*1 Weaves v. Babeen. of Statement case. D. Weaver, P. Respondent, Solomon James Barden,
Appellant. capital incorporated personal The company ; stock of an property it has not, nor has the ownership, certificate or other evidence of title or qualities negotiable paper. of commercial or rule, purchaser aAs assignee capital or of shares of in a stock cor- poration acquires no other or assignor has, better title than the seller or subject equitable legal rights persons. and takes it to the of third property except cannot of owner be voluntary divested his own consent, title, act and or give some act which would be effectual to as against him, to other movable and choses in action. rightful title, If owner has invested another the usual or with evidence of dispose an apparent authority it, of he will not be to make allowed purchaser against claim consideration, dealing an innocent for a valuable upon apparent ownership right disposition. faith such or purchaser protection to the of a equity To entitle court of legal prior equity, purchaser title or a he must not be a without notice, actually but must be for a valuable consideration paid; paid purchase-money, part thereof, he must have or or some something upon purchase, the faith of value prior right equity. he had notice of the given before Mere purchase-money, pre-existent debt, or a credit is not sufficient. partly precedent payment stock is transferred partly Where debt and paid time, for a consideration at the regarded will not be having prior as a .equity, holder value one title or assignment precedent so far as the was received in debt J., (Gboveb, dissenting), but is entitled to lien for the amount paid, amount, repayment to a consideration before he will required reconvey stock. question (The authorities is a holder for who value discussed.) collated and answer, general give denial in an defendant has Under evi- controverting any necessary facts to be established dence but prove a defence founded matter. not to plaintiff purchased complaint alleged in substance that certain shares plaintiff’s was, stock, knowledge assent, stock but person, subsequently who a third transferred same to transferred transfer, Held,, etc. that under latter refused to prove pur- that he a bona could not general denial (cid:127) J.) (G-boveb, for value. chaser April 30, 1872.) 28, 1872; decided February (Argued 1872.] v. Barden. *2 Allen, Court, per
Opinion of J. the from, Appeal the Term of of General judgment entered in the Court fourth department, judicial Supreme in favor defendant of an order reversing judgment at decision of the court was entered upon Special (which of favor plaintiff. judgment directing Term), the stock transfer of thirteen shares of Action to compel The of Hew York. the Knickerbocker Stage Company of in the sufficiently facts appear opinion. As for the the reversal C. Keeler
S. appellant. fact, of the court will not behind the look questions 664; v. Ins. 35 N. Liverpool Co., Y., (Morse findings. id., 38 to stock was Duzer, v. Van 487.) Baldwin in Finch. 33 (Thatcher Candee, How., not vested v. 145.) is in v. of (Grant presumption support Every judgment. 21 Y., 22 Carman v. Morse, 323; Pultz, id., N. Under 547.) could title out of issue defendant show general 14 Barb., v. Hud. R. R. Frost, 536; v. (Robinson Schuyler 653; R. Miller v. 40 Co., Decker, id., Defendant id., 228.) awas 20 v. W. (Saltus Everett, purchaser. 285; v. 22 Talman 1 267; id., Labosh, v. Corum, Hoffman 31 Duer, 354; Crocker N. Crocker, Y., 507; McNeil Tenth National Bank N. Alb. Journal, 5, Law vol. Y., of p. 43; B.
D. Prosser respondent. Allen J. The furnished the consideration for the of transfer of the shares stock from Finch, owner, original made in same been him satisfaction debt due having The stock transferred name from into the assignor. of a son of who also son-in-law of plaintiff, consent of knowledge who transfer had made in knowledge until some time in after the transfer form 1864, by long at the son, the son to defendant. time the trans- referee, in the Finch, fer was, report language “to some extent York.” Hew agent Barden. per Allen, Court, The stock was transferred the son of an 1860, “in indebt- January, part payment from edness said to defendant of over Llewellyn (the son) “ $2,500and the defendant at the same time sold delivered to said at butter, twenty Llewellyn pounds cents dollars, which was per pound, seventy amounting “ of said part indebtedness, aforesaid.” Such paid part purchases of said stock were made defendant’s son, acting *3 agreed his $520, and the sum of the amount agent; as the stock, value of was, said by defendant, credited said indebtedness of the defendant.” Llewellyn by
The evidence is that the butter was sold to the of assignor the stock on third of 1860, the stock January, transferred the day following.
The account between the defendant and Llewellyn was made an exhibit discloses long account, last item commencing 1852; on the debtor side of which of dollars for the charge seventy butter; and the first item on the credit side is the sum of $520 the shares of stock.
