41 N.Y.S. 1087 | N.Y. App. Div. | 1896
The opinion delivered at the Special Term
As to the item of $2,129.63, the receiver’s affidavit alleged that it did not arise out of the sale of the securities of the railway company only, but was a part of the proceeds of the sale of other securities which the Wormsers were carrying for Field’s firm, in which the railway company had no right or interest whatever; and that it was impossible to separate the proceeds of the sale of the different securities, or in any way to identify the said item as a part of the proceeds of the sale of the securities of the railway company.
It appears from the opinion of the Special Term that both parties treated the questions presented on the motion as questions of law
This brings us to the consideration of the right of the petitioners to recover from the receiver the seven bonds and 140 coupons, which appear, without dispute, to have been a part of the securities delivered by the railway company to Field’s firm and by that firm pledged to the Wormsers and recovered, by suit, from them by the receiver. The right of the petitioners to recover these securities was denied by the Special Term on the ground that, by prosecuting to judgment an action against Field’s firm for the value of the securities, the railway company had elected to treat the refusal of that firm to deliver the securities upon the tender of the debt for which they were pledged as a sale thereof, and that it could not thereafter successfully maintain its title to the securities themselves.
We are of the opinion that this ruling must be sustained. Ample authority therefor is cited in the Special Term opinion. (Rodermund v. Clark, 46 N. Y. 354; Moller v. Tuska, 87 id. 166; Fowler v. B. S. Bank, 113 id. 450; Terry v. Munger, 121 id. 161.)
Flo case to which our attention has been called by the appellants conflicts with these authorities. In Equitable Co-operative Foundry Co. v. Hersee (33 Hun, 169) the decision of the General Term proceeded upon the ground that the plaintiff was not shown to have had knowledge of the fraud at the time of bringing the first action on the contract, and that that action did not proceed to judgment, but was discontinued before it reached that stage. When the case reached the Court of Appeals (103 N. Y. 27) it was affirmed, on the sole ground of the lack of a finding or request to find that the plaintiffs, when they brought the action on the contract, knew of the fraud, and the court declined to express any opinion on the question whether, if there had been such knowledge, the fact that the action was not prosecuted to judgment would have relieved the plaintiffs from the imputation of an irrevocable election to affirm the sale. The current of authority in this State is to the effect that, where a party has the choice between two inconsistent remedies, the
The cases of Smith v. Savin (141 N. Y. 317) and Russell v. McCall (141 id. 437), cited by the appellants, do not appear to have any application to the questions under discussion. It appears from the affidavits before us that, in December, 1891, the railway company knew of the pledge of its securities by the Field firm to the Wormsers, and with full knowledge of all the facts in reference to the transaction between those two firms, in March, 1894, sued Field’s firm to recover the difference between the value of the securities and the amount of its debt to that firm, and on August 7, 1894, entered judgment against Field and his partners for
The order must be affirmed, with ten dollars costs and disbursements.
All concurred.
Order affirmed, with ten dollars costs and disbursements.
Tha following is the opinion delivered at the Special Term:
Gaynor, J. :
The Union Pacific Railway Company borrowed money of the firm of Field, Lindley, Wiechers & Co., on its promissory notes, pledging certain bonds as collateral security. The Field firm had dealings with the firm of I. & S. Wormser and pledged certain of these bonds as their own with the said Wormser firm as security, and they finally stood so pledged for the payment of a large balance. The said railway company tendered payment of its said notes to the said Field firm in due course and demanded backits said bonds, butthesaid firmrefusedto deliver them up. As early as December, 1891, the said railway company became fully informed of the said conversion of its bonds and of the particular ones of them which had been so pledged to the Wormser firm. Thereafter it began an action for the conversion of the said bonds against the said Field firm, alleging in the complaint the value of the bonds to be $1,163,060 and the amount of the loans to be $476,034.07, and claiming as damages the difference, and it obtained judgment for the said amount. It also brought an action against the Wormser firm for damages for the conversion of the said bonds so pledged with them.
On ¡November 27, 1891, the said Field firm had made a general assignment for the benefit of their creditors. This action was brought to set aside then-said assignment as fraudulent, and the plaintiff prevailing, ¡Norman S. Dike was appointed herein receiver of all of the assets of the said firm. The Wormser firm having sold the major part of the said bonds so pledged to them, reported that they had applied the proceeds to the payment of the balance due them from the Field firm, and had remaining to the credit of the said firm §2,129.63 in cash, and also seven Oregon Railway and ¡Navigation*427 Company bonds, of the value of §1,000 each, and 140 matured coupons of the value of §25 each, of the bonds so pledged with them. The receiver refused to accept this as a correct statement of the account, and brought an action against the Wormser firm for an accounting. The result was that he obtained a judgment against them for §22,342.13, which he has collected. The Wormser firm has also delivered to him the said seven bonds and 140 coupons. Meanwhile the said railway company has gone into the hands of receivers, and they now file their petition herein that the said receiver of the assets of the Field firm be ordered to pay to them the said money so recovered by him, and also that he deliver the said bonds and coupons to them. Both sides request that the court, with or without the aid of a reference, decide in this action the question between them. The facts being undisputed, I see no need of a reference. The petitioners claim the said bonds and coupons as theirs, and also that the said money is the proceeds of the sale of the said railway company’s bonds, and that they are entitled to it under the authority of American Sugar Refining Co. v. Fancher (145 N. Y. 662).
It seems to me that in offsetting its indebtedness to the Field firm against the value of the said bonds and coupons pledged with and converted by them, and bringing the action for damages for conversion against them, claiming the difference as the measure of damages, and obtaining judgment therefor, it made an irrevocable eléction of the remedies open to it, and must abide by it. It thereby let its title to the bonds go (Rodermund v. Clark, 46 N. Y. 354; Terry v. Munger, 121 id. 161; Fowler v. B. S. Bank, 113 id. 450; Moller v. Tuska, 87 id. 166). Its action for conversion against the Wormser firm was also an election to let the bonds go, and get the value thereof instead.
The motion is, therefore, denied.