213 Mass. 309 | Mass. | 1913
This is an action for, the conversion of six Northern Pacific Great Northern joint bonds (registered and non-negotiable), one Union Pacific bond (registered and non-negotiable), two Wolfeborough water bonds (negotiable coupon bonds) and one bond of the town of Wolfeborough (negotiable coupon bond), all, with the exception of the last (which was for $200), being bonds for $1,000. The case was tried before Justice Schofield without a jury. He found for the plaintiff, and the case is here on exceptions to his refusal to give seven rulings asked for by the defendant.
So far as now material the facts found by the judge were as follows: The plaintiff’s husband died in February, 1902. Some
On March 14, 1904, Symonds opened another margin account
On May 7 or 9, at Symonds’s request, the defendants delivered to Berry and Company the securities then being carried by them in the second margin account and the bonds held as security for that account, and received from Berry and Company a check for $11,237.13, the balance due from Symonds on that account. The judge ruled “that the act of the defendants in taking the bonds into their possession from Symonds with notice, intending to hold them as pledgees, was in itself an exercise of dominion over them in denial of the rights of the true owner, and a conversion,” and made “the same findings of fact and rulings of law in regard to the two transfers of account.” The judge found that Berry and Company became bankrupt and that the bonds received by Colton and Company were sold by them and no part of the proceeds came to the plaintiff. He found for the plaintiff for the sum of $7,022.94, the value of the ten bonds after deducting the value of four bonds recovered from the assignees of Berry and Company. The only exceptions taken by the defendants were to the refusal of the judge to give the seven rulings asked for by them.
1. The first ruling asked for
2. The sixteenth ruling asked for
3. The twenty-first and twenty-second rulings asked for
It is settled that where a bailee receives on deposit goods from one in possession but without title to them, and afterwards restores them to the possession of the bailor in ignorance of the rights of the true owner, he is not guilty of a conversion. Loring v. Mulcahy, 3 Allen, 575. Hill v. Hayes, 38 Conn. 532. Steele v. Marsicano, 102 Cal. 666. Nelson v. Iverson, 17 Ala. 216. Frome v. Dennis, 16 Vroom, 515. For other cases where the temporary use of the property of another made by a defendant acting in good faith under a mistake of fact has been held or said not to be a conversion, see Strickland v. Barrett, 20 Pick. 415; Wellington v. Wentworth, 8 Met. 548; Spooner v. Manchester, 133 Mass. 270; Shea v. Milford, 145 Mass. 525; Gurley v. Armstead, 148 Mass. 267.
It is pointed out in Pollock on Torts, 374, in connection with this rule, that a bailee under those circumstances is estopped to deny the title of the bailor. That means that in returning the goods to the bailor the bailee does no more than perform the duty he owes to the bailor. He cannot be guilty of a conversion for doing that.
In Leonard v. Tidd, 3 Met. 6, this principle was applied in a case where the defendants acting in good faith received as security for a debt due to them from the pledgor a gun, the property of the plaintiff which was in the possession of the pledgor, and returned the property pledged to the wrongful pledgor upon payment of the debt due them from him. For a similar decision see Spackman v. Foster, 11 Q. B. D. 99. The reasoning on which the decision in Spackman v. Foster went was that although the pledgee in such a case claims to hold the property as against the wrongful pledgor until the debt due him from the wrongful pledgor is paid, so far
But in the case at bar the plaintiff’s bonds, which the defendants received in good faith from Symonds in whose possession the plaintiff had put them, were not returned to Symonds. On the contrary they were delivered by Symonds’s direction to persons who to the defendants’ knowledge were lending money to Symonds on the security of the bonds. That is to say, the defendants in place of restoring the bonds to Symonds delivered them to a third person in obedience to a subsequent act on the part of Symonds which was an act of ownership and not of mere possession.
The question whether under those circumstances the pledgor is guilty of a conversion has not arisen in this Commonwealth. In Leonard v. Tidd, 3 Met. 6, the gun was not delivered by the pledgee to the purchaser from the wrongful pledgor. In that case the wrongful pledgor “took the gun from a room in the defendant’s house, and delivered it to Pratt,” the purchaser from the wrongful pledgor. See 3 Met. at p. 7. That is to say, the sale in that case was made by the wrongful pledgor and the gun was taken from the pledgee by the wrongful pledgor and delivered by him to the purchaser. All that the defendant did was to take the proceeds of the tortious sale. That is not a conversion. See Polley v. Lenox Iron Works, 2 Allen, 182. In Parker v. Lombard, 100 Mass. 405, there was no delivery by the bailee in obedience to a subsequent act of dominion exercised by the bailor. In that case the bailee delivered the goods to the person who was entitled to receive them under the instructions given him by the bailor when the original bailment was made. In other words, that was a case where the bailee delivered the goods to the person in whose behalf the bailee was told the bailment was made when it was made.
