Court Opinion

ID: 7061216
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:21:05.469004+00
Date Added: 2024-06-11T16:12:10.950665
License: Public Domain

Dissenting Opinion.
. Ross, J.
Under the facts set out in the majority opinion, the appellant, as president of the Sandford Fork and Tool Company, indorsed the acceptance and had it discounted, the proceeds being received and used by the company. How, under these facts, appellant can be held personally liable for conversion I confess I am unable to comprehend.
The acceptance was sent by the appellees to the Sand-ford Fork and Tool Company to be used by it in raising money with which to pay an outstanding obligation; it was received by the company, negotiated by it, and the proceeds received and used by it. True, being a'corporation, and having no physical existence, it could act *663only by and through its officers and agents; and the appellant being its president, physically did for it what it could only do by and through its officers and agents. The appellant, Willard Kidder, as an individual had nothing to do with this transaction any more than if no such person existed. What was done was done, not by Willard Kidder, but by the Sanford Fork and Tool Company.
The first paragraph of the complaint proceeds upon the theory and seeks to recover for a conversion. In such an action the plaintiff must allege that he is the ovhier of the property or entitled to its possession at the time of its conversion, and that the defendant converted it to his own use or the use of another. Swope v. Paul, 4 Ind. App. 463; Hunter v. Cronkhite, 9 Ind. App. 470; Day v. Watts, 92 Ind. 442; Kehr v. Hall, 117 Ind. 405.
‘ ‘ Conversion consists as a tort, either in the appropriation of the personal property of another to the party’s own use and benefit, or in its destruction, or in exercising dominion over it, in exclusion and defiance of the rights of the owner or lawful possessor, or in withholding it from his possession under a claim and title inconsistent with the owner’s.” 4 Am. and Eng. Encyc. of Law, page 108, and cases cited.
The facts alleged in the first paragraph of the complaint show that the appellees at the request of the Sandford Fork and Tool Company sent to it their acceptance for §1,935.20, which said company agreed to have discounted, and with the proceeds pay a note then due, which had previously been executed by the company to the appellees, and by them discounted and endorsed. That the Sandford Fork and Tool Company received the acceptance, and after it was endorsed by the appellant, as president of the company, it was discounted *664iii bank and the proceeds applied to the payment of the company’s employes instead of to the payment of the obligation previously given by the company to appellees. That when the appellees sent the acceptance to the company they requested that the company send them its note for the amount of the acceptance.
It is evident from these facts, that the Sandford Pork and Tool Company came rightfully into the possession of the acceptance, with power to convert it into money. That while the appellees expected the company to use the money realized on the acceptance in paying off the obligation previously executed by it to them, they at the saíne time expected the company to give them its note for the amount of the acceptance.
As .heretofore stated, in order that a right of recovery exists in favor of the appellees, it was necessary for them to allege and prove that at the time of the conversion they had a general or special property in the thing converted, and had or were entitled to possession thereof.
The first paragraph does not, as I view it, seek to charge appellant with the conversion of the acceptance, for the facts alleged not only show that they did not have possession of it, but affirmatively and conclusively show that they were not entitled to its possession; but it proceeds upon the theory that appellant misapplied the proceeds received from discounting the acceptance, in which proceeds they claimed a special property for the reason that such proceeds were to be applied in a manner beneficial to appellees. Upon that theory, therefore, will I consider this paragraph.
If it be conceded that the appellees had a .special property-interest in the money received by the Sandford Fork and Topi Company in discounting the acceptance, were they entitled to the possession of it‘or was such right of possession in the Sandford Fork and Tool Com*665pany ? I think there is hut one answer to the question, namely: that the Sandford Fork and Tool Company had possession, and was entitled to the exclusive possession of it.
Again, the obligation to be paid was primarily the obligation of the Sandford Fork and Tool Company, and secondarily the obligation of the appellees, and-the acceptance primarily the obligation of appellees and secondarily the obligation of the Sandford Fork and Tool Company; by the negotiation of the latter money was raised to liquidate the former, and the Sandford Fork and Tool Company was empowered to act for both parties in the transaction. Without any agreement between the parties, the money received in discounting the acceptance was as much the property of the Sandford Fork and Tool Company as it was the property of the appellees. Quaere: Can one of two joint owners of property, he being rightfully entitled to and in possession thereof, be guilty of conversion, if he fail to use the same in a manner directed by his joint owner, who is not in possession and has no right to the possession thereof?
Where the plaintiff, seeking to recover for a conversion, neither owned nor was entitled to the possession of the property alleged to have been converted, this court held that a recovery could not be had. Hunter v. Cronkhite, supra.
