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New York & Brooklyn Ferry Co. v. Moore

18 Abb. N. Cas. 106 Court N. Y. Court of Appeals; English

Delivered by Earl, J.

Contents

Majority

p. 106
NEW YORK & BROOKLYN FERRY CO. v. MOORE.
N. Y. Court of Appeals;
April, 1886.

Headnote

(Mem. s. c., 102 N. Y., 667 .)
1. Trust; action, to establish, against agent and his investments.] An .action lies by a principal, against an agent who has embezzled moneys received in a fiduciary capacity, and the depositaries with whom he has deposited such moneys as his own, to recover judgment therefor against the agent, and to impress with a trust in favor of the principal the deposits so made, and real property purchased with such moneys and held in the name of the agent or third persons other than bona-fide purchasers or mortgagees for value.
3. Cogency of proof required to sustain action involving crime.] Where, in an equity action tried by the court, a judgment for the plaintiff involves crime or a moral turpitude on the part of the defendant, the plaintiff is not bound to prove his case with the certainty required in criminal prosecution, but only by a just preponderance of evidence, always giving the defendant the benefit of the presumption of innocence.
3. The same; embezzlement.] In an action by a ferry company against one who had been in its employ for many years as ferry-master, collecting tolls of which he neither kept, nor was required to keep, any account, and the amount of which the plaintiff had no means of knowing, to recover a large amount of money alleged to have been received by him for tolls and not paid over to the plaintiff, but retained by him and converted to his own use,—Held, that evidence of the defendant’s acquirement, while in plaintiff’s employ, of a large amount of property and money in excess of his total salary, and that during that time he had no other business, and no other apparent means of making or earning money, coupled with other slight circumstances, and with defendant’s refusal to testify or to satisfactorily account for his large gains, was sufficient to sustain the finding of the judge before whom the action was tried without a jury, of a misappropriation by defendant of the plaintiff's money.
4. Credibility of interested witness who is unimpeached and uncontradicted.] While a court is bound to believe a disinterested, unimpeached, and uncontradicted witness, who gives evidence not in any way discredited or in itself improbable or incredible, it is not bound to give credit to a witness who is interested in the result of the action,
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and whose evidence is improbable and discredited by circumstances, or is against common experience and observation.
Appeal by the plaintiff from a judgment of the Supreme
Court, Second Department, which reversed a judgment for the plaintiff and ordered a new trial.
Two actions were originally brought, one by the New York & Brooklyn Ferry Company, and one by its successor, the New York Ferry Company, against the same parties, John ' H, Moore and Margaret Moore, and various savings banks and oilier institutions, alleged depositaries of moneys of the plaintiff embezzled by the defendant, John H. Moore,
Thecomplaint is given a foot-note.[1]
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The actions were consolidated and tried as one action.
The material facts found upon the trial before Mr. Justice Brows, without a jury, are fully stated in the opinion in the Court of Appeals.
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The opinion at Special Term was as follows;
Bjrowtt, J. Two propositions have been strongly urged by the defendant’s counsel during the trial of this ease:
1st. That it is essential to the plaintiff’s case that it should
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establish conclusively that it has lost the money it seeks to recover, and that there is no evidence tending to show a loss.
2d. That as the charge against the defendant is of a criminal
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nature, it is incumbent on the plaintiff to produce evidence of the same quality and degree as would be required to sustain an indictment for the same offence.
As to the first question it is sufficient to say, that while it would be impossible to affirm as an isolated fact independent of the question of Moore’s embezzlement that the plaintiff had sustained a loss, yet the two facts, Moore’s guilt and the plaintiff’s loss, are so interwoven that the determination of one necessarily determines the other.
It is essential in the consideration of the case not to lose sight of the nature of the action or the relation which Moore and the ferry company bore to each other. Moore’s position was that of a trustee of the property which came into his possession, and the principal question in the case is not, has the plaintiff lost money \ but, rather, has Moore honestly accounted for all the property which came into his possession ?' His duty was to pay over, at the close of each day, all the money which he had collected. It is charged that he failed to do so, and that for years he has been engaged in embezzling the company’s funds. If this charge is proven, there will be no question as to the plaintiff’s loss.
