text:
    W. T. & J. Merritt vs. Lambert.
    A tender of the money due On a mortgage after the condition of the mortgage has been broken, does not turn what was before an equity of redemption into an absolute estate discharged of the lien of the mortgage money which remains unpaid. But a tender of the money on the day it becomes due is a compliance with the condition, and by the terms of the mortgage divests the whole interest or estate of the mortgagee in the premises.
    Where lands were bid in by the Farmers’ Fire Insurance and Loan Compa. ny, under a master’s sale upon the foreclosure of a mortgage given to the company; Held, that it was too late for the mortgagor to redeem after the premises had been actually sold by the corporation, by a valid and binding written contract for that purpose, although the legal title had not yet been actually transferred by deed from the corporation to the purchaser.
    December 18.
    This was an appeal, by the defendant, from an order of the vice chancellor of the first circuit, directing the appointment of a receiver of the premises in controversy in this suit. The bill was filed to compel the specific performance of a contract for the conveyance to the complainants of the unexpired term in several leasehold lots in the city of New-York, in exchange for certain freehold property in the city of Buffalo; and the principal question in dispute between the parties was whether the complainants could malte a good title to the defendants of the Buffalo property.. The facts upon which that question depended were theseThe title to the property was originally in O. Edwards, who mortgaged the same to the Farmers’ Fire Insurance and Loan Company. That mortgage was foreclosed in chancery, and the premises were sold by a master and bid in by E. Tibbits, the president of the company, who took a conveyance therefor in his own name, in September, 1834, although he in fact purchased the same in for the benefit of the company. In March, 1835, the complainants entered into a written contract with the Farmers’ Fire Insurance and Loan Company, to purchase of that company the mortgaged premises, so bid in by Tibbits, for $13,000 with interest, one-third to be paid on the first of May then next, and the residue within five years. And the company covenanted that the complainants should have the immediate possession of the premises, and that the company would cause the legal title to be conveyed to the purchaser without any unreasonable delay; Tibbits having died and the legal title being then in his executors, or his heirs at law. On the 29th of April, 1835, the complainants paid the company one-third of the purchase money according to the contract. And on the 30th of May, 1835, the executors of Tibbits conveyed the premises to the corporation to enable it to give a legal title to the complainants in pursuance of the contract, and the widow released her claim to dower. The company thereupon executed and tendered a deed to the complainants, which their counsel considered as insufficient to convey the legal title. And the complainants thereupon filed a bill against the company for a specific performance of the contract, before the vice chancellor of the first circuit; in which suit the executors and heirs at law of Tibbits were made parties. In December, 1835, the vice chancellor decided and decreed that the legal title to the premises was in E. Tibbits at the time of his death, as a trustee for the corporation ; and that it descended to his heirs at law, who then held the same in trust for the company. A specific performance of the contract with the complainants was therefore directed ; and the heirs of Tibbits were decreed to join in the conveyance; which decree was after-wards carried into effect accordingly. [See Merritt v. Farmers’ Fire Insurance and Loan Company, 2 Edw. Ch. Rep. 547.] By a proviso in the act incorporating the company it is declared, that where the corporation has become the purchaser of any real estate on which it has made loans, the mortgagors shall have the right of redemption of any such property on payment of the principal and interest and costs, so long as it remains in the hands of said corporation unsold. And some time in the summer of 1835, Edwards the mortgagor having discovered, by the institution of the suit before the vice chancellor, that Tibbits held the premises in the character of a trustee for the corporation, he tendered to the company the amount of the debt and costs and the interest, and demanded a release or reconveyance of the premises. And he afterwards brought an ejectment suit to recover possession of the premises, and gave the complainants notice of his claim before the execution of any conveyance to them under the decree of the vice chancellor; which ejectment suit was still pending and undetermined at the time the application for a receiver was made.

      M. T. Reynolds, for the appellant.

      Julius Rhoades, for the respondents.
   The Chancellor.

If the complainants have a perfect title to the Buffalo lots, so that they can give a title to the defendant discharged of any legal or equitable claim thereon in favor of Edwards, then there is no doubt that the order appealed from is right and ought to be affirmed. The situation of the property in New-York is such that a receiver is necessary, to collect the rents and profits, pay up the ground rents, and keep down the interest of the large mortgage thereon, and thereby to save the property from being lost pending this litigation. I shall therefore proceed to examine the only real questions in the case.

For the purpose of this suit I shall take it for granted that Tibbits actually held the legal title, under the master’s deed, for the benefit of the corporation, as a resulting trust, in consequence of his taking the deed in his own name and paying the purchase money out of the funds of the company. For this purpose it is necessary to presume he took the conveyance in his own name without the consent or knowledge of the company, to whom the purchase money belonged, or in violation of his trust as an officer of the corporation; so as to bring the case within the provisions of the sixty-third section of the article of the revised statutes relative to uses and trusts. (1 R. S. 728.) For if the conveyance was taken to himself with the knowledge and by the authority of the directors of the corporation, the fifty-first section of that article gives the property to him absolutely, for his own benfit. And the corporation in that case would only have a personal claim on him, for the purchase money, to the ex tent of his bid, or the amount of its funds which had been applied towards the purchase.

Even if the legal title to these premises had been in the corporation, for its own benefit, at the time of the tender by Edwards, I do not think a mere tender of the money, without actual payment, could have the effect to divest the legal title; so as to enable him to maintain an ejectment suit, without filing a bill to redeem, under this provision in the act of incorporation of the company. I am aware that in the case of Jackson v. Craft, (18 John. Rep. 110,) the supreme court decided that a tender of the mortgage money forever discharged the lien on the land, and left the mortgagee to his mere personal remedy against the original mortgagor. But that case I believe has been doubted by the profession ever since the report of the decision appeared; so far as relates to an absolute discharge of a mortgage by the mere tender of an amount which turns out to have been sufficient; and where the condition of the mortgage had been broken by the non-payment of the money at the day of payment prescribed in the instrument. And I am not aware that the decision upon that point has been followed in any subsequent case. The mistake of Mr. Justice Woodworth who delivered the opinion of the court, arose from the misapplication of a correct principle ; but which is imperfectly stated in Bacon’s Abridgment, to which he refers. It is there said “ If A. borrow one hundred pounds of B. and mortgage land to B. with condition for payment thereof, in this case if A. tender the money and B. refuse to accept thereof, the land is discharged; but the debt which existed before the mortgage remains, and may be recovered in an action.” (Bac. Air. tit. Tender, F.) He also refers to Coke upon Littleton where the same principle is laid down in Lord Coke’s note in nearly the same words. Indeed the language of the 338th section of Littleton himself, to which that note is attached, is calculated to carry the impression that a tender of the mortgage money and interest at any time, was sufficient to defeat the lien of the mortgage and revest the legal estate in the mortgagor. But by a reference to the previous sections it will be seen that both Littleton and Coke were speaking, in this subsequent section, of a tender at the day; so as to revest the legal estate by a literal compliance with the condition of the mortgage, so far as it was possible to do so when the mortgagee would not recieve his money although tendered at the day. (See Coventry’s Readable edition of Coke upon Littleton, § 334, 335, 336, 337, and notes.) The correct principle, as intended to be laid down by Littleton and Coke, is that if there is a tender of the mortgage money at the time and in the manner prescribed in the condition of the mortgage, and the mortgagee refuses to receive it, the condition is complied with; and the estate reverts back to the mortgagor by the express terms of the instrument. So that if the mortgagee is so unwise as to refuse his money when it is tendered at the time and place and in the manner prescribed in the instrument itself, he necessarily must lose his security upon the land which was merely collateral to the debt; although the mortgagor may be still liable for the money, where there is an existing indebtedness. But if the money is not paid by the day, the condition upon which the land was to revert to the mortgagor has not been complied with ; and the interest of the mortgagor in the land is then reduced to a mere equity of redemption. And an actual payment, and not a mere tender or offer to pay then becomes necessary, to discharge the legal and equitable lien of the mortgagee upon the land. Indeed by the common law the actual payment of the mortgage money and interest, after the day, was not sufficient to revest the legal title in the mortgagor or his assigns ; but a reconveyance of the premises was necessary. And for these reasons it is that the mortgagee, or his assigns, or subsequent incumbrancers upon the mortgaged premises, are driven to a bill to redeem, where the mortgagee refuses to receive what is equitably due to him. But this could not be necessary in any case if a mere tender of the amount due, after the mortgage has become forfeited, would have the legal effect of discharging the mortgaged premises from the lien of the mortgage. This being the situation of the mortgaged premises before the foreclosure and sale but after the day of payment was past, the legislature probably did not intend to give the mortgagor any greater rights in relation to the redemption after such sale than he before possessed. The legal title is therefore unquestionably in the complainants, and they are at law entitled to retain the possession of the premises notwithstanding the tender.

