Richards v. Ackerman

Headnote

Richards v. Ackerman, 175 App. Div. 746 , affirmed.

Appeal from a judgment of the Appellate Division of the Supreme Court in the third judicial department, entered January 15, 1917, affirming a judgment in favor of plaintiff entered upon a decision of the court at a Trial Term without a jury in an action to enforce the statutory liability of stockholders of the Binghamton Trust Company under former section 196 (now section 206) of the Banking Law. The name of Gaffney, the appellant, appeared upon the stock book as the owner of twenty-one shares. They were taken out in appellant’s name by A. D. Klages, who, on January 20, 1909, surrendered certificate No. 263 for twenty-one shares of stock issued to one C. Fred Hess, and in place thereof took out two new certificates, one No. 272 for twenty shares and one No. 273 for one share. Said Klages signed his own name on the printed forms of receipt which are on the stubs of the stock certificate book of the trust company. On the same day that Klages obtained the new certificates he took them to appellant and told him that he had had the shares represented by the certificates transferred into appellant’s name, and asked appellant to indorse them so that he could make a delivery to cover a sale. Appellant indorsed the certificates in blank without making any protest, and Klages took them away with him. Subsequent to such indorsement Klages delivered certificate No. 272 for twenty shares to the defendant Frederick M. Weed who paid $3,000 for the same. The Appellate Division held that the indorsement by Gaffney without protest was a ratification of the issuance of the certificate in his name and he was, therefore, liable as a stockholder.