See "Books Close." Transfer in Blank. First read "Transfer of Stock."transfer in blank means that the owner or person in whose name stock is registered signs his name in the proper place on the certificate and delivers it without filling in the name of the new owner of the certificate. If, for instance, Maria Morton sells her fifty shares to John Roe, and fills in his name on the back, then he only is entitled to have a new certificate issued in his name, and it is notice to the corporation that John Roe owns the certificate. But if Maria Morton sells and delivers her certificate to John Roe, and no name is filled in as above, then the certificate can pass from owner to owner, without the necessity of a new one being issued each time. However, should there be any dividend declared in the meantime and while the books of the company still showed Maria Morton to be the owner of the stock, the dividend would go to her and not to John Roe, or any subsequent owner. It would be proper and legal for the owner of the stock at the time of the declaration of any dividend to demand of the person from whom he bought the stock, and so on back to Maria Morton, the payment of the amount of such dividend, and she should pay it to John Roe, taking a receipt from him at the time of so doing.
In the case of the sale of a stock of doubtful value, where possibly the corporation is in danger of failure, it is very important that the seller should personally attend to making the transfer on the company's books, for the name on the records of the company would be accepted, in law, as evidence of ownership, and if the stockholders, as in national banks, were liable for the debts of the corporation to an additional amount equal to the par value of the stock, then those whose names appeared on the records, at the time of the failure, as owners of the stock, would be the ones liable. By far the safest way is for the seller to forward the certificate to the transfer agent (see " Transfer Agent "), giving instructions for the issuing of the new one, thus being assured of the change in name upon the records.1 Never " transfer in blank " any stock which carries additional liability for debts or which is subject to any assessment whatsoever. (See " Non-assessable.")
1 The very pertinent objection may be raised here, of forwarding a stock to be transferred into the name of another party before receiving payment for the same. Likewise, the transferee might object to paying for the stock until delivered. To prevent all doubt and risk, this may be effectually accomplished, as follows: The seller agrees to make delivery by transfer, as it is called. The transferee agrees to pay for the stock upon delivery. The latter executes a power of attorney, authorizing the transfer of the 6tock from himself to the original party; so that, at any time previous to the delivery and payment for the stock, the seller could, by the use of power of attorney, have it re-transferred to himself. He will hold this power of attorney; forward the stock to the transfer office with instructions for it to be returned to him after transfer. Upon its receipt, he will deliver to the purchaser the certificate of stock in the latter's name, together with the power of attorney referred to. By this method, if, for any reason, the purchaser should refuse or be unable to accept the certificate of stock, then the seller, by the use of the power of attorney, could have a new certificate issued in his own name.
The ordinary method, which is considered sufficiently free from risk by