text:
    F. W. and E. C. Aikin, executors, &c. vs. Martin.
    Where a deed or instrument which a party wishes to prove, as an exhibit, is in the hands of a third person, who will not produce it voluntarily for that purpose, the proper course is to compel him to produco it, by a subpoena duces tecum.

    Where a deed, or other instrument, is proved, or is made an exhibit, before an examiner, upon the taking of the testimony in a cause, it is the duty of such examiner to retain it, and to return it to the register’s or clerk’s office, with the testimony ; unless the parties to the suit consent that he may take a copy of the exhibit, and return that with the testimony, instead of the original.
    A witness, who is required, by a subpoena duces tecum, to attend before an examiner and produce a paper in his possession, as evidence in a cause, is not bound to produce such paper until he has been sworn as a witness; to enable him to state, upon oath, the reasons, if any there are, why he should not be compelled to produce the paper in evidence.
    feut if the reasons thus stated by the witness, upon his oath, are decided-by the examiner to be insufficient, the witness must produce the paper in evidence; or the court will compel him to attend agaimbefore the examiner, and produce the paper, and pay the costs occasioned by his former refusal, if the decision of the examiner is found to have been correct.
    Where a deed is in the possession of a third parson, who produces it under a subpoena duees tecum, without objection, the party against whom it is produced, has no right to insist that the person producing such deed shall be sworn as a witness for the party in whose favor the deed is produced as evidence, in order to give the adverse party a right to cross-examine, although such witness may be interested in his favor.

      A motion was made in this cause, and in four other suits, brought by the same complainants, against different defendants, for an order that H. Y. D. Yan Epps appear before the examiner, atld produce a certain agreement, in his possession, as evidence on the part of the defendants in the several suits respectively. By the affidavits, and the certificate of the examiner, it appeared that Yan Epps, although not a party to either of the suits, was interested in favor of the complainants, in the subject matter of litigation in all of them, and that the agreement in question was material to the defences set up by the defendants respectively ; that a subpoena duces tecum was served on him, to appear before the examiner, as a witness on the part of the several defendants, and to bring with him the agreement and produce it before the examiner; that at the time of the service of the subpoena, and at the return day thereof, the agreement was not in his possession; nor under his control; but that, after he had attended once of twice before the examiner, he was requested by the counsel for the defendants to procure the agreement from the receiver, who had been appointed in a creditor’s suit against Yan Epps; that he subsequently procured the agreement from the receiver, promising to return it again to him; and that he then attended before the examiner with the agreement in his possession. Oft being inquired of by the defendants’ counsel, whether he had the agreement with him, Yan Epps stated that he had, and at the request of such counsel he delivered it to him for his inspection; and offeted to be sworn in relation to the agreement. But he refused to part with the same, or to deliver it to the examiner as an exhibit; the counsel for the complainants insisting that the agreement could not be received and marked as an exhibit, by the examiner, without proof of its execution. The complainants’ counsel also insisted that Van Epps was not bound to produce the agreement as evidence, under the subpoena duces tecum, until he had been sworn as a witness. The counsel for the defendants, however, declined having him sworn as a witness 5 insisting that he was bound to deliver the agreement to the examiner, to be marked as an exhibit, and to be retained by such examiner.

      M. T. Reynolds, for the defendants.
    S. Stevens, for Van Epps, the witness.
   The Chancellor.

From the papers before me oh this application, I am satisfied that Yan Epps never consented to part with the possession of the agreement, for the purpose of allowing it to be retained, as an exhibit, either by the examiner or by the counsel of the defendants. And I think it is. also fairly inferri-ble, from the affidavits, that the defendants’ counsel, at the time Yan Epps was called upon to produce this agreement, and to deliver it to the examiner as evidence, was not prepared to prove its due execution; so as to make if evidence for any purpose.

Where a deed or instrument which a party wishes to prove as an exhibit, is in the hands of a third person, who is unwilling to produce the same, the proper course is to compel him to produce it, under a subpoena duces tecum; and to have the witnesses in attendance to prove the exhibit, or to be examined in relation thereto, when it is thus produced. For until the deed or instrument is duly proved, or is referred to in the examination of some witness in the cause, as an exhibit, neither the parties nor the examiner has a right to deprive the person producing such deed, or instrument, of the custody or possession thereof. Indeed, by the practice of the court of chancery in England, the exhibits are always left in the possession of the parties producing them, until the hearing of the cause. (Davers v. Davers, 2 P. Wms. 410. Hodsen v. Warington, 3 Id. 34. Wiley v. Pistor, 7 Ves. 411. 2 Dan. Ch. Pr. 446.)

Here, however, the practice is different; and when a deed or other instrument is proved, or made an exhibit before the examiner, he is bound to retain it, and to return it with the original depositions, to the register or clerk; unless the parties consent that he may take a copy of the exhibit, and return the same instead of the original. (See Rule 87.)

Where a deed or instrument is in the hands of a third person, who produces it without objection, under a subpoena duces te-cum, the party against whom it is produced has no right to insist that the person thus producing it shall be sworn as a witness; so as to give such party the benefit of a cross-examination, although such witness is interested in his favor. And some of the common law courts in England have recently gone so far as to compel the person, having the custody of the deed or instrument to produce it, without being sworn at all. (1 Ad. & Ellis' Rep. 48. 2 Cromp. & Mees. 477. 2 Dow. Ch. Pr. 364.) I think, however, in this court, it is the privilege of the person who is thus subpoenaed to produce a paper, to be sworn in relation to the production of the paper; to enable him to state upon oath the reasons why he should not be compelled to produce it. For it may be that he holds the paper in the character of attorney for one of the parties in the suit, or that the production of the paper might tend to criminate himself, or might furnish evidence against him to subject him to a penalty, or a forfeiture. After the witness has been sworn, and has stated upon oath his reasons why he ought not to be required to produce the paper, if the examiner decides that the reasons are insufficient, the witness must produce the paper; or the court, upon an application for that purpose, will compel him to attend again before the examiner and produce the paper, and pay the costs of his former refusal, if it turns out that the decision of the examiner wa's right. (2 Swanst. Rep. 213. 1 Russ. & Myl. Rep. 358. 2 Dan. Ch. Pr. 558.)

In this Case, however, Yan Epps obtained possession of the agreement in question, long after the return day of the subpoena duces tecum, under a promise which he had made to the counsel for the defendants, and under an understanding that he was to be paid for his services in procuring it. And as Yan Epps was not wanted as a witness for the defendants^ the process of the court, which had required him to attend at a previous day, and bring this paper with him, could not be used to compel him to fulfil the subsequent promise, to obtain the agreement from the receiver, that it might be used as evidence in the suits. Nor could he, under ?uch circumstances, be required to deliver the agreement to the examiner; to be exhibited to witnesses and proved at a future time! He is not, therefore, in contempt, and the motion of the defendants must be denied with f 10 costs, to be paid by them jointly, under an order to be entered in all of the suits.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Ensign vs. Colburn and Smith.
    Where a mortgagor who had been decreed a bankrupt, and all whose interest in the mortgaged premises had become vested in his assignee in bankruptcy, was proceeding to strip the mortgaged premises of the timber, which constituted the principal value thereof, Held, that the mortgagee was entitled to an injunction, to restrain his proceedings; although, by the terms of the mortgage, the mortgagor was authorized tb cut the timber for the purpose of having the proceeds thereof applied to the payment of the complainant’s debt.
    The court of chancery requires the exercise of good faith, in the performance of contracts ; and it will not allow mere,technical legal rights, to be enforced contrary to equity and good conscience. Nor will it permit the exercise of such rights to be ■ perverted'to the puiposes of fraud.
    This was an appeal, by the complainant, from an order of the vice chancellor of the fourth circuit, dissolving the injunction in this cause in part, as to Colburn and-Smith, two of the defendants.

      A. C. Hand, for the appellant.

      J. Rhoades, for the respondents.
   The Chancellor.

The vice chancellor was unquestionably right in supposing that the mortgagor, by the terms of the mortgage, bad an unrestricted right to cut timber from the premises, even beyond the usual amount which had been' manufactured at the three mills; provided he made payments in proportion, beyond the annual payments specified in the mortgage. He was also right in supposing that a mortgagee has no lien upon the timber which has been cut on the mortgaged premises, in good faith, by the mortgagor or his grantees.

