in person, or by attorney duly authorized, as the by-laws may prescribe, subject, however, to all payments due, or to become due thereon; and the assignee or party to whom the same shall have been so transferred, shall be a member of said corporation, and have and enjoy all the immunities, privileges and franchises, and be subject to all the liabilities, conditions and penalties incident thereto, in the same manner as the original subscriber or holder would have been. Upon a sale of such stock in satisfaction of any debt for which it is pledged, the purchaser shall have the right to compel a transfer of such stock upon the corporation books and the delivery of a proper certificate therefor.1

A substantial compliance with a by-law requiring a transfer of stock to be made on the books of the company, and attested by the secretary, is all that is necessary. Thus, when a stockholder empowered the secretary of the company to transfer certain shares, and the secretary, in pursuance of such power, entered on the books that the stock was transferred, adding "see paper filed," and wafered the power of attorney to the book and attested the entry of transfer as secretary, the transfer was held to be good, although the secretary signed no transfer as attorney under the power. "The practice was to permit the transfers in the presence of the secretary, who attested them. Everything was done which the by-laws and usage of the company required, except that he did not sign the transfer twice over, as attorney, and then attest his own signature as secretary. But he no doubt thought that attaching the sign manual of the holder, appended to the authority or power, to the books and entry, was higher evidence of the transfer than his own signature would be. The law looks more to the substance of things than to the mere form."

In this state an attachment of stock is made in the manner of a proceeding against a trustee or garnishee in a foreign attachment, and it is held that an assignment of stock by deliv

13 Pepper and Lewis Dig. 1897, p. 178, § 7.

2 Chambersburg Ins. Co. v. Smith, 11 Pa. St. 120, 125.

ery of the certificate with a power to transfer, conveys the real ownership of the stock, so that an attachment afterwards made of the stock, as the property of the assignor, before a transfer is made upon the books of the corporation, is ineffectual.' The assignee in such case is the equitable owner, or the real owner, and must be treated as such when known, by all the world, excepting the corporation itself, which, for certain purposes, may refuse to do so. The effect of such an assignment of stock is the same as that of an assignment of a chose in action prior to the service of a trustee or garnishee process upon the supposed trustee; although the trustee may then have had no notice of the assignment, this will prevail against the subsequent attachment.

In one case it appeared that the Duchess of Cumberland bought at London, in 1794, ten shares of the Bank of the United States, and received therefor a certificate with a blank power to transfer. She held the certificate and power until 1804. In 1803 the United States attached the stock, which still stood in the seller's name, for a debt due from him. It was proved, under objection, that it had been the course of business in relation to the sale of this stock in England, for the vendor to deliver the certificates to the vendee, together with a power of attorney from him in whose name the stock stood, to a third person, usually an assistant cashier of the bank, authorizing him to transfer the same to some person not named, and that by the delivery of the certificate and the blank

1 Finney's Appeal, 59 Pa. St. 398; Eby v. Guest, 94 Pa. St. 160; Telford & F. Turnpike Co. v. Gerhab (Pa.), 13 Atl. Rep. 90; Commonwealth v. Watmough, 6 Whart. (Pa.) 117; United States v.Vaughan, 3 Binn. (Pa.) 394. In the latter case Yeates, J., said: "It can not be denied that a mere chose in action, equitably assigned, is not subject to the operation of a foreign at tachment instituted against the party, whose name must necessarily be used at law for the recovery of the demand ·

and that an attaching creditor can stand on no better footing than his debtor."

And see Early & Lane's App., 89 Pa. St. 411; Bank of Commerce's App., 73 Pa. St. 59.

2 An assignment of the stock of a corporation to itself, as collateral security for a loan, divests the title of the assignor so far as to prevent a sale of it under a fieri facias against him. Eby v. Guest, 94 Pa. St. 160.

power of attorney, the shares passed from hand to hand, the blank never being filled up until it was forwarded to the United States for transfer. It was held that the purchaser's title was superior to that of the attaching creditor.'

§ 210. Rhode Island. The shares into which the capital stock of any corporation shall be divided shall be deemed to be personal estate, unless otherwise provided in the act creating the corporation, and shall be transferable in such manner as shall be prescribed by the by-laws of the corporation.

The delivery of a certificate of stock of a corporation, transferable only on the books of the corporation on surrender of the certificate, to a bona fide purchaser or pledgee for value, together with a written transfer of the same or a written power of attorney to sell, assign, and transfer the same, signed by the owner of the certificate, shall be a sufficient delivery to transfer the title against all parties; but no such transfer shall affect the right of the corporation to pay any dividend due upon the stock, or to treat the holder of record as the holder in fact, until such transfer is recorded, or presented for record, upon the books of the corporation, or a new certificate is issued to the person to whom it has been so transferred."

