Case Name: NORMAN H. GALUSHA, Appellant, v. THE FLOUR CITY NATIONAL BANK and EDWIN M. LEWIS, Respondents
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1874-06
Citations: 8 N.Y. Sup. Ct. 573
Docket Number: 
Parties: NORMAN H. GALUSHA, Appellant, v. THE FLOUR CITY NATIONAL BANK and EDWIN M. LEWIS, Respondents.
Judges: 
Reporter: Supreme Court Reports (Hun)
Volume: 8
Pages: 573–576

Head Matter:
NORMAN H. GALUSHA, Appellant, v. THE FLOUR CITY NATIONAL BANK and EDWIN M. LEWIS, Respondents.
Promissory note—injunction to restrain transfer of— Service by publication.
This action was brought to restrain the defendant, the bank, from returning a promissory note, made by the plaintiff, to the defendant Lewis, and by him sent to the bank for collection. The suit was commenced after the maturity and dishonor of the note. Lewis resided in Pennsylvania, and had never been served with process, or in any way appeared in the action. The complaint alleged that the note was obtained by fraud, that the consideration for which it was given had failed, and that, “if said note is permitted to be returned to said defendant Lewis, it will be a means of annoyance to the plaintiff; it may get into the hands of innocent parties, who will be defrauded thereby, and it may, and doubtless will, be used to injure the plaintiff in his credit and in his business.” Held (1.) That the plaintiff had a perfect defense at law. (2.) That the facts stated did not justify an apprehension that Lewis would make an improper use of the note, and that plaintiff was not called upon to protect third parties who might be defrauded by Lewis. (8.) That the action could not be maintained, for the reason that Lewis had not been served with process. (4.) That an order of the Special Term, dissolving a temporary injunction granted in the action, was proper and should be affirmed.
Appeal from an order of the Special Term, dissolving a temporary injunction granted in the action by the county judge of Monroe county. The" facts are stated in the opinion.
John Van Voorhis, for the appellant.
Thomas 0. Montgomery, for the bank, respondent.

Opinion:
Gilbert, J.:
The object of this suit is to restrain the defendant, bank, from returning a promissory note, made by the plaintiff, to the other defendant, from whom it received it, for the purpose of demanding and receiving payment thereof. The suit was commenced after the note fell due, and had been dishonored. Mr. Lewis, who' sent the note to the bank, resides in Pennsylvania, and has not been served with process, or in any wise appeared in the suit. The note forms part of the estate of a bankrupt, and is held by Mr. Lewis as a special receiver, he having been appointed such by the District Court of the United States, for the Eastern District of Pennsylvania. It is not shown that the title to the note has been vested in Mr. Lewis, or that he claims any ownership in it. The averments on the part of the plaintiff, are, that the note was obtained by fraud, and that the consideration for which it was given, has failed.
We think the action ought not to be maintained. The note being over due, the plaintiff has a perfect defense at law. There appears to be no reason, therefore, for his coming into a Court of Equity to protect his rights. No doubt, the jurisdiction invoked, may be exercised : but the granting of relief, in cases of this kind, is not by way of absolute right, but is a matter of sound discretion, to be exercised by the court as it thinks proper, according to the circumstances of each case. When it entertains jurisdiction of such cases, it is upon the principle, guia timet, or for fear that future injury or injustice might arise. The only allegation made by the plaintiff, on this subject, is, " that if said note is permitted to be returned to said defendant, Lewis, it will be a means of annoyance to the plaintiff; it may get into the hands of innocent parties who will be defrauded thereby; and it may, and doubtless will, be used to injure the plaintiff in his credit and in his business." This is quite insufficient, if not altogether frivolous.
No facts are stated, justifying an apprehension that Mr. Lewis will make any improper use of the note. He who 'gives a note, and does not pay it, must expect annoyance and injury to his credit, arising from those circumstances, even though payment was rightly refused; but they scarcely afford adequate cause for the interposition of the extraordinary powers of a Court of Equity. Nor is the plaintiff called upon to protect the innocent parties, who, he says, may purchase the note, and may thereby be defrauded. Hpon this ground, alone, we think the injunction was improperly granted, as a discovery is no longer needed or allowed, to enable a party to establish his defense at law.
It is also an insuperable objection to the continuance of the injunction, that jurisdiction of the person of Mr. Lewis, has not been acquired; and that, under the facts, as they now exist, cannot be obtained.
For obvious reasons, the fourth subdivision of section 135 of the Code, does not apply to the case. The third subdivision of that section, contains the only authority to make service upon Mr. Lewis, by publication, and the case has not been brought within it.
1. It does not appear that he has any property in this State, except the note in controversy.
2. That note does not belong to him; but has been only temporarily intrusted to his care by the District Court, as one of its officers or agents.
3. A note sent forward for collection, to be returned immediately, if not paid, is not within the purview of the statute.
The case then must proceed, if it proceed at all, against a mere agent, for the sole purpose of preventing his performance of a plain duty to his principal. We cannot sanction such a claim.
The motion to dissolve the injunction was regular. Although the county judge heard the parties before allowing it, it was still a preliminary order only, and was a proper subject of a motion to dissolve it, on bill and answer.
Without discussing the question of the power of the court to interfere with a receiver appointed in a foreign jurisdiction, therefore, we think the order appealed from must be affirmed.
Order affirmed.
Mitchell v. Oakley, 7 Paige, 70 ; Crane v. Bunnell, 10 id., 341
Haight v. Husted, 4 Abb., 348 ; S. C., 5 id., 170.