text:
    Hoxie vs. Hoxie and others.
    Where a testator devised his residuary estate, to be equally divided among the children of his two brothers and his sister, when they should severally be. come of age; Held, that the children of the brothers and sister in esse at the death of the testator, took immediate vested estates in possession, as tenants in common, and that the vesting of the estate of each did not depend upon the contingency of his or her arriving at the age of twenty one.
    The construction of a will must depend upon the intention of the testator, to be ascertained from a full view of every thing contained in it. And where it is evident that the testator meant that the heir at law, or any other person, should take the legal estate for the benefit of the real devisee, the court will consider the estate as devised in trust for the latter, although no formal words of devise to the trustee are used.
    Where it is clear that the testator intended a person in esse and capable of taking the legal estate at the time of making the will should have the whole beneficial interest in the estate, during his minority as well as afterwards, if there is nothing in the will indicating an intention to give the legal estate to another in trust for him during such minority, the court will construe it as a devise of the legal estate, to be vested in possession in him immediately, and to be taken care of for him by his legal-guardian until he is of age.
    Where a defendant pleads in bar of a bill for partition that a third person, not a party to the suit, has an interest in the premises as tenant in common, and the plea upon an issue joined thereon is overruled as false, it seems the defendant cannot raise the same question again, by an exception to the master’s report upon the title.
    The bill in this cause was filed before the vice chancellor of the fifth circuit for the partition of lands. The defendant John Hoxie plead that the children of Rhoda Delaney were interested as tenants in common in the premises, who were made parties to the suit; to which plea the complainant replied, taking issue thereon. The other adult defendants having suffered the bill to be taken as confessed, and the infants having put in a general answer by their guardian ad litem, a reference was made to a master, under the 177th rule, to take proof of the complainant’s title and interest in the premises, and of the several matters set forth in his bill, and to ascertain and report the rights of the several parties in the premises. The proofs were also regularly closed as to the defendant John Hoxie, and his plea was afterwards, upon such proofs, overruled as false. The master reported that the rights of the several parties in the premises were as set forth in the complainant’s bill; and that the premises were so situated that a partition thereof could not be made without great prejudice. The defendant John Hoxie excepted to the master’s report, and by his exceptions attempted to raise the same question which was raised by his plea, which had been overruled as false. He also excepted to the report on the ground that the three infant children of Solomon Hoxie had not vested interests in the property, tinder the will of their uncle, frbm whom the title was derived. The vice chancellor, upon the hearing of the exceptions, allowed that part of the exceptions which related to the interest of the infant children of S. Hoxie in the premises; and decided that the heir at law was a necessary party, and that the bill was therefore defective in form and substance. The / cause was thereupon ordered to stand over, with leave to the complainant to amend his bill. From this part of the decision of the vice chancellor the complainant appealed.

      May 1.

      The following opinion was delivered by the vice chancellor, upon the exceptions t

    Denio, V. C. It is satisfactorily shown, by the depositions in this cause, that Rhoda Delaney, mentioned in the plea of John Hoxie, is a natural, and not a legitimate child of John Hoxie. She was begotten and born before the intermarriage of the latter with his wife. The general rule unquestionably is, that where a devise is made in terms to-the children of another, legitimate children only are meant, unless there is something upon the face of the will, or in the circumstances of the family who are the objects of the testator’s bounty, to show that a different rule ought to prevail. (1 Mad. Rep. 430. 2 Paige, 11.) For instance, as in the case last cited, where the devise was to the testator’s son, by name, and his two daughters, and he had a son of that name and two daughters, for whom he provided, but who were illegitimate, and the testator had no legitimate offspring, it was correctly held, that the illegitimate children took under the will. In the case before me there are no circumstances which show that the testator designed to give a different import to the words which he made use of to denote the recipients of his favor from the meaning which the law affixes to them, and I am not at liberty to resort to vague conjecture. It is true, this daughter was brought up with the other children of John Hoxie, and recognized as their sister, to the knowledge of the testator. And I know of no reason which he could have had to exclude her from a share in his property. Still he has used language which does exclude her, and I have no power to change or alter it. The plea is not therefore sustained.
    That portion of the exception to the master’s report which objects that “ according to the said will the interests of some of the said parties have not yet vested in them,” is well taken. The devise in the will of Luke Hoxie, to the children of his sister Mary, and of his brother Solomon, and his brother John, is an executory devise, to take effect as the devisees severally come of age. At the death of the testator, the estate (except as to the portions of those of the devisees who had arrived of age, if any of them had then reached that age) descended to the heirs at law of the testator. The heirs, however, take as trustees for the persons who shall eventually become entitled to the estate, and they are bound to account for the rents and profits, and are subject to be displaced as trustees for misconduct or want of responsibility. (Rogers v. Ross, 4 John. Ch. Rep. 388. Jackson v. Winnie, 7 Wend. 47.) As fast as the devisees arrive at the age of twenty-one, the estate vests as to those so coming of age, and those who have vested estates are, as I suppose, entitled to have a partition.
    As to those who have not yet come of age, they have no estate, but only a possibility. If they shall die under age, the shares which they would have taken descend, or rather, having descended at the testator’s death, vest beneficially as well as legally in the heirs at law.
    The bill of complaint in this cause assumes that all the children of the testator’s sisters and brothers referred to in the will took, by the will, vested estates in the premises of which partition is sought, and are tenants in Common of equal shares. From what has been said it is apparent that this is an erroneous view of the case. The bill of complaint shows that three of the devisees were, at the time when it was pleaded, under age. Those persons, upon the principles before mentioned, had no estate in the premises.
    The complainants therefore are not entitled to any decree in the present state of the case. I suppose that upon a bill properly framed partition might be made of the premises, or of the proceeds after a sale thereof, among the devisees who are of age, and the grantees of those who have conveyed, and that (in case of a sale) the proceeds of that portion of the premises the title to which is contingent might be invested, under the authority of the court, for the benefit of the persons who should eventually become entitled. But the bill must set out the title of the parties truly, and the heirs at law must be made parties in their character of heirs.
    The order will declare the exception to the master’s report to be well taken, that the plea is untrue and is not supported by the evidence which has been taken, and that the same is overruled; but that inasmuch as it appears that the proper parties are not before the court, to enable it to proceed to order partition to be made of the premises therein mentioned, and that the bill of complaint is defective in form and substance, the cause do stand over to enable the complainant to procure the said bill to be amended in case he shall be advised so to do; and that in case said complainant does not proceed to procure such amendments within a reasonable time, the defendants may move at some subsequent motion day or term, for a decree, dismissing said bill, with costs; that in case said amendment shall be made, and said cause be proceeded in, no interlocutory costs be taxed against either of the parties upon said plea or exceptions ; and that in case of such amendment being made, the defendant John Hoxie may insist, by way of answer, upon the matter contained in his said plea.

      A Thompson, for the complainant.

