text:
    Jencks and others vs. Alexander and others.
    The power of sale in a mortgage, so far as it relates to the equity of redemption, or the surplus value of the mortgaged premises beyond the amount of the mortgage debt, is a power in trust. And any Collusive arrangement, between the mortgagee and a third person, to execute the power of foreclosure and sale in such a manner as to deprive the owner of the equity of redemption of the benefit intended to be given to him by the statute relative to the notice of sale, or whereby such owner will be deprived of the benefit of a fair competition at the sale, is a fraud upon his rights.
    Where the evidence showed that a mortgagee had fraudulently, and in collusion with a thiid.persbn, foreclosed his mortgage by a statute foreclosure, for the purpose of . enabling the latter to obtain the premises at a price far below their value, and with the intention of defrauding the owners of the equity of redemption, the court of chancery set aside the sale.
    There is no resulting trust in favor of the husband, where he purchases real property ■ and takes the conveyance in the name of his wife. But if the object of such conveyance is to place the property of the husband'beyond the reach of his then existing creditors, there will be a resulting bust, for their benefit, to the extent of their debts.
    In the application of payments which are made before the principal of the debt becomes due, the following rules are to be observed:
    Where tho principal is not due, but the interest is due, the payment must first be applied to pay the interest then due, and the residue towards that part of the principal which will first become due and payable; so as to stop the interest, pro tanto, from the time of such payment.
    But where neither principal nor interest has become due at the time of the payment, the amount paid should be applied to the extinguishment of principal and interest rateably; so as to extinguish a part of the principal, and the interest which has accrued on the part of the principal thus extinguished.
    A mere mistake in computing the amount due upon a bond and mortgage, at the time of the first publication of the notice of sale, upon a statute foreclosure, is not of itself sufficient to vitiate the sale.
    It seems that the notice of sale, upon a statute foreclosure, should state the whole amount which is claimed to be unpaid upon the bond and mortgage, and not merely the amount which has actually become due and payable at the time of the first publication of the notice of sale; and that it is irregular to sell the mortgaged premises subject to the payment of future instalments, without specifying the amount of such instalments.
    Whether the mortgaged premises can be sold, upon a statute foreclosure, subject to the payment of future instalments which are to become due on the bond and mortgage, even if the amount of such future instalments are stated in the notice of sale? Quare.

    This was an appeal by D. Capron, one of the defendants, from a decree of the late vice chancellor of the seventh circuit, setting aside a statute foreclosure of a mortgage, with costs. In 1828, the defendant, Elisha Capron, who was a widower, having two sons by a former wife, intermarried with Sabra Jencks, a maiden lady, who had considerable property; and who died in 1834, without having had any issue. Soon after this marriage, E. Capron became insolvent, having spent the property which came to him by his second wife. In 1831, A. Smith, who had become the purchaser of a farm, upon a mortgage foreclosure, which farm had once belonged to E. Capron, gave to Mrs. Capron a contract to give her the benefit of the future sale of the premises, beyond what he had paid therefor and his expenses and trouble, for her own use; as some compensation for her property which had been received and spent by her husband. On the 24th of August, 1833, the defendant, W. H. Alexander, conveyed to Mrs. Capron, in fee simple, a village lot in Syracuse, and took from her and her husband a mortgage upon the premises, for the purchase money, $650, payable in five equal yearly payments, commencing on the 1st of January, 1834, with interest annually. And on the same day $500 was paid and endorsed upon the mortgage; which payment was a part of the proceeds of the contract made by Smith' for the benefit of Mrs. Capron. On the 14th of September thereafter, a further payment was made upon the mortgage, leaving due thereon, at the death of Mrs. Capron, $147 and the interest from the date of the mortgage. The parents of Mrs. Capron having died previous to 1834, her four brothers and her sister became entitled to her interest in the premises, at her death, as her heirs at law. On the 4th of November, 1835, Alexander commenced proceedings to foreclose the mortgage under the statute, and advertised the premises for sale on the 23d of April, 1836, stating in his notice of sale, that $20,98 was due for interest on the mortgage.... Instead of advertising in a newspaper in the village of Syracuse, where the mortgaged premises were situated, and where the mortgagee and his attorney resided, and where the sale was to be made, the notice of sale was sent to a newspaper at Skaneat-eles, about eighteen miles from Syracuse. On the day appointed for the sale, the premises were put up and sold, subject to the incumbrance of the principal moneys which were thereafter to become due upon the mortgage, and were struck off to C. Bradley, the copartner of the mortgagee, for the nominal sum of $57, no part of which was ever paid by him; although such premises were then worth from twelve to fifteen hundred dol-íais. B. Capron continued in possession, with his two sons, David and Lansing, until June, 1839, when, by an arrangement between Alexander arid E. Capron and his two sons, Bradley conveyed the premises to David Capron, who gave to his father a lease for life of a part thereof.
    In September, previous to the commencement of the proceedings to foreclose the mortgage, Gideon Jencks, one of the heirs at law, called upon the mortgagee to inquire as to the amount due upon the mortgage, but received no intimation that any interest was remaining unpaid, or that the mortgagee intended to proceed to foreclose on account of the non-payment of interest. A few days before the sale, the son of G. Jencks called upon the mortgagee in relation to the payment of the mortgage, and said he was going to Connecticut and would be back in ten days and pay it; when the mortgagee said he should like the money well enough. But Alexander neither told him that he was foreclosing ¡the mortgage, nor gave him any intimation of the fact. Subsequent to the sale, the son of G. Jencks again called upon Alexander, and tendered him the whole amoúnt due and to become due upon the mortgage, and the costs of the alleged foreclosure, but he declined receiving the money. Gideon Jencks died in February, 1838, and in August thereafter, Alfred Jencks, his son and devisee, called upon Alexander and paid him $200, as the whole amount due upon the mortgage; which amount he received. And Alexander acknowledged satisfaction of the mortgage and cancelled the bond given therewith, but still insisted upon the validity of the foreclosure, and subsequently made the arrangement by which Bradley conveyed the premises to the defendant, D. Capron. The bill in this cause was filed, in June, 1839, by the then surviving- brothers and the sister of the decedent, Mrs. Capron, and by A. Jencks, the son and devisee of the deceased brother, charging the above facts, and also charging a fraudulent collusion, between the defendants, to deprive the heirs of Mrs. Capron of the property, by a foreclosure of the mortgage, when nothing was due thereon. The defendants set up, in their answer, that there was an agreement that the two sons of E. Capron should have the premises conveyed to Mrs. Capron, after her death and the death of their father; and that she held the legal title in trust. No legal proof, however, was produced to establish such a claim. The cause was heard upon pleadings and proofs before the vice chancellor.

      G. Lawrence, for the appellant.

      B. Davis Noxon, for the respondents.
   The Chancellor.

The complainants in this case, as the heirs at law of Mrs. Capron, are unquestionably entitled to the premises in controversy, if the mortgage to Alexander was not honestly and fairly, as well as legally, foreclosed. It is not very material to inquire whether the $500 paid on the mortgage, on the day of its date, was the separate and individual property of Mrs. Capron or not. For, by the provisions of the revised statutes, the equitable as well as the legal estate passed to the wife, subject to the marital right to the use and possession thereof by the husband during their joint lives; even if the whole consideration of the purchase was paid by him. There can be no resulting trust in favor of the husband, where he purchases lands and takes a conveyance thereof in the name of his wife. And even if he is insolvent at the time of such purchase, no person can reach the property, in the hands of the wife, except those who were the creditors of the husband at the time of such purchase; or whose debts arose out of some contract or liability of the husband which he had before the purchase made or incurred. (1 R. S. 728, §§ 51, 52.) To make a trust in favor of any other person, in a case of this kind, it is necessary that the trust should be evidenced by a deed or conveyance in writing, and acknowledged by the wife in the usual form; where the trust is not expressed in the conveyance which is taken by the husband in her name. I am also satisfied by the evidence, that the fund which was applied in payment of the $500 upon this bond and mortgage, was considered by all parties as equitably belonging to Mrs. Capron. Although her personal property became the.property of her husband upon the marriage, and was therefore applicable to the payment of his debts, subject to her equitable right to a support out of so much thereof as the husband had not reduced to possession, Smith had a right to- insist that the gift which he made, of an interest in the farm that belonged to him absolutely, should be secured for the benefit of Mrs. Capron; as an equivalent in part for the property which she had brought to her husband by the marriage, and which had been expended in the payment of the debts of the latter. The question then arises whether this. mortgage was properly foreclosed, so as to constitute Bradley a purchaser in good faith, within the true intent and meaning of the eighth section of the title of the revised statutes relative to the foreclosure of mortgages by advertisement. Fór, D. Capron, the appellant, as well 'as his father, had notice of ¿11 the facts which were calculated to invalidate the sale in the hands of Bradley. And if Bradley was not entitled to retain the property as against these complainants, the Caprons, who derived their interests in the premises under and through him, have no better rights.

