determination, and all of which may be." As to their employes, it may be extended to the police, which the corporations themselves exercise in the absence of legislative regulations. Thorpe v. Railroad Co., 62 Amer. Dec. 625.

In McDonald v. State, 81 Ala. 279, 2 South. Rep. 829, the act "to require locomotive engineers in this state to be examined and licensed by a board to be appointed by the governor for that purpose" was brought before this court. The enactment declares unlawful, and makes a misdemeanor, for the engineer of any railroad train in this state to drive or operate any train of cars or engine upon the main line or road-bed of any railroad in this state, which is used for the transportation of persons, passengers, or freight, without first undergoing an examination and obtaining a license as therein provided. The act requires the governor to appoint a board of examiners, who are authorized to make the examinations, and to issue the licenses; and the examining member of the board is entitled to a fee of five dollars, to be paid by the applicant. It was contended that the act is a regulation of commerce between the states, and contravenes the constitution of the United States. SOMERVILLE, J., speaking for the court, says: "In our opinion, it is a mere internal police regulation, which was competent to be provided for by the state, as a proper mode of preserving the safety of the traveling public, and other persons whose lives may well be imperiled by the negligence of ignorant and incompetent engineers."

The same statute was brought before the supreme court of the United States in Smith v. Alabama, 124 U. S. 465, 8 Sup. Ct. Rep. 564, on error to this court, when the same constitutional objection was made. The validity of the act was maintained as a valid exercise of the police power. MATTHEWS, J. says: "It is properly an act of legislation, within the scope of the admitted power reserved to the state to regulate the relative rights and duties of persons being and acting within its territorial jurisdiction, intended to operate so as to secure for the public safety of person and property."

The statute now under consideration came before the same court in Railway Co. v. Alabama, 128 U. S. ——, 9 Sup. Ct. Rep. 28; also on error to this court. After referring to the decision in Smith v. Alabama, and the provisions of the statute adjudged to be valid in that case, FIELD, J., says: "The act now under consideration only requires an examination and license of parties to be employed on railroads in certain specified capacities, with reference to one particular qualification,-that relating to his visual organs; but this limitation does not affect the application of the decision. If the state could lawfully require an examination as to the general fitness of a person to be employed on a railway, it could, of course, lawfully require an examination as to his fitness in some one particular." The statute was held to constitute a part of that body of the local law which governs the relation between carriers of passengers and freight and the public who employ them. It relates to the duties of railroad companies, and the rights of the traveling public, defining and declaring that certain specified things shall be done and observed to insure the safe carriage of passengers. In view of the foregoing adjudications, that the provisions of the act fall within the class of police regulations we cannot regard as an open question.

The legislature, having the power to supervise and regulate the business of railway companies, so far as may be needful to the safety of passengers, had implied authority to provide suitable and efficient means of enforcing the regulations, and impose the expense on the companies. On this principle rest the provisions of many such statutes. Dealers in many classes of merchandise are required to submit them to inspection, and dealers using weights and measures to have them officially approved, and pay the fees of the officers. Steam-vessels are required to submit to inspection, and pay the expense thereof. The duties have often been imposed on railroad companies to fence their

roads, station flag-men at public crossings, and provide safeguards at places of danger at their own expense. The statutes of the several states afford many other illustrations of the application of the same principle, the constitutionality of which has not been doubted. Railroad Co. v. Commissioners, 79 Me. 386, 10 Atl. Rep. 113; Morgan v. Louisiana, 118 U. S. 455, 6 Sup. Ct. Rep. 1114; Thorpe v. Railroad Co., supra; Railway Co. v. Mower, 16 Kan. 573. The supervision is not because of benefit to the parties whose business is supervised, but in the interest of the public good, health, and safety. If the state has the authority to impose upon railroad companies the expense of inspecting their tracks and machinery, of stationing flag-men at public crossings, and providing safeguards when necessary, on no sound principle can the right be denied to have their employes examined by a competent board constituted by state authority, and to require the companies to pay the reasonable expense of ascertaining that their employes possess the qualifications required by law,-the expense in ascertaining that the agencies used by them in operating their roads, the fitness of which is essential to the protection and safety of life and property, are suitable and efficient. This, as I understand it, is the view of the statute taken in Railway Co. v. Alabama, supra, where, in answer to the objection that the act deprived the companies of property without due process of law, FIELD, J., says: "Requiring railroad companies to pay the fees allowed for the examination of parties who are to serve on their railroad in one of the capacities mentioned, is not depriving them of property without due process of law. It is merely imposing upon them the expenses necessary to ascertain whether their employes possess the physical qualifications required by law."

