was open to the original selling broker to object to the name passed by his buyer, in which case such buyer would, of course, have passed on the objection to the person from whom he received the name as hereinbefore mentioned, and practically such buyer would have had no liability or interest in the question, as whatever grounds there might have been for objecting to the name would have had to be met by the person from whom it emanated, and who had originally issued the ticket, and the committee of the said Stock Exchange would, if appealed to by the selling broker, have decided as to the validity of any such objection, and would have required another name to be given in case they had considered it right to do so. But after the lapse of these ten days the selling broker was required to deliver the certificates and transfer of the shares to the said ultimate purchasing broker, or in default thereof, the latter could have bought in the shares against the seller. The usual course of business was for the selling broker to deliver the transfer, together with the corresponding ticket, to the said ultimate purchasing broker from whom he received the purchasemoney. The said ultimate purchasing broker did not know to whom his ticket had been ultimately passed until the delivery of the transfer. According to the long-recognized and well-established rules and usages of the said exchange, if the original selling broker did not deliver his transfer and certificates and obtain payment of the purchase-money within fifteen clear days from the name day, his immediate buyer was released from all loss caused by the default of the ultimate purchasing broker to pay for the shares, and the latter would alone remain responsible; in like manner, if the member who issued the ticket containing the name of the intended transferee of the shares did not buy in, or attempt to buy in, the same shares within fifteen days from the account day, his immediate seller was released from all. loss caused by the failure of any member through whose default the shares were not delivered to, and the purchasemoney paid by, the ultimate purchasing broker; the jobber had fulfilled all the obligations required of him by the rules. and usages of the said Stock Exchange in respect of his contract." § 1474. In this passage, and in several of the cases which have occurred, the jobber is spoken of as if his rights and liabilities were distinct from those of a broker. But the broker of a purchaser, and through him as principal the purchaser, appeared to be in precisely the same position as a jobber.(h) § 1475. Such being the practice, the contract of sale to a jobber has been determined to be to the effect that, at the sitting-day, he will either take the shares himself, in which case he must accept and register a transfer and indemnify the vendor, or he will give, as purchaser or purchasers, the name or names of one or more persons capable of contracting and who have authorised him to contract for them, and to whom no reasonable objection can be made: and that when the vendor has, by executing a transfer to the nominees, accepted them as purchasers, and the nominees have accepted the shares, through the delivery to their brokers, on a payment by their brokers, of the transfers and certificates of shares, then two things follow, viz., (1) a new contract arises between the original vendor and the nominees of the original purchaser; and (2) as a consequence, the original purchaser is released and no action can be maintained against him in respect of the contract. (2) So that he is not in any sense a guarantor of the performance of the new contracts by his subvendees. § 1476. The peculiarity of this transaction does not consist in the extinction of the original contract by the new one that occurs in many cases: but in the right reserved by the original contract to the purchaser to compel the vendor to accept a new contract in lieu of the old one. In short, the original contract with the purchaser is one for sale and purchase, with a right reserved to the purchaser, under certain circumstances, to call on the vendor to enter (h) See Maxted v. Pain (2d action), L. R. 6 Ex., 132, 170; consider Street v. Morgan, 21 L. I. N. S., 432. (i) Coles v. Bristowe, L. R. 4 Ch., 3. reversing S. C. L. R 6 Eq., 149; Grissell v. Bristowe, L R. 4 C. P., 36, reversing S. C. L. R. 3 C. P., 112. In Maxted v. Paine (2d action), L. R. 6 Ex., 132. Lord (then Mr. Justice) Blackburn subjected the whole matter to a very elaborate examination, and held that it was no part of the contract of a purchaser of shares to give in either his own name or that of his real principal: that he contracts to accept a transfer into the name which he furnishes, and to indemnify the vendor against all calls after the transfer is executed and delivered to him: that the vendor has no right to object to execute a transfer to any one named by the purchaser, and does not, by executing the transfer, release the purchaser from his liability to indemnify. His Lordship held, as a consequence, that Coles v. Bristowe and Grissell v Bristowe (ubi supra) were rightly decided, but on wrong grounds, and that Maxted v. Paine [1st action] (L. R. 4 Ex., 81) was wrongly decided. See, as to this judgment, per James, L. J., in Merry v. Nickalls, L. R. 7 Ch., 750. Lord Blackburn's views seem to be practically overruled by the decision of the House of Lords in the last-named case (L. R. 7 H. L., 530). into a new and substitutionary contract, and an obligation on the part of the vendor to do so. It is an effective contract to contract. § 1477. Of the original liability of the first purchaser to be sued in specific performance and for indemnity there is no doubt. Let us now inquire a title more exactly what such original purchaser must have done to relieve himself from his original liability. 1st. He must give as purchaser the name of a person capable of contracting. Accordingly it has been decided that the passing on the name of an infant is no satisfaction of the jobber's liability.(j) 2d. He must give as a purchaser the name of a person who has authorised the original purchaser to bind him to a contract of purchase: so that passing on the name of a person who gave no authority is no satisfaction of the first purchaser's liability.