CHAP XV.] LEGAL RELATIONS AMONG SHAREHOLDERS. [§ 789. management, may be upheld so long as the interests of the other shareholders are not fraudulently or unfairly sacrificed ; and even then will not be set aside at the instance of the parties to them, but only on complaint of some innocent shareholder whose interests are injured. 1 § 789. Coming now to the second class of legal relations between shareholders, it may be remarked that many Relations of the rules regulating the sale of personal property between transferrer apply to the relations between the transferrer and and trans- transferee of shares. 2 The transferee of a certificate of stock occupies the position of the assignee of a chose in action which for most purposes is negotiable. 3 A reciprocal agreement to transfer and accept a transfer of shares is not a nudum pactum / but the mutual promises constitute good con- siderations for each other : and this, although nothing has been paid on the shares. 4 shareholders may purchase the same to benefit adjoining property held by them. This is no fraud on the other shareholders. Pewabic Min- ing Co. v. Mason, 145 U. S. 349. i Faulds v. Yates, 57 111. 416. See Smith v. San Fran., etc., Ry. Co., 115 Cal. 584; Mobile & O. R. R. Co. v. Nicholas, 98 Ala. 92. Compare Foil's Appeal, 91 Pa. St. 434; Riggs v. Railway Co., 191 Pa. St. 298; Bright- man v. Bates, 175 Mass. 105; post, § 790. Compare Moses v. Scott, 84 Ala. 608 ; Chapman v. Bates, 60 N. J. Eq. 9; Clowes v. Miller, 60 N. J. Eq. 179. But see Woodruff v. Went- worth, 133 Mass. 309; Guernsay v. Cook, 120 Mass. 501 ; Harris v. Scott, 67 N. H. 437; § 577 note, and §§ 559a, 5596. The agreement was held in- valid in Harvey v. Imp. Co., 118 N. C. 693. Equity will not specifically en- force such agreements. Gage v. Fisher, 5 North Dakota, 297. 2 A person may sue another for the conversion of shares of stock. Kuhn r. McAllister, 1 Utah, 273; Nabring v. Bank of Mobile, 58 Ala. 204. Com- pare Reid v. Commer'l Ins. Co., 32 La. Ann. 546. In England a contract for the sale of shares is held not to be a contract for the sale of soods, wares, or merchandise, within the statute of frauds. Duncuft v. Al- brecht, 12 Simons, 189. But in Amer- ica the reverse is the law. Tisdale v. Harris, 20 Pick. (Mass.) 9; Baltzen v. Nicolay, 53 N. Y. 467; North v. Forest, 15 Conn. 400; Pray v. Mit- chell, 60 Me. 430; Colvin v. Williams, 3H. & J. (Md.) 38. 3 Stock may, however, be held by a valid title without a certificate, which is but uidicia of title, and the right to the stock is in the nature of a non-negotiable chose in action. Accordingly, stock certificates issued by order of a Confederate court, after confiscation of the shares of " alien enemies," are void, and no better in the hands of a transferee than in those of the original holder, as against the rightful owner of the stock. Dewing v. Perdicaries, 96 U. S. 193.
- Cheale v. Kenward, 3 De G. & J.
27. A memorandum of a contract to purchase shares signed by the 777
