City Bank of Wheeling v. Rhodehamel
| Decision Date | 27 May 1915 |
| Docket Number | 1305. |
| Parties | CITY BANK OF WHEELING v. RHODEHAMEL. |
| Court | U.S. Court of Appeals — Fourth Circuit |
John C Palmer, Jr., and John J. Coniff, both of Wheeling, W.Va (William Erskine and Joseph R. Curl, both of Wheeling, W Va., on the brief), for plaintiff in error.
John A Howard and J. M. Ritz, both of Wheeling, W. Va., for defendant in error.
Before KNAPP and WOODS, Circuit Judges, and WADDILL, District Judge.
The defendant in error (plaintiff below) sued the City Bank of Wheeling for the conversion of 138 shares of La Belle Iron Works stock. His contention in brief was that on or about the 17th of October, 1908, he bought outright from the defendant bank 126 shares of this stock, which the bank then had in its possession and claimed to own, for the sum of $14,668.42; that this sum was paid with his note at four months, secured by the 126 shares purchased and 12 additional shares, which he delivered a few days later; and that the bank failed and refused to surrender the note and return to him the stock pledged for its payment when he demanded the same and tendered the amount due on the 6th of June, 1911.
The bank set up in defense, among other things, that the 126 shares in question were hypothecated with it by one A. L. White, of the brokerage firm of White & White, to secure the payment of his note for $14,668.42, which became due on the 17th of October, 1908; that on the 7th of that month the firm of White & White and A. L. White individually made an assignment for the benefit of creditors to James Morgan Clark, who claimed to be entitled as such assignee to the stock so pledged by White; that the plaintiff Rhodehamel also claimed to be the owner of this stock and demanded its delivery to him; that the bank did not sell or offer to sell the stock to Rhodehamel at any time; that he was informed by the bank of the claim of White's assignee, and thereupon arranged with the bank of the claim of White's for the $14,668.42, in addition to the note of White, which the bank held, on condition that the bank would not deliver the 126 shares to the assignee, but would hold the same to enable Rhodehamel to prove his ownership of the stock in a pending chancery cause brought by the assignee in a state court; that to further protect the bank in carrying out this arrangement he put up 12 additional shares of Iron Works stock; that on the 19th of July, 1909, the assignee tendered to the bank the amount then due on White's note and demanded delivery of the stock to him, which the bank refused at the special instance and request of Rhodehamel; that the decree in the chancery cause on the 29th of April, 1911, awarded the 126 shares of stock to the assignee, and directed delivery of the same to him on payment of $12,246.87, which was the amount due on White's note when the assignee made the tender of July 19, 1909; that the bank complied with this decree, upon receipt of the sum named, on the 2d of May, 1911; that by reason of holding the stock under the agreement with Rhodehamel the bank had suffered a loss of interest in the sum of $1,565.55, for which it claimed a lien upon the 12 shares remaining in its hands; and that it has always been ready, upon the payment of this interest, to surrender Rhodehamel's note and the 12 shares of stock pledged by him as aforesaid.
It will thus be seen that the question of fact submitted to the jury was whether the bank actually sold to Rhodehamel in October, 1908, the 126 shares of stock which were then in its possession, or whether it merely agreed at his request, and in consideration of the security of his note and 12 additional shares, to hold the stock until the chancery suit was decided. On this issue the jury found for Rhodehamel, and the case comes here on assignments of error which will be briefly considered. The bank insists that Rhodehamel cannot maintain his action: (1) Because he waived his right to demand the stock; (2) because he had no title to the stock when the suit was brought; and (3) because the record in the chancery cause is res adjudicata in this action, and therefore the trial court should have directed a verdict in favor of the defendant.
The only basis for the first objection is Rhodehamel's answer, on November 9, 1908, to a letter from defendant's cashier, in which he says:
It is impossible to see in this answer any waiver of Rhodehamel's claim to be the owner of the stock. On the contrary, it asserts the purchase which he alleges and is entirely consistent with his contention. His assent to the note and collateral remaining in the bank did not modify his claim of ownership, or operate to waive his right to demand the stock upon payment of his note. The correspondence...
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...by it in a subsequent controversy between each other unless they were adversary parties in the original action. City Bank of Wheeling v. Rhodehamel, 4 Cir., 223 F. 979; Freeman on Judgments, 5 Ed. vol. 1, §§ 422-425, but there are exceptions to the rule, as where co-parties do in fact occup......
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