Braley, J.
The plaintiff by the amended bill seeks to recover seventy-seven shares of the capital stock of the Fort Worth Stock Yards Company as well as nineteen and one quarter shares, which were issued as a stock dividend upon the seventy-seven shares, and dividends in cash which have been declared and received upon all the stock. A final decree granting relief in damages has been entered against the defendant Simpson from which he has not appealed. But, the decree having confirmed the alleged transfer to the defendant Niles of the stock and his right, to retain the dividends, the plaintiff appeals, contending, that on the master’s report Niles should not only return all of the stock but account for the cash dividends.
The plaintiff’s title to his original holding of one hundred and twelve shares, although in issue before the master, wbo apparently established his ownership, is now undisputed; but Simpson, who at the time was his employer, desiring to obtain a loan from the Montpelier National Bank, borrowed the plaintiff’s certificate and, with shares of his own in the same company sufficient to make up the amount required, pledged three hundred and thirty-seven shares to the bank as collateral security. The transfer in blank, which the plaintiff signed on the back of his certificate, states, that the shares are sold, assigned and transferred “as. collateral,” with a blank power of attorney with the right of substitution to transfer the shares on the books of the company. The master finds that the plaintiff subsequently received from Simpson thirty-five shares which had not been hypothecated, leaving seventy-seven shares to be returned. The note after several renewals was transferred with the collateral to the Stock Yards National Bank of Fort Worth, Texas, for money lent by that bank to Simpson to take up the first loan, by which it was held until transferred to the Continental National Bank, which held the stock as security for two promissory notes, the proceeds of.which were also used by Simpson to pay the Fort Worth bank. It is during this period that the defendant Niles actively came to the financial support of Simpson, and the last notes after several renewals were consolidated into one note on which Niles became a guarantor under an agreement with Simpson, the substantial parts of which read as follows:
“First: Said Niles shall promptly give a written guarantee to [573] said Continental National Bank to pay said note of twenty-five thousand dollars ... at its maturity; and also to pay at maturity any and all other notes given to said bank in renewal thereof and maturing on or before said January 1st, 1909, and he shall, if said Continental National Bank refuses to renew a note, and said Simpson places a loan for twenty-five thousand . . . dollars at any other banking institution, promptly give a written guarantee to pay a note for twenty-five thousand dollars . . . maturing on or before said January 1st, 1909;
“Second: Said Simpson agrees to pay said Niles for such guaranty ten thousand dollars . . . and, upon payment of said note or of any renewal thereof, or of any substitute therefor, either by himself or by said Niles, to deliver to said Niles said three hundred and thirty-seven . . . shares of stock, which shall be held for the following purposes and with the powers hereinafter stated, viz: Said Niles shall hold and may sell said three hundred and thirty-seven . . . shares of stock at any time after January 1st, 1910, provided said Simpson does not before such sale pay said Niles all sums advanced or paid by him on account of the liability herein assumed, with interest thereon, and ten thousand dollars;
“Third: Said Niles agrees to account to said Simpson for any surplus to which he may be entitled upon a sale of the stock; and upon such an accounting, or upon payment of all sums to which he is entitled under this agreement, to deliver said three hundred and thirty-seven . . . shares of stock to said Simpson.
“This agreement shall bind the respective parties and their executors and administrators.”
Although the plaintiff is found to have known of the rehypothecation to the banks succeeding the first lender, he was ignorant of this agreement or that at the time of its execution Simpson had given an order on the Continental National Bank to deliver the plaintiff’s certificate to Niles upon his payment of the indebtedness, the amount of which remained unchanged. But having paid the bank and ultimately received all the certificates, Niles without the knowledge of the plaintiff made application to the company to issue to him in his own name a new certificate for all the shares. The plaintiff’s ownership, shown on the face of the certificate, coupled with his signature to the transfer in blank preceded by the words “as collateral,” was sufficient notice not merely to the [574] - first pledgee, but to the subsequent pledgees as well as to Niles, that the original transfer was conditional. Allen v. Puritan Trust Co. 211 Mass. 409, 420, and cases cited. The plaintiff’s title consequently could not be divested except by strict foreclosure, or by an absolute transfer from him; or, in other words, the source and nature of the title fully appeared on the certificate itself. Jacobs v. Saperstein, 225 Mass. 300, 303. Mayor & City Council of Baltimore v. Whittington, 78 Md. 231. Thomas v. Flint, 123 Mich. 10.
