7 the real owner will not be estopped by allowing his clerk, the forger, to have access to his papers, and intrusting him with blank transfers duly signed to use in transferring other stock. But it is submitted that such a ruling practically renders the corporation an insurer of the integrity of every agent through whom a stockholder may transact his business; and that if this be law, no company may safely venture to permit registration of any transfer without requiring the personal presence of the transferrer. It is held also upon high authority that the negligence of a guardian does not estop the ward from pursuing his remedy against the corporation for permitting registration of a forged transfer of stock; which would seem to place the company in the position of bondsman to secure the faithful and diligent performance of the duties of trustees. 1 Coventry v. Great Eastern R'y Co. 11 Q. B. 776; Baxendale v. Bennett, 3 Q. B. 525; Arnold v. Cheque Bank, 1 Com. P. Div. 578; Swan v. North British etc. Co. 2 Hurl. & C. 181. Cf. Sewall v. Boston etc. Co. 86 Mass. 277; Coles v. Bank of England, 10 Ad. & E. 437. 2 Coles v. Bank of England, 10 Ad. & E. 437; McKenzie v. British Linen Co. 6 App. C. 82. 3 Bank of Ireland v Evans' Charities, 5 H. L. Cas. 389. 4 Taylor v. Great Indian etc. R'y Co. 4 De Gex & J. 559; Swan v. North British etc. Co. 2 Hurl. & C. 175. Cf. Donaldson v. Gillout, 3 Eq. 274. 5 Johnston v. Renton, Law R. 9 Eq. 181. 6 Davis v. Bank of England, 2 Bing. 393. 7 Swan v. North British etc. Co. 7 H. & N. 603, substantially overruling Ex parte Swan, 7 Com. B. N. S. 400; Cook on Stock & Stockh. § 366. 8 Telegraph Co. v. Davenport, 97 U. S. 369. § 368. No title can be founded on forgery-The purchaser's remedy.-No title can be founded on forgery. The immediate purchaser from one who makes a forged transfer of stock has no rights whatever against the corporation. He cannot require the transfer to be registered; nor, if it has been reg 2 istered before the forgery came to light, can he require the company to recognize him as a shareholder after the discovery thereof. He can neither restrain it from canceling the registry nor maintain an action for damages upon the cancellation; unless, perhaps, he was induced to believe in the validity of the transfer by the very fact that the company permitted registration to be made. But if the company by mistake permits such a transfer to be registered, it is not estopped to deny the title of the transferree.* The immediate purchaser from a person making a forged transfer, to whom new certificates of stock have been issued, cannot retain them as against the real owner of the old ones.5 But when he is deprived of them by reason of his vendor's having received them under a forged transfer, he may recover from the latter upon the implied warranty of title, although the vendor himself had no knowledge of the forgery. But an agent selling stock which his principal acquired under a forged transfer cannot be held liable to the vendee.' 1 Davis v. Bank of England, 2 Bing. 393; Hare v. London etc. R'y Co. John. 722; S. C. 7 Jur. N. S. 1145. 2 Whitewright v. American Tel. etc. Co. N. Y. Daily Reg. Aug. 6th, 1886; Hambleton v. Central etc. R. R. Co. 44 Md. 551; Brown v. Howard Ins. Co. 42 Md. 384; Hildyard v. South Sea Co. 2 P. Wms. 76; Waterhouse v. London etc. R'y Co. 41 Law T. N. S. 553; Simm v. Anglo-American Tel. Co. 5 Q. B. Div. 188. Cf. Ashby v. Blackwell, 2 Eden, 299. 3 Metropolitan Savings Bank v. Mayor etc. of Baltimore, 63 Md. 6. 4 Waterhouse v. London etc. R'y Co. 41 Law T. 553; Simm v. AngloAmerican Tel. Co. 5 Q. B. Div. 188. 5 Cook on Stock & Stockh § 364; Johnston v. Renton, Law R. 9 Eq. Cas. 181. 6 Matthews v. Massachusetts National Bank, 1 Holmes, 396. 7 Machinists' National Bank v. Field, 126 Mass. 345. $369. The corporation estopped to deny the title of a purchaser of new certificates of stock originally transferred by forgery. If the pur chaser of stock, under a forged transfer, has been registered, and has obtained new certificates from the company which he sells to a bona-fide purchaser, the company is liable to the latter purchaser, and is bound to make good the representations contained in the new certificates, the measure of damages being the value of the stock at the time of its first refusal to recognize him as a shareholder, together with the legal rate of interest. Such a bona-fide purchaser of the new certificate cannot be compelled to relinquish his stock either to the corporation or to the real owner. For the giving of a certificate is a declaration by the company to all the world that the person in whose name the certificate is made out and to whom it is given is a shareholder in the company; and it is given by the company with the intention that it shall be so used by the person to whom it is given, and acted upon in the sale and transfer of shares." 