source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Colton vs. Dunham and Wadsworth.
    Where upon a loan of money, a premium or profit beyond the legal rate of interest is.cither directly or indirectly’secured to the lender, the loan will be usurious, unless it is attended by some contingent circumstances which subject the money lent to evident hazard.
    A mere nominal contingency, attended by no real hazard of the principal of the money lent, will not divest the transaction of its usurious character.
    The ordinary risk of the death or insolvency of the borrower, is not such a hazard of the money lent as will authorize the lender to reserve a profit on the loan beyond the legal rate of interest.
    If there is a negotiation for a loan or a advance of money, and the borrower agrees to return the amount advanced at all events, it is a contract of . lending within. the meaning of the' statute against usury; and if a profit beyond the legal rate of interest is reserved or agreed to be paid, the contract is usurious.'
    Under the regulations of the chamber of commerce, the agent is entitled to two and a half per cent, for effecting a loan of money and becoming securi- - ty for the re-payment thereof; but he is not entitled to an additional commission for paying over the money to the principal or upon his orders. ' . >
    Where a loan is to be repaid by an investment in merchandize for the lender, the merchandize must be estimated at its actual costs in specie or other circulating medium which is legal tender at the place of payment, and not at its nominal costs in a depreciated of fictitious currency.
    May 24th.
    . ■ Ikt December, 1824, the complainant was the owner of the brig Ortolan, and was about to proceed on a voyage from New-York to Rio Grande. Being short of funds" to complete the cargo of his brig, he applied to the defendants who were merchants in New-York, to assist him in completing the cargo, and proposed that they should advance $3000, "and become interested with him in the profits of the cargo' to that extent. The defendants finally agreed to make the advance of $3000, which was^ to be repaid by the complainant at Rio Grande, with addition of 20 per centum thereon by being invested in the purchase of. hides and horns on account of the defendants. This sum being insufficient to complete the cargo, a further loan was effected by 1 the complainant from the Pacific Insurance Company upon respondentia, and upon the guarantee of the defendants for its re-payment. This sum went into the defendant’s -hands,, together with a further sum of $500 received on account of passage money. The defendants charged a commission of two and a half per cent, for procuring the loan from the insurance company. Including that commission, and a, further commission of two and a half per cent, on the whole amount they either advanced to the .complainant, paid on his orders or expended for his benefit, the sum of $7483,33, leaving a balance due to them, according to their account rendered in January, 1825, of $3982,33. From, this sum $75 was deducted for some cause not explained in the pleadings in this suit; and the complainant gave them a written/agreement for the balance in the following terms: “Messrs. E. W. Dunham, & Co. New-York, Jan. 27, -.1825. , Gentlemen, Haying advanced me thirty nine hundred and seven T3„3T dol-‘ iars in cash and goods for the purchase of part of the cargo of the brig Ortolan, bound to Rio Grande, I hereby acknowledge- the receipt of that sum ; and as by our agreement you are to receive that sum at Rio Grande, with twenty per cent-um thereon, in lieu of the profits on the merchandize shipped in her, I hereby engage to pay you by vesting the above mentioned sum, with. the twenty per centum added, in Rio Grande, in hides and horns, and ship them to your address and for your account and risk, in the brig Conveyance, or any other vessel which you shall send out consigned to me. And as an inducement to you to send out the brig conveyance, or some other good vessel, to my address, I engage to freight with her at least three thousand five hundred hides at the rate of fifty cents each to New-York, besides horns at the usual freight, on my account or those of my friends, besides those to be shipped to your account. Your obedient servant, Walter Colton.”
    A further sum of $72,25 was paid for the complainant by the defendants after he left New-York, of which they soon after advised him. The defendants also shipped on board the complainant’s brig 100 barrels of flour, to be sold by him at Rio Grande, on their account; the profits on which were to be equally divided between the parties. The complainant arrived at Rio Grande about the middle of April after he left New-York, and disposed of his cargo early in May. The Conveyance did not arrive at Rio Grande until the first of August, at which time no part of the return cargo had been purchased by the complainant. On the 23d of October, 1825, the complainant shipped onboard the conveyance 558 dry ox and cow hides, and 100 arrobas of hair, for the purpose of paying the respondentia bond given to the insurance company ; and which were addressed as directed in the instructions of the defendants. The complainant also at the same time shippped 600 hides and 10,000 horns, on account of the defendants, for the payment of the advances made by them in New-York together with the premium thereon; and also two other parcels on account of the defendant’s share of the proceeds of the flour and a quantity of salt sold upon their account at Rio Grande. The complainant likewise shipped onboard the same vessel a quantity of. hqrse-hid'es and hair on his own account,-which were received" and sold by'the defendants. The average weigtit of the hides shipped to pay the respondentia -bond -was about six .pounds more than the. ■ weight of those shipped on account of the defendants, al- . though they were invoicéd at the same price. The defendants .insisted that the hides were bought" in numero, at the , same time and- at the same prices-; and that, in-the account" . of sales they should be averaged and credited according to their weight. The return cargo purchased on account of ' the defendants was invoiced and purchased in reas and mille- \ reas, the nominal currency of Rio Grande, and were charg-1 ed by Colton "at $1,25 for each millerea., Buf’the defendants, insisted that the Spanish milled dollar at Rio Grande was equal in value to a millerea, and that the accounts should be., stated accordingly. These as well as other difficulties having ; arisen in relation to thé adjustment of the balance between the parties,- the complainant filed -his bill in this .cause for an account ; and he insisted, among other things, that the agreement for the payment of twenty per centum on the advances, of the . defendants was unconscientious and usurious, and ought not-.to be enforced beyond, the legal rate of interest. The cause was heard on pleadings and proofs.

      S. A. Foot <£• *7. Greenwood,- for the, complainant.
    The ■ ■ 'contract for the payment to' the. defendants of 20 per. cent., npon their loan tó the complainant was usurious. This was a clear contract of lénding. The repayment of the. money - advanced depended'upon no contingency. ' Although the goods shipped for Rio Grande had been lost, yet the defendants, would have been entitled to repayment with 20 per cent." - interest.- The 20 per cent, was not to be paid out of the profits of the adventure. The investment of; the defendant’s loan in a return Cargo was for their benefit. (Jestons v. Brooke, Cowper, 793. Hoyer v. Edwards, id. 112.) Monies overpaid beybnd the legal interest in pursuance of-"an usurious - contract will be ordered' to be repaid. (Dey v. Dunham, 2 John. Ch. R. 182.), The ■ defendants are only entitled to legal interest from the time of the actual payment of their loan to the complainant. They are not entitled to a commission for paying over to the complainant the money loaned from the Pacific Insurance Company. Nor are they . entitled to any compensation for their guarantee of the payment of the notes taken upon the sale of the complainant’s goods. Their services in this respect were rendered without the complainant’s request. And they had no right to average the- weight of the hides ; but are bound to account, to the' complainant for the proceeds actually realized from the sale of the hides purchased on his" own account. As to the question whether the laws of Rio Grande or of New-York are to govern as to the construction and effect of the contract between the complainant and defendants, and as to the lex loci generally, the counsel cited Andrews v. Harriot, (4 Cowen’s Rep. 510 and note;) Thompson v. Ketcham, (4 John. R. 285 ;) James v. Allen, (1 Dallas’ Rep. 191 ;)Winthrop v. Pepoon, Otis Co., (1 Bay’s Rep. 468 ;) Slacum v. Pomery, (6 Cranch’s Rep. 221 ;) Lanusse v. Barker, (3 Wheaton’s Rep. 101, 146 ;) Kissam v. Burrall, Kirby’s Rep. 326 ;) Fanning v. Consequa, (17 John. R, 511;) Winthrop v. Carleton, (12 Mass. Rep. 4 ;) Gaillard v. Gaillard, (1 Nott & McCord’s Rep. 67 ;) Emory v. Grenough, (3 Dallas’ Rep. note, 370 to 377.)

      J. Talmadge, for the defendants.
    The loan to the complainant by the defendants was .not usurious. The hazard to the principal divests if of its usurious character. The profits upon the outward cargo to Rio Grande are extrava-, gant j but upon the return cargo a loss is always sustained.. This circumstance - puts at rest the question of usury. The compensation to the defendants was to proceed from the profits upon the outward cargo, and was not to be paid in the character of interest upon the sum loaned. The defendants were interested in the adventure. The commissions charged by them are authorized by commercial usage. And as they . sold a large quantity of hides for the complainant, it was just to average the result.
   The Chancellor.

It is admitted by the coúnsel for both parties that there must be a reference to state the accounts ■ between them ; but the court is at this time called upon to • decide certain questions" arising out- of the pleadings and proofs, by way of special directions to the master, settling the principles on which the accounts are to be stated. On the part" of the. complainant it is insisted, l.:Thát the agree-' ■ment to pay 20 per centum on the advances was illegal and usurious ; and that if it was not usurious, it was unconscientious and oppressive, and ought not to be enforced ; 2. That'the defendants are not entitled both to commissions and interest on their advances, except as to the articles actually purchased by themselves; 3 That they are entitled to no commissions on the- money loaned of the insurance company, except the two and a Half per cent, for procuring and guarantying payment of that loan ; 4. That they had no ' right to average the weight of the 558 ox hides. shipped on account of the respondentia bond, with those sent to the defendants on account of their advances ; and 5. That they. are not entitled to a commission for guarantying payment on the sale of the complainant’s hides and hair. The reverse of these propositions is contended for on the other side ; and the defendants also insist that the millerea of Rio Grande is only equal in value to a Spanish milled dollar, and that the hides and horns purchased for them in payment of their advances should have been charged at that rate only.- . .

