2 Johns. Ch. 62 | New York Court of Chancery | 1816
The cause stood over for decision until this day, when the following opinion was delivered by
This is a suit by the son and heir of Henry Hart, calling the administrators of his father’s estate to account, and charging them with gross and multiplied acts of waste and fraud, by means of which, as it is alleged, a large and valuable estate, descended to him by inheritance, has been dissipated.
The testimony taken in the cause is voluminous, and the transactions which are embraced by the case are, in some degree, intricate, owing to the length of time, and the nature and variety of the subjects to which they relate. To give
1. Whether the accounts of the administrators, as exhibited in the first instance to the Court of Probates, and afterwards to this Court, be erroneous and false, and accompanied with concealments and fraudulent dispositions of various portions of the estate.
2. Whether the order of the Court of Probates for the sale of the real estate was either fraudulently obtained, or fraudulently executed; and,
3. In case these charges, or either of them, be true, what is to be the rule or measure of damages ?
[ * 76 ]
I ought, perhaps, to observe preliminarily, that in the course of the investigation, I have felt, with unusual sensibility, the weight and delicacy of the duty imposed on me, by reason of the magnitude of the inquiry, the relation *in which the parties stand to each other, the grave accusations, and the important principles which the case involves. On the one hand, the plaintiff is a young heir, stripped of all his expectations, and relying solely on the paternal protection of this Court in the assertion of his rights, which, he says, have been wantonly sacrificed during his infancy. On the other hand, the original defendants were administrators and trustees, who, by the nature of their undertaking, were charged with the execution of disinterested and burthensome trusts ; and I shall always be extremely averse to hold such characters responsible on slight grounds, or where there is evidence of fair and upright intention. But if the facts necessarily lead to the conclusion, that the administrators have been guilty of gross negligence, or of premeditated and fraudulent concealments and dispositions of the estate of the infant, it will then be equally my duty, however painful the performance of it, to animadvert upon sucLconduct with a freedom and severity due to truth and justice,
1. The administration of the personal estate of Hart was almost exclusively assumed by Ten Eyck; and Van Rensselaer, though a joint administrator, had little or no concern in it. We will, then, in the first place, examine how far Ten Eyck had rendered a just and true account of his administration, from the 15th of January, 1789, when letters of administration were granted, to January, 1802, when the account of the personal estate, and of the disposition of it, was rendered by the administrators to the Court of Probates.
[ * 78 ]
[ * 79 ]
The account exhibited by Ten Eyck to the Court of Probates is only an account of moneys received by him as administrator, and not of all the goods and chattels of Hart; 'and the oath that was administered in that Court, was only that the papers referred to contained a true account of his transactions, as administrator. Until the administrators were compelled to answer here to a charge of concealment and fraud, we have no explicit declaration on oath, what were the goods and chattels of Hart, which came to then-knowledge. In the words of Sir John Strange, (Orr v. Kaines, 2 Vesey, 194.) “ the omission to exhibit an inventory, which every i executor ought, especially in a deficient estate, was an imputation against him, and which always inclines the Court to bear harder on such an executor.”
There are not only very strong presumptions arising out of the circumstances which I have detailed, that more of the personal estate of Hart must have come to the hands of Ten Eyck than he has admitted, but the case affords direct and certain proof of the fact.
[ * 82 ]
Baxter says, that Hart, at his death, had, at the head of Lake George, a number of cedar posts, which were drawn to Fort Edward, by Pitcher and Negus, both of whom are now dead; and he believes they were owned by Hart, and were so drawn by direction of Ten Eyck, because he was so informed by Visscher, the agent of Ten Eyck, now dead; and he knows that the posts were drawn by direction of Visscher. He says, further, that in the winter after Hart's death, he received a letter from Ten Eyck, informing him, there was a quantity of cedar, part of which was suitable for vessel timber, lying at the head of Lake George, belonging to the estate of Hart, and requested him to carry the same to Fort Edward, to be rafted to Albany, on the boards and plank, which boards and plank the witness understood *were the same that belonged to Hart at his death. He says, the cedar and timber referred to consisted of about 100 garden or fence posts, and about 25 sticks, and that he drew it, and placed it, by the side of that drawn by Pitcher and Negus.
