Court Opinion

ID: 3631532
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:10:54.59593+00
Date Added: 2024-06-11T13:59:01.919902
License: Public Domain

Only a question of pleading is involved.
Defendant corporation was not a fiduciary in this transaction. The transfer of the bonds and mortgages to plaintiff was effected by officers common to both corporations. The Bond and Mortgage Guarantee Company participated in the exchange no less than the Title Guarantee and Trust Company. Although defendant received the benefit of the exchange, such tort as may *Page 177 
have been committed was not committed by defendant to any extent greater than by the corporation represented by plaintiff.
The pleadings show plainly that, even if a tort was committed by defendant, plaintiff elected to waive it and to sue for money had and received. This is an action on an implied contract against defendant in its individual capacity and not as trustee. (Andrews v. Artisans' Bank, 26 N.Y. 298, 301; Wood v.Mayor, 73 N.Y. 556, 559; Rothschild v. Mack, 115 N.Y. 1;Vail v. Reynolds, 118 N.Y. 297; Kittredge v. Grannis,244 N.Y. 182, 189.) As such, the debts owing by each corporation are mutual debts within the meaning of section 266 of the Civil Practice Act, as it existed at the date of the pleading, and of section 420, subdivision 1, of the Insurance Law. This rule has recently been applied in New York Title  Mortgage Co. v.Irving Trust Co (268 N.Y. 547, 709). Section 420, subdivision 1, of the Insurance Law is included within article 11, entitled "Rehabilitation, Liquidation, Conservation and Dissolution of Delinquent Insurers," and provides: "In all cases of mutual debts or mutual credits between the insurer and another person, such credits and debts shall be set off and the balance only shall be allowed or paid." It has special reference to the liquidation, rehabilitation and dissolution of insolvent insurers and, if the decision in Bank of United States v. Braveman (259 N.Y. 65), in which no reference is made to any similar provision in the Banking Law (Cons. Laws, ch. 2), is to be deemed applicable to an insolvent insurer, then section 420 of the Insurance Law will entirely fail of its apparent purpose and New York Title Mortgage Co. v. Irving Trust Co. (supra) will be overruled.
LEHMAN, HUBBS and LOUGHRAN, JJ., concur with RIPPEY, J.; O'BRIEN, J., dissents in opinion, in which FINCH, J., concurs; CRANE, Ch. J., taking no part
Orders reversed, etc. (See 274 N.Y. 610.) *Page 178