
    The General Mutual Insurance Company v. Alfred G. Benson.
    Since the Code, there is no distinction, between suits at law and in equity, arising from the form of the pleadings, or the jurisdiction of the court.
    When the sufficiency of a complaint is denied, as not stating facts constituting a cause of action, the only question is, whether the plaintiff, upon the facts stated, is entitled to the relief which he claims, and it is immaterial, whether that relief be legal or equitable.
    If the relief be equitable in its nature, but cannot properly be granted without the presence of other parties, the objection of a defect of parties must be taken by demurrer, or answer; and, if not so taken, it must be held to be waived.
    It cannot be taken upon the trial, in the form of an objection to the complaint, as not stating facts sufficient to constitute a cause of action.
    As a general rule, when a fund is in the hands of a trustee, which he is bound to distribute to different persons in unequal proportion, all interested in the distribution are necessary parties to an action against the trustee.
    But, when the sum that each is entitled to receive has been ascertained, by a proceeding binding on the trustee, each may maintain a separate action for his proportionate share, thus ascertained.
    Judgment for plaintiffs affirmed, with costs,
    (Before Doer, Campbell and HomiAZf, J.J.)
    December term, 1855.
    Appeal by defendant from a judgment entered, upon the report of a referee, in favor of the plaintiffs, for the sum of $2,062.74, including interest and costs.
    The cause was before the court upon a case containing the pleadings, report of the referee, and proceedings upon the trial.
    The following are the pleadings and report. The proceedings it is deemed unnecessary to state.
    City and county of Hew York, ss. :
    The above named plaintiffs, by Alexander Hamilton, jun., their attorney, complain of the above-named defendant, and show to this court:
    That the said plaintiffs made and executed a certain policy of insurance, whereby they became insurers of cargo on board of the ship Russell Glover, to the amount of ten thousand seven hundred and twenty-seven dollars and eighty-one cents.
    
      That the said ship, together with the cargo on board thereof, was afterwards wrecked, and became a total loss, and the said plaintiffs have paid to the parties entitled thereto the whole amount which they agreed to pay by the terms of their said policy as aforesaid, to wit, the sum of eleven thousand eight hundred and twenty-seven dollars.
    The said plaintiffs further show that the said defendant has, since the payment of the said loss, received a large sum of money from the sale of certain portions of the said cargo, which were saved, amounting in the whole, as these plaintiffs are informed and believe, to the sum of twelve thousand dollars, and upwards ; that the said sum, received by him as aforesaid, belongs to the insurers of the said cargo, to whom the same was duly abandoned in proportionate parts, according to the sums respectively insured by them; and that the said plaintiffs are entitled to receive from the said defendant, for their share or proportionate part thereof, the sum of one thousand six hundred and one dollars and fifty-one cents, with interest thereon, and that the said defendant has been requested to pay the same, but has neglected and refused to pay the same, or any part thereof to the said plaintiffs; that annexed hereto is a copy of an average statement or adjustment of the said salvage, and which, the plaintiffs pray, may be taken as a part of this their complaint.
    And these plaintiffs further show, that the said defendant received the said sum of twelve thousand dollars, before referred to, acting as agent or otherwise, in a fiduciary capacity, for the said insurers, and for these plaintiffs as one of them, entitled to their proportionate share of said sum of twelve -thousand dollars, and unjustly and improperly refuses to pay over said proportionate share or sum, amounting to one thousand six hundred and one dollars and fifty-one cents, as above stated,
    Wherefore, the plaintiffs demand judgment against the said defendant for the said sum of one thousand six hundred and one dollars and fifly-one cents, with interest from the first day of July, 1853, together with their costs, and a reasonable allowance for the expenses of this suit.
    Alex. Hamilton, Jun,, Plaintiffs’ Attorney.
    
      SHIP BUSSELL GLOVER.
    Total amount on board estimated to be $80,882.22. Savings estimated $12,000=14finnr per cent.
    Astor Mutual Insurance Co. Union “ “ “
    Mercantile “ “
    Atlantic “ “
    St. Louis Perpetual “ “
    Sun Mutual “ “
    Delaware Mutual Safety “
    Cincinnati Insurance “
    New England Mutual Ins. “
    General “ “ “
    Uninsured, say ....
    $13,964 00 Becd. $2,084 64
    1,400 00 tt 209 01
    6,918 00 a 1,032 77
    12,200 73 tt 1,821 41
    3,455 17 u 515 81
    4,915 21 u 733 78
    200 00 41 29 86
    249 58 a 37 26
    3,079 53 tt 459 73
    10,727 81 ¿t 1,601 51
    ■ 3,474 18 23,272 19 u
    $80,382 22 $12,000 90
    Walter B. Jones, Jr.,
    Henry W. Johnson,
    A. F. Higgins,
    Average
    Adjusters.
    The defendant, answering, says, that he has no knowledge or information whereby to form a belief whether—
    
      First. The plaintiffs became insurers of the cargo on board said Bussell Glover to any amount: or—.
    
