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Talcott v. Standard Oil Co.

Supreme Court of New York, Appellate Division

March 22, 1912

JAMES TALCOTT, Appellant,
v.
STANDARD OIL COMPANY and WILLIAM S. BLAKSLEE, Respondents.

Page 695

APPEAL by the plaintiff, James Talcott, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 9th day of March, 1911, upon the decision of the court rendered after a trial at the New York Special Term.

COUNSEL

Edward W. Harris of counsel [Robert D. Ireland with him on the brief],Harris & Harris, attorneys, for the appellant.

Frederic R. Kellogg of counsel [Chester O. Swain with him on the brief],Kellogg & Emery, attorneys, for the respondent Blakslee.

CLARKE, J.:

Plaintiff, claiming to be the owner of twenty-five shares of the capital stock of the Standard Oil Company standing in the name of the defendant William S. Blakslee, brought this suit against the said company and the said Blakslee praying that

Page 696

he be adjudged the owner, that the claim of the latter to any interest in the stock be dismissed as unfounded, and that the defendant company be required to transfer the stock to plaintiff on its books.

The position of the company is that of a mere stakeholder. The Special Term has held that the defendant Blakslee is the sole owner of the said certificate; that the plaintiff has no right, title or interest therein; that he be directed to forthwith surrender and deliver the same to the defendant Blakslee and that the complaint be dismissed upon the merits, with costs to each of the defendants. From said judgment plaintiff appeals.

The plaintiff is a banker and commission merchant in the city of New York. William E. Nichols & Co. were stockbrokers to whom the plaintiff had been making loans for several years. On November 8, 1907, Nichols & Co. called up the plaintiff on the telephone and asked if he would make a loan on twenty-five shares of the capital stock of the Standard Oil Company to the extent of seventy-five per cent of the market value thereof, which plaintiff agreed to do. Accordingly on said day Mr. Talcott loaned $7,500 to Nichols & Co., who delivered to him the usual collateral stock note bearing said date and reading in part as follows: 'On demand, after date, for value received, we hereby promise to pay to James Talcott, or order, at---------seventy-five hundred dollars, with interest at the rate of----per cent per annum until paid, having deposited herewith, as collateral security, for the payment of this note, and also as collateral security, for all other present or future demands of any and all kinds of the holder hereof against the undersigned due or not due, the following property, viz., 25 Standard Oil, $10,000; ' and delivered at the same time a certificate of the Standard Oil Company for twenty-five shares made out in the name of W. S. Blakslee. Pinned thereto, accompanying therewith, and delivered at the same time, was an assignment and irrevocable power of attorney in blank. That is, neither the name of the assignee nor the description of the property assigned was entered in the body of the instrument. This was signed as follows: 'In witness whereof, I have hereunto set my hand and seal the 18th day of October, one thousand nine hundred and seven, W. S. Blakslee.

Page 697

(L. S.) Signed, sealed and delivered in presence of W. A. Ashbaugh. Signature guaranteed, Wm. E. Nichols & Co.'

Previous to Mr. Talcott's loan and on the 18th of October, 1907, the Empire Trust Company of the City of New York had loaned William E. Nichols & Co. the same amount, $7,500, on the same certificate of stock, accompanied by the same assignment and power of attorney, and before delivering the assignment with stock power to the Empire Trust Company, Nichols & Co. on October eighteenth guaranteed the signature of Blakslee. When the Empire Trust Company made its loan on October eighteenth, the certificate and stock power were in exactly the same form as when Talcott made his loan on November eighth. It was because the trust company had called its loan that the transaction with Talcott was had.

During the several years previous to this transaction in which Mr. Talcott had had dealings with Nichols & Co., loaning them sums of money from time to time, he had always received stock certificates as collateral security. At the time this loan was made Nichols & Co. owed him between $30,000 and $40,000. On January 27, 1908, they owed him $30,935 including the loan of $7,500 made November 8, 1907, and on that day they gave Talcott a new note for the entire indebtedness, the Standard Oil stock in question continuing as collateral security for said note and Talcott being unaware that Blakslee had any interest in the stock in question.

Nichols & Co. came into possession of this certificate and its accompanying assignment in the following manner: John V. Ritts, who was and had been for twenty years the vice-president of the Butler County National Bank of Butler, Pa., had for some time been dealing in stocks with William E. Nichols & Co. On October 18, 1907, they had bought for his account 3,000 shares of Greene-Cananea, a mining stock costing about $21,000, and 1,000 shares of Nipissing, costing about $9 or $10 a share.

Mr. Ritts testified that previous to the purchase of these stocks he had had cash settlements with Nichols & Co., who drew on him with the stocks attached to the drafts, but on this transaction he found it inconvenient to take up the stocks as ...


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