Holland Trust Co. v. . Sutherland

69 N.E. 647, 177 N.Y. 327, 15 Bedell 327, 1904 N.Y. LEXIS 936

• Court: New York Court of Appeals
• Decided: January 29, 1904
• Status: Published

Opinions

Bartlett, J.

It is, of course, clear that interpleader is not the appropriate remedy. If the action of interpleader is brought under the Code or the old equity practice it is essential that the plaintiff should be a mere stakeholder, and that the parties whose claims are conflicting for the funds in his hands should be parties defendant. That is not this case. Hor do I think this case falls within any of the cases cited as authorities against the maintenance of this action. It is well settled that where the trust instrument is plain in its terms and the duty of the trustee clear, he is not justified in coming into a court of equity asking for instructions. It is equally clear that where he is called upon by the nature of his trust to exercise discretionary power the court will not instruct him in such an emergency.

In this case the Delaware Water Company, an Ohio corporation, made a special deposit with the plaintiff trust company of a certain sum of money to pay coupons maturing a few days subsequent to said payment. The effect of that transaction was to make the plaintiff trust company a trustee for the coupon holders whose claims were to be paid out of the fund so deposited. Before the coupons were due, a creditor of the Delaware Water Company levied an attachment on said moneys as the property of a non-resident defendant.

The legal effect of that special deposit not only created the plaintiff trust company a trustee for the coupon holders, huí it changed the title to said moneys from the water .company to the trust- company, in whose possession it constituted a trust fund for the benefit of coupon holders as cestuis que trust.

The trust company adopts this view of the law, and in its complaint expressed its desire to pay these coupon holders the moneys in question, and asks a court of equity for instruction in the premises, based on special reasons. The complaint contains this allegation :

“ Twelfth. That said coupon holders are very numerous and are unknown to plaintiff; many of them, as plaintiff is informed and believes, residents of some of the Hew England states, and their coupons • have been deposited for collection with banks and banking houses beyond the limits of the State of Hew York.”

This feature of the case distinguishes it from any of the cases to which we have been referred in either of the briefs.

It is stated in the dissenting opinion that if the coupon holders were too numerous to be joined as defendants certain of them should have been selected as representing the class. If this practice exists, where it is feasible, I am of opinion that it would be quite impossible under the circumstances set forth in the complaint. I see no reason why the plaintiff trust company should be compelled in the action between a resident of the state of Hew York and this Ohio corporation to litigate either the validity of the plaintiff’s attachment or of the execution which may follow, if the action results in final judgment. That litigation might extend over a period of several years and meanwhile the coupon holders would be deprived of their moneys. It would seem to be a very harsh rule that the trust company should be compelled to pay out this money on the legal advice of its counsel, as it is entitled to a judgment of the court that will protect it in making such payment.

We have here a case where the trustee comes into court as the representative of his cestuis que trust, residents of different states, and many of them unknown, and brings before the court as a defendant the only person claiming this fund in hostility to the trust.

I am of the opinion that the action is well brought, and that the judgment appealed from should be reversed, and that of Special Term affirmed, with costs.