Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/628

 § 606.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. due by him to the bank, includes liabilities not yet matured, and creates a valid lien as against an assignee of the shares, who takes with notice while the shareholder is under a contin- gent liability as indorser, and does not inform the bank of his claim until after the indorsees liability has become fixed. 1 And when a bank has a lien on its shares for all indebtedness of the shareholder, its lien covers not only the indebtedness of the legal holder, but also of a subsequent transferee whose title has not yet been perfected, but who has become the equitable owner. 2 § 605. After a bank, which has, by its charter, a lien on its shares, has applied the proceeds arising from a sale of shares to the satisfaction of a debt due from the holder, it will be postponed until the general creditors of the holder shall have been made equal out of his other estate, the residue of which will thereupon be distributed pro rata? § 606. By issuing a new certificate to a transferee of shares in which certificate is expressly stated that the Waiver of snares are transferable after the liabilities of the holder to the bank are discharged, a bank waives any lien it may have had for the debts of the prior holder. 4 But when a bank has a lien by its charter, it does not waive its lien by using stock certificates (on their face trans- ferable only on the books of the bank) which make no mention of the lien ; for a person purchasing or lending money on the security of the shares is affected with notice of the lien/' AVhen a bank releases its lien for a specified time, and within that time the shares are pledged for a debt, the right of the bank after the expiration of the time to re-acquire its lien is subordinate to the right of the pledgee, until the debt for which the shares were pledged is paid, or the pledge released. 6 1 Leggett v. Bank of Sing Sing, 24 N. Y. 283. Compare Eahn r. Bank of St. Joseph, 70 Mo. 262; Bank of K'y r. Bonnie Bros., 102 Ky. 343; Battey v. Eureka Bank, 02 Kas. 384. 2 Planters', etc., Mut. Ins. Co. v. Selma Savings Bank, 63 Ala. 585. 3 German Security Bank r. Jeffer- son, 10 Hush (Ky.), 326. Compare 608 Petersburg Savings, etc., Co. v. Lums- den, 75 Va. 327. 4 Hill v. Pine K'r Bk., 45 N. II. 300. 6 Bohmer v. City Bank, 77 Va. 445. 6 Bank of Amer. v. McNeil, 10 Bush (Ky. ), 54. When a corporation is affected with notice of a pledge of shares it cannot enforce its lien for a debt to itself subsequently arising.