text:
    Sutphen vs. Fowler.
    In a suit for the specfic performance of a contract for the conveyance of land brought by the vendee against the heir at law of the vendor, where it i appeared that the vendor had died insolvent and indebted to the vendee; ' Held, that the vendee was entitled to have such debt offset against a balance due for the purchase money.
    The court of chancery may decree the specific performance of a contract for the sale of lands lying in another state, where the party who is to make the conveyance is within the jurisdiction of the court, and has been served with process.
    And where the defendant in such a suit is an infant, the proper decree is that he convey the legal title to the premises when he arrives at the I proper age to enable him to do so, according to the laws of the state where the property is situated; and that in the meantime the vendee be permitted to receive and retain the possession of the property.
    Where an infant heir, against whom a specific performance is asked, has derived no property except that which he is decreed to convey, from the person from whom the premises have descended, the costs of the guardian ad litem of the infant must be paid by the complainant.
    So where an infant trustee is required to transfer the legal title, under an order of the court of chancery, the cestui que trust must pay the necessary expense of the proceedings to obtain such transfer.
    August 23,
    The bill in this cause was filed against the infant child and heir of Coenrad Fowler, deceased, for the specific performance of a contract for the sale and conveyance of lands in the state of Michigan. In May, 1836, the decedent entered into a written agreement to sell and convey to the complainant, the eighth of a section of land in the state of Michigan, for the consideration or price of $250 ; of which sum $200 was paid down. The residue of the consideration was to be paid on the first of January thereafter ; upon payment of which the decedent was to convey the premises to the complainant, with warranty. The decedent, at the same tizne, received from the complainant the further sum of fifty dollars for the purpose of buying or locating forty acres of land adjoining the other eighty acres, in the name and for the benefit of the complainant. But a few months after the receipt of this money, and the making of the contract of sale, C. Fowler died, without having conveyed the premises to the complainant, and without applying the fifty dollars to the object for which it was received. He left the defendant, then an infant about three years of age, his only heir at law 5 which infant, then and at the time of filing the bill in this cause, was a resident of this state. And the decedent being entitled to a conveyance of the legal title to the premises, at the time of his death, such title was subsequently conveyed to the defendant in fee, as such heir at law, by the person who then held the same. The complainant thereupon filed his hill for a specific performance; and to have the $50, which was in the hands of the decedent at the time of his death, offset or applied to the extinguishment of the residue of the purchase money due on the contract. The infant put in a general answer by her general guardian ; and upon a reference to ascertain the truth of the allegations set forth in the complainant’s bill, the master reported them as above stated. The cause was submitted upon the pleadings and master’s report.

      L. Sherwood, for the complainant.

      M. W. Brown, guardian ad litem for defendant.
   The Chancellor.

The complainant is clearly entitled to a decree for a specific performance. And as the personal estate of the decedent is not sufficient to pay the debts, it is proper that the $50 received by him for another purpose, and not applied as intended, should be set off or applied in satisfaction of the same amount which remained due on this contract. The only difficulty, therefore, in making a perfect title to the premises, to the complainant, immediately, arises from the fact that the heir at law is an infant, and that the lands to be affected by the decree are not within the jurisdiction of the court. But it is perfectly well settled that this court has jurisdiction to decree the specific performance of a contract for the sale of lands in another state, where the person of the defendant is within the reach of its process. (The Earl of Arglasse v. Muschamp, 1 Vern. Rep. 77, 135. Farley v. Shippen, Wythe’s Rep. 135. Massie v. Watts, 6 Cranch's Rep. 148. Penn v. Lord Baltimore, 1 Ves. sen. 444.)

In this case the heir at law is not only within the jurisdiction of the court but she appears to be domiciled here. If she was of age, therefore, there would be no difficulty in compelling a specific performance of the contract; by a decree directing her to give such a conveyance of the premises as would be effectual to transfer the legal title to the complainant according to the lex loci rei sitee. Considering the age of the defendant, a decree by the court of chancery of the state of Michigan, where the land is situated, would perhaps have been more beneficial to the complainant; as this court cannot sequester the property, or putl him in possession thereof by its process. But the court j may decree a specific performance of the contract, and! direct a conveyance by the infant when she arrives at the proper age to enable her to transfer the legal title according to the laws of Michigan ; and may authorize him toy take and to retain the possession of the premises, until that time, if he can obtain possession thereof without suit. In the meantime the court may grant a perpetual injunction, restraining the defendant from disturbing the complainant in such possession ; or from doing any act whereby the. title shall be transferred to any other person, or in any way impaired or incumbered.

The complainant is entitled to a decree accordingly. But the bill shows there is no property which has come to the infant, whereby she ought to be charged personally upon the contract of her father or subjected to costs, and as she holds the premises in question as a mere trustee for the complainant, the costs of the guardian ad litem of the. defendant must, of necessity, be borne by the complainant. In this respect it is like the case of an infant trustee, who is called upon to convey, under the statute ; in which case the cestui que trust must pay the necessary expenses of the proceedings. (Ex parte Pearse) Turn, & Russ. Rep. 325.)


source: Caselaw Access Project

author: The Chancellok.

license: Public Domain

text:
    Searing and others vs. Searing.
    Where debts are due to the wife at the time of her marriage, they belong to her, in case she survives her husband, although lie may have brought a suit for such debts in their joint names, and recovered a judgment therefor; if the money had not been actually collected by him in his life time.
    But where the husband receives a debt which was duo to the wife at the time of her marriage, or novates the debt by taking a new security for the same, in his own name, Ills wife’s right of survivorship is at an end; and the new security taken by the husband belongs to his personal representatives.
    Where it is necessary to bring a suit for the recovery of money in the name of the husband and wife jointly during coverture, the cause of action sur. vives to the wife for her own benefit, if the husband dies first.
    And it seems that where the husband takes a new security, in the name of his wife, for a debt due to her at the time of the marriage, it is not such a reducing of the debt into possession by him as to deprive his wife of the right to such new security by survivorship.
    If a security is given to the wife during coverture, the husband may sue upon the contract in his own name, or he may bring a suit thereon in the names of himself and wife jointly, at his election.
    Where the husband permitted his wife to receive monies due to her before coverture, and to re-loan them upon securities in her own name, and also agreed, upon her joining in a conveyance of his real estate so as to release her inchoate right of dower therein, that, a certain portion of the proceeds of the sale might be received and loaned by her upon securities in her own name, which was done accordingly; Held, that the securities thus taken belonged to the wife, who survived him ; and that she was not bound to account for them as the administratrix of her deceased husband.
    August 23.
    This was an appeal from the sentence or decree of the surrogate of the county of Saratoga, upon the settlement of the account of the respondent as administratrix of the estate of Richard Searing, her deceased husband. And the only matter in dispute between the parties related to certain debts, for which she held securities in her own name at the death of the decedent; which debts the appellants, as the decedent’s next of kin, claimed as belonging to his estate. These debts the respondent claimed as belonging to her in her own right, as the survivor of her husband. The debts were contracted and the securities taken therefor under the following circumstances i

    At the time of the marriage of the respondent to her late husband, about $2200 was due to her in the state of Vermont, the proceeds of the sale of her real estate there. The monies thus due to her, the husband permitted her to receive and to re-loan upon new securities, in her own name, and to re-invest the same from time to time; except certain portions of the money which she applied in payment of his debts. In 1835, when the decedent was about to sell his farm in which she had an inchoate right of dower, she declined executing the deed, and relinquishing her interest in the farm, unless a certain portion of the purchase money was appropriated for her use. He thereupon agreed that $2000 of the proceeds of the sale should be set apart for her use, and should be deposited in the savings bank, in her name ; which was done accordingly. And this sum, he also permitted her to draw out from time to time and to loan upon securities in her own name, and to retain the possession of the securities thus taken for her own benefit. The securities taken in her name for the monies thus loaned, which were in her possession at the time of the death of her husband, and which he had never claimed or attempted to reduce to possession in his life time, the surrogate decided belonged to her in her own right; and that she was not accountable therefor, to the next of ldn, as a part of the estate of the decedent.

      William Hay, for the appellants.
    The securities mentioned in the surrogate’s return, as taken by the respondent in her own name, and claimed by her in her own right as survivor of her husband, were part of the decedent’s legal estate. The proceeds of her Vermont property, belonged, by virtue of her marriage, to her husband, who had reduced such proceeds to his actual possession. The same may be said of the |2000, part of the purchase money of her husband’s farm allotted to her ; the agreement in relation to which, between her and her husband, was at law nugatory. But if not, as soon as she received the money, it became her husband’s property. And his right to it, followed it through all its changes. The notes given to the respondent, for this money, were his property. (2 Cowen) 599. 7 John Ch. Cas. 244.) The surrogate is confined to the distribution of property as legal assets; he can not disregard statutory preferences and divide the assets equally among the creditors of every class. He had no power to enforce the equitable claims of the respondent, if she had any. Chancery alone has jurisdiction of such claims. (4 Paige, 64. 6 Id. 366.) Neither can a surrogate carry into execution, specifically, a post nuptial agreement entered into between a husband and wife. His court is a court of law ; a court of peculiar and special jurisdiction. He has no equitable powers.

