text:
    Phyfe vs. Wardell & Woolley.
    In the case of church leases, and leases from the trustees of charities, See. where the lessors are in the practice of giving new leases to their tenants from timo to time, upon the payment of a renewal fine or a reasonable addition to the rent, the tenant, in regard to third persons, has a vendible interest, in such imperfect right of renewal, which a court of equity will recognize and protect, although such renewal depends upon the mere volition of the lessors.
    If a person, who has a particular or special interest in a lease, obtains a renewal of the lease in consequence of his being in possession as tenant, or from his having such special interest., the renewed lease is in equity considered as a mere continuance of the original lease, for the protection of the rights of all parties who had any legal or equitable interests in the old lease.
    Where the complainant as the lessee of premises, a part of which had been lei by him to an under tenant, contracted with the defendants to sell his interest in the premises to them, for the purpose of enabling them to obtain a renewal, without prejudice to the rights of the sub-lcssce; and the defendants, in consequence of such agreement, obtained a new lease of the premises in their own names, and then evicted the sub-lessee, by which the complainant was compelled to 'make good the loss or damage sustained by him; Held, that the complainant was entitled to a decree for a specific performance of the agreement, and to be indemnified against the claim of the sub-lessee; and that he had a lien, for the unpaid purchase money, upon the legal interest in the premises, which the defendants had acquired ¡under their new lease.
    This was an appeal from an order of the vice chancellor of the first circuit, overruling a demurrer to the complainant’s bilí. The complainant stated in his bill that the owner of the premises, the corporation of St. Michael’s church at Bloomingdale in the city of New-York, leased to P. Fowler, lot No. 38, on the north side of Vesey street, for the term of twenty-one years from the 35th of March, 1811, at the yearly rent of $150; which lease, by divers mesne assignments, came to the complainant; that on the first of February, 1833, the complainant leased part of the premises, for one year from the first of May then next, to D. Decker; that it always had been the'custom of the corporation of the church, upon the expiration of any of their leases, to grant renewals of the same to the lessees, or their assignees, who were in possession of the premises, in preference to any other person; that the privilege of renewal formed a valuable appurtenance to the leases, and always entered into the consideration for the sale or transfer thereof, and was the primary object which the defendants had in view in making the purchase of the complainant’s interest in the unexpired term in his lease, as thereafter mentioned; that the defendants applied to the complainant to sell to them his lease and interest in the premises, and offered to take the same subject to the lease for one year to D. Decker, and to assume the complainant’s responsibility to D. Decker under the sub-lease, and also to procure for the complainant another lot for the storage of his lumber and materials then on the premises; that on the 9th of March, 1832, the complainant agreed wiih the defendants to sell and assign his unexpired term in the lease and premises, and his right to renewal, to them, for the sum of $8650, subject to the lease to D. Decker; that a memorandum in writing was then made and signed by both parties, by which the defendants agreed to purchase the complainant’s lease of the premises, with the buildings on the lot, for the said sum of $8650, to be paid the first week in. May thereafter, when the possession and title was to be given by him ; that at the time of executing the written memorandum of the agreement, the complainant objected that his right to a renewal of the lease, and the engagement of the defendants to assume his responsibility to Decker, were not mentioned therein ; to which objection they replied that ié was admitted and well understood, and that no advantage would be taken of such omission ; that the complainant was satisfied with that assurance, supposing he was dealing with honest and honorable men; that at the time of the agreement, neither of the parties had examined the lease, or knew the period of its termination, as the defendants had determined, if they should purchase, to apply immediately for a renewal of the lease; that shortly after the sale to the defendants, the treasurer of the church corporation informed the complainant that the lease had expired, and that if he wished for a renewal, the corporation were ■ready to fix upon the terms of such renewal; that he informed the treasurer of the sale, in the presence of one of the defendants, and requested that the renewal lease might be made in their names, which was agreed to ; and the terms of the renewal were to be fixed upon by the corporation and the defendants ; that a new lease was accordingly given to the defendants, for the further term of twenty-one years from the time of the expiration of the old lease; that after the complainant had directed the new lease to be given to the defendants, but before the delivery of such lease, he discovered, by conversing with one of the defendants, that they did not intend to fulfil their agreement with him; and that he immediately notified the treasurer of the corporation, and requested that the lease might not be delivered until they had performed their agreement, but the same was delivered, notwithstanding such request; that the complainant delivered up possession of a part of the premises, according to the agreement ; and that the defendants had ejected Decker from the residue thereof, who claimed damages from the complainant in consequence of such eviction. The complainant therefore prayed for a specific performance of the written agreement, offering to perform the same on his part, if any thing remained to be done, and that the defendants might be decreed to pay the purchase money, and indemnify him against Becker’s,claim for damages, or that they might be" decreed to assign to the complainant the renewed lease ; and for general. relief.

      D. Selden, for the appellants.
    The complainant had no legal or equitable right which he could have himself enforced against the church. Had he. then a right which he could assign to another % Had not the church a right to make a lease to whom it pleased, and upon what terms it pleased 1 Would this court have enjoined the treasurer from delivering the lease to the defendants, had application for such an injunction been made, upon the state of facts as they are represented to have existed previous to the delivery of the lease 1

    There is no allegation in the bill that the treasurer acted contrary to his authority from the trustees, in not complying with the request of the complainant to withhold the lease. On the contrary, the whole intercourse and negotiation was carried on with, and completed by him. He had full authority. The object of the bill is to compel the defendants to complete their contract. If the contract should be considered as that reduced to writing, so far as the defendants are concerned, it is to pay $2650 for the lease and buildings. If the oral communications which passed between the parties constitute part of the contract, in addition to paying the money, the defendants were to assume the complainant’s responsibility to Becker, arising out of the letting to him for one year. The right of Becker to claim the occupation for the year could not be changed by an assignment of the lease, if the lease had had that time to run. As to the under tenant, the assignees of the" complainant stood in the same situation as the lessee, who was the landlord of the under tenant. At the time the lease was agreed to be sold, it was not understood by either party that it had run out.
    This court could not acquire jurisdiction of the case from the fact that the defendants fraudulently undertook to avoid the payment, any more than if they had only refused payment after the complainant had fulfilled his part of the contract. A court of law sustains an action on a contract; whether the' plaintiff performs or only offers to perform his part of the contract, or is prevented by the defendant from performing his part of the contract. (Blackwell v. Nash, 1 Strange, 533. Hotham v. The East India Co., 1 T. R. 638.) The bill presents two questions: 1. Whether there is a binding agreement made out by the bill; and 2. Whether that agreement can be enforced in this court. The agreement, if made at all, was verbal, and was entered into at the time of making the written contract. Admitting the agreement to allow Decker to continue as the sub-tenant was binding, there is no allegation that this part of the agreement has been violated. ' The bill says Decker has been ejected, but not that he has been ejected contrary to his tenancy. Equity will not presume illegal force, or an ejectment contrary to the terms of the contract of letting, but the contrary, if the nature of. the arrangement relative to Becker’s tenancy is an agreement of indemnity, the court will not require indemnity until some act is charged to have been done, or omitted, which renders the complainant liable. No such charge is made in this case. The paroi contract, as stated in the bill, is, that the defendant assumed the responsibility of the complainant to Decker. No violation of the contract is set forth.
    Again ; the agreement was invalid. Two rules bear upon this question. First. That which is fixed by the statute of frauds, which renders all assignments of leases, and all contracts relative to any interest in or concerning lands void, unless reduced to writing. The paroi agreement was to assume the responsibility; in other words, the relation agreed upon between the complainant and Decker, of landlord and tenant. Second. The general rule of evidence, that defects in contracts reduced to writing cannot be supplied by paroi. A contract cannot rest partly in writing and partly in paroi. Hence, in the case of Parkhurst v. Van Cortland, (14 John. Rep. 33,) the written memorandum, which was set forth in the bill, was rejected entirely as a part of the contract; and the decree in that case was grounded upon the part performance of a paroi contract by the complainant. In that case, it appears also that the paroi contract, and the written memoíanchim, were made at different times. In the present case they are concurrent, or rather the paroi contract charged to "have been made was part of the negotiation, which is alleged to have been agreed to, but not inserted in the written agreement. This rule is so rarely departed from, either at law or equity, that it is unnecessary to examine the exceptions. 'They are all, so far as they relate to the circumstances of a -ease like -the present, included within the exceptions allowed to the rule as fixed by the statute: viz. that a party, who has made a verbal contract, and allows the party with whom he has contracted to go on with the performance of his part of the contract, shall not escape in equity from doing what he agreed to do. To allow him to do that, the court say, would be tantamount to a fraud. (2 Hovendon on Fraud, 33.) The paroi agreement, in such cases, is not binding, but the part performance gives the claim to relief. If the contract exists, partly in writing and partly in paroi, the performance which ■enables the party to claim relief must be of something called for by the paroi agreement. If all that was done was strictly in accordance with what the writing called for, it cannot be deemed a part performance of the paroi agreement, or afford any ground of claim under it. But what acts have been done by the complainant, in performance of any part of this contract 1 First. The surrender of the portion of the premises occupied by him. Second. Á request to the trustees to make out the lease to the defendants. Both of these acts were called for by the written, and not the paroi contract. No act has been done by either party, in part performance of any -contract entered into to protect the rights of ‘Becker as under tenant.
    If the reasoning of the vice chancellor is correct, in what possible case does the statute protect a party from liability ? It was made to save him from fraud and perjury. Part performance of the written agreement cannot give validity to the parol contract, so as to obtain relief, in equity, founded upon the latter. The part performance required in equity is of tire parol contract. Without this, it cannot be proved, and can have no status in curia.

