206 P. 399 | Nev. | 1923
Lead Opinion
By the Court,
This is a proceeding in equity to compel the Goldfield Merger Mines Company, a corporation created under the laws of the State of Washington, to transfer to plaintiff, upon its books, 2,000 shares of its capital stock, evidenced -by certificates No. 6107 and No. 6108, for 1,000 shares each. Upon the filing of the complaint, Catlin & Powell Company, a corporation created under
In April, 1915, the stock of the Merger Mines Company was actively dealt in by brokers and the public. The plaintiff and Charles S. Sprague were copartners, doing a stock-brokerage business under the firm name of Thomas S. Robinson & Co. U. S. Waugh & Co. were stock-brokers at Goldfield, Nevada, and the Catlin & Powell Company were engaged in a general brokerage business in the city of New York. The latter had had numerous prior transactions with U. S. Waugh & Co., with whom its course of dealing was, without exception, substantially as follows: Upon the filling of buying orders for stock, the certificates were shipped by registered mail, with draft attached, for the purchase price, to John S. Cook & Co., bankers at Goldfield, Nevada, with a letter of directions that, upon the payment of the draft, the certificates be delivered to Waugh & Co.
In this instance, the Catlin & Powell Company, upon the receipt of a buying order from Waugh & Co., purchased for them, in due course of its business, 3,000 shares of the Reorganized Booth Mining Company and 3,000 shares of the Merger Mines Company. The 3,000 shares of the Merger Mines stock were represented by certificates Nos. 6107, 6108, and 6110, for 1,000 shares each. All the certificates bore an assignment and power of attorney to transfer the same on the corporate books,
Prior to the institution of this suit, the intervener filed with the defendant corporation an affidavit alleging that the certificates of stock had been stolen, and offered to indemnify the corporation with a bond in double the value of the stock if it would issue to it new certificates, which offer was refused.
Por answer.to the complaint in intervention, setting up these facts more in detail than here stated, the plaintiff pleaded in.bar or for a defense to the action in intervention that the intervener, by its involuntary act and gross negligence, had made it possible for Waugh & Co. to inj ure and deceive plaintiff, and that, by reason thereof, the intervener should be estopped from claiming, as against plaintiff, its title to the shares of stock evidenced by said certificates.
There is nothing in the record to show what disposition was made of the issue tendered by the complaint, answer and reply to the complaint in intervention, except what is to be implied from the findings and
The question for determination on appeal is whether section 385 of the crimes and punishments act (Rev. Laws, 6650) infringes upon or abrogates the rule of law estopping an owner from asserting, as against a bona-fide purchaser, his title to shares of stock transferred in blank from a felon, where the owner was guilty of such negligence or culpable carelessness as to be the proximate cause of the deceit. Section 385 of the crimes and punishments act reads as follows:
“All property obtained by larceny, robbery, burglary, or embezzlement, shall be restored to the owner, and no sale, whether in good faith on the part of the purchaser, or not, shall divest the owner of his right to such property. Such owner may maintain his action, not only against the felon, but against any person in whose possession he may find the property.”
This section has formed a part of the crimes and punishments act since 1861. Stats. 1861, p. 67. The principle expressed therein is the outgrowth of the common law. 2 Blackstone, 449; 2 Kent, 324. It has ever been the law that a thief acquires no title to the property which he steals, and can convey none by any sale and delivery which he may make. Stealing continues stealing by whatever name is given it, and the owner of stolen property may recover it from whose-soever hands he finds it. It is obvious, from the statute
The intervener having filed his complaint in intervention, the inevitáble sequence is that plaintiff had the right to interpose such defense as would in law or equity entitle him to be protected as against the intervener.
The result of the court’s ruling on the motion for a new trial is that the statute makes a sale of property obtained in either of the ways pointed out ab initio void. This is true where no element enters into the transaction other than the criminal act. It was so held in the recent case of Robertson v. C. O. D. Garage Co., 45 Nev. 160, 199 Pac. 356. But we do not perceive the force of the court’s ruling, or of the contention of counsel for the intervener, that the statute was intended and designed to abrogate the general law of estoppel. Conceding that the rule of the statute is that no sale of property so obtained, whether in good faith on the part of the purchaser or not, shall divest the owner of his right to such property, it is manifest in the present ease that the right of the plaintiff to have the stock transferred was not made to depend upon the actual title of Waugh & Co. to the stock, or his authority to deal with Waugh & Co. directly, but from the act of the intervener, which precluded it from disputing, as against plaintiff, a bona-fide purchaser, the existence of the title or power which, through negligence and
But it is contended that the case at bar is distinguishable from these authorities, because of the criminal act by which the certificates were obtained from the true owner, and the force of the statute. In Shaw v. Merchants’ Nat. Bank of St. Louis, 101 U. S. 557, 25 L. Ed. 894, and in Green v. Grigg, 98 App. Div. 445, 90 N. Y. Supp. 565, the court recognizes that, even in cases of theft of such securities, it may be that the true owner by his negligence or carelessness may have put it in the power of a thief to occupy the position of a true owner, and that his negligence or carelessness may estop him from asserting his right against a purchaser, who has been misled to his hurt by that carelessness and negligence. In Barstow v. Savage Mining Co., 64 Cal. 388, 1 Pac. 349, 49 Am. Rep. 705, it was expressly held that a
“But if the purchaser from one who has not the title, and has no authority to sell, relies for his protection on the negligence of the true owner, he must show that such negligence was the proximate cause of the deceit.”
