Timberlake v. Shippers' Compress Co.

• Decision Date: 14 January 1895
• Citation: 72 Miss. 323,16 So. 530
• Parties: W. P. TIMBERLAKE v. SHIPPERS' COMPRESS CO
• Court: Mississippi Supreme Court

16 So. 530

72 Miss. 323

W. P. TIMBERLAKE v. SHIPPERS' COMPRESS CO

Supreme Court of Mississippi

January 14, 1895

FROM the circuit court of Clay county. HON. C. H. CAMPBELL, Judge.

Action by appellant against the Shippers' Compress Company to recover a dividend on fifty shares of the capital stock of said company. The certificate of shares was numbered 23, and was issued to appellant, W. P. Timberlake, in 1887. In 1888 he assigned the same to T. C. King, by writing his name on the back of the certificate. In 1889 King, being indebted to Timberlake, gave him a note for the sum of $ 3,000, to which he attached the certificate as collateral security, signing his name to the blank transfer on the back of the certificate; and in the spring of 1891, the debt being unpaid, he sold the stock absolutely to Timberlake, taking up his note. In these transactions there was no transfer of the stock on the books of the company. King also owned certificates of shares numbered 1 to 10, respectively. On October 1, 1890, being indebted to the company, and to Woodward & Co., he wrote to the secretary and treasurer of the company the following note: "As I am due Shippers' Compress Company $ 251.62, and a larger sum to B. Woodward & Co., I hereby authorize you to apply any dividends accruing to my stock certificates number 23 and numbers 1 to 10 of Shippers' Compress Company, as follows: (1) Pay the account due Shippers' Compress Company, then pay any balance to B. Woodward & Co. for my account." Timberlake knew nothing of this order when he received the stock.

On July 1, 1891, a dividend was declared on the stock, and that accruing to the shares mentioned was applied as directed by King in his note. Timberlake brought this suit to recover from the company the dividend on the fifty shares embraced in certificate 23. Defendant pleaded the general issue, and a trial was had, in which there was conflicting testimony as set forth in the opinion. The court instructed peremptorily in favor of defendant, a judgment was entered accordingly from which plaintiff appeals. The opinion contains such further statement as is necessary to an understanding of the questions decided.

Judgment reversed and cause remanded.

Clifton & Eckford, for appellant.

Some authorities hold that where a general statute or the charter of the corporation requires that the certificates shall be surrendered and a transfer of stock entered on the books, an assignment of stock can only be made in that way. 2 Beach on Corp., §§ 620, 634, 637. Others hold that it is not necessary to register the transfer on the books, but that a bona fide transfer between the parties conveys an equitable title paramount to the rights of creditors or subsequent purchasers. Taylor on Corp., 796; 2 Beach on Corp., § 635; 2 Am. St. R., § 886; 4 Ib., 754; 3 Lea, 1; 7 Fed R., 369; 11 Wall., 369.

The case of Storage Co. v. Wildberger, 71 Miss. 438, is conclusive as to this.

Under either of the above rules, Timberlake was the owner of the stock when the dividend was declared, and is entitled to it.

A dividend not declared, though already earned, passes by an assignment of stock. 2 Beach on Corp., §§ 599, 604, 619; 5 Am. & Eng. Enc. L., pp. 729, 731; Kane v Bloodgood, 11 Am. Dec., 417.

There was no new consideration for the written agreement or letter of October 1, 1890, given by King. Therefore it could have no effect as against the rights of Timberlake, a bona fide holder of the stock. 42 Miss. 112; 42 Ib., 360; 48 Ib., 275; Schumpert v. Dillard, 55 Ib., 348; Atkinson v. Greaves, 70 Ib., 42.

The fact that Knox testified that Timberlake stated that he desired King to have the dividend is not controlling. Timberlake denies this, and the court gave a peremptory instruction.

Fox & Roane, for appellee.

True, an assignment of stock, as a general rule, carries with it the dividends accrued, but it is nowhere held that a dividend cannot be assigned separately. Whatever the law may be on this question, Timberlake is estopped from claiming this dividend, because he told Knox, the lessee and one of the directors of the defendant, that he wanted King to have the benefit of the dividend.

OPINION

WHITFIELD, J.

Timberlake testifies that he made a demand upon Mr. Knox in the spring of 1891 for the dividend upon this stock, Knox being the superintendent and manager of the compress company at that time. King confirms this, so far as notice to the company is concerned, by saying he told Mr. Woodward, an officer of the compress company, that he had sold the stock to Timberlake "soon after he sold it," which he says was in May 1891. The jury might well have found, on this testimony, that the compress company was...