(k) As regards these two points, it has been urged that if no objection was taken to the name within ten days after the settling-day, that being the period allowed for the approval or rejection of the name of the ultimate purchaser, the original vendor lost his right to object: but the contrary has been held; the personal responsibility, and not the personal capacity or authority, being the only point left for inquiry and determination within the ten days. 3d. The original purchaser must give a name to which no reasonable objection can be taken. It seems that residence in Smyrna would be a reasonable objection. (7) This objection, if not taken within ten days, would come too late. § 1478. The nominee of the original purchaser, whether jobber or purchasing broker, is in most cases a sub-vendee. But this is not necessary. The exigency of the contract is satisfied if the name given as that of a purchaser be that of a person capable of contracting and who has contracted to take the shares. Thus, where the person named was a man (j) Merry v. Nickalls, L. R. 7 Ch., 733; S. C. s. n. Nickalls v. Merry, L. R. 7 H. L., 530 (reversing the decision of Bacon, V. C., in S. C. L. R. 7 Ch., 740, and overruling Rennie v. Morris, L. R. 13 Eq, 203); Dent v. Nickalls, 22 W. R., 218; Watson v. Miller, W. N., 1876, 18 (Hall, V. C.); Heritage v. Paine, 2 Ch. D, 594. Cf. Nickalls v. Furneaux, W. N., 1869, 118 (James, V. C.), and Maynard v. Eaton, L. R. 9 Ch., 414. See, also, Brown v. Black, L. R. 15 Eq., 363; 8 Ch., 939. (k) Maxted v. Paine (1st action), L. R. 4 Ex., 81. (1) Allen v. Graves, L. R. 5 Q. B., 478, which case, however, was on a special contract. of straw, who for a gratuity accepted the shares in a broken company, and the vendor's brokers did not object to the name given or require a better name, the original purchaser was held to have performed his contract, and so was no longer bound.(m) Whether the original purchaser is bound to do anything more than produce a new contracting party, i. e., whether he is liable till the new purchaser has actually accepted the transfer of the shares, is a point which is hereafter considered.(n) § 1479. Where the nominee's name has been given, with his authority, by the jobber or purchasing broker, and such name has been accepted by the vendor by his executing the transfer to the nominee, and the nominee has, through his broker, paid for the shares and accepted the transfer and certificates, a new contract, as we have seen, arises between the vendor and the nominee. (o) This new contract may be enforced by an action for indemnity, (p) or by an action for specific performance and indemnity.(2) $1480. In accordance with some of the authorities the new contract has, in the foregoing sections, been stated as arising when the nominee has paid for his shares and accepted the transfer and certificates, or, to put it in other terms, the original purchaser is only discharged when he produces a nominee who himself pays for the shares and accepts the transfer (and does not merely contract so to do).(r) But there are not wanting authorities which would place the constitution of the new contract at a possibly earlier stage, viz., when by the ticket the new purchaser has been signified to the original vendor, and the vendor has signified his acceptance to the new purchaser.(s) The point has never been precisely determined: and as the only notification that the original vendor accepts the new purchaser appears to be by delivery of the transfer on payment (m) Maxted v. Paine (2d section), L. R. 4 Ex., 203, affirmed in Cam. Scac. L. R. 6 Ex., 132. (n) See infra, § 1480 et seq. (0) See per Cockburn, C. J., in Grissell v. Bristowe, L. R. 4 C. P., 51. (p) Davis v. Haycock, L. R. 4 Ex., 373; Bowring v. Shepherd, L. R. 6 Q. B., 309. (g) Sheppard v. Murphy, 16 W. R., 948; I. R. 2 Eq., 544 (reversing S. C., I. R. 1 Eq., 490), approved in Cam. Scac. in Grissell v. Bristowe, L. R. 4 C. P., 36, 51; Hawkins v. Maltby, L. R. 4 Eq., 572; 3 Ch, 188; 6 Eq., 505; 4 Ch., 200; Hodgkinson v. Kelly, 6 Eq, 496. (r) See per Cockburn, C. J., in Grissell v. Bristowe, L. R. 4 C. P., 51; per James, L. J., in Merry v. Nickalls, L. R. 7 Ch., 751. (8) See per Brett, J, in Bowring v. Shepherd, L. R. 6 Q. B., 328; per Kelly, C. B., în Davis v. Haycock, L. R. 4 Ex., 384. of the price, the point does not seem to be one of much practical importance. § 1481. The new contract is, as we have seen, between the original vendor and the ultimate purchaser or nominee. Between the original vendor and any of the intermediate parties there is no contract. (t) § 1482. In one case, however, it has been held that there is a right to indemnity in equity on the ground of trust. The case alluded to is Castellan v. Hobson. (u) There A. through his broker sold to a jobber, B. B. sold to C. through his broker. C.'s broker gave the name of D., who was a man of straw and was held to be a trustee for C. A. executed a transfer to D. and received the money: D. did not execute the transfer, and before registration the company was wound up: C. was held liable to indemnify A., on the ground that A. was a mere legal owner of the shares and entitled to indemnity from the real equitable owner, and that C. was such owner. It may be doubted how far the case can be considered as an authority since the decissions in Coles v. Bristowe(v) and Maxted v. Paine (second action):(w) for it would appear that A.'s original contract of sale was liable to be extinguished by a new contract which he agreed to enter into with a nominee, and that by executing a transfer to D. he accepted him as purchaser, and it would seem to follow that he could look to him and to no one else for indemnity. The non-registration of the transfer, too, seems immaterial according to the more recent cases. § 1483. In Viscount Torrington v. Lowe, (x), the court of common pleas held that no action could be maintained against the subvendee whose nominee had been accepted by the original vendor, and they expressed the further opinion that there was no equitable right against him. § 1484. In some cases the ordinary form of contract is departed from, and a contract is made by the jobber or purchasing broker with registration guaranteed. This superadds an important obligation on the original purchaser, so that he has not completed his contract until he has either (t) Viscount Torrington v. Lowe, L. R. 4 C. P., 26. (u) L. R. 10 Eq., 47 (James, V. C.) The case of Viscount Torrington v. Lowe does not appear to have been cited to the V. C. in this case. Cf. Nickalls v. Furneaux, W. N., 1869, 118 (James, V. C.) (v) L. R. 4 Ch., 3. (w) L. R. 4 Ex.. 203, 6 Ex., 133. |