Buder v. New York Trust Co., 69.

• Citation: 107 F.2d 705
• Decision Date: 06 November 1939
• Docket Number: No. 69.,69.
• Parties: BUDER v. NEW YORK TRUST CO.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

107 F.2d 705 (1939)

BUDER v. NEW YORK TRUST CO.

No. 69.

Circuit Court of Appeals, Second Circuit.

November 6, 1939.

Olvany, Eisner & Donnelly, of New York City (James F. Donnelly, of New York City, of counsel), for appellant.

White & Case, of New York City (David Paine and Orison S. Marden, both of New York City, of counsel), for appellee.

Before SWAN, CHASE, and PATTERSON, Circuit Judges.

PER CURIAM.

This case has been much litigated. The first trial resulted in a disagreement by the jury; the second in judgment for the plaintiff, which this court reversed in Buder v. New York Trust Co., 82 F.2d 168, 104 A.L.R. 1035; and the present appeal brings up the proceedings at the trial which followed that reversal. Although the plaintiff obtained judgment on the third and fourth counts of his complaint, the result was substantially a victory for the defendant. The second count, charging conversion of stock pledged with the defendant as security for a loan to the plaintiff, was the only cause of action that was tried to the jury, and this count the judge dismissed at the close of the plaintiff's case. The first count (breach of contract) was voluntarily withdrawn before trial and was dismissed with the plaintiff's consent. The third and fourth counts involved sums of money of which the defendant had previously tendered payment, and by consent of counsel were left for decision by the court at the conclusion of the case. As already stated, judgment on them was given for the plaintiff, but he has appealed from the entire judgment in fear that acceptance of the favorable portion might preclude obtaining a reversal of the unfavorable, since recovery on the third cause of action would be inconsistent with recovery for conversion of the stock.

The facts relating to the claimed conversion were stated in detail in our former opinion and need not be here repeated. It is argued that our former interpretation of contract of pledge was erroneous and not in harmony with the law of New York, which concededly must control in view of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487. But we find no New York decision which conflicts with the views expressed in our former opinion. Dicta by a trial court justice in Cole v. Manufacturers Trust Company, 164 Misc. 741, 299 N.Y.S. 418, are not an authoritative declaration of the state law. Moreover, on the present trial the plaintiff proved that no consideration was paid for the option of July 8, 1932, pursuant to which the optionee took up the stock early in August. Hence the option was no more than a revocable offer, and neither the making of the offer in July nor the sale of stock affected by its acceptance in August can constitute a conversion. The plaintiff's grievance is that the sale was made at an inadequate price. As we said before, for such an injury the pledgee might be accountable, but not in an action for conversion.

The plaintiff contends that the pledgee had waived its privilege of selling without notice by conduct which makes applicable...