First Nat. Bank of Portland v. Reynolds

• Court: Maine Supreme Court
• Writing for the Court: PATTANGALL, J.
• Citation: First Nat. Bank of Portland v. Reynolds, 127 Me. 340, 143 A. 266 (Me. 1928)
• Decision Date: 08 October 1928
• Parties: FIRST NAT. BANK OF PORTLAND v. REYNOLDS et al.

143 A. 266

FIRST NAT. BANK OF PORTLAND

v. REYNOLDS et al.

Supreme Judicial Court of Maine.

Oct. 8, 1928.

Exceptions from Supreme Judicial Court, Cumberland County, in Equity.

Bill of interpleader by the First National Bank of Portland against Edward C. Reynolds and George M. Stanwood, administrators of the estate of John W. Minott, and Frank L. Minott, executor of the will of Eliza D. Minott. A final decree was entered, ordering the plaintiff to turn over the fund to the administrators, and the executor brings exceptions to the overruling of his demurrer to the bill, and appeals from the final decree. Exceptions overruled, appeal dismissed, and decree affirmed.

Argued before WILSON, C. J., and PHILBROOK, DUNN, DEASY, BARNES, and PATTANGALL, JJ.

Verrill, Hale, Booth & Ives, of Portland, for plaintiff.

Robinson & Richardson, of Portland, for defendant Edward C. Reynolds.

Joseph E. F. Connolly and Clinton C. Palmer, both of Portland, for defendant Frank L. Minott.

PATTANGALL, J. On exceptions and appeal. Bill of interpleader. Defendant Frank L. Minott, hereinafter referred to as executor, demurred to plaintiffs bill. Demurrer was overruled, bill sustained, and exceptions taken.

The subject-matter of the suit was a fund deposited with plaintiff by executor's testate, who was, in her lifetime, executrix of the will of John W. Minott, of whose estate defendants Reynolds and Stanwood, hereinafter referred to as administrators, are now administrators d. b. n. c. t. a. Hearing was had on the merits, and final decree entered, ordering plaintiff to turn over the fund to administrators. Executor appealed and the matter comes to this court: First, on exceptions to the overruling of the demurrer; and, second, if exceptions be not sustained, on appeal from the final decree.

The bill recites that Eliza D. Minott, widow of John W. Minott, who died June 23, 1908, was appointed executrix of John W. Minott's will on July 21, 1908, and that under the terms of the will Mrs. Minott was given a life interest in the residue of the estate, with power to use the principal, if the income was insufficient for her reasonable support and maintenance, the remainder, after her decease, being given to various persons.

Mrs. Minott died May 19, 1910, and defendants Reynolds and Stanwood became administrators d. b. n. c. t. a. of the estate of John W. Minott. Defendant Frank L. Minott is executor of her will.

On July 15, 1908, Mrs. Minott deposited with plaintiff $455.60, making the deposit in the name of "Eliza D. Minott, executrix." At various times thereafter, additions to and withdrawals from this deposit were made, and interest accumulated upon the balance, so that, at the time the bill was brought, it amounted to $1,534.32. Plaintiff had no knowledge as to the source of any of the deposits.

Defendants Reynolds and Stanwood, as administrators, notified plaintiff that they claimed the deposit as a part of the estate of John W. Minott.

Frank L. Minott, as executor, claimed the deposit as a part of the estate of Eliza D. Minott, and threatened to bring suit unless it was paid over to him at once.

Plaintiff asserted that it could not safely pay the money to either, and offered to bring the amount into court for the benefit of the rightful claimant, and to pay as directed by the court.

Executor, in support of his exceptions, urges that the remedy of interpleader requires four elements: (1) The same thing, debt, or duty must be claimed by all the parties against whom relief is demanded; (2) all of their adverse titles or claims must be dependent or derived from a common source; (3) the person asking the relief must not have nor claim any interest in the subject-matter; (4) plaintiff must have incurred no independent liability to either of the claimants citing 4 Pomeroy's Equity Jurisprudence (3d Ed.) § 1322; 1 Words and Phrases, Second Series, 445; Whitehouse, Eq. PI. & Pr. 237; 2 Story, Com. Eq. PI. 124; 15 R C. L. 224. He claims that the allegations of the bill do not state a case which embraces the second and fourth of these essential elements, and that, therefore, the court below erred in overruling his demurrer.

