St. John v. Coates

18 N.Y.S. 419, 70 N.Y. Sup. Ct. 460, 45 N.Y. St. Rep. 431, 63 Hun 460

• Court: New York Supreme Court
• Decided: March 31, 1892
• Status: Published

Opinion

Andrews, J.

This action was commenced on October 3,1877, against one-George H. Peck, now deceased. The allegations of the complaint are, in substance, as follows: That in 1866 the said Peck conveyed to one Lewis St. John, by deed, an undivided 20|-96 of a certain farm of land containing about. 100 acres, situated in Venango county, Pa., called the “Booker Farm;” that said. farm contained oil wells, and that, the same having been leased for a. percentage of the oil produced, large sums of money were realized from the sale of such oil, and large profits were also realized from the letting of portions of said farm for building lots; that s&id Lewis St. John was entitled to-20|-96 of said rents and profits; that said Peck received large sums of money-as manager of the said property,.which belonged to said St. John, but neglected to pay over the same; that said Lewis St. John conveyed by deed to one Ellen Cole an undivided 10-96 of said farm, for which proportion said St. John, thereafter was bound to account to said Ellen Cole, (the deed to her not having been recorded;) that said Lewis St. John and said Ellen Cole assigned to-the plaintiff all their interest in the premises; that the plaintiff demanded of said Peck that he render an account of the moneys received and paid by him for said Lewis St. John, but that he did not do so. Therefore plaintiff prays that an accounting may be taken of such moneys, and that the defendant-may be adjudged to pay to the plaintiff anything which shall, upon the taking of such account, appear to be due to the plaintiff. The answer denies that the defendant conveyed a portion of said farm to Lewis St. John, or that-said Lewis St. John was entitled to 20|-96 of the rents and profits, or that said Peek received any money belonging to said Lewis St. John, or that Lewis St. John ever assigned to the «plaintiff any part of his interest in the premises; also alleged that Lewis St. John, for the previous two years, had been of unsound mind, and incapable of making any such assignment; also set up-the six-years statute of limitation, and an affirmative defense in the nature of a set-off, upon the ground that one Cole was agent of the property, and, with said Lewis St. John, wrongfully retained, appropriated, and converted. to their own use large sums of money due to the defendant, the amount of which exceeded the share or interest alleged in the complaint to have been assigned to the plaintiff by Lewis tit. John. A trial of the action was commenced at special term in 1878, and was concluded before a referee, who found for the plaintiff. Peck died soon after the trial, on November 1, 1879, and the present defendants were substituted in his place. On appeal, the general term reversed the judgment, and directed that a special issue be framed as to the mental capacity of said Lewis St. John. 25 Hun, 119, mem. Subsequently an order was entered, in 1883, at special term, settling 11 special issues to be tried by jury. Upon the first trial of these issues the jury disagreed as to some of them. Upon a second trial, all but three of said issues were stricken out by the court, and the jury returned a verdict as to those. On appeal the order of the circuit court striking out a part of the issues was reversed by the general term. Subsequently an order was entered by the special term in 1890, striking out the same issues, (9 N. Y. Supp. 934,) and this order was affirmed by the general term, (Id. 202.) Upon another trial of the issues, as resettled, the jury found (1) that Lewis St. John was mentally competent to make the assignment in question; (2) the defendants’ testator had made a deed to Lewis St. John, conveying 20|-96 of the Booker farm; (3) that the deed from Lewis St. John to Ellen Cole for 10-96 was bona fide. Subsequently the action was brought to trial at special term, and such trial resulted in judgment for the plaintiff for the sum above mentioned. From this judgment, and from an order denying a motion for a new trial on said issues, made upon the judge’s minutes, the present appeals were taken.