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The second proposition is not a correct statement of the law. The rule which governs the nature of the proof required in actions of this character is stated in Russell on Crimes, 7 ed., 7-27, as follows: “ When civil rights are to be ascertained, a less degree of probability may be safely adopted as a ground of judgment than in criminal cases which affect life and liberty. The question has been frequently presented in actions on insurance policies, when the defence has been that the insured set fire to the building with intent to defraud the insurers.” Johnson v. Agricultural Ins. Co., 25 Hun., 251 ; Schmidt v. N. Y. Union, etc., Fire Ins. Co., 1 Gray, 529 ; Blaeser v. Milwaukee, etc., Ins. Co., 37 Wis., 31 ; s. c., 19 Am. Rep., 747 .
In all these cases it is distinctly held that it is not necessary, in order to make out the defence, that the proof should establish guilt beyond a reasonable doubt, but that a preponderance of evidence in support of the charge is enough.
The evidence has satisfied me that Moore has failed to account and pay over to the company all the money he had collected.
[After reviewing the evidence.] It is unnecessary to comment on this testimony further. Its inconsistency, contradictions, and improbabilities appear to any one reading the evidence. It is, to me, a significant fact that from the time Moore entered the service of the plaintiff as a collector of fares he began to deposit money in the banks at regular stated periods, showing a steady, constant income from some source. It calls for an explanation, and yet he has none to give. He cannot remain silent under such accusations as are made in the evidence, and invoke the presumption of innocence which would attach to his case as a criminal charge. He occupied a fiduciary relation to the plaintiff, and was bound to account fully and honestly for all the property he received. While the fact that he did make an account and pay over money each day would be presumptive evidence that he had honestly accounted, very slight testimony would overcome this presumption and cast the burden of proof upon him. The rule is, that he who bargains in matters of advantage with a person
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placing confidence in him, is bound to show that .a reasonable use has been made of that confidence, and the burden of proo. is devolved on such person to establish affirmatively the perfect fairness, adequacy, and equity of their respective claims (3 Greenl. Ev., § 253; Cowee v. Cornell, 75 N. Y., 91 , 100; Story’s Eq. Jur. § 311), and his silence under such strong indication of guilt is strong evidence against him. When a party knows the truth and omits to speak, any inference warranted by the evidence should be indulged against him. (Wylde v. Northern R„ R. Co. of N. J., 53 N. Y., 156 , 164.) To my mind the evidence is conclusive of guilt, and I have no hesitation in finding that he has failed to perform his trust, and to pay over to the plaintiffs the moneys which belonged to them. I state the account between Moore and the company from the evidence before me, as follows ;
Property in his possession January 1, 1883.... §46,104 26
Credit Moore with his deposit in the Williams-burgh Savings Bank, Dec. 1, 1870........... §5,310 22
In Dime Savings Bank......... 575 41
Interest compounded every 6 mos............. 6,075 05
Salary 12 years, 1 mo., at §85.....§12,325 00
Less expense §7 a week............ 4,422 00 7,903 00
Compound int.............................. 3,370 90
- 23,234 68
Balance.. §22,869 68
The plaintiff must have judgment, therefore, for the above amount.
Findings may be prepared in accordance with this opinion.
From the judgment entered upon this decision, the defendants Moore appealed.
The General Term, reversed the judgment and ordered a new trial, holding “ that the duty rested on the plaintiff from first to last on the trial to prove the embezzlement charged, and that the defendant was not required to prove or satisfy the court that the fact was not as alleged by the plaintiff against him that there was “no proof of the substantial and
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fundamental fact that the plaintiff has lost any money, or that any of its money has been misappropriated or embezzled; ” that this fact was not shown by proof of defendant’s possession of property otherwise unaccounted for, and that he was not bound to reveal the resources of his wealth. Decision reported in 32 Hun., 29 .
From the judgment of the General Term plaintiff appealed.
Wm. C. De Witt and Joseph A. Burr (Jackson db Burr, attorneys), for the plaintiff, appellant.
James M. Smith, for the defendants Moore, respondents.

