
    Ignatius Sargent et al. versus The Franklin Insurance Company.
    Die by-laws of an insurance company provided that the certificates of stock should be transferable only at the office of the company, by the holder personally or by his attorney, and that transfers should be authenticated by the president, and attested by the secretary, and that it should be the duty of the president to attend at the office during business hours. An assignment of some shaves was made to two copartners, with a power to them both, to transfer the same on the books of the. company, and one of the partners called at the office during business hours, and, the president being absent, exhibited to the secretary the assignment and power of attorney, and demanded that the shares should be transferred on the books of the company and certificates issued to himself and his copartner, but the secretary, declined doing any thing in the matter, saying it was the president’s business. The assignors were indebted to the company in one sum that was then due, and in others not then due. Held, that the company had no lien upon the shares as security for their demands against the assignors, and that they were bound to make a transfer of the shares on their books as demanded, and to issue new certificates to the assignees.
    The purchaser of shares of the stock of an insurance company, is entitled to a ceitificute, on producing evidence of the assignment, to the officers of the company at their office.
    The shaves of the capital stock of an insurance company are personal property of an assignable character, and any by-law of such company which should require the transfers to be made only at its office personally or by attorney with the consent of the president, would be a restraint contrary to the general law of the Commonwealth, which permits the right of personal property and incorporeal hereditaments to be transferred in various ways.
    An insurance company has no implied lien on the shares of the stock, as security for debts due from any of the stockholders.
    Dividends declared by an insurance company, on shares of a stockholder indebted to the company, may be, retained by the company towards satisfaction of the debt.
    Where an insurance company, being bound to enter on its books a transfer of shares in pursuance of an assignment of the same, made by the former holder, refused to enter such transfer, and caused the shares to be attached and sold as the property of the former holder, it was held to be liable in damages to the assignees of the shares ; and the amount of damages in such case, is the value of the shares at the time of such refusal, with interest from that time.
    This was assumpsit to recover damages of the defendants for refusing to transfer to the plaintiffs, (copartners,) on the books of the company, and deliver to them a certificate of twenty-five shares of the capital stock of the company, standing in the names of Adams & Amory, and alleged to have been assigned by them to the plaintiffs. Adams & Amory had held a certificate of these shares,'dated February 10, 1824, and made an instrument of assignment of the same to the plaintiffs, dated May 24, 1826. On the 'next day, Maj 25th, before 12 o’clock, and during business hours, Brooks, one of the plaintiffs, called at the office of the company, and, the president of the company being absent, exhibited to the secretary the instrument of assignment with the power of attorney from the assignors to the assignees, empowering them to make a transfer of the shares on the company’s books, and demanded certificates to be issued in the names of the assignees, offering, at the same time, to surrender the certificates of Adams & Amory. The secretary read the assignment and power, but declined doing any thing in the matter, saying it was the president’s business.
    On the same day, May 25th, at 12 o’clock, the defendants caused the same shares to be attached, at their own suit against Adams & Amory. On the 9th of June and the 19th of October following, the defendants caused the same shares to be attached a second and a third time in other suits commenced by them against Adams & Amory on two other demands which had respectively become due at those times. Judgment was recovered in all these suits and executions issued, on which all these shares were successively sold, and the proceeds paid over to the company in satisfaction of the demands against Adams & Amory.
    The by-laws of the company make it the duty of the presi dent “ to attend at the company’s office, during the hours of business,” to discharge the various duties of his office. Certificates of stock are required, by the by-laws, to be authenticated by the president, and it is made one of the duties of the secretary, “to attest all certificates and transfers of stock.” The certificates bore upon the face of them, that they were “transferable only at the office of said company, by [the holders] or their attorney.”
    The plaintiffs, in their first count, demanded damages on account of the shares not having been transferred to them on the books of the company, according to the assignment; and in the second count, they claimed the dividends that had ac crued upon the shares. It was agreed that the plaintiffs should be nonsuited, or the defendants defaulted, according to the opinion of the Court.
    
