Holly Sugar Corporation v. Wilson

• Decision Date: 20 December 1937
• Docket Number: 14165.
• Citation: 101 Colo. 511,75 P.2d 149
• Parties: HOLLY SUGAR CORPORATION v. WILSON.
• Court: Colorado Supreme Court

75 P.2d 149

101 Colo. 511

HOLLY SUGAR CORPORATION v. WILSON.

No. 14165.

Supreme Court of Colorado, En Banc.

December 20, 1937

Rehearing Denied Jan. 17, 1938.

Error to District Court, El Paso County; Arthur Cornforth, Judge.

Action by A. E. Wilson against the Holly Sugar Corporation to recover the value of shares of preferred stock and accumulation of dividends thereon. Judgment for the plaintiff, and the defendant brings error.

Affirmed.

Blount & Silverstein, of Denver, and Victor W Hungerford, of Colorado Springs, for plaintiff in error.

E. H Stinemeyer, of Canon City, and Charles M. Rose, of Pueblo for defendant in error.

HILLIARD Justice.

An action by A. E. Wilson to recover from the Holly Sugar Corporation the value of shares of its preferred stock owned by him, and accumulation of dividends thereon. Recovery was adjudged.

It appears that November 4, 1916, Wilson, a long time resident of Canon City, purchased twenty shares of the corporation's preferred stock, and in evidence of his purchase received certificates in that number of shares previously issued to another, duly assigned; that November 8, 1916, upon surrender of the assigned certificates, the corporation issued and delivered to Wilson four new certificates, each for five shares of its preferred stock; that October 24, 1934, Wilson sold the stock and made formal assignment of his certificates, which were tendered at once to the corporation for reissuance to the purchaser; but the corporation denied Wilson's ownership, refused to make transfer, and retained and 'cancelled' the certificates; that, although from the inception of Wilson's ownership of the stock, dividends had been declared from time to time, the corporation had neither paid nor advised him of dividends, and he was not otherwise apprised thereof. In manner and detail of acquirement of the stock, Wilson availed himself of the services of an official of the First National Bank of his city, who not infrequently gave attention to such matters; that in furtherance of the purchase the banker corresponded with Wilson, Cranmer & Co., of Denver, a stock brokerage firm, and a participant in underwriting the preferred stock issue of the corporation, from which he was accustomed to get service of the nature demanded; that the Wilson-Cranmer Company secured certificates of stock in the desired number of shares, and, with sight draft in the sum of the transaction attached, sent them to the Canon City bank, and the draft was paid; that thereupon the bank forwarded the assigned certificates to the Columbia Trust Company, of New York, the corporation's transfer agent, for transfer to Wilson, the transfer was made, and the new certificates were sent to the forwarding bank; that, upon receipt of the certificates evidencing Wilson's ownership of the stock, the bank delivered them to him and his possession continued until the incident of October 24, 1934, already related.

It further appears that in sums equal to the several dividends declared upon Wilson's stock from the inception of his ownership to September, 1924, the corporation made remittance to one A. E. Wilson, of Denver, who formally concedes, as does the corporation, that he never was the owner of the stock, or entitled to dividends thereon; that at the time last mentioned the Denver Wilson presented to the corporation his affidavit to the effect that he was the owner of the stock and had lost his certificates, whereupon the corporation issued new certificates to him, but of this the Wilson of Canon City was not aware until October, 1934; that from September, 1924, the corporation ignored the existence of the certificates it had issued to the Wilson here, and which he still held and owned, made its declaration of dividends on the certificates it had issued to the A. E. Wilson of Denver, and paid them to him until he assigned the certificates, and subsequently to his successors. The Denver Wilson, thus enriched, was the Wilson of the Denver brokerage firm through whose instrumentality the Canon City Wilson purchased the stock in 1916. It is pertinent to add that until October, 1934, when the corporation refused to transfer the stock represented by the Canon City Wilson's certificates, neither of the two men, bearing the identical name--A. E. Wilson--knew, or knew of, the other, and that at no time, or in any manner whatsoever, did the Canon City Wilson do aught that was calculated to lead the corporation management to believe that the stock represented by the certificates he held belonged to the Denver Wilson.

Judgment entered for $4,509.38, based on items--computations not questioned--as follows: $1,905, paid by Wilson for twenty shares of the stock which he was obliged to buy in the open market in fulfillment of his obligation to the purchaser of his stock, when the corporation refused to transfer the stock represented by the certificates presented for that purpose; $2,030, the sum of the dividends declared prior to October 24, 1934, the date of its conversion by the corporation, and $574.38, as interest.

The corporation contends: (1) That Wilson's loss was occasioned by his negligence and that of the Canon City bank official, said to be his agent, and through whom he made purchase of the stock, in that, as said there was failure to advise the corporation that he was the purchaser and that he was the person to whom the certificates were issued by the transfer agent and in failing thereafter for 18 years to acquaint the corporation with the fact that he was in possession of the certificates and claimed to be the owner thereof; (2) that Wilson slept on his rights from November, 1916, to October, 1936, or nearly 20 years, hence was guilty of laches; (3) that, since Wilson did not commence action until October, 1936, more than 6 years after his cause of action accrued, he is precluded by the bar of the 6-year statute, '35 C.S.A. c. 102, § 1; (4) that, in any event, his action is barred by the same statute as to dividends declared and payable prior to 6 years Before the commencement of his action; (5) that the law and equity favor the corporation, in that it acted innocently and was less responsible than Wilson for the damages he suffered; (6) that Wilson's cause of action, if any, is against the Denver A. E. Wilson.

From nothing appearing, as we perceive, may negligence be attributed to Wilson. He bought the stock and paid for it. He received the certificates issued in evidence of his purchase and ownership, and placed them in his safe deposit box, 'as,' to quote the learned trial judge, 'he had a right to do.' He kept them there until the time in October, 1934, when, in attempted consummation of a sale he had made of the stock, he caused his certificates to be tendered to the corporation with directions for transfer, with the result already stated. Nothing more, we think, was required of him. At the time of the purchase, and for many years immediately preceding, Wilson had lived in Canon City. His desire to secure the stock was communicated from his home city, through a prominent bank there, and the entire correspondence in relation thereto--sent and received--was through that medium. The final communication was from the corporation's authorized transfer agent to the Canon City bank, and therewith was transmitted the certificates, which continuously thereafter were in Wilson's possession.

Whatever of discomfiture there was finds...