Tregear v. Etiwanda Water Co.
Before: Searls
Synopsis
Corporation—Stock—Personal Property.—Shares of stock in a corporation are personal property.
Chattel Mortgage — Common Law—Validity between Parties.— Mortgages of personal property were valid between the parties at common law, and in many cases were held valid without change of possession in the absence of fraud, even against subsequent bonajide purchasers and creditors. Under our statutes, mortgages of personal property not included in the chattel mortgage act are void as against creditors and subsequent purchasers, if not accompanied by immediate delivery and actual and continued change of possession, but are nevertheless valid' between the parties, as at common law.
Mortgage of Real and Personal Property—Sale under Foreclosure. — A mortgage is valid between the parties, though it includes both real and personal property, and the possession of the personal property is not delivered; and both the real and personal property may he sold' under decree of foreclosure, and transferred by the sheriff’s deed if no redemption is made.
Corporation—Transfer of Stock Sold under Mortgage—Sheriff as Agent—Parties — Pleading.—In an action to compel a corporation to transfer stock sold under foreclosure of a mortgage thereon, the mortgagor is not a necessary party. He is to be treated as the vendor of plaintiff, who sold his stock through the sheriff as agent. If the sale was not valid in fact, it is matter of defense; and if it appears from the defense that the mortgagor is a proper party, he may be ordered brought in under section 389 of the Code of Civil Procedure. The fail- - ure to join him in the complaint is not ground of demurrer.
Searls, C. J. Plaintiff brought this action against the Etiwanda Water Company, a corporation, to compel said corporation, through its officers, to execute and deliver to him, in his name, a certificate for twenty shares of its capital stock now standing in the name of R. B. Warren on the books of the company.
The complaint shows that R. B. Warren was the owner of twenty shares of the capital stock of defendant, and was registered as the owner thereof on the books of defendant, and held and still holds a certificate therefor in his name, issued by defendant to him; that on the 18th of October, he executed a mortgage to one George Chaffey upon certain real estate, together with the stock in question, and certain other stock not in controversy, to secure the payment of a promissory note for two thousand dollars.
The note and mortgage were indorsed, and delivered to plaintiff, who, at the maturity of the note, foreclosed the mortgage, and obtained a decree of sale under which the stock in question and real estate were sold by the sheriff, and purchased by plaintiff, who received a certificate of sale, and at the end of six months, in default of redemption, a deed.
[539]Plaintiff presented his sheriff’s deed to defendant, and demanded a transfer of the stock to his name on the books of the company, and that a certificate issue to him, which, as to the twenty shares in dispute, was refused.
That Warren has no interest in the stock, but still stands upon the books of the company as a stockholder therein.
It does not appear that the certificate representing the twenty shares was ever indorsed to, held, or possessed by plaintiff or his assignor, but it still stands in the name of and is possessed by Warren.
Defendant demurred to the complaint, upon the grounds: 1. That the complaint does not state facts sufficient, etc.; 2. Defect of parties defendant in not joining Warren and the president and secretary of defendant; 3. That it is unintelligible as to what is meant by the order of sale issued upon the judgment, and in pursuance of which the sale was made by the sheriff.
The contention of appellant is: 1. That shares of capital stock of a corporation are personal property; 2. That they are not the kind of personal property that can be mortgaged.
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