Holden v. Metropolitan National Bank

23 N.E. 733, 151 Mass. 112, 1890 Mass. LEXIS 158

• Court: Massachusetts Supreme Judicial Court
• Decided: February 26, 1890
• Status: Published

Opinion

Holmes, J.

This is the same case which was reported in 138 Mass. 48, but it now comes before us upon agreed facts, which, it is argued, present a new question. The plaintiffs seek to recover the proceeds of the sale of certificates of certain bank stock which stood in the name of the defendant as security for loans. The loans were obtained by Pratt, the treasurer of the Reading Savings Bank, without authority, and he at the same time took certificates of bank stock belonging to the savings bank, had the certificates in question issued in place of them, and delivered the new certificates to the defendant. The plaintiffs seek to recover the proceeds, or if not all, then all above the defendant’s advances, etc., on the ground that its property was converted by the sale, and, the vendors having received the price, the plaintiffs may waive the tort and sue for the money thus received.

The plaintiffs argue the case as if they stood in the same position as when the unauthorized transfer was made by Pratt, and the choice of all remedies was open to the savings bank. The trouble is that they do not. It is expressly agreed that as soon as Pratt’s acts were known, they were repudiated by the trustees and receivers of the bank. This must be taken to mean, effectively repudiated, and the plaintiffs, once having elected, cannot change their mind. Butler v. Hildreth, 5 Met. 49. Met-calf v. Williams, 144 Mass. 452, 454. Besides, it is further agreed that Pratt’s acts never have been ratified.

The foundation of the plaintiff’s argument is that they have a title to, or interest in, the certificates sold by the defendant. But those certificates stood in the defendant’s name, and the plaintiffs by their avoidance of Pratt’s transactions are strangers both to the defendant and to the certificates in its hands. The defendant, even with the help of the other corporations, could not get a title by disseisin to the savings bank’s stock against the will of the savings bank. Pratt v. Taunton Copper Co. 123 Mass. 110, 112. Therefore the certificates which the defendant held did not represent the savings bank stock. It was asked, whether, if the defendant after receiving the certificates had refused to make the loan, the plaintiffs could not have compelled it to retransfer them. We are content to assume that they could have done so. But that would have been upon the footing of affirming the transaction, and insisting on their rights under it. The plaintiffs cannot connect themselves with the certificates except through the acts of Pratt, which they have repudiated. The case is governed by the former decision, 138 Mass. 48. It is not as if the plaintiffs were suing for the proceeds of their own certificate, or of a registered debenture belonging to them. See Monh v. Graham, 8 Mod. 9; Cottam v. Eastern Counties Railway, 1 Johns. & Hem. 243.

If the plaintiffs were bringing a bill against the corporations whose stock the savings bank held, to compel the reissue to them of the certificates, to which they are entitled in case they can get them without an overissue of stock, and if the defendant took its certificates with notice of Pratt’s want of authority, and still held them, very likely it would be proper to make the defendant a party, and to compel it to redeliver its certificates in order to prevent an overissue, and thus to insure the plaintiff the specific property rather than damages in a more satisfactory way than by requiring the corporations to attempt to purchase their own stock in the market. Pratt v. Taunton Copper Co. 123 Mass. 110. Johnston v. Renton, L. R. 9 Eq. 181. But, in our opinion, that would not be on the ground that the plaintiffs had any title to the defendant’s certificates.

Judgment for the defendant.