Barrow v. Rhinelander

1 Johns. Ch. 550 | New York Court of Chancery | 1815

The Chancellor.

This is a strong and peculiar case, which calls for relief. There appears to be very great reáson to presume an abused confidence. The defendant was the confidential clerk of Prior, and kept his cash accounts, and had free access to all his papers and moneys. From the beginning almost of their connexion, Prior was embarrassed, and had recourse to the defendant for the loan of moneys. This created, at once, a delicate relation between the master and the servant; and the rapidity with which loans and debts were accumulated, securities exacted, the load of dependency increased, and blind and necessitous submission yielded, is distressing to learn, even as told in the defendant’s answer. There are two witnesses to the charge of usury; and the attempt made, by the defendant, to get rid of the charge, under the explanation of taking compound interest, is not sufficient. The defendant does not put himself upon the benefit of the settlements made from time to time, but he, in fact, opens the accounts by his answer, and admits that the entries in the cash books were generally made by him, and that they contain the evidence of his loans. There is, also, proof of mistakes and deficiencies in the cash books, and of alterations. One mistake, for instance, of a charge, by the defendant, of 5001., on the 15 th of June, 1792, is not in the books'. Other mistakes are alleged and shown; other instances of abused confidence are charged, as taking property from Prior, without his assent. In short, there are so many unpleasant and suspicious circumstances attending this case, leading so strongly to an inference of usury, oppression, and fraud, that it appears essential to the honour of the court, and the ends of justice, that all these multiplied settlements and obligations should be set aside, and that an account, at large, from the commencement of their dealings, should be taken and stated.

The cases cited by the counsel for the plaintiff, bear very pointedly upon the circumstances of this case, and show, that there is nothing unusual in granting the relief. Thus, in Bosanquet v. Dashwood, (Cases temp. Talbot, 37.,) adiill was filed by the assignees of a bankrupt, charging the defendant’s testator with lending on usury, and that agreements for that purpose were made and repeated from 1710 to 1724. It was a case of apparent extortion and oppres- - sion, and the accounts were ordered to be opened, and the demands reduced to moneys really lent, with lawful interest thereon. So, also, in Vaughan v. Lloyd, cited in 5 Vesey, 48., which was a case of principal and agent, and of abused influence and confidence by the agent. A variety of deeds and settled accounts were opened, though the accounts had been settled from time to time, and the defendant insisted on the benefit of those settlements. It appeared that several sums of money were charged'improperly, and the accounts were impeached in several points, and the defendant was compelled to prove his accounts though he might suffer; for the Chancellor approved of the doctrine in Piddock v. Brown, (3 P. Wms. 288.,) that where there are manifest signs of fraud, the obligee ought to be put to the proof of actual payment, and if he suffered, it was owing to his own conduct. The same decision was made in Watt v. Grove, (2 Schoale & Lefroy, 492.,) which was, also, the case of an agent availing himself of the negligence and extravagance of his principal. Indeed, the taking advantage of a man’s necessities is as wrong as taking advantage of his weakness. This is not the case of merely showing mistakes and omissions in a stated account, in which the party is allowed to do no more than surcharge and falsify. Appearances wear a more serious aspect, and the whole account ought to be opened from the beginning, as was done in Vernon v. Vawdy, (2 Atk. 119.,) after a period of 23 years. I do no more in this case, than has been repeatedly done in other cases which were not more oppressive in appearance.

I shall, accordingly, decree, in substance, as follows, viz.: “ that the accounts between the parties be opened from the 29th of November, 1790; and that it be referred to a master to state an account; and that, in doing it, the defendant be credited for all moneys loaned to Prior, or paid on his account, or received by Prior, belonging to him, between the 29th of November, 1790, and the 4th of July,. 1801, with interest on the same, from the time the moneys were received, or paid, to the time of taking the account; provided, that in stating such account, the master do make rests therein, at such times as it shall appear that the parties liquidated their accounts, and agreed that the interest then due should be considered as principal, and that the interest to be found due at the time of making such rests, and specially agreed to be paid in the particular case, be thereafter considered as principal. That, in taking the account, the master is not to admit, as evidence, any bond or obligation given by Prior to the defendant; that the defendant is to be credited for wages for the time he served as clerk, at the rate of 500 dollars a year, with interest thereon, at the end of each year; that he is to be charged with all moneys received from Prior, or from his property, or debtors, before he became a bankrupt, or from his assignees since, and with all moneys paid on account of the defendant, with interest thereon, &c., and with all goods sold by Prior to the defendant, or taken by him, between the periods aforesaid, with interest thereon, from the time the same were payable by the custom of the store; and with the principal sums due on all such securities taken by the defendant from Prior, without his permission, and of such securities as were assigned to him, and which he refused to deliver to Prior for collection, together with interest, &c.; and that he be, also, charged with all moneys received on the securities assigned, with interest, &c.; and with the principal and interest of such securities received from Prior, as have been lost by his negligence, default, or want of due diligence in collecting them. Audit is further ordered, that the defendant be credited with the moneys paid for costs and charges of collection, or endeavouring to collect, the moneys due on such securities, and which shall appear to have been reasonably expended, &c. ; and, also, with the amount of such moneys as the defendant may have justly paid for taxes, and other necessary charges upon the Population shares, and the lands in the county of Clinton, with interest, &c.; and it is further ordered, that the defendant re-assign the Inland Lock Navigation shares, if he can, or that the master report the value thereof, &c.; and that he reconvey the lands in Clinton county, and the forty-four Population shares in Pennsylvania, if he can, or that the master report the value, &c.; and it is further ordered, that the master have power to compel the production of books and papers in possession of either party, and. that he report, specially, any facts required by either party, and that the question of costs, and all further directions, be reserved.

where, at the hearingofacause9 and after the argument had been finished in part, an objection was made to the competency of a witSn7»akenebe-[“IbTeZreXaS plaintiff to prove the execution of a release of the witterest, by the ex-animation of witness, viva voce. without any SeU3fmdethat purpose-Witness may be examined) viva voce, at the hearing, for u particular purpose, as to prove exhibits which had been proved be-is to serve a previous order for that purpose, or notice, on the opposite party, four days before the hearing.

Decree accordingly.

At the hearing of the cause,^* Emmet, of counsel for the defendant, objected to the deposition of Prior, the bankrupt, _ . . on the ground 01 his interest, he not having released his . u ' ° right to the surplus of his estate.

Boyd, contra, insisted, that the objection came too late, the witness having been cross-examined by the defendant, before the examiner. He further offered to do away the . . , B , . , , ., . . . ,, objection, by proving, by a subscribing witness m court, the execution of a release by Prior to the assignees, dated the v e e o' 29th of March* 1803, of all his residuum of interest. This 7 7 offer was opposed, on the ground that there had been no previous notice of it.

The Chancellor directed the witness to be sworn. ty He observed that no objection was made to the competency of the ° 1 * witness until the argument was partly finished, and not until the counsel for the defendant had even made use of the deposition of the witness. And no reason is assigned why the party wishes for delay and time, by requiring four days notice of this mode of proving the release. This court has frequently admitted the examination of a witness, viva voce, at the hearing, for such a specific purpose as to prove ah exhibit, which had been neglected to be proved before the examiner. (1 Har. Chan. 594, 595.) The regular way would have been to have had a previous order for the purpose, served on the opposite party, four days before the hearing, so that the party might not be taken by surprise. But under the circumstances ofthis case,some special cause, at least, ought to be shown why such an order, or notice, as a substitute for it, should now be required. In strictness, the party may be considered as having waived his objection to the competency of Prior's deposition.

Witness examined.

* Sept. 28th.