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We are inclined to the opinion that the weight of authorities in modern times is, that contracts for the sale of stocks and shares in incorporated companies for more than ten pounds are not valid unless there has been a note or memorandum in writing, or earnest or part 4 Wheaton 89, note; 3 Starkie on Evid., 4th Amer. edit.,

608.

Supposing this a new question now for the first time calling for a construction of the statute, the court are of opinion that, as well by its terms as its general policy, stocks are fairly within its operation. The words "goods" and "merchandise" are both of very large signification. Bona, as used in the civil law, is almost as extensive as personal property itself, and in many respects it has nearly as large a signification in the common law. The word "merchandise" also, including in general, objects of traffic and commerce, is broad enough to include stocks or shares in incorporated companies.

The main argument relied upon by those who contend that shares are not within the statute is this: That statute provides that such contract shall not be good, etc., among other things, except the purchaser shall accept part of the goods. From this it is argued that by necessary implication the statute applies only to goods, of which part may be delivered. This seems, however, to be rather a narrow and forced construction. The provision is general that no contract for the sale of goods, etc., shall be allowed to be good. The exception is when part are delivered; but if part can not be delivered, then the exception can not exist to take the case out of the general prohibition. The provision extended to a great variety of objects, and the exception may well be construed to apply only to such of those objects to which it is applicable, without affecting others, to which from their nature it can not apply.

There is nothing in the nature of stocks, or shares in companies, which in reason or sound policy should exempt contracts in respect to them from those reasonable restrictions, designed by the statute to prevent frauds in the sale of other commodities. On the contrary, these companies have become so numerous, so large an amount of the property of the community is now invested in them, and as the ordinary indicia of property, arising from delivery and possession, can not take place, there seems to be peculiar reason for extending the provisions of this statute to them. As they may properly be included under the terms goods, as they are within the reason and policy of the act, the court are of opinion that a contract for the sale of shares, in the absence of the other requisites, must be proved by some note or memorandum in writing; and as there was no such memorandum in writing, in the present case, the plaintiff is not entitled to maintain this action. As to the argument that here was a part performance, by a payment of the money on one side, and the delivery of the certificate on the other, these acts took place after this action was brought, and can not therefore be relied upon to show a cause of action when the action was commenced.

Verdict set aside and plaintiff nonsuit.

Note. It is generally held in this country that sales of stock are within the seventeenth section of the statute of frauds. See, as to the application of this and other sections, the following cases: 1810, Colvin v. Williams, 3 Har. & J. (Md.) 38; 1843, North v. Forest, 15 Conn. 400; 1847, Thompson v. Alger, 53 Mass. (12 Metc.) 428; 1862, Hagar v. King, 38 Barb. (N. Y.) 200; 1872, Pray v. Mitchell, 60 Maine 430; 1873, Mayer v. Child, 47 Cal. 142; 1878, Mason v. Decker, 72 N. Y. 595; 1880, Boardman v. Cutter, 128 Mass. 388; 1884, Porter v. Worsmer, etc., 94 N. Y. 431; 1884, Fitzpatrick v. Woodruff, 96 N. Y. 561; 1888, Hinchman v. Lincoln, 124 U. S. 38; 1889, Seddon v. Rosenbaum, 85 Va. 928; 1891, Ryers v. Tuska, 14 N. Y. Sup. 926; 1892, Spear v. Bach, 82 Wis. 192; 1893, Dinkler v. Baer, 92 Ga. 432; 1895, McLure v. Sherman, 70 Fed. Rep. 190; 1895, Flowers v. Steiner, 108 Ala. 440.

But in England the rule is different: See, 1839, Humble v. Mitchell, 11 Ad. & El. 205; 1841, Duncuft v. Albrecht, 12 Sim. Ch. 189; 1844, Hargreaves v. Parsons, 13 Mees. & W. 561.

But the statute of frauds does not apply to agreements to subscribe: See, note, supra, p. 459, and, 1871, Green v. Brookins, 23 Mich. 48; 1886, Colfax Hotel Co. v. Lyon, 69 Iowa 683; 1898, Rogers v. Burr, 105 Ga. 432.

The fourth section of the statute of frauds relating to conveyances of interests in lands does not apply to sales of corporate shares, even if the corporation owns and deals in land: 1839, Humble v. Mitchell, 11 Ad. & E. 205; 1836, Bligh v. Brent, 2 Y. & C. Exc. 268.

Sec. 215.

Same.

