1928-12-20 — Page 5

WiLL

THE HONGKONG TELEGRAPH, THURSDAY, DECEMBER 20, 1928.

STAMP DUTY PETITION.

BUSINESS COMMUNITY OPPOSE NEW BILL.

NO SUBSTANTIAL EVASION

1

We have received from Mesura, Lo and Lo, golicitors, a copy. of the petition presented to His Excellency the Officer Administer- ing the Government in regard to the Bill to amend the law relating to atamp duties. The petition has been signed by various bankers, firms, associations, companies, 'merchants and residents, the number of signatures being 247.

The petition is as follows:

are on

Persons who are subject to rheumatica should avoid above all things an excess of most in their diet, for flesh food is pro-

1. That Your Petitioners, being of ductive of uric acid in the blood the opinion that the above mentioned and uric acid is the cause of Bill, if it were to become an Or- rheumatism.

dunnce, would profoundly and pre- Simple, wholesome diet-main-judicially affect the owners of shares which share registers in

коле ly consisting of fruits and grains

and a thorough cleaning and the course of commercial and business would tend seriously to transactions, building up of the blood by means restrict legitimate dealinge In shares, of Dr. Williams Pink Pille make and would constitute up the treatment essential in ali terference with well-known and vested rights of property, and that the said such cases. Tens of thousands

Bill is unnecessary And funfair, and is of cases of cheumatism, even in detrimental to the best interest of the Its worst stages and where the Colony, humbly pray that Your Ex- sufferer has been pronounced cellency may be graciously pleased to direct that the first rending of the incurable by all ordinary means, have been cured in this way and still may not be proceeded with

and that it be abandoned altogether. by theso World-famous Pills during the past forty years.

nn undue in-

3. That according to the "Objects And Reasons" the object of the Bill in two fold:

2. That Your Petitioners beg to submit below Home of the grounds for If you are a rheumatic suffer-entertaining the opinion above ex- er, or if you have any other form pressed. of disease or slekneas traceable to improve or watery blood, Dr. Williams' Pink Pills for Pale People will do for you all. that they have done for others. Why not begin your cure today? Your chemist sella Dr. Williams' Pills. But don't accept a stitute.

HANDKERCHIEF

GIFTS

FOR

XMAS

.

(a) To prevent the evasion of

Batate Duties.

(b) To prevent the evasion of

Stamp Dulles.

4. That before setting out their Pink reasons in support of their respectful aub-contention that there is, in practice, nu evasion in either case to such an extent as to justify the legislation

and that, even contemplated,

for the sake of argument, existence of such evasion,

the avowed object of the Bill will not be achieved by the proposed enactment, Your Petitioners desire to make soine preliminary observatians upon the: mure general question of "Blank Transfer," which constitutes the rairon d'etre of the Bill.

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5. That as between the Company and a shareholder thereof, the latter remains shareholder with all the rights and liabilities as such, unless and until another person has heen registered as holder in his stend in the books of the Company

"Until Die instrument of transfer

5

certificates for the shares, to a creditor by way of security, he thereby confers upon him authority complete security by filling up the transfor and obtaining registra- tion.'

to

Lis

(Halsbury's Laws of England, Vol. 27, para, 483 and 484, pp. 230 and 2071

(e) "Sometimes the articles require

a transfer to be by deed; but this requisition causos incon- venience and secures no benefit. Thus where the transfer may be by instrument in writing a9 above, the abageholder may sign a blank transfer, and hand it over to a purchaser or mori- gagee, with authority to the holder of it for the time being to fill in the name of a trans- feree and such a transfer when filled

up can be sent in for re- gistration, and no objection can be raised by the company to its validity" (Authorities quoted). "But where a deed is required, this convenient plan is not pro- perly available; for

a deed executed in blank is inopera- tive as a legal transfer." (Au- thorities quoted). "Neverthe loss, such are the exigencies of busincas, that even where

A

deed is required blank transl fers are frequently rezorted to, in the expectation that the company will not notice or take advantage of the irregularity, It seems, however, desirable to make the articles accord with the general practico.” - (Palmer's Company Precedents, 11th Edition, Part I, pp. 460 und 670).

Court of Appeal Case.

(d) A Court of Appeal cake Stubbs

v. Slater (1910 1 C. D. 632). That case involves certain 'share. transactions between a broker und a

deposited with the broker as security

certificate for 390 Gne ahures and signed a blank transfer of the same. At the bottom of page 638 et argi Cozens-Hardy M.R. says as follows:

is registered the transfer is not eam-client and in which the client plete; the transferor in the legal owner of the shares, nul, if they are not fully paid, is able to pay all the calls made thereon, while his game remains on the register of members" (Halsbury's Laws of England, Vai, 5. page 199). 6. That

although this is the insi tion as between the Company and a shareholder, yet, as hetween the intter and third parlios, he can drai with the sharon, which are nere "chaser in

action," in the course of everyday

business transactions, and without registering any instrument of transfer with the Company, hy resorting to the long established practier of "Blank Transfer."

