Hyams v. Bamberger

• Decision Date: 22 March 1894
• Docket Number: 431
• Court: Utah Supreme Court
• Parties: LOUIS HYAMS and JOHN A. ERWIN, APPELLANTS, v. SIMON BAMBERGER and O. J. SALISBURY, RESPONDENTS

36 P. 202

10 Utah 3

LOUIS HYAMS and JOHN A. ERWIN, APPELLANTS, v. SIMON BAMBERGER and O. J. SALISBURY, RESPONDENTS

No. 431

Supreme Court of Utah

March 22, 1894

APPEAL from the district court of the third judicial district, Hon Chas. S. Zane, Judge.

Action by Louis Hyams and John A. Erwin against Simon Bamberger and O. J. Salisbury to recover $ 15,291.61 damages, for the alleged conversion of certain pledged notes and stock. Tried before T. J. Anderson, referee, who found that plaintiffs were entitled to a judgment for only $ 252.00, and that defendants were entitled to their costs. The report of the referee was confirmed and judgment entered accordingly. From the judgment and from the order overruling the motion for a new trial, plaintiffs appeal.

To the facts stated in the opinion, the following may be added:

Plaintiffs borrowed $ 8,000 from defendants, and executed and delivered to defendant Salisbury their two notes of $ 4,000 each, which fell due on the 11th day of November, 1891, upon which was due on the 18th day of November, 1891, the sum of $ 8,748. At the time of making and delivering the notes to Salisbury plaintiffs endorsed and delivered to Salisbury, as collateral security to the joint loan of Salisbury and Bamberger, three certain promissory notes of John Beck, aggregating the sum of $ 14,719, secured by 2,000 shares of stock of the Bullion-Beck & Champion Mining Co. Plaintiffs' notes fell due on the 11th day of November, 1891, and no extension of time was granted by Salisbury for payment. On the 16th day of November, 1891, Salisbury, by his agent, gave notice to the plaintiffs that he would sell the Beck notes and stock securing the same on the 18th day of November, 1891, at 10 o'clock A. M. of said day, at room 30, Hooper block, Salt Lake City, Utah, and upon the 17th day of November, 1891 left similar notices with the banking institutions of Salt Lake City. On the 18th day of November, 1891, at 11 o'clock A. M., Salisbury, through his agent, sold the Beck notes and mining stock securing the same at the place designated in the said notices and in pursuance thereof, and receiving no bids for the Beck notes separately, offered the three notes together, and the defendant Simon Bamberger bid the sum of $ 9,000. Bamberger purchased the notes for himself and his co-defendant, Salisbury. On the same day Salisbury served a statement on the plaintiffs, showing that after deducting the amount due on plaintiffs' notes, $ 8,748, from the amount received for the sale of the Beck notes and stock, $ 9,000, there was a surplus of $ 252, which he thereupon tendered; that plaintiffs refused the same. Upon the 18th day of November, 1891, after the sale of the Beck notes and stock, plaintiffs made a tender in writing to defendants of $ 8,748 for the purpose of redeeming the Beck notes and stock deposited as collateral security to their own two notes of $ 4,000 each; that defendants refused the offer; that on the 19th day of November, 1891, plaintiffs, by their attorneys, served a notice upon the defendants that they elected to treat the sale of the Beck notes and stock as a conversion of the same, and on the same day brought this action.

Reversed and remanded.

Messrs. Jones & Schroeder, for appellants.

The value of the Beck notes at the date of conversion depended not upon the opinion of witnesses as to their value, but upon the fact whether or not at said date Beck was solvent or insolvent, his honesty, integrity and willingness to pay. Patten v. Merchants' Bank, 28 N.Y. 641; Rose v. Lewis, 10 Mich. 483; Whitten v. Wright, 34 Mich. 92. The law presumes the solvency of every man until the contrary is proved by positive testimony. St. John v. O'Connell, 7 Porter (Ala.), 466; Latham v. Brown, 16 Iowa 118; Robbins v. Packard, 31 Vt. 570; Am. Ex. Co. v. Parsons, 44 Ill. 317; Jones on Pledges, § 652. Plaintiffs had indorsed the Beck notes and were liable thereon for their face value. Decker v. Mathews, 12 N.Y. 313; Robbins v. Packard, 31 Vt. 569; Thayer v. Manley, 73 N.Y. 305. A tender of the whole amount of the debt secured, discharges the lien of the pledge and pledgee is liable in damages for the full value of the property without any abatement. Jones on Pledges, § 543; Ball v. Stanley, 5 Yerger, 196; Mitchell v. Roberts, 17 F. 776; 1 Suth. Dam. (2 ed.) 277. An offer to return the goods after conversion is of no avail. 3 Suth. Dam. 529; Norman v. Rogers, 29 Ark. 369; Savidge v. Perkins, 11 How. Pr. 23; Haumer v. Wilsey, 17 Wend. 721. The court erred in allowing defendants judgment for costs, as they did not deposit the amount tendered with the court. 2 Comp. Laws 1888, § 3692.