This court, however, requires the exercise of good faith in the' performance of contracts; and will not allow mere technical legal rights to be enforced contrary to equity and good conscience, or permit the exercise of such technical legal rights to be perverted to the purposes of fraud. In this case, the respondents who applied to the vice chancellor to dissolve the injunction do not appear to have any legal right either to the mortgaged premises, or to the timber which has been cut thereon and which has not been sold. On the contrary, the bill shows that Colburn, the mortgagor, had been duly declared a bankrupt, so that whatever interest he had in the premises is vested in the assignee. His proceedings, therefore, in cutting and disposing of the timber and lumber, appear to be wholly unauthorized; and Smith, who is apparently acting as agent, does not appear to have any legal right to the land or the lumber. The bill, in substance, charges them with a fraudulent and unconscientious attempt to strip the mortgaged premises of the timber'thereon, which is the principal value of the premises, with the intention of defrauding the complainant out of his security, after the mortgagor had been decreed to be a bankrupt, and when he had no longer any hope of paying the mortgage debt, nor any interest: in the mortgaged premises.

What state of facts may be presented on the coming in of the answers of these respondents, cannot now be anticipated. But, as the case now stands upon the bill and the affidavits, the proceedings of the appellant appear to be so wholly unconscientious in relation to"the cutting of the timber heretofore cut upon the premises, as well as in proceeding further to diminish the value of the premises, that I think the injunction should have been retained, even as to the timber and lumber already cut: until the defendants, by their answer, show something to rebut the very strong conclusion, that their conduct, in relation to these premises, is-entirely unconscientious and fraudulent, in reference to the rights and interests of the complainant. Without intending, therefore, to question the rights of a mortgagor to cut timber upon mortgaged premises whenever he can do it without committing wasteland to appropriate the timber thus cut to his own use, provided it is not done with a fraudulent intent in reference to the mortgagee, I think the injunction in this case ought not to have been dissolved, even so far as the order appealed from dissolved it,

That order must, therefore, be reversed, and the costs of the appellant, as against these respondents, must abide the event of the suit.


text:
    Wambaugh vs. Gates and others.
    Where a testator devised one parcel of his real estate to his son P., charged with the payment of a legacy to his sister B., and devised his homestead to his son S., charged with the payment of legacies of $500 each, to the testator/s four youngest daughters; and gave a legacy to his son J., and devised his ■ Pennsylvania farm to the children of his son J., charged with the payment of a legacy to a granddaughter, and appointed his sons P. and S. his executors, who proved the' will and took out letters testamentary thereon; and S. conveyed the homestead firm to his brother F., who conveyed the same, together with the lands devised to him by his father, to D. and E.; and W„ a creditor of the testator, after 1832, commenced a suit against the executors, for the recovery of his debt, and obtained judgment therefor, the damages to be levied of the property of the testator in their hands to be administered, and the costs to be levied of the property of the defendants personally, if the estate of the testator in their hands was not sufficient ' for that purpose;

      Held, that the judgment of W. was not a lien upon the lands which had been conveyed to D. and E., previous to the recovery of the judgment against the executors.

