Union Bank of Louisiana v. Desban

Simon, J. The defendant is appellant from a judgment which condemns him to pay the sum of sixteen hundred dollars, with ten per cent interest per annum, from the 1st of March, 1837, until paid. By a notarial act passed on the 28th February, 1837, John G. Banks sold to the defendant several lots of ground with the build-: ings and improvements thereon erected, and also forty shares of the capital stock of the Union Bank of Louisiana, for the sum of ten thousand and forty dollars, sixteen hundred of which the defendant obligated himself to pay to the plaintiffs, being the balance due to the Union Bank from the said John G. Banks, on the forty shares of stock transferred by the said notarial act. The vendor further agreed' to transfer the forty shares sold by him, on the transfer book of the Bank. It appears, in evidence, that a few [487] days previous to the sale and transfer made by John G. Banlcs to the defendant, an application was made by him to the Board of Directors of the Union Bank, who, at their meeting of the 23d of February, consented to the transfer subsequently executed, the stock so transferred to be secured on the property sold by John G. Banks to the defendant, which was already mortgaged in favor of the Union Bank to secure the same stock. The defendant having failed to comply with his obligation, the present suit was instituted, which he attempts to resist on the ground that he is not liable until the condition contained in the act of sale is complied with, to wit, the agreement of the vendor to transfer the bank stock mentioned therein to him. The court below, in rendering judgment in favor of the plaintiffs, ordered that its execution should be stayed until the transfer to the defendant be made, on the books of the Union Bank of Louisiana, of the forty shares of stock sold him by.John G. Banks. Sometime after-wards, the certificate of the Cashier of the Union Bank was produced, filed and recorded, in the words following, to wit: “ Union Bank of Louisiana, 25th April, 1842. “ I hereby certify that the forty shares of stock of this Bank sold by John G. Banks to James Desban, according to the within act of sale, were transferred by me by virtue of said act on the books of this Bank, on the 19lh of March last. “ Feed. Fbjey, Cashier.” Whereupon, the inferior court, considering that the condition of the judgment had been satisfied, ordered the rule taken by the defendant on the plaintiffs to show cause why the transfer of stock should not be set aside, to be discharged ; from which two judgments the defendant has appealed. The facts disclosed by the evidence show clearly, that the sale and transfer of forty shares of the capital stock of the Union Bank of Louisiana were made by John G. Banks to the defendant, with the consent and approbation of the Directors. This was in compliance with the 29th section of the charter which provides, (Acts of-1832, page 65,) that “ whenever application shall be made by a stockholder to transfer his stock and be discharged, such transfer and discharge may take place upon the uew stockholder’s furnish [488] ing mortgage to the satisfaction of at least a majority of all the Directors ; and, in all such cases of transfer and discharge, the vote shall be taken by yeas and nays.” Under this section of the charter we understand that, when a stockholder intends or wishes to transfer his stock, the first step he has to take is to apply to the Board of Directors, to lay before them a statement of the circumstances under which the transfer is to be made, and of the new mortgage or securities which are to be furnished ; and that, if his proposition meet the approbation of a majority of all the Directors, he may then proceed to execute his deed of sale or transfer, which is to be considered as accepted beforehand by the Bank, and also the act by which the new mortgage or securities are to be given, without perhaps any other formality than spreading the name of the new stockholder and his number of shares on the books of the Bank. This last formality, however, if required, adds nothing to the validity of the transfer, which, being made with the consent and previous authorization of the Directors, has as much force'and effect as if regularly acceptéd by a subsequent act. All this appears to have been done in the present case ; and although the act of sale contains a stipulation that the vendor is to transfer to the defendant his forty shares on the transfer book of the Bank, the only meaning of which undoubtedly was that he should cause the defendant to be recognized as a stockholder on the books of the Bank, we think that the contract was complete with regard to all the parties therein interested, and was binding upon them, and upon the Bank which had previously permitted and authorized its execution, immediately after the act of sale and transfer had been duly executed. To require more in order to give effect to the transfer, would be superfluous, and is not contemplated or provided for by the charter. The defendant was, therefore, bound to pay the sum of $1600 to the plaintiffs, immediately after the execution of the act of sale ; and having thus made himself a debtor of the Union Bank, he became also obligated to pay the interest of ten per cent promised by the act of John G. Banks, in conformity with the 24th section of the charter. As he stood in Banks’ place towards the Bank, from having assumed the mortgage executed by his vendor on the [489] lOtb of October, 1835, be necessarily became subject to the same obligations. Judgment affirmed.