ration might be compelled, if there were a court of chancery, to give certificates; but still for want of them the stockholders would not lose their rights." "

1

3. A provision is frequently introduced into acts and charters of incorporation prescribing the manner and form in which the stockholder shall transfer his shares. The shares, held by the owners of the immense capital composing the Bank of England, are declared by the charter to be of the nature of personal estate; and the contract of transfer is required to be registered in the books of the bank within seven days, and on which the stock shall be transferred within fourteen days. The profits are divided half yearly, and the dividends payable at the bank. The fund of the Bank of Scotland is declared assignable, the transfers being entered in a book subscribed by the assignor and assignee; it is also disposable by will entered in the book of transfer, without any confirmation. A provision may be introduced empowering the company to regulate transfers by a by-law, which may be passed, leaving the general principles of law and equity applicable to a sale of shares as it found them. But a by-law, requiring any extraordinary formality, or imposing an impediment in the transfer of shares, unless the power to make it has been expressly given by charter, would be void. Thus it was held, that a by-law which limits the transfer of stock in an insurance company to be made at the office personally or by attorney, and with the assent of the president, would be in restraint of trade, and contrary to the general law, which permits the right to personal property to be transferred in various other ways. And under a general authority given by charter, that the company shall have power to make by-laws, "touching the transfer of the shares," the company cannot

'Chester Glass Company v. Dewey, 16 Mass. R. 91. See authorities on this subject cited ante, Chap. IV. § 1, and Chap. XII. § 2.

21 Bell Comm. 66.

3 United States v. Vaughn, 3 Binn. (Penn.) R. 394.

4 Sargent v. Franklin Insurance Company, 8 Pick. (Mass.) R. 90.

impose any unreasonable restraint, as, for instance, requiring the president to authenticate, and the clerk to attest, the certificates. The purchaser, or other person entitled in such a case, has only to make his right known to the corporation, that it may be entered upon their books. This is all that can be required. As has been laid down by the Supreme Court of Massachusetts; "All that can be required of a person demanding a transfer on the books, would be to prove to the corporation his right to the property." In this case, one of the joint assignees produced an assignment, with an original certificate of the former owners, and claimed for himself and partner to be the purchasers for a valuable consideration. This was deemed a sufficient notice of the assignment, and of a request to have the transfer made upon the corporate records. Under the statute of Massachusetts, enacting that any share of the property of a manufacturing corporation may be transferred by the proprietor thereof by deed acknowledged, and subsequently recorded by the clerk of the corporation; it was held, that a transfer by a deed not recorded was so far effectual, as to render the vendee personally liable to a creditor of the corporation. Stock of the old Bank of the United States, which had been transferred in London, with a delivery to the purchaser of the certificate accompanied with a power of attorney to transfer it on the books, in conformity to the act of incorporation and by-laws under it, was held to be vested in the vendee before the transfer was entered on the books. A considerable period of time must necessarily arise between the sales and formal transfers, where the contract is made beyond seas."

1 Ibid. Quiner v. Marblehead Social Ins. Co. 10 Mass. R. 476; 2 Kyd, 122. By the operation of law one partner may make a legal demand and have his transfer entered for his copartner. Lamb v. Durant, 12 Mass. R. 57, and Sargent, &c. supra; Gilbert v. Iron Man. Co. 11 Wend. (N. Y.) R. 627; Kortright v. Buffalo Com. Bank, 20 Wend. (N. Y.) R. 91.

2 Sargent v. Franklin Bank, ut sup. See also Overseers of the Poor v. Sears, 22 Pick. (Mass.) R. 122; and ante on the Admission of Members, &c. Chap. IV. § 1.

3 Eames v. Wheeler, 19 Pick. (Mass.) R. 442.

United States v. Vaughn, 3 Binn. (Penn.) R. 394.

$ 4. A person receiving a transfer of shares from a stockholder indebted to the company is entitled to the shares, even without paying the debt due from the assignor to the corporation. In the case of Bates v. New York Insurance Company, the company had refused to transfer, unless the assignee would pay the debts due from the assignor, and the assignee, who paid under those circumstances, was permitted to recover back the money, on the ground, that the corporation had no right to require such a payment. A different rule, however, was adopted with regard to the dividends which were due, when the corporation had notice of the assignment. The money, then being in the hands of the company, was considered as appropriated towards a debt which was then actually due. But the company were held obliged to make the transfer on the day when the last instalment was made, and the assignee was to have dividends thereafter to be made.'