      Held further, that if the debt, due from the testator to W., was an equitable lien upon the interest of the 4aughters in the laqds, as legatees whose legacies were charged thereon, W. could not reach that interest until he had exhausted his remedy against the personal estate, of the decedent, which came to the hands of the executors.
    Whether the debt, due from the testator to W., is an equitable lien upon the lands in the hands of D. and E., to the extent of the equitable claim of the legatees upon suGh lands for their unpaid legacies, in case the debt of W. cannot be obtained from the personal estate of the testator which came to the hands of his executors 1 Quare. *
    Where a judgment is recovered against executors, for a debt due from their testator, to be levied of the property which has come to their hands as executors, the ro-turn of an execution unsatisfied, which has been issued on such judgment, is not sudh an exhausting of the creditor’s remedy against the executors, in relation to the persorfal estate which has come to their hands, as will authorize the filing of a bill against legatees, whose legacies were charged on tire testator’s real estate, to obtain satisfaction of the debt for which such judgment was recovered.
    A creditor of a testator who had devised land to his two sons, who were his executors, having recovered a judgment against such executors, for the amount of his debt, and having by mistake caused the lands devised to them to be sold under an execution upon his judgment, supposing that the judgment was a lien thereon, and having bid in such lands at a price sufficient to satisfy the judgment, the chancellor made a decree setting aside the sale, and the sherifir’s deed given in pursuance thereof, and declaring that the judgment remained in full force as against the executors; and he directed an account to be taken of the personal estate of the testator which had come to their hands.
    Land aliened in good faith, by an heir at law, or a devisee, before the commencement of a suit against him for the recovery of a debt due from the testator or intestate, is not liable, in the hands of the purchaser, for the payment of such debt.
    All the heirs, or the devisees, of the decedent, who are liable for the payment of his debts, must be sued jointly, for the recovery of a debt due by such decedent. But if cine of such heirs, or devisees, has died without leaving any property, his personal representative need not be made a party to the suit.
    Where one of the devisees of the testator is a devisee of lands in another state only, it seems that he ought to he made a party to a suit against the other devi-sees, to obtain satisfaction of a debt due from the testator, if, by the laws of the State where such lands are situated, the devisee is liable for the debts of the testator.
    A creditor cannot file a bill against the personal representatives, of his deceased debtor, and against the heirs, or devisees, jointly, to obtain satisfaction of his debt. But he must exhaust his remedy against the personal representatives in the first place; or he must show, by his bill, that the personal estate was not sufficient to satisfy his debt, in order to authorize him to proceed against the heirs or devisees.
    This was an appeal, by the defendants, from a decree of the vice chancellor of the sixth circuit. The facts in the case, as they appeared from the pleadings and proofs, were as follows: Jonathan Boyer died in January, 1828, seised of a valuable farm at Big Flats, in Chemung county, and of other real property in this state and in the state of Pennsylvania, and was possessed of some personal property. By his will he devised to his son Philip Boyer a lot of land, containing fifty acres, on the south side of the Tioga river, in the town of Big Flats; also a leasehold lot of fifty acres, depending upon the -life of P. Michael, provided thé devisee should pay to his eldest sister, Betsey, a legacy oí $500 within one year, and give her a horse, saddle and bridle, and a. cow and six sheep. And he devised to his son, Samuel Boyer, his homestead farm, of about one hundred and twenty acres, being the residue of his real estate at Big Flats ; and directed such devisee to pay to each of his four other daughters, Polly, Susan-nah, Mary and Catharine, a legacy of $500; payable When they should respectively arrive at the age -of twenty-one. The testator bequeathed to his son John a legacy of $200, to be paid by his executors; after deducting therefrom the amount of John’s indebtedness. And. he devised to the lawful heirs of his son John, the farm in Pennsylvania whereon his said son then lived; and he charged those devisees with the payment of a, legacy, of $300, to his granddaughter, E. Fritchley. The residue of, his personal- estate the testator directed his executors to sell, end to apply the proceeds thereof to the payment of hi§ debts. ■And he appointed his sons Philip and Samuel his .executors ; who made, probate of the will, and took out letters testamentary thereon, on the 4th of February,. 1828. The principal, if not the only debts, .which the, testator was liable for at the. time of his ..death,.was a,note .of about $90.0, given by him to W. Wam- , baugh, .the complainant in this suit, either as theprincipUl debtor or.as.surety for his son Philip ;.,and a bond of about $3p0, to C. Winans, which A, Bennett had signed .with.tbe testator as his sure- , ty, and which, after his death, the surety was compelled to pay.
    . On the 20th of January, 1830, Samuel Boyer sold and con.veyed,,the farm, devisqd to him, at. Big Flats, to his brother .Philip, for the consideration of $3800, with warranty; which epnyeyanee was.duly recorded on the 23d of the same month. ,.And pn the 15th of August, 1832, Philip Boyer, conveyed the ...same farm.tQ S. Poultney and W. M.. Ellicott, together with.all his other.lands in that county; ..which, last .mentioned conveyance was recorded in December, 1832. In 1833, Wambaugh brought a suit against the executors, In the supreme court, . ..upon the note of their testator, and in November of that year, . obtained a judgment against them, as such executors, in the usual form,sfor $1459,16,damages, and $41,22 costs; to be, levied of .the goods and chattels, of the testator, in their hands, if sufficient,. and if not, then the costs to be levied of the proper goods of the executors. An execution was afterwards issued upon this judgment, under which the sheriff advertised and sold the farm devised by the testator to 8. Boyer, and other lands in which the defendants in that suit were supposed to have an interest under the will of the testator. And the said farm and the other lands were purchased by Wambaugh, for the price or sum of $‘1937; and the surplus proceeds of the sale were applied to the payment of Bennett’s debt, with the consent of S. Boyer. The sheriff executed a déed to Wambaugh, as the purchaser at such sale, “the 2§th of Octóber, 1837.
    Catharine, one of the daughters of the testator, married A. H. Gates-, Mary married S. Beard, Susannah married G. Yanderin, who sübséquently died, and Polly married John Barnes, and died in 1834, leaving her husband surviving. In August, 1835, Gates and wife, Beard and wife, and Mrs. Yanderin commenced a suit in chancery, before the vice chancellor of the sixth circuit, against S. Boyer, P. Bóyer, S. Poultney, W. M. Ellicott, E. Poultney, and W. Wambaugh, for the purpose of obtaining satisfaction of their legacies out of the lands devised to S. Boyer. P. Boyer afterwards died, and the suit was revived against his heirs, at law. The súbposna in that suit was personally served upon S; Boyer and W. Wambaugh; but the other defendants being nonresidents ’of the state, the bill was taken as confessed against them, as absentees. W. Wambaugh appeared and answered the' bill in that suit, and the bill was taken as confessed against S. Boyer, for want of appearance. The cause was heard upon pleadings, and upon the master’s report as to the rights of the absentees and of the infant children'of P. Boyer. And on the 21st of September, 1838, the vice chancellor made a decree, dismissing the bill as to the defendant Wambaugh, without prejudice, and declaring that the legacies to the testator’s daughters who were complainants in that suit, were due, and were an equitable charge upon the lands devised to S. . Boyer, in whose hands soever the said lands might be; and that S. Boyer was also personally liable for the payment of such legacies. The decree also directed a sale of the lands devised to S. Bbyer, by one of the masters of the court of chancery; that the master, otlt of the proceeds of the sale, pay to the complainants’ solicitor his costs, and a reasonable counsel fee, and the fees of the master, and pay the costs of the guardian ad litem of the infant defendants ; that such master pay the amounts due to the respective complainants for their legacies, with interest; and that he bring the residue of the proceeds of the sale into court, to abide the further order of the court. The decree also gave to the complainants the right to elect to proceed by execution, against S. Boyer personally, for the amount of their respective legacies and costs. It also provided for the protection of the supposed rights of the infant children of Mrs. Barnes; by directing that the amount of the legacy given to their mother, with interest, should be paid to them, out of the proceeds of the sale of the premises, if they should come in and claim the same upon the foot of that decree.
    In December, 1838, W. Wambaugh filed his bill in this cause, against the complainants in the suit in .which such decree was made, and against S. Boyer; setting forth the several matters above stated, in substance, except as to the conveyance of the devised premises, by S. Boyer to his brother Philip, and by the latter to Poultney and Ellicott. The- bill also charged that S. Boyer, and P. Boyer, after being advised that the complainant’s proceeding to sell the devised premises, under his judgment, was irregular, suffered him to proceed to a sale in ignorance of his rights, and to expend fiioneys for the benefit of the estate of their testator, with the intention that he should be deceived and defrauded. The complainant, therefore, prayed that the complainants in the former suit might be restrained, by a decree of the court, from proceeding to a sale of the farm, devised to S. Boyer, under and by virtue of the decree in such former suit, and might be directed to relinquish all claim to the land, and to quiet the complainant’s title thereto, oi that they and their confederates might be decreed to pay him the amount of his judgment, with interest and costs, and the surplus moneys on his bid upon the sale, which had been paid to Bennett for the benefit of the estate; and that the amount of his claim might be decreed to be a lien upon the premises, prior to the claim of the legatees under their decree, and to be first paid out of the proceeds of the sale of the premises; or for such other or further relief as might be proper, under the circumstances of the case.
    The defendants in. this suit, put in their joint and several answer to the complainant’s bill; by which answer they admitted that in 1819 the complainant loaned to the testator $700, for which the testator gave his note, which note was also signed by his sons, Samuel and Philip, as his sureties, and was payable on demand with interest; but they stated, upon information and belief, except S. Boyer, who answered upon his own knowledge, that •Philip Boyer afterwards assumed the payment of that note, by •an arrangement with his father, and that a new note was after-wards,-in 1822 or 1823, given by Philip Boyer to the complain- ■ ant, for the amount of such original note, and of another demand against Philip, in which the testator joined as surety for his son. •And the defendants stated, ppon information and belief, that both . notes -signed, by the. testator were,, joint, notes, and were not joint and several. The defendant S. Boyer-also stated in his answer, that the. payment made by him, upon the note, as stated in the complainant’s bill, in the year 1831 or 1832, was not. paid by l him as executor, but was paid out of his own private funds; although, at the special request of the complainant, it was en- ■ dorsed ■ upon the note as a. payment by him as executor. The defendants therefore insisted, in their answer, that the cause of ■ action, upon the note of the testator, was barred by the statute of . limitations. They also set forth in their answer, the conveyance by S. Boyer of the premises devised to him,- to P. Boyer, and the conveyance thereof by the latter to Poultney and Ellicott. The answer further stated that 'the suit against the executors was commenced by collusion with and at the request of P. Boyer, for the purpose of having the devised property sold under a judgment to be recovered thereon, to coerce a settlement with Poultney and Ellicott; in other words, to defraud them; and that the complainant purchased, at the sheriff’s sale, with full knowledge of all the facts, and of the previous conveyances of the premises, for the purpose of coercing Poultney and Ellicott to make a compromise with P. Boyer. The defendants also charged, in their answer, that the judgment, in the suit against the executors, was suffered to be taken by default for the same collusive purpose; and that such judgment was of no force or validity, as against the legatees of the testator; and that the complainant’s claim was' barred by the statute of limitations. The answer also stated that John Boyer, one of the devisees of the testator, was dead, and that he left several children who were still living. Most of the other facts stated in the bill were admitted by the answer. But the defendants, in their answer, insisted that the legatees were improperly joined with S. Boyer in the suit; and that if S. Boyer was a proper party, then that the heirs and the grantees of P. Boyer were also necessary and proper parties, and should have been made such parties; and they further insisted that the other devisees and legatees of the testator, or their legal representatives, were necessary parties, and were bound to contribute to the payment of the complainant’s debt, if he had any. They also insisted that by the sale and conveyance of the devised premises, by S. Boyer, before the commencement of this suit, the complainant had lost the right to seek satisfaction of his demand by a sale of the devised estate for that purpose.
    The cause was heard upon pleadings and proofs. The vice chancellor decided that before the legatees could recover their legacies out of the devised property, the debts ■ of the testator must be paid; that by the recovery of a judgment against the executors, the complainant established his claim against the estate, and was legally entitled to payment out of the personal estate, if there was any, and if not, then out of the real estate; and that he was also entitled, as against the real estate, to the amount he paid Bennett out of the proceeds of the sale of the devised estate upon execution. He therefore directed a reference to a master, to compute the amount due upon the judgment, and for the payment to Bennett, with interest, and the several legacies due under the former decree; and that the master proceed to sell, under the former decree, the premises devised to £3. Boyer, and that he pay, out of the proceeds of such sale, the costs and expenses of the former suit, as directed by that decree, with interest on such costs and expenses, and the costs of the defendants’ solicitor in this suit; that he then pay to the complainant in this suit the amount of his judgment, with interest and costs, the amount paid to Bennett with interest thereon, and his costs in this suit to be taxed; and that he then pay, out of the proceeds of the sale, the legacies decreed to be paid in the former suit.

      J. A. Collier, for the appellants.

      Z. A. Leland, for the respondent.
   The Chancellor.

The decree in this case is clearly erroneous, and inequitable, in relation to the rights of some of the-defendants in the former suit, who are not parties to this suit. For, by directing the master to proceed and sell the premises, devised to S. Boyer, under the former decree, and to charge. ,the debt of the present complainant upon the proceeds of such sale, for which debt the premises were not holden in the hands of Poult-ney and Ellicott, they are indirectly made liable not only for the payment of the complainant’s debt, but also of all the costs of the litigation in this suit, to which they were not parties. The whole extent to which the devised property, in the hands of Poult-ney and Ellicott could be made liable, in any event, consistently with the principles of justice and equity, was the amount of the four legacies, which were mere equitable liens thereon in the hands of the devisee, together with the costs of the suit to compel payment of such legacies. And if the complainant in this suit has any claim to any part of the proceeds of the devised premises, to be applied in payment of his demands against theestate of the testator, it can only be upon that part thereof which is due to the leg-, atees; as an interest carved out of the devisecl property for their benefit. That error, however, is one of which these appellants have no right to complain. And the defendants in the former suit, who are not parties to the decree in this case, and therefore not bound by it, must apply in the suit to which they are made pay-ties, or in some other way, to stay any irregular and uncpnscip^-tious proceeding in that suit, or under the decree made therein, to deprive them of their property, beyond the amount'of the legacies and the costs; in consequence of the erroneous directions contained in the decree in this suit.

