text:
    Humbert vs. McKay and others.
    Upon a reference to a master to ascertain the rights to the surplus moneys on a sale of mortgaged premises, under the provisions of flic 13(>lh rule of the court of chancery, the party prosecuting the reference must produce before the master a certificate of the register, or clerk, with whom the re. port is filed and the surplus money deposited, showing that no notice of claim to such surplus was annexed to the report of sale, and that no claim to the same has been filed previous to the entry of the order of reference j or if claims have been filed, stating the names of the claimants, and of their solicitors, if any, and their places of residence.
    And before the master proceeds to make his report as to such surplus mo. neys, he should ascertain, by the proper certificate and other evidence, that all claimants and other proper parties have been notified or summoned to attend before him on such reference. And the fact that such certificate and evidence was produced before him should be stated in the report.
    An incumbrancer who has neglected to file a notice of his claim upon the surplus moneys, as prescribed by the 13-Gtb rule, may go before the master pending the reference as to such surplus and file his claim with him, duly verified; and he will then be entitled to bo hoard upon the reference, as to the validity of such claim, upon such equitable terms as to costs as the master shall direct.
    Parties and other claimants, upon a reference to a master to ascertain the rights to the surplus moneys upon a mortgage sale, must verify their claims in the same manner as creditors coming in under a decree are required to do; and the master may examine the claimants upon oath touching their respective claims.
    Where it appears from the masters report that the proceedings, upon the refer» ence as to surplus moneys were entirely ex parte, so that no person has a right to except to the report, the entry of an order nisi, to confirm the report, may be dispensed with ; and the special order of the'eourt to confirm the report, and to pay over the surplus moneys according to the report, may be entered together.
    But in all other cases, an order nisi to confirm the report must be first entered ; and a certificate of the register, or clerk, that such order has be. come absolute, must be produced upon the application to the court for an order to pay out such surplus moneys according to the report.
    In. all cases of special applications for orders to pay out moneys brought into court, the party applying must produce the certificate of the register, or clerk, with whom the money was deposited, showing the amount of the fund, and the way in which it is invested; and the claims, if any, which have been made thereon ; so that the proper order may bo entered to enable the applicant to obtain the fund.
    March 2.
    • This was an application on the part of N. S. Benton, one of the defendants in a foreclosure suit, for the surplus moneys arising from a sale of mortgaged premises upon a decree; under the act of the 14th of May, 1840, to reduce the expense of foreclosing mortgages in the court of chancery. The claimant obtained the usual order for a reference, on filing his claim to the surplus moneys in the office of the register where such monies were deposited, according to the provisions of the 136th rule as amended on the 3d of June, 1840. The master reported that the claimant had proved a lien upon the surplus moneys, by virtue of a judgment recovered against the mortgagor while he was the owner of the equity of redemption in the mortgaged premises, and that the claimant had made oath before him that the amount claimed as due on the judgment was actually due and unpaid. He further reported, that none of the other defendants had appeared in the cause, and that it did not appear to him that any other person had made or filed any claim to such surplus moneys or any part thereof. And that this claimant therefore had the prior and only lien thereon by virtue of his judgment; on which there was due for principal and interest a sum exceeding the amount of the surplus moneys paid into court.

      D. Burwell, for the claimant.
   The Chancellor.

The rule of this court has been substantially complied with in this case, except as to the production before the master of the proper evidence to show that no other claimant was entitled to notice of the hearing before him on the reference. The report states that it does not appear that any other person has made or filed any claim to the surplus moneys ; from which I infer that no evidence on that subject was produced before the master. But before the master proceeded in the reference, he should have required from the claimant affirmative evidence, by a certificate from the register with whom the report of the sale was filed and the surplus deposited, that there was no notice of claim to such surplus annexed to the master’s report of the sale, and that no other notice of claim thereto had been filed in his office previous to the entry of the order for a reference ; or if claims have been filed stating the names of the claimants, and of their solicitors, if any, and their respective places of residence. Every such claimant, as well as every defendant who has entered his appearance in the cause, is entitled to a summons to attend the master on the reference 5 to be served in the manner prescribed in the rule. The master, therefore, should ascertain, by the proper certificate and other evidence, that all proper parties and claimants have been duly notified or summoned to attend on the reference, before he proceeds to make an ex parte report upon the order of reference. And the fact that such evidence was produced before him, should be stated in his report.

Nor does the neglect of an incumbrancer to file his claim, before the entry of the order of reference, absolutely preclude him from making a claim to the surplus moneys on the reference ; although he may by such neglect lose his right to a summons to appear before the master. For if he comes in before the master pending the reference, and files a claim with him, duly verified, he has a right to be heard upon such claim ; upon such equitable terms, as to costs or otherwise, as the master shall think proper to impose upon him, if any of the other parties to the reference have been subjected to extra costs or otherwise prejudiced by his delay in filing his claim.

The master was right in this case in requiring the claimant to swear to the justice of his claim, and the amount actually due upon his judgment. This is a case coming within the spirit of the 105th rule, authorizing the master to examine a creditor coming in to claim before him, on oath. The principle of the decision of this court in Morris v. Mowatt and others, (4 Paige’s Rep. 142,) is therefore applicable to such cases ; and the practice stated by the court in that case should be adopted by the master upon references of that kind.

Where it appears from the master’s report that the proceedings before him have been entirely ex parte, so that no person has any right to except to the report, the expense and delay of a previous order of course to confirm the report nisi appears to be wholly unnecessary. It will not, therefore, be required in such cases, for the future; but the special order of the court for the confirmation of* the report, and for the payment of the surplus moneys to the parties entitled thereto, in conformity with such report, may be entered together. In all other cases, however, the order nisi to confirm the report must be entered ; so as to give to parties who have appeared before the master an opportunity to except. And a certificate, that such order has become absolute, must be produced to the court when the application is made for the order to pay over such surplus moneys, according to the rights of the parties as settled by the report of the master. In this, as in all other cases where an application is made to the court for the payment of moneys which are supposed to be in the hands or under the control of its officers, the party applying for payment must produce the certificate of the register, assistant register, or clerk, with whom the money was deposited, showing the amount of the fund, and the way in which it has been invested, together with the claims, if any, which have been made thereon ; so that the proper order may be made to enable the applicant to withdraw the money from the court.

