Opinion
March Term, 1900.
Dix W. Smith and E.J. Baldwin, for the appellants.
Gabriel L. Smith, for the respondents.
The main question in this case is, whether the referee correctly held that there could be no recovery in this action against Francis E. Fitch, as committee, for the one-third which, as the referee held, belonged to the plaintiff Dunham.
The argument on the part of the respondents seems to be that, if the assignment by Mrs. Dunham was invalid, then the committee had no right to collect her share, and, therefore, is not liable for her share, although he did in fact collect the whole as committee under a judgment against the insurance company awarding him as committee the full amount.
The subject of the action is the fund collected by the committee as such, by virtue of an assignment of the policy executed by all the parties in interest, including the plaintiffs, to Charles T. Fitch before the appointment of the committee. The plaintiffs in their complaint assert their right to obtain two-thirds of the fund upon two theories, one, that the assignment, so far as they were concerned, was invalid under the laws of Pennsylvania, the husbands not having consented to it; the other, that the debt, for the payment of which the assignment was made as security, had been fully paid. The defendant Sarah J. Fitch was the owner of the other one-third interest, and was a proper, if not necessary, party to the final disposition of the controversy. She, however, upheld the committee in his claim to the fund to the extent of the entire debt against Gillette.
It appears that the committee in his efforts, after the collection of the money, to settle with the plaintiffs claimed to act officially as to the fund, and that the amount of the debt due to him as committee, and for which he claimed payment out of the fund, exceeded two-thirds of the fund.
The plaintiffs, soon after the death of Mr. Gillette, notified the company not to pay the policy or any part thereof to the committee. In their notice to the company no claim was made that the assignment of either plaintiff was invalid, nor, so far as it appears, was there any such claim made until after this suit was commenced, or any notice to the committee of such claim.
The action is not for a wrongful taking. It is to determine the ownership of a fund in the committee's hands, some portion of which in fact belongs to the estate he represents. In the complaint it is assumed that the insurance company had a right to pay the whole to the committee. It is alleged that, upon the payment, the committee "duly delivered up and surrendered" the policy and assignment, so that, if the plaintiffs, or either of them, had the right to consider the act of collecting as a conversion, they have not done so. They in effect assume that the money has been properly collected by the committee, and, if so, it is lawfully in his hands. The committee as such claimed the possession of the whole, and alleged a willingness to account as such.
The committee in collecting the policy was acting in the line of his duty, and he was acting for the benefit of the estate in asserting his claim to hold the fund to the extent of the entire debt owing from Gillette. It was important for the estate that the extent of its right should be determined.
The committee had a valid assignment of two-thirds of the fund, and claimed that the assignment was valid as to the whole. He had a right as committee to bring the action against the company. (Code, § 2340.) Having obtained the fund as committee, no good reason is apparent why an action to determine the ownership of the fund should not be maintainable against him in the same character.
In De Valengin's Administrators v. Duffy (14 Pet. 282) it was held that when an executor or administrator in his representative character lawfully received money or property in fact not belonging to the estate, he may be compelled to respond in the same character to the true owner. (See, also, Wall v. Kellogg's Executors, 16 N.Y. 385; 11 Am. Eng. Ency. of Law [2d ed.], 943.) No good reason is apparent why this principle should not be applied to the case in hand.
But it is said that the action was brought without leave of the court. That does not appear. No question on that subject is raised by the answers of the defendants or was raised at the trial. If no such leave was in fact given, and the question had been raised at the trial, it would have been competent for the court, on proper application, to have granted leave nunc pro tunc. ( McKernan v. Robinson, 84 N.Y. 105.) It was not a part of the cause of action. The defendants are not, I think, in a position to justify the dismissal of the complaint upon this ground. We must assume that the committee is properly in court. ( Hackley v. Draper, 4 T. C. 614, 631.)
The committee having as such received the fund, and still holding it in that capacity, the action was, I think, maintainable against him in the same capacity, and the referee erred in holding to the contrary. A reversal as to the plaintiff Dunham must follow. As such reversal would open the question of the validity of the assignment by her, the proper disposition of that question and of the case, in the contingency of the assignment being found to be valid, would call for a new trial as to all the parties.
All concurred, except SMITH, J., not sitting.
Judgment reversed, referee discharged, and a new trial granted, costs to abide the event.