Otis v. Gardner

Citations

• 105 Ill. 436
• 1883 Ill. LEXIS 105

Syllabus

<p>1. Assignment—of stock in corporation—when passes equitable title. The charter of a private corporation provided that the stock of the company should be transferable in such manner as the directors might determine, and the by-laws of the company provided that the secretary should keep a book upon which all transfers of stock should be made by the holder or holders, or by his or their attorney, duly constituted, in writing. The legal holder of certificates of stock in the company, on a loan thereof, transferred and delivered the same, with a blank assignment and power of attorney indorsed thereon, to the borrower, which power of attorney authorized the assignee to have the stock transferred on the books of the company, but no such transfer was ever made on the books. These certificates,, in this ’ condition, were transferred by the borrower as collateral security for.a note given for the loan of money by a third person, which note was indorsed by the borrower of the certificates: Held, that while the legal title never passed by the transfer of the certificates, for want of an assignment on the books of the company, yet, after the pledge by the holder under such blank indorsement to an innocent party, without notice of the rights of the original holder, the pledgee acquired an equitable title to the same, as a security for the money loaned by him, of which he could not be divested by the original owner or his administrator.</p> <p>2. Same—assignor can have no relief against equitable transfer of stock. A court of equity will give the assignor no relief against the bona fide sale of stock in a corporation merely for the reason that the assignee may have failed to have the stock transferred to him upon the books of the corporation, as required by law. It is .no concern of the assignor whether the assignee ever becomes invested with the legal title, or the right of membership in the corporation. Such stock may be regarded as a chose in action; the equitable title of w