poration liable to the holder of the certificate, if its transfer agent had actual knowledge of the fact that the stock had already been once sold.*

1 New York etc. R. R. Co. v. Schuyler, 34 N. Y. 30, 81, 82. Acc. Pollock v. National Bank, 7 N Y. 274; 57 Am. Dec. 520; Davis v. Bank of England, 2 Bîng. 393; Ashby v. Blackwell, 2 Eden Ch. 299.

2 New York etc. R. R. Co. v. Schuyler, 34 N. Y. 30, 83; Kortwright v. Buffalo Commercial Bank, 20 Wend. 91.

3 New York etc. R. R. Co. v. Schuyler, 31 N. Y. 30, 83, 84; Kortright v. Buffalo Commercial Bank, 20 Wend. 91, 94; The King v. The Bank of England, Doug. 523.

4 Bridgeport Bank v. New York etc. R. R. Co. 30 Conn. 270; New York etc. R. R. Co. v. Schuyler, 34 N. Y. 30, 84.

§ 385. In what books transfers may be recorded. In England, the deed of transfer, when duly executed, must be delivered to the secretary of the company, whose duty it is to keep it and to enter a memorial thereof in a book called the "register of transfers," and to indorse this entry upon the deed of transfer. The company is entitled to a small fee for registration.' But in America it is not essential that the company should set apart a book exclusively for the registration of transfers. All that is necessary, when the transfer is required by law to be made upon the books of the company, is that the fact should be appropriately recorded in some suitable registry or stock list, or otherwise formally entered upon its books. For this purpose the account in a stock ledger, showing the names of the stockholders, the number and amount of the shares belonging to each, and the sources of their title, whether by original subscription and payment or by derivation from others, is quite suitable and fully meets the requirements of the law. Thus, in a late case in Alabama, under a statute providing that no transfer shall be valid as against bona-fide creditors

2

"13

and subsequent purchasers, "except from the time such transfer shall have been registered or made upon the book or books of such company,' a memorandum in the stub book from which the new certificates were cut, was considered a sufficient registration, where the company kept no other registry of transfers and had no by-law regulating the manner of registration.*

1 2 s. 6d. unless otherwise prescribed in a special act: 8 Vict. ch. 16, § 15. 2 National Bank v. Watsontown Bank, 105 U. S. 217. Acc. Preston v. Custer (1888), 64 N. H. 461.

3 Ala. Code, §§ 2041, 2044.

4 Fisher v. Jones, 82 Ala. 117.

§ 286. Registration dates only from the actual entry upon the books. —Where it is require d that runsfers be registered upon the corporate books, a tran fer will not be deemed to have been registered without its having been actually entered upon the books. Thus, it will not be construed as an actual registration for the registry clerk to write upon the papers the words, "received for record;"2 nor will a mere entry of credit to the transferree on the treasurer's books amount to a registration;3 nor will registry at a branch office in another State operate as a registration until entered in the books at the principal office; nor will leaving the old certificates with the corporate officers, with the request that the transfer be made."

1 McCurry v. Suydam, 10 N. J. 245.

2 Northrop v. Curtis, 5 Conn. 246.

3 Marlborough Manufacturing Co. v. Smith, 2 Conn. 579.

4 Pinkerton v. Manchester etc. R. R. Co. 42 N. H. 424.

5 Brown v. Adams, 5 Biss. 181.

§ 387. Waiver of formal registration.-The corporation may waive the formalities of registra

tion; as, for example, by paying dividends to an unregistered transferree, or by placing the transferree's name upon the list of stockholders.3 Thus, it has been held that entries in the dividend book and in the ledger of the company, showing that dividends had been paid to transferrees of stock whose names had never been entered in the registration book, taken together with the fact that they had become officers of the company, was a sufficient recognition of them as stockholders to release their transferrers from liability to corporate creditors. And after the company has once recognized the transferree as a shareholder, it cannot avail itself of informalities in the transfer or registration thereof, for the purpose of holding the transferrer liable for calls.5

1 Isham v. Buckingham, 49 N. Y. 216; Weber v. Fukey, 52 Md. 500, 516; Ex parte Walton, 26 Law J. Ch. 545; Baine v. Whitehaven R'y Co. 3 H. L. Cas. 1; Clowes v. Brettell, 11 Mees. W. 461; Walter's Case, 3 De

Gex & S. 149; Sadler's Case, 3 De Gex & S. 36.

2 Cutting v. Damerel, 88 N. Y. 410.

3 Upham v. Burnham, 3 Biss. 431, 520.

4 Cutting v. Damerel, 88 N. Y. 410. Cf. Johnson v. Underhill, 52 N. Y. 203; Bosanquet v. Shortridge, 4 Ex. 699.

5 Upton v. Burnham, 3 Biss. 431, 520; Cutting v. Damerel, 88 N. Y. 410; Isham v. Buckingham, 49 N. Y. 216; Strange v. Houston etc. R R. Co. 53 Tex. 162; Murray v. Bush, Law R. 6 H. L. 37; Bargate v. Shortridge, 5 H. L. Cas. 297.

