Hays v. Currie.

Henry, or whosoever might trust him; by substituting the unpaid and over due notes of Henry for the bonds in question.

1. Falsely procuring McC. the wagon driver of Currie's, to pretend he was the real purchaser, when he was the mere tool of the defendants.

2. Inducing Henry to believe he was to receive the cash; instead of which it was intended to hand him his own note.

IV. The defendants ought to be decreed to return to the complainants, the three Indiana bonds and the two Illinois bonds, with damage for their detention; or to pay the value of the bonds at the time of obtaining them and interest.

G. Buckham and E. Sandford, for the defendants, W. and J. Currie, made the following points:

I. It appears by the bill of complaint that the complainants loaned the stock in question to James W. Henry, for his accommodation, to be used and employed by him in his business, upon his credit and promise to return to them the money therefor. The complainants were no parties to any contract or agreement whatever, with the defendants or either of them, and have no rights against them or either of them, either at law or in equity for any supposed wrongs or injuries upon Mr. Henry.

II. As between the complainants and Henry, the delivery of the bonds to Henry upon his own credit or responsibility was absolute, and was without fraud on the part of Henry. Henry was not acting as broker or agent of the complainants in this transaction. (Marsh v. Wickham, 14 Johns. 167; Chapman v. Lathrop, 6 Cowen, 110, and note, and cases there cited; Conyers v. Ennis, 2 Mason, 236; Lupin v. Marie, 6 Wend. 77; 15 ibid. 51; Hogan v. Shorb, 24 ibid. 458; Cross v. Peters, 1 Greenl. 376; Warren v. Sprawle, 2 J. J. Marsh, 528; Satterlee v. Lynch, 6 Hill, 228; Cross on Lien, 8, 38.)

III. The allegation that Henry was employed as a broker, to purchase such bonds, is denied by the answers, and the answers are not disproved. Such allegation is inconsistent with the case as stated by both parties.

IV. The allegations that Kimball stated to Henry, that he would pay in cash, the price of the bonds, is denied in the an

Hays v. Currie.

swer and is not proved. It may be conceded that it was the ex. pectation of Henry that the cash would be paid; but a purpose on the part of the vendee, to set off a note against the vendor, cannot be legally or properly characterised as a fraudulent transaction.

V. The allegations of combination, conspiracy, fraud and artifice, to procure by a pretended purchase, the property not of said Henry, but of some other persons, and the allegations of knowledge of the inability of the said Henry, to purchase said bonds with his own funds, and the allegations that Kimball and McCormick were informed at the time that the bonds did not belong to Henry, but had been entrusted to him by the complainants, upon any terms or conditions or in any manner, are denied by the answers and are not proved. (1 Chitt. Gen. Pr. 666.)

VI. The complainants, if they can be permitted to come into this court upon the case, and to enforce in their own names, any legal or equitable rights Mr. Henry may have against the defendants, are not entitled to the relief sought, because upon the pleadings and proofs, Mr. Henry is not entitled to any decree against the defendants or either of them.

VII. The complainants had a perfect remedy at law, and this suit is virtually an action of trover brought in this court to recover for five bonds alleged to have been converted by the defendants to their own use. No grounds are stated requiring the interposition of a court of equity, or a resort to this forum for full and perfect redress, and the bill prays judgment for damages. VIII. The bill of complaint should be dismissed with costs.

G. Bowman, for N. Kimball.

THE ASSISTANT VICE-CHANCELLOR, recapitulated the facts, and then continued: This brief statement of the transaction, is sufficient to dispose of the case. It was a contrivance to obtain this debt of Henry's, by inducing some innocent party to trust him with the possession of stocks, and then pay for them in Henry's worthless notes. Allowing that Henry had been guilty of a breach of trust towards the Currie's, as is alleged in their

Hays v. Currie.

answer, their attempt to right themselves by using him to plun- . der others, however ingeniously devised, or satisfactory to their own consciences, was no more nor less than a fraud.

