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Although the allegations of the complaint, except the one last noted, are all made positively and are stated in the attorney's verification to be true of his own knowledge, it is evident from the verification itself that they are made only upon the affiant's information. He says:
"That deponent has fully gone into the facts and causes of action upon which the foregoing complaint is based with Charles W. Ralph, of Minneapolis, Minn., general manager of the plaintiff company, and who had charge of the matters set forth in said complaint, and with James A. Kellogg, Esq., of Minneapolis, Minn., who at the times mentioned in the foregoing complaint was attorney for plaintiff, and he has personal knowledge of all the matters set forth therein. That deponent had had personal interviews with M. Carl Levine, Esq., of New York, attorney for defendant herein. That deponent has in his possession the agreement set forth in the foregoing complaint, and all the correspondence between the parties hereto and in any way bearing upon the cause of action herein, and is familiar with the contents thereof."
It is thus made quite clear that the allegations of the complaint, although positively stated, are in fact based upon information furnished to the affiant by third parties, or upon letters and papers the contents of which are not stated. Such a complaint has no probative value as an affidavit, and furnishes no support for the order of arrest. The affidavit which accompanies the complaint is also made by the attorney, and is of no more value as a support for the order of arrest than is the complaint. It states that the plaintiff's general manager and solicitor have stated the case to the affiant, and that all the correspondence between the parties and all the papers bearing thereon are in the affiant's possession and have been carefully examined by him. It does not state that the papers in his possession contain, but does allege the conviction on the part of the affiant that plaintiff has a good cause of action, and that defendant has been guilty of fraud and conversion. Certain unrelated and disjected excerpts are then given, within quotation marks, which are apparently extracted from letters written by defendant. These are presumed to indicate that defendant made certain representations. The important matter to be established, however, is not the representations, but their falsity. There is a reference to, but no quotation from, an affiadvit of Hans Boellert dated December 7, 1908, from which the affiant draws the deduction that said Boellert did not know of the existence of any contract with plaintiff and had never received any money thereunder. There is also a statement by affiant that in certain letters, and a statement, defendant acknowledges indebtedness to plaintiff, but claims inability to pay. Again the affiant expresses his belief and conviction that defendant has been guilty of fraud and conversion.
Of course the declaration of the attorney's belief and conviction as to the defendant's guilt is wholly immaterial. It is the court, or the judge making the order, and not the attorney, who must be convinced that there is sufficient ground for the order of arrest. Nor are the deductions made by the affiant from papers and statements in his possession, but which he does not produce, of any probative force. They are merely the conclusions of the affiant; but, when courts and judicial officers are asked to act upon affidavits founded on information and belief, they must be furnished with the sources of the information
76 Hun, 356, 27 N. Y. Supp. 802; Ladenburg v. Commercial Bank, 87 Hun, 275, 33 N. Y. Supp. 821; Barrell v. Todd, 65 App. Div. 22, 72 N. Y. Supp. 527; Wilson v. Collins, 119 App. Div. 88, 103 N. Y. Supp. 1038; Burns v. Boland, 70 App. Div. 556, 75 N. Y. Supp. 700. Finally, even if the court could accept the attorney's summary of the contents of the undisclosed papers, there is nothing to show the falsity of any of the representations alleged in the complaint to have been false, to wit, that plaintiff was authorized to execute the agreement as Boellert's agent, that defendant was able to protect plaintiff, and that Boellert required the prepayment or deposit of $7,800.
The order appealed from must be reversed, with $10 costs and disbursements, and the motion to vacate the order of arrest granted, with $10 costs. All concur.
KILMER v. HUTTON et al.
(Supreme Court, Appellate Division, First Department. April 8, 1909.)
1. TROVER AND CONVERSION (8 40*)—CORPORATE STOCK-NEGLIGENCE-EVIDENCE
Evidence, in an action for converting stock delivered to defendants' employé for transfer, held to show that plaintiff was not negligent.
(Ed. Note. For other cases, see Trover and Conversion, Dec. Dig. $ 40.*] 2. PRINCIPAL AND AGENT (8 123*)-AUTHORITY-PROOF.
Stockbrokers, having vested apparent authority in an employé to deal with customers, cannot relieve themselves from liability for his acts by testimony tending to show lack of such authority.
[Ed. Note.—For other cases, see Principal and Agent, Cent. Dig. $ 420;
Dec. Dig. § 123.*] 3. ESTOPPEL ($ 75*)_EQUITABLE ESTOPPEL-OWNERSHIP OF STOCK.
Plaintiff, by delivering to brokers' employé certificates of stock purchased through them by plaintiff's deceased husband, and indorsed to her and her daughter, for transfer on the corporations' books, did not vest the employé with indicia of ownership so as to estop plaintiff to sue the brokers for conversion of the stock in transactions with employé, who dealt with the stock as his own.