The transactions out of which this action arose are as follows: On August 30, 1866, the sheriff of Venango county, Pa., deeded to said Peck and others a tract of land in said county, known as the “Booker Farm.” The deed conveyed the property in the following proportions: To one Perry, 51-96; to said Peck, 24-96; to one Bates, 12-96; to one Baum, 6-96; to one Austin, 1-96; to one Matthews, 1-96; and to one Graves and Seager, jointly, 1-96; all expressed to be in undivided portions; and the deed was recorded September 6, 1866. On October 1, 1866, said Perry and his wife conveyed said 51-96 to said Peek,' and the deed was recorded October 10, 1866. It appears that Joseph H. Godwin and Augustus A. Conover and Bhoades Cole were interested with Peck in the purchase of such 75-96 of the farm, and Cole stated to Peck that one Lewis St. John (plaintiff’s assignor) was equally interested within him in a fractional share thereof. Cole went to the farm, and acted as a superintendent, under a power of attorney from Peek and the other owners, collecting the rents and royalties, paying expenses, and remitting to Peck what purported to be 75-96 of the net income. The money so received Peck distributed, in the proportions above indicated, to Godwin and Conover, retaining his own share, and paying to St. John, by Cole’s direction, the joint share of Cole and St. John. Up to June, Peck had received from Cole $33,750, which had been so distributed. It is claimed by the defenants that about this time Cole confessed to Peek that he and St. John had been sinking oil wells in Pennsylvania on their own private and joint accounts, and that Cole had taken moneys from the income of the Booker farm, which should have been remitted to Peck, and had used the same on his own and St. John’s account in sinking such wells; that said Cole then agreed that until such misappropriations were made good all moneys sent by him to Peck should belong to and be divided between Godwin, the personal representative of Conover, (who had died prior to February, 1867,) and Peck, and that St. John consented to such agreement; that from that time on Peck distributed the moneys received by him in accordance with said agreement. In April, 1870, the production of oil having greatly diminished, Cole returned to New York, and resided there from that time to the time of the trial. It is also claimed by defendants that during the ensuing years, until .the end of 1876, Peck and St. John lived in New York, meeting occasionally, and that Cole had'been there since April, 1870, frequently calling at Peck’s office, but that no claims was ever made by Cole or St. John upon Peck for any moneys accruing from said farm, or that there were any unsettled matters between them. It appears by a stipulation made in the action that subsequent to June 30, 1868, Peck received of the productions of said farm the following sums: February 4, 1869, $800; July 20, 1869, $1,912.50; May 22,1870, $1,200; December 8, 1870, $1,500; April 28, .1871, $600; April, 1872, $541.50. It is strenuously insisted upon this appeal by counsel for the defendants that many errors were committed upon the trial of the issues at circuit in the admission and exclusion of evidence; also that the evidence did not justify the findings of the jury, nor those made at the special term, as to the mental capacity of Lewis St. John to make the assignments, or as to the making of a deed by Peck to St. John, conveying 20|-96 of said farm, or as to the bona fides of the deed from Lewis St. John to Ellen Cole. It is not, however, necessary to consider the points raised as to these matters, because, even if we accept the view of the facts most favorable to the plaintiff, and assume'that the findings of the jury and of the court upon those matters were correct, still we are of the opinion that the judgment must be reversed upon other grounds, viz., that a recovery of all amounts paid to Peck, except the last one of $541.50, was barred by the statute of limitations; and secondly, that no recovery could be had as to that item, because of the misappropriations of moneys by Cole, for the benefit of himself and St. John, and the subsequent agreement of Cole, consented to and acquiesced in by St. John, that the moneys paid over to Peck should be divided by him between Godwin, Conover’s estate, and himself, until such misappropriations were paid.

Plaintiff’s counsel claims that the relations between Peck and the other owners of the 75-96 of the farm were those of partners, but we do not think that this claim is well founded. In the first place, the complaint contains no allegation that such relation of partnership existed between Peck and the other owners of such 75-96. The allegation is that Peck conveyed an undivided 20|-96 to St. John, and that St. John conveyed an undivided 10-96 to Ellen Cole. This amounts to an allegation that Peck, St. John, and Ellen Cole were tenants in common. There is no allegation or suggestion to be found anywhere in the complaint in regard to such alleged partnership. According to the complaint, the right of plaintiff to recover is placed solely upon the fact that the parties were tenants in common, and that Peck, one of such tenants, had received rents and profits, of which a portion rightfully belonged to St. John and Mrs. Cole. Moreover, the only allegations in the complaint, upon which a claim for equitable relief can be founded, are those in which it is alleged that plaintiff had demanded an account of Peck, which demand had not been complied with, and the prayer for relief that such account be taken. The complaint has not been amended, nor does it appear that any application to amend it was made, and it would seem that the idea of a partnership was an after-thought, put forward to meet the exigencies of the case. If the owners of such 75-96 of the farm were partners, they or their representatives should all have been made parties to this action, and the fact that they were not tends to support the conclusion that it was not intended by the draughtsman of the complaint to rest the claim of the plaintiff upon the ground that the owners of such 75-96 were partners. Moreover, the evidence in the action does not establish such partnership. According to the agreement of the plaintiff, at the time payments were made to Peck the title of the property stood as follows: 10|-96 in St. John, by virtue of Peck’s conveyance to him; 10-96 in Ellen Cole, by virtue of St. John’s conveyance to her; 54J-96 in Peck, by virtue of the conveyance to him from the sheriff of Venango county and Perry, which 54J-96 belonged in equal parts to himself, Godwin, and the heirs of Conover; and 25-96 in the various other parties above mentioned.

