Pure Oil Co. v. Hunt (46 Ohio App. 329, 1933)

Ross, J.

This is a proceeding in error from the court of common pleas of Hamilton county, wherein judgment was rendered in favor of the plaintiff, Graham P. Hunt, receiver, upon a general verdict.

The action was brought by the receiver of Roberts & Hall, stockbrokers, against the Pure Oil Company, to recover the value of 300 shares of stock in the oil company, which it was alleged had been converted by the corporation on February 27, 1929, when it canceled the certificate of such stock and issued new certificates in lieu thereof to a person or corporation other than Roberts & Hall. ■ No refusal of a demand to transfer the stock to the receiver was alleged.

The Pure Oil Company admitted that it had “issued and delivered to some other person or corporation other than Roberts & Hall new certificates of stock of defendant corporation to take the place of the certificates described in the petition.”

The answer denied that on the date of this alleged conversion, February 27, 1929, Roberts & Hall were, or now are, the holders and owners of such stock, and denied that the certificates were indorsed and delivered to Roberts & Hall in the usual course of business.

The facts essential to a determination of the points of error presented are as follows:

Roberts & Hall for some time previous to the appointment of a receiver were engaged in the buying and selling of stocks. Dean, Onativia & Co. was their correspondent in New York. On April 6, 1925, this company was replaced as correspondent by Pynchon & Co. The first correspondent transferred to the second correspondent all stocks owing to Roberts & Hall, and all checks in settlement of the balances due. In this settlement was included delivery of two of the certificates of stock now in dispute, each for one hundred shares. Pynchon & Co. then placed these certificates in the American Exchange National Bank as collateral for a loan to Roberts & Hall. The certificate for the other one hundred shares had been on June 29, 1923, substituted as collateral by Dean,' Onativia & Co. with the American Exchange National Bank in New York, covering a Roberts & Hall loan. All three certificates were indorsed in blank by Dean, Onativia & Co., and remained with the American Exchange National Bank, or its successor, the Irving Trust Company, until the loan of Roberts & Hall was paid by the receiver, when the certificates were turned over to the receiver, January 22, 1930, who, the evidence shows, made demand therefor, although this is denied by the plaintiff in error.

In 1927, Dean, Onativia & Co. went into bankruptcy, their assets were acquired under order of the United States District Court by the Rosenbaum Grain Corporation, one or more of the stockholders of which corporation had been partners of Dean, Onativia & Co.

On February 27, 1929, the Rosenbaum Grain Corporation presented to the Pure Oil Company, plaintiff in error, affidavits alleging that the certificates for the stock in question had been lost, stolen, or destroyed, and tendered a bond, and on that date new certificates were issued to the Rosenbaum Grain Corporation. While the plaintiff in error still had ample treasury stock, and no question of overissue is involved, the •pleadings admit that the issue to the Rosenbaum Grain Corporation was the identical stock in question.

Dividends on the stock had been continuously paid to Dean, Onativia & Co. and the liquidating trustee, Joseph Rosenbaum, and later to the Rosenbaum Grain Corporation.

There is a great mass of evidence introduced to show that the status of accounts between Dean, Onativia & Co. and Roberts & Hall resulted in the balancing of these accounts at the time of the settlement, and that the 300 shares of Pure Oil Company stock were fully accounted for in the settlement. There is also evidence that through a mistake the Pure Oil Company stock was transferred by the settlement instead of Pacific Oil stock, and much is made of a correction upon the statement changing one to the other.

The evidence is clear, however, that by indorsement Dean, Onativia