Court Opinion

ID: 6510485
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:21:54.72539+00
Date Added: 2024-06-11T15:54:51.764883
License: Public Domain

BEIOKELL, C. J.
The principal questions presented by the original bill are-^-first, whether the appellee has a lien on the stock standing on its books in the name of H. A. Stollenwerck & Brothers, for debts due and owing it, from the said firm or its successor, having an equitable title to the stock; second, whether there are found in the case facts and circumstances, which render it inequitable to assert the lien against the appellant.
The by-laws of the bank, passed in the exercise of its corporate powers, regulate the mode of transferring stock, and define the rights and liabilities of transferror and transferree, and the rights of the bank in the event of transfer. The ninth of these by-laws is in these words: “All transfers of stock shall be made in a book kept at the office of the company, in the presence of the president or secretary; and no new certificate of stock shall be issued, until the old is surrendered, except in case of loss.” The fifteenth reads : “Any stockholder, who has paid up his stock note in full, and is not otherwise indebted or liable to the company, may transfer his stock at any time, upon the surrender of his certificate.” The sixteenth reads : “ Stockholders who have not paid up their stock in full, or who may be otherwise indebted to tbe company, shall not transfer their stock on the books of the company, until the person to whom such transfer is proposed to be made, shall give to the company notes, with satisfactory security, to be approved by the president, for the amount due on such stock note, or other liability. When such stock note and security are given, the stock may be transferred, and all evidence of debt or other liability surrendered to the stockholder transferring the stock.”
The point of contention is not that these by-laws, though not in terms so expressed, are not the equivalent of an immediate, clear reservation by the bank of a lien — a right to *593retain and hold for its own indemnity, security and protection, the stock of every shareholder, not only for the payment of the debt which may have been contracted in the acquisition of the stock, but of any other debt, whether it is in the relation of principal or surety, or of indorser, or guarantor, which the bank had the power and the shareholder had the capacity to create. The point of contention is, that the lien, the right of the bank to hold and retain, extends only to the debts or liabilities of the nominal shareholder, and does not embrace new debts, of which these are the consideration, or other debts, contracted by the equitable owners of the stock known by the bank to be such owners. This is reducing the controversy to the analysis most favorable to the appellant, without discussing or considering other questions, which might arise, if the bank was seeking to fix a liability on parties whose names do not appear on the paper it now holds, and as a security for which it claims a lien.
The mode of transferring stock provided by the by-laws, is intended for the protection and security of the bank, or .of third persons who in good faith, on a valuable consideration, may in that mode acquire the stock, without notice of prior equitable transfers, or of outstanding equities. The legal title to the stock cannot pass, unless this mode of transfer is observed. But a complete equitable title may be acquired by a transfer in any form or manner appropriate to pass property of that kind, divesting the stockholder of all right and interest, and entitling the transferree to demand that he be invested'with the legal title. — Duke v. Cahawba Navigation Co., 10 Ala. 82; Black v. Zacharie, 3 How. (U. S.) 483. On the dissolution of the firm of H. A. Stollenwerck & Brothers, who were then the legal and equitable owners of the stock, and in whose name it stood upon the books of the bank, the stock, with all other partnership assets and property, was transferred to the succeeding firm of F. E. Stollenwerck & Brother, or of Stollenwerck Brothers, which assumed, and were bound to pay, all the debts of the dissolved partnership. Thereby, the new firm became the equitable owners of the stock, of which the bank had notice. It may be admitted, that, when the transfer of the stock was made to the appellant, there were no debts of H. A. Stollenwerck & Brothers, remaining in the same form as when that partnership was dissolved; and it may be from all such debts that partnership was discharged by the subsequent transactions between the bank and the succeeding firm. But the succeeding firm, the equitable owners of the stock, were indebted to the bank; and it is as a security for the payment of such debts the bank claims a lien. The lien created by *594tbe "by-laws, for tbe security of the bank, extends not only to stock of which the stockholder may have the legal title, but to all of which he is the real', beneficial owner, though the legal title may reside in another. The lien would not be-available against a bona fide purchaser, who, without notice-of -it, upon a valuable consideration, might acquire the legal title. But, as against the stockholder, and all who merely succeed to his rights and equities, the lien must prevail. Stebbins v. Phœnix Ins. Co., 3 Paige, 350. It is intended as a security to the bank — a security to which, in equity and good conscience* it is entitled, for all debts which may have been contracted on the faith of it. Credit may be, and is doubtless, often extended to the real, beneficial owner, on tbe faitb of tbe stock, and in reliance upon it as a security. We can perceive no good reason, and we are not aware of any authority requiring it, to limit the lien to debts owing tbe bank by tbe bolder of the legal title only, excluding such as may be due from tbe owner of the complete equitable-title. It is not, therefore, a material inquiry, whether the debts due tbe bank are to- be regarded as- in any sense the-debts of H. A. Stollenwerck & Brother, in whom the nominal and legal title to the stock resides, or as the debts- solely and exclusively of tlie succeeding firms, in whom the beneficial ownership resides.
