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    Hosack & Blunt, executors, &c. vs. Rogers and others.
    1837. April 4.
    Where a firm consisting of three persons became insolvent and made an assignment of the copartnership property for the payment of its creditors ; and the senior partner covenanted that he would pay to such of the creditors as should release the two junior partners the full amount of their debts, if the assigned property was not sufficient, out of the proceeds of his claims upon the French government, when the same should be received; and the senior partner afterwards died, having made R., one of the creditors, executor, who afterwards recovered a part of the claims upon the French government ; Held, that the covenant was in equity a specific appropriation of the fund for the payment of the balance due to the creditors who executed the release to the two junior partners, which entitled them to a preference in payment out of that fund as against the general creditors of the decedent; and that the executor could, therefore, only have his rateable proportion of the fund with others who executed the release, but could not retain for his whole debt.
    The revised statutes do not take away the right of an executor to retain for his own debt out of the estate of a testator who died previous to 1830, although the assets out of which he seeks to retain came to the hands of the executor subsequent to that time.
    The distribution of the estates of persons who died previous to the adoption of the revised statutes, must be made according to the law as it then existed, and not according to the rules of the revised statutes.
    An executor’s right to retain, extends to debts due to him jointly with others, or in the character of trustee, as well as to those which are due to him solely and in his own right.
    The mere fact that an executor is an octogenarian, if in possession of his faculties in other respects, is not a sufficient reason for removing him from his trust, or for taking the property out of his hands.
    As a general rule, upon a bill filed against an executor or administrator for a distribution of the estate of the decedent, if it appears that there is a clear balance in his hands uninvested, beyond all just claims made by him upon the fund, such balance will be directed to be brought into court and invested pending the suit.
    Where an abandonment is rightfully and properly made, although the underwriters have not accepted the same and paid the loss, the spes recuperandi, so far as the property was covered by the policy, belongs to the underwriters. And it seems, that the assured has no equitable lien thereon in the hands of the underwriters, for the payment of the loss in preference to other creditors.
    The firm of Archibald Gracie &. Sons having become embarrassed and being indebted to A. Hosack, the complainant’s testator, and to R. King, N. Rogers & Sons and several other creditors in a very large amount, Á. Gracie, in behalf of the firm, made an assignment of certain claims which they had upon the British government, for the payment of the debts of such of the creditors as should become parties to the assignment and should thereby release the two junior partners of the firm from all further liability. And A. Gracie, the senior partner, covenanted with such creditors that if the assigned claims upon the British government should prove to be insufficient to pay their debts in full, the deficiency should be paid out of the monies which might be recovered and received by him, or his executors or assigns, from the French government, on account of certain large claims which he then had upon that government; when and as soon as the monies for such claims should be received by him or his executors or assigns. The claims of A. Gracie upon the French government arose out of the capture and condemnation of his property under the Berlin and Milan decrees; upon which property $20,000 had been insured by the Commercial Insurance Company in 1807. After the property upon which this insurance was made had been sold under the orders of the French government, Gracie abandoned to the underwriters. He afterwards recovered a judgment for the full amount of the policy against the company, in May term, 1816 ; but, as was alleged by the complainants, no record of the judgment against the insurance company was ever made up and filed. The insurance company subsequently became insolvent, and J. B. Murray and othei’s were appointed trustees of its effects, and only a part of the judgment was paid to Gracie. In the assignment of A. Gracie & Sons it was provided that if any of the creditors residing in the United States should neglect or refuse to become parties thereto for the space of thirty days from its date, or, if residing out of the United States, for the space of six months, their share of the assigned property should be paid to such creditors as should become parties to such assignment, to the extent of their several debts. All the creditors, except Baring &■ Brothers, Ewart, Myers & Co., King & Gracie, and A. T. Sampayo, who resided in England, became parties to the assignment by executing the same within the time prescribed; King & Gracie were the agents of A. Gracie & Sons in relation to their claims upon the British government, and were informed of the contemplated assignment and arrangement for the discharge of the two junior partners of the firm ; but before they had notice of the execution of the assignment they had succeeded in recovering sufficient of those claims to pay thirty-five per cent upon the amount of the debts. They thereupon paid to the English creditors their proportion of the fund, according to the intended arrangement, and transmitted the residue to the United States, which was received and distributed rateably among the other creditors. Baring & Brothers and the other English creditors did not become formal parties to the assignment; but upon the receipt of their portion of the proceeds of the claim upon the British government, and within two months after the date of the assignment, they executed an instrument, under their hands and seals, by which, in consideration of the thirty-five per cent thus received, they agreed to accept the same in full of their debts so far as related to the two junior partners, but it was not to discharge A. Gracie, the senior partner by whose request and consent that discharge of the junior partners was given. The whole amount of debts due, including the balance of a debt due to R. King a part of which had been previously provided for, was at the date of the assignment #255,905, exclusive of interest thereon for about one year. And the amount due to N. Rogers & Sons, exclusive of interest, was $42,464. After the death of A. Gracie, his surviving executor, N. Rogers, caused his claims under the French treaty to be presented to the board of commissioners, and they were allowed so far that the amount of his dividend, exclusive of costs and agent’s commissions, amounted to about $73,000. Murray, as the surviving trustee of the insurance company, was also allowed the full amount of the policy for the insurance money paid or to be paid to Gracie or his executor. And certificates for the several sums allowed were duly issued to the persons in whose favor these allowances were made. About the time N. Rogers received the certificates for the amount allowed to him as the executor of A. Gracie, the complainants filed their bill in this cause, as the executors of A. Hosaclc, in behalf of themselves and other creditors of A. Gracie, against N. Rogers as bis executor, and against the several creditors who-were provided for in the assignment or their representatives, for an account and distribution of the estate' of A, Gracie among his several creditors according tó their equitable rights; and also for an injunction to restrain N. Rogers the executor from receiving the money on the claims allowed to him, or from receiving payment of the judgment against the insurance company out of the monies to be received by Murray on the claim allowed to him as trustee of the company.- An injunction was allowed according to the prayer of the bill, but was not served until after N. Rogers had obtained the certificates of the amount allowed to him as executor. The complainants thereupon filed a supplemental bill, stating the fact that the executor had obtained the certificates, and praying for an injunction to restrain the several deposit banks in the city of New-York from paying the certificates and to prevent him from receiving payment thereon; which injunction was granted as prayed for.
    Shortly after the issuing of the last injunction, the complainants petitioned the vice chancellor of the first circuit, before whom the proceedings were commenced, for an order directing N. Rogers the executor to surrender up the certificates to the clerk of the court, and for a receiver to collect the amount of the certificates as they became payable and to invest the same to abide the decision of the cause. This application was resisted on the part of the executor,, who claimed the right to retain for the amount of his debt,not only out of the money due upon the judgment against the insurance company, and other personal estate of A, Gracie, but also out of the amount due on the certificates granted to himself as such executor, and who also claimed the right to receive and control the whole fund until a decree for the distribution thereof should be made in the suit. Several of the other creditors, who were made defendants in-the original bill, also appeared by their counsel before the vice chancellor, upon the hearing of the petition, and resisted the claim of the executor to retain in his possession any part of the funds arising either from the French claims or otherwise. After hearing the several parties, the vice chancellor made an order that the executor should within five days deliver to the clerk the several certificates and the money, if any, which he had received thereon, and should execute the necessary power to enable the clerk to receive the money due on the certificates and all other monies and effects belonging to the estate of Gracie mentioned in the bill and supplemental bill; that he should attend and be examined on oath touching the premises; and that the clerk should invest the monies in the New-York Life Insurance and Trust Company on interest, to abide the further order of the court, after paying to the executor his lawful commissions as executor; without prejudice to the rights of any of the parties. From this order N. Rogers the executor appealed to the chancellor; and in the meantime he deposited the certificates with the clerk, but without endorsing the same or executing any other authority for the clerk to receive the money thereon. Upon the coming in of the answer of the executor, an application was made by him to the vice chancellor to dissolve the injunction, or to modify the same so as to permit him to collect the monies due from Murray, as the trustee of the insurance company, to the estate of A. Gracie ; which motion was denied. And from this decision of the vice chancellor the executor also appealed. After the argument of the first appeal, cross applications were made at different times by N. Rogers, and by the complainants, for a temporary disposition of the fund while such appeal was under consideration. But as the parties could not agree as to what disposition should be made of it, and as the certificates were not endorsed so as to put the fund fully within the control of the court until the appeal was decided, no orders were made upon those applications.

