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attaching creditor, although there be a valid by-law that stock is transferable only on the books of the company."
But it is now held that an assignment of a certificate of stock with a blank power of attorney to make the transfer upon the books of the corporation passes a complete legal title, and is effectual against the assignor's creditors without any registry upon the books of the corporation, and without notice to it of the assignment."
§ 213. Texas.-The stock of any corporation created in this state shall be deemed personal estate, and shall be transferable only on the books of the corporation in such manner as the by-laws may prescribe.
In the absence of a charter or statutory provision requiring a transfer of stock on the books of the company, as between the shareholder and his assignee, to pass title as against a creditor, the interest of the creditor is regarded as subordinate to that of a bona fide assignee.' The true policy of the law is to favor unrestricted transfers of stock. An assignee or purchaser should not be bound to look beyond the certificate, or to examine the books of the corporation, to ascertain the validity of a transfer, as a different rule would impair the value of stock, and seriously disturb the usages of trade and the established order of business.
§ 214. Utah. The stock shall be deemed personal property, and may be transferred in such manner as may be provided in the agreement or by-laws.
But although the by-laws of a corporation provide for the transfer of stock upon the books of the company, a judgment creditor buying stock which he knows his debtor has pledged
1 State Ins. Co. v. Gennett, 2 Tenn. Ch. 100.
Parker v. Bethel Hotel Co., 96 Tenn. 252, 34 S. W. Rep. 209; State Ins. Co. v. Sax, 2 Tenn. Ch. 507; Cornick v. Richards, 71 Tenn. (3 Lea) 1; Cherry v. Frost, 7 Lea 1, 21 Am. L. Reg. (N. S.) 57. See § 159.
8 Botts' Annot. R. Civ. Stats. 1895, art. 666.
'Strange v. Houston & Tex. Cent. R. Co., 53 Tex. 162; Seeligson v. Brown, 61 Tex. 114.
"Compiled Laws 1876, p. 230, § 542.
by a transfer of the certificate by indorsement in blank, acquires no title as against the pledgee.'
§ 215. Vermont.-The capital stock of all private corporations shall be deemed personal estate, and may be transferred as provided by its by-laws.
It is held in this state that a delivery of a certificate, with a power of transfer, vests the title in the transferee; that the object of having the transfer recorded on the books of the corporation is notice, and only that; and consequently that such a transfer, though unrecorded, is good against the party himself, and all those who have notice of the fact of the transfer. But such a transfer seems to be regarded as ineffectual as against creditors of the assignor. The stock, while standing in the assignor's name, after his transfer by delivery of the certificate, with a power of transfer upon the books of the company, is probably subject to any attachment at the suit of his creditors, if they have no notice in fact of the transfer." "We entertain no reasonable doubt," says Redfield, "that the mode of transfer of stock pointed out in the charter is the only mode which the public are bound to regard as conveying the title. All persons unaffected with notice to the contrary are at liberty to act upon the faith of the title being where it appears upon the books of the corporation to be. This view we do not think inconsistent with the notion that any other mode of conveyance may be perfectly good, between the parties to it, and to all others having notice of it, the same as an unrecorded deed, or notice of a mere equity."
§ 216. Virginia and West Virginia.-If any person, for valuable consideration, sell, pledge, or otherwise dispose of any shares belonging to him to another, and deliver to him
1 Barse Live Stock Co. v. Range Val. Cattle Co., 16 Utah 59, 50 Pac. Rep. 630.
2 G. S. 1894, § 3687.
Noyes v. Spaulding, 27 Vt. 420, 426, per Isham, J.
