text:
    The Utica Insurance Company vs. Power.
    May 28.
    It is no objection to the set off of one judgment against another, on motion, that the party making the application has the adverse party in execution on his judgment.
    If a debtor is arrested upon a ca. sa. and then is discharged from imprisonment, with the consent of the plaintiff the judgment upon which the ca. sa. issued is extinguished as a liquidated demand, and cannot be set off on motion against another judgment.
    Where the solicitor in a suit is entitled to the costs awarded against the adverse party, the latter has an equitable claim to have such costs off set or applied upon a judgment in his favor, against the solicitor.
    The assignee of a bill of costs due to a solicitor, takes the same subject to an equitable right of set off which existed against the solicitor at the time of the assignment.
    If after the filing of a creditor’s bill upon the return of an execution at law unsatisfied, the debtor assigns his choses in action, the assignee will take them, subject to the equitable lien of the complainant.
    The complainants being judgment creditors of the defendant, filed a bill in this court to reach his property, which could not be levied on by execution at law. The defendant having put in his answer, by his solicitor, Lynch, denying the existence of property, the complainants suffered the bill to be dismissed, with costs. The costs of the defendant were afterwards taxed at $53,30.. The complainants thereupon presented a petition stating these facts, and also that they were judgment creditors of Lynch, the solicitor, and had filed a bill against him in this court, to reach his property, and they asked to have the defendant’s costs set off against the judgment they had against Power, or that they be applied towards the payment of their judgment against Lynch. By the affidavits in opposition to this application it appeared that the defendant had recently been arrested on a copias ad satisfaciendum upon the judgment against him, and that the complainants had either discharged him from the execution, or had assigned their judgment to some other person. It also appeared that Lynch had assigned his right to the costs previous to notice of this application, to secure an antecedent debt due to J. Porter, the register of this court, for fees.

      M. Hoffman, for the complainants.

      J. Rhoades, for the defendant.
   The Chancellor.

If the defendant has been taken in execution and discharged by the consent of the complainants, their judgment is extinguished and can no longer be considered as a liquidated demand and the subject of an off set. And if the judgment has been assigned by them to a third person, their right of set off is gone. In the case of Taylor v. Waters, a short note of which is contained in Chitty’s cases of practice, (2 Chit. R. 303,) but is more fully reported by Maule and Sel-win, (5 Maule & Sel. R. 103,) it was decided by the court of king’s bench that a defendant could not, in a suit brought against him, set off a judgment against the plaintiff, upon which the latter was charged in execution. The same principle was recognized by our supreme court in the case of M’Guinty v. Herrick, (5 Wendell's R. 243 ;) but it was there, held, that if the defendant in the execution escaped, the adverse party would be restored to his right of set off. By examining those cases, however, it will be found that the question which there arose was as to the right of the defendant to plead or give in evidence the judgment as a set off, while he was holding the adverse party in execution on such judgment. The case is different where the party applies to the equitable powers of the court to off set one judgment against another ; and where the court may order the party in execution to be discharged therefrom, or may direct satisfaction to be entered on the judgment, to the extent of the demand which is sought to be extinguished by the set off (See Simpson v. Hawley, 1 Maule & Sel. Rep. 696. Peacock v. Jeffrey, 1 Taunt. Rep. 426.) The simple fact of the arrest of Power upon the execution would not therefore be sufficient to prevent the set off as between him and the complainants, considering the costs as belonging to him, if they had not discharged him, or assigned their demand. The costs however in this case belonged to Lynch, the solicitor; and according to the decision of this court in Dunkin v. Vandenbergh, (1 Paiges Rep. 622,) they could not be set off to the prejudice of his claim.

Considering them the costs of Lynch, the solicitor, his assignee can have no greater equity to recover these costs as against the complainants than Lynch himself had at the time of the assignment. For the purpose of deciding the equities between these parties, I must therefore consider Lynch as having been the owner or assignee of this decree for costs against the complainants, and that they at the same time held judgments against him to a much larger amount. Under such circumstances they had an equitable claim to have one debt set off against the other. And the Register, who took the assignment of the decree without, any new consideration being paid, and merely in payment or security for a debt due from Lynch, took it subject to that equity. It appears also from the petition of the complainants that they have issued executions on their judgments against Lynch, which executions have been returned unsatisfied. They have also filed their bill against him in this court .to reach his equitable interests and choses in action which could not be levied on by execution at law. If that suit was commenced, as I think it must have been, before the assignment to the Register, the complainants had acquired a specific lien on this demand as the property of Lynch ; and they are entitled to hold it for the satisfaction of their judgment, as against the assignee, independent of the question of set oE After the creation of a lis pendens here 'by the filing of such a bill, the subsequent assignee of the defendant’s choses in action, who does not obtain the legal title by virtue of the assignment, even as a bona fide purchaser without notice, cannot be permitted to retain them against the complainant’s prior equity.

The decree for costs in this case must be discharged, and satisfaction is to be entered thereon, upon the complainants’ entering satisfaction for the same amount on their judgments against Lynch.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Webb and others vs. Pell and others.
    May 28.
    The usual mode of defence to a bill of review, founded upon alleged errors apparent from the decree, is to plead the former decree in bar of the suit, and to object by demurrer to the opening of the enrolment, alleging, as a ground of demurrer, that there is no error in the decree.
    It seems that it is not necessary to plead the former decree, if such decree is fully and fairly stated in the bill of review.
    A party cannot file, a bill of review, if he has no interest in the question intended to be presented thereby, and when he cannot be benefitted by the reversal or modification of the former decree.
    A bill of review for error apparent, must be for an error in law, arising out of the facts admitted by the pleadings, or recited in the decree itself, as settled, declared, or allowed by the court. It cannot be sustained upon the ground that the court has decided wrong upon a question of fact.
    Where the defendants in a suit have conflicting claims arising out of the subject matter of such suit, as to which the decree will be conclusive, they should be permitted to take proofs, to establish the facts as against each' other, as well as between themselves and the complainant.
    The answer of a defendant, responsive to the bill, is evidence against the complainant, but not against a co-defendant.
    The object of the bill filed in this cause was to review the decision and decree of Chancellor Kent, made in a suit in which Harvey Elliott, deceased, was plaintiff, and Aaron Pell and wife, Minot Mitchell, Betsey Hinman, now the wife of Elisha Webb, and others were defendants; and which decree was afterwards affirmed upon a re-hearing before Chancellor Sanford. The principal facts in the case will be found stated in Elliott v. Pell and others, (1 Paige’s Rep. 263.) in addition to the facts there detailed, it appeared from the bill of review, in this cause, filed in February, 1828, that the master made his report, .in the original cause, in May, 1824, which was duly confirmed; and from which report it appeared that there was due to Elliott on his mortgage, at that time, for principal and interest, $968,32, and to the defendant A. Pell and wife, as the personal representatives of E. Pugsley, upon the mortgage which had been established in their favor by the decree, $1311,56. It also appeared that the premises covered by Elliott’s mortgage were sold under the decree, and that the money was brought into court; and that, by an order of Chancellor Jones, made in November, 1827, the assistant register was directed to invest the proceeds of the sale, and to pay the income thereof to Mrs. Pell, one of the defendants in this suit, until the further order of the court.

      W. Sillimm, for the complainants.

      W. T. M’Coun, for A. Pell and wife.
   The Chancellor.

The grounds of objection to the original decree, and to the decree of Chancellor Sanford affirming the same, as stated in the bill of review, are, 1. That no replication having been filed to the answers of the now complainants, who were defendants in the original suit, those answers ought to have been taken as true; so far at least as to prevent their co-defendants, Pell and wife, from obtaining a decree establishing their pretended mortgage. 2. That the instrument set out in the pleadings was established as a lien on the whole 'of the premises; whereas, by its terms, it only purported to bind the one undivided half part of the lands, therein described as belonging to Martha, the wife of C. Pell. 3. That the instrument in writing, established as a mortgage, by the decree, was so defective and absurd in its terms, that it never was operative as a lien on any part of the premises. 4. That if it ever was a lien, it appeared sufficiently to the court, and should have been so decreed, that it had ceased to be a lien, and had become extinct by payment or satisfaction,

The complainants insist that all the decrees and orders in the cause, so far as they allow to A. Pell and wife, or either of them, any benefit from the proceeds of the mortgaged premises* are erroneous, and ought to be reversed. And they also allege that this bill of review is filed with the assent and at the request of the solicitor and counsel of the executor of Elliott who was the original complainant. The defendants A. Pell and wife, according to the established practice of this court upon bills of review founded upon alleged errors apparent from the decree, have pleaded the original decree in bar of this suit, and have objected by demurrer to the opening of the enrolment thereof, on the ground that there is no error in the decree in point of law ; (2 Brown’s Chan. Prac. 714; 1 Vern. 392; 2 Atk. 534; 2 Ball & Beat. 146 ;) though the plea of the former decree appears to be unnecessary, where such decree is fully and fairly stated in the bill of review. (Nelson’s Rep. 64. 1 Cas. in Ch. 122. Mitford, 4 Lond. ed. 204.)

