Page:Federal Reporter, 1st Series, Volume 10.djvu/826

 814 fEDEBAIi BSPOItTEB. �who has bought the shares in good faith, or even one who has paid one call or assessment to a third person on the strength of the cer- tificate, that it was issued improvidently. In re Bahia, etc., Co. L. R. 3 Q. B. 584; Hart v. Frontino, etc., Co. L. E. 5 Exch. 111. �Where the president, who was alao transfer agent of a railroad Com- pany, issued an immense amount of false and fraudaient certificates of shares, beyond the whole capital, the Company, af ter " a decade of litigation," was held bound to indemnify the honest purchasers. New York e New Haven R. Co. v. Schuyler, 34 N. Y. 30. In the present case, the certificate, though false in fact, was genuine ; that is, it was given by the recording ofScer who had the custody of the records, and had a right to give it, and Kimball was justified in acting unon it. The case may likewise rest upon the otherfamiliar principle, thai, of two innocent persons, he must suffer who has mialed the other. That the recording officer was the same person as the treasurer whose pow- ers he was oertifying, was the act of the corporation itself, and can- not affect the operation of the certificate. �The savings bank is not a party to this action, and does not appear to have been ealled on to defend it; and therefore my decision will not prevent that corporation from taking such measures as it may be advised to take, by bill or otherwise, to establish whatever rights it may have in the premiseg. If the tenant does not choose to pay the money at once, there may be a considerable time in which such rights ean be tested with effect within this jurisdiction. The question for me is whether the demandant has a sufficient legal title to recover possession from the mortgagor himself. �The defence has ealled attention to the receipt given by Kimball, in which he agrees to reconvey the securities assigned to him upon repayment of the purchase money within six months ; and it is con- tended that Pratt had not even apparent authority to make a pledge, or mortgage, or conditional assignment, and therefore no title what- ever passed to Kimball. The case finda that Kimball paid the full face value of the mortgage, — that is, its utmost possible value, — and I do not understand the reasons which induced him to sign this receipt. They are not explained in the statement of facts. It may be that he thought the national bank for which he was acting had no lawf ul power to buy a mortgage, or it may be that Pratt wished to retain power to repurchase in order to conceal his fraud if his speculations should tum out well. If the latter, there might be some question of honafides; but it is found as a fact that Kimball acted in good faith and without knowledge of fraud. tiaving in fact bought these mori- ��� �