Carpenter v. American Building & Loan Ass'n, 54 Minn. 403

54 Minn. 403 | Minn. | 1893

Collins, J.

In substance, the complaint herein is identical with that involved in Allen v. American B. & L. Ass’n, 49 Minn. 544, (52 N. W. Rep. 144.) The conspicuous difference in the answers in the two actions is that in the case just mentioned the defendant association justified the transactions of which the plaintiff complained, affirmed the regularity and validity of the alleged sales, and relied upon them as a perfect defense to the cause- of action, while here the answer disaffirmed and repudiated the sales, expressly averred their invalidity, and alleged that in the month of May, 1892, the various stockholders had been notified by mail that such pretended sales were null, and had no effect upon their rights, and that they were entitled to reinstatement, upon payment of actual dues and fines; and the stockholders were further notified that, unless their stock was reinstated upon the terms proposed, a sale of the same would be made on June 23, 1892, pursuant to the by-laws of the association. The court below found that nearly all of the pretended sales had been made in the years 1889 and 1890. It further found that the notice just referred to was issued in tbe month of May, 1892; by means of a circular letter, in which it was stated that said sales had been declared void by the courts of the state. It is a fair inference that until this circular was promulgated the defendant had persisted in its assertion that the sales were regular and valid; and as the opinion in the Allen Case was filed on May 16, 1892, it may also be inferred that the circular was prepared after that date, and was induced by the result of that action. The trial court also found that the present case was commenced June 22d, and that the assignments under.which the plaintiffs claim were executed and delivered prior thereto. It was found that on June 23d the stock shares had been sold to defendant, in pursuance of the circular notice, and that, in form, the sale was regular.

We regard this cause as wholly controlled by that of Allen v. American B. & L. Association, supra. It was said in the opinion therein—and our views remain the same—that the right of action there recognized and upheld was founded upon the fact that there had been a distinct act of dominion wrongfully exercised over the shareholders’ property, inconsistent with their rights, and in denial of them. The defendant corporation, by assuming to sell, and wrongfully selling, the shares, deprived the owners of their stock, and. the advantages accruing from it, as much when bidding it in for itself as when it accepted the bid of a stranger, and then transferred the title on its books. This, it was said, was an act of interference, subversive of the rights of the stockholders to enjoy and control the stock, and may be treated by them as a conversion of their property. That any distinct act of dominion wrongfully exerted over one’s property, in denial of his right, or inconsistent with it, amounts to, and may be treated as, a conversion, was recognized long ago in this court, in Hossfeldt v. Dill, 28 Minn. 469, (10 N. W. Rep. 781.) The right, then, of the original shareholders, or of these plaintiffs, as their assignees, to maintain this action, was perfect from the day it accrued up to the time that defendant association abandoned its former line of defense, and offered to reinstate,—a period of from two to three years. This was settled in the Allen Case; so that the present inquiry is solely as to the effect of the offer to reinstate upon an existing and perfect right of action then held by the shareholders or by the plaintiffs, and the offer was nothing more than an offer to return to the rightful owner property already converted to the defendant’s use. It was an attempt on the part of the association, after it had actually converted the stock shares to its own use, and had dor the term of from one to three years denied that the former owners had any interest in the same, to compel them to receive back the converted property, against their will. The palpable purpose of the offer to reinstate was to deprive the shareholders of a clear right possessed by each to elect as between- remedies, — to determine whether their actions should be brought to recover the stock shares in specie, or to recover for the value of the same. If the offer could be given the full effect desired, the defendant would be allowed to perpetrate a wrong; to persist that it had authority so to do; and finally, when defeated in the courts, to take away from the injured party his right to pursue his choice of concurrent remedies. It is safe to say that the option as to remedy is not with the party who has inflicted the injury, for if it were he would be permitted to take advantage of his own wrong.

It is well settled, as a general proposition, that when an actual conversion of chattels has taken place the owner is under no obligation to receive them back, when tendered by the wrongdoer. 6 Bac. Abr. 677; 9 Bac. Abr. 559; 4 Amer. & Eng. Enc. Law, 125, and eases cited. The right of action is complete and perfect when the conversion takes place, and the object of the action is to recover damages, not to regain possession of the thing itself. Even if the goods be returned by the wrongdoer, and are accepted by the owner, after the action is brought, damages, nominal or actual, may be recovered. There is a class of cases when, in trespass or trover, the defendant may mitigate the damages by a timely and proper return of the property. The rules which govern in such cases seem to be that where the wrong lacks the element of willfulness—has been committed in good faith—the court, in its discretion, •may order a return, upon timely application by the defendant, accompanied by an offer to pay all costs, and a showing that no real injury will have been suffered by the plaintiff when possession is restored. The right of action is not defeated by the order of the court, but damages are mitigated. The subject and the authorities -are fully reviewed in Hart v. Skinner, 16 Vt. 138. See, also, Reynolds v. Shuler, 5 Cow. 323, and Churchill v. Welsh, 47 Wis. 39, (1 N. W. Rep. 398.) We have no such case now before us.

(Opinion published 56 N. W. Rep. 95.)

The point is made upon this appeal that it was incumbent upon the plaintiffs to produce and surrender up the stock or share certificates before they could recover; Joslyn v. St. Paul Distilling Co,, 44 Minn. 183, (46 N. W. Rep. 337,) being the principal authority relied on. But plaintiffs are not asking, as was demanded there, for the cancellation of stock certificates, the transfer of such stock upon the books of the association, and the issuance of new certificates. Nor were the conclusions reached in the Joslyn Case adopted on any view of the negotiability of stock certificates, but on general principles appertaining to the doctrine of estoppel. The transfer or assignment of the certificates here involved could give the purchaser no greater rights, as against the association, than the assignors had. Hammond v. Hastings, 134 U. S. 401, (10 Sup. Ct. Rep. 727.)

The remaining points made by counsel for appellant need not be specifically referred to.

Judgment affirmed.

Petition for reargument denied October 20, 1893.