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Roberts v. Ely, 113 N. Y., 128.

3 that it had so insured the tea and rendered them an account charging the premium thereon as paid.

III. That subsequently (about nine years before suit] a specified part of the tea was destroyed by fire in the custody of the company.

IV. That the total value of all the tea destroyed, including that of G. and the plaintiff, and thus insured, was about $78,000, of which about one-seventh belonged to G. and the plaintiff.

That the company settled with the decedent for all the tea de4 stroyed, including the tea of G. and the plaintiff; and he, about

eight years before suit, received, by reason of the destruction of their part of the tea, about $8,000, and was instructed to account therefor to G. and the plaintiff, the exact amount thus paid being unknown to plaintiff.

V. That the testator, instead of paying over to G. and the plaintiff their share of the insurance moneys, wrongfully appropriated it to his own use, in fraud of their rights.

After alleging death and the appointment of defendants as the executors, and assignment to plaintiff by G. of all his claim, the 5

complaint alleged demand made by him upon the defendants for an accounting and for payment of the sum to be found due.

VI. That the fact of such wrongful appropriation was unknown to plaintiff or G. until a few months before the commencement of the action.

Wherefore plaintiff demanded judgment for an accounting, and that the defendants pay over the amount to be found due with interest from the time the testator received the money.


The answer set up, among other things, the statute of limitations by alleging “that this action was not commenced within six years after the alleged cause of action alleged in the complaint had accrued.”

At the trial the complaint was dismissed.

The Supreme Court at General Term affirmed judgment for defendants, and plaintiff appealed.

Roberts v. Ely, 113 N. Y., 128.

The Court of Appeals affirmed the judgment.

7 ANDREWS, J. [after stating the facts]: Upon all the circumstances the plaintiff insists that when the insurance money was paid to Ely he took it, impressed with a trust in favor of Geiger & Co. to the extent of their interest in the teas destroyed by the fire, as represented in the fund received, and was equitably bound to account to Geiger & Co. for their equitable interest.

Assuming that the plaintiff is right in his construction of the facts, the case falls within the familiar doctrine that money in the hands of one person, to which another is equitably entitled, may be recovered in a common law action by the equitable owner upon an implied promise arising from the duty of the person in possession to account for and pay over the same to the person beneficially entitled. The action for money had and received to the use of another is the form in which courts of common law enforce the equitable obligation. The scope of this remedy has been gradually extended to embrace many cases which were originally cognizable only in courts of equity. Whenever one person has in his possession money which he cannot conscientiously retain from another, the latter may recover it in this form 9 of action, subject to the restriction that the mode of trial and the relief which can be given in a legal action are adapted to the exigencies of the particular case, and that the transaction is capable of adjustment by that procedure, without prejudice to the interests of third persons. No privity of contract between the parties is required, except that which results from the circumstances. (Mason o. Waite, 17 Mass., 560.) The right on the one side, and the correlative duty of the other, create the necessary privity, and justify the implication of a promise by the de

10 fendant to do that which justice and equity require. It is immaterial, also, whether the original possession of the money by the defendant was rightful or wrongful. It is sufficient that the duty exists on his part, created by the circumstances, to account for and pay it over to the plaintiff.

Nor is this form of action excluded, because in a general sense there is a relation of trust between the parties arising out of the transaction. There are many cases of trust cognizable only in a court of equity. The cases of express trusts of property are

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11 generally of this kind. The duty of the trustee to the cestui que

trust, to perform the trust and to account according to its terms and conditions, is as a general rule enforceable only in an equitable action. The necessity of taking an account, the frequent complexity of details, the separate and varied interests often affected, and the necessity of molding the relief to suit the circumstances, render the procedure of courts of equity peculiarly suitable in the administration of formal trusts, and in many cases indispensable to the ascertainment and enforcement of the rights

and obligations of the parties. But the fact that money in the 12

hands of one person is impressed with a trust in favor of another, or that the relation between them has a trust character, does not, ipso facto, exclude the jurisdiction of courts of law. The general rule that trusts are cognizable in equity and are enforceable only in an equitable action, is subject to many exceptions, "as,

, for instance, cases of bailments, and that larger class of cases where the action for money had and received for another's use is maintained ex aequo et bono." (Story's Eq. Jur., $ 60; Comstock,

