Galusha v. Flour City National Bank

4 Thomp. & Cook 68, 8 N.Y. Sup. Ct. 573

• Court: New York Supreme Court
• Decided: June 15, 1874
• Status: Published

Opinion

Gilbert, J.

The object of this suit is to restrain the defendant bank from returning a promissory note made by the plaintiff to the other defendant (Lewis), from whom it received it, for the purpose of demanding and receiving payment thereof. The suit was commenced after the note fell due, and had been dishonored. Mr. Lewis, who sent the note to the bank, resides in Pennsylvania, and has not been served with process, or in any way appeared in the-suit. The note forms part of the estate of a bankrupt, and is held by Mr. Lewis as a special receiver, he having been appointed such by the district court of the United States for the eastern district of Pennsylvania. It is not shown, however, that the title to the note has been vested in Mr. Lewis, or that he claims any ownership in it. The averments on the part of the plaintiff are, that the note was obtained by fraud, and that the consideration on which it was given has failed.

We think the action ought not to be maintained. The note being over due, the plaintiff has a perfect defense at law. There appears to be no reason, therefore, for his coming into a court of equity to protect his lights. No doubt- the jurisdiction invoked may be exercised, but the granting of relief in cases of this kind is not by way of absolute right, but is a matter of sound discretion, to be exercised by the court, as it thinks proper, according to the circumstances of each case. When it entertains jurisdiction of such cases, it is upon the principle quia timet, or for fear that future injury or injustice might arise.

The only allegation made by the plaintiff, on this subject, is: “that if said note is permitted to be returned to said defendant Lewis, it will be a means of annoyance to the plaintiff, it may get into the hands of innocent parties, who will be defrauded thereby; and it may, and doubtless will, be used to injure the plaintiff in his credit and in his business. This is quite insufficient, if not altogether frivolous. No facts are stated justifying an apprehension that Mr. Lewis will make any improper use of the note. He who gives a note, and does not pay it, must expect annoyance to his credit, arising from these circumstances, even though payment was rightly refused; but they scarcely afford adequate cause for the interposition of the extraordinary powers of a court of equity. Nor is the plaintiff called upon to protect the innocent parties, who, he says, may purchase the note, and may thereby be defrauded. Upon this ground, alone, the injunction was improperly granted, as a discovery is no longer needed or allowed, to enable a party to establish his defense at law. Mitchell v. Oakley, 7 Paige, 70; Crane v. Bunnell, 10 id. 341.

It is also an insuperable objection to the continuance of the injunction, that jurisdiction of the person of Mr. Lewis has not been acquired, and that under the facts, as they now exist, it cannot be obtained. For obvious reasons, the fourth subdivision of section 135 of the Code does not apply to the case. The third subdivision of that section contains the only authority to make service upon Mr. Lewis, by publication, and the case has not been brought within it.

L It does not appear that he has any property in this State, except the note in controversy.

2. The note does not belong to him, but has been only temporarily intrusted to his care, by the district court, as one of its officers or agents.

3. A note sent forward for collection, to be returned immediately if not paid, is not within the purview of the statute. Haight v. Husted, 4 Abb. 348; S. C., 5 id. 170.

The case then must proceed, if it proceed at all, against a mere agent, for the sole purpose of preventing his performance of a plain duty to his principal. We cannot sanction such a claim.

The motion to dissolve the injunction was regular. Although the county judge heard the parties before allowing it, it was still a preliminary order only, and was a proper subject of a motion to dissolve it, on bill and answer.

Without discussing the question of the power of the court to interfere with a receiver appointed in a foreign jurisdiction, therefore, we think the order appealed from must be affirmed.

Order affirmed.