Pedersen v. Brantner

• Decision Date: 03 December 1973
• Docket Number: No. KCD26231,KCD26231
• Citation: 503 S.W.2d 25
• Parties: John PEDERSEN, Appellant, v. Alpha BRANTNER et al., Respondents.
• Court: Missouri Court of Appeals

Page 25

503 S.W.2d 25

John PEDERSEN, Appellant, v. Alpha BRANTNER et al., Respondents.

No. KCD26231.

Missouri Court of Appeals, Kansas City District.

Dec. 3, 1973.

L. E. Atherton, Milan, for appellant.

Jayne, Oswald & Cottey, Kirksville, for respondents.

Before SHANGLER, P.J., and SWOFFORD and WASSERSTROM, JJ.

SHANGLER, Presiding Judge.

Plaintiff appeals from an adverse judgment upon a petition which seeks: a declaration that plaintiff John Pedersen has legal title to certain shares of capital stock of the First National Bank of Milan, Missouri, a judgment enjoining defendants Alpha Brantner and Alta Pfeiffer from asserting claim of title thereto, and an order that defendant First National Bank of Milan transfer the shares of stock to plaintiff on its books.

The twenty shares of stock in contention were purchased by Rushie Linhart in the year 1936 and her ownership was evidenced by certificate number 291. On December 5, 1955, Mrs. Linhart borrowed money from defendant Bank and executed a note as evidence of the debt. Apparently, the loan was to be secured by certain livestock owned by Mr. Linhart, but on the day after the note was signed she pledged, instead, her shares of stock to defendant Bank which then placed the certificate in its vaults.

Rushie Linhart had three daughters, Villa Pederson (now Slaughter), former wife of plaintiff, and Alpha Brantner and Alta Pfeiffer, joined as defendants.

On December 12, 1956, Rushie Linhart executed a bill of sale to plaintiff-appellant Pederson, then her son-in-law, to 70 head of Hereford cattle and a certificate representing 20 shares of the capital stock of defendant Bank. The instrument of sale also recited and acknowledged receipt by Mrs. Linhart of one dollar and other good and valuable consideration. The execution and delivery of the bill of sale by her mother to Pederson were established by Villa Pederson Slaughter. The others present at the transaction--plaintiff Pederson, Rushie Linhart, and a lawyer--did not testify. Mrs. Slaughter testified further that on December 15, 1956, she and Pederson took the bill of sale to the defendant Bank where they displayed it to John Rogers, executive officer, and asked that the stock certificate be transferred to appellant Pederson. Rogers explained that the bank held the certificate as security for a loan to Mrs. Linhart and that it could not be transferred until the note was paid. Thereupon, they left the bank office and went to the courthouse where they recorded the instrument of sale.

Then, on December 29, 1956, Rushie Linhart, accompanied by her two other daughters, Alpha Brantner and Alta Pfeiffer, defendants here, went to the bank at which time Mrs. Linhart informed Mr. Rogers she wished to transfer the stock certificate to them. Mrs. Linhart endorsed the certificate to her two daughters by completing the transfer from on the back of the document. Since Mr. Rogers insisted on retaining the certificate as security for the mother's loan, the two defendant daughters executed a separate written pledge instrument, once again securing the loan by the stock certificate. Rushie Linhart's debt on the note has since been discharged, but the transfer of the stock to defendants Alpha Brantner and Alta Pfeiffer has not been recorded on the books of the bank.

Thus the matter stood until August 17, 1959, when plaintiff Pederson brought his petition for declaratory judgment. In that petition, plaintiff claims legal title to the shares of stock by virtue of the bill of sale, but admits that there was no physical delivery of the certificate to him. Plaintiff also seeks the court's judgment directing defendant Bank to transfer to him the shares of stock, and the certificate evidencing them, on the books of the bank. The defendant Bank pleaded the obligation undertaken by Rushie Linhart and the original pledge of the certificate, the subsequent repledge by defendants Brantner and Pfeiffer, the liquidation of the obligation on the note and the readiness of the bank to deliver up the certificate to the owner as declared by the judgment of the court. The answer of defendants Brantner and Pfeiffer alleged that the bill of sale was not effective to transfer title to the shares to plaintiff since there had been no delivery of the certificate to him as required by law. Defendants pleaded their ownership to the shares by the written endorsement of Rushie Linhart and her delivery to them of the certificates. These issues were finally tried to the court on November 22, 1971, and the court adjudged defendants Brantner and Pfeiffer to be the owners of the stock. No formal findings of fact or conclusions of law were requested or made.