      J. W. Gerard & G. Griffin, for the appellant.
    The appellant having accepted the executorship of Archibald Grade, and entered on the duties thereof prior to the year 1830, he had a vested right to retain for his debt out of any, then present or future assets. An executor may retain for an equitable debt, (Wm. Black. 965. 4 Vesey, jr. 763. Wms. on Ex’rs, 688. Tol. on Ex. 297. Weeks v. Gore, 3 P. Wms. note. Waring v. Danvers, 1 P. Wms. 295. Ram on Asset?, 271. Tol. on Ex. 415. Nones v. Barlow 1 Sim. & Stu. 588. Ram on assets, 271, 317. 1 Story’s 519, 520. Moses v. Murgatroyd, 1 John. Ch. Cas. 19. Codwise v. Gelston, 10 Johns. R. 57. Decker v. Miller, 2 Paige, 150.) The revised statutes operate prospectively and do not take away the right of retainer in antecedent cases. (Dash v. Van Kleek, 7 John. R. 477. Sayre v. Wisner, 8 Wendell, 661. The People v. Supervisors of Columbia, 10 Idem, 363. Ward v. Kitts, 12 Idem, 137. Van Rensselaer v. Livingston, 12 Idem, 490. 2 Paige, 150. 1 Story’s Eq. 522. Bryant v. Marshall, 12 Mass. Rep. 321.)
    The covenant of Archibald Gracie in the assignment, dated 27th April, 1824, to pay out of his French claims, the deficiency, (if any,) arising out of the assignment of the English claims thereby assigned, was not an equitable assignment or mortgage of the French claims, so as to give the creditors a specific lien thereon, the covenant being a personal covenant merely. (Bailey v. Boulcott, 4 Russ. 345. Bradley v.-, Ridg. Ca. in Chan. temp. Hardwicke, 194. 2 Roses’ Rep. 355, Ex parte Heywood in the matter of Holmes, 14 East, 582, Williams v. Everett. 2 Leigh’s Rep. 19, Clayton v. Fawcett. 5 Verm. Rep. 97, Brainard & Newton v. Barton. Hagman v. Sompeyrac, 3 Louisiana Rep. 154. Lepard v. Vernon, 2 Ves. & Beame, 51. Vandekar v. Vandekar, 11 Johns. Rep. 122. Nicholls v. Trustees of Huntington, 1 John. Ch. Rep. 183. Heath v. Hall, 4 Taunt. Rep. 326.) The covenant is a several not a joint covenant. (5 Dowl. & Ryl. 106. 3 Barn. & Cres. 254. 5 Price, 529. 1 Saund. 153, n. 1. Chitty on Plead. 3, 6 and

      cases there cited, ed. of 1825. Servante v. James, 10 Barn. & Cres. 410. 1 John. Cas. 319. 1 East, 407. 2 Mod. 82. Comyn’s Land. & Ten. 108,456. 8 Mass. Rep. 462.)
    This is virtually an attempt to call in the aid of the court of chancery to decree a specific execution of a personal covenant for the payment of money. (1 Mad. Ch. 402. Platt on Cov. 556.) Nehemiah Rogers had a right to the possession of all the assets until after the final decree in the cause, or at least he should not have been deprived of such possession on mere motion before answer. At all events, his claim to retain for his own debt, ought not to have been disturbed until a final hearing and decree in the cause. (Hopkins, 429, Orphan Asylum v. McCartee. 2 Atk. 126. 12 Vesey, 4. 2 Eq. Cases, Ab. 420. Will, on Ex. 31, 113,120,122. Id. 1251, 112. 5 John. Ch. Rep. 158. 2 Swanst. 650. Tol. on Ex’rs, 34. Van Alstyne v. Hunter, 5 John. Ch. 158. Hoffman’s Ch. Prac. 319 to 327.) The decrees are erroneous in ordering any part of the monies received from the commissioners, under the French treaty, to be brought into court, and in not dissolving the injunctions in toto.

    These are not equitable assets. (Story’s Eq. 519, 520, 521, 522. 2 Will, on Ex. 1033, 1034, 1035. 2 Atk. 50. Jeremy’s Eq. Juris. 525. 1 John. Ch. Rep. 119.) The defendant, Nehemiah Rogers, was entitled to retain his commissions on the whole amount of the monies received under the French treaty. He was entitled to retain the dividend of his debt, even on the principle that the covenant of Archibald Grade contained in the assignment of the 27th April, 1824, was an equitable assignment or mortgage. The monies due from James B. Murray, as trustee of the Commercial Insurance Company, forms no part of the French claims. The abandonment to the underwriters transferred to them the property covered by the policy, and all claims arising out of it; and they became entitled to all the rights of owners of the property. (1 Philip’s on Ins. 382, 458, 479. 15 Mass. Rep. 346. 9 John. Rep. 26. 1 Caines’ Rep. 673. 12 Mass. Rep. 96. 8 John. Rep. 183. 5 Peter’s S. C. Rep. 604. 1 Idem, 213.)

      J. Blunt & D. Lord jr. for the complainants and Baring and Brothers.
    The deed of April 27th, 1824, operated to create a specific lien and claim upon the moneys to be recovered by Archibald Gracie, his executors, administrators or assigns, on account of his claims on the French government in that deed mentioned. (Bradley v. Root, 5 Paige, 640. Fashion v. Atwood, 2 Ch. Cas. 6, 36. Powell on Contracts, All. Beckley v. Newland, 2 P. Wms. 182. Wright v. Wright, 1 Vesey, sen. 409, 412. 3 Keb. 304. Co. Litt. Butler’s note, 145. Winch v. Keely, 1 T. R. 622. Yeates v. Groves, 1 Vesey, jun. 280. Row v. Dawson, 1 Vesey, sen. 332. Ex parte Perfect, Mont. Rep. 25. 3 Deacon & Chitty, 218, 334. Lett v. Morris, 4 Simon’s Rep. 607. 1 Mad. Rep. 55, 331. 4 Bro. Ch. Cas. 6, 64. 1 Sim. St. Rep. 590, 607. Ex parte South, 3 Swanst. 392.) That deed being in its nature a general arrangement between a debtor and his creditors, gave a right to a rateable distribution of the fund among all the creditors entitled under the deed, without preference of one over anotheri (See Newland on Contracts, ch. 25, p. 414. Rose v. Leicester, 4 East, 372. Morris v. Bank of England, 2 Cas. Temp. Talbot, 218. Moses v. Murgatroyd, 1 John. Ch. Cas. 130. Ellis, Debtor and Creditor, 201—206. Wadeson v. Richardson, 1 Vesey Beame, 103, 110.) By the operation of the deed upon the debts of the creditors assenting thereto, such debts were released at law, and they will be upheld in equity only in subordination to the equitable rule of a rateable distribution. (Cheetham v. Ward, 1 Bos. & Pul. 630. 10 John. R. 518. 7 Id. 207. Co. Litt. 232. Kirby v. Taylor, 6 John. Ch. Cas. 250.) By the covenants in the deed, N. Rogers, if entitled to retain, can only retain for his rateable share of the fund; and this has been allowed on his own statement of the amount. (Ram on Assets, 271. Hopton v. Dryden, Prec. in Ch. 181. 2 Ch. Cas. 54.) By the rules of law and equity applicable to general agreements between debtor and creditors, any right of retainer which might have arisen under any previous act of any of the parties, debtor or creditors, (as the will of A. Gracie in the present case,) was waived by the coming into such a general arrangement. (Rose v. Leicester, 4 East, 372. McKenzie v. McKenzie, 16 Vesey, 372. 2 T. R. 64. Sadler v. Jackson, 15 Vesey, 52. Jockman v. Mitchell, 13 Vesey, 581. Ellis, Debtor and Creditor, 200, 201, 202, 206. Ram on Assets, 271. 2 Eq. Cas. Ab. 426. Hopton v. Dryden, Pre. in Ch. 181.) Nehemiah Rogers, as surviving executor of Archibald Gracie, was, as executor, a mere trustee of the fund in question; and it is of course, on application of parties entitled, to require payment into court of monies to which the executor in his own right has no title, (Strange v. Harris, 3 Pro. Ch. Cas, 365. Jordon v. Rothbey, 3 Vesey, 572. Blake v. Blake, 2 Sch. Lef. 26. Tare v. Harrison, 2 Con. Ch. Cas. 377. Vigrass v. Binfield, 3 Mad. R. 62. Langley v. Hawk, 5 Id. 46. Mortlock v. Lethes, 2 Mer. Ch. R. 491. Jenkins v. Jenkins, 1 Paige, 243. 10 John. R. 65, 522. 12 Idem, 276. 2 Sim. & Stu. 217. 1 Story's Equity, 506, 507.)
    Nehemiah Rogers, as executor and trustee, sets up claims in hostility to his trust, and ought not to be allowed, against the will of the parties interested in the fund, and under the circumstances of his extreme age, the probable duration of the suit for the administration of the fund, his own hostile claims and conduct, and the situation of his own estate, to be permitted to hold and administer the body of the fund. (1 Jac. Walk. 112. Grands Advice to Trustees, 42. Gordon v. Rothbey, 3 Vesey, 572. Andrews v. Powys, 2 Bro. Pari. Cas. 476. 12 Vesey, 4. Lupton v. Lupton, 2 John. Ch. Cas. 627. Haggarty v. Furniss, 1 Paige, 321.) As executor or trustee he has no right to use the trust fund for his own purposes, nor to mix it with his own estate, which would embarrass the trust. He therefore can sustain no injury by a deposit of the trust fund, under the order of the court for its protection; and his purpose to possess himself of it against the consent of the creditors of A. Grade's estate for the purpose of an unequal distribution in his own favor renders him an unfit depository. The circumstances of the case stated in the bill of complaint require an account to be taken of the debts provided for in the deed of April 27, 1824, of the funds realized; and. with the trust character attached to the latter, the cáse required the exercise of the jurisdiction of a court of chancery. Where a fund is in dispute, the court will order it to be brought iri and invested for the security and benefit of the claimants.
    The claim upon the French government for the loss of Grade’s property, insured with the Columbian Insurance Company, was a part of the claims on France comprehended in the deed of 27th April, 1824, whether A, Gracie retained a lien on it or not. The question was as to the actual or legally implied intention of A. Gracie, rather than as to the right of absolute property in the spes recuperandi. Until actual payment in full of a total loss of property insured, the insured has an interest in property abandoned as security for his payment; and until an actual deed of cession of the property, all remedies must be pursued in the name of the assured. (Gracie v. N. Y. Insurance Co. 8 John. Rep. 245. Randall v. Cockran, 1 Ves. sen. 98. 1 Edens R. 130.) If the claim for the money in the hands of the trustee of the Commercial Insurance Company is not comprehended in the deed of 27th April, 1824, and N. Rogers has any right as executor to retain it, then it ought to be taken into account upon his debt; and either he is to be postponed claiming under the deed of 27th April, 1824, until the other creditors have received an equal per centage, or he can only receive a rateable dividend from the French fund in respect to the balance of his debt, after deducting the money realized from the first mentioned claim. The decree appealed from ought to allow the defendant N. Rogers to retain, on his accountable receipt,- only a rateable proportion of the money payable on the certificates in his name as executor and in Murray’s name as trustee, and to require him to pay into the clerk’s hands for investment all the residue after deducting the executor’s commissions;
    No answer has been filed by Samuel. Rogers, Henry Rogers and Edward N. Rogers, and it is contrary to the practice in courts of equity to dissolve injunctions when the parties charged with actual knowledge of the facts charged in the bill of complaint have not fully answered-
      (Eden on Injunc. 59, 66. Rowcroft v. Donaldson, 1 Fowl. Ex. Pr. 286. Bolieme v. Porter, Barnad. Ch. Rep. 352. De Peyster v. Graves, 2 John. Ch. C. 148. Satterlee v. Bargy, 3 Paige, 142.)
    T. Sedgwick, jun. for the residuary legatee of A. Gracie.
   The Chancellor.

