Farming Corporation v. Bridgeport Bank

• Decision Date: 18 March 1925
• Docket Number: 23039
• Citation: 202 N.W. 911,113 Neb. 323
• Parties: FARMING CORPORATION ET AL., APPELLANTS, v. BRIDGEPORT BANK, APPELLEE
• Court: Nebraska Supreme Court

202 N.W. 911

113 Neb. 323

FARMING CORPORATION ET AL., APPELLANTS, v. BRIDGEPORT BANK, APPELLEE

No. 23039

Supreme Court of Nebraska

March 18, 1925

APPEAL from the district court for Morrill county: RALPH W. HOBART JUDGE. Affirmed.

AFFIRMED.

Ritchie Canaday & Swenson, for appellants.

Williams Hurd & Neighbors, contra.

Heard before MORRISSEY, C. J., ROSE, GOOD and EVANS, JJ., REDICK and SHEPHERD, District Judges.

OPINION

SHEPHERD, District Judge.

This is a case in which the plaintiffs sue the defendant for the conversion of $ 1,500 in cash and a $ 2,750 mortgage deposited by them in escrow with it, alleging that, because of the failure of the Bridgeport Irrigation District to extend and improve its ditches according to a contract with plaintiffs (which contract was deposited in escrow with the money and mortgage), said money and mortgage should have been returned to them, but was not, although they made due demand for the same.

The defendant, which is a bank, filed an affidavit of interpleader, in which it says that the Bridgeport Irrigation District, without collusion with the defendant or any of its officers, makes claim to the subject-matter of the action, and has notified the defendant that it expects to hold it liable if the property is delivered to the plaintiffs; that defendant has no claim to said property in its own right and is ready to dispose of it as the court may direct; that the claim of plaintiffs is based upon contract and is for the recovery of personal property; and that defendant prays an order of court requiring said Bridgeport Irrigation District to appear and maintain or relinquish its claim against the defendant.

To this affidavit of interpleader the plaintiffs file an answer, denying that their claim is for the recovery of personal property, denying that the Bridgeport Irrigation District makes claim as stated in the affidavit, denying all other allegations of said affidavit, and alleging that the action is one for conversion, and based upon a tort by the defendant.

The question was determined upon the pleadings, and the district court entered an order of interpleader, requiring defendant to deliver said property to the clerk, requiring the Bridgeport Irrigation District to appear within 30 days and maintain or relinquish its claim against the defendant, ordering that, in case said Bridgeport Irrigation District fails to appear, it shall be barred to claim said property, and providing that, in case it does appear, it shall be substituted for the defendant. Exception was duly taken, and the case appealed to this court.

We are convinced that the order made by the district court was proper, and that its judgment in that behalf should be affirmed.

It seems plain that when an escrow contract has been made, and the property deposited, the depositary becomes the agent of both parties and becomes subject to relations of trust to each of them. This being the case, if a dispute arises between the principals over the delivery of the property, both of them claiming the same and notifying the depositary, the refusal of said depositary to deliver to the one or the other until their controversy has been determined cannot be said to be a conversion of the property. This appears from cases cited by both plaintiffs and the defendant. "A bona fide reasonable detention of goods by one who has assumed some duty respecting them, for the purpose of ascertaining their true ownership, or of determining the right of demandant to receive them, will not sustain an action for conversion." 38 Cyc. 2029. See Sliscovich v. Scandinavian-American Bank, 88 Wash. 674, 153 P. 1077; Cummins v. People's Building, Loan & Savings Ass'n, 61 Neb. 728, 86 N.W. 474. The Sliscovich case was upon facts of close similarity to those of the case at bar.

This might not be a complete answer to the plaintiffs' contentions in this case. But in the case of Shellenberg v. Fremont, E. & M. V. R. Co., 45 Neb. 487, 63 N.W. 859, which was a case to recover for the conversion of certain personal property, the court said:

"There is no doubt that the assertion of conflicting claims has been the occasion of frequent embarrassment to bailees particularly common carriers, who are bound to receive goods offered for...