracting party, rid himself of that liability by directing that other to look for pay- ment to someone else (q). The second part of the rule, however, is, if it be held to bind a non-member, con- clusive against any right in a non-member to tender securities to a member, and demand payment to himself direct for the same. The rule does not deal with the converse case of a non-member tendering payment to a member, and demanding delivery to himself of the securities purchased by him through his broker ; but, no doubt, this omission is covered by custom. Whether such rule or custom is reasonable (>) seems doubtful. On the one hand, such an intervention by a client, as that here under discussion, would completely upset all the complicated arrangements for settlement by pay- ment of differences and so on, and would necessitate an entire readjustment of all the transactions between intermediaries which had been closed by such payments. It would also have the effect of depriving the broker of any lien, which he might otherwise acquire if the secu- rities came into his hand (a) . On the other hand, one result of the working of this practice would seem to be (q} See Leake on Contract must be reasonable, see ante, (4th ed.), p. 342. p. 120. (r) As to whether a rule (s) As to lien, see post, p. 200. THE STOCK EXCHANGE AND THE PUBLIC. unreasonable, for, in the case of sale by the broker, the member whose duty it was to make payment would, upon completion by the broker, pay him by cheque upon a clearing-house bank, with the result that the proceeds of that cheque, which in fact belong to the client, might never reach the broker's account at all, but be set off in the clearing-house against other liabilities of the broker, not only to the member to whom he had sold, but to all other members with whom he had dealt. Also, in the case of a purchase through a broker of bearer securities, it might under some circumstances be most unfair to the client to insist upon his allowing such securities to come into the hands of his broker, as, for instance, if the client had reason to believe that the broker would misappropriate them. It may be, how- ever, that this question does not depend upon rule or custom. The broker has undoubtedly conferred upon him, by the order given to him to buy or to sell, an authority to take delivery and pay, or to give delivery and receive the purchase-money. This authority, if coupled with an interest, is irrevocable (t). It has never been decided that the authority of a stockbroker is irrevocable ; but it has been laid down that, if a principal employ an agent to do a legal act, the doing of which may in the ordinary course of things put the agent under the obligation to pay money to another on account of his principal, and the agent before revocation acts upon the authority, and incurs the obligation, the authority ceases to be revocable (). By making the bargain on the Stock Exchange, the broker makes him- self personally responsible to complete it himself, and renders himself liable to be declared a defaulter if he does not complete it. His authority to complete could, therefore, not be revoked by the client, in the sense that (t) Smartv.Sandars,5C.~B. (ti) Head v. Anderson, 13 Q. 895. 33. D. 779. COMPLETION. 173 the client could not order him not to pay for securities bought, or deliver securities sold, or refuse to indemnify him if, in spite of his client's prohibition, he himself completed the contract to avoid the consequences of making default. But this leaves open the question whether the client could, while not in any way declining to complete the contract, say to the broker, " I shall complete this contract, but shall do so myself, and not through you." If the rule and custom referred to above are reasonable and binding, they would prevent the client from completing direct with the jobber to the exclusion of the broker. If they are held to be unrea- sonable, the only legitimate interest of the broker in the transaction, upon which reliance could be placed to show that the broker's authority to complete was irrevocable, would be the broker's interest to have the contract com- pleted, so as to release him from his personal liability thereunder. By completing direct with the jobber, the client would extinguish the broker's liability, and thus extinguish the interest as well ; and the broker's autho- rity would then no longer be irrevocable. It should be borne in mind that, under some circumstances, the broker's authority might be coupled with another interest, as, for instance, if the client owed the broker money, and instructed him to sell securities and reim- burse himself out of the proceeds. Such an authority, however, would only arise as the result of special agreement. There might, of course, be cases in which no such difficulties would arise. For instance, if a broker held securities belonging to a client in circum- stances in which a lien attached to the securities for money owing to the broker, and the broker contracted to sell such securities for his client, the client would not, in any event, be entitled to insist upon the jobber paying him direct; because the broker would, apart from any special rules or customs, be entitled to refuse to deliver up the securities, except upon the THE STOCK EXCHANGE AND THE PUBLIC. terms of his lien being first discharged. The law is that, when an agent is authorised to receive payment, the principal may intercept it by giving notice to the debtor, before the money is paid, not to pay the agent ; and, in such case, if the agent has no superior right, from a lien or otherwise, any subsequent payment made to the agent would be invalid (#) ; but, if the agent has a lien or other interest, he is entitled to protection against his principal to that extent (*/). If the client first discharged the lien by payment, the same difficulties would arise as are dealt with above. Clients have sued jobbers direct in respect of the con- tracts entered into for them by their brokers (z) ; but the point here under discussion was not raised in any of these cases (a). It has been held that where the client's account is a speculative one, resulting only in differences, he cannot discharge his liability to his broker by paying a jobber with whom the broker has dealt. This decision was based upon the ground that, in such a case, the client must be taken to have agreed that the differences should be settled in the way usual upon the Stock Exchange in speculative transactions, and to have agreed to be merely a creditor, or debtor, of the broker, as the case may be, for the balance resulting from the aggregate of (x) Morris v. Cleasly, 1 M. & members principals, and only S. 576; Story on Agency, p. 494. recognising them, does not take (z/) Story on Agency, p. 494. away the right of the real prin- (z) E.g., Union Corporation cipal to sue, in respect of his v. Charrington, 8 Com. Gas. own rights, in his own name 99 ; Stray v. Russell, 1 E. & E. (Langton v. Waite, 6 Eq. 165) ; 888 ; 28 L. J. Q. B. 279 ; 29 but this case does not seem to L. J. Q. B. 115; Mortimer v. affect the question whether a McCallan, 6 M. & "W. 58 ; 9 principal can intervene in the L. J. Ex. 73 ; Russell v. Ben- manner here discussed : see digo Goldfields, The Times, also Humphrey v. Lucas, 2 C. Nov. 28th, 1896. & K. 152; Hawkins v. Pearse, () The rule making all 9 Com. Gas. 87. COMPLETION. 175 his transactions through the broker (b) . The grounds of this decision confine its authority to cases where the account is a purely speculative one ; it therefore does not seem to affect the general question of the client's right to complete direct with the jobber in an ordinary case. A broker who has sold securities, and received the Broker re- price, must make payment to the owner thereof, or to some aerent authorised to receive payment on his behalf, owner of securities or Authority in an agent to receive payment may be of his authorised one of three kinds : either express ; or implied, as by a a o ent - usage of trade ; or ostensible, that is to say, conferred by some action on the part of his principal, whereby he is held out as having such an authority (c). If a broker should pay some one other than the owner, or his agent so authorised, and the money does not come into the owner's hands, the broker would have -to pay over again. A broker is often instructed to sell by one of several Broker co-owners, such as trustees, or by an agent for the owner or owners, such as a solicitor or banker. It by co-owners. no means follows that, because a broker is instructed to sell by a certain person, he is entitled to pay that person, and so discharge himself from liability. It has been said that there is a custom that a broker need only recognise the person instructing him ; but such custom, if it exist, is unreasonable, and does not bind any one who is ignorant of it (d). No authority, implied or ostensible, to receive pay- Authority to ment (e) is conferred upon an agent, instructed to sell, pay a s ent - (6) Re Woodd, Ex p. King, (d) Blackburn v. Mason, 68 82 L. T. 504. L. T. 510 ; Pearson v. Scott, 9 (c) Morel v. Westmoreland, Ch. D. 198. [1903] 1 Z. B. 64; [1904] (e) See Leake on Contract A. C. 11. (4th ed.), p. 349; Story on THE STOCK EXCHANGE AND THE PUBLIC. Effect of entrusting agent with documents. Pearson v. Scott. and acting for a disclosed principal (/), by the fact alone, that such instructions have been given to him. But such authority may be given by the position of the particular agent, or by some other circumstances. Thus, a broker on the Stock Exchange is an agent who is held out as having authority to receive payment from those to whom he has sold ; for it is part of the regular business of a broker to complete bargains for his clients. It has been said that, where an agent is entrusted with documents which enable him to complete a sale, he is held out as having authority to receive the money. So where a solicitor was given certificates, and transfers containing a receipt for the purchase-money signed by the owners of the securities, and transmitted them to a broker, who had sold on his instructions, and the broker paid part of the money arising from the sale to the solicitor, and the latter absconded, Fry, J., said : " That would, in my judgment, import an authority in the person who was allowed to transmit these receipts, himself to receive payment in money "( 9 a B< N- s< 5M . 29 8up " L. J. C. P. 265. (p) Pearson v.Scott, Crossley (s) Crossley v. Magniac, v. Magniac, Andersonv.Sitther- Blackburn v. Mason, ubi sup. COMPLETION. 179 whose names the securities stand, and the broker is not entitled to assume that any such person is a bare trustee for him who gave the instructions. " He cannot safely assume, when he knows that the legal estate is in A. B., that the whole equity is in 0. D., without making inquiry of A. B." (t). So where a broker, instructed to sell, receives from his client securities with duly signed and receipted transfers, and the securities do not stand in the sole name of the client, although he may have authority to pay the proceeds to the client, or to reinvest them in other securities in the same names (?), he has no power to apply them to the client's current account with him, or to reinvest them in his sole name (u), without the express authority of the real owner or owners (x) . Where an agent is authorised to receive the purchase- money and to keep part, that part need not be paid in cash, but can be set off or otherwise dealt with (y). Payment by cheque which is duly honoured (z) is Payment by equivalent to payment in cash, although the cheque is eqLue crossed, and although it contains also other amounts due to the agent (a). Provided that it is found as a fact that payment by crossed cheque is a proper method of payment, as has been found (a), and would no doubt be found again, a broker, so paying an agent authorised to receive payment, is discharged, although the agent's bank appropriates the money to the agent's overdrawn account (b). Payment, however, to the agent by a bill (t) Pearson v. Scott, 9 Ch. D. banks, He Shanks, 11 Ch.D. 525. 198, at p. 203, per Fry, J. ; and (z) Crossley v. Magniac, ubi see also Magnus v. Queensland sup. National Bank, 37 Ch. D. 466. (a) Bridges v. Garrett, 5 C. (M) Magnus v. Queensland P. 451. National Bank, ubi sup. (V) Ib. ; and see Coleman v. (a;) Pearson v. Scott, and Bucks and Oxon Bank, [1897] other cases cited supra. 2 Ch. 243. As to principal's (y} Barker v. Greenwood, 2 rights in such case against the ' Y. & C. Ex. 414; Ex p. Swin- bank, see post, pp. 180 ft seqq. N 2 180 THE STOCK EXCHANGE AND THE PUBLIC. of exchange which at maturity is paid to a third person, or by a bill which cannot be allocated to the specific transaction, does not discharge the broker (c). Following Trust money, so long as it can be traced, may be trust money, followed, whether it remains money, or is converted into something else; and it is immaterial whether it is mixed with other money belonging to the trustee, either at his bank or in his own possession, or is laid out with other money in some investment. If it remains in money, so much as is trust money can be followed and retaken by the cestui que trust ; and if it is invested with other money, the cestui que trust can obtain a charge on the investment for the amount (d). If trust money is mixed with other money of the trustee, as by being paid into the trustee's banking account, and from that account the trustee subsequently draws money, the law presumes that, so long as there is money of the trustee's in the account, he has drawn his own, and not the trust, money ; and the rule in Clayton's Rule in Case (e) namely, that payments made out of an ac- count are to be considered as made out of the first pay- ments in has no application. When, however, the money in the trustee's banking account consists of nothing but trust funds, whether there was originally any of the trustee's own money in the account or not, and the trustee draws out and spends some of it, if it become material, owing to the trust funds belonging to various persons, to decide which fund has been drawn out, the rule in Clayton's Case applies, and that trust fund, which was first paid in, is considered as being the one, that was first drawn out and misappropriated (/). (c) Crossley v. Magniac, ubi (e) 1 Mer. 572. eup. at p. 601. (d) Taylor v. Plumer, 3 M. (/) In re Stennin ff> Wood v. & S. 562. Stenning, [1895] 2 Ck 433. COMPLETION. 181 So where a broker, with notice that certain Consols Re Cooke, EX p. which he had sold belonged to a trust, paid, with his client's authority, the proceeds into his own banking account pending reinvestment, and then became bank- rupt before the reinvestment, it was held that the cestui que trust was entitled, as against the general creditors, to so much of the balance at the broker's bank as was attributable to the sale of the Consols (). Where the time to be allowed for any act is not fixed by the contract, or by the rules and customs, then the law allows a reasonable time ; and what time is, under the circumstances, reasonable is a question of fact to be decided in each case. "Where the time is fixed, but is extended by agreement, time remains of the essence of the contract, but the extended is substituted for the original time (c). (a) Dolord v. Rothschild, 1 at p. 249. Sim.&S. 590; 2L.J.(O.S.)Ch. (6) De Waal v. Adler, 12 125 ; 24 E. E. 243 ; Fletcher v. A. 0. 141. Marshall, 15 M. & W. 755; (c) Barclay v. Messenger, 43 Renter v. Sala, 4 C. P. D. 239, L. J. Ch. 449. 184 THE STOCK EXCHANGE AND THE PUBLIC. SUB-SECT, (i). BREACH OF THE CONTRACT BETWEEN BROKER AND CLIENT. Breach bj The client's chief obligations are to pay differences client. when due, to pay for securities bought and to take delivery thereof, to deliver securities sold, and to indemnify his broker. He may break his contract by failing to do any of these things. In payment of The differences arising on Stock Exchange transac- 3e8 ' tions are, as has been seen, payable as between members on account day. The client is informed by his broker, by means of his fortnightly account, what differences are payable by him. A broker may agree with his client not to require payment by account day (d) ; but, in the absence of such agreement, the client must put his broker in funds in time to enable him to carry out his obligations ; that is to say, the broker is entitled to receive from his client, before account day, the differ- ences that he will have to pay on his behalf on that day (). A broker may, and often does, agree to take collateral security or cover, instead of requiring cash for the differences. Broker may If the client fails to pay differences, which are not secured by collateral security appropriated to the liquidation thereof, the broker, provided the client has had notice of what is due from him (/), can close the client's account by selling what the client has bought, and buying what the client has sold (/). Davis v. The fact that the broker has already carried-over the ir ' bargains to the next account does not affect his right to (d} Murray v. Hewitt, 2 T. Oxenford, [1901] 2 K. B. 493, L. B. 872. at p. 501, per Vaughan Wil- (e) Stock and Share Auction liams, L. J. Company v. Galmoye, 3 T. L. (/) Davis v. Howard, 24 Q. E. 808; Macoun v. ErsMne B. D. 691. BREACH. 185 close them, because a carrying-over results in a bargain for the account day of the next account, which the custom of the Stock Exchange allows the broker to close, if the differences arising on the carrying-over are not paid by the account day of the current account (g) . If the broker close the account he must, if possible, close the whole ; and if he close only part, he will be liable in damages for the wrongful closing of that part (/i) . If, however, a client, who is in default, wishes his account carried-over, and it is not possible to carry- over the whole, the broker may close that part which he cannot get carried-over, and carry-over the rest (?'). If the client is dealing with the broker on the terms When cover that the client deposits, as cover, so much money or a security, and that his account may be closed as soon as it shows, on the then market prices, a loss equal to the cover (&), the broker can, of course, close the account as soon as this happens ; but if he do not do so, and the position of the account improves, so that the loss is again less than the amount of the cover, he may not close until the cover is again exhausted (I). Securities deposited as cover are deposited by way of pledge, and a contract is implied that the pledge shall be made effectual to discharge the debt (m). The debt accrues, according to the terms on which the business is being done, either on account day, or when the account (g] Davis v. Howard, ubi "cover" system take place; sup. ; Druce v. Levy, 7 T. L. E. but, apart from such agree- 259. ment, the mere fact that secu- f/0 Samuel v. Rowe, 8 T. L. rit ^ is re( l ui f d would not 8eem n 400 to entitle the broker to close the account before account (i) Outturn v. Hodges, 18 T. a ay) even if meanwhile the L. E. 6. cover is exhausted. (&) These are frequently the (1) Hogan v. Shaw, 5 T. L. E. terms on which dealings both 613. on and off the Stock Exchange (m) Tucker v. Wilson, 1 P. on what is known as the W. 261 ; 24 E. E. 379. 180 THE STOCK EXCHANGE AND THE PUBLIC. is properly closed ; and the broker has, without any express agreement to that effect, a right to realise the securities upon the deht not being duly paid (n) . On death, When a client dies, or becomes bankrupt or insolvent, kiukruptcy or Curing: the currency of an account, the broker is by insolvency of ^ client. custom allowed to close the client's account forthwith ; and this custom has been held to be reasonable (o). Death of On the death of a client the broker's authority to carry-over is determined, and unless arrangements are made with the client's representatives, the broker cannot continue the account beyond the next account day ( p). In a case where the broker did carry-over a deceased client's account, the first part of the carrying- over was treated as a sale to close the client's bar- gain, and the second part as a purchase by the broker for himself. Whether the client's representa- tives could have adopted the whole carrying-over was expressly left open (). So where a client, who was a partner in a bank, attempted to commit suicide, and Lacey v. Hill, next day the bank suspended payment, it was held that this was sufficient evidence of insolvency, and that his broker was justified in closing his account (r). Lacey v. Hill, In Lacey v. Hill, Scrimgeour's Claim (), in which the Scrimyeour's ,. , t. i A i Claim. same tacts were relied on as showing insolvency, the broker was held justified on two grounds : (1) That the broker himself had paid for the stock, and could sell to recoup himself the money laid out ; and (2) (n) Langton v. Waite, 6 Eq. (5) In re Overweg, Haas v. 165 ; cf . France v. Clark, 22 Durant, [1900] 1 Ch. 209. Ch. D. 830. , , T (r) Lacey v. Hill, Crowley's (o) Lacey v. Hill, Scrim- ni . 10 -r, 100 T , v ' , , * Claim, 18 Eq. 182, per Jessel, yeour's Claim, 8 Ch. 921. MB, (jp) Phillip v. Jones, 4 T. L. E. 401. () 8 Ch. 921. BREACH . 187 that, by the custom, he could, on the insolvency of the client, sell to avoid further risk. It is, however, also there suggested that, if the price of the stock had sub- sequently risen, the client might have had a right of action for damages for wrongful closing. This was not necessary for the decision, and, if correctly reported, seems inconsistent with the decision that there was a right to close ; for, as Rigby, L. J., pointed out in his dissenting judgment in Ellis v. Pond (t), a man cannot be justified in making a sale, and yet be liable in damages for so doing. A contract may be broken before the time for per- Anticipatory formance arrives, by one of the parties refusing to carry out the contract, and communicating such refusal to the other party. This is what is known as an anticipatory breach; and the principles relating to it have been applied to contracts concerning stocks and shares, both as between principals, and as between broker and client. Where one party has thus committed an anticipatory breach, there are two courses open to the other party to the contract. He may either disregard the renuncia- tion and treat the contract as still existing, it not being open to one party to a contract to rescind it without the other's consent (u) ; or he may accept the renunciation as a breach putting an end to the contract, except for the purpose of suing in respect of the breach (#) . If he does not accept the renunciation, the contract with all its incidents remains open for both parties; and the other party may, if he choose, complete the contract when the time comes, or take advantage of (<) [1898] 1 Q. B. 426, at Ex. Ill; Hochster v. Delatour, p. 449. 2 E. & B. 678; 22 L. J. Q. B. (u] Philpotts v. Evans, 5 M. 455; Roper v. Johnson, 8 0. P. & W. 475; Leigh v. Paterson, 167; Johnstone v. Milling, 16 2 Moore, 588; Mi chad v. Hart , Q. B. D. 460; Tredegar Iron [1902] 1 K. B. 482. and Coal Co. v. Hawthorn, 18 (as) Frost v. Knight, L. E. 7 T. L. E. 716. 188 THE STOCK EXCHANGE AND THE PUBLIC. Breach accepted by conduct. Breach not accepted ; measure of any circumstance justifying him in declining to com- plete (y). He must elect which he will do, and may not proceed with the contract on the footing that it still exists for other purposes, and also treat the renuncia- tion as an immediate breach (z) . For making this election, he would, presumably, be entitled to a reason- able time ; but if he attempted to accept the renunciation after a reasonable time had elapsed, it would probably be open to the other party to say : " You did not accept my renunciation when you had the chance, and it is now too late, and I intend to complete." The acceptance of the breach may be shown by conduct. Thus the bringing of an action, before the arrival of the date for completion, shows that the breach was accepted as final (a). If such action were com- menced after the expiration of a reasonable time after the attempted breach, the defendant would probably be able successfully to contend that the contract was not rescinded. If the defendant does not choose to avail himself of this defence, he can treat his renuncia- tion as accepted on the date of the writ, and this date will then become the one with reference to which damages must be fixed (J). Where the renunciation is not accepted, and the contract is not performed when the time arrives, the measure of damages is the difference between the con- tract price and the value of the subject-matter of the contract at the time for performance (c) . In this case, the general rule applies, that, if there is a market price, this conclusively fixes the value ; if there is no market (y) Frost v. Knight, L. E. 7 Ex. Ill, per Cockburn, C. J. (2) Johnstons v. Milling, 16 Q. B. D. 460, at p. 467, per Esher, M. E. (a) Roper v. Johnson, 8 C. P. 167; Michael v. Hart, [1902] 1 K. B. 482, at p. 492. (6) Rothv.TayzenTownsend, I Com. Gas. 240, 313. (c) Roper v. Johnson, ubi sup. BREACH. 189 price, the value is to be ascertained as a question of fact on the evidence adduced (d ) . When the renunciation has been accepted, and an Breach action is brought for damages for the breach, the measure of damages recoverable are such that would have arisen from the non-performance of the contract at the appointed time, subject to abatement in respect of any circum- stances which may have afforded means of mitigating the loss (e). It was recently laid down that in such case the damages are to be calculated as on the date of the acceptance of the renunciation (/). This decision is, it is submitted, quite reconcilable with the propositions above enunciated, for it is really stating the result of the qualifying clause; because, when there is a free market, the price on the date of the acceptance of the renunciation will show to what extent the loss could be mitigated. The true view in such cases is, it is submitted, that the measure of damages is the difference between the contract price and value of the bargain which has been broken, such value to be estimated as on the date of the breach, that is, of the acceptance of the renunciation. Thus, if the breach is the accepted refusal to take shares which are deliverable under the contract, say, six months later, the question for the jury would be, what was the value to the seller, on the date of such breach, of a con- tract to take delivery of those shares in six months' time ? It would follow, if there were a market price, that the value of the contract, which could be at once replaced, would depend on the market price at that date. Therefore, when there is an anticipatory breach and a (e) Elbinger Actiengesell- son., Johnstone v. Milling, ubi schaft v. Armstrong, L. B. 9 sup. Q. B. 473, at p. 476. (/) Tredegar Iron and Coal (e) Frost v. Knight, per Co. v. Hawthorn, 18 T. L. E. Cockburn, C. J., Roper v. John- 716, per Mathew, L. J. 190 THE STOCK EXCHANGE AND THE PUBLIC. Anticipatory breach by client ; remedies of broker. market price, the damages are the difference between the contract price and the market price on the date, or perhaps within a reasonable time of the date (g), of the acceptance of the renunciation. The date of the acceptance of the renunciation is a question of fact. When there have been several refusals to accept or deliver, and negotiations have taken place, it is a question for the jury when the breach finally took place (h) . A client may commit an anticipatory breach by giving notice to his broker before the date for performance, that he will not carry out his contract. It is then open to the broker, either to refuse to accept such repudiation, or to accept it as a final breach of the contract between them. If he adopts the former course, he is entitled to an indemnity when the time for performance arrives, and he can at once bring an action for a declaration that he is entitled to be indemnified in respect of his liability under the contract (*). If he accepts the repu- diation as a breach, he need not wait for the date of performance, but can sue his client at once for damages or an indemnity, an I he can either close the account (A 1 ), and so fix the amount of his damages or indemnity, or keep the bargain for himself, and claim from the client as damages the difference between the contract price and the market price of the securities at, or within a reasonable time of, the date of the acceptance of the repudiation as a final breach (/). It is an agent's duty to assist his principal in every reasonable way against the other contracting party. (g) Pott v. Flather, 16 L. J. Q. B. 366. (h) Earned v. Hamilton, 2 Ey. Gas. 624. (?') Lacey v. Hill, Crowley's Claim, 18 Eq. 182; cf. Wolmer- hausenv. Gullick, [1893] 2 Ch. 514. (k) Cullum v. Hodges, 18 T. L. E. 6. (I) Walter and Gould v. Sing, 13 T. L. E. 270; Macoun v. Erskine Oxenford & Co., [1901] 2 K. B. 493. BREACH. 191 Where an agent sues for indemnity (m) t his principal may wish to dispute the liability of the agent to the other contracting party, and in such case, it is sub- mitted, the order for indemnity, if made, should include liberty to the principal to defend any proceedings brought against the agent by the other contracting party. In a recent case (n], an outside broker sued his RoMm\. client for indemnity against a claim made by a broker egar ' on the Stock Exchange, who had been employed by the outside broker, and the client alleged that the Stock Exchange broker had no enforceable claim against him or the outside broker, by reason of the fact that the Stock Exchange broker was employed as an agent and had sold his own shares. The Court of Appeal adjourned the case pending the trial of an action in which, by agreement between the parties, the Stock Exchange broker was to be plaintiff and the outside broker defendant, and the outside broker's defence was to be conducted by the client. It would seem that, if the outside broker had refused to resist the Stock Exchange broker's claim, his action for indemnity should have been dismissed ; and if the Stock Exchange broker, who was not a party to the original action, had not come before the Court, and agreed to take pro- ceedings to have the question tried, the order should have been for an indemnity, if the outside broker, on being indemnified as to costs, undertook to resist the Stock Exchange broker's claim, and to allow the client to conduct any proceedings that might be taken. The most satisfactory method for a broker to adopt, Method of in order to effect the compulsory closing of his client's Account b broker. (m) He may do so when he 2 Ch. 514. has not yet paid anything, but (n) Robins v. Segar, heard in only anticipates a liability : Court of Appeal in 1903, but Wolmerhausen v. Gullick^lSQS] unreported. 192 By sale or Passing jobber's Macoun v. Oxenford. THE STOCK EXCHANGE AND THE PUBLIC. account, is, without doubt, to enter into the necessary transactions of purchase or sale in the open market in the ordinary course. The buying in or selling out need not be effected through the official broker, as Rule 72 only applies as between members (o). It was formerly considered that a broker could not properly close his client's account in any other manner than by sale or purchase on the market ; but this can no longer be said to be the law since the following decisions of the Court of Appeal. In Walter and Gould v. King (p), a broker, being entitled to close a client's account, went to a jobber and sold the shares to him, and at the same time repurchased them from him, thus simply passing them through the jobber's books. It was held that the broker's claim being for an indemnity, and the broker being bound to minimise the client's loss, he could do so by keeping the shares himself, and fixing the amount for which he was to give his client credit in the manner adopted, provided he acted honestly. The objection to this course is that the agent is in fact purchasing shares from his own client. It is to be observed that in this particular case there was no market in the shares, and also that the broker had at the request of his client originally purchased the shares, and paid for them with his own money. This decision was followed by the Court of Appeal in Macoun v. Ersldne Oxenford (q) , where the broker ^ad c l se( l the account by getting a jobber to make him a price, and then selling to, and buying from, him. It was admitted that the sales were at the fair market price. Smith and Eomer, L. JJ., held that the account was properly closed ; Yaughan Williams and Eomer, L. JJ., that, owing to the lines on which the case had (o) Scott v. Ernest, 16 T. L. . 498. (p) 13 T. L. E. 270. ( ? ) [1901] 2 K B. 493. BKEACH. 