Ryle v. Manchester Building & Loan Ass'n

*844 The opinion of the court (the foregoing statement of the case having been made) was delivered by Green, J.

This action was brought to recover the matured value of live shares in the stock of the defendant association. The defence was a previous payment thereof to the plaintiff’s authorized agent.

It has been said that a shareholder cannot sue at law for the recovery of the value of full-paid stock, but must proceed in equity. End. Build. Asso. (2d ed.), §§ 117, 118. This notion has some countenance in Campbell, Receiver, v. Perth Amboy Association (1901), 38 Vroom 71 , but it is now settled in this court that, whatever be the truth under different conditions, when a board of directors has power to declare that a series of shares has matured, and does so declare, a shareholder in this series ceases to be a member and becomes a creditor entitled to sue at law. Cunningham v. Mutual Loan and Building Association (1905), 43 Id. 175, 179, 181 .

Eirsl. The first point made by the counsel of the plaintiff in error has been considered in Belcher v. Manchester Building and Loan Association, ante p. 833, and is determined by that case. If anything further need be said, it is that, if possible, there is in the present case less suggestion of an agency in William H. Belcher. At the original taking of the five shares by the plaintiff, the evidence was that she was represented by her husband and the association by Belcher. The latter was not her agent for the purpose of making air investment, much less for the purpose of collecting a debt. The leaving of the plaintiff’s pass-book in the hands of W. PI. Belcher, however injudicious that act may have been, was for convenience only, to the end that he who was to receive the'dues for the association might, for the advantage of all concerned, enter the payments, as and when made, in the pass-book. That Belcher had no real or supposed authority to receive the value of the shares was plainly shown by the making of the check for $1,000 payable to the order of the plaintiff herself. Herein the proof of the conduct of the defendant accords with the contention of the plaintiff, and *845 the evidence admitted of but one conclusion. The question as to Belcher’s actual or apparent authority to draw the money was therefore one for the court, and not for the jury. Gulick v. Grover and Holmes v. Grover (1868), 4 Vroom 463 ; Agricultural Insurance Co. v. Fritz (1897), 32 Id. 211.

Second. It does not avail the defendant that W. H. Belcher’s declaration of his own authority was admitted without objection, and was not subsequently contradicted by the plaintiff. She had already denied the authority on the part of Belcher to act for her in any business, and a subsequent contradiction was not needed to maintain her action. As evidence for the defendant, Belcher’s statements were clearly irrelevant, for they were not shown to have been made in her presence, or in anywise brought to her knowledge. Furthermore, it is settled law with us that the declarations of the person alleged to be the agent, although accompanying his acts, are not competent to establish either the fact or the extent of the authority. Gifford v. Landrine (1883), 10 Stew. Eq. 127; affirmed, Id. 628; Dowden v. Cryder (1893), 26 Vroom 329, 332 .

Third. The failure of the plaintiff to demand and collect the money value of her shares upon .the maturing of the shares, or shortly afterward, may not lawfully be construed as a ratification of Belcher’s act in drawing and using the money. This is manifestly so for two reasons:

(a) The fact of the maturing of the shares, and the fact of Belcher’s drawing the money value thereof, are not shown to have been made known by anyone to the plaintiff until after Belcher’s disappearance. Ratification of Belcher’s actions cannot be inferred from anything that the plaintiff did or failed to do while she was without full knowledge of all the facts and circumstances of the case. Gulick v. Grover and Holmes v. Grover (1868), 4 Vroom 463 , 471; Titus et al. v. Cairo and Fulton Railroad Co. (1884), 17 Id. 393, 420; Dowden v. Cryder (1893), 26 Id. 329, 333 . After the plaintiff acquired knowledge of the matter her conduct imported no ratification.

*846 (&) The contention of the defendant on this point is, in effect, that if a creditor whose claim is ripe for action sleeps •at all upon his rights, the debtor may discharge his obligation by paying the money to some other person who, having opportunity, asserts his authority to receive it. The existence of statutes for the limitation of actions refutes this proposition. If its soundness had been established at an early period in legal history, the necessity for such statutes would have been largely diminished, inasmuch as the fact in human experience which calls for a statute of repose is that many persons do, for some reason or no reason, refrain, for longer or shorter periods, from prosecuting matured claims. .The law permits this, but within such limits as shall preserve the rights of parties defendant as against the loss of evidence and other untoward consequences of delay. The preservation of such rights does not, however, involve liberty of payment of debts to persons destitute of authority to receive them.

Fourth. The direction of a verdict for the plaintiff was not erroneous. What was said on this point in the case of Belcher against the same defendant association is pertinent here.

The judgment of the Passaic Circuit Court is affirmed.

For affirmance — The Chancellor, Chief Justice, Garrison, Port, Hendrickson, Pitney, Swayze, Reed, Trenchard, Bogert, Vrbdenburgi-i, Vroom, Green, Gray, Dill, J.J. 15.

For reversal — None.