source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    In the matter of G. & E. Congdon, infants.
    The provision of the revised statutes, which authorizes the general guardian of an infant tenant in common, with the consent of the court of chancery, to agree to a sale of the estate, for the purpose of making partition, does not authorize the guardian to sell to a co-tenant, but only to join with the other tenants in common in a sale of the joint interest in the property.
    The court will not authorize the guardian to join in a sale, 'except on the report of a master that such sale is necessary and proper; and the guardian must give security for the faithful performance of his trust on such sale, and to bring the proceeds of the infant’s share into court, or to invest and account fur the same, as the Court shall direct.
    If a co-tenant wishes to buy the infant’s share in an estate which cannot be divided, and is willing to give the fair value thereof, the general guardian should apply for liberty to sell, under the article of the revised statutes relative to the sale and disposition of infants’ estates.
    It is a sufficient ground to authorize a sale of an infant’s property, that it is held in common with ádults, and that the value of the estate is small, in comparison with the expense of a partition suit, to which it must otherwise be subjected.
    August 4th.
    C. P. Ingalls, in behalf of the general guardian of the infants, presented a petition under the 86th section of the title of the revised statutes, relative to the partition of lands, (2 R. S. 330,) praying that the guardian might be permitted to sell the share of the infants in the premises to the adult owners of the other shares. The premises consisted of a farm of about 180 acres. .
   The Chancellor.

The object of the section, under which this application is made, was not to authorize the guardian of an infant tenant in common to sell to his co-tenants. It was to authorize him to join with them in a sale of the property, where it is so situated that it cannot be parti- • tioned without great prejudice to the owners ; and where a sale would be decreed on a bill filed for that purpose. Even in those cases the court will not authorize the general guardian to join in a sale, unless upon the report of a master that such a sale is necessary and proper. And the guardian must also give a bond, with two sufficient sureties, in double the value of the share of the infant in the property, and the insterest thereon during minority, conditioned for the faithfu performance of the trust by such guardian on the sale, and to bring the proceeds into court, or to invest and account for the same, as the court shall direct.

If it is for the interest of the infant to sell, and the co-tenant is willing to buy his share at its fair value, the proper, as well as the more simple mode of proceeding, is to apply to the court under the article of the revised statutes relative to the sale and disposition of infants’ estates. (2 R. S. 193, § 170. Rule 157, dec.) The fact that the property of an infant is liable to the expense of a proceeding in partition, by adult owners of an undivided share thereof, is always taken into consideration in deciding upon the propriety of authorizing a sale. And it is always a good reason for selling the infant’s undivided share, under this article, that the estate is held in common with adults; and that the value of the estate is small, when compared with the expense of a partition suit, to which it will be subjected, if a sale by a special guardian should be refused.

In this case an application must be made for a sale under that provision of the statute ; and the co-tenant, or any other person, can then become the purchaser, at a fair valuation.


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    Corning & Norton vs. White.
    The judgment creditor who first files his bill in chancery obtains a priority in relation to the property and effects of the defendant which cannot be reached by execution at law.
    An insolvent may assign his property for the benefit of all his creditors, rateably, without depriving himself of the privilege of applying for a discharge from imprisonment for debt, under the statute.
    An assignment, after the lien of a creditor has attached by the filing of a bill, only conveys the property to the assignee subject to that lien.
    August 4th.
    The bill in this cause was filed by judgment creditors ter reach the equitable assets of the defendant, after an execution at law issued against him had been returned unsatisfied. The defendant, in his answer, admitted the rights of the complainants, and that he possessed equitable assets ; but allege éá that he had other judgment creditors whose executions were unsatisfied. And he insisted that they were entitled to a share of his property.

      Ira, Harris, for complainants.

      J. R. Lawrence, for the defendant.
   The Chancellor.

This court has frequently decided that ■ the creditor who first files his bill here to reach the defendant’s property, which cannot be sold' on an execution at law, obtains a preference ; and that the defendant has no right to object that there are other creditors whose debts he had also refused to pay out of such property. Equality among creditors is' equity, whether their debts are' in judgment, or otherwise ; and every debtor has the right to act upon that principle, without impairing any of his rights. He cannot be discharged under the insolvent acts, if he gives a preference to one creditor over another, knowing himself to be insolvent. But if he is art honest man, and wishes to put all his creditors upon' an equality, he may assign" his property to his creditors, to be distributed among them rateably ; or he may convey it to some responsible trustee, to be applied to the payment of all his debts, without giving preference to any. If he does this before any of the creditors have obtained a preference at law, or by filing a bill in this court, they will all be placed on a footing of equality. But the filing of the bill here, under the provisions of the revised statutes, operates as an attachment of property which cannot be levied on at law. It gives to the vigilant creditor a right to a priority in payment; and the creditor who next files his bill will have the second lien. An assignment under the insolvent act, after the commencement of the suit, only gives to the assignee a right to the surplus, after payment of the complainant’s debt. The defendant, after the service of the injunction, can only make an assignment subject to the pri- or -equity of the complainant, The receiver is an officer of the cpurt who takes the property and holds it subject to the equitable claims of all parties ; and after payment of the debt of the complainants, he will.be directed to. bring the surplus into court, to be paid over to whoever may be entitied to the same.

There must be a decree in this case, declaring the right of the complainants to all the property, choses in action, or other equitable effects of the defendant, which he had at the time of the commencement of this suit, or which were held in trust for him, except his necessary bedding and other articles which are exempt from execution, or so much thereof, as may be necessary to pay their judgment, in the pleadings in this cause mentioned, together with the costs of this suit; and a receiver must be appointed to receive the said property, choses in action, and effects, to convert them into money, and to apply the same in satisfaction of the judgment and costs.

There must also be a reference to a master, residing in the county of Onondaga, to appoint a proper person as receiver, and to take from him sufficient surety for- the execution of his trust. And the defendant must disclose, assign, and deliver over on oath to such receiver, under the direction of such master, all such property, choses in action, and effects, and the proceeds of such as have been received and collected by him since the commencement of this suit. The receiver is to have the usual power to compromise and collect the debts, and convert the property and effects into money, and to apply the same in satisfaction of the complainant’s debt and costs. And either party is to be at liberty to apply to the court, on petition, for such further directions in the premises as may be necessary. If the defendant has been discharged under the insolvent act, since the commencement of this suit, and the assignee has taken possession of any of the property, in violation of the injunction, as he is chargeable with constructive notice of the pendency of this suit, it will be his duty to deliver the same over to the receiver, subject to his claim upon the surplus, if any there be, for the benefit of the general creditors.


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    The President, Directors and Company of the City Bank vs. Bangs and others.
    Where one of the defendants in a bill of interpleader, by his answer, makes a claim against the complainant beyond the amount admitted to be due and paid into court, and which is not claimed by the other defendants, he will be permitted to proceed at law to establish his right to that part of his demand, which is not in controversy with the other defendants.
    If the defendants, or either of them, deny the allegations in a bill of inter-pleader, or set up distinct facts in bar of the suit, the complainant must reply to the answer, and close the proofs in the usual manner, before he can bring his cause to a hearing.
    But where the defendants admit the facts stated in the bill, and on which the right to file the bill of interpleader rests, and set up no new facts, as against the complainant, or in bar of his suit, it seems to be sufficient for him to filé a replication, and to set the cause down for a decree to inter-plead, without waiting until the proofs are taken as between the defendants.
    If the cause is ripe for a decision between the defendants, as well as between them and the complainant, the court settles the conflicting claims of the parties, and makes a final decree on the first hearing.
    Where the suit is not in readiness for a decision as between the defendants, the court merely decides that the bill is properly filed, and dismisses the complainant with his costs up to that time; and directs an action to be brought, or an issue, or a reference, to ascertain and settle the rights of the defendants to the fund in controversy.
    On a reference to a master to settle the rights of defendants in a bill of interpleader, as between themselves, the court will give them the benefit of a discovery, as against each other, if they, or either of them, desire it.
    August 29th.
    The City Bank having been robbed of a large sum of money, offered a reward of $10,000 for the recovery of the same, and a proportionate sum for any part thereof. The notice in which the reward was offered stated the several kinds of money and bank notes stolen, and about the amount of each, in round numbers. The aggregate of the amounts thus stated was a little less than $225,000, the real amount of the loss not having been then ascertained by the officers of the bank. It was afterwards discovered that the actual loss was $248,764 ; of which sum $185,602 was recovered through the agency of the defendants, or some of them. There being several conflicting claims for the reward, and Bangs, one of the claimants, having sued the complainants at law to recover the same, a bill of interpleader was filed by the bank. The sum of #7460,97, being the proportion of the reward which the amount recovered bore to the whole amount stolen from the bank, was paid into court, and an injunction was granted without opposition, to restrain the suit at law. The several defendants answered the bill, claiming the amount of the reward which had been paid into court. The defendant Bangs, also claimed the right to a farther sum ; insisting that he was entitled to such proportionate part of the reward offered as the amount recovered bore to the amount of the loss as stated in the notice.
    The cause was submitted by consent, without filing a replication to any of the answers ; and upon a written agreement to admit the truth of all the allegations in the complainant’s bill.

