Court Opinion

ID: 6246490
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:00:54.605589+00
Date Added: 2024-06-11T08:59:18.498895
License: Public Domain

Opinion by
Mr. Justice Mitchell,
The Act of June 24, 1895, P. L. 258, provides that upon a sale of stock in any company incorporated under the laws of this commonwealth “ in satisfaction of any debt for which it is pledged, the purchaser shall have the right to compel a transfer of such stock upon the.corporation books and the delivery of a proper certificate therefor.” Under this provision mandamus would seem prima facie to be an appropriate remedy to enforce a transfer, but as all objections to the form of the action are expressly waived in the present case stated we need not consider the question further.
The Act of April 29, 1874, sec. 7, P. L. 78, after providing for the issue of certificates of stock to the persons entitled to them, transferable in accordance with by-laws etc., prescribed that “ no certificate shall be transferred so long as the holder thereof is indebted to said company, unless the board of direct*110ors shall consent thereto.” Without giving the company an express lien this provision gave what was practically an equivalent in the negative power to refuse a transfer. An express lien could be waived or released and so this potential lien could be waived by consent to transfer, thus substantially producing the same effect.
The Act of J une 24, 1895, P. L. 258, provided for the transfer of certificates of stock at the pleasure of the holder as the by-laws may prescribe, “ subject to all payments due or to become due thereon,” and then contained the provision in regard to purchasers at sales in satisfaction of debt, already quoted. The only repealing clause is the general one of all laws inconsistent therewith, but as the act of 1895 is upon the same subject and in large part in the same words as section 7 of the act of 1874, but gives an absolute right of transfer inconsistent with the necessity of consent by the board of directors, this requirement of the act of 1874 is necessarily repealed.
In the present ease the indebtedness of Schmertz to the company, appellee, arose before the passage of the act of 1895, and before notice and demand by the bank as pledgee. We have the question therefore whether the act took away the company’s lien or gave appellant as purchaser a superior right. This raises first the consideration whether or not that provision of it is retroactive. There is no express provision to that effect nor is any such intent apparent in the language used. It is the ordinary legislative language in the future tense, certificates “shall be transferable,” and the purchaser “ shall have the right to compel a transfer,” etc. The general rule was forcibly stated by Sharswood, J., in Taylor v. Mitchell, 57 Pa. 209. “ There is no canon of construction better settled than this, that a statute shall , always be interpreted so as to operate prospectively and not retrospectively, unless the language is so clear as to preclude all question as to the intention of the legislature.”
The rights of the parties here were fixed before the passage of the act of 1895. Whether those rights were such as affected the obligation of the contract, or concerned the remedy only, which the legislature might constitutionally change, is not material. The present inquiry is not what the legislature might do but what it has done. As already said there is noth*111ing apparent in the act to take it out of the usual rule of construction that it is prospective only. It is therefore not necessary to consider the question so elaborately argued in the court below and here, of its constitutionality.
The claim of the defendant company against Schmertz arose out of an embezzlement by him as its officer. It was held in National Bank of the Republic v. Rochester Tumbler Co., 172 Pa. 614, that the statute includes all kinds of indebtedness, and is not restricted to debt arising out of the subscription or calls on the stock. Though Sclimertz’s defalcation was a tort, yet the claim against him was based on a breach of his contract as an officer, and was liquidated before appellant’s demand for a transfer of the shares. It was therefore clearly an indebtedness within the meaning of the statute. How far an unliquidated claim for damages for a pure tort may come within the act we need not consider.
The fact that the appellee transferred other shares on the request of Schmertz or his assignees, some of them after notice of the pledge to the bank, does not affect appellee’s present rights inasmuch as it is admitted that its claim is greater than the value then or at any time since, of the present shares and those transferred after notice. Such transfers did appellant no harm, since even if they had not been made the appellee’s debt having precedence would leave nothing for appellant. Had the fact been otherwise, and if the appellee with a lien on sufficient shares to satisfy its claim without resort to those now in controversy, had after notice of appellant’s rights, transferred the other shares, a different question would be presented. The notice which is important in this connection is the express notice received from the bank in February, 1893. As Schmertz was acting in his own interest in fraud of the appellee, his knowledge of the pledge to the bank was not constructive notice to the appellee : Gunster v. Scranton Illuminating, Heat and Power Co., 181 Pa. 327.
The appellee allowed more than six years to elapse after the discovery of Schmertz’s defalcation, without proceeding to enforce its claim and by so doing prima facie it barred its right of action. But it did not thereby lose its hold on the shares standing in his name. The lien it had on them was in the nature of collateral security and was without limit as to time. *112It could therefore be enforced although the right of action at law on the debt itself had expired.
Judgment affirmed.