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evidence, was no defense to the action, and that, as supporting its allegations, no evidence on its behalf should have been admitted. If A's property is sought to pay B's debt, it is for A. to make defense, and not B. This is clearly brought out in the case of Langdon & Bro. v. Conklin & Martin, 10 Ohio St., 439, where it was held not competent for a defendant in attachment to move the court to discharge the attachment on the ground that the property attached did not belong to him, and that it was error for the court to grant such motion. With the evidence adduced by Forbriger excluded, the evidence for the plaintiff made a perfect case for a decree for sale of the shares against the corporation to pay Forbriger's debt. It is clear, therefore, that the finding of the court below, on the evidence properly before it, was erroneous, and that a new trial must be granted.

In so holding, however, it becomes necessary for us to consider what the proper course trial court will be when the case comes up for a new trial. Whether evidence adduced by Forbriger was relevant to the issue before the court below or not, we presume that being before the court, it was within the power of the court to consider it for the purpose of determining whether it was proper or necessary to make new parties to the action, and that we may make the same use of it. The action is an equitable one, the subject-matter of which is the sale of stock to pay a debt. Under secs. 5006 and 5018, Rev. Stat., it is clear that the court may order any person having or claiming an interest in that stock to be made parties. While a decree for sale could only affect the actual interest of Arthur Forbriger in the stock at the time the action was begun, it would be unusual for a court of equity, with the power to bring all claimants before it, to attempt to sell what, though clearly a nominal interest, may in fact be nothing more. This brings us then to the question in the case which has been most discussed. Does the evidence set forth in the bill of except. tions disclose an interest in the stock in others than George Forbriger, making it proper to have such others made parties?

The evidence discloses the following state of fact. George Forbriger was the owner of $10,000.00 of the par value of the company's stock in 1887. In 1888, several months before the bringing of this action, he pledged the stock to his sister to secure a debt owing by him to her. In July, 1888, as agent for his sister, he took the stock to a broker to be sold under the pledge. The certificate was in the usual form. “This is to certify that George Forbriger is entitled to one hundred shares in the capital stock of the Krebs Lithographing Co. of Cincinnati, transferable only on the books of the company in person or by attorney on surrender of this certificate.” Signed and sealed by the officers of the company. The certificate was indorsed “For value received the undersigned hereby sell and transfer to

shares of stock within mentioned and described, and hereby appoint

true and lawful attorney irrevocable (with power of substitution) to transfer said stock on the books of the company,"and signed by George Forbriger. On the fourteenth of September, 1888, the summons in the present action was served upon the Lithographing Company and Forbriger. At some time during the last week of September the broker, in whose hands Miss Forbriger had put the stock, exchanged it for stock in another company, delivering the certificate to the purchaser. Miss Forbriger, the sister, had an interest as pledgee in the stock with power of sale and with notice of such sale given to the pledgor. when plaintiff's suit was begun. Her right to sell !n dir her debt could not of course be affected by plaintiff's action. It

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is claimed however for plaintiff, that while she might have sold for cash, she could not exchange, and that her transferee took no title to the stock under such tortious exercise of her power, except that of pledgee i. e. the same right which Miss Forbriger had. The claim is based on two grounds, first that stock is non-negotiable and second, the action by plaintilf was lis pendens and notice to the world of plaintiff's right to subject Forbriger's interest as pledgor in the stock.

As between the pledgor and the pledgee of stock, the pledgee holds neither the equitable nor the legal title, but only a special property. And so in Henkle v. Salem Mf'g Company, 39 Ohio St., 547, 553, it was held that the pledgee of stock who had not transferred the stock into his name on the books of the company, was not liable as the equitable owner of the stock to creditors of the corporation. But it is to be borne in mind that although as between pledgor and pledgee, the pledgee had only the special property, the pledgor had given to the pledgee all the indicia of full equitable title by a written assignment with an irrevocable power to confer the legai title. The Supreme Court Commission of Ohio, in Combes v. Chandler, 33 Ohio St., 178, 185, quotes the following from Pomeroy on Legal Remedies, 160. “The owner of certain things in action not technically negotiable, but which, in the course of business customs, have acquired a semi-negotiable character as a matter of fact, may assign or part with them for a special purpose, and at the same time may clothe the assignee, or person to whom they have been delivered, with such apparent indicia of title, and instruments of complete ownership over them and power to dispose of them, as to estop himself from setting up against a second assignee, to whom the securities have been transferred in good faith, for value, the fact that the title of the firsu holder was not absolute and perfect. In the case referred to, the principle was applied to a non-negotiable note, which has been assigned to a bona fide purchaser by a fraudulent indorsee. There is also cited by the court, in support of this principle, and therefore with apparent approval, a case from New York, in which the rule was applied to stock assigned by indorsement with irrevocable power of attorney to transfer. McNeil v. Tenth National Bank, 46 N. Y., 325. The application of the principle to the particular facts of Combes v. Chandler may have been somewhat blown upon in Osborn v. McClelland, 43 Ohio St., 284, but we do not understand the Supreme Court in the last named case to dissent from the case of McNeil v. Tenth National Bank, or the principle as stated by Pomeroy. But it is said that this is only the doctrine of bona fide purchaser for value in equity, and that it can only apply in favor of the holder of the legal title; Anketel r. Converse, 17 Ohio St., 11, and that in New York the endorsee o: a certificate of stock without transfer holds the legal title, while in Obio, he only holds the equitable title. Conant v. Seneca Co. Bank, 1 Ohio St., 298. It is to be observed, however, that the pledgee in this case held more than a mere assignment of the stock in blank, and thus the apparent equitable title. She also held an irrevocable power of attorney in blank, with power of substitution to make transfer of the legal title. The holder of the legal title has thereby estopped himself to assert any control over the legal title against an assignee of the certificate for value from the payee.