193 been conducted in the Court below, the point was not open to the client. Vaughan Williams, L. J. (r), pointed out that the facts of this case were clearly distinguishable from those in Walter and Gould v. King, on the grounds that in that case the broker had paid for the shares, and there was no market in the shares. The learned Lord Justice added that in his opinion to close a client's account by selling to a jobber, with a contemporaneous bargain to repurchase from him, might lead to a price being made which was not the real market price, and was, therefore, to some extent an unfortunate position for a broker to put himself into. This case was immediately followed by Erskine Oxenford v. Sachs (s], where the whole Court agreed that the point must now be considered concluded by the two decisions above quoted. It must, therefore, be considered established, unless, Objections to indeed, the House of Lords were hereafter to take a 8 C( different view, that this method of closing is permissible. It certainly does not seem desirable ; for it places the broker in a position in which his interest might be adverse to his client's ; for it is immaterial to the jobber at what price the shares are put through his books, and it is obviously to the broker's advantage, and the client's disadvantage, that the price should be as low as possible in closing a purchase of the client's, and as high as possible in closing a sale. If in so closing an account the broker makes any Broker cannot profit, he must account for it to his client. So a broker ret am profit made in so who informed the jobber that he was going to sell and closing repurchase, with the result that he had to pay for the purchase only \\d. per share more than he got for the sale, while the ordinary jobber's turn would have been Is. '6d. or -n-th, was made to account to his client for Is. l^d. per share, as this was considered as the profit (r] [1901] 2 K. B. 499. (s) Ib. 504. s. o 194 THE STOCK EXCHANGE AND THE PUBLIC. Anticipatory breach by broker. Wrongful closing of client's account ; breach accepted by client. Measure of damages. he made by so closing (f). This ruling would seem to afford an additional reason for not adopting this course. Should a hroker wrongfully close his client's account, he commits an anticipatory breach (it) ; and the client, on receiving notice of the fact, can either accept the closing as putting an end to his bargain, or refuse to do so, and claim to have his bargain completed at the proper time, or, failing this, to be put, by means of damages, in the same position as if it had been com- pleted. If the client treats the closing as putting an end to the bargain, he is entitled to any damages he may suffer by reason thereof. In such case the measure of damages is the difference between the price of the wrongful closing and the price at which the client could in a reasonable time make another bargain to replace the closed bargain. For, whilst the client is to be placed in the same position as if the contract had not been broken, all circumstances which afford means of mitigating the loss must be taken into account, it being the client's duty to prevent as much of the loss as he can (x). Apart from this duty to mitigate the loss, the client's damages would be the difference between the price at which his account was closed and the price on the proper day for performance ; but as the client can make a fresh bargain to be performed on that day, he is in fact only entitled to the difference between the price at which his account was closed and the market price at a reasonable time after the closing (y). The (t } Erskine Oxenfordv. Sachs, [1901] 2 K. B. 504. (u) See ante, p. 187. (x) Samuel v. Roiue, 8 T. L. E. 488. (y) Murray v. Hewitt, 2 T. L. E. 872. Here the damages awarded were the difference between the price at which the account was closed and the price at the date of the writ ; but the wrongful closing was only discovered shortly before the writ was issued, and there was no evidence of any fluctua- tions in price between the date of the discovery and of the writ. BREACH. 195 client is entitled to a reasonable time, after notice of the wrongful closing, to turn round ; but he may not lie by to see if the concern becomes profitable, or inflame his damages by remaining inactive (z). If the client was allowed, in his dealings with the particular broker, some peculiar facilities which, to the knowledge of that broker, he could not get elsewhere, if, for instance, he was being allowed to run a speculative account with little or no cover, and was not in such a financial position as to enable him to open the account elsewhere upon similar terms, this would probably be taken into account in considering the possibility of the client mitigating the damages, and the client might get the full difference between bargain price and price on the day for performance, which is generally next account day. Whether a broker, who has wrongfully closed an Broker's in- account, is entitled to an indemnity when the closing is a cunt"" accepted as a definite breach, seems rather doubtful, wrongfully For instance, if the wrongful closing shows a loss of breach 1001. to the client, and it costs him another 50/. to acce P ted - replace the bargain, the client is clearly entitled to the 50/. as damages, but whether the broker has any claim to the 1001. is not quite clear. On the one hand, the broker is prima facie entitled to no indemnity against a loss caused by his wrongful act ; but it might be argued on the other hand, that the client, having adopted the closing as a closing of his contract, must indemnify the broker in respect thereof. On the whole, in the present state of the authorities (a), it would seem that the broker in such a case has no right to an indemnity. In practice this position is not very common, for in most cases of a wrongful closing the client refuses to accept the closing. (z) Tempest v. Kilner, 3 0. B. (a) Ellis v. Pond, [1898] 1 249. Q. B. 426 ; Duncan v. Hill, L. B. 8 Ex. 242. 02 196 T1IE STOCK EXCHANGE AND THE PUBLIC. AVrongful (losing by broker ; breach not accepted by client. Measure of damages. Michael v. Hart. Lamotte. Broker's in- demnity when breach not accepted by client. Ellis v. Pond. When the client refuses to accept the closing, he can hold the broker responsible for any loss he suffers by not having his bargain completed. The measure of damages in such event has given rise to some discussion, and cannot be said to be finally settled. It has been held in two cases that, as the broker is a wrongdoer, everything must be presumed against him, and that therefore the measure of damages is the difference between the bargain price and the highest price reached by the securities between the wrongful closing and the date for completion (b} . Both these cases went to the Court of Appeal, which decided both on other points. In one, this question was argued, but in the end disposed of by agreement between the parties, and the Court, while laying it down that the measure of damages was not the differ- ence between the bargain price and the price of the wrongful closing, expressly left it open for future deci- sion, whether the damages were to be measured in rela- tion to the highest intermediate price, or to the price on account day, that is, the day for performance (c). A broker who has wrongfully closed his client's account, at any rate when such closing is not accepted by the client, is entitled to no indemnity for the loss arising upon the closing. Thus, in Ellis v. Pond (d), where a broker closed an account before account day, though he had agreed not to do so, and the closing showed a loss of 8,000/., it was decided that he could recover none of this from his client. In this case, if the account had been closed on account day, the loss to the client would have been about 4,000/., but it was held (fe) Per Wills, J., in Michael v. Hart, [1901] 2 K. B. 867, and in Aylward v. Lamotte, The Financial News, June 1 1th, 1902. (c) Michael v. Hart, [1902] 1 K B. 482 ; and cf. on this point, Williams v. Peel River Co., 55 L. T. 689; and post, p. 210. (d) [1898] 1 Q. B. 426. BREACH. 197 that he could not recover even this, for to do so he must aver and prove a promise by the client to indemnify him against the loss accrued to him by reason of the client not performing his contract with him, that is, by not taking up and paying for the securities ; and, secondly, he must aver and prove by way of breach that the client refused or neglected to perform his contract in that behalf, whereby he, the broker, had been damnified ; and this he could not do, for he himself was not ready and willing to deliver the securities (e). So where an account was closed by reason of the Default of broker being declared a defaulter, it was held that he J Duncan v. could not recover the difference between the purchase Sill. price, or last carry-over price, and the price of the closing, because that difference had arisen through his own wrong ; and further, that it was immaterial that, if the bargain had been duly completed, there would have been an even greater loss to the client (/). Where, however, the broker's default is solely attri- Broker's butable to his having entered into bargains on behalf b client? of one particular client, he is entitled to an indemnity against that client (g). The fact that a broker wrongfully closes an account Differences does not deprive him of his right to recover against his default. * client sums due in respect of previous transactions properly carried out. So where a broker carries- over a (e) [1898] 1 Q. B. 426, per position was such, that the A. L. Smith, L. J., at p. 439. brokers were entitled to close (/) Duncan v. Hill, L. E. 8 the account, and the closing Ex. 242. Since the recent de- at hammer price was, on this cisious (post, p. 211) that the ground, held to be a closing client's bargain is not affected authorised by the client, and by the closing of the broker's consequently entitling the bargain with the jobber under broker to an indemnity; and the hammer, this position is see Duncan v. Hill, ubi sup., not likely to arise again. 242, at p. 248 ; and Ellis v. (g) Lacey v. Hill, Crowley's Pond, ubi sup., at p. 460; and Claim, 18 Eq. 182, where the see post, p. 213. 198 THE STOCK EXCHANGE AND THE PUBLIC. client's bargains, and then wrongfully closes at a loss, lie can recover any difference which may have become due on the carrying-over, but not the loss accruing on the closing (/>). So, also, where the broker has, at the client's request, taken up securities for his client with his own or borrowed money, and then wrongfully sells the securities, he is entitled to an indemnity in respect of the purchase, but is liable to the client for any loss the latter may suffer by reason of the closing (i). Breach not It is to be observed tha,t these cases have been decided accepted by Qn ^ Q analogy of cases of anticipatory breach between broker's right principals where the renunciation breach is not accepted. m y> If this analogy be carried out to its logical conclusion, it would still be open to the broker who has wrongfully closed an account, where such closing has been repu- diated, to tender the securities to the client on account day, and so make the client indemnify him against any difference between the contract price and the price on that day; for, the wrongful sale having been repu- diated, he could treat it as a sale on his own, and not on the client's, behalf, and treat the client's bargain as being still open (k] . This position has not yet arisen, owing to the fact that in such cases the broker usually maintains that the closing was rightful and binding on the client, and consequently is not able to aver that he was ready and willing to carry out his part of the bargain (/). If the view just expressed be (h) Duncan v. Hill, iibi sup. open with, a third person on (i) Lacey v. Hill, Scrim- his client's behalf. geour's Claim, 8 Ch. 921 ; Ellis (?) See Ellis v. Pond, uli v. Pond, vM sup. sup. at p. 459, per Collins, L. J. (&) If the sale were specifi- "The only effect of this (the cally stated by the broker to client refusing to be bound by be a closing of the purchase the closing) would have been he had open, it would be diffi- possibly to have kept alive the cult for him to attempt to take right of the plaintiff (the up this position, because he broker) to recur to the contract, could not point to a bargain and claim payment on the BKEACH. 199 correct, it would follow that if the broker in Ellis v. Pond had, before account day, decided not to stand or fall by his closing, but had on that day tendered the securities to his client, he would have saved himself 4,000* "Where a client fails to take delivery of, and pay for, On client's securities purchased on his behalf, the broker, who has made himself personally responsible on the Stock Ex- bought ; change, has two courses open to him. He can himself remedies. take delivery and pay, and can claim from his client, by way of indemnity, what he has had to pay, in this case transferring the securities to the client against pay- ment ; or he can cause the securities to be sold, and so close the bargain, and claim any loss from the client (tn). On the principle of Walter and Gould v. King and the similar cases (n), the broker could probably adopt a third course, namely, take delivery and keep the securities for himself, charging the client with the difference between the bargain price and the market price at the date he took delivery, and then himself stand the risk of subsequent rise or fall in the price. If the client is a seller and fails to deliver, the broker On client's can close the account by buying on the market, and Deliver -^ claim any loss from the client ; or he can, presumably, broker's deliver his own securities, and make the client pay, by reme(iies> way of indemnity, the value of the securities so de- livered less the amount received for them, that is, the contract price (o). proper day, averring his own ling to do his part. readiness and willingness to ( m ) Macounv.ErskineOxen- perform on his part." The f or d & Co., [1901] 2 K. B. 493, dissenting judgment of Bigby, per Vaughan Williams, L. J. L. J., and the decision of Matthew, J., on this point (n) See anfe, p. 192. would thus seem to have been (o) On the principles laid correct, but for the fact that, down in Walter and Gould v. when account day came, the King, 13 T. L.E. 270, and other broker was not ready and wil- cases cited ante, p. 192. 200 THE STOCK EXCHANGE AND THE PUBLIC. Suspension of buying-in rule. Vnion Cor- poration v. Charrington. Broker's lien. Jones v. Peppercorne. It would also be open to him, as an alternative course, to allow the buyer of the securities to buy-in against him through the official broker, and then to claim from his client any loss thereby incurred. The remedy by buying-in may be suspended by the Committee of the Stock Exchange, and has been so suspended in cases where, owing to some fraud or " rig," or from some other cause, there are no securities available for delivery. It has been held that this suspension does not extend the time, which is of the essence of the contract, so as to compel a client, who has bought shares, to take delivery after the expiration of the contract time, or to indemnify his broker, if he then takes delivery (p). It would appear that the same considerations must apply where the client is a seller, and that the client would remain liable to an action for damages for non- deli very, notwithstanding the suspension of the buying-in rule. In the view of the Committee, the suspension of the buying-in rule does not extend the time for delivery, and it is, therefore, improbable that the Committee would allow a member to sue a client of another member for damages for non- delivery, when the buying-in rule was suspended. The liability of the seller would thus seem to be confined, for practical purposes, to the risk of the ultimate purchaser from him being a non-member and bringing such an action against him. A further remedy available to a broker against a client, who owes him money in respect of Stock Exchange transactions, is the exercise of his lien. A broker has a lien for all a client's indebtedness to him on all the client's securities that come into his hands, even though such securities are not deposited with (p} Union Corporation v. Charrington, 8 Com. Cas. 99 ; Benjamin v. Sarnett, 8 Com. Cas. 244; and see Stewart v. Weber, The Times, June 19th, 1903 ; and ante, p. 84. BEEACH. 201 him as security for the client's carrying out his obliga- tions (q). So where a broker had advanced money to a company Re London on bearer securities, and the company paid off the "corporation. loan, but left the securities in the broker's hands, it was held that the broker could exercise his lien on those securities, in order to enforce payment of an amount, which subsequently became due on the company's current account, and, the company having gone into liquidation, could hold them against the liquidator (r). The fact that the securities are the property of persons, other than the client, does not prevent the general lien for all the client's indebtedness attaching; provided the broker did not know that the securities were not the client's, or was not put upon inquiry by the circum- stances of the case (s) . Apart from custom, a lien does not give any power of sale, but only entitles the holder of the security to keep it until paid (t). It has never yet been decided by the Courts whether there is a custom on the Stock Exchange that a broker's lien gives a right of sale on default being made. If there is no such custom, a broker who sells securities, subject to a lien, is guilty of a conversion, for which he would have to pay damages equal to the value of the securities. Moreover, having sold the securities the broker loses his lien altogether. Where the securities sold were the property of the client himself, the broker, if sued for conversion, could counterclaim for anything due to him ; but if, though deposited by the client, they in fact belonged to another, the broker would have to pay the damages in full (u~). (q} Jones v. Peppercorne, 1 (t) Fisher, on Mortgages Johns. 430 ; 28 L. J. Ch. 158. (4th ed.), p. 454 ; Thames Iron- (r) In re London and Globe ivorks Co. v. Patent Derrick Co., Financial Corporation, Ltd., 1 J. & H. 93; Clark v. Gilbert, [1902] 2 Ch. 416. 2 Bing. N. 0. 343. () Jonts v. Peppercorne, ubi (u] Mulliner v. Florence, 3 sup. Q. B. D. 484. 202 THE STOCK EXCHANGE AND THE PUBLIC. Breach of warranty of authority by broker. Measure of BS. If a broker, who has a lien, has also a claim against his client on which he can make the client bankrupt, one way in which he could make his lien effective would be by making the client bankrupt and then proving as a secured creditor, and calling upon the trustee in bank- ruptcy either to redeem, or to give up all interest in, the securities (x). When a broker represents that he has the authority of a particular principal to act on his behalf, and thereby induces another to enter into a contract, or otherwise to act on the faith of the representation, he is liable in damages for breach of warranty of authority, if, in fact, he has not that authority (y). In such cases the damages are measured by the amount necessary to place the other party in the same pecuniary position, as he would have occupied if the agent had, in fact, possessed the authority which he professed to have. Thus, where a broker put forward, though innocently, a forged power of attorney, by which the Bank of England was induced to allow him to transfer stock in its books, and the Bank had to replace the true owners of the stock on the books, the broker was held liable for the value of the stock (z), and the costs properly incurred by the Bank in the proceedings taken against it by the true owner (a) . Where a broker has professed to contract on behalf of an alleged principal, without having authority to do so, the loss sustained by the, other party is measured by what he has actually lost by not having the particular (x) Bankruptcy Act, 1883, 2nd Schedule, 12. (y} Collen v. Wright, 8 E. & B. 647; 27 L. J. Q. B. 215. (z) Starkey v. Bank of Eng- land, [1903] A. C. 114; 8. C., sub nom. Oliver v. Bank of England, [1901] 1 Ch. 652; [1902] 1 Ch. 610. (a) S. C., per Kekewich, J., [1901] 1 Ch. 652; not ques- tioned on this point on appeal. BREACH. 203 contract, which would have been made by the alleged principal, if the broker had had the authority which he professed to have, or, in other words, what the other party would have gained by the contract which the broker warranted should be made (b) . Therefore, in as- sessing the damages, the solvency of the alleged principal must be taken into consideration ; for if the person with whom the contract would have been made, if the agent had had authority, was an insolvent person, who could not have carried it out, the other party has suffered no damage by the loss of it (c) . Thus, where a broker, having authority from a solvent client to apply for shares in one company, by mistake applied on that client's behalf for shares in another company, and, the latter company having gone into liquidation, the client had his name removed from its register, it was held that the broker must pay to the liquidator the face value of the shares, as this was the amount the company had lost by not being able to retain the client as a shareholder (d). Probably, if the shares in this case had been of value, such value would have been deducted from the face value in fixing the damages. If the client had been insolvent, the company would have suffered no damage through the broker's breach of warranty. When, relying on the agent having his principal's Costs in- authority, the other party has brought an action against reliance^u the principal, or has defended proceedings brought t* 16 authority, against him, in which he fails by reason of the absence of authority, he is also entitled, by way of damages against the agent, to the costs, as between solicitor and (6) Be National Coffee Palace L. E. 6 Q. B. 279 ; Weeks v. Co., Ex p. Panmure, 24 Oh. D. Propert, 8 0. P. 427; see Re 361, per Esher, M. R. ; followed National Coffee Palace Co., Ex p. in Meek v. Wendt, 21 Q. B. D. Panmure, ubi sup. 126. (d) He National Co/ee Palace (c) Richardsonv. Williamson, Co., Ex p. Panmure, ubi sup. 204 THE STOCK EXCHANGE AND THE PUBLIC. client, that he has himself incurred, and the costs that he has to pay the other party, provided that he has acted reasonably in incurring these costs (e). When the agent has persisted in the statement that he had authority, or where there is a doubtful question to be decided, such costs are reasonably incurred ; but when, during the course of the proceedings, it becomes clear that the agent had in fact no authority, and there is no other ground on which the other party's contention can reasonably be resisted, any further costs incurred cannot be included in the damages (/). Breach of betweenbuyer and seller. Specific per- formance. Not granted of contract for stock. Cuddee v. Mutter. SUB-SECT, (ii). BREACH OF THE CONTRACT BETWEEN BUYER AND SELLER. As between buyer and seller, whether members of the Stock Exchange or not, failure to deliver, or to take delivery and pay, constitutes a breach which gives a right of action for damages for breach of contract, and in some cases, an alternative right to enforce specific performance. (a) Specific Performance. Specific performance is an equitable remedy, and, in order to found the jurisdiction of Courts of Equity to decree specific performance, it is necessary to show, either that there is no available remedy at Law, or that an award of damages at Law will not give a party the compensation to which he is entitled (g) . Specific per- formance will, therefore, not, as a general rule, be granted of a contract for the transfer of stock in the public (e) Gotten v. Wright, 8 E. & B. 647; 27 L. J. Q. B. 215; Randall v. Triman, 18 C. B. 786 ; 25 L. J. 0. P. 307; Hughes v. Graeme, 33 L. J. Q. B. 335 ; Oliver v. Bank of England, ubi sup. (/) Godwin v. Francis, 5 C. P. 295. ( Evans V. Wood, 5 Eq. 9 ; Paine Mam (NQ _ 2) 4 Ch> 200i T. Hutchinson, 3 Ch. 388. () Coles v. Bristowe, 4 Ch. (P) Shaw v - ^'stter, 5 De G. 3 ; Cruise v. Paine, 6 Eq. 641 ; 4 M - & G - 596 Ch.441; Chapman v. Shepherd, (q) Paine v. Hutchimon, 3 2G.~P.228;Biedermanv. Stone, Ch. 388; Loring v. Davis, 32 2 C. P. 504 ; Neihon v. James, Ch. D. 625. BEEACH. 207 (b) Damages. The more usual course, on the breach of a contract to Damages, accept or deliver shares, is to sue for damages in an action at Law. Where a purchaser fails to accept, or a seller fails to Measure of. deliver, securities, the measure of damages is the dif- ference between the contract price and the value of the securities (r) at the proper time for performance (s) . The seller is under no obligation, on his contract being broken, to sell elsewhere ; and, similarly, the buyer is under no obligation to buy elsewhere ; and the price realised on a resale, or paid on a repurchase, is not material, except so far as it may be evidence of the market price or value (t). It has been laid down as law that, as the right of action accrues on failure to deliver at the proper time, the damages are the difference between the contract price and the price at that time, and that no damages can be obtained for any subsequent rise in price ; for the plaintiff has no right to lie by until the concern becomes profitable () . It was, however, pointed out in a subsequent case (x) that the person whose contract has been broken is entitled to a " reasonable time to turn round," in order to make other arrangements. In view of this decision, the law, as laid down in the cases re- ferred to above, must be qualified, and should now be stated to be that, where securities are not delivered, or are not taken and paid for, at the proper time for per- (r] If there is a market price, Ex. 319; Roper v. Johnson, 8 that fixes the value, see ante, C. P. 167 ; 42 L. J. 0. P. 65 ; p. 188. Pott v. Flather, 16 L. J. Q. B. (a) Boorman v. Nash, 9 B. & 366. C. 145 ; Harrow v. Arnaud, 8 (u) Tempest v. Kilner, 3 C. Q. B. 595 ; Philpott v. Evans, B. 249. 5 M. & W. 475. (x) Samuel v. Howe, 8 T. L. (<) Brown v. Mutter, L. K. 7 E. 488. 208 THE STOCK EXCHANGE AND THE PUBLIC. formanoe of the contract, the measure of damages for the breach of contract is the difference between the contract price and the price of the securities within such a time after the breach, as the Court may hold to be reasonable to allow for the making of a new contract to replace the one broken (y). If, for instance, a contract was broken by a refusal to accept securities, and immediately after the refusal a heavy fall occurred in the price of such securities, the damages would, it is submitted, apart from any un- reasonable action on the part of the seller, include the loss occasioned by this fall. Time for The proper time for performance is usually fixed by the contract, either expressly or by reference to the rules and usages of the Stock Exchange. If it is not so fixed, the law implies into the contract a term that the time for performance shall be that which, taking all the circumstances into consideration, shall be found to be the reasonable one ; and the date, with reference to which the value of the securities is fixed for the purpose of assessing the damages, is the date so found (z). If one party to the contract chooses, by notice, to fix a day on which he will require the other to cany out the contract, and the other fails to do so on that day, the damages cannot be more than the difference between the contract price and the price on the day so fixed (a). In the case of goods, where no time is fixed for delivery or acceptance, the measure of damages is, by statute, primd facie the difference between the contract price and the price on the day of the refusal to accept (y} This was the measure of (z) Postlethwaite y. Freeland, damages adopted in Stewart v. 5 A. 0. 599. Cauty, 8 M. & W. 160, a case (a) Shaw v. Holland, 15 M. tried in 1841. & W. 136. BREACH. 209 or deliver (V) ; and, although the statute does not apply to securities, it may well be that where no time is fixed the same rule would apply. If the time for performance has heen postponed by consent, the date for fixing the damages is shifted to the new date agreed upon for the performance (c) . SUB-SECT, (iii). DETENTION OF SECURITIES. When securities are wrongfully detained, as, for Wrongful instance, when they are deposited on mortgage or securities. pledge and are not returned at the proper time, the person entitled to them can, by bringing an action, obtain an order for the return of the securities, or their value at the date of the trial, together with damages for their detention (d). If the securities stand as high at the date of the trial Measure of as at any time since the date when they were first wrongfully detained, there will be no damages recover- able for the detention ; for the plaintiff, in the action, gets the securities, or their value at that time, and so suffers no loss by the detention. If the securities at the date of trial are lower than the highest price at which they have stood since the first wrongful detention, the damages for the detention will be awarded on the following principles. The plaintiff is to be put as far as possible in the same position as if he had the securities at the proper time. The question will then be one of fact, namely, what he would have done with them, if he had had them. He is not, as of course, (6) Sale of Goods Act, 1893, East, 211 ; Owen v. South, 14 ss. 50, 51. C. B. 327; 23 L. J. 0. P. 105; (c) Ogle v. Earl Vane, L. E. Harrison v. Harrison, 1 C. & 3 Q. B. 272. P. 412 ; Downea v. Back, \ (d) Shepherd v. Johnson, 2 Stark. 318 ; 18 E. E. 772. s. P 210 THE STOCK EXCHANGE AND THE PUBLIC. to have his damages measured by the highest price between the first wrongful detention and the trial (e). If he could show that he would have sold them at any given time, his damages would be the difference between the price at that time and the price on the day of trial (e). If, on the other hand, the defendant could show that the plaintiff would simply have held the securities until the trial, the damages for detention would be nominal. The damages are for the jury, and they may take into consideration the difference between the price at the proper date for delivery and the price at the actual date of delivery (/). So where the price had risen and fallen again, and there was evidence of a desire on the plaintiff's part to sell, the Court of Appeal, exercising the functions of a jury, awarded, as damages, an amount based on the average price between the proper date for delivery and the trial (g) . When the securities have been returned, but after the due date, the only question to be decided will be the damages for the detention. They will be assessed on the above principles. When securities are, by agreement, to be replaced on a day certain, and the time for replacing is by consent extended, the damages for not replacing are calculated with reference to the price on the extended, and not on the original, date (ti). When a broker obtained and kept for himself, under circumstances amounting to fraud, certain securities which belonged to his client as " rights " attached to the client's shares, it was held that the client was entitled, (e) Williams v. Peel River 0. B. 318. Co., 55 L. T. 689, and Me- (g) Williams v. Peel River Arthur v. Seaforth, 2 Taunt. Co., ubi sup. 267 - (h) Blyth v. Carpenter, 2 Eq. (/) Williams v. Archer, 5 501 ; 35 L. J. Oh. 823. DEFAULT. 211 by way of damages, to the highest price at which the shares could have been sold meanwhile ('). SECT. VIL-DEFAULT. Upon the default of a member, the position of a non- member who has dealings open with or through the defaulter has by recent judicial decisions been clearly denned. It may now be stated to be a general principle that the client's bargains are not affected by a default. SUB-SECT, (i). DEFAULT OF BROKER. The view formerly prevalent, and acted on by the Old view. Courts, was that, on the default of his broker, a client had by custom three courses open to him : (a) to employ another broker, and have his bargain transferred from the defaulter to him ; (b) to complete his bargain with the jobber; and (c) to adopt the closing at hammer price as a closing of his bargain (). It has, however, Now, client's now been established that the client has no option to ^affected. adopt the closing at hammer price, but that his bargain, Levitt \. with all its incidents, remains open with the jobber with Hamblet ~ whom it was made, and in due course must be completed with him, either by the client personally, or through another broker (b}. When it was decided that the client's bargain was Rule 179. not affected by the closing at hammer price, the words of Kule 179 (c) were, "All persons having accounts open with the defaulter shall close their transactions by (i) Stewart v. Lupton, 22 Beckhusen v. Hamblet, [1900] 2 W. E. 855. Q. B. 18. (a) Duncan v. Hill, L. E. 8 (b) Levitt v. Hamllct, [1901] Ex. 242, n. ; Hartas v. Ribbons, 2 K. B. 53 ; Scott v. Ernest, 16 22 Q. B. D. 254 ; Anderson v. T. L. E. 498. Beard, [1901] 2 Q. B. 260; (r) Then Rule 177. 212 THE STOCK EXCHANGE AND THE PUBLIC. complete. buying of and selling to him " at hammer price. The position has now been made still clearer by an alteration of the rule, substituting " members " for " persons." Client must There is nothing to prevent the client and jobber can compe? n agreeing together to treat the bargains as closed at the jobber to hammer price (d) ; but in the absence of such agree- ment the client must complete the bargain with the jobber, and is entitled to have it completed by him. If the client is a seller, he must in due course tender the shares, and, if a buyer, is entitled to have them tendered, and must then take delivery and pay. The client is not entitled to insist on the jobber agreeing to the substitution of a third person as the party liable to him upon the contract in place of the client, or, as it is called, " making-down " the bargain. So where a client both bought and sold the same securities in the same account of and to different jobbers through a broker, who during that account defaulted, it was held that he could not compel the jobber, to whom he had sold, to " make- down" with the jobber, of whom he had bought, and was not, by passing the name of his seller to his buyer, relieved from the necessity of tendering the shares (e). The bargain, as between jobber and broker, is closed at hammer price; and the same bargain, as between jobber and client, remains open. The jobber, if the hammer price shows a profit to him, proves against the defaulter's estate ; but, even if he is paid in full, his rights against the client are not thereby affected (/). If he completes with the client, or obtains damages against him for non-completion, what he receives will, under certain circumstances, be handed to the Official Assignee, as representing the broker's estate ; but this Making- down. Currie v. Booth. (d] Levitt v. Hamblet, [1901] 2 K. B. at p. 66, per Collins, L. J. (e) Currie v. Booth, 7 Com. Gas. 77. (/) Stoneham v. Wynam, 6 Com. Cas. 174. DEFAULT. 