Opinion
Argued December 9, 1887
Decided January 17, 1888
Wm. J. Gaynor for appellant. Robert Ludlow Fowler for respondent.
The sole question in this case is whether the offer to return the stock certificates was sufficient to enable the plaintiff to rescind; and that inquiry turns in the end upon the effect of those certificates as a transfer of the stock. The certificates are not the stock, but the evidence of its ownership. When the plaintiff accepted the stock in consideration of the rights which he transferred, that stock became his, and the certificate given him was the company's acknowledgment of that ownership. After receiving it he could transfer the stock to whom he pleased. He did transfer it, formally, at least. He surrendered his certificate and requested the issue of three new certificates to his infant children, the eldest of whom was four years old, and the youngest, two months. His request was fulfilled. The stock was transferred on the corporate books to the infants, and the company's formal certificate of their ownership delivered to the plaintiff. Upon the stock book the plaintiff signed three several receipts in the name of each of his children for the stock so issued to them, but says he kept the certificates in his safe and said nothing to the children about them. That he should thus take care of the certificates as their agent, as he had already so acted in signing their receipts, and should say nothing to them about the matter was a natural consequence of their tender age, and not at all inconsistent with a completed and perfected gift. But he says he did not give the stock to his children, and whether as between him and them the gift was executed and complete has been debated at the bar. We need not determine that question since at all events as between himself and the company he had induced the latter to recognize and admit the ownership of the children, and become unable as against them to deny that ownership. The transfer on the books of the company, and the issue of the new certificates, was a continuing affirmation by the corporation of ownership of the stock by the infants named in the certificates, and opened the door to an estoppel in behalf of claimants acting in good faith. The theory of a rescission is that the party proceeded against shall be restored to his original position. The plaintiff cannot rescind if he retains in himself or withholds through another any fruit of the contract. Here, as between the company and the infants, the latter had been vested with the title and the corporation prima facie put under a new duty or obligation to them. The surrender by the father of the three certificates might tend to prevent any transfer in good faith from the children, and make difficult an estoppel in behalf of others, and yet that the corporation is not restored to its original position is evident from the fact that if it accepted the tender made and restored what is now sought to be recovered it would still be exposed to a claim of the infants that the stock was theirs, and be compelled to bear the risk of the inquiry whether the gift was executed and complete, and would be exposed to litigation over that question and under circumstances in which the father, now unwilling to admit a gift, might become rather willing than otherwise and confess some intention or purpose in that direction. That would be very far from restoring to the company its original position. He who would rescind must rescind wholly, and leave no right flowing from him outstanding which imperils the completeness of the rescission.
We are, therefore, of opinion that the case was properly decided and that the judgment should be affirmed, with costs.
All concur.
Judgment affirmed.