Emmert v. United Bank and Trust Co.

TYLER, P. J.

Action for the value of certain shares of stock claimed to have been converted. The complaint, which is in two counts, alleges in substance that plaintiff and Mariah L. Emmert made and delivered to defendant United Bank and Trust Company of California their joint and several promissory note for the sum of $6,000 and as security for the payment of the same plaintiff transferred to the bank all his right, title and interest in and to certain shares of stock the certificate for which, through the carelessness of the bank, was lost. The second cause of action alleges that defendants converted the stock to their own use. The value of the stock was alleged to be the sum of $6,250. The answer of defendants denied plaintiff’s allegations.

The facts as reflected in the findings are undisputed and show that in November, 1922, the plaintiff M. T. Emmert subscribed for fifty shares of the common stock of A. Meister Sons Company, of the market value of $6,250. Plaintiff made a payment on said shares and contemporaneously therewith executed and delivered to Meister Sons Company his promissory note in the sum of $3,500 for the balance of the purchase price. During the month of December of the same year the note was delivered by the company to defendant United Bank and Trust Company as collateral security for the payment of an indebtedness of said company. When the note was delivered there was attached thereto a certificate representing the fifty shares of stock referred to. Plaintiff’s note given for the payment of the stock matured while the same was in the possession of the bank and he made, executed and delivered a renewal note payable to the bank for the same amount, and, upon plaintiff’s making and delivering this note,

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the certificate evidencing the fifty shares of stock referred to was attached thereto and left on deposit with the bank as security for the payment of said promissory note. The certificate of stock was at no time endorsed by plaintiff. It was understood and agreed by plaintiff, the Meister Company and said bank that when plaintiff paid his $3,500 promissory note the bank would deliver to plaintiff said certificate of stock. In August, 1923, plaintiff paid his indebtedness of $3,500 to the bank and demanded his certificate of stock. The bank refused to deliver the same to him until such time as he paid another promissory note held by the bank on which plaintiff and Mariah L. Emmert were co-makers. Plaintiff agreed to the retention of the certificate until this note was paid. On December 17, 1923, the last-mentioned note was paid in full and a few days later plaintiff demanded a delivery of his stock. The bank informed plaintiff that it had mislaid or lost the certificate and agreed to replace the same, but failed to do so. Plaintiff desired and intended, upon the delivery of his certificate of stock, to at once sell the same for the best obtainable price in the open market. The defendant United Bank and Trust Company was absorbed by the defendant Bank of America, but neither bank has paid to plaintiff the value of his stock or procured for him a new certificate. Plaintiff thereupon brought this action against both banks upon the two causes of action as above recited.