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any registration on the books of the company, is sufficient; and parol evidence is admissible to show that an assignment of stock absolute upon its face was in fact a pledge.

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1 Huntington v. Mather, 2 Barb. 538.

2 Such as: Wilson v. Little, 2 N. Y. 443; 51 Am. Dec. 307; Huntington v. Mather, 2 Barb. 533; Hasbrouck v. Vandervoort, 4 Sand. 74; Williamson V. New Jersey etc. R. R. Co. 26 N. J. Eq. 398.

3 Mechanics' etc. Association v. Conover, 14 N. J. Eq. 219; Cook on Stock & Stockh. § 464; Wood's Railway Law, § 99.

4 Spaulding v. Paine, 81 Ky. 416.

5 Tregear v. Etiwanda Water Co. (1388) 76 Cal. 537.

6 Merchants' National Bank v. Hall, 83 N. Y. 338; Newton v. Fay, 92 Mass. 505; Dayton National Bank v. Merchants' National Bank, 37 Ohio St. 208, where it is said that "nothing is better settled."

7 Burgess v. Seligman, 107 U. S. 20; Brick v. Brick, 98 U. S. 514; Continental National Bank v. Eliot National Bank, 12 Fed. Rep. 35; New Orleans National Banking Association v. Wiltz, 10 Fed. Rep. 330; Wilson v. Little, 2 N. Y. 443; McMahon v. Macy, 51 N. Y. 155; Van Blarcom v. Broadway Bank, 9 Bosw. 532; Cornick v. Richards, 3 Lea, 1; Merchants' National Bank v. Richards, 74 Mo. 77; Pitot v. Johnson, 33 La. An. 1286; Blouin v. Liquidators, 30 La. An. 714; Newton v. Fay, 92 Mass. 505; Pinkerton v. Railroad Co. 42 N, H. 424; Mount Holly etc. Co. v. Ferree, 17 N. J. Eq. 117; Broadway Bank v. McElrath, 13 N. J. Eq. 24; Finney's Appeal, 59 Pa. St. 398; Ginz v. Stumph. 73 Ind. 209; Baldwin v. Canfield, 26 Minn. 43. 8 Newton v. Fay, 10 Allen, 505.

§ 335. The rights, duties and liabilities of a pledgee of stock.-A pledgee of certificates of stock is protected against a sale or further pledge of the same stock by the pledgor, in the same manner that a purchaser of stock certificates is protected against another sale by his vendor; in either case the rights of the holder of the certificate being superior to a transferee without the certificate.1 Where the pledgee has not been registered, and an execution has been levied upon the stock by a judgment creditor of his pledgor, a person purchasing at the sheriff's sale, having knowledge of the fact that the stock had been hypothecated, will take subject to the rights of the pledgee. In the

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absence of an express agreement to the contrary the pledgee may have the stock registered in his own name,3 or in the name of some other person.* A person to whom shares of corporate stock are assigned as collateral security for a debt, the transfer being duly made on the books of the company, becomes a shareholder, and is entitled to all the rights consequent thereupon. A registered pledgee of stock may vote upon the stock held by him as collateral security; but he cannot vote upon the stock contrary to the wishes and interests of the pledgor, and under certain circumstances equity may compel him to give the pledgor a proxy. Whether the pledgee has the shares registered in his name or not, he is entitled to receive dividends declared thereon during the continuance of the pledge9 He must, however, account for them upon final settlement with his pledgor.10 A person holding stock as pledgee is under no obligation to pay calls thereon, although upon failure of payment the shares be subject to forfeiture." But it is thoroughly established that one to whom stock has been transferred in pledge or as collateral security for a loan, and who appears on the books of the company as the owner of the stock, is liable as a stockholder for the benefit of creditors."

1 Maybin v. Kirby, 4 Rich. Eq. 105; supra, § 330.

2 Weston v. Bear River etc. Co. 6 Cal. 125; S. C. 5 Cal. 186; 63 Am. Dec. 117; Wood's Railway Law, § 99.

3 Hiatt v. Griswold, 5 Fed. Rep. 373; Horton v. Morgan, 19 N. Y. 170; 75 Am. Dec. 311; Union etc. Bank v. Farrington, 13 Lea, 333; Cormick v. Richardson, 3 Lea, 1; Hubbell v. Drexel, 21 Am. Law Reg. N. S. 452; Day v. Holmes, 103 Mass. 306; Fay v. Gray, 124 Mass. 500; In re Angelo, 5 De Gex & S. 278.

