CORPORATIONS - NEGOTIABILITY OF STOCK CERTIFICATES - UNIFORM STOCK TRANSFER ACT

Plaintiff holding company was incorporated with Murtland and two dummies as shareholders and officers. Murtland pledged a stock certificate, representing shares of another corporation owned by his corporation, with the defendant bank to secure a personal loan; an assignment and power of attorney was executed by the plaintiff through Murtland and one of the dummy shareholders as officers, the other shareholder having knowledge of the transaction. Upon the bankruptcy of Murtland, defendant sought to sell the collateral; plaintiff seeks to enjoin the sale on the ground that the assignment had not been authorized by its board of directors. Held, complaint dismissed; the shareholders and through them, the corporation, are estopped to deny the execution of the assignment, and the defendant acquired security title as good faith purchaser under the Uniform Stock Transfer Act.

Murtland Holding Co. v. Egg Harbor Commercial Bank, 123 N. J. Eq. 117, 196 A. 230 (1938).