Whitfield v. Nonpariel Consolidated Copper Co.

Citations

• 67 Wash. 286
• 123 P. 1078
• 1912 Wash. LEXIS 1165

Syllabus

<p>Corporations — Capital Stock — Transfer—Recording—Necessity —Wrongfully Issued Stock — Rights of Innocent Purchasers. Under Rem. & Bal. Code, § 3693, providing that no transfer of corporate stock shall be valid except between the parties thereto until the same shall have been entered on the books of the company, a certificate for stock fair on its face, but wrongfully and fraudulently issued by officers of the corporation, is not valid or binding on the corporation in the hands of an innocent purchaser until it has been entered on the books of the company, the statute being for the protection of the company and the transfer of the stock being ineffectual until registered (Gose, J., dissenting).</p> <p>Corporations — Capital Stock — Wrongful Issuance — Liability of Company- — Officers-—Personal Dealings. Where the president of a corporation, in order to secure his personal debt, turned over a certificate for corporate stock that he had wrongfully and fraudulently issued, the assignee has no claim against the corporation as an innocent holder, either to compel the transfer of the stock on the books of the company or for its value; the company not being liable for acts of its officers in dealing with stock for their personal benefit.</p> <p>Corporations — Capital Stock — Actions—Cancellation of Stock —Parties—Innocent Holders. Under Rem. & Bal. Code, § 3693, making registration on the books of the company essential to a valid transfer of corporate stock except as between the parties, a purchaser of stock who allows several months to lapse before asserting any right to have the stock transferred is bound by a judgment, rendered in an action promptly brought by the corporation against the record owners of the stock, cancelling the same as fraudulently issued.</p>