As to overissue of shares, see OVERISSUE.
Transfer. A certificate of stock is trans ferable on the books of the company by the owner in person or by his agent under writ ten authority, which is commonly executed in blank and which may be filled up by the transferee with the name of the agent, Ang. & A. Corp. § 564 ; New York & N. H. R. Co. v. Schuyler, 34 N. Y. 30 ; German Union Bldg. & Say. F. Ass'n v. Sendmeyer, 50 Pa. 67. A transfer in blank is deemed sufficient in some jurisdictions to pass the legal title to the stock subject to the claims of the company upon the registered stockholders; 2 Ames, B. & N. 784 ; Cushman v. Jewelry Co., 76 N. Y. 365, 32 Am. Rep. 315 ; Duke v. Nay. Co., 10 Ala. 82, 44 Am. Dec. 472; in other cases such a transfer has been held to give the holder merely an equitable inter est; Black v. Zacharie, 3 (U. S.) 483, 11 L. Ed. 690 ; Brown v. Adams, 5 Biss. 181, Fed. Cas. No. 1,986. Prof. Ames is of opinion that the true view is that such a transfer does not pass the legal title, but that it passes the equitable interest, cou pled with an irrevocable power of attorney to acquire the legal title; 2 Ames, B. & N. 784. This irrevohable power may, in some cases, by the doctrine of estoppel, be ac quired by the delivery of the certificate from one who has no such power himself ; Thomp-, son v. Toland, 48 Cal. 99; Stone v. Marye, 14 Nev. 362; Appeal of Pennsylvania R. Co., 86 Pa. 80; McNeil v. Bank, 46 N. Y. 325, 7 Am. Rep. 341. A seal is not neces sary; Quiner v. Ins. Co., 10 Mass. 476; though usually employed.
Shares of stock are non-negotiable instru ments, but through the doctrine of estoppel, stock certificates, with a power to transfer them, can be dealt in with nearly the same im munity as bills and notes; Dos Passos, Stock Brokers 596 ; and the same writer is of opinion that the time has come for the court to receive evidence of the general usage of the business world, so as to raise stock cer tificates to the dignity of negotiable instru ments ; id. 597; but see Aull v. Colket, 2 Wkly. Notes Cas. (Pa.) 322, where evidence of such a usage was rejected; see, also, 38 Pa. 98. Professor Ames says (2 Bills & Notes 784): "Whether the custom of mer chants will ever lead the courts to give those instruments (certificates of stock) the qual ity of negotiability may be an open ques tion ; but that they have not done so is clear." See Anderson v. Nicholas, 28 N. Y.
600; 14 Am. L. Reg. N. S. 163, n. In.Bank v. Lanier, 11 Wall. (U. S.) 369, 20 L. Ed. 172, the court said, that certificates, "although neither in form or character negotiable paper, approximate it as nearly as practicable." Stock certificates are a peculiar kind of property. Although not negotiable paper, strictly speaking, they are frequently sold in open market as negotiable securities are; Na tional S. D., S. & T. Co. v. Hibbs, 229 U. S. 391, 33 Sup. Ct. 818, 57 L. Ed. 1241, holding that whbre a bank's trusted agent took certain of its stock certificates, authenticated with evi dence of title, to a broker, who sold them for full value, in good faith, and paid the pro ceeds to the bank's agent, the bank could not make any claim against the broker. In Rus sell v. Tel. Co., 180 Mass. 467, 62 N. E. 751, it is held that where there is a custom among banks and brokers for certificates of stock, with blank transfer, to pass from hand to hand without enquiry, one who en trusts a certificate with blank transfer to a broker, for the purpose of exchanging for a new certificate, is estopped to assert his title against a bona fide pledgee to whom the bro ker had fraudulently pledged the certificate for his own debt; whether the broker's act was larceny was immaterial; in delivering the opinion of the court, Holmes, C. J., cited Knox v. Eden Musde American Co., 148 N. Y. 441, 41 N. E. 988, 31 L. R. A. 779, 51 Am. St. Rep. 700; Appeal of Pennsylvania R. Co., 86 Pa. 80.
In case of the sale of the stock this power of attorney becomes irrevocable; Chew v. Bank, 14 Md. 299; but if such a power of at torney is forged or is made by a person not competent to make it, the corporation is liable for allowing the transfer; Chew v. Bank, 14 Md. 299. See Appeal of Pennsylvania R. Co., 86 Pa. 80; Pratt v. Mfg. Co., 123 Mass. 110, 25 Am. Rep. 37. A company may refuse to allow a transfer until satisfied of the party's right to make it; L. R. 9 Eq. 181; Bayard v. Bank, 52 Pa. 232; Magwood v. Bank, 5 S. C. 379.