text:
    The Sea Insurance Company vs. Day and others.
    Where the defendants in a foreclosure suit, who had set up the defence of usury in their answer which was put in without oath, applied for an issue to try the question of usury by a jury ; Held, that an issue ought not to be granted without an affidavit showing some probable grounds for believing that the defence of usury could be sustained by proof, and that the issue was not asked for by the defendants for the purpose of delay merely.
    December 11.
    This was an application, by the defendants, for an issue to try the question of usury set' up in the answer. The complainant resisted the application on the ground that the answer, setting up the defence of usury, was put in without oath, and that the allegation of usury therein was untrue in point of fact.

      C. M. Jenkins, for the complainant.

      C. Stevens, for the defendants.
   The Chancellor

said, that to entitle the defendants to an order for an issue to be tried by a jury, in such a case, they must show by affidavit or otherwise, to the satisfaction of the court, that they had probable grounds of defence, and that the answer was not put in for mere delay. That as the answer in this case was not sworn to by any one who was willing to state on oath that he believed the allegation of usury could be sustained by proofs, the awarding of an issue would be productive of unnecessary expense and delay.

Motion denied with costs.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Thomas vs. Brown and others.
    Where the holder of a bond and mortgage commenced an action at law upon the bond to obtain satisfaction of the debt, and afterwards, upon ascertaining that the defendants were insolvent, filed a bill of foreclosure to obtain payment of his debt ont of the mortgaged premises, and the defendants who had put in a defence to the action at law applied to the court in which the action was pending, and obtained an order that the plaintiff proceed to trial, or that judgment as in case of nonsuit be entered; Held, that the defendants must consent to a discontinuance of the action at law without costs, or that the court of chancery would permit the plaintiff to proceed to trial in that action, notwithstanding the pendency of the foreclosure suit.
    January 5
    , This was an application by the complainant in a foreclosure suit for leave to proceed to judgment in actions at law commenced for the recovery of the mortgage debt. Previous to the filing of his bill the complainant had commenced suits at law against some of the defendants, who had become personally responsible for the payment of the mortgage debt. But such defendants having subsequently failed, he filed his bill in this cause, to foreclose the mortgage, and made them parties here. Those defendants having put in pleas in the actions at law, applied to the supreme court and obtained orders that the plaintiff proceed to trial therein, or that judgments as in case of nonsuit be entered.

      Ji. Taber, for the complainant.

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

If the defendants in the suits at law consent that those suits may be discontinued without costs, the complainant will not be permitted to proceed to trial there. But as the suits were commenced in good faith and the complainant was afterwards compelled to resort to his bill of foreclosure, to obtain satisfaction of his debt out of the mortgaged premises, in consequence of the insolvency of the defendants who had been sued at law, he must be permitted to proceed to trial there if the defendants wish to test the question whether he is liable to pay their costs in those suits. If the defendants succeed in their defence in those suits, they will of course be entitled to their costs in the supreme court. But if they fail, the plaintiff’s costs must abide the further order of this court. And he is only to be permitted to proceed so far, in the suits at law, as to entitle him to enter up his judgments if he succeeds; but no judgment records are to be filed there until the further order of this court.

Order accordingly.


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    Veeder vs. Moritz.
    In verifying a bill for the mere purpose of calling for an answer on oath, tm* der the provisions of the 17th rule of the court of chancery, or in comply, anee with the rule requiring creditors’ bills to be sworn to, it is not neces*. sary that any of the allegations in the bill should be sworn to positively.
    January 24.
    This was an appeal from a decision of the vice chancellor of the first circuit, denying an application to take the complainant’s bill off the files of the court, upon the ground that it was not properly verified.

      J. T. Brady, for the appellant.

      R. W. Peckham, for the respondent.
   The Chancellor.

The only question in this case is whether the complainant’s bill was properly verified so as to authorize the clerk to file it; the allegations therein not being sworn to positively, but merely upon the information and belief of the deponent. In ¡verifying a bill for the purpose of calling for an answer upon oath, as directed by the 17th rule of this court, or for the mere purpose of rendering a creditor’s bill regular under the rules which requires such bills to be verified by the oath of the complainant or of his agent or attorney, it is sufficient if the allegations are sworn to upon the information and belief of the complainant, or other person who verifies the bill.

Order appealed from affirmed, with costs.


text:
    The Albany City Bank vs. Schermerhorn and others.
    The statute allows two modes of proceeding against parties as for contempt, to enforce civil remedies; by attachment to bring the party into court to answer for the alleged contempt, or by an order for the accused to show cause why he should not be punished for his alleged misconduct. But in either mode of proceeding the party complaining of the alleged misconduct must lay a foundation for the proceeding, by affidavits, or other evidence, that the accused is in contempt.
    Where the party complaining of a contempt proceeds by an order to show cause why the accused should not be punished for the alleged misconduct, the order to show cause, and copies of the affidavits and other papers upon which the application is founded, or so much of them as is not already in the possession of the accused, must be served on him, or his solicitor, such length of time before the hearing as the court may direct in such order.
    Upon an order to show cause why a party should not be punished fora contempt, if such party neglects to appear at the time appointed, or shows no sufficient cause, the court may make a final order, immediately, adjudging that he has been guilty of the alleged contempt, and awarding the proper punishment as directed by the statute.
    But if the contempt is denied, the court may discharge the order to show cause; or may allow the prosecutor to file interrogatories, and then refer it to a master to take the answers of the accused to such interrogatories, and to receive such testimony, as to the alleged contempt, as either party may offer before him, and report the answers to the interrogatories, and the testimony taken before him, to the court. But the proofs before the master, and not merely his opinion_upon such'proofs, must be reported tojthe court-Where a party proceeds by attachment for the alleged contempt, he must file interrogatories and obtain the answers thereto before the court can make a final order; unless the accused upon being brought into court upon the attachment admits the contempt, as charged.
    The order of the court convicting a party of a contempt, in a proceeding to enforce a civil remedy, should recite the substance of the alleged misconduct, the adjudication of the court that the accused has been guilty thereof, and that such misconduct was calculated to and did impair, defeat, impede and prejudice the rights or the remedies of the prosecutor, or the parties in the cause ; and should direct the payment of a fine sufficient to indemnify the party injured and to satisfy the costs and expenses of the proceeding. And where any thing remains to be done by the accused party to purge his contempt, the order should specify particularly what he is to do, and the manner in which it is to be done, to entitle him to his discharge from the commitment, upon payment of the fine, &e.
    Where a party is convicted of a contempt, the order adjudging him to be guilty should not direct him to pay the costs of the proceedings to he taxed. But the costs should be taxed and inserted in the order, as a part of the fine imposed upon the party who is in contempt.
    Where a receiver, appointed in a creditor’s suit, is entitled to the personal prop- " erty of the defendant, and the rents and profits of his real estate, if the defendant neglects to make an assignment so as to give to the receiver a legal title to the property, the court, upon a bill filed by the receiver, will protect his rights against sheriffs and others who have seized upon the property to prevent his obtaining possession thereof.
    But the court cannot protect the rights of the receiver by a summary proceeding against a person, not a party to the suit, who seizes upon property which has never been in the possession of the receiver or his agents.
    After the tenants of a party have attorned to a receiver, under an order of the court, the court will not allow them or any one else to question the right of the receiver, by disturbing his possession.
    Where a receiver is in possession of real estate which is subject to the lien of a judgment, the sale of the premises by the sheriff, Upon an execution on such judgment, does not disturb the possession of the receiver; and the sheriff cannot, therefore, be proceeded against for a contempt in making such sale. But the purchaser cannot disturb the possession of the re- • ceivcr, when he obtains his conveyance from the sheriff, without the permission of the court.
    Whether the court of chancery, upon a creditor’s bill, will authorize the receiver to take the rents and profits of the defendant’s real estate, which has been sold on execution, during the fifteen months allowed for the redemption thereof; Quare ?

    January 24.
    This was an appeal by D. Perrin & J. Boardman, the late sheriffs of the counties of Monroe and Orleans, from a decretal order of the vice chancellor of the eighth circuit, adjudging them to-be in contempt, and ordering them to pay the costs of the proceedings to be taxed, and to deliver up to the receiver in these causes the property levied upon by them respectively ; and that they be committed until the order should be complied with. From the certificate of the clerk it appeared that the only papers used before the vice chancellor, upon the making of the order appealed from, was the report of the master to whom it had been referred to take the answers to the interrogatories and to report the facts in relation to the alleged contempt, the interrogatories and answers thereto, and the order to show cause why an attachment should not issue ; which last mentioned order was not produced upon the hearing of the appeal.

