THE New York Tegal Observer. VOL. III.] NEW YORK, OCTOBER, 1845. BILL FOR AN ACCOUNT. [MONTHLY PART. general demurrer for want of equity cannot be allowed, if the plaintiff appears, upon the record, to be entitled to any relief whatever. The defendant alleging upon the argument of this case, that the plaintiff cannot be bound to render any account beyond that which he has offered upon the bill, says, that he has not offered upon the bill to do that, which, upon the hearing of the cause, he may turn out to be entitled to; he says also that he ought now to be considered to It has often been decided that where a bill for an account omits the offer on the part of the plaintiff to pay what shall appear to be due, if the balance turn against the plaintiff, that would not do. This subject recently came before the Master of the Rolls in England, (Lord Langdale) in the case of Clark v. Tipping, 4 Beav. 588. There the bill prayed that the accounts might be taken, and that the defendant be entitled to have full payment, if the acmight be decreed to pay the plaintiff what might be found due from him, the plaintiff being willing that the defendant, if anything should be found due to him on taking the accounts, should receive satisfaction for the same, according to an arrangement made in the year 1840, and in the manner provided by an indenture of December, 1840. And that it might be declared that a release of the 20th of November, 1840, was binding on the defendant, John Tipping. On a demurrer for want of equity, and of parties, it was contended that the plaintiff was not entitled to the account, he not having by his bill submitted to pay what might be found due from him. Lord Langdale, in delivering judgment, said, "It is not disputed that this bill contains sufficient alle. gations of fraud to entitle the plaintiff to bring this cause to a hearing, provided he had shaped his bill in a proper form. It is said, however, that the bill is informal in this respect, that the plaintiff has not offered to account himself, or to pay what upon the taking of the accounts may appear to be due from him to the defendant Mr. Tipping; instead of doing that, he has insisted that he is entitled to the benefit of the arrange. ment in one respect, whilst he seeks to be relieved from it in another. The argument turns upon the proposal which is made, to confine M. Tipping to such sum of money as he may be entitled to on the footing of the trust deed, instead of offering to pay the whole sum of money which, upon the taking of the accounts, may turn out be to due him. In the first place it is to be observed that a count or the arrangement is to be in any way disturbed, and that as the plaintiff has not offered him full payment, he is therefore not entitled to any relief at all. The real foundation of this argument is the assumption, that the plaintiff is not bound to account beyond his offer; that is, that he is not bound to account for more, or to give greater relief to the defendant than the plaintiff has offered to give upon this bill. This point has certainly been very often discussed. It was the subject of a difference of opinion between two very great and eminent law. yers; and I recollect an occasion where, in the presence of two judges of this court, it was asked what would happen upon such a demurrer as this. It was answered by one of them, I should have no hesitation in overruling it, not the slightest. The answer made by the other was, that it required a good deal of consideration, and a difference of opinion was certainly expressed; but occasions have repeatedly occurred, where the plaintiff, not offering at all to account, and not admitting himself to be an accounting party, but seeking an account against a person acknowledged to be an accounting party, has appeared at the hearing to be himself accountable, and there the court has ordered him to account, and that without any offer having been made on his part. Notwithstanding the opinion of Sir A. Hart, which entirely coincided with the opinion he had formed long previously to his deciding the case of Hickson v. Aylwood, I think that this court has often (notwithstanding the doubts which have been raised) ordered Criminal Law-Practical Points. PRACTICAL POINTS. ATTACHMENT-DEMAND BY AGENT-POWER the plaintiff to do that which was just, when the co-defendant's death had been entered he was applying at the hearing to have on the record befere trial. Reg. v. Kenrick, justice done to himself; and I cannot have 1 D. & M. 208. any doubt, that if this case were before me at the hearing, and the plaintiff to try to confine his liability to the offer he has made, such attempt would fail. I think that there is in this court quite sufficient jurisdiction to compel the plaintiff seeking equity upon a matter of account of this kind to do equity on his part, and without saying that the defendant may not be perfectly right in the claim he makes, or that the plaintiff may not be quite wrong in insisting that he can have the benefit of the arrangement when he seeks to be relieved from a part of it, I am of opinion that this is not a proper case for a general demurrer. The defendant cannot, by general demurrer, relieve himself from the duty of answering." The decision on this and another point as to want of parties, was affirmed by the Lord Chancellor. CRIMINAL LAW. CONSPIRACY. It is a general rule, that where a demand is made on a party pursuant to a rule, order, award, &c., by any person not mentioned in the rule, &c., it is necessary that that party should be authorized by a power of attorney to make the demand. Tidd's Practice, 837, 9th Ed.; Laugher v. Laugher, 1 Tyrw. 352; 1 Dowl. 284, S. Č.; Jackson v. Clarke, 13 Price, 208; M'Clell. 