Section 12 of an act entitled “An act to provide for the creation and regulation of incorporated companies,” approved April 12, 1869, which is sections 1337 and 1338 in Sandels & Hill’s Digest, is as follows:
“The president and secretary of every corporation organized under the provisions of this act shall annually make a certificate showing the condition of the affairs of such corporation, as nearly as the same can be ascertained, on the first of January or July next preceding the time of making such certificate, in the following particulars, viz: The amount of capital actually paid in; the cash value of its real estate; the cash value of its personal estate; the cash value of its credits'; the amount of its debts; the name and number of shares of each stockholder; which certificate shall be deposited on or before the 15th day of February or of August with the county clerk of the county in which said corporation transacts its business, who shall record the same at length in a book to be kept by him for that purpose; and whenever any stockholder shall transfer his stock in any such corporation, a certificate of such transfer shall forthwith be deposited with the county clerk aforesaid, who shall note the time of said deposit and record it at full length in a book to be kept by him for that purpose; and no transfer of stock shall be valid as against any creditor of such stockholder until such certificate shall have been deposited.”
Does the transfer of stock mentioned in this section include pledges of stock, or those transactions by which liens upon the same are acquired^ This is the only question necessary for us to decide in this case. Eliminating from the section all except what has reference to the question, it reads as follows: “The president and secretary of every corporation organized under the provisions of this act shall annually make a certificate showing the condition of the affairs of such corporation, as nearly as the same can be ascertained, on the first day of January or July next preceding the time of making such certificate, in the following particulars, viz: * * * the name and number of shares of each stockholder; which certificate shall be deposited on or before the 15th day of February or of August with the county clerk of the county in which said corporation transacts its business;. * * * and whenever any stockholder shall transfer his stock in any such corporation, a certificate of such transfer shall forthwith be deposited with the county clerk aforesaid, who shall note the time of said deposit and record it at full length in a book to be kept by him for that purpose; and no transfer of stock shall be valid as against any creditor of such stockholder until such certificate shall have been deposited.” It is evident that the object of the certificate of the president and secretary as to the name and number of shares of each stockholder and that of the transfer of the stock by the stockholder are the same; and that the latter is intended to carry into effect the intention of the former; and that the object of both is to make known the names of the stockholders and the number of shares owned by each of them. This being true, it is obvious that the transfer of stock referred to was the absolute transfer of the legal and equitable title to stock, and not pledges or liens. This section does not undertake to regulate the creation or protection of liens, and hence does not affect those transactions by which liens are created without the transfer of stock, or any indorsement and delivery of stock which do not transfer, and create only a lien.
Section 12 of the act of April 12, 1869, was construed, in part, by the circuit court of appeals of the Eighth circuit of the United States, and the same question we have under consideration was decided in Masury v. Arkansas National Bank, 93 Fed. Rep. 603. Judge Thayer, speaking for the court, said: “Looking at the two sections (sections 1337 and 1338 in Sandels & Hill’s Digest) in the form in which they were originally enacted, the inference is a reasonable one that the legislature had in mind transfers whereby a shareholder parted with his entire legal and equitable title to the stock transferred, when it declared, in the concluding clause of the section, that whenever a stockholder transferred his stock a certificate of such transfer should be deposited with the county clerk. While the act does not in terms prescribe by whom the certificate of transfer shall be filed, whether by the corporation or by the person receiving a transfer of stock, nor what the certificate shall contain, yet it is fair to presume that the lawmaker intended to say that a person purchasing stock should obtain a certificate from the proper corporate officer to the effect that he had acquired certain shares of stock from a certain person or persons, and cause the same to be deposited with the county clerk as one of his muniments of title. The object of the legislature in requiring the county clerk to receive and record semi-annual reports from the officers of corporations, showing their financial condition and who were the shareholders, and to register transfers of stock made in the meantime in a book kept for that purpose, would seem to have been to provide a convenient record which might be consulted for the purpose of taxation, or for the purpose of ascertaining who had control of a corporation, and were responsible for its management, or who might be proceeded against as shareholders to enforce a stock liability in case a corporation became insolvent. All of these objects will be substantially subserved by holding that the section of the act now in question has reference to absolute sales of stock, and that it does not comprehend transfers which are effected by a simple indorsement and delivery of stock certificates as collateral security, inasmuch as creditors who thus hold stock in pledge which has not been transferred on the books of the corporation are not entitled to vote the stock or take part in the manage-meat of the corporation, and ordinarily cannot be proceeded against as stockholders to enforce a stock liability. National Bank of Commerce v. Allen, 33 C. C. A. 169; Vowell v. Thompson, 3 Cranch, C. C. 438; Brewster v. Hartley, 37 Cal. 15; Cook, Stock & S. § 468, and cases there cited.”
Our conclusion, as already indicated, is that the transfer of stock mentioned in section 12 of the act of April 12, .1869, does not include pledges or transactions by which liens only are acquired.
The judgment of the circuit court is reversed, and this action is dismissed.
Bunn, C. J., and Hughes, J., dissent.