author: J. Vanderpoel, V. C. The Chancellor.

text:
    Rogers and others vs. The Trader’s Insurance Company and others. The Same vs. The Howard Insurance Company and others.
    Where the agents for the proprietors of a steam boat effected an insurance upon the boat for the benefit and on account of whomsoever it might concern at the time of loss, if any should occur ; Held, that a mortgagee of the interest of one who was an owner at the time of the insurance and for whose benefit the policy was underwritten, had a right to the mortgagor’s portion of the insurance money, to the extent of the debt secured by the mortgage.
    Where the underwriter means to rely upon the insufficiency of the preliminary proofs, the objection must be distinctly made; and if he puts his refusal to pay upon other grounds, without any suggestion that the preliminary proofs are insufficient, the objection to the sufficiency of such proofs will be considered as waived.
    A mortgagor of personal property who has mortgaged the same for its full value, is not a necessary party to a bill filed by the mortgagee against the underwriters to recover upon a policy insuring such property on account of whoever it might concern as owner at the time of loss ; the mortgagee then being the legal owner of the property.
    Where the mortgagee of a steam-boat, who had taken the mortgage as surety for the payment of a note endorsed by him, was compelled to pay the note when it became due, and to save the credit of the drawers he gave them his check to take up the note instead of suffering it to be protested ; Held, that the debt for which the mortgage was given was no extinguished, and that the mortgage still remained a valid lien upon the boat for the security of the amount due the mortgagee.
    1837. July 18.
    If the testimony in a cause is equally balanced, the party who holds the affirmative as to the disputed fact to which such testimony relates, must fail.
    Where the agent of the original owner of property effects an insurance thereon for the account of whoever it may concern at the time of loss, and-by the terms of the policy the insurance money, in case of loss, is made payable to such agent, if the assured assigns his interest in the property, to a bona fide purchaser or mortgagee, before any loss has accrued, the agent has no lien upon the insurance money, as against such assignee, for a general balance due from the assignor.
    In the court of chancery the assignee of a chose in action is not permitted to Sue in the name of the assignor; but the suit must be brought in the name of the real party in interest.
    These cases came before the chancellor upon appeals from the decision of the vice chancellor of the third circuit. The bill in each case was filed to recover from the defendants, the insurance company, the one fourth of the amount. of a policy upon the steam-boat Alabama which was destroyed by fire; by which event the owners sustained a total loss. The facts in the two cases being the same, it was agreed by the counsel for the respective parties, upon the hearing before the vice chancellor, that both causes should be heard together; that the several allegations in the bills, and the defences set up in the answer, in each suit should be considered the same in both; and that the testimony taken in each suit should be read arid used in either, subject to all legal objections thereto. The causes were heard upon pleadings and proofs as against the insurance companies and the defendant Winthrop ; and upon the bills taken as confessed against the defendants’ Stratton and Stow. The vice chancellor decided and decreed that the insurance companies were respectively liable to the complainants for the sum of $2500 ; being the amount of the one fourth of their respective policies upon the steam-boat, together with the interest thereon. And he directed references to á master to compute the amount of such interest, reserving the question of costs and all further directions. From this decision the insurance companies appealed. And upon the hearing before the chancellor, it was agreed that if the decrees were affirmed, he should dispose of the question of costs, and that the amount of interest should be computed and inserted in the decrees, so as to make a final decision of the causes.
   The following is the opinion of the vice chancellor delivered in the case of the Howard Insurance Company, and which is applicable to both suits.

J. Vanderpoel, V. C.

The first objection is to the sufficiency of the preliminary proofs. The object of offering such proof is to furnish reasonable information to the insurer, so that he may be able to form some estimate of his rights and duties, before he is obliged to pay. It has always been liberally expounded, and is construed to require only the best evidence of the fact that the party possesses at the time. Was there any such proof offered here ? Stow, as it appeas from the answer, on the 5th day of August, 1826, notified the defendants in writing, that he was entitled to one fourth of the loss, and desired the company to pay the same to him, and forbid them from paying it to Stratton and Winthrop. On the 12th day of September, 1826, he delivered to them his affidavit, stating that at the time of the loss, he was the owner of one fourth part of the boat, by virtue of a certain deed of mortgage executed by Duncan, and being the whole of his interest, which remained in full force ; that the debt for which it was given remained unpaid and unsatisfied. And he also delivered to them a copy of the assignment or mortgage. It is contended, however, that the mortgage itself should have been exhibited, and a satisfactoiy reason given why the note was not produced. If this position is correct, then the next inqury will be, has not the company waived the production of the technical preliminary proofs which they now set up as a bar to a recovery ? The law is now settled that if the underwriters make no objection to the preliminary proofs, but put their refusal to pay upon the ground that they are not liable to the person who exhibits his claim, it is a waiver of preliminary proof of interest. In the case of Francis v. The Ocean Insurance Company, (6 Cowen, 404,) the court say that the defendants waived whatever imperfection there may have been in the preliminary proofs of the plaintiff’s interest in the subject insured, by not putting their refusal to pay upon that ground. This case was removed into the court of errors, and the doctrine laid down by the supreme court was approved and fully established. (2 Wend. Rep. 64. See also Voss v. Robison, 9 John. Rep. 192, and 7 id. 315. 8 id. 307.) No objection was made by the company when Stow demanded payment for the loss, and exhibited his proof of interest. If the objection which is now urged had then been taken, the deficiency might have been readily supplied, by producing the assignment and accounting for the non-production of the note if that had been essential to establish his interest. The defendants in their answer admit that they disregarded Stow’s prohibition not to pay Stratton & Winthrop, and sometime thereafter paid to them the amount now in controversy. They did then and still insist, that they were bound to pay Stratton & Winthrop ; thus excluding the idea that Stow had any claim upon them which he could enforce.

The next objection interposed to the complainant’s recovery is, that Duncan is interested and ought to have been made a party to this suit. On the 4th of January, 1826, he assigned to Stow one fourth of the steam-boat Alabama, to be held as collateral security for the payment of Daggett’s and Roberts’ note, endorsed by Duncan, in favor of Stow. The boat had been insured at the office of the defendants for ten thousand dollars, and Duncan’s interest therefore in the policy was two thousand five hundred dollars. During the continuance of the policy, the boat was entirely destroyed by fire. It is contended by the complainants that the debt for which the note was given is still unpaid, and that the assignment therefore became absolute. It is admitted that the instrument executed by Duncan is a mere mortgage ; and it is urged that as mortgagor he ought to -be made a party. (3 John. Cas. 322. 4 John. Chan. Rep. 149.) There is, however, a manifest difference between a mortgage of real and personal property. The former is merely a security for the debt; the mortgagee has only a chattel interest, and the freehold remains in the mortgagor; It cannot he sold by the mortgagee on default of payment j o o r - without a bill of foreclosure and a decree of sale. Not so, however, with a mortgage of personal property ; ittranfers the whole interest, and in fact the mortgagee becomes the owner. (1 Peters, 441, 446.) After the condition is forfeited, the mortgagee of a chattel has an absolute interest in the thing mortgaged, so that the mortgagor cannot, by tendering the debt, entitle himself to an action of trover against the mortgagee. (Brown v. Bement, 8 John. Rep. 96. Ackley v. Finch, 7 Cowen, 290. Jones v. Smith, 2 Ves. jun. 378.) And if the mortgagee sells or disposes of the goods, the title of the purchaser is complete, and he shall hold it discharged from all claim on the part of the original owner. If the complainants are correct in their position that the debt for which the mortgage was given is unsatisfied, and that the mortgage was in full force when that debt became due, then, according to the authorities 1 have cited, the interest of Stow became absolute, and his assignee will at all events hold the property discharged from all claim on the part of Duncan for redemption. And the rights of the latter, if they are not absolutely extinguished, are reduced to a mere equity to call upon Stow, the mortgagee, to account for the value of the property over and above the amount due. Suppose that in this case Duncan had been made a party, what object could it have answered ? In ordinary cases it is necessary to bring in the mortgagor to give him an opportunity to redeem, and thus become reinvested with the title to the property. In this case there was nothing to redeem, the subject matter, if I may be allowed the expression, had been destroyed, and the controversy is now reduced to a contest for the fund of two thousand five hundred dollars to satisfy a claim of five thousand dollars; which claim, if valid, it is admitted on all hands, absorbs the whole and destroys the possibility of redemption. Suppose that instead of the boat, the policy had been mortgaged, what purpose would it have answered to have brought in the mortgagor to redeem ? The fund was money. A sale could not enhance its value, nor swell it beyond the amount of the claim for which it was mortgaged. When the mortgage is of money in the' stocks, or the like, no decree of foreclosure is necessary. In Lockwood v. Ewer, (2 Atk. 303,) a bill was brought to redeem two thousand five hundred pounds East India stock transferred to secure the payment of two thousand pounds and interest. The lord chancellor said it was a plain case for the defendants; that on a mortgage of land, a bill of foreclosure ought to be brought, but on a mortgage of stock it was not necessary. There was therefore no necessity to make Duncan a party, nor can his testimony be impeached upon the ground of interest. As between these parties it is completely balanced, inasmuch as a recovery by either would create a liability on his part to the one who is defeated.