There is nothing in the argument, that there was no fraud in this instance on the part of the purchaser, inasmuch as Henry himself was the purchaser of the bonds from the complainants. In fact, Henry was neither seller nor purchaser. He was applied to as a broker, to buy the bonds, not for himself, but for Kimball. He was a mere middle man between Kimball, and such person as he should find willing to sell the bonds. He had no interest in the affair, beyond obtaining his commissions as a broker. I. cannot, therefore, regard him as the purchaser from the complainants. The real buyers, through McCormick and Kimball, were the Currie's; and they attempted to procure for Henry's notes, these state bonds, which the complainants parted with for cash.

But if Henry were to be treated as a purchaser from the complainants, the defendants are in no better position. The bonds were delivered to Henry for cash only. There is no pretence that the complainants intended to credit him for the price, a single moment. The contract was therefore unexecuted until payment was made, and the complainants could reclaim their property in the hands of any one, except a bona fide purchaser without notice. Neither McCormick nor the Currie's were such purchasers. They did not part with any valuable consideration; and they had notice from the circumstances, as well as Henry's declaration in McCormick's presence, that Henry was not the owner of the bonds.

If Henry is to be deemed the complainant's broker for the sale of the bonds, the case is still stronger in their favor. He bargained them for cash, and he refused to deliver them save for cash. The fact that they passed into the possession of McCormick, through the trickery of Kimball, does not alter the case. Delivery usually precedes payment on cash sales, but the property does not pass until payment be made or waived. On the refusal of McCormick to pay the money, the complainants had a right to demand a return of the bonds. In most of the cases cited by the defendants, the sellers had either waived the pay

Hays v. Currie.

ment of the price by an unconditional delivery, or had affirmed the sale as an existing contract, by bringing an action upon it. The most recent of those cases, Hogan v. Shorb, (24 Wend. 458,) was one of the latter class. For the general principle, see Russell v. Minor, (22 Wend. 659;) Acker v. Campbell, (23 ibid. 372;) Leven v. Smith, (1 Denio, 571.) Also Haggerty v. Palmer, (6 Johns. Ch. R. 437 ;) and Keeler v. Field, (1 Paige, 312.)

The objection that there was a sufficient remedy at law, was not taken in the answer, and would now be too late, if it were valid.

The Currie's must be decreed to return the five state bonds, or in default of so doing, to pay the complainants their value on the 2d of September, 1843, with interest from that time; and they must pay the costs of the suit.

As to Kimball, he has no right to costs. He was the voluntary instrument in this fraudulent contrivance, lending himself to the Currie's for a purpose which he could not have doubted was to be accomplished by victimizing some innocent third person. He was a proper party to the suit, and may consider himself fortunate to escape being charged with the complainant's whole claim.

Decree accordingly.

Ward v. Smith.

WARD V. SMITH and others. (a)

WHERE administrators sold lands of their intestate, under an order of the surrogate, and one of them purchased the lands at the sale, and the same were conveyed to him by the administrators as such; it was held, that the deed was not void, but was voidable in a court of equity, at the instance of any of the heirs of the decedent.

The purchaser under such circumstances, holds the land as a trustee for the heirs, with the right to be reimbursed for his purchase money. And purchasers under him are chargeable with notice of the trust, it being apparent upon the face of his deed.

An administrator, in 1805, became such purchaser of lands of his intestate, and they were held adversely from that time onward. W., a daughter of the intestate, was then a married woman, and so continued till 1827. In 1839, she filed a bill to set aside the sale. Held, that she was not barred by lapse of time. As to other lands of the intestate claimed by the administrator, not conveyed to him by the deed under the surrogate's sale; the heir's remedy is at law, and not in equity.

Poughkeepsie, July 27, 28; 1846.

THE bill in this cause was filed, in June, 1839, by Mahala Ward, against George Smith, William R. Mulford, and Nathan Barnes, and against several other parties who were heirs or descendants of Stephen Baker the elder, deceased.

It appeared by the pleadings and proofs, that the decedent died seised of a small farm and a small tract of woodland and of salt meadow, in Easthampton, in the county of Suffolk. He had thirteen children, who were either living at his death, or had died leaving issue. The complainant was one of his children, and was married at the time of his death. Her husband died in 1827. By the death of two of the intestate's heirs without issue, the number was reduced to eleven.

(a) This cause, and several of those which follow, were heard at a special term, held by the assistant vice-chancellor, for the vice-chancellor of the second circuit, at the court-house in the village of Poughkeepsie, in the county of Dutchess, on the fourth Monday of July, 1846.