Case Name: Nassau Bank, App'lt, v. George B. Yandes, as Assignee of Augustus W. Ritzinger et al., Impleaded, etc. Resp'ts
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1887-03-31
Citations: 8 N.Y. St. Rep. 415
Docket Number: 
Parties: Nassau Bank, App’lt, v. George B. Yandes, as Assignee of Augustus W. Ritzinger et al., Impleaded, etc. Resp’ts.
Judges: 
Reporter: New York State Reporter
Volume: 8
Pages: 415–423

Head Matter:
Nassau Bank, App’lt, v. George B. Yandes, as Assignee of Augustus W. Ritzinger et al., Impleaded, etc. Resp’ts.
(Supreme Court, General Term, First Department,
Filed March 31, 1887.)
1. Interpleader—When stakeholder entitled to bill of.
A stakeholder has always the right, where there are conflicting claims to money or property in his Hands, to go into court and to deposit the money or property in court and leave the litigation of the question to be carried on between the conflicting claimants.
2. Same—There must be reasonable doubt.
The rule now is that a reasonable doubt, as to who is entitled to the money, etc , must exist in order to justify the bringing of an action of • interpleader, and that, any doubt is not sufficient. Atkinson v. Manks, 1 Cow., 705, overruled.
3. Assignment—Yerbal assignment of bank account valid.
A verbal assignment of a balance of account in bank is valid; the bank is liable to suit to recover such balance by the assignee, and is required to. take the risk of the existence of facts the evidence of which íested exclusively, perhaps, with the assignee and claimant.
4. Assignment in another state for benefit of creditors—When can-'NOT BE ATTACHED COLLATERALLY.
The general assignee for the benefit of creditors, in the state of Indiana, having made a demand for certain money in the plaintiff bank before certain attachment suits were commenced, the assignments having been' proved to have been executed according to the laws of Indiana and to have been valid there, the sheriff could not in an action here in aid of an attachment attach the same upon the ground that it was made with fraudulent intent.
5. Contract—Governed by law of place where made or performed.
The law of a place where a contract is made or to be performed is to govern as to the nature, validity, construction and effect of such a contract, and being valid in such place, it is to be considered and enforced everywhere with the exception of cases in which the contract is immoral or unjust or in which the enforcing it in a state would he injurious to the rights, interests or convenience of such state or its citizens. Per Van-Brunt, P. J.
'-6. Practice—Attachment—What can be taken under—Right of SHERIFF TO BRING ACTION—CODE OlV. PRO., § 708.
An attaching creditor cannot attach the property claimed to he that of his debtor, consisting of choses in action incapable of a manual delivery, when they have been previously assigned and transferred by him to another party; and being incapable of seizure under the attachment, the sheriff has no authority for bringing or maintaining an action against the debtor for the recovery of the amount of the debt. It is only when the debt itself may have been attached that he can bring an action under Code Civ. Pro., § 708, subd. 4. Per Daniels, J.
Appeal from a judgment refusing a bill of interpleader. On February 1, 1886, and for several years prior thereto, the defendants Augustus W. Eitzinger and Frank L. Eitzinger were partners in business at Indianapolis under the .firm name of Eitzinger & Co. Prior to said date the said .firm had procured the plaintiffs, the Nassau Bank, to discount five notes for $5,000 each,- and had given to the plaintiffs, to secure the payment of said five notes, a quantity of commercial paper and 230 shares of the capital ¡stock of the Franklin Insurance Company of the par value of fifty dollars each. On said February 1 the said firm at Indianapolis aforesaid made and delivered an assignment in writing duly signed and acknowledged by each of them, by which they assigned and conveyed all their property of •every kind and nature, and wheresoever situate, to the defendant George B. Yandes in trust for the benefit of the creditors of the assignors equally and without- preference. This assignment on said date was duly filed and recorded in the office of the clerk of Marion county, State of Indiana, ■and a true and correct copy of the assignment was duly filed in the office of the clerk of said Marion county. The defendant Yandes on the same day accepted said trust in writing. On the second of February the assignee took his oath of office and filed his official bond, duly executed and with sufficient sureties and duly approved.
