Court Opinion

ID: 3866909
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:00:46.91655+00
Date Added: 2024-06-11T07:41:33.963220
License: Public Domain

This bill charges that "under and pursuant to" the contract1 referred to in the preceding case, the A.  W. Sprague Manufacturing Company became and is indebted to the complainant; that Mary Sprague, Fanny Sprague, William Sprague, and Amasa Sprague, as stockholders in that corporation, are personally liable for such debt; that the Quidnick Company by its charter has a lien on the stock of its members for debts due from them to the company, and hence prays that a lien may be declared in its favor on the stock in the Quidnick Company claimed to belong to the persons named, and that the respondent, Chafee, may be enjoined from selling said stock under a pledge from them.
We have already decided2 that there is no debt due to the complainant from the A.  W. Sprague Manufacturing Company "under and pursuant to" said contract, and therefore the Quidnick Company can have no lien on the stock on that account.
The answer admits that at the time the stock was pledged, and before the contract was made, there was a debt due to the complainant from the A.  W. Sprague Manufacturing Company of $216,410.88, which was subsequently settled and paid by the Quidnick Company's acceptance of $216,400 of the notes of the A. W. Sprague Manufacturing Company, secured by the trust mortgage to Chafee, and $10.88 in cash. The complainant contends that this was taken only as "additional security," without extinguishing *Page 440 
the original debt. We have no doubt, from the facts before us, that the mortgage notes were received and accepted as full payment of the debt then existing. The settlement in cash of the trifling balance of $10.88 indicates this, and a use of the portion of the notes by the Quidnick Company, to pay its own debts, is wholly inconsistent with its claim to hold them only as security.
On neither ground, therefore, has the complainant a lien on the stock, and the bill must be dismissed.
TILLINGHAST, J., concurred.
1 Ante, p. 369.
2 Quidnick Company v. Chafee, ante, pp. 367, 370.