existing stockholders, who had the right of pre-emption of such stock at the selling price, the court held that, the corporation having permitted transfers of certain of its stock to be made, the inference therefrom was that the offer had been made and declined, or that the requirement had been waived. The court further held that even if it appeared that such offer was neither made and declined, nor waived, the requirement being solely for the benefit of those who were stockholders at the time, none other could raise the objection.2

my

§ 2368. Blank Assignment and Power of Attorney. The usual share certificate contains on its back a printed assignment or indorsement and also a power of attorney in blank, like the following: "For value received I hereby assign the within named share to and appoint attorney to make the transfer on the books of the company." This is signed by the person to whom the shares are issued. In this manner, by the usages of business, of which the courts take judicial notice, the certificate may be passed from hand to hand indefinitely, by the person to whom the certificate is issued simply signing this indorsement and delivering the certificate with the blanks unfilled to his assignee. When it reaches the hands of some one who desires to assume the legal rights of a stockholder, so as to be entitled to vote at corporate elections and to receive dividends, he fills up the blanks, by inserting his own name as transferee, just as the holder of a promissory note indorsed in blank is entitled by the law merchant, to insert any name he pleases above the indorsement as the payee. He also inserts in the second blank the name of the attorney in fact whom he wishes to make the transfer for him on the books of the corporation. This person is usually the secretary or some other officer of the company, though he may insert the name of whomsoever he pleases. The attorney so appointed does ex

1 American Nat. Bank v. Oriental Mills, 17 R. I. 551; s. c. Index. JJ. 74; 11 Rail. & Corp. L. J. 206; 23 Atl. Rep. 795.

2 Ibid.

3 Kortright v. Buffalo Com. Bank,

20 Wend. (N. Y.) 91; 22 Id. 348; s. c. 34 Am. Dec. 317.

4 Dunn v. Commercial Bank of Bufalo, 11 Barb. (N. Y.) 580. It is held in this case that the possession of the certificate with a blank assignment, and

actly what the original shareholder would have done had he gone to the company's office to make the transfer of the shares to his vendee: he makes an entry on the book kept by the company for that purpose, usually the stock ledger, to the effect that the shares have been transferred to the new purchaser. Then the certificate is surrendered, as hereafter indicated, and a new certificate is issued to the transferee.

§ 2369. Attestation: Two Witnesses. - A by-law requiring the attestation of the cashier or two other witnesses to the signature of the holder of a certificate has been held valid; and where the by-law read "in the presence of the cashier or two other witnesses," this was held to require that the cashier or two other witnesses should, in writing, attest the signature of the holder.2

§ 2370. Assignment Need not be Under Seal. - An assignment of shares in a corporation need not be under seal."

§ 2371. When Transfer Made by Officer of the Corporation and not by Assignor. As elsewhere seen, the transfer is ordinarily made on the books of the corporation, either by the owner of the shares in whose name they stand on the books, or by his attorney appointed for that purpose. He or his lawful attorney, and not some one else, is the proper person to pass the legal title to his own property; yet we find one case holding that where the charter of a corporation provides that the

power of attorney, is no evidence of title, but this is a judicial hallucination; all the cases hold or imply the contrary. Where the owner of shares assigned them to two persons, and gave a power of attorney to one of them to transfer them on the books of the bank, the power was held to be valid, whether the power authorized the transfer to be made to both assignees, or to the attorney alone; and the bank was held not to be liable for refusing to transfer the shares to a subsequent attaching creditor, who sold them on execution. Plymouth v. Bank of Norfolk, 10 Pick. (Mass.) 454.

1 Post, § 2377.

2 Dane v. Young, 61 Me. 160.

3 Atkinson v. Atkinson, 8 Allen (Mass.), 15. But in England if the corporation undertakes to give a certificate of the title of a shareholder, to enable him to effect a transfer of his shares to a new purchaser, this is held to be a representation of the credit and validity of the transfer within the meaning of § 6, of Lord Tenterden's Act, and is invalid if not under seal, and ultra vires. Bishop v. Balkis Consol. Co., 25 Q. B. Div. 77. 4 Post, § 2368.

shares of the corporation shall be transferable in the manner prescribed by the by-laws, and it is not shown that any by-laws have been adopted, but the certificate of stock provides that the stock is transferable only on the books of the company on the surrender of the certificate, the officers of the company, and not the assignor of the stock, should transfer the stock on the books.1

§ 2372. What Officer. Where a corporation has no secretary or clerk, and the president has charge of the stock books, a demand on the latter to make the necessary transfer of stock to a purchaser of outstanding shares is sufficient."

