Barry v. Fisher

39 How. Pr. 521

• Court: New York Supreme Court
• Decided: May 15, 1870
• Status: Published

Opinion

G. G. Barnard, J.

The affidavit on which the attachment was issued, states in substance, that the action is brought against the defendants for the wrongful conversion of personal property of the plaintiff, and the complaint which is made a part of the affidavit, alleges, that in consequence of the wrongful sales, detentions and conversions therein mentioned, the plaintiff has sustained damage- in the sum of one hundred and twenty-five thousand dollars, and''judgment for that amount is demanded, and interest from the 1st day of October, 1869. The plaintiff and defendants are residents of the city of Baltimore. The affidavit also states that the defendants have property within this state, to wit: stocks,-bonds and gold, in the hands of Van Schaick & Co., Hallgarten & Co., and others, and accounts with said firms, balances due the said defendants by said, firms, margins on deposits with those houses and balances which will result in favor of said defendants on a settlement of accounts with said firms. On these papers a warrant of attachment issued to the sheriff of this county, under which he claims to have attached certain balances alleged to be due the defendants from Van Schaick & Co., and Hallgarten & Co., brokers, doing business in this city, and certain stocks, bonds and' gold. It appears from the affidavits of Mr. Jenkins Van Schaick,'and of Charles S. Hallgarten, that all moneys and property in their hands, received from the firm of William Fisher & Sons, of Baltimore, have been received since the 1st of January, 1870, as margins for and on account of contracts made since that time, on account of individuals and corporations in .Baltimore, customers of .the Baltimore firm, and whose names were disclosed to the New York brokers before named, at the time of, or prior to the receipt of them, and prior to the issuing of the attachment. That the money and property so received belong to the defendants, and W. Williams Bemington who have constituted the firm of William Fisher & Sons since the 1st day of January, 1870, and that the securities in the hands of said New York brokers are subject to fluctuation in price and value, and that the business between them and the Baltimore firm is that of a general banking and brokerage business, and that the interests of the New York firms are injuriously affected by the attachment, as well as the interests, of Remington and others. Mr. Remington’s affidavit shows that he became a member of the firm, January 1st 1870, and that since that period the firm has been composed of -the defendants and himself, and that since that date, on account of their numerous customers in Baltimore, they have caused stocks, bonds and gold to be bought and sold in New York, through the brokers before mentioned, and that margins and moneys derived from and furnished by the customers and dealers with said firm in Baltimore from time to time, since said 1st day of January, 1870, have been forwarded and remitted to the New „York brokers, to serve' as moneys and margins in their 'hands, on account of the transactions entered into by the New York brokers for the account of the Baltimore firm, who were acting as brokers for their Baltimore customers, and he claims that all the money, funds, credits and property of said Baltimore firm standing to their credit,with, or held by the New York brokers, since the 1st day of January, 1870, are applicable to and should be applied in settlement of the affairs and liabilities of their firm as now constituted, and that' his, as well as their customers’rights are seriously injured by the attempt to attach the funds before mentioned. ' The plaintiff’s claim for damages arises out of the sale by the defendants of certain stock in September last. The defendants, Remington, the Baltimore principals, and the New York-brokers on these facts claim that the money and property in the hands of the New York brokers cannot be attached by the plaintiff. The plaintiff and defendants reside in-Baltimore, and the papers show that the plaintiff has commenced an action there to recover damages for the same conversion, which action is ■ pending and undetermined;

