Court Opinion

ID: 5751568
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:58:06.137684+00
Date Added: 2024-06-11T08:41:17.974281
License: Public Domain

Breitel, J. (dissenting).
Special Term granted the consolidated motions of defendant and interpleaded defendants to strike the action from the equity nonjury calendar and to place it upon the law jury calendar. The issue is whether in an action converted under the modern procedure into one for interpleader there is a right to a trial by jury (CPLR 1006, 4101).
I am constrained to dissent and to vote to reverse and deny the consolidated motions on the ground that the action is not one for the recovery of a judgment for a sum of money only and that there is, consequently, no right to a jury trial.
Under the purchase and sale of certain corporate assets, provision was made in an agreement among the parties to this-action for the payment of a portion of the purchase price to a lawyer, defendant Rosen, as escrow agent. Upon certain conditions, the escrowee was to pay plaintiff Geddes a computable sum of money, now aggregating, allegedly, some $80,000, in discharge of claims made by him, and the balance was to be paid to the interpleaded defendants. Plaintiff Geddes sued the escrowee to recover the $80,000 sum claiming, the conditions having been fulfilled, that he was entitled to payment. Because the interpleaded defendants dispute that the conditions have been fulfilled and claim all of the moneys held by the escrowee, the escrowee answered offering to hold the moneys subject to the court’s direction or to pay them into court. At the same time the escrowee interpleaded the defendants, who dispute with plaintiff Geddes the right to the escrow funds.
When plaintiff Geddes noticed the case for trial on the nonjury calendar, the interpleaded defendants and defendant Rosen, the escrowee, made the instant motions.
CPLR 4101 provides for a jury trial on demand in an action ‘ ‘ in which a party demands and sets forth facts which would permit a judgment for a sum of money only ”, or in any other action “ in which a party is entitled by the constitution or by express provision of law to a trial by jury.” The statute in referring to a money judgment is referring to the kind of judgment for the enforcement of which execution issues generally against the assets of the judgment debtor (see CPLR 5201 et seq., cf. CPLR 211, subd. [b], providing for a limitation period on money judgments; CPLR 5011, for a general definition of judgments).
*401This is not such a case. A specific fund or asset, which happens to consist of money, is involved. A general execution would not issue against the escrowee, nor would he be obligated to pay interest on the judgment or award as a general judgment debtor would be obligated to pay under CPLR 5002 and 5003. For his failure to pay the judgment from the specific fund the escrowee could be punished directly under CPLR 5104 as for a contempt, while a money judgment could only be enforced under CPLR 5201 et seq., as provided in CPLR 5101. Moreover, as an escrowee the original defendant would be obligated, in the absence of consent by the interested parties to do otherwise, to keep the entrusted funds separate and to account for them as a trustee and professionally as an attorney holding escrow funds. That an escrow agent is or may be a trustee, see Farago v. Burke (262 N. Y. 229, 233) (see, also, 30 C. J. S., Escrows, §§ 1, 8). Hence, under the statutes and the Constitution there is no right to a jury trial.
The decisional law yields a similar conclusion on the broad ground that proceedings in the nature of interpleader, because of their origin in equity, do not permit of a right to a jury trial, and that when a jury is used its verdict is only advisory. Consequently, the rule has been applied even in actions to recover moneys, not in specie, but obligated under general contractual liability. The leading case is Clark v. Mosher (107 N. Y. 118), an authority of long and unquestioned standing (see, e.g., Bata v. Bata, 306 N. Y. 96, 100). There the disputed moneys had been paid into court, and the dispute was between interpleaded defendants. It was held that the proceeding was in the nature of an equitable one for interpleader in which there was no right to a jury trial. Observing that the original cause of action may have been at law, the court said (p. 122): “Neither party had any right of action at law against the other, but by this equitable proceeding, authorized by the Code, the Insurance Company, against whom both claimed a legal cause of action, was discharged, and they were brought together to litigate the question which of them had the better right to the fund in controversy. No right of trial by jury ever existed in such a case.” (Accord, Zies v. New York Life Ins. Co., 237 App. Div. 367, 371; see 2 Weinstein-Korn-Miller, N. Y. Civ. Prac., par. 1006.11; 4 id., pars. 4101.01-4101.12, esp. 4101.12 ; 5 Carmody-Wait, New York Practice, Interpleader, § 46, p. 238; Matter of Scharf, 178 Misc. 1012, 1014-1015 [Foley, S.].)
The fact that the money held in escrow was not paid into court but retained by the escrowee, coupled with a tender by the pleading to pay it into court, is of no consequence. CPLR *4021006, the general interpleader section expressly provides for snch alternative (id., snbd. [g]). The escrowee merely stands in place of the court so long as the court or the interpleaded parties permit him. The same practice was authorized under the Civil Practice Act (§ 286, subd. 2; see 2 Weinstein-KornMiller, N. Y. Civ. Prac., par. 1006.15).
Matter of Garfield (14 N Y 2d 251) is not applicable. There the problem was whether the creation of a new and optional forum to establish a claim to a debt available at law and enforcible only by a general money judgment would deprive the defender against such a claim of Iris right to a jury trial. This case does not involve a new forum or optional proceeding. Moreover, a specific fund is involved, the claims to which in the present posture of that fund are not adjudicable at law, and which must result in a judgment not enforcible as a money judgment by general execution.
The conclusion is supported by the statutory language and structure and the nature of the remedies provided; it is not necessary, therefore, to resort to the tortuous historical basis of interpleader as a ground for denying a right to a jury trial, albeit that too is available, as the treatises establish.
Accordingly, I dissent and vote to reverse and deny the consolidated. motions to strike the action from the nonjury calendar and to place it on the jury calendar.
Boteix, P. J., Valen te and Eager, JJ., concur with Stevexs, J.; Breitel, J., dissents in opinion.
Order, entered on October 9,1964, affirmed, with $30 costs and disbursements to respondents.