Court Opinion

ID: 6313532
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:19:26.232271+00
Date Added: 2024-06-11T08:59:09.842644
License: Public Domain

Yeates J.
The reserved point in this case is, whether according .to the true construction of the act of congress, in-titled “ an act to incorporate the subscribers to the bank of “ the United States j” passed on the 25th of February 1791, the depositions of the witnesses containing their answers to the interrogatories proposed under the commissions, ought to have been received in evidence upon the trial of this cause.
It cannot be denied, that a mere chose in action equitably *400assigned, is not subject to the operation of a foreign attachment instituted against the party, whose name must necessarily be used at law for the recovery of the demand; and that an attaching creditor can stand on no better footing than his debtor. This abundantly appears from the English authorities, and the adjudications in our sister states’ courts, cited on the argument. A strong instance of this kind occurred in this court in January term 1793. John Caldwell brought a foreign attachment against Vance., Caldwell and Vance, and laid it on effects supposed to have been in the hands of Andrew and James Caldwell, who at one time were considerably indebted to them. Upon the plea of nulla bona, it appeared that a letter had been written authorizing Hugh Moore to receive this debt, and apply it towards payment of a debt due to Moore and Johnston; and the jury under the direction of the court, being satisfied that it amounted to an equitable appropriation of the demand, found that the garnishees had no effects in their hands due to Vance, Caldwell and Vance. This court sanctioned the verdict by their judgment. In like manner a bond made assignable in its first creation, which requires by our act of assembly the ceremony of a seal and two witnesses to authorize the assignee to maintain a suit in his own name, if transferred bona fide, without seal or witnesses, is not liable to be attached for the debt of the obligee resident in a foreign country. This appears perfectly plain.
Is there then any solid distinction between the instances I have put, and the case of shares of bank stock of the, bank of the United States? If there is, it must rest on the provisions of the act of congress incorporating that bank. From the terms of the act itself we are enabled to extract its true spirit and policy. It contains no negative words similar to the British statute of 8 & 9 William 3. c. 30. s. 34, respecting the enlarging of the. capital stock of the bank of England, that transfers not entered within a certain period in the books of the bank, shall be utterly null and void. It merely declares, that the stock shall be assignable, according to the by-laws of the institution, but leaves the general principles of law and equity applicable to sales, as it found them. The. by-laws of the corporation would necessarily provide for the *401security of the stockholders, and the internal government of their concerns. Citizens only could be directors of the body corporate; residents only could vote in the affairs of the company; but aliens could be stockholders, and if residents, were in titled to vote without restriction.
The depositions were offered in evidence, to prove, that Bird, Savage, and Bird had, in the usual course of business in the London market, fairly sold certain shares of this bank stock to the several claimants, received the full considerations stipulated to be paid therefor, and had delivered over the original certificates with powers of attorney to transfer the shares to the claimants respectively. A considerable period of time must necessarily arise between the sales and formal transfers, where the contract is made beyond seas. Whether the claimants have been guilty of culpable negligence, in not procuring the powers to be executed in a reasonable time, forms another subject of inquiry, referable to the operation of the testimony, when all the circumstances of the particular cases are disclosed. In what relation then, previous to a formal transfer, did the original contracting parties stand towards each other? As between them, it is conceded, there subsisted a certain degree of equity, and why not a trust? Bird, Savage, and Bird ceased to have a beneficial interest in the shares of bank stock, which they had sold for a full price. It is true, on the face of the bank books they were the nominal stockholders, and a payment of the semi-annual dividends to them would have justified the directors of the bank. But had the power to transfer been revoked by the death of the attorney before its execution, or had it been consumed by fire, a court of equity would certainly have decreed a specific execution of the contract. I see no reason for distinguishing such a case from a sale of lands to be conveyed under a letter of attorney, where the attorney cannot exercise his functions, or the instrument has been destroyed by casualty. I therefore view Bird, Savage, and Bird, for the purposes of the present argument, as mere trustees for the claimants, against whom a chancellor would inforce a specific execution of their contract, if his con-, science was satisfied from the evidence, that the transactions were fair and correct; and thinking as I do, that the United *402States can have no claim on bank stock, which their debtors 'had sold bona fide, previously to the laying of this attachment, I am of opinion, that the depositions were properly admitted as evidence to the jury on the trial.
Brackenridge J.
Under this incorporation, only a subscriber, successor or assignee, can be a stockholder; and stockholders usually residing within the United States may vote; and a stockholder being a citizen of the United States shall be eligible as a director. For the purpose of ascertaining these rights, in the case of successor or assignee, some entry on the books of the corporation must be necessary. In the case of an original stockholder the subscription is evidence. I take this to be the extent of the regulation with regard to the notoriety of transfer. What should be evidence of an equitable transfer, or whether there could be an equitable transfer, is what I incline to think the corporation had no power to say. It could be the subject only of legislative exclusion; and if not excluded by the act of incorporation, the courts of law alone can be competent to determine. This on the general principle of the common lan^ as to what shall constitute an equitable interest in this as in any other species of property.
If an equitable interest is excluded, and the property only vests from the transfer on the books, so that the payment of the consideration and the delivering the certificate, are nothing without completing the evidence of purchase, it would so impede the transfer of stock, that we cannot suppose the corporation, admitting it to have the power, did contemplate such extent in this by-law. Nor unless we take it that the United States had it in view to discourage the stockholding by foreigners, to a greater extent than is expressed, can we suppose that they contemplated any mischief in the transfer at a distance. I must therefore be of opinion, that an interest could pass prior to the entry of a transfer on the books of the company. X go no farther at present, as it would be running into the second point of the case yet to be discussed, whether by delay in having the transfer entered on the books in a reasonable time, that equity is lost, which by the payment of the consideration, and the delivery of the *403certificate, did at first exist. Had the certificate been retained by the original holders by the negligence of the dutchess of Cumberland, even though she had paid the consideration, and having that evidence still in their possession, they had transferred formally to a bona Jtde subsequent purchaser, it might form another case. She might be considered as in contemplation of law, a party to the fraud, and cut out. But an attaching creditor, even in the case of a certificate detained, the consideration being paid, is not in the situation of a purchaser. Although a debt may be due to him, it was not a credit given and a debt arising on this specific fund as in the case of a purchase. It is in the light'of an execution, but not equally to be favoured (if a distinction could be drawn in carrying it into effect) with an execution. For that (the execution) supposes a judgment, which is of a higher nature than a mere debt of contract. But I take it that even a levy under an execution on stock in the hands of a trustee for another, could not take away the right of the cestui que use. It must be sold subject to his equity. If, therefore, thé point is supportable of an equity independent of a transfer on the books, the stock attached must be subject to that equity.
The court being, thus in favour of the claimants on the reserved point, judgment was entered for the dutchess of Cumberland. Afterwards the motion for a new trial by Cap-per and Tucker, was argued upon the evidence, and the court being of opinion that the matter required another examination, awarded a. new trial as to them. Judgment was entered for the United States as to the eight shares' unclaimed.