In relation to the first, question,’ it is evident the agreement between the parties was in fact nothing but a loan or advance of money, to be repaid by the complainant on his arrival at Rio Grande, together with a premium of 20 per .cent-um on the loan! The English as well as the American reports are filled with cases arising out of the various devices and expedients which have been adopted to evade the provisions of the statutes which limit the rate of interest to be received on the loan or forbearance of money. But on examination it will be found there is a uniform and settled principle .running through, all these cases, with scarcely any ex- ■ ceptions. Wherever by the agreement of the parties a premium or profit beyond the legal rate ■ of interest, for a loan or advance of money, is either directly or indirectly secured to the lender, it is a violation of the statute unless the loan or advance is attended with some contingent circumstance by which the principal is put in evident hazard. A contingency merely nominal, attended with little or no hazard to the principal of the money loaned or advanced, cannot alter the legal effect of the transaction. And the risk of loss by the death or insolvency of the borrower is not such a contingency or hazard as will take the case out of the operation of the statute. That is the ordinary risk which every man runs who lends money on personal security only ; and if the contingency of the borrower’s dying insolvent was to be deemed a hazard of the principal, or money lent, the statute of usury would be a d ad letter. Where there is a negotiation for a loan or advance of money, and the borrower agrees to return the amount advanced at all events, it is a contract of lending within the spirit and meaning of the statute. And whatever shape or disguise the transaction may assume, if a profit beyond the legal rate of interest is intended to be made out of the necessities or improvidence of the borrower, or otherwise, the contract is usurious. In the case under consideration it was never the intention of either party that the defendants should have an interest in the cargo put on board the complainant’s brig. If the goods had been lost on their passage to South America, he must have born the whole loss, and would have been liable to the defendants to the same extent as if the goods arrived in safety and a large profit was realized thereon. The investing of the amount in hides and horns at Rio Grande on their account, instead of remitting the money from that place, was never considered as a hazard on the part of the defendants. It was done for their benefit, and because they expected to realize a further profit out of the proceeds of that investment. If they sustained any loss in this case, it was one of those mercantile hazards which frequently occur; but it is evident fiom their letter of the 14th of March, 1825, they they expected to realize a handsome profit upon the cargo shipped on board of the Conveyance, in addition to their commissions and the 20 per cent, advance upon the loan to Colton. The account in this case must be stated by allowing to the defendants only legal interest on the amount of their advance, from the 27th of January, 1825, to the time when the same was paid or invested for them at Rio Grande. And if the complainant does not produce the original bills of parcels, showing when the investment was made, the interest must be cast up to the 23d of October, when the hides, &c. were shipped on board the defendant’s vessel.

The defendants are not entitled to commissions for paying over the money borrowed of the insurance company, to the complainant or on his orders. The commission of two and a half per cent for effecting the loan, and becoming security for the ré-payment thereof, is admitted to be correct; and that is all to which they were legally entitled. I presume that question was settled between the parties at the time the receipt or agreement of the 27th of January, 1825, was given. The balance of the account, as stated on the 28th of January, is $3982,33, and the complainant’s .receipt is for the same sum, less $75, which is just the amount of the illegal commissions, included in that account, on the disbursement or payment of the money loaned on respondentia. That receipt must be considered as the liquidated amount of the defendant’s advances and legal commissions up to and including the 28th of January; to which must be added the $72,75 afterwards paid by the. defendants, as mentioned in their letter of the 14th March. I presume the error in that letter arose from their neglect to correct the account, by expunging therefrom the illegal commission so as to make it agree with the receipt given on the settlement thereof; and from that letter the error was transcribed into the complainant’s account transmitted to them from Rio Grande.

As the complainant has produced no bills of parcels, showing the particular persons from whom the hides shipped for the defendants were purchased, or the times when, or the prices for which they were brought, and as his letters show that he had not purchased any hides previous to the arrival of the conveyance, the defendants’ account of sales, averaging the hides, must be considered by the master as correct, unless the complainant produces the original bills of parcels sh owing the separate purchase of the hides shipped for the defendants and the original bill of the 558 hides, or produces other sufficient and legal evidence before the master showing such purchases, and the persons from whom, and the prices at which they were made.

The defendants are not entitled to a commission on the sale of the complainant’s hair and horse hides, as a guarantee commission. They were under no legal obligation to guarantee the payment by the purchasers, and there was no agreement that they should be responsible therefor. That claim must therefore be dissallowed. But from the facts in the case, the defendants are clearly entitled to the commission for selling the hides as well as the hair.

The only remaining question is as to the valuation of the millerea at $1,25. As I understand the case, 800 reas are a dollar, and the millerea is 1000 reas. But there is no coin or circulating medium of the country which answers to either the rea or the millerea; and that the actual value of the Spanish milled dollar, especially when restamped, was nearly equal to the nominal amount of a millerea. The advance of the defendants was to be repaid to them at Rio Grande in specie, or in something else which was a legal tender according to the laws of that country. If a Spanish milled dollar, and the other circulating medium there in the same proportion, would be received in payment of 900 or 1000 reas on the purchase of hides and horns, the complainant as a faithful agent was bound to purchase and pay for them at that rate. He cannot be permitted to make a speculation at the expense of the defendants, by paying them in a fictitious or depreciated currency. He can only be allowed so much as he actually paid for the property, in the circulating medium of the country which would have been a legal tender in the payment of his debt to the defendants. The master must ascertain the cost of the hides, &c. on that principle, and state the accounts accordingly. He is to have the usual power to examine the parties on oath, and to compel the production of books and papers. The question of costs and all further directions are reserved until the coming in of the report.


text:
    Lorrilard vs. Robinson and others.
    The court of chancery has no general jurisdiction over its suitors to compel them to pay costs due to their solicitors, or counsel.
    The proper remedy of the solicitor or counsel to recover his bill of costs, it by an action at law against the client.
    The client may apply to the court for the taxation of his solicitor’s hill, and for a stay of the proceedings at law thereon, upon an undertaking to pay what shall be found due; and in such cases the court of chancery may compel the client to perform such undertaking.
    But this court has no jurisdiction to order the taxation of the bill, as between solicitor and client, on the application of the solicitor himself, if there is no fund under the control of the court out of which payment can be made.
    May 25th.
    This was an application, by Robinson’s solicitor, for a reference to a taxing officer to tax his costs, counsel fees and disbursments, as between solicitor and client. Robinson, the client, died pending an appeal to the court of errors, and administration of his estate was granted to the public administrator in the city of New-York. The public administrator resisted the application upon the ground that the solicitor’s remedy was at law, and that the chancellor had no jurisdiction to order the payment of the costs.

      J. Radcliff, the petitioner in person.

      W. Kent, for the public administrator,
   The Chancellor.

It does not appear by the petition that this suit has ever, been revived against the administrator of Robinson, or that he is before this court in any way, so as to give the chancellor jurisdiction to order him to pay the bill of costs due to his solicitor or counsel. The solicitor has a perfect remedy at law to recover what is due from his client. But the latter may apply to this court to have the solicitor’s bill taxed and to stay proceedings at law thereon, upon an undertaking to pay what shall be found due. (2 Atk. 114 11 Ves. 325. Buck’s Ca. 388.) In such cases the court has jurisdiction over its officers; and the client, by applying to the court and undertaking to pay what is found due on taxation, gives the court jurisdiction to compel a performance of that undertaking; which performance may be enforced by attachment. But the court has no jurisdiction to order the taxation of the bill, as between solicitor and cliant, on the application of the solicitor himself. (Sayers v. Walond, 1 Sim. & Stu. R. 97.) If the solicitor has no money of the client in his hands, and there is no fund in court on which he has a lien for his costs, he may go before the proper taxing officer and get his costs taxed, and then proceed at law thereon. Or he may bring his suit without taxation, at his election, leaving the client to make an application on his part if he wishes a taxation of the costs.