The transaction transfer of simply the shares of stock Weaver, and by Llewellyn subsequent entry by defendant, in his books, credit for the purchase-price. 3STo was surrendered, and no voucher given.
The defendant as a consideration nothing the transfer.
The stock of an capital incorporated personal company and it has neither has not, the certificate or property; other evidence of title or of com- ownership, any qualities mercial or negotiable paper.
aAs rule, the of shares of assignee capital stock in no other title than corporation acquires better the seller or takes has, assignor subject of third owner equitable persons. rights rightful his his may own acts from title, estopped asserting inbe other a like character. respect may If he has invested another with the usual evidence title, 289 v. Weave® Babden. 1872.] Court, per Allen, J. or an he will authority it, not be apparent dispose allowed to make claim an innocent purchaser dealing the faith of such apparent ownership jus dispo nendi. v. 9 J. (Dustin Livingston, R., Howe v. 96; McNeil Starkweather,Mass., 244; 17 v. Tenth Nat. Bank, lately decided this court and not reported 325—Rep.]; [46 N. Arnold 1 v. R. I., 165.) Ruggles, owner in fact of the stock did not to another controversy, give the external evidence of and did it, authority dispose not assent or the evidence of placing property, property, with his son.
Whatever was done way divesting was done fraud of his and without property, rights his consent.
An unauthorized sale, for a valuable considera although and withont vests notice, tion title in the vendee higher than was the vendor. possessed (Prescott Deforest, ; Wheelwright id., 471; Depeyster, Williams *4 v. 11 W. Merle, 80; Brower v. 3 Ker., Peabody, 121; 4 Covill v. Hill, Den., The 323). property capital aof is not stock from other corporation distinguishable per and the sonal owner cannot be his divested of property; his own act and consent, or except by property voluntary by some act which would be effectual to title give against him and to other movable choses action. property
The is not the defendant, plaintiff estopped, against of the from referee, the evidence or his findings asserting it. The the stock and the dividends upon to original the defendant title of the is seeks to conceded, plaintiff under had no title or make title one who legal authority of title fraud and but the evidence transfer, acquired by or assent or of the authority without express implied a title cannot avail Such plaintiff. against rightful National 3 Bank, Seld., The owner. (Pollock as to the or doubt only difficulty right all that is behalf of the claimed recover, conceding value, that he is a defendant, wit, purchaser — IY. 37 Sickels Vol. 290 Babeen. Court, per Allen,
Opinion of the without notice of the title and claim plaintiff, grows title never were out the fact that the evidences in the the title been transferred having from Finch Llewellyn fault corporation directly It not the defendant. and from the latter Weaver, or ease transfer under attorney forged power of the stock. the same name as the holder person rightful his not divested of the title to property A could party the cor over and would have means, remedy his stock and follow transfer, might poration permitting Bank Davis v. Eng reclaim it from the transferee. (See 2 land, 393; v. Boston Water Power Company, Sewall Bing., G., & 30. Allen, 277; McN. Duncan Luntley, here has remedy against corporation the new certificates to transfer issuing permitting careless the son of corporation act com- in the and no transaction, wrongful negligent mited its officers. his
At time of the transfer to the defendant assignor until his death. The continued so was insolvent is to his therefore, of the follow stock into remedy, it, dividends, reclaim with hands of and he title, of his entitled the strength superior is a con valuable recover unless faith. In Crocker v. Crocker, sideration good owner of stock the claimant and 507, rightful bank stock upon the apparent conferred confidence, who had abused third yet party faith recover good allowed to except *5 made on the an advance a for for valuable consideration of the stock. and security faith held that found, facts referee, upon a faith and for valuable shares good owner was dis- and the him therefor, complaint consideration paid by on that missed ground. the defendant that on the was defeated groqnd
The that a title equity superior acquired 1872.] y. Babden. 291 Wbaveb Court, per Alien,
Opinion of or notice of the claim faith without a purchase good title and a valuable consideration defect in the for paid'. that a his views The referee clearly purchase, not claim would alone, notice of plaintiff’s pro- without a and that more than con- tect something good sufficient which would be as a consideration sideration, the'transaction, shield necessary between the parties him the claim of the plaintiff. against rule must be
He consideration val- recognized must and that the defendant uable actually paid, faith of with value his purchase, .the error was in credit pinchase price regarding “a valuable considera- books the account assignor tion paid.” In aof consideration which is to protect speaking ” “ “ latent the terms val
prior equities, price paid ” are terms. uable consideration used convertible (Wil 1 a v. To entitle R., 763, T. loughby Willoughby, 767.) pur chaser court of equity, protection he must not be with prior equity, only purchaser must be a for a out valuable consid notice, but value eration, is, paid. an bond estate, Where pays man purchases part gives incumbrance, before notice an residue, equitable after is bond, of the money, though giving v. 3 P. Naish, Wms., 306; Story
