Court Opinion

ID: 7002585
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:44:47.18074+00
Date Added: 2024-06-11T16:09:58.031576
License: Public Domain

Mr. Justice Adams delivered the opinion of the court. The only controversy betiveen the parties is as to the 1,000 shares of Street’s Cable Car Line stock sold by appellees for appellant, and by the latter’s order, December 1, 1892, for $29 per share, or $29,000 in all, and the main question to be decided is, Avhether there can be any recovery by appellant, in the present suit, and under the pleadings, on account of that sale. It seems to be conceded by counsel for appellant that, if there can be a recovery, it must be either on the count on an account stated, or on the count for money had and received. Apparently, counsel for appellant do not much rely on the former count, and Ave think it clear that there can be no recovery under that count. In the letter of January 31,1893, from appellees to appellant, inclosing the statement or memorandum of the sale of the 1,000 shares, they informed appellant that they had borrmved the stock for four months flat at 30, and had delivered the 1,000 shares on the sale. Davis, appellant’s private secretary, and who apparently was managing the business for appellant, testified that “ 30 ” meant $30 per share or $30,000 in all. He also testified that appellees borrowed the stock at appellant’s request and delivered it to the purchaser, and that it is customary, in borrowing stock, to pay the market price at the rime of borrowing. The letter of January 31, 1893, inclosing the memorandum of the sale, Avas a part of the report of appellees of the transaction, and informed appellant, in substance, that he Avas debited in his account Avith appellees with $30,000. Davis testified that the stock was delivered in January, 1893, by Jamieson & Co., and that January 31, 1893, Jamieson & Co. reported to Uelson Morris that they had borrowed 1,000 shares of stock and delivered it on the short sale, and that they sent a memorandum of the transaction. The evidence then being that appellant was notified, by the report of appellees, that they had made a sale of stock for $29,000, deliverable in sixty days, and had expended $30,000 in borrowing the stock for the purpose of delivery, it is manifest that there can be no recovery under the count on an account stated. The letter and memorandum, taken together, constitute the report, and show an indebtedness from appellant to appellees. But appellant’s counsel rely mainly on the count for money had and received, and the next question is whether the evidence is such as to warrant a recovery under that count. The action for money had and received for the use of the plaintiff is an equitable action. It lies for money received by the defendant, which, in equity and good conscience, he should not retain, but should pay to the plaintiff. In such case the law will imply a promise of the defendant to pay the money to the plaintiff. 2 Greenl. on Evidence, 13th Ed., Sec. 117; Shaw v. Inhabitants, etc., 7 Cush. 442; Trumbull v. Campbell, 3 Gilm. 502; Farrar v. Hinch, 20 Ill. 646, 653; Watson v. Woolverton, 41 Ib. 241; Alderson v. Ennor, 45 Ib. 128; Belden v. Perkins, 78 Ib. 449; G. & M. R. R. Co. v. Burns, 92 Ib. 302; Green v. Lepley, 88 Ill. App. 543, 548. The right of recovery depends on proof of two things: first, that the defendant has actually received the money; second, that in equity and good conscience he should pay it to the plaintiff. If the defendant has received the money, he may, when sued for it, recoup or set off any indebtedness of the plaintiff to him. Belden v. Perkins, supra, p. 453. The appellees having reported to appellant, January 31, 1893, that they had delivered the 1,000 shares of stock to the purchaser, it is a legitimate conclusion that they received from the purchaser, at the time of delivery, the purchase price of the stock, $29,000; but the same report informed appellant that appellees had paid $30,000 to the lender of the stock, which appellant had authorized them to borrow for the purpose of delivery to the purchaser. So that, omitting all deductions for commissions, etc., as shown by the memorandum of sale, while appellees were indebted to appellant in the sum of §29,000, he was indebted to them in the sum of §30,000. Therefore they had no money which, in equity and good conscience, they should have paid to appellant, nor is there any evidence, under the count in question, that there was any money received by appellees and unpaid to appellant which, in equity and good conscience, they should pay to him. Appellant, however, seeks a recovery on the theory indicated in appellant’s letter to appellees, of date August 24, 1893, viz., that it was the duty of appellees to call on Koch, the lender of the stock, for margins, when the market value of it commenced to decline, and to continue so to do as long as the decline continued, in which case, had the margins been put up, there would have' been no loss on the