213 is a matter of internal management of the Stock Exchange, with which the client has no concern (g). As has been pointed out elsewhere (/*), a broker is not Broker's entitled to be indemnified by his client in respect of ^J^J' differences arising upon the closing of the broker's Sill. bargains under the hammer, unless the broker's default is caused by the client (') ; but where the client, having Hartas v. been given the option, has elected to treat his bargain as Rlbbons ' closed by the hammer, the broker is entitled to an indemnity (K). When the broker's default is attributable solely to Lacey v. mil, the particular client failing to meet his obligations to the broker, it has been held that the broker has a right to be indemnified if he was, at the date of the closing of the bargain as between himself and the jobber under the hammer, entitled to close the client's account ; for the sale or purchase under the hammer is in such a case treated as authorised by the client (/), and it is con- sidered immaterial whether the account is closed by the operation of the rules of the Stock Exchange, or by the broker (m). In view of the decisions that the closing under the hammer is not a closing of the client's bargain, it would now, perhaps, be simpler to base these decisions on the ground that the broker is entitled to be indemnified in respect of a loss, which has arisen solely through the client's failure to do his part in respect of bargains, entered into on the Stock Exchange on his behalf, which necessarily involved a personal liability on the part of the broker. The mere (g) Ante, p. 90. B. D. 254. (h) Ante, p. 197. (1) Lacey v. Hill, Crowley's (i) Duncan v. Hill, L. E. 8 Claim, ubi sup. ; Ellis v. Pond, Ex. 242; Lacey v. Hill, Crow- [1898] 1 Q. B. at p. 461, per ley's Claim, 18 Eq. 182 ; and Collins, L. J. see Allen v. Wingrove, 19 T. L. (m) Thacker v. Hardy, 4 Q. E. 261. B. D. 685, at p. 689, per (Jfe) Hartas v. Ribbons, 22 Q. Lindley, J. 214 THE STOCK EXCHANGE AND THE PUBLIC. fact that the client owes money to the broker is not sufficient to entitle the broker to an indemnity in respect of the hammer price losses ; nor, apparently, is it sufficient that the client is one of several who are in default to the broker, and whose joint failure to meet their obligations has caused the broker's default (M). SUB-SECT, (ii). DEFAULT OF JOBBER. On jobber's Where a jobber, with whom a client has a bargain P en through a broker, is declared a defaulter, the against bargain, as between the broker and the jobber, is thereby closed ; but the client's bargain with the jobber remains open. The client, apart from some special agreement, has no remedy against the broker, as he is not a del credere agent (0) . The client could no doubt agree with his broker and the jobber to treat the bargain as closed by the hammer, and in such case the broker would account to the client for anything he might receive in respect of the client's bargain from the Official Assignee as representing the Contract with jobber's estate. Apart from such agreement, the client, except, perhaps, where he treats the default as an anti- cipatory breach (p), must in due course complete his bargain by tendering the securities, if he is a seller, and paying for them when tendered to him, if he is a buyer. If the jobber will not deliver the securities, or accept and pay for them when tendered, the client would have his usual remedies for breach of contract, and in the same way will himself be liable to an action by the jobber, notwithstanding the default, should he fail to But, possibly, accept and pay, or to deliver, in due course. The client treat^obbber's could j possibly, on receiving notice of the jobber's (n) Duncan v. Hill, L. E. 8 Cas. p. 48 ; and see ante, Ex. 242. p. 106. (o) Gill v. Shepherd, 8 Com. (/>) Ante, p. 187. DEFAULT. 215 default, treat this as an intimation that the jobber would default as an not complete, and either accept this intimation as a final breach. ** breach, or refuse to so accept it, and hold the jobber to his bargain (q] . There are several points of some difficulty which Position on might arise on the default of a jobber, but which have jobber not yet not yet been the subject of judicial decision. For instance, it seems doubtful whether a broker is entitled to be indemnified by his client in respect of hammer price differences arising on the jobber's default. On the one hand, it has been laid down that the client is not affected by the hammer, and on the other, the loss incurred by the broker is due to his having entered into a bargain for his client subject to rules which involve the risk of this loss. So, too, it is not clear whether a client is entitled, as of right, to recover from the broker what he receives from the jobber's estate in respect of the bargain made for the client ; for though the hammer does not affect the client's bargain, the broker has received this sum in the course of his agency. In fact, the principles laid down by the recent decisions as to the rights of non-members on a default seem to give rise to rather an anomalous position in the case of the default of a jobber, and it must be admitted that the position in that case is not clearly defined. SUB-SECT, (iii). A DEFAULTER'S ESTATE AND THE PUBLIC. On the default of a member, it is the practice for the Official Assignee to collect all the defaulter's Stock Exchange assets, including the balance at his bank, and to distribute them among the creditors on Stock Exchange transactions (r). Where a defaulter has sub- 9 ffi ? ml Assignee and (g) As in other cases of anticipatory breach, as to which, see ante, pp. 187190, 194199. (r) Eule 163. 21G THE STOCK EXCHANGE AND THE PUBLIC. trustee in bankruptcy. Is default an act of bank- ruptcy ? Tomkins v. Saffery. sequently been made a bankrupt, questions have arisen as to what assets the Official Assignee can retain for the Stock Exchange creditors as against the trustee in bank- ruptcy, who represents all creditors who prove in the bankruptcy (s) . Under the law of bankruptcy, all a bankrupt's assets at the commencement of the bankruptcy vest in the trustee in bankruptcy, and the title of the trustee relates back to the earliest act of bankruptcy committed by the bankrupt, provided it was committed within three months of the presentation of the petition on which he is adjudicated bankrupt (t). Whether a default, followed by the vesting of assets in the Official Assignee, is itself an act of bankruptcy is not quite clearly established. The acts of bankruptcy which a default might be considered to involve are : (1) If a debtor makes a fraudulent conveyance, gift, delivery or transfer of his property or any part thereof (M) . Here " fraudulent " conveyance does not necessarily mean morally fraudulent, but applies also to what is known as a fraud on the law of bankruptcy, and to the conveyance of the whole of a man's property in consideration of past debts, which must necessarily have the effect of hindering and delaying creditors. (2) If a debtor makes any conveyance or transfer of his property or part thereof which would be void as a fraudulent pre- ference if he were adjudged bankrupt (x) . (3) If a debtor has given notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts (y}> In Tomkins v. Saffery (s), the facts were that a de- faulter had given notice to the officials of the Stock (s) The Stock Exchange creditors can prove for the hammer price differences: Ex p. Ward (No. 2), 22 Ch. D. 132. (t} Bankruptcy Act, 1883 (46 & 47 Viet. c. 52), s. 43. () Ib. s. 4 (b). (*) II. s. 4 (c). (y) Ib. s. 4 (h). () 3 A. C. 213. DEFAULT. 217 Exchange of bis inability to meet his engagements, and had at his own request been declared a defaulter, and bad then called together his Stock Exchange creditors, and told them that be could pay them 13s. 4^. in the <. He thereupon handed over to the Official Assignee the balance at his bank, and this, with what other funds came to his hands, the Official Assignee distributed among the Stock Exchange creditors. Within three months a bank- ruptcy petition was presented, and on it the defaulter was subsequently adjudicated bankrupt. In the Court of Appeal (a) the handing of the assets to the Official Assignee was held to be a cessio bonorum, or a transfer of all the bankrupt's assets, and consequently a fraud on the law of bankruptcy, and also to be a fraudulent preference. This decision was approved by the House of Lords on practically the same grounds. It was held that the trustee's title related back, and the Official Assignee was directed to pay to the trustee an amount equal to the bank balance which had come to his hands. In Richardson v. Stormont Todd (b), the defaulter was Richardson \. , , f ,. i , -vr ,, . Stormont Todd. hammered for not meeting his engagements. Nothing appears in the report of the case as to whether it was at his own request or not. At the time of the hearing the default had not been followed by bankruptcy. The question arose whether all the defaulter's assets vested in the Official Assignee, and it was held that they did. Collins, L. J., said : " As to whether these rules " (the Stock Exchange rules as to default) " operate as a cessio bonorum, or transfer of rights, Tomkins v. Saffery is not only an opinion, but a holding that they do, and that such transfer is an act of bankruptcy." On the other hand, on the hearing of a bankruptcy petition in March, 1900, in which a default, followed by (a) Ex p. Saffery, In re Cooke, 4 Ch. 555. (5) [1900] 1 K. B. 701. 213 THE STOCK EXCHANGE AND THE PUBLIC. the collection of assets, was the only act of bankruptcy alleged, Mr. Registrar Linklater took a different view of the decision in Tomkins v. Saffery, and dismissed the peti- tion, saying : " I will not be the first to hold that the mere fact that the Official Assignee of the Stock Ex- change takes steps to collect the debtor's property by virtue of the rules of the Stock Exchange is an act of bankruptcy on the part of the debtor as being something fraudulent on his part." Further, in the recent case of In re In re Mendelssohn (c), Yaughan Williams, L. J., after describing a default as a cessio bonorum, said : "I say nothing as to what may or may not be the effect of the relating back of the title of the trustee in the bank- ruptcy, in any case in which the petition is presented before the period of relation has expired, upon the dis- tribution of the debtor's assets which has already taken place upon the Stock Exchange." The trustee's title only relates back to the first act of bankruptcy within the three months, and the trustee can only receive pay- ments made with notice of an act of bankruptcy, and it would seem to follow that the question the learned Lord Justice wished to leave open was the question here under discussion, namely, whether a default is in itself an act of bankruptcy. It is possible that there may be a distinction to be drawn between different kinds of default. There would seem to be a substantial difference between the case of a member, who is unable to meet his engagements owing to his insolvency, and either has himself declared, or is declared at the instance of another member, and that of a member, possibly quite solvent, whom another member has declared for not meeting some obligation, which may even be disputed. On the other hand, every member is under a contract, contained in the rules, that if he is declared a defaulter his assets shall vest in the Official (c) [1903] 1 K. B. 216. DEFAULT. 219 Assignee, and be collected and distributed by him ; and it has been held that this vesting of the assets amounts to a cessio bonorum (d) ; and it seems difficult to contend that a cessio bonorum is not an act of bankruptcy. Differences arising by reason of the compulsory The artificial closing of bargains on a default form an artificial fund, 7 . In re Plumoly. and this fund can be retained by the Official Assignee as against the trustee in bankruptcy under all circum- stances (e). Differences, too, coming to the defaulter, InreWoodd. which arise in the course of the completion of bargains by passing of tickets (/) form a similar fund, which can likewise be retained (g) . If bankruptcy supervenes within three months of the Assets paid default, and assuming that a default is .an act of bank- Q^^ the ruptcy, the trustee in bankruptcy is entitled to, and can Assignee. recover from the Official Assignee, all other assets coming to his hands as representing the defaulter, such as the defaulter's bank balance (A), and sums due by members or non-members for ordinary differences (e) . If a default is not in itself an act of bankruptcy, the Official Assignee could, it is submitted, be made to pay only such assets as have come to his hands with notice of some circumstance which did constitute an act of bankruptcy, or have remained in his hands after notice of an act of bankruptcy. If the Official Assignee has received and paid away such assets without notice of an act of bankruptcy, it would seem that he could not be made to pay anything to the trustee, even though the dis- (d) Tomkins v. Saffery, or making- up price, as the case Richardson v. Stormont Todd, may be : see ante, p. 70. In re Mendelssohn, ubi sup. (g) In re Woodd, Ex p. King, (e) In re Plumbly, Ex p. 82 L. T. 504 ; W. N. (1900) 84. Grant, 13 Ch. D. 667. (/t) Tomkins v. Saffery, ubi (/) On account day mem- sup. bers receive or pay the differ- (i] In re Woodd, ubi sup. ; ence between the price of their King v. Hutton, [1899] 2 Q. B. bargains and the ticket price 504. 220 THE STOCK EXCHANGE AND THE PUBLIC. Non- mem- bers, when allowed to participate in defaulter's estate. Default a cessio bonorum. Richardson v. Stormont Todd. tribution lias been to members for hammer price differ- ences. Of course, if the default is an act of bankruptcy, everything the Official Assignee receives he receives with notice of an act of bankruptcy, and if bankruptcy ensues within three months he would be liable, as in Tomkins v. Saffery, for an amount equal to the value of the assets received. Against the fund in the hands of the Official Assignee non- members have no rights, but if they have a claim against the defaulter's estate, and that claim is admitted by the creditors, or, in case of dis- pute, by the Committtee, they will be allowed to participate, and can be represented by a member at the meeting of creditors (K). No claim not arising out of Stock Exchange transactions is in any event admitted (/). The vesting of the Stock Exchange assets in the Official Assignee being a cessio bonorum, the Official Assignee can sue in his own name to recover assets due to the estate of a defaulter (m). "Where there is no bankruptcy, the assets of a defaulter vest in the Official Assignee. The Official Assignee has a paramount right to everything recovered by him in respect of debts due to the defaulter, whether he has recovered in his own name, or in the name of the defaulter. The amount therefore recovered by the Official Assignee in an action, brought by him in the defaulter's name, cannot be attached by a judgment creditor of the defaulter (). So, too, if the Official Assignee sells assets which come to his hands as assignee, the purchaser from him must pay the purchase price in full, and cannot set off any (K) Eule 170. (1) Eule 163. (m) Richardson v. Stormont Todd, [1900] 1 K. B. 701 ; and see also Tomkins v. Saffery, ubi sup. ; Lomas v. Graves, [1904] 2 K. B. 557. (n] Lomas v. Graves, ubi sup. DEFAULT. 221 claim which he may have against the defaulter (o) . If the purchaser is in a position to prove against the de- faulter's estate in respect of such claim, he may do so, but if not, he must pursue his ordinary remedies. It has been held that when the Official Assignee sues in the name of a defaulter, the defaulter need not give security for costs, as the defaulter is not a nominal plaintiff (p). (o) Richardson v. Stormont Todd, ubi sup. ( p) Hinde v. Haskew, 1 T. L. E. 94 ; E. 8. C., Ord. LXV. r. 26. 222 GAMING AND WAGERING LEEMAN ? S ACT. CHAPTER V. GAMING AND WAGERING LEEMAN 5 S ACT. SECT. I. GAMING AND WAGEBING. THE Common Law has no provision against wagers ; and therefore, before the passing of the statutes referred to below, a bet on the price of stocks or shares could be enforced in the Courts. Barnard's J n 1753 was passed Sir John Barnard's Act (a), directed against the "infamous practice of stock- jobbing." This statute rendered all contracts for the sale of public or joint stock or other public securities where the seller was not in actual possession of, or entitled to, the securities, and all contracts on which a premium was paid for liberty to put upon, deliver, receive, accept, or refuse any public or joint stock or public securities whatsoever, and all wagers or contracts in the nature of putts and refusals relating to the present or future price of securities null and void, and all monies paid thereunder recoverable with double costs of suit. The operation of this statute was soon confined by decisions of the Courts to dealings in English funds (6), and to cases where no genuine intention to deliver could be proved (c) ; methods, too, of evading its pro- visions were soon discovered, particularly by rather complicated arrangements of loans of securities, with an agreement to replace them at a future date, secured by (a) 7 Geo. II. c. 8. ( c ) Mortimer v. McCallan, G W ( n To? ~ P ? ter> 2 Blng ' M. & W. 58 ; 9 M. & W. 636 ; N. C. 722 ; Henderson v. Bisc, 3 Stark. 158. 9 L. J. Ex. 73. GAMING AND WAGERING. 223 a bond (d ) ; with the result that before very long it ceased to be, to any great extent, effective (e) . It was finally repealed in 1860 (/). Repealed. In 1845 was passed the Granting Act ( to recover commission, or indemnity, in such case, by enacting that any promise, express or implied, to pay any person any sum paid by him in respect of a contract made null and void by the Gaming Act of 1845, or to pay any sum as commission or reward in respect of such contract, shall be null and void, and no action shall be brought to recover such sum. (rf) See Sandars v. Kentish, (i) In Thacker v. Hardy, 4 8 T. E. 162. Q. B. D. 685, Brett, L. J., at (e) It was, however, given P- 694 > Ba j d * hat in 8U< * case effect to in 1857 : Nicholson v. ? ere vould be no *&* to in ~ Gooch, 5 E. & B. 999 ; 25 L. J. demmi ? ' but tlus was before Q -g 13> , Read v. Anderson (in which case Brett, L. J., dissented); (/) 23 Viet. c. 28. gee algo Cooper y 2feiJ t W. N. for) 8 & 9 Viet. c. 109. (i 878 ) j une lst; 27 w. E. (A) Bead v. Anderson, 13 Q. 159, n. B. D. 779. (&) 55 Viet. c. 9. 224 GAMING AND WAGERING LEEMAN's ACT. Distinction between speculation and gamiug. forget v. Ostigny. Thaeker v. Hardy. In considering the application of these statutes to dealings in stocks and shares, it is well to bear in mind the distinction between speculation and gaming. A very large number of dealings on the Stock Exchange are of a speculative nature ; persons buy and sell shares for a future date, with the hope of making a profit by the rise or fall in price, and often without the least intention, or even ability, either to pay for the securities, or to deliver them, but meaning to resell or repurchase before the time for delivery arrives. This method of doing business is by no means confined to stocks and shares, but is of every-day occurrence in almost all commodities ; and, as far as the distinction between speculation and gaming is concerned, it makes but little difference whether the commodities are actually paid for, and held with a view of selling again at a profit, or whether the matter is arranged by a resale before the time for delivery. Such dealings are perfectly legitimate (I). Gaming and wagering contracts, on the other hand, are not real dealings at all ; they may take the form of purchases and sales, but they are, in fact, mere bets on the market price of commodities at a future date. For a contract to be a gaming and wagering contract, there must not only be no intention on the part of either party to deliver, or take delivery of the commodities, but also no obligation on either to do so ; there must be an agreement or understanding that all the buyer has to do is to receive from, or pay to, the seller the difference between the price of the bargain and the price at some future date. Further, the essence of gaming and wagering is that one party is to win and the other to lose upon a future event, which at the time of the contract is of an uncertain nature (m). (I) Forget v. Ostigny, [1895] A. C. 318, per Lord Her- schell. (m) Thaeker v. Hardy, 4 Q. B. D. 685, per Cotton, L. J., at p. 695. GAMING AND WAGERING. 225 Applying these principles to dealings in stocks and Gaming shares, it may be stated that, although it is possible to impossible speculate or gamble on the Stock Exchange, it is almost n s _t ck impossible to make a contract there, which is void under these statutes. On the other hand, it will be seen that wagering contracts on the price of stocks and shares are frequently entered into off the Stock Exchange. Transactions on the Stock Exchange are governed by the rules, and by the rules all bargains as between members are for completion in the manner already described, and necessarily involve an obligation upon one to take delivery, or pass the name of some one who will do so, and upon the other to make delivery himself, or provide another who will. This obligation attaches to the bargain as soon as made, and the parties can only get rid of it by subsequently agreeing to enter into a converse bargain with each other. It would, no doubt, be possible for members to agree to bet on prices ; and, if this were done, a member could in a Court of Law rely on the Statute as a defence. Such a case has never arisen, though it has been suggested that such defence might prevail (11) . As far as the public are concerned, they do practically all their dealings through a broker, and seldom come into contact with the jobber. As between a client and a broker, who on his instructions has made bargains with a jobber, the Acts can have no application apart from some very special arrangement ; for the broker is, by the rules, under liability to the jobber to deliver or take delivery, and is entitled to an indemnity and remuneration from his client. The client's loss is not the broker's gain, for, whether the securities rise or fall, he gets only his remuneration. The position is well illus- trated by the case of Thacker v. Hardy (0), an action by a Thackcr v. Hardy, (n) InreMoryan,Exp.Marn- (o) 4 Q,. B. D. 685, followed ham, 30 L. J. Bk. 1 ; 2 De G. in In re Rogers, 15 Ch, D. F. & J. 634. 207. 8. Q 226 GAMING AND WAGERING LEEMAN 5 S ACT. broker against his client for indemnity and commission, when the following facts were found: that, to the knowledge of the plaintiff, the defendant was a specu- lator, and never expected or intended to accept delivery or to deliver ; that the defendant knew that he incurred a risk of having to accept or deliver, if the plaintiff could not arrange matters so as to render nothing but differ- ences payable to or by him ; and that the plaintiff knew that, if he could not so arrange, the defendant would be unable to pay or deliver. It was nevertheless held that a plea of gaming and wagering was no defence. Apart from special agreement, a broker is not bound to sell for a client what he has bought, or to repurchase what he has sold ; but even if he agreed to do so, the contract would not be void ; for there would really be two enforceable bargains, which the practice of the Stock Exchange allows to be set off against each other (p). This would be very apparent, if the purchase was from one jobber and the sale to another, and one of them was declared a defaulter ; for then there could be no setting off, and the client would have to complete one bargain, irrespective of whether he could enforce his rights as to the other. Further, even in such case the client's loss is not the broker's gain. The judgments in Thacker v. Hardy were approved by the Privy Council in Forget v. Ostigny (5-), and must now be accepted as an authoritative exposition of the law. If a bargain were made by a non-member with a jobber that under no circumstances should either party be compellable to take or deliver, but that the matter should be settled by the payment of differences only, the bargain would be null and void (r) ; and if a broker (p) See Thacker v. Hardy, (q) [1895] A. 0. 318. ubi sup. at pp. 691, 692, per (r) Grizewood v. Plane, 1 1 0. Bramwell, L. J. B. 526, 538 ; 21 L. J. C. P. 46. GAMING AND WAGERING. 227 made such a bargain for a client, he could obtain neither indemnity nor remuneration, as the bargain would be void under the Gaming Act of 1845, and the agreement to indemnify or remunerate the broker would be void under the Gaming Act of 1892 (s). Bargains of this nature have been called " time Time bargains." A " time bargain," in its true sense, is a bargain of purchase or sale for delivery at a future date, with a concurrent agreement that, when the time for delivery arrives, the original bargain shall be settled by a resale or repurchase at the market price, so that, in effect, all that can pass between the parties is the differ- ence between the present and future market prices. It has been stated in evidence that this kind of contract is unknown on the Stock Exchange (#). A jury, however, has twice found that such contract has been made (u) ; but in one case a new trial was ordered, and the finding in the other has been adversely commented upon by the Court of Appeal (x) . Option dealings, made in the ordinary course on the Options. Stock Exchange, are not gaming and wagering con- tracts ; but if it were found that there was a tacit under- standing that the bargains should not be enforced, but that differences only should be payable, they would come within the Act, and consequently would be void(y). It may, then, be stated as a general rule that, apart from very unusual circumstances, a contract made on the Stock Exchange, or upon any provincial Stock Exchange with similar rules and usages, and whether () And probably also void Cooper v. Neil, uli sup. apart from this Act: Cooper v. , } ThacJ . er y /7 , uU Neil, W. N. (1878) June 1st ; at 60 ^^ L 27 W. E. 159, n. (t) Thacker v. Hardy, 4 Q. (y] Buitenlandische RuHk- B. D. 685. vereeniging v. Hildesheim, 19 (u} Orizewood v. Blane, T. L. E. 640. Q2 228 GAMING AND WAGERING LEEMA^'fi ACT. Dealings between principals off the Stock Exchange are often by way of gaming and wager- ing. Form of contract not conclusive. between principals direct or through, an agent, is not made by way of gaming and wagering. The mere fact that a contract purports to be subject to such rules is not conclusive, and will not exclude evidence that there was in fact a tacit understanding that, in spite of the form of the contract, there should be no obligation on either party to take or deliver, but that in any event differences only should be payable. If such an under- standing were established by the evidence, the contract would be null and void. The cases in which the Courts have held the transac- tions to be gaming and wagering, in spite of the form of the contracts, are almost entirely cases between members of the public and dealers in stocks and shares who are not members of any Stock Exchange, the dealings being between them as principals (z). Such dealers are often spoken of as " outside " stockbrokers, a term somewhat misleading, as generally such dealers are not brokers at all, and there are many brokers out- side the Stock Exchange who carry- on a perfectly legitimate business. Various attempts have been made to frame a contract, which would enable such dealers to make what are, in fact, bets on the price of securities, and yet be able to sue in a Court of Law for their winnings. Eor some time this was successfully accomplished by contracts purporting to be for ordinary sales and purchases and to bind both parties to deliver, or take delivery, if called (z) The business of such dealers has also been called the Backet shops, keeping of a "bucket shop." The term in its strict sense applies only to what is known as " betting on the tape," which consists of purchasing and selling securities at the price of the day, and a pay- ment or receipt of differences according to the price shown on the tape of a telegraph machine at some future time ; it has, however, been extended to any office kept for the pur- pose of betting on the price of securities. GAMING AND WAGERING. 229 upon to do so (a) ; but in Universal Stock Exchange v. Universal Strachan(b], Cave, J., put the following question to the jury : " Notwithstanding these ostensible terms of business, was there a secret understanding that the stock should never be called for or delivered, and that differences only should be dealt with ?" On the jury answering the question in the affirmative, the learned Judge held that the contracts were void ; and his direction was approved by the Court of Appeal and the House of Lords. The question, therefore, as framed by him must now be considered as expressing the true test in such cases. This test has been applied in several later cases, in Evidence of which the contracts have differed in detail, but have ^et under- standing. always purported to represent genuine transactions (c). Amongst the various elements which have been con- sidered to afford evidence of such secret understanding are the following : the financial position of the specu- lator in relation to the magnitude of the dealings (d ) ; the fact that no securities were at any time taken up (e) ; the fact that the contract contains a stipulation requiring something additional to be done if delivery is to be made a stipulation, for instance, that in that event (a) Universal Stock Exchange Stock Exchange (No. 1), [1895] v. Stevens, 66 L. T. 612; 40 2 Q. B. 329. W. E. 494; and the Scotch (c) See cases in/m . cases, Shawv. Caledonian Rail. Co., Court of Sessions Cases ( d ) In re Gieve > [1899] 1 Q. (4th ser.), xvii. 466; and B - 794 ; Miles v - Lowenfeld, Lowenfeld v. Howat, Court of Tne Times > Dec. 2 1st, 1900, and Sessions Cases (4th ser.), xix. Ma 7 8th, 1901 : In re Duncan, 128; and see Shaw v. Bayley, The Times, March 17th, 1903. The Times, Jan. 24th, 1893 (e] Inre Duncan, ubi sup. The (where the jury found, as a fact that some securities were fact, that the transaction was taken up is not conclusive not gaming). against the contract being a (b) [1896] A. C. 166; sub wager: Miles v. Lowenfeld, ubi nom. Strachan v. Universal sup. 230 GAMING AND WAGERING LEEMAN's ACT. Cover depo- sited in respect of gaming trans- actions. Not deposited to abide the event. | extra shall be paid on purchases or deducted from sales (/), or that a guarantee shall he given for the payment of purchase-money () ; and the fact that orders are regularly given, contemporaneously with the original orders for purchase or sale, for the undoing of the bargains at some limit of price (&). Such dealings as these are usually conducted on the cover system, which involves the deposit with the dealer of money or securities belonging to the speculator. Where such dealings are void as being by way of gaining and wagering, questions have arisen as to the rights to the cover deposited. By sect. 18 of the Graming Act of 1845 (&), no action can be maintained to recover any money or valuable thing deposited to abide the event of a wager. It has been argued, and once at least laid down, though it was not necessary for the decision of the case (I), that money or securities, deposited as cover in such trans- actions, are deposited to abide the event of a wager ; (/) In re Gieve, ubi sup., Lindley, L. J., held this to be conclusive, but Vaughan Wil- liams, L. J., thought other- wise ; and in PTiilp v. Bennett, 18 T. L. E. 128, where there was a very similar contract containing the clause as to the i, Bigham, J., held, on the facts before him, that the con- tract was not void. In an earlier case, Shaw v. Bayley, The Times, Jan. 24th, 1893, the Court of Appeal said the " i extra, if taken up," was no evidence of gaming. (.,erBaggallay. cision of the Scotch Courts on T T &6 J > ,, . . , L. J., at p. 396. this point was erroneous. . (o) Perry v. Barnett, 15 Q. (?) As to this, see ante, B. D. 388 (but not illegal, per P- U7. LEEMAN'S ACT. 237 tions have arisen as to what amounts to notice, which have been dealt with elsewhere (r). If a broker, instructed to sell or buy shares in a bank- ing company, makes a contract which, by reason of this statute, is unenforceable, he is guilty of negligence, and his client can maintain an action against him for any loss sustained (s) . If, after discovering the fact that the statute has not Waiver, been complied with, the client completes, or authorises his broker to complete, the bargain, he can no longer rely on the statute as a defence to any action brought against him in respect of the bargain (t). (r) Ante, p. 119. (*) Loring v. Davis, 32 Ch. (s) Neilson v. James, 9 Q. D. 625. B. D. 546. 238 MARKET-MAKING RIGGING CORNERS FRAUD. Rigging the market. It. T. De Berenger. CHAPTER VI. MARKET-MAKING RIGGING CORNERS FRAUD. THE inflation of the price of securities on the market by fraudulent means is known as " rigging the market." This has been done in various ways by persons wishing to induce others to buy in the belief that there is a demand for the securities. One method of carrying out such a " rig " is to instruct one broker to sell at any particular price, and another to buy at about the same price ; with the result that the first broker offers the shares in the market, and they are sold to jobbers, who resell to the other broker either direct or through other jobbers, and there thus appear to be genuine deal- ings in the shares, while, in truth, there is only a sale by one person to himself or to a confederate. There may be many varieties of this scheme, as, for instance, setting about false rumours or issuing false reports ; but, whatever form it takes, if persons are thereby induced to enter into contracts of purchase from the person rigging the market, the contracts are un- enforceable, or, if completed, an action will lie for deceit. If it could be shown that a person obtained money by such operations, he could, it is conceived, be indicted for obtaining money by false pretences. Where more than one person is engaged, and the object is to defraud the public, they can all be convicted of a criminal conspiracy. " To strike at the price of a vendible commodity in the market, to give it a fictitious price by means of false rumours, is a fraud levelled against all the public, for it is against all who may MARKET-MAKINGRIGGINGCORNERS FRAUD." 