course, on his performance of his contract of subscription on his part; and if payment is a condition precedent to the issuing of the certificate, until he pays he is not entitled to it. A decision in New York is to the effect that where a corporation, in a suit for the balance of a subscription for shares of the company, recovers only a portion of the sum claimed, because the other part is barred by the statute of limitations, and enforces the judgment by execution, the subscriber or his assignee, after having paid the amount recovered, is entitled to a certificate of the stock. The court proceed on the ground that, even after recovering the judgment for part of what was due from the subscriber, the company might have discharged the judgment, or might have declined to enforce it; but that, by proceeding to collect it by execution, they made their election to take what was due on the stock subscription rather than to forfeit the stock, and were concluded by this election. It has been held in a court of first instance, that where subscriptions to stock are made, to be paid in installments, and certificates are to be issued for the several installments, the corporation is not bound to issue the certificates before getting the installments, but that a readiness and willingness to issue them at the time when payment is to be made is all that can be required of it. In an action to recover such an installment, an averment of its readiness and willingness to issue the certificates is necessary. It is reasoned that the right to enforce payment is not distinct and independent from the duty to issue and deliver the stock; and that if the subscriber can not get the stock, the payment of the installment can not be enforced. The issue of the stock and the payment therefor are to be regarded as contemporaneous acts.2 But we must here recur to the general proposition that the certificate is not the share; that it is not the right nor the property, but only the evidence of the right to the property. Therefore a contract to deliver a certain number of shares has been held, under particular circumstances, to be fulfilled where the obligor places the obligee in a position to demand the certificate from the corporation.3 Johnson v. Albany &c. R. Co., 40 How. Pr. (N. Y.) 193. James v. Cincinnati &c. R. Co., 2 Disney (Oh.), 261, opinion by Gholson, J. 3 Field v. Pierce, 102 Mass. 253, 261. § 2358. Liability of Officers for False Certificates.- This subject is considered in a future title, but it is touched upon here with reference to the question what representations by the officers issuing an ordinary share certificate are implied from its recitals. It has been held that officers of a corporation who sign and issue certificates of its stock in the usual form, stating upon their face that the corporation is incorporated according to the laws of a particular State, and that the stock is non-assessable, thereby represent that the stock is not spurious or invalid because of their known acts or omissions, and also that everything has been done which is necessary to make the stock rightfully exempt from further assessment; and that, if such representations are false, the officers will be liable in damages to one who has taken the certificates in good faith and for value, relying upon the representations.' § 2359. What Constitutes an Issuing.—It has been held, on a question concerning the right to a dividend, that the execution of a stock certificate and placing it in the post-office addressed to the person named therein, is an issue to him of the stock as of that date, entitling him to all the rights of a stockholder. 3 § 2360. Certificate a Vested Right.- One who purchases shares in a corporation and receives a certificate thereof, acquires a vested right, in such a sense that any action of the corporation, not authorized by its charter or governing statute, which impairs this right, is void as against him. It is needless to say that a corporation can not, by a by-law, impair the right thus vested, against his consent. If, therefore, the corporation assumes, by a by-law or otherwise, to divide the shares of its stock, already sold and in the hands of lawful owners, into two classes, and to give to one class a preference over others in sharing in the earnings of the corporation, this act will be void, unless made good by unanimous consent. And this is so, 1 Post, Ch. 83, Art. VI. 2 Windram v. French, 151 Mass., 547; s. c. 8 L. R. A. 750; 24 N. E. Rep. 914. 3 Jones v. Terre Haute &c. R. Co., 17 How. Pr. (N. Y.) 529. 