      W. C. Wetmore, for the complainants.

      R. Bogardus, for the defendant Bangs.

      W. Muloch, for Maria Van Riper.

      W. S. Sears, for J. & B. J. Hayes & Z. Homan.
   The Chancellor.

It seems from the answer of the defendant Bangs, that he claims from the complainants an amouót beyond that which is claimed by the other defend, ants, and which exceeds the amount paid into court. As to that claim there, can be no decree that the defendants interplead. And even if this court should put the construction on the bank notice, which is contended for by Bangs, there is not before me any evidence of his right, to enable me to make a decree in his favor against the complainants. I see no other remedy than to permit Bangs to proceed with his suit at law to recover that sum, if he thinks there is any probability of success. If he elects to proceed in that way, the question as to the right to costs, as between him and the complainants, must be reserved until the event of that suit is shown, or until the further order of the court. If within 20 days the defendant Bangs gives written notice of his election to proceed at law to recover such excess, he rtinst be permit" ted to go on with his suit there, on his stipulating to abandon, in that suit, all claim to the reward, to the extent of the sum paid into this court. If he does not give notice of such election within the time prescribed, the costs of the complainants are to be paid out of the fund in courtj and the injunction is to be made perpetual as against all of the defendants.

As to the fund in court, it is admitted by all parties, that it is a proper case for the defendants to interplead, and settle the matter between themelves ; and one of them asks that this may be done by filing a bill for that purpose, and that he may be the complainant therein. As to the mode of proceeding after it is ascertained that a bill of interpleader is properly filed, there does not appear to be any settled practice. In the case of Manks v. Atkinson & Holroyd, (1 Cowen’s E. 696,) the cause was brought to a hearing on bill and answer only ; but whether this was done by consent of the parties, or otherwise, does not appear. In the case of Jones v* Gilman and others, (Cooper’s R. 49,) the complainant filed a replication to the answers, and served subpoenas to rejoin ; according to the practice as stated in the marginal note in Dickins, (1 Dick. R. 291, n.) It also appears from the English reports that the testimony is sometimes taken, as to the rights of the defendants between themselves, previous to a decree to inter'plead. (Beymer v. Buchanan, 1 Cox’s Cas. 425. Duke of Bolton v. Williams, 4 Bro. C. C. 297.) In .those cases, and also where the right of one defendant is admitted by the answer of the other, or the bill is taken as confessed as to one, the court settles the rights of the parties at once, and makes a final decree as to those rights, and as to the disposition of1 the fund in controversy. (Hodges v. Smith, 1 Cox’s Cas. 357.)

Where the defendants, or any of them, deny the allegations in the complainant’s bill, or set up distinct facts in bar of his right to file the bill, he must file a replication, give rules to produce witnesses, and close the proofs in the usual manner, before the cause is heard; as the deferidants, as well as the complainants, are at liberty to read proofs on those questions at the hearing. (Statham v. Hall, Turn, & Russ. R. BO.) But if the defendants admit the facts on which the right to file the bill of interpleader rests, and set up no defence, in opposition thereto, which requires the taking of testimony on either side, it seems to be sufficient for the complainant to file a replication to the answers of the defendants, and then to set down the cause for hearing and for a decree that they interplead and settle the matter between themselves, without waiting until the cause is ripe for a decision as between the defendants. In that case the court merely decides that the bill is properly filed, and dismisses the complainant with his costs of the litigation, up to that time, to be paid out of the fund. And to settle the conflicting claims of the defendants, the court directs either an action, an issue, or a reference to a master, as may be best adapted to the circumstances of the case. (Angel v. Hadden, 16 Ves. jun. 203. 4 Bro. C. C. 309, n.) In this stage of the suit, an issue or a reference will in general be the most cheap and efficacious mode of settling the controversy between the defendants ; and the expense of an action at law, or of an original bill, filed under the direction of this court, can seldom be necessary.

The present case involves so many conflicting claims and questions of partage, that it would be very inconvenient to settle them by awarding issues to be tried by a jury; and the filing of a bill would produce great and unnecessary delay and expense. I think, therefore, the proper mode of ascertaining and settling the rights of these defendants, is to refer it to a master to examine and report which of them is entitled to the fund which has been deposited in this suit; and if the master shall be of opinion that any two or more of the defendants are equitably entitled to share in the same, that he also ascertain and report what portion of the fund belongs to each. In this case, also, as many of the facts, on which the claims of the respective parties rest are probably known only to the other defendants, or some of them, either party, previous to the examination of any witnesses before the master, and for the purpose of obtaining a discovery, may present to the master, on oath, a written statement of such claim, and of the facts and circumstances on which it is founded; which statement all the other defendants shall ■ answer on oath, to the satisfaction of the master, and with the like effect as if such answer was filed to a bill of discovery : The defendants who have made a joint claim, to join in their statement of such claim. Either party is to be at liberty to take out a summons, and proceed before the master in such manner as the master may direct; and the solicitor of each defendant is to have notice of any proceedings in which a notice of such proceeding is required by the practice of the court. And all questions of costs, as between the defendants, and all other questions and directions are reserved until the coming in of the master’s report; but with liberty to either party to apply for such other instructions, or directions to the master, as may be necessary or proper pending the reference.


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    Souzer and wife vs. J. De Meyer & N. De Meyer.
    A defendant cannot plead and answer, or plead and demur, as to the same matter.
    If he answers as to those matters which by his plea he has declined to answer, he overrules the plea.
    So if a plea and demurrer are to the same part of the bill, the demurrer is overruled.
    If the defendant is willing to give the discovery sought by the bill, and has a defence which might be pleaded in bar, he will have the full benefit of such defence, if he sets it up, and insists, upon it in his answer.
    Where the complainant sets up equitable circumstances in his bill, in anticipation of a plea and to defeat the same, the defendant must support his plea by an answer as to those equitable circumstances, in addition to the general denial thereof in the plea.
    If the answer admits, or does not fully deny such equitable circumstances, they may be used on the argument to falsify the plea.
    And if they are denied by the plea and the answer, the complainant may take issue on the plea, and prove the same.
    If the plea is falsified by the proofs, the complainant will be permitted to examine the defendant on interrogatories, if a discovery is necessary.
    If a plea is bad in form only, but good in substance, as to the whole or any part of the relief sought by the bill, and was not pleaded in bad faith, it will be permitted to stand as a part of the defendant’s answer, or the defendant may be permitted to insist upon the same matters in his answer.
    The statute of limitations may be interposed against legacies, if not charged upon the land, as well in equity as at law.

      Where a suit comes up by an appeal from a vice chancellor, if the present vich chancellor of the circuit from which the suit came was originally of counsel in the cause, the suit will be retained by the chancellor.
    This was an appeal from a decretal order of the late vice chancellor of the second circuit. The defendants plead the statute of limitations to the whole bill, and at the same time put in an answer denying the whole equity thereof. The vice chancellor made an order, declaring, among other things, that the statute did not apply, and was no defence to the matters and charges contained in the bill; and for that reason he overruled the plea, with liberty, however, to the defendants to insist on the statute in their answer as a defence.

      L. Elmendorf, for the appellants.
    The statute of limitations is a bar to the complainants’ right of recovery. A demand to be exempted from the operation of the statute, must be exclusively of equity jurisdiction. Here the complainants had a remedy at law for the legacies claimed by them in their bill. Wherever a devisee enters upon land, avowedly under a devise, subject to the payment of a legacy, charged thereon by the will, a promise to pay the legacy may be implied. Here, we admit, we have made payments towards these legacies, which are evidence of, and equivalent to an express 1 promise. The liability at common law, in such cases, is not put upon the promise, but upon the consideration received by the devisee, from which a promise is implied. (Beecker v. Beecker, 7 John. R. 99. Van Orden v. Van Orden, 10 id. 30. Kane v. Bloodgood, 7 John. Ch. R. 90. Murray v. Costert 20 John. R. 576. Goodrich v. Pendleton, 3 John. Ch. R. 390. Kelsey v. Deyo, 3 Cowen’s R. 133.)