If the mortgaged premises were held by Tibbits as the trustee of the corporation by virtue of a resulting trust, in equity the land belonged to the corporation ; and upon the equity of the statute the corporation was the purchaser of the premises under the decree of foreclosure, so as to give the mortgagor the right to redeem so long as the property remained in the hands of the corporation unsold. I am satisfied, however, that, upon a true construction of this provision in the act of incorporation, a valid and bona fide sale of the premises in equity, and especially where the purchasers had paid one third of the consideration before there was any attempt to redeem, was sufficient to deprive the mortgagor of the right to redeem the premises from the master’s sale. The moment the contract for sale was executed with a bona fide intent to carry that contract into effect according to the terms thereof, accompanied as it was to be by an immediate delivery of the possession to the purchasers, the complainants in this suit had a right to insist upon a specific performance of the contract. And the premises no longer remained in the hands of the corporation unsold, within the intent and meaning of this provision in the act of incorporation. The right of the mortgagee to redeem was therefore gone, although the legal title still remained in the heirs of Tibbits, or in the corporation, at the time of the tender in the summer of 1835. And a notice to the complainants of a claim of a right to redeem, when no such right in fact existed, could not prevent them from afterwards clothing their equitable estate in the premises with the legal title, by taking a conveyance under the decree for a specific performance of the contract of purchase. They have therefore a perfect title to the Buffalo lots, free from any legal or equitable claims thereon, so far as appears upon the papers now before me. And if so, the complainants will in the end obtain a decree for a specific performance of the contract with the defendants. The fact that an ejectment suit has been brought by a third person who has no legal or equitable claim to the premises, certainly forms no valid defence to present suit; although the defendant had not heard of that ejectment suit at the time he agreed to purchaser

The order appealed from is therefore affirmed with costs.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Baxter vs. Lansing.
    Where the lessor brought a suit at law against his tenant, to enforce a forfeiture of the lease, for a breach of the condition of the lease by cutting timber upon the demised premises, of very trifling value, and the tenant filed a bill in chancery against the landlord, and obtained a regular decree by default, for a perpetual injunction, restraining him from proceeding in the suit to enforce the forfeiture; but without prejudice to his right to sue upon the covenants in the lease, to obtain satisfaction for the actual damage sustained! Held, that the defendant was not entitled to have the default set aside and the decree opened, to enable him to make a defence to the suit in chancery, the only object of which defence was to enable him to proceed in the suit at law to enforce the forfeiture of the lease.
    A court of equity will not lend its active aid to enable a party to enforce a penalty or forfeiture. It will not, therefore, set aside a regular decree by default, on the application of the defendant, for the mere purpose of enabling him to enforce a forfeiture in a suit at law.
    It seems a court of equity can only relieve against a forfeiture, for a breach of condition contained in a lease, in cases where the act or omission, by which the forfeiture was incurred, was the result of an accident or mistake for which compensation can be made to the other party, or where the penalty or forfeiture is in the nature of a mere security for the payment of money, &c.
    December 18.
    This was an application on the part of the defendant to open the final decree, which had been made against him in this cause, and to permit him to come in and defend the suit. The complainant was the assignee of a lease given by the defendant; and the object of the bill was to obtain a decree for a perpetual injunction, restraining the defendant from proceeding at law to enforce a forfeiture of the lease? on the ground of the alleged breach of a covenant contained therein prohibiting the tenant from cutting down any timber, trees, or staddles, standing or growing upon the demised premises. The bill was taken as confessed, for the want of an appearance by the defenhant; and a final decree thereon was afterwards regularly entered, and duly enrolled, restraining the defendant from prosecuting any suit to enforce a forfeiture of the lease bn account of the alleged cutting of any timber, sticks, or staddles, prior to the filing of the complainant’s bill. The subpoena was served upon the defendant personally, and he retained his son as solicitor to defend the suit. But the son, as he alleged in his affidavit, supposing that the complainant’s solicitor could not obtain an order to take the bill pro confesso without serving upon the defendant, personally, notice of an order for him to appear, or after compelling such appearance by attachment, neglected to enter an appearance or to give notice of his retainer to the solicitor of the adverse party. The result of this neglect to enter an appearance, or to give notice that he was employed to defend the suit, was that neither the defendant nor his solicitor was aware of any proceedings in the cause, subsequent to the service of the subpoena, until one month after the final decree had been perfected by a regular enrolment thereof.

      H. P. Hunt, for the complainant.

      D. Buel, jun. for the defendant.
   The Chancellor.

It is hardly possible to conceive that any solicitor of this court should have been so ignorant of its practice, as not to know that the complainant could proceed, upon the personal service of a subpoena, without the necessity of serving notices of the subsequent proceedings in the cause upon the defendant, who had neglected to appear. I can therefore only account for the delay of the defendant’s solicitor to give notice of his retainer, and to enter the defendant’s apearance, upon the supposition that ho believed the bill was in fact what he calls it in his affidavit, a bill of discovery. If he supposed it to be amere bill of discovery to obtain the admission of facts to be used as a defence in the ejectment suit at law, and wished to delay the answer and discovery as long as possible, I can th.en account for his supposing that no advantage could be obtained of his client until he had been compelled to appear and make the required discovery by his answer. But the intention of the solicitor, however, to drive the adverse party to an attachment, for the purpose of compelling the defendant to obey the process of the court, forms but a lame excuse to such solicitor upon an application to the favor of the court, when he afterwards finds that his client, instead of being guilty of the intended contempt, has lost the opportunity of defending the suit. And I have great doubts whether the court ought to interfere in such a case, after the enrolment of a final decree, even to let in a meritorious defence; where there was no countervailing consideration to be urged against the equity of the relief sought by the defendant’s application.

The sworn answer which the defendant proposes to put in would probably have been a good defence to this suit if it had been interposed in time; according to the more modern decisions in relation to the power of this court to relieve against the consequences of a breach of a condition subsequent. In the case of Northcote v. Duke, (Ambl. Rep. 513,) Lord Northington said, in reference to this question, I take the rule to be that in all cases where a person has broken a condition, and forfeited a penalty, equity will relieve if there can be a compensation. I think the court may relieve where the tenant cuts down timber.” And he was certainly sustained in that opinion by the language of the court in some of the previous cases. But the decisions in the more recent English cases limit the active interference of the courts of equity, in behalf of the tenant, to those cases only where the act or omission by which the forfeiture was incurred was the result of accident or mistake, and where compensation can be made to the adverse party; or where the penalty or forfeiture, stipulated for in the lease, is in the nature of a mere security for the payment of money, &c. (Hill v. Barclay, 16 Ves. 402. 18 Id. 56, S. C. Reynolds v. Pilt, 19 Id. 134. White v. Warner, 2 Mer. 459. Bracebridge v. Buckley, 2 Price’s Rep. 200.)

These parties, however, stand in a very different situation at this time from that in which they were placed at the commencement of this suit. The defendant then was proceeding at law to enforce his legal right to a hard and onerous forfeiture, for a comparatively trifling injury. And he had the technical legal power to exact his pound of flesh, unless the complainant could induce this court, in the exercise of a legitimate authority, to lend its active aid to compel the defendant to relinquish the forfeiture, and to accept a compensation in damages in lieu thereof which would be only a fair equivalent for the actual damage sustained by the breach of the covenant. Now, by a proceeding on the part of the complainant which was perfectly regular, the technical legal rights of the parties are reversed. The complainant has obtained a decree by which the defendant is deprived of the power to enforce the onerous forfeiture, for any breach of the covenant which had occurred previous to the filing of the bill; but he is left at perfect liberty to recover a full compensation in damages, by an action of covenant. The defendant is also left in the full possession of his legal right, under the lease, to insist upon a forfeiture if there should be any future breach of this covenant. In this situation of the case the defendant applies to the equity and justice of this court, to lend him its aid in removing the technical bar which the decree has placed in his way,, and thereby to enable him again to insist upon the fatal penalty— a forfeiture of the complainant’s whole estate. In answer to this application on the part of the defendant, the counsel for the adverse party interposes the fixed and inflexible rule that a court of equity will ndt lend its active aid to enable a party to enforce a penalty or forfeiture, And as the defendant, after a final decree in favor of his adversary, is compelled to ask that as a matter of mere favor, which in a different stage of the suit he might have been permitted to insist upon as a matter of strict legal defence to the complainant’s bill, the court, acting upon the inflexible rule above stated, will not grant his application if the sole object of it is to enable him to enforce a forfeiture. This court acted upon that principle in the case of The Fulton Bank v. Beach, (1 Paige’s Rep. 429,) by refusing to interfere in favor of a defendant who had made a slip in setting up the defence of usury to the complainant’s bill, unless such defendant would consent to waive the forfeiture or penalty. And that decision was afterwards affirmed upon appeal by the court of dernier resort. (3 Wend. Rep. 573.)

