Bank of Utica v. Mersereau

3 Barb. Ch. 528 | New York Court of Chancery | 1848

The Chancellor.

At the time of docketing of the judgment of the Bank of Utica against Hoffman and John G. ard James G. Mersereau, in October, 1834, the judgment debtors, or some of them, were in possession of the whole of the premises in controversy in this cause, claiming that John G. Mersereau was the legal owner thereof, under the conveyance of January, 1831. And that possession was continued until it was surrendered to the two defendant banks, as subsequent mortgagees of the judgment debtors, in July, 1836; after the execution of the complainant was in the hands of the sheriff and had been levied upon the premises. If this judgment, therefore, is valid, and had this been a mere possessory action, to recover such possession for the complainant, without the necessity of settling the legal ownership of the fee of the premises, there would be no difficulty in disposing of the case, upon the ordinary principles which are applicable in possessory actions. And the defendant banks, without showing a superior right in themselves acquired subsequently to their entry as mortgagees merely, would not be permitted to hold the possession against the complainant. For where a party enters into the possession of lands claiming under a particular title, he cannot set up an outstanding title in a stranger, as a defence to a suit by the owner of the title under which he entered, to recover the possession of the premises. (Jackson v. Stewart, 6 John. Rep. 34. Jackson v. De Witt, 7 Idem, 157. Hart’s Lessee v. Johnson, 6 Ohio Rep. 89. Norwood v. Manow. 4 Dev. & Bat. Law Rep. 449.) But a party who has gone into possession of land as the tenant of another, and acknowledging his title, is only estopped from denying the validity of that title, and setting up a Better right in himself, so long as he retains the possession; or during the continuance of the tenancy. For upon the termination of the lease and the restoration of the possession, he may sue and recover back the possession of the premises, upon showing a better title in himself. (Lessee of Galloway v. Ogle, 2 Binn. Rep. 471. Weatherby v. Wilson, 1 Nott & McCord’s Rep. 374. Jackson v. Walker, 7 Cowen’s Rep. 644. Jackson v. McLeod, 12 John. Rep. 183. Camp v. Camp, 5 Conn. Rep. 301.) In the case under consideration, the vice chancellor has not only decreed the delivery of the possession of the premises to the complainant, so as to put the Bank of Utica in a situation properly to contest the alleged title which the Steuben County Bank claimed under the deed of Budd and; wife, and under the comptroller’s deed, for certain portions of the premises in controversy, but has absolutely prevented the defendants from setting up that title hereafter, in any form of proceeding. It becomes necessary, therefore, to examine the question whether the legal title to a part of the premises, or rather the equity of redemption in that part thereof which was embraced in the $1700 mortgage to the executors of Garretson, was outstanding in Mrs. Budd, as the sole heiress of her father, at the time of the conveyance from Budd and his wife to the Steuben County Bank, in September, 1837; and also the question whether any title to the 800 acres, specified in the comptroller’s deed, passed to that bank by virtue of such deed. The first of these questions I will now proceed to consider.

By the common law, if a grantor, who had no interest, or only a defeasable interest, in the premises granted, conveyed the premises with warranty, and afterwards obtained an absolute title to the property, such title immediately became -rested in the grantee or his heirs or assigns, by estoppel. (Cov. Coke Litt. 265, a.) And if the grantor, or any one claiming title from him subsequent to such grant sought to recover the premises by virtue of such after acquired title, the original grantee, or his heirs or assigns, by virtue of the warranty which ran with the title to the land, might plead such warranty, by way of rebutter, or estoppel, as an absolute bar to the claim. (Cov. Co. Litt. 365, a. Terms De La Ley, tit. Guaranty. Toml. L. D. art. Rebutter.) This principle has been applied to all suits brought by persons bound by the warranty, or estoppel, against the grantee or his heirs and assigns. So as to give the grantee, and those claiming under him, the same right to the premises as if the subsequently acquired title, or interest therein, had been actually vested in the grantor at the time of the original conveyance from him with warranty; where the covenant of warranty was in full force at the time when such subsequent title was acquired by the grantor. (Jackson v. Wright, 14 John. Rep. 193. Brown v. McCormick, 6 Watts, 64. Comstock v. Smith, 13 Pick. 119.) And where an estoppel runs with the land-it operates upon the title, so as actually to alter the interest in it, in the hands of the heirs or assigns of the person bound by the estoppel as well as in the hands of such person himself. Thus, if a man by deed indented make a lease of land, reserving rent, which implies a warranty on the part of the lessor, and the landlord has no interest in the land at the time of the execution of the lease, if he afterwards purchases the land, and then sells it to a stranger, the latter will hold it subject to the lease; and coming in as the assignee, or grantee,.of the person who made the lease, will be estopped from showing that the lessor had no interest in the land at the time he made such lease. (1 Coke Litt. 19 Lond. ed. 47, note 11. 7 Bac. Abr., Warranty L. Bull v. Wiott, 1 Roll’s Abr. 868. Somes v. Skinner, 3 Pick. Rep. 52. Trevian v. Lawrence, 6 Mod. Rep. 258.) . For as a covenant of warranty runs with the lands, so as to give the heirs and assigns of the grantee the benefit of the estoppel as against the warrantor, it runs wnh the subsequently acquired interest of the warrantor, in the hands of the heirs and assigns of the latter; so as to bind .that interest, by the estoppel, as against any person claiming the same under him, in the post. (Fairbanks v. Williamson, 7 Greenl. Rep. 96. Somes v. Skinner, 3 Pick. Rep. 52. Stow v. Wyse, 7 Conn. Rep. 214. Lunsford v. Alexander, 4 Dev. & Bait. Rep. 42. Jackson v. Parkhurst & Gurney, 9 Wend. Rep. 209.) Judge Lane, in delivering the opinion of the supreme court of Ohio, in the case of Douglass v. Scott, (5 Ohio Rep. 198,) very correctly says, that the obligation created by an estoppel not only binds the party making it, but all persons privy to him ; the legal representatives of the party, those who stand in his situation by act of law, and all who take his estate by contract, stand in his stead, and are subjected to all the consequences which accrue to him. It adheres to the land, and is transmitted with the estate. And in Phelps v. Blount, (2 Dev. Law Rep. 177,) the supreme court of North Carolina held that where land was vacant and uncultivated, the party entitled by estoppel was in the constructive possession of the land; so as to maintain an action of trespass against a person who went upon the land and cut timber, claiming to do so by virtue of a pretended title in, and permission from, the person estopped. (See also Sikes v. Basnight, 2 Dev. & Batt. Law Rep. 157.)

Let us apply these principles to the case under consideration: Previous to the conveyance of Lindsley and wife, of the 15th of December, 1819, Joshua Mersereau, jun. the grantee in that conveyance, had conveyed to the three individuals who were the executors of H. Garretson the same premises, in connection with other lands excepted in the deed of Lindsley and wife; with full covenants of warranty, as well as of seisin. And if nothing then had occurred to prevent the covenants of warranty in the deed to the executors from operating by estoppel, upon the title conveyed to Joshua Mersereau, jun. by Lindsley and wife, that title immediately became vested in J. Garretson, J. Guyon and P. I. Van Pelt; so as to vest the absolute fee in them, by estoppel, not only as against Joshua Mersereau, jun. and his daughter and heiress, but also as against the Seneca County Bank, to whom the daughter and her husband subsequently conveyed. And two of the grantees in (lie deed, of Joshua Mersereau, jun., of the 9tli of February, 1818, whicli had created the estoppel, having subsequently conveyed all their interest in the premises to John G. Mersereau, whose right to the premises was sold under the judgment of October, 1834, the complainant unquestionably obtained the legal title to two thirds of the premises, by the sheriff’s deed; even if the title to the other third of the premises is still outstanding in the heirs or devisees of J. Guyon, who appears to have been dead at the time of the conveyance to John G. Mersereau, in 1831. .

Although the grantees in the deed of February, 1818, which created the estoppel, are described as executors, there is nothing in that deed to show that the estate was intended to be granted to them as trustees; so as to create a joint tenancy which would belong to the survivors. The estoppel, therefore, vested the legal title to the premises in the three grantees named in that deed, as tenants in common; under the provisions of the act of February, 1786, directing the mode of conveyances to joint tenants. (1 R. L. of 1813, p. 54, § 6.) The executor of J. Guyon joined in the conveyance to John G. Mersereau, in January, 1831; and was probably either the devisee, or had power under the will of J. Guyon to transfer the interest of the latter in the premises as tenant- in common with the other grantors in that deed. If so, the title to that third of the premises stands upon the same footing as the other two thirds. It however was not material for the complainant to establish that fact in the present case. For it is not pretended that either of the defendants has obtained the title of J. Guyon to that undivided third of the premises, by any conveyance from his heirs or devisees, unless they obtained it through the conveyance'to John G. Mersereau in 1831. And as all the other defendants went into possession claiming title to the premises under that conveyance, they cannot set up an outstanding title in a stranger, to defeat a party who claims the premises under the same.title as themselves; but by a prior right which c erreaches their claim. (Ives v. Sawyer, 4 Dev. & Bat. Rep. §1.) The tase might have been different, as to this undivided third of the premises, if the defendants had shown that they had acquired the title to the same from the heirs or devisees of J. Guyon subsequent to the sale of the interest of Hoffman & Mersereau upon the execution in favor of the complainant. So far as the mere possession of the land is concerned, the two defendant banks, having entered into possession under the defendants in the judgment, subsequent to the issuing of the execution, must yield up the possession to the complainant, unless they can show a better right in themselves, or establish the fact that the judgment was invalid, as against them. (Colvin v. Baker, 2 Barb. S. C. Rep. 206.) And if they were Fund to relinquish the possession to the complainant, and had no legal or equitable interest in the premises themselves which could be the proper subject of a future litigation, or be affected by the decree in this suit, they cannot complain that the court has erroneously decreed that the complainants are entitled to the whole estate, as well as to the right of possession, of that undivided third of the premises.

