German Savings Bank v. Friend — 61 N.Y. Super. Ct. 400

Majority

p. 400

THE GERMAN SAVINGS BANK, in the City of New York, Appellant v. EMANUEL M. FRIEND, et al., Respondents.

Headnote

Action for interpleader and injunction.

Held, that the plaintiff is not entitled to an interpleader, and, therefore, no right to the injunction sought existed, and the motion for an injunction was properly denied.

Before Freedman, P. J., and Gildersleeve, J.

Decided October 24, 1892.

Appeal from order of special term denying motion for an injunction. The points and facts in the case appear fully from the opinion of the court.

Sanders, Wagner & Auerbach, attorneys, and Lewis Sanders of counsel, for appellant, argued:—

I. Since the plaintiff offered to pay the money into court and could have been required to give security for a stay, the action should not be determined against it on the merits before a trial if. plaintiff presented a prima facie case, and showed that defendants were doing something which tended to defeat the judgment prayed for. Code, § 604.

H. The learned judge below cites 123 N. Y., 396 , as an authority for the denial of this motion. A reference to the case cited, Bassett v. Leslie, will tend to elucidate the question. Authority: “ This, under the old chancery practice, could have been called a strict bill of interpleader, and to maintain such an action it is necessary to allege and to show that two or more persons have preferred a claim against the plaintiff.” The complaint

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alleges that the defendants, Friend and House and Guttman and Podrasky, have each preferred a separate claim against plaintiff. The facts are shown by affidavit and not controverted. Authority : “ That they claim the same thing, Avhether a debt or duty.” Complaint: “ That the defendants severally claim the deposit by Guttman of $180.” Authority: “ That the plaintiff has no beneficial interest in the thing claimed, and that it cannot be determined Avithout hazard to itself, to which of the two defendants the money or thing belongs.” Complaint : “ The plaintiff is ignorant of the rights of the parties, and does not know to whom to pay it; it has no interest in the fund, and is advised by its counsel that it cannot safely pay to either of the defendants.” Authority : “ There must also be an offer to bring the money into court.” Complaint: “ And that the plaintiff upon the payment of the sum of $180 into court be hence discharged,” etc. It would seem to be somewhat difficult to draw a complaint more directly in conformity Avith the authority cited by the court below, as controlling against the plaintiff. A bill of interpleader will lie if it involve either difficult questions of law or doubtful questions of fact. Crane v. McDonald, 118 N. Y., 649 .

HI. There is no contract relation between plaintiff and defendants, Friend & House. The defendants assume the unwarranted position that- because Guttman was a depositor with plaintiff, that his alleged assignors occupy the same position. This is manifestly an error. Plaintiff has never agreed to pay Friend & House anything, and by assignment they do not become depositors. They cannot draw the money on their order but by virtue of the assignment, if at all. Guttman was still a claimant at the time of the bringing of the action. His denial on the hearing of the motion might work an estoppel against him from that date, but could not defeat the right of action already accrued. The officer of the bank, perfectly disinterested and unimpeached, alleges a

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.demand by Guttman subsequent to his alleged assignment to Friend & House. This court will not disbelieve his statement against the unsupported denial of a man held for theft by the police magistrate. Nor will it deny the plaintiff the right to try the merits of the case.

IV. Interpleader by motion is merely cumulative, and cannot be had when to grant the motion would introduce another controversy. Podrasky claims the money as his against both Guttman and Friend & House, not deriving title, through either. Friend & House claim under Guttman and adversely to Podrasky, Avhile Guttman claimed against both. In such case an inter-pleader by motion will not lie. “ Here is not only a contest between the plaintiff and the widow and these two claimants themselves, which must be litigated before the rights of all the parties can be fully determined. As, for instance, if the administrator is held to have a superior right to the widow, he is still subject to a litigation between himself and the assignee to determine whether the assignee is not entitled to the sum he claims out of the proceeds of the policy. That contest could not be carried on under section 820.” N. E. Mu. Life I. Co. v. Keller, 7 Civil P. R., 109, 111. The case at bar is within the meaning of this case.

