Stevens v. Barringer

13 Wend. 639 | N.Y. Sup. Ct. | 1835

By the Court,

Savage, Ch. J.

The last point taken by the defendant’s counsel would be conclusive in their favor, if it was sustained by the fact; but the testimony of Mr. Harris, the plaintiff’s attorney, is a complete answer to that point. The defendant, Van Alstyne, proposed to pay the principal and one year’s interest, which "Mr. Harris received and endorsed, as so much paid on the note; not as the whole principal and one year’s interest.

It is well settled that interest cannot be recovered where there is no principal due. Interest is not a part of the debt, but something added to it by way of damage for the detention of the debt. It is incident to the debt, and cannot exist without it. So that had the principle been received, as the defendant’s counsel contends, it is clear nothing could "•be recovered for interest. The only real question there is in the case, is whether the notice of the issuing the injunction in the suit of the plaintiff against Jesse Squire and Edward Squire stopped the running of interest until the subsequent agreement to pay it.

In the case of Willing Consequa, Peters’ C. C. R. 321, Mr. Justice Washington says : “ When an attachment is laid in the hands of a third person, interest is stopped until it is dissolved, because the garnishee beingliable to be called upon at any moment to pay the debt, it .is presumed that he had not used it; but when a debtor, who is also a creditor, lays an attachment in his own hands, there is no such necessity existing, and of course no presumption can arise that he had not used the money. If he did use it,it is but just that he should pay interest for it.” The same doctrine is advanced in Fitzgerald Caldwell 2 Dallas, 215, and 2 Yatos, 280. M’Kean, Ch. J., says: “ It is clearly the general rale, that a garnishee is not liable for interest, while he is not restrained from the payment of his debt, by the legal operation of a foreign attachment.” The rule here laid down is certainly consonant to reason and good sense. If a man has money in his hands, which he cannot use, because he is liable to be called upon for it at any time, he certainly should not be compelled to pay interest. Interest is the equivalent which the debtor pays, for the use of the creditor’s money; and if for any reason the money cannot be used, and has not been used, the debtor should not be required to pay interest. Hence Ch. J. Marshall, in Osborn v. U. S. Bank, 9 Wheat. 338, says: “ It does not appear reasonable that a decree which proceeds upon the idea that the injunction of the court was valid, ought to direct interest to be paid on the money which that injunction restrained the defendant from using.” All the cases speak of an injunction against a party to the suit in which the injunction issued. In the process of foreign attachment, the. garnishee becomes a real party to the suit. He has money in *1]‘s hands which belongs to the debtor of the plaintiff, and which the plaintiff is entitled to receive, if he substantiates his demand against the person whose money the garnishee has. *n some respects the condition of the defendants is like that of a garnishee; they were indebted to Edward Squire upon the note which the plaintiff claimed to own. In another respect their situation is not like the garnishee; they were not parties to the suit in chancery, and not under any restraint by reason of it. In Fellows v. Fellows, 4 Johns. Ch. R. 25, the chancellor adopts the language of Lord Eldon in Iveson v. Harris, 7 Ves. 257, where he says : “ I have no conception that it is competent to this court to hold a man bound by injunction, who is not a party in the cause, for the purpose of the cause;” and the chancellor dissolved an injunction against three persons who were not parties to the bill, and who were enjoined from the payment of certain notes given by them to the defendant—a case very like the present. These defendants, therefore, were not bound by the injunction ; they were, in point of fact, not prevented from using the money, for it was admitted, substantially, by one of them, that they were using it, by saying that if they paid it, they should want accommodation from the banks. The case of Prescott v. Parker, 4 Mass. R. 170, proceeds upon the same principle. There Parker was indebted to one Gilson. Several creditors of Gilson attached this debt in the hands of Parker, of whom Prescott was the last. Parker was adjudged the trustee of Gilson, (the same as garnishee in foreign attachments.) If Parker was liable to pay interest on this debt pending the proceedings, then there would be enough to pay the plaintiff, after satisfying the prior attaching creditors. The court said that Parker was obliged, by law, to detain the debt from Gilson, and therefore he cannot be answerable to the attaching creditors for damages for the detention.

The case of Le Braithwait v. Halsey, 4 Halsted, 3, is relied on by the defendant’s counsel. The plaintiffs were obligees in a bond executed by the defendant. They assigned the bond to one Webb, by an assignment, which, upon its face, was absolute and unconditional'; and afterwards filed a bill against the defendant, charging that the assignment to Webb was in trust for their own convenience, and they were suspicious that . . . . he intended to defraud them; an injunction was issued, restraining the defendant from paying, and Webb from receiving the money. The chief justice delivered the opinion of the court. The single question, he says, is whether the defendant is legally chargeable with interest, during the pendency of the injunction. He proceeds to state, that by the act of the plaintiffs, and for their own benefit, the defendant was restrained from paying either principal or interest, during the continuance of the injunction. He could not pay to the plaintiffs, because they had parted with the bond; to Webb he could not pay, because he was forbidden by the chancellor. The retention of the money was therefore not voluntary, but compulsory. For the purposes of the plaintiffs the defendant was compelled to keep it. He was not obliged to pay it into court. The loss of the plaintiffs was the consequence of their own imprudent act, and no interest ought to be charged. These cases like the others, are cases in which the persons in possession of the money were parties to the suit in which the injunction or attachment issued, and were obliged to obey the process, and in that respect are distinguishable from this case. The principle, however, is, that he who compels a person to retain money in his hands, shall not compel that person to pay interest for it; and one reason is, because the money is retained there for the accommodation of the plaintiff. In so far as this reason has force, can it make any difference, as between the parties, whether the defendant keeps the money by compulsion, or upon the request of the plaintiff? I can see none. The defendants in this case were not under compulsion, although they undoubtedly supposed so, and so probably did the plaintiff. The defendants, therefore, acted fairly. If they were not under obligations, they at least complied with the wishes of the plaintiff, in keeping the money and refusing to pay it to the Squires. And as was said in Le Braithwait v. Halsey, the loss of the plaintiff, if not his fault, was his misfortune. The defendant supposed they could not pay to the Squires, because forbidden by the chancellor. In that they were mistaken, but the plaintiff cannot complain of them, as it was for his benefit. They could not safely pay to the plaintiff, because he had not possession of the note, and his title to it was disputed.

There would be no hardship in this case in requiring the desdants to pay ieterest; but the principle is not to be controverted, that a person who is prohibited by an injunction from paying the principal, shall not be compelled to pay interest; and the defendants are within the equity of that principle.

I am of opinion that a new trial should be granted.