The New York & Brooklyn Ferry Company, a corporation, owned and operated ferries between the cities of New York and Brooklyn, from 1864 to May 1, 1879; and the New York Ferry Company, a successor to the former company, owned and operated the same ferries from the latter date to the commencement of these actions.

The actions were consolidated and tried together as one action, and one judgment was entered for the joint benefit of both plaintiffs; and therefore I will speak of them in this opinion as one action.

The complaint alleges that from about the first day of December, 1870, to the 16th day of January,-1883, the defendant, John H. Moore, was employed by the plaintiff as ferry-master; and that as such he received a large amount of money for tolls which it was his duty to pay over to the plaintiff; that he had retained and converted to his use a large amount of such tolls, and had deposited the same in his own name and in the name of his mother in various savings banks, which were made defendants in this action; that he had also purchased certain real estate therewith, which is particularly described in the complaint; that the plaintiff was ignorant of the items and amounts and dispositions of the moneys so retained and converted; and judgment was demanded that the defend

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ant, John H. Moore, account for the money received by him as plaintiff’s ferry-master and disclose the dispositions and investments of the same; that the deposits in the savings banks and the real estate be impressed with trusts in favor of the plaintiff; and that the plaintiff should have other relief particularly specified.

John H. Moore and Margaret Moore, his mother, severally answered the complaint, putting in issue the material allegations thereof. The issues thus joined were brought to trial at a Special Term of the Supreme Court, and the court found that Moore entered the employ of plaintiff in 1866, as night watchman ; that in 1867 he was made bridge-tender and gateman, and December 1, 1870, was made ferry-master, and continued in that capacity until he was discharged, January 17,,1883; that it was his duty to receive fees or tolls for teams and persons crossing plaintiff’s ferries, and pay over the whole thereof to the plaintiff; that in his capacities above mentioned he collected and received large sums of money; that he did not pay over the whole thereof to the plaintiff, nor render to it a full, complete and fair statement thereof, but fraudulently retained and converted to his own use a large amount of the moneys so received for the plaintiff, amounting to at least the sum of $22,869.68, which was deposited with other moneys in the savings banks and invested in the real estate mentioned in the complaint; and it ordered judgment for the plaintiff in respect of that sum, substantially according to the prayer of the complaint.

The defendants Moore, having filed exceptions to the findings and conclusions of the court, appealed to the General Term, where the judgment of the Special Term was reversed- and a new trial was ordered for errors of law only. The plaintiff then appealed to this court.

It is not disputed that, upon the facts found, the plaintiff was entitled to the judgment given at the Special Term. The General Term reversed the judgment on the ground that there-was no evidence to warrant the findings that the plaintiff had lost any money or that Moore had wrongfully retained or em

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bezzled any; and such is now the claim of Moore, and his mother.

As the reversal was upon the law only, we have not to deal with the weight of the evidence, but simply to determine whether there was any evidence which authorized the findings of the essential facts.

It was impossible for the plaintiff to furnish any direct-evidence of the precise extent of Moore’s misconduct. He kept no account, and was not required to keep any, of the moneys received by him for tolls; and the plaintiff had no means of knowing how much money he received. At the end of each day it was his duty to place all the tolls received by him, together with a statement of the amount thereof, in a bag, and deliver the bag at the plaintiff’s office. But it had no means of knowing whether the bag contained all the tolls collected during the day. It was able, however, to give evidence which we think fully justified the findings of the Special Term and the judgment there given.

