The argument on the part of the defendants was predicated, to a great extent, upon the theory that the money furnished by the plaintiff was simply a loan to the defendants Hawks and Wingate, and it was insisted that, as they were impliedly authorized to purchase the stock in their own names, they acquired an unqualified property therein, and that the agreement to assign to the plaintiff was therefore nothing more than an executory contract for the sale of personal property, which, as a general rule, will not be specifically enforced in equity.
Under the view we have taken of the transaction, as evidenced by the written agreement (his Honor having very properly excluded the oral testimony tending to contradict or vary its terms), we deem it unnecessary to pass upon the points so ably discussed by the respective counsel, whether stock of this particular character is the subject of specific performance, and if so, whether it must be owned by a party at the time of his contract to sell and assign the same.
Our interpretation of the contract is that the stock of the electric company was to be purchased by the defendants Hawks and Wingate with a view of securing its plant, &c., to be used by a new company, which was to extend the business so as to operate an electric street railway in the towns of Winston and Salem. This new company, so far as it appears from the record, was to be composed not of these two defendants alone, but also of S. J. Sprague, Edward H. Johnson and J. H. Clement, and it was only for the purpose of facilitating the formation of such company that the plaintiff furnished one-half of the amount necessary for the purchase of the said stock. It was agreed that, upon the purchase of the stock by the said defendants, they were to assign one-half of it to the plaintiff, who was to hold the same and *337receive its net earnings until the particular company above mentioned should demand its surrender upon tendering a sum equal to the amount advanced. It is very evident that, had these defendants performed their agreement and assigned the stock to the plaintiff, they could not, as individuals, have compelled him, upon tender of said amount, to surrender or transfer it to them. The contract is plain upon this point, and provides, in substance, that the plaintiff is to remain the owner until the formation of the new company, under an agreement between certain parties named therein, and, as it does not appear that such new company was ever constituted, we are unable to see how these two defendants, or, indeed, anyone else, could have compelled the plaintiff to transfer the said stock.
Such being the rights of the plaintiff had the said defendants performed their agreement, it remains to be determined whether there is any principle of law or eqxrity which will-enable them to profit by its violation.
If the money had simply been loaned to these defendants, and they had been authorized to purchase for themselves alone, it would be a question, not altogether free from difficulty, whether a mere contract to sell the stock could be specifically enforced. Such, however, is not the case presented in the record. The defendants, as we have said, took the money of the plaintiff under an express agreement to purchase the stock and transfer it to him, and there is absolutely nothing to warrant the inference that the defendants were to become its beneficial owners, or that either party had the slightest conception that, in providing for its transfer to the plaintiff, the latter was purchasing from the defendants. It was the plaintiff’s money that paid for it, and, in the absence of any agreement, there would have been a resulting trust in his favor. Hargrave v. King, 5 Ired. Eq., 430; Adams’ Eq., 33; Malone R. P., 489.
*338We are unable to see how the express agreement of the defendants to do that which, under the same circumstances, a court of equity would have compelled them to do, can, in the least, affect the plaintiff’s rights in the premises. Much importance is placed upon the fact that the defendants were authorized to take the stock in their own names, but, as we have seen that they were purchasing the same with the plaintiff’s money under an agreement to immediately assign it to him, we are of the opinion that this circumstance did not prevent them from becoming trustees in the transaction. Even had this been land, and the defendants had paid the purchase-money, and taken the title under a parol agreement to hold it for the plaintiff, subject to his right to repay the purchase-money, the Court, upon sufficient testimony, would have declared them trustees. This was substantially decided in Cohn v. Chapman, Phil. Eq., 92, in which it was held, upon the principle of trust, that such an agreement was not within the statute of frauds. A case very similar to the one now before us is to be found in Stevens v. Wilson, 18 N. J. Eq., 447. The plaintiff filed a bill to compel a transfer of two hundred shares of stock, purchased by the defendant with money advanced upon the following order to one Shippen: “Please pay to order of I). M. Wilson $5,000, for which he will give, you a receipt to be paid in stock of the Newark Plank Road Company, say two hundred shares, or money return in same proportion at that rate, $25 per share.” The defendant executed the following receipt: “Received, Hoboken, April 20, 1860, $5,000 as per stipulation within, to be transferred to order or request of Mr. Stevens, when he shall desire.” The relief prayed for was granted, upon the principle that the defendant held the stock in trust. The Court said that when the defendant “purchased the stock with Stevens’s money, according to the rule of equity he held that stock as trustee for Stevens, and nothing but a clear, positive agreement bj7 Slevens will enable *339him to speculate on the trust property for his own benefit.” In speaking of this decision in Cutting v. Dana,, 25 N. J. Eq., 265, the Court stated that it “was a suit in which the complainant filed a bill to compel the defendant to deliver to him certain shares of stock purchased by the defendant with money furnished by the complainant, on an agreement that the defendant would transfer the same to the complainant on request. There zúas a trust, however, in that case.”
The present transaction, as we have seen, was not a mere loan of money to the defendants to use as they pleased, but it was for the special purpose of purchasing the stock for the plaintiff and an immediate transfer to him. But for this stipulation, it is fair to assume that the money would not have been furnished, and we are decidedly of the opinion that the defendants held the stock in trust for the plaintiff.
Instead of performing the trust by an assignment to the plaintiff, they exchanged it for stock of equal amount in the Twin City Construction Company. This stock was deposited with the defendant Bates as security for a loan of money to the defendants, which debt has been paid, and the stock is still in the hands of said Bates. The substituted stock, being thus traced and identified, may be followed in equity and impressed with the original trust. “ A principal, in all cases, where he can trace his property, whether in the hands of the agent or of his representatives or assignees, is entitled to reclaim it, unless it has been transferred bona fide to a purchaser of it, or his assignee, for value without notice. In such cases it is wholly immaterial whether the property be in its original state, or has been converted into money, securities, negotiable instruments or other property, if it be distinguishable and separable from other property or assets, and has an earmark or other appropriate identity.” Whitley v. Foy, 6 Jones Eq., 34, and the cases there cited. See, also, Edwards v. Culberson, post, 342, where the authorities upon this subject are fully set forth.
*340We think that the plaintiff has made out a prima facie case, and that his Honor committed no error in continuing the injunction to the hearing.
Affirmed.