      M. T. Reynolds, for the defendant J. Hoxie.
   The Chancellor.

Under the circumstances of this case I am inclined to think the defendant J. Hoxie, who had put in a plea to the whole bill, was not entitled to except to the master’s report. Issue having been joined upon his plea, if that issue should be found in his favor the bill would be dismissed as of course ; and if the plea was overruled as false, the bill as to him was admitted to be true, and was to be taken as confessed. But as that question does not appear to have been considered before the vice chancellor, I shall not pass upon it here. The real question presented upon this appeal is, whether the nephews and nieces of Luke Hoxie took vested estates in prcesenti in his residuary estate, under his will, or whether there was an interest undisposed of during their minorities which is now vested in his heirs at law. This must depend upon the construction of the will itself when taken in connection with certain provisions of the revised statutes. The premises in question are a part of the residuary estate of the testator, who died in 1830. After devising and bequeathing a portion of his property among his relatives, he gave the residue of his estate to the children of his brothers and sisters, by the following residuary clause in his will: “ Also that the remainder of my “ property, after paying the charges incident to my sickness, “ and after releasing one year’s rent to M. & F. of the farm “ they now occupy, to be divided equally among the chil dren of my sister Mary, my brother Solomon and my brother John, when they shall severally become of age.” The vice chancellor arrived at the conclusion that, under this will, the several minor children of the brothers and sister of the testator took mere contingent interests, by way of executory devise, in the residuary estate ; depending upon the contingency of their arriving at the age of twenty-one respectively; and that in the mean time the legal estate descended to the heir at law of the testator. In this I think he was clearly wrong. Even before the revised statutes a future estate was not contingent where the devisee was in esse and ascertained at the death of the testator, and where nothing could prevent the estate from vesting in possession if the devisee lived until the time appointed for that purpose. The estate or interest, therefore, which was given to the infant devisees in this case was a vested estate, which upon the death of the devisee under age would have descended to his own children, or heirs at law, and not to the heirs of the testator. The estate is not given to them if they shall arrive at the age of twenty-one, but it is to be divided among them when they respectively attain the age of twenty-one. In the case of Rogers v. Ross, (4 John. Ch. Rep. 388,) the court appears to have supposed that when the enjoyment of the estate was postponed during the minority of the devisee of the whole residuary interest, the heir at law would take the legal estate in the mean time in trust for the infant, although the infant devisee was himself in existence and capable of taking an immediate vested interest. The decision of that question, however, was not necessary in the case then before that court; as the only materia] enquiry there was, whether the infant devisee was entitled to the beneficial interest in the rents and profits of the estate during the suspension of the absolute right of enjoyment. In the case of Farmer v. Francis, (2 Bing. Rep. 151,) upon a case sent from the vice chancellor to the common pleas, which was very much like the one under consideration except that the legal estate was devised in terms to trustees, the court held that the legatees took the whole beneficial interest in the rents and profits during their minority, and that if it had not been for the intervention of the trustees the legal estate would in the mean time have vested in the infant devisees, instead of the heir at law. In that case as in this, the residuary estate was to be divided, share and share alike, between the devisees in remainder who should be living at the death of their mother and grandmother, when and as they should respectively attain the age of twenty-one years.

The construction of a will must depend upon the intention of the testator, to be ascertained from a full view of every thing contained within the four corners of the instrument. And where, from the will itself, it is evident that the testator meant that the heir at law, or any other person, should take the legal estate for the benefit of the real devisee, the court will consider the estate as devised in trust, although no formal words of devise to the trustee are used. But where it is clear that a person in esse, and capable of taking the legal estate at the time of making the will, was intended to have the whole beneficial interest in the estate during his minority, as well as afterwards, and there are no words in the will indicating an intention to give the legal estate in trust to another person for his use, I can see no good reason for giving the legal estate to the heir at law, as the trustee for the infant, instead of giving it to the infant himself to be taken care of in the mean time by his legal guardian. In this case there is no doubt that the testator intended his nephews and nieces should have the whole beneficial interest in his residuary property, from his death, to be set off to them, or put into their actual possession, when they should respectively attain the age of twenty-one. But he does not appear to have had any definite idea as to where the legal title should remain in the mean time. And as this will was made since the adoption of the revised statutes, it would be wrong to give it such a construction as to create an illegal trust, and thereby to defeat the object of the testator, when by construing it as an immediate devise to the objects of his bounty the devisees will take the same legal and equitable interest in the property which he intended they should have. If Chancellor Kent was right in supposing that the heir at law, in a case of this kind, would by the common law take the legal estate, by implication, as a naked trustee for the devisee, then the operation of the 45th and 47th sections of the article of the revised statutes relative to uses and trusts, (1 R. S. 727,) converted the whole beneficial interest in the subject of the devise into a legal estate in the devisees. The 45th section provides that every estate and interest in lands shall be deemed a legal right, cognizable as such in courts of law, except when otherwise provided for in that chapter of the revised statutes. And by the 47th section the person entitled to the actual possession of land and to the rents and profits thereof, by virtue of any grant, assignment or devise, has a legal estate in the land, of the same quality and duration and subject to the same conditions as his beneficial interest. As this is not the case of an express trust, within any of the subdivisions of the 55th section of that article, it seems to follow that the devisees have a legal estate in the rents and profits of the premises, during their respective minorities, to the extent of the beneficial interest in the property which the testator intended to give to them by his will.

Again, if the testator intended to give to the nephews and nieces who were under age at the time of his death future estates in his real property, to vest in possession upon their attaining the age of twenty-one, the law has given to them the rents and profits of the premises in the mean time, as the persons presumptively entitled to the next eventual estate. I am satisfied, however, that in this case the will of the testator cannot be carried into effect, under the provisions of the revised statutes, according to his intent appearing from the will itself, in any other way than to consider the infant devisees as taking the legal estate, in their several shares, from the death of the testator; but to be held as tenants in common among those who were under twenty-one until they should respectively attain to that age. And that the testator contemplated some process by which the share of each devisee in the real estate was to be partitioned off to him when he became of age, in the same manner as the executors w'ould under his will be bound to assign to him his share of the personal estate at that time. The result, therefore, is that no interest in the testator’s property, legal or equitable, descended to the heir at law, and that the master’s report was right in declaring that the rights and interests of the several parties in the premises were as set forth in the complainant’s bill. So much of the decree of the vice chancellor as allows any part of the exception to the master’s report, and as declares that the proper parties are not before the court and that the bill is defective in form and substance, together with the consequential direction founded upon such erroneous conclusion of the vice chancellor, must be reversed with costs, to be paid by the defendant John Hoxie. And the exceptions to the master’s report must be overruled with costs,and the report confirmed. As it appears by the report of the master that a sale will be necessary, there must be a further reference to him to en-quire and report as to general liens ; to the end that on the coming in and confirmation of that report, such decree for the sale of the premises may be made as may be just. All further questions and directions are in the mean time reserved; and the proceedings are remitted to the vice chancellor of the fifth circuit, so that this decretal order may be carried into effect before him.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Humbert and others vs. The Rector, &c. of Trinity Church.
    Where the complainant has a concurrent remedy in a court of equity and in a court of common law, time is as absolute a bar in equity as it is at law.
    When it appears upon the face of the complainant’s bill that the suit is barred by lapse of time, the defendant may demur to the bill on that ground; and it is not necessary to set up that defence by plea in such a case.
    On a bill in chancery for the recovery of the rents and profits of real estate, when it appears from the bill itself that the premises have been held adversely by the defendant for more than twenty years, if the complainant’s case comes within any of the exceptions in the statute of limitations, the facts bringing the case within the exception must be stated in his bill, or the defendant may demur.
    May 28.
    This was an appeal from a decree of the vice chancellor of the first circuit allowing a demurrer to the complainants’ bill, and dismissing the bill with costs. ' The bill was filed by the complainants, in behalf of themselves and of the other descendants of Annetje Jans Bogardus, and the heirs at law of her children, grand children, and devisees, for the recovery of certain tracts of land in the city of New-York, in the possession of the defendants; and for an account of the rents and profits of the same. Various objections were raised by the demurrer to the complainants’ right to discovery or relief ; and among cithers, that it was not alleged in the bill that the complainants, or those under whom they claimed title to the lands in the possession of the defendants; had been in possession of any part of such lands, since 1785; nor was it alleged that the defendants since that period had ever admitted or acknowledged that the complainants, or those under whom they claim title, had any right, title, estate, or interest therein, or in the rents and profits thereof; but on the contrary, that it appeared from the face of the bill that from 1785, down to the time of the commencement of this suit, the defendants had been in the exclusive and uninterrupted possession of the premises, under claim of title.