Messrs. Rawlins & Critchlow, for respondents.

The true value of the depreciated stocks and notes is their cash value in the market at the time of the transfer. Bank v. Donaldson, 16 Pa. St. 179. Damages in trover are assessed on equitable principles, and defendants should be allowed to abate or recoup to the amount of the debt due them from plaintiffs on their notes. 3 Suth. Dam. 527; Fisher v. Brown, 104 Mass. 259; Wheeler v. Pereles, 43 Wis. 332. The contention that a tender of the whole amount of the debt secured, if refused, discharges the lien, follows only on a tender good in every particular, made on the very day when it should have been made, the law day. Jones on Pledges, 542-545; Perre v. Castro, 14 Cal. 530; Himmelmann v. Fitzpatrick, 50 Cal. 650; Jones on Mortgages, §§ 891-2 and 3.

BARTCH, J. SMITH and MINER, JJ., concur.

OPINION

BARTCH, J.:

This is an action in trover to recover damages for the wrongful conversion of three promissory notes, secured by 2,000 shares of stock of the Bullion-Beck & Champion Mining Co. The notes were made by John Beck in favor of the plaintiff Hyams. The plaintiffs, in substance, allege that they were the owners of the notes on the 18th day of November, 1891; that two of them were for $ 5,000 each, and one for $ 4,719.20, bearing interest at 7 per centum per annum, and secured by the 2,000 shares of stock which were in escrow in the State Bank of Utah, to be sold at the request of the legal holder upon default in payment being made; that they were entitled to the immediate possession of the notes and stock; that on the said day the defendants, being in possession of the same, unlawfully disposed of and converted the notes and stock to their own use, to the plaintiffs' damage in the sum of $ 15,291.61. The defendants deny the allegations of the complaint, and, in substance, aver that on the 11th day of May, 1891, the plaintiffs made and delivered to the defendant Salisbury two notes, each for the sum of $ 4,000, due November 11, 1891, and, as security for the same, delivered the Beck notes and stock mentioned in the complaint; that each of the notes of plaintiffs expressed, upon its face, that the collateral security was deposited with defendant Salisbury, with authority to sell the same at public or private sale, at his option, and without notice or demand, on default in the payment of plaintiffs' notes; that any surplus arising from such sale should be returned to plaintiffs; that the plaintiffs refused and neglected to pay their notes at maturity, which was on the 11th day of November, 1891; that on the 10th day of November, 1891, defendant Salisbury served notice upon the plaintiffs and the various banks and financial institutions of Salt Lake City that he would sell the securities at 11 o'clock in the forenoon of the 18th day of November, 1891, designating the place of sale; that at the time and place designated in the notice he caused the securities to be sold; that the securities were sold at public vendue to defendant Bamberger for $ 9,000, he being the highest bidder, and the purchase being made jointly for himself and defendant Salisbury; that the amount due the defendants on plaintiffs' notes was $ 8,748; that thereupon the balance of the purchase price, with plaintiffs' notes, was tendered to them, and acceptance thereof refused; that the sale was fairly made, and the price received was the full cash value of the securities; and that thereby they became the owners of the securities, and were ready and willing to deliver to the plaintiffs the balance of the purchase price, and their notes.

It appears from the evidence that the transactions between the plaintiffs and defendants in relation to the making of the notes, delivery of the securities, default in payment, sale of the securities, and tender of the balance and notes, occurred substantially as alleged in the answer. It further appears from the evidence and stipulation of counsel that, on the day previous to the date of maturity of plaintiffs' notes, defendant Bamberger informed plaintiff Hyams that he must have the money when due, and a few days afterwards defendant Salisbury also insisted on payment; that notice of sale was served on the plaintiffs on the 10th, and the securities sold on the 18th, of November, 1891; and that, after the sale had taken place, plaintiffs offered, in writing, the amount of their notes to the defendants for the purpose of redeeming the securities, but offered no money. The evidence is conflicting on the question of the refusal of the tender. The plaintiffs' testimony tends to show it to have been a positive, and that of the defendants a conditional, refusal; the defendants taking time for consideration, there being no money in sight. It is clearly shown, however, that on the next day the defendants gave notice of acceptance, and again on the following day, each notice of acceptance being coupled with the proviso that the money be paid within the next banking day; and that to all of which notices the plaintiffs paid no attention.

The case was tried before a referee, who found, substantially the...