text:
    Henry L. Massaker v. Charles Mackerley and wife.
    1. Where a bill is filed to foreclose the equity of redemption, and for sale of property to satisfy what is due on a mortgage, it is no defence that the money would have been paid at the time it became due, had not the complainant, a year before, in conversation, told the defendant that he did not wish him to pay any more of the principal when it became due; and that if he needed it, he would give timely notice, and that no notice had been given.
    2. Such a promise amounts to nothing, being made without consideration.
    3. Where a bond and mortgage had been surreptitiously taken out of the complainant’s possession, and the defendant did not doubt it, it was held to be no ground of defence, that the defendant was not bound to pay the money, unless the complainant produced the bond and endorsed the payment on it, or gave the defendant a sufficient indemnity against the bond and mortgage. The receipt of the complainant for the amount was good against all the world.
    4. Such a defence is not of a character to throw the burthen of any cost upon the complainant.
    On the 29th of March, 1849, the defendant, Mackerly, executed to the complainant two bonds; one to secure the payment of one thousand dollars, in one year, and the further sum of one thousand dollars in two years from date, with interst on the whole sum, payable annually; the other was to secure the sum of three thousand dollars, as follows: one thousand dollars on the first day of April, 1852; the further sum of one thousand dollars on the first of April, 1853; and the further sum of one thousand dollars on the first of April, 1854, with interest on the whole sum, payable annually. To secure the payment of these bonds, the defendants executed to the complainant a mortgage on certain lands which the complainant had conveyed to Mackerley, and to secure a part of the purchase money, of which the said bonds and mortgage were made and executed as aforesaid.
    The bill was filed on the 28th day of May, 1852. It alleges that the first bond was paid at maturity; but that the sum of one thousand dollars, the principal due on the other bond on the first day of April, 1852, remains unpaid.

      The bill further alleges that the said bond and mortgage are lost; that the complainant kept them locked up in his bureau, and that on or about the 2d of August, 1851, they were taken away; that after diligent search, the complainant has been unable to find the same, but believe that they were carried away by Hannah Massaker, his wife, who, about the time the bond and mortgage were taken, left his house without provocation, and has since resided in Morris county; that on the 1st of April, 1852, the defendant, Mackerly, paid the interest on the said bond, and upon the principal of one thousand dollars being demanded, said he had not provided the same. The bill alleges that the defendant has knowledge where the said bond and mortgage are.
    The object of the bill is to foreclose the equity of redemption, and for sale of the property, to satisfy what is due on the mortgage.
    On filing the bill, an injunction was granted, to prevent the payment of the money due, and to grow due on the lost bond, to any other person than the complainant.
    The bill was answered by Charles Maekerley. He does not suggest, in his answer, any doubt as to the loss of the bond and mortgage, in the manner alleged by the complainant, but sets up the following defence: He says that on or about the 1st of April, 1851, at the time he made the last payment of one thousand dollars on the first bond, the complainant told him that he did not wish him to pay any more of the principal when the same became due; that all the complainant wanted was his interest, and that if the defendant paid the said principal, he, the complainant, would be obliged to loan it out again, and he wished the defendant would keep the money and pay him the interest therefor, or words to that effect. That the defendant replied that he did not like to have the matter remaining in that situation, because if he relied upon the complainant, and failed to raise the money when it became due, complainant might then call upon him for the said sum of money, and put defendant to great inconvenience to raise the same. Whereupon complainant told defendant he need have no fears on that account, because that if he, the complainant, should happen to stand in need of the said payment when it became due, he would give the defendant timely notice of it, so that he would be able to raise the same. He says that, relying upon this promise of the complainant, he did not take especial pains to raise the whole of the said sum of one thonsand dollars, to make said payment on the 1st of April, 1852, as he otherwise might and would have done. • He further says that on the 1st of April, 1852, he called on the complainant and told him he wished to pay the interest, but that he did not feel safe to pay the principal until the bond and mortgage could be found, so that the payment might be endorsed on said bond, to which complainant replied, he had promised the money to one Samuel Van Blarcom, if defendant paid it in. Whereupon defendant reminded complainant that he had said to defendant he did not want the money, and that his promising it to another, without giving defendant notice, was contrary to his agreement, which complainant did not deny, but replied that he thought now his bond and mortgage were gone, he ought to have his money, or words to that effect, but that the complainant, neither on that day, or at any other time before the commencement of this suit, made any other demand or request of payment. He further says that in the same conversation, he told complainant that if the bond and mortgage could be found, so that the payment could be endorsed thereon, he could and would raise the said payment in a very short time, if the said complainant would procure the said bond and mortgage, but he then insisted, and now, by his answer, insists that he could not, with safety, pay to the complainant the said sum of one thousand dollars, so long as the said bond and mortgage were outstanding, in the hands of some person unknown to the defendant, without some indemnity, more than a mere receipt, and without any satisfactory evidence that the said bond and mortgage had not been assigned, by the complainant, to some other person; that he was then willing, and told defendant he was willing to make the payment whenever he should be indemnified.
    The answer admits that on or about the lst of August, 1851, the said Hannah, wife of complainant, came to defendant’s house, and told him that she had left complainant, and had taken his papers. That defendant asked her what papers ? and she said she did not know ; that she had a note of one Ackerman, and complainant’s papers, done up in a package; that defendant immediately told her that the papers were of no use to her ; but defendant says he has no recollection that the said Hannah made any mention whatever of the said bond and mortgage j that defendant supposed she had taken the papers back to complainant, until a day or two afterwards. Complainant called upon defendant and notified him that the bond and mortgage were gone, at which time the said Hannah denied that she had the said bond and mortgage, or that she had taken them away. Defendant denies all knowledge as to who took the said bond and mortgage, or as to who has them.
    The defendant, by his answer, admits that, inasmuch as he was prevented from paying the said sum of one thousand dollars, by the request and solicitation of the complainant, and by his promise to notify defendant if he would need said payment, that it would be inequitable and unjust, and would be enabling the complainant to take an undue advantage of the defendant, for this court to decree a foreclosure and sale of the said mortgaged premises. The defendant further insists that, if he had not been prevented by the conduct of the complainant from preparing his said payment on the 1st of April, 1852, and if he had been ready to make such payment yet, that he was not bound to pay the one thousand dollars to complainant without the production of the said bond and mortgage, in order that the said payment might be credited and endorsed thereon, and that the defendant might have some satisfactory evidence that the said bond and mortgage had not been assigned by the complainant to some other person, or kept back, or concealed by him for some other purpose, or without some sufficient indemnity furnished to the defendant against the said bond and mortgage, and against all costs and damages.
    The defendant offers now to pay the sum due, under the order of the court, upon the production of the bond and mortgage, or upon the complainant’s executing to him a sufficient indemnity.
    To this answer, the complainant filed a replication on the 26th August, 1852, and proofs were taken.

      D. Thomson and J. Wilson, for complainant.

      Thomas N. McCarter, for defendants.
   The Chancellor.

It was unnecessary for the complainant to take issue upon the answer. The defence set up cannot deprive the complainant of the relief prayed for, nor is it of a character to throw the burthen of any costs upon the complainant. On the first of April, 1852, there was one thousand dollars due on the bond and mortgage. The first reason given by the defendant why he did not pay it, .is that, a year before, in a conversation between the parties, the complainant told the defendant that he did not wish him to pay any more of the principal when the same became due; that all the complainant wanted was his interest; and that, if the defendant paid the principal, he, the complainant, would be obliged to lend it out again, and he wished the defendant would keep the money and pay him interest therefor ; that the defendant replied that he did not like to have the matter remaining in that situation, because, if he relied upon the complainant, and failed to raise the money when it became due, the complainant might then call upon him for it, and put him to great inconvenience to raise the same ; whereupon complainant told defendant he need have no' fears on that account, because, if he, the complainant, should happen to stand in need of the money when it became due, he would give timely notice, so that the defendant would be able to raise the same. The defendant says that he relied upon this promise, and as the complainant gave him no notice, it is inequitable that the court should sustain these proceedings.

The promise amounts to nothing. It was without consideration, and was made in a manner, according to the defendant’s own statement, not to induce the defendant to rely upon it. Nor do I see that, under the circumstances, any moral delinquency can be fairly charged upon the complainant. When the money became due the case was different. He had lost the evidence of his debt. He then told the defendant he required payment, and he waited upon him for nearly two months. Was not this timely notice ?

Another ground of defence is that the defendant was not bound to pay the money unless the complainant produced the bond and endorsed the payment on it, or gave the defendant a sufficient indemnity against the bond and mortgage; and that the court ought not to decree against him until the indemnity is given.

If the defendant was entitled to any indemnity before paying the money, he can derive no benefit from that fact in this suit, unless he shows he tendered himself ready to make the payment, and demanded such indemnify. But 1 do not think he was entitled to any indemnity. There is no reason to doubt the complainant’s allegation, that the bond and mortgage had been surreptitiously taken out of his possession. The defendant did not doubt it. This he admits in his answer. Why was indemnity necessary ? The receipt of the complainant for the thousand dollars was good against all the world. It was as good a protection to the defendant as any security the complainant could give him. No matter what disposition the complainant had made, or might make, of the bond and mortgage, such receipt would always be available as so much paid upon them.