The order of the vice chancellor was clearly wrong in directing the executor of A. Gracie to pay into court the small sums in his hands received under the Neapolitan treaty, or any other funds which were in nowise connected with the French claims. If the complainants, and other creditors of A. Gracie and Sons who accepted the assignment and released the two junior partners, are to be considered as having released the senior partner also* except so far as related to his interest in the French claims, the complainants had no right to call upon the executor to account for any other portion of the property of the decedent which had come to his hands or which belonged to him in his general character of executor. On the other hand, if the complainants and N. Rogers & Sons still retained their claims against Gracie, so that he and his other estate were still liable for the payment of the deficiency in case the proceeds of the claims both upon the English and French governments were not enough to pay the whole, the executor is undoubtedly entitled to retain for his own debt in preference ; as the law was at the time the testator died, in 1829. Previous to the revised statutes the right of the executor to retain was unquestionable. Even the payment of the money into court, or into the hands of another executor or a receiver under the direction of the court, would not deprive him of that right. (Langton v. Higgs, 5 Sim. Rep. 228. Chissum v. Dewes, 5 Russ. Rep. 29. Decker v. Miller, 2 Paige’s Rep. 149.) The right to retain extended also to debts due to him jointly with others, or in the character of trustee, as well as those due solely to himself in his own right, as he could not in either case bring a suit against himself as executor to recover such a debt. (2 Will, on Ex’rs. 685.) And the right to retain for his debt, out of any future assets which might come to his hands as executor, having become vested by the assumption of the trust previous to 1830, the provision of the revised statutes taking away future preferences among creditors and depriving the executor or administrator of his right to retain could not divest the right. The distribution of the estates of persons who died before the first of January, 1830, must be made to the persons who would be entitled to receive them, so far as their rights were then vested, in the same manner as if the law on this subject had not been changed. The judgment in favor of Hosack against the three copartners could not be released as to two of the defendants therein, so as to leave it still subsisting at law as a judgment debt against the senior partner, and thereby to entitle it to a preference in payment out of his estate. And without a release it could only have survived, at law, as against the other two. But if it was the intention of the parties that A. Gracie should remain personally liable for the whole debt, notwithstanding the release, it would still be a subsisting debt against him in equity. At present I am inclined to think that it was not the intention of Gracie, or of the creditors who executed the assignment, that he should be personally liable for their debts beyond the amount which might be received from the French claims. And if such was the legal effect of the assignment as to those who became parties thereto, then the English creditors have neither complied with its letter or its spirit in such a manner as to entitle them to share with the other creditors in the proceeds of the French claims. They did not in fact become parties to the assignment within the six months from its date, or even within the six months from the time when they must have heard of it; and all except King and Gracie, who do not appear to have released the two junior partners, have expressly reserved a right to collect the residue of their debts from A. Gracie. And as this'release is stated upon its face to have been given with his consent and at -his request, they have still an existing claim against his general estate, if any, in the hands of his executor or which may hereafter come to his hands, unless such claims are barred by the statute of limitations,

It would be improper, in this stage of the suit, to express any definitive opinion upon the question whether the execution of the assignment was a valid release, in equity, of all further indebtedness of Archibald Gracie, or his estate, beyond the proceeds of his claims upon the French govern» ment. The answers of most of the creditors who executed the assignment, and who are directly interested in the question as the right of the English creditors to participate in the special fund depends upon it, are not before me on these appeals. The facts also may possibly be varied by the proofs. If it was the intention of the assignment to reserve a general right to claim payment of the debts from A. Gracie personally, then the release of the English creditors, although in a separate instrument, may be considered as a substantial compliance with the terms of the assignment, and they are entitled in equity to participate in the special fund upon which a specific equitable lien is given by the covenant of A. Gracie. On the contrary, if they have reserved to themselves a personal claim against the senior partner which they would not have been entitled to under the assignment, although they gannot now be deprived of the 35 per cent which they received as the consideration of their release, they will not be entitled to participate in the fund arising from the French claims. And in that case they must proceed in their own names against the surviving executor, or the estate of the deceased executrix, or both, to obtain the residuary estate now in his hands or which the executrix received before her death. But they cannot come in under a bill filed by parties who have no legal or equitable claim upon such residuary fund. Neither in that case can such residuary fund be taken out of the executor’s hands in this suit, even if his debt is discharged as to such residuary fund so that he has no right to retain as against the general creditors of Gracie or his residuary legatee.

For reasons similar to those before stated, it may be improper to express a definitive opinion upon the question whether Gracie’s judgment against the underwriters, so far as it remained unpaid at the date of the assignment, was a part of his claims upon the French government within the intent and meaning of the covenant in that assignment. But upon the facts as they now appear I am inclined to think it was not then a claim of his upon the French government to which Gracie and his creditors were primarily entitled to the exclusion of the general creditors of the insolvent insurance company. By the abandonment, even without the prosecution of his claim to a judgment, the underwriters became entitled to the spes recuperandi of the property insured, so far as it was covered by the policy. And I am not aware of any principle that would prevent the underwriters from selling their interest in the subject abandoned and appropriating the proceeds thereof to the payment of any of their debts, although the insurance money due upon the policy had not become due, or had not been paid. In the case of Mellon v. Bucks, (17 Mart. Rep. 371,) the supreme court of Louisiana decided that after an abandonment and before acceptance thereof, the title of the property abandoned was so far out of the assured that he could not maintain an action in his own name to recover for an injury to the same. There does indeed appear to be a natural equity that the assured should be entitled to a preference in payment, in case of insolvency, out of the proceeds of the subject abandoned; but it may be doubtful whether an equitable lien of that kind can be retained consistently with commercial usage, and the absolute control which it is necessary the underwriters should have over this species of property to save themselves from an absolute loss. Again; if such an equitable lien can be enforced in favor of the assured so long as the proceeds of the spes recuperandi can be traced and identified, it does not follow that the balance due on Grade’s judgment against the insurance company was a claim held by him against the French government at the time of this assignment, within the intent and meaning of his covenant.

I have no doubt upon the question that the covenant of Gracie to pay the creditors out of the monies which should be received by him or his representatives on account of his French claims, was an equitable mortgage or specific appropriation of that fund for the payment of the creditors who came in under the assignment, so as to entitle them to a preference over other creditors in relation to that fund so far as the proceeds thereof can be traced and identified. In the present case there is no difficulty on that subject. Had the fund come into the hands of Gracie in his lifetime, this court might have restrained him from paying it out to general creditors in violation of his covenant to apply it to this particular purpose; and as Gracie himself could not have preferred one of this class of special creditors to another, if the fund had come to his hands in his lifetime, it is now a special fund in the hands of his executor, who is only entitled to retain to the extent of his share after payment of his commissions and expenses as to this particular fund. A written agreement or order to pay a debt out of a particular fund, is an equitable mortgage or assignment of the fund pro tanto, and entitles the creditor to claim a preference in payment out of that fund over the general creditors of the mortgagor, so far as the fund remains in such a situation that it can be traced and identified. (Fruhling v. Schroder, 2 Scott’s Rep. 135. Clark v. Mauran, 3 Paige’s Rep. 373. Bradley v. Root, 5 Idem, 632.)

