Robinson v. Goldfield Merger Mines Co.
| Decision Date | 04 May 1922 |
| Docket Number | 2519. |
| Citation | 206 P. 399,46 Nev. 291 |
| Parties | ROBINSON v. GOLDFIELD MERGER MINES CO. (CATLIN & POWELL CO., INTERVENER). |
| Court | Nevada Supreme Court |
Appeal from District Court, Washoe County; J. Emmett Walsh, Judge.
Suit by Thomas S. Robinson against the Goldfield Merger Mines Company, in which the Catlin & Powell Company intervened. From an order, on motion of the intervener, granting a new trial after a decree for plaintiff against intervener plaintiff appeals. Order reversed.
Augustus Tilden, of Reno, for appellant.
L. D Summerfield, of Reno, for respondent.
This is a proceeding in equity to compel the Goldfield Merger Mines Company, a corporation created under the laws of the state of Washington, to transfer to plaintiff, upon its books, 2,000 shares of its capital stock, evidenced by certificates No 6107 and No. 6108, for 1,000 shares each. Upon the filing of the complaint, Catlin & Powell Company, a corporation created under the laws of the state of New York, upon leave, filed its complaint in intervention, demanding that said certificates be transferred to it. The defendant made no claim to the stock, but professed its willingness to abide the decree of the court as between the rival claimants. The court caused findings of fact to be entered in accordance with the facts stated in plaintiff's complaint, and adjudged and decreed plaintiff to be the owner and entitled to the possession of the stock, and ordered the defendant to make transfer thereof to plaintiff. Upon motion of the intervener, the court granted and caused to be entered an order for a new trial. The appeal is taken from that order.
In April, 1915, the stock of the Merger Mines Company was actively dealt in by brokers and the public. The plaintiff and Charles S. Sprague were copartners, doing a stockbrokerage business under the firm name of Thomas S Robinson & Co., U.S. Waugh & Co. were stockbrokers at Goldfield, Nev., and the Catlin & Powell Company were engaged in a general brokerage business in the city of New York. The latter had had numerous prior transactions with U.S. Waugh & Co., with whom its course of dealing was, without exception, substantially as follows: Upon the filling of buying orders for stock, the certificates were shipped by registered mail, with draft attached, for the purchase price, to John S. Cook & Co., bankers at Goldfield, Nev., with a letter of directions that, upon the payment of the draft, the certificates be delivered to Waugh & Co.
In this instance, the Catlin & Powell Company, upon the receipt of a buying order from Waugh & Co., purchased for them, in due course of its business, 3,000 shares of the Reorganized Booth Mining Company and 3,000 shares of the Merger Mines Company. The 3,000 shares of the Merger Mines stock were represented by certificates Nos. 6107, 6108, and 6110, for 1,000 shares each. All the certificates bore an assignment and power of attorney to transfer the same on the corporate books, executed in blank. The certificates were placed in what is called a "draft envelope," which had a string affixed. A sight draft for the purchase price of all the certificates was placed on the outside of the draft envelope and tied thereon with the string, making one compact enclosure. In this condition the certificates and draft were, with a letter of instructions, given the stenographer of intervener, with express directions to ship the certificates by registered mail to John S. Cook & Co.; but the stenographer, instead of registering and mailing the enclosures to John S. Cook & Co., in accordance with the express directions, inadvertently and mistakenly addressed the mailing envelope and registered it to Waugh & Co. direct, which in due course of mail was delivered to and receipted for by the latter. Waugh & Co. opened the draft envelope and appropriated and converted the certificates of stock to their own use, made no mention to John S. Cook & Co. or to the intervener of the receipt of the enclosures, and, in due course of trade, sold to Thomas S. Robinson & Co. the certificates of stock in controversy, for value.
Prior to the institution of this suit, the intervener filed with the defendant corporation an affidavit alleging that the certificates of stock had been stolen, and offered to indemnify the corporation with a bond in double the value of the stock if it would issue to it new certificates, which offer was refused.
For answer to the complaint in intervention, setting up these facts more in detail than here stated, the plaintiff pleaded in bar or for a defense to the action in intervention that the intervener, by its voluntary act and gross negligence, had made it possible for Waugh & Co. to injure and deceive plaintiff, and that, by reason thereof, the intervener should be estopped from claiming, as against plaintiff, its title to the shares of stock evidenced by said certificates.
There is nothing in the record to show what disposition was made of the issue tendered by the complaint, answer and reply to the complaint in intervention, except what is to be implied from the findings and judgment in favor of plaintiff. The ruling of the court, upon the intervener's motion for a new trial, in substance and effect, is that plaintiff was a bona fide purchaser of the stock; that the evidence tended to show that Waugh & Co. had embezzled the certificates; and that, by reason of the statute (Crimes & Punishments Act, § 385, Rev. Laws, § 6650), no title to the stock could be acquired by plaintiff, and its sale and delivery was void. In passing upon the motion, the court took occasion to say that said statute was not called to its attention upon the trial, and had come to its notice only in the argument on the motion for a new trial, and that, upon consideration of the statute, as applied to the undisputed facts, it was impelled to grant a new trial.
The question for determination on appeal is whether section 385 of the Crimes and Punishments Act (Rev. Laws, § 6650) infringes upon or abrogates the rule of law estopping an owner from asserting, as against a bona fide purchaser, his title to shares of stock transferred in blank from a felon where the owner was guilty of such negligence or culpable carelessness as to be the proximate cause of the deceit. ...
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Robinson v. Goldfield Merger Mines Co.
...from District Court, Washoe County; J. Emmett Walsh, Judge. On rehearing. Former judgment of reversal affirmed. For former opinion, see 206 P. 399. Tilden, of Reno, for appellant. L. D. Summerfield, of Reno, for respondent. SANDERS, J. In the former opinion the position taken was that the o......