source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Wilkinson, survivor, &c. vs. Parish and others.
    December 18.
    A suit in chancery may be revived by a surviving complainant against the infant representatives of a deceased complainant, by petition and the service of an order, under the general provisions of the revised statutes.
    The petition to revive must contain substantially the same facts which are required to be set forth in a bill of revivor, and must also state that eighty days have elapsed since the-death of the deceased complainant, and that his representatives have not caused themselves to be made complainants ; and a copy of the order must be served upon the parties against whom the revival is sought.
    If thfe representatives of the deceased party neglect to appear and answer the petition or to disclaim, the order that the suit stand revived becomes absolute against them, by default, and a formal appearance may be entered for them.
    No decree or order of revival can be made against an infant, by default, under the provisions of the revised statutes ; but if the infant neglects to appear and procure the appointment of a guardian, the same steps for the appointment of a guardian ad litem must be taken as in other cases where the infant neglects to appear.
    If the parties against whom a suit is sought to be revived are beyond the jurisdiction of the Court, or cannot be found to be served with the order, a formal bill of revivor must be filed, and the like proceedings had, to obtain their appearance, as are required in the case of absent, concealed or nonresident defendants.
    Partition suits are embraced within the general provisions of the revised statutes relative to the revival of suits; but if a suit for partition is revived against an infant heir, the guardian ad litem of the infant must give the same security which would have been required if the infant had been one of the original parties to the suit.
    If the husband dies pending a partition suit to which his wife is not made a party, the suit can only be revived or continued against the widow, as to her right of dower in the premises, by an original bill in the nature of a bill of revivor and supplement.
    The purchaser of premises sold"under a decree for partition, takes the same subject to the right of dower of the wife of one of the tenants in common, unless the wife was a party to the suit; but where an actual partition is made, the wife’s dower will attach upon the portion of the premises allotted to her husband.
    The original complainants in this cause, Wilkinson & Blood, filed their bill for the partition of certain lands held by them as tenants in common with the defendants and with each other. Pending the suit, and after the bill had been taken as confessed against most of the defendants, Blood died intestate, leaving a widow and several children, some of which children were infants.

      j jyl0arjes^

    jn behalf of Wilkinson, the surviving complainant, now presented a petition stating these facts, and praying that the suit might be revived against the widow and children of the decedent; and that an order might be entered, according to the statute, making them defendants. The petitioner also prayed that the general guardian of the infant children of Blood might be appointed their guardian ad litem in this suit, upon giving the requisite security.
   The Chancellor.

Several questions are presented for the decision of the court upon this petition which will require consideration. As some of the heirs of Blood, against whom it is now sought to revive this suit, are infants, the first question which presents itself is whether a suit in this court can be revived against infants by petition and order, under the general provisions of the revised statutes which authorize the revival of suits in chancery by that summary mode of proceeding. (2 R. S. 184, § 109 to 121.) In a case which was before the court for the correction of errors, in 1808, (Rogers v. Cruger, 7 John. R. 613,) Mr. Justice Van Ness expressed a very decided opinion that a suit could not be revived against infants, by this mode of proceeding, under the statute which was then in force. And this court has also intimated that a bill of revivor might perhaps be necessary where the representatives of a deceased party were infants, or where they could not be found to be served with a copy of the order of revival. But upon a further examination of the provisions of the revised statutes relative to the revival of suits in this court by petition and order, I can see no valid objection to applying those provisions to the case of infants, provided the same precautions are taken to protect the rights of such infants as are adopted by the court of chancery in other cases. The former statute only required the order of revival to be served upon the clerk in court of the deceased party ; and the infants therefore had no opportunity to appear by their guardian and protect their rights. In the case of Rogers v. Cruger, the suit was révived upon such an ex parte proceeding, and' the register of the court was appointed the guardian ad litem, without giving the infants, or their friends, any opportunity to procure the appointment of a guardian who understood the infants’ rights. It is now settled that the party who seeks to revive a suit by this summary mode of proceeding under the statute, must proceed by petition, which is a substitute for the bill of revivor, and contains the substance of what is required to be stated in such a bill; although this petition may be very short. (3 Paige’s Rep. 314, 363.) And the revised statutes require k service of the order on the same parties upon whom the subpoena would have to be served if a bill of revivor was filed. Such parties are also allowed to appear and answer the petition, and to object to the complainant’s right to revive the suit against them. If an adult, who is served with a copy of-the order, neglects to appear and answer the petition, or to disclaim, the order becomes absolute against him by his default, and a formal appearance may be entered for him in the suit. But as no decree or order affecting the rights of an infant can become absolute against him merely by a default, except in those cases where a statute has in express terms made the proceedings conclusive against him, or where it is evident that the legislature intended to preclude the rights of infants as well as adults, a decree or order of revival cannot • be rendered against an infant representative of the deceased party, by default, under these statutory provisions. If the infant representative does not, within the time prescribed by the statute, procure a guardian ad litem to be appointed, and put in an answer to the petition, the party seeking to revive the suit against such infant must proceed as in other cases to have a proper guardian appointed to appear and protect his rights. In this manner, if the infant is within the jurisdiction of the court so as to be served with a copy of the order, the' suit can be revived without the expense of a more formal proceeding by bill. But as the statute requires a service of the order of revival upon the representatives against whom the suit is sought to be revived, it is evident that this mode of proceeding cannot be adopted where the representatives of the deceased party, whether infants or adults, are out of the jurisdiction of the court or where they cannot be found to be served with the order. In such cases, the only regular way of reviving the suit is" by a formal bill of revivor, and by advertising under the provisions of the statute relative to absentees.

The next question.to be considered is whether a partition suit can be revived under these general provisions of the revised statutes. As a petition under the statute is the substitute for a bill of revivor, containing .all that is necessary to show thepetitioner’s right to revive, there can be no good reason why a partition suit, as well as other suits in this court, should not be revived jn this manner. The sixth and seventh sections of another title of the revised statutes, which provides for the revival of suits after an abatement thereof by death, marriage, or otherwise, (2 R. 8. 387,) has been referred to, however, as throwing a shade of doubt on this question. But upon a particular examination of those sections, I am satisfied they were intended to apply to proceedings in courts of common law only, to which all the other provisions of that title seem to be confined. The general provisions of the revised statutes relative to the revival of suits in this court, are broad enough to embrace suits of every description here ; and it is" therefore not probable that the legislature intended to adopt an anomalous practice in relation to the revival of partition suits in the court of chancery. Besides, these two sections are not imperative, so as to require the revival of partition suits only in the mode there pointed out, although in the common law courts there is probably no other legal mode of proceeding. But as suits in this court may be revived by petition and order, and also by bill of revivor, those sections, even if they are applicable to partition suits pending here, do not preclude the party from resorting to either of these modes of reviving and continuing the proceedings. I have no doubt, therefore, that the proper way to revive a partition suit in chancery is by petition and order, bill of revivor, or by a bill of revivor and supplement, as in ordinary suits in this court. If such a suit, however, is revived against- an infant heir of a deceased party,- the guardian ad litem of such infant should give-security, in the same manner as if the infant was one of the original parties to the suit.

There is one objection to the granting of an order of revival in this case against the children of Blood, which may probably be obviated by an amendment of the petition. The representatives of a deceased complainant have eighty days after his death to cause themselves to be made complainants in the suit, before the surviving complainant can apply to revive the suit against them as defendants. (2 R. S. 185, § 117.) And it does not appear by this petition that eighty days have elapsed since the abatement of this suit by the death of Blood. But there is a more serious difficulty existing as to the revival of this suit against the widow of the deceased party, by a petition and order, under the statute. In Douglass v. Sherman, (2 Paige's Rep. 358,) this court decided that the right to revive a suit by petition and order, only extended to those cases where, by the former practice, the proceedings could have been revived and continued by a simple bill of revivor. In this case, the children of Blood take their interest in the premises as the representatives of their father, and by descent from him; a simple bill of revivor would therefore have been sufficient to bring their interests before the court. But the widow does not take her dower as the representative of the husband, or by descent from him. She takes it by a title' which is prior in point of time to the commencement of this suit, and which cannot be affected by any act of the husband, or by any proceedings in a suit to which she was not a party. By the marriage, the wife becomes entitled to a life estate in one third of the real estate of the husband, after his death, provided she survives him. She is therefore in the situation of a contingent remainder-man whose estate becomes vested by the death of a party to the suit upon whose death without issue the contingency depends. In such a case, the suit cannot be revived, either in favor of or against the remainder-roan, by a bill of revivor merely; but the party seeking to revive the suit, or to have the benefit of the former proceedings by a continuance thereof, must file an original bill in the nature of a-bill of revivor and supplement. (See Mitford's Pl., 4 Lond, ed. 72.) In the case of Wilde v. Jenkins, which came before this court in March last, upon an application to overrule, as frivolous, a demurrer of the widow to a bill of revivor filed against her, it was decided that the wife’s right to dower could not be affected by a suit against her husband to which she was not a party; and that such a suit could not be continued against her, upon the death of the husband, by a mere bill of revivor.In this case, it is proper that the widow-should be a party to this proceeding, so that her dower in the premises may be assigned to her in severalty, out of those portions of the premises which shall be set off to the children of Blood respectively ; or, if a sale of the premises shall become necessary, that the purchaser may obtain a perfect title to the property, discharged of this claim of dower. The proper mode of effecting this object, however, is for the petitioner to file an original bill, in the nature of a bill of revivor and supplement, to have the benefit of the former proceedings in this suit as against the original defendants and against the heirs at law of Blood, and to have the proper relief in relation to the assignment of the widow’s dower in the premises.

