author: Samuel Leggett,

text:
    *In the Matter of The President, Directors and Company of the Franklin Bank in the City of New York.
    June 2d.
    Samuel Leggett, a creditor of the president, directors and company of the Franklin Bank in the city of New York, having on the 29th of May last presented a petition to the court, under the act to prevent fraudulent bankruptcies by incorporated companies, &c., passed April 21st, 1825, setting forth that the company was insolvent, and praying for an injunction and the appointment of a receiver; and the court having directed a temporary injunction to issue, and that said company show why the prayer of the petition should not be granted; and the said company not having shown sufficient cause against the prayer of said petition, it was referred on motion of Mr. O. Hoffman, the counsel for the petitioner, to Thomas Bolton, Esq., one of the masters of this court, to receive from persons interested in the matter, nominations of proper persons to be appointed receiver, and to report to the court the names of the persons so nominated and their respective fitness, and also the names and sufficiency of the persons proposed as sureties; and the said Master having made his report as directed, his honor, the Chancellor, made the following order.
   Samuel Leggett,

of the city of New York, a creditor of the president, directors and company of the Franklin bank in the city of New York, having on the 29th day of May, 1828, presented a petition to this court, in pursuance of the provisions of the act entitled, An act to prevent fraudulent bankruptcies by incorporated companies, to facilitate proceeding against them and for other purposes,” showing among other things, that the said company was insolvent, and setting forth the particular facts and circumstances of the case; and praying that an injunction might be issued by this court, to restrain the said company and its officers from exercising any of the privileges or franchises granted by the act incorporating the said company, or by any other act; and from collecting or receiving any debts, and from paying out, or in any way transferring any of the moneys or effects of the said company until this court should otherwise order; and that a receiver of the property, moneys and effects of the said company might be appointed, and the said property, money and effects of the said company distributed among the fair and honest creditors thereof; whereupon, this court directed a temporary injunction to issue, and that the said ^president, directors and company show cause before the Chancellor, at the City Hall of the city of New York, on the 31st day of May now last past, at ten o’clock in the forenoon, why the prayer of the said petition should not be granted; and that copies of the said petition and of the said order to show cause, be forthwith served on the president or cashier of the said company, and on the Attorney-General of this state; and which said copies were thereupon duly served as directed by this court; whereupon, the said incorporated company, by Peter A. Jay, Esq., their solicitor, appeared before the Chancellor at the time and place last aforesaid, and did not deny the insolvency of the said company, or show any sufficient cause why the prayer of the petitioner should not be granted: and thereupon, on motion of Mr. Ogden Hoffman, solicitor for the petitioner, it was further ordered, that it be referred to Thomas Bolton, Esq., one of the masters of this court, to receive from any person or persons interested in this matter, nominations of proper persons to be appointed receiver of the property, moneys and effects of the president, ^hectors and company of the Franklin Bank in the city of New York, and to report to this court the names of the persons so nominated, and their respective fitness for the said appointment. And it was further ordered, that the said master also report the names of the sureties who might be proposed for the said persons respectively, and as to the fitness and sufficiency of the said proposed sureties to give bond with the person who might be appointed receiver as aforesaid, in the sum of fifty thousand dollars. And the said master was thereby directed to send to this court his report in this matter on Monday next, (and now last past.) And the said master having, in pursuance of the last-mentioned order, made a report to this court of the several persons named as receivers of the property, moneys and effects of the said company by the different parties in interest; by which report, among other things, it appears that James Kent, late Chancellor of the state of New York, has been nominated by the president, directors and company of the North River Bank in the city of New York, and by others; and that he is a fit and proper person for such receiver; and that *John Hone, senior, and Philip Hone are offered as his sureties for the faithful discharge of. the said trust; and that they are and each of them is of sufficient ability and. fully competent to become such sureties in the sum of fifty thousand dollars; and the truth of the several matters stated in the said petition being satisfactorily proved to this court, it is this day ordered, and this court, in pursuance of the directions of the statute in such case made and provided, doth order and direct, that an injunction do forthwith issue, agreeably to the prayer of the said petitioner, to restrain the said company and its officers, agents, solicitors, attorneys and servants, and each and every of them, from exercising any of the privileges or franchises granted by the act incorporating the said company, or by any other act; and from collecting or receiving any debts, and from paying out, or in any way transferring any of the moneys or effects of the said company, or any bond, bill, note, certificate of stock, or evidence of, or security for any debt due to the said pony, or any other property, stock or choses in action, in which the said company have any right or interest either at law or in equity. And it is further ordered, that the same James Kent be, and he is hereby appointed receiver of the property, moneys and effects of the said company, on his filing with the assistant register of this court, a bond, executed by himself and by the said John Hone and Philip Hone to the people of the state of New York, in the penal sum of-'fifty thousand dollars jointly and severally; and conditioned for the faithful performance by the said James Kent of the trust reposed in him as such receiver; and that he shall obey such orders and directions as he may from time to time receive from this court in relation to the said trust; and that he shall account for and pay or deliver over as he may be directed by this court, all the moneys, property and effects of the said company which shall come to his hands as such receiver. And it is further ordered, that the president, director, cashier, clerks, tellers, attorneys, solicitoi’s and other agents and servants of the said company, and each and every of them, under the direction of Murray Hoffman, Esq., one of the masters of this court, disclose and deliver over on oath to the said receiver all the moneys, property and effects *of the said company in their possession, or within their poiver, or under their control, or in the possession, within the power or under the control of any or either of them, and including the banking house and other real property, and the title deeds thereto, and all books, papers, memoranda and evidences of, or securities for, any debts due or owing to the said company, or in which the said company have any interest; and that they also assign over to the said receiver, under the direction of the said master, all public or private stock or stocks belonging to the said company, or hypothecated to or holden by the said company, or any officer or agent thereof, for the security of any debt due to the said company; and that they also disclose, assign and deliver over to the said receiver on oath, and under the direction of the said master, all moneys, effects, property, securities, stocks and evidences of debt which have heretofore belonged to the said company, and have been assigned by the said company or any officer or agent thereof, in contemplation of the insolvency of the said company. And it is further ordered, that the said receiver and master apply to this court from time to time for direction in the premises, as they or either of them may deem necessary. And it is further ordered, that the said receiver deposit all notes and bills belonging to the said company, payable in the city of New York, and which are not yet due and payable in the bank in the said city in which the moneys paid into this court for the benefit of suitors thereof, are by law directed to be deposited, to the end that such notes and bills may be demanded and protested, if the same are not paid at the time when such notes and bills respectively became due and payable. And the said receiver is further directed not to extend the time of payment of any debt or demand due or owing to the said company, unless he shall be satisfied that such debt or demand is unsafe, and unless additional security for the payment thereof shall be given, in which case he is authorized to extend the time of payment not exceeding six months, on receiving sufficient security for the payment thereof. And the said receiver is directed to proceed and collect without delay, all debts due and owing to the said com-pony, except in those cases where *it shall become necessary to postpone the payment, and on obtaining sufficient security as aforesaid, but that he be not required to put any demand in suit where there is not a reasonable probability that sufficient will be collected to pay the costs of suit; and that the said receiver be authorized to compound any debt due from insolvent debtors in such manner as he shall deem for the interest of the stockholders and creditors of the said company ; and that the said receiver be authorized to employ Such clerics, solicitors, attorneys and counsel, and one or more clerks, at such reasonable compensation as he shall think proper, to aid him in the discharge of the duties of the said trust. And it is further ordered, that as often as the moneys in the hands of the said receiver amount to the sum of five thousand dollars, and oftener if he shall think necessary, he shall vest the same in the public stocks of this state or of the United States, in the name of the assistant register of this court, and deliver the scrip taken therefor to such assistant register, retaining, however, at all times, in the hands of the said receiver, such sum of money as he may deem necessary for the current expenses of executing the said trust, not exceeding one thousand dollars. And it is further ordered that the said receiver dispose of all the property and stocks belonging to the said company at public auction, at such times, and on such reasonable notice in the public papers of the city of New York, as he shall deem proper. And it is farther ordered that the said receiver, with the least possible delay, make a cursory examination into the affairs and debts of the said company, and give information to the creditors of the said company by a notice to be inserted in one or more of the public papers of the said city, what, in his opinion, is the probable proportion of their debts, which the creditors of the said company may expect to receive from the property and effects of the said company. And'it is farther ordered, that the said receiver report to this court at the next term thereof in the city of New York, a full and perfect statement of the affairs of the said company, and of the amount due therefrom, and the amount of the proceeds of the property and effects of the said company, the debts due to the bank and uncollected at that time, the names of the *debtors, and the reasons why the same have not or cannot be collected; and that the said receiver give public notice in the paper printed by the printer to this state, and in the several public newspapers printed in the city of New York daily, and which circulate in the country, to the creditors of the said company, to present their claims against the said company to the said receiver, on or before the first of October next, to the end that the claims of the said creditors may be examined and ascertained; and that a division and distribution of the proceeds of the property and effects of the said company may be made among such creditors, agreeably to the statute in such case made and provided.


source: Caselaw Access Project

license: Public Domain

text:
    The American Insurance Company v. Fisk.
    May 29th.
    Wherever the remedy at law is doubtful and difficult, a court of chancery has jurisdiction.

    The act of Congress of March 3d, 1823, does not give exclusive jurisdiction of salvage and admiralty causes to the superior courts of the territory of Florida, organized by that act; and an act of the legislature of that territory, creating a wrecker’s court, is valid.
    Where such court in making an award, made an order not within their jurisdiction, it was held that this excess of jurisdiction only rendered the award void pro iatrdo.

