Weston v. Bear River

Murray, C. J:, delivered the opinion of the Court. Bryan, J., concurred.

Heydenfeldt, J., dissented.

The twelfth section of the Act concerning Corporations, passed 22d April, 1850, provides, that " Whenever the capital stock of any cor[187]poration is divided into shares, and certificates thereof are issued, such shares may be transferred by endorsement and delivery of the certificates thereof, such endorsement being by the signature of the proprietor or his attorney, or legal representative; but such transfer shall not be valid, except between the parties thereto, until the same shall have been so entered on the books of the corporation, as to show the names of the parties by and to whom transferred, the number and designation of the shares, and the date of the transfer.” And section one hundred and forty-four of the same Act is as follows: “ It shall be the duty of the trustees of every such corporation or company to cause a book to be kept by the treasurer or clerk thereof, containing the names of persons, alphabetically arranged, who are, or shall within six years have been, stockholders of such company, and showing their places of residence, the number of shares of stock held by them respectively, and the time when they respectively became the owners of such shares, and the amount of stock actually paid in, &c.; and no transfer of stock shall be valid for any purpose whatever, except to render the person to whom it shall be transferred liable for the debts of the company, according to the provisions of this Act, until it shall be entered therein as required by this section, by an entry showing to and from whom transferred.”

In the present case, it is contended that an assignment, by mere deivery, of the certificates of stock is sufficient to defeat the rights of an attaching creditor. The position assumed by the respondents’ counsel is, that the sections of the Act above referred to were intended for the protection and government of the incorporation, and cannot be extended to transfers between third parties. That the person to whom the certificates have been delivered has an equitable interest in the stock, which cannot be divested by any subsequent proceedings. In support of this position, a number of authorities have been cited, some of which I propose briefly to review.

In the case of the United States v. Cutts, 1 Sumner, 138, the language of the Act was, that the stock shall be transferrable only on the books of the treasurer, &c.” In commenting on this statute, the Court said, “ It seems, that the true interpretation of the statute is, that, so far as the United States and the proprietors are concerned, no transfer is to be considered as complete and perfect, so as to pass the legal