The only object of the defendant in wishing to open the decree in this case is to enable him to enforce the forfeiture at law, if he succeeds in his defence to this suit; for the costs which he would have to pay to the adverse party, if he was let in to defend, including the costs of opposing this application, would be equal to the whole costs which he is now bound to pay under the decree. It would therefore be a useless expense to both parties, to permit a defence to be made in the present suit upon the terms of the defendant’s agreeing to waive the forfeiture and to pay such costs. Better justice will be done to both parties by denying this application altogether, without any costs to the complainant '; and by leaving the defendant to recover a compensation, for the few trees which have been cut, by an action at law upon the covenant in the lease. The application to open the de-. cree is therefore denied.


text:
    Parsons vs. Bowne and others.
    Rights of parties which had become vested previous to the revised statutes could not be divested by a change of the law in such statutes ; but the remedy of such parties must be pursued according to the law applicable to the case as it exists at the time such remedy is sought to be enforced.
    After the revised statutes went into operation, and before the first of July, 1837, the only remedy of a creditor at large, against the real estate of a deceased person in the hands of his heirs or devisees, by suit, was by filing a bill in chancery under the provisions of the revised statutes. In such a suit the revised statutes appear to contemplate that each creditor shall bring a separate suit, for the recovery of his own debt only, against all the heirs or devisees jointly. It is not necessary therefore for the complainant, who files a bill under the revised statutes, to make any other creditors parties.
    In a bill filed by a creditor of the decedent, against heirs or devisees, to obtain satisfaction of his debt out of the lands descended or devised, if the complainant is unable to ascertain and specify the lands which have come to the defendants from the deceased, he may state that fact in his bill and call upon the heirs and devisees to discover the lands devised or descended to them respectively, and the incumbrances thereon, to enable him to reach such lands.

      Where a judgment or other incumbrance upon the property of a deceased person has been actually paid, but is fraudulently kept on foot by a third person, for the purpose of depriving a creditor of the decedent of his remedy against the estate in the hands of his heirs or devisees and to prevent its being sold for its full value on execution against them, it seems such third person is a proper party, though not a necessary party, to a bill filed by the creditor to obtain satisfaction of his debt out of the land in the hands of such heirs or devisees.
    Tras case came before the chancellor upon demurrer to the complainant’s bill. The complainant was a specialty creditor of Robert L. Bowne deceased, for the balance due upon a bond and mortgage executed by the latter, to the amount of about $19,000, and for interest thereon from October, 1827, when the mortgaged premises were sold under a decree of foreclosure against the heirs at law and judgment creditors of the decedent. The bill in this cause was filed previous to May, 1837, against the surviving children and heirs of the decedent and the children and heirs of one of his sons who died subsequent to the death of his father, to obtain satisfaction of the complainant’s debt out of the real estate which came to the hands of such heirs, according to the provisions of the revised statutes. The bill charged, among other things, that Robert L. Bowne died intestate, in June, 1821, and that letters of administration on his estate were granted to his son George, one of the defendants ; that the decedent died greatly embarrassed in his affairs, without leaving personal estate sufficient to pay his debts, and none whatever as the complainant was informed and believed; and that at the time of the commencement of this suit there was no personal estate of the decedent remaining which could be subjected to the payment of his debts. The bill further charged that Robert L. Bowne at the time of his death was seized of, or entitled to, a very considerable real estate, subject to the lien of sundry judgments against him, and to mortgages and other incumbrances thereon; that the complainant was not able to specify the real estate of which the decedent was seized at his death, nor all the incumbrances thereon, but was informed and believed that, in addition to the land mortgaged to the complainant, the decedent was seized of the equity of redemption in 45 acres of land in the city of New-York, particularly described in the bill, subject to a mortgage thereon given by him and his wife to W. Edgar; which mortgage had never been foreclosed, nor had the equity of redemption of the decedent’s heirs therein been extinguished. Various other particulars were stated in relation to the situation of the land in the city of New-York ; among others, that the mortgagee entered into possession thereof under his mortgage, in 1818; that he and his personal representatives had been in possession ever since ; and that the interest had been kept down by the receipt of the rents and profits. The complainant also stated that by the records of the supreme court it appeared that various judgments remained unsatisfied on record against the decedent at the time of his death; most of which he averred had been paid and satisfied ; and that many of them had been kept on foot by the defendants and their friends for the purpose of covering the real estate descended to them as heirs. He also set out the recovery of a judgment in the supreme court, in January, 1836, in favor of George Bowne, son of the decedent, as executor of his grandfather George Bowne deceased, against himself and the other defendants in this suit, as the heirs of Robert L. Bowne, for $65,403 12 debt and $77,35 damages and costs; which judgment he averred was without consideration and collusive. The complainant also alleged in his bill that Jones and White claimed to have an interest in the real estate of the decedent mortgaged to Edgar, in the city of New-York, as purchasers under a sale by execution on some of the judgments against Robert L. Bowne, or in some other way unknown to the complainant. But he insisted that as the heirs of the decedent were out of possession, and had a mere equitable claim to redeem the land, it could not be sold on execution under the judgments against their ancestor. And the complainant prayed a full discovery of the real estate of which Robert L. Bowne died seized, and of the several incumbrances and,liens thereon, and of its present situation and value, and also of the personal estate of which he died possessed; and for a decree for the payment and satisfaction of the complainant’s debt out of the said real estate in the hands of the defendants, or in such other way and in such shares as might be legal and proper.

      December 18.

      S. Stevens, for the defendants.
    The complainant’s bill cannot be sustained as a creditor’s bill under the revised statutes. In such case it would be necessary to exhaust the remedy at law, and a fi. fa. should be returned unsatisfied, in whole or in part. (2 R. S. 173, § 38. 1 Id. 744, § 4.) The equity of redemption may be sold on execution. The mortgagee has a mere chattel interest, which does not descend to the heirs at law, but goes to the executor. The debt is the principal and the mortgage the incident. (Rungan v. Missereau, 4 John. Rep. 41. 11 Id. 534. Coles v. Coles, 15 John. Rep. 319.) The interest of the heirs at law in the equity of redemption having been sold on execution, they take nothing in respect to the real estate described in the bill; and in respect to such real estate they are not responsible for the payment of the complainant’s debt. These are the only lands and premises described in the bill; and heirs are not chargeable on account of lands descended, any further than the same are described with reasonable certainty. (2 R. S. 454, § 44.) If the equity of redemption in this case is not a legal estate which descends to the heirs at law, then it is a mere equitable chose in action, and the heirs at law are not liable on account thereof for the debts of the ancestor. All persons whose interest may be affected by the decree should be made parties. (Elemendorf v. Taylor, 7 Cranch, 98. 10 Wheat. 162.) Starkweather and Cork having judgments which are liens on the premises, and White and Jones having purchased the equity of redemption at sheriff’s sale, they all have interests that may be aflected by the decree, and ought therefore to have been made parties. (7 Cranch, 98. 10 Wheat. 162.) The complainant alleges that the judgments of Starkweather and Cork have been paid. A decree cannot be entered that they be discharged, without the owners of the judgments being called upon and allowed to protect their interests. (3 John. Ch. R. 427.) The heirs at law cannot be called upon to disclose the personal estate. This can only be required of the administrator. (Thompson v. Brown, 4 John. Ch. R. 633.) The complainant is required to describe the lands descended with reasonable certainty. (2 R. S. 454, § 44.) And the defendants cannot be required to give an account of the whole estate real and personal of their father at the time of his death. The complainant cannot call for a disclosure of facts which are equally in his own power, and thus shield himself from the expense and trouble, and throw it upon the defendants. The complainant has an adequate remedy at law, and should first exhaust such remedy before filing his bill. (1 John. Ch. R. 463. Carter & Moore v. United Ins. Co., Moulton, 188, note 6, also note 5.) The only bill which can be sustained by the complainant is one filed after he has obtained a judgment at law, against the heirs at law and judgment creditors and mortgagees, for the purpose of paying off and redeeming the incumbrances, and that in case the heirs shall neglect to pay him the amount paid for the redemption of said claims with interest, costs, &c. and also his debt, that they be foreclosed, &c. If the complainant is entitled to no relief, then he can have no discovery in aid of that relief.

      M. T. Reynolds, for the complainant.
    The bill of complaint is filed under the provisions of the revised statutes, against the heirs, to obtain satisfaction of a debt of their ancestor. It sets forth the debt, and shows that it is not subject to a presumption of payment from lapse of time. The circumstance that the defendant’s right of redemption is a mere equity, not capable of sale on execution at law, would not be a ground of demurrer; since it is only in this court a creditor can reach it, and it is only by a decree in this court against the heirs that a creditor can acquire such a specific interest as would entitle him to redeem. And a judgment at law is not necessary to entitle us to come in under the statute ; if it was, we never could have a remedy, for we cannot at law sue heirs. It is not alleged that any of the lands descended to the heirs lias been sold on executions ; the only allegation in relation to executions is that Campbell P. White and David S. Jones claim to be execution purchasers of the Me w-York mortgage lands. The real estate descended, the incumbrances thereon, and also the outstanding debts of the ancestor, are all necessary to be disclosed and put in issue in order to obtain an apportioned decree under the statute; and consequently the allegations as to the buying in of debts by the heirs, or by others in their behalf, the application of the personal estate thereto and therefore a discovery of the personal estate, are all material to the relief. And the circumstance, that as to any part of these matters we could obtain information elsewhere, does not render the statement thereof in this suit unnecessary. And the voluminousness of the discovery is no objection to its being made. The allegation that the ancestor died seized of real estate, and that the defendants are heirs at law, is sufficient to maintain our bill; for the law casts the descent upon the heirs without entry, and our only remedy against the lands is by a suit in equity under the revised statutes against the heirs in whom the legal title is vested by descent.
   The Chancellor.

