157 Pa. 75 | Pa. | 1893
Opinion by
This action is brought to recover damages for the wrongful refusal of the defendant company to transfer one hundred shares of its own stock at the instance of the exequtors of the former owner.
For the purpose of the present contention it may be assumed that the stock did really belong to Thomas Livezey, the decedent, in his lifetime, and at the time of his death, though the testimony of the plaintiffs casts serious doubt upon that subject. Assuming then that Thomas Livezey, the decedent, was the true owner of the stock, he executed a will which was duly probated after his death in May, 1884. For more than six years after his death his executors, these plaintiffs, held the stock without selling it or making any demand for its transfer. Presumably therefore its transfer was not needed for the payment of any debts, or, for that matter, of any legacies either, and in point of fact was not needed for either of these purposes.
When the executors applied to have the stock transferred it was in consequence of a sale of it having been made by them to a third person. In those circumstances it was not only the right, but the duty of the defendant to inquire into the right of the executors to make the sale. A copy of the testator’s will was therefore requested by the defendant and was furnished to them bjr the executors. When the will was examined by the counsel for the defendant he was of opinion that the stock was held in trust by the executors during the life of the widow, and that they had no power to sell it, both because it was a part of the trust fund, and because it was a depreciated security which the testator directed his executors not to sell but to hold for a rise. The counsel for the defendant however
It is not necessary for us to consider or decide now, absolutely, tbe question whether or not, if the proper parties were before us, in a proper proceeding, instituted for the purpose, a decree should be made empowering the executors to make sale of this stock, and directing the defendant company to make the necessary transfers of it, because the present is not a litigation for that purpose, nor is any such proceeding pending, nor any such question before us. The defendants did eventually waive the question, and made the transfer at its own risk; nor is that circumstance of the slightest consequence, in considering the question that is before us, and that is, whether a recovery in damages can be had in this action as for a wrongful refusal to transfer.
The situation of the case and the parties, and the question of the right of the plaintiffs to have- a transfer, and the duty of the defendant as to permitting a transfer, were much complicated by the conduct of the plaintiffs during the correspondence and while the subject was under discussion.
The first application for the transfer was made in October, 1890. Replying to this on October 20, 1890, the treasurer of tbe company said it would bo necessary to have a certified copy of the will of Thomas Livezey. This seems to have been furnished on October 28th, as a letter of the 29th from the treasurer .says that the matter has been referred to the defendant’s attorney, and that if he decides that the transfer is made in accordance with the will it will be made as desired. On tbe 31st he wrote again saying that the attorney decided the transfer could not be made under the provisions of the will. Then on
So far the communications between the parties were conducted upon the theory that the stock belonged to Thomas Livezey, the decedent. On April 22,1891, Thomas Livezey, the son, and one of the executors, wrote to Mr. Baxter, the treasurer of the defendant company, claiming that the stock was his and that the executors had nothing to do with it, and that the company had no right to transfer it to the executors. On October 14, 1891, Thomas Livezey again wrote to Mr. Baxter, asking for new certificates in place of his old ones, and saying that he had settled all his obligations with the estate and that George Woolery, to whom the stock had been sold and a written transfer made, had nothing to do with them any more. On October 22, 1891, he again wrote to Mr. Baxter, challenging the right of the company to transfer the stock to the executors because it was his stock, and saying the executors had nothing to do with it. On November 9,1891, Mr. Stanton wrote to Thomas Livezey in answer to the letters of October 14th and 22d, saying that the executors had formerly applied to have the stock transferred to George Woolery, and that the company declined to do so, because it was held in trust under the will, and saying further that now he, Thomas Livezey, the son, claimed that the stock was his and never belonged to the estate at all, and offering that if the executors would now write the company a letter stating that the stock did not belong to his father at the time of his death, but that it belonged to him, the son, and would explain how it happened to be put in his father’s name, the company would transfer it to him upon the ordinary trans
(Signed)
John Livezey,
A. L. Livezey,
Executors.
