Merchants' Nat'l Bank v. Richards

• Decision Date: 28 January 1879
• Citation: 6 Mo.App. 454
• Parties: MERCHANTS' NATIONAL BANK, Respondent, v. EBEN RICHARDS, INTERPLEADER, Appellant.
• Court: Missouri Court of Appeals

6 Mo.App. 454

MERCHANTS' NATIONAL BANK, Respondent,

v.EBEN RICHARDS, INTERPLEADER, Appellant.

St. Louis Court of Appeals, Missouri.

Jan. 28, 1879.

1. Where, without objection, an order for an interpleader has been made, and the interplea heard upon its merits, the question as to whether the chancellor might have required an affidavit before making the order is unimportant.

2. In the absence of a legislative enactment restricting the transfer of stock to any particular mode, the transfer is complete on delivery of the certificate with power to transfer, and payment of the purchase-money, not only between vendor and vendee, but, when the corporation has unjustifiably refused to make the transfer on its books, against a creditor of the vendor who without notice of the transfer attaches the stock.

3. The doctrine of a negative pregnant is not recognized in Missouri.

4. Where the petition alleges that plaintiff owns the stock, and the reply sets up a special ownership as pledgee, this is not a departure, the action being for damages against a corporation for refusing to transfer the stock on its books.

APPEAL from St. Louis Circuit Court.

Affirmed.

E. W. PATTISON and J. S. GARLAND, for appellant: “There is no affidavit, not even a statement in the answer that defendant was not in collusion with the party asked to interplead. This is absolutely necessary.”--Simon on Interpl. 4, 5; 2 Story's Eq. Jur., sect. 809; Story's Eq. Pl., sect. 291; Gibson v. Goldthwaite, 7 Ala. 281; Shaw v. Coster, 2 Edw. Ch. 405; 8 Paige, 339; Tobin v. Wilson, 3 J. J. Marsh. 63. If the defendant is in a position where he may be liable to both plaintiff and the interpleader, there is no room for an interplea.-- Farr v. Ward, 2 Mee. & W. 844; Hathaway v. Foy, 40 Mo. 543; United States v. Victor, 16 Abb. Pr. 153; Morgan v. Filmore, 18 Abb. Pr. 217. The reply constituted a departure from the petition.--1 Chitty's Pl. 674; Tarleton v. Wells, 2 N. H. 306; The State v. Grimsley, 19 Mo. 171; Railroad Co. v. McKernan, 24 Ind. 62. The attachment was good, the transfer of the stock to the bank, not having been made on the books of the company, being insufficient to pass the title to the stock.-- Williams v. Bank, 7 Blatchf. 59; Pinkerton v. Railroad Co., 42 N. H. 447; White v. Salisbury, 33 Mo. 150; Colt v. Ives, 31 Conn. 25; Boatman's, etc., Trust Co. v. Able, 48 Mo. 136; Kortright v. Bank, 22 Wend. 348; Fisher v. Bank, 5 Gray, 373. The blanks must be filled before the rights of third parties intervene.-- Woolley v. Constant, 4 Johns. 54; Dunn v. Bank, 11 Barb. 580.

FINKELNBURG & RASSIEUR, for respondent: A transfer of stock by assignment and delivery of stock-certificate is sufficient as between the parties, and passes the title without transfer on the books of the corporation.-- Insurance Co. v. Goodfellow, 9 Mo. 149; Bank v. Lanier, 11 Wall. 377; Chouteau Spring Co. v. Harris, 20 Mo. 390; Kellogg v. Stockwell, 75 Ill. 68; Moore v. Bank, 52 Mo. 377; German, etc., v. Sendmeyer, 50 Pa. St. 67. And such an assignment of stock, accompanied by a power of attorney to transfer on the books of the corporation, though both were executed in blank on the back of the certificate, is sufficient to pass the title, and it may pass from hand to hand without being filled up.-- Leavitt v. Fisher, 4 Duer, 1; Railroad Co. v. Selinger, 34 N. Y. 45; McNeil v. Bank, 46 N. Y. 325; Kortright v. Bank, 20 Wend. 91; 22 Wend. 348; Matthews v. Bank, 1 Holmes, 396; Mount Holly Co. v. Ferree, 17 N. J. Eq. 17; Bank v. Railroad Co., 30 Conn. 273.

BAKEWELL, J., delivered the opinion of the court.

