Jones v. Mallory

Waite, J. The plaintiff, in this case, received of Charles H. Kemper, certain goods to sell, and pay over the proceeds to him. The goods were sold, and while the money, arising from thé sale, remained in his hands, the defendant, Mallory, having an execution against Frederick A. Kemper, and claiming that the goods belonged to him, delivered it to the plaintiff, with directions, as a deputy sheriff, to levy it upon the money in his hands. This the plaintiff refused to do, unless he was fully indemnified. Mallory, to induce him to make such levy, gave him the bond upon which the present suit is brought, and also a writing, saying that he might retain the money in his hands, until the title to the same was determined. The plaintiff, thereupon, retained the money, as levied upon by the execution,—was sued by Charles H. Kemper,—and after Mallory had obtained satisfaction of his execution, in another mode, settled the suit, and paid the principal, interest, and costs. He now claims to recover upon the bond, the amount so paid. The defendants deny that they are liable for the amount of interest. That the plaintiff was liable to Kemper, for the interest, is not denied. The goods were placed in his hands, as Kemper’s agent, to sell for his use ; and when sold, the money [391] became the property of Kemper, and the plaintiff liable to him for the amount, unless he could show that it belonged to some other person. This was indeed claimed by Mallory ; but that claim and the defence of the suit were abandoned. The plaintiff, having thus unlawfully withheld from Kemper the money when it became due, was liable, not only for the principal, but the interest upon it, by way of damages for the detention. And the plaintiff, having thus become damnified, is entitled to recover the amount of the defendants upon their bond, unless the circumstances relied upon by them are sufficient to support their claim. In the first place, it is insisted that the plaintiff is not entitled to interest, because he refused, after the levy was made, to pay the money over to Mallory, who demanded it of him. But we see no obligation on his part to do so. Mallory has shown no legal title to the money. He indeed claimed, that it belonged to Frederick A. Kemper, but even that claim was never established. Besides, it was a part of the original arrangement, by which the plaintiff was induced to take the course he did, that he should retain the money, until the controversy between Mallory and Kemper was settled, and he knew to whom he might safely pay it. And Mallory, having thus drawn him into the controversy, has no right to violate the compact on his part. Again, it is said, that the defendants were abundantly responsible, and therefore the plaintiff had adequate security upon the bond, and should have paid over the money, when demanded by Mallory. But we do not consider this a sufficient answer. The plaintiff might have consented to retain the money for the benefit of Mallory, if he were authorized to retain it, until the title was settled, that he might have it in readiness, the moment it was ascertained that it belonged to Kemper, when he would not have done so, had he known he must pay it over to Mallory,—expose his property to an execution in favor of Kemper,—and then seek a reimbursement from the defendants, perhaps after a pro [392] tracted litigation, as in the present case. At any rate, he had a right to prescribe the terras upon which he would consent to act, and those terms having been assented to, and the act performed, it is not in the power of the other party alone to change them, at pleasure. In the next place, it is said, that the plaintiff used the money, and is therefore chargeable with interest, during the time it was used. It does not necessarily follow, that,because a party, with whom money is deposited, makes use of it, he is therefore chargeable with interest. A bank with which money is deposited for safe keeping, subject to the order of the depositor, is not generally chargeable with interest, on such deposite, although it is mingled with other moneys of the bank and used as such, unless there is something in the case, showing a different intent of the parties. Interest by our law is allowed, on the ground of some contract expressed or implied to pay it, or as damages for the breach of some contract, or the violation of some duty. Selleck v. French, 1 Conn. R., 33. It is not claimed, that the plaintiff ever made any contract to pay interest on the money in his hands. Is he liable on the ground that he has broken 'any contract or violated any duty ? We have seen, that so far as these defendants are concerned, he was a mere stakeholder of the money, authorized to retain it, until the title to it was determined, and that he has violated no duty, which he owed to them. The case of Harrington v. Hoggart, seems very much in point, and goes far to sustain the plaintiff’s case, in the various aspects in which it has been viewed. 1 Bar. & Adol., 577. 20 E. C. L., 448. There the defendant and his partner, who had died before the commencement of the suit, were employed to sell an estate belonging to the plaintiff. They made an agreement with one Secreetan, for the sale, who paid them £2,000 as a deposite. Objections were made by the purchaser to the title, and he delayed completing the purchase. The plain [393] tiff thereupon gave notice to the defendant, to invest the money thus deposited, in the purchase of government securities, offering to indemnify him against any loss that might thereby accrue. The defendant and his partner replied, that they would do so, if the plaintiff would obtain the consent of Secretan, but no such consent was ever obtained. The defendant and his partner received the £2,000, as a deposit, mixed it with their own money and the deposits of other persons, and laid it out in the public funds, but always kept at their bankers, enough to meet the calls of any particular deposits. The question was, whether the plaintiff was entitled to recover interest on the money, thus deposited with the defendant and his partner. Lord Tenterden, C. J., in givinghis opinion, said, “There is an essential distinction between the character of an agent, and that of a stakeholder. If an agent receive money for his principal, the very instant he receives it, it becomes the money of his principal. If, instead of paying it over, he thinks proper to retain it and make a profit, he may, under certain circumstances, be liable to account for the profit. Here the defendant is not a mere agent, but a stakeholder. A stakeholder does not receive the money for either party, but for both ; and, until the event is known, it is his duty to keep it in his own hands. If he thinks proper to employ it, and make interest of it, if any loss accrue, he must be answerable for such loss ; and if he is to answer for the loss, it seems to me, he has a right to any intermediate advantage that may arise.” Parke, J. “ It appears to me that the situation of an auctioneer is this : he receives a sum of money, which is to be paid, in one event, to the vendor, that is, provided the purchase is completed; and, in the other, if it is not completed, to the vendee; he holds the money, in the mean time, as a stakeholder, and he is bound to keep it, and pay it over upon either [394] of those events, immediately. He is clearly not responsible for interest upon the money, if he makes it.” And, after referring to certain cases, he added, “ These cases establish, that a man who holds money as an agent or banker, bound to produce it at a moment’s notice, to the person who deposits it in his hands, is not liable to pay interest, if he makes it.” Without further pursuing the examination of the case, we are satisfied, that it was correctly disposed of in the court below, and therefore think no new trial should be granted. ' In this opinion, the other judges concurred, except Hinman, J., who tried the cause in the court below, and was disqualified. New trial not to be granted.