71 P. 273 | Kan. | 1903
The opinion of the court was delivered by
Large space is given in the brief and argument of the plaintiff in error to a discussion of the question of actual fraud on the part of the Mulvanes. We think, if the findings of the court are to be upheld, that all these questions have been settled and will not need our consideration, so that the first question we are called upon to consider is whether the court erred in refusing to submit the case for final consideration to the jury, and in treating the findings of the jury only as “advisory” and not as binding and conclusive upon the disputed questions of fact. This is but another statement of the question whether the issues made by the pleadings showed a case triable by the jury, or to the court. If the former, then the jury’s findings must stand; if the latter, then the conscience of the judge is the tribunal of last resort as to the facts involved. There is very grave question whether the conduct of the plaintiff was not such in this respect as to waive his right to a jury, if he had such a right. However, we do not care to put the
The plaintiff, however, insists that, even if the question of actual fraud is eliminated, there still remains enough in the case to require judgment to be entered in his favor, the claim being that, inasmuch as the transfer of title to the stock was evidenced only by the delivery of the certificates indorsed in blank, and not by transfer upon the books of the company, as required by our statute, such transfer was such a concealment as to amount to a conclusive presumption and proof of fraud as a matter of law; that, as the transfer of the stock was not made before the death of Price, it could not be made thereafter so as to vest the legal title thereto in the Mulvanes, and, at most, they had only such equitable lien on the stock as would entitle them to receive the amount paid for the same ; that the blank assignment of the certificate of stock was but a power of attorney from Price authorizing the transfer of the title upon the stock-books, which power of attorney his death revoked; that it required the transfer on the stock-books of the company in the lifetime of Price to transfer the ownership of the stock, and this not' having been done the transaction must be deemed to be fraudu
All of these questions, and, perhaps, some others analogous thereto, will be solved by determining the effect, as between the parties thereto, of the transfer of stock by a simple passing from the vendor to the vendee of the certificates of stock indorsed in blank. Somewhat is made of the provisions of our statute upon the matter, which is as follows :
“The stock of any corporation created under this act shall be deemed • personal estate, and shall be transferable only on the books of the corporation in such manner as the by-laws may prescribe ; and no person shall at any election be entitled to vote on any stock, unless the same shall have been standing in the name of the person so claiming to vote, upon the books of the corporation at least thirty days prior to such election; but no shares shall be transferred until all previous assessments thereon shall be fully paid.” (Gen. Stat. 1901, § 1286.)
It will be observed that this statute provides that the manner of the transfer of stock upon the books of the company shall be prescribed by the by-laws. It does not appear in this case that any by-law concerning this matter had been adopted.
The stock in a corporation is personal estate. The stock is something apart from the certificates. These but evidence a fact which otherwise exists. They are but paper representations of an incorporeal right, and,
Certificates of stock are frequently spoken of as securities, but they are not such,' in the proper signification of the term. They have none of the characteristics of negotiable paper; they are simply paper evidences' of the right of the holder to the interest in the corporation described in them. While they are non-negotiable, in the ordinary acceptation of that term, yet they possess one of the attributes of negotiable paper, that of being assignable as between vendor and vendee, pledgor and pledgee, by simple delivery when properly indorsed, and, when thus transferred, pass the title to the extent intended by the parties thereto, as between such parties, not only to the paper evidence of title, but to the shares of stock themselves. The authorities extend this rule no further. As against the corporation itself and third parties claiming rights under the corporation, of course this rule would not obtain. Indeed, it has been held that a provision in the governing statute, declaring that no transfer pf corporate stock shall be valid for any purpose until such transfer shall have been entered on the books, must be limited in its application to the objects sought to be accomplished by the statute, which objects refer to matters growing out of the stockholder’s relation to the corporation and its creditors, and does not make invalid an unregistered transfer, as between vendor and vendee. (Johnson v. Underhill et al., 52 N. Y. 203.)
The foregoing views are fully sustained by the discussion found in Thompson on Corporations, section 730, and Cook on Corporations, section 381.
In Plumb v. Bank of Enterprise, 48 Kan. 484, 29
It is a matter of common knowledge that the constant practice of the commercial world is to pass title to stock in corporations, or impose thereon the burden of collateral obligations, by a simple passing, from hand to hand, of the indorsed paper certificates of stock. Vast volumes of business are transacted upon the faith that such transfer is perfectly good as between the parties thereto who act in good faith, without a formal transfer upon the stock register. We think it is, and so hold. Now, as the court below held as a matter of fact that neither Price nor the Mulvanes were guilty of fraud, and that the Mulvanes paid a full consideration to Price for the stock in question, and as these questions were settled upon the weighing of conflicting evidence by the court, acting within the scope of its authority, we must hold that the transfer from Price to the Mulvanes vested in the Mulvanes, as against Price or any one claiming under him, the full beneficial use and right to the stock, whether such right be called an equitable or legal right, or both, and gave to the Mulvanes the right to have such transfer registered on the stock-books at any time.
We see nothing in the case to require any change of the burden of proof. That burden rests upon the one asserting fraud. Fraud was the gravamen of plaintiff’s action. It must be determined upon'the entire evidence. These considerations require us to resolve all of the contentions of the plaintiff in error against him.
The plaintiff was not allowed to show by a witness what Price had said to him about having at one time pledged his stock or portions of it as security for his debts. Such evidence would be hearsay, and, so far as is shown in the record, immaterial. We think it was properly excluded.
There are some other claimed errors arising upon the rejection of evidence. We have examined them all and are satisfied that no error was committed in relation thereto. •
A motion for a new trial was filed upon the ground of newly-discovered evidence. The affidavits in support of this ground were made by the .attorneys for plaintiff, and covered matters which they believed one John R. Price would testify to upon another trial, which matters Price himself had disclosed to them in conversations had since the conclusion of the trial. These matters were material and probably a sufficient showing of diligence was made. The defendants, however, filed an affidavit of Price denying in toto the truth of the matter set out in the affidavits filed by plaintiff, and denying that he would testify to the
Upon a full consideration of all the points in the case, we find no error manifest, and hence affirm the judgment.