## Facts

- Plaintiffs and defendants were stock-exchange broker firms.
- Plaintiffs agreed to sell defendants a \$1,000 Oregon Short Line Railroad bond but, due to a third party’s mistake, obtained an Oregon & California Railroad bond and mistakenly delivered it to defendants.
- Plaintiffs’ messenger delivered an envelope to defendants’ office through a delivery slot; the envelope contained the wrong bond and a slip describing the intended (Oregon Short Line) bond.
- Defendants’ personnel examined the contents and noticed the bond did not match the description on the slip.
- A member of defendants’ firm opened a window to the delivery area and instructed a messenger outside to make the slip match the bond; an unidentified boy (not plaintiffs’ messenger) took the bond and left.
- The unidentified messenger did not return the bond; plaintiffs sued defendants for conversion based on defendants’ transfer of the bond to the wrong person.

## Issues

1. Whether a party who receives property by mistake becomes an involuntary bailee with an absolute duty to return it, such that misdelivery constitutes conversion.
2. Whether defendants’ handover of the bond to an unidentified messenger was a wrongful exercise of dominion sufficient to support conversion liability.

## Decision

- The Municipal Court entered judgment for plaintiffs on a conversion theory.
- The Appellate Term affirmed, holding that once an involuntary bailee exercises dominion by attempting redelivery, misdelivery results in conversion liability.
- The Appellate Division reversed and ordered judgment for defendants dismissing the complaint, adopting the Appellate Term dissent.

## Legal Principles

- Conversion requires an unauthorized act that interferes with the owner’s superior right of possession; mere receipt of property by mistake does not alone establish conversion.
- An “involuntary bailee” analysis does not automatically impose strict liability for misdelivery; liability turns on whether the recipient’s conduct amounts to a wrongful exercise of dominion under the circumstances.
- A mistaken, commercially routine attempt to return misdelivered property, without a claim of title or intent to appropriate the property, may be insufficient to constitute conversion.

## Conclusion

The final judgment held defendants not liable for conversion where they received the bond by mistake and, in the trading-office delivery setting, mistakenly handed it to a messenger believed to be connected to the sender; strict, absolute misdelivery liability was rejected on these facts.


Cowen v. Pressprich, 202 A.D. 796, 194 N.Y.S. 926 (1st Dep’t 1922)