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Opinion of the Court, per ALLEN, J.

or an apparent authority to dispose of it, he will not be allowed to make claim against an innocent purchaser dealing upon the faith of such apparent ownership and jus disponendi. (Dustin v. Livingston, 9 J. R., 96; Howe v. Starkweather, 17 Mass., 244; McNeil v. Tenth Nat. Bank, lately decided in this court and not reported [46 N. Y., 325—Rep.]; Arnold v. Ruggles, 1 R. I., 165.) The plaintiff, the owner in fact of the stock in controversy, did not give to another the external evidence of authority to dispose of it, and did not assent to placing the property, or the evidence of property, with his son.

Whatever was done in the way of divesting the plaintiff of his property, was done in fraud of his rights and without his consent.

An unauthorized sale, although for a valuable consideration and without notice, vests no higher title in the vendee than was possessed by the vendor. (Prescott v. Deforest, 16 J. R., 159; Wheelwright v. Depeyster, 1 id., 471; Williams v. Merle, 11 W. R., 80; Brower v. Peabody, 3 Ker., 121; Covill v. Hill, 4 Den., 323). The property in the capital stock of a corporation is not distinguishable from other personal property; and the owner cannot be divested of his property except by his own voluntary act and consent, or by some act which would be effectual to give title as against him to other movable property and choses in action.

The plaintiff is not estopped, as against the defendant, upon the evidence or the findings of the referee, from asserting his title to the stock and the dividends upon it. The original title of the plaintiff is conceded, and the defendant seeks to make title under one who had no legal title or authority to transfer, but the evidence of title acquired by fraud and without the authority or assent express or implied of the plaintiff. Such a title cannot avail against the rightful owner. (Pollock v. National Bank, 3 Seld., 274.) The only doubt or difficulty as to the right of the plaintiff to recover, conceding all that is claimed in behalf of the defendant, to wit, that he is a bona fide purchaser for value,


Opinion of the Court, per ALLEN, J.

without notice of the title and claim of the plaintiff, grows out of the fact that the legal evidences of title never were in the plaintiff, the title having been transferred without fault of the corporation directly from Finch to Llewellyn Weaver, and from the latter to the defendant. It is not the case of a transfer under a forged power of attorney or by a person of the same name as the rightful holder of the stock. A party could not be divested of the title to his property by such means, and would have a remedy over against the corporation permitting the transfer, or might follow his stock and reclaim it from the transferee. (See Davis v. Bank of England, 2 Bing., 393; Sewall v. Boston Water Power Company, 4 Allen, 277; Duncan v. Luntley, 2 McN. & G., 30.

The plaintiff here has no remedy against the corporation for permitting the transfer and issuing the new certificates to the son of the plaintiff. The corporation was not careless or negligent in the transaction, aud no wrongful act was commited by its officers.

At the time of the transfer to the defendant his assignor was insolvent and continued so until his death. The only remedy, therefore, of the plaintiff is to follow his stock into the hands of the defendant, and reclaim it, with the dividends, npon the strength of his superior title, and he is entitled to recover unless the defendant is a purchaser for a valuable consideration and in good faith. In Crocker v. Crocker, 31 N. Y., 507, the claimant and rightful owner of the stock had conferred the apparent right of property in bank stock upon a third party who had abused his confidence, and yet was allowed to recover except as against a purchaser in good faith and for a valuable consideration for an advance made on the faith and security of the stock.

The referee, upon the facts found, held that the defendant was the owner of the shares in good faith and for a valuable consideration paid by him therefor, and the complaint was dismissed on that ground.

The plaintiff was defeated on the ground that the defendant had acquired a title superior in equity to that of the plaintitt,

Opinion of the Court, per ALLEN, J.

by a purchase in good faith without notice of the claim or of any defect in the title and for a valuable consideration paid. The referee was clearly right in his views that a purchase, without notice of the plaintiff's claim alone, would not protect the defendant, and that something more than a good consideration, a consideration which would be sufficient as between the parties to the transaction, was necessary to shield him against the claim of the plaintiff.

He recognized the rule that the consideration must be valuable and actually paid, and that the defendant must have parted with value upon the faith of the purchase, and his error was in regarding the credit of the purchase price in his books to the account of the assignor as a

" valuable consideration paid.”

In speaking of a consideration which is to protect against prior and latent equities, the terms “price paid ” and “valuable consideration” are used as convertible terms. (Willoughby v. Willoughby, 1 T. R., 763, 767.) To entitle a purchaser to the protection of a court of equity, as against the legal title or a prior equity, he must not only be a purchaser without notice, but he must be a purchaser for a valuable consideration, that is, for value paid.