In the present case an order may be entered for the payment of the whole of the surplus money to Mr. Benton, to be applied in part payment of the balance due on his judgment, and the taxable costs of the reference, &c. upon filing a certificate of the register that no claim to such surplus was annexed to the master’s report of sale, and that no other claim but the one upon which the order of reference was founded had been filed in his office previous to the entering of that order. But if any such claim had been filed it must be referred back to the master to review his report as to the surplus money, after summoning such other claimants before him upon the reference.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Seaman, executor, &c. vs. Hicks and others.
    Where an act of the legislature authorized the trustees of Brooklyn to make out and filo a permanent plan of the contemplated streets, &c. of that place, which was done accordingly, and the trustees afterwards, under another act authorizing them to open streets, laid out and opened a narrower street through the centre of one of the streets laid down upon the permanent plan, and assessed the land on each side thereof, within the bounds of the old street, for the benefit that the owners of such land would receive by the opening of such new street; Held, that the trustees had waived the right, if they ever possessed it, to take the lands thus assessed for the opening of the street, according to the original plan, without paying for buildings and improvements which had subsequently been erected and made upon the lands thus assessed.
    Whether the legislature is authorized to appropriate a piece of land which is only valuable for building purposes, for a street to be opened at some future time, and to be then paid for at the mere value of the land, and with, out compensating the owner for buildings erected thereon after such appropriation but before the land is taken and paid for-as a street, Qu&rc ?

    Whore land is sold by a master, under a decree of the court of chancery, the court will not compel the purchaser to complete his purchase when he will not obtain such an interest in the premises, and in the buildings thereon, as ho had a right to suppose, from the terms of the sale, he was buying when the property was struck off to him on his bid.
    And where a master sells properly, with buildings thereon, as and for a good title, if the corporation of the city or village in which the premises are situated has a right to take the land for a street at some future time without paying for tiio buildings, of which fact the purchaser was ignorant at the time of the sale, the court will not compel him to complete his purchase ; although the probability of the exercise of such right, by the corporation, is very remote.
    March 2.
    This case came before the court upon an appeal by J. H. Titus, from two orders of the vice chancellor of the first circuit; the one denying the appellant’s application to be discharged from his purchase of a lot in the city of Brooklyn, made at a master’s sale under the decree in this cause, and the other directing him to pay the balance of the purchase money, and complete his purchase. The premises in question consisted of a tract of land which was nearly covered with buildings, bounded one hundred and six feet on Everett-street, and ninety-two feet and eight inches on Fulton-street. And the objection made to the title was, that a part of the premises, on the westerly side of Everett-street, and about twenty-feet wide on Fulton-street, might be taken for the opening of Columbia-street, if that street should ever be opened in comformity to a map or plan of the village of Brooklyn, approved by the trustees, and filed with the clerk of the corporation in April, 1819; pursuant to the provisions of the last section of the act of 1816, incorporating that village. The purchaser, in his petition to be relieved from his purchase, slated that shortly after the sale he discovered, for the first time, that the lines of Columbia-street, as the same were laid down upon the map of April, 1819, would include a part of the premises, and that the opening of Columbia-street according to that map, would take nearly the whole of one of the brick stores fronting on Fulton-street, and a large portion of the brick stable in the rear of that store, on Everett-street. He further stated that the store and stable were erected on the premises long subsequent to the filing of the village map ; that many of the landholders in Brooklyn already contemplated the opening of Columbia-street, agreeably to the map, and that he believed it would ultimately be carried into effect; that the advocates of that measure claimed that the buildings which had been thus erected subsequent to the filing of the map, might be legally taken for the purpose of opening the street, without allowing the owner thereof any thing for the damage to the buildings ; and that he was advised by his counsel and believed that the completion of his purchase would probably involve him in a protracted and expensive litigation at some future day. On the part of the persons interested in the sale of the property, various affidavits, maps, diagrams, &c. were exhibited, to show that by the permanent grade adopted for Columbia-street, when it was opened upon Brooklyn Heights, and for the several streets crossing the same, which grade had been materially altered since the filing of the map and grades of the city under the act of April, 1816, it would be impracticable to carry out the original plan of opening-and continuing that street, down the hill, northwardly from Poplar-street to Fulton-street. And the proceedings of the corporation in 1824, for the opening of Everett-street from Doughty-street to Fulton, were also produced. By those proceedings, it appeared that this part of what was originally contained within the lines of Columbia-street, as laid down on the map of April, 1819, had been subsequently opened as a street of less width, leaving a portion of what was included in those lines upon each side of the new street as thus opened; which lands on each side of Everett-street were assessed for the benefits which the owners thereof would receive by the opening of the street of that width.

      Clarence D. Sackett, for the appellant.

      J. Dikeman & J. Maurice, for the respondents.
   The Chancellor.

The terms of sale show that the land was sold as and for a good title, except as to the incumbrance therein mentioned. The court therefore ought not to compel the purchaser to complete his purchase unless he would have obtained, under the master’s deed, such an interest both in the land and in the buildings thereon, as he was authorized to suppose he was buying when the property Was struck down to him upon his bid. And if the corporation of Brooklyn has a legal and constitutional right hereafter to take that part of the premises which was included within the original lines of Columbia-street, as laid down upon the map of April, 1819, without compensating the Owner for the destruction of the buildings thereon, the appellant’s application to be discharged from his purchase should have been granted. The existence of such a right in the corporation Would be a substantial injury to the value Of urban property situated as this was, and actually covered With valuable buildings ; although the probility that the right would ever be enforced, by an extension Of Columbia-street according, to the original plan of that part of the city, was very remote.

