evidences of right to transfer that may accompany it, are sent to the registrar. If no objections appear, the Registrar thereupon signs the new certificate.

These services were called into use after the Schuyler frauds. Robert Schuyler as transfer agent of the New York & New Haven Railroad issued a large number of certificates to his own brokerage firm and others in excess of the authorized capital of the railroad, involving it and innocent purchasers of shares in extensive and costly litigation."

A "registered" stock is one to which the services of a "registrar" have been applied, but the term "registered bond" means a bond assimilated to the rights of transfer of stock, as distinguished from an unregistered bond that passes from hand to hand without formal transfer. The New York Appellate Division (First Department) in speaking of registering a bond issue said:

"It was evidently the intention to assimilate the right of transfer and retransfer of the bonds when registered to the transfer of shares of stock in an incorporated company, and the effect, I think, of this arrangement was to place registered bonds and shares of stock of a corporation upon a similar footing as to the requisites necessary for a transfer, so that the owner of the bonds when registered should be protected from loss, theft or embezzlement."2 The term registered bond, was thus defined in a New Jersey case:13

"A registered bond is one which is a simple certifi

11. See Mechanics' Bank v. New York & New Haven R. R. (1856), 13 N. Y. 599, and New York & New Haven Railroad Co. v. Schuyler (1865), 34 N. Y. 30.

12. Clarkson Home v. Chesapeake & O. R. Co. (1904), 92 N. Y. App. Div. 491, 87 N. Y. Supp. 348.

13. Benwell v. Mayor, etc., of City of Newark (1897), 55 N. J. Eq. 260, 36 Atl. 668.

cate of indebtedness, in favor of a particular individual, payable at a day named, with interest at days named. The name of the payee is entered on the books of the corporation debtor-municipal or private-as the registered owner, or, if it be a government bond, on the register of the government. On the days when, by the terms of the bond or certificate of indebtedness, the interest falls due, it is paid directly to the registered creditor, without presentation of the bond,-usually by check drawn to his order and sent by mail, or, if he so demands, by cash in hand; but, by long-settled course of practice, the payment is made by check to the order of the creditor. These bonds or certificates of indebtedness are not negotiable, and can be transferred only by an entry on the books of the debtor corporation, with a proper indorsement on the bond itself, or by the issue of a new certificate, if it be a government indebtedness. The peculiar value of this class of securities lies in the fact that it is not necessary to produce them to the debtor at each time that the interest is due, and the danger of loss by robbery or fire is entirely removed."

This case is also authority for the rule that the proper remedy to enforce the conversion of a "convertible coupon bond" into a "registered bond" is specific performance.

§ 77. Definition and Effect of "Countersigning." The term "countersigning" as applied to certificates of stock has been defined by the New York Court of Appeals as follows:

"To countersign an instrument is to sign what has already been signed by a superior, to authenticate by an

14. Fifth Avenue Bank v. Forty-second St., etc., Co. (1893), 137 N. Y. 231; 33 N. E. 378, 19 L. R. A. 331, 33 Am. St. Rep. 712.

additional signature, and usually has reference to the signature of a subordinate in addition to that of his superior by way of authentication of the execution of the writing to which it is affixed, and it denotes the complete execution of the paper.

The effect of countersigning the Court in this case said was to declare "in the most formal manner that it (the stock certificate in question) had been properly executed by the defendant (in this case the principal, and not the countersigning agent) and that every essential requirement of the law and of the by-laws had been performed to make it the binding act of the company.

§ 78. Right of Corporation to place Restrictions upon Transfer and Issue of its Stock Incident to Services of a Countersigning Agent. A Pennsylvania opinion1 considered the effect of statutory requirements relating to signatures upon certificates of stock and implied rights of the corporation to protect these signatures. The Court said:

"The Act of June 24th, 1895, P. L. 258, provides that any stockholder of a corporation shall be entitled to receive a certificate of the number of shares standing to his credit on the books, 'which certificate shall be signed by the president or vice-president or other officer designated by the board of directors, countersigned by the treasurer, and sealed with the common seal of the corporation.' This, however, does not prevent the corporation, if it is willing to give such certificates, from taking such further precautions as it sees fit to provide against the simulation of such signatures; and if a party who receives a certificate signed and sealed as provided by the act of assembly is, at the same time, given express notice

15. Dollar Savings Fund and Trust Co. v. Pittsburgh Plate Glass Co. (1906), 213 Pa. St. 307, 62 Atl. 916, 5 Am. & Eng. Anno. Cas. 248.

that the certificate is not good and will not be recognized as a certificate until it has another signature, such party cannot then pay money for such stock and claim that the company is in equity estopped to deny the validity of the certificate, and bound to recognize the party as a stockholder or to pay him damages, if the certificate was in fact fraudulently or improperly issued."

§ 79. Liability of Companies for Acts of their Agents, Registrars, etc. There are a number of cases, in which the liability of corporations for the acts or omissions of their own transfer agents, registrars and the like have been considered. An inquiry in regard to these, however, is not deemed of importance here, because my purpose is to treat of agency of this kind as of and in itself the business of an independent company, which it sets itself up to perform as the agent of whomsoever applies to it. As holding itself out for such purpose and for a consideration of reward for its services it might place its principal or customer in some attitude of responsibility to one misled by its errors, frauds or mistakes, but at the same time just as with any other agent, it would incur a liability to its principal or customer. The phrase "transfer agent" seems a little misleading. It is rather nomen generalissimum. The company really is no more an agent than any one else is an agent. It is merely open for employment in a particular kind of work, and represents itself as competent to perform that work.

That a trust company in business as a transfer agent, or "registrar of transfers" may involve liability of one of its corporate customers, appears, by way of argument, in a recent case.16 In this case there was a

16. Dollar Savings Fund & Trust Co. v. Pittsburgh Plate Glass Co. (1906), 213 Pa. 307, 62 Atl. 916, 5 Am. & Eng. Anno. Cas. 248.

suit against the Pittsburgh Plate Glass Company for negligent issue of a stock certificate. It was properly signed by the president and secretary, and it was left where a clerk had access to it. Under the signatures of the president and secretary, and above the seal, was the following: "This certificate will not be valid unless countersigned by the Union Trust Company of Pittsburgh, registrar of transfers." The clerk forged the name of Mr. Carr, the proper officer of the Union Trust Company. The court, in ruling in defendant's favor, said: "If the certificate had been signed by the president and secretary, and sealed and left with Carr, and he had signed it without authority, and issued it fraudulently, the company would doubtless be bound to recognize its validity, or if (the clerk) had obtained Carr's genuine signature, the result would be the same.'

A New York case" is seemingly more explicit on this point, though the precise question of civil liability for the acts of an agent was not involved. Speaking of the point of whether a foreign corporation maintaining a transfer agent in the state has an office therein for the transaction of business, it was said: "There is no magic in the fact that the agent employed is (another) corporation; it might have been an individual, or it might have been an ordinary salaried employee designated as the transfer agent, and certainly, if that were the case, the acts of the agent within the scope of his authority would be the acts of the principal." On the precise point involved, viz: whether the employing of another corporation as a transfer agent constituted the transaction of business within the state subsequent decision is the other

17. People ex rel. Singer v. Knickerbocker Trust Co. (1902), 77 N. Y. Supp. 1000, 38 Misc. (N. Y.) 446.