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*463] *The interpretation clause, s. 2, defines the word "shareholder" to mean "shareholder, proprietor, or member of the Company:" and s. 8 enacts that "every person who shall have subscribed the prescribed sum or upwards to the capital of the Company, or shall otherwise have become entitled to a share in the Company, and whose. name shall have been entered on the register of shareholders thereinafter mentioned, shall be deemed a shareholder of the Company." The interpretation clause gives the meaning of the word "prescribed," thus:-"the word 'prescribed' used in this Act in reference to any matter herein stated, shall be construed to refer to such matter as the same shall be prescribed or provided for in the special Act; and the sentence in which such word shall occur shall be construed as if, instead of the word 'prescribed,' the expression prescribed for that purpose in the special Act' had been used." By the 9th section of the special Act (18 & 19 Vict. c. cli.), it is provided that "the number of shares into which the capital shall be divided shall be 20,000, and the amount of each share shall be 57." To be a shareholder, a man must have subscribed at least 57. to the capital of the Company. [WIGHTMAN, J.-The conclusion is arrived at in a very embarrassing manner.] The rights and liabilities of a shareholder must be co-extensive. No one can possess those rights or incur those liabilities who has not subscribed for at least 51. to the capital of the Company. Then, the 6th section of the general Act provides that "the capital of the Company shall be divided into shares of the prescribed number and amount; and such shares shall be numbered in arithmetical progression, beginning with number one; and every such share shall be distinguished by its appropriate number." The words "or shall otherwise have *464] become entitled to a share in the Company," refer to *the modes of acquiring shares pointed out by the 14th to the 19th section, viz., by purchase, by devise, marriage, or bankruptcy. To constitute a man a shareholder, therefore, he must have subscribed for at least 51. to the Company's capital, or have become entitled to a share therein by purchase and transfer, or by devise, marriage, or bankruptcy, and his name must be entered on the register of shareholders. It may be said that Mr. Hawksford became a subscriber when he executed the parliamentary contract for 6007. That, however, was not a subscribing for shares within the meaning of the Act. The parliamentary contract was dated the 30th of December, 1854: at that time the special Act had not passed; no Company existed: what the defendant undertook by executing that contract, was, to pay the sum subscribed by him towards the expenses of procuring the Act and forming the Company. [BLACKBURN, J.-If the defendant had paid the 6007., would it not have been subscribed to the capital of the Company?] It is submitted that that would not satisfy the words of s. 8, "shall have subscribed the prescribed sum to the capital of the Company." [CROMPTON, J.-Does "subscribe" mean anything more than being owner of a portion of the capital of the Company?] No one can be said to subscribe for a share at a time when no shares have been created. Then it will be said that the defendant is a person who is mentioned in the 7th and 19th sections of the special Act. The 7th section incorporates certain persons (among whom is the defendant) and all other persons and corporations who have already subscribed

or who shall hereafter subscribe to the undertaking by the Act authorized, and their executors, &c. The defendant clearly would by virtue of that section become a member of the Company: and by s. 19 he is named as one of the first directors. The election of future *di[*465 rectors is provided for by the 83d and following sections of the general Act. The qualification of a director by s. 17 of the special Act is, the possession by the party in his own right of 100 shares at least in the undertaking: and the 85th section of the general Act provides that "no person shall be capable of being a director unless he be a shareholder, nor unless he be possessed of the prescribed number, if any, of shares." Though a member of the Company, therefore, and a director, the defendant was not a qualified director: he had no shares appropriated to him or to any one else until the 15th of July, 1857. Then, is the case at all advanced by his having voted as a proprietor at a meeting of the Company? He could only legally vote in respect of shares. If no shares had then been appropriated or existed, he did a very irregular thing: but his usurpation could neither give him any rights nor impose upon him any liability. Then we are told, that, on the 15th of July, 1857, certain specified shares were appropriated to the defendant. That alone would not make him a shareholder, unless it can be held to be equivalent to a subscription by him. [BLACKBURN, J.-Shareholders may vote by proxy: s. 83. How can they do so unless they are shareholders? Does not that show that the legislature contemplated that there might be "shareholders" before the subsequent steps had been taken?] The word "shareholder" is evidently used very loosely. The first thing necessary to the creation of shares is the sealing of a register. The provisions as to the register are to be found in s. 9 of the general Act, which enacts that "the Company shall keep a book, to be called the 'Register of Shareholders;' and in such book shall be fairly and distinctly entered from time to time the names of the several corporations and the names and additions of the several persons entitled to shares in the Company, together with the number of shares to which such shareholders shall be respectively entitled, distinguishing [*466 each share by its number, and the amount of the subscriptions paid on such shares; and the surnames or corporate names of the said shareholders shall be placed in alphabetical order; and such book shall be authenticated by the common seal of the Company being affixed thereto; and such authentication shall take place at the first ordinary meeting, or at the next subsequent meeting of the Company, and so from time to time at each ordinary meeting of the Company:" and by s. 28, the production of the register of shareholders shall be primâ facie evidence of such defendant being a shareholder, and of the number and amount of his shares." That which is relied upon as the register here has none of the requisites pointed out by s. 9. It does not state the number of each share allotted to the defendant; nor does it give the defendant's addition. Forms of this sort should be strictly adhered to. "The books of the Company," says Lord Brougham, in Bain v. The Whitehaven and Furness Junction Railway Company, 3 House of Lords Cases 1, 22, "are made evidence for the Company, and unless rebutted by counter-evidence, will be sufficient to warrant a verdict in each case. It must be admitted that this is a very great

