text:
    The Fulton Bank vs. The New-York & Sharon Canal Company and others.
    By examining a defendant as a witness, the complainant precludes himself from having any decree against such defendant personally; and the complainant must pay costs to such defendant, although he might not have been entitled to costs if the complainant had not examined him as a witness.
    Where an officer of a corporation is necessarily made a defendant, for the purposes of discovery merely, if the complainant is compelled to pay the costs of such discovery, he may have a decree over against the other parties for such costs.
    An appeal from a final decree of a vice chancellor as to the general costs in the cause maybe made to the chancellor at any time within six months from the time of entering the decree; but an appeal to the court for the correction of errors, from a decree of the chancellor as to such costs, must be made within fifteen days after notice of the decree.
    Where the complainant files a supplemental bill for the purpose of bringing forward new matters which might have been introduced into the original bill by way of amendment, the defendant should make his objection thereto by demurrer, or by plea, or in his answer to the supplemental bill. And it is too late to make such objection, for the first time, at the hearing.
    An objection to the jurisdiction of the court on the ground that the complainant has a perfect remedy at law shoidd be made by demurrer, or in the answer of the defendant. If the objection is made in the answer, the complainant proceeds at the peril of costs if the objection is sustained at the hearing.
    The president 'of a corporation is not by virtue of his office authorized to draw checks for the monies of the corporation deposited in a bank, unless by the established usage of the place where the operations of the company are carried on, the presidents of such corporations are in the practice of drawing such checks without any special authority for that purpose.
    Where, by the negligence of the directors or agents of a corporation, the corporate funds were deposited in a bank in such a manner as to give the officers of the bank reason to suppose the deposit was made by the president of the corporation, who at the same time left his signature in the bank as that upon which the money was to be drawn out; and the officers of the bank afterwards paid out the money on his check, under a supposition that he had authority to draw for the same; Held, that the bank was not liable for the loss sustained by the corporation from the misapplication of such funds, by their president.
    The directors or trustees of a corporation, when assembled as a board, are the general agents of the corporation; and notice to them, when so assembled, is notice to their successors and to the corporation, But notice to an individual director, who has no duty to perform in relation to the subjecl matter of such notice, is not a good constructive notice to the corporation:
    Notice to tire agent of a party is legal notice to the principal, where it is the duty of such agent to act upon the notice, or to communicate the information to his principal, in the proper discharge of his trust as such agent. And this rule applies to the agents of corporations as well as others.
    Where there was a joint appeal by two defendants, and the decree was reversed as to one and affirmed as to the other, no costs were given in favor of either party on the appeal.
    July 16.
    "This was an appeal from a decree of the vice chancellor of the third circuit.. The New-York and Sharon Canal Company was incorporated, by an act of the legislature of New-York, in April, 1823,.for the purpose of maldng a canal from (he west bounds of the town of Sharon, in the state of Connecticut, to the tide waters of the Hudson, or to the city of New-York; the concerns of the company to be managed by 21 directors, who were to elect one of their number as president. In the month of May, 1823, a similar company was incorporated by the legislature of Connecticut, for the purpose of extending the canal into the town of Sharon in that state. The first directors were named in each act of incorporation, and were the same persons; and at a regular meeting of such persons, acting as directors of each company, they resolved that the stock of both companies, including the banking privileges which had been granted by the legislature of Connecticut, be considered consolidated stock, and that the coinpanies should be considered as united for all the purposes mentioned in their acts of incorporation, and jointly liable for the debts or liabilities of either. Thereupon a committee was appointed to open books of subscription, and to receive five per" cent, or five dollars on each share of the said stock which should be subscribed. On the sixth of September, 1825, an election of directors was held by the stockholders who had then become subscribers; at which election George W. Brown,Thomas Hyatt, Matthew Reed, Robert Cheesebrough, Joel Benton, Cyrus Swan, and fifteen others, were chosen directors. On the day following, a meeting of the directors was held, at which the six persons above named and eleven others were present. At that meeting, Brown was chosen president of each company; and he, together with Swan, Benton, Reed, Gheesebrough and Hyatt, were appointed, a finance committee. And the joint funds of the companies were, by a resolution of the board, placed under the control of that committee; which was also authorized to liquidate and pay the claims against the companies. The commissioners who had received subscriptions for the stock were also requested to pay over the funds in their hands to such committee, which was authorized to give receipts for the same. At a meeting of the finance committee, at the house of the president, the same evening, the commissioners paid over the money and checks in their hands, and the secretary of the companies, who was present, gave receipts therefor. A part of the funds consisted of monies received of the country subscribers, and the residue was in checks received from Brown and others, subscribers in the city of New-York. And it was then agreed that the monies of the companies, amounting to about the sum of $22,000, should be deposited in the Fulton Bank to the credit of the companies. The money was accordingly placed in the hands of Cox, the secretary, for that purpose. On the following day, Cox sent the money to the bank, either by the porter of the Tradesmen’s Bank, of which he was teller, or by some other person not now recollected by him. The money was actually deposited in the bank of the complainants, and credited to the New-York and Sharon Canal Company ; and George W. Brown was then present in the bank, and left his signature in the signature book, Geo. W. Brown, presH, as the signature to the checks on which the money was to be drawn out. Twenty thousand dollars of the money was drawn from the bank the same day, on checks signed by Brown, in that manner, and nearly all of the residue was drawn in the same way within two days thereafter. In July, 1826, Brown became insolvent; by which the whole funds of the company, so drawn by him from the bank, were lost. The companies afterwards brought a suit at law against the complainants to recover the monies thus deposited in their bank; whereupon the original bill in this cause was filed, for a perpetual injunction to restrain them from proceeding at law. And M. Reed and G W. Brown were also made defendants. The bill charged, in substance, that the money was drawn out by Brown, as president of the companies, with the' consent of the directors,"and was invested in stocks or otherWl'8e l°arie(l on interest for the benefit of the companies. The answer of the companies denied the authority of Brown to draw out the monies; but insisted, on the contrary, that the money was deposited in the bank, under an agreement of the finance committee of the companies, with Brown as a director and Cheesebrough as president of the bank, that it should be deposited in the bank, upon interest, and remain there subject only to be drawn out by the finance committee. A supplemental bill was afterwards filed, containing some further allegations in relation to matters which occurred before the filing of the original bill, to which the defendants put in an answer. Replications were filed to the answers of all the defendants, and the cause was heard on pleadings and proofs. The vice chancellor decreed a perpetual injunction against the prosecution of the suit by the canal companies against the complainants, upon their paying into court the sum of $19,59, standing to the credit of the companies upon the books of the bank, and decreed costs against the companies. He also directed the bid to be dismissed as to the defendants Reed and Brown, without costs. From this decision the defendants, except G. W. Brown, appealed to the chancellor. - -

      D. B. Ogden fy J. Hop, for the complainants.

      S. P. Staples 4" O- Lord,jm. for the appellants.
   The Chancellor.

Although there is a general prayer for relief against the defendant M. Reed, the bill shows no ground of suit against him which could entitle the complainants to a decree. Besides, they precluded themselves from having any decree against him, by examining him as a witness in the cause. (Per Ld. Eldon, 3 Dow’s Rep, 150.) And in such cases, the complainant must pay costs to the defendant examined, although' he would not have been entitled to such costs if he had not been thus examined. (Har rey v. Tebbut, 1 Jac. & Walk. 203.) In this case, Reed was made a defendant, for the purpose of discovery merely, as one of the former oncers of these canal companies. He was therefore, upon the general principles of the court in relation to bills of discovery, entitled to costs for putting in his answer; though the complainant, in such a case, may sometimes be entitled to a decree over against the corporation for the costs necessarily paid to their officer, who has been made a defendant for the sake of a discovery only. (See Waymouth v. Boyer, 1 Ves. jun 426.) The complainants in this case having prayed relief against Reed, and unnecessarily subjected him to the expense of a hearing upon pleadings and proofs, they ought to pay his whole costs, and should not be allowed to recover over against the canal companies for such unnecessary costs. Upon the hearing of this appeal, ’ I was under the impression that the statute, limiting the right to appeal from a final decree as to the general costs in a cause to fifteen days, extended to the case of an appeal from a vice chancellor to the chancellor. I find, however, upon examination of the revised statutes, that the 79th section of the title relative to writs of error and appeals, (2 R. S. 695,). applies only to appeals from the court of chancery to the court for the correction of errors. And that by a previous provision, the appellant has six months, from the time of entering any final decree of a vice chancellor, to appeal therefrom to the chancellor. (2 R. S. 178, § 59.) The decree of the vice chancellor, refusing costs to the defendant Reed, must be reversed, and the complainants must pay to him his costs of this suit to be taxed; not including, however, any costs on this appeal. But as the counsel were stopped, upon the argument of the question of costs as to the defendant Reed, under the supposition that the appeal was not in time, they may re-argue the cause as to this point, if they think proper, at any time within one month after this decision.

