text:
    Parsons, administrator, &c. vs. Hughes.
    Where the defrauded party, with full knowledge of the fraud, settles the matter in relation to which such fraud has been committed and releases the person who defrauded him, he has no claim to relief, either at law or in equity, on account of such fraud.
    If a parternership is defrauded by a third person, with the consent and connivance of one of the copartners, it seems that a settlement and discharge of such copartner, by the other members of the firm, from all claim on account of such fraud, is a bar to any relief against the other party to the fraud.

      May 17.
    This case came before the court upon a plea of the defendants to the complainant’s bill. E. L. Parsons, the decedent, and the defendant John Hughes, in 1832, formed a copartnership in New-York, in the business of importing and vending dry goods, under the name or firm of Parsons & Hughes. Subsequently A. W. Parsons was taken into the firm, as a nominal copartner merely ; after which time the business was carried on in the copartnership name of Parsons, Hughes & Co. The business was continued until March, 1838, when the copartnership was dissolved by written articles, under hand and seal, executed by and between E. L. Parsons of the first part, J. Hughes of the second part and A. W. Parsons of the third part; upon which dissolution all the stock, property and effects of both firms were transferred to the decedent E. L. Parsons. During the continuance of the copartnership business, Edward Hughes, the other defendant in this cause, who resided in England and who, as appeared from the invoices annexed to the complainant’s bill, transacted business in the name of Edward Hughes & Co., acted as the agent of Parsons & Hughes and of Parsons, Hughes & Co., in the purchasing dry goods in England and forwarding such goods to them, for a commission which was paid to him as such agent. And the bill in this cause was filed on account of alleged frauds committed upon E. L. Parsons as one of the copartners in the business of such agency, by false invoices and otherwise, by Edward Hughes, with the consent and connivance of John Hughes. The articles of dissolution which were set forth in the bill contained the following clause : “ And the said party of the first part for the consideration aforesaid, for himself and for his executors and administrators doth hereby remise, release, discharge, and forever quit claim, the said party of the second part, his executors or administrators of and from all sums of money and premises now due from the joint trade of Parsons & Hughes, and Parsons, Hughes & Co., and of and from all and all manner of actions, suits, claims, and demands whatsoever both at law and in equity, which he "the said party of the first part can or may now or from henceforth claim, challenge, or demand, against him the said party of the second part, or his executors or administrators, for or by reason or on account of any covenant or agreement or any other act, matter, or thing whatsoever done or committed, or which on his part by virtue of any articles of copartnership, or otherwise, were or was covenanted or agreed to be paid, done, or performed.” The articles of dissolution, after providing for the correction of certain specified errors in the settlement if they should be discovered, concluded as follows : “ And it is hereby covenanted, declared, and agreed by and between all and every of the parties hereto that this present deed of separation and settlement of accounts is in every respect a full settlement of accounts, between all and every of the parties hereto among themselves, and that the firm of Edward Hughes <$f Co., employed by them as agents, are to be embraced hereby ; except merely in any matters aforesaid which may be considered still open between the said parties of the first and second part.” To avoid the effect of this release and agreement, entered into upon the dissolution of the firm, the complainants alleged, in their bill, that the agreement for a dissolution of the copartnership, and the terms thereof, were based upon a fair account and honest dealing between the copartners ; and that having subsequently found out the several frauds stated in the bill, insisted that they were not bound by the articles of dissolution and release from calling the defendants to account in respect to such frauds, &c.
    The defendants pleaded in bar of the discovery and relief prayed for in the bill, that before the dissolution of the copartnership and the execution of the agreement as mentioned in the bill, all the alleged frauds were and each of them was well known to the decedent E. L. Parsons ; and that for the purpose of adjusting and fully settling and compromising all the said matters and frauds, the articles of dissolution and the release therein contained were executed.

      Charles Edwards, for the complainants.

      E. H. Blatchford §• G. Wood, for the defendants.
   The Chancellor.

If the allegations in this plea are true, they appear to be a full and perfect bar to all discovery and relief sought by the complainants in this suit. It is true that gross and enormous frauds are charged in the bill as having been committed by the agent, upon the decedent as one of the firm, with the consent and connivance of the copartner who has obtained this release. And the subsequent discovery of such frauds, if they were unknown to E. L. Parsons at the time of the dissolution and settlement, would unquestionably have authorized this court to set aside the settlement and release, and to compel a full account and adjustment of the copartnership accounts and transactions, so as to charge the fraudulent copartner with the loss occasioned thereby j and if he was irresponsible, to compel the fraudulent agent to indemnify the estate of the decedent for such loss. But where a party with full knowledge that he has been defrauded by another, thinks proper to settle the matter in relation to which the fraud has been committed, and to release the party who has defrauded him, he has no legal or equitable claim to relief against such voluntary act.

It is supposed by the counsel for the complainants, however, that the settlement with and release of the copartner of the complainant who was a party to the fraud cannot protect the other defendant. But the averment in the plea shows that the release and settlement were made and executed for the purpose of fully settling and compromising all the matters and frands referred to in the pleadings in this cause. And as the agreement in terms declares that it is intended to embrace the firm of Edward Hughes & Co. wTho had been employed as agents, both defendants may avail themselves thereof, although the consideration of the release proceeded from John Hughes only for the benefit of both. Independent of this special provision in the release, I am inclined to think that a release of the copartner by whose authority and consent the supposed false and fictitious invoices were made, and other frauds upon E. L. Parsons had been committed, necessarily deprived the defrauded copartner of the right to call either to account for such frauds, or to have the accounts opened which had been settled and adjusted between the agent and one of the members of the firm, previous to the dissolution of the firm and the settlement of all the partnership transactions.

The plea must therefore be allowed ; and the complainants’ bill must be dismissed with costs, unless they think proper to take issue upon the plea, as provided by the 47th rule of this court. But the dismissal of the bill must be without prejudice to the defence which the complainants may think proper to make to any suit brought or to be brought, by the defendant John Hughes, to open the settlement and adjustment of the copartnership concerns.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Dix and others vs. Briggs.
    Two or more persons having separate judgments against the same party exceeding §100 each, who have exhausted their remedies at law, so as to authorize each to file a creditor’s bill, may join in one suit; and it is not necessary that they should file separate bills.
    It seems that such judgment creditors may join in and file a creditor’s bill against the debtor, where the judgment of each is less than §100, if the agrégate amount due upon all the judgments exceeds that sum.
    A creditor’s bill cannot be filed upon the return of an execution unsatisfied, which execution has been issued against the personal property of the defendant merely ; as in the case of an execution upon a justice’s judgment which has not been docketed in the clerk’s office.
    In pleading a right acquired under a judgment of an inferior court, of limited jurisdiction, sufficient should be stated in the pleading to show that such court had jurisdiction to render such judgment.
    May 17.
    This was an application for the appointment of a receiver, upon a creditor’s bill. - Different plaintiffs, having three judgments recovered by them respectively in a justice’s court, which judgments in the aggregate amounted to more than $100, but no one of which amounted to $50 at the time of the recovery thereof, joined as complainants in this suit. The defendant’s counsel insisted that different plaintiffs could not thus join in one suit for the purpose of giving this court jurisdiction of the case. Another objection to the right of the complainants to the appointment of a receiver was, that the bill was prematurely filed, before they had exhausted their remedy against the real estate of the defendant, by execution. And a further objection, raised by the defendant’s counsel, was that it was not averred in the bill that the justice had jurisdiction in the suits in which the judgments in favor of the several complainants were rendered.

      S. H. Hammond, for the complainants.
    /, Rhoades, for the defendant.
   The Chancellor.

Two or more persons having separate judgments against the same party, exceeding $100 each, and whose remedies at law have been exhausted, so as to entitle each to come into this court for relief against the property of the defendant which could not be reached by their executions, may join in a creditor’s suit. It is not necessary in such a case that they should file separate bills. (Lentilhon v. Moffat, 1 Edw. Ch. Rep. 451.) And I can see no reasonable objection to a similar joinder of complainants where the amount due upon the judgment of each is less than $100; provided the whole amount in controversy in the creditor’s suit in this court exceeds that sum. The same result would be produced by assigning all the judgments to one of the complainants, and letting him file a bill for the recovery of the whole amount which would be thus due to him. The first objection, therefore, is not well taken.