      H. W. Warner & G. Wood, for the appellants.
    The bill is sufficiently certain as to the complainants’ title. And the defendants’ possession is also stated with sufficient certainty. (Harrison v. Hogg, 2 Ves., jun. 327.) The bill shows an equity for a discovery from the defendants. (3 Mad. 490. Leroy v. Veeder, 1 John. Cas. in error 417. 3 John. Ch. R. 467. 4 Id. 294.) We have a sufficient number of parties before the court. They are very numerous. Where a great many are interested, it is not necessary to make all parries. (Rouse v. Barker, 4 Brown Parl. Cas. 660. 2 Vernon, 214. Norris v. Le Neves, 3 Atk. 83. Aston v. Lord Exeter, 6 Ves., jun. 293. Walburn v. Ingilby, 1 Mylne & Keene, 77. 1 Story Eq. Jur. 574, 5.) Fraud prevents the application of the statute of limitations.

      P. A. Jay & D. B. Ogden, for the respondents.
    The complainants’ bill shows no sufficient title in them to any relief. It shows that some of them have no title, and ought not to have been parties. It also shows a good title in the defendants, to the lands in question. It does not set forth the claims of the complainants with sufficient certainty. On demurrer we may raise t ,e objection of adverse possession. (2 Sch. & Lef. 633. Hardy v. Reeves, 4 Ves., jun. 479. Foster v. Hodgson, 19 Id. 180. Mutloe v. Smith, 3 Anstr. 709. Cholmondeley v. Clinton, 1 Tur. & Russ. 107. 4 John. Ch. R. 299. Mitf. Pl. 37.) Defendants are not bound to disclose their title deeds, nor any thing which will destroy their defence of the statute of limitations, or invalidate their title. (2 John. Ch. R. 150. 7 Id. 90. Jer. Eq. Jur. 262, 3.) Equity will not decree an account of rents on application of a party who has made no entry, or who is not in possession, or who has not recovered at law. (Hutton v. Simpson, 2 Vernon, 724. Barnwall v. Simpson, 3 Ridg.

      Cas. 66. Norton v. Frecker, 1 Atk. 525. Pulteney v. Warren, 6 Ves. jun. 91. Crow v. Terrel, 3 Mad. 179.) If a discovery is asked to aid relief where the complainant is not entitled to relief, the bill for the discovery will be bad. A bill, in a case of fraud, must be filed within five years after discovery of the fraud. Presumptions will be raised to quiet an ancient possession. (Cowp. 215.)
   The Chancellor.

Various objections to the bill in point of form are raised by the demurrer, some of which I think are well taken; but as these might probably be obviated by amendments of the bill, I prefer to put my decision in this case upon an objection which goes to the merits, and which unquestionably cannot be obviated in any form of proceeding which can be adopted, either in this court or elsewhere. That objection is that the rights of the complainants, if those under whom they claim title had such rights as stated in the bill, are barred by lapse of time.

It is evident from the complainants’ own showing that the defendants had been in the exclusive possession of the premises in controversy, claiming the same as their own, for more than forty years previous to the commencement of this suit; and no sufficient excuse is shown to take the case out of the general rule, that a suit in equity is barred by lapse of time if it is not instituted within twenty years after the complainants’ right to commence proceedings in this court accrued. This rule is so well settled that it would be a useless waste of time to review all the decisions in this country and in England on the subject. I will therefore merely refer to a few of the more recent cases in which the existence of the rule is recognized. (Cholmondely v. Clinton, 4 Bligh’s Rep. O. S, 1, per Lords Eldon and Redesdale. Fenwick v. Macey’s Ex’rs, 1 Dana’s Rep. 278. Elmendorf v. Taylor, 10 Wheat. Rep. 152. Byrne v. Frere, 2 Malloy’s Ch. R. 157. Terril v. Murray, 4 Yerg. Rep. 04.) Here if the complainants would have had a right to come into this court, upon the case made by the bill, had such bill been filed in time, they still had a concurrent remedy in a court of common law. And in cases of that kind, time is as absolute a bar to discovery or relief in equity as it would be in a suit at law, in analogy to the statute of limitations.

It was formerly doubted whether a defendant in equity could by demurrer make the objection that the remedy was barred by lapse of time, or whether he must not resort to his plea. But it now seems to be settled, that if it appears upon the face of the bill that the suit is barred by lapse of time the defendant may demur; and that if the case is within any of the exceptions of the statute the complainant must state the fact in his bill. (Dunlap v. Gibbs, 4 Yerg. Rep. 94. Hoare v. Peck, 6 Sim. Rep. 51. Cuthbert v. Creasy, 4 Bligh’s Rep. O. S. 125. Wisner v. Ogden, 4 Wash. C. C. Rep. 631. Fyson v. Pole, 3 Young Coll. Rep. 266.) Whether the complainants’ case, therefore, is one of concurrent jurisdiction, or of equitable cognizance only, the remedy was barred by lapse of time long before the filing of this bill. And the decision of the vice chancellor, allowing the demurrer and dismissing the bill, must be affirmed with costs.


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    Scott vs. The Eagle Fire Company and others.
    Where an incorporated company becomes insolvent before its surplus funds have been apportioned, as dividends, among its stockholders, such surplus funds, as well as the capital stock of the company, must if necessary be applied to satisfy its debts ; to the exclusion of any prior claim of the stockholders on such surplus.
    The unearned premiums, received by an insurance company in advance upon policies of insurance, are not surplus profits which the directors are authorized to distribute as dividends among the stockholders of the company, but are the ordinary means, or primary fund, out of which the losses upon such policies should be paid.
    It is the duty of the directors of an insurance company, instead of dividing the unearned premiums among the stockholders, to reserve at all times a sufficient fund, in addition to the capital stock, to meet the probable losses on risks assumed by the company and which have not expired.
    The directors of a joint stock corporation may be compelled to divide the actual surplus profits of the company, among its stockholders, from time to time, if they neglect or refuse to do so without any reasonable cause. But if they abuse their power to make dividends of surplus profits, by dividing the unearned premiums received by them, without leaving a sufficient fund, exclusive of the capital stock, to satisfy the probable losses upon risks assumed by the company, it seems they will be personally liable to such creditors of the company, if in consequence of extraordinary losses the company should become insolvent so as to be unable to pay its debts.
    The Eagle Fire Insurance Company was one of the corporations rendered insolvent by the great fire in New-York, in December, 1835; and this bill was filed by some of the stockholders, in behalf of themselves and others, claiming all the surplus funds of the company in the hands of the receivers, beyond the capital stock of the company at the time of the fire which produced the insolvency. It appeared by the bill and answer, that at the time of making the last dividend, a little short of six months previous to the great fire, the surplus fund, beyond the capital stock and the dividend then made, was about $73,000, if all the debts due to the company were good and collectable; at which time the amount of property remaining insured by the company was about ten millions of dollars. At the time of the fire this surplus fund had increased, by the receipt of new premiums, &c. to about $97,000 ; but the total amount of property at risk at that time was not stated in the pleadings. The cause was heard on bill and answer, before the vice chancellor of the first circuit. He decided that the complainants were not entitled to the funds of the company beyond the amount of the capital stock ; but that the creditors of the corporation were entitled to have the surplus fund, as well as the capital stock, applied in payment of their debts. The bill was therefore dismissed with costs. From this decision and decree the complainants appealed to the chancellor.
    May 28.

