Case Name: Stoltz et al. v. Carroll, Admx., et al.; Richards, Admr., v. Carroll, Admx., et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1919-04-02
Citations: 99 Ohio St. 289
Docket Number: Nos. 16108 and 16110
Parties: Stoltz et al. v. Carroll, Admx., et al. Richards, Admr., v. Carroll, Admx., et al.
Judges: Nichols. C. J., Jones, Matthias, Johnson, Donahue and Wanamaker, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 99
Pages: 289–311

Head Matter:
Stoltz et al. v. Carroll, Admx., et al. Richards, Admr., v. Carroll, Admx., et al.
Error — Incompetent evidence admitted in chancery hearing — Uniform transfer act — Sections 8673-1 to 8673-7, General Code — Apply to trustees, executors and fiduciaries, when — Stock certificate endorsed in blank —Presumption as to ownership— Where endorser receives dividends and votes stock — But certificate in possession of another.
1. It is error for a court in the bearing of a chancery cause to admit incompetent evidence, especially where it bases its judgment in part upon such incompetent evidence.
2. The provisions of Sections 8673-1 to 8673-7, inclusive, General Code, known as the uniform transfer act, apply to trustees, executors, administrators and other fiduciaries, where the validity of the transfer is not dependent upon the indorsement or assignment of such trustee, executor, administrator or other fiduciary.
3. M. indorses -his certificate of stock in blank. Three years later it is found among the effects of P., recently deceased, who has never had it transferred to himself on the books of the company and who during all that time has knowingly permitted M. to vote the stock, draw the dividends and enjoy the privileges and benefits of an owner: Held, Such conduct on the part of P. is inconsistent with absolute ownership, and the presumption of ownership that otherwise would have arisen from such possession and indorsement is thereby overcome.
(Nos. 16108 and 16110
Decided April 2, 1919.)
Error to the Court of Appeals of Crawford county.
The Ohio Locomotive Crane Company was incorporated in 1909, with a capital stock of $15,000, divided into 150 shares of $100 each. There were five incorporators, of whom were Patriek J. Carroll and Maurice E. Carroll.
The stock was all subscribed for by the incorporators in equal proportions and certificates for thirty shares issued to each.
The five stockholders elected themselves directors. Patrick J. Carroll was elected president and served in that capacity and as director to the date of his death, which occurred on January 20, 1916. Maurice E. Carroll was elected treasurer and served in that capacity and as director to the date of his death, which occurred on February 22, 1916.
On April 13, 1912, The Carroll Foundry & Machine Company, of which Patrick J. Carroll was a heavy stockholder, and Maurice E. Carroll a comparatively small stockholder, issued a check to Patrick J. Carroll for $4,000, which check was cashed in March 1913 by The Ohio Locomotive Crane Company.
Upon the death of Patrick J. Carroll the certificate for 30 shares of locomotive crane stock, issued to and carried on the books of the company in the name of Maurice E. Carroll, was found in the safety deposit box of Patrick J. Carroll, in an envelope together with the stock of Patrick J. Carroll in said company, marked “Ohio Locomotive Crane,” said certificate being indorsed in blank by M. E. Carroll, the indorsement bearing the date of May 3, 1913.
This certificate was afterwards delivered to Maurice E. Carroll by Robert Carroll, the minor son of Patrick J. Carroll, and passed from his possession to one C. Fred Vollmer, while Maurice E. Carroll was irrational and on his deathbed. After the death of Maurice E. Carroll the certificate passed from the possession of Vollmer to the widow of Maurice E. Carroll, and from her to A. J. Richards, administrator with the will annexed of the estate of Maurice E. Carroll, who sold it at its appraised value, as a part of the assets of the estate of Maurice E. Carroll, to Albert G. Stoltz, acting for himself, W. H. Picking and Charles Gallinger, the said administrator, Stoltz, Picking and Gallinger being wholly ignorant of the fact that the said stock had ever been in the possession of Patrick J. Carroll, or that the estate of Patrick J. Carroll claimed ownership or interest therein.
After said sale, this action was instituted in the court of common pleas of Crawford county by Phoebe S. Carroll, as administratrix of the estate of Patrick J. Carroll, deceased, against The Ohio Locomotive Crane Company, Albert G. Stoltz, W. H. Picking, Charles Gallinger, and A. J. Richards, as administrator with the will annexed of the estate of Maurice E. Carroll, deceased, to enjoin said company from transferring said stock upon its books to said Stoltz, Picking and Gallinger, and from permitting said Stoltz, Picking and Gallinger from participation in the management and control of said company, and to require said company to transfer said stock to said administratrix, and to enjoin said administrator from disbursing the money received from said Stoltz in payment therefor. A judgment was recovered against the defendants.
