
    Thomas Roberts, App’lt, v. Caroline D. Ely as Ex’rx, etc., Resp’t.
    
    
      (Court of Appeals,
    
    
      Filed March 19, 1889.)
    
    1. Insurance—When taken, impressed with a trust in favor of another.
    In an action to recover insurance money collected by the defendant’s intestate, the teas of the plaintiff were in possession of the 0. 0. T. Co. when the fire occurred by which they were destroyed. He claims that as his teas were covered by general policies of insurance taken out by the 0.0. T. Go. covering teas “ their own or held in trust,” he was entitled to recover from the defendant, the appointee in the policies, his pro rata proportion. The teas were purchased from Ely, who was the financial agent of the 0. 0. T. Go., but plaintiff claims he was ignorant of that fact, and supposed Ely to be the vendor. The evidence discloses an agreement between plaintiff and the 0.0. T. Co. that the interest of the former was to be protected by insurance. The defendant claims that as the policies were made out payable to Ely to secure advances by him to the 0. 0. T. Co. prior to the plaintiff’s purchase, he was entitled to apply the whole sum received on the policies to the payment of his debt to the exclusion of the plaintiff. Held, that Ely took the insurance money impressed with a trust in favor of the plaintiff to the extent in the teas destroyed, as represented in the fund received, and was equitably bound to account to the plaintiff for their equitable interest.
    4. Same—Money in hands of one maybe recovered by another equitably ENTITLED IN COMMON LAW ACTION.
    Money in the hands of one person to whom another is equitably entitled may be.reooverd in a common law action by the equitable owner upon any implied promise arising from the duty of the person in possession to account for and pay over the same to the person beneficially interested, subject to the restriction that the mode of trial and the relief which can be given in a legal action are adapted to the exigencies of the particular case, and no privity of contract between the parties is required, except that which results from the circumstances.
    3. Equity—Exceptions to general rule as to enforcement of trusts.
    The general rule that trusts are cognizable in equity, and are enforceable only in an equitable action is subject to exceptions, as in cases of bailments, and that larger class of cases where the action for money had and received to another’s use is maintained ex asquo et bona.
    
    
      .4. Statute of limitations (section 90, Code Pro.)—Application of to certain actions.
    Where the case presents a cause of action upon a liability implied by law, it is subject to the limitation of six years prescribed by section 90, Code Procedure, and a plaintiff cannot avoid the application of the statute by treating an actual appropriation of money by another as the-cause of action where the right to recover accrued prior to the time when-the statute commenced to run.
    Appeal from a judgment o.f supreme court, general term, first department, affirming a judgment of special term, entered upon dismissal of complaint.
    This action was brought to recover a specific portion of insurance money collected, and which came into the hands, of David J. Ely, the- defendant’s intestate.
    
      Treadwell Cleveland, for app’lt; C. E. Tracy, for resp’t.
    
      
       Affirming 9 N. Y. State Rep., 796.
    
   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 Sc 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 intestate. 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 Sc 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 defendants claim 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 Sc 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 Sc 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 Sc 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 & Go. 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 cognizable only in courts of equity. Whenever the defendant has in his possession money which he cannot conscientiously retain from another, the latter may recover it in this form of action, subject to the restriction that the mode of trial and the relief which can be given in a legal action are adapted to the exigencies of the particular case, and that the transaction is capable of adjustment by that procedure, without prejudice to the interests of third persons. Ko privity of contract between the parties is required, except that which results from the circumstances. Mason v. Waite, 17 Mass., 560. The right on the one side, and the correlevative duty on the other, create the necessary privity and justify the implication of a promise by the defendant to do that which justice and equity require. It is immaterial also whether the original possession of the money by the defendant was rightful or wrongful. It is sufficient that the duty exists on his part, created by the circumstances, to account for and pay it over to the plaintiff. Nor is form of action excluded because, in a general sense, there is a relation of trust between the parties arising out of the transaction. There are many cases of trust cognizable only in a court of equity. The cases of express trusts of property are generally of this kind. The duty of the trustee to the cestui que trust to perform the trust and to account according to its terms and conditions, is, as a general rule, enforceable ■only in an equitable action. The necessity of taking an account, the frequent complexity of details, the separ*- te and varied interests often affected, and the necessity of moulding the relief to suit the circumstances, render the procedure of courts of equity peculiarly suitable in the-administration of formal trusts, and in many cases indispensable to the ascertainment and enforcement of the-rights and obligations of the parties. But the fact that money in the hands of one person is impressed with a trust-in favor of another, or that the relation between them has-a trust character, does not ipso facto, in all cases, exclude the jurisdiction of courts of law. The general rule that-trusts are cognizable in equity, and are enforceable only in an equitable action, is subject to many exceptions, “as, for instance, cases of bailments, and that larger class of' cases where the action for money had and received for another’s use is maintained ex aequo et bona.” Story Eq. Jur., § 60; Comstock, J., Lawrence v. Fox, 20 N. Y., 278.

The present case falls within the exception. Upon the-plaintiff’s theory of the facts, Geiger & Co. were the equitable owners of a pro rata part of the insurance money received by Ely. That firm and Ely were alone interested in the question, as it is conceded that Ely was entitled to all the money received, subject only to the claim of Geiger & Co. The only accounting required was such as was necessary to ascertain the extent of the interest of Geiger & Co.,, and that depended upon simple facts, as readily ascertainable in a legal as in an equitable action. The case, therefore, presented a cause of action upon a liability implied by law, and it wras subject to the limitation of six years-prescribed by section 90 of the Code of Procedure, in force when the cause of action arose. The money was paid to Ely in 1871, and the facts were known to Geiger & Go. at or soon after that date. The action was commenced in 1881. Assuming that an equitable action could be brought to enforce the liability claimed, it would still be subject to the legal limitation of six years. Matter of Neilley, 95 N. Y., 390.

The plaintiff cannot avoid the application of the statute by treating the actual appropriation of the money by Ely in 1874 as the cause of action. The right of Geiger & Co. to recover the money was perfect from the time of its actual receipt by Ely in 1871. Lillie v. Hoyt, 5 Hill, 395.

The judgment should be affirmed.

All concur.  