Boyd v. Vanderkemp

The Chancellor. The decree in this case was unquestionably erroneous, not only as to the defendant Schermerhorn, upon the pleadings and proofs, but also as to the other defendants ; even upon the facts stated in the bill, which was taken as confessed as to them. The answer of Schermerhorn admitted that he purchased after he had been informed, through his agent, of the complainant’s claim. If the vice chancellor, therefore, considered the allegations proved, he should, instead of de — 287 — creeing a compensation in damages to the complainant, have decreed a specific performance of the contract by Schermerhorn, in whom the title to the land was then vested; so as to give the complainant the land itself, with the improvements, if any, which he had made thereon, upon his paying the contract price, with the interest thereon, according to the terms of the all eged contract made with Wood.. And in that case also, it might have been proper to decree costs against the defendants Schermerhorn and Vanderkemp. The complainant, however, was not entitled to any decree whatever against Evans, who was improperly made a defendant; even upon the complainant’s own showing. The bill does not allege that Evans had any interest in the controversy; or that he had done any act whatever, as agent, which was fraudulent or inequitable ; or that he even knew of the agreement alleged to have been made by Wood, as the sub-agent, until after the premises in question, with other lands belonging to Vanderkemp, his principal, had been conveyed to the defendant Schermerhorn. Upon the bill taken as confessed, it must be taken to be true, as stated therein, that Wood was a sub-agent, duly employed under Evans as the general agent of Vanderkemp. If so, Evans is not responsible for the non-performance of a contract made by the sub-agent, and of which he was ignorant; although Vanderkemp, the principal, is in law chargeable with notice of the contract, duly made by his sub-agent whom his general agent had authority to appoint and had so appointed. The bill, therefore, did not entitle thé complainant to any relief against Evans, nor even to a decree for costs against him; although Evans had suffered such bill to be taken as confessed for want of an answer. As an answer on oath was waived, the defendants Vanderkemp and Evans probably supposed the solicitor for Schermerhorn could put in an answer for them, and make a defence for all, as he had agreed to do. Their solicitor, therefore, took no notice of the papers, which appear to have been regularly served upon him, from time to time, down to the 10th of May, 1839, when he waived the service of any other papers in the cause upon him. By relying upon Schermerhorn, to put in an answer for them as well as for himself, and neglecting to have — 288 — his solicitor substituted in place of Chandler, they have remained in ignorance of the proceedings in the cause, and have lost the opportunity of denying the authority of Wood to make the alleged agreement as sub-agent. They have also lost the right of appealing from the erroneous decree of the vice chancellor. The decree of the 25th of April, 1839, being a final decree in the cause, the time for appealing therefrom is limited, by the statute, to six months from the time of the entry of such decree. (1R. S. 178, § 65.) The rules of the court prohibit a vice chancellor from granting a rehearing, unless it is applied for within six months after the entry of the decree, and before the same has been enrolled. And a bill of review must be brought within the time allowed by law for appealing from the decree. (Thomas v. Harvie, 10 Wheat. Rep. 146. Welf. Eq. PI. 231. Rule 173.) It is also too late for these two defendants to be let in to answer a bill which had. been regularly taken as confessed nine years since: and after a regular decree has been made against them on such bill, and upon pleadings and proofs as to their co-defendant. Nor would reinstating the appeal of Schermerhorn probably aid them, as they had not joined in that appeal ; and the decree, as to them, is therefore final and conclusive. The defendant Schermerhorn has himself no equitable claim to have the appeal reinstated, after his counsel have consented to have it dismissed, and the costs of such dismissal have been paid; especially as his discharge under the bankrupt act is a bar to any claims against him upon this personal decree. And his assignee in bankruptcy may be a- necessary party to the proceedings, if the decree is to be modified so as to make it a decree for a specific performance of the contract to convey the land itself. The proceedings before the master were regular, although the order dismissing the appeal had not been actually entered. For the appeal bond was only for costs, and did not therefore stay the proceedings upon a final decree. The execution, however, was irregular: not only because it was made returnable on the sabbath, but also because it was issued' against Schermerhorn, who had been discharged under the bankrupt act; as well as against the' other defendants who were still liable upon the final decree of — 289 — April, 1839. In Gould v. Spencer, (5 Paige’s Rep. 541,) this court decided that it was irregular to make any process returnable on the sabbath. That, however, is a mere technical objection ; and, in an ordinary case, the court would permit an amendment of the process, to promote the purposes of justice. In regard to Schermerhorn, however, the execution is erroneous in substance. For his discharge under the bankrupt act was a bar to the recovery of the damages recoverable under the decree, although the amount of such damages was unliquidated at the time of his discharge. By the decree of the vice chancellor the amount of