lity to pay up the full
amount in cash or its equivalent, the liability is only to pay when and
if the directors call for it to be paid up. A call must fix the time and
place for payment, otherwise it is bad.

Rescission of agreement.

When a person takes shares from a company on the faith of a prospectus
containing any false or fraudulent representations of fact material to
the contract, he is entitled to rescind the contract. The company cannot
keep a contract obtained by the misrepresentation or fraud of its
agents. This is an elementary principle of law. The misrepresentation,
for purposes of rescission, need not be fraudulent; it is sufficient
that it is false in fact: fraud or recklessness of assertion will give
the shareholder a further remedy by action of deceit, or under the
Directors' Liability Act 1890 (see _supra_); but, to entitle a
shareholder to rescind, he must show that he took the shares on the
faith or partly on the faith of the false representation: if not, it was
innocuous. A shareholder claiming to rescind must do so promptly. It is
too late to commence proceedings after a winding-up has begun.

Transfer of shares.

The shares or other interest of any member in a company are personal
estate and may be transferred in the manner provided by the regulations
of the company. As Lord Blackburn said, one of the chief objects when
joint stock companies were established was that the shares should be
capable of being easily transferred; but though every shareholder has a
prima facie right to transfer his shares, this right is subject to the
regulations of the company, and the company may and usually does by its
regulations require that a transfer shall receive the approval of the
board of directors before being registered,--the object being to secure
the company against having an insolvent or undesirable shareholder (the
nominee perhaps of a rival company) substituted for a solvent and
acceptable one. This power of the directors to refuse a transfer must
not, however, be exercised arbitrarily or capriciously. If it were, it
would amount to a confiscation of the shares. Directors, for instance,
cannot veto a transfer because they disapprove of the purpose for which
it is being made (e.g. to multiply votes), if there is no objection to
the transferee.

Blank transfers.

It is a common and convenient practice to deposit share or stock
certificates with bankers and others to secure an advanc