Although the defendant N. Rogers was not entitled to retain for his whole debt out of this special fund, in his character of executor, he was clearly entitled to his proportionate share of that fund after deducting his commissions and expenses. The vice chancellor’s order was, therefore, wrong in compelling him to bring the whole of that fund into court to abide the litigation between him and the other claimants of the residue thereof. Even if the English creditors are entitled to come in and share with the other creditors under the assignment, a very large sum will still belong to N. Rogers, in any event, which is primarily chargeable upon the proceeds of these certificates. And as it appeared from the complainant’s own showing that N. Rogers’ property was embarrassed with debts, it was unreasonable thus to deprive him of the power of paying off those debts with that part of the fund in his hands which clearly belonged to him.

Whatever small sums N. Rogers has received from other sources than the French claims, he has a right to retain towards the residue of his debt; or he must account for the same to other persons than the complainants in this suit, if those who executed the assignment have released the residue of their debts. His proportionate share of this particular fund cannot, therefore, be diminished by the small sums which he has thus received. This part of the order first appealed from must, therefore, be so modified as to permit the clerk; upon the receipt of the money on the certificate, to pay him his commission upon the whole amount receivable oil such certificates, and also to pay him such portion of the residue as his debt of $42,464 bears to $255,905, the whole amount due to the creditors under the assignment including the claims of the English creditors. And as it will be more beneficial for all parties that the money now due upon the certificates should be drawing seven per cent in his hands, than a much less sum under an investment by the court, his whole share of these certificates is .to be paid to him immediately out of the fund now payable; he giving his receipt therefor to the clerk, to be accounted for in the final settlement and. distribution of the fund among the creditors, with seven per cent’ interest, according to their rights as the same may be hereafter established. As to the residue of the fund, which belongs to the other creditors under the assignment or is in dispute with the English creditors, it is proper that it should - be brought into court to abide the event of the suit. It is in the hands of the executor in the character of a trustee; and as he has no right to use it for his own private purposes, it is almost a matter of course to order a fund thus situated to be brought into court and invested pending a suit for the distribution thereof. The part of the order which directs him to bring any other funds into court except those arising out of the certificates, or as compels him to submit to an examination before a master in relation to any other matters than as to this particular fund received by him in certificates must be reversed and annulled.

There is no sufficient cause shewn for taking out of his hands the general trust committed to him, as surviving executor of A. Grade, on account of his alleged embarrassments" in connection with his son’s misfortunes in trade, as the affidavits clearly establish the fact that he has a very large estate over and above all debts and responsibilities. And the court will not, without evidence, presume that a gentleman who has sustained an unblemished character till he has arrived at the age of eighty, will, without any conceivable motive, destroy that reputation by defrauding those with whose property he has been entrusted as executor. Whatever may be his character for honesty and integrity, however, upon a bill for the settlement of his accounts as executor properly filed, by a person having a right to a portion of the fund, if there is a clear balance in his hands beyond what he has a right to retain he may be directed to pay such balance into court, and this without reference to the value of his own property. But the mere fact that the executor is an octogenarian, if he is in the full possession of his faculties, is not a sufficient reason for depriving him of the possession of that part of the estate of his testator upon which he has probable grounds of claim. The injunction in this case should therefore be dissolved, except so far as relates to the receipt of the money on the certificates, otherwise than through the clerk. The order of the vice .chancellor last appealed from must be reversed to that extent; and the costs on that appeal, as well as his costs in the court below on the motion to dissolve, he must be permitted to retain out of the general funds in his hands not arising out of the French claims. There can be no objection to permitting him to receive and retain the balance due on the judgment against the insurance company. Upon the case as it now appears, either the complainants have no interest in that fund, or he has also an interest in it and has a preference by reason of his right of retainer. Or if, upon a new state of facts, the court should come to the conclusion that it was a part of the fund specifically pledged by the assignment, his property is still ample to secure to the other creditors their shares thereof. In case it should be adjudged to belong to the English creditors exclusively, his increased share of the special fund which is to be brought into court will be an ample security to indemnify them against eventual loss.

This decision is to be without prejudice to the rights of the parties as tq any of their equitable claims as against each other, either as to principal or interest, in the final settlement of the account; so that the executor may be charged with interest, as may be just, upon any monies in his hands from any source and which he has appropriated to his own purposes, if it shall in the end be found he was not entitled to such monies. Neither party is to have any costs on the first appeal, unless the appellant finally succeeds in his claim to retain for the whole amount of his debt out of the fund arising from the French claims. In that case he is to have the costs of the appeal and of resisting the application in the court below; to be paid out of that fund.

         Upon appeal to the court for the correction of errors, in December 1837, the decree in this cause was so far modified as to declare that the creditors who accepted of the assignment and the covenant of A. Crracie had no equitable lien upon the fund arising from the French claims ; and that tí. Rogers therefore had aright to retain for his whole debt as against other debts of the same rank.


source: Caselaw Access Project

author: The Chancellor

license: Public Domain

text:
    Clark vs. Bundy.
    1837. April 5,
    The coiirt, Upon a special application, is authorized to gránt a commission td examine witnesses, although it is a case in which the commission might have been issued by the register or clerk, under the provisionsof the statute and the 69th rule of the court.
    But where application is made to the court unnecessarily, within the twenty days allowed by the rule for applying- to the register or clerk, the party making such application will not be allowed oil taxation for the extra costs of applying to the court.
    The complainant, upofl due notice of the application',moved for a commission to examine witnesses residing out of the state. The motion was resisted upon the ground that the time limited by the 69th rule of the cóurt for applying to the register had not expired, and that the court had' no authority to grant a commission in' a case in which it might be issued by the register or clerk under the provisions of the statute.

      D. S. Dickenson, for the complainant.

      J. Rhoades, for the defendant.
   The Chancellor

decided that the court had authority in all cases to grant an order for a commission, although in certain cases the commission might be issued by the register; or clerk, under the provisions of the statute and in conformity to the general rules of the court. But that where a special application to the court was made by a party,unnecessarily, within the twenty days allowed by the 69th rule for applying to the register or clerk, the extra expense of the applifcation to the court could not be allowed to such party on taxation.-

Order accordingly.


author: The Chancellor.

text:
    Boughton and others vs. Phillips.
    1837. April 18.
    The usual application for costs by the defendant, on a hill of discovery, after he has fully answered the bill, is not a hearing of the cause upon the merits within the moaning of the fee bill, but is a mere motion. The defendant therefore, upon taxation, is only entitled to' costs 4s upon a special motion, and not to costs as upon a hearing of the cause upon the merits.
    Íhis was an application for the retaxátion of the defendant’s costs upon a bill of discovery. After thé defendant’s answer had been perfected he applied to the court for the usual order, for the dissolution of the injunction and for the payment of his costs in the suit. And the taxing officer allowed to the defendant fifteen dollars for brief, solicitor’s and counsel fees upon the motion.

      D. Gardner, for the complainants,

      G, M. Davis, for the defendant
   The Chancellor.

The taxing officer has in this casé proceeded upon the erroneous supposition that the application for the payment of costs, on a bill of discovery, is a hearing of the cause. It is indeed a proceeding which puts an end to the suit. But the practice of the court in such cases is to dispose of the question of costs upon motion, and never to suffer the cause to be brought to a hearing, either upon bill and answer or upon pleadings and proofs. (Anon. Mosley’s Rep. 185. King v. Clark, 3 Paige’s Rep. 76.) The application for a dissolution of the injunction and for the costs of the defence, in the present case, was not in the nature of a hearing. And the defendant was therefore only entitled to charge for brief and solicitor’s and counsel fees as upon an ordinary special motion which is argued by counsel other than the solicitor. The aggregate of these, according to the settled practice, was but $5, instead of $15 which has been allowed by the taxing officer. The excess of $10 must therefore be deducted from the taxed bill. $ presume the vice chancellor who taxed the costs would not have allowed this larger sum, if the distinction between this case and the ordinary case of a dismissal of a bill upon a hearing upon bill and answer had been distinctly brought to his notice, upon the taxation. But the form in which theobjection was made probably drew his attention from the true question upon which the claim to reduce the charge is' now urged. And as the real objection was not pointed out to the defendant’s solicitor, with a request to have the excessive allowance deducted, before this application was made, I shall not allow the complainants their costs on this motion. The balance of the taxed costs, after deducting the' $10, must be paid within twenty days after the entry of theorder on this application.


