Gibson v. Goldthwaite

7 Ala. 281

• Court: Supreme Court of Alabama
• Decided: January 15, 1845
• Status: Published

Opinion

COLLIER, C. J.

— A bill of interpleader He?, where two or more persons severally claim (he same thing under different titles, or in separate interests from another, who, not claiming any title, or interest therein himself, and not knowing to which of the claimants he ought of right to render the debt, or duty claimed, or to deliver the property in his custody, is either molested by an action or actions brought against him, or fears that he may suffer injury from the conflicting claims of the parties. The object of the application to a Court of equity is to protect the complainant, not only from being compelled to pay or deliver the thing claimed to both the claimants, but also from the vexation attending upon the suits, which are, or possibly may be instituted against him. [2 Story’s Eq. 112-3; 1 Smith’s Prac. 468; Mitf. 49; Atkinson v. Monks, 1 Cow. Rep. 703.] In the case last cited, the Court say that the appropriate allegations 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 beneficial interest in the thing claimed: and 4. That he cannot determine without hazard to himself, to which of the defendants the thing of right belongs. [See also Story’s Eq. Plead. 237 to 241.]

It is sufficient that each of the defendants has a claim to the matter in question, although but one of them can maintain an action at law, the principle being to prevent a plaintiff from being twice vexed. And it is not necessary that he should have been actually sued. [1 Smith’s Frac. 473.] In Richards v. Salter, 7 Johns. Ch. Rep. 447, it was said, that “The bill of interpleader is equally proper, though the party be not actually sued, or be sued by one only of the conflicting claimants, or though the claim of one defendant be actionable at law and the other in equity.” To the same effect are Morgan, et al. v. Marsack and another, 2 Mer. Rep. 107; Angell v. Hadden, 15 Ves. Rep. 244. True, in Barclay v. Curtis, et al. 9 Price’s Rep. 661, the Court of exchequer held, that a bill of interpleader could not be entertained where the claim of one of the defendants was founded on an equitable right; but this case is not supported by authority, and we think is indefensible upon principle. [See also Darden’s adm’r, et al. v. Burn’s adm’r. and another, 6 Ala. Rep.]

That the claimant of money or other thing may not be wrongfully delayed, the complainant in a bill of interpleader should make an affidavit, that his bill is not filed in collusion with either of the defendants named therein, but merely of his own accord to obtain the relief sought. [1 Smith’s Prac. 474; Mitf. Plead. 49; 1 Cow. Rep. 704; 2 Story’s Eg. 116; Story’s Eq. Plead. 237.] The object of such an affidavit, it is said, is to prevent this proceeding from being resorted to for the purpose of giving an advantage to one claimant over the other; and if it is not annexed to the bill the want of “it is in strictness a good ground of demurrer.” [Story’s Eq. Plead. 238; 1 Cow. Rep. 704.] But if the defendants, without thus objecting that the complainant has not negatived collusion by his affidavit, submit to answer the bill, neither of them can at the hearing, or on error, object that it was irregularly exhibited. As the affidavit was intended for their benefit, and to prevent injury or inconvenience to the defendant who has the superior right, they may dispense with it, and their answers amount to an implied waiver. [See McElwaine v. Willis and others, 3 Paige’s Rep. 505.]

In Cooper and another v. De Tastet and another, 1 Taml. Rep. 177, it was held, that where goods were deposited with a warehouseman as a private agent, he could not maintain a bill of interpleader. This decision is placed upon the ground that an agent must account to his principal, and whether the latter had the superior title or not, a delivery of the goods to him would discharge the former from liability to a third person.*" The settled rule both at law and in equity is, that an agent shall not be allowed to dispute the title of his principal to property, which he has received from, or for his principal; or to say, that he will hold it for the benefit of a stranger. [2 Story’s Eq. 122,] So it has been held, that, where one person receives money for another, or his agent, and the money claimed by a third person, who gives notice of his claim, a bill of interpleader will not lie; for a mere agent to receive money for the use of another cannot by notice be converted into an implied trustee. His possession is the possession of his principal. [Id. 123.]

The true limit of the jurisdiction upon bills of interpleader, it is supposed is not settled by the authorities in a very precise manner. [2 Story’s Eq. 120; Bowyer v. Pritchard, 11 Price’s Rep. 115.]

