Court Opinion

ID: 7938967
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:12:41.781522+00
Date Added: 2024-06-11T16:33:38.743265
License: Public Domain

Hooker, J.
(dissenting). S. S. Walker, a stockholder in the defendant, which is a corporation organized under the State banking law, assigned 30 shares of his stock to secure a note that he gave to the complainant. Subsequently the complainant asked that said stock be transferred to itself upon the books of the defendant, and, being refused, filed the bill in this case to compel it. It appears that, at the time the stock was assigned, Walker was indebted to the defendant upon paper then due, and has so continued since, and defendant asserts a lien upon the stock under the statute.
The recent cases of Michigan Trust Co. v. State Bank of Michigan, 111 Mich. 306, and Citizens’ State Bank of Monroeville v. Kalamazoo Co. Bank, Id. 313, support defendant’s contention. It is said, however, that the defendant should be estopped by the conduct of its cashier *289from setting up a claim against the complainant. This is based upon correspondence between the cashiers of the two banks, whereby it is said to have become the duty of defendant’s cashier to inform the complainant of Walker’s indebtedness, which he did not do. Section 3208a8 of 3 Howell’s Annotated Statutes justifies a bank in refusing to transfer stock during the time that the owner is indebted to the bank upon matured paper, and assignees of the stock take it subject to this right. Furthermore, the act expressly prohibits the transfer of such stock upon the books at such a time toithout the consent of the hoard of directors. It is said that the cashier is the officer of whom a person proposing to buy stock would naturally inquire to ascertain whether or not the bank had a lien upon it, and that the purchaser would have a right to rely upon his statements, and that the bank could not afterwards question them by reason of an estoppel. The statute apparently attempts to secure the bank and its depositors against loss through its'shareholders by providing a lien upon the stock for sums due to the hank from its stockholders. It makes a transfer by a registered stockholder, at a time when he owes an overdue claim, invalid as against the bank, and prohibits a change in the registered ownership except by the consent of the board of directors. If any one can estop the bank, it is the board, not the cashier, whom the law deprives of all power to transfer the stock without consent of the directors, where the effect of the transfer is to cut off a lien. No one would pretend that a statement by a janitor could estop the bank. Could the messenger, collector, bookkeeper, teller, assistant cashier, vice president, or one of the directors, in such a case ? It may be said that they are on a different footing, because they are not the officers who represent the bank in its ordinary business transactions, while a cashier is. It is doubtless a common practice to treat cashiers as the business managers of banks, but the law imposes no such *290duties upon them, nor does it confide any specific power of this character to them. On the contrary,.it expressly prohibits it. The statute (section 3208a3)’ provides that the board of directors shall define his duties, as is the case in the national banking law. And it is not uncommon to find presidents or vice presidents in charge of banks. But, if it be admitted that the cashier has general charge, there is one thing that the law says he cannot do, and that is to deprive the bank of a lien. Every one is bound to know that, and that, if the bank is to be estopped by any one, it is by the directors. To say that the bank may be estopped in such a case as this is to say that, although a bank cashier is expressly deprived of authority to do an act, he has the power to bind the bank if he does the act. Where the act constituting the estoppel is one which the bank has the power to confer upon the officer, but has not expressly done so, a practice by the officer of performing similar acts in the course of the business, to the knowledge of the bank, may create an estoppel. The case of Cochecho Nat. Bank v. Haskell, 51 N. H. 116 (12 Am. Rep. 67), was such a case; the opinion expressly stating that—
“He [the cashier] may, however, have been specially empowered to do the act, or he may have been allowed by the directors to take the general charge and management of the business of the bank, so as to bring such agreement or statement within the scope of his agency. ”
This case has gone to the extreme limit in sustaining an estoppel, but not nearly so far as it is necessary to go in this case to sustain the complainant’s claim. See the case of Merchants’ Bank v. State Bank, 10 Wall. 604. In that case it would seem that the bank might have given the cashier the power, and, if it had not, the court seem to have inferred it from the extensive authority which the bank permitted the cashier to exercise. But it does not go so far as to suggest that an act prohibited by law might become the basis of an estoppel. A strong dissenting opinion was filed in this case.
*291In the case before us it is admitted that the cashier had not the power to transfer the stock, or to compel the board to consent to it, but it is claimed that through a simple lie he may accomplish this. The law seems to exclude the claim that the cashier had legal power to give such consent, if words are adequate to do so; and, if he could not bind the bank by an express agreement to waive its claim, he was certainly not able to do this by silence. Counsel for the defendant cite numerous authorities to the proposition that the power to release the security of banks is not vested in cashiers, on general principles; but, as the statute clearly prohibits it, we need not consider, the question.
The decree should be affirmed.
Grant, J., concurred with Hooker, J.