4 Ante, § 1019. although the equality of rights in the shares of the company was fixed by a by-law existing at the time when the purchaser acquired his shares; for such a by-law, equally with a charter provision or that of a governing statute, enters into and forms a part of his contract.1 § 2361. Effect of Issuing Certificates to the Wrong Person: Improper Division of the Shares among the Co-Adventurers. Where parties form a mining corporation to contain a certain number of shares, and convey their mining claims to trustees who are to hold the realty for corporation purposes, and issue certificates of stock, and certificates are issued to the full extent of the shares, all such certificates are valid, though some of them are issued to the wrong persons, that is, though some get more than their proportion; and the court cannot grant relief to parties who have not received their just number of certificates, by ordering the issue of new certificates to them." It seems that if, in such a case, the court can get the proper parties before it, it can equalize the holdings of the shareholders; but it cannot do this where the shares have passed into the hands of innocent purchasers for value. Those who have not received their proportion will, however, it seems, be entitled to indemnity from the corporation, not in the form of new shares, for that will be beyond the power of the corporation, but in the form of pecuniary compensation for their loss.3 § 2362. Interest-bearing Certificates. The validity of interest-bearing stock certificates is more fully considered in another relation, with the conclusion that unless the charter or governing statute authorizes the issuing of such shares, they are ultra vires and void, — though, on principles already discussed,5 they might, in the hands of an innocent taker, stand as a right to indemnity from the corporation for what it had obtained from him by means of them. Where the power exists to issue this 1 Kent v. Quicksilver Mining Co., 78 N. Y. 159, 179. See further on this question, with special reference to the power of a corporation to increase and reduce its capital stock, ante, § 2076, et seq. 2 Smith v. North American &c. Co., 1 Nev. 423. 3 Ibid. 4 Ante, § 2236, et seq. 5 Ante, § 2236, et seq.; § 2274, et seq. species of shares, a certificate issued in the ordinary form of certificates of stock, but containing a promise on the part of the corporation to pay interest thereon until the happening of a specified event, constitutes the person to whom it is issued a stockholder. In such a case the corporation cannot, by a vote of the stockholders, without the individual assent of the particular holder, oblige him to receive their bond, instead of money, for the interest upon such certificate. If a railway corporation have authority to issue such a certificate, they may ratify one which has been issued without authority. And it is sufficient evidence of such ratification that the corporation, at a regular meeting of the stockholders, passed a resolution for the payment, in their bonds, of interest on such certificate.2 § 2363. When Right to Certificate not Determined by Laches. The right of the holder of a certificate in an unincorporated joint-stock company, which is non-assessable and which has been recognized on the records of the company and never surrendered, is not determined by his laches until such right is repudiated by the company. The principle is that the company is, as in the case of a corporation, a trustee for the shareholder, and that an extinction of his rights by efflux of time cannot take place until there has been some adverse action against him on the part of the company." SECTION 2377. Issue of new certificates un necessary but usual. 2378. Surrender of the old certificate 2380. Change of title when "received SECTION 2381. National banks: transfer on the 2382. Transfer under a general as- 2384. When the transfer must be by § 2365. In General: According to Charter, or By-Laws, or Usage, or Certificate. If the charter or governing statute prescribes in detail the mode in which transfers shall be made in order to be valid, that of course must be followed. If the charter is silent, or contains only general provisions, or remands the subject to the by-laws either in terms or by implication, and bylaws are passed prescribing the method, which by-laws do not infringe the charter or the law of the land, then that method must be followed. In the absence of by-laws, then a mode of transfer may be established by the company by usage and recited on the certificate, and a transfer in that mode will be good.1 § 2366. Continued: Consent of Directors.- Under a provision in the articles of association that "any attempted transfer not approved by the directors shall be absolutely void, both at law and in equity," a transfer of the certificates by a trustee, in fraud of his trust, which had not been approved and registered by the directors, when a restraining order on behalf of the cestuis que trustent was served on them, was held of no effect, although made to innocent takers for value.2 § 2367. By-Law Requiring Stock to be First Offered to Other Shareholders.- Where the by-laws of a corporation required that, before a sale of stock, the holder should offer it in writing, through the treasurer of the corporation, to the then |