Turner v. Conant — 18 Abb. N. Cas. 160

Majority

p. 160

TURNER v. CONANT.

N. Y. Supreme Court, First Department, General Term;

June, 1886.

Headnote

1. Complaint demanding auxiliary relief; separate causes, of action.] A complaint showing that plaintiff became entitled to two bonds to be issued to him by the defendant railroad company in place of two . o.ther bonds which belonged to plaintiff and which he had surrendered to trustees under a plan for the reorganization of the railroad, and alleging that the company had refused to deliver the new bonds to plaintiff owing to a claim therefor made by a third party, joined as defendant, founded on his alleged possession of a certificate of the trustees of the deposit with them of the old bonds by him, and praying judgment for the delivery by the company to plaintiff of the new bonds, and restraining their delivery to the claimant, and for the cancellation of his certificate, if any,—states but one cause of. action for the delivery of the bonds to. plaintiff, the cancellation of the certificate being merely relief auxiliary thereto, and not an independent cause of action.

2. Proper parties defendant in action in equity.] Under the provisions of sections 446, 447 and 452 of the Code of Civil Procedure, substantially declaring that all persons interested in the subject of the suit shall be made parties, either as plaintiffs or defendants, in order to prevent a multiplicity of suits, and to secure a final determination of their rights,—the claimant is a proper- party defendant in such an action, because he claims an interest adverse to the plaintiff; and he is a necessary party for the complete determination of the question involved, inasmuch as the defendant company is entitled to protection between the two contestants.^[1]

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Appeal from an interlocutory judgment overruling demurrer to an amended complaint, and from the order directing the entry of said judgment.

Charles S. Turner brought this action against Edwin Conant and the Midland B. E. Co. of New Jersey, the complaint alleging that plaintiff, being the owner of two mortgage bonds of New Jersey Midland B. E. Co,, numbered respectively 1857 and 1858, delivered them in 1877 to a committe or trustees of the bondholders of the company, appointed to carry into effect a plan for the reorganization of the company, and that the bonds were deposited by the trustees with the Central Trust Oo.5 upon an agreement to deliver to plaintiff, upon the completion of the reorganization, new mortgage bonds of the new company, the defendant, the Midland B. E. Co. of New Jersey, equal in value and amount to the bonds so surrendered; that the defendant company had received the plaintiff’s bonds, hut refused to deliver to him new'bonds as agreed, hut intends to deliver them to defendant Conant, who claims to own them, under some alleged certificate from the Central Trust Co, of the deposit by Conant of the mortgage bonds, Nos. 1857 and 1858, owned and surrendered by plaintiff.

The complaint demanded judgment that the defendant railroad company deliver the new bonds to plaintiff, and be restrained from delivering them to any other person; that defendant Conant deliver up the alleged certificate to he can-celled ; and for damages for withholding the delivery of the bonds.

A demurrer to the complaint by defendant Conant upon the ground of the non-joinder of the Central Trust Co. having been sustained, and the defendant company having been re-organized under the statute, after the commencement of the action, as the New York, Susquehanna & Western B. E. Co., those companies were made parties defendant, and the complaint amended accordingly.

The defendant Conant now demurred to the amended complaint upon the grounds, First, That it did not state facts suf

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iicient to constitute a canse of action against him; Second, That causes of action were improperly united, in that an action against the railroad companies for the specific performance of a contract was united with an action against Conant for the cancellation of a certificate of deposit issued by the defendant trust company.

The demurrer was overruled by the special term (no opinion written), and defendant Conant appealed.

Edward B. Hill, for defendant Conant, appellant.

I. The complaint shows no cause of action- against Conant. It shows no ground for cancellation of the certificate (Town of Venice y. Woodruff, 62 JV . Y., 462); and as such relief could not be had in an independent action, it cannot be granted as ancillary relief. “ Ancillary relief,” by the very meaning of the words, is relief granted to a party in connection with and as subordinate to relief in chief against, the same person. Relief against A. as “ ancillary,” to relief against B., is impossible. In this case no other relief is or can be sought against defendant Conant, but the cancellation of his certificate, and the injunction against his dealing with it. There is pothing to which this can be ancillary. Conant is not a proper party to the litigation against the defendant companies. The action is for specific performance of a contract to deliver to plaintiff a certain number bonds of a certain kind, a contract to which this defendant was never a party and with which he is not concerned. The parties to an action for specific performance of a contract are the same as to an action for a breach thereof. Chapman y. West, 17 N. Y., 125 ; Hitchcock y. Midland R. R. Co., 33 JSF. J. Eq., 86. Conant has no interest in the controversy, nor is his presence necessary for a full determination of it. Spring y. Short, 90 N. Y., 538 ; Gardner y. Ogden, 22 N. Y., 327 , (at page 340). The fact that the bonds of plaintiff bear certain numbers and that bonds of the same numbers are claimed by Conant is immaterial; and yet the numbers are the only things which connect this defendant with the case. The identity of stocks and bonds is of no conse