The assignment was the free and voluntary act of the assignors, and was a voluntary or common law assignment, as distinguished from a statutory or compulsory one, and was valid in the state where it was made and where the .assignors and assignee then lived. The plaintiffs had notice of said assignment on the day of its date. After the making and delivery of the assignment, and the acceptance of the trust by the assignee, and the doing of the several acts above mentioned, divers creditors (defendants herein) of said firm brought actions against said firm in the state of New York and obtained attachments against the property •of the firm on the ground that the members thereof were non-residents of the state of New York. Said attachments were served on the plaintiffs between the 3d of February, 1886, and the lltH of February, 1886, inclusive, and amounted to the sum of $4,731.65. Prior to May 20, 1886, all the paper deposited as collateral to the five notes and other indebtedness of the firm of Ritzinger & Co. to these plaintiffs had matured and had been collected, except some unpaid and protested paper; and on the 20th of May, 1886, all the indebtedness of every kind from said firm to the plaintiffs had been paid. After payment of said indebtedness there remained in the hands of the plaintiffs the sum of $5,856.03, the proceeds of the collaterals, the 230 shares of insurance stock, and the protested notes hereinbefore mentioned. On the said 20th of May, 1886, the defendant Yandes, as assignee, demanded from the plaintiff said cash, insurance stock and unpaid paper, and the plaintiffs refused to comply with the demand, and, on the 25th of said May, said assignée brought and action in this court against the plaintiffs to recover said money, stock and protested paper. The attachment suits hereinbefore mentioned having gone to judgment (although upon no personal service on the defendants Ritzinger or appearance by them), the defendant Grant, as sheriff, began an action on or about July 20, 1886, against these plaintiffs to recover the cash, protested notes and insurance stock mentioned in the complaint herein, as property which had been attached and levied upon as the property of said Ritzingers, and in said action said sheriff claimed possession of said cash and property as subject to said attachments, and that said attachments took precedence over the title of the assignee. Both of said actions were pending at the time of the commencement of this action. The plaintiffs thereupon filed their bill of interpleader against the assignee, the sheriff and the attaching creditors, asking that the defendants might be called upon to interplead and settle their rights to said money and property amongst themselves, and the plaintiff be at liberty to pay said sum of money into court and deposited said property in court. Upon the trial of said action the court rendered judgment in favor of the defendants, and from such judgment this appeal is taken.
George A. Strong, of counsel, for app’lt; Francis C. Barlow, of counsel, for resp’t Yandes.

Opinion:
Van Brunt, P. J.
A stakeholder has always the right where there are conflicting claims to money or property in his hands, to go into court and ask to deposit the money or property in court, and leave the litigation of the questions to be carried on between the conflicting claimants. The question which is presented upon this appeal is as to what it is necessary for the plaintiff to establish in order to show that there are conflicting claims. • It is claimed upon the part of the plaintiff that all that is necessary for the stakeholder to establish is that suits have been brought or suits have been threatened by divers claimants to the same fund in order to entitle him to the protection of the court, and that the stakeholder is entitled to be removed beyond the shadow of risk in paying over the money where antagonistic rights are asserted. This view is undoubtedly sustained by the opinion of the court in the case of Atkinson v. Manks (1 Cow., 705), where the court say in substance that where a party had forbidden a stakeholder to pay over money to another and threatened him with a suit, the stakeholder was not bound to exercise any judgment upon the subject. This rule, however, does not seem to be the prevailing rule now in reference to this matter. As all business is conducted with some risk, as every holder of money in the payment of it over, always does so at some risk, the courts have receded from the rule that all that it .is necessary to establish is that some claim had been presented, and have held that it is necessary in addition, to-prove that such claim had some reasonable foundation, and that there was some reasonable doubt as to whether the stakeholder would be reasonably safe in the payment over of the money. It is claimed that because the defendant, the assignee, came to the plaintiff with an asserted voluntary general assignment made in the state of Indiana, that this related to a fact which the bank could not know, and that the bank could not know whether the assignment was a valid and voluntary assignment by the laws of Indiana, and that therefore the plaintiff was not required to take .the risk of the existence of all those facts. It has been held by the courts of this state that a verbal assignment of a balance of account in bank was valid, and the bank was liable to suit to recover such balance by the assignee, and that the bank was required to take the risk of the existence of facts, the evidence of which rested exclusively perhaps with the assignee and claimant. Risley v. Phenix Bank, 83 N. Y., 318. And, as has been observed, no business can be conducted without hazard; the plaintiff in the payment out of the money of its depositors upon their checks takes-a risk of the forgery of the check either in. the maker's signature or in the filling in of the amount; in its transactions with its customers it runs a risk that the indorsements of commercial paper may also be forged, and it get no title, and therefore the courts seem to have inclined to the rule that a mere pretext of a conflicting claim is not enough to show that the plaintiff is in any danger of loss from ina bility to determine to whom a debt should be paid. In the case of the Baltimore and Ohio R'y Co. v. Arthur (90 N. Y., 234), it was held that the plaintiff in an action of interpleader must, show that there is some question as between the claimants to be tried and that he will incur hazard in paying to either.
