Geyser-Marion Gold-Min. Co. v. Stark

Citations

• 106 F. 558
• 1901 U.S. App. LEXIS 3595

Syllabus

<p>1. Corporation must Use Diligence to Make Authorized and Prevent Unauthorized Transfers of Stocks.</p> <p>It is the duty of every corporation to use reasonable diligence in each case to ascertain whether or not a transfer of stock requested is duly authorized by the former owner, to make transfers so authorized, and to prevent those unauthorized; and for every breach of this duty it is liable to the injured party for the damage it inflicts.</p> <p>2. Trustee Presumptively Has no Power of Sale.</p> <p>The legal presumption is that a trustee has no power to sell or transfer the subject of his trust.</p> <p>3. Record of Title in Trustee — Notice.</p> <p>A corporate record and certificate of ownership of stock by A. B., trustee, is notice to the corporation that he holds it, without the power of disposition, for some cestui que trust.</p> <p>4. Transfer without Inquiry for Assent of Cestui Que Trust TSmwligenck.</p> <p>It is actionable negligence for the corporation to cancel the certificate and transfer the stock on the signature of the trustee to the assignment, without any inquiry for the cestui que trust, or for his assent to the transfer.</p> <p>5. Local Custom Violative of Law Inoperative..</p> <p>A local custom of dealers in a place where a sale is made, which violates a well-established principle of law, and changes the nature and obligations of the relation of two parties to each other, is inoperative unless known and assented to by both.</p> <p>(Syllabus by the Court.)</p>