On the 29th of December, 1886, the firm of A.S. Hatch Co., brokers, deposited with the Farmers' Loan and Trust Company, $5,000 and took from that company a receipt in these words:
"NEW YORK, Dec. 29, 1886.
"This is to certify that A.S. Hatch Co. has deposited with this company five thousand dollars, payable in current funds on one day's notice to them, and White, Morris Co., jointly upon the surrender of this certificate (which is assignable upon the books of the company) with interest at the rate of two per cent per annum, provided the deposit is not disturbed until after the expiration of three days. $5,000."
On the 14th of November, 1887, Hatch Co. assigned this sum of $5,000, and all claims therefor, to the plaintiff for the benefit of the creditors of A.S. Hatch Co., and after demand made upon the trust company, and a refusal on the part of White, Morris Co., the joint payees to join in the demand, the assignee brought this action, asking that White, Morris Co., be required to join with plaintiff in an order upon the Farmers' Loan and Trust Company for the payment to him of the sum of $5,000 so deposited by his assignors, and that the defendant, the Farmers' Loan and Trust Company, be decreed to pay to him that sum of $5,000, with accrued interest.
It is, of course, obvious that as, by the terms of the agreement, the trust company was bound to the two payees, and not to each separately, it could be made liable only upon their joint demand, and, therefore, as one refused to co-operate with the other, it was necessary to show that the refusal was wrongful. *Page 518
The court at Special Term found that the refusal was justified, and the General Term have approved that decision. We are unable to find in the record any reason against it. The complaint goes upon the ground that fraud practiced by Morris Co. upon Hatch Co. induced the deposit. The allegations to that effect were put in issue, and were not only in the estimation of the trial judge unproven, but the learned counsel for the appellant upon this hearing asks nothing upon that theory nor does he find fault with the refusal of the court to find that the representations stated by the plaintiff as the basis of his action were, in fact, made. The allegation in respect to them may, therefore, be laid one side. The appellants' claim is that there was no consideration for the deposit. As to that both courts thought otherwise. The trial judge refused the plaintiffs' request so to find; and as the summing up of the whole case did find that on the 24th of December, 1886, one G. Maas sold to White, Morris Co. $50,000, Troy and Boston Railroad Company bonds, known as seconds, at seventy-five per cent of their face value; and a written memorandum of the sale was made and signed by Maas, and delivered to White, Morris Co. He also found, that A.S. Hatch Co., the plaintiff's assignors, on December 29, 1886, called upon White, Morris Co., assumed Maas' sale, took his place therein, and agreed in his stead to deliver the bonds to White, Morris Co., and White, Morris Co. assented thereto, and agreed to pay A.S. Hatch Co. on such delivery instead of Maas. Thereupon, a member of each firm, being a member of the New York Stock Exchange, and each firm being (by reason of its regulations), entitled to demand a ten per cent deposit, they severally deposited $5,000 with the Farmers' Loan and Trust Company on account of such sale and transaction, and subject to the joint orders of both firms; and such deposits are yet continued, one being the deposit mentioned in the certificate. Thereupon, White, Morris Co., at the request of A.S. Hatch Co., gave them an extension of time for delivering the bonds, and later another extension; but the bonds *Page 519 have not been delivered, or any thereof; that from the time of such arrangement between the two firms A.S. Hatch Co. have dealt with White, Morris Co., as principals, in place of Maas in his said sale, and White, Morris Co. have looked to them as such, and not to Maas, and have done so with the concurrence of A.S. Hatch Co.," and upon these facts, the trial judge found as conclusion of law, that "by the arrangement between A.S. Hatch Co. and White, Morris Co., A.S. Hatch Co. became principals in place of Maas in his sale to White, Morris Co.; that such arrangement was not a new sale, or within the statute of frauds, but was and is valid; that the plaintiff is not entitled to the deposit made by A.S. Hatch Co., but that the same is security to White Morris Co. for the execution of Maas' sale to them."
These facts found by the trial judge have sufficient evidence in their favor — indeed it is all one way — and they establish (1) a legal contract between Maas and Morris Co. for the sale, purchase and delivery of the bonds in question; (2) the substitution of Hatch Co. in the place of Maas at their own request; (3) and in consideration of an extension of time for the delivery of the bonds, a deposit of $5,000, to secure the performance by them of the agreement they had assumed; and (4) that the agreement has not yet been performed.
It is quite needless for a court of equity to inquire into contracts, real or pretended, before that time entered into between Hatch Co. and other persons relative to the bonds, and on which Hatch Co. might or might not have relied. But by these agreements the bonds in the first instance were to be supplied by Hatch Co. to Maas, and they had been informed that when delivered the delivery was to be made to Morris Co. These circumstances, no doubt, moved Hatch Co. to make the application to them for forbearance in exacting immediate delivery. But the agreement then made, and which resulted in the deposit now in question, was an independent agreement between Hatch Co. and Morris Co., to the full benefit of which, so far as the facts are displayed in this record, the defendants are entitled. *Page 520
The plaintiff's case is simply this: Morris Co. had a valid contract under which Maas was bound to sell and deliver to them certain bonds. Hatch Co. admit that they were to deliver the bonds to Maas, and in his presence, and in the presence of Morris Co., assume to stand in his place and apply to Morris Co. for an extension of time in which to make delivery to them. Morris Co. had already deposited $5,000 in the trust company as security for performance of the agreement to purchase on their part, payable by the trust company upon the joint order of A.S. Hatch Co. and themselves, and in consideration of this and the extension of time given in pursuance of their request, Hatch Co. made the deposit in question. There was no fraud, nor does there seem to be either illegality or unfairness in the arrangement. The plaintiff stands as a volunteer in the place of Hatch Co. There appears to be no ground on which a court should interfere in his favor.
The judgment appealed from should be affirmed, with costs.
All concur.
Judgment affirmed.