U.S. Supreme Court
Bridgewater Iron Company v. Lissberger, 116 U.S. 8 (1885)
Bridgewater Iron Company v. Lissberger
Argued December 3-4, 1885
Decided December 14, 1885
116 U.S. 8
A transfer for valuable consideration of shares in a Massachusetts manufacturing corporation, not recorded as required by the statute of Massachusetts of 1570, ch. 224, § 26, is valid against a subsequent attachment by a creditor having knowledge or notice of the transfer.
This was an action of tort, brought by a citizen of New York against a manufacturing corporation established under the laws of Massachusetts for refusing to issue to him a certificate of twenty shares of its capital stock.
At the trial, the plaintiff introduced evidence tending to show that the defendant corporation in 1874 accepted a new charter from the Legislature of Massachusetts (Mass.Stat. 1874, ch. 26) which made it subject to the provisions of the General Act of 1870, c. 224; that on August 10, 1877, George B. Stetson, being the owner of these shares, executed to the plaintiff a transfer of them, absolute in form but intended as collateral security for a debt due from him to the plaintiff, and annexed the transfer to his certificate, and delivered both to the plaintiff, and that on December 15, 1878, the plaintiff tendered them to the defendant corporation and duly demanded that the transfer be recorded on its books and a new certificate issued to him.
The defendant corporation introduced competent and uncontroverted evidence that on May 24, 1878, it brought an action against George B. Stetson on a debt due to it from him, and duly attached these shares on mesne process, and afterwards obtained judgment and execution, under which the shares were levied on and sold to the defendant in November, 1878.
To meet this, the plaintiff offered evidence tending to show that before the attachment, an agent of the plaintiff informed a director of the defendant corporation of the transfer to the plaintiff, and that the plaintiff wanted the corporation to know chanroblesvirtualawlibrary
it, and the director mentioned it to Nahum Stetson, the defendant's treasurer, clerk, and business agent.
The defendant took no objection to the admission or sufficiency of this evidence otherwise than by requesting the court to instruct the jury that
"if said evidence was competent to prove a notice to said Nahum or to put him on the inquiry whether said shares had been transferred to the plaintiff, yet no such notice was effectual to deprive the defendant of the right as creditor to attach said shares as the property of said George B. Stetson, under the statutes of the State of Massachusetts."
The court declined so to rule, and instructed the jury
"that if they, upon the evidence, believed that said Nahum, being the treasurer, clerk, and business agent of the company, knew or had notice that said George B. Stetson had conveyed said shares to the plaintiff, prior to said attachment, the plaintiff was entitled to recover."
To this instruction the defendant excepted, and, after verdict and judgment for the plaintiff, tendered a bill of exceptions, which was allowed.