Wilson v. Shear Co. , 284 S.W. 654 ( 1926 )

We concur in the disposition of this case made by our associate, Mr. Justice STANFORD. We do not think that appellant Mrs. Wilson was entitled to judgment in her favor on the verdict rendered, nor do we think that the Shear Company was entitled to judgment in its favor on such verdict. We do not wish, however, to be considered as concurring in all the findings of fact made in the course of said opinion, nor in all the conclusions of law therein expressed. Our concurrence is limited to matters essential to the proper disposition of this appeal, and not inconsistent with the views herein expressed. In view of the fact that the judgment of the trial court is reversed and the cause remanded for another trial, we do not deem it necessary to be more specific as to the points on which we differ from the opinion as written. We think the two outstanding issues of fact to be determined on another trial are whether the shares of stock in the Rotan Grocery Company evidenced by certificate No. 112 were the separate property of Mrs. Wilson, and whether the corporation had knowledge or notice of such fact at the time it accepted the surrender of said certificate No. 112 and issued new certificates in lieu thereof in its changed corporate name to C. W. Wilson. Without an affirmative finding in her favor on these issues, we do not think Mrs. Wilson could in any event recover.

We will refrain from discussing the evidence in detail, in view of our action in remanding the case for another trial on the facts. On the subject of knowledge of or notice to the corporation with reference to Mrs. Wilson's claim that the stock purchased and evidenced by said certificate No. 112 was her separate property, we deem it proper to say that there is evidence in the present record tending to show that Mrs. Wilson thought, and may have been justified in thinking, that she was dealing directly with the corporation in the original purchase of said stock, and that she understood at the time that Mr. Shear was selling her stock belonging to the corporation, and that he was acting for the same in his capacity as president and manager thereof in making said sale. The original checks given by Mrs. Wilson for the purchase price of said stock were identified and introduced in evidence, and show that they were made payable to "H. H. Shear, Pt." There was also evidence tending to show that Mr. Shear, at the time of the purchase of said stock, might have occupied a dual capacity; that is, that, while he may have been selling his own stock in the corporation, he may have also known that Mrs. Wilson was instructing him with reference to the issuance or reissuance of new certificates in her own name and the enrollment of her name as the owner thereof on the books of the corporation in his capacity as president and general manager thereof. There was, as we view it, no interest on his part in said transaction adverse to the interests of the corporation, and no impropriety in his receiving, if he did do so, information with reference to ownership of said stock as her separate property and instructions based thereon with reference to the issuance or reissuance of the certificates evidencing the same in her own name and the enrollment of her name as owner of said stock on the books of the corporation, while at the same time acting for himself in selling his individual stock. The issuance or reissuance of certificates of stock in Mrs. Wilson's name was a matter in which he in his capacity as president of the corporation would necessarily have been called upon to act in behalf of said corporation, and a matter in which he could not have acted individually. Issuance or reissuance of certificates was clearly within the scope of Mr. Shear's authority and duty as president of said corporation. It is shown by the record that he in fact acted in that capacity in the reissuance of said stock in October, 1916. There is no legal barrier to the effectiveness of any notice given under such circumstances. Should the case be again submitted to a jury and a charge given by the court to aid the jury in passing on the issue of knowledge or notice, such charge should properly apply the law to the facts before the jury at that time. 4 Fletcher Cyc. Corp. § 2218, pp. 3437-3441; Id., § 2235, pp. 2463, 3464; Id., §§ 2245 and 2246, pp. 3477-3480; Goldstein v. Union Nat. Bank, 109 Tex. 555, 213 S.W. 584,592, 593; Central Bank Trust Co. v. Ford (Tex.Civ.App.) 152 S.W. 700,704 (writ refused); Smith v. Wilson, 1 Tex. Civ. App. 115. 20 S.W. 1119. 1122, 1123; First Nat. Bank v. Burns, 88 Ohio St. 434, 103 N.E. 93, 94,96, 49 L.R.A. (N.S.) 764; Traders' National Bank v. Smith (Tex.Civ.App.)22 S.W. 1056, 1058, 1059; Brobston v. Penniman, 97 Ga. 527, 25 S.E. 350,351; Morris v. Georgia Loan, Savings Banking Co., 109 Ga. 12,34 S.E. 378, 46 L.R.A. 506, 510-513.