      Again; if we consider the contract binding, as a whole, is it a case for equity 1 Why not go to law 1 The relief asked for, (all tile relief which can be granted,) is in the nature of damages. (Cox v. Butler, 1 P. Wms. 570. Lester v. Cooper, 3 Atk. 383. 2 P. Wms. 594.) The jurisdiction of equity is never exercised to decree compensation singly, without other relief. (Newham v. May, 13 Price, 749. M’Clel. Rep. 511 Berry v. Tracy, Eq. Cas. Abr. 163. Lannoy v. Wherry, 4 Bro. P. C. 630.) The agreement of the defendant to indemnify against Decker, does not give rise to any equitable jurisdiction in this case. If this is otherwise, how far does the rule extend ? Has a second endorser, after protest, a right to call a prior endorser into equity to indemnify him against the holder’s suit 1 Has the grantee a right to call his grantor into equity to indemnify him against an outstanding title ? Has the sheriff a right to call the sureties in a bond of indemnity into this court, to indemnify him against damages for an unlawful seizure 1 These are cases of admitted indemnity. Does a stronger case for equity arise, where the right to indemnify is doubtful 1 (See Flint v. Brandon, 8 Vesey, 159, Everington v. Aynsley, 2 Bro. C. C. 341.)
    Again ; the agreement proved was only a contract for the sale of a good will. Chancery does not enforce such contracts, but leaves the parties to their remedy at law. (Baxter v. Conelly, 1 Jac. & Walk. 576. 2 Kent's Com. 468. 2 Ball & Beat. 303.) If, by the terms of the contract, it was for the sale of more, the complainant had not the power to perform it on his part; and this court does not modify an agreement, and compel the defendant to perform it. (Viscount Clermont v. Jasburgh, 1 Jac. & Walk. 112. Feldes v. Hooker, 2 Meriv, 424. Wood v. Rone, 2 Bligh, 595, King v. Wightman, 1 Anst. 80.)

      J. Buer, for the respondent.
    Phyfe has lost the possession and enjoyment of a valuable property, solely from the confidence which he reposed in the honor and integrity of the defendants ; and they, by the abuse of that confidence, have acquired what he has lost. The supposition that he can have no redress at law or in equity would be a libel on the law, or iipbii its administration. The respondent is entitled to relief, teither by a specific performance of the contract set forth in the bill, or by way of compensation for the injury which he has sustained by the fraud of the defendants. As a specific performance of the agreement, the relief which he claims is a decree for the payment of the §2650 which the defendants stipulated to pay, and a suitable indemnity against the claims of Decker. There is no weight in the objection that the court has no jurisdiction, on the ground that the complainant had an adequate remedy upon the contract at law. This objection is founded in an entire misconception of the reason on which the aid of the court is invoked. Admitting it to be true that a court of equity cannot award damages for the breach of a contract, (although even to this rule there are many exceptions,) it by no means follows that a decree cannot be made for the payment of a sum of money, as a specific execution of a contract in relation to lands. The jurisdiction of chancery extends to all cases of specific performance, whether the relief be sought by the vendor or the purchaser. A Contract is executed when it is carried into effect according to its terms. And a decree compelling the payment of the purchase money, is as truly a decree for a specific performance, where the title has been already given, as a decree compelling the execution and delivery of a deed, where the purchase money has been paid. Where the contract is Valid under the statute of frauds, the vendor has always a plain remedy at law ; yet, even in such a case, equity has a concurrent jurisdiction. (1 Mad. Ch. Rep. 286. Finch’s Rep. 420. Lewis v. Lechmere, 10 Mod. 503.)

    But this complainant was Wholly without remedy at law. No suit could be brought, except upon the written contract; and in a court of law, evidence to enlarge or vary the terms tif that agreement would be inadmissible. To entitle the complainant to recover, it would be necessary to prove performance on his part, or an otfer to perform, or that performance was prevented by the act of the defendants; and no such proof could be given. The written contract is for the sale of a subsisting lease, and the title which the complainant agreed to make, on the first of May following the date of the contract. was an assignment of that lease, and the expiration of his term before that day rendered the execution of the contract, impossible. The truth is, as the bill admits, the agreement was framed in a mutual error as to the duration of the lease and it cannot be doubted that the defendants, when the mistake was discovered, had a perfect right to consider themselves discharged. They were not bound to accept of an assignment of any other lease than that to which the contract referred ; and if they had chosen to place themselves on this ground, when they were informed that the term had expired,, the complainant could not have enforced the agreement, either at law or in equity. Their liability is founded entirely on their subsequent acts, of which at law no evidence could' be given. But it may be asked, do we not seek by the bill the specific performance of the written agreement 1 Certainly not. The agreement we seek to enfore is that into which the defendants entered, after they were informed that the lease had expired, and after the treasurer of the church had offered a renewal to the complainant, on such terms as might be agreed on. They then Agreed, in consideration that he would surrender the possession and permit the new lease to he made out in their names, or in the name of one of them, to pay him the sum before stipulated, and to assume his responsibility to Decker. This agreement., not being in writing, is-void at law; and it is ¿nly on the ground of its part performance, by the actual delivery of the possession and of the new lease, that it can be enforced in equity. That this agreement and its part performance are sufficiently charged in the bill to render it. binding in equity, it is conceived, will not be doubted. The bill states that the complainant informed the treasurer of the church, in the presence of one of the defendants, that he had sold to them his interest in the premises, and he therefore wished that their names, or the name of one, at their election, should be substituted in the new lease then to be granted ; and that the defendants well knew and understood that these directions were given in the full faith and confidence that they would pay the consideration money mentioned, in the agreement, and assume Pbyfe’s responsibility to Decker. The defendants, by accepting the possession and the new lease, with this knowledge of the expectations of Phyfe, in effect agreed to fulfil them. If they did not mean this, it was their duty then to have undeceived him ; nor can they deny that they intended an agreement,' without admitting that they contemplated a fraud. The morality of a court of equity is not technical, or verbal, or common. The court follows the precepts of a pure and enlightened conscience, and hence its established and familiar doctrine, that the silence of him who is bound to speak is equivalent to an express assent.
    Were it even true that the plaintiff would have a remedy at law for the recovery of the purchase money, it is plain that he could not, in a court of law, obtain an indemnity, either by way of damages or otherwise against the claims of Decker. This obligation is no part of the written contract, and it is only in this court, and upon principles of equity, that evidence can be admitted to supply the defect and correct the mistake. The counsel for the appellants assert that a court of equity can in no case decree the payment of a sum of money in pursuance of a contract, because such a relief is in the nature of damages; and that the jurisdiction of the court is never exercised to decree compensation singly, without other relief. Most of. the cases referred to by the appellant’s counsel are cases of agreements in relation to personal chattels, which, it is true as a general rule, will not be enforced in equity; and the residue are cases where the compensation was sought as damages for the breach of a contract, and where the party had a certain remedy at law. Were the doctrine of the counsel true, a decree for a specific performance could never be made in favor of a vendor, even where, from the invalidity of the contract under the statute of frauds, he could have no remedy at law. Yet it so happens that the leading cases, where relief has been granted on a part performance, are cases of this character, and the relief has consisted solely in compelling the defendant to pay the purchase money; that is, according to the reasoning of the counsel, to make compensation bjr way of damages. (See Lacon v. Mertins, 3 Atk. 1.) The agreement therefore, and the authorities of the counsel, are sufficiently answered by saying that a decree for the purchase money is not a decree for compensation. in the sense of the cases cited ; and it is only where the party has a remedy at law, that even compensation by way of damages is refused.
    It is objected that as the complainant’s lease had expired, the only consideration for the agreement of the defendants was the transfer of a good will, and that chancery will never execute contracts of this description. The meaning of the rule that equity will not execute a contract for the sale of a good will, is merely this: that the purchaser will not be compelled to take a conveyance giving him no title in law or equity, but only the reasonable hope or expectation of such title. The cases quoted would be analogous and conclusive, if the plaintiff having remained in possession without obtaining a renewal of his lease, was seeking to compel the- defendants to pay the consideration money upon the' mere transfer' of his possession, without giving them any title at all. That the transfer of a good will is a valuable consideration, has been frequently decided; and it is a novel doctrine, that where the transfer has been made, and the purchaser by means of it has obtained the title he sought, he is not liable to make any compensation in law or equity. For this is the extent of the argument, as applied to the present case. But the consideration of the present contract was not the mere transfer of a good will. The treasurer of the church had actually offered a renewal to the complainant; and the bill avers' that the very same lease which the defendants have obtained, would have been granted to Phyfe, but for his reliance on their fulfilment of their agreement. The true consideration, therefore, was the lease itself—the very title which they have obtained. If the lease had been made out in the name of Phyfe, and he had immediately assigned it, there would have been no pretence for the objection ; and such in substance, though not in form, is the character of the transaction.
    Were it even true that the contract could not be enforced as such, either in law or in equity, the complainant would still be entitled to relief, on the ground of fraud, to the extent of the actual injury he has sustained. From his reliance on the good faith of the defendants, he has lost the value of the materials of the buildings and other improvements, which, by the terms of the lease, he had a right" to remove, but which 'tie gave up on surrendering the possession to the defendants; and the actual value of the new lease beyond the rent reserved, and also the amount which, from his inability to protect Decker, he will be liable to pay him. The cases are numerous in which equity will relieve a party, deceived by a void promise, •who would otherwise sustain an irreparable injury. This is in truth the very principle of the doctrine of part performance, and is applicable to every case where a party relying on a promise, either express or implied, has exposed himself to a loss he would otherwise have escaped, or lost a benefit he would otherwise have obtained. (2 Sch. Lef. 41. 1 Mad. Ch. Rep. 32.) Belief has even been granted where the promise was not made to, nor the deception practiced upon the party asking the aid of the court; as, for example, against an heir or residuary devisee, who, by false assurances to a testator or intestate, has prevented an intended legacy or other provision. (Chamberlain v. Agar, 2 Ves. & Bea. 222.)
   The Chancellor.

