Court Opinion

ID: 9619720
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:32:15.932346+00
Date Added: 2024-06-11T18:04:43.902888
License: Public Domain

HENRIOD, Justice
(dissenting).
I dissent, respectfully suggesting that the main opinion has misconceived the property rights involved here. When the dividends were declared, they belonged to the person then owning the shares, which in this case was the plaintiff. By statute corporations arbitrarily are protected against a claim for the dividends by the share owner, if the corporation pays the record owner. This statutory defense is given the corporation for most obvious reasons, one of which is the very negotiable character of stock certificates about which the main opinion speaks. At the time the dividends were declared, Dalziel was not the true, but only the record owner of the stock, and the corporation safely could have paid the dividends to him or even his estate. Why it did not do this does not appear. Why it did not issue-.a new certificate in Dalziel’s name or that of his estate is not made to appear. At the time the dividends were declared, Dal-ziel had no interest in the company to sell, nor did he have a certificate to transfer. The abortive assignment by Dalziel’s executrix passed nothing, which is exactly what Leary received. Leary stands in no better position as far as these dividends are concerned than would one who had stolen the certificate, forged an endorsement and filed a false affidavit. The purpose of the statute is to protect the corporation in paying dividends to the record owner, if the true owner is unknown, and not to protect it where third party strangers to the record make claims that are unfounded legally or factually. It is because of cases exactly like this that indemnity bonds customarily are required where claim of loss or destruction of certificates is involved. The false claim of Leary that the certificate was lost (which it was not) and that he was the owner (which he was not) cannot justify dividend payments to him under any reasonable or logical theory, when the company by the simple device of making its check payable to Dalziel record owner, alive or not, would have protected it. What became of the dividend check then would be a problem for Dalziel or his estate, either of which might be required to disgorge to the true owner of the dividends. *84Leary cannot be held to be either the extended personality of the record owner here, nor his assignee, under any stretch of the imagination, since obviously he was not the record owner at the time the dividends were declared, was not the personal representative of Dalziel, and received absolutely nothing through a purported transfer that had no legal effect whatsoever.
The payment made here-was obviously made by mistake, which may have given rise to a corporate claim against Leary, but certainly did not give rise to any defense against the plaintiff, who was not a party to the mistake and cannot be charged with any participation in the mistake by not requesting a transfer on the books, a right reserved to herself, to be adjusted not between her and the corporation, or Leary but between her and Dalziel.
No argument can be made that although Dalziel had no interest in the dividends, he had a right to receive them, which right is assignable. He had no right to receive anything. It was the right of the corporation to pay a record owner and protect itself, and such right is a statutory privilege.
Authority from elsewhere seems to agree with the writer’s contention in cases like this,1 and we ourselves have gone so far as to require a corporation to purchase an equivalent amount of stock and turn it over to the true owner in a case where a person had wrongfully inserted the name of a stranger in the blank for assignee and the corporation on the strength of such action reissued shares to the wrongful assignee, the corporation having received no other notice than the surrendered certificate with the wrong person named as assignee.2
Finally, it is difficult for this writer fio determine how the majority opinion arrives at its result in the light of Title 16-3-17, U.C.A.19S3, since under this very statute which appears to be designed to protect a corporation where a certificate is lost or stolen, the corporation is not protected under the facts of this case, and said statute seems to say just that.
WADE, J., concurs with the views expressed by HENRIOD, J.

. Holly Sugar Corp. v. Wilson, 1937, 101 Colo. 511, 75 P.2d 149.

. West v. Tintic Standard Mng. Co., 71 Utah 158, 263 P. 490, 56 A.L.R. 1190.