The insurance was procured by Stratton & Winthrop, who acted as agents and factors of John Duncan, jr. & Co. and it is contended that this, by operation of law, gave them a lien upon the policy for advances made for the. insured, or for any general balance that might be due to them upon account. This principle cannot be controverted; it is sanctioned by mercantile usage, and is now fully supported by authority. (Godin et al. v. London Insurance Company, 1 Burrow, 489. Liv. on Agency, 196. Foster v. Hoyt, 2 John. Cas. 327.) These cases are, however, clearly distinguishable from the one before the court. From an examination of them it does not appear that any person was to be interested or benefitted by the policy except the original owner of the goods insured ; which gave to the agent or factor a lien for advances made, or for a general balance that might be due to him from the insured. The policies in those cases did not contemplate an assignment or change of ownership, and the existence of the lien, therefore, could not operate to the injury or prejudice the rights of third persons. Who were to be benefitted by the terms of the present policy 1 Not John Duncan, jr. & Co. alone, which would have entitled Stratton & Winthrop to their lien ; but the insurance was made “ for account of whom it may concern, at the time of loss, as owner,” &c. Thus contemplating an assignment, and even permitting the insured to part with his interest during the existence of the policy; and negativing the idea of any claim except of the owners at the time of loss. It has already been shewn, that the mortgage or assignment to Stow constituted him an owner, and therefore, as against his interest and those claiming under him, the lien of Stratton & Winthrop was inoperative and destroyed. It is evident, also, that this was the construction given by Stratton & Winthrop to the policy: For, disregarding the lien which is now set up, T. N. Niles, one of the members of the firm, took an assignment from Daggett & Roberts, in February, 1826, for the interest in the boat; and he knew at the time that Duncan had assigned his right to Stow to secure him for the money he had loaned and of which they (Stratton & Withrop,) had received the benefit. But it is said that according to the terms of the contract, Stratton && Winthrop alone had a right to receive the money, and therefore that they had the right to appropriate it to the payment of their debt against the insured. In this I apprehend the defendants are mistaken. The words “ loss payable to S. & W.” merely constituted them the attornies for the owners, whoever they might be. This provision in the policy does not control or destroy the right previously acquired, nor deprive them of the general power of revocation, nor does it prohibit them from assigning their interest, after notice to the company, and before payment.

Did Duncan’s assignment to Stow transfer the policy, and if it did, has that interest been extinguished ? If the rule was not well established that the assignment of the boat draws after it the policy as incident thereto, still in this case I would be relieved from all difficulty, by the principle that I have already recognized that Stow, as mortgagee, was, for all legal purposes, to be considered as owner, and therefore as such, by the terms of the policy, the loss was to be paid to him.

But it is said that his interest has been extinguished by the payment by Daggett & Roberts of the note for which the mortgage was given. If this fact is established, then the complainants acquired no title from Stow; the company are not responsible for the claim that is now set up, and the bill ought to be dismissed. What are the facts as admitted and proved ? The house of John Duncan, jun. & Co. were indebted to Stratton & Winthrop for advances by them for building the boat; the firm when called upon for payment represented their inability to comply, and were obliged to call in the aid of their friends to furnish them with the means of redeeming their credit; and an application was then made by them, with the knowledge of Niles, one of the firm of Stratton & Winthrop, to Stow for the loan of his note for five thousand dollars, upon which the money was raised and transmitted to Stratton & Winthrop. Upon this statement alone it would perhaps be a subject worthy of consideration, whether the payment towards the lien of Stratton & Winthrop, if any such existed, and with their knowledge and assent with funds obtained upon Stow’s responsibility, did not for that amount invest him with all their rights and equities, and substitute him in their place to enforce them until that responsibility was discharged. The assignment which Stow afterwards received would then be considered a mere cautionary measure, and could not be construed as a waiver of a right already acquired. The case, however, does not stop here. It appears that Stow was obliged to pay the note when it became due, and Daggett & Roberts, two of the members of the firm of John Duncan, jun. & Co., who, upon the dissolution succeeded to the rights and became responsible for the liabilities of the firm, gave their note to Stow, endorsed by Duncan, payable at the Mobile Bank; and as collateral security Duncan gave him an assignment of one fourth of the boat. When this note became due, Daggett & Roberts were unable to pay it, and Stow at their request gave his check to take it up. And it is now contended that this was a payment of the note, and consequently that the assignment or mortgage was satisfied and extinguished. Is this a fair construction of the transaction, and comporting with equity and good conscience 1 The lien of Stratton & Winthrop could not extend to more than five thousand dollars, for that was the whole interest of Duncan in the policy. This they received, and they now contend that this lien, already satisfied, shall be again revived to enable them to recover from the company money which in fact they had already received from Stow. This appears to me to be opposed to all the principles of law and equity. Was the original debt for which the mortgage was given satisfied and paid ? Duncan says it was not. Daggett & Roberts both say it was unpaid, and that they did not conceive the security impaired, nor did they intend that a new loan should be created. Stow looked to his mortgage for indemnity. There is nothing in the case from which an inference can be drawn that he intended to surrender it. Indeed, if that was the intention of the parties, why was not the mortgage itself given up and cancelled ? Its existence speaks a language which cannot be mistaken, and it is in perfect accordance with all the facts in the case. The case of Dunham v. Dey, (15 John. Rep. 555,) established the principle that the renewal of notes secured by a mortgage does not affect the security. Another objection taken by the defendants is, that the assignment by Stow to the complainants is merely for the money insured; that it did not invest them with any rights or equities, and that notwithstanding the assignment, his debt against Daggett & Roberts was still in full force. This objection has already been anticipated. As mortgagee he became absolute owner of the boat; as such his title to the money embraced by the policy was according to its terms consummated by the loss, and he had a right to collect, and if to collect to assign his interest. By the assignment also, his debt against Duncan & Co. or Daggett & Roberts was collected and paid.

As to the last point of the defendants, I have barely to observe, that I cannot conceive how the attachment procured by the complainants in eighteen hundred and twenty-six, against this fund, for their guarantee of drafts accepted by Stratton & Winthrop and which the latter were obliged and afterwards did pay and had the attachment withdrawn, could defeat. the complainants’ right acquired in eighteen hundred and twenty-eight from a person who had no notice of the attachment and whose interest was complete and perfect.

H. W. Warner, for the appellants.

J. Duer & A. G. Rogers, for the respondents.

I shall therefore decree that the company pay to the complainants the sum of two thousand five hundred dollar» e 1 with interest, to be computed by a master, «fee.

The Chancellor.

The facts in these cases, though most of them are undisputed, are somewhat complicated ; and a brief statement thereof is necessary to a proper understanding of the questions to be considered on the appeals. In 1825, J. Duncan, jun., E. H. Roberts and H. Daggett were copartners in trade at Mobile, under the name or firm of John Duncan, jun. <fe Co. The defendants P. Stratton and T. C. Winthrop were merchants at New-York, doing business in the name of Stratton <fe Winthrop; and were also connected in business at Mobile with T. N. Niles, under the firm of T. N. Niles <& Co. The steam boat in question was built that year by Duncan & Co., who were to be owners of three fourths of the boat, and G. <fe J. Goff of one eighth and N. Heyden of the remaining eighth. To pay for the building of the boat, or for labor done on the same, Niles <fc Co. became the endorsers-upon notes of Duncan & Co. to the amount of $3300; which notes were afterwards paid with funds furnished by the endorsers. J. Duncan <fc Co. were also indebted to Stratton <& Winthrop and to T. N. Niles <fe Co. upon other accounts, for the security of which Daggett and Roberts, two of the copartners, promised to transfer their interests in the boat, which was subsequently done. The copartnership of Duncan & Co. was dissolved in November or December, 1825, and a new partnership was formed by and between Daggett & .Roberts. Previous to this time, however, the original firm, as the agents for all the owners of the boat, had directed Stratton & Winthrop to get her insured for the benefit of those who might be such owners. On the 12th of December, 1825, but whether before or after the dissolution of the firm of J. Duncan, jun, & Co. does not appear, Stratton «fe Winthrop applied to the Traders’ Insurance Company and to the Howard Insurance Company in New-York, to insure $20,000 on the boat for the period of seven and a half months from the 15th of November preceding, on account of John Duncan, jun. & Co. or whoever might be the owners when the loss or damage, if any, should take place; And each insurance company underwrote a policy accordingly for $10,000 5 in which policies the risk was specified to be on account of whomsoever it might concern at the time of loss, if any should occur; the loss, if any, payable to Stratton & Winthrop, New-York, first deducting the premium note if unpaid. Upon the dissolution of the firm of John Duncan, jun. & Co.; each of the copartners took one fourth of the boat; and the boat was subsequently enrolled in their names respectively, as such owners, and in the names of G. & J. Goff and N. Hayden, who were the owners of the two remaining eighths. Previous to the insurance, Stratton & Winthrop had accepted a draft of Duncan & Co. to pay for the engine and other machinery for the boat; which acceptance was afterwards paid with the proceeds of a note of $5000, which the last named company had borrowed of D. Stow, of Mobile, for that purpose. For this note, which was ultimately paid by Stow, the members of the late firm, on the fourth of January, 1826, gave to him a note for $5000, drawn by Daggett & Roberts and endorsed by Duncan, payable at the Bank of Mobile sixty days after date; and secured by an assignment to Stow of Duncan’s one fourth of the steam boat. This note was endorsed by Stow and discounted for his benefit at the bank. But when it became due, Duncan being absent and Daggett & Roberts not having funds to pay it, Stow was obliged to furnish the means to take it up himself. He accordingly gave his check for that purpose, with which they paid the amount to the bank and took up the note. After the loss of the boat, Stratton & Winthrop having failed, and Duncan and Daggett & Roberts being insolvent, and the debt secured by the assignment of Duncan’s interest to Stow remaining unpaid. Stow gave notice of his rights, under the assignment, to the insurance companies and forbade the payment of his share of the loss to Stratton & Winthrop. The insurance companies, however, paid the whole amount of the loss over to them, upon receiving an indemnity against the claim of Stow. In 1828, Stow assigned to the complainants all his right and interest in the sums insured by the two companies upon the boat, and all his rights and claims against the companies; to be applied towards the payment of his previous indebtedness to the complainants.

