5 Lans. 416 | N.Y. Sup. Ct. | 1872
With great deference and respect for the learned judge who found the facts in this case, I am compelled to differ with him totally in his legal conclusions. It would be, in my opinion, a most lamentable proposition to adopt, into either the legal or equitable jurisprudence of this country, that, by established principles of law, the thief can be protected from legal liability to the owner of property from whom he has stolen it, while one who has obtained it by only a misdemeanor or a fraud can be held liable. This, as I understand
Ever since the decision of the celebrated case of Hoffmam, v. Carow, in the Oourt of Errors of this State, reported in 22 Wendell, 285, the question has been put at rest. In that case it was held that even an auctioneer who sells stolen goods is liable to the true owner, notwithstanding that thé goods had been sold by him, and the money paid over to the thief, without notice of the felony. The note to that case shows the foundation of the claim or pretence, that there having been a felony makes any difference in the right to recover. The owner of stolen property, or the avails thereof, clearly traced and proved, can recover it by any proper action, in any proper form, in whose hands soever it may be found; and no law is to be found that throws around the thief its technical protection to shield him. We have no such ungracious doctrine incorporated into our jurisprudence.
Two well-established principles, or maxims of law, woúld prevent the adoption of the rule claimed by the defendant. First, that the wrong-doer shall never be heard in court to claim that his felony, or other wrong, gives him any advantage as a defence (Broom’s Maxims, 317, 318; Co. Litt., 148, b); and, second, that the owner of property is not divested
The recent case of Bassett v. Spofford, reported in 45 New York, 387, &c., decided since the trial of the case before us, is conclusive upon the point we have been discussing, and covers it to the fullest extent. The owner is not estopped, in any way, from pursuing his remedy.
No point is raised, in the case before us, that the complaint is not broad enough, or that the facts found are not sufficient to sustain it, if, upon them, the plaintiff is entitled to relief. I think she is clearly entitled to judgment upon those facts.
It was always allowed in equity, even upon the other view of the case, that, where trust money has been converted into land, stocks, notes, &c., that the substitute may be claimed, when it can be identified by evidence. (Leuck v. Leuck, 10 Vez., 517.) In the case of Taylor v. Plummer (3 M. & S., 562), a broker, who was entrusted with money to buy exchequer bills, misapplied it by buying American stock and bullion with intent to abscond, the principal was allowed to take the bullion and proceeds of what was transferred, even against the assignees of the broker, who had become bankrupt on the day he received the money. In the case of Lane v. Dighton, reported infAmbler, 409, Lord Hardwicks, chancellor, said, in a case where a trustee had used trust funds in the purchase of lands: “ The court has been very cautious in following money into land, but it has done it in some cases.’*
I do not mean by what I have said, to hold that the receiver or purchaser of stolen property or its avails cannot be treated as a trustee for the true owner. If a case is presented in which that should be the only or the best condition of liability to impose upon the possessor, I think the law of equity in such a case would cast that character upon him. It is its boast that it will allow no wrong to be without a remedy. (1 T. R., 512.) Nor will the law, on account of the remedy in such a case, allow itself, in its executive capacity, to work a wrong, if the court have jurisdiction of the matter. (2 Just., 482.)
In the case before us, it was the felons who changed the stolen bonds into money, and (as found by the judge) the Same money was changed into mortgage and notes. There is no dispute about the following it and its identity, or of its conversion into the obligations in question. It was no 'bona fide purchaser that wrought this change; and some of these obligations came into the hands of the defendants, or some of them, with knowledge of the larceny. And the question before the court was, whether the proceeds of this stolen property could be recovered, by the plaintiffs, of the parties so holding it. The learned judge thought there was no trust,
I think the learned judge correctly held that for the services performed by the counsel, prior to the 24th of January, 1870, if payment therefor was taken out of notes not then ' due, and received in good faith, they were entitled to be paid out of such notes. I think he also corrrectly held that, for services performed after that time, they were not holders or receivers in good faith, and were not entitled to be paid; but I think he erred in dissolving the injunction, as well as in dismissing the complaint.