The petition in this case must be dismissed.


author: The Chancellor

text:
    Belknap vs. Tremble and others.
    Appeal causes are to be placed on the calendar of the chancellor as of the same date at which they were originally entitled to be placed on the calendar of the court below.
    May 25th.
    This was an appeal from the second circuit on a decree made upon pleadings and proofs; and a question arose, under the last clause of the 91st rule of this court, as to the place the causé should occupy on the calendar. One party had considered the matter as arising at the time the decree was entered; the other had placed the cause upon the calendar as of the time when the replication was filed in the court below.
   The Chancellor

said the intention of that part of the rule was to have appeal causes placed on the calendar as of the same date at which they were placed on the calendar of the court below. That on an appeal from a vice chancellor’s decree, the matter was to be considered as having arisen at the time when the bill was taken as confessed, or the plea, answer, demurrer, or replication was filed in the court below. And on appeals from the sentences of decrees of surrogates, or of circuit' judges in testamentary cases, the matter was to be considered as having arisen at the time of the litis contestado, or joining of the issue, or other analogous proceeding before the surrogate.


text:
    Bailey vs. Inglee and others.
    A person is a necessary party to a suit when no decree in relation to the subject matter of litigation can be made until he is properly before the court as a party; or where the defendants in the suit have such an interest in having such person before the court as would enable them to make the objection if he were not a party.
    A defendant may in some cases be a proper party to a suit, although he is not a necessary party; as in the case of a fraudulent assignment of a trust fund, where the cestui que trust may at his election either proceed against the trustee alone, or may join the fraudulent assignee in the same bill.
    June 7th.
    The defendants Inglee and wife brought a suit at law against the complainant and Rhodes and Balestier, who were formerly partners under the name or firm of J. Balestier & Co. on a note given by that firm to Mrs. Inglee before her marriage. After the commencement of such suit Bailey filed his bill in this cause, alleging therein, among other things, that in 1827 he withdrew from the firm; that previous thereto Rhodes assumed the payment of the note ; and that on the complainant’s retiring from the firm, Balestier and Rhodes covenanted with him to pay and settle all the debts of the firm. The bill also charged, that the note had been paid wholly, or in part, by Rhodes or by Balestier & Co., and that- upon ■ the failure of Balestier and Rhodes in 1828, the latter made an assignment of property or choses in action, to secure the balance alleged to be due on the note, the particulars of which assignment the complainant alleges that he was unable to state; and as to which he prayed a discovery from the defendants Inglee and wife and Rhodes. The complainant also prayed that the proceeds of the property so assigned might be applied towards the payment of the note ; and that if he should be decreed to pay any balance on the note, he might be substituted in the place of In-glee and wife as to the assigned property, and that he might also have a decree over against Rhodes and Balestier, founded upon their several agreements in relation to this note, and the general debts of the firm. The complainant prayed for a discovery as to all the matters stated in the bill, for an injunction to restrain the proceedings at law, and for general relief. The defendant Rhodes put in a demurrer to the bill for want of equity as against him.

      R. Sedgwick <§• B. 1). Field, for the complainant.

      B. Lord, jun. for the defendant Rhodes.
   The Chancellor.

Persons are .necessary parties when no decree can be made respecting the subject matter of litigation until they are before the court either as complainants or defendants; or where the defendants already before the court have such an interest in having them made parties, as to authorize those defendants to object to proceeding without such parties. There is also another class of cases where persons who are not absolutely necessary as parties may be made defendants at the election of the complainant. Thus, if a trustee has parted with the trust fund, the cestui que trust may proceed against the trustee alone to compel satisfiaction, or the fraudulent assignee may be joined with the trustee, at the election of the complainant.

The case before me is one in which Rhodes was a necessary party, because he was jointly liable with the complainant in the action at law on the note. Inglee and wife therefore had a right to insist that Rhodes and Balestier should be made parties, so as to make the determination complete. (Poore v. Clark, 2 Atk. 515, Breckenridge v. Bullitt, 3 Litt. R. 5.) And if they had not been made defendants, Inglee and wife might have demurred to the bill for want of parties.

The demurrer must be overruled, and Rhodes must pay the costs and answer the bill within thirty days, or an attachment must issue against him.


text:
    Mitchell vs. Lennox and Taylor.
    Where 9 debtor failed and conveyed all' his property to assignees, in trust to pay certain specified debts, and to divide the surplus or so much thereof as should be jiecessary among such of his other creditors as should come in under the assignment and release him from "their debts, and to reassign the residue to the debtor, and a number of the creditors came in under the assignment 9nd complied with the condition, it was held that the debtor could not "file a bill against his assignees, for an account of the trust prdperty, without' making the creditors who came in under the assignment, and those whose debts were specially provided for and which remained unpaid, parties to the suit.
    Where the complainant has omitted, to bring before the court persons who arc necessary parties, but the objection does not appear upon the face of the bill, the proper mode of taking advantage of it is by plea or answer,
    But if the objection appears on the face- of the bill, the defendants may demur.
    June 7th.
    The complainant failed in 1798, and .assigned all his prop.erty to the defendants Lenox- and Taylor and to H. Stevenson, who has since died, iri. trust to pay certain debts due to the United States and to H. Stevenson, and to divide the surplus, or so much thereof as might be necessary, among such of the other creditors of the complainant as should come in Under the assignment- and release him from the payment of their- debts; and to reassign the residue of the property or to' pay oVer the balance'-of the" proceeds thereof to the complainant. , The bill in this cause was filed against the surviving trustees for an account of the trust property; and it stated, among other things, that many of the creditors who,-were named in the bill, and whose debts amounted to more than $44,-000, came in under the assignment and complied with the condition thereof. Two of these creditors were afterwards paid by ■ the complainant, who , took from them an assignment of their demands. The defendants demurred to the biill, on the ground that the creditors who came in under the assignment „ should have been made parties" to the suit.

      J. & Mitchell, for the complainant.

      T. L. Ogden, for the defendant.
   The Chancellor.

The objection in this case that all the proper persons are not before the court, so as to render the decree final as to the execution of the trust, is well taken If the debts of all the creditors who were specially provided for by the assignment, or who came in under the same, have been paid out of the assigned property, or have been otherwise satisfied, it should have been so alleged in the bill. If not, the creditors should be parties to the suit, so as to subject the assignees to but one account. Had it been stated in the bill that all the creditors who came in under the assignment, as well as those to whom a preference Was given, had been paid or satisfied, or that they had released to the complainant their claims under the assignment, the defendants might have been compelled, by plea or answer, to deny the fact, for the purpose of showing that all the necessary parties Were not before the court. As the objection appears on the bill itself, the proper mode of taking advantage thereof was by demurrer. In Palk v. Clinton, (12 Ves. 53,) it is said to be a universal rule not to allow an account to be taken in the absence of any person interested therein, who is within the jurisdiction of the court and can be made a party. The exception to this rule is where the parties interested are numerous and the court can get the control of the fund by a bill filed by some of them suing in behalf of themselves and all others standing in the same right. (Court v. Jeffery, 1 Sim. & Stuart, 105. Manning v. Thesiger, id. 106.) Creditors have been permitted to come in under a decree upon a bill filed by legatees. But that right was for a long time doubted. It was finally sanctioned from the necessity of the case; as the legatees could not be presumed to know who were creditors of the estate, or whether there were any such who ought to be made parties. That principle, however, cannot apply to this case; and there is no necessity of extending it for the benefit of debtors who assign their property to pay confidential creditors, or to coerce their creditors to submit to their terms. If the debts paid by the complainant, and assigned to him, are not to be considered absolutely satisfied, so as to give the other creditors the right to the fund to the exclusion of those debts, upon which point it is not necessary now to express any opinion, the bill at least should have been filed by the complainant in behalf of himself and all the other creditors who have a specific claim on the fund in the same right.

The demurrer must be allowed; with liberty to the complainant to amend his bill, on payment of costs, so as to bring all proper parties before the court.


text:
    Ex parte Johnson.
    A retaining fee is not allowed to a solicitor and counsel upon opposing a motion founded upon a petition, for instructions to a receiver in the discharge of his duty.
    Upon a denial of such an application the like cost must be taxed as are allowed for resisting a special motion.
    Upon applications for commissions of lunacy and other proceedings of a like character, if a solicitor is actually employed to conduct the proceedings, he is entitled to a retaining fee.
    But a retaining fee to counsel is only allowed where counsel is actually employed in a cause or suit strictly so called.
    Upon a submission in this case by one of the taxing officers of certain questions in relation to costs,
   The Chancellor

decided that a retaining fee to solicitor and counsel was not allowable upon opposing a motion founded upon a petition for instructions to a receiver in the discharge of his duty. That like costs on a denial of the application must be taxed as are allowed for resisting a special motion. That on applications for commissions of lunacy, and other special proceedings of a like nature, where solicitors are actually employed to conduct the proceedings, a retaining fee ought to be allowed to the solicitor. But that retaining fees to counsel are only allowed where counsel are actually employed in a cause or suit strictly so called, in which ' there are adverse proceeding, or where there is a complainant and a defendant.


text:
    Camp vs. The Receivers of the Niagara Bank.
    Whore a suit had been commenced at law by the Bank of Niagara previous to its insolvency, and the receivers of the hank after their appointment elect to proceed with the suit, and upon the trial the plaintiffs were non-suited, it was held that the defendant was entitled to his costs of the suit, down to and including the entering of the nonsuit, out of the fund in the hands of the receivers.
    July 6th.
    This was an application for an order requiring the recéivers to pay the costs of a suit at Jaw prosecuted in the name of the President, Directors and Company of the Bank of Niagara against the petitioners, and in which the plaintiffs were nonsuited at the trial.

      D. Tillinghast, for the petitioner.

      M. Chittenden, for the receivers.
   The Chancellor.

Although the suit against the petitioner was commenced under the direction of the officers of the bank and was at issue before the appointment of the receivers, yet as the receivers elected to go on with that suit for the benefit of the fund, it is equitable that they should pay the whole previous costs, as well as those which accrued after they assumed the control of the suit. (Masse v. Gillelan, 1 Paige, 644.) If the receivers did not think it for the interest of the creditors to run the risk of having the costs charged upon the fund, they should have abandoned the suit, and then the petitioner would only have been entitled to share rateably with the other creditors. The petitioner is entitled to his costs, down to the time of the nonsuit, to be paid out of the fund in the hands of the receivers, unless they have some legal claim to off-set. For the purpose of this application, I,must presume the nonsuit was right; and that the claim for which that suit was brought was actually barred by the statute of limitations. The petitioner is not entitled to the costs of making up the record and issuing an execution against the bank. That was an unnecessary and useless expense. He knew that the company was.insol vent, and that all its property of every description was in the hands of officers of this court. Any attempt to enforce the collection of the costs by execution against the property in the hands of the receivers would have been punishable as a contempt.

