Opinion
04-01-1896
VAN WINKLE v. OWEN.
F. W. Ward, for complainant. J. Frank Fort and George Biller, for defendant.
(Syllabus by the Court)
Bill by John S. Van Winkle against John Owen, administrator. Heard on demurrer. Overruled.
The case as made by the bill and admitted by the demurrer is as follows: Richard Owen recovered judgment against the complainant in the city court of New York City on the 13th of June, 1891, for $1,735.28 damages, and $182.07 costs. Richard died intestate in 1892, and in January, 1893, letters of administration upon his estate were granted by the surrogate's court of New York to the defendant John Owen. In 1895, John Owen, as administrator, commenced an action founded on that judgment against complainant, in the circuit court of the county of Hudson; and judgment by default was rendered therein on the 3d of April, 1895, for $2,355.39, being the amount of debt costs, and interest due on the New York judgment, and $31.47 costs. The attorney of record and counsel for Richard Owen in the suit in the court of New York was one Henry Wehle, who died after the recovery of the judgment, testate of a will by which the defendants Charles and Alexander Wehle and Gustave Behr were executors; and they, as such, after the entry of the judgment in the Hudson circuit court, notified complainant that they claimed a lien upon the judgment entered in the New York court, and on any moneys to be paid thereon for fees, costs, and expenses due to Henry Wehle, the attorney, in his lifetime, for his services, fees, costs, and expenses in and about the prosecution and recovery of the said judgment, amounting to $1, 182.07, and the further sum of $1,890.87 as the balance due from Richard Owen to Henry Wehle for his services rendered in other suits and matters; and that, by an agreement between Richard Owen and Henry Wehle, Richard Owen agreed that Wehle should have and hold said judgment rendered against the complainant as security for his said debt, and that any moneys derived therefrom should be applied to the payment of all the moneys due from Richard Owen to Wehle. In point of fact, Wehle did conduct the suit which resulted in the judgment in favor of Richard Owen against the complainant, and, by virtue of the laws of the state of New York, Wehle had a lien upon that judgment, or any moneys to be derived therefrom, for the payment of the sum of $1,182.07, and he also had a lien for the further sum of $1,890.87, by virtue of the contract made between Henry Wehle and Richard Owen above set forth; and those moneys are still due from the estate of Richard Owen to the estate of Wehle. The defendant Smith claims that the executors of Wehle have assigned to him their debt against Owen, and their lien upon the judgment. The judgment in the city court of New York remains unsatisfied of record. Richard Owen, in his lifetime, obtained and took into his possession certain deeds, notes, and other papers not enumerated, belonging to thecomplainant, and evidences of indebtedness due and owing to complainant, and other papers of value belonging to complainant; and Richard Owen, in his lifetime, or the defendant Owen, his administrator, since his death, collected and realized out of the documents so taken possession of a part (but what part or how much does not appear) of the moneys due from complainant to them, and no credit was given therefor in the judgment rendered in the Hudson circuit court; and the complainant had no notice prior to the rendering of such judgment that any moneys were realized by Richard Owen or the defendants, as his administrators, upon any of the property of the complainant so in their possession. The executors of Henry Wehle, and the said Joseph R. Smith, claiming to be their assignee, are. all residents of the state of New York, and refuse to allow the judgment rendered in the city court of New York to be satisfied or discharged until their said lien has been fully paid and discharged; and complainant is unable, under the laws of the state of New York, to obtain such satisfaction, and he believes and charges that he will be liable to pay the same even if he should pay and satisfy the judgment in the Hudson circuit. Complainant, after notice of the facts hereinbefore set forth, applied to the defendant John Owen, and expressed himself as ready ana willing to pay and satisfy the amount due on the Hudson circuit court judgment upon a return of his deeds and papers taken by Richard Owen, and upon the satisfaction of the lien or claim of the executors of Wehle, and the formal satisfaction of record of the New York judgment, and upon being released from the claim of Wehle's executors, which offer was declined by the defendant, and execution issued on the judgment, and a levy was made upon property of the complainant. Complainant tenders himself ready and willing to pay whatever is actually due upon the judgment, after deducting and allowing the credit for such moneys as may have been realized by Richard Owen in his lifetime, or the defendant John Owen, as administrator, out of the complainant's property, in the city of New York, upon being relieved of the claims of the executors of Wehle, deceased, and of their alleged assignee, Smith, and having the judgment there against him satisfied and discharged of record. The prayer is that there may be an interpleader between the executors of Wehle and Smith, their alleged assignee, on the one part, and defendant Owen, as administrator, on the other; that an account may be had of the moneys collected by Richard Owen in his lifetime, or by John Owen, as administrator, out of the property of the complainant, and the same credited on the judgment; and that the complainant shall be released and discharged from the claim of the executors of Wehle and Smith, and the judgment recovered in the city court of New York satisfied and discharged of record, and the deeds and other papers in the hands of Richard Owen at the time of his death may be delivered to him. No affidavit of noncollusion and disinterestedness was annexed to the bill.