      W. L. F. Warren, for the respondent.
    The $2000, part of the sale price of the farm was, in equity, the separate property of Mrs. Searing. The agreement by which it was set apart to her use was founded on a good consideration. A post nuptial agreement between husband and wife, where the consideration was a relinquishment of her dower and the property wras set apart to her use, has been decided in this court to be binding on the husband. (Garlick v. Strong, 5 Paige’s Rep. 440.) This is a stronger case than the One cited. In addition to the relinquishment of her dower, her separate property from Vermont entered partly into the consideration. The notes and obligations taken for the $2000 do not alter the property. They wére taken in the name of Mrs. Searing with her husband’s assent and held by her—showing a clear intent on his part, that they should be considered her separate estate. He never reduced them to his actual possession in the sense required by Chancellor Kent, in Schuyler v. Hoyle, (5 John. Ch. Cas. 209.) The intention of the decedent to make them his own property must be strong. (Idem, 211. 2 Kent’s Com. 137. 10 Wend. 337. 15 Id. 168.) The result of these cases show that the $2000 survived to Mrs. Searing. The surrogate had jurisdiction over the equitable claim of Mrs. Searing to the $2000. It is true his powers are created by statute. (2 R. S. 220.) This statute authorises him to settle the accounts of executors and administrators ; also to administer justice in all matters relating to the affairs of deceased persons according to the provisions of the statutes of this state. Unless the surrogate has power to adjust equitable claims of this description, in many cases he could not settle the accounts of administra-, tors. His jurisdiction must embrace equitable as well as legal claims ; otherwise he would be limited to a particular accounting as to items strictly legal. This court has decided that the surrogate’s powers extend to equitable claims, (5 Paige’s Rep. 135. 6 Id. 520, 21. 7 Id. 115, 591. 4 John. Ch. Cas. 410.)
   The Chancellok.

It is not material in this case to inquire whether the claim of the respondent to-the debts in controversy was a legal right, or one which was purely equitable. For in either case the result must be the same when she is called upon to account before the surrogate. (Gardner v. Gardner, 7 Paige’s Rep. 112. Jumel v. Jumel, Id. 591.) As to the debts due to the respondent at the time of her marriage, there does not appear to have been any agreement between her and her husband that she-should have the exclusive right to the same, notwithstanding her coverture ; so as to deprive him of his marital rights over the same as a part of her personal estate. The question, therefore, whether they belong to her by right of survivorship, or are a part of his personal property to be distributed according to the statute, turns upon the point whether the husband can be considered as having reduced the debts to his possession, as he had the undoubted right to do, in his lifetime.

Debts due to the wife at the time of her marriage belong to her if she survives her husband ; even where he has brought a suit and recovered a judgment in their joint names, if the money has not been actually collected. On the contrary, if the husband receives the amount of the debt, or novates such debt by taking a new security for the same in his own name, as he has a right to do if he thinks proper, the wife’s right of survivorship is gone ; and the new or substituted security for the debt belongs to his personal representatives. In the first case the suit for the recovery of the money must be brought in the name of the husband and wife jointly ; and where that is the case, if she survives the cause of action also survives to her for her benefit. But in the case of a new security taken in the name of the husband only, the right of the wife is entirely extinguished ; and the suit thereon must be brought in the name of the husband, or in that of his personal representative in case of his death. In the case of a new security taken in the name of the wife, after marriage, there appears to have been some doubt whether the suit should be brought by the husband and wife jointly, so as to give the cause of action to the wife in case she survived her husband, or in the name of the husband only. The better opinion, however, appears to be that the taking of a new security in the name of the wife is not an absolute reducing of the debt to possession, so as to deprive her of the right to the same in case of survivorship ; but that the husband, during his life, may bring a suit thereon in his own name or in the joint names of himself and wife at his election. Thus in Hilliard and wife v. Hambridge, (Alleyn’s Rep. 36.) in a suit upon a promise made to the husband and wife to pay an annuity to her during the coverture, it Was objected in arrest of judgment, that as the promise wras made after the marriage, the suit should have been brought by the husband alone. But the court of king’s bench held that the husband might elect to bring a suit in his own name upon the promise, or in the name of himself and wife jointly. So in Brashford v. Buckingham and wife, upon a writ of error in the exchequer chambers, (Cro. Car. 77,) where a judgment had been recovered in a suit by the husband and wife, upon a promise to the wife after coverture, founded on a meritorious consideration proceeding from her, it was held that the suit was well brought in the names of both ; and that such an action would survive to the wife. (See also Prat and wife v. Taylor, Cro. Eliz. 61; Fountain v. Smith, 2 Siderf. Rep. 128; and Brett v. Cumberland, 3 Bulst. Rep. 163.) And in the more recent cases of Philliskirk v. Pluckwell, (2 Maule & Selw. Rep. 393,) the court of king’s bench decided that a joint action in the name of the husband and wife might be brought upon a promissory note made payable to the wife during coverture. Dampier J. in that case refers to the decision in Day v. Pargrave, in Trinity Term, 14 Geo. 2, where Chief Justice Lee said that in case a bond was given to the wife during coverture, no action would lie for it by the wife solely; but that the husband and wife might have a joint action thereon during their lives, or the husband might bring an action in his own name during coverture ; yet if he did not, it survived to the wife. And the husband in that case having outlived his wife, it wras held that a suit upon the bond was well brought by him, as the administrator of the wife ; for it would have survived to her if she had outlived her husband.

The case of Nash v. Nash, (2 Mad. Rep. 133,) decided by Sir Thomas Plumer, as vice chancellor, appears to be directly in point to sustain the claim of the respondent in the case now under consideration. There the father gave to his daughter, a feme covert, a check upon his bankers for ¿£10,000, which she presented, and took from them a promissory note for the amount, payable to herself upon demand. She afterwards delivered the note to her husband, who received ¿6100 in part payment from the bankers and gave receipts therefor. Upon the residue of the note he continued to receive the interest during his life, but died without having received the remaining ¿69000 of the principal due thereon, leaving his wife surviving. In this state of things a question arose and was discussed before the vice chancellor, between the wife and the husband’s next of kin, whether the amount remaining due upon the note at the time of his death survived to her or belonged to his personal estate. And his honor decided that the note was a chose in action, which the husband had not reduced into his actual possession by the collection of the money thereon ; or by bringing a suit in his own name during coverture, and that the wife as survivor was therefore entitled to the monies due thereon, for her own use.

The execution of the deed for the Stewart farm by the wife constituted a valid consideration for the part of the purchase money which was agreed to be set apart and invested for her separate use, so as to make it the duty of a court of equity to protect that interest, even against the marital claims of the husband to the money deposited in the savings bank for her separate use, in case he had attempted to reduce it to possession in violation of his agreement. (Garlick v. Strong, 3 Paige's Rep. 440.) The meritorious consideration, then, of all the securities standing in her name, at the death of the husband, proceeded from her. And it is evident, from the facts stated in the return of the surrogate, that the husband never attempted to reduce these securities to possession or to deprive her of the benefit thereof during his life ; but, on the contrary, that he elected to treat them as her property. She is therefore entitled to them, by survivorship, at law as well as in equity.