The question whether a decree, in favor of the defendants, A. Pell and wife, which affected the rights of the present complainants, could be made upon the answer of the former, and in opposition to the allegations contained in the answers of the latter, was a proper subject of consideration upon the original hearing of the cause, and also upon the re-hearing. But I do not see how this point can be properly raised on a bill of review. As the admission of one defendant in equity cannot prejudice the rights of another, having a separate and distinct interest, it seems to be equally reasonable that the answer of one defendant asserting a right in himself should not be used in his favor to the prejudice of a co-defendant.- It is true, the answer of a defendant, responsive to the bill, is evidence against the complainant; but it does not follow that it is to have the same effect as against a co-defendant who has not asked for that answer. Cases must frequently occur, where the defendants have conflicting interests, and where their answers will be directly in hostility to each other, although both are responsive to the bill. In such a case, the complainant should file a replication to the answers of both; or if a replication is filed to the answer of one defendant only, both should have notice of the rules to produce proofs, &c. to,enable both to examine witnesses upon the issue joined upon the answer pf one, Here the allegations in the answer of A, Pell and wife, on which their claim to an equitable mortgage rested, were put in issue by the replication. Although this answer, so far as it was responsive to the bill, was evidence- against the complainant, and rendered any further proof unnecessary as against him, I think A. Pell and wife were bound to prove these allegations in their answer before they could be entitled to a decree which so materially affected the rights of their co-defendants. The answers of Mitchell and others, unreplied to, were also evidence against the complainant; but they could not be evidence against A. Pell and wife, who were not answerable for the neglect or collusion of the complainant by which the cause was brought to a hearing on bill and answer as to them. If the nature of their respective claims was such that no valid decree could be made in favor of .the complainant until those conflicting claims were settled, he should have taken such steps, by a special application to the court, or otherwise, as to place the defendants upon terms of equality ; and should thus have compelled them to litigate and settle their conflicting claims between themselves: If the allegations in the answer of A. Pell and wife were true, the instrument in writing, executed by C. Pell and wife to Mrs. Pugsley, was a good equitable mortgage, at least to the extent of the interest which C. Pell then had in the premises. He certainly had a life estate, which could in equity be bound by the agreement for a mortgage, although such mortgage was never in fact executed. Whether Mrs. C. Pell, who was a feme covert, could be bound by any verbal agreement to create a lien upon her real estate, is another question. This part of the case, however, must be disposed of on another ground. • It is well settled • that a bill of review, for error apparent upon the decree, must be for an error in point of law, arising out of facts admitted by the pleadings, or recited in the decree itself, as settled, declared, or allowed by the court. (O’Brien v. Connor, 2 Ball & Beatt. Rep. 146. Mellish v. Williams, 1 Vern. 166.) And a bill of review cannot be sustained, on the ground that a fact is stated in the decree as proved, when in truth there was no proof to establish that fact. (Combes v. Proud, Freem. Ch. Rep. 182. Prax. Alm. Cur. Canc. 532, ch. 15. 4 Hayw. Rep. 38, 190. Dougherty v. Morgan, 6 Monroe’s Rep. 153.) Here the decree of Chancellor Kent recites that the pleadings and exhibits being read and duly considered, it is declared and adjudged that the mortgage, or instrument referred to by agreement between the parties thereto, was held as security for the payment of the bond to E. Pugsley, for £428:9s. 2d. and was a good and valid mortgage and security, in equity, according to the manifest intent of the parties, &c. Now, as I cannot look beyond the decree to ascertain what proof the chancellor had to sustain that declaration, I am bound to suppose it was founded on legal evidence, notwithstanding the averment, in this bill, that no witnesses were examined ; as no averment can be received which is not supported by the decree itself. Upon the whole, I am compelled to say a bill of review will not lie upon any errors apparent upon this decree ; though I have serious doubts whether the decree could have been sustained in its present form, on an appeal, if such appeal had been entered in time.

It is also doubtful in this case whether the present complainants have shown such an interest in the controversy, as it now stands, as to entitle them to review this decree. No person can file a bill of review who has no interest in the question intended to be presented by'such bill, or who cannot be benefitted by the reversal or modification of the former decree. Here it appears that the property has been sold under the decree, and the proceeds of that sale are the whole subject of controversy. Even if A. Pell and wife are excluded from a share of such proceeds, it is admitted that the executor of Elliott is entitled to his debt and costs out of the fund before these complainants can receive any thing. There was nearly $1000 due to Elliott in May, 1824, which, with the interest thereon to November, 1827, when the proceeds of the sale were directed to be invested, would amount to about the $1300, for which, the property was sold, exclusive of costs. And these complainants cannot litigate the cause for tire benefit of Elliott’s executor.

The plea and demurrer must be allowed, and the bill must be dismissed, with costs,

       See the case of Farquharson v. Seton, (5 Russ. Ch. Rep. 45,) as to the effect of a decree in favor of one of the defendants upon the rights of his co-defendant, where the latter had a common interest with the complainant.


text:
    Clark vs. Mauran and others.
    May 28.
    H. a merchant, residing at Providence, R. I. was indebted to M. who was in business in New-York. Upon being applied to by M. for payment, H. informed M. that he had ordered the balance of his funds in the W est-indies to be forwarded to him, and directed him to place those funds to his credit, on account, when received. The agents of H. in the West-Indies shipped the funds, consisting of a quantity of doubloons, on board of a general ship, consigned to M. at New-York; and forwarded to him the bill of lading, in which bill the doubloons were stated to be for the account and at the risk of H. Previous to the arrival of the ship at New-York, H. failed, and assigned all his property to trustees, for the benefit of certain other-creditors ; and upon the arrival of the vessel at New-York, both M. and the assignees claimed the doubloons. On a bill of interpleader, filed by the master of the ship ; Held, that under the circumstances of this case, M. had obtained a specific lien, upon the doubloons, for the payment of his debt; which lien was not affected by the general assignment of H„ for the benefit of other creditors. -
    The right of stoppage in transitu does not apply to the case of a consignment from a debtor to his creditor, where there can be no risk of loss by the insolvency of the consignee.
    This was an appeal from the decree of the late vice chancellar of the first circuit. The decree was founded upon a bill of interpleader, filedhy the master of the brig General Paez, to compel the defendants to litigate and settle their conflicting claims to fifty Spanish doubloons, shipped on board his vessel at Curacoa. The facts, as agreed upon by the parties, were as follows : Previous to June, 1839, Hodges, a shipping merchant of Providence, R. I. had extensive commercial dealings with the defendant Mauran; and about the sixth of that month was indebted to him in an amount exceeding $7000. On that day Mauran drew upon Hodges for a small portion of the balance due, and at the same time urged the payment of the residue. Upon the 10th of June Hodges wrote to A. D, Meza & Sons, his agents in Curacoa, directing them to close the sales of his goods remaining in their hands, and to ship the balance of his funds by the first vessel bound for New-York, Boston, or to any other port near Providence; and if shipped to New-York, that they be consigned to Mauran, and be remitted in doubloons, or any other funds that would do as well. On the 17th of June Hodges wrote to Mauran, complaining of the difficulty in raising money, but expressing a hope that he should soon be able to place funds in his hands to balance the account. He added in a postscript, “ I have ordered the balance of my funds at Curacoa to be forwarded to you, which when you receive you will please to place to my credit in account.” On the 14th of July A. D. Meza & Sons shipped on board the complainant’s brig, at Curacoa, the doubloons in question, consigned to Mauran or his assigns at New-York; which shipment was stated in the bill of lading to be for account and risk of Hodges. The same day they enclosed the bill of lading to Mauran in a letter, informing him that the consignment was thus made by the direction of Hodges, and for his account and risk. On the 16 th of July Hodges failed; and he made a general assignment of all his property and effects to the defendants Kelly & Cole. Upon the arrival of the brig at New-York, on the 3d of August, 1829, Mauran received the bill of lading, and entered the doubloons at the custom house. The same day the agent of Kelly & Cole presented to the complainant their assignment, and demanded the doubloons, as their property. It was admitted that the bill of inter-pleader was properly filed; and the complainant was permitted to retain his costs and expenses out of the fund in his hands. The vice chancellor decided that the doubloons belonged to Mauran ;■ and decreed that they be delivered to him, and that he recover his costs against the other defendants, and also the taxable costs of the complainant which had been thus retained out of the fund. From this decree the defendants Kelly & Cole appealed to the Chancellor.
    P. V. Remsen J. Tallmadge,

    for the appellants Kelly & Cole. The right to receive the proceeds of a cargo does not create a lien on the cargo until possession is taken. If a trader ships goods in his own name, his factor acquires no lien until he obtains possession. (2 Wash. C. C. 294. Hibbert v. Carter, 1 T. R. 745. Montagu on Liens, 5. Walter and others v. Ross and others, 2 Wash. C. C. 283.) If a shipment is at the risk of the shipper, nothing passes to the consignee until he obtains possession. (Kinlock v. Craig, 3 T. R. 119. 3 Id. 783. I
      Esp. Rep. 240. Atkin v. Barwick, 1 Strange’s R. 165. Wright v. Campbell, 4 Bur. Rep. 2051.) The property in the doubloons in question was in Hodges at the time of his transfer to Kelly & Cole, and Mauran could not have claimed them on that day. If Mauran had a lien on the doubloons he should have assumed the risk of the shipment. If the shipment was at the risk of Hodges, 'Mauran had no lien. Wherever the debtor runs the risk of a shipment, the creditor to whom the goods are consigned has no lien on the .goods before he receives them; and an assignment by the debtor after the shipment, and before the goods come into the possession of the creditor, will prevail. Where the proceeds of a cargo only are appropriated to the payment of a creditor’s debt, the property in the cargo does not pass to the creditor. (Huntley v. Ledyard, 1 Starkie’s Rep. 99. 1 Binney, 106. Godfrey v. Furzo, 3 Pr. Wms. 185. Fritz v. Lawrence, 1 Paige’s Rep. 442. Case of the Gilboa, 4 Rob. Adm. Rep. 79. Barker v. Havens, 17 John. Rep. 234. Porter v. Lansing, 1 Id. 215. Canard v. Atlantic Ins. Co. 1 Peter’s U. S. Rep. 445.) The right of property is in the person at whose risk the goods are shipped. Here the question is one of strict right. It is a contest between bona fide creditors. The goods were shipped at the risk of Hodges. Mauran’s rights could only have commenced with the possession. The goods were neither shipped on his account, or at his risk. Here was only an intent to have the goods delivered to Mauran. In all such cases the owner can stop the goods in transitu. (Haille v. Smith, 1 Bos. & Pul. 563. Abbott on Ship. 389. Walter v. Ross, 2 Wash. C. C. Rep. 298.)

