McMurray v. Sisters of Charity of St. Elizabeth

The opinion of the court was delivered by Collins, J. It is at least doubtful if, under the terms of his power of attorney, Father Shepard had any authority to bind the defendant by the verbal acceptance found by the jury, and it is more than doubtful if his subsequent statements were legal evidence to bind the defendant as admissions; but it is not necessary to say more than this on these subjects, for we are unanimously of opinion that, upon the facts above recited, a verdict in favor of the defendant should have been directed upon the ground that the so-called order, acceptance of which was alleged, was limited to a fund the proper distribution of which was no longer chargeable to the defendant. In a vague way the answer in the Chancery suit set up an independent promise of Father Shepard, and the testimony for the plaintiff in the present cause points in the same direction ; but, whatever may have been the character of the claim as originally sued, the present action, begun after the- Chancery decree, is, in terms, limited to an acceptance of the written order—to call it such—of January 31st, 1898. The authority of that instrument was to deduct the sum of $2,360 out of the eighth payment of the contractors; and an acceptance, by the owner, would be no more than a promise to make such deduction and pay the money to McMurray & Brother, instead of to the contractors. Plainly, if the contractors [318] never became entitled to their eighth payment, McMurray & Brother could have no right to any part of it. In the like case of Herter v. Goss & Edsall Co., 28 Vroom 42; affirmed, 30 Id. 268, such was the rule declared,'subject to the qualification that the owner could not, by his own act, defeat the condition on which the order would become available. It is a general rule that if an order be drawn payable out of a specified fund to become due from the drawee to the drawer, acceptance thereof binds the drawee to the extent only that such fund becomes available for the purpose. Ban. Neg. Inst, §§ 513, 517. In their argument in this court the counsel for McMurray & Brother concede that any right of recovery of their clients was limited to the designated fund and to the surplus left after payment of the expense of finishing the work on the default of the contractors; but they insist that, as that surplus was sufficient to pay the amount of the order, the plaintiffs’ case, was established. So it might have been but for the Chancery decree. That adjudication was admitted in evidence, over objection, and, if non-efficacious, should not be considered. We think it not only efficacious but conclusive as a bar to the action. As the claim of McMurray & Brother was limited to the fund on which other persons also made claim, the decree for an interpleader in respect to all claims against that fund was a full discharge of the complainant in the spit. That result of such a decree is well settled wherever equity practice prevails, and nowhere more firmly than in this court. Willison v. Salmon, 18 Stew. Eq. 257; Hall v. Baldwin, Id. 858, 866. McMurray & Brother, in their answer, expressly offered'to submit themselves to such a decree. They asked, however, and the court permitted them to reserve, the right to assert, at law, an alleged general liability of the complainant to them. That was not in accordance with the previous practice of the Court of Chancery, for it had been held, in that court, that the only course open on a contention of personal liability was to prove it, and, because of it, ask a dismissal of the bill [319] as improperly brought. Wakeman v. Kingstand, 1 Dick. Ch. Rep. 113, 117. It was doubtless the reservation that was made from the injunctive part of the decree that moved the learned trial justice to the ruling now under-review, but such a reservation could not destroy the normal effect, on the fund, of the decree as a discharge of the complainant with respect thereto. In interpleader cases the protection of injunction is only needed in limine. After rendition the decree itself affords adequate protection as an adjudicated bar to the claims on the fund of the defendants thereto. The reservation, in terms, was only of a pending suit, but, if we treat it as broad enough to include a suit to be brought after the decree, it is plain that its purpose was to permit the assertion of a general liability. That was irregular, according to the former practice of the court, but the only remedy of the complainant against it would have been by appeal. The- suit could proceed, but when, on the trial, it appeared-—as we now adjudge—that the liability on- the alleged acceptance was not general, but limited to a particular fund, the discharge of that liability effected by the decree presented a complete bar to recovery. With the proceedings subsequent to the decree the complainant had no concern. -Whether McMurray & Brother abandoned their claim to the fund or it was adversely decided is immaterial. They were at liberty to assert, at law, a general liability, and maintain it, if they could; but to the fund their-recourse was only possible through the Court of Chancery. The judgment must be reversed. For affirmance—None. For reversal—The Chancellor, Chief Justice, Van Syckel, Dixon, Collins, Fort, Hendrickson, Pitney, Bogert,. Adams, Vredenburgh, Voori-iees, Vroom. 13.