income of the stock during his life, nevertheless permitted him to sell and transfer the same absolutely to a purchaser, in good faith, for value and without notice. It was held that the company was liable to the cestui que trust. A careful examination of the facts in that case show that it was one of inexcusable negligence on the part of the defendant. Bayard v. Bank, 52 Pa. St. 232, was a case where the defendants, as agents of the commonwealth, issued to Henry D. Gilpin, trustee, certificates of certain stock, and also to Henry D. Gilpin, trustee of Mary Gilpin, certificates of certain stock. Gilpin having deceased, and Thomas F. Bayard having been appointed trustee of Mary Gilpin, the executors of Mr. Gilpin transferred all of said stock to him as "trustee of Mary Gilpin,' and certifieates therefor were issued by the defendants to "Thomas F. Bayard, trustee of Mary Gilpin." Mary Gilpin afterwards died, leaving a will. After her death, Mr. Bayard, as trustee, sold $4,000 of the stock, and authorized its transfer to his vendee. The defendants, on demand, refused to permit the transfer until the terms of the trust were submitted to their attorney, and he should be satisfied that the sale was made in due execution of the trust. It was held that the plaintiff had no right to insist upon being allowed to make a transfer of stock which he held ostensibly in trust for Mary Gilpin, without exhibiting to the defendants an authority to transfer beyond the certificate. The court laid down the following rule, (page 235): "That a bank or other corporation, and also these defendants, are trustees to a certain extent for stockholders, that is, for the protection of individual interests, cannot be denied. They are alike trustees of the property and of the title of each owner. They have in their keeping the primary evidence of title, and they are justly held to proper diligence and care in its preservation. From this it results that they may rightfully demand evidence of authority to make a transfer before they permit it to be made. Their own safety requires that they be satisfied of the right of the person proposing to make a transfer to do what he proposes." Railway Co. v. Humphries, (Miss.) 7 South. Kep. 522, was a case where an executor transferred stock belonging to the estate, after he had been removed by the court from his office as executor. It was held that he had no power to sell the stock after his removal, and hence that the defendant railroad company was liable for its wrongful transfer. Marbury v. Ehlen, 72 Md. 206, 19 Atl. Rep. 648, was a case where stock, standing in the name of a trustee, was permitted to be transferred with constructive knowledge on the part of the defendant corporation of the will under which the stock was held in trust, and also with knowledge that the trustee could not transfer the same without

an order of court. It was held that the defendants, having permitted the transfer to be made without an order of court, were liable.

In Bank v. Cady, 15 App. Cas. 267, the stock in question stood in the name of one Williams. After his death his executors signed a transfer in blank, on the back of the certificates, for the purpose of having the stock transferred into their names as executors, and handed them to their London brokers to send to the company in New York. Blakeway, one of the brokers, fraudulently used the certificates as collateral security for loans made to his firm. The evidence offered in the case showed that the certificates were not "in order," and would not, according to the rules of the New York Stock Exchange, pass from hand to hand. The evidence also showed that the certificates, as indorsed, would not be accepted in delivery on the London Stock Exchange. It was held that the act of the executors did not necessarily imply an intent on their part to transfer the stock to anybody else, but was entirely consistent with their actual intention to transfer it into their own names. Lord HALSBURY, L. C., in the course of his opinion, said, (15 App. Cas. 273): "Now, the form of the certificates, and of that which is intended to be used as a transfer, when a registered owner makes the transfer, appears to me to be all-important. I have intentionally, in what I have said before, refused to adopt the phrase use at the bar, 'that the executors executed the transfer.' The document, such as it is, with the names of the two executors subscribed, will not read so as to be a perfect and intelligible document. The person who begins by describing himself as the owner of the shares is not the person who signs; and, as LINDLEY, L. J., very pertinently inquires: 'What is it that the executors have done? What representation have they made, which they are precluded from denying or explaining away?' The mere form of the document which they have signed certainly does not, in itself, purport to show that they are intending to give a complete title to anybody. But undoubtedly a document may by usage becomes so well understood, in a particular sense, that a person may be well estopped from denying that, when he issues it to the world, it must bear the sense which usage has attached to it. And that brings one to inquire whether it is true that the issue of this document to the world in this form would show that the person signing had intended to give a complete title to any one into whose hands it should come. To my mind, the evidence shows, beyond doubt, that the document might mean at least one of two things,-either that the executors were going to sell these shares and transfer them to someone else, or that they were signing in order that they might be themselves

registered in the books of the company as the legal representatives of the deceased holder, John Michael Williams. Now, if that is all that the document upon the face of it represents,-and I cannot doubt that, when all the evidence is looked to, that is not an unfavorable mode of representing it towards the appellants, let us see what would have been the result if Blakeway, instead of simply tendering the document as security for a loan to himself, had said in plain terms to the bank what I have described as being the representation made by the document itself: 'I tell you [the bank] I have been intrusted with these certificates for only one of two purposes, but I will not explain which, either to sell, or get the names of the owners of them registered in the books of the company.' Can there be any difference between that which is stated in plain terms and that which, as a matter of business, ought to have been inferred from the nature of the document itself? I think none."

