The opinion of the court was delivered by
Cunningham, J. :
Large space is given in the brief and argument of the plaintiff in error to a discussion of the question of actual fraud on the part of the Mulvanes. We think, if the findings of the court are to be upheld, that all these questions have been settled and will not need our consideration, so that the first question we are called upon to consider is whether the court erred in refusing to submit the case for final consideration to the jury, and in treating the findings of the jury only as “advisory” and not as binding and conclusive upon the disputed questions of fact. This is but another statement of the question whether the issues made by the pleadings showed a case triable by the jury, or to the court. If the former, then the jury’s findings must stand; if the latter, then the conscience of the judge is the tribunal of last resort as to the facts involved. There is very grave question whether the conduct of the plaintiff was not such in this respect as to waive his right to a jury, if he had such a right. However, we do not care to put the [150]*150discussion upon that point. We are clearly of the opinion that the pleadings were in essence a creditor’s bill, brought for the discovery of fraudulent assets of the Price estate, and for the purpose of distributing these assets among all the creditors who might choose to avail themselves of the relief sought by this litigation. It was not an “action for the recovery of •money or of specific real or personal property.” It was such an action as, from time immemorial, has been recognized and treated as purely of equitable ■cognizance, the settling of the issues in which must be submitted to the conscience of the chancellor.
The plaintiff, however, insists that, even if the question of actual fraud is eliminated, there still remains enough in the case to require judgment to be entered in his favor, the claim being that, inasmuch as the transfer of title to the stock was evidenced only by the delivery of the certificates indorsed in blank, and not by transfer upon the books of the company, as required by our statute, such transfer was such a concealment as to amount to a conclusive presumption and proof of fraud as a matter of law; that, as the transfer of the stock was not made before the death of Price, it could not be made thereafter so as to vest the legal title thereto in the Mulvanes, and, at most, they had only such equitable lien on the stock as would entitle them to receive the amount paid for the same ; that the blank assignment of the certificate of stock was but a power of attorney from Price authorizing the transfer of the title upon the stock-books, which power of attorney his death revoked; that it required the transfer on the stock-books of the company in the lifetime of Price to transfer the ownership of the stock, and this not' having been done the transaction must be deemed to be fraudu[151]*151lent as a matter of law, under section 3 of the act relative to frauds and perjuries, or, at least, it would be such a badge of fraud as to cast upon the Mulvanes the burden of proving that the sale of the stock was made in good faith and upon sufficient consideration, and that they failed in this, as they failed to show the value of certain stocks in a Colorado corporation, which were given to Price as a part of the purchase-price of the salt company’s stock.
All of these questions, and, perhaps, some others analogous thereto, will be solved by determining the effect, as between the parties thereto, of the transfer of stock by a simple passing from the vendor to the vendee of the certificates of stock indorsed in blank. Somewhat is made of the provisions of our statute upon the matter, which is as follows :
“The stock of any corporation created under this act shall be deemed • personal estate, and shall be transferable only on the books of the corporation in such manner as the by-laws may prescribe ; and no person shall at any election be entitled to vote on any stock, unless the same shall have been standing in the name of the person so claiming to vote, upon the books of the corporation at least thirty days prior to such election; but no shares shall be transferred until all previous assessments thereon shall be fully paid.” (Gen. Stat. 1901, § 1286.)
It will be observed that this statute provides that the manner of the transfer of stock upon the books of the company shall be prescribed by the by-laws. It does not appear in this case that any by-law concerning this matter had been adopted.
The stock in a corporation is personal estate. The stock is something apart from the certificates. These but evidence a fact which otherwise exists. They are but paper representations of an incorporeal right, and, [152]*152as such, resemble other muniments of title. The right of stock may exist entirely separately and independently of the certificates.
Certificates of stock are frequently spoken of as securities, but they are not such,' in the proper signification of the term. They have none of the characteristics of negotiable paper; they are simply paper evidences' of the right of the holder to the interest in the corporation described in them. While they are non-negotiable, in the ordinary acceptation of that term, yet they possess one of the attributes of negotiable paper, that of being assignable as between vendor and vendee, pledgor and pledgee, by simple delivery when properly indorsed, and, when thus transferred, pass the title to the extent intended by the parties thereto, as between such parties, not only to the paper evidence of title, but to the shares of stock themselves. The authorities extend this rule no further. As against the corporation itself and third parties claiming rights under the corporation, of course this rule would not obtain. Indeed, it has been held that a provision in the governing statute, declaring that no transfer pf corporate stock shall be valid for any purpose until such transfer shall have been entered on the books, must be limited in its application to the objects sought to be accomplished by the statute, which objects refer to matters growing out of the stockholder’s relation to the corporation and its creditors, and does not make invalid an unregistered transfer, as between vendor and vendee. (Johnson v. Underhill et al., 52 N. Y. 203.)