Nor do I see any propriety now in this court’s compelling the complainant to indemnify the defendant before making a final decree in the cause. The decree of this court will protect the defendant against any other claims upon the bond and mortgage.

The complainant is entitled to a reference, and to a final decree, with costs, upon the coming in of the master’s report, stating the account, &c.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Isaac Vandervere v. John C. Reading et al.
    1. The court will not lend a willing ear to applications to permit answers-to be amended, or to be taken from its files. ,
    2. Where it is some mere matter of form sought to be corrected — a mistake apparent upon the face of the paper, which can be corrected without prejudice to the complainant, the objection is not so serious, and yet in, such cases the court has always acted with commendable caution, never allowing it, except upon the condition that the defendant shall immediately, upon the corrections being made, reswear the answer; and it will never make such an order where the plaintiff can be at all prejudiced by il-
    3. The court have, under some circumstances, allowed an answer to be-amended in other respects than mere form. But no case can be found where a defendant has been permitted to take an answer absolutely off the file of the court and to substitute another in its stead.
    4. With regard to reforming answers, the practice now is, not to permit an amendment of the answer filed, but to allow the defendant, upon a special application, setting out particularly the amendment, to file a supplemental answer. The court has never gone further than to permit a defendant to correct or add some single fact which had been mis-stated or omitted, through mistake, fraud or accident.
    5. - Where the defendant comes before the court by petition, under oath, and states the particulars' in which he wishes to amend his answer, and the reason for asking the indulgence; and the petition shows that the answer was false from beginning to end, not in one or two facts, but in, every fact, without an exception material to the issue ; some of the most important of which he had sworn to two months previous. And the reason for asking the indulgence of the court is that the answer was drawn up by the solicitor of the complainant without the petitioner having anyone else to consult and advise with, and because the solicitor assured him. that it was all right, and that he did not know that the facts reflected upon his character, and he was assured'by his solicitor that they did not. The* court will not grant the prayer of the petition.
    Sydney Reading, one of the defendants, presented a petition, praying that he might be permitted to withdraw or amend, as the court should deem proper, the answer filed by him in this suit.
    A copy of the petition'was served upon the complainant* with notice of application. At the hearing it was offered, on behalf of the complainant, to read affidavits in answer to the petition. This was objected to as in violation of the rule requiring the affidavits to -be taken on notice, or copies served. The objection was sustained, and the application was heard upon the petition only.

      James Wilson, for petitioner, in support of the application, cited Anonymous, 1 P. W. 300; Southcot v. Watson, 3 Atk. 232; 2 Dank Ch. P. 981 ; Alpha v. Payman, 1 Dick. 33; Dagley v. Crump, 1 Dick. 35 ; Jennings v. Morton College, 8 Ves. 79; Wells v. Wood, 10 Ves. 401.

      G. A. Allen and J. F. Randolph, contra.

   The Chancellor.

On the 18th day of November, 1852, Isaac Vandervere, the complainant, obtained a judgment in the Supreme Court against Sydney Reading, one of the defendants, for about three hundred and twenty-eight dollars. Upon the judgment, execution was issued, and a levy made on certain real estate of the debtor. The real estate so levied on was encumbered to a large amount, and among other encumbrances was a mortgage of two hundred dollars, and another of one thousand five hundred and forty dollars, given by Sydney Reading to John G. Reading. On the 13th day of May, 1851, Sydney confessed a judgment in the Supreme Court to John G. Reading, for the sum of one thousand nine hundred and eleven dollars. On the 10th of May, 1852, Sydney confessed another judgment, to John G. Reading, in the Inferior Court of Common Pleas of the county of Hunterdon, for the sum of one thousand six hundred and thirteen dollars and fifty-eight cents. By virtue of these several confessed judgments, levies were made by executions on the same real estate levied on under the complainant’s judgment.

On the 7th of December, 1852, the complainant exhibited his bill of complaint in this court. The bill charges the several judgments to John G. Reading to have been confessed and to be kept on foot, for the fraudulent purpose of defeating the lawful creditors of Sydney Reading, and particularly specifies the fraudulent manner in which they were contrived, and by which they have been managed, for the purpose of accomplishing the alleged unlawful design of the parties thereto. •

The bill is sworn to in the usual form by the complainant; that the facts, matters and things set forth in the bill, so far as they related to his own acts, are true, and so far as they relate to the acts and deeds of other persons, he believes them to be true.

To this bill is annexed the affidavit of Sidney Reading, one of the defendants, in which he swears specifically to the truth of the allegations of the fraud charged in the bill, and to several particulars constituting the fraud, and stating the same minutely and at'length. This affidavit was sworn to on the second day of December, 1852, and the bill was filed on the seventh. On filing the bill, an injunction was issued to prevent James G. Reading proceeding under his judgments and executions.

On the 6th of January following, John G. Reading filed his answer, and on the 3d of February Sydney Reading filed his answer to the bill.

Sydney Reading answers the bill, very nearly, paragraph by paragraph. He admits every fact and circumstance, enlarging upon and explaining them with great particularity, which go to establish the frauds alleged in the bill. After the coming in of the answer, a motion was made to dissolve the injunction, which was refused. The cause was set down for hearing at the last term of this court, after which Sydney Reading filed his petition, under oath, praying for leave to take his answer from the file, or that he may amend the same, as the court shall deem most proper, and also that he may explain his affidavit annexed to the bill.

Let us examine as to what has been the practice of the court, and what is its policy, as to - permitting answers to be amended, or to be taken from its file.

It is manifest, upon the slightest consideration, that as a matter of policy the court ought not to lend a willing ear to such applications. Where it is some mere matter of form sought to be corrected — a mistake apparent upon the face of the paper, which can be corrected without prejudice to the complainant, the objection to permitting the answer to be taken from the file in order to correct such mistake, is not so serious; and yet in such cases, the court has always acted with commendable caution, never allowing it, except upon the condition that the defendant shall, immediately upon the correction being made, re-swear the answer; and it will never make such an order where the plaintiff can be at all prejudiced by it. 2 Dan. Ch. P. 344. Where an answer is put in, so informal in its frame or form, or in the taking or filing it, that the complainant may treat it as a nullity, or take advantage of the irregularity by moving to take it off the file, yet in these cases even the court will not permit the defendant to take the answer off the file, except for the purpose of correcting the mistake, and upon the condition above referred to.

As will be seen, upon reference to the authorities, the court have, under some circumstances, allowed an answer to be amended in other respects than mere form. Burney v. Chambers, Bumb. 248 ; Countess of Gainsborough v. Gifford, 2 P. Wms. 424; Giffths v. Wood, Amb. 62; Patterson v. Slaughter, Amb. 292; Wells v. Wood, 10 Ves. 401; Chute v. Lady Dacre, 1 Eq. Ca., Ab. 29; Alpha v. Payman, 1 Dick. 33; Dagley v. Crump, 1 Dick. 35. But no case can be found where a defendant has been permitted to take an answer absolutely off the file of the court and to substitute another in its stead. With regard to reforming answers, the practice now is, and it is the better practice, not to permit an amendment of the answer filed, but to allow the defendant, upon a special application setting out particularly the amendment, to file a supplemental answer. Dolder v. Bank of England, 10 Ves. 284; Jennings v. Morton Coll, 8 Ves. 79; Wells v. Wood, 10 Ves. 401; Jackson v. Parish, 1 Sim. 505; Strange v. Collins, 2 V. and B. 163; Taylor v. Obee, S. Pri. 83; Ridley v. Obee, Wight 32; Tidswell v. Bowyer, 7 Sim. 64; Court v. Barr, 2 Mer. 57; Nail v. Punter, 4 Sim. 474; Curling v. Marquis of Townshend, 19 Ves. 628. The practice, of course, does not apply to correcting of matters purely of form. White v. Godbold, 1 Mad. 269; Peacock v. Duke of Bedford, 1 V. and B. 186; Woodyer v. Crumpton, 1 Fowl. Ex. Pr. 379; Ellis v. Saul, 1 Ans. 332; Lord Moncarter v. Braithwate, 1 Younge 382.

There are; together with the cases cited, upwards of fifty authorities upon the matter of reforming answers; and yet it will be found that the court has never been willing to go further than, to permit a defendant to correct or add some single fact which had been mis-stated or omitted through mistake, fraud or accident. In a note to Livesey v. Wilson, 1 Ves. and Beam. 157, there is a summary of the grounds, with the authorities, upon which the court has extended this indulgence to defendants. First, in small and immaterial matters. Second, where a mistake had crept into the engrossment. Third, where new matter has been discovered since the original answer was put in. Fourth, in cases of surprise. Fifth, in mistakes of names. But where the defendant mistook, first, the law; second, where the defendant had unintentionally perjured himself, and an indictment was suspended over him; and third, where, from the circumstance, that at the time of the answer put in, the defendant had not set forth his defence, from an inability to state it with precision, the court has refused him the indulgence of amending.