Therefore it is not material with reference to the rights of a bona fide purchaser of such a certficate, so indorsed, whether his assignor held the equitable title with full power to dispose of the legal title conferred by its holder, or had the apparerit legal and equitable title in himself. The

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authorities, with regard to the rights of an innocent purchaser for value of stock so endorsed, are numerous, and are found not only in states where the indorsee of a certificate holds the full legal title, but also in such states as New Jersey and Illinois, where he holds only the equitable title. Mt. Holly Co. v. Feree et al., 17 N. J. Eq., 117; Otis v. Gardner, 105 Ill., 436; Cook on Stock and Stockholders, section 473, and cases cited.

This we understand to be the intimation of the court in Norton v. Norton, 43 Ohio St., 509, although it was not necessary in that case to so decide. The bona fide purchaser from the pledgee by exchange took absolute ownership to the stock with power to take legal title which Forbriger could not deny.

The only other ground upon which counsel for plaintiff relies, is the doctrine of lis pendens. He says that plaintiff's action was notice to all the world of his right to subject Forbriger's interest as pledgor in the stock to the payment of the debt, and created a lien, of which the purchaser was charged with notice. Section 5055, provides that “when the summons has been served, or publication made, the action is fending, so as to charge third persons with its pendency; and while pending, no interest can be acquired by third persons in the subject-matter thereof, as against the plaintiff's title.” This is merely a statutory enactment of the principle of lis pendens prevailing before the code, and is, of course, to receive a construction in accordance with that doctrine. The third person, therefore, to whom the suit is to be notice, are the same persons who before the code would be chargeable with notice by lis pendens. The doctrine of lis pendens is based, not upon the theory that a pending suit is constructive notice to all the world, but upon the ground that the law will not allow litigation, rights to the property in dispute. so as to prejudice the opposite party, and defeat the execution of the decree to be entered in the cause. Dovey's Appeal, 97 Pa. St. 153; Bellaney v. Sabine, 1 DeGex & Jones, 580; Bennetton Lis Pendens, sec. 17. It can only affect those acquiring an interest pendente lite from one of the parties to the litigation. Irvin's Lessee v. Smith, 17 Ohio 226; Hunt v. Haven's, Adm., 52 N. H., 162; Davis v. Rankin, 50 Texas, 279. Bennett on Lis Pendens section 243. Now it may be seri. ously questioned, whether in as much as Forbriger had conveyed to his sister the apparent equitable title, with complete power of disposition before the suit was begun, a bona fide purchaser from her as against whom Forbriger himself would be estopped to deny that he ceased to have any interest in the stock after such transfer, may not claim to hold a title derived from him before the suit. The only act of Forbriger by which the stock passed from him completely, was done before the lis pendens began and it would seem that the purchaser could hardly be affected by a suit concerning Forbriger's interest in the stock when so far as the purchaser was concerned. Forbriger's interest had ended before the suit was beguin. But whether this argument is founded on a correct view of the doctrine of lis pendens or not, there is another ground for holding that lis pendens does not affect the purchaser.

It is well settled in this country and England that lis pendens applies generally to all kinds of personal property, Bennett on Lis Pendens 139, and cases cited. Chancellor Kent in Murray v. Lylburn, 2 Johns. Ch., 441, suggests as an exception to the general rule, cash, negotiable paper not due, and perhaps movable personal property such as horses, cattle, grain, etc. He thinks no exception should be made of bonds and mort.