      C. Walker, for Mauran.
    A shipment of goods by a debtor consigned to his creditor, accompanied by a bill of lading, to be applied in payment of a debt due such creditor, vests the property in the goods so consigned in the creditor, and the shipment cannot be countermanded by the debtor. (1 Ld. Raym. 271. Hibbert v. Carter, 1 Term. Rep. 745. 1 Binney, 106. 1 Yeates, 177. Allen v. Watson, 4 Campb. Rep. 325. Alderson v. Temple, 4 Burr. 2236. Sweet v. Pym, 1 East, 4. 1 Strange, 165. Rybergh v. Snell, 2 Wash. U. S. C. C. R. 294. Walter v. Ross, 2 Id. 288.) The delivery of the bill of lading to the master of the ship is a delivery to the creditor. (Summerille v. Elder, 1 Bin. 106. Buffington v. Curtis, 15 Mass. Rep. 533. 4 Burr. 2236.) If the goods should be shipped on the account and at the risk of the debtor, it would not prevent the property vesting in the consignee. (Haille v. Smith, 1 Bos. Pul. 563. Locke v. North American Ins. Co., 13 Mass. Rep. 61.)
   The Chancellor.

The general question as to the right -of a consignor to stop goods in transitu does not arise in this case. In the eases in which that question arises, the claim of the seller or consignor is founded on the supposition that he has parted with the legal interest in the property; but that under the circumstances he has an equitable claim to revest the property in himself, or at least to prevent its going into the actual possession of the consignee until the price is paid. (Per Buller, J., 6 East's Rep. 27, n.) The right of the consignor to stop in transitu is limited to the case of the insolvency of the consignee, and where the goods have not been paid for. Consequently it can never apply to a consignment to a creditor to whom the consignor is indebted in the full value of the goods.

In the case of Evans v. Martlet, (1 Ld. Raym. Rep. 271,) it was held that, upon a general bill of lading consigning the property to A., the legal title was in him, although it appeared from the invoice that the goods were consigned on account of another person. (See also 2 Term Rep. 74, 75.) But in the case under consideration, it appeared on the face of the bill of lading, that" the goods, although consigned to Mauran, were for account and at the risk of Hodges. It is probable, therefore, that an assignee of that bill from Mauran would have taken it subject to any equitable rights which existed in Hodges, or in third persons deriving an interest under him. In the case of Walker v. Ross, (2 Wash. C. C. Rep. 283,) the bill of lading was like the present. A quantity of flour was laden on board a general ship, and the master signed three bills of Lading, by which the flour was to be delivered to the plaintiffs or their assigns; but the bill expressed that the consignment was shipped on account of and at the risk of the shippers. A day or two after the shipment, and before any invoice, bill of lading, or letter of advice, had been sent to the consignees, the shippers finding they must stop payment, re-sold the property to the defendants, of whom it had been previously purchased on a credit. It appeared that the shippers were indebted to the consignees, and intended that the latter should apply the net proceeds on account. That intention however had not been communicated to them, and the consignment had not been made at their request. Under those circumstances, Judge Washington decided that the consignees had no vested interest in the flour, and that the owners had a right to countermand the order at any time before the property was actually received by the plaintiffs. But there is a material difference between that case and the present. Here, by the letter of the 17th of June, 1829, Hodges had given Mauran notice of his intention to make this consignment for the purpose of paying the balance due to him on account. And, as that letter was in answer to an application from him for payment, it may be fairly presumed Mauran acted upon the faith of that letter, and neglected to press his demands to the extent he would otherwise have done. The consignment by A. D. Meza. & Sons was made in conformity to their instructions previously received from Hodges. It was therefore a specific appropriation of this property, for the payment°of the balance due to their agent, as soon as the doubloons were shipped on board the brig and the bill of lading delivered to the master to be transmitted to the consignee. In deciding upon the rightof the parties in this cause, the authorized acts of the agents of Hodges at Curacoa must be taken to have the same effect as if those acts had been performed by Hodges in person. In the case before alluded to, Judge Washington admits that even a letter of advice, stating a shipment to be to a particular person, where the consideration is paid, may give to the consignee an equitable title, sufficient to repel the right of the consignee to countermand. And in Summerville v. Elder, (1 Bin. Rep. 106,) where the consignor had advised his principal to his intention to make a shipment, and he afterwards put the goods on board a general ship and delivered the bill of lading to the master to be transmitted to the consignee, the supreme court of Pennsylvania decided that the right to the property was vested in the consignee; and that the shipper could not countermand the order, although the vessel had not left her port of lading. In Haillev. Smith, (1 Bos. & Pul. 571,) Eyre, Ch. J. also held that the circumstance of the risk of the shipment remaining in the consignor was no objection to the claim of the consignee. The case of Hastie & Jamieson v. Arthur, (2 Bell’s Comm. 199, n. 2,) appears to bear a very strong analogy to the one now under consideration. In 1765, Dulilop, of Virginia, consigned a shipment of tobacco to Has-tie & Jamieson, to be sold and the proceeds to be applied in payment of the price of goods due to them from Dunlop. The ship arrived at its port of destination in Scotland; but before the consignee had obtained possession of the cargo, it was arrested by the creditors of Dunlop. The lord ordinary and court of sessions decided that Dunlop was not divested of the property, in favor of Hastie & Jamieson, and that the same wag liable to the diligence of the arresting creditors. But upon appeal to the house of lords, the judgment was reversed ; and it was declared that Hastie & Jamieson had a special property in the cargo preferable to the arrestment of the other creditors. The conclusion at which I have arrived, therefore, is, that by the shipment of the doubloons to Mauran, by the direction of Hodges, and the delivery of the bill of lading to the master of the brig, mides the circumstances of this case, the consignee obtained a specific lien upon the property, which was not divested by the general assignment of Hodges to the appellants.

The decree of the vice chancellor roust therefore be affirm-■ csl, with costs,


text:
    H. Rogers and others vs. N. & A. G. Rogers.
    July 9.
    The recovery of a judgment by executors in their representative character is conclusive evidence of their right to sue in that character, in a subsequent suit, founded on such judgment.!
    Where the complainant claims in opposition to a deed of trust, and seeks to set it aside on the ground of fraud, he may proceed against the fraudulent trustee alone, without making the cestui quo trusts parties. It is otherwise where the complainant is endeavoring to enforce a claim adverse to the interests of the cestui que trusts, but which is founded upon the supposed validity of the trust deed.
    This was an appeal from the decision of the vice chancellor of the first circuit, overruling the demurrer of the defendants. The complainants, as executors of Fitch Rogers deceased, instituted suits against the defendant N. Rogers, in the superior court of the city of New-Yorlt, to recover a debt due to the decedent, and recovered a judgment thereon. After the judgment, but before the issuing of any execution thereon, N. Rogers executed an assignment of his personal estate' to his son, the other defendant in this suit, in trust for the payment of a debt to the Bank of New-York; and to pay the residue of the proceeds thereof to other creditors of the assignor. The bill alleged that the assignment was fraudulent, and prayed that the same might be set aside. The objections taken by the demurrer were, that it was not alleged in the bill that the complainants had taken probate of the will of the testator, so as to enable them to prosecute this suit as executors; and that the Bank of New-York was not made a party defendant.

      D. D. Field, for the complainants.
    =3. G. Rogers, for the defendants.
   The Chancellor.

This bill is filed by the complainants to protect their rights as judgment creditors, upon a judgment recovered by them in this state in their representative character. That recovery is conclusive#vidence of their right to sue as executors so far as respects that debt; and it was not necessary for them in the present suit to show how they became entitled to sue as the representatives of the testator, to whom the demand was originally due.

Neither was it necessary to .make the Bank of New-York, or any other of the creditors for whose benefit the assignment was made, parties defendants. As a general rule, the cestui que trust, as well as the trustee, must be parties ; especially where the object is to enforce a claim consistent with the validity of the trust. But where the complainant claims in opposition to the assignment or deed of trust, and seeks to set the same aside on the ground that it is fraudulent and void, he is at liberty to proceed against the fraudulent assignee or trustee, who is the holder of the legal estate in the property, without joining the cestui que trust. Such has been the uniform practice of this court in relation to cases of this description, and I see no good reason for adopting a different rule. Lord Redesdale lays it down as a principle of equity pleading, that persons having demands prior to the creation of the trust and not claiming under the same, may enforce their claims against the trustees without bringing the persons interested in the trust before the court. (Mitf. 4 Lond. ed. 175.) Although there are some exceptions to the rule thus laid down by this distinguished equity pleader, the case now under consideration does not come within the principles upon which those exceptions to the rule have been maintained.

