terest."

Georgia Insurance and Trust Company vs. Oliver.

The ultimate and voluntary confession of the company is a virtual and most substantial admission that the payment of these policies was improperly delayed from the beginning. The authority proceeds"If the defendant offers to pay as much as in justice he ought, and the plaintiff refuses to receive it, and brings an action, it would be wrong that the defendant should pay full interest, after being driven to the expense of defending himself against an unjust suit. But in the present case the fault does not seem to lie altogether on either side. The plaintiff insisted on too much, and the defendant offered too little. There was a necessity therefore for a suit. That being the case, and there being no reason to suppose that the defendant had not made use of the money, we think he should be chargeable with interest." How much stronger than this case is the one under consideration? Here the defendants offered to pay nothing; denied for twelve months that there was any liability. The fault is allogether on their side. There was no necessity for a suit. Instead of there being no reason to suppose that the defendants had not used the money, there is every reason to suppose that they did, inasmuch as they resisted, and, we are bound to conclude, in good faith, the payment of any portion thereof, upon the ground that they were not liable.

In Welling vs. Consequa, (Pet. C. C. Rep. 321,) Mr. Justice Washington says, "When an attachment is levied in the hands of a third person, interest is stopped till it is dissolved, because the garnishee, being liable to be called upon at any moment to pay the debt, it is presumed that he had not used it; but when a debtor, who is also a creditor, lays an attachment in his own hands, there is no such necessity existing, and of course no presumption can arise that he had not used the money. If he did use it, it is but just that he should pay interest for it."

Can any presumption, we would ask, arise in favor of a garnishee who has never even answered the summons, and who knows, therefore, that he cannot be called upon to pay the money until the preliminary proceedings are first resorted to, which are in fact definitely postponed by agreement, or suffered to slumber, as we gather from the record, until the suit, at the instance of the principal creditor himself, is tried; against which the garnishee is defending himself, on the merits?

The points involved in this question are elaborately discussed and examined in Adams et al. vs. Cordis, Trustee, &c.-8 Pick. Rep. 260. There as here, counsel for the trustee (corresponding to the garnishee under our law) insisted that interest ought not to be recovered-the fund being locked up by the authority of the law, during the litigation. Chief Justice Parker says, "The first and principal objection to the allowance of interest is, that on the service of the trustee with process, the fund is locked up in the hands of the trustee, so that he is prevented by law from paying the debt, and is not at liberty to make any use of the fund; so that the payment of the interest either to the principal defendant, or the attaching creditor, would be oppressive and unjust. The basis of the argument is undoubtedly sound; and if the fact corresponded with the legal supposition, the conclusion would be unavoidable. But if this locking up of the fund is merely a fiction, the trustee in truth making use of it To the matter is in suspense, to allow him the benefit of the princiadopt the shadow for the substance. To follow up the metaJe trustee's counsel, the service of the writ turns the key upon

all

Tuttle vs. Walton.

the fund, but the trustee keeps the key, unlocks the chest, and takes the money into his own hands. In such case he cannot be allowed to say, "the fund was locked up, and therefore I will pay nothing for it."

Looking at this case, then, on all sides, we are satisfied, that to allow the Insurance and Trust Company to escape from the payment of interest, would be to give a legal pretext to perpetrate a wrong upon an injured

creditor.

The presumption is, that the service of garnishments stays the property in the hands of the garnishee, and the law considers that it remains in statu quo, until ordered to be paid out by the judgment of the court. But here the counsel for the Company distinctly concedes, that the money was not set apart or deposited: for, says he, "They held no money, but were liable upon a contract of guaranty.” In other words, this fund never was carried out, but continued mixed with the rest of their business capital. And if so, both reason and authority are decidedly against them. For, by the charter, whatever doubts might have existed at common law, the policy bears interest from a given date, the same as if a promissory note had been executed for the sum, and the interest becomes the debt as much as the principal after that time, and the Company is bound to pay it, unless the use of the money has been actually, and not fictitiously, hindered by legal process.

Let the judgment of the court below be affirmed with cost.

No. 10.-ISAAC S. TUTTLE, plaintiff in error, vs. ROBERT WALTON, defendant in error.

A by-law which asserts a lien on the stock of members of a corporation, for debts due the Company, is, as between the corporators themselves, valid and binding. A purchaser, under execution at Sheriff's sale, of stock or shares of a corporator, with notice of a lien of the Company upon such stock, under a by-law of the corporation, for the indebtedness of such corporator to the Company, (the lien created by such indebtedness under the by-law, being prior in point of time, to the lien acquired under the judgment,) purchased only such title as was in the corporator, and no other; and, therefore, was not entitled to a transfer of the stock so purchased, under the act of 1822, without first discharging the lien created by the corporator's indebtedness under the by-law.

