(after stating the facts). I. The transfer to equity was properly denied. No equitable defense was pleaded in the answer; and, if it be taken that the motion to transfer should be treated as a part of the answer, still the result would be the same, because no equitable defense is therein stated. The execution of the notes is admitted, and it is not averred that the defendants are indebted to the plaintiffs, the amount thereof to be determined by an account to be stated; but it is merely averred that “it is impossible for the defendants to state, owing to the large number of transactions between the parties, the calculations of interest on the various notes,. the various offsets and appropriations of collateral to the various notes, just what amount is now due upon the notes sued upon herein.”
It is a mere invitation to have an accounting in order to ascertain whether or not the defendants have a defense. The jurisdiction of equity to state an account in proper actions is well established; but there is nothing set forth, either in the answer or the motion, but what could be ascertained in a court of law without the necessity for an equitable accounting.
II. The demurrer to the substituted answer and counterclaim was properly sustained. The gravamen of the charge constituting the counterclaim is that the bank neglected to have the assignments and transfers of the stock recorded with the county clerk or transferred upon the books of the building association.
Under section 849 of Kirby’s Digest, providing for the recording with county clerks of transfers of stock, it has been held that this does not apply to transfers for collateral security, but only applies to actual sales. Batesville Tel. Co. v. Meyer-Schmidt Gro. Co., 68 Ark. 115; Scott v. Houpt, 73 Ark. 78.
Section 853 of Kirby’s Digest provides that the stock of every corporation shall be deemed personal property, and be transferred on the books of such corporation in such form as the directors shall prescribe. But where there is a pledge of stock by delivery of the certificates, without notice to the corporation or transfer on its books, the pledge is valid as between the parties. Helliwell on Stocks and Stockholders, § 115. The ■object of such statutes as these, and by-laws made in conformity to them, is primarily for the benefit of the corporation; and transfers, so far as the corporation is concerned, are not valid without complying with the statute and the by-laws, where there is one; but this does not reach to transfers between parties as collateral security. Helliwell on Stock and Stockholders, § •§ 116 and 162:
It follows that the assignment of the Wolf shares to Doeb was good as between Wolf and Doeb without recording, either on the books of the company or in the county clerk’s office; and likewise that the transfer of the shares from Doeb to the bank was good without recording on the books of the count}' clerk or the books of the corporation, as these statutes apply to sales and not to transfers of stock as collateral security. If it were necessary to protect either Doeb or the bank by having the assignment recorded, that duty rested primarily upon Doeb, and he cannot accuse the bank of neglect of duty when he was primarily in default in the performance of this duty, if it is a duty necessary in order to safeguard the collateral.
The only averment in the answer that raises any doubt as to its sufficiency is wherein it is stated that the bank knew that said Helen and Joseph Wolf were insolvent, and allowed and permitted them to sell and dispose of said shares of stock. But, talcing this averment in connection with the other allegations in the answer, the court understands it to mean that the bank, by failing to have the assignments and transfers recorded, thereby enabled the said Helen and Joseph Wolf to sell and dispose of said shares, in which event the bank would not be liable to Toeb, for, as stated, that duty rested primarily upon him. If more was intended to be alleged, it is only done in general terms, which do not specifically state facts relied upon, and amount to no defense.
If it was intended by this averment to charge that the bank turned over to the said Helen and Joseph Wolf the collateral, and by such surrender of it to them permitted them to sell it, thereby destroying it as collateral to L,oeb, a far different question would be presented. This construction cannot be the correct one, however, for later in the answer the charge against the bank is that, but for the negligence of said plaintiff as herein stated, said shares of stock should have been protected, appropriated and applied to the payment of the notes sued upon; whereas, if the construction above indicated were the true one, there would have been a charge of conversion, instead of one of mere negligence in not having the instruments recorded.
The utmost that can be said of the other charges in the answer is that they charge mere delay in enforcing collections of securities; and it is well settled that this is not sufficient to exonerate a surety. Grisard v. Hinson, 50 Ark. 229; Wilkerson v. Crescent Ins. Co., 64 Ark. 80; First Nat. Bank v. Waddell, 74 Ark. 241.
Judgment is affirmed: