Yambt, J.
The assignment from Decker to Greenfield and the declaration of trust by the latter constituted a contract to which the Produce Bank was not a party. Its rights were not direct, but derivative. It was not a creditor of Greenfield, but of Decker, and its rights against the former were derived through the latter by virtue of the trust contract. It could only enforce those rights by enforcing the trust upon which they depended. It could enforce the trust only by an action to compel the trustee to account and to apply the moneys received by him to the purposes specified in the declaration of trust. In order to succeed in such an action it would not be enough for it to show that the trustee had on hand moneys applicable to the trust, but it would also be required to show that it had a
stains
to maintain the action, either by proof that it owned a claim covered by the trust, or that it had owned such a claim and had transferred it to another, but was still liable over as indorser or surety. Thus the plaintiff, as the legal representative of the Produce Bank, could compel an accounting by the trustee after it had parted with its claim to the Continental Bank, provided it still remained liable to the latter for the payment thereof. Such was his theory in bringing this action, so far as it is disclosed by the complaint, and it is obvious that it was not an action at law to recover a definite sum of money, but a suit in equity to enforce a trust, by compelling the trustee to do Iris duty. “ The beneficiary,” says Mr Pomeroy, “ being the true owner, may always, by means •of an equitable suit, compel the trustee to convey or assign the corpus of the trust property and to account for and pay •over the rents, profits, issues and income which he has actually received, or in general which he might, with the exercise of reasonable care and diligence, have received.” (Pomeroy’s !Eq. Jur. § 1058.)
The same learned author further says: “The jurisdiction ■exists, therefore, and it is well established, but the question arises, since there is a similar jurisdiction at law, when may a suit in equity for an accounting be brought? This '.question, of course, does not arise in those cases where an accounting is decreed as an incident to other equitable relief; nor should it arise where the subject-matter is an equitable interest or estate, for here the jurisdiction should be exercised as a necessary consequence, without regard to legal remedies.” (Id. § 1420.)
“
Ho precise rule can be laid down on the subject, but it may bfe stated generally that in all cases in which an action of ■account would be the proper remedy at law, and in all cases where a trustee is a party, the jurisdiction of a court of equity over accounts is undoubted.”
(Whiton
v. Spring, 74 N. Y. 171;
Farwell
v.
Importers & Traders’ Nat. Bank,
90 id. 491; 1 Wait’s Actions & Defenses, 174.)
This action was not based upon an “ account stated,” within the proper meaning of that term, because the relation of ■debtor and creditor did not exist between Greenfield and ■either of the banks.
(Lockwood
v. Thorne, 18 N. Y. 292 ; 1 Am. & Eng. Encly. of Law, 324.) Mr. Decker, the creator of the trust, was the debtor, the banks were the creditors and beneficiaries, while the trustee was the executive officer of the trust, and for that purpose clothed with the legal title. The statement rendered was not made out by the trustee, although he pronounced it correct. It was important as evidence, but not controlling as a basis upon which to found an action. An ¡admission that there was a balance on hand, did not admit that the plaintiff had any interest in it, or that it belonged to any of the primary beneficiaries, for it was consistent with ownership by Decker, the ultimate beneficiary. As was said by the learned General Term, it “ was but an incident of pleading .and proof in an action calling for the application of the ascertained balance to the trust purposes,” but “settled nothing ■with regard to the extent of the plaintiff’s demand against the ascertained balance.”
(Volkening
v.
DeGraaf
81 N. Y. 271.)
These views are confirmed by the demand for judgment, which, although not decisive, illustrates the theory of the action. There is no demand for the recovery of any sum of money, but for an accounting and the application of any balance found due to the purposes of the trust. We think that the action was equitable in its nature, and that the motion and the application for a trial by jury were properly denied.