      J. Anthon, for the appellants.
    The capital of a corporation being entire, the adventurers have no other fund but this to look to for the reimbursement of their losses. The stockholders are entitled from year to year to all the surplus funds remaining, over and above the capital, after the payment of all the losses arising out of the business of the year. No adventurer has a right to claim the application of the surplus profits, earned on the closed business of former years, to the payment of his loss on a contract of a subsequent year. If the risks of a current year, by an extraordinary casualty, terminate in losses exceeding the capital» the adventurers of that year (the capital being entire) must c]a¡m pro rata on that capital. A surplus on closing the operations of any given year being ascertained and declared, an omission to divide it does not make it part of the capital, so as to subject it to the demands of future adventurers ; but it remains a fund held in trust by the company for future distribution among the stockholders. A contrary rule would enable a corporation to increase its capital ad libitum, without the assent of the legislature. This conclusion is confirmed by the charter of the Eagle Fire Company, which points out a precise and specific mode of increasing the amount of the capital; and this can be done in no other way. The stockholders, therefore, who have either actually purchased this surplus or earned it by the risk of their funds, are the only persons entitled to it; and upon the account prayed for in the bill, the adventurers of the past year can only insist that the earnings of that year shall be retained to keep the capital pro rata entire. (4 Laws of New-York, p. 564, 29th sess., ch. 152. Wood v. Dummer, 3 Mason, 311.) The company—quasi company—cannot make a contract pledging the surplus funds as well as the capital for the payment of the debts of the company. Its powers are limited by the charter to the legal capital, which it can alone bind by contract. The consent of the stockholders would not give such powers for the same reason. The directors are the mere agents of the stockholders, limited in their powers by the charter, and cannot bind them beyond the legal capital. If the stockholders are competent, by acquiescence or otherwise, to put their earned profits or any other portion of their profits at risk, it cannot be in the character of stockholders; the charter forbidding it. It can be done only in the character of underwriters, and then as they would be personally responsible, they would in their personal character receive the profits and be subject to the loss.

      G. Griffin, for the respondents.
    It is a universal principle of law that all the property of a debtor is liable to the payment of his debts. The universality of this principle applies as well to corporate as to individual debtors. At the time of the fire, the accumulated profits in question were the property of the company. The act incorporating the Eagle Fir; Ins. Co., authorizes (sect. 4) the' increase of the stock of the company to one million of dollars. The directors had the power to let all the profits accumulate with the view of adding them to the capital, provided it was done with the acquiescence of the stockholders themselves ; and provided also that the addition of the accumulated profits did not swell the effects of the company to an amount exceeding one million of dollars. At any rate, the illegality, if any, would be a matter to be moved by the attorney general; and it would not be competent for the acquiescing stockholders to complain. (Trustees of Vernon v. Hill, 6 Cowen, 23.) The accumulated profits would, in such case, amalgamate with the capital stock, and help to form a general fund for the payment of the creditors of the company. The directors had an unlimited discretion as to the “ portions” of the profits that were from time to time to be divided. If they had grossly abused their discretion, either as to the times or the amounts of the dividends, the court of chancery might perhaps have interfered on the complaint of the stockholders, had such complaint been seasonably interposed. The notion is unfounded that the claims of the creditors of the company are confined to the numerical sum of five hundred thousand dollars which composed the original capital of the company. Even if the distribution of the surplus profits might originally have been exacted by the stockholders, they afterwards, by permitting such surplus profits notoriously to remain in the hands of the corporation, and to form an integral part of its effects, on the credit of which it received premiums and underwrote policies of insurance, virtually pledged such profits to the payment of any losses .which might accrue under such policies. The directors were in truth the agents of the stockholders; and if the directors were allowed by the stockholders, even incorrectly, to amalgamate the surplus with the original capital, and thus gain a spurious credit for the company, the principals must suffer, and not innocent creditors. The suvpjus ceased to exist the moment that debts accrued sufficient to absorb it. The same fire which brought into existence our claims against the company, reduced to annihilation the surplus for which our opponents contend. If the doctrine advocated by my learned opponent is correct, it follows as a necessary inference that the moment a dollar of profits is earned, it vests in the stockholders at once, whether a dividend of it has been declared or not; that the creditors have nothing to do, in any case with the profits ; and that xthe company holds such profits only as the trustee of its stockholders.
   The Chancellor.

The claim made by the appellants in this case is founded upon the erroneous supposition that it is the duty of the directors of an insurance company to divide all its surplus funds beyond its capital stock, periodically, among its stockholders; leaving such capital stock alone as the fund to which the creditors of the company, who become such by the loss of property insured, are to look for remuneration. But as I had occasion to say in another case, (De Peyster v. The American Ins. Co. and others, In Chan. 25th May, 1837,) the capital stock of an incorporated insurance company is not the primary or natural fund for the payment of losses which may happen by the destruction of the property insured. The charter of the company contemplates the interest upon the capital stock? and the premiums received for insurance, as the ordinary fund out of which losses are to be paid. And the surplus of that fund, after paying such losses, is surplus profits within the meaning of the'charter; which surplus profits alone are to be divided, from time to time, among (he stockholders. The unearned premiums received by the company upon which the risks are still running, and which may therefore all be wanted to pay losses which may happen upon those risks, are not surplus profits which the directors are authorized by the charter to distribute among the stockholders. The capital stock of the company is a special fund, provided by the charter, to secure the assured against great and extraordinary losses which the primary fund may be found insufficient to meet. And if it becomes necessary at any time to break in upon this special fund, to pay such extraordinary losses, it must be made good from the future profits of the company before any further dividends of those profits can be made. (1 R. S. 590, § 4.) The directors of an insurance company have therefore no right to divide all the interest or premiums on hand at the time a dividend is declared; but they should always leave a surplus fund, in addition to the capital stock, sufficient to meet the probable losses on the risks then assumed by the company and which have not then expired. And if any losses accrue upon such risks, whether more or less than the whole capital of the company, that surplus or contingent fund must be applied to satisfy such losses. The fact therefore that the amount of the losses in this case was more than all the funds of the company, including its capital, furnishes no reason whatever for taking the natural and primary fund for the payment of losses, and giving it to the stockholders, to the injury of the creditors of the company.

, As the directors are bound to exercise a proper discretion in making dividends of surplus profits, if they abuse that power by dividing the unearned premiums without leaving sufficient to satisfy the probable losses, they may, in case of any extraordinary loss which is sufficient to exhaust the whole capital and more, make themselves personally liable to the creditors of the company. On the other hand, should they without reasonable cause refuse to divide what is actually surplus profits, the stockholders are not without remedy, if they apply to the proper tribunal, before the corporation has become insolvent. But after such insolvency it would not only be improper but it would be highly inequitable to take such surplus fund and divide it among the stockholders; leaving the insured, whose premiums had contributed to the increase of that fund, to sustain a loss. In this case the fund remaining on hand, after the last dividend, in. July, 1835, was certainly not more than a prudent board of directors ought to have retained to meet the probable losses which might occur upon the ten millions of property then insured by the company ; as it was less than three fourths of one per cent upon the amount at risk. And before the time i'or making the next semi-annual dividend arrived, this extraordinary calamity, which was equally destructive to the interests of the stockholders of the company and of the assured, gave to the latter a preferable claim upon all the funds and property of the company.

