
    Citizens' Central National Bank of New York, Appellant, v. Harry L. Toplitz, Respondent.
    First Department,
    May 11, 1906.
    Executor and administrator — assignment of legacy by order on fund — when administrator with will annexed not liable to action at law — when complaint does not state cause of action — proper remedy of payee. '
    If a legatee, for a valuable consideration and to secure the payment of a"loan, gives an order drawn upon the administrator with the will annexed, payable out of his legacy to become due, the administrator, after notice, is bound to apply the legacy to the payment of the order. But such order and an assent thereto by the administrator do not prevent him from making a partial- dis, tribution to the legatee, if he retain in his hands sufficient moneys to pay the order, nor does such partial distribution constitute a breach of the obligation to pay the order, for it is not implied in such assignment of part,of the legacy that the assignee is to be paid first.
    The administrator, by recognizing the order and promising to pay the assignee out of the legacy, assumes no personal liability, but merely agrees to pay the order if the legacy be sufficient.
    Hence, when the assignee, before an accounting, brings an action at law against the administrator and alleges that after the partial payment to the legatee there still remains sufficient moneys to pay the plaintiff, the complaint"fails to state a 'cause of action.
    
      If the validity of the order is admitted by the administrator; the payee’s remedy is a proceeding in the Surrogated Court for an accounting; and if. -the validity of the order is denied, then the remedy is in equity, for the Supreme
    ■ ' Court has concurrent jurisdiction with the Surrogated Court to. compel an ' ■ administrator to account, and* will entertain the action under such special . circumstances.
    Hence, aside from .the insufficiency of the. complaint hy reason uf alleging that the administrator still has sufficient funds to pay, it also fails to state a cause of action by laying the action at law instead of in equity.
    ■ ■ Appeal by the plaintiff,, the'Citizens’ Central National Bank of' New York, from a judgment of the Supreme Court in favor of the defendant, entered' in the office of the clerk of the county of New York on the 14th day of November, 1905, upon the dismissal of the complaint by direction of the court after a trial at the New York Trial Term, and also from an order entered in said clerk’s.office on the 10th day of November^ 1905, denying the plaintiff’s motion for. a new trial made upon the minutes.
    
      Charles Blandy, for the appellant.
    
      Richard L. Sweezy, for the respondent.
   Houghton, J.:

The plaintiff’s complaint was dismissed on the trial on the ground . that it failed to state a cause of action. The; defendant is the administrator with the. will annexed of the last will and testament of Lippmari Toplitz, deceased,

■ Two of the testator’s sons werp Solomon'B. and Samson L., and each was entitled under such will to one-twelfth of the residuary estate, ’ / ■

The complaint alleges thesp facts, and in addition that Solomon and .Samson made their joint and several promissory note for the sum of $10.,G00, payable six months from date, and procured it to 'be discounted by the Ninth National Bank of the city of New York, and that 6n the day of the date of the note they assigned and set over to' such bank, by an instrument in writing duly executed, ’the sum of $5jO0O each out of their respective shares in the personal estate of said testator thereby authorizing and directing the defendant to retain from any distribution he might make such sum, and in case the note was not paid when due to. pay said amounts to the holder of such note, charging the amount against them, which assignment was presented to-the defendant personally and. accepted by him, and that the defendant thereupon promised and agreed that the same would be complied with by him, and the amount so assigned to said Ninth National Bank as aforesaid be paid to said bank when the moneys to pay the same came into his hands; ” that the note was not paid whSn due, of which defendant was notified, and from whom payment Out of such ■ distributive shares was demanded and refused; that the makers had paid $4,000 thereon, and that $6,000 remained due; that there came to the hands of •defendant as such administrator for distribution under said will, belonging to the assignors, more than sufficient moneys to pay the balance due on the note, and that instead of applying such moneys thereto, the defendant, notwithstanding his notice of such assignment and his acceptance thereof, and without notice to the bank and in disregard of its rights, paid over to Solomon and to Samson $4,000 each. The complaint further alleges that defendant as such administrator with the will annexed now has in his hands the sum of over Forty-two thousand ($42,000) dollars, moneys belonging to said estate of Lippman Toplitz, deceased, for further distribution, and in and to which said Solomon B. Toplitz and Samson L. Toplitz are entitled to share in the proportions aforesaid.” Then follow allegations of demand of payment' of defendant, and refusal, bankruptcy of Solomon and insolvency of Samson, and assignment of the claim of the Ninth National Bank of the city of New York to this plaintiff, with a demand of judgment for $6,000 and interest.

The theory of the plaintiff is that the defendant having been notified of the assignment, and having accepted it, or assented to it, became personally liable to pay whatever might remain unpaid on the note, particularly when he distributed $4,000 to each of the assignors in disregard of the assignment.