72, S. C.; Exp. Fortescue, 2 Dowl. 448. But this rule applies only in those cases where money is demanded, or anything to be done for which a discharge is required, and does not extend to the cases where a mere request of performance of the rule, order, or reward is made. See Kenyon v. Wason, 2 Smith's Rep. 61; Lodge v. Posthouse, Lofft, 388. In the recent case of An indictment charged that A. and B. Tebbutt v. Ambler, 2 Dowl. N. S. 677; 12 were horse dealers, being evil disposed per- Law Journ. Rep. (N. S.), Q. B. 220, 1 sons, and seeking to get their living by Monthly Law Digest, p. 3, tit. Award (3), various subtle, fraudulent, and dishonest S. C., the award directed the execution of practices, together with divers other evil certain deeds by the plaintiff, and the dedisposed persons, unlawfully, fraudulently, fendant's attorney accordingly prepared and deceitfully, did combine, conspire, &c., them, and sent drafts thereof to the plaintiff by divers false pretences and subtle means for his perusal. On the 18th of May the to obtain to themselves from C., divers sums defendant's attorney gave plaintiff notice of money of the moneys of C., and to cheat that unless they were returned by the 26th, and defraud him thereof, is not bad on the he should consider that he agreed to their ground of generality. A. and B., in concert terms; the plaintiff, thereupon, returned with each other, falsely pretended to C. two of the deeds, requiring some alterations that a horse which they had for sale had to be made therein. The alterations in one been the property of a lady deceased, and deed were agreed to by defendant's attorwas then the property of her sister, and was ney, but those in the other deed were not, not then the property of any horse dealer, and the defendant's attorney subsequently and that the horse was quict to ride and sent a Mr. M. as his agent, to require the drive, and by these misrepresentations in- plaintiff to execute the deeds, but the plainduced C. to purchase the horse. It was tiff neglected to do so, and an attachment held that they were indictable for conspiracy, was then moved for. In opposition it was although the money was to be obtained contended, that no sufficient authority on through the medium of a contract. Semble the part of Mr. M., by whom the demand that they were also indictable for obtaining of execution was made, was shown. But money by false pretences. One of two defendants in an indictment for conspiracy died after the venire facias juratores was returnable and before trial; the other defendant was tried and found guilty. It was held no mistrial, although no suggestion of Patteson J., said, "The case of Kenyon v. Wason (2 Smith, Rep 61), is a direct decision that a power of attorney is not necessary in such a case, although it is where money is demanded, or any thing for which a discharge is to be given, and the In Chancery.-Storm and others v. Waddell, Assignee in Bankruptcy. case of Lodge v. Posthouse (Lofft, 388) is to the same effect. This objection therefore cannot, I think, prevail." IN CHANCERY. Before the Hon. LEWIS H. SANDFORD, Assist- DE KAY V. the same defendant, and S. LIEN OF JUDGMENT CREDITOR'S SUIT-PRI- By the commencement of a suit in chancery by a ment debtor. Where the debtor was declared a bankrupt, under the act of Congress of 1941, upon a petition filed Held further, that the right of the creditor in these A few days before the passage of the bankrupt law, D. executed an assignment to B. S., who was a to be fraudulent as against creditors, in the suit The question in tnese cases arose upon the claim made by the general assignee in bankruptcy in the city of New York, to have the funds paid over to him which had been discovered in certain creditors' suits against sundry bankrupts. The creditors resisted the claim, insisting that they had by those suits, acquired a lien upon the funds, prior to the right of the assignee. The circumstances will be found fully stated in the opinion of the court. E. S. Van Winkle, for the complainants, Storm and others. O. Bushnell, for the receiver in the second suit. B. W. Bonney, for the general assignee. THE ASSISTANT VICE CHANCELLOR. The principal and most important question discussed in these cases, is presented in the most simple form, in the second suit. I will therefore consider it in the first instance in reference to that suit. The bill of De Kay is one of interpleader. He is the debtor of Glover, a bankrupt, and each of the defendants claim to be entitled Mr. Merrihew is a to receive the debt. receiver appointed by this court in a suit commenced by Chester and others, judgment creditors of Glover for the purpose of reaching his equitable interests and things in action and founded upon the return of an execution at law against his property wholly unsatisfied. This