text:
    Bloomer vs. Sherman.
    Where a matter in difference between parties is submitted by them to arbitration, by their mutual bonds, and a particular time is specified in the bonds within which the award is to be made and ready to be delivered to the parties, a subsequent written agreement enlarging the time for making the award is valid, although not under seal; and an award made within such extended time will be as decisive of the rights of the parties, as if it had been made within the time originally specified in the condition of the bonds. But an action will not lie upon the bond itself, if the award is not made within the time specified in the condition of such bond.
    The twenty-third section of the title of the revised statutes relative to arbitrations, which deprives a party to a submission of the right to revoke the power of the arbitrators, after the case is heard and finally submitted to them for their decision, applies to all cases of submission to arbitration; whether the parties have or have not agreed in their submission that a judgment shall be entered on the award which is to be made in pursuance of such submission.
    Where, by the terms of a submission to arbitration, the award is to be attested by a subsisting witness, or is required to be made by the arbitrators in any other particular form, the award is not made, and ready to be delivered to the parties, until such form is complied with.
    This was an appeal from a decree of the vice chancellor of the first circuit. The bill was filed for an account and settlement of a special partnership transaction between the parties. To this bill, the defendant pleaded, that difficulties having arisen between the parties relative to such partnership and the settlement thereof, they entered into bonds to submit all questions touching their partnership connection to three arbitrators, with power to decide all their partnership matters as fully as a court of chancery could decide the same; so that the award of the arbitrators be made in writing, subscribed by each of them, a ndattested by a subscribing witness, ready to be delivered to the parties on or before the 10th of February, 1835; that on the 26th of January, in the same yeai", the arbitrators were duly sworn; that on the 9th of February, the time for healing the parties and making the award not being deemed sufficient by such parties, the complainant and defendant endorsed an agreement on the bonds of submission, whereby they agreed that the time for rendering the award of thé arbU trators should be extended to the 19th of February, 1835 \ which agreement was signed by the complainant and after-Wards sealed by the defendant; that the arbitrators having taken upon themselves the burthen of the award, and having weighed and considered the allegations, vouchers and proofs of the parties, and the case having been finally submitted to the arbitrators for their decision thereon, on the eleventh of February, 1835, they did unanimously make their award in writing, under their hands, and duly subscribed by each of them ; and which award was afterwards, on the 16th of February, duly attested by a subscribing witness and ready to be delivered to the parties, (setting out the award at length,) although the complainant, on the 14th of February, after the cause was finally submitted to the arbitrators for their decision therein, delivered to the said arbitrators an instrument under his hand and seal, purporting to be a revocation of the powers of the arbitrators.
    The vice chancellor decided that the time for making the award was duly extended, by the agreement of the 9th of February, to the 19th of the same month ; that the revocation of the powers of the arbitrators, by one of the parties; after the cause had been finally submitted to them for a decision upon a hearing of the parties, was invalid under the provision of the revised statutes relative to arbitrators; and that the award, which was completed by the attestation of the subscribing witness after such attempted revocation, was valid, and was a bar to this suit for the same matters. He therefore allowed the plea, with costs; from which decision thé complainant appealed to the chancellor.

      S. Sherwood, for the complainant.
    S. P. Hall, for the defendant;
   The Chancellor.

There is no doubt that a submission to arbitrators, by bond, may be enlarged by an agreement not tinder seal. The only doubt that has ever arisen, in cases of this kind, has been whether an action of debt upon the pen-ally of the bond could be sustained, where the award had not been made within the time limited for that purpose by the condition of the bond itself, but where such time was extended by a subsequent agreement of the parties. In the courts of this state, it has been determined that an action of debt upon the bond itself could not be maintained, whether the subsequent agreement extending the time for making the award was under seal, or otherwise; but that the party injured by the breach of the agreement, or the non-performance of the award, must seek his remedy by a suit upon the submission implied in the new agreement, taken in connection with the bond, or by an action upon the award made in pursuance of such submission. (Freeman v. Adams, 9 John. Rep. 115. Myers v. Dixon, 2 Hall’s Sup. C. Rep. 456.) But in England, it has been decided, after a full investigation of the subject, that if the agreement to extend the time is under seal, an action of debt upon the original bond will lie, upon showing that the condition thereof was varied by the obligor, by an instrument under seal. The previous decision of the court of king’s bench, in Brown v. Goodman, (3 T. R. 592, n.,) which was supposed to settle this question differently, was founded upon the fact that it did not appear, from the declaration in that case, that the agreement to extend the time was under seal. (See Greig v. Talbot, 3 Dowl. & Ryl. Rep. 446.) The only question in these cases related to the form of action, which was to be brought upon the agreement as modified by the extension of the time originally allowed for making the award, and not whether an award made in conformity to the agreement as thus modified was valid. No court has ever suggested any doubt on that subject. (See Watson on Arb. 87.)

There is no foundation for the objection, that the agreement extending the time, was only an agreement to extend the time for delivering the award, after it was made and ready to be delivered to the parties. Extending the time for rendering the award of the arbitrators, in this case, from the 10th to the 19th of February, meant an extension of the time limited by the condition of the bond for making the award and having it ready to be delivered to the parties, in the form prescribed. And the original bond and this new agreement, taken together, must bear the same construction, for the purpose of deciding the question as tq the validity of the award, as if the latter date had been originally inserted in the bonds of submission.

The revocation of the powers of the arbitrators, by the complainant, was delivered to them two days before the award was attested by the subscribing witness, as required by the agreement of submission. The award was not therefore complete, and ready to be delivered to the parties, at the time of such revocation, although the cause had been finally submitted to the arbitrators for their decision thereon, and their award had been made out and signed by them before the revocation. The attestation of the subscribing witness was necessary to the completion of the award, before it was ready to be delivered, according to the agreement of the parties in their submission. For where, by the terms of the submission, the award is to be made in a particular form, the award is not made and ready for delivery until all the forms are complied with. (Stanton v. Henry, 11 John. Rep. 133. Wilson v. Constable, 1 Lutw. 199. Thaire v. Thaire, Palm. Rep. 109,112.) It becomes necessary, therefore, to inquire whether this is a ease which comes within that provision of the revised statutes, which deprives a party to a submisson of the right to revoke the powers of the arbitrators, after the cause has been fully heard before them, and finally submitted to them for their decision thereon. (2 R. S. 544, § 23.)

It is insisted, by the complainant’s counsel, that none of the provisions of the revised statutes relative to arbitrations are applicable to any submission to arbitration, except in those cases where the parties have, in their submission, agreed that a judgment shall be entered, in a summary manner, upon the award which may be made in pursuance of such submission. But until the intimation of a contrary opinion by some of the members of the court for the correction of errors, in a recent case before that court, I had never entertained a doubt that the three last sections of that title of the revised statutes, as well as some of the previous provisions, were intended by the revisers, and by the legislature, to apply to every case of a submission to arbitration; whether the parties had or had not inserted a provision in their agreement of submission, that a summary judgment might be entered upon the award of the arbitrators. The language of the first section of the statute is that the parties may, not that they shall agree that a judgment of a court of law and of record shall be entered upon the award. And whenever such an agreement is contained in the submission, then the provisions of the eighth, and of the thirteen succeeding sections, relative to the summary proceedings in the court of law, are applicable to the case. But I can hardly suppose that the legislature intended to leave every other submission to arbitration wholly unprotected by the valuable provisions of this title; many of which are equally applicable to every case of a submission to arbitrators. Independent of the fifth and sixth sections of this title, there is no authority to issue a subpoena for a witness to attend before arbitrators, or to administer an oath to a witness if he thinks proper to attend voluntarily ; as the former statutory provisions on this subject, and which applied to all cases of submission to arbitration, are repealed. (See 1 R. L. of 1813, p. 399, § 28. Laws of 1816, p. 242, § 1. Laws of 1324, p. 285, § 11.) The language of the twenty-third section of the present statute, (2 R. S. 544,) is certainly broad enough to cover this case. It is,66 whenever any submission to arbitration shall be revoked by a party thereto before the publication of an award, the party so revoking shall be liable to an action by the adverse party, to recover all the costs, expenses and damages which he may have incurred in preparing for such arbitration. But neither party shall have power to revoke the powers of the arbitrators, after the cause shall have been finally submitted to them, upon a hearing of the parties, for their decision.’5 It may also be proper to add that it appears from the revisers’ note to the first clause of this section, that it was intended to establish the rule of law as laid down by the supreme court in Allen v. Watson, (16 John. Rep. 205;) which was not a case of a submission under an agreement that it should be made a role of court. The last clause of this section was not reported by the revisers, but was inserted by the legislature in the passage of this title through the two houses, for the purpose, undoubtedly, of guarding a person who had submitted his cause to arbitration, against the manifest injustice of having the submission revoked by his adversary, after the probable result of the arbitration had been ascertained, but before the necessary forms could be complied with to render the award binding upon the parties.