The mere fact of advertising the mortgaged premises for sale in a paper published in a remote part of the county, certainly would not of itself be sufficient to defeat a statute foreclosure, if there were no other circumstances in this case to show that the proceedings were not conducted in good faith. But the power of sale in a mortgage is a power in trust, so far as relates to the interest of the mortgagor, or of his heirs or assignees, in the equity of redemption, or the surplus value of the mortgaged premises beyond the amount that is due and to become due upon the mortgage; although it is at the same time a beneficial power, to the extent of the interest of the mortgagee in the premises, for the satisfaction of his debt. 'Any collusive arrangement, therefore, between the mortgagee and a third person, so to execute the power of foreclosure and sale, under the statute, as to deprive the owner of the equity of redemption of the benefit intended to be given to him, by the statute, relative to the notice of the sale, or whereby such owner will be deprived of the advantage of a fair competition at the sale, is an act of bad faith on the part of the mortgagee, and a fraud upon the rights of the owners of the equity of redemption. Talcing all the evidence in this case into consideration, it is impossible to wink so hard as not to see that the power of sale was executed in bad faith, under some secret understanding, or implied agreement, between Alexander and his co-defendants, that the property should be brought to a sale in such a manner as to deprivé the heirs at law of $trs, Capron of their rights in thp equity of redemption.

I think the counsel for the complainants is wrong in.supposing that nothing had become due and payable upon tfie mortgage at the time the proceedings to foreclose were instituted. It is true p sum much larger than the two instalments of $130 each, and all the interest upon the residue, had been paid. But the proper application of the payments was to apply them towards the satisfaction of the pripcipal of the debt, at the titne of such payments respectively, after ded ucting from such payments the interest which had then accrued. The payment of the $500, on the day of the date of the rnortgage, being applied in satisfaction of the three first instalments of principal and $110 of the fourth instalment, left $20 of the fourth instalment, and the whole of the fifth instalment still due. And as, by the terms of the bond and mortgage, the interest'on the whole $650 was payable annually, the mortgagee would have been entitled to the annual interest on the $150, which still remained due on the two last instalments, if there had been no subsequent payment. The payment of $3 on the 14th of September, 1833, must be applied towards the fourth instalment of principal, after deducting therefrom the interest on the $3, from the 24th of the preceding August. In other words, where principal is not due, but interest is due, the payment must first be applied to the extinguishment of the interest then due and payable, and the residue to the extinguishment of that part of the principal which will first become due; so as to stop the interest, pro tanto, from the time of such payment. But where neither principal nor interest has become due at the time of the payment, such payment, in the absence of any agreement as to the application, is to be applied to the ex-tinguishment of principal and interest, rateably; according to, the decision of the supreme court in the case of Williams v. Houghtaling, (3 Cowen's Rep. 86.)

In the present case, after both payments had beep, made, there, remained for future payment $17,01 of the fourth instalment* which was to become due on the first of January, 1837, and the whole of the last instalment, which was payable one year thereafter. And the mortgagee was entitled to annual interest upon the $> 147,01, y/hiph thus remained unpaid, to be computed from the date of the mortgage. There was therefore due and payable, at the time pf the commencement of the proceedings to foreclose the mortgage, in November, 1835, $20,58, for two years’ annual ipterest upon the balance of principal which was yet to become due. This was forty cents less than was claimed to be due, in the notice of sale. But a mere mistake in computing the amount due at the time of the first publication of the notice, does not of itself furnish any sufficient ground for setting aside the sale under the statute. The direction in the statute, that the notice of sale should contain a statement of the amount claimed to be due upon the mortgage, was undoubtedly for the purpose of apprizing the owners of the equity of redemption of the extent of the claim of the mortgagee, so that they might not be surprised at the sale, by an unfounded claim for what had in fact been paid previously; and to enable them to apply to this court for relief, in due season, if the amount due copld not be otherwise adjusted between the parties. I am incline^ to think, however, that the true construction of the statute is, that the notice of sale must state the whole amount claimed to be unpaid, upon the mortgage, at the time of the first publication pf the notice of sale; and not merely the amount of the mortgage money which has then become payable. And the sale of the premises, in this case, subject to the payment of future instalments thereafter to become due, and without specifying the amount of such instalments, was wholly unauthorized and irregular. I thipk the fair inference from the testimony is, that the property was put up and sold subject to the payment of future instalments, without stating to the persons who were presept at the sale that all of the principal of the mortgage, except the $147, had been actually paid previous to the notice of sale; thus leaving them to suppose that the three last instalments, none of which, by the terms of the mortgage, were payable until after the 4th of November, 1835, were ¡all unpaid, and that the purchaser would take the title, under the statute foreclosure, subject to the lien thereof. Without deciding the question, therefore, whether a sale subject to the payment of any future instalments is not wholly unauthorized by the power of sale, I think the sale, which was made in this case without specifying the exact amount of the future instalments to which the premises were to be subject in the hands of the purchaser, was calculated to destroy fair competition; and was sufficient to avoid the sale, even if the proceedings in other respects had been conducted in good faith. I am satisfied also, that the notice was published, in a remote part of the county, for the improper and unjustifiable object of preventing such notice from coming to the knowledge of the owners of the equity of redemption, or of persons who would be likely to attend the sale and bid upon the premises. It is true the attorney, who refuses to answer why he published the notice of sale in that particular paper, swears he received no instructions from his client to publish it there. But the client, who employed him to foreclose the mortgage, is still answerable for his acts, which were done for the purpose of preventing a fair competition, to the • same extent as if he had given special directions to that effect. The fact also that Alexander did not intimate to G. Jencks, when he called on him in the fall of 1835, that there was a small balance of interest due, and that he should proceed to foreclose if it was not paid, shows conclusively that the publication of the notice in a remote part of the county was not contrary to his wishes.; and that his attorney had good reason to suppose that any course of proceedings which would be likely to result in a sale of the premises for a mere nominal amount, and without actual notice to the owners cfthe equity of redemption, would not be likely to be disapproved of by the client. Whether A. Jencks, or the defendant Alexander, is the one who has sworn falsely, in relation to the interview in April, 1836, and just before the sale, cannot be determined in this suit. So far, therefore, as the allegations in the bill, on that subject, are denied by the answer, they must go for nothing. Enough, however, appears from the answer itself tti satisfy me that the fact that the mortgage was in a process of foreclosure, and that the premises were to be sold in a few days, was carefully concealed from Jencká, although Alexander had reason to believe, from what then took place, that he was ignorant of the fact. If Alexander had, therefore, been himself the purchaser,, at this sale, I think no court of equity could hesitate to say the s’alé must he set aside, on the ground that he was not a purchaser of the premises in good faith. The pioof also satisfies me that Bradley never intended or expected to purchase the premises for himself. And I have no doubt that he actually purchased /or the benefit of Alexander, and to enable the latter to transfer the title to the Caprons, or to some of them, discharged of the equity of redemption of the heirs at law of Mrs. Cápron. He swears, himself, that he never paid any thing upon his bid, and never, to his knowledge; received the dhed from Alexander, although it appears the deed was actually put upon record a few days after the sale. The weight of evidence, also, is in favor of the sáppositioh that he actually gave back a deed to Alexander, and delivered it to Lawrence; his attorney; for him. Whether such a deed was in fact executed, however; is wholly immaterial tó the question whether Bradley can be Considered as a bona fide purchaser óf this property for a valuable consideration.

Thé decree appealed from must be affirmed; with costs.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Crippen vs. Brown and Chase.
    A retaining fee for counsel is a proper charge, in a suit where counsel, other than the solicitor, is actually retained.
    The charge for counsel’s perusing and signing an answer is proper, although the counsel who performed the service was the solicitor in the cause.
    Where defendants have no conflicting interests, which require protection hy separate ■answers, and where no statement is made in the Answer by one defendant, which Üie oth& defendants believe to he false, and cannot therefore conscientiously swear that they believe it tó be true, if the defendants appear hy the same solicitor, or by solicitors who aie copartners, they must put in a joint answer; and if they sever in their defences, the costs of sepárate answers will be disallowed. • .
    It is ürinecessáry to set blit at length, in ah answer, provisions of the revised statutes, or to annex thereto, as sbhedulfes, copies of a master’s deed, or of a bond and mortgage ; and all charges for the same will be disallowed on taxation.
    A charge for solicitor’s attendance on the register, on entering an appearance of a defendant, is not allowable.
    No charge for engrossing the list of witnesses, or for a notice that it is a list of witnesses, is taxable.
    No charge can be made by a defendant, for subpoenas and subpoenaing Witnesses, for a time When such witnesses could not be examined ; and when„the defendant refused to proceed to an examination because he had not given a regular notice of the examination to the complainant’s solicitor.
    ’The allowance for witnesses’ fees, made by the 8th section of the act of May, 1840 ’concerning costs and fees in courts of law and for other purposes, ektends to wit He'sses in suits and proceedings in the court of chancery.
    The usual affidavit annexed to the bill of costs, that the disbursements charged have been actually and necessarily paid or incurred, is a sufficient verification of the charges for disbursements for witnesses’ fees, unless charges are made for the travel and attendance of witnesses who weire not examined, or there is something to raise a doubt as to the good faith of the charges for such disbursements.
    Where there is any ground for believing that witnesses have been subpoenaed for the mere purpose of swelling the bill of costs against the adverse party, the taxing 'officer ought not to allow fees for attendance and travel of the witnesses, without ‘ári affidavit of the party himself, that he not only deemed the whole number of witnesses charged for material and necessary, but that he had act’üálly paid them the'full amount charged in the bill, for their travel and attendance, previous to the , termination of the suit.
    No charge for an extra affidavit in support of the allowance, claimed ás disbursements for witnesses’ fees, should be taxed; except in those cases where the taxing 'officer deems it proper to require the affidavit of the party that the fées for the travel and attendance of the witnesses', as charged in thé bill, have befen necessarily incurred and actually paid.
    No charge for prospective postage, subsequent to the taxation of costs, can be allowed."
    No prospective disbursements can be allowed, except such as must necéssarily be incurred for the fees of officers which are fixed by law, and the amount of which can be ascertained and deducted from the taxed bill, when the amount of such bill is paid before such prospective services are performed. -
    This was an application, on the part of the complainant, for a re-taxation of the costs of the defendants^ solicitor, upon the dismissal of the complainant’s bill with costs.

