Blood v. Erie Dime Savings & Loan Co.

Opinion by Mb. Chief Justice Stebbett, In view of the able and exhaustive report of the learned master, special reference to the general facts of this case is deemed unnecessary. We shall therefore confine ourselves, as far as possible, to such of his findings of fact and conclusions of law as are of controlling importance and appear to have been fully warranted by the proofs, etc. When plaintiff’s husband died, December 31, 1891, he was indebted to defendant in the sum of $54,227.12, no part of which was due, except possibly an overdraft of $125.72. As collateral security for said indebtedness, defendant held certain stocks, which had been deposited by plaintiff’s husband, of the face value of $215,440, including 593 shares of the Carbon Manufacturing Co. Limited, the par value of which was $100 per share. Of these stocks, specified in the third paragraph of the master’s findings of fact,,the “ Crew Levick Co.,” $100,000, proved to be forged. The actual value of the “Sterling,” and the “ Muir ” Oil Company stocks was not shown. The Carbon Manufacturing Company stock was delivered to the defendant March 21, 1891, and receipted for as follows : “ Received from A. R. Blood stock certificate No. 6 for 593 shares of paid up stock in the Carbon Manufacturing Co. Ltd. of Warren, Pa., to be held as collateral security for the payment of any notes, drafts, bills or other obligations, discounted or held by the bank against said Blood.” — 104 — On December 31,1891, an agreement was entered into between plaintiff and defendant by which the former was to pay, on account of said indebtedness, $30,000 of her individual funds, and also $8,000 which she expected to receive from Mr. McDade on or about April 1,1892, in pursuance of an arrangement made with him for dissolution of said Carbon Manufacturing Co. Ltd., as stated in the master’s fourth finding of fact; and, in consideration thereof, the defendant agreed to extend payment of the residue of said indebtedness “ a reasonable length of time upon furnishing approved security.” On February 3, 1892, plaintiff paid defendant the $30,000 from money received by her from the Traveller’s Insurance Co. In connection therewith, defendant surrendered to her the Sterling Oil Co. stock, Muir Oil Co. stock and the Crew Levick Co- stock aforesaid. No demand was then made for the surrender of the Carbon Manufacturing Co. Ltd. stock, but plaintiff’s agent did ask that the Danforth drafts, to the amount of $30,000, should be surrendered, which defendant’s treasurer and agent agreed to do two or three days later, when he should have computed the accrued interest thereon, but he subsequently refused to surrender the drafts or any part of them until all were paid. On March 1, 1892, defendant refused to surrender to plaintiff the stock held by it, or to enter into any arrangement with her by which said Carbon Manufacturing Co. Ltd. could be dissolved and the agreement between her and McDade carried out, unless an alleged debt of $5,088.94, from plaintiff’s husband to F. F. Curtze, defendant’s treasurer, was included in the amount to be secured. This demand was wholly unjust and unwarranted, but it was persisted in by defendant, and plaintiff was thus prevented from carrying out her agreement with McDade, which she could have done but for the bad faith and unjustifiable conduct of defendant and its agent Curtze. On April 5, 1892, the defendant advertised the said 593 shares of the Carbon Manufacturing Co., Ltd., for sale at public auction on the 23d of April, 1892, for payment of balance of the indebtedness aforesaid, claiming that the same amounted to $30,189.44. This sum included the unfounded claim of said Curtze which had been assigned by him to the bank. On or prior to April 12, 1892, plaintiff’s agent called on defendant to ascertain whether payment of the balance of said indebt — 105 — edness—less the Curtze claim—would be accepted and the stock surrendered ; but the defendant, as it had theretofore persistently done, declined to consider any proposition that did not include the Curtze claim. On April 22,1892, plaintiff filed her bill to enjoin the proposed sale, but her prayer for an injunction was denied; and, pursuant to the published notice, the stock was sold and bid in for defendant, by an authorized agent, for $24,718.25, the balance claimed to be due it, not including the Curtze claim. Of the stock thus bid in by the defendant, through its authorized agent, Davenport Galbraith, 174 shares were afterwards purchased by said McDade and 105 shares by said Curtze. . In his fifth, sixth and seventh conclusions of law the learned master rightly held: (1) “ That the time fixed for the payment of the $8,000 was indefinite, and not such an essential part of the. contract as would justify the defendant in abrogating it because of a failure to pay said amount on April 1, 1892.” (2) “ That the failure of the plaintiff to pay the $8,000 on or about April 1, 1892, having been caused by the neglect and refusal of the defendant to co-operate with the plaintiff in winding up the affairs of the Carbon Manufacturing Co., Ltd., the defendant had no right to sell the 593 shares of Carbon stock in April, 1892, and its sale was an unlawful conversion o'f said stock.” (3) “ That the sale of said 593 shares of stock having been made in default of a demand for payment of a debt which included about $5,088, for which the stock was not pledged, such sale was an unlawful conversion of said stock, and the fact that, immediately prior to such sale, the defendant offered to accept the amount of its demand, less the $5,088, did not make the sale valid, reasonable time not being granted the plaintiff within which to comply with said offer.” The correctness of these legal conclusions is so amply sustained by the learned master in his report that they require no further vindication at our hands. But his eighth conclusion of law: “ That the plaintiff cannot sustain the action, and the bill must be dismissed,” is a departure which cannot be sustained. Starting with the sound and well fortified position announced in the two preceding conclusions,—that, in the cir — 106 — cumstances, the sale was an unlawful conversion of plaintiff’s stock—we are clearly of opinion that, upon being paid the actual balance for which the stock was pledged, defendant was at least bound to surrender the stock; and a decree to that effect, at least, would have been warranted if the defendant had not, in defiance of the claim asserted in the bill, disposed of nearly one half of the stock and thus disabled itself from complying with such decree. It cannot surely be that the defendant, by first wrongfully converting the stock and then voluntarily disposing of it as its own, put it out of the power of a court of equity to redress the double wrong. If defendant had been disposed to act fairly, it would