Case Name: Isaac S. Tuttle, plaintiff in error, vs. Robert Walton, defendant in error
Court: Supreme Court of Georgia
Jurisdiction: Georgia
Decision Date: 1846-05
Citations: 1 Ga. 43
Docket Number: No. 10
Parties: Isaac S. Tuttle, plaintiff in error, vs. Robert Walton, defendant in error.
Judges: 
Reporter: Georgia Reports
Volume: 1
Pages: 43–68

Head Matter:
No. 10.
Isaac S. Tuttle, plaintiff in error, vs. Robert Walton, defendant in error.
A by-law which assorts a lien on the slock of members of a corporal ion, for debts due the Company, is, as between the corporators themselves, valid and binding.
A purchaser, under execution at Sheriff’s salo, of stock or shares of a corporal or, with notice of a lien of the Company upon such stock, under a by-law of the corporation, tor the indebtedness of such corporator to the Company, (the lien created by such indebtedness under the by-law, being prior in point of time, to the lien acquired under the judgment,) purchased only such litio as was in the corporator, and no other ; and, therefore, was not entitled to a transfer of the stock so purchased, under the act of 1822, without first discharging the lien created by the corporator’s indebtedness under the by-law.
This was an action on the case, tried in ¡he Superior Court of the county of Richmond, before Judge Gamble, at March Term, 1846 ; the facts of which are as follows : On the 4th of October, 1840, William Glendenn.ing became the proprietor of twenty-five shares of bank stock of the Augusta Insurance and Banking Company. In the script (the evidence of his ownership) is the following clause : “ 'Which stock is subject to the payment of all debts due, or to become due, from said stockholder to the said Company, either as principal, security, or otherwise, and is transferable only on the books of the Company.” The following is one of the by laws of the corporation : “ JVo stockholder who may be indebted to the institution, as payer or endorser on any note or notes, laying over and dishonored, shall be permitted to transfer his stock: the Company shall, in that case, be considered a creditor in possession; and such possession, and such dishonored note or notes, shall constitute a lien on the stock, which shall be held subject to the payment of such note or notes. ”
Glendenning became liable and indebted to the corporation, as endorser of a note for $3,500, dated January 27, 1842, and payable sixty days after the date, which was duly noted and protested for non-payment, and notice thereof given, and which is still over in bank dishonored.
Subsequent to the maturity and dishonor of this note, Isaac S. Tuttle (the plaintiff in error) obtained a judgment against Glendenning in the Inferior Court of Richmond county, and in 1843, caused execution, issued under said judgment, to be levied upon the said twenty-five shares of stock, (which were then, and still continued standing upon the books of said company, in the name of said Glendenning,) agreeably to the provisions of the Act of 1822, entitled “ An Act to make bank and other stock subject to execution.” At the sheriff’s sale, on the 6th of June, 1843, when the sheriff was proceeding to sell, the Augusta Insurance and Banking Company gave public notice of their lien upon the stock, by virtue of the by-law and script issued in conformity thereto before mentioned, for the payment of the said note. The sale proceeded, and the plaintiff in error (being the plaintiff in execution) became the purchaser, and made a demand upon the defendant in error (who was, and continued to be, the Secretary and Treasurer of said company, and the officer whose duty it was to make transfers and issue script of stock in said company) for a transfer of the shares so purchased, agreeably to the above-recited Act; which transfer was refused. Upon this refusal, the plaintiff in error brought his action on the case in the court below ; to which the defendant in error pleaded, first, the general issue; and secondly, the lien of the company on the shares purchased as aforesaid as herein before set forth; and the notice given at sheriff’s sale. The defendant in error confessed judgment, subject to the opinion of the court below, upon his second plea, which was admitted to be true in fact. The plaintiff’s counsel subsequently in the Term aforesaid, in the court below, moved for leave to enter judgment upon the said confession ; which was refused — the defendant’s said second plea sustained, and the confession set aside. To which decision of the court below, the plaintiff’s counsel excepted ; and for specification of the errors complained of therein, assigns—
1st. That the court decided that the Act, entitled “ An Act to make bank and other stock subject to execution,” approved 21st December, 1822, created only a qualified lien on bank stock.
