[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 426 This action was certainly brought by the plaintiff as executor. The plaintiff complains as executor, and I do not see how the defendant can deny that he meant to bring the action as executor.
No objection was taken, either by demurrer or answer, that Robbins was not a party plaintiff, and the defendant could not make the objection at the trial. (Code, §§ 144, 147, 148;Bidwell v. The Astor Mutual Insurance Company, 16 N.Y., 266;Zabriskie v. Smith, 3 Kern., 336.)
The referee did not decide that the assignment of the policy of insurance by the plaintiff to himself as executor, transferred the money secured thereby to the estate of T.M. Watson; nor do I think it was necessary for him so to decide. The draft was made payable to the plaintiff as executor; was deposited by him with the defendant for collection, and the avails of the draft received by the defendant and placed to the credit of Henry Scrantom, executor. I think these facts show an intention to apply this money on his indebtedness to the estate, and an appropriation of it in part payment of such indebtedness, irrespective of the question whether he could assign the policy to himself as executor. The plaintiff's indebtedness to the estate of Watson is not disputed. He had a right to pay that debt before any other debt; his co-executor Robbins did not act, and had never acted as executor. How could he very well apply the money on his debt to the estate otherwise than as he did? The bank certainly was a very proper place for him to keep the money of the estate in. There was no evidence of a fraudulent intent, unless an intent to prefer his debt to the estate can be called fraudulent. *Page 427
But assuming that his purpose was not to apply the money on his debt to the estate, but to cover it up and keep it from his creditors; what right had the defendant to adjudicate the question of fraud, and volunteer to do justice to these creditors? What right had the defendant to pay the money to the receiver? The defendant received the money on deposit in a fiduciary capacity of the plaintiff as executor; and I think it was a breach of the trust upon which it was received to pay it to the receiver as the defendant did. It was not a special deposit, and therefore the relation of bailor and bailee did not exist between the plaintiff and the defendant; but the money was received by the defendant upon a trust like that implied on a bailment. Now it is well settled, as a general rule, that a bailee cannot set up against his bailor a better title in a third party.
But it is said if the goods are taken from the bailee by the authority of law exercised through regular and valid proceedings, it will be a defence to an action by the bailor. (Bliven v.Hudson River Railroad Company, 35 Barb., 191; Burton v.Wilkinson, 18 Vt., 186.) It is doubtful whether the bailee has a right to yield to regular legal proceedings without defending, or at least notifying the bailor of such proceedings. But however this may be, this principle will not help the defendant. The order appointing the receiver did not authorize him to demand and receive this particular deposit or sum of money, but the property of the plaintiff generally. The defendant undertook to adjudicate, that the money was not the money of the estate of Watson, but of the plaintiff, and paid it to the receiver as the money of the plaintiff, not as the money of the plaintiff as executor, although the defendant had collected it and held it for the plaintiff as executor.
It is plain to me that the judgment of the Supreme Court should be affirmed, with costs.
DAVIES, WRIGHT, GOULD and SMITH, Js., concurred.