Opinion
Submitted June 14, 1881
Decided October 4, 1881
John M. Chipman for appellants.
Chas. H. Ribbel for respondent.
Where the object of two legal proceedings is the same, convenience as well as a proper regard for the rights of debtor and creditor require if possible that the fund in which both are interested should be subjected to diminution by one litigation only, and the parties themselves spared the unnecessary labor and expense of conducting two controversies over the same matter. It would seem also that if both tribunals, whose interference has been invoked, have equal or concurrent jurisdiction, it should continue to be exercised by that one whose process was first issued. ( Rogers v. King, 8 Pai. 210; Groshon v. Lyon, 16 Barb. 461; Travis v. Myers, 67 N.Y. 542.) It is well settled that to secure this end an order may be made by the Supreme Court restraining proceedings in all but one action, whether they are pending in that court or before other tribunals, as in Rogers v. King ( supra), where one creditor was proceeding against an executor in chancery and another by citation before the surrogate, each calling for an account; or in Travis v. Myers ( supra), where several actions were pending in the Supreme Court against an assignee for the benefit of creditors for an accounting and settlement of the trust. But in these and other cases where the question has arisen, it appeared that the action was brought in behalf of others having an interest in the fund, and not in behalf of the plaintiff alone. This fact was in the cases cited by the respondent. ( Travis v. Myers, supra; Innes v. Lansing, 7 Pai. 583 Kerr v. Blodgett, 48 N.Y. 65.) In Rogers v. King ( supra), they were actually brought in as defendants, and in Groshon v. Lyon ( supra), they had appeared by counsel and contested the account. Where the complaint is so framed and the subsequent proceedings conform to the practice of the court, such other parties, whether they come in or not, will be bound by the judgment or other act of the court ( Hallett v. Hallett, 2 Pai. 19; Egberts v. Wood, 3 id. 520); but not otherwise. Indeed, the order or decree of September 24, directing the reference in this case, proceeds upon the same theory. It requires the notice which is to bring in the creditors of the assignor to be published as required by section 786 of the Code of Civil Procedure. But that section only authorizes the publication of such a notice when an action is brought for the collective benefit of the creditors of a person or an estate, or for the benefit of a person or persons other than the plaintiff who will come in and contribute to the expense of the action. It is plain that this is not such an action. No creditor would be bound by the judgment rendered, nor could the purpose of the proceeding before the County Court be effected in the action. The decision upon the accounting should be final. Under the petition of the creditors all parties interested in the fund, including the sureties of the assignee, would be bound. Under any judgment which could be rendered in the action no one save the parties thereto would be affected. As to the general jurisdiction of the court below over the trust created by the assignment we have no doubt. It possesses the power of a court of equity, and in this respect the jurisdiction of the County Court is concurrent with it, but not exclusive. (Laws of 1877, chap. 466, § 25.)
It is not necessary to consider whether the plaintiff could in any event maintain an action for his own discharge from liability as surety, without making all the creditors who are interested in the fund, for the due accumulation and distribution of which he is liable, parties to the action by name; nor whether his relation to them grows out of a common interest; for he has not professed to bring the action in their behalf. It is obvious, however, that his interest is served by relieving the assignee from liability, while that of the creditors will be promoted by requiring a rigid performance of duty not only in regard to the fund in hand, but for any "sum which might or ought to have been collected by him." (Laws of 1877, supra, § 23.) In such a case, they would seem to be entitled to an opportunity of being heard concerning every step in the proceeding. But for reasons before stated, we think the appellants were in no sense parties to the action, and that the Superior Court of Buffalo had no jurisdiction over them.
The orders of the Special and General Terms appealed from should be reversed, and motion for injunction denied, with costs.
All concur.
Ordered accordingly.