Moore was born in 1841, of poor parents. For several years prior to.his death, about the year 1856, his father was a day laborer, and his mother did washing for other people in the way ordinarily done by poor women. Before the death of the father his family consisted of his wife, the defendant Moore, and three young daughters, and they lived in a cheap house where they hired three rooms. The daughters began to work at about the age of fourteen : the eldest about 1850, continuing so to do until her marriage in 1857; the second one about 1860, continuing so to do until her marriage in 1867; and the youngest about 1861, continuing so to do until her death in 1866.

In 1862 the son, John H., enlisted in the army, and prior to that time the family were apparently poor, having no visible property except a small amount of cheap furniture. When John H. enlisted he received a bounty, and then his mother opened a bank account in the Williamsburgh Savings Bank, in the joint names of herself and her son, and deposited therein •the bounty received by her son and other money received by

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him from time to time during the war and afterwards down to January 1,1807, when the total deposits standing in their joint names amounted to $699.68.

After he returned from the war, until he entered the employment of the plaintiff, he was hired as the driver of a truck for wages at-$7 per week. When he applied to the plaintiff for employment he stated that his mother was very poor; that he could not make both ends meet by the wages he was receiving as driver of the truck, and that it would be a great charity, on account of his mother, to give him employment His salary while bridgeman was $50 per month; while gateman $00 per month; and while ferry-master, a portion of the time $75 and a portion of the time $85 per month.

Soon after entering the employment of the plaintiff he with his mother began to live in a better style and to deposit money with considerable regularity in different savings banks, depositing in each year, after paying all his living expenses, more than his entire salary. The result was that at the time of his discharge from the employment of the plaintiff he had on deposit in six different savings banks, all in his own name excepting two, which were in the names of himself and his mother, about $30,000; and had invested in real estate in the City of Brooklyn $15,350.

During all this time he had no other business and no other apparent means of making or earning any money. Where did this considerable fortune, accumulated with successive accretions during the years he was handling the moneys of the plaintiff, come from ? There is some further evidence to show. A witness gave some evidence tending to show that he stole $5 from the drawer in the plaintiff’s ferry-house in 1873. Another witness, who was employed by the plaintiff to watch him, testified that in December, 1882, on three different occasions he saw him at the close of his day’s labor, just before leaving the ferry-house, take bills from the money drawer and put them in his pocket, and then take the balance of the money and place it in the bag for return to the office of the plaintiff.

Afterwards, on the 11th day of January, 1883, the treasurer

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of the company sent for him and asked him to explain how he came by so much real estate, and whether he kept any savings bank book or account, and he stated that he had purchased the real estate with his savings, and that he never had any bank account or savings bank book, and made other false statements.

Afterwards, on the 17th of January, when police officers attempted to arrest him upon a warrant charging him with crime against the plaintiff, he apparently attempted to run . away from the officers, probably to get into his house before they could arrest him; and after his arrest, before he could get into his house, he offered to give the police officers $500 if they would let him go into his house for one minute.

After his arrest he was searched, and there were found in one of his pockets four savings bank books representing about $9,000 of deposits. It is a reasonable inference that he desired to get into his house t.o conceal the bank books so that they should Hot reveal his large deposits.

After the discharge of Moore from the employment of the . plaintiff, his successor in the office of ferry-master returned to the company for the succeeding month much more toll-money than Moore did for the corresponding period of the preceding year, although there was no apparent reason for a larger receipt of tolls. With all these facts pressing upon hini and calling in question his integrity, Moore did not offer himse! a witness on his own behalf, although opportunity was affords him to he sworn and testify.

