
    Agnes L. Price, Resp’t, v. Samuel L. Mulford, App’lt, and Peter S. Wandell.
    
    
      (Court of Appeals,
    
    
      Filed November 29, 1887.)
    
    1. Trust funds—Statute of limitations—When a bar to an action.
    January 1,1863, the firm of Mulford & Wandell (defendants herein) held' a certain certificate of indebtedness for $1,350. At that time the firm was. indebted to Wandell, who took the certificate, and had it charged to him on the books of the firm on account of that debt. Wandell,' who was them county treasurer, made an entry on the books of the county treasurer to-the effect that he had invested $1,350 of a trust fund, held under an order of the court, in the said certificate. In 1868, Wandell transferred the said certificate to his successor as county treasurer as a- part of the said trust fund. It was not until June, 1883, that the beneficiary of the trust fund, to whom under an order of the court the said certificate had been transferred, became aware of what had been done, and brought this action against both members of said firm to recover the sum so abstracted by Wandell. Held, that the action was barred by the statute of limitations.
    2. Same—A bob to action against trustee by implication of law— Code Civ. Pro., § 382, subd. 1 and 5.
    When one receives money in his own right, and is afterwards by evidence or construction changed into a trustee, he may insist upon the lapse-of six years as a bar to an action. Code Civil Procedure, section 382, subdivision 1, subdivision 5, of said section does not apply in such a case.
    Appeal from a judgment of the supreme court, second department, affirming a judgment in favor of the plaintiff, entered upon a verdict of the jury, and affirming an order denying a motion for a new trial made upon the minutes of the judge.
    
      Samuel Mulford, for app’lt; Henry D. Hotchkiss, for resp’t.
    
      
       Reversing 36 Hun, 247.
    
   Darforth, J.

There is force in the appellant’s contention that no case was made out against him, and that for want of merit the complaint should have been dismissed. This was also the opinion of the learned judge who dissented from the judgment appealed from. It is unnecessary, however, to discuss that proposition, for whatever cause of action, the plaintiff had, accrued January 1, 1868. The action was not begun until November, 1883, and ’the-view we take of the plaintiff’s claim as affected by the Statute of Limitations, is conclusive of the case.

The record shows that one, Nicholas Van Dyck Price, while an infant, became entitled to $1,909.13, as his share of the proceeds of land sold under partition proceedings, in or before the year 1845. At his death in 1859, the fund was in the hand of the treasurer of Richmond county, and in June, 1883, the then treasurer, by direction of the court, delivered the same to the widow and heirs of Nicholas. Among other securities was a paper in these words:

“Rossvtlle, July 12, 1864.

“This is to certify that St. Patrick’s Roman Catholic Church, Richmond, Staten Island, is indebted to Mr. D. Keeley, thirteen hundred and fifty dollars, for work performed on the same.

“JOHN BARRY,

“$1,350.

Pastor.

“Indorsed: Please pay the within to Messrs. Mulford & Wandell, or order.

“DENIS KEELEY.”

Other indorsements by Mulford & Wandell showed that they received payments of interest thereon up to July 12, 1867. Then followed an indorsement made July 1, 1868, as follows:

“ Please pay within amount of $1,350.50 and interest to E. P. Barton, county treasurer. (App’d January 1, 1868.)

“MULFORD & WANDELL,

“Per P. S. Wandell.”

In September, 1883, the plaintiff, who was one of the heirs of Nicholas, became by assignment from the widow and the other heir sole owner of the certificate. Wandell. was county treasurer from 1865, to sometime in 1868, when he was succeeded by Mr. Barton, and was a member of the firm of Mulford & Wandell, from June, 1862, to June, 1869. He thus filled two characters, and the evidence, shows that the indorsement to Barton was made by Wan-dell, and that the' official book containing the account of court funds, when delivered to his successor contained under the head of Conner & Dyke (the partition suit), these entries:

“January 1, 1868.

It also appeared that at the same time the firm of Mulford & Wandell was indebted to Wandell, and the certificate was charged to Wandell on the books of the firm on account of that debt. There was no evidence of any personal participation by Mulford in any of these transactions, or knowledge of them, except as it might be imputed to him from his connection with Wandell as a partner. The action was upon the ground that the money went to the benefit of the firm, and judgment for the amount was prayed for as for so much money “had and received to and for the use of the plaintiff.” At the close of the plaintiff’s case the defendant, Mulford, asked for a dismissal of the complaint upon several grounds, and among others that the cause of action did not accrue at any time within six years next before the commencement of the action, and thereupon the plaintiff moved to amend the complaint by adding in the prayer for judgment, after the date 1868 (that being the time when the cause of action was alleged to have accrued), “ that the defendant be held to have received said sum of money as trustee for the benefit of the plaintiff.” The motion to amend was granted and the motion to dismiss denied. The judge presented the case to the jury and directed them to inquire “whether or not the money was applied by Mr. Wandell to the benefit of the firm,” saying, “ It does not make any difference in this view of the case, whether Mr. Mulford knew anything about it or not, and you will see it is perfectly proper and right that a man who receives the benefit of funds abstracted under such circumstances as these, although he may not know anything about the source from which they are derived, should be charged with the liability to repay the persons who are entitled to the fund."

As an action for money had and received, there can be no doubt that the statute of limitations was a perfect defense. It was not less a defense, although it had been received under circumstances from which the law would imply a trust. The case of an express or direct trust would be different. A trustee so appointed would be bound-to take care of his cestui que trust so long as the relation existed, and he could do nothing adverse to it. But when one receives money in his own right, and is afterwards by evidence or construction changed into a trustee, he may insist on the same lapse of time as a bar. Kane v. Bloodgood, 7 Johns. Ch., 89; Lammer v. Stoddard, 103 N. Y., 672; 4 N. Y. State Rep., 225.

But the plaintiff cites subdivision 5, section 382, of the Code of Civil Procedure, which provides that “An action to procure a judgment other than for a sum of money on the ground' of fraud in a case which, on the 31st day of December, 1846, was cognizable by the court of chancery.”

The cause of action in such a case is not deemed to have accrued until the discovery by the plaintiff, or the persons under whom he claims, of the facts constituting the fraud, and insists that the general provision of the statute did not apply. But to that position there are several answers:

First. The action is not to procure a judgment other than for a sum of money; the only judgment asked is for a specific sum of money, the amount of the Barry certificate, with interest, and such was the verdict of the jury and the judgment. The action was founded upon an implied con-' tract, obligation or liability, and upon nothing else.

Second. Fraud is not stated as a grotmd of relief, nor does the complaint contain any allegations to bring it within that subdivision.

Third. Nor was fraud of any kind, or facts from which fraud on the part of Mulford might be implied, proven against him. The facts assumed, therefore, by plaintiff’s counsel cannot be admitted. Mulford’s character and liability as trustee, if there were any, results not from any act of his own or of the plaintiff, or her assignors, but from the application of the doctrines of equity, which regards him as standing in that relation in order to give the plaintiff a remedy. There was a misapplication of the plaintiff’s money, but it was a 1 ‘ misapplication by the county treasurer and not by the defendant; he was held liable because the firm of which he was a member received the benefit of money derived from the certificate after the other defendant made such misapplication of the trust fund. From that and not from any fraud, or knowledge of fraud, or misapplication, a contract liability to make restoration was implied. Fraud was not the ground of the action, nor was it established by proof, and the limitation of six years, provided for by section 382, subdivision 1, applies. Carr v. Thompson, 87 N. Y., 160.

The judgment appealed from should be reversed and a new trial granted, with costs to abide the event.

All concur except Bapallo, J., absent.  