Rescission of transfer.

Subsequent transfer to be effectual in certain cases.

RESCISSION OF TRANSFER.

SECTION 7. If the indorsement or delivery of a certificate, (a) was procured by fraud or duress, or

(b) was made under such mistake as to make the indorsement or delivery inequitable; or

If the delivery of a certificate was made

(c) without authority from the owner, or

(d) after the owner's death or legal incapacity, the possession of the certificate may be reclaimed and the transfer thereof rescinded, unless :

(1) The certificate has been transferred to a purchaser for value in good faith without notice of any facts making the transfer wrongful, or,

(2) The injured person has elected to waive the injury, or has been guilty of laches in endeavoring to enforce his rights.

Any court of appropriate jurisdiction may enforce specifically such right to reclaim the possession of the certificate or to rescind the transfer thereof and, pending litigation, may enjoin the further transfer of the certificate, or impound it.

SECTION 8. Although the transfer of the certificate or of shares represented thereby has been rescinded or set aside, nevertheless, if the transferee has possession of the certificate or of a new certificate representing part or the whole of the same shares of stock, a subsequent transfer of such certificate by the transferee, mediately or immediately, to a purchaser for value in good faith, without notice of any facts making the transfer wrongful, shall give such purchaser an indefeasible right to the certificate and the shares represented thereby.

Incomplete transfer.

Effect of

attempted transfer, etc.

INCOMPLETE TRANSFER.

SECTION 9. The delivery of a certificate by the person appearing by the certificate to be the owner thereof without the indorsement requisite for the transfer of the certificate and the shares represented thereby, but with intent to transfer such certificate or shares shall impose an obligation, in the absence of an agreement to the contrary, upon the person so delivering, to complete the transfer by making the necessary indorsement. The transfer shall take effect as of the time when the indorsement is actually made. This obligation may be specifically enforced.

SECTION 10. An attempted transfer of title to a certificate or to the shares represented thereby without delivery of the certifi

cate shall have the effect of a promise to transfer, and the obligation, if any, imposed by such promise shall be determined by the law governing the formation and performance of contracts.

WARRANTIES.

transfer.

SECTION 11. A person who for value transfers a certificate, Warrant of including one who assigns for value a claim secured by a certificate, unless a contrary intention appears, warrants

(a) That the certificate is genuine,

(b) That he has a legal right to transfer it, and

(c) That he has no knowledge of any fact which would impair the validity of the certificate.

In the case of an assignment of a claim secured by a certificate, the liability of the assignor upon such warranty shall not exceed the amount of the claim.

pledgee, etc.

SECTION 12. A mortgagee, pledgee, or other holder for se- Mortgagee, curity of a certificate who in good faith demands or receives payment of the debt for which such certificate is security, whether from a party to a draft drawn for such debt, or from any other person, shall not by so doing be deemed to represent or to warrant the genuineness of such certificate, or the value of the shares represented thereby.

ATTACHMENT.

Attach

SECTION 13. No attachment or levy upon shares of stock for which a certificate is outstanding shall be valid until such certi- ment, etc. ficate be actually seized by the officer making the attachment or levy, or be surrendered to the corporation which issued it, or its transfer by the holder be enjoined. Except where a certificate is lost or destroyed, such corporation shall not be compelled to issue a new certificate for the stock until the old certificate is surrendered to it.

SECTION 14. A creditor whose debtor is the owner of a certificate shall be entitled to such aid from courts of appropriate jurisdiction, by injunction and otherwise, in attaching such certificate or in satisfying the claim by means thereof as is allowed at law or in equity, in regard to the property which cannot readily be attached or levied upon by ordinary legal process.

Aid to creditor, etc.

LIENS.

SECTION 15. There shall be no lien in favor of a corporation Liens. upon the shares represented by a certificate issued by such corporation, and there shall be no restriction upon the transfer of

Alteration and loss of certificate, etc.

Jurisdiction

of courts, etc.

Issue of new certificate not to relieve

shares so represented by virtue of any by-law of such corporation, or otherwise, unless the right of the corporation to such lien or the restriction is stated upon the certificate.

ALTERATION AND LOSS OF CERTIFICATES.

SECTION 16. The alteration of a certificate, whether fraudulent or not and by whomsoever made, shall not deprive the owner of his title to the certificate and the shares originally represented thereby, and the transfer of such a certificate shall convey to the transferee a good title to such certificate and to the shares originally represented thereby.

SECTION 17. Where a certificate has been lost or destroyed, a court of competent jurisdiction may order the issue of a new certificate therefor on service of process upon the corporation and on reasonable notice by publication, and in any other way which the court may direct, to all persons interested, and upon satisfactory proof of such loss or destruction and upon the giving of a bond with sufficient surety to be approved by the court to protect the corporation or any persons injured by the issue of the new certificate from any liability or expense, which it or they may incur by reason of the original certificate remaining outstanding. The court may also in its discretion order the payment of the corporation's reasonable costs and counsel fees.

