
    George A. Treadwell, Respondent, v. William A. Clark and Others, Appellants, Impleaded with Charles E. Thomas and Others.
    First Department,
    July 12, 1906.
    Conversion of stock by pledgee — when owner entitled to recover same from transferee of pledgee — when execution of assignment insufficient to pass title — amendment of answer refused for laches — prior decision followed.
    "When issue was joined in an action in 1899, the first trial had in 1901, judgment for defendant reversed in 1903, and a second trial commenced in 1904, a motion to amend the answer so as to deny that the plaintiff was a resident of the State as alleged in the complaint, made when the case is placed on the day calendar for the second trial, should be denied for laches.
    A decision on points of law decided on the prior appeal from the judgment on the first trial will be followed on an appeal from the judgment on the new trial when the facts are the same.
    
      In an action to redeem, stock which was pledged for a debt and converted and sold by the pledgee the rights o£ the transferee are to be determined upon his transactions with his transferrer and by any knowledge which he possessed or acquired at the time by an inspection of the certificate of stock, or with which he is chargeable as a matter of law for his failure to make inquiry.
    A finding that the transferee had no knowledge or information that the owner only pledged the certificate is not to he construed as a finding that he was a purchaser in good faith without notice, when other findings and refusals to find indicate that the court cnly intended to find absence of actual notice as to who was the true owner.
    When a court finds that the pledgor of stock did not indorse the certificate so as to pass title, it is fatal to any claim of title by the transferee of the pledgee in the absence of an estoppel acting upon the owner. Such finding is war- [ ranted when the blank power of attorney on the assignment attached to the certificate was not signed by the owner or witnessed as required, hut he only wrote his name as owner in the first blank space.
    An allegation in the complaint that the owner indorsed the certificate in blank and pledged the stock by delivery, is not an admission that he assigned it.
    When the stock is pledged by delivery only and without an assignment thereof, the pledgee cannot sell the same except at public auction on notice to the owner, or in an action of foreclosure, and if he sells it at private sale it is larceny and confers no title on his transferee.
    When the owner of pledged stock executes a written assignment leaving the name of the transferee in blank,' the certificate becomes payable to the bearer, and if the pledgee sells .it without notice, an innocent purchaser for value without notice relying upon the appearance of the certificate obtains a good title; not so, however, when the assignment is not executed at all.
    A transferee cannot rely upon such defective assignment as proof of the owner’s intention to assign; on the contrary, the defect puts the transferee upon inquiry.
    An owner .entitled to redeem stock converted by his pledgee is not required to tender the debt due the pledgee to the transferee of the pledgee in order to recover the stock or its present value. Moreover, a refusal of the transferee to give up the stock on demand is a waiver of any such tender.
    Appeal by the defendants, William A. Clark and others, from an order of the Supreme Court, made at the ¡New York Special Term, hearing date the 15th day of December, 1904, and entered in the office of the clerk of the county of ¡New York, denying the said defendants’ motion for leave to renew a motion to be allowed to amend their answers, and also an appeal by the same defendants, except Henry G-. Atwater, from a judgment of the Supreme Court in favor of the plaintiff, bearing date the 16th day of ¡February, 1905, and entered in said clerk’s office, upon the decision of the court rendered after a trial at the ¡New York Special Term.
    