In the case of Livesey v. Wilson, the defendant had misstated a fact in reference to his possession of the property in question. Oh his affidavit, setting forth that the inaccuracy arose from his not before stating the fact to his solicitor ; not conceiving it at all material to be introduced into his answer; and that it was not omitted by design or intention in any respect, but arose purely through ignorance. The Lord Chancellor said: “lam unwilling to make such a precedent, and consider this motion of such importance that I will not grant it, unless the defendant will tell me, on his oath, that, when he swore to his original answer, he meant to swear in the sense which he now desires to be at liberty to swear to; if he did not, I will not suffer him to avail himself of the fact as he now represents it.-” The court requires, in making the application, the defendant should state specifically what he wishes to put on the record, in order that it may judge how far his application is reasonable, (Curling v. Marquis of Townshend, 19 Ves. 628,) and when it is new matter, sufficient reason must appear for not having it inserted in the original answer, (Tennant v. Wilsmore, 2 Ans. 362,) and the defendant must confine himself strictly to the correction of the mistake sworn to; (Strange v. Collins, 2 V. and B. 163—167,) and, finally, the defendant must make such a case that it shall appear to be due to general justice, to permit the case already on record to be altered. Wells v. Wood, 10 Ves. 40.

All the English authorities will be found cited in 2 D. C. P. 199. The American authorities on the point are few. The views of Justice Stag, in the case of Smith v. Balvcock et al., 3 Sumner 585, fully coincide with those expressed in the cases referred to. He remarks : It seems to me that, before any court of equity should allow such amended answers, it should be perfectly satisfied that the reasons assigned for the application are cogent and satisfactory ; that the mistakes to be corrected, or the facts to be added, are made highly probable, if not certain; that they are material to the merits of the case in controversy; that the party has not been guilty of gross negligence, and that the mistakes have been ascertained, and the new facts have come to the knowledge of the party, since the original answer was put in and sworn to.”

In the present case, the defendant comes before the court by petition, under oath, and states the particulars in which he wishes to amend his answer, and the reasons for asking the indulgence. The bill had charged that two judgments confessed by him were fraudulent. It set out a number of facts and circumstances going to establish the fraud. The answer of the petitioner admits the fraud, not in a general way, but in . a most minute manner, and even to detailing circumstances, between himself and his co-defendant, going to establish the fraud. The petition shows that the answer was false from beginning to end, not in one or two facts, but in every fact, without an exception, material to the question in issue. Some of the most important of these facts are the same he had sworn to two months previous, and placed upon the file of this court, in the form of 'an affidavit annexed to the bill. His reasons for asking the indulgence of the court is, that the answer was drawn up by the solicitor of the complainant, without the petitioner’s having any one else to consult and advise with, and because the solicitor assured him that it was all right. How this can justify, or how excuse the petitioner in swearing to a state of facts one month, and in a most deliberate manner, after they are incorporated in an answer, re-affirming them with more particularity the next month, I cannot conceive. He does not pretend that the answer was not read to him, or that he did not understand every fact as it is set forth in the answer; but he says that he did not know these facts reflected upon his character, and that he was assured by the solicitor that they did not. It amounts to this. He swore to the facts according to advice of counsel, and not according to his own knowledge of them. It is to be feared that this is too often the case. It is not so common to acknowledge it. In a case like this, it required no reference to authorities to show that the court ought not to grant the prayer of the petition. I did not have the least doubt about the question when it was presented ; and, therefore, it was without any reluctance that I annulled the application, on behalf of the complainant, to read affidavits, in answer to the allegations contained in the petition. Having the case before me, I have taken the opportunity to examine, as to the practice of the court, in permitting amendments to pleadings. I have been very much struck with the great carelessness and negligence of very many answers that I have been called upon to examine, and there is a looseness prevailing in this court on the draft of pleadings requiring to be sworn to, which ought not longer to be permitted, and which must, in some way, be discountenanced by the court.

The rules in reference to amendment of pleadings which have been put in under oath, may, at first view, appear toó

stringent; but a little reflection will satisfy us of their propriety. It does not require a knowledge of the law, or of a parties’ rights, to guard him against swearing to facts which are untrue. The facility with which affidavits are procured, and the readiness with which a party will swear to a statement of facts drawn up by counsel, are crying evils. How frequently does it happen that a complainant, in order to obtain an injunction, is guilty of an omission, which changes, altogether, the equity of the case, and which, he persuades himself, is less iniquitous and immoral than the actual statement of a fact which is untrue. Such a morality this court ought not to countenance; and I am sure that counsel who practice in this court would be unwilling to see it relaxing any of those wholesome rules, the object of which is to secure prudence and care in assuming the responsibility of an oath.

The prayer of the petition is denied, with costs.

Cited in Huffman v. Hummer, 2 C. E. Gr. 270, 271; Burgin v. Giberson, 8 C. E. Gr. 403; Marsh v. Mitchell, 11 C. E. Gr. 500.


text:
    Jacob Hinchman v. Ellen Stiles et al.
    1. A widow is entitled to her dower in an equity of redemption, and the court will protect her interest.
    2. So where the sheriff sold under a decree of the court. The surplus, after satisfying the mortgages, represents the equity of redemption, and the widow of the mortgagor is entitled to her dower in it.
    On the 5th of March, 1849, David Stiles executed a mortgage to B. F. Lippineott, on lot number one, to secure the payment of one hundred and forty-four dollars.
    Subsequent to the execution of this mortgage, David Stiles intermarried with the defendant, Ellen Stiles.
    Subsequent to the marriage, to wit, on the 24th of April, 1849, David Stiles executed a mortgage to Rebecca Slim, on lot number two, to secure a debt of four hundred dollars.
    On the 1st of April, 1850, David Stiles and Ellen, his wife, executed a mortgage on lot number one and lot number two, to secure the payment of one thousand dollars to Jacob Hinchman, the complainant.
    On this last mortgage the complainant filed his bill.
    On the 14th of February, 1853, the master made a report, by which it appeared that, on that day, there was due on the Lippineott mortgage, one hundred and fifty-two dollars and thirteen cents; Rebecca Slim’s mortgage, four hundred and nineteen dollars and forty cents; complainant’s mortgage, one thousand and fifty-two dollars and thirty-four cents.
    The sheriff sold under the decree of the court made at the last term of this court. See Hinchman v. Stiles et al., 1 Stn. 361. By the sheriff’s certificate, it appears that lot number one sold for one thousand nine hundred and ten dollars, and that, after paying the first and third mortgages, there is a surplus of five hundred and fifteen dollars and seventy-four cents. Lot number two sold for six hundred and five dollars.

      The widow applies to the court, and asks that her dower-right in the surplus may be protected.

      Mr. Dudley, for the widow.

      Mr. Teneyck, for judgment creditors.
   The Chancellor.

The lot embraced in the first and third mortgages brought sufficient to pay off those encumbrances, leaving a surplus of five hundred and fifteen dollars and seventy-four cents. The second mortgage did not embrace this lot, and of course that mortgagee can have no claim upon this surplus. The question as to its disposition is between the widow of the mortgagor and the judgment creditors. This surplus represents the value of the equity of redemption. When this case was before the court, at the last term, it was decided that the widow was entitled to her dower in the equity of redemption, and that the court would protect her interest.

It is now insisted that the widow is entitled to the whole of the five hundred and fifteen dollars and seventy-four cents. This cannot be so. She is entitled to nothing more than her dower in the equity of redemption. The sum represents that equity of redemption. She is entitled to the interest on one-third of it, and no more. Suppose the sheriff had sold two-thirds of the lot, and paid off the encumbrance * it is very clear that the widow would not have been entitled to the whole of the remaining one-third of the land as her dower. She would have been entitled to her dower — that is, her thirds — in the land that remained unsold.

The widow’s costs .in this suit must be paid out o'f the surplus. Of the residue, two-thirds must be paid to the judgment creditors, according to their respective priority. One-third must be invested, under the direction of the court. The widow will be entitled to the interest during her lifetime, and at her death the judgment creditors will be entitled to the principal.

As to the proceeds of lot number two, two-thirds must be appropriated to pay the second mortgagee her costs, and the amount due on her mortgage. One-third must be invested under the direction of the court. The widow will be entitled to the interest during her life. At her death the principal will go, first to make up any deficiency the second mortgagee may be entitled to, and the residue will belong to the judgment creditors.

