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

the city ofNev York, Charged with The Kssyiay OF
me TRANSFER books, and the issuing carafcass OF
cwnership Of fs stock at that place; and 60 coz
(fol. 32) thst no was charged with the keeping Of
it's transfsy books, and the making Of the es:ts6-
Gates 81 stock, whenever any transfer Of the
stock thereof should b made by aoy former ov,
by the Eaosigree bat, ii IL denied that ne
was ever charged with the issuing Of Certificates 0!
ownership Of ito stock, in any oshsr manner, OF
charter and by-iaws. The certifca,c in This case
has bsen before ses forth; and Is is found by tbs
Judge, that it was signed by Robert 1chuyler. ana
Was IN The usual form OF the certificates ssed by the
and actual stock Of the defendants. The answer
also admits, Qol. 4l) taat the signature 70 the c4-
0iioate 10 In the proper Writing Of Robert ,hnyieH
tina. 1t conforms to the defendants osrtikc stes Of
as they had been in the habit Of using. R1bsrt
Schuyler then, was Il rcy opinion, vessei with all
the power in relation to the Issuing certificates Of
stock which the company possessed. THAI power
was exercised by fraudulent issue in tbs present
Csse, but /. was in exercise or an apparently I'M
limited power. And the case then ia one Of an
abuse Ut general agency In . particular busines
The certificate is . written declaration .ha. the
party in wnoss favor il is given, 10 entitled to the
shares expressed in IL, and an admission that be ~
member Of the company, Aad has right 70 iss
privileges, aud q participation ia its properly.
Hae sssSs nss 20
fiv this obligation upon the company. Suppose the
stockholders had formally resolved that 81 Oh esrti
fcstes should be issued for the use OF the company
TO the amount OF 100000, and left the CO tifcatss
signed by them with Schuyler, under such ipstn,.
tiOns. II he hsd filed them up with 500 600, the
company would have been responsible. The powers
they have actually deyoNed upon HIM are equally
sufficient to bind them.
do not propose to enter npor tbs extensive In.
qury, as TO the authority and Obligations principal
aud ugent. II appears to me that the rale sdop;.
ed by the suprsme Court in tbs North RIVER Bank
VS.. Aymar g Hill ZOO covers this caSs, Where
ever the very act OF tho agent s authorized by the
tell1s II the power--xhat Ia, whenever by oonpar-
ing the act done by the ant with the w0rds OF the
power, the act ia in itseH warranted by the terms
used, iueh at is binding the constituent 70 all
persons dealing ingocd faith with the agent Such
NersoNs are NOT bound 10 inquire into fac:s Guadf
~he apparent authority IL the real authority" l
consider that there Is no guby.ahtial distinction be
tween the cases OF prosory notes as to which this
ansusge was rsed, aad certificates CT stock ia cor
poratiops. This point ~ more particularly ex
smined under the Mex head Of my oMai9a.
The defsndsats counsel that she certiacats wa a.
sOlutely void in the hands Ct Kyle, and that no
ore claiming by ha2sser under hirc could be 10
better sitasstou. In relstion TO- kyie's posisior
a. - Til certificate We have no right ID assume,
ULCer the evidence, that Kyle had not this mount
OF stock standing in his name on the books Of tao
company. 1t isnot found shat Kyle knew that the
cectihcase WAS fraudulently issued AID did not re-
)fo]io 37). An that ia found b:aring u2on this
point s that Schuyler delivered the certificate TO
Kyle to horrsw money upon for his lSchuylsr ~
us; that it was no. Issued Tor any vial purpose,
br. was fraud on the part OF Schuyler 70 EsWs
money for his 0wn private purposes, (ao CD Nov,
Kyle borrowed the money aud gaze his note, paying
the proceeds to Schuyler. Had he taken up the
note himself he would bave stood, upon the facts Of
the presen. case in as good situation the plsin
tifis stand. II would have been necessary to havs
raised reasonable presumption at least that he
knew Of the fraud. Hence it cannot be correctly
said that the certificate was utterly void n tbs
hands of Kyle. He had y hen upon It a. security
for his Cnn note, discounted fer Scbuylsr's use.