An order must be entered authorizing and directing the receivers to pay. the costs of the petitioner, down to and in-, eluding the entering of the nonsuit, out of the funds in their hands; but, under the circumstances, he is not entitled to the costs of this application. '


text:
    B. and J. Q. Aymer vs. Gault and M’Namara.
    Where a bill of interpleader is properly filed, the complainant is entitled to ,his costs out of the fund.
    In suits pending at the time the revised statute went into operation, the rights of the parties remain unaltered; but the. remedy must be pursued according to such statutes, as far as is possible without impairing the right.
    Where the .defendants in a suit are not personally served with process and do not appear, a reference must be made to a master to take proof of the facts and circumstances stated in the bill before a decree can be made. •,
    Where a bill of interpleader is filed against two defendants, and one of "' them is not personally served with process and does not appear, and the bill is taken as confessed against him, the defendant who appears will not be entitled to the possession of the fund until the expiration of the time limited by the statute, for the other defendant to appear, unless he . gives security to-re-pay the fund in case the other defendant appears and establishes his right to the same.’ ■
    July 6th.
    This was a bill of interpleader filed against the defendants to compel them to litigate and settle their claims to $1000 left in the hands of the complainants, for which the following receipt was given: “Received from Peter M’Namara of the city of St. Johns, New-Brunswick, one thousand dollars, to .satisfy any legal claims that Mr. Archibald Gault of the said city may have against the said Peter M’Namara-. And if any difficulty should arise between the said parties, they are to leave their claims to the decision of Messrs. Crookshanks and Walker of said city,, or any other two per-. sons said parties may appoint; and he will pay the said Per ter M’Namara or his order the amount of $1000, within twelve months from this date or sooner, if terminated to the satisfaction of said parties. New-York, January 24th, 1828. B. Aymer tj* Co.”

    The defendant Gault, who resides at New-Brunswick, wrote to the complainants, in March and May, 1828, informing them that M’Namara refused to submit the claim to arbitrators as specified in the receipt, and requesting the complainants not to pay over the money to him until their accounts were adjusted. After the expiration the twelve months mentioned in the receipt, M’Namara insisted upon his right to the $1000; and the claims of Gault remaining unadjusted, the complainants filed this bill to enable them to pay over the money to the party entitled thereto, and to be indemnified against the claims of both. M’Namara put in an answer denying all indebtedness to Gault, and claiming the money in the hands of the complainants. Gault being a non-resident, the bill was taken as confessed against him, in February, 1830, for want of his appearance in pursuance of an order made in May of the preceding year, and published in the usual manner. The cause was submitted on pleadings •and proofs as against M’Namara.

      D. Lord, junior, for the complainants.

      C. O'Conner, for the defendant M’Namara.
   The Chancellor.

The bill in this case is properly filed, and the complainants are entitled to their costs out of the fund. They were strictly stake holders, and could not with safety have paid this money to either of the defendants. They have acted with perfect good faith, and are entitled to the protection of this court. If the bill had been taken as confessed against Gault on a personal service of the subpoena, or before the revised statutes went into operation, it would have been a matter of course to decree the fund to the other defendant, with costs over against Gault. Such will still be the decree, after complying with certain formalities required by the revised statutes, if the facts stated in the complainant’s bill are established before a master. In suits which were pending at the time the revised laws took effect, the rights of the parties must remain as they then existed; but the remedy, so far as relates to the practice of the court and the manner of ascertaining that right, must be according to the new law, as far as the proceedings can be made conformable thereto without impairing the right. (4 Wendell’s E. 206, 220, 211.) In the case of absentees, by the former practice of the court the bill taken as confessed for want of an appearance was considered as conclusive against them, unless they came in and answered within the time limited by the statute. The legislature have now interposed further guards for their protection; not to alter the rights of the complainant but to preserve and protect the rights of the absentees if any such rights exist. The 126th section of the article of the revised statutes, which relates to proceedings in this court against absent, concealed, or non-resident defendants who are not personally served with process and who do not appear, makes it the duty of the court to direct a reference to a master, to take proof of the facts and circumstances stated in the bill, before any decree can be made. In this particular case it probably will be mere form, as the real grounds of litigation, if any such exist in this case, are between the defendants. And the rights of the defendants as between themselves cannot be settled under that order of reference. AU that can be inquired into under this order is as to the matters stated in the bill, and which are necessary to show that it was properly filed as a bill of interpleader. If the bill was properly filed, the defendant who has appeared will be entitled to possession of the fund after deducting the complainants’ costs; but under the equitable construction of the 131st and 132d sections of that article of the revised statutes, he will be obliged to give security to refund in case the other defendant appears and is admitted to defend; and in default of giving such security, the fund must remain in court until the expiration of the ■ time limited by the statute, unless the rights of the parties are sooner ascertained.

There must be a reference to a master to take proof of the facts and .circumstances stated in the complainants’ bill, so far as respects their right to file the bill of interpleader against the defendant Gault; with liberty to the master to examine the complainants on oath in relation to the facts stated therein. On coming in of the report, it may be presented to the court on any regular motion day for a final decree thereon.


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    Vanderheyden vs. Vanderheyden.
    An executor or guardian may employ a clerk or agent and charge the estate with the expense, where, from the peculiar nature or situation of the property, the services of such clerk or agent will be beneficial to the estate.
    But for his own services, the executor or guardian, must be confined to the allowance by way of comissions as fixed by law.
    In stating the account of an executor or guardian, if the court makes annual rests for the purpose of charging him with interest on the annual balances remaining in hiá hands, his commissions on the amount received, and actually disbursed during each year, may be deducted at each annual rest.
    So far as the receipts and disbursments are actually offset against each[other, it is an annual settlement of the account so as to authorize the deduction of the commissions at the time of such settlement.
    July 6th
    This case came before the court on exceptions to the master’s report, on stating an account against the administratrix of the guardian of the complainant. The guardian had used monies belonging to the infant, and the master in stating the account made annual rests for the purpose of charging the guardian with interest on these monies. The expenditures of each year were less than $1000, and the master at each annual rest deducted five per cent on so much of the receipts as had been actually disbursed for the benefit of the infant during the year. And at the close of the account he credited the defendant with the commissions, at the rate of five per cent, of the first $1000 of the balance, and at the rate of two and an half per cent, on the residue, according to the allowance settled by the court, in the matter of Roberts, (3 John. Ch. Rep. 43.) The defendant insisted before the master that commissions to the full amount of the monies received by the guardian during the year should be allowed and deducted at each annual rest; and that she, the defendant, was also entitled to an allowance for the time and ser» v*ces °f the guardian in attending to the superintendance of the infant’s property, over and above his commissions for collecting and receiving the rents and profits of the estate. The master having decided against the defendant on these questions, she excepted to the report:

      Geo. R. Davis, for the complainant.

      J. P. Cushman, for the defendant.
   The Chancellor.

The question under the second, ex» ceptiori is no longer open for discussion in this court. In McWhorter v. Benson, ( 1 Hopk. Rep, 28 ) Chancellor Sanford examined this question and decided that the executor or guardian was entitled to all proper expenses in which he had been subjected in the care and management of the estate; and that he might employ an agent or clerk, and charge the estate with the expense, where, from the peculiar situation of the property or from its nature, it was beneficial for the i estate to subject it to that extra expense. But the executor or guardian, for his own services must, be confined to the allowance at a fixed rate, by way of commission on the monies received and disbursed, as settled by the court, in full for all his services in discharge of the trust. This exposition of the former law is now adopted and sanctioned by the legislature in the recent revision of the statutes. (2 R. S. 93, § 58 ; id. 153, § 22 ; Revisor’s note to § 54, tit. 3, ch, 6, pt. 2) I think the master was right in allowing commissions to be deducted at the annual rests, 'only to the extent of the monies which had been received and actually disbursed within the year. In the case mentioned by Hoffman, (Hedges v. Ricker, Hoff. Prac. 130,) the master refused to allow the per-centage on each sum received and paid out, but allowed it only upon the general aggregate. And this decision of the master was sanctioned by the court, on an appeal from his decision. The only doubt in this case is whether the master has not allowed too much, by deducting five per cent-, on the annual receipts and disbursments, and also the five per cent on the first $1000 of the final balance. I think, however tliát has been correctly allowed in this case; because the making of the annual rests for the purpose oí charging the defendant with interest on the balance is, in fact, an annual settlement of the account. As the court settles the account annually, so far as the trust fund has been disbursed, for the purpose of charging the defendant with interest, it is proper to consider it settled to the same extent for the purpose of deducting the commissions on the receipts and disbursements which have been offset against each other in that settlement.

The exceptions are overruled, and the report of the master is confirmed.