Cited in Pierson v. Hitchner, 10 C. E. Gr. 134.


text:
    John Coryell and others, Executors of John Holcomb, deceased, v. The President and Managers of the New Hope Delaware Bridge Company.
    1. The object of the second section of the “Act to prevent frauds by incorporated companies,” was to prevent companies actually insolvent, or whose embarrassments were such as must inevitably lead to insolvency, from doing what it is lawful for an individual debtor to do — make a preference in favor of any creditor. It is the duty of the court to give such a construction and application to the act as to effect the object the legislature had in view.
    2. So, where it appeared that several days prior to the execution of a mortgage, the company had refused to redeem its bills, and that the day after its execution the company was hopelessly insolvent. And that after the first act of insolvency, a portion of the directors had been called together for the very purpose of securing the debt due to the particular creditor, in contemplation of the insolvency of the company. The mortgage was held to be utterly null and void as against the creditors, and in direct violation of the letter of the act.
    3. A company cannot, on the eve of insolvency, transfer its property to secure certain favorite creditors, and they claim the benefit of the proviso of the second section of the act. This proviso was intended to protect a stranger, who, in good faith, and in total ignorance ol' the situation of the company, makes a purchase of its property, and pays down the consideration money.
    4. Where the charter of a company required five managers to constitute a quorum, and there were but four present when a resolution was passed, authorizing the execution of a mortgage, the mortgage is null and void, from the fact that it never received the sanction of the board of directors.
    5. By the seventeenth section of the act it is enacted, “ That in case any such company, or person or persons whatever, shall think themselves or himself aggrieved by the proceedings or determination of the said receiver or receivers, or trustees in the discharge of their duty, it shall be lawful for the party aggrieved to appeal to the Chancellor, who shall, in a summary way, hear and determine the matter complained of, and make such order touching the same, as shall be equitable and just.” The Chancellor may ask the aid of a jury under the general power of the court. An issue may be directed if any matter of fact shall render the intervention of a jury necessary. But the effect of the verdict would be very different from that of a jury under the thirteenth section of the act to prevent frauds hy incorporated companies. Under the last act the verdict would be conclusive, unless set aside by an order of the Supreme Court. If ordered by the Chancellor, under the general power of the court, it would be to inform his conscience, and he would not be bound to respect it unless his judgment approved it.
    6. But in such cases, the Chancellor will not ask the intervention of a jury, unless the case is made a very doubtful one by the evidence.

      John Holcomb, as a mortgage creditor of the defendants, filed his bill against them, under the act entitled, “An act to prevent frauds by incorporated companies.” Statutes of N. J. 129. Such proceedings were thereupon had that receivers were appointed. In adjudicating upon the claims of the creditors, the receivers determined that the complainants’ mortgage was not entitled to priority. Upon the application of T. J. Coleman, as a creditor, the receivers issued a certificate to him for the sum of twenty-three thousand three hundred and seventy-one dollars. From these proceedings, and determination of the receivers on these several claims, the complainants appealed to the Chancellor.

      W. Halsted and O. S. Halsted, for appellants.

      J. W. Scudder, for Coleman and others, creditors.
   The Chancellor.

The receivers, by their report made to this court, bearing date the 25th day of April, 1853, among other things, reported “ that the mortgage to John Holcomb, bearing date the 28th day of December, 1847, to secure the payment of fourteen thousand dollars, is not entitled to priority over other creditors; that the same was made and given after the defendants had stopped payment, or in immediate anticipation of insolvency.” They further reported that they issued a certificate to T. J. Coleman, upon a claim presented by him, for the sum of twenty-three thousand three hundred and seventy-one dollars. By virtue of the 17th section of the act entitled, “ An act to prevent frauds by incorporated companies,” the complainants have appealed from these determinations of the receivers.

First, as to the Holcomb mortgage. By the second section of the act referred to, it is enacted “ that whenever any incorporated company shall become insolvent, or shall suspend the ordinary business of the said company, for want of funds to carry on the same, it shall not be lawful for the directors or managers of the said company, or for any officer or agent of the said company, to sell, convey, assign or transfer any of the estate, effects, choses in action, goods, chattels, rights or credits, lands or tenements of the said company ; nor shall it be lawful to make any such sale, conveyance, or assignment, or transfer, in contemplation of the insolvency of any such company, and every such sale, conveyance, assignment or transfer shall be utterly null and void as against creditors.”

The object of this section of the act was to prevent companies, actually insolvent, or whose embarrassments were such as must inevitably lead to insolvency, from doing what it is lawful for an individual debtor to do — make a preference in favor of any one or more of its creditors. It is the duty of the court, therefore, to give such a construction and application to the act, as to effect the object the legislature had in view.

The money, which' this mortgage was executed to secure, was loaned to the company in 1845. ISTo evidence of the debt was given until the execution of the mortgage, on the 29th of December, 1847. Several days prior to this, the company had refused to redeem its bills through its usual agents in the city of Yew York.

It was on a bill filed by this mortgagee that the company was declared insolvent. In his bill he alleges that on the 30th day of December, the day after the mortgage was executed, the company was hopelessly insolvent; .and it is proved that after the act of insolvency committed in the city of Yew York, a portion of the directors were called together, in contemplation of the insolvency of the company, for the very purpose of securing the debt due to this creditor. This mortgage was executed in direct violation of the letter of the act, and is, therefore, utterly null and void as against creditors. If the mortgagee can come in as a creditor of the company, he cannot be admitted as a morlgage creditor; he must come in under his original debt, and in order to do that, must prove it.

But it was argued that' the mortgagee is entitled to the benefit of the proviso of the second section of the act, which is, that in case of a bona fide purchase, made for a valuable consideration, before the said company shall have actually suspended the ordinary business of the said company as aforesaid, by any person having no knowledge, information or notice of the insolvency of the said company, or of the sale being made in contemplation of the insolvency of the said company, such purchase shall not be invalidated or impeached.”

Admitting that the refusal of the company to redeem its bills in the city of New York was not an actual suspension of the ordinary business of the company, yet the creditor is not entitled to the benefit of the proviso for several reasons.

He was not such a bona fide purchaser for a valuable consideration as the act contemplates. A company cannot, on the eve of insolvency, transfer its property to secure certain favorite creditors, and they claim the benefit of this proviso on the ground that they had no knowledge, information or notice of the insolvency of the company. If they could, the object of the act would be defeated. This proviso was intended to protect a stranger, who, in good faith, and in total ignorance of the situation of the company, makes a purchase of its property and pays down the consideration money. But all precedent creditors of the company must stand on the same footing. Such was the design of the act.

Nor did Mr. Holcomb stand in the position of a creditor having no notice of the insolvency of the company. He loaned this money to the bank, through Mr. Coryell, one of its directors. Mr. Coryell acted as his agent through the whole transaction an.d while acting as such agent, it was through his instrumentality that the directors were called together to sanction the execution, of the mortgage. Mr. Coryell attended to the execution of the mortgage, and it was delivered to him as the agent of Mr. Holcomb. Notice to Coryell was notice to Holcomb.

But again, this mortgage is null and void from the fact that it never received the sanction of the board of directors or managers. By the charter of the company five managers constitute a quorum. There were only four present when the resolution was passed, authorizing the mortgage, and there is no evidence that any other manager gave his sanction, either formally or otherwise, at any other time.

The counsel further relied upon an agreement alleged to have been made at the time the loan was originally advanced, that it should be secured by a mortgage. If such an agreement would help the complainants, yet the proof in the case falls short of establishing such an agreement.

The report of the receivers, in respect to this mortgage, is erroneous in form. They should have declared the mortgage null and void, and allowed the creditor a certificate for his original debt. I presume they have done this in substance. Let this matter, however, be set right in drawing up the order on this appeal.

The other matter of appeal is as to the certificate which the receivers allowed to T. J. Coleman for twenty-three thousand three hundred and seventy-one dollars.

Coleman presented to the receivers the bank bills of the company, of different denominations, amounting, in all, to twenty-three thousand three hundred and seventy-one dollars, together with his affidavit that he was the bona fide owner of the bills. On account of some supposed connection that Coleman had had with the agents of the bank in redeeming the bills, there was a suspicion that he did not come by the bills bona fide, and, accordingly, there was an investigation had before the receivers. The complainants, as creditors to a large amount, being deeply interested, appeared before the receivers, by their counsel, in opposition to the claim. The bills being genuine, their production was prima fade evidence that the bank was indebted, to the amount of such bills, to the holder. It was perfectly proper that the receivers should impose terms on the holders of bills, that their presentation should be accompanied with an affidavit that they were received in a bona fide manner, and that the amount was justly due and owing. Coleman complied with the terms, and he was entitled to receive a certificate, unless his rightful claim to the bills could be impeached. This was attempted to be done, by the examination of Coleman himself as a witness, and of several other individuals.

