(after stating the facts as above). [1] 1. The law which determines the rights of the parties as to the dividends *531may be briefly stated: (a) A pledgee of corporate shares may recover from the corporation declaring a dividend thereon such dividend to the extent of the interest of the pledgee under the pledge, Thompson on Corporations, § 2181; Cook on Corporations (4th Ed.) § 468; Gemmell v. Davis, 75 Md. 546, 23 Atl. 1032, 32 Am. St. Rep. 412; Guarantee Co. v. Town Co., 96 Ga. 511, 23 S. E. 503, 51 Am. St. Rep. 150; Bank v. Wilder, 32 Neb. 454, 49 N. W. 369; Bank v. Mosher, 63 Neb. 130, 88 N. W. 552; George, etc., Co. v. Range, etc., Co., 16 Utah, 59, 50 Pac. 630 ; Gaty v. Holliday, 8 Mo. App. 118, and if the pledgor collects the dividend he holds it as trustee for the pledgee, Jones on Collateral Securities & Pledges (3d Ed.) § 398; (b) and as against a third party receiving the dividend with knowledge, of the rights of) the pledgee, the latter may recover on the common count for money had and received.
The first proposition is not seriously doubted, but the second is earnestly denied. We think they are equally sound. The argument on the point is, that assumpsit is not maintainable unless there he, in fact, privity of contract between the parties; and it is said that that relation did not exist between the St. Eouis bank and the Bowling Green Trust Company.
[2] We note the general character of the action. In Cary v. Curtis, 3 How. 236, 246 (11 L. Ed. 576) it is said:
“The action of assumpsit for money had and received, it is said by Lord Mansfleld, Burr. 1012, Moses v.' Macfarlen, will lie in general whenever the defendant has received money which is the property of the plaintiff, and which the defendant is obliged by the ties of natural justice and equity to refund. And by Buller, Justice, in Stratton v. Rastall, 2 T. R. 370, ‘that this action has been oí late years extended on the principle of its being considered like a bill in equity. And, therefore, in order to recover money in this form of action the parly must show that he has equity and conscience on his side, and could recover in a court of equity.’ These are the general grounds of the action as given from high authority.”
In Gaines v. Miller, 111 U. S. 395, 397, 4 Sup. Ct 426, 427 (28 L. Ed. 466):
“Whenever one person has in his hands money equitably belonging to another, that olhe.r person may recover it by assumpsit for money had and received.”
The contention is old and was early repudiated as demonstrated by the note to Maudeville v. Riddle, in Appendix to 1 Cranch, 367, under sulxl. 4, page 438. For collation of additional authorities see 1 Chitty on Pleadings (16th Am. Ed.) star pages 112, 362 and 363, notes. In Cary v. Curtis, supra, 3 How. 254, 11 E. Ed. 576:
“It is an entire mistake of the true meaning of the rule of the common law, which is sometimes suggested in argument, that the action of assumpsit for money had and received is founded upon a voluntary, express, or implied promise, of the defendant, or that it requires privity between the parties ex contractu to support it.”
The rule is aptly stated by Bigelow, Judge, in Brewer v. Dyer, 7 Cush. (Mass.) 337, 340:
“The law, operating on the act of the parties, creates the duty, establishes the privity, and implies the promise and obligation, on which the action is *532founded.” Leete v. Pacific M. & M. Co. (C. C.) 88 Fed. 957; Bank v. Bank (C. C.) 19 Fed. 301.
The action lies for money which “ex Eequo'et bono, the defendant ought to refund.” Stockett v. Watkins, 2 Gill & J. (Md.) 326, 20 Am. Dec. 438; Norden v. Jones, 33 Wis. 600, 14 Am. Rep. 782; Stimpson v. Insurance Co., 47 Me. 385; Horne v. Mandelbaum, 13 Ill. App. 607.
[3] 2. When it came to the decree it went only for the recovery of a sum certain; and it is assigned as error that plaintiff below went into the wrong forum, that it had a plain, adequate and complete remedy at law, and that consequently there was no jurisdiction in equity over the controversy. As already indicated, the proceeding has been treated here, in brief and argument, as in assumpsit. Of course, if the bill had disclosed that as the true character of the action and there was nothing else in the bill on which equitable relief was appropriately invoked; the trial court would have undoubtedly dismissed the bill had it been challenged on that ground. Gaines v. Miller, 111 U. S. 398, 4 Sup. Ct. 426, 28 L. Ed. 466; and without challenge it should in that event have been dismissed. Oelrichs v. Spain, 15 Wall. 211, 227, 21 L. Ed. 43; Amis v. Myers, 16 How. 492, 14 L. Ed. 1029; Sullivan v. R. R. Co., 94 U. S. 806, 811, 24 L. Ed. 324. But, if a court of equity is rightfully in possession of the cause as it is made by the bill, it will proceed to determine the whole matter in controversy and grant full and complete relief, although the relief granted may be such as is usually had in a proceeding at law. Cathcart v. Robinson, 5 Pet. 264, 278, 8 L. Ed. 120.