4 Anderson v. Philadelphia Warehouse Co. 111 U. S. 479; Heath v. Griswold, 5 Fed. Rep. 573; Day v. Holmes, 103 Mass. 306; Taylor on Corporations (2d ed. 1889), § 794.

5 Poole v. West Point etc. Assoc 30 Fed. Rep. 513, 518.

6 National Bank v. Case, 99 U. S. 623, 631, where one of the grounds upon which a registered pledgee of stock is held liable for the corporate debts, is stated to be that "after having taken the apparent ownership, and thus become ent tled to receive dividends, to vote at elections, and enjoy all the privileges of ownership, it would be inequitable to allow him to refuse the responsibilities of a stockholder": Vail v. Hamilton, 85 N. Y. 453, 458.

7 Vowell v. Thompson, 3 Cranch, 428; Schofield v. Union Bank, 2 Cranch, 115; Lawrence v. Maxwell, 53 N. Y. 19; Baldwin v. Canfield, 26 Minn. 43; State v. Smith (1888), 15 Oreg. 98; Lewis on Stock Brokers, 120; Stephens on Joint Stock Companies, 401.

8 Vowell v. Thompson, 3 Cranch, 428.

9 Herrmann v. Maxwell, 47 N. Y. Super. Ct. 347; Hill v. Newichawanick Co. 48 How. Pr. 427.

10 Hasbrouck v. Vandervoort, 4 Sand. 74; Isaac v. Clarke, 2 Bulst. 306; Edwards on Bailments, 300.

11 Southwestern R. R Co. v. Douglas, 2 Spear (S. C.) 329.

12 National Bank v. Case, 99 U. S. 628, 631; Pullman v. Upton, 96 U. S. 328; Roosevelt v. Brown, 11 N. Y. 148; Adderly v. Storm, 6 Hill (N. Y.) 624; Crease v. Babcock, 10 Metc 525; Holyoke Bank v. Burnham, 11 Cush. 183; Magruder v. Colston, 44 Md. 349; Wheelock v. Kost, 77 Ill. 296; Hale v. Walker, 31 Iowa, 344.

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§ 336. Whether the pledgee may sell and repledge the stock. - It has been said that the pledgee cannot sell or even temporarily repledge the stock without being guilty of a conversion.1 While this may be ordinarily true, yet, under special circumstances, depending somewhat upon the nature of the pledge, and in all cases with the assent of the pledgor, expressed or implied, the property pledged may be used by the pledgee "in any way consistent with the ultimate rights of the pledgor." A bonafide purchaser or repledgee of the stock, without notice that it was held in pledge, will be protected.3 And where the owner of stock delivers it to his pledgee with a power to transfer it, even the fact that his name appears upon the certificate is not notice of his rights as against a third person taking it for value from the pledgee.*

1 Fay v. Gray, 124 Mass. 500; Goss v. Hampton, 16 Nev. 185; France v. Clark, 22 Ch. Div. 830, disapproving a contrary dictum in Ex parte Sargent, Law R. 17 Eq. 273.

2 Lawrence v. Maxwell, 53 N. Y. 19; Chamberlain v. Greenleaf, 4 Abb. N. C. 178. This question will be found discussed in the notes of 21 Am. L. Reg. N. S. 454, with many cases cited pro and con. See also Story on Bailments, § 324. In the notes to Cook on Stock and Stockh. § 471, many cases in point are diested.

3 McNeil v. Tenth National Bank, 46 N. Y. 325; Cherry v. Frost, 7 Lea, 1: Thompson v. Toland, 48 Cal. 99; Ex parte Sargent, Law R. 17 Eų. 273. Contra, Ortigosa v. Brown, 47 Law J. Ch. 168.

