Court Opinion

ID: 7372410
Source: CourtListenerOpinion
Date Created: 2022-07-28 00:18:45.050392+00
Date Added: 2024-06-11T16:20:56.763561
License: Public Domain

On Rehearing.
The reinsistence upon the motion to dismiss the appeal is without merit. Emphasis is placed largely upon the asserted noncompliance with Equity Rule 56 in that there was failure of the court reporter to file the transcription of the evidence with the register and consequent denial of appellee’s counsel of the right to examine the .reporter’s transcript. Rule 56 makes no such requirement, but only that .the transcript of the reporter be “filed in the cause”. Counsel mistakenly read into the rule the provisions of Code, Title 7, § 827, as amended, which by its terms applies only to cases at law.
Counsel, also, take issue with our conclusion that the Uniform Stock Transfer Act (Code 194b, Title 10, § 48) is not controlling in this case. The contention is that the cases cited by us as authority for the holding that there may be a valid equitable assignment of corporate stock have been rendered of none effect, having been decided anterior to the adoption of the Uniform Act in 1931. While we thought the Act did not apply to the peculiar facts and circumstances of this case, and are of the same opinion still, we were perhaps remiss in failing to bring forward the holdings of later cases. Sufficient to show that the rule of equitable assignment of corporate stock has not been abrogated by the Uniform Act, we need only to refer to our decision in Nashville Trust Co. v. Cleage, 246 Ala. 513, 21 So.2d 441, decided in 1945. .There we dealt with a situation analogous to that here involved, an effort by one not in possession of the stock certificate to establish ownership of the stock. In construing the Uniform Act, we gave expression to these pronouncements:
The purpose of the Uniform Stock Transfer Act “seems to be to regulate transfers as respects the rights of living persons dealing among themselves in certificates of stock, and the creditors of stockholders. The Act necessarily gives value to the certificate of stock and its possession and ownership as between claimants. Section 48 et seq., Title 10, Code. It is therefore more of value than it was before the adoption of the Act. Jones v. State, 236 Ala. 30, 182 So. 404. * * * But it does not mean that the stockholder is not still the owner of an interest in the corporation, as theretofore.”
In the Jones case above cited, which too arose after adoption of the Act, we said:
“With reference to the contention that certificates of stock are not property, we cannot agree with petitioner. We are not unmindful of our cases holding that it is the share of stock, and not the certificate which is the property right subject to levy and sale under execution. * * * But certificates are evidence of the ownership of shares and are valuable for that purpose and as a' satisfactory method by which their ownership may be conveyed.”
In Nashville Trust Co. v. Cleage, supra, we further said:
“Although the legal title to the certificate of stock is controlled by the law where the transfer was made, which involves a delivery of the certificate under the Uniform Stock Transfer Act, we doubt not that stock ownership in a domestic corporation has such a situs in Alabama as that the person owning it may by a transaction with another person occurring here create in the latter, as between themselves and their personal representatives, rights in it enforceable according to established and applicable principles in this State, although the personal presence of the stock certifi*694cate was absent at the time of the transaction and was never delivered in connection with it; but to be enforceable in equity the incidents of equitable principles and procedure which would generally be applicable must concur.”
To like effect are Warr v. Collector of Taxes, 234 Mass. 279, 125 N.E. 557; Whitney v. Nolan, 296 Mass. 419, 6 N.E.2d 386; and Reinhard v. Sidney’ B. Roby Co., 110 Misc. 152, 179 N.Y.S. 781.
The following quotation from Whitney v. Nolan, supra, is quite apposite:
“Where the owner of stock, intending to make an absolute transfer, for lack of indorsement or because of some other defect in the mode of transfer, fails to transfer the legal title, it is held that by the transfer the equitable title goes over to the transferee * * * even though the provisions of that act [Uniform Stock Transfer Act] relative to transfers are not complied with, and though the act purports to state the only method of transfer.”
It seems manifest that if we should adopt the strict construction of the Act inveighed on us by the appellee, all equitable principles bearing on the question would be abrogated, with the result that situations might arise where the true ownership of stock might never become vested. Such would have been the appellee’s situation here if he had never assigned his shares to his mother, because he certainly never had any certificate delivered to him by his father.
From the foregoing it results as our judgment that the application should be overruled.
So ordered.
Opinion Extended and Application for Rehearing Overruled.
LIVINGSTON, C. J., and MERRILL and HARWOOD, JJ., concur.