The bill had a wide scope. True, its tíltimate purpose was to have the appellant' declared a trustee for the benefit of the complainant oft the moneys which it sought to recover. But in many and lengthy paragraphs it sets forth the transactions in which appellant was involved and which it sought to carry out under the contract between Nicholson and Perry of date January 17, 1907; the relations of appellant thenceforth to the cement company and its control of the board of directors of that company and its subsidiary companies which owned the plants in Kansas and Texas, its extensions of credits to the cement company, and its direction of the affairs and business, in general, of that company; fraudulent conduct, as appellee alleges on information and belief, on the part of appellant in relation- to, and in conducting the business of, the cement company and its subsidiaries, as well as toward the Bowling Green Trust Company in connection with taking down the 10,000 shares collateral and substituting others, and the fiduciary relations theretofore existing between appellant and the trust company, and attaches interrogatories for the purpose of requiring a disclosure and accounting in relation to the charges made. “Thus (on the face of the bill) there were in the case, as ingredients to support the jurisdiction of equity discovery, account, fraud, misrepresentation and concealment” (Tyler v. Savage, 143 U. S. 79, 95, 12 Sup. Ct. 340, 36 L. Ed. 82), and the fiduciary and trust relations. A court of equity takes cognizance of controversies involving a trust relation, whether it be a resulting' one growing out of the relations of the parties and their acts toward each other, or a *533constructive one raised and interposed by a court of equity to prevent accomplishment of fraudulent purposes. Hopkins v. Grimshaw, 165 U. S. 342, 358, 17 Sup. Ct. 401, 41 L. Ed. 739; Clews v. Jamierson, 182 U. S. 461, 479, 21 Sup. Ct. 845, 45 L. Ed. 1183.
[4] Moreover, the objection was not made until after answer, trial and submission of the cause to the court, and this court has given a short and direct answer to the contention. “One who consents to the hearing in equity of a legal cause of action, or to the trial of an equitable cause of action at law, is'thereby estopped from successfully objecting for the first time in an appellate court to the method of trial which he adopted.” Highland Boy G. M. Co. v. Strickley, 116 Fed. 852, 854, 54 C. C. A. 186, 188 and cases there cited. Southern Pacific R. R. Co. v. United States, 200 U. S. 341, 26 Sup. Ct 296, 50 L. Ed. 507, s. c. 133 Fed. 651, 66 C. C. A. 581; Tyler v. Savage, 143 U. S. 79, 97, 12 Sup. Ct. 340, 36 L. Ed. 82.
[5] 3. One of the defenses set up in the answer was that the contract between Nicholson and Perry, as representing the bank, was an agreement and transaction into which the bank could not enter, that it was ultra vires the bank, and that the bank is not liable for any of its acts under that contract; and this is now relied upon. That' this position cannot be maintained, where the proceeding is to recover moneys which have gotten into the hands of the bank but belong to the plaintiff, we need only to call attention to what is said in Louisiana v. Wood, 102 U. S. 294, 299, 26 L. Ed. 153, and Citizens’ National Bank v. Appleton, 216 U. S. 196, 30 Sup. Ct. 364, 54 L. Ed. 443.
[6] 4. The appellant was liable for the' dividends on the 10,000 shares declared and paid by the cement company and coming into appellant’s hands with knowledge of the facts while the shares were held as collateral on the indebtedness to the trust company.- Those dividends were as follows: One of twenty-five per cent, declared February 6, 1908, $62,500; one of fifty per cent, declared December 23, 1908, $125,000, and two semi-annual dividends declared in 1907 and two in 1908, each two per cent., $20,000 — total, $207,500. Thereafter in July, 1909, the bank remitted the trust company $50,000 as a partial payment on Nicholson’s renewed note, and in July, 1910, a like amount, thus reducing the principal to $150,000; and it also paid the interest on the loan up to July 1, 1911. The total interest payments thus made amounted to $57,875, figured at the rate of six per cent, which appears to be the average rate charged. The bill alleges that these partial payments and interest up to July 1, 1911, were made by appellant. The partial payments were made long after all of the dividends on the common stock were declared and received into the bank, and the far greater part of the interest was also paid after those dividends had been declared and received. We see no reason why these payments amounting to $157,875 should not be charged against and taken out of the dividends theretofore turned over to the bank, thus leaving $49,625 of those dividends unaccounted for; and we believe this ought to be done, on which amountappellee was entitled to interest at six per cent, per annum from *534January 1, 1909, the day the fifty per cent, dividend was made payable. Even the common count for their recovery is said to be equitable in character. A defendant in such'an action is required to account only for what he has actually received of the moneys belonging to the complainant. We are not unmindful of the fact that notwithstanding the allegations of the bill that the payments were made by the appellant, the answer alleges and the proof discloses that before the partial payments were made the appellant went through the form of taking Nicholson’s -note in each instance for the amount of the payment and then remitted; but looking at substance and not form, it is evident that the moneys so used were put up by the bank, and the same is true of the interest payments.
