than one class of the same description found in the will. And they are entitled to the income of the shares, after the death of the testator, and to receive any advantage, by way of new shares resulting from the ownership of the shares.1

*

But a specific legatee of shares is not entitled to a bonus on such shares, declared after the decease of the testator, but arising out of moneys due the company from the testator, and which claim was compromised by his executors, but such bonus belongs to the general fund of personal estate. And such legatee must bear the calls which are made after the testator's death, unless there is something in the will to show a different intent.3

2. A bequest of the testator's railway shares, of which he should be possessed at his decease, was held to pass such railway shares specifically named in the will as the testator had at the date of his will, although subsequently converted into consolidated stock of the same company, by a resolution of the company.

3. But that other consolidated stock of the same company owned by testator at his decease, did not pass under the will, the same having been purchased after the execution of his will.4

SECTION XV.

Shares in Trust.

1, 2. Company may safely deal with regis- | 4, and note 2. Discussion of the rights of

tered owner.

3. But equity will protect the rights of cestuis

que trust.

cestuis que trust in stock certificates.

§ 46. 1. By the English statute, railway companies are not bound to see to the execution of trusts in the disbursement of their dividends, but are at liberty to treat the person in whose

1 Jacques v. Chambers, 2 Coll. C. C. 435; s. c. 4 Railw. C. 205; Tanner v. Tanner, 5 Railw. C. 184; s. c. 11 Beav. 69. And it is held in this last case, that upon a bequest of railway shares and all right, title, and interest therein, money paid beyond the calls will pass to the legatee.

Maclaren v. Stainton, 27 Beav. 460; s. c. 6 Jur. N. S. 360; Loch v. Ven

ables, 27 Beav. 598; s. c. 6 Jur. N. S. 238.

3 Day v. Day, 1 Drew. & Sm. 261; s. c. 6 Jur. N. S. 365.

Oakes v. Oakes, 9 Hare, 666.

name the shares are registered as the absolute owner. It would seem that in case of the bankruptcy of a shareholder in a jointstock company, a court of equity will sometimes protect trust funds, although registered in the name of the bankrupt, both from the claim of the assignee and the company, who have made advances to the nominal owner, upon the faith of his being the true owner, but without any pledge of the stock.1

2. In general, in this country, it is believed railway companies will be protected in dealing bona fide with the person in whose name shares are registered on the books of the company, as the absolute owner, notwithstanding any knowledge they may have of the equitable interest of third parties.

3. But there can be no question, a court of equity will always protect the interest of a cestui que trust, when it can be done without the violation of prior or superior equities, which have bona fide attached. 4. It was recently held after careful examination of the authorities, that the holder of stock, as trustee, has prima facie no right to pledge it as security for his private debt, and one who accepts the pledge under such circumstances, acquires no rights against the cestui que trust. And the word "trustee" in the certificate, in connection with the name of the holder, is notice to all persons to whom the certificate may be delivered, sufficient to put the party on inquiry, as to the nature of the holder's title, and the character and extent of the trust.

1 Pinkett v. Wright, 2 Hare, 120. This is a very elaborate opinion of the learned Vice-Chancellor Wigram, upon the subject of protecting the interest of cestuis que trust in the stock of a banking company, standing in the name of a trustee who had become bankrupt. The trustee was also the proprietor of shares in his own right, all standing in his name, without any thing on the books of the company to distinguish which were trust funds.

It was held that the trustee must be presumed to have pledged such stock as belonged to himself and not that of his cestuis que trust, and that shares which stood in the name of the trustee at the time of the bankruptcy, and thenceforward remained in his name, might fairly be presumed to be identical with those in which the trust funds were invested, the number of shares being the same.

Notice to the company is indispensable to create an equitable mortgage of railway shares. Ex parte Boulton v. Skelehley, 29 Law Times, 71; s. c. 1 De G. & J. 173.

2 Shaw v. Spencer, 8 Law Reg. N. S. 299; s. c. 99 Mass., not yet reported. The decision here falls short, probably, of what the authorities will justify, if the case had required it. But the usages of the Stock Exchange, whereby trustees are enabled to defraud their cestuis que trust, for the benefit of speculators,

SECTION XVI.

The extent of Transfer requisite to exempt from claim of
Creditors.

1. How transfer of stock perfected as to 3, 4.

creditors.

2. Reasonable time allowed to record transfer.

n. 3.

In some of the states no record required.
Question further considered.