Although, as between landlord and tenant, the complainant had no legal or equitable right to a ■renewal, as it depended upon the mere volition of his landlord, yet, in regard to third persons, he had an interest which a court of equity recognizes as a valuable and vendible interest. The rule on this subject is, that if a person who has a particular or special interest in a lease, obtains a renewal thereof from the circumstance of his being in possession as tenant, or from having such particular interest, the renewed lease is, in equity, considered as a mere continuance of the original lease, subject to the additional charges upon the renewal, for the purpose of protecting the equitable rights of all parties who had any interest either legal or equitable, in the old lease. This is particularly so in the case of church leases, leases from trustees of charities, or from other persons where there is but a slight probability of the renewal being refused, if the tenant consents to pay the renewal fine, or the increased rent which the landlord may think proper to require. The first case on this subject is Holt v. Holt, (1 Cases in Ch. 190,) where the executor, having given security for the payment of •the legacies, took the leasehold estate to himself. He after-wards obtained a renewal of the lease upon the payment, of a fine, and built houses upon the premises, as his own; and Lord Keeper Bridgeman, assisted by Justices Twisden and ■yypde, and Barons Rayuesford and Wyndham, decreed that the legatees should have the renewed lease as part of the estate of the testator; they paying the fine upon the renewal, and the charges of the improvements. The decision in that case was not founded upon any breach of trust on the part of the executor, for he had every reason to suppose himself entitled beneficially to the leasehold premises. The other property, upon which the legacies xvere also chargeable, was ample at the time; but a part xvas destroyed by the fire of London, and the residue being held by a title derived under the commonwealth, was lost by the restoration of Charles 2d. So in the case of Palmer v. Young, (1 Vern. Rep. 276,) which came before Lord Guilford fourteen years afterwards, where a church lease had been granted to three persons, and one of them afterwards obtained a renewal in his own name, it was decreed that he should hold it in trust for the benefit of all. These decisions were followed by Lord King, in Keech v. Sandford, (Sel. Ca. in Ch. 61,) about forty years afterwards ; and in Witter v. Witter, in 1730, (3 P. Wms. 99.) In the first case a lease of the profits of the Rumford Market was devised to a trustee for the benefit of an infant. The term being about to expire, the trustee applied to the lessor for a renewal, for the benefit of his cestui que trust. But the trustee refused to renew, on the ground that, from the nature of the property, he could have no remedy by distress; and the infant being incapable of securing the rent by covenant. The trustee thereupon took a lease to himself And, upon a bill filed by the infant, for an assignment of the new lease, and for an account of the profits, although there xvas clear proof of the refusal to renew for the benefit of the infant, it xvas decreed that the lease should be assigned to the infant, that the trustee should be indemnified against the covenants contained in the lease, and should account for the rents and profits subsequent to the renexval. In the last case, the executor, xvho held a lease in trust for an infant, for a term of years determinable on lives, being unable to obtain a renexval for a term, took a new lease in trust, for lives absolutely; which was a descendible interest, and would not, at law, go to the personal representative. And the infant having died under age, but after he was old enough to have disposed of his interest, by will, if the change in the lease had not been made, it was decreed that his interest in the renewed lease, coming in the place of the original lease, should be distributed as personal estate. The cases of Mason v. Day, (Prec. in Ch. 319,) and Pierson v. Shore, (1 Atk. Rep. 480,) although they apparently conSict with the other decisions, do not conflict with them in point of fact. The rule is, not that the renewed lease is to be considered as a continuationof the old lease for every purpose, but only so far as concerns the legal and equitable rights of those who had an interest in the old lease. And the two last mentioned cases only decided that the heirs at law who had no interest in the original lease, must take according to the new lease. In the recent report of the case of Pierson v. Shore, taken from the note book of Lord Hardwieke, (1 West’s Rep. 711,) the distinction between that case and the case of Witter v. Witter is fully explained. The Lord Chancellor says: The true reasons why the guardians of an infant cannot convert his personal property into real, is because the infant would thereby be deprived of the power of disposing of it so soon, and not out of any regard to the real or personal representative.” And he expressly recognizes the principle, that, so far as regards those who had an interest in the old lease, the renewed lease is considered a mere continuation thereof, and subject to the same uses. The last case I shall refer to on this subject is Rawe v. Chichester, (2 Ambl. Rep. 715,) before Lord Apsley, in 1773. In that case, the testator having certain leasehold estates for years, in the name of a trustee, bequeathed them to his wife for so many years of the term as she might live, and after her death, if the terms were still in being, then to his brother for life, with remainder to his children. The widow survived the original term; but having obtained a renewal for an additional term, it was decreed that the renewal was for the benefit of the estate of the testator, and that the remainder-men wrere entitled thereto. In that case Lord Apsley says, it. may be laid down as a rule,, that whoever has a lease, has an interest in its renewal, and5 it is often the subject of settlements and of the jurisdiction of this court. Though the lessors are not bound to renew, yet when done, it is a continuance of the old lease. If trustees, mortgagees and persons interested, obtain a renewal, the new lease is-always subject to the trusts and limitations of the old’ lease. These cases being, all before the revolution, and settling the law on this subject so conclusively, it will be needless to show that the same principle is adhered to in the more recent adjudications in the English court of chancery.

The case under consideration comes directly within the' principle established by these decisions. The defendants, therefore, must take their renewed lease as a continuation of the-old one, which expired a few days after their contract of purchase; and subject also to the sub-lease to Dickey, the under tenant, of which they were informed at the-time-of their purchase.. And having taken an unconscientious advantage-of their legal title, to deprive the lessee of the complainant of the possession to which he was equitably entitled under the-lease for a year, they are bound to make good any loss the-complainant may sustain thereby. In this view of the case it is not material to consider whether the neglect to insert, a particular covenant in the- written agreement, as to Dickey’s-rights, through the fraud of the defendants, would of itself have-constituted a sufficient ground for equitable relief. .Although the new lease was taken in the names of the defendants, yet, according to the principles above stated, it must be considered,, for the purpose of protecting the rights of all parties, as if the renewed lease had been taken in the name of the complainant, and as a continuation of the original lease; which original lease the defendants had contracted to purchase with a full knowledge that a part of the premises were underlet to Decker. This would have given the defendants the right to the possession of the rents and profits of that part of the premises, as the landlords of Decker, upon payment of the purchase money, and to the actual possession of the residue of the-premises; which, upon the facts stated, must be considered the fair construction of the written agreement,

The vendor has a right to come into this court to compel ■the specific performance of a contract of sale against the vendee, although he may have another remedy by action at law for the purchase money; as was recently decided by this court, in the case of Brown v. Haff & Lyan, not yet reported. In the present case, however, there are other grounds on which the jurisdiction of the court may be sustained. And it is perhaps doubtful whether an action at law could be sustained upon the written agreement, as the original term expired before the time appointed for the performance of the ■contract. And the principle of considering the renewed lease as a continuance of the old one, being one which is peculiar to the courts of equity, it was necessary, at all events, for .the complainant to come into this court to enable him to enforce his equitable lien for the unpaid purchase money, against ■the legal interests whiclr the defendants have obtained in the premises under the new lease. The decision of the vice ..chancellor, in overruling the demurrer, was therefore correct , and must bs affirmed, with costs.

       Ante, p. 235.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Dickey vs. Craig and others, executors, &c.
    A. proceeding by scire facias, by the executors of a deceased plaintiff to revive a judgment abated by his death, is a proceeding in the same suit or action in which the judgment was recovered. And to obtain an injunction to stay the executors from proceeding upon such scire facias, the complainant must deposit the amount of the judgment, -or give security for the payment thereof, according to the statute.
    The defendants in this cause were the personal representatives of S. Craig, deceased, who, in his lifetime, recovered a judgment against the complainant, m the supreme court. The defendants having brought a scire facias to revive the judgment, and to enable them to have execution thereon, the present bill was filed, and an injunction was granted, without deposit or security, restraining the defendants from proceeding upon the scire facias. The whole equity slated in the bill related to the original debt for which the judgment was recovered, and arose previous to the recovery of such judgment

      The defendants demurred to the bill for want of equity, and also gave notice of a motion to dissolve the injunction. This motion was founded upon an affidavit that the injunction bad been granted without deposit or security, as well as upon the want of equity in the bill. The vice chancellor overruled the demurrer, and also denied the motion to dissolve the injunction; from both of which decisions the defendants appealed. The appeal front the order denying the motion, not being a calendar cause, was heard on a motion day ; the counsel agreeing that if the opinion of the court should be against the defendants on the question of regularity, the final decision upon the appeal should be deferred until the equity of the bill could be more deliberately discussed upon the appeal from the vice chancellor’s order overruling the demurrer.

