286 Mass. 264 | Mass. | 1934
This bill in equity is brought to recover from the defendant Ruth A. Waldron one hundred thirty-five shares of the capital stock of the Troy Blanket Mills, alleged to have been obtained by the defendant J. Murray Walker & Company, Inc., from the plaintiff by false representations and delivered by the defendant corporation to the defendant Waldron without consideration, and with notice to her that the stock belonged to the plaintiff.
The case was heard by a judge of the Superior Court who found the following facts: For some time before November, 1931, the plaintiff had bought and sold securities through J. Murray Walker & Company, Inc., dealing with one Thayer, an agent of the corporation. As the result of those operations she had lost most of her property, but had kept two hundred seventy shares of the Troy Blanket Mills. Thayer induced her to borrow money upon this stock for the purpose of enabling her to get other securities in an attempt to recoup her losses. He told her that (as the stock was not listed it would be necessary for him to have the stock certificates to determine the amount which would be loaned. She agreed that he might have them for that purpose, and if the information was satisfactory she would borrow the money. Thereafter she delivered to him two certificates of this stock for one hundred thirty-five shares each; they had no blank form of transfer on the back thereof. While at the safe deposit vault she executed in blank an irrevocable stock power in standard form for each certificate, and gave these powers to Thayer. He agreed to let her know within a day or two what amount would be loaned. The next day she called up the defendant J. Murray Walker & Company, Inc., and stated that she did not desire to make the loan and asked for a return of the certificates. She was told that they had been sent out of the city, and that when they were returned she would get them. She had difficulty in seeing Thayer or any one connected with the defendant company who would admit knowing about the matter. When she succeeded in seeing such a person she was given evasive answers. She never was able to obtain either certificate. She executed an instrument of which
The judge found that the defendant Ruth A. Waldron was the owner of seventy-five shares of stock of the New England Telephone and Telegraph Company; that she desired to sell twenty-five of these shares and buy certain bank stock with the proceeds. She never had done any business with the defendant J. Murray Walker & Company, Inc., but went to its office and arranged for it to sell twenty-five shares of her stock, and to buy stock of the National City Bank and the Guaranty Trust Company with the proceeds. She delivered the seventy-five shares of the New England Telephone and Telegraph Company and obtained a receipt in her name stating “25 to sell and 500 shares to be returned in the name of above.” Later she received a memorandum that the twenty-five shares had been sold, and that the bank stock had been purchased, and she received a check to her order for a small balance. She did not receive the new certificates for several weeks thereafter, but found that her certificate for seventy-five shares had been received by the company and that new certificates for seventy-five shares had been issued in the names of other persons. She immediately went to the defendant J. Murray Walker & Company, Inc., and demanded her certificates but failed to receive them. Thereafter she went to the defendant company with counsel and demanded collateral security if her stock could not be delivered, but her demand was not complied with; later she was told that the company would be able to give her security on the following morning. The next morning she was given certificate numbered 128 of the Troy Blanket Mills for one hundred-thirty-five shares of stock. This certificate was made out in the name of the plaintiff, and had thereon the proper revenue stamps, with cancellation date of December 9, 1931, together with stock power above referred to signed by the plaintiff. A
The defendant company was petitioned into involuntary bankruptcy on December 30, 1931, and a receiver was appointed. It was adjudicated a bankrupt January 12, 1932, and a trustee was elected March 8, 1932. The judge
As stated by the trial judge the question to be decided is “which of two innocent women will have to suffer loss by the knavery of one or more officers or agents of the defendant. J. Murray Walker & Company, Inc.” The certificate of stock representing one hundred thirty-five shares of the Troy Blanket Mills with an assignment thereof signed by the plaintiff, who appeared thereon to be the owner of the shares thereto attached, was delivered to the defendant Waldron by the defendant company. She took the certificate of stock in good faith and without notice of the lack of authority on the part of the transferor. In these circumstances it is plain that she obtained a good title to the certificate, and to shares which it represented. She took the stock as collateral to secure the debt owed her by the defendant company and is entitled to hold it as against the plaintiff although the defendant company, its officers and agents, by such transfer, had grossly defrauded the plaintiff. Upon the facts found it is apparent that the defendant Waldron obtained a good title to the certificate, and to the stock represented thereby. See G. L. (Ter. Ed.) c. 155, § 27. The evidence amply
Ordered accordingly.