text:
    Smith vs. Adams.
    1837. April 18.
    Where a spring is supplied by a hidden stream passing through the earth, the owner of the land above where the water of the spring issues from the earth has no right to divert such water, by an excavation or artificial works upon his own land, to the injury of the land owners below, who are supplied by the waters of such spring in their natural course or by prescriptive use.
    But to entitle a party to come into the court of chancery for relief, by injunction, against the diversion of water to his injury, the amount of injury which he would sustain by a permanent diversion of the water must exceed $100. And where a bill was filed for a very trifling injury of that kind, it was dismissed with costs.
    Where a land owner and those under whom he claims have diverted a part of the water of a spring from its natural course, for the use of their land, by means of an artificial conduit, and have continued to enjoy the water in that way for twenty years without interruption, a grant of the right to divert the water to that extent for the use of the premises will be presumed.
    This was an appeal from a decree of the vice chancellor of the second circuit. The complainant was the owner of a ten acre lot in the county of Dutchess, upon which there was a cloth dressing establishment and two or three small houses. He was also the owner of another lot of one acre, called the spring lot, adjoining the lands of the defendant, and separated from the ten acre lot by the Dutchess turnpike. Upon the spring lot, and only a few feet below the defendant’s line, there issued out of the slate rock from the direction of the defendant’s land a perennial spring; the waters of which, when flowing in their natural channel, ran across the spring lot and thence through the defendant’s lands situated lower down, into a creek which ran through the ten acre lot, at a point below the complainant’s ten acre lot. In 1804, the owner of the two lots now belonging to the complainant laid an aqueduct of logs, of one and a quarter inch bore, from the spring, across the turnpike, to the ten acre lot, for the purpose of carrying water to a distillery which was then in operation there. By this aqueduct the greatest portion of the water of the spring was diverted from its natural course over the defendant’s lands below the spring lot, and was discharged upon the ten acre lot. This change of the natural course of the water had continued, by means of the aqueduct, and the waters thus diverted had been used for different purposes upon the ten acre lot, down to the time of filing of the complainant’s bill, in 1831. The whole water thus diverted was seldom actually used by the complainant and those under whom he claimed, but a very considerable portion thereof had been suffered to run to waste. The defendant, and his father from whom he derived title to his lands above and below the spring, had for more than thirty years been in the habit of resorting to the spring and taking water therefrom for their cattle and for domestic purposes. In 1825, the defendant laid an aqueduct of logs from the spring ‘to his house, and thereby conveyed a small portion of the water in that direction for the use of his family, dec.; and he continued to use the water in that manner without objection or molestation for about five years. In 1830, for some cause not explained, that part of the defendant’s aqueduct which was continued for a short distance in the soil of the complainant’s lot, to reach the spring, was torn up and destroyed by the complainant’s direction. The defendant being thus deprived of the power of using a portion of the water in this way, dug down upon his own land, a short distance above the spring, until he struck the subteranean stream. And from this point he laid a new aqueduct of logs to his house, from which logs the water was discharged through a quill of half an inch diameter.
    After the defendant’s aqueduct was completed, the complainant filed his bill in this cause for a perpetual injunction to restrain the defendant from diverting the stream of water which supplied the' spring, or from interfering in any mam ner with the water of the spring or the complainant’s enjoyment thereof. The defendant denied the complainat’s prescriptive right to divert the water of the spring from its natural channel; apd claimed the right to use a portion of the water for domestic purposes in the manner he was then using it by means of his new aqueduct. He also insisted that sufficient of the water was at all times left for the supply of the complainant’s aqueduct of one and a quarter inch bore at the spring; and that if the complainant had not sufficient water for all useful purposes, it was because he suffered his aqueduct to get out of repair, and permitted the water which was received into it at the spring to run to waste. Many witnesses were examined by each party as to the manner in which the waters of the spring had been used by the parties and those under whom they had derived their titles, for the last twenty-five years before the filing of their bill, and also upon the question of fact whether the water used by the defendant and his family, by means of his aqueduct, prevented the accustomed quantity from entering the complainant’s logs at the spring.
    The vice chancellor, upon the hearing before him, decided that the complainant had established a prescriptive right to divert so much of the water of the spring as would pass through an aqueduct of one and a quarter inch diameter, and to use the same at his discretion ; and to have the whole of the residue of the waters to pass over his spring lot in their natural course. He therefore decreed accordingly, and granted a perpetual injunction to restrain the defendant from diverting any portion of the waters which supplied the spring, from their natural channel, by any aqueduct or water course whatever. He also ordered the defendant to pay the costs of the suit From this decree the defendant, appealed to the chancellor.

      J. Hooker & R. Wilkinson, for the appellant.
    The water, the right to the use of which is the point in controversy, having its original source on the defendant’s land, and after flowing a short distance on complainant’s land again, as a small rivulet or brook, flows in its natural course upon defendant’s land; and the defendant and those under whom he claims have had from time immemorial, and he still has the natural and legal right to its reasonable use and enjoyment. The authorities cited by Chancellor Kent and by Angel, (3 Kent’s Com. 353, and Angel on Wat. Co. 35, 42,) establish the following principles :—That eyery proprietor of land through which water passes has naturally an equal right to its use and enjoyment, without unnecessary dimunition, for domestic, manufacturing and agricultural purposes. 2. He must so use and apply it as to work no material injury to his neighbor below him, who has an equal right to its subsequent use. 3. Streams (and springs) of water are intended for the use and comfort of man, and it would be unreasonable and contrary to the universal sense of mankind to debar a proprietor from the application of the water to domestic, agricultural and manufacturing purposes. 4. Some injury may inevitably happen in this use, by consumption, evaporation, &c. but a right of action would not necessarily arise from it, but would depend on the nature and extent of the injury-, and the manner of using the water. 5. All that the law requires is that he should use the water in a reasonable manner, and so as not to destroy, or render useless, or materially diminish or affect the like application of the water by the proprietors below.
    The use of the water by this defendant comes within all these principles. It has been reasonable in quantity; it has been applied only to domestic purposes, which are legitimate and proper objects of its use ; it has been taken in a usual and customary manner, recognized as such by the usages of the country, and of civilized society; it has not been diminished in quantity beyond the actual and necesary wants of the defendant for legitimate purposes. The complainant, and those under whom he claims, have not acquired a right to the waters of this spring or stream, by 20 years exclusive and adverse enjoyment, to the extent and in the mode and manner now claimed; which is necessary to create a presumption of a grant of the right to appropriate the whole, or to the extent claimed, or to divert the water from its natural course to the injury of another. (3 Kent's Com. 355, 6.) It requires 20 years exclusive enjoyment of water in a particular manner, to raise a presumption of a grant to use it in that manner. The use must be adverse. The general and established doctrine is, that an exclusive enjoyment of water in any particular way for 20 years without interruption, becomes an adverse enjoyment sufficient to raise a presumption of title. The presumption may be repelled by circumstances. This right is confined to the extent and mode of enjoyment. All that the law requires is that the mode of using it should not be materially varied to the prejudice of other owners. He cannot materially vary the enjoyment to the prejudice of his neighbors. The use of the water by complainant, or those under whom he claims, does not give him the protection of any of these principles. The defendant has a right to a reasonable participation in the waters of the spring itself, which is as much upon his own land as upon the land of the complainant. He has a natural right to its reasonable enjoyment, on the principles above laid down; it being upon his own land, no matter whether below or above the surface. He has a prescriptive right to the use of it to the extent and in the manner he has used it; that is, in common with the owners of the spring lot, and for domestic purposes, by reason of his and those under whom he claims, having had the undisturbed and unquestioned enjoyment of it, to that extent and for those purposes, for more than 20 years previous to 1830, and from time immemorial.

      H. Swift, for the respondent.
    It is an invariable and Universal rule of the court of chancery to found its decrees upon some matters put in issue ; (8 John. Rep. 559) and counsel have a right to presume that testimony taken to points not in issue will be disregarded. (2 John. Ch. Rep. 355, per Kent, Ch.) There is no pretension set up in the answer, that the defendant or those under whom he claims* ever had possession of, or claimed any title to, the spring lot; and the evidence establishes a disclaimer by him and them of any such claim or title. The complainant has established a clear paper title to the spring lot and to the ten-acre lot. He and those from whom he derives title have had the uninterrupted possession as owners of both lots, accompanying that title, for the last thirty-five years. It is admitted by the answer that the spring has from time im-» memorial been upon the south part of the spring lot. As much of the waters of the spring as could pass through an aqueduct of an inch and a quarter diameter has been tafeéis from its natural course, and used and appropriated by the complainant and by those under whom he claims, for about twenty-nine years last past; except when unlawfully interrupted by the defendant, in 1825 and 1830. And the complainant and those under whom he claims have used and appropriated the waters of.the spring with the full knowledge of the defendant and those under whom he claims,The defendant and those under whom he claims lived near, to and in sight of the spring, and occupied personally the land over which the defendant, alleges the natural course of the water was, and from which the water was taken away. This appropriation and use are presumptive evidence of right in the complainant to the waters of the spring, to the extent'of that appropriation and use, and give to him an undoubted title to protection from interruption in the enjoyment of that right. Any incorporeal right may be acquired by an uninterrupted enjoyment of 20 years, (2 Saunders’ Rep. 175, note.) The same doctrine is recognized by the counsel of both parties and by the court in Platt v. Johnston & Root, (15 John. Rep. 213,) and also in Merritt v. Brinckerhoof & Van Waggoner, (17 John; Rep. 306.) Every proprietor has a right to the natural flow of water without dimunition or alteration# unless some other person hás acquired a right to a particular use of it by 20 years exclusive enjoyment of the water in any particular manner which affords a conclusive presumption of right in the party so enjoying it derived from grant or. from act of Parliament. (Bealy v. Shaw, 6 East’s Rep. 208.) An uninterrupted enjoyment for 20 years of a spring of water in a particular manner, by the owner of the close in which it first issued above ground, affords a conclusive presumption of right in the party so enjoying it, (1 Camp. Rep. 463,) The defendant has made a permanent diversion of the waters of the spring, entirely from the land of the complainant, as far as they can be diverted by an aqueduct of the size and capacity of the defendant’s, and the complainant will be greatly and permanently" injured unless the decree of the Vice chancellor is sustained and the injunction made perpetual. And a perpetual injunction was the propef remedy of the complainant. (2 John. Ch. Rep. 162. 1 Paige’s Rep. 416.)
   The Chancellor.