      J. V. L. Pruyn, for the complainant.

      Azor Taber, for the defendants.
   The Chancellor.

The retaining fee to counsel, as well as to the solicitor, was properly taxed) as the solicitor swears that counsel other than himself was actually retained in the cause ; and the charge for counsel perusing and signing the answer is also taxable, under the present fee bill) although the counsel whose name alone is affixed was the solicitor in the cause. The decision on this subject, in the case of Rogers v. Rogers, (2 Paige's Rep. 472,) was Under the fee bill of 1818, which made no allowance for this service where it was done by counsel who was the solicitor in the cause. In the preseht fee bill that restriction, which was inserted by Chancellor Kent, in the act of 1818, is left out; so that the solicitor, if he is a counsellor and signs the pleadings as such, is entitled to charge for perusing and signing. But the objection that only One answer was necessary in this case was well taken; and of cotirse only one charge for perusing and signing shoúld have been allowed. The 130th rule directs the taxing officer to disalloik the costs of separate answers of two or more defendants who appear by the same solicitor, or by solicitors who are coparthers, and where such defendants unnecessarily sever in their defences. Here, the claim of the complainant was against both defendants, in relation to a mortgage given to them jointly, arid upon a subsequent agreement made by one of them, in behalf of himself and the other, in relation to the purchase of the property by them, upon the sale under the prior mortgagé; They had, therefore, no conflicting interest as between themselves, which it was necessary to protect by separate answers; nor is it pretended that there is any statement in the answer of either Which his co-defendant believed to be false, so that he could not conscientiously have sworn that he believed the whole ariswer to be true. Separate answers, then, were unnecessary and improper. It was also useless prolixity to set out at length, in the answer, the provisions of the revised statutes relative to usurious contracts, &c. Four folios of the draft, and of the several Copies of the answer and of the engrossment, must be stricken out dri. that ground. And it was also improper, and wh'dlly useless, to annex copies of the master’s deed, and of the bond and mortgage to the defendants, to their answer, as schedules. The statement of the giving of the master’s deed, and of the bond and mortgage, as contained in the body of the answer, was all that was called for by the circumstances of the case. All the charges for engrossing, copying or abbreviating these useless schedules, should have been stricken out by the taxing officer. The request to the register, to enter the appearance of the defendant, is not a notice, and ought not to have been allowed on taxation as such. It was allowed, as a prec'ipe under the former fee bill. But the revised statutes haying abolished all allowances for precipes, nothing is taxable for the request or direction to the register to enter the appearance of the defendant. Nor was the defendants’ solicitor entitled to the charge of fifty cents for attending the register to enter their appearance. The allowance is for attending upon the entry of an order only. Engrossing the list of witnesses was not taxable; and the notice that the list of witnesses was a list of witnesses, was unnecessary, and should not have been taxed. If the list of witnesses was properly drawn, it would have shown on its face what it was. The change for subpoenas and for subpoenaing witnesses, for a time when they could not be examined, and when the defendants refused to proceed to an examination because they had not given a regular notice of such examination to the complainant’s solicitor, should have been disallowed.

The objection to the charge for witnesses’ fees, depends upon the question whether the allowances for witnesses’ fees, by the 8th section of the act of May, 1840, concerning costs and fees in courts of law, and for other purposes, (Laws of 1840, p. 331,) extends to witnesses in suits and proceedings in this court. That act commences by declaring, that for the following services, thereafter to be done or performed in any court of law, in this state, being a court of record, the following fees shall be allowed. And the five succeeding sections then provide a tariff of fees for counsellors, attorneys and clerks; which fees unquestionably were intended to be restricted to actions in courts of law only. Then comes the seventh section, which requires the clerks of courts of law, and the register, assistant register, and clerks of the court of chancery, to perform the duties of agents for attorneys and solicitors without fee or reward. The eighth section, relative to witnesses’ fees, is as follows: “ For each witness, fifty cents- for- each day, while attending any court or officer ; and if the witness resides more than three miles from the place of attendance, travelling fees at the rate of four cents per mile going and returning.” The connexion in which this section is foupd would seem to limit its operation to witnesses in the courts of law, being courts of record,' mentioned in the first section of the act; while its language is broad enough tq embrace the fees of witnesses in courts of equity, and in courts of law which are. pot courts of record; and also in summary proceedings before officers out of court. It is wholly improbable, however, that the legislature could have intended this section to apply to witnesses’ fees in justices’ courts, for which a special provision was before made bylaw; although itslanguage is equally applicable to those courts as it is to this court. I should therefore feel Constrained to limit its operation to the fees of witnesses in the courts of law mentioned in the first section of the act of the 14th of May, 1840, did not the repealing clause of that-act indicate that it was probably intended as a substitute for the section of the revised statutes relative to witnesses’ fees for attending any court, officer, referees or arbitrarors. That section embraced witnesses’ fees in all courts, and in all proceedings before any officer out of court, in civil cases, where no special provision was. made, by law for the compensation of the witness. (2 R. S. 642, § 33. Idem, 650, §§ 1, 2.) And as there was no other provision by law for compensation to witnesses in the courts of equity, the repeal of this section of the revised statutes must necessarily leave them without any compensation whatever, unless the eighth section of the act of the 14th of May, 1840, is construed as extending to witnesses’ fees in this court. For the thirty-third section of title three of chapter ten of the third part of the revised statutes, which is the section relative to witnesses’ fees, is in terms repealed by the act of May, 1840. Taking the whole of that act together, therefore, I am bound to conclude that the eighth section thereof was intended as a substitute for the thirty-third section of the general fee bill contained in the revised statutes, and that it embraces the proper rate of compensation to be paid to witnesses, for their services, in suits in the courts of equity, as well as in courts of-Iaw which are courts of record. The allowance for witnesses, at the rate of fifty cents a day, and four cents for each mile of travel, when the witness resided more than three miles from the examiner’s office, was therefore properly made by the taxing officer; except as to the witness Sayer, who was not examined; and who was subpoenaed to attend when he could not be examined for want of notice.

The affidavit, of eight folios, as to the attendance of the witnesses and the distance travelled, was wholly unnecessary and should not have been allowed. The proper mode of charging for witnesses’ fees in a bill of costs, is to state in the bill the name of the witness, the number of days he attended-, and the distance of his residence from the office of the examiner; or from the place of his examination. And then the usual affidavit, that the disbursements charged in the bill have been actually and necessarily paid or incurred, will contain a sufficient verification of the charges for disbursements for witnesses’ fees; unless charges are made for the travel and attendance of witnesses who were not in .fact examined, or there is something to raise a doubt as to the good faith of the charges for such disbursements. But where there is any ground for believing that witnesses have been subpoenaed for the mere purpose of swelling the bill of costs against the adverse party, the taxing officer ought not to allow the fees charged, for the attendance and travel of the witnesses, without an affidavit of the party himself, that he not only deemed the whole number of witnesses charged for material and necessary, but that he has actually paid them the full amount charged in the bill, for their travel and attendance, previous to the termination of the suit. Such an affidavit, of actual payment to the witnesses, will be sufficient to guard against fictitious charges for the attendance of witnesses; as there is but little danger that a party will actually pay money out of his own pocket, to witnesses who are not considered by him as necessary, upon the doubtful chance of recovering it back again from his adversary in the suit. And as the increased allowance for witnesses’ fees was intended fot the benefit of the witness, and not of the party who subpoenas him, the most effectual way to secure the benefit of the allowance to the person for whom it was intended by the legislature, would be to require an affidavit, in all cases, that the fees Charged had been actually paid to the witnesses, before taxation of the costs. Ño such abuse of the potver of subpoenaing witnesses has ever been brought to the attention of this court, however; as to render it expedient to give a general direction to the taxing officers to require ,such an affidavit in ordinary cases, whei'e no ground of suspicion exists. And the charge for an extra affidavit, in support of the allowance claimed as disbursements for witnesses’ fees, should not be taxed,, except in those cases where the taxing officer deems it proper to require the affidavit of the party, that the fees for the travel and attendance of the witnesses, as charged in the bill, have been necessarily incurred and actually paid.

The charge’ of $4,22 for prospective postage, subsequent to the taxation of costs, ought not to have been allowed; as the items thereof are not stated in the bill. Nor does the statute in relation to costs" justify an allowance for disbursements in prospect, except such as must necessarily be incurred for the fees of officers which are'fixed by law; so that the amount thereof may be'ascertained and deducted from the taxed bill, when the amount is" paid before such prospective services are performed.