Cole went to Pennsylvania, and acted as superintendent. His testimony as to what he did is as follows: “I never had but one power of attorney from* Mr. Peck. It was a power of attorney to act for George H. Peck for 75-96 of the farm, and collect the moneys. While 1 was out at the farm, I collected! the rents—royalties—for the oil sold, and paid the money to the different parties for the interest I held a power of attorney for. Isent 75-96 of the profits to Mr. Peck. The expenses were deducted by myself. I sent them the balance of the moneys after deducting expenses. Of the remaining interest, 12-96 were owned by one William A. Bates; 6-96 by Bond; 1-96 by Graves and Seager. I collected these. I had a power of attorney from them, and remitted them the money. I held a power of attorney from all parties. I remitted 75-96 to Peck, and the balance to the other parties. My position* was superintendent. * =5» * The income came from the production of the farm, the royalties of the wells, and rents. * * * My duties as superintendent were to lease the farm in half-acre plots for half-royalties,—the usual way of the oil business. I collected royalties, and gave 75-96 of them to Mr. Peck, and the other 21 shares were owned by others. I deducted expenses. What I sent to the owners was the net product. I might have received instructions from other persons, but I did not act upon any instruction or order of any other person than Peck, with respect to the 75-96.” The situation, therefore, was as follows: Peck, St. John, and Mrs. Cole, (the wife of Cole, the superintendent,) and other parties were tenants in common of this farm. Cole stayed at the farm, received royalties and rents, and, after paying expenses, sent 75-96 of the net balance to Peck, for distribution. These-facts do not establish a partnership between Peek, St. John, and Mrs. Cole, but merely that Peck, being a tenant in common with them, received certain moneys, which it is claimed it was his duty to pay .over to them.

Partnership, as between the partners, is a matter of agreement, and, so far as concerns the partners only, whether such agreement was made must depend upon the intention of the parties. There is no evidence whatever of any express agreement for a partnership between Peck and St. John or Mrs. Cole or any of the other persons who were interested in the property. Peek and Godwin both testified that there was no partnership, and Peck testified that he never knew anything about St. John’s having an interest in the property, except what Cole told him; and it certainly is difficult to understand how Peck can be regarded as having formed a partnership with Mrs. Cole„ simply because St. John conveyed 10-96 of the property to her. We are of the opinion that, assuming that Peek made the conveyance to St. John, and St. John to Ellen Cole, as claimed in the complaint, the relations between. Peck, St. John, and Mrs. Cole were not those of partners, but of tenants in* common, and that the six-years statute of limitations applies, notwithstanding the fact that the complaint prays for an accounting, because the plaintiff could have maintained an action at law to recover any moneys due him as assignee of his brother, Lewis St. John, and Mrs. Cole.