V. This court has already determined, affirming the special term, that an action like this was well brought restraining a City Court suit. The German Savings Bank v. Habel, 45 N. Y. Superior Ct. R., 615.

McIntyre & Settel, attorneys, and Frederick B. House of counsel, for respondents, argued :—

I. Upon the papers :—That, as the motion was based upon the summons, complaint and affidavit, if those papers are insufficient and defective, the motion was properly denied. This is an action for an interpleader, in order to maintain which it must appear from the facts .stated and pleaded in the complaint: (a.) That two or

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more persons have preferred a claim against the plaintiff. (5.) That they claim the same thing, whether it be a debt or a duty, (c.) That the plaintiff has no beneficial interest in the thing claimed, (d.) That the plaintiff cannot determine, without hazard to itself, to which of the defendants the thing of right belongs, (e.) There must also be an offer to bring the money or thing into court. Dorn v. Fox, 61 N. Y., 264 ; B. & O. R. R. Co. v. Arthur, 90 Ib., 234; Nassau Bank v. Yandes, 44 Hun, 55 ; Atkinson v. Manks, 1 Cow., 69 1 ; N. Y. & N. H. R. R. Co. v. Schuyler, 1 Abb., 417 ; Killian v. Ebbinghaus, 100 U. S., 568 . (1.) The plaintiff fails to allege in its complaint what is required by the rule laid down in these cases, “that it cannot determine, without hazard to itself, to which of the defendants the thing of right belongs,” but avers, simply, “ that it is ignorant of the rights of the parties and does not know to whom to pay it.” A plaintiff in an equity action, such as this, has no right to come into court and ask for an inter-pleader on the ground that it is ignorant of the rights of the parties, for two reasons : (a.) Because by dispelling that ignorance and acquainting itself with the facts, as in this case, by a reasonable effort, it could and should have done, the filing- of this bill of inter-pleader, and the prosecution of this action^ might have been avoided. (5.) Because the allegation “ that it is ignorant of the rights of the parties,” and the averment required, “ that it cannot determine without hazard,” etc., are not synonymous. The fact that the plaintiff is ignorant of the rights of the parties, as in the complaint alleged, is not conclusive evidence that it cannot determine, without hazard to itself, to whom the thing of right belongs. (2.) The plaintiff also fails to allege what is essential and necessary, “ that it cannot safely pay to either of the defendants.” The complaint simply avers “ that it has no interest in the fund and is advised by its counsel that it cannot safely pay to either of the

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defendants.” It does not even allege that it is advised and verily believes that it cannot safely pay, etc., which might have added a little strength to the allegation, although even then it would be defective, as it has been held absolutely necessary for the plaintiff to allege positively and unqualifiedly “ that it cannot safely pay to either of the defendants.” An allegation that the plaintiff is “ advised ” respecting a certain matter is not conclusive thereof, or even of the belief of the party with respect to such matter. (3.) There is an absolute failure on the part of the plaintiff to bring the money into court, or offer to do so. There are three paragraphs or subdivisions of the complaint in none of which is it alleged that the money in question has been deposited into court, or that the plaintiff holds itself ready and willing to deposit the same. This is fatal. It has been held time and again that the prayer for relief is not the complaint; all allegations material and necessary to the cause of action mustprecede it, and, after the cause of action is properly stated, the prayer or demand is made. But let us examine into this prayer for relief, even as it stands. It prays : (a.) For an injunction restraining the prosecution of the action in the City Court by the defendants Friend and House; (&.) That the respective defendants be compelled to interplead among themselves; and, (c.) That the plaintiff, upon the payment of the sum of $180 into court, he hence discharged with its reasonable costs and charges. In other words, it demands (a) the injunction and (5.) the interpleader, absolutely, and (c) its discharge, upon a certain condition, namely, upon the payment of said sum of $180 into court. So much for the papers themselves, upon which alone, we contend, the court below was justified in denying the motion herein.

