Isham v. Post

• Decision Date: 23 January 1894
• Citation: 141 N.Y. 100,35 N.E. 1084
• Parties: ISHAM v. POST. POST v. ISHAM et al.
• Court: New York Court of Appeals Court of Appeals

141 N.Y. 100

35 N.E. 1084

ISHAM

v.POST.

POST

v.ISHAM et al.

Court of Appeals of New York.

Jan. 23, 1894.

Appeal from supreme court, general term, second department.

Two actions,-one by Henry H. Isham, as trustee, against Augustus T. Post, on whose death the action was revived against Mary E. Post; and the other by Mary E. Post, as administratrix, against Henry H. Isham and others. From a judgment of the general term (23 N. Y. Supp. 1168) affirming a judgment of the special term for plaintiff in Isham v. Post, and a judgment dismissing the complaint in Post v. Isham, Mary E. Post appeals. Reversed.

Agar, Ely & Fulton, (Alfred Ely, of counsel,) for appellant.

Dixon, Williams & Ashley, (Frederic A. Ward and Clarence D. Ashley, of counsel,) for respondents.

FINCH, J.

The relation between the parties to this controversy must be regarded as that of principal and agent. Post was a banker; not a member of the stock exchange, and so bound by its rules, but familiar with its customs and usages, and controlled by them, to some extent, whenever dealing with stocks in the Wall street market. He held himself out to the business world in that character. By his circulars he advertised himself as dealing in ‘choice stocks,’ and promised his customers ‘careful attention’ in all their financial transactions. Those who dealt with him contracted for, and had a right to expect, a degree of care commensurate with the importance and the risks of the business to be done, and a skill and capacity adequate to its performance. That care and skill is such as should characterize a banker operating for others in a financial center, and different in kind from the ordinary diligence and capacity of the ordinary citizen. The banker is employed exactly for that reason. Without it, there might cease to be motives for employing him at all. Isham was the trustee of an express trust, but in this dispute must be regarded simply as an individual, and without reference to his trust character; for the trial court has found as a fact that, in employing the banker to loan for him $25,000, he gave no notice of the trust character attaching to the money, contracted apparently for himself, and left Post to believe, and be justified in believing, that the money was his own. The evidence on the subject admits of some difference of opinion, but on this appeal the finding must control.

In the same way, the question whether Post's services in making the loan were or were not to be gratuitous must be deemed settled. The finding is that those services were to be without compensation; and on that ground the appellant claims that Post was a gratuitous mandatary, and liable only for gross negligence. But while no compensation, as such, was to be paid, it does not follow that the banker was freed from the obligation of such diligence as he had promised to those who dealt with him, or was at liberty to withhold from his agency the exercise of the skill and knowledge which he held himself out to possess. Nothing in general is more unsatisfactory than attempts to define and formulate the different degrees of negligence; but, even where the neglect which charges the mandatary is described as ‘gross,’ it is still true that, if his situation or employment implies ordinary skill or knowledge adequate to the undertaking, he will be responsible for any losses or injuries resulting from the want of the exercise of such skill or knowledge. Story, Bailm. § 182a; Shiells v. Blackburne, 1 H. Bl. 158; Foster v. Bank, 17 Mass. 479;First Nat. Bank v. Ocean Nat. Bank, 60 N. Y. 295. In the latter case, it was said that ordinary care, as well as gross negligence,-the one being in contrast with the other,-must be graded by the nature and value of the property, and the risks to which it is exposed. Post, therefore, was required to exercise the skill and knowledge of a banker engaged in loaning money for himself and for his customers, because of the peculiar character and scope of his agency, because of his promise of careful attention, and because the contract was made in reliance upon his business character and skill.

We should next consider upon whom rested the burden of proof. The plaintiff alleged and proved that he put into Post's hands, as his banker and agent, to be loaned upon demand at the high rates of interest prevailing, and in the mode approved by custom and usage, the sum of $25,000, which sum Post had not returned, but refused to return, upon proper demand, and so had converted the same to his own use. That made out plaintiff's case. Judgment for him must necessarily follow, unless Post, in answer, has established an affirmative defense. That which he pleaded and sought to prove was that the money was lost without his fault, and through an event for which he was altogether blameless. In other words, he was bound to show that he did his duty fully and faithfully, and without negligence or misconduct, so that the resultant loss was not his, but must justly fall upon the plaintiff. Marvin v. Brooks, 94 N. Y. 75;Ouderkirk v. Bank, 119 N. Y. 267, 23 N. E. 875. With that burden resting upon him, we must examine his defense, and the evidence given in its support, and determine whether or not it is our duty to sustain the adverse conclusion, to reverse which he brings this appeal.

The trial court has found that Post was negligent in making the loan upon the security of the certificates of stock taken as collateral, which had been raised by a forgery to indicate a larger number of shares than was the actual truth. Negligence is usually a mixed question of law and fact, and is never purely one of law, unless the facts are wholly undisputed, and admit of no conflicting inferences. Filer v. Railroad Co., 49 N. Y. 47. In the face of the finding referred to, we cannot reverse this judgment, unless it clearly appears that upon no possible view of the facts, and upon no inferences deducible from them, can proof of negligence be found, or unless, in reaching the result, some material error in the admission or exclusion of evidence has affected the judgment rendered. The finding of negligence, by its terms, rests upon three omissions. The admitted cause of the loss was a forgery of the number of shares of the stock given as collateral on the loan, by raising that number in one certificate from 7 shares to 70; in another, from 8 to 80; and in a third, from 3 to 93. The certificates were the genuine and lawful certificates of the company, when issued, signed, and attested by the proper officers, and defective only in the forgery which raised the number of the shares. The loan was made to Mills, Robeson & Smith, who were in good repute and standing at the time, but failed two days later for a very large amount. The trial court asserted Post's liability upon the...