The owner of a certificate has the right to request a stop transfer in the case of loss or theft of the certificate or other con tingency. The transfer may also be estopped by order of court. To transfer contrary to a stop-payment order makes the transfer agent liable, and so the windowman keeps a sheet or card file of these orders before him at all times. Upon notification by a stockholder that his certificate has been lost, stolen, or destroyed, a "stop" is immediately placed against the certificate number in the ledger and the name, amount of shares, and certificate number are entered on the "stop-transfer" list, and the registrar and the other transfer agents of the corporation are advised of the stop-transfer. A new certificate is not usually issued until one year after the notice of loss, and then only after the filing by the owner of a bond of indemnity for two or more times the par value of the stock.
Transfers in Fiduciary Capacities Since most transfers result from stock exchange sales, the rules of the exchange for "good delivery" must be observed. Securities in the name of individuals in fiduciary capacities are not "good deliveries," and when the word "executor," "admin istrator," "trustee," "guardian," or the like appears on the certi ficate the transfer agent is put on guard to see that the instru ment or authority creating the trust gives the power of sale.
i. Transfers by Executors. When a certificate is transferred from the estate of a decedent testate, the transfer agent requires a copy of the last will and testament of the deceased, a recent probate court certificate showing the appointment of the execu tor, and a waiver of inheritance tax from the state of incorpora tion and from the state in which the transfer is made. Also, in the event of the stock going to the executor as an individual, he must file an affidavit stating that there are no debts and claims outstanding, and should there be such debts or claims, ample provision must be made therefor.
2. Transfers by Administrators. When a certificate of stock is transferred from the estate of a decedent intestate, the transfer agent requires a certificate of the granting of letters of adminis tration, the same waiver as in the case of the decedent testate, and, if the transfer is made to the administrator as an individual, an affidavit as above described of the kind required in the case of an executor, or an order from the court authorizing the admin istrator to make the transfer. The procedure is governed by the laws of the state of which the deceased was a resident. Only one signature to the assignment of an executor or administrator is required.
3. Transfers by Trustees. In a transfer of this kind there must be a certified copy of the court appointment, if any; a copy of the instrument under which the trustee acts; and, if the stock is transferred to the trustee as an individual, an affidavit or court order of the kind above mentioned. It is necessary that all
trustees execute the assignments, the signature of one alone not being sufficient.
4. Transfers by Guardians. In transfers by guardians, a certificate of the court appointment is required, and in the event of the stock going to the ward, a statement is filed signed by the guardian to the effect that the ward has become of age. When a father acts as guardian without having been formally appointed by the court, a signed statement by him to that effect is necessary.
5. Transfers by Corporations and Associations. In such cases there must be furnished a certified copy of the by-laws of the cor poration, a certificate of incorporation, and a resolution from the board of directors authorizing the transfer and naming the officer to make the transfer.
The Delivery of the New Certificates When the windowman of the transfer department is satisfied that the certificate is a "good transfer," that is, that it conforms to the requirements of law and of the stock exchange, the person presenting it is asked to fill in the name of the transferee. If the transfer is to be made to an individual, his full name and address should be given; if to a married woman, her own name should be entered and not that of her husband, for example, "Mary Smith" and not "Mrs. John Smith "; if to an estate, it must read "John Doe, Executor of the Estate of Richard Roe"; and if to trustees, a brief description of the trust must be given. After the certificate is properly filled in, the windowman gives the person presenting it a numbered blank receipt, the numbered stub of which is attached to the certificate.
The certificate is next entered on the bank's transfer sheets. These are ruled with a date column, a debit or certificate-surren dered column, and a credit or certificate-issued column. On the debit side entry is made of the name of the former stockholder, the number of the certificate, and the amount of shares; and on the credit side the name and address of the new stockholder, the number of the new certificate, and the amount of shares. A duplicate sheet is made and forwarded to the respective agents in the states under which the companies are incorporated. The number and amount of the new stock are then put on the stub and the certificate is detached from the stub. The amount of the new stock must agree with the canceled stock and must prove with the balance of credits at the beginning of business and the credit at the close of business. The new stock is handed to the proper bank officer for signature, as transfer agent, and the can celed stock to some other department for proving against the new stock.