Aronson v. Bank of America National Trust & Savings Ass'n

California Supreme Court Oct 4, 1937 No. L. A. 16307Published

Before: Nourse

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Holding. The court held that the complaint failed to state a cause of action for conversion because the administrators were authorized by statute to transfer the stock and the defendant banks acted in accordance with the law, resulting in no interference with the plaintiffs' dominion over the property.

Issues

Does a complaint state a cause of action for conversion when it alleges that administrators transferred stock without court confirmation but fails to allege that the defendants acted outside the scope of their statutory authority?
Are banks liable for conversion for transferring stock on their books upon the endorsement of a legal representative when the applicable statute does not require proof of court confirmation prior to such transfer?

Disposition. affirmed

Quotations verified verbatim against the opinion

“Conversion implies “some act of ownership or exercise of dominion over the property of another in defiance of his rights”.”

“It is a rule which requires no citation of cases that when a statute measures the power or prescribes the mode of conduct, the individual cannot be charged with wrong if he does nothing more than follow the terms of the statute.”

NOURSE, J.,

pro tem.

This appeal is taken from a judgment of dismissal entered after a general demurrer to plaintiffs’ complaint was sustained without leave to amend. Before entry of the judgment, plaintiffs were allowed by stipulation to tender an amended complaint, leave to file which was denied after a full hearing. A bill of exceptions was settled and filed wherein the sole specification of error is the denial of leave to amend. Inasmuch as the proposed amended complaint fails to cure the matters hereinafter noted, we will confine our review to the question whether the complaint states a cause of action.

The action was commenced in July, 1935, against respondent bank and Marco and Irving Heilman to recover damages for the alleged conversion of certain shares of stock of the Heilman Commercial Trust and Savings Bank and of the Merchants National Trust and Savings Bank. It does not appear that either of the Heilmans was served with process. The defendant bank was sued as the successor to the business of the two banks named.

In 1920 plaintiffs’ mother, Amy Heilman Aronson died intestate, leaving as her sole heirs the plaintiffs, who were minors. The two Heilmans were appointed as administrators and still continue to act as such, and the administration of the estate is still pending. In October, 1925, after settlement of their account as such, the entire estate was distributed to these plaintiffs, the decree expressly including all property of every kind and nature belonging to the estate, whether described in the decree or not. All the stock in question was inventoried as an asset of the estate, but it is alleged that no accounting of the transfers complained of was made to the probate court. Complaint is made of four separate wrongful transfers, two made prior to the date of distribution, and two made thereafter. The old certificates standing either in the

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name of the deceased or in the name of the estate were for shares of stock in the banking corporations named, of which both administrators were either directors or officers or both. The old certificates were cancelled and new certificates issued without order of court or other authority, some on the endorsement of both administrators, others on endorsement of one administrator only. Though the complaint alleges that it was the intention and

Aronson v. Bank of America National Trust & Savings Ass'n

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NOURSE, J.,

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