Maryland Fire Insurance v. Dalrymple

Bartol, J., delivered the opinion of this Court: This suit was instituted by William F. Dalrymple against the Maryland Fire Insurance Company to recover damages for the alleged illegal sale and conversion, by the defendant, of three hundred and twenty-five shares of the capital stock of the Baltimore and Ohio Eail No ad Company, which Dalrymple had pledged to the defendant to secure the re-payment of a sum of money loaned to him by the company. The verdict and judgment of the Court below were in favor of Dalrymple. Both parties have appealed. The nar. originally filed, contained a single count in trover; the defendant pleaded and issue was joined; afterwards an agreement was tiled, that in lieu of formal pleadings the plaintiff should be considered as having amended his declaration by adding such counts in tort as the state of the facts, as they appear at the trial, would justify, and the same agreement as to pleas and replications and issues thereon. “The case to be tried on the pleadings as they now stand, all errors in pleading on both sides released, with leave to each party to give the special matter in evidence, reserving to each party, in case of appeal, the same benefit of exceptions as if formal pleadings had been put in.” As a material question upon the pleadings is raised by the fifth prayer of the defendant, it is necessary for us to interpret tins agreement.

The plaintiff’s counsel, in their brief, state, that “ all errors in pleading were released, the questions at issue are presented by the facts disclosed in the hill of exceptions and the instructions of the Court thereupon.” This is not strictly correct. As we understand the agreement, the plaintiff in his amendments was confined to his counts in ²⁵⁸ tfoH, and' the suit must he dealt with as an action ex detidfy and as if the supposed amended counts in that form were-added. With these preliminary remarks,, we proceed to state the1 facts of the case as disclosed in the Bill of exceptions. The terms, of the pledge are shown by'the receipt signed by the president of the compan y, dated the' 12th day of June, I860, and by Dalrymple’s receipt, of the same date, given to the company;, these papers correspond in'their terms, and it is only necessary' here to insert One of them, viz: that signed by the president of the company; and offered in evidence by the plaintiff; if is as follows r- “I have this day advanced to William F. Dalrymple the Sum of nineteen thousand iivfe' hundred dollars, returnable upon one day’s notice, and he has deposited in my'hands as collateral security,.for the payment of the same, the following securities, viz: three hundred' and twenty-five shares' of Baltimore and Ohio-Rail Road' stock, now in the'name of E. Pratt & Brothers, but to Be transferred this day to my name as the President of the hiaryland Fire Insurance Company of Baltimore; with the understanding, that if the said loan is not promptly paid according to agreement, I am authorized, without further notice, to sell the said collaterals for the purpose of satisfying'the same; any excess or deficiency to be paid or received by him as the case may be; a margin of ten dollars per' share to'be kept up at all times during the rum ning of this contract.

Signed, Tiros. E. IIambceton, Pres’f. Endorsed", Baltvmore', Aug. 13, 1860. Received interest on'the'wfthin loan, $268'.67, to this date.”’ The receipt or memorandum of loan signed by the plaintiff, by his agent, P. II.

Coakley, contains, in addition, this memorandum, “interest payable every sixty days,,should tk© Same'continue'Beyond that time;” ²⁵⁹ Proof was offered by the defendant that the market price »of the stock was, as follows: •On the 12th of June, 1860 $79 per share, ■“ “ 30th of Oct., “ :37(>i “ “ i£ ££ 5th of Nov., “ $69 ££ ££ ££ ££ 10th of ££ ££ $68 ££ “ ££ ££ 15th of ££ ££ $56|- “ ££ Evidence was given «of calls made by the defendant on the plaintiff, Viz-: 'On the 30th of October, 1860, a notice to return the loan on the 1st of November, 1860. On the 5th ¡of November, 1860, a notice to “deposit additional amount •of securities or larger margin” on the loan. On the 10th of November, 1860 a notice “to return nine thousand dollars of the loan, on Tuesday, the 13th instant.” On the 13th of November, 1880, the following notice was given to the plaintiff’s agent: “Mr. P. H. Coakley, Agent.' — Sir: On Saturday,'the 10th hist., we notified you to return on this day nine thousand dollars, being part of the loan made to you the 12th of June last upon three hundred and twenty-five shares of the Baltimore and Ohio Bail Bead stock; you have not complied with that call, and we now notify you to return to this company the whole of said loan, nineteen thousand five hundred dollars, on to-morrow, Wednesday, the 14th inst.” Signed, Oib 'Sbisab, Sec’y. By order -of the Board.

It was admitted that these notices were received by the plaintiff on their respective dates. It was also proved and admitted that there wmre negotiations between the plaintiff and defendant about the 15th of November, 1860, in consequence of the notices, the object of the same being to relieve the loan ; but they were ineffectual and had been terminated before the 20th of November, 1860. Oil this last named day, the defendant procured the 325 ²⁶⁰ shares of stock to be sold at the Board of Brokers, and became the purchaser thereof at $55 per share. This sale and purchase were effected by the agency of brokers employed by the defendant, two of whom, Gildersleve and Whitridge, wore employed to sell at the highest obtainable market price, and Whitridge testified that the stock was accordingly put up and sold at the public board for the highest market price of the day; he had likewise instructions from Mr. Win.