      This is an action for the redemption of a certificate of stock alleged to have been sold, without authority, by the pledgee thereof. The evidence shows, and the trial court found in substance, among other things, that on the 7th day of March, 1888, the plaintiff was the owner of certificate Mo. 311, representing 100 shares of stock in the defendant, the United Verde Copper Company, a corporation organized under the laws of the State of Mew York, bearing date the 5th day of June, 1884, issued and then standing on the books of the company in his name; that the plaintiff was then sojourning in London, England, and was indebted to one Edward Bennett, a grocer, for merchandise, and desiring further credit delivered the certificate of stock to one Charles E. Thomas, the manager of the grocery business, for the purpose of securing the existing and any subsequent indebtedness to said Bennett; that before delivering the certificate, plaintiff wrote his name upon the back thereof, just under the first line of the printed form of a power of attorney, in the blank space left for filling in a recital of the name of the person executing the power of attorney, but he did not sign at the end or fill in the blank at the end for the date of execution or have his signature witnessed as provided on the printed form opposite the blank for the signature of the person executing the assignment or power of attorney; and that this did not constitute a written assignment of the certificate or of á power of attorney in blank, or otherwise, authorizing any other person to assign it; that the certificate was then of small value; that Bennett left the certificate in the possession of Thomas whom he held to be personally liable to him for plaintiff’s indebtedness ; that plaintiff was at the date of the trial still indebted to Bennett or his personal representatives on the account, together with interest, in the sum of $489.59; that after the deposit of the certificate as such security a dispute arose between the plaintiff, Bennett and Thomas as to the amount of his indebtedness, and the amount thereof remained in dispute until the date of the trial of this action ; that in the year 1889 Thomas left Bennett’s employ, and, without the knowledge or consent of plaintiff, took the certificate with him ; that plaintiff has not been given notice in any maimer that the stock would be sold to pay the indebtedness or that Bennett’s lien thereon would be foreclosed; that in January, 1893, Thomas sold the certificate to the defendant Burgess and wrote his name, upon the back in the blank power of attorney, not at the end, however, but in the blank left for filling in the name of the person to be designated as the attorney, which the court found did not constitute an assignment in writing or the execution of a power of attorney in blank or otherwise authorizing any other person to assign the certificate in blank or otherwise.; that thereafter, and in June, 1893 Burgess sold and delivered the certificate to the defendant Clark for $300, and in making the sale and delivery wrote his name upon the back of the certificate in the printed power of attorney in the blank space intended for filling in the name of the transferee, which the court found and held did not constitute an assignment in writing, or power of sale in blank or otherwise, authorizing any other person to assign the certificate; that “in consequence of the apparent and obvious insufficiency and irregularity- of the indorsements of said certificate, at the'request of the defendant Clark, the defendant Charles E. Thomas, on June 22,1893, executed a formal assignment of the said certificate, together with all dividends thereon, to the defendant John De Witt Burgess, and on the same day, at like request, the defendant John De Witt Burgess executed a formal assignment of said certificate of stock with all dividends thereon to the defendant William A. Clark; ” that on said 22d day of ' June, 1893, plaintiff was first notified that the certificate had come into the possession of the defendant Clark, and did not know until that time that Bennett or Thomas had parted -with or sold or attempted to sell it'; that on said last-mentioned day the plaintiff was requested, in behalf of the defendant Clark, to execute a formal assignment to him, which request -was declined, and the defendant Clark was notified that the certificate had been deposited with Bennett as pledgee, and that plaintiff had received no notice of sale and had not consented to a sale thereof ; that “until said June 22, 1893, the defendant Clark had no knowledge, notice or information that plaintiff had parted with said certificate only as a pledge to secure an indebtedness to said Bennett, nor had said Clark until said date any knowledge, information or notice how said certificate had come into the possession