have retained possession of the stock until the plaintiff’s right to its surrender, upon payment of the actual balance, was determined by the court. Before the stock was put to sale, and afterwards, the court had undoubted jurisdiction of the case presented in the bill, and its jurisdiction co/uld not be ousted by the act of the defendant in wrongfully disabling itself to restore the pledge in controversy. Its conduct in that regard was in harmony with its previous acts of bad faith found by the master. The reasons given by the master in support of said conclusion are fully presented in his report and need not be repeated. Neither of said reasons, nor either of those given by the court below, appears to be sufficient to justify the decree complained of. The bill to restrain the sale and for redemption of the stock was filed before the day of sale. The preliminary injunction having been refused, the sale was effected as above stated. Defendant’s answer set up the fact of the sale, and it appearing that defendant had bid in the stock and afterwards sold 174 shares thereof to McDade and 105 to Curtze, the plaintiff thereupon obtained leave to amend her bill by adding two provisional prayers for relief, the first of which is as follows: “If, notwithstanding the filing of her bill of complaint and pending an investigation of the truth of the facts therein set forth, the said defendant should convert said shares of stock now held in pledge by it, or any part of them, to its own use as your orator apprehends,” etc., “ then your orator prays that the defendant may be ordered and decreed to account to your orator, as executrix of said estate, for the full value of said stock at thé date of said conversion, and after deducting there — 107 — from the balance of the indebtedness of A. R. Blood, deceased, remaining unpaid, exclusive of usurious interest thereon, and pay over to your orator, as such executrix, the amount that shall then be found to be due to her with interest.” In view of the facts rightly found by the master, and especially his finding that redemption of the pledge had become impossible or inexpedient by reason of defendant’s conduct after the bill was filed, we think the' plaintiff is at least entitled to be compensated in damages measured by the value of the stock which it illegally and tortiously converted to its own use ; and, if it be necessary to that end, that the bill should be amended, it maj'- be done or considered as done here. We have no finding of the value of the 593 shares in question, for the reason, as the master says, that he did not “ feel at liberty to make a finding as to the value of the stock.” We think, however, that there is evidence from which he might and ought to have made such finding. As we have seen, the defendant receipted for the 593 shares as “ paid up stock,” and it is conceded that its par value was $100 per share.. One of the witnesses, who was secretary of the company prior to the sale, and familiar with its business, testified, in .substance, that at the time of sale the stock was worth par ; that during the period it was held as collateral, and up to the time it was sold, it paid a dividend of two per cent a month. After testifying to the interview she had with Mr. Curtze, the treasurer and agent of the defendant, on December 31, 1891, and the reasons she gave him for wanting to redeem the stock, the plaintiff herself, in answer to the question, “ State whether you communicated that to Mr. Curtze,” replied: “ I did; I gave him as a further reason for wishing to obtain this stock—to obtain control of it—that it was worth far more than the indebtedness to the bank, and Mr. Curtze agreed with me that it was worth far more than that.” “Question: Thatis, than the whole amount?” .“ Answer: Yes, sir.” Again, in answer to the question, “ What, if anything, had he (Curtze) said to you about letting him have the stock ? ” her reply was : “ He said, ‘ Mrs. Blood, I think I can save some money for you, if you will make that stock (the 593 shares) over to me ; I will keep it until the profits pay the indebtedness at the bank and then I will give the stock back to you.’ I refused for the same reasons I had given before.” It — 108 — is fair to assume, from Mr. Curtze’s connection with and interest in the matter, that he was familiar with the value of the stock, and spoke truthfully when he assured plaintiff that it was worth more than the entire indebtedness to the bank, which at that time (December 81, 1891) was over $54,000. It was not until February 3,1892, that the indebtedness referred to was reduced by plaintiff’s payment of $30,000, on account thereof, out of her own funds. This testimony as to the value of the stock was not contradicted or questioned by defendant. Curtze and McDade, both engaged in the lamp-black business—the latter a stockholder in the same company—were both witnesses for defendant. In addition to that, there is the significant fact that one of them bought from the defendant 105 shares and the other bought 174 shares of the same stock, bid in by it at the sale. Both of them must have known the value of the stock they thus bought. If these witnesses, or either of them, could have rebutted the testimony, as to value, introduced by the plaintiff, it is fair to presume they would have been interrogated on that subject. “ When a party has the means in his power of rebutting or explaining the evidence adduced against him, if it does not tend to the truth, the omission to do so furnishes a strong inference against him. Thus when a person who has wrongfully converted property will not produce it, it shall be presumed, as against him, to be of the best description. Omnia prcesumuntur contra spoliatorem Broom’s Leg. Maxims, 903. The business of the Carbon Manufacturing Company Limited was of such a peculiar nature that the value of its stock was more difficult of proof than that of companies engaged in ordinary branches of business ; but a careful consideration of the uncontradicted testimony adduced by the plaintiff has led us to the conclusion that it was quite sufficient to have warranted the learned master and court below in finding that the stock in question was worth at least par at the time it was wrongfully converted by the defendant to its own use, and that they should have so found. The defendant should therefore be charged with the par value of said stock, $59,300, from which should be deducted the balance of indebtedness due defendant on April 23, 1892; thus leaving the sum of $34,581.75 as the balance in favor of plaintiff, for which she is entitled to a decree with interest from said April 23,1892. — 109 — Decree reversed, and it is now adjudged and decreed that the defendant pay the plaintiff the sum of 134,581.75 damages, with interest from April 23, 1892 ; and it is further ordered that defendant pay the costs, including the costs of this appeal.