[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 107 There are but two questions that require consideration on this appeal: 1. Whether the court properly held that the six years' Statute of Limitations was applicable in this case; and, 2. Whether it properly deducted from the railroad taxes collected each year the portion thereof which was paid over to the town.
In examining the first question, it is to be observed that there were two distinct and independent remedies for the enforcement of the rights which are conferred by the Railroad Act. One was by the special statutory proceeding provided for by that act. The other was by an action for money had and received to recover the taxes misappropriated by the county.
Where the special proceeding is the remedy employed by which a taxpayer seeks to compel the treasurer to perform the duty with which he is charged, and there is no proof that any part of the money received by the county from such taxes has been used, but the fund remains in the county treasury, the duty of the treasurer is a continuing one, and the Statute of Limitations does not apply. (Spaulding v. Arnold, 125 N.Y. 194.)
But where the county treasurer, instead of applying the money thus received to the payment or redemption of the bonds of the town, under the direction of the board of supervisors, devotes it to the payment of other claims, an action for money had and received is maintainable in behalf of the town against the county to recover the money so misappropriated. In such a case the cause of action arises when the misappropriation is made. The Statute of Limitations then begins to run, and an action brought more than six years thereafter is barred. (Strough v. Supervisors,119 N.Y. 212; Crowninshield v. Supervisors, 124 N.Y. 583,588; People ex rel. v. Supervisors, 136 N.Y. 281, 286;Woods v. Supervisors, Id. 403, 409; Kilbourne v.Supervisors, 137 N.Y. 170, 177.)
The complaint shows that the primary and chief purpose of this action by the town was to recover of the county the *Page 109 moneys which had been collected from the railroad company in the town, paid to the county treasurer, and appropriated to other purposes than those specified in the statute. The basis of this action was the misappropriation of that fund, and was to recover the money thus misapplied. The fact that the complaint demanded as additional relief that, after the collection of the amount, it should be applied in the manner provided by the statute, does not change the character of the action. Nor does the fact that the treasurer was made a party in any way alter the situation. He was not a necessary party, so far as the action was for the recovery of the money received and appropriated to county purposes, which was its main object. He was made a party only for a subsidiary or supplementary purpose. The relief demanded against him was that, after the amount had been recovered by judgment and paid into his hands, he should dispose of it as the statute required. Obviously, this was an action for money had and received by the county to which the town was entitled.
The findings of the court and the evidence are to the effect that the taxes thus collected were paid out each year by the county treasurer for other purposes in pursuance of the order and direction of the board of supervisors. This case is unlike theKilbourne case, as in that case there was no proof that the money was misappropriated more than six years before the commencement of the action.
The distinction between a special proceeding under the Railroad Act and an action for money had and received, as affected by the Statute of Limitations, is clearly pointed out in the decisions of this court, to which we have already referred. Thus, in theSpaulding case, which was a proceeding by a taxpayer under the statute, the funds were paid into the county treasury and remained there to the time of the trial, and the court properly held that there was a continuing duty resting upon the county treasurer to make the application provided for by the statute; that that duty continued until it was discharged, and that in such a case the Statute of Limitations was not a bar. There is a clear distinction between such a *Page 110 case and the case at bar. This was an action for money had and received, where the treasurer, instead of applying the money to the purpose for which it was intended, or retaining it in the treasury, misappropriated it by paying the debts of the county under the direction of the board of supervisors. Under all the authorities, from that moment this cause of action arose in favor of the town, and the Statute of Limitations commenced to run. Therefore, the appellant's contention that, although no portion of the fund remained in the hands of the treasurer, the county is still liable, and the Statute of Limitations has no application, cannot be sustained, as it is adverse to the decisions of this court, which are decisive of the question.
This leaves for consideration the question whether the plaintiff was entitled to recover that portion of the taxes which was retained by, or paid over to, the town for its own use and benefit. In a special proceeding by a taxpayer under the Railroad Act to compel a county treasurer to comply with its provisions, no such allowance could be made. (Clark v. Sheldon (134 N.Y. 333). But, in an action for money had and received, it would be quite paradoxical to hold that the plaintiff could recover of the defendant money it had never had, but which the plaintiff had and used for its own purposes.
There is a clear and obvious distinction in this respect between a proceeding instituted under the statute by a taxpayer to compel a county treasurer to properly invest the money which has come into his hands from taxes paid by a railroad company and a case where an action is brought by a town against a county for money had and received. The former is a mandatory proceeding authorized by statute to compel a public officer to perform a ministerial duty imposed upon him by law. To such a proceeding neither the town nor the county is a party. Consequently the rights and equities existing between them are not at issue, and cannot be inquired into. But, where the action is for money had and received, the rights between the town and county are involved, and the equities existing between them may be determined. *Page 111 In such a case the town is entitled to recover only such moneys as in equity and good conscience belong to it.
This distinction was clearly recognized by this court inClark v. Sheldon (supra), where it in effect held that if the case then under consideration, which was a proceeding under the statute, was to be controlled by the principles applicable to an action between a town and county, the doctrine contended for by the appellant in this case could not be sustained. This question did not arise in the case of Ackerson v. Supervisors (72 Hun, 616), as there the court expressly found that all of the railroad taxes paid in each of the years for which the plaintiff sought to recover were, by the direction of the defendant, appropriated to the payment of the liabilities of the county, while in the case at bar it was found that a portion of the amount sought to be recovered was retained by or paid to the town and not appropriated to the use of the county. We think it must be held, both upon principle and authority, that the appellant is not entitled to recover of the county any portion of the taxes paid by the railroad corporation which were received by the town, or of which it had the benefit. The principle upon which an action like this is maintained is that the defendant has money in its hands which equitably belongs to the plaintiff. (Roberts v.Ely, 113 N.Y. 128, 131; Chapman v. Forbes, 123 N.Y. 532,537.) Obviously, no such right of action can exist where the money sought to be recovered has been already paid to the party claiming it.
We are also of the opinion that the trial court properly held that the plaintiff was not entitled to recover for the overvaluation of the property of the town.
The judgment of the General Term was right, and should be affirmed.
All concur, except GRAY, J., absent.
Judgment affirmed. *Page 112