As a feme covert cannot be bound by a decree against her husband in a partition suit to which she is not a party, it seems to be proper, in all cases where a sale of the premises will probably be necessary, that the wife should be joined with her husband as a party in the suit, so that the purchaser’s interest in the premises may not be charged with the. incumbrance of her contingent claim of dower. But where an actual partition of the premises can be made, it is not material that the wife, who has only an inchoate right of dower in her husband’s undivided interest therein, should be made a party; as her dower will attach upon that part of the premises which shall be set off to him in severalty.

This petition must be dismissed ; but without prejudice to the right of the petitioner to proceed by bill.


text:
    Keirsted and others vs. Avery and others.
    Where a deed was delivered as an escrow, to be delivered to the grantee upon the payment of a sum of money due from him to the grantor, and ona of the heirs at law of the grantor, after the death of the latter, settled with the grantee and delivered the deed to him, which was thereupon duly re* corded, it was held to be a valid delivery as to such heir.
    The lien of a judgment creditor upon the lands of his debtor is subject to all equities which existed in favor of third persons against such lands at the time of the recovery of the judgment.
    The court of chancery will protect the equitable rights of third persons against the legal lien of a judgment, and will limit such lien to the actual interest which the judgment debtor has in the estate.
    The bill in this case was filed to set aside a sheriff’s sale of a lot of land called the Wynkoop farm, in the county of Tioga, and to settle the equitable rights of the parties to the lot. The facts of the case, so far as is necessary to understand the questions of law decided, are stated in the opinion of the chancellor.

      J. Sudam, for the complainants.

      J. A. Collier, for the defendants.
   The Chancellor.

For the purpose of understanding the several questions which arise in this suit, it is necessary to advert to a great variety of transactions, not only in relation to the Wynkoop farm, the subject of controversy here, but also to another lot formerly owned by Maxwell and Matthews. Previous to the year 1806, Benjamin Wynkoop had acquired & valid title to the premises in question—a farm of about 600 acres of land, in the county of. Tioga. A judgment was recovered against Wynkoop in the supreme court, in favor of J. M’Bride, for $675,32, which was docketed in May, 1803. To accommodate Wynkoop,- Guy Maxwell, his brother-in-law, who was then a man of considerable wealth, paid the amount due on the judgment and took an assignment thereof. In the spring of 1806, Maxwell caused the Wynkoop farm to be sold on an execution upon that judgment, and bid the same in for the sum of $250. He took a deed from the sheriff in May, 1806, but which deed was never acknowledged or recorded. On the 11th óf November, 1809, Maxwell executed a re-conveyance of the farm, and delivered the same to V', Matthews, as an escrow, to be delivered to Wynkoop upon his paying what was due on account of the M’Bride judgment. At the time of the execution of this deed, G. Maxwell also made and delivered to Matthews a written declaration, stating the delivery of the deed as an escrow, to be delivered to Wynkoop upon the payment to Maxwell of $1000 in one year. These papers remained in the hands of Matthews until after the death of Maxwell, in February, 1814, and were then delivered to his widow. In April, 1814, Thomas Maxwell, one of the defendants, a son and heir of G. Maxwell, who appears to have died intestate, wrote to Wynkoop, informing him of the delivery of the deed to Matthews with directions to have it delivered to him whenever a settlement of the affairs between G. Maxwell and him should be made, and requesting him to come and settle, &c. In June, 1814, a settlement was made, by Wynkoop and T. Maxwell, of the'accounts between the former and the father of the latter, including the notes given by G. Maxwell for the purchase of the M’Bride judgment. On that settlement a balance of $8,34 was found due to the estate of G. Maxwell, for which T. Maxwell took Wynkoop’s, note'; and both parties signed a written statement at the foot of the’ account, showing that it was settled. T. Maxwell, at the same time, delivered the deed of November^ 1809, to' Wynkoop. In October, 1816,' Matthews, who was one of the subscribing witnesses to the deed, proved the execution thereof before a master in chance-' ry, and a certificate of such proof was endorsed by the master on the deed in due form of law to authorize it to be recorded. In 1816, T. Gold recovered two judgments in the supreme court against Wynkoop, on which the farm was sold by the sheriff of Tioga to A. Dana, the assignee of the judgments, in September, 1817. The deed from the sheriff to Dana was duly acknowledged, and was recorded on the 20th of -September, in the same year. In November, 1818, the complainants obtained a judgment against Wynkoop, on a bond and warrant, for §1750 debt and §15,25 damages and costs. This judgment was for monies advanced to Wynkoop to redeem his farm from the sale to Dana. This proving insufficient, the complainants paid Dana the further sum of §474, 50, and some other expenses for sheriff’s fees, &c. and Dana thereupon, by a deed of the 29th of October, 1818, conveyed the farm to the complainants. This deed was duly proved by William Maxwell, one of the defendants, who was the agent of the complainants in making the arrangement with Dana, and was recorded by T. Maxwell, who was then clerk of the county, on the 29th of April, 1819. Upon this conveyance, the complainants’ claim to the farm rests.

In November, 1803, Jacob R. De Witt and others conveyed to Guy Maxwell and Vincent Matthews lot 195, in New-town in the county of Tioga, and took back a bond and mortgage to secure the payment of §1881,23 ; which mortgage was registered the 6th of June, 1804. Considerable payments were made from time to time on this bond and mortgage. A suit was afterwards brought on the bond, against Maxwell and Matthews, in the supreme court; and in July, 1809, while G. Maxwell held the title to the Wynkoop farm, a judgment was recovered for the penalty of the bond, and §41,26 damages and costs. This judgment was a lien upon considerable real estate belonging to Matthews and Maxwell severally, as well as upon apart of the lands embraced in the mortgage, which had not then been sold. In December, 1812, a fi. fa. was issued on this judgment, returnable at the January term thereafter, and was delivered to the sheriff of Tioga, with a direction endorsed thereon requiring the sheri/f to levy §1608,51 debt and §41,26 damages and costs, with interest on debt from 20th July, 1807; and all receipts given since 1st November, 1810, to be allowed in payment. At the time this execution was placed in the sheriff’s hands, Maxwell and Matthews had personal property sufficient to satisfy the whole amount due thereon. The sheriff called upon them, and their property was pointed out to him ; but he did not make an actual levy on it, or take it out of their possession. After the return day of the execution, in February, 1813, Maxwell and Matthews filed a.bill in this court to stay the proceeding on the judgment and mortgage; and they obtained an injunction, which has never been dissolved. After the service of this injunction on the sheriff, he took no further care of the personal property of Maxwell and Matthews, and it was used by them or sold on other executions. The real property of G. Maxwell, which he owned at that time, has also been sold under junior judgments; and the defendant, William Max-Well, in March, 1818, became the owner of the undivided half of seven acres, part of that real estate. He also became the owner of another parcel thereof, containing about 40 acres, in July, 1816. After the conveyance from Dana to the complainants, W. & T. Maxwell, the two sons of Guy Maxwell, made an arrangement with Avery, the other defendant in this cause, to assist them in buying the bond and mortgage and judgment against G. Maxwell and V. Matthews. They accordingly purchased them in June, 1820, for $1066,87, the amount alleged to be due thereon including costs. Matthews consented that the sheriff might proceed upon the original execution, notwithstanding the injunction. And the sheriff under the direction of these defendants as the owners of the judgment, proceeded to sell the Wynlcoop farm under the execution which was placed in his hands in 1812. The farm was bid in by Avery, for the joint benefit of the defendants, at $800, on the 11th of December, 1820, and the sheriff executed a certificate of such purchase, as required by the statute.

It is evident from this view of the facts in this case, admitting the deed of November, 1809, from G. Maxwell to Wynlcoop is to be considered a valid conveyance as of that date, that it would be contrary to the settled principles of equity to allow the whole balance due on the De Witt judgment to be collected out of the Wynkoop farm, now the property of the complainants. The property mortgaged was the primary fund for the payment of this debt; and that must be first resorted to unless the holders of that property have acquired some equitable claim to throw the burthen upon other lands bound by the judgment. From the evidence, it appears that Matthews had paid his full share of the mortgage money previous to the recovery of this judgment. The present owners of his share of the property have therefore an equitable right to insist that the balance of the mortgage debt shall be collected out of the property which belonged to G. Maxwell in the division between him and Matthews ; and if any parts of that property had been sold and conveyed by G. Maxwell previous to that time, the present owners of such parts have an equitable claim to have the debt paid out of that which remained unsold. If that part of the mortgaged premises which belonged to G. Maxwell, and which remained unsold at the time of the judgment, is insufficient to satisfy the debt, other lands of G. Maxwell, on which the judgment was alien, should next, be resorted to, in the inverse order of their alienation. (5 John. Ch. Rep. 235. 1 Paige, 228.) It follows, from the application of this principle, if the conveyance of November, 1809, is valid, that Wynboop and those claiming under him would be entitled to have the one half of the seven acre lot, and the whole of the 40 acre lot now in the hands of W. Maxwell, first applied to satisfy this judgment, before any resort could be had to the Wynboop farm. As W. Maxwell and the other owners of this judgment were not bound to interfere with the sheriff’s decision in the settlement of the equities between third persons, they should not have been held responsible for any mistabe of the sheriff as to those equities in the order in which he sold the lands, if they had not attempted to control his decision, and had left him at liberty to exercise his own judgment as to the mode of proceeding to collect the residue which remained due on the execution.