(Ed. Note.—For other cases, see Estoppel, Cent. Dig. $$ 189, 193; Dec. Dig. $ 75.*] 4 TROVER AND CONVERSION ($ 10*) - DISPOSITION OF PROPERTY CORPORATE
Under the rule that, if one rightfully possessed of chattels with the own. er's permission makes an unauthorized use of them, there is a conversion, a brokers' employé who became lawfully possessed of certificates of stock to be transferred on the corporate books converted them, if be delivered them to the brokers as his own property.
(Ed. Note.-For other cases, see Trover and Conversion, Cent. Dig. 88 84, 86; Dec. Dig. $ 10.*] 5. BROKERS (8 38*)—PRIMA FACIE CONVERSION_CORPORATE STOCK.
Corporate stock was prima facie converted by brokers, where one to whom the certificates were indorsed delivered them to the brokers' employé for transfer to the indorsee on the corporate books, and in transac
For other cases see same topic & $ NUMBER In Dec. & Am. Digs. 1907 to date, & Rep'r Indexes
tions between the employé and the brokers he dealt with the stock as his own, resulting in a procurement of a transfer to the brokers.
[Ed. Note.-For other cases, see Brokers, Dec. Dig. $ 38.*] 6. TROVER AND CONVERSION (8 1*)—“CONSTRUCTIVE CONVERSION."
A “constructive conversion" takes place when one so acts respecting another's goods as to amount in law to appropriation of the property.
(Ed. Note.—For other cases, see Trover and Conversion, Cent. Dig. $ 1; Dec. Dig. 8 1.*
For other definitions, see Words and Phrases, vol. 2, p. 1469.] 7. TROVER AND CONVERSION (1*)—WHAT CONSTITUTES CONVERSION.
Every unauthorized taking of personalty or intermeddling with it, with intent to so apply and dispose of it as to alter its condition or interfere with the owner's dominion, is a conversion.
[Ed. Note.-For other cases, see Trover and Conversion, Cent. Dig. $ 1;
Dec. Dig. § 1.*] 8. TROVER AND CONVERSION ($ 25*)–PERSONS LIABLE.
When property is converted by one and is afterwards delivered to another, trover lies against both.
[Ed. Note.—For other cases, see Trover and Conversion, Cent. Dig. $
173; Dec. Dig. $ 25.*] 9. BROKERS (8 38*)-CONVERSION OF CORPORATE STOCK-ACT OF THIRD PERSONS
In an action against brokers for converting certificates of stock de livered by plaintiff to their clerk for transfer to plaintiff on the corporate books, and used by the clerk in transactions with the brokers as his own property, held not sufficient to show their good faith in dealing with the clerk relying on his ownership.
(Ed. Note.-For other cases, see Brokers, Dec. Dig. 38.*] 10. NOTICE ($ 6*)-IMPLIED NOTICE.
One having sufficient information to put a prudent man on inquiry and neglecting to make inquiry is presumed to have actual notice.
[Ed. Note.--For other cases, see Notice, Cent. Dig. $$ 4, 6; Dec. Dig. 8 6.*) 11. TRIAL ( 253*)-INSTRUCTIONS_IGNORING THEORIES.
In an action against brokers for converting certificates of stock delivered to their clerk for transfer to plaintiff, an instruction that if the clerk took the stocks to the brokers as his brother's property, and the brokers, believing him and without knowing of his transaction with plaintiff, re ceived the stocks and credited them to the brother, etc., plaintiff could not recover, was erroneous as ignoring constructive notice to the brokers of the conversion by the clerk.
[Ed. Note.-For other cases, see Trial, Cent. Dig. $$ 613, 620; Dec. Dig. 8 253.*] Appeal from Trial Term, New York County.
Action by Harriet N. Kilmer, Charles E. Kilmer's administratrix, against Edward F. Hutton and others. From a judgment for defendants and an order refusing a new trial, plaintiff appeals. Reversed, and new trial ordered.
Argued before PATTERSON, P. J., and McLAUGHLIN, LAUGHLIN, CLARKE, and HOUGHTON, JJ.
Black & Peck (Frank S. Black, of counsel), for appellant.
CLARKE, J. The defendants are stockbrokers, and the plaintiff is the widow and administratrix of Charles E. Kilmer, deceased. Mr. Kilmer died on March 23, 1906, intestate, and leaving a widow and one daughter, Catherine E. Swinnerton, his sole heir and next of kin. Mrs. Kilmer, having taken out letters of administration, obtained from a safe-deposit box a certificate, No. 125,003, dated February 26, 1906, for 100 shares of the stock of the New York Central & Hudson River Railroad Company, in the name of Charles E. Kilmer. The customary assignment upon the back thereof was in blank, but signed "C. E. Kilmer, in presence of A. Foshay," dated February 26, 1906. Also certificate C414, dated November 8, 1905, for.100 shares of first preferred stock of the United States Rubber Company, issued to Charles E. Kilmer. The assignment was in blank, signed "C. E. Kilmer, in presence of A. Foshay," and dated February 26, 1906. Also five certificates for 100 shares each of Columbus & Hocking Coal & Iron Company. These certificates were made out in the names of various persons, and the assignments in blank thereon bore the signatures of such persons.
