The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1896-02-18
THE RIGHTS OF PLEDGES !
The Supreme Court Invited to
Definitely Define Their
Prerogative.
Argument of Suit Brought by Rudolph
Spreckels Against the Ne
vada Bank.

A case of particular interest to bankers
and those pledging stock and bonds as Sc
curity was argued before the Supreme
Court yesterday.
Nominally it was a suit originally
brought by Rudolph Spreckels against the
Nevada Bank, but the points at issue are
general in their application to pledges of
stock and the extent to which the bank as
pledge may go in handling the pledge in
its possession.
On June l, 1894, Claus Spreckels sold to
his son. G. A. Spreckels, certain property
for which c. A. Spreckels promised to pa Y
1851, $50 on January 4, 1895, and an addition
al $35l, $50 on January 4, 1886, with interest.
AS security for the total amount of over
$500, 900 G. A. Spreckels deposited with his
father certificates of stock in various COZ
porations. AS additional security for c..
A. Spreckeps note Rudolph Spreckels de-
posted certificates for 5000 shares of the
Paauhau Plantation Company, sugar
growers OF the hawaiian Islands.
This Paauhau pla ntation stock, which it
seems is worth about $500, 000 was trans
ferred by Claus Spreckels to the Nevada
Bank. Rudolph Spreckels thereupon
brought the present suit against the Ne
vada Bank, claiming that the 5000 shares
really belonged to him and had only been
amount of the pledge, and upon special
and verbal agreement that it was not to be
transferred upon the books of the com pany.
He accordingly had an Injunction served
on the Nevada Bank to restrain it from
sending the stock out of the State to be
transferred upon the company's books in
Honolulu.
The case came up in the Superior Court
some months ago. Delmas d Shortridge
appeared for the bank, and +. 2. Cole for
Rudolph Spreckels. The injunction was
dissolved.
Rudolph SpreckeIs appealed to the SUI
preme Court and yesterday E. P. Cole and
ID. Nj. Delmas argued the case upon
appeal.
Mr.. Cole said that the stock is worth
5000 The issuance of an injunction
he maintained, Is a matter largely of dis
erection with the court. Deprived of the
privilege of enjoining the bank, Rudolph
Spreckels would not have The right to vote
his own stock and the Pledge would get
the dividends from the stock Conclud-
ing his argument, he asserted that the
bank has never said it would not vote the
stock.
ID. M. Delmas, speaking for the Nevada
Bank, laid particular stress upon the point
that in the absence of an agreement 10 the
contrary the pledge of stock standing in
Rudolph Spreckels name conferred upon
the bank the right to have the stock trans
ferred into the name OF the bank upon the
books Of the bank. He claimed that the
pledge has the right to do as he pleases
with pledged stock and cannot be en-
joined, but must only be ready to restore
the stock when the pledgor desires to re-
deem it.
He said that, according to the code and
the decisions of the Supreme Court. no
transfer of stock is valid as to third parties
unless it be entered upon the books of the
corporation, and that as long as the stock
remains in the name of the pledgor it is
subject to attachment and execution at
at the suit of his Judgment creditors. The
pledgee's only safe protection, therefore,
against i'm position is to have the stock in
his name.