In the ordinary case of a base fee, determinable only upon the contingency of a single gentleman, far advanced in life, afterwards marrying and having issue, most persons might consider the happening of the event which was to divest the estate so improbable as to render such determinable fee substantially the same as an absolute indefeasible estate of inheritance in fee simple. For it might be considered as Wholly improbable that a bachelor of seventy, who in the prime of life had so far disregarded the teachings of wisdom as well as of nature as to continue in a state of celibacy, would at that advanced age not only be guilty of the extreme folly of contracting matrimony for the first time, but would also procreate heirs, to divest the estate determinable upon that event. But certainly no lawyer could for a moment suppose that a vendee, who had contracted for a good title, was bound to accept of an estate which depended upon a contingency of that nature; unless the fact was satisfactorily established that it was physically impossible that the event which was to determine the estate should ever happen. So in the case under consideration, although it is highly improbable that it can ever be for the interest of the city to make such a change in the present grade of the streets upon Brooklyn Heights as to render it practicable and expedient to continue Columbia-street northwardly from Poplar-street to the premises in question, according to the original plan of the trustees of the village .as delineated on their map, experience has so often shown that public bodies as well as individuals may depart from the path of true wisdom as to render it improper for the court, in such a case, to speculate upon the probability or improbability that the corporation of the city of Brooklyn may be induced to do it, at some future time, in relation to this extension of Columbia-street. It becomes absolutely necessary, therefore, that I should examine the question as to the existence of the supposed right of that corporation to take a part of the premises in question, for such an extension of Columbia-street, without paying to the owner of the land the damages which he will sustain by the destruction of buildings which shall have been erected thereon subsequent to the filing of the map of April, 1819.

In the case of the opening of Furman-street, (17 Wend. Rep. 649,) Mr. Justice Bronson came to the conclusion that the 18th section of the act of April, 1816, (Laws of N. Y. sess. 39th, ch. 95,) by necessary implication, deprived the owner of property, designated upon the permanent plan of the village as the intended site of a future street, of all claim to compensation for the removal or destruction of buildings which should be erected thereon subsequent to the filing of the map which the trustees were directed to make. Such may have been the intention of the legislature in relation to property which was so situated that the prospect of the opening of streets through the same, at some future time, and the immediate location of such streets according to a settled plan, would be of more actual benefit, to the owner of the residue of such land, than the present use of the part of the land thus appropriated for future streets would be worth for building purposes, or other permanent improvements; until it should become necessary to open the streets and pay the owner for the value of the land actually taken, without reference to such improvements. I think, however, the position cannot be maintained, that where an individual has a single vacant lot, in a city or village, which lot is of great value for building purposes and worth little or nothing for any other use, the legislature may authorize the corporation to appropriate such lot prospectively, to be opened and used as a street at its unimproved value, and to be paid for at some future period when the corporation shall think proper to order such street to be opened; thereby depriving the owner of the whole beneficial use of his lot, for an indefinite time, without any equivalent whatever for the damage he must sustain in consequence of being deprived of the power of building upon or otherwise improving the lot.

The papers before me on this appeal do not, however, show what was the situation of the lands between Doughty and Fulton-streets, at the time of the filing of the map of 1819, or whether the owner of the lands then included within the lines of Columbia-street as delineated on the map, was the owner of any other lands which might be greatly enhanced in value by this prospective location of the streets of the village. And as my decision in this case depends upon another, or rather a different question, it is not necessary that I should express any definitive opinion as to what would have been the rights of the corporation, as to the opening that part of Columbia-street without paying for buildings which had been erected upon the lands taken, if Everett-street had not been opened under the act of 1824.

But taking it for granted that the decision of the supreme court in the case of Furman-street was right, and that the same principle was originally applicable to the lands included within the lines of this part of Columbia-street, as laid down upon the trustees’ map, I think the act of April, 1824, (Laws of N. Y. 1824, p. 5, § 5,) and the laying out of Everett-street upon a part of the same land which was designated on the map as the location of Columbia-street, and the assessment of the residue of that land for the benefit which the owner thereof was to receive from this substituted street, was a complete abandonment of any right which the corporation previously had, to take the whole of that land for a future street without paying for any buildings which might be erected thereon subsequent to the filing of the map in 1819. The act of 1824 did not require the trustees, in the laying out of new streets, to confine themselves to the permanent plan adopted in the act of 1816 ; nor to make the streets of the same width as those which were laid down upon their map ; although it was unquestionably supposed by the legislature, and by the inhabitants who procured the passage of the act of 1824, that in laying out and opening new streets, the map and plan of the city would be adhered to except in cases where some good reason was found to exist for departing therefrom. I think, then, it may be fairly presumed from the facts before me, that at the time of the application for the opening of Everett-street, in the fall of 1824, it had been discover’d that the grade of the streets upon Brooklyn Heights would be such as to render it wholly inexpedient, if not practically impossible, to carry out the original plan of extending Columbia-street any further north than Poplar-street, on the brow of the hill. And that the trustees finding that a narrower street would be equally beneficial to the village, and to the owners of property who were to be benefitted by the opening of the street from Doughty to Fulton, abandoned the original plan to this extent, and laid out this new street as a substitute. When, therefore, this new street was laid out of this width, no one in his senses could for a moment have supposed that the trustees of the corporation intended to reserve the right of pulling" down any buildings which might be erected on the line thereof, without compensating the owners for their damages, if it should afterwards be deemed expedient to widen that street to the original lines of Columbia-street as laid down upon the map. The effect of such a reservation would indeed have been entirely destructive of the rights of the owners of property adjoining the new street. For, as at that time it could not have been used to any advantage whatever except for building purposes, if they could not build upon it without subjecting themselves to the risk of having their buildings destroyed without compensation whenever the corporation should think proper to widen the street, no valuable improvements would be made on either side of Everett-street. I am satisfied, therefore, that at the time of the master’s sale, no right to take the strip in question, on the west side of Everett-street, without paying for the buildings as well as the land, existed in the corporation of Brooklyn; and that the purchaser would have obtained, under the master’s deed, the same beneficial interest in the property which he expected to purchase when he made his bid.

