McGinn v. Interstate National Bank
| Decision Date | 06 April 1914 |
| Citation | 166 S.W. 345,178 Mo.App. 347 |
| Parties | L. P. McGINN, Respondent, v. INTERSTATE NATIONAL BANK, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Jackson Circuit Court.--Hon. O. A. Lucas, Judge.
REVERSED AND REMANDED (with directions).
Reversed and remanded.
David Ritchie, Angevine, Cubbeson & Holt and Ellis & Yale for appellant.
C. W Burch and Beardsley, Schaich & Beardsley for respondent.
This is a suit brought against the defendant bank on a cashier's check for $ 500 issued by defendant, payable to J. B. McGinn and Company and by it endorsed to the plaintiff. The defendant bank filed an answer and bill of interpleader setting up certain facts and praying that plaintiff and one Charles W. Hartung, be required to interplead for the amount due on said check. Plaintiff, claiming that interpleader would not lie, moved for judgment on the pleadings. The court sustained this motion and rendered judgment for plaintiff and defendant has appealed.
The answer praying for an order of interpleader sets up the following facts:
On January 24, 1912, J. B. McGinn endorsed and delivered to the defendant bank a certified check for $ 1985.98 drawn by Wolcott, Beers and Grant on the First National Bank of Kansas City in favor of said J. B. McGinn. Defendant thereupon paid McGinn $ 485.98 in cash, and, as to the remaining $ 1500, at McGinn's request, it issued to him three cashier's checks for $ 500 each payable to the order of J. B. McGinn & Company. Two of said checks were duly paid. The third is the basis of the present suit brought by plaintiff who claims to hold said check as endorsee of J. B. McGinn. The defendant further set up that one Charles W. Hartung claims that the certified check for $ 1985.98 above referred to was the proceeds of mules owned by him and sold by McGinn to Wolcott Beers & Grant, and that said certified check belonged to and was the property of said Hartung; that the $ 485.98 and the three cashier's checks for $ 500 each issued by defendant, one of which is the check in suit, were the proceeds of said certified check, and all were the property of said Hartung and were received by said McGinn in trust for his benefit, and said McGinn had no right or authority to endorse or transfer the same; that L. P. McGinn is the wife of said J. B. McGinn and that the endorsement to her of said check was made by J. B. McGinn as J. B. McGinn & Co., without consideration, and defendant further set up that said Hartung has notified defendant that he is the owner of the cashier's check on which this suit is brought, and that he will hold defendant for the amount thereof; that said Hartung further claims and has notified defendant not to pay the money called for in said check to J. B. McGinn nor to L. P. McGinn, that she is not the owner thereof and paid no consideration therefor.
Defendant further set up that it did not know whether said claims were true or not, nor whether Hartung or L. P. McGinn or J. B. McGinn is the owner of said cashier's check, on which the suit is brought, or the proceeds thereof; that it admits it executed the said check and owes the amount thereof to the true owner and is willing to pay same but does not know to whom payment should be made, wherefore it prays that it be allowed to pay said cashier's check into court and that said Hartung and L. P. McGinn be required to interplead, etc.
The sole question for our determination is, should defendant's prayer for an interpleader be granted? The plaintiff insists that interpleader will not lie for two reasons: 1. Because there is no privity or relation existing between Hartung and plaintiff in their opposing claims to the property. 2. Because the bank by issuing the cashier's check to J. B. McGinn has incurred an independent personal liability to one of the claimants.
The right to the equitable remedy of interpleader depends, according to early equity jurisprudence at least, upon four essential elements. As applied to this case they may be stated thus: 1. The same thing, debt or duty must be claimed by both parties who are asked to be made to interplead. 2. Their adverse claims must be dependent or derived from a common source. 3. The defendant (who is asking the interpleader here) must not claim any interest in the subject-matter. 4. The defendant must have incurred no independent liability to either of the claimants. These four essential elements are laid down by Mr. Pomeroy in his Equity Jurisprudence Vol. 4 (3 Ed.), Sec. 1322, and by many decisions.
Of the above named essential elements, the first, third and fourth are inherent in the nature of the remedy and are necessary to its proper application and use. The second, which requires that there be privity of estate, title, or contract between the claimants, or that their claims must be derived from a common source, is not so inherently necessary to the proper administration of the remedy, and there has been a disposition to relax the rigidity of the rule in this regard, both in England and America, in later times. In 11 Am. and Eng. Ency. of Pl. and Pr. 449, 451, it is said that some authorities are exacting in the requirement that, in the absence of privity, the suit cannot be maintained, but that doctrine seems to have been abrogated in England partly by judicial decisions, and in the United States, according to high authority, the rule and its validity has been regarded as doubtful in ordinary actions of interpleader. See the remarks made in the case of Wells, etc. v. Miner, 25 F. 533, 538 and in the case of Crane v. McDonald, 118 N.Y. 648, 656 where it is said "while the early authorities were exacting on this subject, many of the later cases have been less rigid, and some have ignored it altogether." And Mr. Pomeroy in a note to section 1324 of his 4th Volume on Equity Jurisprudence, in speaking of the fact that the remedy is limited to those cases where there is privity of title between the claimants, says
It is not necessary, however, for us to say whether the rule as to privity has been relaxed, nor are we required to base our action in this case upon any relaxation of the rule. It will be noticed that even in the statements of the law upholding the rule in all its strictness, it is only in cases where there is "no privity" between the claimants, and that only when the title one asserts is "wholly paramount" to, and "independent" of the other that the remedy is denied. And an examination of the cases denying the right of interpleader on this ground will disclose that what is meant is that the conflicting titles and claims are so wholly independent of, unrelated and antagonistic to, each other as to destroy, contradict, or defeat the right by which the one asking for the interpleader holds possession of the thing in controversy. For example, a tenant owing rent to his landlord cannot maintain an interpleader suit against his landlord and a stranger who claims under a title antagonistic and paramount to that of the lessor. That would, in effect, be a denial or a questioning of his landlord's title,...
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