The case was appealed to the court of appeals of that county, where, judgment was again rendered against the defendants and a separate finding of facts made, which finding is as follows:
“And the defendants having requested a finding of facts, the court find the same, from the evidence, to be as follows:
“2. That the defendant, The Ohio Locomotive Crane Company, is a corporation organized under the laws of the state of Ohio, having been so incorporated and organized in 1909, with an authorized capital stock of $15,000.00 divided into 150 shares of $100.00 each.
“3. That said capital stock was subscribed in the following manner, to-wit: each of the following named parties at the time of the organization of said company subscribed for 30 shares of the capital stock as appears by the corporation book of said corporation, to-wit: P. J. Carroll, M. E. Carroll, C. F. Michael, C. S. Rogers, F. A. Bell; that certificates for said numbers of shares were issued Oct. 14, 1911, in the name of each of said parties, signed by the president and secretary of said corporation. That thereafter, in the year 1913, the said F. A. Bell sold his thirty (30) shares therein to P. J. Carroll, C. F. Michaels and C. Fred Vollmer, each of said parties acquiring ten (10) shares. That all that was ever paid on the certificate for thirty (30) shares issued in the name of M. F. Carroll (otherwise known as Maurice E. Carroll) was paid by sáid P. J. Carroll and this certificate was entered upon the records of said corporation in the name of said M. E. Carroll, and he appeared on the books of said corporation as the owner thereof; that by an agreement between P. J. Car roll and M. E. Carroll, he, M. E. Carroll, was to be permitted to have the dividends on said 30 shares during the term of his natural life, and said certificate was to be issued in his name to qualify him as a member of the board of directors and for purposes of prestige, and if he was able to pay said P. 'J. Carroll therefor he was to have the title thereto, but in the meantime the title and ownership was to remain in P. J. Carroll; M. E. Carroll never paid for the same, or any part thereof, that on the third day of May, 1913, said Maurice E. Carroll, made an absolute transfer and assignment of said certificate for thirty (30) shares of said capital stock and signed his name on the back of said certificate in ink to a form which, with the exceptions of the date and names which were written in ink is in printed form and the whole reading as follows:
“ ‘For value received........hereby sell, assign and transfer unto...........shares of the capital stock represented by the within certificate, and do hereby irrevocably constitute and appoint........ to transfer the said stock on the books of the within named corporation with full power of substitution in the premises. (signed) M. E. Carroll.
“ ‘Dated May 3, 1913.
“ ‘In presence of O. L. Bradley.’
“That he, the said M. E. Carroll, delivered said certificate so assigned to the said P. J. Carroll.
“That during the year 1913, and thereafter to the death of P. J. Carroll, and M. E. Carroll in the year 1916, the board of directors of said defendant corporation consisted of P. J. Carroll, M. E. Car roll, C. F. Michaels, C. S. Rogers, and C. Fred Vollmer. That P. J. Carroll was the president of said corporation from the date of its organization until his death, January 20, 1916, and during said time C. F. Michaels was the secretary thereof and M. E. Carroll was the treasurer thereof until his death, which occurred February 22, 1916; that on February 10, 1916, C. F. Michaels became president and C. Fred Vollmer became secretary of said corporation.
“4. That after the third day of May, 1913, being the date that M. E. Carroll signed said transfer on the back of said certificate, P. J. Carroll, did not have the same transferred to himself upon the books of said company, but retained possession thereof and deposited the same with his personal effects in his safety deposit box at the First National Bank of Bucyrus, Ohio, where said certificate was held and retained by said P. J. Carroll, until his death.
“That a few days following the death of said P. J. Carroll, said safety deposit box was unlocked by Charles J. Strawbridge, a brother-in-law of said P. J. Carroll together with Robert Carroll, his son, aged nineteen years, and C. Fred Vollmer, and an examination made of its contents for the purpose of ascertaining whether or not said P. J. Carroll had left a will therein; that at said time said certificate for thirty (30) shares of the capital stock of the Ohio Locomotive Crane Company was found in said box by said parties, together with other certificates of stock in various corporations, and other valuable papers, with a rubber around the same and enclosed in one parcel and marked thereon ‘property of P. J. Carroll.’ That in the same box at the same time were certain papers and stock certificates of M. E. Carroll, together with an insurance policy, real estate deeds, a deed executed to Pearl Carroll, a promissory note belonging to her, .and certain other papers of M. E. Carroll, all of which were in a separate package from the papers of P. J. Carroll, as herein described and said separate package had written thereon the words ‘property of M. E. Carroll.’