It is a fatal objection to this suit, however, that the complainants have not exhausted their remedies at law against the property of the defendant. The executions which were issued by the justice, and directed to a constable, were against his personal property merely. And to complete the remedy, the complainants should have docketed their several judgments in the county clerk’s office, and have taken out executions there, so as to reach the real as well as the personal property of the defendant, if he had any in the county. (2 R. S. 248, § 128. Idem,254, § 165,167.) The statute does not authorize the filing of a creditor’s bill upon the return of an execution unsatisfied, which execution has been issued only against a part of the defendant’s property, where the complainants might have taken out their executions against the whole, if they had filed the transcripts of their judgments with the county clerk. Upon this ground the motion for a receiver must be denied. And it is unnecessary, therefore, to inquire whether there is sufficient stated in the bill to show that the justices had jurisdiction to render the judgments as therein charged. The general rule unquestionably is, that in pleading a right acquired under the judgment of an inferior court, of limited jurisdiction, sufficient should be stated to show that such court had jurisdiction to render such judgment.

Motion denied with costs.


text:
    Judson and others vs. The Rossie Galena Company and others.
    A creditor of a corporation whose execution has been returned unsatisfied can proceed by bill, as well as by petition, under the article of the revised statutes relative to proceedings against corporations in equity, to obtain a sequestration of the effects of the corporation.
    Stockholders of the Rossie Galena Company are only liable for such debts of the company as were contracted while they were such stockholders. And creditors of the company, whose debts have been contracted by such company at different periods of time, having no common interest in the individual liability of different stockholders, cannot litigate their claims against such stockholders in a single suit.
    The manner in which creditors of a corporation are to make themselves parties to a suit commenced against the corporation to wind up its affairs, must be substantially the same as that in which creditors of a deceased individual make themselves parties to a suit for the settlement of his debts and credits, by coming in before a master, under a decree, and proving their debts.
    Each stockholder of the Rossie Galena Company being individually liable for the whole amount of each debt contracted while they were stockholders respectively, they are not entitled to an injunction to restrain the prosecution of suits against them, and to compel the creditors to come in and prove their debts under the decree in the first suit.
    May 17.
    This was an application by E. A. Bancker, a stockholder of the Rossie Galena Company, and one of the defendants in this suit, for an order and injunction to restrain certain creditors of the corporation, whose executions against the property of such corporation had been returned unsatisfied, from proceeding at law against the petitioner for the recovery of their respective debts. The company was incorporated in 1837, for the purpose of raising and smelting lead ore, or galena, at Rossie in the county of St. Lawrence, for the term of ten years. By the provisions of the charter the stockholders of the company were made jointly and severally liable for the payment of all debts or demands contracted by the corporation, or by its authorized agents. And any person having a demand against the corporation, after having exhausted his remedy against the property and effects of the corporation by the return of an execution unsatisfied, or upon the dissolution of such corporation, was authorized to sue any stockholder, or director, in any court having cognizance thereof, and to recover the same with costs. The petition stated that the original bill in this cause was filed by the complainants as judgment creditors of the corporation, who had exhausted their remedy at law by the return of an execution unsatisfied, in August, 1841, under the provisions of the article of the revised statutes relative to proceedings against corporations in equity, in behalf of the complainants and such other creditors as should come in and make themselves parties to the suit; for the purpose of obtaining satisfaction of their debts out of the effects of such corporation, and, in case of a deficiency thereof, from the stockholders, who were personally liable therefor by the act of incorporation; that a receiver of the effects of the corporation had been appointed in that suit; and that the supplemental bill in this cause was afterwards filed by the complainants, for the purpose of making all the stockholders of the corporation parties, and praying for a decree against them personally ; the complainants alleging therein that the corporation property and effects were insufficient to satisfy their demand, and that the debts of the corporation amounted to about $30,000.
    The petitioner further stated that in March, 1838, he became the owner of forty-five shares of the stock of the corporation, and of five other shares in September of the same year, which he had ever since continued to hold j that he had been sued at law by ten different judgment creditors of the corporation, whose executions against the corporate property had been returned unsatisfied, seven of whom had obtained verdicts against him, and the suits of the others were at issue, but remained untried ; and that the plaintiffs in another judgment against the corporation had filed a bill before the vice chancellor of the first circuit, against the petitioner and two other stockholders, to obtain satisfaction of that judgment.

      R. W. Peckham, for the petitioner.

      J. Rhoades, for S. W. & S. S. Keyes. .

      J). Bur well) for Corning & Horner.

      J. V. L. Pruyn, for Bailey & Storms.

      J. G. Hopkins, for Rossell, Benedict & Co., Blakey Searle, & C. G. & W. G. Harger.

      G. Bowman, for Freeland, Hoffman and Stuart the complainants in the suit pending before the vice- chancellor of the first circuit.
   The Chancellor.

The language of the 56th section-of the article of the revised statutes relative to proceedings against corporations in equity, (2 R. S. 466,) is undoubtedly broad enough to reach this case. For the original bill appears to have been filed, under that article of the revised statutes, to reach the corporate property which the complainants had not been able to obtain upon their execution. It is true, the 36th section appears to contemplate a proceeding by petition, for a sequestration of the corporate property and effects, and for the appointment of a receiver. But I see no objection to an application to the court in the form of a bill; and that appears to be the more appropriate course where it is intended also to charge the stockholders or directors of the corporation personally with any of its corporate debts and liabilities.

It is difficult to say precisely what proceedings were contemplated by the framers of the 56th section, to enable the creditors of a corporation to make themselves parties to a suit before there had been a decree for the benefit of all the creditors. In the note to that section, the revisers say it is in conformity to the practice in the similar case of executors, except that in those cases proceedings at law cannot be stayed until after a decree. In the case of executors and other trustees, where the creditors have claims upon a common fund for the payment of all rateably, or according to a specified order of priorities, the court directs a reference to a master to take proof of the claims of all the creditors, and directs notices to be published, requiring all the creditors to come in before such master and prove their claims. And those creditors who were not parties to the suit originally make themselves parties thereto, by going before the master on the reference and proving their debts under the decree. The court adopted a similar mode of proceeding to ascertain the claims against an insolvent corporation, in the case of The City Bank of Buffalo, after a final order for an injunction and receiver had been made ; which order is in the nature of a decree for the benefit of all the creditors, so far as relates to the corporate property and effects.

The only other way in which a creditor can make himself a party to a suit is by the filing of a supplemental bill, and making the previous parties to the suit defendants in such bill. It could not, however, have been the intention of the legislature to require each creditor of an insolvent corporation to file a supplemental bill, against its directors and stockholders, or be forever barred from having any claim against them or against the corporate fund. And as each creditor of the corporation has the right to contest the validity of the claims of others, it would be improper to compel them all to join in one bill, which might deprive them of that right. Besides, the joining of all the creditors in the same suit, and carrying on a litigation in their joint names would, in nine cases out of ten, be found wholly impracticable. It would, therefore, be unreasonable to give such a construction to this 56th section as to make it imperative upon the court to grant such an order and injunction as is contemplated by that section, previous to a decree, except in those cases where the debts of all the creditors can be effectually provided for out of a common fund under the control of the court. The object of the statute unquestionably was to save useless costs ; and it would be contrary to its spirit and intent to grant an injunction which would necessarily have the effect of increas'1XlS litigation.

By adverting to the revisers’ note to the 50th section of the article of the revised statutes before referred to, and to the sections which immediately preceded the 50th, it will be seen that the principal object of those sections was to carry out the provisions of the title relative to monied corporations, which rendered the directors jointly liable to the creditors and stockholders, for losses occasioned by breaches of duty; and which rendered the stockholders liable to the creditors, in cases of fraudulent insolvencies, to the extent of their stock, where there was a deficiency in the effects of the corporation which could not be charged upon or collected from the directors who were responsible for the fraud. In such cases no one of the creditors could collect the whole of his debt from those who were liable to all the creditors collectively to a limited amount. The proceedings to compel a rateable contribution to the amount of their several debts, must, therefore, be analogous to the proceedings against the estate of an insolvent testator, or intestate, in the hands of his personal representative; not only in relation to the corporate effects but also as to the limited liabilities of the directors and stockholders. Bt,i n the case under consideration, the statute makes each stockholder of the company personally liable to every creditor for the full amount of his debt, without reference to the amount of stock held by the stockholders respectively; and authorizes separate suits to be commenced against such stockholders, either jointly or severally, in any court having cognizance of the case. (Laws of 1837, p. 446, § 9.) Before any suit, however, can be commenced against a stockholder of the company, the creditor must have proceeded to judgment against the corporation and have had an execution upon such judgment returned unsatisfied ; except in cases where the corporation has been dissolved. The remedy given by the charter of this company is therefore inconsistent with the granting of an injunction, upon the filing of a bill by one of the creditors only, restraining all the other creditors from proceeding at law against any of the defendants in that suit. For if the other creditors were not allowed to proceed to judgment at law against the corporation, and obtain a return of their executions unsatisfied, they could not be made parties to the bill in chancery so as to render the stockholders personally liable to them.

