193 A.D. 250 | N.Y. App. Div. | 1920
This is an appeal from a judgment entered in the Erie county clerk’s office on the 24th day of' September, 1919, in favor of the defendant dismissing the complaint. The jury was excused by consent and findings of fact were made by the trial court. The action was brought to recover $1,479.25, with interest, being money belonging to the plaintiff which was collected by the defendant while acting as agent for the plaintiff. The plaintiff is an Ohio corporation. The defendant is a New York corporation which was organized to take over the business of the copartnership of Worthington & Sill, insurance agents, of Buffalo, N. Y. The transaction in question occurred between the plaintiff and the copartnership before the formation of the defendant corporation. The plaintiff owned a large fleet of boats on the lakes. Worthington & Sill for years had insured these boats. They were the local agents of some of the insurance companies carrying insurance on the boats and some of the insurance was placed by them as brokers in companies which they did not represent.'
The facts in this case are undisputed and found by the trial court except that it refused to find that said insurance agents were acting in a fiduciary capacity. During the years that said agents had acted for the plaintiff it had been the practice and custom, in case of a loss, for the plaintiff to send the papers, with policies indorsed, to the said agents, who would take the
In 1903 the vessel John Craig stranded, while laden with a cargo of corn, bound from Chicago to Meaford, Ont. The form of the policy upon the John Craig was known as the “ lake hull ” policy. It contained a clause known as the “ sue and labor ” clause, an ordinary clause in a marine policy. After the disaster to the John Craig an effort was made to salve her. These efforts were continued from June 25, 1903, the date of the accident, to June 30, 1903, when the underwriters took charge of the efforts to salve the boat. They continued the efforts for some time thereafter. During that period the plaintiff incurred expenses, which expenses amounted to the sum sued for in this action. '
After the loss all of the papers and policies were turned over to said agents to look after the adjustment in the ordinary course of business. They procured an adjustment of the loss under the policies and turned over the proceeds to the plaintiff, excepting, however, a claim of the plaintiff under the “ sue and labor ” clause. The amount of the claim of the plaintiff under that clause was held in abeyance and not paid over or collected at that time. Some time later the agents collected of the companies the sum claimed in the complaint under the “ sue and labor ” clause. Meanwhile, the plaintiff had gone into the hands of -a receiver and remained in the hands of a receiver for six years when its financial matters were adjusted and the receiver was discharged. Meanwhile the defendant corporation had taken over the affairs of the copartnership of Worthington & Sill. Thereafter, and in 1913, the plaintiff discovered that the said insurance agents had collected said sum under the “ sue and labor ” clause about seven years before. The plaintiff made a demand upon the defendant for the amount; it was not paid and this action was brought.
The trial court found substantially every claim of the plaintiff. It found that the defendant had collected the money under the “ sue and labor ” clause while acting as agent,
The “ sue and labor ” clause referred to in the policy is a clause which does not undertake to indemnify the assured for the loss or any portion of it, but it is a clause inserted for the benefit of the insurance company to encourage the assured to make an effort to salve the wreck for the benefit of the insurance company and to prevent a total loss, if possible. It is, in effect, an agreement outside of the indemnifying clause of the policy, in which the underwriter agrees to pay to the assured the expenses which he may incur in preventing a further loss -which, if it occurred, would fall on the underwriter under the indemnifying clause of the policy. The reason for the clause is that the assured might abandon the wreck and look to the insurers to indemnify him for the loss if he did not have assurance that he could recover the expenses which he might incur in trying to salve the wreck. It is an addition to the indemnifying insurance provided in the policy.