of the said Charles E. Thomas.;” that in August, 1893, plaintiff personally notified the defendant Clark that he was the owner of the certificate of stock and of the facts concerning the pledge thereof, and demanded delivery to him which was refused, and on the 16th day of the same month, the plaintiff notified the defendant Clark and the United Verde Copper Company, in writing, that he was the owner of the certificate and demanded possession thereof and forebade them to recognize any one else as owner or to transfer it; that notwithstanding the notice and demand, the company recognized the defendant Clark as owner, and on the 16th day of September, 1893, accepted a surrender of the certificate by the defendant Clark, transferred the stock on its books to his name and issued to him in his name a new certificate, Vo. 542, therefor, and thereafter the defendant Clark, claiming to be the owner, collected and received the dividends declared and paid thereon; that in 1899 the Vew York corporation was lawfully dissolved, and its property became vested in its directors under section 57 of the Stock Corporation Law, and pursuant to a reorganization plan on the 2d day of September, 1899, the United Verde Copper Company of West Virginia was incorporated under the laws of West Virginia in the interests of the former stockholders of the Vew York corporation, and on the 9th day of January, 1900, the defendant Clark exchanged said certificate Vo. 542 for a certificate representing 100 shares in the new corporation, and a debenture bond for $1,000 issued by it, and still holds them, claiming ownership, and has collected dividends and interest thereon ; that the value of the 100 shares in the West Virginia corporation at the date of the tidal was $30,000, and of the bond was $1,000 ; that the defendant' Clark received dividends on said certificate Vo. 542 aggregating $2,125, which with interest at the date of the trial aggregated $2,960.96, and from the West Virginia corporation on the stock $4,125, which with interest aggregated $4,878.24 and $189.55 interest on the bond, which with interest amounted to $216.18; that the $300 paid by the defendant Clark, with interest from January 1, 1893, to the date of the trial aggregated $508.10. The court found as conclusions of law that -the plaintiff was entitled to redeem the certificate of stock in the Vew York corporation and the stock and bond of the West Virginia corporation issued in exchange therefor, as against Bennett and his estate and all defendants, on paying the amount of the indebtedness to secure which it was pledged, aggregating at the time of the trial $489.59; .that plaintiff was entitled to recover from the defendant Clark the certificate representing 100 shares of stock in the West Virginia corporation and the debenture bond, and that if the defendant Clark failed to deliver them within a time to be fixed in the judgment the plaintiff was_entitled to. recover .from him the sum of $31,000, the value thereof; that the moneys received by the defendant Clark on account of the stock and bond, with interest, aggregating at the time of the trial $8,054.48, belongs to 'the plaintiff, and that he is entitled to recover that sum, less the amount due Bennett, which was directed to be deducted and paid to the public administrator, as administrator of said Bennett, deceased, 'and the $508.10, representing the amount Clark paid for the stock and interest thereon, leaving a balance of $7,056.79, for which judgment was awarded in favor of plaintiff, with interest from December 22, 1904; that plaintiff was entitled to receive and collect the dividends and interest on the stock and bond after December 3, 1904, and to a judgment for costs. Judgment was entered in accordance with the decision.
    On the 3d day of November, 1904, the appellants moved to amend their answer so as to deny the plaintiff’s residence in the State of New York and to plead the Statute of Limitations of the State of Montana and want of jurisdiction in this court. The motion was denied apparently upon the ground that no affidavit was made by the defendant Clark and that sufficient excuse for the delay in making the motion had not been shown. On the 1st day of December, 1904, appellants moved upon the same and additional affidavits, including an affidavit of the defendant Clark and the proposed amended answer, for leave to renew the former motion and to serve the proposed answer. The court was presided over by the same justice who presided when the original motion was made and the motion was again denied.
    It is stated that an appeal was taken from that order to this court and that the appeal was dismissed. The present record contains the notice of appeal from the last order and the notice of appeal from the judgment gives notice that the appellants also intend to review the order.
    