privilege, and an exception to the ordinary rules of evidence. By those rules, and the rules of common sense and justice, what a man writes is evidence against him, but not evidence in his favour: but here the proposition is reversed. So that the Company, by writing in their books that 'A. B. holds' a certain number of shares, can go into Court and make A. B. answerable for them, and can produce the entry as evidence against him. This is a great privilege; and, in order to justify the exercise of it, the conditions on which it is given, namely, the *provisions of the statute as to the making of these entries,

*467] must be strictly complied with: and I hold that it is much.

safer to consider each of those provisions as a condition precedent, as a provision imperative, and not merely directory, on account of the great importance of the privilege itself, and on account of its being an exception to all ordinary rules of evidence. If, therefore, I had not found a distinct compliance with the requisitions of the 9th section, I should not have considered that the 29th section (a) was of any avail to the appellant in making these books evidence for him, and against his adversary." The judgment of the Court below in this case goes far beyond what was laid down by this Court in The London Grand Junction Railway Company v. Freeman, 2 Scott N. R. 705, 2 M. & G. 606 (E. C. L. R. vol. 40). Erle, C. J., in giving judgment, says: "The question is raised, whether there can be a holder of a share within the 27th section, without a register of shareholders authenticated by the seal of the Company affixed at an ordinary meeting. This question we answer in the affirmative. We consider that all requisites to make a shareholder are complied with except the sealing; so that the question is, whether it is impossible to hold a share unless the name of the holder is in a register of shareholders lawfully sealed. We find no such enactment: and, in respect of transferrees, we think they may be holders without this requisite; and although, as above said, the shares must be numbered and specifically appropriated, and this process requires the formation of a book analogous to a register, still it may be done without authentication by sealing at an ordinary meeting. The argument for the defendant rests on s. 8, which describes a *468] *shareholder to be, 'every person who shall have subscribed, &c., or who shall have otherwise become entitled, &c., and whose name shall have been entered on the register of shareholders.' This is description rather than definition, as it is clear that a transferree is entitled to a share, and may be a shareholder, without his name being on the register of shareholders, if it is on the register of transfers. We think the statute contemplated the process above described of numbering and appropriating, and may well have intended that an inchoate register-book bonâ fide intended to be valid might be taken for this purpose as a register de facto, although not properly sealed; and also that the Act probably intended names to be added from time to time in intervals between the meetings for sealing. There is no decision on the point in respect of an original shareholder; the dictum relating thereto in the Newry and Enniskillen Railway Company v. Edmunds, 2 Exch. 118,† is extrajudicial. The principle laid down in The Southampton Dock Company v. Richards, 1 Scott N. R. 219, 1

(a) Of the 8 & 9 Vict. c. 17, the Scotch Companies Clauses Consolidation Act, the 8th and 29th sections of which correspond to the 8th and 28th of the 8 & 9 Vict. c. 16.

