Louise Zimmerman, et al, as Executors, etc., Respondents, v. Geoege Kinkle, Impleaded, etc., Appellant.
In an action by executors, as such, the complaint alleged in substance, that upon settlement with the surviving partners of the affairs of a copartnership, of which their testator was a member at the time of his death, the survivors exacted from plaintiffs, and they with defendant K. as surety, executed to them a bond, conditioned that the obligors would “ keep inviolate all the business transactions and dealings of the late copartnership; ” that K, with knowledge of the circumstances, demanded and received from plaintiffs, as such executors and trustees, $5,000 of the trust moneys in their hands, to be repaid with interest when his obligation upon the bond ceased, that said bond “ was given for no consideration, but was wrongfully extorted from the plaintiffs and was signed, executed and delivered for an illegal and immoral purpose against public policy,” etc. The relief demanded was a cancellation of the bond and a restoration of the $5,000. On demurrer by K. to the complaint held, that, as against him it stated a good cause of action; that K. having received from plaintiffs trust money which they had no power to part with, except for the purpose for which they received it, they had the right and it was their duty to recover it back; that if the statement that the bond was ‘' wrongfully extorted ” was not sufficiently definite, defenddants’ remedy was by motion; that as against a demurrer it was sufficient; also, that, the complaint did not improperly unite two causes of action.
Whoever receives property knowing it to be the subject of a trust and to have been transferred by the trustee in violation of his duty or power, takes it subject to the right, not only of the cestui que trust, but of the trustee to reclaim possession.
In an action by the trustee for that purpose it is not necessary to bring the plaintiff before the court in his individual character.
(Argued January 17, 1888;
decided February 7, 1888.)
Appeal from a final judgment of the General Term of the Supreme Court, in the first judicial department, in favor of the plaintiffs, entered upon an order made February 16, 1881, *283which reversed an order of the Special Term, sustaining a demurrer by defendant Kinkle to the complaint, and overruled said demurrer.
This action was in equity, for the cancellation of a bond and the restoration of $5,000 belonging to the estate represented by the plaintiffs as executors, and which money they had placed in the hands of Kinkle, one of the defendants, to indemnify him against liability as surety upon the bond.
The complaint alleged in substance that the testator, William Zimmerman, in his lifetime, Emil Dieckerhoff, Louis Ttaffloer and Adolph Erbsloeh were co-partners in business, and that after the death of Zimmerman a settlement of accounts relating to firm transactions, was had between the plaintiffs on one side and the defendants Emil, Louis and Adolph on the other, in which the latter wrongfully exacted of the plaintiffs, and they, with the defendant George Kinkle, executed a bond in the penal sum of $5,000 to the said Emil, Louis and Adolph, upon condition that if the obligors should “keep inviolate and confidential all the business transactions and dealings of the late co-partnership firm of Dieckerhoff, Kaffloer & Co., and of Caron & Co., the predecessors of said first named firm, which may ever at any time, in any wise have come, or which may hereafter come to their knowledge, and shall also preserve and keep inviolate and confidential the contents of correspondence and other writing relating thereto, and shall not disclose or divulge the same, then the obligation to be void, otherwise to remain in full force and virtue; ” that Kinkle signed as surety and, as such, demanded and received from the plaintiffs the sum of $5,000, to be repaid with interest so soon as his obligation upon the bond ceased; that the bond “ was given for no consideration, but was wrong fully extorted from the plaintiffs and was signed, executed and delivered for an illegal and immoral purpose, against public policy and for the purpose of interfering with the administration of public justice, and to suppress evidence of illegal, wrongful and unlawful acts on the part of the obligees therein named, all of which said defendant, George Kinkle, well *284knew; ” that the money so demanded by Kinkle was trust-money and was “ received by him from the plaintiffs as the executors and trustees of William Zimmerman, deceased.”
The demurrer stated several grounds :
I. That the complaint does not state facts sufficient-to constitute a cause of action against him.
II. The two causes of action have been improperly united.
(a.) That the causes of 'action against the defendants Dieckerhoff, Baffloer and Erbsloeh sound in tort. •
(i.) That the cause of action against the defendant Kinkle is ex-contractu.
(c.) That the cause of action against the defendants Dieckerhoff, Baffloer and Erbsloeh does not affect the defendant Kinkle.
(d.) That the cause of action against the defendant Kinkle does not affect the defendants Dieckerhoff, Baffloer and Erbsloeh.
(e.) That both causes of action are inconsistent with each other.
The Special Term sustained the demurrer upon the grounds (1) that the consideration of the bond was illegal and criminal, and so neither party could have relief; (2) that although an action might lie against Kinkle to recover the money received by him, with knowledge that it belonged to the estate, it could not be joined with an action against the obligees of the bond. The General Term reversed the order of the Specia Term, with leave to answer over. The defendant did not accept that permission, and upon proof thereof final judgment was entered.