The defendants suggest that an attachment ought not to issue in an action for the detention and conversion of property where the damages are uncertain, and must be assessed by a jury. The allegation here is, that the defendants refused to deliver the plaintiff’s property to him on demand, and that they have wrongfully.detained and haveYonverted the same to their own use,f and he claims damages as before mentioned, and the summons must of course be for relief, and cannot be for a sum certain.' In Gordon agt. Gaffry, (11 Abb., 1,) Hogeboom, J., held that the Code 'did not authorize an attachment in actions for wrongs, and says that it refers to cases where a sum of money is specified in the summons, and does not embrace cases of' trespass, trover, slander, libel, assault and battery, and kindred actions. This action is clearly what would have1 been called before the enactment of the Code, an action of trover. The Code, as it then stood, authorized the issuing of the warrants of attachment, “in an action for the recovery of money.” Knox agt. Mason, (3 Rob., 681,) holds that an attachment could not issue in an action for the taking and conversion of personal property, and the Judge says: “ Yet the plaintiff in an action of-tort, must be at liberty to fix his own damages; and the court has no discretion m determining the amount. If the attachment is discharged on giving an undertaking, it must be for double the amount claimed by the plaintiff’s complaint. * * Such a provision would be equivalent to one allowing the. plaintiff'to seize as much of the property of a foreign corporation or non-resident debtor, as he thought proper in action of tort.” The case in 11 Abb., 1, is approved. This court at general term, in this district, in Shaffer agt. Mason, (43 Barb., 501,) held, that an attachment cannot issue as a provisional remedy, under section 227 of the Code, in an action of trespass for taking and carrying away personal property, the claim being for damages not ascertained but to be'assessed by a jury.

The defendants concede that the provisions of the Code-have been changed since these decisions, -so far as to warrant the issuing of the attachment in an.action for the wrongful conversion of property, but not for the wrouful detention. They insist that where the property is detained simply, the plaintiff has a clear remedy by an action to recover the possession of the property alleged to be detained which he cannot have where it has been converted. The Code authorizes as before remarked, the issuing of the warrant for the wrongful conversion of property, but in no other action of tort. It cannot issue in the case of assault and battery, and the like, and I think the amendment of 1866, must be regarded as a legislative declaration, that it shall not issue in any case of tort, except for the wrongful conversion of personal property. It certainly cannot issue in action to recover damages for trespass to either real or personal property. Is an action to recover damages for the detention of personal property equivalent to one to recover damages for its conversion f Unless it is, this attachment has been improvidently issued, for, as has been frequently held in the cases cited, in actions of tort to recover damages which must be assessed by a jury, it cannot issue, and as I before stated, I think the legislature intended to-authorize its issuing i‘n tort, in the single case of a wrongful conversion of personal property; but I am of the opinion that a wrongful detention of property is itself a conversion.^ (2 Green. Ev., § 642.)

Van Schaick & Co., and Hallgarten & Co., insist that they are seriously injured by the operation of the attachment, that they hold certain margins on certain stocks and gold which they are carrying by direction of William Fisher & Sons, for named customers and principals of theirs at Baltimore, and that the prices and values of the securities thus held, are daily fluctuating, and that their rights will be seriously impaired if the attachment stands. Upon the papers before me, there can be no dispute about what -the course of business between the Baltimore firm and the Hew York firms has been since January 1, 1870. Customers and dealers with the Baltimore firm employ the latter to purchase gold, stocks, bonds, and other securities in this market and furnish appropriate margins. These orders are executed by the Baltimore house, through the New York brokers before mentioned, and the margins and securities in the hands of the latter, in their accounts with W. Fisher & Sons, and standing to their credit, belong to their Baltimore customers and dealers. Gan these margins and these securities in the hands of the New York brokers, under these circumstances be attached, seized, and held by the sheriff to satisfy any judgment which may be recovered by the plaintiff against the Fishers, on account of transactions occurring in September," 1869’, is one of the questions" which was thoroughly discussed on the motion. Remington claims his right as partner to the credits and balances sought to be attached, and insists that he has the right to collect, control, and apply them in the ordinary course of the partnership, and that they are not liable to seizure upon an attachment in an action against his copartners. It must be borne in mind that the sheriff has not seized any securities belonging to the Baltimore firm, he could only attach the interest of the Fishers in whatever balance may be due them in the transaction before mentioned on a final accounting, and it is well settled that only the,surplus after the. payment of the copartnership debts and a statement of the accounts, can be seized. (Lyndon agt Gorham, 1 Galln., 368; Story, J.)

I am at a loss $to comprehend how, In an action commenced by attachment, which is a proceeding in rem, and where this court has no jurisdiction, whatever, over the persons of the copartners, such an accounting and statement can be had, and unless this can be done the attempt to attach any supposed interest or surplus must be abortive.