I thinb, however, this case must be disposed of on a different principle, owing to the peculiar situation of the title to the Wynboop farm at the time this judgment was recovered, and at the death of G. Maxwell ■ I lay out of question the fact that the sheriff’s deed to G. Maxwell was never recorded. For if that forms any valid defence to these complainants against the lien of the De Witt judgment, it is a defence of which they may hereafter avail themselves at law. At the time Amasa Dana purchased in the property and took his conveyance from the sheriff, Wynkoop was in possession, and was the ostensible owner of the land, claiming it as his own. The lien of the Gold judgments, therefore, attached upon that possession. And if Dana had neither legal or constructive notice that Wynkoop’s title had ever been divested, the unrecorded sheriff’s deed to G. Maxwell was void as to him. Dana’s grantees can therefore avail themselves of that want of notice, as a legal defence against any person who is obliged to make title to the farm through that unregistered deed. (6 Wend. Rep. 225.) There is nothing in the pleadings or proofs in this case to show whether Dana was or was not a bona fide purchaser, without notice of the sheriff’s deed to Guy Maxwell. Neither is there any thing to show whether either Dana or the complainants have been misled by the delivery to Wynkoop, of the deed of November, 1809; or by the proof of the due execution thereof, which was endorsed upon that deed in 1816. I have then nothing before me which will enable me to decide upon the legal or equitable rights of the parties in that respect. I must therefore examine the case as if the sheriff’s deed of 1806, had been duly recorded, or was known to Dana and to the complainants at the time of their respective purchases.

Although the legal title may have been vested in G. Maxwell, by the sale under the M’Bridc execution, it is satisfactorily established that he took that title merely as a security for the payment of the amount of his advances, &c.; and that he held it in trust, to be re-conveyed to Wynkoop whenever the latter should pay what was justly due. If the deed of November, 1809j was absolutely void, and was incapable of confirmation by the heirs of G. Maxwell after his death, those heirs took the legal title to the Iand^ subject to that trust; and they were bound to convey it whenever the amount due was paid or satisfied. Whatever doubts may have once existed on this subject, it is now settled that a judgment being merely a general lien on the land of the debtor, the lien is subject to every equity which existed against the land in the hands of the judgment debtor at the time of the docketing of the judgment. And the court of chancery will protect the equitable rights of third persons against the legal lien, and will limit that lien to the actual interest which the judgment debt- or has in the estate. (See 1 Atk. on Conv. 512, and 1 Paiges R. 128, and the cases there referred to.) If the statement as made by T. Maxwell and Wynkoop at the time of their settlement was correct, very little was due to G. Maxwell on account of the Wynkoop farm at the time this judgment was docketed, in July, 1809. And to that extent only, in any event, have the owners of the judgment a right to enforce the collection thereof against this farm. It also appears from the statement, that some payments were made afterwards. And if the two pieces of land held by W. Maxwell, were, at the time of the purchase of this judgment, in June, 1820, worth enough to satisfy the whole amount due thereon, then there is no equitable lien upon the farm for any thing more than the balance due from Wynkoop at the time of the docketing of the judgment under which W. Maxwell derived title to those two pieces of land. The amount, due, as stated in the written declaration delivered to Matthews, with the deed, was $1000. But that amount was inserted in the absence of Wynkoop, and without any actual estimate of the real amount due. From an inspection of this paper, in connection with the other evidence in this cause, I am satisfied $1000 was inserted in the blank, merely as a nominal sum ; and that the true sum was to be liquidated between the parties afterwards. The real object of that transaction was to place the title to the property in such a situation as to enable G. Maxwell to transfer it to Wynkoop unembarrassed by judgments which might be rendered against the former for his own debts.

The settlement between Wynkoop and T. Maxwell, and the delivery of the deed was binding on the latter as one of the heirs at law on whom the legal title had descended. And if he was the only party interested in the judgment at this time, I should have no difficulty in disposing of this case upon the evidence now before me. It appears, however, that W. Maxwell, and J. H. Avery, have equal interests with him; and as the parties have not, under these pleadings and proofs, sufficiently ascertained the real situation of the indebtedness at the time that judgment was rendered, I shall direct a reference to the taxing master of the sixth circuit to take an account of the amount, if any, which was due to G. Maxwell from Wynkoop, on the 12th of July, 1809, the day of the docketing that judgment, for the monies advanced or liabilities assumed on the purchase of the M’Bride judgment, and for all costs, charges and expenses which G. Maxwell had been obliged to pay, for or on account thereof, and for or on account of any other legal or equitable demand against Wynkoop. I shall also direct, that in taking such account, the master allow all payments and just off sets, and allow interest as shall be equitable; that, after having ascertained the amount which was equitably due to G. Maxwell at the time, he compute the interest on the balance thus ascertained, down to the date of his report. The master is in like manner to ascertain what was due to G. Maxwell from Wynkoop at the time of docketing the judgment, under which W. Maxwell has derived title to the 40 acre lot, and the half of the 7 acre lot; and to cast interest on the amount thus due, in like manner. The master is also to ascertain and report the value of the 40 acre lot, and of the half of the 7 acre lot, at the time of the 'purchase of the judgment, in June, 1820. The master is also to have the usual power to examine the parties on oath, and to compel the production of books and papers. He may also examine'any witnesses as to the subject matter of the reference, whether they have been already examined in chief or otherwise. And all further questions and directions are to be reserved until the coming in of the master’s report.

       See also Oxwith v. Plumer, Gilbert's Eq. Rep. 13.


text:
    Brisban vs. Boyd and others.
    A commission merchant has such an interest in the goods consigned to him for sale, that he may insure them to their full value, in his own name.
    But it is not his duty to insure the goods for the benefit of his principal, without some express or implied directions from the latter to that effect.
    And if the goods, being stored in the usual place, are destroyed by fire, tho commission merchant will not be responsible to his principal for the loss.
    Where a merchant in Alabama wrote to his factor in New-York, and proposed to ship for that place 300 bales of cotton on their joint account, if the agent should immediately, on the receipt of his letter, give notice of hie election to accept the proposition ; and the agent immediately upon the receipt of his principal’s letter replied to the same, accepting the proposition, and requesting his principal to designate and mark the cotton to be shipped on their joint account, and to advise him, when the same should be shipped ; It was held, that as soon as the agent replied to the letter of his principal, accepting the proposition, the contract was complete, and could not be rescinded by either party, without the consent of the other.
    Where a former customer of a partnership having no notice of its dissolution, deals with one of the partners on the credit of the firm, all the partners will be liable to such customer on the contract.
    But if the customer was informed of the dissolution, immediately after a sale to one of the former partners, on the credit of the firm, and before the good» were delivered, a court of equity would not permit the vendor to recover the price of the goods against the former partners of the vendee.
    After the dissolution of a partnership, one partner cannot bind the other by the acknowledgment of a debt which is neither legally or equitably due, or by giving a note for the same, although at the time of such acknowledgment, or of the giving of the note, the supposed creditor had no knowledge of the dissolution.
    The bill in this cause was filed against Boyd and Suydam, and against Hemden, a former partner of the complainant, to set aside a settlement made between Hernden and the other defendant, after a dissolution of the complainant’s partnership with him; and to restrain Boyd and Suydám from proceeding at law against the complainant and Hemden, to collect a note given on such settlement. The facts, so far as is necessary to understand the decision, are stated in the opinion of the chancellor.
    October 2.

      B. F. Butler, for the complainant.
    As the partnership between the complainant and Hernden expired before the .settlement was made by Hernden with the defendants Boyd and Suydam, the complainant is not bound by such settlement. One partner cannot bind his co-partners by an acknowledgment of a debt, after a dissolution of the partnership. (Walden v. Sherburne, 15 John. Rep. 409. Baker v. Stackpole, 9 Cowen’s Rep. 433.) An account will be opened for manifest error. In the settlement, Boyd and Suydam were not charged as they ought to have been, with half the loss of the 300 bales of cotton, purchased on joint account. They were guilty of gross or culpable negligence in not insuring the cotton, and in storing it in a wooden building when they might have stored it in fire proof stores in Brooklyn. What is the custom in New-York in such cases appears from the case reported in 1 Hall’s Rep. 84. A consignee of goods has authority to insure them, and charge the premium to the consignor. Boyd and Suydam’s letter of the 13th February completed the contract between them and the complainant and Hernden, as to a joint adventure in the 300 bales of cotton. The designation and marking of the cotton were mere directions, and formed no part of the contract. The counsel cited De Forest v. Fulton Fire Insurance Co. (1 Hall’s Rep. 84;) Caffrey v. Darby, (6 Ves. 496;) Sucena v. Craufurd et al., (2 New. Rep. 290;) Murray v. Bogert, (14 John. Rep. 318;) Chappedelaine v. Dechenaux et al., (4 Cranch’s Rep. 306;) De Forest v. Fulton Fire Ins. Co. (1 Hall’s Rep. 109, 110, 133.)