Upon carefully examining the evidence, there is sométhing to excite the suspicion that all of these bills did not come bona fide i’nto the hands of Coleman, and I was, at first, disposed to take the verdict of a jury on the question. Further reflection has satisfied me that I would not be justified in putting this expense on the creditors, and that it would not be dealing fairly with Coleman, under all the circumstances. Under the thirteenth section of the act, Coleman, when he laid his claim before the receivers, had a right to demand a trial by jury, and, in like manner, the receivers might have required that his claim should be submitted to a jury. It does not appear that the complainants, or any other of the creditors, requested the receivers to submit the claim to a jury. It is true the receivers would not have been bound to comply with the request, but, in reference to a claim of the magnitude of this one, and about which there was so much dispute, the receivers would have listened with respect to any suggestion of the kind from the other creditors. By common consent, the investigation took place before the receivers. Coleman himself was called upon and underwent a long, searching examination. Several witnesses were examined on behalf of Coleman, and several in opposition to his claim. Counsel appeared on both sides. The receivers unanimously decided in favor of issuing the certificate. There was a suggestion as to the power of the Chancellor to ask the aid of a jury. By the seventeenth section of the act, it is enacted: That in case any such company, or person or persons whatever, shall think themselves or himself aggrieved by the proceedings or determination of the said receiver or receivers, or trustees, in the discharge of their duty, it shall be lawful for the party aggrieved to appeal to the Chancellor, who shall, in a summary way, hear and determine the matter complained of, and make such order touching the same as shall be equitable and just.” This language would seem to imply that the Chancellor must himself decide the matter. And there is some propriety in this ; because it is an appeal to the Chancellor ; and because the parties before the court had the option of selecting a jury and had declined doing so. In the same seventeenth section, however, and in connection with this right of appeal, the Chancellor, in the execution of the powers and authority under the act, is vested with all the jurisdiction and power which is lawful for the Court of Chancery to exercise in suits depending in that court, and to proceed according to the rules, principles, and practice of that court, excepting when otherwise directed by the act. By the forty-fourth section of the act regulating the practice in the Court of Chancery, (L. of N. J. 912,) it is enacted: “ That, if any matter of fact shall render the intervention of a jury necessary, then the Court of Chancery is hereby authorised to direct an issue for the trial of the same in the Supreme Court.” The effect of the verdict, by virtue of the general power of the court, would be very different from that of a jury under the thirteenth section of the act to prevent frauds by incorporated companies. Under the last act, the verdict would be conclusive, unless sot aside by an order of the Supreme Court. If ordered by the Chancellor, under the general power of the court, it would be to inform his conscience, and ho would not be bound to respect it, unless his judgment approved it. I think, therefore, that there is nothing in the act to prevent the Chancellor from directing an issue whenever, in his opinion, any matter of fact shall render the intervention of a jury necessary.

But I do not think that, in a case coming before me as this does, I should ask the intervention of a jury, unless the ease is made a very doubtful one by the evidence. I do not think this is so. At most, there is some suspicion thrown upon the claim, but nothing more. The proof was with those who opposed the claim, to show it ought not to be allowed; I am not dissatisfied with the conclusion the receivers arrived at. I do no think there was any evidence before them that would have justified them in rejecting the claim.

It is unnecessary for me to determine whether the agreement made between the company and the Columbus Insurance Company was illegal. Admitting it to have been so, still the notes issued under it were good in the hands of bona fide holders. The question was, whether Coleman was a bona fide holder ? He is to be considered such, until the contrary is proved.

The report of the receivers is affirmed, with the modifica-tion referred to as to that part of it relating to the Holcomb mortgage. Let the costs of the appeal come out of the general fund.


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    Charles E. Young et al. v. Louis Frier and Abraham Duttenhoeffer, partners, &c., et al.
    1. “If a creditor seeks the aid of this court against the real estate of his debtor, he must show a judgment at law creating a lien on such estáte; and if he seeks aid in regard to the personal estate, he must show an execution giving him a legal preference or lien on the goods and chattels, which he has pursued to every available extent at law, before he can resort to equity for relief.”
    2. The exception to this rule recognized in Blackwell et al. v. Rankin & Lee, 3 Hal. G. R. 153, that this court will entertain a bill, by a creditor at large of a firm, to restrain an execution creditor of an individual member of the firm from enforcing his legal remedy against the partnership property, is not sustained by the authorities. There can be no such exception to the rule. When the propriety of such an exception can be shown, it will reveal the injustice of the rule itself.
    This was an application for an injunction, on bill, answer and affidavits.

      Mr. F. T. Frelinghuysen and Mr. Bradley moved for an injunction upon the bill filed and accompanying affidavits, and cited Story on Partnership, § 264; Blackwell v. Rankin & Lee, 2 Hal. Ch. R. 160; Moody v. A. & H. Payne, 2 J. C. R. 548 ; Whitmore v. Roxborough, 2 Young and Collyer, 13-21, E. C. R.; Story’s Eg. P., § 99.

      Mr. Zabriskie read the answers of the defendants, and opposed the motion, and cited Mellville v. Brown, 1 Harr. 364; Edgar v. Clevenger, 1 G. C. R. 258; Story on P., § 264; Ketchum v. Durkee, Hoff. C. R. 538 ; Story’s Eq., §§ 677-679, 1253.
   The Chancellor.

The complainants who have exhibited this bill are creditors at large of the firm of Erier & Co. The defendants are the individual members of the firm. Isaac Duttenhoeffer, who is charged with having an interest in the partnership — and several judgment and execution creditors, who have levied upon all the personal property belonging to tbe firm. The bill charges the judgments to be fraudulent. It prays that the sheriff may be enjoined from selling under the executions; that the several judgments may be decreed void; that the partners may deliver up all the assets of the firm, in order that the same may be applied, under the direction of this court, to the payment of the several debts due the complainants, and the claims of such other bona fide creditors of the firm as may apply to the court to be made parties to this bill, and contribute to the expenses of this suit; that an account may be taken and a receiver be appointed.

The defendants have, by their several answers, made the discovery which the bill calls for. But they insist that the complainants have no right, by a bill in this court, to question the judgments nor the disposition of the partnership property, because, as creditors at large, they have no standing in this court. The objection is well taken. The principle has always been recognized by the courts, both of law and equity, in this state.

In Mellville v. Brown, 1 Harr. Rep. 364; and in Edgar v. Clevenger, 1 G. C. R. 258, this doctrine was recognized and acted upon as laid down by Chancellor Kent in 4 J. C. R. 671. “ If the creditor seeks the aid of this court against the real estate of his debtor, he must show a judgment at law creating a lien on such estate; and if he seeks aid in regard to the personal estate, he must show an- execution giving him a legal preference or lien on the goods and chattels, which he has pursued to every available extent at law, before he can resort to equity for relief.”

The counsel for the defendants admitted the rule as a general one, but insisted that they had brought themselves within an exception recognized in Blackwell et al. v. Rankin & Lee, in 3 Hal. C. R. 153. Andrew Rankin, of the firm of Rankin &. Lee, had confessed a judgment to Elias Plum for his individual debt; and the other partner, George H. Lee, had confessed' a judgment for his individual debt to Caroline Heyden. The case, as reported, states: “ In this state of things, I. M. B., E. Á. W. and W. C., partners in trade, creditors of the firm of Rankin & Lee, who had commenced suit, but had not obtained judgment for their demand, exhibited their bill against Andrew Rankin and others, charging combination and confederacy to defraud the complainants and others, the bona fide creditors of the said firm of Rankin & Lee, and to take into their hands the whole of the property of the said firm; and that the .said judgments were confessed fraudulently, and praying that they may be decreed to be void, &c.; and praying an injunction restraining the sale.” The injunction was allowed; and on a motion made, without answer, to dissolve the injunction, it was refused. In that case, the Chancellor did decide that the creditors at large of a partnership, might file their bill in this court, and restrain an execution creditor of one of the members of the firm, from applying the partnership assets to the payment of his separate, debt. He rests his decision upon what is said by Mr. Justice Story, in commenting upon the case of Moody v. A. and H. Payne, 2 John. Ch. Rep. 588, in 1 Story’s Eq. 678; 2 Story’s Eq., § 1253, and upon the case of Ketchum v. Durkee et al., 1 Barb. C. R. 480; upon 1 Mad. Ch. 136, and Waters v. Taylor, 2 Ves. and B. 299.

I have examined, with great care, these references and some thirty others bearing upon the point in question. According to the best judgment I have been able to form in examining these authorities, not one of them sustains the exception to the rule contended for. It is with great diffidence I dissent from a decision of my predecessor, who decided that case, and I should not feel at liberty to do so but for the fact of the great number and uniformity of the decisions in opposition to the conclusion he reached.

Let us examine the authorities relied on by the Chancellor in Blackwell et al. v. Rankin & Lee, and see whether they have not been misapprehended. They do not sustain the doctrine contended for, that this court will entertain a bill by a creditor at large of a firm, to restrain an execution creditor of an individual member of the firm from enforcing his legal remedy against the partnership property

In Moody v. A. and H. Payne, 2 John. Chan. Rep. 548, one of the partners confessed a judgment for his separate debt, and by execution had seized upon the partnership property. The bill was filed, not by a creditor at large, but by one of the partners for a partnership account. The question — whether a general creditor could maintain the bill— was in no way involved. There was no difficulty as' to the complainant’s standing in the court. As a late partner he had an interest in the property as part owner; he had a lien on the goods, such as a general creditor has not. The Chancellor refused to enjoin the creditors upon other principles disclosed in his opinion. Justice Story, in 1 Story’s Eq., § 678, (it is said by the Chancellor, in 3 H. C. Rep. 153,) refers to this decision, and dissents from it. But from what does he dissent ? Chancellor Kent had decided that one of the partners could not restrain' an execution creditor of an individual member of the firm from selling the partnership property to pay his individual debt. From that Justice Story dissented. But while Justice Story says one of the partners may maintain such a bill, he no where intimates that a general creditor can do it.