    A tona fide purchaser of property at a judicial sale, under the order of a court having jurisdiction of the subject matter is always protected, where the proceedings are only voidable, not void.
    And courts ought to be liberal in sustaining the regularity of such sales, where there exists no doubt as to the fairness and official nature of the transaction.
    The court are likewise protected, whose proceedings have been irregular, where they have jurisdiction of the subject matter.
    In February, 1825, the ship Point a’ Petre of Bordeaux, laden with cotton and nails, was lost on Carey’s Fort reef, off the coast of Florida. Of the cotton on board, 536 bales were saved from the wreck by other vessels, and carried into Key West, where it was sold under an award of a wrecker’s court, organized at that place; and 76 per cent, of the proceeds was awarded to the salvors. Fisk is a Iona fide purchaser of 140 bales of cotton thus sold.

      *J. Duer and G. Griffin, for the complainants:
    The legislative counsel of Florida had no power to pass the law creating a wrecker’s court. That law was void, because it did not provide for an appeal from the wrecker’s court; and did not give the court any authority to order a sale of the property. An inferior court can take no power by inference. (Jones and Crawford v. Reed, 1 John. Cas. 20. Wells v. Newkirk, 1 John. Cas. 228.) The court was not constituted agreeably to the provisions of the territorial law. It does not appear that the owner selected two jurors. It should affirmatively appear the court had jurisdiction. (Entick v. Carrington, 2 Wil. 282. Stanyon v. Davis, 6 Mod. 224. Lord Covingsby Case, 9 Mod. 95. Kemp v. Kennedy, 5 Cranch, 179. John. Dig. title, Justices of the Peace and Jurisdiction.
    The award was invalid on its face. It does not contain a specification of the property as required by the territorial law. This specification is material, to determine what salvage should be allowed, and in what penalty to give a bond in case of an appeal. It does not appear the property was within the jurisdiction of the court at the time the award was made. The wrecker’s court exceed their jurisdiction in decreeing the sale of the property which might after-wards be saved from the wreck. The territorial law was not warranted by the act of Congress of March 3, 1823, which was the constitution of the territory. The act of Congress of February 1, 1826, declared the territorial act, creating the wrecker’s court, null and void.

      R. Sedgwick and Sullivan, for the defendant:
    The complainants have no remedy in Chancery. Their remedy is at law; they can bring trover. (Selden v. Hickock, 2 Caines, 166; Jackson v. Anderson, 4 Taun. 24. 1 John. 471. Heath v. Hubbard, 4 East, 121. Bloxam and others v. Hubbard, 5 East, 407. 1 Ves. jun. 416.) The term inferior court does not necessarily imply there ought to be an appeal. The act of Congress of 6th May, 1824, gives an appeal to the Superior Court of Florida. From the expression *in the record, that the jury were summoned according to the law, it may be implied that the owners selected two of the jurors. The specification of the property in the award was sufficient. If not, the complainants should have appealed. The regularity of the proceedings cannot be questioned collaterally, if the wrecker’s court had jurisdiction. (Jones and Crawford v. Reed, 1 John. Cas. 20.) The master of the vessel, who was the agent of the insurers, assented to the award. This assent binds the insurers, even if the wrecker’s court had no jurisdiction. The master, as the agent of the insurers, had a right to sell the property. (U. S. Insurance Co. v. Robinson, 2 Caines, 182. U. S. Ins. Co. v. Scott and Seaman, 1 John. 111. 1 John. Cas. 378. Coolidge and another v. The Glou. Marine Ins. Co., 15 Mass. Rep. 346.)
    The Supreme Court of the United States have decided that the territorial act of Florida was constitutional.

        Whittock v. Duffield, 2 Edw. Ch. 366.

   The Chancellor :—An objection is made to the jurisdiction of this court, on the ground that the complainant’s remedy is by an action of trover, in a court of law. The accidental.obliteration of the marks upon the cotton, which rendered it impossible to ascertain to which of the various owners of the cargo the part saved belonged, together with the complicated rights of the different parties in interest, made the plaintiff’s remedy at law at least doubtful, and certainly very difficult. These alone would be sufficient grounds to sustain the jurisdiction of this court. Weymouth v. Boger, 1 Ves. jun. 416, and per Spencer, J., in Wrathbone v. Warren, 10 John. Rep. 595.) This case, therefore, turns entirely upon the validity of the sale under the proceedings in the wrecker’s court at Key West.

There is nothing in the objection that a part of the property was not within the jurisdiction of the territory of Florida, for it is expressly admitted in the case, that 140 bales of cotton in controversy in this suit is part of the 536 saved from the wreck, and carried into Key West, before the proceedings in the wrecker’s court took place. Besides, the act of Congress of 1826, concerning wreckers and wrecked *property, expressly recognizes all the keys and shoals off the coast of Florida as belonging to the United States, and as being within the territorial jurisdiction of Florida. The only question which could raise a doubt in my mind as to the validity of the territorial act of Florida, under which the wrecker’s court was organized, is that which relates to the exclusive jurisdiction supposed to be given by the acts of Congress to the superior courts of that territory.

The complainants in this cause filed their bill in the district court of the United States for the South Carolina district, for another parcel of the cotton saved from the wreck of the Point a’ Petre, and the same defence was set up as in this case. That court decided against the validity of the sale under the proceedings of the court of Key West. The decision was reversed on appeal to the Circuit Court, and the property was restored to Canter, the claimant. From this last decision, the complainant appealed to the Supreme Court of the United States, and at the last term of that court it was decided that the act of the territorial legislature, erecting the court by whose decree the cargo of the Point a’ Petre was sold, was not inconsistent with the constitution and laws of the United States, and was valid, and that the sale made in pursuance of the award of the wrecker’s court, changed the property; and the decree of the Circuit Court, awarding restitution of the property to Canter, was affirmed with costs. This decision disposes of the objection, that the act of Congress of March 3d, 1823, which has been very properly considered by the counsel for the complainants as the constitution of the territory, gave exclusive jurisdiction of salvage and admiralty causes to the superior courts of the territory organized by that act. (The American Insurance Company et al. v. Canter, 1 Peter’s R. 511.) This decision, upon a question as to the construction of an act of Congress, and in favor of a right claimed under the constitution and laws of the United States, is binding and conclusive, it being the decision of the court of dernier resort on such questions ; and this court is not now at liberty to question the correctness of the construction put upon the act of Congress by the constitutional tribunal, whatever its opinion might have been, if that ^‘decision had not been made. It also disposes of the objections that the territorial law itself was void, not having provided for any appeal from the wrecker’s court, and that there was no authority given to the court to order a sale of the property.

It was suggested on the argument, that the territorial law was not before the Supreme Court of the United States, and therefore these two last questions could not have been examined and decided there. If such had been the case, I should have no hesitation in declaring both of these objections untenable; but as the suggestions of the counsel are not supported by the facts before me, I consider it unnecessary to take up time in discussing these questions. I have looked into the opinion of Judge Lee, in the District Court, and it is evident from that opinion that he had the territorial act before him, and had particularly examined its provisions. And Chief Justice Marshall, in his opinion, refers to the act by its date and provisions, and says, in express terms, that it is inserted in the record, and that it purports to give the power which has been exercised. In addition to this, I have made inquiry as to the fact of one of the judges of that court. There cannot, therefore be any doubt that the territorial act was before them, and that their decision was made in direct reference to its provisions.

Another objection is, that the award does not show that two of the jurors were named by the representative of the owners, agreeably to the third section of the territorial act. It cannot be necessary to inquire whether this may not be implied from the expression in the record, that the jury were summoned in conformity to the wrecking law of the territory,” because, in the case agreed upon by the parties in this suit, it is admitted that the notice was given and the jury summoned as directed by the act, and pursuant to all the forms thereby prescribed. The next objection is to the award itself. There can be no doubt, from the concluding sentence, that it was the intention of the jury, that any other portion of the cotton and nails which might be saved from the wreck and brought into Key West, before the day of sale, should also be disposed of at public auction. The wreck being *within the territorial limits of Florida, I am not prepared to say they had not jurisdiction to order that sale. Salvage was awarded only upon that part which was actually brought in, and if the residue was sold, the master, as representing the interest of all concerned, would have been entitled to the proceeds thereof. At all events, it was only an excess of jurisdiction as to that which most probably never was saved from the wreck, and therefore it could only render the award void pro tanto. (Per Woodworth, J., 5 Cowen, 737.)

The last objection which I shall consider is one which appears to be left untouched by the decision of the Supreme Court of the United States, as from the facts before that court it could not arise. The 4th section of the territorial act directs the jury to “ make up an award in writing, setting forth a specification of the property, their opinion of the mode whereby the property ought to be disposed of for the benefit of those interested, and the quantum of salvage to be allowed to the salvors,” &c. The award itself is now before me, in connection with the rest of the proceedings in the wrecking court.

It is contended by the complainant’s counsel, that it contains no specification of the property as required by the territorial act; that in consequence thereof, the proceedings of the court were void, and that the sale to the defendant Fisk, under the order of the court, did not change the property. In examining the proceedings of the court at Key West, it ought to he home in mind that Fisk was a bona fide purchaser of property at a judicial sale, under the order of a court having jurisdiction of the subject matter, and in a case where public policy, and the interest of owners and underwriters most strongly require that every reasonable encouragement should be holden out to purchasers of that description, in order to prevent a sacrifice of the property. It therefore becomes the duty of this court to sustain the proceedings of the tribunal under whose decision the sale to Fisk took place, so far as that tribunal kept within the limits of its jurisdiction. I have also the authority of a distinguished judge, who now occupies a seat upon the bench of the highest court in the Union, for saying, that the presumptions ought to be liberal in *favor of the regularity and competency of such sales, where no doubt is raised as to the fairness and official nature of the transaction. (4 John. R. 41.) The award of the jury, which forms a part of the record of the proceedings at Key West, recites the name of the ship and her master, where from, whence bound, a particular description of her cargo, 891 bales of cotton and 20 casks of nails, the day and place when and where she was stranded, and that a part of the cotton had been saved and brought into Key West by Captain Brown of the schooner Florida, and Captain Johnson of the schooner Jane. It then awards 76 per cent, to the salvors on the amount of property so saved. It appears by the record of the proceedings there, and by the pleadings'in this cause, that the cotton had lain in the water, that the deck of the vessel had been burned off before it could be gotten out, and that the original marks, &c., which distinguished the different parcels, were all obliterated. No further specification could therefore be given, unless the jury had overhauled the cotton and counted the bales, or weighed that which had been saved. I am inclined to think the award was in this respect so far a compliance with the territorial law, that it would not have been reversed on appeal for defect of form. But at all events, it was not such a defect as would make the proceedings void. They were at most only voidable, and, in such cases, a bona fide purchaser under a judicial sale is always protected; and the judge himself, whose proceedings have been irregular, is also protected, where he had jurisdiction of the subject matter, if there has been no excess of jurisdiction. (Warren v. Shed, 10 John. R. 138; Butler v. Potter, 17 John. R. 145.) The result of this opinion is, that Fisk acquired a perfect right to the 140 bales of cotton under the sale at Key West. The complainant’s bill must, therefore^ be dismissed with costs.