.This evidence, so far as it tends to show a misappropriation by Moore of plaintiff’s money, is mainly circumstantial. Some of the circumstances are not very strong and, standing alone, would he quite inconclusive and insufficient as the basis for any judgment. But they all point in one direction ; and combined, they furnish great probative force.' They do not ex-elude every hypothesis but that of Mobre’s wrongdoing; but they all harmonize with that of his guilt. His innocence'may be possible. But courts,"in weighing evidence and reaching conclusions, do not deal with possibilities, but with probabilities. ,

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It may be that in reaching a conclusion adverse to Moorp a mistake has been made. But mistakes cannot be eliminated from the administration of justice by human tribunals. No mere certainty in proof should be required than is ordinarily practicable. In civil trials the party having the affirmative must make out his case by a preponderance of evidence. The competent proof which would ordinarily satisfy a reasonable person should satisfy a court and justify its judgment.

In this case it is not for us to determine how satisfactory plaintiff’s evidence was, but whether there was any evidence to sustain the judgment. That there was some and sufficient we have no doubt. Moore receive a large amount of money for the plaintiff ; how much cannot be shown with precision. It called upon him to account for the money. He rendered no account and made no satisfactory statement. He deposited a portion of the money in plaintiff’s office, and the evidence renders it highly probable that he deposited the balance in savings banks for his own use. Its loss may be measured to some extent by his otherwise unaccountable gains. The case against him is not one merely of suspicion, but of great probability.

There is no rule of law which requires the plaintiff in a civil action, when a judgment against the defendant may establish his guilt of a crime, to prove his case with the same certainty which is required in criminal prosecutions.

Nothing more is required in such cases than a just preponderance of evidence, always giving the defendant the benefit of the presumption of innocence. Where a judgment for the plaintiff involves crime or a moral turpitude on the part of the defendant, the court should always require satisfactory proof; and when that has been given, judgment should follow regardless of consequences. In no other way can -the law be properly administered and private rights effectually protected.

Moore, having occupied a confidential relation with the plaintiff, and received a large amount of money for it, of which it had no account and no precise.knowledge, when called upon in reference to the money so received» should at, least have

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been frank and truthful, and have given the best account he could. His refusal to be sworn as a witness when confronted with plaintiff’s evidence goes far, under the circumstances of this case, to overthrow the presumption of innocence to which he would otherwise be entitled, and which might solve a doubtful case in his favor.

We have thus far brought into view only the evidence given on the part of the plaintiff; aud have yet to notice that relied upon by the defendants.

Moore’s account of his great accumulation of property is that a large share of it was given to him by his mother, and she is produced as a witness to prove it. Her story is as follows :

She and her husband came to this country from Ireland in 1836, bringing with them 500 guineas. It does not appear what was done with this money, and it is not claimed that it was ever deposited in bank or invested. She kept boarders for about thirteen years, and during a portion of the same time a retail liquor store. Her husband for several years bought and sold cattle and hogs and butchered them; and in these kinds of business they made money which was kept by her. All these kinds of business terminated before 1853. After that her husband, who sometimes indulged in too much drink, worked, until his death in 1856, in a distillery as a day laborer, for $12 per week. What her children earned was brought to her and saved, although prior to 1856 it is certain from their ages that they could have earned but very little.

In 1856, when her husband died, she had accumulated in this way $15,000, ten or twelve thousand of which was in bank bills, and the balance in gold. This money was all accumulated prior to 1854, and, as it was accuu ulated, was put and kept in a wooden chest under or behind her bed. It does not appear that any member of her family knew that she had this money, and no witness is produced who ever saw it or heard of it. She kept this large sum of money in that chest unknown to any one until l'S'TO. During all that time she lived in poverty, and she continued to do washing for other people}

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until three years before the trial of this action, when she was seventy-six years old. She did not deposit the money in savings banks for fear she might lose it, although she lived near the Williamsburgh Savings Bank, and knew it was a very strong bank with an immense surplus. Although she was afraid to deposit the money in banks she kept the bank bills, most of them for more than twenty years, in a frail wooden box through the financial crisis of 1857, and until long after such bills liad gone out of circulation and been supplanted by the national currency, and the State banks had ceased to do business. She kept the gold, notwithstanding the enormous premiums which it had reached, until the premium had been mostly swept away. While she distrusted the banks for her own money, she was careful to deposit the money earned by her son before he entered the employment of the plaintiff from time to time as he earned it in a savings hank. Although she kept this money so long, some of it certainly thirty years, in 1870 she began to dole it out to her son ; at first in small sums and then in larger sums, until she had given all of it to him. She suddenly, in 1870, acquired confidence in banks and in her son, and began to dispose of the hoarding of many years, and still took in washing to earn money.

