173 Iowa 489 | Iowa | 1916
Lead Opinion
It appears that, long prior to the levy of defendant’s execution, the execution debtor had transferred the shares in
“The transfer of shares is not valid, except as between the parties thereto, until regularly entered upon the books of the company, showing the name of the person by and to whom transferred, the numbers or other designation of the shares, and the date of the transfer; but such transfer shall not exempt the person making it from any liability of said corporation created prior thereto. Its books must be so kept as to show the original stockholders, their interests, the amount paid on their shares, and all transfers thereof; which books, or a copy thereof, so far as the items mentioned in this section are concerned, shall be subject to the inspection of any person desiring the same. [When any shares of stock shall be transferred to any person, firm or corporation as collateral security, such person, firm or corporation may notify in writing the secretary of the corporation whose stock is transferred as aforesaid, and from the time of such notice, and until written notice that said stock shall have ceased to be held as collateral security, said stock so transferred and noticed as aforesaid shall be considered in law as transferred on the books of the corporation which issued said stock, without any actual transfer on the books of such corporation of such stock. In such case, it shall be the duty of the secretary or cashier of the corporation or of the person or firm to which such stock shall have been transferred as collateral security at once, upon its ceasing to be so held, to inform the secretary of the corporation issuing such stock of’such fact. The secretary of the*492 company whose stock is transferred, as collateral shall keep a record showing such notice of transfer as collateral, and notice of discharge as collateral, subject to public inspection. No holder of stock as collateral security shall be liable for assessments on the same.] ”
The judgment below will therefore be — Affirmed. ■
Dissenting Opinion
(Dissenting) — Under the rule in this state, statutes regarding the transfer of corporate stock must be
“The design of the last-quoted section was to enable stockholders to hypothecate their shares of stock without cancellation thereof and the issuance of new stock, and yet protect the pledgee against the claims of the creditors of the pledgor and purchaser without notice. Moore v. Marshalltown Opera-House Company, 81 Iowa 45; Ft. Madison Lumber Co. v. Batavian Bank, 71 Iowa 270; Ottumwa Screen Co. v. Stodghill, 103 Iowa 437; First National Bank of Waterloo v. Park, 117 Iowa 552. In any event, our duty ends in construing the statute in accord with the manifest purpose of the lawmakers which, as seen, results in exempting the holders of stock as collateral security from liability as stockholders."
So that, under the law as amended, no transfer of shares upon the books of the company is to be made where the stock is assigned as collateral security.
Much reliance is placed upon the use of the word “may" in the amendatory statute, because the term is' permissive rather than mandatory. Fortunately or unfortunately, the word has no such significance. All depends upon the nature and purpose of the act in which it is found. Minor v. Mechanics’ Bank of Alexandria, 1 Pet. (U. S.), 44, 64; President, Director & Company of the Newburgh and Cochecton Turnpike Road v. Miller, 5 Johns. Ch. 101. The word is quite as often used in an imperative as in a permissive sense. As a rule, whenever there is a grant of right, either to the public or to particular individuals, the use of the word “may” is regarded as mandatory. Wendel v. Durbin, 26 Wis. 390. Perkins v. Lyons, supra, relied upon by the majority, instead of being an authority in support of the proposition that the amendment to the statute prescribes a cumulative method of transfer or