      B. F. Butler, contra.
    The legacy being charged on the land, the complainants have no remedy for the same at common law; and the statute of limitations cannot therefore be pleaded in bar of a recovery in this court. To give a remedy at common law, there must be either an express promise to pay on the part of the devisee, or a part payment by him, from which a promise may be implied. The legatee cannot charge the land in the possession of the devisee, except by á bill in equity: We allege also the insolvency of one of the devisees. A suit at law against him would, therefore, be nugatory. (Bailey v. Jackson, 16 John. R. 210. Pelletreau v. Rathbone, 18 id. 428. Tole v. Hardy, 6 Cowen’s R. 333. Birdsall v. Hewett, 1 Paige’s R. 32. Cook v. Grant id. 407. But here, the plea and the answer being to the same matter, the plea was overruled by the answer. The order of the vice chancellor overruling the plea was therefore correct, for this cause.
   The Chancellor.

It is a well settled principle of. equity pleading, that the defendant cannot plead and answer, or plead and demur, as to the same matter. If he pleads to any part of the bill, he asks the judgment of the court whether the matters of the plea are not sufficient to excuse him from answering so much of the bill as is covered, by the plea. Therefore, if he answers as to those matters which by his plea he has declined to answer, he overrules the plea; and if he demurs to any part of the bill, and also puts in a plea, which is a special answer to the same part, the demurrer is overruled. If he is willing to give the discovery sought by the bill, and has any defence which might be pleaded in bar of the relief sought, he will have- the full benefit of such defence, if he sets it up and insists upon it in his answer. This, is always the better course, where the expense of a full answer will not be great; especially if there is any doubt as to his right to set up the particular defence by way of plea.

In some cases, where the complainant anticipates the plea,, and sets up equitable circumstances in his bill to defeat the same, the defendant is not only permitted, but actually required, to support his plea by an answer as to those equitable circumstances. This, however, is only an exception to the general rule; and the answer is not put in as a defence, but to give the complainant the benefit of a discovery to defeat the plea, which only contains a general denial of the equitable circumstances. Even in that case the plea does not profess to cover the discovery as to those particular allegations in the bill. If they are admitted,, or not fully denied'by the answer, it may be used, on the argument of the plea to» c.ounter-prove the same. If they are denied, the complainant still has an opportunity to contradict the general denial in the plea, and the particular denial in the answer, by taking issue on the plea. And if the plea is falsified by the proofs, the complainant will not lose the benefit of his discovery as to the other matters in the bill, but may still examine the defendant on interrogatories, if a discovery is necessary. (Lube’s Eq. PI. 237, 335, 342. Mitf. 277, 302; 4 Lond. ed.) In the case now under consideration, the defendants have answered, as well as pleaded, to the whole of the charges in the bill, although no equitable circumstances were set up in anticipation of the plea. It is very evident, therefore, that this plea is overruled by the answer.

If the plea was bad in form only, but good in substance, as to the whole, or any part of the relief sought by the bill, and was not put in by the defendants in bad faith, the same should have been permitted to stand as a part of their answer, or they should have been allowed the full benefit of insisting upon the statute in their answer. But as the order has been drawn up in this case, although the defendants are to be permitted to insist upon the statute in their answer as a defence, it is somewhat doubtful, at least, whether they would not be precluded, on the final hearing, by the preceding part of the order, which declares that the statute is no defence to the matters and charges in the bill.

As to so much of the bill as seeks for a discovery and satisfaction of that part of the legacies which was not charged upon the land, I apprehend the statute would be a valid bar. The statute of this state having given a concurrent remedy in this court and in a court of law, to recover such legacies, it seems to follow that if the statute would be a good bar in an action at law for the legacy, it should be equally so on a bill filed in this court, for the same kind of relief. Whether the same principle would apply to the legacies chargeable on the land, after the defendants had subjected themselves to the payment thereof personally, or whether the complainants can call for an account for the period of twenty years In analogy to the limitation of actions at law to recover the possession of real estafe, are questions not necessary to be decided on this informal plea. Those questions can be discussed more profitable at the hearing, when all the facts are before the court.

I think the order of the vice chancellor should be. so modified as. to strike out that part thereof which declares that the statute does not apply, and is no defence to the matters and charges in the bill. So as to leave the Whole question, as to the merits of that defence, opemfor discussion at the hearing, if the defendants think proper to amend their answer, and insist upon the statute as a bar to all 'or any part of the complainant’s claim. The costs on this appeal must abide the event of the suit. And as the present vice chancellor of the second circuit was formerly counsel in the cause, the further proceedings in the case must be had before the chancellor ; the defendants to have thirty days, after notice of this decision, to file a supplemental answer by way of amendment for the purpose of insisting upon the statute.


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    Brockway and McFarland vs. Copp.
    Where, upon an appeal by a defendant from an interlocutory decision of a vice chancellor, such decision is reversed by the chancellor, with costs, and no order is obtained to remit the proceedings to the vice chancellor, the defendant may either cause the order to be enrolled, and obtain an execution for his costs on the appeal, or he may proceed as for a contempt, and apply'for an attachment against the complainant for the non-payment of the costs.
    October 4th.
    The defendant appealed from an interlocutory decision of a vice chancellor, refusing" to modify an injunction. The chancellor reversed that decision, and modified the injunction as prayed for on the original application to the vice chancellor, and ordered the complainants to pay the costs of the appeal; no one appearing on the hearing of the appeal, in their behalf, to oppose the defendant’s application. No order was made to remit the proceedings on the appeal to the. vice chancellor. But the defendant procured his costs on the appeal to be taxed, and caused them to be demanded of tile complainants, according to the provision of the 171st rule, and then applied to the chancellor, ex parte, for an order to commit the complainants, according to the direction of the statute, for the non-payment of these costs.

      JE. W. Leavenworth, for the defendant.
   The Chancellor.

As the proceedings on this appeal Were not remitted to the vice chancellor to carry into effect this order for the payment" of Costs, there can be no doubt that the application is properly made to the chancellor, to enforce their collection. The only doubt which suggested itself to me, in this case, Was whether this was one of the cases provided for by the fourth section of the title of the revised statutes, Which relates to proceedings as for contempts to enforce civil remedies, and to protect the rights of parties in civil actions, (2 R. S. 535;) or whether the defendant was not bound to procure the order of this court, on”the appeal, to be enrolled, and to take out execution thereon, in the usual manner, as on a final decree. The third subdivision of the first section of that title of the revised statutes, seems to limit the power of the court to commit a party, for the non-payment of any sum of money ordered to be paid, to those cases where, by law, an execution cannot be awarded for the collection of such sum. (2 R. S. 534, § 1, sub. 3.) By the 104th section of the title which relates particularly to this court, (2 R. S. 183,) the performance of any decree, or obedience thereto, may be enforced by execution against the body, or against the goods' and 'chattels, lands and tenements of the party, against whom the decree was made. I have no doubt that this court, on an appeal from an interlocutory decision of a vice chancellor, may make a decree respecting the costs on such appeal, which will authorize the party to enrol the same and to take out an execution against the person, or the property of the party, against whom such costs are adjudged. (See 2 R. S. 613, § 2.) Such indeed is the practice of this court in relation to costs awarded in the court for the correction of errors, on appeals from interlocutory orders of the chancellor. The decree of the appellate court, in such cases, is a final decree, so far as respects the costs awarded on the appeal; and those costs may be collected on an execution in the usual manner.

gy the former practice of this court, however, the remedy of the party might have been enforced, in all cases, by attachment or process of sequestration; .although the court was authorized to enforce the performance of its decrees by a common law execution, against the property or the body of the party against whom the decree' was made, as is provided for in the present statute. (1 R. L. of 1813, 487, § 4.) And by the eighth subdivision of the first section of the title before referred to, (2 R. S. 535, § 1, sub. 8.) proceedings as for a contempt may be resorted to in all cases where attachments and proceedings as for contempts have been usually adopted and practised in courts of record, to enforce the civil remedies, or to protect the rights of any party to a suit.

I conclude, therefore, that it was optional with the appellant in this case to have the decree of the chancellor, awarding costs on the appeal, enrolled, and to take out a fieri facias, or capias ad satisfaciendum thereon; or to apply for a precept to commit the complainants to prison until those costs were paid, and without incurring the useless expense of an enrolment;

An order must therefore be entered, authorizing the issuing of such a precept, for the amount of the costs as taxed by the vice chancellor, and for the expenses of this application.


