If this case is to be decided upon the same principle of law as if it was depending between the plaintiff and the firm of Goodyear Brothers & Durand, its determination is simple and easy. Between those parties, the stock in question was given by the former and held by the latter as a pledge, for a contingent liability as to amount, and a pledge, in its nature, to whatever might be the amount of liability,» differing in *64no respect, as to the effect of the contract, from a pledge for a sum certain.
Goodyear & Co. had no authority, in fact or in law, to sell the stock until they had first demanded payment of the plaintiff of the sum due on account of the liability from him to them. (Wilson v. Little, 2 N. Y. Rep. 443.) As I understand the contract between the plaintiff and Goodyear & Co., and as it appears from the evidence and the report of the referee, it is obvious that no absolute sale of the bank stock was ever intended between them. . Goodyear & Oo., as brokers, were carrying for the plaintiff 200 shares of Worth Western railroad stock upon a declining market. This railroad stock, itself, .failed to be sufficient security to his brokers, and the plaintiff was called upon by them for more margin. This, we understand, means, in the broker’s lexicon, additional collateral security against loss to.the broker, while he is so. carrying stock for his employer. The bank stock in question was furnished as such margin.- What then were the legal relations between the plaintiff and his brokers in relation to this bank stock ? There was no sale of it to the brokers. That is not so cl aim eel. It is only claimed that there was a power of sale. This was necessary in order to make this margin of any security. It. is not even argued that, as between those parties, this power of sale was intended to be abso-' lute, and without the usual rights and incidents belonging to a pledge—that of notice to the plaintiff, and his right of redemption. If it was a pledge, there was at law this right of redemption, and before a sale could be made by the pledgee, the pledgor was entitled to reasonable notice, and demand of payment of his liability, and default of such payment on his part. While the pledge remained as such, unaffected by any demand, notice and default, the legal title of the stock (as a general rule) remained in the pledgor; but when the certificate of legal title to the stock is actuallv intended to be transferred, and the transaction *65not intended to be an absolute sale, then, generally, the courts hold it to be a mortgage. In the ease before us, there is no express or other agreement shown that would constitute this transaction a mortgage, nor, in fact, any other agreement than such as the law implies, from its being left as margin, that is, that the certificate of bank stock was left as collateral security to the brokers Goodyear & Co., in the character of margin, for carrying the 200 shares of north Western railroad stock. Such a transaction, in law, is clearly a pledge. And if a pledge, then the giving of the plaintiff’s name to the power of attorney, did not change the pledge, but was a necessary act to put the pledge in a condition to be available, as such, in case of the default of the pledgor. This power of attorney, it is clear, was not in itself the agreement between the parties to it, as to the holding of the stock. That agreement had been made before; but this certificate was the security for the performance of such former agreement on the part of the plaintiff and this constitutes the bank stock a pledge. (Dykers v. Van Allen, 7 Hill, 497.)
As between the plaintiff and Goodyear & Co., it is clear, then, that the latter had no legal right secretly, or without the knowledge of, or notice to, the plaintiffj to sell his stock to Butterfield & Co., or to the defendants, the Tenth national Bank of Hew York, because it was a pledge. (Dykers v. Van Allen, supra, 501.) It must be remembered that it was not the stock itself, but the evidence of title to the stock. It was the pledge of a chose in action. This presents the plaintiff’s point.
But the defendants, the Tenth national Bank of the city of Yew York, claim that the transaction in question between the plaintiff and Goodyear & Co., was a case of agency of the latter for the former; that the plaintiff having voluntarily parted with the evidence of title to, or external indicia of ownership of, the shares of stock in question, ought not to be allowed to turn over to an inno*66cent party the loss resulting from the misconduct of his broker; that those who have acted in good faith, and have been misled by the instrumentalities and agencies which the plaintiff has himself put in motion, should not now bear the loss, because the plaintiff’s agents have deviated from their secret instructions. There is abundant authority to sustain these propositions, in cases of agency. If the defendants have made this rule as to agencies applicable to the case before us, the judgment should be reversed, or modified. The power to transfer the stock in question, upon its face, was expressed to be for value received, the power was declared irrevocable, and the referee found as a fact that the said Tenth ¡National Bank, at the time they received the said stock-scrip, had no knowledge of the transaction between the plaintiff and the said Goodyear Brothers & Durand, or of the plaintiff’s interest therein. The case of Crocker v. Crocker (31 N. Y. Rep. 507) is the latest authority cited by the defendants to sustain them in their theory of the case, and that ease is also cited by the plaintiff as authority, and claiming a distinction between it and the present, and insisting that such distinction was controlling in their favor. The case of Crocker v. Crocker is unskillfully reported, and is well calculated to mislead the profession. The statement of the case, and the leading opinion that was adopted by the whole court, is omitted in the report, and an opinion coming to the same conclusion, but which was not read on the consultation, is reported. Though there is nothing in the reported opinion that is in conflict with what was decided, the report entirely fails to present the whole view, and real point of any value in the case; and hence the confusion. The action was brought by ¡R. ¡F. Crocker, the former owner of the stock in question, against S. Crocker, in whose name the stock was held, and others to whom it had been pledged by S. Crocker, the plaintiff alleging that the stock was held by S. Orocker in secret trust for the plaintiff; S. Crocker had *67been permitted by the plaintiff, for years, to hold the stock as his own, and in his own name, and from time to time to pledge and hypothecate the stock as security for loans, with the knowledge and consent of the said S. F. Crocker, the plaintiff. But the secret trust between the Crockers was established. The point decided was, that S. Crocker was made to account for this secret trust to the plaintiff— and all the pledgees and mortgagees who took such stock as security, with knowledge of the secret trust, were held not to be bona fide holders thereof, and were also held to account to the plaintiff; but all such pledgees and mortgagees as held without notice of the secret trust were protected, for the reason that the plaintiff, by implication of law, having authorized the transfer, repeated use and pledging of the stock to raise money by S. Crocker, with apparent ownership upon the books in his name, could not, as against such bona fide holders, hold them liable to account. Such a case was clearly brought within the rule of agency. The agent was clothed with apparent ownership, and with all the indicia of ownership, and with actual transfer, with authority to transfer, and a ratification of his transfer. As to third persons, in law, such apparent authority was equivalent to real authority. This is settled law as to agencies.
