Case Name: The Mechanics' Banking Association, plaintiff and appellant, vs. The Mariposa Company, defendant and respondent
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1865-12-30
Citations: 3 Rob. 395
Docket Number: 
Parties: The Mechanics Banking Association, plaintiff and appellant, vs. The Mariposa Company, defendant and respondent.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 26
Pages: 395–406

Head Matter:
The Mechanics Banking Association, plaintiff and appellant, vs. The Mariposa Company, defendant and respondent.
1. Where stock is, by the terms of the certificate thereof, “ transferable only in person or by attorney,” on the books of the cotnpany issuing it, upon the surrender of the certificate, the company is not obliged to allow a transfer to be made upon its books except upon the application of the owner, in person or by attorney.
2. Thus, where the defendant issued a certificate in the above form, to M. of 473 shares of its capital stock, and a transfer of the stock was demanded by the plaintiff, M. not attending in person or by attorney, but the plaintiff simply presented a power of attorney, signed by M., appointing F. his attorney to transfer to D. & C. 100 shares, and to J. 373 shares of the stock, and certificates from D. & C. and from J., stating that they had no interest in the shares, and that they consented that such shares “ be transferred to the person or persons entitled theretoS'eld that the defendant was justified in refusing to permit the transfer to be made to the plaintiff. Monell, J. dissented.
(Before Barbour, Monnell and McCunn, JJ.)
Heard November 13, 1865;
decided December 30, 1865.
This action was brought to recover damages for a refusal by the defendant to allow a transfer to the plaintiff, upon the defendant’s books, of 473 shares of the capital stock of the defendant, a mining corporation incorporated under the general act.
The stock stood in the name of John H. McDowell, as his property, and a certificate to that effect had been issued by the company to, and was held by him. The stock was transferable only in person or by attorney on the books of the company at their office, and only upon the surrender of the original certificate. In June, 1864, a transfer was demanded. McDowell did not attend in person, nor ask nor offer to transfer the stock. The plaintiff simply presented a power of attorney signed by McDowell, appointing J. H. Ferdon his attorney to transfer unto Dibblee & Cambios 100, and to P. & F. Jaudon 373 shares of the stock j and the person making the demand also presented a certificate of P. & F. Jaudon, that they had no interest in the shares, and that they consented “ that the said shares be transferred to the person or persons entitled thereto,” and' a similar certificate of Dibblee & Cambios. The company .refused to allow the transfer to the plaintiff.
The action was tried before Justice Moncrief and a jury. On the trial, the above state of facts appeared. After the plaintiffs rested, the defendant’s counsel moved to dismiss the complaint, upon the grounds, 1st. That the principal, or his attorney, did no’t demand the transfer. 2. That the plaintiffs showed no valid title to the stock. The motion was granted, and the plaintiff appealed.
John E. Burrill, for the plaintiff, (appellant.)
I. The issuing and delivery of the certificate in question by the company to McDowell was admitted, and no evidence was offered by the defendant to. disprove the fact established by the certificate, that McDowell was the ■ owner of, and entitled to, the shares in question.
II. The assignment and delivery to the plaintiff of the certificate, with the assignment and power attached thereto, executed by McDowell in blank, operated as an assignment and transfer of the shares to the plaintiff, and. according to the terms of the certificate, and the custom and usage, and well established principles, entitled the plaintiff to demand a transfer of the shares to themselves on the books of the company on the surrender of the certificate.
1. The custom and usage set up in.the complaint, and the knowledge of it on the part of the company, are not denied. (Com. Bank of Buffalo v. Kortright, 22 Wend. 348. S. C., 20 id. 91.)
2. Eo evidence was introduced by the defendants to show ■ that they had any lien or claim on the stock, or that any equities existed, as between "themselves "and McDowell,- which could justify a refusal to permit McDowell to transfer the stock. *
3. The delivery of the certificate and assignment executed by McDowell vested the plaintiff with all the title of McDowell to the shares ; and in the absence of any equities existing in favor of the company, such title was perfect, and entitled' the plaintiff to demand a transfer. (Com. Bank of Buffalo v. Kortright, 20 Wend. 91. S. C. 22 id. 348. Leavitt v. Fisher, 4 Duer, 1. Fatman v. Loback, 1 id. 354.)
4. The cases which go farthest to restrict the negotiable character of stock certificates, concede that they are transferrable by indorsement and delivery ; and that, as between the transferor and transferee, the title of the latter is perfect; but that it is subject to all the rights of the corporation existing against the assignor. (Ang. & Ames on Corp. 7th ed. §§ 353, 354, 564, 565. New Haven Railroad cases, 13 New York Rep. 628, 629.)