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    Ward vs. Van Bokkelen and others.
    Where there is an absolute assignment of a chose in action, and the assign- or claims no interest therein, he is not a necessary party to a bill filed to recover the amount due.
    The assignee of a chose in action is now Considered the real party to the suit, as well at law as in equity; and the defendant may plead and give in evidence any matter of defence which exists in his favor against the assignee.
    A fair and bona fide purchase of a chose in action id the ordinary course of trade or business, or for the purpose of securing an antecedent debt, is not unlawful.
    But the purchase of a mere foundation of an action by a party who has no in. terest in the controvery, with the express object of commencing a suit there, on, and for the purpose of harassing a defendant or of speculating out of the litigation, is illegal; and a court of equity will not sustain a suit in fa. vor of such purchaser.
    Where property has been frequently conveyed by an insolvent debtot'whó afterwards obtains his discharge under the act, his interest in the property passes to his assignees for the benefit of his creditors, although such pr oper, ty is not embraced in the inventory.
    July 6th.
    In January, 1807, Samuel Beebe filed a bill in this court against Thomas Post, and the second of November thereafter obtained a decree against Post for $3290,98, together with his costs to be taxed. At the time that decree was, entered, Post was the owner of considerable real estate in the-city of New-York, which, on the 11th of November,. 1807, he . conveyed to-his mother in law, Elizabeth Morris. Shortly after this conveyance, Post applied for a discharge under the . insolvent -act, (three fourth act;) and in November, 1808, upon making an assignment of all his estate, agreeably to the provisions of that. act, he was discharged by the recorder of New-York.. In- 1811, Mrs. Morris Obtained from the-corporation of New-York a grant of the water lots in front of the lands conveyed to her by Post. In 1820, she borrowed money from The Fulton Fire Insurance Company to pay for the expense of filing in the water lots, and she gave the company a mortgage on the lots as security for the money loaned. She afterwards mortgaged the .rear lots, which were conveyed to her by Post, to the New-Y'ork Insurance Company to secure a loan made by her from that company. Post died in 1815, intestate, and without leaving any property. In 1822, Beebe also died intestate. Mrs. Morris continued in possession of the property until her death, in April, 1823. By her will she directed her executors to sell this portion of ' her real estate, and to pay off the incumbrances out of the proceeds of the sales. The residue of the purchase money, after paying her debts and a few specific legacies, she directed, to be divided between her four daughters. After the death of Mrs. Morris, the mortgages to the two insurance companies were foreclosed, and most of the' property was sold under the decrees of foreclosure. After paying the mortgage monies with interest and costs out of the proceeds of such sales, a large surplus remained. In October, 1823, ICennith H. Fish, described in the letters testamentary as a friend of S. Beebe, administered on his estate, .and for the consideration of - $100. assigned the decree against Thomas Post to the complainant. The complainant afterwards, in May, 1825, filed his bill in this cause against the executors and devisees of Mrs. Morris, charging in said bill that the conveyances of November, .1807, from Post to her were fraudulent and void; and that they were made for the purpose- of preventing Beebe from obtaining satisfaction of his decree by a sale of the premises. And the complainant prayed that the conveyances to Mrs. Morris might be declared fraudulent and void; that the premises might also be declared to have belonged to Thomas Post at the time of his death; and that the complainant might be adjudged and decreed to be entitled to an execution upon the decree so assigned to him against the lands remaining unsold, and that the surplus monies raised on the mortgage sales might be applied towards satisfying that decree. The complainant also prayed for an injunction, and for general relief. The defendant Mary Post suffered the bill to be taken as confessed against her. The defendants Van Bokkelen and wife, Sarah Morris and Ann Morris, the three latter being the daughters of Mrs. Morris and executors of her will, put in their answer denying all knowledge and belief that the conveyances to Mrs. Morris were fraudulent, and alleging that they were made to secure and pay a just debt due from Post to their mother.' These defendants further insisted by their answer, that if any assignment of Beebe’s decree had been made to, the complainant, it was made for a small or nominal consideration at the instance of their sister and co-defendant Mary ■ Post, the widow of Thomas Post, and with the sole view of harrassing and disturbing them in their title to the property under the will of their mother. The cause was heard on pleadings and proofs as to these defendants.

      W. T. M’Coun Sf G. Griffin, for complainant.
    The deeds from Post to Mrs. Morris were fraudulent and void, being given with intent to defraud creditors. There is no evidence that Mrs. Morris paid any consideration for these deeds. She had no means out of which to make such payment. And there is no evidence of any antecendent debt due her from Post, or that the premises in question were conveyed to her in satisfaction of, or as security for such debt. After the deeds were executed, Post continued to receive the rents and profits of the premises. These deeds were evidently given with intent to defeat creditors; if so, it is immaterial whether a valuable consideration was paid or not: Post intended to defeat the recovery of. Beebe’s decree, and Mrs. Morris by purchasing with a knowledge of this decree is implicated in the fraud. Whenever a purchaser buys with intent to defeat a judgment,, already recovered or about to be recovered, the deed to him will be void. And where there is an outstanding judgment, and the purchas-' ér does not pay the full value of the premises, the law will jmpjy that he agreed to' pay the judgment. To constitute a bona fide purchaser, it must be shown that he had actually paid the purchase money, before notice, and had not merely secured it to be paid. A party will be charged with notice • where he acts in the face of facts and circumstances which were sufficient to put him upon inquiry. (Sugden’s Law of Vendors, 490, 1, Beals v. Guernsey, 8 John. R. 52, 446. Anderson v. Roberts, 18 John. R. 515. Anderson v. Van Alen, 12 John. R. 345. Sterry v. Arden, 1 John. Ch. R. 267. Jewett v. Palmer, 7 John. Ch. R. 65. Briscoe v. Clarke, 1 Randolph’s R. 213. Alden v. Gregory, 2 Eden’s R. 285, per. Ld. Ch. Northington. Jackson v. Myers, 18 John. R. 425. Wickham v. Miller, 12 John. R. 320, 4. Jackson v. Mather, 7 Cowen’s R. 301. Jackson v. Terry, 13 John. R. 471.) Undocketed judgments will bind a purchaser with notice.. A decree is equal to a judgment not docketed. (Harvey v. Mountague, 1 Vernon, 57. 2 Ch. Ca. 48. Davis v. The Earl of Strathmore, 16 Ves. R. 419, 428.) It was not necessary to show in the bill that an execution had been issued upon the decree. ' A decree is not like a judgment at law, where it is incumbent upon the creditor to exhaust his remedy at law before he comes into chancery. It is incidental to the power of this court to defeat schemes to defraud decree creditors; And it is sufficient to give this court jurisdiction that here is a cloud upon .the title. But it appears by the answer that an execution was issued upon the decree. The objection .that no execution was issued can only be raised , where the party puts himself alone upon the fact of issuing the execution. Here we put ourselves upon the fraud, 'Which is always a ground of relief in this court. It was not necessary to make the assignees of Post parties. Non ' constat, all the debts signed off accrued subsequent to the execution of the fraudulent deeds ; if so, the assignees had no interest, provided they had notice of the deeds. But it does not appear, either in the bill or answer, that there were any assignees, And besides, this objection of the want of proper parties can only be taken advantage; of by demurrer. The court cannot take notice of the consideration of the assignment to the complainant. The purchase of the decree was like the ordinary case of buying a debt for less than the amount due.

      W. Slosson, for defendants.
    The complainant must rely upon the strength of his own case ; and not having shown the •issuing of an execution, so as to give him a specific lien on the land, previous to the filing of the bill, he cannot succeed. (Brinkerhoff v. Brown, 4 John.. Ch. R. 671. Williams v. Brown, 4 id. 682. McDurmutt v. Strong, 4 id. 687. Hadden v. Spader, 20 John. R. 554. Beck v. Burdett, 1 Paige’s R. 305.) Decrees in chancery are not liens upon real estate, unless the proceeding is in rem, and then the filing of the bill produces the lien. The lien, in ordinary cases, is created by pursuing the decree to an execution and a levy. An execution out of chancery is a modern proceeding. It is a creature of the statute, and it produces no lien until an actual levy. The statement in the answer as to the issuing of the execution cannot aid the complainant. He must recover upon the case made in his bill, and not upon the admissions in the answer, nor even upon the proofs taken. (James v. McKernon, 6 John. R. 548. Gouverneur v. Elmendorf, 5 John. Ch. R. 79.) If the complainant had no lien upon the premises, the interest of Post passed to his assignees, and there is a defect of parties. If this objection cannot be raised upon the pleadings, then it is incumbent upon the defendants to object that the legal representatives of Post have not been made parties. The assignment of the decree to the complainant was maintenance at common law. It was the purchase of a contested debt, not to secure creditors, but to benefit strangers. Stevens v. Bagwell, 15 Ves. 140. Wood v. Downes, 18 Ves. 125. Strachan v. Brander, 1 Eden’s R. 303. Arden v. Patterson, 5 John. Ch. R. 44. Powell v. Knowler, 2 Atk. 226. Wallis v. Duke of Portland, 3 Ves. jr. 494. Reigal v. Wood, 1 John. Ch. R. 402.) Here was at least such a gross abuse of duty on the part of the complainant as not to entitle him to relief. He paid a mere nominal consideration for .the decree % and he appears here in the character of a depredator upon orphans, a mere volunteer in-a scheme of iniquity. In such cases, the court always refuses to interfere. Mrs. Morris was a creditor of Post, and had a perfect right to take a conveyance of his real estate to secure her.debt. Her case was different from that of a mere volunteer purchaser. A creditor may take an assignment of property from his debtor to secure his debt, although the debtor at the time avows that his intention is to defraud his' other creditors. A debtor may prefer one creditor to another ; and a bona fide purchaser for 'a valuable consideration from á fraudulent grantor,.without notice of the fraud, cannot be disturbed in his purchase. Mrs Morris had no notice of .the frrudulent intention of Post. (Moran v. Dawes, 1 Hopk. R. 365. Wiggins v. Armstrong, 2 John. Ch. R. 144. Phoenix v. The Assignees of Ingraham, 5 John. R. 417. Wilder v. Winne, 6 Cowen’s R. 284.) Mrs. Morris took there conveyances from Post with no other view than to secure her debt against him. There was no fraudulent intention on her part. ‘ The decision of the recorder against the alleged fraud, after a lapse of 20 years, is overwhelming in its nature. After such a lapse of time, the presumptions are against the fraud. (Morse v. Royal, 12 Ves. 377, 8. Underwood v. Lord Courtown, 2 Sch. & Lef. 41. Pickering v. Lord Stamford, 2 Ves. jr. 583.)
   The Chancellor.