In the recent case of Moss v. Oakley, (2 Hill's N. Y. Rep. 265,) which arose under the act incorporating the Rossie Lead Mining Company, and which is similar in its provisions, the supreme court has decided that those who were stockholders at the time the debt was contracted were alone liable for the payment thereof, and not those who became stockholders afterwards. So far, therefore, as the individual liability of the stockholders is concerned the creditors of the corporation, whose debts were contracted at diiferent times, have no common interest; and their claims will not necessarily be against the same persons as stockholders. It would for that reason be wholly impracticable for them to litigate their claims in one suit. For no creditor would have the right to file a bill and make all who were or ever had been stockholders of the company defendants therein, when some of such defendants might not have been stockholders at the time the debt was contracted. I am satisfied therefore that this case, although within the letter of the 56th section of the article of the revised statutes relative to proceedings against corporations in equity, is not within the intention of the legislature which adopted that section; and that this court is not authorized, upon a summary application, either before or after decree in this suit, to restrain all proceedings at law against the defendants therein, or any of them, by creditors of the corporation who are not parties to the bill or supplemental bill.

Those stockholders who are compelled to pay more than their rateable proportions of the debts contracted while they were stockholders, will undoubtedly have a claim for contribution against other stockholders who are liable for the same debts and who pay less than their shares. But if there has been frequent changes of the stockholders, as in the case of ordinary joint stock corporations, the expense of the litigation to ascertain who are bound to contribute, and the amount for which each stockholder is liable, must of itself be very great. It would be still more expensive, however, for all the creditors to be compelled to come into this court and to litigate their claims with each stockholder here, after having exhausted their remedies at law against the corporate property ; and that expense would in the end fall upon those stockholders who are solvent. I do not therefore see any benefit which the petitioner would derive from such a course, even if the court had the power to grant his application.

The petition must be dismissed with costs to such of the creditors as appeared to oppose the application ; which costs are fixed at seven dollars for the plaintiffs in each suit, at law or in equity, whose counsel appeared in opposition to the prayer of the petition.


author: The Chancellor

text:
    Hurd vs. Haynes and wife.
    Where a demurrer is overruled, upon argument thereof, and the defendant is ordered to put in his answer in twenty days and pay the costs or that the bill be taken as confessed against him, a subsequent ex parte order extending the time to answer is irregular.
    July 8.
    This was an appeal from an order of the vice chancellor setting aside an ex parte order extending the time for the defendants to answer.

      J. M. Van Cott, for the appellants.

      J. Rhoades, for the respondent.
   The Chancellor

decided, that where a demurrer has • been overruled, upon the argument thereof, and the defendants ordered to pay the costs upon the demurrer and put in their answer within twenty days, or within any other specified time, after notice of the order overruling the demurrer, or that the bill he taken as confessed against them, a subsequent ex parte order giving further time for the defendants to put in their answer is irregular. He said that if further time to put in the answer became necessary in such a case, the proper course was to apply to the court to extend the time, and to give notice of such application to the complainant’s solicitor • or to obtain an order to show cause why the time to answer should not be extended, and to stay the proceedings of the complainant in the meantime, if necessary.

Order appealed from affirmed with costs.


text:
    Sizer and others vs. Miller.
    The case of a creditor’s bill is an exception to the general rule, which re. quires all the material facts upon which an application for an ex parte in. junction is founded should be sworn to positively.
    Where the complainant in a creditor’s bill resides at a distance from the debtor, the bill may be verified by the attorney or agent of the complainant who has had charge of the collection of the debt, and who has conducted the proceedings at law.
    Two or more judgment creditors, whose executions have been returned un. satisfied, may join in a suit to obtain satisfaction of their debts, if the aggregate of the indebtedness exceeds one hundred dollars.
    July 8.
    This was an appeal from a decision of the vice chancellor of the eighth circuit, denying the defendant’s application to dissolve an injunction, and granting the motion of the complainants for the usual reference to appoint a receiver, upon a creditor’s hill against the judgment debtor alone. One of the complainants was a judgment creditor of the defendant upon a judgment recovered in the supreme court, on which there remained due $71,32, exclusive of interest. And the other complainants had also recovered judgments in the common pleas of Erie county and in the recorder’s court of the city of Buffalo, on each of which judgments there was due more than $100. The bill was verified by the complainant Sizer, who resided in Buffalo, in the usual manner. It was also verified by the oaths of the attorneys of the other complainants, who severally swore positively to the recovery of the judgments and the other proceedings in favor of their respective clients in the suits at law, and as to the amounts due thereon ; stating that their clients respectively resided in the city of New-York, and were not as well acquainted with any of the facts stated in the bill as the deponents.

      W. H. Greene, for the appellant.
    S. G. Haven, for the respondents.
   The Chancellor.

None of the objections to the decision of the vice chancellor are well taken. Even if the want of an endorsement on the back of the injunction was material, which it was not, it would not afford any ground for dissolving the injunction; but it might show that the same ought to be set aside as irregularly issued. As to the verification of the bill by the attorneys, this court has frequently decided that in the case of creditors’ bills, where the complainants reside at a distance from their debtors, and have entrusted the collection of their debts to attorneys or agents residing near such debtors, which attorneys or agents have conducted the proceedings at law, the verification of the bill by the attorney or agent of the complainant is sufficient. The case of a creditor’s bill, where an injunction is sought for against the judgment debtor alone, is an exception to the general rule that all the material facts must be sworn to positively, in order to obtain a preliminary injunction ex parte. (Hammersly v. Wyckoff, 8 Paige’s Rep. 72.)

It is well settled that two or more creditors having judgments against the same, person, and who have exhausted their remedies at law by the return ,of executions against his real and personal estate unsatisfied, may join in a bill in this Court to reach his equitable interests, choses in action, and other property. And the statutory provision which prohibits the commencement of a suit in this court where the amount in controversy in such suit does not exceed $100, does not extend to such a case ; provided the aggregate amount of all the judgments, for the satisfaction of which the bill is filed, exceeds the amount specified in the statute.

There is no valid objection to the form of the order appealed from; and the objection, that the affidavits on the part of the defendant showed that a receiver of his property was unnecessary, was frivolous. The order appealed from is, therefore, affirmed with costs; and the proceedings are to be remitted to the vice chancellor.


text:
    The People ex rel. Backus vs. Spalding.
    To limit the time for appealing from an interlocutory order, the party obtain, ing the order must either serve a formal notice of the order, or a copy of the order itself, upon the solicitor of the adverse party. A mere verbal notice of the order is not sufficient for that purpose.
    July 19.
    This was an application to dismiss an appeal from an interlocutory order, upon the ground that the appeal was not entered until more than fifteen days after the appellant was aware of the entry of the order; although no notice of such order had been served.

      A. Gardner, for the relator.

      R. Haight, for the defendant.
   The Chancellor.

This is an application to dismiss an appeal from an order of the vice chancellor of the eighth circuit, adjudging the defendant guilty of a contempt, ancj, ordering him to be committed until the fine imposed upon him should be paid. In the case of Tyler v. Simmons, (6 Paige’s Rep. 132,) this court considered the decision of the court for the correction of errors as settling the principle that the party entering an interlocutory order or decree, and who wished to limit the time of his adversary’s appealing from the same, must either serve a copy of the order, or serve a written notice that such an order had been entered. And I can see nothing in this case to take it out of the principle of that decision. There is no doubt that the appellant, -when he was arrested upon the process for his commitment, must have known that the vice chancellor had made an order, and that such order must have been entered, to warrant the issuing of the process. But still it is proper to adhere to the settled practice of requiring a formal notice, or the service of a copy of the order.

The motion to dismiss the appeal is therefore denied, with $8 costs.


text:
    Greene & Cramer vs. Wheeler.
    It is not a matter of course to allow costs to a party who has attended to oppose the taxation of a bill of costs against him, upon notice, and where the party giving such notice neglects to bring on the taxation at the time specified. But the court has the power to allow costs for such attendance to oppose a taxation, in a proper case.
    July 19.
    This was an application for an order upon the complainants to pay to the defendant’s solicitor the costs of attending to oppose the taxation of a bill of costs pursuant to notice ; which bill of costs was not presented for taxation at the time specified in the notice.