It is true, as is stated in 2 Story’s Eq., § 1253, that a long series of authorities has established this equity of the joint creditors to be worked out through the medium of the partners ; that is to say, the partners have a right, inter se, to have the partnership property first applied to the discharge of the partnership debts, and no partner has a right except to his own share of the residue, and' the joint creditors are, in case of insolvency, substituted in equity to the rights of the partners, as being the ultimate cestui que trust of the fund to the extent of the joint debts. That the creditors, indeed, have no lien, but they have something approaching to a lien; that is, they have a right to sue at law, and- by judgment and execution to obtain possession of the property ; and in equity they have a right to follow it as a trust into the possession of all persons who have not a superior title. But where, in this comment of the learned author, do we find his authority for saying that a creditor at large may follow the joint property, or has the right to appeal to the aid of a Court of Chancery to have his equities adjusted. Of the numerous authorities referred to by Justice Story, to sustain the propositions he lays down, not one of them was a case where a creditor at large had asserted his rights. It appears to me very plain that the author never meant to advance the proposition he is quoted as maintaining.

In Waters v. Taylor, 2 Ves. & Beam. 299, the bill was filed by one partner against his co-partner for a dissolution of the partnership, on account, &c. The Lord Chancellor gives no countenance to the principle contended for. In Mad. C. 136, the author says : If an execution be issued on account of the separate debt of one partner against the partnership effects, a bill may be filed by the solvent partner, and for an injunction in the meantime.”

In Ketchum et al. v. Durkee et al., 1 Barb. Ch. R. 480, the Chancellor says : Upon the dissolution of a co-partnership by the death or bankruptcy of one or both of the co-partners, the creditors of the firm obtain a quasi lien upon its property and effects, which the Court of Chancery may work out for them, in administering the equities between the co-partners or their representatives.” But did the court attempt to work out for the creditors in that ease their quasi lien, upon a bill filed by a creditor at large ? The bill was filed by one of the partners, and thus the court obtained its jurisdiction.

But how can such an exception as is contended for here, be maintained with any propriety?

The rule is admitted to be well settled that a creditor at large cannot, by bill in this court, question the disposition of his debtor’s property, or interfere with a judgment creditor, even if the debtor and creditor are practicing the grossest fraud in disposing of the debtor’s property. In Wiggins & Boerum v. Armstrong et al., 2 John. Ch. Rep. 144, it is said : “ The reason of the rule seems to be that, until the creditor has established his title, he has no right to interfere, and it would lead to an unnecessary, and perhaps an oppressive interruption of the exercise of the debtor’s rights. Unless he has a certain claim upon the property of the debtor, he has no concern with his frauds.”

If a creditor at large is not permitted to ask the aid of this court to restrain a judgment creditor of his debtor from disposing of his property when he charges the grossest fraud, and combination to cheat him, what propriety is there in giving a creditor at large a standing here, on the ground that the execution creditor is seizing upon partnership property to pay an individual debt. Is it not much more reasonable to lend him the aid of this court in the former case, than in the latter ? There certainly is no propriety in saying the arm of the court is too short to aid you in detecting fraud, but can aid you, if you can show that the conduct of the persons whose doings you impeach, may. work injustice.

There can be no such exception to the rule. When the propriety of such an exception can be shown, it will reveal the injustice of the rule itself. A great deal was said on the argument, about the quasi lien of the creditors of a partnership on its property, as against creditors of individual members of the partnership, and in the case of Blackwell, the Chancellor says it is this quasi lien which gives this court jurisdiction for the purpose of protecting the creditors of the partnership.' But is any lien which such creditors as have, against creditors of individual members of the partnership, any more sacred, or better entitled to the protection of the court, than the lien or claim, or whatever you may please to call it, which any creditor has on the property of his debtor, as against a wrong-doer ?

This bill cannot be maintained. The complainants are only creditors at large of the firm. They have no lien on the property in question. The injunction must be refused, and the bill dismissed, with costs.

Cited in Robert v. Hodges & Fuller, 1 C. E. Gr. 303; Mittnight v. Smith, 2 C. E. Gr. 262; Holdrege y. Gwynne, 3 C. E. Gr. 31; Tantum v. Green, 6 C. E. Gr. 365; Stewart v. Walters, 9 Vr. 277; Davis v Dean, 11 C. E. Gr. 436.


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    The Trenton Water Power Company v. Robert Chambers.
    One who had waived his right to have commissioners called, and permitted a corporation to take possession of his land without first making compensation, or pursuing the mode prescribed by the act to ascertain it, and permitted them to change the character of the property, expend large sums of money upon it, and constitute it a part of an extensive and valuable public improvement, cannot recover the possession of the land upon paying for the improvements. The only relief the court will afford, is to give him compensation for his land, and remuneration for all damages ; and this may he ascertained either by reference to a master or the intervention of a jury.

      C. S. Green and W. L. Dayton, for complainants.

      M. Beasley, for defendant.
   The Chancellor.

“The Trenton Delaware Falls Company ” was incorporated on the 16th of February, 1831. The company was authorized to erect a wing dam on the Delaware river, between the mouth of the Assanpink and the head of Wells’ Falls, and a raceway in, along, and near the bank of said river, in the neighborhood of Trenton, and to construct aud make all such embankments, reservoirs, aqueducts, weirs, gates, and other works, as the managers of said company might deem convenient and necessary for the purposes aforesaid. The act prescribes the mode by which the company is to acquire the title to the land necessary for the works. Robert Chambers, the defendant, was the owner of a tract of land south of the Assanpink, and his brother, Reeder, of a tract in the same vicinity. The route of the main raceway, branches, and improvements have been completed at a very heavy cost. The works are of great public importance. A large number of factories and mills have been erected, depending for their maintenance upon this public improvement. The route of the raceway was located according to law, and occupied a portion of the said lands of the defendant and his brother. In the construction of the works over the land of the.defendant, a deviation was made in the route filed, by extending the east line of the raceway in such a manner as to make a reservoir upon the defendant’s land.

In the year 1840, “The Trenton Delaware Falls Company ” were decreed by the Court of Chancery to be insolvent, and the property and franchises of the company were sold by receivers appointed for the purpose. By virtue of an act of the legislature subsequently passed, the purchasers were authorized to hold the real estate, works, and franchises so purchased, in the same manner that the original stockholders held the same; and, by the said act, it was also enacted that the said company should thereafter be known as “ The Trenton Water Power Company.” Under this name the company have since enjoyed the works, and have expended large sums of money in their maintenance and further improvement. Since then the defendant has commenced two suits against the complainants, each of them in a plea of trespass on the case, and has declared against them for damages for the erection and construction of the said raceway by “ The Trenton Delaware Falls Company,” over and across his said lands, and for the continuing and maintenance of the said raceway by the complainants, and for causing the water drawn from the river Delaware, by means of the dams and works of the complainants, to flow through the said raceway over and across his said land.

Since the complainants have been in the possession of their works, the defendant has purchased of the heirs of his brother, now deceased, the other land mentioned, over which the raceway was constructed, and to recover the possession of this land, has brought an action of ejectment.

The facts I have mentioned are admitted by the pleadings. The rights of the complainants under their purchase, or the validity of the acts of the legislature by which they were acquired and were confirmed, are not questioned by the pleadings, and were not controverted on the argument.

The bill alleges, in substance, that “ The Trenton Delaware Falls Company,” after expending a large amount of money, became embarrassed for want of funds necessary to pay for the lands required to complete their works ; that the defendant was a large stockholder and anxious for their completion ; that they applied to him for permission to occupy his lands and construct their works thereon, deferring compensation to a future day, and that he consented; it charges that the work was done within sight of his residence, and went on, from day to day, without any objection from him; it charges that if the defendant be permitted to obtain possession of the said lands, it will be in his power to obstruct the race-way, or draw off the water for the same, and thereby utterly destroy the value of the race-way, works and improvements, and also to stop the mill and manufactories now erected, to the irreparable injury and utter ruin of the complainants, and that he will refuse to sell the lands to them upon any terms.

The defendant admits that he had a conversation with individuals named in the bill, about the company’s taking his land; he says he did not consent, but does not say he positively refused; he does not deny that the race-way was commenced on his land, and its construction continued from day to day, with his knowledge and without his objecting, but says he did not know it was so constructed as to make a reservoir until the water was let into the race-way; he does not deny that it is his intention to draw off the water, and do the complainants all the injury they apprehend, but says the injury is not irreparable, because they can acquire the title to the land for the race-way in the mode prescribed in their charter.

The complainants have proved that the defendant did give his consent for the construction of their works upon his land, and to wait to a future day for compensation, and that when he gave such consent he knew of the deviation in the line of the route.

The question is, can this court grant the complainants any, and if so, what relief? They are without remedy at law, and if this court can afford them no protection, then this important public work is at the mercy of the defendant, unless, as the defendant sets up in his answer, the complainants can proceed and acquire the title to the land in the manner prescribed by the act of incorporation of “ The Trenton Delaware Falls Company.” But there are serious legal difficulties in the way of the complainants proceeding under the act. These difficulties the counsel of the defendant did not deny to exist. If this court should now dismiss the bill on this ground, and a court of law should determine that the complainants cannot acquire title in the mode prescribed by the act, serious and irreparable mischief might ensue before the complainants could again avail themselves of the protection of this court. I do not feel at liberty to deny the complainants the protection of the court on this ground.