sufficient. (Tourville 2 Here Windsor, Atk., Lord pay v. 630.) not a valuable consideration. price purchase purchase (Har v. 3 Maun Nicholls, Atk., 304; dingham Maundrell, 246-271; Jackson Ves., Cadwell, drell J. C. The decisions Palmer, Jewett v. Cow., 622; to Lord Hakdwicke, are ground, according placed upon is not not if the money actually paid Chan released He from his bond hurt. can equity. “ entitle rule as To Walwobth down the follows: lays cellor to the character purchaser, party must- prior right equity, party notice *6 Weaves v. Barden. Allen, Court, per have obtained the title to the have legal but must property, or some at paid purchase-money, thereof, or part least, with of value the faith parted something of such he had before notice of such purchase prior right equity.” (De Mott v. Stanley, R., Barb. Ch. and see Caldwell 403); Bartlett, Duer, 341; Keyes Hasbrouck, In id., 373.) Root v. French W. was held (13 a 570),'it while transfer of a fraudulent a goods by buyer purchaser faith, and who value "for good them, gave is, paid at them the time of the transfer, made them, advances upon incurred the credit of or received responsibilities upon them, them in loaned pledge money property hold them, strength might goods against seller, owner who had been defrauded of that a trans them, original a fer of the to bona creditor of the fraudulent goods pur fide chaser debt did not constitute pre-existing a a creditor bona consideration. valuable purchaser v. Harrison Butler cited with (Cowp., 565) approval, it was held that which the mere to the credit money passing where there is another, new credit nor np given, acceptance sum new bills or advanced in it was a consequence, The situation of the was not payment. party changed, he had That is all that nothing. was done defendant here. The same is affirmed principle Padgett v. Lawrence that the (10 170), chancellor Paige, holding title to who receives convey ance thereof consideration of indebted merely upon prior ness of the is not entitled to as a bona protection grantor without notice of third purchaser, prior equity person But the a valid therein. which relinquishment security his debt, before held for and which cannot him in so as to the same situation recovered, substan place as he to his prior tially purchase, may him to such This entitle case is cited with protection. in Peck v. Mallams This Seld., court, (6 545). approval held v. Robinson (22 564), Wood mortgagee who taken to secure debt was mortgage precedent *7 y. Barbee. 1872.] Weaver Opinion Allen, Court, per J. latent
not entitled to protection prior equity. 1STothing against at the and advanced time, security up, given there neither was definite contract for credit extending held on the demands the creditor. down Judge lays Deeio “ and all the When concurred: broadly, proposition judges or a made, is of taken, consideration conveyance security an antecedent debt, which grantee taking party is not looked as a bona security “ purchaserand again, it is well settled who does not incumbrancer grantee at the sub time, advance takes interest anything assigned The doc ject any prior equity attaching subject.”, that a trine valuable consideration is to create necessary defence is the doctrine of prior equities, against courts in States and in as other to the trans equity England, applied in fer of real or choses action other personal property, instruments. The than has been negotiable difficulty “a what is valuable consideration.” determining that the mere admitted It existence prece- generally is not sufficient consideration a con- dent debt to support in some it is held but States prior equities; veyance an made in absolute satisfaction when payment will be as a debt, regarded purchase purchase antecedent that is the rule in this But not State. (Dickson value. Tillinghast, Paige, 215.) the rule has the transfer of been applied
In this State notes, promissory taking party bills of exchange an of or antecedent debt as security them surrendered or credit obliga no new given, when as bona has holder incurred, regarded tion but the third having persons prior equities, value with those not been entire harmony decisions sister some of our United States Court Supreme in this instruments rule as applied negotiable States. individual criticised quarreled has been State it has come directly judgment, whenever but judges, J. R. Bay announced Coddington (20 first doctrine, between adhered The claim to. distinguish has been 637), Barden. Court, per Allen, commercial instruments and other choses in action and pro interests has heen based perty interests supposed and the commerce freest circu necessity giving lation to instruments so used *8 commercial generally transac tions. Bills of and *9 ( Rosa v. Brotherson W. and Bank, supra; 85), fort were cited with and id., Cutler the Payn 605) (13 approval, that a creditor the transfer doctrine receiving negotiable debt without note of precedent payment giving up any all it to takes between the security, subject equities existing reasserted. (See, also, Chrysler Renois, parties, original Here the with or sur Y., 209.) rendered and was, situation no security, respect, the and if the title transaction, which changed by acquired which, is determined the liberal rules in view to be very if the of the convenience not necessities of commerce, instruments, the established respect negotiable be as holder for value so far defendant is regarded of the the was received part pre assignment If sold the butter was the faith of the cedent debt. the defendant would be entitled to be stock, transfer the the amount before stock. reconveying repaid to a lien would be entitled for He price butter. reversed court properly judgment Supreme not a case absolute for but was
referee,
judgment
.
awarded.