2d. That the court decided that a purchaser at sheriff’s sale, under the Act of 1822, acquired no better title to bank stock, than a voluntary purchaser, anterior to that Act.
3d. That the court decided, that because the purchaser at sheriff’s sale had notice of the encumbrances, liens and conditions under which Glendenning held the stock sold, lie therefore must take it, as it was held by Glendenning, subject to all the equities and rules of law to which it was subject in his hands.
4th. That the court decided, there was nothing in the by-law pleaded by defendant, repugnant to the laws or constitution of the State of Georgia.
5th. That the court decided, that said by-law was in conformity with the principles of equity and justice — the laws of trade and public policy.
Gth. That the court sustained the validity of said by-law.
Jenkins, for Plaintiff in error.
The question at Bar is reduced to a competition between the Hen of the plaintiff’s judgment against Glendeming, under which he purchased at sheriff ’s sale, and the lien of the By-law upon which defendant relies. Perse the plaintiff’s Hen is indisputable. But the conflicting lien is prior in point of time, and if of equal dignity must have the preference. What is the character of this Hen ? Liens arise either by operation of law, or from contract. Thfe lien is not created by statute; is unknown to the common law. — Angell and Ames on Corporations, 296.
It is founded in no express contract.
It must be supported, if at all, either by raising an implied pledge, by connecting the By-law with the subsequent endorsement and dishonor of the note set forth in defendant’s answer, or by giving to the By-law the force and effect of municipal law. The question is substantially the same. If to raise the implied contract, recourse must be had to the By-law as its foundation, and if that bo void, then the implied contract must fall with it.
The true light, however, in which to regard By-laws, is to consider them as acts of legislation, authorized by the charter, or assumed under it. The Legislature did, in fact, give to this corporation by charter a limited legislative power — limited first in its objects to the internal affairs of the corporation; second, in its subjects to the members of the corporation; thirdly, to a strict conformity to the constitution and laws of the State, and to public policy. If within these limits it is good, otherwise void.
The By-law is intended to accomplish two objects:—
1st. To prevent a voluntary transfer of shares of the capital stock by an indebted corporator.
2d. To create a lien upon such shares for the payment of the debt owed by such corporator.
To the first point we cite 8 Pickering’s Rep. 90:
But the By-law may be good for this purpose, yet bad for the second.
No case can be found directly in point, for or against the second proposition. Tn support of the first, there are authorities.
But for the purpose of distinguishing the two cases, ho cited 6 Pickering, 324; 10 Pickering, 454.
We maintain that this By-law is void:
1st. Because it is vepugnant to statutes of the State.
2d. Because it affects the rights, and interest of strangers to the Corporation.
3d. Because it is against public policy.
I. It is repugnant to the Judiciary Act of 1799, Hotchkiss Dig. 597 — 8. And to the Act of 1822, (ante) which makes “ Bank and other stock subject to execution.” Hotchkiss 604 — 5. The Act of 1822 settles conclusively that bank shares are personal property, and the legal estate in him who holds the script.
What constitutes repugnancy ?
Lexicographers define repugnant to mean, “ contrary to,” “ inconsistent with.”
The repugnancy need not be co-extensive with the operation of the Act; may bo total, extending to all cases ; or partial — limited to a few.
In each case that may arise, the question quoad that case, repugnant vel non. Whenever it occurs the By-law must stand still — the statute must have its course. In the case at Bar regular proceedings were had under the statute, until the plaintiff arrived at the point at which the law directed that the defendant should make him a transfer of the shares purchased. This transfer was refused, and the provisions of the By-law assigned as a reason. Then the statute commands that a particular Act be done, and the By-law prohibits the doing of it. Either this is literally true, or the By-law furnishes no defence in the case.
The mandate of the Statute is clear. The defendant’s disobedience is confessed, ,and the court is called upon to decide that the By-law furnishes a full justification for such disobedience.
Then can it be held that the two are not opposed — not contrary, the one to the other — not inconsistent, the one with the other — that the prohibitory By-law is not repugnant to the mandatory Statute ?