Can the court protect the complainants ? The defendant defends himself under his title, and he insists that although he did consent that the complainants might take the land upon the terms alleged, yet it was a parol 'contract by which the complainants could acquire no title or interest in land ; if a license, it was one revocable in its character, and he has revoked it.

I shall not stop to reconcile the numerous authorities upon the doctrine of license, to ascertain as to what extent they are revocable, or what peculiar relief a court of equity will afford in mitigating the rigor of the common law. Nor will I trouble myself in determining whether relief can be granted in this case under the head of specific performance. The case has its peculiarities, and I shall endeavor to determine it upon principles, right between man and man, such as commend themselves to our common sense and common honesty. If this can be done without violating any established rules of law or equity, it is better than to resort to any technical rules in bringing the case under any specific head of equity jurisdiction.

By law, “ The Trenton Delaware Falls Company ” had the right and power to take the defendant’s land for the purposes of their works, the defendant had no option about the matter, so far as to whether the company should or should not have the land. All he could require was that the company, in obtaining the possession, should pursue the mode prescribed by their act of incorporation, in case a mutual agreement could not be made between them. In such case, commissioners were to be appointed, and upon their appraisement being made, and tiled in the office of the secretary of state, and payment of the sum awarded to the land owner, the company had the right to enter upon and occupy the land. In this instance the defendant waived his right to this mode of procedure and consented that the company might take possession of his land, without first making compensation or pursuing the mode prescribed by the statute to ascertain it. The only question between the parties was, as to the amount of compensation, not as to the right of the company’s having the laud.

The defendant delivered to the company the possession of the land, in order that they might change the character of the property, expend large sums of money upon it, and constitute it a part of an extensive and valuable public improvement. He was interested as a stockholder in the success of the company’s undertaking. The company completed their work, and third persons have made large investments depending upon its maintenance. The defendant is now taking advantage of his position, and has taken steps which will put in jeopardy and destroy, not the complainants only, but the large interests depending upon them for success. The complainants appeal to this court for protection.

In an ordinary case the court would have no difficulty. As between individuals, if the court could not order a specific performance, it might permit the defendant to take his land, upon paying for the improvements which he had induced to be made. Parkhurst v. Van Cortlandt, 1 J. C. R. 287.

The court cannot do that in this case. There is only one way to relieve the parties and that is to give the defendant compensation for his land, and remuneration for all damages. This court is perfectly competent to do this, and I do not see any good reason why it should not afford sueh relief in this way. The defendant is entitled to nothing more, and it is .unjust and against good conscience that he should be permitted, after having induced the expenditure of a large sum of money, to do that which can be of no benefit to himself, but irreparably injure others.

The counsel for the defendants insisted very strongly that if the court should determine that the complainants could hold any of the land in question, upon making compensation, they should be confined within the limits of their survey, filed in the office of the secretary of state.

This provision was made, in part, and, perhaps, mostly for the benefit of the landholder, and he has a right, as far as he is interested, to waive its requirements. If the defendant had given the company a deed for this land he could not object to their using it, because it is not all included in their survey. Having given his consent for its occupation and use, the fact of there being no survey is no injury to him, and he cannot take advantage of it.

The question remains as to the mode of ascertaining the amount of compensation. The usual course is by reference to a master, but I have no difficulty in giving the defendant a jury, if he desires it. The statute provides, that if any matter of fact shall render the intervention of a jury necessary, then the Court, of Chancery is authorized to direct an issue for the trial of the same in the Supreme Court. The facts, as to what is the value of the land in controversy, and what damages the defendant is entitled to, are questions peculiarly proper for that tribunal. They are necessarily matters depending upon the opinion of witnesses. A jury is the best tribunal to reconcile conflicting opinions, and put a proper estimate on their value, and it is the most satisfactory tribunal to parties.

I have more difficulty as to the land which the defendant purchased of the heirs of his brother. The question as to it, is presented in a very unsatisfactory manner by the pleadings. The bill alleges that the defendant has, since the completion of the said race-way, and since the complainants have become the owners, purchased other lands of the heirs of his brother, by whose consent and permission the race-way was constructed over the same. The defendant admits, in his answer, the purchase of other lands, not of his brother, but of John H. Chambers and Francis P. Chambers, and avers that the land was taken possession of without their consent. It turns out, in evidence, that John H. Chambers, Francis P. Chambers, and one Mary Ann Chambers, are the heirs-at-law of Reeder Chambers, who is dead. It is proved that Reeder Chambers died in the early part of the winter of 1831, so that the race-way could not have been made during his lifetime. There is no evidence as to whether these lands were occupied with the permission of any one.

This part of the case must be further examined, and I will hear the suggestion of counsel in reference to it.

Cited in North Hud. Co. R. R. v. Booraem, 12 C. E. Gr. 456.


author: The Ciiancellob.

text:
    The Hudson Manufacturing Company, complainant, and Peter Z. Elmendorf, defendant.
    1. A assigned to B a decree and all the rights, powers, and equities appertaining to the same, as fully as they were possessed by himself, with authority to collect the same in his name, &c. B agreed to pay, on the execution of the agreement, a specified portion, and the remainder in one year. For the purpose of securing the last payment, it was agreed that A should hold a lien upon the decree, as fully and as perfectly as though the same had not been assigned; and in the event of the non-payment of the said last-mentioned sum, A should have the power to proceed to collect the same upon the decree, giving B thirty days’ notice; and if, upon the sale* the premises should produce more than the last-mentioned sum, such excess was to be paid over to B.
    2. Held, that B had no authority, under the agreement, to collect the-money as the attorney of A, and discharge the decree.
    The question involved in the controversy turns upon the following agreement:
    In Chancery:
    Between Peter Z. Elmendorf, Complainant, and
    Albert Camman and John B. Cam-man, John J. Gaston, James Nevius, Defendants.

    New Jersey:
    Somerset County.
    Geo. H. Brown,

      Sol.

    Decree perfected April 8th, 1841.
    Whereas a decree has been regularly entered in the above entitled suit, and set forth in the fi. fa. now in the hands of the late sheriff, Peter A. Voorhees, Esq., and whereas there is now due upon the said fi. fa. and decree the sum of six thousand two hundred and sixty-three dollars and sixty-eight cents; and whereas the sale of the premises, made pursuant to the said fi. fa. and decree, has been rendered null and void, leaving the decree in full force against the parties, and in all respects as valid as though no such sale had been made.
    Now, therefore, it is hereby agreed between the said Peter Z. Elmendorf, of the one part, and the said Luther Loomis, of the other part, that the said Elmendorf, in consideration of the sum above mentioned, to be paid by the said Loomis, as hereinafter mentioned, does hereby assign, set over, and transfer the said decree and all the rights, powers, and equities appertaining to the same, as fully as they are possessed by the said Elmendorf, to the said Loomis, to have and to hold the same, to his heirs and assigns forever, with authority to collect the same in the name of the said Elmendorf, or otherwise, as the said Loomis shall deem expedient. And the said Luther Loomis agrees to pay, and does pay, upon the execution of this agreement, the sum of three thousand one hundred and forty-one dollars and twenty-eight cents •, and he further agrees to pay to the said Peter Z. Elmendorf, the sum of three thousand one hundred and twenty-two dollars and forty cents, in one year from the date hereof, and not before, with the lawful interest on the same.
    And it is further agreed between the parties, that for the purpose of securing the payment of the last-mentioned sum of money, the said Peter Z. Elmendorf shall hold a lien upon the decree hereby assigned to the said Luther Loomis, as fully and as perfectly as though the same had not been hereby assigned • and in the event of the non-payment of the said last-mentioned sum and the interest, the said Elmendorf shall have the power to proceed to collect the same upon the decree, by selling the premises according to law, and as though no assignment had been made. But in the event of a sale, the said Elmendorf agrees to give the said Loomis at least thirty days’ previous notice of such sale; and if, upon the sale, the said premises shall produce; more than the said last-mentioned sum of money and the interest, such excess or surplus he agrees to pay over to the said Loomis his heirs or assigns, provided the said surplus does not exceed the amount due upon the said decree, it being understood that the whole amount is to be collected, if the property will produce the sum required.
    And the said Elmendorf guarantees that there is now due upon the said decree the sum of six thousand two hundred and sixty-three dollars and sixty-eight cents.
    Luthee Looms. [l. s.]
    Petee Z. Elmejjdoef. [l. s.]
    April 20th, 1842.
    On this agreement there are endorsed two payments for interest — February 8th, 1851, one hundred and eighty-seven dollars and thirty-four cents; April 29th, 1851, ninety-three dollars and sixty-seven cents, which was the interest up to the 20th of April, 1851.
    In 1852, Elmendorf ordered the sheriff to sell under the execution.
    This bill was filed to enjoin the sale. The bill alleges that the defendants in the execution paid the amount due on it to Loomis, and insists that, by the terms of the assignment, they were authorized in doing so; and they further allege that they have tendered to Elmendorf the amount due him, in gold and silver, which he refused to accept.
    Elmendorf answered the bill. He insists that if the company paid to Loomis the amount due to Elmendorf, they paid it in their own wrong, and without authority. He denies having received payment from Loomis or any one else. He admits the tender, but says, when it was made, it was required of him to transfer the decree, which he could not do without either the payment of the whole or some authority for Loomis.
    Sufficient of the case is stated above to understand the points decided by the court.
    The motion was to dissolve the injunction, which had been granted prohibiting the sale.

