Donovan v. Cornell , 1 How. Pr. (n.s.) 99 ( 1885 )

J. F. Daly, J.

[After stating the facts as above].—The complaint alleged a cause of action upon contract. The allegation of conversion of the proceeds of sale was mere surplusage. On the trial such allegation will be disregarded and plaintiff allowed to recover upon contract (Conaughty v. Nichols, 42 N. Y. 83). Even if the complaint alleged that the defendant received the proceeds in a fiduciary'capacity, no proof of that allegation' would be essential to plaintiff’s recovery ; a ground of arrest, based upon a claim that defendant acted in a fiduciary capacity, is extrinsic to the cause of action. It is not necessary to make such an allegation in the complaint in order to sustain an order of arrest. Where such allegation is contained in the complaint, but no order of arrest has been granted, the defendant would not be subject to execution against the person (Segelken v. Meyer, 94 N. Y. 473).

It follows from these authorities that the cause of action here and the cause of arrest are not identical, and that the jury, upon the trial of this action, will not have to pass upon the questions which are involved in the arrest of defendant. It was the duty of the court to decide -upon the pleadings and affidavits whether the relation between plaintiff and defendant was one of personal trust and confidence in the latter, or that of consignee and commission merchant as alleged in the answer (Fuentes v. Mayorga, 7 Daly 103; and see on this subject Merrill v. Thomas, 7 Daly 395; Clark v. Pinkney, 50 Barb. 226; Duguid v. Edwards, 50 Barb. 288; Sutton v. De Camp, 4 Abb. N. S. 483; Stoll v. King, 8 How. Pr. 298).

The City Court did not examine the question presented by the affidavits in the light of this duty, but referred it to the jury on the trial. This is the express decision of the Special Term; and the General Term, while it does state that “ assuming that the order of arrest was granted on extrinsic facts, we are of opinion that the justice was correct in refusing to vacate,” finally concludes that, for those reasons and “ upon the ground stated in the opinion of the court at Special Term,” the order must be affirmed. This puts the affirmance upon the ground that, in the language of the Special Term opinion, “ the jury will be called upon to weigh and determine, when the cause is tried,” the question of right to arrest, “ which cannot be intelligently decided in the present instance in advance of the trial.” Under the decision in Segelken v. Meyer (above cited), this view appears to be erroneous, and the order should be reversed, to the end that the motion to vacate the order of arrest may be heard upon its merits.

Horace Secor, Jr., for appellant.—As

a matter of strict law, upon the undisputed facts, defendant did not act in a fiduciary capacity. Plaintiff’s own affidavits, as well as those used by defendant, show that defendant paid for the goods each Saturday, and did not account to plaintiff for the identical proceeds of the sales ; and consequently, the relations between the parties were those of mere debtor and creditor (cases cited on this point on previous appeal, ante p. 341). The single fact that defendant was in the habit of giving his post dated checks, alone changed the strict relations of principal and factor into those of mere debtor and creditor (Alliance Ins. Co. v. Cleveland, 14 How. Pr. 408). The case of Moore v. Hillabrand (37 Hun 491), in no way conflicts with the decisions cited, under which, on the undisputed facts, the order of arrest should be vacated.

Van Hoesen, J.

This action is not for the conversion of personal property, and an order of arrest could not be granted under» section 549. The action is for money had and received by a factor, and the only authority for an order of arrest is the third subdivision of section 550. The facts authorizing an arrest should not be set out in the complaint, nor is proof of them within the issues that the jury are to try. A jury could never, therefore, pass upon the question which Chief Justice McAdam said, in his opinion, he would leave to them for decision. The question is not to be decided by a jury, but by a judge at the Special Term, and therefore I concur with Judge J. F. Daly in reversing the order.

Larremobe, J., dissented.

Order reversed.

In accordance with the foregoing decision, the motion to vacate the order of arrest was remitted to the City Court to be heard upon its merits. Upon the hearing at the Special Term of that court, the motion was again denied. From the order denying the motion defendant appealed to the General Term of the City Court, which affirmed the order; and from that decision defendant again appealed to this court.