The Shear Company denied that said certificate No. 112 was the property of Mrs. Wilson, but pleaded in the alternative, if such was the fact, that "she in all things authorized, suffered, permitted, and acquiesced in the control and disposition of said stock by her agent, C. W. Wilson, and in all respects intrusted him with its care, custody, and control, directed him to collect dividends thereon, and suffered him to appropriate the same," and that, if he converted said stock to his own use and benefit, or fraudulently disposed of the same, such action was the direct result of his agency. There was evidence tending to show that, at the time of the purchase of said stock, Mrs. Wilson, after directing that a certificate be issued in her name therefor, and that her name be entered on the books of the corporation as the owner thereof, requested Mr. Shear to send said certificate to the Citizens' National Bank, to be held by it as collateral for the loan out of the proceeds of which almost the whole of the purchase price of said stock was paid, or to deliver said certificate to her husband, to be by him turned over to said bank for such purpose; that said certificate No. 112 was delivered to her husband by Mr. Shear; and that he did take it and deliver it to said bank for the purpose contemplated. There was also evidence tending to show that said stock remained in the name of Mr. Shear on the books of the corporation; that three dividends were declared thereon and paid to him, and that he, each time a dividend was declared, gave his individual check to said Wilson for the amount of such dividend; that Wilson turned said checks over to his wife or deposited them to her credit in said bank, and that such dividends were applied in discharge of said purchase money note; that said certificate remained as collateral to said loan until the remaining balance thereof was paid on October 1, 1916; that Wilson then received said certificate from the bank, and immediately took the same to the office of the corporation, and had new certificates therefor issued in his own name. There is nothing to show that Mrs. Wilson authorized the bank to deliver said certificate to her husband, nor that she knew of such action at the time. The facts above recited are practically all bearing on this issue which occurred on or prior to the reissuance of said stock at the date aforesaid. Of course the action of the Shear Company in so reissuing said stock could not have been predicated on anything that occurred thereafter.

Said certificate No. 112 was isued to H. H. Shear, and had indorsed thereon a transfer in blank, and such transfer was signed by said Shear. Mrs. Wilson, if the owner of said certificate, had the right to insert her name in the blank provided therefor in said transfer. She would then have appeared on the face of such transfer to be the owner of the certificate. Not having done so, her husband, being in possession of said certificate, was, as to everyone except one knowing or having notice of her ownership, apparently the owner thereof, and entitled to have the same reissued in his own name. However, if the Shear Company at that time knew, or had notice, that said stock belonged to Mrs. Wilson, it necessarily knew, or was charged with knowledge, that such apparent ownership was not real. If it had such notice or knowledge, the situation was the same as if Mrs. Wilson had actually written her name in the blank space for the name of the grantee in said transfer aforesaid. 6 Fletcher Cyc. Corp. § 3854, p. 6488; Id. § 3798, p. 6344; Strange v. H. T. C. R. R. Co., 53 Tex. 162, 170, 171. Mrs. Wilson being a married woman, the statute in force at that time (R.S. 1911, art. 4621, as amended by Acts 33d Leg. c. 32 [Vernon's Sayles' Ann.Civ.St. 1914, art. 4621]) vested in her the sole management, control and disposition of her separate property, both real and personal, but provided that the joint signature of herself and her husband was necessary to the transfer of stocks belonging to her, or of which she was by said act given control. If said certificate No. 112 was in fact the separate property of Mrs. Wilson, then the issuance of a new certificate in lieu thereof to Wilson in person involved a transfer of the same from her to him and the corporation's recognition of him as the owner thereof and the registration of his name on its books as such owner. 6 Fletcher Cyc. Corporations, § 3784, p. 6304; Id. § 3789, p. 6317; Baker v. Wasson, 53 Tex. 150, 156; Cattle Co. v. Burns-Walker Co., 82 Tex. 50,17 S.W. 1043; 14 C.J. 774, § 1176.