The supplemental bill appears to have been unnecessarily and improperly filed, as it brings forward no new matter except such as had arisen before the commencement of the suit, and which therefore should have been introduced into the original bill by way of amendment. (Stafford v. Howlett & West, 1 Paige’s Rep. 300.) But as the mode of getting the new matters before the court was a matter of form merely, the defendants, if they wished to object to the form, should have demurred to the supplemental bill, or have made the objection by plea, or in their answer, that it brought forward no new matters, except such as could have been introduced into the original bill, by amendment, in that stage of the cause. And it is too late to make such a formal objection for the first time at the hearing, with a view to have the supplemental bill dismissed.

The same answer must be given to the objection to the jurisdiction of this court, on the ground that the complainants, if the allegations in the bill are true, had a perfect and available defence at law to the suit brought against them by the canal companies. If improper and untrue allegations are inserted in a bill, for the purpose of preventing a demurrer, and to give apparent jurisdiction to a court of equity, the defendant may, by his answer, deny those allegations, and insist that as to the other matters the complainant has a remedy at law. Although such an objection, in an answer, will not save the necessity of a full discovery as to all the matters charged in the bill, it will, at the hearing, be sufficient to prevent the complainant from obtaining his relief in this court. The court of chancery is constantly burthened with the investigation of facts, upon written depositions and. at great expense, when from the face of the bill itself, or from the testimony in the case, it is perfectly evident that the complainant’s appropriate remedy was in a court of law, and not in this court. But if the defendant will not make his objection in season, he must be subjected to the extra expense of a litigation here. Where the objection is made in the answer, the complainant proceeds at the peril of costs, if that objection is sustained at the hearing. In this case there is no doubt that it would have been a perfect defence to the suit at law, if the complainants had established the fact that the money was drawn from the bank by authority of the canal companies, or that the companies had subsequently sanctioned the act, as alleged by the complainants in their bill. But as the question of jurisdiction was not raised until after the testimony had been taken in this court, the cause must now be disposed of upon the merits of the claim for which the suit at law was instituted.

The canal companies are not entitled to recover on the ground of any special agreement, made with Cheesebrough 'as president and Brown as a director of the Fulton Bank, to receive the money in deposit' and to pay interest therefor. I have no doubt, from the testimony in the cause, that such an agreement was actually made by them. Although Cheesebrough merely gave a tacit assent to the agreement made by Brown, in his name and in his presence, yet if he had been authorized as president of the bank to make such an agreement, it would have been as binding upon the complainants as if the same had been made by him personally. But it was no part of the ordinary business of banking to receive deposits of money on interest; and the president of the bank had no right to make such an agreement without some special authority from the board-of directors. Neither is there any evidence here that Cheesebrough or Brown had any such special authority, or that any custom or practice existed in the banks of New-Ytirk from which such an authority can be inferred. The only use, therefore, which the defendants are authorized to make of the agreement, is to show that the president of the bank was apprised of the fact that it was not the intention either of the directors of the canal companies, or of their finance committee, that the monies should be immediately drawn out of the bank upon the checks of Brown. And if he was aware of the intention of Brown thus to obtain possession of the funds of the canal companies, he was a participator in the fraud, and rendered himself liable, either to the bank for a violation of his duty as president, or to the canal companies in his character of director and as a member of the finance committee. He was undoubtedly aware of the fact that stock had been subscribed in his name, and that he had been elected a director and a member of the finance committee. It appears by the minutes of the proceedings of the companies that he was present at a meeting of the directors on the seventh of September, 1825, when he was appointed a member of the finance committee; and he was present at a meeting of the committee at Brown’s the same evening. And there is no pretencé that on either of those occasions he made the objection that he was not a stockholder, or that he declined servas a director and member of the committee. It is therefore too late for him to say the stock was subscribed in his name without his assent, and that he mentally declined the acceptance of the trusts which had been conferred on him by the stockholders and the board of directors. No positive act of acceptance was necessary, qther than being present at"a meeting of the directors, or of the committee, and permitting the other members to suppose he was acting with them. If he meant to decline the appointment, he should have informed them of such declension.

Without taking up time to refer at length to the testimony upon which the opinion is founded, I have arrived at the conclusion that the directors of the companies never intended to put their corporate funds under the control of Brown as president. Neither did the finance committee leave the funds in his hands, or authorize him to draw the same from the bank, either for the purposes of speculation or otherwise; but that, the money was drawn from the bank improperly and fraudulently, so far as relates to any actual or intended authority, from the companies or their authorized agents. I am also satisfied that they have done no act, subsequent to the withdrawal of the money, which can be considered as sanctioning the acts of Brown in withdrawing the money from the bank, or his subsequent misappropriation thereof. The cause must then turn upon the question whether the agents of the companies have so negligently conducted themselves in making this deposit as to justify the officers' of the bank in paying out the money on the checks of Brown, under the supposition, on their part, that he was authorized to draw for the same.

It is insisted on the part of the complainants that Brown, by virtue of his general powers as president of these companies, had a right to draw upon the bank for any funds stand- ’ ing upon their books to the credit of the companies, or of either of them. There is certainly nothing in the acts of incorporation giving the president any greater control over the property or funds of the companies than is given to any other director. He therefore was not authorized to draw checks for monies, deposited in the name of the companies, by virtue of his office of president merely; unless by the established usage of the place where the operations of the companies were to be carried on, the president, ex officio, and without any special authority, exercised that power. I do not think the evidence in this case establishes any such general usage, even as to the presidents of banks and other monied corporations. But certainly there can be no pretence that there was any such general usage in relation to the presiding officers of canal companies at the time these checks were drawn. The officers of the bank had therefore no right to presume, from the mere fact of Brown’s official station in these companies, that he was authorized to manage and control the monies deposited in the bank, to the credit of the companies.

It is proved, however, that it was the custom of the banks in New-York, upon the opening a new account on a deposit in the bank, whether by a corporation or otherwise, for the person making the deposit or who was to draw the money, to leave his signature in the signature book, and that all payments were made upon checks with such signature. In this case it is left doubtful, by the testimony, whether the money was carried to the bank by Brown, or by some other person; though the probability is it was sent by Brown. I do not think, however, it is at all material whether the money was actually carried there by him or not; as there can be no doubt that he was there at the time the deposit was made, and gave directions as to the mode in which it was to be drawn out, in such a manner as to induce the officers of the bank to suppose he had the control of the fund. And as no objection was made by the person depositing the fund, and no certificate was required showing that the money was actually deposited by Mr. Cox as the secretary of the company, the deposit, for the purpose of settling the rights of the parties in this suit, must be considered to have been made by Brown, or under his direction. If, by the negligence of those who had the fund in their possession, it has been deposited in such a manner as to give the officers of the bank reason to suppose the deposit was made by Brown in his character of president, the canal companies "must sustain the loss which has been occasioned by such negligence. The case of Dacy v. The New-York Chemical Manufacturing Company, (2 Hall's Super. Court Rep. 550,) proceeds upon the same principle, and was correctly decided. In that case the husband had entrusted his wife with the money, to be deposited in the bank, and she deposited it in her own name, without informing the bank she was a feme covert. She afterwards drew out the money upon her own checks, signed in the form agreed upon at the time of the deposit ; and it was held the husband could not recover. (See also Barrett v. Deere, 1 Mood. & Malk. Rep. 200.) If Mr. Cox had taken the precaution to require a certificate that he had deposited the money, and that it was under the direction of the finance committee, or if he had put such a memorandum on the package, or had given that information to the officers of the bank at the time the deposit was made, they would at their peril have paid it to any one not having actual authority from the finance committee, or the board of directors, to receive it. Hence it becomes necessary to inquire whether the complainants are chargeable with notice that Brown had no right to draw the money from the bank, although he left his signature in the book kept for that purpose. If the complainants are chargeable with such notice, the payments were made in their own wrong; and the canal companies are entitled to recover the monies from the bank, notwithstanding the payments to Brown; so far at least as the monies have not been actually applied to the use of those companies. There can be no actual notice to a corporation aggregate, except through its agents or officers. The directors or trustees, when assembled as a board, are the general agents, upon whom a notice may be served; and which will be binding upon their successors and the corporation. But notice to an individual director, who has no duty to perform in relation to such notice, cannot be considered a notice to the corporation. The notice which Brown and Cheesebrough had of what took place at the house of the former, on the evening of the 7th of September, was not of itself legal notice to the bank that the fund was placed under the control of the finance committee ; and that Brown, although he left his signature, and apparently had the control of the money the next morning, Was hot in fact authorised to draw it from the bank. But if Cheesebrough had been authorized by the bank, as their president and agent, to agree to receive the money on deposit, the agreement made with him, as such agent, would have been notice to the corporation; although he neglected to communicate the facts to the other officers of the bank, or to the board of directors. It is well settled that notice to an agent of a party, whose duty it is, as such agent, to act upon the notice, or to communicate the information to his principal, in the proper discharge of his trust as such agent, is legal notice to the principal. And this rule applies to the agents of corporations as well as others. From what took place on the evening of the seventh of September, Cheesebrough knew that this fund was placed under the control of the finance committee, and that Brown, as president of the canal companies, had no right to draw it out of the bank. But as there was nothing said or done at that time to excite a suspicion that Brown would attempt to practice a fraud, either upon the complainants or the canal companies, by attempting to draw the money from the bank without authority, it was not necessary for Cheesebrough to communicate that information to the tellers or other officers of the bank; unless it became his duty to act, in bis capacity of president, in relation to such deposit, from the fact of his knowing that Brown was about to withdraw the same wrongfully. It appears by the testimony, that in virtue of his office of president, he had a general superintending control over the clerks, tellers and other officers of the bank. It was his duty, therefore, to forbid their paying any check which he knew to be drawn improperly, and without authority. And if be should neglect to discharge such a duty, he would be personally liable to the institution for his improper conduct. If therefore Cheesebrough was present in the bank when the money was deposited, and knew that Brown had left his signature, as being authorized to draw out the money in ‘his own name as president, it was his duty to give notice to the tellers and clerks of the facts which had come to his knowledge the evening before, and to forbid them from paying out the money, without the concurrence of the finance committee, or the order of the directors of the canal companies. And if I was satisfied that Cheesebrough was present and knew what took place in the bank at that time, or was informed thereof previous to the actual payment of the money to Brown, I should have no hesitation in saying that-the complainants were chargeable with notice of the intended fraud, and that they were bound to pay the money a second time.

