Scherck v. Montgomery

Calhoon, J., delivered the opinion of the court. The appellee, Montgomery, in his bill, charges that Scherck, the appellant, was a subscriber for twelve shares, at the par value of $100 each, in an oil company corporation, and had paid in $800 of the $1,200, and had agreed to pay the other $400. That Montgomery bought, through his agent, J. F. [436] Miazza, these twelve shares from Scherck at a premium, giving him $1,620 for them, Scherck agreeing to pay in the $400 balance to the company, which he did afterwards pay. That, evidencing the transaction, Mr. Scherck executed the following instrument: “Brookhaven, Miss., July 10th, 1902. Received of J. F. Miazza $1,620 for twelve shares of stock I hold in Brook-haven Progressive Cotton Oil Company (which is fully paid up). [Signed] R. T. Scherck.” And at the same time executed the following instrument: “Brookhaven, Miss., July 10th, 1902. R. F. Young, secretary: Please issue twelve shares of stock I own in Brook-haven Progressive Cotton Oil Company to J. F. Miazza, having sold same to him: [Signed] R. T. Scherck. ’ ’ That R. F. Young was the secretary of the oil company. That Miazza transferred his rights to Montgomery by a written instrument, which is set out in the bill. That Montgomery applied to the company for the stock, and was refused on the ground that Scherck had telephoned that it be not done. The bill makes Scherck and the company parties, and prays adjudication that Montgomery is the “legal and equitable owner ’ ’ of this stock, that Scherck is without interest in it, that any pretense of claim to it by him be canceled, and that a mandatory injunction issue to the company requiring it to issue the stock to Montgomery, and for general relief. To this bill a demurrer is tiled, which the court below overruled, and Mr. Scherck appeals. It is plain that, if Mr. Scherck had never transferred, and if he had, after the payment of his whole stock subscription, demanded his certificates of stock, and been refused, he could have sustained mandamus at law for their issuance. Granted this, it is equally plain that his immediate, or remote, transferee would have the same right, unless there was some counter-claim in the chain of transfer in the way. Now his immediate, or remote, transferee, having his right, whether it [437] be called legal or equitable, knowing that the ground of refusal to issue was based on the telephone message not to issue, had an equitable remedy for mandatory injunction to issue the stock,- with the objector as a party, in order that his objection might be heard and adjudicated. The contract between Scherck and Miazza was clearly an executed contract. Specific performance, as 'between them, is not contemplated by the bill. There is no adequate remedy at law. It is immaterial whether Montgomery could buy other stock on the market. He had the right to that stock which he had bought, if he had any right at all, and that right, or the lack of it, was determinable by evidence. The chancery court was the proper , tribunal to apply to in order to dispose of any objection Scherck inight make to the issuance of the stock to Montgomery. But for Scherck’s telephone message, the company would have cheerfully issued the stock, as the bill avers. • . • We cannot support the contention' that a sale of the stock, as between the parties, cannot be made except by actual transfer on the books of the company. This is for the convenience of the corporation, and it has, in this suit, full opportunity to give any valid reason why it should not make the actual transfer. The design of code, § 844, and the amendment (acts 1894, p. 46), was simply to protect creditors, and fix the stockholders’ liability for unpaid subscription. The transfer on the sale is good as between the seller and the purchaser. Timberlake v. Shippers’ Compress Co., 72 Miss., 323 (16 South., 530). Affirmed and remanded, with thirty days to appellant to a/nswer after mandate filed below.