Hodges v. Planters' Bank

Chambers, Judge, delivered the opinion of the court The sole question for decision is, whether the appellant is entitled to a credit at the hands of the appellee, for the value of the stock transferred to him by John R. Magruder. That the note endorsed by the complainant and George L. Magruder, and upon which the judgment was obtained at law, is the note intended by the agreement, and transfer stated in the bill, is manifestly shown by the bill and answer. The error therefore, in the description given of that note in the transfer, by which it is said to be a note endorsed by the complainant, and John R. Magruder, Jr. can confer no inte [310] rest on John R. Magruder, Jr. to affect which it was necessary to make him a party. The charter of the bank, (1817, ch. 16,) for its better security, and as a means of enforcing the payment of debts due to it, gave the privilege of preventing the transfer of its stock, by any stockholder whose debt was actually due, until payment of the debt. This privilege the bank may waive. If the Directors of the bank after deliberate consideration, and by an express resolution had waived the privilege in this particular case, the binding and conclusive effect of such a resolution would seem to be undeniable. The appellant was not then a member of the Board of Directors, nor as far as the facts enable us to judge even a stockholder, admitting for the sake of the argument that such a fact would have had any influence upon the transaction. Certainly then, it was not his business, nor was the obligation imposed upon him, to inquire into the special power of the regular officers of the bank, to perform a duty appropriate to their station. The bank must act by its officers, and can act in no other mode. The transfer of - stock is directed and managed by the President and Cashier. The usual forms and ceremonies were observed in this case, as in all others of transfer of stock. The Directors of the bank confide this duty to the President and Cashier; persons receiving transfers know no other officers in the transaction. If fraud or collusion exist, it will, as in all other cases, vitiate the act, but if there be no fraud or collusion, the bank, and not the transferee, must abide the loss, if a loss be sustained by any act of the proper officer of the bank, arising either from a misconception of his duty, or a want of judgment. No fraud, or collusion is pretended in the case before us, and the transfer must there fore, as the matter stands upon the bill, and answer be considered effectual to pass the stock to the complainant, for the purpose mentioned and intended in its terms. For these reasons we think the court below erred in dis [311] solving the injunction, as to so much of the debt claimed by the judgment, as would have been paid and discharged by the value of the stock. In reference to the residue of the. debt, the dissolution was proper. A diversity of practice has existed in the different courts of equity in this State, in the case of injunctions to stay judgments at law, and we deem it proper to express the opinion, that whenever an injunction is granted, upon the ground that the defendant at law is entitled to a credit, for a sum less than the whole amount of the judgment, it ought, to be with a proviso that the plaintiff at law, may proceed by execution to collect the undisputed balance of the judgment, there appearing no cause, by the complainant’s own statement, why the plaintiff at law, should be delayed as to the residue of the debt. ORDER REVERSED.