The case now under consideration shows the injustice of such a proceeding. It appears, by the plea, that this award was actually drawn up and signed by the arbitrators, as early as the eleventh of February, but that by the terms of the submission, it was necessary that there should be a subscribing witness to the award. This circumstance had probably been overlooked by the arbitrators ; and in consequence of this omission the complainant, three days afterwards, tendered a formal revocation of the powers of the arbitrators, for the purpose of defeating the whole proceeding. And he would have succeeded in obtaining his object, had it not been for this provision of the revised statutes, although the.formal defect was discovered and corrected within the time allowed for making the award.

As the question arising under this particular section of the revised statutes was not actually passed upon by the court for the correction of errors, and there was no argument before the court in reference to the construction of any of the provisions of the title relative to arbitrators, I do not consider the decision of that court, in the case of Wells v. Lain, as decisive of the question under consideration here. I shall, therefore, adopt the conclusion at which the vice chancellor arrived, that this provision of the revised statutes is applicable to the present case, and that the attempted revocation of the complainant was a nullity, at the time it was made ; and shall leave the appellant to carry the case to the court of dernier resort, if he is not satisfied with this decision.

The decree of the vice chancellor is affirmed, with costs,


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Dewall and wife vs. Covenhoven.
    The wife, by her next friend, may file a bill against her husband, or against her husband and a third person, to protect her separate estate, or to prevent her husband and others from depriving her of a support out of property which belongs to her in equity, although the husband has the right at law to sue for and control such property.
    But where a bill is filed by the husband, in the name of himself and wife, for the recovery of her property, it is his suit, and if he releases to the defendant the demand for which the suit was brought, the suit cannot be continued in the name of the husband and wife, but must be dismissed. And if the execution of such release was a fraud upon the rights of the wife, she must commence a new suit, by her next friend.
    A bill filed by the husband, in the name-of himself and wife, although for a claim in right of his wife, is considered as the bill of the husband. If he dies before a decree in the cause, the widow may proceed in the suit, or not, at her election; and if she refuses to proceed, she is not liable for costs.
    The bill in this cause was filed for the purpose of recovering certain property which, as was alleged, the defendant held in trust for the wife and children of the complainant DewalL and which had been given by the father of his wife for their support. The defendant pleaded that subsequent to the commencement of the suit, the complainant Dewall, in consideration of the sum of $100, freely and absolutely released and discharged the defendant of, and from all demands which the said Dewall had or could have, or which he and his wife had or could have against the defendant, for any cause whatever : a copy of which release, under the hand and seal of the complainant Dewall, was set out at large in the plea.

      G. B. Judd, for the complainants.

      Daniel Cady, for the defendant.
   The Chancellor.

The question whether the release of the husband is a complete and effectual bar to the equitable rights of the wife and her children, in a case like the present, does not properly arise upon this plea. So far as the rights of the husband are concerned, he has an unquestionable authority to release and discharge them; and he is estopped, by his deed, from insisting, in a suit prosecuted' by himself, that the release executed by him was a fraud upon the equitable rights of his wife and children. If the allegations in this bill are true, the children of the complainants, as well as their mother, are interested in the alleged trust, and are necessary parties.

The wife, by her next friend, may file a bill against her husband, or against her husband and a third person, to protect her separate estate, or to prevent her husband and others, from depriving her of her equitable provision for a support out of property which belongs to her in equity, although the husband has, at law, the legal right to sue for and control it. But a bill filed in this court, in the name of the husband and wife, is in fact the bill of the husband. (Pawlet v. Delaval, 2 Ves. sen. 666. Griffith v. Hood, Idem, 452.) If the husband dies before a'decree in the cause, she may proceed in the suit, or not, at her election. And if she refuses to proceed, she is not liable for costs. (Breedon v. Vaughan, 2 Dickens, 566. Mitf. Pl., 4 Lond. ed. 59.) This being the husband’s suit, he had a right to release it, so far as to bar the further prosecution of the suit in his name. And if that release was a fraud upon the rights of the wife, she must institute a new suit, against her husband and the present defendant, by some responsible person as her next friend, to set aside the release, and to obtain her rights. The plea is allowed, and the bill must be dismissed: but without prejudice to the rights of the wife, if she has any.


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    Hallett vs. Thompson and others.
    Where a legacy was bequeathed absolutely to the legatee, but by the will the executors were directed to retain it in their hands and put it on interest, and to pay the annual interest to the legatee for life, unless he should by a legal written instrument require the payment of the principal of the legacy to himself, in which case the whole was to be paid to him; with power to the legatee to dispose of the legacy by will if he did not receive it in his lifetime, and to be paid to his heirs if he did not receive it himself, or' dispose of it by his will at his death; and the testatrix, by her will, declared that neither the legacy nor the interest thereof should be liable to any of the creditors of the legatee, for the payment of his debts; Held, that the absolute power of the legatee to compel a payment of the legacy to himself, was such a beneficial power as would pass to his assignees under the title of the revised statutes relative to the assignment of the estates of non-resident, absconding, insolvent or imprisoned debtors; and that the legacy might be reached by a creditor’s bill, and applied in satisfaction of a judgment against the legatee.
    In analogy to the provisions of the revised statutes authorizing the creation of a trust to receive the rents and profits of real estate, and to apply them to the use of the cestui que trust, for life or any shorter period, so as to place the interest of the cestui que trust beyond the reach of creditors, except as to the surplus of such rents and profits beyond what is necessary for his support and maintenance, a valid trust of personal property may be-created, to apply the income thereof to the use of the cestui que trust in the same manner, so that his interest in the trust property will be placed beyond the reach of his creditors, to the same extent.
    But to protect the interest of a cestui que trust in personal property from the reach of his creditors, so far as the same is necessary for his support and maintenance, the trust must be of such a nature that the interest of the cestui que trust in the trust property is inalienable, during his life, or so long as the trust continues ; and the exception in the 38th section of the title of the revised statutes relative to the court of chancery, only applies to trusts of that description.
    This suit was brought by a judgment creditor, for the-recovery of his debt, after the return of an execution unsatisfied. The bill was filed against Thompson, the judgment debtor, and against the executors of Mary Burling, deceased, to obtain satisfaction of the judgment out of a legacy given by the testatrix to Thompson, by a bequest in the following words: “ I give and bequeath unto my friend Jeremiah Thompson, of the city of New-York, the sum of $4000; which sum Í nevertheless order my executors to retain in their hands and put at iris terest, and pay the interest thereof yearly to the said Jeremiah, during his natural life, unless the said Jeremiah shall, during his life, by an instrument in writing, under his hand and seal, require the payment of the said legacy to himself; and in that case I order my executors to pay it over to the said Jeremiah, with all interest due thereon. But in the event of the death of the said Jeremiah without receiving said legacy as aforesaid, I then, order the same to be paid and applied by my executors as the said Jeremiah shall by his last will and testament direct ; or if he die without a will, then my executors are directed to pay the same to his heirs at law; hereby declaring that neither the aforesaid legacy to the said Jeremiah Thompson, or any interest thereof, shall in any case be liable to any of his creditors, for the payment of any debt owing by him.” The complainant prayed that Thompson might be decreed to execute such an instrument as was required by the will, to obtain a payment of the legacy from the executors, and that the complainant’s judgment might be paid otit of the principal and interest of such legacy. The defendant Thompson put in a general demurrer to the bill for want of equity.

      D. B. Tallmadge, for the complainant.
    The power of the court of chancery, in aid of executions at law, is not limited to trusts which the defendant himself has created by means of his own property. And the interest of Thompson in this legacy is such a beneficial interest as would pass to an assignee of the cestui que trust under the insolvent act, and can therefore be reached in equity by a creditor. It is not a trust, but an absolute bequest of $4000 to the defendant; and the restriction in the will as to creditors is void.

