Suskin v. . Hodges

Barnhill, J. Tbe defendant demurs for tbat: (a) It appears upon tbe face of tbe complaint tbat tbe cause of action, if any, arose under tbe laws of tbe State of Maryland and tbe plaintiff fails to plead any Maryland law under wbicb tbe cause of action survives; and, (b) it appears upon tbe face of tbe complaint tbat tbe plaintiff never at any time transferred, assigned or delivered tbe certificates of preferred stock to anyone, from wbicb it is manifest tbat even if tbe defendant’s intestate secured from tbe Overall Company a certificate for tbe same amount of stock, sucb did not and could not affect, in any way, plaintiff’s stock, or bis legal right in reference thereto, or bis right to dividends tbereon. It is clear tbat tbe demurrer cannot be sustained for tbe reason first *335 assigned in tbe demurrer. When any question arises as to tbe law of any other state or territory, or of tbe United States, tbe courts of tbis State are now required to take judicial notice thereof. Cb. 30, Public Laws 1931. Does tbe statement of tbe plaintiff in bis complaint that be received tbe certificates of preferred stock and that be has never transferred or assigned tbe same so negative tbe other allegations in tbe complaint as to defeat bis alleged cause of action? Tbe deceased was a resident of tbe State of Maryland. Tbe alleged tort, if committed at all, was committed in tbe State of Maryland. That tbe plaintiff’s cause of action is controlled by tbe laws of that state is so well established that tbe citation of authority is not necessary. Under tbe laws of that state, title to a certificate and to tbe shares represented thereby can be transferred only, (a) by delivery of tbe certificate endorsed either in blank or to a specified person by tbe person appearing by tbe certificate to be tbe owner of tbe shares represented thereby; or (b) by delivery of tbe certificate and a separate document containing a written assignment of tbe certificate or a power of attorney to sell, assign or transfer tbe same or tbe shares represented thereby, signed by tbe person appearing by tbe certificate to be tbe owner of tbe shares represented thereby. Ch. 376, Laws of Maryland, 1927, which repeals and reenacts, in corrected form, sec. 51, Art. 23 of Bagby’s Ann. Code of Public General Laws of Maryland. It is further provided that: “Tbe provisions of tbis section shall be applicable, although tbe charter or article of incorporation, or code of regulations, or by-laws of tbe corporation issuing tbe certificate and tbe certificate itself, provide that tbe shares represented thereby shall be transferable only on tbe books of tbe corporation, or shall be registered by a registrar, or transferred by a transfer agent.” Tbe provision contained in tbe Uniform Stock Transfer Act for tbe issuance of a new certificate to replace one lost or destroyed is not contained in tbe Maryland statute. Tbe only provision in its statute in relation to lost or destroyed certificate is contained in sec. 78 of Art. 23, Bagby’s Code, and is as follows: “Tbe directors of a corporation may, unless otherwise provided in tbe by-laws, determine tbe conditions upon which a new certificate of stock may be issued in place of a certificate which is alleged to have been lost or destroyed. They may, in their discretion, require tbe owner of such certificate or bis legal representative to give bond, with sufficient surety, to tbe corporation to indemnify it against any loss or claim which may arise by reason of tbe issue of a certificate in place of tbe missing one.” It appears from tbe allegations in tbe complaint that tbe three certificates for a total of fifty shares of tbe preferred stock of tbe Standard *336 Overall Company, being tbe stock in controversy, were issued and delivered to tbe plaintiff on or about 15 September, 1919, and tbat tbe plaintiff bas not, at any time since receipt by bim of said stock, transferred or assigned tbe said certificates, or either of tbem, to any person. He now owns tbe stock and bolds tbe certificates issued to bim. His possession is a continuing affirmation of ownership and bis power over tbe stock until withdrawn or surrendered in lawful manner. Holbrook v. New Jersey Zinc Co., 57 N. Y., 616. Tbe certificates and tbe shares represented thereby are transferable only upon surrender duly endorsed. They have never been endorsed or transferred. Therefore, be bas parted with no interest therein and no action by tbe deceased or tbe corporation bas or can deprive bim thereof. A corporation which proceeds to transfer stock “in tbe absence of tbe original certificate,” as here, does so “at its own peril” and tbe real owner of tbe stock, evidenced by such certificate, loses nothing thereby. Supply Ditch Co. v. Elliott, 10 Colo., 327, 15 Pac., 691, 3 Am. St. Rep., 586; Holly Sugar Corp. v. Wilson, 75 Pac., 149. Under tbe Uniform Stock Transfer Act, tbe principal provisions of which have been adopted by Maryland, tbe certificate is tbe property owned by tbe stockholder and bis property interest in tbe corporation can be transferred only by endorsement and delivery of tbe certificate as provided by statute. Plaintiff’s ownership of tbe certificates for "shares of preferred stock in a Maryland corporation is unaffected by anything done by tbe deceased or by tbe corporation. See Rosler v. General Gas, etc., Corp., 255 N. Y. S., 342; O'Dwyer v. Verdon, 100 N. Y. S., 588; 7 R. C. L., 271. It may be tbat tbe Standard Overall Company, acting under tbe provisions of section 78, Article 23, Bagby’s Code, bas adopted a method by which, and bas prescribed tbe conditions upon which, a new certificate of stock may be issued in place of a certificate which is alleged to have been lost or destroyed and tbat tbe deceased undertook to have tbe certificates issued to tbe plaintiff transferred to bim on allegation tbat they bad been transferred to bim and then lost or destroyed. If so, tbe by-laws and charter provisions of tbe corporation not being a public statute or law of Maryland, tbe plaintiff must plead tbe regulations of tbe corporation and tbe procedure thereunder by tbe deceased in obtaining apparent title to bis stock. This be fails to do. In tbe absence of such plea — and we do not bold tbat it would be effective to constitute a cause of action' — -plaintiff bas failed to allege facts sufficient to show tbat bis property rights in bis stock, or in tbe dividends accruing thereon, have been invaded by tbe deceased. His rights against tbe corporation, upon tbe allegations contained in tbe complaint, have in no wise been impaired. *337 Tbe statement in Suskin v. Trust Co., supra, that “the action can be maintained only against the personal representative of the deceased” has reference to the Maryland executors and does not affect our present position. Plaintiff’s right to maintain an action against the personal representative of the deceased was not there presented. At most, the statement is mere dictum. The judgment of the court below is Reversed.