Sterling's Estate

Citations

• 254 Pa. 155
• 98 A. 771
• 1916 Pa. LEXIS 699

Syllabus

<p>Conversion — Pledgor and pledgee — Brolcers—Pledge of bonds— Recovery of purcbase-'price.</p> <p>1. While the relation between a broker and his customer with respect to bonds purchased upon margin is that of pledgor and pledgee, the relation may, nevertheless, exist although the margin has not been paid; if a sale takes place, and no margin is required and none was intended by the parties to be furnished, other than that the bonds should be retained by the broker as security, the relation of pledgor and pledgee is nevertheless established.</p> <p>2. Where a firm of brokers sold certain bonds to a customer, retained the bonds as security for the payment of the purchase-price, but required no further security, and subsequently mingled the bonds with other securities under their control and pledged them as collateral for indebtedness of their own without the customer’s knowledge or consent, they thereby unlawfully converted the bonds to their own use and were in no position to demand performance by him; by their acts they released him from liability for the payment of the purchase-price, and it was not material that they subsequently tendered the bonds. '</p>