223 F. 979 | 4th Cir. | 1915
The defendant in error (plaintiff below) sued the City Bank of Wheeling for the conversion of 138 shares of La Belle Iron Works stock. His contention in brief was that on or about the 17th of October, 1908, he bought outright from the defendant bank 126 shares of this stock, which the bank then had in its possession and claimed to own, for the sum of $14,668.42; that this sum was paid with his note at four months, secured by the 126 shares purchased and 12 additional shares, which he delivered a few days later; and that the bank failed and refused to surrender the note and return to him the stock pledged for its payment when he demanded the same and tendered the amount due on the 6th of June, 1911.
The bank set up in defense, among other things, that the 126 shares in question were hypothecated with it by one A. L. White, of the brokerage firm of White & White, to secure the payment of his note
It will thus be seen that the question of fact submitted to the jury was whether the bank actually sold to Rhodehamel in October, 1908, the 126 shares of stock which were then in its possession, or whether it merely agreed at his request, and in consideration of the security of his note and 12 additional shares, to hold the stock until the chancery suit was decided. On this issue the jury found for Rhodehamel, and the case comes here on assignments of error which will be briefly considered. The bank insists that Rhodehamel cannot maintain his action: (1) Because he waived his right to demand the stock; (2) because he had no title to the stock when the suit was brought; and (3) because the record in the chancery cause is res ad judicata in this action, and therefore the trial court should have directed a verdict in favor of the defendant.
“Your letter of the 7th at hand and contents noted. My understanding was that I had bought the 126 shares from you and that it was a closed incident. I presume, however, that it will not do any damage to be held as you say until after the court passes on the White matter.”
“Where a person has, with knowledge of the facts, acted or conducted kiun self in a particular manner, or asserted a particular claim, title, or right, he cannot afterwards assume a position inconsistent with such act, claim, or conduct to the prejudice of another.”
In considering the third objection, some further facts in regard to the chancery suit may properly be stated. The assignment of the Whites" was on the 7th of October, 1908. The bill filed by the assignee on the 15th of that month alleged that White & White, with the consent of the respective owners, had pledged as collateral for moneys borrowed by them various securities, including a large amount of La Belle Iron Works stock; that there were conflicting claims to these securities, which the assignee was unable to determine; that Rhodehamel claimed to own all the La Belle stock held by the several banks which were made defendants, and demanded that the assignee surrender to him any claim to the same. The purpose of the suit was to have these adverse claims and the interest which passed to the assignee adjudicated. Both Rhodehamel and the City Bank were among the defendants named in that suit. The bank answered on the 17th of October, setting up the loan to White on the security of the 126 shares, and other facts substantially as above summarized. Although the note given by Rhodehamel bears the same date, the 17th of October, the transaction, which he alleges and the jury found was a purchase of this stock, actually occurred oh the 19th of Octo
Rut that suit raised no issue of title as between Rhodehamel and the hank, nor did it give Rhodehamel any standing to litigate the issue of title as between White’s assignee and the bank. Parties to an action are not bound by the judgment, in a subsequent controversy with each other, unless they were adversary parties in the original suit. As between Rhodehamel and the assignee it may be assumed that the decree was conclusive, hut it did not have the effect of settling any question between Rhodehamel and the bank. In other words, the pendency of the chancery suit, and the rights therein asserted by the assignee, did not prevent the bank from claiming to be tlie absolute owner of the stock and assuming to sell the same to Rhodehamel; and manifestly the decree afterwards made in that suit did not enable the bank to dispute the title which the jury found it had undertaken to confer. Freeman on Judgments (4th Ed.) vol. 1, § 158; Russell v. Place, 94 U. S. 606, 24 L. Ed. 214; St. Romes v. Levee Cotton Press Co,, 127 U. S. 614, 8 Sup. Ct. 1335, 32 L. Ed. 289; Harrison v. Remington Paper Co., 140 Fed. 385, 72 C. C.‘ A. 405, 3 L. R. A. (N. S.) 954, 5 Ann. Cas. 314.
On the trial, which took place in November, 1913, tlie defendant offered in evidence the record in the chancery suit, including the bill of complaint, answer of the City Bank, answer of Rhodehamel, order of January 22, 1909, amended bill of complaint, report of William E. Krupp* commissioner, exceptions of Rhodehamel to the report, order of February 11, 1911, order of April 29, 1911, deposition of James Morgan Clark, and Exhibit Y thereto. The court admitted the three orders enumerated, but excluded the balance of the record. The order of January 22, 1909, merely allowed the plaintiff to file an amended complaint; the order of February 11, 1911, disposed of some of the matters in suit and postponed others for further consideration; the order of April 29, 1911, overruled the exceptions of Rhodehamel, confirmed the findings of the commissioner, and was a final decree.
We are of opinion that it was error to reject this record, or so much of it as was offered, not because it determined any issue raised in this case, but because of its bearing upon the question of fact submitted to the jury, namely, whether Rhodehamel became an innocent purchaser for value of this stock in October, 1908, as he testified, or whether the transaction at that time was of the nature asserted by the bank, as above stated.
In the first place, the amended complaint in that suit set forth in detail the somewhat peculiar situation which had arisen in respect of the dealings in La Belle Iron Works stock by White & White for the account of Rhodehamel, the hypothecation of that stock by them with various banks to secure their own notes, and the conflicting claims of ownership of the stock so pledged. Moreover, it alleges that soon after the failure of the Whites on the 7th of October, and before suit was brought on the 15th of that month, Rhodehamel had represented to the assignee that all this stock which the Whites had hypothecated
Because of this error the judgment must be reversed, and the case remanded, with instructions to grant a new trial.
Reversed.