Detroit Trust Co. v. Struggles

Citation283 Mich. 471,278 N.W. 385
Decision Date24 February 1938
Docket NumberNo. 32.,32.
PartiesDETROIT TRUST CO. v. STRUGGLES et al.
CourtSupreme Court of Michigan

OPINION TEXT STARTS HERE

Suit by the Detroit Trust Company, executor of John L. Liggett, deceased, against Thorpe J. Struggles and others for a determination of the ownership of stock certificates and other relief. From an order dismissing the bill of complaint, plaintiff appeals.

Order vacated and cause remanded.

Appeal from Circuit Court, Wayne County, in Chancery; Joseph A. Moynihan, Judge.

Argued before the Entire Bench.

Goodenough, Voorhies, Long & Ryan, of Detroit, for appellant.

John J. Sloan, of Detroit (Charles P. Hornauer, of Trenton, of counsel), for appellee Thorpe J. Struggles.

Lewis & Watkins, of Detroit (William F. Fratcher, of Detroit, of counsel), for appellee E. A. Pierce & Co.

BUSHNELL, Justice.

According to the allegations of the bill of complaint of plaintiff, the executor of the estate of John L. Liggett, of Detroit, several months before his death, Liggett and his nephew, Thorpe J. Struggles, of Cleveland, brought to the Detroit office of defendant Pierce & Co., certificates representing 500 shares of class A stock of Devoe & Reynolds Company, Inc., then standing on the books of the company in the name of Liggett. Struggles, a customer of Pierce & Co., had an account at their Detroit office, where he was purchasing stocks on margin. It is claimed that Pierce & Co. required additional collateral of Struggles and the Devoe & Reynolds stock was loaned to him by Liggett for the purpose of protecting his account. The stock certificates were indorsed in blank by Liggett and delivered to Pierce & Co., with a letter signed by him, which read as follows:

‘With respect to certificate No. 7905/9 representing 500 shares of Devoe & ReynoldsA stock standing in my name and delivered to you through Mr. J. T. Struggles, I hereby authorize you to dispose of same or the proceeds thereof and any income therefrom in any manner he may direct, including a credit therefor to his personal account with you, and I hereby approve and confirm any accounting respecting same made to the said T. J. Struggles and accept the same to your full discharge.’

Liggett continued to receive dividends on the Devoe & Reynolds stock until the time of his death, February 15, 1937, shortly after which date plaintiff claims that Pierce & Co., with the full knowledge of the death of Liggett, caused the certificates to be surrendered and new ones issued in lieu thereof in the name of defendant Struggles. Plaintiff charges that Pierce & Co.'s right to retain the stock ceased upon the death of Liggett, except in so far as it was then necessary to satisfy any debt owed by Struggles to Pierce & Co. over and above other collateral held by them as the separate property of Struggles. Plaintiff says ‘that at such time and at present the status of the account with Thorpe J. Struggles was such that said E. A. Pierce & Company had no lien thereon.’

Learning that Struggles claimed to be the absolute owner of the stock and upon Pierce & Co.'s refusal to deliver the new certificates to plaintiff, it began action in the chancery court for the purpose of determining the rightful ownership thereof, for an accounting of the dividends paid, to restrain Pierce & Co. from parting with the possession of the certificates until further order of the court, and, if the court should determine that plaintiff was either the owner or entitled to possession thereof, to compel an indorsement of the new certificates.

Defendants filed separate motions to dismiss, but, upon similar grounds, namely, that the bill of complaint upon its face did not state a cause of action cognizable in a court of equity and that plaintiff had an adequate remedy at law. Plaintiff appeals from an order dismissing its bill of complaint.

It is beside the point to discuss, as have the parties in their briefs, the adequacy of the remedies at law for the recovery of the new stock certificates issued in the name of Struggles. There could be no remedy at law, either in trover or replevin, for these certificates or their value, since plaintiff had no legal title thereto. Equity, however, possesses independent power to impose a constructive trust upon the traceable proceeds of converted property whenever it appears just and equitable to do so. Warren v. Holbrook, 95 Mich. 185, 54 N.W. 712,35 Am.St.Rep. 554, and Fur & Wool Trading Co. v. Fox, 245 N.Y. 215, 156 N.E. 670, 671, 58 A.L.R. 181. See, also, 35 Mich. Law Rev. 798 (March, 1937).

In Fur & Wool Trading Co. v. Fox, supra, it was alleged that goods belonging to plaintiff...

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15 cases
  • In re Mayer
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • 24 d5 Junho d5 2011
    ...the property back to its original form. See, e.g., In re CyberCo Holdings, 382 B.R. at 129 n. 9 (citing Detroit Trust Co. v. Struggles, 283 Mich. 471, 278 N.W. 385, 386 (1938), for the proposition that it “unequivocally limits the imposition of a constructive trust to only those instances w......
  • In re Cyberco Holdings, Inc., Bankruptcy No. HG 04-14905.
    • United States
    • United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Western District of Michigan
    • 29 d2 Janeiro d2 2008
    ...Trustee reads Swantek too broadly. Moreover, the genealogy of that portion of Swantek dates back to Detroit Trust Co. v. Struggles, 283 Mich. 471, 474-5, 278 N.W. 385 (1938), which unequivocally limits the imposition of a constructive trust to only those instances where the defendant is in ......
  • Fredal v. Forster
    • United States
    • Court of Appeal of Michigan (US)
    • 8 d5 Dezembro d5 1967
    ...5 As to matters traditionally equitable, no right exists as a matter of law to a determination by a jury. Detroit Trust Co. v. Struggles (1938), 283 Mich. 471, 278 N.W. 385; Chamberlain v. Eddy (1908), 154 Mich. 593, 118 N.W. 499; Sokel v. Nickoli (1959), 356 Mich. 460, 467, 97 N.W.2d 1. Th......
  • United States v. Fleming, Civ. No. 307.
    • United States
    • United States District Courts. 8th Circuit. Northern District of Iowa
    • 31 d2 Dezembro d2 1946
    ...trust upon the traceable proceeds. Jones v. Home Savings Bank, 1925, 200 Iowa 1186, 206 N.W. 107; Detroit Trust Co. v. Struggles, 1938, 283 Mich. 471, 278 N.W. 385, 386. See also Schwanz v. Farmers' Co-Op. Co., 1927, 204 Iowa 1273, 214 N.W. 491, 494, 55 A.L.R. In the present case the defend......
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