Alcock v. Suydam, 68 N.Y. 397 (1877)

A strict bill of interpleader requires that two or more persons claim the same debt or duty from the plaintiff, the plaintiff has no beneficial interest in the subject of the claims, and the plaintiff cannot determine which claimant is entitled to the funds without hazard.

Summary

Suydam and others sought interpleader relief, claiming they were subject to conflicting claims from Alcock & Co. (for goods sold) and Leslie (holder of a draft). The court denied interpleader, holding that the claims were distinct and Suydam faced no genuine risk of double liability to the same claim. The court reasoned that Suydam’s liability to Alcock for goods sold was separate from their liability to Leslie on the draft. Therefore, an interpleader action was inappropriate. The complaint itself demonstrated that one claimant was clearly entitled to payment to the exclusion of the other.

Facts

Suydam purchased goods from Alcock & Co. It was arranged that Alcock & Co. would be paid via a draft drawn on the American Exchange, to be reimbursed by a draft drawn by the Exchange on Suydam. The American Exchange accepted Alcock & Co.’s draft, but the Exchange failed to pay. The American Exchange then transferred the draft it had drawn on Suydam to Leslie to apply to a pre-existing debt Leslie was owed by the Exchange. Both Alcock & Co. and Leslie sought payment from Suydam: Alcock & Co. for the price of the goods and Leslie on the draft accepted by Suydam.

Procedural History

Suydam filed an action of interpleader. The trial court’s decision is not specified. The Court of Appeals reviewed the case on appeal after a demurrer was filed against the complaint. The Court of Appeals affirmed the lower court’s judgment (presumably denying the interpleader).

Issue(s)

Whether Suydam, facing claims from Alcock & Co. for goods sold and from Leslie on a draft, met the requirements for an action of interpleader.

Holding

No, because the claims of Alcock & Co. and Leslie were not for the same debt or duty; Alcock & Co. claimed payment for goods sold, while Leslie claimed payment on a draft, and payment to one would not discharge liability to the other.

Court’s Reasoning

The court emphasized the requirements for a strict bill of interpleader: two or more persons must claim the same thing from the plaintiff, the plaintiff must have no beneficial interest in the subject of the claims, and the plaintiff must be unable to determine which claimant is entitled to the funds without hazard. The court found that Alcock & Co. and Leslie did not claim the same debt or duty. Alcock & Co. sought payment for goods sold, while Leslie claimed payment on a draft. Payment to one would not discharge Suydam’s liability to the other. The court also pointed out that based on the facts as alleged in the complaint, Suydam had a perfect defense against Leslie because Leslie was not a bona fide purchaser. The court reasoned that “[s]uch an action always supposes that the plaintiff is a mere stakeholder for one or the other of the defendants who claim the stake, and the case must be such that he can pay or deposit the money or property into court, and be absolutely discharged from all liability to either of the defendants, and thus pass utterly out of the controversy leaving that to proceed between the several claimants.” The court concluded that this was not a case for interpleader, as the hazard Suydam faced stemmed from the question of whether Mrs. Leslie was a bona fide holder of the draft. This question was a matter solely between them and her. If Leslie was not a bona fide holder, she could not recover, as the draft’s sole purpose was to put the American Exchange in funds to pay Alcock & Co.’s accepted draft, and it could not lawfully transfer this draft to Leslie to apply to a pre-existing debt.