Eaton v. New England Tel. Co.

• Citation: 68 Me. 63
• Parties: ISAAC T. EATON v. NEW ENGLAND TELEGRAPH COMPANY.
• Decision Date: 03 February 1878
• Court: Supreme Judicial Court of Maine (US)

68 Me. 63

ISAAC T. EATON v. NEW ENGLAND TELEGRAPH COMPANY.

Supreme Judicial Court of Maine.

February 3, 1878

ON EXCEPTIONS AND MOTION to set aside the verdict which was for the defendants.

CASE IN TORT, alleging, in substance, that one Isaac W. Eaton October 23, 1873, being the owner of thirty shares of the capital stock of the defendant company, and holding certificates thereof of the value of $100 each, then, for a valuable consideration, sold and assigned the said shares by his indorsement and delivery of the certificates to the plaintiff; that the plaintiff then exhibited the transfers and certificates to the treasurer of the company and offered to surrender them to him, and demanded that the transfers be entered upon the books of the company and a new certificate of the thirty shares be issued by the company to the plaintiff, all of which the said company refuse to do, to the damage, etc. The plea was the general issue.

The evidence showed that Isaac W. Eaton, the father of the plaintiff, was formerly secretary of the defendant company that December 7, 1867, a certificate of fourteen shares of the capital stock of $50 each was issued to him, signed by himself as secretary and by the secretary and treasurer, and that July 13, 1872, a certificate of sixteen shares similarly signed was issued to him; that both certificates were transferred by indorsment signed by Isaac W. Eaton, and that the name of Richard Palmer was first inserted as transferee. Palmer's name was afterwards erased and the name of the plaintiff inserted at the apparent date of October 13, 1873. Richard Palmer died November 14, 1873. Isaac W. Eaton ceased to act as secretary about June, 1874.

The plaintiff claimed that the insertion of Palmer's name was for the purpose of executing a contemplated arrangement between Isaac W. Eaton and Palmer which never came to execution, and that the certificates were never delivered to him. The defendants contended that they had been delivered to Palmer and left by him in Eaton's custody, to enable Eaton to act as a director; that the erasure of Palmer's name and the insertion of the plaintiff's were fraudulent and void.

The defendants, against the plaintiff's objection, put in evidence plaintiff's disclosure in the action Samuel W. Hamilton et al. v. Isaac W. Eaton & Isaac T Eaton, trustee, signed and sworn to by the plaintiff October 5, 1875, in which, after disclosing certain conveyances by his father to him, not including the shares in question, he gave an affirmative answer to the question: " Was this all the personal property you have had of your father in any way since 1871?"

After the verdict, the plaintiff filed exceptions to the admission of the trustee disclosure; also because the court allowed the witness, Stephen B. Palmer, against objection, to answer the question: " Whether you saw in the hands of Isaac W. Eaton, at the same time, other certificates issued to Richard Palmer; " also to the instruction to the jury, " that if there had been a perfected contract of transfer to Richard Palmer by a delivery to him of the certificates, and they were left with Eaton as the custodian of Palmer, he would have no right to change the transfer, and such an alteration as appears to have been made in the transfer would be entirely unauthorized, and would convey the plaintiff no title; it would be void in law and the plaintiff would stand without title and without right to transfer."

H. Fairfield, for the plaintiff, argued in favor of the motion.

R. P. Tapley, on the same side, in favor of the exceptions, cited R. S., c. 46, § 11, which provides that " when the capital of a corporation is divided into shares, and certificates thereof are issued, they may be transferred by indorsement and delivery, but such transfer of shares is not valid except between the parties thereto until the same is so entered on the books of the corporation as to exhibit the names and residences of the parties, the number of the shares and the date of their transfer."

He contended that even if a perfected contract of transfer had been made to Palmer by this indorsement and delivery and the certificates returned to him as custodian, it was not valid except between the parties thereto until the entry required by law was made upon the defendants' books, and never having been so entered the plaintiff was unaffected by it. Oxford Turnpike v. Bunnel, 6 Conn. 552. Fisher v. Essex Bank, 5 Gray 373. Marlborough Manufacturing Co. v. Smith, 2 Conn. 579. Northrop v. The Newton & Bridgeport Turnpike Co., 3 Conn. 544. Boyd v. Rockport Steam Cotton Mills, 7 Gray 406.

I. T. Drew & H. K. Bradbury, for the defendants.

PETERS J.

The defendants are sued for preventing the plaintiff from becoming the recorded owner of certain shares in their company. The plaintiff presented to the defendants certain certificates of shares, originally issued to Isaac W. Eaton and by him assigned to the plaintiff, for the purpose of procuring a transfer to himself upon the books of the company. The proffer was rejected by the company for the alleged reason that the same shares had been previously assigned by the same Isaac W. Eaton to one Palmer, the true owner thereof, although such assignment was not recorded, and that after Palmer's death, by an alteration and forgery by Isaac W. Eaton, the assignment had been changed by inserting the name of the plaintiff instead of Palmer's name as assignee. The case comes up upon motion and exceptions, the defendants getting the verdict.

The motion is much relied on by the losing party. The facts were few. It seems that at a time while the certificates were in Isaac W. Eaton's hands they bore on their backs assignments to Palmer. With the jury the case must have hinged on the point, whether Isaac W. Eaton had ever sold the shares to Palmer or not. The plaintiff claimed that the so-called assignment was a writing merely preparatory to an intended sale, perhaps, but never used for the purpose, and therefore properly erased; and the defendants insisted that there had been a sale to Palmer perfected by delivery, and that the certificates remained with the assignor as the custodian of the assignee. The fact that the shares were once assigned upon their backs to Palmer was well established. Then, it was shown that the assignor had in his possession and keeping, at the same time he held the shares purporting to be assigned, certain other certificates of shares of the same stock standing in Palmer's name and confessedly belonging to Palmer. The plaintiff pretended that he actually purchased the shares from Isaac W. Eaton for value received. At the time of the trial Palmer was deceased. Isaac W. Eaton was present but not called. Although charged by the defense with fraud and forgery, and knowing more about the matter in contention than all the men in the world, the plaintiff (his son) kept him off the stand. Added to this, the defendants put in evidence a trustee disclosure of the plaintiff, wherein he made a full exposition of all his dealings in detail with his father for the time covered by the period of the stock transactions, but made no mention of this purchase, swearing in his disclosure that he had had no other transactions with his father more than was mentioned therein. After this evidence was admitted, the plaintiff gave not a word of explanation in relation to the disclosure or the statements which it contained. Undoubtedly, the jury found that no actual and real sale of the shares was ever made by the father to the son. And, as a most natural and reasonable deduction from that finding and the other facts, they believed there had been an actual and real and completed sale of the property to Palmer. We can see no cause to question the correctness of such a conclusion.

But the admissibility of the testimony upon which the verdict was founded is contested by the plaintiff. First, the trustee disclosure was objected to. We have no doubt that it was legally admitted. It is insisted that it laid before the jury many matters foreign to the issue. But it must be borne in mind that the point was to show what the disclosure did not contain rather than what it did contain, and therefore the whole of it was to be read in order to render the point available.

The plaintiff objected to the proof...