Mills v. Mills — 23 N.Y. St. Rep. 604

Majority

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Angie F. Mills, as Administratrix, etc., Resp’t, v. Hiram P. Mills, App’lt.^[1]

(Court of Appeals,

Filed June 4, 1889.)

Headnote

1. Mortgage—Liability of mortgagee for proceeds—Statute of limitations.

Where the absolute title to certain lands was vested in a mortgagee as security for money loaned, with the intention that he might sell them and reimburse himself and pay over any surplus to the mortgagor, after he had been fully reimbursed, the proceeds of the lands which came to his hands were received by him for the use of the mortgagor and it was his duty at once to pay over such proceeds, and upon his failure so to do he was liable without any demand to suit for theii recovery, and in such case the statute of limitations begins to run from the day of the receipt of the money.

2. Same—Accounting—May be taken in action at law as well as in equity.

If an accounting was necessary to determine the amount due from him to the mortgagor, the account could be taken in an action at law as well as in an action in equity, and in whatever form the action was commenced, the legal rule of limitations would be applicable

3. Same—When mortgagee debtor for surplus after sale.

Where the relief asked for in the complaint was an accounting and a judgment for a sum of money, and no other relief was possible, when the mortgaged lands were sold, the mortgage being satisfied, the lien thereof did not attach to the moneys, but the mortgagee became a debtor for the surplus, and cannot therefore be treated as a mortgagee in possession.

4. Same—When mortgagee not trustee—Statute of limitations.

Nor can it be said that such a mortgagee is a trustee of the moneys received by him so as to prevent the statute of limitations from running in his favor until he repudiates the trust.

5. Practice—Section 410, Code Civ. Pro.—Application of.

Section 410 has no application to a case where no demand is necessary to entitle a plaintiff to maintain his action.

6. Executor de son tort—When not.

Where there is no wrongful interference by one with the estate of a decedent, but all the estate which he had or which came into his hands-came to him rightfully, and he simply became a debtor bound to account, - he can no more be treated as an executor de son tort than any other person who, in a lifetime of a decedent, had become his debtor for money had and received to and for his use.

This action was brought for an accounting by the defendant for moneys received by him on the sale of lands in

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Ohio and Illinois, and upon a certain mortgage upon lands in Ohio, alleged in the complaint to have been held by the defendant as security for money loaned by the defendant to his brother, plaintiff’s intestate. The answer denies the allegations of indebtedness and sets up the six years and ten years statutes of limitations.

Theodore Gf. Mills died February 10,1871, an inhabitant of the county of Livingston in this state. The plaintiff, his widow, was appointed his administratrix April 16, 1880,. and the action was commenced July 4, 1881.

The action was referred and tried before a referee; and he found, among other things, that on the 10th day of January, 1864, the defendant entered into a contract, in writing, with Theodore Gf. Mills, of which the following is a copy:

A contract made this 10th day of January, 1864, between H. P. Mills, of Mount Morris, N. Y., of the first ■part, and Theodore Gf. Mills, of Cleveland, Ohio, of the second part, which is as follows: Whereas, the said party of the second part is indebted to the said party of the first-part, in the sum of three thousand four hundred thirty-four dollars and sixty-three cents ($3434.63), for which said sum, the said Theodore Gf. Mills, has, this day, executed and delivered his promissory note to the said party of the first part:

The said party of the first part hereby agrees that, on the payment of said note and interest, and any sums the said party of the first part may hereafter loan or advance to said party of the second part, with all cost, expenses, taxes, insurance, etc., that he may incur, or be called upon to pay, in looking after and taking care of the following: described pieces of property, he will convey by good and. sufficient warranty deed, as against hi's own acts, to the' said party of the second part, all the lands described in deed, from Theodore Gf. Mills to Hiram P. Mills, under date-of February 2, 1860, and recorded February 6, 1860, in Union county records, state of Ohio, volume 23, pages 6- and 7, excepting from above, lands contracted,por deeded to other parties by me since above was deeded to me; also another certain piece or parcel of land, situate in the state of Illinois, county of Cook, and described in deed from T. Gf. Mills to Hiram P. Mills, under date of July 25, 1860, recorded July 28, 1860, in the county records of said Cook county, volume 201 of deeds, page 128; also another piece or parcel of land, situated in Cuyahoga county, state of Ohio, deeded by Richard Gf. Huston and others, by master commissioner, to Hiram P. Mills, on the 20th day of May,. 1861, and recorded November 20, 1861, in Cuyahoga county records, volume 112, pages 415 and 416: also all the interest

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I have, or may have, in a certain mortgage executed by J. 0. Evans to Theodore Gr. Mills, under date of--, and recorded in--. Said mortgage was assigned by Theodore Gr. Mills to Hiram P. Mills, and was given to secure the payment of several promissory notes to said T. G-. Mills, made by J. 0. Evans. The property described in said mortgage is situated in Delaware, Ohio, reserving all claims or interest that Theodora J. E. Mills (daughter of T. Gr. Mills), for whom I am acting as guardian, may have, or has, in all the above-described pieces or parcels of lands referred to in this contract. HIRAM P. MILLS.