The main question arising upon the appeal from the judgment is whether the declaration of trust embraces notes discounted after its date. The answer to this question must be found in the declaration itself, which is the charter defining the powers of the trustee. By that instrument he acknowledged that he was trustee for a single purpose only, viz.: To-pay out of the moneys received under the contract for the-Riverside Drive “ all liens, claims, debts and demands growing-out of said work and existing against the firm of hi. H. Decker
&
Co., or either member thereof as such, by reason of said work.” It was a trust to receive certain moneys and to make-certain payments therefrom. When this was done,, the powers-of the trustee, under that instrument, were ended, and his remaining duty was to account to Decker for all moneys so-received, and to pay over to him the balance remaining after making the payments which formed the primary object of the trust. Although the theory of the plaintiff, according to liis complaint, was that the trust covered simply notes discounted by the Produce Bank prior to January 24, 1880, the common date of the assignment, the declaration and the dissolution of the firm of N. H. Decker & Co., still he claimed upon the-trial, and judgment was rendered in his favor on the theory, that notes discounted after that date were also included. The expression “ growing out of said work ” would support either theory, as it might refer with propriety to the past or the future, or both, but the demands to be paid are further defined as
existing
demands. By this is meant demands existing at the date of the instrument, and not at the- date of payment, or at any indefinite date in the future. Reference is not made to claims thereafter to be created, but to those existing against
the firm that day dissolved, or either member thereof, as such. How was it possible for a claim against that firm, or against either member thereof, as such, to be created after the firm had been dissolved? If original discounts were afterwards made by the Produce Bank for Decker, or for a new firm organized by him, they were not existing demands within the meaning of the declaration of trust, and could not be paid by the trustee without further authority from the creator of the trust, and even then only out of the surplus that otherwise would have been going to him after all the other beneficiaries had been satisfied. The contract which bounds the rights of the parties does not refer to work done and to be done, or to debts created and to be created, but to existing debts growing out of the work.
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Yambt, J.
The assignment from Decker to Greenfield and the declaration of trust by the latter constituted a contract to which the Produce Bank was not a party. Its rights were not direct, but derivative. It was not a creditor of Greenfield, but of Decker, and its rights against the former were derived through the latter by virtue of the trust contract. It could only enforce those rights by enforcing the trust upon which they depended. It could enforce the trust only by an action to compel the trustee to account and to apply the moneys received by him to the purposes specified in the declaration of trust. In order to succeed in such an action it would not be enough for it to show that the trustee had on hand moneys applicable to the trust, but it would also be required to show that it had a
stains
to maintain the action, either by proof that it owned a claim covered by the trust, or that it had owned such a claim and had transferred it to another, but was still liable over as indorser or surety. Thus the plaintiff, as the legal representative of the Produce Bank, could compel an accounting by the trustee after it had parted with its claim to the Continental Bank, provided it still remained liable to the latter for the payment thereof. Such was his theory in bringing this action, so far as it is disclosed by the complaint, and it is obvious that it was not an action at law to recover a definite sum of money, but a suit in equity to enforce a trust, by compelling the trustee to do Iris duty. “ The beneficiary,” says Mr Pomeroy, “ being the true owner, may always, by means •of an equitable suit, compel the trustee to convey or assign the corpus of the trust property and to account for and pay •over the rents, profits, issues and income which he has actually received, or in general which he might, with the exercise of reasonable care and diligence, have received.” (Pomeroy’s !Eq. Jur. § 1058.)
The same learned author further says: “The jurisdiction ■exists, therefore, and it is well established, but the question arises, since there is a similar jurisdiction at law, when may a suit in equity for an accounting be brought? This '.question, of course, does not arise in those cases where an accounting is decreed as an incident to other equitable relief; nor should it arise where the subject-matter is an equitable interest or estate, for here the jurisdiction should be exercised as a necessary consequence, without regard to legal remedies.” (Id. § 1420.)
“
Ho precise rule can be laid down on the subject, but it may bfe stated generally that in all cases in which an action of ■account would be the proper remedy at law, and in all cases where a trustee is a party, the jurisdiction of a court of equity over accounts is undoubted.”
(Whiton
v. Spring, 74 N. Y. 171;
Farwell
v.
Importers & Traders’ Nat. Bank,
90 id. 491; 1 Wait’s Actions & Defenses, 174.)
This action was not based upon an “ account stated,” within the proper meaning of that term, because the relation of ■debtor and creditor did not exist between Greenfield and ■either of the banks.
