
    Ellis K. Powers, Ex’r, etc., App’lt, v. Francis W. Savin et al., Resp’ts, and John Wheeler, Assignee, etc., Resp’t and App’lt.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed November 24, 1888.)
    
    1. Referee—Refort of—When variance between a finding of fact AND THE OPINION OF A REFEREE EXISTS, THE FORMER IS CONTROLLING UPON APPEAL.
    Tlie fund which is the subject-matter of the controversy in this action is claimed by the plaintiff to have arisen out of the sale by certain of the defendants, of shares of stock belonging to the plaintiff’s testator which had been pledged with other stocks to other parties, without the knowledge or consent of the true owners. The evidence established the fact that the plaintiff’s testator was the owner of these shares of stock. The referee in his opinion in the matter stated that the plaintiff’s testator permitted the parties who pledged the stock, to use his stock in their business transactions, but found as a fact that the shares in question were pledged without the knowledge or consent of the testator. Held, that upon a question of fact where there is a contradiction or variance between the opinion and the finding, the conclusion of the latter must prevail upon appeal.
    2. Assignee—For benefit of creditors—Succeeds only to title of ASSIGNOR.
    
      Held, that as the parties who pledged the stock could not hold the balance derived from the sale, so neither could then- assignee for the benefit of creditors claim it.
    3. Parties to action—Interest of alone to be considered on trial.
    
      Held, that the possible rights of third persons not parties to the action, could not be properly taken into account on the trial; that such considerations were only matters of concern to the parties upon whom reclamation might be made in other actions.
    
      4. Judgment—When a bar to an action.
    
      Held, that the decision of the referee that the plaintiff was not entitled to recover and the judgment entered thereon if allowed to stand would be a bar to, any future action brought in behalf of the estate of the testator.
    Appeal of the plaintiff from ine whoie of the judgment entered upon the report of a referee whereby the defendants Savin and Vanderhoff were allowed to retain $5,131.25 and the defendant Wheeler, as assignee of O. M. Bogart & Co. was allowed to recover the sum of $2,642.36, less costs awarded to said Savin and Vanderhoff out of the sum of $7,775.61 owing by the latter to O. M. Bogart & Co.
    Also appeal by the defendant Wheeler from so much of the j'udgment as denied to him the right to recover under cross-pleadings between the defendants the whole of said fund of $7,775 61..
    
      L. C. Waehner, for pl’ff and app’lt; Henry A. Boot and T. D. Keuneson, for resp’ts Savin and Vanderhoff; John Notman, for resp’t and app’lt Wheeler.
   Macomber, J.

The fund, which is the subject-matter of the controversy in this action, is claimed by the plaintiff to Rave arisen out of the sale by the defendants Savin and Yanderhoff of 300 shares belonging to the plaintiff’s testator of the capital stock Of the Chicago, Milwaukee and 13t. Paul Railroad Company which had been pledged with other stocks to Savin and Yanderhoff by O. M. Bogart & Oo. without the knowledge or consent of the true owner.

The evidence establishes the fact that Hollis L. Powers, the plaintiff’s testator, was the owner of these shares of stock. Indeed, such fact is not controverted in the case further than to the extent that this stock was in the manual custody of O. M. Bogart & Co. and that they appeared to have had the right to dispose of it. But the equitable title of the plaintiff thereto as between the parties to this action is abundantly established. Yet the report of the referee does not so find, though it does not find as a fact to the contrary. It nowhere mentions the plaintiff or his testator’s ownership of said shares, or the plaintiff’s connection with this case further than to say, as its first conclusion of law, that the plaintiff is not entitled to recover from the defendants any sum of money.

In the opinion of the learned referee, however, two positions are taken, one of which is, that the plaintiff’s testator permitted the firm of O. M. Bogart & Co., to use his stocks in their business transactions.

Such may have been and doubtless was the case with many securities, but how was it with this particular stock ? Resort being had to the findings of the referee, outside of his report, made in compliance with written requests of counsel, it is found under the 22d request made by the counsel for the defendant Wheeler, that Hollis L. Powers consented shortly before the making of said loans, that O. M. Bogart & Co., might use some of his securities, which were in their hands. He was not requested to find and did not find as a fact, that such firm used these identical securities by the consent of the plaintiff’s testator. On the contrary, by the fifth proposed finding of the counsel for the plaintiff, which is allowed by the referee, it is distinctly decided as a fact that, these 300 shares of the capital stock of the Chicago, Milwaukee and St. Paul Railroad Company, were so pledged to Savin & Yanderhoff, without the knowledge or consent of Hollis L. Powers.

Upon a controverted question of fact, where there is contradiction or variance between the opinion and the finding, the conclusion of the latter must prevail upon appeal.

The second position of the referee is, that inasmuch as there were in each of the loans made by Savin & Yanderhoff to O. M. Bogart & Co., securities received belonging to other parties, who may have proportionate claims with the plaintiff in the surplus now in the hands of Savin & Yanderhoff, the right of the plaintiff, if any cannot be determined without making all these persons parties to the action. But the, learned referee has actually awardedto the-assignee of O. M. Bogart & Co., a portion of the fund without having such other persons before him, and that too under a finding'of fact, which shows-that the appropriation of these &QQ shares, of stock, hy his assignors, belonging,to the. plaintiff’a testator, was without the. authority,, knowledge. o.r consent of the true owner. As the firm of O. M. Bogart & Co., could not hold this balance of the-proceeds of the sale of the stock, so,, as matter of law, their assignee for the benefit of'creditors, cannot.-lawfully claim it. The possible rights! of third persons, not, parties to the action, could not properly be taken into the account at' the trial. Sueh considerations were-only matters of concern-to. the parties upon whom reclamations might be made-in other actions. The plaintiff has made, all persons, shown to be interested in the fund, parties to this action, namely the assignee of the firm which appropriated his. testator’s property, and the-brokers who, having received the stockin good faith- under the circumstances disclosed in, the evidence are entitled to reimburse themselves for payments made on the strength thereof, but not to a greater extent.

If they or the assignee of O. M. Bogart & Co-, could have shown that' other dealers made a like claim,, they would doubtless have made an effort before trial to bring them into this action. The suggestion of the referee, that with the fund so placed by his decision in the hands of the assignee of O. M. Bogai’t & Co., the rights of all claimants might be worked out in subsequent proceedings, cannot be sustained. If thereby it was intended to encourage further hopes 'of the plaintiff, it was illusory, for the decision of the learned, referee, with the judgment entered thereon,, if allowed to stand, is a bar forever to any future action which may be brought in behalf of the estate or Hollis L. Powers, as by the judgment the denial to the plaintiff of any share whatever in the fund is absolute and without reservation to him to institute any future-proceedings against the assignee, of O. M. Bogart & Co.

If follows that a new trial must be had upon, the merits of the case. Consequently, it is not necessary on this appeal to consider the question whether the defendants Savin & Vanderhoff shall retain the whole or part only of the sum claimed by them, but that question will still- be before the referee upon the new trial.

The. judgment appealed from.is reversed and a, new trial granted, and under the statute before another referee, with costs to the plaintiff, to abide the event.

Van Brunt, Ch. J., and Bartlett,, concur.  