      Jlylwin, for the plaintiffs.
    Shares in an insurance company or other moneyed institution, form an exception to the rule that ehoses in action are not assignable. The acts incorporating these companies and regulating the assignment of the shares, show their assignable quality. The only difference between these and other ehoses in action, consists in the remedy. Master v. Miller, 4 T. R. 340. Other ehoses in action are assignable in equity only, and an action must be brought in the name of the assignor ; these are assignable at law. The mode of transfer is the same, unless regulated by statute. No written assignment is necessary ; delivery of the certificates or other evidence of property, perfects the title. Prescott v. Hull, 17 Johns. R. 284, 292; Jones v. Witter, 13 Mass. R. 307; Briggs v. Dorr, 19 Johns. R. 95. In the present case the plaintiff’s title was complete on the assignment and delivery of the certificates. Bates v. New York Ins. Co. 3 Johns. Cas. 238; Quiner v. Marblehead Soc. Ins. Co. 10 Mass. R. 476; Kane v. Bloodgood, 7 Johns. Ch. R. 132. So it has been held respecting shares in a partnership or joint stock company. Mvord v. Smith, 5 Pick. 232. The 5th section of the act of incorporation provides that the president and directors shall have power to make by-laws touching the transfer of the shares, but the only by-laws referring to this subject are those by which the president is required to authenticate transfers, and the clerk to attest the certificates. Under this authority, the by-laws might regulate in a reasonable manner the exercise of a right, but could not take it away or impose unreason able restraints. 2 Kyd on Corp. 122. The object of the above by-laws does not distinctly appear. If it was merely to make an entry of the new corporator on the books, it may be valid ; but if to require the president and secretary to witness all transfers, it would be unreasonable, and so void. The expression authenticate, used in this by-law, seems to mean to manifest, to make known by authority. That notice to the secretary, of the assignment, is sufficient to complete the title, was distinctly held in Quiner v. Marblehead Soc. Ins. Co. 10 Mass. R. 476, and not questioned in Bates v. New York Ins. Co. 3 Johns. Cas. 238.
    It is objected that the assignment was accompanied by a power to both partners jointly to assign on the company’s books, and only one of them appeared at the office for this purpose. But either partner can assign the partnership property. Gow on Part. 73; Lamb v. Durant, 12 Mass. R. 54.
    It is said that no application was made to the president. The plaintiffs called at the office during business hours, when, according to the by-laws of the company, it was his duty to be there. It was not necessary that both partners should be at the office at the same time, as it was not an act which must necessarily be done by both simultaneously ; it might be done by them successively, or one of them might have given his subse quent assent. Ball v. Dunsterville, 4 T. R. 313; Ludio v. Simond et al. 2 Gaines’s Cas. in Er. 1, 42; Mackay v. Bloodgood, 9 Johns. R. 285. The secretary refused to enter the transfer, not because both partners were not present, but because it was the business of the president. A special notice of the assignment is not necessary ; it is enough if the party has such a knowledge as is sufficient to put him on inquiry. Anderson v. Van Alen, 12 Johns. R. 343. Subsequent notice of a previous assignment, will defeat an attachment made by a bona fide creditor. Dix v. Cobb, 4 Mass. R. 508. The attachment at the suit of the corporation, made immediately after notice of the assignment, by the direction of the president, is sufficient evidence of his refusal. This act and those by which it was followed, showed an intention to appropriate the shares to the use of the company.
    The debt due to the company constituted no lien on the shares. The quarter part of it was not due at the time of making the assignment. A lien could arise only by some agreement, or some by-law having the force of an agreement.
    In regard to damages, the plaintiffs are entitled, not only to the specific shares, but also to damages for their not being transferred at the time of the demand, and to all dividends declared upon them since the assignment. If the shares cannot oe specifically restored to the plaintiffs, then they are entitled to a full indemnity in damages ; that is, to the value of the shares at the time of assessing their damages, though they should have risen in value since the time of demand of the certificates. Shepherd v. Johnson, 2 East, 211; Forest v. Elwes, 4 Ves. 497; M'Arthur v. Seaforth, 2 Taunt. 265.
    In regard to the form of action and mode of declaring in this case, it is a rule, that all duties imposed by law on corporations raise implied promises, for the performance of which an action may well lie. Bank of Columbia v. Patterson’s Adm. 7 Cranch, 306; Rex v. Bank of England, 2 Doug. 524; Hayden et al. v. Middlesex Turnpike Corporation, 10 Mass. R. 400; Danforíh v. Schoharie Tump. Co. 12 Johns R. 227; Overseers of N. Whitehall v. Overseers of S. Whitehall, 3 Serg. & Rawle, 117.
    
