[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 405
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 406 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 408 Under the contract from James R. Shaver to William T. Kilmer, the latter at once took possession of lots 10 and 11, and on the payment, to Shaver, of installments, in all amounting to $1,500, was to receive from him a quit-claim deed of lot 10, and a good and sufficient deed of lot 11. This contract was assigned by Shaver to the defendant's testator, A.C. Edgerton, and he collected from Kilmer $200, part of the money due thereon. Afterward Kilmer transferred his interest in the contract to one John Hodge, who paid Edgerton at different times, and in all the balance of the money called for by the contract, and then demanded of him a deed or repayment of the money so paid, and being refused, assigned to Youmans all rights of action which had accrued to him against Edgerton. Kilmer also assigned to him any claim which he might have growing out of these matters. One Knapp was at all times the legal owner of lot 11, and Shaver held under a land contract from him. The plaintiff brought this action for the moneys paid by Hodge and Kilmer to Edgerton. There has been no express promise by Edgerton, and the action, if supported at all, must be founded on an implied one. I cannot find even primafacie evidence of this. The assignment by Shaver to Edgerton did not, nor did it purport *Page 410 to, transfer any right in the land, or impose upon him any obligation. It was a mere authority to receive the moneys called for by its terms and apply them to his own use. With notice of this limitation, the party paying the money is chargeable. The plaintiff's case is, therefore, not different from what it would have been, if, as each payment became due, Shaver had given, for value, an order on the vendee to pay the same to Edgerton, or an assignment in form of each separate installment. In neither case could the debtor, if he accepted the order, or assented to the assignment, set up in defense of payment any equity between himself and the assignor, nor after payment recover back the money upon showing even such equity as would have been a defense as between himself and the assignor. Nor is there any equity in the plaintiff's favor. Kilmer's promise to pay Shaver was in consideration of Shaver's promise to him, and the actual possession of the land. Hodge paid in consequence of a consideration moving from Kilmer, and Shaver's assignment of Kilmer's promise, was fully paid for by Edgerton. The plaintiff relies upon the doctrine that an action may be maintained against an agent who receives money to which his principal has no right, but if that doctrine applies at all, its qualification protects the defendant. The qualification is that the money is still in the agent's hands, not yet paid over to the principal. (Holland v. Russell, 1 Best Smith, 424; Zychlinski v. Maltby, 14 C.B. [N.S.] 322.) Here the money was paid by Edgerton before it was received from the plaintiff's assignors, and they paid Edgerton because he had acquired the right to it, not as agent, but as owner. It is also urged that the assignee of Shaver obtained no better right to receive the money than Shaver had. But his right in this respect was good enough. The promise to pay the installment was not induced by any fraud, nor was it dependent upon a promise to give a title. His inability to do so now is the only equity relied upon by the plaintiff, but that had not arisen at the time of the assignment, nor could it have been insisted upon when the installments matured, nor at the time they were in fact paid. Shaver himself might have *Page 411 sued for each as it came due and succeeded, although had he waited until the whole purchase-money was due, the case might have been different. (Beecher v. Conradt, 13 N.Y. 108.) The defendant stood in his place, and although subject to the same equities as his assignor, they are those only which were available at the time of the assignment (Myers v. Davis,22 N.Y. 489), and even these might be released or waived by the person entitled to them, either expressly or by implication arising from his conduct; and although there has been here no release in words, the acts of the plaintiff's assignor are equally conclusive. Kilmer assented to the assignment by Shaver, and both Kilmer and Hodge made promise of payment, and then payment to the defendant of the moneys which have been allowed by the referee against him. There is no principle upon which the recovery can stand, and the only case cited by the appellant, which at all sustains it, is Smith v. McCluskey (45 Barb. 610). That case, however, is not only opposed to the views already expressed, but the judgment now before us shows that it has not been followed, even by the court which made it (16 Hun, 28), and upon the point now involved, we think, the last stands upon a better interpretation of the law. It is contended, however, by the appellant that the referee's finding may be supported upon the ground that at the time of payment, all parties were ignorant that the title was in Knapp and not in Shaver. But this is not material. This mistake did not create a supposed legal obligation. The obligation was expressed in the contract. If Shaver and not Knapp had the title, that fact would in no respect have given Edgerton a right against Kilmer or Hodge, nor would it have added to their duty to observe the terms of the contract. It might have made it more desirable for them to do so, but that is not sufficient. (Aiken v. Short, 1 H. N. 210.) Upon the facts found by the referee, the plaintiff might have an action against Shaver for breach of contract, or by suit for specific performance, but none against Edgerton, either upon legal or equitable grounds; the money which he got was actually due to him, and there can be no obligation to refund it. *Page 412
It follows that the judgment entered upon the report of the referee was properly reversed — that the order of reversal and for a new trial should be affirmed, and by reason of the plaintiff's stipulation, the defendant have judgment absolute, dismissing the complaint, with costs.
All concur, except EARL, J., dissenting.
Order affirmed and judgment accordingly.