Opinion,
Mr. Justice Green :Undoubtedly, the overshadowing, controlling question in this case is, the character of the plaintiff’s title.
Certainly the relation of pledgor and pledgee was intended *614to be created by tbe original transaction between the parties. We should have no difficulty in enforcing the pledge in this proceeding and in accordance with the decree of the court below, if the proper conditions existed with relation to the substance of the pledge. The case is quite peculiar, not to say without parallel, in its facts.
The plaintiff had possession of two papers which purported to be certificates of stock of the West Philadelphia Passenger Railway Company, one for two hundred and the other for one hundred shares. The former was issued in the name of John W. Patten & Son, and the latter in the name of Charles Lennig. These certificates the plaintiff pledged to the defendant as collateral security for the payment of three notes, made by himself, payable to his own order, each for the sum of $11,500. The actual transaction was made by one Capp, who borrowed the money from the defendant and delivered to him the notes of Elbert and the certificates. The money was borrowed and the notes and certificates delivered in 1876, and the notes were renewed from time to time. The certificates were transferred early in 1876, on the books of the company, into the name of the defendant, and continued to be held by him. In September, 1877, it was discovered that these certificates along with a large number of others, had been fraudulently issued by John S. Morton, the president of the company, and that they were altogether false and spurious. The plaintiff being utterly insolvent neither redeemed them, nor at any time offered to pay any part of the debt.
Upon proceedings instituted against the company, it was determined that as against persons who had paid for the stock, or advanced money upon the faith of it, the company was es-topped from denying its legality, and was bound to either issue genuine shares, or pay value for those which were false. The court in which those proceedings were conducted specially decreed that Josiah Kisterbock was entitled to receive certificates for 300 genuine shares of the stock, or, in case of his refusal to take shares, he could take $75 per share in money for the spurious shares held by him. He elected to take the 300 shares, and did so, and it is these shares which the plaintiff claims to have decreed to him upon payment of the debt and interest due to Kisterbock. The latter claims they are *615his absolutely without liability to account to the plaintiff for anything connected, with them.
It is entirely undisputed that the plaintiff never bought these shares, and that when they were pledged to Kisterbock he alone advanced all the money that was advanced upon them and on the faith of their genuineness.
It has not been found as a fact by the master, in the present case, that the plaintiff was ever the owner of these stocks, or that he ever paid any money for them or advanced any money on them to Morton or to any other person. The plaintiff alleged that there was a large balance of account due to him by Morton from the year 1870, and that he received these shares, or was entitled to hold them as security, for the payment of that indebtedness and of other and further indebtedness due upon an accounting. But he also alleged and testified that he borrowed money for Morton on the shares of West Philadelphia Railway stock, giving his own notes, and pledging the certificates of stock as collateral. The whole subject of these transactions, and of Elbert’s claim, both as a creditor of Morton upon an accounting, and as a lender of money to Morton upon faith of these stocks, was thoroughly and most fully considered and decided by the master in the present case, when acting as master in another case, in which Elbert claimed to recover for the value of shares of stock in the same company pledged to Isaac Jeanes & Co. The master then reported that there was no sufficient evidence before him to prove the alleged indebtedness of Morton to Elbert, and he ruled that if the false stock certificates were delivered to Elbert as security for an antecedent debt, he was not a holder of them for value. The master further held in that case that the true subject of the pledge was, not shares of stock, but a right to be indemnified for the fraudulent acts of the company’s officers, and, even conceding that the plaintiff had an interest in the stock, to that extent it passed to Jeanes & Co. when they advanced money on the faith of the stock, and that it was fully asserted and availed of by them. The master also held that the new shares issued to Jeanes & Co. were lawfully disposed of by them under powers contained in the pledge, without liability to account to Elbert, and he therefore recommended a decree dismissing the plaintiff’s bill. On exeep*616tions filed, tlie master’s report was overruled by tbe Common Pleas and the plaintiff was held to be entitled to a recovery.
While the record of that case was in that condition the present case came before the same master, and in obedience to the decree of the court in the Jeanes case he declined to sustain his own views, but reported that the plaintiff was entitled to a decree, because the Court of Common Pleas had so decided in the case of Jeanes. Since then, however, this court sustained the master’s report in that case and reversed the decree of the Common Pleas: Jeanes’s App., 116 Pa. 573. We, however, then considered but the one question of the power of the pledgees to sell the pledge and the lawfulness of its exercise. That question does not arise in this case, as the pledgee here still holds the new shares of stock issued to him in exchange for the false shares received from Elbert.
Upon a present examination of the report of the master in the Jeanes case we fully approve the views expressed by him as to the true character of the pledge. It was not a pledge of shares of stock, but simply of a right to receive indemnity for the fraudulent acts of the officers of the railway company in issuing the spurious shares. The master in thus regarding the subject simply followed the ruling of this court in the case of Mount Holly Paper Co.’s App., 99 Pa. 513, in which Shauswood, C. J., speaking of the right of the pledgees of certain other false shares of the stock of this same West Philadelphia Passenger Railway Company by the same John S. Morton and other officers of the company, said: “Their claim on the company was not, indeed, on the stock. It was a claim to be indemnified for the fraudulent acts of the officers of the company from which they allege that they have suffered damage.” In the original proceeding in the suit of Swain et al. v. The West Phila. Pass. Railway Co., the master based his report upon the proposition that, “ the liability of the railway company arises on the principle of estoppel which the necessities of trade and commerce require. Stock certificates issued by a corporation having power to issue, are a continuing affirmation of the ■ ownership of the special amount of stock by the person designated therein or his assignee, and the purchaser has a right to rely thereon and claim the benefit of an estoppel in his favor as against the corporation; ” citing Holbrook v. Zinc Co., 57 N. Y. *617616 ; Willis v. Darby Railway Co., 6 W. N. 461 ; Bahia & San Francisco Railway Co., L. R. 3 Q. B. 585 ; Bank of Kentucky v. Bank, 1 Pars. Eq. 180. Undoubtedly this is the correct principle upon which to administer relief in all such cases.