It is insisted, however, that the covenants in the deed of the 9th of February, 1818, had been broken at the time of the conveyance. from Lindsley and wife to Joshua Mersereau, jun. in December, 1819; and that the arrangement between J. Garretson and the grantee in that conveyance, and the written disclaimer of Garretson, were a satisfaction of the damages which he and his associates had sustained in consequence of the breach of the covenants in the deed of 1818; and thereby prevented the title acquired under the deed of Lindsley and wife from vesting in the grantees in the deed which had created the estoppel. Where the breach of the covenant of seisin affects the whole title, so that nothing passes to the grantees in the deed, a recovery by the grantees for the damage sustained by the breach of that covenant, might have the effect to prevent the operation of the estoppel created by such covenant, or even by the covenants of warranty ; by creating a counter estoppel, which would prevent, the grantees, or those claiming under them, from alleging that they acquired any interest in the land by the original conveyance to them. (Stinson v. Summer, 9 Mass. Rep. 143. Porter v. Hill, Idem, 336.) But as the covenant of seisin does not run with the land, in this state, it is at least doubtful whether a release of the covenant of seisin by the original grantee, would prevent a subsequent conveyance, by him, from carrying to the grantee in such subsequent conveyance the general covenants of warranty, which.run with the land. And if it would not, the Steuben County Bank as the grantee of Mrs. Budd, would be estopped, by the covenant of warranty of her father, in his deed of the 9th of February, 1818, from alleging that the grantees did not obtain an absolute and indefeasible title to the premises, by virtue of that deed; which title the complainants in this case have subsequently acquired, in at least two-thirds of the-premises, by the conveyance to John G. Mersereau, and the subsequent sale upon the judgment and execution against him and his copartners. For although the grantee in a deed, which contains a covenant o.' seisin, in connection with general covenants of warranty, and the heirs and assigns of such grantee, are not estopped by such deed from showing that the grantor had no title to the land attempted to be conveyed, the warrantor, and those claiming under him, in the post, aré estopped, by his covenants, from alleging that he had not a perfect title to the land when he conveyed the same with warranty. And therefore a reconveyance of the land, by the grantee thereof, without covenants-of warranty in such reconveyance, will not prevent such original grantee from recovering for a breach of the covenant of seisin contained in the conveyance of the premises to him. (Bennett v. Irwin, 3 John. Rep. 363. See also Porter v. Hill, 9 Mass. Rep. 336.)

■ The covenants of warranty in a deed are not broken until eviction. And in this case there had been no eviction of the grantees of Joshua Mersereau, jun. at the time of the conveyance to him by Lindsley and wife. I see nothing, therefore, which could prevent the operation of the estoppel, by the general covenants of warranty in Mersereau’s prior deed to Garretson, Guyon and Van Pelt; so as to vest in them the title, which had been actually divested by the sheriff’s sak?. And the certificate in writing of John Garretson, not under seal, which was made subsequent to the deed of Lindsley and wife, could not operate as a counter estoppel, even as to Garretson’s one-third of the. premises. So far as it had been acted upon by subsequent purchasers, from Joshua Mersereau, jun. who were ignorant of the true state of the title, a court of equity would unquestionably have restrained J. Garretson from setting • up the title by estoppel, to their prejudice.

Joshua Mersereau, jun. also had rendered himself personally liable for the payment of the $1700 secured by his bond and mortgage of the same date, upon an agreement between him and Garretson and the other mortgagees for whom Garretson acted, that Mersereau should receive a conveyance of their legal title to the premises. Or what is more probable, both parties were ignorant of the law' relative to the passing of the legal title to land by estoppel; and the giving of the $1700 bond and mortgage of Mersereau, and the assignment of the mortgages executed by other grantees of the premises were intended to be in satisfaction of the claim of the grantees in the deed of February, 1818, for the supposed loss of the land, by the sheriff’s deeds, and the subsequent conveyance of Lindsley and wife to Joshua Mersereau, jun. Upon the first supposition, a court of equity would have compelled a specific performance, by requiring Garretson, Guyon and Yan Pelt to convey the legal title, upon the payment of the $1700 and interest secured by the mortgage. But upon the supposition that both parties had acted under a mistake, in supposing that the grantees in the deed of February, 1818, had lost their title to the land, and that such title was actually in Mersereau by the force and effect of the deed of Lindsley and wife to him, a court of equity would have directed the $1700 bond and mortgage to be delivered up and cancelled, as having been obtained without consideration. Or rather, the bond should be delivered up and cancelled, for the legal title being already in the mortgagees, by estoppel, the mortgage was a mere nullity, as a security upon the land for the payment of the $1700. And the assignment of that bond and mortgage to John G. Mersereau, simultaneously with the conveyance to him of the legal title to the land itself, could not alter the nature of his estate in the land. Nor was the mortgage in his hands any incumbrance upon the legal title, which was in him at the time of the docketing of the judgment of the complainant.

The conclusion at which I have arrived upon this part of the case, therefore, is that Joshua Mersereau, jun. had no legal estate or interest in any part of the premises at the time of his death; and that if the judgment of the complainant was not fraudulent as against the other creditors of Hoffman & Mersereau, the proper remedy of the-complainant was by a suit at law to recover the possession of the premises in controversy. And if the defendants had made a proper objection, in their answer, to the jurisdiction of this court to give relief to the complainant, upon the case made by the bill, the vice chancellor should have dismissed the bill, with costs; but without prejudice to the rights of the complainant in a suit at law. For as Joshua Mersereau, jun. had no interest in the premises in controversy, upon which his mortgage to the executors could operate as an incumbrance, or which could be affected by the outstanding judgments against him, neither the mortgage nor the judgments were such a cloud upon the title of the complainant as would authorize an application to this court for relief. But as the defendants neglected to make any such objection to the jurisdiction of the court, in theiranswer, and had thus compelled the vice chancellor to decide upon the legal rights of the parties, it was proper for him, in the decree, to declare the invalidity of the mortgage1 and judgment's as liens upon «the title acquired by the complainant under the sheriff’s deed. For the court of chancery will not refuse to take jurisdiction of a case, and to make a proper decree therein, merely upon the ground that the complainant had a perfect remedy by an action at law; wl. en the parties have submitted themselves to the jurisdiction of the chancellor, without objection. (Ludlow v. Simonds, 2 Caines’ Ca. in Error, 56. Hawley v. Cramer, 4 Cowen, 727. Gilb. Ch. Pract. 220. Grandin v. Le Roy, 2 Paige’s Rep. 509. Rees v. Smith, 1 Ohio Rep. 509.) But where the complain ant improperly and unnecessarily comes into this court for relief, and the defendant neglects to make the objection that the remedy of the complainant, if any, was at law, whereby the chancellor is compelled to take jurisdiction of the case, and to decide it upon the merits, he may, in the exercise of a sound discretion, refuse to give to either parly the general costs of the litigation, here. For this reason, although the vice chancellor did not decline jurisdiction of this case, which was a mere ejectment bill to recover the possession of real estate, upon a legal title, according to the case made by the bill, I think he very properly refused to give to the complainant the general costs of the prosecution of this very expensive suit in the court of chancery.

The deed from Joshua Mersereau, jun. to Garretson, Guyon and Van Pelt, which was produced upon the hearing, merely describes them as executors of H. Garretson deceased ; but does not profess to convey the premises to them in their character of executors. And if the proceedings were different a question might arise whether the grantees in that deed did not take the title as tenants in common ; so that the conveyance from the two surviving grantees, and the executor of the deceased grantee, to John G. Mersereau conveyed only two undivided two-third parts of the premises in question. ‘ For there is no evidence in the case that the executor of J. Guyon, one of the grantees in the deed of February, 1818, was either the heir at law of the decedent, or was authorized by his will to convey his real estate. Bull think the parties, by the pleadings, are precluded from raising that question in this suit. The bill alleges that the land conveyed to Joshua Mersereau, jun. by the executors as such, was reconveyed by him to the said executors, and that his wife also executed a quit-claim deed of the premises to the said executors, by which her interest in the premises was also vested in the said executors. These are allegations that the reconveyance of Joshua Mersereau, jun. to them, and the quit-claim of his wife to them, were to the grantees in their characters of executors. And the answer of the defendants admits this reconveyance by Joshua Mersereau, jun. to the executors, and the quit-claim of bis wife to them, nearly in the same words of the allegations in the bill. These facts, admitted by both parties in their pleadings, are to be taken as true for the purposes of this suit. And if so, the reconveyance vested the title in the executors as joint tenants, and not as tenants in common, under the provisions of the statute on that subject. [See 1 Rev. Laws of 1813, p. 54, § 6.) The title there fore was vested in two of the grantors in the conveyance to John G. Mersereau, as the surviving executors, by the estoppel and the death of their co-executor; and passed by the last mentioned conveyance to the grantee named therein. And the deed of February, 1818, showing a conveyance to Garret-son, Guyon and Yan Pelt as tenants in common, must be laid entirely out of view; as tending to establish a fact which is contrary to what both parties have alleged and admitted by their pleadings. For the purpose of the decision which I am to make, I must consider it as settled that the legal title to the whole of the premises in controversy became vested in John G. Mersereau, by the deed to him from the surviving executors, and from the executor of their deceased co-executor.

