City Bank of New-York v. Skelton

BETTS, District Judge. Two questions have been discussed on this motion: (:i.) Whether the facts establish a case for a decree of interpleader. (2.) Whether this court has jurisdiction to make such a decree. The strong objection taken to the right of interpleader in this case is, that the plaintiffs received the deposit as bailees of Yonge, and became absolutely bound to him to return it at his call; and that the qualification in the deposit, that the written concurrence of Burritt should be necessary to a withdrawal of the deposit, operated only for a limited period, and ceased to have any effect after the 1st of September, 1844. Eminent judges speak of the doctrines respecting bills of interpleader as perplexing and not well defined. 2 Story, Eq. Jur. § 814, and notes. The fundamental principle upon which relief by bill of interpleader is founded is, that two or more persons are claiming the samé thing by different or separate interests, of a person who does not claim any interest therein himself, and does not know to whom he ought of right to surrender it, and that one or both have brought, or threaten to bring, actions against him. In such case, he may appeal to a court of equity to protect him from the vexation attending such suits, and also from being compelled to respond to several parties for the same thing. Id. § 806; 2 Kent, Comm. 567, 568; Jeremy, Eq. Jur. 347; Eden, Inj. (1st Am. Ed.) 242; Crawshay v. Thornton, 2 Mylne & C. 1; Atkinson v. Manks, 1 Cow. 691. The defendant Yonge insists that the rule does not apply to bailees or to bankers, but that they are bound by the general principles of law to restore to the bailor the deposit made with them. 2 Story, Eq. Jur. §§ S16, 817; Story, Bailm. § 110. But the cases which seemingly support that objection are counterbalanced by a weightier array of authorities, both English and American, to the contrary. 2 Kent, Comm. 566-568; Atkinson v. Manks, 1 Cow. 691; Schuyler v. Pelissier, 3 Edw. Ch. 191; Birch v. Corbin, 1 Cox, Ch. Cas. 144; Jeremy, Eq. Jur. 348. The rule has been directly sanctioned in the cases of funds deposit in a bank (Birch v. Corbin, 1 Cox, Ch. Cas. 144), and with a stakeholder (Id. 145); and it has been applied in behalf of a captain of a vessel, against whom there were adverse claims upon bills of lading (Lowe v. Richardson, 3 Madd. 277). Each of these cases is strong in analogy to the present one, and I should feel no difficulty in declaring, upon the general principles of equity jurisprudence, that a bank may be entitled to relief by bill of interpleader against separate and adversary parties who claim title .to moneys therein deposited. . But there is an impediment to the enforcement of that principle by this court in the case now before it. One of the suits pending, against which the plaintiffs ask relief, is prosecuted in the state court of chancery, and this court is clothed with no power to restrain or interfere with a suit so situated. A court of the United States, in executing [749] a jurisdiction vested in it, may undoubtedly act upon parties wbo are suitors in a state court in relation to the same subject matter, so far at least as to compel their submission to such judgment as the United States court may render in' a case of which it has cognizance. But, even then, it cannot interdict tiheir prosecuting their suit in the state court, much less control any action pending in such court. It is understood that the state courts uniformly adopt the same doctrine in respect to courts of the United States. Here it is to be assumed that the state court is competently possessed of the case before it, and a decree of this court compelling the plaintiffs and one of the defendants in that court to interplead here, would be an exercise of that authority and control over the state court itself which can only be allowed to a tribunal of general jurisdiction under the same government. NOTE [from original report]. Order. The bill in this case having been read, and counsel for the respective parties having been heard, and the premises being fully considered, and it appearing to the court that the plaintiffs hold the assets and funds in the bill mentioned for the true owner, without having or claiming any right or interest therein, and that they are ready and willing to deliver the same over to whosoever may have right thereto; and it appearing to the court that the defendants Elizabeth Skelton and Mary Ann Frazer have heretofore filed their bill in the court of chancery of the state of New-York against the plaintiffs and the defendant Philip R. Yonge, alleging the full right and title to the said funds and assets to be vested in and to belong to the said Skelton and Fra-zer; and it appearing to the court that the plaintiffs and the said Yonge entered their respective appearances in said suit in said court of chancery, and that said suit is still pending and undetermined; and it further appearing to the court that after such suit was instituted the said Yonge commenced in this court, in his own name, two separate actions at law against the plaintiffs, one in trover, in which he seeks to recover the value of the said funds and assets, and the other in assumpsit, in which damages are demanded for the detention of the said assets, and that the plaintiffs have appeared in the said actions, and the same are yet pending and undetermined in this court: It is, therefore, considered by the court that the plaintiffs are entitled, to relief in this court in the premises; but, inasmuch as the suit instituted against the plaintiffs by the said Skelton and Frazer is prosecuted in the court of chancery of the state of New-York. and the proceedings before that tribunal are not within the cognizance of this court, or subject to its control," it is considered by the court, that so much of the prayer of the said bill as seeks an interpleader in the premises, and prays the same to be decreed by this court against the above named defendants, ought not to be granted, and it is, therefore, ordered, that the same be denied. It is further ordered, that an injunction issue, according to the prayer of the bill, against the-.said Yonge, restraining him from further prosecuting his said actions at law, or either of them, instituted in this court against the plaintiffs, until the final decision of the said suit pending in the court of chancery of the state of New-York, unless the said Yonge and Skel-ton and Frazer shall, within twenty days from the date of this order, file their stipulation in writing in this court, electing to interplead between themselves in this court, in respect to the subject matter aforesaid; and, in case of such interpleader between the said parties, it is ordered that the said plaintiffs thereupon pay into this court the funds and assets aforesaid, first deducting therefrom such their costs and expenses as shall be allowed them by the court. [NOTE. For denial of a motion to dissolve the injunction granted by the foregoing order, see Case No. 2,740.] But the plaintiffs have made out a case of the most stringent equity against allowing Yonge to proceed in his suits in this court against them, while the suit brought by Skelton and Frazer is pending in the state court for .the same subject-matter, and to which he is a party defendant. The conflicting rights of these two prosecuting parties are directly at issue in the suit in the state court, and that forum has full capacity to decide the right between them. There the controversy should be continued so far as these plaintiffs are to be affected, and, with the determination of that case, they should legally know to whom they can rightfully- deliver over the funds in their possession. I think the cases of Mallow v. Hinde, 12 Wheat. [25 U. S.] 103, and Dunn v. Clarke, 8 Pet. [33 U. S.] 1, furnish a guide to the order proper to be made in this case. The former was a case similarly circumstanced to the present one, and is an authority that this court may, in its discretion, restrain the prosecution of the suits brought by Yonge, until he has had an opportunity to settle his controversy with Skelton and Frazer in the suit in the state court of chancery. I shall accordingly order an injunction to that effect, giving to the parties the option to consent, by stipulation, to inter-plead in this court on the subject-matter, and thus place it wholly under the control of this court