text:
    Frederick A. Vandyke, Jr., v. David S. Brown and others, and the New England Manufacturing Co.
    In March, 1848, S. G. P. filed a bill against the N. E. Man. Co., for the foreclosure of a mortgage executed by the said Co. to him. In January, 1849, V. presented a petition to the Court, setting forth, that S. G. P., when he received the said mort gage, gave a declaration of trust, that he received said mortgage for the purpose of securing to a certain bank the payment of certain drafts drawn by said Co. on D. S. B. & Go., and accepted by them, which had been discounted by the said bank for the benefit of the said N. E. Man. Co., and that, in case the said drafts should be paid by the said 1). S. B. and Co , on account of the said N. E. Man. Co., before the said Man. Co. should have placed funds in the hands of the said D. S. B. & Co. to meet the same, then the said bond and mortgage to be held by said S. G. P. in trust to secure to said i). S. B. & Co. the amount which should remain due to them on account of their payments made on the said drafts; with power to assign the said bond and mortgage to either of the parlies that might be entitled to the same. That in May, 1847, the petitioner became the owner of 62 shares of the Stock of said Man. Co. (And stating facts going to show that nothing was due on the said morigage.) That D. S. Brown has the entire control of said N. E. Man. Co. and will not allow any answer to be put in or defence to be made to the bill exhibited by the said S. G. P. On this petition, the Court ordered, that the petitioner be permitted, as one of the stockholders of the N. E. Man. Co., to answer the said bill, and that he be made and deemed a party thereto for that purpose.
    An answer was put in accordingly; and replication filed; testimony taken; and on the hearing of the cause, the Chancellor ordered, that an account be taken between said D. S. B. & Co. and the N. E. Man. Co.
    A. & B., owning a manufacturing establishment, obtained an act incorporating a company, and subscribed, each, for half of the stock, except four shares, which were put in the names of four other persons, for the purpose of having a sufficient number of persons to organize under the act. After the organization of the company, by the election of directors, A. and B. continued to conduct the business, as before the act, by and between themselves as individuals, the company not acting by its board.

      Held; That they were bound to conduct their business as a corporation, and were to be governed by the law of corporations.
    Commission merchants in Philadelphia to whom goods manufactured by a company in Trenton wore sent, in their brown state, to bo sold, sent them to a printing establishment in Pennsylvania and had them printed, and then sold them.

      Held,; That where the printing was advantageous to the Man. Go. they should have the benefit; but where the printing caused a loss the Man. Co. should be credited with the value of the goods in their brown state.
    The commission merchant in Philadelphia, who was to receive 5 per cent, for sale and guarantee, sent, without direction to do so, some of the goods to New York and Boston, for sale, and paid 5 per cent, for sale and guarantee.

