Case ID: ny-super-ct_24/html/0014-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court, Monell, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Shadrach Robinson et al. plaintiffs and appellants, vs. The Corn Exchange Fire and Inland Navigation Insurance Company, defendants and respondents.
    1. Insurers of persons having a special property in goods, for account of whnn it may concern, who after a loss and abandonment intervene and recover a part of the goods as matter of right and receive the proceeds without knowing the owner, in an action against them by such owner, for money had and received, are not liable for interest on the claim against them, until they have notice of his claim.
    2. The right to interest in such a case is a question of law, not of fact. It is only in that class of cases, where by law, interest may be recovered against a defendant as damages, that he has a right to have the jury pass upon the question of liability therefor.
    3. In such an action the necessary expenses of the defendants, paid in recovering and selling the goods insured, are to be allowed to the defendants to be deducted from the proceeds.
    (Before Barbour and Monell, JJ.)
    Heard April 15,1863;
    decided May 9, 1868,
    
      This was an appeal by the plaintiffs, from a judgment entered in their favor,, on a verdict rendered by the.jury pursuant to the direction of the court, on the trial of the cause.
    The plaintiffs (Shadrach Robinson and Charles H. Cummins) sued for money had and received by the defendants, to their use, alleging in the complaint that in 1854, the defendants sold a quantity of corn belonging to the plaintiffs, on account of the plaintiffs, and received for it, in or about the months of October and November, 1854, for the use of the said plaintiffs, and for them, $2326.37. That the plaintiffs have often requested the defendants to pay them, the plaintiffs, the said money thus received by the defendants, but the defendants have neglected and refused, and still neglect- and refuse to do so. And that the said defendants have had the use of, and interest upon, said money since it was received as aforesaid by said defendants for the plaintiffs’ use. Judgment was demanded for such' sum, with interest from November, 1854.
    The cause was tried on the 18th day of June, 1861, before Chief Justice Boswobth and a jury. The following facts* were proved on the trial.
    It appeared, by a stipulation in the case, that in September, 1854, the plaintiffs, by their agent, shipped a quantity of corn at the city of Buffalo, on board of tow boats owned by a Mr. Savage, consigned to N. H. Wolfe & Co. in the city of New York. Savage effected an insurance on the corn in the defendants’ company. At Albany the corn was transhipped on board of the barge Hudson, which on' its passage to New York became disabled and partly sunk. The defendants having intervened to save the corn from total loss, raised a portion of it, which they sold at auction for a certain sum, ($2326.37.) The expense of raising the barge to get at the porn, the freight from Castleton, where she sunk, to New York, and the charge for taking out and selling the corn, amounted to a certain sum, ($769.55,) leaving in the defendants’ hands as the net proceeds, a certain sum, ($1556.82.) Nothing was said in such stipulation, nor was there any other evidence, of the reasonableness or necessity of such expenditures. Savage commenced a suit against the defendants, on his policy of insurance, in 1855. In the complaint in that suit he claimed to recover for a total loss; but not the proceeds of the corn. That action being tried in April, 1861, he recovered therein the value of all the corn, less the amount received by the defendants for that part sold. On the 13th of «March, 1860, the plaintiffs demanded of the defendants payment of the sum received by them on the sale of the corn, which was refused.
    Upon the trial "of the present action the chief justice instructed the jury that the plaintiffs could recover only the net proceeds of the corn, and interest from the 13th of March, 1860, the date of their demand; and he directed a verdict accordingly for the plaintiffs. The plaintiffs’ counsel excepted to such charge, and the jury found a verdict for the plaintiffs for $1694.56, for which judgment was entered. The plaintiffs appealed.
    