§ 46. a. 1. The question of what constitutes a valid transfer of shares in a joint-stock corporation, so as to exempt them from attachment and levy by creditors of the transferror, is considerably discussed in a recent case in New Hampshire by a judge of large experience, and the result reached, that upon a pledge of stock in a railway corporation in New Hampshire, there should be such delivery as the nature of the thing is capable of, and to be good against a subsequent attaching creditor the pledgee must be clothed with all the usual muniments and indicia of ownership; that by the laws of New Hampshire, a record of the ownership of * shares must be kept, by domestic corporations, within the state, and by officers resident there; and that on the transfer of stock the delivery will not be complete, as to creditors, until an entry is made upon such stock-record, or it be sent to the office for that purpose, and the omission thus to perfect the delivery will be prima facie, and if unreceives a moderate but very just rebuke. 1. By declaring that certificates of stock in blank are not to be regarded as negotiable instruments, cutting off all equities of bona fide parties in interest. S. P. Sewall v. Boston Water Power, 4 Allen, 482. 2. By declaring that no usage or custom of brokers, or course of business, can avail to defeat, or qualify, the established rules of law, recognized in courts of equity. The following significant intimation of the court is worthy of repetition: "The circumstance that stock certificates, issued in the name of one as trustee, and by him transferred in blank, are constantly bought and sold in the market without inquiry, is likewise unavailing. A usage to disregard one's legal duty, to be ignorant of a rule of law, and to act as if it did not exist, can have no standing in the courts." We should be rejoiced to persuade ourselves, that we had reached a point where the dishonest practices of trade could no longer receive countenance by the courts, either directly or indirectly. regard this case as falling far short of the truth, but as it is all which the case required, it is gratifying to believe the courts are moving in the right direction, and may ultimately be able to convince men who shut their eyes to exclude the light, that they need not feel surprise, to find their blind booty turning to ashes in their grasp; and the interests of the widow and the fatherless finally regarded as of more value, in the public esteem, than the accumulation of gain, by indirection and evasion, intended to defraud them of their last penny.

We

explained conclusive evidence of a secret trust, and therefore, as matter of law, fraudulent and void as to creditors.1

2. But in the case last cited it is said that when 2 the transfer is made at a distance from the office and the old certificate surrendered and a new one given by a transfer agent residing in a neighboring state, proof that the proper evidence of such transfer was sent by the earliest mail to the keeper of the stock record to be duly entered, although not received until an attachment had intervened, would be a sufficient explanation of the want of delivery and the transfer would be good against the creditor. Any unreasonable delay in perfecting the record title to such shares leaves them liable to the claims of creditors.

3. But where the charter of the company or the general laws of the state contain any specific restriction or requirement in regard to the transfer of shares, it must be complied with or the title will not pass.2

4. In a recent case in New Jersey, it seems to be considered that nothing more is required to make an effectual transfer of stock in a bank, even as against creditors, than an assignment of * the certificates and a delivery to the assignee, and that this will be regarded as effectual against an attaching creditor without notice, even where the charter of the company declares the stock personal estate, and provides that "it shall be transferable upon the books of the corporation," and also, " that books of transfer of stock shall be kept, and shall be evidence of the ownership of said stock in all elections and other matters submitted to the decision of the stockholders."

1 Pinkerton v. Manchester & Lawrence Railw., 1 Am. Law Reg. N. S. 96; s. c. 42 N. H. 424.

* Fisher v. Essex Bank, 5 Gray, 373; Sabin v. Bank of Woodstock, 21 Vt. 362; Pittsburgh & Connellsville R. Co. v. Clarke, 29 Penn. St. 146.

3

Broadway Bank v. McElrath, 2 Beasley, 24. We think it proper to say, that there is considerable difference in the decisions of the different states as to the point of time from which the transfer of equitable titles is to be reckoned, as between purchasers for value and creditors. It is generally considered that the transfer takes effect from the date of notice to the trustee, who holds the legal title, subject to all equities, and these do not attach ordinarily until after notice brought home to the trustee. Some of the states regard the equitable rights of the purchaser as dating from the period of the actual purchase, provided notice to the trustee be given within reasonable time after. We have discussed the question and the cases, to some extent, in Rice v. Courtis, 32 Vt. 460; 1 Story Eq. Ju. 400 b, Redf. Ed.

§ 47. 1. It seems to be settled law that the registered owner of railway shares is liable for all calls thereon, so long as his name remains upon the register.1 The effect of the transfer of railway scrip is only to convey an equitable interest in the shares, with the right to have the shares formally assigned to him, and his name entered upon the register as a shareholder.1

2. In case of bankruptcy, the bankrupt remains liable for all calls, unless the names of the assignees are registered on the books of the company, as this is not regarded as a debt payable in future, and which may be proved under the commission.2

1 Midland Great Western Railw. Co. v. Gordon, 5 Railw. C. 76; s. c. 16 M. & W. 804; Mangles v. Grand Collier Dock Co., 10 Sim. 519; s. c. 2 Railw. C. 359; Sayles v. Blane, 14 Q. B. 205; s. c. 6 Railw. C. 79; West Cornwall R. v. Mowatt, 15 Q. B. 521. In this case it was said, even if the transaction by which the title to the stock and the registry of defendant's name were made, were illegal, it could not avail him in an action for calls. See post, § 236.

Long Island R. Co., 19 Wend. 37; Mann v. Currie, 2 Barb. 294; Hartford & N. H. R. v. Boorman, 12 Conn. 530; Mann v. Cooke, 20 Conn. 178; Rosevelt v. Brown, 1 Kernan, 148. The registry-book of shareholders is prima facie evidence of the liability to calls, of those whose names appear upon it, although irregularly kept. Birmingham R. v. Locke, 1 Q. B. 256; London Grand J. R. v. Freeman, 2 M. & G. 606; Same v. Graham, 1 Q. B. 271; Aylesbury R. v. Thomson, 2 Railw. C. 668. This last case holds that the purchaser of shares is only liable for calls made after his name is upon the register. The company may, by its charter, and probably by a by-law, provide that the original subscriber shall be holden for all calls, or until a certain amount is paid in. Vicksburg, Shreveport, & Texas Railw. v. McKeen, 14 La. Ann. 724.

2 South Staffordshire R. v. Burnside, 2 Eng. L. & Eq. 418; s. c. 5 Exch. 129; 6 Railw. C. 611.