Duffield v. Miller

Mr. Justice Paxson delivered the opinion of the court, January 5th 1880. The defendant’s first point goes to the bottom of this case. It denies the right of the plaintiff to recover in this form of action. The court below denied the point as applied to the facts, and ruled that the plaintiff had a right to sue in trover. The action was brought to recover damages for the conversion of $9000 of United States bonds. The defendant Duffield was the cashier of the Titusville Savings Bank, an unincorporated association. The other defendants were shareholders. The plaintiff had made a special deposit of the bonds in question with the bank. The latter, becoming embarrassed, entered into negotiations with the plaintiff for the use of his bonds to assist it in raising money which resulted in the following agreement: “ Titusville, Pa., October 10th 1878. Received from Robert Miller nine thousand dollars in United States bonds, which we hereby agree to return to the said Miller within sixty days from this date.* And we hereby jointly and severally bind ourselves for the faithful performance of this agreement. Witness our hands and seals.” This agreement was signed by each of the defendants. The defendant Duffield took the bonds to New York and deposited them with the Importers’ and Traders’ Bank as collateral, in consideration of which the latter bank allowed the Titusville Bank to overdraw its account to the value of the bonds. The account not being made good, the Importers’ and Traders’ Bank sold the bonds and credited the Titusville Bank with the proceeds. The defendants having failed to return the bonds, as specified in the agreement, the plaintiff brought this action of trover to recover damages for their conversion. It is not denied that the defendants borrowed these bonds for the very purpose of using them as collateral to raise money. The plaintiff says in his testimony : “ The bank had suspended when they got the bonds. They got them to raise money. They said they wanted the bonds to hypothecate; to put them up and get money.” It thus appears, from the plaintiff’s own showing, that the defendants were authorized to do just what they did, that is, to hypothecate the bonds for the purpose of raising money. They did not sell them, nor authorize their sale by the New York bank [289] further than an authority to sell may be implied from the pledge itself. There was, therefore, no breach of trust in the case, nor any tortious act committed by the defendants, unless the failure to redeem and l'eturn the bonds can be so considered. We do not so regard it. When the plaintiff authorized the managers of a failing bank to use his bonds to raise money, he must have known that it might not be in their power to return them. At any rate there was a risk, and he assumed it. Having been pledged by his authority, the pledgee has a right to sell for non-payment of the money borrowed, and such sale passed the title. At the time this suit was brought the bonds had been sold, and the plaintiff’s rights divested. He owned nothing that could be the subject of an action of trover. All that ivas left him was a right of action upon his agreement. It is well settled that to maintain trover the plaintiff must have a property in the chattel, general or special, and the actual possession or the right to immediate possession: Mather v. Trinity Church, 3 S. & R. 509; Castor v. McShaffery, 12 Wright 437; 1 Chitty on Pleading 148, and cases there cited. As what has been said is decisive of the ease it is unnecessary to discuss the remaining assignments of error. Judgment reversed.