For these reasons I am perfectly satisfied that the decision of the vice chancellor was right. The decree appealed from must therefore be affirmed with costs.


author: The Chancellor

text:
    Tibbits vs. Tibbits and others.
    In partition suits where an actual partition of the premises is decreed, the costs of the complainant, and of all the defendants who have appeared in the cause, arc to be taxed as between party and party, and the aggregate amount of the several bills apportioned and charged upon the parties to the suit, according to their respective rights and interests in the premises; and the parlies whose taxed bills exceed their rateable proportions of the whole costs, are entitled to execution against those whose taxed bills are less.
    Form of the decree, as to, the costs of the guardians ad litem of infants, in partition suits, where an actual partition is decreed.
    June 15.
    This case came before the court, upon the report of commissioners in partition as to the division of the premises between the several parties according to their respective interests therein, for a final decree ; and for directions as to the costs of the suit.

      S. G. Huntington, for the complainant.
    D. Buel, jun. for the defendants.
   The Chancellor

decided that the costs of the complainant and of all the defendants who had appeared in the cause were to be taxed, as between paity and parly, and the aggregate amount of the several bills of costs as taxed was then to be apportioned between the complainant • and the oilier parties, according to their respective rights and interests in the premises as ascertained and settled by the decree; and that the final decree should also direct that the several parties entitled to such costs have execution therefor, according to the course and practice of the court in such cases; to wit: that the several parties whose taxed bills of costs and expenses should exceed the amount of their respective rateable proportions of the whole costs in the suit, should have execution for such excess against the other parties respectively, for the amount which the several taxed bills of such other parties were less than.the amount of their several proportions of the whole costs in the suit; that the costs of the guardians ad litem of the infant defendants respectively, to the extent of the rateable proportions of the several infants of the w'hole costs of the suit, were, by the decree, to be declared to be a lien upon their respective shares in the premises as assigned to them by the commissioners, in favor of their several guardians ad litem ; which rateable proportions of the costs, as well as the shares or the proportions of the costs payable by such infants to other parties in the suit, the general guardians of the infants respectively, were, by the decree, to be authorized and directed to pay out of the rents and profits of the shares of the premises which were so assigned to such infants respectively, or out of any other monies in the hands of such general guardians, or which might come to their hands, belonging to such infants; and that the several guardians ad litem must, by the terms of the decree, be at liberty to apply to the court for further directions, if necessary, as to the payment of such costs.


text:
    Vail vs. Remsen, executor, &c.
    A party who has appealed from an order of reference made by a vice chancellor, cannot proceed to carry the order into effect against the adverse party pending the appeal, as the two proceedings are inconsistent with each other. In such a case the respondent may apply to the appellate court, to dismiss the appeal, upon the ground that the proceeding by the appellant upon the order appealed from is a waiver of the appeal, or to compel him to elect in which court he will proceed.
    But an application to stay the proceedings in the court below, on the ground that the adverse party is irregular in proceeding in that court pending his appeal, must be made to the vice chancellor before whom the irregular proceedings are carried on.
    August 7.
    This was an application to set aside the proceedings of the complainant for irregularity. A decree had been made by the vice chancellor of the fourth circuit, referring it to a master to take an account of the complainant’s damages, under a covenant of warranty of the defendant’s testator, and directing the defendant to pay the amount reported due, with costs, upon the coming in and confirmation of the master’s report. The defendant excepted to the master’s report, upon the ground that the master had adopted an erroneous principle by which the amount of damages was enhanced. The vice chancellor allowed the exceptions, and referred it back to the master to correct his report and to reduce the allowance for damages accordingly. JFrom this order made upon the exceptions, the complainant appealed to the chancellor; and gave the proper notices and security to render his appeal effectual. Subsequently, and before the hearing of the appeal, he proceeded before the master, under the order so appealed from, and procured the report; and he was proceeding to collect the amount of this last report from the defendant, together with the costs of the suit.

      J. M. Andrews, for the defendant.
    J. Ellsworth, for the complainant
   The Chancellor.

The complainant’s solicitor is clearly wrong in supposing that he .has a right to proceed and carry into effect a decretal order, which he has himself appealed from, at the same time that he is proceeding on the appeal to reverse that order and to confirm the original report of the master. The two proceedings are wholly inconsistent with each other, and either the one or the other must be abandoned. If the appellant succeeds in the appeal after he has collected the damages and costs which he would be entitled to under the order appealed from, the defendant will have been uselessly subjected to the costs of two references, and of two decrees, instead of one. Where an appeal is effectual to stay the proceedings of the respondent upon the order or decree appealed from, it seems to follow that it is either irregular for the appellant to proceed under such order or decree, or that his proceeding under it, subsequent to the appeal, will be considered as an abandonment of the appeal.

If the respondent in this case, in his notice of the present application, had asked for a dismissal of the appeal or that the appellant should be compelled to elect, or if he had asked for such order as he might be entitled to upon the facts stated in the affidavit of his solicitor, I should have had no difficulty in applying the proper remedy. But as the proceedings which he seeks to set aside, on this notice, are proceedings before the vice chancellor upon the order appealed from, and not proceedings before the chancellor upon the appeal, an application to set aside such proceedings upon the mere ground of irregularity, is more properly addressed to the judicial officer before whom the alleged irregularity has taken place. I am also inclined to think that the vice chancellor has jurisdiction to compel the appellant, either to abandon his proceedings under the order appealed from or to consent to dismiss his appeal.

The present motibn must be denied, but without costs; and without prejudice to any other application which the respondent may be advised to make, either before the chancellor or the vice chancellor of the fourth circuit.


text:
    Holden vs. Gilbert.
    Where a mortgage, payable by instalments, contained a power of sale of the' premises if any instalment of principal or interest remained unpaid for 30 days after it became due ; the surplus arising from such sale to be paid to the mortgagor after deducting the interest and costs, and the whole debt secured by the mortgage; Held that this clause was onlyintended' to authorize a statute foreclosure, in case of the non-payment of the instalments within the time prescribed, and with the right to retain for the whole debt in case the instalment and costs were not paid before the sale ; but that it did not make the whole debt due and payable by a mere neglect to pay the instalment within the time prescribed.
    A set-off may be allowed in a foreclosure suit, under the provisions of the revised statutes. But the debt which is sought to be set-off must be one which was due and payable at the time of the commencement of the suit. And to enable the defendant to avail himself of such set-off, if it is not li. quidated by judgment, he must appear and set up such defence, cither by plea or answer to the bill.
    A judgment at law against the complainant in favor of the defendant in equity may be offset, on motion, against a decree in equity, in favor of the complainant against such defendant, for the payment of money due upon a mortgage.
    But a court of equity will not permit a defendant to offset against the complainant, in a suit in that court, a demand against him as a mere surety for the debt of a third person, for which the defendant has security upon a fund belonging to the principal debtor, sufficient to satisfy the debt. •
    August 21.
    This case came before the court upon a bill of foreclosure taken as confessed against the defendant, for a final decree upon the master’s report of the amount due ; and several questions were raised as to the construction of the bond and mortgage, relative to the payments of principal and interest and as to how much had become due. A petition was also presented, on the part of the defendant, for leave to offset a judgment which he had purchased subsequent to the filing of the bill, against the complainant and another person for whom the complainant was surety; and also for leave to offset three notes purchased by the defendant, and which the complainant had endorsed as surety for the drawer, but which notes had not yet become due and payable. The mortgage was conditioned for the payment of $4000 with interest in four equal annual insta 1-merits from the 29th of October, 1836; with a power of sale in case of the non-payment of the $4000, or of any instalment and the interest thereon for the space oí thirty days after the same became due; the surplus arising from the sale, if any, to be paid to the mortgagor after deducting the costs and charges of the sale and also the whole sum of $4000 and interest not paid. It appeared by the affidavits of the complainant, in opposition to the defendant’s petition for an offset, that the judgment debt and the notes had been secured, by an assignment, made by the real debtor, to the defendant and others as assignees for the benefit of his creditors, and that the judgment was among the preferred debts; and that an execution had also been taken out on the judgment and levied upon real estate of the complainant in this suit, more than sufficient to satisfy the judgment debt.