because they are not the subject of ordinary commerce. In Stone

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v. Elliott, u Ohio St., 252, 253, it is held that the doctrine has no application to negotiable paper. In County of Warren v. Marcy, 97 U. S., 105, it is held not to be applicable to county bonds. Justice Bradley in that case says “But this rule is not of universal application. It does not apply to nigotiable securities purchased before maturity, nor to articles of ordinary commerce sold in the usual way. This exception was suggested by Chancellor Kent in one of the leading cases on the subject in this country, and has been confirmed by many subsequent decisions.' In the present mode of doing business, stock evidenced by indorsed certificate with irrevocable power of attorney to transfer has certainly become an article of commerce, and as between indorsees with power to transfer legal title, by the operation of estoppel explained before, has required a quasi negotiable character. In accordance with the suggestion of Chancellor Kent that the doctrine of lis pendens should be limited by commercial necessities, it would seem to be a proper holding, that stock so evidenced by certificates had acquired such a commercial character as to require that lis pendens be not applied to it. Accordingly the Court of Appeals of New York in two cases, Holbrook v. Zinc Co., 57 New York, 616 and Leitch v. Wells, 48 New York, 586, has held that lis pendens does not apply to stock. Now the usual commercial mode of transferring stock is by delivery of certificates with blank assignment and power of attorney. As we have explained in such case, the negotiability by estoppel applies where the assignee without transfer takes only the equitable title as well when he takes the full legal title. The reason for making stock an exception to the doctrine of lis pendens is its commercial character of quasi negotiability. This it has in Ohio, as we have seen, as well as in New York. Therefore the New York authorities are applicable notwithstanding the difference in the rule between that state and this as to the legal title. We think the reasoning of the court in these New York cases to be forcible and to be in accordance with the more modern and liberal view of the hard doctrine of lis pendens, and are quite willing to rest our decision of this case upon the principle maintained in those authorites.

With this view of the rights of persons, not parties to the action, in the subject matter thereof as they appear on the evidence adduced, we think the court below should have directed the pledgee and purchaser to be made parties, and have then determined what interest, if any was subject to plaintiff's bill; so that in decreeing a sale of Forbriger's interest in the stock, it should not do a vain thing and only cloud the real owner's title. The motion for a new trial will be granted with directions to the trial court to make the purchaser and pledgee parties.

PECK and MOORE, JJ., concur.
Wilby and Wald for plaintiff.
J. J. Glidden and G. Tafel, contra.

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Chatfield & Woods v. Hamilton County Commissionera

315

TAXATION.

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(Hamilton Common Pleas, 1889.) CHATFIELD & Woods v. HAMILTON Co. (COM'ERS.) Neither the county commissioners nor auditor have any power to refund exces

sive taxes for back years, caused by the assessor having, in valuing a building, failed to deduct for the destruction of an old building, where the error is not clerical; that is, when there is nothing on any of the records or returns giving data or directing an allowance for the old structure. So that any action by the commissioners would be reviewing and reversing the tax

officers in fundamental as distinguished from clerical matters. SHRODER, J.

This is an appeal from the County Commissioners' rejection of plaintiffs' claim for refunding of taxes. In 1882, the plaintiffs destroyed a structure on their land worth $8,000 and rebuilt a new one at a cost of $32,000, which included the cost for water-power. The assessor, in 1883, under Rev. Stal. 2753, 2730, 2731, returned the new structure at a valuuation of $20,500. The plaintiffs having paid the taxes for 1883, 1884, 1885, 1886 and 1887, on July 17, 1838, upon their application, the auditor favored reducing the valuation by $7,000, and submitted to the decision of the Commissioners the refunder claim for taxes paid the preceding five years. In claims of this kind, the jurisdiction of the Commissioners can be found only in sec. 1038, Rev. Stat., and is as to collected taxes, similar to that of the auditor as to taxes for the current year.

The authority of the auditor to make corrections on his current duplicate, is contained in Rev. Stat., secs. 1038, 2800, 2801, 2802, 2803 (78 Ohio L., 47). Mainly, these sections respectively treat of distinct subjects for correction.

Section 1038 (found in Rev. Stat., in chapter for “County Auditor'') and sec. 2800 (found in chapter for "Assessing Real estate"), relate to the correction of errors which are wholly clerical in their nature State v. Comrs., 31 Ohio St., 271; Butler v. Comrs., 39 Ohio St., 168; State v. Cappellar, 9 Ohio Dec. Re., 1015; Perin v. Comrs., 6 Ohio Dec. Re., 1085.

9 In sec. 1038, the errors therein referred to, are described as “erroneously charged,” which expression, when used in connection with the tax list and duplicate, indicates a clerical error (see Hoglen v. Cohan, 30 Ohio St., 442). These erroneous charges, when they belong to the current year and on the unsettled duplicate and as to the particulars named in the section, are to be settled by the auditor, but when their connections affect moneys collected upon past duplicates and in the treasury, are to be referred to the Commissioners, whose inquiry is restricted for their determination of what is “so erroneously charged" Comrs. v. Eckstein, 6 Dec. Re., 843; Ridderman v. Comrs., 6 Dec Re., 939: Ives v. Comrs., 6 Dec. Re., 1079. But in all the cases the error is one which has not arisen from the investigation of facts, but is one found on the face of the record Ins. Co. v. Cappellar, 38 Ohio St., 560,574.

The other sections confirm and are consistent with this construction.

Rev. Stat., sec. 2800 (2d portion), prohibits the auditor from making any deductions from the valuation of any lot unless by order of Board of Equalization or State Auditor, and sec. 2801 authorizes corrections of valuation in case of erection or destruction of structures, and then only "agreeably to the return” of the assessor under Rev. Stat. 2753 This

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