Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/618

 § 593.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. § 592. In registering transfers the corporation owes to the Liability of individual shareholders the duty to act carefully, corporation an j if ft fails to exercise proper vigilance it will be iug trans- liable to the shareholder injured. 1 Likewise if the corporation has notice that the nominal holder is an executor or trustee, it will be affected with notice of the terms of his trust and will be liable to the beneficiaries if it permit a wrongful transfer to be entered on its books. 2 But when an executor has unrestricted power to transfer the assets of his estate, a corporation is not bound to see that he is not defraud- ing the estate in making transfers of its stocks. 3 § 593. A corporation is liable to the lawful owner if it transfers shares on a forged order. 4 Thus, a bank which has permitted a transfer of shares to be made on a forged power of attorne} r, may be compelled to issue new certificates to the shareholder to whom the shares belonged, and account to him for dividends paid on Registry of transfers on forged orders. 1 Pennsylvania R. R. Co.'s Appeal, 86 Pa. St. 80; Caulkins v. Gas Light Co., 85 Tenn. 683; Wood house v. Crescent Mut. Ins. Co., 35 La. Ann. 238. Plaintiff need not sue to have the transfer set aside, but may sue the corporation for the value of his stock. lb. See Keppel's Ad mi's v. Petersburg R. R. Co., Chase's Dec. 167; Tel. Co. v. Davenport, 97 U. S. 369; Sewall v. Boston Water Power Co., 4 Allen, 277. 2 Stewart v. Firemen's Ins. Co., 53 Md. 564; Lowry v. Commercial, etc., Bk., Taney's Dec. 310; Webb v. Graniteville Mfg. Co., 11 S. C. 396; Caulkins v. Gas Light Co., 85 Tenn. 683; Magwood v. Railroad Bk., 5 S. C. 379. See Peck v. Providence Gas Co., 17 R. I. 275. Compare Smith v. Railroad, 91 Tenn. 221. A corpora- tion is not liable in damages for re- fusal to transfer stock, standing in name of decedent, where the right of the executors to sell is doubtful, or where they have impeached their 598 right to transfer. Livezey v. Pacific R. R. Co., 157 Pa. St. 75. 3 Crocker v. Old Colony R. R. Co., 137 Mass. 417; Hughes v. Drovers Bank, 86 Md. 418. Compare Peck v. Providence Gas Co., 17 R. I. 275. A corporation cannot require an execu- tor to leave with it certified copies of the will, etc., which he furnishes as proof of his authority. Bird v. Chicago, etc., R. R. Co., 137 Mass. 428. 4 Brisbaue v. Delaware, etc., R. R. Co., 94 N. Y. 204; Midland R'y Co. v. Taylor, 8 H. L. C. 751; Sewall v. Boston Water Power Co., 4 Allen, 276; Pratt v. Taunton Copper Co., 123 Mass. 110; Loring v. Salisbury Mills, 125 Mass. 138; Machinists' Nat. Bk. v. Field, 126 Mass. 345; Pratt v. Boston and Albany B. K. Co., ib. 443; Chicago Edison Co. v. Fay, 164 111. 323; Swan v. North British, etc., Co., 7 H. & N. 603; S. C, on Appeal, 2 H. & C. 175; Kraft County Bank v. Bank, 133 Cal. 64.