      Second. Whether they have paid to the parties entitled thereto, the whole or any amount which they agreed to pay, as alleged.
    The defendant has received a sum of money, amounting to something about twelve thousand dollars, but the exact amount this defendant has not now the means of stating, which moneys he believes to have come from the sale of the wreck, or portions of the wreck and cargo of said ship; but this defendant has no knowledge or means of information as to who owns or is entitled to said moneys, nor any knowledge to whom he ought to pay it; or whether the plaintiffs are entitled to any portion thereof; nor can such knowledge be had by him, or by them, or by any person, until the customary average papers are fully made up, which has not been done; and this defendant, according to commercial usage, would be wrong and unsafe in paying any portion of said money to any person till such, papers are made up, which has not yet been done.
    Nevertheless, this defendant is willing and desirous to pay such moneys to any person entitled to have and receive them, and respectfully submits the entire matter to this court, and will abide by their decision herein.
    And, for the defence further herein, this defendant saith, that the plaintiffs in this cause are indebted to him in a sum of about five hundred dollars on contract, and for money had and received, which this defendant asks to have off-set, and pleads as a counterclaim to any sum which this court may find due to them out of the moneys in his hands.
    Nevertheless, this defendant denies that he received said moneys in a fiduciary capacity, or in any way except in the regular course of his business as a commission merchant, they having come into his hands on the sale of consignments to him, and drafts sent to him, for all of which he accounted to his correspondent, and was directed, after paying over certain sums to certain persons, to retain the balance, subject to the result of the average adjustment in the matter of the Russell Glover, which he has done.
    The defendant denies that the statement annexed to the complaint is an average adjustment or statement therein, and saith the same is only an estimate, and not a full or final statement; and this defendant asks to be discharged accordingly.
    Marvin & Prime, Defb’s Attys.
    The plaintiffs replying to the answer of the defendant, herein deny that they are indebted to the said defendant as stated and alleged in said answers; and they also deny that the said defendant is entitled to any off-set or counter claim whatever against them, and they therefore demand judgment against the said defendant, as asked for in their complaint in this cause.
    Alexander Hamilton, Jr., Plaintiffs’ Atty.
    
      To the Superior Cowl of the City of New York :
    
    I, Philo T. Buggies, of the city of New York, referee, to whom the above entitled action, and all the issues therein, were referred, to hear and determine the same, by an order of the court, made at a Special Term thereof, held at the City Hall,, in the city of New York, on the 22d day of March, 1855 :
    Do respectfully report, that I have been attended on said reference by Alexander Hamilton, jr., Esq., the attorney for the plaintiffs, and W. C. Prime, Esq., attorney for the defendant, and have heard and considered the proofs and allegations of the respective parties, and the arguments of counsel, and I find and report as matters of fact—■
    That the said plaintiffs, being then a corporation engaged in the business of marine insurance, and having an office in the city of New York, became insurers of cargo on board the ship Russell Glover, in the sum of eleven thousand eight hundred and twenty-seven dollars, and that said ship was afterwards wrecked and became a total loss, and that the plaintiffs paid to the parties insured by them, (upon receiving from them an abandonment of their interest,) as for a total loss upon the cargo so insured, the sum of eleven thousand eight hundred and twenty-seven dollars.
    That certain portions of said cargo were saved and afterwards sold, and that the proceeds of sales thereof, amounting to the sum of twelve thousand nine hundred and sixty-three dollars and twenty-five cents, came into the hands of and were received by said defendant; and that in a fiduciary capacity, and as trustee for the parties entitled thereto, the said sum was received by him at various periods between the 16th of April, 1852, and the 17th of June, 1852, when the last instalment thereof was received by him.
    I further find, that, after deducting and allowing from the said sum of twelve thousand nine hundred and sixty-three dollars and twenty-five cents, the sum of one thousand dollars for the compensation of the adjuster, and charges for collecting drafts, as well as a commission of two and one-half per cent, for receiving and paying, and all other charges thereon, there remains in his hands a net balance of eleven thousand six hundred and ten dollars nineteen cents, without charging interest to be divided and distributed among the underwriters, and others interested therein, including the plaintiffs in this action, according to their respective interests, and that a part of such sum so received by the defendant was identified by the marks and invoices so arising from sales of the particular goods and merchandises insured by said plaintiffs.
    