      J. T. Austin, for the defendants,
    contended that the alleged causes of action were inconsistent, and could not be joined ; that the plaintiffs could not demand damages on account of the shares not being transferred, whereby they were prevented from being the legal holders, and at the same time claim the dividends which had accrued on the shares, and to which only the legal holders could be entitled.
    In all transfers of the stock, the corporation resumes the shares to itself and regrants them to the new holders, who can obtain a title only in pursuance of the rules of the company, and by a compliance with the conditions prescribed by the charter and by-laws. One of the conditions, as appears by the form of the certificate, is, that all transfers shall be made in the office of the company and in the presence of the president. Such a transfer not having been made in this case, the plaintiffs did not become members of the company, or, in other words, were not owners of the shares. The assent of the president, as well as that of the former holders, was necessary in order to effect a transfer.
    No legal demand of a transfer was made on the officers of the company. The power of attorney from Adams & Amory to make the transfer was to both the plaintiffs ; only one of them called at the office for this purpose ; whereas, the power being joint, the agency of both of them was requisite in its execution. Grindley v. Barker, 1 Bos. & Pul. 229 ; Green v. Miller, 6 Johns. R. 39. The circumstance of their being copartners does not give each one of them an authority to e tecute a power granted to the other by a third party, as in this case by Adams & Amory. This power to transfer, is a distinct thing from the assignment; it might just as wrell have been given to other parties, and could be executed by the plaintiffs in no respect differently from the manner in which any other persons, appointed instead of them, must have executed it. Until the transfer should be made, the plaintiffs could have no control of the shares as partnership property, since they could not become such, until after the transfer. This shows the distinction between the present case and that cited from Gow, 74, since here the plaintiffs could not act under the power as copartners. In Quiner v. Marblehead Social Ins. Co. 10 Mass. R. 476, the transfer was of partnership property ; here the shares had not become the property of the partnership.
    But if an equitable assignment has been made in this case, it does not give the plaintiffs a right of action in their own names. Suppose the assignment had been of a Look debt, note not negotiable, or policy of insurance; it is evident that m such case the right of action would have remained in the assignors. The declaration is in assumpsit, but the defendants have never made any promise to the plaintiffs. Admit that ‘'•all duties imposed on corporations by law, raise implied promises, for the enforcement of which an action may well lie ; ” as laid down by Story J. in Bank of Columbia v. Patterson, 7 Cranch, 306 ; no law imposes on this corporation a duty to give an assignable character to their stock. This is a matter of agreement among themselves ; the promise is made by the corporation to their admitted corporators ; and it is too much to say that the promise is assignable, as well as the stock. It is made on conditions, and these have not been complied with. "Until the title to this stock was divested from Adams & Amory, it could not be vested in the plaintiffs. If several acts are necessary to complete this title, the plaintiffs have no claim until every one of those are perfected. The transfer on the defendants’ books is analogous to delivery of personal chattels ; until delivery the property is not changed.
    As Adams & Amory were indebted to the defendants, the defendants say they were not obliged to admit the transfer before the debt was paid. The check upon the freedom of transfers, which the corporation held, by requiring that transfers should be made only by the appearance of the assignor or his attorney at the office and by the authentication of the president, must mean something. It was intended to guard against transfers injurious to the corporation. The power of assenting to a transfer implies that of refusing assent. This is no injury to the purchaser, who knows that the assignment gives only an inchoate imperfect right, to be made indefeasible by the consent of the company; which, because it must be asked, may he refused.
    As to damages, if, as the plaintiffs contend, the title to these shares passed to them by the assignment of Adams & Amory, then they, being the legal owners, have sustained no damage by the refusal of the defendants to issue certificates. They may claim the dividends. If they did not become the legal owners, then the dividends cannot be claimed by them, since they can be demanded only by, and are payable only to, the legal holders of the shares. One having a bond merely for the conveyance of real estate, is not chargeable with the taxes, nor can he receive the rents. If the plaintiffs had the right to the shares, and the defendants prevented them from the enjoyment of that right, then the value of the shares at the time of refusing to issue the certificates, is the amount of damages to which they are entitled. Gray v. Portland Bank, 3 Mass. R. 364, 390.
    
      March 23d
   Putnam J.

delivered the opinion of the Court. We think it cannot be maintained, that the right to the shares in the capital stock of this corporation cannot be transferred without a literal compliance with the by-laws. It is personal property. 3 Dane’s Abr. 108; 5 Dane’s Abr. 157. It might be conveyed by will; it might descend from an intestate to his heir. It may be assigned without deed, by a delivery of the certificate with an indorsement upon it for a valuable consideration. Quiner v. Marblehead Ins Co., 10 Mass. R. 476. And in such cases the legatee, heii or assignee would be entitled to have the transfer made in the books, and to a certificate of his property. A by-law which limits the transfer of the stock to be made only at the office personally or by attorney, and with the assent of the president, would be in restraint of trade anu contrary to the general law of the Commonwealth, which per mits the right to personal property and incorporeal heredita ments to be transferred in various other ways. The purchase! or other person entitled should make his right known to the corporation, that it may be entered upon .their books ; to the end that they may have proper evidence to whom the dividends or profits should be paid.

