The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-05-23
LEGAL INTELLIGENCE.

the mercantile community, involving as 1t does, the
question OF the night Of bans other corpora ION
to demand evidence OF authority in a trustee to make
transfer OF stock. The opinion of the Court, deiv
ereo by Judge 3 rong, is as follows;-
Bdydrd DS TIE TURNER'S and Mechanics Bank Of
6htiddelBhid
STRONG, j. J.-Passing by the question whether the
defondants, being meie agents OF the Common
wealth, are liable to damages at the suit of the
pla ntif even for wrongful refusal to permit him
inquiry whether their refusal was wrongful. Ger.
talnly they were un0er no ob1gatiOn to permit a
transfer, II their permission would have exposed
hem or their principals to a successful Claim by
any one tor the replacement of the stock or for ITS
value; In certain sense they were custodian. OF
the rights OF stocko wners. With them was the
registry and transfers could be made only with
their consent, by the surrender OF the certificates
and the issue of new ones to the transferee A pur
chaser ot stock does not receive the certificate of
his vendor, but q new one made out IN his own
name, and recltIng nothing conaned in the
former. lie is therefore protected IN the enjoy.
ment of 8 purchase, even though tnere was no
right TO make the transfer to him. For this reason
owner OF stock, for which not only the person VINO
makes 1t, but any one knowingly assisting IN the
wrong, is responsible. That bank or other corpo-
ration, and also these defendants, are trustees to
certain extent for stockholders that is for the pro-
tection Of individual interests, cannot be denied
They are alike trustees OF the property and of the
title OF each owner Tney have IN their ReenIng th
primary evidence OF title, and they justly held
10 proper diligence and care iu its preservation.
mand evidence OF authority 10 make q transfer,
before they permit 1t to be made Their own safety
requires that they be satisfied OF the light OF tnY
person proposing to MAKE O transfer 10 do what he
proposes. Generally, sufficient evidence of sLcn
right is found IN the possession OF eka title to the
stock 1eL IL IS well seted that is not in all cases,
sufficient. Notwithstanding that, the true equitable
ownership may be in some other than the holder or
the leVal right and transfer may be a gross wrong
to such an equitable owner 70 that wrong the
corporation, or keepers of the registry, make them
selves parties, H. with knowledge that there no
done.
And in equity whatever puts party upon inquiry
is notice OF what inquiry must reveal Inc real diff
nculty is in determining how far 1t is the duty OF
the transfer agent to inquire. The law casts the
legal ownership of personal properly OF deceased
lntpstato upon his administrators. They are some
times said to be trustees, but they such for ad
mnistraon. Their primary duty always IS to dis.
pose of the personal property, and Herewith pay
the debts OF the intestate, and make distribution
among his next of kin sale and transfer OF stocks
by them therefore IN he line of their duty. There
IS no ce tut que trust having right to interfere and
prevent such q transfer. Hence letters of admins
traton are always sufficient evidence OF authority.
trustee OF an insolvent debtor would seem to
stand on the same footing. And so generally does
an executor. HIS primary duty IS administration.
He IS to pay debts and egacles out of the personal
estate and use even specific legaces to pay debts il
necessary. His letters testamentary therefore show
apparent right to dispose OF the stocks of the tes
tator Even If the stock has been bequeathed specld
caly, transfer agent has no means OF ascertaning
whether 1t s neeoed to pay debls. He can inquire
only OF the executor, the very person who proposes
to make the transfer Ii he inquire of the specific
legatee he can learn nothing tor the legaee may be
ignorant, and to require evidence OF authority be-
yond the letters testament ry might greatly delay
and embarrass the executor III the discharge of his
duties II has therefore generally been held that
transfer agents may safely permit transfer of stock
by an executor, without looking for his authority
beyond his letters. Such was the ruling IN Hartga
VS.. The Bank of England, Vesey, 55; Bank of Eng
Iana @ VS. saa darsSns Veey, o5S; same vs. same 10
Fowler VS.. Churchill & Churchill VS.. The Bank, IL
Meeson and Wes6y, 323 and sank VS. Franklin,
Russell, Cha: 675. Similar decisions have been
made in this country, aud so far t4e law Is un.
doubted
Yet even in cases in which executors have at
tempted to make transfers OF stock, public loan,
TRANSFER agents (meaning thereby the corporation
in which the stock is held) have sometimes been re-
qured TO make inquiry into the right of the
yond the will itself In Lowry vs.. The Commercial
and Farmers Bank of Baltimore decided by Chief
Stltes for the Maryland District, and reported in
american LdO journal, N S., volume 8,
page Ill, it was ruled that when bank stock
had been bequeahed to an executor in trust to pay
the DIVIDENDS to certain persons, and the executor
had transferred it to who made advances there
on for the use of the executor, the bank which had
issued the certificate having notice that the stock
belonged originally to the tesator was bound to
look at the title OF the executor under the will be-
fore it consented to the transfer. In that case the
Trans er was made by the executor. 40 such, and
there was no proof of any actual notice to the
bank that the stock had been specifically bequeathed
and that the executor was violating his trust by
making the transfer. Yet the Chief Justice held that
the bank was bound to take notice of the will when
the transfer was proposed by of the executors;
that 1t was negligence IN the bank not to examine
it, and that II was Ignorant OF its contents, and
of the specific bequest of the stock it was its own
fau Il that must be dealt with as If had possessed
actual knowledge that the stock in question was
specifically bequeathed by the testator and not
by the will, to be transferred He then proceeded
to show that while 1t might have been sold If neces-
saIy fOr thenpavment OF debts there was enough to
indicate to the bank that 1t was not needed for
such use. The bank was, therefore, held liable,
party to the fraud of the executor. 1t held
responsible for not prev ventng the executor, who
had the legal right, from making the transfer
But were it conceded that in no case is an eXecu-
tor Offering 10 make transfer of stock issued to hs
testator obligation 10 exhoit any other autho.
rltY than his letters testamentarY it"would by no
means follow that this plaintiff had IilhG to de.
mand of the defendants an allowance of his pro-
posed transfer without furnishing for theIr inspec.
ton more than his certificates. He was not an exc
cutor, but trustee The certificates held by HIM
haa Deen iss9eu IN tne name OF lhQnas =. bavard'
peared that though the legal right was IN him, ne
was not the owner. The person TO be affected by
the transfer was not himself but Mary GIlpn
There is marked difference between the powers of
an administrator or executor, and those otan or d-
nary trustee. The common duty of the latter is not
ADMINISTRATION or sale, but custody and manage.
ment No purchaser, either of land or persO lalty,
would be sale in buying from known trustee.
trust. 1t Is true trustee NAV have power to sell,
but the power not a necessary incident to his
trust, as IT is TO the office OF an executor lie may
have the LEGAL title, and yet have no authority to
sell HIS sale may be entirely unauthorized by the
instrument that created the trust; 1t may have been
forbidden. Why, tntn, does not bank, or
ung him to make a transfer? If, in truth,
he has no such power, the bank, by
accepting his certificates, and issuing others
In lieu thereof to his transiereCs is assisting
destroy the rights of the ceslui que trust 1t
has ever been held that rporaton is liable II 1T
permit a transfer by lunatic no ding legal right,
thu ugh 1t hao no knowledge of the lunacy, and vas
guilty of no actual fau Chew & GOldshOrouEh
VS. the Bank of Baltimore, IL Maryland, 299 TIE
reason gwen was that 1t might have provided against
the transfer by precaution. lfthus Liable when only
the innocent cause OF loss mucn more is the lia
brity certain when tine transfer Is permitted with