Case Name: RICHARD ROBBINS, et al., Plaintiffs and Appellants, v. JOHN H. FALCONER, Defendant and Respondent
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1878-02-04
Citations: 11 Jones & S. 363
Docket Number: 
Parties: RICHARD ROBBINS, et al., Plaintiffs and Appellants, v. JOHN H. FALCONER, Defendant and Respondent.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 43
Pages: 363–373

Head Matter:
RICHARD ROBBINS, et al., Plaintiffs and Appellants, v. JOHN H. FALCONER, Defendant and Respondent.
Decided February 4, 1878.
ORDER OF ARREST.—CODE OF PROCEDURE, § 179.—PRIN-CIPAL AND AGENT.
If according to the averments of a complaint, the plaintiff may have judgment, without proof of any facts which justify an order of arrest under section 179 of Code of Procedure, the court is not precluded from vacating an order of arrest on the ground that the cause of action and the grounds of arrest -are identical.
Section 179 of the Code of Procedure does not apply to a case where, by agreement between principal and agent, the agent may use the principal’s money as his own, so far as the legal title to it is concerned, while he promises to pay the amount on demand,—i. e., when the agreement contemplates the relation of debtor and creditor,—but only to a case where the obligation of the agent is to return the identical money or its traceable proceeds to the principal (McBurney *. Martin, 6 Robt. 502).
The mere fact that one is an agent to sell and to receive the proceeds does not make him liable for a tort in case he does not pay over the proceeds on demand, after those proceeds have passed from the specific form in which they were received and have been commingled with the agent’s own money. While they remain in the specific form, the principal may become entitled to their possession upon demand. Unless such is the case, to make the agent liable to hold the specific proceeds for the principal, there must be allegations to show that such was his special obligation.
In this case, in view of the above principles, the court held, that the order vacating order of arrest, should be affirmed.
Before Curtis, Ch. J., Sedgwick and Freedman, JJ.
Appeal from order, setting aside order of arrest.
The complaint was, “that heretofore, to wit, on February 23 and 27, and March 19, 1877, at the city of New York, these plaintiffs, who were and now are-co-partners doing business under the name and style of Bobbins, Bodington & Company, did authorize and empower the defendant as their confidential agent to sell for them in the city of New York, foreign bills of exchange, and that on the dates aforesaid the defendant did sell in the city of New York, for and on account of the plaintiffs and belonging to them, three bills of exchange, of the aggregate value of §15,107.36, which sum defendant then and there received as the proceeds of such sale.
“That afterwards the defendant paid over to these plaintiffs on account the sum of $13,000, but the further sum of $2,107.36, the balance of the aforesaid proceeds of sale, he has neglected and refused to pay over to these plaintiffs, though often requested by them so to do.
“Wherefore the plaintiffs pray.”
The order of arrest was made upon the complaint and the affidavit of an agent of plaintiffs, stating that the plaintiff entrusted to the defendants three bills of exchange, of the aggregate sum of $15,107, that when the bills “ were given to defendant by the plaintiffs, the defendant undertook and agreed for a compensation to be paid to him, to sell the same for cash in the city of New York, and when sold to remit the proceeds thereof to the plaintiffs at Beaufort, South Carolina, either by immediate remittance, or by honoring and paying at sight, drafts to be made on him by the plaintiffs against such proceeds that the defendant did sell the bills, and obtain, on their sale, the sum of $15,107, of which he remitted $13,000 and no more, but that the balance the defendant “refuses to pay to the plaintiffs on their request which has been frequently made, that defendant admits that above money was collected by him, but that he says “ that he has appropriated the same to his own use, by commingling it with money” of his own, and that he no longer has it to pay to the plaintiffs,” that said bills “were entrusted to the defendant in the trust and confidence reposed in him, that he would faithfully preserve and remit to these plaintiffs, their proceeds, when sold.”