It seemed to be conceded, on the argument, by one of the counsel for the complainants, that the president of the bank was present on the morning of the 8th of September, and was aware that Brown had left, his signature as president of the canal companies, and was about to commit a fraud, upon one party or the other by abstracting the money from the bank without authority. I did not, however, understand the counsel as admitting the existence of the fact, independent of what he supposed was established by the proofs. I have therefore been- obliged to look into the depositions, to see whether there was any thing authorizing, the court to draw such a conclusion, as against his clients. Cheesebrough was examined as a witness by the adverse party, and swore that he did not see Brown leave his signature in the signature book; and that he did not recollect being in the bank when the deposit was made, or of seeing Brown there. As Cheesebrough, from what had taken place the evening before, knew that Brown had no right to draw out the money, if he was present and cognizant of what was going on the next morning, he knew Brown was committing a fraud upon the bank or the canal companies ; and this of itself would make such an impression on the mind that it could not easily have been forgotten. I must therefore conclude that Cheesebrough was not present and knowing to these transactions, or that he has committed corrupt perjury, by a wilful suppression of the truth. He also swears positively that he did not know that those - funds had been withdrawn, previous to his leaving the institution; which was more than nine months afterwards. It is true, this part ©f the deposition is contradicted by Clinch, who swears he had a conversation with Cheesebrough on the subject while he was president of the bank. But that witness may possibly have been under a mistake as to the time when this conversation happened, as he refers to no circumstance to identify the time at which it took place. It also appears, by the exhibit No. 3, that a part of the funds were drawn from the bank as late as March, 1836; and it is hardly probable the cashier would have permitted that to be done, without further inquiry, if the objection to his right to draw had arisen previous to that time. Besides', it is not sufficient for the defendants to satisfy the court that their own witness cannot be relied on upon this point. If he says he has no recollection of the existence of a fact, they must satisfy the court by other testimony that the fact does exist. The impression of Oakley, who does not appear to have any distinct recollection on the subject, is not legal evidence of the fact. Indeed, if he supposed the whole transaction to be correct at the time, and if, as he says, it was according to the ordinary practice of the bank, there is no reason why he should, after such a lapse of time, be able to recollect who was present. The counsel who conducted the examination of the witnesses on this point, appear to have been engaged in establishing a fact against the interest of their respective clients. Although the defendants have not succeeded in convincing me that there was no reason to suspect the authorized agent of the complainants was aware of the intention of Brown to draw this money from the bank without authority, the complainants, on the other hand, have not established the fact of his knowledge of the intended fraud, in such a manner as to authorize me to make a decree against them upon the ground that the money was paid to Brown after they had legal notice that he was not authorized to receive the fund, and that he was about to-commit a fraud, either upon the bank or the canal companies.

The decree of the vice chancellor, except as to the costs of Reed, must therefore be affirmed. But as this was a joint appeal, by Reed and the other defendants, and as I have not given costs in his favor, against the respondents, on the reversal of that part of the decree which relates to him, I shall not give .costs in favor of the respondents, against the other defendants, on the affirmance of the decree as to them.

       See Grandin v. Le Roy & Smith, (2 Paige’s Rep. 509;) and Rees v. Smith, (1 Hammond’s Ohio Rep. 127.)


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Whitney vs. Belden & Belden.
    Neither party can have any benefit from a decision of the court, until the order upon such decision is drawn up and perfected. And where it is material to either, party, the caption or date should be made to correspond with the time of the actual entry of the order.
    Where the party, who is entitled to draw up the order, enters it as of the time the decision of the court was pronounced, he cannot afterwards object that it was not actually entered at that time.
    If the party entitled to draw up the order, on a decision of the court, neglects to do so for twenty-four hours after the decision is pronouncedj aliy other party, interested in the entry of the order, may apply to the register or assistant register at the place where the decision was made, to draw up and enter the order, in conformity with the decision of the court.
    Where an order is special in its provisions, the party entitled to draw up the same should submit a copy thereof to the adverse party, that he may propose amendments thereto, before it is submitted to the register to be settled and entered.
    July 16.
    This was an appeal from an order of the vice chancellor of the first circuit, ordering certain amendménts to the complainants’ bill to be taken off the files of the court. The order ivas founded upon a certificate of the clerk that the decision of "the vice chancellor, allowing exceptions to the defendants’ answer, was made on the 3d of December, 1832, and that the amendments were not filed until the 22d of the same month. The order allowing the exceptions to the answer, and which was. served by the complainants’ solicitor on'the adverse party, also, purported to have been made oh the 3d 'of December. But the complainants’ counsel read ah affidavit, in opposition to the motion, stating that he ivas hot present when the "decision upon the exceptions was made, that the order founded on that decision was not in fact entered until the 7th "of December; and "that on the 17th of December, the defendants’ solicitor stipulated to allow thé complainants six days longer to amend their bill, provided they had a right to amend at the time such stipulation was given.

      R. Sedgwick, for the appellant.
    /. W. Gerard, for the defendants.
   The Chancellor.

Although the decision of the vice chancellor, upon the exceptions, was made on the 3d of December, neither party could act upon or have any benefit from that decision, until the order was drawn up and perfected. In England, if the order is of course, without any special provisions, as in this case, the register draws it up in the usual form, and after it is entered in the minutes, he signs and passes it, which completes the entry of the order; after which it may be acted on by either party. Here, the solicitor for the party obtaining the order, or in whose favor a decision is made, draws up the order, and delivers it to the register to be passed and entered, or procures it to be drawn up and passed by the register; after which the order is considered perfected, so that either party may be allowed to act upon it, or to take copies thereof. And if the party entitled to draw up the order neglects to do so, for twenty-four hours after the decision of the court is pronounced, any other party interested in having the order entered, may apply to the register or assistant register where the decision was made, to draw up and enter the order, in conformity with the decision of the court, at the expense of the party so requesting the register to draw and enter the same. If the order is special in its provisions, the party entitled to draw up the order should submit a copy thereof to the adverse party, to enable him to propose amendments thereto, if he shall think proper. The draft, and the amendments proposed, if any, are then to be delivered to the register, that the order may be settled by Mm and entered. And where the register cannot understand the decision of the court so as to be able to settle the order in conformity therewith, he is then, and m that case oMy, to apply to the court to settle the order. Where it is of any importance to either party that the true time of entering the order should appear, the date or caption of the order should be made to correspond with the time of its actual entry or allowance by the register. I infer from the . ,. , , , ° . , ' , papers m this cause that the order was either drawn up by* the solicitor for the complainants as of the time when the decision was made, or at least that he sanctioned the entry of the order as of that date by serving a copy thereof on the solicitor of the defendants; upon which copy they founded their application to take the amendments off the files of the court, as not having been made within the ten days, as required by the 45th rule. After the service of such an order, I think the complainants werenot authorized to repudiate it, by alleging it was not in fact drawn up and entered at the time when, from the caption, it purported to have been made. And they should have filed and served their amendments within ten days from the date of the order, as drawn up and served. The order of the vice chancellor directing the amendments to be taken off the files, must therefore be affirmed, with costs,