The orders appealed from must, therefore, be affirmed with costs. And the appellant must pay the interest on the purchase money, as the damages which the respondents have sustained by the delay and vexation caused by these appeals. The proceedings are to be remitted to the vice chancellor ; to the end that he may cause the orders appealed from, as well as this decree of affirmance, to be carried into effect.


text:
    Holley and wife vs. Glover and others.
    Where a party to a decretal order of reference wishes to obtain an order from the master to commit the prosecution of the reference to him, under the provisions of the 101st rule of the court of chancery, he must give to the solicitor of the adverse party notice of the application, and of the papers, &.c. upon which such application is to be founded.
    Or the party making the application, to have the prosecution of the order of reference committed to him, must deliver to the master the evidence of the neglect of the adverse party to prosecute the reference, and take out a summons thereon, for such adverse party to show cause why the prosecution of the reference should not ho taken from him and committed to the applicant. And upon the return of the summons the master must proceed to decide the question, after giving to the party summoned a reasonable time to answer the affidavits and other evidences of neglect upon which the application is founded, if copies thereof have not been served with the summons.
    Where the evidence of the neglect of a party to prosecute a reference with due diligence exists in the master’s office, the master’s certificate of the facts is sufficient whereon to found an order to commit the prosecution of the reference to another party. But tho party who has the prosecution of the reference is entitled to notice of what is intended to be used against him upon the application to commit the prosecution of the reference to the adverse party, to enable him to excuse or explain the supposed want of due diligence on his part.
    A party to a decretal order of reference who has not the prosecution thereof before the master, is not authorized to take out a general summons, to proceed in the reference, before he has obtained an order from the master committing the prosecution of the reference to him, as authorized by the 101st rule of the court of chancery.
    1841, March 2.
    This was an appeal from, an order of the vice chancellor of the first circuit, denying the application of the complainants to set aside an order made by master Moore to commit the prosecution of the reference to Samuel Glover, as the solicitor of Sarah Glover and Martha Glover two of the defendants. And the only question before the court was as to the proper mode of proceeding before the master to take from the complainants’ solicitor the prosecution of a decree, or reference, under the 101st rule of the court.

      E. Sandford, for the appellants.
    jS. Glover 4“ J- Blunt, for the respondents.
   The Chancellor.

By the former practice of this court the mode of proceeding to take from the complainants’ solicitor the prosecution of a decree in the master’s office and commit it to another party, was by a special application to the court founded upon affidavits and other papers showing the neglect of the party who had the carriage of the decree, to prosecute it with due diligence. And the party who had the prosecution of the decree was entitled to notice of such application and to a copy of the affidavits and other papers upon which the motion was founded, to enable him, if he could, to excuse or explain the supposed want of due diligence in prosecuting the reference. The substitution of the master for the court, by the 101st rule, was not intended to give to him an arbitrary discretion to commit the prosecution to another party whenever he supposed there had been a want of due diligence. But, as under the former practice, the party who has the prosecution of the reference has a right to be heard upon the application, and to know upon what affidavits or other evidence of neglect such application is to be founded ; so that he may adduce other affidavits or evidence in answer thereto.

The party therefore who wishes to obtain an order of the master, committing the prosecution of the reference to him, should give to the solicitor of the adverse party notice of the application, and of the papers, &c. upon which such application is to be founded j as in the ordinary case of a motion to the court. Or, what would be more in accordance with the usual mode of proceeding in the master’s office, he should deliver to the master the evidence of the neglect to prosecute the reference, and procure a summons for the adverse party, underwritten to show cause why the prosetion of the reference should not be taken from him and committed to the applicant. And upon the return of this Summons the master should proceed to decide the question ; after giving the party a reasonable time to answer the affidavits and other evidences of neglect upon which the application is founded, if copies of such affidavits, &c. have not been served with the summons. Where the evidence of the want of due diligence exists in the master’s office, the master’s certificate of the facts is all that is required. But the complainant is in all cases entitled to notice of what is intended to be used as evidence against him upon the application ; to give him an opportunity to excuse or explain the supposed want of due diligence on his part.

In the present case the taking out of a general summons, by the respondent’s solicitor, to proceed in the reference, before the prosecution of the decree had been committed to him, was entirely unauthorized, and against the settled practice of the court. And the notice of the application to take the prosecution of the decree from the complainants, not being founded on any evidence of negligence, and being objected to on that ground, the master was not authorized, upon the adjourned day, to take the prosecution of the decree from the complainants.

The decision of the vice chancellor must therefore be reversed, and the order of the master committing the prosecution of the decree to the respondents must be set aside as irregular.

As this, however, was an unsettled question of practice, arising under the recent rule of the court, I shall not charge the respondents with the costs, either of this appeal or of the original application to the vice chancellor to set aside the proceedings in the master’s office. The term of office of the master having expired, an order may be entered giving him six months further time to complete the reference ; with leave to any of the parties to apply to the vice chancellor, to whom the proceedings are to be remitted, for a further extension of that time if it shall become necessary.