      Held; That a charge by him of two-and-a-half per cent, in addition, was inadmissible.
    The rule that, where the complainant goes for a general account, and it turns out that there has been a settled account, he must amend, and surcharge and falsify, supposes, that an account has been given by the defendant.
    The bill, filed October 8th, 1849, states, that on the 3d March, 1845, Stacy G. Potts filed his bill against “ The New England Manufacturing Company,” setting out, that, on the 22d October, 1846, the said Manufacturing Company were indebted to said Potts in $16,398.01, and, to secure the payment thereof, executed and delivered to said Potts a bond of that date, conditioned for the payment of said sum as follows : $5,396.15 in six months; $5,448.44 in eight months ; $5,553.32 in one year ; and, to secure the payment of said bond, executed a mortgage on all their real estate, and on the fixtures and machinery of the mill of said Manufacturing Company; and praying foreclosure.
    That this complainant, on or about January 1, 1849, presented a petition to this Court, setting forth that such bill had been filed by said Stacy G. Potts, and stating, that, though the said mortgage, on its face, appears to be a mortgage to said Potts as an individual, in his own right, and free from any trust, yet that, at the time of the execution thereof, the said Potts executed a declaration of trust, by which, &c., (setting it out.) This writing declares that the said bond and mortgage were executed to the said Potts, in trust for the purpose of securing to the Mechanics’ & Manufacturers’ Bank of Trenton the payment of three certain drafts, drawn by the said N. E. Manufacturing Co. on David S. Brown & Co., of Philadelphia, and accepted by them, which said drafts had been discounted by the said Bank for the benefit and at the request of the said N. E. Manufacturing Co.; the first whereof is for $5,396.15, bearing even date with said bond, payable in 6 months; the second, for $5,448.44, of same date, payable in 8 months ; and the third, for $5,553.32, of same date, payable in one year; and that, in case the said drafts shall be paid by the said D. S. Brown & Co., on account of the said New England Manufacturing Co., before the said Manufacturing Co. shall have placed funds in the hands of said David S. Brown & Co. to meet the same, then the said bond and mortgage to be held by the said Potts in trust for the purpose of securing to the said Brown & Co. the amount which shall remain due to them on account of their payments made on the said drafts; with power to assign the said bond and mortgage to either of the parties who may be entitled to the same.
    That the said petition of this complainant further showed, that when tho said drafts, respectively, became due, the said D. S. Brown & Co. paid tho said drafts, on account of the said New England Manufacturing Co., before said Co. had placed funds in the hands of said D. S. Brown & Co. to meet the same ; whereby, in pursuance of said declaration of trust, the said D. S. Brown & Co. became interested in the said mortgage as cestius que trust, and the said Potts became trustee for said D. S. Brown & Co. And that the individuals composing the firm of D. S. Brown & Co. are David S. Brown, Robert F. Walsh, George F. Peabody, and Charles S. Peaseley.
    That said petition further showed that no power is granted by the act of incorporation of the said Now England Manufacturing Company or its directors to execute a mortgage. That said New England Manufacturing Co. was chartered on the 4th March, 1842. That it is provided by the 2d article of the by-laws that the officers of the Co. shall be a President, who shall be President of the Directors, and four other Directors, a Clerk and Treasurer, to be chosen annually, by ballot, for the ensuing year, and until others are chosen their successors and have accepted; and that no one shall hold any office, except that of Clerk, who is not a stockholder.
    That the said article of the by-laws provides, that the stock shall consist of 128 shares, of $500 each. That at every Stockholder’s meeting each share should bo entitled to one vote, except that no stockholder, in his own right, should be entitled to more than 20 votes, as provided by the act of incorporation. That a stockholder might empower any other stockholder to vote for him, in his absence, by a written order or request. That said petition further showed, that the pretended meeting of tho Board of Directors at which it is pretended, that some resolution was passed authorizing the making of said mortgage, was never legally convened by any proper notice given to the said directors. And that the said pretended meeting was not held at the -usual place of business of the Co. at South Trenton, but in the office of Stacy G. Potts, Esq., in Trenton.
    That said petition further showed, that at said pretended meeting there was no lawful quorum of directors competent to do business, the said meeting being composed of David S. Brown and John H. Shortridge only. That said Brown was directly interested in the said mortgage, and therefore not competent to vote on any resolution to authorize, or direct or confirm the making or executing the said mortgage.
    That, previous to the act incorporating the said Co., the said D. S. Brown & Wiliiam R. Hanson owned the cotton mill and manufacturing establishment, situated on the water power in South Trenton, known as the cotton mill of Brown & Hanson; and that, after the said act of incorporation, the said D. S. Brown and William R. Hanson subscribed for 62 shares, and Jacob Kline for one share, Charles Parker for one share, John B. Shortridge for one share, and John C. Benson for one share. That said Kline, Parker, Shortridge and Benson were merely nominal stockholders, never having paid up the amount of their respective shares ; and never having paid but $5 each on their respective shares.
    That, after said stock was subscribed, the said cotton mill and manufacturing establishment of said Brown & Hanson were conveyed, by deed, to the said New England Manufacturing Co. of South Trenton. That said Kline held his one share of stock until his death, when it was transferred by his Administrators to the said Hanson; and that said Brown procured an assignment from said Parker óf his one share of stock ; thus preserving the equality of interest and power of the said D. S. Brown and William R. Hanson.
    That, in May, 184T, the said William R. Hanson, for a valuable consideration, transferred to said petitioner 62 shares of said stock, reserving to himself only one share thereof.
    That afterwards, and shortly before the last Wednesday of June, 1848, the day on which, by the first article of the bylaws of the Co., the annual meeting of stockholders for the choice of officers was to take place, the said Brown, for the purpose of obtaining the exclusive control of the Co., transferred to his partner in trade, Robert F. Walsh, one share of said stock, and to Samuel B. Fry, one of his clerks in his counting room, 12 shares, and to his nephew, William M. Brown, and to William Baugh, each, 15 shares. That said petitioner believes, that said Walsh, Fry, William N. Brown and Baugh never paid anything to said D. S. Brown for said shares so transferred to them, and that they held the same only in trust for D. S. Brown, and to enable him by the use of their names to evade the 8d article of the by-laws, and to give more votes, by the use of their names, at any meeting of the stockholders, than he could have done if this whole number of shares had continued to stand in his own name. That, although there had been no election of directors since July 8,1844, yet, soon after said transfers, the said D. S. Brown caused a notice to be given to the stockholders, that there would bo an annual meeting of the stockholders, at Trenton, on the 28th of June then next; which notice, the the petitioner believes, did not designate the object of said meeting.
    That said petition showed, that at said annual meeting no stockholders attended except said D. S. Brown and John H. Shortridge, who was then a clerk of said D. S. Brown & Co.; and that said D. S. Brown and J. H. Shortridge adjourned said meeting of stockholders to July 12,1848. That, although notice that an adjourned meeting of stockholders would be held on said 12th July was served on the stockholders, yet that the petitioner avers, that said notice did not designate the object of said mooting, nor in any way indicate that it was the intention of said meeting to proceed to an election of directors.
    And said petition further showed, that, at said adjourned meeting, on said 12th July, none of the stockholders attended except the said David S. Brown, Robert F. Walsh, John H. Shortridge and William R. Hanson. That, as soon as it was intimated by D. S. Brown that it was the object of the stockholders present to proceed to an election of directors, the said Hanson protested against their proceeding to such election, inasmuch as it was not indispensable to their interest and the purposes of the Co. that an election for directors should be held at that time, no such election having been held for several years ; that it would be unjust, if not illegal, as Mr. Vandyke’s interest in the Co., being about one-half of the whule stock, was not represented; and said Hanson therefore informed said meeting that, if they persisted in proceeding to an election, he should decline voting and withdraw from said meeting. That said meeting did persist in proceeding to an election, and that said Hans on thereupon withdrew from said meeting; and the said Brown, Walsh and Shortridge did proceed to an election of directors j and did declare that they had elected William R. Hanson, D. S. Brown, F. A. Vandyke, Robert F. Walsh and William Burgh directors.
    That said petition further showed, that the said stockholders, after said Hanson had withdrawn from said meeting, proceeded to pass the following resolution, viz : “ Resolved, That the report to be made under and in compliance with the foregoing resolutions be made with a view of making, if necessary, as ready a sale of the property of the Co., whether under a foreclosure of the mortgage or otherwise, as circumstances will admit of, for the purpose of discharging its obligations and re-imbursing the stockholders.” And that the said Walsh, thereupon, offered the following resolution, which was adopted: “ Whereas any demurrer might postpone the sale of the property of the Co. disadvantageously, and thereupon materially affect the interest of the Co., therefore, Resolved, That the directors, if in their judgment it may seem judicious, be and are hereby requested to direct a decree to be issued allowing the property without let or demurrer to be sold under the mortgage.”
    And the said petitioner further showed, that he believed that said resolution offered by said Walsh was offered at the suggestion and instigation of said D. S. Brown, and that he voted for the same, and that it would not have been adopted without his concurrence; and that the object of said resolution was to prevent any defence being made in the name of said New England Manufacturing Co. to the said bill of complaint of said S. G. Potts, to obtain a speedy decree on said mortgage and thereupon to canse a sale of the said mill, &c., of said Co., in order that he, the said Brown, may purchase the same at Sheriff’s sale.
    That said petition showed, that, if a sale of said property should be made by the Sheriff in the present state of the money market, and extreme depression in the business of manufacturing, the said property will bo greatly sacrificed.
    That, inasmuch as the said Brown, by means of his friends and agent, the said Walsh and Burgh, has the entire control of said Co., and will not allow any answer or defence to be put in by the said New England Manufacturing Co. to the bill of complaint of said Potts, the petitioner has no opportunity of protecting his interest involved in said suit, or of being heard before this Court, except under the order and direction of this Court, the petitioner prayed that he might be made a party defendant to the said bill of complaint, and bo permitted to answer the said bill, in his own name, as one of the stockholders of said Co., or to answer it in the name of said New England Manufacturing Co., or be permitted to adopt such other method of presenting a true statement of the facts in relation to said mortgage and the matters involved in said bill as his interest shall require.
    That the petitioner would have presented his petition earlier, had he not hoped and expected that a compromise would bo effected. That negotiations for a compromise with said Brown were pending until yesterday.
    The bill states the hearing on said petition; and that the Chancellor, on the 80th June, 1849, ordered that this complainant, Frederick A. Vandyke, Jr., be permitted, as one of the stockholders of said New England Manufacturing Co., to answer the said bill filed by said Potts ; and that he be made and deemed a party thereto for that purpose. That he, accordingly, filed an answer to said bill, and that the said suit is still pending. That said Potts is only the nominal complainant in said bill, being only the trustee of said D. S. Brown, R. F. Walsh, George F. Peabody and Charles Peaslee, trading under the name of D. S» Brown & Co.
    That, in and by the answer thus filed by this complainant to the said bill of said Potts, this complainant admitted the execution of said mortgage and bond to said Potts, but denied the legality and validity thereof, and set out, substantially, the same matters and facts in relation thereto as are set forth in the said petition of this complainant; which petition, and which answer to the said bill of said Potts he prays may be considered as part of this bill.
    That, in and by the said answer, it was set out, and this complainant here again reiterates, and charges and says, that he is informed and believes, that, although the said D. S. Brown & Co. may have paid the drafts mentioned in said declaration of trust of said Potts, to the said Mechanics’ Bank in Trenton, before the said New England Manufacturing Co. had placed money or funds in their hands to pay the whole of said drafts, or the whole amount of money therein named, yet that said F. A. Vandyke, Jr., doth not admit that the said New England Manufacturing Co. is indebted to the said D. S. Brown & Co. in the amount of said drafts so paid by them. On the contrary, the said Vandyke shows, that the said D. S. Brown & Co. were the commission merchants, factors and agents to whom the said New England Manufacturing Co. assigned their manufactured goods for sale, and that, for a long time previous to the date of said drafts, the said New England Manufacturing Co. had been in the practice of sending their manufactured goods to the said D. S. Brown & Co. for sale on commission; and that the said New England Manufacturing Co. continued to consign their manufactured goods to the said D. S. Brown & Co. after the date of Said drafts up to the time of the maturity of said drafts and afterwards; and that the said D. S. Brown & Co. had, previous to the maturity of said drafts, sold large amounts of said manufactured goods, and had received therefor large sums of money and notes or drafts and funds equivalent to and received by them in lieu of money ; and that the said D. S. Brown & Co. had in their hands, at the time of the payment by them of the said drafts to the Said Mechanics & Manufacturers w <y iK at“T*reirit!&n^ ■ as said Vandyke verily believes and charges, a large"'uapunt ;6f monies and funds belonging to the said New England Man^. factoring Co., which ought to have been applied by said D. S. Brown & Co. to the payment of said drafts, and which, hut for their gross negligence, they might have so applied.
    And this complainant insists, that, if said bond and mortgage should be deemed valid by this Court, it should only be held and deemed a security for so much as shall he found to have been due from said New England Manufacturing Co. to said D. S. Brown & Co. at the time of the payment of said drafts, on a full statement and settlement of the accounts between the said D. S. Brown & Co. and the said New England Manufacturing Co.; and that it should he referred to a Master to take and state an account between said D. S. Brown & Co. and said New England Manufacturing Co., of all the goods sent by said N#w England Manufacturing Co. to the said D. S. Brown & Co., previous to the maturity of said drafts, to he sold on commission, and of the amount of their sales, and of their commissions, charges and expenses thereon, in order that justice may be done to the said Now England Manufacturing Co. and to this complainant and the other stockholders of said Co.
    And this complainant, in his said answer to said hill, stated, and here reiterates and charges, that the goods manufactured bj Said Now England Manufacturing Co., and sent to said D. S. Brown & Co. for sale, were cotton cloths, not printed, and that Said D. S. Brown, or said D. S. Brown & Co., without any authority from said New England Manufacturing Co., sent the said goods to a printing establishment, in which, as said Vandyke is informed and believes, the said D. S. Brown had an interest, and had the said cotton cloths printed, thereby adding to the expense of said goods from 8 to 5 cents a yard; and that, on the sale of said goods, the said Brown & Co. charged their commission on the amount of the price of said goods, thus enhanced by the additional expense of such printing, so done without the authority of the said New England Manufacturing Co.; and that, for the printing of said goods, the said D. S. Brown & Co. paid more than the ordinary and fair price for printing such kinds of cotton goods, and more than the same could have been done for at other printing establishments in which the said David S. Brown was not interested. And that, after the said D. S. Brown, or D. S. Brown & Co., had thus illegally and improperly had said goods printed, when said D. S. Brown & Co. sold said goods, if the price of such goods in the market was low, they would charge said New England Manufacturing Co. with all the expense of printing said goods ; but if the price of printed goods was high, they would only credit said New England Manufacturing Co. with the value of cotton goods, at their own estimate, and take the benefit of the advanced price of the printed goods, themselves. And that, by means of this illegal conduct, and other illegal practices, extortionate commissions and usurious interest of said D. S. Brown and D. S. Brown & Co., they swelled their account-against the said New England Manufacturing Co. to a much larger amount than it ought to have been, and, as said Vandyke verily believes, to an amount of nearly $40,000 more than it should have been.
    That, after the acceptance of said drafts by said D. S. Brown & Co., and before the filing of the said bill by the said Stacy G. Potts, and on or about January 1, 1847, the said Benjamin Tredick ceased to be a member of said firm of D. S. Brown & Co.
    This bill states, that, after the decision of this Court on the-said petition of said Vandyke was known to the Solicitor and Counsel of said D. S. Brown & Co., the said D. S. Brown & Co., with the view and intention, as this complainant believes, of evading the said order made on said petition, and to prevent an investigation of their accounts with said New England Manufacturing Co., and of their illegal, unjust and fraudulent practices in regard to their business with said Co., caused a summons to be issued out of the Supreme Court, in the name of David S, Brown, Robert F. Walsh, Benjamin F. Tredick, George F. Peabody and Charles Peasely, trading under the name of David S. Brown & Co., against the said New England Manufacturing Co., in an action of trespass on the case for $80,000, returnable to the 3d Tuesday of July, 1849. That the said summons was issued by Peter D. Vroom, Esq., as the Attorney of said D. S. Brown & Co., who acted as the Counsel of said D. S. Brown & Co. in the said case of Potts against New England Manufacturing Co., and argued against the granting the prayer of the petition of said Vandyke, this complainant, in the said case.
    That, since the said argument on the said petition, the said D. S. Brown has caused himself to be elected President of said New England Manufacturing Co., and that, although he resides in Philadelphia, and does business there, and although the said New England Manufacturing Co. have not been driving their mill or carrying on any manufacturing business since the 1st of May last, (1849,) yet the said summons was served, by the Sheriff of Mercer, on the said D. S. Brown, President of said New England Manufacturing Co. ; and this complainant believes and charges, that the said D. S. Brown came to Trenton for the purpose of enabling said Sheriff to serve said summons on him, and thereby facilitate the obtaining a judgment against said New England Manufacturing Co. That a declaration has been filed in said suit in the Supreme Court, founded on the said three drafts drawn on said D. S. Brown & Co. by the said New England Manufacturing Co., in favor of Shortridge, the Treasurer of said Co., alleged to have been accepted and paid by said D. S. Brown & Co.; being the same drafts and sums of money mentioned in the declaration of trust executed by said Potts, and to secure the payment of which the bond and mortgage, set forth in the bill of complainant of said Potts were given. That said declaration was filed August 24, 1849, and that the New England Manufacturing Co. have not caused any appearance to be entered or plea filed for them in said suit against^them in the Supreme Court.
    That said D. S. Brown & Co., having procured the said D. S. Brown to be elected President of said New England Manufacturing Co., and also procured the election of a majority of directors either directly interested in their Co. or subservient to their wishes and under their control, will not authorize or permit any appearance to be entered or plea filed for said New England Manufacturing Co., or any defence to be made in said suit in the Supreme Court against their demands ; and that it is the intention of said D. S. Brown & Co. to prevent any investigation into the justice or legality of their claims and demands against said New England Manufacturing Co., in said suit in the Supreme Court, by causing a judgment by default to be entered at the present term of the Supreme Court against the said New England Manufacturing Co. for want of a plea, and thus to establish against said New England Manufacturing Co. their claims to a much larger amount than is fairly and equitably due to said D. S. Brown & Co. on a full and fair investigation and settlement of their accounts with the said New. England Manufacturing Co.
    That, from the best information the complainant can obtain on the subject, he verily believes, if a fair statement and settlement of said accounts can be had under the direction of this Court, the New England Manufacturing Co. would appear to be the creditor, and not the debtor of the said D. S. Brown & Co.
    That this complainant believes and charges, that the said D . S. Brown and Robert F. Walsh, two of the members of said firm of D. S. Brown & Co., failing to accomplish their plan of obtaining a sale of the mill and premises of said New England Manufacturing Co. by means of the said bill of foreclosure filed by said Potts, have caused said suit to be brought in said Supreme Court for the purpose and with the intention of having the property of said New England Manufacturing Co. sold at Sheriff’s sale, in order that they, or the said D. S. Brown, or the said D.-S. Brown & Co., may purchase the same at a price below its fair value.
    The bill prays, that the said D. S. Brown & Co. may come to a fair settlement of their accounts with the said New England Manufacturing Co. as agents, factors and commission merchants of said New England Manufacturing Co., and otherwise, under the directions of this Court; and that the said D. S. Brown, Robert F. Walsh, Benjamin F. Tredick, George F. Peabody and Charles S. Peasley may be restrained by injunction from further prosecuting their said suit in the Supreme Court against the New England Manufacturing Co., until the further order of this Court; and for such other and further relief, See.

