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and 120 New York State Reporter stocks and obtain from the pledgee advances of money thereon, and the latter, by such transaction, obtains a good lien thereon which he may enforce by a sale of the pledge without notice to the owner of the legal title, and without incurring any liability to him therefor, or to the broker making the pledge. The duty and obligation which the broker owes to his customer, however, is quite different. It was said by this court, in speaking of such obligation:
“The plaintiffs might take title to the securities in their own name, and were not bound to retain or deliver the identical securities purchased for the defendant. Their duty was to keep on hand, or under their control, either the securities of the defendant or a like kind and amount of securi. ties, and to have them in such situation that the defendant, by paying the amount due by him thereon, could at any time obtain them. This was what the plaintiffs agreed to do, and, so long as they did this, the fact that they used the securities while in their possession, awaiting redemption by the defendant, would not amount to a conversion thereof."
"Any disposition of the defendant's securities by the plaintiffs which would deprive him of his right to an immediate possession thereof, upon pay. ment or tender of the indebtedness by him to the plaintiffs on account of such securities, would amount to a conversion thereof. A sale or loan would do this, no securities of a like kind and amount being kept in their place, because the securities would be gone and could not be delivered to the de. fendant."
Douglas v. Carpenter, 17 App. Div. 329, 45 N. Y. Supp. 219.
While, therefore, the defendants herein had authority to pledge the securities to secure loans to them, yet they were bound, in making use of the securities, to at all times during the life of the transaction keep themselves in readiness to deliver such securities, or an equivalent number of the same kind of shares, to Frank whenever he should offer to pay the unpaid portion of the purchase price. If the stocks were so pledged that delivery from the pledgee could be had when demanded by Frank upon payment by him of the unpaid purchase price, it would answer the obligation assumed by the broker, even though he did not have other shares of the same stock upon hand to deliver, as all Frank was entitled to was the delivery of the shares to which he was entitled upon payment, and, if he could obtain them by payment, conversion of the stock by the broker could not be predicated of the transaction. In the numerous cases which have arisen, the sale of the stock which has been held to be a conversion was usually by the affirmative act of the broker. In the present case the sale was not in fact made by the broker, but by the pledgee of the stock. It has been said that under such circumstances there was no conversion of the stock by the broker, as he was not guilty of conversion in pledging the stock, and took no affirmative steps resulting in its sale; that, therefore, his act constituted only a breach of the contract which he had made, but did not constitute a conversion of the stock by him. We think this contention cannot be supported. The acts of the defendants herein placed the stock beyond their power to deliver the same when called upon so to do, and they did not keep on hand an equivalent number of other shares to meet the demand. They could only make use of the stock by certainly guarantying their ability to procure and deliver when called upon by the owner so to do. When they pledged the stock to secure their own loans, they did so at the peril of being able to deliver the same if delivery was demanded by the owner and he tendered payment. They were not authorized to pledge it, except upon that condition. It was their act which placed it beyond their power to deliver this stock or its equivalent when Frank made demand upon them so to do. When that demand was made, they were without ability to perform, and, as they had not complied with the conditions which alone gave them the right to pledge the stock, the resultant sale of the same became by operation of law their act, and such act was as to them, and between them and Frank, a conversion of his property. In Lawrence v. Maxwell, 53 N. Y. 19, the action was for conversion of certificates of stock delivered by the customer to margin a gold transaction by a broker. The stocks were hypothecated by the broker with the knowledge of the customer. Thereafter the plaintiff tendered to the broker the amount secured by the delivery of the stock and demanded its return, and the broker refused, from inability to comply with the demand. Judge Allen, in delivering the opinion of the court upon this subject, said:
"Conceding the right to use the stock pledged, by way of hypothecation or otherwise, as claimed, and that it was, at the time of the tender and demand, lawfully out of the actual possession of the defendant, it was his duty at once to regain the possession and restore the same to the plaintiff. A neglect or refusal to do so gave to the plaintiff an action as for a conversion of the property. Franklin v. Neate, 13 M. & W. 431 It is immaterial whether the stock was hypothecated by the defendant upon a loan of money for the benefit of plaintiff's transaction or for his own purposes. In either case the duty and the obligation were the same.