This being so, it will be seen at once that the right to relief depends upon the equity of the person claiming it. If he has expended money upon the faith of the official certificates of the officers of the company, he has a right to be indemnified, to the extent of his expenditure, against loss from false certificates, but only because of the fact of his expenditure. The false certificates are no certificates in legal contemplation, and give no rights of their own force. But the act of the officers in issuing them, having been accepted and acted upon by another, the company cannot be heard to deny the truth of the fact represented. It is simply the application of the principle well expressed in Freeman v. Cooke, 2 Exch. (Welsh., II. & G.), 654, and In re Bahia & San Francisco Railway Co., supra, that, “ If you make a representation with the intention that it shall be acted upon by another, and he does so, you are estopped from denying the truth of what you represent to bo the fact.” But if what was pledged by Elbert to Kisterbock was not shares of stock, but a right to indemnity on account of a good faith advancement of Kisterbock’s own money, made by Kisterbock himself, it is difficult to understand upon what principle the plaintiff is entitled to any recovery upon any view of the facts of this case. There is no finding on this record that Elbert ever owned or bought or paid a dollar of money for these particular shares of stock. They were not even prima facie his, as they were issued in the names of other parties and were transferred into the name of Kisterbock immediately after he received them. Elbert was himself examined and cross-examined as a witness at great length. But he gave no testimony as to his acquisition of these particular shares which were delivered to Kisterbock, nor to any of the facts of the transaction. He said he received very many shares from Morton, that those he received in 1870 were as security for the indebtedness due him by Morton, and that he also received shares upon which to borrow money for Morton. He had no written pledge of any of the shares nor could he state any oral pledge of the same. At the end of a long examination on this subject he *618was asked: “ Q. Then all the pledge that ever was made, there being no written pledge, orally, was by giving stock in the way that the stock was given ? A. Yes, sir.” In answer to another question he said, “ I held all that stock as collateral for indebtedness to me.” This was 2567 shares including the 800 of Kisterbock and all designated in a letter of January 11, 1877, from Morton to him.
There is no finding that Elbert ever advanced any money on the shares delivered to Kisterbock, either to Morton or to any one else. There is not even a finding that they were delivered to Elbert as security for an antecedent indebtedness due by Morton to him, or even that there was such indebtedness. But if there had been such a finding, or if such had been the fact, Elbert would not have been entitled to any relief on that account as against the company, because, in that event Elbert parted with nothing on the faith of the certificates, and he would fail to bring himself within the principle upon which alone indemnity could be given, or was in fact given, when the decree was made in the case of Swain et al. v. the company. Even granting that because Elbert gave his own notes for the money borrowed from Kisterbock, and therefore had an interest equal in extent to that of the latter, it was the advancement of money and not the giving of notes which conferred the right to indemnity, and all the relief that could be given, or was given for that cause, was actually and properly given to Kisterbock.
There could not be a right to indemnity to Kisterbock and a further right to indemnity to Elbert arising out of the same transaction. Most clearly Kisterbock was entitled to it, but when it was given to him equity was satisfied; the subject was exhausted. Elbert could suffer no injury on account of the notes, because Kisterbock held them, and he having accepted the new shares in full payment of the debt for which the notes were given, of course could recover nothing from Elbert. Kisterbock hud the alternative of accepting seventy-five dollars per share in money for the false shares, or instead thereof three hundred new and genuine shares. Had he accepted the money it would have been an end of the matter and the present case would never have been heard of. But he chose to accept shares instead of money. Why should there be any difference *619to him in the result of his accepting one or the other of the alternatives ? What he took, and what he had a right to take, was indemnity, such indemnity as the law could give him. But it was his, not Elbert’s; his absolutely, not conditionally. It was personal to himself, not because of the certificates which he received from Elbert, but because he, as an individual, had parted with his own money upon the faith of certifications made by the officers of the company, the truth of which certifications the company could not be permitted to deny as against Kisterbock. This was something which never belonged to Elbert and which he never passed to Kisterbock. If Kisterbock had never advanced the money, he would never have held this right to indemnity, even though he might have held the false certificates.
It follows that the trust which is a quality of pledge, and goes with it ordinarily, did not go with, and never attached to, this right to indemnity. It was a right which only came into existence in favor of Kisterbock, not by force of the pledge, but by force of his good-faith advancement of his own money. It was never clogged with any trust in favor of Elbert, because the fact upon which alone it was founded had no existence with Elbert, or in his favor, or in consequence of any money or property parted with by him. It was the money which Kisterbock parted with, which created the right to indemnity, and that money was his alone, and its advancement was the sole basis upon which the decree was made in the original case. These views are radical and reach to the very foundations of the plaintiff’s claim of title to equitable relief. They are in hostility with such claim and require a reversal of the case upon its ultimate merits.
The decree of the court below is reversed at the cost of the appellee, and the bill is dismissed with direction that all the costs of the case be paid by the plaintiff.
On November 4, 1889, a motion for a re-argument was refused.