text:
    Davenport & Kingman vs. The City Bank of Buffalo & Marcy, receiver, &c.
    Where the complainants loaned their note to the City Bank of Buffalo, to bo discounted in New-York for the benefit of the bank, and, to secure or indemnify the complainants, the cashier of the bank sealed up a package of its bills and left them in its vault, endorsing thereon that the package was intended as such security, but no entry of the transaction was made in the books of the bank, nor were the bills contained in the package charged as a part of the circulation of the institution ; Held, that the package con tinued under the absolute control of the officers of the bank, and that the complainants were not entitled to the bills, and had no lien thereon either legal or equitable. Held, however, that the bank was primarily liable for the payment of the note of the complainants, which had been discounted for its benefit, and that if they should be compelled to pay the same, they would have a valid claim against the funds of the bank, in the hands of the receiver, as creditors of the institution.
    Where the bills of a bank are legally pledged or hypothecated to secure a debt or demand, so as to authorize the pledgee to use such bills for his security or indemnity in case such debt or demand shall not be paid, such bills constitute a part of the bills of the bank issued and in circulation, within the intent and meaning of the statute limiting the amount of the issues of banks subject to the provisions of the safety fund acts.
    Where a receiver of a corporation has been appointed, under the provisions of the revised statutes relative to proceedings against corporations in equity, and its property and effects have thus become vested in him for the benefi t of the creditors and stockholders of the institution, the answer of the corporation cannot affect the property in the hands of such receiver, nor have any effect whatever in determining the right to the same.
    March 2.
    The bill in this cause wras filed for the purpose of obtaining a decree, against the receiver of the City Bank of Buffalo, to deliver to the. complainants a package of $6000 of the bills of the bank, under the following circumstances. In August, 1839, the cashier of the city bank applied to Kingman, one of the complainants, who were doing business under the name or firm of George Davenport & Co., and informed him that the bank had made an arrangement with the Bank of the State of New-York for a loan, upon the discount of business notes belonging to the City Bank payble at New-York, and requested the loan of the note of the complainants to the City Bank, to be discounted by the Bank of the State of New-York under such an arrangement. It was then agreed between Kingman and the cashier that the former should make -a note in the name of the firm of the complainants, for the sum of $5,500, payable to the order of Kingman, at the city of New-York, three months after date; which note should be endorsed by the payee and loaned to the City Bank to be thus discounted for its use. The note was made by the complainants, and endorsed by Kingman accordingly, and delivered to the cashier. He thereupon sealed up the package of $6000 in the bills of the City Bank, and left them in its vaults with the other bills of the bank which -were not issued and in circulation ; and the teller endorsed upon the package a memorandum, to the effect, that such package was intended to protect the complainants against any loss on their note of $5,500. But no entry was made of the transaction in the books of the bank; nor were the $6000 enclosed in the package entered on the books as a part of its bills which were then issued or in circulation. The note of the complainants was endorsed by the cashier and discounted by the Bank of the State of New-York for the use of the City Bank. When it became due it was duly protested for non payment; and it still remained unpaid in the Bank of the State of New-York as a valid claim against the City Bank as an endorser.
    S. Fitch Smith,,f'or the complainants.

      W. L. Morey, the receiver, in pro. per.
   The Chancellor.

If the object of the parties to this transaction was to commit a fraud upon the Bank of the State of New-York, by imposing upon the officers of that institution as business paper, to be discounted under the previous agreement, the mere accommodation notes of other persons which had been made and loaned to the City Bank, to enable its managers to raise the wind and keep up a false credit in the community, the complainants have no right to ask the aid of this court to relieve them from the consequences of such an act. (Bateman v. Ramsay, Sausse & Scully’s Rep. 459.) And the bill in this case distinctly states that Stringham the cashier, informed Kingman that the arrangement with the Bank of the State New-York was to discount business paper payable in the city of New-York, and that he wanted to borrow this accommodation note because the City Bank had not such business paper as was required by the terms of that arrangement.

Again 5 the arrangement of the cashier of the City Bank, by which the circulating notes of that institution were attempted to be hypothecated or pledged, for the security of the loan of this accommodation note, in such a manner that they should not appear upon the books of the bank, to be bills issued, or in circulation, was evidently made for the purpose of evading the statutory regulation limiting the amount of bills which the safety fund banks were authorized to issue and put in circulation. (See Laws of 1837, p. 515, § 3.) Where the bills of a bank are legally pledged, for the security of a debt or demand due to any other person or institution, so as to entitle the pledgee to hold and use such bills for his indemnity in case the debt is not paid, such bills .must be considered as issued and in circulation within the true intent and meaning of the statute limiting such issues ; as such bills are no longer under the control of the bank. Here, however, there was merely an attempt to evade the law, by making a mere fictitious hypothecation of the bills of the bank contained in this package, while the same . still remained under the absolute control of the institution, in its own vaults. And the complainants by such nominal hypothecation obtained neither a legal or equitable lien upon the bills contained in the package : even if the arrangement under which they were thus sealed up was made with the sanction of the directors of the bank, which is not pretended in this case.

The answer of the corporation, under its corporate seal, and after all its property and assets had been legally vested in the receiver, cannot effect, the decision of the question in this case. This is a controversy between the complainants and the receiver alonej the corporation being virtually dissolved by the appointment of such receiver, under the statute which substitutes him in the place of the corporation as to all the corporate property and effects.

It appears, however, in this case, that the City Bank has actually received the proceeds of the note of the complainants, which was discounted by and is now held by the Bank of the State of New-York as a valid claim against the asests of the City Bank in the hands of the receiver; as well as against the complainants, as the accommodation makers of such note. This, therefore, is a debt which in equity as well as at law, ought to have been paid by the City Bank, and which must be allowed as a valid claim upon the fund in the hands of the receiver, in favor of the institution which now holds the note, in settling the amount which is still due on account of the discounted notes. Instead, therefore, of dismissing the complainants’ bill, I shall direct an order to be entered thereon authorizing and requiring the receiver to deliver up that note to the complainants, when the balance for which it is now held shall he paid to the Bank of the State of New-York out of the fund in the hands of the receiver, or out of the safety fund; and if the complainants have paid the note pending this suit, or if they shall pay it before the final liquidation and settlement of the debts due from the City Bank, that he allow the amount of the principal and interest, thus paid, as a debt in their favor against the institution.

Such an order would have been made of course, upon a petition showing these facts. But as the complainants have filed their bill making a further claim upon this package of bills, upon which they had no valid claim either at ^aw or equity, they cannot be allowed their _costs in this Suit,


