Atkinson v. Manks

1 Cow. 691

• Court: New York Supreme Court
• Decided: April 15, 1823
• Status: Published

Opinion

Sutherland, J.

A preliminary objection as taken by the respondents, to so much of the appeal as relates to the decree made on the 13th Nov. 1821. It is contended that this decree was interlocutory—not final; and that the appeal should, therefore, have been entered within 15 days after the making of the decree.

By that decree, the Chancellor determined the bill of interpleader to have been properly filed. According to my view of the case, that was the material, and only material point, so far as the complainant was concerned, which the Court were called on to decide ; and the moment the decree was pronounced, the object was obtained, which the complainant sought by his bill. It is fairly to be deduced from the decree itself, that it would have ended there, had not the parties consented that the Court below should proceed in that suit, to determine the matters in controversy between them.

The subsequent parts of the decree, which order a reference to a Master, and establish the principles upon which it is to be conducted, are to be considered as a substitute, adopted at the request of the parties, for an interpleader suit between Atkinson & Holroyd, to determine their respective rights to the fund in Court; and also, as a substitute for any proceedings which it might otherwise have been necessary for Atkinson fy Holroyd to adopt, to test the correctness of Manks’ statement, as to the aggregate amount due from him to Booth.

"Whether the hill was properly filed.

If it were necessary, therefore, for the purpose of sustaining the appeal, I should have no hesitation in saying that the decree of Nov. 13th, 1821, in so far as it decided that the bill of interpleader was properly filed, was a final decree, within the meaning of the statute regulating appeals, the merits and principles of the causehaving been deter mined by that decision.

But it is unnecessary to resort to that part of the appeal at all, “ for the appeal from the last and final decree in the cause, necessarily opens for consideration, all prior orders or decrees any way connected with the final decree.” This was settled in the case of Jaques v. The Methodist Episcopal Church, (17 John. 548.) The appellant in this cause appeals from so much of the final decree as regards the allowance of the exceptions taken by Ilolroyd to the Master’s report; and also from so much thereof, as awards costs to the complainant.

In determining these points, it is necessary to consider every other material point in the cause.

Whether the bill of interpleader was properly filed, is "a question necessarily drawn into consideration, by the appeal from that part of the decree, which awards costs to the complainant; for, if it was necessary for him to file his bill, then his costs were rightfully awarded to him. If it was not a proper case for a bill of interpleader, then it was a proceeding in his own wrong, for which the defendants below ought to pay. The appeal from the last decree, therefore, brings before this Court, the whole merits of the cause.

The first question which I shall discuss, is, whether the decree of the Chancellor was erroneous, in determining the bill of interpleader to have been properly filed.

It is contended on the part of the appellant, that his answer denied every material allegation in the bill; that no replication having been filed to the answer, it must he taken as true, throughout; that the complainant below, having brought the cause to hearing upon bill and answer only, the evidence before the Chancellor shewed the bill to be false, and instead of decreeing that it was properly filed, he should have dismissed it with costs.

Nature and object of bill of interpleader. rÍ!Jhe a™e^° tions therein,

It is a well settled rule, that there cannot be a decree against an answer upon the facts charged in the bill and denied in the answer, unless the bill be supported by two witnesses, or one witness and circumstances. (2 Atk. 19. 1 Bro. Ch. Cas. 52. 1 John. Ch. Rep. 459.)

It is also a well established principle in Chancery proceedings, that a distinct fact set up in answer by way of avoidance, is to be taken as true, without proof, unless the complainant, by a replication, put the fact in issue, and give the defendant an opportunity to prove it. (Green v. Hart, 1 John. Rep. 590, per Spencer, J.)

If the answers in this case, therefore, clearly and unequivocally deny those allegations in the bill, upon which alone, it can be sustained; or, if they set up new matter in avoidance of those allegations, then the appellant is right in saying that the bill shouhl have been dismissed.

This brings us to the consideration of the material object Of a bill Of interpleader.

, It is defined to be, “ a bill exhibited, when two or more persons claim the same debt or duty from the complainant by different or separate interests ; and he, not knowing to which of the complainants he ought, of right, to pay or render it, fears that he may be damaged by the defendants, (as by paying his money to a wrong hand) and, therefore, exhibits his bill of interpleader against them, praying that the Court may judge between them, to whom the thing belongs, and that he may be indemnified.

“ It claims no right in opposition to" those claimed by the persons against whom the bill is exhibited, but only prays the decree of the Court, to decide between the rights of those persons for the safety of the complainant.” (Cooper’s Equity, Plead. 456. Harrison’s Ch. Pr. 96. Mad. Ch. 172-3.)