        Hicks v. Hotchkiss, 7 John. Ch. 297.

       A purchaser under a decree cannot be affected by error in the decree, as where sufficient notice to show cause has not been given, or where a decree has been made to sell lands, to satisfy judgment debts, without an account of the personal estate. A purchaser has a right to presume the court has taken the necessary steps to investigate the rights of the parties, and that on that investigation it has properly decided a sale. Bennett v. Hamill, 2 Sch. & Lef. 566. Nor can he be affected by constructive notice of circumstances of negligence on the part of the assignees conducting the sale. Borell v. Dann, 2 Hare, 440.


text:
    *The New York Printing and Dying Establishment v. Fitch and another.
    June 5th.
    An injunction will lie to restrain trespasses in order to quiet the possession, or where there is danger of irreparable mischief, or the value of the inheritance is put in jeopardy.
    A preliminary injunction before answer, rests in the discretion of the court, and ought not to be granted, unless the injury is pressing and the delay dangerous.
    It will not be granted to restrain a party from running a steamboat, and landing their passengers at the dock of another.
    Whether a court of equity have any jurisdiction in such a case ? Quaere.

    There are many cases in which a complainant would be entitled to a perpetual injunction upon the hearing, where it would be improper to grant him a preliminary injunction.
    The bill in this cause stated that the complainants, since 1824, have been and now are the owners and proprietors of certain real estate on Staten Island, on which they have made erections at great expense for manufacturing purposes, and of which they are in the actual and daily occupation and use, for the purposes contemplated in their act of incorporation; that among the erections and improvements connected with that real estate, is a dock and landing of great value and convenience to the complainants, in reference to their manufacturing business; that the defendants, the one as the master and the other as the nominal owner of the steamboat Marco Bozzaris, carrying freight and passengers, have lately commenced the practice of stopping from day to day, and coming to with the said boat at the complainants’ dock and landing, and of going upon the dock and fastening to the same, and discharging and taking in passengers and freight, without the consent and against the interest of the complainants, and that they continue the same from day to day in defiance of the complainants’ rights; that the defendants pretend the dock and landing are public, and that all persons have a right to make use of it; whereas the complainants charge that it is their own exclusive property, and neither the defendants or the public have any right of way, or rightful privilege over or in relation to the same.
    *The bill prays for a perpetual injunction, to restrain the defendants from using the dock or landing, and for general relief.
    A preliminary injunction has been allowed by the master, which the defendants apply to dissolve on the matter of the bill only.

      D. Selden, for the defendants,
    cited Storm v. Mann, (14 John. Ch. R. 25;) Jerome v. Ross, (7 John. Ch. R. 321;) Stevens v. Beedman, (1 John. Ch. R. 318;) Corporation of the City of New York v. Mapes and another, (6 John. Ch. R. 46;) Lord Tenham v. Herbert, (2 Atk. 483;) Eldridge v. Hill and another, (2 John. Ch. R. 281;) Livingston v. Same, (6 John. Ch. R. 397.)

      H. W. Warner, for the complainants,
    cited Waters v. Taylor, (2 Ves. & Beame, 299;) Livingston v. Same, (6 John. Ch. R. 498;) Hill v. Thompson, (3 Merrivaile, 624;) Gee v. Pritchard, (2 Swans. 415.)
   The Chancellor :—Where a motion is made to dissolve the injunction on the matter of the bill only, agreeably to the 75th rule of this court, the case must be viewed in the same manner as if it were an original application for the injunction, and opposed by the defendants’ counsel. If the complainants were now asking for this preliminary injunction, is this a case in which it would be proper for this court to grant their application? There are many cases in which the complainant may be entitled to a perpetual injunction on the hearing, where it would be manifestly improper to grant an injunction in limine. The final injunction is in many cases matter of strict right, and granted as a necessary consequence of the decree made in the cause. On the contrary, the preliminary injunction before answer, is a matter resting altogether in the discretion of the court, and ought not to be granted unless the injury is pressing and the delay dangerous. (Ogden v. Kip, 6 John. Ch. R. 60.) The case of Waters v. Taylor, (2 Ves. & Beame, 299,) relied upon by the complainants’ counsel for the purpose of showing that an injunction will be granted to prevent a multiplicity of suits at *law, was a decision upon the hearing, and in a case of partnership.

Whether the facts stated by the-'counsel on the argument, in relation to the controversy in this cause, would be sufficient to sustain the jurisdiction of this court, on the principle of quieting them in the enjoyment of their property, and preventing the necessity of a perpetual litigation, it is not necessary to decide at this time.

It is sufficient for the decision of the question immediately before the court, that it does not appear that any serious damage or irreparable injury will take place, if the defendants continue to run their boat and land their passengers, as they have heretofore done, until the complainants’ rights are admitted by the answer, or settled on the hearing. On the other hand, I can readily see that retaining the preliminary injunction may produce great injury to the defendants, and for which they would be entirely without remedy, if it should finally appear that they were only in the exercise of their legal rights.

The case of Livingston v. Livingston, (6 Johns. Ch. Rep. 497,) and the several cases there referred to, settle the principle that an injunction will lie to restrain trespasses, even where there is a legal remedy for the intrusion; but there must be something particular in the case, to sustain the jurisdiction of the court so as to bring the injury under the head of quieting the possession, or to make out a case of irreparable mischief; or the value of the inheritance must be put. in jeopardy by the continuance of the trespass.

The case made by the complainants’ bill, is not sufficient to justify the court in granting or retaining the preliminary injunction before answer, and it must therefore be dissolved.

        Ploomfield v. Snowden, 2 Paige, 355; City of Rochester v. Curtiss, 1 Clarke, 336; Arthur v. Case, post, 447; Pitley v. Eastern Counties Railway, 8 Sim. 483; New York Printing Company v. Fitch, 4 Paige, 127. See further, Am. Ch. Dig. by Waterman, tit. Injunction.


text:
    *Ward v. Van Bokkelen.
    An. injunction on coming in of the answer will not he dissolved, unless the defendants positively deny all the equity of the bill. A denial from information and belief is not sufficient.
    Twenty years, by analogy to the statute of limitations, is the period allowed in Chancery for commencing proceedings to set aside conveyances of real estate on the ground of fraud.
    Where the complainant suffered three years to elapse without compelling an answer from one of several defendants, and the other defendants in their answer charged collusion between the complainant and the defendant who had not answered; it was held that under such circumstances, the fact that all the defendants had not answered, could not be urged as an objeo tian to the dissolution of an injunction, unless the complainant denied upon affidavit, all collusion, and stated sufficient reasons for not compelling an an answer from all the defendants,
    June 6th.

      Slosson,

    on behalf of the defendants who had answered, moved to dissolve the injunction granted in this cause, restraining the defendants from taking out of court certain moneys, which were the proceeds of certain premises sold under a mortgage, alleged in the bill to have been fraudulently given by one John Post to Mrs. Morris, under whom the defendants claimed. The complainant claimed under a judgment against John Post. The injunction also restrained the defendants from disposing of all that part of the real estate which had been conveyed by John Post to Mrs. Morris, and which was still held and possessed by the defendants. Mary Post, one of the defendants, had not answered. Mr. Slosson cited Deypeyster v. Graves, (2 Johns. Ch. R. 148.)

      G. Griffin, contra,
    objected to the motion, that the answer did not positively deny the fraud charged in the bill, that swearing as to belief and information was insufficient. He contended, also, that the defendants should all answer before this motion could be made. He cited Roberts v. Anderson, (2 John. Ch. R. 202,) and Wyat’s Pr. Reg. 234.
   The Chancellor :—The answer in this case is put in by defendants, who probably knew nothing of the transaction charged in the bill to have been fraudulent. Their answer, of course, can only deny the equity of the bill, by information *and belief. They cannot deny the facts stated therein upon any knowledge they possess. The answer, therefore, is not sufficient to authorize a dissolution of the injunction. Roberts v. Anderson, (2 John. Ch. R. 202.) Independent of the complainant’s oath to the bill, the facts stated therein, and admitted by the answer, show a case of suspicion. The single circumstance, that the person against whom the decree of this court was obtained, conveyed a large estate to his mother in law, within a few days after the decree, and before it could be enrolled and enforced against the property, is sufficient to raise a doubt as to the validity and honesty of that transaction.

If the conveyance was fraudulent, no period of time, short of twenty years, will prevent the persons intended to be defrauded thereby, from pursuing their remedy against the land in the hands of the fraudulent grantee, or her heirs or devisees. Twenty years is the shortest limitation of actions at law respecting real property in this state, and by analogy to the statute of limitations, that is the shortest period which can bar a proceeding in this court to set aside conveyances of real property, on the ground of fraud.

