Marchant v. Moore

• Decision Date: 06 October 1896
• Citation: 44 N.E. 770,150 N.Y. 209
• Parties: LE MARCHANT et al. v. MOORE et al.
• Court: New York Court of Appeals Court of Appeals

150 N.Y. 209

44 N.E. 770

LE MARCHANT et al.

v.MOORE et al.

Court of Appeals of New York.

Oct. 6, 1896.

Appeal from supreme court, general term, First department.

Controversy between Francis Charles Le Marchant and others, composing the firm of H. S. Lefevre & Co., and John g. Moore and another, composing the firm of Moore & Schley. From a judgment of the general term (29 N. Y. Supp. 484) entered on a submission of the controversy pursuant to Code Civ. Proc., § 1279, awarding plaintiffs a certain sum with interest, both parties appeal. Affirmed.

Charles W. Pierson, for plaintiffs.

George Hoadly, for defendants.

HAIGHT, J.

The plaintiffs were co-partners, doing business in London, England, under the firm name of H. S. Lefevre & Co. Irving A. Evans & Co. were bankers and brokers, doing business in Boston, Mass. The defendants, Moore & Schley, were engaged in the business of bankers and stock brokers in the city of New York. Evans & Co. and Moore & Schley were correspondents of each other, and purchased stocks for each other, both on their own account and that of their customers. On the 25th day of September, 1891, the plaintiffs cabled Evans & Co. to buy for them 200 shares of the capital stock of the St. Paul, Minneapolis & Manitoba Railway Company, at 109. The plaintiffs had an account with Evans & Co., with an amount to their credit more than sufficient to pay for the stock. Evans & Co. thereupon ordered the defendants to buy the stock, and they made the purchase on the 28th day of September, at the price named, notified Evans & Co. of the purchase, and charged the same upon their books to the account of Evans & Co. In making the order for the purchase, the names of the plaintiffs were not disclosed to the defendants. At that time Evans & Co. had an account with the defendants, with an amount to their credit, but not sufficient to pay for the stock in full, and the defendants retained the stock as collateral security for the balance then due on their general account. Evans & Co., after receiving notice from the defendants of the purchase of the stock, on the same day cabled the plaintiffs that they had purchased the stock at the price named, and thereupon the plaintiffs cabled Evans & Co. to mail the stock to them as soon as registered in 10-share certificates. On the 1st day of October Evans & Co. cabled the plaintiffs that the transfer books of the company would not be opened until the 12th proximo, and asked if they should ‘transfer them,’ to which the plaintiffs replied, ‘Yes.’ On the 22d of October Evans & Co. wired the defendants to deliver to the Bank of British North America 100 shares of the stock, to be held for H. S. Lefevre & Co., of London, and the defendants, pursuant to such instructions, delivered 100 shares of the stock to that bank to the credit of the plaintiffs, thus leaving in their hands, undelivered, 100 shares of the stock. Onthe 24th of October Evans & Co. made a general assignment for the benefit of creditors. at that time the plaintiffs were ignorant of the fact that [150 N.Y. 214]100 shares of the stock were in the hands of the defendants, and the defendants were unaware of the claim of the plaintiffs to the stock. On the 27th the plaintiffs ascertained the facts, and caused their representative to call upon the defendants, who stated that the plaintiffs were the owners of the 100 shares of stock in question, and inquired whether the defendants would deliver the stock to them, and requested information with regard to any charges or claims which the defendants might have against the stock, and requested that in any sale of collaterals which the defendants might make for account of Evans & Co. they should not sell the stock in question until the last of the stock held by them as collateral, and that they should give the plaintiffs notice of the time and place of such sale, and should account to them for the proceeds thereof. The defendants declined to deliver the stock to the plaintiffs, and declined to impart any information or make any statement upon the subject. Thereupon the plaintiffs caused a notice in writing to be served upon the defendants, of which the following is a copy: ‘New York, October 28th, 1891. Messrs. Moore & Schley, New York City-Gentlemen: We hereby notify you that we claim, as agents of our clients, Messrs. H. S. Lefevre & Company, one hundred shares of St. Paul, Minneapolis & Manitoba Railway stock, * * * held by you subject to instructions from I. A. Evans & Company. Yours, respectuflly, Kidder, Peabody & Co., by Baring, Magoun & Co., Attys., Agents for H. S. Lefevre & Co.’ The defendants made no response to the notice, and have never recognized the plaintiffs' claim to the stock, but, without notice to the plaintiffs, proceeded, under instructions from the assignee of Evans & Co., to sell the securities held by them, and apply the proceeds in settlement of the indebtedness of Evans & Co. to them. The stock in question was sold last, and, after canceling the remaining indebtedness of Evans & Co., produced a balance of $5,324.66, which balance, together with 25 shares of Ensley Land and 1,100 shares of Boston Air Line stock, of the value of $1,100, they turned over to the assignee of Evans & Co. On the 1st day of June, 1892, the plaintiffs, with full knowledge of all the facts, filed proofs of their claim against the insolvent firm of Evans & Co. in the court of insolvency of Massachusetts, except as to the aforesaid sum of $5,324.66.

The pivotal question upon which the rights of the parties depend is that of the ownership of the stock in question. The transaction, in its essential features, is not different from numerous others of daily occurrence. The chief market for corporate stocks is in the city of New York. It is the common practice of persons desiring to purchase or deal in stocks in other parts of the country to go to their banker and make their order, who makes the purchase or sale, as the case may be, through his correspondent in that city. That is what was done in this case. Lefevre & Co. ordered Evans & Co., their bankers in Boston, to purchase the stock in question. Evans & Co. might have refused compliance with the order. Had they done so, that would have been an end of the transaction; but, as soon as they complied with the order, made the purchase, and notified the plaintiffs of such purchase, the transaction was then completed, so far as the title to the stock was concerned. The plaintiffs could not thereafter repudiate the purchase or refuse to accept the stock. Neither could Evans & Co. disaffirm and retain the stock as their own. The rights of the parties, so far as the title was concerned, then became fixed, independent of the question of payment. If the stock had not been paid for, Evans & Co. doubtless would be entitled to hold it as pledgee until payment was made; but, inasmuch as the plaintiffs had to their credit with Evans & Co. more than sufficient to pay for...