99 Pa. 344 | Pa. | 1882
delivered the opinion of the Court, January 23d 1882.
It was held at first that in an action on the case for deceit against a party who had sold a personal chattel to the plaintiff, to which he had no title, that it was necessary to aver a scienter: Dale’s Case, Cro. Eliz. 44; Roswel v. Vaughan, Cro. Jac. 196. But this doctrine was subsequently exploded, and an averment of possession considered sufficient, as the vendor must be intended cognizant of his own title, the sale being necessarily an affirmation of title. Cross v. Gardner, Carth. 90; Medina v.
Shares of stock in a corporation are choses in action, giving a right to dividends and an interest in the capital. The certificate is the evidence of such ownership, and there can be no doubt that if the certificate is forged, or the holder is not such bona fide, so that ho lias no claim on the corporation, the vendor would be liable to his vendee on the implied warranty of title. His possession of the certificate would be as to his vendee possession of the stock, just as possession of a bond or note is possession of the debt which they represent. Where, however, there has been a fraudulent over-issue of stock, evidenced by certificate under the genuine seal of the corporation, the case presented is somewhat different. It has been settled, that a corporation is liable to bona fide holders of such fraudulent certificates, because, like individuals, they are responsible for the fraudulent exercise of the power intrusted by them to their officers or agents. It is unnecessary, in this case, to consider whether they are bound to permit a transfer on their books and to deliver a new certificate to the bona fide vendee. It may be that when the over-issue is in excess of the amount authorized by the charter, they would not be. But it seems to be established, upon principle as well as authority, that the bona fide holder of such a fraudulent- certificate would have a right of action against the corporation, and that his measure of damages would be the market value of his stock at the time the transfer was demanded: Willis v. Philadelphia & Darby R. R. Co., 6 W. N. C. 461, and eases cited in the opinion of Judge Hare. The vendor of such a certificate has then a title which ho can transfer, and a remedy against the corporation. Suppose the shares in the case before us had been transferred by an original subscriber, his vendee would have been in the same position as the assignee of shares subsequently issued in excess of the charter. He would have had a clear right to demand a transfer and new certificate. Such certificate, however, would liave been worth to him only the value of the stock in the market at the time. If his transfer had been refused, he would be entitled to the same remedy and the same measure of damages. The vendor of shares of stock certainly does not warrant the solvency of the corporation. Corporations are especially liable to be made insolvent by the embezzlement and fraud of
Judgment affirmed.