The demurrers in this case being general, both as to discovery and relief, they must be overruled if the complainant is entitled to any discovery or relief which is asked for in his bill, or to any relief which may be granted him under the general prayer. The objection that the complainant cannot come into this court, for the purpose of obtaining satisfaction of his debt out of the real estate of his deceased debtor in the hands of the heirs at law, until he has obtained a judgment for his debt and had an execution thereon returned unsatisfied, is wholly unfounded. Neither is there any ground for the objection, that the equity of redemption in the New-York property was a legal estate which the complainant could have reached by execution at law. Both objections proceed upon the assumption that the complainant could have sued the defendants in an action at law for the recovery of the debt due from their ancestor. But by the express provision of the forty-second section of the article of the revised statutes relative to suits against heirs, devisees, &c. (2 R. S. 454,) which was in force from the first of January, 1830, until after the filing of this bill, the heirs at law must be prosecuted jointly in a court of equity, for the debt of their ancestor, and were not liable to any suit in a court of law. The ancestor in this case died before the adoption of the revised statutes, and therefore the rights of his creditors, so far as those rights had become vested under the laws which were previously in force, could not be divested by a change of the law. But the remedy of the creditors must be had according to the provisions of the laws which are applicable to the case when that remedy is sought to be enforced. The jurisdiction of courts of law in suits against heirs and devisees,except in proceedings by scire facias, or in suits previously commenced, was therefore entirely suspended, by the section of the revised statutes above referred to, until the first of July, 1837, when that section was repealed. (See Laws of 1837, p. 537, § 73, 74, 78.) The only remedy, therefore, of a creditor at large of the decedent, to collect his debt out of the legal or equitable estate which had descended to the heirs at law, was by a bill filed, as this is, under the provisions of the revised statutes.

The complainant does not allege in his bill that the equity of redemption in the lands mortgaged to Edgar has been purchased, by Jones & White, under an execution upon a valid and subsisting judgment, against the decedent or his heirs; but merely alleges that they claim an interest in that property, either under a sale upon some of the judgments mentioned in the bill, or in some other way unknown to the complainant. It is not necessary therefore to decide, in this stage of the suit, whether all the interest of the defendants in that equity of redemption could be divested, by a sale thereof on execution, while the mortgagee or his representative was in possession of the premises under his mortgage. Neither was it necessary or proper for the complainant to make Jones & White parties to this suit; as he had no right to call them into this court to settle the question whether they had a legal title to the equity of redemption in the whole or any part of the New-York property. The objection that Jones & White are not parties to this suit is therefore overruled.

Neither was it necessary to make Cook & Starkweather» or any other persons claiming to be creditors, or to have liens upon the real estate descended to his heirs, parties to the suit. The statute contemplates a proceeding by each creditor for himself. And where the heirs have not aliened the land previous to the commencement of the suit they are not personally liable for the debt, but their respective interests in the land descended are to be sold on execution against the land itself. The purchaser will therefore take it, as in ordinary cases of sales upon execution, subject to all existing liens thereon, the validity of which liens he must afterwards contest with those who claim to have them, if necessary. Where a judgment, or other incumbrance upon the property, which has actually been paid is fraudulently kept on foot by a third person for the purpose of depriving the complainant of his remedy by a sale of the property of the decedent for its full value, or to diminish the amount which he would otherwise recover on account of the lands descended, I do not intend to decide against the complainant’s right to make such third person a party to a suit against the heirs or devisees. But such incumbrancer is not a necessary party; and the defendants therefore cannot demur to the bill if the complainant does not think proper to bring the incumbrancer before the court.

The complainant is required to specify in his bill, with convenient certainty, the real estate descended to the heirs or devisees. (2 R. S. 454, § 44.) This he has done in relation to the New-York lands. And as to other lands descended he says he is unable to do so; and he prays for a discovery from the defendants of the lands descended to them and of the incumbrances thereon. This discovery he is entitled to, for the purpose of enabling him, by an amendment of his bill, or otherwise, to reach other lands descended to the- defendants as heirs, if there be any other lands.

Several other causes of demurrer are specified, but as they merely go to a part of the discovery sought by the bill it is not necessary to consider them at this time; though I do not at present see any valid objection to any part of the discovery asked for by the complainant.

The demurrers must therefore be overruled with costs; and the defendants arc to have sixty days to pay those costs and to answer the bill.


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    Kellinger vs. Roe and others.
    Where an application is made to a surrogate to have the applicant appointed general guardian of an infant, if the application is denied and the applicant wishes to appeal from the decision of the surrogate refusing to make such appointment, he should make the infant, and not the relative of the infant who objected to his appointment, a party to his appeal; and the appeal bond should be given to him. And the chancellor, upon the appeal, will ap. point so ne suitable person as guardian ad litem for the infant, to answer the petition of appeal and to protect his rights.
    The surrogate, upon an application to him to appoint a general guardian of an infant, does not summon the relatives of the infant to attend before him as parties; but only to enable them to attend and give him the necessary informa, tion as to the infant’s property, and as to who is a proper person to bo the general guardian, &c. And the surrogate,may, if he thinks proper, appoint any suitable person to be guardian ad litem of the infant, on such application, to procure the requisite proofs; so as to prevent an improper appointment, or the taking of insufficient security in reference to the infant’s property.
    January 15.
    This was an appeal from a decision of the surrogate of the county of Westchester, denying the appellant's application to be appointed the general guardian of the person and the estate of Henry Doyer, the son of the petitioner's deceased wife, an infant about ten years of age. Upon the presenting of the petition the surrogate appointed a day for the hearing of the matter, and caused the relatives of the infant to be notified, that they might attend. Upon the day appointed S. E. Lyon appeared in behalf of the respondents, as the relatives of the infant, and objected to the appellant’s appointment; and the application was denied. He thereupon appealed from the order and decision of the surrogate ; but instead of the infant he made the several persons who had appeared as relatives to object to his appointment, parties to the appeal, and executed the appeal bond to them.

      M. T. Reynolds, for the appellants.

      Julius Rhoades, for the respondents.
   The Chancellor.

The proper person is not made a party to this appeal, so as to enable me to either affirm or reverse the order appealed from. The object of the legislature in authorizing the surrogate to direct notice of the hearing to be given to the relatives of the infant, residing in the county, was not to make such relatives parties to the proceeding; but merely to enable them to attend, if they thought proper, for the purpose of giving the surrogate the requisite information as to the value of the infant’s property and as to the propriety of appointing the applicant the guardian of the infant. And the surrogate may examine them or any other persons on oath as to any matter connected with the application, or as to the propriety of granting the same. But the relatives who appear for the purpose of objecting to the appointment cannot themselves be drawn in to litigate the question with the applicant in their own names, as parties to the proceeding, either by appeal or otherwise. The surrogate may, if he thinks proper, appoint one of such relatives, or any other suitable person, the guardian ad litem of the infant in relation to such application ; for the purpose of procuring the requisite proofs, so as to prevent an improper appointment of a guardian, or the taking of insufficient security in reference to the property. And if the appellant thinks himself aggrieved by the denial of his application, and wishes to review the decision of the surrogate by appeal, the appeal bond must be given to the infant himself, as the respondent; and this court will then, upon the application of the infant, or of some of his relatives in his behalf, appoint a proper person as guardian ad litem to protect his rights on the appeal ; and to answer the petition of appeal. Where the infant or his relatives do not apply to get a guardian ad litem appointed within a reasonable time for that purpose, the court will appoint one, on the application of the appellant, pto rotect the infant’s rights on the appeal.

As these respondents have been improperly made parties to this appeal, and thus subjected to the expense of defend- ^ samej the appeal must be dismissed with costs.