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    Lindsay and others vs. Jackson and McJimpsey.
    Equity requires that cross demands should be set off against each other.
    And in a case not within the statute of set-off, chancery will permit an equitable set-off, if, from the nature of the claim, or the situation of the parties, justice cannot be obtained by a dross action.
    The insolvency of one of the parties is a sufficient ground for the court to exercise its equitable jurisdiction, in allowing an equitable set-off.
    And a set-off will be allowed, on the application of the complainant, where the defendant is insolvent; although the debt of the complainant to the defendant is not due.
    Otherwise, if the debt of the defendant to the complainant is payable at a future day.
    October 4th.
    This was an appeal from a decision of the vice chancellor of the first circuit. In May, 1831, the complainants gave to the defendants two negotiable promissory notes, for the sum of about $1500 each, payable in six months, without interest. About the same time the defendants became indebted to the complainants, on an acceptance for $4000, payable on the 13th of June. A few days before this acceptance became due, the defendants became insolvent, and stopped payment. In July, 1831, the complainants filed their bill in this cause to restrain the defendants from negotiating or transferring the notes; and praying that the amount to become due thereon might be set-off, or applied in part satisfaction of the $4000 due on the acceptance. An injunction having been granted, according to the prayer of the bill, the defendants applied to the vice chancellor for a dissolution of the same. The vice chancellor denied the motion; and from that decision, the defendants appealed to the chancellor.

      B. F. Butler, for the complainants.

      J. Hoyt, for the defendants.
   The Chancellor.

There is a natural equity that cross demands should be off-set against each other; and that the balance only should be recovered. This was the rule of the civil law, and it is now adopted and preserved as the law of those countries, where the principles of the civil law prevail. (Code Nap. lib. 3, tit. 3, § 4. Institutes of Law of Spain, lib. 2, tit. II, ch. 2, § 6. Van Der Linden’s Inst, of Law of Holland, lib. 1, ch. 18, § 4. 2 Bell’s Com. on Law of Scotland) cj1- ^ § 2, p. 124.) By the common law of England, however, this natural equity was not allowed or enforced in the courts of law; but each party was left to recover his demand in a separate action. As a general rule, the court of chancery followed the rule of law; and after the statute had permitted set-offs to a certain extent, in suits at law, this court also adopted and acted on that principle. But the court of chancery, even before the statute, recognized the principle of natural equity, and acted upon it in cases where the law could not give a remedy in a separate suit in consequence of the insolvency of one of the parties. Thus in Hawkins v. Freeman, (2 Eq. Ca. Abr. 10,) which was decided by Lord Macclesfield five years before the statute of set-offs was passed, the court of chancery interfered to enforce this naturalj equity, as between the administrator of an insolvent estate and the complainant, between which complainant and the intestate there Were mutual demands. The same principle of natural equity was recognized by Lord Chief Justice Hale many years before. See Chapman v. Derby, 2 Vern. 117.) And at this day, if the court finds a case of natural equity, not within the statute, it will permit an equitable set-off, if, from the nature of the claim, or from the situation of the parties, it is impossible to obtain justice by a cross action. (See Piggott v. Williams, Mad. & Geld, R. 95.)

Where there are mutual demands between the parties Which cannot be set-off under the statute, but which a court of equity may compensate or apply in satisfaction of each other without interfering with the equitable rights of any person, the fact that one of the parties is insolvent has frequently been held a sufficient ground for the exercise of the equitable jurisdiction of the court of chancery. Vide Lord Lanesborough v. Jones, 1 P. Wms. 325.) In Pond v. Smith, (4 Conn. R. 302,) the supreme court of Connecticut held that the insolvency of one of the parties was a sufficient ground for the interference of a court of chancery to off-set mere legal demands against each other, although they were so situated as to be incapable of being set off at law ; and that the complainant ought not to be left to pursue his legal remedy against the defendants, when, from their insolvency, no satisfaction of his demand could be thus obtained. And in Searchet v. Admr. of Searchet, (2 Hamm. Ohio R. 320,) the supreme court of Ohio, on a bill in equity, permitted the complainants to off-set an equitable balance due to them from their co-partner, against a joint bond given by them to him ; although, from the unliquidated nature of their claim, there could be no set-off at law. In Collins v. Farquar, (1 Litt. R. 153,) the court of appeals in Kentucky recognized the principle that the insolvency of the defendant will, in equity, give the court jurisdiction to decree a set-off of a demand against him, which might be recovered in an action at law, if he was solvent. And in delivering the opinion of the same court, in the case of Robbins v. Hawley, (1 Monroe’s R. 194,) Judge Owsley says : ' “Robbins is admitted to be insolvent, and Dodge must be understood from the proceedings to be out of the country ; and it will not be denied but that those facts are sufficient, in general, to warrant a court of equity in taking cognizance of a cause, for the purpose of setting off demands, which, from a lack of connexion, cduld not otherwise be decreed in a court of equity.” (See also Prior v. Richards' Admr. 4 Bibb’s R. 356, and Ball v. Townsend, Litt. Sel. Ca. 325.) The same principle is recognized in the law of Scotland, where, in ordinary cases, a debtor is not allowed to avoid the payment of what is liquidated and payable, during a long litigation on an unliquidated counter claim ; yet there is an exception to that rule, in case of bankruptcy. For a solvent debtor will not be compelled to pay the liquidated debt, and come in with the other creditors for his illiquid claim ; but he may plead compensation. (1 Bell’s Law Dict. 258, art. Compensation.) The general principles of set-off are recognized and authorized by a public statute in that country, as well as here. But the learned commentator on the law of Scotland says, the statute is in no degree exclusive of the operation of equity naturally falling under its rules ; and that the insolvency of a party has always been admitted as a ground for administering an equitable remedy. unknown.to the ordinary course of law. (2 Bell’s Con. 127.) In the case of Simpson v. Hart. ( 4 John. R. 63,) the court of errors in this state, on appeal from this court, permitted a set-off in a case where it was evident no set-off could have been plead at law, if the defendant had brought his action against the complainant on his judgment; because the two judgments off-set were not between the same parties. Judge Spencer, who delivered the opinion of the court of error's in that case, considers the fact of the insolvency of the defendant a material allegation in the cause, and puts the decision substantially on that ground.

It is true that Judge Story, in the case of Green v. Darling, (5 Mason’s R. 201,) refused a set-off in equity, because, by the law of the state where the contracts were made, one judgment could not be off-set against the other, under the statute. But it must be recollected he was administering the law of a state which had no court of equity ; and as no right of set-off had been declared by the laws of the state, and no court had been organized therein to give a remedy, except in the courts of law, the extent of the remedy showed the extent of the right as it existed in that state. In page 207, of the report, Judge Story says : “I do not speak here of cases where distinct equities arise from other sources, but upon the naked equity of distinct and unconnected debts, and independent of any. statutable regulations.” He subsequently explains what he means by new or-distinct equities. And I think it is pretty evident he does not mean to say that the total insolvency of the defendant might not be a sufficient equity to authorize a court of chancery to interfere, if the contracts had been made in a state where equitable jurisdiction was vested in any of its courts ; although he expresses no definite opinion on that question.

It remains to be seen whether the fact, that the defendants” notes against the complainants have not yet become payable, forms any valid objection to the claim of the latter to have them applied in payment of their debt which is now dye from the defendants. As the notes are not on interest, there can he no injustice in compensating the defendants, for the amount to become due thereon at a future day, by a present payment. The complainants alone had any interest in obtaining the time of credit which was given on these demands, It might present an entirely different question if the defendants’ debt was now due from the complainants, who were seeking to compensate it by a claim against the defendants, payable at a future day. (See Young v. Guy, 10 J. B. Moore’s R. 193.) But the case now under consideration seems to come within the principle laid down by Pothier, (Pothier on Ob. 590,) that a debt of a specific thing may be opposed to a general debt of the same kind, which necessarily includes the specific thing. He put the case thus; “lam your creditor for six pipes of wine of a particular vintage: you are my creditor for six pipes of wine generally. I may demand the six particular pipes, and therefore you cannot off-set the general debt for six pipes. But I may off-set my particular pipes, if I please, against yours, because I could turn them out to you in payment of the general debt.” Here, the defendants could not claim present payment of their notes, due six months hence, and therefore it would be inequitable for them by an off-set, to compel the complainants to pay those notes before they became due. But as the debt of the defendants is due, and if they paid it immediately, according to their agreement, the complainants might, without any injustice to the other party, waive the time of credit which was for their own benefit, and pay the notes immediately with the money thus received, the defendants have no cause to complain of such a mode of compensating one debt by another.

