A certificate of stock possesses a qualified negotiability in that its transfer passes the title to the stock, free from latent equities between prior vendor and vendee.1

14 Hanover National Bank v. Trust, 148 X. Y. 612, 51 Am. St. Rep. 721, 43 N. E. 72.

15 Taney v. Penn National Bank, 232 U. S. 174, 5S L. ed. 558 [affirming 187 Fed. 680]; Damman v. Implement Co., 30 N. D. 15, 151 N. W. 085; Wilkes v. Ferris, 5 Johns (N.Y.) 335, 4 Am. Dee. 364.

16 Dean v. Driggs. 137 N. Y. 274, 33 Am. St. Rep. 721, 10 L. R. A. 302, 33 N. E. 326.

17 Geilfuss v. Corripnn, 05 Wis. 651, 60 Am. St. Rep. 143, 37 L. R. A. 167. 70 N. W. 306.

18 Commercial Bank v. Hurt, 00 Ala.

130, 42 Am. St. Rep. 38, 10 L. R. A. 701, 12 So. 568.

19 Shingleur-Johnson Co. v. Warehouse Co., 78 Miss. 875, 84 Am. St. Rep. 655. 20 So. 770.

20 National Bank v. Baltimore, etc., R. R., 00 Md. 661, 105 Am. St. Rep. 321, 59 Atl. 134.

1 Supply Ditch Co. v. Elliot, 10 Colo. 327, 3 Am. St. Rep. 586, 15 Pac. 601; Bank v. Bank, 120 Ga. 575, 102 Am. St. Rep. 115, 48 S. E. 226; Campbell v. Zylonite Co., 122 N. Y. 455, 11 L. R. A. 506, 25 N. E. 853; First National Bank v. Holland, 99 Va. 495, 55 L. R. A. 155, 30 S. E. 126.

Thus if A assigns a stock certificate in blank and delivers it to B, as his agent, to enable B to raise money for A, a bona fide assignee from B has priority over A.2 So the rights of a bona fide purchaser of a certificate purporting to be paid up, prevail over the rights of creditors of the corporation.3 So a corporation is liable on stock certificates fraudulently issued by an authorized officer, if in the hands of bona fide holders.4 It is not negotiable in the fullest meaning of the word.5 If the certificate has been lost after being indorsed in blank, without the fault of the owner;6 or if it is surrendered to the corporation for cancellation, and is fraudulently reissued by an officer without cancellation;7 or is surrendered to the company to. secure a debt of A, the owner, is thought to be lost so that a new certificate is issued and sold to B, and A, who is an officer of the company, subsequently finds the lost certificate and pledges it for value to X;8 or is assigned by the guardian of the minor owner,9 the real owner may assert his right thereto against the holder of the stock certificate. So if the holder of a certificate not purporting on its face to be paid up takes subject to the rights of the corporation, the corporation must issue a new certificate to the assignee.10

2Brittain v. Bank, 124 Cal. 282, 71 Am. St. Rep. 58, 57 Pac. 84.

3 Wallace v. Mfg. Co., 70 Minn. 321, 68 Am. St. Rep. 530, 73 N. W. 189.

4 Cincinnati, etc., R. R. v. Bank, 56 O. S. 351, 43 L. R. A. 777, 47 N. E. 249.

5 United States. Moores v. Bank, 111 U S. 156, 28 L. ed. 385; Bangor, etc., Co. v. Robinson, 52 Fed. 520.

California. Barstow v. Mining Co., 64 Cal. 388, 49 Am. Rep. 705, 1 Pac. 349; Swim v. Wilson, 90 Cal. 126, 25 Am. St. Rep. 110, 13 L. R. A. 605, 27 Pac. 33.

Massachusetts. Farrington v. R. R., 150 Mass. 406, 15 Am. St. Rep. 222, 23 N. E. 109; O'Herron v. Gray, 168 Mass 573, 60 Am. St. Rep. 411, 40 L. R. A. 498, 47 N. E. 429.

New York. Anderson v. Nicholas, 28 N. Y. 600.

Ohio. Farmers' Bank v. Lock Co., 66 O. S. 367, 90 Am. St. Rep. 586, 58 L. R. A. 620, 64 N. E. 518.

Pennsylvania. Biddle v. Bayard, 13 Pa St. 150. It has been said that while the usages of business "have given them some of the elements of negotiability," the courts "have with great uniformity held that stock certificates were not negotiable instruments within the broad meaning of that phrase." Knox v. American Co., 148 N. Y. 441, 51 Am. St. Rep. 700, 31 L. R. A. 779, 42 N. E. 988.

6 East Birmingham Land Co. v. Dennis, 85 Ala. 565. 7 Am. St. Rep. 73, 2 L. R. A. 836, 5 So. 317.

7 Knox v. American Co., 148 N. Y. 441, 51 Am. St. Rep. 700, 31 L. R. A. 779, 42 N. E. 988.

8 Farmers' Bank v. Lock Co., 66 O. S. 367, 90 Am. St. Rep. 586, 58 L. R. A. 620, 64 N. E. 518.

9 O'Herron v. Gray, 168 Mass. 573. 60 Am. St. Rep. 411, 40 L. R. A. 498, 47 N. E. 429.

10 Craig v. Water Co., 113 Cal. 7, 54 Am St. Rep. 316, 35 L. R. A 306, 45 Pac. 10.