Case ID: misc_1/html/0475-01.html
Source: Caselaw Access Project
Author: {"author": "Fitzsimons, J. Ehrlich, Ch. J. (dissenting).", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Gauld v. Lipman.
    (City Court of New York—General Term,
    December, 1892.)
    Defendants obligated themselves to advance to one H., who was building houses, a sum of money, payable in installments, when said buildings reached certain stages in the course of their erection. Thereafter H. gave plaintiff two orders on defendants for $500 each, which they agreed to pay at a certain specified time. In an action brought on said orders for money had and received, after defendants had refused to pay, a verdict for the full amount was directed by the court in favor of the plaintiff. Held, proper; that the trial court having found sufficient evidence to justify it in deciding that at the time of the demand of payment made by plaintiff on defendant that the amount named in the orders was due H. from defendant, thereupon said orders immediately operated as an equitable assignment of H.’s claim against defendant to the extent of the amount named therein. That the action was proper in form, it being to recover money which plaintiff was equitably entitled to.
    Appeal from judgment entered on verdict directed in favor of plaintiff.
    The facts are stated in the opinion.
    
      George W. McAdam, for defendants (appellants).
    
      Jacob Fromme, for plaintiff (respondent).
   Fitzsimons, J.

The appellants were obligated to advance to one Hamilton, who was building houses, a sum of money, payable in installments when said buildings reached certain stages in the course of their erection.

Hamilton gave plaintiff two orders, each one dated September 29, 1891, directed to defendants, to pay him $1,000, these orders they agreed to pay as follows: One for $500 when the eleventh payment became payable under a certain building loan contract, and the other one for $500 when the last payment under said contract was due; on September 19,1892, plaintiff demanded payment of said $1,000 from defendants, which was refused.

This action was then commenced, which resulted in a verdict for plaintiff, by direction of the court, for $1,000, both parties, having moved for a verdict. If, on September 19, 1892, when the demand for said $1,000 was made, defendants owed that amount under their builder’s loan contract to Hamilton, then the orders given by him to plaintiff operated as an equitable assignment of his claim against defendants to that extent. Lawrence v. Fox, 20 N. Y. 268.

There was sufficient evidence to justify the trial justice in deciding that such a sum was due Hamilton at that time, and we are not inclined to disturb that finding; that being so, this action was properly brought. An action for money had and received, may be brought where a person holds in his hands money to which another is equitably entitled. This form of action is the one adopted by common-law courts to enforce an equitable obligation. The scope of this remedy has been gradually extended to embrace many cases originally cognizable only in a court of equity. Wherever one person has in his hands money which he cannot conscientiously retain from another, the latter may recover in this form of action. Roberts v. Ely, 113 N. Y. 128-131.

The motion made by both sides for a verdict entitled the trial justice to direct a verdict as he did. Ho error was committed. And the judgment must be affirmed, with costs.

Newburger, J., concurs.

Ehrlich, Ch. J. (dissenting).

The action for money had and received is equitable in its nature, and maintainable whomever the plaintiff is ex argus et bono entitled to the money claimed (Chapman v. Forbes, 123 N. Y. 532), yet it is founded on the theory that the defendant has received money which of right belongs to the plaintiff.

There is no evidence that the defendants ever received any moneys to or for the use of the plaintiff, to which these principles can be applied.

I gather from the proofs, that the defendants made a building loan contract with one Hamilton, by which they were to advance him money as certain buildings in course of erection progressed, and the orders drawn by Hamilton, on the defendants, were accepted by them, payable when the eleventh payment became due, under the loan contract.

The complaint being for money had and received, omitted all allegations touching the progress of the buildings, or that the eleventh advance had become due, so that the defendants could not take issue in respect to these material matters.

To recover, the plaintiff was obliged to prove facts not alleged, and while this may be done in the action where a defendant receives money which equitably belongs to a plaintiff, I do not think the rule can be extended to a case where a defendant never received money to and for the use of another, but merely agreed, as in this case, to advance certain money of his own.

The defendants objected all the way through the case, to the proofs offered under the complaint, insisting that they must conform thereto, and that as the allegations did not conform to the proofs offered, they were not admissible.

The objection was in each instance overruled, as the action was not technically one for money had and received.

I think the exceptions to the admission of the evidence, well taken, and that the action should have been on the transaction alleging it, in the manner in which it was required to be proved.

This conforms to the rule laid down in Riggs v. Chapin, 27 N. Y. St. Repr. 268, as well as in the recent case of Shrimpton v. Dworsky, decided by the Common Pleas, General Term. N. Y. Law Journal, December 12, 1892.

For these reasons, the judgment appealed from should be reversed, and a new trial ordered, with costs to the appellants, to abide the event.

Judgment affirmed. 
      
      49 N. Y. St. Repr. 139.