That Theodore Gr. Mills became insane in November, 1867, and continued in that condition, incompetent to do any business, until his death; that in addition to the indebtedness mentioned in the contract, Theodore Gr. became further indebt edito the defendant for divers sums of money loaned and advanced to him, and paid, laid out and expended for him and about the property so held by the defendant, and that the defendant received, on account of the mortgage and the lands so held by him, certain large sums ■of money; that the lands were all sold and conveyed in the lifetime of Theodore G-., and all the proceeds thereof were received by the defendant from time to time, before his ■death, except the sum of $1,137.50, which he received December 30, 1872; that after crediting the defendant with all his just claims on account of moneys advanced and laid out and expended, there was due from him on account of the moneys received by him on the sale of the lands, and upon the mortgage, the sum of $5,137.50, and interest, amounting in all to $6,717.27, for which sum he ordered judgment,

E. A. Nash, for app’lt; James Wood, for resp’t.

The sole question for our determination is, whether the plaintiff’s cause of action was barred by the •statute of limitations, and we are of opinion that it clearly was.

The absolute title to the lands was vested in the defendant, evidently with the intention that he might sell them .and reimburse himself and pay over any surplus to his brother. Long before his brother’s death, he had sold all the lands and received more than sufficient for his reimbursement. After the sale of the lands, he ceased to be mortgagee. He must be deemed to have sold the lands for the satisfaction of his mortgage, and it was satisfied. So far as he received the proceeds of the sales, they were applicable, and must be deemed to have been applied for his reimbursement. After he had been fully reimbursed, the proceeds of the lands which came to his hands were re

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ceived by him to and for the use of his brother, and it was his duty at once to pay over such surplus proceeds to his brother, and upon his failure so to do, he was liable without any demand to suit for their recovery.

The six years’ statute of limitations is applicable to such a case. Code, § 382.

When money received by one to and for the use of another under circumstances that it is his duty at once to pay it over, then an action for money had and received may be brought to recover it without any demand; and, in such a case, the statute of limitations begins to run from the day of the receipt of the money. Stacy v. Graham, 14 N. Y., 492 ; In the Matter of Cole, 34 Hun, 320 ; Compton v. Elliott, 48 N. Y. Supr. Ct. R., 211; Diefenthaler v„ Mayor, etc., 111 N. Y., 331 ; 19 N. Y. State Rep., 931.

The defendant must always have known the amount of his loans and advances to his brother, and it was his duty to keep an account of his expenditures on account of the property transferred to him, and, hence, he could tell when he had been fully reimbursed, and the time came when he received moneys to and for the use of his brother under the obligation to make payment of them to him. Even if an accounting was necessary to determine the amount due from him to his brother, the account could be taken in an action at law as well as in an action in equity, and in whatever form the action was commenced, the legal rule of limitations would be applicable. Rundle v. Allison, 34 N. Y., 180 ; Carr v. Thompson, 87 id., 160; In the Matter of the Accounting of Neilley, 95 id., 382.

All the relief asked for in the complaint is an accounting- and a judgment for a sum of money, and no other relief' was needed or possible upon the facts established. This, was in no sense an action to redeem, as there was no mortgage and nothing to redeem. Morris v. Budlong, 78 N. Y., 543 .

When the lands were sold, the mortgage being .satisfied,, the lien thereof did not attach to the moneys, but the defendant became a debtor for the surplus. He cannot, therefore, be treated as a mortgagee in possession, and the cases of Miner v. Beekman ( 50 N. Y., 337 ), and Hubbell v. Moulson ( 53 id., 225), are not applicable.

But it is said that the defendant was in some sense a trustee of the moneys received by him, and hence that the statute of limitations could not begin to run in his favor until he repudiated the trust. But the defendant was not a trustee in the sense contended for. He had received money belonging to another, and became a debtor for the same, and he is in no other sense a trustee than every one is who receives money to and for the use of another.

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There was no actual, express trust as to these moneys created by the act of the parties. It is certainly not true that every mortgagee is a trustee of an express trust, and the relation of trustee and beneficiary does not exist between mortgagee and mortgagor. If the defendant was in any sense a trustee of the moneys received by him, it was simply an implied trust which the law would raise for purposes of justice, and as to the liability growing out of such a trust, the ordinary rules of limitations apply. Kane v. Bloodgood, 7 John. Ch., 90; hammer v. Stoddard, 103 N. Y., 672 .

Section 410 of the Code has no application to this case, because if we are right in what has already been said, no demand was necessary to entitle the plaintiff to maintain this action.

The novel claim is made on behalf of the plaintiff that the defendant may be held as executor de' son tort of _ his brother’s estate, and hence that the statute of limitations must be applied as if he were rightfully and actually executor, with his brother’s estate in his hands.

The obvious answer to this claim is twofold: _ (1) No such theory of liability is mentioned in the complaint, and no mention was made of it upon the trial or in the findings of the referee; (2) an executor de son tort is one who inter-meddles with the estate of a decedent after his death, and does wrongfully such acts as a rightful executor might do. Williams on Executors, § 257. Here there was no wrongful interference by the defendant with the estate of his brother after his death. All the estate which he had, or which came into his hands, came to him rightfully, and he .simply became a debtor bound to account. He can no more be treated as an executor de son tort than any person who, in the life-time of a decedent, has become his debtor for money had and received to and for his use.

The plaintiff cannot hold him as an executor de son tort because he assumed to make a settlement with the only child ■ of his brother, and at the same time repudiate that settlement as wholly unauthorized and null.

We, therefore, see no way to avoid the conclusion that the plaintiff’s cause of action was barred by the statute of limitations, and the judgment should be reversed and a new trial granted, costs to abide event.

All concur, except Huger, Ch. J., and Andrews, J., absent.