(Lockwood
v. Thorne, 18 N. Y. 292 ; 1 Am. & Eng. Encly. of Law, 324.) Mr. Decker, the creator of the trust, was the debtor, the banks were the creditors and beneficiaries, while the trustee was the executive officer of the trust, and for that purpose clothed with the legal title. The statement rendered was not made out by the trustee, although he pronounced it correct. It was important as evidence, but not controlling as a basis upon which to found an action. An ¡admission that there was a balance on hand, did not admit that the plaintiff had any interest in it, or that it belonged to any of the primary beneficiaries, for it was consistent with ownership by Decker, the ultimate beneficiary. As was said by the learned General Term, it “ was but an incident of pleading .and proof in an action calling for the application of the ascertained balance to the trust purposes,” but “settled nothing ■with regard to the extent of the plaintiff’s demand against the ascertained balance.”
(Volkening
v.
DeGraaf
81 N. Y. 271.)
These views are confirmed by the demand for judgment, which, although not decisive, illustrates the theory of the action. There is no demand for the recovery of any sum of money, but for an accounting and the application of any balance found due to the purposes of the trust. We think that the action was equitable in its nature, and that the motion and the application for a trial by jury were properly denied.
The main question arising upon the appeal from the judgment is whether the declaration of trust embraces notes discounted after its date. The answer to this question must be found in the declaration itself, which is the charter defining the powers of the trustee. By that instrument he acknowledged that he was trustee for a single purpose only, viz.: To-pay out of the moneys received under the contract for the-Riverside Drive “ all liens, claims, debts and demands growing-out of said work and existing against the firm of hi. H. Decker
&
Co., or either member thereof as such, by reason of said work.” It was a trust to receive certain moneys and to make-certain payments therefrom. When this was done,, the powers-of the trustee, under that instrument, were ended, and his remaining duty was to account to Decker for all moneys so-received, and to pay over to him the balance remaining after making the payments which formed the primary object of the trust. Although the theory of the plaintiff, according to liis complaint, was that the trust covered simply notes discounted by the Produce Bank prior to January 24, 1880, the common date of the assignment, the declaration and the dissolution of the firm of N. H. Decker & Co., still he claimed upon the-trial, and judgment was rendered in his favor on the theory, that notes discounted after that date were also included. The expression “ growing out of said work ” would support either theory, as it might refer with propriety to the past or the future, or both, but the demands to be paid are further defined as
existing
demands. By this is meant demands existing at the date of the instrument, and not at the- date of payment, or at any indefinite date in the future. Reference is not made to claims thereafter to be created, but to those existing against
the firm that day dissolved, or either member thereof, as such. How was it possible for a claim against that firm, or against either member thereof, as such, to be created after the firm had been dissolved? If original discounts were afterwards made by the Produce Bank for Decker, or for a new firm organized by him, they were not existing demands within the meaning of the declaration of trust, and could not be paid by the trustee without further authority from the creator of the trust, and even then only out of the surplus that otherwise would have been going to him after all the other beneficiaries had been satisfied. The contract which bounds the rights of the parties does not refer to work done and to be done, or to debts created and to be created, but to existing debts growing out of the work. It does not appear that any work was done after the date of the trust agreement, which does not suggest that the work was incomplete, nor contemplate that the contract with the city, if in any respect unperformed, Avas to be completed by the trustee. It was not a trust to do work for the city, for nothing of that kind is mentioned, and the assignment, as recited in the declaration, was
“
of certain interests in the profits and proceeds of the work on the Hiverside avenue * * -x- aUfi the contract therefor ” with the city authorities. On the other hand, as already suggested, it was a trust simply to receive, apply and account, and the application was expressly limited to claims already in existence. For these reasons, we are of the opinion that the courts below misconstrued the declaration of trust, and as it may appear upon another trial that Decker consented that the trust should extend to debts created after January 21, 1880, we do not dismiss the complaint, but order a new trial.
The order denying the motion for a trial by jury should be affirmed, Avithout costs, but the judgment should be reversed and a new trial granted, Avith costs to abide event.
All concur, except Bbadley, J., dissenting.
Judgment reversed and ordered accordingly.