3. The estoppel of the bank to assert, as against tbe appellant, a lien on tbe stock, is supposed to arise4from statements made in a letter, said to have been written by its-cashier, in 1875, addressed either to tbe firm of Stollenwerck & Brother, or to one of its members, F. E. Stollenwerck. The letter is lost, or mislaid, and from- the secondary evidence introduced-, it is difficult, if not impossible, to ascertain its contents with any degree of certainty. It is consistent with the evidence, that the letter contained no more than an- expression of the opinion of the cashier, that the bank bad not, as matter of right, or of law7, a lien on tbe stock of its stockholders, for debts. owing, or liabilities incurred to i-t. If the letter contained no more than this, intentional misrepresentation, to influence the conduct of the appellant, not being imputable, there would be in it no element of estoppel. Townsend v. Cowles, 31 Ala. 428. But, suppose it was the distinct affirmation of the fact, that at the time it was written there w7as no lien or incumbrance in favor of the bank on this particular stock; it was tbe affirmation of a present existing fact only, and not a representation or guaranty that the fact would continue to exist. It was more than twelve months after tbe writing of the letter, before tbe appellant entered into tbe transaction, which it now declares was influenced by *595it. It ■ must have occurred to the officers of appellant that, while it may have been true, when the letter was written, that there was no lien or incumbrance on the stock, the fact was not in its nature continuing — that, in the ordinary transactions of business, it might be a fact on one day, and not weeks, months, or a year thereafter. The appellant had no right to rely on the statements of this letter, as a representation of the rights of the bank months after it was written'.
4-5. Under the statute (Code of 1876, § 3784), a demurrer to a bill in equity must set forth the ground of demurrer specially; otherwise, it cannot be heard. The attention of the court is confined to the particular cause assigned; and though there may be other good and sufficient causes apparent, the demurrer must be sustained only on the cause particularly assigned. The single ground of demurrer assigned to the amended bill, is, that it founds the claim to the relief thereby prayed on facts which occurred after the filing of the original bill. Whether it does not entirely abandon the case made by the original bill, and introduce a new and different case, making really a new bill, is not a matter the demurrer presents. Under our practice, supplemental matter, by which we mean new facts occurring since the filing of the original bill, supporting the right of the complainant to the relief thereby prayed, may be introduced by way of amendment — there is no necessity for resorting to a supplemental bill-. — Buie 48 of Chancery Practice. But, upon facts occurring subsequent to the filing of. the original bill, the complainant cannot obtain relief, no matter how introduced, whether by amended or supplemental bill, if on the original bill relief could not be had. — Hill v. Hill, 10 Ala. 527; Land v. Cowan, 19 Ala. 297; Vaughn v. Vaughn, 30 Ala. 329. The amended bill, admitting the right of the bank to retain and hold the stock as a security for the debts due to it from the beneficial owners, claims to be let in to redeem, holding the bank to account for, and apply collaterals it has, since the filing of the original bill, received, and disposed of in some way. If, upon these facts, the complainant could obtain relief, not being entitled to any on the original bill, and certainly not to relief of this character, the amended bill would be converted into a new original bill, and relief granted upon rights having no existence at the commencement of the suit.
We find no error in the decree of the chancellor, and it is affirmed.