The items overcharged in this bill of costs; or which ought to have been wholly stricken out, amount to $73,16; which sum must be deducted from the costs as taxed, and the balance only is to be paid-. And as the complainant has succeeded as to nearly every item objected to before the taxing officer, the defendants must pay him $10, towards his costs upon this application for a re-taxation-,


text:
    P. G. & C. F. Stoney vs. The American Life Insurance Company and others.
    Where the purchaser of real estate, at a master’s sale, procured the conveyance from the master to he made to trustees, for the purpose of securing the payment of a loan which was alleged to be usurious, and to hold the property in trust for him, after payment of such loan, and such trustees and the purchaser at the master’s sale subsequently agreed to sell the premises to a third person, for a specified sum, part of which was to be secured by bond and mortgage, for the benefit of the party from whom the loan was obtained; and the property was conveyed, and a bond and mortgage given accordingly; Held, that the mortgagor pould not set up the alleged usury, between the original parties to such loan, to avoid the payment of his bond and mortgage.
    A negotiable security of a corporation, which upon its face appears to have been duly issued by such corporation, and in conformity with the provisions of its charter, is valid in the hands of a bona fide holder thereof without notice, although such security was in fact issued for a purpose and at a place not authorized by the charter of the company, and in violation of the laws of the state where it was actually issued.
    The making of a contract in this state, by a foreign corporation, does not render such contract void, unless the making of the contract here is contrary to the laws of this state.
    This was an appeal, from an order of the vice chancellor of the first circuit, denying an application, of the defendants, to dissolve the injunction which had been issued in this cause; and also denying their application that the complainants should give security for the costs and damages which might result from the delay .caused by such injunction.

      B. F. Butler & D. Lord, for the appellants.

      D. Webster & D. D. Field, for the respondents.
   The Chancellor.

The claim to relief, in this bill, is based upon the supposition that the agreement between Davis and the American Life Insurance and Trust Company, for the loan of the certificates of the company, w.as usurious; and that the complainants, who subsequently assumed the payment of the amount of' these trust certificates, which Davis had received from the company, are in a situation to take advantage of the supposed usury. I doubt whether the necessary averments, as to the probable difference in exchange between London and New-York at the times when the principal and' interest upon the certificates loaned to Davis were payable, and as to the corrupt intention of the parties to the transaction, are made and sworn to, in this bill, so t,o raise the question of usury upon the present application. But even if the' arrangement between Davis and the company was usurious, I am satisfied that the com■plainants are not in a situation to take advantage of that objection, in this court. Their only title to the premises, is under the conveyance from Duer and Robinson; who obtained title to the mortgaged premises under or through thaf arrangement. And if the title of Duer aqd Robinson was void, on account of the alleged usury, the title to the premises in question is not in the complainants, but is in the assignees of Dudley &, Stuyvesant.

Again; the facts in the case show that Pavis was not acting as the agent of Stoney, but for himself and the assignees, in making the arrangement with the company for the loan of its certificates. And Stoney was in no event to have the property, without paying a certain fixed amount; whatever it might cost Davis and the assignees to raise the money to pay off the prior incumbrances. The subsequent conveyance, therefore, by Duer and Robinson, the assignees, to one of the complainants, was a sale of the property for a specified sum. That sum Davis and the assignees had a right to insist should be paid or secured to the company, and to the assignees, as a condition precedent to such conveyance; f whether the arrangement between Davis and the company was or was not usurious. And Stoney having taken the conveyance, and given his bond and mortgage pursuant to that agreement, he and his co-complainant cannot now set up a defence to the bond and mortgage which Davis never intended to give Stoney, or those claiming under him, the right to set up.

The same difficulty exists to their raising the objection that the original transaction, between Davis and the company, was illegal upon any other ground. The legal title to the premises was in Duer and Robinson, under the master’s deed, with the assent of Davis the purchaser at the sale under the decree of foreclosure. And he had a right to insist that Stoney should not have that title without paying, or securing to the trust company, the sum which he had agreed to pay; and without reference to the legality of the original transaction between Davis and that company. The company was bound to pay its certificates to the holders thereof. For such certificates are legal on their faces; and bona fide holders, who have bought them without knowing that they were not in fact issued at Baltimore, and upon actual deposits in trust, can recover on them, eyep if they were issued in this state, in violation of our restraining laws. Stoney, therefore, having taken the conveyance of the land from the trustees of the company, and having, as thp consideration of that conveyance, agreed to pay the amount of the certificates which had then become the proper debts of tfye company, was not at liberty to set up the illegality in the original transaction, between, the company and Davis, if any such illegality in fact existed. Again; I have not been able to find any thing that is sworn to in this bill, which goes to show that the transaction between Davis and the company was in violation of the restraining laws of this state. For it is not sworn that the company kept an office, in this state, for the purpose of receiving deposits. And I infer from the bill that no deposits were in fact received here, or elsewhere, for which the certificates of deposit mentioned in the bill were issued. The mere fact that the company transacted its business here, when it was not prohibited by our laws from doing so, could not render contracts which were made by .or with it void.

It appears the complainants have amended their bill, in many respects, since the order appealed from was made; but this appeal must be disposed of upon the facts as stated in the original MU. I have not deemed it necessary, therefore, to examine those amendments for the purpose of seeing what effect they may have upon this case in a future stage of the proceedings, ‡ am satisfied, however, that the injunction should not have been granted upon facts that were properly verified and positively sworn to in the original bill. The order appealed from must therefore be reversed ; and the injunction must be dissolved. The costs of the appellants on the motion in the court below, as well as upon this appeal, are to abide the event of the suit.


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    In the matter of Giles, a lunatic.
    Where, after a person has been found a lunatic, by the jury summoned by'virtue of a commission of lunacy, a feigned issue is applied for and obtained, to try the question as to the unsoundness of his mind, and upon the trial of such issue, the jury find that the alleged lunatic is not of unsound mind, the proceedings upon the commission will be discharged, and he will be restored to the full control of his property.
    It is not a matter of course to charge a petitioner, upon whose application a commission of lunacy-is granted, with costs, although he fails to obtain an inquisition finding the existence of the alleged lunacy. And where the petitioner has proceeded in good faith, and upon probable cause, he will not be charged with costs.
    Where a jury legally impanneled have found the party proceeded against a lunatic, such finding is prima facie evidence that the petitioner proceeded in good faith and upon probable cause, although another jury, upon the trial of a feigned issue, finds the other way.
    In this case a commission of lunacy was issued, upon the petition of G. S. Willoughby, one of the grandsons of the alleged lunatic, and the jury found that Giles, at the.time of taking the inquisition, was of unsound mind, and was incapable of conducting his own affairs in consequence of such unsoundness of mind, and that he had been so incapable for one year preceding. Giles subsequently applied for a feigned issue, to try the question as to his unsoundness of mind; which application was granted upon condition that G- G. Reynolds, one of his grandsons, whose contracts with the alleged lunatic were overreached by the finding of the inquisition, consented to join in such issue and to be bound by the result. Subsequent to the granting of such issue, and about sixteen months after the finding of the inquisition, Giles petitioned for a supersedeas, and that the proceedings upon the commission hiight be discharged, upon the ground that he had become of sound mind. But upon an examination of the alleged lunatic by the chancellor, that’ application was dénied. Tire issue was subsequently brought to trial, and the jury found that the alleged lunatic was not of unsound .mind, upon the testimony produced by the petitioner, who held the affirmative of the issue. Giles thereupon applied to have the proceedings upon the commission discharged, and asked to charge the petitioner for such commission with costs.

      H. H. Cozzens & J. Rhoades, for the motion.

      D. Burwell, for Willoughby the petitioner.
   The Chancellor.

The decision upon the feigned issue being in favor of the mental capacity of the alleged lunatic, the proceedings upon the commission must be discharged, and he must be restored to the full control of his property. The claim for costs, to be paid by the applicant upon whose petition the commission was issued, however, presents a' different question; as it is not’ a matter of course to give costs against the petitioner for a commission of lunacy, even where he’fails to obtain an inquisition finding the existence of the alleged lunacy. On the contrary, if the petitioner has proceeded in good faith and upon probable cause, he will not be charged with costs. As the petitioner must bear his'own cost's if he fails in'establishing the ltinacy, that in general is sufficient to restrain the prosecution of an unfounded charge of lunacy, where there is no probable effuse for the proceeding. Arid the fact'that a jury, legally and properly impanneled, has found the party proceeded against, mentally iñcónípetent for the ffiánagement of his property, is sufficient, prima facie,' to show that the petitioner had probable cause for his application for a commission; although another jury, upon the trial of the issue, has found the other way. In the present case, I have no doüfef tli'at the proceedings were instituted by tllff petitioner in good faith, for the protection of the property of Gilds; b'elieving him to be' of unsound mind, so as to be incapable of managing his affairsi The application to charge him with costs, therefore, was improperly made, and must be denied; with $10 costs, to be paid by the applicant.


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    Robertson vs. McGeoch.
    The time allowed for appealing from a decree or order of a surrogate, bommenceá running from the time of the actual entry of th^ decree or order.