The judgment should be reversed, and a new trial ordered, costs to abide the event.
The defendant, George E. Warner, stole $14,000 worth of bonds from the plaintiff, and disposed of them for money; which money was lent, and promissory notes and an assignment' of a mortgage on real estate were taken therefor. A portion of such notes and the real estate mortgage came to the hands and possession of the defendants, Porter, Miner and Warren, attorneys of this court, who engaged to defend Warner and his wife for the larceny in stealing the bonds, and to procure bail for one or both of them before' their trials. Porter, Miner and Warren had knowledge or notice, as the case shows, either at the time they received the notes and mortgage, or soon thereafter, that they were given for, or were purchased with, money obtained for the bonds which Warner and his wife, or one of them, had stolen from the plaintiff.
The justice at the Special Term held that the plaintiff could not recover in this action the notes and mortgage that were given for, or were purchased with, money obtained for the bonds stolen by Warner and wife, or one of them, or the avails of such notes and mortgage, that had come into the possession and hands of the defendants, Porter, Miner and Warren, though they had knowledge or notice that such notes and mortgage were given for, or were purchased with, money received for the bonds stolen from the plaintiff, before they became holders of such notes and mortgage, for full value paid or incurred therefor; for the reason, that no trust (in the opinion of the justice) was created or could be implied as to the notes and mortgage in the hands and possession of Porter, Miner and Warren, in favor of the plaintiff. It was upon that ground that Porter, Miner and Warren were allowed by the justice to keep the notes and mortgage that were given for, or were purchased with, money that was obtained for the bonds stolen from the plaintiff, together with the money those defendants had received on such notes and mortgage.
The defendants, Porter, Miner and Warren, have attempted to sustain the decision and judgment rendered at the Special Term by the following authorities, viz.: Hawthorn v. Brown (3 Sneed., 462), Ensley v. Balentine (4 Humph., 233), Campbell v. Drake (4 Iredell, 94), Pascoag Bank v. Hunt (3 Edw. Ch., 583), Perry on Trusts (102 and 103). The plaintiff’s counsel has cited many authorities on which he relies for a reversal of the decision and judgment of the Special Term, among which are Hoffman v. Carow (22 Wend., 285), Bassett v. Spofford (45 N. Y., 387), Heckle v. Lurvey and wife (3 Am. Rep., 366), Hill on Trustees, American Notes (third ed., p. 212; old ed., p. 144), Perry on Trusts (§§ 166 and 211).
It was provided by the Revised Statutes that “the right of action of any person injured by any felony shall not, in any ease, be merged in such felony, or be in any manner affected thereby.” (2 R. S., 292, § 2.) But that section has been repealed by section 73 of the Code, and section 7 of the Code has been substituted therefor, which is as follows: “Where the violation of a right admits' of both a civil and criminal remedy, the right to prosecute the one is not merged in the other.”
I think Porter, Miner and Warren should be regarded and held to be trustees, and be adjudged to hold the notes and mortgage in question, and the avails thereof, as trustees by construction, for the benefit of the plaintiff. The court should not refuse to allow a party to recover the avails of property stolen from him, on any technical grounds, when the
The plaintiff should be regarded the owner of the avails of the bonds that were stolen from her, until some other person shows a better or superior equitable right thereto than she had. The mere changing such avails from one kind of property or security into another, or from money into securities, did not affect, the plaintiff’s right thereto. Where a willful trespasser converts another’s corn into whiskey, the owner of the corn retains the title to the whiskey. (Silsbury v. Me Coon, 3 Comst., 379.)