    The New England Manufacturing Co. is, also, made defendant in this bill.
    The defendants' composing the firm of D. S. Brown & Co. put in an answer; and testimony was taken on both sides; and the cause was brought to hearing on the pleadings and evidence.

      W. Halsted

    for the complainant. He cited 11 Metcalf, 210; 13 Ves. 430; 3 Hen. and Mun. 89; 6 John. Ch. 413; 2 Ib. 210; 4 Barb. Rep. 626 2 Port. Rep. 351; 5 Dana. 54; 1 Hoff. Ch. 294; Paley on Agency, 94, 98, 99; 5 Com. Dig. Factor, B.; 11 Mass. Rep. 27, 97, 228; 5 John. Ch. 429, 532; 8 N. Hamp. Rep. 504; 4 Cow. 645; 1 Sim. and Stuart, 333; 5 Denio, 567, 577; 4 John. Ch. 596, 7; 1 Kelley's Rep. 376; 27 Maine Rep. 509; 2 Green's Ch. 300; 1 Halst. Rep. 408; Beam Pl. in Eq. 229, 233; Willey's forms, 550; Story's Eq. Pl. 802; 7 Paige, 573; 15 Wend. 83; 1 Ch. cases, 55; 2 Freeman’s Rep. 183.

      C. S. Green and P. D. Vroom

    for the defendants D. B. Brown & Co. They cited 2 Edw. Ch. 13, 23; Ang. and Ames on Corp. 158, 170, sec. 9; 3 Bro. Ch. 439; 2 Anstruther, 495; 5 Barnw. & Ald. 34, in 7 Eng. C. L. Rep. 13; 9 Ves. 223; 4 Carrington and Payne, 124, in 19 Eng. C. L. Rep. 304; 3 Campb. Rep 467, 402; Baldw. Rep. 540; 5 Cow. 587; 1 Wend. 521; 15 John Rep. 409; Ang. & Ames on Corp. 131, 2; Pally on Agency, 113, 114, and note; 4 Mason's Rep. 296; Livermore on Agency, 50; 1 Mad. Ch. Pr. 82, 3; 1 Story's Eq. Pl., sec. 523, 4, 5; Paley on Agency, 52, and note; 7 Cranch, 147; 9 Pick. Rep. 212; 2 Freeman's Rep. 31; 3 Wash. 350, 402; Story's Eq. Pl., sec. 798, and note.
   The Chancellor.

A. and B. own a manufacturing establishment, each owing half, in common. They obtain an act incorporating a company; subscribe, each, for half the stock, excepting four shares, which are put in the names of four other persons, merely for the purpose of having a sufficient number of stockholders to organize the Company in the manner directed by the act of incorporation. After the organization of the Company, by the election of Directors, A. and B. continue to conduct the business as before the act of incorporation, by and between themselves as individuals, the Company not acting by its Board. In this state of things, an account is made out by A. against the Company, and B. assents to it; there being no action of the Board assenting to it. Afterwards, C. became a bona fide assignee of the interest of B. in the Company, and asks an account of the dealings between A. and the Company. Does the assent of B., so given to the account of A. against the Company, bar the Company, or C. as a stockholder of the Company, from the time of such assent by B. to the said account of A. against the Company 1 Is it a case in which C. should be put to filing a bill to surcharge and falsify the account of A. 1

Persons obtaining, by an act of incorporation, the advantages of an incorporation, should be held, and that strictly, to conduct their business as a corporation, and in the manner required by the act of incorporation. One of the advantages of a corporation is, that the stockholders can only lose the amount invested in the corporation; their other property not being liable for the debts of the Company. But two persons doing business in. the manner above stated, under an act of incorporation, are in reality but an ordinary partnership, and should be liable to debts to the whole amount of their property, as well that invested in such business as that possessed by them disconnected with that business. The obtaining an act of incorporation by two men, to be used by them as above stated, is a fraud upon the community. And it would be encouraging such fraud to permit them to conduct their business simply as two individuals composing an ordinary partnership conduct their business. They must be held to conduct their business as a corporation, and be governed by the law of corporations.

Brown & Co. were commission merchants in Philadelphia, to whom the New England Manufacturing Co. sent goods manufactored by them, in their brown state, to be sold. Brown & Co. sent some of these goods to a printing establishment in Pennsylvania, and had them printed, and then sold them.

If Brown & Co. were not authorized to print the brown goods, I think the course to be taken, will be, that where the printing was advantageous to the Manufacturing Company, they shall have the benefit of it; that is, if by the sale of printed goods more is received than "sufficient to pay for the goods and the printing, the printing shall be deducted, and the residue go to the account of the Manufacturing Company; and if there is a loss by printing, the Manufacturing Co. be credited with the value of the goods in the brown state. No commissions on the expense of printing should be allowed.

My impression is, that Brown & Co. were not authorized to cause the goods to be printed.

The credit which Brown & Co. claim for short measure in the goods sent them must be struck out, under the testimony. There is no proper proof to contradict Benson as to measure.

The complainant’s stock was transferred to him July 7th, 1847. The last of the three drafts did not become due till October 25tb, 1847. I think the complainant entitled to an account, in order to ascertain whether D. S. Brown & Co. had funds on that day.

In December, 1845, the Manufacturing Co. owed, by Brown’s own statement, but $1,597.64; and that was paid. From that time the charges for interest amount to over $10,000. This cannot be right.

The suit in the Supreme Court is for the recovery of the amount of three drafts drawn by the New England Manufacturing Co. on D. S. Brown & Co., and accepted by D. S. Brown & Co. Prima facie the acceptance shows that the New England Manufacturing Co. had funds in the hands of Brown & Co. to the amount of the drafts. The plaintiffs in the suit in the Supreme Court allege, that the drafts were accepted by D. S. Brown & Co. for the accommodation of the New England Manufacturing Co., and were paid without funds of said Manufacturing Co. in their hands. The complainant in this suit, a stockholder of the said New England Manufacturing Co., denies this allegation. The bill and the facts admitted show, that it was impracticable for this complainant or the said New England Manufacturing Co. to make any defence in the said suit at law. And under these circumstances the complainant comes here for an account between said Brown & Co. and the said New England Manufacturing Co. I see no reason why the account should not extend subsequent to the maturity of the drafts: the whole case should be settled here.

Brown & Co. sent some of the goods, received by them in Philadelphia as commission merchants for sale, to New York and Boston, for sale, and the merchants there, to whom they Were sent, charged 5 per cent, for sale and guarantee; and Brown & Co. charge 2 1-2 for guaranteeing the goodness of the New York or Boston merchants. This cannot be allowed. If a commission merchant in Philadelphia to whom goods are sent for Sale, at 5 per cent, commission on sales and for guaranteeing Sales, receives more than he can sell in that market, he is not at liberty to send what he cannot sell in Philadelphia to New York, to a commission merchant there, and allow him the 6 per cent., for sale and guarantee, and charge the consignor 21-2 per cent, himself. If he were, he might, on goods sent to Philadelphia to-him for sale, after making his 5 per cent, on all that could be sold in Philadelphia, get 21-2 per cent, on all that could be sold in other markets, though commission merchants in those markets sell at 5 per cent, on sales and guarantee.

A manufacturing company would not send goods through Philadelphia to New York and Boston, and be thus subjected to-71-2 per cent., when they could send them direct to New York and Boston and have sales made and guaranteed for 5 per cent.