      O. L. Barbour, for the motion.

      B. F. Jigan, for the complainants.
   The Chancellor.

I am not aware' of any practice of this court allowing costs, as a matter of course, in a case like the present, as between party and party. There is no doubt, however, of the power of the court to give costs to a party who attends to oppose a taxation, pursuant to notice, and where the adverse party, without any reasonable excuse, neglects to proceed with the taxation in conformity with such notice. In this case I infer from the affidavits, that the defendant’s solicitor had actually been subjected to the expense of preparing an affidavit and of sending it to his agent, to oppose the taxation, before he was aware of the fact that the bill had been made out and noticed for taxation through a mistake of the copartner of the complainant’s solicitor. But the origin of such mistake, and the reason why the bill as then made out was not presented for taxation is now satisfactorily explained, by the affidavits on the part of the complainants. Under such circumstances it would be adopting a new practice to charge the complainants with the costs of the attendance of the adverse party to resist the taxation.

The application must therefore be denied, but without costs to the complainants.


text:
    Lorton and others vs. Seaman and others.
    Where a motion, made by a defendant, to open an order taking the bill as confessed and to allow the defendant to put in an answer, was granted, but a mistake was made in the entry of the order, in not making the payment of the costs a condition of opening the order, and the defendant put in an answer without paying the costs and the complainant replied to the same : Held, that the mistake in the entry of the order was waived by the filing of the replication to the answer, and that the only remedy of the complainant, to obtain satisfaction of his costs, was to proceed against the defendant as for a contempt for the non-payment thereof.
    To entitle a party to a precept to commit the adverse party to prison for not paying interlocutory costs, directed to be paid by an order of the court, a personal demand of the costs must be made. And a demand of the costs from the solicitor of the party is not sufficient.
    July 19.
    This was an application to compel the payment of the costs of an interlocutory motion allowing the defendants $. Seaman and H. Seaman to put in an answer to the complainants’ bill, and directing them to pay the costs of entering the order to take the bill as confessed and of opposing their application. By a mistake of the register, or the inadvertence of the court, the order, instead of making the payment of the costs a condition of the opening of the default, authorized the defendants to put in an answer, and merely ordered them to pay the costs of opening the default, &c. The costs were duly taxed and a demand thereof was made from the defendants’ solicitor; but the defendants put in their answer and neglected to pay the costs.

      A. Thompson, for the complainants,

      H. F. Clark, for the defendants.
   The Chancellor.

The mistake in the entry of the order, if there was one, was waived by the filing of the replication to the answer. And the only remedy that now remains to the complainants, to obtain the payment of their costs, is by proceeding against the defendants as for a contempt, for the non-payment. The question then arises whether a demand of the costs made upon the solicitor in the cause is sufficient. In a certain class of cases a personal service is not necessary to bring a party into contempt for disobeying an order of the court. (Merritt v. Annan, 7 Paige’s Rep. 151.) But in relation to orders for the payment of interlocutory costs, or other sums of money, the legislature has substituted a new mode of proceeding, which is not applicable to other cases of contempt. The section of the revised statutes in relation to that subject, directs the issuing of a precept to commit the party to prison, at once, upon proof by affidavit of the personal demand of the costs, or other sum mentioned in the order, and of the refusal to pay the same. (2 R. S. 535, § 4.) Under this provision a demand of the party himself, and not merely from- his solicitor, must have been intended by the legislature. The complainants are not, upon these papers, entitled to a precept to commit the defendants to prison ; but must make a personal demand of the costs of them instead of their solicitor.

The motion must, therefore, be denie.d. But as this is a new question, arising under this statutory provision, I shall not charge the complainants with the costs of opposing the application.


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    In the matter of Taylor, a lunatic.
    Where a gentleman introduced a female who was previously living with him as a house keeper, to his friends as his wife, and from that time for the period of eleven years continued to cohabit with her as his wife, holding her out to the world as sustaining that relation to him, and had several children by her who were called by his name : Held, that these facts were sufficient to authorize a court or jury to presume an actual marriage between the parties, by a contract in presentí, at the commencement of such matrimonial cohabitation.
    ’S'he acts and declarations of a man and woman and other attending circumstances, during their cohabitation together, being part of the res gesta, are proper evidence to show the character of their intercourse; whether it was matrimonial or meretricious.
    But general reputation as to the character of such intercourse, after it had ceased, or the declarations and admissions of the parties made subsequent to that time, are not legal evidence to rebut the presumption of an actual marriage arising from such cohabitation and other acts, and to establish the fact that their children are illegitimate.
    Declarations of parties and other attending circumstances, to be admissible in evidence as a part of the res gesta, must be contemporaneous with the main fact under consideration and to which they are intended to give a character.
    It is not a matter of course to commit the guardianship of the estate of a lunatic to those who are presumptively entitled to it upon his death, as his heirs or next of kin. But they will be appointed the committee of the lunatic’s estate where it satisfactorily appears to the court that they are the persons who are the most likely to protect his -property from loss.
    Where a lunatic resides in another state and has property in the hands of his committee appointed at the place of his residence, that property is the primary fund for the support of the lunatic, and should be first applied for that purpose by the committee who has the control of his person.

      Augusts.
    This case came before the court upon exceptions to the report of a master, to whom it was referred to inquire and report who were the next of kin and heirs apparent of B„ Taylor, a lunatic, and also to report who was or were the most proper person or persons to be appointed the committee of his estate. From the testimony before the master it appeared that Taylor was married to his first wife in 1797, and had by her four daughters; the youngest of whom was born in July, 1803, about seven weeks before the death of her mother. At the death of the first Mrs. Taylor, in September, 1803, Anne Connell, the reputed second wife, was living in the family and continued to reside there and to take care of the children. And a few days after the death of their mother she went with those children and Mr. Taylor to the residence of his father-in-law, in New-Jersey, and continued there two or three months while the yellovt7 fever prevailed in New-York, and then returned with them to the city. In the summer or fall of 1804 Mr. Taylor introduced her to his friends and others as Mrs. Taylor. And from that time he publicly recognized her as his wife, and continued to cohabit with her as such, until he left his residence for England, in May or June, 1816. During all that time and afterwards, she was called Mrs. Taylor, and was reputed to be his wife, and was recognized by the children of the first marriage as their step-mother ; they in addressing her always calling her ma. While she and Mr. Taylor were thus living and cohabiting together apparently as husband and wife, they had one son and three daughters, the eldest of whom was born in the latter part of May, 1805. And the names of all these children, with the times of their respective births, were entered by their father in his family bible, in connection with those of his children by the first marriage, as “the family of Benjamin Taylor.” About tw7o months after he left for England Mrs. Anne Taylor had a fifth child, whose name was aftenvards entered in the bible with the others, by Timpson who had married the eldest daughter of Taylor by his first wife. The eldest son by the second wife accompanied his father to England to be educated there, and remained there until the return of his father who remained in Europe about thirteen years. During the whole of that period the second Mrs. Taylor continued to reside in the house of her reputed husband, in New-Yorlr, as the head of his family in his absence ; and all his children except such as were married were supported out of his property. On his return to this country, in 1829, he came by the way of Canada and stopped and spent the ensuing winter at Albany, without visiting his family in New-York. And it did not appear from the testimony before the master that he ever recognized Mrs. Taylor as his wife afterwards.
    The parties who contested the validity of the second marriage, before the master, were the three youngest daughters by the first wife, and J. Hammond, the husband of one of them. And those who supported it were the eldest daughter and her husband, together with the surviving children of the second marriage; except the youngest son who resided in one of the southern states. Upon the reference, the counsel of Hammond and his wife, and of the other two daughters who acted with them, for the purpose of showing that the intercourse between their father and the second Mrs. Taylor was not matrimonial but illicit, offered in evidence a letter written by her to him, in the summer of 1822, during his absence in Europe ; in which letter, as the counsel of the parties offering it insisted, she admitted that she was never married to him. They also offered in evidenpe, for the same purpose, a mutilated paper, in the handwriting of the lunatic, purporting to be dated about eight years after his return from England, headed u Benjamin Taylor’s advice to his executors, administrators and assigns concerning the property confided to their disposal in which paper he declares that he and the second Mrs. Taylor were never married, but says he is certain that the omission of that ceremony is no sin when it arises out of circumstances like those in which he was involved. The master rejected the testimony offered, as illegal and improper ; as he did also several letters written by Taylor, the lunatic, after his return from Europe. He also refused to permit an enquiry as to the declarations of Mrs. Taylor upon that point, after her cohabitation with him had ceased.
    The master decided and reported that the four surviving children of the second Mrs. Taylor, as well as the children of the first wife, were the next of kin of the lunatic, and would be his heirs at law if he were then dead. But still he reported in favor of the committee named by those who contested the validity of the second marriage, instead of the husband of the lunatic’s oldest daughter, and the eldest son by the second wife, who were nominated as the committee on the other side. Each party excepted to the part of the report which was adverse to their claims before the master.