“That said safety deposit box could only be unlocked by the use of two keys one of which was held by and controlled by P. J. Carroll at and before the date of his. death, and the master key thereto was held by said First National Bank.
“5. That within a day or two thereafter said safety deposit box had been examined, for the purpose as stated, by the parties named, it and the contents thereof were again inspected by the same parties for the purpose of discovering whether or-not said P. J. Carroll, then deceased, .had any life insurance policies therein; that at the time of said inspection, said papers and said certificate of stock for 30 shares in the defendant Company, were found in the same condition as hereinbefore stated.
“That about two weeks after the death of said P. J. Carroll, the said M. E. Carroll requested Robert Carroll, then nineteen years of age, to obtain the key and unlock the said safety box and obtain for him the certificate for the 30 shares in question, for the purpose of him, the said M. E. Carroll, examining the same. That thereupon said Robert Carroll, without the knowledge or consent of his mother, Phoebe S. Carroll, plaintiff in this action, obtained the same and delivered it to M. E. Carroll, who was his uncle, and who retained possession thereof for several days after which the certificate passed into the possession of C. Fred Vollmer who had the same at the time of the death of Maurice E. Carroll.
“That on the twenty-second day of February, 1916, said M. E. Carroll died; and on or about March 1, 1916, said certificate was, placed by Pearl Carroll, widow of Maurice E. Carroll, who after the death of Maurice E. Carroll received the certificate from C. Fred Vollmer, as having been among the papers of M. E. Carroll, then deceased, among other papers of said M.- E. Carroll, in a safety deposit box in the Bucyrus City Bank, where the same remained until about March 8, 1916.
“6. That on said March 8, 1916, the defendant, A. J. Richards, was appointed administrator of the estate of M. E. Carroll, and said certificate was delivered to said administrator with other papers and property belonging to M. E. Carroll, and the same was thereafter listed by said administrator among the assets of the estate of M. E. Carroll, and the same was appraised by the appraisers thereof in the sum of $9000.00.
“7. That a few days after the death of M. E. Carroll, Robert Carroll informed his uncle Charles J. Strawbridge, a brother of the plaintiff herein, that he had taken said certificates for 30 shares from his father’s safety deposit box and had delivered the same over to his uncle, M. E. Carroll, and was told by said Strawbridge that he should not have done so as it belonged to his father, and immediately thereupon Robert Carroll called upon C. Fred Vollmer, who was the secretary of The Ohio Locomotive Crane Company, and at that time still had possession of said certificate, and informed him that the certificate belonged to the estate of his father and demanded the same of him but the same was not delivered to him by the s.aid C. Fred Vollmer.
“8. That the said M. E. Carroll, died, leaving a last will naming Patrick J. Carroll as executor which was duly probated, and left surviving him his widow Pearl Carroll, but no child of said marriage; that by his will he bequeathed to his several sisters, $13,000.00 with remainder of his estate to his widow absolutely, and further provided in his will that his executor Patrick J. Carroll should sell' so much of his estate as was necessary to pay said legacies, and should be given such time within which to make sale as should be to the best interests of his estate; that Pearl Carroll, his widow, elected not to take under his will. That on March 14, 1916, an inventory and appraisement was made of his estate and the certificate for thirty shares of stock in question and a dividend check of $900 to M. E. Carroll was appraised as the property and assets of the estate of M. E. Carroll, and on March 20, said inventor)'’ was filed in the Probate Court and approved by it.
“9. That Phoebe S. Carroll, the widow of P. J. Carroll, on January 25, 1916, was appointed administratrix of his estate, and on Febrüary 4, fol lowing, an inventory and appraisement of his estate was made, and forty shares of stock of said The Ohio Locomotive Crane Company was appraised as part of his estate, together with a dividend check of $1200.00 declared on said stock, and on Maixh 11, 1916, said inventory was filed in the Probate Court by the,plaintiff herein; that C. Fred Vollmer, while the secretary of The Ohio Locomotive Crane Company, was also one of the appraisers of each of said Carroll estates.
