Opinion
276 A.D. 78 92 N.Y.S.2d 914 ACKER et al. v. HANIOTI et al. Supreme Court of New York, First Department November 28, 1949
Mrs. Rae Acker and 309 other named individuals sued Basil Hanioti, etc., and others and Todd Shipyards Corporation and A. J. Armstrong Co., Inc., for money paid to purchase passage on a vessel on voyages which were not made.
The Appellate Term, Samuel H. Hofstadter, Ferdinand Pecora and Wm. C. Hecht, Jr., JJ., -- Misc. --, 89 N.Y.S.2d 885, reversed orders of the Municipal Court, Borough of Manhattan, Second District, John M. Lewis, Justice, dismissing the complaint, and defendant Todd Shipyards and A. J. Armstrong Co., Inc, appealed.
The Appellate Division, Per Curiam, unanimously reversed determination of Appellate Term and dismissed complaint because Municipal Court lacked equitable jurisdiction. Marcy Finke, New York City, of counsel (Finke, Jacobs & Hirsch, New York City, attorneys), for appellant A. J. Armstrong Co., Inc.
Dimitri G. S. Eristoff, Brooklyn, of counsel (Cullen & Dykman, Brooklyn, attorneys), for appellant Todd Shipyards Corporation.
Harry D. Graham, New York City (Richard J. McAnany, New York City, with him on the brief), for respondents.
Before PECK, P. J., and GLENNON, CALLAHAN, VAN VOORHIS and SHIENTAG, JJ.
PER CURIAM.
This is an appeal by defendant Todd Shipyards Corporation (hereinafter described as Todd) and A. J. Armstrong Co., Inc. (hereinafter described as Armstrong) from an order of the Appellate Term reversing a judgment of the Municipal Court which dismissed the complaint for lack of jurisdiction. Three hundred ten plaintiffs are suing for the return of money paid to purchase passage on the S. S. City of Athens for transatlantic voyages which were not made by said vessel. This ship was owned by a Panamanian corporation known as Sociedad Naviera Transatlantica, S. A. Said corporation is alleged to have been indebted to Todd and Armstrong. It is further alleged that moneys procured by Sociedad Naviera Transatlantica, S. A., from plaintiffs for passage, though unearned, were paid out to the accounts of Todd and Armstrong by reason of such indebtedness. On July 12, 1947, the City of Athens was libeled by Todd in the Port of Baltimore, Maryland, by process in rem issued out of the United States District Court, with the consequence that the scheduled voyage of July 15, 1947, and all later voyages were abandoned.
Although the complaint is encumbered by numerous causes of action the material facts of which might well have been more plainly and concisely stated, Civil Practice Act, § 241, the causes of action are similar to those involved in Silva v. Bankers Commercial Corporation, 2 Cir., 163 F.2d 602, and McInnes & Co., Inc. v. Equitable Trust Co. of New York, 197 A.D. 649, 189 N.Y.S. 518.Money paid for passage on ships for voyages which were not undertaken form constructive trust funds for the benefit of the prospective passengers. Where, as here, if the allegations of the complaint be correct, such funds have been transferred to creditors of the transporation company, with notice of these facts, the recipients are held accountable in equity. In McInnes & Co. v. Equitable Trust Company, supra, this court said 197 App.Div. at page 652, 189 N.Y.S. at page 520:‘ It is not material whether Stafford and Miller were guilty of fraud in inducing the plaintiff to make the contract and prepay this freight.’ It was held in that case that the defendant creditor therein took such moneys ‘ charged with knowledge and charged with all of the obligations with which’ the ship owners ‘ would have been charged for failure of the vessel to make the voyage.'
Matters of this nature are cognizable in equity rather than at law. 54 Am.Jur. Trusts, sec. 248; Bogert on Trusts, 2d Ed., § 49, page 170; Pomeroy Equity Jurisprudence, vol. 5, sec. 10; Newton v. Porter, 69 N.Y. 133, 138-140,25 Am.Rep. 152.
Plaintiffs paid these passage monies to the transportation company in many installments over a period of about six months, not all of the monies paid by plaintiffs were transferred to Todd and Armstrong, nor did all of such transfers which did take place occur at the same time. It is admitted in an affidavit for plaintiffs that part was paid to said appellants on June 13, 1947, and that ninety-nine of the plaintiffs paid for their passage after that date. Under the theory of the Silva and the McInnes cases, those plaintiffs who paid after June 13, 1947, would not be entitled to share in any recovery of the instalment that was paid to appellants upon the date. Moreover, as just stated, not all of the monies paid by plaintiffs for passage went into the hands of Todd and Armstrong. Even though plaintiffs may be entitled to recover against those defendants, to the extent that passage money was transferred to them, there will not be enough of such money to go around, and questions will necessarily arise concerning the tracing of payments made by particular plaintiffs, concerning which plaintiffs should share proportionally and to what extent in funds for which Todd and Armstrong are accountable, whether they should be reimbursed out of said funds in the chronological order or in the inverse order of their payments to the shipping company, or how the funds should be allocated among them.
Since the Municipal Court lacks equitable jurisdiction, the complaint should have been dismissed Simon v. Schmitt, 137 A.D. 625, 122 N.Y.S. 421.
It is not certain that the various causes of action should not have been separately stated and numbered, but to do so would require an extraordinary lengthy and elaborate complaint, which would not necessarily render the allegations in favor of the respective plaintiffs more clear and comprehensible than could be done by bill of particulars. The portion of the motions by appellants relating to the separate statement and numbering of the causes of action becomes academic, however, at this stage in the proceedings, in view of the dismissal of the complaint.
The determination appealed from should be reversed, with costs.
Determination unanimously reversed with costs to the appellants and the complaint dismissed.
Settle order on notice.