      T. Sedgwick, for Hammond and wife, and the two sisters of Mrs. Hammond, who acted with her.

      J. Howe § C. Taylor, for Timpson and wife and the three oldest children of the second Mrs. Taylor.
   The Chancellor.

The principal and most important question in this case, so far at least as the feelings of the children of the second Mrs. Taylor are concerned, although it is but incidental to the decision of the question wdio shall be the committee of the estate of the lunatic, is as to their legitimacy. Upon that question, however, from the evidence in the case, I think there is no ground to doubt that there was an actual marriage, by a contract in prasentí, between B. Taylor and Ann Connel, as early as 1804 ; although there is no proof that a marriage ceremony, in the usual form, actually took place. It is evident from the testimony that Taylor introduced that young woman, who then resided in his family, to some of his friends as Mrs. Taylor, about a year subsequent to the death of his first wife; that at the expiration of about the ordinary period of gestation thereafter her first child was bom ; and that for the period of eleven years subsequent to that event he continued to cohabit with her as his wife and to hold her out to the world as sustaining that honorable relation to him. These facts alone would be sufficient to authorize any court or jury to presume an actual marriage between the parties, by a contract in prcesenti, in the summer or fall of 1804, and that her intercourse with him was connubial and not meretricious subsequent to that period; even if there was reason to believe that an illicit connection had before existed between them. (Fenton v. Reed, 4 John. Rep. 52. Rose v. Clark, 8 Paige’s Rep. 574. Starr v. Peck, 1 Hill’s N. Y. Rep. 270.) And when, in addition to this, we take into consideration the other facts in the case, I think no one can doubt that there had been an actual and legal marriage between the parties previous to the birth of any of the children whose legitimacy is now attempted to be called in question by some of their sisters of the half blood. It appears by the family record kept by Taylor, previous to his departure for England in 1816, that he entered the names of the four children of the second wife who had then been born in such record with his own hand, in the same manner as he had therein before recorded the names of the children of the first marriage; except that those were entered therein as his children by Mary Barker— which was the maiden name of his first wife. It is also proved by many witnesses that all the children of the first marriage, even after they had arrived at womanhood, continued to recognize the second Mrs. Taylor as the lawful wife of their father ; respecting and treating her as such, and calling her at all times by the familiar title of ma, as well after as before his departure for England. That fact is wholly inconsistent with the supposition that either of them then believed she sustained any other than that honorable relation to him and them. The testimony also establishes the fact that down to 1822 the general reputation existed, among all those who were acquainted with the family, that the lady who was living with Mr. Taylor was his wife. At least it does hot appear to have been ever questioned by any one after two or three months from the time when their cohabitation commenced, in the summer of 1804. The testimony of Joseph Taylor, the nephew, that it was the general reputation that she was not his wife, is so directly in conflict with the testimony of all the other witnesses who were acquainted with the parties previous to Taylor’s departure for England, in 1816, that it cannot be credited. What he says as to her intercourse with Mr. Taylor having commenced immediately after the death of the first Mrs. Taylor, is also rendered altogether improbable from the fact which is testified to by other witnesses, that a very few days after the death of his first wife, B. Taylor went with Ann Connel and his children to the house of his father-in-law, in New Jersey, to reside, and remained there two or three months. If he was capable of such shameless conduct as some of his children are now attempting to prove against him by this witness, it appears to be wholly incredible that he should have taken his paramour into the house of the father and mother of the first Mrs. Taylor, immediately after committing the remains of that wife to the grave. Such conduct, too, is wholly inconsistent with the fact that Mr. Taylor has at all times sustained a fair character, and that his second wife was a kind and attentive mother to the children of the first marriage as well as to her own.

General reputation as to the character of the intercourse between these parties, created by the stories which had been set afloat about the time of the writing of the letter of July, 1822, was not legal evidence to rebut the presumption of the marriage arising from other facts in the case. As it was not a part of the res gestee., it could not be legally used for the purpose of giving a character to the cohabitation which had terminated many years before. For the same reason, declarations or admissions of Mr. or Mrs. Taylor, made subsequent to that time, could not be legal evidence upon the question of the legitimacy of the children, who were born while their parents lived together and were holding themselves out to the world as husband and wife. Declarations of parties, and other attending circumstances, in order to render them admissible in evidence as a part of the res gesta, must be contemporaneous with the main fact under consideration and to which they are intended to give character. Thus, if a man and woman are cohabiting together, and the question to be decided is whether the character of her intercourse with him is matrimonial or meretricious, the declarations of the parties during the existence of such intercourse, the fact of their appearing in public with each other as husband and wife, of their visiting in respectable families, and of their being treated by their acquaintances and spoken of by them as sustaining that relation to each other, constitute a part of the res gesta, showing the character of that intercourse to be matrimonial and virtuous. And cotemporaneous declarations and attending circumstances of a different character, would be legal evidence from which the conclusion might legitimately be drawn, that the intercourse between the parties was illicit and dishonorable.

I have, however, looked into the letter of July, 1822, and into the paper of 1837 said to be in the hand-writing of Mr. Taylor and to have been found among his papers, and I can see nothing in either to induce me to believe 'there was not a marriage in fact between these parties, previous to the birth of all of the children whose relationship to the lunatic is in question. From the letter of Mrs. Taylor, I infer that at the time she wrote it she had been led to suppose her marriage could only be established by the certificate of a clergyman, or magistrate, or by other direct proof; or at least by the admission of the husband that the marriage ceremony in the usual form had actually taken place. And from the paper said to be in the handwriting of Taylor, if it did not bear upon its face some strong marks of subsequent mutilation, as well as evidence of incipient insanity in the writer at the time it was written, it might be inferred that he supposed there could be no legal marriage except by the performance of the cere<mony in the usual form; and that a private marriage contract between the parties themselves was not a legal marriage. But if that paper is legal evidence of any thing, it goes strongly to confirm the presumption arising from the other proofs that there was in fact a contract of marriage between the parties themselves. For no other rational construction can be given to his declaration that he is certain the omission of the ceremony of marriage is no sin, when its omission arises out of circumstances like those in which he was involved.

The master having in this case arrived at the correct conclusion, that the children of the lunatic by the present Mrs. Taylor were equally legitimate with those by the first wife, the exceptions on the part of Hammond and wife and of the other two daughters who act with them must be overruled.

Although it is not a matter of course to commit the guardianship of the property of a lunatic to those who would be entitled to it, at his death, as his heirs or next of kin, there are in this case several reasons why the committee named by those who have supported and established the validity of the second marriage should be preferred to the committee proposed by the adverse parties. Timpson, one of the committee thus named, having married a daughter of the first wife, has a common interest with the other three children of that marriage in protecting the property against any unreasonable charges thereon for the maintenance of the second wife or her children. And he having also been well acquainted with the situation of the lunatic’s property and affairs for the last 25 years, and his wife having a contingent interest in the estate, he will be more likely to protect the property from loss than a mere stranger. The other person named to act with him is the son. of the lunatic by the last wife. He is, therefore, interested in preserving the property from loss. And being a lawyer, he will be able to save considerable expense to the estate, in the way of legal advice, in the management of the property. The exception to the report, so far as relates to the persons named by the master as committee of the lunatic, must therefore be allowed. And J. Timpson and C. Taylor are to be appointed the committee of the estate of the lunatic, both real and personal, which is situated in this state, upon their giving a bond, in the usual form, in the penalty of $12,000, with two sufficient sureties to be approved by Master Codwise, conditioned for the faithful performance of their trust as such committee. The costs of the execution of the commission, not exceeding the amount specified in the 162d rule, are to be paid out of the estate, to the solicitor of the petitioners upon whose application the commission was issued. And the committee are also to pay to the solictor of Timpson and wife and of the children of the second marriage his costs upon their petition for the appointment of a committee, and on the reference, and upon the exceptions to the master’s report; after such costs have been duly taxed.

As it appears the lunatic is now in the state of Connecticut, and has a committee of his person and estate appointed there, no committee of his person will be appointed here for the present; nor will any provision for his support be made out of his property in this state until his property in the hands of his committee there shall have been exhausted, so far as to render a further provision necessary. But the committee of his estate here are to be authorized to make such further provision for his support as they shall think necessary or proper, whenever they shall be satisfied that the estate in the hands of the committee in Connecticut has been exhausted. The committee are also to provide for the support of the wife of the lunatic out of his estate; and to pay or allow such sums as have been necessarily and properly expended by others for her support, subsequent to the time when her husband was found to be lunatic in the state of Connecticut.

Order accordingly.