      D. Lord, jun., for the defendant Thompson.
    The legacy in question is a trust for the personal benefit of Thompson, as a mere benevolence of the testatrix, and not subject to the claims of his creditors, by the plain words and clear intent of the will. It is a trust of personalty, derived from a person other than the debtor, and therefore cannot be reached by a creditor’s bill. (2 R. S. 174, § 38.) The trust in favor of Thompson is merely a trust power, and therefore not liable to creditors, unless he does some act to draw forth the fund from the hands of the executors."
   The Chancellor.

The legacy in this case Is perfectly under the control of Thompson, the legatee, so that he may obtain payment thereof whenever he pleases. This power to ■compel payment of the legacy is a beneficial power in the legatee, which would pass to the assignees under the English bankruptcy or insolvency acts. It would also pass to the assignee of Thompson under an assignment by virtue of the title of the revised statutes relative to the assignment of the estates of non-resident, absconding, insolvent or imprisoned debtors. (1 R. S. 735, § 104.) In Graves V. Dolphin, (1 Sim. Rep. 66,) Sir John Leach held that an annuity given by a father to his son, passed under an assignment of the commissioners in bankruptcy, although the estate upon which 4he annuity was charged was in the hands of trustees ; and the testator had expressly declared, in his will, that the annuity was given for the personal maintenance and support of his son, during the whole term of his natural life, not liable for his ■debts, nor subject to any charges or encumbrances of his; that It should bs paid into his hands only; and that his receipt alone should be a good and sufficient discharge for the same. His honor said the testator might have made the annuity determinable upon the bankruptcy of his son, but that the policy of the law did not permit property to be so limited that it should continue in the enjoyment of the bankrupt, notwithstanding his bankruptcy. A similar decision was made by Lord Eldon in Brandon v. Robinson, (18 Ves. Rep. 428.) The master of the rolls decided the same point, in favor of an assignee under the insolvent debtor’s act, in the case of Green v. Spicer, (1 Russ, & Mylne’s Rep. 395,) although the trustee, in that case, had a discretion as to the time and manner of applying the rents and profits of the trust property to the support and maintenance of the cestui que trust; the whole beneficial interest in the rents and profits being vested in such cestui que trust. (See also Pierey v. Roberts, 1 Mylne & Keen’s Rep. 4.)

Independent of any statutory provisions, therefore, 1 have no doubt that it would be competent for this court, and would also be the imperative duty of the court, to compel the defendant Thompson to execute this beneficial trust power, so as to enable the complainant to obtain payment of the legacy; to be applied in satisfaction of his judgment, as far as it would go.

As a general- rule, it is contrary to sound public policy to permit a person to have the absolute and uncontrolled ownership of property for his own purposes, and to be able at the same time to keep it from his honest creditors. The revised statutes have made one exception to this rule, to the extent of a provision for education and necessary maintenance merely. But in that case the beneficial owner is himself deprived of the power of aliening or encumbering the property, or his interest in the rents and profits, as cestui que trust; and the surplus income, beyond what is necessary for his support and maintenance, is in equity subjected to the claims of his creditors. (1 R. S. 729, § 57; 730, § 63.) The provisions of the revised statutes on this subject, contained in the 57th and 63d sections of the article relative to uses and trusts, in the connection in which they are there found, are applicable to trusts to receive rents and profits of real estate, and to apply them to the use of the cestui que trust for life, or a shorter period. But courts of justice have always endeavored to preserve the analogy between estates or interests in land, or the income thereof, and similar interests in personal property. By analogy therefore to these rules as to the interest of a cestui que trust in the rents and profits of real estate, and the right of a judgment creditor, to reach the surplus rents and profits of land beyond what is necessary for the support and maintenance of the debtor and his family, I feel myself bound to hold that a creditor’s bill will reach a similar interest of the debtor in the surplus income of personal property, held by another for his use and benefit; but it cannot reach that part of the income of personal property, held upon such a trust, which may be necessary for the support of the judgment debtor.

The exception contained in the last clause of the 38th section, of the title of the revised statutes relative to the court of chancery, (2 R. S. 174,) was unquestionably intended by the legislature to protect the beneficial interest of the cestui que trust, in trusts of this description, and in such only, to the extent of a fair support and maintenance out of the trust property which had been thus invested in trust by some other person, for his benefit. But the case which is now under consideration does not come within this class of trusts. It is very obvious, from the terms in which the bequest was made, that the object of the testatrix was not to secure to the legatee a support and maintenance out of the interest, or income, of a trust fund, which should be inalienable by the cestui que trust, in analogy to the provision before referred to in relation to a similar trust to receive the rents of real estate for the same object On the contrary, it was an attempt to give to the legatee an absolute and uncontrollable interest in personal estate, and at the same time to prevent its being subject to the usual incidents of such an absolute right to property, so far as the rights of creditors are concerned. This cannot be done, consistently with public policy, or the settled rules of law. If such a principle was once sanctioned by this court, it would only be necessary for a testator to direct his executors to turn bis real estate into money and hold the same subject to the control of the legatee, io defeat entirely the benefit which was intended to be secured to creditors, by the 57th section of the statute before referred to, out of the surplus income of the estate.

The complainant is entitled to have the $4000 in the hands of the executors applied in satisfaction of his judgment; and the demurrer must be overruled, with costs.


text:
    Mitchell and others vs. Blain and others.
    Under the provisions of the revised statutes, giving to a post-testamentary child the same portion of the real and personal estate of the father as would have descended or have been distributed to such child if the father had died intestate, all the devisees and legatees must contribute rateably, in proportion to the value of the real or personal estate devised or bequeathed to them respectively, to make up the distributive share of such post-testamentary child. And in making such contribution, no distinction is to be made between specific, general and residuary legatees; but each legacy is to abate rateably, in proportion to its amount, or value.
    Even a legacy given to the widow of the testator in lieu of dower, must be taken into account in estimating the amoimt which the other legatees are bound to contribute, to make up the share of a post-testamentary child in the estate of the father. But as between the widow and such child, the latter cannot take a child’s portion of the real estate discharged of the widow’s right of dower, and also a rateable proportion of a legacy given by the testator to the widow, in lieu of such dower.
    Where a bill was filed by a general and specific legatee, and by a post-testamentary child, against the executors and the residuary legatees, for the purpose of obtaining the direction of the court as to the manner in which the distributive share of the post-testamentary child, in the personal estate of the testator, was to be apportioned among the several legatees, the court directed the costs of the suit to be borne rateably, by the several parties interested in such personal estate.
    The solicitor for a defendant, or for the guardian ad litem of an infant, who neglects to attend to the rights of his client upon the hearing of the cause, is not entitled to costs on such hearing, although he has a decree for his general costs in the cause.
    The bill in this cause was filed for an account and distribution of the personal estate of Joseph Hunt, deceased, under his will; and to obtain the direction of the court as to the manner in which the share of a post-testamentary child of the testator should be apportioned between the specific, general, and residuary, legatees under the will. At the time of making the will, in September, 1831, and at the time of the testator’s death, in September, 1832, he had a wife and one child living, and the descendants of two- other children. By his will the decedent disposed of his personal estate as follows: To his widow the interest of $4000, for life, and a horse arid two cows and a pleasure carriage and harness ; to his granddaughter, Letitia Smith, a legacy of $500, and to the Baptist church in Romulus $100 j and the residue to his son Peter, for life, with remainder to his children. After the making of the will, and before his death, the testator had another child; which child was not mentioned in the will, nor provided for in any other way. The widow and three other persons were named as executrix and executors, and proved the will. The widow afterwards intermarried with J. Mitchell. And the bill was filed by her and her husband, and by Dolly Hunt, the post-testamentary child, against the other executors and legatees named in the will, and against the children of Peter Hunt the legatee of the residue for life. The complainants insisted, by their bill, that the widow was entitled to the whole interest for life on the sum of $4000, as the same was bequeathed to her by the testator; and that the post-testamentory child was entitled to one equal fourth part of the estate, after the payment of debts, legacies and expenses, and one fourth part of the $4000, after the death of the mother. Letitia Smith and the children of Peter Hunt, being infants, put in a general answer by their guardians ad litem; and the Baptist church suffered the bill to be taken as confessed. The executors, and Peter Hunt the residuary legatee for life, by their answers, admitted the facts stated in the bill; but they insisted that the legacy to the widow must contribute rateably towards the portion of the estate which was to be set apart for the-post-testamentary child, and that such child was only entitled to such share of the estate as she would have received, if her father had died intestate, leaving a widow and four children, including herself. The cause was heard ex parte, the counsel for the defendants and for the guardians ad litem, neglecting to appear and argue on their part.