But, conceding the right to require payment of the expense of enforcing proper police regulations, counsel contend that the statute operates to create a state board of examiners before whom every person desiring to be employed in the specified capacities, whether or not in actual employment when the statute went into effect, shall appear and be examined, to the end that the state, in exercising its licensing power, may be informed what persons can be trusted to engage in certain occupations; and the requirement that the railroad companies shall pay the expense is the imposition of a tax, under color of establishing police regulations, unauthorized by the taxing power. Taxation is not the purpose, nor ordinarily a legitimate exercise, of the police power. Its province is to supervise and regulate, in doing which a license fee may be exacted to assist in the regulation, but should not exceed the necessary or probable expense of inspecting and regulating the business to which the power is extended, including the expense of issuing the license, and compensation to the officer required, and such incidental and additional expense as may be necessary to enforce the regulations. Van Hook v. City of Selma, 70 Ala. 361; Cooley, Tax'n, 598. In establishing police regulations, a license fee may be exacted for the purpose of raising revenue; but when done the tax is not imposed under the police power, but under the separate and distinct power of taxation, and comes within the provisions of the constitution limiting the exercise of the latter power. The requirement that the railroad companies pay the expense of the examinations is not the imposition of a tax, in the constitutional sense. No part of the fee allowed the examiner, which is the only expense required to be paid, goes into the state treasury, or assists in raising the public revenue, and it cannot be applied to any other purpose than payment of the expense of the examination. By the express terms of the statute, it is allowed for each and every examination, whether or not a certificate of fitness is granted, and was intended to cover, from time to time, the expense of enforcing the statutory regulations.

If the operation of the act be, as counsel insist, to impose on the companies the fee for examining and licensing persons who are not in their employment, and who sustain no relation to them in the department of their business su

pervised, it goes beyond the scope and province of the police power, and falls within the provision of the constitution which prohibits private property being taken for private use, or depriving a person of property without due process of law. It is an essential constituent of a valid law, imposing upon the companies the expense, that it be restricted to the examination of persons who are to be employed or are in the service of the companies in some one of the specified capacities,-agencies employed by them to carry on their business. As is apparent from the decisions referred to above, the requirement that the examinations shall be at the expense of the companies is sustainable only as an authorized part of the system of supervision. By the statute all persons, whether or not in employment at the time the act took effect, are required to obtain the reqisite certificate, and of consequence to undergo an examination before serving in any of the specified capacities. The fifth section, which allows the fee, does not prescribe in terms by whom it shall be paid. The third section specially extends the supervision to the business of the railroad companies, and fixes the time on and after which it shall be enforced. The provision is not that all examinations required by the act shall be at their expense, but that "examinations and re-examinations at the expense of the railroad companies shall be required under this law." The intention is to establish the manner of supervision, and the mode of enforcement, by examinations and re-examinations, and by imposing penalties for employing persons who do not possess the requisite certificate of fitness. The penalty is not incurred by mere contractual employment, without actual service.