“ From the nature of partnerships, one partner cannot nave any separate right in any particular debt or article of property belonging to the partnership, liable to individual debts, but all the effects are. a joint interest, and each partner can have a separate interest only in his share upon the winding up and settlement of the partnership concern.” (Church agt. Knox, 2 Conn., 518.)

A work of great authority holds the rule absolutely, that partnership credits cannot be attached for the debt of one partner. (Drake on Attach., 3 ed., § 567, 570.)

And he maintains, with signal'ability, and cites numerous authorities in support of the doctrine, that the attachment of a debt due to a copartnership in an action against one of the partners, is justly distinguishable from the seizure on attachment or execution of tangible effects of the firm for the same purpose. (Drake on Attach., § 567.) The same doctrinéis maintained in Winston agt. Ewing, (1 Alabama, 129 ;) Johnson agt. King, 6 Humphreys, 233; Lyndon agt. Gorham, supra; Church agt. King, supra ; Atkins agt. Prescott, 10 N. Hamp., 1201; Thomas agt. Lask, 13 Louis., 277; Smith agt. M. Mirken, 3 Id., 319; Mobley agt. Loubat, 7 Miss., 318; Kingsley agt. Missouri Fire Ins. Co., 14 Missouri, 467.)

At section 570, Drake, upon this question, concludes thus: “ The position taken in the decisions which'have been referred to, is supported by the courts of New Hampshire, Vermont, Louisiana, Missouri, Tennessee, Indiana, Pennsylvania, Maryland and South Carolina. The contrary doctrine prevails in some states, but in the reported cases in these states we look in vain for any substantial foundation of reason or expediency upon which it can rest, or for any view calculated to shake our confidence in the conclusion that partnership credits can in no case be taken by garnishment to pay the individual debt of one member of a firm;” (and see Berry agt. Harris, 22 Maryland, 339.)

In this state the same doctrine was asserted in the Matter of Smith (16 Johns., 102.) This case was followed in Sears agt. Gearn, (7 How., 303;) Harris, J., in this cuse, in holding that a copartnership account book could not be seized under an attachment in an action against one of the partners, said: “ The attachment will'only operate upon the interest of the debtor against whom it issues, in the surplus which may remain after closing up the partnership accounts, and an order must, therefore, be entered, requiring the sheriff to restore to the defendant, Houghton, the account book seized by him.”

•These are the only cases in this state upon the direct question of attaching partnership . credits and -balances, although, in (16 Johns.,) goods were also attached. It was not involved at all in Brewster agt. Honigsburger, (2 Code Rep., 50,) as. shown by Harris, J., in Sears agt. Gearn, supra. Nor was the question involved directly in Abels agt. Westervelt, (15 Abb., 130,) b'ut the reasoning in this case supports the rule as contended for by Drake, and laid down in the cases decided in this state, Nor is Goll agt. Hinton, (8 Abb., 120,) in conflict with the, principle declared in the authorities already cited. There, a store of goods belonging, to the copartnership was seized on an attachment in an action against the individual partner, and on motion to restore the goods to the non-absconding partner, it was held that, inasmuch as the goods could have been seized on an execution against the individual partner, and his interest in them sold, they could be attached, and his interest, after recovery of judgment, could, in like manner, be sold, and no one ever doubted this doctrine.' Drake lays down the same rule, and is one of the authorities cited, and is mainly relied upon by the court in Goll agt. Hinton. But who will contend, for a single moment, that an execution can be levied upon the balance and credits in the hands of Van Schaick & Co., and of Hallgarten & Co. ? The case of Smith agt. Orser, (43 Barb.,) announces the same doctrine as Goll agt. Hinton, supra. In Smith agt. Orser, partnership property—tangible property—was seized by the sheriff under an attachment issued against a portion of the members of the firm, and the firm brought replevin against the sheriff, and this court, at general term, held that the property could be seized on attatchment, because it was executionable property, and that the goods being in the custody of the law, could not be taken from the sheriff, by an action to recover their possession. The court did not intend to over-rule the cases reported in (16 Johns., 102 and 7 How., 384, supra, and 7 How., 229.) If the balances and credits in the hands of the New York brokers cannot be reached by an execution issued on a judgment against the Fishers, the motion must be granted, otherwise, it must be denied, and this, as I understand it, is the test established by the numerous cases before cited, out of this state, .as well as by the reported cases in this state. What was said by Leonard, J., in Smith agt. Orser, supra, about Goll agt. Hinton, overruling, Sears agt. Gearn, war not necessary in the decision of the cause, was not concurred in by the court, and was said without bearing in mind that the property in Smith agt. Orser, was executionable, while that in Sears agt. Gearn—being account books—was not. I think it is perfectly cleár that the plaintiff cannot levy an execution upon, and, under it, sell the interest of the Fishers in the balances, and credits in the hands of their New York brokers.