The decision of the vice chancellor in overruling the demurrer was therefore right; and the order appealed from must be affirmed, with costs.


author: The Chancellor,

text:
    Hart & Hoyt vs. The Mayor, Aldermen and Commonalty of Albany, and Brown.
    July 3.
    An appeal from the decision of the chancellor denying an application for an injunction, or for an order to stay proceedings in another suit, does not operate as an injunction or a stay of such proceedings pending the appeal.
    Neither does an appeal from an order dissolving an injunction suspend the operation of tire order so as to entitle the appellant to stay the proceedings, pending the appeal, as a matter of right.
    Where an appeal from an order dissolving an injunction involved an important question of right between the parties, and there was probable cause for appealing, and no particular injury could arise to the respondents from the delay, the court, after hearing both parties upon the application for such relief, granted a temporary injunction, restraining the further proceedings of the defendants in relation to the subject matter of the first injunction, until the appellants had a reasonable time to be.heard before the appellate court.
    From the decision of this court dissolving the injunction in this cause, (ante, p. 213,) the complainants appealed to the court for the correction of errors. The defendants, pending the appeal, were proceeding to carry into effect the ordinance of the corporation, by removing from the basin the ark, or floating store house, referred to in the bill. To effect this object it would be necessary to destroy the store house by taking it to pieces. The complainants presented a petition to the chancellor, stating these facts; and also stating that the appeal was brought in good faith, for the purpose of settling the rights of the parties; that the destruction of the ark or store house would be a very serious injury to the complainants, if they succeeded in their appeal; but that it could not be of any material damage to the defendants or the public to have it remain in its present situation until the decision of the court of errors upon the questions in controversy between the parties. ‘ The petitioners therefore asked for an order restraining the defendants from proceeding under the ordinance of the common council pending the appeal.

      A. Van Vechten ty J. L. Viele, for the complainants.

      J. McKown fy J. King, for the defendants.
   The Chancellor,

It is supposed by the complainants’ counsel that the appeal from an order dissolving an injunction has, under the provisions of the revised statutes, the effect of nullifying the order pending the appeal, so as to prevent the dissolution of the injunction, and to deprive the defendants of the right to go on with their proceedings under the law of the corporation, or to do any act contrary to the prohibition contained in the injunction. But if they should be wrong in their construction of the statute, the complainants then ask the court to exercise a judicial discretion, under the peculiar circumstances of this case ; and that they may have an order, in the nature of a temporary injunction, to stay the proceedings of the defendants pending the appeal, so as to give the appellants the benefit of the decision of the court for the correction of errors, if it should be in their favor.

Previous to the passing of 'the revised statutes it had been decided, both in the supreme court and in this court, that an appeal from an order dissolving an injunction could not of itself affect the validity of the order, or revive the process pending the appeal, so as to prevent the respondent from proceeding in the same manner as if no injunction had ever been granted. (Hoyt v. Gelson & Schenck, 13 John. Rep. 139. Wood v. Dwight, 7 John. Ch. Rep. 295.) But it is supposed that the eighty-ninth section of that article of the revised statutes which relates to' appeals from the court of chancery, &c. (2 R. S. 607,) has altered the law in this respect. That it has placed it in the power of a party who has obtained a preliminary injunction by an ex parte application to an officer out of court, to continue that injunction in full force, by simply appealing from an order of the court directing its dissolution. If such should be found to be the trueconstruction of the statute, it would become absolutely necessary, to prevent the greatest injustice to parties, to change the practice of this court in relation to the granting of injunctions on an ex parte application to the court, or to an officer thereof. But according to the construction of this section of the statute as contended for by the counsel in another case that is now pending before me, even a change in the practice of the court could not remedy the evil. For it is there insisted that an appeal from an order or decision of the court refusing to grant an injunction gives to the applicant the full benefit of an injunction pending the appeal; and restrains the adverse party from proceeding in any other suit, or otherwise, in relation to the subject matter sought to be affected by the injunction or order which was prayed for and refused. I am satisfied, however, that neither of these constructions of the statute were ever contemplated by the revisors who proposed this provision, or by the legislature which adopted it.

To understand the meaning of the several provisions of the revised statutes relative to the stay of proceedings pending an appeal, it may be necessary to inquire what was the former law and practice of the courts on this subject, and what were the evils intended to be remedied by these legislative provisions. It will be recollected by those who have had occasion to look into the history of the jurisdiction of the house of lords in England, relative to appeals from the court of chancery, that their- jurisdiction was for a long time contested, not only by the house of commons, but by several distinguished English judges. And the learned Chief Justice Hale wrote a very, elaborate treatise for the purpose of showing that the lords could not rightfully exercise such a jurisdiction. In this struggle to obtain or preserve jurisdiction in cases of appeals, it will be found, on examination, that very little regard was paid to the rights of suitors, or of their coupsel; some of whom were heavily amerced, and even imprisoned, for questioning the jurisdiction of the lords, or for refusing to appear as counsel in that court. During this contest, it was a matter of course that the lords, for the purpose of sustaining the jurisdiction which they claimed, should prohibit the respondent from taking any steps in the cause, in the court of chancery, pending the appeal; whatever injury he might sustain by the delay. Hence it became the law of the appellate court, that the mere presenting an appeal to the house of lords, suspended all proceedings whatever in the court below. And so far was this principle carried, that as late as 1772 it was supposed that an appeal had the effect of totally suspending the jurisdiction of the lord chancellor as to the whole suit, until the decision of the lords on the appeal. But in the case of Lord Pomfret v. Smith, which came before Lord Apsley at that time, he decided that his jurisdiction was suspended only as to the matter appealed from; but that it was not totally suspended, so as to prevent a proceeding as to any other matter in the cause. (Palmer’s Pr. H. of L. 9.) The jurisdiction of the lords being finally established, and having remained for a long time undisputed, they saw the necessity of permitting the court of chancery, during the recess of parliament, to take such proceedings in the cause, pending the appeal, as the lord chancellor might deem requisite for the preservation of the rights of the parties. At length this practice became so fully established, that in the case of Burke v. Brovn, in 1807, (Palmer’s Pr. 10, 15 Vesey, 184,) the lords decided that an appeal did not stay any of the proceedings, even upon the point appealed from, without an express order of the appellate court; unless the lord chancellor, in the exercise of a judicial discretion, thought proper to suspend the proceedings wholly or in part pending the appeal. This country having separated from England before this change in the practice had been established, the courts of this state followed the practice, as settled by Lord Apsley, in 1772, of considering the appeal as a stay of the proceedings upon the point of the appeal. The same reasons, however, which had produced a change in the practice in England, caused a modification here, so as to make the appeal only a stay of the proceedings in the first instance, subject to the right of the respondent to apply to the chancellor for leave to proceed notwithstanding the appeal. (1 John. Ch. Rep. 77. 3 Idem, 66.) The only difference, therefore, between the practice here and in England, at the time of the adoption of the revised statutes, was, that in England the appellant was compelled to obtain an order to stay the proceedings in the suit as to the matter of the appeal; but here the application came from the respondent, to be permitted to proceed notwithstanding the appeal. One of the evils of our practice was, that the appeal suspended the proceedings in all cases, in the first instance, without giving to the respondent any adequate security for his debt or costs. Another was, that the chancellor possessed an unlimited discretion, and might deprive the appellant of the benefit of his appeal, in any case, by permitting the respondent to proceed and enforce the order or decree of the court below, before the appellant coidd obtain a hearing before the court of dernier resort. The object therefore of the revisors, was to take from the chancellor, in all cases where it could be done without injury to the rights of suitors, the discretionary power of permitting the party to proceed in the suit notwithstanding the appeal, and the same time to furnish to the respondent an adequate remedy against the injurious consequences of the delay. But was not their intention to make the appeal a stay of proceedings in any case where by the former practice of this court was not "a stay of the proceedings in the first instance; or to extend it to any other proceedings of the respondent, except his proceedings in the court of chancery and in that suit. The 89th section of the- statute, under which the appellants suppose they have the right to stay the proceedings of the defendants under the ordinance of the common council, follows the several provisions requiring security for debt and costs to make the appeal a stay of proceedings ; and is in these words t “ all other cases not herein before provided for, the filing and perfecting of an appeal by giving bond for the payment costs thereon, shall stay all proceedings in the court of chancery, upon the order or decree appealed from, and upon the subject mailer thereof," &c. It is under this last clause of the section that the appellant claims the right to have all proceedings upon the subject matter of the order, in the court of chancery or elsevihere, stayed. But by referring to the analogous provision in the 86th section, it will be' seen that this language was probably used to distinguish the subject matter which formed the point of appeal from other matters embraced in the bill, as to which other matters the proceedings in this court were not to be stayed by the appeal; and thus to bring the stay of proceedings within the principle of the decision Lord Apsley, in the case of Lord Pomfret v. Smith, in 1772, to which I have before referred. By the express terms of the statute, the stay of proceedings is confined to proceedings in the court of chancery, upon the order or decree, and upon the subject matter thereof; and, as I understand the provision, to proceedings in the suit in which such order or decree ii made,-

Having anived at the conclusion that the provisions of the revised statutes do not suspend the operation of the order appealed from, so as to restore the injunction and.entitle the appellants to an order to stay the proceedings of the defendants as a matter of strict right, it becomes necessary to enquire whether this court has the power to suspend the- operation of the order until the decision of the court for the correction of errors on the appeal; and if it has such power, whether this is a proper case for the exercise of the judicial discretion of the chancellor in this respect. As the application here is, not to stay any proceeding in the suit, but to restrain a proceeding by the defendants out of court, the granting of the order will unquestionably be an original exercise of judicial power over the parties in the cause. Such power, however, is frequently exercised by the superior courts over the suitors and parties therein, for the advancement of justice; and the granting a preliminary injunction in this court, before the rights of the parties are finally determined, always proceeds upon the same principle. The only reasonable ground of objection to such a proceeding therefore is, that it seems inconsistent for the court to make an order to restrain a party from proceeding, after it has, upon a full hearing of both parties, decided that he has both a legal and equitable right to proceed. But this objection would equally apply to all the orders in the English court of chancery to stay the proceedings on a decree or order "of the court by which the rights of the parties had been established by the same court. In the case of Lewis v. Morgan, (5 Prices Rep. 468,) although it was admitted that applications of this kind were not to be encouraged, the court of exchequer in England suspended the proceedings under an order of that court, for a limited time,, to enable the party against whom the order was made to bring the case before the house of lords by appeal. I am aware that many frivolous and vexatious appeals are brought, especially from the decrees and orders of the vice chancellors, for no other object than delay, or to harrass an adversary, or to compel hiln to submit to some terms of compromise. And I admit that such appeals are not to be encouraged by granting a stay of proceedings in cases not already provided for by the provisions of the statute. This case, however, does not appear to be of that description; and if the decision of this court was wrong, it may prevent an unnecessary sacrifice of property, and save future litigation, to restrain the defendants from proceeding until after the next* session of the court for the correction of errors.. If therefore the complainant’s solicitor will stipulate to expedite the proceedings on the appeal, so as to enable the respondents to bring the same to a hearing at the next August term of that court, a temporary injunction must be granted, restraining the defendants from destroying the ark or store house, or from taking it to pieces or removing it from the basin, until after the session of the court for the correction of errors in December next; unless the appeal shall be sooner dismissed or otherwise disposed of by that court