F. W. Ward, for complainant.
J. Frank Fort and George Biller, for defendant.
PITNEY, V. C. (after stating the facts). In answer to the objection taken by defendant that the bill is demurrable for want of the usual affidavit of noncollusion and disinterestedness required in a bill of interpleader, complainant answers that this is not a pure bill of interpleader, but is no more than a bill in the nature of a bill of interpleader, in that it contains other grounds for coming into a court of equity, and asks other relief than that of a pure interpleader; and, therefore, that such affidavit is neither proper nor necessary. In this, I think, the complainant is right. The formal affidavit in question is not a statutory requisite, nor required by any standing rule of the court, but has been required by the courts to prevent the abuse of a bill of interpleader being used by a stakeholder in the interest of one or the other of the parties claiming the fund, who might for any reason prefer to have his claim passed upon by a court of equity rather than by a court of law. For myself, I am unable to perceive any principle upon which the absence of the formal affidavit can be held cause for demurrer, if the bill itself contains the proper averment of fact, which the demurrer must admit. But the rule seems to be established, as contended for by the defendant, that the absence of the affidavit is a cause of demurrer. In the case in hand, however, there is in the bill no allegation of indifference or noncollusion, and hence it fails as a pure interpleader. A bill in the nature of an interpleader is one in which the complainant asks some relief over and above a mere injunction against suits by the contesting parties, and states facts which entitle him to such relief independent of the fact of the adverse claims of the several defendants. The books furnish numerous instances of such. 2 Daniell, Ch. Prac. (5th Ed.) p. 1571, and cases cited; Story, Eq. Pl. (9th Ed.) § 297b, and cases cited. In our own state we have several instances. Aleck v. Jackson, 49 N. J. Eq. 507, 23 Atl. 760, and Illingworth v. Rowe, 52 N. J. Eq. 360, 28 Atl. 456, are samples; and the opinion in the latter case refers to other cases illustrating the distinction between pure bills of interpleader and bills in the nature of interpleader. If the complainant's bill duly states facts which entitle him to relief independent of its interpleader aspect, then, clearly, no affidavit of indifference is necessary or proper. Such is the rule stated by Mr. Daniell (2 Daniell, Ch. Prac. [5th Ed.] p. 1563, citing Vyvyan v.Vyvyan, 30 Beav. 65); and this must be so upon principle.
This brings us to the merits of the bill. The complainant relies upon several distinct equities, each of which is met by the defendant in argument. First, he alleges, and the demurrer admits, that the executors of Wehle have a lien upon the New York judgment, on account—First, of services actually rendered in the procurement of that judgment, including costs of the recovery and extra counsel fees and expenses; and, second, by a parol assignment of it by Richard Owen to Wehle to secure other moneys due from Richard Owen to Wehle, and that the executors of Wehle, or their assignee, Smith, threaten to use the New York judgment as a means of enforcing it, and that a payment to the sheriff of Hudson county or to the attorney of the plaintiff in the Hudson county judgment, resulting in a full satisfaction of that judgment, will not relieve complainant from the judgment in New York on which that judgment is based, and that he is entitled to have the New York judgment satisfied, and the claim of Wehle's executors discharged, before paying the money. The defendant did not deny but that the complainant was entitled to be relieved from the effect of the New York judgment, but argued, upon general principles, that the New York judgment was absolutely destroyed, and all remedy upon it taken away, by merger in the New Jersey judgment recovered upon it. It is neither necessary nor proper at this time to finally determine whether or not the defendant's contention in this respect is sound. It is sufficient to say that it is, at least, doubtful, and so appears from the very authorities which are cited to support it. Mr. Freeman (Freem. Judgm. § 216) says: "A judgment is extinguished when being used as a cause of action, it grows into another judgment," —and cites a number of American authorities in support of his text, some of which give countenance to the idea that where liens are acquired upon property by virtue of judgments recovered in one state, and a subsequent suit is brought upon that judgment in a sister state, the judgment recovered therein destroys the first judgment to the extent of destroying all liens already acquired under it; but the learned author states that this doctrine is not universally admitted, and he says: "Some American cases proceed upon the theory that no merger can take place until some higher remedy or evidence is created, and deny that one judgment can merge into another of equal degree. On this ground, the motion to enter satisfaction of a judgment, because it had been recovered upon in another action, was denied." The authorities he cites are Weeks v. Pearson, 5 N. H. 324; Mumford v. Stocker, 1 Cow. 178; Andrews v. Smith, 9 Wend, 53; Griswold v. Hill, 2 Paine, 492, Fed. Cas. No. 5,836. These cases all support the doctrine of the text just quoted; and to these may be added the case of Jackson v. Shaffer, 11 Johns. 