BRIDGEWATER IRON COMPANY
v.
LISSBERGER
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The Supreme Court held that an unrecorded transfer of shares in a Massachusetts manufacturing corporation is valid against a subsequent creditor's attachment when the creditor has actual knowledge or notice of the transfer, even though Massachusetts law required share transfers to be recorded. The Court reasoned that recording statutes are intended to protect only those without notice or knowledge, drawing an analogy to Massachusetts's registry acts for real property, which similarly did not invalidate unrecorded transfers as against parties with actual notice.
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Mr. Justice Gray delivered the opinion of the court. After stating the facts in the language reported above, he continued :
The principal question argued by counsel, and the only one . presented by the bill of exceptions for decision, is whether a transfer for valuable consideration of shares in a Massachusetts manufacturing corporation, not recorded as required by the statute of Massachusetts of 1870, ch. 221, § 26, is valid against a subsequent attachment by a creditor having knowledge or notice of the transfer. That statute provides that “ shares may be transferred by the proprietor, by an instrument in writing under his hand, which shall be recorded by the clerk of the corporation in a book to be kept for that purpose; ” and “ the purchaser named in such instrument so recorded shall, on producing the same to the treasurer, and delivering to him the former certificate, be entitled to a new certificate.” These provisions were re-enacted in the Public Statutes of Massachusetts of 1882, eh. 106, § 30, and similar provisions had existed since 1809. Mass. Stats. 1808, ch. 65, § 4; 1829, oh.'53, '§ 4; Rev. Stats. 1836, ch. 38, § 12; Stat. 1846, ch. 45, § 1; Gen. Stats. I860-, ch. 60, § 13.
By a series of decisions of the Supreme Judicial Court of Massachusetts, on which the plaintiff in error relies, it has been held that these provisions, taken in connection with the contemporaneous statutes of that jState, authorizing and facilitat- • ing the attachment of such shares by creditors of the owner, are not to'be construed as intended merely for the convenience and benefit of the corporation, atid the regulation of its relations to its stockholders; but are to be considered as in the nature of a registry act, regulating the transfer of the stock as to third persons, and therefore preventing an unrecorded transfer from taking effect against a creditor afterwards attaching the shares without notice of the transfer. Fisher v. Essex Bank, 5 Gray, 373; Blanchard v. Dedham Gaslight Co., 12 Gray, 213 ; Sibley v. Quinsigamond Bank, 133 Mass. 515, 521; Central National Bank v. Williston, 138 Mass. 244.
But the learned counsel for the plaintiff in error fails to show that an unrecorded transfer of shares has ever been held invalid as against a subsequent attachment by a creditor who has notice or knowledge of the transfer. The language and the reasoning of the opinions in the very cases that he cites clearly imply the contrary. And under the early Massachusetts registry act of 1783, ch. 37, § 4, which provided that no unrecorded deed of lands should “ be good and effectual in law to hold such lands against any other person or persons but the grantor or grantors and their heirs only,” it was always held that, the intent of the statute - being to give notice to subsequent purchasers and attaching creditors, a deed was valid, without record, against those who had notice or knowledge of it. Farnsworth v. Childs, 4 Mass. 637; Priest v. Rice, 1 Pick. 164.
Judgment affirmed.