The manufacturer cannot be supposed to intend to send to one market more than can be sold there. The course would be, after stocking that market, for the manufacturer himself to send to other markets.

It was said in argument, that where the complainant goes for a general account and it turns out there has been a settled account,, vhe must amend, and surcharge and falsify. This supposes that an account is given by the defendants. How else can he amend, and surcharge and falsify 1 No account has been given here; and a settled account has not been pleaded, or properly set up by answer.

I do not think it safe to direct that rests shall be made at any certain periods. It may be that at the end of a year the balance against the manufacturing company is $10,000, and that in a month after, sales are made to $10,000.

It will be left to the Master to state the interest account as the nature of the account, the times of advances and the times of receipts from sales being regarded, requires.

Account ordered.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Elizabeth S. Fisher and Lucretia S. Fisher v. Gideon Quick, Jacob F. Quick and John Quick, Executors of John Quick, deceased, and others.
    F., by will, gave one-fourth of his personal estate to Q., in trust for P.’s granddaughter, M. F., a daughter of Q., to be paid to her by the said Q. as her necessities might require. The amount of the trust fund received by Q. was $2,094. Q. bought a house and lot, for $2,500, and took a deed for it to himself; and M. F. aud her family lived in it three years, with Q.’s permission, aud without paying him rent. During the time Q. expended $500 in repairing the house. After M. F. aud her family left the house, Q. expended $522 more iu repair. After the death of F., Q. sold the property for $3,000. Q. rendered a trust account based on tbe principle of charging the trust fund with the loss consequent upon the purchase of the said property.
    HM; that he was not entitled to do so.

      : that, on the death of M. P., the said trust fund belonged to her children.
    This cause was decided at the December term, 1850.
    The hill, filed March 25th, 1847, states, that Peter Prall died, March.2d, 1829, leaving a will, by which, after devising his real estate, and giving a number of specific and pecuniary legacies, he gave all the residue of his personal estate as follows : to his grandson, Peter P. Quick, one-fourth; to the three sons of his grandson, Gideon Quick, one-fourth; to his granddaughter, Fanny Wiggins, one-fourth; and the remaining fourth to his son-in-law, John P. Quick, in trust for the use, benefit and support of his granddaughter, Mary Fisher, to he paid to her by the said John P. Quick as her necessities may require; and appointed his son Abraham Prall, his son-in-law John P. Quick, and his grandson Peter P. Quick, executors.
    That John P. Quick and Peter P. Quick proved the will.
    That by the final accounts of said two executors who proved the will, allowed by the Orphans’ Court of Hunterdon, in February, 1881, a balance of personal estate, after paying debts, testamentary expenses and legacies, was found remaining in their hands, of $8,717.15 1-2.

      That said John P. Quick, on or about April 1,1830, received the fourth of said residue, $2,179.28, in trust for said Mary Fisher; and that said John did, during the life of said Mary, from time to time, pay to her small sums of money, towards her support, on account of said trust fund; but the whole of said payment did not, as the complainants have been informed and believe, amount to as much as the lawful interest of the said fund.
    That the said Mary Fisher died intestate, February 6, 1835, leaving six children, namely, Catharine M., wife of Cortenus S. Young, Peter F. Fisher, Fanny Fisher, Israel Fisher and the complainants.
    That said Fanny Fisher died, December 6th, 1843, intestate and without issue.
    That said John P. Quick died, December 29th, 1845, leaving a large real and personal estate, and leaving a will, of which he appointed his son Gideon Quick and his grandsons Jacob F. Quick and John Quick, executors, who all proved his will.
    That the complainants are informed, and believe, that the said John P. Quick, the said trustee, in his life time, and after the death of the said Mary Fisher had a settlement of some kind with the said Cortenus S. Young, in right of his said wife, Peter F. Fisher and Israel Fisher, for and on account of the shares of said trust fund to which they became entitled on the death of said Mary Fisher; but what the nature and terms of such settlement were, the complainants do not certainly know.
    The bill prays, that the said defendants the executors of John P. Quick may account for the moneys and effects which came to the hands of said John P. Quick in trust for the said Mary Fisher, under the said will of Peter Prall, deceased ; and that the defendants Cortenus S. Young and Catharine his wife, P. F. Fisher and Israel Fisher may set forth whether the said John P. Quick, in his life time, ever accounted with them or either of them ; and that said two-sixths of the clear residue of said trust fund at the death of Mary Fisher, with the interest which has since accrued thereon, may be decreed to be paid by the said executors of John P. Quick to the complainants ; and for such other and further relief &c.
    The answer of the executors of John P. Quick states, that they have always been willing to pay to the complainants the two sixths parts of the principal of said trust fund, after deducting the payments made to their mother, and which, these defendants aver, they have always heard from the said John P. Quick he intended to pay them, had he lived until they, respectively, attained twenty-one, or else to give them the same amount some other way ; and that he has so paid in full all the other children of the said Mary Fisher, deceased, who arrived at twenty-one before his decease. But not because he considered himself compelled so to do, but because the said children of the said Mary were his grandchildren, and he was willing and anxious, and always intended they should have that amount in some way, either by his will or otherwise, besides what he intended to leave them out of his other estate. But these defendants deny, that they are legally or equitably bound to pay the said two sixth parts of the said residue; and allege, that they, as well as the said John P. Quick, in his life time, were always informed, that whatever sum might remain of said bequest to him, after being applied as directed by the will of Peter Proll towards the support of the said Mary Fisher as her necessities might require, belonged to him absolutely.
    They say, that the said Mary was the wife of one Amos Fisher, who was in good health and vigorous constitution, and that, some time in 1829 and Í830, prior to the settlement of the estate of said Peter Prall, and before the said John P. Quick had received so much as $100 of the said trust fund, as appears by accounts found among his papers since his death, she and her said husband and his friends all became anxious that the said John P. Quick should apply the residue of the said trust fund which then remained towards the purchase of a certain tavern property in New Brunswick, which the said Mary and her husband wished to occupy ; urging and insisting, that the application of the said fund in this way would be more advantageous to the said Mary and her family than in any other way; that it would afford the said Amos an opportunity to apply his personal labor and attention in a profitable way towards making a support for his family; and urging, that the said property was then offered at a very low rate; and stating, that the deed therefor could be taken in the name of said J. P. Quick, which would always afford a security for the safety of the fund.
    That said J. P. Quick, at first strongly objected to said purchase, fearing that some difficulty might grow out of it, and declined making said investment, as he was getting in years, and the property lay some twenty-five miles from his residence.
    But upon the repeated solicitations of his daughter, and being urged by the friends and connections of the said Amos, as well as by the said Amos and his wife, and being desirous to gratify his daughter, he finally permitted himself to he taken, by one of the brothers of said Amos, to look at the said property, and finally, by the persuasion of his said daughter and friends, reluctantly consented to the purchase of said property with the said trust fund as aforesaid. That ho bought said property for $2,500, then considered a very low price, but being near $500 more than came to his hands of the said trust fund, after what he had then paid to the said Mary Fisher ; and took the deed in his own name, dated February 28th, 1830.
    That said property was then considerably out of repair, and required considerable expenditure to put it in order for the use of his said daughter and her husband and the family.
    That in the winter or spring of 1830, the said Amos, with his family, moved into the said tavern property, where they remained until about May 1, 1833, without accounting to said J. P. Quick for any rent.
    That, within a year after they moved into the said house, J, P. Quick paid $500 for repairs to the said property, making, in all, $1,000 more invested in said property than the amount of said trust fund.
    That, in the last year during which said Amos and his family occupied said property, as these defendants have been informed and believe, the health of the said Mary somewhat declined, and the custom fell off, the said Amos not proving himself very efficient in the prosecution of his business; and the said Mary became satisfied that it was not profitable longer to keep a public house, and determined to abandon the same, and did, with her husband and family, leave the said property about May 1,1883, when they obtained the consent of the said J. P. Quick to rent said tavern to one Huff, for $225 a year ; and that the property was rented to said Huff, at the request of said Amos Fisher and wife, by the said J. P. Quick; and they rented a smaller and less expensive tenement, to which they removed, and which they continued to occupy until the death of said Mary, as these defendants have been informed.
    That Huff failed, and ran away, early in 1834, leaving, as they have understood and believe, some part of the rent unpaid; after which the said house remained some time unoccupied, until afterwards rented by one Strong.
    /That these defendants have been informed, that said Huff never accounted to said J. P. Quick for any rent for said property, but that whatever he paid he accounted for to said Mary Fisher and her said husband, but to what amount they are not able to state. And they allege, that said J. P. Quick never received any rent for said property during the life of the said Mary; but that, after having purchased it for her benefit and at her request, he left the management of it to her and her husband so long as she lived, and permitted her to take the profits thereof.
    That they have been informed and believe, that, some time in August, or September, 1834, the said Strong rented and moved into said tavern house, and remained until it was sold, on the 1st of May, 1836, and who, after the death of said Mary, paid the rent thereof to said J. P. Quick, at the rate of $225 a year.
    They allege, that, on the 19th of June, 1835, a tornado swept over New Brunswick, whereby the said property was so much injured, that said J. P. Quick was compelled to, and did pay $522.70 for the repairs necessary to be made before the property could be sold, or in any way profitably disposed of.
    That, dui’ing the life of said Mary, she was opposed to the gale of said property, because it was renting for a sum over and above the interest on the cost of it. But, as soon as said Mary died, the said J. P. Quick was desirous to sell said property,, and offered the same, but was not able to effect a sale of it until September, 1835, when he sold it to J. D. Scough, for $8,000, the highest price he could get for it, to be paid on the 1st of May then next.
    That these defendants have been informed and believe, that, after the death of the said Mary, and after some of her children had attained twenty-one, about the 1st of March, 1841, the said J. P. Quick made a statement of his accounts as trustee as aforesaid, and which he then filed in the Surrogate’s office of' Hunterdon, which account was based on the position that said property was purchased for the benefit of the said Mary, and that whatever loss had occurred thereon was to be borne by the said trust fund; but which has since been mislaid or lost, and cannot be found. That they find among the papers of said J. P. Quick, a paper which, they are informed and believe, is a copy of the same, and which is as follows : (it is set out) : which said account is based on the principle of charging said trust fund with the loss consequent upon the purchase of said property, and of which, these defendants allege, the said J. P. Quick informed said heirs at the time of his several settlements with them, respectively, as after mentioned.
    That, after filing said account in the Surrogate’s office, the said J. P. Quick proceeded to settle with four of the children of of said Mary Fisher, who arrived at twenty-one before his death j. and after having presented them the said copy of said account, with no item of which either of them found any fault, he settled the same with each, and took their discharges in full.
    That in and by the will of the said Peter Prall it is directed, if any of his legatees should die without having received the legacy bequeathed to them, leaving heirs under twenty-one, that then his executors should place the share of such heirs at interest, and pay the same, with the interest thereon, to them as they, respectively, attained twenty-one.
    That, since the death of said J. P. Quick, and on the 11th of July, 1846, they caused the said sum of $183.2T, with the interest thereon from May, 1841, to be tendered to the guardian of Elizabeth Fisher, one of the complainants, and that he refused to accept it. The answer states, also, a tender to the said Elizabeth after she attained twenty-one, and that she refused to accept the said sum.
    They say they are informed and believe, that, shortly after the death of said Mary Fisher, the said J. P. Quick made a will, by which he bequeathed a considerable sum of money to the heirs of the said Mary Fisher on account of what remained in his hands unexpended of the said trust estate, under the impression and belief, that they had no right to call upon him to account for the same, but intending that they should, notwithstanding, have the benefit thereof; and when, therefore, afterwards, and shortly previous to the settlement with part of the heirs, in 1841, those of them who had attained twenty-one expressed Some dissatisfaction, and desired a settlement of said trust fund, and payment of their shares, the said John P. Quick, without 'objection, made the settlement and payment above stated; which they all appeared to acquiesce in, until after the death of said John P. Quick.
    They say, that, in and by the last will of the said John P. Quick, among other things, he bequeathed the sum of $2,000 to be equally divided among his said grandchildren, the children of the said Mary Fisher, in one year after his decease, as they arrived at age.
    They allege that they are informed and believe, that, shortly after the said settlement with the heirs above mentioned, in the spring of 1841, the said John P. Quick made and executed a will in which, recollecting the recent dissatisfaction of said heirs in reference to the said trust fund, he left the said sum of $2,000 to be distributed among the said children of the said Mary Fisher, upon the express condition only, that they should make no disturbance in regard to said trust fund, and that if any of them should make any difficulty in regard thereto, or attempt to recover any larger sum than appeared to be due by the said account, such children should lose the benefit of said bequest. But that, afterwards, finding they all acquiesced in said settlement for so long a time, and the principle and details of said settlement having been recognized and consented to, at so many " different periods, by four out of the six of said heirs, in their several settlements, when he came to execute his last will above mentioned, he remarked to the scrivener who prepared the said last will, that that prohibitory clause might as well be omitted, at the same time giving as a reason, that it was not now necessary, because said children were perfectly satisfied with the adjustment of said trust estate; in consequence of which, said prohibitory clause was omitted in said last will.
    That, at the time of filing the said account, the said James P. Quick had, as they have been informed and believe, receipts and vouchers for each and every charge against said trust estate contained in said account; but, believing the same to be ended, and no further question ever likely to arise concerning the same, as appeared from the acquiescence of all parties concerned, he became less careful of said vouchers, or by some means some of them have been mislaid and cannot be found by these defendants ; but which payments they hope to be able mainly to supply by parol proof.
    They insist, that by tbe terms of the bequest in said Prall’s will to James P. Quick in trust for the use, benefit and behoof of said Mary Fisher, neither the said James P. Quick, nor these defendants as his executors, are liable to pay any interest on said trust fund during the life of said Mary, even if her heirs are entitled to the surplus of said fund rem&iuir g unexpended after her death; because by said will the said trust fund vas pi ced at his discretion, to apply as he thought proper, and, besides, was contemplated constantly to remain in his hands to answer present necessities of the said Mary.
    And they further insist, if in the opinion of the Court the said heirs should he considered as entitled to any larger residue of said trust fund than appears due them by said account, that they should not he permitted to take the said legacy of 32,000, bequeathed to them by the last will of said James P. Quick, because the said bequest was made expressly upon the condition, that they should receive no larger amount out of said trust fund than appeared due by said account; or, at least, they should be decreed to surrender so much of said legacy as they may recover out of said trust fund over and above what appears due them, respectively, by said account.
    They insist, that the present is a stale claim, and ought, if at all,' to have been prosecuted during the life of said James P. Quick, and not to have been left to sleep so many years and until after his death, &c.
    The defendants Young and wife, Peter P. Fisher and Israel Fisher put in an answer, in which they say, that, after the death of said Mary Fisher, they applied to said James P. Quick, and demanded, that he should render to them an account of said trust fund, and of the payments out of the same, and pay them their respective shares of the residue. That said James P. Quick at first refused to pay anything, pretending that there was little or no surplus. That he always refused to render any account of said trust fund, and of the payments of the same.
    That, after such refusal to account or to pay, he stated to them, that he would pay them their shares if they would give him receipts in full, and assured them that $180, or thereabouts, the precise sum they do not now recollect, was the full amount of each sixth part. And these defendants, being the grandchildren of said James P. Quick, and confiding in his representations, were" induced to accept the said sum, each. And, on the receipt of that sum, they believe they gave receipts in full.
    They say, they believe they have not received all they should have received, and ask, that what may be equitable may be decreed.
    They join in the prayer of the bill, that an account may be taken; and that they may be paid their respective shares of said fund after deducting the said payment received by them, respectively.
    Testimony was taken on both sides.

