Case Name: J. Quintus Cohen, as Trustee of the Estate of John T. Lee, Bankrupt, Respondent, v. Mortimer H. Wagar, as President of the Consolidated Stock and Petroleum Exchange of New York, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1903
Citations: 87 A.D. 255
Docket Number: 
Parties: J. Quintus Cohen, as Trustee of the Estate of John T. Lee, Bankrupt, Respondent, v. Mortimer H. Wagar, as President of the Consolidated Stock and Petroleum Exchange of New York, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 87
Pages: 255–259

Head Matter:
J. Quintus Cohen, as Trustee of the Estate of John T. Lee, Bankrupt, Respondent, v. Mortimer H. Wagar, as President of the Consolidated Stock and Petroleum Exchange of New York, Appellant.
Pleading—the non-payment of moneyk, where it is necessary to establish a breach of defendant’s duty, must be alleged, in the complaint.
A trustee in bankruptcy of a person who, previous to being adjudged a bankrupt, had made an assignment for the benefit of creditors, cannot maintain an action to recover moneys alleged to have been received by the defendant for the use of the bankrupt’s estate, without alleging and proving non-payment of the money in question to the bankrupt or his assignee for creditors.
A complaint in such an action which alleges that the moneys in question were collected by the defendant and received for the usé of the bankrupt’s estate and belonged to such estate “ and now belong to plaintiff as trustee thereof,” and that the plaintiff has demanded payment of the defendant and that no part of the sum “has been paid or turned over to the plaintiff," and which does not allege that the moneys have not been paid to the bankrupt or to his assignee, or that they are in existence or in the possession of the defendant, is demurrable. Patterson and Hatch, JJ., dissented.
Appeal by tbe defendant, Mortimer H. Wagar, as president of the Consolidated Stock and Petroleum Exchange of New York, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 8th day of April, 1903, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the defendant’s demurrer to the complaint.
Francis D. Pollak, for the appellant.
Michel Kirtland, for the respondent.

Opinion:
O'Brien, J.:
The only question to be determined is whether it was necessary for plaintiff, suing as trustee for money had and received for usé of the estate, to allege and prove non-payment to Lee or his assignee.
The complaint alleges that the moneys in question were collected by the association'and received for the use of the estate and belonged to the estate "and now belong to plaintiff as trustee thereof.and that the plaintiff has demanded payrnent of the defendant and no part of the sum "has been paid or turned over to the plaintiff."- If the association properly paid the bankrupt or the assignee before demand by the plaintiff, the latter would have no claim against the defendant. Such facts, it is contended, would only constitute a defense; but must an association or an individual be called into a legal action merely for such a purpose and in the absence of an allegation that it or he has been guilty of a breach of duty % To constitute a cause of action the plaintiff must show, it seems to me, not only that the defendant collected moneys but now has them and refuses, after a lawful demand, to pay them.
. This complaint fails not only to state that the moneys have not been paid to the bankrupt or his assignee, but fails to state that they are in existence or in the possession of the defendant, the averment being that they were collected and have not been paid to the plaintiff. In Lent v. N. Y, & Mass. R. Co. (130 N. Y. 504) the rule is reaffirmed that in an action upon an alleged indebtedness an allegation of non-payment is essential, and it Was stated that it cannot be held that because payment as a defense must be pleaded the breach of the agreement need not be alleged in the complaint; that " no presumption can be indulged in that a defendant has failed in his duty or omitted to perform his contract obligation." In Wither-head v. Allen (4 Abb. Ct. App. Dec. 628) it was said: " The. fact that the company in 1857 became indebted to the plaintiff in a sum named does not make out a present right of action against the company without the further fact of a present duty and a breach of it. This, in the complaint under consideration, is wholly wanting. It does not even allege an existing indebtedness."
If the defendant collected moneys belonging to the estate of Lee, it then became the duty of the association to'turn over such moneys to the assignee; but there is no averment that this has not been done, nor is it alleged that the defendant now has the moneys in its possession, or that prior to plaintiffs demand it had failed to turn them over to Lee or his assignee.
The interlocutory judgment should, therefore, be reversed, with costs, and the démurrer sustained, with costs, with leave to plaintiff to amend complaint upon payment of costs in this court and in the court below.
Van Brunt, P. J., and Laughlin, J., concurred; Patterson and Hatch, JJ., dissented.