Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/614

 § 587.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. Liability of trans- feree. A transfer to an infant does not divest the transferrer of his liability ; ' nor a transfer to the company or to its directors on its account, 2 or to a mere nominee of the directors. 3 § 587. The transferee (on the books of the corporation) of shares that are not fully paid up is liable for calls made for the unpaid portion during his ownership. 4 A person becomes legally entitled to shares by hav- ing them transferred to him on the books of the corporation ; a certificate being but evidence. 5 It is also held that an assign- ment and delivery of the stock certificate will pass the legal title to shares transferable only on the books of the company, though there be no such transfer. 6 And a transferee of shares, who procures a transfer to be made to himself on the books of the corporation, is liable to the assignee in bankruptcy of the corporation, for the unpaid balance on the shares, although he merely holds them as collateral security for the debt of his transferrer. 7 Case, 2DeG., F. & J. 302; Payne's Case, L. R. 9 Eq. 223; In re Bank of Hindustan, Ex parte Kintrea, L. K. 5 Ch. 95; Gilbert's Case, ib. 559. JSymon's Case, L. R. 5 Ch. 298; Weston's Case, ib. 614; Costello's Case, L. R. 8 Eq. 504. 2 Richmond's Ex'rs' Case, 3 De G. & Srn. 96; In re Newcastle, etc., Ins. Co., Ex parte Henderson, 19 Beav. 107; Daniell's Case, 22 Beav. 43. In America, however, unless the cor- poration were insolvent, a transfer to it would be valid for most pur- poses. See §§ 134, 135. 747. 8 Eyre's Case, 31 Beav. 177. 4 Webster o. Upton, 91 U. S. 65; Hartford and N. H. R. R. Co. v, Boorman, 12 Conn. 530; Bend v. Susquehanna Bridge Co., 6 Har. & J. (Md.) 128; Hall v. United States Ins. Co., 5 Gill (Md.), 484; Merri- mac M'g Co. v. Bagley, 14 Mich. 501; Hnddersfield Canal Co. v. Buckley, 7 T. R. 36; Cowles v. Cromwell, 25 Barb. 413; Fouche v. Merchants Nat. B'k, 110 Ga. 827; 594 Efird v. Piedmont, etc., Land Co., 55 S. C. 78. A contrary doctrine seems to pre- vail in Pennsylvania. Pittsburgh, etc., Coal Co. v. Otterson, 4 Weekly Notes of Cases, 545; Frank's Oil Co. v. McCleary, 63 Pa. St. 317; Palmer v. Ridge M'g Co., 34 Pa. St. 288; Canal Co. v. Sansom, 1 Binney, 70, 75. See Messersmith d. Sharon S'v'gs Bk., 96 Pa. St, 440; Finletter v. Ap- pelton, 195 Pa. St. 349. Compare Pittsburgh and Connellsville R. R. Co. v. Clarke, 29 Pa. St. 146; Graff v. Pittsburgh and Steubenville R. R. Co., 31 Pa. St. 489. 5 Hawley v. Upton, 102 U. S. 314; Agricultural Bank v. Burr, 24 Me. 256. See Agricultural Bank v. Wil- son, ib. 273; First Nat. Bk. v. Gif- ford, 47 Iowa, 575, 583; Russell, Rec'r, v. Easterbrook, 71 Conn. 50. 6 Leitch v. Wells, 48 N. Y. 585; Robinson v. National Bank, 95 N. Y. 637; Ashton v. Zeila Mining Co., 134 Cal. 408. 7 Pullman v. Upton, 96 U. S. 328;