513. There a bond and warrant of attorney to confess judgment had been given in quasi payment of a judgment already recovered, and judgment was afterwards entered on the bond and warrant of attorney, and it was held not to destroy the original judgment or its lien upon land, and a sale of land under the original judgment, made after the entry of the judgment on the bond and warrant of attorney, was held by the supreme court of New York to pass the title to the land by virtue of the original lien of the first judgment. The only authority the other way in New York is a decision of Chancellor Walworth, without any discussion or citation of authorities, in Purdy v. Doyle, 1 Paige, 561. I cannot think that learned judge intended to overrule the decision of the supreme court in Jackson v. Shaffer, and must take the law to be as therein declared. Mr. Bigelow, in his book on Estoppel (5th Ed., p. 104, c. 3; § 2, par. 3), points out the same doctrine, and, in his note to Story on the Conflict of Laws (8th Ed., § 599a), says that "it may be inconvenient that two judgments should subsist in the same state against the same persons, on the same demand, but no such inconvenience can exist in the case of judgments rendered in different states; and there is no sufficient reason for the application of the purely technical doctrine of merger, subversive of substantial justice as it would be in such cases." And he adds: "Indeed, in view of the fact that one satisfaction would satisfy both judgments, there is little to be said in favor of the doctrine of merger, reasonable as that doctrine may be in ordinary cases, by a second judgment obtained upon the first, even in the same state." And see 2 Black, Judgm. §§ 864, 1013. I think that Mr. Bigelow's criticism is just; and I am unable to see any reason in law or in public policy why, if A. recovers a judgment against B. in the state of New York, and acquires a lien by virtue of it upon property insufficient to pay it, and immediately afterwards brings a suit on that judgment, and recovers upon it in the state of New Jersey, he must, as a condition of recovering that judgment in New Jersey, lose his lien by virtue of his judgment in New York, and all remedy thereunder. It is to be observed that the distinction here is between having two valid judgments at the same time in two distinct jurisdictions, one founded upon the other, with a concurrent right to a remedy under each, for the purpose of paying the amount due, not twice, but once, and the effect of the payment of the later judgment upon the former judgment. Undoubtedly, under ordinary circumstances, in the case in hand, the payment of the judgment in New Jersey would be, in effect, the payment of the judgment in New York. But that is not the question here. The question is whether or not the judgmentin New York is. before the payment of the judgment in New Jersey, a valid existing judgment, so that the attorney of record still has his lien upon it for the amount of his fees, costs, and services. If it be such valid and existing judgment before the payment of the judgment in New Jersey, and the attorney of record has his lien upon it, it will at once be seen that it is, at least, a matter of grave doubt whether the payment of the New Jersey judgment, after notice of the attorney's lien upon the New York judgment, will discharge that judgment, and thus extinguish the lien.
But the defendant further contends that, the executors of Wehle having remained quiet, and failed to enforce their lien until after judgment was recovered in New Jersey, they must be presumed to have waived it, or, at least, lost it by their laches. I am unable to see any force in this suggestion, or to observe any laches in their conduct. The bill does not disclose any failure on the part of the attorney to use diligence in the collection of the judgment in New York, and mere nonaction there would not destroy his lien, and he was not bound to follow the defendant into New Jersey, and sue here. It is difficult to see what duty was cast upon him to watch in all the courts of the different states in the Union for suits brought by the representative of Owen upon that judgment, in order to intervene in such suits. Nor is it perceived how the attorney or his personal representative could have intervened or done anything to prevent the suit being brought in New Jersey precisely as it was, or stop the recovery of judgment therein. Granting that the whole of the judgment was really due to the representatives of the attorney, still the action was properly brought in our court in the name of the personal representative of Owen, in whom was the legal title only. Hence it follows plainly that, granting the lien, the suit brought by the representative of Owen was properly brought; but, in equity, it was brought really for the use of the representatives of Wehle, and they are in ample time if they give notice to the defendant before the money is paid.