      Where one of several executors renounces the executorship, and letters testamentary áre thereupon issued to the others, such executor, after the death of the other executors, may retract his renunciation as a matter of course.
    But where all the executors renounce, and administration with the will annexed is actually granted, tlie executors cannot retract their renunciation, at least during the life of such administrator.
    An execülór, who has renounced his executorship, may retract his renunciation at any time beforb the granting of letters testamentary to the other executors, or the issuing of letters of administration with the will annexed.
    This Was Un áppé'ál; froth the sentence and order of the surrogate of the county of Washington, directing that letters testamentary be granted to W. McGeoch, one of the executors named in the will of E. Cook, 'deceased. The respondent and J. Dobbin were naméd by the testator as his executors, and the appellant was one of his lesidtiary legatees: On the 4th of October, 1843, both of the exé'cutors signed a rehunciation of their right to letters testamentary, which renunciation was proved by the oath of a subscribing witness to the same; and it was left with the surrogate to be filed and recorded when the will of the decedent should have been proved. The appellant thereupon caused the will to be proved before thé surrogate, after having duly cited the heirs and next of kin-. At the closing of the proofs, on the 30th of January, 1844, the respondent McGe'och delivered to the surrogate a written retraction Of his former renunciation of the ex-ecutorship, and consented to take out letters testamentary, and to execute the trust of executor. The appellant objéOtéd to the retraction, and claimed to have letters of administration with the will annexed granted to himself, ór fó some of the other residuary legatees. The. surrogate decided that the executor had a right to retract his renunciation and to take letters testamentary upon the estate, and he was accordingly sworn as executor. But upon an affidavit of Robertson, that he was advised by counsel that theye were just and substantial objections to the granting of letters testamentary to McGeoch, as executor, the surrogate directed the proceedings to be stayed for thirty days. And the surrogate subsequently entered an order as of the 30th of January, 1844, allowing the proof of the will, and made a further order, as of that day, that McGepch, who had formerly renounced the executorship, having, upon proof of the will, applied for leave to retract such renunciation, have leave to do so; but that Robertson having filed an affidavit setting forth his intention to file objections to granting such letters testamentary, and that he was advised and believed that there were just and substantial objections to the granting of such letters to McGeoch, the executor, it was further ordered that the order for granting such letters be stayed for thirty days. On the 28th of February, 1844, Robertson presented his objection in writing, to the surrogate, against granting of the letters testamentary to the respondent; which objection was that McGeoch had filed with the surrogate a written renunciation of the executorship, in due form. And the surrogate ordered that the granting of letters testamentary should be suspended until the 5th of March, 1844. On the last mentioned day, the order appealed from was entered by the surrogate, and Robertson immediately appealed therefrom.

      J. Rhoades, for the appellant.

      M. Fairchild, for the respondent.
   The Chancellor.

It does not appear in this case, except by inference, that there were any other residuary legatees of the testator; or that any person, who had any interest in the question arisipg pn this appeal, appeared before the surrogate. The objection for \yant of proper parties to the appeal is not therefore well taken. And if the renunciation of the executor was peremptory, and could not be revoked, by permission of the surrogate, before any action had taken place, founded upon such renunciation, which had altered the rights of the parties; the objection filed on the 28th of February, is a sufficient ground for reversing the order of the 5th of March, 1844, which directed letters testamentary-to be issued notwithstanding such objection. It is true, the surrogate in fact decided the objection in favor of the respondent, on the 80th of January, when he held that the executor might be allowed to retract his renunciation of the ex-ecutorship. But the order which was subsequently entered as of that time, contained no adjudication or direction that letters testamentary should issue to the executor. And even if it had contained such a direction, the time for appealing from that order had not expired on the 5th of March. For the time allowed for appealing, from a decree or order of a surrogate, does not commence running until such decree or order is entered. And from the surrogate’s return, it is evident that the order entered as of the 30th of January, was not actually settled and entered, by the surrogate, previous to the 28th of February; as it recites the contents of an affidavit filed with the surrogate on the last mentioned day ; which affidavit was sworn to in Troy only two days previous to that time. The only real question which requires consideration in this case, therefore, is whether it was competent for the surrogate to allow the respondent to retract, and to grant letters testamentary to him, notwithstanding his previous renunciation of the executorship.

It appears to be well settled that where there are several executors, and one of them renounces, and letters testamentary are thereupon issued to the others, he may retract, as a matter of course, after the death of the others; and may have letters testamentary granted to him. (9 Coke’s Rep., Fra. & Thomas’ ed., 66, note B. Arnold v. Blencowe, 1 Cox’s Ca. 426. House v. Lord Petrie, 1 Salk. 311.) But where all the executors renounce, and administration with the will annexed has been actually granted, it is too late to retract the renunciation, at least during the life of the administrator. (Toller’s Law of Ex. 422. Rob. on Wills, 171.) And in a recent case in England, it was held by the prerogative court of Canterbury, that where such administration had been granted, upon a renunciation by the executors, they could not retract such renunciation, even after the death of the administrator; as it might interfere with the rights of other parties to revive a chain of executorships, which had once been broken by the renunciation of the executors who formed one of the links in such chain. (3 Addams' Eccl. Rep. 273.) That objection, however, could not be urged in this state, since the adoption of the revised statutes; which have taken away the right 'of an executor of an executor to administer the estate of the original testator.

In England, the executor may be permitted to retract his renunciation at any time before other parties have acquired rights, by the action of the probate court upon such renunciation. In the case of The King v. Simpson, (1 Wm. Black. Rep. 456; 3 Burr. Rep. 1463, S. C.) the question was discussed, upon an application for a mandamus to compel the judge of the prerogative court to allow an executor to retract; but it was not decided, because there was a compromise between the parties litigant. But in Thompson v. Dixon, (3 Addams' Rep. 272,) Sir John Nicholl, the judge of the prerogative court of Canterbury, allowed an executor who had formally renounced, for the purpose of being examined as a witness, to retract his renunciation and to take out letters testamentary upon the will of the testator. And in McDonnell v. Prendergast, (3 Hag. Eccl. Rep. 212,) the same learned civilian decided, that an executor who had renounced, had a right to retract hi's renunciation, at any time before the grant of administration with the will annexed. And similar decisions are referred to in that case, as having been made by the same ecclesiastical court, in 1717 and 1741. (See also Hayward v. Dale, Lee's Eccl. Ca. 333, which is cited in Rex v. Simpson'.) Stich appeals therefore to have been the law in England, eVen previous to the revolution. And there is nothing in the provisions of the revised statutes Which is inconsistent with the decisions referred to; although the form in which a renunciation shall be thade, and authenticated and preserved, was expressly provided for in the revision of 1830.

The order appealed from is therefore affirmed, with costs.


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    Lakens and others vs. Fielden and others.
    Where the defendants in a suit resided in England, and the soliditor of the complainant consented that the solicitor of the defendants might enter an order for a commission to take their answer, and that they might have two months to take such answer and return the commission, ■ and the solicitor of the complainant, omitte'3 to enter an order to answer, and to serve a copy of such order and of the bill, bn tHe Solicitor of the defendants, until after the expiration of the two months; Held, that as the time for answering had not, in fact, been extended; the defendants were not restricted to an answer, but were at liberty either to plead, answer, or demur, within the forty days allowed by the rule of this court for that purpose.
    Where the order for á commission, to take the answer of a non-resident defendant, is for the corfimon dedinius, to take the answer of the defendarft, imd not for a special dedimus, authorizing the commissioners to take his plea, answer; or demurrer, it is irregular for the commissioners to take and return the demurrer of the defendant, instead of his answer.
    Where a defendant obtains an order for further time to answer fee complainant's bill, he cannot demur, unless authorized by the court to do sd.
    This wás an appeal, from an order of the vice chancellor of the first circuit, directing the demurrer to the complainants’ bill to be taken from the files of the court, and that the defendants put in an answer; and that their proceedings in a suit at law, against the complainants, be stayed until after answer. Some of the defendants resided in England, and being proceeded against ás absentees, their solicito!' applied to the solicitor of the complainants to consent to the entry of an order for a commission to take the answers of those defendants, and that they should have two months to take such answers and return the commission. The solicitor of the complainants gave his consent to the entry of such an order, upon condition that the appearance of the absent defendants should be immediately entered. An order by consent was entered accordingly, on the 24th of September, 1844; and the appearance Of the absent defendants was entered at the same time. No order to answer having been entered, the complainants’ solicitor, on the 18th of December; entered the usual order that the defendants answer the bill within forty days, and served a copy of the bill, and notice of the order to answer, apon the solicitor for the defendants, who thereupon put in a demurrer to the bill. In October, 1844, the vice chancellor dissolved the injunction which had been issued, restraining' the defendants from proceeding in a suit at law against the complainants ; with liberty to apply for a new injunction, upon the coming in of the answer of the defendants. And upon an appeal from the decision of the vice chancellor, the order to dissolve the injunction was affirmed. Upon thesé faóts, the Complainants applied for an order to take the demurrer off the files, and that the defendants put in their answer, and that the injilnction be revived &c., which application was granted accordingly.

      J. Rhoades, for the appellants.

      W. W. Van Wagenen, for the respondents:
   The Chancellor.

I infer, from the papers before m'é fipon this appeal, that the order for a commission, in this case, was for the common dedimus to take the answers Cf the defendants; and not for a special dedimiis, authorizing the commissioners to take their plea, answer, or demurrer. If so, I think it would have been irregular for the commissioners to have returned the demurrer of those defendants,-instead of their answbf. Such was the opinion of Lord Langdale in the recent case of Tomlinson v. Swinnerton, (1 Keen’s Rep. 9,) whére, upon a common dedimus, the commissioners had returned an answer to one part of the bill and a demurrer to another part. Chief Baron Gilbert Says, if the defendant taires out a commission to answer he’canttbt return a plea or demurrer; because the commission is to answer find contest the 'cause, which does not give the com missibn'erS authority to receive any exception in relation to such contest. But the defendant rúáy move the court for a commission to plead, answer, or demur, and the court will grant it, with the restriction not to demur alone. And then the commissioners may receive a plea, or an answer and demurrer, because they haVé Ufithbrity from the court to do so; but if they send up a demurrer ’alone, the court will grant an attachment against the defendant. (Gilb. For. Rom. 93. See also 2 Dan. Ch. Pr. 281.)

