Northrop v. Curtis

Hosmer, Ch. J.

The bill of the plaintiff proceeds on the ground, that Hine had an equitable interest, but no legal title; and that, for this reason, the turnpike stock in question was not attachable. The opinion I have formed on the matter before the court, renders it unnecessary to determine, whether a right merely equitable, may, or may not be attached. This question I shall, therefore, waive, and confine my opinion to the sole enquiry, whether, when the above stock was attached, Hine had the legal title.

The objection advanced against the title, is, that the tranfers of the stock were not made on the books of the company. That the stock was duly transferred to Hine, and that he was invested with the legal title, if a deed was made of it in pais, and registered on the books, according to the company’s by-law, and the invariable practice, is denied. Nothing short of an actual assignment, on the books, signed by the proprietor of the stock, it is contended, is sufficient to convey the legal title.

The case of Northrop v. The Newtown and Bridgeport Turnpike Company, 3 Conn. Rep. 544 . settles the point in question. In that case, it was decided, that the registration of a deed of assignment, to commence its legal operation after it is recorded, is virtually the same, as if the assignment were actually made on the books of the company. The decision was, in no sense, obiter, but was direct upon the point in question. It is, now attempted, not on the basis of memoranda, or clear mistake, but of the mere deficiency of recollection in some of the *251 judges, whether the matter in question, was, or was not determined, in the case just cited, to draw the subject again into consideration. The effort is too feebly supported, to shake the solemn report of a case, by an authorized reporter, unless the zeal and feelings of a party are permitted to outweigh the interest of the community. This remark I am induced to make, from no personal objection against the re-examination of the point once determined, but from a deep conviction, that the public are highly interested in a steady adherence to decisions solemnly made; and what is ultimately connected with this observation, in a due regard to the best evidence existing relative to such decisions.

Before I again attempt a construction of the charter and by-law of the company, on which the controversy depends, I will put out of consideration some remarks made in the argument, that the matter in question being simplified, its merits may more distinctly appear. It has been said, that the by-law was made by the directors, the company only having been authorized to do this act; and that it is void, because the company could not thus act by delegation. Waiving the argument on this subject, it is clear, that the facts have been misconceived. The charter prescribes, that “ the shares in said company shall be t ransferrable only on the books of said company, and in such manner as said company shall, by their by-laws, direct." A by-law was made, by the company, in conformity with the charter, that the board of directors should prescribe the form of transfer, to be registered, by the clerk, on the books of the company; and that no assignment should be valid, unless made in the form prescribed by the directors, and registered as aforesaid. by the clerk. This by-law is in strict compliance with the charter, and goes beyond it only, by subjecting the stockholder to the use of a prescribed form. This unnecessary prescription cannot invalidate the by-law in its essential particulars; and if a needless form has been adhered to, in a case, in which no form was legally prescribed, it constitutes no objection.

The assertion, frequently repeated, that the transfers to Hine, were in pais, and not on the books, is, until established by argument, of no avail, and amounts merely to a petitio principii. It, however, has been said, that the by-law intended the transfer to be in pais, and before registration; and that it was to be a valid transfer, afterwards registered on the books. The direct opposite of this is the fact. The by-law declares, that *252 “no transfer or assignment shall be valid,” unless it is registered; thus suspending the validity of the act on the registration.

It has been insisted, that determinations have been made on the subject in question, precisely analogous to the present case; and in support of this position two decisions have been cited. One of them is that of The Union Bank of Georgetown v. Laird, 2 Wheat. 390 . By the rules of the bank, an assignment of stoc k was required to be made on the books. The bank would not permit the assignment thus to be made, the assignor being indebted, and the stock pledged to be bank, by the by-laws, for the debt. There was an assignment in pais, and such assignment was not considered valid; the rules of the bank having required, that the assignment should be made on the books only. The case, then, exclusively determines this principle; that a transfer required to be made on the books, without any thing further to explain or qualify this expression, can be made in no other manner. The diversity between this case and be one in hearing, is too obvious to require illustration.

The only remaining case that was cited, was The Marlborough Manufacturing Company v. Smith, 2 Conn Rep. 579. By the charter of the company, the shares of stock were made, transferrable only, on their books, in such form as the directors should prescribe. A by-law was duly established, which required, “ that all transfers of stock should be made by assignment on the treasurer's book, either in person, or by authorised attorney, on surrender of the certificate granted for the stock, and a new certificate being granted by the treasurer.” No assignment was made on the book; no certificates of ownership were surrendered, or new ones received; and nothing was done, but the giving of a credit of the amount of the share, on the treasurer’s book, to the successive holders. The court was of opinion, that the stock had not been legally transferred. “Though the form of assignment is not pointed out,” said Ch. J. Swift, “yet the by-law, on its fair construction, requires, that there must be a written assignment on the treasurer’s book, subscribed by the assignor, or his authorised attorney, to constitute a transfer of the stock.” I do not see how any other construction could have been given. The requisition, without any addition or qualification, that the transfer should be made on the treasurer’s book, in its literal import, was confirmed, by the expression “ either in person, or by authorized attorney,” which did all but designate the precise mode in which the transfer *253 was to be effected. Besides, perfect silence relative to any act in pais, or registration, evinces a marked discrimination between the above case, and the principal one under discussion. The former case decided, that the transfer was not pursuant to the by-law; but in the case before us, it is to be determined, as the transfer is conformable to the by-law, whether this constitutes a legal assignment.

