Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/617

CHAP. IX.] CORPORATION AND SHAREHOLDERS. [§ 591- a person in whose name the stock stands on the books, who takes a transfer in conformity to the charter or by-laws, per- mitted to be made by the authorized officer of the corporation, becomes vested with a complete title to the stock, and cuts off all the rights and equities of the holder of the certificate to the stock itself. AVhat other rights and equities he may possess is another question, but if the transferee has taken in good faith, and for value, the stock is gone beyond his reach, and beyond recall by the corporation." § 591. The case from which the above citation is taken decided that a corporation is liable in damages to the bona fide holder of certificates of shares issued by the proper corporate officers in due form, but fraud- ulently and in excess of the amount of capital stock authorized by its charter. 1 Liability of corporation for exces- sive issues. 1 New York and N. H. R. R. Co. v. Schuyler, 34 N. Y. 30 ; accord, Willis v. Fry, 13 Phila. (Pa.) 33; Titus v. Great Western Turnpike Road, 5 Lans. (N. Y. ) 251. See, also, Allen v. South Boston R. R., 150 Mass. 200; First Ave. Land Co. v. Parker, 111 Wis. 1. Compare Wright's Appeal, 99 Pa. St. 425. See § 598. But a corporation cannot be com- pelled to transfer stock issued in contravention to the act of incorpo- ration. People v. Sterling Mfg. Co., 82 111. 457. A corporation is liable to a bona fide holder for value of a stock certificate on which the name of the president was forged by a per- son who was the secretary, treasurer, and transfer agent of the corpora- tion, having charge of its books re- lating to the issue and transfer of stock. The said person had also countersigned the certificate as treas- urer and transfer agent, and the cer- tificate seemed regular. The holder had made inquiry at defendant's of- fice, and was told by the person in charge (the forger) that the certifi- cate was good. Fifth Av. Bk. v. Forty-Second St. R. R. Co., 137 N. Y. 231. See Jarvis v. Manhattan Beach Co., 148 N. Y. 652. But the same court held that a cor- poration is not liable when its presi- dent signs as transfer agent, and dates the certificate at a time in the past when he was transfer agent; it was forgery. Manhattan Life Ins. Co. d. Forty -Second St. R. R. Co., 139 N. Y. 146. See, also, Hill v. Jewett Pub. Co., 154 Mass. 172. A corporation is not liable to an inno- cent purchaser for reissue of surren- dered stock certificates by manager who has no authority to issue certi- ficates for any purpose, and who has not been invested with apparent au- thority or indicia of ownership by the corporation. Knox v. Eden Musee, 148 N. Y. 441. The fact that in this instance a by-law requiring immediate cancellation of surren- dered certificates was not observed, does not make the company liable. lb. 597