Chapman v. Mills & Gibb

241 F. 715, 1917 U.S. Dist. LEXIS 1338

• Court: District Court, S.D. New York
• Decided: February 2, 1917
• Status: Published

Opinion

MAYER, District Judge

(after stating the facts as above). [1] Preliminarily it may be stated that the bank has a general lien or title to the checks by virtue of the indorsement and mailing prior to the appointment of receivers in this jurisdiction, irrespective of the physical receipt by the bank unless the appointment of receivers intermediate between the time of the phjrsical mailing and the time of the physical receipt gave the right of possession to the receivers in New York, and that, in such case, the bank would have the right to offset the proceeds of the checks against the overdue notes of Mills & Gibb. Further, the receivers appointed in New York and the ancillary receivers appointed in Rhode Island in this equity conservation proceeding were •ordinary receivers, governed by ordinary equity principles, and at the time in question there was not any transfer of title of the assets of Mills & Gibb to the receivers, and the receivers had the right of possession upon their appointment, only to those assets of which Mills & Gibb then had title.

Various contentions are made by each party, but it is necessary to consider only the effect, in law, of the mailing of the checks prior to the appointment of receivers in the main proceeding in New York.

Many cases have been cited by counsel relating to the mailing of letters, but diligent search has failed to disclose any case which may be said to be directly in point. In criminal cases, whether here or in England, the statute, asserted to have been violated, usually sets forth, with reasonable precision, under what circumstances an offense is committed. The ultimate purpose sought to be accomplished under those statutes is the prevention of interference with the mails and the preservation of the integrity of the post office system, and therefore, cases like Regina v. Jones, 4 Cox Crim. Cases, 198, and United States v. Nutt, 27 Fed. Cas. No. 15,904, p. 206, are not of much service.

[2] Reference is made to the regulations established by the Post Office Department of the United States, whereby under certain circumstances the department, in its discretion, may decide to return a mailed communication to the sender. But such regulations, and the opinions of Attorneys General in respect thereof, arc irrelevant to the question here concerned because, in this case, it is conceded that the sender intended that the transit of the mailed matter should he uninterrupted until destination was reached, and because, in point of fact, that intention was carried out and the sender did not in any manner seek to recall the mailed matter, but by its conduct disabled itself from exercising any dominion or authority over the mailed matter once that it had been placed in the custody of the Post Office Department for transmission to address of destination.

It may well be that interesting questions would arise if the sender had recalled its letter and the Post Office Department had returned the letter before it reached its intended destination. That, however, is not this case. Some of the cases cited speak of the Post Office Department as an agent, but I am inclined to think that that is rather a loose way of designating the position and function of the department in a case such as this. The department is the instrumentality whereby the mailed matter proceeded forward, but it is in a sense as inanimate as if there stretched direct from the office of Mills & Gibb to the office of the bank in Rhode Island a mailing tpbe, and by some pneumatic device some one in Mills & Gibb had started this letter through the tube and it had come out at the other end at the window of the receiving teller of the bank. .

If this illustration of the tube is kept in mind, the question seems to become simplified, as is often the case where simple illustrations are employed. The basic question in the case is, When did Mills & Gibb lose control of these checks? and the answer is, The moment they were placed in the mail. In that connection it must be emphasized and. remembered that the intention of Mills & Gibb is the controlling fact in this case. That intention was to part forever with possession of these checks, and to cause them to go forward without interference by Mills & Gibb, or anybody else, until they reached their destination. In view of the stipulated facts it is a fair presumption that those checks would be accepted, but, whether a presumption arose or not, the checks were in fact accepted.

[3,] I cannot see that the fact that payment was made by Mills & Gibb to this bank for the first time in this way involves the principle here considered, or in any manner affects the right of the bank, nor am I able to see how the bank is affected by the fact that it took some days to collect upon these checks. The vital point is that Mills & Gibb, by their own act and in accordance with their own intention, relinquished and lost possession of these checks about noon, May 12, 1916, and that Mills & Gibb and the receivers (in addition to any other reasons which may be advanced) for this reason never had the right, at any time after noon of May 12, 1916, to the possession of these checks. Entertaining this opinion, the claim of the bank must prevail.

I have noted below a few cases which, by analogy, may be of some service.¹

1 Note. — Barrett v. Dodge, 16 R. I. 740, 19 Atl. 530, 27 Am. St. Rep. 777; Trego v. Cunningham, 267 Ill. 367, 108 N. E. 350; Kirkman & Luke v. Bank of America, 2 Cold. (42 Tenn.) 397; Kennedy v. Kennedy Corporation, 32 Misc. Rep. 480, 66 N. Y. Supp. 225; Commonwealth v. Wood, 142 Mass. 462, 8 N. E. 432; Greene, Rec’r, v. Jackson Bank, 18 R. I. 779, 30 Atl. 963; Security Bank of Minn. v. N. W. Fuel Co., 58 Minn. 141, 59 N. W. 987.