
    Robert E. Deitz, Plaintiff, v. Edward M. Field and Others, Defendants. Norman S. Dike, as Receiver of the Firm Property of Field, Bindley, Wiechers & Co., Respondent; S. H. H. Clark and Others, as Receivers of The Union Pacific Railway Company, Appellants.
    
      Election of remedies—one cannot sue for a conversion of securities and, after a recovery in such action, sue to recover possession of the securities.
    
    Where pledgees of securities rehypothecate them to another firm, and the pledgor, a corporation, with full knowledge of the material facts, brings an action against the original pledgees as for a conversion, demanding therein as damages the difference between the amount of the loan and the value of the securities, and the pledgor recovers judgment accordingly in that action, it has thereby elected to treat the transaction as a sale and has selected its remedy, and is bound by such election; and neither it, nor receivers of its property subsequently appointed, can thereafter take action designed to compel a receiver of the property of the original pledgees to deliver to the receivers of the pledgor corporation certain of the securities originally pledged, which have been recovered by the receiver of the original pledgees from the firm to which the securities were rehypothecated.
    
      Appeal by the petitioners, S. H. H. Olark and others, as receivers of the Union Pacific Hallway Company, from an order of the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Westchester on the 2d day of July, 1896, denying their motion for leave to sue Norman S. Dike, as receiver of the firm property of Field, Lindley, Wiechers & Go.
    
    Tho facts are stated in the opinion of G-aynor, J., delivered at the Special Term.
    
      E. Ellery Anderson, for the appellants.
    
      Frederic A. Ward and James L. Bishop, for the respondent.
   Blown, P. J.:

The opinion delivered at the Special Term upon the denial of this motion stated the facts of the case so accurately that they need not be here repeated. It is sufficient to say that, excepting the seven, bonds of the Oregon Bailway and Navigation Company, the 140 coupons cut from bonds of the Oregon Short Line and Utah Northern Bailway Company, and the item of $2,129.63, the balance admitted by the firm of Wormser & Co. to be due to the firm of Field, Bindley, Wiechers & Co., the judgment recovered by Mr. Dike, the receiver, had no reference to, or connection with, any property of the Union Pacific Bailway Company.

As to the item of $2,129.63, the receiver’s affidavit alleged that it did not arise out of the sale of the securities of the railway company only, but was a part of the proceeds of the sale of other securities which the Wormsers were carrying for Field’s firm, in which the railway company had no right or interest whatever; and that it was impossible to separate the proceeds of the sale of the different securities, or in any way to identify the said item as a part of the proceeds of the sale of the securities of the railway company.

It appears from the opinion of the Special Term that both parties treated the questions presented on the motion as questions of law solely; and in the absence of any testimony upon the disputed question of fact as to the above item, we must assume that the allegation that it was a part of the proceeds of the sale of the securities of the railway company, was either decided adversely to the petitioners’ claim or was abandoned on the argument.

This brings us to the consideration of the right of the petitioners to recover from the receiver the seven bonds and 140 coupons, which appear, without dispute, to have been a part of the securities delivered by the railway company to Field’s firm and by that firm pledged to the Wormsers and recovered, by suit, from them by the receiver. The right of the petitioners to recover these securities was denied by the Special Term on the ground that, by prosecuting to judgment an action against Field’s firm for the value of the securities, the railway company had elected to treat the refusal of that firm to deliver the securities upon the tender of the debt for which they were pledged as a sale thereof, and that it could not thereafter successfully maintain its title to the securities themselves.

We are of the opinion that this ruling must be sustained. Ample authority therefor is cited in the Special Term opinion. (Rodermund v. Clark, 46 N. Y. 354; Moller v. Tuska, 87 id. 166; Fowler v. B. S. Bank, 113 id. 450; Terry v. Munger, 121 id. 161.)

Flo case to which our attention has been called by the appellants conflicts with these authorities. In Equitable Co-operative Foundry Co. v. Hersee (33 Hun, 169) the decision of the General Term proceeded upon the ground that the plaintiff was not shown to have had knowledge of the fraud at the time of bringing the first action on the contract, and that that action did not proceed to judgment, but was discontinued before it reached that stage. When the case reached the Court of Appeals (103 N. Y. 27) it was affirmed, on the sole ground of the lack of a finding or request to find that the plaintiffs, when they brought the action on the contract, knew of the fraud, and the court declined to express any opinion on the question whether, if there had been such knowledge, the fact that the action was not prosecuted to judgment would have relieved the plaintiffs from the imputation of an irrevocable election to affirm the sale. The current of authority in this State is to the effect that, where a party has the choice between two inconsistent remedies, the commencement of an action will be deemed, a conclusive election between them. Such was the case of Conrow v. Little (115 N. Y. 387). Judge Danforth, speaking of the plaintiffs’ election to affirm or avoid the contract there under consideration, said : “ They could not do both, and there must be a time when their election should be considered final. "We think that time was when they commenced an action for the sum due under the contract.” In Terry v. Munger (supra) Judge Peckham, quoting this language, said: “ When it becomes necessary to choose between inconsistent rights and remedies, the election will be final and cannot be reconsidered even where no injury has been done by the choice, or would result from setting it aside. (2 Herman on Estop. & Res. Adjud. 1172, § 1045.) ” The learned counsel has argued that the remedy of the railway company by action against Field’s firm, to recover the value of the bonds, was not inconsistent with the present proceeding. I cannot conceive of two remedies more inconsistent. Two causes of action, one to recover specific securities, and the other to recover the value of such securities, could not be united in the same complaint, nor could two separate actions of that character be maintained at the same time. The plaintiffs, if such causes of action were united in the same pleading or two separate actions brought, would be compelled by the court to elect which one they would rely upon. We must hero treat Mr. Dike, the receiver, as standing in the place of Field’s firm, with the same right to compel an election as that firm would have had. Evidently the railway company could not have the bonds and their value in money at the same time. The two things are imjmssible, and legal remedies that contemplate such results are plainly inconsistent.