      G. Griffin, for the complainant.
    J. Edwards, for the defendants.
   The Chancellor.

The order appealed from must be reversed, if the appellants were right as to either of the grounds upon which they asked for a dissolution of the injunction. But by the arrangement of the parties I am only to consider the question, at this time, as to the right of the complainant to an injunction without a deposit or security, admitting a proper case in other respects is shown by the bill. This depends upon the construction which is to be given to some of the provisions of the article of the revised statutes relative to the granting of injunctions to stay proceedings at law. The 141st section of that article, (2 R. S. 189,) directs that no injunction shall issue to stay proceedings at law, in any personal action, after judgment, unless a deposit to the full amount of the judgment, including costs, shall be made, or bond and security in lieu thereof shall be given. If this is to be considered as a proceeding in the action in which the judgment was recovered, it comes within the letter of the statute requiring a deposit, or security, before an injunction can be granted to stay such proceeding. And it appears to be clearly within the spirit of this provision, as there is no pretence that any thing new has occurred, since the judgment, which could constitute an equitable bar to the scire facias. Although for some purposes a scire facias is considered and treated as an action, still, if the object of the proceeding is to revive a judgment, it is a proceeding in the original action, and is but a continuation thereof. This was so decided in the case of the executors of Wright v. Nutt, (1 Term Rep. 388 ;) and it is so considered in several boobs of practice. (See 2 Chitty’s Archbold, 598 ; Graham’s Prac. 649.) For this reason also a substituted service is sometimes allowed ; as was done in the case of Dias v. Gaydon, (Beatty’s Rep. 439.) This case coming both within the letter and the spirit of the section of the revised statutes above referred to, the order appealed from must be reversed, with costs. And the injunction must be dissolved; but with liberty to the complainant, upon the hearing of the ether appeal, to apply for a renewal of the injunction upon giving such security as is required by the statute.


text:
    The Atlantic Insurance Company vs. Storrow & Boyd.
    Under a policy of insurance upon goods, against loss by thieves, the underwriter is liable for a loss by thieves who are in no way connected with the ship, whether the robbery is perpetrated by a simple larceny or by open violence, although the master or ship owners may be also liable as common carriers for the loss.
    Whether the insurer is liable for a loss from a simple larceny committed by persons belonging to the ship ? Qjiicare.

    Where the underwriter insures against loss by thieves, and the master or ship owners are also liable to the assured for the loss from a theft, such master or ship owners have no equitable claim upon the underwriter for a contribution to make good the loss. And if the assured receives satisfaction from them, the policy cannot legally be assigned for their benefit, so as to enable them to recover against the underwriter.
    "Where the master or ship owners are liable to the assured for a loss by theft, for which the underwriters arc also liable, if there is an abandonment for a total loss, and the insurer pays the amount of such loss, he is entitled, in equity, to be subrogated to the rights of the assured, as against the master or ship owners. And if the assured cancels the bill of lading, or discharges the claim against the master or ship owners for the loss, after he has obtained judgment against the underwriter, the court of chancery will relieve the latter against the judgment, pro tanto»

      When two or more defendants bring a joint appeal, and fail as to the main object of such appeal, they will be charged with costs, although one of them succeeds in obtaining a modilication of the decree in respect to his own interest merely.
    This was an appeal from a decree of the vice chancellor of the first circuit. The facts of the case, as they appeared from the hill and answer, were as follows : In February, 1831, the complainants insured the defendant Storrow upon a box of specie, laden on board the Charles Carroll, from New-York to Havre; for which specie a bill of lading in the usual form had been signed by the master of the vessel. A day or two after the underwriting of the policy, but after the commencement of the risk, the specie was stolen from the ship while she lay at the wharf in New-York, in the absence of the master and ship’s crew, whereby Storrow claimed a total loss. On the 9tli of March, 1831, he abandoned to the underwriters, who being advised that they were not liable for a loss accruing at the place of lading, declined paying the same. Storrow thereupon commenced a suit upon the policy, in the superior court of the city of New-York, in May term of the same year. In the progress of the suit, and before the trial, the complainants obtained an order from the superior court, against the plaintiff and his assignee, for a discovery on oath, of all receipts, instruments of assignment and of compromise relating to the specie insured, and to the claim of the plaintiff in that suit. Under that order the plaintiff and John I. Boyd, his assignee, produced the original bill of lading, and an absolute assignment from Storrow to Boyd, of the policy of insurance, and of sums of money, interest, benefit and advantage then due, or thereafter to arise. The assignment appeared to be for the sole benefit of Boyd, and was without date. Storrow and Boyd also accompanied these documents by their affidavit, sworn on the 14th of July, 1831, that these were all the papers relating to the insurance and the transfer of the plaintiff’s interest therein. Shortly after this the complainants wrote to Storrow, that being unable, in the suit conducted in his name, to ascertain and establish the fact that he had transferred his right to the bill of lading and recourse against the ship owners, ■they should, in case of a recovery against the company in that suit, expect to receive, on his abandonment, every necessary document to enable the company to enforce their remedy against the ship owners in his name; and should hold him responsible therefor, if the company was made liable for the loss. To this letter Storrow answered, that upon being reimbursed^the amount of specie shipped on board the Charles Carroll, he assigned to the owners all claims against the company; in consequence of which assignment he had no longer any interest in the matter, nor had he any document which could aid in the suit xvhich the company might bring' against the ship owners. On (he day after fhe receipt of this answer, the company again xvrote to Storrow: “ It is necessary that you should fully understand t he situation in xvhich xve stand as to the specie by the Charles Carroll. If you have, either before or after the abandonment, received from the owners of the vessel the amount of the subject insured, we shall look to you, in case of our being subjected to pay a loss on the policy to you or your assignee, for full reimbursement. We have not as yet been able to procure proof of the owners’ having paid the claim to yon, and therefore are unable to protect ourselves from recovery on that ground, although xve hope to do so upon others.” After a recovery was had against the company in the suit prosecuted in the name of Storrow, the complainants wrote to him and the attorney in that suit, stating their readiness to pay the amount of such recovery, provided the bill of lading of the specie should be assigned to them, xvith suitable covenants that the remedy against the ship master or ship1 owners was not impaired ; and that unless that should be done, the complainants would be compelled to seek relief in this court; and in that case would claim the costs to which they should necessarily be subjected. In reply, the attorney in the suit informed the complainants that the bill of lading had “long since been delivered up by Storrow to the master of the Charles Carroll, to be cancelled.” And Storrow also referred the complainants to the attorney in the suit, for air answer. The complainants alleged, in their bill, that until the receipt of those answers, they were ignorant that the bill of lading had been cancelled, or otherwise discharged, but supposed it was still outstanding, and assigned to Boyd. By the anewér of the defendants, it appeared that the bill of lading Was1 in the hands of Boyd, the assignee of the policy, at the com» meucement of the suit; and that the same was delivered up to the master of the ship and cancelled, after the judgment was rendered in that suit.
    The vice chancellor decided that the underwriters were, by the loss and by the abandonment, entitled to be subrogated to the rights of the assured, if they paid the loss. And he made a decree that the complainants be allowed the amount Which the master or ship owners would have been liable for, and that the judgment should only be enforced for the residue, if any thing. He also charged the defendants with the costs of the suit in this court. From the whole of this decree the defendants Boyd and Storrow entered a joint appeal»

      J. Anlhon, for the appellants.
    When the money in question was stolen from on board the Charles Carroll, the owner had a double remedy; against the underwriters, on the express undertaking in their policy, and against the ship owners, by the custom of the realm. The underwriters and ship owners were equally liable, and the one is not more the favorite of the law than the other; each being bound to indemnity. The underwriters might have protected themselves, by paying the loss, and taking, in addition to the abandonment of the specific articles, an assignment of the bill of lading. By so doing, the loss would have been fixed, without relief, on the ship owners, whose only chance for reimbursement would have been the spes recuperandi of the articles stolen. The ship owners, on the other band, were equally entitled to protect themselves, by paying the loss, cancelling the bill of lading, and taking an assignment of the policy ; in which case, after the judgment, and a payment by the underwriters, the sole chance of the latter for reimbursement would have been the spes recuperandi of the specific articles. The abandonment in the one case, and the title accruing to the ship owners by payment in the other, were similar titles to the specific articles merely ; but such title could not, in the one case nor in the other, carry with it any contracts made in relation to the subject matter. To give title to these, an actual assignment was necessary.
    _ The rights of both parties being thus equal, the maxim of law qui prior est tempore potior est jure applies. All the priorities have been secured by the ship owners. They paid the loss promptly, and having thus acquired title to the specific articles, they took an assignment of the policy, for their protection. They abandoned to the underwriters the subject matter, and then sued them on the policy, and obtained judgment. The underwriters, on the other hand, have slumbered throughout. They would not accept the abandonment; they contested their liability in chief; and to the present day have not, by payment of the loss, put themselves in a situation to ask for equitable relief. Vigilanlibus non dormientibus leges subvenient.

