The order is predicated on the sufficiency of the complaint for equitable relief to have it declared that the plaintiff is entitled to have certain bonds held by the defendant bank in escrow or in trust delivered to it or to have a lien thereon in its favor declared and foreclosed. Appellant contends *585that plaintiff has no title to or lien on the bonds and that the complaint merely shows an agreement to pay a debt with the bonds, which does not give plaintiff an equitable title or lien as it is not shown that there was such an application of the bonds to the payment of the debt that the bank was authorized to pay over the bonds to plaintiff without further authority from the debtor. Appellant also claims that the allegations of the complaint are not sustained by the letter of the appellant with respect to the deposit of the bonds. The letter constituting the contract is quoted in the complaint and of course in such circumstances the letter is controlling and the demurrer does not admit an erroneous construction thereof.
The amended complaint shows that the plaintiff is a domestic corporation and was engaged in buying and selling caustic soda; that Mario Tapparelli fu Pietro was engaged in business at Milan, Italy, and elsewhere and that appellant was a domestic corporation acting as his agent here and elsewhere and that he owned all of its capital stock save two shares to qualify two named individuals as directors and that he organized, owned and controls it for his individual interest and benefit and that he is a citizen and resident of Italy; that on or about September 20, 1917, he was here temporarily and entered into a contract with the plaintiff for the purchase from it of twenty carloads of caustic soda, ten carloads thereof at ten cents a pound for October delivery “ net cash against railroad bill of lading ” and ten carloads at $9.92f per 100 pounds “ cost and freight New York, shipment second half of October from the factory, each against railroad bill of lading and the said defendant agreed to accept the said goods on delivery as aforesaid and to pay therefor the agreed price above mentioned; ” that he returned to Italy and the appellant, as his agent, assumed the execution and completion of the contract and that appellant has claimed and now asserts that it has succeeded to all the rights and liabilities of its said principal with respect to the contract; that at appellant’s request and on payment by it of $10,000 on account, plaintiff consented to postpone the delivery of the caustic soda and thereafter consented to a further postponement by which five carloads were to be delivered in December, 1917, and five in March, 1918, and that the plaintiff in December, after it had duly *586tendered five carloads, at the request of appellant, consented to postpone the December shipment until April, 1918, in sole reliance upon and in consideration of the agreement of the appellant, thereinafter quoted, to deposit $20,000 in four per cent Liberty bonds with the defendant bank, to he held in trust for the plaintiff and to be paid to it in installments of $5,000 each in part payment on each delivery of goods during the months of January, February, March and April, 1918, respectively; that the contract for the deposit of the bonds was evidenced by a letter of December 13, 1917, written by appellant to the plaintiff. The letter is quoted in full in the complaint. It recites that in consideration of plaintiff’s delaying until April, 1918, the shipment of the five cars due in December, 1917, and in consideration of its delivering five cars in each of the months of January, February, March and April, 1918, appellant would leave on deposit with the defendant bank $20,000, $5,000 to be drawn as part payment for the shipment for each of said four months, and that if appellant should agree with plaintiff to sell the entire twenty cars between the date of the letter and the month of April, 1918, then the $20,000 was to be used as part payment of the purchase price and that such deposit was in addition to the $10,000 already paid on account of the purchase price of the caustic soda. The appellant further stated in the letter as follows: “We shall duly authorize the bank to make the said payments pursuant to this letter,” and that should plaintiff fail to make deliveries in any month, appellant should have the right “ to immediately withdraw from the bank whatever portion of the $20,000 still remains on deposit.” It is then alleged that the bank duly accepted the trust and that the bonds were deposited with it and held by it in trust for the plaintiff to be paid to plaintiff in installments according to the terms of the letter. It is further alleged that about the 7th of January, 1918, appellant and the plaintiff agreed that the five carloads consisting of 388,175 pounds tendered for delivery in December 1919 — evidently meaning December, 1917 — should be deemed to be delivered in January, 1918, and that said five carloads were on that date resold by appellant to plaintiff at $6.44 per 100 pounds and appellant authorized the bank to pay the plaintiff the proceeds of $5,000, amounting *587to $4,833.67, on account of said January delivery, and the bank duly paid the same to plaintiff on or about the 13th of February, 1918; that thereafter and on or about February 25, 1919 — evidently meaning 1918 — plaintiff duly tendered delivery of five carloads, the purchase price of which was $35,763, to appellant