The objection in the case at bar is not so strong as that which was made in Quiner v. Marblehead Soc. Ins. Co. above cited. By the act of incorporation of that company it was provided, that no transfer should be permitted to be valid, until all the instalments were paid in. That was construed not to extend to a transfer by a debtor to a creditor, but as only intended to prevent speculation in the scrip, before all the instalments were paid. And it was held that the original subscriber might lawfully transfer his right in the shares in payment of a debt, when only part of the instalments had been paid, and that the assignee would be entitled to a certificate of property upon payment of the residue.

It is however contended, “ that no legal demand was made to change the legal title of the shares.”

All that could be required of the person demanding a transfer on the books, would be, to prove to the corporation his right to the property. In this case one of the joint assignees produced the assignment, with the original certificate of the former owners, and claimed for himself and his partner to be the purchasers for a valuable consideration. We think that was a sufficient notice of the assignment and request to have the transfer made upon the books of the corporation.

We have considered the case upon the validity of the assignment alone, and just as if there had not been a joint power to the plaintiffs from the assignors. And we are satisfied that the assignment alone gave to the plaintiffs a right to the property, and by the operation of the law one partner might make a legal demand for both. In Lamb v. Durant, 12 Mass. R. 57, the chief justice well observed, that “ there seems scarcely an act contemplated to be done by merchants, which one copartner, acting for both, cannot do as effectually, to bind the whole copartnership, as if each member had acted.”

This assignment would clearly be good as between the parties to it. Adams & Amory had granted all their right to the plaintiffs, and the defendants had notice of it before they attempted to obtain the property for themselves by legal process. We have said that the defendants had notice, because we are satisfied that the notice to the secretary was sufficient notice to the corporation. It is no answer that the president of the corporation was not at his post in the hours of business when the demand of the transfer was made. He should have been there, and the corporation is not entitled to use his neglect of duty in their defence. There cannot be any room to doubt, from the evidence in the case, that he might have given authenticity to the transfer, if he and the corporation had pleased, before they attached the shares for themselves. If that had been done, the plaintiffs would have had legal evidence added to their equitable right of property. Upon the production of that evidence and request, it became the duty of the corporation to transfer the shares to the plaintiffs ; and the corporation is bound to compensate them for the injury they have sustained.

The law supposes that the corporation promises or undertakes to do its duty, and subjects it to answer in a proper action for its defaults, whether of non-feasance or misfeasance. 3 Dane, 109; 5 Dane, 160; Bank of Columbia v. Patterson, 7 Cranch, 299. In pp. 305, 306, Mr. Justice Story, m an able, learned and concise statement of the powers, duties and liabilities of corporations, observed, that “all duties imposed on them by law, and all benefits conferred at their request, raise implied promises, for the enforcement of which an action ma7 well lie.” The principle had been recognised in this State in the cases cited by Story J. and by the learned author of the Abridgement of American Law.

The suggestion in regard to the action, viz. that it should be in the name of the assignors, cannot be sustained. ' We think that the holders of these shares had a right to transfer them so that the assignees would have a right of action in their own names for any injury which they might sustain touching this property. The chief justice, in Howe v. Starkweather, 17 Mass. R. 243, considered shares in incorporated companies not to be chattels, but to have more resemblance to choses in action, being merely evidence of property ; but he said also, “If, under an irregular sale, certificates of the shares were given to the purchaser, the case would be mere analogous to the sale of a chattel; for the delivery of the certificate would be like the delivery of the chattel, and the transfer might be considered complete.” In the case at bar, the certificates of the shares were delivered to the plaintiffs, together with the assignment; so these shares, according to the case cited, would be more like chattels than choses in action.

It is contended that the title was not complete in the plain tiffs before the attachment which was made by the defendants, and that it was just as necessary that the transfer upon the books should be made with the assent of the president, as that a chattel should be delivered, to change the property. But the defendants are not in a situation to raise this objection. An attaching creditor without notice, would prevail against a vendee who had not perfected his title. Lanfear v. Sumner, 17 Mass. R. 112. But the defendants had notice of the transfer, and were required to give legal authenticity to it before they made their attachment. By their legal process, therefore, they cannot defeat the right which the plaintiffs had acquired by the assignment. _

_ It is further contended, that Adams & Amory were indebted to the defendants, and therefore they were not obliged to admit a transfer of the shares until their debt was paid. We do not know on what ground that argument can rest, better than that which is suggested, that the assent of the president is to be required to prevent transfers which are injurious to the corporation, and that a power of assenting implies a power of refusing. No authority is cited in support of that position. In Bates v. New York Ins. Co., 3 Johns. Cas. 238, a similar claim was rejected. The company had refused to transfer unless the assignee would pay the debts due from the assignor, and the assignee who paid under those circumstances, was permitted to recover back the money, on the ground that the corporation had no right to require such a payment. A different rule, and as it seems to us a reasonable one, was adopted in regard to the dividends which were due when the corporation had notice of the assignment. The money then being in the hands of the company, was considered as appropriated towards a debt which was then actually due. But the company were held obliged to make the transfer on the day when the last instalment was paid, and the assignee was to have the dividends thereafter to be made.