II. Upon the merits:—A separate action can no longer be maintained to restrain by injunction proceedings in another suit, in the same or another court, be

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tween the' same parties, where the relief sought in the latter suit may be obtained by a proper defence to the former one. An injunction should not be granted when there is a remedy at law, and especially not in this case, where another action is pending in which the rights of all the parties can be determined, and a judgment obtained which will be just and equitable to all the parties concerned. The courts do not favor a multiplicity of suits. Mandeville v. Reynolds, 68 N. Y., 528 , 546; McHenry v. Hazard, Ib., 580-587; Savage v. Allen, 54 Ib., 458; Winfield v. Bacon, 24 Barb., 154 ; Auburn City Bank v. Leonard, 20 How., 193 ; Sheehan v. Hamilton, 2 Keyes, 304 ; Haywood v. Hood 39 Hun, 596 . An independent action to obtain an injunction to restrain the proceedings in another action between the same parties cannot be maintained when a stay of proceedings, if proper, can be had by an application for such stay in the first action with the view of bringing in other parties. Haywood v. Wood, 39 Hun, 596 ; Savage v. Allen, 54 N. Y., 458 , affg 59 Barb., 291 ; Richardson v. Davidson, 24 State Rep., 638, 5 N. Y. Supple., 617; Carpenter v. Keating, 10 Abb. N. S., 223; Livingston v. Hudson River R. R. Co., 3 C. R., 143; Bowers v. Talmade, 16 How., 325 ; Dederick v. Hoysradt, 4 Ib., 350, 3 C. R., 86 ; Arndt v. Williams, 16 How., 244 ; Bennett v. Le Roy, 14 Ib., 178; 5 Abb., 55 , 156, 6 Duer, 683 ; Winfield v. Bacon, 24 Barb., 154 ; Tarrant v. Quackenbos, 10 How., 244 ; Hunt v. Farmers’ Loan and Trust Co., 8 Ib., 416; Grant v. Quick, 5 Sand., 612; Harman v. Remsen, 23 How., 174 ; Schell v. Erie Railway Co., 35 Ib., 438, 51 Barb., 368 ; Conover v. Mayor, 25 Barb., 513 , 5 Abb., 393 ; Chappell v. Potter, 11 How., 365 ; Moser v. Polhamus, 4 Abb. N. S., 442 ; Sippile v. Albites, 5 Ib., 76.

III. This motion is one which appealed to the sound discretion of the court, and its determination should not be disturbed except where there has been a flagrant

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abuse of that discretion, or an unquestionably unwise exercise of it. In this case there was not only not an abuse of that discretion by the lower court, but a wise, just and equitable exercise of it in favor of these defendants, and adversely to the plaintiff. The latter has had its day in court, or might have had it, in another action, but refused to avail itself of it, although the other court had jurisdiction over both the parties and the subject matter of the action. Under section 820 of the Code of Civil Procedure a defendant may, upon proof that a person not a party to the action makes a demand against him for the same debt or property, apply to the court for an interpleader. In an action in the nature of an interpleader, such as this, however, it is necessary to show what would be unnecessary under the section just quoted, namely, that the claim interposed is substantial and will probably be successful, in order to entitle plaintiff to maintain the action. Dreyfus v. Casey, 5 N. Y. Supp., 65 ; Nassau Bank v. Yandes, 44 Hun, 55 , aff’g Nassau Bank v. Ritzinger, 5 St. Rep., 309 ; Risley v. Phoenix Bank, 83 N. Y., 318 .

IV. It appears to be a well settled point of law, from the whole course of authorities on this question, that the equitable remedy of an interpleader, independent of recent statutory regulations, depends upon and requires the existence of certain essential elements, and among them the following: (a) The same thing, debt or duty must be claimed by both or all the parties against whom the relief is demanded. (b) All their adverse titles or claims must be dependent or be derived from a common source, (c) The person asking the relief—the plaintiff —must not have nor claim any interest in the subject matter. (d) He must have incurred no independent liability to either of the claimants ; that is, he must stand perfectly indifferent between them, in the position merely of a stakeholder. Pom. Eg. Jur., § 1322,

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vol. 2, 2d ed.; The N. Y. & H. R. R. Co. v. Haws, 35 N. Y., Super. (3 J. & S.), 380, 382, 383, 384. (The case last cited seems almost conclusive of nearly all of the issues involved on this appeal, and is respectfully submitted to the careful consideration of the court.)