If the pledgee may use the thing pledged, he must do so at his peril, and so use it as not to affect the ultimate right and ability of the pledgor to have it again, when the lien shall be discharged. It may
be further said that this question was not raised or in any wise presented upon the trial. Indeed, the proof shows that plaintiff regarded the act of sale by the pledgees as their act, for, in the notice which they gave, the statement was, “We have sold for your account and risk," and no claim was made that they were not chargeable with the legal results which flowed from that transaction, or but that it should be considered as their affirmative act; and, as the question was not raised upon the trial, it is not available to be considered upon this appeal. That the pledgees exercised a legal right when they sold the stock does not answer to relieve the defendants from their obligation to deliver the same when demand was made upon them for delivery. We are of opinion, therefore, that the failure to deliver the stock when demand was made upon them so to do operated as a conversion of the same, and that therefore this action can be maintained.
It is said, however, that there was no assignment by Frank to the plaintiff of the cause of action arising out of the conversion. The assignment in form is of the right, title, and interest of Frank in and to a specified number of shares of stock, which is the stock which was sold. No mention therein is made of an assignment of the
and 120 New York State Reporter cause of action, and it is claimed, therefore, that the cause of action did not pass. Such point was raised, as the defendants moved to dismiss upon that ground. It was said by Judge Allen in Sherman v. Elder, 24 N. Y. 381:
“An assignment of the property by name, after conversion, carries the right of action for the conversion. 'Ut res magis valeat quam pereat.' Courts will give effect to a transaction if possible, and so construe an instrument as to give effect to the intent of the parties."
See, also, Fitch v. Rathbun, 61 N. Y. 579. The court correctly charged the jury that even though there was failure, after notice, to put up the margin, it would not excuse the giving of reasonable notice of the time and place of the sale. There is no evidence in the case which would justify a finding that any notice was given of the time and place of sale. The defendants did not pretend that they gave any notice, nor does the evidence show that a reasonable opportunity was given to deposit further margins. On the contrary, the evidence is satisfactory to show that no such opportunity was given, and testimony which tends otherwise is not sufficient to discredit it. The court submitted to the jury the proper rule of damage, and the amount of the verdict finds support in the evidence.
These views lead us to the conclusion that the judgment and order should be affirmed, with costs. All concur.
CARLING V. CARLING.
(Supreme Court, Appellate Term. December 23, 1903.) 1. HUSBAND AND WIFE-SEPARATION-CONTRACT FOR SUPPORT-CONSTRUCTION.
A contract made between a husband and wife in view of their existing separation, whereby he promises to pay to her or her assigns a stateil monthly sum for her separate maintenance and support, is an attempted agreement between the spouses, though there is another party to the agreement, alluded to therein as a trustee, whose office is undefined, and whose only duty is an engagement to save harmless the husband
from further support and from debts contracted by the wife. 2. SAME-DOMESTIC RELATIONS LAW-CONSTRUCTION.
The right of the wife to support is not a property right, within the meaning of the domestic relations law (Laws 1896, p. 220, c. 272) 21, granting a married woman the power of contracting in relation to
her property as if she were unmarried. 3. SAME.
A contract made between a husband and wife in view of their existing separation, whereby he promises to pay to her or her assigns a stated monthly sum for her separate maintenance and support, is not sanctioned by the domestic relations law (Laws 1896, p. 2:20, c. 272) § 21, granting a married woman the power of contracting in relation to her property as if she were unmarried, but providing that a husband and wife cannot contract to alter or dissolve the marriage or to relieve
the husband from his liability to support the wife. Appeal from Municipal Court, Borough of Manhattan, Third District.
13. See Husband and Wife, vol. 26, Cent. Dig. $ 1046.
Action by Alice L. Carling against James L. Carling. From a judgment for plaintiff, defendant appeals. Reversed.
Argued before FREEDMAN, P. J., and BISCHOFF and
James W. Osborne, for appellant.
BISCHOFF, J. The action was by the wife against her husband to recover upon an alleged agreement in writing whereby, in terms, he promised to pay to his wife, or her assigns, a stated monthly sum for her separate maintenance and support, and from a judgment for the wife the husband has appealed. The instrument recites, and the fact was conceded upon the trial, that the alleged agreement was made in view of the existing separation of husband and wife; hence no rule of public policy was contravened. Greenhood on Public Policy, p. 484; Galusha v. Galusha, 116 N. Y. 635, 22 N. E. 1114, 6 L. R. A. 487, 15 Am. St. Rep. 453; Clark v. Fosdick, 118 N. Y. 7, 22 N. E. N111, 6 L. R. A. 132, 16 Am. St. Rep. 733; Duryea v. Bliven, 122 N. Y. 567, 25 N. E. 908. This, however, does not preclude the question whether the court below had before it any agreement upon which a recovery was authorized.