According to the conclusions of fact found by the justice at the Special Term, Porter, Miner and Warren received or held the notes and mortgage with notice or knowledge that they were given for, or were purchased with, money obtained by the thief, Warner, for bonds he had stolen from the plaintiff ; and that with such knowledge, or after such notice, they have retained such notes and mortgage, or some of the avails thereof. And upon these conclusions of fact, justice and conscience require that the plaintiff should recover the notes and mortgage, or the avails thereof over and above that portion thereof which the justice at the Special Term found that those defendants were entitled to retain, on the ground that they received the same in good faith for services they rendered, and disbursements they paid for the thief and his wife before the notes became due, and before they had notice that the notes were given for, or that the mortgage was purchased with, money the thief obtained for the bonds he had stolen from the plaintiff. There is authority for allowing those defendants to hold the notes and mortgage as security to the extent I have mentioned, or for permitting them to retain such portion as I have mentioned of the avails of the notes
For these reasons I am of the opinion the plaintiff was entitled to a relief and a judgment in the action, and that judgment given against her should be reversed, and a new trial granted, costs to abide the event.
This action is of an equitable character, and was brought to compel the defendants to pay over and account for certain sums of money and securities which had passed into their hands, which were the avails and proceeds of certain bonds which had been feloniously stolen from the plaintiff. The complaint was dismissed, and the injunction issued dissolved by the justice before whom the case was tried, upon the ground that the bonds having been stolen and sold by the felons, and the moneys arising therefrom invested, no trust was created or implied, and no cause of action was established as against the defendants. .'
I think the learned judge was clearly wrong in his decision, and am of the opinion that the action was properly brought and can be maintained. Justice Stobt, in his commentaries on Equity Jurisprudence, says: “ One of the most common cases in which a court of equity acts, upon the ground of implied trusts in vmiium, is where a party has received money which he cannot conscientiously withhold from another party. It has been well remarked that the receiving of money, which, consistently with conscience, cannot be retained, is, in equity, sufficient to raise a trust in favor of the party for whom or on whose account it was received. This is the governing principle in all cases; and therefore the true question is not whether money has been received by a party, but whether he can now with a safe conscience, ex mquo et iono, retain it. Illustrations of this doctrine are
It would certainly be an anomaly in the history of legal proceedings, and a grave- reflection upon the administration of justice, if a felon could invest the fruits of his crime, or dispose of them in such a manner as to place them beyond the reach of the law. The person whose property had been feloniously appropriated, in such an emergency, would be left without any redress whatever, while the felon would reap the pecuniary benefit arising from his crime. If convicted of the offence and punished by imprisonment, he might atone for the crime committed against the public, but, in this manner, could not restore-to the sufferer the property which he had stolen. The law does not sanction any such absurdity.
In England it was established, as a general rule, that sales of' personal property in market, overt, would bind the property even against the real owner; but this law has never been adopted in this country, and whenever any question has been presented in regard to it, the doctrine has been repudiated by American judicial tribunals. (2 Kent Com., 323, 324; Hoffmam v. Carrow, 22 Wend., 285.) The title upon.a sale of personal property rests upon the fundamental principle that “Nemo pirns juris in álrirum transf erre potest, quarrn ipse habet." The doctrine that the private injury is merged in the public wrong has never prevailed in this State, and the intervention of a felony is generally no barrier to the right to personal property stolen, in the hands of any person who may hold it, or the proceeds thereof.
As early as 1801 a law was enacted in this State which pro
In Barret v. Spofford (45 N. Y., 387), it was held that, by the larcenous taking of chattels, the owner is not divested of his property, and a transfer to a bona fide purchaser does not impair his rights, and the owner may follow and reclaim them wherever he can find them; and a carrier or other bailee can stand in no better situation than a purchaser who has received them in good faith and for full value.
If the plaintiff had a remedy at law to bring an action for the money stolen, clearly he would be entitled to equitable relief, where the circumstances were such as to require an appeal to the equitable powers of the court. The bonds here had been converted into money, the money into securities, and these securities were held in such a manner and by such varied interests that this would be beyond the reach of any strict legal remedy, and only within the comprehensive scope of a bill in oquity, where all the parties could be brought in and every right protected, so as to adjust and determine the entire merits of the case. This remedy is manifestly appropriate, and within the jurisdiction of the court in the exercise of its equitable powers.
