Jones v. Kent — 45 N.Y. Super. Ct. 66

Majority

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J. WYMAN JONES, Plaintiff and Appellant, v. GEORGE L. KENT, Administrator, &c., of E. ROCKWELL, Deceased, et al., Defendants and Respondents.

Before Van Vorst and Speir, JJ.

Decided March 3, 1879.

Headnote

Sale op personal property.—Agreement to share proceeds op RESALE, ABOVE A CERTAIN SUM, WITH VENDOR.

The following memorandum was signed by the defendant’s intestate and delivered to the plaintiff, and forms the basis of this action:

“Received of J. W. J., by agreement, one thousand shares of St. Joe Lead Stock, for which I have paid him $3,000. The understanding is, that I am to give said J. one-half of whatever price the same is sold for, when sold, over and above that sum.”

Meld, that the above memorandum is evidence of an absolute sale of the property therein mentioned, and that, until the holder of the said property thereunder, who has the sole and exclusive right of disposal, elects to sell the same, the vendor can have no possible claim thereon; that an action to compel the sale of the property, and a distribution of the proceeds, will not lie (Lorillard v. Silver, 36 N. Y. 379 ).

Also held, that to construe the language thus employed as imparting an intention on the part of either party to have the stock and its earnings held or sold for their joint benefit would involve an interpolation of new matter at variance both with the terms and spirit of the contract.

This case distinguished from Wright v. Wood, 57 Barb. 471 .

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Appeal from judgment in favor of defendant.

This action was tried by the court without a jury, and was brought to compel the sale and a distribution of the proceeds of two thousand shares of the capital stock of the St. Joseph Lead Company, transferred by plaintiff to defendant Kent’s intestate, in June, 1876.

The court below held the following facts to be established by,the evidence:

The transfer was made in two separate lots of one thousand shares each, and on each occasion the said defendant’s intestate signed and delivered to the plaintiff a written instrument in the following form:

“ Received of J. W. Jones, by agreement, one thousand shares of St. Joe Lead Stock, for which I have paid him $3,000.

“The understanding is, that I am to give said Jones one-half of whatever price the same is sold for, when sold, over and above that sum.

“Dated N. Y., June [ ], 1866.

“E. ROCKWELL.”

Neither of such instruments differed from the other except in its date, one being dated on June 19, the other on June 29, 1866. On May 1, 1868, the defendant’s intestate, with the consent, as the complaint alleges, of the plaintiff, surrendered to the company one hundred and forty shares of such stock, and paid it $600 in cash, receiving in consideration of such surrender and payment two of its interest-bearing bonds for $1,000 each. Interest was duly paid upon such bonds until their redemption by the company, as hereinafter mentioned. At the maturity of the bonds, in August, 1871, the bondholders accorded to the company an extension of time of payment, and thereupon received, as a consideration for such extension, a divi

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dend in stock. As the owner of two $1,000 bonds the defendant’s intestate became entitled to and received as such dividend one hundred shares of such stock. At about the time of the transfer by the plaintiff to the said defendant’s intestate, the stock sold for and was worth in the market from $2.50 to $3’ per share. It declined in value shortly afterwards, selling at a very low price, and remained continuously depressed until the spring of 1874, when the payment of dividends was commenced. The stock thereupon rallied and became worth from $2 to $3 per share. The defendant’s intestate died in February, 1874. Dividends amounting in the aggregate to $3,206 have since been declared and paid upon the stock held by him at the time of his death. In December, 1875, the two bonds for $1,000 each, above mentioned, were purchased by the company at ninety-five per cent, of their par value, and accrued interest. At the commencement of this action the stock had attained the value of and is now worth from $7 to $8 per share.

