Williamsburgh Sav. Bank v. Bernstein

• Decision Date: 18 January 1938
• Parties: WILLIAMSBURGH SAV. BANK v. BERNSTEIN et al.
• Court: New York Court of Appeals Court of Appeals

277 N.Y. 11

12 N.E.2d 551

WILLIAMSBURGH SAV. BANK

v.BERNSTEIN et al.

Court of Appeals of New York.

Jan. 18, 1938.

Action of interpleader by the Williamsburgh Savings Bank against Dora Bernstein and Fannie Nathan, as administratrix of the goods, chattels, and credits which were of Michael Nathan, deceased, wherein plaintiff seeks permission to pay into court a certain deposit which it held under the name of Michael Nathan in trust for Dora Bernstein. From an order of the Appellate Division, 252 App.Div. 772, 298 N.Y.S. 950, affirming an order of the Special Term directing the bank to pay into court the amount of the deposit and discharging the bank from further liability, Dora Bernstein appeals.

Orders reversed. Appeal from Supreme Court, Appellate Division, Second department.

Benjamin Koenig and Alexander Berman, both of New York City, for appellant.

S. M. Meeker, D. E. Meeker, and Walter M. Palmer, all of Brooklyn, for respondent.

RIPPEY, Judge.

Michael Nathan died September 6, 1936, having a deposit with the Williamsburgh Savings Bank in account No. 764166 under the name of ‘Michael Nathan in Trust for Dora Bernstein.'

On October 27, 1936, Fannie Nathan commenced an action in the Supreme Court of Kings county in which she made the bank and Dora Bernstein parties defendant. She alleged that Michael Nathan had, in his lifetime, made a gift to her of the said account and deposit and demanded judgment for the amount thereof. The bank answered and put in issue the allegations of the complaint, disclaimed any beneficial interest in the sum on deposit other than to see that it was paid to the proper party, and offered ‘to pay the balance of said account into the court or retain the said sum on deposit’ pending the determination of the rights of the claimants thereto. Dora Bernstein answered denying the allegations in the complaint of a gift of the account to Fannie Nathan, and set up a counterclaim in which she asserted title thereto and demanded judgment against the bank for the amount which stood to the credit of the account. After trial and submission of the issues, the jury made a special finding that the account belonged to Dora Bernstein and that there was no gift thereof to Fannie Nathan. The court then directed a general verdict dismissing the complaint and for the amount of the deposit with accrued interest to Dora Bernstein. Thereupon judgment for the amount of such deposit was duly entered on February 26, 1937, in favor of Dora Bernstein and against the bank. From that judgment no appeal has been taken, and the time to appeal has expired.

On March 26, 1937, Fannie Nathan Commenced another action, this time in the capacity of ancillary administratrix of the estate of Michael Nathan, deceased, in the Supreme Court of New York county, in which she made the bank and Dora Bernstein parties defendant. In that case she alleged that prior to his death Michael Nathan revoked the trust in favor of Dora Bernstein implied by the form of the account, and demanded payment of such account to her as such administratrix. It is unnecessary to refer further to the contents of the pleadings except to say that again the bank asserted lack of beneficial interest and offered to pay the fund into court.

The third and present action was brought by the bank under section 285 of the Civil Practice Act, in which it made Dora Bernstein and Fannie Nathan, in her representative capacity, parties defendant. The bank demanded judgment of interpleader and that it be permitted to pay the amount of the deposit into court and that, upon such payment, it be discharged from any further liability to any of the parties to the last above-mentioned action. It alleged that it had no beneficial interest in the account and deposit except to pay the deposit to the person entitled thereto, that it had no means of ascertaining the rights of the claimants in the action brought by Fannie Nathan as administratrix, that it was in doubt as to the merits of the claims of the respective claimants, and could not pay it to either without hazard to itself. Proceeding as permitted by the provisions of section 286 of the Civil Practice Act, it thereupon moved for an order for the relief demanded in the complaint. Such relief was granted by an order dated July 9, 1937, wherein it was provided, among other things, that the defendant Dora Bernstein be restrained from proceeding to enforce against the plaintiff or any depository of plaintiff's funds the certain judgment and order made thereon in the action in which Fannie Nathan was plaintiff and the plaintiff bank and the defendant Bernstein defendants, and that Fannie Nathan, in her representative capacity, be restrained from proceeding with the prosecution of the action then pending in which plaintiff and said Dora Bernstein were parties defendant. On appeal, that order has been affirmed.

The cause of action which Dora Bernstein had on her counterclaim in the first above-mentioned action arose out of the contract of the bank under which it agreed to pay the amount of the deposit to the one entitled thereto. That cause of action, embracing the claim to the deposit, ripened into and was merged in the judgment...