      James Crombie, for the plaintiffs, appellants.
    I. The plaintiffs were entitled to recover interest upon the net proceeds of the corn from the time the defendants received them. 1. Because the defendants had used the money, and had received the interest upon it, as is admitted in the pleadings. When a person uses another’s money, or derives interest therefrom, he is as much bound to pay the interest thereon, as the principal. (1 Am. Lead. Cas. 358, and cases cited. Dodge v. Perkins, 9 Pick. 369. Miller v. Bank of Orleans, 5 Whart. 503.) 2. As matter of law upon the facts, the plaintiffs were entitled to recover interest upon the net proceeds, (a.) Because the defendants sold the corn without their consent, and therefore without any right or authority to do so. (2 Phil. Ins. 333, 335, and cases cited. 1 Am. Lead. Cas. 360, and cases cited. Greenly v. Hopkins, 10 Wend. 96. Chauncey v. Yeaton, 1 N. H. Rep. 151. American Ins. Co. v. Center, 4 Wend. 52. Bryant v. Commonwealth Ins. Co., 13 Pick. 553. Parsons Merc. Law, 380.) (6.) Because the defendants ought in good- faith to haVe paid over the money received by them as soon as it was received, without any demand therefor. (Stacy et al. v. Graham, 14 N. Y. Rep. 492. Lynch v. De Viar, 3 John. Cas. 303. Pease v. Barber, 3 Caines, 266. Van Rensselaer v. Jewett, 5 Denio, 135; 2 N. Y. Rep. 135. Mason v. Waite, 17 Mass. R. 560; 1 Dallas, 313, 316. 1 Am. Lead. Cas. 341, 345.) The pendency of the suit of Edward Savage upon the policy was no excuse for the nonpayment of the money, as he did not own the corn, and could not recover the money received for it.
    II. If the court overrule the first point, then we submit that the judge erred in not submitting the question of interest to the jury. (Stacy v. Graham, 14 N. Y. Rep. [4 Kern.] 492. 1 Am. Lead. Cas. 252.. Van Rensselaer v. Jewett, 5 Denio, 135. 1 John. 315. Watkinson v. Laughton, 8 id. 213. Richmond v. Bronson, 5 Denio, 55.)
    III. The plaintiffs were entitled to recover from the defendants the gross amount received by them for the corn.
    The defendants had no right to sell the plaintiffs’ corn without consulting them. In order to excuse a sale, they should have made out a case of absolute necessity, in order to save the corn from destruction. No such necessity existed here. It appears from one of the items of expense, that they took a portion of the corn to New York. If they had time to do this, they could have notified the plaintiffs. . (2 Phil. on Ins. 333, 335, and cases there cited.)
    
    IV. At any rate, the question of the necessity and reasonableness of the defendants’ charges for expenses, should have been left to the jury.
    
      T. C. T. Buckley, for the defendants, respondents.
    I. The ruling of the judge, at the trial, on the subject of interest was correct. (Van Rensselaer v. Jewett, 2 N. Y. Rep. 140. Sedgw. on Damages, ed. 1858, p. 379. Phelps v. Bostwick, 22 Barb. 318. Williams v. Storrs, 6 John. Ch. 358. Harington v. Hoggart, 1 Barn. & Adol. 577, 574.) .
    There was no proper demand prior to March 13th, 1860. The order from Savage, if complied with, would have been ho "bar to the plaintiffs’ claim, as he was not their agent, and had no right to transfer the property in the corn.
    II. There is no admission or proof that the defendants have employed the money in question, or, derived any profit from its use. But the defendants, being mere stakeholders, would not be liable for interest, even if they used the money. (Jones v. Mallory, 22 Conn. Rep. 392.)
    III. In no aspect of the case are the defendants liable for the gross proceeds of the corn.
   By the Court, Monell, J.

The only exceptions argued upon this appeal, were to the charge of the judge, restricting the recovery to the net proceeds, and interest from the time the demand was made, and directing a verdict for such amount. The action for money had and received is an equitable action, and the party must show he has equity on his side. The rule in England is that interest is not recoverable in this action, (Walker v. Constable, 1 Bos. & Pull. 307,) but it is otherwise in this country. (Pease v. Barber, 3 Caines, 266. People v. Gasherie, 9 John. 71. Gillet v. Van Rensselaer, 15 N. Y. Rep. 397.) In this state interest is allowable where the circumstances of the case show that the plaintiff is equitably entitled to it.

