the company for allowing their stock to be transferred on its books under a power of attorney which he had forged. We do not think it at all necessary to comment at any length upon this singular position; for even if it were possible, as it is not, to preclude the minor heirs from asserting their rights to property received from their father, by reason of any negligence of their guardian, we are unable to perceive any necessary connection between her brother's insolvency and misappropriation of her funds, and the forgery of the children's names, or between such forgery and her omission to open her box in 1871 and examine its contents. There is no circumstance here upon which an estoppel against the plaintiffs can be raised. To create an estoppel against them, there must have been some act or declaration indicating an authorization of the use of their names, by which the company was misled, or a subsequent approval of their use by acceptance of the moneys received with knowledge of the transfer. No act or declaration is mentioned, either of the guardian or her children, which tends in the slightest degree to show that any assent was given to the use of their names. But moreover, neither the guardian, nor the children whilst they were minors, were competent, even by the most formal act, to authorize a transfer and sale of the property. Under the statute of Ohio, the intervention of the probate court was essential to any such proceeding. No inference could, therefore, be drawn from any negligence of theirs in support of a transfer of the property, where no order of that court authorizing a transfer had been made.

There are numerous decisions of the English and American courts in accordance with the views stated. They are cited by counsel in their briefs, and are given in a note to this opinion. (a) We do not think it important to refer to them specially, for no number of adjudications can add to the force of a simple statement of the facts. The decree of the court below in each case must be affirmed; and it is so ordered.

UPTON v. BURNHAM.

(District Court, Northern District of Illinois: 3 Bissell, 431-435. 1873.) STATEMENT OF FACTS.- This was a suit by Upton, assignee in bankruptcy, to recover an unpaid subscription. The shares in the case were purchased by Burnham from Hale. By the certificate they purported to be non-assessable, and were transferable only on the books of the company. No transfer was ever made to Burnham, and he stated to the president that he did not wish a transfer. After the company became insolvent, Burnham admitted that he held some of the stock, and on his showing his certificate his name was entered on the books as a stockholder.

8491. Assignment of stock does not make assignee a stockholder.

Opinion by HOPKINS, J.

Adhering to the views I expressed upon the trial, that the mere assignment of the certificate did not of itself constitute the assignee a stockholder, or create a liability upon the part of such transferee to pay the company the assessment in controversy, in support of which see Humble v. Langston, 7 Mees. & W., 517: Helm v. Swiggett, 12 Ind., 194; Mann v. Currie, 2 Barb., 294; Worrall v.

(a) Davis v. Bank of England, 2 Bing., 3:3; Hilgard v. South Sea Co., 2 P. Wms., 76; Stoman v. Bank of England, 14 im., 475; Taylor v. Midland Railway Co., 28 Beav., 287; Ashby v. Blackwell, 2 Eden, 299; Lowry v. Commercial & Farmers' Bank of Baltimore, Taney, 310 (§§ 467-490, supra); Sewall v. Boston Water-Power Co., 4 Allen, 277; Pratt v. Taunton Copper Co, 123 Mass., 110; Chew v. Bank of Baltimore, 14 Md., 299; Pollock v. National Bank, 7 N. Y., 274; Weaver v. Barden, 49 id., 286; Cohen v. Gwynn, 4 Md. Ch. Dec., 357; Dalton v. Midland R'y Co., 22 Eng. L. & Eq., 452; Swan v. North British Australian Co., 7 Hurlst. & Nor., 603.

Judson, 5 id., 210; Adderly v. Storm, 6 Hill, 624; Marlborough Manuf'g Co. v. Smith, 2 Conn., 579; and also that an equitable holder of stock is not liable to the corporation for stock assessments, Newry R'y Co. v. Moss, 14 Beav., 64, still, I think I erred in directing a verdict for the defendant instead of submitting to the jury the question as to whether the conduct of the defendant was not equivalent to a request or assent on his part to the entry of his name upon the stock book as a stockholder, and also whether the company had not, by entering his name as a stockholder in the stock register, given him the position of a legal member, and recognized the transfer to him as sufficient, notwithstanding its want of conformity to the formal transfer contemplated by its by-laws. There was some testimony given tending to show such facts, which, I think, should have been left to the jury.

§ 492. Transfer on company's books may be waived.

The provision requiring the transfers to be upon the books was for the benefit of the company, and the company could waive it, and if waived at defendant's request, or with his consent, express or implied, he would be liable directly to the company for future assessments.

§ 493. Registry on stock book, effect.

The registry of his name upon the books as a stockholder gave him all the rights of a stockholder, the right to vote and participate in dividends, and converted that which was before an equitable into a legal relation, upon which his liability for assessments would attach. New Albany R. Co. v. McCormick, 10 Ind., 499. A new certificate was not necessary to constitute him a stockholder. Chester Glass Co. v. Dewey, 16 Mass., 94; Chouteau Spring Co. v. Harris, 20 Mo., 382. At the time of the assessment he was a registered stockholder, and as that gave him certain rights and benefits in the company, the law presumes that the registry was at his request. Tompkins v. Wheeler, 16 Pet., 106.