239 possibly have anything to do with the funds on a particular day " (a) . So, for several persons to obtain X. v. a quotation in the Official List from the Committee of the Stock Exchange by false statements, with the result that persons dealing in the securities believe that the requirements of the Committee have been properly com- plied with, and that thus a fictitious value is given to the securities, has been held to be a criminal conspiracy, although no proof was given that any one did in fact act on this belief (b) . Strong opinions were also expressed Scott v. in a case (c) in which there was a scheme to induce the public to apply for shares, and to believe there was a market, by making sham purchases of shares at a premium in the market, and getting the transactions quoted in the newspapers. The object, it was said, was " to impose upon and to deceive the public, by leading the public to suppose that there were buyers of such shares at a premium on the Stock Exchange, when in fact there was none but himself " (d). It was described as " an agreement to induce would-be buyers (contrary to the fact) to believe that there was a market for these shares, and that the shares were of greater value than they really were. Putting it shortly, an agreement to cheat the public by leading them to believe that the shares had a value, which the plaintiffs and defendants knew they had not, and thus inducing them to become purchasers. Is such a transaction illegal ? I am of opinion that it is, and might be made the subject of an indictment for conspiracy" (e). "If persons," it was said, " for their own purposes of speculation create an artificial price in the market by transactions which are not real, but are made at a nominal premium, merely (a) R. v. De Berenger, 3 M. Q. B. 721. &S. 67,jperLordEllenborough. (d) Ib. per Lindley, L. J., (1)} R. v. Aspinall, 2 Q. B. at p. 728. D. 48. (e) Ib. per Lopes, L. J., at (c) Scott v. Broivn, [1892] 2 p. 730. 240 MARKET-MAKING RIGGING CORNERS FRAUD. Action for deceit. Peek v. Gurney. for the purpose of inducing the public to take shares, they are guilty of as gross a fraud as has ever been committed, and of a fraud which can be brought home to them in a criminal court " (/) . Where the market has been rigged by means of such false representations, all the persons engaged can be made liable to a purchaser from them for damages in an action of deceit, provided it can be shown that the repre- sentations were made for the purpose of inducing him to buy (y). It has been held that where a quotation in the Official List has been obtained by false representa- tions to the Committee, all persons purchasing in the market can recover any damage they may sustain from those who made the representations to the Committee (h) ; but this is going too far (i) . It has since been laid down that the law is that every man must be held responsible for the consequences of a false representation made by him to another upon which a third person acts, and so acting is damnified, provided it appears that such false representation was made with the intent that it should be acted upon by such third person in the manner that occasions the loss or injury (k). Whether any particular case can be brought within this definition must depend on the facts, but if it could be proved that false representations were made to the public with the intention of inducing persons to purchase in the market, the persons making the representations would be liable to those who acted upon them in this manner (/). On the other hand, the fact of such representations having (/) Ib. per Wright, J., at p. 727. (g) /i. per A. L. Smith, L.J., at p. 734. (h) Bedford v. BagsTiaw, 29 L. J. Ex. 59 ; 4 H. & N. 538. (t) Overruled in Peek v. Gurney, L. E. 6 H. L. 377, at p. 397, per Lord Chelmsford. (&) Peek v. Ourney, ubi sup. at p. 412, per Lord Cairns; approving Barry v. Croskey, 2 J. &H. 1. (/) Stetvart v. Weber, The Times, Dec. 8th, 1903, per Cozens-Hardy, L. J. MARKET-MAKING RIGGING CORNERS FRAUD. 24 1 been made affords no cause of action if the plaintiff was not thereby induced, but acted on his own judgment (m). If persons engage in such a conspiracy, the Courts Suits between will not allow one of the conspirators to enforce by no^enter-* 8 action any right, arising out of the transaction, that he * ame(i - might otherwise have against any other conspirator, because, if a plaintiff cannot maintain his action without showing, as a part of the cause of action, that he has been guilty of illegality, the Courts will not assist him ; and it is immaterial whether the defendant raises the defence of illegality or not, as the Court will proprio motu refuse to try such a case (11) . The conspirators are in pari deltcto, and the maxim applies : "potior est con- ditto possidentis " (11). From such rigging must be distinguished the legiti- Legitimate mate making of a market, that is, the intentional ma king. enhancement of the price of some security, or the causing of a demand for it, without any fraud or false represen- tations. There is nothing illegal, for instance, in pooling Sanderson Y. shares, and then instructing a member, whether broker C antUe Co. or jobber, to offer them at not less than a certain price, and to buy all that are offered at that price. Nor is there anything wrong in such member having the shares quoted on the tape at the price at which he is willing to deal (o) , nor in agreeing with such member to take off his hands all or any part of such shares as may be bought by him in order to support the market (p). A (TO) Salaman v. Warner, object of inducing persons to [1891] 1 Q. B. 734. believe there had been deal- (n) Scott v. Brown, [1892] 2 ings, when in fact there had Q,. B. 724, following Taylor v. not, the case would seem to be Chester, L. E. 4 Q. B. 309; otherwise, and Beg'bie v. Phosphate Sewage (p) Sanderson and Levi v. Co., L. E. 10 Q. B. 491. British Mercantile Marine and (o) If the quotation on the Share Co., Ltd., The Times, tape was obtained with the July 19th, 1899. S. R 242 MARKET-MAKING RIGGING CORNERS FRAUD. person may sell his property in a market at any price he likes, provided he does not use fraudulent means to dispose of it. Dealings When there is to he a new issue of a company's fore allot- secur ities, a practice often adopted, to induce the public to apply for shares, is to deal in them at a premium hefore allotment. A member is instructed hy the pro- moters to bid at a premium for the new shares, and jobbers, relying on getting them at par by application either because they have previously been informed that they can have them, or because they hope to prevail upon the Committee to refuse a special settlement if they do not get them are naturally ready to sell at the premium. The public, seeing the shares dealt in at a premium, send in applications to the company asking for allotments of the shares (q) . The company then proceeds to allotment : the promoters, who have bought shares at a premium merely to start the dealings, proceed to get rid of them as fast as they can. If in so doing they suffer any loss, it is con- sidered as part of the promotion expenses. The effect of these sales is in a very short time to cause the premium to disappear, and the public, who have applied upon the faith of it, are left with depreciated shares upon their hands. The success of an issue has sometimes been prevented by opponents in the following manner. Before allotment, they sell for special settlement "bears" of the securities, in order to send the price below par, and so prevent the public from applying for shares. If this move is successful, there will be no allotment, and therefore no special settlement, and the " bears," being in consequence released from their con- tracts of sale, will not have to obtain securities to deliver. These practices seem, certainly from the point (?) Persons who apply for allotted, but to sell as soon as securities in a new issue, not possible at a premium, are meaning to hold what may be called "stags." MARKET-MAKING RIGGING CORNERS FRAUD. 243 of view of the public, objectionable ; but so far, at any rate, they have not been successfully attacked in a Court of Law. " Cornering the market " consists of purchasing Corners, securities from persons who, when the time conies for delivery, will be unable to obtain them. Generally, in a successful corner the persons purchasing have all the securities under their control. The result of such operation is that the sellers, or " bears," are " caught," and, in order to deliver, have to buy from the very persons to whom they have to deliver, at a price dic- tated by them, and only limited by the means of the persons so caught. In the absence of fraudulent repre- May be sentations, made with the object of inducing, and in le s itima e> i TI i n Salamanv. fact inducing, persons to sell, neither the Courts (r) nor Warner, the Stock Exchange Committee will assist persons to escape the results of their having made unwise bar- gains. But where fraudulent devices are resorted to, Where not only will an action lie for deceit, and the persons methods are engaged be indictable for conspiracy, but the Com- ad P ted - mittee will interfere by refusing a special settlement and quotation, by suspending the buying-in rule, or possibly by cancelling all bargains in the securities as between members. A fraudulent method, that has in several cases been adopted, is for the directors or promoters of a company to allot all the shares to persons who are merely their nominees, and unable or unwilling to pay the subscrip- tion money. In order that the shares may appear to be properly subscribed, some such device is resorted to as the following. Money is borrowed for the company from a bank, and then lent to the subscribers, who in turn repay it to the company as the subscription money ; and the company then, with the subscription money, repays its loan to the bank. Thus, in fact, no money (r) Salaman v. Warner, [1891] 1 Q. B. 734. R2 244 MARKET-MAKING RIGGING CORNERS FRAUD. permanently changes hands, but the shares appear to "be bond fide allotted to, and paid for by, the public ; a special settlement is obtained, and any one who has sold a share in the market is unable to deliver (*) . Another scheme which has been adopted is first to get control of all the securities, and then for one party to the conspiracy to instruct a broker to sell, while another instructs a broker to buy ; then, when the time for delivery comes, the person instructing the broker to sell either disappears, or is found to be insolvent, and his broker, being, under the rules of the Stock Exchange, personally responsible on the bargains, finds himself a "bear" with no securities to deliver (). To assist in carrying out such schemes, fictitious bargains have been made, false paragraphs have been inserted in the news- papers, and false quotations got on the tape. As in the case of rigging, where such false representations are made, or frauds committed, the guilty parties are liable to indictment, and one and all are liable in an action for the damages suffered by such persons as were intended to be, and have been, induced to act thereby. Stcu-artv. g 0> j n a recent case (), certain persons concerned in promoting and managing a company, called The Anglo- Dutch Exploration Company, issued, in the first place, certain shares, which were subsequently pooled. These shares were registered shares, and deliverable by deed of transfer in the ordinary way. An attempt was then made to make a market, very questionable means being employed to induce persons to buy the shares ; but this attempt proved abortive. A large amount of warrants to bearer for ordinary shares were then issued and () Barry v. Croskey, 2 J. & (t) R. v. Aspinall, 2 Q. B. D. H. 1 ; Gray v. Lewis, 8 Ch. 48 ; Steivart v. Weber, The 1035 ; British and American Times, May 27th, June 19th, Telegraph Co. v. Albion Bank, Dec. 8th, 1903. L. E. 7 Ex. 119. () Stewart v. Weber, ubisup. MARKET-MAKING RIGGING CORNERS FRAUD. 245 deposited in a bank, with instructions to the bank to deliver them against the receipt of their face value. These bearer shares were not good delivery on the Stock Exchange, as a special settlement had only been granted in registered shares ; they could, however, be exchanged for registered shares, which would be good delivery; but, by a clause indorsed in French on the back of the warrants, the company were not bound to effect the exchange until three months after application. An option over these bearer shares was then given to an insolvent person, and he and other persons prompted by him, most of whom were equally insolvent, gave instruc- tions to brokers to sell. Meanwhile a jobber, acting for the conspirators, was offering to buy at large premiums. The brokers, being satisfied that the warrants were at the bank, and obtainable on payment of the face value, and knowing nothing of the clause as to the three months' delay in exchanging for registered shares, sold large numbers to various jobbers, of whom the plaintiff was one, who in turn sold to the conspirators' jobber. When the time came for delivery, the com- pany refused to exchange the bearer shares for regis- tered, and the brokers and the jobbers who had sold found themselves cornered. The Committee, on learning the facts, suspended the buying-in rule ; and this effectually stopped the success of the conspiracy, and saved the selling brokers and jobbers from being at the conspirators' mercy. Later on, a rather curious position arose. At the end of three months the brokers got deliverable shares, and, the conspirators' jobber having in the meanwhile become a defaulter, tendered them to the jobbers to whom they had sold at the high bargain prices. The shares were valueless, and the jobbers refused to take delivery on the ground that, as time was of the essence of the contract, and the suspension of the buying-in rule did not extend the time for delivery, or prevent the release of inter- 246 MARKET-MAKING RIGGING CORNERS FRAUD. Obtaining special settle- ment by fraud. mediaries, the tender was too late; and this conten- tion was upheld in the Courts (x). The Committee had not taken this view, and the plaintiff had heen hammered for not paying one of the brokers for the shares when tendered. He brought an action against the company and all the persons concerned. The jury found there had been a conspiracy to defraud, and all the bargains to which he was a party were set aside, and he was given damages for what he had lost, including a substantial amount for the loss sustained through his being hammered (y) . As all dealings in the securities of new issues are subject to a special settlement being granted, it is essential for the success of such schemes, as those above described, that such settlement should be granted promptly ; for naturally the public are disinclined to deal in securities without knowing whether their bargains are enforceable or not. It would seem that to obtain, or conspire to obtain, a special settlement by fraud is not in itself indictable ; but if it could be proved that it was done to defraud the public, that is, intended purchasers or sellers, or that the natural result of deceiving the Committee would be to defraud such persons, an indictment would probably lie(s). (oj) Union Corporation v. Charrington, 8 Com. Cas. 99, per Bigham, J. On this point, see the new Kule 73a; and ante, pp. 84, 200. (y} Stewart v. Weber, The Times, May 27th and June 19th, 1903. (z) R. v. Aspinall, 1 Q. B. D. 730 ; and 2 Q. B. D. 48. ( 247 ) APPENDIX. RULES AND REGULATIONS FOE THE CONDUCT OF BUSINESS ON THE STOCK EXCHANGE. (Published by permission of the Committee.} ( 248 ) No Member of The Stock Exchange is allowed to advertise for business purposes or to issue circulars to persons other than his own principals. Persons who advertise as Brokers or Share Dealers are not Members of The Stock Exchange, or under the control of the Committee. A List of Members of The Stock Exchange who are Stock and Share Brokers may be seen at the Bartholomew Lane entrance to the Bank of England, or obtained on application to EDWARD SATTERTHWAITE, Secretary to the Committee of The Stock Exchange. Committee Room, The Stock Exchange, E.G. 249 RULES AND REGULATIONS. COMMITTEE. 1. On the 20th day of March in every year, or if that Election of day should be a Sunday or Bank Holiday, then on the the Corn- following business day, a ballot by the Members shall be m i tte e for held for the appointment of a Committee of thirty Members who shall be called the " Committee for General Purposes," and shall hold office for twelve months from the 25th of March next following the date of their election but shall be re-eligible. Notice of such ballot shall be publicly exhibited in The Stock Exchange during Fourteen days previous to the same being held, and a further notice containing the names of the persons on the existing Com- mittee willing to serve again, and of all new candidates, their proposers and seconders, shall be publicly exhibited in like manner during Three business days previously to such ballot being held. The Members on the said Com- mittee retiring shall remain in office until the 25th of the same month of March in which their successors shall have been elected, and in case no election shall be made at any such ballot as aforesaid, the Members retiring shall remain in office until the 25th day of March in the following year, or until a valid election shall have taken place under Clause 92 (Deed of Settlement}. Four business days' notice previous to any ballot of intention to propose any person not already on the Committee and eligible for re-election must be given to the Secretary of the Committee in writing signed by two Members, and the ballot shall be by printed lists containing the names of the persons willing to serve again and of all persons so proposed, distinguishing the former from the latter. In case no valid election be made on the day hereinbefore appointed for that object, the Committee may forthwith, or at any time thereafter, prior to the next ordinary yearly ballot, cause a ballot to be held for such election, on a day to be fixed by the Com- mittee for that purpose, and in all respects, as lastly here- inbefore provided ; and the Committee to be appointed by such ballot shall remain in office until the 25th day of March then next following. Every ballot for the election of the Committee for General Purposes or for supplying 250 APPENDIX. Qualification of Members of the Com- mittee and of Voters. Occasional vacancy in Committee. Procedure of the Committee. Quorum. Committee to regulate business on The Stock Exchange and make rules. vacancies iu the Committee shall be held at The Stock Exchange, and except as specially provided by these presents shall be conducted in accordance with the existing practice and usage in reference to such elections. In case of dispute as to what such practice and usage has been in any particular, the Committee shall from time to time determine the same by Resolution. Deed of Settlement, sect, xii., cl. 90. See p. 2. 2. No person shall be elected to the said Committee for General Purposes who shall not for the space of Five years immediately preceding the day of election have been a Member, and every person on ceasing to be a Member shall ipso facto vacate his seat on the Committee. Deed of Settlement, sect, xii., cl. 91. See p. 2. Every Member is entitled to vote although he may not have paid his subscription. 3. Any occasional vacancy in the said Committee for General Purposes shall be filled up by a ballot of Members to be held for the purpose on a day to be fixed by the Committee for General Purposes, and of which Seven days' previous notice shall be given by the same being publicly exhibited in The Stock Exchange. Similar notice of nomination shall be given as provided by Clause 90. The surviving or continuing Members on the Committee, not- withstanding any vacancy in their number, may act until the same shall be filled up. Any person elected to supply an occasional vacancy in the said Committee shall hold office for the residue of the year in which he shall be elected, and shall then retire with the other Members of the said Committee. Deed of Settlement, sect, xii., els. 92, 93. 4. The said Committee for General Purposes shall meet at such times as they may from time to time appoint, and shall determine their own quorum (the same to be not less than Seven Members actually present), and mode of procedure. Until otherwise determined, the quorum of the said Committee shall be Seven Members personally present. Deed of Settlement, sect, xii., els. 98, 99. See p. 2. 5. The said Committee for General Purposes shall regulate the transaction of business on The Stock Exchange, and may make rules and regulations not inconsistent with the provisions of these presents respecting the mode of conducting the ballot for the election of the Committee and respecting the admission, expulsion or suspension of Members and their clerks, and the mode and conditions in COMMITTEE. 251 and subject to which the business on The Stock Exchange shall be transacted, and the conduct of the persons trans- acting the same, and generally for the good order and government of the Members of The Stock Exchange, and may from time to time amend, alter or repeal such Rules and Regulations, or any of them, and may make any new, amended or additional rules and regulations for the pur- poses aforesaid. Deed of Settlement, sect, xii., cl. 95. See pp. 2, 4. 6. At their first ordinary Meeting after the Annual Election of Election, the Committee shall elect, from amongst them- Chairman selves, a Chairman and Deputy-Chairman, who shall re- and Deputy - spectively hold office till the 25th of March next ensuing. In case either appointment shall become vacant, it shall be filled up as soon afterwards as possible. When the Chairman and Deputy-Chairman are absent, the Meeting shall appoint a Chairman. In all cases, when, on a division, the votes are equal, Chairman the Chairman shall have a second or casting vote. See p. 2. has casting vote. 7. At the first Meeting of the Committee, one of the Election of Members of The Stock Exchange shall be chosen Secretary, Secretary who shall hold his office during their pleasure ; and three an( i Scruti- other Members shall be appointed to act as Scrutineers at neere> elections, who shall report the result of the ballot to the Committee, and to The Stock Exchange. See p. 2. 8. The Ordinary Meetings of the Committee shall be Meetings. held every Monday at 1.15 o'clock, commencing on the first Monday after each annual election. But a Special Special Meeting of the Committee may at any time be called by Meetings, the Chairman or Deputy- Chairman, or, (in their absence, or in case of their refusal) by any three Members of the Committee. One hour's notice, at least, shall be posted in The Stock Exchange. See p. 2. 9. If a quorum be not assembled within a quarter of an Absence of hour after the time appointed for meeting, the Chairman, Quorum, or Deputy-Chairman, may adjourn such meeting. 10. The business of the Committee shall be divided into Business : two classes, viz. : Routine and Eoutine. Special. Special. The first, to comprehend the reading of Minutes for the Minutes, purpose of confirmation or otherwise, the admission of Members and Clerks, fixing Settling Days, &c. ; The second, the investigation of claims and other matters relating to the interests of the Members, or of the public. The printed notices of the Meetings of the Committee Notices of Meeting. 252 APPENDIX. Confirmation of Resolution. Urgent Con- firmation. Decisions final. Notice of new Rules. Precedence of business. Communica- tions. Attendance of Members and Clerks when required. Expulsion of Members of Committee. Expulsion or suspension of Members. posted in the House shall contain the words on " Routine " or " Special" Business. See pp. 2, 4. 11. No resolution of the Committee shall be valid or put in force, until confirmed, unless it relate to the shutting of the House, the admission of Members, the re- admission of defaulters, the fixing of ordinary settling days, or the granting or refusing of special settlements and official quotations. In cases which do not admit of delay, two- thirds of the Committee present must concur in favour of the immediate confirmation of the Eesolution, and the urgency of the case must be stated on the Minutes. If a Resolution be not confirmed, and another Resolution be substituted, the substituted Resolution shall also require confirmation at a subsequent Meeting. In all cases brought under the consideration of the Committee, their decision, when confirmed, is final, and shall be carried out forthwith by every Member concerned. See pp. 3, 4, 121. 12. Notice shall be given in writing of any alteration of, or addition to, the Rules, and a copy of such alteration of a Rule, or proposed new Rule, shall be sent to each Member of the Committee. After the reading of the Minutes, the consideration of any alteration of a Rule, or proposed new Rule, shall take precedence of all other business, except the re-admission of Defaulters and cases of urgency. 13. All communications to the Committee shall be made in writing; and no anonymous letter shall be acted upon. 14. Members and their Clerks shall attend the Committee when required ; and shall give such information as may be in their possession relative to any matter under investiga- tion. See p. 3. 15. The Committee may expel any of their own Members from the Committee who may be guilty of improper conduct. The Resolution for expulsion must be carried by a majority of two-thirds in a Committee specially sum- moned for the purpose, and consisting of not less than Twelve Members, and must be confirmed by a majority of the Committee, at a subsequent Meeting specially summoned. 16. CLAUSE 1. The Committee may expel or suspend any Member who may violate any of the Rules or Regula- tions. CLAUSE 2. The Committee may expel or suspend any COMMITTEE. 253 Member who may fail to comply with any of the Com- mittee's decisions. CLAUSE 3. The Committee may expel or suspend any Member who may be guilty of dishonourable or disgraceful conduct. A Resolution for expulsion or suspension must be carried Special by a majority of three-fourths of a Committee present at a Committee. Meeting specially summoned, and consisting of not less than Twelve Members, and must be confirmed by a majority of a Committee present at a subsequent Meeting specially summoned. See pp. 3, 4. 17. The Committee may censure or suspend any Member Improper or of The Stock Exchange who may conduct himself in an Disorderly improper or disorderly manner, or who may wilfully Conduct, obstruct the business of the House. A Resolution for suspension must be carried by a majority of three-fourths of a Committee present at a Meeting specially summoned, and consisting of not less than Twelve Members, and must be confirmed by a majority of a Committee present at a subsequent Meeting specially summoned. See pp. 3, 4. 18. The Committee for General Purposes for the time Publication of being may, in their absolute discretion, and in such manner names, &c. as they may think fit notify, or cause to be notified to the public that any Member has been expelled, or has become a Defaulter, or has been suspended, or has ceased to be a Member, and the name of such Member. No action or other proceeding shall under any circumstances be main- tainable by the person referred to in such notification against any person publishing or circulating the same, and this Rule shall operate as leave to any person to publish and circulate such notification, and be pleadable accord- ingly. See p. 3. 19. The Committee may dispense with the strict enforce- Suspension ment of any of the Rules and Regulations ; but such f Rules and power shall only be exercised by a Committee especially Regulations- convened for that purpose ; and consisting of not less than Twelve Members, three-fourths of whom must concur in the Resolution for such dispensation. The Resolution must be confirmed by a majority of the Committee, at a subsequent Meeting specially summoned. See p. 84. ADMISSIONS, RE-ELECTIONS AND RE-ADMISSIONS. 20. Every Member desirous of being re-elected shall, on Application or before the 15th of February in each year, address to forre- the Secretary a letter, of the form inserted in the Appendix. electio11 ' 254 APPENDIX. Each Member of a Partnership is required to sign a separate letter. Admission 21. The Committee shall, subject to the provisions of and re- the Rules and Regulations for the time being in force, on election. ^ e fi rs ^ Monday in March, proceed to admit and re-elect such persons, as they shall deem eligible to be Members of The Stock Exchange, for one year, commencing on the 25th of March then instant, or last preceding the admission of such Subscriber, at the amount fixed by the Trustees and Managers for such admission. See pp. 2, 3, 4, 5, 11. 21a. Every applicant for admission shall be required to obtain the nomination of a Member willing to retire in his favour, or of a former Member, or of the legal personal representatives of a deceased Member, with the exception of such number of candidates with Two recomrnenders, as the Committee shall at a special meeting held in December of the year preceding, fix for admission without nomination. A Resolution fixing the number of candidates to be so admitted shall not be valid or put in force until confirmed. An applicant nominated by an existing Member shall not exercise any of the privileges of Membership until the resignation of the nominating Member has been accepted by the Committee. See pp. 11, 12. 21b. The nomination shall be on one of the forms in the Appendix. 21c. In the case of a deceased Member the probate of the will or letters of administration must be exhibited to the Secretary when the nomination on form No. 4 is lodged. 21d. Nominations by other than existing Members must be executed and lodged with the Secretary within Twelve months of the death or resignation of the Member, or, in the event of his discontinuing his subscription, within the current Stock Exchange year. If not so exercised the right of nomination shall lapse. If a Nominee be rejected, a further nomination may be lodged within the prescribed period. See p. 11. 21e. The right of nomination shall be personal and non- transferable and shall not be exercised by a Defaulter, by a person who is expelled or who ceases to be a Member either under Rule 153 or in consequence of his failure to pay the fees due to the Trustees and Managers, or in con- sequence of his failing to acquire or hold the share or shares required by Rule 21g, or by any person ceasing to be a Member whilst under suspension. A Member admitted on or before 23rd November, 1904, ADMISSIONS, RE-ELECTIONS, ETC. 255 or who shall be admitted without nomination, shall not exercise the right of nomination until after the term of the liability of his recommenders shall have expired by effluxion of time, but in the event of the decease of such Member prior to such time his legal personal represen- tatives may exercise the right of nomination. A Defaulter shall not be required to obtain a nomination before re-admission. See pp. 11, 12, 98. 21f. A Clerk having completed Four years' service in The Stock Exchange or the Settling Rooms in accordance with Clause 2 of Rule 22, may apply on the form in the Appendix to be placed on the waiting list of applicants for election without nomination. The names of Clerks so applying shall be placed upon a waiting list in the order of application, and the list shall be posted in The Stock Exchange in December of each year. Those within the number fixed by the Committee under Rule 21a may be balloted for on or after the first Monday in March for the ensuing Stock Exchange year, provided that their application forms duly signed and complete in all respects be lodged with the Secretary at least eight days before the ballot. Any applicant, within the number fixed by the Com- mittee, who fails to lodge a complete application form within three months from the date of his having the right to do so, shall be placed at the bottom of the waiting list, and the next in order of priority shall be entitled to lodge an application form. The name of a Clerk who ceases to have admission to the House or the Settling Rooms for a period of six con- secutive months, shall be removed from the waiting list. See p. 12. 21g. Every Member elected after the 23rd November, 1904, shall, before exercising any of the privileges of Membership, become a proprietor in The Stock Exchange, by acquiring One share (of the present denomination or its equivalent) in the case of Members admitted with Two recommenders, Three shares (of the present denomination or its equivalent) in the case of Members admitted with Three recommenders ; a Member requiring a share quali- fication who fails to obtain the same within Six months, or who at any time ceases to hold the same, thereby ceases to be a Member. The Secretary shall not issue his admission notice to a new Member until it has been reported to him by the Secretary to the Trustees and Managers that the new 256 APPENDIX. Qualification. Sureties. When Two sureties required. Candidate previously engaged in business. Limitation as to Recom- mendation. Foreigners. Notice of application. Personal knowledge of applicant by sureties. Subsequent indemnifica- tion of sureties. Member has been duly registered as a proprietor of the required number of shares. See pp. 12, 14. 22. Every applicant for admission must be recommended by Three Members of not less than Four years' standing, who have fulfilled all their engagements and are not indemnified. Each recommender must engage to pay Five hundred pounds to the creditors of the applicant, in case the latter shall be declared a Defaulter within Four years from the date of his admission. See pp. 12, 13. If the applicant has served as a Clerk in the House or the Settling Rooms for Four years (with a minimum service in the House of Three years), previously to the lodging of his complete application form, Two recom- menders only shall be required, who must each enter into a similar engagement for Three hundred pounds, but any Clerk, who previously to his employment in The Stock Exchange shall have been engaged as Principal in any business, shall only be eligible for admission as a Member with Three sureties for Five hundred pounds each. The election of new Members must be carried by a majority of three-fourths in a Committee consisting of not less than Twelve Members. No Member shall be surety for more than Two new members at the same time unless he take up an unexpired suretyship, when the limit shall be Three. 23. No Foreigner shall be admissible, unless he shall have been naturalised for a period of Two years, and shall have been a resident in this country for Seven years. See p. 13. 24. A Notice of each application, with the names of the recommenders, stating that they are not, and do not expect to be, indemnified, shall be posted in The Stock Exchange, at least Eight days before the applicant can be balloted for. 25. Members are required to have such personal know- ledge of applicants whom they recommend, and of their past and present circumstances, as shall satisfy the Com- mittee as to their eligibility. See p. 13. 