I am not content with the opinion of Justice Bird. My views are expressed in Peckinpaugh v. H. W. Noble Co., ante, 464. I only care to supplement what I there said by the following quotation from Union Trust Co. v. Oliver, 214 N.Y. 517 (108 N.E. 809):
"While certificates of corporate stock lack some of the attributes of commercial paper and are, therefore, sometimes denominated only quasi negotiable, yet parties who deal in them innocently have long been protected by the law upon an analogous principle. Jarvis v. Manhattan Beach Co., 148 N.Y. 652 (43 N.E. 68, 31 L.R.A. 776, 51 Am. St. Rep. 727). Nearly half a century ago the Supreme Court of the United States said in reference to such instruments:
"'It is no less the interest of the shareholder, than the public, that the certificate representing his stock should be in a form to secure public confidence, for without this he could not negotiate it to any advantage. It is in obedience to this requirement, that stock certificates of all kinds have been constructed in a way to invite the confidence of business men, so that they have become the basis of commercial transactions in all the large cities of the country, and are sold in open market the same as other securities. Although neither in form or character negotiable paper, they approximate to it as nearly as practicable.' Bank v. Lanier, 11 Wall. 369, 377.
"As was said by the same court in National Safe Deposit Co. v. Hibbs, 229 U.S. 391 (33 Sup. Ct. 818), these principles are well known to business men and are constantly acted upon by them. So where the owner of stock in a corporation places his stock certificates indorsed in blank in the hands of another to dispose of them for a prescribed purpose and the agent, disregarding the direction of his principal, pledges the certificates as a security for a loan to himself, the owner is estopped from denying the lien acquired by the pledgees providing they acted in good *Page 484 faith and without notice of any limitation upon the authority of the agent. McNeil v. National Bank, 46 N.Y. 325 (7 Am. Rep. 341); Knox v. Eden Musee Americain Co., 148 N.Y. 441 (42 N.E. 988, 31 L.R.A. 779, 51 Am. St. Rep. 700).
"The essential features of Russell v. Telephone Co.,180 Mass. 467 (62 N.E. 751), closely resemble those of the present case. The plaintiff's testatrix had intrusted a certificate of stock, indorsed in blank, to a fraudulent agent, who, instead of using it for the designated purpose, obtained an advance from the defendant by giving the certificate in pledge. It was contended that as the agent had obtained possession of the certificate by fraud, it was obtained by larceny in the judgment of the law; but the court held that the rule that the property would not pass when the instrument was stolen was not based upon the name of the agent's crime, 'but upon the fact that in the ordinary and typical case of theft the owner has not intrusted the agent with the document and, therefore, is not considered to have done enough to be estopped as against a purchaser in good faith.' The court went on to say that in such a case the owner certainly has not done enough if the estoppel is based upon the principle that when one of two innocent persons is to suffer, the sufferer should be the one whose confidence put into the hands of the wrongdoer the means of doing the wrong. 'But in a case like the present the agent has been intrusted with the converted property, and it is totally immaterial whether, by a stretch which extends larceny beyond the true field of trespass, his wrong has been brought within the criminal law or not. The ground of the estoppel is present and the estoppel arises.' "
The decree is affirmed, with costs to defendants.
SHARPE, C.J., and STEERE, FELLOWS, CLARK, and McDONALD, JJ., concurred with WIEST, J. *Page 485
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