Vale Mills v. Spalding

Blodgett, J. An inspection of the plaintiffs’ books shows that the stock bid off by the defendant at the execution sale still stands in the name of Saunders, and that for several years after the sale he continued to vote upon the stock as the owner thereof, with the presumed knowledge and assent of the plaintiffs. The general rule is, that a person whose name appears on the books of a corporation is a shareholder both as to the corporation and the public (Thomp. Liab. St., s. 177), and so courts will not ordinarily look beyond the registered shareholder, nor inquire under what equities he holds, lb., s. 178. This rule is manifestly based on the most salutary considerations, and is intended not only for the protection of the public, but also for the benefit of the corporation ; and Fence it is held, that as between the transferee of stock and the corporation, unless the transfer is duly perfected upon the corporation books, the transferee does not become a legal stockholder, nor does the transferer divest himself of his liability *606 as a stockholder, either to the corporation or to its creditors. Ib., s. 217 ; Beecher v. Wells Flouring Mills, 1 M’Crary 62; Stockwell v. St. Louis Mercantile Co., 9 Mo. App. 133; Mfg. Co. v. Smith, 2 Conn. 579; Wood v. Maitland, 10 Phila. 84; Helm v. Swiggett, 12 Ind. 196; Coleman v. Spencer, 5 Blackf. 197. If the doctrine of these authorities is correct, there can of course be no recovery against this defendant by the plaintiffs. But in the absence of authority the same conclusion follows. Having by their records held out and represented Saunders as a stockholder down to the present time, and having also permitted him to act as such without apparent objection, the plaintiffs cannot now be permitted to deny the truth of their representation, impeach his title, and shoulder the burden of a heavy assessment upon the defendant. On the contrary, they must take the responsibilities of the situation in which they have voluntarily placed themselves ; and if they are now remediless to enforce an assessment upon the stock in question for the payment of a debt to one of the stockholders, it results solely from their and his gross laches, from the consequences of which the law will not afford relief. Judgment for the defendant. Clark, and Carpenter, JJ., did not sit: the others concurred.