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    M. Robertson, by her next friend, vs. T. Robertson.
    July 3.
    The next friend of a wife, in a suit against her husband for a separation, should be worth at least $250 over and above his debts. .
    Although the next friend of the complainant is irresponsible, the defendant is not entitled to have the bill dismissed; in the first instance; but the proceedings on the part of the complainant will b.e stayed until sufficient security for costs is given,,or a responsible person is "substituted as the next friend.
    Upon a proper application, a wife may be permitted to file a bill against her husband for a separation, by her next friend, in forma pauperis. But this will not be done until the court has ascertained, by the-report of a master, that she has probable cause for filing such bill.
    This was an appeal from a decision of the vice chancellor of "the first circuit, refusing to stay the proceedings in a suit commenced by a wife against her husband. The petition on which the application was founded, alleged that the next friend of the complainant was wholly irresponsible and without property; and that he was, as- the petitioner was informed and believed, an apprentice and under age. By the affidavits on the part of the complainant, it appeared that the next friend became of age about one fi -Yh before the filing of the bill. He swore that he was not in debt, and that he believed he should be able to realise from his wages* after deducting his expenses, about $15 per month.

      D. Selden, for the complainant.

      D. B. Tallmadge, for the defendant.
   The Chancellor.

The 163d rule of this court requires

that the next friend of the wife, who prosecutes a suit of this kind, Should be a responsible person. By the term responsi-ble, in this rule, is meant that the next friend should be possessed of property sufficient to pay the costs which may be adjudged against him, if in the end it should appear that the suit was instituted without any reasonable or justifiable cause. The statute having fixed the amount of security for costs in this court at $250, the next friend should, by analogy, be worth at least that sum over and above all his debts. Such was the construction given to the rule in- the recent case" of Lawrence v. Lawrence, (ante, p. 267.) The fact that the next friend in this case is out of debt, and-may be able hereafter to earn sufficient, over and above what is necessary for his support, to pay the costs of this suit, does not answer the requirements of the law. If the suit is prosecuted with due diligence, it will be terminated long before the next friend can have earned enough to pay the costs of the litigation. From the affidavits in the case it is evident that he was worth nothing at the time this suit was commenced, and the defendant has no security that he will ever be in a better situation.

There can be no difficulty in a case of this kind arising front the fact that the injured wife may not be able to procure any responsible person to be her next friend. I can hardly imagine a,case where there is such clear and manifest abuse and misconduct on the part of the husband as to render it discreet and prudent on the part of the,wife to institute a proceeding of this kind, in which she would not find some neighbor or friend of sufficient responsibility who was willing to interfere in her behalf. But even if such a case should occur, this court has already decided that the wife may, upon a proper application, be permitted to prosecute by her next friend, as a poor person ; in which case such" next friend would only be liable for misconduct in the prosecution of the suit. In such cases, however, the court ascertains by the report of a master, in the first instance, that the wife has reasonable or probable grounds for instituting a proceeding of this kind; and it assigns her a solicitor and counsel, who will not think of instituting a suit for the mere purpose of getting a heavy fee in advance, by an» order upon the husband. There is nothing in the case now before me to induce a belief that this suit is O one of that class; but I cannot adopt a principle that would encourage such abuses, and thus disturb the peace of families.

Although the application to dismiss the bill of the complainant, on account of the irresponsibility of the next friend, was not correct, in point of form, yet, as the prayer of the petition was in the alternative® the vice chancellor should have granted the proper relief, upon the facts presented. He should have ordered the proceedings to be stayed, on the part of the complainant, until a responsible person should be substituted as the next friend, or security for costs given. (1 Sim. & Stu. Rep. 264. 1 Paige’s Rep. 180.)

The order of the vice chancellor must be reversed, with the costs of this appeal, to be paid by the next friend of the complainant, if her bill is hereafter dismissed, for want of prosecution or otherwise. But if -she succeeds in establishing her right to a decree for a separation, then neither party is to have any costs on this appeal. An order must be entered directing that all proceedings on the part of the complainant be stayed until security for costs is given, in the sum of $250, or until a responsible person is substituted as the next friend; the sureties or next friend in either case to justify. If the security is not given, or the substitution made within thirty days after the entryof the order upon this decision, the. complainant’s bill must be dismissed, with costs to be paid by the next friend.


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    Rogers vs. Murray and others.
    July 17.
    Where, by the division of the county of Washington, lands mortgaged to the old loan officers of that county fell within the limits of the new county of Warren; Held that, under the act of the 12th of March, 1819, the loan officers, upon a foreclosure or sale of the mortgaged premises, were bound to publish a copy of their advertisement of sale in a newspaper in Warren county.
    A sale made by the loan officers without giving the notice required^by law, is invalid, and will be set aside upon the application of the owner of the mortgaged premises.
    Where there is a resulting trust under a conveyance, it must arise at the time of the execution of the deed.
    After'the legal title has passed to the grantee by tire execution of the deed, a resulting trust cannot be raised by the subsequent application of the funds of a third person for the improvement of the property, or for the payment of the purchase money, so as to divest the legal estate of the grantee.
    In September, 1786, N. Seely, who was then the owner of lot No. 8, in the Queensbury patent, containing 250 acres of land, mortgaged the same to the Old Loan Officers of the county of Washington, to secure the payment of =£32. One hundred acres of this lot was purchased by Reuben Morgan, in May, 1797, and a conveyance was taken to himself -in fee ; and the residue of the lot passed into the hands of other purchasers. By some arrangement with the former owner of the lot, but which did not distinctly appear in this case, the one hundred acres in the hands of Morgan became equitably liable to the payment of the whole sum remaining due on the loan office mortgage. Morgan accordingly paid the annual interest thereon, up to and including the year 1825. D. & I. Meiritt, in 1805, recovered a judgment in the supreme court against Morgan, in an action of debt, on which there appeared to have been due $481,88 and interest, from the first of June, 1805; which judgment was subsequently assigned to Jeremiah Rogers, the father of the complainant. In 1794, John Murray made his will, and authorized his executor and executrix to sell his estate, and gave the bulk of the proceeds to his son James Murray, one of the defendants in this cause, to be paid over to him by the executor and executrix, at twenty-one. In August, 1797, the widow of Murray, who was the executrix, and J. Eddy, the executor, made probate of the will, and afterwards sold the estate. Morgan subsequently married the widow; and in 180,6 he procured himself to be appointed guardian of the defendant, James Murray, who was then an infant, and he afterwards possessed himself of the estate of the infant. At the time of his appointment as guardian, Morgan executed, under the order of this court, a mortgage upon the 100 acres called the Morgan farm, to the people of the state of NeW-York, as security for the faithful performance of his trust as such guardian. Upon that guardianship a large amount was due to the defendant Murray, from Morgan; the balance having been settled by arbitration between the parties, in May, 1826, at $2625. In June, 1818, the Morgan farm was sold by the sheriff of Warren county, upon an execution issued on the Merritt judgment, and was purchased by the complainant in this suit, for $550. No money was paid « on the sale, but the complainant appeared to have purchased in the property with the consent of his father, who was the assignee of the judgment; and it was conveyed to the complainant by the sheriff accordingly. In December, 1821, the complainant, executed to Morgan a written agreement, by which he covenanted to reconvey the farm to Morgan, or his assigns, upon the payment to the complainant of ^506,88, in four equal annual instalments, with interest'annually, and also upon payment to J. Cramer of a debt of about $420; for which Jeremiah Rogers had become security for Morgan.
    Two or three payments were made by Morgan, on account of the sum which, by this agreement, was to be paid to the complainant. On the same day of the execution of this agreement Morgan executed a sealed instrument to the complainant, reciting that agreement, and by which he covenanted that in case of the non-performance of any part of the conditions in that agreement contained to be performed on his part, the complainant should have the peaceable possession of the premises so purchased at the sheriff’s sale. Shortly after the arbitration between Morgan and Murray, in 1826, Morgan quit-claimed to the latter, in part satisfaction of the amount awarded to him. •all his interest in the Morgan farm ; that being all the property or means he had for satisfying the award. The interest which became due on the loan office mortgage in 1826 not being paid, the New Loan Officers of the county of Washington, to whom the mortgage had been assigned under the act of the 14th of April, 1820, advertised the mortgaged premises for sale, at the court house in Salem, on the third Tuesday of September in the same year. The premises were situated in the town of Queensbury; and by the division of Washington county in 1813, that town was set off as a part of the county of Warren. , The loan officers, however, took no notice of that circumstance, but advertised and sold the premises upon notices affixed and published in the present county of Washington only, although there was a public newspaper published in the county of Warren. The complainant had no information that a sale was to take place, and did not attend. Murray employed the defendant J. G. Haviland to bid off the lot for him, under an arrangement by which the purchaser was to release to the - owners of the other 150 acres of the lot all the interest which he should acquire in that part of the premises under the sale, reserving only the Morgan farm for the benefit of Murray. The loan officers were informed of the equitable claim which Murray made to the Morgan farm, and of the arrangement or understanding by which the rights of the owners of other parts of the lot were to be preserved. The lot was accordingly sold at public vendue, in the usual manner. No person bidding a higher sum, it was struck off to the defendant Haviland, for the sum of ,f 56,91, the balance due on the mortgage, together with interest and costs; and was thereupon conveyed to him .by the loan officers. Haviland subsequently released the other 150 acres to the owners thereof, and they were not made parties to this suit. The complainant after-wards tendered to Haviland the amount of his bid, and demanded a release of the Morgan farm. He also tendered to the loan officers the amount of the interest and costs due on the mortgage, which they declined receiving, on the ground that they had already raised the whole amount by a sale of the premises. He therefore filed his bill in this cause to set aside the sale, on the ground of illegality in the notices of the sale, and also on the ground of fraud. The whole lot was admitted, by the answers, to be worth $5000, and the Morgan farm about $2000. The proof showed that the farm was worth about $2800.