      Field and Hageman

    for the complainants. They cited 19 Ves. 416; 2 Roper on Legacies, 40, 41, 342; Hill on Trustees; 377, 382, 489, 527, 577; 1 Ves. Sen. 263; 4 Ves. 483; 1 Green’s Ch. 1; 4 Wend. 449; 12 Ib. 68; 8 Beam & Roe, 397; 14 Wend. 449; 12 Ib. 68.

      W. Halsted and P. D. Vroom

    for the defendants. They cited 3 Swanst. 64; 1 Russell & Mylne, 535; 2 Roper on Leg. 37; 2 Story’s Eq. Jur. sec. 1109, 1111; 4 Harr. N. Y. Rep. 109; 1 Pick. 530; 13 Mass. 232; 18 Pick. 1, 7; 11 Ib. 371; 6 Halst. Rep, 44; 3 Mad. Rep. 396; 2 Ves. Sen. 87, 9; 16 Ves. 27; Willis on Trustees, 134, 162; 5 Mad. Rep. 425; Hill on Trustees, 485, 495; 2 Story’s Eq. Jur., page 369, 378; 3 Mylne & Kean, 411.
   The Chancellor.

The case is with the complainants. Á reference will be ordered, with instructions to charge the estate of James P. Quick with the principal of the trust fund, and with the interest thereon, and credit him with a reasonable rent for the property while it was occupied by Mary Fisher and her family; allowing all other proper credits for payments to Mary Fisher.

Order accordingly.


text:
    Wm. H. Van Wagenen and Anthony Yeoman v. Mary Hopper, et al.

    A subsequent mortgagee, whose mortgage was recorded, had notice, before taking his mortgage, of a prior unrecorded mortgage. Held, that the latter had priority.
    The person who gave both mortgages, though made a party defendant, was held competent to prove that the subsequent mortgagee had notice of the prior mortgage.
    This cause was decided at the December term, 1848.
    Bill, filed May 14,1847, by William H. Van Wagenen and Anthony Yeoman, against John Coe and others, to foreclose a mortgage, dated April 28, 1846, made by John Coe and Catharine his wife, to the complainants, on two lots in the bill discribed, one containing 73 14-100 acres, and the other, 14 37-100 acres, situated in the County of Passaic, to secure the sum of §822.87; which mortgage was acknowledged, on the day of its date, before Absalom B. Woodruff, a Master in Chancery, and was recorded the same day.
    The bill states, that, on the 2d of February, 1846, the said John Coe and wife executed a mortgage of the same premises to William J. Ackerman, to secure §2,500 ; and that Ackerman, on the 4th day of the same month of February, assigned the last mentioned mortgage to the defendant, Albert Terhune.
    That it appears by the records of the County of Passaic, that the said John Coe executed a mortgage on the same premises, or Some part thereof, dated March 2, 1846, to the defendant Mary Hopper, to secure to her the payment of §50 a year; but that the said mortgage, if executed on the day it bears date, was recorded subsequently to the execution and recording of the complainants’ said mortgage, and that the complainants, at the time of the execution of the said mortgage to them, had no notice of the existence of the said mortgage to Mary Hopper ; and that they took their said mortgage for, and gave therefor a valuable consideration.