M. & G. 448 (E. C. L. R. vol. 39), and adopted in The London Grand Junction Railway Company v. Freeman, 2 Scott N. R. 705, 2 M. & G. 606 (E. C. L. R. vol. 40), that a book bonâ fide intended to be a register, though materially defective, should operate as a register, in an action for calls, on account of the inconvenience which would arise if a debtor could defeat the claim upon him by resorting to formal defects in the register of shareholders, supports our decision." That goes to repeal the statute altogether. The dictum of Parke, B., there referred to, seems to have been very well considered. After referring to the several sections, the learned Baron says: "The result is, that there is no register until after it is sealed; and no person who was not an original subscriber can be liable as a shareholder, unless his name is on a sealed register. *Probably that is required both in the case [*469 of an original subscriber and a transferree of scrip. It is only necessary in this case to say that a transferree is not liable for calls until after his name is entered on a sealed register." It is not unworthy of remark that this general provision, prescribing a particular limit of time within which the seal can be validly affixed, was passed at a time when there had been several private Acts passed containing precisely the same enactment: see the South Eastern Railway Act, 6 & 7 W. 4, c. lxxv., s. 109, which is the common form of such provisions. The object was, to remedy a great inconvenience. If the register be sealed in due time, the shareholders have the means of knowing whether the persons acting as directors, and assuming to make calls, are really qualified to act as such. The time of sealing is essential. Here, the requisites of the Act were not observed either as respects the form of the register, the time of sealing, the numbers of the shares, or the additions of the shareholders. [WIGHTMAN, J.-The result of your argument would be, that, if the first general meeting was not held within the prescribed time, the whole scheme becomes abortive and falls to the ground.] All schemes which are worth keeping on foot will observe the regulations. Those which are got up for purposes of fraud may very properly sink. [CROMPTON, J.-To sustain your argument, you want negative words, which are not in the clause.] The statute provides that the list or register shall be authenticated in a particular manner. [WIGHTMAN, J.-The 9th section of the general Act enacts that the authentication of the register by affixing thereto the seal of the Company shall take place at the first ordinary meeting or at the next subsequent meeting of the Company; and the 15th section of the special Act provides that "the quorum of any general meeting of the *Company shall be such number of sharehold. ers as shall hold in the aggregate not less than 30007. in the [*470 capital of the Company." How are you to constitute a quorum? The register cannot be sealed until there there is a quorum: and yet it is contended that there can be no shareholders until there is a quorum!] The statute creates the parties forming the Company shareholders to that limited extent. [CROMPTON, J.-Is the sealing anything more than an authentication for the purpose of proof; not that it is an ingredient in the making of the book?] To hold that there can be shares before the list is duly made out and sealed at a general meeting, will altogether defeat the objects of this very salutary provision.

Mellish, Q. C. (with whom was Montague Smith, Q. C.), was stopped by the Court.

WIGHTMAN, J.-We are all of opinion that the judgment of the Court of Common Pleas should be affirmed, upon the ground stated by Erle, C. J., in the judgment, in which he says, "The question raised is, whether there can be a holder of a share within the 27th section, without a register of shareholders authenticated by the seal of the Company affixed at an ordinary meeting. This question we answer in the affirmative. We consider that all requisites to make a shareholder are complied with except the sealing: so that the question is, whether it is impossible to hold a share unless the name of the holder is in a register of shareholders lawfully sealed. We find no such enactment; and, in respect of transferrees, we think they may be holders without this requisite; and although, as above said, the shares must be numbered and specifically appropriated, and this process requires the formation of a book analogous to a register, still it may be done without authentication by sealing at an ordinary *471] meeting." We are of the same opinion. The sealing may be necessary to make the register evidence, but not for the purpose of making a party a shareholder. Upon that short ground, we think the judgment of the Court below should be affirmed.

Judgment affirmed.

RALSTON v. SMITH. Nov. 28.

An invention of "improvements in embossing and finishing woven fabrics and in the machinery or apparatus employed therein," as described in the specification, consisted in the use of rollers having "any design grooved, fluted, engraved, milled, or otherwise indented upon them." A disclaimer was afterwards entered, from the statements wherein it appeared that the effect desired could only be produced by the use of a certain species of roller not particularly described in the specification viz. a roller having circular grooves round its surface. All other rollers were expressly disclaimed:

Held, by the Exchequer Chamber,-affirming the judgment of the Court below, that such a disclaimer was in effect an attempt to turn a specification for an impracticable generality into a grant for a specific process which was comprised within the generality in one sense, but could not be discovered to be there without going through the same course of experiment which led to the discovery of the specific process in the disclaimer: and, consequently, that the disclaimer was void, as an attempt to extend the patent.

THIS was an action for the infringement of a patent for "Improvements in embossing and finishing woven fabrics, and in the machinery or apparatus employed therein."

The cause was tried before Erle, C. J., at the sittings at Westminster after Trinity Term, 1860, when a verdict was found for the plaintiff, subject to a motion to enter a verdict for the defendant upon certain points reserved. A rule was accordingly obtained, and after argument and time taken to consider, made absolute: vide 9 C. B. N. S. 117 (E. C. L. R. vol. 99).

The substance of the case was as follows:-The use of a roller and a bowl for calendering woven fabrics, and the means of regulating the relative speed of their motion, were well known. In the process of calendering, the roller was smooth, and the speed of the roller and

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