202 F. 408 | 6th Cir. | 1913
(after stating the facts as above). The important question is whether Shaw can compel the Brewing Company to accept a surrender of his certificates and execute and deliver new ones in his name. He obtained his certificates some 16 years before notifying the company of his purchase or demanding a transfer; and this was about 4 years after the company had, in obedience to an order of court, entered upon its register a transfer of these shares to Byrne, and 3 years after Byrne had disposed of the shares and ceased to be a member of the company. It is true that each of Shaw’s certificates contains the statement: “No transfer of any of the above shares can be registered without the production of this certificate.” It is also true that each of these instruments certifies that Grant is the “proprietor” of the shares named, “subject to the articles of association and the rules and regulations of the company.” The twenty-ninth paragraph of the articles- of association provides that transfers of shares shall be “signed both by the transferror and the transferee”; but transfers were permissible in “any usual common form of instrument of transfer,” and we think, if Shaw’s omission in the present instance to sign as transferee were the only difficulty, he could solve it simply by signing the transfer. In re Tahiti Cotton Company, 17 Eq. Cas. 273.
“If tbe name of any person, is, without sufficient cause, entered in or omitted from the register of members of any company under this act, or if default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member of the company, the person or member aggrieved * * * or the company itself, may, as respects companies registered in England * * * by motion in any of Her Majesty’s Superior Courts of law or equity, or by application to a judge sitting in chambers, * * * apply for an order of the court that the register may be rectified, and the court may either refuse such application * * * or it may, if satisfied of the justice of the ease, make an order for the rectification*411 of the register. * * * The court may, in any proceeding under this section, decide on any question relating to the title of any person who is a party to such proceeding to have his name entered in or omitted from the register, whether such question arises between two or more members or alleged members. or between any members or alleged members and the company, and generally the court may in any such proceeding decide any question that it may be necessary or expedient to decide for the rectification of the register.”
The Companies’ Act provides for the organization of companies such as this, and it is not disputed that this company was so organized; nor is the settled principle disputed (indeed, it is in effect relied on in support of one portion of the argument for appellant) that the applicable provisions of the act must be regarded as entering into and forming part of the company’s charter. If it be assumed for the moment that the principle can be safely applied in a case like this, Shaw’s rights as stated in his certificates of stock must be considered in connection with section 35 of the Companies’ Act. Stated differently, Shaw’s right to rely upon the representation contained in the certificates of stock that transfers of the shares could not be registered without production of the certificates was at least in terms qualified by the power vested in the courts of England by summary proceeding, upon motion of any “person or member aggrieved * * * or the company itself,” to order the register of members to be rectified wherever a name was without sufficient cause omitted therefrom or when unnecessary delay took place in entering on the register “the fact of any person having ceased to be a member.” Since Grant and Shaw were consciously dealing with shares of stock in an English corporation, which involved certificates that admittedly could not be replaced by new ones, with a transfer on the register of members, except in London, it is plain enough that Shaw’s right to the relief prayed is to be tested in large measure by such laws of England as were designed to form part of appellee’s charter. Johnson v. Charles D. Norton Co., 159 Fed. 361, 363, 86 C. C. A. 361 (C. C. A. 6th Cir.); Bond v. John V. Farwell Co., 172 Fed. 58, 64, 96 C. C. A. 546 (C. C. A. 6th Cir.). The rule in this behalf is the same as it would be if the appellee company had been created by the law of one of our own states, say other than the state of Michigan where Shaw at the time of the transfer resided and still resides. Bank of Augusta v. Earle, 13 Pet. at page 591, 10 L. Ed. 274. The question in that case was “whether, by the comity of nations, and between these states (Georgia' and Alabama), the corporations of one state are permitted to make contracts in another” (13 Pet. 588, 10 L. Ed. 274); and immediately following the statement of the question the' Chief Justice said:
“It is needless to enumerate bere tbe instances in which, by the general practice of civilized countries, the laws of the one will, by the comity of nations, be recognized and executed in another, where the rights of individuals are concerned.”
Justice Peckham said of that case in Iglehart v. Iglehart, 204 U. S. 487, 27 Sup. Ct. 332, 51 L. Ed. 575:
“Ever since the case of Bank of Augusta v. Earle, * * * this doctrine of comity between states in relation to corporations lias been steadily maintained, and it has been recognized by this court in many instances.”
“From the nature of the stock of a corporation, which is created by and under the authority of a state, it is necessarily, like every other attribute of the corporation, to be governed by the local law of that state, and not by the local law of any foreign state.”
It has been held, as in Guilford v. Western Union Telegraph Co., 59 Minn. 332, 343, 61 N. W. 324, 326 (50 Am. St. Rep. 407), relied on by appellant, that a general law of one state prescribing simply a remedy will not be regarded as binding in another state. The question in that case was whether a resident of Minnesota was entitled to a decree to compel a New York corporation, conducting only its telegraph business in the former state, to issue new certificates of stock in lieu of cértificates proved to have been lost 12 years before. The company offered to deliver the new certificates upon receiving a bond of indemnity, claiming that one of its rules required such indemnity. Failing to prove the existence of such a rule, reliance was placed upon a general law of the state of New York which provided a method of obtaining a new stock certificate in case of loss of the original. It was claimed that this furnished the exclusive remedy; but it was held that this was “merely one of the general laws and regulations of the state of New York affecting the remedy, which govern only within the limits of the state enacting them.” True, that statute authorized a summary proceeding to be taken in the Supreme Court and an order to be made requiring the corporation to deliver new certificates upon depositing such security or filing a bond in such form and with such sureties as the court might require. 5 Rev. Stat. of. N. Y. (8th Ed.) p. 4103. But no such proceeding had been taken or order made. Manifestly that situation was quite different from this one. Here we have a court order actually made and executed, and new certificates issued in obedience to it, which (so far as appears) passed into the hands of third persons without notice of'any right in Shaw.
