Dickinson v. Central National Bank

Colt, J. It was decided in Fisher v. Fssex Bank, 5 Gray, 373, that the shares in a bank whose charter provides that they shall “be transferable only at its banking-house and on its books,” cannot be effectually transferred, as against a creditor of the vendor, who attaches them without notice of any transfer, by a delivery of the certificates thereof together with an assignment and blank power of attorney from the vendor to the vendee, even if notice of such transfer be given to the bank before the attachment The express provision of the charter [282] regulating the mode of transfer was declared to have the force of a general provision of law binding on the corporation and its stockholders, and on all other persons. But it was decided in Sargent v. Essex Marine Railway, 9 Pick. 201, that an assignment of shares by deed, accompanied by delivery of the certificates to the purchaser, was valid between the parties, and against attaching creditors, although the by-laws of the corporation required that all transfers should be made in the treasurer’s books. The provisions of the bylaws were declared to be “an arrangement of the corporation for their own convenience, and is so far binding upon purchasers that they cannot compel any payment of dividends, or insist upon certificates, without applying to have a transfer made conformably to the by-laws.” In the absence of any rule to be found in the general laws, or in some express provision of the charter, determining what shall constitute an actual transfer of shares in a corporation, the rules which govern the transfer of similar property at common law must be applied. The laws of the United States, under which all national bank ing associations are organized, declare that “the capital stock of each association shall be divided into shares of one hundred dollars each, and be deemed personal property, and transferable on the books of the association in such manner as may be prescribed in the by-laws or articles of association.” U. S. Rev. Sts. § 5139. It is contended by the plaintiff that this clearly prohibits a transfer of shares except on the books of the corporation : while the defendant insists that the provision was in tended only to give to the corporation the usual power to regulate, by its own by-laws, the manner of keeping a record of the transfers of its own stock upon its own books, as a means of protection in the matter of making dividends, conducting elections of officers, and other corporate proceedings; and that it does not forbid a transfer of title in other legal modes. It is not necessary now to decide this question. It is enough in the present case for the bank to show that the new certificate for Pond’s stock was issued to one who had become the owner of the shares by a title good against Pond’s assignee in bankruptcy. As between Pond and Coes & Co., the delivery of the .•certificate, as collateral security for a debt due the latter, with [283] a power of attorney to transfer the shares and execute an assignment of them to any other person, conferred a power coupled with an interest, and gave to any one claiming under an execution of the power a right to demand of the bank a certificate of the stock. The subsequent bankruptcy of Pond did not operate to vest in the plaintiff, as his assignee, a right to the shares in question, as against Coes & Co., or give him a right to prohibit the bank, upon the surrender of the old certificate, from issuing a new certificate to the person to whom they were transferred under the power of attorney. The delivery of the stock as security for a debt, with the execution of the power of attorney, gave to Coes & Co. a power coupled with an interest, which was not revoked by the bankruptcy of Pond, and could only be revoked by the payment of the debt. Hunt v. Rousmanier, 8 Wheat. 174. Story on Agency, §§ 477, 482. The assignee under the bankrupt act, except as to property conveyed for the purpose of defrauding creditors, and in violation of the provisions of the act, took no greater right in property than the bankrupt had at the time of filing his petition. U. S. Rev. Sts. §§ 5044, 5046. He took such estate only as the bankrupt had a beneficial as well as legal interest in, and which he was required to apply to the payment of the debt. Dugan v. Nichols, 125 Mass. 43. Kenney v. Ingalls, 126 Mass. 488. Donaldson v. Farwell, 93 U. S. 631. The provision making void conveyances by the bankrupt in fraud of creditors does not apply to conveyances in preference of creditors made more than four months before proceedings in bankruptcy. Coggeshall v. Potter, 1 Holmes C. C. 75. The only right which the plaintiff as assignee took in these shares was the right to redeem them by paying the debt which they were pledged to secure, and that right was foreclosed by sale of the same at public auction after notice. Gen. Sts. c. 151, § 9. The offer of the plaintiff to prove that Coes & Co. agreed to keep secret the delivery of the certificate and the execution of the power to them, in order that Pond might obtain a false credit at the bank, was properly excluded. For even if a court of equity would refuse relief to any party to such an agreement, that consideration does not establish the right to maintain this [284] action to recover damages against the bank. It is not shown that the bank had any knowledge or notice of such a corrupt-agreement, and, without such knowledge, the defendant cannot be charged with a conversion of the property, because it has delivered a new certificate to one who had an apparently good title. Exceptions overruled.