Clapp, Jayne and Francis. The opinion of the court was delivered by Clapp, S.j.a.d.
Appeal is taken by the defendants, Giovanni (sometimes referred to as John) Pirozzi, his four sons John, Jr., Victor, Frank and Joseph, and the Asbestos Transportation Co., Inc., a New Jersey corporation, from a judgment of the Superior Court, Chancery Division, relating to the ownership of 197 shares of stock in that corporation. The claimants to the stock are: on the one hand, the two plaintiffs, administratrices with the will annexed of Giuseppi Pirozzi, a brother of Giovanni, who resided in Italy from 1928 until his death in 1950 (except for some time during 1932-1934); and, on the other hand, the four sons mentioned, in whose names the stock presently stands and who base their claim on a power of attorney signed by Giuseppi in Italy in 1939.
The 197 shares were acquired by Giuseppi at the time the corporation was organized, but they were transferred out of his name, allegedly in 1941, as follows: 100 shares into the name of Giovanni as trustee for Victor, and 97 shares into the name of Giovanni as trustee for John, Jr. In 1949 Giovanni, as trustee, purported to transfer these shares into the names of his four sons individually. By reason of the
fact that he had married one of the daughters of his brother Giuseppi, his four sons are at the same time Giuseppi's grandsons and nephews. Plaintiffs claim that, notwithstanding the transfers referred to, Giuseppi owned the stock at his death, and Judge Schettino for the Chancery Division upheld their claim. The very thorough pretrial order, prepared by Judge Howard Ewart, has been of much service to the Chancery Division and to this court as well.
Passing one of the questions argued here, we shall assume (as defendants contend) that the power of attorney cannot be impeached because of any informality in its execution. That brings us to the only other question on which stress has been placed, largely a factual matter, namely, whether by this power, which appoints Giovanni as attorney in fact, Giuseppi intended to authorize the stock to be transferred to Giovanni as trustee as above stated.
A study of the power itself makes it fairly evident, we think, that it was not designed for the accomplishment of any donative purpose. Giuseppi gave his brother authority (if we may abbreviate the terms of the instrument) as follows:
"(1) To demand, sue for * * * moneys * * * and chattels * * * due * * * me * * *; (2) To sell and dispose of any shares of stock, bonds or securities that I now hold or may hereafter hold in any business corporation in the United States and to execute such transfers or assignments that may be necessary to assign my said shares of bonds (sic), stocks or securities to the purchaser thereof; (3) To * * * endorse any promissory note or other negotiable instrument payable to me * * *." (Italics added).
The tenor of the entire instrument indicates that it was a business document; moreover clause (2), the provision on which defendants rely, seems definitely to contemplate a sale, not a donation, of the stock. No power, unless it contains very clear language on the subject, should be construed as having invested the attorney with authority to appropriate to himself his principal's assets or to give them away. Von Wedel v. McGrath , 180 F.2d 716, 718 (3 Cir. 1950), opinion of Judge McLaughlin; Mechem, Outlines of Agency § 41
(1952); cf. Restatement, Agency , § 39. It should not be overlooked in connection with these and other aspects of the case, that when a person undertakes to act as an agent, he assumes the obligations of a fiduciary. Scott, Trusts (2 d ed.), § 8; Restatement, Agency , § 13.
It is rather significant that the defendants have come forward with no really satisfactory proof as to why Giuseppi was asked to sign this power which obviously had to do with some business affairs of Giuseppi (or why a like power was given by him in 1949, when the 1939 power was lost -- or why a power was given by him in 1928, which contained no express reference to stock). Would such proof have been damaging to defendants' case? On cross-examination, when Giovanni was asked why he had wanted the power, he testified shortly: "I said, Mr. Weiss [Giovanni's attorney], I want power to transfer the stock. That's all." It seems hardly credible that an attorney would draw this power with its miscellaneous objectives, solely for the purpose of authorizing Giovanni to transfer or give away the stock.
Defendants, conscious doubtless that their contentions lacked plausibility, sought at the trial to establish that Giovanni took over the stock in 1941 in settlement of moneys owed him or the Asbestos Transportation Co. Inc., amounting to $84,000 or more, as a result of shipments of merchandise to Giuseppi (or the Pirozzi Brothers) in Italy, largely between 1928 and 1931. The claim was that Giuseppi wrongfully appropriated the proceeds of these shipments to his own purposes. However Judge Schettino rejected the ...