Helm v. Swiggett

12 Ind. 194

• Court: Indiana Supreme Court
• Decided: May 26, 1859
• Status: Published

Opinion

Perkins, J.

. 1 his was a suit against the Fayette County Bank, of which Meredith Helm was president, to recover the value of two shares of stock in said bank, which the bank refused to permit the transfer of to the purchaser. The suit was by the second assignee of the certificate for said shares. One Ross, the first assignor, was made a party defendant, with the bank.

The certificate stated that Ross was the owner of two shares of stock, fully paid out, &c., and that the same were transferable only on the books of the said bank, in person or by attorney, on surrender of the certificate. This provision was in accordance with the charter and by-laws of said bank. See 1 R. S. p. 157.

The complaint alleged the facts of the ownership, the assignments, &c., of the certificate, the demand of the transfer of the slock, the refusal, &c., to the damage of the plaintiff of 250 dollars, and concluded with the prayer for judgment for the 250 dollars, or that the defendant transfer the stock.

No motion was made to strike out either alternative of the prayer of the complaint.

An action for damages lies against a corporation for refusing to permit a transfer of stock. Ang. and Ames on Corp. 327. Perhaps a mandamus will lie. Redf. on Railw. 62.

The two main grounds of defense, taken by the bank, were—

1. That the assignment of the certificate by Ross, the first assignor, to one Banes, the first assignee, was for an illegal consideration.

2. That Banes was a debtor to the bank, and that the bank had a lien upon the stock for his indebtedness.

B. F. Claypool, for the appellants (1). J. S. Meid and S. Heron, for the appellee (2).

The first ground is entirely untenable. It was no concern of the bank whether Moss transferred the certificate for any, and if so, for what, consideration. If the bank had no claim upon the stock of Moss for debts due from him, it was not for her to assume a guardianship over his disposal of it.

If Moss desired to prevent the transfer of the stock, by the attorney authorized in the assignments to make it, he should have taken the proper legal steps to restrain such transfer.

The second ground is equally untenable. Conceding, for the argument of this case, that the bank had a lien upon the stock for the debts of the stockholder to the bank, and might refuse to permit a transfer of his stock till such debts were paid; still, it will not aid the defense, for Banes, the intermediate owner of the certificate, was not a stockholder. Ownership, simply, of a certificate of stock in the bank, did not constitute the owner a stockholder. It' required the transfer of the stock to him upon the books of the bank. Coleman v. Spencer, 5 Blackf. 197.— The New Albany, &c., Co. v. McCormick, 10 Ind. R. 499. See Downer v. The Zanesville Bank, Wright (O.), 477.

Here Moss, the owner of the certificate, assigned it, accompanied by a power of attorney to a person named, to transfer the stock upon the books of the bank, to the holder of the certificate. He delivered the certificate to Banes. Banes then sold, assigned, and delivered the certificate to the plaintiff. The plaintiff called upon the attorney named to transfer the stock; he was ready to make the transfer; the bank refused to permit it, because Banes, who had owned the certificate, was a debtor to the bank. But he was not a stockholder, and the bank had no lien upon the stock for his debts.

No error is assigned touching the amount of damages.

Per Curiam.

The judgment is affirmed with 5 per cent, damages and costs.