In this case, it is no objection to the dissolution of the injunction, that Mary Post has not answered. The complainant has suffered nearly three years to elapse, without taking any steps to compel an answer from her, and it is suggested in the answer of the other defendants, that there is collusion between her and the complainant. Under such circumstances, if he wished to rely upon the objection that she had not answered, in opposing this motion to dissolve the injunction as to the other defendants, he should have produced an affidavit denying the collusion, and showing why he had not compelled her to answer. But for the the institution. The complainant was chosen president, and Edward C. Priest was appointed cashier.

The "bank commenced operations on the first of June, 1825, and within thirty days thereafter obtained the receipt of the treasurer of the state for the $25,000, required to be paid by the last section of the act of incorporation. The bank continued in operation until the 18th of November, 1825, when it stopped payment. At the time the complainant held 1,444 shares, being merely three-fourths of all the stock subscribed; and the bank held his stock notes, for $114,400, payable to Edward C. Priest, cashier of the bank, and for the security thereof, 1,144 shares of his stock were pledged. On the 23d of November, in the same year, the legislature of New Jersey repealed the act of incorporation, and appointed the defendants, together with Caleb S. Riggs, who is since dead, trustees; and authorized them, or a majority of them, to demand, sue for, collect and receive, and take into *their possession, all the goods and chattels, rights and credits, moneys and effects, lands and tenements, books of account, securities for money, evidences of debts, and all property of every nature and description, belonging to the bank at the time of passing the repealing act; and to sell and convey all the personal estate of said corporation, and pay into the Court of Chancery the proceeds of the corporate property, debts and funds, to be disposed of equitably, under the order of the Chancellor, amongst the creditors of the corporation, after allowing to the trustees a reasonable compensation for their trouble. On the 10th of December, 1825, the legislature passed a supplementary act, with a preamble reciting that doubts had arisen, touching the powers and duties of the trustees, and that it was the intention of the repealing act to preserve uninjured and unimpaired, all the then existing rights and responsibilities, whether in favor of, or against the said bank; and then enacting and declaring, that the trustees were, and from the passing of the repealing act, should be deemed, and taken to have been vested as trustees for the creditors of the said bank, and the stockholders existing at the time of the passing of the act of repeal, with all the estate, real and personal, in law and equity, and with all the credits, rights in action, debts and demands whatsoever, lawfully belonging to, or vested in the said bank, at the time of the repeal of the charter. And the trustees, or the survivors of them, are authorized to institute suits in their own names, as “trustees of the creditors and stockholders of the Eew Jersey Protection and Lombard Bank,” for any such debts or property, and to compound and settle debts and claims, and allow offsets, &c.

P. W. Radcliff and P. A. Jay, for the defendadts:—The complainant is too late in his motion to amend his bill. He should have asked to amend, as soon as the defect ivas discovered. The stock subscribed by the complainant was a sufficient consideration for his stock notes.' The failure of the bank, and the depreciation of this stock thereby, is no defence to an action upon these notes, either at law or in" equity; and the complainant can interpose the same defence *to these notes as if he had been sued thereon by the directors of the bank.

The stock was not apportioned in the manner required by the charter. The bank went into operation before the sum required was paid in. In fact there was an entire want of capital when the bank commenced business. When the bank stopped payment, the complainant held nearly three-fourths of the stock, for which he had given his note to the bank without security. These reasons were sufficient to authorize the legislature of New Jersey to repeal the charter, and appointed the defendants trustees to take possession of the effects of the bank. It was not necessary to assign these reasons upon the face of the act. The act repealing the charter was constitutional, as the right of repeal was reserved by the legislature of Eew Jersey in the act of incorporation. It was one of the conditions of the contract to which the stockholders acceded. The rule that a condition repugnant to a grant is void, does not apply to a contract between a legislature and a citizen; as the legislature is omnipotent and can alter the law. Here the power of repeal was reserved. The exercise of this power does not, therefore, come within the clause of the H. S. constitution, prohibiting every law which will impair the obligation of contracts. The fact of the bank having paid a bonus to the state of Hew Jersey for its charter, did not take away the right of repeal. It is like the case of a tenant at will who has paid a consideration to his landlord, but is nevertheless liable to be ejected whenever the landlord thinks proper to determine the tenancy. The state of Hew Jersey had power to appoint trustees. This state authorizes the appointment of receivers. The legislature of Hew Jersey possessed the power of repealing this charter without any judicial investigation. Estates have been confiscated without trial. So have estates tail been abolished without trial. This court will presume the charter of this bank was violated before the legislature of Hew Jersey repealed it. The complainant cannot object that the legislature of H. J. have destroyed the stock, he being particeps criminis, having with others produced that state of things which caused the legislature of that state to *interfere thus summarily. The bill being for discovery merely, it may be dismissed without setting down the cause for argument. Brandon v. Sands, (2 Ves. jun. 514.)

J. Tallmadge and D. B. Ogden, for the complainant:—The complainant is not too late in his application to amend his bill, by adding a prayer for general relief. (12 Ves. 48, 62, 64, 66; 15 Ves. 358.) The court will retain this cause. The complainant being lawfully here, this court ought not to send him back to a court of law. Where a court of chancery gains jurisdiction for one purpose, it may retain the bill generally. (Rathbone v. Warren, 10 John. 587; King v. Baldwin, 17 John. 384.) The complexity of circumstances in this case, will induce the court to retain jurisdiction of the cause. The complainant cannot avail himself of his offset at law, which is there limited solely to the parties on the record. (Wheeler v. Raymond, 5 Cowen, 231; Johnson v. Bride, 6 Cowen, 693.) A mere agent being holder of a note may sue, and his right cannot be inquired, into at law, unless he is the holder of the note by fraud. (Pierson v. Crafts, 12 John. 90; Murray v. Judah, 6 Cowen, 484.) Courts of law only look to the parties upon the record. (Mauran v. Lamb, 7 Cowen, 171; Conroy v. Warren, 3 John. Cas. 263; Payne v. Eden, 3 Cain. 213.) In this case, the bank having paid a consideration for its charter, it had vested rights which the legislature of N. J. could not defeat. (Dartmouth College v. Woodward, 4 Wheaton, 518.) No condition could be annexed inconsistent with the grant. Bradley v. Peixoto, 3 Ves. jun. 328; Co. Lit. 243; 2 D’Anver’s Abr. 22; Rosevelt v. Thurman, 1 John. Ch. R. 220; Jackson v. Shultz, 18 John. 174.) Under the clause in the act of incorporation reserving the right of repeal, the legislature of N. J. had no power, for any special cause, to revoke the grant. If they had this power, it could only be exercised upon an inquiry by commissioners, or upon a judicial investigation, establishing the existence of such special cause. The appointment of trustee to take charge of the property and effects of the bank was void. (Bank of Columbia v. Oakley, 4 Wheaton, 236, 245; Young v. Bank of Alexandria, *4 Cranch, 395.) These cases make a distinction between corporate franchises and ministerial injunctions, which furnishes a clue to a true construction of this repealing clause. The act of repeal blighted the whole stock of the bank. The consideration of the complainant’s notes consequently failed. When the corporation was dissolved, the debts due to and by it became extinguished. (Edmonds v. Brown & Tillard, 1 Lev. 237; Co. Litt. 13, b.; 1 Black. Com. 484; Kyd on Cor. 516.) Its personal property after-wards could only be held by right of occupancy. The act of N. J., appointing trustees, was an ex post facto law, as the act of incorporation had already provided that in case of a dissolution of the corporation, its officers should be the trustees. (Pow. Con. 445; Winnington v. Briscoe, 8 Mod. R. 51.)

The Chancellor :—If the act repealing the charter of the bank was unconstitutional, the defendants acquired no rights under that act, and the notes in controversy still belong to the corporation. It is proper, therefore, that that question should be first considered. It is a well settled principle of the common law, that the privileges and franchises granted to a private corporation become a right vested, which cannot be divested or altered, except by the consent of the corporation, by a forfeiture declared by the proper tribunal, or by act of parliament. In this country they can only be divested by one of the two first methods. Although the state legislatures have all the powers of the British parliament, where they are not positively restricted by the United States or state constitutions, the fundamental law of our free government has deprived them of the power of interfering with vested rights. In the case of The Dartmouth College v. Woodward, (4 Wheat. Rep. 518,) the Supreme Court of the United States decided, that the privileges and franchises granted to a private corporation became a contract executed, within the prohibitory clause of the constitution of the United States, which declares that no state shall pass any law impairing the obligation of contracts ; and that a law altering the charter, in a material respect, is unconstitutional *and void. Neither that case, or The Bank of Columbia v. Oakley, (4 Wheat. Rep. 235,) recognize the distinction contended for by the complainant’s counsel, between the franchises, and the administrative part of the charter. On the contrary, in the former case Judge Story says, “ Unless a power be reserved for that purpose, the crown cannot, by virtue of its prerogative, without the consent of the corporation, alter or amend the charter, or divest the corporation of any of its franchises, or add to or diminish the number of the trustees, or remove any of the members, or change or control the administration of the charity, or compel the corporation to receive a new charter. This is the uniform language of the authorities, and forms one of the most stubborn and well settled doctrines of the common law.” The decision of the court in The Bank of Columbia v. Oakley, was only an assertion of the equally well settled principle of constitutional law, that a state may pass a law materially altering the remedy of one of the parties to a contract, although it cannot pass a law impairing the obligation thereof, or changing the effect or nature of the contract, in the most unimportant particular. (Wilson v. Mason, 1 Cranch’s Rep. 44. Fletcher v. Peck, 6 Cranch, 87. State of New Jersey v. Wilson, 7 Cranch, 164. Sturges v. Crowninshield, 4 Wheat. 122. Green v. Biddle, 8 Wheat. 1.)