I concur with the vice chancellor in the Conclusion that the evidence in this cause establishes a prescriptive right in the complainant to divert a portion of the waters of the Spring from them natural channel across the defendant’s land, in the manner and to the extent that the complainant and those under whom he claims have been in the habit of diverting the same since 1804. In the case of Belknap v. Tremble, (3 Paige’s Rep. 605,) I had occasion to advert to the rule of law on this subject, as correctly laid down by the learned commentator on American law, that the exclusive enjoyment of water in a particular way for twenty years or more, without interruption, is sufficient to raise a presumption of a grant to use it in that manner ; and that it is not necessary that the person claiming this prescriptive right should have used the waters exactly in same way for the whole twenty years, provided the mode of using it has not been materially'varied to the prejudice of the rights of others during that time. In the present case the water diverted from the spring to the ten acre lot was at one time used for the purposes of a distillery, at another for scouring and dressing cloth, and at other times for domestic purposes at the dwelling houses on the complainant’s ten acre lot. But the extent and manner of diverting the water of the spring for these several purposes, by means of an aqueduct of a particular size and construction at the spring, has at all times been substantially the same. The prescriptive right established, therefore, is not a right to divert water for any specific purpose, or to divert so much water as may be necessary for a particular object; but it is the right to divert the water in a particular manner and to a certain extent, from its accustomed channel, for the purpose of being used on the complainant’s ten acre lot.

Although the complainant’s right to the use of a portion of the water of the spring out of its natural channel is thus' established by prescription, the defendant’s counsel insists that the complainant has not been deprived of that right, in point of fact, by any act of their client; and that the deficiency of water at the factory, if any, was the result of the complainant’s own negligence in permitting the strainer at the head of his aqueduct to be obstructed by leaves, &c, or in suffering the aqueduct to be out of repair so that the usual supply of water which was received into the same at the spring ran to waste. Upon this point I think the weight of testimony is clearly with the defendant; and such appears to have been the opinion of the vice chancellor. He says, “ Perhaps, taken altogether, the weight of evidence supports the defendant’s allegation that the quantity of water in the complainant’s aqueduct is not diminished by the act of the defendant.” He therefore appears to have based his decree, for a perpetual injunction against the defendant and for costs, solely upon the technical right of the complainant to have all the residue of the water of the spring, which was not wanted for the supply of his aqueduct, flow in its natural channel for a few rods upon his spring lot. It is necessary then to examine wdiether the diverting of water found in the earth in the defendant’s own land, to the extent to which the water has been diverted by Adams in this case, entitles the complainant to the extraordinary remedy of a perpetual injunction under a decree of this court.

Upon principle I think the rights of the parties must be the same whether the spring issues from the earth upon the land of Adams, or after passing under ground through his land first makes its appearance upon the surface of the earth upon the lot of Smith, a little further down. The only difficulty presented in the latter case is to establish the fact that the water diverted is the same which in its natural course issued upon and flowed across the lands below. And such was the decision of Lord Ellenborough in the case of Balston v. Renstead, (1 Camp. 463.) Here the fact, is clearly established that the stream of water of half an, inch in diameter, which the defendant has diverted to his house by means of the aqueduct upon his own land* is a part of the larger stream which naturally issued from the earth upon the spring lot below. The law being well settled that the owner of the superior heritage has no right to detain or divert the water which passes through his land, to the injury of those who were accustomed to receive it upon their lands below, there can be no reasonable doubt of the complainant’s right to sustain an action, in the appropriate tribunal, for this abstraction of a part of the water of the spring, if he has in fact sustained any damage either directly or by the prospective diminution of the value of the spring lot. (See Arnold v. Foot, 12 Wendell, 330. Williams v. Moreland, 4 Dowl. & Ryl. Rep. 583. Mason v. Hill, 2 Nev. & Man. Rep. 747.)

But in this case I find no evidence from which it can fairly be inferred that the complainant has sustained any injury whatever on the ground that the water which flows through the defendant’s half inch quill is not suffered to run in its accustomed channel across the corner of the spring lot. The defendant might therefore say to the complainant, in the language of Latona to the Lycian clowns,

“ What rudeness water for my use denies,
“ Whose endless store the common world supplies ?
Nor light nor air did Heaven create for one,
“ Nor gentle streams.” '(Ovid’s Met. 4.)

Indeed it appears from the testimony, that the complainant had himself said he would have been willing to let the defendant have the water for the use of his family for six pence a year. And as he waited until the defendant had completed his aqueduct before he applied to this court for an injunction, I think he should have been left to his appropriate remedy by a suit in a justice’s court to recover the damages, if any, which he had sustained by the defendant’s proceedings. (See Coalter v. Hunter, 4 Rand. Rep. 58.)

Again; had the complainant succeeded in satisfying the court that he had sustained a few dollars damages by the wrongful act of the defendant, the bill should have been dismissed with costs on the ground that the claim was wholly beneath the dignity of this court. The legislature has wisely ordained that parties shall not be subjected to the expense of litigating questions of property here, where the object to be obtained by the complainant’s suit is of trifling importance when compared with the necessary expense of a chancery suit. And the statute is imperative, that this court shall dismiss every suit concerning property where the matter in dispute, exclusive of costs, does not exceed one hundred dollars. (2 R. S. 173, § 37.) In this case, as the defendant had not diverted the water to the injury of the complainant’s prescriptive right to carry a portion of it through his aqueduct to the ten acre lot, the only real ground of complaint at the time of filing the bill was the amount of injury which had been or might thereafter be done to the spring lot, in consequence of the diminution of the quantity of water which would naturally have flowed across the corner of the same after supplying the complainant’s aqueduct. And to make this a matter in dispute of the value of $100, the amount of the injury, present and prospective, must have amounted to that sum. In other words, the continued injury to the spring lot must have been equal to six or seven dollars annually, or the interest on $100, If the complainant in the present case has sustained any injury whatever, of which fact I must still be permitted to doubt, no one who reads the testimony can believe that the damage he has sustained or ever "can sustain, by this trifling diminution of the quantity of water flowing across the spring lot will amount to one quarter of that sum. It may be said, perhaps, that the right of the complainant to divert the water to the ten acre lot was disputed by the answer, and that such right was worth more than $100, The testimony shows, however, that the defendant had not interfered with that right, and that on the contrary he had endeavored to construct his own aqueduct in such a manner as to leave the complainant in the full enjoyment of that right. It is evident, therefore, that if the residue of the water had not been diverted from its accustomed channel across the spring lot, the bill would have been dismissed. That part of the case cannot then be brought in aid of the jurisdiction of the court as to another and distinct claim; nor can it excuse the complainant from paying the costs of a suit which should not have been commenced in this court.

The decree of the vice chancellor must be reversed with costs, and the complainant’s bill be dismissed with costs to be paid to the defendant. The decree of dismissal must, however, be without prejudice to any right the complainant now has or may hereafter have to sue the defendant, in the appropriate tribunal, for diverting the water from its natural course to where it issues from the earth on the spring lot. But the parties are not to be again permitted to litigate the question whether the defendant had, previous to the filing of the complainant’s bill, actually diverted the water which had been accustomed to flow through the aqueduct to the ten acre lot; as that question has been fully litigated here upon its merits, and the decision of the court is against the complainant thereon. But there being no doubt as to the prescriptive right claimed, if the defendant shall alter the manner of using the water by means of his aqueduct, so as to diminish the quantity of water which flowed to the ten acre lot at the time this suit was commenced, he will be responsible to the complainant for the injury thereby sustained.


text:
    Burrall and others vs. Leslie and others.
    1837. April 18.
    Where the same person has been appointed receiver in several different suits, upon creditor’s bills, before the chancellor and different vice chancellors, and there are conflicting claims between the parties in the different suits as to the distribution of the fund in the hands of the receiver, the jurisdiction to decide such conflicting claims, and to direct the distribution of the fund in the hands of the receiver, belongs primarily to the judge under whose authority such receiver was first appointed.
    $n such a case, the necessary costs to ascertain the priorities of the complainants in the different suits, and of the decretal order for the distribution of the fund, were ordered to be paid first by the receiver out of the fund in his hands.
    Where the complainant’s debt, and the costs of both parties, are directed to be paid out of a particular fund, which turns out to be insufficient to pay the whole, the amounts directed to be paid to each party must be paid rateably, if there is nothing in the decree to show that a preference in payment was intended to be given to either.
    The bill in this cause was filed before the chancellor by judgment creditors of J. & R. Leslie, to reach certain prop
      erty of the latter which had been assigned to the other defendants, Williams and M’Dougall; and a receiver was appointed to receive and hold the property in controversy pending the litigation. Seven other creditors’ bills were afterwards filed against the same defendants, some of which were before the chancellor and others before the vice chancellor of the seventh circuit; and the same person was appointed receiver in those suits. The first and fourth suits, which were commenced before the chancellor, were referred to the vice chancellor of the fourth circuit; who made decrees in favor of the complainants therein, respectively, for the payment of their judgments with interest and costs, and also for the payment of the costs of the defendants, Williams and M’Dougall, out of the fund. Similar decrees were made in the other suits, by the vice chancellor of the seventh circuit, except that no costs were allowed to the defendants in those suits. Upon an application to the chancellor, by the complainants in the fourth suit, a reference was ordered to ascertain the priorities in the several suits; and on the coming in of the report, (exceptions having been taken to the same and afterwards abandoned,) the case came before the chancellor upon the application of the complainants in this suit for further directions and for the distribution of the fund.

