Weissman v. De Bruxelles
| Decision Date | 18 November 1930 |
| Citation | 254 N.Y. 488,173 N.E. 835 |
| Parties | WEISSMAN et al. v. BANQUE DE BRUXELLES. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Action by Irwin Weissman and another against the Banque De Bruxelles, a foreign corporation. From a judgment of the Appellate Division (229 App. Div. 713, 241 N. Y. S. 826), affirming a judgment of the Trial Term on the verdict of the court, a jury being waived, in favor of defendant, plaintiffs appeal.
Reversed, and judgment directed for plaintiffs.
See, also, 221 App. Div. 595, 224 N. Y. S. 555.
Appeal from Supreme Court, Appellate Division, First department.
Sidney S. Bobbe, of New York City, for appellants.
W. Rice Brewster, of New York City, for respondent.
The defendant bank is a foreign corporation located and doing business in Belgium. Plaintiffs are the assignees of the receiver of a New York corporation known as Jose Bensaude, Jr., Inc.
On May 14, 1923, a check was drawn on the Treasury of the United States for $9,278.40 for refund of income tax unlawfully collected, payable to the order of the Bensaude corporation and mailed by the Treasury Department in Washington, D. C., to such corporation in New York. The check was indorsed in the corporate name by the president of the corporation, Jose Bensaude, Jr., and afterwards indorsed, ‘Pay to the order of Banque de Bruxelles, Lisbon, June 1, 1923, Jose Bensaude, Jr.’ It was mailed to the Brussels bank and received by it for collection and credit to the personal account of Jose Bensaude, Jr. The bank indorsed it ‘Pay to the order of the National Metropolitan Bank of Washington,’ forwarded it for collection, collected it in Washington through its correspondent bank, received the proceeds, and credited the account of Jose Bensaude, Jr., therewith less collection charges. Bensaude afterwards withdrew the amount from the bank for his own use.
Under the decision in Wagner Trading Co. v. Battery Park Nat. Bank, 228 N. Y. 37, 126 N. E. 347, 9 A. L. R. 340, a New York bank is liable for the amount of checks of a corporation, indorsed by the president thereof and deposited in such bank for his personal use unless such act is authorized or the corporation is negligent or has otherwise deprived itself of its right to recover against the bank. By the laws of Belgium, as pleaded and proved, no liability or duty of inquiry is imposed on a bank receiving such checks for collection and credit to the personal account of the corporate official.
The question is as to the law governing the transaction. Is it governed by the law of Belgium or does the common law as enunciated in the Wagner Case apply? Not much that is decisive on the point may be found on the subject in reported cases, although it has been a fruitful subject of discussion and speculation by nonjudicial authorities, who, like courts, are found not always to be in accord. Wharton disputes Story, who approved for its simplicity and convenience a rule that all transfers of personal property inter vivos are governed by the rule of the owner's domicile, and it is asserted that in modern business the law of the domicile of parties ‘would be the last thing that people would naturally consider in connection with their business.’ Goodrich on Conflict of Laws, pp. 346, 347.
Unquestionably the modern tendency favors a rule that the law of the situs of the property governs the creation and transfer of interests in tangible chattels, although we find Folger, C. J., saying quite needlessly in Edgerly v. Bush, 81 N. Y. 199, 203: ‘The law of the domicile of the owner of personal property, as a general rule, determines the validity of every transfer made of it by him.’ A transfer of an interest in such property, effective by the law of the situs of the property at the time, is valid even though by the law of the state of domicile no title would have been acquired. Guillander v. Howell, 35 N. Y. 657. To the general rule a variant is sometimes stated to the effect that, when property is brought into a state without the consent of the owner, such state does not have general jurisdiction to control the title to the property. The distinction rests upon an enlarged policy to protect the rightful owner from one who carries the owner's property into a jurisdiction where he can give good title under its laws.
In the leading case of Edgerly v. Bush, supra, the court holds that the title of an owner of chattels in New York is not divested by ‘the surreptitious removal of the thing into another State,’ and the sale of it there under different laws. Other grounds for the decision may be eliminated. In the American Law Institute, Conflict of Laws Restatement No. 2, § 52, the rule is stated as follows:
‘(1) If a chattel belonging to a person who is not a national of or domiciled in a state is brought into the state without his consent, the jurisdiction of the state over the chattel is limited to the enforcement of
‘(a) rights growing out of acts done in the preservation of the property;
‘(b) rights essential to the exercise of the state's police powers;
‘(c) rights dependent upon the exercise of the power of eminent domain.
‘(3) If by the law of the state from which the chattel is taken title would pass as the result of a transaction in another state, the title will pass though the chattel has been taken into the other state without the consent of the owner.’
Prof. Beale in his article, ‘Jurisdiction over Title of Absent Owner...
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