Suppose that, subsequent to the act of 1S22, the General Assembly had passed a general act in relation to banking and other monied corporations, containing the provisions of this By-law — and that this case had arisen under it. The defence must have been successful. But upon what principle would the court have given precedence to the supposed Statute ? Upon this only — “ Leges posteriores priores contrarias ábrogant.” The court would have held that these statutes were both of force, but that where they conflicted, where they were repugnant, they must give effect to the latest expression of legislative will. Such a decision would proceed upon the ground of repugnancy.
Then is not the repugnancy between the Statute and the By-law equally clear ? The very question is, shall the Statute or the By-law govern the case ? If the former, the plaintiff’s redress is certain — if the latter, the defendant’s immunity is equally certain. — 1 Peters C. C. R 390 ; 2 Green N. J. Rep. 222.
It may be said there are liens recognized by law, as equivalent to judgment liens. But those are all legal liens, executed or recognized either by statute or common law. There the competition is resolved by comparison of ages. But a lien competing with a judgment lien, must be raised to the platform of law, before the latter can be' remitted to the test of time.
The defendant’s difficulty is, that the lien he sets up is recognized by no law, common or statutory. The Legislature might have given the company such a lien by provision of the charter ; for they may by law confer a right, incompatible with preexisting law. They not having chosen to do so, the corporation can make no such enactment, by reason of tbe express limitation upon their legisla!ivc powers contained in the charter which confers them. “ They shall make no By-law repugnant to the Constitution or laws of the State.”
IX. Wo say this By-law as against the plaintiff is void, because he is a stranger to the corporation. It is a common law principle, that except in cases of local jurisdiction given by Statute, or resulting from prescription, the By-laws of corporations affect only their own internal affairs, and are binding upon their members only.— Comyns Dig. Title By-law C. 2; Angell and Ames on Corporations, 301; Johnson’s Rep. 115.
III. We say this By-law is void, because against public policy.
1st. It generales secret liens.
All tho legislation of Georgia is in direct hostility to secret and dormant liens. Mortgages are required lo be recorded. — Hotchkiss, 420.
Liens of master carpenters and masons upon buildings erected by them are required to bo recorded. — Hotchkiss, 623-5. Upon the same principle rests all of our legislation relative to dormant Judgments. Banks are required to publish annually the names of their stockholders, and the number of shares hold by each. — Hotchkiss, 360, 1.
This publication gives credit to individual stockholders.
Does tbe law intend to invite credit by publishing to the world that A B and G are tbe owners of certain valuable property, and at tho same time to delude tho public by supporting and sanctioning secret lions upon this property ? — 7 Wheaton's Rep. 46.
Banking institutions are numerous, and their stockholders vastly more so, and many, very many of them, commercial men actively engaged in trade.
If these liens become prevalent great injury must result from them.
2d. Such liens are in restraint of trade. Whilst they improve tho credit of stockholders in tho particular corporations of which they are members, they impair it with the community at large.
3d. Such By-laws open a door to fraud, by inviting collusion between corporations and their members,
A. J. Miller, for defendant.
The By-law relied upon by the defendant is valid. — 2 Peere Williams, 207; 1 Harrington’s Rep. 27; Wordsworth on Joint Stock Companies, 310 ; 8 Sergeant & Rawle, 73, 88; 3 Porter’s Rep. 321. There is no repugnancy between it and the act of 1822.
The Legislature cannot be supposed to intend authorizing the sale of any more than the defendant’s interest in bank stock. Here the right of the company had attached, before the judgment was obtained. Glendenning could not have transferred the stock ; and the plaintiff, especially as he is a purchaser with notice, can have no greater right. Independent of the By-law, the script issued to Glendenning shows the condition upon which he held the stock; and the purchaser at Sheriff’s sale must take it subject to tho same conditions. The lien of tho company is a bar to the plaintiff’s action, notwithstanding the title to the shares was in Glendenning. — 17 Sergeant & Rawle, 285.
“ An Act to make Bank and other Stock subject to Execution.” (Approved December 21, 1822. — Dawson’s Comp.)
Sec, 1. “ From and after the passing of this Act, the shares or stock owned by any person in any of the banks, or other corporations in this State, shall be subject to be sold by the sheriff or his deputy under execution.”