That an incorporated company has no implied lien on the shares of the stock, as security for debts due from any of the stockholders to the corporation, has also been held in Massachusetts, in the case of Sargent et al. v. Franklin Insurance Company. This was assumpsit to recover damages of the defendants for refusing to transfer to the plaintiff's (copartners) on the books of the company, and deliver to them a certificate of twenty-five shares of the capital stock of the company, standing in the names of Adams & Amory, and alleged to have been assigned by them to the plaintiffs. Adams & Amory had held a certificate of the shares, dated February 10, 1824, and made an instrument of assignment of the same to the plaintiffs, dated May 24, 1826. On the next day, May 25th, before 12 o'clock and during business hours, Brooks, one of the plaintiffs, called at the office of the company, and the president of the company being absent, exhibited to the secretary the instrument of assignment with the power of attorney

'Bates v. New York Ins. Co. 3 Johns. Cas. 238; and see Marine Bank v. Bydys, 5 Har. & J. (Md.) R. 489; Gilbert v. Manchester Iron M. Co. 11 Wend. (N. Y.) R. 627.

28 Pick. (Mass.) R. 90.

from the assignors to the assignees, empowering them to make a transfer of the shares on the company's books, and demanded certificates to be issued in the names of the assignees, offering, at the same time, to surrender the certificates of Adams & Amory. The secretary read the assignment and power, but declined doing anything in the matter, saying it was the president's business. On the same day, May 25th, at 12 o'clock, the defendants caused the same shares to be attached, at their own suit against Adams & Amory. On the 9th of June and the 19th of October following, the defendants caused the same shares to be attached a second and a third time, in other suits commenced by them against Adams & Amory on two other demands, which had respectively become due at those times. Judgment was recovered in all these suits, and executions issued, on which all the shares were successively sold, and the proceeds paid over to the company, in satisfaction of the demands against Adams & Amory. The by-laws of the company made it the duty of the president “to attend at the company's office, during the hours of business," to discharge the various duties of his office. Certificates of stock were required, by the by-laws, to be authenticated by the president, and it was made one of the duties of the secretary, "to attest all certificates and transfers of stock." The certificates bore upon the face of them, that they were "transferable only at the office of said company, by [the holders] or their attorney." The plaintiffs, in their first count, demanded damages on account of the shares not having been transferred to them on the books of the company, according to the assignment; and in the second count, they claimed the dividends that had accrued upon the shares. It was agreed that the plaintiffs should be nonsuited, or the defendants defaulted, according to the opinion of the court. The court held, that the company had no lien upon the shares, as security for their demands, against the assignors; that they were bound to enter on their books a transfer of the shares in pursuance of the assignment of the same; that they were liable in damages to the assignees of the shares for not so doing; and that the amount of the damages was the value of the shares at the

time of refusal, with interest from that time.' An original subscriber for ninety shares of $100 each, in a bank, paid towards an instalment of eighty per cent. on the shares and interest thereon, the sum of $2750, drew a draft in favor of the bank for the balance, and transferred to the bank "all his right and title to, and interest in, ninety shares, in the capital stock of the bank, excepting and reserving $2750 in said stock as collateral security for the payment of the draft. The draft was not paid, and the bank never passed to the credit of the subscriber any stock in the bank, nor gave him any certificate or scrip for shares. Thirty-four shares were sold on execution against him, and the purchaser tendered to the bank a further instalment of twenty per cent. upon the same, and demanded a certificate of ownership of the shares, which the bank refused to give, the original subscriber being then indebted to them more than $2750, independently of the transaction respecting the shares. It was held, that the original subscriber was once the proprietor of ninety shares, and that the effect of the reservation in his conveyance to the bank

'It was contended for the defendant, on the authority of Gray v. Portland Bank, 3 Mass. R. 364, that the value of the shares, at the time of the demand and refusal to transfer them, should be the measure of damages. It was contended for the plaintiffs, that, as the defendants had taken the shares for which the plaintiffs had paid, they should be held to pay as much, at the least, as they would be liable to pay for not transferring the stock which had been loaned, or stock which had been paid for in advance, according to the rule adopted in New York, and stated in Clark v. Pinney, 7 Cowen (N. Y.) R. 681, and the cases there cited. But Putnam, J. who gave the opinion, observed; "Speaking for myself only, I should have been inclined to adopt that rule, which would have charged the defendants with any advance upon the value between the time of the demand and the trial. But all my brethren prefer the other rule, and on the ground, that the defendant should not be held to pay more for this property than for goods which they had wrongfully converted to their own use. We decided in Kennedy v. Whitewell, 4 Pick. (Mass.) R. 466, that in trover for goods, the rule of damages in this commonwealth is the value at the time of the conversion, notwithstanding the goods had been sold at an advanced price before the trial. And it is to be observed, that the certainty and uniformity of a rule may be of more public utility, than one which is fluctuating,"