Opinion
Argued December 8, 1884
Decided January 20, 1885
Edward M. Shepard for appellant.
J. Warren Lawton for Davidson, respondent. Will Man for Jones, respondent.
The plaintiff appears to have had dealings with the defendants as stock brokers, in the course of which they bought and sold stocks and gold for him and he deposited money with them. On the 1st of July, 1878, they bought on his order, and for his account, two hundred shares of stock of the New Jersey Central Railroad Company at a cost of $7,800. The plaintiff claims that when this stock was bought he had enough money to his credit with the defendants to pay for it. The plaintiff, who was the only witness examined in the case, testified that he did not know how much money he had with defendants, but that he thought he had more than enough to pay for the stock. That he asked the defendant Davidson if there was plenty of money to buy it, and he said yes. On the 23d of August, 1878, the defendants sold the stock without any authority from the plaintiff, for $6,525, and failed the same day. On the following day the plaintiff was in the office of the defendants, and in answer to plaintiff's question, why they had sold him out, the defendant Jones said that it had to be done; that they had suspended because they did not want to lose any more money, and by suspending then they could pay every dollar with interest. They afterward went into bankruptcy, and the plaintiff proved his claim, attaching to his proof an account purporting to have been rendered to him by the defendants, commencing February 28, 1878, and brought down to August 25, 1878, and showing a balance then due him of $5,902.53, which amount he claimed to be owing to him from the bankrupts. This account does not show any considerable amount to the credit of the plaintiff on the 1st of July, 1878, when the stock in question was bought, and the state of the account between the parties at that time is not otherwise shown. It does appear, however, that although the two hundred shares of stock cost $7,800, and brought $6,525, the final balance due the plaintiff was only $5,902.53. Whether the stock was ever actually in the possession of the defendants, or had been bought upon a margin, or was hypothecated, does not appear.
The plaintiff claims that the sale of this stock by the defendants when they were about to fail, or had failed, was an actual fraud, which brings the case within the exception in the Bankrupt Law (U.S.R.S., § 5117), which provides that no debt created by the fraud or embezzlement of the bankrupt * * * shall be discharged by proceedings in bankruptcy.
We do not think that the testimony conclusively proved the fraud alleged, so as to entitle the plaintiff to a direction of a verdict in his favor. At most, the evidence raised a question of fact, which might have been submitted to the jury. No request to that effect was made, but both parties requested the court to direct a verdict. Under these circumstances it has often been held that the parties must be deemed to have submitted the questions of fact, if any, to the decision of the court, and waived the right to go to the jury. ( O'Neill v. James, 43 N.Y. 84; and subsequent cases.)
The decision of the court, therefore, stands in the place of a verdict of the jury. The evidence being such that a verdict for the defendants could have been sustained, the direction to find such verdict was not error under the circumstances. The unauthorized sale of the stock was a conversion, but did not constitute such a fraud as is contemplated by the Bankrupt Act. ( Hennequin v. Clews, 77 N.Y. 427; Palmer v. Hussey, 87 id. 303.) Neither, under the circumstances, was the insolvency of the defendants at the time of the sale conclusive evidence of a fraudulent intent.
The judgment should be affirmed.
All concur.
Judgment affirmed.