Cohen v. Wagar

Patterson, J. (dissenting):

The plaintiff, a trustee in bankruptcy of the estate of John T. Lee, sued the defendant, as president of the Consolidated Stock and Petroleum Exchange of New York, and in his complaint alleged that a petition in bankruptcy was filed by creditors of the said Lee in the United States District Court, and that on September 23, 1901, Lee was adjudicated a bankrupt and the plaintiff duly appointed his trustee in bankruptcy, and duly qualified as such. The complaint also alleges that the Consolidated Stock and Petroleum Exchange of New York is an unincorporated association, consisting of moré than seven persons,- and that Mortimer H. Wagar is the president thereof. It then alleges, on information and belief, that on May 9, 1901, Lee made an assignment for the benefit of his creditors to George Buckmaster, who accepted the trust; and from, and at all times between May 9, 1901, and the date of the filing- of the petition in bankruptcy (August 27, 1901) Lee was insolvent, of all which the said association had knowledge; that subsequent to May 9, 1901, and within four months prior to the filing of the petition in bankruptcy against Lee, the Consolidated Stock and *258Petroleum Exchange, by or through its officers, collected, had and received from divers persons, firms and corporations then indebted to. Lee, certain sums of money, which sums were collected, had and received to and, for.the use of the estate of John T. Lee, and which rightfully belonged to said estate, and now belongs to the plaintiff as trustee thereof. . A further allegation is made “ that heretofore and before the commencement of this action, the aforesaid several sums and the total amount thereof were duly demanded by the plaintiff from said association, -and no part thereof has been paid or turned over to the- plaintiff.” The defendant demurred to this complaint on the ground that it did not state facts'-sufficient to constitute a cause of action, the principal alleged defects pointed out being that there is no allegation contained in the complaint that ' the defendant failed to pay .over the sums of money received by it to Lee or to his assignee,, or that it still had the moneys at the time of plaintiff’s appointment as trustee, or that the defendant is indebted to the plaintiff.

Although there is no direct averment, in form, of an indebtedness to ihe plaintiff, yet allegations are contained in the complaint from which the inference is inev-itable that the defendant has money which belongs to the plaintiff, as trustee in bankruptcy, which has been demanded and . payment, of' which has been refused by the defendant. It is not' claimed that indebtedness in the ordinary sense of an obligation arising upon contract exists. Privity of contract is not required to sustain an action for money had and received, except that which results from the" circumstances of the ■ particular ease. (Roberts v. Ely, 113 N. Y. 128.) Having money that rightfully belongs to another creates a debt. Whenever a debt exists without an express, promise to pay, the law implies a promise and the action sounds in contract. (Byxbie v. Wood, 24 N. Y, 616.) /The question arising here is as to the right of the defendant to retain the money as against the plaintiff, the association having received it within four months prior to the filing of the petition in bankruptcy against Lee. A prima facie case is made out in pleading when the plaintiff alleges the receipt of the" money by the-defendant; the plaintiff’s right to it and the refusal of the defendant . to pay'it over on demand. It was not necessary at common law to state in the pleading the circumstances out of. which a debt arose, *259further than that it was for money had and received by the defendant to the plaintiff’s use. (Chapman v. Forbes, 123 N. Y. 532.) A complaint averring that the defendant received a certain sum belonging to or on account of the plaintiff is good. (Betts v. Bache, 14 Abb. Pr. 279.)

The allegation of the complaint is that Lee made his assignment for the benefit of creditors on Hay 9,1901, and that subsequent to that date the moneys were received by the defendant. It was unnecessary, therefore, to allege that the defendant had not paid the money over to Lee, who could not be entitled to it; nor do we think it was necessary for the plaintiff to allege that the defendant had not paid over the money to Lee’s assignee. The plaintiff claims a right to recover money paid within four months prior to the filing of the petition in bankruptcy; that is, sometime within four months prior to August 27, 1901, and his claim is that his rights were fixed as of the date at which the money was i’eceived by the defendant. If the defendant has paid over the money since its receipt to Lee’s assignee, and that is sufficient to defeat the action, it is a matter of defense and should be pleaded as such.

The demurrer was properly overruled and the interlocutory judgment should be affirmed, with costs, with léave to defendant within twenty days to withdraw demurrer and to answer upon payment of costs in this court and in the court below.

Hatch, J., concurred.

Interlocutory judgment reversed, with costs,, and demurrer sustained, with costs, with leave to plaintiff to amend complaint upon payment of costs in this court and in the court below.