The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1854-11-28

either side. The certificates such TO deceive
every body who had anything TO do with them. STU
they were invalid There cannot be = doubt then that
the vendees would be entitled back the money
they had paid for them" Nothing has been cited nor
have discovered any authority sufficient TO overthrow
or impair these cases cannot see why they DO not
determine ths point now considered Whethe. the o..
fence is ndctabe forgery has been doubted by able
counsel but have the doctrine of Chief Justice Abb
bolt, that combination TO fabrcae shares OF com
fence punishable in criminal way (aea Mott, 2;
Carr VS. Payne 52) liz next urged on behalf OF the de-
PENDANTS that they were never . ~ rsiion 70
this stock, but that throughout they negotAtea as
pedgees acted pledgees and the STOCK IN
out TO the Mesrs Schuyler the true owners for every
authorization and Of their acts and obeyed their
directions and assigned nothing, and proessed to as
sign nothing the interest of Pledges which
the requistion of the firm they absolutely bound
to do have been greatly pressed with the argument
of which this brief summary, but, after much
sideration, think it is not conclusive In the frst
place. be remembered that the cashier the day
OF the insolvency Of the firm (he S0h Of June
attempted to have transfer OF the stock made to the
president Of the bank and would have procured had
did eject the trsnser morning Of the q july
before II o'clock from his own name to that Of the pre-
sdent and received the new certificate about y O'clock
assignment Of the securities and the arrangement
acate. with q blank power to the plaintiffs
to transfer, signed BY the president: The law,
to be, that the party after default, may sell at
auction upon BILE notice Of the time and place to
Sa viii
| Court 7. R. 1917 In both Of the notes in ques-
ton the agreement is, that the stock may be sold
at the board of brokers' public private SALE at
the option Of the bank, and without notice have had
occasion to several printed FORMS in which the pro-
vision for sale is the same. Although such clause
would, think, be construed to sale to third
person. there be legal objection to the Pledge
IL
sion speak Of the general Law, not affected by
statute So the PLEDGE holds the stock as owner
who may have right to redeem-a right to be enforced
by calling for the transfer of equal number of shares
The bank in this did not exercise its power to sell
at public sale, at the board Of brokers' But is
other question: whether did not exercise the power of
selling, at private SALE without notice, when It frst
caused the transfer to be made which vested it with
every recognized indication and evidence Of ownership
and then transferred the stock the plaintiffs Again.
the of allowing recovery in like these is,
that money was paid for what was deemed an existing
right and when it is proven to have no existence, the
party receiving ought not to retain it. Now, whether
he got the money Pledge owner does not appear
to be Of material consequence in such aspect Of the
question. In the case of Fatman Loback Il Dner
Pep 354) the Superior Court treat the filling up blank
power attached to certificate of stock and delivering
able tile into legal one and thew held that. whether
this done for the purpose Of selling hypotheca
ing, made difference to the rights Of subsequent
holder conclude that this action would be to recover
back the paid deducting the SO 000 upon the
sumption of the stock transferred being to be
void and vaueess
5.-This consideration leads inevitably to the ques
ton to what the rights and position Of the hold
ers of such fabricated relation to the company
have before stated that to the shares in question
they are plainly portions of this stock whatever obscu
rity may attend the tracing Of the rest cannot but
add my fixed conviction that vast Of the disputed
stock be followed and identified, and believe that
could competent tribunal prescribe few and
sonabe rules Of appropriation and adjustment the task
would not transcend the power Of mercantile ability to
mark the whole But it Is enough in this instance that
t sa ,nese ssae Sr ann and re ws
the railroad company and its innocent stockholders
bound for these sharesS and II what the nature
and extent of their liability These inquiries which
have stirred the mind of the commercial community in
degree rarely known in this country, and which have
evoked the exercise of the highest professional ability
and learning in this and sister State Of Connecticut
to meet and to solve them 1t is unnecessary to enter
upon that wide field of investigation into the origin and
nature of corporations and the extent Of their powers
which, the learning and reasoning OF the able
counsel would lead me. 1t Is sufficient to say that the
rules governing the ancient municipal corporations of
cities aud towns shed but little light upon question
like the present Such corporations had originally their
rise in the principle of protection OF life and property
from the barons and kings, and watch and ward the
duty of the burghers and the bond Of their safety.
favor They were all inroads upon feuiaiism and wsrs
all personal and peculiar privileges Rse and Progress
Of Gties) {" Smiths Wealth Of Nations vol g. page
Ill, ct seq But when the increase OF trade and
merce led 10 appreciation Of the value of combina
ton Of capital and effort when men, having learned
what wonders could be accomplished by union began to
think that union competent for every ng"-(Dr
Channing)-the formation Of partnerships began. Joint
stock associations followed. The principle was at first
extension of the essential elements Of partner
ship to greater number OF members, with vara-
tons government But the perls personal respon
sibiy to the members, and the unwiedy machinery Of
such body led to application to the State to give them
the protection of an incorporation. Through all the
common law-through all the legislation Of England, and
of and other States, applicable to associations
partnership recognized, changed indeed, modified, or
impaired but still pervading and discernibe Continuing
the law Of nd that joint stock association. S
known before the act of i10 called the Bubble act
and they were based upon the principle Of partnership
with attempt to make shares transferable, and TO
limit the personal responsibility Of members. That
ue recognized the existence Of such companies and
speaks of their mschievous consequences-that they
have attempted to corporate bodies pretending to
make their shares in stock transferable without legal
authority by statute charter from the crown. The
act then provided that all such undertakings and at
tempts void and Illegal and especially the acting
or presuming to act as corporate body, the raising
pretending to raise transferable stock
stocks, to assign any share without authority.
BY section 25th the not to restrain the carry
such manner as had been usually DONE might be
done according to law. The transferabty of shares
unrestricted and unregulated blow at the
ability Of every member Of partnership BY rendering
the tracing Of debtors difficult and sometimes mposs
BILE to the creditor Such was therefore reserved
ever, the effort perpetually made to engraft this
principle upon the schemes OF joint stock associations
and no less strcnuousy was II attempted to limit the
personal responsibility Of the members to the amount
subscribed and exempt them from the demand Of cred
tors. But the courts of justice invariably defeated
these attempts and xed upon these joint stock compa-
mics every material attribute OF common law partner
ship, in the assignabty Of shares and the ALSO
lutte personal liability of members The expression OF
Lord Eldon but the echo of multitude of deci-
sions that the wcalthies nobleman the land might
be involved to his last acre, and his last shilling by
connection with such company In the year iS2s, by
the Act of Q, Geo: cap Of, the Bubble act re-
pealed, and for the first time that Of it
provided "That in any charter thereafter to be grant
cd by his Majesty, it should be lawful to provide that
the members Of such corporation should be individually
liable in their persons and property for the debts
contracts engagements of such corporation to such
extent his Majesty might deem III and declare"
1t is sufficient to notice here the policy Of State
exhibited in the manufacturing statute Of March, 1911,
and found in the Constitution ITSELF in regard TO
banking interpretations. The personal responsibility Of
the members recognised, although limited to the
OF their respective shares of stock (Se "a CHI
o., Constitution of 1885, art 8, ~ From the
lest judicial decision in State to the present tme
companies organized under this have been spoken of
innre narfnershns with some the nrixile1as