      I further find, and report, that the share or proportion of the net proceeds of said cargo, after deducting charges and commissions above referred to, belonging to the plaintiffs, in the hand of defendant, amounts to the sum of fifteen hundred and forty-nine dollars and forty-eight cents, and that the final adjustment and distributions of said proceeds of sales (after allowing a reasonable time for completing said adjustment) could have been made on the first day of March, 1853.
    I further find that the said defendant has settled with, and paid to various parties interested, the full amount to which they were entitled, under the pro forma adjustment annexed to the complaint herein.
    From the facts so found and reported, I further find, decide and report, as matters of law, that the plaintiffs are entitled to judgment against the defendant for the sum of fifteen hundred and forty-nine dollars and forty-eight cents, together with interest thereon, from the first day of July, 1853, and costs.
    All which is respectfully submitted.
    Dated New York, July 17, 1855.
    Philo T. Ruggles, Referee.
    The defendant excepted to the report of the referee, upon the ground, that he had erred in not granting a motion, made upon the trial, that the complaint should be dismissed, as not stating facts sufiicient to constitute a cause of action. And also upon the grounds, that the findings and decision of the referee were contrary to law and evidence.
    W. 0. Prime, for the defendant, appellant.
    The complaint does not state facts sufficient to constitute a cause of action, and this objection was properly taken on the trial, and, indeed, may be taken in any stage of the cause, (2 Duer, 650 ; 3 Selden, 464.) The plaintiffs had no right to bring an action at law for their share of the fund; their proper and sole remedy was a suit in equity, for the distribution of the fund, in which all the parties interested should be joined. (1 John. 165; 2 Barb. 135,145; 1 Stark. 572; 2 Chitty, 263.) The plaintiffs also failed to prove their complaint upon the trial. They did not show that their proportion of the fund had been ascertained by a proceeding binding upon all the parties interested, and without such proof they were clearly not entitled to recover. (3 Ado. & Ellis, 99; 12 John. 296.) The defendant cannot safely account and pay over to any one of the cestuis que trust, without knowing the extent of his liability to each and all, and, hence, all the parties in interest should be parties to the action, it being certain, that those who are not parties, will not be bound by any judgment that can be rendered.
    The judgment ought to be reversed, and the complaint be dismissed, or a new trial be granted.
    
      A. Hamilton, Jun., for the plaintiffs, respondents.
    The referee decided correctly in denying the motion to dismiss the complaint. This is not the case of parties interested in a trust fund, where the proportions are unequal, and the amount due to each not ascertained. Here, the amount has been ascertained by an adjustment made by proper and skilful persons, and the exact sum due to the plaintiffs is stated by the referee, and his finding of the facts is supported by the evidence. The defendant is, moreover, estopped, from setting up that the proportions due to the several parties are not ascertained, by his voluntary payment to two of the parties, more than two years since, of the exact amounts due to them under the adjustment, and by the allowance, to a third, even of a larger sum than that so ascertained to be due to him. Upon the whole case, it is manifest, that this defence has been interposed merely for delay, and to avoid the payment of a large sum certainly due to the plaintiffs, and which the defendant, without any reasonable excuse, has withheld from them for nearly four years.
    I claim that the judgment which they have at last obtained should be affirmed, with costs. - <-
   By the Court. Duer, J.

We can perceive no ground whatever for setting aside the report of the referee, as contrary to evidence. It appears to us, that all the facts found by him were, not only sufficiently, but very clearly, proved.

The only questions, then, to be considered, are questions of law, arising upon the pleadings, and upon the facts as found by the referee. The first of these questions is, whether the complaint states facts sufficient to constitute a cause of action. The second, whether the decision of the referee, that the plaintiffs were entitled to recover, is a just conclusion of law from the facts which he has found.

The counsel for the defendant was right, in saying that an objection to a complaint, as not containing facts sufficient to constitute a cause of action, although not raised by a demurrer, may be taken upon the trial; but it is not necessary to say, that if not so taken, it may be raised upon an appeal from a judgment. Here, it appears from the case, that the objection was taken on the trial, but the counsel is mistaken in supposing that it ought to have been allowed by the referee, since we are clearly of opinion that it was not at all applicable to the complaint before him.

It may be true, that where a fund is in the hands of a trustee, with directions to pay it over to different persons in different proportions, all who are thus interested, in the distribution of the fund, are proper parties to an action against the trustee, but it by no means follows, that when an action against the trustee is brought by one of those persons, to compel the payment of the distributive share to which he claims to be entitled, the complaint is defective, as not stating facts constituting a cause of action, since it is manifest, that, in respect to the plaintiff, and the relief which he personally seeks, the cause of action is exactly the same, as if, by the terms of the complaint, all interested in the fund had been made parties, as plaintiffs or defendants. The true and only objection in such a case is, that all so interested ought to be brought in as parties, in other words, that there is a defect of parties, but it is certain, that this is an objection that can only be taken by demurrer or answer, and when not so taken is deemed to be waived, (Code, § 148.) Here, it cannot be pretended that the objection is taken in the answer, and hence, if it was meant to be raised before the referee he had no right to listen to it.