The writing does not purport to be the usual tripartite agreement between the spouses and a third person, whereby the husband promises to pay to the latter a stated periodical sum to be applied towards the wife's support. True, Marrion S. Kennedy is a party to the alleged agreement, and is therein alluded to as "a trustee"; but, aside from her engagement to save the husband harmless from further support and from debts contracted by the wife, her office is wholly undefined. The instrument, therefore, was essentially an attempted agreement between the spouses, the husband's promise being to pay to the wife "or her assigns,” and not otherwise, and upon this theory only could the plaintiff have proceeded when she sought to recover in her own right, and in a tribunal which, because it was without equity powers, could not recognize the duality of husband and wife in respect to the subject matter of the purported agreement. At common law husband and wife were unitas personarum, and therefore prevented from contracting inter sese for any purpose (White v. Wager, 25 N. Y. 328), and, unless this disability has been removed by the domestic relations law (Laws 1896, p. 215, c. 272), the instrument under discussion was not an agreement, the constituent element, “parties,” being absent.
Regarded in law as one person, neither the husband nor the wife could be promisor or promisee, and, if the duality of the spouses be urged for equitable consideration, it could be only to deny the jurisdiction of the court below to proceed in the action. Lawrence v. Lawrence, 32 Misc. Rep. 503, 66 N. Y. Supp. 393.
The domestic relations law (section 21, p. 220) provides as follows: "A married woman has all the rights in respect to property, real and personal, and the acquisition, use, enjoyment and disposition thereof, and to make contracts in respect thereto with any person, including her husband, and to carry on any business, trade or occupation, and to exercise all
and 120 New York State Reporter powers, and enjoy all rights in respect thereto, and in respect to her contracts, and be liable on such contracts, as if she were unmarried; but a husband and wife cannot contract to alter or dissolve the marriage or to relieve the husband from his liability to support his wife."
Plainly, this operated only to remove the contractual disability of the spouses, inter sese, so as to permit of contracts in respect to property, real and personal, which the wife has or may acquire, and such trade, business, or occupation as she may engage in. The husband's duty of support is to support his wife adequately if she be without means, or without sufficient means. It is not satisfied by merely making some provision towards her support, and in no case can this duty be said to constitute a property right in the wife. It does not depend upon, and cannot be regulated or controlled by, the marriage contract, but attaches to, and arises from, the status of marriage which is created or entered into by means of the contract. The duty attaches to a condition which the parties may voluntarily assume, but the duty is integrally a part of that condition.
It is no more the wife's property, to be relinquished or exacted at her volition, than is a parent's duty to support his minor child the property of the latter. It is dictated by the needs of social protection, and is among the duties imposed by the state or body politic in perpetuation of its autonomy, and in the exercise of its sovereign right of self-preservation. The means of redress may be afforded if these duties are neglected, but no attempted abandonment of them by the persons who will derive inimediate benefit from their performance can impair the right of the state or body politic to insist upon and to enforce their observance. No rule of statutory construction can operate to enlarge the scope of the domestic relations law. Poillon v. Poillon, 49 App. Div. 341, 63 N. Y. Supp. 301. The proviso that "a husband and wife cannot contract to alter or dissolve the marriage, or to relieve the husband from his liability to support his wife," is preceded by no general enactment, the scope of the preceding enactment being expressly limited to the property of the wife, real and personal, and such trade, business, or occupation as she may engage in. Upon no logical theory, therefore, can the proviso be given the effect of extending legislative intention by implication, and the enacting clause be held to include more than is within the obvious meaning of its language. 23 Am. & Eng. Ency. of Law (1st Ed.) p. 437; Tinkham v. Tapscott, 17 N. Y. 152.
It seems strained and tortured to say that the state or body politic intended by implication to renounce that which is of the essence of its existence, and which, therefore, it was its vital policy to preserve. The purport of the proviso should be deemed to have been no more than the legislature's declaration of the state's intention to maintain the marriage status, and the husband's obligation to support his wife, as theretofore, free from all contractual control of the spouses. It is specious only to say that an agreement between husband and wife, whereby the former makes some provision for her support, is not an agreement to relieve the husband from his liability, but one in furtherance of it; that it is not within the inhibition of the proviso, and that it is therefore sanctioned. The husband's duty is to support his wife