and demanded payment, which was refused, and thereafter plaintiff demanded of the bank the proceeds of $5,000 of the bonds, which was refused, and that thereby appellant and its principal broke the contract with the plaintiff and plaintiff became entitled to immediate delivery of the remainder of the bonds or the proceeds thereof; that plaintiff duly performed excepting as prevented by the acts of defendants; that on or before March 2, 1916 — evidently meaning 1918 — appellant notified plaintiff that it canceled and abrogated the contract and refused to be bound any longer by the provisions thereof; that plaintiff was ready, willing and able to perform and would have performed but for such refusal on the part of defendants, and that by reason of such refusal on the part of defendants to perform, plaintiff has sustained damages in the sum of $63,574.52 with interest; that appellant is wholly insolvent and any judgment against it would be uncollected and Pietro is without the jurisdiction of the United States and that plaintiff is without remedy unless said bonds are paid to it on account of said indebtedness; that unless the court declares that the plaintiff has a lien on the bonds and requires them to be delivered to the plaintiff or sold for its benefit, the bank will turn them over to the other defendants or to their assigns; that appellant and said Pietro on or about the 5th of April, 1919, executed an assignment of their right, title and interest in the bonds to the attorneys of record for appellant herein and to one Carroli, now or formerly an officer of appellant. It is further alleged that appellant on March 4, 1918, brought an action against the plaintiff in the Municipal Court to recover $1,000 damages for an alleged breach of the contract by this plaintiff in failing to make a proper tender of delivery of five carloads in February, 1919 — evidently meaning 1918 — and that by reason thereof the contract was abrogated and appellant was damaged in said amount; that judgment was recovered by the plaintiff therein, which was reversed by the Appellate *588Term and the complaint dismissed upon the merits, with costs, which it is alleged was an adjudication that this plaintiff performed the contract in all respects excepting as performance was prevented by acts of the defendants, and that appellant broke the contract; and that the Appellate Term and the Appellate Division refused to permit an appeal.
It is then alleged that plaintiff has sustained damages in the sum of $63,574.52 and has no adequate remedy at law, and judgment is demanded for the assignment of the remaining bonds to it in part payment of the damages, and that it be declared that it has a lien thereon, and if delivery be impracticable, then that they be sold and the proceeds applied in payment of plaintiff’s claim and that plaintiff have judgment against appellant and Pietro for the balance, or that it shall be provided in the judgment that it is rendered without prejudice to an action at law by the plaintiff for the balance.
It seems to me in the circumstances that a cause of action in equity is set forth. The bonds were delivered to the bank to be applied in payment for the goods when delivered, not merely as security, for it was expressly provided that the bonds should be used to make the payments. That, I think, constituted an appropriation of the bonds to that purpose and an equitable assignment thereof, for they were expressly appropriated to the payment for the goods to be delivered to plaintiff when the goods were delivered by it which, of course, includes a tender of delivery. (Lynch v. Conger, 181 App. Div. 221; Donovan v. Middlebrook, 95 id. 365; Van Kannel Revolving Door Co. v. Astor, 119 id. 214; Hofferberth v. Duckett, 175 id. 480.) The bank was to hold them until delivery or tender of delivery of the goods by plaintiff and they were to be returned to appellant only in case the plaintiff failed to perform the contract. I am of opinion that plaintiff shows a right to the bonds; but it is immaterial whether the plaintiff has acquired an equitable title or merely an equitable lien, for it was one or the other. (Schoenherr v. Van Meter, 215 N. Y. 548; Muller v. Kling, 149 App. Div. 176; affd., 209 N. Y. 239.) From the fact that the plaintiff was to receive either cash or delivery of the bill of lading to which it could attach drafts and thereby insure payment before delivery, it is reasonably to be inferred that one purpose of the deposit *589of the bonds was to insure the acceptance of the goods by the defendant, and to make up in part the loss to the plaintiff if the appellant failed to accept the delivery when duly tendered. It is evident that the market price of caustic soda had fallen when this new contract was made and plaintiff exacted the payment of $10,000 and the delivery of the bonds, referred to in the letter as money, to the bank as a condition of extending the time within which the appellant was to accept delivery and pay for the caustic soda. The adequacy of a remedy at law must be pleaded by defendant and cannot be presented by a demurrer on that ground to a complaint. (Bloomquist v. Farson, 222 N. Y. 375.)
In my opinion, therefore, the demurrer was properly overruled and the order should be affirmed, with ten dollars costs and disbursements.
Smith, J., concurs.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs, with leave to plaintiff to serve an amended complaint on payment of said costs.