      Mary Hopper, in her answer, admits the mortgage to Ackerman ; and also the mortgage to the complainants, and that it was recorded as stated in the hill. And states, that, on the 2d of March, 1846, the said John Coe, by a bond under his hand and seal, duly made and executed, and hearing date the said 2d of March, 1846, became bound to her in $50 to be paid to her annually during her natural life, with a condition thereunder written, that whereas the said John Coe, in consideration of said Mary Hopper releasing her right of dower in a certain lot on the South side of Passaic street, in Paterson, of which she was tenant in dower in right of her deceased husband, Andrew G. Hopper ; and for the releasing of which the said John Coe, in and by the said bond, agreed to pay her $50 every year from the date of the said bond, during her life; and for the doing of which the said John did covenant, promise and agree to pay her the said sum of $50 yearly and every year during her life, and at the end of each every year from the date of the said bond. And she further says, that the said John Coe, in order to secure the payment of the said bond, on the said 2d day of March, 1846, made and executed to her a certain mortgage, conditioned for the payment of the said sum of $50, to be paid to her yearly, and every year, and which said first year expired on the 2d day of March, 1841. And that the said John Coe, in and by the said mortgage, did grant, bargain, &c., to her, her heirs and assigns, all those lots, situate, &c., particularly described in the complainant’s bill, and in the mortgage of the said Albert Terhune. And that the said mortgage was upon the condition that if the said John Coe, his executors, See., should pay her the said sum of $50 yearly, according to the condition of the said bond, then, &c.
    That the said indenture of mortgage was duly acknowledged on the 2d of March, 1846, before B. W. Vandervoort, Master in Chancery.
    That John Coe, the mortgagor, married her daughter; and that she, being a plain woman, did not immediately after taking said mortgage suppose it was necessary to have it recorded; and reposing at that time full confidence in him, and supposing at 3hat time that he would not be disposed to take any undue adTantage of her, his mother- in-law; but that she has good grounds to believe, and therefore charges, that the complainants had knowledge that the said John had given to her the said mortgage to secure her as aforesaid.
    The answer of Albert Terhune sets forth the mortgage given to Ackerman and assigned to him.
    Replications were filed.
    A decree fro confesso was taken against Coe and his wife, they having put in no answer.
    In December, 1847, an order was taken on the part of Mary Hopper, in the usual form, for the examination of the defendant John Coe, as a witness for the defendant Mary Hopper, saving all just exceptions on her allegation that he was a material witness for the said Mary Hopper, and was not interested in the matters in question in the cause.
    The examination of John Coe was objected to before the Master, on the ground that he is a defendant in the cause; and ©n the ground that he is interested in favor of said Mary Hopper.
    Being sworn before the Master, and being shown the mortgage to Mary Hopper, he says he cannot state positively whether he signed the same or not, but says that he gave her a mortgage for #50 a year, but does not know whether this mortgage shown to him is the one ; nor does he recollect the date of it; and he believes he gave her a bond at the same time. He cannot tell at what time he gave a mortgage to the complainants, but that he gave it subsequent to the execution of the mortgage to Mary Hopper. He says he had conversation with Van Wagenen, one ©f the complainants, the last of April or 1st of May, 1846, or thereabouts, That at that conversation, he told Van Wagenen that he had a house and lot in Passaic street, Paterson, which he Wanted the complainants to take and release him from his liability to them, which Van Wagenen refused, on the ground that he did not want the property, but wanted the money. That Van Wagenen then asked him, whether he had any other property with which he could secure him. Witness told him ho had no other property except Iris farm. Van Wagenen then asked him what he gave for it, and witness told him. Van Wagenen then asked how much incumbrance there was on it. Witness told him that when he bought he gave Albert Terhune a mortgage on it for $2,500. Witness also told him he had given his mother-in-law, Mary Hopper, a mortgage on it for the payment of $50 a year. Van Wagenen then asked what ho had given her that mortgage for. Witness told him that he had bought her husband’s property at Administrator’s sale, and thought he had it clear; he thought so then and thinks so yet. Witness gave her this mortgage because she released her right of dower to the last mentioned property. Witness says, that Andrew Hopper was the name of her husband, and that the Administrators who made the said sale were William G. Hopper and the defendant Mary Hopper. Witness says, that the said Administrators, at the said Administrator’s sale, guaranteed the said property free of all incumbrance, except to the amount of $650. At the same conversation Van Wagenen asked witness, whether the mortgages he had given were on record. Witness told him he did not know. Th# above conversation took place in the morning. Van Wagenen came up in the 8 o’clock car, and he and witness talked until about 2 o’clock. Witness had a further conversation with Van Wagenen in the after part of the day. He wanted witness to give him a mortgage for the whole amount witness owed them; that he was satisfied to take it. At this conversationVan Wagenen asked witness no further questions about the Mary Hopper mortgage. At this time witness and Van Wagenen agreed on the terms of payment. After this, on the same day or day after, Van Wagenen had a mortgage drawn up, and witness executed it; at which time Van Wagenen and A. B. Woodruff came to witness’s house. The mortgage was read over, and Terhune’s mortgage was mentioned in said Van Wagenen’s mortgage ; the other, to Mary Hopper, was not. Witness told them, he would not sign it unless they were both mentioned iu it; so that there could be no trouble about it. Van Wagenen then showed witness a piece of paper to show that there was nothing on the property but Terhune’s mortgage; that he (Van Wagenen) had been to the records, and that there was nothing on it hut the Terhune mortgage. Witness then told him that he wanted him (Van Wagenen) to give to witness a piece of paper to show that the mortgage of Mary Hopper was given, or that else he might have trouble about it. Van Wagenen did not say anything in answer to this. MsWoodruff said that it would be an irregular way of doing business ; unless witness signed the mortgage of his own free will it would be good for nothing. Witness and his wife signed it, and it ended there. He says that the mortgage given to the complainants and the one to Mai’y Hopper are on the same property. Being asked whether he did not state, distinctly, to Mr„ Van Wagenen, at different times before the execution of the complainant’s mortgage, that he had given the said mortgage to Mary Hopper, he says he did; that he remembers twice of telling Mr. Van Wagenen.

      Cross-examined. At the first of said conversations with. Van, Wagenen no one was by when he told him about the Mary Hopper mortgage. He recollects distinctly that he told Van Wagenen that he had given Mary Hopper a 'bond and mortgage. At this time when he told Van Wagenen this, he and Van Wagenen were in the yard back of A. B. Woodruff’s office. This was the first time witness spoke to him about Mary Hopper’s and the Terhune mortgage. This was the first time witness spoke to him about the Mary Hopper mortgage. Van Wagenen then asked witness, there, if witness had no other property. Witness told him he had none hut his farm. After this couversation he said nothing to Van Wagenen, nor Van Wagenen to him, until the time when the complainant’s mortgage was executed, at witness’s house, about the Mary Hopper mortgage. He does not r,emember that he stated at his house anything more about the Mary Hopper mortgage than he has already stated. When Van Wagonon and he agreed upon tho terms of payment they were in she yard back of Mr. Woodruff’s office; and after dinner Van, Wagenen said he would take tho mortgage. There was no one fey then. There was no one by at any time when he told Van Wagenen about the Mary Hopper mortgage, except at the execution of tho complainant’s mortgage. There was no ono present at the execution of the complainant’s mortgage, when ho spoke to Van Wagenen about the Mary Hopper mortgage, but A. B. Woodruff. Pie has not told any person that the timo ho told Van Wagenen about tho Mary Hopper mortgage was at tho execution of tho complainant’s mortgage, at his house. Tho complainant’s counsel asked him this question. Did you not toll xae (A. B. Woodruff) that the time you told Van Wagenen about tho Mary Hopper mortgage was at the execution of tho complainant’s mortgage at your house, and that your mother-in-law and hor two sons were in the next room and heard you tell him 1 Ho answers no ; and says that he docs not recollect any such conversation ; that he never stated anything like it to A. B. Woodruff or any body else. That he does not recollect of asking A. B. Woodruff what would be the effect if Mary Hopper should prove that complainants had notice of her mortgage at the time they took their’s. That he never told A. B. Woodruff, or any other person, that Mary Hopper could prove that the complainants had notice of hor mortgage at the time they took their’s, for that her two sons heard him tell Van Wagenen. At the time complainant’s mortgage was executed, the property in Passaic street, which he offered to sell to complainants for what he owed them, was worth fully what he owed them, over incumbrances. At the time he gave the Mary Hopper mortgage there was another mortgage given up by her to him, on property on the corner of Patorson and Van Houton streets. This mortgage so given up by her to him was the whole consideration for the present mortgage to Mary Hopper.

      Benjamin W. Vandervoort,
    sworn on the part of Mary Hopper, says he is a witness to the bond and mortgage of Mary Hopper; and that he believes they were executed on the day and year of their date; and that the mortgage was acknowledged before him, as a Master in Chancery. (The acknowledgment of this mortgage is dated March 2, 1846.)

