Mayer v. Kilpatrick — 58 N.Y. St. Rep. 387

Majority

p. 387

Sophie Mayer, App’lt, v. Judson Kilpatrick et al., Resp’ts.

(New York Common Pleas, General Term,

Filed April 2, 1894.)

Headnote

1. Principal and Agent—Payment oe latter’s debt.

A party who, with knowledge of the rights of the principal, has received payment of a demand against the agent out of funds belonging to the former, is liable in an action of conversion.

2. Same—Agent.

He cannot escape liability on the ground that, in the conversion, he is acting for another person.

3. Bills and- Notes—Title.

After the utterance of a check, the title and right of possession pass to the payee, but, upon its rescission and agreement to cancel and return, they revert to the maker.

Appeal from a judgment for defendants dismissing the complaint. Action for damages for the alleged conversion of a cheque.

Alex. Thain, (George William Hart, of counsel), for app’lt; Hawldns & Delajield, (Eugene D. Hawkins, of counsel), for resp'ts.

Plaintiff by Adolph Mayer, her husband and agent, conducted a tailoring business in premises of which the husband was the lessee in person and respecting which defendants were the agents of the lessor. In connection with and for the purpose of her business plaintiff kept a deposit account with the Riverside Bank against which her husband was authorized to draw as the exigencies of the business required. On July 11th, 1891, the husband paid defendants one month’s rent by a cheque to this order and signed by him “Adolph H. Mayer, Attorney.”

p. 388

Several days later defendants represented that the cheque had been mislaid or lost, and upon their promise to cancel and return it when found the husband was induced to and did issue another. The substituted cheque was paid by the bank and thereafter defendants also presented and received payment of the first. The proceeds of the cheque agreed to be cancelled and returned were applied by defendants in payment of a further month’s rent which they claimed to be due the lessor and is in arrear, but the justice of which claim the husband disputed. This action was brought to recover damages for the conversion of the cheque last mentioned. The foregoing facts appeared in evidence unchallenged when plaintiff closed the introduction of direct evidence and upon motion of defendants’ counsel the court dismissed the complaint. We are of the opinion that this was error for which the judgment should be reversed. The specific grounds of the motion for nonsuit were that plaintiff had no beneficial interest in the cheque alleged to have been converted or its proceeds, and that the cheque was given by the husband to pay his personal debt; also, that defendants were not liable because they received the cheque as agents for the lessor,. In view of the facts that the cheque alleged to have been converted was rescinded and agreed to be cancelled and returned by defendants after another had been given them in its place, and that it does not appear that the husband consented to its application to the payment of his alleged disputed debt, it is too plain to require argument that defendants cannot avail themselves of the protection which the law affords one, who in good faith, and in ignorance of the rights of a subsequently ascertained principal, has received payment of a demand against the agent out of funds belonging to the former. Story on Agency, § 444. Neither can the principal authorize, or be deemed to have authorized, the commission of an unlawful act by his agent, Brown v. Howard, 14 Johns., 119 , and defendants will not be permitted therefore to escape liability because in the conversion of the cheque they pretended to act for another, the lessor. It remains to consider only whether plaintiff had such an interest in the cheque, or its proceeds, as enabled her to maintain this action. In conversion it must appear that the plaintiff had the legal title to, or a general or special property in, or a right to the possession of the chattel or chose in action which is alleged to have been converted. Cooley on Torts, 2d ed. p. 517; Am. & Eng. Ency. of Law, vol. 4, p. 117; Bush v. Lyon, 9 Cow., 52 ; Dillenbeck v. Jerome, 7 Cow., 294 ; Hall v. Daggett, 6 Cow., 653 . The .burden in this respect was conclusively sustained by the plaintiff since for the purpose of a nonsuit the truth of every fact of which there is any evidence must be assumed. She authorized the making and utterance of the cheque ; her husband in these-matters acted as her agent. In legal intendment therefore the cheque was her’s, not that of her agent. Before utterance of the1 cheque the legal title thereto was in her; it was her property; she was entitled to its possession. After it was uttered the title, property, right of possession, passed to the payees, - but upon its recission, and the agreement for its cancellation and return, these reverted to her.

p. 389

The judgment should be reversed, and anew trial granted, with costs to appellant to abide the event.

All concur.