Court Opinion

ID: 6672837
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:13:45.052543+00
Date Added: 2024-06-11T16:00:36.218611
License: Public Domain

The opinion of the Court was delivered by
Wright, A. J.
It appears that John L. Erancis, at the time of his death, in 1865, was possessed of the shares referred to in the complaint, which stood on the books of the defendant in his name. He left a will, of which Charles R. Carrol qualified as executor, and as such executor, in 1866, endorsed in blank the certificates of said stock, with other stocks which he held in right of the testator, and delivered the same to his attorneys, Buist & Buist, who were to manage the business of the whole estate. In June, 1868, under a bill in which the said executor was plaintiff, and Grace Alston and others were defendants, the prayer of which does not appear in the brief with which we have been furnished, an order was passed directing the plaintiff to transfer and deliver to the Master the cash and certain enumerated securities in his hands. Amongst these, the stock of the Bank of Charleston was not named. The order concludes with the following words : “ And that thereupon he be discharged from all further accountability and liability whatsoever as executor of John L. Francis, deceased.” In June, 1869, Whaley, Mitchell & Clancy,'representing the residuary legatees of Francis, receipted to Buist & Buist for certificates for fifty old shares of Bank of Charleston, S. C., for fifty new shares of said bank, and for fifty shares of Charleston Insurance and Trust Company, all belonging to estate of John L. Francis. In October, 1869, the certificates of bank stock were brought to the bank by bona fide purchaser's, without notice of any defect or objection, to be transferred. The certificates bearing on their face that the shares “ were transferable only on the books of the said bank, by John L. Francis or *393his attorney,” the bank declined to make the transfer until the authority of the Probate Judge to the executor to transfer, was produced. In December, 1869, the bank, on the presentment of the certificates of Robert Buist, Esq., Probate Judge for Charleston County, that the executor, Carroll, had leave to sell and transfer the said stock in person or by attorney, transferred the same to the purchasers.
On the 18th day of March, 1870, on a petition in the equity suit already referred to, of Carroll, Executor, vs. Grace Alston and others, by this plaintiff and certain residuary legatees of John L. Francis, he, the said plaintiff, was appointed Receiver of the estate of the said testator. We have not been furnished with a copy of this order, and must therefore assume that it simply appointed him Receiver without reference to any particular fund, and without any conditions or limitations. The plaintiff by his complaint in the Court below demanded judgment against the defendant: “ First, for fifty whole shares and fifty half shares of capital stock of the said bank, to be issued in the name of John L. Francis, to the plaintiff, as Receiver of the estate of the said John L. Francis; or, second, for the sum of $7,500, the value of the said shares owned by the said John L. Francis, and the costs of the suit.” The Court instructed the jury “that the certificate of the Judge of Probate 'was illegal, and therefore void, and was no protection to the bank in the transfer of the stock ; that the Bank of Charleston had constructive notice of the illegality. That when the transfer was first applied for without the certificate of the Judge of Probate, and the bank requiring such a certificate before they would make the transfer, they were put upon their guard. That there was never any sale of stock by Carroll, the executor; that he had ceased to be the executor for more than twelve months when the order of the Judge of Pobate was obtained for the sale of the stock.” The jury were instructed to find a verdict for the plaintiff, which they accordingly did, in the sum of $1,500, besides costs. The exceptions by the defendant to the charge of the Judge constitute the grounds of appeal here. The argument on the part of the plaintiff resisting the motion to set aside the judgment, and for a new trial, proceeds upon the illegality of the transfer of the stock. That, therefore, no property passed. That he is to be considered, by his complaint, as simply asking that the bank be compelled to recognize him as owner thereof. This is not consistent with the nature of his complaint, which demands judgment for the fifty shares and fifty half shares to be delivered to him as *394such Receiver, or for the value of the said shares owned by the said Francis. The first seeks a new issue of such stock, and the second is in the nature of a separate action for a breach of duty in permitting the transfer. In what view of the case, as understood from the complaint, the particular verdict was rendered, we are at a loss to perceive. Viewing the case in the light most favorable to the plaintiff, and that in which he desires it to be regarded, if it can be made to appear that the transfer was illegal, the parties to whom the certificates were passed acquired no title, and the hank would be bound to recognize this plaintiff as the lawful owner.
