Band v. Wilson

THOMPSON (IRA F.), J.

The appellants prosecute this appeal from a judgment against them and in favor of the respondent in the sum of $4,516.65 and costs.

The appellant James R. Wilson was an investment broker and the appellant New York Indemnity Company gave bond for him as such broker. In June, 1927, the respondent delivered to Wilson Farmer River Corporation seven per cent first mortgage bonds of the par value of $5,000 and Columbia Gorge Hotel first mortgage bonds of the face value of $2,500, with instructions to sell at seventy-five per cent of their face value, which instructions were subsequently modified to the extent of authorizing their sale at sixty per cent of the face value or their exchange for captial stock of the Garner Royalties, Inc., of the par value of $4,500. After some considerable delay Wilson informed respondent that the reason for the delay was that the latter had not formally executed “sell and buy orders”, and that if this were done the transaction could be shortly closed. This was on November 7th, and after Wilson had made an inspection in Washington of the properties securing the bonds. The selling orders authorized sale of the bonds at sixty per cent of their face value. On December 12, 1927, Wilson wrote the respondent as follows:

“Enclosed you will find my receipt covering $5000 par value Riverview Farms Corp. 1st of 1935 and $2500 par value Columbia Gorge Hotel 1st 5 of 1942 which I have taken

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in trade at the value of $4516.65 and for which I agree to give you 452 shares of the Garner Royalties, Inc., capital stock at the price of $10.00 per share.”

Respondent promptly refused this proposal, both orally and in writing. Shortly thereafter Wilson pledged plaintiff’s bonds and appropriated the proceeds to his own use.

It is now urged by the appellant Wilson that there was no conversion of the bonds for the reason that the written order to sell expressly provided that the bonds might be pledged by him. This contention is the veriest pettifoggery and its inclusion in appellant’s brief merits the stern condemnation of this court. The language relied upon relates to marginal transactions or to pledges of securities to cover the account of the client and yet there is not one scintilla of evidence—no, not even a suggestion—that respondent had purchased on margin or was indebted to Wilson for one cent. In fact, the appellant testified that he had no express bargain with Mr. Band by which he might pledge the bonds.