to that share, one membership for another, is an acquired trait. Mere assignment does not work a novation; and while the latter may usually be had for the asking, it is still important to ask for it.

In common usage, the word transfer includes any form of assignment; and that in which the corporation participates is distinguished by calling it a "transfer on the books." As between these two forms of transfer, there are some differences upon which the cases agree. On the one hand, any mode of conveyance founded upon valuable consideration will, as between the parties, pass the property in the share and with it any right the grantor may have to demand a formal transfer. On the other hand, until a transfer is made, or demanded and wrongfully refused; or until the corporation by some act acquiesces in the transfer,-the incidents of membership status, as between member on the one hand and the corporation and its creditors on the other, do not pass or attach. But the conflict of opinion begins when there are rival contestants for the same share, each claiming under the same registered owner. Suppose that the latter, being evilly minded, first endorses the certificate to A; then, representing that the certificate is lost, executes a written assignment to B; and finally, on the same representation, makes to C a formal transfer on the books, before either A or B has notified the company of his rights. In each case the equities of the vendees may be equal, and it becomes essential to know which one has a legal title to the stock. Again, conflict may arise between the execution creditor of a registered owner and the holder of a prior but unrecorded assignment; or between the personal representatives of a deceased registered owner and the holder of an unrecorded assignment, on the certificate or otherwise, claiming by way of gift. So again, in

exchange for a certificate which, after being endorsed in blank, has been lost or stolen or which has been endorsed by an infant or lunatic registered owner,-the corporation may have issued a new certificate to an innocent purchaser.

The question of title involved in these and similar situations, has created a mass of conflicting decisions, due, broadly speaking, to differences in the point of view from which the question is examined. All the cases agree that in the matter of receiving votes, paying dividends, asserting liens on stock (where permissible), and generally in all internal affairs, the corporation may treat the registered holder as the real owner of the shares. For the rest, the progressive theories may be traced and summarized, according to the weight of authority and reason, as follows:

First. In the original theory, the share is transferable only upon the books of the corporation and by the act of the registered owner or his attorney in fact. The corporation has the right to demand the actual presence of the transferor; and by waiving this, it takes the risk of a transfer which by reason, for example, of infancy, lunacy or forgery, is unauthorized. It is the signing of the transfer book that passes the legal title and constitutes the equivalent of delivery in the case of tangible property. But a demand for a transfer will be sufficient in case of neglect or wrongful refusal on the part of the corporation; and where no formal transfer books are kept by it, the issue of a new certificate or any other act of acquiescence may operate as a transfer. As a consequence of this theory, a gift of shares by delivery of the endorsed certificate merely, is incomplete. And while a share may be assigned by deed, or by unsealed writing independently of the certificate, or by an endorsement on the certificate, this does not, ex proprio vigore, transfer the

share. As between two assignees of the same share with equal equities, the one who by formal transfer or its equivalent first obtains the legal title prevails.

Second. A share may exist without any corresponding certificate. In such case, and during the period when share certificates were of minor importance commercially, the original theory is and was workable. But it does not fit in with modern conditions. Shares become all but universally represented by certificates; trading in shares develops, and in a practical aspect it is much the same as trading in certificates. Normally, moreover, a certificate contains a statement of the corporation that the shares thereby evidenced will be transferred on the corporate books "only on the surrender of this certificate." Normally, also, there is on the back of the certificate a blank form of assignment. Consequently, the tendency grows to identify the share with the certificate: and this tendency is reflected in the decisions. The courts will not go to the extent of treating the certificate as negotiable, but they say that delivery of a certificate duly endorsed passes the legal title to the share, as between the parties, and the equitable title with the right to demand a legal one, as between the corporation and the endorsee of the certificate; and sometimes the certificate is called quasi-negotiable. Moreover, by application of the doctrine of estoppel, the corporation is held liable in damages to one dealing in good faith and for value, if the person certified on the certificate to be the owner of the shares is not such. And if

1Ante, 93. The necessity for and the effect of a transfer are discussed in the following cases-not with entire consistency: Pennington v. Gittings, 2 G. & J. 208; Retort Co. v. Mali, 65 Md. 97; Noble v. Turner, 69 Md. 519; Taliaferro v. Bank, 71 Md. 214; Bloede v. Bloede Co., 84 Md. 141; Real Estate Co. v. Bird, 90 Md. 229.

the corporation permits a transfer without demanding a surrender of the certificate, the bona fide holder for value (in the absence of laches) may demand registration as owner or recover damages as for a conversion of the shares>

Third. The final stage of development is that reached. by states which have adopted the Uniform, Stock Transfer Act. This is a modification of the subject embraced in the title, along lines which are, in the main, well directed. The general result is to identify the share with the certificate by which it is evidenced, and to make share property, where evidenced by a certificate, as nearly negotiable as its nature permits, the dominant idea being that the holder of the certificate in good faith and for value, whether registered or not, is the owner of the shares, as against any other claimant, by any other form of assignment voluntary or involuntary, and without regard to whether the latter obtains prior registration on the books or not.

Fourth. The following sections deal with some concrete · questions presented in illustrative cases, and it will be seen

1Code 1911, Art. 23, secs. 38 to 60. This is the Act of 1910, chap. 73, and is reproduced in the Appendix. Note that it applies only to Maryland corporations and only to certificates (not shares) issued after July 1, 1910. The provision (sec. 58) that the Act shall apply to corporations of other states "whose laws are consistent with" this Act, seems to be meaningless. Certificates of national banking associations are not in terms included.

2Not entirely-sec. 39 providing that nothing in the Act "shall be construed as enlarging the powers of an infant or other person lacking full legal capacity," might well have been qualified by the principle of the Negotiable Instruments Act (Code 1911, Art. 13, sec. 41), namely, that “the endorsement or assignment of the instrument by a corporation or by an infant passes the property therein, notwithstanding that from want of capacity the corporation or infant may incur no liability thereon."

that the answers do not consistently follow any particular theory. First of all, an explanation will be given of certain terms used in the discussion.

§ 133. What is meant by a transfer on the books. Those which have to do with the capital stock are usually three in number: I. The Transfer Book. In this are entered in the appropriate columns, the names of the transferor and the transferee and the number of shares transferred. Ordinarily there are entered also the numbers of the certificate cancelled and of the new one issued; but the essential fact is the signature of the transferor, or his attorney acting under the power usually, but not necessarily, embodied in the assignment on the back of the certificate.1 2. The Stock Ledger. Into this are posted the transfers, and in it is kept the account of each shareholder, wherein he is credited and debited from time to time with the shares acquired and transferred. 3. The Certificate Book. From this are taken the regularly numbered and executed certificates issued to the shareholder as evidence of ownership. Corresponding with each certificate is the similarly numbered stub, showing the person to whom it was issued, the num

1 In the Appendix are given forms of a transfer on the books; of a share certificate and the assignment and power of attorney endorsed thereon. The place for the name of the attorney to transfer is ordinarily left blank and subsequently filled in with the name of the corporation's transfer clerk. No particular formality is required in the power of attorney, and ordinarily it need not be acknowledged; but in Code 1911, Art. 10, secs. 29 and 30, there is an old provision (Act of 1838, chap. 49) for the transfer by power of attorney of stock standing in the name of a partnership. The effect of this provision is that if the firm name is signed and sealed by one partner and the document acknowledged in the way provided, the power will be as valid and effectual as if signed and sealed by all the members of the firm.