Bank of Commerce's Appeal

73 Pa. 59, 1873 Pa. LEXIS 40

• Court: Supreme Court of Pennsylvania
• Decided: January 27, 1873
• Status: Published

Opinion

The opinion of the court was delivered, January 27th 1873, by

Agnew, J.

This bill is to make the officers of an expired corporation responsible for alleged negligence in the settlement of the affairs of the corporation and the distribution of its assets, on the ground that the complainant is the holder of an outstanding certificate of stock under an assignment, but without a transfer on the books, or notice to the corporation or these defendants, that the plaintiff held the stock. In point of fact, notice was not given for nearly three years after the dissolution of the corporation and the settlement of its affairs. As between a corporator and the corporation, the records of the corporation, or its stock-book, as it is called, is the evidence of their relation. Meetings of the stockholders, elections and dividends, &c., are regulated by this record. The certificate is but secondary evidence, and is never demanded, except when the stockholder de^ls with the corporation in a contract relation. Such was the case of the Building Association v. Sendmeyer, 14 Wright 67. The assignment of the certificate is only an equitable transfer of the stock, and to be made available must be produced to the corporation and a transfer demanded. As between adverse claimants of the certificate, the possession of it with the transfer upon it is often the test of the title. But when the corporation itself is not dealing with its stockholder on the security of his stock, and is merely performing a corporate duty, its own record is all it needs to consult, for whoever would demand the privileges of a stockholder should produce the evidence of his title and ask to be permitted to participate. These defendants acted officially as the trustees of the expired corporation, to settle its affairs under the powers conferred by the law, and in doing so made their distribution, according to the record of the corporation, which exhibited the membership of its corporation. In doing this, without any notice from the plaintiff of his equitable assignment of the stock, clearly they were not guilty of any negligence, while the loss of the plaintiff was attributable to his own negligence, and negligence on their part is the only ground of his bill. The decree of the Court of Nisi Prius dismissing the bill is affirmed, with costs to be paid by the appellant. .