Sturges v. Keith

• Decision Date: 30 September 1870
• Parties: FRANK STURGES et al.v.SAMUEL L KEITH.
• Court: Illinois Supreme Court

57 Ill. 451

1870 WL 6653 (Ill.)

11 Am.Rep. 28

FRANK STURGES et al.

v.SAMUEL L KEITH.

Supreme Court of Illinois.

September Term, 1870.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Cook county; the Hon. ERASTUS S. WILLIAMS, Judge, presiding.

Messrs. WALKER & DEXTER, and Messrs. HIGGINS, SWETT & QUIGG, for the appellants.

Messrs. BECKWITH, AYER & KALES, for the appellee.

Mr. JUSTICE MCALLISTER delivered the opinion of the Court:

This was an action of trover, brought in the circuit court of Cook county, by appellee against appellants, to recover for the alleged wrongful conversion of 250 shares of the common stock of the Chicago & Alton Railroad Company.

It appears from the evidence, that, in May, 1864, the appellants, Frank Sturges, Albert Sturges, George Sturges, Buckingham Sturges and Shelton Sturges, were engaged as co-partners in the business of banking, under the firm name of Solomon Sturges' Sons; that the appellant William Sturges, was not a member of the firm, but a managing agent thereof; that appellee, being a customer of this banking house, and himself and partner being indebted to the same in the sum of about $13,000, upon a gold transaction, in the month of May aforesaid, brought to the bank certificates for 250 shares of the above mentioned stock, and by an arrangement conducted exclusively between him and William Sturges, the stock was left in the bank, but whether as security for the indebtedness of appellee and partner to this banking house, or merely for safe keeping, is a fact as to which the evidence of the parties is conflicting. It, however, does appear, that at the time of leaving the stock and closing the arrangement in reference to it, appellee executed a power of attorney to the Sturges last named, authorizing him to sell and transfer the stock, and there is nothing in this record which discloses that appellee ever attempted, by any express act of revocation, or by giving instructions inconsistent with such power of attorney, to revoke the same, until about the 22d day of March, 1866, when he caused a demand in writing, for the return of the stock to him, to be served upon said William, and in July next thereafter commenced this suit against all the parties above named, for the wrongful conversion of the stock.

It further appears, by the evidence in the case, that in September, 1864, Albert and Buckingham Sturges bought out the other members of the firm, the latter then retiring therefrom, and the former continuing the business. And also that in the latter part of January, 1865, William Sturges sold the stock in question; but it does not appear that any of the other defendants participated in the act, either by previous command or subsequent ratification, except the mere fact that the transaction was entered in the books of the firm, then composed of Albert and Buckingham Sturges only.

The court below instructed the jury, on behalf of appellee, that, “if the plaintiff was the owner of 250 shares of the stock of the Chicago & Alton Railway Co., and deposited the same with the agent of the defendants in the usual course of business, either as a special deposit for safe keeping, or as collateral security for an indebtedness, and such deposit was known to the defendants, the law implied a duty on their part to safely keep the stock; and if the jury further believe, from the evidence, that said stock has been wrongfully converted, then the defendants are liable in this action, and no one of the defendants can shield himself from liability by reason of his withdrawal from the firm after said stock was deposited with their agent.”

This instruction was wrong, and well calculated to mislead the jury. It is not only obnoxious to criticism, in that it did not require the jury to find that the stock was deposited with the agent of the defendants, as such, or on their behalf, but it is based upon a misconception of the law, both of bailment and partnership, as well as of the action of trover. The fair import of the instruction is, and the jury must have so understood it, that if the stock was left with the agent of the defendants as a special deposit, and they knew it, then they became so far insurers of its safety (though without compensation) that if it was afterwards wrongfully converted, no matter by whom or under what circumstances, still all of the members of the firm would be liable in trover, notwithstanding the dissolution of the firm before such conversion.

The difficulty with the proposition is, that if a sole party should, as a banker, receive stock or coin upon special deposit, and it should be embezzled by his own clerk or cashier, then, although that would be a wrongful conversion of the property, still it would not be the act of the banker, nor would he be liable for such conversion unless he participated in it, or was guilty of gross negligence. Story on Bailments, sec. 88. If a sole party would not be liable under the circumstances supposed by the instruction, then, of course, several would not.