The defendant after his arrest moved to set aside the order, upon the complaint and affidavit above set out, and the affidavit of the defendant, stating that the defendant denies that plaintiff entrusted to him the bills with any understanding that deponent was to remit immediately the proceeds thereof, or that the bills were entrusted to the defendant in the trust and confidence reposed in him, under his promise that he could faithfully preserve and remit their proceeds, or under any other conditions than those stated in the affidavit; that plaintiffs had sent other bills to defendant for sale, before February 6, 1877, and that up to that date the defendant had been in the habit of depositing the proceeds of such other bills in the Bank of British North America in New York, to the credit of the plaintiffs, but that after that date, that bank refused to carry the account any longer, and thereafter defendant, “ at the request of plaintiffs, acted as banker for the said plaintiffs and retained the proceeds of their draft on deposit • in his own account, and gave them credit therefor on his books ; that it was agreed by both parties that the defendant should have the right to deposit said money in bank in his own name, as any other banker or broker would do ; that in the course of their dealing, plaintiffs drew for more than was to their credit with defendant, that at other times they allowed their money to remain deposited with defendant for considerable period of time; that, on February 24, 1877, the plaintiffs sent to defendant their letter annexed to the affidavit, which letter enclosed two bills, and directed defendant ‘ Please sell at best rate and place proceeds to our credit with, you that the proceeds of these bills was the sum of $5,380.67, mentioned in complaint; that on March 8, 1877, the plaintiffs wrote another letter annexed to affidavit, advising a draft upon defendant of $2,000, and saying, “From this date we propose advising you, whenever we find it necessary to draw upon you ;’ ’ that on March 19, 1877, there was to the credit of plaintiffs with defendant $574.55, all other proceeds having been paid to plaintiffs ; that on March 19, 1877, the plaintiffs sent the bills the proceeds of which, as sold by defendant, amounted to the sum (stated in the affidavit of plaintiff’s agent), of $7,533.31 ; that defendant deposited that amount in bank to his own credit, and immediately notified the plaintiffs of the sale and the proceeds ; that on March 22,1877, plaintiffs drew on defendant for $6,000, which was paid by defendant’s check on his bank ; that afterwards, until March 26, the plaintiffs made no further draft, and on that day the defendant was obliged to suspend payment and made a general assignment for benefit- of his creditors.
The court vacated the order of arrest, and plaintiffs appeal.
Edward D. McCarthy, attorney, and of counsel, for appellants, urged :
—I. This case is distinguishable from the two cases cited on argument (40 N. Y. 124; 51 Id. 594) ; both of which were actions for money had and received. The nature of the action can be determined by the complaint only. On the trial of this action, unless a conversion is proved (a trover of property), the complaint will fail and the action will be dismissed. Proof that would make out a good cause of action for money had and received, will not maintain this cause of action. That this cause of action is identical with the ground of arrest, will not be doubted. The cause of action is in tort for conversion of property.
II. It is the settled law of our courts, that in such a case as this, an order of arrest will not be vacated upon affidavits (Stuyvesant v. Bowran, 34 How. 51; Barret v. Gracie, 34 Barb. 20; Solomon v. Waas, 2 Hill. 179; Geller v. Seixas, 4 Abb. Pr. 103; Frost v. Mc-Carger, 14 How. 131; Ely v. Mumford, 47 Barb. 629; Merritt v. Hecksher, 50 Id. 437; Jaroslauski v. Saunderson, 1 Daly, 232; Merwin v. Playford, 3 Rob. 702; Swift v. Wylie, 5 Id. 680; Nelson v. Blanchfield, 54 Barb. 630).
III. The case stands thus : By the complaint and plaintiffs’ affidavit a cause of action, ex delicto, is alleged. By the defendant’s affidavit a cause of action, ex contractu only, is admitted. The general term of this court have held that this question, which decides “the capacity” in which defendant received money, and thereby became liable, cannot be tried on a mere motion (See Swift v. Wylie, 5 Rob. 684, and the cases there cited; see also 3 Id. 703, see also cases cited under the second point).
IV. Nothing whatever appears in the affidavit of defendant to disprove our cause of action against him. No doubt if defendant were a general banker, with whom plaintiffs had had an account, he could not be held in trover for his failure or inability to make good a general deposit (46 N. Y. 84), but defendant’s own affidavit admits that he was not a banker, because he says that he deposited the proceeds of our bills in a bank in the city of New York.
Carter & Eaton, attorneys, and William, B. Hornblower, of counsel, for respondent, among other things, urged :
—I. This is not a case where the cause of action and the ground of arrest are identical. Hence the court can and must decide this motion on the preponderance of evidence, and is not bound by the technical rules which apply on a motion to vacate an order of arrest where the cause of action and the ground of arrest are identical.
