Craig v. Hesperia Land & Water Co.

Citations

• 113 Cal. 7
• 45 P. 10

Syllabus

<p>Corporations—Transfer of Certificates of Stock—Delinquent Assessments—Lien upon Shares—Identity of Stock—Transfers Subject to Lien.—-A corporation has a lien upon the shares of stock for the payment of delinquent assessments thereon; but it has no lien upon the .certificates of stock, which are merely evidence of ownership of the shares, and has no right to prevent a transfer of such certificates, on account of a delinquent assessment upon the shares; but the shares remain subject to the lien, and the new owner takes subject thereto; nor is the identity of the stock affected by the transfer; and the corporation can enforce its delinquent assessment upon the shares liable therefor, no matter how many transfers have been made subsequent to the assessment.</p> <p>Id.—Certificate of Stock not Negotiable — Transfer Subject to Equities — Bona Fide Purchaser not Protected.—A certificate of stock is not a negotiable instrument; and, in analogy to other non-negotiable instruments, a purchaser would take subject to all equities in favor of the corporation; nor does the fact that the purchaser did not know of a delinquent assessment at the time of demanding the transfer affect the validity of the assessment, nor the liability of the stock therefor.</p> <p>Id.—Conversion of Stock—Refusal of Transfer—Liability of Corporation— Evidence of Value—Delinquent Assessments.—A corporation is liable for a conversion of stock which it refuses to transfer on the books of the corporation to a purchaser thereof; and the existence of unpaid delinquent assessments upon the stock is no defense to an action for such conversion, though proof of them is admissible as affecting the value of the stock,</p>