After the exchange of collateral, the trust company taking 14,000 preferred shares in lieu of the 10,000 common, five semi-annual dividends of three and a half per cent, each were declared and paid on the preferred stock. The first three of these dividends were declared while the trust company held the 14,000 shares in pledge, but when the last two were declared the trust company held only 11.000 of said shares, it having surrendered to the St. Eouis bank 3.000 of said shares oh July 25, 1910, at the request of the bank. None of these dividends, as such, were1 paid over by the bank to the trust company. They were as follows: three and a half per cent, on 14,000 (face value $350,000), payable July 2, 1909, $12,250, three and a half per cent, payable January 1, 1910, $12,250, and three and a half per cent, payable July 1, 1910, $12,250, three and half per cent. on. the 11,000 (face value-$275,000), payable January 1, 1911, $9,625, and three and a half-per cent, payable July 1, 1911, $9,625— a total in dividends on the preferred while held by the trust company of $56,000. It is fairly inferable from the proof that all of these dividends were paid into and taken over by the bank and applied by it in the same manner that it used the dividends on the common stock; and while the bill does not make specific claim to them, its general prayer is sufficient for that purpose. The appellee was therefore entitled to recover the dividends declared on the preferred stock . while it held it in pledge as collateral security, with six per cent, added thereto from the dates on which they were severally payable.
[7] 5. There is no basis in this action on which recovery of the proceeds on sale of the common stock by appellant can be rested. Neither the appellee nor its predecessor in interest could be said to be the owner of those proceeds when they were taken over by appellant. The sale from which the proceeds arose was made in December, 1909, which was one year after the common stock had been surrendered and delivered back to the pledgor. It is familiar law that the validity of a pledge depends upon its delivery to and continued possession by the pledgee. Jones on Collateral Securities & Pledges (3d Ed.) §§ 23 and 40. In Casey v. Cavaroc, 96 U. S. 467, at page 477 (24 L. Ed. 779), it is said:
“The difference ordinarily recognized between a mortgage and a pledge is, that title is transferred by the former, and possession by the latter. Indeed, possession may be considered as of the very essence of a pledge (* * *); and *535if possession be once given up, the pledge, as such, is extinguished.” Bidstrup v. Thompson (C. C.) 45 Fed. 452, 454; Thurber v. Oliver (C. C.) 26 Fed. 224; Insurance Co. v. Iron Co. (C. C.) 81 Fed. 439, 445; Pauly v. Loan & Trust Co., 58 Fed. 666, 7 C. C. A. 422; Phelps v. Church, etc., 115 Fed. 882, 53 C. C. A. 407, s. c. 99 Fed. 683, 40 C. C. A. 72.
The trust company was not the owner of the 10,000 common shares and had no interest or special property right in them as pledgee after it delivered them back to the pledgor, and appellee cannot therefore successfully claim that at the time the bank sold the shares and received the proceeds it was disposing of property which belonged to the former. Indeed, we do not understand that any such claim is asserted, but the contention in that respect is that recovery may be had because the shares were obtained from the pledgee through deception and fraud practiced by the pledgor and the bank. That is to say, the tort is not waived but expressly relied upon. An action cannot be ex contractu for one purpose and ex delicto for another. The tort must not only be waived in order to maintain assumpsit; but when waived it is no longer an element in the case, not even in defense, for the defendant could not set it up. Gibson v. Stevens, 3 McLean, 551, Fed. Cas. No. 5401, and citations to the point. And when waived plaintiff’s case rests upon ownership or right of property, which must be established. 2 Greenleaf, Ev. (15th Ed.) § 120; Janes v. Buzzard, Hempst. 240, Fed. Cas. No. 7,206a.
. But conceding a right and duty to here consider the alleged fraud in taking down tlie common shares and substituting the preferred, and conceding that such fraud was established, and then giving to it the force and effect which it would be entitled to receive hi an action ex delicto, still there would be no ground for. recovery, because no damage is shown in that transaction. We cannot assume that the common shares (ex dividends) were more valuable than the preferred at the time of tlie exchange.
As the amount awarded to the complainant by the decree below exceeded what it was entitled to recover there must be a reversal, with costs to appellant and a remand of the cause with direction to enter a decree for complainant for an amount to be ascertained as pointed out in the opinion of this court.
<&wkey; For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes-
<&wkey; For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes