The court in that case defined, as one limit of the right to transfer, that the transfer must be out and out, or one really transferring the ownership as between the parties to it. But there is nothing in the statute excluding, as another limit, that the transfer must not be to a person known to be irresponsible, and collusively made, with the intent of escaping liability, and defeating the rights given by statute to creditors."

With these restrictions, and certain others which it is not important to enumerate here, as they do not affect the rights of the parties in this case, it is, we think, well settled by the adjudicated cases that the stockholder has the right to make an out and out bona fide sale to any person capable in law of taking and holding the same, and of assuming the liabilities of the transferrer in respect thereto. This right of transfer is of great benefit to stockholders. It is what gives value to the stock. The fact that the shares are transferable on the books of the bank does not limit the right of transfer and to pass the title to the transferee. It is true that the officers of the bank will not be compelled to make the transfer on the bank's books, under the provisions of section 3208a8, 3 How. Stat., when the transferrer is indebted to the bank. Citizens' State Bank v. Kalamazoo County Bank, 111 Mich. 313. But no such claim of indebtedness is here made, and it is well settled that the title passes to the transferee the moment the assignment is made and stock delivered. Johnson v. Laflin, supra. The purpose of requiring a transfer on the books of the bank is that the bank may know who are the stockholders, and, as such, entitled to vote, receive dividends, etc., and for the protection of bona fide purchasers of the shares, and of creditors and persons dealing with the bank. It does not restrict the right of the owner to transfer his stock, but clothes the corporation with the power to register bona fide transfers. Black v. Zacharie, 3 How. 483; Union Bank v. Laird, 2 Wheat. 390; St. Louis, etc., Ins. Co. v. Goodfellow, 9 Mo. 149; Moore v. Bank of Commerce, 52 Mo. 377; Hill v. Pine River Bank, 45 N. H. 300.

No showing is made here that the bank officers refused to make the transfer on the bank's books. Instead, the cashier, who had the power to make it, promised to do so, and led Mr. Stahl to believe that the matter had been properly arranged, so that he was released from liability thereunder and Mr. Schuman protected as a bona fide purchaser. Mr. Stahl had a right to rely upon this.

We do not think that the fact that Mr. Schuman was a nonresident can affect the rights of Mr. Stahl. There is nothing in the act which limits transfers to residents of the State. A nonresident may own such shares, and become liable thereunder, the same as a resident owner; and we know of no reason why such liability cannot be enforced in Ohio as well as here. The engagement by the stockholder is contractual, and may be enforced in the courts. Western National Bank v. Lawrence, 117 Mich. 669. We are aware that Spelling on Private Corporations, at section 469, lays down the rule that the right to transfer terminates by insolvency and dissolution, and that even before the insolvency is made public, if it actually exists, to allow stockholders to transfer their interests to persons beyond the jurisdiction of the court would be opening the door to subterfuges calculated to defeat the claims of creditors, and that creditors might defeat such transfers; but he cites no authorities to sustain this proposition, and, on the contrary, says a number of cases maintain the opposite, citing the case of Johnson v. Laflin, supra. think Mr. Stahl cannot be treated as a stockholder, and held liable as such.

Defendant Row was the owner of stock on the first organization of the bank. When it was reorganized, he received a stock dividend, and increased his holding to 25 shares. This was April 1, 1892, and his stock stood in his name on the books of the bank until July 8, 1896, when it was transferred to his son. The bill in this case, after charging the insolvency of the bank and of the son of Mr. Row, to whom the stock was transferred, alleges: "Said Row suspected or believed said bank to be insolvent,

and such transfer was made by him for the purpose of escaping liability as a stockholder in said bank." There is no testimony to sustain the charge that Mr. Row believed or suspected the bank to be insolvent, and that he made the transfer to avoid liability. The bank had been doing business in the usual way up to the time the transfer was made on the books of the bank. It appears that Mr. Row had made advances of like amounts of property to his other two sons, and to equalize the gifts to them he gave this stock to his son Charles. It was consummated by the surrender of the certificate of stock to the proper officer of the bank on June 20th, with instructions to make the proper entry on the stock book to make the transfer complete. On July 8th the proper entry was made, and the certificate delivered to the son; and the bank failed and closed its doors on the 11th, or three days later. It was a completed gift of the stock to the son, and without any knowledge on the part of the donor that the bank was insolvent. The sole question, therefore, is, Did such bona fide transfer by gift relieve the transferrer from liability under the statute? This liability is purely statutory, is in derogation of the common law, and must be strictly construed. Courts will not hunt excuses to carry it beyond the plain provisions of the statute. 1 Cook, Stock, Stockh.

