Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/620

 § 596.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. the sheriff as the debtor's property, and a court of last resort, after a fair contest by the corporation, orders the stock to be transferred to the purchaser under the sheriff's sale, the corpo- ration is not liable to the holder of the certificate who took no steps to protect himself. 1 Again, if the plaintiff is the equita- ble owner of shares standing in the name of another who claims to be the absolute owner of them, the plaintiff cannot recover their value from the corporation on its refusal to issue certificates to him. Under such circumstances the corporation is not bound to take on itself the peril of issuing the certifi- cates, and thus deciding between rival claimants. 2 In a suit against a corporation by a person who claims to be the owner of stock standing in the name of another, and alleged to have been illegally transferred on the books of the company, the demand, if for damages, must be based on allegations of wrong- ful acts on the part of the corporation ; and if the demand is for the recovery of the stock itself, the person to whom it has been transferred is a necessary party. 3 § 596. Accordingly, a corporation may maintain a bill of interpleader against two opposing claimants of a pleader. dividend due on shares of its capital stock origi- nally held in trust for one of them by a third person who had fraudulently transferred them to the other through mesne conveyances. Upon such bill the court may determine which claimant is entitled to the dividend, but not whether the corpdration is liable to the one defrauded, for permitting the transfer to be made. 4 A corporation cannot, however, sustain Strange v. H. and T. C. R. R. Co., 53 Tex. 162 ; Tafft v. Pifesidio, etc., R. R. Co., 84 Cal. 131 ; Supply Ditch Co. v. Elliot, 10 Col. 327. See Baker v. Wasson, ib. 150 ; Cusliman v. Thayer M'f'g Co., 76 N. Y. 365 ; Joslyn v. Distilling Co., 44 Minn. 183. 6 See Williams v. Mechanics' Bank, 5 Blatchf. 59 ; Smith v. Railroad, 01 Tenn. 221. Compare Dickinson v. Central National Bank, 129 Mass. 279. 1 Friedlander v. Slaughter House Co., 31 La. Ann. 523. 600 2 National Bank v. Lake Shore, etc., R. R. Co., 21 Ohio St. 221. Compare Baker "v. Marshall, 15 Minn. 177. A judgment decreeing against a corporation that the plaintiff is the owner of stock evidenced by a lost certificate, should provide for indem- nity from the plaintiff to the corpo- ration. Galveston City Co. v. Sibley, 56 Tex. 269. 3 Reid v. Commercial Ins. Co., 32 La. Ann. 546. 4 Salisbury Mills v. Townsend, 109 Mass. 115.