Court Opinion

ID: 6664520
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:05:08.334302+00
Date Added: 2024-06-11T16:00:17.865790
License: Public Domain

Martin, J.,
delivered the opinion of this court.
It appears in this case, that Absalom, Ridgely, by his will, executed on the 14th February, 1816, and admitted to probate on the 24th August, 1818, bequeathed to Ann Ridgely, his wife, for life, the dividends which should accrue on one hundred shares of stock, standing in his name on the books of the Farmers Bank of Maryland; and subject to this bequest, and other bequests, in relation to different portions of his property, he devised the residue of his estate to be equally divided among his eight children.
It is also shown by the record, that David Ridgely, one of the children of the testator, as well as one of his executors, by an assignment of the 20th July, 1829, transferred his interest in the shares of stock, devised to him by his father, to the appellee for a valuable consideration, and stipulated to perform any act that might be necessary for the transfer of the stock, when it vested in him in possession by the death of the tenant for life.
Mrs. Ann Ridgely, the tenant for life, having died in April, 1845, an application was made at the bank for a transfer of this stock to the appellee, as the assignee of David Ridgely, and the bank having refused to accede to this application, claiming under their charter a lien on the stock for debts due *56to them by Ridgely, and subsisting prior to the assignment to Iglehart.
This bill was filed on the 10th May, 1845, to coerce from the apellants a transfer of the twelve and a half shares of their stock, to which D. Ridgely was entitled as legatee, under the will of his father.
It being perfectly apparent from the pleadings and admissions in the case, and conceded by the counsel for the appellee, that in 1845, the period at which a demand was made upon the bank for a transfer of this stock, the title to it had become absolutely vested in Ridgely, by the assent of the executors to the legacy, and the termination of the particular estate. The principal question presented for our consideration, is, whether the appellants were authorized by the provisions of the charter incorporating the bank, to assert a lien upon the stock of their delinquent stockholder, in opposition to the equitable interest acquired by the appellee, under the assignment of the 20th July, 1829.
By the 20th section of the Act of Assembly, incorporating the Farmers Bank of Maryland, 1804, ch. 61, it is provided:
“ That the stock of the Farmers Bank of Maryland, may be transferred by the holder, in person or by power of attorney, at said bank, or at the Branch Bank at Easton, but all debts actually due to the company by a stockholder offering to transfer," must be discharged before such transfer shall be made.”
The power conferred upon the bank by this clause of the charter, to withhold a transfer of stock, until the proprietor and holder of the stock has satisfied all claims actually due to the company, is too clear to be questioned, and, in this respect, the predicament of the appellee is precisely that of David Ridgely, under whom he claims as legatee. For dealing with a stockholder of the company in reference to his stock, he is held to have taken his equitable assignment subject to the rights of the bank, under the act of incorporation, of which he was bound to take notice. Union Bank vs. Laud, 2 Wheat. 393. Brent vs. Bank of Washington, 10 Pet. 616.
*57We think, therefore, in this aspect of the question, the bank committed no default, in refusing the transfer of the stock, as required by the appellee.
This is not the case of a bank refusing to permit an executor, who had not assented to a legacy, to transfer stock, for the purpose of executing the provisions of the will, as in Franklin vs. The Bank of England, 1 Rus. Ch. Rep. 574. But a case in which the legal title to the stock, which otherwise would have been in the executor, had become extinguished by his consent to the legacy, and had vested in the legatee; and where the appellee, who demanded from the bank a transfer of the stock in question, claimed as the assignee, not of the executor, but of David Ridgely, as legatee.
It was conceded that in 1845, when the bank, upon the demand of the appellee to direct tins stock to be transferred, asserted its lien, the debts due to the company by Ridgely, were barred by the statute of limitations, and that the plea of the statute would have been a complete answer to any action that might have been instituted for their recovery in a court, of law. And the counsel for the appellee has contended, that as Ibe debts due to the bank were extinguished by the operation of the statute of limitations, the lien was necessarily lost and destroyed. If the proposition asserted by the counsel, that, the debt is extinguished, be true, it would follow as a necessary consequence that the lien would be lost; for there would be no existing claim to which the lien could be attached. But this is not the rule. It is an established principle, that the statute of limitations operates only to bar the remedy, and does not extinguish the right or cause of action.
This is the language of the Court of Appeals, in Oliver vs. Gray, 1 II. & G. 216, where they say:—According to all the cases the debt is considered as not extinguished. The statute of limitations is regarded as operating upon the remedy only, and not as extinguishing the debt.
In Brent vs. The Bank of Washington, 10 Pet. 596, suits had been instituted by the Bank for the recovery of the notes, in reference to which the lien of the defendants in error was *58asserted and maintained, and a verdict rendered for the defendants exclusively on the plea of the statute of limitations. One question propounded for the consideration of the court was, whether these claims were not extinguished, and the lien in consequence destroyed. On this question the court says: After referring to the rule announced in the United States vs. Donnelly, 8 Pet. 361, we cannot take this case out of this established rule; the legal remedy is barred, but the debt remains as an unextinguished right; and the Bank, when called into a court of equity, may hold to any equitable lien or other means in their hands till it is discharged.
In Spears vs. Heartly, 3 Esp. P. 81, a case recognized in 1831, in Higgins vs. Scott, 2 Bar. & Adolp. 413, Ld. Eldon, when examining this subject says: “ If what has been stated by the defendant’s counsel be law, that the debt is discharged by the operation of the statute of limitations, no lien could be obtained by reason of it; but the debt was not discharged, it was the remedy only; I am of opinion that though the statute of limitations has run against the demand, if the creditor obtains possession of goods on which he has a lien for a general balance, he may hold them for that demand by virtue of the lien.” The same doctrine is maintained in Higgins vs. Scott, 2 Bar. & Adolp. 413, and must be considered as too firmly settled for dispute.
It follows from the views thus expressed, that we regard the decree of the Chancellor as erroneous; and a decree will be signed, reversing his decree, and dismissing the complainants’ bill.
DECREE REVERSED AND BILL DISMISSED.