The argument for the defendant overlooks, entirely, the fact, that, since the Code, there is no longer any distinction between suits at law and in equity, as arising from the form of the pleadings, or the jurisdiction of the court; and hence, the cases to which we were referred, and which were all determined before the Code was enacted, have no application. When the sufficiency of a complaint, as not stating facts constituting a cause of action, is now denied, the only question is, whether, if the facts stated are admitted to be true, the plaintiff is entitled to the relief which he claims; and, in determining this question, it is quite immaterial, whether the relief sought is, in its nature, legal or equitable. Hence, if the present action, as involving the distribution of a fund by a trustee, is to be deemed equitable in its nature, but the presence of other parties was thought to be necessary, before the relief sought, although proper in itself, could with propriety be granted, the absence of those parties, ought to have been made a ground of objection, at the time and in the form prescribed by the Code, in order that the plaintiff might bring them in, if their presence were held to be necessary. As the objection has not been taken, in the only mode that the Code has sanctioned, we cannot do otherwise than hold, that it cannot now be urged. But we go further. Had the objection, that has been so strongly relied upon, been raised by a demurrer to the complaint, (the only form in which it could properly be raised,) we are clearly of opinion that it could not have been allowed to prevail. We are satisfied, that, upon the facts set forth in the complaint, it must have been held, that the plaintiff was entitled to maintain the action, in his own name, and on his own behalf, without any reference to the possible claims of other parties.

Where an action is brought against a trustee for a distributive share of a fund, which he is bound to distribute to different persons in unequal proportions, and the proportionate share of each has not yet been ascertained, it cannot be doubted, that all who are interested in the distribution, are necessary parties to the action; but it is equally certain, that, when the proportionate share of each distributee has been definitely ascertained, by a proceeding, binding on the trustee, each is entitled to demand the payment of the share belonging to him, and, when the payment is withheld, may maintain a separate action for its recovery. The liability of the trustee to each is, then, exactly the same, as if the sum, ascertained to belong to him, had been the only sum which the trustee had received, and had been directed to pay. The case is, then, brought within the application of a rule, which, however doubtful it may be regarded upon the English authorities, has long been the established law in this state—the rule, that where A places a sum of money in the hands of B, to be paid over to C, the latter may maintain an action against B for its recovery, as so much money had and received to his use, even when no privity has been created between them by an express promise of payment. (Weston v. Barker, 12 John. R. 279.)

The sum of $12,000, which was placed, in this case, in the hands of the defendant, belonged to the different insurance com■panies, by whom a total loss upon the cargo of the ship named in the complaint had been paid, and belonged to them in proportion to the sums which they had respectively insured and paid. It was his duty, according to the usage of merchants, to cause the sum that each company was entitled to receive to be ascertained, by an estimate or adjustment, to be made by persons of competent skill, usually employed for such purposes. And if such an adjustment was, in fact, made, it was binding on the defendant, unless shown to be erroneous, and each company became, at once, entitled to demand and receive payment of its proportionate share, as thus ascertained, and, if necessary, to enforce its payment by a separate action.

Now, as we read the complaint, it avers, with sufficient certainty, that an average statement or adjustment, showing the sum that each company was entitled to receive, and a copy of which is annexed to the complaint, and forms a part of it, was properly made; and that the plaintiffs have demanded payment of their proportionate share, as thus ascertained, and that such payment had been refused by the defendant. The complaint, therefore, in our opinion, contains an averment of all the facts, that the plaintiffs could be bound to prove upon the trial, to entitle them to recover in a separate action; and, hence, had a demurrer been interposed, either upon the ground of the insufficiency of the complaint, or of a defect of parties, it must have been overruled.

The observations that have been made, render it unnecessary to consider more particularly the question, whether the decision of the referee is a just conclusion of law, from the facts which he has found. He has found in favor of the plaintiffs all the material facts alleged in the complaint and put at issue by the answer, and of this finding, his decision, that the plaintiff was entitled to judgment, was a necessary result. We have already said that this finding was amply justified by the evidence before him, and we now add, that in our opinion, the proof was conclusive that the defendant had procured an adjustment to be made, the validity of which he had admitted, and by the payments he had made under it, was estopped from denying.

We all think that the demand of the plaintiffs for their proportionate share of the fund received by the defendant ought not to have been resisted, and that if there are any errors in the report of the referee, the errors are in favor of the defendant. It is very doubtful, taking into view all the circumstances of the case, whether he ought to have been allowed the commissions which the referee has deducted, and whether he ought not to have been charged with interest for a longer period than that for which it appears to have been computed.

The judgment upon the report is affirmed, with costs.  