      
      Alfred B. Cruikshank, for the appellants.
    
      Charles M. Demond [Russell G. Lucas with him on the brief], for the respondent.
    
      
       See Laws of 1892, chap. 688, § 57, added hy Laws of 1896, chap. 932.— [Rep.
    
   Laughlin, J.:

, Issue was joined in this action on the 5th day of December, 1899. The first trial was in the month of June, 1901, and at the close of the plaintiff’s case judgment was directed dismissing the complaint on the ground of laches. The judgment was reversed by this court in June, 1902. (Treadwell v. Clark, 73 App. Div. 473.) The second trial was commenced on the 20tli day of December, 1904. The motion to renew the motion to amend the answer was made after the case was placed on the day calendar for the second trial. Without stopping to consider the objections that the appellants cannot now review the order denying the motion to amend on account of the dismissal of the appeal therefrom and owing to their failure to obtain leave to renew the motion, we are of opinion that the motion was properly denied upon the gróund of laches. The plaintiff alleged that he was a resident of the State of Hew York and this allegation was not denied. He was a witness upon the first trial and fully examined concerning his residence. The defendant Clark had known the plaintiff for many years. It is manifest that due diligence on the part of the appellants would have enabled them to have sooner discovered the facts which they sought to set up in their amended answer. If they wished to question the jurisdiction of the court upon the ground that the plaintiff was not a resident of Hew York they should have investigated that fact at the outset and have moved to be relieved from their admission by their pleading arid for leave to set up the other facts which they now deem material to raise the question of jurisdiction and the Statute of Limitations of Montana, knowledge o‘f which could have been readily acquired, if indeed they are not chargeable therewith as the principal defendant, Clark, is a resident of that State. They should have made their motion without having quietly submitted to the jurisdiction of this court and sought relief from the plaintiff’s claim by defending the action for upwards of six years.

On the former appeal from the judgment dismissing the complaint this court decided, many of the questions presented by the present appeal. We there decided that jurisdiction was acquired; that a suit in equity would lie and that the plaintiff, if entitled to .recover, would be entitled to recover the stock if delivery thereof could be made; that plaintiff was not guilty of laches in bringing the action; that no Statute of Limitations was a bar thereto and that a tender was not a condition precedent to the right to maintain the action. Those questions were argued on the former appeal and were necessarily involved. ITnless thejr had been resolved in favor of the plaintiff, we should have affirmed the judgment. The evidence upon which the questions of law which we decided before arise is not materially different now. We should not, therefore, re-examine those points of law, and they must be regarded by this court at least as the law of the case.

It is only necessary to consider some questions discussed in our former opinion, but not finally decided, and any new light in which the case is presented by the evidence offered in behalf of the appellants.

