70 Mo. 262 | Mo. | 1879
This case depende altogether upon the construction of certain by-laws of tho bank claimed to be in accordance with general legislation. The plaintiff claimed that S. Adler was the owner of 850 shares of the capitaL stock of defendant; that said Adler, for valuable consideration, sold said stock to plaintiff % and that defendant refused to permit a transfer of said stock on the books of the bank. The defendant admitted the transfer, but denied that it was bound to accept the plaintiff as a stockholder, because Adler had only paid thirty per cont. on his stock, and the bank had ¿ lien on the stock ibla the seventy per cent, not paid. The plaintiff, who was a citizen of Ohio, bought the stock in question from the stockholder who had paid up all calls made, but the president refused to permit his purchase, to be entered on the books of the bank. The question is. whether the president and board had any such power, and whether the assignment would not be valid, not merely against the assignor, but against tho company, and compel them to respond in damages for a refusal to recognize it.
The 16th. section, of article 1, chapter 37, Wagner’s Statutes, page 292, reads as follows: ' “ The stock of every company formed under this act shall be deemed persona] estate, and shall he transferable in the manner prescribed
The 3rd section of the by-laws of defendant, is as follows: “ The cashier shall also cause a transfer book to be kept, in which every transfer shall be made by the stockholder, his attorney in fact, or legal representatives; and no transfer of stock shall be valid until it is so entered, attested by the signature of the president or cashier. And no transfer of stock shall be allowed or valid so long as the holder is in arrears to this bank, or in any form indebted to it.” The 4th section of the by-laws declares: “The bank reserves to itself a lien upon all stock issued to or held by any stockholder for the security of any debt owing in any form to said bank by such stockholder, whether the same is due or not due, and whether such liability was created before or after the issuance of such stock certificate.”
The stock certificate of Simon Adler and the assignment to plaintiff, were as follows :
CAPITAL STOCK $500,000.
No. 68. State of Missouri, ShaRes, 8501
The Bank of St. Joseph.
This is to certify, that S. Adler is entitled to three hundred and fifty shares of the capital stock of the Bank of St.. Joseph, upon each of which shares $30 has been paid, the remainder payable at such times as the board of directors of said bank may order. This stock is transfer able only on the books of said bank injoerson, or by attorney, on return of this certificate; provided, however, that no such transfer shall be made while the said S. Adler is in any manner indebted to said bank. For any and all such indebtedness direct lien is hereby reserved and given.
St. Joseph, Mo., February 10, 1874.
(Signed,) C. E. Burnes, President.
(Signed,) R. P. Richardson, Cashier.
For value received, I do hereby sell, assign and transfer to Aaron Kahn, three hundred and fifty shares of the capital stock of the Bank of St. Joseph, standing in my name on the books of said bank and represented by the within certificate, and do hereby irrevocably constitute and appoint Abraham Adler, attorney in fact, to transfer the-said stock on the books of said bank in ouch form and manner as may be necessary or required by the regulations of said bank in that behalf in the premises.
Witness my hand, tins 12th day of April, A. D. 1876.
(Signed,) S. Adler.