Sec. 2. “ When any sheriff or his deputy shall have placed in his hands any execution against a,ny person who owns any stock or shares in any of the banks or corpo rations of this State, it shall be lawful, and he is hereby required, on application of the plaintiff, his agent, or attorney, to endorse on said execution a levy of the number of shares belonging to the defendant, and after advertising the same agreeably to the law regulating sheriffs’ sales, shall thereafter proceed to sell the said shares or stock; provided always, that he shall set up one share at a time, and shall sell no more than is sufficient to satisfy the amount of executions then in his hands.”
Sec. 3. “ When any constable shall have any execution placed in his hands against any person who is the owner of any shares or stock in any bank or other corporation in this State, it shall bo lawful, and ho is hereby required, on the application of the plaintiff, his agent or attorney, to endorse a levy on said execution or executions in like manner ; and it shall be his duty to make returns of the same to the sheriff of the county in which he lives, which said sheriff shall proceed to sell as pointed out by the second section of this bill.”
Sec. 4. “ When the sheriff or his deputy shall sell any shares in any bank or other corporation in this State, he shall give a certificate of such sale to the purchaser.”
Sec. 5. “The officer of the bank or other corporation, whose duty it may be to make transfers of stock on the books of the bank or other corporation, shall, and he is hereby required to make a transfer of the stock purchased under this act, to the purchaser of the same, upon his, her, or their producing certificate or certificates to the said officer.”
Sec. 6. “ Any transfer made by the defendant, of his bank or other stock, after judgment obtained against him or her, shall be void : Provided, that notice of the obtainment of such judgment be served on the Cashier of such principal bank, or any of its branches, or the proper officer of such other corporation, within twenty days after said judgment is obtained.”

Opinion:
The judges not being unanimous in their decision affirming said judgment, delivered their opinions seriatim as follows :—
Warsee, Judge.
This case, as exhibited to tho court by the record, involves the question, as to the validity of the By-law regulating the transfer of stock, by the stockholders in the Augusta Insurance and Banking Company. By the third section of the act incorporating said Company it is declared, the stockholders in said institution " may make, ordain and establish such bylaws, rules, a.nd regulations, as they may deem, expedient and necessary to carry into effect the objects of the institution; provided such by-laws, rules, ordinances, and regulations, be not repugnant to the laws or constitution of this State or the United States." It is contended by the plaintiff in,error, the by-law mentioned in the record is repugnant to the laws of this State, particularly to the judiciary act of 1799, and the act of 21st December, 1822, making bank stock subject to execution. I have carefully examined both these acts, and have not been able to discover any repugnance which would make void the by-law in question. The bylaw declares, " No stockholder who may be indebted to the institution, as payer or endorser on any note or notes laying over and dishonored, shall be permitted to transfer his stock. The company shall in that case be considered a creditor in possession, and such possession and such dishonored note or notes, shall constitute a lien on the stock, which shall be held subject to the payment of such note or notes."
Did the charter of Augusta Insurance and Banking Company confer the authority on the stockholders to make the by-law, and if so, is it a reasonable regulation, expedient and necessary to carry into effect the objects of the institution ? By the fourth section of the charter, it is provided the capital stock of the company shall not exceed $500,000, which shall be divided into shares of $100. By the sixth section of the charter, the company are authorized to insure property and effects, against loss by fire or water, and all other accidents. By the seventh section of the charter, the company are bound to pay all losses on property or other assurances made by them, within six months after the happening thereof. By the tenth section of the charter the company are authorized to issue bills or notes of credit, payable to bearer, and by the eleventh section of the charter, all bills or notes of credit issued as aforesaid, are to be paid on demand at the company's office. I have referred to the several clauses in the charter for the purpose of showing what were the objects and duties imposed on the company, in order that the expediency or necessity of the by-law, to carry into effect those several objects, might be the more apparent. I am of the opinion, the charter clearly conferred the authority on the company to make the by-law, and that it is not only reasonable, but expedient and highly necessary, to enable them to carry into full effect the objects contemplated by the Legislature. This view of the subject is sustained by authority. Where a charter or statute empowers a corporation to pass such by-laws as are necessary, the by-law to be valid need not recite that it was necessary ; but the necessity will be implied from the act of passing it, being in fact, synonymous with expediency." — Angell and Ames on Corporations, 299; Stuyvesant vs. the Mayor, &c. of New York; 7 Cowen's Rep. 606. The record in this case discloses the fact, there was a by-law made by the stockholders, which prohibited an individual stockholder who was indebted to the.Bank, from transferring his stock, and that such indebtedr ness should constitute a lien on his stock for the payment thereof. The record also exhibits William Glendenning as a stockholder in the company, — that on the 4th day of October, 1840, he became, the proprietor of twenty-five shares of its capital stock; and in the script, which was the evidence of his ownership, these words were inserted — " Which stock is subject to the payment of all debts due, or to become due from said stockholder to the said company, either as principal, security, or otherwise, and is transferable only on the books of the company." This By-law was obligatory, and binding, as between Glendenning and tbe company — as between him and them it had all the force of a stipulated contract.