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    Wiggin vs. The Mayor, &c. of New-York.
    Where the proceedings for the opening of a street in the city of New-York have been regular, and the report of the commissioners of estimate and assessment has been duly confirmed by the supreme court, chancery cannot interfere to correct an error of the commissioners, in estimating the amount of damages for lands taken, or of benefit to lands not taken; or in neglecting to assess lands which will be benefitted by the improvement, and which ought to have been assessed.
    In opening streets in the city of New-York, where property is taken in which different persons have separate and distinct estates or interests, the proper mode of estimating the damage to the owners by the taking of the property, is to ascertain the damage to the fee of the lot, in the same manner as if one person only had the whole title or interest therein, and then to apportion the amount among the different persons interested in the lot, as landlord and tenant or otherwise, according as the interest of the one or the other will be affected by the taking of the land for the improvement.
    The twelfth section of the act of April, 1839, relative to the city of New-York, only requires that the costs and charges of the commissioners, attorney, counsel, &e. should be regularly taxed before they are paid to the persons who have performed the services; not that they shall be taxed before the assessment is made and confirmed; which from the nature of the proceedings cannot be done.
    The corporation of the city of New-York, as at present organized in two separate boards, under its amended charter of 1830, has the power to lay out new streets and to alter old ones, in that part of the city not embraced in the permanent plan of improvement.
    The corporation of New-York, for all legislative purposes, is convened in common council when the aldermen and assistants convene in their separate chambers; as directed by the act of 1830, amending the city . charter.
    The passing of an ordinance to authorize the opening of a new street or the alteration of an old one, under the 177th section of the act of April, 1813, to reduce the several laws relating particularly to the city of New-York into one act, is the exercise of a legislative and not of a judicial power.
    Where the proceedings of the common council of New-York in relation to the opening of a street are void in law, and such nullity appears upon the face of the proceedings themselves, a sale of the complainant's property Under such proceedings, will not cast such a cloud upon his title as to anthorize the court of chancery to interfere by injunction to stay the gale. A proceeding which upon its face is not only illegal but absolutely void, does not constitute a cloud upon the title to real estate, against which a court of equity will relieve.

      'it seems, that the provision in the act of April, 1830, relativo to city of NewTork, requiring the ayes and noes in certain cases to be taken and published, is merely directory; so far as relates to the publication.
    March 8.
    This was an application for an injunction to restrain the collection of an assessment for the widening, straightening and improving John-street, in the city of New-York, between Broadway and Pearl-street. From the bill it appeared that the ordinance of the common council authorising and directing this improvement, was passed in February, 2836 ; that shortly afterwards the supreme court appointed commissioners of estimate and assessment, who made their report in 1838, and the same was presented to that court for confirmation, but was afterwards sent back to the commissioners for revisal and correction j that the amended report was confirmed by the court in September, 1839 ; and that the order for the making of the improvement was carried into effect in May, 1840. The complainant charged in his bill, upon information derived from E, Merriam, that the ayes and noes were not called, upon the adoption of the resolution of the common council authorizing the making of the improvementj nor were the votes of the aldermen and assistants, and the report of the committee on streets, upon which the ordinance was founded, published in any of the newspapers employed by the corporation. Various objections were stated in the bill as to the equity and justice of the assessment upon property which was supposed by the commissioners to be benefitted by the improvement; which objections are noticed in the opinion of the court. The complainant also stated in his hill that the improvement was not within the part of the city as to which a permanent map and plan were required to be made by the commissioners, under the act of April, 1807, and he therefore insisted that the common council, as organized under the act of 1830 amending the charter of the city, had no jurisdiction or authority to widen or alter John-street.

      Ward Hunt fy L. H. Sandford, for the complainant.

      Peter A. Cowdrey, for the defendants.
   The Chancellor.

The language of the bill in this case leaves it doubtful whether the complainant, at this time, is the onwer of, or has any interest in any of the lots mentioned in the bill as having been assessed for this improvement. And so far as his personal liability is concerned, this court does not interfere to prevent a mere trespass upon personal rights, or personal estate, where the complainant has a perfect remedy at law. The bill, instead of alleging in the usual manner that the complainant was at a particular date and still is the owner of the lots upon which the assessment for benefit was imposed, merely states as to the first twelve lots that he was the owner and possessor thereof, on or before the first of September, 1836 ; and as to the other lots, he states that he was the owner and possessor of them subsequent to the 1st of May, 1839. Neither does the verification of the bill, by the complainant’s agent, show that the agent has any information on the subject; or that he even believes the complainant is now the owner of those lots. As this defect in the bill can probably be cured by an amendment, I shall proceed to examine the objections made to the legality and equity of the assessment; and the question whether the bill in other respects presents a proper case for the interference of this court by a preliminary injunction.

The objection that the delay of the corporation in bringing the proceedings to a close until the spring of 1840, produced injustice, by giving to the tenants of property which was to be taken for the improvement, and who had short leases thereof, compensation for a loss which they did not sustain, does not appear to be one which in any manner concerns this complainant. That appears to be a question entirely between the landlords and tenants of the property taken for the improvement. If the tenant has a beneficial lease, that is, if he has rented the property for a term of years at less than the use of the property was actually worth, he sustains damage by being deprived of the occupancy at this low rent during the remainder of his term. But that damage must necessarily go to diminish the amount which the landlord would have been entitled to receive if the property had not been under a lease; or had the rent reserved upon the lease been the full value of the use of the lot. The proper way of assessing the damages where two or more persons have distinct interests ©r estates in property taken for the improvement, is to ascertain the damage to the whole fee of the lot in the same manner as if one person alone had the entire interest therein ; and then to apportion the amount among the persons interested in the lot, as landlord and tenant, or otherwise, acccording as the interest of the one or the other will be affected by the taking of the property for the improvement. In such a case, where a tenant had a lease of the property for four or five years at a nominal rent, he would be entitled to damage for taking such interest in the property if it was taken immediately. But in that case the commissioners would not allow any thing to the landlord on account of the loss of rent for the same time. And where in a case of that kind the apportionment had been made upon an estimate that the proceedings would probably be completed at the expiration of a year, so that the tenant would be dispossessed at that time, if by any unforeseen occurrence the completion of the proceedings were procrastinated till the expiration of the lease, the landlord would sustain the whole damage by the taking of the property, and the tenant nothing. But the amount of the assessment for benefit upon the property of other persons would not thereby he increased. For the benefit to their property, from the making of the improvement, would commence as soon as they were compelled to pay the assessment imposed therefor. In the case of Gillespy v. The Mayor, &c. of New- York, in the court for the correction of errors, in December, 1839, (23 Wend. Rep. 643,) I had occasion to examine the whole of the statutory provisions on the subject of the apportionment of rent and damages as between landlord and tenant, where a part of the property is taken for an improvement during the continuance of the lease. And from that examination I am satisfied, that if the commissioners of estimate and assessment made xheir assessment in this case upon correct principles, in relation to the rights of the lessees and owners of the leasehold property taken for the street, the delay in completing the proceedings could not injure this complainant, so as to give him any equitable rights even as against the tenants themselves; whatever equitable claim their landlords may have against them on that account.

