This section is from the book "Popular Law Library Vol8 Partnership, Private Corporations, Public Corporations", by Albert H. Putney. Also available from Amazon: Popular Law-Dictionary.
When a dividend on a stock is declared, the dividend is made payable on some certain day and the books of the company are declared to be closed, for transfers, so far as the payment of the dividend is concerned at an earlier day. The owner of the stock on this day is entitled to the dividend even if he sells the stock before the time that the dividend is paid.
The vendor of stock cannot escape personal liability for the unpaid portion of the purchase price by selling or assigning it to another. The vendee also becomes liable for all sums due on the stock unless he is in the position of a bona fide holder for value.
1 Sargent vs. Franklin Ins. Co., 8 Pick. (Mass.), 90; Feck-heimer vs. National Exch. Bank, 79 Va., 80.
2 Gould vs. Head, 41 Fed. Rep., 240.