Under the circumstances of this case, as disclosed in the complainants’ bill, I think it would be inequitable and unjust to permit the defendants to dispose of these notes, (either for their own private purposes, or in payment of their general or favorite creditors, leaving the complainants’ debt unpaid. Although equality among creditors is equity, here is a prior and a paramount equity, which must first be provided for. An equity, which is distinctly recognized by the insolvent acts of this state which have also declared the other principle, and enforced it to a certain extent.

The decision of the vice chancellor in refusing to dissolve the injunction was therefore right. It must be affirmed, with costs; and the proceedings are to be remitted to the vice chancellor.


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    Morris and others vs, Mowatt and others.
    Where a purchaser at a master's sale purchases under the assurance that he is to receive a perfect title, if such title cannot be given he will not be compelled to complete the purchase.
    Neither can he be compelled to receive a good legal title, if it is liable to be litigated in consequence of some valid equitable claim which may be brought against it.
    He is not obliged to accept a mere equitable title, or a title which is doubtful.
    The purchaser has a right to require, under such circumstances, a title which is good both at law and in equity.
    A judgment, as soon as it is docketed, becomes a general lien at law, on all the real estate of the debtor, not only as against himself, but also as against all other persons deriving title through or under him, subsequent to such judgment.
    The lien, however, may, in some cases, be displaced by the execution of a power which overreaches the judgment.
    Blit if a purchaser, acquiring a title under the execution of Such power, has notice that the power is improperly or inequitably executed, a court of chancery will enforce the lien of the judgment as against such title.
    So’the lien of the judgment may be removed by a decree of the court of chancery, where the judgment debtor holds the legal estate in the land merely as a naked trustee for another, or where there is a subsisting equitable claim against the premises, whiohis prior in point of time, to the lien of the judgment.
    Debts due by the testator are equitable liens upon his estate in the possession of his heirs or devisees, and prior in time to judgments recovered against them for their individual debts.
    But the judgment creditors of the heirs or devisees have a right to ask for the application of the personal estate, in the first1 place, to the satisfaction of the debts due by the testator, or that they be substituted in the place of the creditors of the testator as to such personal estate.
    Before foreclosure, a mortgagee cannot maintain ejectment to recover possession of the mortgaged premises, and he has no interest in such premises which can be sold on execution; and before an entry under his mortgage, he is not bound, as an assignee of the mortgagor, by a covenant running with the land.
    The revised statutes have prescribed a new mode, by a bill in equity, of proceeding against heirs and devisees to obtain satisfaction of the debts' due from the estate of the testator or intestate.

      A final decree in such suit has a preference, as a lien on the estate descended or devised, over any judgment or decree obtained against the heir or devisee for his personal debt.
    And a sale under an execution, issued upon such decree, will overeach, not only all judgments and decrees which have been recovered against such heir or devisee, but also all mortgages and alienations of the estate, subsequent to the commencement of the suit.
    Whether a sale under execution issued on the decree is necessary to give the purchaser a legal title, sufficient to protect him at law against a sale under a previous judgment against the heir or devisee ? Qutere.
    October 4th.
    John Mowatt, jun. by his will, made in 1820, devised a part of his real estate to his wife, during her widowhood ; and after making certain pecuniary and specific bequests and legacies, he devised all the residue of his estate to his three sons, Charles Mowatt, James Mowatt, and John E. Mowatt, share and share alike. He also authorized his said three sons, who were appointed executors of the will, to sell any part of the real estate, for the payment of his debts or to carry into effect the uses and trusts of the will. After the death of J. Mowatt, jun. the complainants filed a bill against his executors, to obtain payment of a debt due them from the testator. In November, 1828, a final decree was made in that cause, establishing against the executors a debt of about SI6000, and directing it to be paid out of the estate of the testator in their hands. Previous to the making of this decree, Charles Mowatt mortgaged his interest in a part of the real estate of his father to the Phoenix Fire Insurance Company, and several judgments had been recovered against the devisees respectively, for their own debts, which were liens on their interests in the estate so devised to them by their father, John Mowatt, jun. The complainants being unable to find personal estate in the hands of the executors to satisfy this decree, filed their bill in this cause against Charles and James Mowatt, as the devisees of their father, and also against the widow of the heir at law of J. E. Mowatt, the other devisee, who was then dead, to obtain satisfaction of their debt out of the real estate of their testator so devised to his three sons by' his will. The Phoenix Fire Insurance Company and Robert Lenox, who held a mortgage against the estate, executed by the testator in his lifetime, were also made parties defendants in the suit; but none of the judgment creditors of the devisees were made such parties. In November, 1830, a decretal order?was made, referring it to a master to inquire and report, among other things, the amount due to the complainants, and the amount due to R. Lenox and the Phcenix Fire Insurance Company, on their mortgages respectively. This decretal order further authorized the master to take an account of the personal estate which belonged to the testator, at the time of his death, and of the administration thereof by the executors, if thereto requested by any of the parties to the suit. The master made a separate report, stating that he had been requested by the devisees to take an account of the persona] estate, and of the administration thereof, and finding that the taking of that account, and the account of what was due to the Phcenix Fire Insurance Company, would produce great delay, he had, at the request of the complainants and of Lenox, consented to make a separate report as to the amount due them respectively. He thereupon reported a balance due to the complainants of #7582,22. He also reported that there was due to R. Lenox, on his mortgage, #17763,99, which was a specific and prior lien upon a house and lot in Pearl-street, in the city of New-York, which belonged to the testator at the time of his death. In January, 1831, a decretal order was made, founded on this separate report, directing the house and lot in Pearl-street, and five houses and lots on Franklin-street, to be sold by a master; and the master was directed, out of the proceeds of the house and lot in Pearl-street, to pay the amount due to Lenox, and to bring the residue of the proceeds of the sale into court.
    Under this decretal order, the master put up and sold at auction the Pearl-street house and lot, and the same was purchased by Jacob S. Platt, for the price or sum of #33,-250. The lot was sold by the'master, upon the understanding that the purchaser was to have a good and perfect title to the lot, under the decretal order of the court. The purchaser paid down 10 per centum on the amount of his bid, at the time of the sale ; but being afterwards advised by his counsel that, his title under the decree would not be perfect, fee declined completing the purchase. The complainants thereupon presented a petition to the court to compel him to pay the residue of the purchase money, according to his bid, on the sale by the master.

      D. S. Jones, for the complainants.

      T. Fessenden, for the purchaser.
   The Chancellor.

The purchaser in this case bid off the premises in question, at the master’s sale, under the' understanding, expressed at the time of the sale, that he was to have a perfect title under this decree; and if the master’s deed will not give him such a title, he must be discharged from the obligation of his purchase ; unless the parties interested in the sale can procure a discharge of the outstanding claims and incumbrances.

It is not necessary that I should particularly notice the mortgage given by two of the devisees to their mother, to secure her annuity. As she is dead, the annuity is at an end ; and probably the arrears were paid up to the time of her death. If this was the only question in the cause, the master would be directed to inquire and ascertain whether any thing remained due on that mortgage; unless the parties elected to procure it to be cancelled on record.

The important question in this cause is as to the objection that there are outstanding judgments against each of the three devisees, and that the judgment creditors are not parties to this suit. The lot in question was not devised to the executors as such ; but it was devised to the widow during her life or widowhood, with remainder to the three sons of the testator in fee, subject to the payment of debts, and subject to the power of the executers to sell for that purpose. Although the three sons are named in the will as executors, yet they do not take the real estate as such executors but as devisees thereof, and as tenants in common under the will. The judgments, therefore, which were afterwards rendered against them individually, became general liens on their several interests in the estate ; and the question now presented is whether the purchaser under this decree will obtain a valid title, as against the lien of those judgments.

It is a well settled, principle in this court, that a purchaser, who has contracted for a good title, will not be compelled to accept a mere equitable title, of which he cannot avail himse]f in a suit at law, to recover the property, or to defend his possession, if necessary. (Abel v. Heathcote, 2 Ves. jun. 100.) It is equally well settled, that this court will uot compel a purchaser to accept a doubtful title. And even if he obtains a good legal title, yet if it is liable to be litigated in a court of chan, eery, in consequence of some valid equitable claim which may be brought against it, the purchaser will be discharged of his purchase. (Grover v. Hugell, 3 Russ. R. 428.) A sale, therefore, under a decree of this court, where the master, by the direction of the parties interested, professes to sell a perfect title, entitles the purchaser to a title which is good both at law and in equity. Is this then a title of that description ? The' moment a judgment is docketed, it becomes, at law, a general lien on all the real estate of the debtor; not only as against himself, but also as against all other persons deriving title through or under him subsequently to such judgment. It affects the legal estate, and the lien of the judgment cannot, at law, be detached or defeated by any species of alienation whatsover. 1) Atk. on Conv. 505, 511.) The lien may indeed be displaced, in some cases, by the execution of a power which overreaches the judgment. But if the purchaser has notice that the power is improperly or inequitably executed, a court of chancery will enforce the lien of the judgment, even as against the title acquired under such power. The lien of a judgment may also be removed of displaced by the decree of this court where the judgment debtor holds the legal estate in the land merely as a naked trustee for another, or where there is a subsisting equitable claim against the premises, which is prior, in point of time, to the lien of the judgment. (Ex parte Howe, 1 Paige’s R. 130. 1 Atk. Conv. 512.)

