| Me. | Jul 1, 1874
There are two fatal objections to the maintenance of this action:
I. A bank has the right to hold a cash dividend as pledged for the indebtment of the shareholder to the bank.
It has been expressly decided in the supreme court of the United States, that since the National Bank act of June 3, 1864, went into effect, neither by the act itself, nor by any by-law based upon any authorized provision in the “articles of association,” can a national bank create a lien upon the shares of its stock
The rule has long prevailed in many jurisdictions that a corporation has no implied lien on the shares of its stockholder for debts due from him and cannot hold them against a purchaser or attaching creditor. Sargent v. Franklin Ins. Co., 8 Pick., 90; Mass. Iron Co. v. Hooper, 7 Cush., 187; but that a bank deals with its stockholders in the same'manner as it does with its general customers, taking the same security and not relying upon its stock. A different rule was adopted in relation to dividends declared. They were considered as so much money in the possession of the bank belonging to the stockholder, but which should be considered as pledged towards the payment of any just debt then due from him. Bates v. N. Y. Ins. Co., 3 Johns. Cas., 238. This rule was considered a “reasonable one,” and was adopted by the court in Sargent v. Franklin Ins. Co., supra. We fail to perceive any real objection to such a rule. It is not inconsistent with any provision in the bank act, and neither is it in conflict with any principle of public policy. It cannot affect the free sale and transfer of shares, for the dividend does not pass with the transfer of the share, being the property of him who is the shareholder when it is declared. So long, then, as the plaintiff’s overdue notes remained unpaid, he could not recover the dividends declared upon his shares, because of this equitable lien.
And neither could he maintain an action therefor without a previous demand. Scott v. Cent. R. R. Co., 52 Barb., 45" court="N.Y. Sup. Ct." date_filed="1868-11-02" href="https://app.midpage.ai/document/scott-v-central-railroad--banking-co-of-georgia-5461710?utm_source=webapp" opinion_id="5461710">52 Barb., 45. The law does not require a bank, after declaring its dividends, to hunt up and tender to its stockholders their respective dividends, in
II. It had a special lien created by the attachment of his shares on June 21,-1872, which continued until July 10, 1873, when the attachment was dissolved.
The net profits of a bank remain the property of the bank and are inseparable and undistinguishable from it, and will pass by the name of stock by sale, bequest or levy, until by the resolution of the directors, they are separated and set apartas dividends. This almost necessarily results from the utter impracticability of ascertaining the real circumstances of the bank until the expiration of the full period for which they are declared; and when declared they become the property of the then stockholders. Goodwin v. Hardy, 57 Maine, 143; March v. Eastern R. R. Co., 43 N. H., 515; Foote, appellant, 22 Pick., 299; Granger v. Bassett, 98 Mass., 469" court="Mass." date_filed="1868-01-15" href="https://app.midpage.ai/document/durant-v-eaton-6415231?utm_source=webapp" opinion_id="6415231">98 Mass., 469; Minot v. Paine, 99 Mass., 101" court="Mass." date_filed="1868-03-15" href="https://app.midpage.ai/document/minot-v-paine-6415296?utm_source=webapp" opinion_id="6415296">99 Mass., 101.
Shares are a peculiar property, but are declared by all modem charters to be personal property. The title is a legal one, created and defined by law, and it may be transferred by contract, bequest or levy. The mode for securing a lien thereon and passing the title by levy, is expressly- provided by our own statute, as follows:
The attachment was perfected in strict compliance with this provision. We can hardly conceive of a better “notice” of an attachment than an attested copy of the officer’s return of the attachment, indorsed upon an attested copy of the writ. The attachment being valid, it created a lien on the shares “and on all accruing dividends,” i. e., all dividends declared on such shares during the continuance of the attachment regardless of the time when the acquisitions out of which they are declared may have accrued. In perfect accord with this view, the statute further provides that “if such shares were attached in the suit in which the execution issued,” the purchaser at the sale on execution “shall have all dividends which accrued after the attachment.” R. S., c. 84, § 15.
The plaintiff invokes § 35 of the Act of Congress of 1864, (13 Stat. at Large, 102,) viz: “That no association shall make any loan or discount on the security of the shares of its own capital stock, nor be the purchaser nor holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith and contends that this provision forbids the attachment by the bank of any shares of its own capital stock, “unless it shall be necessary to prevent loss,” &c. We do not understand that the attachment or sale on execution of shares implies a purchasing or holding on the part of - the creditor. Shares are personal; and any person may purchase at the sale. If, like a levy on real estate, the title necessarily passed to the creditor, the construction contended' for by the plaintiff would be much strengthened. But although, to use the language of Mr. Justice Davis, in Bank v. Lanier, supra., “so marked is the policy of Congress on this subject, that it does not allow a
If the defendant did have a lien on the shares by reason of the attachment, then the demand will not avail the plaintiff in the maintenance of this action. Plaintiff nonsuit.