The foregoing views are fully sustained by the discussion found in Thompson on Corporations, section 730, and Cook on Corporations, section 381.
In Plumb v. Bank of Enterprise, 48 Kan. 484, 29 [153]*153Pac. 699, this court has substantially taken the same view by approaching the proposition in a negative form. It is not to be denied that .very respectable authorities hold the contrary view, but these are in the minority in number and, as it seems to us, hold the more unsatisfactory position.
It is a matter of common knowledge that the constant practice of the commercial world is to pass title to stock in corporations, or impose thereon the burden of collateral obligations, by a simple passing, from hand to hand, of the indorsed paper certificates of stock. Vast volumes of business are transacted upon the faith that such transfer is perfectly good as between the parties thereto who act in good faith, without a formal transfer upon the stock register. We think it is, and so hold.
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The opinion of the court was delivered by
Cunningham, J. :
Large space is given in the brief and argument of the plaintiff in error to a discussion of the question of actual fraud on the part of the Mulvanes. We think, if the findings of the court are to be upheld, that all these questions have been settled and will not need our consideration, so that the first question we are called upon to consider is whether the court erred in refusing to submit the case for final consideration to the jury, and in treating the findings of the jury only as “advisory” and not as binding and conclusive upon the disputed questions of fact. This is but another statement of the question whether the issues made by the pleadings showed a case triable by the jury, or to the court. If the former, then the jury’s findings must stand; if the latter, then the conscience of the judge is the tribunal of last resort as to the facts involved. There is very grave question whether the conduct of the plaintiff was not such in this respect as to waive his right to a jury, if he had such a right. However, we do not care to put the [150]*150discussion upon that point. We are clearly of the opinion that the pleadings were in essence a creditor’s bill, brought for the discovery of fraudulent assets of the Price estate, and for the purpose of distributing these assets among all the creditors who might choose to avail themselves of the relief sought by this litigation. It was not an “action for the recovery of •money or of specific real or personal property.” It was such an action as, from time immemorial, has been recognized and treated as purely of equitable ■cognizance, the settling of the issues in which must be submitted to the conscience of the chancellor.
The plaintiff, however, insists that, even if the question of actual fraud is eliminated, there still remains enough in the case to require judgment to be entered in his favor, the claim being that, inasmuch as the transfer of title to the stock was evidenced only by the delivery of the certificates indorsed in blank, and not by transfer upon the books of the company, as required by our statute, such transfer was such a concealment as to amount to a conclusive presumption and proof of fraud as a matter of law; that, as the transfer of the stock was not made before the death of Price, it could not be made thereafter so as to vest the legal title thereto in the Mulvanes, and, at most, they had only such equitable lien on the stock as would entitle them to receive the amount paid for the same ; that the blank assignment of the certificate of stock was but a power of attorney from Price authorizing the transfer of the title upon the stock-books, which power of attorney his death revoked; that it required the transfer on the stock-books of the company in the lifetime of Price to transfer the ownership of the stock, and this not' having been done the transaction must be deemed to be fraudu[151]*151lent as a matter of law, under section 3 of the act relative to frauds and perjuries, or, at least, it would be such a badge of fraud as to cast upon the Mulvanes the burden of proving that the sale of the stock was made in good faith and upon sufficient consideration, and that they failed in this, as they failed to show the value of certain stocks in a Colorado corporation, which were given to Price as a part of the purchase-price of the salt company’s stock.
All of these questions, and, perhaps, some others analogous thereto, will be solved by determining the effect, as between the parties thereto, of the transfer of stock by a simple passing from the vendor to the vendee of the certificates of stock indorsed in blank. Somewhat is made of the provisions of our statute upon the matter, which is as follows :
“The stock of any corporation created under this act shall be deemed • personal estate, and shall be transferable only on the books of the corporation in such manner as the by-laws may prescribe ; and no person shall at any election be entitled to vote on any stock, unless the same shall have been standing in the name of the person so claiming to vote, upon the books of the corporation at least thirty days prior to such election; but no shares shall be transferred until all previous assessments thereon shall be fully paid.” (Gen. Stat. 1901, § 1286.)
It will be observed that this statute provides that the manner of the transfer of stock upon the books of the company shall be prescribed by the by-laws. It does not appear in this case that any by-law concerning this matter had been adopted.
The stock in a corporation is personal estate. The stock is something apart from the certificates. These but evidence a fact which otherwise exists. They are but paper representations of an incorporeal right, and, [152]*152as such, resemble other muniments of title. The right of stock may exist entirely separately and independently of the certificates.