By the common law, lands aliened by the heir at law before suit brought, were not liable in the hands of hopa fide purchasers thereof for the debts of the decedent. The same principje is distinctly declared by the provisions of the revised statutes. The 51st section of the article relative to suits against legatees, &c., (2 R. S. 455,) declares that lands aliened in good faith by any heir, before suit commenced against him, shall not b,e liable to execution, nor be in any manner affected by a decree against such heir. And the 61st section of the same article makes the same provision as to lands aliened by a devisee before suit brought against him. Neither the lands devised to Samuel Boyer, por those devised to Philip Boyer, all of which lands had .been aliened, to Poultney and Ellicott, long before the commencement of .this (or any other suit by the complainant, were liable for the payment of his debt. And the time for obtaining an order from the surrogate, to sell, had expired nearly six years before the filing of the bill in this case. The objection that the grantees .of Philip Boyer were not made parties to this suit, therefore, is not well taken. For if they had been made defendants they might have pleaded the alienation to them of the lands devised to Philip, as well as those devised to Samuel, in bar of any claim upon them, or upon the lands so aliened.

But if Philip Boyer had been living, he would have been a necessary party. For the statute requires all the heirs, or all the devisees of the testator where the devisees are liable for-his debts, to be sued jointly. (2 R. S. 454, § 42. Id. 456, § 60.) I infer from the bill and answer, however, that Philip died out, of -.the state, and insolvent, and without leaving .any property here. .And if that was so, the objection that his personal representatives are not parties is. not tenable. Th.e children of John B.oyer, .to whom the farm in Pennsylvania.y/as devised, might .be ¡deemed necessary, parties,Tor.Jhe purpose of.enforeing.contribution, if:it appeared that, by the laws of that state, lands devised were liable for the simple contract debts of the testator. But there is not sufficient appearing, either in the bill or the answer, in this case, to enable me to say they were necessary parties; especially as it appears, from the answer of the defendants, that the children of John were not residents of this state. The legacy to John Boyer was not specifically charged upon the real estate, but was payable out of the personal estate merely. And the statute does •not contemplate a joint proceeding against such a legatee and the heirs or devisees of the testator, even where the personal estate has been paid out to the legatee, leaving the debts unpaid. The personal representatives of John Boyer, therefore, .couldnot be necessary parties to this suit, even if it was shown that the legacy to John Boyer had been paid to him out of the personal estate. And as he took no interest in the real estate of his father, either by devise or descent, he was not bound to contribute to ■the payment of the debts of his father, either as an heir or a ■devisee.

The three daughters of the testator, who are parties to this suit, if they are liable for the debt of the complainant, can only be charged with the payment of such debt upon the ground that their legacies were interests in the real estate, carved out of that part of it which was devised to their brother Samuel; and that they are devisees of an interest in the testator’s real estate, to the. extent of their several legacies, which are an equitable charge upon the farm devised to Samuel. But Upon the same ground J. Barnes, who became entitled to his wife’s legacy by survivor-ship, which legacy was also an equitable lien upon the same farm, is a necessary party to this suit; as his interest in the estate of the testator is equally bound to contribute to the payment of the complainant’s debt. And the other daughter of the testator, who had a legacy of the same amount, payable out of •the real estate devised to Philip, appears also to be a necessary party. Whether the interests of any of these legatees, can be reached by the creditors, after the estate devised, and upon which their legacies were an equitable lien, had been aliened by the -devisees, is a question which it is not necessary to decide at this time. I am satisfied the bill in this cause is not properly-framed, nor with the proper parties, to charge any of the defendants as devisees.

In the case of Butts v. Genung, (5 Paige’s Rep. 254,) this court decided that, under the provisions of the revised statutes, a creditor of the decedent could not file a bill against the personal representatives and the heirs, or devisees, jointly, to obtain satisfaction of his debt. And that to entitle a creditor to a decree against the heirs or devisees, he must show by his bill, either that the personal estate of the decedent was not sufficient originally to pay the debts, or that such creditor had exhausted his remedy against the personal representatives, without being able to obtain satisfaction of his debt. The bill in the present case is wholly defective in these respects. It merely states that the testator, at the time of his death, was possessed of considerable personal estate, but without alleging that it was not sufficient to pay his debts. Nor is the want of a proper allegation in the bill, on this subject, supplied by any proof in the case. For aught that appears, the personal estate of the testator was sufficient to have paid all his debts, if it had been applied to that purpose by the executor's. The devisees of the real estate, or of any interest therein, cannot therefore be called on to contribute any thing, for the payment of debts, until it is shown that the complainant has taken all proper steps to obtain satisfaction from the executors, or from the legatees of the personal property, if it has been paid over to them, leaving the debts unpaid. (2 R. S. 453, §§ 33, 36. Idem, 455, §§ 56, 59.)

The issuing of the execution) upon the judgment, recovered against the executors, did not exhaust the remedy against them for personal estate which had come to their hands and had been misapplied by them. For, under that execution, the sheriff could only levy the debt out of the personal property which still remained in their hands, and which was the proper subject of sale upon execution. The return of such an execution unsatisfied, therefore, was no evidence that there was not in fact sufficient personal property, originally, to satisfy the judgment, or that the debt ’could not be recovered from the executors personally, if thé 'compláitíarit ’had taken the 'proper step's to call them to Kccourit before the surrogate. It does not appear, in this casé, whether the execution was issued with or without-an order o'f thé surrogate. Biit as it would be illegal to issue it without stich an order, the presumption of law is that an application was madé to the surrogate, and that he made an order allowing such ekeciitibn to issue, in conformity to the statutory provision on this subject. (2 R. S. 88, § 32.) The complainant, therefore, was bound tó procééd against the surviving executor - person all y, for the satisfaction of his debt, before he could resort to the in'terests of these legatees .in the real estate upon which their legacies were liens; ifdhose interests could be reached in-any-way, under the circumstances of this case.

The decree of the vice chancellor was-therefore clearly erroneous; and it'must be reversed. The bill, as 'to all'the appellants except Samuel Boyer, must be 'dismissed with costs, but without prejudice to their rights in any future litigation. -'But as ’to the defendant; Samiiel Boyer, the' surviving executor,'I think there is sufficient in the pleadings ánd proofs to entitle the complainant to á decree for relief against him. It is very evident that the sale of the devised premises; upon the execution against the executors; and the bidding in of the-property “for’an amount beyond whatkvas'dtie dpon 'the jüdgmént; when neither óf the defendants in the judgment had any'estate'Or intéresfin ’such property, either in their-own rights or otherwise, were founded in mistake; It is true; the judgment 'against the defendants was personal; so far as the costs of the suit were concerned ; and if the title td the devised'premises had been in either of the defendants in'siich judgment; at the time of the docketing-’thereof, I am not prepared to say that the purchaser would not have obtained the legal title under that sale. But 'the añ'swer and the proofs in this cause show that the whole Of the'devised ‘property hád'been transferred, to Poultney and Ellicott, previous to the recovery of the judgment. The complainant, therefore, ' if 'he'desires'itj’is entitled to' a decree setting aside the :sale''bf "the1 'devised pi-emises, upon'the' execution,'and thé deed-executed "tjy’tíu? Slhéfiíí,,an3'décÍaring‘íthé'jfi'dg'iñ'ént':iii!íülÍ'ibfé'é'ins%gaínst S. Boyer, as the surviving executor, notwithstanding such sale; and referring it to a master to take an account of the personal estate of the testator, which came to the hands of the executors, or which they might have received and applied to the payment of the complainant’s debt, by due diligence; and charging him with interest on the value of such estate, after the expiration of eighteen months from the death of the testator; to the end that upon the coming in of the report of the master, such a decree may be made against S. Boyer, for the satisfaction of the debts due to the complainant, as may be just; and reserving the question of costs between those parties, and all other questions and directions as to them or their rights, in,the meantime.


text:
    Barber vs. Spencer and others.
    Where the complainant purchased a judgment, against his creditors, and actually paid for it, before the transfer of their demand against him to a third person, but the written assignment of the judgment, to him, was not executed.till after that time, Held, that he was in equity entitled to offset such judgment, against the demand which his creditors had transferred to such third person.
    The court of chancery, upon a bill filed for that purpose, will allow an equitable Bet-off, where the right to such set-off existed, in equity, previous to the transfer of the defendant’s demand against the complainant to a third person ; although such set-off could not have been made in an action at law, or by a summary application by motion.
    The right to a set-off, upon a summary application to a court of law or equity, exists only in cases where the debts on both sides are liquidated,- by judgment or decree, before the assignment of either to a third person.
    ' Joint debts cannot in equity be set off against separate debts, unless there are equitable circumstances to take the case out of the general rule. And where a debtor, who has a separate demand against one of two joint creditors, assigns the ■ same to a- third person, before such creditor acquires any equitable right to have the ’ same offset, against the joint debt due to himself and his co-creditor, he cannot sustain a bill in equity, .against the assignee of such debtor-for an offset, although the joint debt has been subsequently assigned to him.
    This was an application,'by the defendant Ward,->ahd'the ;?-'Spencers,'td 'dissól've an injunction, restraining the cbllection of a júdgtoént against' the complainant; which judgment was - held by Ward, as the assignee of the Spencers, under a general assignment for the benefit of creditors. The Spencers were insolvent, and the principal object of-the bill was to have a judgment, recovered by the complainant and S. Worden, against the Spen-cers, offset against the judgment recovered by them against the complainant.