In the case of Dorn v. Fox (61 N. Y., 264), the court lay down the following rule: "The rule requiring that in actions of interpleader the plaintiffs should be in doubt as to which of the claimants is in the right must be construed in a reasonable manner. It qj: course excludes all cases where the rights of parties are clearly settled. On the other hand, so long as a principle is still under discussion it would seem fair to hold that there was sufficient doubt and hazard to justify the protection which is afforded the beneficent action of
It is not necessary to consider other authorities in order to show that the rule now is that a reasonable doubt must exist in order to justify the bringing of an action of inter-pleader and that any doubt is not sufficient as was said in the case of Atkinson v. Manks (supra).
We are then brought to the question as to whether there is any reasonable doubts as to the rights of the assignee of Bitzinger & Co., and of the attaching creditors of said firm to said fund. It is the settled law of this state that the law of the place where a contract is made or to be performed is to govern as to the nature, validity, construction and effect of such a contract and being valid in such place it is to be considered valid and enforced everywhere with the exception of cases in which the contract is immoral or unjust or in which the enforcing it in a state would be injurious to the rights, interests or convenience of such state or its citizens. Andrews v. Herriot, 4 Cow. , 510. This rule is recognized in Guillander v. Howell (35 N. Y., 657), and Warner v. Jaffray (96 N. Y., 248). It is true that in the case of Guillander v. Howell it was held that an assignment made in the state of New York, of property then being situate in New Jersey, which was void under the laws of New Jersey carried no title to the property in New Jersey. This conclusion was arrived at because the assignment in question contained preferences which were contrary to the law of New Jersey, and that as the property was within the exclusive jurisdiction of New Jersey, and as that state protected and regulated it, and as the laws of New York had no force in New Jersey as laws, but were by comity only enforced as to a transfer of personal property valid in New York, except when injurious to her citizens there, the laws of New Jersey when in conflict with the laws of New York in respect to the transfer of such property must con trol. The same principle was recognized in the case of Warner v. Jaffray, and these are exceptions to the rule which has long prevailed that personal property has no locality, but must be governed by the law of the domicil of its owner. Therefore it seems to be established beyond a reasonable doubt that the property of Ritzinger & Co., held by the Nassau Bank passed to the assignee by the assignment made in Indiana on the 1st of February, 1886.
The next question to be considered is, has the sheriff or the attaching creditors acquired any rights by virtue of their attachments and the levy thereon ?
The sheriff may collect and receive all debts effects and things in action attached by him and he may maintain any action or special proceeding in his own name of the defendant which is necessary for that purpose or to reduce to his actual possession an article of personal property, capable of manual delivery, but of which he has been unable to obtain possession. This, however, gives neither the sheriff nor the attaching creditors any right to attack the assignment on the ground that it was made with intent to hinder delay and defraud the creditors of the assignors. He can bring suits to collect debts and to reduce to possession personal property the legal title to which is in the defendant in the attachment suit; but he cannot maintain an action to remove an obstacle to the attachment. Gibson v. National Park Bank, 98 N. Y., 87; Moseley v. Moseley, 15 id., 334.
Title passes even by a fraudulent conveyance if executed, and consequently the title passed under the assigment in question to the assignee, even though it may have been a fraudulent conveyance. The sheriff, therefore, the assignment having been proved to have been executed according to the laws of Indiana and to have been valid there, could not in an action here in aid of an attachment attack the same upon the ground that it was made with fraudulent intent. Thurber v. Blanck, 50 N. Y., 80.
It is necessary that such an action as respects personal property should be brought by the judgment creditor after his remedies at law have been exhausted. But it is claimed that the sheriff in the actions which he has brought against the plaintiff might show that the assignment was invalid even in Indiana, and that by the finding of the court in this action he is not precluded from so doing. This suggestion seems to be answered by the proposition which has been heretofore discussed, namely, that in order to entitle to judgment in an action of interpleader, the plaintiff must show that there is reasonable ground to suppose that the title of one of the claimants is uncertain. _ There is no pretense in the proofs that there is any claim on the part of the sheriff that the assignment in question was not valid according to the laws of Indiana; and if there was such pretence, there is nothing whatever in the case to show that any such claim has the slightest foundation in law. The mere fact of what the sheriff may claim or may not claim, does not raise the reasonable doubt required by the law, but such reasonable doubt must be supported by proof, raising a question upon which the court may pass judicially.
The result, therefore, is that the judgment appealed from must be affirmed, with costs.
Brady, J., concurs in the result.
Daniels, J.
