SELLING SHARES.

Inangahua Times, Volume XI, Issue 1739, 4 August 1886, Page 2

SELLING SHARES.

The ease of Gillies v. Palmer, which was tried in Sydney before his Honor Mr Justice Windeyer »nd a jury of four on June 2o is one which innst have excited considerable interest among the. pnMic generally, and among stock and share broken in particular. Mr Gillies was a registered holder of 100 shares in the Pacific Marine and Fire Insurance Company. He. sold them through n broker to the defendant. Mi- Palmer, who is also a broker Mr Phliiipiaccepted a J»!auk transfer, and paid for the shares in cash, l»ut instead of filling in. his own name, or using reasonable diligence to ftud a |>nr chaser, he held tliin blank tmnqfer for eight months, and then sold the shares (which had f«U<-n in value.

considerably) to another firm of brokers, Messrs. T. J. Thompson and Son, who disclosed the name of a principal, a Mr Robinson, described as a grazier, of Norfolk Island. TV Board of Directors of the company refused to accept Mr Robinson as a shareholder, and the shares remained on the register in Mr Gillies' name. A call of £1 a share was shortly, afterwards made, and Mr Gillies, being still the registered proprietor of the shares, had to pay £100, which he sought in the action to recover from the defendant, For Mr Palmer an endeavour was made to prove that a custom existed on the Stock Exchange in Sydney, by which th« pnrchaßer of shares transferred to him in blank is not responsible for any liability attaching to the shares after he has transferred them to some on* el«e. Five stock and share brokers were called to prove this custom, «»ut the jury, though only oi.e witness gave, contrary evidence, found that the custom had not been proved, and gave j a verdict for the plaintiff. There is, j wo believe, a rule among; the Bt™>k- ' brokers in Sydney, which was given in evidence at the trial, that in sales , made by one member to another no fAr*r of agency* °»kal l - W •dtovwiible, whether on or off ' Change, and that in the event of the l>oard of directors of any company refusing transfers, such sales shall nevertheless stand. That being so, it is difficult to se»* why Mr Palmer did not at once imy Mr Gillies and seek his remedy in :in:»thi-r quarter. The mere f.ti-t that a p"i *on selling shares can be placed in the unenviable position of Mr Gillies is in itself a condemnation of the practice of using these blank transfers at all. A vendor signs his own namn and transferee, for the convienee of he broker to whom it is sold, who, it is presumed, will without delay fill in the name of the client for whom he purchases. But a practice, however convenient it may be to brokers themselves, which exposes the public to the risk of finding themselves liable to pay calls oit shares which they think they have long parted with, seems to require no further condemnation when once publicity has been drawn to it. There is nothing to prevent a blank transfer passing through six or seven hands before the register is altered, and thus, without any unreasonable delay on the part, of any one person through whose hands it raiy pass, the ) original vendor may find himself liable Ito pay calls through the value of the I shares having fallen during the delay ' occasioned by the transfers passing j through so many hands. The custom I of transferring shares in l>Unk, existing as it does mainly for the conveni- < ence of brokers, ou<*ht not to be sane tioned by the Stock Exehin.e; at all events, advantage ought not to be taken of it to the detriment oi the general public. — 8. M. Her.ild.