#### Fullerton *v.*Mobley.

A certificate of stock was deposited as a pledge for the payment of a judgment note, with an agreement that, if the note was not paid, there should be a transfer of the certificate of stock to the creditor “to be his own property and in payment of the note.” *Held,*that the non-payment of the note at maturity and the receipt of monthly dividends on the stock certificate thereafter by the creditor did not effect such a transfer of the certificate as to cancel the note.

Oct. 9, 1888.

Error, No. 136, Oct. T., 1888, to C. P. Armstrong Co., to review a judgment on a verdict in a feigned issue to try the validity of a confessed judgment by D. W. Fullerton et al. against W. C. Mobley et al., executors of F. Parker, deceased, at June T., 1885, No. 93.

On March 29, 1882, H. R. Fullerton, and his son, D.W. Fullerton, gave F. Parker a judgment note, payable five months after date. Judgment was entered on this note March 14, 1885, by the executors of the obligee, for $3,045, including $145 attorney’s commissions, interest from March 29, 1882, etc. On April 4, 1885, a rule was granted to show cause why judgment should not be marked satisfied, which was subsequently discharged. On March 28, 1887, a ruR to show cause why the judgment should not be opened was granted, which was subsequently made absolute, and an issue framed to determine whether the note had been paid according to the terms of the agreement recited in the charge of the court below, and, if not fully paid, whether, under said agreement any part of said note had been paid, and, if so, how much.

The evidence was to the following effect, on the trial before Neale, P. J.:

F. Parker was president and H. R. Fullerton treasurer of the Parker’s Landing Bridge Co., Fullerton holding 400 shares and Parker 200 shares. The agreement depositing 100 shares as security for the note was executed in duplicate and a copy held by each party. In September, 1882, being the time of the first dividend after the note fell due, 300 shares were placed to the credit of Parker on the dividend reports of the company, made out by H. R. Fullerton, treasurer of the company. Fullerton is shown, by the same statement to have 300 shares, where, the month previously, he had 400. Parker signed the dividend receipt, and continued to receive the dividends upon 300 shares of stock until his death in December, 1883. His administrators found the certificate of 100 shares of stock, and the note, among his papers after his death.

The further facts appear by the charge of the court below, which was as follows, by Neale, P. J.:

“On March 29, 1882, Fullerton Parker and H. R. Fullerton, both residents of the city of Parker, in Armstrong county, entered into negotiations by which Fullerton Parker loaned to H. R. Fullerton and his son, Dean Fullerton, the sum of two thousand nine hundred dollars to be paid in five months, and they executed, at the time of entering into that arrangement, a note. H. R. Fullerton *727was at that time the owner of certain shares of stock in the Bridge Company at Parker’s Landing. The amount of shares in that bridge held by Mr. Fullerton, under the evidence in the case, appears to have been four hundred shares, up until August, 1882. He appears to have owned four hundred shares, and of the four hundred shares that he owned, from what we can gather from the evidence, he gave to Mr. Parker a certificate calling for one hundred shares, and that stock was given in this way: ‘ I have this day deposited with F. Parker one hundred shares, No. 30, it being to secure payment of a note given to him, signed by H. R. Fullerton and Dean Fullerton, calling for twenty nine hundred dollars, and it is agreed by the said F. Parker, and H. R. Fullerton and Dean Fullerton, that if the note is not paid H. R. Fullerton is to transfer the said certificate to P\ Parker to be his own property and in payment of the note. Witness our hands this 29th day of March, 1882.’ Signed 'F. Parker’ and ‘ H. R. Fullerton.’

*“*Now, the evidence in this case, thus far, shows the bridge stock was not worth par. One witness, and the only one that has been called upon that subject, has testified that the bridge stock was worth sixty per cent, of par; that would be *$60,000*for the bridge; there being one thousand shares of stock at fifty dollars a share, you have *$*100,000. This witness estimates the bridge stock to be worth sixty per cent., that is, each share worth $30, sixty thousand dollars for the whole bridge, and, at the rate of sixty thousand dollars, it was paying at about that time nine per cent., and he estimates the value of the one hundred shares at about three thousand dollárs at the time this note came due. An examination of the papers which are before us does not satisfy us that the bridge stock was worth as much as the witness has said it was, because the statement shows it was paying between fifteen and sixteen cents a share, under a monthly payment, and at sixteen cents a share, it would be one hundred and ninety-two dollars on a share for the year, which would not be more than four per cent, on the one hundred thousand dollars. On the next month we find that it pays twenty cents a share, and at that rate it would be two dollars and forty cents for the year a share; so that, if that is evidence of what the bridge paid, it didn’t pay anything like nine per cent., and the estimate that was placed upon it by this witness would seem to be erroneous.

