Court Opinion

ID: 6314194
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:21:18.443942+00
Date Added: 2024-06-11T08:59:11.637141
License: Public Domain

Kennedy, J.
The only question involved in the first three errors assigned, which seems to be worthy of notice, is the competency of Joshua T. Seal as a witness for the defendants. If the competency of the evidence, or any portion thereof, was intended to be excepted to, I think it was not made a question of, and pressed on the argument of the cause here; nor can I perceive any tenable ground upon which such an exception could have been sustained.
The objection to the competency of Joshua T. Seal, as a witness • for the defendants, is made upon two grounds; First, that of interest in the event of the suit; and second, that of the verdict in this case, if it had been in favour of the plaintiff, being evidence in an action brought hereafter by Jesse Sharpe against Seal, to recover back the price of the stock, upon a breach of the implied warranty of title, on the part of Seal, that attended the sale thereof by him to Sharpe. Sharpe, it would seem, must be considered the real defendant in this suit, though Seal undoubtedly was interested in it, according to his own statement, until he was released by Parker, which was on the trial of the cause: because he induced Parker to go into a bond with Sharpe to the sheriff, engaging to save the latter harmless, if he would forbear to proceed on the execution which he had in his hands at the suit of the plaintiffs against Seal, to sell the stock. But Seal could only be looked on as interested in the event of the suit, on account of his undertaking to Parker, to be back security to him, for the sufficiency of Sharpe to keep him indemnified, for becoming Sharpe’s security in the bond given by them to the sheriff. But it is alleged that Seal, in selling the stock, as the owner thereof, to *136Sharpe, impliedly warranted the title of it; that a recovery by the plaintiffs in this action, would be evidence, at least, of a breach of such warranty; and Seal by means thereof might be rendered liable to return the price of the stock to Sharpe: hence it is contended that he was interested in preventing a recovery by the plaintiffs, and therefore not competent to give testimony against them; which was in effect giving evidence in his own 'favour. Now admitting that Seal, by selling the stock to Sharpe, thereby agreed to warrant and support the title to the stock, it by no' means follows that a recovery by the plaintiffs in this action would be any evidence whatever of the breach of such warranty: on the contrary, I think it very clear that it would not. For the plaintiffs, by claiming to recover in this actfon, do not dispute or deny the right of Seal to the stock, so far from this, they assert that he was the owner of it, at the time that Sharp alleges he bought it of Seal, and even afterwards as late as the 8th of May, 1836, w'hen the execution of the plaintiffs was first put into the hands of the sheriff. But Sharpe claims to have purchased the stock from Seal on the 22d of April, 1836, several days before the execution against Seal was issued; so that the recovery by the plaintiffs in this action could not possibly affect the implied warranty of title to the stock, by Seal to Sharpe. Consequently, in this point of view, Seal could not be considered as being called to support his own interest by his testimony. But it is further contended by the counsel for the plaintiffs, that a verdict of recovery, by the plaintiffs in this action, would be evidence in an action brought afterwards by Sharpe against Seal, to recover an indemnity or compensation for the loss occasioned thereby to him by means of his having bound himself to indemnify and save harmless the sheriff. It has not been shown, I think, that such a verdict could be made evidence in such case upon any correct principle. From any thing that was disclosed on the trial, it has not been shown that any such action could be maintained by Sharpe against Seal. The only ground alleged for it is, that in the event of a recovery here by the plaintiffs, there would be a breach of the implied warranty of title to the stock given by Seal to Sharpe? But the incorrectness of this proposition has been shown already above. It might, however, be further illustrated by supposing a recovery had by the plaintiffs in this action, and a suit brought in consequence of such recovery by Sharpe against Seal. Sharpe, in order to maintain-his action, would, on the trial of it, have to prove his purchase of the stock from Seal. This would have to be his first step; and this he could only do by giving in evidence either the admissions of Seal, or by showing the fact otherwise, in connexion with the letter of attorney from Seal to him, showing that he effected the purchase as early as the 22d of April, 1836. Then, after having thus shown his purchase to be at least as early as that date, how could a recovery against the sheriff for not having taken the stock in execution afterwards, on the 6th *137of May, 1830, as the property of Seal, be made evidence upon any principle to support his claim 1 Most clearly, it could not; because it is perfectly obvious, if Sharpe bought the stock of Seal on the 22d of April, 1836, that the sheriff could not have been made liable for not taking it in execution afterwards, on the 6th of the following month, as the property of Seal, unless during the interim Seal had repurchased, or by some means become the owner of it again; or that the sale between Seal and Sharpe was collusive and fraudulent; in either of which cases Sharpe would not be entitled to recover; and therefore the recovery in this action by the plaintiffs would be unavailing to him; and upon that ground alone, if upon no other, would be inadmissible as evidence. But if Seal had any real interest in the event of this suit, it would rather seem to have been such as might have inclined him in favour of a recovery by the plaintiffs; because they by such a recovery would have had their -judgment against Seal satisfied; and thus Seal, perhaps, might become relieved-from all further proceeding upon it against him. But since the plaintiff’s have failed to recover, he of course still remains liable, and may expect to be compelled, if ever able, to pay it. We therefore think that the release from Parker to Seal, removed all objection to his competency as a witness for the defendants.