(3) Choses in action.

COLONIAL BANK v. WHINNEY.1

1885. IN ENGLISH COURT OF APPEAL. L. R. 30 Ch. Div.

261-290.

[Suit by the bank to enforce an equitable mortgage of shares in a ailway company against Whinney, who was a trustee in bankruptcy of the person in whose name the shares stood at the commencement of the bankruptcy. The English bankrupt law provided that “all goods in the possession, order or disposition of the bankrupt" should pass to the trustee in bankruptcy, "provided that things in action, other than debts due the bankrupt, shall not be deemed goods within the meaning" of this law. Under this provision the majority of the court held that the shares were not choses in action within the meaning of the proviso; but Fry, L. J., pronounced the following dissenting opinion, which was affirmed in the house of lords, 11 App. Cas. 426.]

FRY, L. J. One of the questions argued before us on the present appeal has been, whether the shares in question in this case are or are not choses in action, within the meaning of those words as used in the 3d subsection of the 44th section of the Bankruptcy Act 1883. .

1 Statement abridged. Only the dissenting opinion of Fry, L. J., is given (a part of it being omitted). The majority opinion was overruled upon this point, and Fry's opinion unanimously affirmed by the house of lords, in 1886. The Colonial Bank v. Whinney, L. R. 11 App. Cas. 426.

51-WIL. CASES.

The shares in question are shares in a company constituted by act of parliament, which incorporates the Companies Clauses Consolidation Act, and that act declares that shares are personal property, transmissible as such, and furthermore provides for the transfer of the shares by deed in a specified manner.

The first question is whether, according to the ordinary legal meaning of the words "things in action," which I take to be technical words, they include such shares as those in controversy. This leads to the consideration of some very elementary points in English law. According to my view of that law, all personal things are either in possession or in action. The law knows no tertium quid between the two. "No chattel," says Lord Coke, in Fulwood's Case, 4 Rep. 65a, "either in action or possession, shall go in succession," as if the two alternatives were the only possible ones. "Property in chattels personal," says Blackstone, "may be either in possession-which is where a man hath not only the right to enjoy, but hath the actual enjoyment of the thing-or else it is in action, where a man hath only a bare, right without any occupation or enjoyment." Bl. Comm., book 2, ch. 25, p. 389, and so Lord Hardwicke, in the great case of Ryall v. Rolle, 1 Atk. 165, 182, speaks of personal property, whether in possession or action only, as equivalent to all kinds of personal property. The expression "choses in suspense" is found in Brooke's Abridgement, in conjunction with choses in action; but, so far as I can understand, the two expressions are synonymous.

It has been suggested that the expression "choses in action" was originally only applicable to debts, and that by a lax usage it has acquired a secondary and wider significance. I am not able to adopt this view. The article "Choses in Action and Choses in Suspense," in Brooke's Abridgement, fol. 140, seems to show that as early as 5 Edw. 4 the expression was held to include the king's right to the marriage of his ward; in 9 Hen. 6 the property in deeds in the hands of a third person was considered as a chose in action, and in 33 Hen. 8 the classification of choses in action into real, personal and mixed, was recognized. Indeed, the whole article appears to me inconsistent with the notion that according to early usage the expression was confined to debts. On the contrary, that early usage appears to me to have been as wide as the modern usage, as explained by Mr. Joshua Williams in the passage which has been cited by Lord Justice Cotton.

What, then, is the character of a share in a company? Is it in its nature a chose in possession or a chose in action? Such a share is, in my opinion, the right to receive certain benefits from a corporation, and to do certain acts as a member of that corporation; and if those benefits be withheld or those acts be obstructed, the only remedy of the owner of the share is by action. Of the share itself, in my view, there can be no occupation or enjoyment, though of the fruits arising from it there may be occupation, enjoyment and manual possession. Such a share appears to me to be closely akin to a debt, which is one of the most familiar of choses in action; no action is required to obtain the right to the money in the case of the debt, or the right to the

dividends or other accruing benefits in the case of the share; but an action is the only means of obtaining the money itself or the other benefits in specie, the right to which is called in one case a debt and in the other case a share. In the case alike of the debt and of the share, the owner of it has, to use the language of Blackstone, "a bare right without any occupation or enjoyment.' A debt no doubt differs from a share in one respect, that it confers generally a more limited right than a share, and that when once paid it is at an end; but this distinction appears to me immaterial for the purpose now in hand.