The illegality of the transfer by the bank is referred to the want of title in Carroll as executor at the time it was made, and this is claimed by virtue of the order of June 17th, 1868, “ discharging him from all further accountability and liability whatever as executor of John L. Francis, deceased.” Did this operate in effect as a revocation of his letters testamentary, or discharge Carroll from his office as executor? Doubtless the Court of Equity has the power to enjoin an executor from interfering with assets of his testator ; to appoint a receiver to take charge of the property of the estate where there is danger of its being lost or wasted ; confide this trust to more than one, and divide amongst several the discharge of the duties which appertain to an executor. But it never undertakes to discharge him from his office, for it is without power to a Dpoint his successor; and although it may regulate his action in regard to the estate, it never acts directly on the office. In Osborne et al. vs. Black et al., Sp. Eq., 435, Ch. Johnson, delivering the opinion of the Court, says, in relation to a discharge by an Ordinary, on the renouncement of an executor, “ Neither the Ordinary nor any other tribunal has any such power. The Courts of Equity do exercise the power of taking the assets out of the hands of any executor where they are in danger of being wasted, but it has no power to discharge him from liabilities incurred, or to deprive him of rights which he has acquired in the discharge of the duties of an executor.” The order referred to must have proceeded upon the ground that no assets, save those named in it, had ever come to his hands in the course of admininstration. No matter how comprehensive the words, or their purposes, as to a discharge of all farther accountability whatsoever as executor of Francis, the order never could be effective to shield him from a liability outside of the assets which he was by it directed to transfer to the Master of the Court. Was it to discharge him from the *395creditors of Francis, none of whom were parties to the bill ? If the existence of the stock now in dispute had not been known to the legatees of Francis, until brought to their notice by the transfer by the bank after the order, with the facts of its loss or depreciation by the negligence of Carroll, would the order be held to discharge him from the consequence of such loss; or even if the order had succeeded his accounting, could it bar the demand for an account of funds retained by him without the knowledge of the parties entitled to the estate ? If the order is to be held as a conclusive discharge of Carroll, divesting him of all title to the property of the estate, and as no Receiver was appointed until 1870, in whom was the legal title of the stock in the meantime? It must have rested in some one, and if not in Carroll,in whom? While a mere equitable interest in bank stock may pass by a transfer of certificate from hand to hand, the legal interest in the stock in question could only be transferred on the books of the bank by Francis himself, in his lifetime, or his attorney, and since his death by his legal representative. There is no proof of any notice by the bank of any equity by which the legal title to the stock was affected. It exercised all the care and caution demanded by a due regard to its own interest and that of the stockholders, in whose name the certificate had issued. When it was presented, in October, 1869, with the transfer, by the executor, to the parties who exhibited it, the bank, as we are obliged to suppose, in view of the Act of 1824, 6 Stat., 238, which required the order of the Court of Ordinary to give validity to a sale by an administrator or executor, unless directed by the will, declined to make the transfer until the evidence of the authority of the executor was furnished, and on such evidence being furnished in writing, it made the transfer. The assignment was by the executor having the legal title, and with no imputation against the bank of fraud, complicity, or knowledge of any design on the part of the executor, to convert the proceeds to a use inconsistent with the will; it is, nevertheless, asked that the bank should be compelled to recognize the plaintiff as the owner of the stock. In that event, what becomes of the stock owned, as appears by the books of the bank, by the parties to whom the executor transferred? Are the plaintiff and purchasers all stockholders of this bank through the same stock, and to receive a double dividend ? The purchasers are not parties here, and no judgment in this case can reach them. If the plaintiff, as to this stock, has any *396rights on behalf of the legatees or creditors of Francis, against others than the bank, he must pursue them as he may be advised.
It is ordered that the judgment be set aside, and a new trial granted.
Moses, C. J., and Willard, A. J., concurred.