Marvin v. Ellwood , 11 Paige Ch. 365 ( 1844 )

The Chancellor.

I agree with the vice chancellor, that there is such evidence' of collusive conduct, on the part of the complainant in this suit, to aid the claim of the defendant Titus, at the expense of the interest of his own client, that if no other objection existed, this bill of interpleader ought not to be sustained. A party who comes into this court as a complainant, in a simple bill of interpleader, must not have lent himself in any way to further the claim of either party to the fund in controversy, or to aid one in obtaining the possession thereof to the exclusion of the other. A person who is in possession of a fund, which is claimed by two different parties standing in the same relation to him in respect to such fund, may indeed receive an indemnity which is tendered to him by either, and may pay over the fund to the person giving such indemnity. But upon doing so, his right to file a bill of interpleader is of course determined. And a simultaneous offer to both claimants, to pay over the fund to either who will fully indemnify him, and save the expense of filing an interpleading bill, would not be considered collusion in case both neglected or refused to give him such indemnity. If both consented to give such indemnity, he could safely receive it from either. For the giving of the indemnity would relieve him from the necessity of, filing a bill of interpleader, and the question of collusion would never arise. Here, it is impossible, from the whole proceedings, and testimony in the cause, to resist the conclusion that the complainant was anxious to aid the defendant Titus in obtaining the proceeds of the judgment in controversy ; after the demand made upon him at Buffalo, by the agent of Ellwood. ,

I agree with the vice chancellor also, in thinking that the relation which an attorney bears to his client, will not permit him to file an ordinary bill of interpleader, upon every claim made to the fund collected by him for his client. It is the duty of an attorney who collects money, for a client, to pay it over to such client whenever he can do it with safety. Even where there is a doubt whether the securities upon which the money was collected did in fact belong to his client, all that he has any right to ask is an indemnity from his client. And if he is not satisfied with the responsibility of his client, it is his duty to tell him so, and to offer to pay him the money, if his client is willing to give such indemnity. Whether, under any circumstances, this court 'would sustain a bill by an attorney, against his client and a stranger, where the client was wholly irresponsible and refused to indemnify the attorney against the claim of a third person which, was apparently well founded, I am not prepared to decide. To , sustain such a bill, the complainant must at least show that he has good reason to believe that the adverse claim is well founded, and that- there is no possibility of protecting him-' self from loss by any other means than by the interference of this court. That, however, is not this case. Here there was no offer by the complainant to pay over the money to his client upon being indemnified against the claim of Titus. On the contrary, the attorney-studiously avoided any intimation to his client that he would pay him his money upon any terms.

I speak of Ellwood as the client of Marvin, because the suit against the sheriff was prosecuted for his benefit, after the notice of the assignment by Asa Farr, the original plaintiff in the suit. By that assignment, and the notice thereof which was given to the complainant, the relation of attorney and client between Marvin and Farr, ceased to exist; and the latter was not liable t.o the attorney for the costs of the subsequent proceedings. The subsequent prosecution of the suit, and the receiving the money from the defendant, upon the judgment subsequently recovered, was in the character of attorney for the assignee. A different question might perhaps have arisen, if Asa Farr had attempted to repudiate the assignment as having been obtained by fraud, or as being invalid for any other cause. In that case, the attorney, if he had not recognized either as his client subsequently to the alleged assignment, might perhaps have been in a situation to file a bill of interpleader; as standing in the same privity to each — to Farr the nominal plaintiff, by virtue of the original retainer — and to Ellwood by the alleged assignment and transfer of the subject matter of the suit. I am inclined to think, however, that in such a case the court in which the suit was pending at the time of the alleged assignment, would have had the power, if both the parties who claimed to be the real plaintiff were within its jurisdiction, to settle the matter between them, so far as was necessary to protect the attorney ; by directing the money to be brought into court, and by restraining the real as well as the nominal plaintiff from molesting him on account thereof. To that extent, I presume the supreme court has jurisdiction over its suitors. But it probably had no such power over the defendant Titus, who was not a party, in fact or in interest, in the suit in that court.

A bailee or agent who has received property, as such, is at all times at liberty to show that his bailor or principal has parted with his interest in the property subsequent to the bailment, or to the delivery to the agent. But such bailee or agent cannot, at law, dispute the original title of the person from whom he received the property. And Mr. Justice Story, after an examination of the cases upon the subject of interpleader, arrives at the conclusion that the same principle applies to this court; and that a bill of interpleader cannot be maintained by the bailee, or agent, to settle the conflicting claims of the bailor, or principal, and a stranger who claims the property by a distinct and independent title. (2 Story's Eq. 122, §§ 816, 817.) Although some of the decisions cannot well be reconciled with this principle, I think he is right so far as regards a strict bill of interpleader. And if so, upon the same principle, an attorney cannot sustain a bill of interpleader, to settle the -claim to money which he has collected for his client, where a mere stranger claims the money, upon the ground that the security upon which the money was collected was originally obtained by the client wrongfully.

I am satisfied, therefore, that this bill was improperly filed, and that the decree of the vice chancellor, directing it to be dismissed, with costs as to Ellwood, is not erroneous.

The decree must be affirmed with costs as to the respondent Ellwood; who alone asks for costs upon this appeal.