By the words of the charter, “ the shares in said company shall be transferrable only on the books of the company, and in such manner, as said company shall, by their by-laws, direct.

The former part of the clause, that the transfer shall be “ on the books,” as well from the popular meaning of the language, as from the practical construction, intends, that the assignment literally shall be made and perfected “ on the books ;” and the phrase is susceptible of no other meaning. But if it was the intention of the legislature to limit the company to this mode of transfer, it is difficult to assign a reason for the addition of other words. The phrase was complete, and the signification obvious. Should it be asserted, that the legislature intended to give the company authority to prescribe the form of transfer, by the residue of the expression, I cannot admit the affirmation, it is not the meaning of the expression, that the transfer shall be “ in such form' as the company may direct; at least, the expression, by reducing manner to form, is much abridged. By the word form, is meant the mode, or external appearance, of a thing; but the word manner, though it perhaps includes the form, is much more comprehensive. It is synonimous with method, or peculiar way; and hence he, who is authorized to prescribe the manner, has authority to direct the peculiar way, in which any thing is to be done. To illustrate: If the directors of a bank are invested with the power of prescribing the form, in which the bills of the bank are to be issued; this authorizes them to direct the phraseology of such bills, and how they shall be signed. But if they are clothed with authority to prescribe the manner, although it includes the former, it plainly comprehends much more. When the legislature, after enacting, that the transfer shall be on the hooks of the company, immediately subjoin, in such manner as the company shall direct, it is no stretch of construction, to say, that the mode in which such transfers should be put upon the books, was left to their discretion.

It cannot be denied, that in this, as well as in other cases, the proper construction of a statute, is that, which answers the ob *254 ject of the legislature; for qui haret in litera, haret in cortice. So far as related to the interest or convenience of the company, no limitation would probably be put upon it; but it would he permitted to pursue its own discretion. It undoubtedly was the legislative object, to protect the community in their purchases of stock, by rendering the books reasonable evidence of ownership. This is equally accomplished, whether the books are absolute evidence of title, or strongly presumptive evidence, from the registration of the transfers. If this is admitted, it was no sine qua non, on the part of the legislature, to require, that the transfers should, literaly, be on the books; and that an assignment registered, should be insufficient to convey the title. The community have the same notice, in the case of transfers registered, as they have of deeds of lands recorded; and allowing mankind to transact their business in a manner the most convenient to themselves, reasonable security is given to every person of ordinary vigilance, by the notice, which a, recorded deed, or registered transfer, always communicates.

The supposed inconveniences resulting from a construction, giving validity to the by-law of the company, are two. It is, said, the transfer may be fraudulent, and that two transfers may be exhibited for registry of the same stock, at the same time. Let us admit, then, for the sake of argument, that the transfer must be literally made on the books, by the owner of the stock, or by his attorney. Will this preclude the before-mentioned possibilities? The power of attorney may be fraudulently obtained; and this I setoff against the first possible mischief: and two powers of attorney may he exhibited, at the same time, for the transfer to different persons of the same stock; and this countervails the last. It is impossible, without putting too great restraint on business, to require absolute security from practicable fraud. All that the intercourse of mankind, without being cramped through excessive fear of evil, admits of, is reasonable protection, on reasonable precaution. The construction of laws, under the influence of subtle discrimination, and morbid apprehension, would be productive of innumerable evils. Hence it is, that distant contingencies, or potentia remotissima, are not. numbered among those consequences, by which construction is to be given to a legislative act. It is a maxim, that laws are adapted to those things, which most frequently happen; and so must the construction of them. As long as fact is more convincing than speculation, the mind will he more influenced, by twenty years experience under the by *255 law in question, during which it is not pretended, that any of the fancied inconveniences have happened, than by the most glowing anticipation of evil.

The Newtown and Bridgeport Turnpike Company, soon after the reception of their charter, by their by-law, expressed their sense of its meaning; and the transfers of stock have uniformly been made in the manner prescribed, for nearly twenty years. The court is now called upon, to adopt a principle, which will set the company afloat, and annul every transfer, that has been made during all the aforesaid period. Hundreds, perhaps thousands, of assignments for valuable considerations, supposed to be valid and long confided in, it is requested may be considered as nullities; and a scene of injustice and litigation be opened, to which no bounds can be assigned. To justify a construction, involving such wide-spread mischief, the legal propriety of it should be palpable. If it is doubtful, the usage ought to fix the exposition, as it is a strong proof of the legislative intent. It was cotemporaneous with the charter; many years it has existed, uniformly, and without question; and hence it falls within the antient principle, optimus interpres rerum, usus.

Brainard, J. was of the same opinion. Peters and Bristol, Js. dissented.

New trial not to be granted.