      Absalom B. Woodruff,

    sworn for the complainants, says, that, previous to the December term, 1845, of the Passaic Circuit Court, there were three notes in his hands for collection, payable to the complainants, made by John Coe. Two of them became due before or during that term. Two suits were commenced on these; one on each; returnable to said term. A summons was issued on the 3d note, returnable to March term, 1846. Interlocutory judgments were taken in the first two suits at the March term, 1846. Some time that spring, and previous to the giving of the complainant’s mortgage, Coe went to New York, as witness was afterwards informed by Coe and Van Wagenen. After his return from New York, Van Wagenen came to Paterson to make some arrangement of the suits in Court; and he and Cóe came to witness’s office, and were there an hour or two; during which time various propositions for arranging the suits were made and discussed. Finally it was agreed between them, that Coe should give and complainants receive a mortgage on the farm on which Coe then lived, to secure the payment of the said three notes and the costs of the three suits. That mortgage was taken by the complainants by the advice of witness, who thought it a better security than any other that Coe had offered; in which opinion Van Wagenen agreed with witness. While Coe and Van Wagenen were talking of the time at which the money to be secured by the mortgage should be made payable, a person came into witness’s office. Coe wanted eight years to pay the money; which Van Wagenen was unwilling to give. The person coming in while the parties were discussing this matter, and Coe having expressed a wish that the transaction should be kept private, he and Van Wagenen went out into the yard in the rear of deponent’s office. They were there but a very few minutes and came in, the person who had been with witness having gone out; and when they came in, witness thinks they had agreed definitely on the time of payment as stated in the mortgage. -Previous to executing the mortgage witness went to the office of the Clerk of Passaic and searched the records, and found no imcumbrance of any kind on Coe’s farm, of record, except a mortgage to W. I. Ackerman, which witness thinks was then on record. Witness thinks there were some old uncanceled mortgages, which he presumes were paid; hut they were all dated prior to the conveyance to Coe. Ackerman conveyed the property to Coe by deed dated February 2d, 1846, with covenants of warranty against incumbrances. Witness supposed Ackerman able to make his covenants good. The consideration money in the deed from Ackerman to Coe is #3,900; which is the price Coe said he paid Ackerman for the property. Van Wagenen and witness thought the property would bring sufficient to pay Ackerman and the debt of the complainant. The complainants paid witness the costs of the three suits, and took a bond and mortgage to secure the payment of the amount of the three notes and these costs. The complainant’s bond was signed by Coe in witness’s presence; and he, at the same time, signed his name as a witness thereto; also a mortgage, of the same date, between the same parties, given to secure the moneys mentioned in the said bond. Coe signed the mortgage first. He signed it without asking or ascertaining the items which made up the amorrnt therein mentioned. After the mortgage was signed by Coe witness asked him where his wife was, and told him she must sign it too. Coe said she was in the kitchen. Witness rose to go to the kitchen door to ask her to come in. Coe said, “ Don’t you go, the old "woman (meaning Mrs. Mary Hopper) is there, and she’ll be as mad as thunder if she finds out this.” Coe himself went to the door and his wife came and signed the mortgage. When witness proceeded to take the acknowledgment of the mortgage, and asked Coe whether he signed, sealed and delivered it as his voluntary act and deed, Coe answered that he did not; that he would not have done it if it had not been for the suits. Witness said, that is no regular way of doing business, he could not take such an acknowledgment as that, and told him that unless he signed it as his voluntary act and deed it was no mortgage, and the complainants could not take it. Coe then made the acknowledgment in the form certified on the mortgage; as did his wife also. The mortgage was executed and acknowledged at Coe’s house. The writing on the margin of the second page of the mortgage was not done until after witness and Van Wagenen got to Coe’s house on the day of the signing.
    Previous to the examination of John Coe in this suit, he saw witness on the piazza of Congress Hali, and asked witness what would he the effect if Mary Hopper could prove that Van Wagenen & Yeoman had notice of her mortgage at the time they took their mortgage. Witness told him she could not prove it. That they had no notice of it. He said they had such notice, and she (Mrs. Hopper) could prove it; that he, Coe, gave Van Wagenen notice. Witness asked either when or where he gave him notice. Coe answered that he told him at his, Coe’s house, at the time the mortgage was given to the complainants. Witness replied to Coe that he did not do any such thing. Coe replied, “ Well, she can prove it, for she and her two sons were in the next room and heard me tell him.” Witness answered, a Well, then she can prove a lie, that is all I have to say.” Coe replied, that she should not get any of her mortgage if he could help it.

      Cross-examined. He is solicitor of the complainants in this suit. The complainant Yeoman was not present and took no part, personally, in the transaction when the mortgage was given. The conversation in witness’s office between Coe and Van Wagenen was in the forenoon of the day of the date of the mortgage. Witness cannot specify the exact time Coe and Van Wagenen were in the yard in rear of his office on that day; but thinks it was a short time; not many minutes. Can’t say whether they were there ten, fifteen or twenty minutes. His impression is that all matters were arranged before they went out into the yard, except the time of payment. Witness did not, during this transaction, state to the parties that he was acting in the matter for both; though he may have said he would do nothing but what was right between them. Witness is not certain as to the time, but thinks it was four to six weeks before Coe’s examination in this suit, that the conversation on the piazza of Congress Hall took place. This was not the first witness had heard, that Mary Hopper claimed priority over the complainant’s mortgage. Thinks she had prior to that time filed her answer in this suit, and that the first knowledge he had of it was derived from the answer.
    Witness’s impression is, that, at the time of the execution of complainant’s mortgage at Coo’s house, he said he had promised to give Mrs. Hopper a mortgage; and it is his impression that Coe gave that as a reason why she would be angry if she knew of the giving of complainant’s mortgage. If this was said at that time, it was only in connection with Coe’s remark that she would be angry. Witness is not positive he gave any reason; and does not know but that he, witness, derived that impression from the remark itself that she would ho angry. Witness does not remember that Coe said ho would not execute complainant’s mortgage unless it was stated in it that he had given a mortgage to Mrs. Hopper. Does not remember saying to Coe that ho hurried down to the Clerk’s office to got complainant’s mortgage on record before Mrs. Hopper could get her’s there; don’t think he could have said any such thing as that. Witness recollects that they hurried to the office under an apprehension that there might be somebody in the kitchen prepared to execute a mortgage and hurry it on record before the complainant’s mortgage. Witness had this suspicion because Coe stopped him when he started to call Mrs. Coe. Witness does not know that there was a quarrel between Coe and Mrs. Hopper. Coe has talked with witness as if he was angry with her. Complainant’s mortgage was executed in a room which, as witness supposed, joined the kitchen.. Don’t remember whether they entered this room through the kitchen; it may bo that they did. Witness has no recollection of anything besides what is here stated, that took place that day, that can have any bearing on the matters in controversy in this suit. He can’t state positively, hut thinks, that when they left Coe’s house that day they did not go out through the kitekon.
    In addition to the circumstance of Coe’s stopping him when he started to call Mrs. Coe, witness’s suspicions were excited by the circumstance of Coe’s signing the mortgage without inquiring into the particulars which made up the amount. At the time of entering Coe’s house witness does not recollect that any bill of particulars was handed to Coe by Van Wagenen; though there might have been. If there were any, does not think it had all the particulars in it.
    Depositions impeaching, and in support of John Coe’s character for truth and veracity were read.

      A. B. Woodruff,

    at a subsequent day, (about three weeks after his first examination,) and after all the other testimony had been taken, offering to testify further in the matter, in explanation of a statement made in his former examination, says: that by stating in his former cross-examination, that at the time of entering Coe’s house he, the witness, did not recollect that any bill of particulars was handed to Coe by Van Wagenen, though there might have been such a bill of particulars handed to Coe and the circumstances not recollected by him, the witness. Witness thinks, if such statement had been handed to Coe, he would have seen it; for witness and Van Wagenen were together during the whole time they were at Coe’s house. At the time the mortgage was executed, Van Wagenen sat at one end of the table and witness at the other.

      A. B. Woodruff and A. S. Pennington

    for the complainants.

      B. W. Vandervoort and W. Pennington

    for the defendants.
   The Chancellor.

The question involved is a single question of fact, whether the complainants, when they took their mortgage, had notice that Coe had given a prior mortgage to the defendant Mary Hopper.

That Coe had given Mrs. Hopper a prior mortgage is proved by the production of that mortgage and the testimony of the subscribing witness to it, who, being a Master in Chancery, also took the acknowledgment of the execution of it. This mortgage and the acknowledgment are dated March 2d, 1846. The mortgage to the complainants is dated April 23d, 1846. The question is, had the complainant’s notice of this prior mortgage when they took theirs ?

John Coe, the man who gave both these mortgages, and who is, clearly, as I apprehend, a competent witness for the purpose, testifies distinctly that he informed Van Wagenen, one of the complainants, before ho executed the complainant’s mortgage, that he had given a mortgage on the same premises to Mrs. Hopper. An effort has been made, on the part of the complainants, to overcome this testimony by calling witnesses to impeach the character of Coe for truth. I do not think it necessary to examine particularly the nature and amount of the testimony produced by the respective parties against and in support of Coe’s character for truth. I will only say that, in view of the testimony in support of his veracity, I think it would be going very far to deny to the party whose rights depend on his evidence the benefit of it upon testimony of the nature of the impeaching testimony offered in this case.

But I think the cause may be satisfactorily decided by a careful examination and comparison of the testimony of Coe, on the part of Mrs. Hopper, and the testimony of A. B. Woodruff, on the part of the complainants.

Coe testifies, that, in the morning of the day on which the mortgage to the complainants was given, he told Van Wagenen he had a house and lot in Passaic street, Paterson, which he wanted the complainant to take, and release him from his liability to them; which Van Wagenen declined. That Van Wagenen then asked him whether he had any other property with which to secure him. That he answered, no other except his farm. That Van Wagenen then asked him how much he gave for it, and he told him. That Van Wagenen then asked him how much it was incumbered for, and witness told him he had given a mortgage on it to Terhune, from whom he bought it, for $2,500, and a mortgage to Mrs. Hopper for the payment of $50 a year. That Van Wagenen asked him whether the mortgages he had given were recorded, and that he told Van Wagenen he did not know. That he had a further conversation with Van Wagenen in the after part of the day. Van Wagenen wanted him to give a mortgage for the whole amount he owed the complainants i that he was satisfied to take it. After this. Van Wagenen had a mortgage drawn up; and Van Wagenen and A. B. Woodruff came to his house. That the mortgage was read over, and the Terhune mortgage was mentioned in it, but the mortgage to Mrs. Hopper was not. That he told them he would not sign .it unless they were both mentioned in it. That Van Wagenen then showed him a paper, to show that there was nothing on record but the Terhune mortgage. That he then told Van Wagenen, that he-wanted Van Wagenen to give him a paper to show that the Mary Hopper mortgage was given, or he might have trouble about it. That Van Wagenen said nothing in answer to this. That Woodruff said it would be an irregular way of doing business $ unless he signed the mortgage of his own free will it would be good for nothing. That the mortgage was signed and it ended there.

Mr. Woodruff, examined for the complainants, says, he went with Van Wagenen to Coe’s house, and was with them there during all the time until the mortgage was executed. He says nothing in contradiction of Coe’s statement as to what passed there in reference to the Mary Hopper mortgage. This is certainly remarkable if nothing was said by Coe showing that he had tgiven a mortgage to Mrs. Hopper. And further, Mr. Woodruff nowhere says in his testimony, that he had no notice of the mortgage to Mary Hopper. If he had no knowledge or notice of it, I cannot imagine that he would have failed to say so. This, in view of the testimony of Coe, is, I think, conclusive. Woodruff was acting for the conplainants; and if he had notice it was notice to them. The same reasoning proves that there is no good reason for doubting Coe’s statement that Van Wagenen had notice. It was certainly in the power of Mr. Woodruff,'if nothing passed in reference to the Mary Hopper mortgage while he and Van Wagenen were at Coe’s house, to have given a full and direct contradiction to Coe’s statements. His failure to contradict them, and his failure to say that he had no notice, decides the question, clearly, for the defendant Mary Hopper. Her mortgage is entitled to priority over that of the complainants.

