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THE GREEN BAG

CURRENT LEGAL ARTICLES This department represents a selection of the most important leading articles in all the English and American legal periodicals of the preceding month. The space devoted to a summary does not always represent the relative importance of the article, for essays of the most permanent value are usually so condensed in style that further abbre viation is impracticable.

AGENCY (Estoppel)

IN the May Columbia Law Review (V. v, p. 354) John S. Ewart, in an article entitled, "Agency by Estoppel," replies to an article under the same title by Walter W. Cook in the January Columbia Law Review, reviewed in our February number. He especially criti cises Mr. Cook's proposition "that it is funda mental in the law of contracts that a person is bound, not by his real, but by his mani fested intention," contending that intentions manifested or otherwise are of no consequence in contract. He analyzes Professor Cook's article point by point, and endeavors to show that his theory that manifested as opposed to concealed intention is the test of liability is only another phraseology for misrepresenta tion of fact giving rise to an estoppel. In conclusion he says that " Professor Cook's error seems to lie in forcing a very peculiar meaning out of a very common assertion for the pur pose of applying to it a very erroneous notion of the importance of intention in the law of contracts." ASSOCIATIONS (Transfer of Shares. Corporations) PROF. GEORGE WHARTON PEPPER'S valuable paper on "The Transfer of Interests in Asso ciations" is concluded in the April American Law Register (V. lui, p. 240). In the former paper (V. lii, p. 737), the transfer of a partner's interest was considered and the discussion of the transfer of shares made transferable by statute was begun. It was suggested that a transferable share in the common stock is property of such a kind that legal title to it passes only by transfer upon the books of the company. Delivery of the certificate, with an assignment and power of attorney duly executed, confers upon the holder an equitable right to effectuate a transfer and, upon sur render of the old certificate, to compel the issue of a new certificate to him. As the cer tificate is evidence of ownership of property,

it is not regarded as a negotiable instrument. By putting it within the power of the holder of the certificate to induce belief that he has a right to the shares, the registered owner may estop himself from setting up the legal title. In the present paper is discussed the liability of the corporation for falsely or mistakenly certifying that the person named in the cer tificate is the owner of a share, and also its liability in case transfer is permitted without the surrender of the old certificate. "Where A gives value on the faith of the representation by the corporation it seems clear that the corporation should be liable to A and should be compellable to issue stock to him or to respond in damages. The corpora tion is estopped from disputing the facts upon which A relied. Wherever specific relief can be given, the plaintiff would seem to be en titled to it. It often happens, however, that specific performance is impossible because the full amount of authorized stock is outstanding, in which case the plaintiff can obtain nothing but damages." Authorities are in conflict as to the right of a purchaser of shares who accepts a trans fer when the old certificate is not surrendered; but the author favors the New York rule, which puts him in the position of one to whom an original fraudulent issue is made and al lows recovery against the corporation which did not compel the transferor to surrender his old certificate. As between a purchaser from a defrauding trustee and his beneficiary, commercial con venience seems to require that the equity of the holder of the certificate prevail. " The English decisions on this point are, therefore, consistent only with the view that the legal title passes by transfer on the books. The Ameriean decisions have been influenced by the conception that title passes with the cer tificate; but they are consistent with the other view, provided it is supplemented by the the ory that the equity of the certificate-holder