properly to perform the functions of the office, and that, unless such limitation of liability is brought to the knowledge of the stockholder, and of those who may, from time to time, become such, the acceptance of the office would also imply an acceptance of responsibility for all acts for the registrar whereby the stockholder is wrongfully deprived of his property interest in the stock. Here again the case against the registrar is strengthened by the quite customary regulations of stock exchanges requiring the signature or counter-signature of a registrar as essential to the validity of the certificate. The duties and liability of registrar do not, in my opinion, differ in any marked degree from those of a transfer agent. It has been suggested that in case of difficulty or doubt, the responsibility of decision should be thrown by the agent or registrar upon the principal, and definite instructions asked for. This request would, if answered, relieve the agent from liability to the principal. It would certainly be evidence that the agent considered itself liable only for the usual responsibility of an agent; but I doubt the practical value of the suggestion, because the request for instructions by the agent would probably not meet with any satisfactory response. I have, in representing a transfer agent, asked the principal for instructions, and to my surprise received them. I anticipated, however, at the time that the principal's reply would practically be: "You have been paid to perform the work of noting our transfers, and have, by acceptance of your fee, agreed to decide these questions yourself and assume the consequences of an erroneous decision; therefore we decline to instruct you and thereby reassume the ultimate consequences of mistake in the law or facts. Your signature is essential to the validity of the new certificates, and you put it on or refuse it at your peril, not ours." Such position would be difficult to assail, and I am strongly inclined to the belief that such would be my position if, representing the principal, I were applied to for instructions by a transfer agent or registrar. It may be that the weight of ultimate decisions by the courts, when the responsibilities of these offices have been presented for determination, will result in the application of the general rule governing the relation of principal and agent, and in holding the agent responsible only for the consequences of due care, skill, and knowledge, and in establishing that such measure of responsibility only attaches to or is implied by the assumption of the office. But if such is the case, it remains true that the questions which may arise in the transfer of stocks are most obscure and involved, and that the assumption of the skill and knowledge requisite to discharge the duty of passing upon such questions is a dangerous duty for any corporation to assume. The responsibility of passing on transfers is one of the most important duties devolving upon the counsel of any corporation. As the number of corporations for which a trust company acts as transfer agent or registrar increases, the weight of its responsibility as such agent, even under the usual limitations of an agent's liability, also increases through multiplication of the chances of innocent error and mistake, in proportions which it is not pleasant to contemplate. It would seem here that a point has been reached when trust companies may, with possible advantage, pause to investigate and consider carefully the degree of liability which we so readily assume in accepting the position of transfer agent and registrar, and, this being determined, to see if the scale of fees is commensurate with that responsibility. Evidently the primary operative causes have resulted in the creation of an office which involves more liability than would, at first sight, have been supposed to attach thereto. Possibly the nomenclature of these offices-"agent," one who acts for another, and "registrar," one who performs the act of registering has obscured the true relation and has created a feeling of confidence which is misplaced. Certainly it is anomalous that the extreme care and ingenuity which have been displayed in expressly limiting the liability of the trustee in the discharge of the trust under a corporate mortgage, nowhere appears in restricting the responsibility in making transfers of stocks in transactions involving untold amounts. If the degree of responsibility is that which I have indicated, and the legal relation is not that of agent and principal, that nomenclature being misleading, but is that of employer and employee, the transfer agent having assumed for a cash consideration all the responsibilities incident to the proper performance of the work, both to the body corporate so employing and to its individual members-those interested in its stock-is not the average of fees paid for such work entirely incommensurate with the risk, even applying as a standard the rate of premium charged by bonding companies under the existing conditions of unbridled competition? It would seem to be scarcely commensurate with the responsibility assumed, even if the liability is only to exercise due care, skill, and knowledge in such transactions. If my views are correct, we are now engaged in the cheapest form of insurance ever devised. It is good business for the average corporation to employ a strong trust company to make its transfers, and, for a few hundred dollars' premium, assume the risks of defalcation and innocent error. Of course, the large majority of transfers are in usual course of stock-exchange business, and present no new or novel conditions, and only those in which statute or