      W. T. Worden, for the complainant.

      W. W. Campbell, for the defendants.
   The Chancellor.

The right of set-off, upon a summary application to a court of law or equity, exists only in cases where the debts on both sides are liquidated by judgment or decree, before the assignment of either to a third person. But the court-of chancery, upon a bill filed, may allow a set-off, where the equitable right to such set-off existed before such assignment to a third person; although neither of the demands had at that time been liquidated, by judgment or decree.

Here, the judgments recovered against the Spencers, by the Cayuga County Bank, were the property of the complainant as early as May, 1843; when the bank received payment therefor, from him,' in pursuance of the previous agreement, made in the month of March. It was therefore a matter of no consequence when the written assignment was made by the bank. For-the complainant’s right to the judgment was complete, in equity, before such assignment; and the equitable right to a set-off existed the moment the Spencers became insolvent; which insolvency was previous to their general assignment to Ward, for the benefit of their creditors, The recent case of Gay v. Gay, (10 Paige's Rep. 369,) settles the question, therefore, that the complainant was entitled to come into this court for an equitable set-off as to the bank judgments; although a set-off could not be allowed upon a summary application, by motion, either in the supreme court, or in this court,

The assignment from Woo.den, to the complainant, of all his interest in the joint demand against the Spencers, appears to have been made on the 24th of July, 1843; nine days after the Spencers had assigned all their interest in the separate demand against the complainant, on the guaranty, to the defendant "Ward, for the benefit of creditors. The general rule is, that joint debts cannot be offset in equity, any more than at law, against separate debts; unless there are equitable circumstances in the' case to take it out of that general rule. The right to that part of the offset claimed in the present suit, must, therefore depend upon the question whether there was, in this case, an equitable right to have the complainant’s separate debt, on the guaranty to the Spencers, offset against the joint debt due to himself and Wooden, from them, at the time of their assignment of the complainant’s separate indebtedness, on the 15th of July, 1843. Such an equity would unquestionably exist, in this case, if it was satisfactorily established that the property which formed the consideration of the joint indebtedness of the Spencers to Barber and Wooden, was in fact the property of Barber alone, or that it was property held in trust, for his indemnity against his guaranty to the Spencers. But even if such an equitable right of set-off exists, the complainant, who comes into this coi^rt. for relief, will be compelled to do equity, by allowing to the adverse party the whole amount due upon the guaranty; including the interest thereon which was remitted, in the suit at law, on account of the technical mistake in the declaration. Upon examining the bill, however, I do not find any allegation that the property forwarded to the Spencers, by Barber and Wooden, was in fact the property assigned to the latter, by Barber and Savage,- in July, 1841, to indemnify the complainant against his guaranty. Nor is it alleged in the bill, that the amount which the Spencers owed to Barber and Wooden was not, in fact, a demand in which Wooden was equally interested with the complainant, in equity as well as at law, previous to the assignment by Wooden to the complainant, and subsequent to the assignment of the separate debt of the complainant to Ward. On the other hand, I do not find, in the answer of the defendant Ward, any distinct claim that any of the property assigned by Barber and Savage, was property to which the Spencers were entitled, by a prior equity, to meet acceptances which had been made upon the faith of their agreement. It is unnecessary, therefore, to express any opinion on that part of the case, in this stage of the suit. And an entirely different state of facts may hereafter be presented, by an amendment of the bill and a further answer to the same.

All that can be necessary to say now, is that the complainant appears to be entitled, in equity, to a set-off, at least to the extent of the bank judgments. The motion to dissolve the injunction is therefore denied, and the complainant’s costs, of opposing the application are to abide the event of the suit; and they are to be taxed as apart of his costs, against the defendants Ward-arid the Spencers, if he succeeds in recovering costs against them, or either of them.


text:
    The Utica Insurance Company vs. Lynch and others.
    It ia the duty of a receiver to keep the trust fund entirely separate and distinct from his own moneys. And if deposited in a bank for safe keeping, the money should he deposited to a separate account, in his name as receiver; to the end that the fund can at all times be traced and identified.
    If a receiver loans out any part of the moneys which came to his hands, as such receiver, even temporarily, to his friends or others, it is a breach of trust.
    Where a trustee mingles the trust funds with his own funds, and uses them, it is a breach of trust, and he will be charged with simple interest thereon ; although he ■has not actually made a profit upon the trust funds equal to simple.interest.
    A trustee is not allowed to make a profit out of the trust funds for his own benefit; and if he employs them in trade, whereby he makes more than siniple.interest, he will be charged with the whole profits; either by making periodical rests and charging him with compound interest, or in such other manner as will best carry out the principle of giving to the cestui que trust the benefit of all profits made beyond the simple interest.
    In su'ch c.ases, the court allows simple interest only, where it. is evident that the ■profits made by the trustee could not have exceeded that amount. But where it is doubtful whether the profits did not exceed the simple interest, the cestui que trust will be allowed to elect between such interest-and the actual profits made ■out of the trust fund; such profits to-be ascertained upon a reference.

      Stating the accounts with periodicahrests, and-compounding the interest, is only a convenient mode, adopted by the court, to charge the trustee with the amount of the profits supposed to have been made by him, in the use of the trust money, where the actual amount of the profits, beyond simple interest, cannot be ascertained.
    The rule is well settled, that a trustee, Who has mingled the trust moneys with his own, and has used the same, or any part thereof, in violation of his trust, will be charged with interest on such moneys.
    This case came before the court upon exceptions of the receiver in this suit, to the report of the master, upon passing his accounts. By the decree, the receiver was directed to pass his accounts, and to pay over to the master the balance in his hands, to be disposed of according to the directions of the decree. It appeared that the receiver’s accounts commenced in 1831, and that the moneys received by him, between that time and 1839, when the amount in his hands, exclusive of interest, was paid over to the master, under the decree, were not kept separate, but were mingled with his own moneys, in the bank where he kept his acconnt, in his own name; and that he drew out and used large sums of the trust fund, from time to time, by loaning the same to his friends and otherwise. The master therefore charged the receiver with simple interest upon the annual balances in his hands, commencing on the 31st of December, 1832.

      W. C. Noyes, for the complainants.

      M. T. Reynolds, for the receiver.
   The Chancellor.

No question can arise upon these exceptions, as to whether Roberts was or was not appointed receiver in this cause. For he passed his account before the master, in his character of receiver, and under the provisions of the decree; which directed the receiver theretofore appointed in the cause, to pass his accounts and to pay over to the master the balance which should be found due from him, upon such accounting. And in both of his affidavits, produced before the master, his character of receiver, in relation to the fund for which he was to account, is distinctly recognized. There is no doubt, therefore, that.he had been" appointed a receiver'in this cause; although the order for his appointment was not produced before the master, by either party, when Roberts appeared to pass his accounts as such receiver. The only question then which properly arises upon these exceptions is, whether a receiver, who violates his trust, by mixing the trust fund with his own moneys, or with moneys which he holds in trust for others, and who uses such moneys for his own purposes, or loans them out from time to time on his own account,.should be charged with interest.

The order appointing the receiver was not produced before the master, to show what directions were given to the receiver in relation to the funds which should come to his hands. But if no directions were given, it was his duty to keep the trust fund entirely separate and distinct from his own moneys. And if deposited in the bank, for safe keeping, the money should have been deposited to a separate account, in his name as receiver; so that the fund could at all times be traced and identified. From the facts before me, I am not prepared to say it was the duty of the receiver to apply to the court to have the fund invested ; as the parties interested therein were adults, and in a situation to protect their own rights. But the neglect of the parties to obtain directions to bring the fund into court, and have it invested ,to abide the decision in the suit, did not justify the receiver in mingling the trust moneys with his own funds, in bank, or with moneys received and deposited by him as the agent of the estate of D. Lynch. And the loaning out of any part of the nioneys which came to his hands as receiver, even temporarily, to his friends, or to the estate of D. Lynch,' was a palpable breach of trust. That such loans were made is distinctly admitted in the last affidavit made by the receiver.

It is true the amount standing to the account of Roberts, in bank, was at times equal to, and even greater, than the amount in his hands as receiver. But whether the sums thus standing in his own name, belonged to this fund, or were moneys received and deposited by him on account of the estate of D. Lynch, for which estate he was receiving and disbursing large sums of money, does not appear. It is evident, however, from the state of the bank account from time to time, that very large portions of the trust fund must have been withdrawn and misapplied, temporarily at least; even if none of the funds in the bank belonged to the estate of D. Lynch. For, in June, 1834, the balance standing to the credit of Roberts, in bank, was nearly $700 less than the amount with which he was chargeable as receiver; and in June of the next year, the deficiency was about $1200. In June, 1836, the deficiency was more than trebled; in December of that year it still exceeded $3000; and in June and December, 1837, the deficiency was still greater.