This doctrine is quoted and approved, and supported by the authorities cited in East Birmingham Land Co. v. Dennis, 85 Ala. 565, 5 South. 317, 2 L. R. A. 836, 7 Am. St. Rep. 73. We cannot discover upon what rule of construction the learned trial court could reach the conclusion that the statute infringes upon or abrogates the rule of estoppel established by the above authorities.
Whether, under the uncontradicted facts, the intervener was guilty of negligence and, if guilty, was the proximate cause of the deceit, is not before us, and we pass no opinion upon it. The only question considered upon the motion for a new trial was the construction and legal effect of the statute, but for the existence of which it must be assumed the court would have denied the motion. We therefore restrict our review to the ground upon which the order was made. The court gave the statute an erroneous construction in extending its protection to any and all cases, even though it may have been of the opinion in the particular case that the owner should be estopped by reason of his negligence or carelessness from asserting his right against a bona-fide purchaser, misled to his injury by that negligence or carelessness.
The order appealed from is reversed.
Rehearing
On Rehearing
By the Court,
In the former opinion the position taken was that the only question considered by the trial court in ordering a new trial was erroneously decided, and our order of reversal was restricted and limited to that one question. Upon petition for rehearing we were asked by
It is admitted that the course of dealing, without exception, between Catlin & Powell Company, brokers of New York City, and U. S. Waugh & Co., brokers of Goldfield, Nevada, was that, upon the filling of buying orders of stock for Waugh & Co., the Catlin & Powell Company would transmit the certificates, duly indorsed for transfer, to John S. Cook & Co., bankers at Goldfield, with draft attached, accompanied by a letter of instruction to deliver the certificates to Waugh & Co. upon the payment of the draft. The certificates in controversy were enclosed in a draft envelope, with a draft printed thereon, but not sealed, and inclosed in a mailing envelope with a letter containing the usual directions, and delivered to the stenographer of Catlin & Powell Company, with directions that she transmit the same by registered mail to John S. Cook & Co. But the stenographer, by reason of her mistake and confessed error, transmitted the inclosures, on the 22d day of April, 1915, to Waugh & Co. by registered mail, instead of to John S. Cook & Co., contrary to the instructions as given her by Catlin & Powell Company. The certificates, draft, and letter thus addressed were received by
Applying the rule of negligence discussed in the former opinion to these undisputed facts, if it can be legally determined that the certificates thus appropriated and sold by Waugh & Co. were stolen, Thomas S. Robinson & Co. are not protected as innocent purchasers, because the negligence or carelessness of respondent’s stenographer of itself was not the proximate cause of the theft, though it afforded an opportunity for its perpetration.
“A person who does not lock up his goods, which are consequently stolen, may be said to be negligent as regards himself, but inasmuch as he neglects no duty which the law casts upon him, he is not in consequence estopped from denying the title of those who may have, however innocently, purchased those goods from the thief. * * * ” Swan v. N. B. Australasian Co., 2 H. & C. Reports (Eng.) 179.
This is a true and sound principle expressed in our crimes and punishments act (Rev. Laws, 6650).
It is argued on behalf of appellant Robinson that, upon the undisputed facts, the certificates in question were not acquired by Waugh & Co. through any criminal act, consequently the case comes within the principle that one who, by his own neglect, is responsible for or the cause of a loss, should bear it instead of an innocent party. Obviously, it was upon this theory that the district court decided the case on its merits in favor of the appellant, but granted a new trial upon the theory that the certificates were stolen. In support of the court’s ruling, it is argued on behalf of respondent that Waugh & Co. knew that Catlin & Powell Company had
By greater weight of authority, it is not larceny if the property was innocently received and the intent to appropriate was formed after the mistake was discovered. 18 Am. & Eng. Ency. of Law, 481. See, also, note entitled “Larceny of Money or Property Delivered by Mistake,” 52 L. R. A. 136.
In Rex v. Mucklow, 1 Moody C. C. (Eng.) 160, it was held:
“That if a man takes a letter supposing that it belongs to himself, and, on finding that it does not, appropriates to himself the property it contains, he is not answerable for larceny, there being no animus furandi when he first received the letter.”
To convict of larceny, it is necessary to find that the intent to steal existed at the time of the taking. No subsequent felonious intent will suffice. State v. Clifford, 14 Nev. 72, 33 Am. Rep. 526.
The certificates of stock, duly indorsed for transfer, and quasi negotiable, were received by Waugh & Co. innocently, and their intent to appropriate the stock represented thereby must, of necessity, have been formed after the mistake was discovered. In this situation we cannot say that the conversion of the certificates was, as a matter of law, larceny.
The question of Waugh & Co.’s, asserted criminal act being eliminated from the transaction, the undisputed facts bring the case within the principle that where a loss has been sustained, if occasioned by the plaintiff’s negligence, it should be borne by it, instead of an innocent party. North British & M. Ins. Co. v. Merchants’ Nat. B., 161 App. Div. 341, 146 N. Y. Supp. 725.
In opposition to the application of the rule of estoppel by negligence stated in the former opinion as being applicable to the case at bar, on the authority of Bangor
The order granting a new trial must be reversed.
It is so ordered.