text:
    Morris and others vs. Mowatt and others.
    A creditor coming in under a decree, to prove a claim which is not set out m the pleadings or proofs In tire cause, must present the particulars of his claim to the master; and he must also support the same by his affidavit, stating that the amount claimed is justly due, and that neither he nor any other person by his order or for his use has received the amount thus claimed or any part thereof, or any security or satisfaction for the same.
    After a decree in the cause, settling the amount due to the complainants, the court refused to let them in to prove a new claim not set up in the pleadings, and which was also a stale claim of more than ten years standing.
    Whether a creditor who has filed his bill to recover specific claims against the estate of a decedent, can go before the master, under the decree, as a general creditor for another and distinct demand not set up in his bill or referred to in the decree ? Quaere.
    July 16.
    John Mowatt, junior, died in May, 1821. At the time of his death he was one of the assignees of C. Sands, a bankrupt, in conjunction with R. Morris, one of the complainants in this suit. The other complainants in this suit were afterwards appointed assignees, with R. Morris. A bill was subsequently filed in this court by the complainants, as such assignees, against J. E. Mowatt, C. Mowatt, and James Mowatt, as the executors of the said J. Mowatt, jun., to recover the balance due from him, as such assignee, to the estate of the bankrupt; and such proceedings were had in that suit, that it was referred to a master to take an account of the balance due from the estate of J. Mowatt, jun. to the complainants. The master reported that there was due to the complainants $46,358, 79, including interest up to the 13th of October, 1837, the date of the report." A decree was thereupon entered for the payment of the amount reported due, with interest and costs, out of the estate of the testator, in the hands of the defendants in that suit; and a personal decree was also made therefor against J. E. Mowatt, one of the defendants. After the decree, the complainants received between eleven and twelve thousand dollars in part satisfaction thereof. The complainants afterwards filed their bill and supplemental bill in this suit, against Charles Mowatt, James Mowatt, and the legal representatives of J. E. Mowatt, who had died intestate after making the decree, as the devisees under the will of J. Mowatt, jun. to obtain satisfaction of the balance due on the decree out of the real estate which remained in their hands as such devisees. And R. Lenox, who had a mortgage on a portion'of the estate, executed in the lifetime of J. Mowatt, jun., ThePhcenix Fire Insurance Company, who were mortgagees of C. Mowatt’s interest in the estate of his father, and certain judgment creditors of C. Mowatt and J. E. Mowatt, who had acquired liens on their real estate, were made parties defendants. It was afterwards referred to a master to ascertain and report the amount due to the complainants from the estate of J. Mowatt, jun. and the amount due to Lenox on his mortgage. The master reported a balance of $7583,33 due the complainants, and that the sum of $17,763,99, was due to Lenox on the mortgage to him. On the 6 th of November, 1833, a decretal order was made, in this cause, confirming the report of the master, and directing the sale of certain real estate of which the testator "died seized; and that out of the proceeds of the sale the master should pay to Lenox, or his solicitor, the amount due on his mortgage, and his costs, and to the solicitor of the complainant his costs, and should bring the residue into court, and report his proceedings in the premises. It was further ordered, that the master should take an account of what might be due to the several creditors of the testator, including the balance so reported due to the complainants, and the balance if any which might remain due on the mortgage of Lenox, after the application of the proceeds of the mortgaged premises towards the payment thereof. It was also ordered, that all the creditors of the testator, except the complainants and Lenox whose claims were established by the report and that decretal order, should have leave to exhibit before the master such proof as they might be advised was necessary to establish their respective claims, and that the master should give the usual notices for such creditors to come in and establish, their claims. Further directions were also given for the taking of certain other accounts, for the purpose of enabling the court to ascertain and settle equitable claims as between the several defendants, except R. Lenox. The property was afterwards sold by the master, and the proceeds, after paying the amount due to Lenox and the costs, as directed by the decree, were brought into court. And the master was proceeding to take an account of the sums dúe to the several creditors of J. Mowatt, junior, pursuant to the directions of the decretal order; when the complainants supposing that they had discovered a mistake, in the report of the master in the original suit against the executors, and that certain items of charge against the testator had been overlooked by the counsel for the complainants and the master at the time of making such report, presented their petition to the chancellor, praying that the master in taking the account, in the present suit, of what was due to the several creditors of the téstator, might examine into the merits of this new claim of the complainants, and report thereon.
    The application was opposed by James Mowatt, one of the devisees, and by certain creditors of the estate of the testator who had come in under the decree, and also by the Phoenix Fire Insurance Company, as mortgagees of the interest of C. Mowatt. And various affidavits and documents;were read in opposition to the claim.

      j}. S. Jones, for the complainants.

      jD. Selden, for himself and J. Mowatt.

      J. Rhoades, for the Phoenix Ins. Co.
   The Chancellor.

I am inclined to think that the affidavit of Morris in support of this claim is wholly insufficient to authorize the master to take cognizance of it; even if the complainants had a right, as general creditors, to come in under the decree and establish such a claim. To enable a creditor to come in under a decree to prove a claim, which is not stated or not referred to in the pleadings or proofs in the cause, he should present the particulars of his claim to the master, accompanied by his affidavit in support thereof. In this affidavit the claimant must swear, either positively or according to his information and belief, that the amount claimed is justly due, as set forth in the particular of his claim; and that neither the claimant, nor any person by his order, or, to his knowledge or belief, for his use, hath received the amount thus claimed or any part thereof, or any security or satisfaction whatsoever for the same or any part thereof. (Bennett’s Office of Master, 54, and App. 24. Brown’s Ch. Pr. 825.) The object of this affidavit is not to prove the claim; which, if contested by any person having a right to contest the same, must be supported by legal proof. But it is to guard against fictitious claims, which the parties presenting the same do not themselves believe to be founded in justice ; although they may be able to produce documentary or other evidence in support of their claims sufficient to show a prima facie case of indebtedness. As a farther guard against unjust claims of creditors coming in under a decree, the master, upon the application of any party interested in opposing such claims, may examine the claimants an oath as to their claims, or any payments or set offs which ought in equity to be allowed on account of the same. (See 105í7t Rule.) Moms, the only one of the complainants who has verified this petition, or the charge before the master, does not in terms swear that he believes the amount of this new claim is justly due from the estate of J. Mowatt, jun.; or that the amount, as reported due by the master, was less than the balance actually due from that estate. On the contrary, I should infer from the manner in which the petition and the verification of this claim is drawn, that he did not think the whole amount claimed was justly due. I allude to the sum of $1098,-73, deposited in the bank of New-York, which was received by Morris. I presume, however, he intended to represent to the master that he believed the residue of the claim was justly due; although from the manner in which the papers are drawn he has not actually sworn that he believed any thing was due beyond the amount reported by the master in the first suit. If the case turned upon this question alone, I should permit the petitioners to renew their application, upon a^ proper verification of their claim.

I am not prepared to say, however, that a creditor who has filed a bill for a specific claim against an estate, and where the usual decree has been obtained for an account, and that all the creditors be permitted to come in, can go before the master and prove another and distinct demand, not set up in the bill or referred to in the decree. In this case the complainants seek to go much further. They have filed their bill for a specific amount, as the balance due them from the estate of J. Mowatt, jun. as one of the trustees of Sands; and they have obtained a decree establishing that demand in this suit. And they now ask permission to go before the master and prove a claim for an additional sum, on the ground that the balance due from the estate of Mowatt, as claimed in their bill and established by the decree in this cause, was not the true balance, but that the amount due is in fact much larger. As the decree in the present suit has settled the balance due from the testator to the complainants, on account of monies received by him as oneof the assignees of Sands,it is impossible, consistently with the regular and ordinary practice of the court, to permit any alteration in the amount of that indebtedness, without a re-hearing of the cause, with a view to the modification of the decree. That, however, cannot be granted on this petition. But even if a re-hearing was granted, as the bill lays no foundation for this additional claim, it would be erroneous to allow the decree to be so modified as to permit the complainants to go before the master on such a claim. The remedy in such a case must be by opening the whole proceedings in the'suit, and allowing the complainants to amend their bill. But that cannot be done here, as the real estate, devised by the will, has been already sold and conveyed under the decree, and the costs have also been paid out of the fund received on such sale. Although the decree in the original, suit against the executors, may not be conclusive, as to the amount of the indebtedness, in a suit by the same complainants against the devisee^ yet if the account taken in that suit is now to be opened dr disregarded, for the purpose of correcting any errors in favor of the complainants, the defendants, in common justice, must have the same privilege of re-investigating that account, for the purpose of showing that a less sum was due. But I am satisfied that after the lapse of more than ten years, and when the only persons who could probably understand and protect the rights of the defendants are dead, it would be improper to permit these complainants to set up this new claim against the •estate, under the supposition that it had been overlooked, both by their counsel and the master, when the account was taken in the former suit.

