By the eighth section of the act incorporating the Phenix Fire Insurance Company, (Laws of 1823, p. 114,) it is provided that the stock shall be assignable and transferable according to such'rules, and subject to such restrictions and regulations, as the directors shall establish.. And by the answer of the defendants, it appears that soon after the organization of this company, a by-law was made, and is still in force, by which it is declared that no transfer or assignment of stock shall be valid, unless made on the books of the company. This does not give to the company any claim upon the stock by way of lien. But as the legal title cannot pass until such transfer takes place, a purchaser without such transfer takes the stock subject to any equitable claim which may exist against it either in favor of the company or any other person. Where the equities are equal, and neither party has obtained the legal right to the stock, by an actual transfer upon the books of the company according to the statute and the by-law, the prior equity must prevail. (Bates v. N. Y. Ins. Co. 3 John. Cas. 238.) The case would be entirely different if there was no statute'or valid by-law regulating the manner of transferring shares in an incorporated joint stock company; and where, by the charter, the stock was declared to be assignable. In ■such a case a simple assignment, intimated to the proper officer of the corporation, although it was not entered on the company’s books, would be sufficient to transfer the legal right; and a bona fide assignee of the stock would hold the same free from any equitable claims thereon of which he had no previous notice. Whether the defendants in this case have any legal or equitable lien upon the stock in question, remains to be considered.
The second clause of the eighth section of the act of incorporation declares, that if the company has any claim or demand against a stockholder, either due or to become due, he ' shall not be entitled to make any transfer, sale, or conveyance of his stock, or to receive a dividend thereon, until such claim or demand shall be paid or secured to the satisfaction of the board of directors. The answer states in express terms that the stock was merely transferred to the name of J. Donaldson, for *362the ptirpose of having a name to insert in the list of directors there being no such person as James Donaldson who was the actual owner of the stock, or to whom such transfer was made. The defendants also deny that the James Donaldson who executed this blank assignment to enable Mowatt to transfer the stock, ever had any interest or property whatever therein. As the complainant has not given the defendants an opportunity to prove these allegations, and has chosen to go to hearing upon bill and answer, the allegations must be taken as literally true. If so, the transfer of these shares to a fictitious person was a mere nullity ; and the legal title never passed from Mowatt. It appears, however, that the officers of the corporation were aware that this was a mere fictitious transfer, and that it was made for the purpose of imposing upon such of the stockholders as were not in the secret. If, therefore, the complainant had actually advanced the money to the person that Mowatt afterwards elected to treat as the owner of the stock, and without notice of the real facts of the case, I am inclined to think he would have had an equitable claim to hold such stock even against the defendants’ legal lien. But an assignment for the payment or security of an antecedent debt, and without any new consideration paid, is not sufficient to raise such an equity.
I have no doubt that in equity the lien given by this charter upon -the stock belonging to debtors of the company, and upon the dividends thereon, extends to all stock actually owned by such debtors, whether standing in their own names or in the names of other persons as their trustees. But the defendants could not be permitted to enforce that lien against bona fide purchasers of the .stock who had no notice of such equitable lien. From the facts disclosed in this-answer,.I am satisfied the defendants have both an equitable and a legal lien upon the stock in question, for the security of their demand against Mowatt; and they have also the right to retain the dividends, and to sell the stock in the manner prescribed by the charter to satisfy that claim. A decree must therefore be entered declaringsuclinght; but allowing the complainant to redeem, if he thinks proper to do so. The complain*363ant, in case he redeems, will be entitled to a transfer of the stock, and to any other securities the defendants may have for their demands against Mowatt. But whether he elects to redeem, or otherwise, he must pay to the defendants their costs in this suit.