Upon another ground, I think, the levy of attachment must be set aside and discharged. The margins and securities held by the New York brokers, belong to the customers of the Batimore firm, and the New York brokers have notice of this fact. The property belongs then to the Baltimore customers after they shall have accounted with their immediate agents, the Baltimore firm', and before that can be done, there must be an accounting between the Baltimore firm and their brokers in New York, and for the purpose of ascertaining what balance or credits, if any, have been attached, there must be an accounting between the New York brokers and the Baltimore firm, between the latter and their customers, and then; finally, between the members of the Baltimore firm and the ■ surplus, if any, after a statement of the copartnership matters may be applied to the payment of the indebtedness'.of the Fishers, if any, to the plaintiff. This statement alone, in my opinion, shows'that this possible surplus cannot be attached in an action against the Fishers. The importance, and to some extent, the novelty, of the question in this state, as well as the ability and learning displayed on the argument, have induced me to examine with great care the questions'involved, and, although, somewhat different from my first impression, I do not regret the conclusion at which I have arrived. The plaintiff* has already sued the Fishers in Baltimore.where all the. parties reside, for the same cause of action, and the action is still pending and undetermined. There is no question made as to the ability of the Fishers to respond to any judgment which may be recovered against them. Technically, the alleged conversion occurred in Maryland, and our courts have in some instances heretofore Effused to take cognizance of actions, to recover damages for torts committed in a sister state. We are overburdened now by the amount' of litigation constantly increasing and accumulating, and while jurisdiction should be entertained of parties and actions, when brought within existing rules and jurisdictions, I think we should not extend it, especially in a case like this, for which I find no precedent. If the attachment can operate as against the balances and credits in the. hands of Van Schaick & Co., and Hallgarten & Co., the precedent thus established may lead to disastrous consequences in view of the numerous financial transactions, involving undoubtedly many millions of dollars, at times occurring daily within this city. These Few York brokers, if their balances can be attached, are tied up; they cannot sell the securities which may decline in value pending this litigation, nor can they dispose of them because of insufficient margins. Thus at a glance, can be seen the very serious consequences which will result to business and financial transactions in this city, if the plaintiff’s views prevail. These considerations are proper when disposing of» a question involving a principle of great importance, and which may become a precedent. It must not be understood that. I invite discrimination on the part of the courts against residents of sister states. Far from it. I intend by the observations which I have made, to establish a rule which will work harmoniously with the interests of all, consistently with the interest of all, without discriminating in behalf of non-residents against those carrying on here, in part, the financial transactions of this great financial and commercial emporium, and although, they are not parties to this action, if injured they are entitled to relief. (Code section 229; Furman agt. Walter, 13 How., 350; Re Griswold 13 Barb., 412.)

In my opinion the motion must be granted. Let an order be entered setting aside the service of the attachment on Van Schaick & Co., and.Hallgarten & Co., and that the balances, credits, effects, stocks, bonds, gold and other securities in their hands to the credit of, or in account with W. Fisher & Sons, be released and discharged from the lien, effect and operation of the said attachment, and notice thereof to the same extent as though the same had never been issued or served. The attachment itself cannot be set aside.