First Nat. Bank of Park Ridge, N. J. v. Broder

• Decision Date: 04 May 1928
• Court: Connecticut Supreme Court
• Parties: FIRST NAT. BANK OF PARK RIDGE, N. J., v. BRODER.

141 A. 861

107 Conn. 574

FIRST NAT. BANK OF PARK RIDGE, N. J., v. BRODER.

Supreme Court of Errors of Connecticut.

May 4, 1928

Appeal from Superior Court, Hartford County; L. P. Waldo Marvin Judge.

Action by the First National Bank of Park Ridge, N. J., against Edward W. Broder to recover damages for conversion of a promissory note alleged to be the property of the plaintiff. The court directed verdict for plaintiff for $1 damages, and from the judgment entered thereon both parties appeal. Error on plaintiff's appeal, and a new trial ordered limited to the assessment of damages; no error on defendant's appeal.

John Drewen, of Jersey City, N. J., and Edward H. Kelly, of Hartford, for plaintiff.

John C. Blackall, of Hartford, for defendant.

Argued before WHEELER, C.J., and MALTBIE, HAINES, HINMAN, and BANKS JJ.

MALTBIE, J.

This action was brought to recover damages on account of the failure of the defendant to return to the plaintiff a certain note made by one Pratt to one Chamberlin, to which the plaintiff claims title. On the trial, the court directed the jury to bring in a verdict for the plaintiff to recover $1 damages, and both parties have appealed, the defendant claiming that the direction to the jury to find for the plaintiff was erroneous, and the plaintiff claiming that the direction that the verdict be only for nominal damages was erroneous, and also that the court committed error in striking out certain testimony. Most of the facts were not in dispute; such material conflicts of evidence as there were being hereinafter noted. In substance, the case made upon the evidence was this:

the defendant, a practicing attorney in Hartford, in May, 1924 brought an action in behalf of Chamberlin against Pratt on several notes, aggregating in all $25,000. Subsequently Pratt died, and the Hartford-Connecticut Trust Company, as administrator upon his estate, was substituted as defendant. One of these notes, for $5,000, was being held by the plaintiff in New Jersey. The plaintiff had recovered a judgment against Chamberlin in New Jersey, upon some claim not appearing upon the record, and had retained E. H. Kelly a lawyer also practicing in Hartford, to bring an action upon that judgment in Connecticut. In January, 1925, Kelly did bring such an action, causing a foreign attachment to be made upon any indebtedness of the trust company as administrator of the Pratt estate to Chamberlin. the defendant appeared for Chamberlin in this action.

The note was, in December, 1924, in the possession of the plaintiff in New Jersey, being held as collateral for indebtedness of Chamberlin to it. December 8, 1924, Perkins and Drewen, attorneys for the plaintiff in New Jersey, wrote the defendant a letter, in which they referred to a telephone message from his office in Hartford as to the note; said they were inclosing a copy of it, and that the plaintiff was willing to do whatever would assist Chamberlin in realizing the amount due upon it; promised that, if they were advised when it was necessary for the defendant to have the original, it would be produced; and then went on to say that it was the writers' understanding, from conferences with Chamberlin's attorneys in New Jersey, that he would make proper assignment to the plaintiff, " to the end that the bank will receive whatever moneys are realized on this note, the same to be applied, in part, to obligations now had by Mr. Chamberlin to the bank."

Matters then went along until May, 1925, when judgment for the plaintiff to recover $2,672.87 was rendered in the action brought against Chamberlin upon the judgment, and about the same time Chamberlin's suit against the Trust Company as administrator was assigned for trial. Kelly, who had come into possession of the note, thereupon delivered it to an attorney associated with, and acting for, the defendant, for the purpose of its use on the trial of the action of Chamberlin against the trust company, taking a receipt which described the note, stating, " said note now being held by First Nat. Bank Park Ridge, N. J., as collateral for indebtedness of A. B. Chamberlin," and concluded: " Also recd. of E. H. Kelly accompanying notice of protest and collection memo. all to be returned to E. H. K. when said trial is finished."