The corn was rescued from total loss in October, 1854, and the proceeds of the sale were received by the defendants in Eovember, 1854. The insurance was effected by and in the name of Edward Savage, who sued the defendants upon the policy, to recover as for a total loss. There does not appear to be any evidence in the case, that at any time previous to the demand of the 13th of March, 1860, the defendants knew, or had any reason .to suppose the plaintiffs owned or had, any interest whatever in the corn. We asked the plaintiffs’ counsel in vain to point us to any testimony showing, or éven tending to show, such knowledge, or any thing which was calculated to even put the defendants upon inquiry. We are, therefore, to assume, that the defendants were at all times ignorant of the right of the plaintiffs to the proceeds of the corn, until they demanded payment therefor. Indeed, until the determination of the suit upon the policy, in which Savage sought to recover as for a total loss of all the corn, no action would lie against the defendants for the proceeds of the corn sold, either by Savage or the plaintiffs. Savage was liable to the plaintiffs as the carrier of the corn, and a recovery upon the policy by him as for a total loss, would, indisputably, have entitled the defendants to retain, as their own, the proceeds of the corn sold. Until the extent of the defendants’ liability was fixed by the judgment in the. suit of Savage against them, the plaintiffs could not call on the defendants for payment. This last action did not terminate until April 11, 1861, when the jury, under the direction of the court, deducted from their verdict, the net proceeds of the corn sold by the defendants.

It is at least questionable whether any recovery could be had in this action, for principal or interest, until the termination of the other suit, in April, 1861.

There is nothing in the circumstances of this case, which upon the principle of ex cequo et bono, required the defendants to pay the money to the plaintiffs, or to any other party, until their right to retain it was determined in the other suit. And even if this were, not so, and the defendants were mere depositaries of the money, they could not in conscience be called upon to pay either principal or interest until it was demanded of them. In that view they were mere trustees or bailees, who are never, except under special contract, chargeable with interest. (Utica Bank v. Van Gieson, 18 John. 485.)

I am, therefore,, of the opinion that the charge of the judge, if any thing, was too favorable to the plaintiffs. But as the defendants have not appealed, the judgment can not be disturbed for that reason, and the plaintiffs can not object.

There is no force in the argument that by the pleadings the defendants admitted that they had had the use of the money, and of the interest upon it, since they received it. The denial in the defendants’ answer, that they sold the plaintiffs’ corn, or that they received therefor any money whatever to the plaintiffs’ use, is a sufficient denial that they had the use of the money or of the interest upon it. The denial of the substantíve cause of action is enough to controvert all the. mere incidents, to it.., Besides, the allegation in the complaint is equivocal, and would be true, if the defendants had had the use of the money for one day, and no more, before suit brought. , In -rescuing the corn, and making sale thereof, the defendants paid from the gross proceeds, necessary expenses, which they were allowed to retain, under the ruling of the court. That the defendants had a right to intervene to save the cargo from total loss is not disputed; and even if they had no right .to sell without giving notice to the plaintiffs, there is nothing to show that they had any knowledge of the plaintiffs whatever. As the action is an equitable one for money received to the use of the plaintiffs, there is no principle in law or morals, which should make the defendants liable for any more than they actually received. Therefore the necessary expenses paid in raising and selling the corn, were properly allowed to be retained by the.defendants.

The right to. recover interest in a case of'this Idnd, is a question .of law, and not of fact, and the judge properly refused to submit 'it to the jury. Interest is the incident to a debt, and the. law -fixes the time when it begins to accrue. It is only in the- class of-cases where interest may be charged against a defendant as damages, that the jury has a right to pass upon the question. (Richmonds v. Bronson, 5 Denio, 55.)

Had there been any evidence impeaching the reasonableness of the expenses incurred in rescuing and selling the corn, it would probably have been error to have taken that question from the jury. But there is no such evidence; and had the jury, upon the question being submitted to them, found, under .the evidence, that the expenses were unreasonable, the court would have set the verdict aside as contrary to the evidence. • '

There was therefore nothing in the case upon which it was necessary for the jury to deliberate; consequently there was no error in directing a verdict for the plaintiff.

The judgment should.be affirmed.