Union Trust Co. v. Stamford Trust Co. , 72 Conn. 86 ( 1899 )

A bill of interpleader, under the old English chancery practice, could only be maintained by a stakeholder having no interest in the disposition of the fund, nor any substantial right of his own to be litigated, and who had incurred no independent liability by his own act or contract to either of those having conflicting claims to it. These rules were somewhat relaxed in the system of equity pleading formerly followed in this State, and it was intimated by the court that it might conduce to the ends of justice to relax them still further, and to do away with the distinction between bills of interpleader and bills in the nature of bills of interpleader.Consociated Presbyterian Society v. Staples, 23 Conn. 544,555. A decisive step in this direction, and one fully in line with the general policy of the Practice Act, was taken by the General Assembly in 1893, by "an Act concerning Bills of Interpleader," which provides that "whenever any person has, or is alleged to have, any money or other property in his hands or possession which is claimed by two or more persons, either he, or any of the persons claiming the same, may bring a complaint in equity, in the nature of a bill of interpleader, to any court which by law has equitable jurisdiction of the parties and amount in controversy, making all persons parties who claim to be entitled to, or interested in, such money or property; and said court shall hear and dispose of all questions which may arise in such case." Public Acts of 1893, p. 222.

Under General Statutes, §§ 887, 888, it would have been proper for the Union Trust Company, in the suit brought against it by Timothy H. Porter, to apply for an order to summon in his sons, the executors of his wife's will, Joanna Krom, and the Stamford Trust Company, since they would necessarily have been prejudiced by a judgment in favor of the plaintiff in that action for the relief which he demanded. But had they thus been made parties, they would not have been bound to relieve the Union Trust Company from the burden of the defense. They could have remained passive spectators of the contest, and left the original defendant to look for reimbursement for its expenditures in the litigation to such decree as might be passed upon the settlement of its account as trustee in other proceedings.

As to controversies of this nature, the Act of 1893 affords a new remedy by enabling a trustee whose title is attacked to throw his outlays in defending it directly on the fund; and in the suit at bar this is part of the relief which is specifically claimed.

The plaintiff has property in its possession which is claimed by two or more persons. It consists of a principal fund, and of certain accumulations of income. The entire fund with all accumulations is claimed by Timothy H. Porter. Part of the accumulated income is claimed by the Stamford Trust Company, and claimed by it in behalf of the other defendants. The latter also insist that the principal of the fund cannot be delivered over to Timothy H. Porter, but must be held by the plaintiff for their benefit. This is a claim to an interest in the fund adverse to that set up by Timothy H. Porter.

Under these circumstances, the plaintiff could clearly, under the statute, have brought an action in the nature of a bill of interpleader against the defendants, and demanded an order that they interplead as to their respective rights in the accumulations of income. These it is its duty to pay over either to the Stamford Trust Company or to Timothy H. Porter. It is a single duty for which there has been a double demand. But the rights of the parties as to the surplus income are substantially identical with such as they may have in the principal fund. If Mr. Porter's children and those claiming under the will of his wife, have none in that, they have none in any of its fruits. If they have rights in the fruits, it is only because they have rights in that which produced them. The Stamford Trust Company, also, in demanding the surplus income must count on the validity of the trust out of which it grows; and such is the frame of the complaint which it has brought.

The statute of 1893 is a remedial one and to be favorably construed. It requires the court to which any complaint founded upon it may be brought, to "hear and dispose of all questions which may arise in such case," and by the provision for making not only all who claim to be "entitled to," but all who claim to be "interested in" the property in question, parties defendant, shows that its purpose is to secure a determination of every right, title or interest that can by possibility be set up.

A question as to the right or title to the principal fund held by the plaintiff must arise in any suit brought by it to settle that to the accumulations of income. It was therefore proper to seek an order of interpleader, upon the complaint in the present action, as respects both these items of property. The only parties having a substantial and beneficial interest in the controversy are Timothy H. Porter on the one side, and his sons and Joanna Krom on the other. The plaintiff is a mere trustee and has a right under the statute to require them, or their representatives, to assume the burden of the litigation. Comstock v. Hadlyme Eccl. Soc., 8 Conn. 254, 262.