The three remaining errors are exceptions to the charge of the court to the jury. On the trial of the cause the counsel for the plaintiffs asserted, that the legal title to the stock being vested in the name of Joshua T. Seal, though in reality purchased for the use of his brother Joseph, with the funds of the latter, made it properly liable to be taken in execution, and sold for the debts of Joshua. The court, however, in answer to this proposition, instructed the jury, that unless the stock was oioned by Joshua, it could not be taken in execution and sold for his debts: that if in point of fact it was made out, that his brother Joseph was the owner of it, that finished the controversy. The fourth error is an exception to this instruction of the court. It is proper to premise first, that at common law such stock could not have been taken in execution; and that in this case, when the sheriff had the execution put into his hands against Joshua T. Seal, it was only authorised by the act of the 29th of March, 1819; Pard. Dig. 99, (1831,) 7 Smith’s L. 217. But by the provisions of tins act, it is plain that such stock is only made liable to be taken in execution for the debts of the real, owners thereof. Where the stock stands on the books of the corporation, in the name of the real 'owner, it may be taken in execution and sold, upon a judgment had against him, in- the same manner that goods and chattels are liable to be so taken and sold: but, when held in the name of another, process in the nature of a foreign attachment is required to be first issued against the stock, and the person in whose name it shall be so held, be summoned as a garnishee, after which the like proceeding thereon is directed to be had as in the case of a *138foreign attachment. That such stock should be liable for the payment of the debts of its real owner, is perfectly just and equitable; but that it should be held liable to the payment of the debts also of the person in whose name it is holden would certainly be very unjust; and what, I apprehend, the legislature never intended. We therefore think that the instruction of the court to the jury on this point was correct.
The counsel for the plaintiffs, on the trial, further claimed, that if the stock was suffered to remain on the books of the bank, in the name of Joshua T. Seal until after the execution came into the hands of the sherifF, it was liable to, and ought to have been taken in execution by him as the property of Joshua' T. Seal, notwithstanding the latter might have actually sold it previously thereto. The court, as to this, after stating that in the United States v. Vaughan, (3 Binn. 394,) it was held that stock, assigned bona fide, for full value, on the certificate, and handed over with a power to transfer, conveyed such an interest that the stock was not liable afterwards to attachment as the property of the vendo:', although the transfer was not made on the books of the bank at the time of the attachment, then told the jury, “ that if on the 22d of April, 183G, Mr. Sharpe actually gave value for the stock, in good faith, and took an assignment and power to transfer, it authorised him to make defence to this suit.” The counsel for the plaintiffs alleges that in this direction to the jury the court erred. And in order to support this allegation, it is argued that the same rule, which is requisite to make a transfer of ordinary goods and chattels valid against execution-creditors, ought to be observed and applied so far as practicable, in the transfer of stock: that to render a transfer of goods valid against the -claims -of the creditors of the vendor, a transmutation of the possession must accompany the transfer; but as this is not altogether practicable in the case of bank stock, on account of its not being susceptible of manual occupation or possession, yet if it will admit of any thing being done, which can fairly be considered equivalent to an actual change in possession of goods, it ought to be done, otherwise the sale ought to be held invalid, at least, as against the creditors of the vendor: that a transfer of the stock, on the books of the bank, would seem to be the only thing that can be deemed in such a case an equivalent to the vendee’s taking the actual possession in the case of goods, and, therefore, unless done, the transfer ought not to avail against creditors. Though this reasoning may be ingenious, and not -without plausibility, yet it is believed that it would be contrary to the universal understanding, as also the practice of mankind, on the subject, to adopt it. Besides, although the legislature has made such stock the subject of execution, yet it cannot be said that the nature of it has been thereby changed, so as to have become in every respect the same or even similar to goods and chattels. For the debts of the real owner it is made liable to be *139taken in execution; but as to what constitutes the ownership of it, or the nature of the evidence, by which it may be established, they are in nowise changed. The law in that respect remains the same as it was before the passage of the act subjecting it to execution. The actual possession and use of goods is a matter which is open and visible to all the world, and being also considered prima facie evidence