The nature of the allegations, therefore, in every bill of interpleader are, 1. That two or more persons have preferred a claim against the complainant ; 2. That they claim the same thing; 3. That the complainant has no benefi i-il interest in the thing claimed ; and 4. That he cannot d' e o-nc, without hazard to himself, to which of the defendants the thing of right belongs.

Amount of fund not the subject of inguiry ; Except to shew fraud. Whether material allegations denied. Answer examined.

To prevent this proceeding from being resorted to foi the purpose of giving an advantage to one of the claimants over the other, the complainant must annex to his bill an affidavit, that there is no collusion between him and any of the parties ; and he must bring the money or thing claimed into Court, so that he Cannot be benefitted by the delay of payment, which may result from the filing of his bill.

It seems to me, from this short consideration of the nature and object of a bill of interpleader, that the amount of the fund or matter in the hands of the complainant, upon which hostile claims are alleged to have been made, cant never be a substantial object of inquiry upon such bill. That amount must be taken to be as stated by the complainant, and cannot be controverted by the answers, for the purpose of having it adjudicated upon. It may, unquestionably, be denied by the answer, for the purpose of shewing fraud or collusion, on the part of the complainant, and, I humbly conceive, for no other purpose.

Are, then, the material allegations in the bill denied by this answer of Atkinson ? It is not pretended that they are denied by Holroyd ; for he expressly admits, “ that the. statement of facts contained in the complainant’s bill, is correct and accurate.”

Does Atkinson deny that he and Holroyd have both preferred claims against Manks ? He expressly admits that he obtained from Booth the order of Jan. 8, 1820, upon Manks for £1642, as set forth in the bill; that he forwarded the same to- Messrs. Sewall, Williams Co. of Boston, who presented the same at the time stated in the complainant'1 s bill. He admits that a suit upon the order had been commenced against Manks by his attorneys, the Messrs. Sedgwicks.

In relation to Holroyd?s claim, he admits that the complainant, Manks, in the early part of August, 1820, informed Sewall, (Atkinson’s agent) that an order had been presented to the complainant from Booth, for all Booth?s property in the hands of the complainant, but does not mention in whose favour the order was drawn. In another part of his answer he says, “ he thinks jit probable that Holroyd may have made some claim to the proceeds of goods shipped by Booth to the complainant;” but he has no particular knowledge of this, Iti no part of his answer does he deny, what is expressly alleged in the bill, that Holroyd had forbidden Manks to pay over the fund to Atkinson, and had threatened him with a suit upon his own order. The fact, therefore, that hostile claims to the same matter or thing, have been made upon Manks, by p'ersons capable of prosecuting those claims, is, not only not denied, but is admitted by the answers of both defendants. I sáy the same matter or thing ; for the balance of Atkinson’s order, exceeding the amount in Manks’ hands, and the whole of that amount being claimed as applicable to that order, it is apparent, that if any thing is claimed under Holroyd’s order, it must be the same thing that is claimed by Atkinson.

It is not pretended by the answers, that Manks has any interest in tiie controversy, or is any thing more than a mere stakeholder, unless his character is changed by the alleged acceptance of Atkinson’s order, which I shall hereafter consider.

Is the right, then, of Atkinson to the fund in qüestíori so clear, upon the bill and answer, that Manks must have known that he Could incur no hazard by paying it to him ? This question is sufficiently answered by the fact that Holroyd had forbidden him to pay it to Atkinson, and threatened him with a suit tó recover it upon his own order. After that, he was not bound to exercise any judgment upon the Subject.

The Lord Chancéllór, in Langston v. Boylston, (2 Ves. Jun. 109,) says, “ á party claiming no fight in the subject, is doubly vexed by having two legal processes going on against him, in the names of different persons, at the same time ; he comes upon the most obvious equity to insist that those persons claiming that, to which he makes no claim, should settle that contest among themselves and not with him.” He remarks, that “ it may be said in all cases of interpleader, ás it hás been said in this 5 ‘ Stand the action ; if A proceed first, and you have a good defence against him3 that puts an end to his claim j if A succeed, that is a defenceagainst the claim of B.' That is precisely the situation m. which the plaintiff ought not to be placed.”

The origin of the fund not material. That was a question between parties claiming the iqntL Whether order was accepted. If a bill of exchange, and accepted, bill 'A''mid have Be in dismissed.