creditor's bill was filled on the 28th day of October, 1844, and a subpæna to answer, accompanied with an injuction restraining the defendant from transferring his effects or doing any act to enable others to obtain a preference over the complainants, was served on Glover on the next day. On order for the appointment of a receiver of the 10th day of November, 1843, the usual the property and effects of the debtor was granted on motion, and entered on the minutes, of the court; and on the 17th day of the same month Mr. Merrihew was duly appointed such receiver, and executed the requisite bond. On the 30th day of November Glover executed to the receiver a formal assignment of his property, pursuant to the directions of the order for a receiver. The receiver claims to have obtained by these proceedings, a lien upon the debt due from De Kay to Glover, and that the same must be applied towards the satisfaction of Chester's judgment and the costs of their creditor's suit. The official assignee claims the same debt by virtue of a decree declaring Glover to be a bankrupt in pursuance of the act of Congress, entitled "An act to establish a uniform system of Bankruptcy throughout the United States," passed August 19th, 1841. In Chancery.-Storm and others v. Waddell, Assignee in Bankruptcy. Glover's petition for the benefit of this act, was filed on the 23d day of November, 1842, in the District Court for the Southern District of New York, and he was decreed to be a bankrupt within the purview of the act, on the 24th of December following. These conflicting claims must be deter. mined by the nature of the right which Chester & Co. acquired in the things in action of Glover, by force of their creditors' suit in this court; and by the effect of the Bankrupt Act therein consequent upon the petition in the District Court in the matter of Glover's bankruptcy. Without pausing here to inquire what was the effect as to third persons of the creditors' suit against Glover, I am confident no one who is acquainted with that proceeding as conducted in this State, will doubt but that as against Glover himself, Chester & Co. thereby acquired a right to the debt due from De Kay, which could only be defeated by a successful defence of their suit. This right thus defeasible could not be divested short of payment of their demand. The defence which could be made to their suit was very restricted. Their judgment was conclusive, unless fraudulently obtained; and no me re irregularity in its entry, or in the issuing or return of the execution, would avail the defendant Glover. Nor would he be permitted to show that the sheriff refused to levy on his property subject to execution, unless he could also prove that Chester & Co. colluded with the sheriff in such misconduct. Unlike the ordinary case of a suit at law to establish and recover a debt, the debt of Chester & Co. was already proved by their judgment. It thus appears that their right to the De Kay debt upon exhibiting their bill although defeasible, was no more likely to be defeated than that of a mortgagee filing his bill to foreclose a mortgage; and the grounds of defence as much or more restricted in their case as they are in that of the mortgage creditor. Did the Bankrupt Act and Glover's proceedings under it impair or defeat this right? And first, without reference to the proviso, which has been the subject of such able and elaborate arguments at the bar. The third section of the act declares the rights of the assignee in bankruptcy. By force of the decree all the property and rights of property of the bankrupt (ex. cept such as shall be allowed to him and his family by the assignees) were divested out of the bankrupt, and vested in the assignee. And the latter was vested with all the rights, titles, powers and authorities, in respect of the same as fully to all intents and purposes, as the same were vested in or might be exercised by such bankrupt, before or at the time his bankruptcy was declared. There is no other provision in the act on this point, which enlarges the title or interest of the assignee in respect of the demand now under consideration. His right is therefore left to stand upon the general principle applicable to insolvency and bankruptcy, both in this country and in England, that the assignee takes only such rights as the insolvent or bankrupt had, and subject to all the equities which affect the assignee. Mumford v. Murray, 1 Paige, 620; Smith v. Kane, 2 id. 303; Van Epps v. Van Dusen, 4 id. 64; 2 Story's Eq. Jurispr., § 1411. Under the English bankrupt acts, this principle is qualitied in certain instances, by relation to the time of the commission of an act of bankruptcy. But under the statutes of the various States, which are usually put in motion by the bankrupt or insolvent for his own relief, it is generally made applicable to the institution of the proceedings. This view of the bankrupt act of 1841, has received the sanction of very high authority. In the Matter of Muggridge, in the 1st Circuit of the U. S., New Hampshire District, September 12, 1842, (5 Law Reporter, 361, 558) and now reported 2 Story's R. No subsequent act of Glover could defeat 334, nomine Parker v. Muggridge, Mr. Jussuch right. If he had made an assignment tice Story says that if there had been no to one ignorant of the injunction, or had such saving in the act, (as the proviso in procured a discharge from his debts under the second section) the liens, mortgages and an insolvent law on the petition of two other securities within the purview of the thirds of his creditors; the assignee in saving, would have been saved by mere either case, would have received the de- operation of law, from the natural intendmand against De Kay, subject to the priorment of the statute, which did not mean to right of Chester & Co. In Chancery.