      H. R. Stoirs, for Boyd and Suydam.
    No contract to purchase the 300 bales of cotton on joint account was ever completed. The cotton was not marked and designated as directed ; and Boyd and Suydam were not advised of the purchase. The marking arid designation of the cotton was necessary to the, completion of the contract. No contract could have been created, because the proposition was not accepted upon the same terms it was offered. Where a person instructs his factor to purchase goods, and prescribes the terms of the purchase and the manner of sending the property, and the property is sent in a different way from that directed, the principal is not bound to receive it. Where circumstances exist which show an acquiescence in an account as settled, equity will not open it. Factors are not liable to their principals, except in cases of a breach of orders, gross neglect or fraud. The counsel cited Eliason et al. v. Henshaw, (4 Wheaton's Rep. 225;) Vianna v. Barclay, (3 Cowen's Rep. 283;) Cairnes & Lord v. Bleecker, (12 John. Rep. 300;) Murray v. Toland, (3 John. Ch. Rep. 569, 575;) White v. Wilks, (5 Taunton's Rep. 176;) Merritt v. Johnson, (7 John. Rep. 472;) Bruce v. Pearson, (3 id. Rep. 534;) Cooke v. Oxley, (3 Durn, & E. 653 ;) Kennedy v. Lee, (3 Meriv. Rep. 449.)
    C. Graham, for the defendant, Hemden.
   The Chancellor.

The questions in controversy between the parties in this case relate to two items in the account as settled by Hemden, the former partner of Brisban. By the articles of copartnership between Brisban and Hemden, which are admitted by the stipulation in the cause, it appears that •they entered into a limited partnership for the term of five years, commencing on the 10th of October, 1817. During the continuance of this copartnership, the defendants Boyd and Suydam were their agents or factors in the city of New-York. In 1822 Brisban and Hemden shipped 113 bales of cotton from Alabama, consigned to Boyd and Suydam, as commission merchants at New-York, to be sold for the account of the shippers; which cotton was received by them in June of that year. In consequence of a regulation of the board of health of New-York, it became necessary to store the cotton out of the city, and it was accordingly stored at Brooklyn, the usual place of deposit, under such circumstances; where it was soon after burned and lost. The complainant claims to charge Boyd and Suydam with this loss, on the ground that it was their duty to have insured the cotton thus deposited by them in a building which was liable to be destroyed by fire. The cases cited by the complainant’s counsel, in relation to this claim, show that a commission merchant has such an interest in goods consigned to and received by him for sale, that he may insure in his own name to the full value of the goods. But it does not follow from this that it is his duty, without any express or implied directions to that effect from his principal, to insure the goods for the benefit of such principal. And there is no evidence in this case of any usage of trade, from which the duty of the defendants to insure the goods can be implied. If the defendants had made themselves liable for the loss, by their negligence in placing the cotton in an unsafe place of deposit when a safe one might easily have been obtained, as that fact is not admitted in the answer, the complainant should have filed a replication, and should also have established the fact of negligence by proof. As the case now stands, upon bill and answer, I think Boyd and Suydam are not chargeable with the loss upon the cotton which was destroyed by fire.

Upon the other question, as to the loss upon the 300 bales consigned to them on joint account, I see no reason to change the opinion expressed by me, in March, 1830, upon the application to dissolve the injunction. By the letter of the 16th of January, 1823, Hernden, acting in behalf of his firm, informs Boyd and Suydam that he has not been able to execute their order for cotton, for the prices at which he was limited by them; that Brisban.and Hernden had therefore drawn on them for money, to be invested in cotton which they had concluded to purchase on their own account; and states that they expected to ship 600 bales or more. But he proposes to Boyd and Suydam to permit him to consider 300 bales on joint account of themselves and Brisbin and Hernden, if they should elect to do so, and should give notice of such intention immediately after the receipt of that letter. That letter was received at New-York about the 13th of February. Boyd and Suydam immediately answered it, consenting to take the 300 bales on joint account, as proposed; and they requested Hernden to designate and mark the cotton on joint account, and to advise them when it was shipped. The moment this proposition was accepted by Boyd and Suydam, and the letter containing that acceptance had been transmitted to Brisban and Hernden, there was a valid contract for a joint adventure in the 300 bales of cotton; which contract neither party had a right to rescind, without the consent of the other. The connsel for Boyd and Suydam supposes that the request to designate and mark the 300 bales on joint account, and to inform them when it was shipped, were conditions imposed upon the acceptance of the proposition. I do not, however, so understand the letter of the 13th of February. That letter was an unconditional acceptance of the offer contained in the letter of the 16th of January, to which it was an answer. And what was said as to designating and marking the cotton, and informing them of the time of shipment, was merely directory as to the manner in which they wished the 300 bales belonging to the joint concern to be sent. These directions were substantially complied with, by the letter of the 12th of April, designating which of the 393 bales shipped were not to be considered on joint account if the consumers did not choose to take an interest in a greater number than the 300 bales. The marks upon the 93 bales, which were not to be considered on joint account, being designated, all the other bales, whatever particular marks they might have thereon, were of course to be considered by both parties as their joint property. In the execution of orders sent to merchants abroad, it can never be expected that every part of the letter of instructions should be taken literally. And it could not have been expected by Boyd and Suydam that Hernden should place on each of these 300 bales of cotton a particular mark; specifying in terms that it belonged to the joint concern of Boyd and Suydam and Brisban and Hernden. Their only object was to have the cotton so designated and marked, that with the aid of the correspondence connected with the shipment, Boyd and Suydam, the consignees, might be able to ascertain what portion of the shipment belonged to the joint concern, and what to Brisban and Hernden exclusively. This object was fully accomplished by the manner in which the property of each concern was distinguished in the letter of the 12th of April; which letter reached New-Yorlc before the arrival of the cotton.

The cotton having come to a losing market, and that fact not being communicated to Brisban and Hernden, they cannot in equity be bound by any acquiescence in the letter of the 11th of May, 1822, in which letter Boyd and Suydam thought proper to treat it as the sole property of Brisban and Hernden; intimaling at the same time, however, that it would probably produce a small profit.

Under the peculiar circumstances in which Hernden was placed, on his return to New-Yorb, I am not prepared to say he would not himself have been entitled to relief against a settlement, in which any of his substantial rights were disregarded. It is not necessary, however, to examine that question in this case, as he is only a defendant in the cause. And the counsel for Boyd and Suydam and of Hernden, upon the hearing, expressly signified to the court that they had no wish to take testimony as against each other, so as to litigate the matter between themselves. Brisban alone appears to be interested in the proper adjustment of the matters in difference between his firm and Boyd and Suydam.

As Boyd and Suydam expressly deny all knowledge of the partnership having terminated, at the time of the settlement with Hernden, in the fall of 1823, if they had sold goods or parted with the property to him as a partner, Brisban might perhaps have been liable to them in the same manner as if the partnership had continued. But after the actual dissolution of the firm, one of the partners cannot bind the other by the acknowledgment of a debt which is not legally or equitably due; or by giving a note for such supposed debt. (15 John. Rep. 409. 4 Mumf. Rep. 215. 9 Cowen’s Rep. 433.) The want of knowledge of the dissolution of the partnership cannot benefit a customer who loses nothing by his ignorance of the fact, and who is only to be placed in the same situation as he would have been if the fact had been communicated to him in season. A customer who sells goods to one of the former partners, on the credit of the firm, and without notice of the dissolution, may have a legal claim against his copartners for the goods sold. But if he was informed of the dissolution of the partnership immediately after the sale, and while the goods remained in his own hands undelivered, a court of equity never would permit him to recover for those goods, against the former partners of the vendee. So in this case, it being established by the written correspondence stated in these pleadings, that one half of the loss on the 300 bales of cotton should have been deducted from the balance due to Boyd and Suydam, on their accounts with Brisban and Hernden, they cannot be permitted to take advantage of the fact that they obtained the partnership note from Hernden without knowledge of the dissolution of the firm; and thereby enable themselves to recover a sum of money from Brisban which is not justly due.