1 In re Bahia etc. R'y Co. Law R. 3 Q. B. 584; Hart v. Frontino etc. Co. Law R. 5 Ex. 111. 2 Machinists' National Bank v. Field, 126 Mass. 345; In re Bahia etc. Ry Co. Law R. 3 Q. B. 584. 3 Machinists' National Bank v. Field, 126 Mass. 345; In re Bahia etc. R'y Co. Law R. 3 Q. B. 584; Manhattan Beach Co. v. Harned, 23 Blatchf. C. C. 494. 2 1 § 370. Of speculative and wager contracts for the sale of stock.-Wager contracts were not at common law necessarily void. Generally, however, in this country, all wagering contracts are hell to be against public policy, and under modern statutory law, both in England and in America, wagering contracts, and speculative sales of stock, are rendered void. But the history of these stockjobbing acts seems to prove conclusively that they have never been effective in preventing speculations in stocks. "In almost every instance in which they have been adopted. . they have finally been repealed." The criterion by which to determine the legality of speculative contracts for the sale of stock is the intent of the parties. If they intended an actual delivery, the contract is valid; if they intended merely to pay the difference between the contract price and the market value at the time agreed upon for delivery, the transaction is a wager and illegal. The intent of the parties is usually a question of fact for the jury." 1 Dewey on Contracts, 10. 2 Irwin v. Williar, 110 U. S. 499, and cases there cited. 3 8&9 Vict. ch. 109, § 18. Cf. Thacker v. Hardy, 4 Q. B. Div. 689; Grizewood v. Blane, 11 Com. B. 526; Barry v. Croskey, 2 Johns. & H. 1. 4 N. Y. 1 Rev. S at. 662, § 8; Harris v. Turnbridge, 83 N. Y. 92; Kingsbury v. Kirwan, 77 N. Y. 612; Story v. Saloman, 71 Ñ. Y. 420; Yerkes v. Saloman, 11 Hun, 471. 5 Cook on Stock & Stockh. § 342, where the statutes are cited in detail, together with the decisions under them. That "cornering" the market is illegal, see Arnot v. Pittston etc. Coal Co. 68 N. Y. 558; Sampson v. Shaw, 101 Mass. 145; Morris Run Coal Co. v. Barclay Coal Co. 68 Pa. St. 173; Raymond v. Leavitt, 13 Cent. Law J. 110; Barry v. Croskey, 2 Johns. & H. 1. With respect to contracts to buy or sell stock for the purpose of controlling the market price, see Tobey v. Robinson, 99 III. 202; Quincy v. White, 63 N. Y. 370, 383; Fisher v. Bush, 35 Hun, 641; Livermore v. Bushnell, 5 Hun, 285. 6 Dos Passos on Stock Brokers and Stock Ex. 405. 7 Roundtree v. Smith, 108 U. S. 269; In re Hunt, 26 Fed. Rep. 739; Greenhood on Public Policy, 230-237. For further authorities on this point and for a fuller discussion of the subject of speculative sales of stock, the reader is referred to the works upon that branch of the law: Dewey on Contracts for Future Delivery, and Commercial Wagers; Dos Passos on Stock Brokers and Stock Ex.; Lowell on Transfer of Stocks; and notably the very able discussion of these questions in Cook on Stock & Stockh. ch. 20, B, §§ 341-348. CHAPTER XVI. OF REGISTRATION OF TRANSFERS. § 371. Registration-For what purposes requisite. § 372. (a). To relieve the transferrer from liability to the corporation and to its creditors. § 373. The transferrer may recover calls paid by him from his transferree. § 374. (b). To entitle the transferree to a shareholder's rights and privileges. § 375. (c). To protect the transferree against the creditors of his transferrer. § 376. The same subject, continued-The contrary rule. § 377. 378. (d). To protect the transferree from a fraudulent transfer of the same stock. (e). For the benefit and protection of the corporation. $379. The formal requisites of registration of transfers. § 380. English statutory provisions in respect of registration of transfers otherwise than by contract. 381. Of the manner of effecting transfers prior to incorporation or issue of certificates, formal registration being impossible. § 392. Notification of transfer, and demand of registration. § 333. Of the surrender of the old certificates. $384. The same subject, continued. § 386. § 387. Registration dates only from the actual entry upon the books. § 388. When the company may refuse registration. § 389. The same subject, continued-The corporate lien for debts of the transferrer. $390. § 391. The same subject, continued-Of by-laws creating a lien. § 392. § 393. § 394. Extent of the corporate lien-The general rule continued. § 395. Waiver of corporate lien. § 396. The company entitled to a reasonable time for investigation. |