Converse v. Sickles

• Decision Date: 21 May 1895
• Citation: 40 N.E. 777,146 N.Y. 200
• Parties: CONVERSE et al. v. SICKLES, Sheriff.
• Court: New York Court of Appeals Court of Appeals

146 N.Y. 200

40 N.E. 777

CONVERSE et al.

v.SICKLES, Sheriff.

Court of Appeals of New York.

May 21, 1895.

Appeal from supreme court, general term, First department.

Action by Edmund W. Converse and others against Daniel E. Sickles, sheriff of the city and county of New York. From a judgment of the general term (26 N. Y. Supp. 590) affirming a judgment dismissing the complaint, plaintiffs appeal. Reversed.

Frederic R. Kellogg, for appellants.

Alexander Blumenstiel, for respondent.

HAIGHT, J.

This action was brought to charge the defendant, as a trustee for the benefit of the plaintiffs, with the sum of $5,312.99, as the proceeds of certain merchandise alleged to have belonged to the plaintiffs, but wrongfully detained by the defendant. The plaintiffs claimed that they were induced by fraud and deceit to sell and deliver the goods in question to the firm of Fechheimer, Rau & Co., and that shortly thereafter the same were seized by the defendant, who claims to have levied thereon by virtue of executions issued to him by judgment creditors of the firm; that the plaintiffs, immediately after the discovery of the fraud practiced upon them, disaffirmed the contract of sale, and replevied the goods from the sheriff, which they subsequently disposed of. Two actions in replevin were commenced. A portion of the goods were taken in one action, and the remainder in the other. When one of the actions was brought to trial, the plaintiffs' counsel, in his opening, stated ‘that he was unable to show that, prior to the commencement of the action, a demand was made upon the sheriff for a return of the goods, and that the same was refused, and conceded that the goods had been taken by the plaintiffs, and disposed of.’ The court thereupon, on motion of the defendant, directed a verdict for the sheriff for the return of the goods, and assessed the value at an amount agreed upon. Similar direction was made in each action, varying only in amounts. No evidence was taken upon the trial of either action; the verdicts being directed solely upon the plaintiffs' opening in each case. A stay of execution upon these judgments was ordered until July 12, 1892, at which time the plaintiffs, being advised that it was hopeless to prosecute an appeal, paid the amounts to the sheriff, as they claimed, under duress of judgment, at the same time demanding from the sheriff, in writing, the return of the money as the proceeds of the goods which they claimed had been procured from them by fraud and deceit of Fechheimer, Ran & Co. The sheriff having refused to return the money, this action was brought. Upon the trial the court found as a conclusion of law that the judgments in the two replevin actions are binding adjudications against the right of the plaintiffs to maintain this action, and constitute effectual bars to the same, and that the money paid over to the defendant in satisfaction of those judgments was not, therefore, impressed with any trust in favor of the plaintiffs.

If this case is to be treated as an action to recover back the amount paid in satisfaction of the two judgments entered in the replevin actions, it cannot be maintained, for reasons well stated in the opinion delivered by the general term. But such we do not understand to be the character of the action. In the demand made upon the defendant for the money paid over it was stated that it represented the proceeds and value of the goods which were obtained from the plaintiffs by Fechheimer, Rau & Co. by fraud and deceit, and to which neither Fechheimer, Rau & Co. nor the sheriff, nor the parties he represents, had any right or color of right. In the complaint this fund was alleged to be the proceeds of the goods which had been procured from the plaintiffs by Fechheimer, Rau & Co. by fraud and deceit, and with intent on the part of Fechheimer, Rau & Co. not to pay therefor; that the same had been demanded from the defendant, and the notice before mentioned served upon him. The complaint then proceeds: ‘That the said defendant still holds and retains the said sum; that said demand has been wholly refused, and no part of said sum has been paid to said plaintiffs; and that by reason of the foregoing facts the above-named defendant holds the said sum as trustee for these plaintiffs, and the plaintiffs are entitled to compel the said trustee to account to said plaintiffs for the full value and proceeds of the said goods, together with interest thereon as aforesaid, which said value, with interest thereon up to July 12, 1892, amounts to the sum of $5,312.99, and that the said defendant be compelled to pay over the whole of said sum for which he may be accountable to the said plaintiffs.’ The complaint then concludes with the following demand for judgment: ‘Wherefore plaintiffs demand judgment against the said defendant that he be compelled to account to the said plaintiffs for the full value of the said goods and proceeds, with interest thereon as aforesaid, and that he be compelled to pay over to the said plaintiffs the full sum with which he may be found accountable, and for such other and further relief as may be just.’ It thus appears to us that this action was brought to recover the proceeds derived from the sale of the goods, which it is alleged were procured from the plaintiffs by Fechheimer, Rau & Co. through fraud and deceit, without intention to pay therefor, which proceeds are now in the hands of the defendant as sheriff. That such proceeds can be followed into the hands of a sheriff, or of an assignee for the benefit of creditors, is now too well settled to admit of question. Refining Co. v. Fancher, 145 N. Y. 552, 40 N. E. 206. It is contended, however, that the judgments in the replevin actions are estoppels, res adjudicata, and a bar to the litigation in this action of the question of fraud and rescission. As we have seen, there was no trial of those issues in those actions. The verdict was directed by the court upon the motion of the defendant,...