The decree was affirmed, by the court for the correction of errors, in December, 1837, as stated by Roberts, in his affidavit; when, according to the terms of the decree, he should Have passed his account, and paid over the whole, fund in his hands to the master. And although nothing was paid over by him until 1839, the amount standing to his credit in the bank, in December, 1838, was about $4400 less than the balance then in his hands as receiver. This-deficiency is accounted for by showing that the trust fund had been'loaned, temporarily, to the trustees of D. Lynch’s estate and others, under an agreement that it should be returned whenever it was wanted. From this statement of the facts, therefore, it is evident that the fund, in the hands of the receiver, has been so mingled with his own funds, and used by him, as to amount to a breaeh of trust, and to render him liable at least for simple interest thereon.

The court, in charging a trustee with interest, when he has mingled the trust fund with his own, or has neglected his duty in relation to the fund, does not always proceed upon the ground that the trustee has made a profit by his breach of trust. It is true he is not permitted to make a profit out of the trust fund, for his own benefit. And if he has employed the fund in trade, whereby he has made more than simple interest, fie may be charged with the whole of such profits; either by making periodical rests, and charging him with compound interest, or in such other manner as may best carry out the principle of giving the cestui que trust the benefit of all profits made beyond the simple interest. (Raphael v. Boehm, 11 Ves. 92. Decker v. Somes, 2 Myl. & Keen, 655. Schieffelin v. Stewart, 1 John. Ch. Rep. 620. Montjoy and wife v. Lashbrook, 2 B. Monro. Rep. 261. Clarkson v. De Peyster, Hopk. Rep. 424.) In cases of that kind, the principle of the court appears to be, to allow simple interest only, where it is evident that the profits made by the trustee could not have exceeded that amount. But if it is doubtful whether the profits were not greater, then to allow the cestui que trust to elect, between such interest and an inquiry as to the actual profits made out of the trust fund. Stating the account with periodical rests, and compounding the interest, is only a convenient mode, adopted by the court, to charge the trustee with the amount of profits supposed to have been made by him in the use of the money; where the actual amount of profits, which he has made, beyond simple interest, cannot be ascertained. It does not follow from this, however; that the trustee who has mixed the trust funds with his own, and has violated the trust by using the fund himself, or by loaning it to others without interest, is to be excused from the payment of simple interest; although he may not have actually made a profit upon the trust fund equal to the simple interest. On the contrary, the rule appears to be well established, that where the trustee mingles the trust funds with his own, and uses the same,' or any part thereof, in violation of the trust, he is to be charged with interest on the fund. In the case of Mumford v. Murray, (6 John. Ch. Rep. 17,) Chancellor Kent says, “ the defendant must be charged with interest on the moneys from time to time received; and for this plain reason, that he mingled the moneys belonging to his partner with his own, and used those moneys as his own. It forms therefore a just and clear case for interest.” And in the case of Clarkson v. De Peyster, before referred to, where the guardian mingled the moneys of his wards with his own, and in that way had the use thereof, although he did not employ them in trade, nor invest them so as to produce interest, Chancellor Sanford directed an inquiry as to whether profits bad been made from the trust moneys; and that the defendants should be charged with simple interest upon the moneys remaining in his hands, from which no profits, or profits not exceeding the simple interest, should appear to have been made. That decision would justify the allowance, by the master, of the simple interest in the case under consideration, although the receiver, in some of the temporary loans which he made of the trust moneys to his friends, did not charge the borrowers with interest. The mixing of the trust moneys with the trustee’s own funds, and using them himself, or lending them to his friends temporarily, and under the expectation that the money would be promptly replaced, before it was wanted for the purposes of the trust, is one of the most common causes of the loss of trust funds, in the hands of executors, receivers and guardians, and other trustees. And the safety of those whose property is necessarily placed in the hands of trustees, makes it the imperative duty óf the court to restrain and discourage such breaches of trust, by charging those who thus deal with the funds intrusted to their cafe, with interest; although the fund is not actually lost to the cestui que trust.

The master was right in this case, therefore, in charging the receiver with interest on the funds in his hands; which funds were thus mingled with his own moneys in bank, and loaned quj; from time to time to others, or drawn out for his own temporary purposes. ' The exceptions to the master’s report must be overruled, with costs to be taxed, and the master’s report must be confirmed; and the receiver must pay over, to the master, the balance due from him, as ascertained by the report, with interest thereon from the date of the report; as directed by the order in this cause.

         See Milland v. Gray, (2 Coll. Ch. Rep. 295.)

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


text:
    Saxton and wife vs. Stowell, Ernst and others. The Same vs. Stowell, Crafts and others.
    The eodrt of chancery is not authorized to strike a solicitor from the rolls, under the provisions of the revised statutes, upon motion, without the filing of regular charges against him, and obtaining a previous order of the court, for him to show cause why he should not be stricken from the roll of solicitors.
    It is irregular to serve a subpoena in a cause before the bill has been filed. And where the subpoena served on the defendant, is one which has been issued and used in another suit, and has been altered and again used without the authority of the court, the proceedings will be set aside.
    Where the complainant enters a common order for the absolute dismissal of his bill with costs, without the previous permission of the court before which the suit is pending, such order is irregular. And the defendant may apply to set it aside upon that ground; or he may treat it as regular, and proceed to collect his costs by execution.
    The proper course for a complainant, where the suit is in a situation to be discontinued by him, is to enter a conditional order, to dismiss his bill upon payment of costs. In such case, he cannot bring a new suit,„for the same matter, until he has paid the costs of the former suit, or at least until he has tendered them; and if he does so, the pendency of the former suit may be set up as a defence in such new suit.
    This was an application to sot aside the proceedings of the ' complainants in these causes, for irregularity, or to stay the proceedings therein, until the costs of a former suit, for the same matter, should be paid; and also for an order to strike the solicitor of the complainants from the roll of solicitors, for-misconduct in relation to the proceedings in these suits.

      Willard Crafts, for the motion.

      L. J. Walworth, for the complainants.
   The Chancellor.

The question whether Saxton, the solicitor in these causes, should be stricken from the rolls, cannot be disposed of upon this application. The statute requires that charges shall be first filed against him, and a copy thereof served. The proper course of proceedings, in such cases, is to file written charges against the solicitor who is accused of malpractice, accompanied by affidavits supporting the charges ; and then to apply, ex parte, .to obtain an order from the court, that the accused show cause, at a time to be specified in such order, why he should not be stricken from the rolls. And a certified copy of the charges, and of such order to show cause, should be served upon the accused solicitor, such length of time before the day appointed for showing cause as the court has, in and by such'order, directed. (1 R. S. 109, § 30.)

As to the regularity of the proceedings of the complainants’ solicitor in these suits, it is evident that the subpoena, tested the 30th of January, and annexed to the affidavit of the solicitor in the first of the above entitled causes, is not the subpoena which was actually served upon some of the defendants in that suit, and which was served upon all the .defendants, except Crafts and Cook, before the bill was filed. (2 R. S. 179, § 76 [70.]) I am also satisfied that the subpoena fraudulently annexed to the affidavit of Windsor, the sheriff, as the one which he had served, was a subpoena that had been issued on the 8th of November 1842, in a suit against-Ernst only. The service of the subpoena in the first cause was therefore irregular, as to all the defendants in the first of the above causes. And the service of that subpoena, and all subsequent proceedings thereon, must be set aside for irregularity, except as to the defendant C. Cook, who does not join in this application; with costs to be taxed, and to be paid by L. C. Saxton, one of the complainants.

Whether there was any irregularity in the service of the subpoenas in the second cause, in which Ernst is not a party, does not distinctly appear; although from the alterations in the subpoena annexed to the affidavit in that suit, there is reason for supposing that it is the same subpoena which was originally served upon most of the defendants in the first of the above causes, in which Ernst was a party. However this may be, I am satisfied that the complainants ought not to be permitted to proceed further in either of these suits, until the costs of the defendants in a former suit, which was referred to the vice chancellor to be heard and decided, shall have been paid.