He sonld have had o full right TO it had he paid
sCcb rote. II was, indeed, before zach payment,
voidaple IS against, the comeAny, b:esuae without
consideration; and any detencs svails5le az to
Schuyler would have served a. to Kyle. The pro-
position cannot be carried furthsr than this.
We have then ssosher snd an important question
10 the hands ef bona fde holder II It was .
lsgstiaSs insrumsut y would BE- 50 s;yond
North RIVER Bsnk vs.. Aymar, % Hill 269,) settles
that point. "The paper being issued without consi
de,a'ion was indeed void as between the original
parties, but there being power to issue paper
of a bona fde holder" 10 the CASE OF fasmsa vs..
Lobach, Il Duer 354) this ourt adop'ed the propo
sition that certificates of stock in the banda Of
bona fds holder lar partook Of the caasacte. of
peSotisble paper as that no equities bet ween the
previous parties could defect his right. The cs.e
Of Kortrght Vs. the Commercial Bank OF Buffalo,
(22 Wendell $500 settled among other things
the same principle; the delivery by agent Though
against his Instructions, of TIE certificate and
power though in blank, gave right " the innocent
holder. A special action o. eEs 1u1psls will 10 on
behalf Of the holder Of certificate against cor
porafiop 70. refusing to permit transfer. (kort'
right Va. u Com. Bank Of Buffalo, % Wendell, 34s;
Morgan vs.. The Bank Of North Anne lea, Ssrg. &
Rawie, 81; Matter VI. Shspley, 10 John; Rep 4s5;
Cstchpole We the Ambersgate r. r. Co., liz L. n
Eg. Rep, 1872 The last case arose or demurrer.
The declaration stated as ground OF action, that
the plaintiff was prevented from appearing to be .
member on the books Of the company, and the se-
cord count alleged special damages. Ia the case Of
Bennett VI. the Bank OF Commsics, cited several
authorities to show that bill in equity Will lie for
the specific performance OF o c1ntrs.t 10 deliver
certificates OF stock and hov fully the possession Of
able interest H. and right to the sock represented
in them. To these cases may be added Type va.
Swapy, Eng. l.. y Eq. Rep, Isl; Bagahaw vs.. the
Eastern Rsilload Co.,. Haze, ia; Dansp; vs.: AL.
bTecbt, IL SmoEs, 1879; Slo1al Vi. the Bank Of
England, Ia SluiOns Rep, AIS.
1t appears TO me that through this line Of antaori
ties, al d r1sGy which might be added, we fnd the
predominant spirit OF commerce tending to confer
upon these evidences OF debt or interest," the charac
ter and tributes OF negotiable paper, whenever the
rights Of honest purchasers are brought in quest
But within few hours have met with an authority
which seems to me sufficient 70 dispense with fur
VS.. the Morris Canal and Banking Co., November,
1854, Cour. Of Appeals If Nav Jersey, Com. Law
Register, May, 1855, p 42s,) the question was,
whether q bona fde holder OF railroad bonds ua6er
seal, having no notice Of q defect OF 6sIe in the
seller, would not have perfect title to them, free
from all equities between the seller aud the CON-
paDy. The master who heard the Gaze (the Chan
celor being iatersssed reported IN his favor, aad
fraudulent issue of the bonds the pa.t sulars Of
which do not appear, but in which conclusions
the court coinciied. The Curt Of Appeals
unanimously affirmed the decision Of the mag
ter. Justice Elmer adverted to the s,ttled
rule as to promisory notes. &C.. sud Observes that
by analogy TO ths class Of cases, the exgeuces OF
securities into the same category. He notices the
cssas of exchequsr bills q b. and AID ~ OF bonds
of the King OF Prussia, g b. aud Cr. - aad of
in1truments issued by the government Of Naples.
q Big. 2es.) He says that az bet 1een tnrd par
lies, We suppose the common usage to transfer
them by delivering without enquiry as 70 the titls