If the transactions to which the pleadings and proofs in1 this case relate were of recent occurrence, the weight of testimony would certainly be against the validity of the conveyances of November, 1807. There is certainly much reason to suspect that the property was conveyed to Mrs. Morris for the purpose of defrauding Beebe of his- debt. But considering the staleness of the transaction, • the fact that an investigation took place before the recorder a few months after the conveyance of the property, and the extraordinary circumstances, under which this claim is now brought forward, if the decision of the cause turned upon the question of fraud alone, I should not think myself warranted in setting aside the conveyances without giving the defendants an opportunity to exatnine the witness openly in the presence of a jury. Before a feigned issue can be directed to try the question of fraud, it becomes nececessary to examine some of the other points raised by the pleadings and proofs in this cause, for the purpose of ascertaining whether the establishment of the fraud will entitle the complainant to the relief asked for here.

It is objected, among other things, that the assignment of the decree to the complainant was void, on the ground of champerty; and that the assignor should have been a party to the suit. By the ancient practice of the English court of chancery there is no doubt that the assignor of a chose in action was a necessary party to a bill to recover the amount. And as late as 1792, in the case of Cathcart v. Lewis, (1 Ves. jun. 463,) Lord Thurlow allowed a demurrer to a bill filed by the assignee of a judgment, because the assignor was not made a party. Though some years previous to that time Lord Hardwick had declared it was not necessary in every case to make the assignor a party, where all the equitable interest had been assigned. (Brace v. Harrington, 2 Atk. 234.) In 1802, in the court of errors of this state, there was a difference of opinion among some of the judges as to the necessity of making the assignor of a mortgage a party to a bill of foreclosure brought by the assignee. (Johnson v. Hart, 3 John. Ca. 322.) But at this day the rule is well settled that where there has been an absolute assignment of all the'interest of the mortgagee in the debt secured by the mortgage, he is not a necessary party to a bill to redeem, or to a bill of foreclosure. (Chambers v. Goldwin, 9 Ves. 269. Newman v. Chapman, 2 Rand. Rep. 93. Whitney v. M’Kinney, 7 John. Ch. R. 144.) The reason why it was formerly considered necessary to make the assignor of a chose in action a party to a bill in equity brought by the assignee, I apprehend, must have been that courts of law did not sanction and protect such assignments; considering them a species of maintenance. And the assignor having the legal title or interest in the thing assigned, he might sustain an action at law thereon, notwithstanding a decree in equity to which he was not a party. This reason has long since ceased, as it is now well settled, at least in this state, that after an absolute assignment of a chose in action, the assignee, at law' as well as in equity, is considered the real party to the suit; and the defendant may plead and give in evidence any matter of defence which! exists in his favor against the assignee.- A decree in equity between the defendant and the assignee would now have the same effect in court of law as if the assignor was a party to such a decree;- the fact of the assignment being first established. In Cobb v. Thompson, (1 Marsh. Kent. R. 508,) the assignee of a judgment was permitted to file a bill in chancery, in his own name, without making the personal representative of the assignor a party. If there was any controversy between the assignor and the assignee in relation to the fact of the assignment, or as to the right of the latter to the chose in action, this court, in the exercise of a sound discretion, might require the assignor to be made a party, so that both might be bound by the decree. But in a case like the present, where there is an absolute assignment in writing, and when there is nothing in the pleadings or proofs to induce a belief that the assignor' has not parted with all his-interest in the subject matter of the suit, it would be an unnecessary and useless expense to make him a party.

The question as to the legality of the assignment in this case is not so clear. There can be no doubt of the fact that the assignment was obtained for the express purpose of commencing a suit, to endeavour to set aside the conveyances to Mrs. Morris on the ground of the alleged fraud. There was no longer any hope of obtaining any thing on account of that decree except by a litigated suit. Post was discharged under the insolvent act, and had died insolvent many years before. The purchase of this antiquated claim was undoubtedly made for the benefit of Mary Post, one of the defendants; and there was not- the least possibility of recovering any thing unless she' could show that her mother had committed a fraud, and that her husband had been guilty of perjury. Neither the complainant nor herself had any claim against Beebe or his representatives, and neither could' have had any other possible motive for the purchase except to harrass the defendants, or to make money by the purchase of a lawsuit. The statute declares that no officer or other person shall take upon him any business that is or maybe in suit in any court to have a part of the thing in plea or demand ; and no person upon any such agreement shall give up his right to another, and every such conveyance and agreement shall be void. (1 R. L. 172.) I am aware that this statute has been construed strictly ; and that it does not extend to the fair and bona fide purchase of a chose in action in the ordinary course of trade or. business, or for the, purpose of securing or recovering payment of an antecedent debt. (2 Sim. & Stu. 244. 2 Freeman’s Rep. 145. 6 Dane’s Abr. 741, ch. 202, art. 9, § 3.) But if any state of facts can bring the purchase of a chose in action within the prohibition of the statute, this is a case of that description. The decree was no longer a personal claim against Post, or his property at large ; but if it had any validity it was as against the lands then owned by the devisees of Mrs. Morris. It was strictly a purchase of the profits of a litigation ; as to which the purchaser is not entitled to the aid of this court.

1 Independent of this objection, to the complainant’s right of recovery, there is another which is equally fatal in this case. It appears by the answer of the defendants, and by the proofs in the cause, that shortly after the conveyances to Mrs. Morris, Post was discharged under the insolvent act and assigned all his property to A. L. Degrove for the benefit of his creditors. If the conveyances to Mrs. Morris were fraudulent, the whole of this property of the insolvent passed by that assignment to the assignee under the act, whether inventoried or not; and the assignee is a necessary party to the suit.

I am satisfied the complainant is not entitled to any relief in this case, and the bill must be dismissed with costs.


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    Smith vs. Parke.
    If a defendant is absent from home and no person can be found at his place of abode, a subpoena may be served at his store or place of business by delivering the same to his clerk or servant.
    August 4th.
    ' An attachment had been issued in this cause against .Parke for not appearing. He occupied a dwelling house and store at Whitehall, When the officer went to serve the subpoena he was absent from home, and there was no person at his dwelling house. The officer then went to his store and there served the subpoena upon his son. It was not denied by the defendant that the subpoena came to his knowledge. The only question raised was whether, an attachment could be issued for a neglect to appear upon such a service of the , subpoena.

      J. Rhoades, for the complainant.

      J. Williams, for the defendant.
   The Chancellor.

The proper manner of serving the subpoena is by delivering-' it to the defendant personally, if he can be found; or, in case of his absence, by leaving it with his wife, or some member of his family of suitable age and discretion, at his place of abode. If the service cannot be made in either of these modes, it may be made by leaving the subpoena with the. defendant’s servant or clerk at his place of business, which in such a case is equivalent to a service at his dwelling house.' (1 Price’s R. 92. 3 Price’s " R. 176.) The 21st rule of this court does not exclude any other legal mode of service which will be as likely to bring home to the defendant knowledge of the subpoena. The statute having provided a mode of notifying defendants who are absent from the state, or concealed therein, the English practice of allowing a substituted service, by an application to the court, can only be adopted in very special cases. But service on the clerk or servant of a party at his usual place of business was never considered a substituted service ; and no special order of the court is necessary to validate such a service.

Under the circumstances disclosed in the affidavit, the subpcena was duly" served, and the attachment was regularly issued.


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    The Mechanics’ Bank vs. Snowden.
    Where a defendant gave notice of his intention to appeal from the decision of a vice chancellor on an interlocutory motion, and that he should bring on the hearing of such appeal on the next motion day before the chancellor ; and the complainant’s counsel attended on that day to oppose the application, but no appeal was in fact entered, the defendant was charged with the costs of opposing.
    The chancellor has jurisdiction to award such costs, although the cause is not regularly before him by appeal.
    August 24th.
    The defendant applied' to the vice chancellor of the first circuit to set aside an order taking the bill in this cause as confessed; which was denied with costs. The defendant’s solicitor then gave notice that he intended to appeal from that decision, and that he should bring on the hearing upon the appeal on the next motion day before the chancellor. The counsel for the complainant appeared on that day, but no appeal had in fact been entered. The only question was whether any and what costs the defendant was liable to pay.