§ 494. Assignment of certificate, effect.

The assignment of the certificate, with notice to the company, conferred protection as against creditors of the assignee, and restrained the company from transferring or consenting to the transfer to any other party without incurring liability to him. Black v. Zacharie, 3 How., 483 (§§ 481-484, supra). It was the duty of the defendant, as between him and the assignee, to pay all assessments after the transfer, although not registered. Brigham v. Mead, 10 Allen, 245; Shaw v. Rowley, 16 Mees. & W., 809; Walker v. Bartlett, 36 Eng. L. & Eq., 368; Huddersfield Canal Co. v. Buckley, 7 Term R., 36. The cases hold that upon an assignment, good as between the parties, this duty attaches. In Hall v. United States Ins. Co., 5 Gill, 484, it is held that when a purchaser of a stock certificate paid an assessment without being registered as required by the charter, he was estopped from setting up such want of registry in an action afterwards brought to collect another assessment; that in paying he had acknowledged his obligation, and was liable to the company as a stockholder without being registered. In Chittenham & Great Western R'y Co. v. Daniels, 7 Eng. R'y Cas., 728, it is also held that a purchaser may be estopped by his representations and made liable for calls before his name is actually substituted upon the registry. See, also, pages 735 and 870 for other cases to same effect, and Eames v. Wheeler, 19 Pick., 442.

§ 495. What will suffice to establish the relation of shareholder.

The doctrine seems to be well settled that a certificate to a party, or registry of his name upon the stock register, is not absolutely necessary to constitute

the legal relation or privity. The purchaser may waive it and be held liable without either a certificate or registry of his name. The corporation may waive the formal transfer and register the purchaser's name without any other transfer than the assignment in blank of the certificate. In view of these principles and the equitable obligations of the purchaser to pay subsequent assessments, slight evidence of mutual recognition by the corporation and purchaser of the relation of stockholder might be sufficient to change the equitable relation into a legal one, so as to make the purchaser liable directly to the company, and I am not prepared to say that the jury in this case might not have been warranted, upon the facts shown, in finding the defendant a stockholder, notwithstanding that a certificate of stock had never been issued to him. The company, after registering his name as such, would be estopped. from setting up that the formal transfer was not made, and after having registered his name it is very questionable whether it could collect of the original holder future assessments, or be allowed to question the sufficiency of the assignment. The company having accepted and substituted another party as stockholder, the liability of the original subscriber ought to terminate with his rights as stockholder. Shortridge v. Bosanquet, 17 Eng. L. & Eq., 331; Ec parte Bagge, 4 Eng. L. & Eq., 72; 1 Redfield on R'ys, 41, and note. In this case the provision in regard to the mode of transfer is in the by-laws and not in the charter, and it may be that its observance is not as indispensable to vest the title in the assignee as it would be if it were in the charter. Chambersburg Ins. Co. v. Smith, 11 Penn. St., 120; 1 Redfield on R'ys, § 42.

Certain principal facts were proven, not admitting of doubt or controversy, while certain others were proven, not of themselves decisive, but as forming the foundation of inferences or conclusions, which inferences or conclusions were for the jury to find. I take it, if the jury should find that both parties waived a formal transfer, they would be bound by such waiver. In view of these considerations, I think a new trial should be granted.

WEBSTER v. UPTON.

(1 Otto, 65-72. 1875.)

ERROR to U. S. Circuit Court, Northern District of Illinois.
Opinion by MR. JUSTICE STRONG.

STATEMENT OF FACTS.-The Great Western Insurance Company, of which the plaintiff below is the assignee in bankruptcy, was incorporated, under the laws of Illinois, in 1857, with general power to insure all kinds of property against both fire and marine losses. Subsequently to its organization its capital was increased to more than $1,000,000, and it was authorized by law further to increase its capital to $5,000,000. It does not appear, however, from the record, that, of the stock subscribed, more than about $222,000 was ever paid in,- a sum equal to nearly twenty per cent. of the par value, leaving over $965,000 of subscribed capital unpaid. In this condition the company went into bankruptcy in 1872, owing a very large sum, equal to, if not greater than, its entire subscribed capital; and Clark W. Upton, the plaintiff, became the assignee. The district court then directed a call to be made for the eighty per cent. remaining unpaid of the capital stock. A call was accordingly made; and, payments having been neglected, the assignee brought this suit against the defendant, averring that he was the holder of one hundred shares, of the par value of $100 each, and, as such, responsible for the eighty per cent. unpaid.

On the trial, evidence was given tending to show that one Hale was the owner of a large amount of the stock of the company, for which he held the company's certificates; and that he had, through his brother, sold one hundred shares to the defendant, on which twenty per cent. had been paid. The books of the company had been destroyed in the great fire in Chicago in 1871; but there was evidence tending to show that the defendant's name was on the stock le lger, and that the defendant transferred, or caused the stock bought from Hale to be transferred, to himself on the books of the company. The district judge submitted to the jury to find whether the defendant actually thus became a stockholder, recognized as such on the books of the company; instructing them that, if he did, he was liable for the eighty per cent. unpaid as if he had been an original subscriber. A verdict and judgment having been recovered by the plaintiff, the case was removed by writ of error to the circuit court, where the judgment was affirmed; and the judgment of affirmance we are now called upon to review.