-Storm and others v. Waddell, A signce in bankruptcy. disturb existing vested rights and interests rights vested or acquired in good faith, in property. Also that the property will be whether they were legal or equitable, exfollowed and affected with the trust in the press liens or constructive trusts. It is only hands of the assignee, in the same manner from the time of the decree, that the proand to the same extent as it would be in the perty and rights of property are divested out hands of the bankrupt; citing several Eng- of the bankrupt, and the act in distinct terms lish authorities. He farther says, "But if divests from him such rights as he has at no such case ever existed, I should have no the time of the bankruptcy and no more, doubt, upon principle, that such ought to be and the assignee can enforce them as fully the result. But there are many cases which as he might at that time, and not otherwise. stand on analogous grounds. We all know that in bankruptcy, the assignee takes only such rights as the bankrupt himself had, and is subject to the like equities." See upon this subject the reasoning of the Supreme Court of New Hampshire in Kittridge v. Warren, 7 Law Reporter, 77, 82, and of Judge Betts in the Matter of Brown, 1 N. Y. Leg. Obs. 72. In Mitchell v. Winslow, in the Maine District, October, 1843, (2 Story's Rep. I leave out of view the distinction between 630, and 6 Law Reporter, 347, 352) the a voluntary assignee of the debtor, and an same eminent jurist says, "it is a well estab-assignee by operation of law, as in bankished doctrine, (except in cases of fraud) | ruptcy or insolvency. The latter may avoid that assignees in bankruptcy take only such the conveyances and transfers of the assignrights and interests as the bankrupt himself or made in fraud of his creditors which the had and could himself claim and assert at voluntary assignee is incapable of doing; the time of his bankruptcy; and conse-but in the case of De Kay the difference quently they are affected with all the equi-has no bearing. ties, which would affect the bankrupt him If then the assignee under the bankrupt self, if he were asserting those rights and act of 1941, took no other or greater right interests." than Glover himself had at the time of the And the learned judge supports his posi-bankruptcy, it seems to me that there is an tion by a reference to decisions from the end of the question. time of Lord Hardwicke to that of Lord Before Glover filed his petition in the Lyndhurst, at law as well as in equity. In court of bankruptcy, Chester & Co. had acWinsor v. McLellan, 2 Story's R 493-S. quired a right in the debt due from De Kay, C. as the matter of McLellan (6 Law Rep. and the debt itself had been divested from 440) in the District of Massachusetts, Oc- | Glover and vested in the receiver. His ber, 1843, Judge Story re-affirmed the same title to it was gone, and he retained no furdoctrine in equally strong language. Hether interest in it than this, that he might says "the assignee in bankruptcy takes the possibly defeat the suit of Chester & Co., property in the same plight and condition and he might regain or redeem the debt by that the bankrupt himself held it, and sub- | paying their demand. ject to all the equities which exist against the same in the hands of the bankrupt.” His procuring a discharge in bankruptcy would have no effect whatever upon the right which Chester & Co. acquired by their creditors' suit. It was the property of the judgment debtor, not a new judgment against hiın which they sought by their bill. If they failed in discovering property their suit Although the policy of the act was to would fail. Thus their proceeding was distribute the assets of bankruptcy equally, against the specific effects, not the person such policy was intended to apply to the of Glover; and if available would become rights and interests which he had, not to so by force of the discovery of such effects those which were vested in others, while he existing at the time of filing their bill. still retained a qualified interest in the pro- such effects they obtained a vested right for perty. Aside from the proviso in the sec-payment and a subsequent discharge of their ond section, there is nothing in the act debt by operation of law could not divest which authorizes the inference that Con- that right. gress intended to give such a monstrous and unprecedented effect to it, as to take away For further illustrations and applications of this principle by the same distinguished | judge, see Ex parte Newhall, 2 Story's R. 360; Fletcher v Morey, ibid 555; and Fiske v. Hunt, ibid 582. On In De Kay's case it makes no difference whether the right by the creditors' suit |