26. Any recommender of a New Member, who at the time of such Member's admission shall have avowed that he was not, and that he did not expect to be indemnified, and who shall subsequently receive any indemnity, shall in the event of the New Member failing within the time of his liability, be compelled to pay to the creditors any sum so received, in addition to the amount for which he originally became surety. See p. 12. ADMISSIONS, RE-ELECTIONS, ETC. 257 27. An applicant may be recommended by a firm, but Ineligibility not by Two members of the same firm, nor by a Member of sureties. who is an Authorised or Unauthorised Clerk, nor by a Member whose Authorised Clerk the applicant may be, nor by a Member whose sureties are still liable. See p. 13. 28. If a Member enter into partnership with, or become New sureties Authorised Clerk to, any one of his sureties, or if any one when of his sureties cease to be a Member during his liability, requi 16 ^- he shall find a new surety for such portion of the time as shall remain unexpired ; and until such substitute is pro- vided, the Committee will prohibit his entrance to The Stock Exchange. See p. 13. 29. No applicant is admissible, if he be engaged as Applicants Principal or Clerk in any business other than that of The engaged in Stock Exchange, or if his wife be engaged in business, or otner busi- if he be a member of, or subscriber to, any other institution n where dealings in Stocks or Shares are carried on ; and if subsequently to his admission he shall render himself subject to either of those objections, he shall thereby cease to be a Member. See p. 13. 30. *No applicant for admission, who has been a bank- Bankruptcy, rupt, or against whom a Receiving Order in Bankruptcy has been made, or who has been proved to be insolvent, or who has compounded with his creditors, shall be eligible, unless he shall have paid 20s. in the , and obtained a full discharge. No applicant, having more than once been a bankrupt or insolvent, or compounded with his creditors, shall be eligible for admission. See p. 13. 31. A Member, intending to object to the admission, or Objections re-admission of an applicant, or to the re-election of a to be in Member, is required to communicate the grounds of his writing, objection to the Committee by letter, previously to the ballot or re-election. See p. 14. 32. If any applicant for admission, re-admission or re- Rejected election, be rejected, he shall not be balloted for again applications, before the 25th of March then next ensuing. Defaulters Special Corn- declared within Four years of their admission as Members, mittee on and Defaulters who have been rejected upon Two ballots Defaulters can only be re-admitted by a majority of three-fourths in when a Committee specially summoned, and consisting of not less than Twelve Members. * This Rule does not apply to the re-admission of Members of The Stock Exchange. 258 APPENDIX. Discontinu- ance of sub- scriptions. Realisation of Members. Re- admission of Defaulters. Re-admission of Bankrupts or Insolvents. 33. Any former Member, who, not having resigned, and not having been a Defaulter, bankrupt or insolvent, and who has not exercised his right of nomination, but shall have discontinued his Subscription for One year, must be recommended for re-election by Two Members, but without security. If he shall have discontinued his subscription for Two years, he will be considered a new applicant, and must apply for admission in the usual way. 34. Any Member wishing to resign his Membership must forward to the Secretary a letter tendering such resignation, and a copy of this letter shall be posted in The Stock Exchange for at least four weeks before the matter is entertained by the Committee. 35. A notice of every Defaulter, applying for re-admis- sion, shall, at the discretion of the Committee, be posted (without recommenders) in The Stock Exchange, at least Twenty-one days, and the Committee shall then take the application into consideration, upon the report of the Sub- Coinmittee, appointed according to Rule 173. If, however, the Committee think fit, a Defaulter may be re-admitted without the above notice, upon a report of the Sub-Com- mittee, and a certificate signed by such a number of the creditors as may be satisfactory to the Committee, that all liabilities have been bond fide discharged in full. In all such cases, after the Defaulter has been re- admitted by ballot it shall be decided by show of hands, whether his name shall be posted in the Stock Exchange as having paid 20s. in the ; or whether it shall be placed in one of the two classes mentioned in Rule 174. Any Member, not a Defaulter, who shall have ceased to be a Member under Rule 153, and who shall have paid 20s. in the , may be allowed to apply for re-admission with Two sureties of 300 each. 35a. A Defaulter, who has been originally admitted a Member after the 23rd November, 1904, shall, on re-admis- sion, in the event of his having parted with his share qualifi- cation, before again exercising any of the privileges of Membership become a proprietor of One share in The Stock Exchange (of the present denomination or its equivalent). A Defaulter who fails to obtain his share qualification within Six months of re- admission, or who at any time ceases to hold the same, thereby ceases to be a Member. The Secretary shall not issue his re-admission notice to such a Defaulter until it has been reported to him by the Secretary to the Trustees and Managers that the Defaulter has been duly registered as the proprietor of One share. See p. 98. PARTNERSHIPS. 259 36. The re-admission of Defaulters shall take prece- Precedence of dence of all other business. Defaulters' re-admission. 37. The Chairman of the Committee, in addition to any Questions put other questions that may appear to be necessary, shall, to sureties, to each of the recommenders of an applicant, put the following : Has the applicant ever been a bankrupt, or has he ever compounded with his creditors? and if so, within what time, and what amount of dividend has been paid ? Would you take his cheque for Three thousand pounds in the ordinary way of business ? Do you consider he may be safely dealt with in securi- ties for the account ? See p. 13. 38. The Chairman shall require every new applicant to Questions acknowledge his signature to the form of application, and P ut * new " shall ask such questions as may be deemed necessary. applicants. PARTNERSHIPS. 39. In every year, as soon as possible after the general Notice of election, a list of parnerships shall be made out by the partnerships. Secretary. In case of a new, or alteration in an old partnership, the same shall be communicated to the Com- mittee ; and no partnership shall be considered as altered or dissolved until such communication be made. All notices relative to partnerships must unless other- To be posted, wise ordered by a Committee specially summoned for that purpose be signed by the parties, countersigned by the Secretary, and posted in The Stock Exchange. See p. 17. 40. The failure of a firm dissolves the partnership, and, Partnerships should the members of such firm, when re-admitted, desire dissolved by to renew the partnership, notice thereof must be given to "-i^ 1 * 6 - the Committee, in the usual way. See p. 17. 41. No Member of The Stock Exchange shall be allowed Partnership to enter into partnership with any person who is not a with Non- Member : nor shall any Member form a partnership during Me ^ 1 .V^f s f , the liability of his recommenders, without their written pro consent ; such consent to be communicated to the Com- Consent of mittee. See p. 17. sureties. 42. Members dealing generally together in any par- Joint dealing, ticular Stock or Shares, and participating in the result, shall be held responsible for the liabilities of each other, not only in the Shares or Stock in which they are jointly interested, but also in any other description of Securities s. T 260 APPENDIX. Limited Partnership. Form of notice. Brokers and Dealers, and their Clerks. Partnership between Brokers and Dealers. Admission. Eligibility. Defaulters. in which either of them may transact business, unless they forward a written notice to the Secretary, specifying the particular Shares or Stock in which they deal on joint account. No Limited Partnership shall consist of more than two Members, or Firms, nor shall such Partnership be carried on in any other Markets than those in which both parties are dealing. See p . 18. All Limited Partnerships must be notified to the Secretary and posted in The Stock Exchange. This Rule to be applicable also to Members allowing others to deal with their Shares, Stock or capital, and participating in the result. FORM OF NOTICE. We, the undersigned, beg to inform the Committee for General Purposes that, from this day until further notice, we hold ourselves jointly responsible to The Stock Exchange for all transactions entered into by either of us in We are, Sir, &c. 43. The Committee will not allow Members or their authorised Clerks to act in the double capacity of Brokers and Dealers ; nor will they sanction partnerships between Brokers and Dealers. See p. 17. CLERKS. 44. No Clerk shall be admitted to the House or the Settling Rooms without the permission of the Committee ; nor unless he be Seventeen years of age. A Member applying for the admission of a Clerk must satisfy the Committee that he would be in all respects eligible as a Member except as regards age. A member may apply for the admission of a Defaulter as his Clerk, Authorised, or Unauthorised, though the Defaulter may not have complied with Rule 1G6. A notice of such application shall be posted in The Stock Exchange for at least Fourteen days, and the Committee shall then, at a Special Meeting convened for that purpose and con- sisting of not less than Twelve Members, take the applica- tion into consideration upon the report of the Sub-Com- mittee appointed according to Rule 173, and a Resolution allowing such application must be carried by a majority of three-fourths of those present. CLERKS. The Resolution must be confirmed by a majority present at a subsequent meeting specially summoned. Clerks so allowed are not thereby admissible as Members. A Member applying for the Admission as his Clerk of a Defaulter who has been previously admitted under Clause III. of this Rule need only apply in the usual way. No Clerk shall be authorised to transact business until Authority he is Twenty-one years of age and has been admitted to * deal, the House or the Settling Rooms for Two years, with a minimum service in the House of one year. No Authorised Clerk shall transact business as a dealer in any securities other than those in which his employer deals. See pp. 18, 19, 98. 45. The maximum number of Clerks permissible but Maximum not necessarily allowed is for an number allowed. Author- Unauthor- Settling ised. ised. Boom. Individual Member .... 1 2 2 For a Firm 2 3 4 but Members may be employed as Unauthorised Clerks in excess of the numbers above allowed. In the event of a Member or Firm not employing the maximum number of Authorised Clerks, they may be allowed an additional Unauthorised Clerk, so as not to exceed in any case Three Unauthorised Clerks for an individual or Five for a Firm. See p. 18. 46. A Member desirous of obtaining the admission of a Application Clerk shall make application in writing to the Committee, for admission and state whether such Clerk is to be authorised or not as Clerk, authorised to transact business, or is to be admitted to the Settling Rooms only. A Member desirous of employing another Member as Member as his Clerk, whether or not employed in the House, shall Clerk. make application in writing to the Committee and state if such Clerk is to be authorised or not to transact business. See p. 18. All Unauthorised and Settling Room Clerks not being Badges. Members who may be admitted to The Stock Exchange shall, when exercising this privilege, wear a distinctive Badge in the lapel of their coats, and the Member apply- ing for their admission shall be responsible for the Badge being worn. See p. 19. When application is made for the admission of a Clerk Previous who has previously been engaged in business out of The occupation of Stock Exchange, the name and address of such person, a PP llcants - together with the name of the Member applying for his T2 262 APPENDIX. Reference. Notice of admission. Consent of Sureties of a New Member to his Em- ployment of an Authorised Clerk. Dismissal of a Clerk, or withdrawal of authority to deal, &o. List of Authorised Clerks. Responsi- bility of Members employing Authorised Clerks. Members as Clerks. Application for allotments by Clerks. Exclusion of Clerks of Defaulters and deceased Members. admission, shall be posted in The Stock Exchange Eight days prior to the application being considered by the Committee. The Committee require that a Member shall have ob- tained a satisfactory reference from the last employer of any Clerk he may desire to introduce. No Clerk shall enter The Stock Exchange until his employer has received from the Secretary notice of his admission. 47. A Member, the liability of whose recommenders is unexpired, must obtain their consent in writing before applying for the admission of an Authorised Clerk. See p. 19. 48. A Member who may part with a Clerk, or be desirous of withdrawing from an Authorised Clerk, the permission to transact business on his account shall give notice in writing to the Secretary, who shall forthwith communicate the same to The Stock Exchange, in the usual manner. See p. 19. 49. A list of Authorised Clerks (distinguishing those who are also Members) and the names of their employers, shall be posted in The Stock Exchange, and the authority shall be considered to continue until revoked by letter to the Committee. 50. A Member authorising a Clerk to transact business shall not be held answerable for money borrowed by the Clerk, without security, unless he shall have given special authority for that purpose. See p. 19. 51. A Member employed as Clerk, whether Authorised or Unauthorised, shall not make any bargain in his own name ; nor after the termination of his Clerkship, if the same arises from the default of his employer, until he has first obtained the permission of the Committee. See p. 19. 52. No Clerk shall be allowed to apply for an allotment in Loans or Shares, without the sanction of his employer, who shall be responsible for the payment of the deposit on the Shares or Stock so applied for. 53. Clerks of Defaulters are excluded from The Stock Exchange. Clerks of deceased Members may, by per- mission of Two Members of the Committee, attend to adjust unsettled accounts. GENERAL RULES, ETC. 263 GENERAL RULES APPLICABLE TO STOCK EXCHANGE TRANSACTIONS. 54. The Stock Exchange does not recognise in its deal- Fulfilment of ings any other parties than its own Members : every bar- bargains, gain therefore, whether for account of the Member effecting it, or for account of a principal, must be fulfilled according to the Rules, Regulations and usages of The Stock Exchange. See pp. 15, 50, 121. 55. Any Member issuing a contract for the purchase or Contract note, sale of Stock or Shares effected with a Non-Member shall Bargains with explicitly notify this fact on the face of the contract, which Non-Member, must also explicitly state when a Brokerage is receivable Brokerage, from both buyer and seller. See pp. 105, 114, 137. 56. No Member shall attempt to enforce by law a Legal pro- claim arising out of Stock Exchange transactions against ceedings by a Member or Defaulter, or against the principal of ] ^ em ' :)ers - a Member or Defaulter, without the consent of such Member, of the creditors of the Defaulter, or of the Committee. The Committee have power to intervene in cases where Legal pro- the principal of a Member shall attempt to enforce by law ceedings a claim which is not in accordance with the Rules, Regula- tions and usages of the Stock Exchange, and will deal with such cases as the circumstances may require. See pp. 4, 5. 57. If a Non-member shall make any complaint against Complaints a Member, the Committee shall in the first place consider ^ N P n " whether the complaint is fitting for their adjudication, and a j^^ a in the event of the Committee deciding in the affirmative, Members, the Non-Member shall previously to the case being heard by the Committee sign a consent in writing as follows : To the Committee for General Purposes of The Stock Exchange, London ; In the Matter of a Complaint between and GENTLEMEN, I do hereby consent to refer this matter to you, and I under- Form of take to be bound by the said reference, and to abide by and consent to forthwith to carry into effect your Award, Resolution or decision of decision in this matter, in the same manner as if I were a Committee. Member of The Stock Exchange ; and I further undertake not to institute, prosecute, or cause, or procure to be instituted, or prosecuted, or take any part in proceedings, either civil or criminal, in respect of the case submitted. And I consent that the Committee may proceed in accordance with their ordinary rules of procedure, and I undertake to be bound by 264 APPENDIX. Private deal- ing with individuals of a firm prohibited. Speculative business for Officials or Clerks pro- hibited. Penalty. the same. Also that the Committee may proceed ex parte after notice, and that it shall be no objection that the Members of the Committee present vary during the enquiry, or that any of them may not have heard the whole of the evidence, and any Award or Resolution of the Committee, signed by the Chairman for the time being, shall be conclusive that the same V.MS duly made or passed, and that the reference was conducted in accordance with the practice of the Committee. And I hereby agree that this letter shall be deemed to be a submission to arbitration within the meaning of the Arbitration Act, 1889. Bargains with or for Clerks. See p. 6. 58. If a Member shall do a private bargain, either for money or time, with an individual member of a firm in The Stock Exchange, such bargain being wilfully concealed from the firm, both Members shall be expelled. A Resolution bringing a Member under the operation of this Rule must be carried by a majority of three-fourths of a Committee consisting of not less than Twelve Members, and must be confirmed by a majority of a Committee present at a subsequent Meeting specially summoned, 59. If any Member or Authorised Clerk shall do a bar- gain, either for money or time, with an Authorised or Unauthorised Clerk, for account of such Clerk, they shall be liable to expulsion. A Resolution for expulsion or suspension must be carried by a majority of three-fourths of a Committee present at a Meeting specially summoned, and consisting of not less than Twelve Members, and must be confirmed by a majority of a Committee present at a subsequent Meeting specially summoned. 60. Members are not allowed to transact speculative business directly or indirectly, for or with Officials or Clerks in public or private establishments, without the knowledge of their employers. Members disregarding this Eule are liable to be dealt with in such manner as the Committee may deem ad- visable. A Resolution for expulsion or suspension must be carried by a majority of three-fourths of a Committee present at a Meeting specially summoned, and consisting GENERAL RULES, ETC. 265 of not less than Twelve Members, and must be confirmed by a majority of a Committee present at a subsequent Meeting specially summoned. See p. 6. 61. No application which has for its object to annul any Inviolability bargain in The Stock Exchange shall be entertained by the of bargains. Committee, unless upon a specific allegation of fraud or wilful misrepresentation. See pp. 4, 121. 62. A Member applying for Shares or Stock of Loans or Payment of public companies, and neglecting to pay the deposit on the deposits by same, shall be considered to have violated a contract, and allottees - shall be compelled to fulfil his engagement. See p. 85. 63. The Committee will not recognise New Bonds, Stock, New Bonds or other Securities, issued by any Foreign Government that ^f Forei g n has violated the conditions of any previous Public Loan videLting raised in this country, unless it shall appear to the Com- conditions of mittee that a settlement of existing claims has been previous assented to by the general body of Bondholders. Public Loans. Companies issuing such securities will be liable to be excluded from the Official List. 64. The Committee will not, after the restoration of Loans raised peace, recognise, or allow the quotation of, any Loan by Powers raised by a Power whilst at war with Great Britain. witt^GreaT' 65. No Member shall enter into bargains in prospective Britain - dividends on Shares or Stock of railway or other com- Bargains a An in dividends panies. See p. 46. forbidden. 66. All disputes between Members, not affecting the Arbitration, general interests of The Stock Exchange, shall be referred to arbitration ; and the Committee will not take into con- sideration such disputes, unless arbitrators cannot be found, or are unable to come to a decision. See p. 55. N.B. The Committee strongly recommend that all bar- Bargains to gains be checked on the following day. be checked - 67. No Member shall be obliged to take a reference for Reference for payment to a Non-Member; nor shall he be obliged to L aym ^ nt to pay a Non-Member for Securities bought in The Stock b^",^. Exchange. See pp. 81, 170 174. sanctioned. 68. Cheques must be passed through the Clearing Cheques for House, unless the drawer consent to their being otherwise clearing- presented. But if a Member require Bank Notes in pay- Demand for ment for Securities sold, without having made such stipu- Bank Notes. lation at the time of making the bargain, he must give notice to that effect before Half-past Eleven o'clock on the day of delivery, and payment shall be made upon delivery of the Securities, or the Bank receipt. See pp. 78, 81, 169. 206 APPENDIX. 69. A Seller, having transferred or delivered Stock or other Securities, has a right to demand payment from the Member who passed him the Ticket ; and in case the Seller apply to the issuer of the Ticket, and fail to obtain pay- ment, or receive a cheque which is dishonoured, the Member from whom he received the Ticket shall make immediate payment. See p. 74. 70. A Seller may require payment of the difference between the price marked on the Ticket, and the making- up price of the day on which the Ticket is tendered, but if such making-up price be above the price of sale, he shall only be entitled to claim the difference up to the price of sale. 71. In cases of Loans, the lender is not entitled to place beyond his control Shares or Stock received as security for money advanced ; and he may, after reasonable notice, and upon payment of the principal together with interest up to the time for which the Loan was originally made, be required to return the identical Bonds, or to re-transfer the Shares or Stock given as security for such Loan. But this liability does not apply to a Member who has taken in Shares or Stock upon continuation. All continuations shall be effected at the making-up price, or at the then existing market price. See p. 62. 72. Buying-in or Selling-out must be effected publicly by the officials of the Buying-in and Selling-out Depart- ment appointed by the Committee for General Purposes, who shall trace the transaction to the responsible party and claim the difference thereon. See pp. 82, 83, 192. 73. Bonds, Shares or other Securities, shall not be bought in while they are known to be out of the control of the Seller for the payment of calls, or the receipt of interest, dividends or bonus ; and the Committee, on being applied to, will fix a day on which they may be bought in. See p. 83. 73a. The Committee may suspend the buying-in of Securities, when circumstances appear to them to make such suspension desirable in the general interest. The liability of intermediaries shall continue during such sus- pension unless otherwise determined by the Committee. See pp. 84, 200, 246. 74 ' In the settlement of a11 bargains, dividends are to be acounted for accoun t e( l f r a * the net amount receivable after deduction of Income Tax. Seller may require pay- ment of pur- chase-money of his buyer. Dishonoured cheques. Difference between price marked on ticket tendered and that at which sold may be demanded. Loans, deal- ing with the security. Security to be returned when required. Continuation. Employment of officials in buying-in or selling-out, &c. When securi- ties may not be bought in. GENEKAL RULES, ETC. 267 In the case of dividends payable only abroad, the Secre- Fixing price tary to the Share and Loan Department shall fix a price of Foreign for the Coupons in sterling money, which shall be posted Coupons. in The Stock Exchange, and at which the dividends shall be accounted for. Securities to bearer are not deliverable on the Settling- Current day without the current Coupon. Coupon. Securities to bearer, with Coupon payable on the Settling- When deliver- day shall be delivered ex-Coupon. ab le ex- When the dividend is payable after the Settling-day, Cou P n - outstanding bargains in Securities to Bearer shall be -^ ?? settled with the current coupon, otherwise the Buyer shall pava kie after have the right to demand the market value of the Coupon, yettling-day. which, in case of dispute, shall be fixed by the Secretary to the Share and Loan Department. See p. 45. 75. Thirteen clear days between delivery and the closing Time allowed of the Books of the Company shall be allowed by the for transmis- Seller to the Buyer of Shares of American Railway Com- S A n - j A a j i- c J.T- n American panies, in order to anord time tor transmission or the Cer- Certificates tificates to New York and Philadelphia. See p. 43. for Registra- tion. 76. Six weeks between delivery and the closing of the Time allowed Books of the Company shall be allowed by the Seller to for trammis- the Buyer of Shares of South African Companies having ^, n . of South Registration offices in South Africa only, in order to afford tig"^" f^" time for transmission of the Certificates thereto. See Registration p. 43. 77. All optional bargains for the Consols Account shall Options, be declared at a Quarter before Three o'clock Two days before the Account-day. Optional bargains made for a Foreign Settlement shall be declared at a Quarter before Three o'clock on the day before the First Making-up day, or at a Quarter before One o'clock should that day fall on a Saturday. Options for any other day must be declared at a Quarter before Three o'clock, or on Saturdays at a Quarter before One o'clock. See p. 60. If the day for the declaration of Options fall upon a day on which The Stock Exchange is closed, they shall be declared on the preceding business day. 78. "When Shares or Stock on which Options are open Rights on are quoted " Ex Rights " an official price will on applica- Option Stock. tion to the Secretary of the Share and Loan Department be fixed for the Rights. All Rights in respect of Options shall be settled by the Valuation, allowance of such valuation in the Option price, unless the 268 APPENDIX. Member who has given for the call or taken for the put shall give notice in writing on or before the day the Shares or Stock are quoted "Ex Eights" that he will claim the new Shares or Stock and accept delivery if the Option is exercised. See p. 49. Hours of 79. The hours of business in The Stock Exchange are business. from Eleven until Three o'clock. On Saturdays business will close at One o'clock. Ticket-day When the Ticket-day is fixed for a Saturday, the House on Saturdays. w jjj ^ e ^ e ^ O p en until THREE o'clock, for the purpose of the Settlement only, the regulations for which shall be the same as on ordinary Ticket-days. Holidays. The Stock Exchange will be closed on the following days, viz. : 1st January, Easter Monday, 1st May, Whit Monday, The First Monday in August, 1st November, 26th December, unless specially ordered otherwise by the Committee. When either the 1st January, 1st May, 1st November, or 26th December falls on a Sunday, the House will be closed on the day following. Bargains RULES APPLICABLE TO ENGLISH, INDIA, CORPORATION AND COLONIAL G-OVERNMENT INSCRIBED STOCKS, &c. 80. All bargains, when no time is specified, shall be cons idered as made for the existing Consols Account, except bargains in Colonial Government Stocks, which shall be for the Foreign Settling-day. See p. 55. 81. Any claim arising from a bargain effected for a future Account more than eight days previously to the close of the pending Account will not be allowed to rank against a Defaulter's estate until all other Creditors have been paid in full. See pp. 56, 94. Offers to buy 82. An offer to buy or sell a sum of stock, at a price named, is binding as to any part thereof ; and an offer to buy or sell Stock, when no amount is named, is binding to the amount of 1,000 Stock. See p. 52. Transfer 83. If the Seller of English, India, or Corporation Stock shall not receive from the purchaser a Transfer-Ticket by Dealing for future Accounts. ENGLISH, INDIA, CORPORATION STOCKS, ETC. 269 Ten minutes before One o'clock, he may demand two shillings and sixpence for each transfer-fee, which may be paid for the actual transfer of such Stock. On a Settling- day, if the Transfer-Ticket is not delivered by a Quarter before One o'clock, the Seller may claim of the purchaser, two shillings and sixpence for every 1,000 Stock. If the Seller shall not receive a Transfer- Ticket before Time for Half-past One o'clock on the day it was contracted to Selling-out, deliver the said Stock, he may sell out the same and claim of the person who held the Ticket at Half -past One o'clock any loss or charge incurred. If the ticket has not been issued before Half -past Twelve Liability on o'clock, any loss or charge incurred shall fall on the Issuer late passed of the Ticket. On Saturdays Stock may be sold out at a Tickets. Quarter past Twelve o'clock. See pp. 71. 79, 82, 83. T^ 6 for Selling-out on 84. The Buyer of Colonial Government Inscribed Stocks Saturda y s - for the Account must issue Tickets before Two o'clock on the Ticket -day, and the deliverer of Colonial Government Inscribed Stocks who shall not receive a Ticket by Three o'clock on the Ticket-day, may sell out on the Settling-day, Selling-out, or on any following day. If a Ticket shall not have been regularly issued before Two o'clock on the Ticket-day, the issuer thereof shall be responsible for any loss occasioned by such selling-out. Should a Ticket have been regularly put into circulation, the holder at Three o'clock on the Ticket-day shall be liable. In case of selling-out on any subsequent day, the holder of the Ticket at Three o'clock on the previous day, or at One o'clock on Saturdays, shall be liable. Should, however, undue delay in passing the Ticket be proved, the Member causing such delay will be held responsible. See pp. 71, 79, 82, 83. 85. Stock bought for a specified day, and not then de- Buying-in. livered, may be bought in on the following day at Eleven o'clock, and the Member causing the default shall pay any -pine. loss incurred, and also in the case of English and India Stocks dealt in for the Settling-day one-eighth per cent, for the non-delivery of the Stock. This fine shall attach to all Stock not delivered whether it shall have been bought-in or not. See pp. 80, 82, 83. 86. Stock receipts must be delivered by Half-past Three Time for o'clock ; but if a deliverer elect (under Rule 69) to deliver delivery of a Stock receipt to the Member with whom he has dealt Stcck (such Member not being the issuer of the Ticket) he shall recei P ts - deliver such receipt by a Quarter-past Three o'clock. 270 APPENDIX. Bearer Securities. Borrowed Stock. Loans on Stock. Dividend allowed. Limit as to number of transfers. Fixing inaking-up prices. Stock receipts must be delivered by half-past Twelve o'clock on Saturdays. English and India Government, and Corporation Securi- ties to Bearer must be delivered before Three o'clock, or before Twelve o'clock on Saturdays. See p. 79. 87. When Stock is borrowed without any stipulation as to its return, the borrower or lender may be called upon to deliver or take it on the following day, whether a regular Transfer-day or not. 88. In cases of Loans on the deposit of Stock, when the striking of the balances for dividend takes place before repayment of the Loan, the lender shall allow the dividend, deducting interest thereon till the day of payment of, and at the same rate as, the Loan. 89. Purchasers of Bank Stock may require, at the seller's expense, as many transfers as there are even thousand pounds Stock in the sum bargained for. 90. The Clerk of the House shall fix the making-up prices, by taking the average price between Eleven and One o'clock on each of the two days preceding the Account, and in the case of English, India and Corporation Stocks between Eleven and a Quarter before One o'clock on the Settling-day ; and no making-up shall be binding unless at such fixed prices. See p. 61. Bargains when no time is specified. Dealing for future Accounts. Offers to buy or sell. RULES APPLICABLE TO SECURITIES DELIVERABLE BY DEED OF TRANSFER. 91. Bargains in Stocks and Shares, when no time is specified, shall be considered as made for the existing Account ; but those made after One o'clock on the first Making-up day, shall, unless otherwise specified, be for the ensuing Account. See p. 55. 92. Any claim arising from a bargain effected for a period beyond the ensuing two Accounts will not be allowed to rank against a Defaulter's estate until all other Creditors have been paid in full. See pp. 56, 94. 93. An offer to buy or sell an amount of Shares or Stock at a price named, is binding as to any part thereof that may be a marketable quantity ; and an offer to buy or sell Shares or Stock, when no amount is named, is binding to the amount of 1,000 stock, or to the amount of Eifty Shares. If, however, the market value of the SECURITIES DELIVERABLE BY DEED OF TRANSFER. 271 Shares is above 15 each, then an offer is binding only to the extent of 10 Shares, and if the market value is not over 1 each., an offer is binding to the extent of 100 Shares. See p. 52. 