I am inclined to think the commissioners erred in not assessing the property at the corner of William-street in the same manner as if the contemplated widening of that street, which was subsequently abandoned, had never been thought of i as that improvement had not been directed when these commissioners were appointed to assess the damages and benefits with reference to the widening of John-street metely. But if there was any error in this respect, it was a proper ground for opposing the confirmation of the report before the supreme court, and cannot he reviewed in this collateral manner. In the case of Messerole v. The Mayor, &c. of Brooklyn, (8 Paige's Rep. 198,) referred to on the argument, the commissioners had not erred in judgment as to what property was to he benefited by the contemplated improvement and neglected to assess it on that ground. But they had by mistake left out the greatest portion of the lands which were to be taken from the complainants for the contemplated avenue. And the report showed upon its face that the court had no jurisdiction or authority to confirm the assessment ; according to the decision of the supreme court in the case of Jinthony-street, (20 Wend. 618.) There the court held that if the proceedings had been regular, and the commissioners had only erred in judgment in fixing the amount of the damage for the lands taken, or of the benefit to other lands of the complainant,upon erroneous principles, the court of chancery could not interfere after the report had been properly confirmed. In this case, if the front of the lots on William-street which were not assesssd would actually be benefitted by this improvement, the commissioners erred in judgment in not assessing for the benefit to the front as well as to the rear of the lots; and the confirmation of the report should have been opposed on that ground. But as that was not done, the confirmation of the report estopped the owners of other property which was assessed from alleging that the fronts on William-street would be benefitted by the improvement.

The same answer is applicable to the objection that $100 was included in the assessment for surveying and grading the triangle opposite to Cliff-street, under the resolution of May, 1837.

As the bill alleges that the costs of the proceedings have not yet been taxed, it cannot now be known whether the amount of the assessment will be more or less than the amount allowed for damages, and the costs and expenses of making the improvement. The mode of conducting these proceedings, as prescribed by law, is such that the assessments must be made and confirmed before the whole expense and costs of the proceedings can be ascertained.

The commissioners after having ascertained the damages for property taken must necessarily proceed upon mere estimates of some of the costs, &c. which will probably be incurred thereafter in completing the proceedings. A mistake of a few dollars, therefore, one way or the other, in estimating the amount of the expenses, cannot vitiate the whole assessment and take from the supreme court the power to confirm a report founded upon a reasonable estimate of the prospective costs. The act of the 20th of April, 1839, (Laws of 1839, p. 185, §§ 1, 2,) only requires the costs and charges of the commissioners, and attorney and counsel, &c. to be taxed before they are paid ; and not that they should be taxed before the assessment is made and confirmed ; as that could not be done. It is no objection, therefore, to the collection of the assessment, that those costs had not been taxed when this bill was filed.

The objection that the corporation, as at present organized, has not the right to lay out new streets or to alter old ones in that part of the city which wras not embraced in the permanent plan of improvements, adopted by the commissioners appointed under the act of the 3d of April, 1807, is one which, if well taken, would render the whole proceedings under the ordinance for the widening of John-street absolutely void. The power to open new streets or to alter old ones, in this part of the city, is claimed by the corporation under the second clause of the 177th section of the act of the 9th of April, 1813, to reduce the several laws relating particularly to the city of New-York into one act. (2 R. L. of 1813, p. 409.) J3y that clause the power was expressly given to the corporation, whenever and as often as it should in the opinion of the mayor, aldermen and commonalty, in common council convened, be necessary, or desirable for the public convenience or health, to lay out, form and open new streets, &c. in that part of the city ; or to extend, enlarge, straighten, alter, or otherwise improve, streets, &c. already laid out, or thereafter to be laid out.

It is not pretended that previous to the act of April, 1830, to amend the charter of the city of New-York, the corporation, when convened in common council under the charter and the laws then in force, would not have been authorized to pass an ordinance for the making of this improvement. But the act for the amendment of the city charter directs that neither the mayor nor the recorder shall be a member of the common council after the second Tuesday of May, 1831. It also vests the legislative power of the corporation in a board of aldermen and a board of assistants, who together are thereafter to form the common council of the city ; which boards are to meet in separate chambers, &c. And the complainant’s counsel, therefore, insist that the mayor, aldermen, and commonalty can no longer convene in common council, to direct the laying out a new street or the altering of an old one, as they were previously authorized to do, under the act of 1813.

The conclusive answer to this objection is, that the act of 1813 gives the power to the corporation of the city, when convened in common council according to the provisions of its charter, and not to the particular officers who at that time represented the corporation in common council. And the act of 1830 having excluded the mayor and recorder from the common council, and directed the aider-men and assistants to convene as a common council in two separate boards, u the mayor, aldermen and commonalty of the cityf that is, the corporation under its corporate name, is convened in common council, for all legislative purposes, when the two boards convene in different chambers, and pass a resolution or ordinance subject to the qualified veto of the mayor. The power to pass an ordinance authorizing the opening of a new street or the alteration of an old one, under the 177th section of the act of 1813, was strictly a legislative power given to the corporation, represented in its common council duly convened under its charter; as much as the passage of a statute by the state legislature, for the opening of a state road, or the alteration or enlargement of a canal, and appointing commissioners to appraise damages, &c. would be the exercise of a legislative power by the people of the state, represented in their senate and assembly. And this legislative powrer which still belongs to the mayor, aldermen and commonalty of the city of New-York, under the act of 1813 which is in full force, was properly exercised by the corporation convened in common council in the manner prescribed by the act of 1830.

Again if the complainant was right in supposing that the common council, as at present organized, had no authority to pass an ordinance for the widening of John-street, he is neither entitled to a preliminary injunction nor to any relief whatever in this court, as his defence is perfect at law. And if the whole proceedings in relation to the opening of that street were absolutely void in law, and that fact appears upon the face of the ordinance itself, a sale for the assessment upon the complainant’s lots would not even create a cloud upon his title. For as every person must be presumed to know the law, a proceeding which is upon its face not only illegal but absolutely void, does not constitute a cloud upon the title to real estate against which a court of equity will relieve.

