First Nat. Bank v. Huntsville Bank & Trust Co.

• Decision Date: 19 March 1925
• Docket Number: 8 Div. 686
• Citation: 104 So. 760,213 Ala. 236
• Court: Alabama Supreme Court
• Parties: FIRST NAT. BANK OF CHATTANOOGA, TENN., v. HUNTSVILLE BANK & TRUST CO.

104 So. 760

213 Ala. 236

FIRST NAT. BANK OF CHATTANOOGA, TENN., v. HUNTSVILLE BANK & TRUST CO.

8 Div. 686

Supreme Court of Alabama

March 19, 1925

Rehearing Denied May 28, 1925

Appeal from Circuit Court, Madison County; James E. Horton, Jr. Judge.

Bill in equity by the Huntsville Bank & Trust Company against William R. Hutton and the First National Bank of Chattanooga, Tenn to establish and enforce a lien on corporate stock. From a decree for complainant, respondent First National Bank appeals. Reversed and rendered.

David A. Grayson, of Huntsville, and Williams & Frierson, of Chattanooga, Tenn., for appellant.

R.E Smith and Cooper & Cooper, all of Huntsville, for appellee.

ANDERSON C.J.

The bill was filed by the appellee, the Huntsville Bank, to enforce a lien on certain stock held by Hutton in said corporation for a debt due it by said Hutton, against the appellant, the Chattanooga Bank, which held the stock under a pledge or transfer as security for a loan made to Hutton; the said Hutton being at the time indebted to the Huntsville Bank.

There is no question as to the Huntsville Bank having a lien under section 7000 of the Code of 1923 on the shares of stock held by Hutton for any debt due from him to said bank, whether the debt was for the purchase of the stock or otherwise. Birmingham Trust Co. v. East Lake Land Co., 101 Ala 304, 13 So. 72; Mutual Ins. Co. v. Cullom, 49 Ala. 562. It is therefore incumbent upon one who purchases said stock to ascertain if the same is subject to the lien in order to acquire a good title thereto. Mobile Towing Co. v. First National Bank, 201 Ala. 419, 78 So. 797. This lien, however, can be waived by the corporation either expressly or by such act and conduct from which the law would imply a waiver.

The appellant contends that the Huntsville Bank waived its lien because of the fact that during the negotiation with Hutton and before the loan was consummated, it forwarded to the appellant said stock duly transferred to it, and failed to inform it that Hutton was indebted to said Huntsville Bank, or that it had a lien on said stock. This would, of course, amount to a waiver in the nature of an estoppel if the action or conduct in this respect was by an agent whose action was binding upon the corporation. The appellee contends, however, that it was not bound by this, for the reason that, while Hutton was its cashier, the transaction was one in which he was personally interested, and it had no independent notice that the stock was being so disposed of to the appellant. Therefore the pivotal question is: Was the knowledge or notice of Hutton imputable to the Huntsville Bank, he being interested in the transaction? The agreed statement of facts shows that Hutton was the only officer or...