Central National Bank v. Williston

• Decision Date: 20 January 1885
• Citation: Central National Bank v. Williston, 138 Mass. 244 (Mass. 1885)
• Court: Supreme Judicial Court of Massachusetts
• Parties: Central National Bank v. A. L. Williston & others

138 Mass. 244

Central National Bank v. A. L. Williston & others

Supreme Judicial Court of Massachusetts

January 20, 1885

Argued September 18, 1884.

Hampshire.

Bill dismissed.

W. G Bassett, for the plaintiff.

M. F Dickinson, Jr., (J. C. Hammond with him,) for the defendant Williston.

C. Allen & Colburn, JJ., absent. W. Allen, J.

OPINION

W. Allen, J.

An owner of stock, and holder of a certificate thereof in his own name, in a manufacturing corporation existing under the general laws of, and doing business in, this State, delivered the certificate, with a printed assignment in blank, signed by him, indorsed upon it, to the plaintiff bank, for the purpose of transferring the stock to it to hold as security for negotiable paper. While it so held the certificate, and before the assignment had been filled out, and before notice of the assignment had been given to the corporation, the stock was attached, as the property of the assignor, by the defendant Williston, who had no knowledge or notice of the assignment, "although he had good reason to suspect that the owner of the stock had raised money upon it." The certificate contained on its face the words, "Transferable only on the books of the company, in person or by power of attorney, on surrender of this certificate."

This bill in equity is brought by the plaintiff to secure its right in the stock; and the question is whether its title is good against the defendant Williston, as attaching creditor of the assignor. There are two such assignments, the circumstances being alike, except that one was made before the St. of 1881, c. 302, (Pub. Sts. c. 105, § 24,) and the other when that statute was in force, and that the assignor was the treasurer of the corporation when the last one was made. It is assumed that the assignments are sufficient to sustain the right of the plaintiff, unless they are rendered invalid against attaching creditors by the statutes of this State. Boston Music Hall v. Cory, 129 Mass. 435, and cases cited. Sibley v. Quinsigamond National Bank, 133 Mass. 515. The general act relating to manufacturing corporations in force when the first assignment was made was the St. of 1870, c. 224. Section 26 provided that "shares may be transferred by the proprietor, by an instrument in writing under his hand, which shall be recorded by the clerk of the corporation in a book to be kept for the purpose. The purchaser named in such instrument so recorded shall, on producing the same to the treasurer, and delivering to him the former certificate, be entitled to a new certificate." Provisions of the same kind exist in the statutes of other States, and have received different constructions. By some courts they are held to be intended only for the benefit of the corporation, to regulate its relations with its stockholders; by others they are held to be in the nature of registry laws, regulating the transfer of the stock as to third parties. Perhaps the former is the view more generally taken. It is the law of New York, where these assignments were made. Robinson v. New Berne National Bank, 95 N.Y. 637. But the question here is upon the construction of a statute of this State, which is settled by the intention shown by the course and policy of legislation upon the subject, and by the decisions upon this and similar statutes.

The policy of the legislation of this Commonwealth has been to make stock in corporations liable to attachment by the creditors of the owners. The St. of 1804, c. 83, provided in detail for the manner of attaching on mesne process, and taking on execution, shares of debtors in incorporated companies; and its provisions have substantially remained in force since, and appear in the Pub. Sts. c. 161, §§ 71-73, and c. 171, §§ 44-50. The provisions of the Pub. Sts. c. 161, § 73, and c. 171, § 48, requiring the officer of a corporation having charge of its records of assignments of shares to give a certificate of the number of shares owned by a debtor named in a writ of attachment or execution, on demand by an officer having such writ, were in substance there enacted, and have been in force ever since.

In the first general law concerning manufacturing corporations, St. 1808, c. 65, it was provided that shares might be alienated by a deed under seal, acknowledged before a justice of the peace, and recorded by the clerk of the corporation in a book to be kept for the purpose. This provision, with the change from a deed acknowledged to an instrument in writing, made by the St. of 1846, c. 45, remained in force until the St. of 1884, c. 229, and was applied to the many corporations which have been brought by statutes within the general designation of manufacturing corporations. When general laws were enacted concerning railroad and street railway corporations, it was provided that shares might be transferred by an instrument in writing recorded by the treasurer in books kept in his office, and that no conveyance of shares should be valid against any other persons than the grantors and their legal representatives unless so recorded. Sts. 1833, c. 187, § 8; 1864, c. 229, § 10. Pub. Sts. c. 112, § 56, and c. 113, § 13. The probable intention of the Legislature was to put the transfer of stock in railroad corporations on the same footing as that of stock in manufacturing corporations, and to express in the later acts the construction given to the earlier ones.

The same general intention is manifested in the acts relating to transfers of stock as collateral security....