such fact be shown by the corporation records. It is provable by parol.

The court says, "To constitute ownership, it is not necessary that the stock should be paid for. The corporation may give credit for its stock. It is not necessary that certificates should be issued. They only constitute proof of property which may exist without them."

When a corporation agrees that a person shall be entitled to share in its capital, to be paid for in a manner agreed upon, which person has agreed to take any pay for them accordingly, the latter becomes the owner by valid contract made upon the valuable considerations.

The court further says:

"It is insisted, that parol evidence cannot be received, to prove that a person has become the owner of shares; that the records or books of the corporation are the only legal evidence of that fact; and the case of Stanley v. Stanley, 26 Me. 191, is relied upon as having so decided. That case decided that the transfer of stock from one person to another is by statute required to be entered upon the books of the corporation, before it can be effectual to discharge or incur certain liabilities, and that the transfer can be proved only by the books; not that a title to stock originally acquired from the corporation should be so proved.

"The decision upon the facts, as well as the law, being submitted, the court cannot but conclude that the testimony is sufficient to prove that the defendant was an owner of ten shares of the stock, when the debts on which the judgment was founded were contracted by the corporation."

§ 53. Purchase and transfer of stock.

Stock in a corporation may be acquired by subscription, by purchase, by gift, or under a judicial sale by decree of the

court.

A stockholder acquiring stock has an unqualified and immediate right to have the stock transferred to him, upon the books of the corporation.

The entry of the transfer on the books, constitutes the act, and from the date of such entry the bank is estopped from setting up any claim or lien against the stock.

The bank may refuse to enter the transfer, if it has a lawful claim or lien upon the stock, or if it has been enjoined by a court of competent jurisdiction.

The endorsement in blank by the owner of the certificate entitles the holder to fill in the blank, and presentation of the same to the bank demanding that an entry of the transfer be made upon the record, and a new certificate issued, establishes his right as a stockholder from the time of such demand, though the bank does not at the time make the transfer or issue to him a new certificate.

A notice given to the bank coupled with a request and tender of a certificate properly indorsed, demanding a transfer of the stock, operates as a release of the stockholder from further liability.

If the bank refuses to enter the transfer on demand, without sufficient cause, it will be liable for damages to the party injured.

Where a certificate of stock, by the conditions set out on the face of the instrument, is made transferable only on the books of the corporation, the title as between the parties (the seller and the purchaser), passes on delivery of the certificate: and the transfer on the book of the corporation is not an essential act to pass the title; but it is very important to the parties that the transfer should be made at the time of sale and delivery, in order that the exact legal liability of the parties may be fixed.

Where the certificate provides that a transfer shall take place only by a cancellation of the certificate, and entry on the books of the corporation, until such entry is made or notice given to the bank, the stock may be attached, in the name of the party appearing as the owner, upon the books of the corporation.

§ 54. Right of stockholder.

Entitled to notice of meetings.

Where the time and place of corporate meeting are fixed by the charter, or the by-laws, this is held to be sufficient notice to the stockholders and no further notice is necessary unless the charter or by-laws require it."

12 Warner v. Mower, 11 Vt. 385, 396; State v. Bonnell, 35 Ohio State,

12

10-15; Morrill v. Little Falls Mfg. Co., 53 Minn. 371.

Where no sufficient notice is given by charter, or by statute, or by a by-law, of stockholders' meetings, they are entitled to an express notice of every such corporate meeting.'

55. Notice may be waived.

13

A stockholder may waive his right to have a notice of a corporate meeting served upon him.

When all the stockholders are present or subsequently approve of and ratify an action of the corporation, the notice is waived and the action becomes valid.14

A stockholder admitting the validity of a claim against the corporation, which claim is held to be valid, though the meeting was not called in accordance with the statute, it not appearing that any stockholder has ever objected, the meeting is held to be valid.15

All who appear at a meeting, wherever held, or however defectively the members are notified, will be bound by the proceedings of those who appear and participate in it without dissent.16

§ 56. The right to vote.

The general rule is that shareholders who are registered as such on the books of the corporation have the right to vote.17

Corporation cannot vote its own stock.

A corporation holding or acquiring its own stock cannot be voted the same at a corporate election. The statute may regulate the privilege. 18

Pledgee cannot vote stock.

Where stock has been pledged to the corporation, or some one in trust for the corporation, neither the bank nor the trustee can vote the stock.19

13 Wiggin v. Free Will Baptist Church, 49 Mass. 301.

14 Stutz v. Handley, 41 Fed. Rep. 531; Handley v. Stutz, 139 U. S. 417.

15 Clark v. Warwick, etc., 174 Mass. 434.

16 Handley r. Stutz, 139 U. S. 417; Benbon v. Cook, 115 N. C. 324; People v. Peck, 11 Wend. 604.

17 People v. Robinson, 64 Cal. 373,

1 Pac. 156; Morrill v. Little Falls Mfg. Co., 53 Minn. 371, 55 N. W. 547; Matter of Glen Salt Co., 153 N. Y. 688, 48 N. E. 1104; People v. Devin, 17 Ill. 84.

18 McNeely r. Woodruff, 13 N. J. L. 352; Am. Ry. Co. v. Haven, 101 Mass. 398, 3 Am. Rep. 377.

19 Monsseaux v. Urquhart, 19 La.

Ann. 482.

