People's Bank v. Mobile Towing & Wrecking Co.

• Decision Date: 07 February 1924
• Docket Number: 1 Div. 250.
• Citation: 99 So. 87,210 Ala. 678
• Court: Alabama Supreme Court
• Parties: PEOPLE'S BANK v. MOBILE TOWING & WRECKING CO.

99 So. 87

210 Ala. 678

PEOPLE'S BANK v. MOBILE TOWING & WRECKING CO.

1 Div. 250.

Supreme Court of Alabama

February 7, 1924

Appeal from Circuit Court, Mobile County; Joel W. Goldsby, Judge.

Bill in equity by the Mobile Towing & Wrecking Company against the People's Bank and Harry T. Hartwell. From the decree the People's Bank appeals. Affirmed.

Stevens McCorvey, McLeod & Goode, of Mobile, for appellant.

Smiths Young, Leigh & Johnston, of Mobile, for appellee.

SOMERVILLE J.

The evidence in this case shows without dispute that the complainant company has a lien on the 45 shares of its capital stock issued to, and standing on its books in the name of, its debtor, Harry T. Hartwell. It shows also without dispute, that the respondent bank has a lien on the same stock for a large indebtedness for which it was pledged by Hartwell. The question at issue between the parties is upon the priority of their respective claims.

Under Code, § 3476, "corporations have a lien on the shares of its stockholders, for any debt or liability incurred to it by a stockholder, before a notice of a transfer or levy on such shares." Under the statute, therefore, complainant's lien was superior to the lien of respondent, notwithstanding the latter's priority in point of time, unless complainant had notice of the pledge before the accrual of its lien. Bank of Florala v. Am. Nat. Bank, etc., 199 Ala. 659, 75 So. 310.

On October 17, 1907, Richard Spencer was authorized, by resolution duly shown by the minutes, "to perform all of the duties of secretary." Spencer testified that his best recollection was that, when the $20,000 note of Hartwell to the bank fell due, he knew the stock was at the bank; and further, "I would state that I knew it when the note matured, or, if the note matured before the stock was issued, then I would say that I knew it when the stock was issued." On cross-examination he testified: "I can recollect that as soon as that stock was issued it was sent to the People's Bank"; and "Hartwell told me that as soon as this stock was issued he wanted it issued that way, that is, in two certificates for 35 shares, in order that he could give it to the People's Bank."

There is nothing in this, however, nor in any of Spencer's testimony, to show the circumstances under which he acquired his information, or under which Hartwell made the statement to him about the issuance of the stock. He testified that he and Hartwell were intimate friends, and that he attended to many of Hartwell's business transactions for him, and was in touch with his personal transactions with various banks; and also that the certificates of stock issued to Hartwell were signed by Walsh, the president, and by Hartwell himself-that they were not signed by him (Spencer), and that he, as acting secretary, did not sign any stock till later on.

Under this testimony it would be straining inferences to conclude that Spencer acquired his information as to the pledging of this stock by Hartwell while in the discharge of his duties as secretary. Rather, the presumption is that he acquired it in and by virtue of his personal relations with, and service of, Hartwell. And, it must be noted, though Spencer was authorized to perform the duties of secretary he was not in fact the secretary, and did not supersede Hartwell, and was not, so far as appears, the keeper of the transfer book, and at that time was not issuing or signing stock certificates if he ever did; hence it cannot be said that the ownership of stock was prima facie within the scope and line of his duty to know and record. Our judgment is that constructive notice of Hartwell's pledge of the stock cannot be fastened on complainant through the knowledge of Spencer. Hall, etc., Co. v. Haley, etc., Co., 174 Ala. 190, 56 So....