On January 10, 1877, plaintiff commenced the present action to recover a dividend on three hundred and ten shares of the capital stock of defendant, which plaintiff claimed to own. Defendant answered that on December 26, 1875, three hundred and ten shares of its stock stood on its books as owned by one Ray, for which defendant had issued two certificates of stock, covering together the above number of shares, which stock is transferable on the books of the company; that at the date last named, plaintiff, late in the day, represented itself to defendant as the owner of this stock, and required defendant to permit a transfer on its books of the stock to plaintiff; that defendant requested until next day to consult its legal adviser as to its duty in the premises; that next day the Missouri Zinc Company caused the stock in question to be seized by the sheriff and attached in defendant's hands, as the property of Ray, for a claim of $33,000, by virtue of an attachment commenced by said Zinc Company against Ray, who is a non-resident; that after the levy of this attachment plaintiff again applied for a transfer of the stock, which defendant refused on account of the attachment; that afterwards, by virtue of proceedings in this attachment suit, the interest of Ray at the date of the attachment, in this stock, was sold, and purchased by Richards, who then demanded a transfer of the stock on the books of the company to him, which defendant refused; that before this application of Richards, plaintiff had sued defendant for damages for not permitting the transfer to plaintiff; and that the present suit is for dividends since the damage suit, which became due December 21, 1876. Defendant says it has no claim on the stock, or interest in it, and has declined to transfer it only because it cannot know to whom the transfer should be made; that it is willing to transfer the stock, and pay the sum of $3,100, due for dividends, to the real owner of the stock. Defendant prays that plaintiff and Richards be required to interplead, etc.

Richards was accordingly summoned to interplead. He denies all knowledge of plaintiff's claim and of its demand for a transfer of the stock, and claims to own the stock by virtue of the proceedings set forth in defendant's answer.

To the interplea of Richards plaintiff files a reply, in which it alleges that it acquired the stock long prior to the attachment, by a pledge from Ray to secure $20,000 due by Ray to plaintiff; and says that its demand for a transfer was repeatedly made, long before the attachment.

Upon the final hearing, the court decreed that plaintiff is entitled to the dividends, to be credited on the indebtedness of Ray; and also to have the stock transferred on the books of the company to plaintiff, and to hold the stock and dividends until the debt of Ray is paid; and that the interpleader may redeem the stock at any time by paying the balance due on the loan.

The evidence shows that plaintiff was organized under the act of June 3, 1864. Defendant is a corporation carrying on the business of refining sugars. Its charter provides that the stock shall be personal property, transferable as the by-laws prescribe. These by-laws provide that no certificate of stock shall be issued to an assignee until that issued to his assignor is returned and cancelled. All transfers must be made in the record-book, and attested by a subscribing witness. The two certificates in question stated on their face that they were transferable on the books of the company only in conformity to the charter and by-laws. The loan to Ray & Co., who were New York merchants, was made by simply giving to them, as customers of plaintiff, a credit for $20,000 on their pass-book. The certificates were then handed to the cashier of plaintiff, and the printed form of assignment on the back of the certificate was already signed by Ray. The assignment purports to transfer to ______ -- shares of the capital stock of defendant, represented by the certificate, and to appoint ______ the attorney irrevocable of the assignor to make any necessary act of transfer on the books of the company and to substitute other attorneys for that purpose. The signature is attested by a subscribing witness. The witness died before the trial. His name and that of Ray were written on the back of the certificates long prior to the loan in question, for the purpose of effecting other loans. Ray & Co. failed. Their average balance with plaintiff was $15,000 to $20,000. They were constantly depositing and drawing out funds, to the date of their failure. The original loan remained unpaid, except as to some payments of interest, at the date of Ray & Co.'s failure, in December, 1875, when the bank at once sent them to the German Bank, its correspondent in St. Louis, with instructions to have the transfer made on the books of the company. On the evening of December 26th the German Bank received the certificates, and next morning an employee of that bank called at the office of defendant and requested a transfer of the certificates. The secretary was not in, and the messenger was told that it could not be done in his absence, and was requested to call again; which he did in the same afternoon, when he was told that the transfer could not be made in the absence of the president; that a meeting of directors would be at once called about the matter, and the employee was requested to come next day. He did so, and was informed that defendant would not permit the transfer. No reason was given for the refusal. The cashier of the German Bank then called about the matter, on the same afternoon, and was informed by the president and secretary that the transfer must be declined on account of rumors of Ray's failure; but that they would take legal advice, and give a definite answer. Next day the permission was definitely refused. The cashier of the German Bank then put the matter in the hands of the attorney of the bank, who demanded a transfer on the 28th and 29th, with the same result. On the morning of the 29th, legal proceedings were threatened, and then the objection was made that the assignment was in blank. The attorney offered to fill the blank, but was told that a transfer would in no case be permitted, because the Missouri Zinc Company had attached. On the same day, plaintiff commenced suit against defendant for damages for refusal to...