Court Opinion

ID: 8296400
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:07:53.686018+00
Date Added: 2024-06-11T16:44:05.723506
License: Public Domain

Cooper,, J.,
delivered the following dissenting opinion.
This case involves the relative rights of an assignee, by purchase or as collateral security, of stock in a •corporation, and of the attaching and execution creditors of the assignor, who have levied on the stock. Stock in a corporation, the property of an individual stockholder, is in the nature of a chose in action. Union Bank v. State, 9 Yer., 500; McLaughlin v. Chadwell, 7 Heis., 408; United States v. Cutts, 1 Sumn., 145; Rex v. Capper, 5 Price, 217; Erwin v. Oldham, 6 Yer., 185. A certificate of ‘stock is only evidence of the ownership of the shares mentioned therein. Shropshire Union Ry. Co. v. The Queen, L. R. 7 H. L., 509; Mechanics Bank v. N. Y. & N. H. R. Co., 13 N. Y., 627. Neither its assignment nor the assignment of the stock itself verbally, or in writing not on the books of the company, although it may be a valid sale, passes the legal title, but only an equity which, however,' like the right acquired by the assignment of a chose in action proper, will be recognized and sustained both at law and in equity. Mount Holly Co. v. Ferree, 2 C. E. Green, 117; Bank *35of Utica v. Smalley, 2 Cow., 770. Sucb stock Is now, by statute, declared to be personal property, and leviable by execution and attacbment. Code, secs. 1487, 3097.
In tbis State we have adopted the English rule that to perfect the right of an assignee of a chose in action, the title to which does not pass by delivery, as against a subsequent assignee or creditor of the assignor, notice must be given to the debtor. Clodfelter v. Cox, 1 Sneed, 339; Catron v. Cross, 3 Heis., 584; Allen v. Bain, 2 Head, 108; Carrigan v. Leatherwood, 3 Leg. Rep., 137. The principle upon which these decisions rest is, that the assignee must do some act in reference to such species of property which will be equivalent to the transfer of possession of personal property, the object in the requirement being to protect innocent third persons, and, it may be added, to secure the rights of creditors. The rule has been extended by analogy to assignments of equitable intei-ests In estates, real or personal. Foster v. Cockerell, 9 Bligh, 332. And to assignments of stock in a corporation or joint stock company. Martin v. Sedgwick, 9 Beav., 333; Union Bank of Manchester ex parte, L. R., 12 Eq., 354; Pinkerton v. Manchester etc. R. Co., 42 N. H., 424; Sabin v. Bank of Woodstock, 21 Vt., 353; Shipman v. Ætna Ins. Co., 29 Conn., 245.
The practical wisdom of this rule commends itself to our good sense, is in strict accord with the principles of our registration laws, and seems absolutely essential to the rights of execution and attaching creditors under our Code. If the rule were otherwise, *36an execution would lead to litigation, not satisfaction.. The law would keep the word of promise to the ear,, and break it to the hope.