Anthony H. Lawatsch, Appellant, v. John J. Cooney, Respondent

Anthony H. Lawatsch, Appellant, v. John J. Cooney, Respondent. Money had and received—action ~by a grantor against a mortgagee who has required the purchaser to pay a sum (deducted from the purchase price) in excess of the amount due. Where, on a transfer of real property, the grantor is to receive a fixed sum,, less the amount of the liens and incumbrances thereon, he may recover in an action for money had and received from the holder of a mortgage on the premises, the excess, beyond the legal amount due such mortgagee, which he has exacted from the grantee as a condition of satisfying the mortgage, whether the improper exaction resulted from mistake, coercion, misrepresentation or fraud. Parker, P. J.; dissented, Appeal by the plaintiff, Anthony H. Lawatsch, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Ulster on the 10th day of Februarv, 1896, upon the dismissal of his complaint directed by the court after a trial before the court and a jury. This action was brought to recover, as for money had and received, a sum of money obtained by the defendant under the following circumstances : The plaintiff, who was the owner of certain land, upon which the defendant held a mortgage, sold it, giving the purchaser the right to discharge the liens thereon, from the purchase price. The purchaser, upon the assumption that it was due to the' defendant, paid him a sum considerably in excess of the mortgage-debt, and it is this excess which is sought to be recovered in ■ this action. John E. Van Etten, for the appellant. John J. Linson, for the respondent. [MAJORITY — Herrick, J.:] Herrick, J.: By the terms of the conveyance of the real estate the plaintiff was to receive from one Relyea, the purchaser, the sum of $1,400, less the amount of the several liens and incumbrances upon such real estate. Amongst such liens and incumbrances was a mortgage given by the plaintiff and his wife to the defendant for the sum of $1,600. Payments had been made upon this mortgage by the application of moneys derived from insurance policies, so that, at the time the defendant gave the satisfaction to Relyea, there was due for principal and interest the sum of $342.16. Relyea paid to the defendant upon such mortgage, upon receiving the satisfaction, and the defendant received, the sum of $590, This $590, of course, was paid upon the assumption that the plaintiff owed the defendant that amount upon the mortgage, and the only right that the defendant had to receive the moneys from Relyea was in payment and satisfaction of the plaintiff’s debt to him. It is apparent, then, that the defendant has received more than he ■ is entitled to; that Relyea, to clear off the incumbrances on the real estate he had purchased, has paid out more than was due upon such incumbrances, and the amount thus paid out has been deducted from the amount of the purchase price of such real estate, from the amount that the plaintiff was entitled to receive, and that the defendant has money in his hands which should have been paid to the plaintiff. It seems to me that, the law applicable to this state of facts is stated in .the case of Roberts v. Ely (113 N. Y. 128,131), as follows: “Money in the hands of one person, to which another is equitably entitled, may be recovered in a common-law action by the equitable owner upon an implied promise arising from the duty of the person in possession to account for and pay over the same to the person beneficially entitled. The action for money had and received to the use of another is the form in which courts of common law enforce the equitable obligation. The scope of this remedy has been gradually extended to embrace many cases which were originally cognizable only in courts of equity. Whenever one person has in his possession money which he cannot conscientiously retain from another, the latter may recover it in this form of action, subject to the restriction that the mode of trial and the relief which can be given in a. legal action are adapted to the exigencies of the particular case, and that the transaction is capable of adjustment by that procedure, without prejudice to the interests of third persons. No privity of contract between the parties is required, except that which results from the circumstances. (Mason v. Waite, 17 Mass. 560.) “ The right oh the one side, and the correlative duty on the other, create the necessary privity and justify the implication of a promise •by the defendant to do that which justice and. equity require. It is immaterial, also, whether the original possession of the money by the defendant was. rightful or wrongful. It is sufficient that the duty exists on his part, created by the circumstances, to account for and pay it over to the plaintiff.” Whether this money was received by the defendant through mistake arising from a miscalculation as to the amount due to him from the plaintiff on such a mortgage; or whether, for ■ the purpose of enabling Relyea to remove the liens upon the real estate that had •been purchased by him, he coerced him into paying a larger amount . than was due, or whether he procured him, to pay such sum by misrepresenting the amount that was due, makes no difference.; in either event, the defendant received more money than he was entitled to receive; it was in equity the plaintiff’s money which was being used to pay his debts, and was paid upon the supposition that the plaintiff owed that amount, and whether received by mistake, inadvertence or fraud, it does, not belong to the defendant, but does belong to the plaintiff, and should be paid to him. It is no answer to say that the plaintiff would have a right of action against Relyea; that Relyea had no right to pay more than was actually due upon the liens and incumbrances upon such real estate, and that the plaintiff could maintain an action against him for the difference between $1,400 and the amount actually due upon the incumbrances. It is not necessary for us to decide in this ease whether that is true or not, but conceding it to be so, that does not deprive the plaintiff of his right of action against the defendant for the moneys that he has received, that in equity belong to the plaintiff, and that lie received under the claim or understanding that that amount was due from the plaintiff to him. The judgment should be reversed and a new trial granted, costs to abide the event. All concurred, except Parker, P. J., dissenting. Judgment and order reversed and a new trial granted, costs to abide the event.