Davis v. Nat'l Eagle Bank

• Decision Date: 04 February 1901
• Parties: DAVIS et al. v. NATIONAL EAGLE BANK.
• Court: Rhode Island Supreme Court

50 A. 530

DAVIS et al.

v. NATIONAL EAGLE BANK.

Supreme Court of Rhode Island.

Feb. 4, 1901.

Action by Davis & Dexter against the National Eagle Bank. Judgment for defendant. New trial denied 49 Atl. 1135.

Van Slyck & Mumford, for plaintiffs.

David S. Baker and L. A. Waterman, for defendant.

ROGERS, J. This is an action on the case to recover damages for defendant's refusal to allow transfer to be made on its books of 63 shares of its capital stock, and for the alleged unlawful mutilation by defendant of a certificate of 63 shares of said capital stock at the time of the request by plaintiffs for the transfer of said stock. There are also counts in trover for the conversion of the stock and of said certificate, and also for the refusal to issue a new certificate on demand, and for the unlawful mutilation of the old certificate. The plea is the general issue.

From the evidence I find the following to be facts: That in 1894 one Charles J. Sweet died, possessed of 63 shares in the capital stock of the defendant bank, leaving a last will, which has been duly approved and allowed, wherein his son, Charles R. Sweet, was nominated as executor, and said son has been duly appointed and has qualified as such executor. That In January, 1897, said Charles R. Sweet applied to the plaintiffs, who are partners and brokers, to negotiate a loan for him for $2,500, to be used in his own private business. That said plaintiffs, as such brokers, negotiated such loan, said sum being borrowed of the Fifth National Bank, of which William R. Dunham then was and still is the cashier. That said Charles R. Sweet gave said Fifth National Bank his promissory note for said sum of $2,500, payable to his own order, and by him indorsed, said signature and indorsement being by his own individual signature, and hot as executor. That said note was expressed to be secured by a pledge of 63 shares of National Eagle Bank stock. That said Charles R. Sweet then gave to said William H. Dunham, as cashier, as aforesaid, a certificate of stock, stating on its face that the estate of Charles J. Sweet, of Providence, R. I., was the owner of 63 shares of the capital stock of the National Eagle Bank, transferable only at the bank in person or by attorney on the surrender of said certificate: That on the back of said certificate said Charles R. Sweet, signing as "Charles R. Sweet, executor for estate C. J. Sweet," transferred to "Wm. R. Dunham, cashier, as collateral security," the 63 shares of the capital stock of the National Eagle Bank, represented by said certificate. That said plaintiff Davis witnessed said signature of said Sweet so made as executor, and that said plaintiff Dexter filled up the transfer so signed by said Sweet That it is admitted by the plaintiffs in their brief that: "This loan was negotiated through the plaintiffs, who had full knowledge that the money borrowed was to be used by Sweet in his own business, and that he was pledging stock to which he held title as executor. The plaintiffs, however, knew that Charles R. Sweet was the son of Charles J. Sweet, and beneficially Interested in his estate, and were informed by Charles R. Sweet at the time of. the transaction that the only other person interested was his sister; that she was aware of the loan and pledge, and had consented to it The note given for the money borrowed at this time was not paid at maturity, but was renewed from time to time, and the loan was also increased, other notes being given, but all secured by the original pledge." I further find from the evidence: That said Charles R. Sweet's sister was not then aware of the loan and pledge, and had not consented to it, and that she never has consented to it. Further, that said Dunham knew at the time of making said loans that said shares belonged to Charles J. Sweet's estate, and that Charles R. Sweet was obtaining said loan for his own individual use, and that said plaintiff Davis and said Dunham talked together in regard to that, and as to whether it was right to lend on such security. That neither said Dunham nor said plaintiff Davis ever inquired of said Charles R. Sweet's sister, nor of any one else, as to the truth of said Charles R. Sweet's statement in regard to the sister's knowledge of and consent to the loan and pledge. That said Dunham, without any other transfer to the Fifth National Bank, or to himself as cashier, than the one set forth as collateral security, sent that transfer to the National Eagle Bank, whose cashier, Charles F. Sampson, gave a certificate that William R. Dunham, cashier, was the owner of 63 shares in said National Eagle Bank. That subsequently said last-named bank notified said Dunham that a mistake had been made by omitting in said last-named certificate the words "as collateral security," so that it would read "that Wm. R. Dunham, cashier, as collateral security, is the owner," etc., and requested the return of said certificate for correction. That said certificate never was returned for such correction. That neither said plaintiffs Davis nor Dexter were informed, prior to their request to the defendant to transfer said 63 shares to them on February 18, 1898, of any such notice or request. That thereafterwards, to wit. two or three weeks prior to February 18, 1898, said plaintiff Davis met said Dunham, and bad an iuterview with him, in which the following occurred, to use said Davis' own words: "I cautioned him, as a matter of precaution to the bank. I says to him: 'I notice in the paper Charles R. Sweet is in trouble.' I says, 'You want to look out,' or something like that. He says: 'We are all right. I have had the stock transferred, and it is all clear, and we are all right'" That said plaintiff Davis, as soon as he went to his office, repeated that conversation to said plaintiff Dexter. That on February 18, 1898, a little before 3 p. m., said plaintiffs received an order from Dunham, cashier, to sell 63 shares of National Eagle Bank at 48 net That the certificate of stock sent said plaintiffs by said Dunham expressed on its face that William R. Dunham, cashier, was the owner of 63 shares, and on the back thereof the transfer was dated and signed Wm. R. Dunham, cashier, in...