The order is appealable. There is no dispute as to the facts. Even the Court of Appeals will review an order denying a motion to vacate an order of arrest, in a proper case (Morris v. Talcott, 96 N. Y. 100; Clarke v. Lourie, 82 N. Y. 580). It is not sought to review the exercise of any discretionary power by the City Court, but the appeal is based upon legal rights on the undisputed facts.

Joseph C. Wolff, for respondent.

Appeals from the General Term of the City Court to the Court of Common Pleas are assimilated in practice to that governing appeals to the Court of Appeals (McEteere v. Little, 7 Abb. N. C. 374). The granting or refusing an order of arrest is discretionary with the court, and the exercise of that discretion is not reviewable in this court (Sartwell v. Field, 68 N. Y. 341; Clarke v. Lourie, 82 N. Y. 580; Allen v. Meyer, 73 N. Y. 1). This court will not examine the facts (Liddell v. Paton, 67 N. Y. 393; Allen v. Meyer, 73 N. Y. 1). This court will assume that the Special Term of the City Court, in denying the motion to vacate the order of arrest, and the General Term, in.affirming that order, found the facts in favor of the plaintiff (Liddell v. Paton, 67 N. Y. 393; Allen v. Meyer, 73 N. Y. 1; Townsend v. Nebenzal, 81 N. Y. 644; Douglas v. Haberstro, 82 N. Y. 572).

The justice, upon the papers presented, found that the relations of debtor and creditor did not°exist, and that the papers showed that the defendant had received the proceeds of the sale of the sheep and lambs in a fiduciary capacity, and that it did not appear that the plaintiff knew of or assented to the intermingling of the proceeds of. sale by the defendant, with money of his own to be used in the defendant’s business, so as to imply a credit to the defendant on his financial ability to pay (Duguid v. Edwards, 50 Barb. 301; Moore v. Hillabrand, and cases cited, N. Y. Daily Reg. Dec. 1st, 1885). The right to arrest the factor for not paying over proceeds of property placed in his hands to be sold for his principal, is one of the safeguards the law has provided for the protection of the confiding (cases supra).

Larremore, Ch. J.

When this case was before the General Term of this court before, it was held that the papers used on the application for the order of arrest did not disclose a cause of action for conversion. It was also held that the City Court at Special Term and General Term erred in deciding to allow a jury to pass upon the question whether a fiduciary relation or one of mere debtor and creditor existed between the parties, and such question was remitted to the City Court to be decided by a judge thereof at Special Term.

The Special Term of the City Court, after hearing the application upon its merits, has again refused to vacate the order of arrest; its order was affirmed by the General Term of that tribunal, and from such order of affirmance this appeal is taken.

The question how far we are bound by the allegation of the complaint as to the theory of the action, having been determined on the former appeal, and it having been then decided that a cause of action for conversion is not therein set forth, and that the cause for arrest, if any, is extrinsic to and not identical with the cause of action, it seems clear that this order must be reversed.

Defendant alleges a general custom of the trade of which the plaintiff was aware and in which he had acquiesced in all dealings betweén the parties for many years. The factor mingled the proceeds of sales, whenever made, indiscriminately with his own funds, and paid, by his check, on Saturday, for a)! merchandise delivered during the- week, whether the same was then sold or unsold. Plaintiff does not deny the existence of the usage, or that his dealings had been, in accordance with it. Indeed he expressly admits some of the more important facts averred. The relation of the parties was not, therefore, a fiduciary one within the meaning of subdivision 3 of section 550; but an ordinary one of debtor and creditor (Wallace v. Castle, 14 Hun 106; Duguid v. Edwards, 50 Barb. 300; Grover & Baker S. M. Co. v. Clinton, 5 Biss. 324; Alliance Ins. Co. v. Cleveland, 14 How. Pr. 408).

According to the facts alleged in defendant’s answer and affidavit, and which are not denied, we think the present case comes within the principle laid down by the Court of Appeals in Morris v. Talcott (96 N. Y. 100); and that the order appealed from should be reversed, with costs.

J. F. Daly and Van Hoesen, JJ., concurred.

Order reversed, with costs.