Safian v. Irving National Bank

Page, J.: In my opinion this case is simply a breach of the express contract on the part of the defendant by failure to perform, and the plaintiff was entitled to recover back the money that he had paid to the defendant. When the plaintiff paid the money to the bank, the bank did not become a bailee who was required to send the identical money to Moszek Zelik Safian at the address in Poland, nor was any fiduciary or trust relation established between the parties which would be cognizable in a court of equity. The bank could use the money for its own purposes pending performance of the agreement. The failure to perform gave rise to an action on the express contract. (Legniti v. Mechanics & Metals Nat. Bank, 230 N. Y. 415.) The sole question to be determined is the amount the plaintiff is entitled to recover. He paid the defendant on September 19, 1919, the sum of $305; this money the defendant was entitled to mingle with [460] its other funds and employ, thus earning interest and to that extent profiting by the transaction. It cabled to its correspondent bank to pay from the marks the defendant had on deposit with the bank in Warsaw marks to the then equivalent of the sum of $297.50; but as this sum was never paid out, it still has on deposit or has since withdrawn those marks. That the marks thereafter depreciated in value is not attributed to any act or default of the plaintiff. The defendant claimed in the Municipal Court that it could only be held liable for the value of the amount of marks in dollars on the day that the plaintiff demanded the refund, which would be at the date of the commencement of the action, more than a year after the money was received. Mr. Justice Smith says that the defendant had a reasonable time in which to perform, which he states to be thirty days, and inasmuch as there is no evidence of the value of the marks at that time, there must be a new trial. That is, where a person has failed entirely to perform he is entitled to minimize the plaintiff’s loss by showing that if he had performed within a reasonable time the defendant would have made a profit on the depreciation of the marks, and he can recoup his loss of this profit from the defendant. There was no obligation on the plaintiff, in the defendant’s failure or refusal to perform, to buy other marks. He was not speculating in foreign exchange. He contracted with the defendant to make available to Moszek Zelik Safian $297.50. As the money was payable in marks in Poland, the amount was expressed in marks, computed according to the rate of exchange on that day. When the defendant failed to perform the plaintiff was entitled to his money back — not the value of the marks at that time estimated in the exchange value of the marks, but the American dollars which he had paid which the defendant had had the use of, and which it had profitably employed. The defendant could not profit by its own wrong, and tender back that which it had received measured by the depreciated value of that which it had agreed to pay in the foreign country. The theory of damages is compensation to the party who has been wronged, and not of profit to the wrongdoer. The defendant has the dollars and has the marks. It must pay the dollars and is entitled to the marks. It could and can sell the marks, and to that extent minimize its loss, but it cannot keep the dollars and compel the plaintiff to accept the marks. I, therefore, vote to affirm the determination of the Appellate Term. Clarke, P. J., Dowling and Greenbaum, JJ„ concur; Smith, J., dissents.