Section 1666 of the present Code provides that a tenant in common of reaB property, or his executor or administrator, may maintain an action to recover his just proportion against his co-tenant, who has received more than his own just proportion, or against his executor or administrator. If Peck, being a tenant in common with Lewis St. John and Mrs. Cole, had received more than his proportion of the rents and profits of the farm, they, or their assignee, could, under this section of the Code, have maintained an action* to recover their proportion. Moreover, independently of this provision of the Code, an action at law might have been maintained by Lewis St. John, and Mrs. Cole, or the plaintiff, as their assignee, to recover money had and received for their benefit, if it was true that Peck had received from Cole moneys which it was his duty to pay over to Lewis St. John and Mrs. Cole. “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 application. The scope of this remedy has been gradually extended to embrace many cases which were originally ■cognizable only in courts of equity.” Roberts v. Ely, 113 N. Y. 131, 20 N. E. Rep. 606. “ When money is received by one to and for the use of another, under such circumstances that it is his duty at once to pay it over, then an •action for money had and received may be brought to recover, without any ■demand; and in such case the statute of limitations begins to run from the day of the receipt of the money. . * *■ * Even if an accounting was necessary to determine the amount due from him to his brother, the account ■could be taken in an action at law as well as in an action in equity; and, in whatever form the action was commenced, the legal rule of limitations would be applicable. * * * All the relief asked for in the complaint is an accounting and a judgment for a sum of money, and no other relief was needed or possible upon the facts established. * * * It is said, however, that the defendant was, in some sense, a trustee of moneys received by him, and hence that the statute of limitations would not begin to run in his favor until he had repudiated the trust. But the defendant was not a trustee in the sense contended for. He had received money belonging to another, and became a debtor for the sum, and he is in no other sense a trustee than every one is who receives money to and for the use of another. There was no actual express trust of these moneys created by the act of the parties. * * * If the defendant was in any sense a trustee of the moneys received by him, it was simply an implied trust, which the law would raise for the purpose of justice; and, as to the liability growing out of such trust, the ordinary rules of limitation apply.” Mills v. Mills, 115 N. Y. 80, 85, 86, 21 N. E. liep. 714. “In cases of implied trust in regard to personal property, or to the rents and profits of real estate, where persons-, claiming in their own right, are turned into trustees by implication, the right of action in equity will be considered as barred at the end of the time limited by the statute in analogy to the limitation by a similar action at law.” Hawley v. Cramer, 4 Cow. 717. In Smith v. Bodine, 74 N. Y. 30, 33, where a claim was made for a portion •of the profits of the business, as compensation for services rendered in it, the court said: “The fact that a statement of account was necessary to establish liis claim did not require an equitable action; and the nature of the action was in no wise changed by the introduction of evidence showing how the account stood;” and also that “an accounting is proper in the action of law.”

Under these circumstances, the jurisdiction of the court to entertain this ■action for an accounting in equity was concurrent with its jurisdiction to entertain an action at law to recover the amount alleged to be due from the defendants to the plaintiff, and, upon all the authorities, where such concurrent jurisdiction exists, the six-years limitation applies. Kane v. Bloodgood, 7 Johns. Ch. 121; Bertine v. Varian, 1 Edw. Ch. 345; Atwater v. Fowler, 1 Edw. Ch. 422; Loder v. Hatfield, 71 N. Y. 103; Roup v. Bradner, 19 Hun, 517; In re Neilly, 95 N. Y. 390. In Kane v. Bloodgood, supra, the court ■said: “Courts of equity are bound to yield obedience to the statute of limitations upon all legal titles and legal demands, and cannot act contrary to the spirit of its provisions. I understand this proposition to mean that, if a party lias a legal title, and a legal right of action, and, instead of proceeding at law, resorts to equity,—instead of bringing his action of account or detinue or ease for money had and received at law files his bill for an account,— the same period of time that would bar him at law would bar him in equity. This is the principle that pervades the cases.” In Loder v. Hatfield, supra, the'court said: “An action at law might have been maintained against him therefor if the cause of action had accrued before his death or against his executors after his death; * * * so that equity had not exclusive cognizance of the demand. In such case the same law of limitation of action applies in both cases.” In Roup v. Bradner, supra, the court said: “Assuming that there was a trust which a court of equity would enforce, there was also a concurrent remedy at law, upon the agreement, and the six-years’ limitation applies.” In Re Weilly, supra, the court said: “When the complainant has a concurrent remedy in a court of equity and in a court of common law, time is as absolute a bar in equity as it is in law; * * * and in such cases the limitation as to actions at law applies.” In Butler v. Johnson, 111 N. Y. 204, 18 N. E. Rep. 643, the whole subject of the application ■of the statute of limitations to actions, in which there is concurrent jurisdiction in law and equity, was elaborately considered, and the court held as follows: “We think that causes of action which, before the adoption of the ‘Code, the two courts had concurrent jurisdiction over, or, in other words, where, the subject of the action was the same in both courts, and the remedy ■only was different, such actions are included in and provided for by the sections preceding the above-mentioned seventy-seventh section, and hence are not included in that section as within the ten-years statute.” In the case at bar, if the original defendant, Peck, received lrom Cole moneys which equitably belonged to St. John and Mrs. Cole, it was his duty to have paid them •over at once; and the statute of limitations began to run from the time he received the moneys. In point of fact, no accounting was necessary, for it appears by the testimony that before the action was brought Cole visited said defendant Peck, and examined his check-book, and ascertained that 'the amount which it is alleged Peck ought to have paid over to St. John for the benefit of himself and Mrs. Cole was the sum of $1,925, and that was the consideration named in the assignment from Lewis St. John to the plaintiff; and it was to recover that sum of money only that this action was brought. Hot •only was no accounting necessary, but, as a matter of iact, no accounting was had upon the trial.