      D. Buel,jun. for the complainant.

      J. Crary, for the loan officers.
    j&. Weston, for the other defendants.
   The Chancellor.

Although the property in this case was

sold for a very small sum, when compared with its real value, yet having been sold at public auction, under a special law which allowed to the loan officers no discretion on the subject provided enough was bid to pay the amount due with interest and costs, the sale cannot be disturbed, if there was no fraud in • the case, and if all the requirements of the law have been complied with. The defendants, by their answers, deny all fraud ; and I see nothing in the evidence to contradict this denial on their part, as to any actual and intended fraud. I am not, however, prepared to say it was not against public policy, and a constructive fraud-upon this complainant, as the owner of a part of the mortgaged premises, for the purchaser to enter into an arrangement which would prevent the owners of other-parts of the mortgaged premises, or their friends, from paying off this small incumbrance, or from running the lot up to something like its true value to save them from loss. It cannot be doubted in this case that if the agreement to release the other one hundred and fifty acres had not been entered into, the small sum due on this mortgage would have been paid off, by the owners of that part of the property, or by some of their friends who bad notice of the intended sale; or if an actual sale had taken place, that this property, which was worth at least $5000, would not have been sacrificed for less than $57. At sales of this kind any individual has a right to bid what he pleases, and to obtain the property as low as he can, provided he adopts no means, and makes no arrangements which will have the effect to prevent competition, and thus to produce a sacrifice of the property. But if he adopts any expedient by which those who are present at the sale, or those who otherwise would have attended as purchasers, are induced not to bid, if the price at which he obtains the property is wholly disproportionate to its real value, this court may interfere for the protection of the injured party. As the loan officers had no authority to adjourn the sale, and could not themselves become purchasers of the property, they cannot be answerable for the consequences of any underhand arrangements to prevent competition to which they were not parties, and over which they had no control. The conclusion at which I have arrived on another point in this case, however, renders it unnecessary for me to decide whether the arrangements that were made previous to the sale, and to which arrangements the purchaser was a party, were of themselves sufficient to avoid the sale.

The principal question which is presented by the pleadings and proofs relates to the regularity of the notice of the sale which was given by the loan officers. Previous to the examination of that part of the case, however, it may be proper to notice the objection made on the part of the defendants to the jurisdiction of the court, that the complainant has an adequate remedy at law if the sale was made without giving the proper notice according to the provisions of the statute. The answer to this objection is, that by the default in the payment of the interest due on the mortgage in 1826, the loan officers became seized of the whole legal estate in the mortgaged premises ; so that no ejectment could have been maintained by the complainant, even if the sale was void. (Jackson v. Voorhies, 9 John. Rep. 129.) The 13th section of the act of the 8th of February, 1788, (2 Greenl. Laws, 51,) does indeed provide for a revesting of the estate of the rnort- . gagor, upon the payment of the amount due, with the costs, at any time before a legal sale has been made. But as the loan officers refused to receive the amount of the interest and costs, the complainant .could not redeem the premises, so as to reinvest himself with the legal title, except by the aid of this court, and by making the loan officers parties for that purpose.

The original act of the 18th of April, 1786, under which this mortgage was taken, (1 Greenl. Laws, 247, § 20,) required the premises to be sold at the court house of the county where the lands lay; and notices of the time and place of sale were to be fixed up at not less than three of the most public places in three or more towns, precincts or districts of the county where the premises were situated. That is, the notices were to be fixed up at three or more public places in the county, which public places were to be in three or more towns or precincts of the county; and not, as insisted upon by the complainant’s counsel, at three or more public places in each of the three towns or precincts. As the loan officers were not authorized to loan upon any property except such as was situated within the county for which they were appointed, and as there were court houses in all those counties, there could have been no difficulty, either as to the place of sale, or as to the manner of giving notice thereof, or as to' the inspection of the books and accounts of the loan officers, if divisions or alterations of the original counties had not afterwards taken place. But the counties of Albany and Montgomery were soon after divided into several counties. It then became a question whether the sales were to take place at the court houses in the original counties, in the same manner as if those counties had not been .divided, or whether the sales of such parts of the mortgaged property as fell within the bounds of the new counties should be advertised and sold in the county where the premises were then situated, according to the literal interpretation of the act of February, 1786. As the latter construction was adopted by the loan officers, another difficulty occurred. There might be two sales of different lots, one lying within the present bounds of the county for which the loan officers were appointed, and the other within the limits of the new county. As the sales were, by the statute, to be made on a particular day, it would be found impracticable for the loan officers to attend at both places at the same time, and one sale must of course fall through. Again; as no court house had yet been erected in some of the new counties, it was impossible to have a literal compliance with that part of the statute which required the mortgaged premises to 'be sold at the court house of the county where the land J lay. The legislature appear to have adopted the construction of the loan officers. And to remedy these difficulties, and

■ some others which had occurred in the execution of the statute, the act of the 21st of March, 1791, (2 Greenl. Laws, 365,) was passed. By the fifth section of that act, which applied to the loan officers of Albany and Montgomery, probably the only two counties which had then been divided since the loan of 1786, the sales were directed to be made at the court house or place where the court of common pleas should have last been holden in the county where the premises were situated. And if it should so happen that the loan officers could not attend at the different sales on the day prescribed by the statute, they were then authorized to adjourn any sale by advertisement to a further day, not exceeding fourteen days. To pay the loan officers of these counties for their extra services in advertising and attending the salés of lands.in the several counties in which the same fell by such divisions and alterations of the original counties, the act of the 11th of April, 1792, (2 Greenl. Laws, 480,) gave to each of the loan officers an addition to his salary of ten pounds. Other divisions of counties having afterwards taken place, and similar difficulties having arisen in the execution of the act of the 14th of March, 1792, relative to the new loan, further legislation on this subject became necessary. The act of the 25th of February, 1799, was therefore passed, the third section of which was in force at the time the sale now in question took place. By that section, (2 Kent & Radcliff’s Laws, 300,) which recited the great inconveniences which had arisen to the loan officers of several of the counties by reason of the division or alteration thereof, the loan officers of any county in the state were authorized to advertise and sell, all lands mortgaged to them, within the county in which such loan officers were originally chosen or appointed, any alteration or division of such county or any former law to the contrary notwithstanding. The sale in question was made in conformity to the provisions of this act; and if no subsequent alterations had been made in the law, the proceedings in this case would have been perfectly regular, so far as the loan officers were concerned. But by the fourth section of the act of March 12th, 1819, (5 Laws of N. Y. 38, a,) the loan officers, in addition to the notice previously required by law to be given of the sale, were directed to cause a copy of their advertisement to be published for eight weeks, immediately preceding the day of sale, in one of the newspapers published in the county in which the mortgaged premises are situate; or if no paper was published in such county, then in the county nearest thereto in which a newspaper was published. I am aware that in the case of The People v. The Supervisors of Delaware, (5 Cowen’s Rep. 436,) the supreme court have decided that a sale was properly made at the court house of the original county; and that it was not necessary to advertise in the new county where the premises are situate. As the sale took place subsequent to 1819, that case was not properly decided, if it appeared from the return to the alternative mandamus that there was a public paper printed in the county of Delaware for eight weeks immediately preceding the sale. It is evident, however, from the report of that case, and from the opinion of the chief justice, that it was decided upon an examination of the original act only; that the counsel for the defendants did not call the attention of the court to the various acts to which I have before referred, by which a legislative construction had been given to the original law in connection with the division and alterations of counties; and that the act of 1819 was also overlooked by them. The original act, independent of the practical construction which had thus been put upon it, might well bear the interpretation given to it by the chief justice; although I perceive that one of the difficulties which he suggests, the impossibility of the loan officers being at the court houses of two or more counties at the same time, exists in reference to the new provision on this subject incorporated into the revised statutes. (1 R. S. 373, § 44.) Under the provisions of the act of 1799 and the subsequent act of 1819, both of which were in force when this sale was made, there could be no difficulty; as the only additional duty required of the loan officers, where the several parcels of land to be sold lay in two or more counties, was to have their notice of sale published in a newspaper printed in each county. This court, in the case of Denning v. Smith, (3 John. Ch. Rep. 344,) decided that a sale made by loan officers, without giving the proper notice, was invalid, and that the purchaser was bound to see that the special authority given to the commissioners was pursued. This sale, therefore, cannot be supported.

