Calumet & Hecla Mining Co. v. Equitable Trust Co.

275 F. 552, 1919 U.S. Dist. LEXIS 624

• Court: District Court, S.D. New York
• Decided: November 24, 1919
• Status: Published

Opinion

AUGUSTUS N. HAND, District Judge

(after stating the facts as above). [1] I agree with the plaintiff that there is no defect of par- . ties defendant. If the defendant received moneys which it ought to repay in an action of indebitatus assumpsit, I can see no reason why other persons by means of whose operation these moneys reached the defendants should be made parties in an action at law.

[2] In regard to the first ground of demurrer, the complaint, if it can stand, must do so because of a proper allegation of agency. I find no allegation that the defendant received the money from the .plaintiff, but, on the contrary, it apparently received it from Miller and Stafford in a check which was indorsed and paid to the defendant. There is no allegation that the defendant had knowledge or was put upon notice respecting the equities or claims which the plaintiff might have in the money by reason of any false representations. The false representations were not alleged to have been made by the defendant, but by Miller and Stafford. Now, if they were agents for the defendant and acted for it in making the representations, an equity would apparently arise which would entitle the plaintiff upon the alieg;itions in the complaint to recover; but no allegation can be found which sets forth the appointment of these men as agents to operate the ship. A mere allegation that they did operate her as agents is nothing but a conclusion of law, which nowhere discloses the basis upon which the agency is founded, unless it he thought to be founded upon the mere fact that the defendant was a mortgagee to secure the repayment of $225,000.

[3] The fact that the defendant was a mortgagee would not render it liable for affreightment or other contracts made by the mortgagor, or his agent, who was really in possession (Jackson v. Vernon, 1 Henry Blackstone, 114; Myers v. Willis, 17 C. B. 77; Law Guaranty & Trust Company Soc. v. Russian Bank for Foreign Trade, 1905, 1 K. B. 815; Morgan’s Assignees v. Shinn, 15 Wall. 105, 21 L. Ed. 87; Davidson v. Baldwin, 79 Fed. 95, 24 C. C. A. 453; Thorn v. Hicks, 7 Cow. [N. Y.] 697), and this is true under the doctrine laid down by the foregoing authorities, even though the steamship is registered in the name of the mortgagee.

[4] It is to be noticed that there are two Millers named in the com•plaint, one Arthur A. Miller, the treasurer of the defendant,» who took title to the vessel to secure repayment of the loan. It is not ah leged that he made any false representations, or bad anything to do with the management of the ship. He apparently merely held the legal title as trustee for the defendant to secure its loan. The complaint alleges that:

“Robert E. Miller and Bartholomew L. Stafford, doing business under me irado-namo and style of Acme Steamship Company, * * * and the Acme Operating Corporation, as agents for said Robert E. Miller and Bartholomew L, Stafford, individually or doing business as Acme Steamship Company, and the defendant, falsely and fraudulently stated and represented to plaintiff that tho steamship * * * was shortly thereafter to enter upon a voyage to Genoa, * * * ”

I think it clear, therefore, that the complaint cannot stand "upon any theory that it discloses notice to the defendant through its treasurer, Arthur A. Miller, of any of the transactions complained of.

For the foregoing reasons, the demurrer is sustained on the ground i hat the complaint states no cause of action. The demurrer based upon a defect of parties is overruled.