Jackson v. Peerless Portland Cement Co.
Decision Date | 03 May 1927 |
Docket Number | No. 102.,102. |
Citation | 213 N.W. 863,238 Mich. 476 |
Parties | JACKSON v. PEERLESS PORTLAND CEMENT CO. et al. |
Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Branch County; Clayton C. Johnson, Judge.
Suit by Ella D. Jackson against the Peerless Portland Cement Company and another. Judgment for defendants, and plaintiff appeals. Affirmed.
Argued before the Entire Bench.
Stanley E. Weage, of Coldwater (P. J. M. Hally, Jr., of Detroit, of counsel), for appellees.
Plaintiff is an elderly lady who lives alone on a farm in Branch county. She was the owner of 200 shares of stock of the Peerless Portland Cement Company.
On a September day in 1925 a stranger called on her and represented himself to be an agent of the Peerless Portland Cement Company. He showed her a forged telegram which purported to have been sent to him by the secretary of the cement company, ordering him to take up her stock. He also exhibited to her a forged letter which purported to have been written by the secretary of the company, directing him to take up the stock, and stating the company would send her $4,500 within a few days, explaining that the company was redeeming its stock, as it had a right to do. Plaintiff informed the stranger that in business matters of this nature she usually consulted her brother-in-law, Mr. Tomlinson, of Colon, and that she would take the matter up with him. The stranger replied that her brother-in-law, Mr. Tomlinson, had already sent in his stock. After some further talk by way of inducement plaintiff indorsed the certificates in blank and passed them over to him to be delivered to the cement company. The stranger took the stock to Detroit and sold it to the William H. Rose Company, a brokerage firm, who claims that it purchased the stock for value and without knowledge of any infirmity. Plaintiff thereupon notified the company of her loss and filed her bill stating the facts and praying for a decree which would make her sole owner of the certificates, and would compel William H. Rose & Co. to deliver the certificates to her, with a further prayer for an injunction.
It was the opinion of the trial court that inasmuch as the plaintiff indorsed the certificates in blank and placed them in the hands of a stranger, and the defendant brokerage house having purchased them from the stranger, who was the apparent owner, for value and without knowledge of the infirmity, it thereby became a bona fide holder for value.
If the stranger obtained the certificates of stock in the manner indicated by the plaintiff, he was guilty of larceny. C. L. 1915, § 15319. This statute provides:
‘Every person who shall falsely personate or represent another, and in such assumed character shall receive any money, or other property whatever, intended to be delivered to the party so personated, with intent to convert the same to his own use, shall be deemed, by so doing, to have committed the crime of larceny.’
If the stranger were guilty of larceny he would have no title to the certificates, and therefore could give none to William H. Rose & Co., as will be shown by the following authorities:
‘Share certificates not being negotiable instruments, if such a certificate is lost or stolen from the owner, without fault on his part, his right to it is superior to that of any person who may acquire it by purchase for value from any other holder; and he may maintain against the corporation and the person who sold the stolen script an action to establish his right to it.’ 10 Cyc. 619.
‘Stock certificates are assignable, and pass by indorsement and delivery as bills of exchange and promissory notes pass, but a majority of the courts have held that they are not negotiable instruments, notwithstanding a custom or usage among brokers to the contrary; and an innocent purchaser for value of such certificate, although indorsed in blank by the owner, is deemed to obtain no better title to the stock than his vendor had.’ 7 R. C. L. 213.
Joyce on Defenses to Commercial Paper, § 582.
In O'Herron v. Gray, 168 Mass. 573, 47 N. E. 429,40 L. R. A. 498, 60 Am. St. Rep. 411, it is stated that:
In Schumacher v. Greene-Cananea, 117 Minn. 124, 134 N. W. 510,38 L. R. A. (N. S.) 180, Ann. Cas. 1913C, 1115, the question whether a certificate of stock was negotiable and whether an innocent purchaser from a theif had superior title were discussed. In the course of the opinion it was said:
Brannan's Negotiable Instrument Law, p. 11; Jones on Collateral Securities, § 461; Swim v. Wilson, 90 Cal. 126, 27 P. 33,13 L. R. A. 605, 25 Am. St. Rep. 110;O'Herron v. Gray, 168 Mass. 573, 47 N. E. 429,38 L. R. A. (N. S.) 180, Ann. Cas. 1913C, 1115;People v. Martin, 116 Mich. 446, 74 N. W. 653;Millard v. Green, 94 Conn. 597, 110 A. 177, 9 A. L. R. 1610;Bangor Electric Light & Power Co. v. Robinson (C. C.) 52 F. 520;East Birmingham Land Co. v. Dennis, 85 Ala. 565, 5 So. 317,7 Am. St. Rep. 73; Perkins v. Cowles, 157 Cal. 625, 108 P. 711,137 Am. St. Rep. 158, 30 L. R. A. (N. S.) 283;Clark v. American Coal Co., 86 Iowa, 436, 53 N. W. 291,17 L. R. A. 557;Farmers' Bank v. Diebold Safe & Lock Co., 66 Ohio St. 367, 64 N. E. 518,58 L. R. A. 620, 90 Am. St. Rep. 586;Scollan v. Rollins, 173 Mass. 275, 53 N. E. 863,73 Am. St. Rep. 284;Schumacher v. Greene-Cananea Copper Co., 117 Minn. 124, 134 N. W. 510,38 L. R. A. (N. S.) 180 ( ).
Union Trust Co. v. Frederick M. Oliver, Trustee in Bankruptcy, etc., 214 N. Y. 517, 108 N. E. 809, is cited by the dissenting opinion as sustaining its view. That case is not in point, for the reason that the acts of Clarke, who wrongfully used the certificates as collateral, did not constitute larceny. It is quite likely that New York does not have the statute which we have.
The case of the City of Adrian v. Whitney Central National Bank, 180 Mich. 171, 146 N. W. 654...
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