J., Lawrence o. Fox, 20 N. Y., 278.) 13 The present case falls within the exception. Upon the plaint

iff's theory of the facts, Geiger & Co. were the equitable owners of a pro rata part of the insurance money received by Fly. That firm and Ely were alone interested in the question, as it is conceded that Ely was entitled to all the money received, subject only to the claim of Geiger & Co. The only accounting required was such as was necessary to ascertain the extent of the interest of Geiger & Co., and that depended upon simple facts as readily ascertainable in a legal as in an equitable action. The

case, therefore, presented a cause of action, upon a liability im14

plied by law, and it was subject to the limitation of six years, prescribed by section 91 of the Code of Procedure, in force when the cause of action arose. The money was paid to Ely in 1871, and the facts were known to Geiger & Co. at or soon after that date. The action was commenced in 1881. Assuming that an equitable action could be brought to enforce the liability claimed, it would still be subject to the limitation of six

years. (Matter of Neilley, 95 N. Y., 390.) The plaintiff cannot avoid the application of the statute by treating the actual appropriation

Chapman v. Forbes, 123 N. Y., 532.

of the money by Ely in 1874 as the cause of action. The right 15 of Geiger & Co. to recover the money was perfect from the time of its actual receipt by Ely in 1871. (Lillie v. Hoyt, 5 Hill, 395.)

The judgment should be affirmed.
All the judges concurred.
Judgment affirmed.


New York Court of Appeals, 1890.

[Reported in 123 N. Y., 532; rev'g 56 Hun, 646.]

1. An action for money had and received, even when founded upon

equitable principles, is an action of a common law nature, and in no respect a suit in equity, whether it depends upon a promise to pay the money to plaintiff or on the fact that the money came to defendant from such source and under such circumstances that in equity he

ought to pay it over. 2. The plaintiff in an action of a common law nature cannot be compelled

upon the defendant's application to bring in, as additional parties defendant, third persons who claim the same moneys from him adversely to plaintiff.

The following statement of the substance of the complaint 1 gives such allegations as are essential to the questions raised :

Plaintiff sued as executor of Aurelia Palmer, who, before her death, had been induced by fraud to part with property of hers, and who, on suing to recover it, had compromised on the payment of $2,500 to her attorney, one Breen. That the attorney Breen was insolvent and carried off the money, and that Breen's brother assisted or connived in the wrong. That the defendant in the present action, Forbes, acted as counsel for said Breen when the latter was indicted for larceny of the money, and also acted as attorney for Aurelia Palmer, the plaintiff's testatrix, before her death. That by defendant's suggestion and consent, given while so acting as the decedent's attorney, the decedent gave plaintiff a deed of trust of her property, and a full power of attorney to manage all her affairs and collect all claims.

Chapman v. Forbes, 123 N. Y., 532.




VII. “ That after the said Breen [the former attorney] was indicted, and prior to plaintiff's appointment as such trustee, and on or about March 1, 1883, the defendant herein received from said Breen (the former attorney) either personally or through his said brother (naming him] acting for said [former attorney] the sum of $1,200, which said sum was part of the money belonging to the deceased, and converted as aforesaid by said Breen [the former attorney) and that said money was paid to and received by the defendant herein, for said deceased, to whom it rightfully belonged.”

[Then followed allegations in the usual form, of the death, the will and the letters issued to plaintiff.]

X. “That plaintiff has duly demanded the sum of $1,200 from the defendant, both as her trustee, in conformity with the powers vested in him by said deed of trust and power of attorney above referred to, which authority was known to defendant at the time of said demand, and also as executor prior to the commencement of this suit; but the defendant has refused to pay the same to plaintiff, and still wrongfully, and in fraud of the rights of plaintiff and said deceased, retains the said sum of $1,200 and the whole thereof.

“WHEREFORE, The plaintiff demands judgment against the defendant for the sum of $1,200, with interest thereon from March 1, 1883, and costs."

The answer of defendant denied the material allegations of receipt to the use of plaintiff's testatrix, and of demand, conversion, etc. It also alleged that he received the money from T. H. Breen, as the money of said T. H. Breen, and held it, as his agent, to be paid over only on the performance, on the decedent's part, of certain conditions imposed by T. H. Breen, which conditions were not performed.

That upon the refusal to perform such conditions defendant, by agreement with T. H. Breen, acquired a lien upon the money for certain services performed by him, and that he still holds and claims such lien against such funds.

That subsequently T. H. Breen made a general assignment of all his property to one Frederick Williams for the benetit of his



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