Lathrop v. Title Insurance & Trust Co.

LANGDON, P. J.

This appeal is by the plaintiff from a judgment against her in an action in which she sought to

[149]

recover three bonds of the Home Telephone and Telegraph Company, of the face value of $1,000 each, which she had delivered to the defendant and which it refused to return to her because of a claim of ownership made by E. S. Crocker, who intervened in the action and in whose favor judgment was given.

The trial court found that intervener was the owner and entitled to the possession of said bonds; that the bonds had been pledged to the husband of plaintiff to secure a loan of $600 made to one Vaughn; that Vaughn had no right or authority to make such pledge. It appears that intervener had permitted the bonds to be used to secure a debt of Edna Brown to one Peck; that when this indebtedness was satisfied, the bonds were received by Vaughn as attorney for Miss Brown and without her knowledge or consent, and without the knowledge or consent of intervener, Vaughn pledged the same to secure a personal loan. The pledgee having died, the bonds were distributed as a part of his estate to his widow, the plaintiff in this action. She had given the trust company possession thereof and intervener notified it of his ownership before it had accounted to plaintiff for the bonds and thereupon the trust company protected itself by refusing to deliver the bonds without a judgment of court.

There is no dispute about the foregoing facts. The findings are not attacked upon appeal. The first point raised is that plaintiff was entitled to hold the bonds as security for the debt because the bonds are made negotiable by statute, being payable to bearer. This contention is settled against the appellant by the recent case of

Popp

v.

Exchange Bank,

189 Cal. 296 [208 Pac. 113]. That case holds that the act of the legislature of August 7, 1915 (Stats. 1915, p. 99), amending the code in relation to negotiable instruments so as to make bonds such as those we are considering negotiable did not have the effect of changing the character of such bonds issued before the amendment, although transferred thereafter. The bonds involved in the instant ease were issued in 1905 and the loan was negotiated in 1916.