I think there is no evidence in this case which would justify me in the conclusion that the Morgan farm was originally purchased with the money of Murray, so as to give'him the legal title as a resulting trust. It appears from the recital in the quit-claim deed of 1826, from Morgan to Murray, that the farm was purchased by Morgan in May, 1797. This must have been before his intermarriage with the widow of John Murray. It appears from the probate of the will, which is among the defendant’s exhibts, that as late as August, 1797, she was unmarried ; as letters testamentary were then granted to her and to John Eddy, by the name of Anstis Murray, executrix, and John Eddy one of the executors. After the legal title has once passed to the grantee by the deed, it is impossible to raise a resulting trust so as to divest that legal estate, by the subsequent application of the funds of a third person to the improvement of the property, or to satisfy the unpaid purchase money. The resulting trust must arise, if at all, at the time of the execution of the conveyance. (Per Jones, Chancellor, 2 Paige’s R. 238.) If the defendant Murray had only an equitable claim or lien upon the Morgan farm, upon the ground that his funds had been applied to the payment of the purchase money, or to make improvements upon the estate, subsequent to the conveyance, that equity cannot avail against a bona fide purchaser of the legal estate, whether the purchase was under a judgment or otherwise. And there is no evidence here that the complainant had notice of any such equity at the time of the sheriff’s sale.

But the defendant Murray, as the assignee of Morgan’s interest in the property, is entitled to a specific performance of the contract of the 10th of December, 1821, for the re-conveyance of the property, upon the payment of the balance due according to the terms of that agreement. If the defendants Haviland and Murray shall elect to have a specific performance of that agreement, and shall, within thirty days after service on them or their solicitor of a copy of the order to be entered in this cause, give a written notice of such election to the solicitor for the complainant, with a stipulation for the payment of such balance as may be found due upon the said contract, within such time as this court may direct, then there is to be a reference to a master residing in either of the counties of Washington or Warren to ascertain the amount thus due. To the end, that upon the coming in of-the master’s report, su'ch decree may be made in the premises as shall be just. In that case, the question of costs, as between the complainant and all the defendants, is to be reserved until til after the coming in of the master’s report.

If the defendants Murray and Haviland do not elect to have a specific performance, the decree must declare that the sale and conveyance by the loan officers was made without the due public notice of the sale which was required by law, and that they are inoperative and void, as respects the interest of the complainant in the mortgaged premises; and that he has a right to redeem the one hundred acres called the Morgan farm, by paying to the loan officers the amount due on the mortgage at the time of the sale, with interest thereon since that time. And upon the payment of the sum of $56,91 to the said loan officers, together with the interest thereon from the time of the sale, the defendants, or such of them as are in possession of the Morgan farm, must deliver up to the complainant the peaceable possession thereof. And the defendants Haviland and Murray'must pay to the complainant his costs in this suit to be taxed.

The defendant Morgan was properly made a defendant, with a view to the settlement of the question as to the specific performance of the agreement originally made with him. He has therefore no claim for costs as against the complainant; and he has no claim for costs to be decreed over against his co-defendants Murray and Haviland, under the circumstances disclosed in these pleadings and proofs. As the loan officers have acted in perfect good faith, and have only mistaken their duties arising out of the complicated legislation in relation to sales of this description, I see no reason for charging them with any part of the costs of a controversy in which they bad no personal interest; and which has been carried on solely for the benefit of the purchaser or his cestui que trust.


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    Lawrence vs. Murray and others.
    July 17.
    Where a party contracts with his debtor for the payment of a sum in gross, with interest, the debtor cannot compel him to receive a part of his debt, leaving'the residue unpaid.
    But when the creditor attempts to enforce payment of his debt by a legal proceeding, the collection of a part under the process of the court will be a payment pro tanto ; and interest upon the part so received cannot after-wards be collected.
    It is the duty of the master who sells property under an order of the court, to pay over the monies received upon the sale, to the parties entitled thereto, without delay. And if he neglects to pay over the money, as directed by the order of the court, the interest which is lost by such neglect should be charged upon the master personally.
    If the mortgagee, after a sale of part of the mortgaged premises, consents to an adjournment as to the residue of the property without any agreement as to the interest, he must receive the money raised by the first sale, and will' hot be allowed to claim interest on his whole debt up to the time of the second sale.
    This was an appeal from the decision of a vice chancellor on a question of interest arising upon the sale of mortgaged premises under a decree of the court. The premises consisted of two lots, and the same were ordered to be sold in parcels. On the day of sale, one of the lots was put up and sold for $8,700. This being insufficient to pay the whole amount due, the master, at the request of the defendants and with the consent of the complainant, adjourned the sale, and finally postponed it indefinitely. The purchase .money on the sale of the first lot was received by the master shortly after the sale, and was by him offered to the complainant’s solicitor, who refused to receive it until after the whole amount which was due on the decree should be raised. About two months afterwards, the residue of the property was sold; and the master paid to the complainant his debt and costs, including the interest on the whole debt up to the time of such payment. The vice chancellor decided that the complainant was not entitled to interest on the amount raised by the first sale, after it was tendered to him by the master and refused ; and he directed the interest that had been erroneously paid by the master to be refunded.

      B. W. Bonney) for the complainant.

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

There is no valid objection to the form in which the question, in this case, ivas brought before the vice chancellor. The master’s report of the sale, and as to the payment of the proceeds, is always made up and filed by him without giving the parties any opportunity to present objections to the draft of the report. A party may therefore apply to the court, in the first instance, to correct any error which has been made in paying over the proceeds of the sale.

Where a party contracts with his debtor for the payment of a sum in gross, with interest, the debtor cannot compel him to receive a part of his debt, leaving the residue unpaid. But when the creditor seeks to enforce payment of his debt through the medium of the officers of courts, as soon as any part of the debt is collected under the order or process of the court it is a payment, pro tanto, and interest cannot afterwards be collected upon the amount thus received by the officer of the court. Upon a sale -by the master, under a decree, the money should be paid over without delay to the parties entitled thereto ; and if the mortgagee suffers it to remain in the hands of the master, he cannot be allowed his interest, to be paid out of the surplus proceeds which belong to other persons. If the master neglects to pay over the money as directed by the order of the court, the interest should be charged upon him personally. In this case, if the complainant was unwilling to receive the $8,700 raised upon the sale of the first lot, until the whole amount was collected, he should have stated that fact at the time, and should not have consented to the adjournment of the sale, without any intimation of his intention to claim interest on the whole during the time the sale was delayed. The objection that the interest on the complainant’s costs should have been deducted, was. not made before the vice chancellor; arid there is nothing in the papers which were before him, to show that the solicitor had delivered a copy of his taxed bill of costs to the master, so as to entitle himself to the payment of his costs previous to the last sale. As the property was sold subject to the right of the tenants to occupy it for a particular period, the presumption is that the purchaser paid a less sum therefor than he would have done if the possession had been delivered immediately. The fact that the defendants continued in possession under that reservation, therefore, furnishes no reason ibr charging them with interest on the amount which was raised by the sale.

The decision of the vice chancellor must be affirmed, with costs; and the proceedings are to be remitted, so that Ms order may be carried into effect„


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    Mollan vs. Griffith and others.
    July 17.
    If the personal estate of a deceased debtor is not sufficient to pay his debts and legacies, and his executor exhausts the personal estate in the payment of creditors whose debts are chargeable both on the real and personal estate, a legatee, as between himself and the heir at law of the decedent, is entitled to stand in the place of such Creditors, pro tonto, and to recover the amount of his legacy, or so much thereof as the personal estate would have paid out of the real estate descended to the heir.
    But if the testator constitutes his personal estate a fund for the payment of his debts, and directs that the legacies shall abate if the fund is not sufficient for the payment of all his debts and legacies, it seems that the heir at law will be entitled to have a debt of the testator, which is either a specific or a general lien upon the real estate descended to him, paid out of the personal estate.
    Where the personal estate has been exhausted, by the executor, in the payment of debts charged upon the real estate descended to the heir at law, the legatee, and not the gxecutor, is the proper person to file a bill for marshalling the assets, and to obtain payment of the legacy out of the real estate.
    Where the husband has received a legacy due to his wife, and has given security to refund in case of a deficiency of assets, the executor cannot, in a suit by the .husband and wife against him to recover the rents and prof-fits of her real estate, show such deficiency and set off the same against the claim for such rents and profits ; the demands not being due in the same right.
    This was an appeal from a decision pf -the vice chancellor of the first circuit, refusing to dissolve An injunction, on bill and answer. Quintín Millen, who died in 1818, by his will directed, in the first place, that all his just debts, and his funeral expenses, should be paid as soon as convenient after his death. He then gave a legacy of $100 to his son Hugh, together with the interest on $5000 for his natural life; the Interest after the death of Hugh to be paid to his sister Mrs. Shaw, for life, and the principal to be afterwards distributed among her children. He also gave a similar legacy to his two grand daughters, Louisa, now the wife of the defendant Griffith, and Jane, the wife of the defendant Ford, jointly; the interest to be paid for their support and maintenance until they arrived at the age of twenty-five, or were married, and the principal to be then paid to them. He also gave a legaacy of $5000 to Mrs. Shaw and her children, the interest to be paid to her for life, and the principal after her death to belong to her children. He also gave to several othér persons pecuniary legacies, amounting to nearly .$3000, and made divers specific bequests. All these last mentioned legacies he directed to be paid as soon as conveniently could be done after his decease; and that if there should be any deficiency in the funds upon which all the preceding bequests were predicated,” tire deficiency should be proportion-ably subtracted from the three first legacies ; and if the funds should exceed the bequests, then one moiety of the excess was to be paid to his daughter Mrs. Shaw and her heirs, and the other moiety was to be equally divided between his son Hugh, and his nieces Louisa and Jane. At the time of his death, the testator was also the owner of lot No. 13, Oliver^street, New-York, which was not devised by the will, and which descended to his son Hugh and to the two grand daughters, Louisa and Jane; Mrs. Shaw, the daughter, being an alien. Upon this lot a bond and mortgage had been given by the testator for $2500, which was afterwards paid by the executors. The complainant, with the other executors of Millen, who are now dead, took possession of the lot, paid the taxes, assessments and repairs thereon, and received the rents for several years; Louisa and Jane being then infants, and their uncle Hugh a drunkard. Hugh died shortly after the death of his father, intestate and without issue; and his interest in this lot descended to his two nieces, who were not aliens. After the marriage of Louisa and Jane, their husbands, Griffith and Ford, received the legacies due to their wives, and each gave to the complainant a bond in the usual form, with security, to refund in case of a deficiency. They subsequently discovered that the house and lot in Oliver street belonged to their Wives, as heirs at law of their grand father and uncle, and that Molían had received the rents and profits thereof from the death of the testator. Á suit was thereupon brought in the supreme court by Ford and his wife, for her portion of the rents and profits, and a judgment was obtained for the same; which has since been collected. The complainant, after this recovery against him, still declining to pay the share of the rents and profits claimed by Griffith and wife, they instituted a suit therefor against him in the superior court of the city of New-. York. After the issue was joined in that suit, the complain^ ant filed his. bill in this cause, alleging, among other things, that there was a deficiency in the estate of the testator, in the hands of the executor, to pay all the legacies to the children pf Mrs. Shaw, she being'now dead; and this injunction was thereupon granted, staying the suit at law for the recovery of the rents and profits of the lot in Oliver street.,