The defendant Niles, moreover, when he applied for the transfer, was expressly informed by the assistant secretary of the company, that “there should also be an assignment from Mr. Crosby, itemizing the certificates . . . which he transfers,” and “the assignment by Mr. Crosby to the Montpelier Bank was for the purpose of collateral.” It was not until the defendant had given his personal guaranty to the company and Simpson had informed the secretary that he was the sole owner of all the certificates, and directed the company to pay the dividends to the defendant, that the new certificate for three hundred and thirty-seven shares was issued to Niles in his own name, on which he has received the stock dividend and the cash dividends previously mentioned. Jt is manifest that the plaintiff is not bound by the secret agreement • between Simpson and Niles, and neither of the twain by what had been done acquired any greater title than that held by the pledgees.
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Braley, J.
The plaintiff by the amended bill seeks to recover seventy-seven shares of the capital stock of the Fort Worth Stock Yards Company as well as nineteen and one quarter shares, which were issued as a stock dividend upon the seventy-seven shares, and dividends in cash which have been declared and received upon all the stock. A final decree granting relief in damages has been entered against the defendant Simpson from which he has not appealed. But, the decree having confirmed the alleged transfer to the defendant Niles of the stock and his right, to retain the dividends, the plaintiff appeals, contending, that on the master’s report Niles should not only return all of the stock but account for the cash dividends.
The plaintiff’s title to his original holding of one hundred and twelve shares, although in issue before the master, wbo apparently established his ownership, is now undisputed; but Simpson, who at the time was his employer, desiring to obtain a loan from the Montpelier National Bank, borrowed the plaintiff’s certificate and, with shares of his own in the same company sufficient to make up the amount required, pledged three hundred and thirty-seven shares to the bank as collateral security. The transfer in blank, which the plaintiff signed on the back of his certificate, states, that the shares are sold, assigned and transferred “as. collateral,” with a blank power of attorney with the right of substitution to transfer the shares on the books of the company. The master finds that the plaintiff subsequently received from Simpson thirty-five shares which had not been hypothecated, leaving seventy-seven shares to be returned. The note after several renewals was transferred with the collateral to the Stock Yards National Bank of Fort Worth, Texas, for money lent by that bank to Simpson to take up the first loan, by which it was held until transferred to the Continental National Bank, which held the stock as security for two promissory notes, the proceeds of.which were also used by Simpson to pay the Fort Worth bank. It is during this period that the defendant Niles actively came to the financial support of Simpson, and the last notes after several renewals were consolidated into one note on which Niles became a guarantor under an agreement with Simpson, the substantial parts of which read as follows:
“First: Said Niles shall promptly give a written guarantee to [573] said Continental National Bank to pay said note of twenty-five thousand dollars ... at its maturity; and also to pay at maturity any and all other notes given to said bank in renewal thereof and maturing on or before said January 1st, 1909, and he shall, if said Continental National Bank refuses to renew a note, and said Simpson places a loan for twenty-five thousand . . . dollars at any other banking institution, promptly give a written guarantee to pay a note for twenty-five thousand dollars . . . maturing on or before said January 1st, 1909;
“Second: Said Simpson agrees to pay said Niles for such guaranty ten thousand dollars . . . and, upon payment of said note or of any renewal thereof, or of any substitute therefor, either by himself or by said Niles, to deliver to said Niles said three hundred and thirty-seven . . . shares of stock, which shall be held for the following purposes and with the powers hereinafter stated, viz: Said Niles shall hold and may sell said three hundred and thirty-seven . . . shares of stock at any time after January 1st, 1910, provided said Simpson does not before such sale pay said Niles all sums advanced or paid by him on account of the liability herein assumed, with interest thereon, and ten thousand dollars;
“Third: Said Niles agrees to account to said Simpson for any surplus to which he may be entitled upon a sale of the stock; and upon such an accounting, or upon payment of all sums to which he is entitled under this agreement, to deliver said three hundred and thirty-seven . . . shares of stock to said Simpson.
“This agreement shall bind the respective parties and their executors and administrators.”
Although the plaintiff is found to have known of the rehypothecation to the banks succeeding the first lender, he was ignorant of this agreement or that at the time of its execution Simpson had given an order on the Continental National Bank to deliver the plaintiff’s certificate to Niles upon his payment of the indebtedness, the amount of which remained unchanged. But having paid the bank and ultimately received all the certificates, Niles without the knowledge of the plaintiff made application to the company to issue to him in his own name a new certificate for all the shares. The plaintiff’s ownership, shown on the face of the certificate, coupled with his signature to the transfer in blank preceded by the words “as collateral,” was sufficient notice not merely to the [574] - first pledgee, but to the subsequent pledgees as well as to Niles, that the original transfer was conditional. Allen v. Puritan Trust Co. 211 Mass. 409, 420, and cases cited. The plaintiff’s title consequently could not be divested except by strict foreclosure, or by an absolute transfer from him; or, in other words, the source and nature of the title fully appeared on the certificate itself. Jacobs v. Saperstein, 225 Mass. 300, 303. Mayor & City Council of Baltimore v. Whittington, 78 Md. 231. Thomas v. Flint, 123 Mich. 10.
