Citations
- 184 A.D. 3
Full opinion text
Dowling, J.:
Plaintiffs’ complaint sets forth ten separate causes of action, the first thereof being brought for the conversion of 1,104 shares of Singer Manufacturing Company stock, and the remaining causes of action having to do with all or part of said shares. The amount of testimony given herein together with the numerous exhibits render it impossible to more than outline the essential facts bearing on the plaintiffs’ right to recover. On June 17, 1910, plaintiff was the owner of 1,104 shares of Singer Manufacturing Company stock represented by one certificate, No. 3417. This certificate represented a stock dividend declared by the company upon a similar number of shares which had been bequeathed to plaintiff by her husband. After his death, plaintiff traveled abroad and there made the acquaintance of one Richard J. Hartman, who represented himself as wealthy, with extensive business interests in Europe and in this country, and, claiming to be intimate with the leaders of the financial world, succeeded in gaining the plaintiff’s confidence as well as her affections, and by a course of duplicity and fraud ultimately deprived the plaintiff of practically all her property. The first reference to any financial transactions between these parties is contained in a letter of Hartman, without date, asking for the loan of steel stock to establish a bank credit, as it would be as safe as in the plaintiff’s vault, and he offered to pay her six per cent interest while he used the stock and give her, when the “ St. Louis Car matter ” was concluded, $100,000 of the common stock of that company. On March 8, 1910, plaintiff wrote a letter to Van Schaick & Co., brokers, authorizing and instructing them to have transferred to their account for the use of Hartman, 100 shares of United States Steel preferred and 50 shares of Brooldyn Union Gas Company stock. The letter stated: “ Mr. Hartman has full and complete authority to use these certificates and he knows my wishes in respect thereto.” On September 27, 1910, plaintiff wrote the same firm, saying: “ Mr. Hartman has my full authority to use the securities in my account, now with your house, as he may elect and to adjust any and all accounts and to do all that he may deem fit therewith— Reposing full confidence in him this letter gives you complete authority to accept his instructions in the premises and to be governed by his wishes in respect thereto.” On April 28, 1911, plaintiff wrote to Hartman in London notifying him that she had given one Crandall 100 shares of Singer stock as she had promised Hartman — evidently a loan at Hartman’s request. These shares of stock with 168 more of Singer Company stock were in Van Schaick’s account when that firm failed September 12, 1911. The method by which, or the date when, these shares passed to the brokers does not appear. The brokerage firm of Van Schaick & Co. was in process of reorganization, and in connection therewith one of said firm brought Hartman to William S. McGuire, the attorney who was in charge of the firm’s affairs, and introduced Hartman as a man who would provide a special partner with capital. Hartman thereafter retained McGuire as his attorney in relation to the Singer shares, which had been repledged by the brokers with other banks, and McGuire acted for him in this connection and plaintiff signed the letter notifying the Singer Company not to transfer the 268 shares standing in her name, indorsed in blank, with the indorsement guaranteed by Van Schaick & Co., without further authority from her. Plaintiff later assigned to William S. McGuire all her claims against the brokers. On October 10, 1911, Hartman had brought McGuire 400 shares of the Singer stock to be shown as evidence of ability to raise new money for the firm, these shares being represented by four certificates in the name of the plaintiff. The manner by which Hartman came into possession of these shares is not explained, but he had told McGuire that Alexander Mackenzie was the man whom he had in view as the special partner in the brokerage firm on its reorganization, and that both Alexander Mackenzie and plaintiff had taken an interest in one of his alleged Russian enterprises in exchange for Central Railroad of New Jersey stock and Singer stock. The reorganization did not go through, and in connection with perfecting Hartman’s rights McGuire was asked to draw such papers as might be required for Mrs. Mackenzie’s signature. McGuire was to handle Hartman’s affairs generally, including the financing of the latter’s other enterprises, the use of plaintiff’s stock in the purchase of Tyson & Company (a theatre ticket agency), and in the investment of the proceeds in Hartman’s other matters.