The first contention of the appellant upon this appeal is that the defendant was the foreign factor of the plaintiff, because the plaintiff was located in Ohio and the defendant was located in another State, the State of New York, and that the position which the defendant occupied in relation to the plaintiff constituted it the plaintiff's factor. It seems to me that there is no force in this argument. A foreign factor, as understood in marine matters, occupied an entirely different position from insurance agents or brokers. He was a person who had charge of the property, the cargo, to handle it, dispose of it and convert it into money or exchange it for other property. In olden times he often sailed with the boat. He had nothing to do with the management of the boat. His duties only commenced when the port of destination was reached and the personal property was turned over to him by the master of the boat. Much has been written, in history and in fiction, in
In the case at bar neither the boat nor the cargo was ever intrusted to the insurance agents. All that the plaintiff did was to place the bill and the policies in their possession with instructions to collect it for the plaintiff, and the money was paid to them by the insurance companies simply for the purpose of turning it over to the plaintiff. Instead of being foreign factors they were simply insurance agents and brokers acting within the well-known scope of their authority. I think it clear, therefore, that they did not come within the exception referred to in the opinion in Wood v. Young (supra).
The next point of the appellant is that by the custom of the
The third point of the appellant is that the defendant, being lawfully in possession of the money collected under the “ sue and labor ” clause, a demand was necessary before suit could be brought and cases are cited to the effect that where one comes lawfully into possession of property he cannot be charged with conversion thereof until after demand and refusal, such holdings being based upon the ground that the sole object of the demand is to convert an otherwise lawful possession into an unlawful one. In such a case the refusal furnishes the evidence of the conversion. The plaintiff urges, therefore, that no action could have been brought by the plaintiff against the defendant until the demand had been made and that, therefore, the Statute of Limitations did not run. Under the statute the action must be commenced within six years after the cause of action has accrued (Code Civ. Proc. §§ 380, 382), and this period of limitation must be computed from the time of the accrual of the right to relief by action. The question here is, therefore, when did a right of action accrue to the plaintiff against the defendant. It is urged by the appellant that it did not accrue until the demand was made. It was held by the trial court that the right to bring the action accrued as soon as the money was received by the defendant. In that connection it should be noted that this is an action for breach of contract and not an action for fraud.
It is conceded that section 382 of the Code of Civil Procedure, the six-year Statute of Limitations, applies in this case unless section 410 applies, for the reason that the statute did not begin to run until the demand was made. The respondent claims, however, that, at most, it was an action for money had and received, that it was not based on fraud and that there was no express trust which required a demand to terminate it,
“ 1. Where the right grows out of the receipt or detention of money or property, by an agent, trustee, attorney, or other person acting in a fiduciary capacity, the time must be computed from the time, when the person, having the right to make the demand, has actual knowledge of the facts, upon which that right depends.”
It has been held, however, repeatedly, that where money is received by one for another under circumstances which make it the duty of the one receiving the money to pay it over, an action for money had and received may be brought to recover such sum of money without a demand, and the Statute of Limitations begins to run from the date of the receipt of the money. (Mills v. Mills, 115 N. Y. 80.)
However, if there is an express subsisting trust the statute does not begin to run against the beneficiary until the trustee has openly repudiated the trust. This rale, however, is not applicable to a trust ex maleficio, and applies only to express trusts, (Lammer v. Stoddard, 103 N. Y. 672.)
The case of Wood v. Young (supra) seems to be directly in point. In that case the plaintiff executed to her half-brother, the defendant’s testator, a power of attorney authorizing him to collect the amount of an insurance policy held by her upon the life of her deceased husband. He collected the money and, without the consent of the plaintiff, appropriated it and never accounted for it. Ten years after the action was brought to
In Glover v. National Bank of Commerce (156 App. Div. 247) it was held that the right of action against plaintiff’s agent for failure to discharge his duty is not based upon fraud and that the Statute of Limitations begins to run from the omission and not from the time when the plaintiff discovered it. (See, also, Campbell v. Culver, 56 App. Div. 591; Libby v. Van Derzee, 80 id. 494; affd., 176 N. Y. 591; motion for reargument denied, 177 id. 567.)
I think it clear that no fiduciary relation existed; that a demand was not necessary before an action could be brought; that there was no express trust, and that the Statute of Limitations commenced to run from the time that the defendant
It, therefore, follows that the judgment should be affirmed, with costs.
All concur.
Judgment affirmed, with costs.