14 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE. 
provision in the statute or charter on the subject, that a by-law 
changing the common-law rule is voil. 41 If there is a statute or 
charter provision dealing with the matter it controls, and a by-law to 
be valid must be in harmony therewith. In a case decided by the 
Supreme Court of the United States it was said : 
Usually a stockholder is a member of the company, and as such has a right 
to vote, but it does not necessarily follow that the right increases with the 
increase in stock, or that the right is lessened in case the number of shares 
owned by the stockholder should be diminished. 42 
In case there is no provision in the statute, charter, or by-laws 
on the subject, the common-law rule prevails of one vote for each 
member or stockholder without regard to the number of shares he 
may own. With respect to nonstock associations or corporations, 
this rule also prevails unless changed in one of the ways indicated. 
It is interesting to note that the generally accepted cooperative prin- 
ciple of one man, one vote, is merely an application of the common- 
law rule on the subject. 
RESTRICTING TRANSFER OF STOCK. 
May an incorporated cooperative association or any other cor- 
poration restrict the transfer of its stock as against third persons? 
The answer is yes, if appropriate statutory authority exists in the 
State in which the association is incorporated. If a statute of the 
State expressly restricts the transfer of stock except under cer- 
tain conditions, the matter is clear. This was the situation in a 
Minnesota case 43 where the statute under which the association was 
incorporated provided that " No person shall be allowed to become 
a stockholder in such association except by the consent of the man- 
agers of the same.'' The court said, " We have -no doubt of the 
validity of such a restriction on the transfer of shares." If the 
statute of the State under which the association is incorporated au- 
thorizes the inclusion of a provision in the articles of association or 
the certificate of incorporation or the by-laws restricting the trans- 
fer of stock, there would seem to be no doubt concerning the right 
of an association to adopt such a restriction. 
From the cases that have come before the courts it is apparent that 
the required statutory authority need not expressly authorize re- 
strictions on the transfer of stock, but general language dealing with 
this subject would seem to be enough. A few illustrations from de- 
cided cases will shed light on this matter. In a recent New York 
case (1919) the certificates of incorporation of each of the three 
corporations involved, " Provided that no stock shall be transferred 
until it Avas first offered for sale to the other stockholders on terms 
41 Taylor v. Griswold, 14 N. J. Law 239, 27 Amer. Dec. 33. 
42 Bailey r. Railroad Co., 89 IT. S. 604, 635. 
* 3 Healey et al. v. Steele Center Creamery Ass'n, 11-3 Minn. 451, 133 N. W. 69. 
