Mahro v. Greenwich Savings Bank

Headnote

Interpleader — Sayings banks.

On petition of a savings bank sued for a deposit, showing that any person not a party to the action also claims the deposit, the court must make an order amending the proceedings by making such person a party defendant. It is not necessary to show the nature of the action, or that the bank cannot decide between the claimants without hazard to it.

Mahro v. Savings Bk., 16 Mise. Bep. 275, reversed.

Appeal from order of the City Court of Now York, General Term, affirming order denying application of the defendant to inter-plead one Charles Mahro as defendant.

The plaintiff brought suit in the City Court of New fork against the defendant, a savings bank,, to recover the amount of a deposit in her name. The .defendant, upon a petition alleging “that one Charles Mahro, who is not a party to this action, has made a claim against your petitioner for the money deposited by the said Amelia Mahro, which is the same fund which this action is brought to recover, and has claimed and claims that the said money and funds belonged to and are payable to him, and has forbidden your petitioner to pay the same to any other person, and the said plaintiff in this action also claims the said money and fund as her own, and that the said claims are each made without any collusion with your petitioner,” moved for an order making the said Charles Mahro a party defendant, as provided in section 115 of the Banking Code. Laws of 1892, chap. 689.

The plaintiff opposed the motion, and filed an affidavit stating that she had originally deposited the moneys, which were her property, in her own name, and that the said Charles Mahro had no interest whatever in the fund, and had never made any claim thereto prior to this action. The motion was denied at Special Term upon the ground set forth in the- order: “That the said petition of the defendant the Greenwich Savings Bank did not state the grounds of the alleged claim by Charles Mahro, and fails to show- that the said Charles Mahro makes such claim to the said fund that he should be made a party defendant herein, or for the granting of the other relief prayed for in the said petition.”

Prom this order the defendant appealed to the General Term of the City Court, where the order was affirmed,, the court saying : “ It is clear that the defendant asks to substitute another party as defendant on the mere allegation that he claims the fund; the petition does not state any facts showing the nature of the claim asserted by Charles Mahro, or that the claim is not frivolous, and without such facts it is impossible to say whether such claim creates any reasonablé doubt as to which party is entitled to the fund, or that the claim has any foundation in law. In Nassau Bank v. Yandes, 44 Hun, 59 , it is held that ‘ the rule now is that a reasonable doubt must exist in order to- justify the bringing of an action of interpleader/ and this case is cited with approval in Feldman v. Grand Lodge, 19 N. Y. Supp. 74 .” Citing, also, Williams v. Insurance Co., 8 N. Y. St. Rep. 567 ; Mars. v. Albany Bank, 19 N. Y. Supp. 791 ; .23 id. 658.

From the said order of affirmance the defendant appealed to the Appellate Term of the Supreme Court.

Prior to T875, a savings bank sued for a deposit might inter-plead any claimants to the same fund, either by an action in the nature o.f a bill of interpleader, or by motion under section 122 of the Code of Procedure, or section 820 of the Code of Civil Procedure, subject, • however,' to the rules laid down for the enforcement of those remedies, the later decisions holding that section 820 is a mere substitute for the former ■ action of interpleader and governed " by the same principles, and that an order of interpleader under section; 820 will only be granted where the defendant shows that.he cannot determine, without hazard to himself, to which of the claimants the money or thing belongs, and that there is reasonable doubt as to his safety in paying the money or making delivery to the plaintiff, and to this end, therefore, it is essential that he show the nature of the claim and the character of the demand made by the person sought to be interpleaded, and all the facts within the knowledge of the defendant concerning such claim. Mars v. Albany Savings Bank, 64 Hun, 424 , Schell v. Low, 75. id. 43; Feldman v. Grand Lodge, 19 N. Y. Supp. 73 .

But the Savings Bank Act of 1875 (chapter 371) gave to savings banks a further remedy by. providing that: “In all actions against any savings', banks to recover for moneys on deposit therewith, if there be any person or persons, whether husband or wife, or otherwise, claiming the same 'fund, who arc not

parties to the action, the court in which such action is pending may, on the petition of such savings bank, and upon eight days’ notice to the plaintiff and to such claimants, make an order amending the proceedings in said action by making such claimants parties thereto, and the said court shall thereupon proceed to hear and determine the rights and interests of the several parties to the said action in and to said funds.”

This provision was ' incorporated in the Banking Code of 1882, and is now found in section 115 of the Banking Law of 1892, chapter 689. The act confers a special privilege in this particular class- of cases, in view of the peculiarities of the savings ■ bank business. Zabriskie v. N. V. Savings Bank, N. V. Daily Register, April 30, 1881, Barrett, J. And under its' terms, upon the mere showing that any person not a party to the action claims the same fund which is the subject of the action, the claimant must, upon petition of the bank, be brought in as a party defendant to the action, and the court shall thereafter hear and determine the rights and interests of the several parties to the action in and to such funds, which may either remain with the savings bank upon the same interest as other deposits of like amount pending the action, or may be paid into court and the bank thereupon stricken out as a party.