In Lowe v. Richardson, 3 Madd. Rep. 277, it was doubted whether a bill of interpleader would lie at the suit of a master of a ship, where the adverse claims were paramount to the bill of lading; although it was conceded that it was maintainable, where the parties claim adversely at law or in equity under the bill of lading. But subsequently, the same Court, in Morley v. Thompson, 3 Madd. Rep. 564, decided that the master might file such a bill, although the adverse claims were paramount to the bill of lading. Mr. Justice Story remarks upon this decision, that the bill does not seem to have been founded upon any legal adverse titles, wholly independent of each other, and not derived from a common source. [2 Story’s Eq. 121.]

In the cases of adverse independent titles, it is said, the true doctrine seems to be, that the party holding the property must defend himself as well as he can at law; and he is not entitled to the assistance of a Court of equity; for that would be to assume the right to try merely legal titles, upon a controversy between different parties, where there is no privity of contract betwen them and the third person, who calls for an interpleader. [2 Story’s Eq. 124.] In Crawshay v. Thornton, 2 Mylne & Craig’s Rep. 1 to 23, Lord Cottenham said, that a bill of interpleader, as between principal and agent, was admissible only where the claim was under a derivative, and not under an adverse title.

In respect to the mode of proceeding, an interpleading bill is considered as putting the defendants to contest their respective claims, just as a bill by an executor or trustee to obtain the direction of the Court upon the adverse claims of the different defendants. If therefore at the hearing, the question between the defendants is ripe for decision, the Court decides it; but if it is not ripe for decision it directs an action, or an. issue, or a reference to the master. [1 Smith’s Prac. 472 ; 2 Story’s Eq. 125; Angell v. Hadden, 16 Ves. Rep. 202 ; City Bank v. Bangs, 2 Paige’s Rep. 570.]

From this view of the law, it will sufficiently appear that the objections here taken to the bill and the mode of proceeding thereon are not maintainable. The bill alledges that all the defendants have set up a claim to money collected by the complainant, on the notes and bills placed in his hands for collection by the “Tombigbee Rail Road Company;” and that two of the defendants have brought suits at law for its recovery: that two of the defendants claim the entire sum as assignees of the corporation, and the other defendant claims a part thereof under an order or transfer by one of the assignees: that the complainant has no interest in the sum collected by him (at least beyond his commission which it is competent for him to retain,) but holds the same for the use of the party entitled thereto: that he cannot determine without hazard to himself, whieh of the defendants is entitled to the money and thereupon offers to bring the same into Court.

We have seen, that to authorize the complainant to file his bill of interpleader it is not necessary that all the claimants should have sued him, or that they could have sued himat law in their own names. If it were necessary to have'a legal right of action, which we by no means admit, two of the defendants might sue at law in the names of the corporation for their use, if the assignments under which they claim are operative against it; and this is certainly sufficient according to the authorities which lay down the most stringent rule on this point in favor of the defendants.

The argument that the complainant being an agent of the corporation merely, cannot call upon the defendants to inter-plead, cannot be supported. The authorities cited merely show that a private agent cannot question the title of his principal to money or property which he has received from, or for him, by bill of interpleader, where a third person sets up a claim to it. Here the complainant does not deny the right of the corporation, his principal, but merely states that two of the defendants claim as its assignees the money which he holds to its credit. The defendants do not set up a title independent of, and paramount to the principal; but merely derivative. They professedly deduce their title from the same common source, and are in such a predicament that théy may with propriety be required to interplead and adjust their conflicting claims.

It was supposed that the Rail Road Company is an indispensable party to the bill, and that the failure to make the corporation a party is fatal to the decree. The bill is exhibited upon the allegation that the company has no interest in the money in question, but has made a transfer of the same to one or two of the claimants. If this allegation be true, the corporation has no interest in the matter litigated by the defendants, or if it has, the decree as between the defendants cannot prejudice its rights as against the parties to this suit. But be this as it may, the defendants against whom the decree has been rendered, have not been prevented by the omission to make the corporation a party, from litigating the matters which affect them; and if the cause has been properly disposed of by the Chancellor, the decree will not be reversed at the instance of those who are not prejudiced by it; especially when the want of parties is now for the first time objected.

