Argued April 16, 1884
Decided April 29, 1884
A.R. Dyett for appellant.
T.C. Cronin for respondent.
The question here respects the plaintiff's right to recover dividends declared upon sixty-one shares of the capital stock of the Bank of New Berne. These shares became the property of one Satterlee, who owned fifty of them in January, 1867, and the remaining eleven in May, 1869, all of which stood in his name upon the stock ledger of the bank, whose certificates he held as owner. Previous to July, 1869, Satterlee, for a good and valuable consideration, by an instrument in writing, sold and assigned these shares to Anthony S. Hope and transferred to him the certificates. At the date last named, Hope sent to the defendant corporation, such stock certificates and their assignment to him, and demanded a transfer upon the books of the bank. The defendant refused and sent back to Hope the assignments and certificates.
We stop at this point to determine the legal rights of the parties as established by what had occurred. Hope had become the owner of the stock as against Satterlee and as against the bank. By the assignment and transfer of the certificates he had obtained the entire legal and equitable title. ( McNeil v. The Tenth Nat. Bk., 46 N.Y. 331; 7 Am. Rep. 341.) Of this fact the bank had notice, and it became its duty to make the transfer requested on the books. Its refusal was a wrong from which no right could spring. Thereafter the bank was bound to recognize Hope's title exactly as if it had done its duty and made the transfer on its books. The requirement of a registry, existing only for its own protection and convenience, must be deemed waived and non-essential when it wrongfully refuses to obey its own rule. ( Isham v. Buckingham, 49 N.Y. 220; Billings v. Robinson, 94 id. 415.) In Johnson v. Laflin (17 Alb. L.J. 146), the United States Circuit Court said of a sale by transfer of the certificates, "that the transaction between Laflin and Britton was complete without registration of the transfer, and that it is equally complete as to the bank unless the bank had some valid reason for refusing to register the transfer." And such must necessarily be the rule unless the arbitrary consent or refusal of the bank is to determine the validity of a sale which it merely requires to be registered. As easily might it be said that the consent of a county clerk or register was essential to the operative force of an executed deed.
While Hope was thus absolute owner as against the bank, the latter sued Satterlee, and upon an attachment seized and sold Hope's stock, the Bank of Raleigh becoming the purchaser. It is not easy to see how that bank can be deemed a bona fide purchaser, or acquired any right in the property of Hope by an attachment against Satterlee; but assuming the possibility of such a result as flowing from the condition of the registry ( Fisher v. Essex Bk., 5 Gray, 380), yet it seems to us wholly immaterial what rights the Bank of Raleigh acquired, either as against the Bank of New Berne or as against Hope. No such question is here. What occurred, vested in Hope, as between him and the defendant, the entire legal and equitable title in the shares as perfectly as if the transfer demanded had been made. The defendant corporation cannot set up its own wrongful act to defeat the title which passed. After, as well as before the sale to the Bank of Raleigh, Hope remained the owner, as between him and the Bank of New Berne, and entitled to have and receive the dividends declared upon sixty-one shares, and what the bank did, or what obligations it incurred to the Bank of Raleigh, in no respect altered its duty and liability to Hope.
The latter, thus remaining the owner of the stock as against the defendant, transferred it by delivery and assignment of the certificates to the present plaintiff. While Hope remained owner, dividends amounting to $3,599 on sixty-one shares were declared, and while plaintiff was owner further dividends amounting to $915 have accrued, and for this last amount the plaintiff has recovered judgment. A further question is raised over the sufficiency of plaintiff's demand which appears to have been for dividends amounting to $6,680, and so very much too large. The referee found upon the facts that no demand was necessary, and the General Term affirmed the conclusion. The point insisted upon is that the plaintiff was bound to demand a transfer to himself on the books of the bank, and which should be accompanied by notice of the transfer of the certificates to him. Why, when the bank had refused to transfer the stock to Hope upon its books when he demanded it, his assignee should be compelled to repeat the same process in the face of that refusal, we are unable to see. Hope would not have been bound to try again but could have sued without a new request and all his rights passed to his transferee. So that the question comes back to the necessity of a demand. The case principally relied on by the appellant is Southwick v. First Nat. Bk. ( 84 N.Y. 432). The case is not at all pertinent. There the defendant had "lawfully and innocently received the draft and the money paid thereon." He was not and could not be put in the wrong until he had refused restoration. The distinction was drawn in Sharkey v. Mansfield ( 90 N.Y. 329; 43 Am. Rep. 161), and the necessity of a demand denied where the receipt of the money was a conscious wrong. The party already in the wrong would only become more so by a refusal. Here the defendant had explicitly disavowed any obligation to Hope and denied his ownership, and caused the stock to be sold as the property of Satterlee. What had occurred was a distinct denial of Hope's right to the stock or any of the dividends. After such a denial it was not needed that Hope should make a demand to put the defendant in the wrong, for it already stood, deliberately and defiantly, in that attitude. Its action was equivalent to a refusal to pay any one except its own chosen transferee, whose right alone it recognized. Hope himself and his assignee were not bound to make a demand. The refusal was already complete by the defendant's own action. It was of no concern to whom Hope assigned, for the denial of his right was a denial as to those succeeding to that right. The defendant's complaint comes to no more than this: that having once refused it ought to have a new opportunity to repent, solely because the right of action had passed to a new owner. Our conclusion does not stand upon any fancied inability of the bank to pay these dividends, or even to deliver sixty-one shares of stock, but upon the action of the defendant in totally repudiating the whole of Hope's rights.
It is further argued that plaintiff's remedy was an action in equity to compel a transfer on the books, or an action against the bank for its wrong and to recover the damages suffered. That such remedies exist does not alter plaintiff's right to pursue that which he has chosen. Each of those remedies would inevitably stand upon Hope's ownership. To compel the bank to register is to concede the validity of the transfer and found a right upon it, and damages could only be awarded to the extent of the stock and dividends on the same theory. And if, as we have said, Hope became the absolute owner as between himself and the bank, he must be awarded the right of an owner, whatever other remedies exist. The condition the defendant may find itself in we need not consider. There are always consequences of a wrong to a wrong-doer.
The judgment should be affirmed, with costs.