The laws of this state require the husband and wife to join in disposing of the separate real estate of the wife. Our courts have uniformly held that a deed from the wife direct to her husband is a nullity. Graham v. Stuve, 76 Tex. 533, 534, 13 S.W. 381; Hughey v. Mosby, 31 Tex. Civ. App. 76, 71 S.W. 395 (writ refused). Our courts have also uniformly held that a husband cannot convey his wife's separate lands under a power of attorney from her direct to him, although joining in the conveyance individually besides acting in the name of his wife under such power. Cannon v. Boutwell, 53 Tex. 626, 627, 628; Cardwell v. Rogers, 76 Tex. 37, 42, 43, 12 S.W. 1006; Peak v. Brinson, 71 Tex. 310,316, 11 S.W. 269. It has been held that, when an equitable title to real estate has vested in a married woman, it cannot be divested by a conveyance of such property by the holder of the legal title when the grantee has knowledge of the facts. Cauble v. Worsham, 96 Tex. 86, 92,70 S.W. 737, 97 Am. St. Rep. 871. See, also, Green v. Priddy, 112 Tex. 567,575, 576-582, 250 S.W. 656.

If the Shear Company was authorized to assume that Wilson was acting as agent for his wife in surrendering certificate No. 112 for cancellation and reissuance, it was not authorized to assume that he had any special power in the premises merely because he was her husband. Every agency is subject to the legal limitation that it cannot be used for the benefit of the agent himself without special authority, and everyone is charged as a matter of law with notice thereof. So, whenever it appears that the interest of an agent and the interest of his principal are necessarily in opposition in a particular transaction, parties dealing with the agent are charged with notice of his lack of authority to bind his principal. So a person dealing with an agent as such is bound to know as a matter of law that such agent has no power to transfer or apply the property of his principal to the satisfaction of his own debts. 21 R.C.L. 910-913, §§ 88, 87, and 92; 2 C.J. 837, § 519; Oshkosh Nat. Bank v. Munger, 95 F. 87, 36 C.C.A. 659; Hunter v. Eastham, 95 Tex. 648, 69 S.W. 66; Trippett v. Nash-McLarty Motor Co. (Tex.Civ.App.) 269 S.W. 205, 207. The principle involved in the authorities just cited has been applied to the transfer or registration of the transfer of stock on the books of a corporation, and the corporation has been held charged with notice that an agent could not, under a general power, have his principal's stock transferred to himself, but that such action required special or express authority from the principal. 14 C.J. 772, § 1174; 26 Am. Eng. Ency. of Law, 890, 891; Geyser-Marion Gold Mining Co. v. Stark, 106 F. 558, 45 C.C.A. 467, 53 L.R.A. 684, 689, 690; Tafft v. Presidio Railroad Co., 84 Cal. 131, 24 P. 436, 11 L.R.A. 125, 18 Am. St. Rep. 166,170, 171. See, also Vernon, G. R. R. Co. v. Washington Civil Township, 48 Ind. App. 309, 95 N.E. 599, and Miller v. L. N. R. R. Co., 83 Ala. 274, 4 So. 842, 3 Am. St. Rep. 722.

There is no evidence in the record before us tending to show that Mrs. Wilson knew as a fact that said certificate of stock No. 112 remained in the name of Shear with his indorsement in blank on the back thereof, nor that she authorized her husband to surrender it and have a new certificate issued in lieu thereof to any one, much less to himself. The record fails to show any attempt to comply with the requirements of the statute cited controlling the manner of transferring stocks belonging to married women. We have been unable to find any case in which said provision of the statute has been construed. In every case found involving the transfer of stocks, even where the preliminary negotiations were conducted by the husband as agent for the wife, the actual transfer was signed by both of them. Bird v. Bird (Tex.Civ.App.) 212 S.W. 253, 255, pars. 5 and 2; Barber v. Keeling (Tex.Civ.App.) 204 S.W. 139, 141, par. 7. We think said statute contemplates a transfer in writing signed by both husband and wife, or at least the written indorsement of the signature of each of them on the back of the certificate, with implied authority on the part of the transferee to write a proper transfer above such signatures. We further think that, if said certificate No. 112 was the separate property of Mrs. Wilson, and the corporation had notice thereof, the surrender of said certificate by her husband and the issuance of new certificates in lieu thereof in his name did not, as between Mrs. Wilson and the corporation, divest her of her title to such stock. We do not think that the facts in this record raise an issue of estoppel against the assertion by her of any rights she may have against the corporation if she was such owner and if the corporation had such notice. Cauble v. Worsham, supra; Green v. Priddy, supra; Hannay v. Harmon (Tex.Civ.App.) 137 S.W. 406, 408; Gillean v. Witherspoon (Tex.Civ.App.) 121 S.W. 909, 916, 917; White v. Simonton,34 Tex. Civ. App. 464, 79 S.W. 621, 623; Bailey v. Bailey (Tex.Civ.App.)188 S.W. 264, 265.