CALEB HYATT, Respondent, v. FELIX ARGENTI, Appellant, 3 Cal. 151

The opinion of the court was delivered by Heydenfeldt, Justice. This is an action of trover for the wrongful conversion of certain securities, called scrip, requisitions, and bonds. The defendant was to make advances of money from time to time to the firm of Hyatt, Cox & Sheldon (who, in this action, are represented by the plaintiff Hyatt), and Hyatt, Cox & Sheldon were to place the securities, as fast as received, in the possession of defendant, accompanied by an absolute assignment in writing.

Various amounts were drawn by Hyatt, Cox & Sheldon from defendant, and the securities, placed in the hands of the latter, were sold at different times for their market value, and placed to the credit of the firm. These securities subsequently appreciated in value in a great degree. The plaintiff now insists that the defendant had no right to sell them without notice to him, and is, therefore, guilty of a conversion.

Upon the facts set out in the bill of exceptions, the court below decided, that by the rules of law, the defendant had no legal authority to sell or dispose of the securities, and was therefore guilty of converting them to his own use. Much argument and authority has been displayed upon the question, whether the holder of a mortgage or pledge of securities or personal property can sell when the debt becomes due, without notice to the mortgagor. From the evidence contained in the bill of exceptions, we think the consideration of that question is unnecessary.

It will not be doubted that a party depositing such securities may agree that they shall be sold at the option or pleasure of the creditor. And we can come to no other conclusion, than that such was the contract in the present case. It appears, according to the hill of exceptions, that the engagement between the parties took place in September, 1850. On the 24th October following, the firm of Hyatt, Cox & Sheldon, drew a draft on defendant directing him to pay, on the 30th October, to the order of- H.

Meigs, eight thousand dollars, “from the proceeds of the securities nowin your hands, and such other securities as will hereafter be placed in-your hands by us.” On the same day, another draft was drawn by them for two thousand dollars, payable on the 26th, using the same language. On the same day,'another, payable at sight, for two thousand dollars, and in the same terms. On the same day, a third draft, payable the 20th November following, for six thousand dollars, at sight, and in the same terms. On the 8th November, another draft, at sight, for $3086 61, in the same terms.

And-on 29th December, a draft is drawn by them for $7952 03, payable “when in funds from the proceeds pf the securities placed in your hands by us, after deducting the amount due you for cash advanced and the interest on the same, and also the amount due McCoudray.” An express stipulation in writing could not exhibit more clearly the authority of the defendant to sell the securities, than does the language of these drafts.

The money drawn for, was to be paid from the proceeds; proceeds can only be obtained by sale, and the language of the last-mentioned draft, “when in funds from the proceeds,” makes the deduction conclusive, that other sales had yet to be made by the defendant.

It appeals, moreover, from the evidence of Meigs, one of the plaintiff's witnesses, that he informed the plaintiff of the sale of the bonds, and the price for which they sold, at which he says, “ Hyatt objected to the price at which the bonds were sold, and said it was eating him up.” This is the language of a man complaining of hard fortune, but certainly not of breach of contract, or of bad faith, and it is pregnant with the admission of the right of the defendant to sell. This view of the case renders it unnecessary to consider the Other assignments of error.

It is clear to our minds that the defendant is not guilty of conversion, and the plaintiff has mistaken his action. If the defendant is indebted to him, his proper remedy is within the equitable jurisdiction of the coqrt by bill for an account. The judgment is reversed, and a nonsuit against the plaintiff is ordered with costs.