20 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE. 



as previously explained, upheld restrictions on the right of members 

 to transfer shares of stock. At common law, however, shares of 

 stock are regarded as personal property capable of sale, transfer, or 

 succession in any of the ways by which personal property may be 

 transferred.^*^ 



On the other hand, the interest which a member has in a nonstock 

 corporation, which is usually evidenced by a certificate of member- 

 ship, at common law is not transferable. In a certain case the plain- 

 tiff acquired a certificate of membership from one who was formerly 

 a member of a nonstock corporation, but it was held that this did 

 not constitute the plaintiff a member of the corporation.*'^ Of 

 course certificates of membership could be made transferable by 

 statute, by charter, or by authorized by-laws, but in the absence of 

 specific provisions on the subject they are not transferable. Funda- 

 mentally, therefore, certificates of membership are not transferable, 

 while shares of stock fundamentally are transferable. 



Churches were among the first organizations to be incorporated 

 It is obvious that church membership from its peculiar personal 

 quality is' essentially nontransferable. This personal element, which 

 is so apparent in the case of church organizations and in social clubs 

 and kindred organizations, may have been responsible for the estab- 

 lishment of the concept, both in the decisions of courts and in the 

 minds of the people, that membership in a nonstock corporation is 

 not assignable. This principle is basic and in the absence of special 

 provision on the subject is applicable. In view of the foregoing, it 

 is apparent that fundamentally a nonstock association can control its 

 membership better than a stock association. 



At common law the stock of a member of a corporation could not 

 be forfeited and the member expelled from the corporation, while 

 nonstock corporations possess the inherent right to expel members 

 for cause.^^ From an early date it was recognized as one of the 

 inherent powers of a nonstock corporation to expel members for 

 cause. Without any charter or statutory provisions on the subject 

 a nonstock corporation may for cause expel members. This, as 

 previously stated, is not true with respect to a stock corporation. 

 Where the charter of a nonstock corporation is silent on the power 

 of expulsion and there are no statutory provisions on the subject, 

 the decided weight of authority is that a member may be expelled 

 for only three reasons: (1) Offenses of an infamous nature indict- 

 able at common law; (2) offenses against the members' duty to the 

 corporation; (3) offenses compounded of the two. 



6" Cook on Corporations, sec. 331 ; Mobile Mut. Ins. Co. v. CuUom, 49 Ala. 558 ; Bos- 

 ton Music Hall v. Corp., 129 Mass. 485. 



8iAmerican Live Stock Comm. Co. v. Chicago Live Stock Exchange, 143 111. 210, 18 

 L. R. A. 190. 



"^ Fletcher Cyclopedia Corporation, sec. 3960. 