Decree accordingly.


author: Green, C. J.

text:
    Peter M. Ryerson, appellant, and James Boorman and others, respondents.
    The facts of the case, and the decree of the Chancellor, are reported ante page 66.

      W. Pennington and P. D. Vroom for the appellant.

      F. T. Frelinghuysen for the respondents.
   Green, C. J.

Ryerson (the appellant) being indebted to the respondents, (Boorman & Johnston) upon two mortgages for f>22,500 of principal, at July term, 1844, the respondents filed a bill in the Court of Chancery to foreclose their mortgage, Ryerson appeared to the suit, and at October term, 1844, filed a general demurrer to the bill. At January term, 1845, the demurrer was overruled, and the defendant ordered to answer in forty days. No answer was filed, and on the 2d of April, 1845, a decree pro confesso was taken against the defendant, and at the same term a final decree was made in favor of the mortgagees for $27,727.24, the amount of principal and interest due on the mortgage. An execution for the sale of the mortgaged premises was issued upon the decree, and on the 15th of October, 1847, ■She mortgaged premises were sold, and purchased by the agent ®f the mortgagees for the sum of $15,000. On the 28th of October, 1847, thirteen days after the sale, the bill in the present sanse was filed by Ryerson, the mortgagor. It was filed with a iouble object.

1. To avoid the sheriff’s sale as having been irregularly made.
2. To be relieved against -the decree in the foreclosure suit.
By an order bearing date on the 21st of June, 1848, the Chan-

®ellor set the sale aside, and directed a re-sale of the premises. From this order there is no appeal. Upon a re-argument, the Chancellor, by an order, bearing date on the 27th of October, 1848, decided that the decree in the foreclosure suit was a valid and subsisting decree, and that the complainant Ryerson was 33©t entitled to be relieved against it. From this decree Ryers©n has appealed to this Court. He contends that the decree is €iToneous, and-he seeks by his bill to impeach the decree in:the foreclosure suit upon two distinct grounds, viz:

I. That the original decree was erroneous, and was obtained % surprise. •'

II. That by virtue of arrangements since made between the parties, the complainant is entitled to be relieved from the payment of a part of the decree, and to an extension of the timé for payment.

The bill charges, that the bond and mortgage upon which the decree of foreclosure rests were invalid, and that the decree was taken pending negotiations between the parties-for a compromise, is-consequence of which the defendant was deprived,of his defence. This ground of complaint is effectually removed by the' answer of the defendants, which is clear, direct, and unequivocal ia reply to'the charge, and is not. insisted on before the Court.

. There is therefore, no question but that the decree of fore-. ®fefeure of April, -1844, was properly taken, and for a sum justly due. The only question in the cause is, has any agreement since been made between the parties, by virtue of which Ryerson is released from the operation of the decree, or the complainant’s rights under it in any wise impaired.

The case stands before the Court upon bill and answer, with the accompanying documents. The statements of an answer are to be taken as true, unless contradicted by evidence. There is really no controversy as to the facts.

The bill charges that negotiations for a compromise commenced prior to the date of the decree of foreclosure. By the answer it appears that, on the 25th of March, 1845, within ten days before the signing of the decree, Ryerson applied to Boorman for a compromise, on the sole ground of his inability to pay the whole debt. Boorman proposed that if Ryerson would immediately pay the interest in arrear from February* 1844, and the costs then accrued, he (Boorman) would instruct his solicitor to take a decree for $20,000, and would extend the time of payment five years. Ryerson however, paid nothing; no- instructions were given to the solicitor, and the decree was taken, for the' full amount of the mortgage debt.

On the 12th of September following, the mortgaged premises being then advertised for sale undor the decree, upon the 6th of October, Ryerson made new propositions for the payment of the mortgage debt, to which Boorman acceded. No contract however was made between the parties, but Boorman writes to his solicitor stating the terms, and authorizing the solicitor, upon certain- conditions, to enter into a stipulation with Ryerson upon the terms proposed. One of the conditions was, that §1,100 of the debt, besides costs, counsel fees and insurance should be paid by Ryerson, and the arrangement completed on or before 1st of October, within twenty days from the date of the instructions. The money or any part of it was not paid as proposed, and the authority of the solicitor to enter into the stipulation was determined. On or about the 5th of January, 1846, Ryerson paid to the solicitor, costs, counsel fees and insurance money, besides $1,100 upon the debt. The solicitor having no authority to accept it upon the proposal of the 12th of September, and no authority to enter into any stipulation under his instructions of that date, apprized his principals of what had been done. Boorjñan thereupon, under date of 5th of January, 1846, wrote to his solicitor as follows :

, “ We have examined the statement left with us this morning of this date signed by you, of moneys paid you by P. M. Ryerson. Applying the payment of $500 therein stated as 1 on account of Principal’ to the payment of interest on $20,000 from the 1st of August last to 1st inst., (which produces the same moneyed result) we are content that on remitting to us the $446.05 in your hands, that you enter into the stipulation authorized in our respects of 12th of September last.
“This will conform to the spirit of the previous arrangements, and meet Mr. Ryerson’s request for some extension of the proposed payments now stand thus: $20.000 principal, payable as follows: $1,000 1st of July, 1846; $1,000 1st of January, 1847; $1,000 1st of July, 1847; $500 1st of January, 1848; $5001st of July, 1848; $5001st of January, 1849; $5001st of July, 1849; balance on 1st of July, 1850. Interest on the unpaid principal to be paid semi-annually on the 1st of July and 1st of January, each year.”

He makes no agreement, but simply modifying the terms, he authorized the solicitor to enter into the stipulation of 12th of .September last. No stipulation was in fact signed by the attorney, and no other agreement was made. The case stands upon the instructions given by Boorman to his solicitor on the 12th of September. Waiving all questions as to the validity and binding operation of those instructions as an agreement, I propose to consider the answer as if the attorney had actually signed an agreement pursuant to his stipulations, and that the agreement .was founded on a valid consideration.

What contract was the solicitor authorized to make ? I quote its language. “These payments being made, we are willing that you shall as our attorney, enter into a stipulation for us that on the payment as follows, of the further sum of $19,500, with interest semi-annually from the 1st of August last till paid, we will discharge him and release the property mortgaged to us.”' The periods for payments are then stated, and as modified stand thus : $1,000 1st of July, 1846; $1,000 1st of January, 1847; $1,000 1st of July, 1847; $500 1st of January, 1848; $500 1st of July, 1848; $500 1st of January, 1849; $500 1st of July, 1849; and the balance on the 1st of July, 1850.

This stipulation is to be given with a reservation of all due rights under the mortgage and decree of sale, provided the stipulated payments of interest and on account of principal are not regularly made to us in the city of New York.”

Now what was the agreement which the attorney was authorized to make? To reduce the decree to $20,000? To give Ryerson $8,000? No such thing. It was simply this : on the payment of $20,000 by instalments on certain specified days, we will discharge him and release the premises mortgaged to us.” The creditor, having a bona fide debt of record of nearly $28,000, agrees with the debtor, if you will pay $20,000 on certain days with interest, we will, after the last payment is made, release the balance. Language can scarcely be plainer. And yet, as if to guard against the possibility of any misconstruction, it is added: “ This stipulation is to be given with a reservation of all due rights under the mortgage and decree, unless the payments of principal and interest are promptly made at the time specified.”

“ .Dwe” means that which law or justice requires to be done. Due rights means just rights, legal rights. The plain meaning of the clause is, that if the payments are not made as stipulated, the decree is to stand in full force, and all the rights under it to remain unimpaired, and the whole mortgage debt, as secured by the decree, to remain due and payable.

This is the extent of the agreement.

Now it is admitted that Ryerson has not paid $1 in pursuance of his contract, and yet he insists that his debt is reduced to $20,000. The proposition can scarcely be treated with the gravity becoming a judicial tribunal. It admits of no argument. It is without foundation, or even a plausible pretext to support it.

The complainant has a decree and execution in his favor for nearly $28,000, admitted to be a just debt. He says to his debtor, if you will, pay me $20,000, by instalments with interest punctually, I will give you five years to. pay tbe debt, will accept $20,000 as satisfaction, and release you from tbe balance of tbe claim. But if you do not pay punctually, my rights under the decree remain unimpaired; I shall insist upon the whole debt. The debtor never pays $1, never performs a- tittle of the contract on his part, and then gravely asks a Court of Equity to compel the creditor to perform his offer. It is insisted that the contract must be treated as if it was included in the mortgage. Now suppose that it was. Suppose that these very conditions had been originally incorporated into the bond and mortgage. The debtor acknowledges himself to owe, and binds himself to pay $27,000 on a day specified, but in case the obligor pays $20^000 by instalments, with interest, by that day, it will be accepted: in full, but if any instalment be not paid, the whole shall be due and payable. On a suit upon such bond, if the defendant had never paid $1, could he set up as a defence, that he only owed $20,000? Or suppose a bond is given for $27,000j with interest at sis per cent., but if interest be paid promptly on the’day-appointed, five per cent, will be accepted in satisfaction. Can the-- debtor ask a Court of Equity to compel the creditor to accept five per cent., though the- interest was not paid according to the contract? This result is not penal in its character. The entire debt is justly due. It is a debt of record. The creditor agrees upon certain conditions to release a part of the debt. ■ In so doing, he had a right to impose his own terms. The terms are not complied with, and the creditor is under no obligation in law or equity to release any part of his claim.

The decree of the Chancellor is right, and should be affirmed with costs.

The Court concurred in this opinion, Wall and Schenck, Judges-, dissenting.

Decree affirmed.