      J. Rhoades, for the complainant.
    At the time of the default the defendant had no claim against complainant if he has now. He was not then the owner of the judgment and notes. It is a fair inference that he borrowed the notes of Grant to defeat the complainant’s suit. The three notes are not yet due, and as to them they are therefore out of the question. The judgment is provided for by the assignment; so are the notes. The whole mortgage money is by the condition of the mortgage now due. The complainant has a right to sell the premises and retain his whole debt, interest and costs. The assigned property is the primary fund for the payment of the judgment and notes. The complainant was a mere accommodation endorser, and should not be compelled to pay them until the defendant has exhausted this primary remedy. The amount due on the notes is not liquidated; they are not therefore a subject of set-off. (Dunkin v. Vandenbergh, 1 Paige, 624.) The defendant does not pray in his petition nor ask in his notice that he may be allowed to put in an answer and claim a set-off. If the defendant is a bona fide assignee of the judgment and notes, he took them subject to all equities as between the complainant and Grant. (2 Vern. 692, 765. 1 Ves. 123. 1 Eq. Cas. Abr. 44, 45. Clute v. Robinson, 2 John. Rep. 595,
      in error.) Equity would not allow Grant to exact payment from the accommodation endorser until the primary fund was exhausted. Uncertain damáges are not a subject of set-off. (Duncan v. Lyon, 3 John. Ch. Rep. 351. Livingston v. Livingston, 4 Id. 292.) The following also are cases in point: Green v. Darling, 5 Mason, 201. Pierson v. Meaux, 3 A. K. Marsh. 6. Hackett v. Connett, 2 Edw. 73. Wythe v. O’Brien, 1 Sim. & Stu. 551. Dangerfield v. Rootes, 1 Munf. 529. The defendant can have no relief under his general "prayer, inconsistent with the relief specially prayed for. (Colton v. Ross, 2 Paige, 396.)

      S. Stevens, for the defendant.
    There is but one instalment due on the mortgage. The true construction of the condition of the mortgage is, that if the property is sold in consequence of the non-payment of any instalment, the mortgagee may retain the whole amount of mortgage money. But if the defendant should now pay or otherwise satisfy the first instalment, the mortgage could not be foreclosed for the residue. The judgment owned by defendant is sufficient to satisfy the instalment now due. There is no more objection to applying to the court for the set-off of this judgment after a decree pro confesso than there would be' to bring money into court to extinguish the mortgage and costs. The notes can be applied on the other instalments as they become due." The prayer is abundantly sufficient to embrace all the relief necessary in the case.
   The Chancellor.

The master was clearly right in the conclusion at which he arrived, on the reference, that only one instalment of $1000, and the interest on that instalment, has become due. The provision in the power of sale, giving the right to advertise and sell after a default for thirty days in paying the instalments and interest, and the authority, in case of such sale, to retain the whole principal, and interest due and to become due, do not change the construction of the mortgage as to the time when the payments are to become payable, so as to authorize a suit upon the bond, or a foreclosure of the mortgage in equity. They are ( only applicable to a proceeding to foreclose by a sale, under the statute, by advertising for six months. If the mortgagee elected to proceed in that way, he must wait thirty days after the instalment became due, before he could advertise ; and then if the instalment, with interest and costs, was not paid before the sale, he was to retain the whole mortgage money and interest, although it had not all become payable according to the condition of the bond and mortgage. This latter clause was probably unnecessary ; as the mortgagee would have had the right, upon a statutory foreclosure and sale of the whole premises, to retain to the full extent of his mortgage and interest, under a power of sale in the usual form; without a special stipulation to that effect in express terms, as in this case. The complainant therefore is not entitled to an absolute decree of sale for the whole debt. He is only entitled to the usual decree in cases where only a part of the mortgage money has become due, and where the premises are so situated that they cannot be sold in parcels ; that is, to sell and to retain the whole amount of mortgage money, and interest and costs, unless the amount now actually become due and the costs of the suit are paid before the sale; with liberty to apply to the court fora sale to satisfy future instalments, when they become due, if the amount now due is paid w'ithout a sale.

The remaining question to be disposed of, is the defendant’s claim to offset the judgment and the notes which he has purchased since the comemcement of this suit. By the revised statutes set-offs are to be allowed in this court, in suits brought here to recover or obtain the payment of money, in the same manner and with the like effect as in actions at law. And this court has recently decided that a suit in chancery to obtain satisfaction or payment of monies due on a mortgage, is a suit in which such a set-off may be made, by the defendant against whom or whose property the complainant is seeking to obtain a decree for the recovery of the mortgage debt. (Chapman v. Robinson, 6 Paige’s Rep. 627.) But no set-off can be allowed in a foreclosure suit, under the provisions of the revised statutes, which could not be offset in analogous cases at law. It is well settled that in actions at law no debt can be offset under the statute, so as to diminish the amount of the judgment to be recovered, unless such debt existed against the plaintiff, in favor of the defendant, at the time of the commencement of the suit, and had then become due and payable. And to avail himself of the set-off the defendant must appear and defend the suit, and plead or give notice of such set-off, so as to enable the adverse party to bring witnesses to contest the claim. In the present case it is not pretended that the defendant was the owner either of the notes, or of the judgment, at the time the subpoena was served in this suit; and neither of the notes had become due at the time when the complainant was entitled to a final decree upon his bill taken as confessed. If there was any agreement on the part of the complainant to have the defendant purchase the notes and judgment, and to receive the same as payments on the mortgage, the defendant should have applied to the court for leave to put in an answer setting up that defence ; as it cannot be tried on the conflicting affidavits of the parties.

A set-off of one judgment against another is allowed on equitable principles, upon motion ; and I am not prepared to say that, in a proper case, a judgment at law, in favor of the defendant, might not be offset against a decree, in faivor of the complainant, for the sale of mortgaged premises to satisfy the debt and costs due to the latter. But in this case it would be wholly inequitable to permit the defendant to offset a judgment which is against this complainant as the mere surety of the other defendant in that judgment, and where the party applying for the offset has in his own hands, as assignee, an ample fund originally belonging to the real debtor, which has been specially appropriated for paying this and other preferred debts. And as to the notes, which are unliquidated debts, and on which the complainant, for aught we now know, may never become liable as endorser, there is no pretence for offsetting them upon motion. If the present instalment with interest and costs is paid, so as to prevent a sale, and the defendant succeeds in obtaining judgments on any of the notes, against the complainant as endorser, in time to meet future instalments before they are collected by a sale of the mortgaged premises, he will then be permitted to apply, by motion, to offsefone liquidated debt against the other, upon equitable principles.