If this letter, referred to by Baxter, was lost, the parol proof of its contents was good evidence; and the presumption of its loss is very strong, arising from the lapse of time. It was an order acted upon and executed by the witness. It is coupled with facts. But we have another letter from Ten Eyck, relating to the lumber, which is free from any difficulty, for it is an exhibit in the cause, and is of decisive weight. The letter was dated the 11th of February, 1790,
[ * 83 ]
This letter is full of important disclosures. It was observed, by Archdeacon Raley, in his Horca Paulina, that amidst the obscurities, the silence, or the contradictions of history, if a letter can be found, we regard it as the discovery of a landmark, by which we can correct, adjust, or supply the imperfections and uncertainties of other accounts. We have here conclusive evidence that Hart had lumber at Lake George, which came to knowledge, and fell under the control of the administrator ; and this fact furnishes several necessary inferences, for it shows that the account exhibited by Ten Eyck must be untrue, and that the evidence of Baxter and Sherwood, as to the timber at Lake George, was perfectly correct; and it reflects credit and strength upon all the other testimony respecting the lumber. It shows, further, that there were then *cattle on the farm belonging to the estate, and employed in the business of drawing logs. This is in corroboration of the testimony of Baxter, that there were eight oxen and two horses left by the intestate, and of which the administrator gives no account. The cattle of the farm, which he says ought to work for the estate, must mean cattle that belonged to Hart. These could not have been the “ one old horse sold to R. Visscher for 61.,” and the “ two steers sold to Baxter,” mentioned in the answer as a part of the inventory; for the answer says, that the articles of which an inventory is now given, were, “ soon after the granting letters of administration, converted into money; ” and, in proof of this, it appears that George Wray, the purchaser of the most valuable article sold, is credited with the payment of it, as early as May, 1789. The conclusion appears to me inevitable, that the cattle, as well as the timber alluded to in this letter, of February 11th, 1790, were goods and chattels of the intestate, which thé administrator has thought proper not to account for; and this unexplained omission renders his answer utterly unworthy of credit.
There is also in this letter a gentle rebuke of Visscher, as being a careless agent of the estate, and a pretty plain intimation that the assets (whatever they were) were in a course to ruin, either from waste or plunder.
[ * 84 ]
In an estimate of the property of Hart, made by Ten Eyck, in his own hand, of the date of July, 1790, he says, “ personal property on the farm will sell for about 100Z.” What did he mean by this personal property, when he says now, that all the goods and chattels were converted into money soon after he administered, and when it appears, by his account, that he did sell to George Wray property specified in the inventory, to 981., and received payment in the spring of 1789? He certainly alluded to other personal *property than that specified in his inventory, or in the account annexed to his answer, and of course, he alluded to property of which he now omits to render any account. There is another fact still more fatal to any confidence in the account now exhibited. In an account in the hand of Ten Eyck, stated to be an account of his, as administrator, with the estate of Henry Hart, deceased, the estate is charged, as of the 10th of March, 1790, in these words: “ Paid for sail cloth and cable for raft, 61. 13s. 3d.” Is not this clear and convincing proof that the lumber mentioned by the witnesses came to the knowledge and possession of Ten Eyck, and that he went to this expense to transport it down the Hudson l I have not heard of any explanation attempted to be given to these circumstances; and I think the evidence, taken together, not only warrants, but absolutely demands, that Ten Eyck should be held to account for all this personal property belonging to Hart, which is ascertained and detailed in the case, and of which no account or credit has been rendered, and no explanation has or may be given. It is sufficient, at least, to establish the presumption that it all came to his possession, and to cast upon him the burden of acquitting himself of that presumption, by proof that it did not.
There is another fact that ought not to pass unobserved while we are upon this part of the case. In the account exhibited by Han Rensselaer, against the estate of Hart, and rendered to the Court of Probates in 1802, he adds, at the foot of the credit side of his account, these words: “ By 200 cedar posts omitted, 2s.—'20Z.” The question naturally arises, When and from whom were these posts received? There is no date or explanation given. It must be presumed that they were received after the death of Hart, and came through the hands of Ten Eyck, who had charge of all this personal estate.