      S. R. S. Mather, for the appellants.

      G. H. Mumford, for Pond the receiver.
   The Chancellor.

The necessary papers are not before me, on this appeal, to enable me to decide the case upon the merits ; nor were all the papers which the law requires before the vice chancellor, upon making the order appealed from, according to the certificate of the clerk. The statute relative to proceedings as for contempts to enforce civil remedies and to protect the rights of parties in civil actions, has prescribed two modes of proceeding, where the misconduct complained of is not committed in the immediate view and presence of the court; except in the two cases, of disobedience to a rule or order for the payment of money, and disobedience to a subpoena. One of the prescribed modes is by an order on the accused party to show cause, at some future time to be specified in the order, why he should not be punished for his alleged misconduct ; and the other is to grant an attachment, to arrest the accused and bring him before the court, to answer for such misconduct. (2 R. S. 535, § 5.) In either mode of proceeding, however, the party complaining of the alleged misconduct must produce proof thereof, by affidavits, or a sworn petition, or other legal evidence, as the founds tion of the proceedings. (Idem, § 3.) Where the party proceeds by an order to show cause, copies of the order, and of the affidavits and other papers on which it is founded, and of such other documentary evidence as the prosecutor wishes to use in the case, or so much thereof as is not already in the possession of the accused, must be served on him, or on his solicitor, such length of time, previous to the day appointed for showing cause, as the court shall in such order direct. And then if the party accused does not appear at the day appointed, or at such other day as may be afterwards designated for that purpose, or if he appears and does not deny the alleged misconduct, the court may at once proceed to make a final decision, that the accused has been guilty of the contempt charged, and to award the proper punishment, as directed by the statute. (2 R. S. 538, § 19 to 24.) If the alleged misconduct is denied, the court may discharge the order to show cause ; or may allow interrogatories to be filed and refer it to a master to take the answers of the accused to such interrogatories, and to take such proof as either party may wish to offer, and report the same to the court. But the proofs themselves should be reported to the court, and not merely the master’s opinion thereon. For the statute directs the court to determine upon the original affidavits, the answers of the defendant, and such subsequent proof, whether the accused has been guilty of the alleged misconduct. (Idem, § 19.)

Where the prosecutor proceeds by attachment, if the defendant is brought into court or voluntarily appears thereon, the court is required by the statute to cause interrogatories to be filed, specifying the facts and circumstances of misconduct alleged against the defendant, and requiring his answer thereto. This appears to be absolutely necessary, in a proceeding by attachment, unless the defendant admits the alleged contempt. Upon suchinterrogatories being filed and answered, the court may proceed in a summary manner to decide the question as to the guilt of the accused ; or may refer it to a master to take the answers of the defendants to the interrogatories, and to take and report such other evidence as either party may wish to produce before him relative to the contempt.

In this case the receiver proceeded against the appellants by attachment; and not by an order to show cause why they should not be punished for their alleged misconduct in disturbing him in his right to the property, over which he had been appointed receiver, as the officer of the vice chancellor’s court. He had previously obtained an order for the appellants to show cause why an attachment should not issue, instead of giving them the ordinary notice of a motion for an attachment. The alleged contempt for which that attachment issued, however, was not the neglect of the appellants to restore the property and pay the costs, under the order of the 16th of September, 1840. For that was not an absolute order to restore the property. But it was a conditional order merely ; a compliance with which would have stayed all further proceedings against the defendants for their alleged misconduct in disturbing the possession of the receiver. The interrogatories, therefore, instead of being directed to the question whether the defendants had complied with the conditions of this alternative order, should have been directed to the facts of the contempt as stated in the petition upon which that order was founded: to wit; the time of the commencement of these suits ; the fact of the making of the order for the appointment of a receiver therein; the nature and substance of that order, by a reference to a certified copy thereof or otherwise ; the due appointment of the relator as receiver, under that order ; the seizure of the property, over which he had been appointed receiver, by execution issued subsequent to his appointment; the actual or constructive possession of the property by the receiver, by an attornment of the tenants or otherwise, at the time it was seized by the sheriffs, &c. And these interrogatories should have been answered by the defendants personally, and not by deputy. Where the facts of the alleged contempt are not known to the defendants personally, or are not admitted by them, the prosecutor may use his petition and original papers, upon which the order for attachment was granted to prove the facts; or he may introduce other evidence before the master for that purpose. But the defendants are entitled to the benefit of their answers to interrogatories, to disprove the alleged contempt, so far as they will go; subject to be contradicted by the affidavits or other evidence of the prosecutor.

So far as I can understand this case from the master’s report, there is no question as to the equitable right of the receiver to all the personal property of Schermerhorn, in which he had any interest at the time of the commencement of these suits, and to the rents, profits and income of the real estate which accrued after that time; provided such property or rents and income had not been reached by the executions of other creditors before this court made an equitable sequestration thereof by its order for the appointment of a receiver. (Tanfield v. Weston, 2 Sim. & Stu. Rep. 96.) And if Schermerhorn neglected to comply with the order to make an assignment so as to give the receiver the legal title to the property, or if the tenants refused to at-torn to the receiver and to deliver over to him the shares of the crops to which he was entitled as such receiver, this court upon a proper bill filed will protect his rights against the sheriffs or others who have seized upon such crops.

The right to proceed against the appellants as for a contempt, however, depends upon the question whether the receiver, either by himself or his agents or tenants, was in possession of the property at the time it was seized by the appellants, and not upon the mere right of the complainants to reach such property by a creditor’s bill. The court will not let the possession of the receiver, which is that of the court itself, be disturbed by any one without its permission. (Noe v. Gibson, 7 Paige's Rep. 513.) Nor will this court, where it has made an order for the appointment of a receiver of real estate, and the tenants have attorned to such receiver under the order of the court, permit the tenants or any other persons to question the right of the court to grant such receivership, by disturbing the possession, of its officer. It is not a question, therefore, for consideration, upon these proceedings, whether the court is authorized upon a creditor’s bill to reach the rents and profits of real estate during the fifteen months allowed for the redemption of such estate when sold on execution. If the tenants had attorned to the receiver, or had agreed to account to him for the share of the crops, &c. belonging to the landlord, before the sheriffs levied their executions thereon, the appellants were not authorized to disturb such constructive possession of the receiver. And they may be compelled to restore the property, or the value of it, in this summary way. On the other hand, if the receiver was not in possession, either by himself or his tenants by attornment, or by his agents, he cannot enforce a delivery of this property to him by proceedings as for a contempt against the sheriffs who have levied thereon ; although he may have an equitable right to recover the same by a bill in this court, founded upon the previous order to appoint a receiver.

The facts are not sufficiently ascertained in the papers upon which the final order in this case was made, to enable me to decide whether the appellants were actually in contempt, or if so, to what extent. Certainly it was no contempt to levy upon the real estate of Schermerhorn, under a judgment against him, and to sell the same to the highest bidder; as that could not disturb the possession of the receiver, even if the tenants had all attorned to him. For the purchaser at such sale, after the expiration of the time allowed for redemption, would of course have the right to ask this court to give him the possession of the land, if the judgment under which he purchased was prior in point of time to the filing of the complainants’ bills. And if such purchaser attempted to divest the possession of the receiver without permission of the court, he alone would be guilty of the contempt; and not the sheriffs, who had merely sold the interest of the judgment debtor in the real estate, subject to all just claims of the receiver or of any other persons thereon.

Even if there was no other difficulty in this case, the form of the order is not such as the statute authorized, upon a conviction for a contempt. The order is also one which it will probably be impossible for the appellants to comply with. And therefore if it is permitted to stand in its present form, they may be subjected to perpetual imprisonment. The property levied upon, in the summer of 1840, consisted principally of grass, and of winter and summer crops then on the ground, or of the portions thereof which by the conditions of the leases would belong to the landlord. And from the very nature of the property it is hardly possible that the appellants should have been able to return it to the receiver, in the form in which they received it, at the time when the order appealed from was made in the fall of 1841. The master should therefore have ascertained the value of the property improperly taken, and the present situation of such property; to the end that if it could not be restored to the receiver, a fine might be imposed sufficient to indemnify the receiver for the loss, in addition to the costs of the proceedings. (2 R. S. 538, § 21.)

The order, upon a conviction for a contempt of this description, should be drawn up in proper form ; reciting the substance of the alleged misconduct, the adjudication of the court that the accused had been guilty of the contempt, and that such misconduct was calculated to and did impair, defeat, impede and prejudice the rights or remedies of the prosecutor, or of the parties in the cause; and imposing a fine sufficient to indemnify them and to satisfy the costs and expenses. Where any thing further remains to be done by the party guilty of the contempt, the order should also specify particularly v/hat he is to do, and the manner in which it is to be done, to entitle him to his discharge upon the payment of the fine imposed. And where the fine embraces several particulars, as where a part is for the loss or injury sustained by the contempt, and a part to satisfy the costs and expenses of the proceedings, the amount of each should be specified. The order should also direct to whom the fine is to be paid, or what is to be done with such fine when paid, &c.; so that the order, and the process of commitment founded thereon, may show the nature of the conviction, and what the defendant is to do to entie } tie himself to a discharge from his imprisonment. And instead of directing, in the order, the payment of the costs of the proceedings, to be taxed, the costs should be ascertained, and included in the order, as the fine or as a part of the fine to be imposed upon the defendant. (See The People v. Rogers, 2 Paige's Rep. 104.)

The decretal order appealed from must therefore be reversed, without costs to either party on this appeal. And the proceedings must be remitted to the vice chancellor, with directions that the respondent file new interrogatories, to be answered by the appellants respectively, specifying therein the facts and circumstances of misconduct, See. alleged against them and to refer it back to the master to take the answers to such interrogatories, and to take such proof as may be offered by either party in relation to the alleged contempt, specified in the petition and papers upon which the alternative order of the 16th of September, 1840, was founded ; also to ascertain what damages or injury the receiver, or the complainants in these suits, have sustained by reason of the interference with the property which was in the possession of the receiver or of his agents or tenants j and whether any such property is still in the possession or under the control of the appellants respectively, so as to enable them to restore it to the receiver, and if so, to state what such property is, and the present situation thereof j and that the master report the answers to such interrogatories, the amount of such damage or injury, and the proofs and other papers produced before him, to the vice chancellor y that the vice chancellor, upon such answers and the proofs, &c. and on the petition and other papers upon which the alternative order for an attachment was founded, proceed and decide the question whether the appellants, or either of them, have been guilty of the alleged misconduct, &c. or of any part thereof, as specified in the said petition ; and that he give the necessary consequential directions rounded upon such adjudication, pursuant to the directions of the statute, on the subject of such contempts, and the course and practice of this court.


