Sir Walter Phillimore:-

The first mentioned action is brought by the transferor and transferee of a parcel of fully paid-up shares in the Canada National Fire Insurance Company against that Company; the second action is also a joint action by two transferors and the transferee of two parcels of fully paid-up shares in the Great West Permanent Loan Company against that company. It is the same transferee in both cases, and the same point, that is, whether the directors of either company have an absolute power of refusing to approve and register transfers of fully paid-up shares regular in form and regularly presented to them.

It appears that in the first instance application was made upon motion for prerogative writs of mandamus; but that upon some question arising as to the propriety of this form of remedy the applications for these writs were by consent converted into actions, statements of claim being delivered setting forth the facts, and claiming as relief a mandamus or an order in the nature of a mandamus commanding either defendant company to register the transferee as the owner of the shares in question.

Some formal evidence was given; but, again by consent, the actions were heard upon motion for judgment without further pleadings, it being agreed that the matter was one entirely of law.

Both companies were constituted by special Acts incorporating Part II of the Companies Act (R. S. Can., 1906. c. 79). Except as incorporating the general Act, the special Acts are of no importance in this case.

The material sections of the general Act are as follows : (Their Lordships' judgment set out the sections appearing in the footnote at p. 459.)

At the time of the presentation of the transfers for registration the by-law of the insurance company relating to the transfer of shares was in the following terms :-

"Article VII. (a) Shares in the capital stock of the company shall be transferable only on the books of the company by the owner in person, or by attorney, on surrender of the certificates of stock properly endorsed. (b) Transfers and allotments of shares shall not be valid unless approved by the board of directors."

And the by-law of the loan company was in the following terms :-

"Article III This stock shall be issued subject to the following conditions - (a) That the holder of this stock will be paid the semi-annual dividends that may be declared from time to time by the board of directors. (b) Said dividends shall be payable on the 1st day of January and July of each year. (c) That said stock shall be non-withdrawable, but may be sold, and such transfers must be recorded in the books of the company.

"Assignment of stock shall not be valid unless approved and endorsed by the board of directors and accompanied by a transfer fee of one dollar. The assignment shall be accompanied by the stock certificate."

These by-laws had been confirmed by the shareholders in their respective companies, and were in force when the transfers were presented for registration.

After the receipt of the transfers a meeting of the directors of each of the companies was held, and the by-laws were then amended by the addition in each case of the following words :

"For greater certainty, but not so as to restrict anything herein contained, or and in addition thereto, the directors may refuse to register any transfer of stock heretofore or hereafter made upon which the company has a lien; and the directors, without assigning any reason, may refuse to register any transfer of stock heretofore or hereafter made, whether fully paid-up stock or not, to a person of whom they do not approve."

These amendments, however, were never brought before or confirmed by the shareholders of either of the companies; and counsel for the appellants admitted that he could not place reliance upon them.

Upon the actions coming on for hearing the Judge of first instance (Galt, J.) decided in favour of the plaintiffs, and ordered the defendant companies to register the transfers, make the n