The issue of a new certificate under an order of the court as provided in this section, shall not relieve the corporation from from liability, liability in damages to a person to whom the original certificate

etc.

has been or shall be transferred for value without notice of the proceedings or of the issuance of the new certificate.

General provisions.

Interpretation of act.

Indorsement of certificate, etc.

GENERAL PROVISIONS.

SECTION 18. In any case not provided for by this act, the rules of law and equity, including the law merchant, and in particular the rules relating to the law of principal and agent, executors, administrators and trustees, and to the effect of fraud, misrepresentation, duress or coercion, mistake, bankruptcy, or other invalidating cause, shall govern.

SECTION 19. This act shall be interpreted and construed in such manner as to effectuate its general purpose to make uniform the law of those states which enact it.

SECTION 20. A certificate shall be deemed to be indorsed when an assignment or a power of attorney to sell, assign, or transfer the certificate or the shares represented thereby is written on the certificate and signed by the person appearing by the certificate

to be the owner of the shares represented thereby, or when the signature of such person is written without more upon the back of the certificate. In either of such cases a certificate shall be deemed to be indorsed though it has not been delivered.

SECTION 21. The person to whom a certificate was originally issued shall be deemed to be the person appearing by the certificate to be the owner thereof, and of the shares represented thereby, until and unless he indorses the certificate to another specified person, and thereupon such other specified person shall be deemed to be the person appearing by the certificate to be the owner thereof until and unless he also indorses the certificate to another specified person. Subsequent special indorsements may be made with like effect.

Person to cate was issued to be originally deemed the

whom certifi

owner, etc.

DEFINITIONS.

SECTION 22. (1) In this act, unless the context or subject Certain terms matter otherwise requires

"Certificate" means a certificate of stock in a corporation organized under the laws of this state or of another state whose laws are consistent with this act.

66

Delivery means voluntary transfer of possession from one person to another.

"Person" includes a corporation or partnership or two or more persons having a joint or common interest.

To "purchase" includes to take as mortgagee or as pledgee. "Purchaser" includes mortgagee or pledgee.

"Shares" means a share or shares of stock in a corporation organized under the laws of this state or of another state whose laws are consistent with this act.

"State" includes state, territory, district and insular possession of the United States.

66

99 Transfer means transfer of legal title.

66 Title means legal title, and does not include a merely equitable or beneficial ownership or interest.

"Value" is any consideration sufficient to support a simple contract. An antecedent or pre-existing obligation, whether for money or not, constitutes value where a certificate is taken either in satisfaction thereof or as security therefor.

(2) A thing is done in "good faith" within the meaning of this act, when it is in fact done honestly, whether it be done negligently or not.

defined.

SECTION 23. The provisions of this act shall apply only to To apply certificates issued after the act takes effect.

only to certain certificates.

Repeal.

Uniform

Stock Transfer Act.

Capital stock

of companies

specially

chartered,

SECTION 24. All acts and parts of acts inconsistent herewith are hereby repealed.

SECTION 25. This act may be cited as the Uniform Stock Transfer Act.

SECTION 26. This act shall take effect upon its passage. [Approved March 5, 1910.

SECTION 29. The amount of the capital stock of every corporation which is established by special charter and which is subject to the provisions of this chapter, shall, 1829, 53, 8. at the first meeting of the corporation, unless the charter

how limited.

1808, 65, § 3.

R. S. 38, § 9.

G. S. 60, § 9.

Capital stock,

how increased or reduced.

1829, 53, § 3.

otherwise provides, be fixed and limited by the corporation and divided into shares, of which a record shall be made by the clerk.

Revised Laws, Chapter 109, § 18.

SECTION 18. The par value of shares in the capital stock of a corporation, if organized for any of the purposes mentioned in sections five, six, eleven and thirteen of chapter one hundred and ten, may be such amount, not less than twenty-five nor more than one hundred dollars, as may be fixed in its agreement of association, and if organized for any of the purposes mentioned in sections seven and eight of said chapter, may be one hundred dollars or any other amount fixed in its agreement of association. Such corporation may, at a meeting of stockholders called for the purpose, change the par value of its shares if a certificate of such change shall, within ten days thereafter, be made, signed and sworn to by its president, treasurer and a majority of its directors, or other officers having the powers of directors, and, having been approved as to its form by the commissioner of corporations, be filed in the office of the secretary of the commonwealth. The par value of the shares of the capital stock of all other corporations, unless otherwise expressly provided by law, shall be one hundred dollars, and any corporation which may be organized with shares of a par value other than one hundred dollars may, in like manner, change the par value to that amount.

SECTION 30. The capital stock of every corporation which is subject to the provisions of this chapter, the amount whereof has been fixed and limited by such cor1851, 133, § 8. poration according to law, shall remain so fixed, subject to increase or reduction pursuant to the provisions of this chapter.

R. S. 38, § 8.

G. S. 60, § 8; 61, § 6.

1870, 224,

§ 21.

P. S. 106, § 33.