The question in this case evidently depends on the construction of the 3rd section of the 8th article of tho bylaws of the company. That section provides that “ no transfer of stock shall be allowed or valid so long as the holder is.in arrears to the bank or in any form indebted to it/’ and if the words “ in arrears to the bank,” or the words “ in any form indebted to it,” meant to embrace an indebtedness arising from an original subscription, upon which the stockholder had paid all that had been called for, it is clear that the bank officers were authorized, or rather required to prohibit such transfer on the books of the company. The term indebtedness is a very general and comprehensive one, and undoubtedly may, under proper circumstances, be held to embrace unpaid subscriptions of stock, as it has been frequently held to include debts not due, as well as those that are due. There are, however, some difficulties which, attend so liberal a construction of this term in the present case, which must readily occur when the language of this by-law is more particularly scrutinized. It will be observed that this provision does not leave any discretion with the officers of the hank to admit or reject the proposed transfer; the prohibition is unconditional; “ no transfer of stock shall be allowed or
Besides the inconvenience to which such a construction leads, this by-law thus construed would plainly conflict, not merely with provisions in the statute which constitutes its charter, but with the general scope of our statutory and common law as expounded by our courts. Take, for instance, the act concerning executions : “ When any rights or shares of stock in any bank, company or corporation, shall be sold, the officer making such sale shall execute an instrument in writing, reciting the sale and the payment of the consideration, and conveying to the purchaser such rights and shares, and shall also leave with the cashier, secretary or chief clerk, or if there be none, with any other officer of such bank, corporation or company, a copy of the execution and his return thereon; and the purchaser shall, thereupon, be entitled to all dividends and stock, and to the same privileges as a member of such company or corporation as such debtor was entitled to.” Here the statute substitutes for a transfer on the books of the company a reception by its officer of a copy of the execution, and the purchaser at the execution sale is, thereupon’ entitled to all the privileges of the debtor, as a subscriber. If there was unpaid and uncalled for stock in such a ease, the purchaser, nevertheless, gets all the rights held by the debtor stockholder, whether the company chooses to rec
Objections might originate from other causes, distinct from the original subscription, and such objections could be provided for in the by-laws. The validity of such bylaws was recognized by this court in the case of St. Louis Perpetual Ins. Co. v. Goodfellow, 9 Mo. 150. They were held to be reasonable and not inconsistent with our general laws concerning personal property, whether such debts wore due or not. And such, we think, is the proper construction of the by-law in question. It prohibits the transfer of stock when the - stockholder is “ in arrears” in answering calls on his unpaid, stock, and also when he is otherwise indebted to the bank, outside of his original subscription. The construction contended for by the defendant would make the by-law an unreasonable one, and m conflict with, if not the letter, at least with the spirit of many of our statutory provisions relative to this subject.
Our attention has, however, been called to a decision of the Supreme Court of Pennsylvania which is supposed to conflict with this conclusion. It is the case of Pittsburg & Conelsville R. R. Co. v. Clark and Thaw, reported in 5 Casey 150. It was held that the liability of a stockholder to pay the amount of stock subscribed was an indebtedness within the meaning of the act, although the installments had not been called for. That opinion was based upon a construction of the provision m the charter of the company, which directed certificates “ to be delivered to the persons entitled to receive them, which evidences of
"We have conceded at the outset of this opinion that the word “indebted” is sufficiently comprehensive to embrace unpaid stock as well as any other form of indebtedness, provided the context and general intent of the law does not require a more narrow interpretation. It will be perceived that the law here construed by the Supreme Court of Pennsylvania differs from the by-law we have been considering in several essential points. It provides that the transfer is subject to all payments due or to become due thereon; that it is in the discretion of the board to consent to any transfer or refuse it, and that in any event, whether the directors consent or not, none of the liabilities of the original owner are discharged. Such is the construction given to this clause by the Supreme Court of Pennsylvania.
That such a provision might be made in the statute, or charter of the company, and might be a reasonable and useful one in a by-law, we are not disposed to deny, bat the by-law in question is certainly not such a provision, No discretion is allowed the board of directors in'this bylaw ; nothing is said about stock to become due, nor is the
How and when is he in arrears? "When he has paid no all calls ? Can one be said to be in arrears when he has paid no all calls upon him? Undoubtedly the word indebted, in the subsequent clause of this section, is large enough to include unpaid stock never called for ; but such a construction of the last clause renders the first clause unmeaning and superfluous. I suppose the words “in arrears,” when applied to stock, meant just what the statute did, when it declared that no shares of stock should be transferred until all calls thereon had been fully paid in, and the remaining clause of the by-law was inserted to provide against transfers whilst there was an indebtedness outside of the subscription. This ease was decided in the court below upon the sole ground of the validity of the by-law we have been considering, construing it as prohibiting all transfer's by a stockholder who had not paid up all his stock, whether called for or not. What other grounds of objection there may have been, or yet may be, the record does not disclose, and we cannot anticipate imaginary cases. The judgment must be reversed and the cause remanded.'