Court Opinion

ID: 6227632
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:14:51.045859+00
Date Added: 2024-06-11T08:57:44.054631
License: Public Domain

Coulter, J.,
(after stating the case.) — The eleventh article of the 3d section of the act of 25th March, 1824, which is copied from the act of 1812, is perhaps the most extraordinary and anomalous clause to be found in our statute book. It enacts that *348stock shall be assignable only on the books of the bank, under the inspection of the president or cashier, and that in all cases where a stockholder is indebted to the bank, he shall not be allowed to make a transfer until such debt is discharged, thus investing the control of millions of the property of others in a few individuals: property, too, of that description, which, in a trading and commercial community like ours, is as much, or perhaps more, the subject of mutation and transfer, than any other. Secret liens on any kind of property are abhorrent to our laws, because they check the spirit of enterprise and trade, and entrap the .unwary. Yet this is a secret lien to all intents and prarposes; for who was ever permitted to have an inspection of the books of a bank, except the initiated ? An opportunity of knowing the state of the accounts of individuals is interdicted to the legislature itself, by their own voluntary act or charter. The bank officers are constituted judge, jury, and sheriff, for the pmrpose of enforcing this lien. In all other cases of lien, the property may be sold and transferred without interdict, and the purchaser holds subject to the lien, with the right of contesting it, by showing that it is paid, or rendered invalid by any other means. Not so in cases like the present. The officers of the bank refuse permission to assign, without allowing the purchaser to know the extent, nature, or validity of the alleged lien. Yet this kind of property may be sold by the authority and process of law. The act of 10th June, 1836, authorizes stock owned by any defendant, in any body corporate, to be levied and sold on execution, like other goods and chattels, subject to all lawful claims thereon of that body corporate. We may presume that it was the intent of the legislature that the purchaser at sheriff’s sale should receive a lawful title, subject to lawful liens. In the category of a sale by the owner of the stock, the purchaser would doubtless stand upon as elevated grounds as the purchaser at sheriff’s sale.
But hard and anomalous as the secret lien may be upon the unwary purchaser, even in market overt, upon, change where “ merchants congregate,” or abroad in the country, it exists, and exists by the highest authority, that of the law-making power; and it must be enforced within its prescribed limits. But let it stop there. Here, in this court, it receives the command, thus far shalt thou go and no farther. The corporation, being the creature of the statute, must stop where the statutory provision stops. And where in the statute does it find the power to sequestrate the stoek of one individual to pay the debt of another ? Where does it find authority to take the property of a minor and orphan, and of a church, *349to pay the debt of an individual whom;the|y have permitted to assign and transfer his own stock ? WhéreÁo they find a reason for allowing the assignment to Isap,c B. Esq., by George and John} ijhe individuals indebtedfeund refj|§|g permission to assign and transfer to the congrégatela whp||S|i honestly paid for the stock, by an individual not .pr^iaded”mm|e indebted ? The congregation is, by its character and positifpin society, its ends and purpose, enjoined to eschew lawsuits and strife, and to seek repose, tranquillity, and peac^. It is therefore cruel to compel it to follow justice to this court of last resort, if there’be no valid or substantial reason for so doing. And what is the reason which the defendants have exhibited ? They have shown that George and John were indebted to them, but have Exhibited no shadow of claim against James, and yet they sequestrate his stock! Let us examine a?4nment the pretence upon which this is done. It is alleged that the four brothers were tenants in common of this stock. But what is the language of this will ? Why, that it shall be divided among his four sons with justice, share a,nd share alike. And the bank, after it had been divided, allowed the executor to transfer three-fourths ; that is, the shares of George, John, and William. Can it be doubted for a moment but that the bank knew of the partition ? Would not they naturally inquire into the circumstances, having previously interdicted the transfer altogether ? and can it be doubted but that George M. Woodburn, the executor, and William and John, who were indebted tó the bank, had given such security as was satisfactory, before the executor was allowed to make a transfer of their shares. But the plaiñtiff offered to prove, that in Mayj 1835, the executor, the devisees, and the widow, had made