‘TO. That on the first day of July, 1916, the defendant, A. J. Richards, as administrator of the estate of M. E. Carroll, filed an application in the Probate Court of Crawford county, Ohio, wherein he had been appointed, and qualified as administrator for authority to sell said 30 shares of stock, as the property of M. E. Carroll, deceased, for cash, at not less than the appraised value thereof, to-wit, $9000.00 at private sale. That on the same date, the Probate Court made an order, of which the following is a part:
“ ‘On due consideration thereof, the court finds from the evidence that it will be to the advantage and best interests of said estate to sell and transfer said stock at private sale for cash at not less than the full appraised value thereof, to-wit, $9,000.00; and the court finds from the evidence that the widow of said decedent, Pearl Carroll, who is entitled to the remainder of the estate of deceased, under his last will has consented to a s.ale of said stock by said administrator upon the terms aforesaid, and further finds tha.t said estate is perfectly solvent.
“ Tt is therefore considered and ordered by the court that said administrator be and he hereby is authorized and directed to sell and transfer said shares of stock at not less than the full appraised value thereof, for cash, and that he retain the proceeds in his hands to abide the further order of the court, respecting the same.
“ ‘(Signed.) Amos Keller, P. J.’
“That on the said first day of July, 1916, the certificate for 30 shares of stock in question was attempted to be sold by said Richards, administrator, and delivered to the defendant, A. G. Stoltz, who acting for himself and the defendants Picking and Gallinger at the appraised value of $9,000.00 in cash, that said amount was paid by said A. G. Stoltz and the certificate representing said 30 shares was delivered to the said A. G. Stoltz. That it was not assigned on the back thereof by said Richards, administrator; that said attempted sale by said administrator was not reported to the Probate Court, nor was said attempted sale ever confirmed; that the name of the purchaser or purchasers were not inserted in the certificate; that that said sum of $9000.00 was at the time of the commencement of this action, to wit, oh the-day of July, 1916, and still is retained by the said A. J. Richards, administrator aforesaid.
“11. That after the president and secretary of the defendant corporation, The Ohio Locomotive Crane Company, had notice of the claim of ownership and right of possession of the estate of P. J. Carroll, to the certificate for 30 shares aforesaid, the defendant, A. G. Stoltz, delivered the said certificate to the defendant C. F. Michaels president of the Ohio Locomotive Crane Company, who attempted to cancel the same across the face thereof, and issued at the direction of the defendant, A. G. Stoltz, three certificates for ten shares each, one to the defendant, A. G. Stoltz, one to the defendant, W. H. Picking, and one to the defendant, Charles Gallinger. That said Picking and Gallinger paid to said Stoltz for their respective certificates for ten shares each the sum of $3000.00; that said three 10-shares certificates were signed by the president of said defendant corporation, C. F. Michaels, but the secretary of said corporation, C. Fred Vollmer, defendant herein, refused to sign the same, and the same were not signed by him or by anyone in his place and stead, and said certificates for ten shares each were not delivered to the defendants until after notice of claim of ownership of estate of P. J. Carroll.
“12. That said Stoltz, Picking and Gallinger at the time of the attempted purchase of said several certificates of stock, relied only on the order of sale made by the Probate Court of Crawford county, Ohio, given to A. J. Richards, administrator aforesaid, to sell said stock, and the inventory and appraisement of said estates and their conduct and attempted purchases were not influenced in any manner or degree by any of the acts or declarations of Patrick J. Carroll during his lifetime; and the court finds that all such acts and declarations of P. J. Carroll harmonize with the arrangement or understanding between P. J. and M. E. Carroll made and maintained the time they both were alive, as hereinbefore set forth.
“13. That prior to the attempted purchase of said certificate for 30 shares from said A. J. Richards, administrator, said defendant, A. G. Stoltz, caused an investigation to be made of the records of the Probate Court of Crawford county, Ohio, by the defendant, Charles Gallinger, acting as his attorney; also an investigation was made by said attorney prior to said sale, of the corporate books of the defendant corporation. A report was made by Charles Gallinger to said Stoltz that said certificate had been regularly issued and in his opinion the title and possession was in M. E. Carroll and his estate, and that the proceedings in Probate Court were regular and correct.
