13. Transfer of stock.—After stock has been sub scribed, paid for and certificates of stock issued, the holder may desire to sell it. Enough has been said to indicate the general procedure of transferring stock. The subject is of great legal interest, because of the mass of litigation between conflicting claimants. A few of the principles of law which have emerged from this litigation about the negotiability of shares, bear ing directly upon the financial plan of the company, require mention.
It is apparent that the more readily negotiable the shares can be made, the more marketable the stock will•become. At the same time, it is necessary to safe guard the issue of certificates and to identify clearly the legal owners of stock for the purpose of voting and receiving dividends. Stock certificates may be lost or stolen, no certificates may have been issued for stock fully paid, or several certificates may have been erroneously issued for the same stock. Stock certifi cates may be forged or counterfeited; in fact, numer ous circumstances may arise which make it necessary to have some other and better evidence of stock own ership than the certificate.
In order that stock certificates may be a valuable means of identifying the owner of shares, the law places upon the corporation the burden of issuing and properly recording them. The innocent purchaser of a stock certificate, unless it has been forged, may therefore feel quite certain that the assignment of it places him in position to demand a new certificate in his own name and to have it recorded on the books of the company.
To make this transfer, the original owner of the stock may appear personally and surrender this cer tificate, authorizing a new certificate to be issued to the new owner, or he may sign a power of attorney, authorizing another whose name is mentioned to ap pear for him and transfer the stock in like manner. By reason of this signed blank, power of attorney, printed upon the back of the stock certificate, enabling any future holder to insert his own name and have the stock transferred to himself on the books, the cer tificate becomes highly negotiable, passes by delivery, and may be sold, or pledged as collateral upon a loan, without further assignment.