      J. Rhoades, for the complainants.
   The Chancellor.

By the provision of the revised statutes, on this subject, it is very evident that the post-test amentary child is only entitled to one fourth of two thirds of the testator’s personal estate, after payment of debts and funeral expenses, and the expenses of administration. The statute declares that every such child shall succeed to the same portion of the father’s real and personal estate, as would have descended or been distributed to such child, if the father had died intestate. (2 R. S. 65, § 49.) The infant complainant in this case is therefore entitled to one fourth of the real estate, subject to the mother’s right of dower therein; and to one fourth of two thirds of the personal estate, which is the share she would have been entitled to, under the statute of distributions, if her father had died intestate.

The statute also provides that such after-born child shall be entitled to recover his or her share or portion of the estate, from the devisees and legatees, in proportion to and out of the parts devised and bequeathed to them by the will. No distinction whatever is made, in this statutory provision, between specific, general and residuary legatees; and I am satisfied none was intended by the legislature. It was not intended to disturb the arrangement which the testator had made in the disposition of his property, among the several objects of his bounty', except so far as to compel each to contribute rateably, out of that which he would be entitled to according to the will, for the purpose of making up the distributive share of the post-testamentary child. The legacies must therefore abate rateably, in proportion to their amount and value; so that the residuary legatee shall only pay his rateable proportion, with the general and specific legatees. Even a legacy given in lieu of dower must be taken into account, in estimating the amount which other legatees are bound to contribute; although, as between the widow and such after-born child, the latter could not equitably insist upon a right to take a share of the real estate, discharged of the widow’s claim of dower, and also to have a rateable proportion of the legacy which had been given by the testator, in lieu of such dower-.

By allowing to the infant complainant one fourth of two . thirds of the $4000, upon which Mrs. Mitchell is entitled to the interest for life; and giving to her the interest only upon the other five sixths of that sum, a proper apportionment will be made of that part of the personal estate of the testator, both as to Mrs. Mitchell’s life estate in the" interest, and as to the reversion or remainder, after her death, which belongs to the residuary legatees. The specific legacy to the widow must also contribute, in proportion to its value at the death of the testator; and she must pay to the infant complainant one sixth of such value. The legacies to Letitia Smith, and to the church, must likewise be reduced one sixth, and the general residue of the estate must contribute in the same proportion.

. A decree must be entered, declaring the rights of the parties accordingly; and, if any of the parties think it necessary, a reference must be directed, to take an account of the estate, and of the amount due to each of the legatees, and to the infant complainant, upon the principles above stated; allowing interest, after the expiration of one year from the death of the testator, as shall be equitable. As the complainants’ construction of the statute is not sustained by the court, it would be unreasonable and inequitable to charge the costs of this suit wholly upon the residuary interest, which belongs to Peter Hunt for life, and to his infant children, after his death. The costs must therefore be borne rateably by all the parties, in proportion to their several interests in the personal estate of the testator. But the solicitors who have neglected to attend to the rights of their clients, on the hearing, are not to be allowed any costs upon the ex parte argument by the complainants' counsel.


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    Chance vs. Isaacs & Smyth.
    Where C. received a negotiable note from I., payable at a future day, which he endorsed and passed away in the ordinary course of business, and £» held two negotiable notes against C. for about the same amount, which were payable a short time after the note which he had originally given to C. became due; and before any of the notes became due, I. became insolvent and made an assignment for the benefit of his creditors, which assignment included C.’s notes, which were endorsed and transferred to the assignee, and C. was afterwards compelled, as endorser, to pay and take up the note originally given to him by £.; Held, that C. could not in equity offset the note so taken up by him against his own notes in the hands of the assignee. Miter, if C. had been the owner and holder of I.’s note at the time of the assignment for the benefit of his creditors; as the circumstance of the note not being due would not have impaired C.’s equitable right to a set-off in such a case.
    This was an appeal from a decree of the vice chancellor of the first circuit. The facts, as they appeared from the bill and answer, were as follows : The defendant Isaacs, in September, 1833, being indebted to the complainant in the sum of $687,28, gave to him a negotiable note for that amount, payable four months after date; which note the complainant, soon after, endorsed and transferred to a third person, in the ordinary course of business. Sometime afterwards the complainant became indebted to Isaacs in about the sum of $700, for which he gave him two promissory notes, payable at four and six months. A few days before the note of Isaacs fell due, he became insolvent and made an assignment of his property to the defendant Smyth, for the benefit of his creditors, including the two notes of the complainant. When the note given to the complainant fell due, it was protested for non-payment, and the complainant, as the endorser, was obliged to pay and take it up. He therefore filed his bill in this cause to restrain the defendant Smyth from parting with the two notes given to Isaacs, and to have the note of Isaacs offset. The vice chancellor decided that the offset could not be allowed, as the creditors, under the assignment, had acquired an interest in the notes of the complainant before the note given to, and endorsed by him, had been protested for non-payment and taken up by him. The bill was therefore dismissed, with costs.

      S. Stevens 8f J. Edwards, for the appellant.
    If Isaacs still had possession of the two notes given by the complainant, his insolvency would be a sufficient ground for this court to grant the relief prayed for by this bill. (Lindsay v. Jackson & McJimpsey, 2 Paige’s Rep. 581.) Equity and justice require that Isaacs should not be permitted to negotiate the notes which he holds against the complainant, and thereby compel him to pay them, when he owes the complainant nearly the same amount which he is unable to pay.
    The defendant Smyth stands in no other or better situation than Isaacs. If Smyth is to be deemed as representing the creditors of Isaacs, then those creditors cannot resist an equity in this case which could be enforced against Isaacs. They stand in his place. If these notes had been assigned directly to a creditor, in payment of a precedent debt, there being no new consideration, such creditor would not be deemed a bona fide holder of the notes; and the complainant’s equity being prior, would prevail. (Rosa v. Brotherson, 10 Wend. R. 85.) That the assignment is in effect to all the creditors of Isaacs, cannot take the case out of the above principle. It appears, by the assignment and schedules annexed, that Smyth, the assignee, was fully apprised of all these facts at the time he took this assignment. The knowledge of Smyth is knowledge to those for whom he received the assignment. Such a transaction by an individual creditor would have been deemed a fraud upon the complainant. Is the character of the transaction altered by Smyth’s taking the assignment for all the creditors ?

      J. Rhoades, for the respondents.
    The assignment from Isaacs to Smyth was valid at law and in equity. The notes from Chance to Isaacs were in terms embraced in it, and passed by it to Smyth before the note from Isaacs to Chance became due and payable, and at a time too, when, by the complainant’s own showing, he was not the holder or owner of that note.
    The complainant has not renounced or disclaimed any interest in the assigned property. By not doing so, he has vir-

      tually and by implication sanctioned the trust. He ought id have disavowed the proceeding before he filed his bill. An essential to a right of set-off (mutuality of indebtedness) did not exist between Isaacs and Chance at the time of the assignment of the notes of Chance to Smith. (Miller v. The Receiver of the Franklin Bank, 1 Paiges Rep. 445.) The effect of the doctrine contended for by the complainant would be to enable creditors of the insolvent, in every case of assignment, where their claims were greater than their indebtedness, to insist on a set-off to the full extent of such indebtedness, and then to come in rateably with other creditors upon the assigned fund, for the balance due or to become due to them.
    The decree of the vice chancellor was correct, and should be affirmed, with costs; but in no event should Smyth be personally charged with the complainant’s costs, or his own, as he is clearly litigating in good faith, and in discharge of a duty which he owes to others.
   The Chancellor.

