Crockett, 9 Cal. 112. Note citations: 57 Am. St. Rep. 388; 63 Am. Dec. 121; 85 Am. Dec. 621; 43 Am. St. Rep. 153.)

Where owners of stock in corporation transfer apparent ownership thereof to another, solely for the purpose of enabling him, as their agent, the better to sell the property of the corporation, and such agent, in fraud of the real owners, sells the corporate property for a larger amount than that for which he makes return, the principals may maintain an action against the agent for the return of the stock and an accounting of the dividends received by him without previous demand. (Wooster v. Nevills, 73 Cal. 58, 14 Pac. 390.) The rule invalidating contracts in restraint of trade does not include every contract limiting the right of the owner of property to dispose of it except upon certain conditions; and an agreement between two or more persons who contemplate the purchase of stock that, as a condition of the purchase, neither will dispose of his share within a limited period, or that they will hold it upon certain limitations, is not invalid as being in restraint of trade. (Smith v. S. F. & N. P. Ry., 115 Cal. 584, 56 Am. St. Rep. 117, 47 Pac. 582.)

The fact that an unsealed contract relates to the transfer of stock of a corporation, the certificates of which were under seal, is immaterial, and cannot tend to show that the unsealed contract was sealed, or was authorized by the corporation. (Fontana v. Pacific Can Co., 129 Cal. 51, 61 Pac. 580.)

Owner of stock has right to rely on observance by corporation of its own by-laws and of the laws of the state with reference to transfer and cancellation of stock, and may hold corporation liable for conversion of his stock, if canceled by its secretary without authority, upon mere surrender of certificate by another person, without indorsement of transfer required by law. (Tafft v. Presidio etc. Co., S4 Cal. 131, 18 Am. St. Rep. 166, 24 Pac. 436.)

By Indorsement and Delivery.-In this state title to stock passes as between the parties by indorsement and delivery; and any rule of a corporation requiring stock to be transferred upon the books goes no further than to protect the corporation in paying dividends to a recorded stockholder, in the absence of notice of transfer or other right. (Ashton v. Zeila Mining Co., 134 Cal. 408, 66 Pac. 494.) The signature of the owner, to whom stock was issued, must be indorsed on certificate by owner or his attorney or legal representative, in order to effect a valid transfer of stock, or to authorize cancellation of certificate and issuance of new certificate to another. (Tafft v. Presidio etc. Co., 84 Cal. 131, 18 Am. St. Rep. 166.)

And an indorsement of agent's signature upon certificate issued to principal, without statement of principal's name, cannot authorize eorporation to cancel principal's certificate of stock. A transfer or surrender of such certificate by agent without any signature cannot place corporation in any better position to justify such cancellation than if certificate were indorsed by agent merely in his own name

without mentioning principal. (Tafft v. Presidio etc. Co., 84 Cal. 131, 18 Am. St. Rep. 166, 24 Pac. 436. To same effect: Nicholls v. Reid, 109 Cal. 632, 42 Pac. 298. Note citations: Marbury v. Ehien, 20 Am. St. Rep. 476; Knox v. Eden Musee Co., 51 Am. St. Rep. 711.) An indorsement of a certificate of stock in a corporation, and the delivery thereof to the indorsee without consideration, with the intent to make a present transfer, is sufficient to constitute a valid gift, although by the terms of the indorsement the donor reserved to himself the right to the dividends during his life and at the time of the transfer requested the donee to preserve the certificate intact until his death and to use a portion of the proceeds of the stock for a specified purpose. (Calkins v. Loan Assn., 126 Cal. 531, 59 Pac. 30.)

Transfer on Books of Corporation.-A transfer of stock is not good as against third parties, unless it be made on the books of the company. (Weston v. Bear River Co., 5 Cal. 186, 63 Am. Dec. 117, note. To same effect: Weston v. River Co., 6 Cal. 429; Strout v. Min. Co., 9 Cal. 80; Naglee v. Wharf Co., 20 Cal. 532; People v. Elmore, 35 Cal. 655; Parrott v. Byers, 40 Cal. 625; Gold Bank v. Wilson, 58 Cal. 604. Note citations: 5 Am. Dec. 380; 14 Am. Dec. 530; 2 Am. St. Rep. 891; 15 Am. St. Rep. 626; 32 Am. St. Rep. 420; 32 Am. St. Rep. 640.)

But even without an entry upon the books of the corporation of the transfer, such transfer by indorsement and delivery is valid as against all but innocent purchasers and transferees in good faith, for value, and without notice. (Spreckels v. Nevada Bank, 113 Cal. 276, 54 Am. St. Rep. 348, 45 Pac. 329.)

And one in whose name stock stands upon books of a bank, with his knowledge and consent, is, as to the creditors of the bank, the owner of the stock; and it is immaterial that the transfer to him and his indorsement of the certificate was procured by the president of the bank by fraud. (O'Connor v. Witherby, 111 Cal. 523, 44 Pac. 227.)