In our former opinion reference was made to evidence indicating that the defendant Clark had actual notice that the stock had been merely pledged by the plaintiff. Allusion was also made to the indorsements upon the certificate, and the opinion was expressed that Thus is evidence furnished by the very appearance of the certificate sufficient to put an intending purchaser upon inquiry.” In the former record it appeared that in a conversation between the defendant Clark, the plaintiff and 3VIr. Demond, one of the attorneys for the plaintiff, Clark admitted to them, in effect, that before the purchase of the stock was completed, he had received a letter from Burgess, from whom he received the stock, informing him that the stock had been pledged by the plaintiff to a grocer in London, and this evidence was uncontroverted. Upon the last trial botli the plaintiff and Demond again testified to the same effect, but their testimony in this regard was controverted by the testimony of the defendant Clark. There are many facts and circumstances .tending to corroborate and indicate the probability of the testimony given by the plaintiff and his attorney on this subject, and were it not for the fact tliat other evidence now adduced by the appellants, which is practically uncontroverted, is before us, we would be inclined to the Anew that tlie learned trial court, in find-ing that until the 22d day of June, 1893, the defendant Clark had no notice, knoAvledge or information that plaintiff had parted with the certificate only as a pledge to secure an indebtedness to Bennett and that until said date he had no information or notice as to Iioav the certificate came into the possession of Thomas, is against the Aveight of the evidence. It iioav appears, hoAvever, that Burgess opened negotiations for the sale of the certificate of stock by a let-ter to the United Verde Copper Company on the 1st day of May, 1893; that the company referred his letter to the defendant Clark and so notified him by letter on the third of May; that on the sixth day of May Burgess wrote the secretary of the company, inquiring concerning the value of the stock and accrued dividends thereon; that on the thirteenth of May the secretary replied that there were no unpaid dividends, that the certificate stood in the name of Tread-well and that there was no shareholder by the name of Thomas or Burgess; that on the same day the defendant Clark wrote Burgess in ansAver to the latter’s letter to the company of May first, saying: “ I do not find, your name on the list of stockholders of the United Verde Copper Company. There are 800 shares in the name of Geo. A. Treadwell. However, if you hold the stock I am Avilling to pay you $3.00 per share for it,” and informed Burgess that lie would be in Los Angeles, Cal., in a feAv days and that a letter would reach him there at Ho. 933 Olive street; that on the receipt of this letter, Burgess wrote Wells, Fargo & Co. on June second at Los Angeles, inclosing the stock with directions to deliver it to Clark on payment of $300; that notice Avas sent by Wells, Fargo & Co. to the defendant Clark at the address given in his letter to Burgess, and the brother of the defendant Clark called at the office of the express company and Avas informed of the contents of the letter sent by Burgess inclosing the stock, and as he had no knowledge on the subject, he wrote the defendant Clark, at Butte, Mont., saying: “ There is 100 shares of Verde stock at the" express office to be delivered to you on payment of $300. Shall I take it up; if so, send order for Wells, Fargo & Co. to deliver to me and I can forward by regular mail; ” that on the twelfth of June the defendant Clark Avired his brother in answer to this letter: “ Take out Verde stock and pay Wells .Fargo if assigned by Treadwell to Thomas then Burgess; ” that upon the thirteenth day of June the brother of the defendant Clark paid the express company $300 and received the stock and forwarded it by mail to the defendant Clark at Butte, Mont., where it was received on or about the loth day of June, 1893. From this evidence it appears that the sale from Burgess to Clark was consummated prior to the time when he would have received a letter from Burgess, who was at Tucson, Ariz., if written on the 16th day of June, 1893. It is not very material, therefore, whether Clark received a letter from Burgess, dated on the sixteenth day of June, informing him that-the stock had been pledged by the plaintiff in London. To this extent, therefore, the observations contained in our former opinion are inapplicable to the case as presented by this record. The rights of the defendant Clark are to be determined upon the transaction with the express company, representing Burgess, and any knowledge which he possessed or acquired at that time by an inspection of the certificate, or is chargeable with as matter of law for his failure to inquire. It appears that prior to accepting and paying for the stock, neither the defendant Clark nor his brother, who represented him in accepting the certificate, made any inquiry concerning the right of Burgess to sell the stock, other than an examination of the stock book showing that the stock stood in the plaintiff’s name, as appears from the letter to Burgess.