The accounts between the parties must be re-stated, or taken before a master on a reference, for the purpose of ascertaining the balance, if any, which is really due to Boyd and Suydam from the firm of Brisban and Hernden; charging the former with one half of the loss upon the 300 bales of cotton, and rejecting the complainant’s claim for the 113 bales of cotton destroyed by fire. And the question of costs and all other questions and directions are to be reserved until the coming in of the master’s report.


text:
    Wakeman vs. Grover and others. Varnum vs. The Same.
    A judgment creditor, who has exhausted bis remedy at law, may file a bill in chancery to obtain satisfaction out of the equitable interests of the debtor, for his own benefit only, without making other creditors, standing in the same situation, parties.
    Where a replication is filed, no statement in the answer, not responsive to the bill, can avail the defendant, unless it is established by proof.
    Where a bill is filed by a creditor to carry into effect an assignment of the debtor’s property, the other creditors provided for in the assignment should be made parties, or the bill should be filed in behalf of the complainant and all others who may choose to come in under the decree.
    But where a judgment creditor is acting in hostility to the assignment, it is not necessary for him to make the creditors whose claims are provided for in the assignment parties.
    In a suit to set aside an assignment as fraudulent, it is sufficient to make the fraudulent assignors and assignees parties.
    Assignees, in trust for creditors, may file a bill in their own names, relative to the trust estate, without malting the creditors provided for in the assignment parties.
    Whether an assignment by an insolvent partnership, which gives á preference to the creditors of the individual partners over the partnership creditors, is valid ? Quiere.

      An assignment, void in part upon the ground of being against the provisions of a statute, is void in toto, and no interest passes thereby to the assignees, as against creditors who did not assent to it.
    Where an insolvent debtor makes a voluntary assignment of his property to trustees of his own selection, and excludes in the assignment certain of his creditors from any participation in the assigned property, unless they consent to take their share of the surplus, after paying certain preferred creditors, and discharge the assignor from all further liability, whether their debts are paid or not; such assignment is fraudulent and void as against creditors who do not assent to the same.
    If the assignees, under an assignment which is fraudulent in law, pay over the proceeds of the assigned property to creditors of the assignor, in pursuance thereof, before any other creditors obtain a general or specific lien on the assigned property, the other creditors cannot compel the assignees to account to them for such proceeds.
    These were separate and distinct suits, prosecuted by different solicitors; but as they both came before the court at the same time, related to the same property, and the questions arising in each were the same, they were considered and decided together. The bill in the first cause, in which Wake-man was the complainant, was filed in May, 1828, and the bill of Varnum was filed a few days thereafter. The complainants, respectively, were judgment creditors of the defendants Grover and Gunn, and had issued executions at law against the property of those defendants, which executions were returned by the sheriff unsatisfied. And the principal object of these suits was to reach the proceeds of the property and effects of Grover and Gunn, in the hands of the other defendants in this cause, on the ground that the assignment under which the last mentioned defendants claimed to hold such property and effects, was fraudulent and void as against the complainants respectively. It was admitted that Grover and Gunn, at the date of the assignment, were known to be insolvent ; that they were indebted to these complainants and others between sixty and seventy thousand dollars; and their property and effects were then estimated to be worth about $50,000. On the 6th of July, 1826, Grover and Gunn executed to the defendants, Garrow, Miller and Dillon, an assignment of the whole, or at least of the bulk of their property and effects; which property and effects were particularly described in the assignment. This assignment was declared to be upon the trust that the assignees should convert the assigned property into money, and after paying their costs, expenses, &c. to dispose of the proceeds as follows: First, to pay to certain preferred creditors, named as belonging to class No. 1, in schedule H., annexed to the assignment, the amount of their respective debts, giving a preference however to one debt belonging to that class over all others; secondly, to pay to the creditors named in the schedule as belonging to class No. 2, or rather to such of them as should, within three months after a written request from the assignees, agree in writing, under hand and seal, to receive such proportion of their debts as could be paid out of the surplus avails of the assigned property, after paying the preferred creditors in full discharge of their whole debts due from Grover and Gunn; thirdly, to apply the residue to the payment of the creditors named in the schedule as class No. 3, and all other debts of the assignors; and lastly, to pay the residue, if any there should be, to Grover and Gunn. The assignees were also authorized to compound with all or any of the creditors, in such manner and upon such terms as they should deem proper; but not so as to interfere with or depart from the order of preference established by the assignment. The creditors named in class No. I, had claims against Grover and Gunn, or were responsible as endorsers for them, either as partners or individually, to an amount exceeding $35,000. , One of those debts, however, was secured by a transfer of securities, which had been previously made to the holders thereof, of the nominal amount of $15,000; and some others had been partially secured. The assignment therefore provided that those securities should be first applied towards the satisfaction of those debts. The debts in class No. 2 exceeded $30,000; and class No. 3 embraced only two debts of $4,600, secured by bond and mortgage. Previous to the commencement of these suits, the assignees had realized only $16,500 from the assigned property, and had paid out $11,000 to the creditors mentioned in class No. 1. In the answers of the defendants, they denied ail fraud in the assignment, unless it was illegal on its face, which they insisted that it was not. The assignees also insisted, in their . answers, if the assignment should be declared void by the decree of the court, that they Should only be held accountable for so much of the assigned property, or the proceeds thereof, as remained in their hands at the commencement of these suits; . and deducting therefrom their reasonable costs, charges.and ■ ■ expenses. Replications were filed to the answers, but no proof was taken in either suit, except to establish the fact of the return of the executions unsatisfied ; which fact was not admit- . ted in the answers.

      JD. Lord, jr. for the complainant Wakeman.
    The objection of the want of parties is unsound. The progress of the suit . would be impracticable, if it was necessary to make all thé _ creditors of Grover and Gunn parties. The rule of this court as to parties, is a rule of convenience or expediency; and it is enough to bring before the court parties capable of litigating, and bound to do so. (Cooper’s Eq. Plead. 40. Chauncey v. May, Free, in Ch. 592. Adair v. The New River Company, 11 Ves. jun. 429.) In Cullen v. Queensbury, (1 Brown’s Ch. Cas. 101,) a bill was sustained against aecommittee of a club for demands against the club, which was a numerous body. Van Vechten v. Terry, (2 John. Ch. Rep. 196,) is a similar case against the trustees of Washington Hall, (See also 1 John. Ch. Rep. 349.) Especially should such a rule apply here, where, if the complainants are entitled to succeed at all, such other parties have no rights, and where the whole ..subject of the controversy arises out of acts of the assignors 'and assignees, to which the creditors were not privy.
    The assignment which the bill seeks to set aside is void, upon the ground of its being coercive, not being intended to give an honest preference .to more meritorious creditors, but to, exclude from any participation such as would not release; and of its being so contrived as to keep the funds unsettled, and incapable of settlement, by means of the indefinite extent of the provision for excluding any of the creditors, and thus delaying creditors. The law merely permits preferences; the policy of them is always doubtful, and they are watched jealously, especially in a court whose maxim is, “equality is equity.” A mere preference, however, operates not to coerce.any credttor; when given, it is a decisive parting with the property by a debtor, and has no operation on the hopes or fears of any other creditor, whose remedies are left unobstructed against the person or the other property of the debtor. It has no tendency to hinder or delay any of the creditors ; it is no more than a mere payment. But the present assignment is one creating a system of future preference, according as the creditor will or will not submit to the debtor’s terms. It looks not at the merit either of the refusing or consenting creditor’s • debts. It tends to preclude all inquiry as to the conveyance comprizing all the debtor’s property, as to the existence, amount or fairness of the debts for which the assignment is made, and all inquiry into the honesty of the debtor’s conduct. The creditor’s own debt may be stated at less than it is; still the-refusing creditor must take what is offered, although he may know of property concealed, of debts fabricated or excessively stated, or lose his portion of a provision which ought to be given to him unconditionally as a right, not as a favor. Our law always insists upon giving the creditors the right of exam- - ining where the debtor’s property is gone, and into the good faith and honesty of his disposition of it. By this kind of compulsory assignment, such a right is denied and actually defeated. To tolerate assignments like the present, is effectually to screen all kind of fraud in debtors.
    This assignment has upon its face an open and strong trust for the grantor or debtor, namely, the condition that by pay-, ing one third, perhaps less, possibly nothing, he shall be discharged of his debts. It means no benefit to the creditors, except as a consideration for the previous benefit of the debtor. Its main end and principal intent is the release of the debtor ; the payment of any creditor is merely incidental, so far as the intent is regarded. It is virtually putting the debtor’s property into the hands of his friends, to enable them to give it to such as will discharge him. In Jackson v. Brush, (20 John. Rep. 5,) a deed given by a debtor to two persons, for the purpose of selling the property and paying the debts of the debtor, was held fraudulent.
    Where a conveyance is for a proper intent, it-is not void merely, because, in its consequences, it may hinder and delay creditors. But the case is reversed when the main intent, the end, is to coerce, hinder and obstruct creditors, and the payment of any creditor merely an incident and means of coercion. (Widgery v. Harbell, 7 Mass. Rep. 144. Harris v. Sumner, 2 Pickering, 129. Borden v. Sumner, 4 id. 265.) In Searing v. Brinckerhoff, (5 John. Ch. Rep. 329,) a conveyance of real estate was given in trust to sell and pay over to such creditors as would release. It was held to render the convey-, anee void, for the reason, it was said, that it did not appear to comprise all the debtor’s estate. Ours is a stronger case than this; as our debtors having assigned all their property, no fund is left for creditors who refuse their terms, to pursue. The assignment is so contrived as to keep the creditors at arm’s length for an indefinite period, which never could be fixed by the creditors without a chancery proceeding. It delays, hinders and defrauds even those who are by a sort of compulsion obliged to submit to it. The case of Hyslop v. Clarke, (14 John. Rep. 458,) is decisive of this question. The property there was to pay certain creditors, namely, the assignees in any event. It was then to go to all the creditors, if all should execute a release, without specifying the time; but if any refused, then it was to go to the assignor’s creditors, according to a new appointment of trusts by them, tube made immediately upon refusal of any creditor to release.
    In that case, then, the property was at all events to go to the creditors, and not elsewhere. It was a conveyance upon trust to pay debts, and no other persons than creditors could take that fund. It required the new appointment to be made immediately. It was therefore comparatively innocent of the guilt of delay. It was, of all the property of the assignors, not specifically appropriated. But it was held void, because it attempted to coerce the creditors to execute a release, not by an absolute exclusion, as in this case, but by giving the debtors the power of exclusion; and also, because the creditors could not compel the new appointment of trusts to be made without a resort to the court of chancery. In the present case, instead of a power of exclusion on refusing a release, the exclusion is absolute; and the property is locked up from all creditors as long as the assignees choose to keep it open, until compelled by a suit in chancery. All the reasoning of the court in that case substantially condemns this assignment. (See also Austin v. Bell, 20 John. Rep. 442.) The assignment being void in part, is void absolutely for the whole. (Hyslop v. Clarke, 14 John. Rep. 485. Ausltn v. Bell, 20 John. Rep. 442. Mackie v. Caines, 5 Cowen’s Rep. 547.) The latter case is also an authority for a decree against the assignees personally for costs.