I do not agree with the vice chancellor that the comptroller’s deed is void, either as to its form, or because it does not Specify the year in which the taxes were laid for the non-payment of which the premises were sold. The provision in the revised statutes directing the comptroller ¿o execute a conveyance of the property sold, in the name of the people of the state, is not new, but was contained in the revised laws of 1801 and of 1813. (1 Rev. Laws of 1801, p. 555. 2 Rev. Laws of 1813, p. 517.) And I believe the comptroller’s deeds upon tax sales have been in the same form in this respect under all of these laws. They have so far back as I have examined, which is more than a quarter of a century. And thousands of titles now depend upon conveyances executed in the same form as the deed in this case. When we recollect, too, that deeds in this form have been executed by such men as Chief Justice Savage, Mr. Justice Marcy, and Silas Wright, who have heretofore filled the office of comptroller, and probably with the sanction of the several distinguished jurists who have from time to time occupied the station of attorney general of the state, and that many recoveries have been had in our courts upon such deeds without objection, it is too late to pronounce such deeds invalid, upon a mere technicality, suggested tor the first time by the counsel for the complainants in this suit. The maxim that custom is the best interpreter of the law is applicable to this case. (4 Inst. 75. 2 Eden’s Rep. 74. Hopk. Ch. Rep. 267.) In the case of McKeen v. Delaney’s Lessee, (5 Cranch’s Rep. 32,) the late Chief Justice Marshall, in relation to the validity of the proof of a deed says, were the act of 1715 now for the first time to be construed, the opinion of this court would certainly be that the deed was not regularly proved, and therefore not legally recorded. But the court put its decision in favor of the validity of the recording of the deed upon received custom in the state where the deed was given; although no judicial decision had been made there upon the question. And in relation to the practical construction which had been given to the same statute, Chief Justice Tilghman says, “so extensive and deep rooted is the practice that numerous titles depend on it, and it would be unpardonable to disturb it now by a critical examination of the rvords of the act.” (1 Sei'g. Sf Raw. Rep. 106.) Lord Coke’s expression, (Coke Litt. 186 a,) that common opinion is good authority in law does not apply to a mere speculative opinion in the community as to what the law upon a particular subject is. But when such opinion has been frequently acted upon, and for a great length of time, by those whose duty it is to administer the law, and important individual rights have been acquired or-are dependant upon such practical construction of the law, this expression of the learned commentator upon Littleton is entitled to great weight.

It is true the deeds which have been given by the comptroller from time to time, are not technically given in the name of the people. But they recite the substance of the statutes under which the sales have been made, the non-payment of the taxes which have been charged- upon the land in pursuance of such laws, the advertisement and sale of the premises, the payment of the purchase money into the treasury of the state, by the grantee, and that the premises have not been redeemed; and the comptroller under the official seal of the state belonging to his office, and, as the deed states, by virtue of the authority vested in him by law, conveys the lands so purchased, either to the original purchaser, or to his assigns; winch deeds are witnessed by one of the officers mentioned in the statute. No one, therefore, upon examining the deed of the comptroller, executed in this form, can doubt as to the intention of the comptroller to convey the premises for and in behalf of the people of the state; although the people are not technically described as the grantors in such conveyance.

Again; if this supposed error in the form of the comptroller’s deed was now material, it would not justify a court of equity in declaring that the purchaser had no right to the land by virtue of his purchase; but the comptroller, if necessary, would be required to give him a new deed, in the proper form. There is nothing in the statute requiring the deed to state in what year the tax was assessed, for the non-payment of which the premises were sold. The deed states that such taxes have been assessed and returned to the comptroller, and have remained unpaid for two years from the first of May following the year in which they were assessed ; which is all that could be necessary to show, upon the face of the deed, that the comptroller was authorized to make the sale. And if the owner of the land wished to ascertain for what year the taxes were assessed, he could do so without any difficulty by referring to the books which by law are required to be kept in the comptroller’s office.

The deed in question, therefore, if the lands assessed, and the part conveyed, had been so described therein as to be capable of location, would have been sufficient, prima facie, under the practical construction which has been given1 to the tax laws, to entitle the Steuben County Bank1 to 'the 800 acres of the premises in controversy which are claimed under ti¡at deed. This prima facie evidence of ownership, however, was liable to be rebutted, by showing that the tax returned to the comptroller as unpaid had actually been paid to the collector. (Jackson v. Morse, 18 John. Rep. 441.) It might also be rebutted, by showing that the land thus sold and conveyed by the comp troller, or some part of it, was actually occupied by some person at the expiration of two years from the time of the sale, or that it was so occupied at the time of the giving of the comptroller’s deed : so as to throw upon the party claiming under such deed the necessity of proving that he had given, to the occupant, the notice to redeem which is required by the statutes on this subject.

There are two provisions of the statutes in relation to notices to occupants, which are applicable to all sales made subsequent to the 5th of April, 1830, for the non-payment of taxes; and which are necessary therefore to be considered in the decision of this case. The original eighty-third section of the article of the revised statutes relative to sales for unpaid taxes, and the conveyanee and redemption of lands sold, (1 R. S. 412,) declared that whenever any land sold for taxes, and conveyed by the comptroller, should at the time of such conveyance be in the actual occupancy of any person, the grantee, or the person claiming'under him, should serve a written notice on such occupant, stating what was necessary to redeem the land from the sale, and that unless the same was redeemed, within the time prescribed, the conveyance of the comptroller would become absolute. . And the 87th section of the same article required the grantee or other person claiming under him, in cases of such occupancy, in order to complete his title to the land so conveyed, to file with the comptroller the affidavit of the service of the notice upon the occupant. These provisions of the revised statutes are still in full force; having never been repealed or abrogated. But the act of the 5th of April, 1830, made a further provision on the subject of notices to occupants of lands which should thereafter be sold for taxes, and where the occupants should' be in the occupation of such lands, at the expiration of the two years given for the redemption thereof; that is, at the end of two years from the last day of the comptroller’s sale for taxes; as provided for in the original sixty-sixth section of the article of the revised statutes before referred to. (1 R. S. 409.) In case the lands sold by the comptroller are occupied at«the expiration of the two years, whether conveyed by the comptroller or not at that time, the act of April, 1830, required the purchaser, or the person claiming under him, to serve the notice upon the occupant within one year from the expiration of such time of redemption; and to file the evidence thereof with the comptroller within one month after such service. And the time for redeeming the land, when thus occupied at the expiration of the two years from the time of the sale, is six months from and after the filing of the evidence of the service of such notice with the comptroller. (Laws of 1830, p. 112.)

The effect of these several statutory provisions is that if the land sold by the comptroller for taxes, or any part thereof, is actually occupied at the end of the two years from the close of the sales, the purchaser, or his assignee, must serve the notice required by the act of April, 1830, upon the occupant, and file the evidence of such service with the comptroller, within the times prescribed by that act, or by the subsequent act amending the same, (Laws of 1844, p. 397,) or he will lose the benefit of his purchase. Where he serves such notice, and files the evidence of such service upon the comptroller, within the time prescribed, if the lands are not redeemed within the six months allowed by the act of 1830 for that purpose, his title will become perfect, as soon thereafter as he shall have obtained the comptroller’s deed; whether such deed shall have been given before or after the service of such notice. (Laws of 1830, p. 113, § 3. 1 R. iS. 3d ed. 466, 5 105.) In case however the lands sold were not occupied at the expiration of the two years from the time of sale, but there is an actual occupant of the land sold, or of any part of it, at the time of the giving of the comptroller’s deed, then the original eighty-third section of the article of the revised statutes before referred to still applies. And in that case the title of the purchaser will not become absolute, under the comptroller’s deed, until six month’s after he shall have served the occupant with the notice to redeem specified in the eighty-fifth section; and shall have obtained the comptroller’s certificate that evidence of the fact of such service has been filed, and that the land was not redeemed by the payment of the redemption money into the treasury within six months after the service of such notice. But in cases not coming within the scope of tie act of April, 1830, there is no time limited by law for giving notice to the occupant of the land who was in such occupancy thereof at the time of giving the comptroller’s deed. And the only effect of a neglect to give such notice is to extend the time for redemption of the land, and the perfecting of the title of the purchaser.