The validity of the act repealing the charter, must, there fore, depend upon the effect that is to be given to the seventeenth section of the original act of incorporation. This section, in terms, gives the legislature a right, at any time, to alter, amend or repeal the act of incorporation. But the counsel for the complainant contends that this section is repugnant to the grant of the franchises contained in the other parts of the act, and is therefore void. The common law principle, that a condition repugnant to the grant is void, has no application to this case. The seventeenth section is not a condition repugnant to the grant; it is only a limitation of the grant. Even in a common law conveyance, a power of revocation reserved to the grantor was valid. It is true, that by the statute of frauds, (1 Rev. Laws, 77, sec. 5,) all grants of land, with a power of revocation, are declared to be void as against *puichasers who purchase of the grantee before the power of revocation is executed. The object of this statute was to prevent the frauds which were practiced under such powers, at the common law; but even since this statute, the estate will be di vested if the power of revocation is executed while the title remains in the grantee. If the rule of the common law were otherwise, it could not affect this case. The legislature of New Jersey were competent to alter any rule of the common law. They might, by law, declare that a power of revocation reserved to the grantor in a deed of feoffment should be valid, and that the executing the power should divest the estate granted; or that a general restriction against alienation should be good in a conveyance in fee. And if they could authorize other persons to insert such conditions in their contracts and grants, surely the legislature could annex such a power of revocation to their own grant. The reservation of such a power in a legislative grant, if it was contrary to the common law, would of itself change the law in relation to that particular grant; and the statute law of the grant itself would form the law of that case. It is not pretended that there is anything in the constitution of New Jersey, or of the United States, which prohibits the reservation of such a power in a legislative grant; on the contrary, the insolvent laws of the states have been sustained, on the principle that a general law of the state where the contract was made, and which was in force at the making of such contract, is to be taken as a part of the contract. (Blanchard v. Russell, 13 Mass. Rep. 16. Mather v. Bush, 16 John. Rep. 233. Hicks v. Hotchkiss, 7 John. Ch. Rep. 297. Ogden v. Sanders, 12 Wheat. Rep. 218.) And I apprehend there never would have been any doubt as to the validity of insolvent discharges, if the provisions of the insolvent laws have been actually incorporated into the contracts, as forming a part thereof. The power of repealing the bank charter was therefore legally and constitutionally reserved to the legislature “of New Jersey, and this court will not presume it has been improperly or unconscientiously exercised.

If it were necessary for the defendants to show that the legislature had good cause for repealing the charter, I think *there is sufficient in the bill and answer in this case, to show it was not only the right, but the duty of the legislature to put an end to the banking powers of this corporation as soon as possible.

By the act of incorporation the capital stock of-the bank was to be $400,000, divided into 4,000 shares of $100 each; and if any excess was subscribed, the commissioners were to apportion it among the several subscribers. But the corporation were authorized to commence operations when $200,000 was subscribed and paid in. It does not appear, from the bill and answer, how much was subscribed, or whether there was any excess over the 4,000 shares. But it does appear, that of the 217 persons who were subscribers, 187 got no stock; and the commissioners, instead of dividing the 4,000 shares among the subscribers, as directed by the act, limited the number of shares to 2,000, which they were not authorized to do by the act of incorporation. Of that 2,000 the complainant took 800, and the other five commissioners 200 each, and they distribu ted the remaining 200 among 24 other persons. Having thus secured the stock, the complainant and four of his associate commissioners elected themselves directors, in conjunction with four other persons, and appointed the complainant president. The directors gave him $30,000 for his secret services in procuring the charter. With this he was enabled to pay for 300 shares of his stock, which he afterwards pledged to the commissioners of the school fund to secure his bond for the bonus, which he substituted in lieu of the money received from the bank for that purpose. He alleges in his bill, that he bought in 644 shares of the stock subscribed by other persons; for which, and the remaining 500 shares of his original subscription, he gave his notes to the bank without security, for $114,400, and pledged the stock for the payment. By these operations, if all the residue of the stock subscribed was paid in, the capital could not exceed $30,600. If, as was most probably the case, the other directors got discounts in the same proportion, there was not only an entire want of capital, but the institution was insolvent to the extent of $25,000 when it commenced operations. And as might well have *been anticipated, by those who knew the situation of the institution, the country was flooded with bills of no value, and the bank stopped payment in less than six months after it went into operation. The legislature, under such circumstances, would have done injustice to the community if it had not immediately put a stop to this abuse of the privileges granted by the act of incorporation.

What then was the effect of this repeal, upon the debts, credits and property of this corporation ? The effect, at common law, of the dissolution of a corporation, it is not necessary to consider in this case, because the common law is changed by the statute of New Jersey passed in January, 1817, which was read by the complainant’s counsel on the argument. That statute provides, that on the dissolution of a corporation of this description, the directors then in office shall be trustees for the stockholders and creditors; and all the property and rights of the corporation are transferred to such trustees. Such would have been the effect of a simple repeal of the charter of this bank. But the same power which had a right to change the common law, had also a perfect right to change the trustees provided for by the act of 1817. This was done in the repealing act. There never was an instant of time when the creditors of the bank were released from the obligation of their contracts, or when any rights vested in the directors as trustees.

The defendants in this case have all the rights which were vested in the corporation at the moment of its dissolution; and the complainant can make any defence to an action brought against him by the trustees which he might have made against a suit brought by the corporation, had it continued in existence. They have, therefore, no right to recover against him as the drawer of the bill of exchange on Thomas B. Woodward, or as indorser of the notes of Daniel Mallery, or Abraham Collins & Co.; in the drawing and indorsing of which he was acting only as an officer of the corporation. If he has destroyed the collateral security which was taken for the Mallery note, the remedy against him cannot be by action on the note, as indorser. Whether the notes for $114,400 were given in pursuance of a direct *agreement between McLaren and his co-directors, in payment of his stock, as stated in the bill, or by way of discounts, to enable him to withdraw from the bank the capital paid in, as alleged in the answer, cannot materially vary the rights of the parties. The one would be a direct, and the other an indirect fraud upon the act of incorporation and upon the other stockholders of the bank, as well as upon those who might become creditors of the institution under the belief that the $200,000 capital required to be paid in before the bank commenced operations had actually been paid. Whatever shift or device was resorted to for the purpose of evading the provisions of the act of incorporation, a court of chancery will never permit it to be set up to defeat a recovery on those notes for the benefit of the creditors of the bank, who are entitled to be first paid out of the trust property. In either state of facts, the consideration for these notes has not failed. If there is any surplus after paying the debts of the bank, the complainant as a stockholder will be entitled to his share thereof, under the provisions of the repealing act and the act supplementary thereto. That surplus cannot be ascertained until the whole of the debts and property of the bank are collected and turned into money, and deposited in the Court of Chancery of New Jersey for distribution. It follows, from what has been said, that the complainant,, so far as respects these stock notes, cannot be entitled to the only relief which is asked for in his bill. In relation to his set-off, there can be no doubt of his equitable right to be allowed for any demand which he had against the bank at the time of the repeal of its charter. If he has purchased up bills of the bank, or procured the assignment of other claims, since that time, he cannot avail himself of them as a set-off; but must come in for his distributive share with the rest of the creditors.

In consequence of the difficulties in relation to a set-off at law, since the decision of the Supreme Court in Wheeler v. Raymond, (5 Cowen’s Rep. 231,) it is probable the complainant, on a bill properly framed for that purpose, might have been entitled to the aid of this court in allowing his set-off against the notes, on account of the doubt and difficulties *of such a defence at law. When he sought the aid of a court of chancery for this purpose, he should have stated more particularly the nature and amount of those claims for set-off, and the particular circumstances under which they accrued. He should also have framed the prayer of his bill in such a manner that the court would be enabled to direct an account of the debt and credit to be ascertained here, and to decree a payment of the balance which was justly due. As the bill now stands, the defendants are entitled to a dissolution of the injunction, except so much thereof as restrains them from proceeding against the complainant as drawer and indorser of the bills and notes which were drawn and indorsed by him as an officer of the corporation.

But as the complainant has asked leave to amend the prayer of his bill, I shall endeavor to modify the injunction in such a manner as to do justice between the parties, and shall permit the complainant to amend his bill, if he thinks proper to avail himself of such permission.

It is very doubtful whether the bill, as it now stands, is anything more than a bill of discovery. To such a bill, the answer of the defendants would necessarily be different from the answer to a bill of discovery and relief. In the latter case, many matters of defence might properly be set up, which would be unnecessary and impertinent in an answer to a bill of discovery merely. If the complainant avails himself of the permission to amend, it must be on payment of the costs of the former answer and of the subsequent proceedings thereon.

hf the complainant prefers to have his account with the trustees settled under the direction of this court, as he has not disclosed the items or amount of the set-off which he claims, he must pay into court the amount of the stock notes with interest, to abide the further order and decree of the court, and the injunction will then be retained. But if he prefers to avail himself of a defence at law, I can only require of the defendants, as a condition of the dissolution of the injunction, that they stipulate to allow him to give in evidence any equitable set-off which he had against the demands of the bank at the time of the dissolution of the incorporation.

      (1) Apthorpe v. Comstock, 1 Hop. 140; Little v. Marsh, 2 Iredell’s Eq. 18; Poor v. Carleton, 3 Sumner, 70; Norton v. Woods, 5 Paige, 260; Manchester v. Day, 6 id. 295; Everly v. Rice, 3 Green. Ch. 553. See further Am. Ch. Dig by Waterman, tit. Injunction.

      (2) Effect will be given to the statute of limitations in equity as well as in law. Lewis v. Marshal, 1 McLean, 16; Lewis v. Marshal, 5 Pet. 496; Humbert v. Trinity Church, 24 Wen. 587; M’Crea v. Purmont, 16 Wen. 460; Thomas v. Harvie, 10 Wheat. 146. But the statute of limitations is not always applicable to cases of equitable cognizance merely; Attorney-General v. Purmont, 5 Paige, 620; it is generally adopted; Humbert v. Trinity Church, supra; cases of fraud excepted: Michoud v. Girod, 4 How. U. S., 503; Marks v. Pell, 1 John. Ch. 594.

