Angel v. Smith — 6 A.D. 251

Majority

p. 251

Frederick W. Angel, as Sole Trustee, etc., of Mary L. Angel, and Others, Only Heirs and Next of Kin and Devisees under the Last Will and Testament of William H. Angel, Deceased, and Sole Owners and Holders of the Entire Capital Stock of The Bank of Watertown, Respondent, v. Adaline A. Smith, as Administratrix, etc., of Charles D. Blish, Deceased, Appellant, Impleaded with The American Surety Company.

Headnote

Judgment against a common debtor in favor of a claimant who has assigned his claim pendente lite— the assignee may sue his assignor a/nd recover the amount receivedC by him—express trust under the Oode of Givil Procedure.

In an action for money had and received, brought by the plaintiff as sole trustee of the persons interested in the estate of William H. Angel, deceased, it appeared. , that the defendant Smith’s intestate, one Charles. D. Blish, acquired an interest in a contract made in 1861, for the performance of certain work for the city of New York. Subsequently an action was brought upon said contract to recover for a breach and also for part performance thereof, and pending the action Blish. , transferred his interest in the subject-matter thereof to Angel.

Although Angel notified the city of New York of his interest in the contract, her was never made a party to the action against the city, that being prosecuted, so-far as his interest was concerned, solely in the name of Blish and his-representatives.

After a litigation extending over thirty years the action was settled and the defendant, as the administrator of Angel, received the sum which constituted the subject-matter of the action.

The complaint, among other things, alleged that the defendant Smith received the money in question and deposited the samé, to be paid over to whomsoever the same might justly belong, and it also alleged that the parties to the suit-in its several stages of litigation had notice and knowledge that the interest of Blish had been assigned by him to Angel, and that any recovery thereon would inure- to the benefit of Angel.

Held, that the action could be maintained;

That it presented an exception to" the rule, that where there are two claimants to-a fund of which .the common debtor had notice, a voluntary payment to one, even though that one be the wrongful claimant, gives no right of action in. favor of the rightful claimant against the party who receives the money;

That under the allegations of the complaint the plaintiff had a right to show that, in fact, the litigation carried on by Blish and his successors was carried on by them for the benefit of and as trustees for Angel;

Semble-, as it appeared from the proofs that the existence of the assignment, so far as Blish and his representatives were concerned, must have been known while the action against the city of New York was pending, that as Angel did not,

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ask to be made a party, and as Blish continued to prosecute the suit as it then existed, the payment of the judgment operated to discharge the city of New York from any liability to Angel; '

That, in any aspect of the question, the continued "prosecution of the action by Blish after the assignment, constituted Blish a trustee for Angel’s benefit, and that whatever he received would be impressed with a trust to the extent of "Angel’s interest.

Appeal by the defendant, Adalirie A. Smith, as administratrix, etc., of Charles D. Blish, deceased, from an order of the Supreme Court, made at the Kings County Special Term and entered in the •office of the clerk of the county of Kings on the 16th day of May, 1896, continuing an injunction heretofore granted which enjoined the defendants and their attorneys from distributing-certain funds under the" control of Adaline A. Smith, as administratrix, etc., of Charles D. Blish, deceased.

This action, which was one for money had and received, was brought by the plaintiff as sole trustee of the persons interested in the estate of one William H. Angel, deceased, to recover a sum received by the defendant Smith as administratrix of Charles D. Blish,, deceased, to which the plaintiff claimed to be entitled.

Howard A. Taylor and Albert Sprague Bard, for the appellant.

David P. Hall, for the respondent.

The record upon this appeal shows that one Hackley, in 1861, ■entered into a contract for the performance of certain work for the ■city of New York. Subsequently Charles I). Blish, the appellant’s intestate, acquired an interest in the contract, which interest Blish thereafter assigned to William H. Angel, now deceased. The present plaintiff represents" the héirs and next of kin of said Angel .and his devisees under his last will and testament. An action was brought upon the said contract against the city of New York to recover damages for a breach thereof, and also to .recover certain sums for part performance of the same. After thirty years of litigation-, a compromise judgment was entered against the city, and also adjudging the specific sums to which each party in interest under the contract was entitled, by virtue of which there was awarded to the appellant the sum of $4,902.38, which she has

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received and now holds, the same being the fund which the injunction restrains of distribution.

It appears that, after the assignment of the one-fourth interest to-Angel, he caused to'be served upon the city of Hew York a written, notice of his right and interest in the contract. Angel was never-made a party to the suit against the city, but so far as his interest was concerned the same was prosecuted in the name of Blish and his representatives, and neither Angel or his representatives appear upon the record as a party, or as having any interest in the litigation or its subject-matter. And the allegation is made in the affidavit of the attorney for Blish and. his representatives that the parties to the record had no notice of the assignment to Angel during the litiga^tion; and that such claim was not made upon the final compromise when the money was paid over to the appellant.

Upon this state of facts the appellant seeks to invoke the principle of law that where there are two claimants to a fund of which the common debtor has notice, voluntary payment to one, even though it be the wrongful claimant, gives no right of action in favor of the rightful claimant against the party who receives the money. This rule has been repeatedly recognized by the courts of this State, and we have recently had occasion to reassert the doctrine. (Reynolds v. Ætna Life Ins. Co., see post, page 254.)

There are elements in this case which tend to bring it within the rule. But we think the complete answer to the position is found in the allegation of the complaint, which, for the purposes of this appeal, we must treat as the fact. The tenth allegation of the complaint is that the defendant Smith received the money and deposited the same, to be .paid over to whomsoever the same may justly belong. And the eleventh allegation is that the parties to the suit, in its several stages of litigation, had notice and knowledge that the interest of Blish had been assigned by him to Angel, and that any recovery thereon would inure, to the benefit of said Angel and his successors in interest. . Criticism is made of these allegations, but we think they are sufficient to permit of proof to show that in fact the litigation carried on by Blish and his successors was for the benefit of and as trustees for Angel and his successors in interest. In this view of the matter the case is brought within the exception to the rule and authorizes the maintenance of the action. (Patrick v. Metcalf, 37 N. Y. 332 et seq.)

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In addition tó this it appears from the complaint that the assignment from Blish to Angel was made after the commencement, of "the action against the city, as the action ivas begun about the 12th •day of January, 1864, and the assignment was not made until about "the 15th day of January, 1867. The existence of the assignment, .therefore, so far as Blish and his representatives are concerned, must Rave been known while the action was pending. • 'It is quite probable, therefore,- that as Angel did not ask to be made a party to the suit, and as Blish continued its prosecution as it then existed, when judgment was obtained and paid, it operated' as a discharge to the •city-from any liability to Angel or his successors. But in whatever ■aspect this question be viewed the continued prosecution of the action by Blish after the assignment constituted the latter a trustee for Angel’s benefit, and whatever was received thereunder Blish would receive impressed with a trust to the extent of Angel’s interest. (Code Civ. Proc. § 449; Madison Square Bank v. Pierce, 62 Hun, 493 .)

It, therefore, follows that the order appealed from should be ■ affirmed and the injunction continued until tire trial of the action, with ten dollars costs and disbursements.

All concurred, except Pratt, J., not sitting.

• Order affirmed, with ten dollars costs and disbursements.