99 Ala. 379 | Ala. | 1892
The controlling, if not the sole inquiry in this case is, whether the Birmingham Trust & Savings Company, has a lien on the shares of its capital stock, the subject-matter of controversy, to secure the payment of the debts contracted with it by Boddie, the original holder and owner of the stock. The certificates were issued to him, and he remains registered as owner and holder on the books of the company. The question is, will the asserted lien prevail over his prior pledge of the stock to the appellee, to
The common law regards shares of stock in private corporations as personal property, capable of alienation or descent in any of the modes by which that species of property may be transferred. Thus regarding such shares, a lien or equity in favor of the corporation to charge them with a debt due from the shareholder, would not be implied. Where the rights of third persons, accruing by purchase, or pledge from the shareholders, accrue, the recognition of .sunk lien or equity would find no sanction in the rules of the common law. It discountenances all secret liens or trusts, as tending to fraud, to the embarrassment of trade, and to insecurity in the safe and speedy transfer of property. — 1 Jones on Liens, § 375; Ang. & Ames Corporations, § 355; Cook on Stockhold ers, § 521. There is, however, much of equity and justice in such a lien, growing out of the relations which exist between the corporation and its shareholders, and it has become a general legislative policy to confer it either by a general law, applicable to all corporations, or by a provision in the charters of particular corporations. As between the shareholder and the corporation, and all others than bona fide purchasers without notice, a by-law or rule of the corporation may very naturally and reasonably create such lien. This proposition is supported by the weight of judicial authority.—Cook on Stockholders, § 552; Cunningham v. Ala. Life Ins. & Trust Co., 4 Ala. 652.
The statutes declare, “Shares or interests in the stock of private corporations are personal property, transferable on the books of the corporation in such manner as is required by the by-laws or by the rules and regulations of the corporation.” It is made the duty of every private corporation to require transfers'of its stock tobe made or registered on its books. And all transfers, hypothecations, mortgages, or other liens, of and on the stock, if not so made or registered, are invalid as to bona fide creditors, or subsequent purchasers without notice. Tlie stock is the subject of levy and sale under attachment or execution, as is other personal property; and on the stock, the corporation has a lien for any debt or liability incurred to it by the shareholder, before notice of a transfer, -or of a levy thereon. (Code, §§ 1669-74).
So far as the statute declares the shares personal property, it is simply affirmative of the common law.- — Ang. & Ames Corporations, § 557. The requirement that a transfer of them must be made or registered on the books of the
The lien which the corporation can assert and enforce against a prior transfer of the stock, though the transfer-may create only an equity, binds the legal title of the shareholder, by the very terms of the statute. Like the protection extended to bona fide creditors, or subsequent purchasers, it is dependent on a want of notice of the transfer, if the debts or liabilities were incurred by the shareholder. The lien being created by statute, is limited in operation and extent by the terms of the statute, and can arise and be enforced only in the event and under the facts provided for in the statute. If there is a levy on the stock, or a transfer of it, subsequent to the incurring of a debt or liability to the corporation by the shareholder, the levy or transfer is subordinate to the corporation’s lien. But if the debt or liability does not precede the levy or transfer, the lien is subordinate, and must yield, unless the corporation dealt with the shareholder without knowledge or notice. Having knowledge or notice, in fair dealing, the corporation could not extend credit to the shareholder, relying upon the lien to displace whatever of right the levy or transfer 'may have conferred.
The pledge to the appellee preceded in point of time the extension of credit to Boddie, and the creation of the debts for the security and payment of which the Trust & Savings Company now attempts to assert a statutory lien on the stock. The material inquiry is, therefore, whether the com
If in his capacity of casliier Hudson negotiated, or aided in negotiating the loan for Boddie, and in the course of the negotiations acquired knowledge and received notice of the pledge, that knowledge was also acquired, and the notice also received, in the course of the collection for Boddie of the proceeds of the loan, and it can not be doubted that in making the collection he acted wholly for the company, and within the line of his duty and authority. There are but few functions of a banking institution more frequently excised, that that of making collections, especially at places distant from the locality of the bank. The collection, of necessity, is made through the medium of correspondence, and the conduct' of its correspondence is surely, according to the usages and practice of banking institutions, within the line of the duty and authority of the cashier. The loan having been negotiated, a pledge of three hundred shares of the capital stock of the Trust & Savings Company was the required security for- its repayment. Hudson attested the transfer of the certificates of stock, and they were forwarded to the appellee in an envelope bearing the stamp of the company. At the same time, the Trust Company, through Hudson, its cashier, drew upon Seixas, the broker in New Orleans, for $24,162.50, the net proceeds of the loan, remitting the draft to the appellee for collection, with instructions to collect and deposit to the credit of the company in the Whitney National Bank of New Orleans. The collection and deposit were made, of which the company
It is insisted that although Hudson, in his relation and capacity of cashier, acquired knowledge and received notice of the pledge, the knowledge and notice is not imputable to the company to affect such transactions had with Boddie, which were conducted by other officers and agents subsequent to Hudson’s death, and who were without such knowledge or notice. This insistence is founded in a misapprehension of the principles of law, and of its true theory. The knowledge ana notice an agent acquires and receives in the transaction of the business of the principal, is not personal, pertaining to the agent only. The legal principle is thus tersely expressed: “Notice to an agent is notice to the principal.” — Wade on Notice, § 672. And the theory of the principle is, that if the principal had in person transacted the business, he would have acquired the knowledge,
We find no error in the record, and the decree of the chancellor is affirmed.