Roberts v. Ely

• Citation: 20 N.E. 606,113 N.Y. 128
• Parties: ROBERTS v. ELY.
• Decision Date: 19 March 1889
• Court: New York Court of Appeals

113 N.Y. 128

20 N.E. 606

ROBERTS

v.ELY.¹

Court of Appeals of New York.

March 19, 1889.

Appeal from supreme court, general term, First department.

Action by Thomas Roberts against Caroline D. Ely, as executrix of David J. Ely, deceased. Plaintiff appeals.

Treadwell Cleveland, for appellant.

C. E. Tracy, for respondent.

ANDREWS, J.

The statute of limitations is, we think, a conclusive answer to the claim of the plaintiff upon his own theory of the cause of action. The plaintiff insists that Geiger & Co., whose rights he represents, became the equitable owners of a specific portion of the insurance money collected, and which came to the hands of David J. Ely, the defendant's testator. The teas of Geiger & Co. were in the possession of the Chicago & China Tea Company, on the 9th day of October, 1871, when the fire occurred by which they were destroyed, together with a large quantity of other teas belonging to the company. The plaintiff claims that the teas of Geiger & Co. were covered by general policies of insurance taken out by the Chicago & China Tea Company, covering teas, ‘their own, or held in trust, or on commission, or sold but not delivered;’ that the underwriters adjusted and paid the loss upon the basis that the teas of Geiger & Co. were included in the risk; that David J. Ely, the appointee in the policies, received the whole amount of the insurance as adjusted; and that Geiger & Co. thereupon became equitably entitled to such a proportion thereof which the value of the teas owned by them bore to the value of the whole quantity destroyed.

The defendant claims that the policies were made payable to David J. Ely to secure advances by him to the Chicago & China Tea Company prior to the purchase by Geiger & Co. of the teas owned by them, and that he was entitled to apply the whole sum received on the policies to the payment of his debt, and that Geiger & Co. were not entitled to any portion thereof until his debt was fully paid. The policies were written before the purchase by Geiger & Co., and the advances made by Ely were greater than the sum received on the policies. The whole sum received was $43,535, and the plaintiff procured a finding by the trial judge that in this sum was included $5,841.25, paid by the insurers on account of the destruction of the teas of Geiger & Co. Geiger & Co. purchased the teas in 1871 of David J. Ely, who was the financial agent of the Chicago & China Tea Company, and paid him the full purchase price. The teas were owned by the company at the time of the sale, but it is claimed by the plaintiff that the agency of Ely was not disclosed, and that Geiger & Co. supposed that the teas were owned by Ely, and that he was the vendor. There is also proof tending to show that it was understood between Geiger & Co. and the Chicago & China Tea Company, subsequent to the purchase, and before the fire, that the interest of Geiger & Co. was to be protected by insurance.

Upon all the circumstances the plaintiff insists that when the insurance money was paid to Ely, he took it impressed with a trust in favor of Geiger & Co. to the extent of their interest in the teas destroyed by the fire, as represented in the fund received, and was equitably bound to account to Geiger & Co. for their equitable interest.

Assuming that the plaintiff is right in his construction of the facts, the case falls within the familiar doctrine that money in the hands of one person, to which another is equitably entitled, may be recovered in a common-law action by the equitable owner upon an implied promise arising from the duty of the person in possession to account for and pay over the same to the person beneficially entitled. The action for money had and received to the use of another is the form in which courts of common law enforce the equitable obligation. The scope of this remedy has been gradually extended to embrace many cases which were originally cogizable only in courts of equity. Whenever the defendant has in his possession money which he cannot...