Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/803

 CHAP. XV.] LEGAL RELATIONS AMONG SHAREHOLDERS. [§ 797. vency. 1 But it has been held, where a statute provides that no assignment of stock shall be valid except as between the parties until it is entered on the books of the corporation, that an attachment by the assignor's creditors, levied before such en- try, is valid as against the assignee of the certificate. 2 And, in general, shares of stock are subject to attachment, and an at- taching creditor acquires a lien superior to the claim of a sub- sequent bona fide purchaser for value with no actual notice of the attachment. 3 § 797. The preceding rules protecting the assignee of cer- tificates of stock, are not applicable when the cer- tificate bears on its face a notice that its holder is fi£ C c ^ e c s er " not the absolute owner. Thus, a person lending "m trust." money on a certificate containing the words "in trust," is affected with notice of the trust, and the hypothecation will be invalid as against the cestui} And a similar rule would apply void. Beckwith v. Burrough, 14 R. I. 366. 1 Sibley v. Quinsigamond Nat. Bank, 133 Mass. 515; Blouin v. Li- quidators of Hart, 30 La. Ann. Part I. 714. The equitable interest of a shareholder in his shares will pass by a general assignment in a trust deed for the benefit of creditors, as against an attaching creditor with notice of the assignment, although the cbarter of the corporation pro- vides tbat transfers to be valid must be entered on the books. Black v. Zacharie, 3 How. 483. 2 Application of Murphy, 51 Wis. 519; Fort Madison Lumber Co. v. Batavian B'k, 71 Iowa, 270; Moore v. Opera House Co., 81 Iowa, 45. See, also, Newell v. Williston, 13S Mass. 240; Central National Bank v. Williston, 138 Mass. 244; Fisher v. Essex Bank, 5 Gray, 373; Boyd v. Rockport Steam Cotton Mills, 7 Gray, 406; Blancbard v. Dedham Gaslight Co., 12 Gray, 213; Weston v. Bear River, etc., Water and M'g Co., 5 Cal. 186; Naglee v. Pacific Wharf Co., 20 Cal. 529; Conway v. John, 14 Col. 30. But compare Weston v. Bear River M'g Co., 6 Cal. 425; Thurber V. Crump, 86 Ky. 408; Lippitt v. Paper Co., 15 R. I. 141. 3 Chesapeake and Ohio R. R. Co. v. Paine, 29 Gratt. ( Va. ) 502 ; Shen- andoah Valley R. R. Co. v. Griffith, 76 Va. 913. But see Armour Bros. v. Nat. B'k, 113 Mo. 12. So the in- terest of a shareholder in the prop- erty of a corporation, represented by shares of stock, may be reached by garnishee process served on the cor- poration. The corporation may be the attaching creditor and garnishee itself. Norton v. Norton, 43 O. St. 509 (a case construing statutes). The state in which a corporation is char- tered is the situs of shares of stock for the purpose of determining con- flicting claims to ownership. Jelle- nik v. Huron Copper Mining Co., 177 U. S. 1. 4 Shaw v. Spencer, 100 Mass. 382; Loring v. Brodie, 134 Mass. 453; Budd v. Monroe, 18 Hun, 316; Gas- ton v. American Exchange Nat. B'k, 783