In the absence of a statute a shareholder who is delinquent upon an assessment against his stock does not lose his right to

The right to vote by proxy is generally a right authorized and fixed by statute.21

A non-resident shareholder cannot vote by proxy where the right to vote is given by the statute to citizen shareholders.22

§ 58. Right of stockholder to inspect records of corporation. The right to examine, at a proper time and for proper purposes, the records, books and papers of a corporation, is an incident and privilege which goes with the ownership of stock in a corporation.23

Where the statute grants the privilege to the stockholder to inspect the records, the motive cannot be inquired into. The shareholder need not give any reason to the officers for demanding the privilege.24

The right to make an examination of the books is not confined to a personal inspection by the stockholder himself, but may be made by his agent, attorney, or expert."

20 Kiman r. Sullivan Co. Club, 26 N. Y. App. 213; Price t. Holcomb, 89 Iowa, 123, 56 N. W. 407; U. S. v. Barry, 36 Fed. Rep. 246.

21 C. C. Cal., § 303; Market St. Ry. Co. . Hellman, 107 Cal. 571, 42 Pac. 225.

22 C. C. Cal., § 326; Graham v. Oviatt, 58 Cal. 428; In re Barker, 6 Wend. (N. Y.) 509.

23 Mathews r. McClaughry, 83 Ill. App. 224; Ellsworth v. Dorwart, 95 Iowa, 108, 63 N. W. 588, 58 Am. St. Rep. 427, under Ia. Code, § 1279; Legendre r. New Orleans Brewing Assoc., 45 La. Ann. 669, 12 So. 837, 40 Am. St. Rep. 243; Cockburn . Union Bank, 13 La. Ann., 289; In re Steinway, 159 N. Y. 250, 53 N. E. 1103, 45 L. R. A. 461, affirming 31 N. Y. App. Div. 70, 52 N. Y. Suppl. 343; Commonwealth v. Phoenix Iron Co., 105 Pa. St. 111, 51 Am. Rep. 184, citing State v. Bienville Oil Works, 28 La. Ann. 204; Angell & A. Corp., $

25

681; Grant Corp. 311; 2 Phillips Ev. 313; Redfield Ry. 227; Lyon r. American Screw Co., 16 R. I. 472, 17 Atl. 61; State v. Pac. Brewing, etc., Co., 21 Wash. 451, 58 Pac. 584, 47 L. R. A. 208; U. S. Ranger . Champion Cotton Press Co., 51 Fed. 61.

24 Foster v. White, 86 Ala. 467; State r. St. Louis, etc., Ry. Co., 29 Mo. App. 301; Mitchell . Rubber Reclaiming Co. (C. H. 1892), 24 Atl. 407; Cincinnati Volksblatt Co. t. Hoffmeister, 62 Ohio State 189, 56 N. E. 1033, 78 Am. St. Rep. 707, Lyon v. Am. Screw Co., 16 R. I. 472.

25 Foster . White, 86 Ala. 467; Ballin r. First, 55 Ga. 546; Ellsworth v. Dorwart, 95 Ia. 108, 63 N. W. 588, 58 Am. St. Rep. 427; State r. Sportsman Park Ass'n, 29 Mo. App. 326; People v. Nassau Ferry Co., 86 Hun 128, 33 N. Y. Suppl. 244, 66 N. Y. St. 801. Contrary, see Clark v. Eastern Bldg., etc., Ass'n, 89 Fed. Rep. 779, which holds that a corpo

A shareholder who is not registered on the books of the corporation has no right to make an examination of the records.26

§ 59. Liability of stockholder to creditors of corporation. General rule.

The general rule at common law is that shareholders in a joint stock corporation are not liable for debts, except to make good the amount due to the corporation for their shares.27

§ 60. Liability cannot be enlarged by a by-law.

By unanimous consent the liability of the stockholder may be enlarged beyond the liability created by law, but such a liability must be unanimous. A by-law or resolution of the corporation cannot create a liability beyond that fixed by the

§ 61. When stockholder liable to corporation, liable also to creditors.

General rule.

The general rule is that a stockholder, if not liable to the corporation, is not liable to a creditor, except where the Constitution or statute of the State otherwise provides.2

29

In the case of Potts v. Wallace, 32 Fed. Rep. 272, it is held that where a subscriber to stock tendered the amount of his subscription to the corporation while it was solvent, and demanded a certificate which was refused him, he was not liable to the assignee in insolvency of the corporation.

§ 62. Liability beyond subscription.

A stockholder has no liability beyond the par value of the stock owned by him, unless such a liability is created by the constitution, the statute, charter, or by contract.

ration will not be required to permit an examination of its books at the request of stockholder who alleges misconduct.

26 Matter of Reiss, 30 Misc. (N. Y.) 234; 62 N. Y Suppl. 145.

27 Toner . Fulkerson, 125 Ind. 224, 25 N. E. 218: Spense v. Iowa, etc., Constr. Co., 36 Iowa 407; Wood t. Pierce, 2 Disn. 411; Jackson . Meek, 87 Tenn. 69, 9 S. W. 225, 10 Am. St. Rep. 620; Bank of N. A. v.

Rindge, 57 Fed. Rep. 279; Smith t.
Londoner, 5 Colo. 365.

28 Reid r. Eatonton Mfg. Co., 40 Ga. 98, 2 Am. Rep. 563; Flint . Pierce, 99 Mass. 68, 96 Am. Dec. 691.

29 Deadwood First Nat. Bk. v. Custin Minerva Con. Min. Co., 42 Minn. 327, 44 N. W. 198, 18 Am. St. Rep. 510; Union Sav. Ass'n r. Seigelman, 92 Mo. 635, 15 S. W. 630; Burgess r. Seligman, 107 U. S. 20.