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quence, but only quantity and value. Horton v. Morgan, 19 'If. Y., 170; Stewart y. Drake, 46 Jf. Y.¡ 449; Taussig y. Hart, 58 If. Y., 425; Marston y. Gould, 69 If. Y., 220, 226 ; Levy y. Loeb, 85 If. Y, 365; Birdsall y. Russell, 29 If. Y., 220; Com. y. Emigrant, etc., Sav. Bk., 98 Mass., 12 ; City of Elizabeth y. Force, 20 jf. J. Eq., 587. If plaintiff proves his case as to any two bonds, he may recover as against the railroad companies, and this does not-concern Co'nant.

II. Causes of action are improperly united in the complaint. The two causes of action—for the specific performance of a contract, and for the cancellation of the certificate—do not both belong to any one of the subdivisions of Code Civ. Pro., § 484. They do not come under the 9th subdivision, because they did not both arise out of the same transaction, for the cause of action against the companies arose out of the alleged deposit of bonds by the plaintiff, while the other arose out of the alleged issue of a certificate to Conant. Nor are they both connected with the same subject of action. The bonds are not the “ subject of action,” which is, in the one, the contract made on deposit of the bonds, and, in the other, the wrong done by the alleged wrongful issue of the certificate. It is not the particular thing concerned, but the dealing about that thing, which occasions the litigation, which is the “subject of action.” Gardner y. Ogden, 22 - Jf. Y, 327, 340; Wiles y. Suydam, 64 Jf. Y., 173; Glen & H. Mfg. Co. y. Hall, 61 If. Y, 226.

John W. Fiske ( Wm. Q. Riddle, attorney), for the plaintiff, respondent.

I. This action is to enforce a trust, and states a cause of action for equitable relief against the railroad company. The plan of reorganization impressed certain trusts upon the bonds deposited, and by the company’s receipt of the bonds it became a trustee thereof. The new bonds are the proceeds of the old ones, and the trust will follow and attach to them. Getty y. Devlin, 70 -If. Y, 504; Yatable y. N. Y., L. E. & W. R. R. Co., 9 Abb. Jf. G., 271; 11 Abb. Jf. G., 133 (the latter decision reversed in 96 Jf. Y. 49); Hitchcock v. Midland R. R. Co., 33

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P. J. Eq., 86. A suit at law for withholding the bonds (if such a suit would lie) would not afford a sufficient remedy. Cushman v. Thayer Mfg. Co., 76 P. Y., 365; Mechanics’ Bk. of Alexandria v. Seton, 1 Pet. 299 ; Farmers’ & Mechanics’ Bk. v. Wayman, 5 Gill (.Md.), 336; Atkinson v. Atkinson, 8 Allen, 15 .

II. Conant is a necessary party, because he interposed a claim for the bonds which are the subject of the action, in consequence of which the railroad company withholds the bonds from plaintiff. Code Civ. Pro., § 447; Derham v. Lee, 87 P. Y., 599; Fowler v. Mutual Life Ins. Co., 28 Tlxm, 195. It is neither necessary nor proper in an action in equity to set forth a specific cause of action against each defendant in the suit, for, though the Code has united common law and equity jurisdiction in our courts, it has not abrogated the distinction between common law and equity pleading. Plumbe v, Plumbe, 4 Y. & C., 345; Williams v. Bankhead, 19 Wall., 563 ; Mechanics’ Bk. of Alexandria v. Seton, 1 Pet. 299 , 305 ; Brinkerhoff v. Brown, 6 Johns Oh., 139; Fullerton v. Mc-Curdy, 4 Pans., 132; Dinsmore v. Atlantic & Pacific Ií. It. Co., 46 How. Pr., 193 ; Cushman v. Thayer Mfg. Co., 76 P. Y., 365 ; Grulick v. Grulick, 33 Barb., 92 , 93.