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    The Farmers’ Loan and Trust Company vs. Millard and others.
    Where a junior incumbrancer puts in a claim to the surplus monies, arising upon a foreclosure and sale of mortgaged premises, when he knows or has reason to believe that the previous incumbrances upon the equity of re. dcmption are sufficient to exhaust the whole of such surplus monies, he may be compelled to pay the costs to which the prior incumbrancers have been subjected by reason of his claim.
    But where the junior incumbrancer puts in a claim to surplus monies in good faith, and upon grounds from which he has reason to suppose that the claims of the prior incumbrancers to the surplus monies cannot be sus. tained, the court in its discretion may refuse to charge him with the costs to which such prior incumbrancers have been subjected in consequence of his claim.
    August 2.
    This was an application by Hayden and Montross, two of the judgment creditor’s of G. Webb, one of the defendants in this suit, for the surplus moneys arising upon the sale of mortgaged premises; and to compel C. Webb, a subsequent mortgagee, to pay the costs to which they had been subjected by the litigation of their claims before the master. The master’s report was confirmed, without any exceptions having been filed thereto. So that no question arose before the chancellor as to the distribution of the surplus fund. But as the whole surplus was not sufficient to pay the liens of the petitioners, including the costs of the reference and prior liens thereon, they insisted that C. Webb, upon whose application the order of reference had been made, ought to pay the costs to which they had been subjected in litigating their claims upon the reference.

      M. T. Reynolds, for the petitioners.

      Otis Allen, for C. Webb.
   The Chancellor.

The counsel for C. Webb insists that inasmuch as his client succeeded in showing that he had a subsequent mortgage, which was a lien upon the equity of redemption, and which was due and unpaid at the time of the foreclosure, he had not failed to establish his claim, so as to render him liable for costs under the provisions of the 136th rule of this court. Such, however, is not the fair construction of the last clause of that rule. To exempt the claimant from liability for costs, he must establish his claim to the surplus moneys or to some part thereof. And if a junior incumbrancer of the mortgaged premises, knowing or having reason to believe there are older incumbrances upon the equity of redemption sufficient to exhaust the whole of the surplus moneys raised upon the master’s sale, puts in a claim to such surplus or any part of it, and thereby subjects others who are equitably entitled to the whole surplus to unnecessary costs, he may be compelled to pay the extra expense to which they have been put by reason of his false claim. The costs in cases arising under this rule, however, are in the discretion of the court. And the affidavit of C. Webb shows that his claim was made in good faith, on gr'ounds from which he had reason to suppose the claims of these petitioners upon the surplus moneys could not be sustained ; and consequently that he, as the next incumbrancer, would be entitled to the residue of the fund after satisfying the lien of Millard, the first incumbrancer. The fact that a jury had pronounced Hayden’s judgment usurious, upon a feigned issue awarded for that purpose, was of itself a sufficient ground for resisting that claim before the master ; although a new trial of that issue had been awarded. Under the circumstances of this case, therefore, and considering the fact that Webb will have to pay the costs of the order of reference, and of so much of the proceedings as have been carried on for his benefit or at his request, I do not think he ought to be charged with any of the extra costs to which the petitioners have been subjected in establishing their claims upon the surplus moneys. But neither party is to have costs as against the other on this application.


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    Lane vs. Stebbins & Stebbins.
    The court of chancery compels a discovery in aid of the prosecution of a suíiat law, upon the same principles and to the same extent that it compels a discovery in aid of the defence of a suit.
    A party to a suit at law cannot he compelled to discover the grounds of hie claim in such suit. But the complainant in a bill of discovery must state; some fact, which is material to the prosecution or defence of the suit at law, which he wishes to establish by the answer to the hill.
    It is not sufficient, in a bill of discovery, for the complainant to aver that the matters as to which a discovery is sought are material to his defence in the suit at law ; but he must state his case in such a manner, in his bill, that the court can see how the matters of which a discovery is asked may be material, upon tire trial of the suit at law.
    August 2.
    This was an appeal from a decision of the vice chancellor of the first circuit overruling a demurrer to a bill of discovery. The object of the bill was to obtain a discovery to aid the complainant in a suit at law j or rather to aid him in resisting an offset, which tile defendants had claimed in the suit at law, in a notice annexed to a plea of the general issue which had been pleaded in that suit. The complainant after stating the commencement of the suit at law, and the bills of particulars of the demands or claims of the parties respectively as they had been furnished by such parties in that suit, alleged that the defendants were brokers and dealers in stocks in the city of New-York, and were such at the several times mentioned in the bill of particulars of their claim of set off. He further alleged that they claimed to charge him with cash paid, in July, 1838, for fifty shares of the stock of the State Bank of Illinois, at the price of $101,87 a share, in addition to their charges for commissions in making the purchase; which stock they claimed to have held for him until October, 1839, and then to have sold the same on his account for $54 a share, including their charge for commissions on such sale; and • that they also claimed that while they so held such stock for him, they hypothecated it to raise money thereon to enable them so to hold it for him. The complainant further charged, in his bill, that during a part of the time mentioned in the bill of particulars of the defendants’ set off, he was absent from New-York, in the state of Maine, and that during such absence he wrote several letters to them, of which he preserved no copies, and was therefore unable to state, and did not recollect, the contents of such letters; that the defendants refused to permit him to look at such letters, or to inform him to whom the Illinos bank stock had been hypothecated, and when and upon what terms, or to permit him to look at the entries thereof in their books : and that he was therefore uninformed and ignorant whether the stock was ever hypothecated, and if so how often, and to whom, and for what sums ; in all which particulars he was advised it was his right to be informed by the defendants; and that without a discovery of such particulars, as he was advised by his counsel and verily believed, it was unsafe for him to proceed to the trial of his action at law. He therefore prayed a discovery as to who were the holders of such stock, between the 4th of August, 1838, and the alleged sale thereof, on his account, in October, 1839 j whether the same was for any length of time, and when, and how long, and how often, held by the defendants ; whether the same was hypothecated or transferred between those periods, and if so, when and to whom, and how often, and for what sums of money. The bill also contained allegations, substantially the same, as to claims made by the defendants arising upon alleged purchases and sales of stock of the Bank of Kentucky and other institutions, at different times; in relation to which he prayed for a full discovery of all the particulars. The bill further charged that, for the purpose of inducing the complainant to engage in the purchase of stocks, H. G. Stebbins, in behalf of himself and the other defendant, who was Iiis partner, proposed to purchase and sell stocks for him at half brokerage ; that upon the complainant’s departure from New-York, in May, 1839, he gave instructions to the said H. G. Stebbins, that the defendants should not let any stocks, in which he might be interested, which should be in their hands or over which they could exercise any control, fall on his hands ; that a short time previous to such departure, the said H, G. Stebbins proposed and stated in effect, to the complainant, that if any stocks which should be purchased for him or on his account, on credit, could not be sold without a loss at maturity of the credit, the defendants would hypothecate such stocks until they could be sold; that he also stated that stocks of good character yielding an interest or dividend of eight per cent would not remain long under par, so long as they could be hypothecated at seven per cent, and that the complainant therefore ran no risk in purchasing stocks, as to all of which matters the complainant alleged he had no means of proving the same except by the discovery of the defendants; and that he was advised by his counsel that such discovery was material and necessary to the prosecution of his suit at law, and without which discovery he could not safely proceed to trial in such suit.
    The defendants answered and denied the allegations in the bill as to the proposal to purchase and sell stocks for the complainants for half brokerage; as to the instructions relative to suffering stocks to fall on the complainant’s hands • and as to the promise to hypothecate the stocks purchased on a credit until they could be sold without loss, &c. And as to the residue of the discovery sought by the bill the defendants demurred, upon the ground that the case made by the bill did not entitle the complainant to a discovery.