We are constrained to believe that section 35 must be regarded as an integral part of the appellee company’s charter, and that Shaw was chargeable with knowledge of the limitation which that section in effect imposed upon his rights under the certificates of stock. Copin v. Adamson, L. R. 9 Ex. 345; Bank of Australasia v. Harding, 9 C. B. 686; Bank of Australasia v. Nias, 16 A. & E. 733, 734. The Companies’ Act prescribes the mode in which such corporations as this shall be created. The act states the powers and limitations in detail. It will not do to include some portions, as learned counsel for appellant do, and attempt to exclude others. The portions that are distinctly applicable, like section 35, should be interpreted rather than ignored. In determining the true construction of the section, we should be governed by the decisions of the courts of Great Britain. Elmendorf v. Taylor, 10 Wheat. 158, 6 L. Ed. 289, opinion by Chief Justice Marshall. It should perhaps be stated by way of precaution that it is not meant to say that laws of a foreign nation will be so recognized and enforced, which are repugnant to the local laws or policy.
“Looking at all the words of section 35, and giving them a reasonable construction, I think that the Legislature intended to give the court jurisdiction to make an order so as to decide questions of title, trusting to the discretion of the court not to decide in this summary manner any intricate or difficult question of title; but that, if the court think fit, they have jurisdiction to make the order in all cases.”
See report, also, of same case as affirmed in the Court of Appeai, 46 Law Jour. 394; also, Re Kimberley North Block Diamond Co., 59 Law Times, 579; Lindley on Companies (5th Ed.) 122; 3 Enc’l of Laws of England, 306.
“Tile instrument of transfer shall be presented to the company, accompanied with such evidence as the directors may require to prove the title of the transferror, and thereupon the company shall register the transferee as a member.”
The court order in practical effect operated as an evidential sub • stitute for these absent certificates. If the Companies’ Act had so required and steps had been taken to malee Shaw a party to the proceeding by publication, as was required by the statutes under con
The most that Shaw can urge or does urge is that the company is bound by its representation that no transfer of the shares could be registered without the production of the certificates. The basis of liability upon such a representation is estoppel. Joslyn v St. Paul Distilling Co., 44 Minn. 183, 185, 46 N. W. 337. Indeed, we are bound to hold that this is the true theory of liability upon the entire certificate. Moores v. Citizens’ Nat. Bank of Piqua, 111 U. S. 156, 165, 4 Sup. Ct. 345, 28 L. Ed. 385. But estoppel or any other theory of liability cannot be invoked in the presence of knowledge, either actual or constructive, that the company’s representation was so qualified as that a designated court could summarily relieve against it. Indeed, such fact must be read into the representation. The validity of such a-qualification is at last founded on consent. We do not know of any policy of this country that would prevent the'giving of such consent; nor of any reason why the maxim “Consensus facit legem” should not be applied in such-a case as this. Calloway v. People’s Bank of Bellefontaine, 54 Ga. 444, 449; Copin v. Adamson, supra, p. 354 (L. R. 9 Ex. 345); Feyerick v. Hubbard, 71 L. J. 1902, K. B. 509, 511; Rousillon v. Rousillon, 14 Chanc. Div. 371. This is not a case of negligence or of deception or fraud on the part of the company. The company did not of its own volition change its register; it refused to do so; it simply yielded obedience to the order of the court. After executing the court’s order, the company was obviously bound to deliver certificates for the stock in favor of Byrne. In saying this, it is not meant to pass upon any right of Shaw as against Byrne.
Further, to urge the doctrine of estoppel or any other theory of liability against the company is to overlook the doctrine of laches as respects Shaw. He trusted Grant, while the company refused to trust either Grant (through his last transfer) or’Byrne. Shaw’s conduct enabled Grant to perpetrate the only fraud that appears to have been committed. Grant’s transfer to Shaw described 100 shares, but he delivered certificates for only 60. This was calculated to excite seasonable inquiry both as to a further certificate and Grant’s failure to observe the obligation of his transfer; and yet Shaw seems to have been as indifferent in these respects as he was in regard to notifying the company of his holdings. Grant made his transfer to Byrne 10 years before the court was called upon to make. its order; another year elapsed between that time and the time Byrne disposed of his stock; and still three years more were allowed to pass before Shaw made his demand for a transfer. If Shaw had simply apprised the company, at any time during the 12 years that passed between the time he obtained the certificates and the date of the court’s order, that he was the owner of the shares described in the certificates in dispute, his case would have been entirely different. Westminster Bank
The decree below is affirmed, with costs.