III. The cancellation of Conant’s alleged certificate is not a substantive cause of action, but is incident and auxiliary to the extinction of his claim to the bonds. Complaint states only a cause of action for the enforcement of a trust; it does not assume to allege a cause of action for cancellation of the certificate. Hammond v. Cockle, 2 Pun, 495. In very many cases, the courts have allowed this incidental or auxiliary relief when it did not constitute a substantive cause of action by itself, and one which could not have been properly joined with the action in which the principal relief was sought. Dodge v. Stevens, 94 P. Y., 209; Lattin v. McCarty, 41 P. Y, 107; Welch v. Platt, 32 Pun, 194.

The learned justice in the court below was undoubtedly correct in the disposition he made of the demurrer.

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Tliis is an action in equity, and the Code of Civil Procedure, by sections 446, 447 and 452, substantially declares that all persons interested in the subject of the suit shall be made parties, either as plaintiffs or defendants, in order to prevent a multiplicity of suits and to secure a final determination of their rights. Section 447 provides that any person may be made a defendant who has or claims ari interest in the controversy adverse to the plaintiff, or who is a necessary party defendant for the complete determination or settlement of a question involved therein, except as otherwise expressly prescribed in the act.

The plan of reorganization, as will have been observed from the statement made, vests certain trusts in reference to bonds which were deposited subject to its terms, and the defendant company, having received the bonds, accepted the trust.

The plaintiff alleges that he deposited with the committee of bondholders, to be by them deposited with the Central Trust Co., two first mortgage bonds of the New Jersey Midland B. B. Co., known and designated by the Nos. 1857 and 1858, upon the agreement that he should receive, after the reorganization, two bonds of equal par value of the Midland B. B. Co. of New Jersey, when it should be formed, and the necessary allegations to show that these bonds have been created to which under the agreement, if established, he would be entitled. He also alleges, as will have been observed, that these bonds are claimed by the defendant Conant. And this action was brought for the purpose of compelling the delivery of the bonds to him instead of to Conant, and the relief ad interim asked by injunction, to prevent the delivery of them to Conant and any act on the part of Conant by which his title should be interfered with in any way.

It cannot be well doubted that, under the provisions of the Code to which reference has been made, Mr. Conant was a proper party because he claimed an interest adverse to the plaintiff, and was a necessary party for the complete determination of the question involved, inasmuch as the defendant company was entitled to protection between the two contestants.

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The duty of making a person or persons claiming adversely to the plaintiff, in such a case, a party or parties to the suit was determined in Derham v. Lee (87 H. Y., 599). The provisions of the Code, it was there declared, are in harmony with the principle of equity by which all persons interested in the subject of the suit should be made parties, either as plaintiffs or defendants, and those provisions applied to all actions where the controversy could be ended by one hearing and adjudication (see, also, Fowler v. Mutual Life Ins. Co., 28 Hun, 195 ).

The rule is quaintly stated by Baron Abinger in Plumbe v. Plumbe, 4 Y. <& O., 345, as follows': “ I-take it that if a man claims an interest in the subject matter of a suit by resisting the plaintiff in his possession, or otherwise, and this appears by the bill, in such case you are not bound to set out the particular claim which he alleges, or to give it color” (see also, Fullerton v. McCurdy, 4 Lans., 132 ).

The theory of the appellant as to this action is one which cannot be maintained—namely, that the complaint combines two causes of action, which is not the case, as we have already seen. The sole object is to secure the delivery of the two bonds which the plaintiff claims, and against the accomplishment of which the defendant’s asserted interest and title seems to be the only obstacle. It is to remove that, that the action was commenced.

The appellant makes objection to the relief demanded by the cancellation of the certificate of the appellant Conant, on which he predicates his right to the mortgaged bonds. But this was only a part of the judgment asked, which seems to be in harmony with the relief sought, for the reason that if the plaintiff be entitled to these mortgage bonds, any certificates that may have been obtained by the appellant Conant, invest ing him with the title to or authorizing him to receive them, must necessarily have been improperly or illegally issued, and therefore should be destroyed; and in that respect it is auxiliary to the object in view.

For these reasons, without any more elaboration, it is quite apparent that the demurrer should not have been sustained,

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and that it was properly disposed of by the learned justice in the court below.

The judgment and order appealed from must therefore be affirmed, with costs.

Daniels, J., concurred.

Cases cited

Mechanics Bank v. Seton 1 Pet. 299 SCOTUS at 305 p. 164