Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/801

 CHAP. XV.] LEGAL RELATIONS AMONG SHAREHOLDERS. [§ 795. retain the identical shares pledged, provided he keep on hand a number of similar shares sufficient to answer the pledgor's demand on repayment of the loan. 1 It is held, moreover, that a pledgor of shares is not entitled to an injunction restraining the pledgee, to whose name the shares have been transferred on the books, from voting on them, at least not if the complaint contain only allegations to the effect that the pledgee is voting the shares so as to subserve the interests of another corporation, and that it is greatly against the pledgor's interest to allow the pledgee to vote them. 2 § 795. Certificates of stock, even those bearing on their face such a phrase as " transferable only on the books of „ ,.,. r J Validity the company," are for most purposes negotiable, of assign- By an assignment of the certificate the legal title stock cer- to the stock passes ; 3 and the possession of the cer- tlJlcate - tificate properly indorsed is prima facie evidence of ownership. Consequently, the assignee for value without notice of prior 1 Hubbell v. Drexel, (Cir. Ct. East- ern Dis. of Pa.) 21 Am. Law Reg. N. S. 452; Nourse v. Prime, 4 Johns. Cli. (N. Y.) 490; Allen v. Dykers, 3 Hill (N. Y.), 593; Gilpin v. Howell, 5 Pa. St. 41 ; Neiler v. Kelley, 69 Pa. St. 409; Boylan v. Huguet, 8 Nev. 345; see Otis v. Gardner, 105 111. 436. See Hay ward v. Rogers, 62 Cal. 348; Barclay v. Culver, 30 Hun (X. Y.), 1. Compare Laugton v. Waite, L. R. 6 Eq. 165; Cherry v. Frost, 7 Lea (Tenn.), 1. On payment of the debt a court may specifically enforce the return of the shares when the stock is of uncertain market value and the pledgor cannot buy others. Krouse v. Woodward, 110 Cal. 638. A pledgee of shares that have been transferred on the books of the cor- poration cannot sell them without notice to the pledgor and demand of payment; nor at private sale, for less than market value. Nabi ing v. Bank of Mobile, 58 Ala. 204. And an agreement that pledgee may sell without notice does not permit him to sell without demand of payment. Wilson o. Little, 2 N. Y. 443. An execution cannot be levied on shares of stock pledged by the exe- cution debtor and transferred on the books of the corporation to the pledgee. A purchaser at such exe- cution sale gets no title. Nabring v. Bk. of Mobile, 58 Ala. 204. 2 Mc Henry v. Jewett, 90 New York, 58. The court did not decide who was entitled to vote the shares, but merely that the complaint was bare of facts justifying an injunction. The pledgee in whose name as " trustee " stock stood, was held en- titled to vote in Commonwealth v. Dalzell, 152 Pa. St. 217. See § 578. 3 Leitch u.Wells, 48 N. Y. 585; Thurber v. Crump, 86 Ky. 408. But see Noble v. Turner, 69 Md. 519; Kerr v. Urie, 86 M'd 72. The tender of a certificate prop- erly indorsed is a good tender of shares " transferable on the books of the company. 1 ' Noyes v. Spauld- ing, 27 Vt. 420. 781