Furber v. Dane

• Decision Date: 10 January 1910
• Citation: 204 Mass. 412,90 N.E. 859
• Parties: FURBER v. DANE et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

204 Mass. 412

90 N.E. 859

FURBER v. DANE et al.

Supreme Judicial Court of Massachusetts, Suffolk.

January 10, 1910

COUNSEL

Hollis R. Bailey and Hartley F. Atwood, for plaintiff.

Robt. G. Dodge, for defendants.

OPINION

SHELDON J.

In our opinion it must now be taken that the plaintiff, by his failure to present promptly for payment the check which he received from Dane, Smith & Co., has not waived any equitable rights which he had to charge the balance of their bank account with the payment to his demand. As was intimated in the former decision of this case (203 Mass. 108, 112, 113, 89 N.E. 227), the issue is not whether he had discharged any of the parties to that check. No question was or is made but that he still can hold the insolvent firm as his debtors. But it was considered, upon the facts then appearing, that by his conduct he had manifested an election to stand upon the check and not to claim any equitable right as the holder of a fiduciary claim to trace his money and charge for his payment the fund of which it had been made a part. Upon the facts as they now appear, this inference cannot be drawn. He was confined to his house by illness during the whole of the last day for the presentment of the check; he did not know of the embarrassed condition of the firm, or that its assignment was contemplated, until after it had been made. His inaction was involuntary, and he did not know of any special exigency for prompt action. Under these circumstances, he cannot be deemed to have waived any rights. The case is analogous to those cases in which it has been held that a primary resort to a mistaken remedy does not necessarily amount to a decisive election. Peters v. Ballister, 3 Pick. 495, 505; Butler v. Hildreth, 5 Metc. 49, 52; Snow v Alley, 156 Mass. 193, 30 N.E. 691; Doucette v Baldwin, 194 Mass. 131, 135, 80 N.E. 444; Furber v Dane, 203 Mass. 120, 121, 89 N.E. 227.

It must be determined, then, whether there was a relation of trust between the firm and the plaintiff, or whether they stood towards each other merely in the relation of debtor and creditor.

The firm were stockbrokers; the plaintiff was one of their employés. But their relation of employer and employé is immaterial here. He owned certain shares of stock and put them in the hands of the firm to sell for him. The firm sold the stock, received the proceeds, deposited them to its own bank account, and gave to the plaintiff a check for the amount thereof less its commission. The whole transaction was in the usual course of business, differing in no respect from any case in which commission merchants or factors sell property for their customers or consignors, receive payment therefor, mingle the amount so received with their own funds, and give their own checks to their customers for the net proceeds of their respective goods, after deduction of commissions and any expenses which may have been incurred. Except perhaps in the case of running accounts and marginal transactions, with which we are not here concerned, we see no difference between stockbrokers and any other commission merchants. Both buy and sell for their customers; both ordinarily deal in their own names; both, subject to certain limitations, deal with the property and the proceeds of the property put into their hands as if it were their own; both of them in the established course of business have the right, at least unless the owner of the property seasonably intervenes, to receive the price of their sales and to deal with it as if it were their own money, accounting to their customers for such amounts as respectively become due to them. But it is settled in this commonwealth that the relation between such commission merchants or brokers and their customers is, in the absence of special circumstances, merely that of debtor and creditor, and not a fiduciary relation. Such a factor or broker, as was said by Merrick, J., in Vail v. Durant, 7 Allen, 408, 410, 83 Am. Dec. 695, 'does not and is not required to keep the money received upon the sale of goods of different consignors in separate and distinct parcels, but mingles all in a common mass and with the like funds of his own, from whatever source derived. In such case he becomes at once a debtor to his principal and is liable to an action for the balance shown to be due by his account of sales, immediately after its rendition, and without any previous demand.' Com. v. Stearns, 2 Metc. 343, 348; Hayman v. Pond, 7 Metc. 328; Com. v. Libbey, 11 Metc. 64, 45 Am. Dec. 185; Wolcott v. Hodge, 15 Gray, 547, 77 Am. Dec. 381; Halpine v. May, 100 Mass. 498; Woodward v. Towne, 127 Mass. 41, 34 Am. Rep. 337; Rice v. Winslow, 180 Mass. 500, 506, 62 N.E. 1057; Brown v. Corey, 191 Mass. 189, 77 N.E. 838; Chapman v. Forsyth, 2 How. 202, 11 L.Ed. 236; Gaylord, In re (D. C.) 113 F. 131. Under the rule adopted in this commonwealth it cannot be said that the character of the transaction between the plaintiff and the firm was such as to create any fiduciary relation between them or to give to the plaintiff any other or greater rights than those of a general creditor. It is fairly to be inferred from the agreed facts and the evidence that the plaintiff assented to the course of dealing which was adopted and to the establishment thereby of the relation of debtor and creditor between the firm and himself, instead of requiring the specific proceeds of his stock to be paid to him as he might have done. The English cases to which we have been referred, in which it has been either stated or assumed that a trust relation exists between a stockbroker and his customers, have not been followed in this commonwealth.

The decision in Com. v. Moore, 166 Mass. 513, 44 N.E 612, turned upon the fact that the money there in question was collected by the Globe Investment Company from the debtor of its customer by virtue of a special contract with the customer to pay...