94. The Seller of Shares or Stock is responsible for the Responsi- genuineness and regularity of all documents delivered, and bility of Seller for such dividends as may be received, until reasonable io r regularity time has been allowed to the transferree to execute and an( j f or duly lodge such documents for verification and registra- dividend, tion. When an official Certificate of registration of such Disputed Shares or Stock has been issued, the Committee will not title after (unless bad faith is alleged against the Seller) take cogni- registration, zance of any subsequent dispute as to title, until the legal issue has been decided, the reasonable expenses of which legal proceedings shall be borne by the Seller. See pp. 33, 43, 81, 121, 167, 168. 95. The Committee will not (except under special cir- Transfers in cumstances) interfere in any question arising from the blank, delivery of Shares, Stock, Bonds or Debentures by transfer in blank. 96. The Buyer who takes up Securities deliverable by Mode of pro- deed of transfer shall, before Twelve o'clock on the Ticket- cedure on day, or in the case of Securities dealt in in the Mining Ticket-days. Markets, before Two o'clock on the preceding day, issue a Ticket, with his own name as payer of the purchase-money, which Ticket shall contain the amount and denomination Tickets to of the Stock or Security to be transferred ; the name, contain full address and description of the transferee in full ; the price, particular 8 - the date and the name of the Member to whom the Ticket is issued. Each intermediate Seller, in succession, to whom such Ticket shall be passed, shall endorse thereon the Endorse- name of his Seller. ment. All Tickets representing Stock or Shares which, at the Tickets for time, are subject to arrangement by the Settlement De- Stocks partment, shall be passed through the accounts at the arranged Making-up Price of the first Making-up day, and the g Jj 16 t Stock or Shares paid for at that price ; but the considera- Department, tion money in the deed must be at the price on the Ticket. A Member receiving a ticket from the issuer after Twelve Notification o'clock on the Ticket-day, or for Securities dealt in in the of Time of Mining Markets after Two o'clock on the preceding day, passing- shall note the fact on the back of the Ticket ; and a Member receiving a Ticket after Three o'clock on the Ticket-day, or for Securities dealt in in the Mining Markets after Six o'clock on the day before the Ticket-day, or at any time on 272 APPENDIX. Splitting Tickets. Time for Claiming. Selling-out. Time for com- mencement of passing. Time for leaving Tickets at offices. Shares con- solidated into Stock. Antedated or undated Tickets. any subsequent day, shall mark the exact time at which such Ticket is received. It is also required that the holder of a Ticket at 1 o'clock 1.30 2 and 2.30 ,, on the Ticket-day, or for Securities dealt in in the Mining Markets at Two o'clock and at every half -hour up to 5.30 o'clock on the day before the Ticket- day, shall endorse such times on the back of the Ticket. Members omitting to note the times thus fixed may become liable for losses occasioned by selling-out in case undue delay is proved under the provisions of Eules 105 and 106. A Member splitting a Ticket shall pay any increased expense caused by such splitting, and shall retain the Original Ticket. Split Tickets must bear the name of the issuer of the Original Ticket. No claim for loss on a Split Ticket shall be valid unless made by the Original Claimant within Three Months after the date of the Ticket, but the Member splitting the Ticket shall be liable to intermediate Claimants for a period of Pour Months. The liability of Members to the Settlement Department for Splits collected by the Department shall extend for a period of Six Months from the date of the Ticket. A Member failing to keep the Original Ticket will be required to trace it in case of selling-out. The passing of Tickets shall commence at Ten o'clock. Tickets may be left at the office of the Seller up to Twelve o'clock on Ticket-days and for Securities dealt in in the Mining Markets up to Two o'clock on the preceding day. After these hours all Tickets must be passed in the Settlement Rooms. Tickets may be issued and passed on the day before the Ticket-day, but the buying-in upon Tickets so issued shall not be allowed until the Eleventh day after the Ticket- day. See pp. 70, 71, 72. 97. When shares have been, converted into consolidated Stock and are so quoted in the Official List, Buyers are required to pass Tickets for Stock, and not for Shares. 98. A Member not refusing an Antedated Ticket, when tendered as such, takes it with all its liabilities ; but if it be passed as an ordinary Ticket, the liabilities remain with the Member putting such Ticket again into circulation; and any Member holding an undated Ticket shall not be SECURITIES DELIVERABLE BY DEED OF TRANSFER. 273 liable for any loss arising from the Shares or Stock having been bought in, unless such Ticket has been Seven days in his possession. 99. A Member who makes an alteration in, or impro- Alteration or perly detains a Ticket, shall make good any loss that may detention of occur thereby. Tickets. 100. The deliverer shall cause the Shares or Stock to be Prices marked transferred at the price 'marked upon the Ticket ; but no on Ticket. Member shall be compelled to take a Ticket at a price not quoted in the Official List during the Account, unless the bargain represented by such Ticket shall have been made within the two preceding Accounts. See pp. 79, 165. 101. The deliverer may, previous to delivery, pay any call Tending calls. made on registered Shares, although not due, and claim the amount of the issuer of the Ticket. See p. 80. 102. The Buyer of Shares or Stock shall pay the ad Payment of valorem duty and registration fee, and shall state on the stamps. Ticket the amounts in which he may desire to have the Shares or Stock transferred (provided no such amounts require a higher stamp than 50). In cases of Loans the borrower shall pay the nominal stamps on consideration stamps of Ten shillings, the registration fees, Loans. and the mortgage stamp. 103. The Buyer shall, in the event of his Ticket being Portions to split, pay for any portion of Shares or Stock which may be paid for. be presented, provided the number be not less than Ten Shares, or the value less than 200. See p. 72. 104. The Buyer of Shares or Stock may refuse to pay Coupons or for a transfer deed unaccompanied by Coupons or Certi- Certificates ficates, unless it be officially certified thereon that the J itb . transfer Coupons or Certificates are at the office of the company. !e ' But if the transfer deed be perfect in all other respects, the Shares or Stock must not be bought in until reasonable Division time has been allowed to the Seller to obtain the verifica- Coupons, tion required. If the Seller have a larger Coupon than the amount of Stock conveyed, or only one Coupon repre- senting Stock conveyed by two or more transfer deeds, the Coupon may be deposited with the Secretary of the Share TO be certified and Loan Department of The Stock Exchange, who shall by Secretary forward it to the office of the company, and certify to that of Share and effect on the transfer deeds, which shall then be a valid delivery. No person is to look to the Managers or Com- mittee of The Stock Exchange, as being liable for the due or accurate performance of those duties, the Managers and 274 APPENDIX. Selling-out. Release of Intermedi- aries. Selling-out Mining Securities. Committee holding themselves, and being held, entirely irresponsible in respect of the execution, or of any mis- execution, or non-execution, of the duties in question. See pp. 31, 35, 79, 162. 105. The deliverer of Shares or Stock who shall not receive a Ticket by half -past Two o'clock on the Ticket- day, may sell out such Securities up to Three o'clock ; but if the Security be one of those undertaken by the Settle- ment Department, written notice stating from whom a Ticket is required must be given to the Department at least one hour before such selHng-out. This notice must be given by all Members wishing to sell out Securities undertaken by the Department, and in no case shall such Securities be sold out before Twelve o'clock. If a Ticket, except for Securities dealt in in the Mining Markets, shall not have been regularly issued before Twelve o'clock, the issuer thereof shall be responsible for any loss occasioned by such selling-out. Should, however, a Ticket have been regularly put into circulation, the holder thereof at Two o'clock shall be responsible for any selling-out on the Ticket-day. If the selling-out take place on the Pay-day, the holder of the Ticket at Three o'clock on the Ticket-day shall be liable ; unless such Ticket was in the Settlement Department at Three o'clock, in which case the holder of such Ticket at Five o'clock shall be liable. In case of selling-out on any subsequent day, the holder of the Ticket at Three o'clock on the pre- vious day, or at One o'clock on Saturdays, shall be liable, unless he can prove undue delay in passing the Ticket. Should the deliverer allow Two clear days from Three o'clock on the Ticket-day to elapse without availing him- self of his right to sell out, his Buyer shall be relieved from all loss in cases where the Ticket has not been passed in consequence of the public declaration of any Member as a Defaulter. If a Seller does not deliver Shares or Stock within Thirteen clear days from the date of the Ticket, the intermediate Buyer from whom he received the Ticket shall be released, and the issuer thereof shall alone remain responsible for the payment of the purchase- money. See pp. 80, 82, 83. 106. The deliverer of Shares or Stock dealt in in the Mining Markets, who shall not receive a Ticket by Half- past Two o'clock on the Ticket-day, may sell out such Securities up to Three o'clock ; but if the Security be one of those undertaken by the Settlement Department, written SECURITIES DELIVERABLE BY DEED OF TRANSFER. 275 notice stating from whom a Ticket is required must be given to the Department at least one hour before such selling-out. This notice must be given by all Members wishing to sell out Securities undertaken by the Department and in no case shall such Securities be sold out before Twelve o'clock. If a Ticket for such Securities shall not have been regularly issued before Two o'clock on the day before the Ticket-day, the issuer thereof shall be responsible for any loss occasioned by such selling-out. Should, however, a Ticket have been regularly put into circulation, the holder thereof at Two o'clock on the Ticket-day shall be respon- sible for any selling-out on that day ; and the holder of the Ticket at Six o'clock on the day before the Ticket-day shall be responsible for any selling-out on the Pay-day, unless the Ticket was in the Settlement Department at Six o'clock on the day before the Ticket-day, in which case the holder of the Ticket at One o'clock on the Ticket- day shall be liable. In the case of selling-out on any day after the Pay-day, the holder of the Ticket at Three o'clock on the previous day, or One o'clock on Saturdays, shall be liable, unless he can prove undue delay in passing the ticket. Should the deliverer allow Two clear days from Three o'clock on the Ticket-day to elapse without availing himself of his right to sell out, his Buyer shall be released from all Release of loss in cases where the Ticket has not been passed in con- Intermedi- sequence of the public declaration of any Member as a a ies- Defaulter. If a Seller does not deliver Shares or Stock within fourteen clear days from the date of the Ticket, the intermediate Buyer from whom he received the Ticket shall be released, and the issuer thereof shall alone remain responsible for the payment of the purchase-money. See pp. 82, 83. 107. When Shares or Stock are sold out, if a Ticket be Tickets for not given within half-an-hour after the time of sale, the so ^ ut transfer may be made into the name of the Buyer. See sliare8 - p. 83. 108. If Shares or Stock are not delivered within Ten Buying-in. days, the issuer of the Ticket may buy in the same against the Seller at or after Half-past One o'clock on the Eleventh or any subsequent day after the date of the Ticket, or, in the case of Mining Securities, for which Tickets have been issued on the day before the Ticket-day, on the Twelfth or any subsequent day after the date of the Ticket. s. u 276 APPENDIX. Notice of Buying-in. Non-delivery of boughfc-in Stock, &c. Time for Buy ing -in. Release of Intermedi- aries. Right to new Shares. In the case of Companies which prepare their own transfers, Shares or Stock may be bought-in on the Eleventh, or any subsequent day after the earliest date on which a transfer can be procured. One hour's public notice of such buying-in must be posted in The Stock Exchange ; the notices to be posted not later than Half-past Twelve o'clock. On Saturdays notices shall be posted by Half-past Eleven o'clock, and no buying-in shall take place before a Quarter-past Twelve o'clock. The name into which the Shares or Stock are to be transferred must be stated in the order to buy-in, if required by the Manager of the Buying-in. and Selling out Department. The loss occasioned by such buying-in shall be borne by the ultimate Seller, unless he can prove that there has been undue delay in the passing of the Ticket on the part of any Member, who shall in that case be liable. Shares or Stock thus bought-in and not delivered by One o'clock on the following day, or by Twelve o'clock on Saturdays, may be re-purchased for immediate delivery without further notice, and any loss shall be paid by the Member causing such re-purchase. In case the Official shall not succeed in executing an order to buy-in, the notice of such buying-in shall remain on the General Notice Board, and the Official may buy-in Shares or Stock, if not delivered, on any subsequent day without further notice, but not before Two o'clock, or on Saturdays before a Quarter-past Twelve o'clock. See pp. 77, 79, 82, 154. 109. The issuer of a Ticket who shall allow Thirteen, or, in the case of Mining Securities for which Tickets have been issued on the day before the Ticket-day, Fourteen clear days from the date of his Ticket, or, in the case of Companies which prepare their own transfers, Thirteen clear days after the earliest day a transfer can be pro- cured, to elapse without buying-in or attempting to buy -in Shares or Stock, shall release his Seller from all liability in respect of the non-delivery of the Securities, unless he shall have waived his right to buy-in at the request, or with the consent of his Seller ; and the holder of the Ticket shall alone remain responsible to such issuer for the delivery of the Securities. See p. 84. 109a. The liability of issuers and holders of Tickets is not affected by the fact that intermediaries have been released by lapse of time. 110. The Buyer is entitled to new Shares or Stock issued in right of old, provided that he specially claim the same SECURITIES DELIVERABLE BY DEED OF TRANSFER. 277 in writing from the Seller not later than Four o'clock (One o'clock on Saturdays) on the day preceding the latest day fixed for the receipt of applications. Claims should be Claims. entered as bargains, and as such be checked in the usual manner. Notwithstanding the provisions of the above Clause, Responsi- the Seller shall be responsible to the Buyer for the new billt 7- Shares or Stock, although claimed later than Four p.m. on the above-named day, if he be in possession of the same : and should he not be in possession of the new Shares or Stock he is bound to render every assistance to the Buyer in tracing the same. When practicable, claims are required to be settled by Letters of Letters of Eenunciation. No Member shall be required to Renuncia- accept Letters of Renunciation after Half-past Two (Twelve tlon o'clock on Saturdays) on the latest day fixed for the receipt of applications. Where no Eenunciation Letters are issued, all payments as and when required by the Company are to be advanced to the Seller by the Buyer, who may demand a receipt for the same, such payments being considered as for delivery of Stock open for the Special Settlement. If the new Shares or Stock cannot be obtained by Letters Fixing price of Eenunciation, the Secretary of the Share and Loan ^J^K" Department, subject to the approval of the Chairman or Deputy-Chairman or Two Members of the Committee for General Purposes shall fix a price at which the new Secu- rities may be temporarily settled and which may be deducted by the Buyer from the purchase money of the old Securities until the Special Settlement. The Committee will not entertain any dispute relating to Unchecked unchecked claims, unless brought before them within Ten Claims. days after the Special Settling-day. See pp. 46, 47. 111. On the day before the Ticket- day, and on the Making-up Ticket-day, the Clerk of the House shall, at Twelve P rices - o'clock, fix the Making-up prices by taking the then actual market prices, and no Making-up shall be binding unless at such fixed prices. A Making-up price shall also be fixed for Securities dealt in in the Mining Markets on the second day before the Ticket day, and when the Ticket day falls on a Tuesday, on the preceding Friday. In case of dispute as to the Making-up price, or of any omission in fixing the same, the Clerk of the House shall act upon the decision of Two Members of the Committee. See p. 61. 112. On the morning of the Settling-day all unsettled bargains shall be brought down and temporarily adjusted P ricea for u2 278 APPENDIX. unsettled accounts. Time for requiring payment. at the Making-up price of the Ticket-day, except bargains in Stocks and Shares, subject to arrangement by the Settlement Department, which shall be brought down and temporarily adjusted at the Making-up price of the day before the Ticket-day. See p. 82. 113. No Member shall be required to pay for Shares or Stock presented after Half -past Two o'clock; or after Twelve o'clock on Saturdays. If a deliverer elect to settle with his immediate buyer, under the provisions of Rule 69, he shall deliver his Secu- rities before Half-past Twelve o'clock, but Intermediaries on the trace are bound to pay their Sellers up to Two o'clock. Bargains when no time specified. Dealing for future ac- counts. Offers to buy or sell. American Bonds and Shares, amount deli- verable. Soiling-out. RULES APPLICABLE TO SECURITIES TO BEARER. 114. Bargains, when no time is specified, shall be con- sidered as made for the existing Account ; but those made after One o'clock on the day before the Ticket-day, shall, unless otherwise specified, be for the ensuing Account. See p. 55. 115. Any claim arising from a bargain effected for a period beyond the ensuing two Accounts will not be allowed to rank against a Defaulter's estate until all other Creditors have been paid in full. See pp. 56, 94. 116. An offer to buy or sell a sum of Stock, at a price named, is binding as to any part thereof, not less than the under-mentioned sums, and divisible by the same, viz., 1,000 Stock or Scrip. Fes. 750 French Rentes. 10 Shares. An offer to buy or sell United States Bonds or Shares, when no amount is named, is binding to the amount of $5,000 Bonds or 100 Shares. See p. 52. 117. No Member shall be required to accept the delivery of a Certificate of American Shares of a larger amount than 10 Shares of $100 each nominal capital, or 20 Shares of $50 each, nor an American Bond of a larger amount than $1,000, except upon special contract. Smaller Certificates or Bonds must be of such denomina- tions as to be deliverable in the above amounts. 118. The Seller of Securities for a particular day, which the Buyer is not prepared to pay for by Half-past Two o'clock on that day (or Twelve o'clock on Saturdays), may SECURITIES TO BEARER. 279 sell out the same, and claim of the Buyer any loss incurred. See pp. 82, 83. 119. On the Ticket-day between Ten and One o'clock, Tickets shall Tickets shall be passed without any price thereon, and the be passed, accounts made up therewith are to be settled at the Making-up price of the day before. Tickets must bear distinctive numbers and be for the Tickets must following 1 amounts, viz. : bear numbers. 1,000 Stock, or multiples of 1,000 up to 5,000. Amounts 1,000 Italian Stock, or multiples thereof, up to deliverable. 5,000. Also 800, or multiples thereof, up to 4,800. $5,000 American Stocks, or multiples thereof, up to $25,000. Fes. 1,500 French 3 per cent. Rentes, or multiples thereof, up to fcs. 6,000. 10 Shares, or multiples thereof, up to 100. Tickets for 500 Stock may be passed for bargains or balances of that amount. Smaller amounts must be settled without Tickets. Tickets shall not be issued later than Half -past Twelve Time of issue, on the Ticket- day. Tickets shall not be split, except in the Settlement Splitting. Department in cases where the Sub-Committee appointed to control that Department may consider it necessary. Every Member is required to endorse on the Ticket the To te name of the Member to whom it is passed. endorsed. On the Settling-day, and on the day after the Settling- Time for corn- day, the delivery of Securities shall commence at Ten mencement O'clock. of delivery. Sellers shall accept Tickets. If a deliverer elect to settle with his immediate Buyer, under the provisions of Rule 69, he shall deliver his Securities before Half-past Twelve o'clock, but Intermediaries on the trace are bound to pay their Sellers up to Two o'clock. The holder of Tickets passed under this Pule, and of Tickets passed by the Settlement Department, may deliver Securities up to Two o'clock on Settling-days. A Member not issuing a Ticket shall be required to pay for Stock up to Half-past Two o'clock. Buyers shall pay for such portion of Securities as may Portions to be delivered within the prescribed times. See pp. 70, 71. be paid for. 120. A Member shall be required to pay for Securities Time for presented until half-past Two o'clock on any day other requiring than Settling-days. On Saturdays, he shall not be re- quired to pay for Securities after Twelve o'clock. APPENDIX. Buying-in. Notice. Noa-lelivery of Stock bought in. Neglecting to take number?. 121. Securities bought for any period, except the Set- tling-day, which shall not be delivered by Half-past Two o'clock, or by Twelve o'clock on Saturdays, may be bought in on the same, or any subsequent day, and any loss occasioned by such re-purchase shall be borne by the Seller. But Securities bought for the Settling-day, and not delivered by Half-past Two o'clock, may be bought in on the following, or any subsequent day, after one hour's notice has been posted in the market announcing the intended purchase ; the notices to be posted not later than Half-past Twelve o'clock. The buying-in shall not take place before Half-past One o'clock, nor before Quarter- past Twelve o'clock on Saturdays, on which days public notice shall be posted by Half-past Eleven o'clock. The loss shall be borne by the Member who shall not have delivered the Shares or Stock by Half-past Two o'clock on the previous day, or by One o'clock on Saturdays. Stock thus bought in, and not delivered by One o'clock on the following day, or by Twelve o'clock on Saturdays, may be re-purchased for immediate delivery without fur- ther notice, and any loss shall be paid by the Member causing such re-purchase. In case the Official shall not succeed in executing an order to buy in, the notice of such buying- in shall remain on the General Notice Board, and the Official may buy in such Stock, if not delivered, on any subsequent day without further notice, but not before Two o'clock, or on Saturdays before a Quarter-past Twelve o'clock. A Member neglecting to take the numbers of Securities delivered after time, shall be required to trace out the Member responsible for the loss. See pp. 80, 82, 83. Intermedi- aries. Limit of time 122. A Member who shall allow Two clear days to elapse for buying-in. w ithout availing himself of his right to buy-in, or without Release of attempting to buy-in Securities, releases his Seller from any loss in consequence of the public declaration of any Member as a Defaulter, unless he shall have waived such right at the request, or with the consent, of the Seller. The holder of a Ticket who shall allow two clear days to elapse without delivering the Stock releases his Buyer from any loss in consequence of the declaration of any Member as a Defaulter. See pp. 80, 84. Making-up prices. 123. The Clerk of the House shall, at Twelve o'clock on each of the two days preceding each Settling, fix the Making-up prices of all Securities by taking the then SECURITIES TO BEAKER. 281 actual market prices ; and no Making-up shall be binding unless at such fixed prices. See p. 61. 124. On Settling-days, all unsettled bargains shall be Adjustment brought down and temporarily adjusted, at prices to be of Unsettled fixed by the Clerk of the House at Half-past Two o'clock, Accounts - and the differences shall be paid in the usual manner. See p. 82. 125. Bargains in Exchequer Bonds and in Stock Certifi- Exchequer cates are for Bonds and Stock Certificates not filled up to Bonds, &c. order. 126. Bargains in French Rentes, unless otherwise French specified, shall be settled in Certificates to Bearer, and R entes - at a fixed exchange of fcs. 25 per pound sterling. 127. Foreign Coupons sold at the exchange of the day, Foreign and not paid, are returnable with all reasonable expenses. Coupons when return- 128. The Buyer of Bonds or other Securities subject to able, periodical drawing shall not be entitled to claim delivery Subject to thereof previous to the day for which they were bought. Drawing. Bargains must be settled in Securities which have not been drawn. In case of the erroneous delivery of any drawn securities, Brawn Bond.*, the Buyer (on receipt of undrawn securities, and on allow- ance being made for any drawing or dividend of which he may have lost the benefit) shall deliver such Securities back to the person who held them at the time of the drawing, or shall pay to him any proceeds received from such drawing, provided the said Securities or the proceeds thereof be traced to, and remain in the possession and under the control of such Buyer, all intermediate Members being released from liability. No claim by the Seller in respect of the erroneous delivery of Drawn Securities will be entertained by the Committee unless made within nine calendar months. 129. The Buyer is entitled to new Securities issued in Buyer right of old, provided that within reasonable time, he entitled to specially claim the same in writing from the Seller, who jV 3 ^ Securi ' may after due notice require the Buyer to complete the bargain in old Securities. Claims should be entered as bargains, and as such be checked in the usual manner. The Secretary of the Share and Loan Department, sub- ject to the approval of the Chairman or Deputy-Chairman or Two Members of the Committee for General Purposes, shall fix a price at which the new Securities may be tem- porarily settled, aud which may be deducted by the Buyer from the purchase money of the old Securities, until the Special Settlement. 282 APPENDIX. Genuineness of Securities. Stopped Bonds. Torn or damaged Bonds. Irregular Coupons. Railway Debentures. Colonial and Foreign Railway Debentures. The Committee will not entertain any dispute relating to unchecked claims, unless brought before them within Ten days after the Special Settling-day. See pp. 46, 48. 130. The deliverer is responsible for the genuineness of Securities delivered, and in case of his death, failure, or retirement from the Stock Exchange, such responsibility shall attach to each Member in succession, through whose account the Ticket for such Securities shall have passed. The deliverer of Securities on Tickets is required to apportion such Securities to each Ticket at the time of delivery, and takers of Securities, in order to secure their right under this Rule, shall keep such Tickets and the numbers of the Securities to which they were respectively apportioned, or, in the case of Settlement Department Tickets, the numbers of such Tickets. French and Egyptian Securities to Bearer, which, under French or Egyptian Law, have been officially notified as stopped, are returnable to the deliverer. See pp. 81, 168. 131. Every Bond or Scrip Share is to be considered per- fect, unless it be much torn or damaged, or a material part of the wording be obliterated. The Committee will not take cognisance of any complaint in respect of Bonds or Shares alleged to have been delivered in a damaged condition, or deficient in, or with irregular, Coupons, should such Bonds or Shares be detained by the Buyer more than Eight days after the delivery, unless it can be proved that the Member passing them was aware of their being im- perfect. The Committee will not take cognisance of any complaint in respect of the irregularity in the endorsement of Ameri- can Share Certificates, should such certificates be detained by the Buyer more than Three Months after delivery, unless it can be proved that the Member passing them was aware of the irregularity. 132. Bonds and Debentures of railways in Great Britain, Ireland, and the East Indies, shall be dealt in so that the accrued interest, up to the day for which the bargain was done, be paid by the Buyer ; but bargains in Bonds and Debentures of Colonial and Foreign railways shall include the accrued interest in the price. See pp. 45, 46. SPECIAL SETTLING-DAYS. 133. Bargains in the Scrip or Bonds of a new Loan, or the Shares or other Securities of a new Company shall be ana bnares, nrmeirloT.^ QD Tv>orl 4U S*K:^~\ ^4.4-1. o rr Bargains in new Loans &c. considered as made for Special Settlement. See p. 7. SPECIAL SETTLING-DAYS. 283 Claims arising from bargains for a date previous to that fixed for the Special Settlement will not be admitted against a Defaulter's estate until all other claims have been paid in full. 134. The Secretary of the Share and Loan Department Appoint- shall give three days' public notice of any application for ment of a Special Settling-day in the Scrip or Bonds of a new Special Loan previously to its being submitted to the Committee, ^" a ^* who will appoint a Special Settling-day, provided that sufficient Scrip or Bonds are ready for delivery, as vouched Documents, for by a Certificate verified by the Statutory Declaration of the Contractors or Agents stating the amount allotted ; and that the Scrip and Bonds are in reasonable amounts. See p. 8. 135. Bargains in Foreign Loans which are officially Settling-day quoted in the country to which they belong shall be for * n Foreign the Ordinary Settlement. See p. 8. Loans 136. The Secretary of the Share and Loan Department Special Set- shall give three days' public notice of any application for tHng-days in a Special Settling-day in the Shares or other Securities of Shares of New a new Company previously to such application being sub- ^ om P ame8 - mitted to the Committee, who will appoint a Special Settling-day provided that sufficient Scrip or Shares are ready for delivery. * The Committee will not fix a Special Settling-day for bargains in Shares or Securities issued to the Vendors, credited as fully or partly paid, until six months after the date fixed for the Special Settlement in the Shares or Securities subscribed for by the public. See p. 8. OFFICIAL QUOTATIONS. 137. The Committee may order the Quotation of the Quotation Scrip or Bonds of any Loan, the dividends of which are * Scrip or payable in this country, provided that the application, of Bonds of ^i- 7 . , ,, -, , ,f. ' J .. , , . 1L . New Loans. which three days public notice must be given, is accom- panied by the Prospectus, by notarial copies or translations, or other satisfactory evidence of the powers under which the Loan is contracted ; that the Loan has been publicly negotiated by tender, contract, or otherwise; that the * This paragraph does not necessarily apply to reorganisations or amalgamations of existing Companies, or to cases where no Public Shares are issued, or to cases where the Vendors take the whole of the Shares issued for cash. 284 APPENDIX. Bonds specify the amount and conditions of the Loan, the powers under which it has been contracted, and the num- bers and denominations of the Bonds issued, and that they bear the autographic signature of the Contractor or pro- perly authorised Agent. Bonds will not be admitted to Quotation until a specimen has been submitted to the Committee. See pp. 9, 10. Quotation of 138. Bonds, the dividends of which are payable abroad, Bonds, with may be quoted upon satisfactory proof of the amount dividend pny- created and i ssue d, and of the Official Quotation in the able abroad. , . ' , country where issued. Quotation of New Com- panies. Magnitude and impor- tance. Notice. Documents. Statutory Declaration. 139. The Committee may order the Quotation in the Official List of any class of the Shares or Securities of a new Company, provided (I.) That the Company is of sufficient magnitude and importance : (II.) That three days' public notice of the application has been given : (III.) That the following documents have been deposited with the Secretary of the Share and Loan De- partment : (a) The Prospectus ; (6) The Certificate of Incorporation, Act of Parliament, or other similar document ; (e) The Certificate that the Company is entitled to commence business ; (d~) The Articles of Association ; (e) The original applications for Shares or Securities ; (f) The Allotment Book for Shares or Secu- rities, with a Summary signed by the Chairman and Secretary of the Company ; (g) A copy of the Letter of Allotment for Shares or Securities ; (A) A specimen of the Certificate or Bond ; (f) Certified copies of Contracts and Agree- ments ; (k) Notarially certified translations of Con- cessions, Deeds and Agreements; (/) A Certificate, verified by the statutory declaration of the Chairman and Secretary, stating : (1) That the Prospectus complies with the provisions of the Companies Acts ; (2) That all documents required by the Com- OFFICIAL QUOTATIONS. 