In the case under consideration, therefore, if the lands assessed and sold had been properly described, and no part of the 800 acres was occupied at the expiration of the two years from the time of sale, the vice chancellor should not have deprived the Steuben County Bank of the benefit of what the owner of the land would have been required to pay to redeem the same; but the decree should have directed that amount to be paid by the complainant, or that the Steuben County Bank should be permitted to complete its purchase of the 800 acres by giving the notice required by the" provisions of the revised statutes in such cases. The fact that the 800 acres were actually occupied at the date of the comptroller’s deed, in December, 1837, is fully established. For the case shows that T. L. Mersereau leased the whole of the premises in controversy from the two defendant banks, on the 4th of November preceding the giving of that deed, for the term of one year; and he went immediately into possession under that lease. It is true, as to one half of the premises, he was the tenant of the grantee in the comptroller’s deed. But that did not authorize the grantee in such deed to perfect his title as against the complainants’ paramount claim upon the land, or as against the Chemung Canal Bank, without giving the notice required by the statute. This question was fully considered by the late Chief Justice Savage, in the case of Jackson v. Esty, (7 Wend. Rep. 148.) And the supreme court there decided that it was not necessary that the occupant of the land sold for taxes should be the owner thereof; and that an occupant who was not the owner could not waive the service of a notice on him, so as to perfect the title of the purchaser without an actual service of notice upon such occupant, and without furnishing evidence of such service to the comptroller. That decision I think was in accordance with the true construction of the statute; which requires service of the notice to be made upon every- person who is an actual occupant of the premises included in the comptroller’s deed, whoever he may be, and the obtaining the comptroller’s certificate, as conditions precedent to the vesting of the title of the owner of the land in the grantee in such deed, or in those claiming under him.

In this case, however, I have arrived at the conclusion that the sale by the comptroller is one which came within the provisions of the act of April, 1830; because a part of the premises at least were occupied by the Messrs. Lewis at the expiration of the two years allowed by law for the redemption of the 800 acres from the sale. And the original purchaser at the comptroller’s sale, whoever he was, lost his right to perfect his title; by his neglect to serve the notice upon them within the time prescribed in that act. The pleadings and proofs show that as early as 1831, John G. Mersereau, claiming to be the owner of the premises conveyed to him by the deed of Garret-son and others, contracted to sell 1000 acres off of the north end thereof to the Messrs. Lewis; that they moved on to the land, and exercised acts of ownership over the same by improving parts thereof and getting lumber from the residue of the 1000 acres, until some time in 1834. And the maps produced in evidence show that the land so occupied by the Messrs. Lewis, included nearly two-thirds of the 800 acres sold by the comptroller for taxes; even if the same should be laid out in such a form as to exclude the whole of the two Pier lots, which had been actually occupied from a much earlier period. It has been very correctly decided, by the late supreme court, that if any part of the premises sold for taxes is actually occupied at the times specified in the statutes relative to the giving of notices to the occupant, the purchaser must give the prescribed notice to the occupant of such part of the premises, and obtain the comptroller’s certificate, that such notice was, given and that the premises were not redeemed within the time prescribed, before he can complete his title to any part of the premises included in the sale. (Comstock and wife v. Beardsley, 15 Wend. Rep. 348. Bush v. Davison, 16 Idem, 550.)

Again; I am inclined to think the premises assessed were so described that it is impossible to locate the 800 acres, intended to be sold out of the northwest corner thereof, to be laid out in a square form as nearly as may be. The lands were assessed to John Garretson; but the quantity of land does not correspond with that embraced in the mortgage to the executors, of December, 1819; nor with that which was vested in the executors by estoppel, north of the Dinah Mersereau lot, which in the assessment is described as the land of her husband Joshua Mersereau the elder. Two of the boundaries, the south and the west, can be ascertained without any difficulty; and perhaps the east might have been ascertained by showing what lands were occupied and claimed by other persons, to the north of the Ryers lot and adjoining the river, at the time the assessment was made. But the tract assessed is bounded on the north partly by the town line and partly by Rathbone’s lands. And none of the witnesses can recollect that any person by the name of Rathbone ever owned or occupied any lands in that township west of the Tioga river. The boundary intended was probably the land of some occupant who was in possession of land south and adjoining the Pier lots. But even if that fact was ascertained it would be necessary to ascertain the width, north and south, of the land assessed, as well as its extent on the east, for the purpose of locating the 800 acres. For that quantity of land laid out in a square form in the northwest corner of the township would run so far east as to include a part of the Pier lots; which were undoubtedly assessed to actual occupants, from the time of the conveyance thereof in 1819. As the lands described in the comptroller’s deed could not be located, for want of a proper description of the 2401 acres, in the northwest corner of which the lands sold were to be laid out in a square form as nearly as might be, the sale was invalid. And the Steuben County Bank would not have acquired any title to any part of the premises in controversy, by virtue of the comptroller’s deed, even if no part of the premises which that deed was supposed to cover had been actually occupied at the expiration of the two years from the. time of the sale, or at the time of the giving of the deed by the comptroller in December, 1837.

The most important question in this case is, whether the judgment, under which the complainant claims title to the premises in question, was fraudulent and void as against the defendant banks, as creditors of the firm of Hoffman & Mersereau. And in.examining this, question it is proper to ascertain, in the first place, whether the decision of the. vice chancellor was right in suppressing the deposition of Hoffman, and ■in denying the application, made on the part of the complainant, to suppress the deposition of Cotton;, one of the attornies employed by the firm of Hoffman & Mersereau to draw the bond and warrant to be executed by them and to enter up a judgment thereon against them in favor of the complainant.

If Hoffman was an incompetent witness, the release produced at the hearing did not restore his competency, even if that release had been duly proved before the closing of the proofs in the cause. It is merely a release of his personal liability upon the judgments, in favor of the complainants, as a copartner or joint debtor with the defendants John G. and James G. Mersereau, for the.consideration of one dollar; ip pursuance of the provisions of the act of April, 1838, for the relief of partners and joint debtors. (Laws of 1838, p. 243.) But it leaves those judgments, and the debts for which they were recovered, in full force against his copartners. And if his copartners should hereafter be compelled to pay any part of those debts, either because the title to the land sold upon the execution on one of those judgments failed, or for any other cause, it would leave him still liable to them for his share of the debts. The effect of the release is not therefore to discharge any interest which the witness lias in the event of the suit, in favor of the complainant as against, the defendant banks; but merely to compel the complainant to seek redress against John G. and James G. Mernereau in the first instance, and leaving them to. their remedy from the witness in case the complainant recovers any thing against them. To restore the c'ompetency of the witness, if he was in fact incompetent in consequence of any contingent liability for those debts, depending upon the event of this suit, the complainant should not only have released Hoffman but also the other members of the firm of Hoffman & Mersereau from such contingent liability.

Again ; I think this release, was not properly proved so as to affect the question of the competency of the witness, even if such release amounted to any thing if properly proved. Where it only appears from the examination of the witness himself that he is interested in favor of the party calling him, or that he is otherwise incompetent, the objection to his competency may be removed in the same manner that it was created. And the witness may be examined, by the party calling him, to show that his interest has been removed by a release, or to prove any other fact to establish his competency at the time of his exami nation. But where his interest, or other incompetency, appears aliunde the witness cannot be examined for the purpose of showing his competency, by testifying to the execution of a release, or to any other fact. (Greenl. Ev. 471, § 423. 13 Mart. Louis. Rep. 709. 4 Serg. & Rawl. 298. 1 Cowen, 540.) The testimony of Hoffman therefore should not have been received to prove the execution of the release to himself from the. complainant.

Nor could ex parte affidavits of other persons be. received, after the proofs in the cause had been closed, to prove that this release had been executed and delivered to Hoffman before he was examined as a witness. As the release which was produced on the hearing was neither dated nor witnessed, the acknowledgment by the party executing- it was only evidence that he had executed it at or before such acknowledgment. Not that it was executed previous to the examination of Hoffman as a witness. The acknowledgment of the release, therefore, which was .long subsequent to such examination, would not have aided the complainant, even if notice had been given of the intention to use the release, on the hearing, ten days be-for the proofs were closed; as required by the 75th rule of the court. This release therefore must be laid entirely out of the question in deciding upon the competency of Hoffman as a witness for the complainant.

But whether such release was or was not regularly proved, the vice chancellor was right in supposing that Hoffmar was interested in favor of the complainant in establishing the fact that the lands in controversy belonged to John G. Mersereau, at the time of the docketing of the judgment against Hoffman & Mersereau, or to some or all of the defendants in the judgment. The lands of a judgment debtor were not liable to be sold on execution by the English common law. But by the statutes of extents and elegits, they were set off to the judgment creditor until his debt should be paid. And more than three centuries since, a statute was made there, giving a remedy to the creditor to whom the debtor’s land had been delivered in extent upon elegit, where thg tenant by elegit was afterwards evicted out of or from the possession of such land, without any fault on his part. (Stat. 22 Hen. 8, ch. 5.) As this was a part of the general law of England at the time of the first settlement of this state under the charter to the Duke of York, it became'a part of the common law of the colonists, in connection with the principles of the statutes of extents and executions then existing in England.- But when, in 1732, the statute of 5 George 2d, chapter 5, subjected real estate in the colonies to sale up on execution in the same manner as personal property, the writ o'f digit was virtually abolished here. The equitable principle of the statute 32 Hen. 8, chapter 5, however, still applied to the case of a creditor who had purchased the real estate of his debtor upon execution. And of course, it continued to be a part of the law of the colony ; though the particular form in which the relief had been given was no longer strictly applicable to the sale under an execution. For the land was frequently sold to a stranger to the judgment, and the judgment was thereby satisfied. And the courts, of several of our sister states have frequently acted upon the eqyitable-principle of the English statute on this subject, by giving relief upon an application to their equitable powers. I have no doubt therefore that it is a proper subject of equity jurisdiction here, and has been so from the time when the statute subjecting real estate in the colonies to be sold on execution became a part of the law of the colonies.

