NICHOLAS BERCICH, Respondent, v. GEORGE T. MARYE, Appellant
Bercich v. Marye
NICHOLAS BERCICH, Respondent, v. GEORGE T. MARYE, Appellant.
NICHOLAS BERCICH, Respondent, v. GEORGE T. MARYE, Appellant.
Liability of Broker to True Owner for Stolen Stock Sold. Where a broker received in the course of trade a transfer in blank of stock in a mining company, organized under the laws of California, which had in fact been stolen, and sold it: Held, that he was liable to the true owner for its value and damages.
Stock in "California Minino Company, Not Negotiable. Under the laws of California the legal title to mining stock, except as between the parties, can be acquired only by transfer upon the bo.oks of the corporation.
Agency no Defense to Action of Trover. A person is guilty of conversion who sells the property of another without authority from the owner, notwithstanding he acts under the authority of one claiming to be the owner and is ignorant of such person’s want of title.
Measdré of Damages in:¡ Statutory Action for Claim and Delivery of Personal Property. The market value of stock at the date of conversion is the measure of damages in the action of trover; but in tk.e statutory action of claim and delivery of personal property, in case a return cannot be had, the value of the stock at the day of trial, with the dividends that have been paid upon it- as damages for detention, is the only complete indemnity.
Appeal from tbe District Court of tbe First Judicial District, Storey County.
This was an action under tbe statute on claim and delivery of personal property., sucb as is usually known as an action of replevin. Tbe plaintiff demanded tbe restitution of certain mining stock described in tbe opinion or its value • and damages in tbe sum of seven hundred and seventy dollars in case a return could not be had. It appeared that the stock had been taken to defendant, who was a stockbroker in Virginia City, by a person giving his name as Bernarge. Defendant received and sold it, and, after deducting his commission and charges, paid over the balance of the proceeds to Bernarge. As a matter of fact the stock had been stolen from plaintiff, who, as soon as he found out his loss, published notice thereof. On November 8, 1873, when demand was made upon defendant by plaintiff for the stock, Belcher was worth $77 50, and Caledonia $7, per share. It also appeared that $95 in dividends had been declared on the Belcher stock before the trial, and that $70 of it had actually been paid. Plaintiff had judgment for the return of the stock, or, in case a return could not be had for $724, as the value thereof, and interest from November 8, 1873, and costs; and for $95 damages for detention, which latter sum was afterwards reduced by the court below to $70. Defendant appealed from the judgment.
If. AT. Stone, for Appellant.
I. The certificates of stock should be regarded as negotiable instruments. They were received in good faith from the apparent owner, to whom defendant paid the proceeds after he had sold the stock in the board of brokers. The Iona fide holder of a lost or negotiable instrument acquires the title as against the true owner. 2 Parsons on Bills and Notes, 264, et seq.
II. Supposing that the stock was non-negotiable, yet the defendant here in his capacity of broker acted merely as the agent or bailee of the person who brought the stock to him to sell. There was no intention on his part to convert the stock to his own use, or to apply the proceeds to his own use. He cannot therefore be regarded as a purchaser converting the property. He had no notice of the claim made by plaintiff to the ownership until after he had. sold the stock and paid over the proceeds. Rogers y. Sine, 2 Cal. 571; Grumtrey v. Fisher, 1 Car. & Payne, 190; 44 Mo. 544; 41 Ala. 539.
III. There was error in assessing as damages the amount of dividends paid on the Belcher stock after plaintiff lost it. Defendant never at any .tibie received any part of such dividend; and if he was liable in any event to plaintiff for the value of the stock, such liability could not embrace something he had never received. If defendant converted the stock, and we claim that he did not, the measure of damages would be the value of the stock at the time of its conversion,with legal interest as damages for the conversion. The conversion, if any, occurred when defendant received and sold the stock. The dividends were declared after the sale, and of course were received by whoever held the certificate at the time such dividends were paid by the company. Boylan v. Euguet, 8 Nev. 358.
Lewis & Deal and J..A- Stephens, for Bespondent.
I. The statute fixes the rule for the measure of damages in cases of this character, and this Court has never sought to establish any other. Blaclde v. Gooney, 8 Nev. 46. The case of Boylan v. Euguet, 8 Nev. 345, was an action in trover, and has no bearing upon this case. The damages allowed were the dividends which were actually paid on the Belcher stock between the time the stock was stolen and the time of the trial. It is true defendant did not receive the dividends; - but that has nothing to do with the rights of plaintiff. He should not be placed in any worse position by the failure of defendant to deliver the stock than he would have been had the stock been delivered.
