Opinion
No. 32414.
November 23, 1936. Suggestion of Error Overruled January 4, 1937.
1. STATUTES.
Where newly-enacted statutes are framed in substantially the same words as prior statutes, judicial interpretations of prior statutes become a part of newly-enacted statutes as fully as if expressly written therein.
2. BANKS AND BANKING.
Where bank stockholder sold stock to sister prior to bank failure and subsequent examination showed bank was solvent, seller held not subject to statutory double liability as stockholder notwithstanding there was no transfer on stock book of bank and that statute makes stock book prima facie evidence of ownership, in view of rule of strict construction of double liability statute (Code 1930, secs. 3803, 3815).
APPEAL from chancery court of Yalobusha county. HON. L.A. SMITH, SR., Chancellor.
Kermit R. Cofer, of Water Valley, for appellant.
Stockholders are liable for the par value of their stock, in addition to the stock.
Sections 3802, 3803, 3815, Code of 1930.
Transfers, in order to be good against depositors, must be made on the books of the bank.
Sections 3802, 3803, 4153 and 4177, Code of 1903; 6 Thompson on Corporations (3 Ed.), sections 4153, 4177, 4337, 4343 and 4369; Kriger v. Hanover National Bank, 16 So. 351.
The essentials to a valid transfer of stock are: (1) An assignment and delivery of the certificate to the transferee; (2) A delivery of the stock to the corporation issuing it; (3) A notation upon the books of the corporation of the transfer; (4) A delivery of a new certificate of stock in place of the old.
Kriger v. Hanover National Bank, 16 So. 351; 6 Thompson on Corporations (3 Ed.), sec. 4342.
There was not sufficient effort on the part of the transferor in this case or of anyone else to relieve transferor Person from liability on his shares in the Peoples Bank.
Kriger v. Hanover National Bank, 16 So. 351; 6 Thompson on Corporations (3 Ed.), sec. 4342; R.C.L., Banks, sec. 28; Johnston v. Laflin, 103 U.S. 800, 26 L.Ed. 352; First National Bank of South Bend v. Lanier, 20 L.Ed. 172; Bath Savings Institute v. Sagadahoc National Bank, 89 Me. 500, 36 A. 996; Matteson v. Dent, 176 U.S. 521, 20 S.Ct. 419, 44 L.Ed. 571; Upton v. Tribilock, 91 U.S. 45, 23 L.Ed. 203; Webster v. Upton, 91 U.S. 56, 23 L.Ed. 384; Sanger v. Upton, 91 U.S. 45, 23 L. Ed. 220; Anderson v. Philadelphia Warehouse Co., 111 U.S. 479, 28 L.Ed. 478; Richmonds v. Irons, 121 U.S. 27, 58, 30 L.Ed. 864, 874.
Delivery of the certificate is essential to effect valid transfer of stock.
South Bend National Bank v. Lanier, 20 L.Ed. 172; Johnston v. Laflin, 103 U.S. 800, 26 L.Ed. 352.
Creekmore, Creekmore Capers, of Jackson, for appellee.
Section 3803 of the Code of 1930 contains a provision that the stock book shall be prima facie evidence of the facts therein stated. In other words, there is no provision of the Mississippi law which attempts to fix liability on one as a stockholder in a bank merely because his name appears as such upon the stock record book of such bank.
The book is prima facie evidence only, and the prima facie showing made by the book can be rebutted by evidence showing the ownership of the stock to be in some person other than whose name appears upon the book. Also section 3815, Code of 1930, fixes the liability upon the stockholder, and not upon one simply because his name is on the stock book as a stockholder.
Section 3803 provides that the liability of a stockholder upon the transferring of his stock to another shall not cease until an examination of the bank subsequent to the date of the transfer has been made, and that the examination shows the bank to be solvent. It does not state that the liability of the original stockholder shall continue until the stock is transferred upon the books of the bank.
It has been held that these statutes imposing liability on stockholders must be strictly construed.
Mellot v. Love, 152 Miss. 860, 119 So. 913.
