articles are filed,' or by transfer of the shares together with registration of the transferee's name upon the books of the company. No vote of admission is requisite; for the rights and privileges of membership are incident to the ownership of stock. And one whose subscription has been accepted by the company, although he has paid nothing thereon, is none the less entitled to vote at corporate meetings. All persons capable of making a contract may become members by subscription. Thus a married woman may become a stockholder with respect to her separate estate. And persons under disabilities may acquire membership by gift, bequest or devolution. Mandamus will lie to compel the registration of legatees. But no one can be made a member of a corporation against his will. Thus the dissenting minority of a mutual insurance company consolidating with another, are not members of the new company unless they expressly consent to become so.8 company for a given number of shares differs in some respects from that of a person who has merely applied for shares, and has had them allotted to him. In the latter case communication of the fact of the allotment, coupled with the entry of the name on the share register, is needed to establish the binding contract to take the shares, which in the former case is established by the simple act of signing the memorandum of association. . . . The single act of signing the memorandum, therefore, puts the person signing it in exactly the same situation as regards the company, as the person who has applied for shares, has had them allotted to him, and has had his name entered on the register." "Signing the Memorandum of Agreement and its Consequences,” 14 Sol. J. & Rep., (1869) 92. 1 Concordia Savings & Aid Assoc. v. Read, (1883) 93 N. Y. 474. 2 Vide infra, § 66. "A party can in general not otherwise become a member of such a company than by himself subscribing to the under taking, or stepping into the place of an original subscriber." Walford on Railways, 253. 3 Gilbert v. Manchester Iron Co., 11 Wend. 627; Sargent v. Franklin Ins. Co., 8 Pick. 90. The constitution or by-laws of the company, however, may require an election to membership in addition to the mere ownership of stock. Commonwealth v. Gill, (1838) 3 Whart. 228. 4 Downing v. Potts, 3 Zabriskie, 66; Gray v. Portland Bank, 3 Mass. 364; Rex v. Bank of England, 2 Doug. 524; Angell & Ames on Corporations, (11th ed.) § 113. 5 Mathewman's Case, L. R. 3 Eq. 781; Howard v. Bank of England, 19 L. R. 3 Eq. 295; In re Richardson, L. R. 3 Eq. 588; In re Pugh & Sharman's Case, L. R. 13 Eq. 566; Roman v. Fry, 5 J. J. Marsh. 634; In re Reciprocity Bank, 22 N. Y. 9. 6 Leeds &c. Ry. Co. v. Fearnley, 18 L. J. (N. S.) Ex. 330. 7 King v. Worcester Canal Co., 1 Man. & R. 529. 8 Hamilton Mutual Ins. Co. v. Hobart, 2 Gray, 543. § 62. Membership not dependent upon possession of certificate. The possession of a stock certificate is not necessary to the ownership of shares; it is merely a convenient voucher thereof.1 Neither do the stockholder's liabilities depend upon his having received a certificate. If his name. appear upon the list of stockholders he is answerable for the corporate obligations although a certificate may never have been issued to him. Nor are his rights as a stockholder dependent thereon. Thus, he may transfer his stock before the certificates have been issued, and after having received his certificates neither his rights nor his liabilities depend upon his retention of them. He may hypothecate them, or trans 66 1 Hawley v. Upton, 102 U. S. 314; Turnbull v. Payson, 95 U. S. 418; Dennis v. Kennedy, (1854) 19 Barb. 517; Boston & A. R. Co. v. Pearson, (1880) 128 Mass. 445; Chester Glass Co. v. Dewey, 16 Mass. 94; Agricultural Bank v. Burr, 24 Me. 256; Agricultural Bank v. Wilson, 24 Me. 273; Buffalo & N. Y. City R. Co. v. Dudley, 14 N. Y. 336; Beckett v. Houston, 32 Ind. 393; Farrar v. Walker, 3 Dillon, 506; First National Bank v. Gifford, 47 Iowa, 575; In re Election of Directors of the St. Lawrence Steamboat Co., (1882) 44 N. J. 529, 539, holding that the books of the company are the only evidence of who are the stockholders, and, as such, are entitled to vote at elections;" New Hampshire Central R. Co. v. Johnson, 30 N. H. 390; Dows v. Naper, 91 Ill. 44; Minneapolis Harvester Works v. Libby, 24 Minn. 327; Wheeler v. Walker, 45 N. H. 355; Strong v. Smith, 15 Hun, 222; Commonwealth v. Woodward, 4 Phila. 124. In Galveston City v. Sibley, (1882) 56 Tex. 269, the heirs of one to whom a negotiable certificate of stock in a land company had been issued, sought to establish their rights thereto, the certificate having been lost or destroyed several years before. The court decreed that, in view of the fluctuating value of the stock, the uncertainty when it would be necessary to give a bond of indemnity in case the plaintiffs should seek to obtain exclusive control of their share in the capital stock of the company, and the number of the plaintiffs, the case should remain open on the docket in the trial court, until it could be finally dismissed without prejudice to either party; that the plaintiffs should have the privileges of stockholders, so long as no superior title to the certificate was set up, and should give the company a bond of indemnity against all loss in case a superior title should be established, and also give other bonds whenever they claimed exclusive ownership of any of the capital stock. 