Chamberlin's action against the trust company as administrator was not tried, but negotiations were begun at the courthouse for a settlement, and later the parties to that action and their attorneys met in the office of the trust company. An agreement was finally reached, by the terms of which $7,500 was to be paid in cash, and certain shares of stock delivered to Chamberlin in return for the surrender of all the Pratt notes, except the one here in suit; as to that, the agreement was that, if the trust company could secure, by suit, if not by voluntary surrender, certain shares of stock held by one Rockwell, it would deliver them to Chamberlin, who would surrender the note, and, if these shares could not be obtained, then the trust company would pay Chamberlin $2,671.81, and certain additional interest, and thereupon the note would be surrendered. The terms of the settlement having been agreed upon, Kelly was called into conference, and was given a check by the representative of the trust company for the amount of the judgment rendered in the action of the plaintiff against Chamberlin. As to the incidents following, there is some conflict of testimony. the defendant testified that, in Kelly's presence, he pushed the notes, other than the one here in suit, across the table to the representative of the trust company; that he pushed the note here in suit over to Chamberlin, saying to Kelly, " This note, now you have this check, belongs to Mr. Chamberlin" ; and that Kelly made no objection to Chamberlin's taking it. That the note in suit was specifically called to his attention at this conference Kelly denies. Chamberlin later that day delivered the note again to the defendant with his copy of the agreement of settlement.

Kelly sent the sum received by him to Perkins and Drewen, except for the amount of the fee retained by him. Within a day or two thereafter he received instructions from them to return the note, as it was held as collateral for other indebtedness of Chamberlin to the plaintiff. This was the first information that Kelly had that there was any indebtedness of Chamberlin to the plaintiff other than that included in the judgment he had secured. Kelly at once demanded the note of the defendant, telling him of the information he had received from Perkins and Drewen as to its being held as collateral for other indebtedness. the defendant replied that he must consult Chamberlin about the matter, but two or three days later wrote Kelly that, in view of the settlement in the office of the trust company and the delivery of the note to Chamberlin at that time, it would be impossible for him to comply with Kelly's request for its return. Thereafter Kelly sought an order of the superior court, in the action of Chamberlin against the trust company, that the defendant deliver the note to him, alleging it to be an exhibit in the case. The court granted the application; but subsequently its order was modified to provide that the note should be returned, if and when the plaintiff established its right to it. No proceedings were thereafter brought by the bank to secure the note itself, but, instead, the present action was begun.

The complaint alleges that the plaintiff was the holder of the note for value; that it was delivered to the defendant under the terms of the receipt given to Kelly to which reference has been made; that the action of Chamberlin against Pratt was settled without trial; and that, though many times requested, the defendant has refused, and still refuses, to return the note and the accompanying papers to the plaintiff or its attorney. While these allegations might justify a claim of damages for breach of contract, all the elements necessary to constitute a conversion of the note are alleged, the distinction between the two causes of action is not of practical moment in this case, and the parties have largely argued it before us upon the basis of a claimed conversion. We shall so treat it. Metropolis Mfg. Co. v. Lynch, 68 Conn. 459, 470, 36 A. 832.

The defendant claims that the plaintiff, by its receipt and retention of the money paid Kelly at the time of the settlement, was estopped to question the right of the defendant to take the note. But the mere possession of the note by the defendant or his principal, Chamberlin, at the time it was delivered, and thereafter when demand for it was made by Kelly, was not necessary under the terms of the settlement. That agreement contemplated an attempt to secure possession of certain stock, with the likelihood of an action at law, before the trust company would be entitled to demand the note, an attempt which obviously would take some time. While the note would have to be forthcoming eventually in order to carry out the agreement, there was no reason why, so far as the defendant and Chamberlin were concerned, in the interval the plaintiff should not retain it. the defendant and his client, Chamberlin, could rely upon the promise of the plaintiff contained in the letter from Perkins and Drewen to have it forthcoming when needed,...