In the case under consideration, the debts due from the testator to these complainants and others, were equitable liens upon the estate devised to his sons, which liens are prior, in point of time, to the judgments recovered against the sons for their own private debts. If the judgment creditors had been made parties to this suit, these prior equities could have been established in favor of the creditors of the testator. And the judgment creditors would then have been perpetually enjoined from proceeding at law against the property sold under the decree in this cause. Being parties to the suit, they would have been entitled to contest the validity of the complainant’s claim against the estate of the testator; and if that was established, they would then have the right to ask for the application of the personal estate, in the first place, to the satisfaction of that claim, if any such personal estate could be found; or, at least, that they might be substituted in the place of the creditors of the testator, as to such personal estate, on the principle of marshalling securities, if the real estate was applied to the payment of the debts of the testator in the first instance. And if no personal estate remained, they would still have had the right to insist that the real estate should be applied in payment of the testator’s debts, in. the manner directed by the will: That is, that the Pearl Street property should not be sold for that purpose, until all the other property of the testator, both real and personal, had been exhausted. It will be seen at once, that this would have raised the question, whether the Franklin street lots, on which the Phoenix Fire Insurance Company have a mortgage from some of the devisees, or the Pearl Street house and lot, on which the lien of the judgments first attaches, should be sold to satisfy the complainant’s claim.

What then will be the situation of the purchaser under this decree, as to the security of his title, either at law, or in equity 1 At law, the judgment creditors may sell the legal estate by execution on their judgments ; and the purchasers will acquire a legal title, which will overreach the sale under this decree. And the judgments being obtained before the creation of a lis pendens here, by the commencement of this suit; the court of chancery cannot protect the present purchaser, by any order or injunction made in this cause, to which the judgment creditors are not parties. He will therefore be compelled to file a bill, even to protect himself against this assertion of a legal right on the part of the judgment creditors. And upon that till, in order to protect his equitable right to this property, he will not only be compelled to prove the existence of the debt alleged to be due from the testator to t^le Present complainants, but he will also be required to litigate every question which the judgment creditors might have raised as an objection to the sale of this particular portion of the real estate of the testator. The fact that Lenox, one of the present defendants, has a mortgage on the Pearl Street property, executed by the testator in his lifetime, does not materially alter the rights of the purchaser under this decretal order. It is now well settled in this state, that even at law, the mortgage is to be considered a mere security for the payment of a debt. Before foreclosure, the mortgagee has no interest in the land which can be sold on execution ; and before entry under his mortgage, he is not bound, as an assignee of the mortgagor, by a covenant running with the land. (Jackson v. Willard, 4 John. R. 41. Astor v. Hoyt, 5 Wend.(603.) Under the provisions of the revised statutes, he cannot even maintain an ejectment to recover the possession of the mortgaged premises, before the mortgage has been legally foreclosed. (2 R. S. 312, § 57.)

The revised statutes have prescribed a new mode of proceeding, by a suit in this court, against heirs and devisees, to obtain satisfaction of debts due from the decedent. And every final decree rendered in such suit, against the heir or devisee, has a preference, as a lien on the estate descended or devised, over any judgment or decree obtained against the heir or devisee, for his own personal debt. A sale upon an execution under such a decree, will, at law, not only overreach-such judgments, but will also overreach all mortgages and alienations of the estate, which are subsequent to the commencement of the suit in this court. (2 R. S. 454.) But the decretal order, under which the present sale took place, is not such a final decree as is contemplated in the statute. And probably to give the purchaser a perfect legal title, sufficient in a court of law to protect him against a sale under the previous judgment against the heir or devisee, it may be necessary to issue an execution on the decree, and to have the property sold b y the sheriff, in the usual manner. On this point, however, I do not mean to be understood as expressing any definitive opinion.

The conclusion at which I have arrived in this case is that the purchaser cannot obtain a perfect legal title under the conveyance from the master, sufficient to protect him against these judgments, which at law form a previous lien on the premises. And as it is admitted to be impossible to obtain releases of all the judgments, within any reasonable time, the purchaser must be discharged of his purchase, and the deposit must be restored to him. He is also entitled to interest on that deposit, and to the costs to which he has been subjected. At present, there is no fund under the control of the court out of which the interests and costs can be paid ; and as all parties have acted in perfect good faith in relation to this sale, the expenses must be paid out of the fund hereafter to be raised, if a second sale takes place. If no sale of the property is had, and no other way is provided for the payment, the charge must fall on the complainants personally. The question, as to the final disposition of this claim for interest and costs, is for the presént reserved; with liberty for the purchaser to apply hereafter by petition, as he shall be advised.

If all the parties to this suit consent to a re-sale of the property under the present decretal order, the master is to proceed and sell, subject to the legal and equitable rights of all persons, other than the parties in the cause and those who are bound by the decree. But in that case, the master should inform the bidders at such re-sale of the nature of the objections which exist against the title under such sale. If a re-sale, at the risk of the purchaser, is not deemed advisable by the parties interested in this matter, the complainants are to be at liberty to file a supplemental bill, for the purpose of bringing the judgment creditors before the court; or to apply for a rehearing, and to vacate the decretal order of the seventh of January last, as they may be advised. If a receiver is necessary to preserve the property, and to secure the rents and profits in the meantime, one will be appointed, as a matter of course, upon a proper application, and on dne notice to such parties as have a right to be heard on that question.


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    Brown and others vs. Story.
    Where one of several complainants dies pending the suit, and- the cause of action survives, the surviving complainants, if they wish the suit to procee d in their names as survivors, must make a special application to the court for that purpose.
    Where the surviving complainants are insolvent, the defendant, who had demands against the deceased and surviving complainants jointly, will be permitted to file a cross bill, in the nature of an original bill, against the surviving complainants and the personal representatives of the deceased complainant; and the proceedings in the original suit will be stayed until the cross suit is in readiness for a hearing.
    October 4th.
    The defendant, Story, commenced a suit at law against J. D. Brown, G. W. Brown and J. Brown, to recover a debt alleged to be due from them to him. The Browns then filed a bill in this court against Story for an account in relation to the same, and other matters, and obtained an injunction to restrain the proceedings in thé suit at'Iaw. Story, in his answer, set forth his claims against the complainants ; and also a large claim against J. Brown, one of the complainants individually. A replication was filed to the answer, and a reference made to a master to take an account of the transactions between the parties; reserving all further directions. Pending this reference, J. Brown died, possessed of a considerable property ; but the other complainants are alleged to be insolvent. After the death of J. Brown, on a suggestion of his death and that the cause of action had survived, the surviving complainants obtained an order that the suit proceed in their names as survivors. An application having been made to set aside that order for irregularity, the complainants appeared and opposed the application ; and it was ordered to stand over to a further day. On that day the defendant’s counsel having received no further instructions on the subject, the motion was denied. A new application was thereupon made, upon new papers, to set aside the order, or to stay the proceedings until the suit should be revived in the name of the personal representatives of J. Brown; or for such other relief as the court might consider Proper.

      B. F. Butler, for the complainants.

      J. E. Lovett, for the defendant.
   The Chancellor.

From the course Which the former application took, and under the peculiar circumstances of this case, I do not think the defendant is precluded from making the present application, on the new facts disclosed. But I see no cause to alter the opinion which I then expressed, that this is a case in which the cause of action survived to the complainants. The order entered in the register’s of® fice, without a special application to the court, was clearly irregular. But as the other would have been granted on a special application, under the circumstances now disclosed, it is unnecessary to set it aside.

