146 Wis. 252 | Wis. | 1911
The contract of subscription for shares, the articles of incorporation, the by-laws, and the stock certificates on their face, contained a provision substantially to the effect that shares were not transferable except in pursuance of a vote of two thirds of all the outstanding shares, and this majority of shareholders might either consent to the transfer or' themselves take up the shares sought to be transferred by paying for the same at par. If they did neither the holder was at liberty to sell and transfer his shares as usual. The respondent sought to compel a transfer of shares in disregard of these provisions, and the court below upheld his claim holding these provisions void.
The object and purpose of such regulations restricting in a degree but not prohibiting the transfer of shares are familiar. It is sometimes necessary and often desirable that a corporation protect itself against the acquisition of shares of its stock by rivals in business or other disturbers who might purchase shares merely for the purpose of acquiring information which might thereafter be used against the interests of the
“The delivery of a stock certificate of a corporation to a ■bona fide purchaser or pledgee, for value, together with a written transfer of the same, . . . signed by the owner of the certificate, shall be a sufficient delivery to transfer the title .as against all parties; but no such transfer shall affect the right of the corporation to pay any dividend due upon the stock, or to treat the holder of record as the holder in fact, until such transfer is recorded upon the books of the corporation, or a new certificate is issued to the person to whom it has been so transferred.” Act of 1884, ch. 229. See, also, R. S. Me. ,ch. 47, secs. 34, 35, Act of March 26, 1897.
See, also, Annotated Corporation Laws of all the states by Gumming, Gilbert, and Woodward, where, under alphabetical arrangement of states, .the statutes of each state relative to the transfer of shares of stock may be found referred to. These vary in detail but have a marked general resemblance. We ■do not find that any court has given to statutes regulating the mode of transfer of shares the broad scope suggested by the dicta in Edgerton T. Mfg. Co. v. Croft, supra, and other like ■cases. We feel at liberty to re-examiné our statute with reference to the questions presented upon this appeal.
The statutes now in force relating to the organization of corporations begin with a declaration stating what powers the corporation shall possess, “when no other provision is specially made by law or by its articles of organization.” See. 1748, Stats. (1898). “In stock corporations, persons holding stock, according to the regulations of the corporations, and they only, shall be members.” Subd. 6, sec. 1772. These provisions recognize the right of the shareholders and incorpo-rators to make and agree to provisions on this subject not
“The delivery of a stock certificate of a corporation to a bona -fide purchaser or pledgee for value, together with a written transfer of the same signed by the owner of the certificate, his attorney or legal representative shall be a sufficient delivery to transfer the title as against all persons, but*257 no such transfer shall affect the right of the corporation to pay any dividend due upon the stock or to treat the holder of record as the holder in fact until, such transfer is recorded upon the books of the corporation or a new certificate is issued to the person to whom it has been so transferred.” Sec. 1751, Stats. (1898).
So far as the corporation is concerned it may refuse to recognize the transferee and treat the holder of record as the holder in fact until such transfer is recorded, even though such transferee have delivered to him a stock certificate with a written transfer of the same signed by the owner of the certificate and be a bona fide purchaser for value. But this transferee may apply to the proper officer of the corporation for a transfer to him on the stock books. Sec. 1752. If it is made to appear prima facie that it is the duty of the corporate officer to make the transfer, the court shall require him to show cause why he should not transfer the stock, and unless he show cause to the satisfaction of the court to the contrary the court shall order such transfer. Id. Here the cause shown is that the transferee in question is not, according to the subscription agreement and the articles of incorporation, entitled to become a member of the corporation or to hold stock therein, and the transfer to him is invalid because the transferee has not been qualified by the approval of two thirds of the shareholders, and the prior right of these shareholders to purchase the stock at par appears upon the certificate itself as outstanding and unextinguished. The secretary would be justified in bringing such matters to the attention of the court. Such prior claim of another may be good cause against the demand of the respondent. The court will not aid the assignor of respondent acting with the respondent to commit a breach of his contract to sell the stock to his fellow shareholders at par before transferring it to any one else. Martens v. Reilly, 109 Wis. 464, 84 N. W. 840. General language in Edgerton T. Mfg. Co. v. Croft, 69 Wis.
By the Court. — Tbe order of tbe circuit court is reversed, and tbe cause remanded with directions to dismiss tbe application.