Reese v. Bank of Commerce

Tuck, J., delivered the opinion of this court. It is not denied, on the part of the appellants, that the bank has a lien on stock for the payment of debts of stockholders; but it is insisted, 1st, that the lien in this case was waived by the form of the certificate: and 2nd. that if not ²⁸¹ Waived, the lien does not attach to balances due for overdrafts on checks, nor to notes or bills on which the stockholder may be a party as maker or indorser, not due at the time the transfer may be demanded. The first of these positions must be determined against the appellants upon the authority of Farmers Bank of Md. vs. Iglehart, 6 Gill, 50. That charter provides, that, “all debts actually due to the company by a stockholder offering to transfer, must be discharged before such transfer shali be made.” It was held that the power to withhold the transfer could not be questioned, and that the predicament of Iglehart was precisely that of the stockholder under whom he claimed. “For dealing with a stockholder of the company in reference to his stock, he is held to have taken his equitable assignment subject to the rights of the bank, under the Act of incorporation, of which he was bound to take notice.” The same doctrine had been established in the cases of Union Bank vs. Laird, 2 Wheat., 393.

Brent vs. Bank of Wash., 10 Peters. 616, where the bank charters provided that, “all debts actually due and payable to the bank, (days of grace for payment being passed,”) should be satisfied before the transfer could be made, unless the president and directors should direct to the contrary. As the debts alleged against the stockholders were overdue, no question was made as to the phraseology of the clause under which the transfer was resisted. The charter of the present appellee, provides for the payment, before the transfer, of “all debts, actually due and payable, to the corporation.” The first proposition of the appellants must be- taken as covered by the decisions referred to, because, if the form of the certificates had been deemed as a waiver of the lien, the claims of those banks could not have been enforced. They are substantially the same with the one before us, as far as concerns the present question, and should receive the same interpretation.

The 16th Article looks to an express waiver by the president and directors, and, although in 7 Gill & Johns., 310, Hodges vs. Planters Bank, the court held that the privilege might be waived, there was no intimation that the certificate had ²⁸² such effect, notwithstanding the charter of the bank—Act of 1817, ch. 16—contained a similar provision. We do not concur with the appellants, that this lien cannot be asserted against stock for balances due by the owners for over-checks. As far as the defence may rest on want of notice on the part of the assignee, it can make no difference to him how the indebtedness may have arisen—whether by over-drafts or as maker or endorser of notes, because the same means of information are open to him in either aspect of the transaction. His condition, at the time of the assignment, would be the same.

He is presumed to have taken his equitable assignment, subject to the rights of the bank against the stockholder, of which he is bound to take notice. The certificate furnishes no information what these rights may be; his reliance must be on application at the bank, and if he proceeds in ignorance, it is his own fault. Can it be said that a customer whose checks are honored at the counter, is not indebted to the bank for amounts so overdrawn? It may be done inadvertently, or to save the credit of the drawer, when it becomes a debt of the highest degree, though not entitled to greater respect in the courts.

The charter speaks in general terms of “all debts actually due and payable.” Over-payments on checks are due and payable immediately, and as much within the protection of the charter, as being secured by the stock, as if they originate in any other way. It is true, that a bank officer cannot pay over-checks without committing a breach of duty, for which his official bond may be liable. Minor vs. Mechanics Bank of Alexandria, 1 Peters, 46 ; but that is not the only remedy. In the very case mentioned by (he counsel, Merchants Bank of Balto. vs. The Farmers Bank of Va., not reported, but set out in the case of Boyd vs. McCann, 10 Md. Rep., 124 , the holder of a check, endorsed “good,” by the cashier, when the drawer had no funds to his credit, recovered against the bank on which the check was drawn.

The unauthorized act of the officer was not allowed to prejudice an innocent party. Can it be possible that whilst the bank is liable to pay the check, and has a remedy over against