      F. B. Cutting, for the appellants.

      G. Jf. Titus, for the respondent.
   The Chancellor.

The object of the bill in this case appears to be to obtain a discovery, for the purpose of resisting a claim of set off on the part of the defendants to the complainant’s suit at law. And if a proper case for discovery, in other respects, is made by the bill, there cannot be a reasonable doubt that this court is bound to lend its aid in compelling the discovery sought, in the same manner and to the same extent as if these defendants had brought a suit at law against him to recover the several sums which they now seek to set off in the action brought by him in the superior court. I think, however, the bill is defective in not stating a case which shows that the discovery sought is material to resist an illegal or inequitable claim of set off. On the contrary, it appears to be a mere fishing bill, at least in the part thereof which is demurred to, for the purpose of ascertaining the grounds of the claim of set off specified in the bill of particulars furnished by the defendants in the suit at law. The complainant does not, in this part of his bill, set forth any matter material to his defence against the alleged claim of set off which cannot be proved without the discovery sought of the defendants. It therefore appears to come within the decision of Lord Rosslyn in Joy v. Kekewich, (2 Ves. Jun. 679;) where the complainant was not allowed a discovery of the facts upon which the defendant relied to support his claim in the suit at law. In the case of Newkirk and wife v. Willett, (2 John. Ca. 413,) the court for the correction of errors in this state held that such a bill could not be sustained. Mr. Justice Kent, in delivering the opinion of the court in that case says, <( Unless the party calling for the discovery will state some matter of fact material to his defence, which he wishes to substantiate by the confession of the defendant, the court will not enforce a discovery.” It is not sufficient in a bill of discovery to allege that the matters as to which a discovery is sought are material to the defence ; but the complainant must state his case in such a manner that the court' will be able to see how they may be material on the trial of the suit at law. (3 John. Ch. R. 47.) In the case of Metcalf v. Harvey, (1 Ves. Sen. 249,) Lord Hardwick appears to have decided that a person in possession of an estate, against whom another had brought an ejectment, might bring a bill against the plaintiff in that suit to compel him to discover the title under which he claimed to oust the complainant of the possession of the premises. This case, however, does not seem to have been followed in England ; and it also appears to be inconsistent with the subsequent decision of his lordship, in Burden v. Dore, (2 Ves. Sen. 445.) And it is certainly in conflict with the cases of Joy v. Kekewich, and of Jfewkirlc and wife v. Willett, before referred to, and with the case of Adderly v. Sparrow, cited by Lord Redesdale in his valuable treatise on equity pleading. (Mitf. 190.) Chancellor Kent put his decision in Kimberly v. Sells, (3 John. Ch. Rep. 467,) upon the special circumstances of that case, without intending fully to endorse the opinion of Lord Hardwick in Metcalf v. Harvey. In the case under consideration I think it impossible to sustain the decision of the vice chancellor, as to the discovery sought, without opening a door to every person who is sued at law to file a bill of discovery calling upon his adversary to state the grounds of his claims, instead of applying to the court of law for the particulars of the plaintiff’s demand against him $ which bills of particulars the courts of law always direct to be given, so far as is necessary, for the purpose of enabling the defendant to know what the precise nature of the claim of his adversary is.

The order overruling the demurrer of the appellants must, therefore, be reversed; and the demurrer must be allowed, with costs. And the proceedings are to be remitted to the vice chancellor.

Order accordingly.


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    Paterson & Mack vs. Bangs & Alcott.
    Where one of the defendants in a suit at law, after the entry of a judgment in such suit, filed a bill in chancery for relief, stating that he could then prove his defence to such suit by one of his co-defendants therein; but it appeared that such co-defendant was bound to indemnify the complainant against the judgment, and there was no averment in the bill that the complainant had released the witness or intended to release him from liability ;
    Held, that such bill could not be sustained as a bill for relief.
    Where the defence to a suit at law is common to all the defendants in such suit, they are all necessary parties to a bill for an injunction to stay the proceedings at law.
    As a general rule the complainant who is sued at law and has a legal defence to such suit, and who only needs the aid of the court of chancery to obtain a discovery to enable him to establish such defence, must come into the court of chancery for his discovery before the trial at law.
    Whether the court of chancery will, in any case, after judgment in a suit at law, entertain a bill setting up a defence to such recovery which the complainant might have availed himself of at law if he had filed a bill of discovery in due time; Quaere ?

    August 2.
    This was an appeal by the complainant Paterson, and by E. D. Smith the assignee in bankruptcy of Mack the other complainant, from an order of the vice chancellor of the eighth circuit, denying an application for an injunction.
    The facts in the case were substantially as follows:
    In June, 1837, F. W. Paterson and E. Avery, who were engaged in milling business at Rochester under the co-partnership name of Paterson & Avery, together with T. J. Paterson and J. F. Mack, the complainants in this suit, as their sureties, entered into an agreement with the defendants, who were commission merchants at Boston, by which the latter were to accept the drafts of Paterson & Avery, from time to time, for the purpose of purchasing wheat to be manufactured into flour and sent to the defendants to be sold on commission to meet such drafts ; and by which agreement Paterson & Avery, and the complainants, as their sureties, covenanted that Paterson & Avery should^ on the first days of January and July in each year, account with the defendants for all acceptances before then made by them of such drafts, and should, at such accountings, leave in their hands flour sufficient to cover all such acceptances, together with commissions, or should pay the deficiencies, if any, in money. Paterson & Avery having failed to meet their drafts in flour, or to pay the deficiency according to the agreement, the defendants, in February, 1838, commenced a suit against them and their sureties ; and in October, 1839, recovered judgment against them upon their agreement, for $7779,18, besides costs, upon a report of referees. This judgment was stayed by an application to set aside the report until October, 1841, when the decision of the referees was confirmed by the court. Pending that suit the complainants filed a bill in this court; and obtained an injunction to stay the proceedings at law, and to obtain such injunction they gave a bond, with O. E. Gibbs and W. E. Lathrop as their sureties, conditioned for the payment of all monies which might be recovered in such suit at law for debt and costs, and for the payment of the costs of the suit in this court, as required by the provisions of the revised statutes. The injunction having been dissolved, and the judgment at law perfected, Bangs and Alcott applied to have the bond delivered up to them to be prosecuted. The complainants thereupon filed their bill in this cause, stating, among other things, that the proceeds of some of the drafts of Paterson & Avery had been remitted to the defendants in money, and applied by the latter in payment of drafts drawn and accepted previous to the agreement of 1837 ; which was substantially the same matter that had been attempted to be proved as a defence in the suit at law on the agreement. The complainants also alleged, in their bill, that the answer of the defendants in the former suit, containing as it did a denial of the knowledge of material facts which could now be established by the testimony F. W. Paterson, one of the defendants in the suit at law, rendered it unsafe for them to use such answer as a defence in that suit; hut that, as they were now advised, he could be used as a witness in this court in their favor, and that he was well acquainted with all the facts constituting the defence which they attempted to set up and prove in the suit at law. The complainants thereupon expressly waived an answer on oath from the defendants, and prayed for an injunction to restrain such defendants from prosecuting a suit at law against them and their sureties, upon the bond, until the coming in of the answer and the further order of the court, and for general relief. Subsequent to the filing of this bill, Mack, one of the complainants therein, was duly declared a bankrupt, and Smith was appointed his assignee. The other complainant and Smith the assignee thereupon presented a petition to the vice chancellor, stating the filing of the bill and the contents of the same ; that subsequent to the filing of the bill an order had been made for the delivery of the bond to the defendants, to be prosecuted, and that a suit had been* commenced thereon, against the complainants and then-sureties in the supreme court; and they prayed that an injunction might be issued according to the prayer of the bill. The vice chancellor, upon hearing of the parties, denied the application with costs. From which decision the petitioners appealed to the chancellor ; who, upon the opening of the argument, stated that it appeared that the official assignee of the complainant Mack was not-a party to the suit, and had no interest whatever in restraining a suit against Mack or his sureties ; that he was not there-, fore a proper party to the petition, nor to the appeal; and that Gibbs and Lathrop the sureties were necessary parties to a bill for an injunction to restrain a suit at law against them jointly with the complainants. The counsel for the respondents, for the purpose of disposing of the case upon the merits, thereupon consented to waive these objections of form for the purposes of this appeal merely.
    The following opinion was delivered by the vice chancellor :
    Whittlesey, V. C. This is another of those cases in which it becomes necessary to determine whether the circumstances attending it will authorize the court of chancery to review the adjudication of another tribunal. The general rule applicable to this class of cases is reported almost verbatim in a number of cases. Any fact which clearly proves it to be against conscience to execute a judgment, and of which the injured party could not have availed himself in a court of law j or of which he might have availed himself at law, but was prevented by fraud or accident, without any fraud or negligence in himself or his agent, will justify an application to a court of chancery, {The Marine Ins. Co. v. Hodgson, 7 Graneh, 236. Duncan V, Lyon, 3 John. Ch. Rep. 356.) From the numerous cases which I have examined bearing upon the subject, I deduce another rule, which is this : that if a party has the means of defence within his power, whether those means are available at law, or only available in this court by bill of discovery or relief, and the party knows of the existence of these means before the trial at law, and neglects to use them, and goes to trial at law upon other proofs and other questions, and fails, the court will not afterwards give him relief. I believe it is the spirit of all the cases, that a party must avail himself of every means of defence within his knowledge and power at the time of going to trial, or he will, be afterwards precluded from urging it. Judge Kent says, in Le Grun v. Governeur Sr Kemble, (1 John. Cas. 502,) “Every person is bound to take care of his own rights and to urge them in due season and proper order. This is a sound and salutary principle of law. Accordingly, if a defendant having the means of defence in his power neglects to use them, and suffers a recovery to be had against him by a competent tribunal, he is forever precluded. (See also Lansing v. Eddy, 1 John. Ch. Rep. 49.) Lord Hardwick says, that a court of equity will not always relieve against a verdict when the defendant submits to try at law first, when he might by a bill of discovery have come at the fact by the plaintiff’s answer upon oath before any trial at law was had. (Williams v. Zee, 3 Atlc. 223.) It is upon the ground that the party was ignorant of a material fact without any inattention or negligence on his part, so that he could not use it in any way until after the trial at law, that this court will in some cases give relief after judgment when justice demands it. (See Bateman v. Wilton, 1 Sck. $ Lef. 201; Simpson v. Hand, 1 John. Ch. Rep. 91; Smith v. Lowery, Id. 320; Beecher v. Elkins, 465 ; Bodge v. Strong, 2 Jo An. CA. JRep. 228; -Foster v. IFcod, 6 Id. 87.)
    A court of chancery will not relieve against the negligence of a party ; and I have supposed that if a party knows enough of his case before the trial at law, to know that his defence is not available at law, but that he can only succeed in this court upon a bill for relief, and neglects to file such bill, and goes to trial at law and fails, that it is such negligence that he will not afterward be entitled to relief here.
    The complainants’ counsel supposes this case is similar in its construction to that of Horton v. Woods, (5 Paige’s Rep. 249.) In that case the general principles governing the interference of chancery with judgments at law were discussed and passed upon, although the complainant finally failed from a deficiency of proof to sustain the allegations of his bill. (S. C., 22 Wendell’s Rep. 520.) In that case the complainant endeavored to introduce proof of his defence at law, but it was ruled out both at the circuit and by the supreme court. It was a case where the proof of the defence was to come from the admissions of the opposite party, though only a nominal party ; and the proof was ruled out because the party who made the admissions had parted with his interest before they were made. It was a case where a bill of discovery could not aid the defendant at law. It could only be aided by a bill for relief; and it does not appear from the case that the defendant at law knew that he could have aid only by bill of relief until after the trial at law. The only opinion delivered in the same case, in the court for the correction of errors, seems in that case to hold the judgment at law final, and not proper to be recovered by a court of chancery, though the decision of that court was upon the failure of the complainant to prove the allegations in his bill. (22 Wend. Rep. 50.)

