Maxwell v. National Bank

50 S.E. 195 | S.C. | 1905

February 20, 1905. The opinion of the Court was delivered by The agreed statement of facts is found above. It was held in the former case of Maxwell v.Foster, 67 S.C. 377, that the defendant, National Bank of Greenville, received the certificate of stock from Foster with knowledge of facts, which should have put it on inquiry as to the plaintiff (Maxwell's) rights, and that the bank took no higher title thereto than Foster had. Foster held the stock as the plaintiff's trustee, the bank was chargeable with notice of the trust and took subject to it. Therefore, if the defendant bank had itself collected dividends, as charged in the complaint, it would have to account to the plaintiff for the dividends just as it was held liable to account for the stock. The defendant, however, did not collect the dividends for which the plaintiff sues, but, on the contrary, they were collected by Foster and retained by him. The inquiry, therefore, is narrowed down to the question whether the defendant owed any duty to plaintiff to collect the dividends and thus prevent Foster from receiving them.

By delivery of the certificate to Foster, with his signature to the blank assignment and power of attorney on the back of it, the plaintiff made Foster his agent or trustee, and empowered him to collect the dividends. It is true, Foster took the certificate subject to the plaintiff's right to require him to account for the stock and the dividends; and a stranger, like the bank, with notice, could not take the stock or dividends free from the trust; but no one could annul the assignment or revoke the trust except the plaintiff himself. It was not the duty of the defendant to prevent the exercise of a right by Foster which the plaintiff had seen fit to confer upon him. The actual entry of the transfer to Foster on the books of the American Bank, which was made at defendant's instance, and the issue of new stock in Foster's name, contributed nothing to his power or authority to receive the dividends, for that had already been conferred by the plaintiff's assignment and power of attorney. It said in 22 A. E. Ency. Law, 907: "Where corporate stock is pledged, and there is a delivery of the stock with a power of attorney in blank to transfer on the books, and an assignment in blank on the back of the certificate, the pledgee has the right to receive from the corporation any dividends accruing while he holds the stock. It is not only the right but the duty of the pledgee of the stock to collect such dividends; and the fact that no transfer has been made on the books of the company is immaterial." See also 2 Thompson on Corp., sec. 2180.

The defendant bank was not the pledge of the plaintiff, but, on the contrary, plaintiff recovered the stock on the ground that it had committed a wrong against him in taking the stock from Foster, to whom plaintiff had confided it. Certainly it is not for the plaintiff to say the bank should have committed a further wrong by collecting dividends he had by his endorsement of the certificate authorized Foster alone to collect. In addition to this, it appears from the answer of Foster in the former suit that he claimed a right to hold the stock as collateral, and with this, as we have seen, would have gone the right to collect the dividends. The defendant not only owed no duty to the plaintiff to adjust the dispute between him and Foster as to the right to receive the dividends, but any attempt by it to do so would have been officious. On the other hand, when the plaintiff wished to revoke the authority he had given Foster, he should have given notice to the American Bank not to pay dividends to him. The plaintiff's loss is due to his own larches in not giving such notice or taking some steps adequate to stop payment of dividends to Foster.

The judgment of this Court is, that the judgment of the Circuit Court be reversed.