4 Sabin v. Bank of Woodstock, 21 Vt. 353, 362; Cheever v. Meyer, 52 Vt. 66.
5 Code 1887, § 1134.
Code 1891, c. 53, § 37.
the certificate for such shares, with a power of attorney authorizing the transfer of the same on the books of the corporation, the title of the former shall vest in the latter, so far as may be necessary to effect the sale, pledge, or other disposal of the said shares, not only as between the parties themselves, but also as against the creditors of and subsequent purchasers from the former.1
§ 217. Washington. The stock of the company shall be deemed personal estate, and shall be transferable in such manner as shall be prescribed by the by-laws of the company; but no transfer shall be valid, except between the parties thereto, until the same shall have been entered upon the books of the company, so as to show the names of the parties, by and to whom transferred, the numbers and designation of the shares, and the date of the transfer.
Any stockholder may pledge his stock by a delivery of the certificate or other evidence of his interest, but may, nevertheless, represent the same at all meetings, and vote as a stockholder.
§ 218. Wisconsin.'-The capital stock of every corporation divided into shares shall be deemed personal property, and when certificates thereof are issued, such shares may be transferred by indorsement of the owner, his attorney or legal representative, and delivery of the certificate. The delivery of a stock certificate of a corporation to a bona fide purchaser or pledgee for value, together with a written transfer of the same signed by the owner of the certificate, his attorney or legal representative, shall be sufficient delivery to transfer the title as against all persons; 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
1 Donnally v. Hearndon, 41 W. Va. Washington Sav. Bank, 18 Wash. 8, 519, 23 S. E. Rep. 646. 50 Pac. Rep. 576; Code 1896, § 2654.
2 Port Townsend Nat. Bank v. Port Townsend Gas & Fuel Co., 6 Wash. 597, 34 Pac. Rep. 155; Dearborn v.
3 Annot. Stat. 1898, § 1751; Plankinton v. Hildebrand, 89 Wis. 209, 61 N. W. Rep. 839.
transfer is recorded upon the books of the corporation or a new certificate is issued to the person to whom it has been so transferred.
The stock of every such corporation shall be deemed personal estate, and shall be transferable in the manner prescribed in its by-laws, but no shares shall be transferable until all previous calls thereon shall have been fully paid in.
§ 219. Wyoming. The stock of corporations shall be deemed personal property, and shall be transferable in such manner as shall be prescribed by the by-laws of the company."
§ 219a. The tendency of legislation is now strongly in the direction of making a transfer of the certificate without registration upon the company's books effectual as against creditors attaching the stock as the property of the person who had assigned his certificate; and the tendency of adjudication is also strongly in the same direction, in case the statute under construction does not in terms make a transfer without registration invalid for any purpose. A summary of the law as it now is in the different states may be found in the accompanying note.'
§ 220. Upon a review of the statutes and decisions upon this subject it appears that the courts have taken a much more liberal view of the policy that should govern in the matter of transfers of shares of stock than have the legislatures of the different states; for it appears that where there has been legislation upon this subject the legislation has generally been for the purpose of restricting transfers of stock by making a registry upon the books of the corporation requisite to the validity of such transfers for any purpose. The courts, on the other hand, have been disposed to allow the utmost freedom in such transfers, when they have not been restricted by public statutes, or by charters having the force of such statutes. The judicial interpretation of the common law rights of the parties respecting such transfers seems to have had in view the convenience of owners of corporate stocks, and that of those who purchase them, or take them as security; while legislation upon this subject has served rather for the protection of the creditors of stockholders. The judicial view of this matter is well stated by the supreme court of Tennessee in a recent case.1 "We know, as a matter of well accredited current history, that stocks are used every day in the transactions of our business men, as collaterals, as well as sold, and that the universal practice is to transfer or assign the certificate of the stock, with a power of attorney in blank, to be filled up, authorizing a transfer by the corporation on its books to the purchaser, on the presentation of which power, properly authenticated, the corporation transfers the stock to the purchaser or holder, and
Georgia, § 188a.
Illinois, §§ 190, 378a.
Louisiana, § 193.
Maryland, § 195.
Minnesota, § 198.
Mississippi, § 199.
New Hampshire, § 202.
New Jersey, § 204.
Ohio, § 208.
Pennsylvania, § 209.
Utah, § 214.
Richards, 3 Lea