      J Anthon, for the complainant.

      J. O. Grim & R. Sedgwick, for the defendants.
   The Chancellor.

The mortgage upon the Oliver street lot was to secure the payment of a debt contracted by the testator himself, and for which he gave his bond. The mortgage was therefore merely a collateral security "for the personal contract. And, as between the owners of the real and personal estate, as the law stood at the death of the testator, the personal property was the primary fund for the payment of this debt. (King v. King Ennis, 3 P. Wms. Rep. 358. Lanoy v. The Duke of Athol, 2 Atk. Rep. 444.) The revised statutes have changed this rule of equity; but that cannot affect these parties, whose rights accrued previous to January, 1830. (1 R. S. 749, § 4.) But as between a legatee, either pecuniary or specific, and the heir at law, if a debt chargeable both on the real and personal estate is paid by the executor out of the personal property, in the first instance, the legatee will be permitted to stand in the place of the original creditor, pro tanto, and may recover the amount of his legacy, or to the extent of the personal estate so appropriated, out of the real estate descended to the heir. (Culpepper v. Aston, 2 Cas. in Ch, 117. Tipping v. Tipping, 1 Peer Wins. 730. Lutkins v. Leigh, Ca. Temp. Talbot, 53.) And if the debt is a specific lien upon the land, as in the case of a mortgage, the legatee may, in some cases, stand in the place of the mortgagee who has exhausted the personal estate, even as against the devisee. (Lowndes on Leg. 393.) The will in this case directs the debts to be paid in the first place, and makes a specific provision for the abatement of the three first legacies, rateably, if there should be any deficiency in the funds upon which all the bequests in the will were cc predicated.” As the house and lot in Oliver street do not appear to have been any part of the fund upon which the legacies were predicated, or out of which the testator intended his debts and legacies should be paid, it is at least doubtful whether the principle of marshalling assets in favor of legatees can be applied to this case. It is not necessary, however, that I should express any definitive opinion on that question here, as I am satisfied this complainant is not the proper person to call upon the heirs at law. As the mortgage debt was, at law, chargeable on the personal estate in the hands of the executor, it was properly discharged by the executor out of that fund. And if the children of Mrs. Shaw • e have any claim to stand in the place of the mortgagee, on account, of the deficiency of the fund to pay their legacy, they are the proper persons to bring a suit for that purpose. As the case now stands, if the executor should succeed in recovering the amount from the heirs at law, and should neglect to pay it over to those legatees, it would not discharge the equitable lien upon the land, in their favor, if any such equitable lien exists.

There con be no set off in this case, of the rents and profits of the real estate, against the amount which may have been overpaid on account of the legacies to the defendants; because the demands are not due in the same right, and there is no pretence of insolvency on the part of the husbands of the legatees or their sureties. The amount due to Griffith and wife, for the rents and profits of her real estate, is a demand due in right of the wife; and if the husband should die before it was actually reduced to possession, it would belong to her by survivorship. The money paid for the legacy, on the contrary, was paid to the husband alone, and he and his sureties only are liable to refund in case of deficiency. The complainant should therefore have been left to his remedy on his bond, if the personal estate was insufficient to pay all the debts and.legacies.

The fact, that the defendants refuse to allow him for the taxes and repairs upon the real estate, forms no ground for withdrawing the suit, for the mesne profits, from the jurisdiction of a court of law. If the complainant has any equitable claim of that kind, it will be a matter of course to allow such claim in that suit, to the same extent that it would be allowed in this court. In Murray v. Governeur and others, (2 John. Cas. 342,) Kent, chief justice, says: “ The action for mesne profits is a liberal and equitable action, and will allow of every kind of equitable defence.” It is not stated in the bill what is the form of the action brought against the complainant in the superior court. But if the plaintiffs in that suit have affirmed the acts of the complainant, by bringing an action of assumpsit for the rents and profits actually received, that is also an equitable action, in which he will be allowed every charge which is proper, either by way of deduction from, oifoff set against, the monies received to the use of the infant heirs. The answer of the defendants explicitly and fully denies the allegation in the bill, that the complainant -expended any thing for the support or maintenance of the infants, over and above the interest on their legacy.

It is unnecessary for me to express an opinion whether this bill could be sustained, for any purpose, if all the proper parties were before the court. I am satisfied the complainant has no equity appearing upon the bill and answer to entitle him to restrain the defendants, Griffith and wife, from proceeding in their suit at law to recover the rents and profits of the house and lot. The decision of the vice chancellor must therefore be reversed, with the costs of this appeal. The injunction must be dissolved; and the costs of the defendants upon the original application to the vice chancellor are to abide the event of the suit.


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    Wager vs. Stickle and others.
    July 17.
    Where a default has been entered contrary to a verbal agreement entered into between the solicitors for the respective parties, the court cannot take such agreement into consideration in deciding upon the regularity of the default, if the objection is insisted upon, that the agreement was not in writing, or in conformity to the 121st rule.
    The court will, however, take into consideration the fact that the solicitor relied upon such verbal agreement, when that fact is set up merely as an-excuse, to enable the party to have the default set aside upon the merits, and upon the usual terms.
    This was an application to set aside an order taking the bill as confessed. The default of the defendant was occasioned by the supposition on the part of his solicitor that he had made an agreement with the solicitor of the adverse party, by paroi, to extend the time for answering. The defendant swore to a defence on the merits; and that he had also applied to the solicitor of the adverse party to waive the default, and had offered to pay the costs of such default, and to stipulate to expedite the proceedings so as to prevent any injury from the delay. ,,

      A. P. Holdridge, for the complainant,

      Killian Miller, for the defendants.
   The Chancellor.

The object of the 121st rule ivas to pre-elude the parties from raising the question, upon affidavits, as to the fact of an agreement, or consent, relative to the proceedings in a cause, which was not evidenced by writing; and thus to relieve the court from the necessity o£ settling such & question upon conflicting affidavits, as well as to prevent controversies between the solicitors. Much of the. contention between gentlemen of the profession arises out of paroi agreements of this kind, and is produced-by a misapprehension, by one party, as to what was actually intended to be conceded, or agreed to, by the solicitor on the other side. To prevent such a result, whenever the parties intend to adopt a course of proceedings in a cause different from what is required by strict practice according to the rules of the court, the solicitor for each party, whether he is granting an indulgence to his adversary, or receiving a favor from him, should be careful to have the agreement reduced to writing, so that there can be no misunderstanding as to the precise meaning and extent of the same. And no solicitor should, by a verbal stipulation, place himself in a situation where his duty to his client, who may have acquired rights in conformity with the settled principles and practice of the court, will come in conflict with an honorary obligation which such solicitor may have contracted with the solicitor of the adverse party. In cases like the one now under consideration, if the verbal agreement is denied, or even if it is admitted and the objection is made that it was not in writing, so far as the question of regularity is concerned the court must consider the agreement as not existing. If the court is satisfied, however, that a party has acted on the supposition that such an agreement had been made, although he may have been mistaken in point of fact, it may be sufficient to excuse his default, and to entitle him to relief upon equitable terms.

In this case the defendants swear to merits ; and upon looking into their answer there is a probability that they have an equitable defence to some part of the claim set up in the complainant’s bill. As the default is satisfactorily accounted for, it is a matter of course to permit the defendants to make their defence upon equitable terms. But as the order to take the bill as confessed is technically regular, they cannot be permitted to insist upon any grounds of defence which are in the nature of a penalty or forfeiture. They will not, therefore, be let in to a defence of usury, so as to deprive the complainant of the amount actually due, with legal interest thereon. The defendants are to be permitted to serve a copy of the answer, which has been already filed by them, upon payment of the costs of entering the order to take the bill as confessed, and the costs of all subsequent proceedings in the cause, previous to the 28th of June last; and upon their delivering to the solicitor for the complainant a stipulation not to insist upon the defence of usury, so far as relates to the amount actually due and the legal interest thereon ; but reserving to the defendants the right to insist upon that defence as to any excess or usurious premium included in the mortgage or securities in the complainant’s bill mentioned, or which has been paid by the defendants, or either of them.