The learned counsel for the appellants lays stress upon the finding in the record now before us, that prior to the 22d day of June, 1893, the defendant Clark had no notice, knowledge or information that the plaintiff parted with the certificate only as a pledge to secure his indebtedness to Bennett, or as to the circumstances under which the certificate came into the possession of Thomas. If this finding is to be construed as a finding that the defendant Clark was a purchaser in good faith and without any notice or knowledge of the rights of the plaintiff, and without notice or knowledge of facts putting him upon inquiry concerning the rights of the plaintiff, there might be difficulty in sustaining the judgment. It might then be argued with some force that the logical conclusion from such a finding would be that the plaintiff in indorsing the certificate had enabled the holder to mislead the defendant Clark to his prejudice, and that the plaintiff should be estopped from now claiming that lie did not intend to part with the title. It is manifest, however, that the learned court did not so intend in mating this finding. It is evident that the sole object and purpose of the finding was to show that the learned trial court disbelieved the testimony concerning the letter of June 16, 1893, from Burgess to the defendant Clark, and was of opinion that Clark had no actual notice of plaintiff’s claim until the 22d day of June, 1903, when McDonald, the vice-president of the company, to whom Clark had on the seventeenth day of June forwarded the certificate with the request that he obtain an assignment thereof from the plaintiff, was informed by plaintiff that he had pledged the stock as security for the indebtedness to the grocer and had never received any notice of sale thereof". This clearly appears by other findings and by the refusal of the court to make findings requested by the appellants. The court refused to find, as requested by appellants, that neither the defendant Clark nor his brother had knowledge or notice of the circumstances under which ” Thomas obtained the certificate of stock, and marked the finding Bef used, except as already found.” The court also refused to find, as requested by the appellants, that Burgess purchased the stock in good faith and sold it to Clark in good faith, believing that he had right and title thereto; and also refused to find, as requested by them, that the defendant Clark purchased the stock in good faith, believing that Burgess had title thereto and the right to dispose thereof. There is no express finding that the appearance of the certificate of stock was such as to put the defendant Clark upon inquiry and that he is chargeable with the lcnowh edge which reasonable inquiry would have revealed. The evidence, however, fairly warrants, if it does not require, such a finding; and if necessary for the purpose of sustaining the judgment, the fact must be assumed to have been found. The court did find that the plaintiff delivered the certificate to Thomas as the agent of Bennett, as security for the indebtedness, but that it was not assigned and that tifie did not pass. This finding is sustained by evidence, and in the absence of evidence and a finding of estoppel, it is fatal to the claim of title made by the defendant Clark. In. the absence of some element of estoppel, no title can be acquired to personal property, other than negotiable instruments, as against the true owner. (Mohawk Nat. Bank v. Schenectady Bank, 78 Hun, 90 ; affd., 151 N. Y. 665 ; Ballard v. Burgett, 40 id. 314.) Certificates of stock have only been given the attributes of negotiability to a limited extent. (Knox v. Eden Musee Co., 148 N. Y. 441; Driscoll v. West Bradley C. M. Co., 59 id. 96 ; Weaver v. Barden, 49 id. 286.)

The learned counsel for the appellants contends that in view of the allegation of the complaint to that effect that the plaintiff, on delivering the certificate of stock to Thomas, indorsed it in blank,, which is admitted by the answer — there was no issue with respect to the appearance of the certificate or the effect of the plaintiff’s indorsement. We do not agree with this contention. The allegation of the complaint was strictly true. The plaintiff alleged that he pledged the stock, not that he assigned it. The difficulty is, that the learned counsel for the appellants seeks to construe the allegation into an allegation that the jffaintiff signed the power of attorney or assigned the stock in- Hank. Such is not the allegation, and it should not be so construed. The plaintiff neither. executed the blank power of attorney nor assigned the certificate. He did not part with title. It is, therefore, a case of a pledge of stock, where the pledgee has sold without notice, or where the property pledged is delivered to the agent of the person for whom it is intended, and the agent appropriates the same to his own use by selling it as if it were his own, and is thus guilty of larceny, in neither of which cases does the jmrchaser get a good title as against the true owner. (Treadwell v. Clark, supra; Cook Corp. [4th ed.] § 472; Jones Pledges [2d ed.], §§ 581, 725 ; Knox v. Eden Musee Co., 148 N. Y. 441; Marden v. Dorthy, 160 id. 41.) From the plaintiff’s standpoint, Thomas was acting as the agent of Bennett and he left the certificate with him in pledge for Bennett. In these circumstances, Bennett had no right to sell the certificate except at public auction, upon personal notice to the plaintiff of the time and place of sale (Content v. Banner, 184 N. Y. 121), and in the event of his inability to give such notice, his remedy was an action to foreclose the lien. (Stearns v. Marsh, 4 Den. 227; Strong v. National Mechanics’ Banking Assn., 45 N. Y. 718.) Although as between the plaintiff and Bennett, Bennett may be responsible to the plaintiff for the sale, yet it appears by the undisputed evidence that Bennett did not authorize the sale or have any knowledge thereof, and that Thomas did not account to him for the proceeds. Thomas concedes that he first received the certificate of stock in pledge for Bennett, but he claims that Bennett elected to hold him personally responsible for the account and refused to accept the stock, and that the plaintiff, upon being notified of this fact, made him a present of the certificate. The court in directing the judgment orally from the bench stated in-emphatic terms the incredibility of the story, and the plaintiff’s denial thereof has been accepted by the court in making the decision. With that view of this evidence we agree.

