lifetime of her father, and caused a transfer of the stock to herself on the books of the bank, the only way in which the stock, the thing that was intended to be given, could be delivered, and thus have perfected the donation; yet, not having done so, it was not a valid gift of the stock, either in law or equity, for want of delivery."

§ 137. A pledge of shares. A pledge of a chattel differs from a mortgage substantially in that the former transfers possession without title, and the latter, title without possession. And since the certificate is not the share, and theoretically there is no way by delivery of separating title and possession,-a share was in the earlier stage of the law, incapable of being made the subject of a pledge. This view no longer prevails; and, without the aid of statute, logic has been subordinated to convenience.

First. A pledgee of stock does not convert it by surrendering the certificate received and having the shares transferred into his own name on the books of the company. Nor does the usual rule apply that a pledgee upon payment must return the identical property received. One certificate is as good as another; one share is not distinguishable from the other shares; and it is enough that the pledgee keeps and is ready to return the same number of shares he received.

Where

1To the same effect is Retort Co. v. Mali, 65 Md. 93. shares are represented by a certificate, the general effect of the Uniform Stock Transfer Act is to prevent title to the shares from passing independently of the certificate; and to make the title passed by delivery of the endorsed certificate, complete. The consequence seems to be that delivery of the certificate is delivery of the share. Note that the Act applies only to certificates issued by Maryland corporations after July 1, 1910; and that a gift of shares by assignment aliunde the certificate is not affected by the Act.

Price v. Gover, 40 Md. 102; Rich v. Boyce, 39 Md. 314; Worthington v. Tormey, 34 Md. 193.

Second. There can be no pledge of stock without a transfer on the books or a delivery of the certificate so endorsed as to authorize the transfer. In Christian v. R. R. Co., 133 U. S. 233, the general doctrine is summarized: "A pledge, in the legal sense, requires to be delivered to the pledgee. He must have the possession of it. He may then, in default of payment of the debt for which the thing is pledged, sell it for the purpose of raising the amount, by merely giving proper notice to the pledgor. In the case of stocks and other choses in action, the pledgee must have possession of the certificate or other documentary title, with a transfer executed to himself or in blank (unless payable to bearer) so as to give him the control and power of disposal of it. Such things are then called pledges, but more generally collaterals; and they may be used in the same manner as pledges properly so called. If there is no transfer attached to, or accompanying the document, it is imperfect as a pledge, and requires a resort to a court of equity to give it effect."1

Third. The pledgee of a chattel has no right to repledge it before default; and this by weight of authority is true in the case of stock,-unless, of course, the pledgor otherwise agrees. Where, however, the pledgee is a broker, carrying the shares on margin for a customer, a usage to re-pledge has been sustained; and where the second pledge is for no

1 For attempts to assert the equitable right, see Buffalo Ins. Co. v. Third National Bank, 162 N. Y. 163: 48 L. R. A. 107; 193 U. S. 581; and Atkinson v. Foster, 134 Ill. 472.

2 Skiff v. Stoddard, 63 Conn. 198; reported with full briefs in 21 L. R. A. 102.

more than the amount due the first pledgee and the rights of the first pledgor are protected, there is no conversion.1

Fourth. If by endorsing on the certificate a blank assignment and power of attorney to transfer, the owner entrusts a pledgee with the indicia of ownership,-one who deals with the latter in good faith as absolute owner will be protected. And this is so whether the pledgee sells, or re-pledges for his own debt. But the wording of the endorsement may give notice of some limitation or restriction upon the rights of the holder of the endorsed certificate, and this principle has had a peculiar development in Maryland. Essentially, the blank form of assignment on the back of a certificate consists of two parts: first the assignment proper, and second the power of attorney to sign the transfer on the books. A form which had been in use for many years in many states and is still common, contains a wordy and meaningless amplification of the power of attorney. Instead of saying simply "to transfer the said shares on the books of the corporation with full powers of substitution in the premises," it reads: "I hereby constitute and appoint