In the present case, however, it does not appear that the .demurrer was returned upon the commission, or indeed that the common dedimils was ever taken out. And I presume the demurrer was put in by the counsel and solicitor for the defendants here; as a simple demurrer did not require to be verified by oath. Had the ordinary order to answer been served in this case, however; with á copy of the bill, at the time the order for the commission was entered, which order allowed two months for the return of the commission, it would have come within the decision of this court in Burrall v. Raineteaux, (2. Paige's Rep. 331,) that the defendant who has obtained further time to answer the complainants’ bill, cannot be permitted to demur, unless authorized by the court to do so. Here, however, no order to answer had been entered at the time the order for the commission was obtained. And the time for answering was not in fact extended by the last mentioned order ;■ as the bill itself was not served üpon the defendants’ solicitor until, after the expiration of the two rhonths specified in that order. When the complainants served the copy of the bill, and notice of an order to answer, in December, 1844, the defendants Were authorized to plead, answer or demur, within the forty days allowed by the rule of this court for that purpose; iti the same manner as if the order for a commission had not been entered.

The defendants, therefore, had the fight to have the-opinion of the court upon the question whether the demurrer was well taken. Thé Order appealed from must, be reversed,, and the motion denied. And the costs of the áppellants.upon this appeal, as well as their costs of opposing the motion.' before the; v-ice chancellor, are to. abide, the event of thé suit.

Order accordingly.

       Affirmed, on appeal to the court for the correction of errors, in August, 1846.


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    Nesmeth and others vs. Halsted.
    It is irregular to serve the subpoena, in a judgment creditor’s suit, upon the defendant, without at the same time serving him with a copy of the 191st rule of the court. And if the defendant applies to the court the first opportunity, after the time allowed for his appearance, the service of the subpoena, and all subsequent proceedings, will he set aside for irregularity, with costs.
    The service of a copy of the 191st rule, after the defendant has been subjected to the expense of employing a solicitor, will not obviate the irregularity qf neglecting to sgrve it at the time of service of the subpoena.
    The defendant cannot avail himself of the irregularity of a want of s.ervice of a copy of the 191st rule, as an answer to an application for the appointment of a receiver, upon a creditor’s bill; but he must resort to a cross motion on his part, founded upon an afijdavit of the irregularity and due notice of such motion to the complainant’s solicitor ; and the application should be made the first opportunity after the defendant’s appearance has been entered.
    The defendant, in a judgment creditor’s suit, has twenty days after the entry of his appearance, to give the written consent under the 191st rule.
    And if he gives such consent within the twenty days, he cannot be compelled to answer the bill, although the complainant, within the twenty days, applies for and obtains the usual order for the appointment of ,a receiver.
    The complainant is not bound to wait twenty days after the entry of the defendant’s appearance, before he gives notice of the application for a receiver upon a creditor’s bill.
    If the complainant obtains the order for a receiver, within the twenty days, and the defendant afterwards gives the written consent, under the 191st rule, the complainant must either abandon his order and procure a new one, founded upon such consent, or he will lose the benefit of a discovery; except so far as the defendant is bound to answer on oath, before the master, ag to the property which he. then possesses and which he is directed to deliver over to the receiver.
    This case came before the chancellor, upon an appeal from an order of the vice chancellor of the first circuit, appointing a receiver, upon a creditor’s bill. The complainant’s solicitor neglected to serve a copy of the 191st rule, upon the defendant, at the time of the service of the subpoena. The defendant having appeared by a solicitor,- a copy of the rule was subsequently ■ served on such solicitor, and within twenty days thereafter the complainants gave notice of an application for the appointment of a receiver. Upon the hearing of that application, the counsel • for the .defendant insisted upon the irregularity, in neglecting to serve a copy of the rule with the subpoena, as an answer to the complainant’s motion. He also contended that an order for the appointment of a receiver could not be made, until the expiration of the twenty days allowed by the rule, to give a written consent to take the bill as confessed and for the appointment of a receiver.

      O. Bushnell, for the appellant.

      J. Rhoades, for the respondents.
   The Chancellor.

It was undoubtedly irregular to serve the subpoena, upon the defendant, without at the same time serving a copy of the 191st rule of the court. And if the defendant had applied to the court the first opportunity, after the time allowed for his appearance, to set aside the service of the sub-' poena and all subsequent proceedings, for irregularity, his application should have been granted, with costs. The object of that part of the rule which requires a copy thereof to be served with the subpoena, was to apprize the defendant of his rights.- and duties; and also to save him the useless expense of employing a solicitor, where he is willing to make a voluntary disclosure and surrender of his property, upon a creditor’s Ipffix without further litigation. Serving a copy of the rule, after- the defendant has been subjected to the expense of employing- a solicitor, will not, therefore, obviate the irregularity, and prevent the granting of an order to set aside the irregular proceedings. The defendant cannot, however, avail himself of such an irregularity as an answer to an application for the appointment of a receiver. But he must resort to a cross motion, on his part, founded upon an affidavit of the irregularity, and due notice of. such motion to the complainant’s solicitor. And the application should be made the first opportunity after the defendant’s appearance has been entered};

The counsel for the appellant is also under a mistake in supposing that the complainants were bound to wait twenty days, after the appearance of the defendant was entered, before they were authorized to givé notice of the applibatioii for a receiver. The defendant has twenty days, after the entry of his dppearance, to givé the written consent, under the 191st rule. And if he gives that Consent within the twenty days; he cannot be compelled fo answer the bill, although the complaiiiant, within the twenty 'days, has applied for and obtained the usiial order for the appointment of a receiver. The only diffefehce to the complainant, -Where he applies within the twenty days; will be that if the consent is given after he has obtained the ushal order in such cases; he will either be obliged to abandon that order and to procure á new one, founded upon such consent, or he will lose the benefit of a discovery; except so far as the defendant is bound to answer on oath before the master; as to the property which he theh possesses and which he is directed tb deliver over to the receiver. The order to appoint a receiver Was ther<W fore properly granted in this case. But as the order difects the 'defendant to make a much more extensive discovery than the complainants were entitled to where the defendant had hot given a written consent to allow the bill to be taken as confessed, the order appealed from must be reversed, of hibdified; so as to make it conform to the usual order for iHe appointment of a receiver upon a creditor’s bill, where the defendant elects to answer, in the ordinary form, instead of cortsentihg to allow the bill to be taken as confessed, and to make a discovery before the master under the provisions of the 191st rule of the court.

Order accordingly.