The sentence and decree of the surrogate is, for these reasons, affirmed with costs.


author: The Chancellor.

text:
    McGown vs. Sandford and others.
    The sheriff, or the master, who is directed to sell property under a judgment, or a decree, to pay the debt due to the plaintiff, should expose it for sale at such a time, and under such circumstances, as to cause it to bring the best price, without injury to the party entitled to the proceeds of the sale by delaying the payment of his debt.
    Where a master in chancery, in violation of his duty, is proceeding to sell property Under a decree at an improper time, and when such sale will necessarily produce a sacrifice of the property, as daring the raging of a pcs. tilence, or when there is a threatened invasion, which would deter bidders from attending the sale to bid upon the property, the court under whose decree the sale is to be made may stay the salo. But the court has no legal right to interfere, for the relief of a particular individual, by arbitrarily suspending the ordinary operation of the laws for the collection of debts, to meet his particular case.
    The fact that the value of property was depressed in consequence of the general derangement of the finances, and affidavits of the defendants and others of their belief that the politics and finances of the country would he settled by the congress which was then in session, so as to greatly increase the value of property, were held to be insufficient to justify the court in ordering a suspension of the sale of mortgaged premises, under a decree of foreclosure.
    August 23.
    This was an appeal 'by the complainant from an order of the vice chancellor of the first circuit postponing the sale of mortgaged premises, under a decree of foreclosure, from the 24th of June, 1841, to the first of January, 1842. The bill was filed to foreclose a mortgage for $26,000, given by the defendant Hall to E. Sandford, payable in July, 1838, and assigned by the latter to the complainant. The proceedings to foreclose were commenced in October, 1839; but some of the defendants who had guaranteed the payment of the debt, having put in answers which required the taking of testimony, the complainant was unable to bring the cause to hearing until January, 1841; when a decree of foreclosure was directed by the assistant vice chancellor, before whom the cause was heard and decided. And at the request of the mortgagor, who represented that the month of February would not be a favorable time to sell, owing to the unsettled state of the politics and finances of the country, the complainant’s solicitor consented that the property should not be advertised for sale until about the middle of June. A few days previous to the time appointed for the sale, Hall, the mortgagor, presented a petition to the vice chancellor before whom the bill was filed, stating, among other things, that the summer season was an unfavorable time to sell real estate, and that to force a sale of the mortgaged premises in this case during ike present unsettled state of the politics and finances of ike country, would not only wantonly sacrifice the property, but would materially injure if not ruin the parties interested in a favorable sale. He therefore prayed that the master might be directed to postpone the sale for eight months. And the vice chancellor, upon hearing the parties, made the order appealed from by the complainant.

      C. W. Van Vooi'kisy for the appellant.

      H. F. Clark, for the respondent C. H. Hall.
   The Chancellor.

It is the duty of the officer entrusted with the sale of property, under a judgment or decree for the payment of a debt, to put it up for sale at such a time and under such circumstances as to make it bring the best price ; without injuring the party entitled to the proceeds of the sale by delaying the payment of his debt. And where a master, in violation of his duty, is proceeding to sell property under a decree in chancery at an improper time, when such sale must necessarily sacrifice the property, as during the raging of a pestilence, or while there is a threatened invasion, which will destroy all chance of fair competition by deterring bidders from attending the sale, it will unquestionably be the duty as well as the right of this court to interfere. But the court of chancery has no legal right to interfere for the relief of an individual by arbitrarily suspending the ordinary operation of the laws for the collection of debts to meet his particular case. And in the case under consideration, I see nothing to authorize this court to deprive the complainant of her money for six or eight months longer, which would not make it equally the duty of the court to prohibit the collection of any other debt, for the same length of time, where the complainant can only obtain his money by a sale of real estate under a decree of this court. This lady has already been kept out of her money for more than two years, since she was entitled to the same by the agreement of the defendant. And for aught that appears here, she may be ruined by having her own property sacrificed byr a forced sale upon execution, if she is deprived of the amount due to her for six months longer, in the vain expectation that an extra session of congress will settle the politics and finances of the country so effectually as to greatly increase the value of the property of this mortgagor.

In the case of Astor v. Romayne and others, (1 John. Ch. Rep. 310,) one of my learned predecessors decided that the actual existence of a war, where there was no immediate danger of an invasion of the place where property was advertised to be sold, formed no sufficient ground for suspending the sale of mortgaged premises under a decree. And no one who recollects that gloomy period in our national history, September and October, 1814, can. suppose that the finances or even the politics of the country are more unsettled at this time than they were then. The suggestion in the petition that the month of June was an improper time to sell real estate of this description, in the city of New-York, is fully rebutted by the affidavits which were read in opposition to the application. It is also contradicted by the fact, sworn to by the complainant’s solicitor, that the respondent himself fixed upon the middle of June asa more favorable time for the sale of the property than the month of February. It appears, from the amount reported due, that even the interest on the appellant’s mortgage has not been paid for the last two years j and yet the order appealed from suspends the power of the complainant to collect either principal or interest for more than six months longer, without even requiring the applicant to pay sufficient interest to furnish the complainant with the means of living in the meantime. I cannot resist the conclusion, therefore, that the order appealed from not only violates a sound principle of equity as well as of law, that the creditor is entitled to his money when it becomes due and payable according to the terms of the contract of the debtor, but that great injustice and injury will probably result to the appellant if this order is permitted to stand. The order of the vice chancellor must therefore be reversed with costs; and the master must proceed to sell the property on the usual notice of three weeks. As the costs of opposing the motion before the vice chancellor and the costs of advertising and preparing for the former sale have already been paid, there is no necessity of providing for those costs here, except to direct that the appellant be entitled to retain those costs notwithstanding the reversal of the order appealed from.


text:
    Hart vs. Philips and others.
    Where a defendant pleads a former decree, or another suit pending for the same cause, or other matter of record in the samo court, and obtains the report of a master that the plea is true, as provided by the 48th rule of the court of chancery, he cannot obtain an order, upon motion, to dismiss the complainant’s bill; but he must bring the cause on to be heard, upon the plea and the master’s report, to enable the court to decide upon the validity of the plea.
    September 6.
    This was an application to dismiss the complainant’s bill for want of prosecution. The defendant Philips, in whose behalf the application was made, had pleaded the pendency of a former suit, and had obtained the master’s report thereon ; but neither party had set down the cause for hearing upon the plea and master’s report.

      J. Rhoades, for the defendant Philips.

      Eben. Clark, for the complainant.
   The Chancellor.

The defendant is not entitled to dismiss the complainant’s bill in such a case as this for want of prosecution. Where the defendant pleads a former decree, or another suit pending for the same cause, or other matter of record in the same court, the reference to the master to enquire and report as to the truth of the plea is a mere preliminary proceeding. And when the report is in favor of the truth of the plea, no further proceedings can be had thereon by either party until the plea has been argued and disposed of in the usual form. If the defendant wishes to expedite the proceedings in the suit, or to have the bill dismissed as improperly hied, he must bring the case on to be heard upon the plea and the master’s report thereon, under the provisions of the 48th rule, to obtain the decision of the court upon the validity of his plea.

Motion denied.


text:
    Suydam and others vs. Bartle and others.
    The mere commencement of an action at law, for the recovery of a debt secured by a mortgage, if no judgment has been recovered in such action, will not prevent the filing of a bill in chancery to foreclose the mortgage, during the pendency of the action at law. But the plaintiff cannot pro. coed in his action at law, after the commencement of his foreclosure suit, without the permission of the court of chancery.
    Where the complainant files a bill of foreclosure, during the pendency of a suit at law for the recovery of the same debt from a third person who is not a party to the bill of foreclosure, and it is doubtful whether the complainant could have a decree over against such person for the deficiency, if he was a party to the foreclosure suit, and where the mortgaged premises are not sufficient for the payment of the whole debt- claimed to be due, the court will permit the complainant to proceed at law, during the pen. dcncy of the foreclosure suit, so far as is necessary to test the validity of the defence which has been set up in the action at law. But he will not be allowed to take out execution upon the judgment which may be re. covered in such action, without the further order of the court of chancery.
    September 21.
    This was an application, on the part of the complainants in a foreclosure suit in this court, for leave to proceed in an action which had previously been commenced in the supreme court against some of the defendants in this suit, and against Albert Westfall who was not made a party to the bill filed in this court. The mortgage was executed by James P. Bartle and others, and upon its face purported to have been given to secure the payment of the gross sum of $40,000, according to the condition of a bond executed by Norton, Bartle and McNeil. But it was in fact given to secure and indemnify the complainants against the payment of certain drafts drawn by the obligors in the bond, or by them and others for their benefit, and accepted by the complainants. The action at law was brought on one of those drafts, drawn by Norton, Bartle and McNeil, and by Westfall, who had set up a defence in that suit. The complainants alleged that the amount of the mortgage was not sufficient to cover the whole sum due to them for acceptances, and that it was essential to their rights as against Westfall, that they should be permitted to proceed at law; as the mortgaged premises were not worth enough to pay the amount specified in the mortgage, and the defendants in the foreclosure suit, who were personally liable upon the bond, were insolvent.

      David Greig, for the complainants.

      J. Edwards, for the defendants and for Westfall.
   The Chancellor.

The commencement of an action at law for the recovery of a debt secured by a mortgage, does not prevent the filing of a bill of foreclosure in this court unless a judgment has been obtained in that action. And the suggestion of the court in the case of Pattison v. Powers, (4 Paige’s Ref. 551,) that the action at law must be discontinued before a foreclosure suit could be commenced in this court, was incorrect. The effect of the 159th section of the title of the revised statutes relative to the court of chancery, (2 R. S. 191,) is only to deprive the plaintiff of the right to proceed, in the action at law, without the special permission of the court of chancery, where the foreclosure suit is instituted. (Williamson v. Champlin and others, 1 Clark’s Ch. Rep. 8; and S. C. 8 Paige’s Rep. 70.) The object of the legislature unquestionably was to relieve the mortgagor from the expense of a double litigation. And where it is evident that the complainant could have had a perfect remedy against all persons who were liable for the payment of the debt, by a decree over against them for the deficiency, if he had chosen to make them parties to his foreclosure suit, it might not be a proper exercise of discretion for the court of chancery to permit any further proceedings to be had in the action at law after the filing of the bill of foreclosure.