       2 Kent, 306, n.


text:
    *Patterson v. The Mayor, &c., of the City of New York and J. R. Peters.
    June 8th.
    The Court of Chancery has no power to review upon the merits the proceedings of the commissioners of estimate and assessment of damages in opening streets in the city of New York.

    Where the commissioners, after they had deposited a copy of their report in the clerk’s office, pursuant to the 182d sec. of the act of the 9th of April, 1813, (2 B. 1. 411,) altered their assessment of damages, it was held not to be necessary to deposit a new copy of their report in the clerk’s office, or to publish a new notice to propose objections to the assessment.
    But if it was necessary to file a new copy of the report and publish a new notice, the omission to do so would only render the proceedings voidable; in which case, the remedy would be by certiorari.

    The Court of Chancery has no jurisdiction in such cases, unless the proceedings are wholly void.
    The complainant filed his bill in this cause for relief against an order of the Supreme Court, made in August term, 1827, confirming the report of commissioners of estimate and assessment, in relation to the improvement of Herring street, between Christopher and Amos streets, in the ninth ward of the city of New York. He complained that after the commissioners had deposited a copy of their report in the clerk’s office, agreeably to the provisions of the 182d section of the act of the 9th of April, 1813, (2 Rev. Laws, 417,) in which he was allowed $500 for his damages, they reduced that allowance to $250. He alleged that he made no objection to the first sum, and was not aware of the alteration in time to apply to the Supreme Court to oppose the confirmation of the report; and he prayed an injunction to restrain the corporation from completing the improvement by removing his dwelling-house, &c.
    An ex parte application having been made for the injunction, the Chancellor directed notice of the application, and a copy of the bill to be served on the attorney of the corporation.

      J. Grim, for the defendant,
    cited Gardner v. The Trustees of Newburgh, (2 John. Ch. Rep. 162,) and 15 John. Rep. 537.

      *M. Ulshoeffer, for the defendants,
    cited Leroy v. The Corporation of New York, (4 John. Ch. Rep. 352;) Jerome v. Ross, (7 John. Ch. Rep. 315;) Salk. 148; 1 Bac. Abr. tit. Certiorari, g.; 20 John. Rep. 430.

        Wiggin v. Mayor of New York, 9 Paige, 16. Whiting v. Mayor of New York, post, 648.

   The Chancellor Two questions arise in this cause, which it may be necessary to consider. 1st. Was there any irregularity in the proceedings complained of? 2d. If there was irregularity, has this court jurisdiction to stay the proceedings of the corporation by injunction? The cases of Leroy v. The Mayor, Aldermen and Commonalty of the city of New York, (4 John. Ch. Rep. 352,) and Mooers v. Smedley, (6 John. Ch. Rep. 28,) conclusively settle the principle, that this court is not authorized to review the proceedings on the merits.

The alleged irregularity is, that the commissioners altered the assessment and reduced the amount allowed to the complainant, without any written objections being put in by him, and without notice to the complainant to appear and oppose. On looking into the statute under which these proceedings were had, I am inclined to believe it was not intended by the legislature that any further notice should be given than the one which was published in this case. In the assessment and appraisal of damages in these street cases, what is allowed to that class of persons whose property is taken for the improvement, is to be charged upon another class whose property is supposed to be benefitted thereby. The necessary result of this is, that if any one objects to the amount allowed to or assessed upon himself, the commissioners cannot alter that allowance or assessment without making a corresponding change in relation to some or all of the others.

The statute directs the deposit of the copy of the report and public notice thereof to be given in the newspapers, and of the time and place of presenting the report to the Supreme Court for confirmation. If any person is dissatisfied, he may within ten days make his objections in writing to the commissioners; and if objections are made, they must review the assessment before presenting it to the court. The legislature *never could have contemplated the deposit of a new copy and a new notice to propose objections, as often as the commissioners reviewed their assessment. Such a construction of the act would be productive of great and unnecessary delay, and would be inconsistent with the provision which directs the notice of presenting the report to the court to be given at the same time with the notice of the depositing the copy for inspection, that objections in writing may be made thereto. The notice to propose objections to the report is a sufficient notice to those who are satisfied with the original report, to appear before the commissioners and oppose any alterations which may be proposed by the persons objecting. At the expiration of the ten days, they can apply to the commissioners and ascertain whether any objections are made, and they will then be at liberty to be heard in opposition thereto. If the commissioners decide in favor of the objections, the original notice points out the time and place for the persons aggrieved thereby to appear before the Supreme Court and oppose the adoption of such amended report.

But if the proceedings were irregular in this respect, this court cannot interfere, unless the irregularity is such as to make the whole proceedings void. Probably this court would not suffer the corporation to pull down the complainant’s house, and dispossess him of his property under color of authority, where the whole proceedings were absolutely void. But if there is an irregularity which renders the proceedings voidable merely, this court has not jurisdiction to afford the relief sought. Persons other than the corporation have rights vested under the order of confirmation, which can only be divested by a direct proceeding, to annul the order of confirmation. The result of a reversal on certiorari would be to vacate the proceedings, so far as they had been irregular, and to place the parties in the situation in which they were before the order of confirmation. But the effect of a perpetual injunction to stay the defendants from pulling down the complainant’s house, would be to prevent the contemplated improvement, and at the same time leave the corporation liable to the other persons, in whose favor damages have been allowed.

*In this case the proceedings were, at most, voidable; they were not void.

If the complainant was entitled to notice to appear before the commissioners and oppose the reduction of his allowance for damages, he had a perfect remedy at law by certiorari. He was apprised of the alteration in August term, 1827; and if he had then applied for and obtained that writ, he would long since have had the decision of the proper tribunal on his case. He had no right to expect the corporation would pay the difference between the original and the amended reports. If he is entitled to the larger sum, it must be assessed upon those who are benefited by the contemplated improvement.

The motion for the injunction must be refused with costs.


text:
    French and another v. Kirkland and others.
    June 19th.
    Under the act of the 12th of April, 1816, for draining the great marsh or swamp on the Canasaraga Creek, in the towns of Sullivan and Lenox, in the county of Madison, the proprietors of the lands overflowed by that creek have a right to drain the marsh according to the provisions of the act, although in so doing they would divert the water from the mill of the complainants, which is situated on the Chitteningo Creek; inasmuch as at the time the act was passed they could have drained the marsh in the manner contemplated by that act, without injuring the mill of the complainants on the stream below; since which time, the greater portion of the waters of the Chitteningo Creek have been diverted by the state to supply the Erie canal. By the 5th section of the act, the complainants have a complete remedy against the proprietors of the land to be benefited, for all damages they may sustain in consequence of the draining of the marsh Whether they would have such remedy against the state ? Qmre.

    By the act of the 12th of April, 1816, entitled “An Act for draining the great marsh or swamp on the Canasaraga Creek, in the towns of Sullivan and Lenox, in the county of Madison, and for other purpose,” the proprietors of the lands overflowed by the waters of the Canasaraga Creek, or otherwise called the Great Marsh, are authorized to drain the same by one or more canals or ditches to be cut and opened from the sand marsh or creek by the most direct and Convenient route or course into the Oneida Lake; and also, if necessary, by lateral canals and ditches from the marsh to the main canal or ditch. Commissioners are to be appointed to assess and impose upon the lands of the proprietors rendered more valuable, or in any wise benefited by reason of the cutting of the said canals, such sums of money as they may think reasonable and just, not ex-eeeding $2 per acre, towards defraying the expenses of the operations and the subsequent repairs. And the lands may be sold for the payment of such assessments, if the proprietors shall neglect to pay the same. By the 5th section of the act, it is provided, that in case any person shall be injured, or suffer damage by occasion of the canal and draining of the land, the commissioners shall estimate and determine the amount of such damage, and shall thereupon assess the same upon the proprietors; and cause the same to be collected in like manner as the assessment for the expenses of draining off the lands, and paid over to the persons entitled to such damages.
    The waters of the Canasaraga and Cowasalone creeks unite in the southerly part of the marsh. After their junction, the united stream is called the Black Creek; the most northerly bend of which is within the marsh, near the north edge thereof, about three-fourths of a mile from the Oneida Lake. It is at this point the agents of the proprietors are cutting a canal or drain from the Black Creek to the lake. The complainants are the owners of a mill on the Chitteningo Creek, some distance below its junction with the Black Creek. They allege that the cutting the canal into Oneida Lake will divert the water from their mill, and render it useless; and they pray an injunction to restrain them from continuing their operations.

      N. P. Randall, for the complainants.

      Jonas Platt, for the defendants.
   The Chancellor :—It is contended on the part of the complainants, that the act of 1816, being for the benefit of the individual proprietors of the lands in the marsh, must be *construed strictly; and that in so construing it, the defendants have no right to interfere with the waters of Black Creek. On looking at the localities of the marsh and creeks, on the map which has been considered by both parties on the argument as correct, I am satisfied the defendants are proceeding to drain the marsh in the manner contemplated by the act of 1816, and are not exceeding the powers granted by that act. At the time the act was passed, they could have drained the marsh in the manner they are now endeavoring to do, without injuring the property of the complainants or other owners of mill privileges on the stream below. Since that time, however, the greater portion of the waters of the Chitteningo Creek have been diverted by the commissioners of the state for the purpose of supplying the canal. The owners of the marsh having a vested right to drain their lands in this manner, previous to the passing of the canal law, it may well be doubted whether the complainant’s remedy for any damage they may now sustain in consequence of the exercise of this right, is not against the state instead of the owners of the lands drained. But, if otherwise, the act of 1816 has given them a full and perfect remedy. In giving a construction to that act, it may be necessary to refer to the previous law which existed in relation to the Great Marsh.