In the first part of April, 1906, Miss Foshay, who had been the stenographer of Mr. Kilmer, at Mrs. Kilmer's request wrote in the names Harriet N. Kilmer and Catherine E. Swinnerton in the blank left for the name of the assignee on the assignment indorsed on the New York Central certificate. Mrs. Swinnerton was Mrs. Kilmer's daughter. Thereupon Mr. Swinnerton, her son-in-law, presented this certificate at the office of the company for the purpose of having it transferred in accordance with the assignment. The transfer agent declined to do it, because on the face of the certificate appeared the name Charles E. Kilmer, and the signature to the assignment was C. E. Kilmer, stating that some person must be procured to guarantee that the signature of C. E. Kilmer was written by Charles E. Kilmer, the holder of record.
Mrs. Kilmer had found among her husband's papers a letter with the heading :
"E. F. Hutton & Co., Bankers, 33 and 35 New Street; Members N. Y. Stock Exchange, etc., January 9th, 1906. My Dear Mr. Kilmer: Just a line to let you know where I am. I am here from ten to three. Yours truly, C. A. Bliven" -indorsed, “Jan. 11, 1906, K.” Also a letter addressed to Mr. Kilmer with the same heading of E. F. Hutton & Co., January 18, 1906, addressed to Mr. Kilmer :
"As per your instructions, we have bought for your 500 shares of Hocking Coal & Iron as follows:
200 shares at 2038.
2012. Kindly send check for $3,000 as margin by messenger today. Yours very truly, C. A. Bliven."
Also a copy of a letter written by Miss Foshay, at Mr. Kilmer's dictation, the original of which was mailed by her, dated January 18, 1906:
"Messrs. E. F. Hutton & Co., 33 New Street, Manhattan. Your favor of today notifying me that you have bought 500 shares for my account of Columbus & Hocking Coal & Iron Company at hand. Enclosed herewith please find check for the sum of $3,000 as margin for my account.”
A canceled check drawn by Mr. Kilmer on the Morton Trust Company, dated January 18, 1906, to the order of E. F. Hutton & Co., for $3,000, indorsed by them and stamped "Paid.” A memorandum statement under the heading of E. F. Hutton & Co., bankers, and dated January 22, 1906 :
"Mr. C. E. Kilmer: We have this day Bot your account with the following: Jan. 19. Bt. 200 H. C. I. 20_33...
$4,100 300 H. C. I. 20-12
In pencil: "Paid $7290.65. Jan. 22, 06, E. F. Hutton & Co., C. A. Bliven.” Also a canceled check drawn by Mr. Kilmer on the Morton Trust Company on January 26th, to the order of E. F. Hutton & Co., for $7,290.65, indorsed by E. F. Hutton & Co., and stamped "Paid." She also found Mr. Bliven's name in a notebook of her husband, and Miss Foshay had known Bliven as a business acquaintance of Mr. Kilmer who had come to the office occasionally while Mr. Kilmer was alive.
At Mrs. Kilmer's request, Mr. Swinnerton went to the defendants' office, where he found Mr. Bliven sitting at a desk, and requested him to call on Mrs. Kilmer at her late husband's office on Park Row. Bliven called at the office about the middle of April, and Miss Foshay introduced him to Mrs. Kilmer, who asked him if he was a member of the firm of E. F. Hutton & Co. He said he was not a member but was connected with the firm, and that he knew Mr. Ellis very well. She spoke to him about these shares of stocks and asked him about the transfer. He said that he did not know about it, but that his firm, E. F. Hutton & Co., undoubtedly did know, and he would find out and let her know. Within a day or two he called again and told Mrs. Kilmer that E. F. Hutton & Co. could have these stocks transferred, and would have it done for her. On the 19th of April he called again, and Mrs. Kilmer told him that she would like to have E. F. Hutton & Co. transfer 50 shares of New York Central to herself, 50 shares to Mrs. Swinnerton, 100 shares U. S. Rubber, first preferred, to herself, and delivered to Bliven for that purpose the two certificates. Bliven drew two receipts on paper bearing Charles E. Kilmer's letter head, and reading :
“April 19, 1906. Received from Harriet N. Kilmer 100 shares of U. S. Rub. ber stock, first pfd. No. (414. E. F. Hutton & Co., C. A. Bliven.”
And the other, same date:
“Received from Harriet N. Kilmer and Catherine E. Swinnerton, 100 shares