In the present case, however, the debt secured by the mortgage was but forty thousand dollars, and the amount due to the complainants upon their various acceptances considerably exceeds that sum, as stated in the petition. And it is doubtful whether there could have been a decree over against Westfall for his portion of the excess, even if he had been made a party defendant in this suit. (See 2 R. S. 191, § 160.) A defence has also been put in by West-fall to the action at law, which defence cannot be disposed of in the foreclosure suit in which he is not a party. This is”, therefore, a proper case to permit the complainants to proceed in the court of law, so far at least as shall be necessary to test the validity of the defence set up by the defendant Westfall in that suit.

An order must be entered, authorizing the complainants to proceed to trial and judgment in the action in the supreme court. But they are not to be permitted to take out execution on that judgment without the further order of this court, upon due notice of the application to West-fall, and to the other defendants in the action at law who have appeared to this bill of foreclosure. The costs of this application, and the complainants’ costs in the action at law, if they succeed in recovering a judgment against Westfall, must abide the further order of this court.


text:
    Bogert vs. Haight and others.
    Where two persons who where copartners assigned all their partnership proper, ty and effects to trustees to pay the creditors of the firm, giving preferences to certain classes of the creditors, and directed the surplus of the assigned properly to be paid to the assignors, and one of the copartners afterwards made an assignment of all his property and effects to a trustee, to be applied in the first place to the payment of his individual creditors, and the residue, if any, to be applied to the payment of such of the partnership debts as were not included in the first class of debts provided for in the previous assignment; Held, that the assignment of the copartnership ef. feels was valid as against the creditors of the firm, even if there were in. dividual creditors of the assignees at the time of making the assignment.
    An assignment of copartnership property to trustees, for the payment of all the debts of the firm, which assignment directs the surplus, if any, to bo paid over to the assignors, is not necessarily fraudulent as to individual creditors of the different members of the fi rr.
    Where an assignment is not fraudulent upon its face, a charge in the bill that the complainant is informed and beljpvcs that the assignment was made for the purpose of defrauding the creditors of the assignor, which charge is not verified by the oath of any person who has any personal knowledge of the alleged fraud, is not sufficient to entitle the complainant to an injunction against the assignees.
    This was an appeal from an order of the vice chancellor of the seventh circuit, denying an application to dissolve an injunction. The bill, as to the defendants Haight and Banning, was an ordinary creditor’s suit to obtain satisfaction of a judgment recovered against them for a copartnership debt, which the complainant had not been able to collect by execution at law. Previous to the recovery of the judgment against them Haight & Banning assigned all their joint property and partnership effects to the defendants, Spring, Bogert, and Youngs, in trust for the payment of all their joint or copartnership debts, according to certain priorities in the assignment specified. That assignment was dated the 25th of March, 1840 ; and by the last clause thereof the assignees were directed to return the surplus of the assigned property to the assignors, if there should be any surplus, after satisfying all their joint debts and liabilities. About two months after making that assignment, Haight made an assignment of all his individual property to the defendant Remer, in trust to pay all his separate debts, and after paying such debts, to apply the residue to the payment of all the joint debts of Haight & Lanning, except such debts as were to be paid and satisfied out of the avails of the partnership property assigned on the 25th of March, and included in the first class under that assignment. The bill contained a charge that both assignments were made with the intent to hinder, delay, and defraud the complainant and other creditors of the assignors. But this charge in the bill was not stated as a fact within the complainant’s own knowledge, and therefore was not sworn to ; the form of the jurat being that the matters stated in the bill to be of the complainant’s own knowledge he knew to be true. The only questions in the case, therefore, were whether the assignments were, upon their faces, fraudulent and void as to creditors of the firm who were not embraced in the first class of creditors. The assignees under the first assignment applied, upon the matter of the bill only, to dissolve an injunction, which had been granted, restraining them from selling, transferring, intermeddling with, or disposing of the assigned property or effects ; which motion the vice chancellor denied with costs. From which decision those assignees appealed.

      September 21.

      E. Van Burén <jr if. Welles, for the appellants.
    The assignment of the copartners appropriates their joint property to the payment of their joint debts. Though the balance, if any, is not by the terms of the assignment appropriated to pay individual creditors, yet it is not secured to the assignors and placed beyond the reach of such creditors i but after the trust is executed, the surplus may be reached by them. The law will apply it to the payment of the individual debts. And if the last clause in the assignment had been left out, it would not have altered its meaning or effect. For the law would have carried the surplus back to the assignors, where it would have been subject to their individual debts. Suppose the assignors had assigned their property for the payment of a portion of their debts only, it would have been g< od. (See Wakeman v. Grover, 11 Wend. 194.) If the assignment had secured to the copartners any portion of the property, which their individual creditors could not reach, there would have been great propriety in the objection to the assignment. But it is said the individual creditors are d ilayed until the trust is executed. Individual creditors may now file their hill and reach any residuary interest of the assignors that may remain after the trust is executed. So in all assignments, creditors are delayed until the trust is executed. Thecoxirt of chancery, upon a proper applica ¿on, will delay individual creditors until the partnership debts are paid. If there had been no assignment, and the individual creditors of either Haight or Banning had levied an exe sution upon their joint property, chancery, upon the applicat. on of the joint creditors, would have restrained the individual creditors until the partnership debts were paid. This; is precisely what the assignment does, and no more. 11 is said that the joint assignment delays the individual creditors of Haight & Banning. But it does not appear that .Banning owed any individual debts. Nor does it appear otherwise than by his assignment that Haight owed any individual debts; and while that proves his indebtedness, it als so proves an assignment of all his property. It is also said -that the assignment of Haight is void. This we deny. T1 ;ie assignments are distinct and separate transactions, not in ¡Aid of each other. The joint assignment was made in Marc^b, 1841, and Haight’s assignment in May subsequent. Height could not„y any ; act of his, affect the trust previouslyy created aq'vested ft, »r the benefit of his creditors; and t,'A.e ssignment of HaigA.ht, whether void or not, cannot affect or impair the joint as A signment of Haight & Banning to the appellants, and if that assignment is valid, the injunction must be dissolved.

      Bowen Whitings for the respondents.
    Conveyances and assignments made to hinder, delay, or defraud creditors of their suits, &c. are void. (2 R. S. 137, § 1.) Assignments for the benefit of assignors, when there are creditors^ are fraudulent and void. (1 Hop. Ch. Rep. 395.) What is reserved to the assignor is withheld from the creditors. Some of the provisions of an assignment may be void, and some good ; but that distinction is not made when there are creditors whose suits, &c. are ox may be hindered and delayed. When all the estate of tiie assignor is assigned, he must make provision for the oayment of all his debts, before any reservation is made for his own benefit. In Grover v. Wakeman, this princinle is dicussed and settled. Are neither of these assignme nts within these principles'? The first is of all the copartnership property. After paying partnership debts, the resi- ,ue L to be returned to the grantor. This provision is fn .udulent. It is the right of the creditor of an individual c my rfiler to sell the interest of his debtor in the copartners? -ip property, subject to the payment of the copartnership c ebts. (Mcody v. Payne, 2 John. Ch. Rep. 548.) But i,. creditor of either of these parties, or of both of them, can not proceed to a sale of their property by reason of ib,is assignment. The title of the assignees is an obstruction j and that title is in part for the benefit of the assignors a gainst separate, if not joint creditors. So far the trustees, hold for the benefit of the assignors and not to pay deb' i There are separate creditors to be defrauded as app< by the subsequent assignment. But if there were nor ¡te objection would remain. The court look to the terms i ,j the deed and not to possible facts. But if it be said tlx e complainant is a creditor of the copartnership,, and therefore cannot be injured or defrauded.- by thu provision, 1 it can be answered, that his juc’gr üent is not pi-fen cd in¡ the assignment, not being in exeijpution when the iiiflrt'-jivat was executed. Nor is the cl'Zara.cter in which he sues, wi.-nb xr as creditor of the part-partners solely or jointly, material. Any person who has an interest in the subject matter may object to the fraudulent nature of the assignment, and cause it to be avoided. The two assignments are one instrument, and designed for one purpose ; and by the second assignment from Haight to Remer, it appears there were debts due by Haight individHally. But is this objection to the joint assignment removed by the second from Haight to Remer 1 If it be as regards Haight, the objection holds good as to Banning, for he is no party to the second assignment, nor does it appear that he has executed any individual assignmentj and yet he is to receive his portion of the funds that may still remain after payment of copartnership debts. If it be said that the law would give to each copartner his share of the residue of the joint property after paying joint debts in the same manner as these debtors have provided, the answer is, that if debtors undertake to dispose of all their property to trustees, they must provide for the payment of all their debts. Creditors have a right to look for the property of their debtors in their own hands and not in the hands of trustees • and have a right to bring the process of the courts to bear upon the property and effects of debtors, without the intervention of trusts of a nature to hinder them in the collection of their debts. The second assignment from Haight to Remer is fraudulent and void. It conveys all the grantor’s property for a partial purpose. There is a class of creditors excepted out of the benefit of the trust, i. e. the execution class in the joint assignment. That excepted class are not subsequently provided for, nor can they share in the distribution of the fund, in case of a deficiency in the joint assignment to pay all the creditors there provided for. If there be a surplus, it will remain in the hands of the assignee for the benefit of the grantor. It is, therefore, an assignment for his benefit, and there being-creditors, the whole is void. The absence of a clause directing the payment of the surplus to creditors, leaves such surplus to the operation of law, which would create either a resulting trust for the benefit of the grantor, or an absolute sale and transfer to the trustees without consideration, leaving debts unpaid.
   The Chancellor.