      B. F. Butler, for the complainants.

      J. Rhoades, for the defendant.
   The Chancellor.

' As no appeal has been actually entered, the complainants are not entitled to the usual costs on the affirmance of an order. But having been improperly brought here, the defendant must pay them the costs of appearing to oppose the hearing on the appeal. The chancellor has jurisdiction to award such costs, although there is no general jurisdiction in relation to the cause,-which is not regularly before him. ( The People ex rel. Mallard, v. The Judges of Madison County. 7 Cowen, 423. )


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    Governeur vs. Lynch.
    Where lands belonging to several persons are covered by a mortgage given, by the person from whom they derive their titles, .the several parcels' must be sold to satisfy the mortgage in the inverse order of their alienation. The first purchaser from the mortgagor has the prior equity, although the consideration was not actually, paid until after other portions of the lands had been purchased and paid for. - ,
    -If a vendee is in possession of lands, under a contract to purchase, a subse- ' quent purchaser or mortgagee has constructive notice of his equitable rights, and takes the land subject to his prior equity.'
    If the purchase money has been paid by a vendee before a subsequent mortgage is recorded, the mortgagee will have no claim upon the land.
    If a part of the purchase money remains unpaid at the time the mortgage is recorded, such mortgagee will have an equitable lien on the land to the extent of the unpaid purchase money.
    August 24th.
    This was a bill of foreclosure. The defendant Lynch gave á mortgage upon a large trapt of land, part of which was under contracts for sale previous to the date of the mortgage. The purchasers at the date of the mortgage were in. possession and had paid considerable portions- of the purchase ■ money. They have since paid the residue to the mortgágor. Other parts of the lands were afterwards sold to various other persons who are made defendants in this suit.
    ■ A. McDonald, for the complainant.

      J. Edwards J. McKown, for the, defendants.
   The Chancellor.

Where lands belonging to several persons are covered by a mortgage given by the person from whom they all derive their titles, the lands last s.old by him ' are first liable to satisfy the incumbrance ; and the several • parcels must be sold by the master in the inverse order of their alienation. Where the purchase money has been paid in good faith, the first purchaser has the prior equity, although the consideration was not actually paid until after other portions of the lands had been purchased and paid for by the vendee.

■ If a vendee is in possession of land, under a contract to purchase, a subsequent purchaser or mortgagee has construe-.., tive notice of his equitable rights ; and takes the land subject to his prior equity. (5 John. Ch. R. 29. 4 Little’s R. 317. I Munro’s R. 301.) If the purchase money has been paid before notice of and prior to the recording of a subsequent mortgage, the mortgagee will have no claim upon the land. Where a part remains unpaid, he will have an equitable lien thereon to the extent of the unpaid purchase money.

The decree in this case must be drawn up in conformity to these principles; and if the lands not contracted for at the date of the mortgage are insufficient to pay the amount due to the complainant, with costs, the master must ascertain and report the amount of the purchase money which was due on . the other lots at the time of the registry of the mortgage.


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    The Ontario Bank vs. Strong and others.
    An order for the appearance of a non-resident infant defendant, must be obtained and published, or served in the same manner as in the case of adult defendants.
    And if the infant does not appear by guardian within twenty days after the expiration of the time limited in the order, the complainant may apply to the court to appoint a guardian ad litem to appear and answer for such infant.
    Where a bill filed by a corporation aggregate to foreclose a mortgage, is taken as confessed against an absentee, and a reference is made to a master to take proof of the facts and circumstances stated in the bill, it is proper under the revised statutes, (2 R. S. 187, sec. 128,) to examine the officers of the corporation, as to the payments which ought to be credited on the mortgage.
    Where only a part of the mortgage debt is due, a decree for a sale will not be ordered until a reference has been made to a master and he has reported as to the situation of the mortgaged premises.
    If the master upon such reference reports that a sale of the whole premises is necessary, he should give the reasons upon which his opinion is founded.
    If he decides that the property may be sold in parcels, he should state in his report the relative situation and value of the several parcels, and what part of the premises ought to be first sold, and all other facts necessary to enable the court to make such order of sale as will be most beneficial to the parties.
    August 26th.
    This w;as a suit to foreclose a mortgage. Some of the ¡defendants were absentees, and one of whom was an infant. On a former day, upon an application to appoint a guardian for the non-resident infant, the Chancellor decided that an or-' der for thp infant to appear must be obtained and published or served in the usual manner; that if the infant did not appear by guardian within twenty days after the expiration of the time limited in the order, the complainants . might then apply to the court for the appointment of a guardian ad litem to appear and answer for .him. •
    , The bill having been taken as confessed against-the adult defendants, and those who were infants having put in a general answer by their guardian, a reference was made to a master to examine and report as .to the truth of the facts stated in the. complainant’s bill and to compute the amount due upon the mortgage, The complainants being a corporation aggregate, their cashier and clerks were examined as to the payments which ought to be credited on the mortgage. The Chancellor' decided, that this was the correct practice ’ under the article of the revised statutes relative to proceedings against absent defendants. (2 R. S. 187, §, 128.) But all the mortgage money not being due, the question was now raised whether an order of sale could be. made before a report was obtained as to the situation of the mortgaged premises.

      N. W. Howell, for the complainants.
   The Chancellor.

By the 163d and 165th sections of the article of the revised statutes relative to the foreclosure of mortgages in equity, (2 R. S. 193,) the legislature evidently intended that no decree for the sale of mortgaged premises should be made, where only a part of the debt had become due, until there had been a reference and report as to the situation of the premises. In Everitt v. Huffman, (1 Paige’s Rep. 648,) this court decided ‘ that in cases like the present»the complainant might have a common order of reference to ascertain the facts, or might insert a direction to the master to that effect, in the usual reference to compute the amount. If the master decides that a sale of the whole premises is necessary, he should state the reasons why that ■ will be- most beneficial to. the parties. And if he decides that the property may be sold in parcels, he should state the relative situation and value of the several parcels, and which should be first sold ; pr such other facts in relation to the property as will enable the court to act understandingly in making such an order of sale as will be most beneficial to the parties.

In this cáse there must be-, a further reference and report» as to this matter, before any, decree for the sale can be entered.


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    Smith and others vs. Kane and wife.
    Where a debt due to the wife before marriage has never been reduced into possession by the husband, it is considered the property of the wife so as to be subject to her equity for the support of herself and children.
    If a creditor asks the aid of a court of chancery to reach property of thehus- " band which is not subject to an execution at law, he must take such property subject to the wife’s equity, if she has any therein.
    Sep. 7th.
    The bill in this case was filed by certain judgment creditr ors of Kane and Smith, who had proceeded to execution against them without obtaining satisfaction of their debts.
    Kane had been convicted of forgery, and sentenced to imprisonment in the state prison. The principal object of the bill was to reach certain monies claimed by his wife, and an injunction had been obtained to prevent her from using the same for the support of herself and children. She having put in her separate answer, a motion was now made in her behalf to dissolve the injunction.

      M. T. Reynolds, for the complainant.

      Azor Taber, for Esther Kane.
   The Chancellor.

From the answer of the defendant E. Kane, it satisfactorily appears that she has the equitable right to the money in the hands of Alexander, for the support of herself and children. It was a debt due to the wife before her .marriage with Kane, and he has never reduced it into possession. By the consent of her husband, and in pursuance of a verbal antenuptial contract, she has been permitted to preserve this small fund as her separate property. In such a case this court would not aid the husband in obtaining this money from her or her depositary; and his- creditors or general assignees can have no greater equities. (Hornsby v. Lee, 2 Mad. Rep. 16. Gayner v. Wilkinson, 2 Dick. 491. Ex parte Beilby, 1 Glyn & Jam. 167. Udall v. Kenney, 3 Cowen, 590.) When an execution creditor comes into this court to reach property , of the husband which is - not subject to execution at law, he must take it subject to the wife’s .equity, which she had -a right to insist on as "against her husband.

The property in controversy here being wholly insufficient for the support of the wife and her children, and she having the prior equity, the injunction must be dissolved.


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    Knickerbacker vs. De Freest and others.
    The court will not appoint a guardian at litem for an infant defendant upon the nomination of the complainant.
    If a guardian ad litem neglects his duty to the infant, whereby such infant sustains an injury, the guardian will not only be punished for his neglect, - but he will also be Bable to the infant for all damages he may have sustained.
    It is the special duty of a "guardian ad litem to submit to the court for its consideration and decision every question involving the rights of the infant affected by the suit.
    When the complainant applies for the appointment of a guardian for an'in. fant defendant under the last .clause of the 144th rule, he will be entitled to an order appointing such person guardian as shall then be designated by the court, unless the infant, within ten days after service of a copy of such order, shall himself procure a guardian to be appointed.
    A copy of such order may he served personally upon the infant if he is of the age of 14 years or upwards, and if he is under that age, then upon his general guardian, or his relative friend or other person with whom he resides.
    Upon the expiration of the ten days, upon filing an affidavit of the service of the order, and that no notice has been received of the appointment of a guardian ad Htem by the infant, the complainant will be entitled to an order of course that the former order for the appointment of a guardian be made absolute.
    In partition causes, where security is required from the guardian, the order must require the infant to procure a guardian to be appointed, and that he file the requisite security within the ten days, or that an order for the appointment of the person named by the court will be made absolute upon his filing such security.
    Where the infantas a non-resident, special directions must be given as to the manner of service of' the order, if any notice thereof shall be deemed requisite.

