Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/615

 CHAP. IX.] CORPORATION AND SHAREHOLDERS. [§ 589. § 588. In a recent New York case a person transferred his shares by delivery of the certificate with a power of attorney, the name of the transferee was entered on the dividend book, and the corporation paid him dividends for four years. The stock was not transferred on the transfer book, but no pro- vision in the constitution or by-laws required it. The court held that the corporation could not recover of the transferrer, having so long recognized the transfer, and, the corporation being insolvent, the receiver stood in no better position. 1 § 589. The constitution or by-laws of the corporation may contain provisions regulating the transfer of shares. If these provisions are not observed, neither the Jenifers, shareholder nor his transferee may take advantage of their non-observance, 2 though on the one hand the corpora- tion may refuse to recognize an irregular transfer, 8 and in most cases of irregular transfers the shareholder will not divest him- self of any liability toward creditors, 4 although liability may National Bank v. Case, 99 U. S. 628; Fouche v. Merchants Nat. B'k, 110 Ga. 827. So the executor of a share- holder may become liable. See Diven v. Duncan, 41 Barb. 520. See §741. 1 Cutting v. Damerel, 88 N. Y. 410. Compare Vale Mills v. Spalding, 62 N. H. 605. 2 Johnson v. Underbill, 52 N. Y. 203; Bank of Utica v. Smalley, 2 Cow. (N. Y.) 770; Quiner v. Marble- head Social Ins. Co., 10 Mass. 476; Parrott v. Byers, 40 Cal. 614; New- berry v. Detroit, etc., M'f'g Co., 17 Mich. 141; Duke v. Cahawba Nav. Co., 10 Ala. 82; Cheltenham, etc., R'y Co. v. Daniel, 2 Eng. R'y Cas. 728. Compare Weston v. Bear River, etc., Water and M'g Co., 5 Cal. 186; S. C, 6 Cal. 425; Naglee v. Pacific Wharf Co., 20 Cal. 529. Holbrook v. Fauquier, etc., Turn- pike Co., 3 Crancb, Cir. Ct. 425; Hall v. Rose Hill Road Co., 70 111. 673; Helm b. Swiggett, 12 Ind. 196; com- pare State v. New Orleans Gas Light, Co., 25 La. Ann. 413; Townsend v. Mclver, 2 S. C. 25. A consent of the board of directors to the transfer of stock must, when made necessary, be evidenced by a recorded resolu- tion of the board. Pittsburgh and Connellsville R. R. Co. v. Clarke. 29 Pa. St. 146; semble contra, Ellison v. Schneider, 25 La. Ann. 435. See, also, regarding the consent of direct- ors to a transfer, Shepherd's Case, L. R. 2 Eq. 564; Slee v. International Bank, 17 L. T. N. S. 425; In re Greshaui Life Assurance Soc. ; Ex parte Penney, L. R. 8 Ch. 446. 4 Shellington v. Howland, 53 N. Y. 371; see § 748. Still it is held in England that if the transferrer has done all in his power to perfect the transfer, he is discharged from his liability as shareholder. Shortridge v. Bosanquet, 16 Beav. 84; Nation's Case, L. R. 3 Eq. 77; Fyfe's Case, L. R. 4 Ch. 768; Ward & Garfit's Case, L. R. 189. But see § 748. Prima facie a person whose name appears on the books of tho corpo- 595