Daniel v. Post

The opinion of the Court was delivered by Mr. Justice Baker. This is an appeal from order of Hon. A. L. Gaston, Circuit Judge, overruling in part motion of defendants-appellants, Post & Flagg, to strike out certain allegations of the complaint; overruling demurrer to the complaint on the ground that two alleged causes of action were improperly united; and overruling motion to make complaint more definite and certain. The plaintiff-respondent, Daniel, has also appealed from order of Judge Gaston striking out a portion of the complaint. Pleadings should be construed liberally as against the moving party, and we will first consider the nature of this action. A careful reading of the complaint, which will be reported, shows that it is an action in tort for conversion, and not an action on contract as it has been treated throughout by defendants-appellants. It is true that plaintiff-respondent could have brought an action on contract, but he has elected to bring it in tort. The defendants-appellants have not the right to elect. It is true that the expletives “fraudulently,” “wantonly,” and like words add nothing to the complaint, but, freed of all unnecessary verbiage, the complaint alleges that respondent bought through one A. S. Thomas, who acted generally as the agent of Post & Flagg, his co-defendants, various stocks, paying a portion of the purchase price in cash, and leaving with the defendants said stocks as collateral for the balance due thereon, and that at some time unknown to plaintiff, and without his knowledge or consent, defendants converted plaintiff’s stocks to their own use, specifically setting forth that the stocks converted consisted of 600 shares A. F. W. and 200 shares of C. V. *473 In Sullivan v. Calhoun et al., 117 S. C., 137, 108 S. E., 189, Mr. Chief Justice Gary, writing the opinion of the Court, said: “It is not necessary to allege fraud in direct terms; it being sufficient if the facts are stated from which it is necessarily implied.” And in the same case there is quoted with approval from 12 R. C. R., 229, the following: “Fraud assumes so many hues and forms, that Courts are compelled to content themselves with comparatively few general rules for its discovery and defeat, and allow the facts and circumstances peculiar to each case to bear heavily upon the conscience and judgment of the Court or jury in determining its presence or absence. While it has often been said that fraud cannot be precisely defined, the books contain many definitions, such as unfair dealing; the unlawful appropriation of another’s property by design.” To maintain trover against a pledgee, bailee, or trustee, the agreement must be such that the property is to be kept in its original form as the identical property of the owner. See Randolph & Co. v. Walker, 78 S. C., 157, 59 S. E., 856. Where personal property has been converted and sold, and action lies either for damages for the conversion or for the recovery of the proceeds of sale, the first being trover and the second assumpsit for money had and received. Warren v. Lagrone, 12 S. C., 45. It is well-settled law in this State that trover lies for conversion of stock. See Connor v. Hillier, 11 Rich. (45 S. C. L.), 193, 73 Am. Dec., 105; Equitable Trust Co. v. Columbia National Bank, 145 S. C., 91, 126, 142 S. E., 811. Unauthorized disposition of pledged property is a conversion. 49 C. J., 950. The cases cited by appellants correctly state the law as a general rule, but this case is governed by the law as stated in Tolbert v. Fouche, 129 S. C., 338, 123 S. E., 859, syllabus 2 of said case, which is fully warranted by the opinion, being as follows: *474 “2, Pledges — When Disposition of Pledged Property Amounts to Conversion, Stated. — Wrongful, unauthorized disposition of pledged property, so as to put it out of pledgee’s power to redeliver on payment of debt which it secures, is a conversion for which an action will lie.” Defendants-appellants have assumed that this is an action on contract and that the allegations of the complaint are insufficient to raise the issue of punitive damages. And have further assumed that it was a margin transaction. A liberal construction of the complaint shows it to be an action in tort for conversion, and sufficient facts have been alleged to evidence a fraudulent conversion, for which punitive damages would be recoverable. It would also appear from the complaint that the purchase of the stock was outright, but, of course, upon a trial of the case, it may develop that it was a margin transaction. In the action as brought, there can be no question of electing against whom to proceed, where it is alleged that all defendants participated; and there is no mis-joinder if the defendants are joint tort-feasors. There is merit in appellants’ specification (b) of Exception 5, which is as follows: “In Failing to Hold the Complaint Should Be Made More Definite and Certain. “(b) Also to know who received the payment on accont of the stocks, who gave receipts and who received orders for sale of the stocks, and when and where.” It is very material for appellants to know to whom plaintiff made payments of money, and who issued to him receipts therefor. Appellants would then be in a position to admit or deny liability on account thereof. This exception is therefore sustained. Let the respondent serve on appellants or their attorney of record, within 20 days from notice of the filing of the remittitur herein, an amended complaint, giving this information, and appellants will have 20 days in which to answer. *475 All other exceptions on behalf of defendants-appellants have been considered and are overruled. Plaintiff-respondent has also appealed from order of the Circuit Judge in striking out Paragraph 2 of the complaint. We have held that this is an action in tort for the conversion of stocks. The rules of the New York Stock Exchange could not possibly have any relevancy, and this exception is overruled. Case remanded for such further procedure as is indicated by this opinion. MR. Chief Justice Stabler and Mr.. Justice Fish-burNE concur. Mr. Justice Bonham dissents.