On the 4th of April, 1806, an act was passed, authorizing the draining of this marsh, the first section of which act was substantially the same as that of 1816. The second section made it the duty of the surveyor-general to ascertain the practicability of draining, and to direct the manner of doing it. The third section provided for the appointment of commissioners of assessment, to apportion the expenses of the draining among the proprietors in proportion to the benefit by them respectively received; and any real or personal estate belonging to each proprietor was made liable to be sold for the payment of his share of the expense. The fourth section provided for the assessment of damages to other persons, and gave a similar remedy for the collection of the amount from the proprietors. The act of 1816 changed the mode of payment, both as to the damages and the expenses. Instead *of the individual and personal responsibility of the proprietors, their lands alone are made liable for the payment. In the case of expenses, however, the restriction has gone still further; and the amount chargeable upon the land of each proprietor can in no instance exceed two dollars per acre. But in relation to the damages, no such limitation is provided. The fifth section of the act of 1816 is copied from the act of 1806; and the principle of assessment there intended, means the principle of apportioning the amount of damages among the proprietors in reference to the benefit received by each. The legislature never could have intended to limit the damages to be paid to third persons in consequence of the acts of the proprietors, to two dollars per acre.

It was reasonable, as the proprietors acted by a majority, that the rights of the few should be protected against the acts of the many, by a proper limitation. But such limitation would be unreasonable in relation to the damages done to third persons, for the joint benefit of the proprietors. If any doubt exists as to the intention of the legislature, it is the duty of the court, in construing their acts, to presume they did not intend to take away individual or private property without just compensation to the owners. The complainants have, therefore, a legal and adequate tribunal to ascertain, collect and pay any damages they may sustain by reason of the draining of the marsh; and.the motion for an injunction is refused with costs.


text:
    McGown v. Wilkins.
    June 25th.
    In mortgage and partition sales in Chancery, if the premises aro not sold at the risk of the purchaser, he will not be compelled to complete the purchase, in case the premises should be incumbered, or no title should pass by the sale, or there should be difficulty in obtaining possession.
    The complainant applied for. an order that Thomas Brass. a purchaser of the premises in petition, be compelled to complete his purchase. Brass resisted the application, on the ground *that a third person was in possession at the time of the sale, claiming to hold adversely to the title of the complainants; and that the person so in possession is wholly insolvent, and refuses to give up the possession. The purchaser bid the Ml value of the premises; none of the parties at the sale supposing the person in possession claimed to hold adversely, or that he intended to retain possession.

      James Smith, for petitioner.

      J. Wallis, for purchaser.
   The Chancellor :—The title to the premises is undoubtedly sufficient, and the only question in this case is, whether the purchaser is bound to complete the purchase, and be at the expense of an ejectment suit against a person who can neither pay the costs or mesne profits, to obtain possession of the premises for which he has paid the full value. This is not like the case of a sale by the sheriff on execution. There the court never gives possession to the purchaser, even as against the party to the suit. In mortgage and partition cases, the proceeding is directly against the land; and this court will compel the delivery of the possession to the purchaser, as against the parties in the suit, and those who have come into possession under them pending the litigation. For the purpose of obtaining a fair price for the premises on such sales, it is important that purchasers should know, that if they pay a fair price for the property, and it is sold without reserve, they will be protected by the court, and will not be compelled to take an incumbered or worthless title. If there is any cloud upon the title, or incumbrance upon the land, or difficulty in obtaining possession, the property should be sold at the risk of the purchaser in that respect; and in the amount bid, there would then be a reasonable allowanee for such risk. In this case, I think the purchaser should not he compelled to take the title, unless the parties, for whose benefit the property was sold, can give him the peaceable possession of the premises. If that cannot be done, the property must be put up again, and sold at the risk of the '^purchaser, unless the parties interested in the amount bid at the first sale consent that the expenses of obtaining possession, and the value of the mesne profits from the time of the completion of the purchase until possession is delivered to the purchaser, be paid out of the purchase-money.


text:
    Benson and others v. Le Roy and others.
    June 30th.
    Where one party is examined as a witness against another party in the same cause, he may be cross-examined, like any other witness, by the party against whom he is called, and his evidence cannot be used in his own favor.
    But where a party is examined before a master in relation to bis own rights, the examination is in the nature of a bill of discovery. He cannot be cross-examined by bis own counsel, nor can he give evidence in his own Cwor any farther than his answers are responsive to the questions put to him.
    He may, however, accompany his answer by explanations responsive to the interrogatory, which may be necessary to rebut any improper inference arising from such answer.
    On the application of the defendants, Roswell L. Colt was ordered to be examined as a party, before the master, in relation to a claim made by him against the estate of Jacob Le Roy, deceased, in the hands of the defendants. The object of the defendants was to show, that certain entries in the hooks of the partnership were not made previous to the death of Le Roy. Among other questions put to Colt, by the defendants, he was asked where he was at the death of Le Roy, and how long he had been there ? He answered, that he was at Trenton, and had been there about four days. His own counsel then proposed to ask him when he left the city of New York to go to Trenton, and how long he had been in New York prior to his so leaving it. To this, the counsel of the defendant objected, and the master refused to put these questions to the examinant. An application was then made to this court to reverse the decision of the master.

      D. B. Ogden and O. Hoffman, for the motion.
    *R. Emmet and J. I. Rosevelt, contra.
   The Chancellor :—When a party is examined as a witness against another party in the cause, he stands in the same situation as any other witness, and may be cross-examined by the party against whom he is called; but his testimony cannot be used as evidence in his own favor. When he is examined before a master, in relation to his own rights in the cause, the examination is in the nature of a bill of discovery. There can be no cross-examination by his counsel; and he cannot give testimony in his own favor, except so far as his answers may be responsive to the questions put by the opposite party. To that extent, his answers are evidence in his own favor, on the same principle that the answer of a defendant, responsive to the bill, is evidence against the complainant. The ancient practice was to file written interrogatories for the examination of a party, to which he put in his answer in writing. The modern practice of examining orally before the master, does not alter the rights of either party. The examinant may accompany his answer by any explanation, fairly responsive to the interrogatory, which may be necessary to rebut any improper inference arising from the answer.

In this case, the fact that the examinant was in Trenton at the death of Le Roy, and for four days previous thereto, could raise no presumption that he was not in New York immediately before that time. The evidence in his own favor, which was attempted to be drawn from him by the questions put by his counsel, was not fairly responsive to the questions put by the other side, “ Where were you at the death of Le Roy ? and how long had you been there ?” The master, therefore, decided correctly in refusing to permit the examinant to answer the questions put by his own counsel; and this application to reverse the decision of the master is refused, with costs, to be paid by Colt, the applicant.


text:
    *Hurd and Sewall v. Everett.
    June 30th.
    Amendments to a bill, when allowed, are always considered as forming part of the original bill. They refer to the time of filing the bill, and the defendant cannot be required to answer anything which has arisen since that time.
    This was a petition for a rehearing, on exceptions to master’s report, disallowing exceptions to third answer of defendant to the amended cross-bill.

      H. D. Sedgwick, for the complainants.

      W. Slosson, for the defendant.
   The Chancellor :—The amendments to a bill, when allowed, are always considered as incorporated in, and as forming part of the original bill. They have reference to the time of filing the bill, and the defendant cannot, by any amendment, be called upon to answer any thing which has occurred since that time. Considering the amended bill in this cause as an entirety, and as if the defendant was now for the first time called upon to answer it, the prayer introduced by the last amendment is perfectly senseless, and is not supported by any thing contained in the bill. It presents the strange anomaly of a prayer in a bill, that the defendant may be compelled further to answer as to matters which will be contained in his answer, but which are no where referred to in the bill, except in such prayer. The subject matter of the exception relied upon in this case was, therefore, such as the defendant was not bound to answer.

Independent of this informal and impertinent prayer, the subject matter of the bill, as amended, is fully answered.

The petition for a rehearing is dismissed, with costs to be paid by the complainants.


text:
    *In the Matter of the Petition of Howe and wife.
    H. was seized in his own right of an undivided fourth part of a tract of land, and was also seized in right of his wife of one other undivided fourth part thereof. D. & T. also each owned one undivided fourth part. The share of T. was subject to a mortgage. A voluntary partition was made of the premises between the parties, by which two lots thereof were released by D. & T. to H. and wife, and the residue was released by H. and wife to D. & T. as tenants in common, they paying to H. and wife $615 for the difference in value. Afterwards the mortgagee, without regarding the partition, and without making H. and wife parties to the suit, foreclosed his mortgage against T. in Chancery, and sold one undivided fourth of the whole premises, leaving a balance due on the mortgage after the sale. Previous to the foreclosure, and subsequent to the partition, several judgments were recovered in the Supreme Court against T. T., after the recovery of these judgments, assigned all his property to trustees for the payment of his debts. Subsequent to this assignment, the premises released as aforesaid by H. and wife to D. & T. were sold by virtue of a decree in Chancery, obtained in a partition suit brought by one of the heirs of D. One-half of the proceeds of this partition sale had been paid to the representatives of D., one-fourth to the mortgagee of T., and the remaining one-fourth was in the hands of the master. Under these circumstances, this remaining one-fourth was decreed to he applied in satisfaction of the balance due on the mortgage against T,, for the purpose of discharging the two lots released to H. and wife from the hen of that mortgage.