2 Mitchell v. Beekman, (1885) 64 Cal. 117. 3 Butterfield v. Spencer, (1856) 1 Bosw. 1. 4 The registered stockholder remains a member although he may have pledged his certificates. Vail v. Hamilton, 85 N. Y. 453; s. c. 20 Hun, 355; Merchants' Bank v. Cook, 4 Pick. 405; Hoppin v. Buffum, (1870) 9 R. I. 513; Ex parte Willcocks, 7 Cowen, 402; McDaniels v. Flower Brook Manuf. Co., 22 Vt. 274. The fer them with a power of attorney endorsed thereon authorizing the purchaser to have the transfer registered upon the books of the company, and yet, until the transfer has been registered, he may continue to vote at corporate meetings,1 he may continue to receive dividends, and his liabilities to the corporation and its creditors remain unaffected. So, conversely, the mere possession of stock certificates does not constituto their holder a share-owner in the corporation. § 63. Acquisition of membership — (a) By subscription prior to incorporation. In the case of original subscriptions made for the purpose of effecting the organization of the company, a subscriber becomes a stockholder only upon the performance of all the conditions precedent to corporate existence which may be required by the charter or general act of incorporation. Before the company enters upon its corporate fact that a pledgee of corporate stock has, without authority from the pledgor, caused it to be registered on the company's books in his name as trustee, does not authorize him to vote thereon; and the pledgor need not, in order to maintain an action to restrain such voting, show that his rights would thereby be injuriously affected. McHenry v. Jewett, 26 Hun, (1882) 453. 1 McNeil v. Tenth National Bank, 46 N. Y. 325; State v. Ferris, 42 Conn. 560; Evans v. Bailey, 66 Cal. 112; People v. Robinson, (1885) 64 Cal. 373. If the right to vote be disputed, the books of the company are the only evidence to which it can be required to look. In re Long Island R. Co., 19 Wend. 37; Smith v. American Coal Co., 7 Lansing, 317; In re North Shore Staten Island Ferry Co., 63 Barb. 556; Johnston v. Jones, 23 N. J. Eq. 216; In re Election of Directors of St. Lawrence Steamboat Co., (1882) 44 N. J. 529, 539; People v. Robinson, 64 Cal. 373. The real owner having acquiesced in the control of the stock by the reg istered holder until a contested election, equity will not interfere with the result. Hoppin v. Buffum, (1870) 9 R. I. 513. 2 McNeil v. Tenth National Bank, 46 N. Y. 325. 3 In Henkle v. Salem Manuf. Co., (1884) 39 Ohio St. 547, the holder of shares of stock merely as collateral security for a debt without a transfer thereof to him on the books of the company, was held not to be the legal or equitable owner of the stock, and therefore not liable as a stockholder. In Baker v. Woolston, (1885) 27 Kan. 185, it was held that where a person holds stock in a bank merely as collateral securety, he is not such part of the corporation as to be bound by the knowledge of its offi cers. 5 Spear v. Crawford, 14 Wend. 20; s. c. 28 Am. Dec. 513; Burrall v. Bushwick R. Co., 75 N. Y. 211; Buffalo &c. R. Co. v. Dudley, 14 N. Y. 337; Milford & C. T. Co. v. Brush, 10 Ohio, 111; s. c. 36 Am. Dec. 78; Sedalia, W. &c. Ry. Co. v. Wilker existence, however, he may withdraw;1 and although he may have been active in persuading others to subscribe, he can not be held liable for any part of his subscription. For subscriptions to the stock of a company to be formed in the future, are not mutual promises between the subscribers themselves' son, (1886) 83 Mo. 235; East Tennessee &c. R. Co. v. Gammon, 5 Sneed, 567; Mobiel &c. R. Co. v. Yaudal, 5 Sneed, 294; Connecticut & P. Rivers R. Co. v. Bailey, (1852) 24 Vt. 465; s. c. 58 Am. Dec. 181, where, however, it is held that the subscriber can not avail himself of any act of the company which the State may set up as a ground of forfeiture; Selma &c. R. Co. v. Tipton, 5 Ala. 787; s. c. 39 Am. Dec. 344; New Albany &c. R. Co. v. McCormick, 10 Ind. 499; s. c. 71 Am. Dec. 337; Instone v. Frankfort Bridge Co., 2 Bibb, 576; s. c. 5 Am. Dec. 638; Waukon &c. R. Co. v. Dwyer, 49 Iowa, 121; Wight v. Shelby R. Co., (1885) 16 B. Mon. 47; s. c. 63 Am. Dec. 522, holding that whether the company was properly organized or not according to its charter is a question that can not be made collaterally, but can only be made by a direct proceeding against the corporation; Penobscot R. Co. v. White, 41 Me. 512; s. c. 66 Am. Dec. 257; Penobscot R. Co. v. Dummer, 40 Me. 172; s. c. 63 Am. Dec. 654; Thigpen v. Mississippi Central R. Co., 32 Miss. 347; 1 Morawetz on Corporations, § 56. In Temple v. Lemon, (1886) 112 Ill. 51, it was held that when the aggregate amount of the capital stock is fixed, a subscriber becomes liable only after the whole is subscribed, and that, until then, he is not liable for corporate debts, in the absence of any circumstances of estoppel. 