People v. California Safe Deposit & Trust Co.

Insolvent Corporation—Process of Liquidation—Right of Stockholders to Assign Shares—Right of Registry by Assignee.— There appears to be no rule of law nor any reason which precludes an owner of stock in an insolvent corporation, which is in process of liquidation, from transferring the same to whomsoever he pleases. The law embodied in section 324 of the Civil Code expressly provides that shares of stock, to evidence which certificates are issued, constitute personal property, and may be transferred. Though shares of stock in an insolvent corporation may possess little, if any, intrinsic value, it is nevertheless property, and its transfer carries with it the rights that would accrue to the original owner thereof, and he has the right to be registered in the stock book of the corporation as the owner of the stock so transferred to him.

Id.—Stockholders Unaffected by Injunction Against the Corporation and Officers.—The stockholders of the corporation, as such, are unaffected by an injunction against the insolvent corporation and its officers to prevent the same from carrying on its business, and such injunction cannot preclude a transfer o'f stock therein by such stockholders or affect its validity, subject only to the individual liability of a stockholder for debts of the corporation contracted during his ownership of the stock.

Id.—Remedy to Compel Entry of Stock—Parties—Corporation— Entry by Receiver—Custody of Books.—The stockholder to whom the stock has been transferred may properly proceed to compel the entry of the stock upon the books of the corporation by making the corporation a party defendant, and there being no directors in charge of the corporation, they need not be made parties, and as the receiver is the legal custodian of all the books of the corporation, he may be made a party defendant, and commanded to make the proper entry of the transfer of the stock upon the books of the corporation.