The petition must therefore be dismissed, with costs to the parties, who have attended to oppose this application. Directing those costs to be paid out of the fund, would, in effect, be a direction that they should be paid by the parties who have successfully resisted this new claim,


text:
    B. Chase, adm’r, &c. vs. A. Barrett and others.
    Where A. B. being the owner of several farms, in 1827, entered into articles of agreement with three of his sons and his son-in-law, wherein it was agreed, that the three sons and son-in-law should work and carry on the farms owned by A. B. for the term of five years, in such manner as might • be thought by A. B. most discreet and prudent, and should put on the same all such implements of husbandry as they owned, and A.B. agreed to put on to the said farms, for the use thereof, all such teams and implements of husbandry as he owned, and it was further agreed that other teams and implements of husbandry which might be necessary should be purchased from the products of the farms, and that each of the parties should have his proper living and expenses out of such products; and A. B. also agreed that . at the expiration of the said term of five years, his said three sons and his son-in-law should have the one half of his personal property and one half of the products of the farms ; and A. B. further agreed that in case the three sons and son-in-law faithfully performed the said agreement on their part, that he would convey to them by deed in fee simple one half of all such farms; and at the time of making the agreement A. B. owned considerable personal property; and his son-in-law was then in ill health, and remained in such ill health, and unable to work, until his death, which took place a few weeks thereafter; It was held, that the articles of agreement did not constitute the parties thereto copartners, so as to entitle the representative of the son-in-láw to a share of the property ; although by the act of God it became impossible for the decedent to perform his part of the agreement.
    A person who contracts for a share of the profits of a particular trade or business, as profits, is a partner as to third persons, and is liable for the debts of the partnership.
    Whether a partnership exists, as to creditors, between a merchant and a mere servant or agent of his, who contracts with the merchant for a share of the actual profits as a reward for his services, and who is not held out to the world as a partner 1 CAusere.
    To constitute a partnership, as between the parties thereto, there must be a joint ownership of the partnership funds and an agreement, either express or implied, to participate in the profits or loss of the business.
    Where an agreement cannot be carried into effect, according to the intention of the parties, in consequence of the act of God, or something over which the parties could have no control, the utmost that a court of equity can do is to decree such an equitable arrangement as the parties would probably have provided in the agreement, if they had foreseen the probability of such an event.
    July 16.
    This was an appeal from an interlocutory decree of the vice chancellor of the eighth circuit. The cause was heard on bill and answer as to all the defendants, except Saphrona Chase, the widow of C. Chase. The facts of the case, as admitted by the answer, were as follows : In the latter part of 1827, C. Chase, the decedent, married the daughter of A. Barrett, one of the defendants, and the sister of the other defendants. In the month of April subsequent to the marriage, A. Barrett being then the owner of several farms, and extensively engaged in the farming business in which he was assisted by three of his sons, 8. S. Barrett, A. Barrett, jun. and Lucius Barrett, entered into a written agreement with his son-in-law and those three sons, as follows:
    “ Memorandum of agreement made and entered into this fifteenth day of April, one thousand eight hundred and twenty-eight, between Amos Barrett of the first part, and Chauncey Chase, Sidney 8. Barrett, Amos Barrett, jr. and Lucius Barrett, of the second part, all of Ridgeway, in the county of Orleans, witnesseth, that the said Amos Barrett, for and in consideration that the said parties of the second part will, and do faithfully work and carry on the farms of the said Amos, in the town of Ridgeway and Yates, which he, the said Amos, now owns or may purchase and put on said farms, such implements of husbandry as they may own, for the term of five years from the date hereof, in such manner as may be thought by the said Amos most discreet and prudent, doth agree to put on for the use of said farm or farms all such teams and tools and implements of husbandry as he now owns, and also let George Barrett, Stephen Barrett and Luther Barrett work and labor during the time aforesaid with' the said parties of the second part, for the mutual benefit of the parties to this agreement; and it is further agreed and expressly understood that the teams and other implements of husbandry are to be purchased, and from the products of the farms, during the time aforesaid, and each of the parties to have his or their proper-living and expenses of the products as aforesaid. And the said Amos Barrett doth agree to and with the said parties of the second part, that at the expiration of the said term the said parties of the second part shall have the one half of all the chattel property of the said Amos Barrett now owned by him, and one half of all the chattels which may grow out or arise from the products of said farms, produced by the labor, skill and diligence of the parties to these presents; to be divided between them, share and share alike, after deducting all dues which may be owing by the said Amos for the purpose aforesaid; household furniture of the said parties excepted. And the said parties of the second part doth agree well and truly to labor for and with the said Amos Barrett, for the consideration aforesaid, and to use all their skill, art and diligence to promote the interest of the said Amos Barrett in and about carrying on the farm or farms as aforesaid, during the term of five years from the date hereof, and fully to be complete and ended, and not to. labor for themselves in and about their or any of their individual business, or for their individual benefit, otherwise than shall be mutually agreed by the parties to these presents. And the said Amos Barrett, for himself, his heirs and assigns, doth further agree that in case, the said parties of the second part do and shall well and truly perform and keep their said agreement above mentioned, to convey to them by deed good and lawful and sufficient, to invest in them the fee simple of the one half of all such lands as may or shall now be owned, or may be owned by the said Amos Barrett at the' time of the expiration of this agreement, for the mutual benefit of the said parties of the second part. It is understood that the- parties of the second part are to put in all of their property for the benefit of the party of the first part; and the boys are to have the benefit of the winter’s schooling. In witness whereof the parties to this agreement have hereunto interchangeably set their hands and seals the day and year first above written.
    In presence of Amos Barrett, [l. s.]
    Luther Barrett. Chauncey Chase, [l. s.]
    Sidney S. Barrett, [l. s.]
    Amos Barrett, jr. [l. s.]
    Lucius Barrett,” [l. s.]
    At the time of making the agreement, A. Barrett, in addition to the several farms owned by him, upon some of which a portion of the purchase money was yet due, owned considerable personal property ; consisting of horses, cattle, farming utensils, &c. He had also, growing on his farms, a large crop of wheat, which had been sown the preceding fall. At the time of making the agreement, C. Chase was in bad health, and continued unwell and unable to labor until his death, which happened on the 8th of August thereafter. He died without issue, leaving his father, the complainant, his heir at law, and entitled also to a moiety of his personal estate, under the statute of distributions. After the death of C. Chase a conversation was had, between the complainant and A. Barrett, respecting the property and rights of the decedent. And it was agreed between them that A. Barrett should pay the debts, and that if there was any of his property remaining, after payment of such debts, it should be given to his widow. In pursuance of this agreement, A. Barrett paid off the debts of the decedent. The complainant having subsequently taken out letters of administration on the estate of his son, he filed his bill in this cause,- claiming an account and distribution of all the personal estate of A. Barrett, and of the personal estate received of C. Chase and the other parties, under the agreement of April, 1828 ; and praying that it might be distributed as partnership property. The vice chancellor decided that the agreement of April, 1828, constituted the parties copartners in the personal estate, and in the issues and products of the real estate. And he directed the defendant, to account to the complainant for one eighth part thereof, that being the value therof at the death of C. Chase; deducting therefrom the amount paid out by A. Barrett for funeral charges, &c. and other debts of C. Chase. From this decree the defendants, A. Barrett, 8. 8. Barrett, A. Barrett, jun. and L. Barrett appealed to the chancellor.
    The following is the opinion of the Vice Chancellor upon the decision of the case before him :
    Gardner, V. C. Amos Barrett, being possessed of a large real and personal estate, in the county of Orleans, on the 15th of April, 1828, and as the bill alleges, with a view to the advancement of his sons, entered into an agreement with Cbauncey Chase, his son-in-law, Sidney, Amos, jun. and Lucius Barrett, his sons, of which the paper here annexed is a copy. On the 1st of August, 1828, Chauncey Chase died; and this bill is filed by the complainant, as his administrator, against the defendants for an account of the property and proceeds, for the appointment of a receiver, and that the personal property may be sold by the order and decree of this court.
    A single question is presented; whether the agreement of the 15th of April, above referred to, created a partnership between the parties to that agreement. It is unnecessary to discuss the legal effect of this contract upon the rights of third persons, as there is a just and marked distinction between a partnership as respects the public and as respect the parties. (Kents Com. 9.) For the former purpose, appearing as a partner, or participating in the profits of a trade, is sufficient. For the latter, the parties must have joint shares in the stock and must be jointly interested in the general trade or particular adventure. (Gow, 14.) In relation to the’ real estate, covenanted to be conveyed by Amos Barrett at the expiration of five years, it is not pretended that any partnership existed. (15 John. Rep. 159. 5 Vesey, jun. 189. 9 Id. 505.) And the inquiry will be, whether the agreement, so far as it respects the personal property and the profits to be derived from working the lands, constituted a partnership to this extent, or whether it was merely a mode by which Amos Barrett was to compensate the other parties to the agreement for their labor.
    In the first place, had the parties to this agreement a mutual interest in the capital invested 2 The capital in this case consisted of all the personal property of the intestate and his associates, and their labor—upon the part of Amos Barrett, his teams and farming utensils, and the labor of his three boys. Amos Barrett expressly covenants that the three boys shall labor for the mutual benefit of the parties to the agreement; and the parties of the second part covenant well and truly to labor for and with the said Amos Barrett in carrying on the farms mentioned in the contract. Again, it was stipulated expressly that the teams, farming utensils, &c. of both parties should be purchased from the products of the farms. And each of the parties was to have his or their proper living and expenses out of those products; and that one half of the property which might grow out of or arise from the products of said farms, produced by the labor, skill and diligence of all the parties, at the expiration of the five years, should be divided between them share and share alike.