5. Here, as has been said, the defendants did not assert any such rights or equities against McDowell or any one else.
III. Under the circumstances established, the plaintiff or the company were entitled to, and would have been justified in striking out the names of Dibblee & Cambios and P. & F. Jaudon from the assignments.
1. It was conceded that when the certificate and assignment were delivered by McDowell, the latter .was in blank.
2. It was conceded that the names of Dibblee & Cambios and P. & F. Jaudon were inserted for the purpose of making a transfer, which was not made.
3. There was no evidence to show that the certificate and assignment had ever been delivered to, or gone into the possession of Dibblee & Cambios, or that they had ever acquired any interest therein; but, on- the contrary, it is proved that they.disclaimed any interest therein.
4. All the interest of P. & F. Jaudon in the shares was transferred to the plaintiff,
5. The execution and delivery of the assignment by McDowell, in blank, authorised the holder to insert the name of any party to whom the shares might be sold. (Com. Bank v. Kortright, 20 Wend. 93. S. C. 22 id. 364. Leavitt v. Fisher, 4 Duer, 20.)
6. The certificate never was delivered to Dibblee & Cam-bios, and the insertion of their names, accidentally or erroneously, did not prevent the holder from striking out their names and inserting others.
IY. Whether or not the plaintiffs were entitled to strike out the names of Dibblee & Cambios and P. & F. Jaudon from the assignment, they had the right to demand from the • company a transfer of the shares to those parties, in accordance • with the assignment, and the defendants were liable for having refused such demand. Such demand was made and refused, although, as the company were assured, Dibblee & Cambios and P. & F. Jaudon were present to receive the transfer and make a re-transfer to the plaintiffs.
Y. The demand made by the plaintiffs was in all respects sufficient, and made in such manner as to cover all contingencies. (Com. Bank v. Kortright, 22 Wend. 353.)
YI. The defendants made no objection to the form or sufficiency of the certificate, assignment or transfer, or to the form of the demand; and by such omission, and the refusal to permit a transfer of those shares to be made by any person, or to any person, have precluded themselves from making any objection to the sufficiency of such demand, or of the papers on which it was based. (Peacock v. N. Y. Life Ins. Co., 1 Bosw. 338. See particulary Hill’s Points, iv. in Bumstead v. Dividend Co., 2 Kern. 90; Allen’s opin. S. C. pp. 96, 97.)
YII. The transfer clerk of the defendant, who was the attorney named in the assignment to make the transfer, was . ready and willing, and was about to make the transfer, but was prevented by the vice president of the company.
YIII. The grounds upon which the motion for a nonsuit was asked are wholly untenable, and it is difficult to perceive their force or accuracy.
1. The two conditions mentioned were both complied with; moreover, the attorney was the transfer clerk and agent of the defendant, who was prevented by the defendant from doing the act required.
2. The plaintiff was the principal, for the purposes of demand.
3. If not, then Dibblee & Gambles and the Jaudons were, and a demand was made by all.
4. The defendants are precluded from objecting to the suf ficieney of the demand by the admissions in the pleadings. (Sixth point.)
5. The plaintiff’s title did not depend upon the two papers called consents, executed by Dibblee & Cambios and P. & F. Jaudon, and the language of which was so uniformly criticised, but upon -other independent facts. (See second point.)
IX. Under any circumstances it cannot well be said that the evidence was insufficient to go to the jury.
X. The exceptions taken at the trial to the exclusion of evidence are well taken.
1. The plaintiff was not restricted to what took place at the time of the demand of 20th June, but was entitled to show a demand at a different time, and what then occurred.
2. The time mentioned in the complaint was wholly immaterial, and the plaintiff was not restricted to that date.
3. We were entitled to show either a prior or subsequent demand, and what took place, for the purpose of showing what objections, if any, the defendants made on each occasion, and how we obviated them.
Wm. M. Evarts, for the defendant, (respondent.)
I. This is an action strictissimi juris, and cannot be maintained, except upon the clearest legal right of the plaintiff, made evident to the defendant by regular and authentic documents of title, at the time when the demand and refusal of transfer, relied upon, took place.
1. The defendant had recognized and accepted John H. McDowell as the owner, of these 473 shares of its stock, and had issued an obligatory certificate to that effect. John H. McDowell, and he alone, was the party to call upon the defendant to allow him to exercise his jus disponendi over this stock.
2. But John H. McDowell himself, by the very conditions upon which he held these shares, and expressed in his certifiof property and title, could demand of the defendant its concurrence and aid in the exercise of his jus disponendi, only upon the surrender of his own certificate, and by his own ex ecution of an act of transfer upon the books of the defendant at its office.
