Court Opinion

ID: 6467859
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:08:12.486325+00
Date Added: 2024-06-11T15:53:42.582490
License: Public Domain

OPINION OP THE COURT. BOBEBTS, C. J. (after stating the facts as above)- — The first alleged error is predicated upon the action of tho court in sustaining the demurrer to the answer and interpleader of 'the First National Bank of Albuquerque. As shown in the preceding statement of facts, one ground nil the demurrer was that the tender was insufficient to cover the full liability of the appellant bank to the appellee in the event the appellee should prevail. If the demu i'rer was well taken on this ground, no error was committed m sustaining it. In its complaint .the appellee set forth facts, which, if true, entitled it to recover not only the face value of. the cerüíieate of deposit and interest thereon from.July 47. 1911, to Juyl 17, 1912, but interest on said sum at the rate of 6 per cent, per annum from the time of its demand upon appellant bank for the payment thereof, which was July 17, 1912, to the time the same was actually paid or judgment therefor entered. If, in fact, appellee was lawfully entitled to the money, it was entitled to interest thereon from the time of its-demand upon t.lu bank for payment and its refusal‘to pay. and this, as a matter of law. At the time appellant filed its interpleader, if appellee was entitled to reeover3 there was due it from the appellant bank, as interest, more than -iUOO, not included within or provided for by the tender. If it succeeded in the action, the fund thus tendered would lie insufficient to pay the amount of the judgment to which it was entitled.  1 “The amount due cannot be the subject- of controversy in an interpleader suit, and this difference between the debt claimed by the defendant, and the sum which the plaintiff is willing to pay, presents an insuperable objection to its prosecution.” Baltimore & Ohio R. Co. v. Arthur, 90 N. Y. 234.  2 By its answer and interpleader the appellant bank sought to relieve itself from the liability which appellee was seeking to impose upon it by its complaint, by paying into court the amount of the fund, to the extent of its liability, and by bringing into court another claimant of the fund, compel the two claimants to litigate their rights at their own expense, and thus protect itself from all vexation and responsibility. But, in order for it to interplead, there must be no question as to the amount due, and where, as in this case,- the interpleader raised a question as to the amount which was the subject of the interpleader, by contradicting and taking issue with appellee’s complaint on this question, the interpleader was demurrable. “The rule is that when a question is raised as to the amount which is the subject of the interpleader such question prevents the right of the interpleader. The mere fact of there being a dispute as to the amount of the fund is alwaj^s fatal to the bill. Moore v. Usher, 7 Simon’s Rep. 384; Diplock v. Hammond, 28 Eng. L. & Eq. 202; President, etc., v. Bangs, 2 Paige (N. Y.) 570; Chamberlain v. O’Connor, 8 How. Prac. (N. Y.) 245.” Clasner v. Weisberg, 43 Mo. App. 214. Here appellant was asking that it be permitted to step out of the litigation, and that plaintiff be enjoined from prosecuting its suit against it, and this, in spite of the fact that appellee was claiming as against it a liability which it did not admit. In the case of Helene v. Corn Exchange Bank, et al., 96 App. Div. 392, 89 N Y. Supp. 310, almost the same identical question was presented. In that case the trial court sustained the motion for interpleader and permitted the bank to pay into court the amount of the deposit, with accrued interest thereon only to the time of demand, but did not require the payment of the-interest accruing as a matter of law after the demand made. The Court say: “The difficulty with the present order lies in the fact that the bank is not required to protect Wells to the full extent of his claim. If, when he made his demand upon, the bank for the payment of the money, he was entitled thereto, the bank was in duty bound to pay it to him, and by its refusal to pay it subjected itself to the payment of interest until it should comply with the demand. The judgment which Wells demands in his complaint is for the amount of the fund on deposit, with interest thereon from the 30th day of January, 1904, and, if entitled to the money, he is entitled to interest thereon as well as the principal, not as a matter of discretion, but as a matter of law. Mansfield v. New York Cent. & H. R. R. Co., 114 N. Y. 331, 21 N. E. 735, 1037, 4 L. R. A. 566. By the order of interpleader the bank is discharged upon paying over and depositing with the chamberlain of the city of New York the sum on deposit, $304.80, and no more. If Wells succeeds in the action, the fund thus directed to be deposited will be insufficient to pay the amount of the judgment to which he is entitled ,or to pay the amount which he was entitled to receive at the time the order directing the interpleader and the payment was made. The bank cannot be discharged from liability without paying the sum which the party is entitled to recover at the time when the order for interpleader is granted. This it has not been required to do.” See, also, Bridesburg Mfg. Co.’s Appeal, 106 Pa. 275.  