“ It may be, gentlemen, that the stock was worth this full three thousand dollars. If it were worth that amount, and the matter had been completed at that time, this note would have been can-celled, but there is a rule in equity that we have to be governed by in this case, and it is one that I feel is imposed upon me now to observe, namely, that, before equity can be demanded, equity must be done. Here was a condition on the part of H. R. Fullerton to have transferred this certificate of stock, No. 30, for one hundred shares, before he could have demanded that note. He must have done that *728because he had bound himself that he would do so, and, until he does do so, he cannot demand this note back again. He has no right to it because there is a condition precedent. The stock is really worth nothing to Fullerton Parker until it is transferred, Pie could not go into the market with the stock; he could not sell it until it is transferred. [That condition being annexed to this paper, that it -shall be transferred, and the defendant having failed to transfer it, we think, under the law we have before us, and we say to the jury that they would not be justified in cancelling this judgment, and we have to say to the jury generally that they find in favor of the plaintiff.] [1] And, in that respect, so that all parties may have their rights fully preserved to them, we refuse the points submitted to us by the defendant, and we affirm the points submitted to us bjr the plaintiff, and direct, generally, that the verdict be entered in favor of the plaintiff. Of course we will hereafter have the right to review our own judgment in this matter, and, if we find that it is erroneous, we can correct it, and, if we still adhere to our decision, it is easy to have it corrected by our higher court. [We consider this case as one entirely for the court and not one for the jury, and therefore we have taken it from the jury.”] [1]

The defendant’s points, which were refused by the court below, were as follows:

“ 1. Under the agreement of March 29, 1882, H. R. Fullerton, had only the right to redeem the one hundred shares of bridge stock mentioned therein by paying the note of the same date at its maturity. But, by his electing not to pay the note at maturity, the agreement thereby became a contract of sale, and if F. Parker thereafter next after the note became due commenced receiving the monthly dividends on said stock, he thus asserted ownership of the same, and thus admitted that the purchase of the stock was complete and the note paid.”

“ 2. If the jury find that, after the note became due, F. Parker at once commenced receiving the monthly dividends on the one hundred shares of stock, the act of taking such dividends was an assertion by F. Parker that said stock was then in fact his own property and was accepted by him in payment of the note.”

“3. If the jury believe the testimony of R. M. Moore, the one hundred shares of stock, mentioned in said agreement, was worth fully as much as the amount of the note, and tends, with the other proofs in the case, to support the defendant’s claim that the note is fully paid.”

*“4.*If the jury believe that H. R. Fullerton transferred one hundred shares of stock on the September dividend statement of 1882, to E. Parker, and F. Parker has signed the receipt showing he had received the September dividend and the following dividends on said one hundred shares, this the jury may find to have been a transfer of the stock within the meaning of the agreement.”

*729
      *The assignments of error*specified, 1, the portion of the charge in brackets, quoting it; 2-5, the refusal of the points respectively, quoting them.

*James P.*Colter, for plaintiff in error.

The stock was transferred, by the agreement, as soon as P'ullerton was in default as to payment. Hence, there was no need for any further action by Fullerton in order to complete Parker’s title to the stock and in order to relieve Fullerton from any other payment of the note. The proofs show that the parties so regarded this transaction. H. R. Fullerton received the dividends on the one hundred shares of stock until the note came due. After the note came due, he admitted Parker’s title to the stock by adding, in the dividend statement for September, 1882, one hundred shares of bridge stock. He set apart to Parker the dividend on three hundred shares in place of on two hundred shares, as he had previously done, and Parker assented to this by accepting the dividend on the increased number of shares. The dividend report, showing this, is in H. R. Fullerton’s own hand-writing, and thus, both by the original agreement and by the September and following dividend reports, we find both parties assenting over their respective signatures to the completeness of the transaction.

The agreement does not require any particular form of transfer, and there was nothing to show that all that was done was not a sufficient transfer. Parker, by taking a duplicate of the agreement, had in his own possession his evidence of title, and the treasurer of the Bridge Company commenced, promptly, to pay to Parker the dividends on the one hundred shares as soon as that title became complete.

If something more than the signing of the original agreement was necessary, we contend that such something more was actually done. H. R. Fullerton, in making out the September dividend report, added to F. Parker’s amount of stock one hundred shares. Parker already had the title to it, and H. R. Fullerton did transfer on that paper — a record of the Bridge Company — the one hundred shares, which he had agreed to transfer by the paper of March 29, 1882.

Suppose that a formal transfer upon the back of the certificate or upon some other record of the Bridge Company was necessary. The right to a transfer existed in Parker as soon as Fullerton was in default as to the payment of the note. Equity will consider that as done which should be done. Vincent *v.*Huff, 4 S. & R. 301; Moody *v.*Vandyke, 4 Bin. 31.

At least, the court should have left to the jury the question of payment in so far as the defendants, by reason of giving to F. Parker the bridge stock and its dividends, were entitled to credits, even if the jury had not found that the note was paid in full.

*Joseph*Bujfington, with him *Orr*Buffington, for defendants in error.

The court should not have opened the judgment, as the *730measure of proof required to open judgments is “a case which would justify a chancellor in entering.the decree:” Knarr *v.*Elgren, 19 W. N. C. 533.

Oct. 29, 1888.

Here, by the agreement, if the note was not paid the certificate was to be transferred. The burden is on the defendant to show that he transferred the certificate, as he is seeking the equitable relief. It' is not likely that stock worth more than $3,000 would be transferred to pay a debt of $2,900. Fullerton could have sold his stock for more than $3,000 and paid off his note before maturity. In point of fact he did neither. He simply allowed the collateral to stand; allowed Parker to collect the dividends, paid them to him himself, never asked for the note and allowed it to remain in Parker’s hands from September, 1882, until December, 1883, without asking for it or suggesting payment. After the value of the stock had diminished, he sought to escape payment of the note. But even in his petition he does not allege payment. It is simply an inference he would have the court draw. The court below erred in opening the judgment; they should simply have credited defendant with the amount of the dividends and directed the stock to be sold and the proceeds credited as well. This would have carried out a course consistent with the acts of both parties during their lives.

Per Curiam,

This case has been so clearly and legally disposed of in the charge of the'learned judge of the court below as to relieve us of the necessity of an extended opinion.

The judgment is affirmed.