We have quoted thus at length from this case because of its high authotity, and also because it was much relied on in argument by the counsel for the complainants in support of his position. We are unable, however, to agree with him in his deductions therefrom. The form of the certificates themselves, in that case, was evidently sufficient to have put the defendant bank upon its inquiry as to the authority of the holder to negotiate them. It appeared thereon that they were "transferable in person or by attorney on the books of the company, only on the surrender and cancellation of this certificate by an indorsement thereof hereon, and in the form and manner which may at the time be required by the transfer regulations of the company. Mere delivery of these certificates, with the indorsement of the executors thereon, did not invest the holder with the ownership thereof, in the sense that no further act was required to perfect his right, the transferrers not being named in the certificate, and not being the registered owners of the shares; and, as stated by LORD WATSON in giving his opinion in the case, (15 App. Cas. 279): "Whatever may be the effect of an instrument so executed, one thing is clear: that it cannot be regarded as, either in law or by custom, equivalent to a certificate and transfer executed by the registered owner himself. Although registration may be obtained upon the production of such evidence, the documents are not 'in order,' or in other words, are not accepted in commercial circles as sufficient vouchers of title, unless they are accompained by an extract of the probate, and an attestation of the genuinesss of the executor's signatures, by the United States consul or other competent officers." Out of five officials of London banks who were examined for the appel

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lants, not one was able to give an instance of a transfer signed by executors having been taken as security, except in that case. We do not see how the case can be considered an authority in support of the complainants' position. Lowry v. Bank, Taney, 310, is a leading case on the subject under consideration. In that case the stock in question had been specifically bequeathed upon certain express trusts, and there was no power to sell it, except for the purpose of paying the debts of the testator. Eight years after the death of the testator, Samuel Jones, one of the executors transferred the stock for his own personal use of which fact the court found, from the circumstances of the case, the bank had notice, and it was therefore held liable. Magnus v. Bank, 36 Ch. Div. 25, was a case where certain trustees transferred stock to the defendant bank as security for a loan. The loan having been paid, the bank, instead of retransferring it to the mortgagors, the trustees, transferred it to a third party, a nominee of one of the trusteees, whereby it became lost to the trust. It was held that a mortgagee whose debt has been paid holds the property in trust to reconvey to the mortgagor. The bank having failed to so reconvey was liable. In that case, therefore, the opportunity of acting dishonestly on the part of one of the trustees, of which he availed himself, was given to him by the breach of duty of the bank. In Tafft v. Railroad Co., 84 Cal. 131, 24 Pac. Rep. 436, the decision turns entirely upon the construction of the power of attorney under which the stock was transferred. The court decided that the power of attorney did not authorize the stock to be transferred in the manner and form that it was transferred, and, furthermore, that it was not transfered, in accordance with the by-laws of the defendant corporation, nor of the provisions of the Civil Code of the state. Chew v. Bank, 14 Md. 299, 318, was a case where the bank transferred stock under a power of attorney from a person who was insane. It was held: (1) That a power of attorney given by a lunatic is void. (2) That a bank transferring stock under a power of attorney takes the risk of its being valid. If the power of attorney is void for any cause, (e. g., if it be forged, or given by a feme covert, infant or lunatic,) the bank is responsible. (3) The fact that it did not know that the power was void cannot help it. It may refuse to recognize the power. Owing to the importance of the question involved in this case, especially to the complainants, and the commendable diligence and zeal displayed by counsel in the trial thereof, we have thus carefully reviewed our former decision, together with the authorities cited in opposition thereto. But we are unable to arrive. at any different conclusion from that therein announced. In our

investigation we have not been unmindful of the fact that the law strives, as far as possible, to protect the interests of the cestuis que trustent. Smith v. Ayer, 101 U. S. 320, 327; Colt v. Lasnier, 9 Cow. 320, 342; Collenson v. Lister, 7 De Gex, M. & G. 634, 637. But, while this is so, it never visits the sins of a wrongdoer upon one who is innocent, in order to find a remedy. That a great

wrong has been committed against the complainants in this case is clearly manifest. But the sole author of that wrong is now beyond the reach of human tribunals. Petition for reargument denied and dismissed, and former decision affirmed.

EAST BIRMINGHAM LAND CO. V. DENNIS.

SUPREME COURT OF ALABAMA. 1888.

(85 Ala. 565.)

Fraudulent Transfer of Shares-Innocent Purchaser.

Somerville, J.: We concur in the conclusion reached by the judge of the city court, that the appellee, Dennis, complainant in the bill, is the owner of the ten shares of stock which are the subject of litigation in the present suit. The testimony satisfactorily proves that the certificate of stock, indorsed in blank by Dearborn, who was the owner on the books of the defendant corporation, was the property of the appellee, and was taken or stolen from his possession without any negligence on his part whatever, several months before it was purchased by the defendant Mudd, who innocently bought and paid value for it some time in March, 1888.

The only question is whether Mudd, who paid full value for this stock, without notice of the complainant's claim to it, acquired a title superior to that of complainant.

The established rule is that no person can ordinarily be deprived of his ownership of property save by his own consent or his negligence. The only exception to this rule is the case of a bona fide purchaser for value of negotiable paper. We have no reference, of course, to the taking of property for public uses by judicial condemnation, which may be done without the owner's consent. It cannot be contended, with any degree of plausibility, that, under the facts of this case, the complainant was guilty of negligence or the want of ordinary care in the custody of the certifi