285 parties Acts have been duly filed, and the dates of filing the same ; (3) The number of Shares and amount of Securities applied for by and uncondition- ally allotted to the public, and the distinc- tive numbers of the same ; (4) The number of Shares and amount of Securities allotted in whole or in part for a consideration other than cash and the distinctive numbers of the same ; (5) The amount of deposits paid ; (6) That such deposits are absolutely free from any lien ; (7) That the Certificates or Bonds are ready for delivery ; (8) That the purchase of the properties has been completed, and the purchase-money paid; (9) That no impediment exists to the settle- ment of the account ; (m) The Bankers' Pass Book ; Documents. () A Certificate from, the Bankers, stating the amount of deposits received ; (0) In the case of an issue of Debentures or Debentures. Debenture Stock (1) The Trust Deed, if any; (2) The Official Certificate of the Registration Documents. of the mortgage or charge ; (IV.) That the Prospectus Prospectus, (a) Shall have been publicly advertised ; (6) Agrees substantially with the Act of Parliament or Articles of Association ; (c) Provides (1) For the issue of not less than one-half of the Authorised Capital ; (2) For the payment of ten per cent, upon the amount subscribed ; ( Criminal Cases. With the Statutes, Precedents of Indictments, &c. Twenty-third Edition. By WILLIAM F. CEAIES and GUY STEPHEN- BON, Esqrs., Barristers-at-Law. Demy 8vo. 1905. 11. 15*. " The criminal lawyer's indispensable." Law Journal. " This book is quite indispensable to everyone engaged in the practice of the- Criminal Law." Solicitor?' Journal. " An edition which bears every evidence of a most thorough and painstaking care to bring it down to date, and to render it as indispensable and reliable as it has been in the past. The index is more complete than ever." Law Times. Bowen-Rowlands on Criminal Proceedings on Indictment and Information (in England and Wales). By E. BOWEN-ROWLANDS, Esq., Barrister- at-Law. Demy 8vo. 1904. 12*. 6d. " An invaluable source of information and a safe guide." Pall Mall Gazette. Chitty's Collection of Statutes relating to Criminal Law. (Re- printed from "Chitty's Statutes.") With an Introduction and Index. By W. F. CEAIES, Esq., Barrister-at-Law. Royal 8vo. 1894. 10. Disney and GundiVs Criminal Law. A Sketch of its Principles and Practice. By HENBY W. DISNEY and HABOLD GUNDEY, Esqrs., Barristers-at-Law. Demy 8vo. 1896. 7*. 6rf. Kenny's Outlines of Criminal Law. 2ndEd. DemySvo. 1904. 10*. Kenny's Selection of Cases Illustrative of English Criminal Law. Demy 8vo. 1901. 12s. 6d. Kershaw's Brief Aids to Criminal Law. With Notes on the Pro- cedure and Evidence. By HILTON KEESHAW, Esq., Barrister-at- Law. Royal 12mo. 1897. 3. Roscoe's Digest of the Law of Evidence in Criminal Cases. Twelfth Edition. By A. P. PEBOEVAL KEEP, Esq., Barrister-at- Law. Demy 8vo. 1898. 11. 11*. 6d. Russell's Treatise on Crimes and Misdemeanors. Sixth Edit, By HOEACE SMITH, Esq., Metropolitan Police Magistrate, and A. P. PEECEVAL KEEP, Esq. 3vols. Roy. 8vo. 1896. 61. 15*. 6d. "No library can be said to be complete without Eussell on Crimes." Law Times. " Indispensable in every Court of criminal justice." The Times. Shirley's Sketch of the Criminal Law. Second Edition. ByCnABLES STEPHEN HUNTEE, Esq., Barrister-at-Law. DemySvo. 1889. 7*. 6d. Warburton. Vide "Leading Cases." CUSTOMS. Highmore's Customs Laws: includingthe Customs Consolidation Act, 1876, with the Enactments amending and extending that Act, and the present Customs Tariff for Great Britain and Ireland ; also the Customs Laws and Tariff for the Isle of Man - with other Enactments affecting the Customs, and Notes of the Decided Cases. By NATHANIEL J. HIOHMOEE, Esq., of the Middle Temple, Barrister-at-Law, Solicitor for His Majesty's Customs* Demy 8vo. 1906. 6*. DEATH DUTI ES. Freeth's Acts relating to the Estate Duty and other Death Duties, with an Appendix containing the Rules Regulating Proceedings in England, Scotland and Ireland in Appeals under the Acts and a List of the Estate Duty Forms, with copies of some which are only issued on Special Application. Third Edition. By EVELYN FEEETH, Esq., Registrar of Estate Duties for Ireland. Demy 8vo. 1901. 12*. 6rf. " The official position of the Author renders his opinion on questions of proce- dure of great value, and we think that this book will be found very useful to solicitors who have to prepare accounts for duty." Solicitors' Journal. Harman's Finance Act, 1894, and the Acts amending the same so far as they relate to the Death Duties, and more espe- cially to Estate Duty and Settlement Estate Duty. With an Introduction and Notes, and an Appendix. By J. E. HAEMAN, Esq., Barrister-at-Law. Second Edition. Roy. 12mo. 1903. 6s " Can be recommended as a reliable guide." Law Quarterly Review. *. All ttandard Law Works are kept in Stock, in late calf and other bindings 119 & 120, CHANCERY LANE, LONDON, W.O. 9 DEBENTURES AND DEBENTURE STOCK. Palmer. Vide " Company Law." DECISIONS OF SIR GEORGE JESSEL Peter's Analysis and Digest of the Decisions of Sir George Jessel ; with. Notes, &c. By APSLEY PETEB PKTEE, Solicitor. Demy 8vo. 1883. 16*. DIARY. Lawyers' Companion (The) and Diary, and London and Provincial Law Directory for T906. For the use of the Legal Profession, Public Companies, Justices, Merchants, Estate Agents, Auctioneers, &c., &c. Edited by EDWIN LAYMAN, Esq., Barrister-at- Law ; and contains Tables of Costs in the High Court of Judicature and County Court, &c. ; Monthly Diary of County, Local Government, and Parish Business ; Oaths in Supreme Court ; Summary of Sta- tutes of 1905 ; Alphabetical Index to the Practical Statutes since 1820 ; Schedule of Stamp Duties ; Legal Time, Interest, Discount, Income, Wages and other Tables ; the New Death Duties ; and a variety of matters of practical utility : together with a complete List of the English Bar, and London and Country Solicitors, with date of admission and appointments. PUBLISHED ANNUALLY. Sixtieth Issue. 1906. Issued in the following forms, octavo size, strongly bound in cloth : 1. Two days on a page, plain 5.0rf. 2. The above, INTEELEAVED with plain paper . . . .70 3. Two days on a page, ruled, with or without money columns . 5 6 4. The above, with money columns, INTEBLBAVED with plain paper 8 6. "Whole page for each day, plain . . . . . .76 6. The above, INTKELBAVBD with plain paper . . . .96 7. Whole page for each day, ruled, with or without money columns 8 6 8. The above, INTERLEAVED with plain paper . . . 106 9. Three days on a page, ruled blue lines, without money columns . 3 6 The Diary contain* memoranda of Legal Business throughout the Tear, with an Index for ready reference. " The legal Whitaker." Saturday Review. " The amount of information packed within the covers of this well-known, book of reference is almost incredible. In addition to the Diary, it contains nearly 800 pages of closely printed matter, none of which could be omitted without, perhaps, detracting from the usefulness of the book. The publishers seem to have made it their aim to include in the Companion every item of information which the most exacting lawyer could reasonably expect to find in its pages, and it may safely be said that no practising solicitor, who has experienced the luxury of having it at his elbow, will ever be likely to try to do without it." Law Journal. DICTIONARY. Stroud's Judicial Dictionary, or Interpreter of Words and Phrases by the British Judges and Parliament. Second Edition. By F. STEOTTD, Esq., Barrister-at-Law. 3 vols. Hoy. 8vo. 1903. 41. 4s. " Must find a place in every law library. It is difficult to exaggerate its use- fulness. ... is invaluable, not only as a labour-saving machine, but as a real contribution to legal literature. ... a standard classic of the law." Law Journal. " An authoritative dictionary of the English language." Law Times. " This judicial dictionary is pre-eminently a ground from which may be ex- tracted suggestions of the greatest utility, not merely for the advocate in court, but also for the practitioner who has to advise." Solicitors' Journal. The Pocket Law Lexicon, Explaining Technical Words, Phrases and Maxims of the English, Scotch and Roman Law. Fourth Edition. By JOSEPH E. MOBEIS, Esq., Barrister-at-Law. 1905. 6s. 6d. "A wonderful little legal Dictionary." Indermaur's Law Student? Journal. Wharton's Law Lexicon, Forming an Epitome of the Law of Eng- land, and containing full Explanations of Technical Terms and Phrases, both Ancient and Modern, and Commercial, with selected Titles from the Civil, Scots and Indian Law. Tenth Edition. With a New Treatment of the Maxims. By J. M. LELY, Esq., Barrister-at-Law. Super-royal 8vo. 1902. 11. iKs. "An encyclopedia of the law." "The new edition seems to us to be very complete and perfect, and a copy of it should be procured by every practising solicitor without delay. A better value for his money in the law book market a practitioner could not, we are sure, get. Of the many books we have to refer to in our work no volume is, we believe, more often taken down from the shelf than ' Wharton.' " Law Notes. ** A II standard Law Works are kept in Stock, in law calf and other bindings. I 10 STEVENS AND SONS, LIMITED, DIGESTS. MEWS DIGEST OF ENGLISH CASE LAW. Containing the Reported Deciaions of the Superior Courts, and a Selection from those of the Irish Courts, to the end of 1897. (Being a New Edition of ' ' Fisher's Common Law Digest and Chitty ' s Equity Index . " ) Under the general Editorship of JOHN MEWS, Barrister-at-Law IGvols. Roy. 8vo. 20 (Sound in half calf, giU top, 3 net extra.) " A vast undertaking. . . . We have tested several parts of the work, with the result of confirming our impression aa to the accuracy of a work which is indis- pensable to lawyers." The Times. The Annual Digest from 1898 to 1905. By JOHN MEWS, Esq., Barrister-at-Law. Royal 8vo. each 15*. %* This Digest is also issued quarterly, each part being cumulative. Price to Subscribers, for the four parts payable in advance, net 17*. " The practice of the law without Mews' Annual would be almost an impos- sibility." Law Times. Mews' Digest of Cases relating to Criminal Law down to the end of 1897. By JOHN MEWS, Esq., Barrister-at-Law. Royal 8vo. 1898. II. 5s. Law Journal Quinquennial Digest, 1896-1900. An Analytical Digest of Cases Published in the Law Journal Reports, and the Law Reports, during the years 1896-1900, with references to the Statutes passed during the same period. By JAMES S. HENDEESON, Esq., Barrister-at-Law. 1901. II. 10*. Woods and Ritchie's Digest of Cases, Overruled, Approved, or otherwise specially considered in the English Courts to the end of 1902 : with Extracts from the Judgments dealing with the same. By W. A. G-. WOODS and J. RITCHIE, Esqrs., Barristers-at- Law. Being a New Edition of "Dale and Lehmann's Digest." 3 Vols. Royal 8vo. (In the press.) DISCOVERY. Bray's Digest of the Law of Discovery, with Practice Notes. By EDWABD BEAT, Esq., Barrister-at-Law. Demy 8vo. 1904. Net, 3*. DISTRESS. Oldham and Foster on the Law of Distress. A Treatise on the Law of Distress, with an Appendix of Forms, Table of Statutes, &c. Second Edition. By ABTHUB OLDHAM and A. LA TBOBEFOSTEB, Esqrs., Barristers- at-Law. Demy 8vo. 1889. 18*. DISTRICT COUNCILS. Chambers' Digest of the Law relating to District Councils, so far as regards the Constitution, Powers and Duties of such Councils (including Municipal Corporations) in the matter of Public Health and Local Government. Ninth Edition. By G-. F. CHAMBEBS, Esq., Barrister-at-Law. Royal 8vo. 1895. 10*. DIVORCE. Browne and Powles' Law and Practice in Divorce and Matrimonial Causes. Seventh Edition. By L. D. POWLES, Esq., Barrister-at-Law, Probate Registrar, Norwich. Demy 8vo. 1905. 17. 5*. "The practitioner's standard work on divorce practice." Law Quar. Bev. DOMESDAY BOOK AND BEYOND. Three Essays in the Early History of England. By Professor MAITLAND. 1897. 8vo. 15*. EASEMENTS. Goddard's Treatise on the Law of Easements. BY JOHN LETBOUBN GODDABD, Esq., Barrister-at-Law. Sixth Edition. Demy 8vo. 1904. 17. 5*. " We can cordially recommend the work to those of our readers in search of an up-to-date authority." Law Students' Journal. "Nowhere has the subject been treated so exhaustively, and, we may add, so scientifically, as by Mr. Goddard. We recommend it to the most careful study of the law student, as well as to the library of the practitioner." Law Times. Innes" Digest of the Law of Easements, Seventh Edition. By L. C. INNES, lately one of the Judges of Her Majesty's High Court of Judicature, Madras. Royal 12mo. 1903. 7*. 6d. "An accurate and compendious statement of the law of easements, and will consequently be of much use to students." Law Notes. " This presents the law in a series of clearly enunciated propositions, which are supported by examples taken in general from decided cases. The subject is one that readily lends itself to such treatment, and in Mr. lanes' hands it is skilfully developed." Solicitors' Journal. %* Att ttandardLaw Workt are kept in Stock, in law calf and other bindings. 119 & 120, CHANCERY LANE, LONDON, W.C. 11 E AS E M E N TS continued. Roscoe's Easement of Light. A Digest of the Law relating to the Easement of Light. With an Historical Introduction, and an Appendix containing Practical Hints for Architects and Surveyors, Observations on the Right to Air, Statutes, Forms and Plans. Fourth Edition. By EDWAKD STANLEY ROSCOE, Esq., Barrister-at-Law, Admiralty Registrar of the Supreme Court, Author of "A Digest of Building Cases," "Admiralty Practice," &c. Demy 8vo. 1904. 7*. Qd. " A most useful little work." Law Journal. " A clear and practical digest of the law." Law Times. " An accurate digest of the law." Law Notes. ECCLESIASTICAL LAW. Phillimore's Ecclesiastical Law of the Church of England. By the late Sir ROBKBT PHUJJMOBB, Bart. Second Edition, by his son Sir W. Q-. F. PHILIJMOEE, Bart., assisted by C. F. JEMMETT, Barrister-at-Law. 2 vols. Royal 8vo. 1895. Published at 51. 3s., reduced to, net, II. 5t. " The task of re-editing Phillimore's ' Ecclesiastical Law ' was not an easy one. Sir Walter Phillimore has executed it with brilliant success. He has brought to the work all his father's subdued enthusiasm for the Church, he has omitted nothing that lent value to the original treatise, he has expunged from it what could be spared, and has added to it everything that the ecclesiastical lawyer can possibly need to know." Law Journal. Whitehead's Church Law. Being a Concise Dictionary of Statutes, Canons, Regulations, and Decided Cases affecting the Clergy and Laity. Second Edition. By BENJAMIN WHITEHEAD, Esq., Barrister- at-Law. Demy 8vo. 1899. 10*. 6d. " A perfect mine of learning on all topics ecclesiastical." Daily Telegraph. " Mr. Whitehead has amassed a great deal of information which it would be very difficult to find in any other book, and he has presented it in a clear and con- cise form. It is a book which will be useful to lawyers and laymen." Lav; Times. ELECTIONS. Day's Election Cases in 1892 and 1893. Being a Collection of the Points of Law and Practice, together with Reports of the Judgments. By S. H. DAY, Esq., Barrister-at-Law, Editor of "Rogers on Elections." Royal 12mo. 1894. 7*. Gd. Hedderwick's Parliamentary Election Manual : A Practical Handbook on the Law and Conduct of Parliamentary Elections in Great Britain and Ireland, designed for the Instruction and Guidance of Candidates, Agents, Canvassers, Volunteer Assistants, &c. Second Edition. By T. C. H. HEDDEBWICK, Esq., Barrister-at- Law. Demy 12mo. 1900. 10*. 6d. " The work is pre-eminently practical, concise and clear." Solicitors' Journal. " Oneof the best books of the kind that we are acquainted with." Law Journal. Hunt's Metropolitan Borough Councils Elections: A Guide to the Election of the Mayor, Aldermen, and Councillors of Metropolitan Boroughs. ByJoHNHuNT,Esq., Bar.-at-Law. DemySvo. 1900. 3*.6rf. Rogers' Law and Practice of Elections. Vol. I. REGISTRATION, including the Practice in Registration Appeals; Parliamentary, Municipal, and Local Government; with Appendices of Statutes, Orders in Council, and Forms. Sixteenth Edition ; with Addenda of Statutes to 1900. By MAUEIOH POWELL, Esq., Barrister-at-Law. Royal 12mo. 1897 U. 1>. " The practitioner will find within these covers everything which he can be expected to know, well arranged and carefully stated." Law Times. Vol. II. PABLIAMENTABY ELECTIONS AND PETITIONS ; with Appen- dices of Statutes, Rules and Forms, and a Precedent of a Bill of Costs. Eighteenth Edition. By C. WILLOUGHBY WILLIAMS, Esq., Barrister- at-Law. Royal 12mo. 1906. U. 1*. "The acknowledged authority on election law." Law Journal. "The leading book on the difficult subjects of elections and election peti- tions." Law Times. " We have nothing but praise for this work as a trustworthy guide for candi- dates and agents." Solicitors' Journal. Vol. III. MUNICIPAL AND OTHEE ELECTIONS AND PETITIONS, with Appendices of Statutes, Rules, and Forms. Eighteenth Edit. By C. WILLOUGHBY WILLIAMS, Esq., Barrister-at-Law. Royal 12mo. (In preparation.) II. 1. %* All ttandard law Works are kept in Stock, in law calf and other binding*. 82 12 STEVENS AND SONS, LIMITED, EMPLOYERS' LIABILITY. Mozley-Stark. Fufc "Arbitration." Robinson's Employers' Liability. By ABTHUB ROBINSON, Esq., Barrister-at-Law. Second Edition. Including Precedents of Schemes of Compensation. By the Author and J. D. STUAET Sne, Esq., Barrister-at-Law. Royal 12mo. 1898. 7*. 6d. ENGLISH LAW. Pollock and Maitland's History of English Law before the time of Edward I. By Sir FEEDEBICK; POLLOCK, Bart., and FEED. "W. MATTLAND, Esq., Barristers-at-Law. Second Edition. 2 vols. roy. 8vo. 1898. 21. ENGLISH REPORTS. Re-issue of all Decisions prior to 1866. To be completed in about 150 Volumes. Royal 8vo. Issued monthly^ Now ISSUED. HOUSE OP LORDS (1694 to 1866). 11 Vols. Half-bound. Net, ML PBIVY COUNCIL (Including Indian Appeals) (1809 to 1872). 9 Vols. Half -bound. Net, 13Z. 10*. CHANCEBY (Including Collateral Reports) (1557 to 1866). 27 Vols. Half-bound. Net, 40Z. 10*. ROLLS COUET (1829 to 1866). 8 Vols. Half-bound. Net, 12?. Now PUBLISHING. VICE-CHANCELLOBS' COURTS (1815 1866). Complete in about 14 vols. Half -bound. Net, per vol., 30s. %* The Volumes are not sold separately. Prospectus on application. " We can speak unhesitatingly of the advantage to the lawyer of the posses- sion of this excellent reprint of all the English reports." Solicitors' Journal. EQUITY, and Fufo CHANCERY. Seton's Forms of Judgments and Orders in the High Court of Justice and in the Court of Appeal, having especial reference to the Chancery Division, with Practical Notes. Sixth Edition. By CECIL C. M. DALE, Esq., Barrister-at-Law, W. TINDAL KINO, Esq.,. a Registrar of the Supreme Court, and W. 0. GOLDSCHMLDT, Esq., of the Registrars' Office. In 3 vols. Royal 8vo. 1901. 61. 6*. "A monument of learned and laborious accuracy." Law Quarterly Review. " The new edition of ' Seton ' is from every point of view, indeed, a most valuable and indispensable work, and well worthy of the book's high reputation." Law Journal. Smith's Manual of Equity Jurisprudence. A Manual of Equity Jurisprudence for Practitioners and Students, founded on the Works of Story and other writers, comprising the Fundamental Principles- and the points of Equity usually occurring in General Practice. Fifteenth Edition. By SYDNEY E. WILLIAMS, Esq., Barrister-at- Law. Demy 8vo. 1900. 12*. 6d. " We can safely recommend ' Smith's Equity ' in its new clothes to the atten- tion of students reading: for their Examinations." Law Notes. Smith's Practical Exposition of the Principles of Equity, illus- trated by the Leading Decisions thereon. For the use of Students and Practitioners. Third Edition. By H. AETHUE SMITH, M.A., LL.B., Esq., Barrister-at-Law. Demy 8vo. 1902. 21*. "This well-known text-book maintains its high reputation. . . . This third edition has been brought up to date in a way which should also make it useful to practitioners in search of the latest authorities on any given point. . . . The additional cases referred to in the text and notes amount to many hundreds." Law Journal. Williams' Outlines of Equity. A Concise View of the Principles of Modern Equity. By SYDNEY E. WILLIAMS, Esq., Barrister-at-Law, Author of "The Law relating to Legal Representatives," &c. Royal 12mo. 1900. 5*. " The accuracy it combines with conciseness is remarkable." Late Magasine. ESTATE DUTIES. Freeth. Fwfc " Death Duties." ESTOPPEL. Everest and Strode's Law of Estoppel. By LANCELOT FIELDING EVEEEST, and EDMUND STEODE, Eeqrs., Barristers-at-Law. Demy 8vo. 1884. 18*. Ewart's Exposition of the Principles of Estoppel by Misrepre- sentation. By JOHN S. EWAET, Esq., K.C. of the Canadian Bar. Demy 8vo. 1900. u, 5. ** All standard Law Works are kept in Stock, in law calf and other bindings. 119 & 120, CHANCERY LANE, LONDON, W.O. 13 EVIDENCE. Bodington.Ffc "French Law." Wills' Theory and Practice of the Law of Evidence. By WH. WILLS, Esq., Barrister-at-Law. Demy8vo. 1894. 10*. 6d. "It contains a large amount of valuable information, very tersely and accurately conveyed." Law Times. EVIDENCE ON COMMISSION. Hume-Williams and Macklin's Taking of Evidence on Commission : including therein Special Examinations, Letters of Request, Mandamus and Examinations before an Examiner of the Court. Second Edition. By W. E. HUME- Wm.TAMH, Esq., K.C., and A. ROMEB MACKLIN, Esq., Barrister-at- Law. Demy 8vo. 1903. 12*. 6d. " "We have tested it carefully, and have no hesitation in commending it to the profession as an accurate and complete manual on this important branch of the law. Every point that is likely to occur in practice has been noted, and there are appendices of statutes, rules, orders, precedents ; and which is, so far as we are aware, a novel feature principles of our law of evidence for the guidance of foreign advocates, in English, French, and German, and a good index."-La; Times. EXAMINATION GUIDES. Bar Examination Guide. By H. D. WOODCOCK, and R. C. MAXWELL, Esqrs., Barristers-at-Law. Vols. I. to V. (1895-1899). Each, net 7*. 6d. Barham's Students' Text-Book of Roman Law. By C. NICOLAS BABHAM, Esq., Barrister-at-Law. Demy 12mo. 1903. Net,2s.6d. " This is a first primer of Boman Law for the beginner. It is plain and clear, is well arranged, and so simply put that any student can follow it." Law Student's Journal. EXECUTIONS. Edwards' Law of Execution upon Judgments and Orders of the Chancery and Queen's Bench Divisions. By C. J. EDWABDS, Esq., Barrister-at-Law. Demy 8vo. 1888. 16*. EXECUTORS. Coffin's Testamentary Executor in England and Elsewhere. By R. J. R. GOFBTN, Esq., Barrister-at-Law. Demy 8vo. 1901. 5*. Macaskie'sTreatise on the Law of Executors and Administrators. By S. C. MACASKIE, Esq., Barrister-at-Law. 8vo. 1881. 10*. 6<*. Williams' Law of Executors and Administrators. Tenth Edition. By the Right Hon. Sir ROLAND VAUGHAN WILLIAMS, a Lord Justice of Appeal, and ABTHTTB ROBEBT INGPEN, Esq., one of His Majesty's ounsel. 2 vols. Roy. 8vo. 1905. 4f. " We cannot call to mind any work of recent times of greater authority than ' Williams on Executors.' It is one of our legal classics, and is unrivalled in the width of its range, the accuracy of its statements, and the soundness of its law. The new edition is worthy of the great reputation of the work, and every prudent practitioner will do well to possess himself of a copy." Law Times. ' This book the standard work on its subject is a storehouse of learning on every point of administration law, and has been completely brought up to date." Law Journal. "It is facile princeps the leading authority on the subjects with which it deals, &nd is a work which every practitioner should possess and no library should be without." Law Quarterly Review. Williams' Law relating to Legal Representatives. Real and Personal. By SYDNEY E. WILLIAMS, Esq., Author of "Law of Account," " Outlines of Equity," &c. Demy 8vo. 1899. 10*. " We can commend to both branches of the profession, and more especially to solicitors." Law Times, EXECUTORS (Corporate). Allen's Law of Corporate Executors and Trustees. By EBNEST KINO AXLEN, Esq., Barrister-at-Law. Demy 8vo. 1906. 6*. EXTRADITION. Biron and Chalmers 1 Law and Practice of Extradition. By H. C. BIEON and KENNETH E. CHA TOTES, Esqrs., Barristers-at-Law. Demy 8vo. 1903. 20*. " A convenient store of information upon all matters connected with extra- dition." Solicitors' Journal, " The whole book is eminently practical, and the practice and procedure are clearly and ably discussed." Law Times. "A very satisfactory and practical collection of the treaties and statutes relating to extradition and fugitive offenders, with an interesting introduction. a commentary on the text of the statutes and treaties, and a valuable alphabetical list showing what crimes are comprised in the particular treaties." Law Journal. %* Ml standard Law Works are kept in Stock, in law calf and other bindings. 14 STEVENS AND SONS, LIMITED, FACTORIES AND WORKSHOPS. Ruegg and Mossop's Law of Factories and Workshops. By A. H RTTEGO, Esq., K.C., and L. MOSSOP, Esq., Barrister-at-Law Demy 8vo. 1902. 12s. &d. " One of the best treatises on the law of factories." Law Journal. FARM, LAW OF. Dixon's Law of the Farm: including the Cases and Statutes relating to the subject ; and the Agricultural Customs of England and "Wales. Sixth Edition. By AUBBEY J. SPENCEB, Esq., Barrister-at-Law. Demy 8vo. 1904. II. 6s. " A complete modern compendium on agricultural matters." Law Times. FIXTURES. Amos and Ferard on the Law of Fixtures. Third Edition. By C. A. FEEAED and "W. HOWLAND ROBERTS, Esqrs., Bar- risters-at-Law. Demy 8vo. 1883. 18*. FORMS. Chitty's Forms of Civil Proceedings in the King's Bench Division of the High Court of J ustice, and on Appeal therefrom to the Court of Appeal and the House of Lords. Thirteenth Edition. By T. W. CHITTT, Esq., a Master of the Supreme Court, HBEBEBT CHTTTT, Esq., Barrister-at-Law, and P. E. VIZARD, Esq., of the Central Office. Royal 8 vo. 1902. 11. 16*. "The book is accurate, reliable and exhaustive." Solicitors' Journal. " The forms are practically exhaustive, and the notes very good, so that this edition -mil be invaluable to practitioners whose work is of a litigious kind." Law Journal. Daniell's Forms and Precedents of Proceedings in the Chan- cery Division of the High Court of Justice and on Appeal therefrom. Fifth Edition, with summaries of the Rules of the- Supreme Court ; Practical Notes ; and references to the Seventh Edition of Daniell's Chancery Practice. By CHAELES BURNEY, B.A., a Master of the Supreme Court. Royal 8vo. 1901. 21, 10s. " The standard work on Chancery Procedure." Law Quarterly JBevieto. Seton. Vide " Equity." Wolstenholme's Forms and Precedents. Adapted for use under the Conveyancing Acts and Settled Land Acts, 1881 to 1890. Sixth Edition. "Royal 8vo. 1902. II. Is. FRENCH LAW. Bodington's Outline of the French Law ot Evidence. By OLTVEE E. BODDJGTON, Esq., Barrister-at-Law. Demy 8vo, 1904. 5*. Cachard's French Civil Code. By HENBY CACHAED, B.A., Counsellor-at-Law of the New York Bar, Licencie en Droit de la- Faculte de Paris. Demy 8vo. 1895. 1Z. Goirand's Treatise upon French Commercial Law and the- Practice of all the Courts. With a Dictionary of French Judicial Terms. Second Edition. By LEOPOLD GOIBAND, Licencie en Droit. Demy 8vo. 1898. I/. Goirand's Treatise upon the French Law relating to English Companies carrying on Business in France. By LEOPOLD GOIEAND, French Solicitor. Crown 8vo. 1902. Net, 2s. Gd. Kelly. Tide " Marriage." Sewell's Outline of French Law as affecting British Subjects. By J. T. B. SEWELL, LL.D., Solicitor. Demy 8vo. 1897. 10*. &*. GAMBIA. Ordinances of the Colony of the Gambia. With Index. 2 Vols. Folio. 1900. Net, 3L GAME LAWS. Warry's Game Laws of England. With an, Appendix of the Statutes relating to Game. By G. TATLOE WABBY, Esq., Barrister-at-Law. Royal 12mo. 1896. 10s. Gd. GOLD COAST, Ordinances of the Gold Coast Colony and the- Rules and Orders thereunder. 2 vols. Royal 8vo. 1903. 3^.10.?. GOODWILL Allan's Law relating to Goodwill. By CHAELES E. ALLAN,M.A., LL.B., Esq., Barrister-at-Law. DemySvo. 1889. 7s. Gd. Sebastian. Vide "Trade Marks." HACKNEY CARRIAGES.-Bonner & Farrant.-Ffc "Motor Cars." HOUSE TAX. Ellis' Guide to the House Tax Acts, for the use of the Payer of Inhabited House Duty in England. By AETHUB M. ELLIS, LL.B. (Lond.), Solicitor. Royal 12mo. 1885. 6s. " Accurate, complete and very clearly expressed." Solicitors' Journal. ** M standard Law Works are kept in Stock, in law calf and other bindings 119 * 120, CHANCERY LANE, LONDON, W.C. 1-5 HUSBAND AND WIFE. Lush's Law of Husband and Wife, within the jurisdiction of the Queen's Bench and Chancery Divisions. By C. MONTAGUE LUSH, Esq., Barrister-at- Law. Second Edition. By the Author and W. H. GRIFFITH, Esq., Barrister-at- Law. Demy 8vo. 1896. If. 5*. "To the practising lawyer the work will be of the utmost importance." Law Times. " This book will certainly be consulted when difficulties arise relative to the position of married women." Law Journal. INCOME TAX. Buchan's Law relating to the Taxation of Foreign Income. By JOHN BUCHAN, Esq., Barrister-at-Law, with Preface by the Eight Hon. E. B. HALDANE, K.C., M.P. Demy 8vo. 1905. 10*. 6rf. "A learned and able treatise." Solicitors' Journal. " A text book of great value." Law Journal. Ellis' Guide to the Income Tax Acts. For the use of the English Income Tax Payer. Third Edition. By AETHUB M. ELLIS, LL.B. (Lond.), Solicitor. Eoyal 12mo. 1893. 7s. 6d. Robinson's Law relating to Income Tax; with the Statutes, Forms, and Decided Cases in the Courts of England, Scotland, and Ireland. By ARTHUR ROBINSON, Esq., Barrister-at-Law. Eoyal 8vo. 1895. 11. 1*. Whybrow's Income Tax Tables. By G. H. WHYBROW, Esq., of the Income Tax Eepayment Branch, Somerset House. DemySvo. 1905. 5s. "This is a very useful book, and will be found of exceptional value to bankers, solicitors, officials of public companies and other professional men." Financial Times. INDIA. llbert's Government of India. Being a Digest of the Statute Law relating thereto, with Historical Introduction and Illustrative Do- cuments. By Sir COUHTENAY ILBERT, K.C.S.I. DemySvo. 1898. 11. Is. INDICTMENTS. Bowen-Rowlands. FK& "Criminal Law." INLAND REVENUE. Highmore's Summary Proceedings in Inland Revenue Cases in England and Wales. Including Appeals to Quarter Sessions and by Special Case, and Proceedings by Collector's Warrants for Eecovery of Duties of Excise and Taxes. Third Edition. By N. J. HIGHMORE, Esq., Barrister-at-Law, Assistant Solicitor of Inland Eevenue. Eoy. 12mo. 1901. 7s. 6d. Highmore's Inland Revenue Regulation Act, 1890, as amended by the Public Accounts and Charges Act, 1891, and the Finance Act, 1896, with other Acts ; with Notes, Table of Cases, &c. By NATHANIEL J. HIGHMORE, Esq., Barrister-at-Law, Assistant Solicitor of Inland Eevenue. Demy 8vo. 1896. 7s. 6d. INSURANCE. Arnould on the Law of Marine Insurance. Seventh Edition. By EDWAED LOOTS DB HART and RALPH ILTFF SHEET, Esqrs., Barristers-at-Law. 2 vols. Royal 8vo. 1901. 31. 3s. " The authors have availed themselves of the advice and assistance of men of practical experience in marine insurance, so that the book may be relied on as accurate from a business as well as from a legal point of view. The book can best be described by the one word ' excellent.' " Law Journal. Tyser's Law relating to Losses under a Policy of Marine Insur- ance. By CHARLES EGBERT TYSEB, Esq., Barrister-at-Law. Demy 8vo. 1894. 10*. 6d. INTERNATIONAL LAW. Bate's Notes on the Doctrine of Renvoi in Private International Law. By JOHN PAWLEY BATE, Esq., Eeader of International Law, &c., in the Inns of Court. 8vo. 1904. Net Is. 6d. Dicey. Vide " Conflict of Laws." Hall's International Law. Fifth Edition. By J. B. ATLAT, Esq., Barrister-at-Law. Demy 8vo. 1904. Net, 11. Is. Hall's Treatise on the Foreign Powers and Jurisdiction of the British Crown. By W. E. HALL, Esq., Barrister-at-Law. Demy 8vo. 1894. 10s. 6d. Higgins' The Hague Conference and other International Con- ferences concerning the Laws and Usages of War Texts of Conventions, with Notes. By A. PEARCE HIGGINS, M.A., LL.D., sometime Scholar of Downing College. Eoyal 8vo. 1904. Net, 3.v. ** All standard Law Works are kept in Stock, in law ealf and other bindings. 16 STEVENS AND SONS, LIMITED, INTERNATIONAL LAW continued. Holland's Studies in International Law. By THOMAS EESKINB HOLLAND, D.C.L., Barrister- at- Law. Demy 8vo. 1898. 10s. 6d. Nelson's Private International Law. By HOBACB NELSON, Esq., Barrister-at-Law. Roy. 8vo. 1889. 11. Is. Rattigan's Private International Law. By Sir WILLIAM HKNEY RATTIOAN, LL.D., K.C. Demy 8vo. 1895. 10*. 6d. " Written with admirable clearness." Law Journal. Walker's Manual of Public International Law. By T. A. WALKED, M.A., LL.D., Esq., Barrister-at-Law. Demy 8vo. 1895. 9*. Walker's History of the Law of Nations, Vol. L, from the Earliest Times to the Peace of Westphalia, 1648. By T. A. WALKEB, M.A., LL.D., Esq., Barrister-at-Law. Demy 8vo. 1899. Net, 10*. Westlake's International Law. Chapters on the Principles of Liter- national Law. ByJ. WESTLAKE, K.C., LL.D. DemySvo. 1894. 10*. Westlake's International Law. Parti. Peace. By J. WESTLAKE, K.C , LL.D. Demy 8vo. 1904. Net, 9s. Wheaton's Elements of International Law; Fourth English Edition. Including a translation of the Anglo-French Agreement. By J. B. ATLAT, M.A., Barrister-at-Law. Royal 8vo. 1904. II. 12s. The leading American and English work on International Law. " Wheaton stands too high for criticism." Law Times. "We congratulate Mr. Atlay on the skill and discretion with which he has performed the task of editing a standard treatise on international law. "Law Journal. INVESTIGATION OF TITLE. Jackson and Gosset's Investiga- tion of Title. Being a Practical Treatise and Alphabetical Digest of the Law connected with the Title to Land, with Precedents of Requisitions. Second Edition. By W. HOWLAND JACKSON and THOEOLD GOSSET, Barristers-at-Law. Demy 8vo. 1899. 12*. 6d. " The new edition contains the following additional subjects namely, boun- daries, compromise, corporations, glebe lands, parcels, quit-rents and recitals ; and the changes effected by the statute law of 1899 are noticed in their proper places. . . . Jackson and Gosset's book is well worth having." Law Times. " Will be of real help to the busy conveyancer." Law Notes. %* See " Conveyancing" (p. 7), for companion volume, " Precedents of Purchase and Mortgage Deeds," by the same Authors. JUDGMENTS AND ORDERS. Seton. Fwfe "Equity." JURISPRUDENCE. Holland's Elements of Jurisprudence. Ninth Edition. ByT.E. HOLLAND, K.C.,D.C.L. 8vo. 1900. 10*. 6d. Markby's Elements of Law, Sixth Edition. By Sir WILLIAM MAEKBT, D.C.L. Demy 8vo. 1905. 12*. 6d. JURY LAWS. Hu band's Practical Treatise on the Law relating to the Grand Jury in Criminal Cases, the Coroner's Jury, and the Petty Jury in Ireland. By WM. G-. HUBAND, Esq., Barrister-at-Law. Royal 8vo. 1896. Net, 11. 5*. JUSTICE OF THE PEACE. Magistrates' Cases,1894 to 1905. Cases relating to the Poor Law, the Criminal Law, Licensing, and other subjects chiefly connected with the duties and office of Magis- trates. 