ARTICLE 6.*

(Entire article added by L. 1913, ch. 600, in effect Sept. 1, 1913.)` TRANSFERS OF SHARES OF STOCK IN CORPORATIONS. SECTION 162. How title to certificates and shares may be transferred. 163. Powers of those lacking full legal capacity and of fiduciaries not enlarged.

164. Corporation not forbidden to treat registered holder as owner. 165. Title derived from certificate extinguishes title derived from a separate document.

166. Who may deliver a certificate.

167. Indorsement effectual in spite of fraud, duress, mistake, revocation, death, incapacity or lack of consideration or authority. 168. Rescission of transfer.

169. Rescission of transfer of certificate does not invalidate subsequent transfer by transferee in possession.

170. Delivery of unindorsed certificate imposes obligation to indorse. 171. Ineffectual attempt to transfer amounts to a promise to transfer. 172. Warranties on sale of certificate.

173. No warranty implied from accepting payment of a debt.

174. No attachment or levy upon shares unless certificate surrendered or transfer enjoined.

175. Creditor's remedies to reach certificate.

176. There shall be no lien or restriction unless indicated on certifi

cate.

177. Alteration of certificate does not divest title to shares.

178. Lost or destroyed certificate.

179. Rule for cases not provided for by this act.

180. Interpretation shall give effect to purpose of uniformity.

181. Definition of indorsement.

182. Definition of person appearing to be the owner of certificate. 183. Other definitions.

184. Article does not apply to existing certificates.

185. Inconsistent legislation repealed.

162. How title to certificates and shares may be transferred. Title to a certificate and to the shares represented thereby can be transferred only,

(a) By delivery of the certificate indorsed either in blank or to a specified person by the person appearing by the certificate to be the owner of the shares represented thereby, or

*L. 1913, ch. 600, which added this article, overlooked the fact that there already was an article 6, which should have been renumbered article 8.

(b) By delivery of the certificate and a separate document containing a written assignment of the certificate or a power of attorney to sell, assign or transfer the same or the shares represented thereby, signed by the person appearing by the certificate to be the owner of the shares represented thereby. Such assignment or power of attorney may be either in.blank or to a specified person. The provisions of this section shall be applicable although the charter or articles of incorporation or code of regulations or bylaws of the corporation issuing the certificate and the certificate itself provide that the shares represented thereby shall be transferable only on the books of the corporation or shall be registered by a registrar or transferred by a transfer agent. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

163. Powers of those lacking full legal capacity and of fiduciaries not enlarged.

Nothing in this article shall be construed as enlarging the powers of an infant or other person lacking full legal capacity, or of a trustee, executor or administrator, or other fiduciary, to make a valid indorsement, assignment or power of attorney. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

164. Corporation not forbidden to treat registered holder as

owner.

Nothing in this article shall be construed as forbidding a corporation,

(a) To recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, or

(b) To hold liable for calls and assessments a person registered on its books as the owner of shares. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

§ 165. Title derived from certificate extinguishes title derived from a separate document.

The title of a transferee of a certificate under a power of attorney or assignment not written upon the certificate, and the title of any person claiming under such transferee, shall cease and determine if, at any time prior to the surrender of the certificate. to the corporation issuing it, another person, for value in good faith, and without notice of the prior transfer, shall purchase and obtain delivery of such certificate with the indorsement of the person appearing by the certificate to be the owner thereof, or shall purchase and obtain delivery of such certificate and the

written assignment or power of attorney of such person, though contained in a separate document. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

§ 166. Who may deliver a certificate.

The delivery of a certificaae to transfer title in accordance with the provisions of section one hundred and sixty-two is effectual, except as provided in section one hundred and sixty-eight, though made by one having no right of possession and having no authority from the owner of the certificate or from the person purporting to transfer the title. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

§ 167. Indorsement effectual in spite of fraud, duress, mistake, revocation, death, incapacity or lack of consideration or authority.

The indorsement of a certificate by the person appearing by the certificate to be the owner of the shares represented thereby is effectual, except as provided in section one hundred and sixtyeight, though the indorser or transferor,

(a) Was induced by fraud, duress or mistake to make the indorsement or delivery, or

(b) Has revoked the delivery of the certificate, or the authority given by the indorsement or delivery of the certificate, or

(c) Has died or become legally incapacitated after the indorsement, whether before or after the delivery of the certificate, or (d) Has received no consideration. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

§ 168. Rescission of transfer.

If the indorsement or delivery of a certificate,

(a) Was procured by fraud or duress, or

(b) Was made under such mistake as to make the indorsement or delivery inequitable; or

If the delivery of a certificate was made

(c) Without authority from the owner, or

(d) After the owner's death or legal incapacity, the possession of the certificate may be reclaimed and the transfer thereof rescinded, unless:

1. The certificate has been transferred to a purchaser for value in good faith without notice of any facts making the transfer wrongful, or,

2. The injured person has elected to waive the injury, or has been guilty of laches in endeavoring to enforce his rights.

Any court of appropriate jurisdiction may enforce specifically such right to reclaim the possession of the certificate or to rescind the transfer thereof and, pending litigation, may enjoin the further transfer of the certificate or impound it. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

§ 169. Rescission of transfer of certificate does not invalidate subsequent transfer by transferee in possession.

Although the transfer of a certificate or of shares represented thereby has been rescinded or set aside, nevertheless, if the transferee has possession of the certificate or of a new certificate representing part or the whole of the same shares of stock, a subsequent transfer of such certificate by the transferee, mediately or imme diately, to a purchaser for value in good faith, without notice of any facts making the transfer wrongful, shall give such purchaser an indefeasible right to the certificate and the shares represented thereby. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

§ 170. Delivery of unindorsed certificate imposes obligation to indorse.

The delivery of a certificate by the person appearing by the certificate to be the owner thereof without the indorsement requisite for the transfer of the certificate and the shares represented thereby, but with intent to transfer such certificate or shares, shall impose an obligation, in the absence of an agreement to the contrary, upon the person so delivering, to complete the transfer by making the necessary indorsement. The transfer shall take effect as of the time when the indorsement is actually made. This obligation may be specifically enforced. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

§ 171. Ineffectual attempt to transfer amounts to a promise to transfer.

An attempted transfer of title to a certificate or to the shares represented thereby without delivery of the certificate shall have the effect of a promise to transfer and the obligation, if any, imposed by such promise shall be determined by the law governing the formation and performance of contracts. (Added by L. 1913, ch. 600, in effect Sept. 1, 1913.)

172. Warranties on sale of certificate.

A person who for value transfers a certificate, including one who assigns for 'value a claim secured by a certificate, unless a contrary intention appears, warrants —

(a) That the certificate is genuine,