II. Defendant was not the innocent agent of Bernarge in receiving and selling the stock, but must be held to have received it with notice that it was the property of some one other than Bernarge. Although he did not intend to do wrong in receiving and selling it, his ignorance of the law will not free him from his legal liability. The corporations mentioned in the complaint were organized under the statute of California, and their stocks were not negotiable except in the manner pointed out in the law. See Hittell’s Gen. Laws, 932. Defendant acted at his peril when he received them, and legally was as much liable for the stocks as Bernarge. If, for the convenience of his business, he took the chances, he cannot escape liability on account of his lack of prudence. Edwards on Bailments, 93; Hoffman v. Garoxo, 20 Wend. 22; Weston v. Bear River and Auburn M. and M. Go., 5 Cal. 186; Nayler v. Pacific Wharf Go., 20 Cal. 529. Plaintiff had the right to follow his property and take it wherever found, or in case it was sold, to hold any one responsible who sold it.
III. Defendant claims that he should be exempt from liability, because he was innocent of any intended wrong and because he had the right to suppose from the nature of the certificates that they were the property of Bernarge. But courts have not placed stocks on the footing of negotiable paper, even when no statutes are in force providing the mode of transfer; and it would certainly be an unheard-of thing to hold that certificates may be transferred like bills of exchange, when the statutes of California provide a mode of transfer which destroys all similarity between them and bills of exchange.
By the Court,
Belknap, J.:
Judgment in the alternative was rendered against ,the defendant for the restitution of five shares of the capital stock of the Belcher Silver Mining Company and twenty shares of the capital stock of the Caledonia Silver Mining Company, or the value thereof, and damages, under section 202 of the Practice Act. The shares were transferred in blank and were stolen from the plaintiff. The defendant is a broker, engaged in buying and selling mining stocks. He received the certificates stated in the usual course of his business from a stranger, sold them upon commission and paid him the proceeds. The first objection Made by the appellant is that certificates of stock should be treated as negotiable instruments, and the defendant being a bona fide holder for a valuable consideration no recovery can be had against him.
By the statutes of California under which the Belcher and Caledonia Silver Mining Companies were incorporated, it is enacted: "The stock of the company shall be deemed personal estate, and shall be transferable in such manner as may be prescribed by the by-laws of the company; but no transfer shall be valid, except between the parties thereto, until the same shall have been so entered on the books of the company as to show the names of the parties, by and to whom transferred, the number and designation of the shares, and the date of the transfer. 1 Hittell's Gen. Laws, p. 148, Sec. 9. This restriction upon the transfer of stock determines the question of negotiábility adversely to appellant. The legal title to the shares, except as between the parties, can be acquired only by transfer upon the books of the corporation. Any other form of assignment is merely equitable as against the corporation and is subject to its liens or claims. Union Bank v. Laird, 2 W. 390; Shaw v. Spencer, 100 Mass. 382; Mechanics' Bank v. N. Y. & N. H. R. R. Co., 13 N. Y. 599.
It is next objected that as the defendant was the innocent agent of the person from whom he received the shares of stock, without knowledge of the felony, no judgment should have been rendered against him. It is well settled that agency is no defense to an action of trover, to which the present action is analogous. In applying this doctrine the supreme judicial court of Maine said: "If the principal is a wrong-doer, the agent is a wrong-doer also. A person is guilty of a conversion who sells the property of another, without authority from the owner, notwithstanding he acts under the authority of one claiming to be the owner, and is ignorant of such person's want of title. Kimball v. Billings, 55 M. 147; Koch v. Branch, 44 Mo. 543; Hoffman v. Carow, 22 Wend. 285.
In ascertaining the measure of damages the court allowed the market value of the stock at the date of conversion. Such is the rule in trover; but this is a statutory action for the return of the property or its value in case a delivery cannot be had, and damages for the detention. Upon failure to return the property in specie the statute provides for the indemnification of the owner. The value of the stock at the day of trial, together with the dividends that have been paid upon it, as damages for the detention, is the only complete indemnity in such case. O'Meara v. North American M. Co., 2 Nev. 112; Boylan v. Huguet, 8 Nev. 355, and cases there cited. Eor this the judgment must be reversed and a new trial granted.
It is so ordered.