Bercich v. Marye

By the Court, Belknap, J.: Judgment in the alternative was rendered against ,the defendant for the restitution of five shares of the capital stock of the Belcher Silver Mining Company and twenty shares of the capital stock of the Caledonia Silver Mining Company, [316] or the value thereof, and damages, under section 202 of the Practice Act. The shares were transferred in blank and were stolen from the plaintiff. The defendant is a broker, engaged in buying and selling mining stocks. He received the certificates stated in the usual course of his business from a stranger, sold them upon commission and paid him the proceeds. The first objection Made by the appellant is that certificates of stock should be treated as negotiable instruments, and the defendant being a bona fide holder for a valuable consideration no recovery can be had against him. By the statutes of California under which the Belcher and Caledonia Silver Mining Companies were incorporated, it is enacted: “The stock of the company shall be deemed personal estate, and shall be transferable in such manner as may be prescribed by the by-laws of the company; but no transfer shall be valid, except between the parties thereto, until the same shall have been so entered on the books of the company as to show the names of the parties, by and to whom transferred, the number and designation of the shares, and the date of the transfer. 1 Hittell’s Gen. Laws, p. 148, Sec. 9. This restriction upon the transfer of stock determines the question of negotiábility adversely to appellant. The legal title to the shares, except as between the parties, can be acquired only by transfer upon the books of the corporation. Any other form of assignment is merely equitable as against the corporation and is subject to its liens or claims. Union Bank v. Laird, 2 W. 390; Shaw v. Spencer, 100 Mass. 382; Mechanics' Bank v. N. Y. & N. H. R. R. Co., 13 N. Y. 599. It is next objected that as the defendant was the innocent agent of the person from whom he received the shares of stock, without knowledge of the felony, no judgment should have been rendered against him. It is well settled that agency is no defense to an action of trover, to which the present action is analogous. In applying this doctrine the [317] supreme judicial court of Maine said: “If the principal is a wrong-doer, the agent is a wrong-doer also. A person is guilty of a conversion who sells the property of another, without authority from the owner, notwithstanding he acts under the authority of one claiming to be the owner, and is ignorant of such person’s want of title. Kimball v. Billings, 55 M. 147; Koch v. Branch, 44 Mo. 543; Hoffman v. Carow, 22 Wend. 285. In ascertaining the measure of damages the court allowed the market value of the stock at the date of conversion. Such is the rule in trover; but this is a statutory action for the return of the property or its value in case a delivery cannot be had, and damages for the detention. Upon failure to return the property in specie the statute provides for the indemnification of the owner. The value of the stock at the day of trial, together with the dividends that have been paid upon it, as damages for the detention, is the only complete indemnity in such case. O’Meara v. North American M. Co., 2 Nev. 112; Boylan v. Huguet, 8 Nev. 355, and cases there cited. Eor this the judgment must be reversed and a new trial granted. It is so ordered.