not otherwise estopped, or if he has not known of the transfer to himself, in neither case could he be held liable. The same section 5152 of the Revised Statutes of the United States makes the trust estate liable. Where the deceased died, being a stockholder, it would seem to be certain that, under this statute, the executor would be liable as an executor out of the funds of the estate. It has been held that the executor would be so liable even though the deceased in his life-time had made a transfer but the transfer had not been registered. But where the executor has made a transfer of the bequeathed stock to the devisee the estate can no longer be held liable. But a legatee who has received a legacy ordered to be paid to her before but actually delivered after the insolvency of the bank is liable on the testator's shares to the amount of the assets received; but the same case holds that in an action to charge the legatee with assets, the legatee would not be held where the delivery of the legacy was made before the liability of the estate as stockholder was incurred. In the case of a guardianship under a state statute it was held that the estate of those minors who had reached majority at the time of the decree could not be held in an action against the guardian. § 52. Right of stockholder to transfer.- The right of the stockholder to have a transfer made on the books is absolute, unless the bank has a lawful claim on the shares, or fraud or estoppel. Lucas v. Coe, 86 Fed. R. 972. But see Kerr v. Urie, 37 Atl. R. 789. 2 See 3 Thompson on Corp., secs. 3194, 3198; Lucas v. Coe, 86 Fed. R. 972. 3 See also Stedman v. Eveleth, 6 Met. 114; Mauser v. Pratt, 101 Mass. 60; Sayles v. Bates, 15 R. L. 342, as to state statutes. 4 Richmond v. Irons, 121 U. S. 27; Parker v. Robinson, 71 Fed. R. 256, 33 U. S. App. 368; Irons v. Manuf. Nat. Bank, 21 Fed. R. 197; Wickham v. Hull, 60 Fed. R. 326. Davis v. Weed, Fed. Cas. No. 3658. 6 Blackmore v. Woodward, 71 Fed. R. 321, 18 C. C. A. 57; Witters v. Sowles, 32 Fed. R. 130. Where the executor failed to make a transfer to himself he was held liable as executor. Baker v. Beach, 85 Fed. R. 836. 7 Witters v. Sowles, supra. 9 Mansur v. Pratt, 101 Mass. 60. unless the law forbids the transfer, or unless the parties have by agreement made the stock not transferable. The bank may have an opportunity to satisfy itself of the genuineness of the transfer and of the capacity of the parties. The bank is liable for permitting a transfer upon a forged power of attorney or upon one executed by a person not having the capacity, if the bank has notice of the want of capacity.3 The usual mode of transfer is by indorsement of the certificate by signing the power of attorney usually printed on the back of the certificate. The usual practice recognized as valid is to sign in blank, and the transferee fills in the power of attorney. The transfer is complete when made on the books whether a certificate be issued or not." If the articles of agreement permit a transfer and no legal prohibition thereof exists, the bank cannot require its own claim to be paid as preliminary to a transfer. If a transfer be enjoined by a proper court the bank cannot permit it. The national banks are not governed by the laws of the state as to transfers.8 § 53. Unrecorded transfers.- No question causes more difficulty than the effect of a transfer not entered on the bank's stock book, but completed as between the parties by indorsement and delivery of the certificate. In the absence 1 Purchase v. New York Ex. Bank, 3 Robt. 164; Helm v. Swiggett, 12 Ind. 194; Byne v. Union Bank, 9 Robt. 433; Johnson v. Laflin, 5 Dill. 65, 103 U. S. 800. wright, 22 Wend. 348; Lee v. Citizens' Bank, 5 Ohio Dec. 21. 5 Agricultural Bank v. Wilson, 24 Me. 273; Keyser v. Hitz, 133 U. S. 138; National Bank v. Watsontown 2 Chew v. Bank of Baltimore, 14 Bank, 105 U. S. 217. Md. 299. 3 Chew v. Bank of Baltimore, 14 Md. 299; Pollock v. National Bank, 7 N. Y. 274; Peck v. Bank of America, 16 R. I. 710. It has been held that a bank is not liable for a guardian's transfer in fraud of his ward's rights. Bank of Vir. v. Craig, 6 Leigh, 399. 6 Bank of Attica v. Manuf. & Trad. Bank, 20 N. Y. 501. The same rule applies to national banks. Bullard v. Bank, 18 Wall. 589, overruling several circuit courts. 7 Purchase v. New York Ex. Bank, 3 Robt. 164. 8 Scott v. Pequonnock Nat. Bank, 15 Fed. R. 494. Contra, Hobbs v. • Commercial Bank V. Cart- Western Nat. Bank, Fed. Cas. 6551a. of any regulation as to recording transfers, the transfer is complete when completed between the parties. But where the statute provides for a registration of the transfer on the books of the company, as in the national bank act, or when the by-laws provide for a registration, or, what is the same thing,' when the certificates on their face are made transferable on the books of the company, it is conceded that as between the parties a complete title passes by an unrecorded transfer. On principle the legal title would not pass until the entry was recorded, because of the effect of the provision for registering. An execution or attachment lien put upon the shares standing in the name of the transferror would, when completed by a sale, relate back to the date of the levy. And the question is, would it take precedence of the rights of the unrecorded transferee? Now it is conceded that the certificates are not negotiable under the law merchant by all the well-considered