      J. C. Elmendorf and G. H. Brown, for motion.

      Jas. S. Nevius and A. O. Zabriskie, contra.

   The Ciiancellob.

The disposition of this motion depends upon the construction of the agreement between Peter Z. Elmendorf and Luther Loomis. If Loomis had authority, as is contended, to collect the money as the attorney of Elmendorf and discharge the decree, then this injunction should be retained until the coming in of the answer of Loomis, and a further investigation of the merits. If it did not authorize Loomis to collect the amount that remained due to Elmendorf, then the injunction should be so modified as to allow Elmendorf to proceed under the decree and collect that amount.

There was due on the decree the sum of six thousand two hundred ahd sixty-three dollars and sixty-eight cents. For and in consideration of the sum of three thousand one hundred and forty-one dollars and twenty-eight cents, the payment of which was acknowledged, and the further sum of three thousand one hundred and twenty-two dollars and forty cents which Loomis agreed to pay in one year, with interest, Elmendorf “ did assign, set over and transfer the said decree, and all the rights, powers and equities appertaining to the same, as fully as they are possessed by the said Elmendorf, to the said Loomis, to have and to hold the same to his heirs and assigns forever, with authority to collect the same in the name of the said Elmendorf, or otherwise, as the said Loomis shall deem expedient.”

If the assignment and agreement had stopped here, Loomis would have been authorized to enforce the payment of the whole amount due on the decree against the defendants. Of course it would have been authority for the defendants to settle with Loomis. But, by the further terms of the agreement, the authority conferred upon Loomis was limited. It was further agreed between the parties “that for the purpose of securing the payment ” of the amount remaining unpaid to Elmendorf, which Loomis had agreed to pay in one year, Elmendorf should hold a lien upon the decree “ as fully and as perfectly as though the same had not been assigned.” If this was not a limit to Loomis’ authority, and a prohibition against his collecting that amount, how did Elmendorf hold a lien for it upon the decree as fully and as perfectly as though ” the assignment had not been made ? Elmendorf had Loomis’ promise and agreement to pay the amount; but this was a further agreement between them that Loomis’ personal responsibility was not to be relied upon. And yet, if Loomis could discharge the lien, what security was the lien to Elmendorf? If a payment to Loomis was payment to Elmendorf, what did the agreement avail that he was to retain the lien ?

The Hudson Manufacturing Company had no authority, by virtue of the assignment, to pay to Loomis the amount due to Elmendorf. They claim relief on the ground that they have made payment to Loomis. This they were not justified in doing.

The injunction must be modified. Elmendorf must be permitted to proceed on his decree. The sheriff must pay to him the sum of three thousand one hundred and twenty dollars and forty cents, with interest from the 20th of April, 18£jl, and bring the balance into court to abide its further order.


text:
    Elias C. Van Mater v. William Sickler, administrator of Isaac B. Van Mater, deceased.
    1. In a suit instituted by one of the next of kin against an administrator for a settlement of the estate in this court, all those entitled to a distributive share of the estate are necessary parties.
    2. Where the complainant, as next of kin, calls upon the defendant, who is the personal representative of the intestate to answer in that capacity, and as an heir-at-law'calls upon the defendant to account for the rents and profits, the bill is multifarious.
    3. In the settlement of the estates of decedents, this court has concurrent jurisdiction with the Orphans’ Court. But where jurisdiction has been assumed by the Orphans’ Court, it is not the right of a party to change the form of settlement at his pleasure.
    On filing the bill an injunction was allowed by one of the injunction masters. This was a motion on the answer of the defendant to dissolve the injunction.

      R. P. Thompson, Attorney-General, for motion.

      A. L. Eakin, contra

   The Chancellor.

The complainant, as one of the next of kin of Isaac B. Yan Mater, deceased, is entitled to a distributive share of his estate. He filed this bill against the defendant as the administrator of the intestate; and the prayer of the bill is that the defendant may be compelled to settle bis accounts as such administrator, in this court; that he may be decreed to account also for certain rents and profits which bo has collected and which belong to the complainant, as one of the heirs-at-law of the decedent. He further prays that the defendant, in the meantime, be enjoined from further prosecuting a suit at law, which the defendant, as administrator, brought against the complainant in the Circuit Court of the county of Salem.

The bill is objectionable in several particulars.

First. The necessary parties are not before the court. In a suit instituted by one of the next of kin against an administrator, for a settlement of the estate in this court, all those entitled to a distributive share of the estate are necessary parties. They are immediately interested in taking the accounts. Their rights are ascertained and concluded by the decree of this court.

Second. The bill is multifarious. One object of the bill is to settle the personal estate of Isaac B. Van Mater. The complainant, as next of kin, calls upon the defendant, who is the personal representative of the intestate, to answer in that capacity. But the complainant, also, as an heir-at-law, calls upon the defendant to account for certain rents and profits which have come into his hands. It appears from the bill that the persons entitled to the rents, claim them as heirs-at-law, through their mother, who was the wife of the intestate. There are others than the heirs-at-law entitled to the rent, who, as next of kin, are interested in the distribution of the estate which the defendant represents. It is manifest, therefore, that these accounts cannot be settled in the same suit.

But as the bill might be amended to obviate these objections, it will perhaps be for the interest of the parties that I should express some opinion as to the merits of the case. The only question before me now is as to the dissolution of the injunction. This question, however, in a measure involves the propriety of the court’s assuming the jurisdiction of settling the estate of the intestate in this court.

The administrator has proceeded without any objection, in the Orphans’ Court of the county of Salem, and presented there his accounts for final settlement. This complainant asked that court for time to file exceptions to the accounts, which was granted. Before the expiration of the time allowed for filing exceptions this bill was exhibited.

Two questions are presented:

First. Ought this court to assume jurisdiction for the purpose of administering the estate ? If so, it might properly follow as incident that the inj unction granted should be continued, for the reason that the settlement of the demand which the administrator has against the complainant would be involved in the final settlement and distribution of the estate by a decree of this court.

Second. Is the settlement of the account between the complainant and the estate of a character which requires or renders proper the interference of a court of equity? If so, it is proper this court should assume jurisdiction, in order to grant the complainant relief. The settlement of the accounts of the administrators here would follow as incident to that relief.

In the settlement of the estates of decedents, this court has concurrent jurisdiction with the Orphans’ Court. Salter and others v. Williamson’s Ad., 1 Green 480; King v. Berry’s Ex’rs, 2 Green, 44, 261 ; manuscript of opinions of Ch. Williamson, Garrabrant Lawrence, and Burtiss and others, v. Adm’r of Hopkins. But where jurisdiction has been assumed by the Orphans’ Court, it is not the right of a party to change the forum of settlement at his pleasure. The Chancellor must exercise his discretion, and judge as to the propriety of the Court of Chancery’s interposing. There are many cases where the character of the estate is such that the remedy which can be afforded to parties interested, by the Orphans’ Court, is defective. The case may be one of complication and difficulty, requiring the aid of a Court of Chancery, in ascertaining and securing the rights of those interested in the estate, and in the protection of the executor or administrator.

In this case there is nothing which requires the aid of this court. The complainant alleges that the inventory filed is not a true one, and that the final account presented for allowance by the administrator, is, in many respects, inaccurate and erroneous. The Orphans’ Court is as competent to adjust and correct these defects, if they really exist, as this court. There is no complaint of any error they have committed, nor is any reason suggested for any well-grounded apprehension that that court will not afford complete justice. I do not see any reasonable ground, therefore, for ousting the Orphans’ Court of its jurisdiction, for the mere purpose of settling the administrator’s accounts here.

As to the other ground, whether the complainant has any equity which renders the interference of the court on his behalf necessary or proper. The complainant is indebted to the administrator between one and two hundred dollars for articles purchased at the vendue. After time was granted to file exceptions to the administrator’s accounts, the administrator brought the suit at law against the complainant. There is no dispute that the debt is due, but the allegation is, that the amount which the complainant is entitled to receive as his distributive share of the estate, is more than the debt which the administrator claims to be due the estate; and it is insisted that, such being the case, it is unreasonable and inequitable that the defendant should be permitted to enforce the payment by suit at law. The answer denies the allegation that the amount due the complainant, as next of kin, is equal to the amount of the debt contracted. Ought the court to take jurisdiction of the case to settle this question ? The delay in the settlement of the estate, and the expense of litigation, are proper matters for the consideration of the court. At the worst, the complainant will only be put to some inconvenience, by the course pursued by the administrator, in compelling him to pay his debt, if this court refuses to interfere. On the other hand, the whole amount in dispute will not pay the costs of this litigation. I do not think a suit like this is to be encouraged. I can only judge of the case as it appears by the bill and answer. The injunction must be dissolved, with costs.

Cited in Frey v. Demarest, 1 C. E. Gr. 239; Search’s Adm. v. Search’s Adm’s, 12 C. E. Gr. 140.