7 &

SECRETARIAL PRACTICE
especially in the provinces, or, in the case of the London Stock
Exchange, where the transfer office of the company is not in
London or is at a distance from the Stockbroker’s office. On
the other hand, obviously the Stock Exchange authorities
are not in a position to detect even a gross and clumsy forgery
of a share certificate if such should be presented to them,
and, to that extent, it may be argued that the practice is
not such a safe one from the public point of view, as when
the Company’s own officials alone certify transfers.

The legal effect of certification has been several times
considered in the Courts, and the effect of some of the decisions
is here summarised.

By such words as ‘certificate lodged at the company’s
office,” stamped upon a transfer of shares, no more is meant
than that certain documents apparently in order, and showing
primd facie that the transferor is entitled to the shares,
have been deposited with the company. They do not amount
to a warranty either of the transferor’s title or of the validity
of the documents. In the absence of fraud, even if no certifi-
cate has in fact been lodged, the company is not liable for the
careless representation that one has been deposited [Bishop
v. Balkis Co. (1890), 25 Q.B. D. 512]. And where the secretary
has fraudulently certified upon a transfer that certificates have
been lodged at the company’s office, the company is not
estopped from setting up the true facts if it has not authorised
the fraud [George Whitechurch v. Cavanagh (1902), A.C. 117].
But certification by the proper officer of the company on a
transfer of shares, which purports to be a transfer of fully
paid shares, has been held to imply that certificates have
been produced showing the ownership of fully paid shares,
and to estop the company from denying that the shares are
fully paid [re Concessions Trust, McKay's Case (1806), 2
Ch. 757].
Balance
Receipt.

If the certificate of shares lodged with the transfer for
certification includes a larger number of shares than is
included in the transfer, the secretary will issue to the seller
or his broker a balance receipt. This will entitle the seller
in due course to receive a certificate for the unsold balance
of his shares. These balance receipts should be in a book
with counterfoils or with forms for duplicating by means of
carbon sheets. They should always be signed by a responsible
official. A form is given in Appendix F (Form 17). The
practice with regard to the preparation of certificates for the
balance of shares varies in different offices. Some companies
contend that to make out a balance certificate in respect of