The Hawaiian Star

Question of Validity of Transfers of Stock Without Issuance of New Certificates-Winter Estate Loses.

The Supreme Court this morning rendered a decision in the cases of B. L. Marx vs. Phoebe A. Parmalee and B. L. Marx vs. Bishop Company, both being actions brought by Marx as administrator of the estate of the late J. W. Winter, to recover stock that had been endorsed and delivered as security for a debt, but had not been transferred. The territorial supreme court made as good a record in one respect as the United States Supreme court in the insular cases, for the three justices each rendered an opinion. Galbraith wrote the decision, Frear wrote an additional one concurring and Perry dissented altogether.

The decision in brief was as follows:

"Held, that by the endorsement and delivery of the certificate of stock with the power of sale the legal title to the stock passed to the pledgee and that the pledgee has the right to sell the stock and apply the proceeds to the payment of the debt, interest and costs, accounting to the administrator for the excess, if any,

"Held, also, that Section 2016, Civ. L. 1897, relating to the transfer of stock in corporations and prescribing as prerequisites to a valid transfer of stock, except as between the parties, that either the certificate be surrendered and a new one issued to the transferee, or that the transaction be recorded in the stock books of the corporation, was enacted particularly for the benefit of corporations and corporation creditors, and does not prevent a stockholder from selling or pledging his stock or passing title thereto without complying with the terms of said statute, at least against the claims of the pledgor's administrator."

Justice Perry's opinion was that the civil law as to transfers of stock, requiring issuance of new certificates and making of a record on the books of the corporation, applied in the case under consideration.