" By-laws of a corporation obligate its members, on the ground of their express or implied consent to them ; nor is it an objection to a corporator's being bound by a by-law, that he had no notice of it, or that he was not a member of the corporation at the time the by-law was passed." — Angell and Ames on Corporations, 301; Stetson vs. Kempton, et al. 13; Massachusetts Rep., 282. Was this by-law, so far as the rights of Glendenning and the company were concerned to the twenty-five shares of stock, repugnant to any law of the State ? If so, what law or principio of public policy does it violate ? Being the proprietor of the stock, had he not the right to sell it absolutely, and if so, had he not the right to pledge it, or create a lien upon it, by a bona fide contract, without contravening any public law of the State ?
I am now speaking of the validity of the by-law, as between Glendenning and the Company ; for if the by-law is repugnant to the constitution and law's of the State, it does not bind Glendenning, and he might treat it as a nullity, in a contest between himself and the Company; but it was not contended on the argument, this by-law was not binding and valid, as between Glendenning and the Company, and 1 do not doubt its validity —indeed the evidence of his title to the twenty-five shares of stock, recites it to be subject to the payment of all debts due, or to become due, by him to the Company. lie became the purchaser of the stock, on the terms and conditions expressed in the by-law, and no other; and as between him and the Company, it was binding and operative, according to its terms and stipulations. The record in this case discloses the further fact, that on the 31st of March, 1842, William Glendenning became indebted to the Company by note in the sum of $3,500, which was duly noted, and protested for non-payment; and is now, in the language of the by-law, " laying over and dishonored." The indebtedness of Glendenning to the Company is admitted to be a bona fide indebtedness ; but it is contended such indebtedness does not create a lien in favor of the Company under the by-law, so as to justify the defendant in refusing to make a transfer of the stock to the plaintiff in error, who is a purchaser at sheriff's sale under a judgment obtained against Glendenning, subsequent to the date of the dishonor of the note mentioned in the record. Assuming the by-law to be valid, as between Glendenning and the Company, the fact of indebtedness on his part being admitted, could Glendenning himself have transferred the stock, and compelled the defendant, as the officer of the Company, to have made a transfer on their books, without first discharging his indebtedness to the Company ? Certainly not — and Why ? Because the by-law of the Company of which he was a member, declares " No Stockholder, who may be indebted to the institution, as payer or endorser, on any note or notes, laying over and dishonored, shall be permitted to transfer his slock; the Company in that case shall be considered a creditor in possession, and such possession, and such dishonored note, or notes, shall constitute a lien on the stock, which shall be subject to the payment of such note or notes." In the case of Waln's Assignees vs. The Bank of North America, 8 Sergeant and Rawle 89, the court say, — " By-law's bind, because the members of the corporation, either individually, or by those w'ho represent them, arc supposed to give their assent to them. A contract, express or implied, is the lien of the parties, and a law t,o them ; provided it is not repugnant •to the charter, or the laws of the land." We have seen the by-law in question was not repugnant to the charter of the Augusta Insurance and Banking Company; and the following cases are authority to show it is not repugnant to the laws of the land. — Child vs. Hudson's Bay Company, 2 Peere Williams, 207; Waln's Assignees vs. The Bank of North America before cited, 8 Sergeant and Rawle 73; McDowell vs. Bank of Wilmington, 1 Harrington's Rep. 27; Cunningham vs. The Alabama Life Insurance and Trust Company, 4 Alabama Rep. 652. The contract then, as between Glendenning and the Company, as manifested by the law is " the lien of the parties, and a law to íhem." His indebtedness to the Company as disclosed by the record, created a lien upon the twenty-five shares of stock, and the Company is a creditor in possession; the stock being subject to the payment of the dishonored note for $3,500.