      This was an application on the part of the complainant to appoint a guardian for an infant defendant. The infant had neglected to appear, for twenty days after the time for appearingas prescribed in the 22d rule had expired; and a petition was thereupon presented to the court agreeably to the last section of the 144th rule, requesting that a particular person named in such petition should be appointed guardian.
    August 31st.

      S. K. Kip, for the complainant.
   The Chancellor.

The court never selects a guardian ad litem for an infant defendant on the nomination of the adverse party. It is frequently necessary for the guardian seriously to contest the complainant’s claim. It is his duty in every case to ascertain from the infant and his friends, or from other proper sources of information, what are the legal and equitable rights of his ward. And if a special answer is necessary, or advisable, for the purpose of bringing the rights of the infant properly before the court, it is his duty to put in such an answer. If the infant is a mere nominal party, or has no defence against the complainant, and no equitable rights as against his co-defendants which render a special answer necessary, the general answer will be sufficient. If the infant has any substantial rights which may be injuriously affected by the proceedings in the cause, or if the claim against him is of a doubtful character, it is also the duty of his guardian ad litem to attend, before the court on the hearing, on the taking of testimony in the cause, on references to the master, and on all others proper occasions to bring forward and protect the rights of his ward. And if the guardian neglects his duty, in consequence of which the rights of the infant are not properly attended to, or are sacrificed, he may be punished for his neglect. He will also in such case be liable to the infant for all damages he may sustain. Although it is the duty of the court to protect the rights of infants, when they are properly before it, so that they may be seen and fairly understood, yet it is the special duty of the guardian ad litem to bring those rights directly under the consideration of the chancellor for his decision thereon, ^is being the duty, of the guardian, it would be improper in any case to permit the complainant to name the person who tQ regjgt c]aim against the infant.

The revised statutes have made provision for the. appointment of a guardian for an infant defendant in courts of com-. ' mon law, where he neglects to have one appointed for himself. (2 R. S. 447, § 10, 11.) ■ It is therefore advisable that the proceedings in this court should conform to the spirit of those provisions. There a guardian is not to be appointed ‘ for an infant, on the application of the adverse party, until the infant defendant has been duly notified and required to procure one to be appointed for himself. When,the complainant applies for the appointment of.a guardian for an infant defendant, under the last clause of the 144th rule, he will be entitled to an order appointing such person as shall then be designated by the court guardian ad litem, unless the infant, within ten days after service of a copy of suchorder, shall procure a guardian to be appointed for himself; and shall, give notice thereof to the complainant; Such service may be made on the infant, ór at his place of residence, in the usual manner, if he is of the age of 14 years or upwards. If he is under that" age it should be served ón his general guardian, or on tiis relative, friend or other person, with whom he resides. At the expiration of the ten days, on filing an affidavit of the service of the order, and that no notice of the appointment of a guardian ad litem has been received, the complainant may have an order of course that the former order for the appointment of the guardian named by the court, be made absolute.

In partition causes, where security is required from the guardian,the order must require the infant to procure a guar-, dian to bé appointed and to file the requisite security within the ten days, or the order for the appointment of the person ■named by the court will be made absolute, on his filing such ■ security. Where the infant is a non-resident, special direc- , tions must be given by the court as to the manner of serving the order, if any notice thereof shall be deemed requisite.

In this case James Porter is appointed guardian ad litem, if the infant defendant shall not procure one to be appointed for himself within ten days.


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    The Fulton Bank vs. Ebenezer S. Beach and others.
    Where, in a suit ^against 12 defendants, an answer was put in and filed, pur. porting to be the joint and several answer of all, but was in fact not signed or sworn to by one of the defendants, and after a replication was filed, proofs taken, the cause set down for hearing, a motion for re-examination of a witness, a denial of the same, an appeal from such decision, and a motion for leave to file a supplemental answer, a separate answer was filed without leave of the court by the defendant who had not joined in the original answer, setting forth substantially the same defences asked to be allowed to be set forth in the supplemental answer, it was held that the separate answer was filed irregularly, audit was directed to be taken off the files of the court.
    It seems that where the parties agree that an answer may be put in without oath or signature, it is of course for the court so to order.
    An answer should regularly be signed and sworn to, but the signature and oath may be waived by the complainant, and the filing of a replication is evidence of such Waiver.
    August 6th.
    An answer was put in' for all the defendants in this cause in October, 1827. By the caption it purported to be the joint and several answer of Ebenezer S. Beach and all the other defendants; and was signed by the solicitor of all the defendants; but through inadvertence it was not sworn to by Beach. The complainants filed a replication, treating it as the answer of all the defendants; and the testimony was taken in the cause, and the proofs regularly closed therein. Two motions were afterwards made in behalf of all the defendants ; one to re-examine a witness, and the other to permit them to amend their answer, or to file a supplemental one; which were denied. From both these orders the defendants applied to the court for the correction of errors, and the decisions of this court were there affirmed. After the decision of the last motion, and before the appeal from that decision, the defendant Beach, without any previous order of the court allowing him to do so, put in a new and separate answer for himself; having then recently, discovered that he had not sworn to the first answer. And the complainants now moved to take this answer off the files of the court, as irregularly and improperly filed. ■ ■

      J. Hóyt, for the complainants.

      S. A.-Foot, for the defendants.
   The Chancellor.

There can be no possible doubt that • the filing of this second answer, without the leave of the court was irregular, and the same was a nullity. The court, for the purpose of preventing irregularities and to preserve its files from being encumbered with ' improper papers, prohibited answers from being filed without oath, except under an order of the court. But an answer thus filed was good as against the party who put in the same, and it did not lie in his mouth to complain of his own irregularity, or of that of his solicitor. If the complainants had known pf the answer not being sworn to', they "might notwithstanding have treated it as a valid answer ; and if they chose to treat it as such, it would have the same effect in favor of the defendants as if it had been sworn to by all. , Whether -in this particular case their solicitor did know of the fact is therefore immaterial, though I presume all parties supposed for nearly two years afterwards that it had been actually sworn to by all the defendants whose answer it professed to be. As it was a joint and several answer, if it was irregular as' to one of the defendants, it was, irregular as to all. There is no pretence that it was not precisely such an answer as Beach would have consented to if it had been presented to him, at that time, instead of being put in by his co-defendant, who was also his solicitor ;• though subsequent events have made it of importance to all the defendants now' to alter their defence. . At the time this last answer was put in, the' other defendants had the same right to take advantage of their former irregularity as Beach himself. The testimony had been taken for all the defendants, and the cause was in readiness for hearing as to all. '

This irregularity has not been , cured by any act of the complainants. Even if the subsequent appeal was not an absolute abandonment of' his answer, the complainants have done no act founded on the answer by which it was treated as a regular proceeding. It was, in that stage of the proceedings» absolutely void, and could, not be made good without some positive act of the complainants affirming its validity. If they had filed a replication thereto, neither party could have taken any proofs thereon without a special order of the court» as the proofs were regularly closed ; and the court of errors, on 'the appeal which was then pending, have decided that they cannot be opened. It was therefore not material whether they moved to take it off the files immediately after it was placed there,'or at a later period. If this motion had not been • made, the paper thus filed could not, on the hearing, have been treated as any part of the pleadings in the cause,; and after the decisions of the court of dernier resort on other questions in. this cause, founded on the presumption that the cause was in readiness for hearing on the pleadings and proofs as they formerly stood, this court could not have treated this as a valid answer.

, As this paper, is improperly on the files, and ought not to remain there to produce confusion in the records, the motion that it be taken off the files must be granted. But as the same thing would have been done at the hearing, on a ■ mere suggestion, when all the facts were before the court, I shall not charge the adverse party with the costs of this application.

         Affirmed December, 1830, 6 Wend. Rep. 36.


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    Law vs. Ford.
    As a general rule, each one of 'the members of a copartnership has an equal right to the possession of the partnership effects, and to collect and apply them in satisfaction of the debts of the firm.
    Where either partner has a right to dissolve the partnership, and the articles of copartnership do not provide for the settlement of the concern, upon a bill filed for that purpose by one of the partners, the appointment of a receiver is a matter of course.
    In such case the court will direct the receiver to apply the .partnership funds to the payment of all the debts of the firm, rateably, without giving any pref-' eterice to the favorite creditors of, either partner.
    Nov. 10th.
    This was an application for the appointment of a receiver, to dispose of the effects and close up the concerns of a partnership, on a bill filed by one partner' against another. The application was resisted on the ground that. the partner who was in possession of the partnership books and effects, was willing to give security for the faithful application of the; effects in payment of the debts.

      S. B. H. Judah, for the complainant.

      Jesse Oakley, for defendant.
   The Chancellor

said that, as a general rule, each partner had an equal right to the possesion of the partnership ef- • fects, and to collect and apply them in satisfaction of the debts of thé firm. That where either party had a right to dissolve the partnership, and the agreement between the partiés. made no provision for closing- up the concern, it was of course to appoint a manager or receiver, on a bill filed for that purpose, if they could not arrange the matter between themselves. .That in such a case the court would direct the receiver to apply the partnership property and funds to the payment of all the debts of the firm, rateably, without giving a preference to the favorite creditors of either partner. ■