Appellant raises and randomly argues four points in his brief, but only one falls within the issues raised by the pleadings and tried by the parties. Points two and three, generously construed, assert a wrongful refusal by the bank to transfer the certificate to appellant when presented with the bill of sale, but appellant neither pleaded nor asked for relief on any such theory. Point four asserts that defendants Brantner and Pfeiffer had knowledge of the bill of sale at the time of the transfer of the stock to them and therefore were parties to a fraud upon appellant. Even if we consider that such an assertion was presented to the trial court, in the absence of a finding on that issue in this court-tried case, we deem it to have been resolved in favor of defendants in accordance with the judgment entered. Van Berg v. Koch, 413 S.W.2d 588, 591(4) (Mo.App.1967). Nor can defendants be held to constructive notice of the transaction between plaintiff and Rushie Linhart. Although a stock certificate as a muniment of title is itself tangible personal property (Addis v. Swofford, 180 S.W. 548, 553(1) (Mo.1915)), it transfers an incorporeal interest in property in the nature of a chose in action (Vanstone v. Goodwin, 42 Mo.App. 39, 47 (1890)) and the recording of an instrument for the sale of stock does not constitute constructive notice of the rights or interests created thereby. Schawacker v. Ludington, 77 Mo.App. 415, 421 (1898); Miller v. Heisler, 187 S.W.2d 485, 488(4, 5) (Mo.App.1945); § 59.330, RSMo 1969, V.A.M.S.

Appellant stakes his right to ownership of the stock on the theory that delivery to him of the bill of sale was symbolic delivery of title to the stock. The Uniform Stock Transfer Act, § 403.010 et seq., RSMo 1959, ¹ however, provides (§ 403.050 and § 403.140):

1. Title to a certificate and to shares represented thereby can be transferred only

(1) By delivery of the certificate endorsed either in blank or to a specified person appearing by the certificate to be the owner of the shares represented thereby; or

(2) By delivery of the certificate and a separate document containing a written assignment of the certificate . . ..

(3) . . . (emphasis supplied)

An attempted transfer of title to a certificate or to the shares represented thereby without delivery of the certificate shall have the effect of a promise to transfer and the obligation, if any, imposed by such a promise shall be determined by the law governing the formation and performance of contracts.

Thus, the statute clearly provides that title to shares of stock follows the certificate and an attempted sale of stock without actual delivery of the certificate has the effect of a promise to transfer, which gives rise to an obligation on the transferor determinable by the law of contracts. In re Estate of Wintermann, 492 S.W.2d 763, 768(8) (Mo.1973); Brennan v. Wills, Ltd., 263 F.2d 1, 2(3) (10th Cir. 1959); In re Kies' Estate, 320 S.W.2d 478, 482(2) (Mo.1959).

Appellant effectively concedes that the conveyance by bill of sale does not conform to the requirements of the Uniform Stock Transfer Act, but contends that the transfer of national bank stock is not governed by the endorsement and delivery requirements of former Chapter 403, but rather by the laws of the United States. Appellant relies on the terms of 12 U.S.C.A. § 52 which declares that the capital stock of every national bank shall be divided into shares of one hundred dollars cash, shall be deemed personal property, and be transferable on the books of the bank in such manner as may be prescribed by its bylaws or articles, and that every person becoming a stockholder by such transfer shall, in proportion to his shares, succeed to all the rights and liabilities of the prior holder. Appellant argues that under this statute, 'national bank stock is personal property transferable at the will of the owner' (citing Third National Bank v. Buffalo German Ins. Co., 193 U.S. 581, 24 S.Ct. 524, 48 L.Ed. 801 (1904)) and that since 'a transfer . . . good at common law is good under the statute' (9 C.J.S. Banks and Banking § 581, p. 1103), and at common law a bill of sale is symbolic delivery of personal property (Poplin v. Brown, 200 Mo.App. 255, 205 S.W. 411 (1918)), delivery of the bill of sale was symbolic delivery of the certificate and effective to pass title to the shares at common law, the requirements of the Uniform Stock Transfer Act notwithstanding. These aphorisms, although valid in themselves, are given out of context and do not support appellant's conclusion that as to national bank stock the federal statute supervenes the transfer provisions of the Uniform Stock Transfer Act. Nor is appellant's argument aided by the miscellany of cases...