250 Mass. 246 | Mass. | 1924
This is an action of tort for the conversion of one hundred shares of the preferred and twenty shares of the common stock of the defendant corporation, and comes to this court by report, after a finding for the plaintiff in the Superior Court.
The plaintiff purchased the stock in question in 1921 from one George J. Chamberlain. Thereafter Chamberlain told him that it would be for the plaintiff’s advantage to exchange said stock for stock in the Fisk Rubber Company, whereupon the plaintiff indorsed the certificates in blank and delivered them to Chamberlain. About a week later Chamberlain informed the plaintiff that this exchange could not be made, and suggested that the certificates be kept in his (Chamberlain’s) safe deposit box while the plaintiff was away. (It appeared that the plaintiff was a woodchopper and that it was his custom to go into the woods each fall.) The plaintiff assented to the above suggestion and the certificates were retained by Chamberlain. Two days later the defendant received an application for a loan of $500, for which these certificates were to be pledged as collateral. The application purported to be signed by the plaintiff, but this signature was forged. The defendant, believing the signature to be genuine, mailed to the plaintiff at 22 Center Street, Holyoke, Massachusetts, care of George J. Chamberlain, a letter containing a note for $500, payable in instalments of $50 per month, and a collateral agreement dated September 2, 1922, to be executed. The address to which this letter was sent was the one shown on the books of the defendant as that of the plaintiff. About September 21, 1922, the defendant received back the note and collateral agreement, each bearing what purported to be the plaintiff’s signature, both of
The loan wMch the defendant undertook to make was to the plaintiff, who was the true owner of the stock, and not
This case is to be distinguished from those in which “ the owner of stock knowingly places in the hand of another the certificate therefor, either indorsed in blank or by a separate instrument of transfer and power of attorney,” in which it is held that “ the person to whom the certificate and instrument are delivered can pass a good title by delivery or pledge regardless of the relations between him and the owner. This is not on the ground that the certificate becomes a negotiable instrument, but on the ground of estoppel, because the owner, having given another such indicia of title as clothes him with the appearance of ownership, is precluded from setting up title in himself as against a holder in good faith.” Baker v. Davie, 211 Mass. 429, 436. Scollans v. E. H. Rollins & Sons, 179 Mass. 346. Russell v. American Bell Telephone Co. 180 Mass. 467. Furthermore, the delivery of the certificates of stock by Chamberlain to the defendant not having been authorized, the plaintiff may reclaim them because the defendant is not a holder for value. G. L. c. 155, § 33. No value passed to the plaintiff; and the defendant’s bank, which had the duty of determining whether the signature of the payee was genuine, paid the check not as ordered by the defendant, but upon a forged indorsement. Jordan Marsh Co. v. National Shawmut Bank, 201 Mass. 397. The custom stated in the report, as to certificates of stock indorsed in blank being regarded as bearer certificates passing by delivery from hand to hand and being considered negotiable, cannot affect the rights of an owner, in case of an unauthorized transfer of his stock, to recover it from one who has paid the owner no value for it, and who received it to secure payment of the owner’s forged note.
The sale of the stock by the defendant at public auction
The finding for the plaintiff was warranted.
In accordance with the terms of the report, judgment is to be entered for the plaintiff in the sum of $529.75, with interest from December 29, 1923.
So ordered.