It is now well settled that a person who receives a negotiable promissory note from the payee, out of the usual course of business, or in security for an antecedent debt, and not for a present consideration, such as the payment of money, the delivery of goods, or the relinquishment of an existing security, takes it subject to all the equities which existed against it in the hands of the former holder. And this principle applies with peculiar force to the voluntary assignee of an insolvent debtor, who receives negotiable paper from the assignor, under a general assignment for the benefit of creditors. In the present case, therefore, if the complainant had been the holder and owner of the note of Isaacs at the time this assignment was made, I should have no hesitation in declaring that Smyth took the assignment of the complainant’s two notes, subject to the equitable right of the latter to have the note given to himself set-off against them. Although this note was not due at the time of the assignment, yet, as it would become due long before the complainant’s notes were payable, an equitable right of set-off would have then existed, which it would have been unsonscientious on the part of Isaacs to deprive him of, by assigning the complainant’s notes to other creditors. I think the principle of the case of Lindsay v. Jackson McJimpsey, (2 Paige’s Rep. 581,) would have sustained an equitable set-off in such a case, where the assignor was insolvent, although neither of the notes had become due at the time of the assignment. The assignment is dated the 30th of January; but as the defendants, in their answer, have sworn it was made on the 18th, and the complainant has thought proper to. go to hearing on bill and answer, without giving them an. opportunity to prove that fact, this allegation in the answer must, for the purposes of this suit, be taken to be true, however imbrobable it may appear to be. And as this note did not belong to the complainant at the time of the assignment, although he was contingently liable for the payment thereof, I am satisfied the vice chancellor was right in supposing that no equitable right of set-off then existed which attached to the complainant’s notes, in the hands of the assignee. There were neither mutual debts, nor mutual credits which by the efflux of time would necessarily ripen into mutual debts, existing between Chance and Isaacs at the time of the assignment. In the case of Lindsay v. Jackson & McJimpseij there were mutual credits which would have formed proper subjects of set-off in bankruptcy, or under the insolvent acts. (Ex parte Prescott, 1 Atk. Rep. 230. Atkinson v. Elliott, 7 Term Rep. 378.) But, in a case similar to the one now under consideration, Lord Rosslyn decided that the endorser of a bill of exchange which was accepted by the bankrupt, and which had been taken up and paid by the endorser, subsequent to the act of bankruptcy, could not be set-off against a debt due from him to the bankrupt at the time of the issuing of the commission. (See Ex parte Hall, 3 Vesey’s Rep. 804.)

The decree of the vice chancellor must therefore be affirmed, with costs; but without prejudice to the complainant’s right of set-off at law, if the assignment was not in fact made, and accepted by Smyth, before the note endorsed by the complainant was paid and taken up by him as such endorser.


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    E. Wood and others vs. J. B. Wood & S. Wood.
    The law of the testator’s domicil governs the disposition of his personal estate, and his real estate which is situate where he is domiciled. And where the testator was a resident of the state of New-York at the time of his death, and by his will directed his personal property, and the proceeds of his real estate there situate, to be invested in real estate in the state of Ohio, upon trusts which were invalid by the laws of New-York; Held that the devise in trust was invalid, as it was inconsistent with the law of the testator’s domicil.
    Where the right or^interest of a cestui que trust in property which is to be invested in land upon trust to receive the rents and profits thereof for his use, is inalienable by the provision of the 63d section of the article of the revised statutes relative to uses and trusts, the trustee is not authorized, even with the assent of the cestui que trust and with the sanction of the court of chancery, to do any act which would be a virtual alienation of the trust fund directed to be so invested in trust. But where the fund is directed to be invested in the purchase of land in a particular place, upon such a trust, the court of chancery may, with the assent of all parties who have any interest in the trust fund, or in the lands to be purchased therewith, authorize it to be invested in the purchase of real estate in another place, upon the same trusts; and the chancellor, as the general guardian of infants who are interested in the trust fund, may assent to such change of investment in their behalf.
    Where a testamentary guardian holds a fund for the sole benefit of his wards, in his character of guardian, to be invested for their use, the court of chancery may change the investment from that which is directed by the testator, where it is for the benefit of the infants that such change should be made, even without the consent of such guardian.
    A devise of all the testator’s real and personal estate to a trustee, to be sold and converted into money, and to pay the widow an annuity out of the income of the mixed fund composed of the proceeds of the real and personal property, is not of itself suificient to show that the testator intended this provision for the widow to be in lieu of dower, so as to compel her to elect between such annuity and her dower in the real estate.
    Where the testator directed the investment of his estate in the purchase of lands for the benefit of his three infant children, upon an express trust to receive the rents and profits of their several shares thereof, for their use, until they should attain the age of twenty-one or twenty-two, in the discretion of the trustee, with cross-remainders between themselves if they died before they came into possession of their several shares without issue, and with remainder to their heirs of the blood of the testator, if they all died before that time without issue; Held, that the ultimate limitation over to their heirs was void, as being too remote.
    Where the testator directed his property to be invested in'the purchase of lands in the names of his children, but in trust for their testamentary guardian to receive the rents and profits for their use, after as well as before they arrived at the age of twenty-one, so long as he thought proper; Held, that such a trust was not authorized by the revised statutes ; that no estate or interest vested in the trustee; and that he held the fund as testamentary guardian merely.
    To enable a trustee to receive the rents and profits of lands for the use of another person, it is necessary that he should have the legal title to the land itself. And where the hind itself is vested in the person beneficially intorsted therein, a valid power in trust cannot be given to a trustee to receive the rents and profits of such land for the use of the person who holds the legal title of the land.
    A parent or guardian has the right to change the domicil of his child, or ward, provided such change is made in good faith ; subject, however, to the power of the court of chancery to prevent an improper removal of an infant out of the state.
    The court of chancery has power t,o restrain a parent or guardian from removing an infant out of the jurisdiction of the state; but it will not interfere with the natural right of a parent over his child, except in a very special case.
    Where a father appointed a testamentary guardian for his children, who were all under the age of seven, and directed the guardian to remove them to the state of Ohio, and to invest their property there upon certain trusts which were illegal by the laws of New-York, where the children were residing with their father at the time of his death, and the widow refused to go with them to the state of Ohio, and asked to have them remain with her in this state, the court restrained the guardian from taking the children from their mother, and removing them out of the state, until further order.
    An executor, or a trustee appointed by the will of a testator, is hound to carry into effect all the valid trusts of the will, unless he is excused from a strict performance by the parties interested therein; and with the sanction of the court of chancery, where the rights of infants are concerned.
    The bilí in this cause was filed on behalf of three infant children, by their next friend, against J. B. Wood, their uncle, the executor of their father and their testamentary guardian, to obtain a decree declaring the trusts of the will void, or that the fund directed to be invested in the state of Ohio might be invested for their benefit in this state; and to prevent such testamentary guardian from removing the complainants out of the jurisdiction of this court to the state of Ohio, The mother of the infants, who was entitled, under the will, to an interest in the testator’s property during her widowhood, was also made a party defendant. The cause was heard upon bill and answer. The facts in the case, upon which the next friend of the complainants asked for a decree in their favor, were substantially these: The father of the complainants formerly resided in the city of Albany, and his will was proved before the surrogate of Albany county, on the ground that the last place of residence of the testator was in that county. He died at the Havana, where he had gone for his health, in 1833 ; leaving a widow and three infant children, the complainants in this suit. The eldest of his children was then about six years of age, and all were under the age of seven at the time of filing the bill in this cause, The father of the complainants, at the time of his death, owned two building lots, in the city of Albany, worth about $1400; and he left personal estate, which was worth about $13,600 more than was required to pay his debts. By his will, made a short time before his death, he devised and bequeathed all his estate, real and personal, to his brother, the defendant, in trust, to sell and convert it into money, and out of the proceeds thereof to pay his debts and the expenses of administration, and the expense of removing the widow and children of the testator to the state of Ohio. Secondly, in'trust, to invest one third of the residue in the state of Ohio, in such manner as he should think proper, and to keep the same invested, and change the investments as the trustee should think proper during the widowhood of the testator’s wife; and to pay to her, semi-annually, at the house of the trustee in the state of. Ohio, during her widowhood, a sum equal to six per cent, per annum on such third of the estate; and in case of her re-marriage, to pay to her one third of that third, and to invest the other two thirds thereof in the purchase of lands for his children in the state of Ohio, as directed in the next clause of the will. Thirdly, to invest one other third of the estate, after paying debts, &c: in the purchase of lands in the state of Ohio, for the testator’s three children, in equal proportions, and to take the conveyances therefor in their names; and to sell the same and purchase other lands for them as often as he should deem it for their interest. Fourthly, he gave to the trustee, whom he appointed the testaméntary guardian of his children, the remaining third of his property, and the rents and profits of the real estate so to be purchased for them, during their respective minorities, for the purpose of enabling him to clothe, support and educate them, in the state of Ohio, in such manner as he should think proper, except that the boys should be-brought up and fitted for farmers. And the trustee and testamentary guardian was desired and directed, by the will, thus to clothe, support and educate them, in the state of Ohio. The testator further directed that his children should not be permitted to enter into the possession and enjoyment of the lands, to be purchased for them respectively, until they arrived at the age of txventy-two, unless the trustee should think proper to allow them, or either of them, to enter into the enjoyment therof before that time; and if either died without issue, before entering into the enjoyment of such lands, that then the lands, so to be purchased for him or her, by the trusee, should go to the survivors or survivor. 'And the testator further authorized the trustee to receive the rents and profits of the lands purchased for either of the said children, and to expend the same for the use of such child, even after he or she had arrived at the age of twenty-two, if in the judgment of the trustee that course should be deemed to be most for the happiness of such child. Fifthly, the testator devised the lands, so to be purchased for his children, to the heirs at law of his own blood, if all the children should die without issue. And he authorized the trustee, in case of his death, to bequeath all his trust powers and duties to the executor of such trustee™
    ,5. Taber, for the compainants.