      June 30th.
    Had the mortgagee made H. and wife parties to the bill for foreclosure of the mortgage against T., the court would have decreed a sale only of the share assigned to T. upon the voluntary partition. The equitable rights of H. and wife were not altered or affected by the general assignment of T., for the benefit of his creditors, or by the judgments recovered against him subsequent to the voluntary partition.
    The general assignees of a bankrupt, take his estate subject to every equitable claim existing against it on the part of third persons; and this is the case, although they had no notice of such claims at the time of the assignment. A different rule exists in the case of mortgagees and Iona fide purchasers of the legal estate.
    Judgment creditors have no preference over prior equitable claims against the estate of the debtor.
    Thus a contract for a mortgage or the sale of real estate, has been preferred to judgments recovered subsequent to the contract.
    An agreement for a mortgage is, in equity, a specific lien on the land.
    Previous to the 3d of January, 1817, the petitioner, Howe, was seized, in his own right, of one undivided fourth part of a certain tract of land in the city of New York; and was also seized in right of his wife, of one other undivided ^fourth part thereof. David Dunham owned one undivided fourth, and the remaining one-fourth belonged to D. D. Tompkins. The share of Tompkins was subjected to the lien of a mortgage given by him to George J. Banks, in October, 1806. On the 3d of January, 1817, an unequal division of the premises was made by the parties in interest; by which two lots were released by Dunham and Tompkins to Howe and wife, and the residue was released by Howe and wife to Dunham and Tompkins, as tenants in common; they paying to Howe and wife $675 for the difference in value. In December, 1821, Banks filed a bill in Chancery to foreclose his mortgage, without noticing the partition which had been made of the premises, and without making Howe and wife parties. A decree was obtained for the sale of one undivided fourth part of the premises as originally mortgaged; and at the sale, Banks bid the same in, leaving a considerable balance still due on his mortgage. In May, 1821, three judgments were recovered in the Supreme Court against D. D. Tompkins, which judgments have since been assigned to Gr. W. Tompkins, as guardian of Ray Tompkins, an infant. In July, 1821, another judgment was recovered in the same court in favor of Mangle Minthorne. On the 15th of January, 1822, D. D. Tompkins made a general assignment of his property to Isaac Pierson and others, as trustees, for the payment of his debts; and two days thereafter, Cornelia Juhel recovered another judgment against him in the Supreme Court. In 1825, one of the heirs of Dunham filed a bill in this court against his widow and the other heirs, for partition of the lands released by Howe- and wife to Dunham and Tompkins, to which suit Banks and the assignees of Tompkins were also made parties. Under a decree in that cause, the premises have been sold. One-half of the proceeds have been distributed among the representatives of Dunham, one-fourth has been paid to Banks, and the remaining one-fourth is in the hands of the master, subject to the further order of this court. The petitioners claim to have the moneys in the hands of the master applied in satisfaction of the balance due on Bank’s mortgage, for the purpose of discharging their two lots from the lien of that mortgage. *The judgment creditors of Tompkins claim to have it applied towards their judgments, and the assignees of Tompkins claim it for the benefit of the creditors generally. The balance due to Banks on the mortgage, after deducting the whole amount, for which the original undivided fourth sold upon the foreclosure, exceeds the amount of the fund now under the-control of the court.

      C. C. King, for the petitioners.

      W. Kent, for G. W. Tompkins.

      D. S. Jones, for the executors of Minthorne.

      H. W. Warner, for the assignees of Tompkins.

      W. Slosson, for Cornelia Juhel.
   The Chancellor :—If the division of the property between the original owners, threw the whole mortgage previously given by Tompkins upon his undivided half of the premises released to himself and Dunham on that division, Banks would clearly be entitled to the funds in the hands of the master, to satisfy the balance now due on his mortgage. That balance would still remain a lien upon so much of that undivided half as was not sold under the decree of foreclosure. But if, after that division, as I am inclined to believe, under the circumstances of this case, the mortgage remained a lien at law upon the one-fourth of the two lots conveyed to Howe and his wife in severalty, the foreclosure was a nullity as to these lots, Howe and wife not being parties thereto. And the balance due on the mortgage being a subsisting lien on the undivided fourth part of the two lots, it may still be enforced against them. Howe and wife have therefore a direct interest in having this balance paid out of the moneys arising from the sale of that part of the property which they gave him in exchange on the original division. As between Howe and wife and Tompkins, there could be no doubt of their equitable claim to have those moneys thus applied. If Banks had filed his bill to foreclose the mortgage immediately after that division, and had made Howe and *wife and Dunham parties to the same, there can be no doubt that this court would have decreed a sale of the share assigned to Tompkins on that division, to satisfy the mortgage. And the question which now arises is this: Are the equitable rights of Howe and wife altered or divested by the general assignment of Tompkins for the benefit of his creditors, or by the judgments which have been recovered against him subsequent to that division? It is a well settled rule of equity, that the general assignees of a bankrupt take his estate subject to every equitable claim which exists against it by third persons; and that they cannot avail themselves of the legal estate thus acquired, to defeat a prior equity, of which they had no notice at the time of the assignment, They differ in this respect from bona fide purchasers of the legal estate, and from mortgagees who have advanced their money on the credit of the land, and who are considered quasi bona fide purchasers.

I can see no good reason why a different rule should be applied to general assignees, for the benefit of all the creditors, created by the voluntary act of the debtor, from that which prevails in respect to those created by operation of law. Neither can be considered as bona fide purchasers, who are protected because their legal estate is united to an equal though subsequent equity. Sir Simon Stuart’s case, referred to by the counsel and by the Lord Chancellor, in Burn v. Burn, (3 Ves. jun. 576,) was an actual conveyance to trustees for the benefit of creditors; and yet it was held that a prior contract for a mortgage was entitled to a preference. The case might be different where creditors, without notice of the prior equity, had released their debts in consideration of an assignment made to trustees for their benefit.

The judgment creditors of Tompkins are in no better situation than his general creditors in relation to this fund. Their judgments were not specific liens on the land to which the petitioners’ equity attached. They were general liens on all the estate of the judgment debtor; but as such they cannot prevail as against the prior equity of the petitioners. I have not found any reported case in this state, where this question has been examined. It has frequently been discussed *in the English courts, and sometimes in the courts of this country; and I have once had occasion to examine it in the equity court for the fourth circuit.

The earliest case on this subject which I have found, is Burgh & Burgh v. Francis & others, decided by Lord Keeper Finch, in 1670. (Cases Temp. Finch, 58; 1 Eq. Cas. Abr. 320, S. C.) In that case, a bill was filed by the executors of an equitable mortgagee against the heir at law of the mortgagor, and his judgment creditors, to perfect a defective conveyance by way of mortgage, and to be relieved against the judgments, which at law were a lien upon the mortgaged premises. The court decreed a perpetual injunction against the judgment creditors, unless they should choose to come in and redeem the mortgage, which the heir at law was directed to give. This decree is said to have been after-wards affirmed by Lord Nottingham. (Per Vernon, arguendo, 1 Peer Wms. 279.) There is a note in Fonblanque’s Treatise on Equity, (1 Fonb. 34, note r,) referring to that case, and by which its authority is attempted to be shaken. But the annotator is evidently wrong in supposing that is the only case to be found in the books where a court of equity has interfered, in prejudice of a defendant having a legal interest for a valuable consideration and without notice. The decision in the Suffolk case, referred to in Nelson’s Reports, (1 Nels. Ch. Rep. 184,) supports the decision in Burgh v. Francis; and in 1715, the same principle was most distinctly recognized by Lord Cowper, in the case of Finch v. The Earl of Winchelsea, (1 Peer Wms. Rep. 282.) In Burn v. Burn, (3 Ves. jun. 576,) the counsel, Sir John Scott, attorney-general, (afterwards Lord Eldon,) and Mr. Mitford, solicitor-general, (afterwards Lord Redesdale,) state it as a well known principle, that courts of equity constantly control the effect of judgments subsequent to a contract for the sale of the estate. And in the case of Sir Simon Stuart's estate before referred to, it was also held that the equitable mortgagee was entitled to a preference over subsequent judgment creditors.

In Delaire v. Keenan, (3 Desauss. Rep. 74,) the Court of Chancery of South Carolina decided, that an agreement for *a mortgage was in equity a specific lien on the land; and that the mortgagees were entitled to a preference over subsequent judgment creditors. Chancellor Desaussure, in delivering his opinion, refers to the decision of Lord Cowper, in Finch v. The Earl of Winchelsea, and says the opinion delivered in that case has been the settled doctrine ever since. The same principle was sanctioned by the Supreme Court of Pennsylvania, in the case of Foster v. Foust, (2 Serg. & Rawle, 11,) and by Washington, Justice, in the case of Hurst v. Hurst, in the Circuit Court of the United States. (2 Wash. C. C. Rep. 69; 3 Binney, 347, note, S. C.) The same principle is recognized by several elementary writers, as the established doctrine of the courts of equity in England. (Sugden’s Law of Vendors, 336; 2 Cruise's Dig. 64, tit. 14, Estate by Statute, Merchant, &c., sec. 50.)

In the matter before me, I can decide in favor of the manifest equity of the case, not only without disturbing any known legal or equitable principle, but in perfect accordance with the settled doctrines of this court. I shall therefore direct the moneys in the hands of the master to be paid over to Banks, in satisfaction of the balance due on his mortgage.

       The assignee .succeeds only to the rights of the assignor: Luchenbach v. Brickenstien, 5 Watts & S. 145, takes the property subject to all equities: Moody v. Litton, 2 Ired. Eq. 382; Leger v. Bonnaffe, 2 Barb. S. C. 475; Addeson v. Burckmyer, 4 Sanf. Ch. 498: and to all liens, Corning v. White, 2 Paige, 567; Haggerty v. Palmer, 6 John. Ch. 437; if on buildings, for building materials; Twelves v. Williams, 3 Whart. 485, and he takes deposits in banks, subject to any lien of the bank existing when the assignment was made, Beckwith v. Union Bank, 4 Sanf. S. C. 604, and land subject to the interest of Devisees; Swoyer’s Appeal, 5 Barr. 377. See further Am. Ch. Dig. by Waterman, tit. Assignment.

       See Dwight v. Newell, 3 Comst. 185.