
    George S. Gandy, Respondent, v. John J. Collins, Sheriff of Richmond County, Appellant.
    Second Department,
    January 16, 1914.
    Personal property — sale in foreign State of interest in personal property located in this State — laws of this State govern—sheriff—liability for conversion — issues — evidence—res gestaa.
    Where a non-resident loans money on promissory notes of a resident of this State and receives as collateral security an assignment of personal property, which is located in this State and has remained in the continued possession of the borrower, an attempted sale of such property in the foreign State, without compliance with the statutes of this State, is void, and a sheriff taking and withholding possession of such property is liable in an action at law for conversion.
    In such an action the court has no right to inquire into the equities between the lender and borrower.
    Evidence of transactions between the lender and borrower, and of deelar'atibns by the latter, is admissibly as part of the rés aésta.
    
    
      Appeal by the defendant, John J. Collins, sheriff, etc., from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Richmond on the 22d day of January, 1913, upon the decision of the court, a jury having been waived.
    Judgment affirmed, with costs, on the opinion of Mr. Justice Kelly at Trial Term.
    
      Louis Marshall, for the appellant.
    
      Alfred G. Reeves and William P. Dalton, for the respondent.
   Jenks, P. J., Thomas, Carr, Rich and Putnam, JJ., concurred.

The following is the opinion delivered at Trial Term:

Kelly, J.:

In this action I find for the plaintiff. It appears that at the time the fifteen cars, title to which is in dispute, were taken in replevin by the defendant in the action of the Franklin Trust Company of Philadelphia against Brubaker, the trust company had no legal title to the cars, and had never been in possession of them. The cars were in the possession of G. S. "W. Brubaker & Company, a New York corporation, which had the legal title and possession from the date of purchase from the city of New York. The relation between the trust company and Brubaker & Company was that of lender and .borrower. The trust company made a loan or loans to the latter company to enable it to purchase and carry the cars. The loan was secured by the promissory notes of Brubaker & Company renewed from time to time, with credits and additions, on the books of the trust company in Philadelphia, where the Brubaker Company kept its account. There is no question that. Brubaker & .Company bought the cars from the city of New York at public sale in that city. As collateral security for the loan the Brubaker Company delivered to the trust company assignment of its right, title and interest in the cars, but possession of the cars was never turned over to the trust company, nor, did the cars ever-leave the State of New York. They were stored on tracks in the yard of Milliken Brothers, at Millikens, Mariners’ Harbor, Richmond county, N. Y. They were stored in the name of the Brubaker Company. They continued in that name to the date of the replevin. The trust company never possessed itself of the cars or asserted a right to possession, If it be said that Brubaker promised to store them in the name of the trust company, it is clearly shown that they were not so stored, and the Franklin Trust Company knew it. The storage charges were paid by the Brubaker Company, repairs, etc., were made on the cars by the Brubaker Company, and the Brubaker Company maintained a watchman, all in their own name. The trust company knew or should have known these facts, because statements of the items of these expenses were furnished to them by Brubaker.

At most, the trust company had an equitable right or lien against the cars, which was not reduced to possession, and could only be reduced to possession by suit in equity. (National Bank of Deposit v. Rogers, 1 App. Div. 623; Wheeler v. Allen, 51 N. Y. 42.) The trust company had no right to sell the cars in the manner attempted in Philadelphia, because it had no common-law lien which involved possession of the cars, and it obtained no legal title by such attempted sale. (Duncomb v. N. Y., H. & N. R. R. Co., 84 N. Y. 190.)

While the transactions between the parties were carried on principally in Philadelphia where the notes are dated and were made payable, and while I think the law of Pennsylvania may be binding on the parties so far as the nature of the agreement and its validity are concerned, I reach the conclusion that in dealing with the cars, to obtain possession or to sell them, the laws of the State of New York governed the situation. The attempted sale of the cars in Philadelphia was not in accordance with the laws of the State of New York as to sufficiency of the notice or the length or character of the advertisements. (Lien Law, §§ 200-202.) And indeed I cannot find that it was a lawful sale under the laws of Pennsylvania if reasonable notice or in fact any notice was required. The sale in this case was advertised on the evening of the day preceding the transaction in one newspaper in Philadelphia. No details were given, the location of the cars was misstated, and no attempt was made by the vendor to protect the rights of the Brubaker Company or to invite competition in bidding. The result shows that it was a pretended sale. Apparently no one knew of it. Brubaker attended and protested, but the sole object of the so-called sale appears to have been to go through the form of turning over title to the trust company. It was not a fair or reasonable sale under any law.