1Oregon Co. v. Hillmers, 20 Fed. 717; cited in German Bank v. Renshaw, 78 Md. 475. In Price v. Gover, 40 Md. 106, decided in 1874, the question of a pledgee's right to re-pledge was left open; by the Act of 1878, Code 1904, Art. 27, sec. 167, it is made a misdemeanor, punishable by fine or imprisonment or both "for any person or persons, bank, building association or corporation to repledge or re-hypothecate any stocks, bonds or other security or securities the title to which passes by delivery or endorsement, received or held by him or them, as security for any money lent or advanced to the owner or holder of such stocks, bonds or other securities, during the continuance of the contract of pledge or hypothecation, without the consent of the pledgor."

2This is the general doctrine and is assumed by Judge Alvey, dissenting on other points, in Tome v. R. R. Co., 39 Md. 105.

my true and lawful attorney irrevocable for me and in my name and stead but to his use to sell, assign, transfer and set over all or any part of the said stock." In a hard case, where the holder of the endorsed certificate, in violation of the owner's rights, pledged the certificate and shares for his own debt, the court held that the assignment gave the holder the right to sell but not the right to pledge; and that the pledgee took subject to the rights of the real owner.1

§ 138. Execution on shares. There is no way, independently of statute, by which a creditor can reach the share property of his debtor. A share is a chose in action, and therefore not subject to direct levy; it does not constitute a debt due by the corporation to the holder, and therefore cannot be reached by garnishment. Statutes, however, universally provide some manner for reaching stock, and in the construction of them a great diversity of opinion has arisen over this question,-Whether an unrecorded but prior assignment by the registered owner, being the execution debtor, is good as against the execution creditor.

1German Bank v. Renshaw, 78 Md. 275. In Merchants' Bank v. Williams, 110 Md. 334, a certificate having a similarly worded assignment was pledged by the owner (not being the registered holder) to a banker who repledged to the appellant; and the same rule was applied. It is not certain how far the Uniform Stock Transfer Act affects these decisions. A pledgee is "a purchaser for value in good faith;" and section 58 (2) eliminates the doctrine of constructive notice by declaring that "a thing is done in good faith when it is in fact done honestly, whether it be done negligently or not." All the same, notice given by a restrictive endorsement is more than constructive. And while a purchaser is safe, it behooves the Maryland pledgee of an unregistered holder to avoid certificates having this peculiar form of assignment. He can escape trouble by requiring the borrower to register.

In the leading case of Fisher v. Essex Bank, 5 Gray 373, decided in 1855, it is said by Shaw, C. J.: "It is obviously an object of great importance that this large amount of (share) property should be attachable and liable to be sold on execution. * The certificate being in the hands of the debtor, or some other person on his account, and his interest being adverse to that of the attaching creditor, the officer could seldom, if ever, take possession of it as a chattel. It is therefore provided that the attachment may be effected by leaving written notice at the bank; and, on a sale on execution, it is made the duty of the bank and its officers, on notice and request, to give the purchaser a new certificate This of necessity supersedes the outstanding certificate to the former holder. All these objects are most effectually accomplished by making the transfer at the bank, the decisive act of passing the property, the legal, transferable, attachable interest." This is, of course, a corollary of the original theory, above discussed, and it conflicts with the modern tendency to protect the unregistered certificate holder. In a number of states statutes have been passed whereunder a purchaser or pledgee for value, who has received the certificate with an assignment and power of attorney to transfer, takes the legal title to the shares against all persons, including the execution creditors of the registered holder;1 and such is the effect of the Uniform Stock Transfer Act.2

1 Under such statutes, it makes no difference to the holder of the endorsed certificate without notice, that an execution is outstanding at the time of the pledge or purchase. For a collection of the authorities, enacted and judicial, in the different states, see 2 Cook Corp. secs. 486 and following. Machen Corp. sec. 885. 2Post, 140.