The plaintiff claimed that he transferred the said stock to defendant’s intestate “ in trust for the 'benefit of both partiesthat it was verbally agreed between them ‘ ‘ that said two bonds should stand upon the same footing as the stock, and that plaintiff should be interested therein as in said stock.” He further claimed to be, in like manner, interested in the one hundred shares of stock issued to defendant’s intestate, as a bonus, upon the extension of time of payment of the bonds, and that siich shares were held upon the like trust. He, therefore, demanded judgment, declaring the existence of such a trust in his favor, and directing a sale of the stock, an accounting with respect to such dividends and interest, and a final distribution, according to respective rights and inter

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ests of the parties, as upon such accounting they shall be ascertained and determined.

No evidence in support of the plaintiff’s claim to a beneficial interest in the stock, after its transfer by him, other than such as the two written instruments of May 19 and 39, 1866, may afford, was adduced at the trial.; though it was claimed that the surrounding circumstances, as above set forth, require such a construction of those instruments as will fully sustain the claim of the plaintiff in this regard; and it was urged and insisted, that under and by virtue of the instruments themselves, the plaintiff must be deemed to have retained an equitable interest in the stock, and in all profits and advantages accruing therefrom ; the relation between the two parties being that of joint adventurers in the transaction.

Knox & Jones, attorneys, and William, Stanley, of counsel, for appellant.

Porter, Lowrey, Soren & Stone, attorneys, and Grosvenor P. Lowrey, of counsel, for respondent.

We are of opinion that there was an absolute sale of the stock to Rockwell, for the consideration expressed in the written memoranda, and which was paid by the vendee. That feature distinguishes this case from Wright v. Wood ( 57 Barb. 471 ). In that case there was no sale of the stock to the defendant.

This case, as was suggested by Sanfobd, J., below, falls within Lorillard v. Silver ( 36 N. Y. 379 ), and. is decided by it. We are of opinion that the sale of the stock by the defendant, the representative of the vendee, cannot, upon the facts found, be hastened by the plaintiff. The legal title to the shares, with the absolute and exclusive right to dispose of same, passed to

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the vendee, and is not liable to be interfered Avith by the vendor, as to the time Avhen, or the price at which, the same shall be sold.

The vendee could have sold at any time after he acquired title,' had his exigencies demanded it, although he should fail to realize even Avhat he paid for the same, without accountability to the vendor, Avho could not have been called upon to bear any portion of the loss. On the other hand, the vendee, and those who now represent him, if they concluded it was most prudent to hold the property in the expectation of a further appreciation, should not be restrained from the exercise of their judgment and discretion in that regard.

We should not, through a judicial sale, ordered against the opposition of those who own the stock, frustrate their expectation of a further advance in the value of the property.

We cannot accept the conclusion that Rockwell received or held the stock in trust, and the plaintiff, as a beneficiary, can compel its sale at such time as he may elect. Such trust relation is in direct opposition to the terms of the memoranda made at the time of the transfer, which are clear and unambiguous.

But Avhenever the holder shall elect to sell, and as to the time, he is to be the exclusive'judge, and should there be realized on the sale any sum over and above what Rockwell had for the shares, then and not until then can the plaintiff interpose any just claim, and that for his proportion of the excess.

We cannot perceive that the plaintiff, under the facts found by the j udge at special term, is entitled to any accounting with respect to the one hundred and forty shares of stock surrendered to the Lead Company, or the proceeds of the two bonds secured in exchange therefor.

In addition to the surrender of the one hundred

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and forty shares, to which the plaintiff assented, Rockwell paid in money §600. It is found by the judge at special term that there was no understanding or agreement that the plaintiff should be interested in the bonds, or that Rockwell should hold the bonds upon any trust.

' In no event has there been any such sum realized by the defendant as to justify any accounting, by the terms of the memoranda in writing. We find no error in the rulings of the judge at special term ; and for the reasons above expressed, as well as those quite clearly stated in the opinion of Sanford, J., at special term, the judgment appealed from should be affirmed.

Speer, J., concurred.

Cases cited

Wight v. Wood 57 Barb. 471 N.Y. Sup. Ct. 1867-05-06 p. 66, p. 69