But it is said that Manks' allegation in his bill, that the sum of $2938,50, in his hands, arose from money loaned to him by Booth in England, and from payments made to him as Booth's agent, by H. & G. Vail, of Troy, and that no portion of that sum is the proceeds of goods shipped to him by Booth, is denied in the answer •, that the Chancellor, therefore, at the hearing of the bill and answer, should have dismissed the bill, it having been proved false in so essential a point.

If the view which I have already taken of the nature and object of a bill of interpleader, be correct, it follows, that the manner in which the fund in Monk's hands was composed, whether of the proceeds of Booth's goods or of money borrowed from Booth, could never be the subject of consideration, or inquiry, in determining whether the bill of inter-pleader was properly filed.

That was the matter in controversy between Atkinson and Holroyd, the matter which • they were to discuss, if they should be decreed to interplead; the very matter, the discus- ■ sion and decision of which, Manks ought to get rid of by his bill of interpleader. Whether the allegations in the bill, therefore, upon that point, were true or false, is perfectly immaterial, except, as I have before remarked, upon another point, as affording evidence of fraud or collusion on the part of the plaintiff.

But again: it is strongly urged that it is apparent upon the bill and answer, that Manks accepted the order in favor of Atkinson j and that the bill should have been dismissed. upon that ground;

I concur in the opinion, that if the order was a bill of exchange, and there was an absolute acceptance of it, by Manks, the bill should have been dismissed : because, by the acceptance, Manks would be liable to pay the order at all events. Atkinson's right, therefore, to enforce payment from Manks would be clear beyond all doubt, whether the fund in Manks' hands was the proceeds of goods or not. In that question, therefore, Atkinson would cease to have any int-erest. The claims of Atkinson and Ilolroyd would not then he in collision. The one would rest on the ground of. the accepance; the other on the ground that Manks hadfunds in his hands belonging to Booth. In such an event there could be no pretence for awarding an interpleader between them. .If Manks accepted the order, and it was equivalent to a bill of exchange, he ceased to be a mere stakeholder, and became a party in interest to the controversy; for being compelled to. pay Atkinson at all events, he was deeply concerned in shewing that the funds in his hands were proceeds of goods. for unless he could shew that, he would be compelled to pay Holroyd’s order also.

But was not a bill of exp change, ,. Acceptance binds only to extent or-pa“ase‘ shew extent, Acceptor liable on his ^ent*1 aoniy' whereof the waa proof.

But this was not a bill of exchange. It was not an order for the payment of money only, which is an indispensable requisite in a bill of exchange. Besides : it was in the alternative, for goods or the proceeds thereof. If it had not been in the alternative, but had been for £1642, proceeds of goods, it would not have been a bill of exchange, because payable upon a contingency and out of a particular fund. (Ch. on Bills, 37-8. 3 Wils. 213.)

Admitting, then, that Manks did accept the order: that his ?/ r letters to Sewall, Williams fy Co. were equivalent to the ordinary mode of accepting a bill of exchange, which is by writing, “ accepted,” upon the bill, and signing the name to it, it amounted to no more than an agreement or promise on his part to pay the order according to its tenor; that is, to pay it in Booth’s goods, or in the proceeds of them. If he refused to pay, Atkinson could not sue him, as the drawee; of a bill upon his acceptance ; but only upon his agreement, or contract to pay; and his acceptance could be used as evidence of such agreement or contract. But to sustain his action, it would be necessary for him to aver and prove that Manks had in his hands either goods, or the proceeds of them, belonging to Booth ; for, until that was- proved, neither a violation of his agreement, nor a consideration for his promise, would be shewn. The order being to pay from that fund only, his acceptance could not make him liable beyond it. (Kyd on Bills, 58. Maker v. Massias, 2 Bl. Rep. 1072. Carlos v. Fancourt, 5 T. Rep. 482. Alves v. Hodgson, 7 T. Rep. 237, Chit. on Bills, 12, 63, 154. Kyd on Bills, 74.)

If sb order, toaMl'oftxchange, is flrawn upon another, ■ and lAvithoutToZ ?ideration, it is ^nuduw pacation betireen the drawer & pD^bind^0^ ¿peeptor.

Or suppose Atkinson’s action was for money had and received to his use; Manks’ acceptance would be evidence, that whatever monies had come to his hands from the proceeds of Booth’s goods, since the date of the acceptance, belonged to Atkinson, arid were received to his rise. But the main question whether any,' and if any, what amount of such pro-' ceeds had, in truth, copie to his hands, would be left to he made out by Atkinson in proof, before he could recover.

Now, that is" the precise question upon which the respective rights of Atkinson and Holroyd dependí ‘ If the funds in Manks’ hands, are the proceeds of goods, they belong to Atkinson f if'not, they belong to Holroyd. Whether they are the one or the other, is á matter of indifference to Manks’. He, therefore, prays that they may be compelled to settle it between them. And whether he has accepted the order of Atkinson or not, does not, in my judgment, affect his right to such a decree.