Where a complainant enters a common order, to dismiss his bill upon payment of costs, the order is conditional. And if he commences another suit before such costs are paid, or at least before payment thereof has been tendered, the pendency of the former suit may be pleaded in abatement of such new suit. (Simpson v. Brewster, 9 Paige's Rep. 246.) But where, as in this case, the complainant enters an absolute order to dismiss his bill, with costs to be paid to the defendants, the defendants may treat it as a valid decree, and may proceed to collect their costs thereon, as if such decree had been entered by order of the court: or they may treat it as irregularly entered, and may apply and have it set aside on that ground. Here the complainants have entered an absolute order that their bill, in the suit which was referred to the vice chancellor, be dismissed; and that the complainants pay to the defendants their costs in that suit, to be taxed. And it is evident, from the affidavits and other papers before me, that the subject matters of these new suits, when taken together, embrace the same objects for which the former suit was commenced; although these new suits may also include something more. The defendants are therefore entitled to an order that all the proceedings on the part of the complainants, in both of these causes, be stayed; until the costs of the former suit before the vice chancellor of the fifth circuit, and also the taxable costs of the defendants upon this motion, shall have been paid ; _ provided such costs shall be taxed, and copies of the taxed bills served on the solicitor of the complainants, within thirty days after the entry of the order upon this decision.

The defendants’ solicitor is also to be at liberty to file formal charges against the solicitor for the complainants, in relation to the alteration of the subpoenas annexed to his affidavit, and to the affidavit of the sheriff; stating therein the grounds of such charges against the solicitor, for malpractice, or other offences in relation to the proceedings in these suits; and to apply, ex parte, for the usual order thereon, for the solicitor of the complainants to show cause why he should not be stricken from the rolls. Or the solicitor for the'defendants) in these suits, may have permission to lay these original affidavits before the grand jury of the county of Otsego. And the register, upon the application of the district attorney of that county, is at liberty to transmit such affidavits to him for that purpose.

Order accordingly.


text:
    The Bank of Monroe vs. Widner and others.
    Where a foreclosure suit was commenced before a vice chancellor, who had formerly been counsel for one of the parties, in the same matter, and the parties subsequently entered into a written agreement, to refer the cause to a solicitor of the court, to hear and decide the same, and that a decree should be entered by the vice chancellor in conformity to that decision; reserving to the parties the right of appeal; and the cause was heard by such referee, who decided the matter in controversy between the parties, and directed the usual decree to be entered, referring it to a master to compute the amount due upon the mortgage, and reserving the further directions until the coming in of the report, and such interlocutory decree was drawn up and entered accordingly;

      Held, that the decree was binding upon the parties, and ought not to be set aside by the court; and that the defendant had not the right to revoke the power of the referee; so as to prevent him from making the usual decree of foreclosure and sale upon the coming in and confirmation of the master’s report.
    The time allowed for appealing, from an order or decree of a vice chancellor, being fixed by statute, the court cannot extend the time for appealing, indirectly; by vacating the decree or order, and entering it as of a more recent date; for the mere purpose of giving a party a right to appeal after the time limited by law has expired.
    An agreement to refer a pending suit to an arbitrator, and that a judgment in the cause shall be entered according to his decision, will justify the entry of such judgment; which judgment will be binding upon the parties, as a judgment entered by consent.
    After a cause has been argued, and finally submitted to the arbitrator for his decision, neither party has the right to revoke the powers of the arbitrator.
    The bill in this cause was filed before the vice chancellor of the eighth circuit, in 1838, to foreclose a mortgage. At the time of filing the bill the present vice chancellor of that circuit was the copartner of the complainant’s sqlicitor, and wás conn-. ’ ' ' " sel in the suit; and the. bill was regularly taken as confessed against all the defendants therein. In 1839, after the appointment of the present vice chancellor of the eighth circuit, J. Wid-ner and P. Widner, two of the defendants, applied to the complainants’ solicitor to be let in to defend the suit. But as the then vice chancellor of that circuit was. considered incompetent to hear and decide the matters in controversy in the cause, by reason of his having once been counsel therein, it was agreed by a written stipulation, signed by the complainants’ solicitor, and by the solicitor for the defendants, J. Widner and P. Widner, that the default of those defendants should be opened, and that they should be permitted to put in an answer to the bill, and that when the cause should be ready for hearing, upon pleadings ■ and proofs, it should be referred to and decided upon, by 0. Hast-' ings, Esq., and that the decision and decree made by him might be signed by the vice chancellor of the eighth circuit, and entered by the clerk in this cause, With the like force and effect as if heard and passed upon by the vice chancellor, in the ordinary way, without objection; reserving to the parties the same right of appeal as upon an ordinary decree of the vice chancellor. An answer was accordingly put in by those defendants, to which a replication was filed, and the proofs were. taken in the usual manner. When the cause was in readiness for hearing, upon pleadings and proofs, it was argued by the counsel for the respective parties before 0. Hastings, Esquire, who subsequently decided the principal matter in controversy in the suit, and directed a reference to a master, to compute the amount, due to the complainants, upon the bond and mortgage. In pursuance of the stipulation, a decree was thereupon drawn up and signed by the vice chancellor, and entered by the clerk in the minutes of the court, in conformity to the decision of Mr. Hastings; by which it was ordered, adjudged and decreed that the bond and mortgage mentioned in the complainants’ bill, were good and valid securities in their hands, as against P. Widner and the other defendants in this# suit, for the amount of the indebtedness, of H. Widner deceased, to the complainants; and directing a reference to a master to compute the amount due, and to take proof of the facts and circumstances stated in thé bill, as to the rights of absentees, and to examine the cashier of the complainants as to payments, &c., and giving special directions as to two items of indebtedness claimed by the complainants as due to them, and secured by the bond- and mortgage, reserving further directions, until the coming in of the master’s report. After the entry of this decree, the defendant J. Widner attempted to appeal therefrom to the chancellor; but by accident the appeal bond was not rceeived in time to file it, and to perfect the appeal within the period allowed by law for appealing. The solicitor for the defendants was duly summoned to appear before the master upon the reference, but he did not attend. And the master thereupon computed the amount due, in conformity to the'order of reference, and made his report, dated the 23d of February, 1844. The cause was thereupon noticed for hearing, before the vice chancellor, for a final decree upon the report. The counsel for the defendant, J. Widner, having consulted with his clients, thereupon gave notice, to the solicitor for the complainants, that he should object to the vice chancellor’s hearing the case, for the purpose of making the final decree, on the ground that he had been counsel in the cause; and that he should treat the powers of Mr. Hastings as at an end, and that he thereby revoked all power and authority of Mr. Hastings, if any existed under the stipulation. The defendants’ solicitor also filed, in the clerk’s office, certain exceptions to the master’s report. The complainants subsequently noticed the case for hearing before Mr. Hastings, pursuant to what he supposed to be their right under the stipulation, and a final decree was thereupon directed, by Mr. Hastings, and was signed by the vice chancellor and .entered by the clerk, in the usual form, for a foreclosure and sale of the premises, to satisfy the amount reported due by the master.
    The solicitor for the defendants, J. Widner and P. Widner, thereupon gave notice of an application, before the chancellor, that the original decree entered by the vice chancellor, in pursuance of the first decision of Mr. Hastings, and all subsequent proceedings on the part of the complainants, including the final decree upon the master’s report, should be set aside, with costs for irregularity; and in case that application should not be granted, then that such original decree and all subsequent proceedings should be opened, and that such decree might be reentered, so as to give the defendants a right to appeal therefrom, or for such further or other order as might be proper in the premises.

      M. T. Reynolds, for the complainants.

      H. Gay, for the defendants, J. and P. Widner.
   The Chancellor.

The time for appealing, from an order or decree of the vice chancellor, being limited by statute, the court has no power to extend the time for appealing, indirectly; by vacating the decree or order and entering it as of a more recent date, for the mere purpose of giving a party the right to appeal. That was so held by this court in the case of Caldwell v. The Mayor of Albany, (9 Paige's Rep. 572,) which must be considered as decisive upon that part of the present application. It is, therefore, unnecessary to examine the question whether the court is authorized to interfere in ány way with a decree by consent, so as to give to the defendants the right of appeal, in a case not provided for in iheir stipulation; even if the chancellor would have had jurisdiction to hear and decide the appeal, if it had been duly entered.

The parties having stipulated that a decree might be entered in the cause, in conformity with the decision of Mr. Hastings, this court ought not to interfere to set aside that decree, if the terms of the agreement have been in facl. Complied wife on the part of the complainants, unless there is some unbending legal principle which fenders such An interference on'the part of this court necessary and proper. The effect of the agreement was, in substance, to waive the default of these two defendants, and to permit them to put in an answer and make a defence to the suit, and that the questions arising in the cause should then be submitted to Mr. Hastings to decide, in the same mariner as the vice chancellor would have been authorized to decide them, if he had hot Men previously concerned as counsel in the case; and that the decision so made, by the arbitrator agreed on by the parties, should be carried into effect, by the entry of a formal decree in the suit, in conformity with such decision. The fair construction of the stipulation between the parties therefore was, that the arbitrator was to proceed in the same manner as the vice chancellor might have done, if he had heard the cause in person. The decision of the questions of law and fact, arising upon the pleadings and proofs, and the entry of the usual decree declaring the rights of the parties, and referring it to a master to compute the amount due, and to make the usual inquiries as to the rights of absentees, and to examine the proper officer of the corporation on oath as to payments, preparatory to a final decree, was therefore in conformity to the provisions of the agreement, and was fully authorized thereby. And it is impossible for the court to set aside that decretal order, or the report of the master made in pursuance of the same, without making a new agreement for ithe parties, without their consent.