      In the case now before us the proof that the complainants wanted was the testimony of one of their co-defendants at law—proof which, of course, could not be reached by a bill of discovery. They did seem to suppose that a bill of discovery against the plaintiffs at law would furnish the necessary proof. They tried the experiment, and the proofs thus elicited were not such that the defendants were willing to use the answers on the trial at law. They knew then, before going to trial, that- they must either file a bill in this court for relief, so as to secure the testimony of one of their co-defendants, or that they must go to trial upon such proofs as they had. All the facts which had a bearing upon their case had been within their knowledge. They chose to go to trial at law, trusting to succeed upon the proofs which they could extract from the accounts of the opposite party, of which they had copies in their possession ; and also before the supreme court on a motion to set aside the report. The only question now is, can they come here after deliberately going to trial at law, with a full knowledge of the facts of their case 1 I will suppose that the agreement set up on the trial was only prospective in its operation, as I certainly so consider it. I will suppose that F, W. Paterson was the only witness by whom it could be proved that the previous indebtedness of Paterson & Avery was paid out of the proceeds of drafts drawn after the date of the agreement—that if such a state of facts had been proved, the report would have been in favor of the complainants, and that F. W. Paterson could not be used as a witness, because he was a party to the record. Still all these facts were known to the complainants before the trial at law ; and if the legal inference from the facts are such as the complainants’ counsel draws, they could have succeeded in this court on a bill for relief filed before the trial at law. The only question then is, was there such negligence on their part in not filing such a bill before the trial at law, as to preclude them from resorting to this court now, in that shape 1 If the general rules which I have heretofore deduced from the cases are sound, this was such negligence as to preclude them now from calling in question the judgment at law. They have chosen to abide by one species of defence and neglect another. They have chosen to go to trial to one tribunal, with full knowledge according to their own views of the case, that they had ample relief in another. They neglected to resort to a forum which would give them certain relief and run the chance in their means at law. There was no surprise at the facts, no accident to shut out their proof, no fraud to suppress them. There was only disappointment as to the result. It appears to me that to permit them again to be heard here under such circumstances, would be to permit parties to experiment, upon the chances of litigation in the different courts than the spirit of our laws would tolerate, and to protract litigation and postpone the final termination of legal controversies much longer than the policy of o.ur laws deems allowable -or proper.
    In coming to the conclusion to which I have arrived, I lay out of the question the fact that it does not appear that these complainants will be injured by the judgment against them, as it does not appear that Paterson & Avery are insolvent. I lay out of view several other considerations of a rather technical nature, and prefer to place my decision upon the ground above suggested, as involving an important principle, not perhaps yet definitely decided. The motion to make the injunction absolute is denied, and the temporary injunction allowed is dissolved with costs against the complainants to be taxed.

      O,, Hastings, for the appellants.

      J. W. Gilbert, for the respondents.
   The Chancellor.

Independent of the objection for the want of proper parties, which was waived on the argument, the vice chancellor was right in refusing to grant an injunction in this case. This is not a bill of discovery, as the answer on oath is waived. The question therefore does not arise whether this court will in any case, after a judgment at law, entertain a bill to set up a defence in equity which the party, by the aid of a bill of discovery, might have availed himself of as a defence in the suit at law. The general rule unquestionably is, as stated by the vice chancellor, that the complainant must come here in the first instance, if he has a legal defence and merely wishes the aid of this court to enable him to establish such defence, either by a bill of discovery or otherwise. And in this case the complainants had no defence in this court, to the joint suit against them and Paterson and Avery upon the joint agreement, which they could not have availed themselves of in the suit at law with the aid of the discovery obtained by the answer of-these defendants to a proper bill filed for that purpose. The defence, if any, in the suit at law was a defence to the principals as well as to the sureties in the agreement, as it went to the whole cause of action against any of the defendants in the suit upon the covenants contained therein. In cases of that kind all the defendants in the suit at law, which is sought to be enjoined, are necessary parties to the injunction bill in this court. (Bailey v. Inglee, 2 Paige’s Rep. 278. Morse v. Hovey & Thayer, ante, p. 197.) In the case of Miller v. McCan, (7 Paige’s Rep. 452,) the complainant sought to establish a defence arising subsequent to the giving of the note which he signed as a surety; and which defence would not prevent the recovery of a judgment against his co-defendant in the suit at law.

Again 5 the person who is alleged to be the only witness, to establish the defence to the suit upon the agreement is bound to indemnify the complainants against the recovery in the suit at law, and is therefore an incompetent witness in their favor. And there is no allegation in the bill that they have released him or intend to release him from his liability. In the case of Beggs & Chester v. Butler Adams, (ante, p. 226,) this was considered as a material and necessary averment in a bill of this kind. Nor is the bill properly verified to entitle the appellants to an injunction ; for the complainants only state the material facts in the bill upon information and belief. This would indeed be sufficient upon an order to show cause, if the facts were charged as being within the personal knowledge of the defendants, so that they might have denied the truth of the allegations upon oath if the same were not as alleged in the bill. But in a case of this kind, where the complainants ask for a preliminary injunction upon facts which are not alleged to be known to the defendants, the complainants should have obtained the affidavit of the person from whom their information was obtained, and who could swear to the truth of what he communicated to the complainants as facts. I am also inclined to the opinion that the mere fact that monies remitted to the defendants, and by them applied to the extinguishment of the prior indebtedness, were in truth the proceeds of some of the drafts accepted by them under this agreement, would not of itself be sufficient to make it their duty to apply such monies to the extinguishment of the debts arising under the agreement. And that to constitute a valid defence to the action at law, a knowledge of the fact that the monies remitted and applied in payment of the previous indebtedness were the proceeds of subsequent acceptances should have been brought home to the defendants, at the time; so as to render them parties to the fraud which it is alleged Paterson and Avery committed upon the complainants, as their sureties, by thus applying the proceeds of the acceptances instead of remitting the same in flour to meet such acceptances according to the agreement. Without intending, however, to express any definitive opinion upon this point, I am satisfied that it would be an abuse of the process of injunction to delay these defendants thereby in the collection of their debt, against the sureties in the former injunction bond, without requiring the complainants to bring the money into court.

The order appealed from must therefore be affirmed with costs, to be paid by the appellants T. J. Paterson and E. D. Smith.