Sadie Rayner Altman, Respondent, v. George W. Weyand, Appellant

Sadie Rayner Altman, Respondent, v. George W. Weyand, Appellant. Action for conversion of money—not maintainable to enforce equitable rights in the proceeds of a sale. In an action for the conversion of certain moneys it appeared that the plaintiff’s husband subscribed to the stock of a corporation, and that the stock always continued to stand in his name, but the plaintiff claimed that such stock had been paid for with her money and that the certificate of stock had been actually transferred to her, although that -fact did not appear upon the books of the company. The corporation was dissolved in 1892 and several stockholders thereof raised a fund with which to relieve the real estate owned by the corporation from the liens against it. Such stockholders then purchased the property at the receiver’s sale, the deed running to them in proportion to their holdings of the stock of the corporation. Subsequently a portion of the property was sold and a mortgage was given by the purchasers to one of the grantors as trustee for himself and the other grantors, the interest of each of the grantors-being specified in the mortgage. Thereafter the defendant, who had been appointed receiver of the plaintiff’s husband in supplementary proceedings, collected the latter’s interest in the mortgage, and it was the money so collected that he was alleged to have converted. It did not appear that the plaintiff’s husband had ever made any specific transfer of his interest in the land or the mortgage to the ■ plaintiff, and it was not claimed that the plaintiff advanced any portion of the money subscribed by her husband to the fund raised by the stockholders. Held, that it was error for the court to charge that if they found that the plaintiff had become, and afterwards continued to be, the owner of the stock standing in her husband’s name, she was entitled to recover as a matter of law; That before the plaintiff could recover even against her husband she would be compelled to reimburse him for the money which he subscribed to the fund raised by the stockholders; That the plaintiff could not succeed in an action at law; by virtue of her equitable claim against the moneys collected on the mortgage, but must show a legal title to the moneys in question or a right to take immediate possession thereof. Appeal by the defendant, George W. Weyand, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the county of Erie on the 9th day of November, 1900, upon the verdict of a jury,' and also from an order entered in said clerk’s office on the' 19th day of October, 1900, denying the defendant’s motion.for a new trial made upon the minutes. Frank C. Ferguson, for the appellant. Cecil B. Wiener, for the respondent. [MAJORITY — Hiscock, J.:] Hiscock, J.: This is an action for the alleged" conversion of certain moneys. Defendant was appointed receiver in supplementary proceedings of one Henry Altman, the husband of the plaintiff. As such he received by collection on account of, and. by sale of, said Henry Altman’s alleged interest in a certain mortgage the sum of $368.01. Plaintiff claims that she was and is entitled to said moneys; that defendant, knew of.her claim when he collected them, and, therefore, has been guilty of a conversion for which.an action may be brought against him personally. The facts which attended- the giving of the mortgage upon which, the moneys were collected, and the circumstances upon which plaintiff bases her claim to the same, as they appeared upon the trial, are, in substance, as follows: In 1891 there was organized a corporation called the Buffalo ¡Railway Supply Company. Plaintiff’s husband was a member of that company and an original subscriber to its stock, twenty shares, thereof being issued to him for which, as between himself and the. company, he paid $2,000. This stock always continued to stand in his name. He failed in business in 1897, and judgments were secured against him; It is now claimed that plaintiff’s money really paid for this stock and that it belonged to her, and that by indorsement of the certificate the same was actually transferred to her althougli not upon the books of the company. Said certificate with such indorsement and transfer was net put in evidence. The only written evidence of the transfer was an assignment from Altman to his wife of this and other stocks as collateral security. The question of plaintiff’s ownership of this stock was, however, fairly submitted to the jury which found in her favor, and it is upon such ownership thereof that her claim to the moneys in question is made to rest. The Buffalo Railway- Supply Company, above mentioned, became insolvent and was dissolved in .1892, a temporary receiver being appointed. At the time of its dissolution it owned certain real estate subject to certain indebtedness, liens, etc. Several people, including plaintiff’s husband, who had been stockholders in the company, joined together and raised a fund with which to relieve the property of the aforementioned indebtedness and liens. The receiver