The objection which was made before the vice chancellor on account of the supposed insufficiency of the preliminary proofs was not well taken, for the reasons stated by the vice chancellor in his opinion. That objection was, therefore, very properly abandoned by the counsel for the appellants, upon their argument here.

Niles was not a necessary party to the suit, although he was interested in sustaining the claim of Stratton & Winthrop to the whole amount of the insurance money; as the complainants’ claims were against the insurance companies alone. And it was probably not necessary to make Stratton & Winthrop parties for any other purpose than that of getting possession of the policies, which were supposed to be in their hands or subject to their control. The complainants had a right to make them parties, however, if they thought proper, for the purpose of charging them with the payment of the monies wrongfully received by them, if the insurance companies were unable to pay. For the reasons which are very fully stated by the vice chancellor in his opinion, I am also satisfied that Duncan was not a necessary party. And his interest being equally balanced in relation to the matters as to which he was called to testify, he was not an incompetent witness. If the complainants recovered, it discharged his liability to Stow pro tanto; and if Stratton & Winthrop succeeded in recovering the money, by reason of the alleged lien upon the policy for the supposed balance due them on their acceptances and liabilities on account of the late firm of John Duncan, jun. & Co., that debt would be discharged to the same extent.

The next objection to the complainants’ right to recover is that the taking up of the note at the bank by Dagget & Roberts, although with the funds furnished by Stow himself, was a dischai’ge of the mortgage upon the boat. In cases of this kind the court will always look to the real nature of the transaction, and will not consider a mortgage discharged by the mere change, or even the destruction of another security for the same debt, if it was not the intention of the parties to destroy the lien of the mortgage. In the case of Hardwick v. Mynd, (1 Anst. 111,) the court of exchequer decided that the taking of a bond from the mortgagor for the arrears of interest, which bond was never paid, was not a discharge of the lien of the mortgage for such interest, although a receipt was actually endorsed upon the mortgage for the interest. So in the case of Davis v. Maynard, (19 Mass. Rep. 242,) where the mortgage was given to secure the payment of a sum of money due on a promissory note, and the mortgagee afterwards accepted a recognizance for the sum due, and left the mortgage with the justice before whom the recognizance was acknowledged, who delivered it up to the mortgagor, the supreme court of Massachusetts held that the lien of the mortgage was not thereby discharged. And in the case of Dunham v. Dey, (15 John. Rep. 555,) the court of errors in this state decided that where a mortgage is given to secure the payment of a promissory note, the subsequent renewal of the note is not to be considered an extinguishment of the original debt so as to discharge the lien of the mortgage. See also Dartnell v. Taylor, (1 Lloyd & Goold’s Rep. 247;) and Saunders v. Leslie, (2 Ball & Beat. Rep. 509.) In this case it is very evident that it was never the intention of either of the parties to the transaction that the lien of the mortgagee upon the boat should be discharged, by his furnishing the funds to take up the note at the bank and thus to save the credit of the drawers. This note has not therefore been paid, within the true intent and meaning of the condition of the assignment. And the mortgage having become forfeited by the failure to perform the condition, the legal title to one fourth of the steamboat was in Stow as the owner thereof at the time of the loss. (Langdon v. Buel, 9 Wend. 80. Fergusson v. Lee, Idem, 258. Case v. Boughton, 11 Idem, 106.)

In this case the underwriters contemplated that a change of ownership of the boat might take place during the continuance of the risk, and intended to insure whoever might be the owners from time to time; so that those who should be interested as such owners at the time when any loss should occur should have the benefit of the policies. Stow, therefore, had an insurable interest' at the time of the loss, to the extent of $5000, which was actually covered by the policies. And there is no doubt as to his equitable right to claim that amount from the insurance companies unless Stratton & Winthrop had a preferable lien, in their character of agents for making the insurance.

I lay entirely out of view the allegations in the answers that there was an agreement on the part of Duncan that Stratton & Winthrop, or T. N. Niles & Co. should have a specific lien upon the insurance money for the purpose of paying acceptances or securing any general indebtedness of John Duncan, jun. & Co. to either of those houses. Even if Niles and Duncan were both competent witnesses and equally disinterested, these allegations in the answers must be considered as unsustained by the proofs ; as the testimony of Niles on that subject is most positively and unequivocally contradicted by that of Duncan himself with whom the agreement is alleged to have been made. And where the testimony in a cause is equally balanced, the party who holds the affirmative as to the disputed fact must fail. Besides, if this allegation in the answers was proved, I am inclined to think Stow had the preferable equity, to the extent of the $5000 which he advanced to meet the draft which was accepted by Stratton & Winthrop.

The debts, if any, which were due to Stratton & Winthrop, and to T. N. Niles & Co. were the joint debts of Duncan and his former copartners; and at the time of the loss their interests in the boat had been severed, if they had not in fact been severed previous to the insurance. The agents for the company which had formerly existed would not, therefore, have had any general lien at the common law upon the separate share of Duncan in the insurance money, under the special provis-, ions of this policy, even if the assignment to Stow had not been made. But as the policy in terms insured whoever should be the owner of the boat at the time of loss, and Stow was then the owner of one quarter thereof by virtue of the assignment from Duncan, all pretence of a lien upon that portion of the insurance money for any general balance which might be due from John Duncan, jun. & Co. entirely fails. The agents cannot object to the severance of the joint interests which Duncan, Dagget, and Roberts once had in the boat, as they had themselves ratified such severance, as copartners in the firm of T. N. Niles & Co. by taking an assignment of the separate shares of Dagget & Roberts in payment or security for the indebtedness of the former partnership of John Duncan, jun. & Co. Again; I think the evidence in this case establishes the fact that the whole amount of indebtedness for which the lien is claimed was fully paid, if an equitable adjustment of the residue of the #20,000 of the insurance money is made; leaving Stow’s $5000 free from all claims whatever. And if Stratton & Winthrop had not failed, and had received Stow’s share of the money without objection, as the agents named in the policies for that purpose, he could have recovered the whole amount from them in an action for money had and received tohis use.

The terms of the policies having provided for the case of the sale or transfer of an interest in the boat subsequent to the commencement of the risk, by creating insurances which would attach upon the interests of whoever it might concern at the time of the loss, and it being the evident intention of the parties to cover the interests of the assignees of those who were the owners at the date of the policies, if any transfers of interest should be made, no assignment of the policy was necessary; and the printed clause requiring notice to the underwriters in case of an assignment of the policy became inoperative in these cases. It was unquestionably competent for the underwriters to agree to insure whoever might be the owners of the boat at the time a loss thereof should occur; so as to protect the rights of those who might succeed to the interest of the parties originally insured. Whether such an assignee could bring a suit at law in his own name upon the policy, is a question not necessary to be considered here. In this court the suit is properly brought in the names of the real parties in interest; as the assignee of a chose in action is not permitted to file a bill in the name of a mere nominal party. (Field v. Maghee, 5 Paige’s Rep. 539.)

By the terms of these policies the loss, if any occurred, was payable to the agents for the insurance; but this gave them no greater rights in equity than they would have had as such agents if that clause had not been inserted in the policies. And as the appellants paid Stow’s share of the insurance money over to Stratton & Winthrop, after they had failed in business, with full knowledge of his right to the same, and when the appellants had been expressly notified not to pay it to Stratton & Winthrop, they paid it in their own wrong and must look to their indemnity. The appellants must, therefore, pay it to the complainants as the subsequent assignees of the rights of Stow. If the appellants had doubts as to whom the money actually belonged, upon receiving the notice of Stow’s claim they should have retained the money in their hands and called upon the different claimants to interplead and settle their rights between themselves.

The claim'which the complainants once made to the money, under the attachment which was subsequently abandoned long before they had acquired the interest of Stow under the assignment from him, cannot possibly affect then-rights under that assignment. At the time Stow made the assignment to them he had a perfect right to this "part of the insurance money; and being assigned in good faith to secure an antecedent debt of long standing, it was wholly unobjectionable. An assignment of the right of action against an insurance company, upon a policy, after the loss has happened, is not an assignment of the policy of which notice must be given, within the intent or meaning of the printed clause in the policy. That relates solely to assignments which are made during the continuance of the risk and before the loss has occurred.

The decrees of the vice chancellor are correct and must be affirmed with costs; and the interest upon the insurance monies from the time when they became payable must be computed and inserted in the decrees of affirmance, according to the agreement of the parties upon the argument. In relation to the question of costs in the suits generally, which by the stipulation is also to be disposed of here, I think as between the complainants and the insurance companies the latter should be charged with the costs to which the complainants have been subjected in order to obtain their equitable rights. The decrees, however, must be without prejudice to the rights of the appellants to claim a repayment of those costs, as well as their own costs before the vice chancellor, from Stratton & Winthrop. And they are also to be at liberty to apply to the vice chancellor for such further directions as may be just as against Stratton & Winthrop, upon the equity reserved in the original decrees.