The defendant’s petition must therefore be dismissed with costs, to be taxed as costs in the cause. And the complainant must be permitted to take his decree for sale, &c, in the usual form as before suggested.


text:
    Hawley & King vs. James and others.
    Where a testator died seized of lands in another state, which by his will he devised to his executors and trustees to be sold, and directed the proceeds to be invested in lands in ihe state where he was domiciled at the time of his death, upon trusts which were illegal and void by the laws of that state;
    . Held that there was a resulting trust in favor of the heirs at law, as to the lands devised ; and the -executors and trustees were directed to transfer the legal title to such heirs.
    Where the object for which a conversion of real estate into personalty fails,cither wholly or in part, so that the proceeds thereof are not legally and effectually disposed of by the will of the testator, there is a resulting trust in favor of the heir at law pro tanto.
    The title to real estate, and the validity or invalidity of a devise or conveyance of such estate, depends upon the lex rei sites. And if a devise of real estate upon trust can be carried into effect according to the intention of the testator, and is valid by the laws of that state where the property is situated, the courts of the state where the trustees are found may direct them to carry the will of the testator into effect, although such a devise of real property, situated in that state, would not be valid.
    This was an application to the chancellor for further directions, pursuant to the provisions of the thirteenth section of the decree of the court for the correction of errors in this cause. By the last clause of that section of the decree it was declared that the decree of that court should not be deemed a decision upon the title of the trustees to the lands of the testator situate in Illinois, or elsewhere out of the state of New-York; but that upon the record and proceedings being remitted to the court of chancery, or upon any amended or further bill being filed in that court by any party interested in such lands, the court should proceed thereon and make such order and decree in relation to those lands as might be legal; and without prejudice to any party in consequence of the decree of the court for the correction of errors, and notwithstanding the provision for any such party, in the will of the testator, was by such decree of the appellate court declared to be void.

      August 21.

      The testator died seized of about 40,000 acres of land in the military bounty tract in the state of Illinois. And by the report of a master it appeared that the will was duly executed to pass real estate according to the laws of Illinois in force at the time of the testator’s death; and that the widow was entitled to dower in such lands by the laws of that state. It also appeared by the report, that the legislature of Illinois had adopted, or recognized as in force in that state, the English common law and all acts of parliament of a gen'eral nature in aid of the same as they existed prior to the 4th of James I., with two or three specified exceptions; and that there was no statute in that state inhibiting or modifying trust estates as authorized by the common law.

      J. King, for the complainants.
    The trustees submit the whole matter in relation to the Illinois lands, and believe that the trust ought to be set aside. The trust is valid by the laws of the state of Illinois. The court of chancery of this state has power to compel the sale of the real estate in Illinois; the proceeds to be brought into this court and distributed according to the rights of the parties under the existing decree.

      J. C. Spencer, for the heirs at law.
    The courts of this state have jurisdiction over the subject, in consequence of its being a trust, and the trustees being within the state. Having applied to the court by their original bill, and by the petition for its direction, they cannot object the want of jurisdiction. (Penn v. Lord Baltimore, 1 Ves. sen. 444. Cranstown v. Johnson, 3 Ves. 170, and 5 id. 276. Massie v. Watts, 6 Cranch, 148. Ward v. Arredondo, Hopkins, 213. Story on Confl. of Laws, 455, 456. Mitchell & Nash v. Smith, 1 Paige, 287. Meade v. Merritt, 2 id. 404. Mitchell v. Bunch, 2 id. 615.) That jurisdiction is to be exercised in conformity to the law which governs the species of property which this may turn out to be ; if real property, according to the law of the place where it is situated ; if personal property, according to the law of domicil of the testator. As to the lex situs, see Story on Confl. of Laws, § 363, p. 300; § 424, p. 358. As to personal property, Idem, § 376, p. 309; § 380, p. 312. Under the provisions of the will of the testator, if they could be carried into effect, the lands in Illinois would be equitably converted into money, or into lands in New-York. As the 27th clause of the will directed a sale of the lands in Illinois and a conversion of them into money, it may be regarded as a power for that purpose, and the land be deemed converted accordingly into money, from the time of the death of the testator. (Fitzgerald v. Jerome, 5 Madd. Rep. 35.) The subsequent directions in that clause to invest the proceeds in lands in certain parts of New-York, upon the trusts contained in the will, cannot be executed, because the new lands are to he held for a time and distributed in a manner forbidden by the laws of New-York, and the rents and profits are to be illegally accumulated. A re-conversion into' land cannot therefore take place, and the first conversion into money remains. There may be a conversion and re-conversion, and there may be successive conversions of the same fund ; so that although the last conversion may not take place, the first may remain good. (Leigh & Dalzell on Eq. Conv. ch. 4.) It is physically impossible for the courts of Illinois to execute the directions to convert into land in New-York, upon the trusts of the will, because there can be no such trusts. By the first clause of the decree of the court of errors, the trust term created by this will is declared illegal and void. By the 13th clause of that decree, the estate in remainder after the trust term is declared to be void and contrary to law. The directions for accumulation had been declared void by the court of chancery, and its decree was affirmed by the court of errors. These decrees declare the general law of this state, and govern this and all other cases presenting the same questions. The courts of Illinois would hold, either that there being full directions to sell the Illinois lands* and there being no purpose to which the proceeds were to be applied, which was illegal by their laws, or if the purpose was impossible, yet that the directions to sell and convert into land in New-York might be regarded as distinct and independent directions; that the trustees had an estate for the purpose of selling merely, or a power of sale,, and then the trustees will be deemed to have sold, and to have the money in their hands. In this case the money would be deemed land, and a resulting trust would enure to the heirs at law, in the money; or those courts would hold that the purpose for which the sale was to be made being illegal by our laws, was impossible, and that the purpose having failed, the whole devise fell with it, and that the trustees have no estate in the Illinois lands or any power to sell them. The following cases have a bearing on these alternatives—the doctrine of resulting trust: Hewett v. Wright, 1 Bro. Ch. Ca. 89, 90, Wright v. Wright, 16 Ves. 191, 192. Ashley v. Palmer, 1 Meriv. 300. Mr. Cox’s note to Cruse v. Borley, 3 P. Wms. 22. Ripley v. Waterworth, 7 Ves. 435. Trigonell v. Sydenham, 3 Dowl. 208. Mugy v. Hodges, 2 Ves. sen. 52. Hill v. Cock, 1 Ves. & Beam, 174. Yates v. Compton, 2 P. Wms. 310. Craig v. Leslie, 3 Wheaton, 583. It is submitted that no injustice can be done to the heirs by holding that the power to sell and convert into money is valid, but that the directions to invest the money are invalid, because the heirs here have the resulting trust in the money as they would have in the land. Many difficulties in the transmission of the title would be avoided ; as the whole title of the trustees would clearly pass by their sale, and the adult heirs would be concluded by receiving the proceeds and the minors by the court assenting, and both by the decree of the court. If this, however, is found impracticable, then it is submitted that a simple decree declaring that the trustees had no estate in or power over the Illinois lands, and that they had descended to the heirs at law of the testator, would be sufficient. Still it might be advisable to direct the trustees to release to the heirs at law, although I conceive that the devisees under the will would be in no way bound by such a release ; but they would be bound, being parties in this suit, by the decree. But would not those who are minors be at liberty on coming of age, to show error in the decree ? and would not this render the title precarious ? (See 1 Fonbl. Eq. 82, &c.) In reference to the question whether if the trustees be directed to convey these lands to the heirs at law, they may not also be directed to make partition, and convey to each his respective portion, it may be observed that the cross bill of William James and Henry James, (p. 112 of the case printed for the court of errors,) prays for a partition and division, by commissioners or otherwise. This probably is sufficient to give the court jurisdiction; and a commission may be directed to competent persons in Illinois to make partition, and on the return of their proceedings to this court, a decree may be entered directing the trustees to convey accordingly, and that the adult heirs release to each other, and the court may consent in behalf of the minors. If the disposition of the Illinois lands be invalid for the general purposes of the will, it cannot be sustained for the sole purpose of satisfying the devise to Anna McBride James, made by the 36th clause of the will. By the 8th clause of the decree of the court of errors, the direction to set off land to Anna McBride James are declared to be illegal and void. This is probably because the direction was not to be executed until the expiration of the trust term, which was void; and because the 44th clause of the will included this devise. But whatever may be the reasons and grounds of the decree, it is enough for us to say it is res judicata. It is the general law of the state, that those directions are illegal and void, and this must govern in all cases in which the same question arises. The devise to Anna was part of and connected with the other dispositions of the will, and was obviously intended by the testator as a provision for her in consequence of her father not being a devisee. The will is connected in these parts, and having utterly failed as to one of them, the case contemplated by the testator does not exist, and his intention founded on such a case fails.