It is also a singular coincidence that she began to swell her son’s bank account at the same' time when the complaint charges that he began to embezzle the moneys of the plaintiff.

Such is her story, uncorroborated in a single essential particular. It is against common experience and observation. It is possible that it is true, but it is highly improbable. It is extraordinary and incredible, and certainly the trial court was not bound to believe it.

While a court is bound to believe a disinterested, unimpeached, uncontradicted witness, who gives evidence not in any way discredited or in itself improbable or incredible, it is not bound to give credit to a witness who is interested in the result of the action, and whose evidence is improbable and discredited by circumstances, or is against common experience and observation.

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Hero Mrs. Moore was interested, and it is enough for us to say that her evidence was of such a character that no court was bound in law to believe it, and the case is.thus left to stand upon the plaintiffs evidence.

We see no reason to believe that the trial court committed any error to the prejudice of the defendants in the amount awarded to the plaintiff.

We are therefore of opinion that the order of the General Term should be reversed, and the judgment of the Special Term affirmed with costs.

Note on Action to Establish Constructive Trust.

As to the general principles applicable to actions to establish a trust, see 13 Abb. N. C., 334 , and 14 id., 103, 255.

For recent cases see the following:

In Atkinson v. Ward (Ark. Supm. Ct., Nov., 1886), 2 Southw. Rep., 77, an action to charge premises with a trust for the benefit of plaintiffs, upon the ground that a storehouse had been built upon the land with money misappropriated by their employee while he had full charge of a branch store of the plaintiffs, was sustained, upon evidence, similar to that in the case in the text, of the acquirement of property unaccounted for otherwise than by the conversion to his own use of the money of the plaintiffs. And the premises were charged with the trust ■in the hands of a purchaser with constructive notice.

Higgins v. Higgins, 14 Abb. N. C., 13 (action sustained to establish trust for husband in property conveyed to wife).

Schroder v. Wanzor, 36 Hun., 423 (action by wife who had contributed to pay for improving a burial lot, to establish a trust or specifically secure it to that use).

Barry v. Lambert, 98 N. Y., 300 (action to charge with a trust for $2000, a mortgage for $8000, which an executor had taken as such by using $6000, moneys of the estate, with $2000 of plaintiffs.

Dodge v. Stevens, 94 N. Y., 209 (action sustained to charge with trust, property of the trust bought in by the trustee in his own name).

Plum v. Studebaker, (Mo., 1886), 1 Southw. Rep., 217 (where a deed of trust to secure a firm debt having been executed by the partners, their wives also joining, and the deed covering property owned by a wife, and a subsequent deed of trust was given to other creditors by the

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same grantors of the same property, subject to the prior deed, and it was held that the wife could purchase at the sale in foreclosure of the first trust deed, free from any lien of the second trust deed. See, also, 17 Abb. N. C., 429 , note as to trustees buying in).

McRobert v. Harrison, 20 Weekly Dig., 228 (action sustained to establish trust in a lease which defendant had taken when plaintiff was equitably entitled to it.

Compare People’s Bank v. St. Anthony’s Church, 38 Hun., 330 , where an action was brought by a judgment creditor of a Roman Catholic Church to secure the payment of his judgment from a fund deposited by the pastor of the church in his own name in a bank. The moneys so deposited were the contributions made by the members of the congregation, on successive Sundays, and were not contributed for any specific purpose. Deld, that as the plaintiff failed to show a complete gift to the church, or that it had a clear title to the fund, the court properly refused to grant a temporary injunction restraining the pastor and bank from interfering with the fund.