Crosby v. Paine

• Decision Date: 21 January 1927
• Docket Number: No. 25700.,25700.
• Citation: 211 N.W. 947,170 Minn. 43
• Parties: CROSBY v. PAINE et al.
• Court: Minnesota Supreme Court

211 N.W. 947

170 Minn. 43

CROSBY v. PAINE et al.

No. 25700.

Supreme Court of Minnesota.

January 21, 1927.

Appeal from District Court, Ramsey County; John W. Boerner, Judge.

Action by S. P. Crosby against William A. Paine and others. After a verdict for defendants, plaintiff appeals from an order denying his alternative motion for judgment or a new trial. Affirmed.

George G. Chapin and Frederick N. Dickson, both of St. Paul, for appellant.

Selover, Schultz, Mansfield & Bryan, of Minneapolis, for respondent.

TAYLOR, C.

Action to recover the value of six bonds or certificates of stock in a loan, each for the sum of 1,000 pounds sterling, issued by the government of Brazil, and alleged to have been wrongfully converted to their own use by defendants. The jury found for defendants, and plaintiff appealed from an order denying his alternative motion for judgment or a new trial.

On February 9, 1922, plaintiff was the owner of the bonds in controversy, having purchased them some months before from Stevens & Co., a corporation dealing in bonds and other securities. Plaintiff was a stockholder in that company. On February 9, 1922, Stevens & Co. asked plaintiff to loan them these bonds, representing that they had a customer for 6,000 pounds of Brazilian bonds the same as his, and that they had other bonds of the same nature and denomination on the road, and would return them to him in a few days. Plaintiff consented and gave them the bonds. Whether they had a customer for such bonds does not appear, but the probabilities are that they did not. In any event, on the same day on which they obtained the bonds, they took them to the office of defendants, who are large dealers in bonds and securities, and sold them to defendants for the sum of $13,875, the market price for such bonds on that date. They failed to return these or similar bonds to plaintiff as agreed, and on his demand for their return gave him bonds issued by a cattle company of Montana as security therefor. Shortly thereafter they were adjudged bankrupt. From cases reaching this court, it appears that they had engaged in many fraudulent transactions and practices about the time of these transactions. It turned out that the bonds given plaintiff as security did not belong to them, and plaintiff was forced to surrender these bonds to the owners. Learning that the bonds obtained from him had been sold to defendants, plaintiff brought this action.

At the trial plaintiff claimed that the bonds were delivered to Stevens & Co. merely for the purpose of being exhibited to a customer, and were to be returned to him. Defendants claimed that they were given to Stevens & Co. to be sold and delivered to a customer of that company, and were to be replaced by other bonds of like tenor and denomination when such other bonds arrived.

The court instructed the jury to the effect that, if the bonds were delivered to Stevens & Co. for the purpose of being exhibited to a customer, and with the understanding that they were to be returned to plaintiff, plaintiff would be entitled to a verdict; but, if they were delivered to Stevens & Co. for the purpose of being sold to a customer, and with the understanding that other similar bonds were to be returned to plaintiff, defendants would be entitled to a verdict. The verdict establishes as a fact that the bonds were delivered to Stevens & Co. for the purpose of being sold to a customer of that company, and with the understanding that other similar bonds were to be returned to plaintiff. The transactions on the part of Stevens & Co., involved herein, were conducted by the two managing officers of that company, but for convenience we shall use the name Stevens & Co. in referring to their doings.

Defendants insisted, and still insist, that the bonds were negotiable instruments. Plaintiff insisted, and still insists, that they were not. The court charged the jury that they were nonnegotiable; and, for present purposes, we shall assume, without deciding, that this instruction was correct.

Plaintiff contends that the acts of Stevens & Co. in obtaining and selling these bonds constituted common-law larceny; that defendants could acquire no title from or through them for that reason; and that he is entitled to recover under the rule which permits the owner to pursue and reclaim stolen property, other than negotiable paper, wherever he may find it.

We cannot sustain the contention that the acts of Stevens & Co. constituted common-law larceny as distinguished from the crime of obtaining property by false pretenses. Where the wrongdoer, by fraud, induces the owner to part with the possession, but not with the title to his property, and thereafter feloniously disposes of it, he is guilty of common-law larceny; but, where he induces the owner, by fraud, to part voluntarily with both possession and title, he is not guilty of larceny, but of obtaining property by false pretenses. The distinguishing element between the two is whether the owner intended to part with possession only, or expected and intended to part with both possession and title. This distinction is recognized by an almost unbroken line of authorities. 18 Am. & Eng. Enc. (2d Ed.) p. 469, states:

"It is well settled that a taking within the definition of larceny occurs where a person, by means of some fraud or trick, and with intent to steal, procures the delivery of goods to him by the owner, * * * unless the delivery is made for the purpose of passing the property or title in the goods as well as the possession."

The same volume, at page 481, states:

"If the owner of goods, intending to...