then sold and they bought the real estate of the company. Only a portion of the stockholders were interested in the purchase. They got shares in the land in proportion to their holdings in the-old company. The deed was not put in evidence, but is stated to-have run directly to such purchasers who were named as grantees im the deed, and their respective interests therein specified Henry Altman was named as one of the grantees in said.déed as the owner of an undivided four and sixty-two one-hundredths of the property. These grantees kept the property from March, 1892, until 1896, when they sold a portion of it. The purchasers upon such sale gave back a mortgage of $10,000 for the balance of the unpaid purchase price, which, although not put in evidence, is said to have run to one Perew, as trustee for himself and the other grantors, the interest of each being specified in said mortgage as in the deed above mentioned. Perew having died in 1898, an application was made by those interested in the mortgage for the appointment of a new trustee in his place. This was after Altman had failed in business and after defendant had been appointed receiver. And then for the first time plaintiff asserted an interest in said mortgage by virtue of her ownership of the stock scrip above mentioned. This claim was noticed in the order appointing the trustee by a clause providing that Altman’s interest should be paid to himself or his representatives, and thus concededly leaving open the question as between him and his wife. It was upon this mortgage that defendant collected the moneys which are sought by plaintiff in this action. ' There was some meagre and rather loose evidence about a transfer by Altman to his wife of' his interest in this land and mortgage. No written transfer was put in evidence, and Mr. Altman himself by his evidence makes it apparent that the only transfer to his wife claimed to cover such interest is and was the transfer of the stock in question; that no specific transfer of the land or mortgage was ever made. Defendant duly moved for a nonsuit at the close of plaintiff’s case and by exception to the charge of the learned trial justice raised a question which we think will'necessitate a reversal of the judgment in this case. The jury were directly and specifically instructed both in the' body of the charge and by what was said in response to the exceptions of defendant’s counsel afterwards, that if they found that the original twenty shares of stock mentioned were transferred to plaintiff and that she paid for it and had had it in her possession since, it was her property and she could recover the moneys in dispute in this action. In other words, it was held over defendant’s objection and exception that if plaintiff in 1891 became and afterwards continued the owner of said twenty shares of stock then, as matter of law, she was entitled to recover against defendant for conversion of the moneys, collected by him upon the mortgage sometime later given for the purchase price of land standing in her husband’s name. Plaintiff did not, certainly as matter of law, have a legal title or right to the moneys in question. Her husband took the' legal title to the real estate in his own name and was the one represented by the trustee in the original mortgage. The most that can be said is, that plaintiff was the actual owner of the stock in the defunct corporation, and that her husband took the conveyance above mentioned as such stockholder and that, therefore, she is entitled to the benefits of such conveyance. This might furnish the basis for a claim and' equitable action against the proper parties. Upon this question of equity, however, it is to be borne in mind that Mr. Altman and the other stockholders made the conveyance to them pos* sible by raising a fund with which to pay off the indebtedness of, and liens against, said corporation and said property. It does not appear how much Mr. Altman’s share of that money was, and there is no claim that plaintiff advanced it. In the absence of some explanation, and, presumptively, before plaintiff could insist even against her husband upon having his apparent share of such property and the proceeds thereof, she would be compelled to reimburse him for the moneys which he advanced and which really amounted in whole or in part to a purchase price of the property he acquired. Her husband is not a party to this action. It is one at law without any opportunities for adjusting equities, and in which plaintiff must succeed by showing a legal title or right to take immediate possession of the moneys in question. She cannot succeed by virtue of her mere equitable claim against them. (Byam V. Hampton, 32 N. Y. St. Repr. 771, 774; Clements v. Yturria, 81 N. Y. 286.) In accordance with these views, we conclude that the portions of the charge objected to were erroneous, and that the judgment and order appealed from must be reversed and a new trial granted, with costs to the appellant to abide event. All concurred. Judgment and order reversed and new trial ordered, with costs to the appellant to abide the event.