For the purpose of giving to the respondents the damages which they have sustained by these appeals, the interest upon the insurance monies is to be computed up to the time of the decrees of the vice chancellor; and the decrees of affirmance must direct the payment of the amount of principal and interest which was then due together with the interest upon the amount from that time, in addition to the costs in the court below and upon the appeals. As the eights of some of the parties have probably changed since ahe argument here, the decrees of affirmance are to be entered nunc pro tunc as of that time.

       See Ætna Fire Insurance Company v. Tyler, 16 Wend. Rep. 401.

         See Pomeroy v. Rice, 16 Pickering's Rep. 22.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Van Kleeck vs. The Ministers, &c. of the Reformed Dutch Church and others.
    1837. August 1.
    A will of personal property, or of chattels real which goes to the personal represenatives and not to the heir of the testator, has reference to the state of the property at the time of the testator’s death. And a general residuary bequest in such a will, of all the testator’s property not before disposed of, carries to the residuary legatee not only the personal estate which the testator did not attempt to dispose of by his will, but also every other part of the personalty which upon the testator’s death is found not to have been effectually otherwise disposed of by the will.
    But a residuary devise of all the testator’s real estate not before disposed of by his will, does not embrace real estate which is in terms absolutely devised to others in the same will; although it is found, upon the death of the testator, that such real estate is not legally and effectually devised, either from the incapacity of the devisee to take real estate by devise or by reason of his death in the lifetime of the testator.
    A residuary devise of real estate carries to the residuary devisee not only the real estate in which no interest whatever is devised to others, but it also embraces reversionary and contingent interests, which, upon the events contemplated by the testator, is not wholly and absolutely disposed of except by such residuary devise.
    The heir at law can only be disinherited by express words or by necessary implication. He is, therefore, entitled to the real estate which is not legally and effectually disposed of by will, although the testator has attempted to devise the same to others.
    This case came before the court upon general demurrers to the complainant’s bill, for want of equity either as to discovery or relief. The bill was filed by Lawrence L. Van Kleeck in behalf of himself and the other legal representatives, by descent, devise or otherwise, of the residuary devisees of John Haberdinck, who died in 1723. The complainant stated in his bill that J. Haberdinck, upon a partition of a certain tract of land called “ The Shoemaker’s Field,” in the city of New-York, in 1696, became seized in fee, in severalty, of 40 lots of land, parts of that tract; and was seized of another part of the same tract, which remained undivided, as tenant in common of one fifth thereof with four other persons; that he afterwards leased the greater part of the said lots to different persons, for long terms, on annual rents, according to the then value of each lot; which terms expired at different times between 1751 and 1793; and that he continued seized in fee simple of the lands so leased, subject to such leases, and also seized and possessed of the lands not included in the leases, until his death. The complainant further alleged in his bill, that in 1722, Ilaberdinck made his will in due form of law for devising real estate ; and after bequeathing the bulk of his personal estate to his wife for life and remainder to his own relations, “ and not having made any valid or effectual disposition of the lots and parcels of land before mentioned, or of any part thereof, or of any interest therein,” did further devise in the words and to the tenor and effect following: “ And I, the said John Ilaberdinck, do further give, devise and bequeath unto my said wife Mayken Haberdinck, all the rest of my temporal estate, real and personal, none excepted ; whether the same shall be and consist in hbuses, lands, goods, chattels, gold, silver, monies, negroes, bonds, mortgages, bills, books, debts, or any other estate whatever, none in the world excepted ; to have and hold all the rest and remaining part of my estate (except what part is above bequeathed and disposed>) unto my .said wife Mayken Haberdinck during her natural life. And after her decease, I give, devise and bequeath one just equal quarter part thereof to my wife’s sister Jannatia Boss, widow of John Peterson Boss ; and in case of her decease, to be equally divided between all the children of the said Jannatia Boss, their heirs and assigns forever. One other just and equal quarter part thereof I give, devise and bequeath unto Elsie Sanders, widow of Robert Sanders, another of the sisters of my said wife ; and in case of her decease, to be equally divided among all the children of her the said Elsie Sanders, their heirs and assigns forever. One other just and equal quarter thereof I give, devise and bequeath unto all the children of Baltus Van Kleeclt, late of Dutchess county, deceased, a brother of my wife, to be equally divided between them, and to their heirs and assigns forever. And the other equal quarter part thereof I give, bequeath and devise to all the children of Catalyntie Van Benthuysen, late of Albany, deceased, another of my wife’s sisters, to be equally divided between them, and to their heirs and assigns forever.” It was also alleged in the bill that at the death of J. Haberdinck, Mrs. Boss, Mrs. ganders, four children of Mrs. Van Benthuysen, and five children of Baltus Van Kleeck were living; among whom was Lawrence Van Kleeclc, the grandfather of the complainant; that they all survived Mrs. Haberdinck, the widow, who died shortly after the death of her husband; but all died a long time since; some of them having disposed of their estates by will, and others having died intestate ; that the grandfather of the complainant died in 1769, having by his will devised all his estate to his five children equally ; and that the complainant’s father died about fourteen years afterwards, having devised four fifths of his estate to the complainant and his three other children, with the benefit of survivor-ship if any of them .should die in their nonage and unmarried, and the other fifth to his two grand children; and that two of the complainant’s brothers and sisters died before twenty-one and unmarried ; by which the complainant became entitled as devisee to two fifths of his father’s estate. The complainant also alleged that the will of J. Haberdinck was duly proved and recorded in the prerogative court of the province of New-York, before Gov. Burnet, in February 1723 ; that soon after the death of the widow, who died previous to that time, one of the defendants, the corporation of the Protestant Reformed Dutch Church in New-York, possessed itself of the original will and subsequently obtained assignments from the tenants of the lands "in “ The Shoemaker’s Fieldand about the same time entered into possession of those lands, either under those assignments or under some other claim or pretence of title alleged by the corporation to have been derived from J. Haberdinck ; and that for some part the corporation had claimed and set up, but as the complainant charged without any just or legal warrant, that the will of Haberdinck contained a clause devising to the corporation an estate in fee simple in all the lands which he held in the Shoemaker’s Field. The complainant then set forth the commencement of two ejectment suits for the recovery of a part of the premises in dispute; that in such suits he was nonsuited for the want of sufficient proof—the officers of the corporation refusing to foe sworn or to furnish him with the evidence in their possession, or to show him the original will or to admit the correctness of the record thereof in the office of the surrogate of New-York; and that he had applied to the officers of the corporation for an inspection of the original will and of the leases and the assignments thereof; and that they refused to allow such inspection. And the complainant prayed that' the corporation, and its officers who were made defendants in the suit, might answer the allegations in the bill, and might produce and exhibit for his inspection and the inspection of his attorneys, solicitors, and witnesses, &c. the original will of Haberdinck, and the leases and the assignments, and all leases, deeds, muniments and evidences of title relating to the lands in the Shoemaker’s Field executed by or derived from him; and for a discovery and account of the rents and profits of the premises for every year since the corporation went into possession thereof; that the said will might be established by the decree of this court, that the complainant’s rights in the premises might be established ; that the corporation might account to the complainant, and to the other persons interested under the residuary devise contained in the will, for the rents and profits of the premises; •and for general relief.

      P. A. Jay & B. F. Butler, for the complainants.
    Where a defendant prevents the complainant’s establishing his title at law by retaining the deeds on which the title is founded, equity will compel their delivery. (Jer. Eq. Juris. 416. 1 Ves. jun. 160. 2 Id. 459.) The complanaint was not bound to show that fhe property in question was embraced by the residuary clause. There are many cases where the devise failing, that the premises devised go to the residuary devisee. As in case of a devise to a monk. (13 East, 526. Perkins, § 566, 567.) If the general rule is with us, and the defendants claim under an exception, they must show the exception. We say we have a right under the will. The defendants must show we have not. (1 Paige’s

      Rep. 506.) We have exhausted our remedies at law. We come here for discovery as well as relief. We have not set out the will because we cannot obtain' a true copy. (7 Cowen, 323. 6 Wendell, 232, 233. 8 Id. 181. 5 Pick. 528.) Whether the heir is entitled in preference to the residuary devisee, will depend upon the intent of the testator. (Salk. 239. 1 Leon. 251. 2 Vent. 285. Comp. 43. 9 Mad. 123. 13 East, 826. Cowp. 299. 11 East, 322. 3 Maul. & Sel. 300. 2 Vern. 690. 3 Atk. 486. 3 Ray. 1325. 1 Taunt. 259. 4 Ves. 708. Talbot's cases, 157. Cowp. 808. 2 Wm. Black. Rep. 736.) From these cases it appears that where the devise is void at the time of making the will, and it appears that the testator intended to dispose of all his property, the residuary devisee will take. (McCartee v. Orphan Asylum, 9 Cowen, 437.) The devise to the defendants was void under the statute of wills. The defendants at the date of the will could not take by devise. The residuary clause in this will is very comprehensive. Under it the residuary devisee will take in preference to the heir.

