This is a bill in equity, brought by the plaintiffs as receivers of Sanford Bank, under R. S. of 1857, c. 47, § 73, against the defendants as stockholders of said bank, to compel them to contribute to the payment of its debts.
An injunction granted against the bank May 17, 1861, was made perpetual on May 18, 1861, and receivers were appointed on the twenty-first day of the same month. The receivers made their report to the court in January, 1864, which shows an aggregate indebtedness of eleven thousand two hundred and thirteen dollars and eleven cents, three hundred and sixty-seven dollars and fifty cents thereof being due on account, and the balance upon the bills of the bank. The amount and value of the assets of the bank, as reported by the receivers, were two thousand and sixty-eight dollars and seventy cents. That report was accepted by the court, and the amount of indebtedness was determined in accordance therewith. It thus appearing to the court that the assets of the bank were insufficient to pay its indebtedness it became the duty of the receivers to bring a bill in equity, in behalf of the claimants, against the persons liable as stockholders of the bank to compel them to contribute to the payment of its debts. R. S. of 1857, c. 47, § 73.
*166The statute creating the liability of stockholders in such cases is as follows: “ The holders of stock in any bank at the expiration of its charter, whether a person or corporation, shall be liable in their individual capacities for the redemption and payment of all bills issued by said bank and. remaining unpaid, in proportion to the stock they then hold; but such liability shall continue only two years after notice of such expiration has been given in the State paper.” R. S., 1857, c. 47, § 46.
It is substantially alleged in the bill that the charter of the bank expired on the 18th day of May, 1861, when the injunction was made perpetual. In order to give effect to the foregoing provision of the statute it is not necessary that the charter of a bank should have expired by limitation. It is sufficient if it has expired by operation of law. Such expiration takes place when an injunction against the bank is made perpetual. Wiswell v. Starr, 48 Maine, 404.
In the case at bar the injunction was made perpetual, and the charter of the bank expired on the 18th day of May, 1861; and all holders of stock on that day are liable to contribute for the redemption and payment of all bills issued by the bank and remaining unpaid, in the proportion that the number of shares held by them respectively bears to the number of shares held by all. the stockholders.
The capital stock of the bank was $50,000, which was divided into shares of fifty dollars each.
Of the thirty-six persons alleged in the bill to be liable as stockholders, only nineteen are now claimed to be liable. Of these seven have been defaulted and twelve have demurred. Of the latter number nine have answered.
The alleged causes of demurrer having been presented, considered, and found to be insufficient in Bank of Mutual Redemption v. Hill, 56 Maine, 888, the several demurrers in this case must be overruled.
Of the defendants who have filed answers to the bill, Samuel Tompson appears by the stock ledger to have owned sixty shares *167on March 3, 1860, but he claims that he assigned fifty of those shares to Charlotte H. Tompson on March 12, 1861, as appears by the records of the bank. The plaintiffs deny the validity of that assignment on the ground, 1st, That it was not made in conformity with the requirements of the by-laws, and 2d, That it was not made in good faith.
The by-laws of the corporation provide “ that shares shall be transferable by indorsement in writing and subscribed by the holder in presence of the cashier, or two other witnesses, . . . and in every case of transfer the former certificate shall be delivered up to the cashier to be cancelled and a new certificate shall be issued in favor of the transferee.”
The statute provides that corporations “ may make by-laws consistent with the laws of the State and their charter.” We see nothing in these provisions of the by-laws inconsistent with the laws of the State or the charter of the bank. When not thus inconsistent their substantial observance is necessary to the validity of the transfer of the stock between the parties. As by-laws are established by the stockholders they are presumed to understand them. The provisions of the by-laws in question were designed as checks upon fictitious transfers of stock. As stockholders are made liable for the debts of the bank to the amount of their shares, it is important for them to know whether their associates are responsible or worthless. The frequency of the transfers of bank stock and the character of the sellers and purchasers, are oftentimes indicative of the standing of the bank. The requirement that transfers of stock shall be by indorsement of the certificate of stock “ subscribed by the holder in the presence of the cashier or two other witnesses,” furnishes the other stockholders, and if need be the public, with the means of ascertaining as far as may be the nature of the transaction and the standing of the parties to it. A stock ledger kept in accordance with these provisions of the bylaws affords the most reliable evidence of the condition of the bank ordinarily available to the stockholders; being both lawful and salutary their substantial observance must be upheld.
*168It is obvious that the actual and mute presence of “ the cashier or two other witnesses” at a transfer of stock to be proved by parol, does not answer the purpose of this provision of the by-laws. In such case the stock ledger furnishes the inquiring stockholder with no evidence that the transfer was made “ in presence of the cashier or two other witnesses,” as required by the by-laws. As the record affords him no means of ascertaining how this fact was, he has a right to presume that the transfer of stock was not duly witnessed. The meaning of this provision of the by-laws is, not only that the holder of the stock shall indorse the certificate of stock when either the cashier or two other witnesses are present, but that he or they shall subscribe their names thereto in attestation of that fact. Otherwise the requirement of the by-laws would be a nullity. When this is not done the property in the stock pretended to be transferred as between the parties still remains in the original holder.