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    C. & C. H. Sigourney vs. Waddle & Butler.
    It seems that the statute rendering the attorney of a non-resident plaintiff liable for the defendant’s costs to the extent of $100, does not apply to solicitors of the court of chancery in suits commenced there. But a.similar liability is incurred by a solicitor, in suits in the court of chancery, under the provisions of the 16th rule of that court.
    The extent of the liability of the complainants’ solicitor, to all the defendants in the suit, under the provisions of the 16th rule of the court of chancery, cannot exceed $ 100. And it seems that where a non resident complainant appeals, his solicitor is not liable, under that rule, for the defendant’s costs on the appeal.
    The complainant is personally liable to the defendants for their costs, in cases in which the solicitor is also liable under the provisions of the 16th rule of the court of chancery. And it is not proper to make it a part of the decree in the suit that the solicitor shall pay any part of the defendants’ costs. The proper course is to decree a payment of the costs by the complainant, as the remedy against the solicitor is by a summary proceeding to enforce his liability under the rule of the court.
    Applications were made in behalf of each of the defendants in this cause, they having appealed by separate solicitors, for orders to compel the solicitor of the complainants to pay the costs of two interlocutory applications, theretofore made by the complainants, for the retaxation of the costs of the defendants respectively on the appeal to the chancellor. The complainants were non-residents of the state, and the bill was filed before the vice chancellor of the first circuit, without any security for costs having been given. Upon the hearing of the cause before the assistant vice chancellor, the complainants’ bill was dismissed with costs as to each defendant. It was also made a part of that decree that the complainants’ solicitor should be personally liable for $100 of the costs of the defendant Butler, and that that defendant have execution against the complainants for the residue thereof. But the costs of the other defendant were directed to be offset against the judgment which the complainants held against him. An application was afterwards made to the vice chancellor to open this decree, which had been taken by default against the complainants, but the. motion was denied. The appeal to the chancellor was from the order denying that motion; which order was affirmed on appeal. And the solicitor for the complainants subsequently paid to the solicitors for the respondents $52,50, for their taxed costs on the appeal.

      January 24.

      C. Stevens, for the defendants.

      C. M. Jenkins, for the complainants’ solicitor.
   The Chancellor.

The statute making the attorney of the plaintiff liable for the costs of the defendant, to an amount not exceeding $100, where he commences a suit in which the defendant is entitled to security, without filing the requisite bond, does not appear to extend to solicitors in chancery, in suits commenced here. (2 R. S. 621, § 7, 8.) A similar liability, however, is incurred by a solicitor, in this court, under the provisions of the 16th rule. But the extent of the liability of the solicitor, under that rule, to all the defendants, can never exceed one hundred dollars. If the defendants are not satisfied with that, they should apply, before they have incurred heavy expenses in defending the suit, and obtain an order that the complainants give security in the usual form. I am inclined to think, however, that the liability of the solicitor, under the 16th rule, ought not in any case to be extended to the costs of the appellant on an appeal. For by the statute and the rules of the court, the party appealing is, in all cases, required to give security for the respondent’s costs on the appeal, before the appeal can be perfected.

It was certainly erroneous to make it a part of the decree that the solicitor should be first charged with the costs of the defendant, to the extent of $100, and that the complainants should only be liable to execution for the residue. For the complainants themselves are primarily liable for the costs; and their solicitors should only be resorted to when the defendants are unable to collect their costs from the complainants. Nor should it in any case be made a part of the decree that the solicitor pay the costs, even where his client has no property within the reach of the process of the court. For the solicitor cannot properly be charged except by summary proceedings against him, to enforce his liability under the rule. But a decree having actually been made by the court below, against the solicitor for the payment of costs, and subjecting his property to execution for the whole amount of the $100 which he could in any event be made liable for under the rule, he should not have been subjected to the expense of opposing these applications, to charge him for the further costs arising out of the proceedings upon the appeal.

The motion on the part of each defendant must therefore be denied, with $12 costs, to be paid by such defendants respectively, to Watson the solicitor.


text:
    Latting vs. Hall and others.
    To authorize the complainant, on a hearing upon hill and answer, to read deeds or other instruments in writing set out in the bill, under the provis. ions of the 17th rule of the court of chancery, he must not only set out the deed or other instrument in his bill, but he must also state therein that such deed or instrument has been duly acknowledged, or proved, in such a manner as to entitle it to be read in evidence without further proof.
    Where the complainant supposing that a deed set out in his bill had been admitted by the answer of the defendant, and has therefore through inadvertence omitted to file a replication and make proof of the execution of the deed, if he discovers his mistake for the first time at the hearing of the cause upon bill and answer, his proper remedy is to apply to the court to postpone the further hearing of the cause to a future day, to enable him to make a special application for leave to file a replication and prove the execution of such deed, upon such terms as may be equitable and just.
    January 24.
    This was an appeal from an order of the vice chancellor of the first circuit refusing a rehearing, upon the application of the complainant. The cause was brought to hearing upon bill and answer. Upon the hearing the defendant’s counsel objected that an assignment of the mortgage, under which the complainant claimed a decree in his favor, was not admitted by the answer. The complainant’s counsel thereupon asked that the hearing of the cause might be suspended a few minutes, until he could step into the adjoining room and prove the assignment before a commissioner, and thus to enable him to read it on the hearing, under the provisions of the 17th rule of the court of chancery ; the counsel himself being the subscribing witness to such assignment. This permission was refused by the court; and the complainant’s bill was dismissed, with costs, on the ground that there was no proof or admission of the assignment. Upon these facts the complainant asked for a rehearing, which was denied.

      S. M. Woodruff, for the appellant.

      J. Rhoades, for the respondents Hall and wife.
   The Chancellor.

The vice chancellor very properly decided that this was not a case in which the complainant could obtain relief by a rehearing. For the complainant’s counsel was under a mistake in supposing that if he had proved the assignment before the commissioner, during the argument, he could have read the same in support of the allegation in his bill, under the 17th rule of this court.

Previous to the amendment of that rule, in 1839, no evidence whatever could be gone into at the hearing upon bill and answer. And no documents could be read in support of the complainant’s bill except such as were distinctly admitted in the answer, although they were matters of record, or were duly proved or acknowledged, so as to admit them to be read in evidence in any suit or proceeding without further proof. The 17th rule, as amended, obviates the difficulty and delay of filing a replication for the mere purpose of introducing record evidence, or evidence arising from deeds or other instruments duly proved or acknowledged, in case the defendant does not think proper to put such prima facie evidence in issue, by his answer, after being distinctly apprised of its existence by the statement thereof in the bill. But to entitle the complainant to read such documentary evidence in support of his bill, on the hearing upon bill and answer, he must, where it consists of a deed or other instrument duly proved or acknowledged, not only state the existence of the deed or instrument itself in his bill, but it must also appear from the bill that such deed or instrument has been duly acknowledged, or proved, in such a manner as to make it legal evidence without any further proof than the production of the same, or the production of an exemplification of the record thereof, at the hearing.

In the present case, as the assignment of the mortgage had not been proved or acknowledged at the time of filing the bill, it could not be so stated therein as to entitle the complainants’ to read it in support of that allegation in the bill, under the provisions of the 17th rule, upon a hearing of the cause on bill and answer. The proper course for the complainant’s solicitor and counsel, therefore, when he discovered for the first time, at the hearing, that the defendants had not in their answer admitted the execution of the assignment of the mortgage, and that he had through inadvertence neglected to file a replication and prove the fact in the usual way, was to have asked the vice chancellor to let the hearing stand over to some future day; to enable him to make an application for leave to file a replication and to prove the execution of the assignment, upon such terms as to costs or otherwise as should be equitable and just. And if the bill has been dismissed generally, and there is not merely a decree of dismissal without prejudice to the complainant’s right to institute a new suit upon the mortgage, relief should now be extended to him on some equitable terms. For the complainant ought not to be forever barred and precluded from asserting a just claim to relief, in consequence of this mere technical mistake of his solicitor. The prayer of the petition in this case, however, was not so framed as to authorize the vice chancellor to grant the proper relief thereon.