18941905. Each, net 11. ** These Reports, published as part of the Law Journal Reports, are issued Quarterly. Each Part, net 5*. Annual Subscription, payable in advance, 15*. post free. Shirley's Magisterial Law. An Elementary Treatise on Magisterial Law, and on the Practice of Magistrates' Courts. Second Edition. By LEONAED H. WEST, LL.D., Solicitor. Demy 8vo. 1896. 7*. Gd. Wigram's Justice's Note-Book. Containing a short account of the Jurisdiction and Duties of Justices, and an Epitome of Criminal Law. Seventh Edition. By HENEY WAEBUETON and LEONABD W. KEBSHAW, Esqrs., Barristers-at-Law. Royal 12mo. 1900. 10*. 6d. "The information given is complete and accurate." Law Journal. " Contains a great deal of valuable information inasmallconipass."-iaKi? T im. %* All standard Law Works are kept in Stock, in law calf and other bindings. 119 & 120, CHANCERY LANE, LONDON, W.C. 17 LAND CHARGES ACTS. Eaton and Purcell's Land Charges Acts, 1888 and 1900, A Practical Guide to Registration and Searches. By EENEST W. EATON, Esq. , Senior Clerk, Land Charges Department, Land Registry, and J. POYNTZ PUBCELL, Esq., of the same Department, Barrister-at-Law. Royal 12mo. 1901. Net, 2*. 6d. LAND LAW. Jenks' Modern Land Law. By EDWABD JENZS, Esq., Barrister-at-Law. Demy 8vo. 1899. 15*. LAND TAX. Bourdin's Land Tax. An Exposition of the Land Tax. Including the Latest Judicial Decisions, and the Changes in the Law effected by the Taxes Management Act, &c. Fourth Edition. By the late FBEDEBICX HTTMPHBBYS, Deputy Registrar of Land Tax ; and Digests of Cases decided in the Courts by CHABLES C. ATCHISON, Deputy Registrar of Land Tax. Royal 12mo. 1894. 7*. 6rf. Atchison's Land Tax. Changes Effected in the Processes of Assess- ment and Redemption by Part VI. of the Finance Act, 1896 (59 & 60 Viet. c. 28). By CHARLES C. ATCHISON, Deputy Registrar of Land Tax. Royal 12mo. 1897. (A Supplement to above.) Net, 2*. 6d. LAND TRANSFER. Brickdale and Sheldon's Land Transfer Acts, 1 875 and 1 897. With a Commentary on the Sections of the Acts, and Introductory Chapters explanatory of the Acts, and the Conveyancing 1 Practice thereunder ; also the Land Registry Rules, Forms, and Fee Order, Orders in Council for Compulsory Registra- tion, &c., together with Forms of Precedents and Model Registers, &c. By C. FOBTESCUB BBICKDALE, Registrar at the Land Registry, and W. R. SHELDON, Esqrs., Barristers-at-Law. Second Edition. By C, FOBTESCTJE BBICKDALE, Esq., Barrister-at-Law. Royal 8vo. 1905. II. 5*. " The second edition of this book will be welcomed by the practitioner who has to do with registered land, or with conveyancing of any kind in London, where registration on sale is now compulsory." Law Quarterly Review. "Contains not only lengthy and valuable notes and annotations on the Land Transfer Acts and Rules, but also full and separate dissertations on the law, procedure, and practice thereunder." Law Times. Jennings and Kindersley's Principles and Practice of Land Registration under the Land Transfer Acts, 1875 and 1897 ; with the text of the Acts and the Rules and Fee Order of 1903. By A. R. G. JENNINGS, LL.B., and G. M. KINDEBSLEY, Esqrs., Bar- risters-at-Law, and of the Land Registry. R^. 8vo. 1904. 12*. 6d. " The principles and practice of land registration are set forth in a clear and concise manner by the authors in their dissertations and notes." Law Times. LANDLORD and TENANT. Redman's Law of Landlord and Tenant. Including the Practice of Ejectment. Fifth Edition. By JOSEPH H. REDMAN, Esq., Barrister-at-Law. 8vo. 1901. 11. 6*. " We can confidently recommend the present edition." Law Journal. Woodfall's Law of Landlord and Tenant. With a full Collection of Precedents and Forms of Procedure ; containing also a collection of Leading Propositions. Seventeenth Edition. By J. M. LELY, Esq., Barrister-at-Law. Roy. 8vo. 1902. 11. 18. "Woodfall is really indispensable to the practising lawyer, of whatever degree he may be." Law Journal. LANDS CLAUSES ACTS. Jepson's Lands Clauses Acts; with Decisions, Forms, and Tables of Costs. Second Edition. By J. M. LIGHTWOOD, Esq., Barrister-at-Law. DemySvo. 1900. 11. Is. " This work, in its new and practically re-written form, may be described as a handy and well-arranged treatise on the Lands Clauses Acts." Solicitors' Journal. LAW JOURNALREPO RTS. Edited by JOHN MEWS, Esq., Barrister- at-Law. Published monthly. Annual Subscription : Reports and Public General Statutes Net, SI. 4*. Reps. Stats. & Mews' Annual Digest (Issued Quarterly) Net, 31. 10*. Thin paper Edition, forming one handy Vol. for the year Net, 31 4*. Or, without the Statutes Net, 31. The Law Journal weekly, U. extra. Synopsis of Contemporary Reports, 1832 to 1905. Net, bs. ** All standard Law Workt are kept in Stock, in law calf and other bindings. 18 STEVENS AND SONS, LIMITED, LAW LIST. Law List (The). Comprising the Judges and Officers of the Courts of Justice, Counsel, Special Pleaders, Conveyancers, Solicitors, Proctors, Notaries, &c., in England and Wales; the Circuits, Judges, Treasurers, Registrars, and High Bailiffs of the County Courts ; Metropolitan and Stipendiary Magistrates, Official Receivers under the Bankruptcy Act, Law and Puhlic Officers in England, Colonial and Foreign Lawyers with their English Agents, Clerks of the Peace, Town Clerks, Coroners, Com- missioners for taking Oaths, Conveyancers Practising in England under Certificates obtained in Scotland, &c., &c. Compiled, so far as relates to Special Pleaders, Conveyancers, Solicitors, Proctors and Notaries, by H. F. BABTLETT, I.S.O., Controller of Stamps, and Registrar of Joint Stock Companies, and Published by the Authority of the Commissioners of Inland Revenue and of the Law Society. 1906. Net, 10*. 6d. LAW QUARTERLY REVIEW Edited by Sir FBEDEBICK POLLOCK, Bart., D.C.L., LL.D. Vols. I. XXI. (with General Indices to Vols. I. to XX.) Royal 8vo. 1885-1905. Each, 12s. l|g- Annual Subscription post free 12*. 6d., net. Single numbers, each 5s. " A little criticism, a few quotations, and a batch of anecdotes, afford a sauce that makes even a quarter's law reporting amusing reading." Law Journal. " The greatest of legal quarterly reviews . . . the series of ' Notes ' always so entertaining and illustrative, not merely of the learning of the accomplished jurist (the Editor) but of the grace of language with which such learning can be unfolded." Law Jour. LAWYER'S ANNUAL LIBRARY (1) The Annual Practice. SNOW, SUBNET, and STBTNQEE. (2) The A. B. C. Guide to the Practice. STEIKOEE. (3) The Annual Digest. MEWS. (Also Issued Quarterly.) (4) The Annual Statutes. LELT. (5) The Annual County Court Practice. SHYLY. ij^" Annual Subscriptions, (a) For Complete Series, as above, delivered on the day of publication, net, 21. 8s. (b) Nos. 1, 2, 3, and 4 only, net, 11. 18*. (If A. B. C. GUIDE is not wanted 2s. 6d. may be deducted from subscription to series (a) or (b).) (c) Nos. 3, 4, and 5 only, net, 11. 15s. (Carriage extra, Is.) Full prospectus forwarded on application. LAWYER'S COMPANION. Vide" Diary." LAWYER'S OFFICE. The Modern Lawyer's Office: being Sugges- tions for Improvements in the Organization of Law Offices and for the adoption of certain American Appliances and Business Methods. By A SOLICITOB OP THE SUPBEME COUBT. Royal 12mo. 1902. 6*. LEADI NG CASES. Ball's Leading Cases. Fide " Torts." Shirley's Selection of Leading Cases in the Common Law. With Notes. By W. S. SHIBLEY, Esq., Barrister-at-Law. Seventh Edition. By RICHAED WATSON, Esq., Barrister-at-Law. Demy8vo. 1904.16*. "The selection is very large, though all are distinctly 'Leading Cases,' and the notes are by no means the least meritorious part of the work." Law Journal. Warburton's Selection of Leading Cases in the Criminal Law. With Notes. By HENEY WABBUBTON, Esq., Barrister-at-Law. [Founded on "Shirley's Leading Cases."] Third Edition. Demy 8vo. 1903. 12s. Qd. " The cases have been well selected, and arranged. . . . We consider that it will amply repay the student or the practitioner to read both the cases and the notes." Justice nfthe. Peace, LEGAL HI STORY. Deans' Student's Legal History. SecondEdit. By R. STOBEY DEANS, Esq., Barrister-at-Law. DemySvo. 1905. 6*. LEGAL INTERPRETATION. Seal's Cardinal Rules of Legal Interpretation. Collected and Arranged by EDWABD BEAL, Esq., Barrister-at-Law. Royal 8vo. 1896. 12*. 6d. LEGISLATIVE METHODS. llbert's Legislative Methods and Forms. By Sir COUBTENAY ILBEBT, K.C.S.I., C-LE., Parliamentary Counsel to the Treasury. Demy 8vo. 1901. 16s, LEXICON. Vide "Dictionary." %* All standard Law Works are kept in Stock, in law calf and other bindings. 119 & 120, CHANCERY LANE, LONDON, W.C. 19 LIBEL AND SLANDER. Odgers on Libel and Slander. A Digest of the Law of Libel and Slander : and of Actions on the Case for Words causing Damage, with the Evidence, Procedure, Practice, and Precedents of Pleadings, both in Civil and Criminal Cases. Fourth Edition. By W. BLAKE ODGEES, LL.D., one of His Majesty's Counsel, and J. BEOMLEY EAMES, Esq., Barrister- at-Law. Royal 8vo. 1905. 11. 12s. " A standard and exhaustive treatise on the law of defamation and allied topiss." Law Quarterly Review. " The most scientific of all our law books In its new dress this volume is secure of an appreciative professional welcome." Law Times. " The general opinion of the profession has always accorded a high place to Mr. Blake Odgers' learned work." Law Journal. LICENSING. Slocombe's Licensing Act,1904, Simply Stated. Second Edition. By ALFEED J. SLOCOMBE, County Borough Police Court, Huddersfield. Demy 8vo. 1905. Net, Is. Talbot's Law and Practice of Licensing. Being a Digest of the Law regulating the Sale by Retail of intoxicating Liquor. "With a full Appendix of Statutes, Rules and Forms. Second Edition. By GEOEQE JOHN TALBOT, Esq., Barrister-at-Law. Royal 12mo. 1905. 10*. 6d. " His method gives professional men a guide to the legislation afforded by no other book." Law Journal. " The distinctive feature of it is that the exposition of the law is arranged in the form of a code. It is an undoubted advantige to have such a chaos as the Licensing Acts reduced to the form of a code, and as far as we have tested them, the statements of the law are accurate." Law Quarterly Review. LI G H T. Vide " Easements." LIGHT RAILWAYS. FtFBY. Fourth Edition. By W. D. RAWLINS, Esq., K.C. Royal 8vo. 1903. 11. 16s. " The leading authority on its subject." Law Journal. " We think we may say, as a result of our investigation of this edition, that no pains have been spared by Mr. Rawlins to incorporate all the new matter which has arisen during the ten years which have elapsed since the issue of the third edition, and that he has added it with accuracy and neatness." Solicitors' Journal. "Mr. Rawlins has acquitted himself of his responsible task with signal ability." Law Times. * % * All standard Law Works are kept in Slock, in law calf and other bindings. 28 STEVENS AND SONS, LIMITED, STAMP LAWS. Highmore's Stamp Laws. Being the Stamp Acts of 1891 with the Acts amending and extending the same, in- cluding the Finance Act, 1902, together with other Acts imposing or relating to Stamp Duties, and Notes of Decided Cases ; also an Introduction, and an Appendix containing Tables showing the com- parison with the antecedent Law. Second Edition. By NATHANIEL JosErn HIOHMOEK, Assistant-Solicitor of the Inland Revenue. Demy 8vo. 1902. 10*. 6d. " The recognized work on the subject." Law Quarterly Review. " Mr. Highmore has incorporated in the new edition of this work the legislation of the last three years, so far as it affecte the Stamp Laws, including the Finance Act, 1902. He has revised the text, added the new authorities, and increased the notes upon departmental practice, a subject which he is peculiarly qualified to discuss. This edition, like the former one, will be found of the greatest use by solicitors, officers of companies, and men of business." Law Journal. " A very comprehensive volume, fulfilling every requirement. . . . The various notes to the sections of the several Acts incorporated in the volume are fully mid accurately set out, the points of the decided cases clearly expressed, and the effect and object of the enactment indicated ; and what must be of especial value to the practitioner, the practice at Somerset House with regard to all matters coming before that institution is stated." Justice of the Peace. " Mr. Highmore's ' Stamp Laws' leaves nothing undone." The Civilian. STATUTES, and vide " Acts of Parliament." Chitty's Statutes. The Statutes of Practical Utility, from the earliest times to 1894, with Supplemental Volume to 1901 inclusive. Arranged in Alphabetical and Chronological Order; with Notes and Indexes. Fifth Edition. By J. M. LELT, Esq., Barrister- at-Law. Royal 8vo. Complete with Index. In 14 Volumes. 1894-1902. 151. 15*. W The Supplementary Volume, 1895 to 1901. Consolidated with Index. By J. M. LELT, Esq. May be had separately. 21. 2*. "To those who already possess 'Chitty's Statutes' this new volume is indispensable." Law Notes. The Annual Supplements Separately: 1895,5* 1896,10*. 1897, 5*. 1898, Is. 6d. 1899, 7*. 6d. 1900, 7*. 6d. 1901, 7*. 6rf. 1902, 7*. Gd. 1903, 7. 6d. 1904, 7*. Qd. 1905, 7s. 6d. "It is a book which no public library should be without." Spectator. "A work of permanent value to the practising lawyer." Solicitors* Journal. " The profession will feel grateful both to the editor and the publishers of a work which will be found of the highest value." Law Journal. " A legal work of the very highest importance. . . . Few besides lawyers will, we suspect, realise the amount of work which such an undertaking involves to the editor, who appears to have spared no pains to give a clear, orderly, and methodical character to the com- pilation." Daily News. " This collection has fulfilled a purpose of usefulness only to be understood by those who are acquainted with the amazing com- plexity of English statute law, with its bewildering incoherence and painful heterogeneity." Pall Matt Gazette. " Indispensable in the library of every lawyer." Saturday Review. "To all concerned with the laws of England, Chitty's Statutes of Practical Utility are of essential importance, whilst to the practising lawyer they are an absolute necessity." Law Times. "It is apparently the belief of some popular novelists that lawyers in their difficulties still uniformly consult daily Coke upon Littleton and Blackstone. Those who know better are aware that the lawyer's Bible is the ' Statutes of Practical Utility 'that they are his working tools, even more than accredited text-books or authorised reports.' More than one judge has been heard to say that with the ' Statutes of Practical Utility ' at his elbow on the bench he was apprehensive of no difficulties which might arise." T\e Times. ** A II standard Law Works are kept in Stock, in law calf and other bindings. 119 & 120, CHANCERY LANE, LONDON, W.O. 29 STATUTE LAW. Wilberforce on Statute Law. The Principles which govern the Construction and Operation of Statutes. By E. WrLBBKFOECK, Esq., a Master of the Supreme Court. 1881. 18*. STOCK EXCHANGE. Schwabs and Branson's Treatise on the Laws of the Stock Exchange. By WALTEB S. SCHWABE and G-. A. H. BBANSON, Esqrs., Barristers-at-Law. Demy 8vo. 1905 12s. Gd. " This book gives a clear and comprehensive account of the constitution of the London Stock Exchange and of the nature of Stock Exchange transactions, as well as of the legal rules applicable in respect thereof ."Law Quarterly Review. "This is a clear and practical account of the method in which the business of the Stock Exchange is conducted, and of the law relating thereto. The course of business, and the Stock Exchange and the public, are the subjects of the two most important chapters, and the authors may be congratulated in having treated, to use their own words, ' of the business somewhat from the point of view of a lawyer, and of the law somewhat from the point of view of a business man,' with a marked degree of success." Law Times. " The best guide we know to the nature of Stock Exchange transactions." The Spectator. " That the treatise will be acceptable to lawyers and laymen alike we have no doubt. We have satisfied ourselves that the legal portion is a sound, and in all respects satisfactory, piece of work." Law Journal. SUCCESSION. Holdsworth and Vickers 1 Law of Succession, Testamentary and Intestate. Demy 8vo. 1899. 10* 6d. SUMMARY CONVICTIONS. Paley's Law and Practice of Sum- mary Convictions under the Summary Jurisdiction Acts, 18481899; including Proceedings Preliminary and Subse- quent to Convictions, and the Responsibility of Convicting Magistrates and their Officers, with the Summary Jurisdic- tion Rules, 1886, and Forms. Eighth Edition. By W. H. MACNAMABA, Esq., a Master of the Supreme Court, and RALPH NEVILLE, Esq., Barrister-at-Law. Demy 8vo. 1904. II. 5s. TAXPAYERS' GU I DES. rfo "House," "Income," & "Land Tax." THEATRES AND MUSIC HALLS. Geary's Law of Theatres and Music Halls, including Contracts and Precedents of Contracts. By W. N. M. GEABT, J.P. With Historical Introduc- tion. By JAMES WILLIAMS, Esq., Barrister-at-Law. 8vo. 1885. 6t. TITLE. Jackson and Gosset. Tide " Investigation of Title." TORTS. Addison on Torts. A Treatise on the Law of Torts; or Wrongs and their Remedies. Seventh Edition. By HORACE SMITH, Esq., Bencher of the Inner Temple, Metropolitan Magis- trate, and A. P. PEEOEVAL KEEP, Esq., Barrister-at-Law. Royal 8vo. 1893. 11. 18*. " As an exhaustive digest of all the cases which are likely to be cited in practice it stands without a rival." Law Journal. " As now presented, this valuable treatise must prove highly acceptable to judges and the profession." Law Times. " An indispensable addition to every lawyer's library." Law Magazine. Bigelow's Law of Torts. By MELVILLE M- BIOELOW, Ph.D. Harvard. Second Edition. Demy 8vo. 1903. 12*.6rf. Innes' Principles of the Law of Torts. By L. 0. INNES, lately one of the Judges of the High Court, Madras, Author of " A Digest of the Law of Easements." Demy 8vo. 1891. 10*. 6d. Kenny's Selection of Cases Illustrative of the English Law of Torts. By C. S. KENNY, LL.D., Barrister-at-Law. Demy 8vo. 1904. Net, 12s. 6d. Pollock's Law of Torts ; a Treatise on the Principles of Obligations arising from Civil Wrongs in the Common Law. Seventh Edition. By Sir FBEDEBIOK POLLOCK, Bart., Barrister-at-Law. Author of "Principles of Contract," " A Digest of the Law of Partnership," &c. Demy 8vo. 1904. 11. 5*. " Concise, logically arranged, and accurate." Law Timet. "Incomparably the best work that has been written on the subject." Literature. " A book which is well worthy to stand beside the companion volume on 'Contracts.' Unlike so many law-books, especially on this subject, it is no mere digest of cases, but bears the impress of the mind of the writer from beginning to end." Law Journal. %* All standard Law Works are kept in Stock, in law calf and other bindings. 30 STEVENS AND SONS, LIMITED, TO RTS -continued. Radcliffe and Miles' Cases Illustrating the Principles of the Law of Torts. By FRANCIS R. Y. RADCLIFFE, Esq., K.C., and J. C. MILES, Esq., Barrister- at-Law. Demy8vo. 1904. Net, 12*. 6d. TRADE MARKS. Sebastian on the Law of Trade Marks and their Registration, and matters connected therewith, including a chapter on Goodwill ; the Patents, Designs and Trade Marks Acts, 1883-8, and the Trade Marks Rules and Instructions thereunder ; with Forms and Precedents ; the Merchandize Marks Acts, 1887-94, and other Statutory Enactments ; the United States Statutes, 1870-82, and the Rules and Forms thereunder ; and the Treaty with the United States, 1877. By LEWIS BOTD SEBASTIAN, Esq., Barrister-at-Law. Fourth Edition. By the Author and HAEEY BAIED HEMMING, Esq., Barrister-at-Law. Royal 8vo. 1899. \l. 10. " Stands alone as an authority upon the law of trade-marks and their regis- tration." Law Journal. " It is rarely we come across a law book which embodies the results of yean of careful investigation and practical experience in a branch of law, or that can be unhesitatingly appealed to as a standard authority. This is what can be said of Mr. Sebastian's book." Solicitors' Journal. Sebastian's Digest of Cases of Trade Mark, Trade Name, Trade Secret, Goodwill, &c., decided in the Courts of the United Kingdom, India, the Colonies, and the United States of America. By LEWIS BOTD SEBASTIAN, Esq., Barrister-at-Law. 8vo. 1879. 11. Is. " "Will be of very great value to all practitioners who have to advise on matters connected with trade marks." Solicitors' Journal. TRADE UNIONS. Assinder's Legal Position of Trade Unions. By G-. F. ASSINDEE, Esq., Barrister-at-Law. Demy 12mo. 1905. Net, 2s. 6d. " In this little work Mr. Assinder has with great clearness and ability sketched the legal position of trade unions." Law Journal. Draper's Trade Unions and the Law. By WABWICK H. DEAPEE, Esq., Barrister- at-Law. Demy 8vo. 1906. Net, 6d. Pennant's Trade Unions and the Law. By D. F. PENNANT, Esq., Barrister-at-Law. Royal 12mo. 1905. 5s. TRAMWAYS. Robertson's Law of Tramways and Light Rail- ways in Great Britain (3rd Edition of Button's " Tramway Acts of the United Kingdom ") : comprising the Statutes relating to Tram- ways and Light Railways in England and Scotland, with full Notes ; the Tramways and Light Railways Rules ; the Regulations, By-Laws and Memoranda issued hy the Board of Trade; the Standing Orders of Parliament ; the General Orders under the Private Legislation Procedure (Scotland) Act, 1899 ; and Disser- tations on Locus Standi and Rating. By GEOBGE S. ROBEETSON, M.A., Esq., Barrister-at-Law. Royal 8vo. 1903. II. 5s. " A very complete work. . . . The main Acts are annotated with care, and, so far as we can judge, with accuracy. . . . The book is well indexed." Solicitors' Journal. TRANSVAAL. The Statute Law of the Transvaal. Translated. Royal 8vo. 1901. 21. '2s. Transvaal Proclamations, 19001902. Revised. 1904. 8vo. 25s. TRUSTEES (Corporate). Allen's Law of Corporate Executors and Trustees. By EENEST KING ALLEN, Esq., Barrister-at-Law. Demy 8vo. 1906. 6s. TRUSTS AND TRUSTEES. Ellis' Trustee Acts, including a Guide for Trustees to Investments. By AETHTTE LEE ELLIS, Esq., Barrister-at-Law. Sixth Edition. By L. "W. BTENE, Esq., Barrister- at-Law. Roy. 12mo. 1903. 6*. Godefroi's Law Relating to Trusts and Trustees. Second Edit. By HENET GODEFBOI, of Lincoln's Inn, Esq., Barrister-at-Law. Royal 8vo. 1891. II. 12*. " The second edition of this work is a model of what a legal text-book ought to be. It is clear in style and clear in arrangement, and we can have little doubt that it will soon take the foremost place among text-books dealing with trusts." Law Times. %* All standard Law Works are kept in Stock, in law calf and other bindings. 119 & 120, CHANCERY LANE, LONDON, W.O. 31 VENDORS AND PURCHASERS. Dart's Vendors and Pur- chasers, A Treatise on the Law and Practice relating to Vendors and Purchasers of Real Estate. By the late J. HENBY DART, Esq. Seventh Edition. By BENJAMIN L. CHEERY, one of the Editors of " Prideaux's Precedents in Conveyancing," Gr. E. TYREELL, AETHTJE DICXSON and ISAAC MARSHALL, assisted by L. H. ELPHINSTONE, Esqrs., Barristers-at-Law> 2 yols. Royal 8vo. 1905. 31. 15s. " Much skill and learning have been expended on this edition, and the work remains a great conveyancing classic." Law Journal. " To the young and to the staid practitioner having any pretensions to con- veyancing work, we unhesitatingly say, Procure a copy at once." Law Students' Journal. " This work is a classic, and quite beyond our criticism. All we can do is to let our readers know that the late Mr. Dart's work is once more brought up to date, and to advise them to put a copy on their shelves without delay." Law Notes. "There are traces throughout the book of an unstinted expenditure of skill and labour in the preparation of this edition which will maintain the position of the book as the foremost authority on an extensive subject of paramount importance to lawyers whose business is concerned with the sale and transfer of property." Law Quarterly Review. Farrer's Precedents of Conditions of Sale of Real Estate, Re- versions, Policies, &c. ; with exhaustive Footnotes, Introductory Chapters, and Appendices. By FREDERICK EDWARD FABEEB, Esq., Barrister-at-Law. Royal 8vo. 1902. 16s. " Mr. Farrer has written a rare thing a new book which will be of real value in a conveyancer's library." Law Journal. " The notes are essentially practical and are evidently largely derived from experience, and the forms are adapted to recent decisions." Law Times. Turner's Duties of Solicitor to Client as to Sales, Purchases, and Mortgages of Land. Second Edition. By W. L. HACON, Esq., Barrister-at-Law. Demy 8vo. 1893. 10*. 6rf. Webster's Law Relating to Particulars and Conditions of Sale on a Sale of Land. With Appendix of Forms. Second Edition. ByW. F.WEBSTER, Esq., Barrister-at-Law. Roy. 8vo. 1896. 11. St. Webster's Conditions of Sale under the Land Transfer Acts. Being a Supplement to above. Royal 8vo. 1899. Net, 2s. WAR, DECLARATIpN OF. Owen's Declaration of War. A Survey of the Position of Belligerents and Neutrals, with relative considerations of Shipping and Marine Insurance during War. By DOUGLAS OWEN, Esq., Barrister-at-Law. Demy 8vo. 1889. 11. Is. Owen's Maritime Warfare and Merchant Shipping. ASummary of the Rights of Capture at Sea. By DOUGLAS OWEN, Esq., Bar- rister-at-Law. Demy 8vo. 1898. Net, 2s. WATER. Bartley's Metropolis Water Act, 1902. By DOUGLAS C. BAETLET, Esq., Barrister-at-Law, Author of ' Adulteration of Food." Royal 12mo. 1903. 6*. WILLS. Theobald's Concise Treatise on the Law of Wills. Sixth Edition. By H. S. THEOBALD, Esq., one of His Majesty's Counsel. Royal 8vo. 1905. 11. 15*. " Throughout the book we find paragraphs rewritten and alterations and corrections made, and we congratulate the author on the present as the best and most trustworthy issue of his work which has yet appeared." Solicitors' Journal. " Comprehensive though easy to use, and we advise all conveyancers to get a copy of it without loss of time." Law Journal. " Of great ability and value. It bears on every page traces of care and sound judgment." Solicitors' Journal. Weaver's Precedents of Wills. A Collection of Concise Precedents of Wills, with Introduction and Notes. Second Edition. By CHARLES WEAVES, B. A., Solicitor. Demy 8vo. 1904. 5*. " The notes, like the forms, are clear and, so far as we have tested them, accu- rate, and the book cannot fail to be of service to the young practitioner." Law Times. WINDING UP. Palmer's. Tide "Company Law." WORKMEN'S COMPENSATION. Vide "Employers' Liability." Robertson and Glegg's Digest of Cases under the Workmen's Compensation Acts. Royal 8vo. 1902. Net, 10*. WRONGS. Addison, Bigelow, Kenny, Pollock. Vidt " Torts." STEVENS AND SONS, LD., 119 & 120, CHANCERY LANE, LONDON. PREPARING FOR PUBLICATION. Addison's Treatise on the Law of Torts; or Wrongs and their Remedies. Eighth Edition. By WILLIAM EDWARD GOEDON and WALTEB HUSSEY GBIFFITH, Esqrs., Barristers-at-Law. (In the press.} Surge's Colonial Law: Commentaries on Colonial and Foreign Law generally and in their Conflict with each other and with the Law of England. Anew Edition. By A. WOOD RENTON, Esq., Puisne Judge, Ceylon, and G. G. PHILLIMOBE, Esq., Barrister- at-Law. In 4 vols. Royal STO. ( Vol. I. in the press.) Dicey's Digest of the Law of England with reference to the Conflict of Laws. Second Edition. By A. V. DICBY, Esq., K.C., B C.L. (In preparation.) Digest of Cases, Overruled, Approved, or otherwise specially considered in the English Courts. With extracts from the Judgments. By W. A. G. WOODS and J. EITOHIB, Esqrs., Barristers- at-Law. (In the press.) Engl ish Reports. A complete Re-issue of all the Decisions prior to 1866 in about 150 Volumes. Fifth Series. Vice-Chancellors' Courts. (Now publishing.) *+* Full prospectus on application, Everest and Strode's Law of Estoppel. Second Edition. By LANCELOT FIELDING EVEEEST, Esq., Barrister-at-Law. (In preparation.) Godefroi's Law relating to Trusts and Trustees. Third Edition. By WHITMOEE L. RICHABDS and JAMES I. STIRLING, Esqrs., Bar- risters-at-Law. (In the press.) Hart's Law of Banking. Second Edition. By HEBEE HAET, LL.D., Barrister-at-Law. (In tJ^e press.) Law Journal Analytical Digest of Cases, 1901-1905, By JAMES S. HENDEESON, Esq., Barrister-at-Law. (In the press.) Powles and Oakley's Law and Practice relating to Probate and Administration. Part I. The Law. By L. D. POWLES, Esq., Barrister-at-Law, District Probate Registrar, Norwich. Part II. The Practice, Contentious and Non- Contentious. By W. M. F. WATEETON and E. LOVELL MANSBEIDGB, Esqrs., of the Probate Registry, Somerset House. (In the press.) Rogers' Law and Practice of Elections. Vol. III. Municipal and other Elections and Petitions, with Appendices of Statutes, Rules, and Forms. Eighteenth Edition. By C. WILLOITGHBY WILLIAMS, Esq., Barrister-at-Law. (In preparation.) Sebastian's Trade Marks Act, 1905, and Rules, with Notes. By LEWIS BOYD SEBASTIAN, Esq., Barrister-at-Law, Author of "The Law of Trade Marks," &c. (In preparation.) Talbot and Fort's Index of Cases Judicially noticed, 1865 to 1905. Second Edition. By M. R. MEHTA, Esq., Barrister-at- Law. (In the press.) Wills' Theory and Practice of the Law of Evidence. Second Edition. By WM. WILLS, Esq. , Barrister-at-Law. (In preparation.) STEVENS AND SONS, LD., 119 & 120, CHANCERY LANE, LONDON. STEVENS AND SONS, LIMITED, 119 & 120, CHANCERY LANE, LONDON. Harris' Hints on Advocacy. Conduct of Cases, Civil and Criniiiuil. Classes of Witnesses and Suggestions for Cross- examining- them, &c., &c. Hv RICHARD HARRIS, K.C. Thirteenth .Edition. Royal \1rno. 1906. Price 7-v. Gd. cloth. Annual Practice (The), 1906. Edited by THOMAS SNOW, Barrister- at-Law; CHARLES BURNEY, a Master of the Supreme Court; and F. A. STRINGER, of the Central Office. Two Vols. Svo. Price, net, 25s. cloth. A Thin Paper Edition in One Vol., price, net, 25s. On Oxford India Paper, 3s. 6d. extra. A, B, C (The) Guide to the Practice of the Supreme Court, 1906. -By FRANCIS A. STRINGER, of the Central Office of the Supreme Court. Royal l'2mo. Price, net, 5s. cloth. Annual County Courts Practice (The), 1906. By His Honour JUDGE SMYLY, K.C., and W. J. BROOKS, Barrister-at-Law. Two Vol. Demy Svo. Price 25s. cloth. A Thin Paper Edition in One Vol., price 25s. On Oxford India Paper, 3s. 6d. extra. The Annual Digest for 1905. By JOHN MEWS, Barrister- at-Law. Royal Svo. Price 15s. cloth. The Annual Statutes for 1905. By J. M. LELY, Barrister- at-Law. JioyalSvo. Price 1 s. Qd. cloth. Palmer's Company Precedents. For use in relation to Companies subject to the Companies Acts. PAST I.: GENERA! FORMS. Ninth Edition. By F. B. PALMER, Barrister-at-Law, assisted by the Hon. C. MACNAGHTEN, K.C., and FRANK EVANS, Barrister-at- Law. Royal Svo. 1906. Price 36s. cloth. PAET LT. : wiypnre-Trp FORMS AND PRACTICE. Ninth Edition. By F. B. PALMER, assisted by FRA.NK EVANS, Barristers-at-Law. Royal Svo. 1904. Price 32s. cloth. PART in.: DERENTTTRES AND DEBENTURE STOCK. Ninth Edition. By F. B. PALMER, Barrister-at-Law. Royal Svo. 1903. Price 25s. cloth. Palmer's Company Law. A Practical Handbook for Lawyers and Business Men. With an Appendix containing the Companies Acts, 1862 to 1900, and Rules. Fifth Edition. By FRANCIS BEAUFORT PALMER, Barrister-at-Law. Royal Svo. 1905. Price 12s. 6d. cloth. Warburton's Selection of Leading Cases in the Criminal Law. With Notes. Third Edition. By HENRY WARBURTON, Barrister-at- Law. (Founded on " Shirley's Leading Cases.") Demy Svo. 1903. .Price 12s. 6d. cloth. Shirley's Selection of Leading Cases in the Common Law. With Notes. Seventh Edition. By RICHARD WATSON, Barrister-at-Law. Demy Svo. 1904. Price 16s. cloth. The Pocket Law Lexicon. Explaining Technical Words, Phrases and Maxims of the English, Scotch-aud Roman Law. fourth Edition. By JOSEPH E. MORRIS, Barrister-at-Law. Fcap.Hvo. 1905. Price 6s. 6d. cloth. Smith's Manual of Common Law. Comprising the Fundamental Principles, with useful Practical Rules and Decisions. Ticelfth Edition. By C. SPURLING, Barrister-at-Law. Demy Svo. 1905. Price 15s. cloth. Strahan's General View of the Law of Property. Fourth Edition. By J. A. STRAHAN, assisted by J. SINCLAIR BAXTER, Barristers-at- Law. Demy Sto. 1905. Price 12s. 6d. cloth. Disney's Law of Carriage by Railway. By HENRY W. DISNEY, Barrister-at-Law. Demy Svo. 1905. Price Is. 6d. cloth. Pennant's Trade Unions and the Law. By D. F. PENNANT, Barrister-at-Law. Royal \1rno. 1905. Price 5s. cloth. Browne & Powles' Law and Practice in Divorce and Matrimonial Causes. Seventh Edition. By L. D. POWLES, Barrister-at-Law, Probate Registrar, Norwich. Demy Svo. 1905. Price 25s. cloth. Rogers on Parliamentary Elections and Petitions; with Appendices of Statutes, Rules and Forms, and a PRECEDENT OF A BILL OF COSTS. Eighteenth Edition. By C. WILLOUGHBY WILLIAMS, Barrister-at-Law. Royal \1rno. 1906. Price II. Is. cloth. * \ _^____ % ** A Catalogue of New Law Works gratis on application. ( 3 ) A 000 691 984 9 STEVENS AND SONS, LIMITED, 119 & 120, CHANCERY LANE, LONDON. THE ENGLISH REPORTS WITHIN THE REACH OF ALL. Complete RE-ISSUE of ALL THE DECISIONS prior to 1866 in about 150 volumes. ff^HE objects of this great scheme of complete re-issue of all the English Reports up to the commencement of the Law Reports ifl 1866 are now well known; the House of Lords Series in 11 Volumes, the Privy Council Series in 9 Volumes, the Chancery Series in 27 Volumes, and the Rolls Court Series, in 8 volumes, are now ready, and the Vice-Chancellors Series is in course of publication. The Cases are noted with references to later decisions in which a particular case may have been overruled, or distinguished, and a reference to the titles of the digests in which similar cases will be found. _ ., ,. _ ... Consultative Committee : The Right Hon. THE EARL OF HALSBURY ; The Right Hon. LORD ALVERSTONE, GLC.M.Gr., Lord Chief Justiceof England ; The Right Hon. SIR RICHARD HENN COLLINS, Master of the Rolls ; Sir R. B. FINLAY, K.C. fl^f NOW ISSUED. HOUSE OF LORDS (1694 to 1866), complete in 11 vols. royal 8vo. Price net, half bound, 22. PRIVY COUNCIL (including Indian Appeals) (1809 to 1872), complete in 9 vols. Price net, half bound, 13 : 10s. CHANCERY (including Collateral Reports) (1557 to 1866), complete in 27 vols. Price net, half bound, 40 : 10s. ROLLS COURT (1829 to 1866), complete in 8 vols. Price net, half bound, 12. NOW PUBLISHING. VICE-CHANCELLORS (1815 to 1865), complete in about 14 vols. Price per volume net, half bound, 80s. The Volumes are not sold separately. full particulars sent on application to STEVENS & SONS, Ld,, 119 & 120, Chancery Lane, London, %* A large stock of Second-hand Law Reports and Text-books on Sale. ( 4 )