Court Opinion

ID: 3808283
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:47:59.375287+00
Date Added: 2024-06-11T12:12:09.970327
License: Public Domain

The plaintiffs in error base their ground for reversal on what they claim to be the insufficiency of the amended petition, and the points relied on are stated as follows:
(1) The court erred in overruling the demurrer to the amended petition of the plaintiff below.
(2) The court erred in overruling the objections of the plaintiffs in error to the introduction of evidence under the amended petition. *Page 290 
(3) There was no equity in plaintiff's bill.
(4) That the judgment as rendered is contrary to law and not within the issues as defined by the pleadings.
The plaintiffs in error take the position that equity has no jurisdiction in the case, as made by plaintiff's amended petition, but that the suit is one at law, and cite numerous authorities in support of their contention. We cannot agree with the plaintiffs in error's contention that a suit in equity will not lie under the facts in this case. This is a suit for the recovery of certain stock which plaintiff claimed was the stock of M.W. Truitt in his lifetime and now belongs to the estate of M.W. Truitt, and she is suing for the specific stock. The defendant in error, plaintiff below, has cited a great many case which she contends supports her theory of the case. We will refer to some of these cases that we think have a direct bearing on the suit at hand. Mr. Fletcher in his work on Corporations very clearly and correctly states the rule as follows:
"Instead of suing at law for conversion, the owner of stock which has been transferred by the corporation on its books under a forged or unauthorized assignment and power of attorney may maintain a suit in equity to compel the corporation to replace the shares on its books in his name, and issue to him a proper certificate, or, in the alternative, to recover a judgment for their value."
The Supreme Court of California had the question before it in the case of Herbert Kraft Co. Bank v. Bank of Orland et al.,65 P. 143. in the second paragraph of the case the court laid down the rule as follows:
"Where a party held stock of defendant bank as security, and the bank illegally levied an assessment thereon, and sold it for delinquency at public auction, the holder of the stock was not compelled to resort to a suit for damages for conversion, but could retain its security, and obtain relief in a suit in equity to compel the bank to recognize it as a stockholder, under a prayer for such relief as to the court may seem proper."
The entire opinion in this case tends to uphold defendant in error's contention. The Supreme Court of the United States in the case of Ermance de St. Romes v. Levee Steam Cotton-Press Company, 127 U.S. 614, in the second paragraph of the syllabus, lays down the rule as follows:
"If a corporation has, by negligence, canceled a person's stock, and issued certificates therefor to a third party, who has purchased it from one not authorized to sell it, the true owner is not bound to pursue said purchaser, but may call directly upon the corporation to do him justice by replacing his stock or paying him for its value."
And in the case of Casper v. Kalt-Zimmers Mfg. Co. et al., 149 N.W. 754, the Supreme Court of Wisconsin laid down the rule as follows:
"Assuming that such transfer of stock was tortious, she had two remedies. She could bring her action for damages for the value of her stock wrongfully converted, or she could bring an action to compel a reconveyance of her stock, or, failing in that, for damages. She therefore had at the time the wrong was committed a legal remedy and an equitable remedy for the same wrong."
In the case of Pennsylvania Company v. Franklin Fire Insurance Company, 181 Pa. 40, the Supreme Court of Pennsylvania had the same question here involved under consideration, and in the first paragraph of the syllabus they laid down the rule as follows:
"Equity has jurisdiction of a suit to compel a corporation to cancel a transfer of shares of stock which it has made on the faith of forged powers of attorney, and to reissue the stock to the real owner, or else pay the value thereof, since the corporation is a trustee of the shareholder to protect his title."
And in closing the opinion the court uses the following language.
"We affirm the jurisdiction of equity in this case on the ground that defendant is a trustee for its shareholder, the estate of Charles H. Baker, as to these 50 shares of capital stock; that its legal duty was not only to properly manage and protect the amount of capital contributed by Charles H. Baker, but also to protect his title thereto, so far as to permit no fraudulent or unauthorized cancellation of his certificate."
The following cases sustain the rule that in the kind of a case set out in plaintiff's amended petition a court of equity has jurisdiction: Vernon, G.  R. R. Co. Washington Civil Tp. ex rel. Deem (Ind.) 95 N.E. 599; Ryan v. Seaboard  R. R. Co. et al., 89 Fed. 397. A case very much like the case at bar was before this court in Litchfield v. Henson Oil Co.,53 Okla. 550, 157 P. 137. See, also, First National Bank of Sulphur Springs, Texas, v. J. B. Stribling et al., 16 Okla. 41,86 P. 512. The following authorities are, in our judgment, sufficient to sustain the jurisdiction of a court of equity. In fact, it seems to us that it was the only course that the plaintiff could have taken to accomplish what he desired. He owned the stock and the trustee of the corporation *Page 291 
wrongfully canceled his stock and issued other stock to a third party. The purpose, therefore, of the suit is to regain the specific stock which the trustee held, or compel the corporation to issue him the same amount of stock and to cancel the issue of stock to the third party. The trustee and the corporation had not only wrongfully transferred his stock, but has wrongfully canceled it, destroying his certificate, and he is seeking to have stock for a like amount issued to him, and to enjoin the corporation from juggling this stock any further. We think the judgment of the trial court was correct and should be affirmed.
By the Court: It is so ordered.