Case Name: The Empire State Surety Company, Appellant, v. Frederick W. H. Nelson, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1910-12-30
Citations: 141 A.D. 850
Docket Number: 
Parties: The Empire State Surety Company, Appellant, v. Frederick W. H. Nelson, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 141
Pages: 850–852

Head Matter:
The Empire State Surety Company, Appellant, v. Frederick W. H. Nelson, Respondent.
Second Department,
December 30, 1910.
Guardian and ward — use of trust funds to pay personal . debt —.action against payee for money had and received — security given by guardian immaterial — court — jurisdiction-of Municipal Court.
Where a special guardian pays his personal debt not related to his guardianship with moneys held- for his ward to a creditor who receives payment -knowing that it. was made from the guardianship funds, the ward or his assignee may maintain an action at. law .against the payee for money had and received.
It is immaterial that the guardian had given a bond for -the faithful performance of his, duties, or that the money received by the defendant is impressed with a trust. .
Where the creditor was paid by the guardian with a check signed by-him as “Special Guardian,”- he will be regarded as having constructive notice that.the check was drawn upon the trust funds.-'
The -Municipal Court of the city of New York has jurisdiction of such action .at law for money had and received.
Appeal by-the plaintiff, the Empire -State Surety Company, from a- judgment of -the Municipal Court of the city of blew York, borough of Brooklyn, in favor of the defendant, rendered on the 29th day of June, 1910, sustaining the defendant’s demurrer to the amended complaint upon the ground that the court did not have jurisdiction of the cause of action.
Leon N. Futter, for the appellant.
James A. Sheehan, for the respondent. ; z

Opinion:
High, J.:
The defendant by his demurrer admits that' one Daniel F. Doherty, special guardian of plaintiff's assignors, paid his personal debt, amounting to $169.95, not connected in any manner with his guardianship or the estate of the infants he represented, to.the defendant with the money coming-Into his hands as such guardian, the defendant knowing at the time he received such payment that it was made from guai dia-nship funds, and that such guardian never accounted to the infant's, or paid over the money lie liad so wrongfully and without' authority paid to the defendant. These facts entitled the plaintiff, as assignee of the minor wards, to maintain an action at law .¿gainst the defendant 'for money had and reeeivéd, which is the cause of jifitibn alleged in the amended complaint. (Roberts v. Ely, 113 N. Y. 128; Town of Bleecker v. Balje, 138 App. Div. 706; Weston v. Brown, 158 N. Y. 360, 368.) The check with whiclyDoherty paid his personal debt' to defendant is signed by tiim/ás "Special Guardian," which brings the case within the rule declared in First Nat. Bank v. Nat. Broadway Bank (156 N. Y. 459, 467, 468); Rochester & Charlotte Turnpike Road Co. v. Paviour (164 id. 281, 286, 287); Ward v. City Trust Co. (192 id. 61, 69), and Gerard v. McCormick (130 id. 261). It is immaterial that Doherty gave a bond for the faithful performance of his duties (Fellows v. Longyor, 91 N. Y. 324, 331), or whether the < money in the possession of the defendant is impressed with a trust. (Merino v. Munoz, 99 App. Div. 201, 203.) The action being one for money had and received is one of which the Municipal Court had jurisdiction. (Dechen v. Dechen, 59 App. Div. 166; Pache v. Oppenheim, 93 id. 221; Devery v. Winton Motor Carriage Co., 49 Misc. Rep. 626; Cohen v. Small, 120 App. Div. 211.)
The judgment must, therefore, be reversed, with costs, with the right to defendant upon the payment of such costs within twenty ' days to answer upon the merits.
ITirschberg, P. J., Woodward and Carr, JJ., concurred; Burr, J., not voting.
'Xj.udgment of the Municipal Court reversed, with costs, with leave tXdefendant, upon payment of such costs within twenty days to answer 'apon the merits.