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    Lansing & Whitbeck vs. Easton & Robinson.
    Where an injunction, issued upon a creditor’s bill, prohibits the defendant from transferring, assigning, delivering or in any way interfering with or disposing of his property or effects, any active interference with the property, by the defendant or his agent, for the purpose of having th’e legal title to the same transferred to another and thereby to deprive the complainant of the equitable lien he has acquired thereon by the filing of his bill; is a violation of the letter as well as of the spirit of the injunction.
    Thus where two defendants informed a creditor that they had property Iiabls to be reached by execution, and consulted with each other an'd agreed to procure an execution to be issued, for the purpose of having such property sold thereon, and employed an agent to procure the issuing of the execution, and took and delivered the property to the sheriff who had the execution; Held, that such defendants were guilty of a contempt of court in violating the injunction; and they were fined a sum equal to the valne of the property delivered to the sheriff and to the costs of the proceedings upon the attachment issued against them.
    The fact that the defendants in violating the injunction acted under erroneous advice of counsel, will not protect them from a fine sufficient to compensate the adverse party for the injury sustained; although such advice may protect them from further punishment.
    Where there has been an actual breach of an injunction, the statute gives the court no discretion but requires the infliction of a fine sufficient to indemnify the complainant for the injury sustained by such breach and to satisfy his costs and expenses. And the defendant cannot, in such a case, be discharged from imprisonment, without the consent of the prosecutor, until the fine is actually paid.
    The ordiuary injunction, upon a creditor’s bill, will not prevent another judgment creditor from levying upon property, which is the proper subject of a levy and sale on execution, before the title of the defendant therein is equitably divested by an order for the sequestration thereof, or for the appointment of a receiver. Neither will the injunction prevent the defendant from confessing a judgment in favor of another bona fide creditor, unless there is a special clause therein to that effect. >
    January 15.
    This case came before the court upon two attachments ' against the defendants; the one upon the application of the complainants for an alleged breach of the injunction, and the other upon the relation of the receiver, for the neglect of the defendants to deliver over their property to him according to the order of the court. ,

      M. T. Reynolds, for the relators.

      J. Rhoades, for the defendants.
   The Chancellor.

The answers of the defendants to the interrogatories, in connection with their original examination before the master, show a palpable breach of the injunction in this case, by each of them. The ordinary injunction upon a creditor’s bill, which only operates upon the defendant, will not of course prevent another judgment creditor from levying upon property of the defendant which is the propeqsubject of a levy and sale on execution ; before the title of the defendant in such property is equitably divested, by an order for a sequestration thereof or for the appointment of a receiver. Neither will the injunction, unless there is a special clause therein to that effect, prevent the defendant himself from confessing a judgment in favor of another bona fide creditor, instead of driving the creditor to the expense of a suit; although the defendant knows it is the intention of such creditor to obtain a preference by levying on the property. But as the injunction prohibits the defendant from transferring, assigning, delivering, or in any way interfering with or disposing of his property or effects, any active interference with the property, by the defendant or his agent, for the purpose of having the legal title to the same transferred to another, and thereby" to deprive the complainant of the equitable lien he has acquired thereon by the filing of his bill, is a violation of the letter as well as of the spirit of the injunction. In this case the defendants did not content themselves with simply informing their friendly creditors that they had property which was liable to be reached by execution, and leaving such creditors to act as they thought proper upon that information. On the contrary they expi’essly admit that they consulted together and agz’eed to procure an execution to be issued against them, for the puz-pose of having their four watches and establishments sold thereon; and they employed an agent to procure the execution to be issued accordingly. Not satisfied with this interference in causing the execution to be issued to the sheriff of New-York, through the medium of their attorney and agent who then assumed to act as the agent of the plaintiffs in the execution also, they were guilty of a direct and palpable violation of the injunction by taking the watches of themselves and their wives and delivering them to the sheriff at his office; because they probably supposed he would not come to their houses to take the watches from them. In the original answer of Robinson to an inquiry before the master, he admitted that he delivered both of his watches as well as his wife’s silver tea spoons, to the sheriff. But in his answer to the interrogatories in this case he shows that he had been guilty of another breach of the injunction, by pledging one of the watches for $30, previous to the issuing of the execution. And he expressly admitted, on both of his examinations, that the two watches were in his possession or under his control at the time the injunction was served upon him.

Each defendant therefore must be declared guilty of having violated the injunction ; and a fine must be imposed upon each, sufficient to cover the value of the property which he has voluntarily dispossessed himself of, in violation of the injunction, and his share of the costs of this proceeding. The only evidence of the value of the watches is the examinations of the defendants themselves before the master who appointed the receiver. Eaton there says, that one of his watches, with the chain, cost about $150, and the other about $100. The fine upon him, exclusive of his share of the costs which must be taxed and added thereto in drawing up the order, will bo $250. Robinson’s estimate of the cost of his two watches, with the chains and key, is about $214,50; to which is to be added the value of the spoons, estimated by him at $7,50. These two sums, together with his share of the costs, will constitute the amount of the fine to be imposed upon Robinson. The order and mittimus must be so drawn as to specify how much of the fine is for the property thus taken and sold, and how much for the costs and expenses of the complainants upon these proceedings ; and that the first be paid to the receiver, to abide the further order of the court, and the last to the complainants’ solicitor, to satisfy such costs and expenses.

The fact that the defendants acted under the erroneous advice of counsel, to whom they applied for information how they could elude the justice of this court and at the same time avoid punishment for a breach of the injunction, cannot protect them from a fine sufficient to compensate the adverse parties for the injuries they have sustained by the wrongful acts complained of; though it may furnish a ground to justify the court in refusing to inflict a further punishment upon the offenders, for a violation of its order. Where there has been an actual violation of the injunction, either with or without the advice of counsel, the court has no discretion to impose a mere nominal fine; as the statute is imperative that the fine shall be sufficient to indemnify the complainants for the injury they have sustained thereby, and to satisfy their costs and expenses. (2 R. S. 538, § 21.) Neither is there any way in which the defendant in such a case can be discharged from imprisonment, without the consent of the prosecutor, until the fine is actually paid. Counsel, therefore, should be very cautious how they advise their clients to do any act which may be adjudged by the court to be a contempt; and which may perhaps subject the client to perpetual imprisonment if he should be unable to pay the fine which the law compels the court to impose upon him in such cases.

As to the contempt of these defendants, of which the receiver complains, I have not been furnished with the necessary papers to enable me to dispose of the case ; as I do not find, among the papers furnished, the order requiring the defendants to deliver over their property, or the interrogatories to which Eaton put in his answers before the master. The affidavits on which the attachments were founded must also be produced, to enable me to judge what is the precise charge intended to be made against the defendants by the receiver. The decision upon that application must therefore be suspended until those papers are furnished.


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    Laflin & Field vs. Relyea.
    An execution against the goods and chattels and real estate of a party, against whom the judgment in a court of record has been obtained, which execution is in the form prescribed by the twenty-fourth section of the title of the revised statutes relative to executions and the duties of officers thereon, is sufficient to authorize the sheriff to sell any chattels real of the defendant which are bound by the lien of the judgment.
    January 15.
    This was an application for the appointment of a receiver upon a creditor’s bill. On the part of the defendant it was insisted that the complainants had not exhausted their remedy at law; as the form of the execution which had been issued, as stated in the bill, did not authorize the sheriff to sell the chattels real of the defendant.

      Ira Harris, for the complainants.

      J. Holmes, jun., for the defendant.
   The Chancellor.

The execution which was issued against the defendant, as stated in the complainants’ bill, was in the form contemplated by the legislature when it was intended to reach the real as well as the personal estate of the judgment debtor. The second section of the title of the revised statutes relative to executions, and the duties of officers thereon, (2 R. S. 363,) which was relied on by the defendant’s counsel on the argument, does not profess to give the form of the execution to be issued on judgments in courts of record. But the 24th section of that title directs what shall be the form of the execution to authorize the sale of rea) estate. It must command the sheriff to make the amount of the judgment of the goods and chattels, of the judgment debtor, and, if sufficient goods and chattels cannot be found, that he cause the amount due to be made of the real estate of which such debtor was seized at the time of docketing the judgment, or at any time afterwards. (2 R. S. 367.) If the term real estate, as used by the legislature in this section of the revised statutes, was intended to embrace chattels real, on which, by a previous section, the judgment is declared to be a lien as well as upon freehold estates, then the execution in its terms was calculated to reach every part of the property, both real and personal, of the defendant, which was liable to be sold to satisfy the judgment. And the legal effect of the execution so far as this case is concerned was probably the same, if chattels real were not embraced in the term real estate as used in the last clause of the execution ; which clause was intended to cover real estate aliened after the docketing of the judgment. The word chattels, as used in the previous clause, in its legal sense includes chattels real as well as chattels personal. (1 Toml. Law Dict. Art. Chattels.) And it was by the use of this word alone that chattels real were reached on a common law execution. It could not have been the intention of the legislature to require the issuing of several executions to reach all the property of the judgment debtor which was liable to be sold on execution in the same county. And the legislature having declared that the judgment should be a lien upon chattels real, as well as on freehold interests in real estate, from the time of docketing the judgment, and that the same should be subject to sale on the execution, the form of the execution as prescribed in the 24th section of the title before referred to must be construed to embrace all such chattel interests, either within the first or the second clause thereof. The sheriff therefore, upon such an execution as was issued in this case, was author zed to sell all property of the defendant which was liable to be sold under any execution which could have been issued upon the judgment. And his return, that the defendant had no goods or chattels lands or tenements whereof he could levy the debt and costs due to the complainants, is the legal evidence of the fact that the remedy of the complainants at law was exhausted before the filing of this bill.

Order for the appointment of a receiver, in the usual form.


