Page:Federal Reporter, 1st Series, Volume 1.djvu/286

278 FEDERAL RErOETEB. �has iurisdietion of the case to grant other equitable relief prayed it could also entertain a claim for damages on account of a refusai to make the proper transfer. This disposes of the preliminary motion to dismiss the bill. �It appears from the afSdavits read that complainants, being the owners of a flouring mill in the village of Wells, Minnesota, sold it to the defendants Eaton, Thombs, Barnes, Southwiek and Steveus, who organized, iinder the laws of the state of M'niesota, the corporation called "The Wells Flour- ing Mill Co." They paid a part of the purchase priee and gave notes for the balance, pledging, as 'collateral security for payment, shares of stock, viz. : Twenty-five shares owned by Eaton, 20 shares owned by Southwiek, 15 shares owned by Stevens, and 9 shares owned by Barnes, were assigned and pledged to L. A. Becher ; and 40 shares, owned by Thombs, were assigned and pledged to E. G. Becher. The Southwiek shares, by the terms of the' pledge, became absolutely the property of L. A. Becher on failure to pay bis obligations. �It is objected that these affidavits should not be received to vary or change the absolute assignment of the shares expressed in writing on the certificates. Whatever the rule may be, as between the assignors and assignees, I think the corporation can show the true character of the contract of assignment, and thus determine the relation of these assignees of stock certificates. If the shares of stock are merely pledged by the assignment of the certificates, the holders would not be entitled to the rights, nor subject to the liabili- ties, of the owners of shares; they could only become owners by a sale and purchase of the stock pledged, on failure of the pledgors to pay the debt. �The pledgees holding the certificates, and tho corporation having notice thereof, it will be liable for any transfer upon the books of the company, of the pledged stock, without their consent. The bill charges that the defendants propose ta increase the indebtedness of the company wrongf'iUy and unnecessarily, but the opposing affidavits controvert this allegation. �It is clear that the stockholders bave a right to increase ��� �