Cady v. Potter, 55 Barb. 463

Cady v. Potter

55 Barb. 463 | N.Y. Sup. Ct. | 1869

By the Court, Bockes, J.

There is no force in the objection taken on the trial and again urged on the appeal, that the subject of the controversy was not definite and fixed in amount. The interpleader was to determine the rights of the defendants in fixe'd and definite property, to wit, twenty shares of the capital stock of the bank, to which twenty shares of stock neither the bank nor its officers made any claim whatever. The property in dispute was definite and certain in character, and its exact value *466was wholly immaterial. ' An interpleader will be sustained where it is necessary for the protection of a person from whom several persons claim, legally or equitably the same thing, debt or duty, but who has incurred no independent liability to any of them, and does not himself claim an interest in the matter. It may be suggested in this case, however, that the real value of the shares in dispute was shown by the cashier of the bank to be in fact $750. He testified that the plaintiffs were ready to pay to the party entitled thereto the assets represented by this stock, the proceeds of which was $750. It may be repeated that neither the bank nor its officers claim the stock, or the assets represented by it, or any beneficial interest therein. The plaintiffs’ position is one of entire indifference as regards the subject of controversy between the defendants. The objection that the subject of the interpleader was not definite and fixed, was therefore properly overruled. Hoi* was there error in the refusal to dismiss the complaint on the ground that the bank recognized Colba Reed as the owner of the stock, and paid him dividends thereon. This action of the bank bound them to nothing in the future; nor did it either improve or injure the rights of Colba Reed in regard to the property. It only showed that in some instances the bank officers yielded to the demands and importunities of Reed; but such action was not inconsistent with the averment of indifference between the defendants ; nor did it contain any element of estoppel.

The principal question in the case seems to be that arising on the refusal of the court to admit evidence to show that the' agreement between John Reed and the defendant Potter was, that the stock should be assigned as collateral security for the payment of $1000, and that this agreement was omitted from the written assignment through mistake and inadvertence. It is undoubtedly the well settled rule that a court of equity may reform a written contract upon parol evidence of the mistake; but this can be done only *467in an action between the parties to the contract or their privies. Judge Story says that, in all eases of mistake in written instruments, courts of equity will interfere only as between the original parties, or those claiming under them in privity. The decision of the learned judge was undoubtedly put on the ground that the reformation of the instrument was here sought in a collateral action, by persons not parties to the contract nor claiming under a party thereto in privity. I think the decision correct. Reed was not a party in his own right—nor did he appear or answer as a party in his own right—but simply as one of the executors of the last will and testament of Colby Reed, deceased. The interpleader did not involve him individually, or his personal rights, in any way, but raised a question only between the estate of Colby Reed and the defendant Potter. It was not competent to reform the instrument made between John Reed and Potter in this action, at least until the former was brought in or made a party. It was not sufficient that he was in the record as executor; for as such he only represented the estate of the testator. As is truly said by the respondents’ counsel, the demand for a reformation of the contract comes from neither of the parties to the instrument, or any one claiming under them, in privity, but from the personal representatives of a third party claiming under an illegal prior transfer. The evidence offered was properly excluded.

As regards the cancellation of the transfer of the stock from John Reed to Potter, by the president of the bank, all that need be said is, that it became a question of fact whether or not such cancellation was with his knowledge and consent. The learned judge, on all the evidence, found in Potter’s favor on that question, and as a consequence that the cancellation was unauthorized and of no effect. In this aspect of the case, and with the additional fact, which is uncontroverted, that Potter was a bona fide *468assignee of the stock, with the first valid transfer thereof on the books of the bank, his prior and better right to it was beyond dispute. On this point the decision in N. Y. and N. H. Railroad Co. v. Schuyler (34 N. Y. Rep. 30) is emphatic and conclusive. (See remarks of Davis, J., on page 80.)

[Saratoga General Term, November 1, 1869.

There are some other objections and grounds of error noted in the appellants’ brief and points, but none of them, it is believed, are of sufficient importance to require particular comment.

The. judgment appealed from should be affirmed, with costs of appeal against the appellants.

Rosekrans, James and Bockes, Justices.]