In respect to the form of the decree, the defendants had answered and taken testimony, the cause was ripe for a hearing, and it was competent for the Chancellor to have adjusted the rights of the parties without directing an action, issue, or reference to the master. This has already been shown to be .the correct practice where a case of interpleader is brought to a hearing under such circumstances. Besides, in the present case, it is shown by the record, that the parties agreed that the depositions should determine to whom the money collected on the notes and bills placed in the complainant’s hands should be paid.

The answer of Gibson admits the payment of the bills of the corporation by him to the president of the board of directors “sometime about the month of February, A. D. 1840,” and the assignment by the latter to him of the moneys to be collected by the complainant for the company — denies all fraud, but does not alledge that the act of the president was authorized, either by the charter, a by-law, or special authority. Marsh asserts a right to seven thousand dollars of the moneys assigned to Gibson, declares his belief in the honesty of the transaction between the president and Gibson, and insists it was authorized by “ a general order of the board of directors authorizing its officers to give in exchange, any of its assets at par.”

It is not the appropriate office of the president of the directory of a banking corporation, to use its cash or credits for the purpose of settling the demands of its creditors, and in the absence of an authority to transact such business, an assignment made of the property of the corporation, or an order given by him to pay its money to a third person, will not operate to divest the right of the corporation. This question arose in Hal-lowell and Augusta Bank v. Hamlin, et al. 17 Mass. Rep. 180, where it was held, that the president of the Bank had not ex officio the power to transfer its property or securities, and that his special authority to do it, must be shown by legal evidence. This conclusion is so clearly deducible both from general principles and adjudged cases as to require no argument to prove it. [See Ang. & A. on Cor. 242, to 245, and cases there cited.]

In the present case, neither the charter of the company, its by-laws, or the depositions in the cause, show the semblance of authority in the president to make the assignment to Gibson. The ninth section of the by-laws, which relates more particularly to the powers and duties of the President, and is the only evidence relating to them, which need be noticed, authorizes him to call meetings of the board, &c.; gives him a general superintendance over the officers and affairs of the Bank, &c.; requires him to sign all bills and notes issued by the Bank, recommend measures for its interest, and perform such functions and duties as properly belong to his office, as well as those which may properly be assigned him by the board: Further, he shall have power to affix the corporate seal “ to all conveyances and other necessary instruments, and sign the same on behalf of the corporation, with the approbation of the board of directors.” It is too clear for illustration, that this section does not authorize the president to assign the money or property of the company for the payment of its debts, or any other purpose.

The testimony in the record so far from showing that the assignment to Gibson was authorized or acquiesced in by the directory, proves the reverse. The president it seems did use the assets of the Bank (which were handed to him by its attorney,- when the latter resigned,) for the purpose of paying its debts; but the claims which the complainant held for collection, were not a part of those which the attorney delivered up. Beyond this, it seems the president neither had or pretended to have any control over the notes or other evidences of debt of which the Bank was the proprietor.

The president then, having no right to divest the corporation of the money collected by the complainant, either by a deed of assignment, or an order directing its payment, it follows, that the use of the corporate seal cannot impart validity to the transaction. And it is equally clear, that as the deed to Gibson was inoperative against the Bank, the order of Gibson to Marsh can have no efficacy. However honest and confiding the latter may have been, or ignorant of the facts of the case, he cannot be regarded as a bona fide purchaser without notice from a fraudulent grantee, and enjoy the rights accorded to one thus situated; for the reason that the assignor of Gibson could confer no right.

The assignment to Walsh as a trustee of the Bank was made under a resolution of the board of directors for the payment of the debts of the corporation, and certainly as against his co-defendants entitle him to the money in question.

As it respects the exception to the depositions of several of the witnesses, for the failure to answer the seventh interrogatory proposed’ to them by Marsh, it may be sufficient to say that its pertinency is not discoverable. It calls upon them to state what amount of the bills of the Tombigbee Rail Road Company they held at a definite time, what disposition has been made of them, &c. No direct answer to this question could have affected the assignment to Walsh, or supported that to Gibson.

Other questions are suggested by the answer and proofs, but those already considered are decisive of the case, and we will add nothing more than to declare that the decree of the Court of Chancery is affirmed.