After the most diligent and careful examination of this record, we are satisfied that no cause of action in trover was shown, as to part of the defendants, at least.

The only demand that was made, was upon William Sturges, in March, 1866. He was not a member of the firm, but an agent. The stock was left with him in May, 1864, and in September of the same year the firm was dissolved, Frank, George and Shelton retiring from it, and Albert and Buckingham Sturges continuing the business. From the time of the dissolution, William ceased to be the agent of the retired members of the firm.

The demand upon him, therefore, would not afford prima facie evidence of conversion, as against those who had withdrawn.

It has been held that, where bailees of goods are partners, a demand upon and refusal by one, would be regarded as prima facie evidence of conversion by all. Lloyd v. Bellis, 37 Eng. L. and Eq. 545; Holbrook et al. v. Wight, 24 Wend. 168.

This rule springs from the partnership relation, and not from that of mere joint bailees; because, although there may be a joint contract of bailment, yet, in the absence of the partnership relation, a demand upon and refusal by one bailee will not afford prima facie evidence of conversion against the others. Mitchell v. Williams, 4 Hill, R. 13; White v. Demary, 2 New Hamp. R. 546; 2 Greenl. Ev. sec. 644.

While the partnership exists, it speaks and acts only by its several members, and, of course, when that existence ceases by the dissolution of the firm, the act of the individual member ceases to have that effect. 1 Greenl. Ev. sec. 112; 3 Kent's Com. 63.

It follows, as a necessary consequence, that a refusal upon demand, by one of the members of a firm, after its dissolution, would not have the effect to bind the others. Pattee v. Gilmore et al. 18 New Hamp. R. 460.

So that if the demand had been made upon Albert and Buckingham Sturges in March, 1866, their refusal could have had no effect upon the others in charging them with a conversion, and much less would that of their agent.

If William Sturges had a power of attorney authorizing him to sell the stock, proof of the sale under it would rebut the prima facie case made by demand and refusal. It is true that it was not competent to prove the authority by parol. McKinney v. Leacock, 1 Serg. & R. 27; Hovey v. Deane, 13 Maine, 31; Dunlap's Paley on Ag. 310. The evidence was introduced on both sides without objection. Appellee was asked this question: “You did, then, execute a power of attorney, by authority of which he could sell the stock, could'nt he?” To which he answered: “Yes, sir, he could. I gave him the power.” And if, according to appellee's own theory, the stock was not left as a pledge, it is difficult to see how trover could be maintained. If the agent did not obey instructions, he might be liable upon a special count in case; but a conversion is a positive, tortious act. Mere non feasance, or neglect of some legal duty, will not suffice to support trover, although it may constitute sufficient ground to maintain an action on the case.

It does not appear that the power of attorney was produced on the trial. If it had been, parol evidence would not have been admissible to vary or contradict it. When the agency is created and conferred by a written instrument, the nature and extent of the authority must be ascertained from the instrument itself, and parol evidence is not admissible to vary or contradict it. Story on Ag. sec. 76.

Both parties treated it as if produced and subsisting at the time of the sale. If so, it would sustain a plea of leave and license, and the sale under it confer a good title upon the purchaser; which could not be the case, if William Sturges had no authority to sell, and the sale was a tortious act. Sarjeant v. Blunt, 16 Johns. R. 74.

It was a license given by the party, not by the law. Where a license is given by the law, and the person acting under color of such authority, abuse it, the authority is gone, and he is a trespasser ab initio. Not so, as to one acting under authority given by a party. In the latter case, the abuse of it does not avoid the authority, but affords ground for an action on the case for such abuse. The subsequent conduct of the party was relied upon as establishing want of authority. The sale in violation of instructions, the fraudulent concealment of the fact, and failure to account, if such were the fact, would constitute a breach of trust, but would not avoid the power of attorney, if not revoked, and this record fails to show any attempt to revoke it until the demand made upon William Sturges, in March, 1866. Neither this demand and refusal, nor the misconduct of William Sturges subsequent to the sale, though with the privity and consent of his principals, Albert and Buckingham Sturges, could afford the slightest evidence of a wrongful conversion, against the retired partners. Weymouth v. Boyer, 1 Vesey, 424; Palmer v. Jermaine, 2...