      John L. Graham, for the complainant Varnum.
    The assignment. in question is fraudulent and void, as well by the common law as by statute.
    1. It violates the well settled principle of equity, that partnership funds must be first and exclusively applied to the payment of the partnership debts. (West v. Skip, 1 Vesey, 239. Fox v. Hankley, Cowper, 445. Field v. Clark, 4 Vesey, 396. Dutton v. Morrison, 17 Vesey, 193.)
    This assignment directs that the nett proceeds and avails of the assigned property shall be applied in satisfaction of the individual as well as the partnership debts of the assignors, Grover and Gunn. The surplus interest of partners in the co-partnership property, is alone liable for the payment of their individual debts. (Nichols & Vandewater v. Mumford, 4 John. Ch. R. 522.)
    2. It was decided in the case of Hyslop v. Clarke, (14 John. R. 458,) in the supreme court of this state, (and the principles and authority of that decision have never been impugned, unless the case of Murray v. Riggs, decided in the court of errors and reported in 15 John. R. 588, may be considered as involving principles modifying those in the case referred to,) that, an insolvent debtor, has no right to place his property in such a situation as to prevent his creditors from taking it, under process of a court of law, and to drive them into a court of equity, where they must encounter great expense and delay, unless it be under very special circumstances, and for the purpose of honestly giving a preference to some of his creditors, or to cause a just distribution of his estate to be made amongst them all. (14 John. R. 464.) This case is conclusive as to the invalidity of the present assignment. The property assigned was placed beyond the reach of legal process. The creditors, who were pursuing their legal remedies to obtain satisfaction of their debts, were, in the language of the statute, delayed and hindered, and in judgment of law defrauded in the prosecution of their legal rights. A debtor has undoubtedly a right to prefer one set of creditors to another; but, when the object of an assignment is not only to give a preference to certain creditors, but to coerce others of them to sanction such preference (however unwarrantable) under the penalty of total exclusion from its benefits, then' the assignment assumes a hostile character, and is justly subjected to the condemnation of that provision of the statute, which declares that no debtor shall hinder or delay his creditor in the prosecution of his just claims, or of that sound and salutary principle of the common law, which prohibits the debtor from doing any act, by which his creditor may be defrauded. The fundamental principles of a court of equity, which are founded on the basis that a debtor in insolvent circumstances must surrender the whole of his property to his creditors, and that upon such surrender an equal distribution should be made of the same amongst all his creditors, are evaded by this assignment, and the creditors are thereby delayed, hindered and defrauded in the prosecution and collection of their debts.
    3. Another ingredient in the composition of the fraud in this assignment is, the fact of the debtors not.having assigned the whole of their property. The debtors, in their assignment, do not profess to assign their whole property. As to the construction of the generality of the words in assignments, see Wilkes & Fontaine v. Ferris, (5 John. Rep. 344, 345.)
    4. At the time the assignment was made, the defendants Grover and Gunn, were insolvent and unable to pay their debts. In this crisis of their affairs, justice and equity fairly required of them a fair and equal distribution of their propety amongst all their creditors rateably and proportionably.
    5. The nature and operation of the assignment, is to reserve an interest for the debtors. (Burd v. Smith, 4 Dallas’, Rep. 76 to 90.)

      W. H. Seward <y A. Van Vechten, for the defendants.
    All the creditors provided for in the assignment have an interest under if, and should have been made parties to these suits.
    The debt of the Beaches was in fact a judgment debt against both Grover and Gunn, for which an execution had been levied on the partnership property before the assignment was made. There is no allegation in these bills to impeach this transaction; nor are the Messrs. Beach made parties, so as to make its fairness or legality a legitimate subject of litigation in these suits. The judgment, therefore, standing unimpeached, constitutes a legal and just claim against the firm of Grover and Gunn. (James v. McKown, 6 John. Rep. 543.) Besides, the assignment includes real property; the legal title to which appears by the answers to have been vested in Grover; upon which the j udgment of the Messrs. Beach is a valid lien, which equity will not interfere with ; and the delivery of the execution to the sheriff extended their lien to the tangible personal property of the firm.
    The case of Hyslop v. Clarke, (14 John. Rep. 458,) relied on, is not analogous. For there the condition of the assignment was, that if all fhe other creditors except Hyslop & Co. did not entirely discharge the assignors, &c. the trust as to them should cease and be void ; and the preference given to Hyslop & Co. was declared to be in consideration of Hyslop’s assuming to execute the trust. Clarke was at the time a prosecuting creditor. There were several objectionable and fraudulent features in the transaction; but the principal point upon which the court rested their decision, was, that the assignment was to the use of the assignors, except as to Hyslop & Co.’s debt, unless all the other creditors submitted to the terms prescribed. But Jbere the assignment is absolute, for the benefit of the creditors; giving a conditional preference to the creditors of the second class, at their election. If they do not elect to avail themselves of it, they come in upon equal terms with the unpreferred just creditors of the assignors. But it is urged that the complainants have not been requested to make the election offered them by the assignment. Be it so, what follows 1 Their right to elect is still open, unless they have detérmined it by their suits to set aside the assignment; for by thd terms of the assignment, it continues three months from the time the creditors are requested to make it. Itis also alleged that the assignment is void by the statute of frauds, because made to delay the recovery of debts. It has never been held that an assignment by an insolvent debtor is void, merely because it may in effect produce delay to creditors. (Wilder v. Winne, 6 Cowen, 254, and cases cited.)

    The bills not charging that Grover and Gunn had assigned all their property, they were not required to answer as to this more fully than they did. (6 John. Rep. 543.) And the complainants have admitted the sufficiency of the answers by not excepting to them. It has never been held that the insolvency of a debtor avoids the assignment of his property for the benefit of creditors, if it is not impeachable upon other grounds. It will be found by an examination of the assignment, that it dbes not reserve an interest to the assignors.
   The Chancellor.

The important question to be considered and decided in these causes is, whether the assignment upon its face is illegal and void, as being in violation of the statute, or as intended to delay, hinder, or defraud the creditors of Grover and Gunn in the collection of their debts. Before I approach this question, however, it is necessary to examine some other points, which have been made by the counsel on the argument! It is alleged in the answers of the defendants that certain other creditors of Grover and Gunn have recovered judgments at law, and that their executions have been returned unsatisfied; and it is now insisted that they should have been made parties. It appears by the answers that there is no real estate on which judgments could be a lien, unless it be the two church pews. So far as respects those, no decree can be made here which can affect the rights of judgment creditors who are not parties to these suits. If the assignment is valid, their judgments are no lien upon any of the property. And if it is set aside as fraudulent, the oldest judgment at law-will have the preference notwithstanding any decree which may be made in a suit to which the owner of that judgment is not a party. He may be interested in the question to be decided here, but cannot be affected by the decree. (See Rundell v. The Marquis of Donegal, Hogan's Rep. 122.) So far as respects the property on which no creditor has obtained a lien by his judgment or execution at law, this court has frequently decided that a creditor whose remedy at law has been exhausted, may file a bill here for his own benefit only, and without making other creditors standing in the same situation parties. (Edmeston v. Lyde, 1 Paige’s Rep. 637.) Another conclusive answer to this objection is, that this allegation of the defendants is not responsive to any thing contained in the bill; and the defendants have introduced no evidence whatever, in either cause, to show that any judgment has been recovered against Grover and Gunn, except that on which the complainants bill is founded. Replications having been filed, no statement in the answers not responsive to the bill can be of any avail to the defendants on the hearing, unless it is established by proof. It is also insisted by the defendants, that all the creditors whose debts are specifically provided for in the assignment are necessary parties to these suits. If the complainants were seeking to carry into effect the assignment, and to obtain their share of the assigned property, it would undoubtedly have been necessary either that they should have made all the creditors parties, or they should have filed their bills in behalf of themselves and all others, who might choose to come in under the decree. But I apprehend the rule is different when the creditor is acting in hostility to the assignment, and is seeking to set it aside on the ground that the assignee is endeavoring to retain the property of the debtor, under an ássignment which is fraudulent and illegal. In such a case the creditor cannot file a bill in behalf of himself, and those whose claims he is opposing. And it would be unreasonable to compel him to be at the expense of making all the creditors whose claims are provided for by the fraudulent assignment parties defendants. If the assignment is illegal, the assignee has no claim to have the other creditors made parties for his benefit; and if it is valid, he is perfectly competent to defend himself without their assistance. The uniform practice in cases of this kind, so far as I have been able to discover from the reports, is to proceed against the fraudulent assignors and assignees, without making the numerous creditors whose debts are provided for in the assignment parties. In the case of Riggs and others v. Murray and others, (2 John. Ch. Rep. 565,) this course was pursued. And much reliance is to be placed on that case as a precedent, "from the fact that C„ S. Riggs, one of the complainants, at the time of the filing of that bill, was considered as standing at the head of the chancery bar in this state. The billpvas filed in the same way in the case, of M’Menomy v. Murray and others, (3 John. Ch. Rep. 435.) In cases of this kind, also, the assignees suing in chancery for the benefit of the trust fund have been considered so far entitled to represent the interest of all the creditors provided for in the assignment, as to be permitted to file a bill in their own names, only, without making those creditors parties; (See Dey v. Dunham, 2 John. Ch. Rep. 182 ; Nicholl v. Mumford, 4 Id. 522 ; Searing v. Brinkerhoff, 5 Id. 329.) The bills in the causes now under consideration are not properly framed to entitle the complainants to any relief, unless they _succeed in showing the assignment illegal and fraudulent as against them. And if that ground of relief can be established, the creditors whose claims are provided form the illegal and void assignment are not necessary parties,