But this property never went out of the State of New York. The Brubaker Company, a New York corporation, purchased the cars in New York, and with the knowledge of participation of the trust company, a payment for the cars was made in New York State. The cars remained in the State of New York, one reason, if not the principal one, being that to remove them to another State would require expensive alterations to comply with the requirements of the Interstate Commerce Commission,- all of which was pointed out to the president of the trust company by Mr. Brubaker by his letters in evidence.

It is the trend -of modern opinion that in such a case, so far as the enforcement of any proceeding in rem is concerned, it; must be governed by the lex rei sitos. And this from the necessities of the case, to maintain values and to avoid conflict; of jurisdiction. The State of New York has enacted positive, definite laws governing the sale of personal property within its, territory, and these laws govern sales of property which has. what has been described as an “implied locality.” Public policy demands that foreign principles shall not be infused into the management of property definitely located here, and unless the lex rei sites be applied there is no available decisive law. There is, of course, personal property which by its nature is governed by the law of its owner’s domicile, property which he may carry about with him, or which has no definite situs. Or it may be properly involved in domestic relations, or other special situations. But these cars had a definite fixed location in this State, they had never been removed from it, and if removed or possession changed I think the laws of this State were applicable and binding. - (1 Whart. Confl. Laws [3d ed.], § 308; Story Confl. Laws, § 383 et seq., and cases cited.) If the trust company desired to enforce its equitable rights or to sell this property I think it was bound to comply with the laws of New York. Whatever law governed its contract with Brubaker & Company, so far as possession of these cars was concerned,, the trust company as well as Brubaker placed them and consented that they should remain in the State of New York, and I think they submitted themselves to its jurisdiction in this regard.

Therefore, I hold that the attempted sale in Philadelphia was null and void and ineffectual to transfer title.

It follows that the taking and withholding of possession by the defendant sheriff was unlawful and constitutes a conversion, for which he; or those for whom he was acting, must respond in damages. It is no answer to argue that Brubaker owes the trust company money, or that he is insolvent, or that the business methods do not accord with the ideas of propriety which govern the bank. While I hold that no partnership existed between the trust company and the Brubaker corporation, the bank sought to obtain a share of the profits expected when Brubaker should sell the cars, one-third to the bank, two-thirds to Brubaker, and Brubaker, for some consideration not very clearly expressed, had agreed to share his two-thirds with some company in which the president of the trust company was interested. But when sales were slow and the profits did not immediately materialize, the sharing agreements were all canceled. The debt to the trust company remained unpaid, and in its desire to recoup itself it made the mistake of taking the law into its own hands, reaching out to take forcible possession of property which, up to that time, for reasons satisfactory to its officials, it had allowed to remain in Brubaker’s possession.

This is an action at law for conversion. The court in this case has no right to inquire into the equities between the trust company and Brubaker, or Brubaker’s assignee, the plaintiff here, who took with full notice of the facts. The trust company has deliberately “avoided a court of equity.

There is a radical difference of opinion as to the value of the cars. The plaintiff says they are worth over $2,000 each. The trust company insists that they are only available as scrap. They were purchased at a public sale in New Tork for $400 each. To make them salable required expenditures for painting, alterations, etc., and even then in three or four years only five cars were sold. While some of them brought figures which seem to support plaintiff’s ideas of value to some extent, it would be an unfair standard to apply. I doubt whether there was any demand for them in one lot. The best that could be done was to peddle them out singly or in small lots. After considering all the evidence, I award the plaintiff $900 a car for the lot, or $13,500 in all, besides the costs of this action.

I may add that after examining the authorities, I adhere to the ruling on the trial, admitting the evidence of the dealings between Brubaker and the trust company, and the statements made by him. I think all these transactions and declarations were part of the res gestee, and that there were binding on the plaintiff. The plaintiff may have appropriate exception to this ruling wherever necessary. 
      
       Consol. Laws, chap. 33 (Laws of 1909, chap 38), § 300, as amd. by Laws of 1910, chap. 314;.Id, §§301,.303.— [Rep... ,
     