There is nothing in the record to show that the sale to Mrs. Kirkland was not a bona fide sale in good faith for value received. In fact the record affirmatively shows that a valuable consideration was paid by Mrs. Kirkland for the stock, and that the stock and the instrument transferring same were delivered to her, and that thereafter an examination was made that adjudicated the bank to be solvent.
Earl, Receiver, v. Carson, 187 U.S. 42, 47 L.Ed. 373; Whitney v. Butler, 118 U.S. 655, 30 L.Ed. 266.
Even though there is no express request to the proper corporate officers to transfer the stock if the circumstances are such that a request is implied, and the seller has done all that can reasonably be expected to secure a transfer, and the failure of the transfer is the fault of the corporation, the seller will be relieved from the statutory stockholders liability.
Weakley v. McLary, 138 Ky. 835, 125 S.W. 265.
There are numerous cases holding that where stock is sold to an officer of the bank the former stockholder is not liable in event the officer fails to have the transfer made.
Snyder v. Foster, 73 Fed. 136; Bank of Midland v. Harris, 114 Ark. 344, 170 S.W. 67; Keys v. Myhre, 143 Minn. 193, 173 N.W. 422.
Section 4153 of the Code, which was involved in the Kriger case, does not provide, as does section 3803, involved in this case, that the transfer book shall be prima facie evidence of the facts therein stated. If the book itself is only prima facie evidence of ownership the only effect it has is to put upon the transferor or other stockholder, being sued on the basis of the stock ownership as shown by the books, the burden of showing that in truth he is not the owner. This burden was met in the case at bar by uncontradicted testimony.
Appellee gave notice to the corporation that he had in fact transferred his stock and asked that whatever was necessary be done in that regard.
Thompson on Corporations (3 Ed.), sec. 4369.
An appellate court will not permit a litigant to raise a question in that court that was not presented to the lower court for decision.
Griffith Mississippi Chancery Practice, paragraphs 676 and 677; Bank v. Martin, 17 Miss. 621; Enochs v. Bank of Forest, 172 Miss. 47, 157 So. 711.
On the date next to be mentioned, and for some time theretofore, appellee was the actual owner of ten shares of the capital stock of the People's Bank of Water Valley. On March 4, 1932, he sold the stock to his sister, and executed and delivered to her a formal written instrument of sale and transfer, without recourse. There is some obscurity in the record whether the stock certificate was delivered on the day of the transfer, and also upon the point whether the bank was then or thereafter definitely informed of the transfer and requested to enter same upon the stock book. It is certain, however, that no such transfer was ever entered on the books of the bank, and that so far as the stock book was concerned appellee remained the apparent owner of the stock.
Thereafter on June 15, 1932, an examination was made of the bank by the state banking department, and the bank was found and declared to be solvent. On January 1, 1933, the bank failed and went into liquidation. On June 12, 1933, suit was instituted against appellee for the statutory double liability. Section 3815, Code 1930. Under section 3803, Code 1930, the stock book is made prima facie evidence of the ownership of the shares, and appellant argues that the prima facie force of that statute can be overcome only by a formal tender of the stock certificate, duly indorsed, and a formal, definite request upon the proper officer of the bank to enter the transfer on the books.
Many cases from other jurisdictions are cited by appellant to support his stated position. These, however, are of little or no aid to us because of the settled interpretation which has been placed upon our double liability bank stockholders' statute. In Mellott v. Love, 152 Miss. 860, 866, 119 So. 913, 64 A.L.R. 968, it was held by this court that the statute imposing additional liability on bank stockholders must be strictly construed, and that so construed the liability existed only as to actual or real owners, not as to apparent or ostensible owners. The opinion in that case was delivered January 21, 1929. The double liability statute, in substantially the same words, was brought forward and re-enacted in the Code of 1930, so that the interpretation aforesaid became thereby a part of the code section as fully as if expressly written therein.
It follows therefore that inasmuch as appellee was not the actual or real owner on June 15, 1932, when the last bank examination was made, nor on January 1, 1933, when the bank failed, and on both of said dates was only the apparent or ostensible owner, he is not subject to the double liability statute.
Affirmed.