The cases of Smith v. Savin (141 N. Y. 317) and Russell v. McCall (141 id. 437), cited by the appellants, do not appear to have any application to the questions under discussion. It appears from the affidavits before us that, in December, 1891, the railway company knew of the pledge of its securities by the Field firm to the Wormsers, and with full knowledge of all the facts in reference to the transaction between those two firms, in March, 1894, sued Field’s firm to recover the difference between the value of the securities and the amount of its debt to that firm, and on August 7, 1894, entered judgment against Field and his partners for $552,961.17, which the court adjudged to be such difference. In thus suing for the value of the bonds and crediting thereon the amount of its debt, the Union Pacific Railway Company treated the transaction as a sale, as it had a right to do, and having elected to so treat it, the title to the securities passed to Field’s firm. (Terry v. Munger, supra, and cases cited.)

The order must be affirmed, with ten dollars costs and disbursements.

All concurred.

Order affirmed, with ten dollars costs and disbursements. 
      
      Tha following is the opinion delivered at the Special Term:
      Gaynor, J. :
      The Union Pacific Railway Company borrowed money of the firm of Field, Lindley, Wiechers & Co., on its promissory notes, pledging certain bonds as collateral security. The Field firm had dealings with the firm of I. & S. Wormser and pledged certain of these bonds as their own with the said Wormser firm as security, and they finally stood so pledged for the payment of a large balance. The said railway company tendered payment of its said notes to the said Field firm in due course and demanded backits said bonds, butthesaid firmrefusedto deliver them up. As early as December, 1891, the said railway company became fully informed of the said conversion of its bonds and of the particular ones of them which had been so pledged to the Wormser firm. Thereafter it began an action for the conversion of the said bonds against the said Field firm, alleging in the complaint the value of the bonds to be $1,163,060 and the amount of the loans to be $476,034.07, and claiming as damages the difference, and it obtained judgment for the said amount. It also brought an action against the Wormser firm for damages for the conversion of the said bonds so pledged with them.
      On ¡November 27, 1891, the said Field firm had made a general assignment for the benefit of their creditors. This action was brought to set aside then-said assignment as fraudulent, and the plaintiff prevailing, ¡Norman S. Dike was appointed herein receiver of all of the assets of the said firm. The Wormser firm having sold the major part of the said bonds so pledged to them, reported that they had applied the proceeds to the payment of the balance due them from the Field firm, and had remaining to the credit of the said firm §2,129.63 in cash, and also seven Oregon Railway and ¡Navigation Company bonds, of the value of §1,000 each, and 140 matured coupons of the value of §25 each, of the bonds so pledged with them. The receiver refused to accept this as a correct statement of the account, and brought an action against the Wormser firm for an accounting. The result was that he obtained a judgment against them for §22,342.13, which he has collected. The Wormser firm has also delivered to him the said seven bonds and 140 coupons. Meanwhile the said railway company has gone into the hands of receivers, and they now file their petition herein that the said receiver of the assets of the Field firm be ordered to pay to them the said money so recovered by him, and also that he deliver the said bonds and coupons to them. Both sides request that the court, with or without the aid of a reference, decide in this action the question between them. The facts being undisputed, I see no need of a reference. The petitioners claim the said bonds and coupons as theirs, and also that the said money is the proceeds of the sale of the said railway company’s bonds, and that they are entitled to it under the authority of American Sugar Refining Co. v. Fancher (145 N. Y. 662).
      It seems to me that in offsetting its indebtedness to the Field firm against the value of the said bonds and coupons pledged with and converted by them, and bringing the action for damages for conversion against them, claiming the difference as the measure of damages, and obtaining judgment therefor, it made an irrevocable eléction of the remedies open to it, and must abide by it. It thereby let its title to the bonds go (Rodermund v. Clark, 46 N. Y. 354; Terry v. Munger, 121 id. 161; Fowler v. B. S. Bank, 113 id. 450; Moller v. Tuska, 87 id. 166). Its action for conversion against the Wormser firm was also an election to let the bonds go, and get the value thereof instead.
      The motion is, therefore, denied.
     