The first objection which is made to the validity of the assignment is, that it directs the proceeds of the property and effects of an insolvent partnership to be applied to the payment of some of the separate debts of the individual partners ; to the exclusion of, or in preference to the joint debts due to these complainants and other creditors of the firm. It appears from the schedule A., annexed to the assignment, that some of the preferred debts specified as belonging to class No. 1, are for endorsements for Grover only.. In the body of the assignment, also, it appears that it was intended to provide for the payment of the debts due from both, or either of the partners -out of the assigned property. The debt which is declared to have á "preference over all others, is a demand in favor of J. H. #" T' * a.= the endorsers of Grover’s note, for the benefit of Trotter & Douglass. It is stated in the answer, in reference to this debt, that it was in a judgment at the time nf the assignment, and that an execution had been issued thereon and levied upon the goods of Grover and Gunn. It is not stated, however, that the judgment was for a partnership debt, or indeed that it was a judgment obtained against both the partners. If it was against Grover only, although the execution was levied on the partnership effects, nothing but the interest of Grover, subject to the payment of the partnership debts, could be sold on the execution; and as this firm was manifestly insolvent, the execution was not a lien upon any tiling. Even if the language of the answer is to be taken as a positive allegation that it was a judgment against both, it -cannot avail the defendants, as no proof has been introduced to show that any such judgment and execution ever existed. This part of the answers not being responsive to the bill, can-mot be used by the defendants to support the assignment The question presented by this point of the complainants, is one of great importance to the commercial community, and must, I presume, sooner or later, be brought before the court of dernier resort I therefore prefer that it should be decided in a case where there can be no dispute about the facts, and where it may form the main point in the cause. The conclusion at which I have arrived on other objections to this assignment, renders it unnecessary for me to pass upon that question here.

The next objection to this assignment is, that Grover and Gunn, knowing themselves to be insolvent, have, without the concurrence of their creditors, made a voluntary assignment of their property to trustees of their own choosing, and have excluded a certain portion of the creditors from any participation in the assigned property, unless such creditors will consent to come in and take their share of the surplus, after paying the preferred creditors, and will discharge the assignors ■from all further liability, whether their debts are paid or not. It is supposed by the defendants’ counsel that the creditors of class No. 2, are not absolutely excluded from participating in the assigned property, although they should refuse to discharge the assignors from the whole of their debts, and that they may come in under the terms “ all other debts justly due and oW<* . ing from the parties of the first part, to be proven to the satisfaction of the said parties of the second part.” Even if they are correct in this construction, I doubt whether it can alter the rights of the assignees under the assignment. I confess I can see very little difference in principle, whether the debtor reserves to himself a small surplus, if certain of his creditors will not receive it in the full discharge of their debts, or whether he frames his assignment in such a manner as to obtain the benefit of a discharge of the whole debt upon the .payment of a part only, by any other species of coercion which he may attempt to exercise over his creditor. It is settled that the insolvent has the right, while his property remains in his own hands, to apply the same to the payment of one creditor in - preference to another, notwithstanding the principle of this court is that equality among creditors is equity. ' This right, however, is founded upon the supposition that there may be creditors who have peculiar claims upon the property of the debtor, and of which he is the most competent to judge. But if the debtor uses the power of preference which the law has . thus given him, without reference to any supposed equitable claims on the part of the creditors preferred, and with the sole view of securing future benefit to himself, either by obtaining a general discharge from his debts, or otherwise, it is,, to say the "least, an unconscientious exercise of a legal right. And where the debtor makes a voluntary assignment to a third person without the concurrence of his .creditors, and upon the face of the assignment avows his intention to make the benefit which shall thereafter be derived to himself the sole grounds of preference, and thus to compel the whole or any portion of his creditors to submit to his terms ; such an unconscientious exercise of power ought not to be sustained in a court of equity. I do not think this case depends solely upon that question, or that the construction contended for by the defendants’ counsel is the fair construction of this instrument. The assignors, in the first place, provide for the payment of the debts of two different classes of creditors, on certain conditions as to the second class, and then direct the payment of-two creditors named in class number three, and all other creditors. And to show what they meant by other debts justly due and owing, from them they required that such other debts should be proved to the satisfaction of the assignees. If the debts mentioned in class number two were the debts intended to be covered by the last clause, it could not be necessary to require them to be proved. By other debts, the assignors evidently meant debts other than those specified in the schedule.