    The complainants5 bill is framed upon the supposition that the assured is about to receive, or has received, a double compensation, and that as to such additional sum, he is the trustee of the complainant. The facts in the case do not support this position. This is not a case in which the assured can shave a double compensation, or seek one; but where his name is used pro forma merely, for the indemnity of those who have acquired legal rights by superior vigilance, if this was such a case, the complainants Anight have defended themselves on this ground on the trial at law, the state of the case being the same there as here; and having neglected to do so, the judgment is a conculsive bar, and cannot be opened in equity to let in such a defence. The vice chancellor, therefore, erred in ruling that the judgment was no bar, because, although the party defendants below knew 'the facts forming a defence, it did not appear that the evidence was produced or overruled, and also because this court had concurrent jurisdiction of the matter.
    In every point of view this case is with the defendant. There is equality of rights ; a priority of efforts in securing such rights; a legal title, and that pursued to final judgment at law. While the complainants, on the other hand, stand entirely naked; their contract being broken, and nothing done by them in compliance with its provisions. If the complainants should succeed on the grounds set forth in their bill, it will follow that the clause in the policy against loss by theives is nugatory; inasmuch as there will always be a bill of lading with the legal responsibilities attached to it, and so the underwriters will earn the premium without incurring any risk.
    If the vice chancellor was right in relieving the complainants from the loss arising from their own loches, he was wrong in awarding costs against the defendants. This would operate as a reward for supineness.

      D. Lord, jun. for the respondents.
    By the abandonment, the assured became a trustee, for the insurer, of the spes recuperandi, and also of the collateral remedies'for obtaining compensation for the loss. And the insurer is entitled to have the same transferred to him unimpaired, on payment of the loss. (Phil. on Ins. 464. Hughes, 432,515, 381. 1 Marshall on Ins. 246. Grade v. N. Y. Ins. Co., 8 John. Rep. 245. Randall v. Cochran, 1 Vesey, 98. Goodsall v. Boldero, 9 East, 72. Mason v. Sansbury, 2 Marshall, 794. Clark v. Inhabitants of Blythe, 2 Barn. & Cress. 254.) Especially is the insurer on the cargo entitled to the remedies on the bill of lading, because the insurance presupposes the protection growing out of the carrier’s responsibility.
    The ship owners and the insurer do not stand with equal equities, entitled to bargain for priority with the assured. But on the contrary, the ship owners are under the prior contract and prior liability, and in no privity with the assured as to the policy of insurance; while the underwriters are privies of the assured, as to the bill of lading. The bill of lading does not suppose previous insurance, but the policy does presuppose the liability'of the carrier. Payment of the insurance does not discharge the bill of lading, but a payment by the ship owners on the bill of lading discharges the insurance.
    The right of the insurers to the remedies in the power of the assured is the same as that of a surety, to be substituted in the creditor’s place, as to his remedies for the debt of the principal. See Wright v. Mosely, 11 Vesey, 22, and 2 Vern. 608, as to surety’s right to suit against bail. The assured is obliged to transfer the bill of lading to the insurer, but he is not obliged to transfer the policy to the ship owners; therefore these parties do not stand in equal equities as to the bill of lading and the policy. To allow the carriers or ship owners to protect themselves by recovering under the policy of insurance, is as contrary to the policy of the law as is an insurance of the master’s wages, or against his negligence.
    The depriving of the insurers of the remedy on the bill of lading was such a violation of the duty of' the assured to the insurers as to subject the former, or his assignees, to account for the amount recoverable on the bill of lading, and to make it the duty of the court to restrain them from receiving the loss of which the assured had prevented the underwriters from obtaining reimbursement. (Beardsley v. Root, 11 John. Rep. 464. Hayes v. Ward, 4 John. Ch. Cas. 129.) The right of the insurers related back to the abandonment by the assured, and a transfer by him of the bill of lading, with the policy of insurance to the ship owners, or a trustee for their use, or a release to them, was a transfer or release, with full notice of the insurer’s interest, it was therefore fraudulent as' to the underwriters. (Phil, on Ins. 459.) It is the same thing as a creditor holding collateral securities, and assigning or releasing them after calling upon his debtor for payment.
    The insurers are not deprived of their remedy by not setting up the cancelment of the bill of lading as a defence at law,! The assured and his nominal assignees would not discover the fact at law, nor give the underwriters the means to prove it; but, on the contrary, the fact was studiously concealed in the proceedings upon the order of July, 1831. The assignment of the policy of insurance and bill of lading were made to the defendant J. Boyd, who was neither master nor owner. And the cancelment of the bill of lading was not disclosed till after the judgment; so that there was no defence which the underwriters could have made at law. As the policy and bill of lading were transfered together for one purpose, the transfer must be presumed such as to be consistent with a recovery at law. Therefore it is not tó be presumed, and it was not in fact proved, that the bill of lading was cancelled until after the judgment. The contrary in fact appears from the answer of the defendants. If the ship owner procures an assignment of the policy on goods to a trustee, and the trustee then cancels his bill of lading, and concealing the evidence of that fact from the underwriter, sues for a total loss, it is fraudulently claiming a double compensation as assignee of the policy. The claim of the insurers, upon the cancelment of the bill of lading, even if they could have proved the fact at law, was like a counter-claim, or set-oil, capable of being pursued by the aid of equity for discovery and relief, as well as by defence at law. A debtor, who has lodged collateral securities for his debt, may suffer a recovery at the suit of his creditor, and then file his bill for relief and an account of wasted assets, as well as to set up that defence in the suit at law. In all cases of a mere technical total loss, when an abandonment is not accepted, the assured has in hand the remnants saved. And the underwriter is not bound to set up this in his defence, or be precluded of his right to an account for them. Suppose an abandonment of a ship while abroad, which afterwards arrives in safety, making a gaining voyage; the underwriter might pay the loss, or suffer a recovery against him for the same, without losing his right to the property, or the right of having an account for the proceeds thereof.
   The Chancellor.

The learned commentator on American law appears to suppose that the express provision against loss by thieves, contained in modern policies, does not embrace a loss by simple larceny, such as occurred in this case, but only that kind of theft kvhich is accompanied by violence. (3 Kent’s Com. 2d ed. 303.) So far as relates to losses by thieves, on shipboard, he is certainly suslained in this opinion by some of the ancient writers on the law of insurance. Malyne says, “ If there be thieves on shipboard, among themselves, the master of the ship is to answer for that, and not the insurer; though the words of the policy assures against losses by thieves, yet they are to be intended assailing thieves. (Maly. Lex. Merc., ch. 25, 4th ed., p. 295.) Weskett. also refers to this passage from Malyne, and concurs in the opinion that the insurers are not liable for losses by thieves who are on shipboard. And he adds, “ When a theft has been com= mitted during the night, by land robbers, while the vessel is in port, then it seems the insurer is not bound; such pilferers being different from pirates,” (Weskett on Ins., tit. Theft.) It is evident, however, from what follows this remark, that lie did not intend to apply it to a case where the policy contains an insurance in terms against a loss by thieves. So Hoccus, concludes that the insurer is not liable for goods stolen on board the vessel; that is, by persons rightfully on shipboard. (Roccus on Ins., n. 42.) He says that where a theft is committed by robbers from the shore, while the ship is in port, it would seem that the insurers are not liable; for these robbers differ essentially from pirates. But he adds, “this, however, is_ only true when the insurance is against shipwreck, enemies and pirates; for those robbers not being mentioned, they cannot be considered as included in the insurance.” (Idem, n. 43.) Emerigon also recognizes the distinction between a simple theft and one accompanied by violence from without; and be concludes, that the former does not belong to the class of casualties insured against, because the law presumes it might have been prevented by proper vigilance. (Emerig. Trait Des Assur., Tom. 1, ch. 12, § 29.) I think, however, from, the authorities which he cites, that he only speaks in reference to the general contract against loss by sea risks, and without reference to the express clause, embraced in modern policies, against loss by thieves. The question is not presented here, whether the insurer is liable, under this clause in the policy, for loss from a simple theft by persons belonging to the ship. But he is clearly liable for a loss occasioned by the act of thieves who had no connection with the ship, although the master and ship owners may also be liable as common carriers, on their bill of lading. And it makes no difference in this respect whether the robbery was a simple larceny (furtum) or perpetrated by open violence, denominated latrocMum by the civil law.

It is insisted, however, on the part of the respondents, that, although they, have succeeded in satisfying the superior court that this was a loss for which the underwriters were liable on this policy, it was a case in which the underwriters ship owners were equally liable, and that the equities of both were equal as to the assured. Even if this were so, it does not follow that the assured had a right to receive the amount of the loss from either, and assign over to the one from whom it was received the right to claim the full amount from the other party. It would rather present a case of equitable contribution, in which each should contribute a moiety towards the loss, as in the case of a double insurance. The insurers, however, are not liable to contribute for a loss, for which the master or ship owners are also liable to the assured. The Contract of insurance is a mere contract of indemnity to the assured against such losses as he may actually sustain by reason of any of the perils assured against. And upon an abandonment and payment, or upon a recovery, as for a total loss, the underwriters are entitled to subrogation, at least in equity, to all the rights and remedies which the assured has to the property which is not actually destroyed, including the spes recuperandi from any other source; unless the underwriters have relinquished that right by a stipulation in the policy. On this question, I fully concur with the vice chancellor in the conclusion at which he arrived, and also as to the reasons and weight of authority upon which his decision was based. If it had appeared upon the trial of the suit at law that the assured had received a compensation for his loss from the ship owners, or the master, and that the assignment was made for their benefit merely, to enable them to recover back the amount of the insurance-from the underwriters on the policy, there can be no reasonable doubt that it would have been a good defence at law, at least to the amount thus received. And the result would have been the same, if it had appeared that Boyd, the assignee, had received such compensation after the assignment of the policy to him. The defence would have been equally available, if the underwriters could have shown that StorrdW, or his assignee, had cancelled the bill of lading, or otherwise discharged his claim against the master and ship owners.

