Court Opinion

ID: 6483879
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:07:33.205724+00
Date Added: 2024-06-11T15:54:15.332957
License: Public Domain

CONCURRING OPINION OP
PREAR, C.J.
There is much difference of opinion as to the proper construction and application of a provision that no transfer of stock shall be valid, except between the parties thereto, until a.new certificate shall have been obtained or the transfer shall have been recorded on the books of the corporation. Some courts make a distinction between a statutory provision of this kind and a similar provision in the charter or by-laws only. Some base a dis-' tinetion upon whether there is also a provision that the stock book of the corporation shall be open to creditors of tbe stockholders or to the public generally or to creditors of the corpora*445tion only. Section 2021 of the Civil Laws does not require that the stock book shall be open to creditors other than those of the corpox*ation. The tendency seexns to be on the whole towards holding that provisions of the kind in question are intended for the benefit of the corporation, its creditors and stockholders and not for the benefit of the public or the cx’editors of the stockholders and that an unrecorded transfer of stock by endorsement and delivery of the certificate is valid as against all but bona fide takex’s for value without notice. Among the various grounds assigned for this view px*obably the most effective is the quasi-negotiable character of stock certificates and the desirability fx’om a commercial standpoint of having the buying and selling of stocks as free and safe as possible.
Whether an attaching creditor would have priority over a transfex’ee in the case of an unrecorded transfer is a question xxpon which there are a good many authorities on each side, some writers contendixxg that the weight of authority and reason is in support of the view that even such creditors would not have such priority. See Cook, Stock and Stockholders, Sec. 486 et seq. But as to general creditors who have not actually acquired any liexx on or interest in the stock thex-e seems to be less question. The qxxestion here is whether an administrator of a decedent’s insolvexxt estate is to be x*egarded as representing the decedexxt or the general creditors and, if the lattex', whether he has priority against a transfer by indorsement and delivery of the certificate by the decedent in his life time not in contexnplatioxx of insolvexxcy to- one who took in good faith and for valxxe. The view that the transfer would hold good in such a case seems to have been practically adopted in this jxxrisdiction ixx the case of Castle & Cooke v. Smith, 7 Haw. 579, where an xxxxx’ecox’ded traxxsfer as a pledge was held valid as against an assignee in bankruptcy of the transferor. If it would be good as against such an assignee it certainly woxxld be good as against an administrator, who woxxld as much as sxxch axx assignee stand ixx the shoes of the decedent and no more than such an assigxxee represent the general creditors, and in the case *446above cited tbe court seems to have expressed a dictum to this effect. See also Smith v. Castle & Cooke, 6 Haw. 697, and a case on another subject but in some degree analogous, Wright v. Brown, 11 Haw. 401. In my opinion the pledgees in these cases have priority over the administrator to the extent of their claims.