      M. T. Reynolds, for the defendant J. B. Wood,
   The Chancellor.

Although the father of these complainants has made a most singular, and probably a very in- ■ discreet disposition of his property, considering the situation of his family and the tender ages of his children at the time of his death, I cannot perceive that the defendant, J. B. Wood, has done any thing, or has attempted, or even claimed the right to do any thing which he had not reason to believe it was his duty to do, as the executor of his brother and the testamentary guardian of the complainants, and as a faithfui trustee of the decedent's property, under the will. So fair as the trusts of a will are valid and consistent with the rules of law, the executor and trustee is bound to carry them into effect, whatever he may think of the wisdom of the testamentary disposition which the testator had thought proper to make of his property; unless he is excused from a literal performance of the trust, by the consent of all parties, either directly or indirectly interested in the execution thereof, and with the sanction of the court of chancery, where the rights and interests of infants or of married women are concerned. And where the right or interest of the cestui que trust in the trust property is rendered inalienable, by the provision contained in the sixty-third section of the article of the revised statutes relative to uses and trusts, the trustee cannot, even at the request of the persons beneficially interested, and with the assent of this court, do any act, or consent to any different disposition of the estate, which would be a virtual alienation of the property devised to him in trust. But where the testator has directed the trust fund to be invested in the purchase of land in a partiular place, and required the trustee to apply the rents and profits of such land for the use of the cestui que trust during his life, or for any shorter period, this court may, with the assent of all persons who have either vested or contingent interests in the fund or in the lands to be purchased therewith, authorize the trustee to invest the fund in lands or other real estate in another place, upon the same trusts. And if any of the persons who are thus interested are infants, and within the jurisdiction of this court, the chancellor may assent to such change of investment in their behalf. Also, where a testamentary guardian holds a fund for the benefit of infants, in his character of guardian merely, the court may change the investment from that which the testator has directed, even without the consent of such guardian, where it is manifestly for the benefit of the ward that such change should be made. It is necessary, therefore, to examine this will, for the purpose of ascertaining the validity of the several provisions thereof, and determining the nature and extent of the several interests of the parties to this suit, and of other persons, in the estate .of the decedent, under the will or otherwise.

Although the testator directs all his estate to be sold, and one third of the proceeds to be invested for the rase of his xvife during her widowhood, it does not appear, by any necessary implication from the xvill itself, that he intended this provision to be in lieu of dower in the real estate of xvhich he died seized. The xvidow is not therefore obliged to elect betxveen that provision and her dower. The question has frequently been discussed in the English court of chancery, how far and when a legacy or annuity to the wife, charged upon the real estate of the testator, is to be considered as a provision in lieu of doxver, and there have been many conflicting decisions on the subject. (See Arnold v. Kempstead, 2 Eden’s Rep. 237, note; and French v. Davies, 2 Ves.jun. 572.) Z am satisfied, however, from an examination of the American, as xvell as the English cases, that a devise of all the testator’s real and personal estate to trustees, to be converted into money, without any particular designation of the real property to be sold, and giving to the widow an annuity or other-provision out of such mixed fund, is not, of itself, sufficient to show that the testator intended that her interest in the land, as tenant in dower, should be sold as a part of the estate; so as to make it necessary ¿for the widow to elect between such dower and the provision contained in the will. The widow in the present case is therefore entitled to both.

Neither is it necessary that the widow should go to the state of Ohio with, her children, to entitle her to the six per cent, per annum on the amount of one-third of the property. The annuity is made payable at the house of the trustee in the state of Ohio; and if he resides in that state and has a dwelling house there, and has actually invested the third of the property, out of which her annuity is payable, in that state, as directed by the will, she must go there to receive the semiannual payments, or must employ an agent or attorney to receive the payments at the place designated by the testator. This investment was not intended by the testator to be made In the purchase of real estate; but, on the contrary, he intended that this portion of his estate should be invested in loans upon bond and mortgage, or in the purchase of stocks, which would yield a semi-annual income ; so as to enable the trustee to pay the six per cent, per annum to the widow, without any diminution of the capital of the fund. So far as relates to the investment of this part of the fund, during the life, or widowhood, of the wife of the testator, I can see no legal objection to the disposition which the testator has thought proper to make of this third of bis property. He had a right to direct how and where the investment should be made for the benefit of the annuitant, and the time and manner of the payments. And as the infant complainants are entitled to the reversion of the two thirds thereof after the death or re-marriage of their mother, the place of the investment cannot be changed, except by the sanction of this court, even if the widow and trustee both consent to have the fund invested elsewhere. If the direction to invest the two-thirds in land, upon the re-marriage of the widow, and the limitations over of the ultimate remainder in case of the death of all the complainants without issue before they come into the enjoyment of the estate, are valid,it follows that the mode of investment cannot be changed, even with the consent of all persons who are now in existence, as it is impossible to say who will be the heirs of the children, of the blood of their father, at the death of the last survivor.

I have arrived at the conclusion, however, that the limitation over to the heirs of the blood of the testator is void, as being too remote. The absolute power of alienation cannot be suspended beyond two lives in being at the death of the testator. And this case does not come within the exception contained in the sixteenth section of the article of the revised statutes relative to the creation and division of estates; (1 R. S. 723 ;) for the limitation over does not depend upon the death of all the children without issue under the age of twenty-one, as they may, by the terms of the will, be kept out of the enjoyment of the property until they are twenty-two, if the trustee thinks proper. And upon the death of two of the children without issue, the third would take the ultimate remainder in fee, ag the only heir of the blood of the testator, under the provision contained in the 17th section of that article of the ■ revised statutes. This objection is equally applicable to the contingent limitation over, to the heirs of the testator’s blood, of the lands directed to be purchased for the infants with another third of the testator’s property, after the death of all of the children without issue.

It may, perhaps, be supposed that the provisions of the revised statutes do not apply to this case, as the.lands directed to be purchased are in another state, where the common law rules prevail; by which rules a contingent limitation over, at the termination of any number of lives in being at the creation of the estate, is valid. But the laws- of this state, which was the testator’s domicil, must govern the disposition of his personal estate, and the proceeds of his real property situate here; and no valid disposition could be made of any of his property by will, which disposition would be illegal by the laws of this state. The direction, therefore, to invest the proceeds of the testator’s property in the purchase of Ohio lands, upon trusts which are illegal here, cannot be sustained.

