It was agreed that the transaction is governed by the law of New York, where the contract was made. Both parties and the chancellor have adopted the meaning of "diligence" as given in In Re McCafferty's Will , 147 N.Y. Misc 179, 203; 264 N.Y.S. 38, 65 (1933) , namely, that defendants had the duty at least to use such effort as it would have been prudent to use in their own behalf if they had owned the receivables, or such effort as it would have been prudent for the plaintiffs to use if they had retained possession of them. The court below made basic findings that defendants used good faith and due diligence in fact and law to collect the 75% of the accounts that was realized, and these findings are amply supported by the evidence. We are therefore confronted with the familiar rule that the findings of the chancellor based on credibility of witnesses, supported by competent evidence, and approved by the court en banc will not be disturbed on appeal: Kees v. Green , 365 Pa. 368 , 75 A.2d 602 (1950) . Appellants argue that the act of the defendants were tantamount to a conversion, but a glance at the agreement, quoted above, shows that the "customers and other records and ledgers" were sold to defendants outright and hence became their property and were no longer capable of conversion by them. In Bradley v. Roe , 282 N.Y. 525 , 27 N.E.2d 35 ),
129 ALR 633 (1940) the court said: "Where a person is rightfully in possession of property, continued custody of the property and refusal to deliver on demand of the owner until the owner proves his right, constitutes no conversion." As for the debts apart from the paper record of them, these were choses in action and not subject to conversion. In Vogedes v. Beakes , 56 N.Y.S. 662 , 38 App. Div. 380 (1899) , the Court said: "A promissory note, a railroad bond, a certificate of stock, are doubtless the subjects of conversion, because by their seizure and their transfer to bona fide holders for value the owner may lose the thing in action which they represent. But neither the seizure of the plaintiff's books of account nor any notice served upon her debtors by the sheriff could in any manner affect her title to the claims . . . She has never lost a claim against her debtor." Plaintiffs complain of the defendants' delay in turning back records of the uncollected accounts. Under Paragraph 7 of the agreement plaintiffs bound themselves to keep hands off the collections before February 1, 1955, and there is nothing in the agreement requiring defendants to return anything on that date. It was pushed ahead to March 1st, as the Court found. Plaintiffs assert that there was no evidence that the extension was agreed to, but Exhibit P-4 is a telegram from plaintiffs to Gillin and reads: "Settlement of accounts receivable due Feb. 1, 1955, extended to Feb. 15 and further extended to March 1 is now due." If "extended " in the mouth of the objector does not mean agreed to by him, then language has lost its, savor.
- Spring '15
- Chancellor, Metropolitan, Gillin