Case ID: ad_100/html/0488-01.html
Source: Caselaw Access Project
Author: {"author": "Hatch, J.;", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Julia Thaxter, Appellant, v. Mary T. Thain, Respondent.
    
      No right of recovery by the true owner exists in the case of money paid in discharge of an existing indebtedness — the rule is otherwise as to chattels and-choses in action- — stock delivered pursuant to d judgment and thereafter transferred cannot be recovered when the judgment is reversed.
    
    Where money is paid in discharge of an existing indebtedness, and the creditor-receiving it has no knowledge of any infirmity in his debtor’s title to the money, the true owner thereof is not entitled to recover it from the creditor.
    This rule, however, does not apply where chattels or choses in action have been, converted or misplaced, 'if they can he traced and identified either as to the; article of its proceeds. . '
    Pursuant to the terms of a judgment, one Huff delivered to one Brantingham a. number of shares of corporate- stock which the judgment determined that. Brantingham owned. Brantingham transferred the stock to her attorney in payment for professional services rendered by .-the latter, and the attorney, in. - -. turn,- transferred such stock to a third party in payment of an antecedent, indebtedness. Thereafter Huff took an appeal from the judgment and obtained, a reversal thereof. . . \ .
    
      -Held, that Huff was not entitled to-recover possession of the stock from the attorney’s transferee; ■
    That while the judgment remained in force any person dealing with Brantiug- .-- ham,in respect to the stoolc.was entitled to rely upon the judgment',"and was. not affected by the subsequent reversal thereof.
    -Appeal,-by the plaintiff, Julia Thaxter, from a judgment of the-Supreme- Court in favor of the defendant, entered in the office off the clerk of,the county of New York on the 5th day of April, 1904,. ■upon- the' decision of the court, rendered after a trial at the New -York Special Term, ad judging the defendant tó be entitled to the-possession of certain shares of stock.
    
      Paul Eugene Jones, for the appellant.
    
      Alexander Thain, for the respondent.
   Hatch, J.;

This action was brought to recover the' possession of 150 shares-of stock of the American Press Association 'and 10 shpes^of, the= preferred1 stock of the Hildreth Varnish Company, which had been transferred to an attorney for professional services. May Thorne: Brantingham recovered a judgment against Eunice E. Huff and others, whereby she obtained the. possession of the-stock, the subject of this action. After the transfer of the stock to the defendant an appeal was taken from the judgment and it was subsequently-reversed and set aside! After the verdict Mrs. Huff assigned her claim to the plaintiff.

■ The answer to the question involved in this action does not turn upon the character of the property delivered to the attorney or whether it could be traced or not. It is well settled that where-money is paid over in discharge, of an existing indebtedness and the-creditor receiving it has no knowledge of any infirmity in the title to the money in the person from whom it is obtained, it cannot -be-followed and recovered back at the instance of the true owner.. Such rule is illustrated by the case of Justh v. National Bank of the Commonwealth (56 N. Y. 478) and many other cases. This-rule, however, does not apply where chattels or dioses in action have been converted and misapplied, if. they can be traced and identified, either as to the article or its proceeds. (Hatch v. National Bank, 147 N. Y. 184; Stephens v. Board of Education, 79 id. 183; Van Alen v. American Nat. Bank, 52 id. 1.) In all these-classes of cases, whether of money or property, the question has. arisen where agents or other persons have wrongfully obtained, money or property from a principal, or wrongfully misapplied money or property committed to their custody. In the case of money-it cannot be followed where it has come into, the hands of a. bona fide holder for value and an antecedent debt is a sufficient’ consideration.. In the case of property it may be followed where ifc is capable of identification and its proceeds or value may be recovered even though it has lost its identity. These cases, however^, have no application to the present question. In this case Mrs., Brantingham recovered, a judgment which required Mrs. Huff to-deliver to her these securities, and Mrs. Huff obeyed the mandate: of that judgment. The judgment was not void, and so long as ifc stood its operative force was to vest in Mrs. Brantingham title to the property which she received under it. She was authorized to deal with it as fully and completely during the period, that it stood in-like manner as though it had never been reversed. Any person, dealing with her in respect of the property secured thereunder had the right to rely upon the faith of the judgment, was protected in-such dealing and remains unaffected in his property right obtained!: thereby by its subsequent reversal. This is the express holding in Langley v. Warner (3 N. Y. 327). Therein money was collected upon an- execution, was: received arid -applied'by the defendant upon an antecedent debt. The judgment was subsequently reversed. In an action by the defendant .in that judgment against the person who had received the money in discharge of his antecedent obligation it was held that the action would not lie; not for the reason that it was money, had no earmarks, and, therefore, could not be- followed, but for the reason that the judgment vested the plaintiff therein with title to the money collected thereunder and gave him authority to direct its application -in discharge of the existing obligation against him, that the defendant had the right to rely upon the faith of thé judgment and was protected thereunder iii receiving thé money-. The doctrine of this case lias received support in Lovett v. German Reformed Church (12 Barb. 67); by this court in Lesster v. Lawyers' Surety Co. (50 App. Div. 181), by the second department in Park Hill Co. v. Herriot (41 id. 324) and many other cases. Having title -to the property under the .judgment Mrs. Brantingham could ■and did convey to the attorney good title thereto, and the discharge •of his obligation was a sufficient consideration to support such transfer; If, as is claimed, by virtue of his agreement,, hé was a party in interest with Mrs. Brantingham in the judgment the situation would not be changed. In either'contingency he would take by the operative force of the judgment, and. obtain thereby the same title which Mrs. Brantingham held' and could convey the same.. In fact' the ■relation existing between Mrs, Brantingham and the attorney was -that of attorney and client, the agreement between them related ■alone to the contingency Of - his compensation. It'did not, however, •change such relation ; consequently he took title from. Mrs. Brantingham in discharge of the obligation which she was. under to him and thereby-acquired good title. This.title he could and did convey, to the defendant in discharge of an antecedent debtj.and thereby the defendant obtained a perfect title."

These views result in the conclusion that the judgment should be •affirmed, with costs. ' ...... ■ <

Van Brunt, P. J., O’Brien and Laughlin, JJ.,"concurred; Patterson, J., concurred in result. /

Judgment affirmed, with costs,