State v. New York-Mexican Oil Co.

• Decision Date: 20 March 1923
• Citation: 122 A. 55,32 Del. 244
• Court: Delaware Superior Court
• Parties: STATE OF DELAWARE, upon the relation of FRANK L. COOKE, v. NEW YORK-MEXICAN OIL COMPANY, a corporation of the State of Delaware, and LEONARD T. SAUNDERS

122 A. 55

32 Del. 244

STATE OF DELAWARE, upon the relation of FRANK L. COOKE, v. NEW YORK-MEXICAN OIL COMPANY, a corporation of the State of Delaware, and LEONARD T. SAUNDERS

Superior Court of Delaware, New Castle County

March 20, 1923

Superior Court for New Castle County, March Term, 1923.

MANDAMUS No. 176, November Term, 1921.

From the facts in this case it appears that on February 24, 1922 proceedings were commenced by foreign attachment against one Bernabe Barrios; that under these proceedings the sheriff of New Castle county served the writ of attachment upon the resident agent of New York-Mexican Oil Company, the defendant company, and received from him a certificate showing that the number of shares of the said Barrios as appearing on the books of the said company was 482,100, which said shares were then and there attached. No appearance being entered by Barrios and no bail given, judgment was afterwards obtained and the amount ascertained by an inquisition in the sum of $ 2,991.03. Subsequently the shares attached were sold by the sheriff and purchased by Frank L. Cooke, the relator. The sale was afterwards confirmed. Thereafter a certified copy of the proceedings was left with the defendant company with a request for a transfer of said shares to the name of the relator with a further demand for the issuance to him of a new certificate for the 482,100 shares of stock, which demands the defendant company refused.

The relator thereupon filed his petition for a writ of mandamus to compel the defendant company to transfer the stock and issue the new certificate. The defendant in due time filed its return to the alternative writ of mandamus of which return the following is a brief summary so far as material to the decision in this case:

That prior to the attachment the judgment debtor Barrios had assigned 5,000 shares of the stock attached to one Virginia H. Hamilton, which said assignment had actually been transferred on the books of the company four days before the attachment, and a new certificate issued, although the resident agent of the defendant company in Delaware had not been acquainted with such facts; that also prior to the attachment 246,500 additional shares of stock attached had actually been sold and assigned to three different persons by the said Barrios and the certificates therefor actually delivered, although the transfer of said stock had not been made on the books of the defendant company; that all of these facts were made known to the relator in writing prior to his purchase of the said stock at sheriff's sale. The defendant company further states its ignorance as to whether any additional shares had been disposed of by Barrios prior to the attachment. The relator has filed a motion to quash the return to the alternative writ.

The motion to quash the return to the alternative writ is denied.

George N. Davis for the relator.

Herbert H. Ward (of Ward, Gray & Neary) for defendant.

PENNEWILL C. J., and RODNEY, J., sitting.

OPINION

RODNEY, J.

In this case a petition was filed for a writ of mandamus to do two things: (1) to compel the defendant company to transfer on its books the stock in controversy to the name of the relator; and (2) to issue to the relator a new certificate for the shares so transferred.

Before taking up the two objects of the application, it may not be improper to set out some general principles governing the writ of mandamus as existing in Delaware so as to apply them to this case.

In England, prior to the statute of Anne, the writ was a prerogative one, so called because the power to issue it was vested in the judges of the King's Bench, the court in which the sovereign was supposed to be personally present. In Delaware it is issued exclusively by the Superior Court.

Whether in this state it is still a prerogative writ in a supervisory sense (McCoy v. State, 16 Del. 543, 2 Marvel 543, 36 A. 81 [1896]), or whether it has been divested of many of its ancient and prerogative features (Richardson v. Swift, 12 Del. 137, 7 Houst. 137, 30 A. 781; Brumley v. J. & M. Paper Co., 26 Del. 118, 3 Boyce 118, 80 A. 350), there are certain principles, among others, to which our courts have ever adhered and which have considerable application in the present controversy:

(1) The writ will never be granted in a doubtful case; there must be a clear legal right. Road Commissioners v. New Castle, 18 Del. 466, 2 Penne. 466, 47 A. 374.

(2) The writ will never issue where there is other adequate legal remedy. Hastings v. Henry, 15 Del. 287, 1 Marvel 287, 40 A. 1125; McCoy v. State, 16 Del. 543, 2 Marvel 543, 36 A. 81, at page 562, 36 A. 81; Bay State Gas Co. v. Content, 20 Del. 497, 4 Penne. 497, 56 A. 1120.