In the first revision of our laws the legislature attempted to give a remedy at law, in the supreme court, to the purchaser of lands upon execution, or to his heirs or assigns, where he or they had been evicted on account of any irregularity in the proceedings, or want of title in the judgment debtor, or by reason of any prior incumbrance thereon. {Law of 19th March, 1787, § 7. 1 Greenl. Laws, 407.) And the same provision, in substance, was contained in the revisions of 1801 and of 1813. (1 R. L. of 1801, p. 391, § 10. Id. of 1813, p. 504, § 11.) It is doubtful, however, whether this provision applied to a case where the plaintiff in the execution was himself the purchaser. If not, it left the law as to him precisely as it stood before; and only gave a statutory remedy to a stranger to the execution, who had become the purchaser and had been evicted, against the plaintiff, or the defendant, in the judgment and execution who ought in justice and equity to refund the purchase money to him. Although that statutory provision was in 'force for more than forty years, I am not aware that it ever came before any of our courts so as to obtain a judicial construction, except incidentally in the case of Woodcock v. Bennet, (1 Cowen, 711.) Nor have I been able to learn that any proceedings were ever commenced under it. But while it was in force the case of Lansing and others v. Quackenbush, (5 Cowen’s Rep. 38,) came before the supreme court, upon a summary application to the equitable power of that court for relief. There one of the plaintiffs in the execution had become the purchaser, at the sheriff’s sale, of lands which were represented to be the property of the defendant, but which afterwards were ascertained to belong to another person. The court said there was clearly a remedy in the case; but refused to give relief, upon a summary application, upon the ground that the more appropriate remedy was in a court of equity. In a subsequent case, however, whore the sheriff had sold personal property which was supposed to belong to the defendants in the execution, and had applied the proceeds of the sale upon the execution, but the real owner of the property had sued him and the judgment creditor, and had recovered of them the value of the property, the supreme court, upon motion, in behalf of the original judgment creditor, directed the endorsement of the proceeds of the sale upon the execution to be stricken out; and allowed him to take out a new execution for the amount of his judgment. (Adams v. Smith and Parmeter, (5 Cowen, 280.) The same equitable principle was acted-on by that court in the subsequent case of Richardson v. McDoughall, (19 Wend. Rep. 80.) The statutory provision contained in the revision of 1830, (1 R. S. 375, § 68,) clearly does not apply to the case under consideration. For that only gives an action, to the purchaser, against the plaintiff in the execution, for whose benefit the property was sold. And merely in those cases where such purchaser has been evicted in consequence of an irregularity in the proceedings concerning the sale, or in consequence of the judgment being vacated or reversed. There is indeed a remedy over against the defendant^ in the execution, in favor of the plaintiff therein; but it is only given to him after he has been compelled to refund the purchase money, upon the sheriff’s sale, to the purchaser who has been thus evicted. Where the plaintiff in the judgment is himself the purchaser, and has been evicted for want of title in the judgment debtor, his remedy depends still upon the equitable principle of our colonial common law, derived originally from the statute of Henry the 8th as applied to sales of land upon execution ; which became the substitute for an extent by elegit. This equitable principle has been applied, by analogy, to sales of personal property and chattel interests in lands, where the plaintiff became the purchaser and was subsequently deprived of the benefit of his purchase, for want of title in the judgment debtor. And where the common law did not provide for such cases they were proper subjects for the interference of the court of chancery; or for relief upon a summary application to the equitable power of the court out of which the execution issued. In the territory comprising the present states of Massachusetts, New Hampshire and Maine, where no court of equity existed, the case was provided for by the colonial law of 1674, which provided that where a party had obtained an execution and levied the same upon lands, houses or goods, if it afterwards appeared that such lands, houses or goods did not belong to the party against whom the judgment was rendered, the party who had thus levied his execution thereon, by mistake, upon making it appear to the court which rendered the judgment, such court should order a new execution for satisfying the judgment; notwithstanding the former execution returned. (See opinion of Mr. Justice Woodbury, in Whiting v. Bradley, 2 New Hamp. Rep. 85.)

In the case of Jones v. Henry, (3 Lift. Rep. 435,) the court of appeals in Kentucky decided that the plaintiff in the execution, who had indemnified the sheriff for selling property which it was afterwards ascertained did not belong to the judgment debtor but to another person who had recovered the value thereof in an action against the sheriff, was entitled to relief against the judgment debtor to the extent of the sum endorsed upon the execution. This decision was afterwards followed by the same court, in the case of Price v. Boyd, (1 Dana's Rep. 436.) A similar decision was made by the supreme court of Illinois, in the case of Warner v. Helm, (1 Gilm. Rep. 220.) The equitable principle before referred to and which is recognized in these decisions is applicable ,to the case now under consideration. For it is alleged in the bill, and admitted in the answer, that the complainant purchased the premises at the sheriff’s sale, under a belief that the title was in the judgment debtors or one of them at the time of the docketing of the judgment. And this is admitted by the answer of the defendants. Indeed, in the statement of their property, furnished to the complainant and to the defendant banks in the spring of 1834, Hoffman &. Mersereau represented to the complainant that they were the owners of the John Garretson lands of 4100 acres. The case therefore is like that of Muir v. Craig, (3 Blackf. Rep. 293;) where the supreme court of Indiana granted relief to the purchaser, against the judgment debtor who had represented the lands sold by the she* iff as belonging to him, but it was subsequently ascertained-Jiat such was not the fact. 1 am aware that the supreme, cf art of Pennsylvania, in the case of Freeman v. Caldwell, (10 Watts' Rep. 1,) has decided that a sale of real or personal estate to the amount of the judgment is an absolute satisfaction of the debt. And also that the plaintiff is without remedy, although it is afterwards established that the property bid off by him did not belong to the judgment debtor, and the same has been recovered of the purchaser by the real owner. But without deciding what the form of the relief should be in the present case, I have no doubt that the Bank of Utica would be entitled to relief in some form, against the judgment debtors, if a decree should be made against that bank upon the ground that none of the judgment debtors had any title to the land sold by the sheriff, either at the time of docketing the judgment or afterwards. And if so, Hoffman was an incompetent witness to prove that the defendants in the judgment, or any of them, were the owners of the real estate in controversy at the time the lien of the complainant’s judgment attached, or at any time subsequent thereto and previous to the sale upon the execution. For if the complainant should fail in this suit upon the ground of a want of title in all or any of the judgment debtors, Hoffman & Mersereau would not only be liable for the payment of the amount of their bonds and mortgages to the two defendant banks, but also for the whole amount of the judgment of the complainant. But, on the other hand, if the complainant succeeded in establishing the fact that the title to the property sold under the execution was in the judgment debtors, the liability of Hoffman and his copartners to the Bank of Utica would be discharged, at least to the amount of the bid at the sheriff’s sale. The whole of Hoffman’s testimony in relation to the title of the judgment debtors, or any .of them, to the lands in controversy, or which has any bearing upon that question, was, therefore, properly suppressed, by the vice chancellor.

I think, however, this witness was not disqualified, by interest, to give testimony in favor.of the complainant to rebut the charge that the judgment wi i fraudulent and void as against the two defendant banks. Nt r was he incompetent as a witness for the complainant upon t. e question as to the acceptance of the chattel mortgage by the latter, or as to the amount ol lumber embraced therein, and of the proceeds thereof, and what was done with such proceeds, and the fact of his agency. And in this court, where many issues are frequently combined in one suit, a wjtness is not to be rejected altogether because he may be interested as to one part of the case, when as to another part of the case he has no interest whatever. But he may be examined as a witness to that part of the case in which he has no interest, or in which his interest is adverse to the party calling him. (Gresley on Eq. Ev. 248. 2 Wend. Rep. 201. Rowe v. Cockrell, 1 Bail. Eq. Rep. 127.)

Hoffman, so far from being interested in favor of the complainant in relation to the question of fraud in the judgment, appears to have been interested in favor of the parties against whom he was called and examined, on this point in the case. For if the title to the land was in the judgment debtors at the time of the giving of the bonds and mortgages to the two defendant banks, a decree against the claim of the complainant upon the ground that the judgment was fraudulent and void as against those' mortgagees, would enable the mortgagees to obtain satisfaction of their debts by a foreclosure and sale of the mortgaged premises. But such a decree would not, as between the complainant and Hoffman & Mersereau, prevent the sale of the premises by the sheriff from operating as a satisfaction of the judgment, to the extent of the complainant’s bid, and a satisfaction, pro tanto, of the debts included in the judgment.

