Haynes v. Brown

Opinion of the court by Burford, C. J.: 'The contention of plaintiff in error is that the court erred in sustaining the demurrer to the evidence. We think there was no error in this. The written agreement is an executory contract; all of its conditions are to be performed in the future. Haynes agreed to sell Miss Brown 20 shares of stock in a corporation; he was to transfer and assign the stock to her and procure its transfer upon the books of the company; she was then to pay him $2000; they each deposited $500 to be forfeited to the other in case of failure to perform the agreement. The plaintiff alleged in his petition the ownership of the stock, the execution of the written agreement, the assignment of the certificate of stock, the transfer on the books of the company, the tender or delivery of the certificate and its refusal and the refusal to pay the $2000. The delivery of the stock was a condition precedent to his right to recover. It is contended that the. transfer of the shares of the stock on the books of the company passed the legal title and entitled him to recover. This might be so were it not for the provisions of our statute which prescribes the mode of assignment of shares of stock *393 and delivery is made one of the essential elements of a legal transfer. In section 957, art. 2, chap. 18, Wilson’s Statutes, 1903, it is provided: ‘‘Whenever the capital stock of any corporation is divided into shares and certificates therefor are issued, such shares of stock are personal property and may be transferred by endorsement by the signature of the proprietor or his attorney or legal representative, and delivery of the certificate; but such transfer is not valid except between the parties thereto until the same is so entered upon the books of the corporation as to show the names of the parties by and to whom transferred, the number ■ or designation of the shares, and the date of the transfer.” Under this statute, to make an absolute transfer of stock certificates or shares of stock, there must be an endorsement signed. The petition was drawn and the case tried upon the theory that the plaintiff had made valid transfer of the legal title to the shares of stock, and hence, was entitled to recover the purchase price named in the contract. But the petition was fatally defective'on this theory—it omitted the necessary and material averment of delivery of the certificate of stock. Delivery was a condition precedent to the right to recover the agreed price. The petition averred an offer to deliver and this made the petition good for the recovery of damages for breach of the buyer’s agreement to accept if there had been any .damages alleged. There is not even a general averment of damages. The plaintiff having failed to make an actual delivery of the certificates of stock, before he could recover the contract or purchase price, it was incumbent on him to both plead and prove not only an offer to deliver and refusal to accept, but that he was able, willing and ready to *394 deliver the stock at all times, or offer some valid excuse for his inability to keep good his offer to deliver. Upon the trial the plaintiff in error adhered to the theory that delivery of the certificate of the stock was not necessary to entitle him to recover the contract price of the stock and did not offer any evidence of the value of the stock or the price for which it could be sold, so as to fix any basis for the assessment of damages. The suit was prosecuted as one to enforce the contract and not as one to recover damages for the breach of a contract. The trial court held that the case fell within the rule announced by this court in the case of Mansur-Tebbetts Co. v. Willett, 10 Okla. 383, and we think this correct in several particulars. In so far as the contract sought to fix a penalty as the measure of damages it was to that extent void, and the plaintiff having failed to prove any actual damages by the breach of the contract, it was not error to sustain a demurrer to the evidence. The counsel for plaintiff in error is to be commended for the exhaustive, able and instructive brief filed in this case upon the subject of the transfer and the assignment of shares of stock in incorporated companies, but in view of the statute cited supra,, we are not able to reward counsel for his industry. The judgment of the district court of Kay county is affirmed, at the costs of plaintiff in error. Plainer, J., who presided in the court below, not sitting; Gillette, J., dissenting; all the other Justices concurring.