A
trial should have-been
Court
much of
judgment
Supreme
gives
So
Weaves
v. Barbee.
Court, per G-boveb,
for the
reversed and
new trial is
judgment
plaintiff
costs to abide event.
granted,
J. The counsel for the
'insists that
respondent
Groves,
is not a final determination
judgment
of the controversy,
and therefore not
this
court. The
appealable
judgment
determines that the
is entitled to the thirteeh shares
plaintiff
of stock, the
and
and
subject
litigation,
adjudges
directs the defendant, within five
after
notice
its
days
and deliver the same to
entry,
assign
plaintiff, together
with all
and
evidence
to the title.
It also
papers relating
determines that the
is entitled
recover
costs
plaintiff
the amount thereof at $403.55,
adjusts
and awards execution therefor
in these
defendant;
final
and the
respects
can at
judgment
once
to obtain satisfaction. But
proceed
further
judgment
determines that
defendant shall account
over
pay
all interest and
him
dividends received .by
stocks,
.referee to take
state an
appoints
account
thereof,
determines
manner
which such
shall
taken,
account
the confirma
provides
this
tion of
shall have
report
judgment
amount so found to have been received
the defendant. In
to this, the
is not final. The
section
respect
Code,
11,
judgment
*10
that an
be
to this court from
provides
appeal may
taken
any
actual
a
determination made at General Term of the Supreme
Court and in
in an
commenced
action
therein or
judgment
In
there from
court.
this
another
case the
brought
judgment
determines
to
stock,
the title
the
actually
the
provides
shall
its
defendant
within five
after notice of
trans
days
entry,
fer the
the
It
awards
same to
also
execution
the
forthwith for
costs.
In
defendant
the
to the
respect
of the interest and
received
dividends
the defend
recovery
by
there
to have been a
and a
ant,
severance
appears
separate
directed
the
This
and distinct
court therefor.
judgment
by
final
novel
resulted from the award of
somewhat
proceeding
the General Term instead of
a new
ordering
judgment
v. Bardent.
1872.1
Grover,
J.
per
Court,
Term.
Special
reversal of
trial
judgment
upon
Adams
v. Fox (27
Butler v. Lee et al. (
to IV. Sickels—Yol. Weaves Basdes. J, Court, per Grover, whom was one. That Finch plaintiff compromised
with his creditors an made with thereafter, agreement in to take the in stock satisfaction of plaintiff question, the balance of his debt. That under this stock agreement L. was transferred question to the son Weaver, and in plaintiff, some matters his York, Sew agent intent to debt. That the satisfy plaintiff’s was of the stocks transferred to L. J. ignorant being Weaver, or of the same in his name the books of being placed That L. J. Weaver company. transferred the subsequently same the defendant, who refused to to the same transfer so to plaintiff, upon do, or to being requested account the dividends to the The facts pay .proved showed that the title to the stocks was L. J. Weaver. the former Finch, owner, the same to be procured assigned him trustee, interest any indicating other It therein. in his person name registered upon the books but the facts that, showed company; proved title, him and the between equitable L. for whom J. Weaver held latter, the stock as trustee. That L. J. Weaver transferred the stock to the defendant, who claimed the title virtue thereof. This established the the stock plaintiff’s defendant, unless he from was a bona L. J. purchaser Weaver. (Crocker fide Crocker, th,e 31 N. To meet case, this substance that was a bona offered to prove of the stocks from J. Weaver. The L. Term Special held, that this was admissible overruling plaintiff’s objection, This was error. under answer. Under denial general the defendant could not introduce evidence show tending a defence founded but such matter, tended fact must to sustain disprove any prove bound his case. this prove, for pur defendant was not pose, L. J. It was for him value of Weaver. to show his enough in the first then to the stock instance, equitable the defendant to show this was incumbent equitable *12 m2.] Weaver v. Barden. Grover, of the Court, per that he bona Mm. Showing
title was barred this but L. would bar equity; from J. Weaver fide matter, and should have founded new this was a defence upon would, and then answer, per the the plaintiff been set up be'en to meet it. Had the evidence have been prepared haps, if could, the defendant so Term, the excluded by Special taken to an amendment of his advised, have steps procure the make defence Had the so as' to admissible. answer, that Term reversed the ground General judgment upon new trial have' admitted, this defence should improperly to the defendant amend ordered enable procure Term terms has ment, power grant, which Special Had Term General ordered deemed reasonable. had therefrom, the defendant the order