The property in controversy in this action consists of an indebtedness of the plaintiff to the defendants, Bitzingers, in the sum of $5,856.03, and 230 shares of insurance stock, together with three protested notes. This sum is the balance remaining owing by the plaintiff out of the proceeds of paper held as collateral by it, upon which a further sum had been collected sufficient to pay and extinguish its own indebtedness. This balance was a debt existing against the plaintiff, and when the attachments were issued which were mentioned in the complaint, it could be not otherwise seized than by the service of a copy of the attachments with notice showing the property attached, as that was provided for by subdivision 3 of section 649 of the Code of Civil Procedure. The protested notes, if the creditors had been desirous of seizing them under the attachment, might have been actually taken by the sheriff. But as they do not appear to have been of any actual value, no attempt was made to levy by the attachment upon them in that manner. Neither did the sheriff attempt to make any actual seizure of the 230 shares of stock. But for the purpose of attaching this property as well as the indebtedness of the bank, copies of the attachments, with the notices allowed to be served by this section of the Code, were served upon the plaintiff, and it is upon the judgments recovered in the actions in which the attachments were issued, and without any personal service of the summons upon the debtors, that the sheriff has brought his action against the plaintiff to recover this balance of the indebtedness and the other property mentioned.
But as the debtors themselves executed and delivered a general assignment of their property for the benefit of their creditors, in the manner in which that was authorized to be done by the laws of the state of Indiana, before either of the attachments had been issued, the indebtedness now in controversy did not become subject to the attachments. So much of the property as was capable of manual delivery was required to be taken into the sheriff's actual custody, to constitute an attachment or seizure of it by subdivision 2 of section 649 of the Code. No such seizure was made either of the protested notes or of the shares of stock. As to those articles the sheriff accordingly acquired no lien upon them under the attachments, and he had no title whatever upon the facts, as they were made to appear beyond controversy, upon which he could maintain any action against the plaintiff. The attachments were likewise entirely inoperative upon the balance of the indebtedness owing by the bank to the debtors. For after an assignment of such an indebtedness has been made, it is incapable of being seized under attachment issued against the assignor. This was considered very fully in Thurber v. Blanck (50 N. Y., 80), and it resulted in the determination that property incapable of manual delivery, after its assignment, could not be reached by its seizure through the medium of an attachment, but that the remedy of the creditor to recover it was by a proceeding in equity to set aside the assignment or transfer when that might be done, after the recovery of a judgment, and the issuing and return of an execution upon it. The same view was adopted and maintained in Smith v. Longmire (24 Hun, 257), and it was so far also followed in Bates v. Plonsky, 28 id., 112.
These authorities all agree in maintaining the inability of an attaching creditor to attach the property claimed to be that of his debtor, consisting of choses in action incapable of a manual delivery, when they had been previously assigned and transferred by him to another party and being incapable of seizure under the attachments, the sheriff has no authority for bringing or maintaining an action against the debtor for the recovery of the amount of the debt. For it is only when the debt itself may have been attached that the sheriff has been authorized to maintain an action for its recovery, by virtue of subdivision 4 of section 708 of the Code of Civil Procedure. Neither as to the protested notes, inasmuch as they were not actually attached or taken into the sheriff's custody, nor the shares of insurance stock which might have been seized in the same manner, nor the balance of the indebtedness due from the bank, did the sheriff acquire any right to recover in the action brought by him against the plaintiff. His inability to maintain the action and his failure to secure a legal seizure of any part of the property or indebtedness in dispute, appear clearly and beyond controversy upon the face of his proceedings. As to the effect of what has been done by him, no legal uncertainty remains under the construction which has been given to the provisions of the Code by the authorities which have been cited. The plaintiff was accordingly in no legal danger whatever and subjected to no possible risk from the proceeding on the action taken by the sheriff, and it accordingly was not in a position in which it could require either the sheriff or the creditors in the attachments to be interpleaded with the assignee under the general assignment, for the determination of the right to or disposition of this property. The title of the assignee, as it has been established and shown in the opinion of the presiding judge, is free from legal dispute, and neither the money or property can justly be withheld from him by the plaintiff as long as it so plainly appears that the adverse claim is entirely devoid of legal foundation. If the creditors represented in the attachments can maintain a paramount right to this indebtedness, that can only be done after judgments recovered by them against their-debtors and the issuing and return of executions, and the successful impeachment of the assignment through the intervention of creditors actions. And as neither the debtors nor the assignee were within this state, it follows that this remedy even of the attaching creditors must be pursued where personal service of process can be made upon them, or their appearance can otherwise be enforced in actions commenced against them. Until the title of the assignee shall be set aside or superseded in this or some other legal manner, or a lawful seizure shall be made, he is entitled to the balance of the indebtedness and property in dispute, and neither the attaching creditors nor the sheriff acting in their behalf have even a colorable claim upon which they can resist the right of the assignee to this balance and the property.
The judgment in the case as directed by the presiding judge, in his opinion, should therefore be affirmed.
Brady, J.. concurs in the result.