This is also a sufficient answer to the objection that the ordinance was void becauseit appeared from the record that it was passed without calling for the ayes and noes upon the question of its adoption by the respective boards ; if that neglect was in point of law sufficient to invalidate such ordinance. It is not necessary, therefore, that I should express any opinion at this time upon the question whether the seventh section of the act of April, 1830, requiring the ayes and noes to be taken and published in certain cases, applies to this case ; or whether the last clause of that section applies merely to improvements which are to be paid for out of the funds of the corporation generally, or by a tax or assessment upon the citizens at large, and not to cases where the owners of property benefitted by the proposed improvement are to bear the whole expense thereof. As that question was not argued before me, I have not examined it. But if the provision is applicable to a case of this kind, I think it is merely directory as to the publication of the report and of the ayes and noes upon the question of the adoption of the ordinance for the proposed improvement. The neglect to make such publication did not therefore, of itself, render the proceedings void, if the ordinance was not void upon the face of the record of its adoption.

There is another substantial reason why this court should not interfere in this case by injunction to prevent the corporation from collecting the assessment, but should leave the complainant to his remedy, if he has any, at law. The

proceedings for the making of the improvement were commenced nearly five years since, and the complainant had waited until the improvement had actually been completed several months before he or his agent attempted to interfere. His property has received the full benefit that it could receive from the improvement; which benefit the commissioners have estimated at several thousand dollars. And as property of other persons to a very large amount has been destroyed for that purpose, justice requires that it should be paid for by those who have been benefitted by the improvement, rather than by a general tax upon the city at large. A court of equity, therefore, at this late day, will not interfere with its strong arm to cast the bur-then of the improvement from those who have been benefitted thereby, and upon those who have not.

It is true the complainant alleges in his bill that his property is not benefitted by the improvement. But that allegation is not sworn to by any one, and it is, of course, contradicted by the report, under oath, of the three very respectable and intelligent commissioners by whom the assessment was made.

The application for an injunction is therefore denied, with costs.


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    Newell vs. Newell.
    In a suit to annul a marriage on the ground of the physical incapacity of the defendant, if the answer admits the present incapacity, but denies that it existed at the time of the marriage, and the nature of the incapacity is such as to render a surgical examination of the defendant necessary, in connection with a personal examination on oath as to the commencement and progress of the disease which has created the incapacity, the court will direct the defendant to submit to such examination, although she has been previously examined ex parte and without oath by her own medical attendants.
    March 2.
    The bill in this cause was .filed by the husband, against his wife, to annul their marriage contract, on the ground of the physical incapacity of the wife. On the coming in of the answer, the complainant applied for an order, directing the defendant to submit to a surgical or medical examination j for the purpose of enabling him to satisfy the court of the existence of the alleged incapacity at the time of the marriage. The wife admitted her present incapacity for matrimonial intercourse ; but denied that any such incapacity existed at the time of her marriage. She also produced the certificate of two medical gentlemen, rvho had examined her recently, stating their belief that her incapacity had arisen since the marriage,

      M. T. Reynolds, for the complainant.

      Otis Allen, for the defendant.
   The Chancellor.

It is evident from the bill and answer and other papers before me, that justice to both parties requires that physicians of intelligence and skill, who by study or practice have made themselves well acquainted with the nature and progress of the disease which has caused the defendant’s present incapacity, should be permitted to examine her. And, under the peculiar circumstances of this case, the complainant ought not to be compelled to leave the decision of his cause to rest solely upon the ex parte examination made by the physicians who have been selected by the wife, for that purpose, without his knowledge or concurrence. The complainant should , also be permitted to avail himself of the answers of his wife, upon oath, as to the commencement and progress of the disease, to enable the professional witnesses to form correct opinions as to the probability or improbability of the existence of her physical incapacity at the time of the marriage.

The defendant must therefore submit to such an examination by one or more respectable gentlemen of the medical profession, who may be named for that purpose by the husband, with the sanction of the court. And if the complainant thinks proper to propound interrogatories to be answered by her in connection with such examination, she must answer such interrogatories on oath, to be taken before some proper officer; such interrogatories to be previously settled by a master. Such medical attendants as she may think proper to call in are also to be permitted to be present, at the time of her examination by the complainant’s professional witnesses.

As the defendant is now in Connecticut, and from the state of her health cannot reasonably be required to come here for examination, the complainant must procure the attendance of competent physicians from the neighborhood of her present residence, to make the examination; or must himself be at the expense of sending his professional witnesses from this state to where she now is, to examine her. The interrogatories to be propounded to her must be such only as relate to this alleged incapacity, and the commencement and progress of the disease by which it has probably been produced. And if the parties cannot agree upon the proper interrogatories, after having consulted with their physicians on the subject, the master in settling the interrogatories to be propounded to the defendant in connection with her examination by medical gentlemen, is to be at liberty to summon before him, and examine on oath, any physicians or surgeons 5 to enable him to decide what interrogatories may be necessary or proper to be allowed.

If the parties cannot make an amicable arrangement between themselves in relation to this professional examination, the court will make the necessary order in the premises 5 in accordance with these principles. The examination must be completed by the complainant within a reasonable time. And to compel a compliance with the order, on the part of the defendant, as she is not within the jurisdiction of this state, the allowance for her alimony must be suspended until she consents to the examination directed by the court.

To save any unnecessary wounding of the feelings of the defendant, in a matter which is the misfortune of both parties, and probably in a case where there was originally no fault on the part of either, it is recommended to them to agree upon some two or more skilful physicians and surgeons, to make the examination, and to settle the necessary interrogatories for the defendant to answer in connection with such examination. And a commission may then be issued to one of those gentlemen to take the defendant’s answers to the interrogatories, at the time of her personal examination.

Entry of the order is to be suspended, to enable the parties to comply with this suggestion.