It is true that a possible result of the proceeding may be a judgment upholding the validity of the trust and directing the plaintiff to retain the property in its hands and administer it, during the life of Timothy H. Porter, according to the terms of the deed under which it was received; but whether such a judgment could ever have been rendered on a strict bill of interpleader in an English court of chancery, is a question of no importance: the statute of 1893 is the rule of jurisdiction.

It is contended in support of the demurrer, that the complaint was insufficient because the entire rights of the respective parties could not be adjudicated upon it, inasmuch as it raised no question as to the validity of the trust deed to the Stamford Trust Company. This objection overlooks the rules under the Practice Act, by which, in any equitable action, upon a suitable cross-complaint, "the court may determine the ultimate rights of the parties on each side, as against themselves, and grant to the defendant any affirmative relief to which he may be entitled." Practice Book, p. 20, Rule VIII, § 7.

The defendants argue that the plaintiff needs no other information as to its rights than what it can obtain from the record in the case of Porter v. Ritch, to which it was a party.

As that action came on appeal to this court and was made the subject of an opinion in which the effect of the "family agreement" was considered, it was proper for the Superior Court to consider it, in passing upon the demurrer. No trustee can have a right to apply for judicial advice as to any point of law which has been previously adjudicated by the highest tribunal of the State; and the authority of the decision in question was certainly not the less because rendered in a cause in which the parties now before us were also engaged.

The main issue, however, which was there presented as respects the "family agreement" was one of fact, — whether its execution by Timothy H. Porter was induced by fraud and duress. That issue was decided in favor of the defendants, but no question was raised by the plaintiff in his pleadings as to the legal effect of the instrument itself. Porter v. Ritch,70 Conn. 235, 263, 264. In the present complaint also it is alleged that Timothy H. Porter claims that the trust deed, whether originally valid or not, has become invalid and inoperative by reason of occurrences subsequent to its execution. Under these circumstances the Superior Court, in passing upon the demurrer, could not properly consider the judgment and opinion in Porter v. Ritch as conclusive respecting the title to the fund held by the plaintiff under the trust deed. Whether such an effect could be given to it was a matter which could only appear after the record in that cause had been so pleaded in defense as to raise definite issues of fact or law. It follows that the demurrer should have been overruled.

The plaintiff moved, during the argument before this court, for leave to file certain additional reasons of appeal. After an appeal has been perfected, the cause is removed to the appellate court, and it is to that that any motion to amend the appeal must be addressed. When the remedy by motion in error existed, our rules required that assignments of errors filed in this court should be lodged with the clerk at least twelve days before the opening of the return term. Reg. Gen. 9 Conn. 452. While no such regulation has yet been made as to filing reasons of appeal, it is manifest that fairness to the appellee under ordinary circumstances demands that they should be perfected, at latest, before it is time to print the record. The motion now in question was delayed so long that we should have been inclined to deny it, were it not that the objection which it seeks to present is one of a jurisdictional nature. It is, in effect, that while the judgment purports to be a final one, and awards costs against the plaintiff, it is radically defective in that it is not final as between the plaintiff and one of the defendants, and apparently disposes of the cause without having accorded him a hearing. We therefore allowed the motion de bene esse, and, on further consideration, have allowed it unconditionally. An examination, however, of the grounds of appeal thus presented has satisfied us that they are not well taken.

The object of the complaint would be entirely frustrated if the defendants other than Timothy H. Porter were not required to interplead with him. If therefore it was insufficient as to them, it was useless to retain it as against him, and, on the view of the law taken by the Superior Court, the proper course was to dismiss it altogether.

The omission to tax costs either for or against him may fairly be regarded as equivalent to a decision that no such costs ought to be taxed, and can support no exception in his favor.

There is error, the judgment is set aside and the cause remanded with directions to enter a judgment overruling the demurrer.

In this opinion the other judges concurred.