Fulton Bank v. Chase — 25 N.Y. St. Rep. 711

Majority

p. 711

The Fulton Bank of Brooklyn, App’lt, v. Herbert D. Chase et al., Resp’ts.

(Supreme Court, General Term, Second Department,

Filed June 28, 1889.)

Headnote

Interpleader—Separate claims—When lies.

Plaintiff was the holder of certain securities and the demand for payment not being complied with, sold the same, producing a surplus to them over the amount claimed. In an action for conversion brought by various parties against plaintiff, the latter brought suit to restrain them from taking further proceedings and to require them to interplead together concerning their claim to the surplus fund. Held, that the complaint was properly dismissed, the various claims being separate and distinct, and having no inherent connection with each other.

Appeal from a judgment entered upon a decision rendered at special term.

In January, 1885, the Fulton Bank of Brooklyn, loaned to one George K. Chase the sum of $40,000 upon what is known as a “ collateral stock note,” signed by defendant Herbert D. Chase, and the securities mentioned therein.

From time to time portions of these securities were surrendered, the bank either receiving payments on account of said loan, or accepting other securities as collateral in lieu of those surrendered.

About August, 1887, the bank began demanding pay- ■ ment of the loan, which demand was not complied with, and it advertised' the collateral for sale. Mr. George K. Chase, died September 29,1887, and on the 19th of October, 1887, the securities were sold, producing to the bank a surplus over the amount claimed by it of $3,157.07.

Various parties claiming to be owners of the securities commenced actions against the bank for damages, alleging conversion.

On March 16, 1888, the executors of George K. Chase, deceased, served upon the bank notice that they claimed ownership of said sum of $3,157.07, and interest, “being the balance remaining after the sale of stocks delivered to you under an original loan of $40,000 to George K. Chase, now deceased.”

On March 23, 1888, the bank commenced this action against all said claimants to have the title to this sum of $3,157.07 determined, praying judgment “that each of said defendants may be restrained by injunction from taking any proceedings against the plaintiff in relation thereto.”

“That they may be required to interplead together concerning their claims to said sum of $3,157.07.”

“ That this plaintiff may be authorized to pay the said sum of $3,157.07 into court, by depositing the same under the order and direction of this court, with such depositary as this court may direct.”

p. 712

‘ ‘ That upon so depositing the same in compliance with such order, the plaintiff be discharged from all liability to either of said defendants in relation thereto.”

Bergen & Dykman. for app’lt; F. & C. A. H. Bartlett, for resp’ts.

The judgment appealed from is clearly correct. The claims of the various parties against the bank are separate and distinct; each depends on its own circumstances, and they have no inherent connection with each other.

If the bank has no legal ri^ht to use the stock of Meyer, and by such use incurred a liability to the owner of the stock, the action already brought by the party claiming to be injured is the most convenient means to determine the question. If the bank had such authority, it will prevail in the action. If it had not, the court cannot afford any relief, and it must respond for such damage as it has inflicted.

There is no propriety in the claimants, under the Meyer transaction, being hampered by matters with which they have no concern. The same may be said of each of the other claimants. Their rights depend upon alleged unauthorized dealings of the bank with securities now claimed to be owned by the various plaintiffs. And the limit of their recovery, if they can sustain that claim, does not depend upon the amount realized by the bank.

When those claims are disposed of, if the bank prevails and shall still have in its possession a fund it cannot conscientiously keep, an application to pay it into court might be entertained. But the court cannot now grant such permission upon the terms asked, viz.: that the bank be protected against all the claimants.

Judgment affirmed, with costs.

All concur.