Maynard v Eaton - Dec 16 1873
Transfer of Shares to a Minor
This suit was instituted by Mr. F. Maynard
to obtain a declaration that the defendant, Edward Eaton, was the
real purchaser of certain shares which had been transferred into the
name of his son George Eaton, who was then 17 years of age, and that
E. Eaton might be declared liable for all losses sustained by the
plaintiff by reason of the defendant not having the shares in his
own name.
In September 1866, Edward Eaton purchased, through his stockbroker,
for the next account-day, 100 shares in the Bank of Hindustan, China,
and Japan, at the price of about 2l. 18s. per share.
The shares were 100l. shares, of which 26l. had been
paid. The settling-day was the 13th of September, and on the 8th,
Edward Eaton wrote to the brokers desiring that the shares might be
transferred into the name of his son, George Eaton, whom he described
as a drysalter, of Upton, Macclesfield. The shares were purchased
from the plaintiff; and on the name-day, which was the day before
the settling-day, the broker gave the name of George Eaton as the
purchaser of the shares; and by a deed dated the 14th of September
the shares were conveyed to George Eaton. On the 21st September 1866,
an order was made for the winding-up of the bank under the supervision
of the Court, and it having come to the knowledge of the solicitors
for the liquidators that George Eaton was under age at the time of
the transfer, they took steps to amend the list of contributories
by substituting to his name the name of the plaintiff, the transferor.
After the order for winding up an action was brought by George Eaton
against the plaintiff to recover the money paid for the shares, on
the ground that he had been induced by fraud and unfair representations
to purchase the shares; but those proceedings were compromised upon
the withdrawal of all charges against the conduct of the plaintiff,
and upon the payment of the money by the plaintiff.
Glasse, Q.C., Higgins, Q.C., and Grosvenor Woods, for
the plaintiff, contended that he, being ignorant of the infancy of
the transferee, was not bound by the acceptance of his name, and that,
by the custom of the Stock Exchange and the rules of this Court, the
father was bound to take upon himself the liability arising upon the
shares.
Cotton, Q.C. and Ince, for the defendant.
The Vice-Chancellor was of opinion, upon the evidence, that the father,
Mr Edward Eaton, was the original purchaser of the shares, and if
he wished them to be transferred into another name it was his duty
to give the name of a responsible party. On the contrary, he gave
the name of his sone, than an infant, and by stating that he was a
drysalter it naturally would lead to the belief that he was a person
of full age. He considered that Edward Eaton, the father, remained
liable in respect of those shares. The action was in facat by the
father in the name of his son, and he had acted most improperly in
makeing charges of fraud which, in his Honour's opinion, were quite
unfounded; and the compromise of that action, with the suppression
of the fact that his son was an infant, was no bar to the plaintiff
recovering in this suit. The defence failed upon every ground, and
the plaintiff was entitled to be indemnified by Mr. Edward Eaton against
all liabilities arising upon the shares since the transfer. The decree
would be in the same form as that in Shepherd v Gillespie
(Law Rep. 5 Eq.298). The plaintiff must have his costs.
Solicitors: J. Tucker; Stephens & Stephens.
