200 A.D. 577 | N.Y. App. Div. | 1922
On the trial appellants contended that the law of Massachusetts governed, on the theory that the note was made and negotiated by the brokers there and that they there delivered the certificates as collateral for the payment of the note; and the plaintiff claimed that the law of New York; where the stock was issued to the brokers, governed. Appellants now claim that the law of Delaware governs. They pleaded that the Sugar Company, pursuant to its authority under the law of its incorporation, adopted a by-law to the effect, as stated on the certificates, that they were transferable only on the books of the company on surrender of the certificates by the holder in person or by his duly authorized attorney. Appellants offered to prove the by-law but made no offer with respect to the statutory law of Delaware. In Union Bank v. United States Exchange Bank (143 App. Div. 128) it was held that the delivery of a certificate of stock by an assignment in blank and a power of attorney indorsed thereon passes the entire legal and equitable title, even though the charter or by-laws of the company provide that the stock is transferable only on the books of the company and on surrender of the certificates and even though there be a provision to that effect on the face of the certificates, and that at common law a corporation retains no lien on the stock issued by it and, therefore, it retains no right or lien in the absence of a statute conferring it. (See Hammond v. Hastings, 134 U. S. 401.) We cannot take judicial notice of the statutory law of another State and it is not to be presumed that the laws of Delaware authorized the Sugar Company to make a by-law protecting it against its own voluntary act in issuing stock and affecting the negotiability of its stock and manifestly, without clear statutory authority therefor, such by-law could not affect the title of a purchaser in due course and for value. (Kinnan v. Sullivan County Club, 26 App. Div. 213.) In the absence of a statute reserving rights in favor of a business corporation after the issuance of its stock, such a general provision requiring a surrender of the certificates as a condition precedent to the transfer of the stock should be construed merely as protecting the corporation with respect to recognizing the owner and as giving to the certificates a
The judgment is, therefore, right and should be affirmed, with costs.
Clarke, P. J., Smith, Merrell and Greenbaum, JJ., concur.
Judgment affirmed, with costs.
Mass. Uniform Stock Transfer Act, § 1.— [Rep.