In reference to the testimony of this witness in relation to the acceptance of the chattel mortgage, and to his agency under the complainant, and as to the amount of lumber covered by the mortgage, and the disposition of the proceeds of the sales thereof and the liability of his copartners for the debts of Love, Pickering & Co., Hoffman might be, and probably was, interested in the questions propounded by the counsel for the complainant. That, however, only went to his credibility. But in relation to all these matters I cannot see that he had any interest in the event of this suit. It is true if the complainant should be defeated in this suit, net upon the ground of a want of title in the premises in controversy in the judgment debtors, nor upon the ground that the judgment was fraudulent, but upon another ground taken in the answer, that the complainant by the chattel mortgage had obtained full security for the indebtedness to the Utica Bank, and that having- such security it was inequitable as against the mortgagees, to suffer that fund to be wasted, or misapplied, and to enforce their judgment against the mortgaged premises, Hoffman & Mersereau, or Hoffman alone, would be answerable to the complainant for so much of the property included in the chattel mortgage as would be equal to the amount .bid at the sheriff’s sale. But on the other hand the witness would receive a corresponding benefii. For by such a decree the premises in controversy would have been applied to the payment of the bonds and mortgages to the defendant banks; for the amount of which bonds and mortgages, Hoffman, as well as the other members of his firm, was liable, at the time of his examination as a witness, and would continue to be so liable if the charge of fraud in the ■ judgment should be disproved, by his testimony, so as to enable the complainant to succeed in this cause. And whatever might be the result of the suit, Hoffman would be accountable to his copartners for their shares of all the copartnership property, disposed of by him, which was not applied for the benefit of the firm. Nor could the evidence given by him in this suit avail him any thing upon that accounting.

For these reasons the vice chancellor should not have suppressed the whole of the testimony of Hoffman; but only so much thereof as related to the title of the judgment debtors, or of John G. Mersereau, to the premises in controversy, at the time of the docketing of the judgment of the complainants. ’ The residue of the decretal order as to the suppression of the testimony of Hoffman, including the direction as to the costs of the motion to suppress, must be reversed; without costs to either ■ party on that motion.

The next question to be considered is whether the vice chancellor erred in refusing to suppress the deposition of H. G. Cot- ■ ton as a witness for the defendants. The testimony of this witness as to what took place, and as to what was said, upon the giving of the bond and warrant, was objected to by the counsel of the complainant, and also by Hoffman himself, who was not a party to the suit. But it was called for not only by the defendant banks, but also by John G. and James G. Mersereau, two of the members of the firm for which he was employed to draw the bond and warrant and to enter up the judgment thereon. He stated that he never was employed by the Bank of Utica, and received no communication from any of the officers of that institution on the subject of the bond and warrant or of the entering of the judgment thereon; and that, as those who employed him differed on the question, he did not know what it was his duty to do as to giving testimony on the subject. And said he preferred to stale the facts and leave the question as to their admissibility as evidence, in favor of the complainant, to the decision of the court. The witness then testified, in- substance, that a few days before the bond and warrant were executed, Hoffman and the Mersereaus called upon him at his office and said they wished to give a judgment to the Bank of Utica; that the Steuben County Bank and the Chemung Canal Bank were crowding them, and that they owed a number of other debts; that they wished to have this judgment in favor of the Bank of Utica, upon their property, because that bank was friendly to them and would protect them; that the judgment being for a large amount their creditors would not be likely to prosecute them, or force a sale of their property, and that they would have an opportunity to dispose of their lumber and pay up as far as it would go; and it would pay their debts or nearly so; that the claim of the Bank of Utica, as the witness then understood, was between seventeen and eighteen thousand dollars; that Hoffman proposed to give a judgment for a larger amount, somewhere between twenty-three- and twenty-five thousand dollars; that upon the witness advising them not to give the judgment for more than was due,' as they would be concluded by it, Hoffman replied he had no fears on that subject, for the cashier of the bank was a high-minded and honorable man, and would do what was right; that as one of the other members of the firm expressed some reluctance to giving the judgment for so large an amount as Hoffman suggested, the witness inquired if they had the means of ascertaining what was actually due the bank, and they said they did not know that they had ; that it was finally agreed that they should go home and make out a statement of the amount of such indebtedness, and that either the witness, or his partner, would call there in a few days and get the amount for which the judgment was to be entered; that in the course of the same conversation it was stated by them that they would have the control of the judgment; that it was not to be given because the Bank of Utica had requested it, but for their own safety; that they had' given the bank a chattel mortgage which was a sufficient security; and that Hoffman said the Chemung Canal Bank and the Steuben County Bank had commenced war upon them, and that they took this step to protect themselves. The 'witness further testified that at the time the bond and warrant were executed he went to the store' of Hoffman & Mersereau and they then presented to him a statement of their indebtedness to the Bank of Utica, and he inquired if that was the correct amount due, and they all agreed that it was more than they supposed was due, but said they had not the means of ascertaining precisely what was due to the bank; that the witness ■ then inquired if he should make the bond and warrant for that amount, and Hoffman said yes; that they should probably want to get more money, and if the judgment was given for more than was due, they could get more and the judgment would be security for it; that the bond and warrant were accordingly filled up for the amount mentioned in the statement which they had prepared, and it was executed by the members of the firm of Hoffman & Mersereau ; and that the witness then took them for the purpose of entering up the judgment thereon. The .witness further stated, that- before the judgment had been entered Hoffman called on him and inquired what he had done, with the papers; qnd being told that the witness and his partner were in the habit of entering their judgments at the clerk’s office at Geneva, inquired if it could not as well be entered at Utica; that being answered in the affirmative, Hoffman said he was going to Utica in a few days and would take the papers to the agent cf the witness at that place; and that he at the same time stated to the witness that he wished to leave the papers at Utica himself, so that it might not be known for some days that the judgment was entered, because the Steuben County Bank and the Chemung Canal Bank were about making some searches.

From this statement of the testimony of Cotton, it appears that the whole circumstances which he was called upon to disclose, except the mere fact of the execution of the bond and warrant, which was a matter of no consequence in the cause, were conversations of his clients in reference to the subject of his professional employment; which conversations it is wholly improbable they would have held with him if they had not been under the supposed seal of professional confidence. And I think the true principle in reference to privileged communications between attorney and client to be, that where the attorney is professionally employed, any communication made to him, by his client, with reference to the object or the subject of such employment, is under the seal of professional confidence, and is entitled to protection as a privileged communication. Such appears to be now the settled rule of the courts of England; although it was at one time attempted to confine the privileges 'to communications made in the prosecution or defence of a suit which had been, or was about to be commenced. The leading cases on the subject there are Cromack v. Heathcote, (2 Brod. & Bing. Rep. 4,) in the court of common pleas, and Greenough v. Gaskell, (1 Myln & Keen’s Rep. 98,) and Herring v. Clobery, (1 Phillips’ Rep. 91,) in the court of chancery. The last of these cases was preceded, in this state, by the very well considered opinion of Mr. Justice Bronson in the case of Coveney v. Tannehill, (1 Hill’s Rep. 33,) in the supreme court. The same correct principles had long previously been recognized in this country, in the opinion of the late Judge Roane of the court of appeals of Virginia, in the important case of Parker v. Carter and others, (4 Munf. Rep. 273.) There a lawyer had .been employed by the grantor to prepare a deed, to be executed' by him to a trustee, for his daughter and her issue. • And although the client was dead, and the contest was between -the parties claiming under such deed and the creditors of the son-in-law of the grantor, the attorney was not permitted to testify as to conversations of the grantor, in relation to the object and the subject matter of the deed ; for the purpose of showing that such deed was given to defraud the creditors of the daughter’s husband. For it is also a well settled principle in relation to privileged communications, between an attorney and his client, that the seal of confidence is not the seal of the attorney, but of his client. The attorney is by law, as well as by professional honor, bound to keep the seal intact; and it cannot be removed except by the consent of the client.

Professor Greenleaf, in his very valuable and well arranged treatise on the law of evidence, very correctly observes , in relation to such communications, that the seal which the law once fixes upon them, remains forever; unless removed by the party himself in whose favor it was there placed. (Greenl. Ev. 278, §243.) And where the privilege belongs to several clients, I do not think any one of them, or even a majority, contrary to the expressed will of the others, can waive the privilege, so as legally to justify the attorney in giving testimony in relation to such privileged communications; especially in a case like the present, where the testimony of the attorney, as to matters communicated to him professionally, equally affects the moral characters of all of his clients ; by showing that they employed him to assist them in giving a fictitious judgment for the purpose of defrauding their creditors. Nor does the fact that the client, whose assent to the removal of the seal of professional confidence from privileged communications has not been obtained, is not a party to the suit in which 'his attorney is called upon to testify, alter the case. (Per Buller, J. in Wilson v. Rastall, 4 Term Rep. 760. Rex v. Withers, 2 Camp. Rep. 578.)

In this case it appears from the exemplification of the judgment, which is in evidence, that Cotton, the attorney, was a subscribing witness to the warrant of attorney, which he f re-pared for Hoffman & Mersereau to execute. But that does not alter the case in reference to the admissibility of his evidence as to the declarations of his clients tending to the conclusion that the object of giving the judgment was to hinder and delay-their creditors in the collection of their debts, and that it was given for a much larger sum than was justly due to the complainant. For the conversations with his clients, as to which he volunteered his testimony, after the examiner had decided that it was improper, were in no way connected with his character of subscribing witness to the warrant of attorney. The conversations which took place on or before the 20th of September, the day on which the bond and warrant were dated, were previous to the preparation of those instruments; and were in ref erence to the amount for which he should draw the bond and warrant which he was about to prepare for them in his character of their attorney. The object of his inquiries, to which many of their declarations were responsive, was to ascertain the proper amount to be inserted in the uond and warrant; or rather for what amount they desired to give a judgment to the Bank of Utica.

