Baltimore Retort & Fire Brick Co. v. Mali

Alvey, C. J., delivered the opinion of the Court. The object of the bill in this case is to compel the defendant, the appellant in this appeal, to transfer upon its books to the name of the appellee, two thousand .seven hundred and eighty shares of the capital stock of the appellant, and to issue new certificates therefor to the appellee, instead of certificates’ to that amount of stock, being part of a larger amount, theretofore made out in the name of Hippolyte Mali, the father of the appellee. Hippolyte Mali is dead, and there is an administration upon his estate, though the bill is filed against the appellant alone. If we' could see in the case sufficient ground for decreeing the relief prayed, we should, before proceeding to decree, have to remand the cause in order that the administrator might be made a party, as the decree, to be effective, ought to bind the estate of the deceased as well as the appellant.

It appears that the appellant is an incorporated body, organized under the general incorporation law of the State, and its capital stock consists of five thousand shares, of the par value of ten dollars each. Of this capital ⁹⁵ stock, Hippolyte Mali was an original subscriber to four thousand shares, and down to the early part of August, 1883, he continued to hold all the stock originally subscribed for by him, with the exception of two hundred and twenty shares, which he had previously transferred. The certificates for this stock, in various amounts, were all filled up, dated, and signed by the president and secretary of the corporation, under the corporate seal, to Hippolyte Mali; and with the exception of some few of the certificates, they remained in the certificate book of the corporation just as they were executed, uncut therefrom,, and still so remain in the book. In this state of things, Hippolyte Mali, at Brooklyn, New York, where he resided,, on the 13th of August, 1883, executed an assignment, under hand and seal, of the 2180 shares of stock to his daughter, the appellee.

The assignment states on its face that it was made for value received; but the proof is clear in showing that the assignment of the stock was intended as a gift merely, and not a sale of the stock for value. It is not charged or claimed in the bill that the appellee is entitled as purchaser for value. It is simply alleged that she is entitled by virtue of the assignment, and that the appellant has refused to recognize her right to the stock,, and to transfer the same to her name on its books. There was no power of attorney executed by the donor authorizing the transfer of the stock on the books of the corporation.

But the assignment was left by Mr. Mali with Mr. Reynolds, at that time the attorney of the corporation, with whom also was left the book of certificates, with instruction that upon obtaining the assent of Mr. James, a mortgagee of the corporation, the transfer of the stock should be made to the daughter on the books of the company. But owing to circumstances, about which there seems to be a conflict of testimony, the transfer was not made in the life-time of Mali, the original owner of the stock; and since his death the corporation has refused to- ⁹⁶ make the transfer, upon what is claimed by the appellee to be sufficient authority for requiring the transfer to be made, but which is denied by the appellant. It is contended by the latter that the authority to Mr. Reynolds to effect the transfer on the books of the corporation was revoked by the death of Mali, and the-transfer not having been made, the gift of the stock was left imperfect, and beyond the power of a Court of equity to make complete. The general incorporation statute, under which the appellant was organized, (Act of 1868, ch. 411,) by its 58th section, provides that the stock of corporations organized ■under that • Act, “ shall be deemed personal estate, and shall be transferable as shall be prescribed by the by-laws of the corporation; and no shares shall be transferable until all previous calls thereon shall have been paid in, or shall have been declared forfeited for the non-payment of the calls thereon.” The proof in this case shows that there were no by-laws regula.ting the manner of transferring ’the stock of the corporation; but the certificates of stock, which we must suppose were accepted and assented to by the stockholders, expressly provide, that the shares of sttfck are transferable only on the books of the company, by the owner, or attorney, on surrender of the certificate.

The shares of stock mentioned in the assignment to the daugher, never having been actually transferred on the books of the corporation, remained subject to the control and dominion of Mali, the original stockholder, and in whose name they stood on the books, down to the time of his death; and after his death that control and dominion devolved upon his personal representative. The stock could only be voted, in respect to the affairs of the corporation, by the party, or