The contingent right of the trustee to receive the rents and profits of the share of each of the complainants, after the age of twenty-two, even if it were valid in other respects, is not such a trust as is authorized by the revised statutes; as by the express direction of the testator the conveyances for the lands purchased are to be taken in the names of the children, and not of the trustee. And the authority to receive the rents and profits and apply them to the use of the children for life, or for a shorter period, in the discretion of the trustee, after they arrive at the age of twenty-two, is not valid as a power in trust merely; as it is necessary that the trustee should have the legal estate to enable him to collect the rents and profits in his own name, either' by distress or otherwise. It is because a seisin of the legal estate is necessary to enable the trustee to collect the rents and profits, that a devise of the legal estate in the rents and profits to a trustee for a term of years, or for any other limited period, carries with it the legal estate in the land for the same term or time, by necessary implication, at the common law. (See Stile v. Tomson, 2 Dyer’s Rep. 210, a. Courthope v. Heyman, Carter’s Rep. 25.) The same objection applies to the devise of the legal estate in the rents and profits of the lands to be purchased, to the trustee, for the support and maintenance of the children during their minorities, as a valid trust, or power in trust, under the provisions of the revised statutes. And as the legal title to the land, to be purchased with the share of the estate belonging to each infant, is directed to be taken in the name of the infants respectively, the right to receive the reñís and profits in the character of trustee, or in any other way than merely as the testamentary guardian of the infants, is wholly inconsistent with the nature of their legal estate in the land; as, by the provisions of the revised statutes, the infants cannot hold the legal title in trust to let another trustee receive the rents and profits in trust, for their support as far as is necessary, and to keep the residue for his own use. The one-third of the net proceeds of the testator’s property, and the reversionary interest in another third after the death or re-marriage of the widow, subject to the paymenl which is to be made to her in case of such re-marriage, belongs therefore to the infants absolutely; and their uncle has no interest therein, or control over the fund, except in the character of testamentary guardian, and for their exclusive benefit.

There being no legal trust vested in the testamentary guardian, in the character of trustee, which can be sustained under the provisions of the revised statutes, this court may lawfully control the exercise of the legal power of the guardian over the property, by giving such directions in relation to the investment of the infants’ shares thereof as may be most beneficial to them, under the existing circumstances, which were not contemplated by the testator at the time of making his will. I will therefore proceed to consider the question, whether it. is expedient for the court to give such directions to the testamentary guardian in the present case.

it is very evident, from the will, that t.he decedent, for some reason which he has not explained, was very desirous that his widow and children should leave this state, where his as well as her relatives resided, and should remove with his brother, the trustee, to the state of Ohio; where, it is admitted, none of them had any relatives, or even acquaintances. The trusts of the will, which he probably supposed to be valid, were framed in reference to such a removal and location of his family in that state. It turns out, however, that the widow is not willing to remove with her infant children to so great a distance from the residence of her friends, and to locate herself entirely among strangers. And it appears to the court that her objections to such a change of residence are not unreasonable under the circumstances of this case.

I have no doubt as to the right of a parent or guardian to change the residence of his infant children, or wards, from one state to another, provided such change of residence is made in good faith and with a view to their benefit; subject, however, to the power of this court to restrain an improper removal of an infant by his guardian, or even by his parent. It must be a very extreme or special case, however, which would induce this court to interfere with the natural rights of a parent in this respect. That such a power exists in the court of chancery, was settled by Lord Thurlow, in the case of Creuze v. Hunter, (2 Cox’s Ca. 242.) The jurisdiction of the court on this subject was again exercised, by Lord Eldon, in De Manneville v. De Manneville, (10 Ves. 52;) where the father of the infant, a French emigrant, was restrained from removing the child out of the jurisdiction of the court. And in the recent case of the nephew of the duke of Wellington, a son of Lord Maryborough, the house of lords, with the entire concurrence of Lord Chancellor Lyndhurst, and of Lords Redesdale and Manners, two former chancellors of Ireland, affirmed the decision of Lord Eldon, in refusing to a profligate father the custody and control of the persons of his infant children. (See Wellesley v. Wellesley, 2 Bligh’s Parl. Rep., N. S., 124. 1 Dow & Clark, 152, S. C.) This court has the same jurisdiction over a testamentary guardian as it has over a guardian in socage, or any other guardian; and in this case it would be improper to permit the testamentary guardian to take the infant complainants from their mother and carry them among strangers, several hundred miles from her residence, at their present tender ages. He must not take them from her, therefore, without the further order of the court; which order he is at liberty to apply for whenever it may be proper. As the third of the estate was given to him, charged with the expense of the education and support of the infants during their minority, or with so much of such expense as the income of their share of the estate falls short of that object, if he accepts the legacy to himself he must apply so much thereof, from time to time, for their support and maintenance, as may be necessary in addition to the income of their own property; but the whole of such expénse is not to exceed what it would have cost for their maintenance and education in the manner contemplated by the testator in his will. And as the testator has directed that his sons should be educated for farmers, the court will so far regard his wishes, in this respect, as to require that they shall be put to that employment, either by or under the direction of their testamentary guardian, as soon as they are old enough; and that they' shall be kept at farming during those seasons of the year when it is usual for farmers to keep their children so employed.

As the trusts of this will are many of them illegal, and none of them can be carried into effect in the manner contemplated by the testator, and as the testamentary guardian and executor appears to be willing to do what is proper, and consistent with his duty as a faithful trustee, I would recommend to the mother and the next friend of the infants, to endeavor to make some amicable arrangement with him for the investment of the two-thirds of the property, in this state; and for the custody and support of the infants until the boys are old enough to be put to farming. Any such arrangement which may be thus made between them and the executor and guardian, and which is consistent with the rights and interests of the infants, and the safety of their persons and property, will receive the sanction of the court. In the mean time I shall suspend the entering of any decree or order, for the present, to enable the parties to perfect such an amicable arrangement if possible,


text:
    Cunningham vs. Pell and others.
    Under the act of incorporation of The President, Directors and Company of the Jersey Bank, the service of process upon the corporation was not sufficient to authorize a court in the state of New-Jersey to give judgment against the president and directors of the bank, in their individual capacities, for the debts of the bank, under the provision of the act making them personally liable if the debt could not be collected out of the corporate estate. To authorize the entry of a judgment against the president and directors individually, the process must be sued out against them, and must be served on them personally.
    The directors of a corporation are liable to the stockholders and creditors of the corporation for a fraudulent breach of trust. And in a suit instituted against them, on account of such fraud, it is not necessary to make all the directors parties.
    A proceeding against trustees for a fraudulent breach of trust, is an exception to the rule that in a suit against trustees all of the trustees must be made parties.
    In a suit brought by a creditor or a stockholder of a corporation against the directors thereof, for a fraudulent breach of trust, the corporation itselfj if in existence, is a necessary party. In such a suit all the directors or stockholders of the corporation should also be made parties; or the bill should be filed by the complainant as well for himself as for all others standing in the same situation.
    A foreign corporation may be proceeded against in chancery, by advertising under the statute, as in case of an absent defendant.
    The bill in this cause was filed to obtain satisfaction of a judgment in favor of the complainant, in the state of New-Jersey, against the Jersey Bank, and against D. Cooledge, Ferris Pell, Alfred S. Pell, R. Spencer, W. Lyon, S. Doughty and R. L. Stevens, as directors of that institution. The bank was incorporated in February, 1818, by the name of “The President, Directors and Company of the Jersey Bank and the 11th section of the act of incorporation is in the following words: “And be it enacted, that the private estate, both real and personal, of the president and directors of the said corporation shall at all times be and continue liable to every creditor, with every part of their corporate estate, for the payment of any note or notes that they or any of them may issue and circulate j and, upon affidavit having been made before any magistrate, by any individual 'holding any note or notes against said company, of the amount by him holden in said note of notes issued by the said president and directors of the Jersey Bank, and that he or she hath demanded the payment thereof in specie, from them, or from any of their officers, at the banking house or office of discount and deposit, and that the same hath not been paid, that process may issue against the president and directors for the amount contained in the said affidavit, from any court having competent jurisdiction; in which action it shall be lawful for any plaintiff to declare generally upon the amount so sworn to be due, consolidating the sevral amounts of said notes ; and the said notes shall be received in evidence by any of said courts, and' judgment rendered, and execution issue, as well against the president and directors of said company and their corporate estate, of what nature soever the same may be, as against the real and personal estate of the said president "and directors in their individual capacity : Provided always, that the private estate of the said president and directors shall not be liable, while a sufficient portion of the estate of the said corporation is returned to satisfy the debt of said company, or until it shall be made to appear to the court before whom the action may be instituted that the said company have acted contrary to the provisions and regulations contained in this act, or when they can make payment to any individual or corporate body, in note" or notes issued by such individual, or such corporate body.”
    The bill charged, among other things, that on the 2d of January, 1830, and at the time of the commencement of this suit, the complainant was the holder of bills or notes of the bank, to the amount of $5328, and of a certificate of deposit for |¡305,60, given to R. Cromelin, payable to his order, on demand; that in June, 1825, Coolidge, F. Pell, A. S. Pell, Spencer, Lyon, Doughty, and Stevens, were elected directors of the bank, since which time no election had been held; that Doughty died in 1827, and Coolidge and A. S. Pell, some few months before the filing of the bill, and continued to be directors until their respective deaths; and that the other directors, elected in 1825, continued to be such directors down to the time of the commencement of this suit; but that Doughty and Stevens were elected directors without their knowledge or consent, and they never acted as such directors. The bill further charged that the complainant, on the 2d of January, 1830, made the affidavit required by the 11th section of the act of incorporation, and in pursuance of the directions of that section of the act, sued out process from the inferior court of common pleas of the county of Bergen, against the president, directors and company of the Jersey Bank ; and that such further proceedings were thereupon had, that in March, 1830, the complainant obtained judgment against the corporation, and against the seven directors elected in June, 1825, for the sum of $5633,60 damages, and $36,50 costs; and that an execution was issued on that judgment to the sheriff of Bergen county, with directions to levy the damages and costs of the real and personal estate of the corporation; and if sufficient could not be foundfor that purpose, then tolevythe amount of the judgment, or the residue thereof, of the individual property of the other defendants, the seven directors; upon which execution the sheriff returned that he could not find any property of the defendants, or of any of them. The bill "also charged that there was no property belonging to the corporation in the state of New-Jersey, or in this state, and had not been, since the recovery of the judgment, which could be reached by an execution, or proceeding at law; that at the time of the suspension of payment by the bank, A. S. and F. Pell, or one of them, had in their possession, or under their control, in the city of NewYorb, the books of the corporation and its most valuable notes and papers, and other property to a large amount, and subsequently converted the same to their own use, and had never accounted for the same; that all the books and papers of the corporation were in the hands, or under the control, of Ferris Pell, or of Harrison and Adelia D. Pell,- the personal representatives of A. S. Pell, or that they knew where such books and papers were; that at the time of the suspension of payment by the bank, F. Pell and A. S. Pell were both largely indebted to that institution ; and that they purloined and concealed its books and papers for the fraudulent purpose of concealing the names of the persons indebted to the bank, and the amount due from each, &c., so that the creditors should be deprived of their legal means of recovering their debts against the bank. The bill also charged other fraudulent acts ón the part of Ferris and Alfred B. Pell, in relation to the concerns of the bank, while they had the control thereof as directors; and the complainant insisted, in his bill, that in equity, Ferris Pell and the personal representatives of A. S. Pell were bound to account to him for the funds of the institution thus fraudulently converted. The trustees, under the marriage settlement of Alfred S. Pell and his wife, were made parties to the suit for the purpose of compelling them to account and pay over funds and property of the bank alleged to have come into their hands from A. S. Pell. The defendants demurred to the bill for want of parties, for multifariousness, and for want of equity.