§ 2373. Shares in Names of Executors: Joint Transfer. When, under the English Companies Clauses Act of 1845, § 18, the names of the executors of a deceased shareholder in a company are placed on the register of shareholders in respect of shares which belonged to their testator, they become joint shareholders in their individual capacity, although they may be described as executors in the register, and consequently the shares can only be transferred by means of a transfer executed by all of them.3

§ 2374. Transfer Made on What Book; Stock Ledger, Subscription List.-Though the by-laws of a corporation require the entry of transfers of shares on a stock ledger, yet if none is kept, and a transfer by the subscriber to the capital stock to another is entered, according to the custom of the company on the subscription list, and an assignment is indorsed on the shares themselves, and a new certificate is issued to the purchaser by the company, the latter cannot deny the validity of the transfer. So, a provision in a by-law and in corporate stock certificates, that they shall be transferable only on the company's transfer books, is waived where no regular transfer books are ever furnished and the transfers are registered on the certificate book, which, with memoranda on its marginal stubs, answers the purpose of a transfer book and a stock ledger as

Green Mount &c. Turnpike Co. v. Bulla, 45 Ind. 1.

2 Green Mount &c. Turnpike Co. v. Bulla, 45 Ind. 1.

3 Barton v. London &c. R. Co., 24 Q. B. Div. 77.

4 Stewart v. Walla Walla Print. &c. Co. 1 Wash. 521; s. c. 20 Pac. Rep. 605.

well as of a certificate book.1 And even where the requirement of a general statute was that transfers, to be valid as to third persons, must be "regularly entered on the books of the company, "2 it has been held that a simple entry in a stock book that certain stock has been assigned as collateral security is sufficient to protect the assignee from the claims of the assignor's judgment creditors. A transfer may be valid and effectual

as between the parties, without any registration at the office of the company, and will be binding upon all parties, if noted by the company according to their usual method, no transfer books being kept by them."

On

§ 2375. Transfer Book or Stock Ledger as Evidence. principle, the transfer book or stock ledger of the corporation is evidence against those who are in privity with it, and against such persons only. For instance, the transfer book is admissible to show the date of a transfer where that is material." It has been held that, as between a corporation and a corporator, the stock book is primary, and the certificate secondary evidence of their relation. The appropriate evidence of the stockholder's right to vote at corporate elections by incorporated companies includes the stock ledger, as well as the certificate book and transfer book, but the ledger is evidence only as subordinate to, and as supported by the other books. In case of dispute the transfer book must control the rest. Where the directors are deprived of the possession of the stock book, it is proper for them to open a new one, making it a copy, as far as possible, of the old. In such a case, the inspectors of an election may properly refer to the new stock-book to ascertain who are voters; but if the old book be produced, the record therein must

1 American Nat. Bank v. Oriental Mills. 17 R. I. - Index JJ. 74; s. c. 11 Rail. & Corp. L. J. 206; 23 Atl. Rep. 795.

2 Code Iowa, § 1628 (1078).

3 Moore v. Marshalltown &c. Co., 81 Iowa, 45; 8. c. 46 N. W. Rep. 750. 4 Haegele v. Western Stove Co., 29 Mo. App. 487.

5 Ante, § 1919; Contra, Hoagland v. Bell, 36 Barb. (N. Y.) 57. Compare Pinkerton v. Manchester &c. R. Co., 42 N. H. 424.

6 Kraft v. Coykendall, 7 N. Y. Supp. 140; s. c. 26 N. Y. St. Rep. 79. 7 Bank of Commerce's Appeal, 73 Pa. St. 59.

8 Downing v. Potts, 23 N. J. L.

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govern in reference to transfers recorded there before the new book was opened.1

§ 2376. What is a Sufficient Register.- Where the act incorporating a turnpike company provided that the shares of stock should be transferable only on the books of the company, in such manner as the company should, by their by-laws, direct; and a by-law of the company provided that the board of directors should prescribe the form of transfer to be registered by the clerk on the books of the company, and that no transfer should be valid unless so made and registered, a written assignment of stock, made in pais, in the form prescribed by such by-law, and seasonably registered at length by the clerk on the books of the company, was a transfer on the books of the company, within the meaning of the charter, and conveyed the legal title to the shares.2 A statute of Alabama provides that transfers of corporate stock shall not be valid as against bona fide creditors and subsequent purchasers without notice, "except from the time such transfer shall have been registered or made upon the book or books of such company." A corporation kept only a single book of stock certificates with a stub attached to each, on which were entered the date, name, number, etc., corresponding with each certificate issued. A memorandum entered on the stub, thus: "Transf. to A., assignee, for collateral, Dec. 1, 1884," was held to be a substantial compliance with the statute so as to charge with notice a subsequent creditor or purchaser.3 A corporate bylaw required the consent of the directors to a transfer of stock to be made on the books of the company, and to be attested by the secretary. A stockholder empowered the secretary, in writing, to transfer certain stock, in pursuance of which, the secretary entered on the books that the stock was transferred, see paper filed," which paper filed, being the power, he wafered to the book, and attested the entry of transfer as secretary, but signed no trans

1 Schoharie Valley R. Co.'s Case, 12 Abb. Pr. (N. s.) (N. Y.) 394.

2 Northrop v. Carter, 5 Conn. 246. Compare Richmondville Man. Co. v. Prall, 9 Conn. 487; Bridgeport Bank v. N. Y. &c. R. Co., 30 Conn. 231.

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3 Fisher v. Jones, 82 Ala. 117; s. c. 19 Am. & Eng. Corp. Cas. 450; 3 South. Rep. 13; 2 Rail. & Corp. L. J. 535.