3. The act of transfer, however, might be executed (both on general principles and by the rules of the company) by procuration. In such case, before the company could be required to recognize the right of the attorney, the attorney needed to present an authentic document from his principal, empowering him to execute the act of transfer upon the books of the company. It was further requisite for the attorney to offer the surrender of his principal’s certificate of stock and the deposit of his power of attorney, and to require from the company, in behalf of his principal, the means and opportunity to execute the act of transfer authorized in and by the power of attorney. A refusal to the attorney, thus empowered and thus demanding, would place the company in the same position of responsibility for a denial to the principal of the exercise of his jus disponendi, as if made to the principal attending in person.
II. It is apparent, on the proofs, that the plaintiff’s demand of the transfer of these shares to itself was not attended with the requisite right, either in form or substance, to subject the defendant to this action for a refusal of the transfer.
1. The only authority for the required transfer which the defendant could recognize, was John H. McDowell, and (in his personal absence) the only evidence of such authority which it could respect, was his written power of attorney.
2. The plaintiff neither had nor produced any authority from McDowell, upon which it could require a transfer of these shares to itself.
3. The plaintiff in . fact exhibited the authority and direc- ' tion of McDowell for the transfer of these shares to other persons than the plaintiff, viz : 100 shares to Dibblee & Cambios, and 373 shares to P. & F. Jaudon.
4. The attorney of McDowell, J. H. Ferdon, did not demand or require permission to make the transfer, nor in any manner insist upon the right of his principal to make the same.
III. These essential defects in the plaintiff’s position are not cured by the circumstances given in evidence by the plaintiff in that hope.
1. The certificates of Dibblee & Cambios and of P. & F. Jaudon, that they had no interest in the shares, and their consent that they might be transferred to the “ person or persons entitled,” conveyed no authority, or implication of authority, from McDowell, to transfer to any other person than themselves. These certificate's only served, pro tanto, to annul the power of attorney presented by the plaintiff.
2. The request, assent or'wishes of Dibblee & Cambios, and of P. & F. Jaudon, as to any transfer of these shares, following a repudiation of any interest in them, were wholly immaterial to the defendant. It is the requests, assents and wishes of those who have an interest in the shares, not of those who have not, that are important to the company.
3. Notwithstanding all this evidence, the transfer permitted by the company to the plaintiff, upon the only document from McDowell offered to justify it, would have been without authority, irregular and void.
IV. The evidence shows that a dispute as to the title to these shares had arisen and been brought to the notice of the defendant, by the service of an injunction against any transfer of them. It was the plaintiff’s misfortune, or folly, to take an equitable claim upon these shares, severed from a regular and authentic legal title. In this predicament it cannot throw upon the defendant any enlarged duty or responsibility in the premises, or mulct it in damages for an adherence to its own rights. The remedy of the plaintiff is by suit in equity, to which McDowell, Dibblee & Cambios, P. & F. Jaudon and the defendants are parties, to have its equitable interest in the stock executed by a transfer of the legal title.

Opinion:
McCunn, J.
It is evident this action cannot be maintained except upon the clearest legal right of the plaintiff, made evident to the defendant by regular and authentic documents of title at the time when the demand and refusal of transfer relied upon took place. The evidence clearly shows that Mc Dowell was the owner of these 473 shares of its stock, and that the company had issued an obligatory certificate to him to that effect; it must, therefore, follow that he, and he alone, was the party to call upon the defendant to allow him to exercise his jus disponendi over this stock ; nay, more, McDowell himself, by the very conditions upon which he held the stock, could demand of the defendant its concurrence and aid in the exercise of his right to dispose of the stock only upon the surrender of his own certificate, and by his own execution of an act of transfer upon the books of the defendant at its office. It is quite true the act of transfer might be executed by procuration. In such case, before the company could be required to recognize the right of the attorney, the attorney needed to present an authentic document from the principal, empowering him to execute the act-of transfer upon the books of the company, and this was not done in this case ; on the contrary, Perdón, the attorney named, being present, did not demand the stock. The only authority for the transfer which the defendant could recognize was McDowell's, and in his absence his written power of attorney; and it is very clear the plaintiff failed to prove authority from McDowell upon which it could require a transfer of the shares to itself ; on the contrary, it is in evidence that he had ordered the transfer of these shares to other persons than the plaintiff, viz. 100 shares to Dibblee & Cambios, and 373 shares to P. & F. Jaudon, and the certificates of Dibblee & Cambios and of P. & F. Jaudon, that they had no interest in the shares, conveyed no authority from McDowell to transfer to any other person than themselves. The certificates only served pro tanto to annul the power of attorney presented by the plaintiff.
Moreover, on examining the proof, I find there was a dispute as to the title of these shares ; the defendants knew this, because they had been enjoined against any such transfer.
I therefore hold, upon the evidence in the case, that a recov- . ery would have been without authority, irregular and void.
The judgment below should be affirmed, with costs.
Bakboub, J. concurred.