      F. B. Cutting, for the complainants.

      J. Law, for the defendant Ferris Pell.

      T. L. Ogden fy W. H. Harrison, for the other defendants,-
   The Chancellor.

Independent of the objection of the want of proper parties, this bill cannot be sustained as a bill to obtain satisfaction of the judgment obtained against the corporation, and the seven directors thereof, in the state of New-Jersey. It is evident, from the bill itself, that the requirements of the statute were not complied with, so as to entitle the complainant to a judgment against the individual property of the directors of the bánk. The statute authorizes process to be issued against the president and directors, for the amount contained in the affidavit, upon which judgment may be rendered and execution issued against the corporation and its estate, and against the real and personal estate of the president and directors in their individual capacity. But in this case it appears that, instead of taking out process against the president and the directors of the bank, individually, and upon that process proceeding to judgment against them and the corporation which they represented, the process was sued out against the corporation only ; and upon that the judgment has been rendered against the individual directors, who may not have had any notice of the suit. The legislature never could have intended that a judgment should be rendered against the directors of *the bank personally, upon the service of process upon the president or cashier of the corporation, and without giving the directors an opportunity to defend themselves by showing- that they were not such directors at the time of the commencement of the suit, or when the .demand of payment was made and refused; but there would bé no Impropriety in rendering a judgment against a corporation, upon process served upon its president and' all its directors ; who are the proper agents of such corporation, to defend its rights. In this case it is very evident that the true construction of the eleventh section of the act of incorporation is, that, to make the president and directors individually liable, the process must be sued out against them individually, and duly served; and that it is- not sufficient to sue out process against the corporation only, as was done here.

That the individual directors were not served with the process upon which this judgment was obtained, is perfectly evident from the facts stated in the bill. It is there alleged that Doughty and Stevens were elected directors without their knowledge or consent, and that they never acted as such. And yet a personal judgment is rendered against them, as well as the other directors, upon process issued against the corporation, two or three years after one of them was-dead. Upon this process the court had no jurisdiction, either as to the persons or the property of the individual directors.; and the judgment, so far as concerns them individually, is absolutely void. Even if the construction of this statute was that the court might enter a judgment against the properly of the president and directors individually, upon process issued against the corporation only, it would be a proceeding in rem, merely; and the court having- no jurisdiction over the persons of the individual directors, by such a proceeding, the judgment would not create a debt upon which a suit could be sustained against the directors, in the courts of this state. (See Bates v. Delavan, 5 Paige’s Rep. 299.)

Sufficient, however, appears upon this bill to entitle the complainant to relief, if it was not defective in form, and if the proper parties were before the court. In Robinson v. Smith, (3 Paige’s Rep. 223,) this court decided that the directors of a corporation were liable to the parties injured by a fraudulent breach of trust. And the same point was decided the same way by the supreme court of Louisiana about the same time. (Percy v. Millaudon, 3 Louis. Rep. 568.) In this case it is charged that the funds- of the bank have been fraudulently abstracted, to a large amount, by the two Pells, so that nothing is left for the payment of the creditors of the institution ; and that the complainant is a creditor, and has recovered a judgment, which is probably binding upon the corporation. Even if he is a creditor at large, he is entitled to protection against the consequences of these fraudulent acts,, by which the creditors have been deprived of the means of collecting their debts, in the usual way, against the corporation itself. In the case of The Protection Insurance Company v. Dummer and others, decided in this court in April, 1834, but which is not reported, it was held not necessary to make all the fraudulent directors parties, to a bill filed for the purpose of obtaining satisfaction for a fraudulent breach of trust; that this was an exception to the general rule that in a proceeding against trustees all. must be made- parties. (See also Walker v. Simons, 3 Swans. Rep. 75 ; 4 Russ. Rep. 274, note; and Wilson v. Moore, 1 Myln. & Keen’s Rep. 127.) It was not necessary, therefore, to make Spencer and Lyon parties to this suit, except for the purpose of obtaining relief against them on the ground of their personal liability for the debts of the company, under the eleventh section of the act of incorporation. If the complainant seeks to charge any of the directors on that ground, all the other directors who are liable to the same extent, should be made parties, so that a proper decree for contribution may be made. In that case, also, the corporation, if in existence, and not entirely destitute of property, should also be a party, so that its funds may be fairly applied to the payment of the complainants’ demand.

The objection for multifariousness is not well taken. If the allegations in the bill are true, the personal representatives of Alfred S. Pell, and the trustees under the marriage settlement, are proper parties; the first, that they may account for the monies and property of the institution, which was fraudulently abstracted by their testator, and the last that they may be compelled to restore the funds and property belonging to the bank, which may have come into their hands as trustees under the settlement.

But it is a fatal objection to all the relief claimed by this bill, that the corporation is not made a party. This question was decided in the case of Robinson v. Smith, before.referred to. Although that suit was brought by the stockholders, and this by a creditor of the corporation, the principle is the same, in both cases. If this creditor could compel the defendants to account to him for the funds of the bank which have been abstracted by the Pells, the corporation, if in existence, might hereafter compel the defendants to account a second time to it. Although the corporation is located in another state, if it does not appear voluntarily it may be proceeded against as an absent defendant.

It does not appear by the bill in this case that there are any other creditors but the complainant; but if there are others, which is probably the case, they should be made parties; or the bill should be filed by the complainant in behalf of himself and all others standing in the same situation, to enable them to come in under the decree; and to relieve the defendants from the necessity of accounting again to other creditors.

The demurrers are allowed'; but with liberty to the complainant to amend his bill, upon the payment of costs, if he shall be so advised.