Prior to November, 1890, the defendants Gallaudet & Fitch were partners doing business as stockbrokers in the-city of New York. In July, 1890, the plaintiff employed the said defendants to purchase for him 200 shares of the capital stock of the New York, Ontario & Western Railway Company, and left with them, as security for the purchase price, 100 shares of the same stock, represented by a certificate thereof numbered 27,988, which order the defendantsGallaudet & Fitch executed. In August, 1890, the plaintiff employed the same firm to buy for him 100 shares of Quicksilver mining stock, which they did. In October they bought for the plaintiff 100 shares-New York & New England Railroad Company stock, and subsequently the plaintiff deposited with them at their request, as additional margin, 100 shares of New York, Ontario & Western Railway stock, represented-by certificate No. 27,987. Subsequently said firm sold for the plaintiff' 50 shares of American Tobacco Company stock, and received the cash therefor. Gallaudet & Fitch never delivered to the plaintiff any of the shares so purchased, nor the proceeds thereof, nor returned to him the-certificates deposited by him. In making the purchases for the plaintiff, they advanced for the payment thereof $4,175, and the same remained unpaid to them at the time of their assignment. It appears that at the time of their assignment the brokers themselves owned no stocks, all that they held belonging to customers, for whom they were carrying them upon margin. All the stocks were hypothecated upon various loans, and, on closing out these loans in a few cases, a balance-of money was delivered to the assignee, but in most cases there was a deficiency. The plaintiff claims that he has been able to trace certain stocks-which were pledged as margins as having been bought for him, and that, therefore, he is entitled to a superior equity over and above other creditors, who have not been able to identify any particular stocks as having-been purchased for them. This contention we do not think can prevail. These stocks were purchased upon margin, precisely the same as the stocks-of other customers, and the same course was pursued with them as with, the plaintiff’s stocks; and therefore there would appear to be no founda*554tian for the plaintiff’s claim to impress a superior lien upon any of the •assets of the firm, because of the disposition of these securities, from that of all the other creditors who were dealing with the stockbrokers -upon the same basis; and it is for this reason that it has not been deemed necessary to state in the foregoing summary of the facts the particulars in reference to the claims which have been made in respect to the stocks bought. We think, however, that the plaintiff’s claims in respect to the stocks deposited as margin belonging to himself stand upon a somewhat different basis, and that, so far as he is able to trace those stocks and their proceeds, he is entitled to a superior equity over the other creditors, whose stocks were purchased upon a margin. There •seems to be no reason in equity why such a preference should not be ■given to property belonging absolutely to the plaintiff, and which the •defendant firm only held as security for the advances, which they might-make in the execution of the orders given by the plaintiff, there being none others similarly situated. And this brings us to a consideration -of the case in respect to the two certificates numbered 27,988 and 27,-'987.
It appears that prior to the assignment the said firm hypothecated to ■the Bank of Commerce, with other securities, as collateral against a loan ■to them from the bank, said certificate No. 27,988, and also a certificate of the same stock No. 26,939, hereinafter mentioned. The bank, on default of payment, sold out a part of the securities so pledged, in-cluding said certificate No. 27,988. The sale made a surplus over the -amount due to the bank of $1,483.84. The certificate in question sold for $1,600. The stock which was so hypothecated that was not sold was returned by the bank to the assignee, who, after surrendering eight ■shares of American Cable Company stock to a claimant, sold the rest for $16,743.12. This certificate was directly traced as above stated, and, pursuant to the principles which have been heretofore enunciated, it "would seem that the plaintiff, instead of being entitled to have impressed upon the surplus arising from such sale a trust limited in its character, •has a superior equity, and, in case no sale had been made, would have been entitled to have insisted upon the sale of the other securities first, •so that he might receive his securities intact, and that this right ought "to follow the proceeds of the securities pledged.
In respect to certificate No. 27,987, it appears that that was sold on "the 13th of November, 1890, without the direction or knowledge of the plaintiff; and it is claimed that because at that time the said firm •had in their hands another certificate, No. 26.939, for the same number of shares, the plaintiff became the equitable owner of such certificate, and that it must be assumed that the firm had reserved and set it -aside for him as a matter of fact, and that he was entitled to follow it when it was put up as a collateral to the Bank of Commerce loan. This, we think, is a violent assumption, as there is no evidence whatever, except the existence of this certificate, which would justify the same; and this •single fact is manifestly insufficient. It seems to be based upon the claim that, by the mere pledge of the stock which the firm had bought for •the plaintiff upon margin, they converted the same to their own use,—a *555proposition which we neither admit nor deny, because it does not seem to be necessary for the disposition of the questions involved in the case at bar. We are of opinion, therefore, that the plaintiff was entitled to additional relief to that which was given by the referee, and a new trial must be had. It is consequently unnecessary to discuss the question raised by the appeal of the defendant assignee as to his liability for costs. The judgment must be reversed, and a new trial ordered, with costs to the appellant plaintiff to abide the event.
LAWRENCE, J., concurs.