Lutey v. Clark
31 Mont. 45
Mont.
1904
Check Treatment

Lead Opinion

MR. JUSTICE HOLLOWAY

delivered the opinion of the court.

On October 7, 1897, J. D. Thomas and George P. Bretherton, minority stockholders in the Thornton-Thomas Mercantile Company, a corporation doing business at Butte, Montana, brought an action in the district court against that corporation for the purpose of having a receiver appointed to take charge of and wind up the business of the concern. The district court appointed one E. H. Hubbard as such receiver, who immediately took possession of the property, and upon the receiver’s petition the district court on October 19th made an order for the receiver to sell at once at public auction or private sale the personal property belonging to the corporation. It appears that pursuant to such order the receiver sold to Lutey Bros., appellants here, a portion of such personal property for the sum of $3,-241.19, which sum was paid over to the receiver, and by him deposited in the. bank of W. A. Clark & Bro., the respondents, in the name of E. IT. Hubbard, receiver; that thereafter on October 21, 1897, the Thornton-Thomas Mercantile Company applied to this court for a writ of certiorari to review the action of the district coitrt in appointing the receiver and in making the order of sale above mentioned; that the cause was heard in this court, and on November 15, 1897, this court rendered its judgment and decision reversing the order of the district court appointing the receiver, and vacating all orders of that court *52made subsequently thereto, including the order of sale above mentioned (State ex rel. Thornton-Thomas Mercantile Co. v. District Court, and Clancy, Judge, 20 Mont. 284, 50 Pac. 852); that on the 15th day of November, 1897, these respondents commenced an action in the district court against the Thornton-Thomas Mercantile Company to recover from said company the sum of $5,653.96, then due and owing to respondents from such company, and caused a writ of attachment to be issued and placed in the hands of the sheriff of Silver Bow county, who thereupon served notice of garnishment upon these respondents through Alex. J. Johnston, the cashier of the banking house of IV. A. Clark & Bro., and thereby attached said sum of $3,241.19, together with other moneys deposited in the name of E. 11. IJubbard, receiver, all aggregating the sum of $3,949.78; that while Lutey Bros, -were in possession of said personal property they sold and disposed of a portion thereof of the value of $415.85; that thereafter, on the 16th day of November, 1897, various other creditors of the Thornton-Thomas Mercantile Company brought actions in the district court against said company, and caused writs of attachment to issue therein, and caused said personal property remaining in the possession of Lutey Bros, to be attached, and the sheriff took possession of said property under and by virtue of said writs of attachment, and thereafter, upon judgments duly made and entered, sold such property so attached to satisfy the judgments thus obtained against the Thornton-Thomas Mercantile Company; that on March 1, 1898, E. H. Hubbard made demand upon W. A. Clark & Bro. for the moneys so deposited in said bank, but such demand was then and thereafter continuously refused; that on the 25th of May, 1898, the said Hubbard sold and assigned all interest that he had in said money so deposited to Lutey Bros., appellants herein; and thereafter, on May 26,1898, Lutey Bros, commenced this action in the district court against W. A. Clark & Bro. to recover the said sum of $3,949.78, with interest and costs. The defendants answered, and thereafter the parties agreed upon the facts of the case, and an agreed statement was *53filed February 13, 1901, containing the facts heretofore recited, and upon such statement of facts the district court found the issues for the defendants W. A. Clark & Bro., and entered judgment in their favor for their costs. From this judgment this appeal is prosecuted.

This court having determined in the certiorari proceedings that the áction of the district court in appointing the receiver was without jurisdiction, and having reversed that order and annulled all orders made subsequently thereto, particularly the order under which the receiver pretended to sell certain personal property to Lutey Bros., these appellants, it becomes a question for determination then whose money was it that was attached in the hands of W. A. Clark & Bro., deposited there by Hubbard, the receiver, and whose goods were they that were attached in the hands of Lutey Bros, at the suits of other creditors of the Thornton-Thomas Mercantile Company?

It is said that, as Hubbard and Lutey Bros, exercised acts of dominion over these goods without the consent of the mercantile company, and in opposition to its interests, each is liable in conversion; that after the decision of this court Hubbard became an involuntary trustee for that company, and, as the company then could have pursued their goods or the particular funds derived from their sale, respondents W. A. Clark & Bro. could do likewise.