      D. Lord, jr. & G. Wood, for the defendants.
    The title of the complainant, as alleged in the bill, is derived under a devise of the rest of the temporal estate, real and personal, of John Haberdinck. But the bill does not show the estate in question to be residuary estate. The complainant claiming under the will as a residuary devisee, and appearing by the bill of complaint to be conusant of the contents of the will, was bound to set forth the substance of the will, that the court might see whether his title as residuary devisee extended to the lands in question. The allegation that the original will is in the hands of the defendants, if it may excuse the offer to produce it, and may relieve the complainant as to the mode of its proof, does not excuse the necessity of shewing its substance, there being no allegation of ignorance thereof. The allegation of the complainant that John Haberdinck, by his will, on which the complainant founds his title, made no valid or effectual disposition of the lands, is not sufficient to show title in a residuary devisee to the same; because, 1. It is a confused allegation of matter of law, without any allegation of the facts on which the matter of law depends, and a defendant could not safely be required to answer such an allegation; 2. It admits, as a negative pregnant, that the lands in question were devised, and assumes that the residuary devisee takes land devised where the devise is void or ineffectual; whereas the heir at law takes all such lands. (4 Paige’s Rep. 116.) All devises of land prior to 1830 are specific, whether residuary devises or others, and refer to the actual pointing out of the lands by the will at its date as included in particular or general devises. The residuary devise set forth, contains an express exception of the lands “ above bequeathed and disposed of,” and the bill does not show what they are. The allegation that the defendants entered under some title subordinate to the aforesaid title of the complainant does not aid the bill, because it is a blind allegation of matter of law, not averring any entry as tenant or by the license of the residuary devisees. The only entry specifically averred is under assignments of leases made by Haberdinck himself; or under title derived from llaberdinck, subordinate to the said title of the residuary devisees, which is no title. The allegations that the estates devised to the defendants were on condition, and that those conditions have been broken, do not give the complainant any rights; because, 1. The devise of the residue having expressly excepted the previous lands disposed of in the will, a residuary devisee could not claim for a condition broken, such condition not being a conditional limitation. 2. The derivative title of the complainant from the original residuary devisee is by devise. But the right to enter on an estate in fee simple for condition broken is not devisable ; the secondary devisor not being actually, nor (until the previous estate be defeated by entry) legally seized or entitled within the statute of wills. (2 Vesey, sen. 420.) 3. The claim to an account for surplus rents and profits is liable to the same objections ; and this right of the complainant depending upon a condition going to the whole estate, cannot be put forward unless a full breach of conditiombe alleged.
   The Chancellor.

The bill in this case has been framed with much ingenuity and skill, for the purpose of obtaining from the corporation and its officers a discovery of its title to the property in question, and the defects, if any, which exist in that title; and without disclosing the facts which the counsel for the corporation suppose is a fatal defect in the complainant’s own title under the residuary clause of Haberdinck’s will. The residuary clause of the will as stated by the complainant, however, refers to a portion of the testator’s property which had been previously bequeathed and disposed of. The complainant, therefore, was bound to show that such previous disposition did not embrace the property in question, in the Shoemaker’s Field; unless such a presumption is necessarily excluded by the averment that the testator had not in the previous part of his will made any valid or effectual disposition of the premises in question. The rules of pleading in this court require that the complainant should show upon the face of his bill that he has what is prima facie a perfect title in himself, before he can call upon the adverse party to disclose his title to the property in controversy, or. to disclose under what claim of title he holds such property. It is not alleged by the complainant that he is not perfectly apprised of the contents of the will of Haberdinck. And he probably could not make such an allegation with truth ; as it appears from the bill itself that the will was proved and recorded, as a will of personal estate, in the probate office in the city of New York; which record still remains in the surrogate’s office. (See 2 R. S. 59, § 20.) The ground of complaint is that the defendants will not furnish the means to the complainant of proving the execution of the original will, and admit that they have in their possession or under their control the will of which the record in the surrogate’s office is a true copy.

If the residuary devisees were not entitled to the premises in question under this residuary clause, whatever actual disposition may have been made of such premises in the previous part of the will which ultimately proved to be invalid and ineffectual to give the estate to the particular devisee, the complainant has no claim either to discovery or relief. In other words, if any ^disposition of the Shoemaker’s Field lands could have been made by this will which would have the legal effect to prevent those lands from passing to the residuary devisees under the clause which is set out in the bill, but which might still have been void and ineffectual as a devise to pass the lands to the particular devisee, the complainant was bound to set out that part of the will, to enable the court to determine the question whether there was an interest in the lands undisposed of which would pass to the residuary devisees instead of resulting to the heirs at law of the testator as property undisposed of by the will, upon the events which had occurred. And I think a state of facts may fairly be presumed, consistently with the allegations in this bill, that would prevent these lands from passing under this residuary clause, although no valid and effectual disposition had been made which could have the legal effect to prevent the lands from descending to the heirs at law of the testator at his death. The land may have been given, in the previous part of the will, to a devisee who was in existence at the time the will was executed but who may have died before the testator; or to a devisee who was dead at the time of the execution of the will, but the fact of whose death may have been unknown to him, or it may have been given directly to a corporation which was incapable of receiving a devise of the legal title to real estate. In either of these cases, and I have no doubt from the bill of the complainant that one of them was actually the case in relation to this will, there would not have been any valid or effectual disposition of these lands, or of any interest therein to such devisee. And yet in one, if not in all of these cases, the land thus ineffectually devised would not have passed to the residuary devisees, but it would have descended to the heirs of the testator, if he had any heirs capable of taking the estate ; and if he had not, it would have escheated.

A bequest of personal property, or of chattels real which in cases of intestacy belong to the next of kin and do not descend to the heir at law, always refers to the state of the property at the testator’s death. Hence it is perfectly well settled that a general residuary bequest of the personalty includes every thing which, at the testator’s death, is not legally and effectually, as well as in terms, otherwise disposed of by the will. The general residuary clause, therefore, not only embraces reversionary and contingent interests in the personal estate not fully and completely covered by other parts of the will, and which the testator does not attempt to dispose of, but it likewise comprehends any property or interests therein which is in terms bequeathed by other clauses in the will, but which for any reason eventually falls into the general residue.. It of course includes legacies and bequests which become lapsed by events subsequent to the making of the will; and also those which were originally void either on account of the illegality of the disposition which the testator attempted to make of his property, or because it was impossible, for any other cause, that the bequest should take effect as he intended it. The case of Brown v. Higgs, (15 Ves. Rep. 709,) cited upon the argument by the complainant’s counsel, was, so far as related to the lapsed bequest, decided upon this principle ; as the subject of the bequest in that case was a leasehold and not a freehold estate.

It has' also been finally settled in England, although some doubt, perhaps, has been thrown upon the question by some of the decisions in this country, that a residuary devise of real estate, or of all the testators estate not before disposed of in his will, carries with it not only, the real estate in which no interest is devised in the previous part of the will, but also every reversionary and contingent interest which, in the events contemplated by the testator as apparent from the will itself, is not wholly and absolutely disposed of, and which would be a proper subject of devise consistently with the declared intent of the testator. And most of the cases cited and relied upon by the complainant’s counsel were decided upon this principle.

Thus in Hopewell v. Ackland, (1 Salk. 239,) where by the previous clause of the will all the testator’s lands, tenements and hereditaments were devised to A. without words of perpetuity, which gave an estate for life only to the devisee, leaving the reversion undisposed of, it was held that a residuary devise of whatever else the testator had not before disposed of, carried the reversion in fee of the same lands to A. who was the residuary devisee. And the cases of Doe v. Weatherby, (11 East’s Rep. 322,) Wheeler v. Walroone, (Alleyn, 28,) Willows v. Lydcot, (2 Vent. 285,) Hogan v. Jackson, (Cowp. Rep. 299,) Atkyns v. Atkyns, (Id. 808,) and Ridout v. Pain, (3 Atk. 485,) were also cases of reversions which the testator had not attempted to dispose of in the previous part of the will; and which, for that reason, were held to pass under the residuary clause. In Goodtitle v. Knott, (Cowp. 43,) the real estate was devised for the payment of debts, only in case the personalty should prove insufficient. And as there was sufficient personal estate for that purpose, the estate, which in that event the testator never intended to devise to his executors, was very properly held to pass under the residuary devise of “ all the rest, residue and remainder of all his real and personal estate,” to his wife ; as property not before disposed of by the will, The case of Hayden v. The Inhabitants of Stoughton, (5 Pick. 528,) also cited by the complainant’s counsel, was correctly decided upon the same principle ; the testator having devised a contingent fee in the property to the defendant, leaving the estate undisposed of, except by the residuary clause of the will, in case the condition of the devise was not performed. The specific devise in that case did not fail in consequence of any incapacity of the devisees to take the estate intended for them by the testator ; but from their neglect to perform the condition upon which the devise was made. The contingent estate, therefore, which was properly held to pass to the residuary devisee, was one that the testator must have had in contemplation, as undisposed of by the previous clause of the will at the time such residuary clause was framed ; and which estate he intended should go tó his wife, the residuary devisee, in the event which occcurred. It is true Mr. Justice Putnam, in delivering the opinion of the court in that case, supposes that the same principle is applicable to a case where at the time of making the will it is impossible for an absolute and unconditional devise of real estate in fee simple to take effect as the testator intends it, although that fact is unknown to him at the’ time of making his will: as, for instance, a devise of a part of the testator’s real estate to a devisee who is afterwards ascertained to have been dead at the date of the will; or a devise in fee which the testator supposed to be valid and effectual at that time, but which turns out to have been illegal and void. This part of the opinion, however, like that in Crane v. Crane, (2 Root's Rep. 489,) was entirely obiter; not being called for by the facts of the case then under consideration. And I observe in a subsequent case before the same court, (Brigham v. Shattuck, 10 Pick. Rep. 309,) that Chief Justice Shaw, although he fully concurs in the correctness of the decision that a contingent or reversionary interest in real property, which is not disposed of by the terms of the will as a specific devise, will pass by the residuary clause, carefully avoids the use of any expression which might be considered as sanctioning the obiter dicta of Putnam J., in Hayden v. Stoughton, as to the effect of the residuary clause upon an interest in real estate absolutely devised by a previous clause of the will, but which devise is void or ineffectual on account of the incapacity of the devisee to take the property according to the intention of the testator at the date of the will. That question, which is of the highest importance to the complainant in this case, I shall presently proceed to consider. The rule as to reversionary and contingent interests not previously devised, as now settled in England, appears to be, that a general residuary clause will carry all such interests to the residuary devisee, unless the will contains special indications of a contrary intention on the part of the testator. In other words, the legal presumption is that the residuary clause was intended to embrace such contingent and reversionary interests, in the absence of any other evidence of the testator’s intention appearing upon the will itself when taken in connection with the situation of the testator’s property and family at the date of the will. And taking the rule with this qualification I cannot say that the decisions in this country, to which I referred as having thrown some doubt on the question, are directly in conflict with the rule as now settled In the English courts. (See Newkirk v. Newkirk, 2 Caines’ Rep. 345. Den v. Mills, 1 Car. Law Rep. 535. Kennon v. McRoberts, 1 Wash. Rep. 97. Horde v. McRoberts, 1 Call’s Rep. 337. James v. James, 4 Paige’s Rep. 45.)