      M. T. Reynolds, for the complainants in first suit.

      J. Rhoades, for the complainants in 2d, 3d and 4th suits.
   The Chancellor.

The receiver in the suit first commenced was appointed by the chancellor, before the cause was referred; and as different decisions have been made by the vice chancellors in relation to costs, the direction as to the distribution of the fund appears necessarily to refer itself to this tribunal, where the receiver was appointed to take charge of the fund originally. The master’s report and the decrees settle the question as to interest on the several judgments. The master reports that the several decrees should be paid according to the times in which the bills were filed; and the decrees themselves declare that the complainants are entitled to be paid the amount of their judgments with interest thereon. In the first and fourth causes the decree directs payment of the complainants’ judgments and interest and costs, and also the costs of the defendants out of the fund. And as the decree gives no preference in the payment of the complainants’ debt and costs over the costs of the defendants, if the fund is not sufficient to pay both in full they must be paid rateably. The master’s bill on the reference directed by the chancellor was a necessaiy expense to obtain a distribution of the fund; and that bill, with the costs of the petition and order to obtain the reference, and the costs of the complainants’ solicitor on this application for further directions, should therefore be first paid out of the fund in the hands of the receiver. But no costs of the different parties in attending on the reference, or on the exceptions to the report which have been abandoned without any decision thereon, are to be paid out of the fund. The receiver must then pay the judgment, and interest of the complainants, in suit No. 1, and the costs of both parties, according to the decree of the vice chancellor in that snit; and if the fund is not sufficient to pay the whole, the amount of debt, interest and costs payable to each party according to the decree must be paid rateably. The judgments and interest and the complainants’ costs in the second and third suits must then be paid, according to priority as settled by the master; and then the judgment and interest and the costs of both parties in No, 4 rateably. If any thing remains, the same must.be applied to the payment of the principal, interest and costs decreed in the four remaining suits, according to priority. And the complainants, respectively, will be entitled to apply to the vice chancellor before whom their decrees were obtained, for such further directions as may be necessary to enable them to collect such parts of their decrees as remain unpaid, out of any future assets of their judgment debtors against whom such decrees were obtained. The principle of the English bankrupt laws as to the payment of interest cannot have any application to this case, as the several decrees direct the payment of interest in addition to the principal sums due on the judgments.


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    Anstice, administrator, &c. vs. Brown and others.
    1837. April 18.
    Where an attorney, who was employed to collect a partnership debt due to a firm the members of which were aliens, compromised the debt by taking lands therefor; but on account of the alienage of the creditors and without any directions from them took the conveyance in his' own name to enable him to sell the land and convert it into money, afid wrote to them informing them what he had done and promising to sell the land for them as soon as purchasers could be found, but died before any' sale of the land had been made; and his heirs after his death sold the land supposing it to be their own ; Held, that the proceeds of such sale in the hands of the heirs were personal property belonging to the copartnership firm, and that the personal representative of the last surviving partner was entitled to recover such proceeds as a part of the copartnership effects.
    Where land is taken in payment of a debt due to an alien, and is conveyed to a trustee upon a valid trust to sell the same and convert it into personal estate, without any unreasonable delay, for the benefit of the cestui que trust, a court of equity, upon the principles of equitable conversion, will consider the land as personal estate belonging to the alien, and transmissible to his personal representatives as such ; and if necessary will compel the trustee, who holds the legal estate, to sell the land and convert it into money.
    A conveyance of land to a citizen as a trustee upon an express trust to self the same as soon as practicable and to pay over the proceeds theteofto s ' creditor who is an alien, is a valid trust, and does not-subject the interest of the alien creditor in the proceeds of such sale to forfeiture < as the principle of public policy which prohibits an alien from holding lands, either in his qwn name or in the name of his trustee,' without the consent of the state does not apply to such a case.
    If an agent for the collection of a debt due to an alien, takes a conveyance of land in his own name in payment of such debt, without authority from his principal, and without any written declaration of trust, a court of equity will not permit a resulting trnst to be created in favor of the state by es-cheat ; but will decree the land to be sold and converted into money, foV the purpose of giving the alien the benefit thereof as personal estate.
    Where an heir or other person who is turned into a trustee by operation of law, contests the complainant’s claim to relief after he has full notice of his-equitable rights, and for his own exclusive benefit, he is not entitled to the costs of his defence.
    This was an appeal from the vice chancellor of thé fifth circuit. In 1801, J. Cock and J. P. Crowder of London had a copartnership demand of about $2000 against ¡S. & H. Johnson of New-York, which they sent with other demands to Brown & Burnett their agents at New York for collection; and they afterwards sent them a general power of attorney to transact all their business in this country. After various negotiations with the Johnsons, who had stopped payment, Brown & Burnett agreed to take from them four lots of land of 100 acres each in the Holland patent in Oneida county, together with their notes for a small balance, in satisfaction of the debt. But as Cock & Crowder were aliens and incapable of holding lands,- their agents concluded to take the conveyance in the name of Brown until the land could be sold and the proceeds thereof remitted to their principals. The Johnsons accordingly procured a deed of the four lots to be made to Brown, in November, 1803; which deed by mistake was recorded in the city of New York instead of the county of Oneida. Shortly afterwards Brown & Burnett wrote to Cock & Crowder that they had taken the conveyance of the 400 acres of land in the Holland Patent for them upon a settlement with the Johnsons. In this letter they also stated the reason why they had taken the deed in the name of Brown, and that they had advertised the land for sale and would sell it for them upon the first reasonable offer. Several other letters were afterwards written by them to Cock & Crowder stating that their lands remained unsold. And after the dissolution of the partnership of Brown & Burnett, which was previous to 1808, Brown, who undertook to close up the concerns of the firm, wrote several other letters to Cock & Crowder recognising their right to the land and promising to try to sell it for them; the last of which letters Was dated in July, 1809. Brown died about 1811, having sailed on a sea voyage and was supposed to have been shipwrecked and lost; leaving the defendants J. R. and A, Brown, then minors, his only children and heirs. The intercourse between the two countries being suspended by the war, Cock & Crowder did not hear of the death of Brown, and in 1819 they addressed a letter to him at New-York making inquiries as to the land; to which letter they received no answer, his family having in the meantimé removed to New-Jersey. Cock died soon after, and Crowder his surviving partner obtained no information respecting the land till about the time the deed to Brown was recorded in Oneida county, in 1828. The two children of Brown having become of age, and finding the deed to their father* supposed that he was the real owner of the land at the time of his death. They therefore employed an agent at Utica to sell the lands for them; who between Novem* her, 1823, and March, 1826, contracted to sell the several lots, except some small portions thereof which had been sold for taxes. And previous to the filing of the bill in this cause in the spring of 1829, the defendants J. R. and A. Brown had conveyed some parts of the premises to the purchasers and received a considerable portion of the purchase money, leaving another portion thereof due either upon bond and mortgage or upon the contracts.
    The bill in this cause was filed by Crowder as the surviving partner of the firm of Cock & Crowder, to reach the proceeds of the sales; and the several vendees from whom-a part of the purchase money was still due, together with the heirs of Brown, were made defendants. The purchasers put in an answer claiming protection as bona fide purchasers without notice of the complainant’s rights. The heirs at law of Brown denied all knowledge that the land was conveyed to their fffther for the benefit of Cock & Crowder. They also stated in their answer that Cock & Crowder were both aliens, incapable of holding real property. in this state; and they therefore insisted that there could, not have been any resulting trust in their favor on the conveyance of the land to Brown, although such conveyance might have been intended to be taken for their benefit. The complainant having died pending the suit, it was revived in the name of his personal representative, and was after-wards heard before the late vice chancellor upon pleadings and proofs. The fact of the trust being fully established, the vice' chancellor decided that the surviving partner of the firm to whom the debt originally belonged was entitled to the proceeds of the land, after paying taxes, agent’s fees- and expenses which the heirs had incurred; that such heirs were to account for the monies received by them, but without interest; that the heirs assign to the clerk of the court, for the benefit of the complainant, all the remaining securities for the unpaid purchase money, and that the other defendants, the purchasers, pay the amounts still due from them respectively, to the clerk for the use of the complainant ; that neither the complainant or the heirs of Brown recover costs as against each other; and that the complainant pay to the other defendants then’ costs to be taxed. A reference was also directed to a master to take and state the accounts between the parties accordingly, unless they should agree among themselves in relation thereto ■; and all further directions were reserved.
    From the whole of this decree, except the part which gave to the purchasers their costs against the complainant, the heirs of Brown appealed to the chancellor.