borrowed stock, and there would have been a balance to appellant’s credit; and that, on Koch failing to put up margin, when first called on, it was appellees’ duty to sell the stock on the exchange, and thus stop the loss. There can be no recovery on this theory. First, the evidence does not support the assumption that it was appellees’ duty to call for margins on the borrowed stock. If such was appellees’ duty, it must so appear, either from the contract between the parties, or from evidence of a custom or trade usage to call for margins in such a case, so that the parties must be presumed to have contracted with reference to it. There is no evidence of any contract between the parties, that appellees should call for margins on the borrowed stock. The witness Davis testified that he dictated a letter, of date September 9, 1893, from appellant-to appellees, in which the following occurs: “Replying to yours of 7th, I beg to say that it was your duty as brokers to protect my interest by proper margin or security; that you failed to do. Moreover, you did not even notify me that you were not doing it, or that Mr. Koch was unable to put up margins or securities. Had you done what your duty as brokers demanded, and what I have every right to expect, the amount due me would have been in my hands long ago. Hot having done so, you are, therefore, liable to me for it.” Davis testified: “As to why I wrote to Jamieson & Co. as I did about their duty, I had had transactions in stocks running up into hundreds of thousands of shares, and 1 never had known of a case before where the broker did not call margins to protect a trade of that kind.” What is said in the letter of September 9, 1893, as to the duty of appellees, is a mere expression of the witness’ opinion, and the testimony of Davis last referred to is merely a statement of his experience in his personal transactions. The evidence falls far short of proving a custom of brokers to call on the lender of stock for margins. Bissell v. Ryan, 23 Ill. 571; Lyon v. Culbertson, 83 Ib. 33; Coffman v. Campbell, 87 Ib. 98; 27 Am. & Eng. Ency. of Law, p. 719. Secondly, appellant’s theory assumes that, under the count for money had and received, which count by its very terms indicates that the money sued for was received by the defendant, it is not necessary to prove that the defendant actually received the money, but it is sufficient to prove that the defendant was negligent, and that had he not been so he would have had the’money. Such is not the law. To warrant- a recovery it must appear from the evidence that the appellees actually received money which in equity and good conscience they should pay to appellant. Morrison v. Rogers, 2 Scam. 317; Stahl v. Ansley, 2 Gilm. 32; Trumbull v. Campbell, 3 Gilm. 502; De Clerq v. Mungin, 46 Ill. 112; Cushman v. Hayes, 46 Ib. 145. Proof of negligence will not support an action for money had and received. Appellant’s counsel urge that the evidence does not show that appellees advanced any money for the borrowed stock. Davis, examined by appellant’s attorneys, testified as follows: “Jamieson & Co. probably borrowed the stock around thirty. I don’t remember exactly. They had to put up with the man they borrowed the stock from, the market price of the stock. I suppose Jamieson & Co. furnished the money to borrow it. Kelson Morris did not give them his check for it; he did not pay for it — never.” In his subsequent examination on another day, he testified : “I did not know before August 29, 1893, that Jamieson & Go. borrowed the thousand shares of stock for delivery on the sale that had been made on December 1,1892. They wrote us that they had borrowed it. I do not mean to say —referring to my testimony of yesterday — that I know that to be an absolute fact. I only know it from their letters. I don’t know that I ever disputed it.” The statement of Jamieson & Co. in their letter of January 31, 1893, inclosing the memorandum of the sale, that they had borrowed the stock, paid thirty on the loan, and delivered the borrowed stock to the purchaser, has never been disputed by either appellant or his agent, Davis. Appellant claims in this suit that appellees received from the purchaser of the stock $29,000, the purchase price, which could not be, if the stock were not delivered, and appellant neither furnished the stock for delivery, nor advanced any money for its purchase, or for borrowing it. Appellant’s letters to appellees, of August 24 and September 29, 1893, impliedly admit the borrowing of the stock from Mr. Koch. Appellees’ letter of June 3, 1893, stating, “We have borrowed 1,000 shares of Street’s stock at ninety days from May 31st,” must refer either to an extension of the original loan of the stock, or to some other transaction than that in question. However, this is unimportant, in our view of the case. We find no reversible error in the court’s rulings on evidence, and are of opinion that the court did not err in taking the case from the jury. The judgment will be affirmed.