This was an action on the case, tried in the Superior Court of the county of Richmond, before Judge Gamble, at March Term, 1846; the facts of which are as follows: On the 4th of October, 1840, William Glenden-. ning became the proprietor of twenty-five shares of bank stock of the Augusta Insurance and Banking Company. In the script (the evidence of his ownership) is the following clause: "Which stock is subject to the payment of all debts due, or to become due, from said stockholder to the said Company, either as principal, security, or otherwise, and is transferable only on the books of the Company." The following is one of the by

Tuttle vs. Walton.

laws of the corporation : "No stockholder who may be indebted to the institution, as payer or endorser on any note or notes, laying over and dishonored, shall be permitted to transfer his stock: the Company shall, in that case, be considered a creditor in possession; and such possession, and such dishonored note or notes, shall constitute a lien on the stock, which shall be held subject to the payment of such note or notes."

Glendenning became liable and indebted to the corporation, as endorser of a note for $3,500, dated January 27, 1842, and payable sixty days after the date, which was duly noted and protested for non-payment, and notice thereof given, and which is still lying over in bank dishonored.

Subsequent to the maturity and dishonor of this note, Isaac S. Tuttle (the plaintiff in error) obtained a judgment against Glendenning in the Inferior Court of Richmond county, and in 1843, caused execution, issued under said judgment, to be levied upon the said twenty-five shares of stock, (which were then, and still continued standing upon the books of said company, in the name of said Glendenning,) agreeably to the provisions of the Act of 1822, entitled "An Act to make bank and other stock subject to execution."(a) At the sheriff's sale, on the 6th of June, 1843, when the sheriff was proceeding to sell, the Augusta Insurance and Banking Company gave public notice of their lien upon the stock, by virtue of the by-law and script issued in conformity thereto before mentioned, for the payment of the said note. The sale proceeded, and the plaintiff in error (being the plaintiff in execution) became the purchaser, and made a demand upon the defendant in error (who was, and continued to be, the Secretary and Treasurer of said company, and the officer whose duty it was to make transfers and issue script of stock in said company) for a transfer of the shares so purchased, agreeably to the above-recited Act; which transfer was refused. Upon this refusal, the plaintiff in error brought his action on the case in the court below; to which the defendant in error pleaded, first, the general issue; and secondly, the lien of the company on the shares purchased as aforesaid as herein before set forth; and the notice given at sheriff's sale. The defendant in error confessed judgment, subject to the opinion of the court below, upon his second plea, which was admitted to be true in fact. The plaintiff's counsel subsequently in the Term aforesaid, in the court below, moved for leave to enter judgment upon the said confession; which was refused-the defendant's said second plea sustained, and the confession set aside. To which decision of the court below, the plaintiff's counsel excepted; and for specification of the errors complained of therein, assigns-

1st. That the court decided that the Act, entitled "An Act to make bank and other stock subject to execution," approved 21st December, 1822, created only a qualified lien on bank stock.

2d. That the court decided that a purchaser at sheriff's sale, under the

(a)" An Act to make Bank and other Stock subject to Execution." (Approved December 21, 1822.-Dawson's Comp.)

Sec, 1. "From and after the passing of this Act, the shares or stock owned by any of the banks, or other corporations in this State, shall be subject to be for his deputy under execution."

pers

any sheriff or his deputy shall have placed in his hands any execurson who owns any stock or shares in any of the banks or corpo

MILLEDGEVILLE, MAY TERM, 1846.

Tuttle vs. Walton.

Act of 1822, acquired no better title to bank stock, than a voluntary purchaser, anterior to that Act.

3d. That the court decided, that because the purchaser at sheriff's sale had notice of the encumbrances, liens and conditions under which Glendenning held the stock sold, he therefore must take it, as it was held by Glendenning, subject to all the equities and rules of law to which it was subject in his hands.

4th. That the court decided, there was nothing in the by-law pleaded by defendant, repugnant to the laws or constitution of the State of Georgia.

5th. That the court decided, that said by-law was in conformity with the principles of equity and justice-the laws of trade and public policy. 6th. That the court sustained the validity of said by-law.

JENKINS, for Plaintiff in error.

The question at Bar is reduced to a competition between the lien of the plaintiff's judgment against Glendeming, under which he purchased at sheriff's sale, and the lien of the By-law upon which defendant relies Per se the plaintiff's lien is indisputable. But the conflicting lien is prior in point of time, and if of equal dignity must have the preference. What is the character of this lien? Liens arise either by operation of law, or from contract. This lien is not created by statute; is unknown to the common law.-Angell and Ames on Corporations, 296.

It is founded in no express contract.

It must be supported, if at all, either by raising an implied pledge, by connecting the By-law with the subsequent endorsement and dishonor of the note set forth in defendant's answer, or by giving to the By-law the force and effect of municipal law. The question is substantially the same. If to raise the implied contract, recourse must be had to the By-law as its foundation, and if that be void, then the implied contract must fall with it.