§ 388. When the company may refuse registration. The directors of the company have no power to refuse to permit a transfer of stock to be made, unless they be expressly vested with a discretion in respect thereof by the charter or articles of association.1 As has been said by an eminent jurist, such a power is so capable of abuse and so foreign to all received notions and to the universal practice and mode of dealing in stocks, that it cannot, in the

absence of legislative expression, be held to exist." The directors are, however, sometimes vested with a discretion in the matter by the articles of association. Even then, however, the courts will inquire whether their power has been reasonably exercised.* Registration of a transfer cannot be refused on the ground that there was no consideration therefor; 5 nor because the company has been notified by a claimant of the stock not to permit the registration to be made. Under the Married Women's Property Act of 1870, a company was bound to register shares in the name of a married woman to whom they had been transferred, unless it could show a flaw in her title. Delivering a defective deed of transfer to the secretary does not entitle the purchaser to registration until the defect is remedied." By the Companies' Clauses Act of 1845, the closing of the transfer books for a prescribed time 1 before each ordinary meeting, is declared lawful upon giving seven days' notice by newspaper advertisement; and the effect of the closing is declared to be that "any transfer made during the time when the transfer books are so closed shall, as between the company and the party claiming under the same, but not otherwise, be considered as made subsequently to such ordinary meeting."" After a winding-up order has been made, it is the duty of the company to refuse registration of transfers.12

10

1 Johnson v. Laflin, 5 Dill. 65, 70; S. C. 103 U. S. 800; Chappell's Case, Law R. 6 Ch. App. 902; Gilbert's Case, Law R. 5 Ch. App. 955; Weston's Case, Law R. 4 Ch. App. 20; In re Stranton etc. Co. Law R. 16 Eq. 559. 2 Johnson v. Laflin, 5 Dill. 65, 78, per DILLON, J.

3 Bargate v. Shortridge, 5 H. L. Cas. 297; Shortridge v. Bosanquet, 16 Beav. 84.

4 Moffatt v. Farquhar, 7 Ch. Div. 591; Robinson v. Chartered Bank, Law R. 1 Eq. 32. But seex parte Penny, Law R. 8 Ch. 446, holding that

the directors may refuse to give their reasons for refusal, and that it will then be presumed that their reasons were sufficient.

5 Helm v. Swiggett, 12 Ind. 194.

6 Ex parte Sargent, Law R. 17 Eq. 273.

7 33 & 34 Vict. ch. 93, § 4.

8 Regina v. Carnatic R'y Co. Law R. 8 Q. B. 299.

9 Nauney v. Morgan, 35 Ch. Div. 598.

10 For fourteen days, unless otherwise provided by the special act of incorporation.

11 8 Vict. ch. 16, § 17.

12 Mitchell's Case, Law R. 4 App. C. 548; Chappell's Case, Law R. 6 Ch. App. 902; Weston's Case, Law R.4 Ch. App. 685; Ex parte Parker, Law R. 2 Ch. 635.

1

§ 389. The same subject, continued-The corporate lien for debts of the transferrer.-The company cannot refuse to register a transfer of stock upon the ground that the transferrer is indebted to it, for at common law it has no lien upon the shares of its stockholders to secure the payment of debts.2 In many cases, however, a lien has been created by statute, 3 or by the corporate charter,* or by a by-law of the company, or by an agreement between the shareholders," or by usage, known to the transferrer and transferree." All persons are affected with knowledge of a lien upon the stock created in favor of the corporation by charter or by statute, whether it be set forth in the certificate or no.9

8

5

1 Driscoll v. West Bradley etc. Co. 59 N. Y. 96; Mobile Mutual Ins. Co. v. Cullom, 49 Ala. 558; Steamship Dock Co. v. Heron, 52 Pa. St. 286; Farmers' etc. Bank v. Wasson, 43 lowa, 336; 30 Am. Rep. 398; Williams v. Lowe, 4 Neb. 382, 398; Taylor on Corporations, § 600.

2 Neale v. Janney, 2 Cranch, 188; Bates v. New York Ins. Co. 3 Johns. Cas. 238; Dana 7. Brown, 1 Marsh. J. J. 34; Byron v. Carter, 22 La. An. 98; Massachusetts Iron Co. v. Hooper, 7 Cush. 183; Steamship Dock Co. v. Heron, 52 Pa. St. 230; People v. Crockett, 9 Cal. 112; Williams v. Lowe, 4 Neb. 382, 398; McMurrich v. Lond Head Harbour Co. 9 Up. Can. Q. B. 333. 3 In New York, the General Railroad Act of 1850, ch. 140, §8, provides, that "no share shall be transferable until all previous calls thereon shall have been fully paid in." See, also, National Bank v. Watsontown Lank, 105 U. S. 217; Allen v. Montgomery R. R. Co. 11 Ala. 437, 451; Pittsburg etc. R. R. Co. v. Clarke, 2) Pa. St. 146; Everhart v. West Chester R. R. Co. 23 Pa. St. 33J; Rogers v. Huntington Eank, 12 Serg. & R. 77; Ryder v. Al