It is true that unassignability by act inter vivos has been a character of many choses in action in the earlier stages of our law; but the question whether a personal thing is or is not assignable, is not, in my opinion, a criterion of whether it is in possession or in action. The king has always been able to assign choses in action that are certain. Bills of exchange have been assignable by our law ever since the law merchant on that point was recognized by our courts hundreds of years ago; many choses in action have long been assignable by statute, such as promissory notes and bail and replevin bonds, and by the Judicature Act of 1873 all debts and other legal choses in action were made assignable in the manner therein indicated. With great deference to those who think otherwise, I consider that the power of transfer conferred on the holder of these shares by statute does not affect the question.

Furthermore, on the question whether a particular property is a chose in action or not, I think it immaterial to inquire whether the right in question was formerly enforceable at law or in equity; a right of suit is equally a chose in action, whether the forum be legal or equitable.

Turning now to authority, I find that in the case of Humble v. Mitchell (1839), 11 Ad. & Él. 205, the question arose whether shares in a joint stock company were goods, wares or merchandise within the meaning of the seventeenth section of the statute of frauds; and in determining that they were not, Lord Denman observed that shares in a joint stock company like this are mere choses in action; and in this judgment Justices Patteson, Williams and Coleridge concurred. Again, in Ex parte Agra Bank (1868), Law Rep. 3, Ch. 555, a question arose as to certain shares in the San Pedro Mining Company being in the order and disposition of the bankrupt Worcester. Though the precise constitution of the company is not stated, it appears that the company was an English one, by which certificates of shares were issued, and in which the shares passed by transfer; the case was argued and decided on the footing of these shares being choses in action and they are so described in the judgment of Lord Hatherly, then Lord Justice Page Wood. On the other hand, in the case of Ex parte Union Bank of Manchester (1871), Ibid., 12 Eq. 354, ViceChancellor Bacon held that shares in a company under 7 and 8 Vict., ch. 110, were not choses in action within the meaning of the Bankruptcy Act, 1869, partly upon the ground that if it had been intended

to exclude from the operation of the law of reputed ownership everything incapable of manual delivery, a clearer term would have been used, and partly on the ground that the owner's title depended on the register. And again, in Societe Generale de Paris v. Tramways Union Company, 14 Q. B. D. 424, 451, Lord Justice Lindley approved of the decision of the vice-chancellor, and dwelt upon the fact that a transferee of shares has a legal and not merely an equitable right to become a shareholder.

In this conflict of authorities upon the precise point, it is not useless to consider the authorities bearing on personal things of a kind closely analogous to shares in a company. The right of a fund-holder in the public funds, where there is, of course, a legal power to assign, has long ago (1790, 1817) been held to be a chose in action. Dundas v. Dutens, 1 Ves. 196; Rex v. Capper, 5 Price 217. In Ex parte Ibbetson (1878), 8 Ch. D. 519, the court of appeal held a policy of assurance to be beyond all argument a thing in action within the meaning of the clause in question; and in In re Bainbridge, 8 Ch. D. 218, Chief Judge Bacon held that the share of a partner in the partnership property was a chose in action. If it be rightly decided, as I think it was, that a share in a partnership is a chose in action, it is very difficult to conclude that a share in a joint-stock company is not a chose in action. In the case of a partnership, the real and personal property of the partnership is, or may be, vested in all the partners, and each therefore may have a legal interest in choses in possession. In the case of a corporation, the whole property of the concern is vested in the corporation, and the individual corporators have no direct interest in the chattels in possession which may belong to the concern. In a partnership of seven persons, each would have a chose in action; if that partnership incorporated itself under the Companies Act, 1862, would each of the seven have a chose in posses

sion?

Appeal dismissed.

Note. See, 1830, Blake v. Jones, 1 Bailey Eq. (S. C.) 141, 21 Am. Dec. 530; 1837, Arnold v. Ruggles, 1 R. I. 165; 1849, Slaymaker v. Bank of Gettysburg, 10 Pa. St. 373.

Sec. 216. Same.

(4) As subjects of conversion.

PAYNE v. ELLIOT ET. AL.'

54 Cal. Rep.

339-344, 35 Am. Rep. 8o.

1880. IN THE SUPREME COURT OF CALIFORNIA.

Appeal from judgment for plaintiff in the court below.

MCKEE, J. This is an action of trover. The plaintiff seeks to charge defendants with $2,796.32 and costs for an alleged conversion 1 Arguments and part of opinion omitted.

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