Opinion
June Term, 1896.
Howard A. Taylor and Albert Sprague Bard, for the appellant.
David P. Hall, for the respondent.
The record upon this appeal shows that one Hackley, in 1861, entered into a contract for the performance of certain work for the city of New York. Subsequently Charles D. Blish, the appellant's intestate, acquired an interest in the contract, which interest Blish thereafter assigned to William H. Angel, now deceased. The present plaintiff represents the heirs and next of kin of said Angel and his devisees under his last will and testament. An action was brought upon the said contract against the city of New York to recover damages for a breach thereof, and also to recover certain sums for part performance of the same. After thirty years of litigation, a compromise judgment was entered against the city, and also adjudging the specific sums to which each party in interest under the contract was entitled, by virtue of which there was awarded to the appellant the sum of $4,902.38, which she has received and now holds, the same being the fund which the injunction restrains of distribution.
It appears that, after the assignment of the one-fourth interest to Angel, he caused to be served upon the city of New York a written notice of his right and interest in the contract. Angel was never made a party to the suit against the city, but so far as his interest was concerned the same was prosecuted in the name of Blish and his representatives, and neither Angel or his representatives appear upon the record as a party, or as having any interest in the litigation or its subject-matter. And the allegation is made in the affidavit of the attorney for Blish and his representatives that the parties to the record had no notice of the assignment to Angel during the litigation; and that such claim was not made upon the final compromise when the money was paid over to the appellant.
Upon this state of facts the appellant seeks to invoke the principle of law that where there are two claimants to a fund of which the common debtor has notice, voluntary payment to one, even though it be the wrongful claimant, gives no right of action in favor of the rightful claimant against the party who receives the money. This rule has been repeatedly recognized by the courts of this State, and we have recently had occasion to reassert the doctrine. ( Reynolds v. Ætna Life Ins. Co., see post, page 254.)
There are elements in this case which tend to bring it within the rule. But we think the complete answer to the position is found in the allegation of the complaint, which, for the purposes of this appeal, we must treat as the fact. The tenth allegation of the complaint is that the defendant Smith received the money and deposited the same, to be paid over to whomsoever the same may justly belong. And the eleventh allegation is that the parties to the suit, in its several stages of litigation, had notice and knowledge that the interest of Blish had been assigned by him to Angel, and that any recovery thereon would inure to the benefit of said Angel and his successors in interest. Criticism is made of these allegations, but we think they are sufficient to permit of proof to show that in fact the litigation carried on by Blish and his successors was for the benefit of and as trustees for Angel and his successors in interest. In this view of the matter the case is brought within the exception to the rule and authorizes the maintenance of the action. ( Patrick v. Metcalf, 37 N.Y. 332 et seq.)
In addition to this it appears from the complaint that the assignment from Blish to Angel was made after the commencement of the action against the city, as the action was begun about the 12th day of January, 1864, and the assignment was not made until about the 15th day of January, 1867. The existence of the assignment, therefore, so far as Blish and his representatives are concerned, must have been known while the action was pending. It is quite probable, therefore, that as Angel did not ask to be made a party to the suit, and as Blish continued its prosecution as it then existed, when judgment was obtained and paid, it operated as a discharge to the city from any liability to Angel or his successors. But in whatever aspect this question be viewed the continued prosecution of the action by Blish after the assignment constituted the latter a trustee for Angel's benefit, and whatever was received thereunder Blish would receive impressed with a trust to the extent of Angel's interest. (Code Civ. Proc. § 449; Madison Square Bank v. Pierce, 62 Hun, 493.)
It, therefore, follows that the order appealed from should be affirmed and the injunction continued until the trial of the action, with ten dollars costs and disbursements.
All concurred, except PRATT, J., not sitting.
Order affirmed, with ten dollars costs and disbursements.