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    Denison vs. Bassford and others.
    The answer of the defendant must he actually signed by him, although an answer on oath is waived, unless a special order of the court has been ob. tained allowing him to put in his answer without signing the same.
    Where an answer was put in without the defendant's signature, it was ordered to be taken off the files for irregularity; and as there was no suggestion that there was any defence to the suit, the answer having evidently been put in for mere delay, it was made a part of the order that the complainant’s bill be taken as confessed for want of an answer.
    If the complainant waives an answer on oath, he cannot apply to have the answer taken off the files on the ground that the defendant knows it to be wholly untrue. His only remedy in such a case is, at the hearing, to ask to have the defendant charged personally with the costs to which he has improperly subjected the complainant by such false pleading.
    January 15.
    This was an application to take the answer of the defendants Bassford and wife off of the files of the court for irregularity. The bill was filed to foreclose a mortgage; and an answer on oath was waived. The defendant Bass-ford put in an answer for himself and wife, by his solicitor ; but which answer was not signed by the defendants. The answer alleged that the mortgage was usurious. But the mortgagor, from whom the defendant Bassford purchased the premises subject to the payment of the mortgage, swore that this allegation in the answer was entirely false; and that the mortgage was given for the balance of the consideration which he the mortgagor agreed to pay upon the purchase of the premises by him.

      J. Rhoades, for the complainant.
    S. Stevens, for the defendants.
   The Chancellor.

As the complainant had the power to compel the defendant to swear to the truth of his answer, I cannot order the answer to be taken off the files merely on the ground that the defendant has set up matters of defence which he knew to be false ; or which he had no reason to believe were true. The remedy for such an abuse of his privilege of answering is* at the hearing, to charge him personally with the costs to which he has subjected the complainant by his false pleading. But in such a case, if the defendant has made a technical slip, the court will not give him the benefit of his false answer by delaying the decision of the cause to which there is no valid defence.

By the 200th rule it is declared that the proceedings in this court, where no provision is made therefor by statute or by the rules, shall be according to the customary practice as it has heretofore existed. That rule was first adopted on the first of January, 1830, the day when the revised statutes went into operation. To ascertain whether a signature to an answer is required, we must ascertain what the practice of the court is previous to that time. By the settled practice of the court of chancery in England, the answer of the defendant must be signed by him, unless an order has been obtained to take it without signature. (2 Daniel’s Ch. Pr. 269. Bayley v. De Walkers, 10 Ves. 441.) Such order appears to be necessary even where both parties consent, by their solicitors, that the answer may be put in without the signature of the defendant. And to obtain such an order where the defendant is abroad, the court requires his written consent, or the evidence of a power from the defendant to his attorney, or solicitor, to put in an answer for him. (18 Ves. 468. 1 Newl. Ch. Pr. 3 Lond. ed. 181.) The practice of requiring an order, founded upon evidence of authority to appear for the defendant, even where the complainant consented that the answer should be taken without oath or signature, was sanctioned by Chancellor Kent in the case of Dumond v. Magee, in this court. (2 John. Ch. R. 240. See also 1 Hoff. Pr. 229.) And the putting in of an answer for a defendant, without oath or signature, by a person who appeared as her solicitor, was considered as irregular by several members of the court for the correction of errors, in the case of Rogers v. Cruger, (7 John. Rep. 558.)

It is said by counsel that no injury can result to the complainant by permitting the defendant to put in his answer by his solicitor, without the formality of his own signature, where1 an answer on oath is not required. I am inclined to think, however, that there are many persons, and perhaps this defendant is one of them, who would think it perfectly justifiable to put a mere formal untruth upon the record, by attorney, to delay the collection of a debt, who would not be willing to risk their reputations for veracity by deliberately adding their own signatures to an answer which they knew to be false ; although they were.not required to verify it in such a manner as to subject themselves to punishment for perjury. And the practice of the court being such as I have before stated, it certainly would not be wise to change it for the purpose of enabling the solicitor to put in an answer to which the defendant was not willing to add his signature. Whenever a case occurs in. which it is proper to dispense with this formality to further the cause of justice, as to enable an absent defendant tó avail himself of a valid and conscientious defence, the court upon a special application, with the consent of or upon due notice to the adverse party, can make such an order in that particular case as justice requires.

The answer in this case was irregular, and it must be taken off the files, with costs. And as the defendant has not ventured to make an affidavit that he believed the answer to be true, it was undoubtedly put in for delay merely. There must, therefore, be an order to take the bill as confessed ; as in the case of New-York Chemical Company v. Flowers, (6 Paige's Rep. 654.)


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    Van Hook and others vs. Whitlock and others.
    Where an incorporated insurance company, whose stockholders were by its charter made liable for its debts to the extent of their several shares in its capital stock upon a dissolution of the company, made an assignment of all its property and effects, under the act of April 1814, relative to insolvency of incorporated insurance companies; Held, that admissions made by the assignees as to the existence of a debt against the corporation were not evidence against the stockholders to prove that such a debt was due at the time of the assignment, in a subsequent suit against the stockholders to charge them individually with the debts of the corporation ; Held also, that a discharge of the stockholders from personal liability for the debts of the corporation, under the provisions of that act, was inoperative and void as to creditors whose debts arose upon contracts made previous to the passage of the act, and who had not acquiesced in the validity of the discharge by accepting from the assignees their shares or dividends of the proceeds of the assigned property.
    It seems that a suit against the stockholders of a corporation to charge them individually for its debts upon a dissolution of the company, being a suit founded solely upon a statutory liability, was barred at the expiration of three years after the right of action accrued, under the provision relative to suits upon statutes contained in the 6th section of the limitation act of April, 1801.
    Where an insolvent act discharges the debtor from all further li&oility for the payment of his debts, upon his making an assignment of his property to trustees for the benefit of his creditors and complying with all the other provisions of the act, a creditor who makes himself a party to those proceedings by coming in and taking a dividend of the assigned property from the assignees, cannot object to the validity of the discharge as to his debt oil the ground that it was contracted out of the state, or before the passage of the insolvent act under which the debtor was discharged from liability.
    Under an answer in chancery alleging that the complainant’s right to sue did not accrue at any time within six years before the filing of his bill, the defendant may insist upon the benefit of a statute of limitations requiring the complainant to bring his suit within three years after his right of action accrued.
    In pleading a statute of limitations inbar of a suit it is not necessary in terms to refer to the statute which creates the bar. But it will be sufficient for the defendant to state the necessary facts to bring the case within the operation of the statute, and then to insist that by reason of the existence of those facts the complainant’s right or remedy is at an end.
    Where from the complainant’s bill it appears that he has not brought his suit within the time limited by law for that purpose, the defendant may avail himself of the objection by demurrer, or by insisting upon the benefit of the statute in his answer.

      January 15.
    This was an appeal by the complainants from a decree of the vice chancellor of the first circuit dismissing their bill. The object of the bill was to charge the defendants personally, as stockholders of an insolvent insurance company, with the debts of the corporation, under a clause in its charter making them personally liable to the creditors to the extent of their several shares in the capital stock of the corporation at the time of its dissolution. The facts, so far as they are disclosed in the bill, appear in the report of the decision upon the pleas of three of the defendants; which pleas were overruled by the court. (3 Paige's Rep. 410.) Those defendants afterwards put in an answer, in which, among other things, they denied all knowledge of the existence of the debts of the several ■ complainants as stated in the bill, or that any claims in favor of the complainants were admitted, liquidated, or adjusted, by any authorized agent or officer of the company. But the defendants admitted that, after the assignment of the corporate funds and the discharge of the corporation and the stockholders, under the act of April, 1814, relative to the insolvency of incorporated insurance companies, the assignees admitted and adjusted the several claims of the complainants, and then paid out of the assigned fund the several dividends upon the amount of the claims thus admitted and adjusted, as stated in the bill. And the defendants therefore insisted, in their answer, that if they, as stockholders of the company, wrere in any way liable for the claims of the complainants at the time of the assignment, or at any time previous thereto, the acceptance of such dividends under the assignment had precluded the complainants from insisting upon the unconstitutionality of the insolvent law in reference to their claims upon the corporation and the stockholders. The defendants also alleged in their answer that the complainants’ rights, or causes of action or suit against them, did not accrue at any time within six years before the filing of the bill in this cause, and that the defendants had not made any promise or done any thing to render themselves liable within that time; deny-. ing also the existence of any disability which would prevent the operation of the statute of limitations upon the complainants’ claims. Those defendants therefore, in their answer, insisted on the several statutes for the limitation of actions, and each and every of them, as a full and perfect bar to this suit; and claimed and prayed the protection and benefit thereof as fully and effectually as if the same had been, in due form, specially pleaded. The other defendants put in answers containing the same defence in these respects, in substance, but differing in some particulars in form. Replications were filed to the answers; and the cause was referred to the vice chancellor, and was heard upon the pleadings and proofs. He decided that, under the act of 1813 for the limitation of actions at law, the complainants were bound to bring their suit within three years after the dissolution of the corporation, in January, 1820, to charge the stockholders individually under the act incorporating the company. And that the defence was sufficiently set up in the answers to entitle the defendants to the benefit thereof at the hearing:. Upon this ground, therefore, and without expressing any opinion upon the other objections to the complainants’ right of recovery, which were made by the defendants’*'counsel upon the argument, he decreed a dismissal of the bill. And from that decree the complainants appealed to the chancellor.

