Court Opinion

ID: 7097711
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:12:41.381768+00
Date Added: 2024-06-11T16:13:18.378686
License: Public Domain

Seevers, J.
I. It is assigned for error that the finding of facts is not sustained by the evidence. Counsel in their argument, however, say that the “evidence is embodied in the abstract more for the purpose of giving a clearer understanding of the case, and presenting certain facts not found, than to dispute or question the facts as found by the court, as we concede the findings, aside from a few particulars, which we will notice in the argument, in the main correct.”
So far as we can discover, it was not claimed in the court below that the finding of facts was not full and complete. The abstract fails to disclose that the court below was requested to find any additional fact. Nor have we been able to discover in the argument of counsel Avhat fact or facts found by the court is not fully sustained by the evidence. Under these circumstances the law of the case must be determined solely with reference to the facts found, and we cannot undertake to ascertain wherein the evidence does not sustain the finding when counsel have been unable or unwilling to undertake the task. The assignment of error just referred to must, therefore* be deemed waived.
1. corpora-officer: notice, II. That the defendant was a surety, entitled to his full rights as such, and that it was the duty of the plaintiff, if it possessed the requisite means, power and knowh edge to protect him, seems to be conceded by counsel for the appellee. ¥e will first consider whether the plaintiff had notice or knowledge of the rights claimed by the defendant, or in other words did it have notice of the arranger ment between defendant and Porter. It is clear, under the finding of facts, that as between defendant and Porter the stock was to “stand as security to the defendant for his indorsement or guaranty” of the note, and it is equally clear that the plaintiff or its officers had no notice or knowledge of this arrangement except the defendant and Porter, who then were respectively president and cashier of the plaintiff. Counsel for appellant insist the plaintiff* “ undertook and agreed at the time the defendant indorsed the note, that the stock should not be transferred, but should be held for defendant’s protection,” and many authorities are cited in support of this posi.*582tion. But this position is in direct opposition to the iinding of facts, and how can it be said that the plaintiff undertook and agreed the stock should not be transferred when it did not have notice or knowledge of the arrangement between the defendant and Porter, except as above stated.
2>_._. • III. Did the knowledge of the defendant and Porter constitute knowledge to the bank? The arrangement was a private one between defendant and Porter, in which the bank had no interest whatever except as a discounter of the note. The proposition is rather a strange one, if the defendant and Porter could act for themselves and the bank in and about the same transaction at the same time, and equally protect the interest of both; or- that, while so acting, they could, by notice to each other, bind the bank hand and foot, without at least advising with or notifying any other officer of the institution. Besides this, Porter voted the stock at the stockholders’ meetings, with the knowledge and consent of the defendant. The conduct of the latter was such as to induce the other officers of the bank to believe that Porter was the absolute and entire owner of the. stock. Under the facts found we have no hesitation in holding that notice to the defendant and Porter, or rather their knowledge of the transaction, did not constitute notice to the bank. Such rule seems to be sustained by the decided weight of authority. Washington Bk. v. Lewis, 22 Pick., 24; Farmers' & Cit. Bk. v. Payne, 25 Conn., 444; Farrel Foundry v. Dart, 26 Conn., 376; Seneca County Bank v. Neass., 5 Denio, 329; Winchester v. B. & S. R. R. Co., 4 Md., 231; Platt v. Birmingham Axle Co., 41 Conn., 255.
The only case in seeming conflict with the foregoing to which our attention has been called is Scripture v. Francestown Soapstone Co., 50 N. H., 521, but even this case does not sustain-the claim made by the defendant. In that case the party seeking to avail himself of notice to the officer was an outside party, in no way connected with the coiqmration; while here the defendant seeks to avail himself of his own knowledge, or, as it were, of notice to himself, and by this bind the corporation. Such doctrine we are unwilling to sanction.
*583o.-JtlcluS* fer of stock, IY. Had the plaintiff the means or power to protect the defendant? The by-law of the plaintiff referred to in the nineteenth finding provides “that certificates of ° stock shall be signed by the president and cashier, with the seal of the corporation attached, * * and registered in a book kept for that purpose. Certificates of stock may be assigned by indorsement on the back, bnt no transfer of stock shall be valid except when made on the books of the bank, and upon the return of the certificate to be transferred.”
The former owner of the stock, Mr. Ochs, delivered the certificate held by him to Porter, and the stock was assigned by the former to the latter by means of what is termed á transfer ticket, and an entry thereof was made in the transfer book of the bank. No certificate was ever issued to Porter, and the Ochs certificate was canceled, or at least the defendant does not claim that it was ever assigned to him.
It is useless to consider what' would- be the rights of the defendant if a certificate had been executed to Porter, and by him assigned to the defendant, and no transfer entered on the books of the bank, for no such state of facts is presented by the finding.
As between Porter and the corporation he was the undoubted owner of the stock. No certificate was required to perfect his title. It mattered not whether one ever was issued. He being such owner, and the bank not chargeable with notice of defendant’s rights, Porter had the right to sell and transfer said stock, and the bank was bound to recognize his transferee as owner. "Whatever title Porter had was obtained by Smith and Whitaker.
It seems to us that the transfer on the books of the bank was sufficient to make Porter’s title full and complete. A stock certificate would be only additional evidence of his title, but it was by no means essential. The foregoing views are supported by the following authorities: Agricultural Bank v. Burr, 24 Me., 263; Dutton v. Conn. Bank, 13 Conn., 493; N. Y. & N. H. R. R. Co. v. Schuyler, 34 N. Y., 30; Bank of Com*584merce’s Appeal, 73 Penn. St., 59; Chouteau Sprung Co. v. Harris, 20 Mo., 383.
The authorities cited by counsel for appellant are not applicable because they have reference to cases where the certificate had been assigned and no transfer made on the books of the corporation, or where the certificate had been assigned to one and the transfer on the books to another, or rights had been acquired under the assignment of the certificate and the corporation refused to recognize the transferee as the holder.
The Turnpike Co. v. Bedla, 45 Ind., 1, is not in conflict with the views herein expressed.
Y. It is said by counsel that “Whitaker had actual knowledge of defendant’s rights before he paid a farthing in the way of purchase.” In this counsel are mistaken as will appear by reference to findings 13 and 14.
Conceding that the bank was notified of defendant’s rights and Whitaker also before the latter had paid but $1,200 of the purchase price of the stock, and also that the value of the stock was $2,000, still these matters would not render the plaintiff liable to the defendant for the difference between $1,200 and $2,000; for the reason, if no other, that the plaintiff could not have prevented the transfer, and consequently could not be held liable for that which it had no power to prevent.
Affirmed.