1 Stanton v. Wilson, 2 Hill, 153; Buffalo &c. R. Co. v. Dudley, 14 N. Y. 336; Ashuelot &c. Co. v. Hoit, 56 N. H. 548; Athol Music Hall Co. v. Carey, 116 Mass. 473. 2 Muncy Traction Engine Co. v. Green, (Pa. 1888) 13 Ätlan. Rep. 747; S. c. 12 Cen. Rep. 386. 66 3 Athol Music Hall Co. v. Carey, 116 Mass. 473. If parties mutually agree to subscribe for shares in a corporation to be formed in the future, there is no unconditional agreement to become shareholders as soon as the corporation is formed; but it is contemplated that the parties shall perform the additional act of executing the statutory contract of membership by subscription upon the stock-books, before they shall become shareholders. In such a case there is no offer which the corporation, when formed, can accept; and the parties do not become stockholders and liable to be charged as such, unless they carry out their agreement by subscribing for the shares." Morawetz on Corporations, (2d ed.) § 49, citing Lake Ontario Shore R. Co. v. Curtiss, (1880) 80 N. Y. 219; Quick v. Lemon, (1883) 105 Ill. 578, 585; Mt. Sterling Coal Road Co. v. Little, (1879) 14 Bush, 429; Strasburg R. Co. v. Echternacht, (1853) 21 Pa. St. 220; s. c. 60 Am. Dec. 49. But see Thrasher v. Pike County R. Co., 25 Ill. 393, holding that such a mutual agreement may be binding as a contract and incapable of revocation; and that since the contract is made for the benefit of the corporation, although it is not a party to it, the corporation, upon the general principles of contracts governing such cases, nor binding upon them as such. But upon the organization of the corporation a subscription made prior thereto becomes binding,' the prospective rights of membership being deemed a sufficient consideration to support the contract.2 64. (b) By subscription after incorporation - Acceptance by the company.- A subscription made after the organization of the corporation does not constitute the subscriber a shareholder until it be accepted by the company,3 and until should be allowed to sue upon it and recover damages for its breach. 1 Minneapolis Thresher - Machine Co. v. Crevier., (1888) 39 Minn. 417, which was an action by a corporation to recover the amount of a subscription to its capital stock. The complaint alleged that the defendant and others entered into a certain agreement with J. S. M., in view of the organization of a company for manufacturing purposes, and subscribed certain sums to constitute the capital stock; that in pursuance of the agreement the corporation was organized by the defendant and the other subscribers; that such stock subscriptions were transferred to the corporation; that all the conditions of such agreement had been fulfilled as thereby required; that calls had been made for the payment of such subscriptions, and due notice given to defendant to pay the same prior to the commencement of this action. It was held that these allegations were sufficient to make a prima facie case of liability against the defendant. 2 Waterman on Corporations, 167, citing Lake Ontario R. Co. v. Mason, 16 N. Y. 451; Hamilton & D. Plank R. Co. v. Rice, 7 Barb. 157; Stanton v. Wilson, 2 Hill, 153; Barker v. Bucklin, 2 Denio, 45; Schenectady &c. Plank R. Co. v. Thatcher, 11 N. Y. 102; Barnes v. Perine, 12 N. Y. 18. See also, Union Turnpike Co. v. Jenkins, 1 Caines, 381; Cottage St. Church v. Kendall, 121 Mass. 528. 3 Gray v. Portland Bank, 3 Mass. 364; Sewall v. Eastern R. Co., 9 Cush, 5; Carlisle v. Saginaw Valley &c. R. Co., 27 Mich. 318; Parker v. Northern Central &c. R. Co., 33 Mich. 23; Northern Central R. Co. v. Eslow, 40 Mich. 222; Busey v. Hooper, 35 Md. 15; s. c. 6 Am. Rep. 350. Mere subscription to preferred capital stock, after the organization of the company, while it constitutes a valid contract on the part of the company to issue the stock to the subscriber upon his paying for it, and on his part to pay for it, does not give him an interest in the company, nor vest in him the title to the stock. St. Paul &c. R. Co. v. Robbins, 23 Minn. 439. The English Companies Act of 1862 (25 & 26 Vic., ch. 89, § 23) declares that the subscribers of the memorandum of association shall be members of the company, and then proceeds thus: "And every other person who has agreed to become a member of a company under this Act, and whose name is entered on the register of members, shall be deemed to be a member of the company." As a general rule, in order to fix a person with membership, it must be proved that the person applied for shares, and that his application was accepted by the company, such accept |