259 Mass. 495 | Mass. | 1927
This is a suit whereby the plaintiffs seek to recover ten shares in the Boston Real Estate Trust wrongfully pledged,by one Burroughs. The case was referred to a master. His report has been confirmed and a final decree entered dismissing the bill. No evidence is reported. The facts found by the master must be accepted as true. Goldband v. Commissioner of Banks, 245 Mass. 143, 146.
The plaintiffs, in June, 1925, decided to sell thirty shares in the Boston Real Estate Trust represented by a single certificate standing in the name of a testatrix of whose will they were executors. This trust was an unincorporated association managed by trustees, the beneficial interest in which was represented by transferable shares. The plaintiffs arranged for the sale with one Burroughs, the leading specialist in this class of securities, with whom the plaintiffs had dealt extensively for a number of years, whose reputation was excellent and who was trusted by all the parties. A price was fixed for which it was thought the shares could be sold, but the representative of Burroughs suggested that it probably would be necessary to split the single certificate into smaller units, because each share had a par of $1,000 and thirty shares was a large block to sell to any one purchaser. This suggestion was accepted in behalf of the plaintiffs. Thereafter the certificate for thirty shares was delivered to the representative of Burroughs, accompanied by a blank power of attorney executed by the plaintiffs. To save time in effecting a transfer after sale, the plaintiffs also provided the necessary probate papers showing the authority, of the plaintiffs to sell the shares. It was intended that the shares represented by the single certificate should be split into such blocks as Burroughs should sell, and all necessary papers were furnished to that end. Immediately on receipt of the certificate with accompanying papers, Burroughs presented them to the transfer agents and received in return six certificates each for five shares in his own name. Of this transfer the plaintiffs had no knowledge. Burroughs immediately thereafter indorsed in blank each of these six new certificates and for value pledged three of them with the Old Colony Trust Company and three with the State Street
The single question to be determined is, whether the plaintiffs are entitled to prevail on these facts. The precise point is, which of innocent persons must suffer for the wrongdoing of another. Burroughs obtained from the plaintiffs possession of the certificate for thirty shares with all the indicia of title and instrumentalities for complete transfer of title with the express understanding that the certificate should be divided into smaller ones for purposes of sale. If it was the convenient way of facilitating the sales and completing the transactions, it doubtless would have been within the scope of the authority conferred to take the new certificates in the name of Burroughs. But, however that may be, the plaintiffs entrusted Burroughs with the power to demand such new certificates in his own name, and the transfer agents had no alternative save to comply with the demand of Burroughs for such new certificates. When he had secured the
Interlocutory and final decrees affirmed with costs.