Guffanti v. Nat'l Sur. Co.

• Decision Date: 23 November 1909
• Citation: 90 N.E. 174,196 N.Y. 452
• Parties: GUFFANTI v. NATIONAL SURETY CO. et al.
• Court: New York Court of Appeals Court of Appeals

196 N.Y. 452

90 N.E. 174

GUFFANTI

v.NATIONAL SURETY CO. et al.

Court of Appeals of New York.

Nov. 23, 1909.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Giovanni Guffanti, suing on behalf of himself and all other creditors of Francesco Zanolini, against the National Surety Company, impleaded with Francesco Zanolini. From an order of the Appellate Division (133 App. Div. 610,118 N. Y. Supp. 207) reversing an interlocutory judgment sustaining a demurrer to the complaint, defendant the National Surety Company appeals, by leave of court, and it certifies questions. Order affirmed, and questions answered.

Leave to appeal was granted by said Appellate Division, and that court certified that in its opinion three questions of law are involved which ought to be reviewed by this court, viz.:

‘(1) Does the plaintiff's complaint upon the face thereof state facts sufficient to constitute a cause of action?

‘(2) Should the demurrer of the defendant National Surety Company be sustained upon the ground that the plaintiff cannot maintain this action as a suit in equity for the purpose of enforcing payment of the amount claimed to be due him?

‘(3) Should the demurrer of the defendant National Surety Company be sustained on the ground that the plaintiff cannot maintain this action as a class action on behalf of himself and all other similarly situated creditors of the defendant Francesco Zanolini.’

The nature of the action and the facts, so far as material, are stated in the opinion.C. Walter Artz, for appellant.

James J. Corn, for respondent.

CHASE, J.

One Zanolini was engaged in the city of New York in selling steamship tickets for transportation to and from foreign countries, and in conjunction with said business he carried on the business of receiving deposits of money for the purpose of transmitting the same, or the equivalent thereof, to foreign countries. He gave a bond to the people of the state of New York in the penal sum of $15,000 conditioned for the faithful holding and transmission of any and all moneys, or the equivalent thereof, which should be delivered to him for transmission to a foreign country or countries, pursuant to chapter 185, p. 263, Laws 1907, and for the due accounting for and prompt payment by him of all such moneys, or the equivalent thereof, received by him as aforesaid. Said bond was signed by the defendant as surety, and it was thereafter approved by the comptroller of the state of New York, and filed in his office. Thereafter, and on August 4, 1908, Zanolini received from the plaintiff $600 for the sole and express purpose of transmitting the same to a person named in Italy. Instead of transmitting the same, he converted such money to his own use. Between July 1, 1908, and October 1, 1908, more than 150 persons deposited money with said Zanolini for transmission to Italy. The moneys so paid to Zanolini by said 150 and more persons amounted to upwards of $15,000, and each of the amounts so paid to him were by said Zanolini converted to his own use, and he has not paid or accounted therefor, or for any part thereof. On December 10, 1908, and prior to the commencement of this action, he was adjudicated a bankrupt. Prior thereto he had absconded, and his whereabouts then became, and ever since have been, unknown, and cannot now be ascertained. Said act of 1907 is constitutional; but, if we assume that it is unconstitutional, the defendants cannot assert its unconstitutionalityas a defense to this action. See opinion of this court handed down herewith in Musco v. United Surety Company, 90 N. E. 171. This action is brought by the plaintiff in behalf of himself and all others similarly interested to prove their rights to participate in the proceeds of said bond, and of any recovery thereon, and to compel the defendant to pay said sum of $15,000 with interest thereon ratably and pro rata to the plaintiff, and to such other persons as may become parties to the action, and exhibit and prove their claims and demands herein. The defendant surety company disputes the right of the plaintiff to bring this action in equity.

The said act of 1907 was intended to prevent fraud upon ignorant, dependent, and unsuspecting foreigners. The business of bankers is supervised by state or federal authority. Trans-Atlantic steamship companies have well-known places of business, and a business reputation and standing to maintain that is of itself some guaranty of honest dealing. The act in requiring a bond as therein provided aids, to some extent, in obtaining supervision over the corporations, firms, and persons receiving deposits of money for the purpose of transmitting the same, by reason of the self-interest arising from the responsibility of the sureties on such bonds. The act was not only intended to prevent frauds upon ignorant foreigners, who are naturally attracted to persons selling steamship tickets as a depositary of their money for transmission to foreign countries, but to provide a guaranty fund to make good any losses arising from the failure of such persons...