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New York Supreme Court, Appellate Term - 192 N.Y.S. 242, 117 Misc. 663
Tags: Property, Bailment, Involuntary bailee
The case involves a claim of conversion by the plaintiffs against the defendants, who are stock-exchange brokers. The plaintiffs mistakenly sent the wrong bond to the defendants, who returned it to an unidentified boy. The plaintiffs argue that the defendants had an absolute obligation to redeliver the bond to them, while the defendants claim they exercised due diligence and are only liable for negligence. The trial judge ruled in favor of the plaintiffs, but did not state the grounds for the decision. The defendants are considered involuntary bailees or quasi-bailees, and the plaintiffs argue that there was sufficient evidence to show that the defendants did not exercise due care. In voluntary bailments, it is the duty of the bailee to deliver the bailed article to the correct person, regardless of care, good faith, or innocence. The duty of a voluntary bailee for compensation and a voluntary gratuitous bailee is the same, except for the degree of care required for custody. Both have an absolute duty to deliver the bailed article to the correct person. An involuntary bailee is not under any duty to care for or guard the bailed article as long as they lack volition. However, if the involuntary bailee exercises any control over the bailed article, they become responsible as if they were a voluntary bailee. The few legal precedents on this topic support the conclusion that delivery to the wrong person amounts to conversion.
I support Justice Mullan's ruling and vote to uphold it. I believe that the defendants were obligated to return the bond to its rightful owner once they had it, even if they didn't receive any payment for doing so.
The plaintiffs mistakenly delivered a bond to the defendants' office, which the defendants had not purchased. The defendants attempted to return the bond to the plaintiffs' messenger, but mistakenly gave it to a stranger instead. The plaintiffs demanded the return of the bond from the defendants, but the bond was no longer in their possession. The defendants did not accept possession of the bond and attempted to divest themselves of it, so no agreement to accept possession can be implied. They had no obligation to accept the bond or return it to the true owners unless it was still in their possession at the time of demand. The defendants' act of transferring physical possession of the bond, even to a stranger, did not constitute an exercise of dominion over the property, and the plaintiffs have no right of action against the defendants unless the means used to rid themselves of possession were unreasonable or improper. The question of negligence is relevant in determining liability in these cases. The sufficiency of the complaint was not challenged by the defendants.
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