Court Opinion

ID: 5461644
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:38:24.494652+00
Date Added: 2024-06-11T08:32:54.785199
License: Public Domain

By the Court, James C. Smith, J.
The main question in this case is whether the defendant is liable for the excess of the amount due on the two notes sold by him, over and above the sum which he received therefor. The referee has deduced such liability as a legal conclusion, from the facts found by him, that the notes referred to were sold by the defendant without authority from the plaintiff’s assignors, and that they were good security for their respective amounts. If the findings are warranted by the evidence, the conclusion is correct.
. The defendant insists that the finding of the referee that the sale of the notes was without authority, is not warranted by the evidence. It appears from the testimony that the notes were executed by the president of the Madison and Indianapolis Eailroad Company, dated the 1st of October, 1850, for $1404.60, each, and were payable at the office of Winslow, Lanier & Co. in the city of Hew York, one in two years, and the other in three years from their date. They were delivered to the defendant in settlement of certain claims against the company, held by *91the defendant and the plaintiff’s assignors, and in the settlement of which the defendant acted in his own behalf and also as the authorized agent of the other claimants. In September, 1861, the defendant sold the - note which was to mature on the first of the next month, to a dealer in railroad securities in the city of Hew York, for $500, and in February, 1862, he sold the other note to the president of the company for $1260. The railroad company deposited funds with Winslow, Lanier & Co. for the payment of the notes, and they were in fact paid at maturity. When the defendant took the notes he was told by the president that they would undoubtedly be paid, and while he held them the notes of the company were esteemed good in Indiana; The defendant; sold them without consulting with, or informing the plaintiff’s assignors, and without making any inquiry of Winslow, Lanier & Co. The defendant was frequently called on by the plaintiff’s assignors to account to them for the notes, but he uniformly denied that he had received any thing on them for which he was liable to account. Under these circumstances, the sale of the- notes by the agent, at a sacrifice, without consulting his principals, was a clear violation of his duty to them, and the referee was fully warranted in finding that the sale was made without authority.
The defendant next argues that by reason of the form of the complaint, he is not liable for the excess of the amount of the notes over and above the sum actually paid to him. The complaint contains allegations which are equivalent in substance to the count for money had and received to the whole amount' of the notes. It is true that, in general, to support the action for money had and received, it is necessary to prove that the defendant actually received money or its equivalent, for the use of the plaintiff. But the rule is not without exceptions. Thus, it is well settled, that where property is received as money, the action will lie, the same as if money itself had been re*92ceived. (7 Cowen, 622.) In the present case, the defendant is liable upon the ground that the notes which he took in satisfaction of the demand of his principals being good and collectable, and he having, by his transactions, released the debtor, and deprived his principals of all remedy except against himself, he is to be treated as having made himself answerable to them for the full amount he ought to have received from the railroad company. In Jackson v. Baker, (6 Cowen, 183, note,) it was held by the United States Circuit Court, in the district of Pennsylvania, that an action for money had and received will lie by a principal against his factor who sells his goods, and for the amount takes a bond to himself, including a debt of his own, and this though nothing is received. On motion for a new trial the ruling was affirmed upon the ground that by the conduct of the defendant in extinguishing the original debt, and destroying all privity between the plaintiff and the person to whom the goods were sold, he must be considered as a receiver of that debt to the use of the plaintiff, as much as if he had released the debt. The reasoning of the court in that case is applicable to the case at bar. The case of Floyd v. Day, (3 Mass. R. 403,) which is cited with approbation in Beardsley v. Root, (11 John. 464,) proceeds upon a similar ground, as appears by the statement contained in the opinion of Van Ness, J. in the contract referred to. To the same effect is the case Denton v. Livingston, (9 John. 96.) That was an action of assumpsit against the sheriff of Columbia county, for the amount of a sale of goods by him under a venditioni ex-ponas. The defendant proved that among the goods sold was a sloop, which, at the time of the sale, was at Poughkeepsie, and the purchaser afterwards refused to pay for her, on the ground that the defendant had not delivered to him the possession of the sloop; and she was afterwards sold on another execution against the same judgment debtor, by the sheriff of Dutchess county, which execution *93issued subsequently to the levy under the execution of the plaintiffs. The judge charged the jury that the plaintiffs were not entitled to recover for the amount at which the sloop sold, as it did not appear that the defendant had ever received the money. A motion for a new trial having been made, the counsel for the defendant, in opposing it, made use of the argument so strenuouly urged here, that the proper remedy was an action on the case sounding in tort, for a breach or neglect of duty, but the court ordered a new trial, holding that the sheriff was answerable in that form of action for the amount the sloop sold for, though he had not received the money. These cases, and many others in the books, fully sustain the position that the defendant is liable for the amount of the notes, in an action for money had and received.
This view of the case disposes of the further objection taken by the defendant that the claim in suit did not pass to the plaintiff under the assignment from Cook, Clark and Carey. The assignment transferred, in terms, all the right, title and interest of the assignors and each of them, to the notes, and the avails thereof, and the moneys received by the defendant upon the selling and arranging of the claims against the railroad company. It consequently passed their right of action against him for money had and received to the full amount of the notes referred to.
It remains to advert briefly to some other positions taken by the defendant’s counsel.
1. The assignment is absolute and valid on its face, and transfers to the plaintiff a perfect legal title. His right to maintain the action is not affected by the fact that nothing was paid for the assignment, (27 Barb. 178; 38 id. 575;) nor by the circumstance that Cook, one of the assignors, agreed to take care of the case and to save the plaintiff from costs if he was unsuccessful. •
2. It does not appear that the defendant and the plain*94tiff’s assignors' were partners. At most, they were but ■ joint owners of the original claims against the railroad company, and there was nothing in that relation to prevent either of them from maintaining an action to recover his share of .the money collected thereon by the defendant.
[Monroe General Term,
September 4, 1865.
Johnson, J. C. Smith and E. D. Smith, Justices.]
3. It is not apparent, as claimed by the defendant, that the referee has made a mistake in respect to the value of the defendant’s services. He has probably adopted the sum stated by the defendant in his letter of the 24th August, 1861, as the measure of the compensation to which he was entitled up to that time. In that letter, the defendant does not claim any thing for disbursements in addition to the sum stated by him, and the referee was warranted in adopting that sum.
The judgment should be affirmed.
Judgment affirmed.