      It appears obvious to me, that in the labor thus to be pet-formed for their mutual benefit in the property put in, and which was to be paid for by the products of the joint labor, the parties to the agreement must be considered as having a joint interest, and of course, a mutual interest in the capital invested. In this respect, it is believed that the present case is to be distinguished from those cited by the defendants. In the case of Hesketh v. Blanchard, (4 East, 143,) the property shipped was purchased by the plaintiff for Robertson, and at his request, and was insured for the latter ; the plaintiff was to have half the profits of his adventure for his trouble. The court said, quo ad third persons, it was a partnership; but between the parties, an agreement for a compensation for the plaintiff’s trouble and credit. Here it will be obvious that the parties had not a mutual interest in the provisions shipped. On the contrary, they were the sole property of Robertson, and the plaintiff had no interest beyond a share in the profits. In Mozer v. Thorpe, (5 Taunton, 74,) the distinction between a joint interest in the goods, and an interest in the adventure, is taken and insisted upon by the court, go, in the case of Muzzy v. Whitney and others, (10 John. Rep. 228,) the defendants contracted with the turnpike company to make the road specified in the written agreement, and afterwards agreed to let the plaintiff have a share of the profits, if any, in making the road, in proportion to his help. This was determined to be a mode of paying the plaintiff for his help and labor. It is apparent there was no unity of interest in this case between the parties to the contract. The responsibility of completing the road, rested solely upon the defendants. The plaintiff was a sub-contractor merely. He worked for the defendants, who were entitled to receive the whole amount for constructing the road from the company, and their profits were only referred to by the contract as the measure of the plaintiff’s compensation. Had the plaintiff and the defendant contracted directly with the turnpike company, there would then have been an union of interest, within the rule; they would then have had a joint interest in the labor and advances necessary to complete the contract, and this would have coqstituted them partners as between themselves. (Doug. 653.) So in the case of Dry v. Boswell, (1 Campb. N. P. 329,) A. employed B. to work a lighter, and the gross earnings to be divided, (not the nett profits,) held not a partnership; and. the case in 4 Espinasse, 182, is of the same character. The same principle pervades these, and, I believe, all the cases that can be found upon this subject, that there must be a mutual interest in the capital, whether it consists in money, labor or credit, as well as share in the profits, to constitute a partnership as between the parties. (Gow, 14. 15 John. Rep. 422. Kent's Com. 13. Watson, 21. 2 H. Black. Rep. 244. And all the cases cited for the defendantszwill be found, upon a careful examination, to be destitute of this distinctive feature of a partnership. I have attempted to shew, that by a fair construction of this agreement, a joint interest was created in the capital put in; and there is an express stipulation to share in the proceeds of this capital after a certain interest. The agreement is informal; and from the circumstance of its being drawn inter partes, some doubt may obtain as to the precise import of some of its provisions. But I am of the opinion that it constituted the parties to it partners; and that Amos Barrett and the other defendants, with the exception of Sophronia Chase, must account to the plaintiff in this character.

      B. F. Butler, for the defendants.
    The agreement, connected with the facts appearing in the bill and answer, did not constitute a partnership between the parties to the agreement. For the purpose of constituting a partnership as to third persons, appearing as partners or participating in the profits of a trade is sufficient. As between the parties themselves, they must have joint shares in the stock, and must be jointly interested in the general trade or particular adventure. (Gow on Part. 12.)
    The vice chancellor seems to suppose that the agreement in this case was not to provide a compensation for services to be performed, but was distinguishable from those cases by reason of the parties to the agreement having brought some stock in the joint concern. This is an erroneous construction of the agreement, and untrue as a matter of feet. The agreement provides, in the commencement, that if the intestate and the sons of Amos Barrett will and do faithfully work and carry on the farms of the said Amos for 5 years, and put on said farms such implements of husbandry as they may now own, then Amos Barrett agreed that he would also put on said farms all the tools, &c. he owned, and also let his three sons (minors probably) labor during the time aforesaid for the mutual benefit of all parties. At the close of the agreement, it is also stated that the parlies of the second part are to put in all their property for the benefit of the first part, (Amos Barrett.) This ©lause is erroneously stated in the bill.
    It is clear, from these provisions taken together and in connection with other parts of the contract, that it was an agreement to purchase, on the part of his sons and his son-in-law, the intestate, and an agreement on the part of the father to sell for a stipulated consideration one half of all his real and personal estate. This construction is supported by the covenant, on the part of the sons, to labor for and with the said Amos Barrett for the consideration aforesaid j to use all their skill, &c. to promote the interest of the said Amos in and about, &c. They were to have one half of the chattel property accruing for profits of the farms, deducting all debts which the said Amos might owe in consequence of carrying on the business. If, however, there was a loss in carrying on the business, if no chattel property accrued from the profits of the farms, they were not to sustain the loss. They were to have, at all events, if they complied with their contract, one half of all the real and personal estate of Amos Barrett, their father ; that is, one half of all he then had; if more was acquired, they were also to have half of it; but so much was their right by contract.
    It is difficult to perceive how the real and personal estate can be separated. The contract was entire. The intestate acquired no more right to the personal estate of A. Barrett than to the real. The right to either depended upon the performance of the agreement. Pherhaps the first clause, in which it is said that A, Barrett agrees to put on for the use of said farms all ouch tools and implements, &c. and also let his three sons labor for the mutual benefit of all the parties to the agreement, may be supposed to evince an intention to put that part of the property of the father into common stock. But it will be perceived that it is only the use of the tools and implements he parts with for the purpose of carrying on the farms. The latter Clause, for the mutual benefit of the parties to the agreement, applies to the labor of his sons. The next, clause is relied upon, that the tools and implements of husbandry were to be purchased from the products of the farms. This evidently means no more than that any future additions to the farming utensils which the business might require should be purchased from the products of the farms. Amos-Barrett, in other words, was not to furnish'from his separate property funds to keep the tools in order; and this is the whole extent of the clause.
    Any other construction of this agreement is absurd ; for it could not be supposed that Amos Barrett, having as is stated a large personal estate, intended to put that into common stock with the small amount owned and possessed by the intestate, and without any equivalent; for if the title to the personal estate became complete by the agreement, it being a copartnership, then, so far as that was concerned, it was-wholly unnecessary for the intestate to labor the five years. The main inducement to the agreement, as regards the personal estate, was gone.
    The vice chancellor erred in supposing the parties put in anything as stock. In the commencement of the agreement, they agree to put on, for the use of the farm, tools, implements, &c. At the close of the agreement, they agree that Amos Barrett shall have all their property. No property was put in as stock. There is no joint capital; it is either a separate capital to be taken out by each, or it all goes to Amos; Barrett. The most that any part of the agreement expressed was, that the use of the tools, &c. should be put in; and if it were left there, each party had a right to resume his own. He did not part with the property. If the property was parted with by the agreement, it was expressly transferred to Amos Barrett, So the agreement was understood by the surviving parties. They all deny that they ever understood or. supposed the agreement made them parties, or that they received jointly in any manner any property from said intestate. If the agreement is dubious in its terms, acts of the parties to it may be resorted to for the purpose of aiding us in its construction.
    But whatever may be the effect of this agreement as to third persons, it could not create a partnership between the parties, if the facts negative any intention or agreement that it should have such operation. (Chitty on Contracts, 67, and cases there cited. 2 Barn. & Cress. 401. 9 Com. Law Rep. 122. 10 John. Rep. 226. 20 Id. 611.) There is no technical rule on this subject as between the parties to the agreement. (2 H. Bl. 244.) What then is the plain intent and object of this agreement 1 It was a mere family compact or arrangement. The father proposed, eventually, to provide for his children,, giving a trial of five years in the first place. If all the personal estate of the father, Amos Barrett, was by this arrangement put into common stock, then the real estate should be also. The same reasons will apply, so far as the good sense and true meaning of the contract is concerned; yet no one would contend for such an absurdity.
    Again.; the plain tiff waived all claim upon the property in question, and cannot now call upon any one for it.