far a bona fide purchaser from Glendenning of stock, notice of the lien created by the by-law, would be protected against such lien, it is not now necessary to decide, or how far the insertion of the terms, on which the stock is held by the stockholder, in the certificate of script (the evidence of his title) would go, by way of notice to the purchaser, it is unimportant to discuss at this time.' I have endeavored to establish, both on principle and authority, there was a valid lien created on the stock, in favor of the Company, as against Glendenning, which would prevent him from transferring it without discharging the same. At what time the plaintiff in error obtained his judgment against Glendenning, the record does not inform us, but it is stated to have been obtained subsequent to the dishonor of the note for $3,500. By the common law, the judgment did not create a lien on the stock of Glendenning so as to prevent a transfer of it. By the act of 21st December, 1822, bank stock is made subject to sale under execution, and I concur in the opinion of the presiding judge, in the court below, that the act of 1822 created only a qualified lien on bank stock. The 6th section of the act of 1822 declares, " Any transfer made by the defendant of his bank or other stock, after judgment obtained against him or her, shall be void. Provided notice of the obtainment of such judgment be served bn the cashier .of s.uch principal bank, or any of its branches, or the proper officer of such other corporation within twenty days after said judgment is obtairied." Unless the notice be given within the time prescribed by the act, it would seem the defendant would have the right to transfer his stock, notwithstanding the judgment, and that the lien created by the judgment would not become absolute so as to make the transfer void, without the notice .being given as required by the statute. The plaintiff in error insists his judgment lien is superior to that of the company created by the indebtedness of Glendenning under the by-law, although the lien in favor of the Company was created, and existing, prior to the date of his judgment, under which the sale of the stock to him was made. It is a principle of law applicable to liens of this description, that he who acquires priority in point of time, acquires priority of right.
was to the date of the plaintiff's judgment. But suppose it w'hs not — under the state of facts presented by the record in this case, there being no evidence furnished that the plaintiff ever gave the proper officer of the Company notice of having obtained judgment against Glendenning, one of the stockholders, as required by the (3th section of the Act of 182.2 — would the rendition of the judgment, without the notice, prevent Glendenning from transferring his stock, either absolutely, or creating a valid lien upon it ? The Act of 1822, it will be recollected, is in derogation of a common law right, and must be strictly construed. It also appears from the record in this case, at the time of the sale of the stock by the sheriff, the bank gave public notice of their lien upon the same, by virtue of the by-law ; at which sale the plaintiff became the purchaser, and now contends he is entitled to have the stock transferred to him by defendant, discharged of the lien created by the indebtedness of Glendenning to the Company, through whom he claims title. A purchaser at sheriffs sale purchases such tille only as was in the defendant in execution, and no other. If the property purchased is encumbered by a lien, the purchaser takes it cum oncre ; and he has certainly much less equity in his favor, when he purchases the property, us in this case, with a full knowledge of the lien, now urged by the defendant. In the case of Wains, assignee, vs. The Bank of North America, the court say — " A stockholder who borrows money of a bank, with full knowledge of an usage not to permit a transfer of stock while the holder is indebted to the bank, is bound by such usage, and neither he nor his assignees under a voluntary general assignment, can maintain an action against the bank for refusing to permit his stock to be transferred. The agreement of the stockholders would be equally binding on them, and all who stand in their shoes, as a By-law." In this case there was a By-law, as we have seen, expressly prohibiting the stockholder from transferring his stock, while indebted to the bank, and creating a lien thereon: and the plaintiff being a purchaser at sheriff's sale, with notice of the lien, stands in the shoes of Glendenning — acquired all his rights to the slock, and none other.