Where a man purchases an estate, pays part and gives bond for residue, notice of an equitable incumbrance before payment of the money, though after giving the bond, is sufficient. (Tourville v. Naish, 3 P. Wms., 306; Story v. Lord Windsor, 2 Atk., 630.) Mere security to pay the purchase price is not a purchase for a valuable consideration. (Hardingham v. Nicholls, 3 Atk., 304; Maundrell v. Maundrell, 10 Ves., 246–271; Jackson v. Cadwell, 1 Cow., 622; Jewett v. Palmer, 7 J. C. R., 65.) The decisions are placed upon the ground, according to Lord HARDWICKE, that if the money is not actually paid the purchaser is not hurt. He can be released from his bond in equity. Chancellor WALWORTH lays down the rule as follows: “To entitle a party to the character of a bona fide purchaser, without notice of a prior right or equity, such party must not only

Opinion of the Court, per ALLEN, J.

have obtained the legal title to the property, but he must have paid the purchase-money, or some part thereof, at least, or have parted with something of value upon the faith of such purchase before he had notice of such prior right or equity.” (De Mott v. Stanley, 3 Barb. Ch. R., 403); and see Caldwell v. Bartlett, 3 Duer, 341; Keyes v. Hasbrouck, id., 373.) In Root v. French (13 W. R., 570), it was held that while a transfer of goods by a fraudulent buyer to a purchaser in good faith, and who gave value for them, that is, paid for them at the time of the transfer, made advances upon them, incurred responsibilities upon the credit of them, or received them in pledge for money or property loaned upon the strength of them, might hold the goods against the seller, the original owner who had been defrauded of them, that a transfer of the goods to a bona fide creditor of the fraudulent purchaser in payment of a pre-existing debt did not constitute the creditor a bona fide purchaser for a valuable consideration. Butler v. Harrison (Cowp., 565) was cited with approval, in which it was held that the mere passing money to the credit of another, where there is no new credit given, nor acceptance of new bills or sum advanced in consequence, it was not a payment. The situation of the party was not changed, and he had parted with nothing. That is all that was done by the defendant here. The same principle is attirmed in Padgett v. Lawrence (10 Paige, 170), the chancellor holding that the purchaser of the legal title to property who receives a conveyance thereof' merely upon the consideration of a prior indebtedness of the grantor is not entitled to protection as a bona fide purchaser, without notice of a prior equity of a third person therein. But the relinquishment of a valid security which the purchaser before held for his debt, and which cannot be recovered, so as to place him in the same situation substantially as to security as he was in prior to his purchase, may entitle him to such protection. This case is cited with approval in Peck v. Mallams (6 Seld., 545). This court, in Wood v. Robinson (22 N. Y., 564), held that a mortgagee who had taken a mortgage to secure a precedent debt was

Opinion of the Court, per ALLEN, J.

not entitled to protection against a prior latent equity. Nothing was advanced at the time, and no security was given up, neither was there any definite contract for extending the credit on the demands held by the creditor. Judge DENIO lays down the proposition broadly, and all the judges concurred: “When a conveyance is made, or a security taken, the consideration of which was an antecedent debt, the grantee or party taking the security is not looked upon as a bona fide purchaser;" and again, “it is well settled that a grantee or incumbrancer who does not advance anything at the time, takes the interest assigned subject to any prior equity attaching to the subject.”. The doctrine that a valuable consideration is necessary to create a defence against prior equities, is the doctrine of courts of equity in other States and in England, as applied to the transfer of real or personal property, and choses in action other than negotiable instruments. The only difficulty has been in determining what is a “valuable consideration.”

It is generally admitted that the mere existence of a precedent debt is not a sufficient consideration to support a conveyance as against prior equities; but in some States it is held that when made in absolute payment and satisfaction of an antecedent debt, the purchase will be regarded as a purchase for value. But that is not the rule in this State. (Dickson v. Tillinghast, 4 Paige, 215.)

In this State the rule has been applied to the transfer of bills of exchange and promissory notes, and the party taking them in payment of or as security for an antecedent debt when no new credit is given, security surrendered or obligation incurred, has not been regarded as a bona fide holder for value as against third persons having prior equities, but the decisions have not been in entire harmony with those of the Supreme Court of the United States and some of our sister States. The rule as applied to negotiable instruments in this State has been criticised and quarreled with by individual judges, but whenever it has come directly in judgment, the doctrine, as first announced in Coddington v. Bay (20 J. R.. 637), has been adhered to. The claim to distinguish between

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