58 Miss. 421 | Miss. | 1880
delivered the opinion of the court.
The principal question raised by this record is whether the plaintiff in error, under its charter and by-laws, and the certificates of stock involved in this controversy, has a lien on the stock as against the defendant in error.
By the third section of the charter of the Holly Springs Savings and Insurance Company, now called the Holly Springs Bank, a directory of five persons and a president were provided for, and they were empowered to make “ all needful rules, by-laws, and regulations for the control and management of the business and affairs of said company, its property, and the mode and manner of transferring its stock, and any and all other questions which in their judgment will promote the interest of said company ; provided, the same are not incon
Under this section the company made various by-laws, of which sect. 13 provided that “ the stock of the company shall be assignable only on the books of the company ; and a transfer-book shall be kept, in which all assignments and transfers-of stock shall be made, and no transfer of the stock of the association shall be made by any stockholder who shall be liable to the' company for any sum of indebtedness, either as principal or otherwise, and certificates of stoclc shall contain upon them notice of this provision” Sect. 14 provided that “certificates of stock, signed by the president and cashier, may be issued to stockholders, and the certificates shall state on their face that the stock is transferable only upon the transfer-books of the company ; and when stock is transferred, the certificates-thereof shall be returned to the company and cancelled, and new certificates issued.”
In February, 1874, a certificate for stock, duly signed, was issued to B. S. Crump, as follows: “This is to certify that B. S. Crump is entitled to eighty-two shares, of fifty dollars-each, numbered 78, in the HolU Springs Savings and Insurance Company, transferable at the office, in person or by attorney.” At the same time a similar certificate, numbered 79, was-issued to William Crump.
In March, 1878, B. S. and W. Crump, being in possession of these certificates, borrowed $6,000 from the defendant in error, and assigned both these certificates to her as collateral security for the loan. This assignment was indorsed on the back of each certificate, and is in the following words : “ For value received, I assign this certificate of stock to S. D. Pinson, and authorize her, as my attorney, to demand and have transfer of the same made to her on the books of the company,” and signed by the assignor.
Mrs. Pinson, before advancing the money, gave notice of this pledge to the bank; and the note given for the loan not falling due till the fall of the year, when yellow fever was raging in
The cause has been argued with distinguished ability on both, sides, both at the bar and in writing. The authorities cited on both sides are very numerous, and their perusal has-greatly aided us in arriving at the conclusion we have reached -
It is well settled that at common law a corporation has no-lien on the stock of its shareholders for an indebtedness to it. Such liens, when they exist, result either from a provision in the charter to that effect, or from a by-law enacted by the corporation in pursuance of authority conferred by the charter. Usually the lien, when it exists at all, is given by the charter, which, being a public law, as well as the act by which the corporation is created, is notice to all persons dealing with the company. Union Bank v. Laird, 2 Wheat. 390. The lien may, however, be created by a by-law, as was held at an early day by Lord Chancellor Macclesfield in Child v. Hudson Bay Company, 2 P. Wms. 12, and very generally since. When thus created, there seems to be some diversity of opinion as to its effect against an innocent purchaser of the stock for value and without notice of the lien. Morse, in his work on Banks and Banking (p. 442), denies that the lien can be created by by-law alone as against such purchaser, and Potter on Corporations (vol. 1, sect. 99) and Angel; & Ames on Corporations (sect. 355) say this is unsettled.
This difference is more apparent than real, for it seems to be well recognized that a by-law has no extra-corporate force, and is only binding on those dealing with the corporation who have notice of it, or who deal with it under such circumstances that they are bound to take notice of it. A solution of the question will be found in the right determination of the categories in which notice is inferred. B}r-laws of private corporations are
We therefore conclude that the corporation had no lien as against the rights of Mrs. Pinson. Probably the lien exists as against the Crumps, and for this reason the judgment will be reversed, so that the recovery of Mrs. Pinson may be limited to the amount of her debt and interest and the reasonable attorneys’ fees stipulated to be paid in the contract of loan. And the defendant in error agreeing to remit all but the principal and interest of the debt, and that judgment should be ■entered for that amount, it is ordered accordingly.