authorities. Therefore the attachment or execution lien being entered on the books, when completed by sale makes a legal title as of the date of the levy, when the prior transfer being unrecorded the transferee had but an equitable title. The purchaser at the execution sale becomes a bona fide purchaser for value if the creditor and the bank had no notice of the unrecorded transfer at the date of the levy. If the creditor or the bank had notice of the equity of the unrecorded transferee, neither the creditor as purchaser at the sale nor any other purchaser at the sale would be a bona fide purchaser. Assuming, then, that the creditor and the bank had no notice, the purchaser obtains a legal title by the sale, which legal title is that of a bona fide purchaser. The conclusion follows that when equities are equal, as they are in case of bona fide purchasers, the legal title will prevail. There is no escape, then, from the 1 State v. McIver, 2 S. C. 25; Mechanics' Bank. Asso. v. Mariposa Co., 3 Robt. 395. In this case it is amusing to compare the brief of the attorney for the defendant, Wm. M. Evarts, with the opinion of the court. The latter is a verbatim copy of the former, but there are no quotation marks. 2 Farmers' Gold Bank v. Wilson, 58 Cal. 600; Telford Co. v. Gerhab, 13 Atl. R. 90. conclusion, on principle, that a levy made without notice of an unrecorded transfer, either by the creditor or the bank, gives a good title as against an unrecorded transfer, where the statute does not make the legal and equitable title in bank stock to pass upon an unrecorded transfer, but where a transfer to complete the title is provided for by the statute or a by-law or by the certificates. But many courts have refused to recognize this plain conclusion out of a desire to make corporate stock more readily transferable. So that two very competent text writers have taken absolutely contrary ground upon this question. The author believes the one right in his conclusion as a legal proposition, although he does not state the true grounds; but the weight of the authority, or dictum at least, seems to be with the other. The cases relating to banks will be found stated in the note appended below. A transfer, of course, after a levy would confer no title on the transferee. The corporation has sometimes a difficult duty to perform when a certificate for shares is outstanding and the purchaser presents a certificate of sale under an execution. Unless the corporate 3 See 2 Thompson on Corporations, secs. 2397, 2409-2421; also 30 Am. Law Rev. 223, and 2 Cook on Corporations, secs. 486, 491; also see 12 Ry. & Corp. L. J. 145. 4 In favor of the attachment or execution: Koons v. First Nat. Bank, 89 Ind. 178, semble; J ohnson v. Laflin, 103 U. S. 800, semble. National Bank v. Watsontown Bank, 105 U. S. 217, and Union Bank v. Laird, 2 Wheat. 390, recognize legal title passes by transfer on books. Under prohibitory statute see Pendergast v. Bank of Stockton, 2 Sawy. 116; Skowhegan Bank v. Cutter, 49 Me.315. See also Fort Mad. ison Co. v. Batavian Bank, 71 Iowa, 270; Comm. Nat. Bank v. Farm ers' Bank, 82 Iowa, 192; Dutton v. Connecticut Bank, 13 Conn. 493; 3 Fisher v. Essex Bank, 5 Gray, 373; officers know that the certificate is still in the hands of the judgment debtor, the corporation acts at its peril in making a transfer. Although in the particular locality the execution sale gives a good title against the unregistered transferee, yet the corporate officers cannot know whether the creditor had notice of the transfer, even though they know that the corporation has had no notice. The situation is still worse where the unregistered transfer gives both a legal and equitable title. The corporation can only protect itself by refusing to transfer except under a judgment of the court. But the party demanding the transfer may sue the corporation in conversion instead of in equity or mandamus. If the stock is fluctating in value the corporation is exposed to a further peril of responding for the value of the stock. On principle it would seem that a corporation which is prohibited by law from, acquiring its own stock could not be sued in trover, because the satisfaction of the trover judg ment transfers title in the stock to the corporation. Yet this probably is not the law, since the corporation is always liable in tort, whether the act be prohibited by law or not. If the transfer be made under order of a competent court, the corporation is released from liability. But this rule is not in accordance with the general principle of law that a judgment in personam binds only the parties thereto. The corporation can always be protected in some measure by the exaction of security, which the court has the power to require. But in view of these difficulties, as well as of the fact that the validity of an unregistered transfer opens up a wide field for perjury (by enabling a party to make a transfer after the levy and then antedating it in order to beat the levy), the policy, whether put in the form of statutes or decisions, of recognizing unregistered transfers as conveying more than an equitable title, is exceedingly questionable.' 6 Friedlander v. Slaughter House Co., 31 La. Ann. 523. See 1 Cook on Corp., secs. 359, 388: 2 Cook on Corp., sec. 489. See also Smith v. Northampton Bank, 4 Cush. 1; Chapman v. New Orleans Gas Co., 4 La. Ann. 153. 7 It will be found that in many of the cases courts have paid little attention to fundamental principles. |