The order appealed from must therefore be affirmed with costs j but without prejudice to a new application to set aside the decree of dismissal, on terms, and for such relief in the premises as the complainant may be advised to ask for. And the proceedings are remitted to the vice chancellor, to the end that such an application may be made to him.


text:
    Platt vs. Cadwell & Rossiter.
    Where an execution upon a judgment at law is made returnable in sixty days after its receipt by the sheriff, and such execution is returned unsatisfied, the plaintiff in the judgment may file a creditor’s bill in this court founded upon such return at any time after the expiration of the sixty days, although the execution was actually returned by the sheriff before the sixty days had expired. If the return of the sheriff in such a case is irregular, the remedy of the defendant is to apply to the court of law to set aside the return for irregularity.
    Where a creditor’s bill is filed in the court of chancery, founded upon an improper or an irregular return of an execution by the sheriff, the court ot chancery will stay the proceedings upon the bill a reasonable time, to enable the defendant to apply to the court of law to set aside the sheriff’s return upon the execution; where there is a reasonable probability that the court of law will grant such application.
    January 24.
    This case came before the court upon a demurrer to an ordinary creditor’s bill, filed against the judgment debtors, as to both of whom executions had been returned unsatisfied. The grounds of the demurrer were, that the executions were made returnable sixty days after the receipt thereof by the sheriff, according to the directions of the act of May 14th, 1840, (Laws of 1840, p. 334, § 24,) and that the sheriff actually returned the executions before the expiration of the sixty days; although the complainant’s bill was not filed until more than sixty days had elapsed after the delivery of the executions to the sheriff.

      C. A. Mann, for the complainant.

      A. W. Bradford, for the defendants.
   The Chancellor.

This court does not inquire into the regularity of the proceedings of courts of co-ordinate jurisdiction. And the return of the executions in this case, even if they were liable to be set aside for irregularity by the court out of which they issued, were not void. The complainant, therefore, after the return day was past, had a right to consider his remedy at law as exhausted, and to file his bill here to reach the effects of the defendant which could not be levied on by the sheriff. And if the filing of the executions, with the return endorsed thereon, before the expiration of the sixty days, was irregular, the defendant must apply to the court of law to set aside the returns. (Williams v. Hogeboom, 8 Paige's Rep. 469.) All that this court can do in such a case is to compel the complainant to wait until after the return day of the execution is past before he files his bill here. (Cassidy v. Meacham, 3 Idem, 311.) And it will, when necessary, stay the proceedings here a sufficient length of time to give the defendant an opportunity to apply to the court of law for relief, where there is a probability that such relief will be granted.

Demurrer overruled with costs.


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    Van Doren and others vs. The Mayor &c. of New-York. Striker vs. The Same. Pearson vs. The Same.
    Where a valid legal objection appears upon the face of the proceedings through which the adverse party can alone claim title to the complainant’s land, there is not in law such a cloud upon the complainant’s title as to authorize him to apply to a court of chancery to set aside such proceedings. But where the claim of the adverse party to the land is valid upon the face of the proceedings or of the instrument which the complainant seeks to set aside, as in the case of a fraudulent or usurious deed where the establishment of extrinsic facts is necessary to shew its invalidity, the ¡court of chancery may interfere to remove such a cloud upon the complainant’s title. Where the proceedings upon the assessment of lands in the city of New-York are void upon their face, so that a purchaser at a sale under such assessment will not obtain a prima facie title to lands sold for the payment of the assessment, the court of chancery has no jurisdiction to interfere and set aside the assessment, or to stay the corporation from proceeding to sell the complainant’s land under the same; as the complainant has a perfect remedy at law. ^
    And where such proceedings are not void but merely erroneous, the court of chancery has no jurisdiction to correct the errors therein.
    January 24.
    These cases came before the chancellor upon the demurrers of the defendants, the corporation of New-York, to the bills of the complainants respectively. The object of the bill in each case was to restrain the corporation from collecting certain assessments upon property owned by the complainants, in the city of New-York, or in which they were supposed to have some interest either vested or contingent, such assessments having been imposed for the purpose of laying out streets and avenues or of opening sewers, &c., or from selling the lands assessed, or advertising the same for sale, or giving any certificate or lease to the purchaser upon the sale thereof, and to obtain a decree declaring the assessments and all proceedings had in relation thereto, void, &c.

      R. Mott & W. M. Holland, for the complainants in two first causes.

      iU. H. Sandford, for the complainant in the last cause.

      P. A. Cowdrey, for the corporation of New-York,
   The Chancellor.

The objection to the assessments, that the corporation, as at present organized under the act of April 1830, has no power to open streets, confirm assessments, &c. was decided against the complainant in the case of Wiggin v. The Mayor, Aldermen and Commonalty of New-York, in March last, (ante, p. 17.) And Í have no reason to change the opinion then expressed, although that case was not in a situation to enable the complainant to review the decision, upon that point, by appeal; as several technical objections existed to his right to the premises as stated in the bill. But if this objection to the right of the common council was well taken, it would only show that this court had no jurisdiction in these cases. , For a valid legal objection, appearing upon the face of the proceedings through which the adverse party can alone claim any right to the complainants’ land, is not in law such a cloud upon the complainants’ title as can authorize a court of equity to set aside or stay such proceedings. That can never be considered a legal cloud which cannot for a moment obstruct the unaided rays of legal science when they are brought to bear upon the supposed obscurity. But where the claim of the adverse party to the land is valid upon the face of the instrument, or the proceedings sought to be set aside, as where the defendant has procured and put upon record a deed obtained from the complainant by fraud, or upon a usurious consideration, which requires the establishment of extrinsic facts to show the supposed conveyance to be inoperative and void, a court of equity may interfere and set it aside as a cloud upon the real title to the land. (Simpson v. Lord Howden, 3 My. & Craig’s Rep. 97.) It was the overlooking of that distinction, in the hurry of business, though I had recognized and acted upon it in other cases, which led me to affirm the decision of the vice chancellor in the case of Meserole v. The Mayor & Common Council of Brooklyn, (8 Paige’s Rep. 199.) But my decision in that case was properly reversed by the „ court for the correction of errors, at its last term, in December, 1841 ; although the chief justice, who delivered the opinion of that court, concurred with me in the conclusion that the proceedings of the corporation of Brooklyn were illegal and void.

The same difficulty exists in relation to the objections that the ayes and noes were not called and published, upon the resolutions to make the improvements, and to confirm those assessments which were confirmed by the common council, and that the resolutions and ordinances were not duly signed by the mayor ; and to various other objections which are made to the legal validity of the assessments. All these objections, if valid, appear upon the face of the proceedings through which the corporation must justify the enforcement of the tax by execution; and through which the purchasers at sales of the lands of these complainants, for the assessments, must necessarily make title. If the complainants are right, therefore, in supposing the proceedings void on all or any of these grounds, upon which I express no opinion, there is no cloud upon their titles. And as their remedy at law is perfect, by an action of trespass if their property is seized upon a distress warrant for the assessments, and as they have a perfect defence at law to any suit brought against them by purchasers at the sales which have been made, or may hereafter be made, if the proceedings are void, this court has no jurisdiction to interfere for their relief. On the other hand, if the proceedings are not void but merely voidable, or irregular, the remedy of the complainants clearly is not in this court, which has no superintending jurisdiction over the regularity of the proceedings of the corporation of New-York in these assessment cases. Indeed, as I understand the prevailing opinion in the court for the correction of errors in the case of Meserole v. The Mayor and Common Council of Brooklyn, that court repudiated the idea that the court of chancery had any power or right to interfere in such cases, in relation to any supposed error or irregularity in the assessment, or in the proceedings of the corporation, or of the commissioners of estimate- and assessment. And this court will not again subject itself to the rebuke of that tribunal by interfering in any cases of this kind except where it is absolutely necessary for the preservation of the complainants’ rights.

The demurrers are well taken ; and the complainants’ bills must be dismissed with costs. And the injunctions, if any have been granted in these cases, must be dissolved.


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    Eights and others vs. Woodworth & Taylor.
    Opon the taxation of costs in mortgage cases, under the act of 1840 to reduce the expense of foreclosing mortgages in the court of chancery, only ten cents can be allowed for the fees of a county clerk for searching and certifying incumbrances upon the mortgaged premises, for each incumbrance found and certified, where the amount of such fees exceeds fifty cents.
    January 24.
    This case came before the court upon an appeal, by the complainants, from a decision of the taxing master, upon the taxation of costs in a mortgage case, on a bill taken as confessed. The complainants’ solicitor applied to the county clerk to search for deeds and mortgages, executed by the mortgagor, subsequent to the complainants’ mortgage, so far as they affected the mortgaged premises. By referring to the indexes to the books of records, the clerk found numerous deeds and mortgages given by the mortgagor. But on examining the record, only two of them were found to affect the mortgaged premises; which two incumbrances or deeds were certified by him accordingly. He charged $5 for the search, claiming ten cents for each deed or mortgage, from the mortgagor, which he examined ; although it turned out that they did not affect the mortgaged premises as to which he was searching. The complainants’ solicitor charged in his bill of costs the $5, paid to the county clerk. Of this charge the taxing officer struck out all but fifty cents; the minimum allowed for such searches by the 13th section of the act of 1840 to. reduce the expenses of foreclosing mortgages in the court of chancery.

      0. Mleny for the complainants.

      J. RhoacLeSj for the defendants.
   The Chancellor.

The taxing officer was right in this ease, in disallowing the illegal charge for seaching and certifying as to subsequent deeds and incumbrances of the mortgaged premises. The original fee bill contained in the revised statutes, allowed to the county clerk five cents a year for making such searches. But the 13th section of the act of the 14th of May, 1840, allows to the clerks of counties and registers of cities, for searching and certifying the title of and incumbrances upon real estate, ten cents for each conveyance and incumbrance certified by him,; fixing the minimum of such fees, however, at fifty cents, and the maximum at five dollars. (Laws of 1840, p. 290.) This provision may perhaps be considered as somewhat in conflict, so far as concerns incumbrances by judgment or decree, with the 33d section of the act, concerning costs and fees in courts of law and for other purposes, passed the same day, (idem, 335 ;) which section fixes the allowance to the county clerks at twenty-five cents, for searching for judgments and decrees for five years or under; including the transcript and certificate. But the charge in the present case comes exclusively under the act to reduce the expense of foreclosing mortgages. And it can only he taxed at the rate of ten cents for each conveyance of or incumbrance upon the mortgaged premises, found and certified j, where the charge at that rate amounts to fifty cents or more.

