Third Nat. Bank of Buffalo v. Buffalo German Ins. Co.

Citations

• 193 U.S. 581
• 24 S. Ct. 524
• 48 L. Ed. 801
• 1904 U.S. LEXIS 899

Syllabus

<p>The mere statement by a borrower from a national bank, made to the president when the loan is obtained, that his stock in the bank is security for the loan, there being no delivery of the certificates, does not amount to a pledge of the stock, nor does it give the bank any lien thereon as against one subsequently loaning on the stock in good faith and receiving the certificates as collateral.</p> <p>The prov: ons of section 36 of the National Banking Act of 1863, empowering the withholding of transfer of the stock of a shareholder indebted to the bank, were not only omitted from the National Banking Act of 1864 but were expressly repealed thereby.</p> <p>A provision in the charter and by-laws, and a condition in a certificate of stock, of a national bank, forbidding the transfer - of stock where the stockholder is indebted to the bank, is void as repugnant to the National Banking Act and in conflict with the public policy embodied in that act, and creates no lien which the bank can enforce by refusing to transfer the stock to a holder for value in good faith.</p> <p>A condition in a certificate of stock of a national bank which is void under the National Banking Act will not operate as a notice to one loaning on the stock as collateral, that it is subject to a lien of the bank which, will affect the right of the pledgee of having the stock transferred.to him.</p>