Our courts have decided, that a mere agreement to refer the matters in controversy in a suit, to an arbitrator to hear and decide the same, is a discontinuance of the suit. And that the only remedy of the parties in such case is upon the agreement to refer, or by a shit upon the award, if an award is in fact made in conformity to the stipulation. But it has also been held, and that too by the court of dernier resort in this state, that an agreement to refer a suit pending, to an arbitrator, and that a judgment shall be entered in the cause in conformity with his decision, will justify the entry of a judgment accordingly; which judgment will be binding upon the parties, as a judgment by consent. (Yates v. Russell, 17 John. Rep. 461. Green v. Patchen, 13 Wend. Rep. 293.) In the case under consideration, the defendants might probably have revoked their consent to submit the cause to the decision of Mr. Hastings, at any time before it had been heard by him, and left for his decision, pursuant to the stipulation. But they certainly could not have done so without waiving all the benefits of the stipulation, as to opening their default and permitting them to put in an answer and make a defence. For no court of justice would have permitted them to commit such a fraud upon the adverse party, who had waived their default upon the faith of this agreement. And after the cause had been heard before the referee, and submitted to him for his decision, it was too late for either party to revoke the submission. It is true, at the common law, it was competent for one of the parties to a submission to arbitration, to revoke the submission at any time before the award was actually made, and ready to be delivered to the parties. But the revised statutes have 'wisely provided that neither party, to a submission to arbitration, shall have power to revoke such submission after the cause has been finally submitted' to the arbitrator, upon a. hearing of the parties, for his decision. (2 R. S. 544, § 23.) And this court has decided that the statutory provision on this subject, applies to all cases of submission to arbitration. (Bloomer v. Sherman, 5 Paige’s Rep. 575.) The case under consideration was finally submitted to Mr. Hastings, for his decision, at the close of the . last' argument before him, upon the pleadings and proofs. It was therefore too late to attempt to revoke his powers under the stipulation, after he had decided all the questions, in. dispute between the parties, in favor of the complainants, and after a decree had been entered in conformity with that decision. It is true, this decree was not the final determination of the suit; but it was a decision upon the merits of the case, which in its nature could not again be reviewed or altered by the arbitrator. And as, from the nature of the case, the submission contemplated a decision of the arbitra tor in this form, according to the course and practice of the court of chancery in similar cases, the award was final and valid pro tanto, although the referee was thereafter to carry his previous decision into effect, by directing the usual decree to be entered, upon the coming in of the master’s report. That, however, was a mere matter of form, as the defendants were not authorized to except to the- report of the master; not having attended before him to bring in objections, upon which exceptions could be founded. The subsequent attémpt, therefore, to revoke the power of the referee to carry out his decision by the entry of the usual decree for a sale of the mortgaged premises, upon the coming in of the report, was nugatory. For the power of the arbitrator could not be revoked, in part, after the entry of this interlocutory decree; so as to prevent him from making a final decision of the matter, by directing the entry of the usual decree of sale, upon the coming in of the master’s report, which decree was merely consequential upon the previous decision.

The entry of the final decree was therefore regular, as well as the previous decree and the proceedings before the master; as to which previous decree and the master’s report, there certainly is no foundation for a pretence of irregularity, so far as the rights of J. Y/idner and P. Widner are concerned. Even if the final decree should now be set aside, upon the ground that the powers of Mr. Hastings were spent when his first decision was made, which settled the whole merits of the controversy, it would be a matter of course to direct the entry of the final decree, upon the master’s report, upon the usual application to the chancellor; in case the vice chancellor is incompetent to direct the entry of a mere formal decree, on the ground that he had once been counsel in the cause. From the view I have taken of the case, however, even that formality is unnecessary; and this application must be denied.


text:
    Steward and others vs. Green and Bannister.
    A mere technical error in drawing up an order, jvhich error would have been corrected as a matter of course, npon a suggestion to the court below, will not affect the right of the respondent to costs upon an appeal from the whole order; although such technical error in the order is corrected upon the appeal.
    Where an action is pending in the supreme court, at the time of the discharge of one of the defendants therein under the bankrupt act, and the defendant, who is discharged, afterwards suffers a joint judgment to be taken against him and his co-defendant, instead of applying to the court for leave to set up his discharge, as a bar to the further continuance of the suit against him, it seems he cannot set up his discharge under the bankrupt act, in opposition to an application for the appointment of a receiver in a creditor’s suit, in the court of chancery, founded upon such judgment.

      This was an appeal from a decretal order of reference, to appoint a receiver of the property and effects of the judgment debtors, upon a creditor’s bill, and to examine the appellants on oath.

      J. Ganson, for the appellants.

      B. Slosson, for the respondents.
   The Chancellor.

The objection of the respondent, that the appellants have not filed a certificate of probable cause, as Required by the 116th. rule, is not available here for any purpose, as an objection to the regularity of the appeal. The only consequence of not filing the certificate is that the appeal does not stay the proceedings, on the order of reference to compel the assignment of the property of the appellants, and to appoint a receiver, &c.

The bill was sufficiently verified. The complainants’ solicitor swears that the bill is true, to the knowledge of the. deponent, except as to the matters which are therein stated to be on his information and belief. And if, as the counsel for the appellants insists, there is nothing stated in the bill on the deponent’s information and belief, then the effect of the affidavit is that every thing alleged in the bill is true, of the deponent’s own knowledge. The probability is that the deponent has verified the bill rather more strongly than he intended to do, instead of nof swearing to enough.

The objection that it does not appear that the judgment was docketed,’is not well taken. The real estate, of the defendants in a judgment of the supreme court, may be sold on execution, where the judgment is not docketed in the coqnty clerk’s office, notwithstanding the docketing is necessary to obtain a lien as against third persons. (Youngs v. Morrison, 10 Paige's Rep. 325.) Here the bill shows that an execution has been issued against the real as well as the personal estate of the judgment debtors, and that it has been returned unsatisfied. That is sufficient. For, it appears that both the judgment debtors resided in the county to which such execution was issued. And if they had any real property there, the execution would have reached it.

The discharge of the defendant Bannister, under the bankrupt act, more than a month before the recovery of the judgment against him, cannot avail him in this court, while that judgment remains in full force. It appears, by his affidavit, that his counsel thought fit to argue the case in the action against him,“in the supreme court, after this discharge was obtained; instead of applying to that court for leave to plead his discharge in bar of .the further continuance of the suit as to him. And judgment having been given against the defendants jointly, upon that argument, the complainant was probably bound to make them both parties to this suit. The case of The Mechanics' Bank v. Hazard, (9 John. Rep. 392,) shows that if Bannister wished to avail himself of a discharge which had been obtained before judgment against him, he should have applied to set up his discharge, as a defence, in the supreme court. And having neglected to do so, this court cannot grant him relief, while the judgment, recovered against him subsequent to the discharge; remains in full force. It is not necessary, however, to pass upon that question definitely at this time. For the affidavit, in opposition to that motion, does not disclose all the facts necessary to enable this court to say whether the discharge would have been a valid bar to this suit, even if it had been obtained after the judgment. Here the defendant Bannister should at least have applied to set aside the execution, if it was irregular to issue it on the judgment which was recovered subsequent to his discharge.

The complainant’s solicitor, in drawing up the order appealed from, inadvertently inserted a direction to examine the defendants, in conformity to the provisions of the 191st rule; instead of confining their examination to the property, &c., which they were directed to assign to the receiver, This was a mistake, which would have been corrected of course upon a mere suggestion to the vice chancellor. This objection, therefore, which is formal, will not be allowed to affect the question of costs upon this appeal from the whole order. The order of reference must be modified, by striking out the general direction, “ that the defendants submit to such examination, or examinations, as the said master shall direct, in relation to any matters which said defendants would be required to disclose by answer to the bill of complaintalso by' striking out a similar provision as to the examination of witnesses, and inserting, in lieu thereof, the usual direction contained in orders of this kind, where the defendants appear and answer the bill; that is, a direction confining the examinations of the defendants, and of the witnesses, to matters which are proper in relation to the appointment of the receiver, and to the property and effects which the defendants are.directed to assign to such receiver.

With this modification, the order appealed from must be affirmed, with costs.

Order accordingly.

       See Corey v. Cornelius, (1 Barbour's Ch. Rep. 571.)