The defendants’ counsel relies upon some reported cases, which deserve examination. In The President, Directors & Co. of the Pascoag Bank v. Hunt and others (3 Edw. Ch., 583), the complaint charged the former cashier of the bank, one of the defendants, with abstracting funds and investing them in the purchase of a bond and mortgage, and asked that the loan might be decreed to have been made on account of the complainants, and the securities taken for their benefit, in whole or to the extent to which the moneys were used; that the said Hunt might be decreed to assign to .the complainants the said securities, or so much thereof as they might be entitled to, and that the parties liable on the bond and mortgage be directed to pay to the complainants accordingly. The complainants also asked for an injunction, which was granted. Upon a motion to dissolve the injunction, the vice-chancellor held that the complainants must be left to pursue the cashier in a court of criminal jurisdiction, and, if found guilty, the court had no authority to indemnify the complainants for their loss out of property acquired by Hunt. The opinion of the court is brief, and does not enter upon a full discussion of the merits of the question involved, nor is any authority cited to sustain the position taken. If the case can be considered as an authority for the doctrine contended for, I think it is overruled and rendered of no account by the subsequent decision of the same court, and the same judge, which, as I understand, holds entirely a different doctrine. (The Bank of America v. Pollock and others, 4 Ed. Ch. R., 215.) The bill in the case last cited charged that Pollock, who was a clerk of the plaintiff, had purchased cer
Both the cases were decided by a single judge, and no appeal was taken from either of them. For is there any other ease cited from this State to sustain the doctrine contended for by the defendants’ counsel.
Hawthorne v. Brown (3 Sneed [Tenn.], 462) was an action of trover to recover for the conversion of personal property, and it was laid down tlxat the principle which authorizes a beneficiary of a trust to sue at law for property wrongfully converted, or to disclaim title, and proceed upon his remedy in personam, has no application where a person, standing in no fiduciary relation, wrongfully obtains a portion of a trust fund, and invests the same in property for his own benefit, without the knowledge and against the will of the trustee and beneficiaiy. . There was no felonious taking of the property, and hence no such question as the one now x'aised was presented to the court.
In Ensley v. Balentine (4 Humph. [Tenn.], 233), it was questioned, whether, if a ’ father or other person • take into possession the property of another, acting unde»' a claim of
Campbell v. Drake (4 Iredell, N. C., 94) was a bill in equity to reach land which had been purchased by a clerk in a store with pilfered money and goods taken from his employer, and it was held that the person thus robbed could hold neither the clerk nor his representatives after his death as trustees of the land for his benefit, so as to enable him to call for a conveyance of the legal title himself. It will be observed that this was a proceeding to obtain land without first obtaining a judgment for the claim, and the learned judge who wrote the opinion says: “We will not say, if the plaintiff had obtained a judgment against the administrator for the money as a debt, that he might not come here to have the land declared liable as a security for the money laid out for it.” So it would appear that there is a way of reaching even rea) estate which is purchased as the proceeds of a felony. If this case can be considered as in point, then, I think, it is not applicable in this State, where the law intervenes and prevents the civil remedy being merged in the felony. But, independently of this consideration, I cannot concur in the doctrine that a felon can so dispose of the proceeds of his crime as to place them beyond the reach of the real owner, and therefore, I think, with due respect to the learned court, that the decision is erroneous and cannot be considered as a binding authority.
The citation from Perry on Trusts, 102 and 103, rests entirely upon the authority of the eases last cited; and if any of them can be considered as upholding the principle sought to be maintained by the defendant’s counsel, then, in my opinion, they are unsound and should not be followed.
Thompson v. Parkins (3 Mason C. C. U. S. Rep., 232) is a strong authority the other way. Upon principle and authority, I entertain no doubt that the plaintiff’s action was properly brought.
I am also of the opinion that the defendants had no claim
As the judge was clearly wrong on the trial, the judgment must be reversed and a new trial granted, with-costs to abide the event.