& Corp. Law, § 214. All the authorities recognize the right to transfer in good faith and for a valuable consideration. When this is done, and the bank is a going one, statutory liability attaches only to those who are stockholders at the time the bank closes, either by action of its directors, by the action of the commissioner of banking, or by proceedings in chancery to wind up its affairs.

The learned counsel for complainant cites no decision to sustain the proposition that a bona fide gift and transfer of stock does not relieve the transferrer from liability. His quotation from 1 Cook, Stock, Stockh. & Corp. Law, § 395, does not treat of the question now before us. The author is treating solely of the "rules for corporations in regard to refusing or allowing registries of transfers of

stock." The question the author is discussing is no other than whether a corporation may refuse to register a transfer to an irresponsible transferee. He reaches the conclusion that the officers of the corporation may refuse to do so when the corporation is insolvent, but cannot refuse when the corporation is solvent. The power of the officials of the bank to register transfers is not before us. We are dealing with a case where the transfer has been made. The cases all seem to hold that the intent to avoid liability is a material element in determining the liability of one who has transferred his stock while the corporation was a going one. If this transfer had been made for a valuable consideration, it would, under the authorities, be valid, and relieve the transferrer from liability. No case is cited by counsel which makes a distinction between a good and a valuable consideration. The statute does not restrict, and is not intended to restrict, the transfer of the stock of a bank. The courts, in order to preserve the statutory liability for the benefit of creditors, have held that transferrers in bad faith, no matter what the consideration received, are still the equitable owners of the stock for the purpose of responding to the creditors.

Counsel for complainant relies largely upon the case of Stuart v. Hayden, 169 U. S. 1. The question here considered was not involved in that case, and there is nothing to show that it was considered by the court. The case was decided upon the intent of the stockholder to avoid his liability. The court used this language:

"Whether the bank being in fact insolvent - the transferrer is liable to be treated as a shareholder, in respect of its existing contracts, debts, and engagements, if he believed in good faith, at the time of transfer, that the bank was solvent, is a question which, in the view we take of the present case, need not be discussed, although he may be so treated, even when acting in good faith, if the transfer is to one who is financially irresponsible."

It appears, from this, that the question was not discussed by the court, and the last clause must be considered as mere dictum.

The precise question was raised and decided in Sykes v. Holloway, 81 Fed. 432, in May, 1897. The facts are substantially parallel with those in the case before us. The question is thus stated:

"We must presume, from the evidence in this record, that this transfer was made, not for a valuable, but for a good, consideration only, and that it was in fact an out and out transfer, made without knowledge or notice of the embarrassed condition of the bank; yet it was made by a mother, who could respond to her liability as a stockholder, to a daughter, who could not then respond in any degree to that liability. It therefore, to that extent, impaired the security of the existing creditors of the bank; and the inquiry is whether that fact, which was known to Mrs. Holloway, is sufficient to cause the setting aside and cancellation of said transfer."

The learned judge in that case said:

*

"I find in the decisions some broad expressions which would seem to sustain the contention of the complainant, but I have been unable to find any case in which the pecuniary condition of the transferee is a material element on the question of sustaining the transfer. It is a most material matter where the inquiry is whether or not the transfer is a bona fide, out and out transfer, or a mere sham; but, as far as we have examined the cases, none of them go to the effect that if the transfer, though without a valuable consideration, was bona fide, and the transferrer had no knowledge of the embarrassed condition of the bank, and no information which would have given him or her such notice, such transfer is invalid or fraudulent. * * It seems to us that, upon principle, the pecuniary condition of the transferee of stock in a national bank at the time of the transfer, while material upon the inquiry of whether or not the transfer is bona fide or colorable, cannot be a decisive element on the question of liability of the transferrer, where the transfer has been made out and out, without knowledge or notice of the failing condition of the bank. Such a test of liability of a transferrer of stock would materially destroy the transferability of such stock, and would be an impracticable test to apply; and even though it be conceded, as in this case, that the consideration for the transfer was a good, but not a valuable, one, that fact should not be sufficient to set aside and make fraudulent the transfer."