Shares of stock are from their nature alienable, and, subject to the limitations lawfully imposed upon their alienability by law, or by the corporation or by the holder, are transferred by indorsement and delivery of the certificate. Ordinarily such a transfer makes the transferee a stockholder and the transferror ceases to be such, where the transfer is in good faith and recorded on the books of the company.1 The books of the corporation are the controlling evidence as to the ownership of shares;2 but if the transferror in good faith has done all that he is required to do to make the transfer complete on the books of the company, the failure of the proper officers to record the transfer will not continue him as a stockholder.3 It seems to be sufficient even if the officers knew of the transfer.4 If, however, the transfer is collusive or for the purpose of escaping liability, the transferror as well as the transferee will be held as a stockholder; certainly in the case of national banks,5 and on principle under state statutes.6 An apparent exception seems to be that of a pledgee,

Clarke v. Brooklyn Bank, 1 Edw. Ch. 361; State v. Lehre, 7 Rich. Law, 234. A subscription in another's name was not permitted to escape a scaling-down statute. Union Bank v. McDonough, 5 La. 63.

7 Consolidated Bank v. State, 5 La. Ann. 44. This opinion is a singular exhibition of folly.

8 Dabney v. State Bank, 3 S. C. 124. 1 Johnson v. Laflin, 103 U. S. 800;

S. c, 5 Dill. 65. But statutes sometimes prescribe a different rule. Chatam Bank v. Brobston, 99 Ga. 801; Harper v. Carroll, 69 N. W. R 610.

2 Man v. Cheeseman, Fed. Cas. No. 9002a; Irons v. Manuf. Nat. Bank, 121 U. S. 27; s.c, 27 Fed. R 591;

In re Emp. City Bank, 18 N. Y. 199. They make the transferee liable as stockholder even in case of collusive transfers. Foster v. Lincoln, 74 Fed. R 382, 79 Fed. R 170; Robinson v. Beall, 26 Ga. 17.

3 Snyder v. Foster, 73 Fed. R 136, 19 C. C A. 406; Hayes v. Shoemaker, 39 Fed. R 319. Compare Price v. Whitney, 28 Fed. R 297.

4 Whitney v. Butler, 118 U. S. 655.

5 National Bank v. Case, 99 U. S. 628; Barden v. Johnson, 107 U. S. 251; Stuart v. Hayden, 169 U. S. 1; S. 0., 72 Fed. R 402; Witters v. Sowles, 32 Fed. R 130; Foster v. Lincoln, 74 Fed. R 382; s. a, 79 Fed. R 170.

6 So held in case of a transfer to who takes stock merely as collateral security, and does not receive title himself but has the stock stand in the name of some irresponsible third party. In such a case the pledgee is not liable as a stockholder.7 The same result is obtained by the entry of the pledgee's name on the books "as pledgee,"8 and, on principle, with any other words which showed the holding as a trustee, if the fact was as represented. If the transfer be collusive, both the transferror and the transferee are liable as stockholders,9 and the same result follows if the transfer be made after insolvency of the bank with notice of the fact.10 In some of the states statutes render bank stockholders liable for all debts created while they were stockholders and require all transfers of stock to be recorded in some proper office.11 This liability is unaffected by a transfer. One may become a stockholder if he is the real owner of the the bank itself, which would assume no liability to answer to the statute. In re Reciprocity Bank, 22 N. Y. 9.

7 Anderson v. Phila. Warehouse Co., Ill U. S. 479. This case is absolutely irreconcilable with National Bank v. Case, 99 U. S. 628. In the latter case the transfer was made to the corporation and then to the dummy. In the other case the transfer was to the president of the corporation for the corporation and then to the dummy. In the Anderson case the two ablest judges in the court dissented. Nat. Park Bank v. Harmon, 79 Fed. R 891, follows the case. See Chatam Bank v. Brobston, 99 Ga. 801, under a state law, contra.

8 Pauly v. State Loan & Trust Co., 165 U. S. 606. The law therefore ought to be that unless the pledgee causes the proper entry to be made on the books, he will be liable as stockholder. Chatam Bank v. Brobston, 99 Ga. 801; State v. Bank of shares regardless of what the books show or the apparent form of the transfer.12 A father who bought shares for his minor children and put them in their names was held to be a stockholder.13

New England, 73 N. W. R. 153; Harper v. Carroll, 69 N. W. R. 610; Moore v. Jones, 3 Woods, 53; Bow-den v. Farmers' Bank, 1 Hughes, 307; Hale v. Walker, 31 Iowa, 344; Magruder v. Colston, 44 Md. 349. But the rule is said to be that the pledgee may show he is not the holder (Williams v. Am. Nat. Bank, 85 Fed. R. 376), and that he is liable only by estoppel. Baker v. Nat. Bank, 86 Fed. R, 1006. But if the pledgee proved that he ordered the entry correctly made, would he escape? See cases in notes 3 and 4 of this section.

9 Foster v. Lincoln, supra, note 2. See Laing v. Burley, 101 I11 591, which holds the transferee liable when the transfer was not recorded.

10 Robinson v. Beall, 26 Ga. 17; Cox v. Montague, 78 Fed. R, 845; but see Sykes v. Halloway, 81 Fed. R432.

11 See Illinois statutes, 1 Starr & Curtis, ch. 16a, sec. 9, and see note. 1 to this section.