BLANK TRANSFER. A blank transfer of stock or shares is a transfer where the name of the transferee has not been filled in, or which is undated. It is sometimes used when shares are given as security for a debt, the intention being that if default is made in payment, the lender may fill in his own name, as transferee, or insert the date, and send the instrument forward for registration. If a blank transfer is to be held unstamped, it should not be dated, otherwise it cannot, after thirty days from execution, be stamped except under a penalty.
A blank transfer, however, in those com panies where the transfer must be under seal, is not a very satisfactory security. In the case of Powell v. London and Provincial Bank (1S93, 2 Ch. 555), a stock certificate and a blank transfer were given to the bank as security. The bank subsequently inserted its own name in the transfer and executed it, and was duly registered by the company. Lord Justice Lindley said : " . . . in order to acquire the legal title to stock or shares in companies governed by the Companies Clauses Consolidation Act, 1S45, you must have a deed executed by the transferor, and you must have that transfer registered. Until you have got both you have not got the legal title in the transferee. Now what took place here was this : Mr. Edwards gave to the bank a transfer sealed by him, and, so far as form goes, probably delivered him to the bank, but with blanks. It was not in a complete form. It was never in that form in which such an instrument, however much wax there might be at the bottom, could amount to a deed by the transferor. We all know that both at common law and under these statutes if you execute a trans fer in blank, that instrument with the blanks is not a deed. Then what happened is this. That document so executed by Edwards in blank was filled up afterwards by the bank, probably as was intended, and the bank itself was put in as the transferee and the bank got itself registered. . . . What was
the effect of what had been done ? It was not that the bank got a good title. The registration of the stock in the bank, unless preceded by a valid deed transferring the stock from the owner of it, does not give the transferee a good title at all. We have not to consider the effect of documents executed in blank as agreements enforceable in equity. We have nothing to do with that, but we are considering the legal title of the bank. The bank had no legal title at all." In that case the stock certificate proved to be part of a trust estate, and the bank, although it had no notice of the trust, had its title postponed to the prior equitable title of the persons interested under the trust.
In the case of those companies where debentures and shares are transferable by an instrument under hand (a deed under seal not being required), a blank transfer does form a satisfactory security, and the trans feree's name can subsequently be filled in. In the event of the transferor's death, how ever, before the blanks are filled up, the banker's authority to do so is cancelled.
The reason why a blank transfer under seal cannot legally have any blanks subsequently filled in by a banker is that a document under seal is a deed and takes effect from its de livery. To enable a blank transfer under seal to be effectually completed, the blanks should be filled in in the presence of the transferor, or by his authority under seal, or the deed should be re-delivered by him. ,See CERTIFICATE, TRANSFER OF SHARES.)