But a transfer of corporate stock, which has not been entered on the books of the company as provided by the statute, is valid as against everyone except a subsequent purchaser in good faith without notice. (People v. Elmore, 35 Cal. 653. To same effect: Parrott v. Byers, 40 Cal. 625; Winter v. Belmont Co., 53 Cal. 432; Farmers' otc. Bank v. Wilson, 58 Cal. 604; Spreckels v. Nevada Bank, 113 Cal. 276, 54 Am. St. Rep. 348, 45 Pac. 329. Note citations: 53 Am. St. Rep. 450; 5 Am. Dec. 380; 63 Am. Dec. 121; 57 Am. St. Rep. 389.)

Delivery of stock certificate without transfer on corporate books is invalid as an assignment against such subsequent purchaser without notice on execution against assignor. (Naglee v. Pacific Wharf Co., 20 Cal. 530. To same effect: Winter v. Belmont etc. Co., 53 Cal. 432. Distinguished: People v. Elmore, 35 Cal. 655; Parrott v. Byers, 40 Cal. 625. Note: 63 Am. Dec. 120.)

The inference from the cancellation of certificate of stock on a certain day is not that the original owner held them until that day, but that he may have assigned them at some uncertain date prior to that cancellation. Certificate of stock indorsed in blank by the owner pass by mere delivery without further indorsement or transfer upon the books of the corporation although they are not negotiable securities in a commercial sense or within the definition of the Civil Code. (Graves v. Mono Lake etc. Co., 81 Cal. 303, 22 Pac. 665. To same effect: Spreckels v. Bank, 113 Cal. 278, 54 Am. St. Rep. 351, 45 Pac. 329; Craig v. Hesperia etc. Co., 113 Cal. 13, 35 Am. St. Rep. 319, 45 Pac. 10. Note citation: Harpold v. Stobart, 15 Am. St. Rep. 626.)

Refusal to Transfer Stock on Books-Conversion-Damages.-Corporation is liable for a conversion of stock which it refuses to transfer on the books of the corporation to a purchaser thereof; and the existence of an unpaid delinquent assessment upon the stock is no defense to an action for such conversion, though proof thereof is admissible as affecting the value of the stock. (Craig v. Water Co., 113 Cal. 7, 54 Am. St. Rep. 316, 45 Pac. 10.)

But conversion will not be against corporation for refusal to issue corporate stock, when the plaintiff has no legal title thereto. (Morrison v. Gold etc. Co., 52 Cal. 306. To same effect: Hawkins v. Mansfield, 52 Cal. 515.)

Where banking corporation refuses to transfer stock upon its books, the assignee may elect to treat this as a conversion of the stock by the bank, and sue for its value; or he may sue in equity to compel registration of the transfer, and recover damages as an alternative, nor is the latter remedy exclusive of the former. (Ralston v. Bank of California, 112 Cal. 208, 44 Pac. 476. See note: Bloede Co. v. Bloede, 57 Am. St. Rep. 393.)

But where the rule of a bank forbids transfer of stock while stockholder is indebted to the bank, refusal of bank to transfer on that ground is not conversion; but if bank transfers its claim of indebtedness against the stockholder it loses its lien on the stock and is no longer authorized to refuse the transfer but is liable for conversion of the stock upon a subsequent demand and refusal to transfer it upon the books. (Ralston v. Bank of California, 112 Cal. 208, 44 Pac. 476. See note: Bloede Co. v. Bloede, 57 Am. St. Rep. 393.)

Held before the code a corporation cannot refuse to enter a transfer of the stock on its books on the ground that the assignor of the stock is indebted to the corporation unless the corporation had a lien on the stock prior to the transfer. (People v. Crockett, 9 Cal. 112. Note citation: Morgan v. Bank, 11 Am. Dec. 581.)

An order of the president of a corporation drawn on himself as president to transfer to a person a certain number of shares of stock of a corporation, followed by the refusal of himself and the secretary to deliver the stock does not amount to a conversion of the stock

of the corporation.
effect: Hawkins v. Mansfield etc. Co., 52 Cal. 515.)

(Morrison v. Mining Co., 52 Cal. 306. To same

A party entitled to stock in a private corporation has a right of action for damages against the corporation for the refusal of its officers to transfer the stock to him upon the company's books, and mandamus will not lie to compel the transfer. (Kimball v. Union Water

Co., 44 Cal. 173, 13 Am. Rep. 157. To same effect: Ralston v. Bank of Cal., 112 Cal. 213, 44 Pac. 476. Note citations: 89 Am. Dec. 736; 30 Am. St. Rep. 668; 46 Am. St. Rep. 560.)

Transfer by Trustee or Executor.-A trustee may sell or hypothe cate stock held in his name. (Brewster v. Sime, 42 Cal. 139.)

