Scottish Court of Session Decisions

The defenders averred—“On 27th July 1887 the defenders received from the pursuer a transfer of said stock, which ex facie appeared to be granted by the said John Rayner in favour of the pursuer. The stock certificate in name of the said John Rayner was sent along with the transfer, and the defenders were requested to register the transfer in name of pursuer. At the same time the pursuer sent to the defenders' registrar a transfer of said stock by him to a Mr G. L. Payne, and requested that the registrar should certify this transfer. The said transfer was not executed by the transferee Payne, and the object of the pursuer in asking the registrar to certify the transfer was to enable the pursuer to get payment of the price from the purchaser G. L. Payne.” (Stat. 2) “Simultaneously with the receipt of the transfer and stock certificate by the defenders they received from the said John Rayner, the transferor, a post-card, of which the following is a copy—‘S.W., 4 Passmore St., Chester Square, London. The Secretary, &c., Caledonian Ry. Co., Glasgow. Sir,—There is a man named Shaw, an outside broker, illegally disposing of my stock; it is not to be transferred out of my name.—Yours very truly, Jno. Rayner.’” (Stat. 3) “The registrar of the defenders sent to pursuer a copy of the above post-card on the day it was received, viz., 27th July 1887, and intimated that in the circumstances he must defer doing anything until the matter had been arranged between the pursuer and the said John Rayner.” (Stat. 4) “In reply to the above letter the pursuer on 28th July 1887 wrote to the defenders, stating that he need hardly say he should be very unlikely to dispose of stocks illegally. He also intimated that the transfers, &c., were duly completed, and that there could be no question as to his title, and gave notice that Mr Rayner had transferred the £80 stock to him. Subsequently on 30th September the pursuer asked the defenders' registrar to return the transfer which he had executed into the name of Mr G. L. Payne, and this was done.” (Stat. 5) “A copy of the above letter was on 4th August 1877 transmitted by the registrar of the defenders to the said John Rayner, and he was asked if he still adhered to the terms of his post-card of 26th July, and to that letter he replied on 6th August in the following terms—‘I have nothing to add to mine of the 26th. Mr Shaw has no claim to my stock.—Yours very respecty. Jno. Rayner.’ The defenders also received from the said John Rayner a post-card in the following terms—‘Gand, Belgium, Oct. 13, 1887.—Sir,—I am surprised you have not sent divd. as usual; the man Shaw has no legal claim on my stock. I suppose I must take proceedings against him for its recovery.— Yours faithfully, Jno. Rayner.’” (Stat. 6) “It is the practice of the defenders, in common with all other railway companies and other corporations, to issue in the case of every transfer received by them for registration a notice to the transferor of the receipt by the defenders of the transfer, the object of the notice being to give the transferor an opportunity of stopping the registration of the transfer. No such notice

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required to be issued by defenders about the stock in question as the objection of the said John Rayner to the registration of the transfer was received simultaneously with the transfer itself.” (Stat. 7) “The pursuer has not furnished to the defenders any explanation about the acquisition by him from the said John Rayner of the stock in question, nor has he produced any evidence to establish the bona fides of the transaction although asked by defenders to do so.”

The pursuer pleaded—“(1) The pursuer being the transferee of the stock formerly held by the said John Rayner in virtue of a valid probative transfer, the defenders are bound to give effect to the said transfer, and to register the same, and issue a certificate or scrip in favour of the pursuer, all in terms of the prayer of the petition. (2) The statements of the defenders are irrelevant, and ought not to be admitted to probation.”

The defenders pleaded—“(1) All parties are not called. (2) No jurisdiction. (4) The defenders being interpelled by the notices from the said John Rayner from registering the transfer of the stock in question, decree of absolvitor ought to be pronounced. (5) The pursuer having failed to satisfy the defenders of the bona fides of the transfer, the action is premature, and the defenders ought to be assoilzied.”

No formal intimation of the action was made to Mr Rayner.

On 13th January 1888 the Sheriff-Substitute ( Guthrie) sustained the defenders' first plea-in-law, and dismissed the action.

“ Note.—… I am of opinion that the true question is between the pursuer and his transferor Mr Rayner, and that the company defending is not bound to register the transfer in the face of his interpellation. Two courses might be open here, viz. (1) to dismiss, or (2) to sist the process until either the question shall be determined in other proceedings between the pursuer and Rayner, or Rayner, on intimation, shall choose to appear in this action and have the issue between him and the pursuer determined. Rayner, however, is out of the jurisdiction, and most probably would not choose to sist himself if called upon to do so. And I do not understand that the pursuer desires to have an opportunity of intimating the dependence of the action to him with that view. I therefore think that the natural result of sustaining the defenders' first plea-in-law is the dismissal of the action.

“If both parties desired that Mr Rayner should be certified of the dependence of the action, and that if he failed to make good his objection to the transfer registration would follow, there might be convenience so far as they are concerned in adopting that course. But they do not so concur, and even if they did it might be a hardship for an Englishman to be coerced into a litigation in Scotland about matters which may involve questions very remote from this £80 of railway stock.”

The pursuer appealed to the Court of Session.

Argued for the pursuer—The company ought not to be allowed to defend a man who neglected to come forward and defend himself. The transfer, which was admittedly granted by Rayner, was ex facie good. All the cases relied on by the defenders, in which a company had been found liable for wrongly registering a person as a shareholder, were cases of forged transfers. No such case was averred here. There was no necessity for calling Rayner in this action; the decree sought could only go out against the company.

Argued for the defenders—The company were not the true defenders here. Possibly it was right to call them for their interest, but the transferor of the shares was the proper defender. The pursuer might have raised his action in the English courts if there was no jurisdiction against Rayner in Scotland. A company was not bound to register transfers immediately they were sent to them, particularly where the transferor objected to their doing so, as he did here. If they registered wrongly, they would be liable to the extent of the shares— Société Générale de Paris v. Walker, 1885, 11 L.R., App. Cas. 20, Lord Blackburn, pp. 35 and 41; Bahia v. San Francisco Railway Company, 1868, 3 L.R., Q.B. 584, Blackburn J., p. 596, Mellor J., p. 597, and Lush J., p. 598. Forgery was not suggested here, but they had averred enough to show that they had good reason for delaying the transfer till the truth was discovered as to Shaw's dealings with the shares.

At advising—