A. Simis, Jr., for appellant.
The complaint shows upon its face the execution of an illegal "contract, and a demurrer will lie. (Moak’s Van Santvoord’s Pleading, 349.) When the parties to a contract are particeps criminis and in pari delicto whatever they have fraudulently or illegally contracted to execute the law refuses to compel the contractor to execute or pay damages for not executing, but in both cases leaves the *285parties where it finds them. (Nellis v. Clark, 4 Hill 429; Knowlton v. Congress Spring Co., 57 N. Y. 537; Saratoga Co. Bank v. King, 44 id. 87; Haynes v. Rudd, 102 id. 372; 83 id. 253; Talmadge v. Pell, 3 Seld. 328; Leavitt v. Palmer 3 N. Y. 19.) .The cause of action against Kinkle is ex contractu and against the other defendants ex delicto, the two are not consistent. (Nichols v. Drew, 94 N. Y. 25; Teal v. Syracuse, 32 Hun 332.) If both causes of action are ex contractu, the demurrer is nevertheless well taken, because such causes of action which do not affect all the parties cannot be joined. (Nichols v. Drew, 94 N. Y. 26; Gardner v. Ogden, 22 id. 340.)
Hector M. Hitchings for respondents.
The defendant Kinkle by demurring, admits all the allegations of the complaint and these allegations will be liberally construed in support of the pleading demurred to. (Olcott v. Carrol, 39 N. Y. 436.) Even if the bond sought to be set aside was illegal in its inception, that does not prevent plaintiffs obtaining the relief asked for. (Story’s Eq. Jur. [13th ed.], § 298; Tantum v. Arnold, 4 Cent. Rep. 421; President Union Bridge Company v. Troy & L. R. R. Co., 7 Lans. 240, 246; Osborne v. Williams, 18 Vesey, 377; Leavitt v. Palmer, 3 Comst. 19; Morris v. McCullough, 1 Ambler, 432; St. John v. St. John, 11 Vesey, 534; Newland on Contracts [pub. 1808] 469.) In this case the plaintiffs are in no sense in pari delicto, but are at most in delicto. To such the rule in pari delicto portior est conditio defendendis, does not apply. (Schermerhorn v. Talman, 14 N. Y. 93, 123; Morgan v. Graff, 4 Barb. 527; Pepper v. Height, 20 Barb. 438; Curtis v. Leavitt, 15 N. Y. 12; Story’s Eq. Jur. § 300; 2 Parsons on Contracts [6th ed.] 746; Bayley v. Williams, 4 Giff. 638; Chitty on Cont. [10th Am. ed.] 732, notes.) That maxim does not apply to cases where the money or property held as security for or devoted to the performance of the contract, is in the hands of a third party intervening between the parties to the illegal contract, or where the contract is executory and not executed. (Morgan
*286v. Groff, 4 Barb. 527; Pepper v. Height, 20 id. 438; Merritt v. Millard, 4 Keyes, 208, 213; Vischer v. Yates, 11 Johns. 29, 30; 12 id. 1; Story Eq., § 298; 2 Comyn. on Cont. 708; Newland on Cont., chap. 33, pp. 483, 492; 2 Parsons on Cont. 746; Chitty on Cont. [10th Am. ed.] 708.) As long as a wager remains in the hands of a third person, contingent upon an event that has not yet. happened, it may be recovered back. (Vischer v. Yates, 12 Johns. 1.) A bond, legal upon its face, but void from some defect or wrong, will be canceled by this court and ordered to be delivered up. (Town of Springport v. Teutonia Sav. Bank, 75 N. Y. 397; Hamilton v. Cummings, 1 John. Ch. R. 517; Pettit v. Shepherd, 5 Paige, 510; Tantum v. Arnold, 4 Cent. Rep. 421; Noah v. Webb, 1 Ed. Ch. 608.) The demurrer does not raise the question of defect of parties, either plaintiff or defendant. That being a special ground of demurrer, the question is not before the court. (Code, § 488, sub. 6; Fulton Fire Ins. Co. v. Baldwin, 37 N. Y. 648; Reeder v. Sayre, 70 id., 180, 190.) There is no misjoinder of causes of action in the complaint. (Lattin v. McCarthy, 41 N. Y. 111; Bidwell v. Astor Mut. Ins. Co., 16 id., 263; N. Y. Ice Co. v. N. W. Ins. Co., 23 id. 357; Code, § 447; Taylor v. Taylor, 43 N. Y. 483, 484; German Sav. Bank v. Sharer, 25 Hun, 409-411; Weller v. Yates, 44 N. Y., 531; Story’s Eq. Jur., §§ 796, 797; Fellows v. Fellows, 4 Cowen, 682; Boyd v. Hoyt, 5 Paige, 65-78; Addison on Torts, 1.) If two causes of action arise out of the same subject of action, and affect all the parties to the action and are not inconsistent, they may be united in one complaint. (Code Civ. Pro., § 484, subd. 6.) They need not affect all the parties equally. (Vermeele v. Peck, 15 Hun, 333; Bradner v. Holland, 33 id. 191.) The causes of action stated are entirely consistent with each other, as equity and common law relief may be had in the same action when tried in equity. (Carpenter v. Osborn, 102 N. Y. 552, 561; Weller v. Yates, 44 id. 531; Bidwell v. Astor Mutual Ins. Co., 16 id. 263.)