Lamport Mfg. Supply Co. v. Reiss

Frankenthaler, J. The complaint alleges the fraudulent purchase by one Sugarman from the plaintiff of certain goods; the rescission of the sale by reason of the fraud; that the defendant Bonime-Abt, Inc., has in its possession, transferred by the alleged fraudulent buyer without consideration, a note for $912.57 representing the purchase price of seven bales of the goods, and the refusal of the corporate defendant, upon demand, to deliver said note to the plaintiff; and the relief prayed for against the said corporate defendant is that it deliver the note and any moneys collected thereon to the plaintiff, or in the event of its refusal to deliver, that the plaintiff have judgment against said defendant for the amount of the note. Prior to the trial of the action the defendant Bonime-Abt, Inc., moved to dismiss the complaint as against that defendant upon the ground that the Municipal Court had not jurisdiction of the subject of the action, and also on the ground that the complaint did not state facts sufficient to constitute a cause of action against said defendant. That motion was denied by Justice Chilvers. When the case thereafter came on for trial before Justice Sullivan the said defendant moved to dismiss on the same grounds as upon the motion which had been denied by Justice Chilvers, and the motion was granted. I think it was error to dismiss. In the light of the allegations of the complaint the promissory note held by the respondent must be deemed to represent seven bales of the goods fraudulently procured from the plaintiff by the vendee Sugarman, and a refusal by the defendant Bonime-Abt, Inc., a holder of the paper without consideration, to deliver the note to the plaintiff upon demand was a conversion of the property. [778] “ If a man’s goods are taken by an act of trespass, and are subsequently sold by the trespasser and turned into money he may maintain trespass for the forcible injury, or waiving the force he may maintain trover for the wrong, or waiving the tort altogether he may sue for money had and received.” (National Trust Co. v. Gleason, 77 N. Y. 400, 408.) Not being a bona fide purchaser the defendant corporation stands in the shoes of its transferor. (Kinney v. Kiernan, 49 N. Y. 164; Partridge v. Rubin, 15 Daly, 344.) The objection that the note would require the indorsement of the respondent, and such indorsement could not be ordered by the Municipal Court, is not fatal to jurisdiction, for indorsement of the note is not essential, since a judgment in favor of the plaintiff for the delivery of the note (Civ. Prac. Act, § 1116) would transfer to plaintiff the right of property in the instrument. (Meuer v. Phenix Nat. Bank, 94 App. Div. 331; affd., 183 N. Y. 511; Corporation Holding Co., Inc., v. Wieber, 230 App. Div. 636.) I think the complaint alleges a cause of action of which the Municipal Court has jurisdiction. Judgment reversed and new trial ordered, with thirty dollars costs to appellant to abide the event. Levy, J., concurs.