Jones & Dunn v. Latham

STONE, J.

Section 2013 of the Code of 1876 enacts, that “ when, by the charter, articles of association, or by-laws and regulations of an incorporated company, the transfer of the stock is required to be made upon the book or books of such company, no transfer of stock shall be valid, as against bona, fide creditors or subsequent purchasers, without notice, except from the time that such transfer shall have been registered or made upon the book or books of such company.” We have uniformly interpreted the words, ‘bona fide creditors,’ in statutes like this, to mean judgment creditors having a lien. Daniel v. Sorrells, 9 Ala. 436 ; Jordan, v. Mead, 12 Ala. 247; Governor v. Davis, 20 Ala. 366 ; De Vendell v. Hamilton, 27 Ala. 156; Preston da Stetson v. McMillan, 58 Ala. 84. When a sale is made under execution, the lien of which'had attached before notice, actual or constructive, the purchaser, although having notice at the time of the purchase, will acquire a good title. In such case, the creditor’s execution lien comes to the aid of the purchaser’s title, and perfects it. This is the only mode by which the bona fide creditor without notice can realize the benefits of the lien the statute gives him.

The shares in the Mobile and Ohio Railroad Company, the subject of the present contention, were sold on the 15th December, 1879, by the United States marshal, under an execution issued on a judgment of the Circuit Court of the United States. The bill fails to aver when the judgment was rendered, when execution was issued, or when it was received by the marshal. It is also silent on the question of the charter and by-laws of the Mobile and Ohio Railroad Company, regulating the mode of transferring its stock; whether the transfer is required to be made on the books or not. Transfer on the books of the corporation is the usual mode of transferring such stock. The only clause of the bill which bears on the question of notice of the sale of the railroad shares to complainant, is as follows: “Your orator charges . . . that they, [Jones and Dunn], and their assignor, James Crawford, with all to gain and nothing to lose, well knew that Mr. Rushing [defendant in execution] had not owned a single share of the stock, now and then claimed by your orator, for more than two years.” This is an averment tliat Jones, Dunn and Crawford had knowledge, at Some time then past, that Rushing did not own any of the stock of that railroad, and had not owned any of it for more than two years. It is not an averment that their knowledge of that fact had existed for more than two years. *167The language is not very clear, but we suppose the intention was to charge the knowledge at the time of the sale. But, giving it the widest possible scope, it can not be construed as charging knowledge before the levy. This may have been, and probably, nay, certainly, was after the execution had acquired a lien by going into the hands of the marshal. This was too late, to defeat the title acquired by the purchase at the marshal’s sale. It is our duty to construe the bill most strongly against the pleader, and on such a motion as this, to hold that every material fact, not averred, does not exist.—Cockrell v. Gurley, 26 Ala. 405; Lucas v. Oliver, 34 Ala. 631.

The demurrer to the bill ought to have been sustained; but, inasmuch as, by the ruling of the chancellor, the complainant had no occasion to amend his bill, we decline to pass finally upon the question. We reverse, and remand the cause, with instructions to the chancellor to sustain the demurrer and dismiss the bill, unless it be so amended as to give it equity.

Reversed and remanded.