Y. An action of interpleader cannot be sustained where, from the complaint itself, it appears that one of the claimants is clearly entitled to the debt or thing claimed, to the exclusion of the other. Bassett v. Leslie, 123 N. Y, 396 ; S. C., 33 St. Rep., 685 . Citing Mohawk and Hudson R. R. Co., v. Clute, 4 Paige, 384; Dorn v. Fox, 61 N. Y, 268 ; Baltimore and Ohio R. R. Co., v. Arthur, 90 Ib., 234. And the court below was evidently impressed with the fact that, upon the very face of the complaint, the plaintiff was not entitled to the relief demanded, the defendants Friend & House being clearly entitled to the amount claimed to the exclusion of the defendant Podrasky, who set up a separate, independent, paramount and antagonistic title, and not derivative under that of the bailor, or which originated after the commencement of the bailment; and the learned judge cites : Bassett v. Leslie, supra, and Lund v. Seaman’s Savings Bank, supra. And Mr. Justice Yan Brunt, in delivering the opinion of the court in the case of the Nassau Bank v. Yandes, 44 Hun, 55 , changed the rule laid down in Atkinson v. Hanks, 1 Cow., 703 , and held that an action for an interpleader, etc., cannot he maintained' where the facts stated do not show that there is a reasonable and substantial doubt as to the right of one of the defendants to a recovery.

On or about the 7th day of April, 1892, the defendant Guttman deposited tlie sum of $180 -with the plaintiff, which is a savings bank organized under the laws of this State. Subsequently the defendants Friend & House made a demand upon the plaintiff for said sum so deposited,

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claiming that it had been assigned to them by the defendánt Guttman, and they brought a suit in the City Court to recover such sum, which suit is defended by this plaintiff on the .ground that it knows of no such assignment by Guttman to Friend & House. Plaintiff further claims that the defendant Guttman still claims the deposit as his own, and that the defendant Podrasky also has made a demand on plaintiff for it, claiming that said money was stolen from him by the defendant Guttman. Plaintiff has, therefore, brought this action to restrain the defendants Friend & House from further prosecuting their action in the City.Court, and also to compel the respective defendants to interplead among themselves, and praying that plaintiff, upon the payment into court of the said sum, be discharged from all liability, and be allowed its costs and . disbursements. Plaintiff applied to the court for an injunction restraining the defendants Friend & House -from a further prosecution of their action in the City Court, and from the order denying the motion plaintiff appeals to the general term.

From the affidavit of defendant Guttman, it appears that he admits making the assignment to Friend and House, and denies that he has made any claim to the said money since such assignment. This disposes of any apprehension that plaintiff may feel as to the position of the defendant Guttman. It also appears from the appeal papers that the charge of stealing the money made by the defendant Podrasky against the defendant Guttman was dismissed by the Grand Jury. We think, therefore, that the plaintiff’s fears of the claim of Podrasky are too shadowy and unsubstantial to be given serious consideration. Guttman’s claim is disposed of by his own affidavit, in which he swears he assigned it to Friend & House. Podrasky, as plaintiff asserts, claims by title superior to the depositor, Guttman, alleging that Guttman stole the money from him ; but the court will refuse

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to allow a savings bank to implead an adverse claimant of a deposit in the bank, where claimant claims by title superior to depositor, as the bank cannot dispute the title of its depositor Lund v. Seaman’s Savings Bank, 20 How., 461 ; unless, indeed, the third party who claims to have been despoiled of his money proceeds by process of law to enforce his rights, which Podrasky has not done. See Lund v. Seaman’s Savings Bank, 23 How., 258 .

We are of the opinion that the plaintiff is not entitled to an interpleader, and, therefore, no right to the injunction sought, existed.

The motion for the injunction was properly denied. The order appealed from is affirmed, with ten dollars costs and disbursements.

Freedman, P. J., concurred.