      M. T. Reynolds, for the complainant.
    It is conceded that the covenant of Amos Barrett to deed to the other parties one half of his lands, at the end of five years, did not create a partnership as to the real estate. (3 Bro. C. C. 199. 5 Ves.jun. 189. 9 Id. 505. 15 John. Rep. 159.) But as to the personal property, I contend a partnership may be created by the agreement. The parties of the second part, by their agreement, surrendered into the hands of Amos Barrett all their property. Barrett, on his part, furnishes the farms and all the implements of husbandry he owns, to be used on the farms. The parties of the second part also put on for the use of the farms all their implements of husbandry. Here is a joint and present interest, although the division is to be made in futuro. Both parties put on to the farms tools and implements, to be used in their cultivation for the mutual benefit; all of which are to be paid for out of the proceeds of the farms. If the farms, therefore, yield nothing more than the support of the parties, the parties of the second part sustain the loss of the property vested. The case of Muzzy v. Whitney and others, (10 John. Rep. 226,) is distinguishable from this. In that case there was not that mutuality which is necessary to constitute' a copartnership. In this case all these prerequisites are supplied. The parties of the second part furnish all their property ; they covenant to give their whole time to the business, and the whole property is to be divided. The cases of Hesketh v. Blanchard and others, (4 East, 144,) Dry v. Boswell, (1 Campb. N. P. 329,) and Wilkison v. Frader, (4 Esp. JV. P. 182,)' are unlike the present. It is a well settled rule of law, that if a person who is employed by another to sell goods, is to have for himself whatever money he can procure for them beyond a stated sum, he is not a partner, but a mere factor or agent; but if he has made an investment in the concern, and his profit or loss depends on a contingency, he is a partner. (Benjamen v. Porteus, 2 Hen. Bl. 590.) The true definition oí partnership was given on the argument of the case of Waugh v. Coven, (Id. 244,) as cited from Puffendorf, lib. 5, ch. 8: “A partnership is where two or more bring together money, property or labor, to the end that thereafter the gains should be divided amongst them pro rata.” The same definition is adopted by Kent in his Commentaries, (vol. 3, p. 6.) If, then, this agreement did create the relation of partners, the complainant was not bound to wait until the expiration of the five years before he filed his bill; for the death of one of the partners dissolved the copartnership.. (3 Kents Comm. 28, 30.) Should the court decide that the article of agreement did not create a partnership, this will yet be a case of equitable jurisdiction, and one in which the court must grant relief. The bill at least can be retained as against Amos Barrett, and he be made to account. If the complainánt is not entitled to relief, and his bill is dismissed, it will be without costs. (Goodrich v. Pendleton, (3 John. Ch. Rep. 520.)
   The Chancellor.

As this cause was heard on bill and answer, all the allegations in the answer of the defendants are admitted to be true, for the purposes of this suit. The facts there stated show that the complainant has no legal or equitable claim against any of the defendants, unless the agreement of April, 1828, constituted the parties thereto co-partners. If they were copartners, the complainant probably has a legal right to an account, and to a portion of the partnership fund ; notwithstanding it appears by the answer that the intestate actually received in his support and maintenance, and other equitable claims against him, the whole amount which he contributed towards the partnership fund. Although the complainant agreed with the defendant A. Barrett to relinquish his claim upon the estate of his son if Barrett would pay the debts, I infer from the pleadings that the complainant had not then taken out letters of administration on the estate. And he was not legally bound in his character of administrator for the performance of an agreement made previous to that time, although he might be considered as bound in honor to perform the same. The vice chancellor was right, however, in allowing to A. Barrett all sums actually paid by him under that agreement, even if the complainant was entitled to a share of the whole property as the representative of a deceased partner. I shall therefore proceed to inquire whether the agreement of April, 1828, constituted the parties thereto copartners as between themselves, so as to entitle the representative of the son-in-law to one eighth of the property, although, by the act of God, it has become impossible for the intestate to perform his part of the agreement, and to carry into effect the original intention of the parties.

If the question to be determined was, whether this was such an agreement to share in the profits of a joint concern as to render all the parties to the same liable for debts contracted in the regular prosecution of their business, it might perhaps admit of a ready solution. A person who contracts for a share of the profits of a particular trade or business, as profits, has, upon principles of public policy as applied to commercial contracts, been holden to be a partner as to third persons. Upon the principle, I presume, that ho who contracts for and relies upon a part of the profits of the business as a compensation for his services, or for the use of his capital, is in natural justice bound to pay the creditors who have, upon the ordinary terms of credit, furnished the merchandize or other means oüt of which those profits were to arise, or by which they might be increased for his benefit. Whether this principle has not been carried too far, in extending it to the case of a mere servant, or agent of the trader, who contracts for a share of the actual profits of the business as a reward for his services, and who is not holden out to the world as a partner, is a question not necessary to be discussed in this case. It is certain, however, that such a partnership in relation to the rights of third parties, founded upon commercial policy, cannot be construed a contract of partnership between the trader and his servant, so as to give any rights to either contrary to their own intentions. To constitute a partnership as between the parties themselves, there must be a joint ownership of the partnership funds, according to the intention of the parties; and an agreement, either express or implied, to participate in the profits and losses of the business, either rateably or in some other proportion to be fixed upon by the copartners. When, by the agreement of the parties, they are to participate in the profit and loss, and the legal title to the property is in the parties jointly, a dissolution of the company, by the death of one of the parties, leaves the title to the property in the survivors and the personal representative of the decedent; and there must be an account and distribution of the partnership effects, unless the parties had previously provided for the continuance of the partnership by the survivors, or otherwise.

What then was the nature of the agreement into which the parties entered in this case, according to the manifest intent as apparent from the agreement when taken in connection with the situation and relationship of the several parties thereto 1 The father, a man of considerable wealth, consisting principally of real estate, agrees with his three sons and his son-in-law, who appear to have had but little property of their own, that they shall work such farms as he then owns, or as he may afterwards purchase, for the term of five years, and shall put in all their property for his benefit, except their household furniture; that he would put on to the farms all the teams, tools and implements of husbandry he then owned ; that his younger sons should also work on the farms; and that at the expiration of the five years, the three sons and the son-in-law who were parties to the agreement, should have the one half of the chattels which the father owned at the time of making the agreement, and one half of the property produced by carrying on the farms, deducting the expenses, and also one half of the real estate he then owned, or which he should own at the expiration of the agreement. In the mean time, the several parties were to have their living and expenses out of the products of the farms; and the teams and other implements of husbandry, which might be wanting during the five years, were to be paid for out of the produce of the farms. I think it is evident, from the provisions of this agreement, that it was the intention of the father to keep the legal title to the whole real and personal property in his own hands during the five years; and that the performance of the services by the sons and son-in-law was a condition precedent to the conveyance to them of a share of the property. It was in fact a family arrangement, with a view to the future distribution of the one half of all his property among this portion of his family, reserving the other half for himself and his other children. The real estate was as much a portion of partnership property, under this agreement, as the personalty; and if the complainant is entitled to have an account and distribution of the latter, on the principles of a copartnership, he is also entitled to a conveyance of a portion of the real estate. Although a contingency has happened which neither party anticipated, that cannot authorize the parties to make a disposition of the property which none of them ever contemplated, and which it is impossible to believe would have been agreed to by them, if this contingency had been foreseen as one which would probably happen. The most that a court of equity can do in a case where an agreement cannot be carried into effect, according to the intention of the parties thereto, in consequence of the act of God, or something over which the parties could have no control, is to adopt such an equitable arrangement as the parties probably would have inserted in the agreement, on that subject, if they had foreseen the probability of such an event and provided for the same. (Newton v. Rowse, 1 Vern. Rep. 460. Quick v. Stuyvesant, 2 Paige’s Rep. 84.) if these parties, at the time of making this agreement, had anticipated that the son-in-law might be taken sick immediately afterwards, so as to render it impossi- ' ble for him to labor as contemplated by the agreement, and that he might die within a few months thereafter, intestate and without issue, leaving the whole of his real estate and one half of the personalty to go to his own relatives, is it probable that the parties would have made any stipulation except such an one as was entered into between the complainants and A. Barrett, immediately after the death of the intestate ? As that agreement was fulfilled in good faith on the part of A. Barrett, so far at least as the complainant had any interest in the performance thereof, there was no foundation for this suit on that ground.

As I am satisfied the vice chancellor erred in supposing the defendants were liable to account upon the footing of a partnership, his decree must be revered, with costs. The complainant’s bill must also be dismissed. But as the complainant was prosecuting his suit in his character of administrator, and has no funds of the estate in his bands, I shall not charge him with the costs of the proceedings before the vice chancellor.


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    Hawley and others vs. Bennett.
    An injunction is not dissolved, neither does it become inoperative, by the abatement of the suit in which it is issued.
    If the suit abates by the death of the complainant or defendant, the party against whom the injunction issued, or his representatives, may have an" order requiring the complainant, or his representatives, to revive the suit within a limited time, or that the injunction be dissolved.
    Where a suit abates by the death of the complainant, those who succeed to 'his rights may apply to the court to punish a breach of an injunction, committed either before or after his death, as soon as they have filed a bill of ■revivor, or taken any other steps to revive the suit; and without waiting until a decree of revivor is actually obtained.
    It is no answer to a proceeding as for a contempt, for the breach of an injunction, so far as the rights of the adverse party are concerned, that the breach was committed under the advice of counsel.
    No person can apply to the court to punish a party for a breach of an injunction, in the nature of a civil remedy, unless he has some interest in the subject matter of the injunction, or has a right to prosecute for the breach thereof; except in the case of infants, lunatics, &c.
    Upon affidavits, entitled in the above cause, showing that the defendant, Abel T. Bennett, had been guilty of a breach of an injunction issued in a suit in which William James was complainant and the said Bennett was defendant, the complainants obtained an order that the defendant show cause why an attachment should not issue against him; and that a copy of the order, and of the affidavits on which the same was founded, should be served on the defendant eight days previous to the day of showing cause.
    July 16.