Where mining stock was placed by the owner in the name of another person as "trustee" on the books of the corporation, the owner is bound by the trustee's acts as to all persons without actual knowledge of the true ownership. (Brewster v. Sime, 42 Cal. 139. To same effect: Thompson v. Toland, 48 Cal. 113; Newhall v. C. P. etc. Co., 51 Cal. 350, 21 Am. Rep. 717; Winter v. Belmont etc. Co., 53 Cal. 432; Woodsum v. Cole, 69 Cal. 145, 10 Pac. 331; Graves v. Mining Co., 81 Cal. 325, 22 Pac. 665.)

Where the certificate book of a corporation shows that the stock is held by a person as trustee, the officers of the corporation are charged with notice that he does not hold the stock in his own right. (Brewster v. Hartley, 37 Cal. 15, 99 Am. Dec. 237.)

The mere addition of the word "trustee" after the name of a person to whom stock is transferred is not sufficient to put persons dealing with the trustee upon inquiry as to the trustee's title, nor will it operate as constructive notice of the owner's equitable right. (Brewster v. Sime, 42 Cal. 139.)

Addition of word "trustee" in certificate of stock to name of person to whom issued does not show that such person has not the full right to deal with it as his own, nor give the person dealing with him notice that any other person has any interest in the stock. (Thompson v. Toland, 49 Cal. 99. To same effect: Moore v. Boyd, 74 Cal. 170, 15 Pac. 670.)

An executor having power, under the will, to sell personal property, may transfer, by indorsement and delivery, shares of stock belonging to the estate. And the corporation is bound to recognize the transfer, and make the same on its books. (Brown v. Gas Light Co., 58 Cal. 426.)

Transfer by Power of Attorney.-The general power of attorney to sell, dispose of, transfer and deliver all or any interest of principal in capital stock of corporation, does not confer power to transfer to himself such shares, or to do anything in relation to such stock, except for and in name of principal. (Tafft v. Presidio etc. Co., 84 Cal. 131, 18 Am. St. Rep. 166, 24 Pac. 436.)

Under power of attorney to sell capital stock of corporation, surrender of such stock by agent, without any indorsement thereon, and

exchange thereof for equal number of shares issued to himself in his own name, is unauthorized and void. (Tafft v. Presidio etc. Co.,

84 Cal. 131, 18 Am. St. Rep. 166, 24 Pac. 436.)

And a power of attorney to exchange old certificates of stock for new ones is special, and corporation is bound to know authority of such agent, and if it cancels the stock and transfers the same to another, upon its books, without other indorsement than that of the holder of the power of attorney, it is liable in trover for a conversion of the stock. (Quay v. Presidio etc. R. R. Co., 82 Cal. 1, 22 Pac. 925. To same effect: Nicholls v. Reid, 109 Cal. 632, 42 Pac. 298.)

Rights of Bona Fide Purchaser.-The transfer of stock to a bona fide purchaser vests title in purchaser free from equities between the seller and the corporation, of which purchaser was ignorant at time of transfer, though provided for by a by-law of the corporation. Existence of such a by-law is not enough to charge purchaser with notice, nor is it enough that purchaser, being also a corporation, has a similar by-law which is printed on each of its certificates of stock. (Anglo-Cal. Bank v. Grangers' Bank, 63 Cal. 359. Distinguished: Jennings v. Bank, 79 Cal. 331, 12 Am. St. Rep. 145, 21 Pac. 852.)

But the insertion in a certificate of stock of a bank of a provision that no transfer will be made on the books of the bank until after payment of all indebtedness due the bank from person in whose name stock stands creates an implied contract from which an equitable lien arises for money borrowed by the stockholder from the bank. (Jennings v. Bank of California, 79 Cal. 323. To same effect: Lankershim Ranch Co. v. Herberger, 82 Cal. 603, 23 Par. 134; Ralston v. Bank, 112 Cal. 214, 44 Pac. 476. Note citations: 32 Am. St. Rep. 640; 36 Am. St. Rep. 626.)

And where stocks are held by broker in such manner that they will pass by delivery on indorsement of broker, with nothing on face of stock to indicate real owner has any interest in stock, bona fide purchaser, without notice, acquires good title to some, notwithstanding broker was under contract with principal not to sell or hypothecate stock without consent of principal. (Thompson v. Toland, 48 Cal. 99. To same effect: Winter v. Belmont Min. Co., 53 Cal. 432; Grave v. Mono etc. Min. Co., 81 Cal. 326, 22 Pac. 665.)

So a purchaser of a stock certificate from an apparent owner acquires title as against true owner when latter has permitted former to have evidence of ownership. (Barstow v. Savage Mining Co., 64 Cal. 388, 49 Am. St. Rep. 705, 1 Pac. 349. To same effect: Arnold v. Johnson, 66 Cal. 403, 5 Pac. 796; Woodsum v. Cole, 69 Cal. 145, 10 Pac. 331.)

Bona fide purchaser without notice of a stolen certificate of stock properly indorsed is protected against the true owner. (Winter v. Belmont Mining Co., 53 Cal. 428. To same effect: Farmers' etc.