It was said in argument, that the stock, standing in the name of Glen-donning on the books of the bank, and published to the world as his stock in the bank reports, and the lien created by the By-law being secret, it was contrary to public policy and a fraud upon creditors ; that it was the policy of our laws to have secret liens made public, as was apparent from our general Registry Acts. Perhaps it would be a sufficient answer to this argument, to say, the Legislature, in their wisdom, thought proper to confer upon the stockholders of the Augusta Insurance and Banking Company the power of qualified legislation ; they have enacted the Bylaw creating the lien ; that lien was not required by either .the common or statute law to be made public ; and our statutes requiring certain liens to be registered, are in derogation of the common law, and cannot be extended to other liens than those enumerated by implication. While, as a legislator, I might be disposed to give my hearty assent to that part of the argument for the plaintiff in error, which so forcibly pointed out the evils to the community by the exercise of the extraordinary powers of legislation by Corporations, in the enactment of By-laws ; yet as a judicial officer, I feel bound, by the highest considerations of public duty, scrupulously to protect the vested rights which have been legitimately acquired under them. Viewing the By-law in question as a contract, binding on the parties who enacted it, I feel bound to protect the lien on the stock created, by it. " A lien may exist under agreement, in favor of the general body of proprietors of a bank upon the stock or shares of individual shareholders ; but this right is generally reserved, by the express terms of the deed of settlement under which the company or partnership is established. Nor will the bankruptcy of the shareholder prevent the operation qf the lien upon his shares; where, under such arrangements, the certificates of his ownership are permitted to remain in his possession.'" — Cross on Law of Lien, 318; Ex parte Plant A Deacon and Chitty, 160. The public interest, in my judgment, will best be promoted by sustaining this By-law of the Company, when we take into consideration the duties and obligations imposed by the charter. By giving the Company a lien on the stock, for debts due by the individual stockholders, it certainly enables them to be the better secured against loss by insolvency, and thereby the better enabled to pay the losses of those who may be insured by them; besides, the bill-holders, who are to be looked upon as favorite creditors, will be better protected than they otherwise would be, if the capital stock of the bank was to be appropriated to the payment of the debts of the individual stockholders, in preference to debts due the Company, which, in. all probability, were created on the footing of'this identical By-law. Suppose the bank unable to redeem its liabilities, (an event which I trust will never happen,) and a bill in equity filed against the Company by the bill-holders for the purpose of subjecting the twenty-five shares of stock standing in the name of Glendenning to the payment of their claims, by virtue of the lien acquired by the Company under this. By-law ; who would have the superior equitable claim to the stock, the bill-holders or the plaintiff in error, claiming as a judgment creditor of an individual stockholder, whose judgment is of younger date than the lien credited in favor of the Company under the By-law ? To the extent this By-law strengthens and protects the institution from loss, to just the same extent does it give the ability to discharge its duties to the public, as required by the charter, and prevent fraudulent stockholders from injuring the Company or the public creditors of the institution. I am therefore of the opinion, the Act incorporating the Augusta Insurance and Banking Company conferred the authority on the stockholders to make the By-law in question, that the same is not repugnant to the charter, nor the laws of the land, nor is it against public policy, or in restraint of trade ; but on the contrary, it' is a valid Bylaw, calculated to promote the interest and objects of the institution, as contemplated by the Legislature. I am also of the opinion, the By-law was binding and operative, as between the stockholders themselves, and the indebtedness of Glendenning, as exhibited by the record in this case, created a valid lien upon his twenty-five shares of stock in favor of the Company. That the lien of the Company created by the indebtedness of Glendenning under the By-law, being prior in point of time to the lien acquired by the plaintiff under his judgment, the Company acquired a priority of right. That the plaintiff, who was a purchaser at sheriffs sale, with notice of the lien of the Company upon the stock, under the By-law, purchased only such title as was in Glendenning to the twenty-five shares of stock, and no other ; consequently, is not entitled to a transfer of the stock at the hands of the defendant, without first discharging the lien created by the indebtedness of Glendenning to the Company, through whom ho derivos his title. Let the judgment of the court below be affirmed.