“14. That A. J. Richards, administrator at the time of attempting to make sale of said certificate had no notice or knowledge of the removal of said certificate from the safety deposit box of Carroll, nor did said Stoltz, Picking and Gallinger have any notice or knowledge of the removal of certificate from the safety box of said P. J. Carroll; that the sale so attempted to be made by said A. J. Richards, administrator was without any title thereto ;■ that no exceptions have been filed to the inventory and appraisement to either of said Carroll estates.
“15. That the plaintiff as administratrix of the estate of P. J. Carroll, began this action immediately and without delay after obtaining information that the certificate for the 30 shares of said capital stock was claimed by any one to belong to M. E. Carroll, or his estate.”
Mr. Charles Gallinger; Messrs. Hoyt, Dustin, Kelley, McKeehan & Andreivs and Mr. Frank Davis, Jr., for plaintiffs in error in Cause No. 16108.
Mr. Charles F. Schaber; Mr. Smith W. Bennett and Mr. Edward J. Myers, for defendants in error in Cause No. 16108.
Mr. Edward J. Myers, for plaintiff in error in Cause No. 16110.
Mr. Charles F. Schaber; Mr. Smith W. Bennett and Mr. Charles Gallinger, for defendants in error in Cause No. 16110.

Opinion:
Robinson, J.
The finding of facts by the court of appeals is challenged here as being unsupported by any evidence, and we have therefore carefully considered the whole record.
The record discloses no competent evidence tending to support the following, of finding 3, "that by an agreement between P. J. Carroll and M. E. Carroll, he, M. E. Carroll, was to be permitted to have the dividends on said 30 shares during the term of his natural life, and said certificate was. to be issued in his name to qualify him as a member of the board of directors and for purposes of prestige, and if he was able to pay said P. J. Carroll therefor he was to have the title thereto, but in the meantime the title and ownership was to remain in P. J. Carroll; that on the third day of May, 1913, said Maurice E. Carroll, made an absolute transfer and assignment of said certificates for thirty (30) shares of said capital stock . That he, the said M. E. Carroll, delivered said certificate so assigned to the said P. J. Carroll."
The only evidence on the subject was by the witness C. Fred Vollmer, who is thoroughly discredited by his own conduct, inconsistent with his testimony. He expressed his mere opinion as to what occurred between Maurice E. Carroll and Patrick J. Carroll on this occasion, but upon being pressed by the court admitted that he was not present and that the only conversation he ever had with Maurice E. Carroll with reference to that transaction instead of being an admission supporting his conclusion was the direct opposite.
The record discloses no evidence tending to support the following, of finding 4, "but retained possession thereof and deposited the same with his personal effects in his safety deposit box at the First National Bank of Bucyrus, Ohio, where said certificate was held and retained by said P. J. Carroll, until his death," except that the certificate, together with other personal effects of both Maurice E. Carroll and Patrick J. Carroll, was found after the death of Patrick J. Carroll in the safety deposit box of Patrick J. Carroll at said bank, to which Patrick J. Carroll carried the only key.
The record discloses no evidence tending to support the following, of finding 4, "that at said time said certificate for thirty (30) shares of the capital stock of the Ohio Locomotive Crane Company was found in said box by said parties, together, with other certificates of stock in various corpora tions, and other valuable papers, with a rubber around the same and enclosed in one parcel and marked thereon 'property of P. J. Carroll,' " the evidence being that it was found in said box in an envelope marked "Ohio Locomotive Crane," and in the same envelope with the certificates for 40 shares of locomotive crane admittedly belonging to Patrick J. Carroll; and the.evidence is in conflict as to the certificates for the stock of each in The Carroll Foundry & Machine Company being found in the same envelope.
The following of finding 5, "that at the time of said inspection, said papers and said certificate of stock for 30 shares in the defendant company, were found in the same condition as hereinbefore stated," is equally unsupported.
We are unable to understand the reasoning of the court in finding 12, "that said Stoltz, Picking and Gallinger at the time of the attempted purchase of said several certificates of stock, relied only on the order of sale made by the Probate Court of'Crawford county, Ohio, given to A. J. Richards, administrator aforesaid, to sell said stock, and the inventory and appraisement of said estates and their conduct and attempted purchases were not influenced in any manner or'degree by any of the acts or declarations of Patrick J. Carroll during his lifetime; and the court finds that all such acts and declarations of P. J. Carroll harmonize with the arrangement or understanding between P. J. and M. E. Carroll made and maintained the time they both were alive, as hereinbefore set forth," in view of the conclusive and uncontra dieted evidence that Patrick J. Carroll had notoriously held Maurice E. Carroll out to the world as the owner of this stock, all of which had come to the knowledge of the plaintiffs in error.