[ * 85 ]
The conclusion of the examination on the subject of these personal assets, leads to very serious and painful reflections. *It is most undoubtedly true, that if this personal property
The account exhibited by Van Rensselaer, to the Court >f Probates in 1802, and again to this Court, in his answer, is the next subject for examination; and it is with deep regret, I am obliged to say, that a more inaccurate and unreasonable account has rarely fallen under my observation.
[ * 86 ]
It appears, by exhibit 12, that Hart, on the 20th May, 1784, by a receipt under his hand, acknowledged to have received of Van Rensselaer 1,400 dollars in final settlement notes, and which he promised to pay on demand, and on this receipt there was an endorsement by Van Rensselaer, of having received 905 dollars on the 15th April, 1785, which left a balance of 495 dollars due. But what was due ? Not 495 Spanish milled dollars, but 495 dollars in final settlement notes; and yet he charges them at par, and with interest, though they were probably not then worth, in the market, 3 shillings in the pound. He charges, *also, as prior in order to the note, for final settlement certificates paid Hart, in error, 76 dollars, and for Samuel Gilbert overpaid, 60 dollars, and for certificates issued twice to Hart, to 166 dollars, and for a certificate lent him on the 25th May, 1785, to 315 dollars. All these certificates are put down as at par, and interest charged accordingly on their nominal value. It is to be observed, that there is not a particle of proof, out of the charge itself, for any of these items, except the note, and the presumption would naturally be that the certificates paid in error, and the certificates issued twice, must have been charges existing, if at all, prior in point of time to the note, and must have been adjusted and settled when the note was given.
The mode in which interest is charged on all these certifieates, is in this random manner, viz: “Interest to 1791, average about 15 years, at 4 per cent., 271l. 3s. 4<Z.” This
[ * 87 ]
Another charge, in 1796, is as follows: “ Paid John W. Wendell, hat manufactory, 119Z. 6s.” So heavy a charge as this ought at least to have been accompanied with some intelligible explanation, if it was unsupported by any voucher. As it now stands, it is absolutely without meaning, in reference to the estate of Hart. The same observation applies to some other minor charges, on which I shall not detain myself; but I shall proceed to another charge, in respect to which there is a voucher in evidence. In the account presented to the Court of Probates, there is this charge, as of August, 1790: “Paid patent fees, on soldiers’ rights, 771. 6s. 8d., and interest thereon for 5 years, 281. 11s. 6d.” In the same account annexed to the answer, the sums are the same, and the date the same, but the charge is a little varied, and is in these words: “Paid patent *fees and other charges on soldiers’ rights, &c.” I presume Van Rensselaer, when he put in his answer, had discovered the receipt, which he took of the deputy secretary of state, on the 6th of August, 1790, and which shows that all the fees which he paid as administrator of Hart, on soldiers’ rights, was but 241. 12s. instead of 111. 6s. 8d. The words, other charges, thrown into the last account, to support it, are left to rest on such a vague assertion, without any pretence for support by document or explanation.
If all the charges in this account of Van Rensselaer, which are without any proof, are to be rejected, it will reduce the account from 3,470 dollars to a sum less than 1,000 dollars; and instead of a balance of 437 dollars and 50 cents, in his favor, when resort was had to the real estate of Hart, there was a debt of, perhaps, 2,000 dollars due from him to the estate, even admitting every other part of the account to be correct.
That those charges in the account which are without proofs are inadmissible, and cannot be upheld by the answer, is a proposition which I consider to be as well settled in law, as it is in reason. But as the counsel for the defendants seem to have entertained a different opinion on this point, and as the question is very material in this cause, in respect to various claims and pretensions on the part of Van Rensselaer, I have felt it incumbent on me to look into the authorities on which the proposition is founded.
The rule, as here laid down, is similar to the one which we find declared at law, that if it be sworn on a trial that a defendant confessed a debt, but said, at the same time, he had paid it, the confession shall be valid as to the payment, as well as to the debt. This is said to have been so ruled by Hale; (Tri. per Pais, 363.) and there has been the like decision in the Supreme Court of this state. (Carver v. Tracy, 3 Johns. Rep. 427.)
