Black Eagle Mining Co. v. Conroy

• Decision Date: 13 November 1923
• Docket Number: Case Number: 14347
• Citation: 94 Okla. 199,221 P. 425,1923 OK 945
• Parties: BLACK EAGLE MINING CO. v. CONROY et al.
• Court: Oklahoma Supreme Court

1923 OK 945

221 P. 425

94 Okla. 199

BLACK EAGLE MINING CO. v. CONROY et al.

Case Number: 14347

Supreme Court of Oklahoma

Decided: November 13, 1923

Syllabus

¶0 1. Corporations -- Shares of Stock -- Status as Personalty.

Whenever the capital stock of any corporation is divided into shares, and certificates therefor are issued, such shares of stock are personal property.

2. Same -- Certificate of Stock as Evidence of Property.

A certificate of stock in a corporation is merely the paper representative of an incorporeal right, and stands on a footing similar to that of other muniments of title. It is not the property itself, but is merely the symbol or paper evidence of the property, shares of stock.

3. Executors and Administrators--Situs of Property--Shares of Corporate Stock.

For the purpose of administration, the situs of shares of stock in a corporation, as evidenced by certificates of stock, is in the state in which the corporation was organized and has its place of business.

4. Same -- Estate of Nonresident -- Right of Creditors to Local Administration.

Where a nonresident died, owning shares of stock in a corporation organized under the laws of this state and having its principal place of business in this state, and foreign administration acquired possession of the certificates of stock, the same does not affect the rights of creditors to have an administrator of the estate of said nonresident appointed in this state, who will have jurisdiction over said shares of stock, which may be subjected to payment of the indebtedness of the deceased, in this state.

Verne E. Thompson, for plaintiff in error.

A. C. Towne and E. C. Fitzgerald, for defendants in error.

JARMAN, C.

¶1 This was an action in the district court of Ottawa county by Essie Conroy, M. T. Long, and J. A. Long against the Black Eagle Mining Company, a corporation, for damages for the alleged conversion of certain shares of stock. The cause was tried to the court without a jury and judgment was rendered for the plaintiffs in the sum of $ 701, from which the defendant brings error. The cause was submitted upon an agreed statement of facts, the material portion thereof being as follows:

"The Black Eagle Mining Company is a corporation organized under the laws of Oklahoma and having its headquarters and principal place of business at Miami, Ottawa county, Oklahoma, and the books and records of the corporation and of the shares of stock are kept at Miami; that Jane McSpadden, nee Russell, owned 50 shares of stock in the Black Eagle Mining Company of the par value of $ 10 each and held Stock Certificate No. 90 issued by the company for said stock; that she owned no property in Oklahoma except this stock; that Mrs. McSpadden was a resident of and died in Sebastian county, Arkansas, in 1920 as the owner of said shares of stock and at the time of her death she had physical possession of the stock certificate; John Conroy was appointed in Sebastian county, Arkansas, as administrator of the estate of Mrs. McSpadden, who took possession of this Stock Certificate and after the estate was administered upon, said Stock Certificate was distributed under orders of the court to the plaintiffs, Essie Conroy, M. T. Long and J. A. Long, sole heirs of Mrs. McSpadden. While administration was pending in Sebastian county, Arkansas, an application was made in the county court of Ottawa county, Oklahoma, by a creditor of Mrs. McSpadden residing in Ottawa county, Oklahoma, for the appointment of an administrator of the estate of Mrs. McSpadden, and Steen M. Johnson was appointed by the county court of Ottawa county, Oklahoma, as such administrator, who filed a petition to procure an order from the county court of Ottawa county to sell the shares of stock of Mrs. McSpadden in the Black Eagle Mining Company for payments of debts due in Ottawa county, said order was granted and the stock was offered for sale and was bid in by J. B. Pinnell and C. H. Pinnell, doing business under the firm name of Pinnell Brothers, for a cash consideration of $ 350, which sale was confirmed and approved by the county court of Ottawa county, Oklahoma, and an order was made by said court directing that the Black Eagle Mining Company issue certificates to Pinnell Brothers for said stock, which was done."

¶2 The defendant contends that the shares of stock of Mrs. McSpadden in the Black Eagle Mining Company are personal property and that the situs of this property, for administration purposes, is in Ottawa county, Okla., the domicile of the corporation. The plaintiffs concede that the shares of stock are personal property but contend that the situs of said property is at the residence of the owner, which was in Sebastian county, Ark., and as the stock certificate was in the physical possession of the owner, Mrs. McSpadden, in Sebastian county, Ark., at the time of her death and passed into the physical possession of the plaintiffs, as heirs, that said plaintiffs became the owners of the shares of stock represented by said certificate.

¶3 The main question presented is whether the county court of Ottawa county, Okla., had jurisdiction to administer on the shares of stock of Mrs. McSpadden in the Black Eagle Mining Company. If the county court of Ottawa county had such jurisdiction, then it is by virtue of the third subdivision of section 1088, Comp. Stat. 1921 (6193, Rev. Laws 1910), which provides that letters of administration may be granted in any county of the state of Oklahoma, in which any part of the property or estate of the deceased may be, where the decedent died out of the state and was not a resident thereof at the time of his death. In order to determine this question it is necessary to ascertain whether the shares of stock of Mrs. McSpadden in the Black Eagle Mining Company are property in Ottawa county, Okla. In the outset, it is important to note the language used by the statute in defining shares of stock, which is as follows:

"* * * 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," etc. Section 5318, Comp. Stat. 1921.

¶4 It will be observed that it is the shares of stock that are personal property and not the certificates of stock. There is a distinction between a stock certificate and a share of stock. The certificate is merely the evidence of the ownership of stock, just as a note is the evidence of an indebtedness. "A stock certificate is merely the paper representative of an incorporeal right, and stands on a footing similar to that of other muniments of title. It is not in itself property, but is merely the symbol or paper evidence of property; hence the proprietory right may exist without a certificate." 10 Cyc. 588. It is immaterial, therefore, where the stock certificate is located; the thing we are concerned with is the location or domicile of the shares of stock. By section 5318, Comp. Stat. 1921, shares of stock are defined as personal property. In enacting this statute, the Legislature was acting for Oklahoma, and since shares of stock are personal property in Oklahoma, the county courts of this state have jurisdiction to appoint an administrator of the estate of a nonresident who dies owning stock in an Oklahoma corporation. It is well settled that shares of stock may, for certain purposes, have a situs at two separate places at the same time, such as rights to title, taxation, etc. 2 Cook on Corporations (7th Ed.) 363. We are dealing with shares of stock as property for the purpose of administration, separate and apart from its owner. Shares of stock are a peculiar kind of personal property, and are unlike other classes of personal property in that the property right of shares of stock can only be exercised or enforced where the corporation is organized and has its place of...