      D. Wager & C. A. Mann, for the appellants.
    The conveyance to John Rylan Brown would have vested in Cock & Crowder the beneficial interest in the lands by way of a resulting trust, had it not been for the disability of alienage. They being aliens, no trust could result in their favor, nor could any title vest in them by operation of law. And if they took any estate in the lands, it was an equitable estate possessing all the qualities of a legal estate; and if it was capable of being transmitted by descent, the same would, op their deaths, have descended to their respective heirs. But they being incapable of transmitting lands by descent, the same escheated. But even if the title vested in them and was transmissible to their heirs, the death of Cock, which was previous to a sale of any of the lands by the Browns, did not vest his interest or title in the lands in Crowder, as the surviving tenant in common. Neither did the sale of the lands by the Browns change the nature of the estate in equity; but the proceeds of the sale belong to the same class of representatives, and are governed by the same rules which are applicable to the lands. Therefore, on the death of Crowder, during the pendency of this suit, his interest escheated, he being incapable of transmitting the same by descent.
    Again, the court, from lapse of time in this cause,'will presume the trust to have been extinguished, if any ever existed.' The bill should also be dismissed for want of proper parties. The original consideration of the conveyance was a debt due Cock & Crowder, and all the parties interested are not made parties in this suit. It does not appear what particular share belonged to Cock or Crowder, At all events, if the defendants are liable in this action, the representatives of Cock should have been made parties,'

      J. A. Spencer, for the respondent.
    The heirs at law of John H, Brown stand in the situation of the ancestor, and .are now subject to the same remedies the ancestor would haye been had he survived, Brown the father and Browns the sons held the legal estate; Cock & Crowder held only an equitable interest. The trustee is liable to account to his cestuis que trust, though an alien, as he would be to a citizen. The same remedies exist in favor of aliens as of citizens in respect to personal and equitable estates. There can be no escheat in this case, because the trustee is capable of holding and transmitting the fee, The cestui que trust of this resulting trust had no legal but only an equitable interest, and is not within the statute of uses and trusts. The original fund was partnership property. The land purchased with this fund was conveyed to Brown without the .authority or knowledge of Cock & Crowder. They were never tenants in common of the land, but were joint tenants of the fund and of the equity. Any appropriation of the fund by Brown without their knowledge cannot change the rights of Cock & Crowder in equity. The conversion of fhc land into money and choses in action by the defendants imparts or continues to it the same character of the original fund, and ¡therefore survives to Crowder. This court has power to continue the fund as money, it began and ended as such, It would be strange doctrine indeed to allow the agent of an alien, without authority, to invest the money of his principal in land conveyed to himself, ,and thus discharge himself from accountability because of such alienage. The statute of limitations is no bar, because six years had not run after the money was received before the bill was filed; because it is a trust affording no remedy at law, therefore the legal bar has no application; because the statute is neither plead nor insisted upon in the answer, and therefore not available to the defendant if it existed,
   The Chancellor.

The proofs in the case conclusively establish the fact that Brown and his partner were employed to collect the partnership debt due to Cock & Crowder, and that a conveyance of these four lots was taken for their benefit, by Brown and his then partner, in part payment of that debt. It is also evident from the letter of February 1804, that the conveyance was taken in the name of Brown without any previous instructions or authority for that purpose from Cock & Crowder. It was not, therefore, strictly speaking, a resulting trust, which would in equity result to the state and not to the aliens, according to the decision of this court in Leggett v. Dubois, (5 Paige’s Rep. 114.) The act being unauthorized, this court would not suffer the agent to keep the property under such circumstances, or permit it to be forfeited by raising a resulting trust in equity in favor of the state. The proper course in such a case, as the aliens could not take and hold the land itself as real estate, would be to decree a sale thereof, and compel the agent who held the legal estate to execute a conveyance to the purchaser; and thus give to the beneficial owners the proceeds of such sale as personal estate. This case, however, does not depend upon the operation of a resulting trust, or even upon the equitable power of this court to convert an agent, who has exceeded his authority, into a trustee by implication. There can be no resulting trust where there is an axpress trust declared and evidenced by the written declaration of the trustee, And the several letters of Brown & Burnett, and of Brown alone, subsequent to the date of the deed from Johnson, when taken together contain a perfect declaration on the part of Brown that he held the legal title in trust to sell the lands and convert them into personalty, as soon as practicable, for the use of the firm of Cock & Crowder. Upon the principle of equitable conversion, therefore, these lands must in equity be considered as personal property belonging to the partnership, the proceeds of which, when sold, could be taken and held by the surviving partner, although he was an alien. A devise or conveyance of lands to a citizen in trust to sell the same as soon as practicable and pay over the proceeds of the sale to an alien is not invalid, as the principle of public policy which prohibits an alien from holding lands here without the consent of the state does not apply to such a case. (Craig v. Leslie, 3 Wheat. Rep. 563.) Whether the rule of law on this subject has been changed in this state, as to future devises, by the provision of the revised statutes declaring the devise of any interest in real property to an alien void, is a question not necessary to be now considered, as it has no application to this case. This trust was not created by devise and it had descended upon the heirs of Brown, and had been executed by a sale of the land, before the revised statutes went into operation. This case, as respects the proceeds of the land belonging to the aliens, differs from that of Leggett v. Dubois, as there was no intention of the parties in this case to retain the property as real estate in evasion of the law, but merely to secure the debt and to convert the land into money. In the case referred to, the object was that the trustee should take and hold the real estate permanently for the benefit of Sellon the alien, the power to sell and pay off incumbrances being only to be exercised in case he did nof pay them out of the rents, &c. The vice chancellor was clearly right in the conclusion at which he arrived in the present case, that the heirs of Brown took the legal estate in the four Holland patent lots, charged with the trust to sell the land for the benefit of the firm of Cock & Crowder. Having executed that part of the trust, although without any knowledge of its existence, they held the proceeds of the sale for the benefit of the surviving partner, as personal property belonging to the firm, at the time of filing of this bill 5 and it now belongs to the complainant as his personal representative, to be disposed of by him according to equity in closing up the partnership concerns.

The defendants have no valid defence on account of lapse of time. There being an express trust to sell the lands and pay over the proceeds, there was no act of limitation which was applicable to the case before the sales were actually made. The bill was filed within twenty years after the last letter of Brown admitting the trust, and within six years after the first sale in 1823. And the heirs having resisted the claim in opposition to the written evidence of their father’s letters, showing the trust beyond all possibility of doubt, and having endeavored to defeat the complainant upon a mere technical objection on the ground of alienage, contrary to the obvious justice of the case, I think the vice chancellor was right in not allowing them costs.

The decree appealed from is therefore affirmed with costs. The master must, in taking the account, allow to the complainant interest from the date of the appeal, upon the balance in the hands of the appellants, as damages awarded to him by this court for the injury and delay caused by the appeal.


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    C. Gardner, administratrix, &c. vs. E. Gardner and others.
    1837. April 18.
    Where a testator, who held several mortgages against his brother, bequeathed one half of his residuary personal estate to his wife, and the other half to the children of his brother, to be paid to them at twenty-one; and by his will directed his executors not to foreclose' the mortgages until after his brother’s death, as it was the testator’s Wish that until that time the interest of the mortgages should be used and applied- to the support of the-brother and such of his children as should not have received their shares of the personal estate bequeathed to them; Held, that the brother and his children were entitled to the whole of the interest on the mortgages, including the interest in arrear at the death of the testator; and that upon the death of the brother the principal of the mortgages only could be collected for the benefit of the testator’s residuary legatees.
    If an administratrix brings an appeal for her own benefit, and fails therein,she will be personally charged with the costs of the appeal.
    This was an appeal from a decree of the vice chancellor of the first circuit. The bill was filed to foreclose several mortgages given by Charles Gardner to J. Gardner; tod the only question in controversy between the parties was as to the interest upon the mortgages, which accrued previous to the death of Charles Gardner, the mortgagor. This question depended upon the construction of the will of J.Gardner, made in July, 1825. By this will he bequeathed to his wife, the complainant, his household furniture and one' half of his residuary personal estate; and the other half of such residuary personal estate he bequeathed to the children of his brother Charles, to be paid to them respectively at the age of twenty one, or sooner if their necessities should require it. The will then Concluded as follows: “ And I do hereby order and direct my executors hereinafter named, not to foreclose any or either of the several mortgages which I hold on the estate of my said brother Charles Gardner until after his decease ; as it is my wish that until that time the interest thereof shall be used and applied to the support of my said brother and such of his children herein before named as shall not at the time have' received their share of my personal estate herein before bequeathed to them.” James Gardner died in July, 1829, without having demanded or received any interest upon the mortgages after the making of his will; and Charles Gardner died in June, 1832. The vice chancellor decided and decreed that by the will of James Gardner,- his brother Charles became entitled to the interest in arrear upon the mortgages at the death of James, and also to the interest which accrued afterwards during the life of Charles ; and that the principal monies and the interest which had accrued subsequent to the death of Charles was all that was due and Collectable upon the mortgages. From this decree the complainant appealed.

      W. N. Dyckman, for the appellant.

      Robert Bogardus, for the respondents.
   The Chancellor.

The vice chancellor is clearly right in the construction which he has given the will of .Tames Gardner. If the court does not resort to some technical construction for the mere purpose of defeating the manifest intention of the testator in this case, there cannot be a doubt that Charles Gardner was entitled to the whole interest which would otherwise have been payable on the mortgages down to the time of his death, for his own support, and to assist him'in bringing up his minor children. The previous bequests, in general terms, of one half of all his personal estate to his widow and the other half to the children of his brother, must be controlled by this subsequent clause, so as to give to each one half of the principal sums due on these bonds and mortgages, to be paid at the death of Charles. And as the complainant has brought this appeal for her own benefit, after a decision against her which ought to have been satisfactory to her counsel, she has no claim to be excused from the payment of the costs of the appeal, which costs must be charged upon her personally.

The decree of the vice chancellor is therefore affirmed, with costs.