TRANSFER AND TRANSMISSION OF SHARES 83
If a mortgagee of shares, holding a transfer in blank, pur-
ports to sell them, and hands over to his purchaser the
transfer still in blank, the fact that it is in blank affects the
purchaser with notice, and he gets no better interest than his
vendor (the mortgagee) had [France v. Clarke (1884), 26 Ch.
D. 257]. But if the mortgagee himself fills in the transfer, his
transferee, provided he be a bond fide purchaser for value
without notice, will get a complete title to the shares [Easton
v. London Joint Stock Bank (1887), 34 Ch. D. 95].

A forged transfer gives no rights to the shares to the alleged
transferee [Barton v. London & North-Western Railway (1889),
24 Q.B.D. 77]; but where a company acting on a forged
transfer has issued a certificate in the name of the transferee
and this has been passed on to a bond fide holder for value,
the company is estopped by its certificate from denying
that the person named in such certificate is the proprietor of
the shares, and he is entitled to damages against it [Balkis Co.
v. Tomkinson (1893), A.C. 396]. The Court will order the
Company to rectify its register where it has acted on a forged
transfer [re Bahia Railway (1868), L.R. 3 Q.B. 584].

By the Forged Transfers Acts, 1891 and 1892 (54 & 55 Vict.
c. 43; 55 & 56 Vict. c. 36), companies may make compensation
for losses arising from forged transfers, or transfers under
forged powers of attorney. Whether or not a company by
its articles adopts the Acts, or whether or not by resolution it
does so, none the less the Acts apply; and even although the
Acts have been adopted by the articles, or by resolution,
there is not the least obligation on the company to make any
compensation whatever. The compensation is payable out
of the company’s funds, and the company may, if it pleases,
establish a compensation fund by charging a fee on transfers,
not exceeding one shilling per £100 transferred, or by insur-
ance, or reservation of capital, or accumulation of income, or
in any other manner. The object of the Acts is to enable a
company to benefit a purchaser who finds himself deprived
of his shares owing to the registration of a forged transfer, or
a transfer under a forged power of attorney. If a company
pays compensation under the Acts, the rights of the person
compensated against the person who has caused the loss are
transferred to the company.

To provide for the cases of the death, bankruptcy, or
insolvency of a member, a transmission clause is almost
invariably inserted in the articles. It must be remembered
that transfer and transmission are two distinct things. Trans-
mission occurs on death, bankruptcy, &c., when the power
of transfer no loneer exists. and secures that there shall

Forged
Transfers.

Transmission