The defendant corporation issued to the defendant Leveroni five certificates covering twenty-nine shares of its capital stock, each of which had on the reverse side the following indorsement required by article nine of the by-laws, restricting the transfer of stock, and a blank power of attorney for transference by the holder. “No stockholder or the executor or administrator of a deceased stockholder or the grantee or assignee of any shares sold on execution shall sell or transfer any stock in this Corporation except upon the following conditions, which, however, may be waived by the Board of Directors in any particular instance: A stockholder wishing to sell or transfer any of his stock shall first, in writing, offer to sell the same to the Corporation, through the Board of Directors, disclosing the consideration for the proposed sale or transfer, and the name and address of the person to whom it is to be made. The Board of *101Directors shall have ten days from the date of such offer to purchase the stock in behalf of the Corporation, for a consideration to be determined by three arbitrators, of which, one shall be appointed by each party and the third by the two so appointed; or the Board may, after such determination elect to buy the said stock at the price of the proposed sale or transfer.”
The purchase price for the stock was advanced to Leveroni by Mr. S. L. Bailen, to whom Leveroni delivered the certificates with his signature attached to the power of attorney which was left unfilled. The respective dates of these certificates do not appear in the record. But, no transfer to Bailen having been made on the books of the corporation, Bailen on May 13, 1925, wrote to the directors, that in accordance with the provisions of the by-laws, “I hereby inform you that I wish to sell and transfer twenty-nine shares of the capital stock of your corporation. I offer the same to the corporation, through its Board of Directors. The consideration for the proposed sale or transfer is $5,800.00 and the name and address of the person for whom it is to be made, is Albert B. Fopiano, 73 Tremont Street, Boston, Mass.” The corporation refused to make the transfer. On October 20, 1925, a second letter was sent to the directors, signed by Bailen as attorney for Leveroni, which purported to affirm the sale to the plaintiff, and reiterated the demand of May 13 for a transfer. The corporation on October 30, 1925, again notified Bailen that the request was refused, because, “we are advised by Frank Leveroni that you had no authority to sign his name to that letter.”
The shares in question formed part of the capital stock of the corporation, and were issued and held by its stockholders under the terms of the by-law, which was valid, and bound each stockholder. New England Trust Co. v. Abbott, 162 Mass. 148. Barrett v. King, 181 Mass. 476. Longyear v. Hardman, 219 Mass. 405. Fairfield Holding Corp. v. Souther, 258 Mass. 540. Compare State v. Caddo Rock Drill Bit Co. 114 La. 353. The duty of transference rested upon the corporation, .of which Bailen had not become a stockholder of record in accordance with the by-law. The shares stood in *102the name of Leveroni, who received the dividends for which he accounted to Bailen, and he also voted on the stock. It is true on the record that there was no sale by Leveroni to Bailen. But the by-law reads no sale or transfer shall be made on the books of the corporation by any stockholder except as provided therein.
It is plain that not only the rights of Leveroni but also of Bailen as between themselves and the corporation are governed by the by-law. The bill cannot be maintained against Leveroni, with whom the plaintiff had no contractual relations, nor against the corporation, which was not bound under the circumstances to recognize either Bailen or the plaintiff Fopiano as stockholders entitled to the issuance of new certificates. Barrett v. King, supra. The decree dismissing the bill is
Affirmed with costs.