Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/616

[§ 500. THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. attach to his transferee. 1 If, however, the corporation, or those of its officers who have charge of the transfers of shares, recognize a transfer made in good faith, though irregularly, the corporation raa} r be estopped from denying its validity. 2 And if the corporation, on the demand of a transferee of shares, refuses without legal reason, i. e., wrongfully, to reg- ister a transfer, it will be deemed to have waived the require- ment that transfers shall be registered, and the transferee, as against the corporation, will have the full rights of a share- holder. 3 § 590. The following is from the opinion of the New York Court of Appeals by Judge Davis in New York and New Haven R. R. Co. v. Schuyler : 4 " Where the stock of a corpora- tion is by the terms of its charter or by-laws transferable only on its books, the purchaser who receives a certificate with power of attorney, gets the entire title, legal and equitable, as between himself and his seller, with all the rights the latter possessed ; but as between himself and the corporation he ac- quires only an equitable title which they are bound to recog- nize and permit to be ripened into a legal title, when he presents himself, before any effective transfer on the books has been made, to do the acts required by the charter or by-laws in order to make a transfer. 5 Until those acts be done he is not a stock- holder, and has no claim to act as such, but possesses as between himself and the corporation, by virtue of the certificate and power, the right to make himself, or whomsoever he chooses, a stockholder by the prescribed transfer. The stock not having passed by the delivery of the certificate and power of attorney, the legal title remains in the seller, so far as affects the com- pany and subsequent bona fide purchasers who take by transfers duly made on the books. And hence a buyer in good faith of ration is a shareholder as to it and as to the public. State v. Ferris, 42 Conn. o60; Holyoke Bank v. Hurn- ham, 11 Cash. 183; Skowhegan Bank v. Cutler, 49 Me. 315; Matter of Empire City Bank, 18 N. Y. 200; Stanley v. Stanley, 26 Me. 191 ; Wm rail b. Judson, 5 Barb. 210. 1 Upton o. Burnham, 3 Biss. 431; Straffon's ExVs Case, 1 De C, M. & 596 G. 576; Cheltenham, etc., R'y Co. v. Daniel, 2 Eng. R'y Cas. 728. 2 Isham v. Buckingham, 49 N. Y. 216; Bargate v. Shortridge, 5 H. L. C. 297 ; Scripture v. Francestown Soapstone Co., 50 X. H. 571. 3 Robinson v. National Bank, 95 N. Y. 637. « 34 N. Y. 30, 80. 6 Townsend v. Mclver, 2 S. C. 25.