BASSETT, BANK COM. v. THE BROADWAY BANK

The applicant by this motion seeks the return to her of 26 shares of stock of the Pure Oil Co. In December of 1931, the applicant's husband, Adolph Tucker, was indebted to the defendant bank in the sum of $5,200 which indebtedness was evidenced by two notes. When the bank started pressing him for payment of the notes and for some collateral, Tucker, without the knowledge or consent of his wife, took the stock certificates in question to the bank and left them there verbally stating they were left as security for the notes. None of the certificates had been endorsed by Mrs. Tucker nor had she signed a power of attorney for their transfer. The bank has since closed and is now in the hands of a receiver. Held: Since the stock had been delivered to the bank without the knowledge or consent of Mrs. Tucker, the receiver of the bank has no right to withhold them from her. That if Mr. Tucker had had the authority from his wife to make a pledge of the stock it might be held that the Receiver had an equitable lien on the stock, even though to make a valid pledge a written assignment would have been necessary. That the bank cannot be found to be a bona fide holder for value, for the stock certificates without being endorsed were not negotiable. (Secs. 3429, 3433, Gen. Stat., Rev. of 1930.)

INGLIS, J.

The applicant, Sarah Tucker, is the owner of twenty-six shares of the capital stock of The Pure Oil Company, represented by certificates numbered NY/O 102028, C74464 and C55262, and has owned that stock since 1920. Prior to December 1931 she had entrusted those certificates to her husband to be put in his safe at his place of business for safe keeping.

In December, 1931, the husband, Adolph Tucker, was in debted to the defendant Bank in the sum of $5,200., that indebtedness being evidenced by one note for $3,600. and another note for $1,600. The Bank was then pressing him for payment of these notes and for some collateral security for their payment. Finally, without the consent or knowledge of his wife, Mr. Tucker took her certificates to the Bank and left them there stating verbally that they were left as security for his notes. None of the certificates had been endorsed by Mrs. Tucker nor had she signed any power of attorney for their transfer nor did either she or Mr. Tucker sign any document purporting to pledge the stock to the Bank. Thereafter on several occasions an officer of the Bank requested Mr. Tucker to procure Mrs. Tucker's signature to proper powers of attorney transferring the stock. This Mr. Tucker agreed to do but never did. When the Bank closed Mr. Tucker was still indebted to it on the notes and the Bank still retained possession of the certificates. Both the notes and certificates came into the hands of the Receiver and are still held by the present Receiver.

Mrs. Tucker did not become aware of the fact that her husband had delivered her stock certificates to the bank until March or April, 1937, when she asked Mr. Tucker for the certificates and he then informed her that he had left the certificates at the Bank for the purpose (as he told her) of getting advice on the question as to whether the stock might well be sold.

It having been found that in delivering Mrs. Tucker's stock certificates to the Bank Mr. Tucker acted without her knowledge or consent it follows that the Receiver has no right to withhold them from her. If Mr. Tucker had had authority from his wife to make a pledge of the stock it might be held that the Receiver had an equitable lien on the stock even though to make a valid pledge a written assignment would have been necessary.

Thompson, Corporations, 3rd Ed. Sec. 4218.

The evidence, however, does not justify a finding either that Mr. Tucker was acting as agent for Mrs. Tucker in the transaction or that she donated to him the stock to put up as collateral.

Neither can it be found that the Bank took the stock as a bona fide holder for value. The stock certificates without being endorsed were not negotiable.