The distinction between a lapsed devise of real estate and a lapsed legacy of the personalty, as to the rights of the residuary devisee and legatee, is now fully recognized. The question first arose in the court of king’s bench, in the case of Goodright v. Opie, (8 Mod. Rep. 123,) about the time of the making of the will under which the complainant claims in the present suit. But the case was not then decided ; two of the judges being of opinion that the lands attempted to be disposed of by the lapsed devise descended to the heir at law; and the other two, Eyre and Fortescue Aland, holding that, as in the event which had occurred there was no valid or effectual disposition of the lands embraced in the specific devise which had become lapsed by the death of the devisee in the lifetime of the testator, those lands were devised to the defendants who were the residuary devisees. The question, however, was decided in favor of the heir, and against the residuary devisee, in the case of Wright v. Hall, (Fortesc. Rep. 182,) in the court of common pleas, in 1724, by Lord King and his associates a few days before he received the great seal. And the question again arose and was decided in the same way, in 1728, in the case of Roe v. Fludd, (Fortesc. 184;) Eyre and Fortes-cue Aland, who had formerly entertained a different opinion, having then been transferred to the common pleas, and concurring in the decision^ The same question was again raised in the case of Doe v. Underdown, (Willes’ Rep. 293,) thirteen years afterwards, while Ch. J. Willes presided in the court of common pleas. It was examined by that distinguished judge with his usual ability, and was again decided in conformity with the previous decisions. Since that time the question does not appear to have been raised in favor of the claim of the residuary devisee to the benefit of a lapsed devise. And I confess I can see no material difference between devises of that description and those which are void at the time of making the will, on account of the incapacity of the devisee to take the estate which the testator supposes he is bestowing upon the particular devisee, and has, therefore, no intention of giving to the residuary devisee of the rest of his estate. The right of the heir at law does not in either case depend upon the intent of the testator to give him that part of the estate; but upon the principle that the heir is entitled to every part of the estate which the testator has not shown a clear intention of giving to some other person who, in the event that has occurred, is capable of taking the estate thus intended for him by the testator. As the testator is presumed to be inops consilii at the time of making his will, if he devises an absolute fee in a portion of his estate to a person who happens to be dead at the time, or to a corporation which is destitute of a legal capacity to take lands by a direct devise, there appears to be as strong evidence of the non-existence of any intention to have that portion of the estate pass to another person under the devise of the residue of the estate, as if he had devised the same portion of the estate to a person who was then capable of taking, but who might become incapable by death during the lifetime of the testator. I cannot see that in either case there is the slightest indication of an intention on the part of the testator to give to the residuary devisee that portion of the estate which he believed he had just before disposed of absolutely to another; and which, for that reason, he has excepted from the general residuary devise, by the description of property therein before devised or disposed of. The right of the heir devolving upon him by operation of law, cannot be impaired by vague surmises of what the testator would or ought to have done if he had foreseen that the disposition he had made of his estate might be declared invalid or ineffectual. An heir can only be disinherited by express words or necessary implication, As a different opinion, however, appears to have been entertained by one at least of the judges of a very respectable court in this country, it may be proper to review the leading cases on this subject.

The earliest case I have been able to find is Bevel v. French, referred to by the counsel upon the argument of Sherwood v. Normes, in 1589, (1 Leon. 250.) And if the counsel was right in supposing that such a decision had been made as he there stated, it shows that some court had decided, at that early day, that the heir at law might be excluded, for the benefit of a residuary devisee, to whom the testator did not intend to give the property unless it was in the character of a trustee for the objects of the former charitable devise which was void for uncertainty. This case, however, cannot be relied on as authority, as it does not appear by what court it was decided or what were the particular terms of the devise. All that appears from the statement of the case is, that it was decided contrary to the intention of the testator. It was in that view only that the decision was referred to there. And in the language of the court in Wright v. Howe, “it ought to be well considered” before it is followed as a precedent. It is evident also from the decision in this last mentioned case, to which I have before referred under the name of Wright y. Hall, that the case of Bevet v. French was not considered as an authority which could be relied on.

Then came the case of Cruise v. Barley, before Sir Joseph Jekyel, in 1727, (3 P. Wms. 19,) in which it was decided that a legacy out of the proceeds of real estate, which legacy failed by the death of the legatee before it became vested, belonged to the heir at law instead of the residuary legatees of the fund. This was followed by the two cases of Roe v. Fludd and Doe v. Underdown, which I have before stated. Then followed the case of Arnold v. Chapman, before Lord Hardwick, in 1748, (1 Ves. sen. 108,) which arose upon the statute of mortmain, passed in 1735, and it was there held that the devisee of real estate, upon condition of paying £1000 to the executors, which they were directed to appropriate to a charitable purpose void by the statute, was not entitled to the land discharged of the payment; but that the object of the charitable devise having failed, the £1000 resulted to the heir at law as a portion carved out of the real estate, and not legally disposed of by the will. The case of Durour v. Motteaux, (1 Ves. sen. 321,) came before the same distinguished judge the next year. The will in that case, which is more correctly stated in a note to the case of Jones v. Mitchell, (2 Sim. & Stu. 290,) directed all the testator’s real and personal estate to be converted into money; which in a subsequent part of the will he denominated his personal estate. And he directed the same, after the payment of debts and legacies, to be invested and the income to be applied to certain persons for life with the right of survivor-ship, and that, after the decease of the survivor, the residue of the principal of the fund should be equally divided among their children. Among the legacies given out of the principal of this mixed fund was one of £1200 for charities to be invested in real estate, which direction of the testator was void under the statute; and the question arose as to who should have the benefit of the charity legacy, the heir at law or the residuary legatees.- Lord Hardwick decreed in favor of the latter upon the ground that the testator intended to consider the whole as personal property; and that it must therefore go to the residuary legatees as in the ordinary case' of a residuary bequest of personal estate. Although the more modern cases in England appear to be in conflict with this decision', even on the ground upon which his lordship bases his decree, it is very evident he did not intend to decide that in the ordinary case of a residuary devise of the testator’s real estate not before disposed of by the will, the residuary devisee would take particular portions of the estate which the testator had devised to other persons, although the disposition thereof which he had attempted to make was void or ineffectual. On the contrary he says, in terms, that it is not necessary to enter into that question, as to which there had been a difference of opinion, but that the last decision had been in favor of the heir at law; alluding unquestionably to the difference of opinion which had once existed between the judges of the court of king’s bench in Goodnight v. Opie, and to the then recent decision of the court of common pleas in Doe v. Underdown, in favor of the heir at law as against the residuary devisee.

The case of Jackson v. Hurlock, (2 Eden’s Rep. 263,) came before Lord Northington fifteen years afterwards; in which case the question arose whether a void charge which the testator had made upon an estate previously devised to others was to be raised for the benefit of the heir at law, or should sink into the estate for the benefit of the devisee, and the decision was in favor of the latter. This was not the main question in the case, and we may suppose that but little thought had been bestowed upon it from the fact stated in the report of the case by Ambler, that when his lordship’s decision was pronounced upon the other questions, he had forgotton that any such question was to be decided in the cause. But when reminded of it by the talented but unfortunate Charles York, afterwards Lord Chancellor Morden, who was counsel in the cause, he said, “ I am very clear that the void legacies sink into the estate for the benefit of the devisee.” (Ambl. Rep. 495.) I think, however, the decision was right under the particular circumstances of that case.