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    Jarvis vs. Palmer.
    Where the demurrer does not go to the whole bill, it must clearly express the partió» ular part which it is designed to cover, so that upon a reference of the answer to the residue of the bill, upon exceptions for insufficiency, the master may be able to ascertain precisely how far the demurrer goes, and how much of the bill remains to be answered.
    A demurrer cannot be allowed in part, where it covers too much; and if any part of the matter covered by the demurrer is also covered by a plea or answer, the. whole demurrer is overruled by such plea, or answer.
    Parol evidence, to cdhtradict or change the express terms of a written agreement, by proving that one of the parties to the agreement represented that such agreement would give to the other party what the written agreement distinctly declared he ■ should not have, is inadmissible.
    TTie written agidement itself is the best evidence of what the parties intended should be the final and binding contract between them; where nothing has been left out of the agreement, by 'fraud or mistake, which either of the parties supposed was inserted therein when they executed the agreement.
    Where a plea dobs not go to the whole bill, it must distinctly set out the part of the discovery or relief intended to be covered by it, either in the words of the bill or by such a description that the court will not be obliged to look into the whole bill to ascertain the part thereof which is edvered by the plea.
    But where a plea is overruled upon this ground, the defect being merely formal, it will be overruled without prejudice to the defendant’s right to insist upon the same matters in his answer, as a defence to the suit pro tanto.
    This was an apppeal from an order of the vice chancellor of the first circuit, overruling the defendant’s plea and demurrers to the bill in this catise. The complainant was the general assignee of all the property and effects of A. Brower, for the benefit of the creditors of the latter, by an assignment in trust executed on the 21st of May, 1841. Previous to that time, Brower and F. A. Palmer, the defendant in this suit, had been co-partners in business, as the proprietors of a line of stagecoaches and omnibüsses, which partnership was dissolved by a written agreement between Brower find Palmer, under their hands and seals, on the llth of May Of the same year. The agreement recited the substance of the original articles of copartnership, and that it was found for the interest of both parties to terminate their copartnership, and that it had been agreed between them that the whole partnership stock and debts should vest in, and remain the property of Palmer, and that Brower should release to him all interest in and to the same. The agreement then contained mutual covenants between the parties, that the copartnership should cease and be determined from that day, and a formal conveyance from Brower of his half part, share and interest in the partnership property and effects, to Palmer, in consideration of one dollar, together with all the profits, proceeds, gains and advantages which had been or should thereafter be made by the partnership; so that Brower should have no claim or demand on Palmer on account of the same. And Palmer was to hold such partnership .property and effects to his own use and benefit, subject, however, to the .several judgments which were standing on record, against Brower, which were a lien upon his interest in such property and effects, and to the rent which was a lien thereon. By the agreement, to enable Palmer to collect and receive the debts due to the partnership for his own use, Brower authorized him to demand, sue for, and receive such debts, and to execute releases and discharges for the same. Palmer on his part, and in consideration of the premises, covenanted to pay and discharge all debts and damages whatsoever due and owing from the firm, or which Brower was jointly holden for with him; and also to pay all judgments against Brower, and all rents and other claims, which at the date of the agreement were alien upon the partnership-property or effects, or on the interest of Brower therein; which judgments, liens, rents, dues and demands were set forth m schedule B. annexed to the agreement.
    On the 13th of May, 1841, another agreement was made between the parties, under their hands and seals, reciting the agreement'of Palmer to pay the judgments, debts and liens, and that the amount thereof, in the settlement of accounts, had been estimated at $10,649, but were received and allowed by Palmer for. $8177,24, and containing a covenant on the part of Palmer, that if, upon a final payment by him, the amount should be found to be less than the last mentioned sum, exclusive of the partnership debts, he would pay to Brower, or his assigns, so. much as the amount should be found to fall short of the sum last mentioned.
    The bill, after stating these two agreements, and the making of the assignment to the complainant by Brower, for the benefit of his creditors, alleged that all the partnership property and eifects were delivered up to Palmer, in compliance with the terms of the first agreement,' who took possession of the same and used and enjoyed them as his property. The complainant further alleged in his bill, “ that it was verbally agreed and understood, by and between Brower and Palmer, that if after the collection; of* the debts and demands due the copartnership, and the payment of the copartnership, debts, there should beany balance, such, balance, notwithstanding the terms of the agreement of dissolution, should be equally divided between them; and that Palmer should -account with Brower for his collections of the debts, due the.firm, and pay the half thereof to him, after payment of the. partnership debts.” And the complainant averred that, at the time of the execution of that agreement, the parties thereto declared, that such was the intent and meaning of the same; and that Brower was induced to execute such agreement, under the full belief that such was its. intent and meaning, and upon the promise of Palmer to that effect. The bill further stated, that the parties agreed for an equal division of the proceeds of the collections of the d,ebts due the firm at the time of the dissolution, and that the provision in the written agreement that Palmer should receive all the co-partnership debts for his own use, was a fraud upon Brower; that, to induce Brower to execute, the written agreement, Palmer assérted tq him that his signing and executing the spine would not deprive him, either at law or in equity, of his half of such debts and claims, or made some assurance to that purport and effect; and that Brower, believing and relying on such representations; executed the agreement. And the complainant charged, that; at the time of making such representations, Palmer was advised by his counsel, and others, of the legal effect of the agreement, and that it might deprive Brower of his rights; that notwithstanding such-advice, Palmes persuaded and assured Brower to the contrary, with the fraudulent design of depriving him of his just claim, and of the half of sqch partnership debts; and that Brower, believing and confiding in these statements, executed the agreement, believing3 when he so executed it, that it was a part of that agreement that the partnership debts, ydien collected, were to be divided between him and Palmer, and that Brower was. so assured by Palmer at the time. The bill fiirther alleged, that there wag no consideration paid or given by Palmer, in any shape, for the assignment of Brower’s half of the said debts, which by the terms of the agreement, and tire fraudplent procurement of Palmer, were to be collected by the latter for his own use and benefit. The complainant therefore insisted, that Brower being then indebted to a greater amount than was provided for in the agreement, had no right to make a power authorizing Palmer to collect and receive the debts for his own benefit; and that the said power was obtained by fraud, and was fraudulent and void as against the complainant, and the creditors of Brower provided for in the assignment of Brower to the complainant ; and he also insisted, that Palmer was bound to account for the half of such partnership debts, and to pay them to the complainant, for the benefit pf such creditors.
    The bill further stated, that Palmer pretended that he had fully performed his part of the agreement, but that a debt mentioned in schedule B., annexed to the agreement, and due to Byerson, a creditor of the firm, remained due and unpaid, which Palmer refused to pay, and that Brower had been called upon to pay the same. The complainant also charged, in his bill, that although Palmer '¡yas aware of the assignment to him from Brower, arid had been repeatedly requested to render him an account of his payments pursuant to the agreement, and of his proceedings in the premises, and to come to a settlement with him, he had refused to render or give any account, or to make any settlement; and that it was impossible for the complainant to ascertain, with any certainty, what payments had been made,. Palmer haying all the books and papers of the firm; although the complainant charged that, as he believed, there was a large-amount due to-him, as the assignee of Brower, on account of the collection of the debts due to the firm. He therefore prayed a full answer in the premises, and that the defendant might discover and set forth all the moneys collected by him from the debts of the firm, and also what debts of the copartnership he had paid, and when and to what amount, and also what payments, and when the same were made, and to whom he had made them, under the agreements mentioned- in the bill; that the agreement for the dissolution of the copartnership might be so amended that the balance of the debts of the firm collected, beyond the payment of the copartnership liabilities, might be divided equally between the complainant and the defendant; that the part of the agreement which authorized the defendant or his representatives to collect or receive, to his or their own use, all the copartnership debts, might be cancelled and expunged from the agreement, so as to make the agreement correspond with the actual agreement between the parties; that the collections from the partnership debts should be equally divided, after paying the debts due from the firm; and that the defendant might be decreed to pay to the complainant any amount which, upon accounting, should appear to be due him as the assignee of Brower, or for such other or further relief as might be agreeable to equity.
    The defendant, as to all the relief prayed for, as far as such relief related to an account of the moneys collected from the co-partnership debts mentioned in the agreement of the 11th of May, 1841, or to the amending or altering that agreement, or to the division of the balance of the moneys collected over and above the payment of the debts due from the firm, and as to all the discovery asked by the bill, as far as such discovery related in any way to such relief, except so much of such discovery as related to the belief of Brower, at the time of the execution of that agreement, that it was a part of the agreement that the co-> partnership debts, when collected, should be divided between him and the defendant, and as to the defendant’s so assuring him, pleaded the'said written agreement in bar; insisting that the written agreement was conclusive as to the agreement and understanding between the parties at the time of the execution of the same, and that the covenant of the defendant to assume and pay all the debts of the firm, was a good and valuable consideration for the assignment of the partnership property mentioned in the agreement. And the defendant averred in his plea, that Brower, at the time he executed the agreement, did not believe that it was a part of such agreement that the copart-nership debts, when collected, should be divided between him and the defendant, and that Brower was not so assured by the defendant Palmer. This plea was supported by an answer denying . that Brower believed that it was a part of the written agreement that the debts due the firm should, when collected, be divided between him and the defendant; and denying that the defendant so assured Brower. The answer, on the contrary, stated that the agreement was repeatedly read to Brower, immediately before it was executed, and that at the time of the execution of the agreement, Brower was attended by counsel, learned in the law, and acted under the direction and advice of such counsel.
    To so much and to such parts of the bill as sought an answer respecting the agreement of the 13th of May, 1841, and prayed that the defendant might account with the complainant in respect to his acts and doings under that agreement, and that he might be decreed specifically to perform such agreement, the defendant demurred, first, because the agreement upon its face was without consideration; second, because it was not charged in the bill, that the judgments, liens and rents in that agreement mentioned, did amount to less than $8177,24, mentioned in the agreement; third, that the remedy of the complainant, if any, was in a court of law; and fourth, that the court of chancery could not enforce the specific performance. of a covenant as to personalty.
    To so much and such parts of thé bill as sought an answer respecting the agreement of the 11th of May, 1841, and respecting the schedule B. and whether the defendant pretended that he had fully performed the conditions in that agreement contained, whether the debts of the firm to Ryerson remained due and unpaidj whether he had called upon Brower for payment, and whether thé defendant refused to pay the same, and pretended it Was not ethbraced in the agreement, and as prayed that the defendant might be decreed to pay the same, the defendant deíhurred; lipón thfe ground that the remedy of the complainant; if any, was at law.
    And to so much of the bill as sotight an answer, from the defendant, respecting the agre’ement of the 11th of May, 1841, and whether the assignment in that agreement mentioned was without consideration, and was fraudulent and void as against the creditors of Brower, and prayed that the defendant might account with the complainant for bne-half of the copartnership debts, collected by the defendant, and pay the same,' the defendant also demurred; 1st. Because it was not alleged affirmatively that Brower was insolvent, but only by way of recital. 2d. Because it was not alleged that there was more than sufficient copartnership property assigned to the defendant, to pay the debts of the firm.
    The vice chancellor overruled the plea and demurrers absolutely, with costs; and ordered the defendant to pay the costs, and to answer the bill, within forty days; or that an attachment issue against him.

      R. F. Winslow, for the appellant.

      S. B. Judah, for the respondent.
   The Chancellor.

The first demurrer; which is to so much of the bill as seeks ah answer and discofery ks to the agreement of the 13th of May, 1841, and an accohnt in respect to the acts of the defendant under that agreement, appears to be well taken; and is not overruled by the plea. It is true, the complainant, under the agreement referred to in that demurrer, would be entitled to payment of the amount which the judgment and other liens, exclusive of the partnership debts, should fall short of the $8177,24. But I have not been able to fihd any allegation or chargeüh the bill, either upon information; belief or otherwise, that these judgments and liens did fall short of that sum. And to entitle the complainant even to a discovery in aid of a suit at law, to recover the difference, the complainant must at least allego that he believes they fell short, For that-reason the complainant is not eutitled to any discovery or relief in relation to the matters embraced in this demurrer. The first demurrer should, therefore, have been allowed.

