Bank of Pontotoc v. Robinson

Sykes, P. J., delivered the opinion of the court. The bill of complaint of the Bank of Pontotoc in substance alleged that Jerry Robinson was indebted to it in the sum of four hundred fifty-one dollars and ten cents, [413] evidenced by his promissory note; that at the time of the execution of the note Robinson was the owner of five shares of stock of the'bank; that while he was indebted to the bank he attempted to transfer to the New Albany Wholesale Grocery Company his certificate of stock in the bank as security for an indebtedness; that this transfer was made without the consent of the directors of the bank, and was not evidenced by any record of the bank; that by reason of the terms of the certificate, and by operation of law, the bank has a lien on the stock to secure the amount due it by Robinson; and that the attempted transfer to the groce^ company is void. Each certificate of stock of the Bank of Pontotoc contains the following* provision: “No transfer shall be made by any stockholder liable to this bank as principal debtor or otherwise, without the consent of the board of directors. ’ ’ The grocery company demurred to this bill, its demurrer was sustained, and the bill dismissed, from which decree this appeal is here prosecuted. It is the contention of the appellant bank that it has a superior lien upon this stock by virtue of the clause above quoted, contained in its stock certificate. The appellee contends that this provision of the stock certificate is nullified by the following language contained in section 3606, Hemingway’s Code, namely: “But no . . . bank shall accept as collateral, or be the purchaser of its own capital stock, except in cases where the taking of such collateral or such purchase, shall be necessary to prevent loss upon a debt previously contracted in good faith, and in such cases, unless full payment of such debt is made, such stock shall be sold by the bank within twelve months from the time it was acquired. ’ ’ In this case there was no attempt by Robinson to pledge his stock to the bank, but it was pledged by him to the appellee grocery company. [414] The question here presented was decided by this court in the case of Planters’ Bank v. Eskind & Sons, 99 So. 148. The only difference between the Eskind case and the case at bar’ is that in the Eskind case the provision was contained in the charter of the bank, while in "this case it is contained in the stock certificate. The rule, however, governing' one governs in the other. In the Eskind case it is held that section 3606 prohibits any lien upon the stock as given in the bank’s charter, except where the bank takes such stock in order to prevent the loss of •a previous debt due the bank by the stockholder. For the same reason, this section prohibits the giving of any lien upon this stock in the stock certificate. Consequently tliis provision of the stock certificate is nullified by this section of the Code. The decree of the lower court is affirmed. Affirmed.