Robinson Mining Co. v. Riepe

• Decision Date: 29 November 1916
• Docket Number: 1966.
• Citation: 161 P. 304,40 Nev. 121
• Parties: ROBINSON MINING CO. v. RIEPE ET AL.
• Court: Nevada Supreme Court

161 P. 304

40 Nev. 121

ROBINSON MINING CO. v. RIEPE ET AL.

No. 1966.

Supreme Court of Nevada

November 29, 1916

Appeal from District Court, White Pine County; George S. Brown Judge.

Action by the Robinson Mining Company against Richard A. Riepe and others. From judgment against defendant Bertha Ives on her counterclaim, she appeals. Reversed and rendered.

G. A McElroy, of Los Angeles, Cal., Wm. E. Billings, of San Francisco, Cal., and Chandler & Quayle, of Ely, for appellant.

S. W Belford, of Reno, for respondent.

COLEMAN J.

This is the second appeal taken in this case, the former appeal having been taken by plaintiff. Robinson Mining Co. v Riepe, 37 Nev. 27, 138 P. 910. This appeal is taken by defendant Bertha Ives, from a judgment rendered against her on her counterclaim. The appeal is upon the judgment roll, and it is asserted that the conclusions of law as made by the trial court are contrary to the facts as found. The court found as follows:

"That on the 21st day of June, 1907, said defendant Bertha Ives was the owner and entitled to the possession of 27,500 shares of the capital stock of the said plaintiff company, the value of which was then the sum of $11,000, and not the sum of $82,500 as alleged in said counterclaim, and was in possession of 2 certificates representing said 27,500 shares of said capital stock, one of which was for 25,000 shares and the other was for 2,500 shares of said capital stock, being the same shares of stock specified in paragraph 6 of plaintiff's complaint. That on said 21st day of June, 1907, said defendant Bertha Ives presented said certificate to said corporation at its office in Ely, White Pine county, Nev., and demanded that said corporation issue to her new certificates in smaller denominations representing a less number of shares each than the said original certificates in lieu of said original certificates for 27,500 shares, which said old certificates she then and there tendered to said corporation for cancellation upon the issuance of said new certificates. That said corporation then and there refused, failed, and declined to issue such or any new certificates and as reason for and part of said refusal, failure, and declination wrongfully asserted title in itself to the whole of said stock, and denied that counterclaimant, Bertha Ives, had any title or interest therein whatsoever. That at that time shares of stock of the plaintiff company represented by certificates of smaller denominations were much more readily salable in the Ely district than shares represented by certificates as large as those so held by the said defendant Bertha Ives and by her so presented for cancellation as aforesaid. But it is not true, as alleged in said counterclaim, that said plaintiff company did then or there, by reason of said facts or otherwise, wrongfully, unlawfully, maliciously, or otherwise, or at all, take or convert the said 27,500 or any shares of stock to its own or any use, or to the damage of said defendant Bertha Ives, or any one else, in the sum of $82,500 or any other sum."

It is the contention of appellant that the facts found by the court show a conversion by the respondent of the stock owned by appellant. Counsel for respondent concedes in his brief that:

"The action of conversion arises when the corporation refuses to transfer stock upon its books to a person entitled to such transfer."

The authorities sustain this rule. Kimball v. Union Water Co., 44 Cal. 173, 13 Am. Rep. 157; Ralston v. Bank of California, 112 Cal. 213, 44 P. 476; Humphreys v. Minn. Clay Co., 94 Minn. 469, 103 N.W. 338; Herrick v. Humphrey H. Co., 73 Neb. 809, 103 N.W. 685, 119 Am. St. Rep. 917, 11 Ann. Cas. 201. But it is contended that this case does not fall within this rule, since appellant merely sought to have her stock certificates canceled and new certificates, of smaller denominations aggregating 27,500 shares, issued to her in lieu thereof. The only case that we know of in which an allusion is made to the right to cut up a stock certificate is that of Schell v. Alston Mfg. Co. (C. C.) 149 F. 439. To our mind, the case at bar does not turn upon the right of appellant to have her stock certificate cut up, but upon the reason given by respondent for not doing so. When appellant presented her certificate and asked that new certificates be issued therefor, the refusal to do so was not based upon the ground that a stockholder of the company could not, as a legal right, demand that his stock certificate be cut up, but upon the ground that the respondent company owned the stock in question.

Hence it seems to us that the question of the legal right of appellant to demand that her two certificates for 27,500 shares of stock be canceled, and several certificates for a small number of shares, but all aggregating the 27,500 shares owned by her, is out of the case. We think the logic of the rule laid down by Cook with reference to a refusal of a company to transfer stock is applicable to this situation. He says:

"When the corporation refuses to allow a registry for reasons other than those connected with the mere formalities of registry, or for reasons not given to the applicant, it waives the right to insist on them, and cannot afterwards claim that the appellant did not conform to such technicalities." Stock and Stockholders (Cook) § 383; Richardson v. Longmont S. & D. Co., 19 Colo. App. 483, 76 P. 546.

In the case at bar the respondent refused to cut up appellant's stock certificates for reasons other than those connected with the mere formality of cutting them up.

If appellant, after the refusal of the respondent to cut up the certificates, had obtained purchasers for the stock on condition that she would have it transferred to them, and the company had then refused to make the transfer for the reason that it asserted ownership, it is conceded by counsel for respondent that it would have been guilty of a conversion of the stock.

We believe that it is a well-recognized rule that the law does not require the doing of a vain thing. Appellant knew that respondent claimed to own the stock, and for that reason would not transfer it. Why, then, should she be compelled to do the vain thing of obtaining purchasers for the stock knowing that she could not deliver it because respondent claimed to own it? In fact, how could appellant, in good faith, make a sale of the stock while respondent was asserting ownership of it? Suppose she had offered it for sale, and the person to whom she had...