" But it is sajd, that the letters from Manks to Sewatt, Williams & Co. of the Vjth of March, and the 2d; 0f june j 920, are moré than a bare acceptance of the or- ’ , . ■ • 1 der; that they amount to an absolute, unconditional promise to pay £1000 upon that order. Waiving the" question of fact—could a recovery be had against Manks, upon süch á ;n truth, he had" no funds belonging to Booth, being the proceeds of goods," either in law or equity, unless Au kinson could show either fraud or special damage ? The or-not beiiig a bill of exchange, the consideration which between Booth and Atkinson could not enure to th§support of the promise by Maníes. Atkinson would, there! fore, be compelled to ávér and prove, that Manks had in his hands either goods or the proceeds of goods' belonging to Booth, to the amount of £1000," or he could n.ot recover, the promise being without consideration, and therefore void. Even by such a promise, therefore, Manks would not he precluded from asking the Court of Chancery to compel AÜ kinson and Holroyd to interplead,

Upon every view of the case, therefore, I think the Chan- , cellar tvas right in determining, upon the pleadings, that1 ttys Ml was properly filed.

appeal °* reheamg by consent, and^arty acted under it? Whether the funds were the proceeds of Booth’s goods,

Whether the decree of November 13th, 1821, was erroiieous, in ordering the Master, upon the reference, “ to take and state the account between Manks and Booth, up to the tirpe of filing the bill,” and in directing him “ to allow proper deductions for the charges, expenses and commissions of Manks,” 1 do not consider open for inquiry. The decree, in every thing that respects the reference, purports to have been made by consent. If the Chancellor was mistaken in supposing Atkinson’s counsel to have consented to it, application should have been made to him to have the mistake, as to the consent, corrected. That course not having been pursued, this Court cannot try the question whether there was a mistake or not, We must take the fact to be as stated in the decree, and entirely disregard the suggestion of r mistake. No appeal or re-hearing lies from a decree made by consent. ’ (2 Mad. Ch. 577. Bradish v. Gee, Ambl. 229.) But, independent of the consent, Atkinson is precluded from objecting to the order of reference, by having acted under it. If that order established principles, or gave instructions to the Master, which he thought erroneous, he should have appealed from it at once, instead of prosecuting the reference. After having tried the practical operation of those principles and instructions upon his rights, it is too late for him to object to them. Any error that the Master may have made in the application of those principles, in the enquiry before him, is open for correction upon the coming in of his report. But the principles, themselves, are the law of the Master, necessary to be settled before he enters upon the reference, and therefore admitted to be, settled by the parties who prosecute and conduct the reference. (Vid. 9 John. 468, per Spencer, J.)

The next point which I shall consider is, whether the decree is erroneous in deciding that $972,22, of the fund in • ,■ i r t> 7 • j 'j fjourt, are not the proceeds ot. Booth’s goods, and are therefore covered by the order of Holroyd,

' [Here his Honour examined the evidence, and concluded, that the decree of the Chancellor was erroneous, in allówing so much of the first exception to the Master’s report 'as related to the $222,22, borrowed by Manks from Booth ; but that the decree upon the exceptions was right in all other respects.]

The only remaining point relates to the costs. The bill of interpleader having been properly filed, it necessarily follows that the complainant is entitled to his costs out of the fund in Court. This is obviouslyjust and equitable, and so are all the authorities since the case of Hendry v. Key, (1 Dick. 291. Vid. 6 Ves. Jun. 418. 9 id. 107. 1 Mad. Ch. 148.)

Under all the circumstances of this case, I see nothing improper in allowing the costs of Atkinson and Holroyd, also, to be deducted from the fund, neither of them having been entirely right or entirely wrong in their claims. This was a matter of sound discretion with the Chancellor, and I think that discretion has been properly exercised.

Upon the whole case, therefore, I am of opinion, that the decree of the Chancellor should be affirmed, except so far as it relates to the £¡50, and that, with respect to this, it should be reversed.

The rest of the Court were unanimously of the same opinion, except as to the disposition of the fund between Atkinson and Holroyd. Savage, Ch. Justice, went into the evidence, at large, on this point, and concurred with the Master in his report, being of opinion that Atkinson was entitled to the whole fund; and that, consequently, Holroyd should be denied his costs. But as the discussion upon this point was a mere examination of facts, and was not supposed by the Judges to involve any one question of law, it is, for that" reason, omitted.