Bank of Holly Springs v. Pinson

Citations

• 58 Miss. 421

Syllabus

<p>1. Bank. Lien on stock far debt of holder. Transfer of stock. Innocent purchaser.</p> <p>The third section of the charter of the Bank of Holly Springs provided for a directory and a president, and they were empowered to make 1 ‘ all needful rules and by-laws for the management of the business of said company, and the mode and manner of transferring its stock.” Under this provision the corporation enacted a by-law that “ the stock of the company shall be assignable only on the books of the company, and no transfer of stock shall be made by any stockholder who shall be indebted to the company; and'certificates of stock shall contain upon them notice of this provision.” Certificates of stock in the corporation were issued to C., duly authenticated, and reciting the number of shares to which he was entitled, their nominal value, and that they were “ transferable at the office, in person or by attorney.” 0. borrowed money from P. upon these certificates as collateral security, and assigned them to her by indorsement on each as follows: “ Por value received, I •assign this certificate of stock to P., and authorize her as my attorney to demand and have transfer of the same made to her on the books of the company.” When P. presented the certificates and demanded a transfer thereof on the books of the company it was refused, and she brought an action to recover damages for such refusal. The bank defended on the ground that 0. was indebted to it in an amount exceeding the value of his stock, and that, under the by-law above quoted, it had a lien upon his stock for his indebtedness, and that he could not transfer his stock. At the time of the assignment P. had no actual notice of the lien claimed by the bank on O.’s stock. Held, that P. did not have constructive notice by the charter that there would be any by-law preventing a stockholder indebted to the bank from disposing of his stock, but only that there would be some regulation of the mode and manner of the transfer, an