*261 By the Court,
Johnson, P. J.I think the referee was right in holding that it was of no consequence in this action whether these laborers under Deland, the sub-contractor, had or had not a legal claim against the rail road company for their services. He was also right in his conclusions of law, that the case did not come within the statute of fraudSj as he found the facts to exist. It appears from the evidence that Deland, who employed the laborers, was a sub-contractor under the defendants. The defendants, in their contract with Deland, had the right to retain from him, in their own hands, moneys sufficient to pay the laborers he should employ. They did retain a part of the money due to him for this purpose; but whether they retained enough to pay all they undertook to settle with, does not clearly appear, nor is it indispensable that it should. They undertook to settle, and did in fact settle with seventeen of these laborers, for their services rendered to Deland. Each of these laborers was indebted to the plaintiff, and the defendants, to enable themselves to pay off and satisfy the claims of these laborers, which they had undertaken to do, procured these bills of the plaintiff against them, with power to use them, and did actually, use them, deducting the amount of the bill in each case as so much paid to the laborer. The presumption is, I apprehend, that inasmuch as they undertook to retain funds they retained a sufficient amount, unless the contrary is shown. But it is unnecessary to resort to that in this case. The right of action may be sustained upon other grounds. It is evident that this settlement, between the defendants and the laborers, was matter of mutual arrangement and consent between all the parties, the laborers, Deland their employer, the plaintiff and the defendants. The plaintiff was requested to furnish, and did furnish, his claims against the laborers, to.be used in that settlement, in payment and satisfaction of their claims. They were so used, and in this way were satisfied and discharged as against the laborers. The laborers paid these claims to the defendants, by deducting the amount against each respectively from his claim for labor. In this view the defendants are liable to the plaintiff for money had *262and received to Ms use. In another view they may.be held ■ liable as purchasers or assignees of these accounts from the plaintiff, which they used and canceled in a matter where they had undertaken to act, and to satisfy claims made against them. In this view I do not conceive it to be at all material whether those claims were well founded against them or not. The plaintiff had no interest in inquiring whether the defendants were, in point of law, liable to pay these claims or not. It was sufficient for him that they so far acknowledged the obligation as to settle and arrange them, and that, in doing so, they used his accounts against the claimants, by turning them in as part payment. Unless the plaintiff can collect the amount 'of these several accounts from the defendants, it is quite certain that he has lost it. He can never resort to the laborers, because they have once paid to persons who were authorized to receive payment, and paid in the precise manner in which it was expected they would; and, indeed, in contemplation of law, in the manner in which the plaintiff agreed to accept payment. The defendants are therefore liable to the plaintiff whether they were originally liable to the laborers or not. The statute of frauds has nothing to do with the case. Their undertaking was new and original, and the consideration sufficient.
[Monroe General Term, March 5, 1855.Johnson, Welles and T. R. Strong, Justices.]
The judgment of the special term must therefore be affirmed.