The defendant Clark, therefore, is in the position of being in possession of property that rightfully belongs to the plaintiff and whichhas been wrongfully appropriated and converted. He attempts to show title by contending that the plaintiff, in placing liis name in the blank in the second line of the power of attorney, intended to execute the power of attorney and assign the stock, and he cites cases holding that in certain circumstances, where the intention to execute a contract was manifest, it is immaterial upon what part of it the signature is placed. That doctrine does not aid him, because, while it would have been competent for him to have shown in support of his title that the plaintiff by thus indorsing his name in the blank power of attorney intended to assign the stock, such is not the presumption to be gleaned from the appearance of the document, which is all that the defendant Clark acted upon, without extrinsic evidence. Perhaps the brother of the defendant Clark did not realize the legal insufficiency of the signature as an assignment of this stock, but the latter knew the necessity of a formal assignment, as shown by his telegram to .his brother, and he discovered that it was lacking instantly upon inspecting the certificate and proceeded to obtain formal assignments, manifesting an intention to hold Burgess if it would not be given, and taking some steps with respect to putting that intention into effect, as appears by the letter from Burgess to the plaintiff on the 2d day of September, 1893. It does not even appear that the defendant Clark or his brother was familiar with the signature of the plaintiff or knew the indorsement of his name was in his handwriting; and even if they did, it merely indicated that he at one time started to fill out the blank power of attorney or assignment, but that he did not complete it and for some reason abandoned the intention of doing so. The certificate merely showed the plaintiff's name inserted in the blank as follows: “ Know ALL Men By These Presents that .................... George A. Treadwell do. hereby appoint.....................................” The defendant Clark, therefore, was not justified in relying upon the certificate as an assignment thereof by Treadwell. The certificate was issued in the plaintiff’s name, and it contained the usual printed blank power of attorney for executing a power of attorney or assignment to an individual or in blank, and it was not executed. The first blank was merely filled in. At the^ end where a space was left for the signature there was the usual witness clause blank. Mo blank, except that in the second line, appeared to have been filled out by or in behalf of the plaintiff. If the plaintiff had executed the assignment by signing in the proper place at the end, leaving the space for the name of the attorney or assignee blank, then, under the well-settled rule, the certificate would become payable to bearer, and if he had then pledged it and the pledgee had sold it without notice, an innocent purchaser for value, relying upon the appearance of the certificate, would obtain good title. (McNeil v. Tenth National Bank, 46 N. Y. 325; Brady v. Mount Morris Bank, 65 App. Div. 212; Fifth Avenue Bank v. F. S. S. & G. S. F. R. R. Co., 137 N. Y. 231; Dudley v. Gould, 6 Hun, 97.) In McNeil v. Tenth National Bank (supra), which is the leading authority upon the subject, Judge Bapallo, in writing the opinion for the court, says: “ Simply intrusting the possession of a chattel to another as depositary, pledgee or other bailee, or even under a conditional executory contract of sale,, is clearly insufficient to preclude the real owner from reclaiming his property, in case of an unauthorized disposition of it, by the person so intrusted. (Ballard v. Burgett, 40 N. Y. R. 314.) ‘ The mere possession of chattels, by whatever means acquired, if there be no other evidence of property or authority to sell from the true owner, will not enable the possessor to give a good title.’ Per Denio, J., in Covill v. Hill (4 Den. 323).

“ But if the owner intrusts to another, not merely the possession of the property, but also written evidence, over his own signature,, of title thereto, and of an unconditional power of disposition over it, the case is vastly different. There can be t no occasion for the delivery of such documents unless it is intended that they shall be used either at the pleasure of the depositary or under contingencies to arise. If the conditions upon which this apparent right of control is to be exercised are not expressed on the face of the instrument, but remain in confidence between the owner and the depositary, the case cannot be distinguished in principle from that of an agent who receives secret instructions qualifying or restricting an apparently absolute power.”