The record discloses finding IS, "That the plaintiff as administratrix of the estate of P. J. Carroll, began this action immediately and without delay after obtaining information that the certificate for the 30 shares of said capital stock was claimed by anyone to belong to M. E. Carroll or his estate," to be unsupported by any evidence and in contradiction of the evidence.
We are of opinion that many of the errors of fact appearing in the finding are due to the failure of the court to apply and enforce the ordinary rules of admission and rejection of evidence, upon the theory that the cause being tried to a court learned in the law it would not be prejudiced by the introduction of incompetent evidence and in the consideration thereof would be influenced by and would base its judgment only upon the evidence which after careful deliberation it found to be competent.
The finding of facts in this case, based in many instances upon incompetent evidence, proves the fallacy of the theory. There is. no sound logic,' nor any law, which authorizes a chancery court learned in the law to disregard the very rules of admission and rejection of evidence, for the disregard of which that same court would reverse the judgment of a justice of the peace, who errs not from inattention and inapplication but from lack of knowledge. The salutary rules of admissibility and nonadmissibility of evidence are just as potent in a chancery court as in a law court.
The supported facts reduced to essentials then are:
1. The certificates were issued to Maurice E. Carroll, and with the knowledge and consent of Patrick J. Carroll were so carried on the books of the company, and all rights and privileges thereunder were exercised and enjoyed by Maurice E. Carroll during his life.
2. The above situation was advertised to the world, including the plaintiffs in error, by Patrick J. Carroll.
3. The purchase price, $2,000, for said stock was paid to the company by Patrick J. Carroll.
4. Maurice E. Carroll never reimbursed Patrick J. Carroll therefor.
5. The certificate for the 30 shares of stock issued to Maurice E. Carroll was found, indorsed in blank, in the safety deposit box of Patrick J. Carroll at the time of Patrick's death, the indorsement bearing date about three years prior thereto.
6. The certificate indorsed in blank was by mistake thereafter delivered to Maurice E. Carroll, whose administrator sold it for value to the plaintiffs in error who were purchasers in good faith without notice of any claim thereto of the estate of Patrick J. Carroll or of anyone else.
The uniform transfer act provides:
"Sec. 8673-1. § 1. Title to a certificate and to the shares represented thereby can be transferred only,
"(a) By delivery of the certificate indorsed either in blank or to a specified person by the person appearing by the certificate to be the owner of the shares represented thereby .
"Sec. 8673-5. § 5. The delivery of a certificate to transfer title in accordance with the provisions of section 1 [G. C. § 8673-1], is effectual, except as provided in section 7 [G. C. §8673-7], though made by one having no right of possession and having no authority from the owner of the certificate or from the person purporting to transfer the title.
"Sec. 8673-6. § 6. The indorsement of a certificate by the person appearing by the certificate to be the owner of the shares represented thereby is effectual, except as provided in section 7 [G. C. § 8673-7], though the indorser or transferrer,
"(a) Was induced by fraud, duress or mistake, to make the indorsement or delivery, or
"(b) Has revoked the delivery of the certificate, or the authority given by the indorsement or delivery of the certificate, or
"(c) Has died or become legally incapacitated after the indorsement whether before or after the delivery of the certificate, or
"(d) Has received no consideration.
"Sec. 8673-7. § 7. If the indorsement or delivery of a certificate,
"(a) Was procured by fraud or duress, or
"(b) Was made under such mistake as to make the indorsement or delivery inequitable; or .
"If the delivery of a certificate was made. [,]
"(c) Without authority from the owner, or
"(d) After the owner's death of legal incapacity, the possession of the certificate may be reclaimed and the transfer thereof rescinded, unless:
"(1) The certificate has been transferred to a purchaser for value in good faith without notice of any facts'making the transfer wrongful, or
"(2) The injured person has elected to waive the injury, or has been guilty of laches in endeavoring to enforce his rights.
"Any court of appropriate jurisdiction may enforce specifically such right to reclaim the possession of the certificate or to rescind the transfer thereof and, pending litigation, may enjoin the further transfer of the certificate or impound it."
Applying the statute to the instant case, Maurice E. Carroll appeared by the certificate to be the owner of the shares represented thereby. He indorsed it in blank (Section 8673-1, General Code).
