Page:North Dakota Reports (vol. 1).pdf/476

 ranted refusal to make the transfer, and he may, by a resort to a court of equity, compel his transferrer to give him a proxy after he has been unjustifiably deprived of his right to have his name entered upon the books of the corporation as a stockholder. Moreover, he can always insist on a transfer as a condition precedent to his purchase or loan on the security of the stock. Business prudence would prompt this caution.

In cases where the corporation has a lien on the shares of its stockholders, the purchaser, without a transfer on the books, takes subject to the lien, and the corporation may refuse to record the transfer until the lien is discharged. 1 Mor. Priv. Corp. § 203. By insisting upon a transfer upon the books before he pays his money, the purchaser will secure his stock free from such lien, as the act of the corporation in making such transfer would be a waiver of the lien. Id.°§ 208; National Bank v. Watsontown Bank, 105 U. S. 217. In Helm v. Swiggett, 12 Ind. 194, it was held that a corporation, whose charter gave it a lien upon the stock of a stockholder for a debt owing to the corporation, had no lien for a debt of the assignee of stock on stock assigned, but not transferred on the books, the court saying: “Ownership simply of a certificate of stock in the bank did not constitute the owner of it a stockholder. It required a transfer of the stock to him upon the books of the bank.” Referring to the provision requiring a transfer upon the books, Mr. Morawetz says: “It follows, therefore, that a transfer upon the books is essential to a novation of the contract of membership, where. there is a provision of this description. An assignment of shares, although valid as between assignor and assignee, would not effect their legal relationship to the company until after a transfer was entered upon the books,” etc.- Volume 1, § 170. Under our statute no person can claim to be a stockholder, in his dealings with the corporation, until his name appears in some way as stockholder on the corporate books; and as the statute requires a person to be a stockholder, not stock-owner, to ‘entitle him to be a director, we are clear that Spaulding was not eligible to that office. ‘The directors of a corporation are generally required to be shareholders by express provisions of the