Lane v. New York Life Ins. Co. — 29 N.Y. St. Rep. 952

Majority

p. 952

Marietta L. Lane, Ex’rx, Resp’t, v. The New York Life Ins. Co., Impl’d, App’lt.

(Supreme Court, General Term, First Department,

Filed February 14, 1890.)

Headnote

Equity—Holder oe fund in suit may be allowed to deposit same WHERE BOTH CLAIMANTS ARE PARTIES—CODE ClV. PRO., § 820.

, In an action brought to determine the right of the plaintiff to a certain fund where the other claimant is made a party defendant the court has power to allow the holder of the fund to deposit the same in court and be discharged. Section 820 of the Oode has no application to such a case, as it was intended to apply to actions at law and not to actions in equity.

Appeal from order denying motion on the part of the defendant The M. Y. Life Insurance Co. for leave to deposit in court the fund in dispute.

Jas. Byrne, for app’lt; B. J. Nathan and G. S. Hastings, for resp’t.

This action was brought by the plaintiff against the Mew York Life Insurance Company and one Malvina A. De Metz a, respondent herein, to determine the rights of the plaintiff to a certain fund in the hands of the defendant company.

The complaint alleges a willingness on the part of the company to pay this money and then alleges a notice upon the part of the defendant De Metz to the defendant, the insurance company, to withhold the payment of such amount from the plaintiff and thereby prevented the plaintiff from collecting and receiving such amount The complaint further alleges “ That said amount has been retained and is now in the possession of the defendant The Mew York Life Insurance Company to abide the event of this action, by reason of the said acts of the defendant Malvina A De

p. 953

Metz, and for that reason the said Malvina A. De Metz is made a defendant herein.

The complaint prays judgment that the plaintiff be adjudged to be entitled to said sum of money and that the defendant company be adjudged to pay the same to the plaintiff.

The defendant De Metz answered, setting up her right to the fund in question and praying judgment that the company be adjudged to pay the same to her.

The defendant company upon this state of facts made application to the court to be allowed to pay the said fund into court and to have the action discontinued as to it.

This motion was denied upon the ground that the court had no power to grant the same, and from the order thereupon entered this appeal is taken.

It is evident that the motion was denied upon the ground that the only power of the court to intervene arose from § 820 of the Code of Civil Procedure, which provides that a defendant against whom an action to recover upon a contract, or an action of ejectment, or an action to recovera chattel is pending, may at any time before answer, on proof by affidavit that a person not a party to the action makes a demand against him for the same debt or property, have an order for the substitution of that person in his place upon giving proper notice. It is apparent that the case at bar does not come within the provisions of § 820, because both the claimants to the fund in question are parties to the action. But it is to be observed that that section was intended to apply to actions at law and not to actions in equity. The provision is that a defendant against whom an action to recover upon contract is pending may obtain an order of substitution. This action is not upon contract. It is brought for the purpose of settling rival claims to a fund in the hands of the defendant company. The section in question has no application to actions brought to settle conflicting claims where all the parties are before the court and the action is not upon a contract out of which the fund arises, but where the ground of interposition upon the part of the court rests upon the fact of the admitted existence of the fund and the conflicting claims in respect thereto. A court of equity needs no such authority to be conferred upon it, because it has the power at any time to discharge a defendant as a party to an action where its presence lias become unnecessary. This provision of the Code was intended to afford the same relief in actions at law which could be afforded in equity where all the parties were before the court. It enabled the court to allow the holder of the fund to bring the money into court and be discharged from all further litigation.

This a court of equity necessarily has, having all the parties before it. One of the defendants, having no interest whatever in the controversy as between the plaintiff and its co-defendant, being merely the holder of the fund, makes its application to the court to be discharged upon bringing the fund into court. The result of a different rule would be that the court could afford

p. 954

greater relief in actions at law than it can do in actions in equity. It is apparent that this provision of the Code is applicable only to actions at law, because in an action at law to recover upon this policy it would not have been possible to have made the claimant De Metz a party. She could have demurred; no cause of action would have been set up against her, and it is only by reason of the provisions of § 820 of the Code that she could have been brought in, and she must be brought in in that way, and in no other. In an action in equity, upon the other hand, brought to determine the rival claims of these two parties to this fund she could be made a party, was made a party, and the court having obtained jurisdiction of these various parties could permit the discontinuance of the action as to one of the parties, allowing the others to go on and litigate the subject matter of their dispute.

The rule laid down in Barbour’s Chancery Practice, vol. 2, p. 120, is explicit that it is not necessary to file a bill of inteiqjleacler where the holder of the fund is already a party to a suit in this court (namely, the court of chancery) brought by one claimant against the other to settle the right to the fund in his hands.. The holder of the fund in such a case should apply by petition in that suit for leave to pay the fund into court, to abide the event of the litigation between the other parties. And Bedell v. Hoffman, 2 Paige, 199, and Badeau v. Rogers, id., 209, are cited as authorities for this preposition, which they sustain.

We think, therefore, that the learned judge in the court below erred in supposing that a court of equity, having all the parties before it, had no power to grant relief in a case such as the one at bar.

The order should be reversed, with ten dollars costs and disbursements as against the respondents Lane and De Metz.

Bartlett and Barrett, JJ., concur.