All the transfers of stock made by Samuel Tompson, either in his own right or as attorney of Mary A. Tompson, Charlotte H. Tompson, or George Gowen, 2d, and those made by Samuel B. Emery, not having been duly attested by the cashier of the bank, or two other witnesses, as between the parties, were null and void; nor was it competent for the bank to ratify and make valid such pretended transfers of stock made in violation of its by-laws.
As fifty of the shares alleged in the bill to be owned by Charlotte H. Tompson actually belonged to Samuel Tompson, she could not be chargeable as owner of them also; the inclusion of him as owner is the exclusion of her.
William L. Emery admits in his answer that he was the owner of two shares on the 18th day of March, 1861, but denies that he was then or ever had been the owner of the other twenty shares alleged in the bill. It appears from his answer and proof that the said twenty shares were originally paid for by D. T. Mills, that the original certificate of stock was made out in the name of Emery, and that he receipted for the dividends, though Mills actually received them up to the time of the formal transfer of the *169shares to him in March, 1861. It further appears that said Emery made an assignment of the twenty shares in blank when he received his certificate of stock.
The formal transfer of the twenty shares from Emery to Mills was made in accordance with the requirement of the by-laws.
We think that Emery cannot be held as owner of the twenty shares on the 18th day of May, 1861, upon this evidence; though the shares were held in his name he never paid anything for them, and he transferred them to the party who did pay for them when they were issued, before the charter of the bank expired by operation of law. If he had continued to be the nominal holder of the stock when the injunction was made perpetual he would have been estopped from denying his ownership. He would not be permitted to contribute to the furtherance of the scheme of the other managers of the bank for defrauding the public and plundering the stockholders, by allowing them the benefit of the influence of his name as owner of the twenty shares, and then shield himself from liability as owner by denying 1ns ownership when the hour of retribution had come, if he still remained the nominal owner of these shares. As those stockholders only are liable in this suit who were holders of stock on the 18th day of May, 1861, William L. Emery cannot be held liable as owner of more than two shares.
Ivory Brooks, William Ham, and F. H. Butler admit in their several answers to the bill that they owned the number of shares respectively charged therein, but claim to have their liability reduced because of the previous losses of the bank, and the reduction of the value of the shares to twelve and a half dollars each, by a vote of the stockholders passed Aug. 29, 1859.
The par value of the shares was fixed in the charter at $50 each. The fact that the capital stock of the bank had been reduced by losses to twelve and a half dollars each, and that the stockholders so voted, does not change the legal status of these or any other defendants who rely upon this ground of defense. They received and retained their certificates of stock, predicated upon the par value of $50 for each share ; and whether the shares were worth *170one dollar or fifty dollars each cannot affect their liability as stockholders. The amount of their liability depends not upon the actual market value of the shares or their value as declared by a vote'of the stockholders, but upon the number of shares they severally owned, and the amount of the indebtedness of the bank. If a vote of the stockholders reducing the par value of. the stock on account of the losses of a bank, whether occasioned by unavoidable misfortune or the culpable mismanagement of the directors, could defeat or diminish their liability in such cases, it might not be difficult, under the manipulations of such men as the managing directors of the Sanford Bank appear to have been, entirely to defeat the security the statute was intended to provide.
It appearing that George Gowen, 2d, and Moses W. Emery never purchased or owned any stock in the Sanford Bank, or received any' dividends on such stock or acted as stockholders of the bank, this bill cannot be sustained against them.
The proofs in the case sho\v' that the late Hon. Nathan D. Appleton transferred his shares in the bank prior to the 18th day of May, 1861, in accordance with the requirements of the by-laws and in good faith; consequently Julia H. Appleton, the adminis-tratrix of his estate, is not liable in this bill.
From the view we have taken of the case it becomes unnecessary to pass upon the question of bad faith in the transfer of stock by some of the defendants, which has been so elaborately and ably argued by the learned counsel for the plaintiffs.
Demurrers overruled. Bill sustained with costs against Samuel Tompson as owner of sixty shares, Samuel B. Emery as owner of fifty shares, William L. Emery as owner of two shares, and Ivory Brooks, William Sam, and E. S. Butler, as charged in the bill. Bill not sustained against Seorge Q-owen-, 2d, Moses W. Emery, and Julia S. Appleton, adminis-tratrix, who are respectively entitled to costs.
*171Appleton, C. J.; Cutting, Walton, and Danfoeth, JJ., concurred.