The defendant Niles, moreover, when he applied for the transfer, was expressly informed by the assistant secretary of the company, that “there should also be an assignment from Mr. Crosby, itemizing the certificates . . . which he transfers,” and “the assignment by Mr. Crosby to the Montpelier Bank was for the purpose of collateral.” It was not until the defendant had given his personal guaranty to the company and Simpson had informed the secretary that he was the sole owner of all the certificates, and directed the company to pay the dividends to the defendant, that the new certificate for three hundred and thirty-seven shares was issued to Niles in his own name, on which he has received the stock dividend and the cash dividends previously mentioned. Jt is manifest that the plaintiff is not bound by the secret agreement • between Simpson and Niles, and neither of the twain by what had been done acquired any greater title than that held by the pledgees.
The defendant, however, contends in avoidance, that when the pledge was transferred to the Fort Worth bank the plaintiff consented to an absolute passing of his title, and thereby terminated his ownership; or that by force of the form of transfer, to which the master finds he assented, he is now estopped from claiming the shares or any interest therein. But the separate blank assignment by the Montpelier Bank, although it was unrestricted in form and the plaintiff knew and assented to it, operated only as a transfer of the bank’s title under the pledge. The plaintiff’s assignment and power of attorney has never been used, but remained in blank. It is urged that the plaintiff by his assent constituted the bank his agent to transfer title with the same effect as if the bank ■owned the shares, thus depriving himself of the stock, which transaction of course would directly enure to the sole benefit of Simpson, [575] who in all the migrations of the certificate never has appeared thereon even as the ostensible owner. The plaintiff at no time conferred any authority upon Simpson to act as a general agent. His authority was limited to making a pledge of the stock for his own debt, the sole purpose for which it was borrowed. And the defendant, dealing with a special agent, was bound to inquire and ascertain the extent of Simpson’s powers. A. Blum Jr.’s Sons v. Whipple, 194 Mass. 253. Lovett, Hart & Phipps Co. v. Sullivan, 189 Mass. 535. Hall v. Bates, 216 Mass. 140. Castle v. Mayer, 217 Mass. 38. The bank’s assignment furthermore does not purport to be by the bank acting as the agent of the plaintiff. It runs in the name of, and is executed by the bank acting through its cashier and vice president. It is true that the master finds as we have said that the plaintiff knew of, and assented to the transfer'to the Fort Worth bank, but we are" satisfied on the entire record that the plaintiff never intended to part with, or to waive his ownership, or to make a gift to Simpson. We perceive nothing in St. 1903, c. 423, § 1, which changes the nature of the transaction. If the words “as collateral” had been omitted, then the certificate indorsed in blank would have been a sufficient delivery to transfer the title as against all persons. Gurley v. Reed, 190 Mass. 509, 512.
The defendant fails to bring himself within the principle that a purchaser for value in good faith from one entrusted with the apparent title and absolute ownership of personal property is protected from the prior right of the true owner and pledgor because the pledgor is estopped from showing the true state of the title. Munroe v. Stanley, 220 Mass. 438, 445.
The master’s finding that the plaintiff “became the owner of the one hundred and twelve shares of stock, ... on April 22, 1902, and still is the owner of seventy-seven shares” must stand.
The relief asked is for specific performance against each defendant. The decree, after reciting that Simpson is chargeable with conversion and assessing damages therefor, held Niles liable only for a very small sum which he owed Simpson on an accounting as between them. While Simpson undoubtedly can be cast in damages, the master’s report shows that the value of Simpson's own stock, which Niles received, is more than sufficient to discharge Simpson’s indebtedness on the note with interest. The plaintiff, [576] although bound by the pledge of his stock for the note or notes thereby secured, is not bound to pay the “bonus” as provided in the contract of guaranty.
It follows that the decree must be reversed, and a decree with costs is to be entered which not only shall grant appropriate relief as to Simpson, but directs Niles to deliver to the plaintiff a certificate for “ninety-six and one quarter shares” of the capital stock of the Fort Worth Stock Yards Company, and to account for all cash dividends which he has received on this stock, with interest thereon from the date of filing the amendment to the bill to the date of the entry of the decree.
Ordered accordingly.