Dissenting Opinion.
Bermudez, C. J.The dual question presented in this case is simply:
Whether the agent of a married woman can concoct with her husband, who, with him, forms a commercial partnership, so as, without her knowledge or consent, under a power to sell, pledge stock belonging to her, in favor of a creditor of theirs, as security of their indebtedness to him; and, whether such creditor is or not bound, before accepting the pledge, to inquire into the right of the pledgeor, or transferror, to dispose of it as a pledge under the guise of a transfer.
The evidence leaves no doubt that the certificate of stock in the name of defendant was not designed to vest a title of ownership, but merely to stand as a pledge. It also shows that the agent of the plaintiff had no power to pledge the stock, although he had that of selling it.
It is impossible not to answer the first inquiry in the negative, and the •second in .the affirmative.
It is elementary that an agent has no right to give the property of his principal in payment of his individual indebtedness. It is likewise *591rudimentary that a husband cannot take the property of his wife and use it in extinction of his debts.
It is likewise undeniable that an agent vested with the power to sell, has no authority to pledge or mortgage. Our law requires two distinct powers to be sj>eeially conferred. The power to sell does not imply that to encwnher.
Those propositions do not seem to be denied or even questioned; but it is contended that a third innocent party is not to be made the victim of a faithless agent and of a dishonest husband, under such circumstances, unless knowledge be chargedj.gainst aud proved upon him.
Knowledge is actual or constructive. In instances like the present one, actual knowledge, as a rule, cannot be proved. It suffices if constructive knowledge, is shown; that is, knowledge which should and could, and has not been, procured.
It may be that, as regards movables, pirrchasers as a rule, are not bound to inquire into the title of the vendors, although the law has provided that the true owners may in some specified cases, recover them even from tvu innocent purchaser. If such be the law, it is only such in cases in which the particular effect is one which can be owned without a written title. It surely is not the law, where the effect is one which cannot be owned without such title.
Of that class are shares or stock of a corporation. No one can be a shareholder, or stock owner, of a corporation like that mentioned in this controversy, unless his title to the shares or stock be evidenced l)oth by the books of the corporation and by the certificate which issues to him, in writing.
No one is relieved from the obligation of knowing who is vendor, who his transferror is, and what the title is to the thing sold or transferred, unless at his risk and peril. The regularity of the transfer on the books of the corporation and the exoneration of the company from all responsibility, do not dispense him from the duty of instituting the inquiry.
Companies may be liable for issuing certificates to innocent parties, where the transfer is made by one having no authority to effect it. Such innocent parties may be satisfied with the validity of the transfer because of the warranty of the company; but it by no mean's follows that, whore the corporation' is in n'o 'way in fault; such parties should not have ascertained who their vendor or transferror was.
When.the certificate of stock in question was handed by one of the firm, or by both members of the firm, to the defendants, nó considera-*592t-ion actually passed for it. It was a simulated transfer, designed solely to secure a pre-existing indebtedness of the firm to the defendants; and the latter necessarily, unquestionably knew it, for they subsequently sold the stock by direction of the firm debtor, applying the proceeds to the extinction of the debt and passing same to the credit of their debtor. They had no reason to suppose that the firm owned the stock. They should have inquired; and had they done so, they would have ascertained, by a simple inspection of the transfer, that it had been made by an agent of the property of his principal to secure an individual creditor of himself and firm.
Suppose, for a moment, that if the property transferred, instead of being, as it was, stock, had been real estate; that plaintiff’s agent had handed to defendants an authentic certificate from a notary or the conveyance officer, showing the sames to be in their name; and suppose the plaintiff had subsequently revendicatcd the land, could she have been defeated on the ground that the defendants were in good faith and not bound to examine or inquire into the title? Surely not. No difference between the two cases is discernible, as in both the title must be evidenced m writing, and the right to transfer, in like form.
Conceding that both the plaintiff and the defendants are innocent, it is evident that either the former or the latter is to bear the loss.. Which of them should sustain it?
The rule of law is, that whenever one of two innocent persons is to support a loss, that one should incur it who could more easily have avoided it and who did not do so.
What is it that the plaintiff could have done and has not done? What is it that the defendants could have done and have not done?
The plaintiff could do no more than she has. The defendants could with perfect ease have inquired, as they should have done, into the title of their transferror. Had they done so, they never would have accepted the transfer to them of plaintiff’s stock; but it must be acknowledged that they had nothing to make by the inquiry, that they had everything to gain by omitting it, for they had the company as a war-rantor, and therefore it is that they rested in perfect tranquillity and security.
It is clear to my mind that in law and equity the plaintiff should recover.
I, therefore, think that the judgment should be reversed.