There was nothing on the face of the certificate or in the indorsement by which the plaintiff should be deemed estopped from asserting his title. Burgess had possession, but not title. The plaintiff intended to part with possession and he may have intended to assign with a view to clothing the pledgee with authority to enforce the pledge, but he did not on the instrument do so. He clothed no one with the indicia of title. And all purchasers were put upon inquiry. Even the maker of a promissory note which has been wrongfully or fraudulently diverted may successfully -defend against a purchaser receiving it under circumstances- such as would put a reasonable man upon inquiry. (Canajoharie Nat. Bank v. Diefendorf, 123 N. Y. 191.) Plaintiff having shown tliat the stock was stolen or converted, the burden should rest upon the defendant to show that he was a Iona fide holder for value which, in these circumstances, would, in effect, require proof of the existence of facts constituting an estoppel to relieve him of notice or of knowledge of the facts that a reasonable inquiry would have disclosed. (See Simpson v. Del Hoyo, 94 N. Y. 189.)

As already observed, the defendant Clark might have shown, if he could, that the plaintiff’s indorsement was intended as an absolute assignment, but he could not rely upon the certificate and indorsement alone as proof of that. If he had investigated before purchasing with a view to obtaining that evidence it is probable that he would have promptly discovered the true facts, as he did upon applying to the plaintiff for a further assignment. He is not, therefore, in a position to invoke the application of the rule of the McNeil Case {supra).

There was no specific discussion on the question of the waiver of the plaintiff’s right to redeem the stock in our former opinion, but the point is fully covered by the discussion of the claim made by appellants that the right to maintain the action has been lost by laches. The evidence on the part of the plaintiff bearing upon that issue is substantially the same as before. It is now controverted in some respects, thus presenting a question of fact which has been decided adversely to the appellants.

The appellants also contend that the court erred in deciding that in the event of the failure of the plaintiff to recover the stock he is entitled to its value at the time of the trial. They claim that he should be limited to a recovery of its value at the time he demanded it of Clark, for the reason that he failed to tender the amount Clark paid therefor. It appears, however, that Clark declined to deliver the stock and manifested an intention to contest plaintiff’s right to a recovery. This would constitute a waiver of a tender, even if a tender to him were necessary. Moreover, a tender to Clark was unnecessary. The plaintiff’s right to redeem does not depend upon the consideration paid by Clark or whether Clark should be reimbursed therefor. The tender must be made to the pledgee or his representatives. Even though Clark were entitled to be reimbursed that would not necessitate a tender before trial in an equity suit. Clark had notice that the plaintiff demanded the stock, and if he wished to be relieved of the liability of holding it while it might increase or decrease in value,^ he should have delivered it in accordance with the demand. We held on the former appeal that the plaintiff is entitled to recover the stock, less the amount for which it was pledged, and the court upon the trial has liberally allowed him to be reimbursed for the amount expended, together with interest thereon. It would be a singular judguneut that would decree to the plaintiff the' right to recover property worth upwards of $30,000 and leave it optional with the defendants whether to deliver the stock or to pay its value at a remote past period which, in this case, appears to have been about $300. If he has a right to the stock, it must follow that he is either entitled to the stock or its value at the time when his inability to recover possession is ascertained.

The exceptions taken upon the trial and to the findings and the refusals of tlie court to find have been examined, and we think they present no reversible error.

It follows, therefore, that the judgment and order should be affirmed, with costs.

O’Brien, P. J., Patterson, McLaughlin and Houghton JJ., concurred.

Judgment and order affirmed, with costs. Order filed. 
      
      Sic.
     
      
      40 FT. Y. 314.— [Rep.
     
      
      Broksou, Ch. J. — [Rep.
     