      R. Sedgwick & D. D Field, for the appellants.
    As the answer of the defendants sets up the statute of limitations containing a bar of six years, the defendants cannot avail themselves of the statute creating a bar of three years. The defence of the statute, in so far as it concerns the corporation, is not well pleaded; the defendants should have stated that the corporation did not promise at any time within six years before the eleventh of January, A. D. 1820. The answer that they did not promise within six years before the filing of the bill, is nought, and that they did not promise since the fifteenth of July, A. D. 1814, is bad, inasmuch as it is sufficient, if they promised since January eleventh, A. D. 1814. There could have been no bar as to the corporation, because the act incorporating the company makes the policies specialties, or what is equivalent thereto. Besides, some of the debts were, then in judgment, and all were acknowleged within, six years, before January eleventh, A. D. 1820. The 6th section of the limitation act of 1801, does not apply to this suit. That section relates to grievances and wrongs, and not to contracts. If that section was applicable, the payment of the dividends within three years, as proved would prevent the bar. The complainants are not precluded by the discharge of the corporation, or the payment of dividends. (14 Wend. 100. 3 Cowen, 159.) There must be a decree against the defendants ordering them to pay the debts of complainants rateably," according to the amount of stock held by them.

      J. Anthon & G. Griffin, for the respondents.
    The admissions of the assignees of the company are not binding on the stockholders. The 6th section of the act of limitations of April, 1801, is applicable, as this is a suit upon a statutory liability. The right of action was barred, because the suit was not commenced within three years after the right of action accrued. And under the allegation in the answer that the complainants’ right of action did not accrue within six years previous to the filing of the bill, the defendants may insist upon the' benefit of a statute of limitations requiring the suit to be brought within three years after the right of action accrued. (1 Mason, 259. 4 John. Ch. Rep. 130. 3 Paige’s R. 422. Hopkins, 305. 8 Cowen, 390. Slee v. Bloom, 2 Durn. & East, 160. 1 Salk. 30. Com. Big. tit. Statutes, a 1.) The complainants, having accepted a dividend from the assignees of the corporation, cannot object to the validity of the discharge of the corporation as to their entire debt, (1 Nott & McCord, 480. 1 Bay, 435. 3 Story’s Com. 256. 3 Cowen, 164. 17 John. 85. 3 Peters, 411, 2 Kent’s Com. 616, 2d ed. Paley on Agency, 165.)
   The Chancellor.

I am inclined to think there was a failure of proof on the part of the complainants, as to the existence of the demands of some of them against the corporation for the purposes of this suit. To entitle them to recover against these defendants as stockholders they must show, by proof which is valid and binding upon the defendants, that they had a legal demand, upon which they could have succeeded in sustaining a suit against the corporation previous to its dissolution in 1820. Even if the complainants did not now attempt to repudiate the assignment and the discharge of the corporation and its stockholders, under the insolvent act of 1814 as unconstitutional and void against them, the admissions or acts of the assignees would not be legal evidence of the existence of the debt against the corporation. So far as related to the fund in their hands the assignees had a perfect authority to settle and adjust all claims against the corporation. But as their admissions or adjustments of claims were for the mere purpose of ascertaining who were entitled to distributive shares of that fund, and as the assignees were not the agents of the corporation or of its stockholders, their admission of a claim and the payment of a dividend thereon would not have enabled the claimant to recover against the corporation for the balance, without other evidence that his claim was a legal or equitable debt of the corporation. It is not necessary for me, however, to go into an examination of the details of the evidence as to the existence of the several debts against the corporation previous to July, 1814, or to decide the question whether the failure of one of the complainants to prove his debt would authorize a dismissal of the bill as to all. For I am satisfied there are other objections which are fatal to the right claimed by each and all of the complainants to a decree in this suit.

The debts claimed to have been due from the corporation are all stated to have been contracted previous to the passage of the act of April, 1814, authorizing the discharge of insolvent insurance companies and their stockholders from liability for their debts upon making an assignment of the corporate effects for the benefit of the creditors. As the creditors therefore had a contingent claim against the stockholders for the payment of their debts, in case of a dissolution of the company, as well as a direct claim upon the corporate property, the act of 1814 is inoperative as to them, according to the settled law of the land, unless they have done some act recognizing the validity of the law under which such discharge was authorized. But the counsel for the respondents upon the argument of this appeal endeavored to show, and I think they succeeded in doing so, that by coming in under the proceedings and taking their shares of the dividends from the assignees, the appellants have deprived themselves of the power to object to the constitutionality of the assignment of the corporate property under the order of the chancellor, which is declared to be a discharge of the defendants under the act. The revised statutes of this state recognize the principle that a creditor, whose debt would not otherwise be barred by a discharge under the insolvent act in consequence of the prohibition in the constitution of the United States, will lose his remedy against the future acquisitions of the insolvent by accepting a dividend of his estate from the assignees. (2 R. S. 22, § 30.) And as I understand the case of Clay v. Smith, (3 Peters’ Rep. 411,) the supreme court of the United States there decided that the acceptance of a dividend, under the insolvent law of Louisiana, by a creditor whose debt would not have been otherwise discharged, on account of his extra territorial immunity from the operation of the insolvent laws of that state which were in force when the debt was contracted, deprived him of the right to object to the constitutionality of the law. It is true that case is very imperfectly reported, so that it is difficult to understand the precise facts upon which the decision was founded. It is evident, however, that it must have been a case in which the constitution of the United States would have protected the creditor from the operation of the state law if he had not assented to it, by coming in and taking a dividend of the insolvent’s estate from the assignees under the proceedings in the cessio honorum. And so Mr. Justice Story appears to understand this decision of the court of which he was a distinguished member ; for in his commentaries on the constitution, (3 Story’s Corn. 256,) after stating the several cases in which the contract of the creditor will be exempt from the operation of state insolvent laws discharging the debtor from further liability, he says: “ Still, however, if a creditor voluntarily makes himself a party to the proceedings under an insolvent law of a state which discharges the contract, and accepts a dividend declared under such law, he will be bound by his own act, and will be deemed to have abandoned his extra territorial immunity.” And he refers to the case of Clay v. Smith, to support this principle. Judge Cheeves also, in reference to a provision in the insolvent law of South Carolina adopting the same principle, says, there can be no doubt as to the validity of that provision in the statute ; that its effect is no greater than that of a private deed or composition; and that its obligation arises in the same way, from the voluntary consent and agreement of the creditor.

Again; I am inclined to the opinion that the vice chancellor’s decision was right as to the question upon which he based his decree. When this case was formerly before me the counsel for the defendants had overlooked the provision in the sixth section of the act of limitations of April, 1801, (1 R. L. of 1813, p. 187,) relative to suits upon statutes. And it was therefore supposed that if the six years limitation did not apply to such suits there was no time limited for the commencement of such a suit at law. But the form of the defence set up at that time did not call for any expression of opinion on that question ; as the decision must have been the same as to the invalidity of the pleas, whether the limitation of the corresponding suit at law, by an action of debt upon the statute, was three years or twenty. And the pleas could not perform the office of a demurrer, or of an objection in the answer in the nature of a demurrer, that it appeared upon the face of the bill that the remedy of the complainants was gone by lapse of time. (Billing v. Flight, 1 Mad. Rep. 230. Cowen v. Price, 1 Bibb’s Rep. 175.) The provision of the statute upon which the decision of the vice chancellor was founded is as follows: “ And that all actions or informations which shall at any time hereafter be brought, sued, or exhibited for any forfeiture, or cause, upon any statute made or to be made, the benefit and suit whereof is or shall be given or limited to the party aggrieved, shall be brought, sued, or exhibited, within the space of three years next after the offence committed or to be committed, or cause of action accrued, and not after.” The other provisions of this section were originally taken from the fifth section of 31st Elizabeth, chapter 5th, in the revised act of February, 1788, for the limitation of criminal prosecutions and of actions and suits at law, (2 Greenl. Laws, 93;) where the provision in question was first adopted in this state. No corresponding provision appears to have existed in any statute, either here or in England, previous to that time. And it is a somewhat remarkable fact that, although this provision has existed in our statute books for fifty years, no case appears to have arisen in which any court has been called on to give it a construction in reference to the limitation of actions of debt founded upon a statute liability only. The appellants’ counsel insist that as it relates to suits whereof the benefit is given to the party aggrieved it must be confined to actions for penalties or forfeitures, or to suits upon statutes which are penal in their nature. But the words of the law are as applicable to the case of the creditors of a corporation who are aggrieved by the dissolution of the company, leaving its debts unpaid, as they are to a party aggrieved by an act of the defendant which is prohibited by statute, or by his omission to do some act or duty required of him by statute, and for which he is subjected to an action for a penalty or forfeiture for the benefit of such party. And the language adopted by the legislature shows that the provision was intended to apply to actions upon statutes for other causes than for penalties and forfeitures. There was a class of actions upon statutes which were not reached by any of the provisions of the acts previously in force for the limitation of suits at law ; among which were all actions of debt founded upon a statute liability only, not embraced in the 5th section of the statute of Elizabeth. And when the revisers, and the legislature of 1788, were framing a general limitation law, is it not more reasonable to suppose that in introducing this new provision they intended to embrace all cases of that class, when they use language that is sufficiently broad to produce that effect, than to presume they meant to confine it to a part of that class; especially where no reasons existed for fixing a limitation to some actions of that class only and not as to the others. It is very doubtful, however, whether by this provision they intended tó include any of that class of actions which were founded partly upon the common law and partly on a statutory provision which was not in the nature of a forfeiture; and which class of actions were already provided for in the previous sections of the revised act of 1788.