W. Spence to purchase said stock for him, Spence, at the market rate, and witness accordingly requested Mr. Edward Pittman, (another broker,) to purchase said stock for him, the witness, which was done. The sale was in all respects fair, and not covert in any particular; the witness requested Pittman to bid it in for him, because such is the usage of the board when the same broker has an order to buy and an order to sell the same lots of stocks from different parties, and in order that the sale might be recorded in the usual manner. The same broker cannot appear on the books as buyer and seller in the same transaction. No transfer was made to Pittman except on the books of the board; the stock was transferred to Spence next day and witness sent him the certificate.

The same witness testified that Spence called at his office before the meeting of the board, on the day of sale, and informed witness, he knew witness had the stock for sale, and then instructed witness to buy for him. Witness did not know, till after the sale, that Mr. Spence was buying for the company. It was admitted by counsel, at the trial, that Spence was one of the directors of defendant, and made the purchase for the defendant. It was admitted, that shortly after the sales of the 20th of November, 1860, an account was rendered to the plaintiff by the defendant charging the amount of loan and interest, and crediting the net proceeds of the sale, leaving a balance due defendant of $1,771.50, and payment thereof demanded. ²⁶¹ Hie stock was held by the defendant till the spring of 1862, when it was sold in parcels to different persons, and on different days, between the 18th of March and the 1st of May, 1862, at prices ranging from $60 to $67 per share, yielding in the aggregate the sum of $19,943.75 net.

These sales wer'e made publicly at the Board of Brokers- — ■ fairly and in the usual way — at the ruling market prices, by competent brokers employed for that purpose, and the stock was transferred to the several parties purchasing the same. It was proved by the plaintiff and admitted, that a dividend of three per cent. ( $3 per share) was declared on the stock and paid to the defendant on the 27th of October, 1860, and handed over to the plaintiff; that the defendant received a similar dividend on the 16th of April, 1S61, and applied the same to its own use; also, that dividends to the same amount were declared on the same stock, payable on the 30th of May and 30th of September, 1862, and on the 31st of March, 1868; also, a dividend of six per cent, on the 26th of October, 1S63, and a dividend of four per cent, on the 26th of April, 1864; but that the defendant received none of the said dividends except the first two above enumerated. It was further admitted that the plaintiff paid interest on the loan, in full, to November, 1st, 1860.

On the 16th day of December, 1862, the plaintiff tendered to the company the sum loaned, with interest, and demanded a return of the stock, to which the president of defendant replied, “that the said shares had been sold and were no longer in the defendant’s possession,” and declined to accept the tender. Proof was offered (subject to exception) that at the time of the tender the stock was worth in the market about $78 per share, and that at the time of the trial it was worth about $115 per share. Proof was offered by the defendant that on the 20th of November, 1860, the stock was worth no ²⁶² ira ore than $55 per share, and between that day and the day of tender fluctuated in value, and-on the 25th of April, 1861., was sold as low as $41.50 per share. Upon this state of facts the plaintiff presented two prayers, and the defendant five prayers, these were all refused, and the Court below gave an instruction to the jury.

The propositions presented by the plaintiff’s prayers were; 1st. That upon the tender, demand and refusal made in December, 1862, notwithstanding' the previous sales of the stock, the plaintiff was entitled to recover; and in assessing the damages the jury might value the stock as worth the highest price which could be 'obtained for the same in the exchange market at the time of the trial, and that the defendant was chargeable with all dividends on the stock declared after the pledge and before the time of trial which, by reason of the pledge, the plaintiff was disabled from recovering, and which might have been realized by the defendant if it had kept the pledge. 2nd. If it should be found that the bailment had been determined, and the relation of pledgor and pledgee destroyed by the sale in November, 1866, or by those made in the spring of 1862, then that the defendant’s lien on said stock, as a security, was thereby terminated, and no discount or recoupment from the value of the stock, to be ascertained as aforesaid, ought to be made for or on account of the money ■ loaned by the defendant to the plaintiff. The defendant’s prayers asserts: 1st.

That the sale of the 20th of November, 1860, if the jury find it -was made bona fide, was valid and binding in law, and if the proceeds thereof did not amount to the principal and interest of the loan, the plaintiff was not entitled to recover. 2nd. That the sale of the 20th of November was not void, but voidable only by proper proceedings in a Court of Chancery, upon grounds not cognizable at law. ²⁶³ SrcL That if the plaintiff is entitled to recover, then the’ measure of damages is the market value of the stock on the 20th of November, I860, deducting therefrom the amount of the loan and interest then due. (.The theory of this prayer; is, that the sale and purchase of the stock made, on the 20th of November, 1860, -was a conversion, and' operated to break up the bailment.)’ 4th. If tbe first three prayers should be rejected, then that the sales and transfer of'the stock made in the spring of 1862', operated as a conversion thereof, snd the measure of damages is the market Value of the stock at that lime, together with the dividend actually received by tbe defendant, deducting therefrom the amount of the loan and interest then due. 5th.

That