In the case of Robson v. Kemp, (5 Esp. N. P. Rep. 53,) which was cited by the counsel for the defendants, upon the argument, to show that an attorney who becomes a subscribing witness to an instrument is bound to disclose all that took place at the time of its execution, Lord Ellenborough expressly declared that the attorney was not bound to disclose what took place in the preparation and concoction of the instrument which he witnessed, or at any other time, not connected with the execution of such instrument. Thus an attorney who is professionally employed to prepare a deed for his client, and who afterwards witnesses its execution, may be compelled not only to prove the execution of such deed, but also to testify whether it was ante dated ; whether it. was in the same form in which it now appears at the time of its execution, or has been altered ; and whether it was actually delivered at the time he subscribed his name thereto, as a witness. So if the deed has been lost, or is in the hands of the adverse party who refuses to produce it tipon the trial, or for the purposes of the suit, tho attorney who witnessed the deed may be compelled to testify, as to the contents thereof; although in the preparation of such deed he was professionally employed. (See Lord Say and Seale's case, 10 Mod. Rep. 40; Assignees of Blakely v. Kemp, 4 Esp. Rep. 235; Lessee of Devoy v. Burke, 2 Fox & Smith's Rep. 191.)

The seal of professional confidence I believe has never been held to cover a communication made to an attorney to obtain professional advice or assistance as to the commission of a felony or other crime which was malum in se. The opinion of Chief Baron Gilbert certainly was that the privilege of attorney and Counsel did not extend to such cases. (1 Gilb. Ev. 277.) And as no one is entitled to the advice or assistance of counsel, or of an attorney, to enable him to do an illegal act, if the question had arisen for the first time in this case, I should have no hesitation in deciding that the communications made by Hoffman &■ Mersereau to their attorney were not privileged; because they were made for the purpose of getting his professional assistance in the perpetration of a fraud upon their creditors. It is as contrary to the duty of an attorney, or a counsellor, to aid his client, by professional services, in the perpetration of a fraud, or in the violation of any law of the state, as it is to aid him in the commission of a felony; although the moral turpitude of the act may be much greater in the one case than in the other. I can therefore see no good reason for extending the principle of privileged communications to the first class of cases, and not to the last. The practice, however, appears to have been otherwise for more than a century and a half; and 1 do not now feel authorized to adopt a new rule on the subject.

As early as 1693, in the anonymous case, reported by Skinner, which was tried before Chief Justice Holt at the sittings after Michaelmas term, in the 5th of William and Mary, ail attorney who had drawn an agreement between a sheriff and his under sheriff was called to prove that such agreement was corrupt and illegal. But the professional privilege was extended to the case. (Skin. 404. Holt, 76.) By referring to another report of the same case, from the collections of Lord Cfciof Justice Raymond, it will be seen that the agreement, which the attorney was called to prove the illegality of, was an agreement made in violation of the statute against buying and selling offices. (1 Ld. Raym. Rep. 733.) Justice Buller has also a note of the same case, by the title of Holt v. Tyrrel. (Bill. N. P. 284.) But he is evidently wrong in supposing it was decided in the 13th year of the reign of George (he First. For Lord Chief Justice Holt died in 1709 ; five yéars before the commencement of that reign. In the case of Cromack v. Heathcote, (4 J. B. Moares Rep. 387,) an attorney had been applied to for the purpose of drawing á fraudulent assignment which he declined doing; and the assignment was subsequently drawn by some other person. ■ The attorney first applied to was offered as a witness to prove the fraud. But the court rejected the evidence; upon the ground that the communications made to the attorney were privileged. So in the case of Hyde v. M-, (1 Moll. Rep. 450, n.) the client consulted an attorney as to the best manner of evading the demands of his creditors, and the attorney recommended a fraudulent mortgage, which he prepared accordingly. The attorney being examined as a witness to prove those facts, the toaster of the rolls suppressed the deposition; as being a breach of professional confidence. And in Doe v. Harris, (5 Car. & Pdy. Rep. 592,) where the question was whether the deed given by an insolvent, was not fraudulent; the attorney was asked whether the insolvent had not called upon him to draw the deed for the purpose of defrauding his Creditors. Mr. Justice Park rejected the evidence, as a violation of the professional privilege. A similar decision was made by the supreme court of Massachusetts, in the case of Foster v. Hall, (12 Pick. Rep. 89;) Where the client was not a party to the suit, and the attorney was called upon to show that he was consulted by the grantor,- in relation to the making of a deed to the complainant. The object of calling the attorney being to establish the fact that such deed was fraudulent. In the case of Clay v. Williams, (2 Muf. Rep. 105,) where an attorney had been examined as a witness in the court of chancery, and testified that he was employed to draw the bond in controversy, and that it was given for the purpose of defrauding creditors, two of the judges of the court of appeals in Virginia appear to have considered the deposition as legal evidence. But Judge Roane held the matters confided to the attorney, by the parties who employed him to draw the fraudulent deed, to be privileged communications; and that the testimony of the witness, as to the disclosure of the fraudulent object of giving the deed, should be disregarded. The question however was not decided ; the other member of the court who heard the argument of the case expressing no opinion upon that point, which did not affect the decree to be made by the court. With the exception of what was said by Mr. Justice Bronson in Coveney v. Tannehill, (1 Hill’s Rep. 36,) my researches have not enabled me to find any thing in conflict with the decisions to which I have referred. I therefore do not feel authorized to say that the fact that Cotton was employed by Hoffman & Mersereau to assist them in a transaction which, from what was said in his presence, he must have known to be a fraud upon their creditors, deprived their communications of the seal of professional confidence. I admit, however, that I should have been much better satisfied if I had found this question an open one ; or rather if I had found the decisions of the courts the other way. For I think with the late chief justice of our supreme court, that the privileged relation of attorney and client ought to be permitted to exist only for honest purposes ; but not to enable the client to perpetrate a fraud, or to violate the laws, under the advice of counsel, or through any other professional aid.

For the reasons before stated, however, the application of the complainant to suppress the testimony of Cotton ought to have been granted by the vice chancellor. And so much of the decree appealed from as denies that application with costs, must be reversed.

Upon the question of fraud, if the testimony of Cctton could have been received, and the explanations of Hoffma i rejected, it would have been very difficult to bring the mind to a conclu sion that the judgment was not in fact given for much more than was justly due from Hoffman & Mersereau at the date of the bond and warrant. Even with the testimony of Hoffman, I am not perfectly satisfied that the Mersereaus were interested in the firm of Love, Pickering &. Co. And if they were not, the Bank of Utica probably had no legal claim upon the firm of Hoffman & Mersereau for payment of any of the notes of Love, Pickering & Co. which were endorsed by C. Hoffman only. But I think the counsel for the defendants was wrong in supposing that only about $17,500 could properly have been included in the judgment. It is true, the statement which Hoffman furnished to the banks about the first of June, 1834, only showed an indebtedness of about $17,000 from Hoffman & Mersereau to the Bank of Utica. And this was probably for the amount due upon the eight notes and drafts, copies of which were sent to Groom, at Port Deposit, in Hunt’s letter of the 13th of August, 1834; and as constituting the debts which were secured by the mortgage upon the lumber. It appears in that statement which was furnished to the banks, however, that Hoffman & Mersereau owed to Joel Hoffman about $3300. And probably that indebtedness was for the two notes of $1200 each, and the one note of $800, drawn by some of the members of the firm and endorsed by other members thereof; and upon which Joel Hoffman’s name also appeared as an endorser. He may therefore have gotten those notes discounted at the bank on his own account. And as the firm of Hoffman & Mersereau were not the makers of those notes, they would not upon the books of the bank be charged to the account of that firm ; although they were in fact given to Joel Hoffman for debts of Hoffman & Mersereau, and the names of all the members of the firm were on the notes, as makers or endorsers. It will be seen that the amount of these three notes and of the eight drafts and notes of which copies were sent to Groom as being those included in the chattel mortgage, together with the note of $1575, of Love, Pickering & Co., all of which are embraced in the exhibit T. C. C., with the interest thereon to the 20th of September, 1834, and 'he costs of protest, correspond exactly with the sum which was inserted in the bond and warrant of that date. This part of the exhibit T. C. G. must have been made at or before the time of the execution of those instruments at the store of Hoffman &■ Mersereau. And by a reference to the testimony of T. L. Mersereau, it will be' seen that in a conversation previous to the execution of the bond and warrant, Hoffman agreed to ascertain and make a calculation of the amout due as near as he could. (Defts. Dep. 399.) This supposition is also suppprted by the testimony of Colling, the book-keeper of the bank. For that witness testifies that Hoffman presented that statement, of the debts included in the papers upon which the judgment was to be en tered; and that the witness "was called upon to compare that statement with the notes and drafts then held by the bank, and to see if they corresponded in dates and amounts with such statement. The witness made some corrections in red ink; which were' only additions of the names of other persons who had endorsed some of the paper. And he added at the bottom of the statement, also in red ink, the amount and particulars of two other notes, drawn by Love, Pickering & Co., then held by the bank, and of one note of Giles Love; all three of which were endorsed by Cliancey Hoffman, one' of the members of-the firm of Hoffman & Mersereau. The names of the other two members of the firm of Hoffman & Mersereau did not appear upon either of the three last mentioned ncites, or upon the $1575 note of Love, Pickering & Co. which wets embraced in the statement on which the bond and warrant were based, as prepared by Hoffman. The book-keeper therefore probably could not know whether the bank had any claim Upon the firm of Hoffman & Mersereau for the payment of either of those four notes.But from his testimony I have no doubt that the Bank of Utica, at that time, actually held all the notes and drafts embraced in the exhibit T. C. C.; amounting in the aggregate to more than $26,000. And as John G. Mersereau and James G. Mereereau were either drawers or endorsers of all the other drafts and notes embraced in that statement, they were prima facie liable to the bank for the payment thereof.