In the case of Gravenor v. Hallum, which came before Lord Camden, in 1767, three yeafs afterwards, the question arose between the heir at law and the residuary legatee of the proceeds of real estate directed to be sold ; the testator having given certain legacies out of the proceeds which were void by the statute, and the decision was in favor of the claim of the heir at law. (2 Blunt’s Amb. 645.) In the reasons of the chancellor for this decision, as found in Sergeant Hill’s manuscripts, he says as to this part of the case, “ with regard to the distinction betwixt a devise of the residue of real and of personal estate, the ground upon which it has been determined that the latter shall take in all lapsed legacies is that personalty is fluctuating. The words rest and residue exclude the antecedent gifts in the natural way of construing a will; but it is holden otherwise. The courts of law, however, have taken a different way in real estate for the benefit of the heir at law, whom neither those courts nor a court of equity will disinherit without sufficient words. 1 should think it too nice a distinction between a legacy becoming void ■ ah initio and afterwards. The rule is this : where, from the general intention of the testator, the residuary legatees shall not take because by the penning of the will thére is a less thing given to them and the gift to the legatees is narrowed, the court will favor the heir at law.” And in the case of Smith v. Saunders, (2 W. Black. Rep. 736.) decided in the court of common pleas in 1770, by C. J. De Grey and his associates, it was held that a residuary devise of all the testator’s lands not therein before devised would not carry to the residuary devisee a reversion which the testator supposed he had disposed of by his will; but which disposition was void on the ground that the heir at law could not take by devise an estate which would have descended to him by operation of law if the devise had not been made. In this case De Grey, C. J., says: “ The whole is a question of intention, and you can never infer intention from a sweeping residuary clause.” And Blackstone, J., says “ residue and remainder are relative expressions, and must refer to what had been before devised. Whether the devise of the reversion to his right heirs could, in point of law, take effect or not it is in fact devised. And by such devise defacto it is, as Lord Hardwick expresses it, excepted out of the general residuary clause.”

Such, therefore, was the settled law of England at the time of the revolution, in regard to this question; and such would be the law in this state, even if subsequent decisions had changed the rule in that country so as to give to the residuary devisee every estate or interest of the testator of which he had not made a valid and effectual disposition by the other provisions of the will. It will be found, however, that instead of changing the rule the cases in England since the revolution have been, with one or two exceptions, in accordance with the rule as settled by the decisions previous to that time. The case of Hutchinson v. Hammond, (3 Bro. C. C. 128,) came before Mr. Justice Buller, sitting for the lord chancellor, in 1790. It was the case of a void devise of a part of the fund to be raised by a sale of real estate. The legacy had been given by the original will, but it was void on account of the death of the legatee before the republication of the will by a subsequent codicil; that fact being known to the testator but not noticed by him in the codicil. And the amount of the legacy was adjudged to belong to the heir and not to the residuary legatee of the fund. The cause was afterwards reheard before Lord Thurlow, who at first gave a clear and decisive opinion against the claim of the heir, upon the ground that the testator had intended to consider the fund as personal estate. But upon a re-argument he changed his opinion and finally-decided the case in conformity with the previous decision, against the residuary legatee ; and the decree of Mr. Justice Buller was affirmed. In Collins v. Wakeman, before Lord Rosslyn, in 1795, (2 Ves. jun. 683,) the testator devised his real estate to be sold; and the executors and trustees, among other things, were directed to pay out of the proceeds of the same £1000 according to such instructions as he might leave in writing. And the residue was devised to Wakeman, the defendant, by a general clause as broad as that used by Haberdinck in his will, now under consideration. But there being no valid disposition of the £1000, the testator having left no instructions in writing relative thereto, it was decided that it belonged to the heir at law, and not to the residuary legatee, as an interest in the proceeds of real estate undisposed of by the will; although the testator had in terms directed that the proceeds of the sale should be considered as personal estate-.

Then came the case of Kennell v. Abbott, before Lord Alvanley, the master of the rolls, in 1799, (4 Ves. Rep 800 ;) in which the testatrix having power to dispose of her separate estate had given to her supposed husband a part of the proceeds of a copyhold estate and of her leasehold property. And the legacy to the supposed husband being void, on the ground that he had imposed himself on the testatrix when he had another wife living, the amount of the legacy was decreed to the residuary legatee upon the ground that the testatrix had made the whole of this mixed fund personal estate by her Will. This case-, it will be seen, was decided in direct hostility to the decision of Lord Rosslyn in the previous case of Collins v. Wakeman; in which a positive direction to consider the proceeds of the sale as personal estate was held insufficient to carry the void legacy to the residuary legatee. But the master of the rolls did not even intimate an opinion that the residuary devisee could have taken under the residuary clause if the fund undisposed of was not considered as personal estate. In the subsequent case, however, of Doe v. Sheffield, which came before the court of kings bench in 1811, (13 East’s Rep. 526,) although the final decision of the court was placed upon another ground, all the judges concurred in the opinion that a residuary devise of all the testator’s estate undisposed of would give to the residuary devisee a portion of the estate which was previously devised to a person who was dead at the time of the execution of the will. If the authority of that case had been subsequently recognized it would certainly have changed the strong current of decisions, in favor of the claims of the heir at law in such' cases, which had existed for nearly a century. But its effect was entirely destroyed by a decision of the house of lords the other way three or four years afterwards. It may, therefore, be considered as a solitary case of the expression of an opinion by the judges of a court, upon a point not necessary to the decision of thé cause then under consideration, in opposition to the generally received opinion of the profession in that country, and without referring to a single adjudged case which had the least bearing upon the question.

In the case of Gibbs v. Rumsey, (2 Ves. & B. 294,) which came before Sir Wm. Grant only two years afterwards, no notice whatever is taken of this decision; although if considered as good law it must have changed the result in that case as to the void legacies for charitable purposes which were payable out of the proceeds of real estate; as to which legacies his honor said it was clear that they belonged to the heir at law, and did not go either to the residuary legatee of the proceeds of the real estate and of the personalty, or to the next of kin.

Then followed- the case of Tregonwell v. Sydenham, before the house of lords, (3 Dow’s Rep. 194,) which was argued in 1814 in the presence of those two distinguished chancellors, Lord Redesdale and Lord Eldon, and decided in the.following year after a very full consideration. And it was there held, reversing the decree of the court of ex-' chequer, that a portion carved out of a trust,term for purposes which were void in law, so that the persons for whose use the portion was intended could not take the same, did not go to the devisee of the residue of the estate, or sink into the estate for his benefit ; but that the same must be raised for the benefit of the heir, as an interest in real estate resulting to him by the failure of the specific devise thereof. This case was followed by that of Jones v. Mitchell, before the vice chancellor, Sir John Leach, in 1823, (1 Sim. & Stu. 290;) in which it was held that a void legacy, payable out of the proceeds of real estate, belonged to the heir at law and did not go to the residuary legatee of the fund, who was also the legatee of all the testator’s other estate. The vice chancellor in delivering his judgment in that case says—“ The will, as to personal estate, speaks at the time of the death of the testator, and the residuary legatee takes not only what was undisposed of by the expressions of the will, but that which becomes undisposed of at the death by disappointment of the intentions of the will. It is otherwise as to the residuary devisee of real estate or of the price of real estate. As to him the will speaks only at the time of making it, and he can take nothing but what was at that time intended for him.”

The last case upon this subject to be found in the English reports is that of Cook v. The Stationers’ Company, which came before the same distinguished equity judge, as master of the rolls, in 1831, (3 Myl. & Keen, 262.) And he there lays down this rule for the purpose of ascertaining the intention of the testator where the residuary devise is not of the produce but of the corpus of real estate ; and where the intention of the testator as to a previous specific devise is defeated: 1st. If the devise to a particular person, or for a particular purpose, is to be considered as intended by the testator to be an exception from the gift to the residuary devisee, the heir takes the benefit of the failure. 2d. If it is to be considered as only a charge upon the estate devised and not an exception from the gift, the devisee will be entitled to the failure. And considering the void legacy in the case then before him as coming within the last of these rules, he decreed accordingly. Testing the residuary clause in Haberdinck’s will by these rules it is very' evident that any ^nva^ or ineffectual devise of the property in controversy which the testator had made, to this corporation or otherwise, in the previous part of the will, must belong to the heir at law, or to the crown by escheat if there was no heir at law capable of talcing; as it is in terms excepted from the- residuary devise. -

The only cases to be found in the American reports where this question has’ directly arisen,, unless there are some which have eluded my search, are Lingan v. Carrol, decided in Maryland in 1793, (3 Har. & McHen. Rep. 333 ;) and the recent case of Greene v. Dennis, in the supreme court of errors in Connecticut, (6 Conn. Rep. 292.) And in both of these cases the decision was against the claim of the residuary devisee. In the first case the testator devised his real estate in Maryland and the reversion of certain real estate in Pennsylvania after the death of his" wife, for the benefit of a charity; which devise was after-wards adjudged to be void ; and the residue of his estate,' real and personal, not therein before disposed of, to the children of Mrs. Lingan and Mrs. Wood. And a bill was filed by the residuary devisees for an account of the rents and' profits of the estate, which had been claimed by the heir at, law as undisposed of by the will. Chancellor Hanson declared and decreed that the law being settled, that in case of a lapsed devise the land should go to the heir and not to the residuary devisee, and there being no solid distinction between the case of a lapsed devise and a .devise void by thé rules of law, as it was manifest in both cases that the testator did not intend the land defacto devised to go to the residuary devisees, the complainant’s bill contained no matter of equity. He accordingly dismissed the same •, and his decree was afterwards affirmed by the court of appeals. In the Connecticut case there-, was a devise of a particular farm to the. yearly meeting of Quakers, with a residuary devise to Green of all the rest and residue of the testator’s estate of what kind or ’value it might be, or wherever found, not therein otherwise disposed of. And the devise of the farm being declared void,-' the court also decided that the farm belonged to the heir at law, and not to the residuary devisee. See also the dictum of Carr, J. in Rowlet v. Rowlet, (5 Leigh’s Rep. 26.)

