Moore v. Hillabrand — 16 Abb. N. Cas. 477

Majority

p. 477

MOORE v. HILLABRAND.

N. Y. Supreme Court ; General Term,

November, 1885.

Headnote

Conversion.—Parties ; direct action.—Pleading.—Evidence to SUSTAIN ACTION FOR CONVERSION.

An action lies at the suit of a consignor against a sheriff (or the attaching creditor indemnifying him) who has received, by levying an attachment on the consigned goods iu the hands of the factor, the proceeds of the sale of plaintiff’s goods.

Although the complaint alleges a conversion, it is not necessary, to sustain such an action, to show that the specific moneys belonged to the plaintiff, and were wrongfully taken from him ; the fiduciary relation is sufficient to sustain the action.

In order to show that the money claimed was mingled with other moneys, it is not sufficient to show that it was deposited in a bank in a general account, if it does not appear whether the account contained anything more ; and even then, it seems it would make no difference if the respective amounts were ascertainable.

The cases on allegations of contract and of fraud, reviewed.

Appeal from a judgment for the defendant entered upon an order dismissing the complaint at the trial.

This action was brought against the sheriff of the county of New York, to recover the sum of $326.50, received by him under an attrachment in a suit in which Jacob Zeller was plaintiff and the firm of Groht & McLaren were defendants. After a demand for payment had been made upon the sheriff, Zoller caused an indemnity bond to be given to him by the defendants in this action, who were thereupon substituted as defendants herein.

It appears that the plaintiff was a shipper of butter and cheese to the firm of Groht & McLaren, commission merchants, and claimed to be selling under a del credere commission, and when the attachment was issued, the Old Colony Steamboat Company and the Norwich Transportation Company were indebted for some of the goods thus consigned to the firm men

p. 478

tioned. The sheriff, under the attachment, collected the claims, attached the bank account of the firm and received therefrom the sum of $82.25, which had just been deposited there by them, and which sum was the proceeds also from the sale of some of the plaintiff’s goods.

The complaint was dismissed, upon the ground that the action was brought for conversion, obliging the plaintiff, in order to maintain it, to show that the moneys belonged to him and were wrongfully taken from him by the sheriff.

John E. Eustis, for the plaintiff, appellant.

J. Geo. Flammer (Lindsay & Flammer, attorneys), for the defendants, respondents.

In the case of Wallace & Sons v. Castle ( 14 Hun, 106 ), it was held that the fiduciary relation existing between a factor and his consignee is not destroyed even if the factor is acting under a del credere commission ; and that, in such a case, when he was paid by the debtor, the money so received was the money of the consignee and not of the factor, and for a conversion thereof, the latter was liable to arrest. In expressing the opinion of the •court at special term in that case which was sustained at the general term, the learned justice referred to the case of Ostell v. Brough ( 24 How. Pr. 274 ), in which it was held that if the factor actually received the proceeds of the sale he was liable to arrest for a failure to pay it'over even when he received a (id cred-ere commission. The learned justice refers to the fact that that case was cited with approval in the German Bank v. Edwards ( 53 N. Y. 541 ) and Duguid v. Edwards ( 50 Barb. 288 ), in' which the point was •directly involved. And it was also declared that.when the relation of principal and factor was made out, the

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burden was upon the latter, if lie desired to relieve himself from his ordinary responsibility, to show some special agreement or some course of dealing inconsistent with the strict relation. And the court, when the case was disposed of at the general term, declared that the relation of factor continued, with all its obligations and burdens, and that the money received by the factor was plaintiff’s money and not the factor’s. The identical money received was therefore the property of the plaintiff.

And this doctrine was also expressed in the case of Converseville Company v. Chambersburg Woolen Co. (reported in the same volume of Hun, at page 609). It was there decided that where goods are consigned to a firm to be sold upon a del credere commission, and the firm makes a general assignment for the benefit of its creditors, the consignors are respectively entitled to all the proceeds of the goods so consigned which come into the hands of the assignee. And it. was said that the factor’s contract of guarantee was a cumulative security to his principal; it worked no other change in the legal relations existing between them.

Where property is consigned upon an agreement for advances, and the advance is made, it gives the factor a vested interest in the goods for his protection and as security for his advances and charges and interest, which would enable him to hold the goods against third parties or the consignor himself; but only so far as would be necessary for his protection and security, and his title is therefore a qualified one. He has the same interest in the proceeds of the sales that he has in the property sold—a special interest to the extent of the advances. As guarantor under a del credere commission, he would have no exclusive right to collect the proceeds of the sales ; the consignor might collect them (Merrill v. Thomas, 7 Daly, 393 , and cases cited ; Sherwood v. Stone, 14 N. Y. 267 , 270).

p. 480

There seems to be no doubt, therefore, upon these, authorities, that in regard to the bills which were due and unpaid for the goods consigned by the plaintiff and sold by the firm, the plaintiff was not divested of his title, and that they could not be seized under an attachment by . a creditor of the firm. There was no proof of any advance, and their interest, if any (which was not proved upon the trial of this case), was the extent of their commissions and charges. The money which was deposited in the bank is not shown to have been mingled with any other money. It is true it is proved that it was deposited in their general account, but whether the account contained anything more than that, does not appear upon the record.

