2 Trans. App. 36 | NY | 1867
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *397 The liability of the defendants to account to the plaintiff, would have been established if it had been shown that the transaction between their testator and How had placed him in the same relation to the debtor which How held. The complaint alleges that the whole interest How and Swift Hurlburt had in the two promissory notes and in the securities, was duly assignable, and had fully and effectually passed to him. This allegation is not as to the notes distinctly denied by the answer, and the rule that every material allegation of the complaint not controverted by the answer must be taken as true, is invoked to establish the fact on this appeal that the notes were transferred with the securities. *398
But this fact is not among those found by the court on the trial, on which the decision was founded, and to which we must be confined in determining this appeal.
The appeal to this court is upon the law, and we are not to examine what conclusions of fact might have been adduced from the pleadings or testimony, but only whether those declared as found will support the judgment rendered. (Cady v. Allen,
If the plaintiff deemed this fact essential, he should have requested the court to incorporate it in the findings, and the defendants would then have had an opportunity to move to amend their answer if the failure to deny the transfer of the notes was inadvertent; and such motion would doubtless have been granted, as the defense set up, resting upon the right of How to sell the securities and upon the purchase of them from him by the defendant's testator, in good faith, was tantamount to a denial of the existence of such circumstances as would establish privity between him and Brown.
Under the facts found, it was properly held that no such privity was established, and therefore that the plaintiff was not entitled to an accounting from the defendants. The court, however, before which the action was tried, decided that the defendant's testator wrongfully converted the securities, and awarded the plaintiff damages for such conversion.
We need not consider whether the facts warranted this conclusion if we find that the nature of the action did not admit of such a judgment. This therefore is the principal question presented on this appeal.
The case stated in the complaint is such as would entitle the plaintiff to equitable relief, and such is demanded in the complaint, while the judgment was such as is only applicable to an action at law.
It is provided by section 275 of the Code, that, in an action in which an answer had been interposed, the court may grant the plaintiff any relief consistent with the case made by the complaint and embraced within the issue; and it has accordingly been held by this court in Morgnat v. Morgnat (2 Kernan, *399
336), Barlow v. Scott (
In such cases it is always apparent before trial that the issue upon which such judgment is given is one of the issues presented by the pleadings, and if either party desire its trial by a jury he should demand it, for by proceeding without objection to a trial by the court of the whole case, he waives his right to the trial by jury of any of the issues it presents. (Barlow v.Scott,
The difficulty with the case now under consideration is, that the facts upon which the judgment proceeded were not among those stated in the complaint and were not necessary to or consistent with the case made by it.
They are in effect that the securities being pledged by Brown to How were sold by him to Varnum unlawfully, and that Varnum, having no title as against Brown, wrongfully refused to surrender them to him on demand.
The complaint does not contain any such allegations, but, on the contrary, proceeds upon the assumption that the transaction between How and Varnum was lawful, and effectually passed to him all the interest which How had in the securities, with the right to hold them as against Brown until the payment of the debt which they were intended to secure.
It cannot, therefore, be successfully contended that a judgment, based upon a tortious transfer of the securities to Varnum is consistent with the case made by the complaint.
The judgment of the General Term of the Court of Common Pleas of the city and county of New York reversing that of the Special Term was correct and should be affirmed.
Concurrence Opinion
N.J. Brown, the plaintiff's assignor, being indebted to one Calvin W. How in the sum of $548.48, and to the firm of Swift Hurlbut, all of the city of New York, in the sum of $151.52, and which indebtedness was *400 secured by the notes of said Brown, said Brown, on the 22d of May, 1845, left with said How, as collateral security for the payment thereof, $2,000 of canal scrip of the State of Illinois. At the same time, it was agreed that if said notes were not paid at maturity, or within thirty days thereafter, said. How was authorized to sell said scrip and apply the avails thereof prorata to the payment of said notes. The notes not having been paid, How sold and assigned the canal scrip stock to Joseph B. Varnum, the defendant's testator, in consideration of the sum of $800, paid by Varnum to How, and Varnum sold the same at auction, and realized therefor the sum of $500. In 1854 Brown offered to Varnum to pay the amount due upon these two notes, and demanded the said certificates from him. That demand not being complied with, this action was commenced, Brown having assigned his claim to the plaintiff. The complaint prayed that an account be taken between him and the defendant, and that upon payment of the balance (if any) which might be found due to the defendant upon the two promissory notes, or either of them, the defendant be adjudged to pay him such sum of money as upon such accounting he may be found entitled, or that, upon such accounting being had, the said collateral securities be sold, under the direction of the court, and the proceeds thereof, after payment out of the same of the balance aforesaid, and after payment of plaintiff's costs, be paid to him.
The learned first judge of the New York Common Pleas, before whom this action was tried, correctly held that the defendant Varnum stood in no relation of pledgee to this plaintiff, and that there was no privity between them. That he occupied the position of a purchaser from How, and that upon no principle could he be held to account to the plaintiff, as his trustee, for the administration of this trust. It did not appear that any thing was sold and transferred to the defendant, but the stock deposited with How as security for the payment of the two notes mentioned. By the terms of the assignment from Brown to How, the latter was fully authorized to sell the said canal scrip upon non-payment of *401 the notes, and was to apply the avails thereof to the payment of said notes pro rata. This defendant, by becoming the purchaser of the said scrip, did not assume the responsibilities, or did there devolve upon him the duties of trustee to administer the trust in the place of How. If How had been guilty of any violation of his duties as trustee, he was responsible to the plaintiff's assignee, and was liable to account either to him or to his cestui que trusts for the manner in which he had discharged these duties. The court very properly held, therefore, that there was no ground upon which the defendant could be held liable to an account, or upon which the defendant's right to redeem could be enforced against the defendant Varnum. The judge having arrived at this conclusion, it followed that the complaint should have been dismissed. But the court held that there had been an illegal conversion of the scrip by the defendant Varnum, and that he was liable as in an action of tort for the value of the property converted, and thereupon gave judgment against the defendant for the value of said scrip, with interest. This judgment was reversed by the General Term of the New York Common Pleas, and judgment given for the defendant that the complaint be dismissed with costs. From this judgment the plaintiff appeals to this court.
There is a conclusive objection to the plaintiff's assignee recovering in this action as for a tort or illegal conversion. How, clearly, had a lien upon these securities for the payment of the amount of the two notes and interest. It must be conceded that Varnum, by the purchase of these securities from How, acquired at least the interest and lien of How, whatever that may have been; and plaintiff's assignee, to have entitled himself to a redelivery of these securities, must have tendered the amount of the lien. There was simply an offer to pay to Varnum the amount due upon these notes. It was unaccompanied by any tender of the amount due, and was insufficient to extinguish the lien and thus entitle Brown to the possession of the notes. He could not, clearly, maintain an action for conversion unless he was entitled to such possession. Until a wrongful detention after a demand and *402
refusal were shown, there was no evidence of a conversion. The possession of Varnum in this aspect was lawful, and its character could not be changed until some act was done which made it unlawful longer for him to retain these securities. (Hall v.Robinson, 2 Comst., 293.) A tender of the amount due on the two notes, assuming Varnum held them as the substitute of How, might have entitled Brown to the possession of the securities. But, clearly, on no theory was he entitled to them, except upon payment of the amount of the lien, or a tender and refusal. Such tender has not been made. The offer to pay is not the equivalent for an actual tender. (Bateman v. Poole, 15 Wend., 637;Strong v. Black, 46 Barb., 222.) Judgment final was properly given. (Edmondston v. McLeod,
The judgment appealed from should be affirmed, with costs.
All concur.
Affirmed. *403
