14 Blatchf. 234 | U.S. Circuit Court for the District of Connecticut | 1877
This ease was tried by the court, the parties having, by written stipulation duly signed, waived a jury. Upon said -trial by the court, both parties appeared by their counsel and with their witnesses, and were fully heard respecting the controverted questions of law and of fact. The facts which are found to have been proved are as follows: On or about August 12th, 1S75, the firm of S. A. Castle & Co., of the city of New York, consisting of Samuel A. Castle, Rufus E. Hitchcock, and Henry S. McGrane, being insolvent, made an assignment in insolvency of all their goods and effects, for the joint and equal benefit of their creditors, under the statute of New York, of April 13th, 1800, to Leopold Bamberger, of said city, who accepted said trust, gave bonds according to law, and entered upon his duties on August 12th, 1S75. Previous to this time, said firm had been the selling agents, in said city, of the United States Button Company, a. joint stock corporation, duly incorporated in pursuance of the laws of this state, and established at Waterbury. Said firm had in their store, on said August 12th, 1875, the manufactured goods of said company, which had been theretofore sent to them for sale upon commission, to a large amount, which goods were the property of said button company. The market value of said goods was $7,500. The company had not been in the habit of drawing against their consignments, but, prior to this date, had obtained from S. A. Castle & Co. their accommodation acceptances, to the amount of $22,500. and it was agreed between said parties, at the time when said acceptances were given, that said firm should have a lien on the goods which were from time to time unsold, as security against their liability upon said acceptances. These acceptances had been discounted for the benefit of said button company, and were then held and owned by the Waterbury National Bank. The goods of said company in the possession of S. A. Castle & Co. were specified in their inventory, which was duly made and filed in pursuance of the laws of the state of New York, under the head of “goods on hand on which allowances have been made and merchandize in stock, &c.,” as “consigned by the United States Button Co.,” and were appraised at $0,054. The assignee thus had notice of the ownership of the goods. Said Bamberger immediately took possession of said goods as his own, and as equitably belonging to the creditors of S. A. Castle & Co., and proceeded forthwith to sell them as rapidly as he was able, for the benefit of said estate. On September 24th, 1S75. said button company took up and received said acceptances from the Waterbury National Bank, by the substitution of the button company’s notes therefor, and thereupon the president of said company carried said acceptances to New York, tendered them to said Bamberger, and demanded of him the goods belonging to said company, but said Bamberger refused to deliver the same and continued the- sale thereof. On or about November 1st, 1S75, the plaintiff was duly appointed receiver of the estate of said button company, by the superior court
Upon the foregoing facts, the conclusions of law are as follows:
1. The defendant rightfully took possession of the goods of the button company, but tor-tiously converted them thereafter. S. A. Castle & Co. were the .factors of the button company, and, as such, were personally intrusted with the sale of its goods. This trust was a personal one, and could not be delegated to another, beyond the usual course of business, without the consent of the consignors. Neither had Castle & Co. any right to sell or transfer the goods in payment or in pledge for their own indebtedness. Having a lien upon the goods as security for their liability upon the accommodation acceptances which they had given to the consignors, Castle & Co. had a right to transfer said lien to their creditors, and to deliver the goods to their assignee for the benefit of their creditors, solely as a security to the extent of said lien. The button company could not regain possession until they had tendered to the as-signee the amount of the lien of Castle & Co., or otherwise discharged said lien, and, upon such tender or discharge, had the right to regain possession of their property, if it could be traced, or distinguished from the mass of the other property of the factor in the possession of the assignee. Warner v. Martin, 11 How. [52 U. S.] 209; Veil v. Mitchel [Case No. 16,-908); Thompson v. Perkins [Id. 13,972); Cook v. Kelly, 9 Bosw. 358; Chesterfield Manuf’g Co. v. Dehon, 5 Pick. 7; Denston v. Perkins, 2 Pick. 86; Scott v. Surman, Willes, 400. But, the rightful possession of the assignee gave him no authority to assume to himself the entire property or right of disposing of the goods, until duly authorized by law, and when, having taken possession, with notice that the goods were the property of the button company, he proceeded to sell and convert them into money as rapidly as he could, there was a conversion. The action of trover “always supposes the defendant to have come legally into possession of the goods. It is the breach of the trust, or the abuse of such lawful possession, which constitutes the conversion.” Murray v. Burling, 10 Johns. 172; Connah v. Hale, 23 Wend. 402; Fisk v. Ewen, 46 N. H. 173; Baldwin v. Cole, 6 Mod. 212; M’Combie v. Davies, 6 East, 538.
2. The plaintiff, as receiver, had a right to institute a suit in this state against the defendant, for a conversion happening prior to the plaintiff’s appointment. It is contended, that the decree of the state court had no extra-territorial jurisdiction, and gave the plaintiff no title to property beyond the limits of this state, and that, therefore, he had no right to institute a suit for the recovery of the value of property which had been since his appontment beyond the jurisdiction of this state. But the statutes of this state in regard to the appointment and duties of receivers of the property of corporations do not undertake to change the title of the property or to vest it in the receiver. Receivers are declared by the statute to have the right to the possession of the property of the corporation, and power in their own names, or in its name, to commence and prosecute suits for and on behalf of the corporation, to demand and receive all evidences of debt and property belonging to it, and to do and execute, in its name or their own names, as such receivers, all the acts and things which shall be necessary or proper in the execution of their trust, and to have all the powers, for any of said purposes, possessed by such corporation. The receiver is the agent of the law to collect the property of the corporation and to wind up its affairs, and for that purpose to do all acts which may be necessary in the execution of the trust. By authority of law he acts in the place of the directors, but no title to property is changed. Such has been the construction of similar statutes elsewhere. Willink v. Morris Canal & Banking Co., 3 Green, Ch. [4 N. J. Eq.) 377.
It is unnecessary to determine whether the receiver was empowered to commence a suit in his own name, in the state of New York, for the recovery of the property of the corporation. As the title to the property which is now in question was confessedly always in the button company, a suit could have been instituted in New York against the defendant, in the name of the corporation, certainly with
The fact that the United States Button Company had not discharged the lien, and so were not entitled to the possession of the goods, at the time of the conversion by the defendant, on August 12th, 1875, does not defeat the action of trover, the lien having been discharged before suit was brought. If the plaintiff had a right of action when the suit commenced, it is competent for him to show a prior conversion. Delano v. Curtis, 7 Allen, 470; Carpenter v. Hale, 8 Gray, 157. Judgment should be rendered in favor of the plaintiff, for $7,500 and interest at six per cent, from September 24th, 1875, and his costs accruing after May 15th, 1877. Upon the amendment, the plaintiff should pay the defendant his taxable costs until May 15th, 1877, in accordance with the state practice. Richardson v. Hine, 43 Conn. 201.
[On error to the supreme court, the above judgment was affirmed. 103 U. S. 40.]