H. Seeligson & Co. v. Brown

Citations

• 61 Tex. 114
• 1884 Tex. LEXIS 56

Syllabus

<p>1-, TbansfeB of stock — GABNISHMENT—Attachment.— A by-law of a private corporation provided that stock of the corporation could only be transferred upon the surrender of the certificate of stock to the president or secretary of the company, “either of whom shall see that the same is canceled, by writing ‘ canceled ’ prominently over the face of the certificate, and erasing the name of the president, before issuing a new certificate to be filed away.” The statute makes no such provision as a test of ownership. Stock without being transferred on the company’s books was delivered by the original owner to B. as collateral security, with the owner’s name signed thereon to a blank transfer. In a suit against the original owner by an attaching creditor, B. was garnished. Held:</p> <p>(1) By the delivery and transfer of the certificates of stock B. became the owner of them, and the original owner was divested of any right or interest in them, so long as the debt they were intended to secure remained unpaid.</p> <p>(2) The by-laws regulating the transfer of stock were merely intended for the protection of the interests of the corporation, and no effect should be-given to them further than to attain that object.</p> <p>(3) Such -regulations are not restrictive of the stockholder’s right to transfer his stock at pleasure, subject to the charter rights of the corporation, though the purchaser cannot claim a certificate of, or á dividend upon, the shares, unless he first applies for a transfer according to the charter and by-laws.</p> <p>(4) Such transfer is valid as against an attaching creditor of the vendor, who attaches the shares before he or the corporation has notice through its-officers. Following Angell & Ames on Corporations, 11th ed., and cases cited in the opinion.</p> <p>(5) A judgment ordering the shares to be sold as under execution, and the ' proceeds to be paid first to B. to the extent of his debt, and the overplus, if any, to be applied to the judgment rend