      D. D. Barnard, for Anna McBride James.
    I do not dispute the jurisdiction of the chancellor over property abroad of a party over whom personally he has jurisdiction ; though I think he has this jurisdiction only for certain purposes. (2 Paige, 404, (606.) But lands lying in Illinois clearly are in no way affected by our statutes against perpetuities. If, then, a testator in this state devises lands in Illinois, to be held in a way agreeable to the laws of Illinois, though contrary to our statutes, the devise is good. Under the 36th clause of the will, Anna McBride James is entitled to $20,000 worth of real estate of the testator, which the trustees are. immediately to set off and convey. For the purpose of this trust, I contend that the devise of the Illinois lands to the trustees is valid ; and that its validity is no way affected by the fact, if it be so, that under the 27th clause of the will the trustees are, for other purposes of the trust, to sell the real estate of the testator out of Albany, Syracuse and New-York, and invest the proceeds in these three places. This direction would perhaps have the effect to bring the Illinois lands completely within the jurisdiction of this court, so far as the objects of the trust-require the sale of these lands and the investing of the proceeds in this state; and thus it is put, perhaps, in the power of the chancellor to declare the devise of these lands void, so far as these latter objects of the trust are concerned. But this consideration cannot, it seems to me, affect the title of the trustees to the Illinois lands, for the specific purpose of enabling them to set off $20,000 worth of them to Anna McBride James.

      A. C. Paige, for the other cestuis que trust.
   The Chancellor.

This court has no jurisdiction to make a decree which will directly affect either the legal or equitable title to lands situated in another state. And if the legal title to the lands now in question was in any of the infant parties according to the laws of Illinois, or if those who had the legal title were out of the jurisdiction of this court so that it would be impossible for it to operate upon them personally, to compel them to execute the trust or to convey the legal title according to the decree, I should consider it my duty to dismiss the application, and to refer the parties to the courts of the state where the trust property is situated. This court, however, cannot decline the jurisdiction of the case, especially under the directions of the decree of the court of dernier resort, so long as it has the power to execute its decision through the medium of the holders of the legal title. (See Lord Portarlington v. Soulby, 3 My. & Keen, 104. Bunbury v. Bunbury, 3 Lond. Jurist, 644.) But it is a well settled principle of the common law, that the title to real property, and the validity or invalidity of every devise or conveyance thereof, must depend upon the lex rei sitce. The law of Illinois must therefore be resorted to, not only for the purpose of determining the question whether the title to these lands is in the trustees, or in the cestuis que trust under the will, but also to determine the legal and equitable rights of the several parties under this testamentary disposition of the testator’s property. By the principles of the common law, which have been adopted in Illinois, all or nearly all of the trusts of this will are valid, so far as they appear upon the face of the will itself. And as the will contains a direct devise of the lands to the trustees, with a direction to sell the same and convert them into money for the purposes of the will, I think there cannot be a reasonable doubt that the legal title to the Illinois lands is in the trustees, according to the lex rei sitce. And if the trusts in the will in relation to this part of the property can be carried into effect, either in that state or elsewhere, according to the intention of the testator, the courts of that state would have no difficulty in sustaining the devise of these lands; and the trustees would be decreed to sell the same according to the directions of the testator, in his will. It remains for me, therefore, to consider whether it is possible for the trustees to carry into effect these trusts; for if the object for which a conversion of real estate into personalty is directed fails either wholly or in part, so that the proceeds thereof are not legally and effectually disposed of by the testator, there is a resulting trust in favor of the heirs at law pro tanto. In other woi’ds, there is no equitable conversion of the property in such a case, and it is in equity still considered as real estate, and descends to the heirs of the testator.

In this case, as the testator’s personal estate was more than sufficient to pay his debts, and to satisfy all the purposes of the will to which his personal property could be applied according to the law of his domicil, the only ground for converting the Illinois lands into personalty, consistently with the declared intention of the testator, is that the proceeds thereof may be invested in real estate in the cities of Albany or New'-York, or in the village of Syracuse, upon trusts which the courts of this state have declared'to be illegal and void. And as the impossibility of investing the proceeds of the land upon "such a trust existed at the death of the testator, so that no right or interest ever vested in the cestuis que trust, this court cannot consider the property as equitably converted at that time; so as to authorize a decree for a different investment thereof cy pres. The court for the correction of errors having decided, that neither the real nor the personal estate of the testator in this state could be taken and applied for the purpose of raising the portion of Anna McBride James, in real estate here, consistently with the intentions of the testator and the laws of this state, nor could it be invested in lands here for any of the purposes of the trust, except as provided for in the decree, this court cannot authorize the proceeds of the Illinois lands to be so applied, without entirely abandoning the principles upon which that decision of the court of dernier resort rests. And it certainly could not have been the intention of the testator that the trustees should assign to AnnaMcBride James, and Lydia, and the children of Augustus, any of the lands in the state of Illinois; which lands he directed such trustees to sell, for the purpose of vesting the proceeds thereof in the purchase of lands here.

The conclusion at which I have arrived in this case, and which must be declared in the decree to be made on this application is, that the legal title to the lands in the state of Illinois, subject to the widow’s right of dower therein, is now in the trustees under the will, according to the laws of Illinois, but that the whole equitable interest therein is in the, heirs at law of .the testator, as a resulting trust. The trustees must therefore convey the same to such heirs, by a conveyance duly executed to pass the legal title according to the laws of Illinois, and to be recorded according to the laws of that state. The taxable costs of all parties on this application, and the expenses of carrying into effect this order, and all taxes, &c. paid by the trustees which have not already been allowed to them; are to be paid out of the personal estate of the testator in the hands of the executors.