established decisions furnish a safe guide; but we may be at any moment called out of the beaten path and confronted with facts, essential and with but little to indicate their existence, to which the well-known legal principles and customary procedure may or may not apply, and upon the decision to transfer or not transfer may depend a possible heavy loss. In presenting these views I am conscious of occupying the uncomfortable but relatively easy position of a critic of existing conditions who is unprepared to suggest an adequate remedy. If, however, the matter receives your consideration and that of your counsel, some system will doubtless be devised by which the degree of liability which we are willing to assume will be defined and properly evidenced, or a scale of fees will be established which fairly represents the responsibilities assumed, if they are determined, or the risks involved, if the responsibilities of the office remain undetermined. THE PROTECTION OF TRUST COMPANIES AS ADDRESS DELIVERED BY JORDAN J. ROLLINS, OF THE NEW YORK BAR, BEFORE THE THE functions of transfer agents and registrars of corporate securities are not discharged to any great extent by corporations in the United States outside of the larger cities. Nevertheless, the subject of the obligations and liabilities incurred by corporations in the assumption of those duties is probably of interest to all representatives of trust companies wherever organized, and has, no doubt, been the subject of earnest thought on the part of each of those representatives. Therefore, it is to be hoped that a consideration of how the trust company may best be protected in the discharge of the important duties of those two offices will prove of common interest to you all, even though that consideration in large part dwells upon conditions as they obtain in the state where you have now met. What is true of the law of New York, or the lack of it, as regards authoritative adjudications upon the subject which we propose to discuss, is likewise applicable to other parts of the country, subject only to slight changes or modifications; for, as will be seen, the necessity for the corporate transfer agent or registrar, and the special fitness of the trust company to act in those capacities, are natural consequences of general business methods, and not of mere local custom. The New York Stock Exchange lays down the rule that: "Corporations whose shares are admitted to dealings upon the exchange will be required to maintain a transfer agency and a registry office in the City of New York, Borough of Manhattan." Both the Stock Exchange and the Legislature seem to have taken it for granted that the duties and liabilities of a transfer agent and of a registrar were so perfectly understood as to need no definition. or regulation. But a careful investigation of the subject leads to the conviction that those duties and liabilities have never been clearly fixed or determined, either by authority or custom. While each particular instance of transfer agency is, like any other agency, created by the contract between principal and agent, that contract is generally in substance a mere resolution by the board of directors of the principal company that some other company act in that capacity, and the assumption of the work by the designated company, in pursuance of such resolution. The appointment of the registrar is effected in much the same way. The contracts thus created are, therefore, peculiarly open to variation in judicial interpretation by the inclusion of implied provisions. The result is that trust companies find themselves to-day engaged in a large and growing branch of business, the conditions of which are not plainly defined and are to be determined only by a careful consideration of the elements which have combined to create independent transfer agency and registry and make them corporate functions. While you all know and understand the obligations of a company to its stockholders regarding the transfer of the certificates of its stock, it may not be amiss, in approaching the question before usthe due protection of a trust company in acting as transfer agent and registrar of another corporation—to direct your attention to a few cases in which the disastrous consequences that have befallen corporations through the improper transfer of their certificates are clearly set forth. These cases have been chosen with the purpose of showing that liability can arise equally through honest mistake, negligence, or fraud. In each instance, it is gratifying to note, they had their origin, not in the employment of a corporate transfer agent, but in the acts of officers of the issuing company. A wrongful transfer may occur, for example, through a mistake of fact where the title to stock is affected by some law peculiar to a foreign state or country or by some complicated contractual relation. A case passed in review by the Court of Appeals of New York in 1901 (Central Trust Co. v. W. India Imp. Co., 169 N. Y. 314), where title to stock was subject to questions arising both from peculiar foreign law and contractual complications, affords a striking illustration of the uncertainty which may attend the task of transferring stock of a foreign corporation. The West India Improvement Company, which was a New York corporation, mortgaged all property then owned or thereafter acquired by it to the Central Trust Company, for the benefit of bondholders. Subsequently, the Improvement Company became the owner of the stock of the Jamaica Railway Company, a corporation organized under the laws of Jamaica, but instead of delivering the certificates so acquired to the Central Trust Company pursuant to |