damages, which the complainant was decreed to be entitled to in consequence of the non-performance of the alleged agreement made by Wood with him, became a present debt; payable when the amount thereof should be liquidated by the master. It was therefore a debt which was provable against Schermerhorn’s estate, under the provisions of the bankrupt law of 1841. Under the English bankrupt laws, previous to May, 1825, debts depending upon a contingency, except such as arose upon bottomry or respondentia bonds or upon policies of insurance, which were provided for as early as the 19th of George the 2d, could not be proved under a commission in bankruptcy taken out before the happening of the contingency upon which the debt was payable. (Cooke’s Bank. Law, 141.) There was also a class of debts, for uncertain and unliquidated damages, arising upon contracts, which could not be proved under a commission taken out before the amounts of such debts were ascertained. (1 Deac. Law of Bank. 280.) The 56th section of the act of May, 1825, to amend the laws relative to bankrupts, covered all cases of mere contingent debts. But the case of uncertain debts arising from breaches of contracts, where the amount of damages was unascertained, and could not be computed so as to be sworn to as debts, were left still unprovided for. (See Henley’s Bank. Law, 132.) The 5th section of the United States bankruptcy law of 1841, however, provides in express terms, that all creditors whose debts are not due and payable until a future day; all annuitants, holders of bottomry and respondentia bonds, holders of policies of insurance, sureties, — 290 — endorsers, bail, or other persons having uncertain or contingent demands against the bankrupt, shall be permitted to come in and prove such debts or claims under the act. And the preceding section makes the certificate a full and complete discharge, of all debts which are thus provable; with the exceptions in the cases of fraud, misconduct, or misapplication of trust funds in that section mentioned. The execution must therefore be set aside as irregular, against all of the defendants, and as wholly unauthorized as to one of them. But neither of such defendants is to be permitted to bring an action against the complainant, or his solicitor, for any thing done under such execution. The petitioners are also entitled to relief in relation to the amount of damages reported due by the master. It is evident, from the affidavits and testimony before me, that the estimate of the value of the property, made by some of the witnesses upon the reference, was exaggerated and extravagant. The report also shows that the master must have adopted an erroneous rule of damages; as he has included therein an allowance, to the complainant, for the rent of the premises, down to the date of his report, in 1845. All that the complainant was entitled to recover, as damages for the non-performance of the alleged agreement, was the value of the premises and improvements thereon at the time of filing his bill, on the 7th of January, 1833, when he alleges he was in possession; after deducting therefrom the purchase money agreed to be paid, but which had not in fact been paid, together with the interest on such purchase money up to that time according to the terms of the agreement. And upon the amount of damages thus ascertained, the master should compute interest from the 7th of January, 1833, up to the date of liis report. The report of the master and all subsequent proceedings thereon must therefore be set aside, and the enrolment of the decree must be discharged. It must be referred back to the master to review his report, and to take such further testimony as either of the parties shall think proper to produce before him. And he must be directed to ascertain the damages upon the — 291 — principles above stated. The complainant is to have the benefit of the testimony which was taken before the master when the case was previously before him; but with liberty to the defendants to compel the attendance of the witnesses who were then examined, and to cross-examine them, if the defendants shall be able to procure such attendance upon subpoena, or otherwise. And the order to be entered hereon must further direct, that upon the coming in and confirmation of the report of the master, the complainant have execution against the defendants Evans and Vanderkemp, for the amount of the damages as stated by the master in such amended report, together with his costs, as directed by the decree of April, 1839 ; but that no execution shall Issue against the defendant Sctiermerhom, either for damages or costs. Due notice of all future proceedings in the cause, must be given to the solicitor for the defendants Vanderkemp and Evans; but no summons, or notice, or other proceedings, need hereafter be served on the solicitor of Schermerhorn. The costs of the complainant are to be re-taxed, after the coming in and confirmation of the master’s report. And the complainant is to be permitted to include in his bill all such extra costs as shall have arisen from the setting aside- of the former report and subsequent proceedings, and the re-investigation of the case by the master; including the order to confirm the new report, the enrolment and docketing of the decree, and the re-taxation of costs. But no allowance is to be made for the execution which is set aside for irregularity, nor for any proceedings thereon ; and neither party is to tax, or have any costs, as against the other, upon this application. The order to be entered hereon, is to be entered with the clerk of the sixth circuit, as of the 9th of August, 1845; when the petition was presented to the chancellor, during the vacancy in the office of vice chancellor of that circuit.