7669. Qualifying Expressions.-A letter of allotment is effectual or not, in committing the recipient to the shares allotted, according to the terms in which it is expressed; thus,

7670. Exonerating Words.-If a letter of allotment of shares contain a proviso that "the scrip will not be delivered till the applicant has signed the subscribers' agreement," the contract is incomplete until the applicant has so signed; but,

7671. Binding Words. When a letter of allotment of shares puts it, that "the further sum of £10 must be paid" (7644), it merely notifies the allottee's duty, which he is bound to perform, and he cannot set up his own default to discharge him from the contract.

ENTRY UPON THE REGISTER.

7672. Conclusive Evidence.-The entry of a person's name upon the register of members (7646) of a company, should be conclusive evidence that he is entitled to all the rights, and liable to all the risks, of a shareholder.

7673. Conflicting Evidence.—If a person's name is on the regis ter of a company contrary to his wish, his right to have his name removed will depend upon the facts of the case, which may be very complicated.

INCAPACITATED PERSONS.

7674. Original Entries.—If the name of a minor (3087), or other incapacitated person, is entered as an original entry upon the register of a company, such person may suffer the name to remain, and the company may in some cases be bound by it (3165), but the person is not bound unless a new obligation is undertaken by such person after removal of the incapacity; but,

7675. Transfers.-If a minor or a married woman become entitled, by will or intestacy, to shares in a company, the estate, of which such shares were previously part, remains entitled or liable in respect of such shares, in like manner as it was during the lifetime of the former holder.

INEFFECTUAL REGISTRATION.

7676. Conditional Registration.—When a person's name is put on the register of a company, pending some necessary thing to be done (7671) which is never done, such person, as against all parties (7615), can effectually claim to have his name removed.

7677. Concealment of Facts.-If a person whose name has been placed on the register of a company discovers that any material facts (7615) were concealed from him; or,

7678. Fraud.—Any fraudulent inducements offered to him, previously to his applying for and acceptance of shares,

7679. Return of Money.-He can effectually claim, as against the company (7682), to have his name removed, and to have all money returned to him which he may have paid; therefore,

7680. Entire Recoupment.-As long as a company continues to maintain its existence, any shareholder who can prove that he was induced to take shares by misrepresentation after incorporation (7392) has his remedy against the funds of the company, and may be entirely recouped all he has advanced; but,

AFTER FAILURE.

7681. Remedy Ceases.-When a company fails, and is wound up and proves to be insolvent, the remedy of defrauded shareholders against the company ceases; for,

7682. Rights of Creditors.-If a company is insolvent, and its creditors therefore remain unsatisfied, they have their remedy against all shareholders who are unconditionally (7672) on the register, whether they have been induced by misrepresentation or not (7677).

CERTIFICATES.

7683. Before Incorporation.—When shares in a company are allotted previously to incorporation, the certificates are invariably issued in the form of "scrip" (7685); but,

7684. After Incorporation.-When incorporation of a company is effected previously to allotments of shares being made, either scrip or share certificates (7718) may be issued.

SCRIP.

7685. Mere Undertakings.—Documents strictly called scrip are merely undertakings to deliver to the respective holders corresponding certificates of shares, so soon as they are ready for delivery; as set forth in the following form :—

No.

One Share of £10.
Deposit, £2.

No.-
THE

COMPANY, LIMITED.

The holder hereof, having paid the deposit of £2, is entitled to One Share in the above-mentioned company.

[Signed by an authorized person.]

7686. Original Holders.-Original holders of scrip who sell before obtaining a permanent certificate are sometimes placed in a very perplexing position; whilst,

7687. Purchasers.—Purchasers of mere scrip are sometimes enabled to evade their obligations.

SHARE CERTIFICATES.

7688. Permanent Evidence.—A share certificate is a permanent evidence that the person named therein is a member of the company; and the expression "member" signifies "shareholder."

7689. Form.-A share certificate may be drawn in the following form :

in the county of
is the
Company, Limited,

subject to provisions of the memorandum and articles of association, and that [the deposit of £2] has been paid in respect thereof. Given under the common seal (7478) of the company this

18-.

PERMANENT HOLDINGS.

day of

7690. For Investment.—When a company is projected for bonâ fide purposes, with really good prospects of success, and with a substantial body of persons to launch and back it, it usually excites but little observation. Shares are taken as bona fide investments, the calls are easily obtained and rapidly paid, and the company speedily proceeds to work upon the principle of minding its own business; but,

TEMPORARY HOLDINGS.