Much discussion is indulged in by counsel for respondents which is not pertinent here. Assuming that the pretended sale by Hubbard to Lutey Bros, was wrongful, and constituted a conversion of the goods, and that Lutey Bros., by their acts of ownership over the goods in selling a portion of them, were likewise guilty of a conversion, it must be conceded that the mercantile company, while it could maintain an action against Hubbard for conversion, or could pursue Lutey Bros, and elect either to sue them as for a conversion of the property or in claim and delivery for the return of the specific property or such portion of it as remained in their possession, it cannot maintain an *54action in conversion against Hubbard and a like action against Lutey Bros., and thereby enforce two judgments for the same cause of action, or it cannot pursue Hubbard in conversion and sue Lutey Bros, for the specific property at the same time. The company was entitled to the property or to its value, but not to both. The effect of the decision of this court in vacating the order of sale was to declare such sale void ab initio; that in fact no sale had ever been made, and that the mercantile company was still the owner of the goods of which Lutey Bros, had come into possession; and whatever right the mercantile company had to make an election to take the property or sue for damages for its conversion, until it exercised such election, the ownership of the property was in it, and such property was subject to attachment at the instance of any of its creditors. The decision of this court was to the effect that no sale had been made; in other words, that the pretended sale was without effect, and conveyed no title to the property. Hubbard, having received the money belonging to Lutey Bros, on such void sale, became (on such sale being declared void) an involuntary trustee of Lutey Bros, for the amount of money received from them; and likewise Lutey Bros., having received such goods on such pretended sale, became an involuntary trustee for the mercantile company for the goods which they retained and for the money which they had received from a sale of the portion of the goods disposed of 'by them.

Sections 2958 and 2959 of the Civil Code provide: Section 2958: “One who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.” Section 2959: “One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act is, unless he has some other or better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.” Section 4334 of the Civil Code is cited, and it is said that the presumption of the measure of damages arising from the wrongful conversion of personal property cannot be repelled in favor of one whose possession is wrongful *55from the beginning by his subsequent application of the property to the benefit of the owner without the owner’s consent. But this section has no application here, for the record discloses that the mercantile company did elect to have the sale set aside, to have its property restored to it or applied to its benefit, and when it was applied to the satisfaction of judgments recovered against the mercantile company it was applied to the company’s benefit. The proceedings in this court were taken at their instance, and constituted such election.

(Decided October 3, 1904.)

We are of the opinion that this disposes of the case, and it is • not necessary to decide the abstract question, can a plaintiff in an attachment suit secure a lien upon property in his own possession by having himself served as garnishee ?

As it does not appear from this record what disposition ivas ever made by appellants of the $415.85 received by them from the sale' of a portion of the goods belonging to the mercantile company, this court is unable to make any order respecting the same.

The judgment is reversed, and the cause remanded to the district court, with directions to enter judgment in favor of the plaintiffs (appellants here) for $3,241.19, together with interest and costs.

Reversed and remanded.

Mr. Justice Milburn, not having heard the argument, takes no part in this decision.



Rehearing

ON MOTION FOB BEHEABING.

MB. JUSTICE HOLLOWAY

delivered the opinion of the court.

Bespondents have petitioned for a rehearing and a modification of the order heretofore made by this court in determining *56this appeal. Respondents pray that this cause be remanded for a new trial.

In the opinion heretofore rendered (Lutey v. Clark, 31 Mont. 45, 77 Pac. 305) this language is used: “As it does not appear “from this record what disposition was ever made by appellants “of the $415.85 received by them from the sale of a portion of “the goods belonging to the mercantile company, this court is “unable to make any order respecting the same.” Respondents now contend as this court was unable to make any suggestion as to the proper disposition of this $415.85, a new trial should be ordered, that a determination respecting that sum of money may be had. The language quoted above from the former opinion of this court was inaptly used. That sum of money was received by Lutey Bros, from a sale of a 'portion of the stock of goods which they had received under the pretended sale of the receiver. That sale being void, the remaining portion of those goods and this sum of money were held by Lutey Bros, as an involuntary trustee for the Thornton-Thomas Mercantile Company. This company is not a party to this action and their interests could not be affected by any new trial which may be ordered; in fact, there is nothing to try respecting this sum of money as between the parties to this action so far as this record shows.

But it is contended that W. A. Clark & Bro. are subrogated to the rights of the Thornton-Thomas Mercantile Company, and therefore this sum should be deducted from the amount which Lutey Bros, are entitled to recover from them. But this subrogation arises, if at all, from the mere fact that W. A. Clark & Bro. secured a judgment against the Thornton-Thomas Mercantile Company, which judgment has never been satisfied. Respondents’ contention then is this: If A. sue B. and attaches certain property, and B. has other property which is not attached or levied upon in any manner, and A. recovers a judgment which is not satisfied, he thereupon becomes subrogated to the right of B. in the property which was not seized. The *57mere statement of the proposition is sufficient demonstration of its absurdity. It is nowhere claimed that Clark & Bro. ever levied upon or seized this sum of $415.85 in the hands of Lutey Bros, or in any manner brought themselves into privity with it. As they have no interest in it now, so far as this record discloses, they cannot be heard to ask for any adjudication in this action respecting it. In our former opinion we should either have made no reference whatever to this sum, or should have contented ourselves with merely remarking that, as this sum belongs to the Thornton-Thomas Mercantile Company, a concern not a party to this present action, we are without authority to make any direction as to the proper disposition of it.

The motion for rehearing is denied.