Case Name: COHEN v. WAGAR
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1903-11-06
Citations: 84 N.Y.S. 377
Docket Number: 
Parties: COHEN v. WAGAR.
Judges: 
Reporter: West's New York Supplement
Volume: 84
Pages: 377–380

Head Matter:
(87 App. Div. 255.)
COHEN v. WAGAR.
(Supreme Court, Appellate Division, First Department.
November 6, 1903.)
1. Monet Received—Trustee in Bankruptcy—Actions—Pleading—Nonpayment.
Where an insolvent had made an' assignment for the benefit of creditors, and thereafter was adjudged a bankrupt, a complaint in an action by his trustee in bankruptcy to recover money alleged to have been had and received by defendant to the use of the bankrupt estate, merely alleging that such money belonged to plaintiff as trustee of the estate, and that no part of the same had been paid or turned over to plaintiff, without alleging that it had not been paid to the insolvent or his assignee, was insufficient.
Patterson and Hatch, JJ., dissenting.
Appeal from Special Term, New York County.
Action by J. Quintus Cohen, as trustee in bankruptcy of the estate of John T. Lee, against Mortimer H. Wagar, president of the Consolidated Stock & Petroleum Exchange of New York. From an interlocutory judgment overruling a demurrer to the complaint, defendant appeals. Reversed.
Argued before VAN BRUNT, P. J., and HATCH, PATTERSON, O’BRIEN, and LAUGHLIN, JJ.
Francis D. Poliak, for appellant.
Michel Kirtland, for 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 use of the estate, to allege and prove nonpayment 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 payment 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. R., 130 N. Y. 504, 29 N. E. 988, the rule is reaffirmed that in an action upon an alleged indebtedness an allegation of nonpayment 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 Witherhead v. Allen, 4 Abb. Dec. 628, it was said:
"The tact that the company in 1857 became indebted to the plaintiff in the sum named does not make out a present right of action against the company without the further fact of a present duty and the 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 plaintiff's demand it had failed to turn them over to Lee or his assignee.
The interlocutory judgment should therefore be reversed, with costs, and the demurrer 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., concur.