The separate claim of the defendant against J. Brown was' not a proper subject of litigation in this suit. It was not the claim for which the defendant brought his suit at law | and it could not properly be joined in this suit with the matters which were in controversy between the defendant and all the complainants jointly. If Story has any just claim against the executors of J. Brown, for a separate debt due from their testator, he must either bring a suit against them at law, or file a bill in equity to substantiate and recover that demand. And if the surviving complainants in this suit were solvent and responsible, there could be no necessity for bringing the personal representatives of J. Brown before the court, previous to talcing this account. But the defendant has lost his remedy at law against the estate of J. Brown, for any demand which existed against him jointly with the surviving complainants. And as they are alleged to be insolvent, so that he can obtain no benefit from the decree in this cause, if a balance should be found in his favor, it seems inequitable that he should be compelled to go on and take that account, in the absence of the personal representatives of the deceased complainant. If he would not be precluded by the decree in this cause from afterwards assertíDg his claim against the estate of J. Brown, in equity, he rnaM at least, file a new bill and go through the same course of litigation the second time, in order to obtain any balance which may be justly due him. He must therefore be permitted to file a cross bill, in the nature of an original bill, against these complainants and the personal representatives of John Brown, setting forth his joint claims, and alleging the insolvency of the survivors, by which he is compelled to resort to the estate of John Brown.

If the defendant files such cross bill within one month, and prosecutes it with due diligence, the proceedings on the reference must he staid until that cause is in readiness for a hearing, or until the further order of the court; so that only one accounting between the parties may be necessary.


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    In the matter of Pettit, a lunatic.
    The chancellor has no authority to order the sale of the real estate of a luntic ; unless it be necessary for the payment of his debts, or the maintenance of the lunatic, or his family, or for the education of his Children.
    And in neither of these cases can it be done, if there is a personal estate sufficient for that purpose.
    October 4th.
    This was an application on the part of the committee of the person and estate of a lunatic for permission to sell her real estate. The petitioner stated in his petition that the personal estate of the lunatic amounted to less than $1400, and that it produced an income of about $80; that the real estate consisted of about 600 acres of land in the state of Ohio, and of the equal undivided eighth part of a house and lot at Sandy Hill, and of five other lots or pieces of land in this state; that the value of the lunatics’ share of that portion of the real estate which is within the jurisdiction of the court, was worth about $470, and produced an income of only $21,75; that the income of her real and personal estate was not sufficient for her support; and that if her interest in the real estate was not sold, the owner of the seven eights of the part thereof situate in this state would apply for a partition. Th e ''committee therefore prayed that he might be authorized to sell her interest in the real estate, and invest the proceeds ¡thereof for her use.

      JD. W, Bate, for the petitioner.
   The Chancellor.

There can be very little doubt that' the interest of the lunatic would be advanced by a sale of her interest in all her real estate, except that which lies in the state of Ohio. The only question therefore is, whether this court has power to authorize such sale. Independent of the statutory provisions, this court has no authority to order a sale of freehold estate of a 'lunatic, even for the payment of debts ; although the creditors, by filing a bill, might compel a sale. Thus, in the case of John Smith, a lunatic, it appeared that he was entitled to freehold estates, under the will of his father, subject to the payment of mortgages and bond debts charged thereon. A bill being threatened by the creditors to compel a sale, a petition was presented, praying that a specific portion of the estate might be sold for the payment of the debts. And although the heir at law and the next of kin of the lunatic consented to the prayer of the petition, Lord Thurlow decided that he had not jurisdiction in lunacy to authorize the sale. (Ex parte Smith, 5 Ves. 556.) The statute gives to this court authority to order a sale only in certain specified cases. And, however desirable it may be, under peculiar circumstances, to sell the property of a lunatic in cases not coming within the statute, it belongs to the legislature alone to afford the proper remedy.

The eleventh section of the title of the revised statutes, which provides for the custody and disposition of the estate of idiots, lunatics, persons of unsound mind, and drunkards, (2 R. S. 53,) authorizes an application for the sale of the real estate, where it is necessary for the payment of debts. The sixteenth section authorizes a similar application, where the sale is necessary for the maintenance of the lunatic or his family, or for the education of his children. But in neither of these cases can the court direct a sale of the real estate for the payment of debts, or for the purposes of maintenance, so long as there is personal estate sufficient for that purpose. To obtairi a sale for the purpose of maintenance, the corn-' m*ttee must show that the principle and interest of the person-al property, and the rents and profits of the realty, are not-1 sufficient to support the lunatic.

In the case under consideration, the mere income of the' property is nearly sufficient for the support of this young woman, without breaking in upon the principal of the personal estate. And, at the present rate of expenditure, she may be supported more than twenty years, before the personal estate' will be exhausted. This is nearly the average extent of the lives of healthy perons of her age ; and, as her constitution is stated to be but indifferent, the probability is, if her lunacy continues, that there will never be any necessity for selling' the real estate for her support. But, if there was only sufficient personal estate to support the lunatic for a single year, the court has no authority to order the real estate to be sold Until such personal estate is exhausted. I do not intend to lay down the rule that no application can be made, until the committee has actually exhausted all of the personal property. But it must be so far diminished that the court can see that it will probably be expended before the proceedings to sell the real estate can be consummated, so as to make the proceeds thereof available for the purposes of maintenance.

It might sometimes be beneficial to the estates of persons in this situation, if the court had a general power to authorize a sale in all cases, in the discretion of the court, as in the case of infants. But when we take into consideration the danger to which the property is exposed in the hands of committees, who are only required to give personal security, it is perhaps a circumstance not to be regretted, that the legislature have only conferred Upon this court the power ter authorize a sale in the two specified cases. I see no difficulty in making partition of the lands in this case, either by agreement of the parties, under the sanction of the court, according to the eighty-ninth and ninetieth sections of the partition law, (2 R. S. 331,) or by a proceeding under the general provisions of the statute for that purpose. The fact, that some particular portions of the property cannot be divided, does not render a sale thereof necessary. That part may be assigned to the owner of the seven eighths thereof, and the share of the lunatic may be assigned from the other portions of the estate.

As the court has no authority to authorize the sale asked for in this case, the petition must be dismissed.


text:
    Leggett vs. Postley.
    A defendant cannot be compelled to answer a charge in the complainant’s bill, which, if true, would subject him to an indictment, or a criminal prosecution.
    A fraudulent combination to commence suits against a person, with the view of extorting money from him, is an indictable offence, and the persons guilty of it may be punished for a conspiracy.
    To sustain a bill of discovery, filed in aid of a defence at law, the complainant must show, in his bill, that the discovery prayed for is material to his defence at law, and also that his defence at law cannot be established by the testimony of witnesses, or without the aid of the discovery which he seeks. '
    A discovery will not be allowed, merely to guard against anticipated perjury in a suit at law.
    October 4th.
    This cause came before the court on a demurrer to a bill of discovery. The complainant alleged that he had been president of the Franklin Bank, previous to its failure. That in December, 1826, he was induced to become such president, by the solicitations of some of the directors, and other persons interested in the institution. That, on investigating the affairs of the bank, he found that many frauds had been committed by former officers, which had diminished and put in hazard the capital of the bank; against all of which acts he signed a formal protest, in writing, (which was set out at length in the bill,) and placed the samé in the hands of one of the directors, to be preserved. That, during the time he Was president, he improved the funds of the bank at least $300,000. That, notwithstanding his exertions for the benefit of the creditors and stockholders of the institution, the defendant, Postley, from unfriendly and vindictive motives, had procured a combination of individual creditors of the bank to be formed, for the purposes of instituting suit's against the complainant in his individual capacity, in order to render him and his property liable. That Postley had ma(je to the other conspirators fraudulent misrepresentations of the complainant’s conduct, to induce them to join in the combination ; and had represented to them, that by bringing: suits against the complainant he would be induced to compromise. That in prosecution of the views of these conspirators, Postley had sued the complainant in the superior court in the city of New-York, and had procured and induced one C. Pool to commence another suit against him in the circuit court of the United States. That the defendant, in the suit brought by him, relied principally upon a return of the state-of the bank made to the legislature in March, 1828; but that the complainant had no agency in making that return, and did not see it until after it had been filed,' it being the sole act of the cashier. That the return was never seen by Postley, and that he had no knowledge of the same until after the failure of the bank, and that it could not therefore have induced him to credit the bank. That the defendant also-averred in his declaration in the superior court, that the complainant, to induce him to continue his account with the bank, had represented to him that the company was solvent and safe, &c. which allegation was not true. And the defendant was called on to answer the several statements and charges contained in the bill; particularly as to the combination charged therein, and whether he knew of the false return made to the legislature; and whether a knowledge of such false return induced him to give credit to the bank. An injunction having been granted to restrain the proceedings of the defendant in his suit at law, on an application to the chancellor the injunction was dissolved. The defendant afterwards put in a demurrer to the whole bill, for want of equity; and he assigned therein, as special causes of demurrer, that it did not appear from the bill that the discovery sought was necessary or material to the complainant’s defence at law; and also that the discovery of the alleged conspiracy would subject the defendant to a criminal prosecution,.