The particular manner in which the matter has been managed, probably with a view to defraud the underwriters of their remedy over against the ship owners or master, cannot, in this court, vary the rights and equities of these parties. It was stated, in the letter of Storrow to the underwriters, in the latter part of July previous to the trial, that he assigned to the ship owners all claims against the company, upon being reimbursed by them the amount of the specie shipped on board the Charles Carroll. But before that time the complainants had been furnished with his affidavit, and a copy of the assignment; by which it appeared that he had assigned the policy absolutely to Boyd, and in his own right The letter of the nominal plaintiff could not, therefore, have been used as evidence on the trial to defeat the rights acquired by the assignee, under the previous assignment. Neither could Storrow himself have been a witness to prove the facts stated in his letter; as he was the nominal plaintiff in the suit. Even if the facts stated in that letter were true, therefore, I do not see how the complainants could have availed themselves of them, as a defence on the trial at law.

Whether Boyd was in fact a bona fide assignee of the policy, or only took the assignment under a fraudulent arrangement entered into between the ship owners and Storrow, for the purpose of depriving the underwriters of their legal and equitable right of subrogation, does not appear from the pleadings in this suit. The complainants do not pretend to know how the fact really was; and the defendants are entirely silent on the subject. They simply admit the writing of the letters referred to in the bill; but without saying whether the information contained therein was true or otherwise. In the absence of all proof on this subject, I must therefore presume, from the assignment itself, notwithstanding what was stated in the letters, that there was a bona fide assignment, to Boyd, who had a legal right to recover upon the policy, by being substituted in the place of the assignor. But by giving up the bill of lading to the master to be cancelled, after the judgment was obtained, the complainants were deprived of their remedy over against the ship owners; and standing merely in the character of sureties, to indemnify the assured against actual loss, the judgment must, in equity, be considered as satisfied pro tanto. The vice chancellor has therefore very properly directed that the amount which the master and ship owners would have been liable for upon the bill of ladings should be deducted from the amount of the judgment; instead of decreeing a perpetual injunction against the collection of the whole debt and costs.

The conduct of 3torrow in this matter has been such as to leave him without any claim to costs against the complainants. But as it does not appear, except from the statement in his own letter, which was not before the court as evidence upon the hearing upon bill and answer, that he was actually a party to a fraudulent arrangement with the ship owners to deprive the complainants of their rights, although such was probably the fact, I think the vice chancellor should not have charged him with the complainant’s costs. The decree must therefore be modified in that respect. As to Boyd, he was fully apprised of the complainants’ equitable rights, by what took place in the progress of the suit in the superior court; and having delivered up the bill of lading in fraud of those rights, he was properly charged with the costs necessarily incurred by the complainants in this court.

As both of the defendants have concurred in a joint appeal from the whole decree, and as they have substantially failed as to the whole, there is no good reason for excusing either from the payment of the costs of the appeal.


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    Mapes vs. Coffin and others; Davis & Brooks vs. Coffin, Mapes and others.
    Where a testator, previous to the revised statutes, died, leaving personal property insured against loss by fire, and M., a creditor, recovered a judgment against the executors, and levied his execution on the property in their hands, which property was afterwards destroyed by fire; Held, that M. was entitled to priority of payment out of the insurance money, over a judgment in favor of other creditors, subsequently recovered against the executors.
    An appeal from the final decree only, does not bring before the.appellate court, for review, a question which has been definitively adjudicated and disposed of, by an interlocutory decree or order, previous to such final .decree,
    Where the appellant does not succeed in reversing any part of the decree the respondent has not brought a cross appeal, the appellate court fcannot reverse or modify the decree, in a part thereof which is erroneous as to such respondents.
    The bill in the first of the above causes was filed against She executors of Amos Coffin, deceased, and the Washington Insurance Company, to obtain payment of a judgment debt, out of the amount due upon a policy of insurance upon the goods of A. Coffin"; which goods were destroyed by fire, after the complainants’ execution had been levied thereon. The complainants in the second suit also sought payment of a judgment recovered by them against the executors of A. Coffin, subsequent to the fire. Both causes were referred to the vice chancellor of the fourth circuit, to be heard together, in September, 1830, he made a decree, declaring, among other things, that Mapes had a lien upon the policy and the money due thereon, for the satisfaction of his judgment of $1585,35, and interest; and that he was entitled to priority in payment, over the judgment of Davis and Brooks, which was also a lien. A feigned issue was thereupon awarded, to ascertain the liability of the insurance company, and the amount of the loss. The feigned issue was decided against the company; and the amount of the loss for which the company was found to be liable upon the policy, was $1531,35. This sum, being less than the amount of the judgment of Mapes, the vice chancellor decreed to be paid to him; and directed the bill of Davis and Brooks to be dismissed, but without costs. From this last decree, except the part thereof which excused them from the payment of costs, the complainants in the last suit •appealed.

      Blunt, for the appellants.

      C. Edwards, for the respondent Mapes.

      R. L. Shieffelin, for the Insurance Company.
   The Chancellor.

The complainant, Mapes, having obtained the first judgment against the personal representatives, and levied his execution upon the goods of the testator in their hands, was entitled to a priority in payment •; the money due upon, the policy?" being legal and not equitable assets, and t.he testator having died previous to the revised statutes. And the amount of the assets being less than the sum which was due "upon the judgment of Mapes, the bill of the appellants was properly dismissed. The merits of the case are therefore clearly with the respondents.

Again; the counsel for the respondents are right in supposing that the question as to the priority of Mapes’ claim i.s not properly before me on this appeal. That question was .distinctly decided, and decreed against the appellants, in September, 1830; and if they were not satisfied with the decision, they should have appealed from that decree. An appeal from the final decree only, cannot bring up a question which had been definitively adjudicated and disposed of previous to the time of making such decree.

There is no pretence of claim for costs, in favor of Davis and Brooks, against the insurance company. If any costs were to be given, the claim for them would more properly have been made on the other side.

The decree appealed from is therefore affirmed, with costs to Mapes, apd the insurance company, who are the only defendants who have appeared on the appeal. Neither of these parties having brought a cross appeal, I cannot alter the decree of the vice chancellor, so as to give them costs in the-original suit, as against the appellants,


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    Bates vs. Delavan.
    Á cross-bill in the same court, or an injunction bill to stay the proceedings in a suit pending, or to obtain relief against a judgment recovered in the same circuit or district court of the United States, between the same parties or their representatives, is not an original suit or proceeding, within the meaning of that provision of the judiciary act of the United States which prohibits the bringing of a civil suit before a circuit or district court,1 by original process, against an inhabitant of the United States, in any other district than that of which he is an inhabitant, or in which he is found at the time of serving the writ.
    Where a circuit court of the United States has jurisdiction of a cause, the court of chancery of a state will not inquire into the regularity of its proceedings as to mere matters of practice, in a new suit founded upon the decree of such circuit court.
    Where a citizen of New-York brought a suit at law in the circuit court of the United States for the district of Vermont, upon two promissory notes' given for a part of the consideration money on the purchase of land ; and' the defendant thereupon filed a bill in equity, in the same court, not only' as a defence to the suit upon the notes, but also to set aside the sale, and to have the purchase money which he had already paid refunded, and to have another note delivered up ; and procured the subpoena to be served on the attorney of the plaintiff in the suit at law, who was then out of the jurisdiction of the court and refused to appear to the suit in equity ; and who had also withdrawn,the suit upon the notes, as soon as the subpoena had been served on his attorney; and the complainant in the equity suit proceeded to take his bill as confessed against the defendant therein, for want of appearance upon such substituted service, and thereupon obtained a decree for the delivering up and cancelling of the notes, and also for the repayment of the purchase money which had been paid on the sale; Held, that the circuit court had no jurisdiction over the person of the defendant in the equity suit, so as to authorize such court to make a personal decree against him, for the repayment of the purchase money received on the sale of the land, or for the delivering up of the third note, upon which no suit had been commenced by him in the circuit court.
    By the lex lad rd sites, property, belonging to a person who is not within the' jurisdiction of the court in which a suit is brought, may be made subject to the jurisdiction of such court, so as to render the judgment or decree binding, as a proceeding in rem, against the property which is within such jurisdiction ; but if the defendant, or party proceeded against, does not reside within the jurisdiction of the state or country where the suit is brought, and is not served with process ana does not appear, the judgment or decree in such suit is purely local; and it has no extra-territorial cflbct or validity, in personam, against the defendant.
    The final decree of a court of equity may be given in evidence, in another suit, although such decree has not been formally enrolledv