7691. Conspicuous Projects.-The original allottees of shares in conspicuous leading companies seldom purchase with a view to permanent investment; for,

7692. Speculation.—Modern practices have stimulated a desire to issue and purchase scrip or shares for the sole purpose of selling again at an advance; for instance,

7693. Premiums.—If a person procures an allotment of scrip or shares, upon which he has paid £2, he is in a position to sell it again for 415., making a profit of one shilling forthwith, which is called a premium, and so on in proportion to any number of hundreds or thousands of shares or pounds; and

7694. Further Advance.-It is notorious that many persons who give a premium for scrip or shares, do not do so under the impression that they are really worth a premium, but in the hope of selling them again at a further advance; thus,

7695. Regardless of Meris.-The first purchaser of scrip or shares gives 40s., the second 415., the third 42s., more or less, and

he who gives 42s. has no idea of holding, but seeks a purchaser at a further premium, thus making such transactions mere speculations of the day, without regard to the merits of the project, or the trustworthiness of the promoters.

7696. Immediate Consequences.-When the scrip or shares have changed hands many times, and the premium has been forced by excitement up to five, ten, fifteen, or even twenty per cent. as the case may be, the cunning of the sharpest speculators, and the credulity and endurance of the dullest dupes, are alike exhausted; no one wants to buy, every one wants to sell, a sudden collapse ensues, resulting in a panic, which may be confined to a small knot of speculators, or may extend far and wide, in proportion to the magnitude, notoriety, or otherwise of the company.

7697. Discount. The consequence of extravagant speculation in scrip or shares is that the share upon which 40s. was originally paid is sooner or later eagerly offered for 39s., 38s., or less, which is called being at discount; and

7698. Half-Price.—There are many instances of shares reaching a premium of ten per cent. by sheer speculation and nothing else, which have afterwards been sold for half, more or less, of the original deposit, though the company may have remained sound and reliable.

IMMEDIATE LIABILITIES.

7699. Real Owner.-After the first rush of speculation is over, with regard to scrip or shares, the serious reflection arises as to who is the real owner of each share, and who is responsible to the company for future calls.

7700. Liabilities on Scrip.-If a company insists upon registering an original allottee who has accepted scrip, such allottee has no remedy against the company; for,

7701. Vain Repudiation.—An original applicant for shares cannot repudiate his obligation to take up the shares when duly allotted to him, on the ground that he has sold his scrip; as,

7702. No Concern of the Company.-Selling scrip is a process with which the company has no concern ;

7703. Comparative Liability.—A bondsman might as well endeavour to get out of his liability by selling a copy of the bond.

7704. Purchasers Exonerated.-When an original allottee of scrip sells it to another person, the purchaser is not bound to take the shares, nor is any subsequent purchaser; and

7705. No Remedy.-A company has no remedy whatever against a person who has taken scrip by transfer;

7706. Title of Purchasers.-He is entitled to be registered if he comes forward and the company are willing to accept him as against the original allottee; but,

7707. No Alternative.—If he declines to present himself or to acknowledge his liability, the company have no alternative but to take the original allottee, and put his name upon the register; therefore, 7708. Necessary Persuasion.-When an original allottee of scrip has sold his scrip, and wishes to be clear of further responsibility, he must persuade the scrip-holder or some other person to be registered in his stead; and

7709. Necessary Consent.-He must obtain the consent of the company to accept and register such person; but,

7710. Continuing Liability.—If he cannot succeed in that arrangement, his liability must continue; for,

7711. No Compulsion.-There is no legal power to compel either the scrip-holder or the company.

7712. Popular Indifference.-There is abundant reason to believe that scrip is commonly bought and sold, in a spirit of the most reckless disregard of the responsibilities which attach to it; but,

7713. Personal Responsibility.-Responsible persons, who are induced to obtain allotments of scrip, and who are induced to sell such scrip, should never fail to secure a really responsible purchaser, and

7714. Binding Engagement.-To obtain from him a binding engagement to take up the shares and to incur all the liabilities attached to the possession of them; for, it will be observed that,

7715. Express Undertaking.-The mere holder of scrip (not being the original allottee thereof) is not liable for any future engagements in respect thereof, unless he expressly undertakes to that effect; or,

7716. Voluntary Registration.-Voluntarily puts himself forward to claim the shares and thereby to submit to be registered; notwithstanding,

7717. Ignorant Submission.—It appears likely that scrip-holders (not being the original allottees) have often incurred the liabilities of shares, in ignorance of the distinction between the non-binding effect of scrip, and the binding effect of shares duly registered.

CERTIFICATES.

7718. Property.-The rightful possession of a share certificate (7688) confers upon the holder a property in the share to which it refers; but,