Daily capital journal. (Salem, Oregon) 1903-1919, 1911-04-25
OREGON SUPREME COURT DECISIONS
Full Text Published by Courtesy Of Turner Reporter Of IL
Supreme Court

That each of the certificates had
endorsed thereon the following
transfer:
For value received here
by sell, assign and transfer unto
shares of the capital stock
represented by the within certificate,
and do hereby irrevocably constitute
and appoint Attorney to
transfer the said stock on the books
of the within named corporation with
full power of substitution in the
premises. CHAS. A. GRAY"
"In the presence of: Fred A. Legg.
That the note had not been paid
and that in June, 1907, the defendant
Fankhauser furnished certificates No.
1872 and No. 1873 to the defendant cor
poration for the purpose of deliver
ing the same to a prospective pur-
chaser for the price of S1020; that he
was proceeding to sell the same for
the purpose of repaying the amount
due him upon the promlssory note of
Anson and for costs and expenses of
collection and sales.
The same facts were also pleaded
by way of estoppel. Plaintiffs reply
put in issue the affirmative defenses
interposed by defendant Fankhauser
and alleges that the certificates were
deliverd to Anson and endorsed in
blank for the purpose of enabling
him, as agent for defendant, to sell
the same for defendants benefit;
that Arson never had any authority
to mortgage, pledge or hypothecate
the stock, all of which facts were
well known to defendant Fankhauser
at the time he made the loan; and
that at such date there had been no
assignment or transfer on the books
of the company, as Fankhauser well
knew. The reply also charged fraud
and collusion between Frankhauser
and Anson.
There was a decree for plaintiff in
the court below and defendant Fank-
hauser appeals.
Mcbride, j.. The blank assignment
made by Gray upon the delivery of
the certificates to Anson gave to him
the apparent authority to deal abso-
lutely with the stock and pledge
in good faith, without notice of any
inirmity in Anson's title, is entitled
to have the proceeds of the shares ap
piled on Anson's debt. When the
true owner places in the hands of
another, all the indicia of the owner
ship of property, so that he appears
to have the full power of disposing
of it, innocent persons dealing with
such apparent owner will be pro-
tected Their rights IN such a case
do not depend upon the actual au-
thority of the person with whom they
deal but upon the apparent authority
with which the confidence or negli-
gence of the true owner has invested
him. Mcneil V. Tenth National
Bank, 46 n. Y. 325.
Assignments in blank of the char
acter of that now under consideration
are perhaps the most common
method of transferring the title to
certificates of stock and have been
recognized by the courts of our great
commercial states; N. Y. & N. H. R,
r. Co. " Schuyler, 34 N. Y. 30; Kert-
right " Buffalo Commercial Bank,
! 20 Wend. 81 In the latter case the
court says; "The execution in blank,
must have been for the express pur-
pose of enabling the holder, who
ever he might be, to fill it up. If in
tended to have been filled up in the
name of the first transferee, there
would have been no necessity for its
execution in blank; Barker might
have completed the instrument The
/ usage, however is we'll established,
and was well understood by Barker,
as he made the transfer in conform
= ity to It; and he, or those setting up
a claim under him, should not now
be permitted to deny its validity The
filling up, ,is but the execution Of an
authority clearly conveyed to the
holder, is lawful in itself. and con-
venient to all parties, as it avoids the
necessity of needlessly multiplying
transfers upon. the books"
We cannot agree with counsel that
the national banking act limits the
right of passing title to stock certi-
ficates by assignment.
The provisions of the United States
Revised Statutes. Sec. 51S9 and SINH
lar state statutes, providing that
stock shall be transferred by in
dorsement on the books of the cor
poration have generally been held to
be for the protection and convenience
Of the bank, and that no effect should
Ibe given to them except for the pro-