      A court of equity d'bes not decree the specific performance of a contract" fóz* the sale of land, if the vendor cannot make a good title, although the con-" tract contains no agreement for covenants of warranty; except in those cases where the vendee assumes the risk of the title, or agrees to take’ such a title as the vendor is able te give. But where the sale has been-" consummated by a conveyance, without any covenants of warranty as to the title, and there has been- neither fraud nor misrepresentation on the part of the vendor, the vendee has no remedy to recover back his purchase money, upon a subsequent failure of title.
    The court will not decree the performance of a contract for the sale of land, where there is a failure of title as- to an undivided portion thereof, which the vendee has not agreed to take at his own risk. But if the vendor has executed a conveyance of the land, with warranty, the court of chancery will-not rescind the sale, but will leave the grantee to his-legal-remedy upon the covenants in his deed!
    The facts in this case, as they appeared from the pleadings and documentary evidence, were- as follows : In July,. 1824, W. G. Hooker and D. James, as the guardians of the-minor heirs of L.- Case, deceased, and by virtue of a supposed authority derived from an order of the supreme court of Vermont, executed to the defendant, Delavan, a conveyance of all the right and title of such minor heirs to certain premises-in Middlebury. In August, 1825, the defendant contracted-with Bates, the complainant, to convey to him the defendant’s title to- these premises, for $2250; of which sum $750; was to be paid upon the execution of the deed; and the residue in two, three, and four years»- The defendant waste satisfy the claim of Nathan Wood for repairs upon the premises, and" any claim- that the son and heir of L. Case might have on the property. In September,. 1825, the complainant paid to the defendant $750, and gave to him three promissory notes,, of $500 each, in full for the purchase money. And the defendant gave to the complainant a quit-claim deed of all his right, title, interest, and demand, in and to the-'premises, with a special covenant therein to warrant and defend the premises- against' any claim and demand of L. Case,, son and heir of L. Case, deceased, and also against any claim in favor of Nathan Wood, on account of the repairs done to the premises» L. Case subsequently commenced a suit in ejectment, against Bate's, for the recovery of the premises, and-obtained a judgment in the supreme court of Vermont for nine ^fourteenths of the lot, on the ground that the order under, which'James and Hooker attempted to convey the premises was void. The court decided that the other five fourteenths of the premises belonged to the infant son of James, by descent from some of the other heirs of L. Case, who were dead at the time of the conveyance from Delavan. During the pendency of that suit, Delavan commenced suits against Bates, on two of the notes, in the circuit court of the United States for the district of Vermont; which suits were pending and undetermined at the time of the final decision of the supreme court of Vermont in the ejectment suit. Soon after the decision in the ejectment suit, Bates filed a bill against Delavan, in the same court in which the suits on the two notes were pending, to have the contract for the purchase of the premises rescinded, and to have all the notes given up ; and also to have the $750, which was paid down, refunded. The subpoena upon that bill was returnable at May term, 1831, and was served upon P. Starr, the attorney for Delavan in the suits on the notesDelavan residing in the state of New-York. Starr refused to appear to the bill, and withdrew the suits upon the notes. But Bates proceeded upon his bill, and Delavan not appearing, it was taken as confessed; and the circuit court thereupon made a decree that Delavan should, within- sixty days, repay the $750, and interest from the date of the deed, and should deliver up all the notes to be cancelled. The complainant thereupon filed his bill in this court, and prayed for the same relief specifically, and also for general relief. The defendant, by his answer, insisted that the circuit court of the United States had no jurisdiction of the case; he being at the time a resident of this state, and out of the jurisdiction-of that court. The defendant also insisted that the complanant had a perfect remedy at law upon his covenants of warranty ; that the $750 paid down was less than the purchase money of that part of the premises which did not belong to L. Case, the younger; and that he was only bound to relinquish nine fourteenths of the whole purchase money. But the defendant offered to deliver up all of the notes, under the direction of this court, to be cancelled. He also stated, in his answer, that he had offered to the complainant, previous to the' filing of the bill in this cause, to deliver up the three notes and pay the costs incurred in the suits in Vermont, if the com-complainant would reconvey his interest in the nine four-teenths of the premises, with covenants against his own acta The cause was heard upon the pleadings and upon documentary proofs.

      É. B. Bales, the complainant,
    in person, insisted that the' covenant in the defendant’s deed was general as to the premises, extending to the whole, and was only limited as to the individual and that a recovery of part of the premises by that individual laid the foundation for rescinding the whole contract, as much as if the covenant had been general in all respects; that as the premises consisted of one small lot and á dwelling house and barn, designed for a village residence, the" failure of the title to the undivided nine fourteenths of the premises defeated the object of the purchaser; and that,.without inquiry as to the title to the residue, the contract ought to be rescinded, agreeably to the principles established in' courts of equity. To this point he cited Morris v. Phelps, (5-Johns. Rep. 49,) King v. Bardeau, (6 Johns. Ch. 38,) Nicholson v. Stapleton, (13 Ves. 427,) Sugden's Law of Vendors, 183 to 192, Roffey v. Shallcross, (4 Mad. R. 227,) Hepburn v. Dun-lop, (3 Peters' Con. R. 540,) 1 Wheaton, 179, Brazier v. Gratz, (6 Wheaton, 528,) 3 Peters’ Con. R. 523, Reed v. Bank of New-burgh, (1 Paige, 215.)
    To show that the court ought to enforce the decretal order of the circuit court of the- United States, the same not being void for want of jurisdiction, he cited 2 Har. Chan. 172, 3 Brown's Ch. Rep. 12, and Logan v. Patrick, (5 Cranch, 288.)
    He also insisted that this case was not analogous to the cases in courts of law where, on a part failure of title, damages are apportioned; as the complainant in this case came into the court of chancery not only to recover the money paid, but to have further proceedings enjoined, and the notes given up and cancelled.

      Jl. Van Veehten Sf J. King, for the defendant,
    contended, if the complainant relied upon the interlocutory order of the circuit court of the United States for the district of Vermont, that the suit there was improperly.commenced, by service of subpoena upon Starr, the attorney; that the suit was not prosecuted to a final decree ; and that the interlocutory order proved to have been entered in that suit, could not be made the foundation of a suit in this conrt.
    They also insisted that the frame of the complainant’s bill admitted the position thus taken, because the complainant had opened the whole matter by his bill; that if he had a perfect decree in the circuit court, he had waived his rights .under it, by putting his claim in the bill upon the original covenant of warranty in the deed; that this court was therefore to judge of the case upon its original merits, in the same manner as if no proceedings had been instituted in the circuit court of the United States, against the defendant in this suit; and that if'there had been a final decree in the circuit court, it would have been 'merely a foreign judgment, not obligatory in this state.
    They insisted, further, that the covenant in the deed was limited to the adverse claims of Loyal Case and Nathan Wood, and that damages could be claimed only for that part of the premises which had been recovered from the complainant ; that the sale could not be rescinded altogether, even in a court of equity; and that if the complainant had any remedy on the covenants of warranty in the deed, he had a perfect remedy in a court of common law.
   The Chancellor.

The allegations in the bill as to the giving up the possession of the premises, after the judgment of the supreme court of Vermont in the ejectment suit, and as to the alleged repairs ofiset against mesne profits, are not admitted by the answer, or proved; they must, therefore, be laid out of question in the decision of this cause. Some of the allegations in the answer, not responsive to the bill, must also be rejected for wapt of proof. The objection to the decree of the circuit court of the United States, that it is interlocutory merely, and-not final, is not sustained by the facts. The decree purports to dispose of every question in the cause, including the costs of suit, and is therefore a final decree. The direction to prepare a formal decree, in conformity with the decision of the court, I presume, means nothing more than that the decree shall be drawn up in the proper form, to be signed by the judges, and enrolled. But a formal enrolment of a decree in equity is not absolutely necessary to its validity.as a matter of evidence. (Winans v. Dunham, 5 Wend. Rep. 47.) And, in the present case, the informality in the mode of exemplifying the decree of the circuit court of the United States is waived by the written stipulation of the defendant’s solicitor. Tire important question in relation to the decree, therefore, is, how far it is binding upon the defendant, who was not within the jurisdiction of the court, and who -did not appear in the cause.

By the 11th section of the judiciary act of 1789, (1 Laws of U. S. 55,) it is provided that no civil suit shall be brought ■before a circuit or district court, against an inhabitant of the United States, by any original process in any other district than that whereof he is an inhabitant, or in which he shall be found at the time of serving the writ. It has, however, been frequently decided, by the courts of the United States, that cross-bills, and injunction, bills to stay proceedings, or to obtain relief against suits or judgments in the same court, between the same parties or their representatives, are not original suits within the meaning of this section of the judiciary act. (See Conk. Treat. 83; Dunlap v. Stetson 4 Mason’s Rep. 349.) The same principle was distinctly recognized by this court in Rogers v. Rogers, (1 Paige’s Rep. 183,) where the defendant, in an injunction bill to restrain proceedings in a suit at law in the state court, was not permitted to remove the cause into the circuit court of the United States as an original suit. So far as related to the two notes in the hands of the attorney of Delavan for collection, and on which suits were actually pending in the circuit court of the United States at the time of filing the bill in that court, and the service of the subpoena on such attorney, the bill in equity might be properly considered as a proceeding in rem, and as a defence to the suits which had been commenced on the law side of the court.

As to the regularity of the substituted service of the subpoena upon the attorney without a previous order of the court, it is improper for this court to express an opinion. Neither is it important to the decision of this cause, that I should inquire how far the decree of the circuit court is binding and conclusive as to those two notes, as the defendant, in his answer to the present bill, offers to deliver up all the notes, to be can-celled, under the direction of this court.

