Bond v. Mount Hope Iron Co.

A, owned twenty shares in the stock of a corporation, the certificate of which stood in his name, and fifty shares, the certificate of which stood in the individual name of B., the president of the corporation, as collateral security for A.’s promissory note; both certificates expressed to be transferable by A. and B. respectively, on producing this certificate,” and to be subject to a by-law which prescribed conditions precedent to any sale of the stock. After complying with the by-law, A. sold the seventy shares to C., to whom he gave an assignment of the twenty shares on the back of the certificate thereof, and a separate assignment of the fifty shares subject to B.’s claim. C. paid A.’s note to B.vs clerk, who receipted in B.’s name for the payment on the back of the certificate of fifty shares, and gave it up, with A.’s note, to C., all in the presence and with the knowledge of the treasurer of the corporation, of whom C., having both certificates and assignments with him, asked a transfer of the seventy shares and the issue of new certificates thereof in C.’s name. This the treasurer refused, on the sole ground that A. had not complied with the by-law; but afterwards took from C; copies of the two assignments, and promised to send him new certificates at the end of a week. Not having then received them, B. wrote to the treasurer, again demanding a transfer and new certificates; and, receiving no reply, sued the corporation for conversion of the shares, waiving all his own claim or right therein and offering to transfer the same to the corporation. Held, that C. might maintain the action; that it was immaterial that B. ivas sick at the time of C.’s demands and until after the bringing of the action, and so could not sign any transfer or certificates; and that it was also immaterial that 0. did not leave the old certificates with the treasurer, if copies of the assignments were all that the treasurer required of him.

Tort, with a count in contract, for the conversion of seventy shares in the capital stock of the defendant corporation. At the trial in the superior court, before Vose, J., there was evidence tending to show that George W. Bond, a brother of the plaintiff, owned the seventy shares, in two lots, one of twenty shares, (for which he held the certificate in his own name,) the other of fifty shares, which he had pledged to Albert Field to secure the payment of a note for upwards of $6000, (the certificate of which stood in the name of Field, who was the president of the corporation, as collateral security, and was so expressed on its face); that the plaintiff bought all these shares from George W. Bond, who indorsed upon the back of the certificate of the twenty shares a formal assignment of all his right, title and interest therein to the plaintiff, and executed a separate assignment to the plaintiff of all his right, title and interest in the fifty shares, describing them by their numbers, setting forth fully the pledge of them to Field, and reciting that the assignment was made subject to Field’s claim. It further appeared that the certificates were expressed to be transferable by George W. Bond and by Field respectively, “ on producing this certificate,” and to be “ subject to such conditions as are imposed by the by-laws of the company,” the ninth article of which was as follows: “ When any member of this corporation shall be desirous of selling any of his shares, he shall first offer the same to the directors of this company at the lowest price at which he will sell said shares; and if the company shall pay to him such price he shall thereupon sell and transfer said shares to the company or to whomsoever they may elect to receive the same; provided that if the company shall neglect to take and pay for said shares within six days after such offer, then they may be disposed of to any person, and no shares shall be transferred until the requirements of this by-law have been complied with.” The other material facts are stated in the opinion. The plaintiff waived all his claim or right in the seventy shares, and offered to transfer the same to the company. The judge ruled that the measure of damages was the value of the stock; and directed a verdict for the plaintiff for $10,782.80, being the amount of such value at the time of the alleged conversion, (assessed by an auditor whose finding was not disputed by either party,) with interest from that time. The defendants alleged exceptions.