Ackerman v. Cobb Lime Co. — 35 N.Y. St. Rep. 284

Majority

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Warren Ackerman, App’lt, v. The Cobb Lime Co, Resp’t.^[1]

(Court of Appeals,

Filed January 20, 1891.)

Headnote

Evidence—Burden of proof.

Upon the trial of an action to recover the proceeds of certain notes received by Brown, a common agent, in payment of goods of the plaintiff and wrongfully and erroneously paid by the agent to the defendant, the parties stipulated that either party might read entries from the account of the other as contained in the books of Brown. It appeared from said books that both parties had been paid for all goods sold up to July, 1884. It appeared that subsequent to that date Brown transferred more in amount of plaintiff’s notes taken for cement to apply on defendant’s lime account than he transferred to the plaintiff of the notes taken for defendant’s lime to apply .on the plaintiff’s cement account. Held, that plaintiff made out a case for recovering such excess of the notes taken after July, 1884, and the burden of proof was upon defendant to disprove the inference of indebtedness.

Appeal from judgment of the supreme court, general term, first department, affirming judgment for defendant entered upon the report of a referee.

One John R. Brown acted as the common agent of the plaintiff and the defendant, at the city of New York, selling cement on commission for the plaintiff, and lime on commission for the defendant.

In November, 1884, he made a general assignment for the benefit of his creditors, and he subsequently absconded; whereupon it was discovered by the plaintiff, that a number of promissory

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notes, representing upwards of $4,000, which had been received by Brown in payment for the plaintiff’s cement, had been by him turned over to the Cobb Lime Company on account of the sales of lime which he had effected in behalf of that company. The plaintiff brought the present suit to recover the aggregate amount which the defendant had realized upon such notes. A general demurrer was interposed to the complaint and the case was sent to a referee. Upon the trial • the parties entered into a stipulation which permitted either party to read entries from the account of the other, as contained in the books of Brown, the common agent. When all the evidence was in, it appeared not only that the Cobb Lime Company had received from Brown a considerable amount in the form of notes given to him in payment for the plaintiff’s cement, but on the other hand, that the plaintiff had received from Brown a considerable amount in the form of notes given to him in payment for the Cobb Lime Company’s lime. At the close of the case it was admitted by the counsel for the plaintiff that the proof did not disclose whether during the course of Brown’s common agency the plaintiff or defendant had received the larger amount of notes given for lime or cement of the other party. The referee dismissed the complaint on the ground that the evidence was insufficient to warrant a recovery by the plaintiff; and on appeal the general term affirmed his judgment.

Rowland M. Hall, for app’lt; Wheeler H Peckham, for resp’t. x

It appears by the books of Brown, which, by consent, were admitted in evidence, in connection with the accounts, that the defendant had been paid substantially for all the lime sold by Brown for them up to July 31, 1884; and the plaintiff, in like manner, for all the cement sold by him up to July 8, 1884. It was, therefore, a matter of no moment to either party whether Brown had, as respects transactions prior to these dates respectively, misapplied the notes taken for the property of the respective parties, by turning notes belonging to one over to the other. If, therefore, it had appeared, for instance, that the plaintiff had not received as many of the notes given for the defendant’s lime as the defendant had of notes given for the plaintiff’s cement, no cause of action would have been shown in plaintiff’s favor, because as the plaintiff had through Brown received full payment for his cement, he had nothing of which he could complain, although Brown had wrongfully used notes taken for cement in turning them over to the defendant.

The same would be true as to the defendant under similar circumstances.

Therefore, the admission made on the trial that it did not appear from the evidence which of the parties received from Brown during the course of his joint agency (which ran through five or six years prior to July, 1884), the larger amount of the notes of the other party, was not an answer to the case made by the plaintiff.

It appeared that subsequent to the balancing of thh accounts of the respective parties in July, 1884, Brown dealt with the notes

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taken on subsequent sales, the same as before, and the dealing continued up to his failure in November, 1884, and that during that time he transferred to the defendant inore in amount of the plaintiff’s notes taken for cement, to apply on defendant’s lime account, than he transferred to the plaintiff, of the notes taken for defendant’s lime, to apply on the plaintiff’s cement account. Both parties were entirely innocent, each supposing that the notes received represented sales of lime or cement furnished by the party receiving the note. Prima facie therefore, as it seems to us, the plaintiff made out a case for recovering as to such excess of the notes taken after July, 1884, for plaintiff’s cement, as was in defendant’s hands over .and above the amount of notes taken for defendant’s lime, after the same period, received by plaintiff. As the evidence stood the burden was cast on the defendant to disprove the inference of indebtedness to the plaintiff arising from the circumstances.

We do not see that the action was by the' stipulation turned into an action in equity for an accounting, but even in that view, prima facie, there was a balance due tojke plaintiff.

We think the judgment should be reversed and a new trial granted.

All concur, except Peckham, Gray and O’Brien, JJ., not voting.