Court Opinion

ID: 5203375
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:56:51.116711+00
Date Added: 2024-06-11T08:27:14.328196
License: Public Domain

Scott, J. (dissenting):
■ While I freely concede that the question involved in this appeal is a close one and the considerations, advanced by Mr. Justice Laughlin for an affirmance of the judgment are very persuasive, I cannot avoid a feeling that to affirm it is to give effect rather to the form than to the real nature of the certificates issued by the defendant, Irrespective of the form in which the certificates were dráwn they were not certificates of stock, but merely promises to pay in the future. The defendant had no capital stock and could have none, and' if in issuing certificates in the form which it adopted it had attempted to create capital stock or to issue certificates representing capital stock it would have undertaken to do that which it had no legal capacity to do. The plaintiff cannot and does not, as ' I understand, base atty claim to a recovery'upon the proposition that it was misled by the1 form of the certificate into believing that the defendant was a stock corporation • and ■ that the certificates represented actual stock. The defendant’s incapacity to issue stock and its obligation to pay to the persons from whom it had purchased lands one-lmlf of the receipts from sales of lots as received, were •matters of record incorporated into the statute of the State and. in .. dealing with apparent obligations issued by defendant the plaintiff *133was chargeable with notice and knowledge of the statutory limitations and extent of defendant’s powers. The certificates were nothing more than promises to pay in the future, and in this respect are similar in legal effect, though not in form, to. the certificate of deposit involved in Zander v. N. Y. Security & Trust Co. (178 N. Y. 208) to which the Court of Appeals denied the attribute of negotiability. There appears to' me to be a well-marked distinction between the case now under consideration and those relied upon by the learned referee below and by Mr. Justice Laughlin, of which New York & New Haven R. R. Co. v. Schuyler (34 N. Y. 30) is a leading and typical case. That distinction I find in the fact that the false instruments in all these cases'purported to be certificates such as the companies had the power and authority to issue and, if genuine, were negotiable. Hence, the principle of implied' agency was held, to be applicable. The Court of Appeals has, however, expressly refused to extend the doctrine of these cases where the agent has undertaken to do an act not within the scope of either his actual or apparent authority. (Manhattan Life Ins. Co. v. Forty-second St. & G. S. F. R. R. Co., 139 N. Y. 146; Knox v. Eden Musee Co., 148 id. 441.) If the certificate in the present form is to be regarded, with reference to its form, as a certificate of stock, it was a certificate of a character, which the defendant had no power to issue, and which, consequently, its officers had no actual or apparent authority to issue. If, on the other hand, it is to be regarded in its true light as'a promise to pay in the future, it possesses neither inherently nor in form any of the attributes of negotiability, for it bears upon its face the qualifying words “ transferable only on the books of the Cemetery Association upon the surrender of this certificate,” which correspond to the words which, in the Zanden case, were held to impress upon the certificate of deposit the quality of' non-negotiability. ■ If the plaintiff relies upon some supposed negligence in issuing the certificate to Knevals, the Statute of Limitations constitutes an effectual answer, because the negligence, if there be any, of which the plaintiff can complain, happened when the certificates were given to Knevals. In my opinion, the judgment should be reversed, with costs, and the complaint dismissed.
Judgment affirmed, with costs.