§ 496. Transferee of stock, liability of, to pay future “calls.”

The leading assignment of error here is that the court below erroneously ruled that an assignee of stock, or of a certificate of stock, in an insurance company is liable for future calls or assessments without an agreement or promise to pay. This, however, is not a fair statement of what the court did rule. The court instructed the jury, in effect, that the transferee of stock on the books of an insurance company, on which only twenty per cent. of its nominal value has been paid, is liable for calls for the unpaid portion made during his ownership, without proof of any express promise by him to pay such calls. This instruction, we think, was entirely correct. The capital stock of an insurance company, like that of any other business corporation, is a trust fund for the protection of its creditors or those who deal with it. Neither the stockholders nor their agents, the directors, can rightfully withhold any portion of the stock from the reach of those who have lawful claims against the company. And the stock thus held in trust is the whole stock, not merely that percentage of it which has been called in and paid. This has been decided so often that it has become a familiar doctrine. But what is it worth if there is no legal liability resting on the stockholders to pay the unpaid portion of their shares, unless they have expressly promised to pay it? Stockholders become such in several ways,- either by original subscription, or by assignment of prior holders, or by direct purchase from the company. An express promise is almost unknown, except in the case of an original subscription; and oftener than otherwise it is not made in that. The subscriber merely agrees to take stock. He does not expressly promise to pay for it. Practically, then, unless the ownership of such stock carries with it the legal duty of paying all legitimate calls made during the continuance of the ownership, the fund held in trust for creditors is only that portion of each share which was paid prior to the organization of the company in many cases not more than five per cent.; in the present, only twenty. Then the company commences business and incurs obligations, representing all the while to those who deal with it that its capital is the amount of stock taken, when in truth the fund which is held in trust for creditors is only that part of the stock which has been actually paid in. This cannot be. If it is, very many corporations make fraudulent representations daily to those who give them credit. The Great Western Insurance Company reported to the auditor of public accounts, as required by law, that the amount of its capital stock outstanding (par value of shares $100 each)

was $1,188,000, that the amount of paid-up capital stock was $222,831.42, and that the amount of subscribed capital for which the subscribers or holders. were liable was $965,168.58. This report was made on the 10th of January, 1871. Thus those who effected insurances with the company were assured that over $1,000,000 were held as a trust fund to secure the company's payment of their policies. But, if the subscribers and holders of the shares are not liable for the more than eighty per cent. unpaid, the representation was untrue. Persons assured have less than one-fifth the security that was promised them. This is not what the statutes authorizing the incorporation of the company contemplated. The stock was required to be not less than a given amount, though the company was authorized to commence business when five per cent. of that amount was paid in. Why fix a minimum amount of stock if all of it was not intended to be a security for those who obtained insurance? There is no conceivable reason for such a requirement, unless it be either to provide for the creditors a capital sufficient for their security, or to secure the stockholders themselves against the consequences of an inadequate capital. The plain object of the statute, therefore, would be defeated if there is no liability of the stockholder to pay the full prescribed amount of each share of his stock. With this plain object of the legislature in view, it must be assumed, after the verdict of the jury, the defendant voluntarily became a stockholder. Either he must have designed to defeat the legislative intent, or he must have consented to carry it out. The former is not to be presumed; and if the latter was the fact, coming as he did into privity with the company, there is a necessary implication that he undertook to complete the payment of all that was unpaid of the shares he held whenever it should be demanded.

§ 497. An obligation may be impliedly assumed.

To constitute a promise binding in law, no form of words is necessary. An implied promise is proved by circumstantial evidence; by proof of circumstances that show the party intended to assume an obligation. A party may assume an obligation by putting himself into a position which requires the performance of duties.

§ 498. The original holders of stock of a corporation are liable for the unpaid balances.

What we have said thus far is applicable to the case of an original subscriber to the stock, and equally to a transferee of the stock who has become such by transfer on the books of the company. There are, it is true, decisions of highly respectable courts to be found, in which it was held that even a subscriber to the capital stock of an incorporated company is not personally liable for calls, unless he has expressly promised to pay them, or unless the act of incorporation or some statute declares that he shall pay them. Such was the decision of a supreme court of New York in Fort Edward & Fort Miller Plank Road Co. v. Payne, 17 Barb., 567. A similar ruling was made in Kennebec & Portland R. Co. v. Kendall, 31 Me., 470. A like ruling has also been made in Massachusetts. In most, if not all, of these cases, it appeared that the law authorizing the incorporation of the companies had provided a remedy for non-payment of calls or assessments of the unpaid portions of the stock taken. The company was authorized to declare forfeited or to sell the stock for default of the stockholder; and, the law having given such a remedy, it was held to be exclusive of any other. Yet in them all it was conceded that, if the statute had declared the calls or assessments should be paid, an action of assumpsit might be maintained against the original stockholder on a promise to pay, im