Motion for retaxation denied.


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    Souillard and others, executors, &c. vs. Dias.
    Where a suit in chancery abates, by the death of all the defendants therein, before they have become entitled to an interest in the further prosecution Of the suit, by a decree or a decretal order of the court, the representatives of such defendants cannot file a bill against the complainant to revive the suit.
    ^he provision of the revised statutes authorizing the defendants in the suit, or the surviving defendant, to revive the suit, where the complainant or his representatives neglect to revive the same, does not extend to the ease of an abatement of the suit by the death of all the defendants therein.
    Where the personal representatives of a -deceased party are only entitled to relief against the adverse party upon the conveyance to him of real estate which has descended to the heirs at law of the decedent, such heirs are accessary parties to a bill of revivor filed by such personal representatives.
    January 24.
    This case came before the court upon a general demurrer to a bill of revivor. The bill was filed by the respective executors of James Gaze and of John Richaud, deceased, to revive a suit originally commenced against Gaze and Richaud, by Dias the present defendant. The object of the original bill was to redeem a lot of land in Pearl-street, in New-York, which had been conveyed by Dias to Gaze and Richaud, by a deed absolute on its face, but which deed, as the bill alleged, was merely received by them as security for the payment of a debt of $15,000. And the bill prayed a reconveyance of the premises, upon payment of the amount for which the same were conveyed as security. Gaze and Richaud put in their answers denying that the premises were conveyed to them as security merely, or upon any condition, qualification or trust for the benefit of Dias. But inasmuch as Richaud had acknowledged that the premises were held by himself and Gaze in trust for Dias, and had promised to reconvey the same, they offered, in their respective answers, to reconvey the same to him upon'his paying the $15,000. The bill of revivor then proceeded to state that the original suit had abated by the death of both the defendants therein, and that the complainants respectively had been appointed executors of their wills, and had taken out letters testamentary thereon. They therefore prayed a revival of the suit, in the usual form.

      Hamilton Wilkes, for the complainants.

      John L. Mason, for the defendant.
   The Chancellor.

The objection is well taken that the bill does not show any right in these defendants to revive the suit. It is not necessary here to discuss the question as to what may be the effect of the offers made in the answers of the defendants, in the original suit, to permit the complainant to redeem. The bill does not show that the legal title in the premises was devised to these complainants. If this was a case, therefore, in which the personal representatives of the deceased defendants had a right to revive, for the purpose of receiving back from Dias the $15,000 and interest, the objection is properly taken, ore tenus, that the heirs, or devisees, of Gaze and Richaud, in whom such legal title is now vested, should have been made parties to the bill of revivor, either as complainants or defendants. No decree for a reconveyance can be made in a suit to which the holders of the legal title are not parties. And without such reconveyance the personal representatives of Caze and Richaud will in no event be entitled to a decree for the repayment of the $15,000 and interest; even if the offer in the original answers could have the effect of converting the real estate into personalty, so as to give the executors an interest in this controversy.

The counsel for the defendant is clearly right, also, in supposing that this is a case in which neither the personal representatives of the defendants, nor the heirs or devisees, have a right to revive. The general rule is strict, that before a decree or a decretal order by which a defendant becomes entitled to an interest in the further continuance of the suit, neither he nor his representatives can sustain a bill of revivor. And it was formerly held that he could not do so even after decree, except in the single case of a decree to account. (Anon. 3 Atk. 692.) It is now established, .however, that after a decree the suit may be revived at the instance of a defendant, or. of his representatives, if the complainants, or those who represent them, neglect to revive it. ( Williams v. Cooke, 10 Ves. 407. Howard v. Schwedes, 12 Idem, 316. Gordon v. Bertram, 1 Mer. Rep. 154. Finch v. Lord Winchelsea, 1 Eq. Ca. Abr. 2.) The revised statutes have given some rights to the defendants, and to the survivor of several defendants, in the revival of suits, which they did not before possess. (See 2 R. S. 185, § 118 to 131.) But none of those provisions appear to extend to the case of an abatement by the death of a sole defendant, or of all the defendants in the suit, before he or they have obtained an interest in the further prosecution of such suit, by a decree, or by a decretal order under which some right has been acquired.

This demurrer is, therefore, allowed; and the complainants’ bill must be dismissed with costs.


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    Sprague vs. Jones & Graham.
    January 27.
    Where upon the final hearing of a cause, upon a bill of foreclosure, the •com. plainant’s counsel omitted to ask for a decree over against one of the defendants who was personally liable for the deficiency, and the decree was enrolled before the mistake was discovered ; Held, that the enrolment could not be amended so as to make the decree, as enrolled, a personal decree against such defendant for such deficiency. Held further, that the court, without a formal rehearing of the cause, might make a supplemental order or decree, founded upon the decree as enrolled, to supply the omission in the original decree, in a case where the decree over against such defendant was a matter of course.
    This was an appeal by the defendant J. L. Graham from an order of the vice chancellor of the eighth circuit amending the decree in this cause, after enrolment, so as to make it a personal decree against the appellant. The bill was filed to foreclose a mortgage given by the defendant Jones, solely, but the mortgage debt wat: -'"tired by the joint and several bond of both the d ' " to. The ’ ”” tained the usual prayer pescribed in the short form for bills of foreclosure, as settled by the chancellor under the provisions of the act of the 14th of May, 1840, to reduce the expense of foreclosing mortgages in the court of chancery. The decree as drawn up and enrolled contained the ordinary decree of foreclosure and sale, and for the payment of the complainant’s debt and costs out of the proceeds of the sale, and a personal decree over against the mortgagor for the deficiency, if there should be any.

      L. ET. Sandfordy for the appellants.

      S. Mathews, for the respondent.
   The Chancellor.

Two objections are made to the order appealed from in this case : First, that this is not a case in which a decree could be altered in so material a a part without a rehearing ; and, Secondly, that if the supposed defect in the decree could be supplied, the form of the relief given by the vice chancellor was improper. It does not appear by the papers that this was a mere clerical errorj as it is not shown that the complainant asked at the hearing for a personal decree against the appellant, as a party to the bond, or that any such decree was granted by the court previous to the drawing up of the decree which was in fact entered. I have hesitated, therefore, whether it could be proper, without a rehearing, to amend the decree in a matter of substance so material to the rights of the appellant. And upon an examination of the cases I am satisfied such an amendment would not have been permitted in the courts of chancery in England,and in Ireland, without discharging the enrolment and granting a formal rehearing of the cause. This court, however, has not been so strict in relation to the amendment of a decree, in a matter as to which there could not have been a doubt of the complainant’s right to have it made a part of the decree if it had been asked for, and where the neglect to ask the court to have it inserted the decree, as a part thereof, arose from mere inadvertence. (Clark v. Hall, 7 Paige’s Rep. 382.)

The right to a decree over against a defendant who has guarantied the payment of the mortgage debt is given by the statute. (2 R. S. 191, § 155.) And it is settled in this court that the decree for the payment of the deficiency may be made in anticipation, as a part of the decree of foreclosure and sale, without waiting until such deficiency is actually ascertained. (McCarty v. Graham, 8 Paige’s Rep. 480.) It would therefore have been a matter of course to have made the decree over against the appellant, in this case, as a part of the original decree upon this bill, if it had been asked for at the time the decree was granted. And if the vice chancellor directed the usual decree in such cases to be entered, without stating what the particulars of such decree should be, the complainant’s solicitor might have inserted this provision as a part of the decree to be entered by the clerk pursuant to such direction of the court. I conclude, therefore, that this was an amendment of the decree, or rather an addition to the decree as drawn up and entered, which might be made by the court without a formal rehearing of the cause.

The vice chancellor was wrong, however, in supposing it was proper to give the amendment asked for a retrospective operation, or to insert the amendment in the enrolled decree. For such a mutilation of the records of the court was not necessary for the purposes of justice, and was contrary to the settled practice in such cases. In the case of Clark v. Hall, before referred to, this court decided that where the amendment asked for was a further consequential direction, founded upon the decree already made, the proper course was to supply the omission by a separate and distinct order ; without altering the decree which had been entered. And such is stated by Daniel to be the English practice. (See 2 Daniel’s Ch. Prac. 688.) The order directing the enrolled decree to be amended by inserting therein the name of the appellant, and that the decree should have the like effect as if the said name had been originally inserted therein, was therefore erroneous, and must be reversed, and all proceedings founded on such amendment must be vacated and annulled. And instead thereof, an additional order or decree must be entered, as a consequential direction upon what is contained in the decree as enrolled, rendering the defendant Graham personally liable for the deficiency, if there should appear to be one, upon the coming in and confirmation of the master’s report ; and authorizing an execution to betaken out against him for such deficiency, in case it should not be collected of Jones the mortgagor upon the execution that is to be issued against him therefor by the original decree as enrolled. And this supplemental order, after the expiration of the thirty days allowed by the statute, should be engrossed upon the enrolment of the original decree, and signed by the vice chancellor and clerk, as an additional enrolment. (See the case of Clapper v. House, 6 Paige’s Rep. 157.)