But under the authority of the case of Converseville Co. v. Chambersburg Woolen Co. (supra), it would make no difference, because the amount was easily ascertainable from the testimony given.

Walter v. Bennett ( 16 N. Y. 250 ) is nob in conflict with any of the views herein expressed. That was a controversy between principal and agent, and the question involved was whether an action would lie to recover the possession of personal property when it. appeared that the defendant had parted from the possession of it before the commencement of the action. Johnson, J., said: “The complaint stated two causes of action, each of which was a claim to recover personal property with damages for its wrongful detention, and upon the trial the plaintiff endeavored to make'out a wrongful conversion by his agent of the draft or bill of exchange and failed to do so. The defendant was the agent of the plaintiff to make the sale and collect the proceeds, and when he received from the purchaser a bank draft payable to his own order, he was not acting in violation of his duty in reducing it into money or having it passed to his own credit in bank.”

p. 481

The court said the plaintiff undoubtedly might have demanded the draft and would have been entitled to a specific delivery of it so long as it remained in the defendant’s possession, but in the absence of such demand, the defendant might lawfully dispose of it in the ordinary course of business.

In Greentree v. Rosenstock ( 61 N. Y. 583 ) the question considered, affecting the case in hand, was whether the complaint was one in.tort or on contract; and it was held the allegations were sufficient to sustain the proposition that it was an action upon contract, and the statement of a conversion was an erroneous legal conclusion from the facts averred, charging no possible crime to the defendant. The action was between principal and agent.

The case of Sutton v. De Camp (4 Abb. Pr. N. S. 483) did not involve the point considered herein. That was a motion to vacate an order of arrest which had been granted against the defendant as an auctioneer, upon the ground that a fiduciary relation existed between him and the plaintiff, the defendant acting under a guarantee or del credere commission. The court stated in that case that, when a guarantée was given such as mentioned, the auctioneer became a surety, but that a fiduciary character did not exist, if at all, until the receipt of the moneys which he had obligated himself to pay. In that case, he had not received the moneys for the goods sold by him.

In the case of Kip v. Bank of New York ( 10 Johns. 63 ), it was declared that property held in trust did not pass under a bankrupt commission, and if the property held in trust remained in specie or in goods, or in notes or other choses in action, the cestui que trust was entitled to the property, and not the general creditors of the bankrupt or insolvent; and, further, that though the trust property was converted into money, yet if kept separate and distinct, so that it could be

p. 482

traced and distinguished from the general mass of the insolvent’s estate, it would go to the cestui que trust.

Note.—As to joining plaintiffs, see Barr v. N. Y. Lake Erie & W. R. R. Co., 96 N. Y. 444 (several stockholders); Uhlman v. N. Y. Life Ins. Co., N. Y. Daily Reg. Mar. 26, 1884 (several policy holders.

As to distinction between contract and tort, see Segelken v. Meyer, 94 N. Y. 473 ; Rich v. N. Y. Central, &c., 87 Id. 382; Roche v. Marvin, 92 Id. 398.

As to non-necessity of accounting inequity, see Marvin v. Brooks, 94 N. Y. 71 .

The conclusion arrived at upon an examination oí these authorities is, that upon the case as spread upon the record the plaintiff was entitled to recover. The debts which had been contracted upon the sale of his property by his factor which were not paid were collectible by him and were his property, and the money deposited in the bank was easily traceable. Indeed, it was not shown to have been mingled with any of his own funds therein, and therefore was not subject to the demands of other creditors.

For these reasons, the judgment must be reversed and a new trial ordered, with costs to abide the event.

Davis, P. J., and Daniels, J., concurred.

Cases cited

Ostell v. Brough 24 How. Pr. 274 N.Y. Sup. Ct. p. 478
German Bank v. Edwards 53 N. Y. 541 N.Y. 1873-10-11 p. 478
Duguid v. Edwards 50 Barb. 288 N.Y. Sup. Ct. 1867-11-18 p. 478
Sherwood v. Stone 14 N. Y. 267 N.Y. at 270 p. 479
Walter v. Bennett 16 N. Y. 250 N.Y. p. 480
Greentree v. Rosenstock 61 N. Y. 583 N.Y. Comm'n App. p. 481
Kip v. Bank of New-York 10 Johns. 63 N.Y. Sup. Ct. p. 481
Barr v. New York, Lake Erie & Western Railroad 96 N. Y. 444 N.Y. 1884-10-07 p. 482
Segelken v. Meyer 94 N. Y. 473 N.Y. 1884-01-22 p. 482
Marvin v. Brooks 94 N. Y. 71 N.Y. 1883-11-20 p. 482