The objection to the assignment of the joint or copartnership property which is insisted upon as rendering that assignment fraudulent and void is, that by the last clause the assignees, after paying all the copartnership debts, are to return the surplus to the assignors; without making any provision for the payment of the individual debts of the partners. A short answer to this objection is that it no where appears that either of the assignors owed any individual debts at the time the assignment, of the 25th of March, 1841, was executed. And as fraud is not to be presumed, if the existence of such individual debts would have rendered the assignment fraudulent it lies upon the complainant to establish the fraud, by establishing the fact that the assignors, or one of them, did owe debts which were not provided for in that assignment. The counsel for the respondent relies upon the recitals in the subsequent assignment, to Remer, to establish the fact of such individual indebtedness on the part of Haight. Those recitals, however, are merely the admissions of Haight; and are not evidence against these appellants, to establish the fact that an assignment made to them nearly two months previous was fraudulent. Nor are they evidence as against Haight himself; as it does not appear by the assignment to Remer that any-of l.e individual debts, therein provided for, had been contracted in March, when the copartnership property was assigned.

Again ; if the fact had distinctly appeared in the bill, that Haight & Lanning owed individual debts at the time of their assignment of their partnership property in trust to pay the debts of the firm, the clause of that assignment directing the residue of the assigned property to be paid to them, would not render the assignment fraudulent. The co-partnership effects were the primary and natural fund for the payment of the debts of the firm ; and the individual property of each member of the firm was the natural fund for the discharge of his own private debts. It was, therefore, perfectly proper for the copartners, in making an assignment of the property and effects of the firm for the purpose of. discharging their joint debts, to direct the residue of the assigned property, if there should happen to be any, to be returned to them, so that it might be divided between themselves, according to their respective equitable interests therein as copartners ; leaving each to pay his private debts out of his own individual property. Had it been stated in the bill that the partnership property was much more than sufficient to pay all the joint debts of the assignors, and that they owed large individual debts which the separate property of each was wholly insufficient to meet, there might have been some grounds for supposing that they intended to delay and hinder their individual creditors in the collection of their debts, by creating a trust which would prevent those creditors from levying upon the surplus interest of Haight & Banning in the partnership property. Those facts, however, would not have rendered the assignment fraudulent per se; but they would, if unexplained, have been sufficient to have authorized thecomtto infera fraudulent intent on the part of the assignors. The inference would have been the same, if the assignment had contained no direction to pay the residue of the proceeds of the assigned property to the assignors, after paying the joint debts ; for the law itself would have created a resulting trust in their favor as to such surplus, after the debts of the firm were all paid.

The objection which is urged against the assignment to Remer, of Haight’s individual property, is that it does not provide for the payment of all the partnership debts out of the surplus which may exist after paying the private debts of the assignor ; inasmuch as the first class of debts specified in the assignment of the 25th of March are not to be paid out of such surplus. But upon looking at the assignment of the partnership property, it is evident Haight contemplated the payment of the whole of that class of debts out of the property of the firm, and therefore considered it wholly unnecessary and useless to provide for their payment the second time, out of his individual estate. It appears from the first assignment, that the creditors w7ho were entitled to a priority of payment out of the partnership property, were those who had already obtained liens on that property, in consequence of "Iheir having levied their executions thereon prior to the assignment; except the lessor of the store, who was by law entitled to a priority over those execution creditors, for the rent due at the time of the assignment.

The allegation in the bill that both assignments were made with the fraudulent intent to delay and hinder the creditors of the assignors in the collection of their debts, is undoubtedly sufficient to call for an answer upon that point; and to authorize the complainant to establish the allegation by proof, if it is true in point of fact. And in case it is admitted by the answers of the assignors, or is proved upon the hearing, he will of course be entitled to a decree setting aside the assignments as fraudulent and void. But neither of these assignments contained any provision which was illegal, or which would necessarily have the effect to defraud creditors, and the bill not being supported by the oath of any person who pretended to have any personal knowledge of the actual fraud charged therein, the injunction, so far as it related to the assigned property, was improperly granted by the injunction master. The decision of the vice chancellor was therefore erroneous, in denying the application to dissolve the injunction,» so far as related to the appellants, and to the partnership property and effects assigned to them.

The order appealed from must be reversed with costs ; and the injunction, to that extent, must be dissolved with costs.


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    The Bank of Orleans vs. Skinner & Slason.
    Where a judgment creditor filed a bill, before a vice chancellor, against the assignees of their debtors, charging such assignees with a violation of their trust., and it did not appear by the bill that either of the defendants lived within the circuit of such vice chancellor, or that the assignment was made within that circuit, or that any of the property assigned was situated within the circuit; Held, that the vice chancellor had not jurisdiction of the case; although the judgment in favor of the complainant was entered and docketed in the circuit of such vice chancellor, and the note upon which the judgment was obtained was made payable at a bank which was also situated in that circuit.
    An injunction bill which is Sled by a corporation may be verified by the solicitor, or counsel, or other agent, without the oath of any of the regular officers of the corporation, where the person verifying the hill is better acquainted with the facts than any of such regular officers.
    Where a hill is to be verified by an agent or attorney, it should be drawn in the same manner as if it was to be verified by the complainant himself; stating the facts within the personal knowledge of the agent or attorney positively, and those which are only known to him from information of others, upon the knowledge and belief of the complainant. And the oath of the agent or attorney who verifies the hill should state that tho deponent has read the bill, or has heard it read and knows the contents thereof, and that the same is true of his own knowledge, except as to the matters which are therein stated to be on the information and belief of the complainant., and as to those matters that the deponent believes it to be true.
    Upon an ex parte application for the allowance of an injunction, if there is any material allegation, upon which the right to the injunction rests, which is not within the personal knowledge of the complainant, or of tho agent or attorney who verifies the bill, the officer to whom the application is made should require to be annexed to the bill the additional affidavit of the person from whom the information is derived verifying the truth of the information thus given.
    September 21.
    This case came before the chancellor upon an appeal, by the defendant Skinner, from an order of the vice chancellor of the third circuit denying an application to dissolve an injunction, upon the matter of the bill only ; and also upon a cross appeal by the complainants from so much of the order as denied their application for leave to amend the bill.
    The complainants had discounted a note drawn by the defendant Slason, who resided in Vermont, for the benefit and accommodation of Doane & Potter, who resided in the county of Washington. This note was endorsed by Doane & Potter, and also by Rowley & Paige ; the two last named endorsers having endorsed the note for the accommodation and benefit of the other two. In November, 1839, Doane & Potter executed a general assignment of all their property and effects to the defendant Skinner, who also resided in the county of Washington, and to Slason the other defendant, in trust, to pay all the debts of the assignors out of the proceeds of such property and effects, in the order specified in such assignment. And the bill in this cause was filed before the vice chancellor of the third circuit, to call the trustees to account, and for an injunction, and for the appointment of a receiver to take charge of the property and effects assigned. The bill charged that the defendant Skinner, who was the acting assignee, was embarrassed and irresponsible ; and that he had violated his trust in relation to the assigned property, by mixing up the proceeds thereof with his own funds and applying the same to the payment of his private debts, &c.

      B. F. Agan, for the complainants.

      Cyrus Stevens, for the defendant Skinner.
   The Chancellor.