The possession and the right of possession were in the administratrix of the estate of Patrick J. Carroll, deceased, who, through her agent, delivered it to Maurice E. Carroll by mistake (Section 8673-5, General Code).
Maurice E. Carroll, having possession, but not the right of possession, died, and his administrator delivered the certificate to the plaintiffs in error (Section 8673-6, General Code).
The plaintiffs in error were purchasers for value in good faith without notice of any facts making the transfer wrongful (Section 8673-7, General Code).
It is, however, strenuously contended by the defendant in error Phoebe S. Carroll, as administra trix of the estate of Patrick J. Carroll, deceased, that the transfer of this stock is without the validifying effect of the provisions of the uniform transfer act, for the reasons (1) that Section 8673-2 expressly excludes, it, and (2) that the plaintiffs in error, being-advised that Maurice E. Carroll was dead at the time of the delivery of the certificate, did not come within the saving provision of (d) (1) of Section 8673-7, General Code.
Section 8673-2 reads as follows:
"Nothing in this act shall be construed as enlarging the powers of an infant or other persons lacking full legal capacity, or of a trustee, executor or administrator, or other fiduciary, to make a valid indorsement, assignment or power of attorney."
It deals exclusively with the power of an executor, etc., to make a valid indorsement, assignment or power of attorney. Both the word "indorsement" and the word "assignment" as used in this statute contemplate a writing passing or attempting to pass title or an interest therein, and since the administrator attempted no such indorsement or assignment of title the section is without application to this case.
The fact that the plaintiffs in error had knowledge of the death of Maurice E. Carroll, and were thereby put upon notice, would only be such notice as would require them to inquire as to the right to sell as between the administrator and the legatees of the estate, and is met by their investigation of the proceedings in the probate court wherein the stock was appraised and returned as property of the estate, wherein an application for an order to sell at private sale was made, and wherein an order was issued directing the administrator to sell at private sale this specific property at the appraisement, and a sale made to them according to the terms of the order.
The fact that the sale was never confirmed is of interest to the purchasers, the legatees, and the administrator, but not to a stranger to that proceeding and to that estate.
It must, therefore, follow that plaintiffs in error, A. G. Stoltz, W. H. Picking, and Charles Gallinger, by virtue of the statutes hereinbefore referred to, took good and indefeasible title to said stock.
This leaves the equities in the fund to be determined between the estates of Patrick J. Carroll and Maurice E. Carroll, and since the court below based upon evidence found that Patrick J. Carroll had paid the purchase price -for said stock, to-wit, $2,000, for Maurice E. Carroll, and that Maurice E. Carroll had never reimbursed him therefor, and since that court found from the evidence that the certificate was in Patrick J. Carroll's possession, indorsed in blank, and also found that Patrick J. Carroll for approximately three years immediately prior to his death had permitted Maurice E. Carroll to exercise and enjoy all the privileges and benefits of an owner, and since the record is silent as to a delivery of said certificate by Maurice E. Carroll to Patrick J. Carroll, the logical conclusion would be, not that Patrick J. Carroll was the absolute owner — else Patrick J. Carroll would have had said stock transferred to himself upon the books of the company and would have exercised and enjoyed the privileges of ownership, including the receiving of dividends and the voting of said stock — but that he had only, a special ownership therein and that that ownership did not extend to such ownership as would allow him to exercise and enjoy the privileges and benefits of ownership.
And, having, recourse again to the finding of facts, since there is no evidence of any agreement between Patrick J. and Maurice E. Carroll, the only obligation which existed between them was the implied obligation of Maurice E. Carroll to reimburse Patrick J. Carroll for the $2,000 advanced by him to the company in payment of Maurice E. Carroll's subscription for said stock: and since such reimbursement was never made the reasonable conclusion must be that these certificates were held by Patrick J. Carroll as a pledge for the payment of said sum; at any rate equity will be done by requiring such payment out of the fund.
The judgment of the court below will, therefore, be reversed, and A. J. Richards, as administrator de bonis non with the will annexed of the estate of Maurice E. Carroll, deceased, will be ordered to pay out of the $9,000 in his hands from the sale of said 30 shares of stock, the sum of $2,000 with interest from the 17th day of March, 1913, to Phoebe S. Carroll, as administratrix of the estate of Patrick J. Carroll, deceased.
Judgments reversed and judgments for plaintiffs in error.
Nichols. C. J., Jones, Matthias, Johnson, Donahue and Wanamaker, JJ., concur.