It does not appear from the report in the .case at bar, that there were any dividends in the defendants’ hands at the time when the plaintiffs demanded the transfer; but we are of opinion, that whatever money they then had on hand should be considered as pledged towards any just debt which was then due from the assignors. Any surplus money then on hand would pass with the shares, in virtue of the assignment, and is to be added to the value of the shares.

But the defendants have taken the shares on their execution, and so appropriated the same to their own use. The only remaining consideration is, by what rule the damages shall be assessed.

For the defendants it is contended, on the authority of Gray v. Portland Bank, 3 Mass. R. 364, that the value of the shares at the time of the demand and refusal to transfer them, should be the measure of damage. It has been contended foi the plaintiffs, that as the defendants have taken the shares for which the plaintiffs had paid, they should be held to pay as much, at the least, as they would be liable to pay for not transferring stock which had been loaned, or stock which had been paid for in advance; according to the rule adopted in New York, and stated in Clark v. Pinney, 7 Cowen, 681 and the cases there cited. Speaking for myself only, I should have been inclined to adopt that rule; which would have charged the defendants with any advance upon the value between the time of the demand and the trial. But all my brethren prefer the other rule, and on the ground that the defendants should not be held to pay more for this property than for goods which they had wrongfully converted to their own use. We decided in Kennedy v. Whitioell, 4 Pick. 466, that in trover for goods, the rule of damages in this Commonwealth is the value at the time of the conversion, notwithstanding the goods had been sold at an advanced price before the trial. And it is to be observed, that the certainty and uniformity of a rule may be of more public utility than one which is fluctuating, which may sometimes do more exact justice in a particular case. The Court is of opinion therefore, that the value of the shares at the time of the demand and refusal to transfer, is to be the measure of the damage. Interest will be added from the time of the demand, on the amount found to be then due, in lieu of any dividends which may. have been subsequently declared. 
      
       See Gilbert v. Manchester Iron Manuf. Co., 11 Wendell, 627; Sargent v. Essex Marine Railway, 9 Pick. 204; Boardman v. Osborn, in Essex, 1839 , Plymouth Bank v. Bank of Norfolk, 10 Pick. 454; Nesmith v. Washington Bank, 6 Pick. 324; Northrop v. Newtoion &c. Turnpike, 3 Connect. R. 544; Malborough Manuf. Co. v. Smith, 2 Connect, R. 579; Oxford Turnpike v. Runnel, 6 Connect. R. 552.
     
      
       See Egbert v. Woods, 3 Paige, 523; Pierpont v. Graham, 4 Wash. Che. C. R. 232; Harrison v. Sterry, 5 Cranch, 300; Cady v. Shepherd, ]] Pick. 400; Haven v. Hussey, 5 Paige, 30 ; Hewes v. Bayley, 20 Pick. 96; Morse v. Bellows, 7 N. Hamp. R 550.
     
      
       See Baptist Church v. Mulford, 3 Halsted, 182; North Whitehall v. South Whitehall, 3 Serg. & Rawle, 117; Chesapeake &c. Carnal Co. v. Knapp, 9 Peters, 541; Frankfort Bank v. Anderson, 3 A. K. Marshall, (Ken.) 1; Beverly v. Lincoln Gas and Coke Co., 6 Adolph. & Ellis, 829, and 33 Eng. Com. Law Rep. 222; 2 Kent, (3d ed.) 291, and cases cited in notes.
     
      
       See Angelí & Ames on Corp. 316; Long on Sales, (Rand’s edit.) 259. 260.
     
      
       See Balter v. Wheeler, 8 Wendell, 508; Whitehouse v. Mhinson, 3 Carr. & Payne, 344; Paries v. Boston, 15 Pick. 206; Stone v. Codman, 15 Pick. 300; Weld v. Oliver, 21 Pick. 565; Stevens v. Lyford, 7 N. Hamp. R. 360; Nelson v. Ford, 5 Hammond, 474; Chitty on Contr. (4th Am. ed.) 683 and note»
     