Blackburn, J., in answering the question proposed to the judges by the House of Lords in Hollins v. Fowler, L. R. 7 H. L. 757, 767, gave it as his opinion that if the bailee in such a case “could have been fixed with knowledge that more was done than merely changing the custody, and knew that the company’s servants [i. e. servants of the bailee] were transferring the property from. one who had it in fact to another who was going to use it up, the question would be nearly the same as that in the present case.” In the “present case” Blackburn, J.’s answer to the question put to the judges was that the defendant was guilty of a conversion. The decision in Hudmon Brothers v. DuBose, 85 Ala. 446, goes further. In Hudmon Brothers v. DuBose it was held that a warehouseman who delivered cotton stored with him not to the bailor but to the holder of the storage receipt issued to the bailor when the cotton was put in storage, was guilty of a conversion without its being shown that knowledge had been brought home to the warehouseman that more was being done than “merely changing the custody.” Somerville, J., in delivering the opinion in that case, said that what may be for convenience called the rule of Leonard v. Tidd “does not include a restoration of the bailor’s dominion by an act, the essential nature of which is in defiance of the true owner’s title, or the probable consequence of which will be to put the property beyond his reach.”
On the other hand a contrary conclusion was reached in National Mercantile Bank v. Rymill, 44 L. T. (N. S.) 767, and in Leuthold v. Fairchild, 35 Minn. 99. In National Mercantile Bank v. Rymill, an auctioneer who had received for sale from one in possession of the same, horses and a harness, delivered them to one who to his (the auctioneer’s) knowledge had bought them of the bailor. In that case the auctioneer received the purchase money from the purchaser and after deducting his commission paid the balance to the bailor. In Leuthold v. Fairchild, a bank which had discounted a draft to which was attached a bill of lading for wheat shipped to.the drawee delivered the bill of lading to the drawee on payment of the draft. The decision in National Mercantile Bank v. Rymill, 44 L. T. (N. S.) 767 (and not reported elsewhere) was a decision of the Court of Appeals made in 1881 by Bramwell,
We are of opinion that the defendants in the case at bar were not guilty of a conversion when they received in good faith the plaintiff’s bonds (which they did receive in good faith) as security for the debts due them from Symonds. If they had returned the bonds to the possession of Symonds (with whom they originally found the bonds) on being paid by Symonds the debts due them from him, they would have done nothing more than perform the duty owed by them as pledgees to Symonds as pledgor in the absence of knowledge of the rights of Mrs. Varney, the true owner. But they did not return the bonds to the possession of Symonds, as they were bound to do in the absence of knowledge as to the true ownership, on being paid the debts due them from him. On the contrary under the direction of Symonds they delivered the bonds to persons who to their knowledge were lending to Symonds on the security of the bonds the amount owned them by Symonds. They knew that Symonds was exercising a subsequent
It is not out of place to point out again what before now has been said several times (see for example Martin, B., in Burroughes v. Bayne, 5 H. & N. 296; Bramwell, B., in Hiort v. Bott, L. R. 9 Ex. 86, 90), namely, that the terms “conversion” and “converting to his own use” are misleading and unfortunate terms. As was said by Collins, J., in Consolidated Co. v. Curtis, [1892] 1 Q. B. 495, 498, "The difficulty is diminished by remembering that in trover the original possession was by a fiction deemed to be lawful (per Martin, B., in Burroughes v. Bayne, 5 H. & N. at p. 301, and per
We are of opinion that the delivery of the bonds to Colton and Company and to Berry and Company were not “equivalent to a return of the said bonds to George E. Symonds,” and the twenty-first and twenty-second rulings asked for were properly refused.
4. No argument either at the bar or on the brief has been made in support of the three other rulings asked for. The defendants however have contended that they should have been given. Under these circumstances it is enough to say that we find that no error was committed by the judge in refusing to adopt them.
5. The defendants have argued some points of law not raised by the rulings asked for. For that reason we have not discussed them. It is not improper to add that we should have found that no error had been committed by the judge had the questions argued been raised.
Exceptions overruled.
The first ruling asked for was in these words: “Upon all the evidence the plaintiff Emma J. Varney is not entitled to recover, and the verdict is to be for the defendants.”
The sixteenth ruling asked for was in these words: “16. If the court finds upon all the evidence that the plaintiff entrusted the bonds in question or any of them to George E. Symonds and gave him full possession and control of the same, and the said George E. Symonds misappropriated the said bonds and gave them to the defendants as collateral security for certain purchases of stock, then the plaintiffs were negligent in their care of the said bonds and are estopped from claiming same or the value of the same from the defendants.”
The twenty-first and twenty-second rulings asked for were in these words: “21. The delivery of the bonds to Colton & Company by the defendants in accordance with the directions of the plaintiff’s agent, George E. Symonds, was equivalent to a return of the said bonds to George E. Symonds and therefore constructively a return to the plaintiff and for such bonds the plain-
“22. The delivery of the bonds to Berry and Company by the defendants in accordance with the directions of the plaintiff’s agent, George E. Symonds, was equivalent to a return of the said bonds to George E. Symonds and therefore constructively a return to the plaintiff and for such bonds the plaintiff is not entitled to recover, it being agreed that the bonds had not depreciated during the period that the defendants held the same.”