The proceedings are to be remitted to the vice chancellor, so that this additional decree may be added to the enrolment which remains before him. And neither party is to have costs as against the other on this appeal.


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    Meacham vs. Sternes & Sheldon, executors, &c.
    Where the deed or instrument creating a trust contains no provision as to the compensation which the trustees are to receive for their services in the execution of the trust, the court of chancery, upon a bill filed against them for an account of the execution of the trust, will allow them the same compensation, by way of commissions, as is allowed to executors and guardians for similar services.
    If the trust deed says nothing as to the compensation of the trustees, the law implies an agreement to perform the service for the same allowance which is made by statute to executors, &c. But if the instrument creating the trust fixes the compensation, or declares that none is to be received, or where the trustee, previous to Ms acceptance of the trust, makes a valid and binding agreement with the cestui que trust as to the compensation which he is to receive, the compensation fixed by the instrument, or by such agreement, will be the rule of allowance to the trustee.
    Where the instrument creating a trust declares that the trustee shall receive a compensation for his services, but leaves the amount of such compensation to be settled upon the priciple of a quantum meruit, the extent of such compensation will depend upon the services to be performed, and the compensation usually allowed or given for similar services by parties under voluntary agreements.
    A trustee is entitled to commissions upon sums with which he is charged in consequence of losses arising from his negligence, and on debts due to himself as one of the cestui que trusts; and also on the balance in his hands which he is directed by the decree to pay over to the cestui que trusts.
    Where an assignment in trust, for the payment of the debts of the assignor directs the trustee to sell the trust property at such reasonable times as shall seem proper to him, he is not authorized to sell the property at re. tail and on credit, nor to send it to agents to be sold on commission.
    March 1.
    This case came before the chancellor upon an appeal by the complainant from so much of the decree of the vice chancellor of the fourth circuit as disallowed the exceptions of such complainant to the master’s report, and so much of the decree as disallowed his claim for costs against Esleeck, the original defendant personally. The executors of Esleeck also appealed from a part of the decree overruling exceptions taken by Esleeck to the master’s report. The bill was filed by the complainant, R. S. Meacham, as the owner of certain debts due from the firm of J. & H. Meacham & Co. for an account and satisfaction of those debts out of the property of that firm which had been assigned to Esleeck in trust for the payment of their debts ; and among other debts a large amount due to himself, or for which he was responsible as endorser.

      Ira Harris, for the complainant.

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

The exceptions of the complainant all relate to the commissions allowed to the assignee as a compensation for his services, in the execution of his trust, in addition to his expenses and disbursements; the master having allowed the same rate of compensation which is fixed by law in the case of executors and administrators and guardians. There is no doubt that the rule of the English court of chancery was to refuse to allow any compensatio'n to executors, guardians, committees of lunatics, or other trustees, either in the shape of commissions or otherwise, for their personal services in the execution of the trust, beyond their actual expenses and disbursements. This rule, however, did not apply to the case of an executor or other trustee for whose services a compensation was either expressly or impliedly provided in the will, or other instrument creating the trust. The law in England appears to be substantially the same at the present time, except in relation to trustees of East India and West India estates. (See Lewin’s Law of Trusts, 438.) And such was supposed to be the law of this state previous to the passage of the act of April, 1817, relative to executors, administrators' and guardians. (Laws of 1817, p. 292.) The rule was indeed partially broken in upon by Chancellor Kent in the case of Green V. Winter, (1 John. Ch. Rep. 37;) where he allowed the' trustee a certain amount per day for his time and- expenses while engaged in the execution of the trust y though he refused to allow the additional charge for’ commissions': He based his decision, in disallowing the commissions in that case, however, upon the English authorities which had decided that the trustee was not entitled to any compensation whatever for his time and personal services. And in the subsequent case of Manning v. Manning, which came before him in 1815, (Idem, 527,) he went the whole length of declaring that the rule of the English court of chancery existed here in its full extent; and that executors and other trustees were not entitled to commissions or compensation for their services in the execution of their trusts, where no provision therefor was made in • the will' or other instrument by which the trust was created.

The practiced in stime of our sister states however, was different. As early as 1793, in the case of Granberry v. Granberry, (1 Wash. Virg. Rep. 250,) the court of appeals in Virginia decided that an’executor’was entitled to comensation for His trouble; and that by custom the allowance was generally fixed at fivb per cent upon his actual receipts. And in the case of Miller v. Beverleys, (4 Hen. Munf. Rep. 415,) which came before Chancellor Taylor in 1809, in a case of a trustee appointed by a deed of trust, he declared that it was inconsistent with natural justice to ask for the services of a trustee and then to refuse to pay him a reasonable compensation therefor. He therefore refused to be governed by the English decisions on this question, and allowed the usual commissions given to executors by the custom of that state.

The act of April, 1817, having authorized the chancellor of this state to settle an allowance or compensation for the services of executors, administrators and guardians, as a fixed and settled rule of compensation to be conformed to in all cases of the settlement of their accounts. Chancellor Kent considered the case of a committee of a lunatic as coming within the equity of the statute. He therefore allowed the committee a compensation, by way of commissions, for his services in the execution of the trust, at the rate fixed by him under the statute. (Ex parte Roberts, 3 John. Ch. Rep. 43.) I am not aware of any case in which this court has by an express decision applied the same rule of compensation to an ordinary trustee created by deed or will, where no provision was made in the instrument creating the trust to compensate the trustee, for his services. For in such instruments express provision is generally made for a fixed compensation to the trustee or at least to allow Mm to retain a reasonable sum for his care and trouble in the execution of the trust. But in the case of Van Rensselaer v. Bayard and others, which came before this court, in April 1832, on appeal, but not reported, a commission was allowed to a trustee for certain services not within the ordinary duties of his trust. The question as to his general right to compensation did not, however, arise on that appeal; that question having been se filed by a previous order of the vice chancellor which was not appealed from. The question was afterwards discussed in this court in the case of Denniston v. Bleecker and others, which came up on appeal from the decision of a vice chancellor, in April 1834. I suggested, in that case, that the equity of the statute allowing a fixed compensation to executors and guardians for their services, by way of commissions, might probably be extended to the case of other trustees performing similar services, so as to allow to such trustees the'same compensation where the instrument creating the trust was silent on the subject. That case, however, was finally disposed of upon the ground that the trust deed evinced an intention on the part of the person creating a trust to allow the trustees to charge a reasonable compensation for their services, and to retain the same in addition to their expenses and disbursements, and that the accounts rendered by the trustees from time to time should be conclusive as to the reasonableness thereof. It also appeared that the trustees had rendered accounts from time to time charging a commission upon their receipts and expenditures of five per cent.

In the present case the vice chancellor has based his decision, overruling the complainants’ exceptions, upon the somewhat equivocal language of the deed of assignment by which the trust was created. The language of that instrument is, that he may in the first place retain and reimburse himself out of the proceeds of the trust property tc all costs and charges, damages and expenses” which he may bear, pay, or sustain or be put to, by reason or means of or on account of the execution of the trust. Considering the law as settled that a trustee is not entitled to any compensation for his services unless the same is provided for in the instrument creating the trust, this language may all be properly applied to such costs, damages, charges and expenses as are allowable by the rules of the English court of chancery. But if the equity of the statute allowing a fixed compensation by way of commission to executors, &c. was applicable to the case, then the language of the assignment was broad enough to embrace the legal charges for commissions, as well as the costs, damages and expenses of the trustee in the execution of the trust confided to him.

The question, therefore, appears to be presented for the decision of the court, whether such a trustee is entitled to compensation for his services, within the equity of the act of April 1817 and of the provisions of the revised statutes as to the allowances to be made to executors, &c., and at the same fixed rate, where no provision as to compensation is contained in the deed or other instrument by which the trust is created. Upon a full examination of the subject and in accordance with the principle of the decision of Chancellor Kent, in the case Ex parte Roberts, before referred to, I have arrived at the conclusion that the trustee in this case, and other trustees similarly situated, are entitled to the same compensation for their services which is allowed by law in the case of executors, administrators and guardians. I am also pleased to find that the same view of this question was taken by the late Judge Washington of the supreme court of the United States. In the case of Prevost v. Gratz, in the circuit court of the United States for the district of Pennsylvania, in 1818, the question arose whether a trustee was entitled to commissions for his services in the discharge of his trust. And in delivering the opinion of the court, that distinguished judge says: u Without intending to meddle with the question whether a trustee is entitled to a commission upon the general principles which prevail in courts of equity, we think he is so in this state, under the equity of the act of assembly which allows them to executors, &c. j and such we understand has been the practice.”

