Castle v. Corn Exch. Bank

• Decision Date: 19 December 1895
• Citation: 148 N.Y. 122,42 N.E. 518
• Parties: CASTLE v. CORN EXCH. BANK.
• Court: New York Court of Appeals Court of Appeals

148 N.Y. 122

42 N.E. 518

CASTLE

v.CORN EXCH. BANK.

Court of Appeals of New York.

Dec. 19, 1895.

Appeal from supreme court, general term, First department.

Action by Robert D. Castle against the Corn Exchange Bank for the conversion of a draft. A judgment for defendant was affirmed by the general term (26 N. Y. Supp. 1035), and plaintiff appeals. Affirmed.

This action was brought to recover damages for the conversion of a draft, which came into the possession of the defendant under the following circumstances: In July, 1884, Mary C. Melson drew a check on the Farmers' National Bank, of Lancaster, Pa., to the order of John J. Cameron of Indianapolis, for $1,871.84. The check was sent to the payee, who indorsed the same in blank, and delivered it for collection to the firm of A. & J. C. S. Harrison, bankers at Indianapolis, Ind. The Harrisons indorsed the check for collection, and sent the same to the defendant's cashier, with a letter stating that they inclosed it for credit. On receipt of this check the defendant sent it to the Farmers' National Bank, indorsed, ‘For collection.’ Whereupon that bank drew the draft in question, sent it to the defendant in payment of the check, and canceled the check. On the day following Cameron, the payee named in the check, telegraphed to Mrs. Melson that Harrisons' Bank had suspended, and to stop the collection of the check. Thereupon Mrs. Melson telegraphed to the defendant to hold the money on the draft of the Farmers' Bank, and that Harrisons' Bank had suspended. To this telegram the defendant replied by telegraph as follows: ‘This bank is the owner of draft paid by Farmers' National Bank of Lancaster.’ Then, at Mrs. Melson's request, the Farmers' Bank telegraphed to the defendant as follows: ‘Can you hold our draft on 1st N. Y. sent yesterday? The drawer and indorser would like to have the money held for their account.’ The defendant telegraphed in reply: ‘Cannot. Draft which it paid for was our property.’ Thereupon the Farmers' Bank telegraphed to the First National Bank of New York, upon which its draft had been drawn, to refuse payment thereof. The request was complied with. In a suit subsequently commenced by this defendant against the Farmers' Bank, to collect the draft, an attachment issued and was levied upon the funds of the Farmers' Bank with the First National Bank, and, eventually, the plaintiff in that action was held to be entitled to recover. The final decision in that suit was rendered by the Second division of this court, and is reported in 118 N. Y. 443, 23 N. E. 923. The sheriff, who had collected the moneys from the First National Bank under the attachment in the action, converted the money to his own use, and absconded. Thereafter, Cameron assigned to this plaintiff all his rights and causes of action against the defendant, and the present suit was instituted. The trial court directed a verdict for the defendant. On appeal from the judgment entered thereupon, the same was affirmed at general term. The plaintiff now appeals to this court from the judgment of affirmance at the general term.

Jefferson Clark, for appellant.

John M. Bowers, for respondent.

GRAY, J. (after stating the facts).

I think that the determination by the general term was correct. It proceeded upon the theory that the facts established by the evidence were insufficient to justify an inference that the defendant was placed in the wrong, because of its failure to show that there had been any demand on the part of Cameron. The defendant had come lawfully into possession of the draft in question, and a demand by Cameron, if he was entitled to the draft, or to its proceeds, and a refusal after such demand by the defendant, were essential in order to make out a case of conversion. In Add. Torts, p. 312, the rule is stated as follows: ‘When the chattels of the plaintiff have not been wrongfully taken possession of by the defendant, but have come into his hands in a lawful manner, he cannot be made responsible for a conversion of them until they have been demanded of him by the owner, or the person entitled to the possession of them, and he has refused to deliver them up.’ In Goodwin v. Wertheimer, 99 N. Y. 149, 1 N. E. 404, where the defendant had come into possession of the goods in question, as assignee under a general assignment for the benefit of creditors, and had refused to deliver them up upon the request of the attorney for the vendors of the goods, claiming that they had been obtained by the defendant's assignors by fraud, this court held there was no sufficient proof of a demand, and that, ‘the original possession of Wertheimer being...