116 Va. 319 | Va. | 1914
delivered the opinion of the court.
This suit was brought in the Chancery Court of the city of Richmond to settle up the estate, real and personal, of Otway S. Allen, deceased. All proper parties being made, such proceedings were had that the estate was distributed to the satisfaction of the devisees and legatees under his will, with the exception of his executrix, who complains that the decree denied to her certain commissions to which she claikns she wias entitled.
The cause was referred to a commissioner to settle the accounts of the executrix, and he returned a report from which it appears that the gross value of the personal estate is $105,730, consisting of stocks and bonds. To this report the parties in interest adverse to the executrix excepted, because a commission of five per' cent, or any commission, was allowed on stocks and bonds- to the amount of $57,102 which were distributed in kind among the parties entitled thereto, and to so much of the report as allows a commission of five per cent, on the sum of $35,701.11, being the amount of money paid to Branch, Cabell & Co. by the executrix in full satisfaction of the amount due on five hundred shares of stock of the Pennsylvania Railroad Company and one hundred shares of stock of the Chesapeake and Ohio Railway Company, which had been purchased by Otway S. Allen, deceased, during -his lifetime, and on which a balance was due at the time of his death.
The court very properly overruled the first exception, but sustained the second; and thereupon an appeal was allowed the executrix.
At the time of the testator’s death there were in the hands of Branch, Cabell & Co., brokers, five hundred shares of Pennsylvania Railroad Company stock of the par value of $50, one hundred shares of the stock of the Chesapeake and Ohio Railway Company of the par value of $100 each, and one hundred and twenty-eight shares of the stock of'the Clifton Forge Light and Water Company of the par value of $25. There was due upon this stock to Branch, Cabell & Co. the sum of $35,300.08. The report of the commissioner allows five per cent, to the executrix upon the value of the stock, while the contention of appellees is that from the value of the stock $35,300.08 should have been deducted and a commission allowed upon the residue.
The chancery court was of opinion that this transaction grew out of the purchase of the stocks upon a margin, and seems in some measure to rest its conclusion denying the commission upon that fact. All that appears from the record is that the stocks were in the hands of Branch, Cabell & Co., and that there was due upon them the sum above named of thirty-five thousand dollars.
We do not deem it material to conjecture as to the cir
In Elliott on Contracts, section 1002, it is said: “The word 'margin’ signifies money or other property deposited with a broker by his customer to secure the broker against loss, by reason of fluctuations in the market price of the commodity purchased or sold. It is held, with few exceptions, that a speculative transaction for the purchase and sale of stock or other commodity on margins does not constitute gambling.”
And in section 1003 the same author says: “The same test is applied here as in other transactions in futures. If the parties mutually understood and intended that the purchaser should pay for and the seller should deliver the commodity at the maturity of the contract, it is a legal and valid transaction; and the fact that the purchaser is required to deposit a margin and increase the same at any time the market requires it in order to insure payment of the market price at the maturity of the contract, and thus insure the broker against loss, or that the seller shall deposit a margin and increase the same as the market shall require in order to make sure delivery at maturity of the commodity sold, does not vitiate the contract.”
There is nothing before us but the bare fact, as we have stated, and if a presumption is to be indulged that presumption will be in favor of the validity find legality of the contract. Whether the decedent was the complete owner of the stocks in question, and deposited the same as securitv for a loan, or whether the transaction was one in which the broker had bought these stocks upon a marvin, and the stocks themselves were held as security for the ultimate payment of the purchase price, is we think immaterial to the question at issue. It is some
In re Bolles, 124 N. Y. Supp. 620, it appears that “the accounting executors found upon taking office that their testator had pledged certain securities, in one case to a bank to secure a loan made to him by the bank, and in another to a firm of stockbrokers to secure to them the repayment of sums advanced by them in the purchase of securities on margin for his account. The executors directed the bank, as well as the brokers, to sell the securities thus held by them, respectively; and upon the sale so directed there was paid to the executors by the pledgees the difference between the proceeds of sale and the sums which the decedent’s estate owed to the pledgees. The sum realized from the sales was $117,345, the amount of the indebtedness of the estate was $97,446.07, and the balance paid to the executors was $19,898.93. Are the executors ’ commissions to be calculated upon the proceeds of sale, or upon the sum received by them in settlement with the pledgees? The transactions of the decedent have been ‘pledges,’ for they could have no other
In Content v. Banner, 184 N. Y. 121, 76 N. E. 913, 6 Am. Cas. 106, it is said, that “Where a stockbroker buys securities for a customer, although he advances the whole amount necessary for the purchase, instead of requiring a margin, the relation of pledgee and pledgor exists between the parties; and a sale of the securities by the broker without notice of the time and place of sale, constitutes a conversion, in the absence of an agreement dispensing with such notice or providing for otherwise disposing. of them.” Se also Miller & Co. v. Lyons, 113 Va. 275, 74 S. E. 194; Estate of Pease, 149 Cal. 167, 85 Pac. 149; Elder v. Whittemore, 51 Ill. App. 662; Huddleston v. Kempner, 87 Tex. 372, 28 S. W. 936.
It cannot be doubted that the estate of the decedent was indebted to the firm of Branch, Cabell & Co.; that these stocks were held by the brokers as pledges to secure the payment of that debt; and we think it clear that the
For these reasons we are of opinion that the decree complained of is erroneous and should be reversed, and the cause remanded to the chancery court for further proceedings.not in conflict with the views expressed in this opinion.
Reversed.