In the case in Ambler, the parties were examined as witnesses against each other, on taking the account; and the credit even of that case seems to be shaken by that of Talbot v. Rutledge, which was a little prior in time, and referred to by Mr. Ambler in the margin of the other case, and pretty fully reported in 4 Rro. 74. In this latter case, the defendant was examined on oath, on taking an account before the master, and he acknowledged the receipt of some moneys, but stated that he had disbursed them at other times, on account of the concern. The master, upon this proof, charged him with the receipt, and put him upon proof of the discharge, and Lord Hardwicke confirmed the report.
If these two decisions are correctly reported, I cannot undertake to reconcile them; but neither of them apply to the point how far the answer will, of itself, support a matter set up by way of avoidance, or discharge. It appears to me, that there is a clear distinction, as to proof, between the answer of the defendant and his examination as a witness. At any rate, the question how far the matter set up in the answer can avail the defendant, without proof, is decidedly and rationally settled.
[ * 89 ]
The rule is fully explained in a case before Lord Ch. Cowper, in 1707, reported in Gilbert’s Law of Evidence, p. 45. It was the case of a bill by creditors against an executor, for an account of the personal estate. The executor *stated in his answer that the testator left 1,100Z. in his hands, and that, afterwards, on a settlement with the testator, he gave his bond for 1,000Z., and the other 100Z. was given him by the testator as a gift for his care and trouble. There was no other evidence in the case of the 1,100Z. baving been deposited with the executor. The answer was put in issue, and it was urged that the defendant having charged
[ * 90 ]
On the above doctrine, in the case from Gilbert, I have to remark, in the first place, that it is undoubtedly the long *and well-settled rule in chancery, whatever may be thought of its propriety. Lord H. says, in the case of Talbot v. Rutledge, that if a man admits, by his answer, that he received several sums of money at particular times, and states that he paid away those sums at other times in discharge, he must prove his discharge, otherwise it would be to allow a man to swear for himself, and to be his own witness. But, in the next place, I am satisfied that the rule is perfectly just, and that a contrary doctrine would be pernicious, and render it absolutely dangerous to employ the jurisdiction of this Court, inasmuch as it would enable the defendant to defeat the plaintiff’s just demands, by the testimony of his own oath, setting up a discharge or matter in avoidance. Mr., Evans, in his notes to Pothier, (Vol. 2. 156—8.) has examined this point with great ability. After citing the case before Lord Cowper, he says, and says truly, that it is founded upon accurate principles, and in reference to the course of proceeding in chancery. When the answer is put in issue, the defendant must support, by proof, all the facts upon which he means to insist, while the plaintiff may rely upon every fact admitted, which he conceives material,
[* 91 ]
*The distinction, therefore, as Evans says, is not between Courts of law and equity, but between pleadings and evidence. If an answer is introduced collaterally, and merely by way of evidence in chancery, it ought to be treated precisely as in a Court of law. On the other hand, if, in a Court of law, the plea confesses the matter in demand, but avoids it by other circumstances, the proof of the avoidance is incumbent on the defendant. The same distinction was lately taken in the case of Ormond v. Hutchinson, before Lord Erskine. (13 Vesey, 47.) It was said, that when passages are read from an answer which is replied to, and is not an answer to a mere bill of discovery, they are not read as evidence, in the technical sense, but to show what the defendant has admitted, and which, therefore, need not be proved. The only' explanation necessarily accompanying the rule, is, that you must not stop short with a sentence, so as to garble a single fact, but you must read the answer so as to complete the immediate subject to which the defendant is answering. This is all. It does not apply to distinct matter; and the admission of one fact, does not establish the assertion of another,
[ * 92 ]
[ * 94 ]
I have thus, and I trust satisfactorily, shown, that the answer of Van Rensselaer is not sufficient to establish any of the charges which he sets up against the estate of Hart,
There is another charge in the account of Van Rensselaer which may require a more particular attention, and which is in these words: “ To 1,000 acres of land furnished I Lytle, pr. obligation, 6s. 6d. 3251.”