of ownership, it has therefore not only in law, but likewise in the common estimation of mankind, been supposed to be sufficient to give such possessor a credit in his dealings and intercourse with the world equal to the value of the goods so held and used; and for this reason it has been held that a private purchaser of goods, even for a valuable consideration, who leaves them in the possession of the vendor, no matter from what motive, whether innocent or fraudulent, shall not be permitted afterwards to withdraw them from the execution-creditor of the vendor. But as to the stock, it, from its very nature, is incapable of such possession so as to make it known or notorious who has the use or benefit of it, and thus raise a general belief in regard to the ownership thereof: even its .existence may be unknown, excepting comparatively to but few persons. The only evidence of it that can be safely trusted as to this, is the books of the bank or the corporation; but they being of a private nature are not open to public inspection. Hence it is, that the ownership of such stock though held by the owner in his own name on the books of the corporation, is not supposed to have given him a general credit with the world. And for the same reason, if held by another in trust for him, the trustee is never supposed, by reason of its standing in his name on the books of the corporation, to have obtained a genera] credit on account of it. It is not, therefore, to apprise the world and prevent it from giving a false, credit to the apparent owner of stock that the transfer thereof is required to.be made on the books of the bank in the presence of one of its officers. The great object of requiring transfers to be made in this manner, is, to prevent all difficulty that otherwise might arise with those who have the direction and management of the bank, in ascertaining the persons who are to be regarded and treated by them as the owners of the stock and as corporators. No persons, therefore, are to be regarded by them as such, excepting those in whose names the stock is entered and holden. It is, therefore, only by means of an assignment . made of the stock on the books of the bank, in the presence of a proper officer thereof, that the assignee can claim to exercise the rights of a corporator, and to be recognised by the bank as such. But the act of assembly, under which the bank was incorporated, does not, nor yet does any other act, make void or invalidate assignments of the stock made in a different manner. Although they may not invest the assignee with the legal title to it, yet he will be considered in equity as the real owner thereof, and must be treated as such, when known, by all the world, excepting the bank, which, *140for certain purposes, may refuse to do so. We, therefore, consider the instruction given by the court, on this point, to the jury, correct.
A third proposition was advanced by the counsel for the plaintiffs on the trial; “ that as they offered to indemnify the sheriff, he was bound to proceed and sell the stock, whether Joshua T. Seal was the owner of it or not.” The court, however, denied the correctness of this proposition, and instructed the jury that if Joshua T. Seal was not the owner of the stock at the time the execution came into the hands of the sheriff, the sheriff was not bound to proceed and sell it; This instruction of the court is made the subject of the last error assigned. It would certainly have been a most palpable error in the court, if it had affirmed the proposition advanced by the plaintiffs’ counsel on this point. It would, in effect, have been declaring, that it was the duty of the sheriff to do an illegal act, because the plaintiffs had offered to indemnify him if he did so. For surely it cannot be seriously alleged that it would not be an illegal act, and a most glaring violation of law, in a sheriff to seize and sell, knowingly, the property of a stranger or third person, under an execution, who was nowise liable for the payment of the debt or money thereby directed to be levied : yet it is evident that the sheriff would have done this very thing if he had proceeded and sold the stock in question, when it, in fact, belonged to Jesse Sharpe and not to Joshua T. Seal, the defendant in the execution. The sheriff, it is true, is bound to take property, when pointed out to him by the plaintiff in the execution as belonging to the defendant, if it be his in fact, though it may be doubtful at the time whether it is so or not; if the plaintiff offers to indemnify him. And if he should refuse in such case, after an indemnity offered, to proceed against the property under an execution, and the plaintiff, in a suit brought against the sheriff for not having so proceeded, should show clearly that the defendant in the execution was the owner of it at the time, the plaintiff would be entitled to recover; but not otherwise. So that the sheriff, if he refuses to take and sell the property, after being offered an indemnity by the plaintiff, takes the risk and responsibility upon himself of showing, if sued afterwards by the plaintiff, that the property did not belong to the defendant named in the execution; and this is the most that can be claimed of him. The judgment is affirmed.
Judgment affirmed.