His contention is that the original deposit of July 15, 1908, and the subsequent deposits, unidentified as to their source, import a contract on the part of the plaintiff bank to recognize the title of the depositor to the fund; that Eliza D. Minott was the depositor, the word "executrix" being mere descriptio personaÆ, and that the relation of debtor and creditor exists between the bank and the legal representatives of Eliza D. Minott, so that plaintiff has incurred an independent liability to one claimant; and, further, that the administrators' claim to the fund, being based upon the theory that it is a part of the estate of John W. Minott, while the executor's claim is based upon the theory that the fund was the personal property of Mrs. Minott, there is no privity between the two claimants, but their titles are independent, not derived from a common source, and each asserted as wholly paramount to the other.

Furthermore, executor insists that the bill will not lie because of the provisions of section 5, c. 150, P. L. 1923, which he construes as providing an adequate and exclusive remedy in such a case as this; the statute apparently having been passed to relieve banks from liability to irresponsible claimants and to protect legitimate claimants from unnecessary litigation.

Defendant's objection that the bill must be dismissed, because plaintiff does not come within the rule that, in order to be entitled to the relief prayed for, it must have incurred no independent liability to either defendant, cannot be sustained. He bases this conclusion on the premise that, as he is the legal representative of Mrs. Minott, and Mrs. Minott was the depositor of the fund in question, the relation of debtor and creditor exists between the bank and himself, and that this contractual relation, thus established, is sufficient to warrant the court to refuse to entertain the bill This conclusion is not justified. The mere fact that a contractual relation exists between plaintiff and one of the defendants, under which the fund is required to be paid to such claimant, does not of itself defeat the right of interpleader. Love v. Hartford Life Ins. Co., 153 Mo. App. 144, 132 S. W. 335. If such were the law, it would be difficult to conceive of any set of facts which would enable a bank, a trustee, or other custodian of funds, or even a bailee, to maintain interpleader. The obligation referred to in the rule must be independent of the title or right of possession of the fund or property in question.

"A bank may be entitled to relief by bill of interpleader against separate and adversary parties who claim title to moneys therein deposited." City Bank of New York v. Skelton et al., Fed. Cas. No. 2,739. The independent obligation covered by the rule must be such that the litigation between the defendants will not determine it, in order to warrant the dismissal of the bill. Byers v. Sansom-Thayer Commission Co., 111 Ill. App. 580. The instant case does not offend the rule in this respect.

Nor can we agree that the demurrer should have been sustained on the ground that section 5, c. 150, P. L. 1923, provides a complete, adequate, and exclusive method by which disputes concerning the title to bank deposits may be determined. That statute was intended to supplement, not to supersede, interpleader. It may be applied where interpleader will not lie. It is not unlikely that it might be properly invoked in certain cases in which interpleader would be an appropriate remedy. It is permissive. It provides one means by which the title to a bank deposit may be, under some circumstances, litigated. There are still other methods to reach that end. One of them is pointed out in Hatch v. Caine, 86 Me. 282, 29 A. 1076. But the remedy of interpleader is still an appropriate remedy, where interpleader will lie, notwithstanding the adoption of the statute in question.

The executor, however, raises a further and more serious objection to the maintenance of the bill. He says that it must be dismissed because the adverse claims set up by the defendants are not dependent, nor derived from a common source; that there is no privity between the claimants; that each asserts a title wholly paramount to the other; and that in such a case plaintiff is not entitled to equitable relief, but must leave the parties to their legal remedies.

Paragraph 7 of the bill recites that the administrators claim the deposit "as a part of the estate of the said John W. Minott, which has not yet been administered." Paragraph 8 alleges that the executor claims:

That "all cash, checks, coupons, or other paper deposited to the credit of said account were the property of Eliza D. Minott, and that the balance standing to the credit of said account was at the time of the decease of said Eliza D. Minott, and now is, the property of her estate."

Plaintiff argues that the rule relied upon by the executor has been, of late, somewhat relaxed, and that interpleader has been held an appropriate remedy in certain cases, where the facts were such that, under a rigorous application of the well-established principle here invoked, interpleader would not lie.

The argument is not without support. Professor Pomeroy, discussing this feature of interpleader, said (4 Pomeroy's Eq. Jur. [4th Ed.] § 3468):

"It is a manifest imperfection of equity jurisdiction that it should be so limited. A person may be and is exposed to danger, vexation and loss from conflicting independent claims to the same thing as well as from claims that are dependent and there is certainly nothing in the nature of the remedy which need prevent it from being extended to both classes of demands."

And in the notes following the section he adds:

"It is not surprising therefore that courts have sometimes ignored the doctrine in...