Yamada v. Osawa

CRAIL, P. J.

All of the defendants except the defendant K. Hirano appeal from a judgment in favor of the plaintiff in an action for damages for conversion of certain ¡ stocks. Defendant Hirano defaulted and judgment was 'entered against him, although his deposition was taken before trial and used as evidence by the other defendants.

Viewing the evidence in the light most favorable" to the party who was successful in the trial court, and drawing all inferences in his favor which may be reasonably drawh therefrom, which it is our duty to do, the following is a statement of the facts in the case. On September 30, 1930, the plaintiff was the owner and in possession of 300 shares of stock of the Tokio Subway, Inc., and of 100 shares of stock of ¡Asano Cement Company. Defendant Hirano was a stock broker and the employee and representative of the other defendants, except the bonding company. On that day the plaintiff delivered to Hirano, as such agent, the certificates of stock above mentioned, together with a power of attorney, and Hirano accepted them on behalf of said defendants for the purpose of selling them for the plaintiff at the price of 14 yen per share for the Tokio Subway stock and 13 yen per share ¡for the Asano Cement stock. A yen was worth 49.40 cents in money of the United States. It was agreed that the Asano Cement stock would be sold immediately and that the Tokio Subway stock would be sold on or before October 31st. The market value of the stock at the time was at the prices abovjs indicated. Hirano sold the 300 shares of Tokio Subway stock to Hakushin Sha in San Francisco and retained the 100 .shares of Asano Cement stock in his possession with the c¿nsent, knowledge and permission of Hakushin Sha. He later sold

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this stock for 17% yen per share. This money he wrongfully appropriated and spent for his own use, although he reported to plaintiff that the stocks had all been sold as per their agreement and that the money would be paid to plaintiff when it came from San Francisco. Plaintiff demanded the return of the Asano Cement stock but was informed by Hirano that it, as well as the Tokio Subway stock, had already been sold. Plaintiff never received anything at all in payment for his stock, and the stock itself was never returned or tendered back to him.

During these transactions and at the time of the delivery of the stock by plaintiff to Hirano, and at the time of the sale by Hirano, there was in full force and effect a $5,000 stock broker’s surety bond with the defendant bond company as surety thereon, as required by law for the benefit of any person suffering loss or damage by reason of any fraud or other act in violation of the provisions of the Corporate Securities Act. This bond by its terms covered all activities on the part of Masue Osawa, Hakushin Sha or any of their agents or employees.