Case ID: misc_92/html/0453-01.html
Source: Caselaw Access Project
Author: {"author": "Bijur, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Concetta Sagone, as Administratrix of the Goods, Chattels and Credits which were of Giacomo Sagone, Deceased, Respondent, v. David Clinton Mackey, Appellant.
    (Supreme Court, Appellate Term, First Department,
    December, 1915.)
    Conversion — of money deposited with defendant by plaintiff — when action maintainable — appeal.
    In an action for the conversion of money deposited by plaintiff with defendant, a judgment in favor of plaintiff was reversed on the theory that the record on appeal showed that plaintiff’s dealings were with defendant solely as general agent for a certain surety company and that, consequently, if defendant misappropriated or otherwise improperly disposed of the same or similar sums the remedy lay with his principal, but that no action in conversion was maintainable by plaintiff. The whole or bulk of the money in controversy was deposited in the bank account maintained by defendant as general agent of the surety company. Motion for reargument in the Appellate Term denied but motion for leave to appeal to the Appellate Division granted.
    Motion for a reargument or leave to appeal to the Appellate Division.
    Wilder, Ewen & Patterson, for appellant.
    Samuel F. Frank, for respondent.
   Bijur, J.

This action was brought against the defendant for the conversion of money deposited by the plaintiff and a recovery had in favor of plaintiff. The judgment was reversed on the theory that the record showed that plaintiff’s dealings were with defendant solely as general agent of the Illinois Surety Company, and that, consequently, if defendant misappropriated or otherwise improperly disposed of the same or similar sums the remedy lay with his principal, hut that no action in conversion could he maintained by the plaintiff. Incidentally, it was pointed out that the defendant, general agent, maintained a bank account as such, and that the whole or the bulk of the money in controversy was deposited therein.

Although plaintiff-respondent on this motion attempts to indicate points which have been overlooked by this’court, her counsel’s affidavit is largely a statement of his not unnatural dissatisfaction with our decision. But in order that our view may be made, if possible, more clear, it may be well to consider the objections which her counsel makes.

At the outset, it must be understood that the record presents no controverted questions of fact in the ordinary sense. It gives rise, as I understand it, merely to questions of law, or, in the view most favorable to respondent, permits of different inferences to be drawn from the facts proved.

Respondent now urges, first, that the bank account was not maintained by the general agent as such. I do not regard that point as material. -If the defendant received the money from plaintiff solely as the agent of the Illinois Surety Company so that immediately upon its receipt the Illinois Surety Company became the plaintiff’s debtor, it is to my mind quite immaterial what he subsequently did with the cash or check (the record does not disclose which it was). But the point being raised, it may not be inapt to point out that in the record the learned judge below remarked: I do not question he (defendant) had the right to deposit defendant’s money in this account,” and upon the objection of plaintiff’s counsel that the testimony was incompetent, irrelevant and immaterial, he thereupon excluded all the testimony offered by the defendant to show that the account was kept as it was by the authority and upon the express direction of the Illinois Surety Company, and, to this exclusion, defendant’s counsel excepted.

Respondent’s second point is that we were in error in assuming that “ the money was never received by the defendant individually, ’ ’ and he now urges that the Illinois Surety Company had no right to it or to dispose of it. As to this the record discloses that all the transactions which plaintiff ever had in which the defendant was in anywise concerned were with the Illinois Surety Company in the course of applications for bonds or undertakings which plaintiff required to collect certain moneys; that the moneys were deposited as a result of these collections or in the course thereof; and finally that plaintiff receipted for so much of the money as she herself was entitled to draw individually in a receipt which reads: “ Received from the Illinois Surety Company the sum of,” etc. The paper bears the imprint of the Illinois Surety Company, New York office, and further contains the legend “ D. Clinton Mackey (the defendant) Manager, J. Elihu Root Kunzman, Assistant Manager.” Moreover, it does not appear that defendant was ever physically present at any of the transactions conducted by the plaintiff, but that plaintiff’s dealings were exclusively with Kunzman, the “Assistant Manager ” of the Illinois Surety Company or of the New York office of the Illinois Surety Company, who, by the way, gave practically all the material evidence adduced on plaintiff’s behalf.

Respondent also urges now that a finding to the effect that the bank account was practically the bank account of the surety company and that the money was deposited substantially with the surety company is contrary to the finding of the learned judge below. If it were I should not hesitate to make it because, as I have said above, the- physical facts in evidence are not disputed, and it seems to me that we have drawn the only and inevitable inference therefrom. But as I read the record and recall the brief of respondent’s counsel on the appeal, his chief reliance was on a supposed rule of law that, even though defendant represented the Illinois Surety Company (as principal) throughout the transaction, nevertheless he might be made liable in conversion to plaintiff if in some way he failed ultimately to account to his principal for all the moneys received by him on the latter’s behalf, including the money here in controversy. In support of that rule respondent cited, as I remember it, an extract from 31 Cyc. 1561, just as on the present motion he cites a .somewhat similar extract from 2 Corpus Juris, 827, to the following effect: “ In accordance with the rule that an agent is liable for injury resulting from his misfeasance or malfeasance, an agent may be held liable in damages to third persons for conversion unless he acts solely for his principal or at his direction and without any knowledge actual or constructive of the wrongful conversion being committed by the principal. ’ ’

The vice of this argument consists in relying upon or appealing to a general statement without examination of the cas-es upon which it is based, and without, therefore, a limitation of its application to appropriate circumstances. The cases cited in both Cyc. and Corpus Juris on the proposition quoted refer to the conversion of chattels the title to which remained, of course, in the plaintiff, or the identity of which could unquestionably be followed into the hands of an agent who undertook to convert them while properly in the possession of his principal. There is no analogy between such cases and the one at bar where the plaintiff parted with the title to the moneys which forthwith, upon delivery to defendant, vested in his principal, the Illinois Surety Company. It is also true that an agent may be liable to a third party in tort although he is acting within the scope of his authority provided he himself commits' an independent or concurrent tort such as fraud, trespass or assault, but that rule has no bearing whatsoever upon the instant case.

And finally, it seems to be a recognized rule that in certain cases where money has been paid to an agent under mistake, fraud or duress and before he has paid the money over to his principal, an action for money had and received may be maintained against him. But in the case at bar there is no claim that the money was parted with by the plaintiff under circumstances of fraud, duress or mistake, and the action is for conversion and not for money had and received; •

On this subject 2 Corpus Juris,. 821, may be examined with profit. I find applicable the further statement there contained: that ‘ ‘ where the agent is known as such to the third person and the payment to him is a proper one in pursuance of a valid authority and without fraud, duress or mistake, the third person’s remedy in case he ultimately becomes entitled to a return of the money, is against the principal and he can not hold the agent individually liable for its return although he has not paid it over to his principal,” citing cases peculiarly in point, including Colvin v. Holbrook, 2 N. Y. 126, and Huffman v. Newman, 55 Nebr. 713.

I find, therefore, no reason for granting a reargument of this appeal. Respondent suggests, however, that a recovery for part of the money sued for in the present action was had in another suit, and that the judgment in that case was affirmed without opinion at a previous term of this court. We have not before us the record upon which the previous appeal was decided; but, to avoid the possibility that an unresolved conflict of decisions between two separate-terms of this court exists, I believe that the respondent should be granted leave to appeal to the Appellate Division.

Page and Shearn, JJ., concur.

Motion for reargument denied ancbmotion for leave to appeal to Appellate Division granted.