In a recent case in this state' it appeared that a person owning certain corporate shares, transferred them on the books of the corporation as collateral for a loan which he had negotiated for. The arrangements for the loan having fallen through, the person in whose name the certificate had been taken out, at the request of the owner of the shares, indorsed and transferred the certificate of stock to a creditor of the owner. Before a transfer was made on the books of the corporation to this creditor, the shares were attached by another creditor. The charter of the corporation contained no provision as to the transfer of stock, but the by-laws provided that "all trans

1 United States v. Vaughan, 3 Binn. 394.

2 G. L. 1896, c. 177, §§ 2, 20.

8 G. L. 1896, c. 177, § 20.

Beckwith v. Burrough, 13 R. I. 294; Lippitt v. Am. Wood Paper Co., 15 R. I. 141, 23 Atl. Rep. 111.

fers of stock shall be made in the books of the company." On a bill in equity brought to establish the lien of the attachment, it was held that, in the absence of any fraudulent intent on the part of the debtor in the transfer of the stock, the attachment could not be sustained. Chief Justice Durfee, delivering the opinion of the court, said: "Where the legal and the equitable titles unite in the same person, it is well settled that such a transfer carries at least the equitable title, even when, by statute, charter, or by-law, the stock is declared to be transferable only on the corporation books. In the case at bar, however, the legal title was in one person and the equitable in another, and the question is what, in such a case, is the effect of such a transfer. It may be that in such a case the equitable title would not always pass; as for instance, if the transfer were made by the legal owner to pay a debt of his without the consent of the equitable owner. But we have no case like that here. Here the transfer was made, not in violation of the trust, but in fulfilment of it. It was made under the direction of the equitable owner to secure or pay pro tanto his debt, and when made was delivered by him personally to the transferee. We think the equitable title must be held to have passed. An equitable assignment may be made without deed or writing, by any act intended to operate as such, a delivery of the evidences of title being particularly significant of such an intent. Without deciding, therefore, whether an unrecorded transfer would avail against an attaching creditor where the stock stood in the name of the debtor, we decide, for the reasons above given, that the complainant has not, independently of his charges of fraud, made out a case which entitles him to relief."

§ 211. South Carolina.-The shares in the capital stock of

1 Lockwood v. Mechanics' National Bank, 9 R. I. 308, 331, 11 Am. Rep. 253; Broadway Bank v. McElrath, 13 N. J. Eq. 24; United States v. Vaughan, 3 Binn. 394; Grymes v. Hone, 49 N. Y. 17, 10 Am. Rep. 313; Black v. JONES PLEDGES-15

Zacharie, 3 How. (U. S.) 483; Parrott v. Byers, 40 Cal. 614; Blouin v. Hart, 30 La. Ann. 714; Bank of America v. McNeil, 10 Bush 54.

2 G. S. 1882, § 1365; R. S. 1893, § 1500, pl. 4.

such corporations shall be deemed personal estate; and the mode of issuing the evidence of stock, and the manner, terms, and conditions of assigning and transferring shares, shall be prescribed by the by-laws of each corporation.

§ 211a. South Dakota.'-Whenever the capital stock of any corporation is divided into shares, and certificates therefor are issued, such shares of stock are personal property, and may be transferred by indorsement by the signature of the proprietor, or his attorney or legal representative, and delivery of the certificate; but such transfer is not valid, except between the parties thereto, until the same is so entered upon the books of the corporation as to show the names of the parties by and to whom transferred, the number or designation of the shares, and the date of the transfer.

§ 212. Tennessee.-According to the earlier decisions in this state, the title of one taking certificates of stock as collateral security was not regarded as complete against the owner's creditors until notice of the transfer had been given the corporation. If, before such notice was given, such creditor attached the stock, or levied execution upon it, he had the better right to it. This rule was based upon the English doctrine, that notice is necessary to perfect an assignment of any chose in action; and the policy of the rule, as applied to transfers of stock, was regarded as obvious, because it afforded a ready means of ascertaining the title to stock, and of preventing the setting up of fraudulent claims under secret transfers of certificates. By giving such notice to the company, the assignee acquired an equity superior to the right of a subsequently

Annot. Stats. 1899; Civ. Code, $3827. The statute relates to transfer of the legal title, and not to an equitable lien. A transfer on the books is not essential to validity of pledge of stock in a corporation. Van Cise v. Merchants' Nat. Bank, 4 Dak. 485, 33 N. W. Rep. 897.

* State Ins. Co. v. Sax, 2 Tenn. Ch. 507; Clodfelter v. Cox, 1 Sneed 330, 60 Am. Dec. 157; and see dissenting opinions of McFarland and Cooper, JJ., in Cornick v. Richards, 3 Lea 1.

Judson v. Corcoran, 17 How. 612.