The result at which I have arrived, upon a full examination of the subject, is that there is not sufficient appearing upon the complainant’s bill to show that the residuary devisees of Haberdinclc ever had any legal or equitable light to the premises in controversy in this cause. And that if there was not any previous devise or disposition of the lands in the Shoemaker’s Field in fact by the will of Haberdinclc, the complainant should have so stated it in his bill ; or he should have set out the substance of the whole will, as it appears from the record thereof in the surrogate’s office, so that the court might see whether the residuary legatee under whom he claims had some right or interest in the property under the will.

The suggestion in the bill that if the premises were devised to the corporation there is a surplus of rents and profits beyond what was necessary to satisfy the object of the devise amounts to nothing, as the complainant insists there was no valid or effectual devise to the corporation. And the decision of the court of dernier resort in the case of McCartee v. The Orphan Asylum Society, (9 Cowen, 437,) conclusively settles the question that the corporation could not take the estate by devise. If there was therefore a devise in form to the corporation for the objects or upon the trusts stated, or rather suggested in the bill, the devise was wholly void; so that there could have been no resulting trust of a surplus of rents and profits for the benefit of the residuary devisees. Even if there was a valid devise to the corporation, it does not follow of course that the surplus rents and profits arising from the increased value of the property belong to the descendants of the residuary devisees. (See Attorney General v. Wilson, 3 Myl. & Keen, 372; The Same v. Brazen Nose College, 8 Bligh’s Rep. N. S. 377.)

The demurrer is well taken and must be allowed nunc pro tunc as of the time of the argument; one of the defendants having since died.

       See Lessee of Ferguson v. Hedges, 1 Harrington’s Rep. 524.


text:
    Murray vs. Graham and others.
    1837. August 1.
    The purchaser of lots in the city of New-York bounded upon one of the public streets, as laid down upon the commissioners’ map and plan of the city, is not liable to be assessed for the purpose of compensating the vendor for the lands afterwards taken by the corporation for the purpose of opening such street. But he must insist upon his right of exemption from assessment forthat purpose before the commissioners of estimate and assessment, and if they improperly decide against him he must oppose the confirmation of their report by the supreme court.
    Where a party who is improperly assessed for the opening of a street in the city of New-York has an adequate remedy at law against such assessment, by opposing the confirmation of the report of the commissioners, if he neglects to avail himself of such remedy, the court of chancery has no jurisdiction to grant him relief.
    Errors of the commissioners of estimate and assessment, upon the opening of streets in the city of New-York, cannot be corrected by a collateral suit in chancery, except in cases where no adequate relief could be had in the mode pointed out and prescribed by the statute.
    Where it is perfectly apparent from the complainant’s bill that he is neither entitled to relief or discovery as against one of the defendants, such defendant should demur to the bill in the first instance. And if he puts in an answer unnecessarily, where it is clear that a demurrer to the whole bill may be sustained upon the merits, the court may refuse to allow him the extra costs of such answer.
    The bill in this cause was filed by the complainant against C. M. Graham, E. Barnes and the corporation of New-York, to be relieved from an assessment upon the complainant’s property, for the expense of opening Twelfth street in front of his lots. From the pleadings and proofs it appeared that the defendant Graham was formerly the owner of the complainant’s lots which were assessed, together with the land in Twelfth street in front of the same ; the legal title to the whole of which was in the defendant Barnes as the trustee of Graham for the purpose of sale. The complainant purchased the lots of Graham, and the same were conveyed to him by the trustee. In the negotiation for sale, as well as in the deeds to the complainant, express reference was made to a map on which Twelfth street was laid down as ruuning through the lands of Graham; and these lots were laid down on the map and described in the deeds as fronting on that street. Shortly after this purchase, the corporation of New-York instituted proceedings to open Twelfth street, and the commissioners of estimate and assessment allowed to Barnes, the trustee, the full value of the lands taken for the street. And the amount thus allowed was assessed against the complainant, and other purchasers who were bounded on the street, as a benefit which their lots would receive by the opening of the street. The complainant, although he objected to this assessment before the commissioners, and insisted that he was entitled to have the street opened through the land of Graham adjoining his lots free from any charge for the price of the land thus taken, suffered the report to be confirmed by the supreme court without appearing to oppose the same. The amount allowed for the land taken for the street was paid by the corporation to Barnes, who immediately paid the same over to Graham ; and the corporation were proceeding to collect the assessment upon the complainant’s lots when the bill in this cause was filed. The cause was heard before the vice chancellor of the third circuit, who decreed that the legal title to the land covered by the street was held subject to the right of the complainant to have it kept open as a public street; and that the damages of taking the land by the corporation for that purpose were merely nominal, and a reference was directed to a master to ascertain and report what part of the damages allowed to Barnes by the commissioners of estimate and assessment was for the land in front of the complainant’s lots, and how much was assessed upon those lots ; and the master was directed to compute interest on the amount thus ascertained from the time when the complainant paid the same. All other questions and directions were reserved until the coming in of the master’s report. From this decree the defendant Graham appealed to the chancellor.

      D. Selden & J. Law, for the appellant.

      S. A. Foot & W. Kent, for the complainant.
   The Chancellor.

Since the commencement of this suit it has been conclusively determined by the court of dernier resort in this state, that the grantor of a city lot purporting to be bounded upon a street, by the description thereof in the deed or by reference to a map or city plat, is not entitled to damages for the land which is taken by the corporation for such street, to be assessed as a benefit to the lot of his grantee. There is therefore no doubt as to the complainant’s equity in this case as against the defendant Graham, if he is not concluded by the order of the supreme court confirming the report of the commissioners of estimate and assessment.

The 178th section' of the act to reduce several laws.relating particularly to the city of New-York into one act, (2 R. L. of 1813, p. 409,) makes the confirmation of the report final and conclusive upon the corporation, and also upon the owners, lessees, persons and. parties interested in and entitled to the lands mentioned in the report, and' upon all other persons whomsoever. If the question to be decided here was one which the commissioners of estimate and assessment could not have inquired into and settled, either for want of power, or because no means had been provided by the legislature to compel the attendance of witnesses or to give the complainant the benefit of a discovery of -facts which were exclusively within the knowledge of the adverse party, 1 am not prepared to say that this court would not have the power to arrest the money, which had been inequitably charged upon the complainant’s property, in the hands of the corporation, or to compel the adverse party to return it if he had actually received it before the filing of the bill. No such question, however, is presented by the facts in this case. Here it appears, from the complainant’s own showing) that he was perfectly aware of his legal and equitable rights, which appeared upon the face of his deeds, and that he urged those rights before the commissioners. But they decided against him, being probably misled by the "erroneous decision of the supreme court in the case of Mercer Street, (4 Cowen’s Rep. 542,) The appropriate i*emedy of. the complainant in such a case was to oppose the confirmation of the report in the supreme court, on the ground of this erroneous decision of the commissioners of estimate and assessment. And if that court had decided against him, he should have carried the question for final decision to the court of dernier resort, instead of coming into this court to correct the erroneous decision of the commissioners in a collateral suit. The complainant therefore had an adequate remedy at law, which has been lost by his neglect to defend himself in the proper tribunal; and this court has no jurisdiction to grant the relief asked.

This is not a case of the payment of damages to the wrong person, within the intent and meaning of the Í84th section of the statute; as no damages, other than such as were merely nominal, should have been assessed or paid to any person. Neither is it a case coming within the provisions of the 186th section, as an assessment paid by the complainant which by the agreement of the parties or the law of the land ought to have been paid by the appellant or his trustee. But it is an assessment which ought never to have been made upon the complainant’s property, nor paid by him to the appellant or for his benefit. And even if it came within either of these sections, as the money had been paid to the appellant before the filing of this bill, the appropriate remedy was by a suit at law, and not by a bill in equity. There is no doubt in this case, however, that the appellant, in consequence of the neglect of the complainant to attend to his rights in the appropriate tribunal, has indirectly obtained from the latter a large sum of money which in justice he ought never to have received. And if this court could give relief without overturning the settled principles of law and assuming a jurisdiction which does not belong to it in this case, I should not hesitate to give to the complainant the relief which is contemplated in the decree of the vice chancellor. But as this is a case of an erroneous assessment by the commissioners, in giving to the appellant’s trustee a large sum as damages when the amount should have been merely nominal, if the court of chancery assumes jurisdiction to open and review the decision of the commissioners in this collateral suit, I cannot see what is to prevent the exercise of a similar jurisdiction in every case where the commissioners have proceeded on an erroneous principle in allowing damages to one party and charging them upon the lands of another, whereby the assessment upon the property of the latter is greater in amount than it ought to have been. To correct errors of this description is the appropriate business of the supreme court, upon the application to confirm the report of the commissioners ; and such errors cannot be corrected in a collateral suit in this court, unless some foundation is laid for equitable relief by showing that no relief could have been had in the mode pointed out by the statute. (Turner v. Williams, 10 Wendell, 139.)

The decree of the vice chancellor must therefore be reversed and the bill must be dismissed. But as the appellant has possession of a large sum of money of the complainant’s which he is permitted to retain upon technical grounds merely, I shall not charge the complainant with costs in favor of the appellant or his trustee.

There was no pretence of equity as against the corporation, however, at the time this bill was filed; as it appears from the bill itself that the damages had been paid over to Barnes the trustee previous to that time. And if the corporation had demurred, as it should have done where all the facts necessary for the protection of its rights appeared on the face of the bill, such bill would have been dismissed as to the corporation. (Patterson v. The Corporation of N. Y., 1 Paige's Rep. 114.) The complainant must therefore pay to the solicitor of the corporation such costs as he would have been entitled to upon the allowance of a demurrer to the bill, and no more.