trial and appealed affirmed this absolute court, must have been judgment Term But General did ordered. for for the trial, a new but absolute plain order gave judgment of the case can be sustained tiff. disposition Such that no evidence defendant can which the is apparent when answer which the Term has dis under any Special give, when, as authorize, will establish cretionary defence, power has the defendant had occasionto case, in the apply present this (Griffin the exercise of discretion. Marquardt, found show that L. J. Weaver had facts Y., 28.) title stock; transferred this title to the legal claims respondent the defendant. counsel this was available title the' the equitable a bona acquired title although that L. J. Weaver took the reason purchase, But consent without the knowledge title That was title this stock. never legal and his owner, the former to L. J. transferred latter the same to gave transfer of that of equal title and equity this within the familiar comes principle thus the case will equal, parties where equity v. Crocker Crocker This which principle prevail. Weaver Bardes". *13 per Court, Grover, of the was decided. The of time that the (supra) legal length held trustee, or whether taken his name assent, with the owner, cannot affect the equitable between such owner and tona from equities fide the trustee. the trustee has trans Where title and legal fers it to a tona the title of the as to latter, purchaser, fide real has estate, been held to always any prevail to which the estate was equity hands subject trustee. The same is as to true stocks or other any personal This does not result from property. idea nego whether real or tiability but from property, personal, above referred to where that, are principle equities courts of will not interfere to divest the equal, equity title. McNeil v. Tenth (See National Bank, 46 showed that the defendant 325.) proof tona He for the stock in purchaser. paid butter sold part by at the and the residue of the time, price applied pay ment anof account. (Brown Leavitt, Y.,N. existing ; Seymour Wilson, Y.,N. I have examined taken to other exceptions trial as to the rulings upon think evidence, none of them competency well taken. General and the. judgment Terms must Special and a reversed new trial ordered, costs abide event. All concur result, except J., voting. Church, Oh. dissents J., from opinion Allei?, J., defend- Grover, is not ant tona purchaser. reversed.
Judgment notes exchange do consti promissory tute in a measure the medium of great between exchange merchants and take the and from place money, they pass hand hand transferable indorsement or mere delivery, and it that would have been in many thought if, better all cases of transfer of that class of in instruments faith good in the course of business and a ordinary sufficient consideration as the between same had parties, been held valid, to have a title in vested the transferree, good Bay R., v. J. C. affirmed (5 Court for Coddington 54), (20 Correction of Errors J. to the effect 637), title as owner of commercial give rightful paper must transferred, it be received fraudulently transferree' in the course of business and ordinary notice, value, but also for fair and present valuable or allowed at the time, consideration that credit given must and value with on the given strength and that consideration or identical past antecedent paper, debt A was not sufficient. mere or of a bill liability receipt or of or as note security precedent debt has in this been held sufficient to never, State, protect the holder of third equities persons, and must be new credit advance or given, made, some some aor with, debt satisfied and security parted absolutely prior in order to the title of the complete holder. extinguished, v. cited Farington Bank, cases Barb., (See Frankfort the rule has not In this court on from; departed it has been followed recognized v. contrary, Young v. Ker., Boyd Y., N. (2 551); Cummings (17 Leo 101); Bank Russell N. v. County (29 Essex Brown 673); id., Bank New Leavitt York Brown, J., 113). (31 “ Y., N. The rule that if is, (32 553), says: Vandervorst 18Y2.] Barden:. Allen, per Court, or holder of value, parts money, anything note, at the time he receives securities, existing clothed with the faith its paid, ipso being facto In that ease attribute a holder for value.” as a security taken the note in collateral controversy and the bank was at time another note loan made (36 Lawrence for value. In v. Clark held be a holder note it was decided on a party receiving Y., 128), debt, without surrendering relinquishing precedent anot holder it, respecting “ fell due, it had been transferred same. before note, who received plaintiff,” accepted upon payees “ indebtedness of prior part payment existing to them.” v. Frank Coddington v. Bay ; Farrington payees