I think the objection that the bill was not properly verified to entitle the complainants to an injunction, is well taken. Where a corporation aggregate is complainant, the bill, from the necessity of the case, must be verified by some officer or agent of the corporation. In this case the counsel for the bank, as appears from the affidavit, was better acquainted with the facts and circumstances of the case than the president and cashier, who resided in a distant part of the state and could not know any thing of the charges in the bill upon which the application for an injunction was founded. He, therefore, was a proper person to verify the bill, if he could swear to the material allegations therein as matters within his own knowledge. But his affidavit annexed to the bill is defective, in not stating what allegations in the bill are matters within his own knowledge, and what are founded upon his belief only as derived from the information of others. He states that he has read the bill and knows the contents thereof; that he has information as to all the matters stated therein ; that a number of the material and important facts stated in the bill, and the principal part thereof, he knows of his own knowledge to be true ; and that he believes all the statements in the bill are true. Such a verification leaves it to the officer or agent, who verifies the bill, to determine for himself what are the material facts charged in the bill ; without furnishing the court or the injunction mar ter with the means of knowing what charges are intended to be sworn to as matters personally known to the deponent and what are matters of information and belief merely.

Bills which are to be verified by the oath of the agent or attorney for a complainant should be drawn in the same manner as bills which are to be sworn to by the complainant himself; stating those matters which are within the personal knowledge of such agent or attorney positively. And those which he has derived from the information of others should be stated or charged upon the information and belief of the complainant. And the oath of the agent or attorney, verifying the bill, should state that the deponent has read the bill or heard it read, and knows the contents thereof, and that the same is true of his own knowledge except as to the matters which are therein stated to be on the information or belief of the complainant, and that as to those matters the deponent believes it tobe true. (1 Hoff. Pr. 79, and App. No. 20.) In the case of ex parte applications for injunctions, or ne exeats, founded upon such bills, if any material allegation or charge which is necessary to be sworn to positively, to authorize the issuing of the injunction or ne exeat, is not within the personal knowledge of the agent or attorney w'ho verifies the bill, he should, in addition to his own verification, annex to the bill an affidavit of the person from whom he derived his information-, swearing ■ that he knows such allegation, or charge to be true ; in the same manner as if the bill had been sworn.to by the complainant himself and some of the material facts to sustain the injunction depended upon information derived from others. (See Campbell v. Morrison, 7 Paige’s Rep. 157; Catlett v. McDonald, 13 Louisiana Rep. 44.) It is not necessary to inquire whether this objection to the verification of the bill has been obviated by an admission by the defendant, in his answer, of the material facts upon which the injunction rests ; as I am satisfied the other- objection is well taken, that the bill did not show a case within the jurisdiction of the vice chancellor before whom such bill was filed.

Neither of the defendants resided within the third circuit at the time of the commencement of this suit j and probably they have never resided there. Nor is it suggested that any part of the assigned property is situated within that circuit. And if the subject matter of the suit had any locality, at the time of filing the complainants’ bill, it .was not within the limits of the third circuit, so as to give the vice chancellor jurisdiction on that ground. If he has.any jurisdiction of this case, therefore, it must be upon the ground that the bill shows that the cause or matter which .authorized the commencement of this suit arose within his circuit. (2 R. S. 168, § 2, sub. 1.)

The only matters charged in the bill as having arisen or occurred in that circuit, are the recovery of a judgment at the capítol in the city of Albany, against Doane & Potter and the other endorsers upon the note discounted by the Bank of Orleans; the docketing of the judgment in the office of the clerk of the supreme court at that place ; and the filing of the execution in the same office when it was returned by the sheriff of Washington county unsatisfied. And I am unable to discover any connection bet ween these circumstances and the causes or matters which authorize the filing of this bill in equity. Had this been an ordinary creditor’s bill, to obtain satisfaction of the complainant’s debt out of the property of the defendants, after.an execution against them, had been returned unsatisfied, it would have been sufficient, to give the vice chancellor jurisdiction, if it had appeared upon the face of the bill that the judgment was recovered in his circuit, and that an execution had been issued to the sheriff of a county in that circuit and had been returned unsatisfied within the same circuit. (Varick v. Dodge, ante, p. 149.) Here, however, the statement of the recovery of a judgment against the assignors long subsequent to the assignment, and the issuing of an execution on such judgment and the return thereof unsatisfied, appears to be mere surplusage. For the complainants’ right to file this bill against the assignees, for an account and distribution of the fund according to the assignment, and to preserve the fund from being wasted or lost in the meantime, would have been the same if the corporation had not proceeded to judgment against the assignors and the other endorsers whose names appeared upon the note. The recovery of the judgment and the issuing and return of the execution, therefore, do not constitute the cause or matter in equity which is the foundation of this suit; so as to give jurisdiction of the case to the vice chancellor of the circuit in which that judgment was recovered and where such execution was issued and returned.

Nor would the proposed amendment of the bill have obviated the objection. Although the note which was the foundation of the indebtedness of Doane & Potter, was made payable at a bank in Troy, and was probably protested there for non-payment, that did not constitute the cause of filing this bill, so as to give the vice chancellor jurisdiction of the case. The note became due and payable in the month of October, 1839, and the endorsers had been charged, if ever, sometime previous to the assignment to these defendants. The foundation of this suit, therefore, was the assignment of the property of Doane & Potter to the defendants, to pay the debt for which that note was given and which had then become due and payable, and to pay the debts of the other creditors of the assignors; the acceptance of the trust by the assignees; and the alleged violation of the trust, by the defendant Skinner, by a misapplication of the funds. All of this, as I infer from the bill, must have occurred in the county of Washington, where the assignors and Skinner resided at the time the assignment was made; and where I presume they continued to reside down to the time of filing the bill in this cause. For these reasons I am satisfied that the cause cr matter of complaint upon which this suit is founded did not arise in the third circuit, so as to give the vice chancellor before whom the bill was filed jurisdiction of the case under the first subdivision of the second section of the title of the revised statutes relative to the court of chancery, (1 R. S. 168 ;) and no amendment of the bill, consistent with the probable facts of the case, can obviate this objection.

So much of the order as is appealed from by the defendant Skinner must be reversed ; and the injunction is to be dissolved with costs, as improperly issued. And the part of the order denying the application to amend, to which the cross appeal of the complainant relates, must be affirmed with costs.


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    Carpenter vs. Griffin & Spencer.
    Where the owner of a farm leased the same, with the cows and sheep then on it, to a tenant for the term of five years, at a certain annual rent, and the lease provided that cows of equal age and quality should be returned to the landlord, at the end of the term, and also the sheep ^ and a judgment creditor of the tenant, before the expiration of the term, levied his execution upon a part of the cows and sheep originally put on the farm by the landlord, and upon other cows and sheep which the tenant had purchased and put on in the place of those which had been sold ; Held, that the landlord had no legal or equitable right to restrain the creditor from selling the cows and sheep thus levied on, to satisfy his execution.
    Where cattle, or implements of husbandry, or other articles which arc not necessarily consumed in the using, arc delivered by the landlord to his tenant, to enable the latter to cultivate and improve the premises, and to be returned in property of the same kind and value at the end of the term, but not in the same property specifically, the cattle or goods thus delivered belong to the tenant, and not to the landlord, during the term ; and they may be sold by the tenant, or levied on by his creditors for the payment, of his debts.
    Sept. 21.
    This case came before the court upon the several applications of the defendants to dissolve the injunction issued in this cause, so far as the same restrained the exercise of the rights of each in respect to the property in controversy. By the answers of the defendants it appeared that Theodosius O. Fowler, in October, 1836, leased tp the defendant Spencer a farm, with the sheep then on it, and thirty cows, for the term of five years from the first of January, 1837, for the rent of $350 annually. And the lease, contained the following clause relative to the cows and sheep, which was the only provision in the lease respecting the same : “ Cows of equal age and quality to be returned at the end of the said term, and also the sheep.” On the 5th of July, 1839, Fowler sold the farm to the complainant, with all his interest in the personal property, stock, farming utensils, &c. In 1837, Spencer purchased and put upon the farm thirteen cows, in addition to those mentioned in the lease, and in 1839, seven other cows ; all of which, as stated in the answer, were purchased with his own funds. These twenty cows, together with eight of the cows mentioned in the lease, and nine others which were raised on the farm or procured with the proceeds of cows and sheep sold, were remaining on the premises in December, 1839, when they were levied on by executions in favor of the defendant Griffin against Spencer. And the hay, farming tools, and dairy utensils, of Spencer, on the farm, were also levied on by virtue of such executions. The complainant thereupon filed his bill in this cause, and procured an injunction to restrain the defendant Griffin from selling the property under his executions or removing the same from the farm ; anti to restrain Spencer from selling or disposing of the cows, hay, and dairy utensils, or any other property belonging to such farm.
    C. Stevens, for the complainant.

      R. H. Gillette for the defendants.
   The Chancellor.

Upon the hearing of this application the injunction was directed to be dissolved so far as related to the hay, farming tools, and dairy utensils; as to which there was no pretence- of claim on the part of the complainant under the lease. The only question, therefore, which remains for consideration relates to the cows;1 upon which Carpenter claims a specific lien,by virtue of the' contract which is supposed to be created by the* provisions' of the lease relative to the cows and sheep.

