Bank of Rochester v. Emerson

| New York Court of Chancery | Oct 17, 1843

The Chancellor.

There is no doubt as to the right of this court to correct or supply the errors or omissions of its clerks and other officers, whenever it can be done without detriment to the rights of third persons, and where substantial justice requires it. As no fee was chargeable by the clerk upon filing the master’s report in a foreclosure suit where the bill had been taken as confessed, it would have been the clerk’s fault, that the report was not filed 'at the time it was left in his office, if the solicitor had informed him of that fact. But the .clerk had no right to enter the order to confirm such report, until the fee allowed by law for that service was paid ; unless he chose to pay the fee himself which belonged to the state. And as the solicitor had previously been told that services could not be performed for him in the office until the fees for such services were paid, he had no right to presume that the clerk would violate the law, by entering the order of confirmation, unless the fee for entering it was previously paid; or that the clerk would pay such fee for him. Nor was it necessary for the subordinate clerks in the office to inform him, every time he came there to have any thing done, that the fees must first be paid ; when they knew he was already aware of that fact. It was an error of the clerk, however, to seal the execution without examining the minutes of proceedings in the cause, for the purpose of seeing whether the report of the master had been duly confirmed. It was also his mistake that the enrolment of the decree was filed without having been previously signed by himself and by the vice chancellor.

Although the solicitor swears that he supposed the report was confirmed at the time he issued the execution, and that all the proceedings in this suit, after the 18th of December, 1841, were had in good faith, and in confidence that the clerk had filed the report and entered the order for confirmation on that day, it appears that he afterwards learned that such was not the fact. And he does not state that he was not aware of the fact, that the order of confirmation was entered after the return day of the execution, at the time the proceedings in another suit were instituted, by the filing of a creditor’s bill. On the contrary, I think it is fairly inferrible from his own affidavit, and from that of Murdock which was read in opposition to this motion, that the complainants’ solicitor learned that the report had not been filed and confirmed, at the time he paid the fees, on the 15th of January ; and that he paid the fees at that time because he was then informed that it was necessary that the same should be paid before the report could be filed and the order for confirmation entered. If the complainants had not notice of the irregularity at the time of filing the creditor’s bill, it must therefore have been the fault of the solicitor in .this suit, in neglecting to inform the officers of the bank, or the new solicitor who filed that bill, of the true state of facts. The new solicitor, however, does not state in his affidavit that, at the time that bill was filed, he was ignorant of the fact that the order to confirm the report was entered after the return day of the execution. And from my recollection of the language of that bill, which was before me in February last upon the appeal, I am induced to believe that the person who drew it was aware of the fact that the report had not been confirmed when the execution for the deficiency issued. For there was no distinct averment that the report was filed, and an order entered for its confirmation, on the 18th of December, 1841, (which was stated in the bill as the time when the master made his report showing the amount of the deficiency on that day,) although the bill was so carefully drawn as to leave it to be inferred that such was the fact.

But if no injury would result to any one by the order to file the report and enter the order of confirmation nunc pro tunc, so as to overreach the issuing of the execution, the court perhaps should not permit the complainants to be prejudiced by the neglect of the solicitor. The necessary effect of the order appealed from, however, will be not only to subject the defendant to the costs of having his plea overruled as false, when such plea was in fact true at the time it was put in issue by the replication, but also to give these complainants a preference over other creditors, who are now entitled to payment of their debts, out of the assigned property, if the creditor’s bill which had been prematurely filed should be dismissed.

It is a settled principle of the court of chancery that equality among creditors is equity. And although this court will not deprive a vigilant creditor of any preference he may have obtained, over other creditors, by his superior diligence, it would be a violation of that principle of equity, to correct the .mistakes of his own solicitor, for the sole purpose of giving him a preference in payment j at the expense of other creditors, for whose benefit the debtor has made such a contingent assignment of his property as is mentioned in the affidavit of the appellants.

The order appealed from must therefore be modified, so as to make the permission to file the report, and to enter the order of confirmation nunc pro tunc, depend upon the condition that the complainants, within ten days after service of notice of the order, shall stipulate that the appellant may withdraw his plea to the creditor’s bill, without costs; and that the contingent assignment for the benefit of other creditors, referred to in the affidavit of Emerson, shall in no way be prejudiced by the creditor’s bill referred to, but shall have the same effect, so far as the interests of those creditors are concerned, as if that bill had been dismissed. And that if such stipulation is not given, within the time required, the application of the respondents must be denied with costs, including the costs of the appellant on this appeal.