4 Felt v. Heye, 23 How. Pr. 359; Wood's Railway Law, § 99.

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§ 337. Redemption and forfeiture.-A person with whom stock certificates have been hypothecated is not bound, upon redemption of the pledge, to return the identical certificates originally deposited with him. It is sufficient that he return an equal amount of stock of the same kind.' Upon the failure of the pledgor to redeem the stock, the pledgee has two remedies. The first is by bill in equity seeking a foreclosure. This is his appropriate remedy where the pledge was made without a written transfer of the certificate; or where it was made as security for the performance of a contract, and the damages are unliquidated. The second remedy is by selling the stock at public auction, after giving personal notice to the pledgor of the time and place of sale. A sale on the stock exchange is not considered a public sale; for none but members of the association have the privilege of bidding there." A private sale is not allowable.8 But in case the sale has been private, the pledgor, by his conduct, may be estopped to object to its validity. If the pledgee himself becomes the purchaser at the sale, his purchase is voidable at the election of the pledgor.10

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1 Horton v. Morgan, 19 N. Y. 170; 75 Am. Dec. 311; Taylor v. Ketchum, 35 How. Pr. 289; Dykers v. Allen, 7 Hill, 497; Price v. Grover, 40 Md. 102; Gilpin v. Howell, 5 Pa. St. 41; 45 Am. Dec. 720; Noyes v. Spaulding, 27 Vt. 420; Thompson v. Toland, 48 Cal. 99; Atkins v. Gamble, 42 Cal. 86; Hardenburgh v. Bacon, 33 Cal. 356; Boylan v. Huguet, 8 Nev. 345; Hubbell v. Drexel, 21 Am. Law Reg. N. S. 452; Langton v. Waite, Law R. 6 Eq. 165.

2 Vaupell v. Woodward, 2 Sand. Ch 143.

3 Johnson v. Dexter, 2 McArthur, 530; Merchants' National Bank v. Hall, 83 N. Y. 338; Briggs v. Oliver, 68 N. Y. 336; Blouin v. Liquidators, 30 La. Án. 714; Robinson v. Hurley, 11 Iowa, 410; 79 Am. Dec. 497.

4 Robinson v. Hurley, 11 Iowa, 410; 79 Am. Dec. 449.

5 Ogden v. Lathrop, 65 N. Y. 158; Conyngham's Appeal, 57 Pa. St. 474. 6 Markham v. Jaudon, 41 N. Y. 235, 243, holding also that the time and place must be reasonable; Bryan v. Baldwin, 52 N. Y. 234, holding that the notice must be personal; Lewis v. Graham, 4 Abb. Pr. 106, that newspaper advertisement is not sufficient notice; Stevens v. Hurlbut Bank, 31 Conn. 146, holding that express power to sell in a certain event is not a waiver of notice.

7 Brass v. Worth, 40 Barb. 648; Rankins v. McCullough, 12 Barb. 103; Willoughby v. Comstock, 3 Hill, 389.

8 Willoughby v. Comstock, 3 Hill, 389; Castello v. City Bank, 1 Leg. Obs. 25. But see Bryson v. Raynor, 25 Md. 424, holding that an express power to sell authorizes a private sale, or a sale at a broker's board.

9 Willoughby v. Comstock, 3 Hill, 389.

10 Bryan v. Baldwin, 52 N. Y. 232; Maryland Fire Ins. Co. v. Dalrymple, 25 Md. 242.

§ 338. Transfer by sale-Brokers' contracts.— Contracts for the sale of stock are usually made through the medium of brokers. Ordinarily any person capable of making a contract may act as a broker.1 But a broker dealing in stocks for a customer incompetent to contract, becomes personally liable. The formalities and method of completing a stock-broker's contract are governed largely by the usages of the stock exchange. This "has been held in a great number of cases. But it is well settled that no custom among brokers can deprive parties of rights which the law gives these rights be waived by agreement.5 In England, where transfers of stock must be by deed, in the case of sales upon the stock exchange, the practice is for the broker to sell to a jobber, and, after several sub-purchases, the name of the ultimate purchaser is passed to the vendor. If the vendor accepts the name and executes a deed of transfer which is accepted by the tranferree, the contract

them unless