The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1856-06-30


must b. answered 10 the negative. 'nsy contain, IL me
frsi place words Of n.xotiahiny They declare SIM
ply that the person named entitled 70 CERTAIN shares OF
stock They 40 not like Negotiable Instruments, run 10
the bearer the order OF the party % whom they
are tiven. They commence. Is true with the words
ape il KNOWN but such words have no tendency 10
show thar they possess the qualities claimed for them
phraseology quite sim lar may be found on bonds ana
other which DO one ever thought 70 be nego
table.
But side from the of any language Of these
certificates which can nipart 10 them negotiable cha
acer both the laws OF the corporation an inc cern
themselves contain special RESTRICTIONS which seem
me- PUT this question at rest do not suppose that
corpor alton without something very extraordinary in
it, charter place such restraints upon the safe d us
stock that the individual holder may not transfer as good
title in equity he himself possesses by any mode OF
assurance good upon general prncpes Oh aw Du. y,
terms of his obligation that IL shall not be negotiable IN
tho commercial or in any sense which can give 70
the purchaser title superior 10 that OF his VENDOR see
no 70 doubt that corporations possess the same
right Have the defendants expressed themselves I'D
these certificates o. stock n,nk ,ney nave; an Ky
face OF the certificates that shares can be transferred only
books and the surrender Of the evidence Of the
previous owners title. If an illustrator were wanting Of
the value Of such restriction IL Is furnished in the pre-
sent case whatever It's value the restraint hwfu
in itself and one which the corporation has an nndouoseo
of stock selling his shares by an outside transfer so
that hs vendee will acquire in equity his own rights Out
say that the holder OF false and fraudulent cefhcate
by nuosipp and delivering il TO another person, can
create title hostile the corporation Itself would be to
deny the restriction any meaning or enect whatever
have examined attentivey the authorities cited upon
the question do not find that the doctrine commended
cr has in them the least support In the case OF hort
rict. VS. the Commercial Bank Of Blfao GO Wend. 81,
H. C. in error :. Wend 34s) it held that an action
assumrst will lie against corporatn III favor OF the
assignee OF a stock certificate for refusing TO permit
,rarsfr on the books This ana the class Of cases TO
whrt belongs, prove that transfer not made accord
ne to charter bylaws OF corporation, conlers mp
ca the tanseree equitable sense the title OF tn,
previous that being thus clothed with the equtl
bic title is the duty OF the corporation - permit him
10 take legal transfer on the looks ana thal the n"
will imply an assumpist for he performance of that duty
Tor breach OF this duty actions OF assumps and case
have been ndinerently mrsssained In prnclr'e the
remedy should Wave been special acton on the case.
such was The OPINION u Chief Justice Nelson in the case
refer t-ht he ads Ill being once settled (that AS.
sumrs Will he) there is no occasion TO- disturbing H.
is only material observe that the assufnpst not IN
the certificate itself and passing by endorsement and
delivery tbs trasferee but implied after the trans
fer from the duty Of the CORPORATION 70 clohe the equa
bic witt the legal title SUCH cases. SO lar from
tenung show that dealer IN certificates acquires rights
better han lbose of the person with whom he deals,
seems TO jus tify quite opposite conclusion. They
niece ssarly that the change OF title IS incomplete
until tue proper transfer is made on the books
IN the case of Fatnan VS.. Lohack Il Duer 35i), no
question involving the rights of the corporation
The decision is directly opposed 10 that OF chancellor
Walworth in Stebbins Phcnix Bank 6 Paige $500,
and nv own impression that il cannot be sustained.
find in it, however nothing which can affect the question
am considering The disposed Of upon princi
pies which not asserted as having any peculiar ap
pcation to dealing in stocks or negotiable securities.
