The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-08-04

General, ths prYi1enaos,. These were insahs,sn ems
sssss '0s nsas1 :, A0sS "nSn wee ,o,ssS ia
case OF ono accng under . special vrssen
power, whom snotrer cannot safely deal WIN
HIM wbhou. inspecting the extent VI thai power:
Eugland, Lowsry vs.. the Commsrcisi Rank Of Bal
timore & Xefchs0ts' Magazine, 35l), and Pollock
w. tie National Bank @ 6elden, 274), are exam
pies, involve this principle. bsnk "a resp onsbe
where, by chs negligence or lfaud OF liz agents,
stock is transferred, a. we'll 10 tbs innocent
tuansferee az TO the original owner Of the Stock.
In the case OF Pollock, in the Court q Appeals, it
appears, from tho opinion Of Justice Wells, that
IjcA, the innocent holder of the shares fsauduenty
transferred. Justi'e Gardiner, delivering the OPT
mon Of the court declared that the National Bank
the dividends to the than plaintiffs; or 1t should 90
ascer.sined that it had M stock which could be
transferred, then il should pay the value Of the
shares according to the prayer OF the bill.
tide holders, and the continuance Of responsibility
70 former owners, in relation to he same parcel Of
STOCK distinctly sustained. The method Of Carrying
on: this principle IN new and complicated c 40
contracts Of She parties In tlslr true and legal
meaning, ard by the rules Viii III justcs and equity
may prescribe.
this line Of reasoning is this thai the company
Was bound to adni; the plaintiffs ~ stockhold
ers, TO the registration Of the eighty-fve shares
that they would have than become entitled 70
all the privileges OF members that thsy would
have had an interest in the property M the c,mpany,
10 the amount OF eight thouaand five hundred dollars,
AID 10 dividends upon that amount and has Tho no.
mnal value Of the shares Of the genuine stock should
be reduced by rate or per ceRSagc sufhc!en. TO
meet this sum. This Was the import, the exsans
and the character Of tia obligation fixed upcn the
company by the certificate transferred 70 tho
tiffE and OF the contract embodied in il. Had toe
daft NGoDt I'm
plaintiffs to transfer On the books, as demanded, IT
would have boon the duty OF the directors 70 haye
sscertained the shares OF genuine stock and its
holders, and TO have adjusted the proportions OF
the interests Of the lat ter in the stock OF the com
pSny by abRti1g from each share o rate or per
cepfase which would amount 70 tbs sum Of eighs
thousand five hundced dollars, and which, If this
were the only case, would be about twenty eight
cents and fraction ur0n ca III share. II the d.
Iectors refused or neglected this, the plaintiffs
could have filed complain, sand 50 the hicss
exist, on behalf Of tbemsslves. Snd all Others
similarly stuated) TO compel il. II the proportion
Of the spurious stock to three millions admitted It.
If, for example, there was one million five hundred
thousand dollars of such stock as st2tsd IN the a
swer, surrender Of one-baf Of the shares Of escn
genuine holder and taking new certificates for halt
would effect the object. Bat IL this rnsthod should
not be prac acable, or be irconvenient, then an
abatement OF the nominal value Of eacb share BY 4
rate or Fer centage sufficient to cover the amount
Of the spurious stock, would b practical and ef-
tectual.
It ia true tat the result Of thess visws pre-.
sents this anomaly, that the holders 0: genuine
stock ere in q worse position than tho claimants
upon that which is spurious. But the answer il
this: They have involved themselves IN rosponss
biities which mus. be redeemed aud justice win bs
appeased by the LEAST costly OF she sacrifices which
they are compelled to offer.
Difficulties have bsen suggested in carrying out
the principle have advocated The Chief Of them ~
minute examjnstion which this matter received be-
fore me in the case of the Bank OF Commerce hSs
led me to tho conclusion that this difficulty ID far
from being insuperabie. ALI tAe other objections
spripg,ng frcm the arran cement OF voting a1d 8
share in management aesm to re chimsricL, and
would dissipass sa ,ae momsn: they arose. ras
adjustment Of the rels interest IN tho stock or
when the Discrimination is msde. fhe.e may, per
haps, be some trouble in calling in all the holders
without lie gislasiye aid. Bat, IN my humble opia-
yield to the administration Of great principle Of
justice which will far the commands Of law per-
init reconcile this conflict OF equally honest sufferers.
TIE rule have stated 10, au sure, sanctioned by
comprehensive spirit OF enlightened equity; and IS
not, believe, condemned by imperative law, nor
| subject to ipsupersble difficulties in spplyiugit.
8. The las point to be considered IT, wha. IL the
tonsquerce OF the refusal to permit the trarsie-.
and what Is the measure of damage? Ia the view
which j have taken of the responsibility OF toe
company, the right to any damages depends exclu
svely upon the rsfues to perform the ,ntract tha
the allegation, which is in this complaiut), of de-
mand ard refusal to transfer, there would be- NO
ground Ct action whstever. This proposition is OF
material importance, and this proposition il fGn
dsme1tai ground OF my Judgment. The defend
ants were bound to admit these holders OF certif
Gates as members. Had trey done 10, Snd In the
mar ner IS to amount before stated they would
have fulfilled every inaginabIe obls:sion resting
pens atioE, arr for nothing else The market vslue
OF the stock OF company at the time OF demand
sf transfer forms the general rule OF measuring the
dan ages upon . refusal. (Koftright w. CONNER
cial Bank, % Wendell, 34s.) That market value
| has been found 70 be "a per cent This wss the
value at the date Of the certificates in April; Q0l.
IA in ease;) aud it ia somewhat Singular that the
value should have boz the same aftss the 9th Of
July, when the transfer books were closed by the
| resolution Of that day. The counsel, however il is
understood. agreed to take this Is the rate.
| Among the points Of the defendant. is this: thai
the answe and facts found show good reason for the
dire ctors c!osing the book not permitting any
transfer; and that the hooks were actually closed
ard the refusal to transfer was put upon this ground
as well as upon the nva'idi.y Of the certificate. II
this proposition . tenable, TIE result is that tina
only proper relief In this would bs to give toe
plaintiffs . judgment compe ling transfer, and do
clsriDg his interest in the property ss abovc stated.
BARI assing, the Trustees might refuse to act until
Judicial decision without necessarily preventing
their cesuis que trust from subnitHng 70 the per
| Torrance Of the contruct in the manner really
binding upon than. Bnt at the hearing, the dis
| CUSHION Of this point was passed over by the de-
Pendants counsel, though not waived, and perhaps
partly in quence of suggestion Of one o! the
judges. II was but glancsd ct BY the Planting
counsel. shall consider thst the point is open f1r
argument u 1t arises il othe. Upon the facts
as proven in this case, / find myself compelled 80
say that the market value Of good stock at the time
of the demsnd was % per cent; and ss the princ-
pl.s Of this opirion show that the plaintiffs would
haye been admitted mp the basis o. ore hundred
dollars share see alternative but to sdop. tha.
| rate as the measure Of damages. 1t will Be oh.
| served that the view which have taken does not
The plaintiffs are not cor tent with rule of dos;
sion which viii admit them as mere participants 10
the property. They seek judg nent az c-ed itors
with its attendant process Of execution. The de-.
the position have assumed they make no slight
advance In defeating the claim Of the plaintiffs on
any and every ground. But the question ID raised
upon the points of each party; and consider the