It may, therefore, be considered the settled rule, so far as the decision of this court can settle it, that in all cases of trusts of this description, and all other express trusts of a similar nature, where nothing is said in the deed or instrument creating the trust on the subject of compensation to the trustee, for his personal services in the execution of the trust, and where there is no agreement on the subject for a different allowance, that the trustee, upon the settlement of his accounts, will be allowed the same fixed compensation for his services, by way of commissions, as are allowed by law to executors and guardians ; and to be computed in the same manner. In other words, the court will consider the statutory allowance to executors, administrators and guardians, as the compensation tacitly understood and agreed on by the parties to all trusts, of a similar nature, where nothing appears to show a different agreement or understanding on the subject of compensation. Where the instrument creating the trust, however, fixes a different compensation, or declares that none is to be allowed, or where the trustee, previous to the acceptance of the trust, makes a valid and binding agreement with the cestui que trust as to the rate of compensation to be allowed for his services in the execution of the trust, that of course must prevail-. And where such instrument contains an express provision that the trustee shall receive a compensation for his services in addition to his expenses and disbursements, leaving the amount of the allowance to be settled upon the principle of a quantum meruit, the amount of compensation must necessarily depend, to a certain extent, upon the peculiar circumstances of each case ; and must be adjusted with reference to what is usually paid by the agreements of parties for similar services.

The complainants’ counsel further contends that, if the trustee was entitled to commissions, the master erred in allowing him his half commissions on the monies with which he was charged, as trustee, in consequence of his neglect to collect the same ; and that the trustee was not entitled to commissions on the debts due to himself as one of the creditors of the assignors, nor upon the balance in his hands as reported by the master. I see no principle, however, upon which he should be excluded from receiving commissions upon funds with which he is charged in the account, although he did not in fact receive them. It is certainly a sufficient punishment of the trustee, for his negligence, to compel him to account for the monies which he might have collected, in the same manner as though the same had actually been received by him. And 1 believe it has been the uniform practice of the courts, since the passage of the act of April 1817, to allow the executor, administrator or guardian his half commissions upon the whole amount of the debit side of the account against him, whether the amounts for which he was charged were monies actually received by him, or were for funds which he might have received by due diligence. Neither does there appear to be any good reason for depriving the trustee of his half commissions upon the debts due to himself from the assignors, the payment of which was provided for in the assignment. The uniform practice is to allow to the executor or administrator his full commissions for receiving and paying out the funds of the estate, although a part of such funds may have been applied in satisfaction of a debt due to himself from the testator or intestate. The trustee was also clearly entitled to his half commissions upon the balance found due from him by the master’s report j which balance he was directed by the decree of the court to pay over to the complainant as the representative or assignee of the preferred creditors, after deducting therefrom the complainant’s costs. All of the complainants’ exceptions to the report were, therefore, properly overruled by the vice chancellor.

Several of the exceptions'taken by the defendant Esleeck to the report of the master relate to property belonging to him as trustee, under the assignment, which property has been lost either through his gross negligence, or because he sold it, on a credit, to persons who afterwards failed or were originally irresponsible. By adverting to the assignment it will be seen that it was a general conveyance of all the stock trade in and debts due to the assignors, in trust to sell the merchandize, and collect the debts due to the firm, and out of the moneys to be raised thereby as the proceeds of the assigned property, to pay the debts due from the firm in the order of priority specified in such assignment. Although the assignment provided that the property shall be sold by the trustee in such manner and at such reasonable times as should seem proper to him, the very nature of the trust precluded the idea that he should have the right to sell the property at retail on credit, or to send it to different parts of the United States to be disposed of by others on commission. He was, therefore, properly charged with the loss upon the two pianos sent by him to Norfolk in the spring of 1832, and which he neglected to attend to for more than six years ; and with the loss of the three sent to Atherton, at Philadelphia, about the same time, and who subsequently failed. And he was also chargeable with the loss upon the bill of hardware sold to Johnson, on a credit and without security, in the summer of 1832. For it was probably lost by his neglect to collect the amount when it became payable, even if he was justified in retailing the goods assigned, upon credit, in the the ordinary mode of selling merchandize in the course of trade.

It was moreover a breach of his duty as a faithful assignee for the benefit of creditors to retail the property in this way, upon credit. For the creditors were entitled to have the assigned property converted into money and applied to the payment of their debts without any unnecessary delay. And the assignment itself would have been clearly fraudulent if the assignees had in terms directed their assignee to dispose of the property in the manner in which it was disposed of by the trustee in this case; they being at the time of the assignment in failing circumstances and making this assignment of all their partnership effects in trust to pay their debts. It is not improbable that this mode of disposing of the property was in accordance with the wishes of the assignors. But that cannot protect the trustee when he is called upon to account, by the creditors for the payment of whose debts the assignment professes or purports to have been made. The first, second and third exceptions of the defendant were therefore properly overruled. The two notes of Schuyler Hodges and the Vermont notes taken upon the compromise of the Rogers’ debt, appear to have been lost, or left uncollected, by the gross negligence of the trustee. And there was equal negligence in relation to the piano in the hands of Hewit & Co. of Boston. Neither does there appear to be any excuse for the neglect of the trustee to collect the balance of the debt of Higgins & Co. The defendant in his examination did not pretend that they denied their liability for the residue of the debt, at the time they paid him $140 on account thereof; nor does he give any excuse whatever for his neglect to collect the balance. The decree appealed from was therefore right in disallowing the fourth, sixth, ninth, twelfth and fourteenth exception of the defendant.

But the seventh exception, which relates to a supposed balance left uncollected on the Cobb debt, appears to have been well taken. The defendant in his examination stated that the amount of the account charged upon the books of the assignor against Nathan Cobb, of Chitteningo, was disputed by Cobb. And he settled it for the sum 6f $375,21; which amount was received and credited by the trustee in his accounts with the trust fund.' In the absence of any proof that the other $59 charged upon the books against Cobb was actually due, I think the trustee must be deemed to have acted in good faith in receiving the sum admitted by Cobb to be justly chargeable against him, in full satis faction of the claim. This $59, and the interest thereon as computed by the master, must therefore be deducted from the amount decreed to be paid.

The eighth, eleventh and thirteenth exceptions are defective in form ; but the complainants’ counsel, on the argument, consented that they should be considered in the same manner as if the defendant had in one exception objected to the disallowance of the charges of Esleeck & Spencer for the professional services charged in the debit side of his account against the trust estate. In any form in which the question can be presented, however, the exceptions are not well taken; as the services referred to were not proper charges against the trust estate. The services were for the personal benefit of the assignors only ; and the trust estate assigned for the benefit of other creditors could not be. liable therefor, unless there was. a balance due to the assignors sufficient to satisfy the same, after paying all the debts provided for in the assignment.

The fifteenth exception relates to the missing piano received from Meacham & Pond. I think the evidence shows that this piano was among those sent to the hardware store under the care of the assignee, and that he was bound to account for it; or at least to show what had probably become of it. It seems to be impossible that an instrument of the size and value of the one under consideration should have thus strangely disappeard without gross negligence on the part of some one. It appears to be clear that one instrument is to be accounted for to make up the requisite number. And in the absence of any explanation on the part of the trustee, I think the master was right in charging him with the value of the piano. The only way to account for its disappearance is to suppose the trustee has sold it to some one and forgotten to charge himself with the amount received therefor in his account with the trust estate. This exception to the report was therefore properly overruled.

The 18th and 22d exceptions, which relate to the computation of interest by the master, I understood to be abandoned by the counsel for the defendant upon the hearing of the appeal. The interest is charged on both sides of the account down to the date of the report; which certainly is the most favorable mode of computing interest for the trustee, who has had a considerable balance in his hands for several years, which should have been paid over to the creditors entitled to it long since.

The nineteenth and twenty-first exceptions'of the defendant relate to a compensation by way of commissions claimed by him, beyond the allowance fixed by the revised statutes in the case of executors, &c., and also to a further claim of a gross sum of |2000 for his services in executing the trust. The grounds upon which I have based my decision sustaining the disallowance of the complainant’s exceptions, preclude the allowance of any further compensation to the trustee in this case than that which is allowed by law to executors for the performance of similar services. The duties which the trustee was required to perform in this case, under the deed of assignment, were precisely the same as those which are to be performed by an executor or administrator in ordinary cases; to wit, to convert the personal chattels into money by a sale thereof, and to collect the debts due to the estate, and pay the proceeds over to the creditors without any unreasonable delay. And no reason is at present perceived why a greater compensation should be allowed in one case than in the other. I admit the compensation fixed by the statute is not a very liberal one, considering the risks to which executors and other trustees are exposed even when they are the most vigilant in the discharge of their duties. But the allowance is as great as my learned predecessor and the legislature of the state have deemed consistent with the rights of creditors and others who are interested as cestuis que trust.

Both parties are dissatisfied with the decision of the vice chancellor in relation to costs. But taking all the circumstances of the case into consideration, I think he came to the correct conclusion. The trustee does not appear to have intentionally violated his trust; but has rather erred in permitting the assignors to manage the assigned property in their own way, for the purpose of obtaining a greater price therefor, instead of converting it at once into money, either by a public sale or by disposing of it at private sale for cash. The result, as is generally the case where the trustee suffers the trust to remain unexecuted for any considerable time, is a loss to the defendant, and attended by an expensive litigation. Where there has been such negligence, however, on the part of the trustee as this case exhibits, and where the expense in the master’s office principally arises out of such negligence, he may think himself fortunate if he escapes without being personally charged with the costs of the opposite party, instead of being left merely to bear his own expenses of the litigation.