We think it is clear upon the facts proved in this case that if Peck was indebted to the plaintiff as the assignee of his brother and Mrs. Cole, the plaintiff might have maintained an action for money had and received, and that the six-years statute of limitations applies to all of said payments, except the payment of $541.50, which was made on April 15, 1872. We are, moreover, of the opinion that the plaintiff cannot recover the said last item of $541.50, ibscause the evidence establishes that Cole, while acting as superintendent, ■misappropriated moneys which he should have paid over to Peck, and that he subsequently agreed that the proceeds of the farm should be distributed between Peck, Godwin, and the estate of Conover, until the amount of the ■misappropriation was made good; and that St. John consented to this arrangement. The ascertained amount of such misappropriation was, if Cole was entitled to a salary, $4,418.68. If he was not entitled to a salary, such misappropriations amounted to $11,710.35. The evidence tends strongly to establish the fact that he was not entitled to a salary. But it is not necessary to determine that question, because we consider that the statute of limitations bars a recovery as to all payments except the last, which was $541.50; and, if the misappropriation was no more than $4,418.68, such sum of •$541.50 could not be recovered if Cole and St. John agreed that the proceeds should be distributed between Peck and Godwin and the estate of Conover, until such sum of $4,418.68 was made good. We think that the evidence fully establishes that the misappropriation by Cole did amount to said sum of ■$4,418.68, and that Cole made the agreement in question. It is objected, .however, that such agreement did not bind Cole’s wife, to whom it has been found by the jury that St. John made a bona fide conveyance of 10-96 of the property. We think, however, tiiat the evidence shows that Cole was ‘the agent of his wife, and had full authority to act for her in making such agreement, and that such agreement was binding upon her. Peck testified that St. John consented to this agreement, and the conduct of Cole and St. John, after 1868, tends strongly to prove that such agreement was made by both of them. For more than eight years after Cole’s confession to Peck in regard to the misappropriation of the money, and for more than six years after his return to New York, Cole never made, or caused to be made, any claim upon Peck for any moneys alleged to be due to Cole’s wife, nor was any claim for such moneys made on behalf by any one. St. John lived continuously in Pfew York, and transacted business until October, 1876, and between 1868 and 1876 had interviews with Peck about matters relating to Pennsylvania oil interests, but during all this time made no claim to Peck that the latter had received any money from the Booker farm which it was his duty to pay over to St. John or to Mrs. Cole. In the mean time at least two-thirds of the money received by Peek after 1868 had been paid over by him to Godwin and the personal representatives of Conover, in reliance upon the agreement of Cole and St. John that the net proceeds should be distributed between Godwin, Conover’s representatives, and Peck, until the misappropriation had been made good. Under these circumstances, it certainly would be a great hardship if Peek, or his personal representatives, the present defendants, should be required to pay over to the plaintiff moneys paid out by Peck under such circumstances. ,

The plaintiff is not entitled to any especial consideration in a court of equity. It seems that in the fall of 1876, Lewis St. John had a stroke of apoplexy, and that his mind was somewhat affected thereby. The assignment Af his alleged claim against Peck to his brother, the plaintiff, was made after he had only partially recovered from such stroke of apoplexy, though the jury has found that he had sufficient mental capacity to make such assignment. It appears, however, that the plaintiff paid nothing for the claim, but took it on account of an alleged antecedent debt.

It appears also by the testimony that Cole was active in promoting this stale claim against the original defendant, Peck. Lewis St. John, who had made no claim on his account for over eight years, was induced to execute-the assignment to- his brother, the plaintiff, and thereupon Mrs. Cole also executed to plaintiff an assignment of her alleged interest in such claim. The-plaintiff tnerefore represents the alleged interest of his deceased brother, for which he paid nothing, and also the interest of Mrs. Cole, who is the wife of Cole, whose misappropriation of moneys led to all the trouble. We think the evidence establishes the misappropriation by Cole, and the agreement by himself on behalf of his wife, which was consented to and acquiesced in by St. John, that, until the misappropriation was made good, Peek should distribute the moneys in the manner above specified; and, even if the consideration of all the testimony in the ease has led to a doubt upon these points, as the burden of proof was upon the plaintiff to establish his case by a preponderance of evidence, we should think that the defendants ought to have the benefit of any such doubt. Upon the whole ease, we think that the judgment should-be reversed, and a new trial ordered, with costs to appellants to abide event.