II. The cause of action is founded upon an indebtedness from defendant to plaintiff's. The ground of arrest is that this indebtedness was created by defendant while acting in a fiduciary capacity. The allegations in the complaint as to this fiduciary capacity are not traversable, and even if the defendant did traverse them, there would be enough in the complaint untraversed to justify a recovery by the plaintiffs. That such allegations in a complaint are not traversable, and that they do not constitute part of the cause of action, is well settled (Wood v. Henry, 40 N. Y. 124; Prouty v. Swift, 51 Id. 594; Republic of Mexico v. Arrangois [Super. Ct. Sp. T., Hoffman, J.], 11 How. Pr. 1; Liddell v. Paton, 7 Hun, 195; affi’d by Ct. of App. [not yet reported]).
III. This. is not an action for conversion. The court of appeals has repeatedly held that an action for conversion cannot be maintained in such a case as this (Walter v. Bennett, 16 N. Y. 250; Conaughty v. Nichols, 42 Id. 83: Green tree v. Rosenstock, 61 Id. 583; Vilmar v. Schall, 61 Id. 564; Austin v. Rawdon, 44 Id. 63).
IV. The bu/rden of proof is on plaintiff in an application to vacate an order of arrest where the ground of arrest and the cause of action are different. If plaintiffs’ evidence does not preponderate order must be vacated (Allen v. McCrasson, 32 Barb. 662; Mecklin v. Berry, 23 How. Pr. 380; Hoy v. Duncan, 33 N. Y. Super. Ct. 579; Chapin v. Seeley, 13 How. Pr. 490; Union Bank v. Mott, 6 Abb. Pr. 315; Hernandez v. Carnobeli, 10 How. 433; Republic of Mexico v. Arrangois [Superior Ct., Sp. T., Hoffman, J.], 11 How. 1; Mulrey v. Collett, 3 Rob. 716; Allen v. McCrasson, 33 Barb. 663).
V. Bnt even if the cause of action and the ground of arrest were identical, the defendant could introduce affidavits in opposition to the papers on which the order of arrest was granted, and if the facts as they appear from the affidavits are such that the court would be justified in taking the case from the jury on the trial and directing a verdict for defendant, then the court must vacate the order -of arrest. This was held in Lorillard Fire Ins. Co. v. Meshural, 7 Robt. 308; Hoy v. Duncan, 33 N. Y. Super. Ct. 555; Farris v. Peck, 2 Sweeny, 689; Barritt v. Gracie, 34 Barb. 30; Merritt v. Hecksher, 50 Id. 451; Frost v. McCarger, 14 How. Pr. 131; Levins v. Noble, 15 Abb. Pr. 131; Stuyvesant v. Bowran, 3 Abb. Pr. N. S. 270; Royal Ins. Co. v. Noble, 5 Id. 54; Tallman v. Whitney, 5 Daly, 505; Griswold v. Sweet, 49 How. Pr. 171. In Elwood v. Gardner, 45 N. Y. 349, the court of appeals appears to take the ground that in all cases the arrest may be vacated upon the merits, whether a nonsuit would be proper or not. See, to same effect, Liddell v. Paton, 7 Hun, 195.
VI. The rule is well settled that an agent is not liable for conversion, unless he was bound to pay over to the principal the identical moneys received by him for the account of the principal (Walter v. Bennett, 16 N. Y 250; Conaughty v. Nichols, 43 Id. 83; Greentree v. Rosenstock, 61 Id. 583; Vilmar v. Schall, Id. 564; Morange v. Waldron, 6 Hun, 539; Stoll v. King, 8 How. Pr. 300; Buchanan Farm Oil Co. v. Woodman, 1 Hun, 641; Bussing v. Thompson, 15 How. Pr. 97; Sutton v. De Camp, 4 Abb. Pr. N. S. 484; McBurney v. Martin, 6 Robt. 502; Goodrich v. Dunbar, 17 Barb. 644; Angus v. Dunscomb, 8 How. Pr. 14). The phrase “ fiduciary character” occurs in the bankrupt law with regard to debts which are not barred by discharge (U. S. Rev. St. § 5117). In Hervey v. Devereux (72 N. C. 462), it is held that a general deposit of money subject to call did not constitute fiduciary relations. In Grover & Baker Sewing Machine Co. v. Clinton (5 Biss. 324), it appeared that defendants had - been agents for the plaintiff in the sale of sewing machines, receiving a commission and accounting and paying over monthly. The court held that an authority to mingle the money collected with the agent s own funds might be fairly implied from the agreement to pay over monthly, and that the debt was therefore not of a fiduciary nature (U. S. Circ. Ct. West. D. of Wisc. ; See Woolsey v. Cade, Sup. Ct. Ala. 15 N. B. R. 238; Owsley v. Cobin, U. S. Cir. Ct. S. Car., opinion by Chief Justice Waite, 15 N. B. R. 489).