If the defendant individually had had dealings with Solomon and Samson, out of which a particular fund'had become due or was to grow due to them, an order given by them to another upon him would have operated as an assignment joro tanto of the fund, and an action thereon at law would lie. The rule is, that where, for a valuable consideration received from the payee, an order is drawn upon a third person, payable out of a particular fund then dtie or to grow due from him to the drawer, the delivery of the order to the' payee operate^ as an assign'ment pro tg,nto of the fund; the drawee is bound, after notice thereof, to apply the fund, as it accrues, to the payment of the order, and the payee may by action compel such application. (Brill v. Tuttle, 81 N. Y. 454 ; Lauer v. Dunn, 115 id. 405.) So,' too, if the defendant in the present 'casé, in disregard of /the assignment of which he had notice, had paid to. the assignor legatees the full amount of their legacies, certainly in. Surrogate’s Court on an acoünting, and possibly in an action at law, he would have been liable to repay the amount which lie had wrongfully paid to those who'had parted with their title. '

Conceding, but not deciding,'that an action at law might be maintained under Such" a state of facts, the‘complaint cannot be sustained on that theory, because it alleges that the defendant now has in his hands as administrator with the will annexed more than $42,000, two-twelfths of which would be more than sufficient to-' pay the plaintiff’s claim. From the allegations of the complaint -it, therefore, appears that at the time the ■ plaintiff’s assignor received its ■ assignment tliere was in the defendant’s hands, belonging to the assignor legatees, the $8,000, which was paid to them, arid the' $7,000 which- remains in .the-defendant’s hands'belonging to them. The assignment, is not alleged to' have provided that the first distri-. bution of the estate should be applied to it; or that the- ágreemeut was that nothing .should be paid to the legatees until the plaintiff’s claim should have been satisfied. Distribution by the defendant to the' legatees did not operate as a- breach of trust or implied agreement on the part of the defendant so long as he retained in his hands a sufficient amount to -satisfy the plaintiff’s demand. The most, that the defendant was obliged to do by the strictest interpretation of the implied agreement which arose when he received and accepted notice of the order drawn, upon’him was to retain enough moneys to satisfy the plaintiff’s claim out of' the shares -o-f the assignor, legatees. While it is alleged that the defendant agreed to pgy the note in case-it was dishonored, from the funds belonging to the two legatees who had given the order, the fail- interpretation, of the complaint is that he agreed-to pay this amount only but of the funds coming to- his hands as administrator With the will. annexed of the estate of the deceased belonging to such legatees. If he received nothing he was to pay nothing. If he received more than enough he was to retain enough for that purpose. The allegation that he agreed to make- the payment is a mere- conclusion of law flowing from the facts stated. It was with respect to his management and distribution of the estate that the defendant contracted, if he contracted at all. A determination of this fact would require an inquiry into his acts as administrator. This would involve an accounting to the extent of ascertaining how much of the estate there was for distribution to the two legatees, and how much had been paid to them individually, and how much remained to be applied upon the order or assignment which they had given to plaintiff’s assignor. This inquiry would necessitate a form of action in which an accounting could properly be had., Such is not the form of action which the plaintiff has seen fit to bring. If the complaint had alleged that the defendant had paid out all the funds in his hands and that none remained belonging to .the legatee assignors with which plaintiff could be paid on a motion to dismiss, that allegation would necessarily be taken as true. ¡Nevertheless, on coming to trial the plaintiff would have been compelled to prove that fact if the defendant should not admit it, and that issue would involve the whole question of how much money the plaintiff received as administrator and how much he had paid out, which would be in effect an accounting of his acts as such officer. Eliminating, therefore, the allegation of the complaint that the defendant still retains in his hands moneys sufficient to satisfy the plaintiff’s demand, as the plaintiff urges us to do, still an accounting is a necessity and the complaint is fatally defective because it is not framed for that relief.

1A valid assignment of a portion of the legacies of the two legatees is plead. Having that assignment, the plaintiff could go into the Surrogate’s Court, which is the appropriate tribunal for that purpose (Hard v. Ashley, 117 N. Y. 606), and call the defendant to account as administrator with the will annexed. ,If it was fearful that the assignment to it was to be attacked, and that the surrogate would have no jurisdiction to determine its validity, it could bring an action for an accounting" in the Supreme Court. The Supreme Court has concurrent. jurisdiction with the Surrogate’s Court to call an executor or administrator to account, and will entertain an action for that ^purpose when it is shown that the circumstances of the case are such as to require relief of a nature • which could not be obtained in the Surrogate’s Court. (Haddow v. Lundy, 59 N. Y. 320, 326 ; Sanders v. Soutter, 126 id. 193.) ' An actual or probable attack upon the validity of' the assignment of a legacy or distributive share, concerning which the Surrogate’s Court has no jurisdiction to- adjudicate, would constitute a circumstance authorizing the Supreme Court, to entertain the action. But .such an action would be one in equity for that specific purpose. The present complaint is framed at law, and seeks to charge the defendant personally with payment of the order which operated as an assignment of a portion of the legacies coming to plaintiff’s assignors from the estate which it was- the defendant’s duty as administrator with the will annexed to administer. -By acceptance of the order he did not bind himself personally and absolutely to pay it, but only to pay in case sufficient funds'should be received by him in his official capacity. Aside from the allegation that lie still holds sufficient funds to satisfy the plaintiff’s demand, we think no action lies against him until an accounting, and that the complaint not being framed for that purpose was properly dismissed.

The judgment and- order should be affirmed, with costs.

O’Brien, P. J., Patterson, McLaughlin and Laughlin, JJ., concurred.

Judgment and order affirmed, with costs. Order filed.  