I have no doubt whatever upon the question that if this case is within that clause of the act, the answer is sufficient to enable defendants to avail themselves of that defence at the hearing. In the case of Bogardus v. The Trinity Church, (4 Paige's Rep. 178,) this court decided that even in the case of a technical plea it was not necessary to refer to the statute creating the bar. But that it was sufficient to state the facts necessary to bring the case within the operation of the statute, and then to insist that by reason of those facts the complainants right or remedy was at an end. The defendants in that case pleaded an entry under color and claim of title in 1705, and an adverse possession from that time down to the filing of the bill; more than one hundred and twenty-five years afterwards. And that was held sufficient, although it was not stated in the plea that an adverse possession for that length of time must necessarily include the shorter period of twenty years limited by law for bringing a possessory action for the recovery of the lands and the rents and profits thereof. In the present case the allegation in the answer that the complainants’ right of action, if any, had not accrued within six years, necessarily covered the shorter period of three years limited by this clause of the sixth section of the statute. And the subsequent claim, in the answer, of the benefit of every limitation act of the state, was sufficient notice to the complainants that the defendants would, upon the hearing, claim the benefit of this public law as a defence to the suit; as the laws of the state are in legal contemplation known to all.

Besides; the fact that the complainants’ right of action or suit accrued in January, 1820, and of course more than nine years before the commencement of the suit, appeared upon the bill itself. No process of subpoena can be issued, in this court, until the bill is filed. (2 R. S. 179.) And the time of filing of the bill is endorsed thereon, and becomes part of the record of which the court judicially takes notice, upon a demurrer to the bill. The intention to insist upon the several statutes of limitations as a defence may, therefore, be considered as an objection in the answer in the nature of a demurrer. And it is now settled that where it appears from the bill itself that the complainant has not brought his suit within the time allowed by law for that purpose, the defendant, in this court, may avail himself of the objection by demurrer. (See Humbert v. Trinity Church, ante, 195; Tyson v. Pole, 3 Young Coll. 266.)

The decree of the vice chancellor dismissing the complainants’ bill is therefore affirmed with costs. The decree of affirmance is to be entered nunc pro tunc as of the time of the commencement of the first argument on the appeal; some of the parties having died subsequent to that time.


text:
    Clark vs. Hall.
    Where a bill is filed by the vendee against the vendor for a specific performance of a contract of sale of real estate, it is proper for the court, in the decree against the defendant for a specific performance, to give the necessary directions to compel the complainant to perform the contract on his part.
    A decree cannot be varied in substance on petition, without a rehearing. But it may corrected or amended on motion, or petition, as to mere clerical errors, or by the insertion of any provision or direction which would' have been inserted as a matter of course if the same had been asked for at the hearing, as a necessary or proper clause to carry into effect the decision of the court. And where the further direction asked for is merely consequential upon the decree itself, the proper course is to supply the omission by a distinct order without altering the decree.
    A vendor of real estate has a lien upon the same for the unpaid purchase money. And when a decree is made for a specific performance of a con. tract of sale, the court will, if the vendor asks for it, direct a provision to be inserted in the decree, that if the vendee refuses to accept the conveyance and pay the purchase money the premises may be sold by a master, for the purpose of raising such purchase money; and that if the proceeds of the sale are insufficient to pay the amount due, the vendee shall pay the deficiency. Or the court may decree that if the vendee does not pay the purchase money, within such time as shall be directed by the court, ho shall he foreclosed or hatred of his right to a specific performance of the contract.
    This was an appeal from an order of the vice chancellor of the eighth circuit. In December, 1834, the defendant contracted with the complainant to sell him a lot of land in the city of Buffalo for $8300; of which purchase money $200 was paid down, and $1875 was to be paid on the 20th of the same month. At which time the defendant was to execute and deliver a deed for the premises, and to receive from the complainant a bond and mortgage for $6225, the residue of the purchase money, payable in three equal annual payments, with interest annually. The defendant having neglected or refused to complete the agreement, although the complainant had taken possession of the premises under the same, the bill in this cause was filed for a specific performance. And in June, 1836, a decree was made whereby it was adjuged and declared that the agreement between the parties was valid, and that the complainant was entitled to a specific performance thereof. It was therefore referred to a master to compute the amount which had then become due to the defendant on account of the purchase money. And it was decreed, that upon the payment by the complainant of the amount reported due the defendant should forthwith deliver to the complainant a deed of the premises in conformity with the agreement; and that the complainant should thereupon execute and deliver his bond and mortgage for the residue of the purchase money which had not then become due according to the terms of the agreement; the form and manner of execution of the deed and bond and mortgage to be settled by the master, if the parties could not agree as to the same; and that the defendant pay the costs of the suit. On the 5th of July, 1836, the master reported that there had then become due upon the agreement $4669,42, and that the parties had agreed as to the form and manner of executing the deed and bond and mortgage. Nothing was then done by either party under the decree until November, 1836, when the defendant appealed from the same; which appeal was dismissed in February., 1838, with costs, on the appellant’s own application. The defendant having paid the costs upon the appeal, applied to the vice chancellor for an order that the complainant accept his deed and pay the whole purchase money, which had then become due, or that the bill might be dismissed; and that the complainant account for the rents and profits of the premises which he had received since he went into possession, or for such other order as might be proper upon the facts stated in his petition. And upon the hearing of the parties, the vice chancellor made an order of reference to ascertain the amount of the purchase money which had become due since the date of the former report, and that the complainant, within six weeks after the confirmation of that report, should pay the purchase money due according to the two reports, with interest, deducting therefrom his taxed bill of costs, and should accept of a deed of the premises according to the agreement; and that in default of such payment, his bill be dismissed; and in that case, that the complainant should account to the defendant for the rents and profits of the premises. The decision of the vice chancellor was founded exclusively on the case of Codwise v. Gelskin, (10 John. Rep. 508,) in the court for the correction of errors. From this order, the complainant appealed.

      January 28.

      S. Stevens, for the appellant.

      A. Taber, for the respondent.
   The Chancellor.

I have no doubt as to the power of the vice chancellor in this case to give the necessary directions to compel the complainant, on his part, to perform the agreement for the specific performance of which he had obtained a decree. A decree cannot be varied in substance on petition, without a rehearing. But it may be corrected or amended on motion or petition, as to mere clerical errors; or by the insertion of any provision or direction which would have been inserted as a matter of course, if asked for at the hearing, as a necessary or proper clause to carry into effect the decision of the court. And where the further direction asked for is merely consequential upon the decree itself, the proper course is to supply the omission by a distinct order without altering the decree.

I am inclined to think, however, that the vice chancellor has not given the proper relief which ought to have been given in this case ; but probably that was owing to the neglect of the complainant’s counsel to object to the form of the relief which the defendant had stated specifically in his petition. If any such objection was made, the proper relief should have been given, under general prayer that the petitioner might have such relief as he was entitled to upon the facts of the case. This decree is in substance a decree for the specific performance of the agreement by both parties. But as it probably was not contemplated, at the time of making the decree, that the complainant might thereafter refuse to pay the purchase money and accept the deed to which he was entitled under the decree, the directions consequent on such a refusal were not then added to the other directions contained in the decree.

The vendor has a lien upon the premises sold for the unpaid purchase money. And where there is a decree for a specific performance, if the vendee will not accept the conveyance and pay the purchase money the premises may be sold for the purpose of raising such purchase money; and if the amount produced is not sufficient to pay what is due, with the costs of sale, the vendee may be ordered to pay the balance. And if there is a surplus it will be paid to him. Yet it is not a matter of course to direct a sale, unless the vendor asks for it; as the court may make a decree, as in the case of a strict foreclosure, where the case is a proper one for such a decree, that if the vendee does not pay the purchase money, within such time as may be limited for that purpose by the court, he shall be barred and foreclosed of his right to claim a specific performance after-wards. The objection to the form of this order is, that it directs the bill to be dismissed, after a decree had been made thereon to pay the complainant’s costs ; and still retains the suit in court for the purpose of giving to the defendant an account of the rents and profits of the premises while the complainant was in the possession thereof. The bill should not have been dismissed. But the order should either have directed a sale of the premises and that the defendant unite in the conveyance to the purchaser, for the purpose of raising the purchase money and the costs of the sale, with a further direction that the complainant should pay the deficiency, if any, arising out of such sale ; or, instead of dismissing the bill, the complainant’s right to a specific performance should have been declared to be barred, if he did not accept the conveyance and pay the purchase money within the time prescribed by the order of the court; and that in that event he should also deliver up the possession of the premises to the defendant and account to him for the rents and profits thereof. The appellant, therefore, may have the order modified in either of these ways, if he thinks proper to do so, at any time within twenty days after the pronouncing of this decision ; otherwise the order is to be affirmed as it now is. And in either case he must pay the costs of the respondent on this appeal; as it does not appear that he made any objection to the form of the order, before the vice chancellor.