U.S. Supreme Court
Johnston v. Laflin, 103 U.S. 800 (1880)
Johnston v. Laflin
103 U.S. 800
1. The title to shares of the capital stock of a national bank passes when the owner delivers his stock certificate to the purchaser with authority to him or any one whom he may name to transfer them on the books of the bank.
2. In good faith, and without intent to evade his responsibility as a stockholder, A., the owner of such shares, sold them to a broker, to whom he delivered his stock certificate and a power to transfer them, leaving blanks for the names of the attorney and transferee. The broker sold them to B., the president of the bank, who gave his individual check in payment therefor, and received the certificate and power. By the directions of B., a bookkeeper of the bank inserted his own name as attorney, and transferred the stock to B. as "trustee" on the official stock register. The entries in the stock ledger and other books of the bank show that B. purchased the stock for it, and reimbursed himself with its funds. The bookkeeper lead actual knowledge of all the facts. In a suit brought by the receiver of the bank to compel B. to retransfer the shares and A. to repay the price therefor and to have the latter declared a stockholder in regard to them, held that as the bookkeeper was the agent of the Bank, his knowledge of the transaction could not be imputed to A., and that the suit could not be maintained.
The facts are stated in the opinion of the Court.