The second demprrer was properly disallowed, inasmuch as it covers every thing in the bill respecting the agreement of the 11th of May, 1841, and the schedule annexed, as well as the-discovery and relief respecting the debt of Ryerson, and the payment thereof. The broad terms of this demurrer, therefore, necessarily cover the allegations and charges in the bill, that the agreement of the 11th of May was procured to be executed by the false assurauce of the defendant that it contained a provision, or that it was a part of such agreement, that the copartnership debts, when collected,, should be divided between Brower and the defendant. And as that charge in the bill respecting the agreement of the 11th of May, 1841, is denied, both by the answer and the plea, this, demurrer is overruled by such plea and answer. The defendant did not probably intend to cover so much of the discpvery sought by the bill as is actually embraced in the second demurrer. But the rule of chancery pleading is such, on this subject, that if the demurrer does not go to the whole bill, it must clearly express the particular parts which it is designed to cover; so that upon a reference of the answer to the residue of the bill, upon exceptions for insufficiency, the master may be able to ascertain precisely how far the demurrer goes, and how much of the bill remains to be answered. (See Welf. Eq. Pl. 266; Devonsher v. Newenham, 2 Sch. & Lef. 205.) And as a demurrer cannot be allowed in part, where it is too broad, if any part of the matter covered by the demurrer is also covered by a plea, or answer, the whole demurrer is overruled by such plea, or answer. (Jones v. The Earl of Stratford, 3 Peere Wm's Rep. 81.)

The third demurrer cannot be sustained, because it is liable to the same objection as the second. If also covers a part of the relief embraced in the plea; to wit, the account and payment of one half of the copartnership debts collected by the defendant.

The plea appears to be good in substance, and is not, as the complainant’s counsel supposes, a plea of matters appearing upon the face of the bill. It is true the pleader urges objections appearing upon the face of the bill, in bar; but he urges them in connection with the averments in the plea negativing the belief of Brower, that there was a provision in the written agreement which was not in fact there, and also negativing the allegation that the defendant assured Brower that there was such a provision in the agreement. In the absence of any false representation on the part of the defendant, or any misapprehension of Brower as to the existence of such a provision in the agreement, and supposing the fact to be that Brower knew precisely what the terms of the written agreement were, it is impossible to imagine how Brower could have supposed the effect of the agreement would be to give him the right to the one half of the debts of the firm which should be collected. For the language of the written agreement, as to the exclusive right of the defendant to collect and receive all the debts for his own use and benefit, is just as clear and explicit as it is in relation ■ to the exclusive right of the defendant to the horses and carriages and other property of the firm. And to allow parol evidence to contradict or change the express terms of a written agreement, by proving'that one of the parties to the agreement represented that such agreement would give to the other party what the written contract .distinctly declared he should not have, would be a dangerous innovation upon the settled rule of law on this subject. That rule is, that the written agreement itself is the best evidence of what the parties intended should be the final and binding contract between them; where nothing has been left out of the written contract by fraud or mistake, which the parties supposed was inserted therein when the agreement was executed by them.

This plea, however, is defective in point of form; because it does not state with sufficient certainty the part .of the discovery, sought by the bill, which it was intended to cover. The same rule, applies to pleas as to demurrers in this respect; that where the plea, or demurrer, do not go to the whole bill, but 01% to a part of the discovery or relief sought, it must clearly and distinctly point out the particular parts of each which such plea or demurrer is designed to cover. That is, the part of the discovery and relief intended to be covered by the plea or demurrer must be set out in the words of the bill or by such a description that the court will not be obliged to look into the whole bill to find the part which is covered by the demurrer or the plea. (Johnson v. Johnson, 2 Moll. Rep. 415. Chetwynd v. Linden, 2 Ves. 451. Welf. Eq. Pl. 267, 298.) Here the plea is as to certain parts of the relief sought by the bill, which parts of the relief are clearly specified; but it is to all the discovery asked for by the complainant, as far as such discovery in any way relates to the relief before mentioned, except as to the discovery, specifying it, which is made by his answer in support of the averments in the plea. It is evident that by this mode jf pleading, it is impossible to ascertain what part of the dis-jovery sought by the bill is covered by the plea, without trav-elling over the whole bill, and determining what part of the discovery sought relates to the portion of the relief specified in the plea. In other words, the duty is thrown upon the court, by this plea, of searching through the whole bill for the purpose of ascertaining what part of ^ the discovery called for, by the bill, is material or relevant to the particular relief covered by the plea. This is not allowable; and the plea, therefore, was properly overruled. But as this was a mere formal defect, the plea should have been overruled without prejudice to the defendant’s right to insist upon the same matters in his answer.

The order of the vice chancellor must, therefore, be reversed, so far as relates to the first demurrer, and that demurrer must be allowed. And the overruling the plea and the other demurrers must be without prejudice to the defendant’s right to insist upon the same matters in his answer. Neither party is to have costs, as against the other, upon this appeal.


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    National Fire Insurance Company vs. Sackett and Fitch.
    Where, upon an applifcation for a loan of money, it was agreed to make the loan at an usurious premium, and the parties agreed that such contract should be carried into effect by the borrower’s giving his note to a third person, and taking the note of the latter for the same amount in exchange therefor, and selling it to the lender at the discount agreed upon as the usurious premium', and the usurious contract was afterwards consummated in that way, the third person, who gave his note in exchange, being informed of the object for wliich the exchange of notes was made; Held, that the whole transaction was void for usury.
    It is a settled principle, of the Court of chancery, not to open á regular default to enable a defendant to set up usury as a defence; except upon the condition that he waives the forfeiture, and only insists upon the defence of usury to the extent of the usurious premium paid or agreed to be jraid.
    This was an application on the part of the 'defendant Sack-ett to open the order which had been entered closing 'the proofs; and that he might be permitted to examine his co-defendant as a witness to prove the defence stated in his answer. The facts sufficiently appear in the opinion of the chancellor.

      R. R. Ward, for the complainants.

      J. L. Lawrence, for the defendants.
   The Chancellor.

As the answer sets up á meritorious defence as to a part of the demand, at least so far as relates to the offset of the $200, loaned to Sherman at the time of the execution of the mortgage and before the assignment to the complainants, the applicant ought to be permitted to make out that defence by his proofs, under the circumstances of the case. I am also of the opinion that the facts sworn to in the answer 'of Sackett will, if proved, render the bond ’and mortgage void for usury,' notwithstanding the decision of the supreme court in Rice v. Mather, (3 Wend. 62,) and of the court for the correction of errors in Rapelye v. Anderson, (4 Hill’s Rep. 472.) The first of these cases only decides that where two persons exchange securities, for the purpose of enabling the receivers respectively to sell them in the market at a discount, both are good and available; and each party may collect the amount of the security received from the other; and that a subsequent sale of such a security at a discount, beyond the legal rate of interest, is not usurious. And the last casé decides that where there is a valid and existing security, if the advance of money thereon assumes the form of a contract of sale, the transaction is not usurious; although the real object of the purchase is to get move than seven per cent for the use of money, and there is an express agreement in writing to guaranty the payment of the whole nominal amount óf the security, with legal interest thereon.

In the present case, however, the allegation in the answer of Saekett is, in substance, that there was a prior agreement, between him and Smith, for a loan from the latter, at the usurious premium of f500, beyond the legal rate of interest; and that the exchange of securities, between Saekett and Sherman, was subsequently made for the purpose of carrying such usurious and corrupt agreement into effect, and with knowledge on the part of Sherman of the fact that such -was the object of this exchange of securities. Our courts have not yet gone so far as to declare that it is utterly impossible to make an usurious agreement where the transaction is made to assume the form of the sale of a security for the payment of money; and where such security is to be subsequently created-, without any real consideration except as a means of carrying into effect the previous agreement for an usurious loan.

Under the circiimstances of this case, therefore, the defendant Saekett should be permitted to show, if he can, that no more than $2800 was justly and equitably due to Sherman, on his bond and mortgáge, at the time it was assignéd to the complainants. And he ought also to be permitted to prove the allegation in his answer, that the bond and mortgage had been duly assigned to the North American Trust and Banking Company, and did not belong to Sherman at the time of the alleged assignment thereof to the complainants.

The order to close the proofs, however, appears to have been regular, and the misdirection of the notice of that order, even if notice was necessary, would not render the order itself invalid. And the settled principle of this court is, not to open a regular default, to enable the. defendant to set up a defence of usury, except upon the condition that the defendant shall agree to waive the forfeiture, and only insist upon the defence of usury to the extent of the usurious premium paid or agreed to be paid. The order to close the proofs, so far as relates to the complainants and the defendant Sackett only, must be opened ; and the latter must have forty days to take his testimony, upon the payment of f 10 costs. But it must be upon the condition that within ten days after the entry of the order upon this decision, the defendant Sackett, or his solicitor, delivers to the solicitor of the complainant a written stipulation, to waive any forfeiture on account of the usury alleged in the answer, beyond the usurious premium of $>500 included in the two mortgages, in addition to the money actually loaned to him by Smith, and the $>200 paid to Sherman ; if that shall also appear to have been intended as a further usurious premium upon the loan.

The defendant Sackett is also to be at liberty to examine the defendant Fitch, as a witness, as to any matters in which the latter is not interested, and subject to all just exceptions to him as a witness, on the ground of interest or otherwise; in' case the order to close the proofs is thus opened. But if Sackett thinks proper to examine his co-defendant as a witness, the complainants are to be at liberty to examine other witnesses to contradict, rebut, of explain the matters testified to by Fitch j although no list of such witnesses has heretofore been furnished to the solicitor of Sackett, or to the examiner.

Order accordingly.