      C?. Brinckerhoff, for the complainant,

      Hugh Maxwell, for the defendant.
   The Chancellor.

The defendant cannot be compelled to answer a charge, which, if true, will subject him to an indictment, or expose him to a criminal prosecution. The substance of the allegations in the bill is, that the defendant has entered into a fraudulent combination with others, to extort money from the complainant. That he has entered into an agreement with other creditors of the Franklin Bank, falsely to move and maintain certain suits against Leggett, which the confederates, and particularly the present defendant, knew to be unjust and unfounded; and by that means to compel the complainant to compromise with them for their claims against the bank, to relieve himself from those prosecutions/ It is evident, that if the charges in this bill are true, the defendant and the other parties to the combination are guilty of an indictable offence, and may be punished for a conspiracy. (1 R. L. 1813, 173, § 3. 2 R. S. 691, § 8.)

To sustain a bill of discovery, in aid of a defence at law, it is necessary for the complainant to show that the discovery prayed is material to his defence in this suit at law; and if he does not show this by his bill, the defendant may demur to the discovery. (Mitf. PI. 4th. Lond. ed. 192. Newkirk v. Willet, 2 Caines’ Cas. in Err. 296. Selby v. Grew, 2 Anstr. 504.) And where the complainant seeks to give jurisdiction to this court, on the ground that it was necessary for him to come here for a discovery ; dr when he asks the interposition of the court to stay a proceeding at law, either by a temporary injunction or otherwise, on the ground that a discovery is necessary to aid him in his defence, he must not only show that the facts as to which a discovery is sought are material, but he must also show affirmatively, in his bill, that his right or defence cannot be established at law by the testimony of witnesses, or without the aid of the discovery which he seeks. (Gelston v. Hoyt, 1 John. Ch. R. 547. Seymour v. Seymour, 4 id. 409. Bullock v. Boyd, 2 Marsh. Kent. R. 323. Bass v. Bass, 4 Hen. & Munf. R. 478. Rees v. Parish, 1 M’Cord’s Ch. R. 60, Russell v. Clark’s Ex’rs. 7 Cranch, 89.)

In this case there is no material fact alleged to be in the knowledge of the defendant, which he could disclose without exposing himself to a prosecution for a conspiracy, if the allegations in the complainant’s bill are true. The claim for a discovery of the non-existence of facts, essential to be established by Postley in hjs suit at law, is novel and wholly unprecedented. If these facts do not exist, it is impossible for the defendant to prove them in the suit he has brought against the complainant in the superior court, unless he is guilty of subornation of perjury ; and without the proof of these facts, it is impossible for him to recover in that suit. This court cannot presume that it is material or necessary for the complainant to have a discovery, merely to guard against anticipated perjury in a suit at law. The complainant’s bill must, therefore, in this respect, be considered a mere fishing bill, to ascertain what proofs the defendant intends to produce against him in the suit brought in the superior court.

The demurrer is allowed, and the complainant’s bill must be dismissed, with costs.


author: The Chancellor

text:
    In the matter of P. Sherryd.
    A mere naked trustee, without interest, cannot become a petitioning creditor for an insolvent, without the consent of the cestui que trust, except in the cases specially provided for by the statute.
    June 1st,
    The Niagara Insurance Company was dissolved by an order of this court, under the statute, on the petition of the directors. The trustees, appointed on such dissolution, presented a petition to the chancellor, asking permission to become petitioning creditors of Patrick Sherryd, an insolvent debtor, to enable him to obtain a discharge from his debts.

      P. Griffin, for the trustees
   The Chancellor

said he could find no provision in the revised statutes, except as to executors and administrators, which authorized a mere naked trustee to become a petitioning creditor, under the insolvent act, without the assent of the cestui que trust. That it was against the spirit of the statute, to permit those who had no personal interest in the question, to decide whether the insolvent ought to be discharged from his liability to others. That it was at least doubtful whether the trustees could become petitioning creditors, even with the sanction of the court; and that the application must therefore be refused. But as it appeared that the insolvent was wholly destitute of property, the chancellor authorized the trustees, in their discretion, to discharge the debt due from Mm to the company; so that he might obtain a discharge on the petition of the requisite proportion of his other creditors.


text:
    D. Gilbert vs. B. & B. F. Gilbert.
    Where the complainant has actually removed from the state with his family, and changed his residence, the defendant is entitled to security for costs, although there is a probability that the complainant may return at some future day.
    March 15th.
    This was an application for security for costs. The facts are stated in the opinion of the court.

      S. Kendrick, for the complainant.

      S. G. Huntington, for the defendants.
   The Chancellor.

This is an application for security for costs. The affidavit on the part of the defendants is positive that the complainant is insolvent, and has removed from the state with his family. On the other side, the solicitor swears he is confident that the complainant intends to return to the state, and that his absence is temporary. He has, for the present, changed his actual residenqe; and, as it is evident, from the bill itself, that the suit is carried on for the benefit of his creditors, there is no reason why they should be permitted to carry on this suit in the name of a man who is, for the time at least, a non-resident and an insolvent, without security for costs.- He must, within thirty days, given security by a bond, in the penalty of $250, with two sufficient sureties, to be approved of by the register and filed in his office; and in default thereof, the bill must be dismissed, with costs. In the mean time, all proceedings on the part of the complainant must be stayed. (1 Sim. & Stu. R. 348. 1 Paige’s R. 644. 4 Dow. & Ry. R. 81.)


text:
    Stewart and others vs. Ellice.
    In the absence of any agreement on the subject, a debt is presumed to be payable at the place whereat was contracted, and where the creditor resides ; and interest is to be computed according to the rale allowed by the laws in force at that place.
    The court will not hear a cause, merely to decide a claim for costs, although the parties have compromised the suit, reserving the question of costs for the decision of the court.
    This was a case agreed upon between the parties; and the only questions submitted to the court, were as to the mode of computing interest on a debt acknowledged to be due from the defendant, who resides in England, and as to the costs of a former suit. The defendant insisted that- he was only liable for interest according to the laws of England, and not for the interest allowed by the laws of this state, where his agent resided, and expended the money for his use, on property lying here.

      D. Burwell, for the complainants.

      A. Van Vechten, for the defendant.
   The Chancellor.

On an examination of the papers submitted to me in this cause, I see no sufficient evidence of an agreement or understanding between the parties that the interest should not be computed in the usual manner, or that it should be paid in England. On general principles, in the absence of any agreement on the subject, the money is payable where the creditor resides, and the interest is to be compufed at the rate allowed by the law of the country where the contract was made, or is to be performed. The complainants appear to have computed it in conformity to the rules of law. It is impossible to decide whether Ellice or Girvan ought to pay the costs of the former suit, without going into a full hearing of the merits of that case. This has been rendered impossible, by the compromise between the parties. The rule of the •court is, that if a suit is compromised or settled, without any agreement as to costs, each party must bear his own. And if the parties settle the cause between themselves, reserving the question of costs, the court will not hear the cause on a question of costs merely. (Gibson v. Lord Cranly, Mad. & Geld. R. 365. Roberts v. Roberts, 1 Sim. & Stu. 39. East-burn v. Downes, 2 John. Ch. R. 317.)


text:
    Chalabre vs. Cortelyou and others.
    Where a devisee of an insolvent had a mortgage which was a prior lien on the premises devised, and she entered upon the premises as devisee, and received the rents and profits thereof, held, that as between her and the' creditors of the testator, she was bound to account for the rents and profits, and to allow them in part payment of the mortgage.
    September 7th. 1830
    The bill in this case was filed by a bond creditor of Dan-lei Cortelyou, deceased, against his devisees, to obtain satisfaction of the debt due to the complainant. A house and ten acres of land were devised to the defendant, Martha Cortelyou, who previously held a mortgage upon the same premises, to secure a debt from the testator. Immediately after the death of the testator, she entered into the devised premises, and had received the rents and profits thereof for several years.- She now claimed the whole principal and interest due on her bond and mortgage, without any deduction. '
   The Chancellor

decided, that as between the devisee and the creditors of the testator, she was bound to account for the rents and profits of the devised premises, or to allow them as part payment in ascertaining the amount due on her bond an d mortgage. And it being admitted that those rents and profits were equal to the interest which had accrued on her' mortgage in the mean time, she was only permitted to retain the amount of the principal, out of the proceeds of a sale of the mortgaged premises.