Simpson v. Compagnie National Air France

GOLDENHERSH, J.,

dissenting.

I respectfully dissent from the majority opinion and would reverse the judgment.

The record discloses that Larkin was a dual agent, employed by, and acting for, both of the parties.

There is no question that the I.A.T.A. agreement conferred upon Larkin the authority to collect funds and issue tickets in defendant’s behalf. It is equally clear that it was, at the same time, acting as plaintiff’s agent, for the purpose of procuring hotel and travel accommodations. Larkin’s relationship with both parties was one which is usual and customary in the business in which it was engaged, and only the conversion of the funds distinguishes the transaction from countless others. The precise issue for determination here is the point at which the funds ceased to be the property of plaintiff, and ownership passed to defendant.

The question is somewhat similar to that discussed in the caveat to section 313, Restatement of Agency 2d, and in an article which appears at 64 Harvard Law Review 431, entitled “Embezzlement by Agent of Two Principals: Contribution?” It is also analogous to the situation presented in Bloxom v. Deitchler, 175 Wash 431, 27 P2d 720, in which the court held that an innocent party who entrusts money to the agent of himself and another, with instructions to pay the funds to the other principal, must stand the loss caused by agent’s larcency of the money, unless it had been paid to, and stolen from the other principal.

As stated in the majority opinion, the I.A.T.A. agreement provides that monies collected by the agent for transportation sold are the property of the carrier and are to be so retained by the agent until satisfactory accounting is made therefor. The agreement further provides that the agent is to account for and remit to the carrier monies due it for transportation sold not less than once each month. Monies are deemed to be due the carrier when a ticket is issued, and it is this act of issuing the ticket that transfers ownership of the funds from the client of the travel agent to the carrier.

In my opinion, at the time of the Larkin defalcation, no action had been taken which could effect transfer of ownership of the funds from plaintiff to defendant; the money, when stolen, was plaintiff’s property, and he, and not defendant, must bear the loss.