Baker v. New York Nat. Exch. Bank
| Decision Date | 06 October 1885 |
| Citation | 2 N.E. 452,100 N.Y. 31 |
| Parties | BAKER v. NEW YORK NAT. EXCH. BANK. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Thos. Allison, for appellant, New York Nat. Exch. Bank.
E. More, for respondents, Willard Baker and others.
The relation between a commission agent for the sale of goods and his principal is fiduciary. The title to the goods (until sold) remains in the principal; and when sold, the proceeds, whether in the form of money, or notes, or other securities, belong to him, subject to the lien of the commission agent for advances and other charges. The agent holds both the goods and the proceeds upon an implied trust to dispose of the goods according to the directions of the principal, and to account for and pay over to him the proceeds from sales. The relation between the parties in respect to the proceeds of sales is not that of debtor and creditor simply. The money and securities are specifically the property of the principal, and he may follow and reclaim them so long as the identity is not lost, subject to the rights of a bona fide purchaser for value. In case of the bankruptcy of the agent, neither the goods nor their proceeds would pass to his assignees in bankruptcy for general administration, but would be subject to the paramount claim of the principal. Those principles seem to be well established. Chesterfield Manuf'g Co. v. Dehon, 5 Pick. 7;Merrill v. Bank of Norfolk, 19 Pick. 32;Thompson v. Perkins, 3 Mason, 232;Knatchbull v. Hallett, 13 Ch. Div. 696; Duguid v. Edwards, 50 Barb. 290; Story, Ag. § 229.
The relation between the principal and consignees for sale is, however, subject to modification by express agreement, or by agreement implied from the course of business or dealing between them. The parties may so deal that the consignee becomes a mere debtor to the consignor for the proceeds of sales, having the right to appropriate the specific proceeds to his own use. In the present case there is no reason to contend that the bank-account against which the check was drawn did not represent trust moneys belonging to the principals, for whom Wilson & Bro. were agents. The deposits to the credit of this account were made in the name of the firm, with the word ‘agents' added. They were the proceeds of commission sales. Wilson & Bro. became insolvent in October, 1878, and they opened the account in this form for the purpose of protecting their principals, which purpose was known to the bank at the time. The check in question was drawn on...
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