3 N'o error was committed in sustaining the demurrer to the answer and interpleader; but, even if the demurrer had been erroneously sustained, appellant waived its interpleader when it answered to the merits. The general doctrine is that interpleader lies, “where two or more persons claim the same thing, under different titles, or in separate interests, from another person, who, not claiming any title or interest therein, and not knowing to which of the claimants he ought of right to render the duty claimed, or to deliver tire property claimed, is either molested by an action or actions brought against him, or fears he may suffer injury, from the conflicting claims of the parties against him. He therefore applies to a court of equity to- protect him, not only from being compelled to pay or deliver the thing claimed, to both claimants, but also from the vexation attending upon suits, which are, or possibly may be, instituted against him.” 2 Story’s Equity Jur., sec. 806; Burton v. Black, 32 Ga. 53. "it is * * * * of the essence of an interpleader suit that the” plaintiff shall be and continue "entirely indifferent between the conflicting claims” (11 Ency. Pl. & Pr. 455), and, "not only must he be disinterested when he brings his bill, but he must continue to be disinterested — • his position must be one of. ‘continuous impartiality.’” (Wing, Adm’r, v. Spaulding, et al., 64 vt. 83, 23 Atl. 615.) "All the text-writers agree that the first essential of a bill of interpleader is that the complainant must be a mere naked stakeholder without any interest in the fund, and without any controversy of his own to be settled in the cause” (Bridesburg Mfg. Co. Appeal, supra), and "an interpleader is allowed for the protection, of a defendant who admits that he has the subject of the action, and makes no claim to it himself and is ready and willing to pay or dispose of it as the court may direct, and says that a third party without collusion claims it. He cannot take issue with the plaintiff, and at the same time have the benefit of an interpleader. The two are inconsistent, and he must elect between them. He cannot have both. By filing his answer, the defendant in error waived and abandoned his interpleader.” Johnson v. Oliver, 51 Ohio St 6, 36 N. E. 458. In this case, after the demurrer had been sustained to its interpleader, the appellant bank, instead of standing upon its interpleader, asked leave to answer or further plead, and, pursuant 'to the leave granted it, laid aside the impartial attitude assumed in its inter-pleader and took up the cudgel for the board of regents. By its answer, it said in effect that the plaintiff had no right, title, or interest in or to the fund; denied that it was the owner thereof, or that it had any claim whatever upon the deposit; and alleged that the fund was the property of the intervening defendant and that it held the same subject to its order. When the appellant bank elected to litigate with the plaintiff, the question of-its right to the fund, and departed from its impartial attitude, theretofore assumed in its interpleader, it waived and abandoned its interpleader and cannot, in view of that fact, question the propriety of the court’s ruling thereon. Appellant’s next contention is that upon the appointment of the new board of regents, June 11, 1913, Vincent B. May ceased to be a member of the board of regents, and for the same reason ceased to be its secretary and treasurer or to have any power as such; his sole duty being to turn over the funds to his successor.  4 5 As to the first proposition it is sufficient to say that there is nothing in the record to show that the board of regents appointed June 11th qualified by taking the oath of office prescribed in section 1 of article XX of the Constitution, and it certainly could not be contended that the mere appointment or election of an official, without his qualification, would oust an incumbent from office. Appellants cite the cases of Conklin v. Cunningham, 7 N. M. 445, 38 Pac. 170 and Eldodt v. Territory, 10 N. M. 141, 61 Pac. 105, as sustaining the proposition that “the appointment of an officer b3 the Governor is complete on delivery of the commission, and gives the appointee prima facie title to the office,” but an examination of these cases will show that in each instance the officer demanding the office had qualified for the same, by giving bond where one was required and taking the oath of office. There is nothing in the record to show that the new board of regents attempted to act officially on any matter until July 5; 1913, or that the members thereof qualified as such before that date. But as we view the matter, it is immaterial as to the time of the qualification of the new board, for, in view of the provisions of section 3574, C. L. 1897, the treasurer of the board would still continue as such until the election and qualification of his successor, notwithstanding the fact that he had ceased to be a member of the board. This section provides for the election of a secretary and treasurer, and other officials, and continues, “all other officers so elected shall hold their offices until their successors are duly elected and quali- fied,” thus clearly providing against a vacancy in office. It is true, the secretary and treasurer, under the statute, must be, when elected, a member of the board of regents, but that his right to hold until the appointment and qualification of his successor is not dependent upon his continuing to be a member of the board is clear, otherwise the legislature would not have provided for his continuance in office until his successor was elected and qualified. The purpose of this provision was to guard against a vacancy in the office. Even without the statutory provision he would be continued in office by virtue of section 2, art. XX, of the Constitution, which provides: “Every officer, unless removed, shall hold his office until his successor has duly qualified.” Under this provision there can be no .doubt as to his right to hold the office until his successor has qualified. In this case the newly elected treasurer did not qualify until some time in August; consequently Ma3 was the treasurer of the board of regents on duty 5th, when he transferred the certificate of deposit in question. Even if it should be held that May had no right to hold the office of treasurer, after he ceased to be a member of the board of regents, his right to the office could not be questioned