Case Name: STANNARD v. ATLANTIC TERRA COTTA CO.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1910-06-10
Citations: 123 N.Y.S. 733
Docket Number: 
Parties: STANNARD v. ATLANTIC TERRA COTTA CO.
Judges: 
Reporter: West's New York Supplement
Volume: 123
Pages: 733–737

Head Matter:
STANNARD v. ATLANTIC TERRA COTTA CO.
(Supreme Court, Appellate Division, First Department.
June 10, 1910.)
Counties (§ 129 )—Contract fob Ebection of Courthouse—Remedies—Relief in Equity.
A contractor for a courthouse contracted with a subcontractor for the ornamental terra cotta for the building. The subcontractor breached his contract. The contractor completed the building, except for the terra cot-ta, and procured an acceptance of the building. The public officers who were not suable under the law retained a specified sum for the terra cotta work because of the existence of a dispute between the contractor and the subcontractor and because the contractor had filed a claim against the moneys in their hands. The contractor conceded that he owed the subcontractor more than the amount of the damages. Held, that the contractor was entitled to sue the subcontractor in equity tó determine the rights of the parties in the sum retained by the public officers; his remedy at law being inadequate.
[Ed. Note.—For other cases, see Counties, Cent. Dig. § 197; Dec. Dig. § 129.*]
Ingraham, P. J., and Laughlin, J., dissenting.
Appeal from Special Term, New York County.
Action by Ambrose B. Stannard against the Atlantic Terra Cotta Company. From an interlocutory judgment overruling a demurrer to the complaint, defendant appeals.
Affirmed.
See, also, 120 N. Y. Supp. 1147. '
Argued before INGRAHAM, P. J., and LAUGHLIN. CLARKE, SCOTT, and MILLER, JJ.
Graham Sumner, for appellant.
Roderic Wellman and Herbert C. Smyth, for respondent.
For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes

Opinion:
MILLER, J.
The plaintiff made a contract with the Courthouse Commission of New Orleans, La., for the construction of a courthouse building, and subsequently entered into a contract with the Perth Am-boy Terra Cotta Company, whereby the latter agreed to furnish and deliver the ornamental terra cotta for the building for the sum of $80,-000. That contract was assigned to, and its obligations were assumed by, the defendant. By reason of the defendant's breaches of the contract, the plaintiff was damaged in the sum of $32,000, and at the time of the commencement of the action the defendant had not completed its contract. The plaintiff has received from the Courthouse Commission, and paid to the defendant, the sum of $25,000 for the terra cotta, delivered by the defendant, leaving a balance unpaid on the contract of $55,000. The plaintiff has completed the building and performed his contract with the Courthouse Commission, except for .the terra cotta yet to be delivered, and has procured an acceptance of the building; but the commission retains the $55,000 for terra cotta work for the reason that the dispute between the parties hereto has not been adjusted, and because the defendant has filed a claim or pretended lien against the moneys in their hands to the amount of $55;000. The said commission is a part of the state government of Louisiana, and' under the laws of that state is a nonsuable body or board. It has declared its intention to retain said sum of $55,000 until the dispute between the parties to this action has been determined by judicial decree or by agreement. The complaint prays that the rights of the parties in and to the said sum of $55,000 in the hands of said commission be fixed and determined; that it be determined that the plaintiff is entitled to receive the said $55,000 and to retain therefrom the sum adjudged to be due him for damages occasioned by the defendant's breach of contract.
It might be possible to spell out of this complaint a cause of action at law; but the plaintiff seeks to sustain it only as an action in equity, and we shall, therefore, consider it only from that standpoint. The defendant asserts that a cause of action in equity is not stated for the reason that the plaintiff has an adequate remedy at law, and that a court of equity cannot render a decree which will have any practical effect.
It is difficult to see what remedy the plaintiff has at law. He would have an adequate remedy if he could sue the Courthouse Commission. The only action at law, which he has, is an action against the defendant for damages for its breach of contract; but the plaintiff concedes that he owes the defendant more than the amount of such damages. Such an action, therefore, would result in a judgment against the plaintiff for such excess, together with the costs of the action. To be sure, such an action would determine the amount of the damages which the plaintiff would have a right to offset against the sum owing the defendant. But no one should be compelled to resort to an action in which costs are sure to be imposed upon him.
It is true that the judgment in this action will not legally be binding upon the said commission; but presumably that commission, being a branch of the state government, will respect a decree determining the rights of the parties. The obligation of the commission to pay is a moral obligation, precisely as its obligation to recognize such a decree would be a moral obligation. The commission is in the position of a stakeholder. It cannot be compelled by legal process to pay, but it recognizes its moral obligation and is willing to pay whenever the dispute between the parties can be resolved. The fact that the fund is not within the jurisdiction of the court is of no consequence. The binding effect of the decree would be no greater if the fund were within the state of New York. The court has jurisdiction of the parties. While it cannot directly reach the fund or by legal process compel the stakeholder to pay it over, it can determine the rights of the parties, and by a judgment in personam compel them to execute assignments either to an officer of the court or to each other, which presumably the commission will recognize, though not legally bound to do so. The jurisdiction of equity to render decrees in personam, the direct result of which may be even to transfer the title to land beyond the jurisdiction of the court, is well settled. Many cases on that head were cited by Cullen, J., in Chase v. Knickerbocker Phosphate Company, 32 App. Div. 400, 53 N. Y. Supp. 220. While such jurisdiction is exercised only in cases of contract, of fraud, or of trust, that limitation does not necessarily apply to a case like this. The reason for the exercise of jurisdiction in this case is that the fund cannot be reached by legal process, that the holder of it will presumably pay it over to the one adjudged to be entitled to it, but refuses to make any payment at all until the rights of the parties are adjudicated. There is no reason why residents of this state should be remitted to the courts of a distant state to settle disputes which can be as effectually settled here, and equity should not refuse to entertain jurisdiction on the ground that the plaintiff can, by paying costs, have his dispute with the defendant settled in a suit at law.
The judgment should be affirmed, with costs, with leave to the defendant to withdraw demurrer and to answer on payment of costs in this court and in the court below.
CLARKE, and SCOTT, JJ., concur.