But it must be conceded that the statute, fairly construed, operates to impose upon the companies the expense of examining those persons who were in their employment on and after the 1st day of June, without reference to their continuation in the service after the 1st day of the succeeding August, which time was allowed such employes to procure the requisite certificate. It was so construed in Baldwin v. Kouns, 81 Ala. 272, 2 South. Rep. 638. As has been said, its constitutionality can be maintained only so far as it is a legitimate exercise of the police power. Neither the persons then actually employed, nor the companies, incur the penalties prescribed by the statute until after the expiration of the time allowed such employes to obtain the certificates. Until then the supervision, as to those who were in the employment of the companies, does not commence; until then compulsory examinations of such persons cannot be made. Under the police power, the expense of no examination can be imposed upon the companies, except of the agencies used in carrying on their business when it becomes their duty to submit to supervision, and examinations may be compelled. So far as the statute requires examinations to be made prior to the 1st of August, 1887, at the forced expense of the companies, of persons in their employ on the 1st day of June preceding, without reference to their continuation in service after the 1st of August, it goes beyond a legitimate and constitutional exercise of the police power. My brothers differ from this conclusion, holding the provision of the statute under consideration unconstitutional, as not being a legitimate exercise of the police power. They express their own views. I concur in the reversal of the judgment, on the ground that the complaint does not aver facts sufficient to show liability of defendant for the examinations had between the 1st day of June and August.

Reversed and remanded,

EAST BIRMINGHAM LAND CO. et al. v. DENNIS.

(Supreme Court of Alabama. January 15, 18:9.)

NEGOTIABLE INSTRUMENTS-STOCK CERTIFICATE-INNOCENT PURCHASER-CUSTOM. A certificate of shares of stock is not a negotiable instrument, any usage among stock-brokers to the contrary notwithstanding; and an innocent purchaser for value of such a certificate, indorsed in blank by the owner, and stolen from him without negligence on his part, acquires no title thereto.1

Appeal from city court of Birmingham; H. A. SHARPE, Judge.

The bill in this case was filed by J F Dennis against J P. Mudd, and the East Birmingham Land Company, a private corporation, and sought to compel the transfer, on the books of the corporation, of a certificate for 10 shares of stock, of which the complainant claimed to be the owner, and to compel the delivery of the certificate to him by said Mudd, who had the possession of said certificate, and claimed the ownership of it. The certificate was issued in the name of A. R. Dearborn, and was indorsed by him in blank. The complainant claimed that he had bought the certificate, with the blank indorsement thereon, from a holder who had acquired it by purchase from said Dearborn; and that it was lost by him, or stolen from him, without fault on his part. Mudd purchased the certificate for value from Wilson, Sage & Clark, stock-brokers in Birmingham; and, while denying complainant's ownership, claimed that he acquired a good title by the custom and usage of brokers and merchants in Birmingham. A decree pro confesso was taken against the corporation. On final hearing on pleadings and proof, the court rendered a decree for the complainant, and this decree is now assigned as error by each of the defendants separately.

S. D. Weakley, for appellants. W. R. Houghton, for appellee.

SOMERVILLE, J. We concur in the conclusion reached by the judge of the city court, that the appellee, Dennis, complainant in the bill, is the owner of the 10 shares of stock which are the subject of litigation in the present suit. The testimony satisfactorily proves that the certificate of stock, indorsed in blank by Dearborn, who was the owner on the books of the defendant corporation, was the property of the appellee, and was taken or stolen from his possession without any negligence on his part whatever, several months before it was purchased by the defendant Mudd, who innocently bought and paid value for it some time in March, 1888. The only question is whether Mudd, who paid full value for this stock, without notice of the complainant's claim to it, acquired a title superior to that of complainant. The established rule is that no person can ordinarily be deprived of his ownership of property save by his own consent or his negligence. The only exception to this rule is the case of a bona fide purchaser for value of negotiable paper. We have no reference, of course, to the taking of property for public uses by judicial condemnation, which may be done without the owner's consent.