On October 31, 1911, plaintiff signed a letter to the New Jersey Title Guaranty and Trust Company, stating that the bearer thereof, Mr. William S. McGuire, was her personal counsel and was authorized to pay the Rouse loan then held by the title company, seemed by 250 shares of the plaintiff’s Singer Manufacturing Company stock, and directing the company to deliver to Mr. McGuire said certificates of Singer Manufacturing Company "stock upon payment by him of the balance due on the loan. On the same date plaintiff signed a .letter to the Fifth Avenue Bank stating that the bearer thereof, Mr. William S. McGuire, was her personal attorney and was authorized to pay a loan of $10,000 theretofore made by said bank to her and secured by a certificate for 100 shares of Singer Manufacturing Company stock, and requesting said bank to deliver said certificate to McGuire upon payment by him of the principal of said loan with interest. A similar letter was written by plaintiff to the Hudson County National Bank, covering 336 shares of stock and 15 bonds. Thereafter and in November, 1911, similar letters were written to the National Park Bank covering 100 shares of stock; to the Manhattan Trust Company, which held a similar amount; and to the Coal and Iron National Bank, where were pledged 68 shares; making up the 268 shares in the Van Schaiclc loan. Shortly thereafter plaintiff received a telephone message at her country home purporting to be from the New Jersey Title Guaranty and Trust Company, calling her loan with them of about $33,000. When she returned to the city similar messages had been sent there. These in fact never had come from the trust company, but, believing that the loan was about to be called, plaintiff conferred with Hartman and asked him for advice, and he said not to worry, that he would visit the bank and see what could be done, and the next day he returned and said he had seen the bank and that he would take up the loan and pay it off for her, that he had plenty of money and was expecting every day $1,000,000 from England, and out of that would pay off the loan for plaintiff. But plaintiff refused to accept this and said she wished to pay the loan herself. Hartman did not propose to pay off this loan as an advance for plaintiff, but he was doing it on account of his friendship for her, and he said he had so much money that he would not miss the amount. He later reported to her that he had paid off the loan “ and taken it [the stock] to the Seaboard Bank and it was in the safety box there,” and when plaintiff asked him why he did not bring back the stock he said the back of the stock had been all written up and the Seaboard Bank was going to send to the manufacturing company for a new certificate in place thereof. What had transpired in the interim was that it had been discovered that, instead of 250 shares, there were 1,104 shares in the New Jersey Trust Company, and that the loan there was not a Rouse loan (Rouse being plaintiff’s nephew), but a loan made in the name of the plaintiff herself. The trust company having called attention to these errors in the letter dated October 31, 1911, one of its officials noted the necessary corrections to be made in the letter which Hartman returned to McGuire. In the meantime Hartman and McGuire, who met each other every day in McGuire’s office, determined that it was necessary to borrow $100,009 in order to pay off the loan that the New Jersey Trust Company held, and also a further loan of $41,000, approximately, made by the Hudson County National Bank, for which 336 shares of Singer stock and fifteen bonds of the New York and Hoboken Ferry Company had been given as collateral. McGuire asked one Harry Dunn, employed by the defendant brokerage firm of Luke, Banks & Weeks, to negotiate a loan of $100,000 on the Singer Manufacturing Company stock as collateral, and on December 11, 1911, Dunn notified McGuire that he had placed a $100,000 loan with the Seaboard National Bank, and that 600 shares of the Singer Manufacturing Company stock would be required as security. The Seaboard Bank had theretofore made a loan for McGuire on the security of some Singer stock redeemed from the Van Schaick loan. McGuire then redrafted the letter of October 31, 1911, so as to change it to the corrected form desired by the trust company, and delivered it in its corrected form to Hartman, together with a letter to the Singer Company (canceling the previous letter stopping any transfer of the stock), and a receipt to the trust company for the collateral. To these papers Hartman obtained the plaintiff’s signature, and she further wrote a letter which she sent direct to the trust company as follows:
“ 37 W. 89th Street,
“ New York City, Dec. 7th, 1911.
“ Mr. Evarts,
“ N. J. Tibie Guarantee & Trust Co.,
“ 83 Montgomery Street,
“ Jersey City, N. J.
“ Dear Sir.— I gave Mr. McGuire as my counsel a letter signed by me authorizing him to take up my loan and receive my collateral. I did this because I have been ill, unable to talle above a whisper and because I wanted the loan paid. I do not like to have these matters discussed over the Phone, especially when I am unable to answer it myself and as this is the second time this has occurred, I prefer to pay the loan and I trust you will act in accordance to my wishes expressed in my previous letter to Mr. McGuire.
“ Respectfully,