The case ofStoney The American Life Insurance Trust
Company II Paige esq., only held that the negotiable Sc
curty OF corporation appearing on It's face to have been
duly issued was valid in the hands OF bona de holder,
although N fact issued contrary to law. The case OF
Deafued vs. The State of Illinois (2d , 1897, related to
State bonds payable to bearer and strictly negotiable
Such securities are sometimes called stocks but coufu
sion OF terms should not involve principles in obscurity
IN the of Fisher The Morris Canal and Bank
ing Company Is Am. Law Reg, 49, the question was
whether tbelonds OF railroad corporation payable 10
bearer issued for the purpose OF raising money,
with interest coupons annexed also payable bearer
tiabla n n n
for value took them Tree from any equities between the
company and the seller The decision in favor of the
purchaser. and fully concur n the doctrine The dis
tncton between suc security and stock certificate,
which BY its very is not negotiable and which is
security for money at all. 1t seems W me Is too PLAIN
10 escape observation.
These are the on authorities cited in favor Of the doc
trine dcd for 1t quite evident that they have
no tendency in that direction. will mention
which decisivey the other way IN the OF the
Jnaon BANK q Gemyetorcn LAIRD, q Wheaton, 3g0)
the stock transferable pny on the books Of The cor
poraton Tie precise propositions decided were, that no
legal te to shares ccuia be acquired except by trans
fer made according to the requirement, and that the
equitable title Of the tansfcree was subject to all the
rights OF the corporation against his assgnor The same
octrine held by Chancellor Walworth IN StedJis VI
fAt'nr Ere Insurance Company g. age, 800 !,
In the State OF Connecticut there have been series OF
going si urther There the registry the books,
when required by tie charter or BY laws OF corpora
III Is deemed tie originating in the change OF title
tocl and transfer not made i regarded as inef
ectual for any purpose e Gown. 52S; ID Oh; ID,
246 H., 1921 50 rigorous doctrine has not been ol-
lat transfer Of stock not male n the manner pre-,
scrbcd + nevertheless valid TO pass in equity all
tie rights e nc seller but 40 greater See further
fA.C,H prd Ames in Corporation, 352, 353, Sd ed)
Mere IL. ;. de Is stated, and the cases cited.
10, question upon principle, am not aware
ans thiDp The nature OF this kind of property
which requires an application the rules which belong
nraouaue securities stocks not like bank bills,
e Lmcdiate representative Of money, ana intended for
circulation. TIE Cstincton between bank bill and
hare bank stock not difficult 70 appreciate Nor are
they like bills Of exchange less adapted % crcu
aticn, but invented to supply TIE exgences Of com
rerce. and governed by tic peculiar code OF the COM
meroll law They not ike exchequer bills and gov
securities which made negotiable either for
circulation find market. Nor are they ike corpo-
,auon bonds which issued in negotiable form for sale
and for rails ing money for corporate uses.
The iii tncton between oil these and corporate stocks Is
marked and striking. They are all in some form the
representative Of money, and may he satisfied by pay
melt III money a time specified. Certificates Of stock
are rot securities for money in any sense, much less
are they negotiable securities. They are simply the
nuniments and evidence Of the bolders title 70 given
share the property aud franchises OF the corporation OF
which he il a member. The primary use anu design
must be allow 70 say Of this species OF property i TO
aorc steady Investment for capita rather than 10 feed
the spuit q speculation ! am aware that people Will
specUa in stocks they sometimes 40 IN lands, and
there is law which absolutely iorbds II; but such, J
persuaded, the use for which We should hold
them chiefly Intended
The question Z apabe OF some further calculation by
offending the rides which have been settled in regard
the rsnsierabty Of other instruments and the elect
OF transfer certificate Of stock n some respects Ike
bill OF l4dng a warehouse or wharhngers receipt.
Each the representation OF property existing under
tain CONDITIONS ins The docu nentry evidence of title
thereto They all alike transferable ~ Endorsement
delivery and the title 70 t1e property taus represent
passe. by such tran, fer FAR they resemble each
other but there distinctions 70 be noted Bills Of lad
ing and whari gers receipts are commercial IN trnmens,
and their ransiersbilty, ii l. sometimes termed,
their 'qiost negouabhly dtp.has on tne eUs.,in o.
stock commercial nstum nts and the title to the
property they represent equity only BY ndose
men and delivery, where BY any law Or rule Of the cor
the 70 be made on Ilc DOCKS