The giving of the bond and warrant, by all the members of the firm of Hoffman & Mersereau, for the amount of the $1575 note of Love, Pickering & Oo. is presumptive evidence that they were legally or equitably liable for the payment of that note; either because they were interested in the last mentioned firm as copartners, or because it was an accommodation note made and discounted for their benefit. And the defendants, who insist that the taking of a judgment, and including therein the amount of that note, is evidence of an intention to defraud other creditors of Hoffman & Mersereau, are bound to satisfy the court that the officers of the bank have intentionally allowed a debt to be included in the judgment for which the bank had no legal or equitable claim upon the judgment debtors.

Although the testimony of Hoffman, contradicted as it is, in many particulars,, by the testimony of other witnesses, has not entirely satisfied me that this $1575 note was properly included in the judgment, the manner in which the members of this firm did their business, and the complicated nature of their various transactions were such that I cannot say the fact is established that such note ought not to have been included. Much less have the defendants established, by any legal testimony, that even the members of that firm intentionally included in. the judgment a debt which they knew they ought not to pay; and with the corrupt intention of defrauding their other creditors.

It may also be proper to observe, that if the whole amount included in the judgment was justly due to the Bank of Utica, from Hoffman & Mersereau, any expectation on the part of the members of that firm, or of any of them, that the judgment would be used for the purpose of enabling them to delay or hinder their other creditors, would not render the judgment fraudulent, as to th'e bank; unless there ivas some agreement, or at, least an intention, on the part of some of the officers of that institution, that the judgment should be thus used. But if the bank was already amply secured for all its legal and .equitable claims against Hoffman & Mersereau, by virtue of the mortgage upon the lumber at Port Deposit, in Maryland, the taking of this judgment and thereby creating a lien upon all the property of their debtors in this state, might be evidence of such an intention to defraud other creditors.

. The letter of the cashier, to Hoffman', post-marked at New-York the 14th of September, is relied upon by the defendants to show that the cashier not only considered the chattel mortgage an ample security for all the debts due to the bank, but that he had made a journey from New-York to Philadelphia for the sole purpose of suggesting the giving of a judgment merely to delay the other creditors of Hoffman & Mersereau in the collection of their honest debts. Such undoubtedly is the construction which a person having but a slight knowledge of human nature would be likely to put upon that letter. My understanding of it is directly the reverse of that, however, when I view it in connection with other facts which are in evidence in this cause. I think the cashier at lliat'time had become seriously alarmed as to the safety of the debts due to the bank; and that he went to Philadelphia for the purpose of seeing Hoffman, and to induce him, if possible, to persuade his copartners to unite with him in a judgment; which would give the bank a further security for its debts by a lien upon their real property in this state. I can well see then, that he was indeed “mortified as well as vexed,” when he supposed Hoffman, and his friend Love had kept out of the way to avoid seeing him. This letter, therefore, was probably written to remove the impression that the cashier had visited Philadelphia to press Hoffman for the debts due the bank. And most of it may be considered what is vulgarly called soft sadder. This letter was probably forwarded to Erwin Centre/ and was received there by Hoffman previous to the giving of the bond and warrant; and if so it had the effect intended, of uniting him to the purposes of the cashier. •

But there is nothing in this letter from which it can be fairly inferred that the cashier “ had intended to suggest” the giving Of a judgment for any thing more than was honestly due from Hoffman & Mersereau to the bank. And probably the inolnd ing therein the three notes upon which Joel Hoffman’s name appears as endorser, and which I have supposed were discounted by the bank as business paper of Hoffman & Mersereau held by him, was probably done upon Chancey Hoffman’s own suggestion ; for the protection of Joel Hoffman, who was perhaps a near relative.

From the evidence in the case I am not prepared to say that the chattel mortgage upon the lumber at Port Deposit was a full and ample security, even for the eight notes and drafts mentioned therein. And it was no security whatever for these three notes on which Joel Hoffman’s name appears. Upon the whole, I think the vice chancellor was right in supposing that the defendants had failed in showing that the judgment of the 10th of October, 1834, was fraudulent and void as against the defendant banks, and other creditors of Hoffman & Mersereau.

No one can justify the gross and deliberate fraud which was practised upon the defendant banks, in inducing them to give up the paper which they held against Hoffman & Mersereau, and to allow an extended credit for the greater portion of their debts, upon the supposition that they were obtaining valid securities, by mortgage, upon the real estate of their debtors, free from all prior incumbrances. And the fact that such a fraud was committed, and that Hoffman was the principal therein, detracts very much from the credit to which he might otherwise have been entitled as a witness. But as the Bank of Utica and its officers had no knowledge of, and no participation in that fraud, it can only affect that bank so far as it affects the character of the principal witness of the complainant in this suit.

I think the evidence in the case fully establishes the fact that the Bank of Utica, by its agents, accepted of the chattel mortgage, which was executed by two of the members of the firm of Hoffman & Mersereau. Whether the mortgage was valid to convey the interest of the copartnership to the complainant, in the form in which the mortgage was executed, is a question upon which it is not necessary to express an opinion. But even upon the supposition that the property was properly pledged to the Bank of Utica, for the security of a part of the debt for which this judgment was confessed, I do not see how it can avail the defendants as a defence to this suit. There is no pretence, I think, for insisting that the complainant was answerable to Hoffman & Mersereau for the proceeds of the mortgaged lumber which had been sold by any of the members of that firm, or by persons in their employ, previous to the dissolution of the attachment. The mortgage money was not payable until the first of December, 1834. Of course the complainant had no right, nor any authority from the mortgagors, to sell any of the lumber previous to that time. And if Hoffman was agent for the mortgagee, it was only to do what the Bank of Utica was itself authorized to do; that is, to take care of the property and prevent it from being lost, until the mortgage became payable. Before that time arrived the property was attached; and it remained in the custody of the law until some months afterwards. No part of the debts secured by that mortgage had been paid by any sales of lumber at the time the judgment was given. Nor has any part of those debts been actually paid by the proceeds of any sales thereof since that time; though there is evidence to show that, subsequent to the dissolution of the attachment, Hoffman was authorized, by the officers of the Bank of Utica, to sell that part of the mortgaged lumber which he took to Philadelphia. Most of the proceeds of the mortgaged lumber, however, whether sold by Hoffman or by James G. Mersereau ; were applied to the use of the firm of Hoffman & Mersereau, either in the payment of debts or otherwise. The only equitable claim, that the defendant banks can have upon' the complainant, therefore, arising out of this chattel mortgage, must be that having two securities for a part of the debt embraced in the judgment, and knowing that the defendant banks had a specific lien by mortgage upon the property covered by one of those securities only, it was inequitable to permit Hoffman and Mersereau to receive or have the benefit of the property embraced in the other security; but that the proceeds of the lumber mortgaged should have been applied in payment of the judgment, pro tanto. The vice chancellor is right, however. in supposing that there is no evidence that the Bank of Utica, or its officers, had any notice of the giving of the mortgages to the defendant banks, until it was too late to secure the mortgaged lumber, or the proceeds of it.

But as a part at least of the debts secured by the judgment, which were not embraced in the chattel mortgage, would still have remained unpaid, the complainant, even in equity,'would still have acquired a good title to the premises in controversy in this suit; for the recovery of which premises this ejectment bill has been filed. The only remedy for the defendant banks, therefore, was by a cross bill, or more properly an original bill, on their part, to recover a part of the proceeds of the sheriff’s sale ; or for an account and payment of so much of the proceeds of the sale of the mortgaged lumber as the complainant might with proper diligence have secured and applied to the payment of the judgment, after notice received of the-equitable rights of the defendant banks by reason of their mortgages upon the premises in controversy.

For these reasons the decree appealed from must be reversed and modified, as before suggested, in relation to the suppression of the testimony of Hoffman and of Cotton; and it must be affirmed in all other respects. Neither party having succeeded fully upon these appeals, it is not a proper case to give costs upon such appeals to either party against the other. And as it appears from the defendant’s notice of appeal, that they gave security, as required by the revised statutes, to stay the complainant’s proceedings pending the appeal, the usual directions must be given for the payment, by the Steuben County Bank, and the Chemung Canal Bank, of the value of the use and occupation of the premises during the pendency of the appeal; and for any damages which the complainant may have sustained by the commission of waste in the meantime.

Case Details

Case Name: Bank of Utica v. Mersereau

Court Name: New York Court of Chancery

Date Published: Jun 30, 1848

Citation: 3 Barb. Ch. 528