With the slight modification of the decree in the matter of the seventh exception of the defendant, the decree must he affirmed ; without costs to either party, as against the other, on these appeals.


text:
    Talmage, President, &c. vs. Pell and Others.
    All the complainants in a cross bill must join in the application to stay the proceedings in the original suit until the complainants therein have answered the cross bill. And to entitle the complainants in the cross bill to such an order, the matters stated in the cross bill must be sworn to by some person who knows the facts.
    Where new matters of defence to a suit are discovered after the filing of the defendant’s answer, but which matters existed before the answer was put in, the proper course for the defendant is to apply for leave to file a supplemental answer. And it seems such matters of defence cannot be set up in the cross bill only.
    Under the act of 1832, relative to the abatement of suits by or against corporations, a suit which has been brought by a corporation may be continued by the receiver of such corporation, either in his own name as such receiver or in the name of the corporation, under an order of the court, made upon a summary application.
    Associations under the general banking act are corporations, and suits brought by them in the name of their president may be continued in the name of the receiver, under a special order of the court. But after the appointment of a receiver, and the transfer to him of all the property and effects of the association, such suits cannot be continued and prosecuted in the name of the president of the association.
    March 1.
    This was an application by Pell and wife, two of the defendants in this cause and two of the complainants in a cross bill, to stay all the proceedings in this suit until the present complainant therein, and the other defendants in the cross bill had put in and perfected their answers to such cross bill; and to extend the time to produce proofs until forty days after such answers to the cross bill had been perfected. The bill in this cause was filed to obtain satisfaction of a bond and mortgage, which bond was executed by Pell, and the mortgage by him and his wife, and also by Selden as the trustee of her separate estate, and given to the president of the North American Trust and Banking Company to secure the payment of $15,000, for the purchase money or subscription price of some of the stock of that association. The bill was filed in November, 1839, and was taken as confessed against all the defendants therein except Pell and wife. They having obtained time to answer the bill, by various orders and otherwise, for a very long period after they entered their appearance, finally put in their joint and several answers, in May, 1841, setting up certain matters in defence of the suit; which matters their counsel insisted was a defence of usury. A replication to the answer was filed, and an order to produce proofs was entered and served on the 15th of June, 1841; and the time was afterwards extended at the request and for the accommodation of the defendants, until the fourth of January, 1842. On the 31st of December, 1841, Pell and wife and D. Selden filed a cross bill, against Talmage the president of the banking association, and nineteen other persons who were the original associates in the formation of the North American Trust and Banking Company, setting forth various frauds and alleged illegal acts in the formation of the association, and in the sale and distribution of the stock thereof, among themselves and other persons who subsequently became subscribers for the stock of the company. That bill also stated that D. Leavitt had, since the commencement of this suit, and the joining of the issue therein, been appointed receiver of the property and effects of the pretended association called the North American Trust and Banking Company, and that by virtue of such appointment all the rights of the association and of the complainant as president thereof, if any they had, were vested in such receiver • who claimed that the association was duly organized under the act “ to authorize the business of banking,” and as such had rights cognizable at law and in this court. And the complainant prayed that Leavitt the receiver, and the other defendants, might be decreed to deliver up and cancel the bond and mortgage, and for general relief.

      J. V. L. Pruyn, for the complainant.

      Azor Taber, for Pell and wife.
   The Chancellor.

A great variety of objections exist to the granting of the motion in this case ; many of which are merely technical, but some of them are of a substantial character. One objection of form is that the motion is not made in behalf of all the complainants in what is called the cross bill, but is made by Pell and wife only, without joining their co-complainant who is the trustee of her separate estate. If he has any interest in the defence of this suit as trustee, he should have put in an answer thereto, and should have joined in this application. And if the whole legal and equitable title to the mortgaged premises is in Pell and wife, under the provisions of the 47th and 49th sections of the articles of the revised statutes relative to uses and trusts, Selden should not have been a complainant in the cross bill. (Cuff v. Platell, 4 Russ. Rep. 242. The King of Spain and others v. De Machado, Idem. 225. Delondre & Pelletier v. Shaw, 2 Sim. Rep. 237.) The objection, however, that one of the complainants has no interest in the subject matter of the bill, must be taken advantage of by demurrer, or in the answer of the defendant, where the objection appears on the face of the bill. For after the parties have gone to a hearing upon the pleadings and proofs, those who are properly made complainants will not be turned around to a new suit upon this mere formal objection. (Rafferty v. King, 1 Keen’s Rep. 601. Trustees of Watertown v. Cowen, 4 Paige’s Rep. 515.)

Again ; the facts in this cross bill are not sworn to in such a manner as to entitle the complainants therein to a stay of the proceedings in the original suit. They are stated on mere information and belief. And it is not pretended that Leavitt, upon whom the rights of the association in the bond and mortgage have devolved as receiver, has any knowledge of the supposed facts stated therein, so as to enable him to admit or deny them by his answer, or upon this motion. Instead of founding their application upon mere belief, the complainants in the cross suit should have procured the affidavit of the person who gave them the information, if he knew that the allegations in the cross bill were founded in fact. Besides, the receiver is not properly made a party to the cross bill. For although there is a prayer that he may answer, and for relief against him, his name is not mentioned in the prayer for subpoena, nor is he referred to in any other way in such prayer for process. And the rule of the court is, that a person against whom process of subpoena is not prayed, although he is named in the bill, is not a defendant to the suit. (Story’s Eq. Pl. 43, § 44. 2 John. Ch. Rep. 245.) I am also inclined to think that it is a substantial objection to this application that the cross bill sets up no new matters of defence, to the original suit, which did not exist at the time of the putting in the answer of Pell and wife in that suit, and does not show that any discovery is necessary as to the only defence which is set up in their answer. The proper course, where a new matter of defence is discovered after the putting in of the answer but which existed before, appears to be to apply for leave to file a supplemental answer, setting up such defence, instead of resorting to a cross bill merely. (See 2 Ves. & Bea. Rep. 16.)

It also appears from the cross bill that this suit has become defective, in consequence of the appointment of a receiver in whom the whole rights of Talmage, as president of the North American Trust and Banking Company, in the subject matter of controversy in this suit and of the association itself, have become vested, either by assignment or by operation of law. The receiver must therefore be made a party to this suit before the same can be further proceded in. (Sedgwick v. Cleveland, 7 Paige’s Rep. 287.) And no order affecting his right to take the proper measures to have himself substituted as complainant in this suit, and to proceed therein to a decree, can be made without notice to him or to his solicitor.

The first section of the act of April, 1832, relative to the abatement of suits by or against corporations in certain cases, (Laws of 1832, p. 509,) declares that the dissolution of a corporation by a decree of the court of chancery, or by the expiration of its charter, or otherwise, shall not abate any suit or proceeding in favor of such corporation which shall have been pending at the time of such dissolution. And it authorizes such suits to be continued, by the receiver or trustees on whom the corporate effects have devolved, in the name of the corporation or of the receiver or trustees; who may be substituted as plaintiffs by the direction of the court in which the suit shall be pending, and subject to such order as the court may deem expedient in relation to the payment or security for costs. This section does not, in terms, authorize the substitution of the receiver of a corporation as the complainant in the suit, where such corporation was not actually dissolved at the time of the appointment of such receiver. But the last clause of the second section can have no sensible construction, unless we suppose the legislature intended, in cases where a receiver had been appointed by this court, that old suits might be carried on, as well as new suits instituted, either in the name of the corporation or of such receiver; even in cases where the corporation was not actually dissolved. The legitimate construction of these statutory provisions therefore is, that where a suit in this court which has been brought by a corporation, either in its corporate name or in any name in which by law it is authorized to institute a suit here, and a receiver is appointed at any time before the termination of the suit, the court, upon a summary application by such receiver, and without the formality of filing a bill in the nature of a bill of revivor and supplement, may direct the suit to be continued in the name of such receiver; or may direct it to be prosecuted in the name of the corporation, upon giving to the defendant therein such security for his costs as the court may think proper to direct.

This suit was in fact brought for the benefit of the North American Trust and Banking Company, although instituted in the name of its president. And, if these banking associations are in fact corporations, this was a suit in favor of that corporation, and may be continued by an order that it proceed in the name of the receiver, under the statutory provisions which I have referred to. Or, it may be continued by an order that it proceed in the corporate name of the association, upon the receiver giving security for costs. But the act of April, 1832, makes no provision for continuing a suit, which has become thus defective, in the name of an officer of the corporation. Nor do the 21st and 22d sections of the act of 1838, to authorize the business of banking, extend to this case. For Talmage, the president of the company, in whose name the suit was proceeding at the time it became defective by the appointment of Leavitt as the receiver of the property and effects of the association, had neither died, resigned, nor been removed from office. Nor can the receiver, in any sense, be considered as the successor in office of Talmage the president of the company.

In the case of Warner v. Beers, (23 Wend. Rep. 100,) I came to the conclusion that these banking associations were in fact corporations, authorized to exercise certain corporate powers during the continuance of the law under which they were organized. And there is nothing in the resolutions of the court for the correction of errors in that case, in the adoption of which I concurred, inconsistent with the opinion which I there expressed. The supreme court also has repeatedly decided that banking associations are in fact corporations. And in the recent case of The People ex rel. The Bank of Watertown v. The Assessors of the Village of Watertown, (1 Hill's N. Y. Rep. 616,) that court held that they were liable to be assessed as corporations, upon their capital stock, in the same manner as the safety fund banks and- other monied corporations are liable to be assessed.

The motion to stay the, proceedings in this cause until the cross bill is answered must be denied with costs. But the suit cannot be further proceeded in by the receiver in the name of Talmage as president of the association. The receiver is at liberty, however, to apply for an order to continue the suit in his own name, if he thinks proper to do so.