It cannot be contended, with any degree of plausibility, that, under the facts of this case, the complainant was guilty of negligence or the want of ordinary care in the custody of the certificate. He kept it in a box in the vault of a banking-house, whence it was abstracted by some unknown person, apparently without any fault on his part. Nor does any question arise involving the rights of a subsequent bona fide purchaser of stock from one shown to be the owner on the corporate books, who has already made a prior

In general, as to what instruments are negotiable, see McClelland v. Railroad Co., (N. Y.) 18 N. E. Rep. 237, and note; Chapman v. Wight, (Me.) 12 Atl. Rep. 546, and note; Wright v. Trover, (Mich.) 41 N. W. Rep. and cases cited.

unregistered transfer of it to another purchaser. All such transfers made by the true owner, and not registered on the books of the corporation within 15 days, are declared by statute to be "void as to bona fide creditors or purchasers without notice." Code 1886, § 1671, Fisher v. Jones, 82 Ala. 117, 3 South. Rep. 13. If the defendant Mudd had claimed by a subsequent purchase from Dearborn, the owner of the stock on the corporate books, this question would arise. But he does not so claim, his title being derived through the complainant, Dennis, himself, by two or more intermediate transferees, the first of whom was a fraudulent holder without title.

Whether Mudd's title to the stock, therefore, is superior to that of Dennis, depends on whether a certificate of stock, indorsed in blank by the owner, is to be treated as negotiable paper. The rule is well settled that a bona fide purchaser of a negotiable bill, bond, or note, although he buys from a thief, acquires a good title, if he pays value for it, without notice of the infirmity of his vendor's title.

The authorities are clear in support of the view that a certificate of corporate shares of stock, in the ordinary form, is not negotiable paper; and that a purchaser of such certificate, although indorsed in blank by the owner, where no question arises under the registration laws, obtains no better title to the stock than his vendor had, in the absence of all negligence on the part of the owner, or his authority to make the sale.

This question arose and was decided by the New York court of appeals in Bank v. Railroad Co., (1856,) 13 N. Y. 599. It was there held that such a certificate does not partake of the character of a negotiable instrument, and that a bona fide assignee, with full power to transfer the stock, takes the certificate subject to the equities which existed against his assignor. Such certificates, said COMSTOCK, J., “contain no words of negotiability. They declare simply that the person named is entitled to certain shares of stock. They do not, like negotiable instruments, run to the bearer or order of the party to whom they are given." They were said to be in some respects like a bill of lading or warehouse receipt, being "the representation of property existing under certain conditions, and the documentary evidence of title thereto." The most that can be said is that all such instruments possess a sort of quasi negotiability, dependent on the custom of merchants and the convenience of trade. They are not, in the matter of transferability, protected strictly as negotiable paper.

În Shaw v. Spencer, 100 Mass. 382, it was also decided that a certificate of corporate stock, transferred in blank on its back, was clearly not a negotiable instrument. "No commercial usage,” it was said, “could give to such an instrument the attribute of negotiability. However many intermediate hands it may pass through, whoever would obtain a new certificate in his own name must fill out the blanks * * * so as to derive title to himself directly from the last recorded stockholder, who is the only recognized and legal owner of the shares." The case of Sewall v. Water-Power Co., 4 Allen, 282; decided by the same court a few years before, is referred to as a precedent in support of this conclusion.

The precise point in the present case was also decided in Barstow v. Mining Co., 64 Cal. 388, 1 Pac. Rep. 349, where it was expressly held that a bona fide purchaser of stock standing on the company's books in the name of the former owner, regularly indorsed by him, and stolen from the present owner without his fault, gets no title. The decision was based on the fact that such certificates are not negotiable instruments, but simply muniments of title, and evidences of the holder's right to a given share in the property and franchises of the corporation. It was observed, in regard to the matter of negligence, as follows: "But if the purchaser from one who has not the title, and has no authority to sell, relies for his protection on the negligence of the true owner, he must show that such negligence was the proximate cause of the deceit."