collateral^; it could be done only in a direct proceeding for that Durpose. Case, et al., v. State ex rel. Mann, 69 Ind. 46. He would be an officer de facto, and his acts, as it respects third persons, would be valid. McGregor v. Balch, 14 Vt. 428, 39 Am. Dec. 231. But it is contended that May, even while secretary and treasurer, had no power to transfer the certificate of deposit in question, because section 3553, C. L. 1897, provides all- “the disbursements and expenditures of all moneys provided for b3 this act, shall be vested in a board of five regents,” and b3 section 3556 it is provided ‘The board of regents shall direct the disposition of any moneys belonging to or appropriated to'the Agricultural College and Experiment Station established by this act;” but it is not contended in this case that the board of regents had directed the deposit of the money -in this case originally with the Bank of Commerce, or that it had ever attempted to provide for its disposition. Section 3574, C. L. 1897, provides: “The person so elected as secretary and treasurer shall, before entering upon the discharge of his duties as such, execute a good and sufficient bond to the Territory of New Mexico, with two or more sufficient sureties, residents of this Territory, in the penal sum of not less than twenty thousand dollars, conditioned for the faithful performance of his duties as such secretary and treasurer, and that he will faithfully account for and pay over to the person or persons entitled thereto all moneys which shall come into his hands as such officer,” etc.  6 In the absence of any direction from the board of regents, assuming for the sake of argument that the board had the power to direct and control the disposition, deposit or investment of the funds in the hands of the treasurer, it could hardly be contended that it was not the duty of the treasurer to safely preserve and keep such funds. This being true, he could deposit such funds in any bank he saw fit, or keep them in his own possession, liable of course at all times under his bond “to account for and pay over to the person or persons entitled thereto” such moneys.- Suppose that he should, in the absence of direction, deposit such funds in an insolvent bank and a loss should occur, would he not be liable nevertheless? Again, suppose he had distributed the funds among several banks, and he expected to be called upon by his successor, within the near future to turn over to him the moneys in his hands, would he not have the power to assemble the funds, to procure the actual cash, in order that he might turn it over to his successor ? In the present case, May could have been in an anomalous situation, should appellant’s contention be sound, if he had been required to account to his successor on the 5th day of July, and the incoming offigial had refused to accept as cash the certificate of deposit in question. The new treasurer had the right to demand that the •actual cash should be turned over to him. Now, if May did not have the authority to withdraw.the money from the First National Bank of Albuquerque, or to indorse the certificate of deposit, it would have been impossible for him to produce the money. The funds in question were placed in May’s hands by the Territorial officials. He took them under his official bond. He became absolutely responsible for these moneys, and so long as he accounted for the same and paid the money over to the person or persons entitled thereto.; as provided in his bond, he could deposit the fund with any bank or banks he desired. Maloy v. Board of Commissioners of Bernalillo County, 10 N. M. 638, 62 Pac. 1106, 52 L. R. A. 126. In the absence of direction from the board, •assuming its power to direct, May alone had the right to select a place of deposit. The fact that he deposited the money on time deposit, at 5 per cent interest, does not alter the case. The College received the benefit of the Interest accumulations. The certificate was payable to May. It was issued for his protection, so that he could •demand the money when he desired, and as evidence of the deposit. He had the right to transfer over the certificate •of deposit to the appellee, and the appellee was lawfully entitled to the money represented by such certificate at the time it demanded payment from the appellant bank. This being true, and payment having been refused, it was •entitled to interest thereon, under the statute at the rate •of 6 per centum per .annum. The newly appointed treas-. nrer, who had not qualified, had no right to interfere in the matter. When he was lawfully entitled to call the old treasurer to account, he could require him to pay over to him the actual cash represented by such certificate, or such as had not been lawfully paid out by May. In this ■case it is not contended that May was acting in bad faith, or that he was insolvent, or that his sureties were not amply able to respond for the full amount of the bond, or that airy attempt was made to defraud the College. The boarfl of regents joined in the appeal and adopted the assignments of error and brief filed by the appellant bank. What we have said has disposed of all the questions raised in the case, and further discussion as to the rights of the board is unnecessary. What might have become a serious question in this case,, had it been raised, is as to the right of the board of regents or the secretary and treasurer to the posession and control of moneys derived from the sale of lands granted to the Territory and confirmed to the State in view of the provisions of section 10 of the Enabling Act, which, it might be argued, makes the State Treasurer the custodian of such' fund, and charges him with the duty, subject to the approval of the Governor and Secretary of State, of investing the same in safe’ interest-bearing securities. Finding no error in the record, the judgment of the lower court is affirmed, and it is so ordered.