a division, in pursuance of which the stock of William, George, and John was assigned, whilst that of James C., who was then a minor, was retained for him; and this evidence the court rejected, which was a manifest error. The brothers were not partners. Each was entitled to one-fourth, not one-fourth of each share of stock, because it could not be so divided, and the will says it shall be divided; but one-fourth of the forty shares, which could be divided, and, according to the rejected evidence, was divided, and the part of each was ten shares. The shares of stock haye no mark upon them; one share is like another, and ten shares in one lot are like ten shares in another lot. When the bank allowed the transfer of three-fourths of the shares to Isaac B. Parker, Esq., it assented to .the severance, and, as a matter of necessity, was affected with notice that the other fourth was the property of James, who had no deal*350ings with the bank. The will was before the bank, as' appears by its resolutions on the paper-book. The court ought to have permitted the plaintiff to prove that a division was made. The clear intent of the will is, that each son shall get ten shares — so clear that it ought to have put the bank upon inquiry as to the fact of division. But having refused the executor permission to assign, except to Isaac B. Barker, Esq., there was no way of appropriating to each his separate share, save the only mode adopted by the devisees, and which the court would not allow the plaintiff to give in evidence.
The question then occurs, whether the plaintiff was injured by this conduct of the bank ? It seemed to be conceded by the counsel for the bank, that the stock might be transferred aliunde, for value, so as to give an equitable right to the transferree. We suppose on that point there can be no question, although the words of the act are, that the stock shall be transferred on the books of the ianh only. Still, however, it is a great convenience to have the transfer on the books of the institution. In that case, there would be no obstacle set up against the right of the holder to vote, and draw the dividends. And in case of forfeiture of charter, or dissolution, the right to the capital would be palpable and legal, and not liable to cavil. The refusal to allow the transfer, therefore, Was an injury to the plaintiff, unless the oWner of the stock was indebted to the bank; a question which the court withdrew from the jury, and by so doing committed an error.
The counsel for the bank contended that, even admitting the injury to the plaintiff, and that a wrong had been done by the bank, that this suit in its present form could not be sustained: that the action could only be sustained in the name of the legal owner, that is, the executor of the deceased. But what injury has the estate of the dead man sustained, or can it receive, by this refusal ? The stock is given by the will to the legatee, and he must look after it himself, or his transferree. What interest has the executor in it ? It is of no manner of injury to him. He has given a power of attorney to transfer the stock, and has thus fulfilled his duty. The stock is neither assets in his hands, nor his own property. Who then is injured ? who is despoiled of his right ? Why, the plaintiff in this suit. He has shown that he paid full value for the. stock, and that the bank will not allow him to obtain the benefit of it. It has been assimilated to an action brought on a bond for the use of the equitable assignee; but in factt it has no resemblance to it. When a suit is founded on a chose in action, it must be brought in the name of the legal owner, for the use of the equitable owner. *351But that is mere form, for he who holds -the equity is the real party; he is liable for costs, entitled to the money when brought into court; and the legal plaintiff would not be allowed by the court to do any act prejudicial to the equity. I would hesitate long before I would overlook the justice of a case, in pursuit of such a technicality. The suit here is not founded on the. chose, but is instituted for wrongfully preventings the equitable owner obtaining the legal evidence of title. It is an action for'damages on account of a wrong done, and not an- action foundea’-'on the contract between the stockholder and the bank. On that there is no controversy. Has, then, the conduct of the defendant injured the plaintiff with respect to his lawful right ? If it has, the law gives a remedy; and this action can be sustained. Since the days of Lord Bacon, who promulgated the idea, banks, then in their infancy, have been odious to the common mind, and by pursuing'with steadiness the law of their existence and individuality, they exposed themselves to the keen and deep sarcasm of Burke. The present case is a pregnant instance of the facility with which they bring themselves within the condemnation of whatever is magnanimous, just, and manly in our nature.
Judgment reversed, and a venire de novo awarded.