It was further suggested that, perhaps, the complainant here (the defendant in the judgment) could relieve himself from all liability to the executors of Wehle by giving notice to them that he would pay the money into the Hudson county court where the judgment was recovered, and let them apply to that court to pay the money out to them. It is probable that such action would have been efficient to discharge the complainant herein, but he would not thereby obtain a discharge on the record of the New York judgment, or a decree protecting him against further molestation by the executors of Wehle or their assignee under their claim. His defense against such action on their part would rest wholly upon matters in pais, and he would be compelled on his defense to prove by parol the fact that he gave them the notice before paying the money into court. I am unable to see that he is not entitled to the more perfect remedy of paying the money into the court of chancery, and having a decree of that court compelling the defendant Owen to completely discharge him as a condition to having the money.
But the further difficulty with defendant's argument is that, granting the general rules of law to be as stated by the defendant, the complainant, in his bill, as I interpret it, states the law of New York to be otherwise, viz. that the New York judgment will, according to the law of New York, stand against him, notwithstanding payment of the judgment here, and that he will not only be. unable to have it satisfied of record, but that he would be liable to be proceeded against under it by the executors of Wehle. Now, this statement of the law of New York is a statement of a fact, and is admitted by the demurrer; for the statement of the law of a foreign state or country is a statement of fact, as I understand the rules of pleading. But grant it to be otherwise, and grant that, independent of the existence of the lien upon the New York judgment in favor of the Wehle estate, which is admitted by the demurrer, the complainant, upon going to New York with record proof of the payment and satisfaction of the New Jersey judgment, could, upon motion or other proceedings, have the New York judgment declared satisfied of record, yet it does appear upon the admitted facts of the case that there is danger that he would be unable to do that in the present case, on account of the lien of Wehle's executors. And granting that the law of New York as stated by the bill is erroneous, that the defendant's contention is right, and that by the law of the land, applicable in New York and elsewhere, the New York judgment is merged in the New Jersey judgment, and can no longer be resorted to by the administrator of Owen, whether the New Jersey judgment is paid or not, still the complainant is entitled to have that New York judgment satisfied and canceled of record, so that it shall no longer stand as an uncanceled judgment against him in New York City. And it seems to me that the difficulty, to say the least, thrown in the way of having it so discharged of record, by the admitted lien upon it by the executors of Wehle, entitles him to have such cancellation a condition precedent to the payment of the money in this case.
For these reasons, I think the bill in this aspect states a substantial equity.
The next ground of equity taken by the complainant is that Richard Owen, by means of the judgment in New York, became possessed of certain documents and evidences of debt belonging to complainant, and still holds the same, and on some of them has recovered and received certain moneys (amount and particulars not stated), and that complainantdid not have notice of the receipt of those moneys until after the recovery of the judgment, so that he could not have set it up in defense. The point taken by the defendant against this equity, is that it is a matter of defense at law, and that it does not appear that the complainant was diligent to such a degree in ascertaining the facts as to give him a right in a court of equity to ask for relief against a judgment at law; the defendant's position being that, in order to enable a defendant in a judgment to come into equity and get a new trial on discovery of facts available at law, he should free himself of all laches in the case, and show that it is too late to obtain relief at law. I am inclined to think that this criticism is well taken. The statements of the bill in this behalf are very meager and unsatisfactory; but the fact remains, and it is admitted by the demurrer, that some moneys have been received either by Richard Owen in his lifetime, or by his administrator, the defendant, which, in justice, ought to have been credited, on this judgment; and it is to be borne in mind that the particulars of the same are naturally in the defendant's, and not in complainant's, knowledge. But, over and above all that, the papers and documents which are in the hands of the administrator of Owen, or, as the bill alleges as to some of them, in the hands of the executors of Wehle, ought to be given up to the complainant upon the payment of the judgment; and he has a clear equity to have them so given up.
For these reasons, I conclude that the bill discloses equities, and that the demurrer should be overruled.