      J. Rhoades, for the defendant,
    now showed cause, and insisted, preliminarily, that the order was improperly granted, and ought not to be made absolute, because it did not appear from the affidavits, or other papers on which it was granted, that the complainants in this suit, by whom the order was obtained, had any interest in or connection with the suit in which the inj action issued, so as to authorize them to become the relators in a proceeding against the defendant for a breach of the injunction.

      James King, for the complainants,
    .insisted that the entitling of the affidavits was sufficient to show thatW. James, the original complainant, was dead, and that the suit had been revived by the complainants, as trustees under his will.
    The decision of the preliminary objection being reserved, the defendant’s counsel read an affidavit, showing that the alleged breach of the injunction had taken place after the abatement of the suit by the death of the original complainant, and before any proceedings were had to revive it in behalf of the present complainants; and that the suit had not yet been revived, although a bill of revivor had been filed, and a subpoena served on the defendant. His counsel thereupon insisted that the injunction was not in force during the abatement of the suit, and that the defendant could not be guilty of a violation of it by an)' act done by him during that period. And the defendant swore he had been so advised by counsel.
   The Chancellor.

An injunction is not dissolved, neither does it become inoperative, by the abatement of the suit in which it issued. But the rule is, that if the suit abates by the death of either the complainant or the defendant, the party against whom the injunction issued, or his representatives, may have an order requiring the complainant, or his representatives, to revive within a stated time, or that the injunction be dissolved. (Duke of Chandos v. Talbot, Sel. Cas. in Chanc. 24. Hill v. Hoare, 2 Cox’s Cas. 50.) Where a suit abates by the death of the complainant, those who succeed to his rights may apply to the court to punish a breach of an injunction, which has taken place either before or after his death, as soon as they have taken the preliminary steps to revive the suit, either by filing a bill of revivor, or otherwise. And it is not necessary for them to wait until a decree of revivor is actually obtained.

So far as the rights of a party have been affected by the breach of an injunction, it is no .defence to the person who has been guilty of violating the same, that he did it under the advice of counsel; although, if he has acted in good faith, it may be sufficient to protect him from punishment as for a criminal contempt. The rights of parties must be protected against the wrongful acts of the adverse party, although he may have acted under the advice of counsel. And his remedy, if any, must be against his counsel, who have misled him by then-improper advice.

It is evident, from the affidavits in this case, that the defendant has been guilty of a breach of the injunction, to the injury of the adverse party. The revised statutes, however, have made a distinction between criminal contempts, and proceedings as for contempts to protect the rights and remedies of parties. And where a person applies to the court to punish a party for a breach of an injunction, in the nature of a civil remedy, he must show that he has some interest in the subject matter of the injunction, or that he has a right to prosecute for the breach thereof; except in the case of infants, lunatics, &c. who are unable to protect their own rights. The preliminary objection in this case therefore is well taken; that it does not appear from any of the papers upon which this order was founded, or which have been served on the adverse party, that the persons who obtained that order have any interest in the subject matter of the suit in which the injunction issued, or have any authority to prosecute for a breach thereof. They should, either by petition or affidavit, have showed that W. James was dead, and that they had succeeded to his rights in relation to the subject matter of the suit, and had taken the preliminary steps to revive the suit. The order to show cause must therefore be discharged; but without costs, and without prejudice to the right of the complainants to renew their application upon proper papers, showing their right to prosecute for the alleged breach of the injunction, as well as the breach itself.


text:
    Baring & Willing vs. Moore and others.
    Where B. sold to M. lots 12 and 13, in the Binghampton patent, who gave B. a mortgage thereon to secure the payment of the purchase money; and M. afterwards sold lot No. 12 to W., for a sum a little less than the ' amount due B., to secure the payment of which, W. gave M. a mortgage on lot 12, conditioned to pay the purchase money for that lot to B., to be applied on B.’s bond and mortgage; and previous to the sale to W., K. recovered a judgment against M.; and after the sale, I<T. recovered a judgment against him, and subsequently to the recovery of N.’s judgment, R. & H. and several others recovered judgments against M. ; and R. & H. then obtained an assignment of the bond and mortgage given by W. to M.; It was held, that as between N. and R. & H., N. had an equitable right to have the bond and mortgage of W. applied in part payment of the mortgage of B.; and that it was not competent for M. to make an agreement with R. & H. to apply the bond and mortgage of W. in a different manner, so as to destroy or impair the prior lien of N. on lot No. 13 ; It was further held, that the equitable right of N. to have the mortgage of W. applied in payment of the mortgage of B. could only be destroyed by some new agreement between W. and M. as to its application or disposition, before the equitable right oí N. accrued.
    July 16.
    The bill in this case was filed to procure a foreclosure or satisfaction of a mortgage given to the complainants by A. A. Moore, upon lots No. 12 and 13, in the Binghampton patent, to secure the purchase money on those lots. After the giving of the mortgage, Moore sold lot No. 12 to the defendant, Whitney, for a sum which was something less than the amount due to the complainants on their mortgage on both lots. To secure the purchase money agreed to be paid by Whitney for lot No. 12, he gave to Moore a bond and a mortgage on that lot, conditioned to pay such purchase money to the complainants, to be applied on their bond and mortgage; Moore paying the balance of the last mentioned bond and mortgage, which should then be due. Previous to the sale to Whitney, B. Knower had obtained a judgment, against Moore, which was a lien upon both lots. And after the sale, B. Whipple recovered a judgment against Moore, which was a lien upon lot No. 13 only. Subsequently, R. & H. Mather, and several others, obtained judgments against him, which were also liens on the last mentioned lot. Previous to the recovery of any of these judgments, except that of Know-er, Whitney had made certain advances, to the amount of two or three hundred dollars to Moore, which the latter agreed should be applied towards his mortgage for the purchase money of No. 12. Neither Moore nor Whitney having paid the complainants their mortgage, a decree for sale was made, in the usual form, directing the payment of the amount due to the complainants for principal, interest and costs, and to bring the residue into court. A petition was thereupon presented, by Knower and Whipple, two of the defendants, stating their claims as judgment creditors, and that Whitney had not paid his bond and mortgage; and asking for directions to the master to sell the property in. such manner as to protect their rights, &c.

      S. Cheever, for the petitioners.

      J. Jl. Collier, for the defendants Whitney and R. & H. Mather.
   The Chancellor.

As the payment of the judgment due to Knower was provided for in the order which was made upon the argument of this motion, it is only necessary to refer to his rights so far as to say I am satisfied that the assignment to him of Whitney’s bond and mortgage, although absolute, was only intended as a security for the payment of that judgment; by having the amount of the Whitney debt applied towards the satisfaction of the mortgage to the complainants, so as to give Knower the benefit of the lien of his judgment on lot No. 13, discharged of the complainants’ mortgage to that extent. And that order having also provided for the payment by Whitney of the whole of his mortgage, except so much as had been arranged between him and Moore before the recovery of any of the judgments subsequent to that of Knower, the only question now to be disposed of is, as to the disposition of the surplus proceeds of the sale of lot number 13. The Mathers, or rather Whitney through them, he having paid their debt, claims the amount of such surplus as the substitute for Whitney’s bond and mortgage, which was assigned to the Mathers in July, 1832. And the defendant Whipple! as the holder of the oldest judgment, which is a lien on the last mentioned lot, claims that he had a right to have Whitney’s debt applied to the complainants’ mortgage, in exoneration of lot No. 13, on which he had such lien. As this was a contest among creditors to obtain satisfaction of pre-existing demands, and with full knowledge of all the facts on which their several equitable rights depended, none of them are to be considered in the light of bona fide purchasers without notice. It is, therefore, a question of priority of equities.

By the terms of the mortgage from Whitney to Moore, the purchase money of lot No. 12 was to be paid directly to the complainants, in part satisfaction of their mortgage. This was a specific appropriation of the fund for that object; and a subsequent purchaser or encumbrancer of lot No. 13, would have an equitable right to insist that it should be thus applied, unless some new agreement was made between Whitney and Moore, or there had been some- new disposition made of the • funds, before that equitable right accrued. Such a new disposition was made of so much of the fund as was necessary to meet the advances made by Whitney; which have already been provided for in the former order. As to the residue of Whitney’s mortgage, the specific appropriation thereof remained in full force at the time Whipple’s equity arose by the docketing of the judgment which gave him a lien upon No. 13. Having then acquired an equitable right to have the Whitney debt applied in part payment of the complainants’ mortgage, which was a prior lien on the same lot, it was not competent for Moore to make an agreement with a junior judgment creditor to apply the fund in a different manner, and so as to destroy or impair that right. The residue of the fund must therefore be applied in satisfaction of the judgments docketed prior to the 24th of July, 1832, according to priority; the petitioners taxed costs, on this application, being first paid out of such surplus. If there is a dispute as to the time of docketing any of the judgments, so as to render such a proceeding necessary, there must be a reference to a master to ascertain the facts.