If the lease had contained a stipulation that the same stock put upon the farm by Fowler should be returned at the expiration of the term, there could have been no doubt as"to the complainant’s equitable right to restrain the defendant Spencer from selling or "otherwise disposing of the eight" cows which are a part of those leased to him, or' any" other cows, now on the farm,- purchased with the proceeds of the original cows which had been sold by the lessee without authority. I infer from the terms of the lease, however, that it was not contemplated by the parties to that instrument that the same cows which were leased with the farm should be returned at the end of the five years; but that the lessee should return to his landlord, at the end of the term, thirty cows of the same age, and equal in value to those -which were received at the commencement of the term. If such was the intent and meaning of the contract, I do not see how this case can be dis-' tinguished from that of Hurd v. West, (7 Cowen’s Rep. 752.) In that case the supreme court decided that where' a - certain number of sheep were hired by A. to B. at a" pound of wool a head per annum, and at the expiration of" the time limited, B. was to return to him the same- number of sheep and of as good quality, the title to the sheep did not continue - in A.; but that the lessee might dispose of the sheep'let, and return other sheep'‘of the stime valué "at the time appointed -for the fulfilment of the 'contract on his part.

In the present case the stipulation in the lease is, to return, at the end of the five years, cows of equal age and quality which necessarily excludes the idea that the identical cows put on by the landlord were to be returned to him at the expiration of the term. For those cows could not be of equal age, although they might possibly Be of equal value, with the thirty cows when they were put on to the farm in January, 1837. Contracts of this kind were very common in Scotland previous to the commencement of the present century. Lessors of real estate there, the better to enable their tenants to cultivate and carry on the farms leased to them for a term of years, were in the habit of delivering to the tenant, at the commencement of the term, grain for seed, cattle to stock the farm, and implements of husbandry; under a stipulation in the lease that the like property, in quantity and quality, should be returned by the tenant at the expiration of the lease. And the property thus let with the farm was in the language of the country called steelbow goods. (See 2 Bells’ Law Dict. art. Steelbow goods; Ersk. Inst. B. 2, tit. 6, § 12.) In relation to goods thus let with the farm, it has been held that whether they he grain which is necessarily consumed in the using, or cattle or implements of husbandry which are not usually considered as fungibles, they are the goods of the tenant, and may be attached and sold for the payment of his debts. (Trumbull v. Ker, Morrison’s Dict. of Decis. 14,777.) And Lord Stair, in speaking of contracts of mutuum, that is, the delivery of property to be restored in the same kind and quality but not in the same property specifically, says : “ I have no doubt but oxen, kine, and sheep are mutuable; as is ordinary in steelbow goods, which are delivered to the tenant of the land for the like number and kind at his removal.” (Stair’s Inst. Book 1, tit. 11, § 4.)

It is unquestionably competent for the landlord, in cases of this description, to make a contract which will secure to him an equitable lien upon the property put upon the farm for the use of the tenant, or on the proceeds thereof so far as the same can be traced and identified. The case of Butler v. Me Vicar, referred to in Bell’s Illustrations of the law of Scotland, may have been decided upon the ground of such a stipulation in the lease; though in one report of the case, the court appears to have based its decision upon the ground of a tacit hypothec of all the tenant’s property on the farm for the rent of the current year, and that the steelbow goods wrere to be considered as a part of the rent of the farm for the last year of the term, when they were to be restored. (3 Faculty Col. No. 144. 5 Bro. Sup. to Dict. of Dec. 899.) In the statement of that case by Morrison, it appears that the landlord had inserted a special stipulation in the lease that if the tenant should be distressed by legal diligence, or his means or effects in any way endangered so as to prevent him from being in a situation to perform the conditions of the lease, the landlord might seize upon the steelbow goods brevimanu, and apply the same to his own use, for extinction of all claims and demands. Under this clause of the lease, the tenant having died bankrupt, the landlord unquestionably had the right to take the goods into his possession for the security of his debt; and was therefore entitled to a preference over the pursuers who claimed as creditors of the estate of the tenant. (See Mor. Dict. of Decis. 6209.)

Without any stipulation on the subject, it is impossible to discover upon what principle the complainant, in the present case, can claim the right to the cows which have been purchased by the tenant with his own funds, or the hay and farming tools and dairy utensils on the farm, in which the landlord never had any right or interest; so as to deprive the creditor of Spencer of the right to levy on such property for the satisfaction of his debt. As to the eight cows remaining of those which were put on to the farm at the commencement of the term, and those which have been bought with the avails of cows or sheep which have since been sold by the tenant, there might have been some room for resisting the claim of the creditor to a preference, by virtue of his execution, if the term had expired before the property was levied on ; so as to have entitled the complainant to an immediate return of the cows and sheep mentioned in the lease, according to the stipulation therein contained. But applying the well established principles of law to the written contract between the landlord and his tenant, in this case, 1 am bound to decide that the legal title to the cows and sheep put on to the farm at the commencement of the term passed to the tenant, so as to give him the right to dispose of them, and to subject them to seizure and sale for his debts. By the lease the landlord has not secured to himself any legal or equitable lien upon those cows and sheep, or upon others that may be brought on to the farm by the tenant, but which shall not belong to him at the expiration of the lease. And he has only the right to compel Spencer, at the end of the term, to restore to him an equal number of cows and sheep of the same ages as those leased with the farm at the time the tenancy commenced, and of the same value.

The injunction must therefore be dissolved as to both defendants. The denial in the answer of Griffin is as. strong as the allegations in the bill, both being founded on information and belief merely.


text:
    Griffith vs. Griffith and others.
    Where issues had been framed under the act of 1838, to regulate the trial by jury and the taking of testimony in chancery, and where the verdict of the jury, upon such issues, in connection with the admissions in the pleadings, did not establish all the material facts with sufficient certainty to enable the court to decide the case upon its merits; Held, that no decree could be made in the cause until the disputed facts had been ascertained, by the verdict of a jury, upon new issues to be framed for that purpose.
    The verdict of the jury, upon issues framed under the act of 1838, is conclusive as to the fact, found by the jury, unless a new trial of the issues is granted by the court of law in which such issues were tried.
    A purchaser who is himself chargeable with notice of the equitable claim of a third person to the premises purchased, may protect his title by showing that his grantor was a bona fide purchaser without notice.
    Where the purchaser employs an attorney to examine the title to the premises which he is about to purchase, notice to the attorney of the equitable claim of a third person to such premises is constructive notice to such purchaser.
    September 21.
    This was an appeal from a decree of the assistant vice chancellor of the first circuit, dismissing the complainant’s supplemental bill, with costs, as against the defendants Nash & Keyser ; and directing the receiver to pay over to them the rents and profits of the premises in controversy between the complainant and these defendants. The facts upon which the decree of the assistant vice chancellor was based are stated in the report of the case before him. (1 Hoff. Ch. Rep. 153.)

      J. Leveridge <$f W. Silliman, for the appellant.

      J. W. Merritt <§• J. Anthon, for the respondents.
   The Chancellor.

This case came before the court below upon the pleadings, and upon the verdict of a jury upon the issues framed under the act of April, 1838, to regulate the trial by jury and the taking of testimony in chancery. While that act was in force no testimony could be taken in suits in this court, except by the consent of parties, where issues of fact suitable for the determination of a jury could be framed upon the material points in the case. And where the issues framed under that act, and the verdict of the jury, in connection with the matters admitted in the pleadings between the parties, do not establish all the material facts with sufficient certainty to enable the court to decide the case upon its merits, no decree can be made until such disputed facts are all ascertained by the verdict of a jury, upon new issues.

The assistant vice chancellor was unquestionably right in supposing that the original bill, if it was seen by Wheaton, the counsel of Nash & Keyser, in his examination. of the title upon their purchase, was not of itself sufficient to apprise him and his clients that the complainant had any claim upon the two lots in controversy with these respondents. To have made such a bill constructive notice to a purchaser from the defendant therein, it would have been necessary to allege therein that these particular lots, or that all the real estate of the defendant in the city of New-York, had been purchased and paid for, either wholly or in part, with the funds of the infant complainant. Or some other charge of a similar nature should have been inserted in the bill, to enable purchasers by an examination of the bill itself to see that the complainant claimed the right to, or some equitable interest in, or lien on, the premises. If the jury, therefore, had merely found that the counsel of the defendants had notice of the filing of the bill against Griffith, at the time of their purchase, it clearly would not have been sufficient to put them upon inquiry whether any claim was intended to be made to these lots. But the charge in the supplemental bill is, that before that purchase further proceedings had been had in that suit, by a petition and an order to appoint a receiver of these lots, as property purchased by the defendant with the funds and property of the infant complainant, and that Wheaton was well acquainted with those proceedings. And the jury have found that before the purchase of the respondents, Wheaton, their attorney and counsel, was informed not only of the filing of the original bill but also that these two lots were the subject of litigation in chancery. If so, this was certainly good constructive notice of the complainant’s claim, and sufficient to put Wheaton and his clients upon inquiry as to the validity of that claim, before they completed their purchase. And if they purchased or paid their money and took the conveyance after such notice, they are not entitled to claim protection, against the previous equitable rights of the complainants, as bona fide purchasers without notice. Such I understand from the report to have been the opinion of the assistant vice chancellor, upon the finding of the jury on that issue ; the correctness of which finding this court has not the power to inquire into, under the act of April 1838, which required the issues to be framed. (Laws of 1838, p. 244, § 3.)

