§ 742.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XIII. eral Supreme Court say there are several reasons. " One is that he is estopped from denying his liability by voluntarily holding himself out to the public as the owner of the stock, and his denial of ownership is inconsistent with the representa- tions he has made ; another is, that by taking the legal title he has released the former owner ; and a third is, that after hav- ing taken the apparent ownership, and thus become entitled to receive dividends, vote at elections, and enjoy all the privileges of ownership, it would be inequitable to allow him to refuse the responsibilities of a shareholder." ' A mere pledgee of shares, however, who is not registered as owner, and never receives dividends or exercises any of the rights of a shareholder, is not liable as a shareholder to cred- itors of the corporations. 2 Thus it is held by the Federal Supreme Court that a pledgee of shares in the stock of a national bank, who in good faith while the bank is not in failing circumstances, takes the transfer in the name of an irresponsible person, for the avowed purpose of avoiding lia- bility as a shareholder, and who never exercises any rights of a shareholder or receives any dividends, incurs no liability as a shareholder to the creditors of the bank. The dividends were paid to the pledgor, the real owner. 3 § 742. On the other hand, if a person is the real owner of Macy, 51 N. Y. 155. So an executor holding shares may be chargeable with the individual liability of his testator. Diven v. Duncan, 41 Barb. 520. Compare Rev. St., §5152. i Nat. Bk. v. Case, 99 U. S. 628, 631. Compare Union Savings Ass'n v. Seligman, 92 Mo. 635 (overruling Griswold v. Seligman, 72 Mo. 110); Fisber v. Seligman, 75 Mo. 13; Bray v. Seligman, ib. 31; Burgess v. Selig- man, 107 U. S. 20. In respect of Federal courts following state deci- sions, in construing a state statute, see Flash v. Conn, 109 U. S. 371. Brokers who purchase shares and cause themselves to be registered on the books of the company as sbare- holders, are liable as shareholders, although the sbares be purchased for 738 a customer. McKim v. Glenn, 66 Md. 479; see Kerr v. Urie, 86 Md. 72. 2 Anderson v. Phila. Warehouse Co., Ill U. S. 479; Henkle v. Salem Mfg. Co., 39 O. St. 547. A person who receives a transfer of shares in a national bank as security for debt, and surrenders the certificates and takes out new ones in his name de- scribed as " pledgee " on the books of the bank, and holds them still in good faith as security, is not a share- bolder as to creditors. Pauley v. Loan, etc., Co., 165 TJ. S. 606. Cf. Matteson v. Dent, 176 U. S. 521. This case summarizes the law as to liability of pledgees of stock, under various circumstances, to creditors of the corporation. 3 Anderson v. Philadelphia Ware- i
