Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/802

 § 796.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XV. 796. As against assignor's creditors. equities, obtains a title superior to them ; and if the rightful owner has invested another with the usual evidence of title or with apparent authority to dispose of the shares, he will be estopped from disputing the rights of an innocent purchaser. 1 And the doctrine of the implied notice of lis pendens has no application to certificates of stock which pass from hand to hand like negotiable instruments. 2 But a bona fide purchaser of a stolen certificate acquires no title as against the true owner. 3 Likewise, although it be provided that all transfers of shares shall be recorded on the books of the cor- poration, and the certificates state that shares are transferable only in that manner, a bona fide sale of the shares, or an assignment of them as collateral security, accompanied by a delivery of the certificates with a power of attorney, is valid as against the attaching creditors of the vendor or assignor, 4 and also as against his assignee in insol- v. Ives, 31 Conn. 25; Beckwith v. Bur- rough, 13 R. I. 294; Merchants' Nat. Bk. v'. Richards, 6 Mo. App. 454; S. C, aff'd, 74 Mo. 77; Newberry v. Detroit, etc., Iron Mfg. Co., 17 Mich. 141; Sargent v. Essex Marine Ry. Co., 9 Pick. 202; Lund v. Mill. Co., 50 Minn. 36; Weber v. Bullock, 19 Col. 214; Kern v. Day, 45 La. Ann. 71. See Sargent v. Franklin Ins. Co., 8 Pick. 90; Clark v. German Security Bk., 61 Miss. 611; Seeligson v. Brown, 61 Tex. 114. But compare State Ins. Co. o. Sax, 2 Tenn. Ch. 507; Cates r. Baxter, 97 Tenn. 443. Contra, But- trick v. Nashua, etc., R. R. Co., 62 N. H. 413. But such an assignment of the certificates would not hold as against a bona fide purchaser who is not an execution creditor of the assignor, at sheriff's sale under an execution. Farmers' Nat. Bk. v. Wilson, 58 Cal. 600. Compare New- berry v. Detroit, etc., Iron Mfg. Co., 17 Mich. 141 ; Weston v. Bear Eiver M'g Co., 6 Cal. 425. See §589. But transfers of shares made with intent to hinder and defraud creditors are 1 Walker v. Detroit R'y Co., 47 Mich. 338; McNeil v. Tenth Nat. B'k, 46 N. Y. 325; Cherry v. Frost, 7 Lea (Tenn.), 1; Dovey's Appeal, 97 Pa. St. 153; Gass v. Hampton, 16 Nev. 185; Stinson v. Thornton, 56 Ga. 377; Otis v. Gardner, 105 111. 436. See Winter v. Belmont M'g Co., 53 Cal. 428; Caulkius v. Gas- light Co., 85 Tenn. 683; Gilbert v. Erie B'ld'g Ass'n, 184 Pa. St. 554; National Trust Co. v. Gray, 12 D. C. App. Cas. 276. Unless circumstances exist to put the purchaser on inquiry. Ryman v. Gerlach, 153 Pa. St. 197. 2 Leitch v. Wells, 48 N. Y. 585; Holbrook v. New Jersey Zinc Co., 57 N. Y. 616. 8 Barstow v. Savage M'g Co., 64 Cal. 388; East Birmingham Land Co. v. Dennis, 85 Ala. 565; Swim v. Wilson, 90 Cal. 126. 4 Scott v. Pequonnock Nat. Bank, 15 Fed. Rep. 494; Smith v. Crescent City Live Stock, etc., Co., 30 La. Ann. Part II. 1378; Cornick v. Richards, 3 Lea (Tenn.), 1; Broadway Bk. v. McElrath, 13 N. J. Eq. 24; Colt 782