Steamship Dock Co. v. Heron's Administratrix

The opinion of the court was delivered by Thompson, J. It is clear that there is no lien at common law against stock for debts in favour of the corporation issuing the stock: Ang. & Ames on Corp., § 355, and authorities there referred to. It is obvious that a different rule would subvert the wholesome doctrine of the common law against secret liens. When such a lien exists, it is by statutory authority, either expressed in the act of incorporation or by by-laws made by authority of the act. It is so by several general acts in this state — for instance, the General Bank Act of 1850, § 10; also, the General Canal and Railroad Act of 1849, § 7; and in the Turnpike, Bridge and Plank Road' Act of Í849, § 8, and perhaps in some special instances. Whether a mere by-law would be sufficient to create a lien on stock for a general balance due the company in case of trading, manufacturing or other corporations not engaged in loaning [282] money, seems not only to be doubted but generally denied. Cer tainly I think it would not be, unless notice of the by-law were brought home to a purchaser of stock before the purchase. But it is not indispensable in this case to decide these questions ; for no lien is given by the act incorporating the defendants, nor did they pass any by-law to create a lien, supposing they had power, till after the death of the testator. The rights of creditors upon the decedent’s estate were then fixed, and by no act of theirs could they be changed. The enactment of the by-law was after the death of the decedent, and of this the equitable plaintiff had no notice in any shape or manner. The estate is insolvent, and if by this ex post facto by-law of the defendants, they could increase their rights in the distribution of the assets of the estate, they would not only work a wrong to the purchaser of the stock without notice, but would diminish what was legally distributable to creditors upon the decease of the testator. It is very much in principle the case of buying up claims to set-off against the claim of an insolvent estate to a debt. This may not be done: Bosler v. The Bank, 4 Barr 32; Singerly v. Swain’s Administrators, 9 Casey 102. To these might be added many authorities, but it is not necessary. We need not enlarge ; and as we perceive no error in the record the judgment is affirmed.