Dear All
I have been following this group for a while but have refrained from posting due primarily to time commitments! But this thread is fascinating and sufficiently speculative for me to make a few observations.
I think that this is such an interesting question because it highlights the complex dance between “property” and “obligations” at the margins—as the traditional common law treatment of things like “franchises” and “advowsons” shows. These were listed by Blackstone
as “incorporeal hereditaments” and as such a species of property treated akin to land. I think that a lot of unanswered questions exist, once we scratch the surface, about the way in which this category of intangible property interacts with the other major
category of intangible property, i.e. choses in action.
The convenient recourse to the paper “wrapper” of most choses in action ("documentary intangibles”) allowed us to avoid many of these questions for a long time, and worked pretty well for the explosion of commercial paper in the 19th century.
But current trends in digitalisation are undoing this wrapper and exposing the gaps in our conceptual scheme. Really, the register-based existence of English law company law shares (if not all other shares) puts its finger on the point—are “conversion” or
“adverse possession” really appropriate to rights-treated-as-things that exist in virtue of entry into a ledger? (Here, we seem to be talking about the proper/improper recognition of rights accorded in virtue of a share class, not dealings with the paper share
certificate anyway, which is a confounding factor—but I think some of the same questions ultimately pop up?).
At base, the category of choses in action itself performs a bit of legal alchemy by turning particular sets of obligations into things—packaging some bilateral in personal rights and turning them into
in rem rights that can be passed around with as little friction as possible, whether by physical delivery or by amendment of the register/ledger. In the Civilian context, we see even more difficult questions arising such as whether a right can
be ‘owned’ (i.e. be the object of the right of ownership) at all—I recall Gretton’s excellent paper in the
Rabels Zeitung
on this point. We tend to avoid these kinds of questions in the common law tradition, but perhaps they need to be asked?
Again, digitisation is stirring the pot. The E & W Law Commission, as I understand, is actively considering the concept of possession in the context of digital intangibles. That might undermine the
OBG v Allan position on conversion in the future, with potential analogue arguments in the context of other remedies. Courts are actively asking whether there is a “tertium quid” between choses in action and choses in possession, whatever that
is taken to mean exactly.
All that said, my approach would be that the problem here was mistake/negligence/deliberate misconduct by those in charge of the company meeting rather than a question of “adverse possession” of the shares. Doctrinally, I would think there might
be a difference between a company share (a chose in action) and something like an advowson (an incorporeal hereditament), although I could be wrong—a share is something like a “franchise” in a private association, isn’t it? My personal preference would be
against applying tangibility-based concepts like “possession” to intangibles (rights) like shares at all, although I may be eccentric in that regard. Thinking of remedies, surely some kind of personal remedy would be better than a proprietary one in a case
like this? I certainly don’t think that the other shareholder (who got to vote for 20 years) could claim any kind of prescriptive acquisition of the voting rights through use, could they?
Kind regards from Berlin
Jason
Mohrenstr. 60, 10117 Berlin
+49 160 212 8673
Neal asks: 'if someone denies you a right to vote which you should be able to exercise, what cause of action do you have?"
Ashby v White (1703) 92 ER 126,
of course , answered this question in a constitutional context. The headnote in the ER reads: A man who has a right to vote at an election for Members of Parliament may maintain an action against the returning officer for refusing to admit his vote.
Tho' his right was never determined in Parliament. And tho' the persons for whom he offered to vote were elected." Probably doesn't help here.
A bit of distraction for me.
Harold.
Harold Luntz AO
Professor Emeritus
Law School
The University of Melbourne
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