Opinion:
By the Court.—Sedgwick, J.
—The first position of the learned counsel for appellants is, that the cause of action, stated in the complaint, comprises facts which justify arrest, under section 179 of Code of Procedure, and that if the affidavits disclose any facts to sustain it, the court below should have held the order of arrest, and not have determined the issues of > this action, which a jury must decide.
The court of appeals definitely decided, having, at the time, section' 288 in view, that a complaint which contained averments of enough facts to justify a verdict for plaintiff, irrespective of, and disregarding all averments of the complaint that could show a cause of arrest under section 179, did not state a cause of action, which of itself' authorized arrest under that section. The substantial reason was, that the plaintiff would prove enough to justify a verdict, and the jury would not be called upon to say if -the other and immaterial issues proffered by complaint, should be decided in plaintiff's favor.
Looking, then, at the complaint, we must see, if according to its averments, the plaintiffs might have judgment without proof of any facts which sustain an arrest under section 179. The complaint avers that the plaintiffs authorized and empowered the defendant, as their confidential agent, to sell for them the bills of exchange; that the defendant did sell them, and receive the proceeds ; that he paid over a part of the proceeds, but refused to pay the rest of them, upon a demand by plaintiffs. It is manifest that nothing to sustain the power to arrest is stated, except it be that defendant was authorized and empowered to sell for plaintiffs as their agent. The word "confidential"' agent does not affect the question.
But the mere fact that the defendant is an agent to sell and to receive the proceeds does not make him liable for a tort in "case he does not pay over the proceeds on demand, after those proceeds have passed, from the specific form in which they were received, and have been commingled with the agent's own money. While they remain in the specific form, the principal may become entitled to their possession upon demand. Unless such is the case, to make the agent liable to hold the specific proceeds for the principal, there must be allegations to show that that was his special obligation. In Walter v. Bennett (16 N. Y. 250), the plaintiff employed the defendant as his agent to sell pork, and the defendant did, as such agent, sell the pork, and receive the proceeds in a draft. He had this discounted, and the proceeds placed to his own credit. The plaintiff demanded the draft or the proceeds. The defendant refused to pay either. Judge Brown said : " The relation between the parties rested in contract, for agency, under all the authorities, is a contract, expressed or implied. Whatever responsibility attaches to the defendant from his relation of agent, is upon the contract, and the plaintiff cannot change the nature of the defendant's obligation, and convert that into a tort, which the law deems to be a simple breach of an agreement." Judge Johnson said: "The duty of an agent for sale is to account for the proceeds of his principal's property ; but he is not guilty of a conversion, if he does not deliver the specific proceeds to his principal" (Wood v. Henry, 40 N. Y. 124; Conaughty v. Nichols, 42 Id. 83; Prouty v. Swift, 51 Id. 594 ; Greentree v. Rosenstock; 61 Id. 583).
In this case, therefore, the judge, in deciding the motion, did not pass upon issues offered by the complaint and relating to a cause of arrest which a jury would thereafter be called to pass .upon, and he was at liberty, and it was his duty, to examine the affidavits to determine the preponderance of the testimony disclosed by them.
The remaining question is, did the weight of the affidavits show a cause of arrest under the section % It would seem clear on the first impression, that this action was exactly under section 179, for money received by the defendant as a broker, but the-section has been construed to mean, where the obligation on the part of the agent is to return the identical money or its traceable proceeds to the principal, and it does not apply to a case where, by agreement, the agent may use the money, when received, as his own, so far as the legal title to it goes, while he promises to pay the amount on demand,—i. e., where the agreement contemplates the relation of debtor and creditor (McBurney v. Martin, 6 Robt. 502).
Giving a fair construction to the affidavit for plaintiffs, and sifting conclusion and opinion from fact, there is no inconsistency between it and other facts stated in defendant's affidavit which show that the relation of simple debtor and creditor existed when demand was • made. But if there be a conflict, the circumstantial narration of defendant's affidavit, and the inference from the letters set out, produce a conviction that sustains the order made below.
The order is affirmed, with $10 costs and disbursements to be taxed.
Curtis, Ch. J., and Freedman, J., concurred.