The true light, however, in which to regard By-laws, is to consider them as acts of legislation, authorized by the charter, or assumed under it. The Legislature did, in fact, give to this corporation by charter a limited legislative power-limited first in

rations of this State, it shall be lawful, and he is hereby required, on application of the plaintiff, his agent, or attorney, to endorse on said execution a levy of the number of shares belonging to the defendant, and after advertising the same agreeably to the law regulating sheriffs' sales, shall thereafter proceed to sell the said shares or stock; provided always, that he shall set up one share at a time, and shall sell no more than is sufficient to satisfy the amount of executions then in his hands.”

Sec. 3. "When any constable shall have any execution placed in his hands against any person who is the owner of any shares or stock in any bank or other corporation in this State, it shall be lawful, and he is hereby required, on the application of the plaintiff, his agent or attorney, to endorse a levy on said execution or executions in like manner; and it shall be his duty to make returns of the same to the sheriff of the county in which he lives, which said sheriff shall proceed to sell as pointed out by the second section of this bill."

Sec. 4. "When the sheriff or his deputy shall sell any shares in any bank or other corporation in this State, he shall give a certificate of such sale to the purchaser."

Sec. 5. "The officer of the bank or other corporation, whose duty it may be to make transfers of stock on the books of the bank or other corporation, shall, and he is hereby required to make a transfer of the stock purchased under this act, to the purchaser of the same, upon his, her, or their producing certificate or certificates to the said officer.”

Sec. 6. Any transfer made by the defendant, of his bank or other stock, after judgment obtained against him or her, shall be void: Provided, that notice of the obtainment of such judgment be served on the Cashier of such principal bank, or any of its branches, or the proper officer of such other corporation, within twenty days after said judgment is obtained."

Tuttle vs. Walton.

its objects to the internal affairs of the corporation; second, in its subjects to the members of the corporation; thirdly, to a strict conformity to the constitution and laws of the State, and to public policy. If within these limits it is good, otherwise

void.

The By-law is intended to accomplish two objects:

1st. To prevent a voluntary transfer of shares of the capital stock by an indebted corporator.

2d. To create a lien upon such shares for the payment of the debt owed by such corporator.

To the first point we cite 8 Pickering's Rep. 90.

But the By-law may be good for this purpose, yet bad for the second.

No case can be found directly in point, for or against the second proposition. In support of the first, there are authorities.

But for the purpose of distinguishing the two cases, he cited 6 Pickering, 324; 10 Pickering, 454.

We maintain that this By-law is void:

1st. Because it is repugnant to statutes of the State.

2d. Because it affects the rights, and interest of strangers to the Corporation. 3d. Because it is against public policy.

I. It is repugnant to the Judiciary Act of 1799, Hotchkiss Dig. 597-8. And to the Act of 1322, (ante) which makes " Bank and other stock subject to execution." Hotchkiss 604-5. The Act of 1822 settles conclusively that bank shares are personal property, and the legal estate in him who holds the script.

What constitutes repugnancy?

Lexicographers define repugnant to mean, " contrary to," "inconsistent with." The repugnancy need not be co-extensive with the operation of the Act; may be total, extending to all cases; or partial-limited to a few.

In each case that may arise, the question quoad that case, repugnant vel non. Whenever it occurs the By-law must stand still-the statute must have its course. In the case at Bar regular proceedings were had under the statute, until the plaintiff arrived at the point at which the law directed that the defendant should make him a transfer of the shares purchased. This transfer was refused, and the provisions of the By-law assigned as a reason. Then the statute commands that a particular Act be done, and the By-law prohibits the doing of it. Either this is literally true, or the By-law furnishes no defence in the case.

The mandate of the Statute is clear. The defendant's disobedience is confessed, and the court is called upon to decide that the By-law furnishes a full justification for such disobedience.

Then can it be held that the two are not opposed-not contrary, the one to the other-not inconsistent, the one with the other-that the prohibitory By-law is not repugnant to the mandatory Statute?

Suppose that, subsequent to the act of 1822, the General Assembly had passed a general act in relation to banking and other monied corporations, containing the provisions of this By-law-and that this case had arisen under it. The defence must have been successful. But upon what principle would the court have given precedence to the supposed Statute? Upon this only-" Leges posteriores priores contrarias abrogant." The court would have held that these statutes were both of force, but that where they conflicted, where they were repugnant, they must give effect to the latest expression of legislative will. Such a decision would proceed upon the ground of repugnancy.

Then is not the repugnancy between the Statute and the By-law equally clear? The very question is, shall the Statute or the By-law govern the case? If the former, the plaintiff's redress is certain-if the latter, the defendant's immunity is equally certain.-1 Peters C. C. R 390; 2 Green N. J. Rep. 222.

It may be said there are liens recognized by law, as equivalent to judgment liens. But these are all legal liens, executed or recognized either by statute or common law. There the competition is resolved by comparison of ages. But a lien competing with a judgment lien, must be raised to the platform of law, before the latter can be remitted to the test of time.

The defendant's difficulty is, that the lien he sets up is recognized by no law, comon or statutory. The Legislature might have given the company such a lien by vision of the charter; for they may by law confer a right, incompatible with preng law. They not having chosen to do so, the corporation can make no such