The bill in the circuit court of the United States, so far as it sought the repayment of the $750 which was paid at the time of the execution of the deed, and to have the third note of $500, on which no suit had been commenced, delivered up and cancelled, was not in the nature of a defence to the suits pending in that court, but was clearly an original bill. And as the defendant resided in this state, and was not served with process, and refused to appear and litigate his rights upon that bill, the circuit court had no jurisdiction to make a decree against him in relation to those matters. The part of the decree, therefore, which directs the repayment of the $750, with interest, and the delivering up of the third note to be cancelled, will not be enforced by this court, as a decree in personan against the defendant. By the lex loci rel sitae, property, belonging to a person who is not within the jurisdiction of a court of law, or equity, may be made subject to the jurisdiction of the court, so as to render the judgment or -decree of such court binding, as a proceeding in rem, against the property which is within its jurisdiction. But. where the defendant, or party proceeded against, does not reside in the state or country where the suit is brought, and is not served with process and does not appear, the judgment or decree in such suit will not be allowed to operate in personam, against such party, in the courts of any other state. This question appears to have arisen and been decided in the same way, in nearly half of the states of the union. And 1 am not aware that the courts of any state have held such a proceeding conclusive upon the rights of a party proceeded against, who has not appeared or otherwise submitted his rights to the decision of the court in which such proceedings were instituted. (See 1 New Hamp. R. 242 ; 6 Pick. Mass. R. 232; 4 Conn. R. 380; 2 Verm. Rep. 263 ; 5 John. Rep. 37; 2 Dallas’ Penn. Rep. 261; 2 Leigh’s Virg. Rep. 172; 1 Den. N. C. Rep. 187; 1 Bailey’s S. C. Rep. 242; Hard. Kent. R. 413; 2 Verger’s Tenn. Rep. 484; 6 Ham. Ohio Rep. 44,117 ; 2 Blackf. Indi. Rep. 108; 1 Breese’s Ill. Rep. 259; 2 Stewart’s Alab. Rep. 280, 399, 445; Missouri Rep. 517, 529 ; 3 Mason’s C. C. Rep. 251.) Judge Story, in his very learned and valuable commentary on the subject of the conflict of the laws, in considering the extra-territorial effect of a judgment or decree in personam against a non-resident, by a mere citation vils et modis, where the party proceeded against is not within the jurisdiction and does not appear, also arrives at the conclusion that its effect is purely local, and is elsewhere to be held and considered as a mere nullity, so far as the personal liability of such party is concerned. (Story’s Confl. of Laws, 458, § 546. Idem, 508, § 609.) In deciding upon the .merits of this case, therefore, I shall lay the decree of the circuit court of the United States for the district of Vermont entirely out of view, as being in no way binding upon the defendant personally, as to the $750 and the interest thereon, or as to the last of the $500 notes. And I shall proceed .to dispose of the case in the same manner as if that decree had never •been made.

As a general rule, a court of equity will not decree the specific performance of a contract of sale, if the vendor cannot make a good title, although the contract has made no provision as to covenants of warranty to be inserted in the conveyance. An exception to that rule, however, exists where, by the contract of sale, the vendee expressly assumes the risk as to the title, or agrees to take such a title as the vendor is able to give. It does not appear to be clearly settled how far, or in what cases, this court will interfere to rescind a contract of sale, after it has been consummated by the execution of the conveyance, without any covenants of warranty, where there is no fraud, but where both parlies were under a mistake as to the title of the vendor. By the civil law, an action of redhibition, to rescind a sale and to compel the vendor to take back the property and restore the purchase meney, could be brought by the vendee, wherever there was error in the essentials of the agreement, although both parties were ignorant of the defect which rendered the property sold unavailable to the purchaser for the purposes for which it was intended. This principle of the civil law appears to have been followed in the courts of some of our sister states ; and the case of Hitchcock v. Giddings, (4 Price's Rep. 135,) must have been decided, by Chief Baron Richards, on the same principle. I agree, however, with the learned commentator on American law, that the weight of authority, both in this state and in England, is against this- principle, so far as a mere failure of title is concerned; and that the vendee, who has consummated his agreement by taking a conveyance of the property, "must be limited to the rights which he has derived under the covenants therein, if lie lias taken the precaution to secure himself by covenants of warranty as to the title. And where he has neglected to take such covenants, and there is ao fraud or misrepresentation in the casé, he has no remedy to recover.back the purchase money, upon a subsequent failure of title. (2 Kents Com., 2d ed. 473.) In the present case, the .fact that the complainant has taken a mere quit-claim deed of the right and title of the defendant in the premises, with special covenants against the'claims of two particular individuals only, authorizes the conclusion that it was understood and agreed between the parties that the vendee should assume the risk of the title, in regard to the claims of all other persons.

The failure of the title as to an undivided portion of the premises, by the successful assertion of a claim against which the defendant had agreed to indemnify the complainant, would have been sufficient to enable the latter to resist the making of a decree for a specific performance, upon a bill filed by the vendor. But it does not follow from this that the complainant may rescind the whole contract, which has been in -part consummated, by the execution of the conveyance and the payment of a part of the purchase money. There are many cases in which the court will not lend its aid to compel a specific performance of an executory agreement, in which it would not feel itself authorized to interfere, by decreeing that an executed contract should be rescinded Where a vendor has agreed to convey the whole premises, and it is found that he can only perform his agreement as to an undivided part thereof, the court will not compel the purchaser to accept a partial performance, when it is evident that he will be injured by the partial failure. The party who is unable to perform his agreement in full, has, in general, no equitable claim to the interposition of the court in his behalf, if the adverse party prefers to rescind the contract in loto. But a vendor, who has only covenanted to warrant or indemnify the purchaser against a claim upon a part of the premises, can perform his covenant, by paying such indemnity, according to the spirit of the agreement contained in the conveyance. In such a case, if the vendee wishes to secure to himself the right to rescind the whole contract, upon the breach of the covenant of warranty as to a part only, he should have a special provision to that effect inserted in the deed. The complainant, therefore, is not entitled to a decree for a return of the purchase money which has been paid; the amount of the notes being more than sufficient to cover the nine fourteenths of the premises as to which the covenant of warranty extended. But as the defendant has offered to give up the notes to be cancelled, under the direction of the court, a decree must be entered to that effect, upon the complainant’s releasing all claim against the defendant on the covenants of warranty contained in the deed, and releasing to the defendant the interest, if any, which he acquired in the nine fourteenths, under the original, conveyance from the defendants.

The defendant, having succeeded as to the only matter which was really in controversy between the parties in this cause, is entitled to the costs of his defence.

        See Simpson v. Hawkins, 1 Dana’s Kent. Rep. 305.


author: The Chancellor,

text:
    Jenkins vs. Hinman.
    Where a cause is brought to a hearing before a vice chancellor, upon pleadings and proofs, and there is an appeal from the whole decree, or decretal order, made on such hearing, the cause is before the chancellor until the decision upon the appeal; and an application to appoint a receiver in the cause may be made to the chancellor. It is otherwise where there ia an appeal from the decision of a vice chancellor as to a collateral matter not embracing the whole cause.
    The fact that the vice chancellor, before whom a cause is pending, has been the solicitor or counsel for one of the parties therein, is sufficient to authorize the making of an application directly to the chancellor, upon an interlocutory matter.
    Upon a bill to redeem, where the complainant is in possession of the premises, which arc an ample security for the amount admitted by him to be due, and the defendant insists that ho is the absolute owner of the premises, and that the complainant is not entitled to redeem, the court will not order the amount admitted to be due to be paid into court, nor appoint a receiver of the rents and profits of the premises pending the litigation, if the insolvency of the complainant is fully denied.
    This was an application for the appointment of a receiver in a suit originally commenced before the vice chancellor of the fifth circuit. The cause was heard upon the merits before the late vice chancellor of that circuit; who declined making a. final decree in favor of either party, but awarded a feigned issue. From this order both parties appealed to the chancellor ; each insisting that a final decree should have been made in his favor, without an issue.

      T. Jenkins, the complainant in person, opposed the application ; and among other grounds of objection, he insisted that it should have been made to the vice chancellor of the fifth circuit.

      M. T. Reynolds, for the defendant, contended that the whole cause was before the chancellor, by the appeals, and that the application was properly made to him. It also appeared that the present vice chancellor of the fifth circuit was formerly solicitor and counsel for the complainant in this suit-
   The Chancellor,

The fact that the present vice chancellor of the fifth circuit was, before his appointment to that office, the solicitor and counsel for the complainant, renders him legally incompetent to act as a judge in this matter, except by the consent of both parties. That circumstance alone would be sufficient to authorize the chancellor to hear and decide tiiis application, under the provisions of the act relative to vacancies and disabilities in the office of vice chancellor. (Laws of 1834, p. 1, § 4.) Independent of this statutory provision, however, the chancellor is authorized to hear this application. By these appeals, the whole eause appears to be brought before him; and after the decision upon the appeals, if the chancellor does" not make a final decree in favor of either party, the whole cause will still remain before him for a decision upon the equity reserved, unless he shall think proper to remit the cause to the vice chancellor. (See 2 R. S. 178, § 63.) The case is otherwise, where the appeal is from a decision of a vice chancellor upon some collateral matter not embracing the whole suit.

Upon the merits of this application, however, the defendant must fail. The affidavits on the part of the complainant show that the farm is an ample security for the amount admitted to be due, if the defendant has only a mortgage interest therein. And the insolvency of the complainant being denied, on oath, there is no good reason for the appointment of a receiver to divest him of his possession, pending the litigation. The defendant claims the absolute title to the land, and repudiates the idea that any thing is due to him as the assignee of a mere mortgage security. He has, therefore, no right to ask for an order to pay the mortgage money into court.

The application to appoint a receiver is denied, with costs.