His Honor, however, based his decision, in favor of the respondents, upon the ground that Henderson, from whom they purchased, was a previous bona fide purchaser without notice. The answer of the respondents, I think, was sufficient to set up this defence of a bona fide purchase by their grantor. It is well settled that a' defendant who is himself chargeable with actual or constructive notice of the complainant’s equitable claim, at the time of his own purchase of the premises, may nevertheless protect his title by showing that his grantor was a bona fide purchaser without notice. And as it would be impossible for him," in a sworn answer, to state as a fact within his own knowledge that his grantor had no actual or constructive notice of the complainant’s claim at the time of the purchase, he must, from the necessity of the case, be permitted to set up that defence, either in his answer or by his plea, upon information and belief merely ; leaving the fact of such bona fide purchase to be determined afterwards, by the proofs of the parties in the cause.

Though this defence was sufficiently set up in the answer, the assistant vice chancellor appears to have overlooked the fact that an answer on oath was waived, so that the answer of the respondents was not evidence of the fact. And as no issues were framed upon this allegation in the answer, neither party has had an opportunity to produce any proofs either to sustain or to disprove that allegation. Until that is done, it is impossible for the court to say whether Henderson was or was not a bona fide purchaser for a valuable consideration and without notice. If the complainant had admitted in his bill the giving of the deed to Henderson, at the time stated, and had then failed in showing that the respondents had constructive notice of his own claim, by the notice to their attorney and counsel who was employed to examine the title when they purchased from Henderson, the cause might have been finally disposed of without inquiring as to the fact of the bona tides of Henderson’s purchase from the defendant Griffith, who had bought the premises with the money of his infant son; and who therefore held them for him by virtue of the resulting trust. But the appellant having succeeded in showing that the respondents were not entitled to protection as bona fide purchasers by virtue of their own purchase, the assistant vice chancellor, instead of making a decree in favor of either party upon the'facts settled by the verdict of the jury, should have directed further issues to be tried, for the purpose of deciding matters of fact not settled by the pleadings or by the verdict; which matters ought to have formed a part of the issues sent to the former jury to be tried.

Although the supplemental bill states that the respondents, in their petition to the vice chancellor, alleged that the defendant Griffith conveyed the premises in controversy to Henderson, by a deed bearing date about the 4th of November, 1835, I have not been able to find any admission in the bill, even by implication, that such a deed was ever executed and delivered to Henderson before the conveyance from him to Nash & Keyser. On the contrary, the supposed deed, mentioned in the petition, is throughout the supplemental bill referred to in terms which clearly indicate that the complainant did not intend to admit that any such conveyance from the defendant. Griffith to Henderson had ever been executed. For it is referred to as “ the said supposed conveyance.” And is also mentioned hypothetically, thus : “ The pretended conveyance above mentioned, if any such was made, was made for the express purpose of withdrawing the property,” &c. Or, in this form : “If he took any conveyance for the same, said conveyance was taken with full knowledge,” &c. The answer of the defendants likewise admits that the deed to Henderson was not dated on or about the 4th of November, 1835, as stated in the petition ; but that by mistake it was executed without date, although it was acknowledged by the grantor on that day. The burthen of proving the execution of such a deed was therefore cast upon the defendants, who claimed through the same. And as the giving of that conveyance, as well as the good faith with which it was executed, and the consideration of the deed, were all put in issue by the replication to the answer, the master, in framing the issues to be tried by the jury, should have presented all these questions distinctly for their consideration and decision, as matters of fact. Upon this view of the case, it would be impossible to sustain the decree appealed from, even if the fact was established that Nash & Keyser were bona fide purchasers from Henderson, without notice of the complainants’ equitable rights, either actual or constructive, by their counsel, or otherwise. For to sustain their claim to protection as bona fide purchasers, it is necessary for them to establish the fact that the legal title had actually passed from the defendant Griffith to Henderson, previous to their purchase from the latter ; so as to vest the legal title in them, by the subsequent conveyance from Henderson.

So much of the decree of the assistant vice chancellor as is appealed from must, therefore, be reversed. And further issues must be framed for the decision of the jury • to the end that when those issues shall have been disposed of, such decree may be made between the parties to this appeal as may be just, upon the facts already ascertained and upon the verdict of the jury upon the new issues.

It might perhaps be a saving of time and expense to the parties if it was in the power of the court to direct further proof to be taken in the cause, in the usual way, to determine the facts put in issue by the pleadings and not disposed of- by the former verdict. But, upon reference to the repealing act of 1839,1 find that the act, to regulate the trial by jury and the taking of testimony in chancery, as it originally passed, is still in full force as to all suits in which the court had directed an issue, under that act, previous to the 2d of May, 1839. (Laws of 1839, p. 292, § 1.) The additional issues, which should have been settled by the master under the former order, must therefore be tried in the same court in which the other issues were tried. And if either party is dissatisfied with the finding of the jury upon such issues, application must be made to that court for a new trial, or the finding of the jury will be conclusive as to the facts found, under the provisions of the act of 1838. I see no necessity for re-trying the issues which have already been passed upon by the jury ¿ and it is even doubtful whether this court has the power to direct such a re-trial,under the act last referred to. But to prevent any question which may hereafter arise as to whether the execution of the deed from Henderson to Nash & Key-set is sufficiently admitted, by the bill, to authorize this court to dispense with proof thereof, an issue may be framed upon the fact of the execution of such deed as stated in the answer of the defendants j if either party thinks proper to have such an issue, to enable the respondents to prove the deed, or to produce the same, or the record thereof, duly proved or acknowledged, on the trial before the jury. The proceedings must be remitted to the vice chancellor of the first circuit, with directions to master Codwise to frame such additional issues as may be necessary to dispose of all the questions in controversy, between the parties to this appeal, Which arise upon these pleadings and which are not already disposed of by the finding of the jury upon the former issues ; with the right to either party to except to the decision of the master if dissatisfied with the same. And when such issues shall have been settled and the master’s report thereon confirmed, they are to be tried in the same court in which the former issues were tried; and when such issues have been disposed of in that court, either party is at liberty to bring the cause to hearing before the vice chancellor of the first circuit, for a decision as to the rights of these parties, and as to the general costs in the cause upon the supplemental hill.

Both parties were equally in fault in neglecting to have all proper issues settled and referred to the jury in the first instance, and in bringing the cause on to be heard before the assistant vice chancellor in its present imperfect state, in which it was impossible to settle the question in controversy between them. Neither party, therefore, is to have costs as against the other, either upon this appeal or upon such useless hearing in the court below. All other questions of costs are reserved until the hearing, after the trial of the new issues in the cause.


author: The Chancellor,

text:
    Hyslop vs. Powers and others
    A party who is aggrieved by an erroneous decree or order of a vice chancel, lor, may appeal therefrom to the chaticellor, although he did not appear to argue the case in the court below; except where the order or decree of the vice chancellor is irregularly obtained’, so that it can be set aside on that ground, upon a proper application for that purpose.
    October
    This was an application by one of the defendants, to dismiss an appeal, from a final decree of the vice chancellor of the first circuit. The motion was founded upon an affidavit that the .appellant did not appear to argue the cause before the vice chancellor, at the time of making the decree appealed from.
    D. Marvin, for the appellant,

      J. Rhoades, for the respondent.
   The Chancellor,

said the principle upon which the court for the correction of errors refused to sustain an appeal by a party who had not appeared to argue the cause in the court below, was not applicable to this case. That the constitution had secured the right of appeal to the chancellor in all cases, where the decision of the vice chancellor or other inferior equity jurisdiction was erroneous j subject to such regulations as might be prescribed by statute or by the rules of the court. That if the vice chancellor, therefore, made an erroneous decision, upon an ex parte hearing before him, in a case in which the adverse party would not be entitled to apply to set aside the decree for irregularity, the party aggrieved by the decree was authorized to appeal to the chancellor, although he had not appeared to argue the case in the court below.

Motion denied.