It thus appears that by the end of December, 1891, the claim of title to the stock had been entirely changed, and that all the executors participated, first, in claiming that the stock belonged to Thomas Livezey, deceased, and that his title enured to them as his executors ; and, second, in claiming and asserting, in formal written communications, addressed to the treasurer and the counsel for the defendant company, that the stock belonged to Thomas Livezey, the son of the testator, that it was only held by his father as collateral security, and that the executors had no title to it. In this very remarkable and contradictory state of affairs, the real condition of the title became a matter of great uncertainty, and accordingly Mr. Stanton, on January 15, 1892, wrote to Mr. Thomas Livezey, reciting the contradictory assertions which had been made by him and the executors, and saying that he was at a loss to understand how it was that they had all joined in a petition addressed to the orphans’ court, in whidh they asserted that the stock belonged to Thomas Livezey, deceased, and formed part of the assets of his estate, and asking quite emphatically for ,an explanation of the discrepancy before he could advise a transfer. To this the only reply that was sent was by letter of Thomas Livezey of January 27,1892, saying he only wanted new certificates as the old ones were written over, and that he did not ask a transfer to any one. To this Mr. Stanton replied that no new certificates could be issued except to the executors of Thomas Livezey, deceased, and if they would apply for them they would be so issued. To this
It will be observed that the defendant company at no time refused, willfully or arbitrarily, to transfer the stock, but agreed to do so at several times, either if a satisfactory decree of the orphans’ court could be obtained, or a transfer to the executors would be accepted, or if the executors would disclaim all title, to Thomas Livezey himself. But none of these conditions was complied with, and the defendant was confronted with a trust in the will which gave the stock as a part of the testator’s personal estate to trustees for the life of the widow and to distribute the same after her death to the children, and secondly, they were met by two conflicting and contradictory claims of title to the stock, the executors participating in both. How was the company to act in such circumstances ? They could not comply with both demands. The claim of title by Thomas Livezey personally was made while the correspondence with respect to the claim by the executors was pending, and before it was completed. And to make the matter much worse and more complicated, the executors themselves acquiesced in that claim and signed a letter disclaiming title in themselves. It is not to be wondered at,that they finally refused to make any transfer except to the executors. In such a condition of conflicting claims the company was not bound to take any risk of the title of the true owner. They had notice of the trust and were therefor bound by its terms, and they also had notice of the claim of title by Thomas Livezey which was sanctioned by the executors in a written communication to the defendant company. They had a right to be protected by a judicial decree in an adversary proceeding in which all parties interested should or might intervene, before they could be convicted of
We thinlc this case comes within the principles established in a very carefully considered opinion by Mr. Justice Strong in Bayard v. Farmers’ and Mechanics’ Bank, 52 Pa. 232. It was an amicable action and case stated to recover damages for an alleged wrongful refusal to transfer stock by a bank, which as agent of the commonwealth had issued certificates of the five per cent stock of the commonwealth to Thomas F. Bayard, trustee of Mary Gilpin. After her death Mr. Baj^ard sold $4,000 of the stock to a third person and by power of attorney authorized its transfer to his vendee. The bank refused to permit the transfer until the terms of the trust were submitted to their attorney, and he should be satisfied that the sale was made in due execution of the trust. This Mr. Bayard declined to do and brought the action. The court below gave judgment for the defendant which was affirmed by this court. Judge Strong, in delivering the opinion, said: “ Passing by the question whether the defendants, being mere agents of the commonwealth, are liable to damages at the suit of the plaintiff, even for a wrongful refusal to permit him to transfer the stock, we come immediately to the question whether their refusal was wrongful. Certainly they were under no obligation to permit a transfer, if their permission would have exposed them or their principals to a sucessful claim by any one for the replacement of the stock or for its value. In a certain sense, they were custodians of the rights of stock owners. With them was the registry, and transfer could be made only with their consent by the surrender of the certificates and the issue of new ones to the transferee. A purchaser of stock does not receive the certificate of his vendor, but a new one made out in his own name, and reciting nothing contained in the former. He is therefore protected in the enjoyment of his purchase, even though there was no right to make the transfer to him. For this reason an unauthorized transfer is a wrong done to the owner of stock, for which not only the person who makes it, but any one knowingly assisting in the wrong, is responsible. That a bank or other corporation, and also these defendants, are trustees to a certain extent for stockholders — that is, for the protection of individual interests — cannot be denied. They
It is not necessary to prolong the citation nor to refer to other
Judgment affirmed.