The majority opinion in this case proceeds upon the assumption, if I gather its meaning correctly, that the acceptance and the proceeds therefrom were the property of the appellees, and that the Sandford Fork and Tool Company was their special agent for a special purpose, and that if it misapplied the funds received on the acceptance, it was liable for conversion, and that the appellant, being the agent of the Sandford Fork and Tool *666Company, who acted for it in misapplying the money, was also guilty of conversion.
The law seems to be well settled that where one acts for another in doing the things which constitute a conversion by the principal, the agent is also guilty of conversion, and may be made to answer therefor to the rightful owner the same as his principal. Shearer v. Evans, 89 Ind. 400; Alexander v. Swackhamer, 105 Ind. 81; Moore v. Shields, 121 Ind. 267.
In this case the Sandford Pork and Tool Company not only had possession of the acceptance rightfully, but the proceeds from it were rightfully in the company’s possession. If the money was misapplied, such misapplication was not a conversion, but rather a fraud. The money received by discounting the acceptance was not the property of the appellees; neither had they any right to its possession nor control over it. The acceptance was not sent to the Sandford Pork and Tool Company to be negotiated by it and the proceeds to be placed to appellees’ credit, or to be used for their benefit, other than that they would be released as endorsers by the payment of the company’s obligation which they had endorsed.
“If a party, authorized by the holder of a bill of exchange to get it discounted, and to apply the proceeds in a particular way, does get it discounted, but misapplies any part of the proceeds, he cannot be sued in trover for the bill, but must be sued for money had and received. ” Palmer v. Jarmain, 2 M. and W. *282.
‘‘ Where the money was delivered to the defendant for a particular purpose, to which he refused to apply it, he cannot apply it to any other, but it may be recovered back by the depositor, under the count for money had and received.” 2 Greenl. Ev., section 119.
In Conaughty v. Nichols, 42 N. Y. 83, “the plaintiff *667alleged in Ms complaint, and proved upon the trial, among other facts, that during the months of December, 1860, and January, 1861, the plaintiffs, who resided in Saratoga county, consigned to the defendants, who were commission merchants, doing business in the city of New York, a quantity of dried fruit and butter, to be sold by the defendants, and the net proceeds to be remitted to the plaintiff; that the defendants'received and sold the said fruit and butter,” and the proceeds, after the payment of their expenses, they omitted and refused to pay to the plaintiff. The complaint contains the following allegation : “And have converted the same to their oivn use to the damage of plaintiff, ” etc.
Upon these facts the court held that the action was one ex contractu, and not ex delicto. That the words : “And have converted the same to their own use” in the complaint were mere surplusage, and that the action was not for a conversion, but for money had and received.
“A complaint which alleges a joint agreement by the defendants to deliver up specified securities, demand therefor, and that the defendants wrongfully refused to deliver them, and have wrongfully disposed of and converted them to their own use, to the great damage of the plaintiff, and praying judgment for the value of the securities, with interest, as the damages sustained by the plaintiff by means of the premises, states a cause of action on contract, and not ex delicto.
“The allegation of a wrongful refusal by the defendants to deliver the securities and a wrongful disposition and conversion thereof by them to their own use, must be construed as an averment of a breach of the agreement, and not as the gist of the action.” Austin, Rec., v. Rawdon, 44 N. Y. 63.
In Ferguson v. Dunn’s Admr., 28 Ind. 58, the court *668after giving the facts which were that: ‘ ‘ Dunn, in his lifetime, remitted to Mrs. Furgeson a sum of money, with directions to loan it. The latter failed to loan the money, but used it herself,” says: “The money was sent to Mrs. Furgeson by Dunn for a particular purpose to which she refused to apply it, and converted it to her own use. The action for money had and received lies in such a case.”
From these authorities it appears that even though the money received on the acceptance was the property of the appellees and was in the possession of the Sandford Fork and Tool Company, as their agent to be used for a particular purpose, its misapplication would not entitle appellees to recover for a conversion which sounds in tort, but their only remedy would be to seek a recovery for money had and received. If there are any authorities to sustain a different doctrine I have not been able to find them.
I think the facts alleged in this paragraph of the complaint show that the acceptance sent by the appellees to Sandford Fork and Tool Company was nothing more nor less than a loan, for accompanying the acceptance was a letter in which appellees said: “Please find enclosed acceptance for $1,933.20 per your request of 30th. Kindly send us your note for like amount and date.”
This request of the appellees that the Sandford Fork and Tool Company give them its note for the acceptance, shows not only the intention of appellees to assist the company by loaning it their credit, but stamps the transaction as a loan made, which was to be repaid in the future to appellees by the Sandford Fork and Tool Company.
These are the facts shown by the evidence. I am of the opinion, therefore, that the first paragraph of the complaint does not state a cause of action for conversion, *669and that under the facts proven there could he no recovery against appellant upon any theory.
Filed November 26, 1895.
Eor these reasons I think the judgment should be reversed.