(3) The writ is a legal remedy for a legal right. Union Church v. Sanders, 6 Del. 100, 1 Houst. 100, at page 123, 63 Am. Dec. 187.

It is, I apprehend from all the authorities, an extraordinary legal remedy; that is, it is an extraordinary remedy for the enforcement of legal rights, being extraordinary as indicative that it is only available when other adequate legal remedies are lacking, and yet there must be a plain legal right to justify the issuance.

The writ has been called the "flower" of the jurisdiction of this Court (Knight v. Ferris, 11 Del. 283, 6 Houst. 283), and it can neither increase nor diminish the duty which the law prescribes and its function is not to create a duty but only to coerce the performance of a pre-existing duty. In Townes v. Nichols, 73 Me. 515, the writ is called "the right arm of the law."

With these general principles, as declared in this state, in mind, we can approach the particular controversy with confidence. It is practically admitted by the counsel for the relator that mandamus will not lie to compel the transfer of stock on the books of a company where the change in the title to the stock was brought about by contract of the parties. The great weight of authority sustains this view. The right to a mandamus to compel the transfer of stock on the corporate books must not be confused with the right to a mandamus to compel the issuance of a certificate of stock, the distinction being herein later pointed out.

In Fletcher, Cyclopedia of Corporations, vol. 6, p. 3818, it is said:

"The general rule is that mandamus will not lie when there is an adequate remedy by ordinary process of law; and since a transferee of a certificate of stock has an adequate remedy at law by an action to recover damages or in equity by a suit to compel the corporation to register his transfer, and issue him a proper certificate, in case the corporation wrongfully refuses to recognize the transfer, most of the courts have held that mandamus will not lie."

Then follow citations from California, Connecticut, Georgia, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania and England. The citations so fully bear out the text that extended quotations would seem to be superfluous.

In 2 Cook on Corporations (7th Ed.), § 390, it is said:

"The weight of authority holds very clearly that mandamus will not lie to compel a corporation to allow a registry on its books of a transfer of stock."

To the same effect is Thompson on Corporations (2d Ed.), §§ 4439, 5761, 5762, and 18 R. C. L., § 106, etc.

Full and instructive notes on the subject gathering together all the authorities may be found in 13 Ann. Cas. 299, 16 Ann. Cas. 900, 133 Am. St. Rep. 728, and 48 L.R.A. 854.

Freeman, in one of his valuable notes in 133 Am. St. Rep. 724, in speaking of a case where a petition had been filed for a mandamus to compel the transfer of stock by a corporation, says:

"Indeed, our only surprise is that the application to the court was made at all in the face of the numerous decisions almost on the point. The courts have consistently held that mandamus does not lie to compel the transfer of stock by a corporation to a purchaser except in the one case of a judicial sale hereafter referred to, and it would only be repeating the principle to quote at any length the opinions."

While the precise question has never before arisen in Delaware as to the availability of mandamus to compel the transfer of stock, the antithesis of this principle has arisen, and one of our earliest cases, M'Dowell v. Bank of Wil. & Brandywine, 1 Del. 27, 1 Harr. 27, was an action of trespass on the case for refusing to permit the plaintiff to transfer bank stock on the books of the bank. We can, therefore, I think, assume with safety that mandamus will not lie at the instance of an assignee to transfer on the books of the company stock which he has received from the assignor.

In an interesting note on the question as to the availability of mandamus to compel the transfer of corporate stock on the books of the company in 133 Am. St. Rep. 728, it is said that the general rule is that mandamus is not available as a remedy and that--

"The one, and it appears the only, exception is that where shares have been sold under a judicial sale mandamus will lie to compel the corporation to transfer such stock."

The theory of this so-called exception seems to be that since the sheriff cannot put the purchaser in possession of the stock sold that the ordinary duty of the corporation's officer becomes an official duty, and, therefore, the proper officer of the corporation becomes pro hac vice a public officer under the law, and refusing to perform his public duty, mandamus becomes the appropriate remedy. The following authorities have been cited as sustaining this theory: Bailey v. Strohecker, 38 Ga. 259, 95 Am Dec. 388; People v. Goss, etc., Mfg. Co., 99 Ill. 355; State v. Jeffersonville First Nat. Bank, 89 Ind. 302; Slemmons v....