Appellate Term, First Department, January, 1922. [Vol. 117.

Since writing the foregoing, I have had the benefit of the opinion of Mr. Justice Lehman, in which, with characteristically cogent reasoning, my learned brother supports the view that there was no such exercise of dominion on defendants' part as to make applicable the rule of absolute obligation. I am not at all sure that, if the matter were wholly of first impression, I would not be inclined to agree with him; and, certainly, no one would justly criticize our higher courts if they should adopt Mr. Justice Lehman's view, and make it the basis of the rule of conduct it leads to. We shall permit an appeal, if the defeated party should so desire. In law, the most important of all things is that there be established rules that are well understood. I am holding as I do for the reason that while at present there is very little law upon the subject, I am of the opinion that such authority as I have been able to find seems to force the conclusion that when the defendants undertook to redeliver the bond they acted as greatly at their peril as if they had been voluntary bailees.

For the reasons stated, I vote to affirm.

Judgment affirmed, with twenty-five dollars costs, with leave to defendants to appeal to the Appellate Division.

BURR, J. (concurring). I concur in the conclusion reached by Mr. Justice Mullan and vote to affirm. I believe that defendants having received the bond and taken it into their possession became liable even as gratuitous or involuntary bailees for its proper re-delivery to the true owner.

LEHMAN, J. (dissenting). I agree in all material particulars with the statement of facts contained in

V.

Misc.] Appellate Term, First Department, January, 1922.

the opinion of Mr. Justice Mullan. In effect the record shows that through an innocent mistake the plaintiffs delivered by messenger at defendants' office, through the slot in a window intended for the delivery of securities purchased by the defendants, a bond which the defendants had not purchased and that the defendants promptly discovered the mistake and endeavored to return the bond to the plaintiffs' messenger but, by innocent mistake on their part, actually handed the bond to a stranger instead of the plaintiffs' messenger.

Thereafter the plaintiffs made a formal demand upon the defendants for the return of the bond, but at that time the bond was of course no longer in their possession and they could not comply with the demand. The plaintiffs thereupon brought this action alleging in the complaint that on June tenth they were under contract to deliver to the defendants a $1,000 bond of the Oregon Short Line Railroad Company and that they delivered to the defendants a "certain bond" which they believed to be a bond of the Oregon Short Line Railroad for the purpose of complying with their contract. That subsequently they were informed that the bond was a $1,000 bond of the Oregon and California Railroad Company, and the defendants refused to accept said bond as a compliance with their contract for a bond of the Oregon Short Line Railroad. That, "by reason of the premises the plaintiffs are entitled to the return of the said bond of the Oregon and California Railroad Company and have duly demanded the same from the defendants but defendants have wrongfully neglected and refused to deliver same to plaintiffs."

It is unnecessary now to consider whether the complaint sufficiently sets forth any cause of action, for no motion was made by the defendants to dismiss the

Appellate Term, First Department, January, 1922. [Vol. 117.

complaint on the ground of insufficiency and no such point is raised on this appeal. It is to be noted, however, that the complaint does not allege any negligence on the part of the defendants and I agree with Mr. Justice Mullan that no such issue was litigated and that the judgment can be sustained only if, as a matter of law, the defendants' mistake in returning the bond to the wrong messenger constituted a conversion of the bond or at least a breach of an implied agreement on their part to return the bond only to the plaintiffs.

While the slot in the window constituted an invitation to deliver at that place securities intended for the defendants, it is evident that it constituted an invitation only to deliver securities which the defendants were under some obligation to receive. Obviously no person could by slipping in other securities impose upon the defendants without their consent any affirmative obligation to care for these securities, to pay for them or even to receive them. The plaintiffs never intended to deliver to the defendants an Oregon and California Railroad bond. By their mistake the plaintiffs divested themselves of possession of the bond, but they did not transfer to the defendants either title or right to possession if they demanded the return of the bond. The defendants had not consented to accept the bond as a deposit; they claimed no title to it and they were not subject to any trust or obligation as bailees, for a bailment arises only through an express or implied contract. They were put in possession of the bond without any agreement on their part, express or implied, to accept the deposit of the bond; and though persons who come into possession of the property of others without their consent are sometimes for convenience called "involuntary 99 or "quasibailees," they incur no responsibility to the true owner in respect thereof. It is only where they com

Misc.]

Appellate Term, First Department, January, 1922.

mit some overt act" of interference with the property that an implied contract of bailment is created. 1 Halsbury's Laws of England, § 1078.

It can hardly be contended, however, that every "overt act" of interference with the property creates an implied obligation of bailment. Undoubtedly an "involuntary bailee "need not abandon the property, but he may, without incurring further liability, at least take steps to preserve and care for the property. As stated by Mr. Justice Mullan it is only in case the involuntary bailee shall exercise any dominion over the thing so bailed that he becomes as responsible as if he were a voluntary bailee. The exercise of dominion, as I understand it, necessarily involves some act inconsistent with the complete right of dominion of the real owner, at least to the extent that it would be wrongful unless performed by some person to whom the owner had transferred the right to possession. In other words, an implied contract of bailment with its consequent obligations arises only where a person in possession of the property of another does some act which is inconsistent with the view that he does not accept the possession which has been thrust upon him.

The "overt act " which it is claimed constituted an improper interference with or act of dominion over the plaintiffs' property consists of a delivery of the bond to a stranger who had no title to it. If the defendants had attempted to transfer to this stranger any title or right of possession of their own, then of course they could not claim that they had never accepted possession of the bond as bailees. They would then be on the horns of a dilemma, for they would have either denied the right of the true owner and thereby converted the property to their own use or would have exercised a right which was theirs only if they accepted the deposit of the bond left with them.

Appellate Term, First Department, January, 1922. [Vol. 117.

In the case of Hiort v. Bott, L. R. 9 Exch. 86, relied on for authority by Mr. Justice Mullan, the defendant had in fact attempted to transfer to a stranger his own ostensible title to the goods and he had no actual title unless he first accepted an attempted delivery of the goods by the true owner to himself. The defendant in that case had not received the barley into his possession but had received merely a delivery order which made the barley deliverable "to the order of consignor or consignee " and as pointed out by Bramwell, B., "if the defendant had done nothing at all it would have been delivered to the plaintiffs." In the language of Cleasby, B., " He had no duty to perform in relation to the goods, and was a mere stranger, except that by mistake he had been made consignee, and so had an ostensible title, and could dispose of the goods." Knowing that the ostensible title was vested in him only by mistake the defendant was induced by fraud to indorse the delivery order and thereby transfer to a third party the ostensible title to the barley.

The defendant could not indorse the delivery order unless he had title to the barley either in his own right or as agent for the true owner. He did not claim title in his own right, and if he had done so knowing that the ostensible title had been transferred to him only by mistake, such act would in itself have constituted a conversion. His act was lawful, therefore, only if he had accepted title as an agent. The fraud of the alleged broker induced him to believe that he had authority as agent of the true owner to transfer title, but he voluntarily assumed to act as agent of the owner and to accept title as such agent. By voluntarily doing an act which would be lawful only if he accepted title either in his own right or as agent of the owner, he was not in a position to say that possession of the property was thrust on him without his