It is not difficult to distinguish that case from the present. Here there was never any title in the brokers; here no agency to make absolute sale, without first giving notice and making demand, was ever created; no consent to its use to borrow money upon was ever given. The use of the certificate of stock in this case by Goodyear & Co. beyond the mere purpose of pledge, or margin, was tortious, if not felonious. In Crocker v. Crocker its use was known and authorized; in this case it was unknown and unauthorized by the plaintiff, and we think the transfer conferred no title to a third person as purchaser, though he paid a valuable consideration therefor, and though the scrip had a blank power of attorney attached, and even *68though the defendant as purchaser believed he was dealing with persons who had authority to sell. This was so held in Anderson v. Nicholas, (5 Bosw. 121.) We think this is the rule in regard to every character of personal property except commercial paper. (Id.)
This kind of chose in action, though greatly used by way of security, and exceedingly convenient for such use in commercial transactions, have not yet been recognized by the courts as another exception to the rule, and as holding equal rank in this regard with bills of exchange and promissory notes. In the case of Bush v. Lathrop, (reported in 22 N. Y. Rep. 535,) is found a most thorough, critical and able review of the conflicts in the cases reported, and of the final settlement of a rule in this respect, to the effect that we have stated. In that case Judge Denio gave the history and progress of the conflicts in the opinions of distinguished jurists, and the adjudications in regard to this question in the courts of England, and in our own country, with that depth of research, learning and fidelity which ever distinguishes the opinions of that able judge; and although three other learned and able members of that court dissented from his conclusions, they were adopted by the court as the law of this State. It would not be becoming in us here to criticise that review of the case, and as little becoming to question, or refuse to follow that authority. It settles the law in that regard. We have only then to see if this case is brought within it.
I have been furnished also with a manuscript opinion in another case recently decided in the Court of Appeals, Ballard v. Burgett, in which the general rule is repeated, “ that a purchaser of personal property, other than commercial paper, acquires no better title than that of his vendor.” In that case is a review of a large number of cases cited, which had been supposed to be exceptions, and apparently holding to a different rule, and among them the case of Wait v. Green, (36 N. Y. Rep. 556;) but *69the opinion says that the point here in question was not involved in Wait v. Green. Taking this view of the question, and the opinion of the Court of Appeals in a review of that case, we must adopt their understanding of its doctrine; it would otherwise be in conflict with Bush v. Lathrop. The court say, that in no one of the cases cited in Wait v. Green has it been held, “ that one to whom property has been delivered without any intention to transfer the title, can confer a good title to a purchaser from himand to this proposition they cite Herring v. Hoppock, (15 N. Y. Rep. 409,) which fully sustains the proposition. Having thus the opinion of the Court of Appeals as to what effect is to be given to Wait v. Green, and a full indorsement of Herring v. Hoppock, we must conform our views to them.
[Saratoga General Term, November 1, 1869.If we are right in the view we have taken of the law upon the points we have discussed, we need not examine the points raised, that the subscription of the witness to the power of attorney was a forgery, or, that the revenue stamp was added without authority. The finding of the referee that the Tenth National Bank, at the time they received the said stock-scrip, had no knowledge of the transaction between Goodyear Brothers & Durand, or of the plaintiff’s interest in the said scrip, is not, in the view we have taken of the law, controlling in favor of said defendants. They might be bona fide purchasers of a chose in action, and yet their vendor, having no title in himself, could convey none to them.
The result of these views is, that the judgment must be affirmed.
Rosekraans, Potter and Bockes, Justices.]