7. That this practice was founded on mercantile convenience; the in- cidents of firal imposition, and the correlated problem of finding legitim- ate means of avoiding legal liability for the impost, had nothing whatever to do with its genesis or its develop- ment. Its historic origin is synchron- ous with the creation of alatutory It limited liability of shareholders, has received high judicial recognition: in England, and the English Revenue Law has made provision for its opera-

tion.

"The plaintiff handed over to the Brokers one certificate for the 390 shares together with a transfer executed by the plaintiff in blank, in which the numbers of the shares. were specifled, but the name of the purchaser and the consideration were, of course, not specified, t wan the ordinary wellknown frana- fer in blank. Now what is the effect of that? I am Astonished that there should be any doubt about it. So long ago A 1899 Stirling J. in London and Midland Bank v. Mitelief (1) dealt with a case of precisely this antare and In- dicated what was the legal effect of it. That was a case in which cer- tain shares logether with a blank transfer und Böm deposited with a bank to secure a deht, and it was held that the bank had not lost their right against the sheres although their simple contract remedy against the client was lost by 'ren- son of the Statute of Limitations. The Court there pointed out that the whole transaction was a mori- cage as to whiels the bank were entitled to the ordinary remedy of foreclosure."

8. That after all, this practice, and the judicial and statutory recognition of its existence are easily under- standable. Beranse the absence-or prohibition of such a practice, must involve the necessity of resorting to the formal, and cumbersome registra tion of the legal transfer of title as a condition, precedent or subsequent, circumstances should not have gold all

to every transaction, inconvenience,

consequent delay

and. this necessity would at once destroy the fundamental nature of shares, and their intrinsic value as marketable securities readily utiliz able to meet business and commercial, requirements:

Authorities.

Lord Justice Buckley, in dealing | with one of the points raised in that case, namely, that the broker in the

with all 115

its the aliares in one lot, pays:

"That leaves a third point. It is and that is that is a conten- brokers sold too many alinres. tion which surprises me. The plaintiff had given the brokers a transfer of 390 shares together with one share certificato for 300 shares. The transfer was signed by the transferor in blank The brokers. were therefore in possession of an Instrument which enabled them to sell and complete the sale of 300 shares, and no less. It is said that they ought to have sold only 300 out of the 300, that they should first hate filled in their own names us transferees of the 300 and then havoi sold 100. Suppose the shares had been partly paid shares. Were tho mortgagees bound to put the shares into their own names? Certainly not."

D. That in support of the position postulated in the preceding threo paragraphs, English Authorities could be cited at random, but Your Petition- era beg leave to submit the few quota- tions which follow:

(b)

most

វ

Registration of Transfers.

(a) "Upon a sale or mortgage of shares, the transferor very commonly signs and hands over what is called blank trans. fer (ie, a transfer signed by the transferor but with a blank for the name of the transferce), the intention being that the purchaser or mortgagee shall be at liberty later on to fill up the

10. That In support of Your Peti- blank and perfect his security tieners' contention: set out above that by getting himself registered.

the English Revenue Law has mada (Palmer's Company Law, 12th provision for the eparation of the Edition,

page 138)..

system of Blank Transfer, Your Pet- method tenors desire to refer to a statement common rendering registered securities contained in Halsbury's Laws of available as cover, or England, Vol. 27, page 245, which is

for a debt, in by de- with the lender the quoted in paragraph 21 (5) hereof, to the effect that the transfer, in the to the same case of a purchase on a Stock Ex- relating accompanied by a transfer change, contains the price payable by specifying the accurities and oxecuted by the registered the ultimate purchaser, and that this holder, but in blank as to the price, where the transaction has pass- date and the name of the ad through intermediate purchasers, transferee. Such a transaction may differ from that to be received by That statement constitutes an equitable mort the transforor. gage."

quotes the Stamp Act, 1891, section 59 "If the registered holder of (4) as governing the amount of Stamp mecurities gives a blank form Duty payable in such cases, which of transfer, together with the spl-socilan Is as followar

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"(4) Where a person having con: 11. That the Hill seeks to prevent transfer is valid. And that "In order cation and a forged transfer is regis- tracted for the purchase of any pro any transaction or dealing in shards to ascertain whether A transfor is tored, he is not 'estopped from haging perly, but not having obtained a unless the same is followed by a for- yalld, and as to whether, when there the register rectified by substituting conveyance thereof, contracts to sell mal registration with the Company; is a discretion to refuse registration, his name for that of the transferes.” the same to any other person, and in other words, it seeks to abolish the the transferes ought to be registered, (Halsbury's Laws of England, Vol. the property is in consequence con-universally, recognised and long esta- the directora must have a reasonable &, page 193). voyed immediately to the aub-pur-blished practice of "Blank Transfer." time to consider the matter. Unuelly 18. That, at 'present, when regis chaser, the conveyance. In lo ́bo: 12. That upon the receipt of on the directors notify to the registered tration of transfers is optional and charged with ad valorem duty in application for transfer, the register-holder that a transfer has been lodged vot compulsory, the period taken to respect of the consideration moving ing Company has certain duties to for registration, If the registered perfect a registration" vazios frith from the sub-purchaser.!!

porform in ascertaining that the holder does not reply to such a notif-I (Continued on Page 6.) !

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