Court Opinion

ID: 3602802
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:48:48.851566+00
Date Added: 2024-06-11T14:07:26.821668
License: Public Domain

The judgment should be reversed as to the defendants S. Isaacs Company.
We agree with the referee that, under all the circumstances, S. Isaacs  Company are chargeable with the knowledge of their attorney in regard to the stock in question and cannot be deemedbona fide purchasers thereof at the sale. It is *Page 357 
undoubtedly the settled rule that a principal is only chargeable with notice communicated to, or knowledge acquired by his agent in another transaction at another time and when he was acting for another principal when clear proof is made that the knowledge or notice was present in the mind of the agent at the time of the transaction in question. (Constant et al., Executors, etc., v.University of Rochester, 111 N.Y. 604, 611.) S. Isaacs 
Company are not only brought within the rule above stated, but the facts show essentially one transaction in the interest of S. Isaacs  Company which renders the rule inapplicable.
In November, 1895, the defendant Dittman loaned plaintiff $1,000.00, secured by fifty-three shares of the United States Printing Company's stock.
In December, 1895, S. Isaacs  Company began an action against plaintiff and others and attached the interest of plaintiff in the stock held by Dittman. In this action David Calman appeared as attorney for S. Isaacs  Company, and thus became advised a year before the public sale of the stock by Dittman that plaintiff had a large interest in the stock above the amount for which it was pledged. It will not be disputed that S. Isaacs 
Company are chargeable with this knowledge.
The par value of the stock was $5,300.00, and it was alleged in the complaint that it was actually worth $4,240.00.
A year later, in December, 1896, the same attorney, acting for defendant Dittman as alleged, had in charge the public sale of this stock, which is found by the referee to have been irregular, wrongful and a conversion thereof by reason of no previous demand of payment of the plaintiff's indebtedness, and no legal notice of sale.
At this sale S. Isaacs  Company bid in the stock for $1,083.78, enough to pay Dittman's loan to plaintiff. It is evident that the precise knowledge of this situation was in the mind of the attorney at the time of the sale, within the rule referred to above, so that it is of no importance whether he was acting for Dittman or S. Isaacs  Company.
It is equally apparent that these facts show one transaction *Page 358 
in regard to the stock. In the first transaction the attorney attaches the interest of plaintiff in the stock subject to the pledge, and in the second proceeding, by means of a sale without demand or notice, sought to extinguish plaintiff's interest in the stock without payment of its full value and vest it in his clients, S. Isaacs  Company.
The latter now seek to retain the fruits of this transaction, notwithstanding they have been tendered their bid and interest, by invoking the rule that their attorney only represented Dittman at the sale and consequently they are bona fide purchasers.
We agree to the affirmance of the judgment of the Appellate Division as to defendant Dittman, but are of opinion it should be reversed as to S. Isaacs  Company.
The judgment of the Appellate Division as to defendant Dittman should be affirmed, with costs; judgment as to defendants S. Isaacs  Company should be reversed and a new trial ordered, with costs to abide the event.