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SECRETARIAL PRACTICE
by the Registrar, in the case of companies registered in
England (s. 101). ‘The object of the section,” says Lord
Wrenbury, ‘is (1) to relieve the company from taking notice
of ‘equitable interests in shares, and (2) to preclude persons
claiming under equitable titles from converting the company
into a trustee for them’ (Buckley on the Companies Acts, 11th
edition, p. 254).

A company receiving notice of any lien or equitable interest
should accordingly decline to recognise it. A suitable form
of letter by the company, in reply to a notice of lien or equit-
able interest, is given in Appendix F (Form 29).

Articles of association usually contain a provision which
goes further than s. 101, and is to the effect that the com-
pany shall be entitled to treat the registered holder of a
share as the absolute owner, and shall not be bound to
recognise any equitable or other claim to, or interest in,
such share on the part of any other person. Such an article
appears to be ineffectual, at all events, so far as non-members
of the company are concerned; for notice of the interest in
shares by a person, other than the registered holder, will
affect the company in its capacity as a trader, although it
does not affect it in its duty of keeping the register [Mackereth
v. Wigan Coal Co. (1916), 2 Ch. 293].

The holder of an equitable interest in shares may get
the Court to interfere in his behalf [Binney v. Ince Hall
Coal Co. (1866), 35 L.J. Ch. 363], and he can restrain the
company from allowing the shares to be transferred by taking
proceedings under the Rules of the Supreme Court, Order 46,
Rule 4, if he so desire. Otherwise the company is not
bound by any notice of equitable interests which it may
receive, so that successive mortgagees will date entirely
according to priority of charges [Société Générale v. Walker
(1886), 11 A.C. 20]. If a company, having a lien over its
shares for all debts due from the holder thereof, receives
notice that another person holds the shares as security
for a debt due, the company cannot claim priority for a debt
which became due to the company from the holder after such
notice has been received [Bradford Banking Co. v. Briggs
(188%), 12 A.C. 29].

As between the registered shareholder and his cestus que
trust in their relation to the company, the former is the person
who is liable for all payments which have to be made in respect
of the shares, and this liability is not limited to the amount
of the trust estate [see Muir v. City of Glasgow Bank (1879),
4 A.C. 337]. The beneficial holder is, however, bound to
indemnify the registered holder, and at any rate where he is