In the case of Hyslop v. Clarke, (14 John. R. 458,) it was decided that such an assignment was fraudulent and void. Judge Van Ness, who delivered the opinion of the court in that case, admits the right of the debtor to give a preference to particular creditors. But he said the assignment in that case did not actually give the preference, and that it was fraudulent and void, because it was an attempt to retain the right to give a preference at a future period, and to compel the creditors to acquiesce in the terms offered to them. That case also decides that an assignment which is void in part as against the provisions of the statute, is void in toto ; and that no interest whatever passes under it to the assignee, as against the creditors who do not assent to it. This principle was again recognized and acted upon in the case of Austin v. Bell, (20 John. R. 442.) In Searing v. Brinkerhoff, (5 John. Ch. R. 329,) Chancellor Kent recognized the principle ; but he supposed it might have made some difference, if it had appeared that the assignment embraced fill the property of the debtors of every description. The same difficulty that existed in the case of Searing v. Brinkerhoff, however, exists here. It does not appear that the property assigned embraced all the property of the debtors. On the contrary, it appears from the schedule C, annexed to the answer, that there was at that time, in the hands of J. E. & J. Mowatt, securities to the amount of $15,000, which had been assigned to them by Grover and Gunn to secure the payment of $6500; and that they were to account for the surplus. The debt to the Mowatts was more than the amount thus secured, but it is evident from that assignment that they had other securities for a part of that debt. If it was material for the defendants to show that they actually assigned all their property, both individual as well as joint, to sustain such a provision as was inserted in this assignment, they should have stated that fact in their answers, and sustained it by proof; as the assignment itself does not profess to convey the whole. I apprehend, however, that it would make no difference, even if the assignment actually conveyed the whole. The law of this state does not recognize any right on the part of an insolvent debtor to an absolute discharge from his debts, although he may honestly and fairly make a cession of all his property to his creditors, to be applied to the payment of his debts equally or rateably. Much less does it recognize the right or the justice of such a discharge, when he has singled out favorite creditors and devoted the mass of his property to the payment of the whole of their debts, leaving the rest of his creditors to come in for a share of the residue. In such a case, he is barred from all relief under our insolvent laws, even if two thirds of his creditors consent to his discharge. And without such consent, his future earnings are in all cases liable for the payment of the balance of the debts, after his property has been fairly distributed among the creditors. It frequently happens that the whole of the property of a poor but honest creditor, and upon which perhaps he is dependent for the support of a large helpless family, consists in his claim upon the future acquisitions of an improvident debtor, who has wasted the hard earnings of the creditor by extravagance, or in gambling speculations. In such cases it would be the height of injustice to require the creditor to relinquish his claim upon the future acquisitions of his debtor. The principle, therefore, which would authorize the debtor to claim such a discharge as a right in all cases, or to use his property in such a manner as to coerce his creditors to grant such discharge, cannot be sound. Although I consider it as settled in this state, that the debtor cannot be permitted to assign his property in the manner contemplated in the assignment under consideration, I am aware that Judge Story has held that the law was settled the other way elsewhere ; although he admits the inclination of his own mind is against the validity of such assignments. (Halsey v. Whitney, 4 Mason’s Rep. 230.) The cases upon which he relies as having settled the law on this subject, are Lippincott v. Barker, (2 Binney’s Rep. 174,) The King v. Walton, (3 Price’s R. 6,) and a note of a manuscript case decided by Judge Washington. (Whart. Dig. Deed, 1 pl. 72.) In the case of Lippincott v. Barker there was an assignment by the debtor of all his property for the payment of all his creditors, rateably, who should come in and execute a general release to the debtor within four months from the date of the assignmet. The assignment, however, remained in the hands of the assignors until after a meeting of the creditors was called, and nearly every one of them was present and assented to the assignment. After that, it was delivered to the assignees, who took possession of the property. Under such circumstances, two of the judges in Pennsylvania held that the assignment having been accepted by a portion of the creditors at the time of its delivery, was valid. Justice Yates considered the fact that it proposed to put all the creditors upon terms of perfect equality, as a strong circumstace in favor of the validity of the assignment; in analogy to the general principles of the bankrupt law, which was in force at the time the debts were contracted, Brackenridge, J., however, considered the assignment illegal and void, both by the common law and by statute. He says, “ It is not simply the surrender of his property as satisfaction pro rata of his debts that the insovent here has in view. He couples an interest for himself, in obtaining a discharge from that proportion of the respective debts which may remain unsatisfied. It is taking an undue advantage of the situation of a creditor to impose this condition. It is immoral to exact it. Volenti non fit injuria, if the creditor accepts; but it is making a volunteer by compulsion, and is in fact a robbery. One enlightened on the principles of moral honesty would never think-of it. He would give what he had, to one or more, or to the whole of his creditors; but he would never think of annexing a condition precedent or subsequent to such surrender.” It must also be borne in mind that the court of errors in Pennsylvania had before that time, in the case of Burd v. Fitzsimmons, (4 Dall. 76,) decided that an assignment to trustees named by the debtors, without the assent of the creditors, and containing such a clause, was void. And it was not the intention of the court in Lippincott v. Barker to overrule that decision. In the case of The King v. Watson the creditors were made parties to the assignment; and those who had actually executed it had debts due to them exceeding the full value of the assigned property. It was therefore a fair devotion of his whole property to the payment of those particular creditors, whether any others' came in and signed the deed within the limited time or otherwise. In this respect, therefore, it was like the case of Lippincott v. Barker. The manuscript opinion of Judge Washington has since been published, (Pierpont & Lord v. Graham, 4 Wash. C. C. Rep. 232,) and as far as I can understand the same, it is in favor of the principle which Judge Story considered settled in such a manner as to induce him to yield- his own opinion to what he considered the weight of authority. On a question of this kind, I should consider ■the opinion of Judge Story as entitled to equal weight with that of the late Judge Washington; and if the case in Price could be considered as an authority in point, I should think the opinions of Chancellor Kent and Chief Justice Spencer alone, to say nothing of the other judges of the supreme court of this state who have concurred with them in opinion on this question, as more than overbalancing the opinions of the judges who occupied the bench of the English court of exchequer at the time the case of The King v. Watson was decided. In addition to this, we have the case of Ingraham v. Wheeler, (6 Conn. Rep. 277,) which was not published, and was therefore unknown to Judge Story at that time; in which the principle adopted in the case of Hyslop v. Clarke is fully sustained.

There are, howevei-, two other provisions in this assignment, which render it still more objectionable than the simple clause excluding those creditors who should not come in within a limited time and give their debtors a general discharge. In the first place, no time is limited within which the creditors of the second class are to come in to entitle themselves to a share of the surplus; but each is to come in within three months after the assignees may think proper to give him a written notice to accept or decline the offer held out to him by the assignment. Suppose the assignees should think proper to give one of the creditors a written notice to release his debtors within three month, or to forfeit all claims under the assignment: if he executes the release, he has no security ¡¿hat the other creditors will be called on in the same way, within any reasonable time. His remedy even for a share of his debt may therefore be delayed for years, if the friendly assignees named by the debtor himself think proper to delay the call upon other creditors. And it is no answer to this objection that the creditor may obtain relief by simply subjecting himself to the trouble and expense of a chancery suit, to compel the assignees to give notice to the other creditors to make their election. The question is not whether there is not a remedy for the creditors, but whether the debtor has not deprived them of any remedy for the recovery of their debts, unless they resort to a court of equity to counteract the illegal effect of the arrangement which has been made. In the case of Pierpont & Lord v. Graham, Judge Washington admits that if no time is fixed by the assignment within which the creditors may come in, or a very distant period is named, the assignment must be considered as fraudulent. And certainly it cannot be better, where it is left entirely in the power of the debtor, or the trustees of his own choosing, to fix that time for themselves, without the consent of the creditors.

What I consider a still more objectionable feature in this assignment, is the provision which authorizes the asssignees to compound with all or any of the creditors, in such manner and upon such terms as they shall deem proper, provided It does not interfere with the order of preference thereby established. The order of preference is to pay.the debt due to the Beaches in the first place; then the creditors of the first cltfts ; then .those of the second who shall have agreed to discharge the debtors; and then those of the third class, together with other creditors not named, if any there are. And if I understand the meaning of this provision, it has placed it in the power of the assignees to compound with any one of the creditors of each class, and to pay him a gross sum^i lieu of his debt, whether such sum be more or less than he would otherwise be entitled to under the assignment- The effect of this provision, therefore, is to perpetuate the right of giving preferences, by vesting in the assignees an arbitrary power in relation to these several classes of creditors, and of compounding with any one upon such temas as they may think proper. If all the creditors of the second class should come in and consent to the terms of the assignment, the assignees are at" liberty to pay any one of them a gross sum in lieu of his share of the fund, in advance, although it may be either more or less than he might be entitled to on a final settlement of the trust. And those who might not be willing- to come in and discharge the debtors on any other terms, may be induced to accede to the assignment under a promise of a liberal compromise. I do not believe that the respectable gentlemen who are named as assignees in this case, would allow themselves to use the power conferred on them in this way. But it might be used in that way by friendly assignees named by the debtor. It is therefore to the principle of such a provision that I must enter my dissent. If it can be sanctioned in this case, it would be equally valid in an assignment to a trustee who would not be restrainedffrom exercising the power by any very nice scruples on the subject.

Upon the whole, I am constrained to say that this assignment does upon its face contain provisions which render it illegal and void as against these complainants, and it must therefore be set aside.

I agree, however, with the suggestion in the answer of the assignees, that they are not to be holden accountable for that part of the proceeds of the assigned property which had been paid over by them to the preferred creditors previous to the commencement of these suits. If the pews are not exempted from sale on execution, the complainant who has the oldest judgment at law, may now take out a new execution and have them sold thereon to satisfy his debt, as far as it will go; Yut as to the other part of the property, I do not understand thavany of it was remaining when the executions were issued on the judgments. The complainants have therefore acquired no lien upon any of the property or effects of Grover and Gunn, or the proceeds thereof, which had been appropriated for the payment of other creditors, at the time these suits were commenced. It is the filing of the bill in this court, And not the return of the execution unsatisfied, that gives the creditor a specific hen upon property which was not liable to be sold on the execution at law at the time that execution was issued, or at any time afterwards.

There must be a decree in each of these causes, setting aside the assignment as fraudulent and void as against the complainant. And there must be a reference to the injunction master of the seventh circuit, in the first of these causes, to take an account of the proceeds of the assigned property and effects in the hands of the defendants, Garrów, Miller and Dill, after allowing them for all payments made to the creditors of Grover and Gunn, pursuant to the provisions of the assignment, previous to the filing of the bill, and their necessary expenses and disbursements in collecting or converting the assigned property into money; and the master is to allow interest as shall be just. The master is also to ascertain and report the amount due to the complainant for principal and interest on his judgment. And a similar account is to be taken in the second suit, unless the parties therein agree to abide by the account to be taken in the first suit. But in case of such agreement, then the master is also to compute the amount due to the complainant in the last suit for the principal and interest due on his judgment; and the counsel for such complainant is also in that case to be permitted to attend the master, upon the talcing of the account in the first suit. If the parties cannot agree to take the account in one suit only, then the accounts in both suits must be taken at the same time, and the causes must proceed pari passu ; so that the defendants may not be subjected to any unnecessary expense or trouble upon the taking of such accounts. And the master is to have the usual power to examine the parties on oath, and to compel the production of books and papers. The assignees are also to be at liberty to pay into court, to be invested, the balance of the proceeds of the assigned property admitted to be in their hands; which shall discharge them from all claim for interest or losses on such balance from the time it is so paid into court.

All further questions and directions are to be reserved until the coining in of the master’s report, or until the further order r ' of the court. (a)

p (a) The assignment in the case of De Caters v. Le Ray De Chaumont, (2 Paige’s Rep. 490,) contained a similar provision. But as all parties were seeking to affirm that assignment, and the creditors who were complainants asked the benefit thereof, there was nothing to prevent its being carried into ef. feet; although the creditors might have proceeded in a different manner to reach the property.