Certificates of stock are frequently spoken of as securities, but they are not such,' in the proper signification of the term. They have none of the characteristics of negotiable paper; they are simply paper evidences' of the right of the holder to the interest in the corporation described in them. While they are non-negotiable, in the ordinary acceptation of that term, yet they possess one of the attributes of negotiable paper, that of being assignable as between vendor and vendee, pledgor and pledgee, by simple delivery when properly indorsed, and, when thus transferred, pass the title to the extent intended by the parties thereto, as between such parties, not only to the paper evidence of title, but to the shares of stock themselves. The authorities extend this rule no further. As against the corporation itself and third parties claiming rights under the corporation, of course this rule would not obtain. Indeed, it has been held that a provision in the governing statute, declaring that no transfer pf corporate stock shall be valid for any purpose until such transfer shall have been entered on the books, must be limited in its application to the objects sought to be accomplished by the statute, which objects refer to matters growing out of the stockholder’s relation to the corporation and its creditors, and does not make invalid an unregistered transfer, as between vendor and vendee. (Johnson v. Underhill et al., 52 N. Y. 203.)
The foregoing views are fully sustained by the discussion found in Thompson on Corporations, section 730, and Cook on Corporations, section 381.
In Plumb v. Bank of Enterprise, 48 Kan. 484, 29 [153]*153Pac. 699, this court has substantially taken the same view by approaching the proposition in a negative form. It is not to be denied that .very respectable authorities hold the contrary view, but these are in the minority in number and, as it seems to us, hold the more unsatisfactory position.
It is a matter of common knowledge that the constant practice of the commercial world is to pass title to stock in corporations, or impose thereon the burden of collateral obligations, by a simple passing, from hand to hand, of the indorsed paper certificates of stock. Vast volumes of business are transacted upon the faith that such transfer is perfectly good as between the parties thereto who act in good faith, without a formal transfer upon the stock register. We think it is, and so hold. Now, as the court below held as a matter of fact that neither Price nor the Mulvanes were guilty of fraud, and that the Mulvanes paid a full consideration to Price for the stock in question, and as these questions were settled upon the weighing of conflicting evidence by the court, acting within the scope of its authority, we must hold that the transfer from Price to the Mulvanes vested in the Mulvanes, as against Price or any one claiming under him, the full beneficial use and right to the stock, whether such right be called an equitable or legal right, or both, and gave to the Mulvanes the right to have such transfer registered on the stock-books at any time.
We see nothing in the case to require any change of the burden of proof. That burden rests upon the one asserting fraud. Fraud was the gravamen of plaintiff’s action. It must be determined upon'the entire evidence. These considerations require us to resolve all of the contentions of the plaintiff in error against him.
[154]*154Complaint is made that a witness introduced by the plaintiff, who'had been general manager of the salt company, was not permitted to testify as to the amount of earnings of the company during several years succeeding.the time when the Mulvanes became the'owners of the stock. It had been shown that the books of the company contained this information. The testimony of the witness was excluded upon the objection of the defendants that such testimony was not the best evidence. We find no error in this. No showing'was made why the books were not available, and, if available, they were surely the best evidence of the fact sought to be shown.
The plaintiff was not allowed to show by a witness what Price had said to him about having at one time pledged his stock or portions of it as security for his debts. Such evidence would be hearsay, and, so far as is shown in the record, immaterial. We think it was properly excluded.
There are some other claimed errors arising upon the rejection of evidence. We have examined them all and are satisfied that no error was committed in relation thereto. •
A motion for a new trial was filed upon the ground of newly-discovered evidence. The affidavits in support of this ground were made by the .attorneys for plaintiff, and covered matters which they believed one John R. Price would testify to upon another trial, which matters Price himself had disclosed to them in conversations had since the conclusion of the trial. These matters were material and probably a sufficient showing of diligence was made. The defendants, however, filed an affidavit of Price denying in toto the truth of the matter set out in the affidavits filed by plaintiff, and denying that he would testify to the [155]*155matters as set out therein. Thereupon plaintiff had a subpoena issued and served on Price for the purpose of bringing him in to be orally examined upon the hearing of the motion. He did not obey the subpoena and was not present when the motion came on to be heard, because, as he said, he was sick and unable to come. Whereupon the plaintiff asked for an attachment to compel the attendance of Price and a delay of the hearing of the motion until his attendance could be had. This was denied and the motion overruled. It is contended by the plaintiff that the affidavit of Price, denying the facts contained in the affidavits in support of the motion,'and denying that he would give testimony as therein claimed, should have been disregarded, and that the affidavit in support of the motion “should have been taken as prima facie truth.” The statute provides, in regulating the matter of new trials on the ground of newly-discovered evidence, that counter-affidavits may be filed. There can be no réason for this unless the court hearing the motion is required to take them into consideration, to weigh and determine from them all what the reasonable probabilities are as to the effect of the testimony of the absent witness upon the result at another trial. If counter-affidavits were to have no weight, then why permit them to be filed? The court did what it should have done — considered all these conflicting affidavits, and,, having considered them, concluded that no good reason existed in them for granting a new trial. In this we think it was right.
Upon a full consideration of all the points in the case, we find no error manifest, and hence affirm the judgment.
All the Justices concurring.