There is reason to believe that this charge is inaccurate, and unjust.
[ * 95 ]
The charge is founded upon a receipt which Hart gave to Isaac Lytle, the 7th of October, 1784, in which he acknowledges to have received of Lytle a doctor’s right of 1,000 acres of land, and which he promises to manage to the best advantage, for Lytle. The testimony of Lytle has been taken to explain this transaction: he says, that he possessed a right of 1,000 acres of land, issued to Dr. Willard, for services rendered by him as a surgeon in the army, and that he delivered it to Hart, at the date of the above receipt, to be deposited in the surveyor-general’s office, together with a location made by him under the same. That after the death of Hart, he attempted to obtain a patent for those lands, and calling on Van Rensselaer for assistance, he produced the receipt given by Hart. That Van Rensselaer said the administrators had sold that right, as supposing it to belong to Hart, and he offered to hold himself liable for it; and Lytle gave up Hart’s receipt, and took one from Van Rensselaer of the date of the 4th of March, 1789, in which Van Rensselaer promises to settle with Lytle, and mentions Hart’s receipt as specifying the class-right to have been issued to Dr. Willard. That afterwards, in March, 1794, he received *of Van Rensselaer two deeds, containing, in the whole, 750 acres of land in St. Lawrence county, which he received in full for the military class-right above mentioned ; and that it was agreed between them, that Van Rensselaer should retain the residue, or 250 acres, for his services and expenses in that business.
There are, also, some other parts of Lytle’s testimony that serve to perplex the subject. He says, that when he deposited the doctor’s right, and which he most mistakingly converts into Doctor Willard’s right, he delivered, at the same time, a location made by him under the same. Why did he not explain when and where he had made that location ? He must have known in whose name and on what land it was made; and why did he not go to the surveyor-general’s office, to see what had been done under that right and location, before he went to Van Rensselaer for assistance ? How does it appear that Van Rensselaer had already sold that right, as he said he had, when he so promptly assumed to satisfy Lytle ?
So much inaccuracy and mystery attends this whole transaction, that it is difficult to know where to fix a steady belief.
But admitting the right was never returned to Lytle, and was lost, with what equity or justice could Van Rensselaer appropriate 250 acres of that right to himself, and yet charge the estate of Hart with the whole 1,000 acres, and that too at the price of 6s. 6d. an acre, when it is admitted in the answer, that class-rights were worth.but one shilling an acre prior to location, and when Lytle himself testifies, that at the time he received the 750 acres from Van Rensselaer, he does not believe those lands could have been sold for more than two shillings an acre ? Yet, notwithstanding all this, the estate of Hart is charged with 1,000 acres furnished Lytle at 6s. 6d. an acre !
If any allowance is to be made for the extinguishment of this right, it can only be for its then value as an unlocated class-right, or the value of one shilling per acre.
[ * 97 ]
I have now done with the debit side of Van Rensselaer’s account, and shall proceed to the other, or the credit side; *and if I am not mistaken in my views of the testimony, it will be found to be still more objectionable.
A prominent part of the credit relates to .what is well understood in the case, by the name of the Sacondaga lands. The answer of Van Rensselaer admits that in 1787, Hart deposited with him a number of class-rights, as a pledge or security for debts due from Hart to him, to the amount of about 6891. 9s. Id. He did not recollect the number of the class-rights, nor in whom they were originally vested, as he
The credit given in Van Rensselaer’s account, of the proceeds of these lands, is as follows, viz:—
1,497 acres sold at auction, for......£346 4 9
400 do. conveyed to Ten Eyck, and 750 do. to Wright, in pursuance of authority from Hart, without any consideration received.
1,242 acres conveyed to different individuals, whom he names, to ... . 515 12 0
3,889 acres................£861 16 9
We will now examine the proofs, to see how far this is a just and true account.
[ * 98 ]
It is in proof (see exhibit No. 10.) that Hart, on the 17th of July, 1783, filed in the surveyor-general’s office, a location for 5,500 acres of land, at or near the Sacondaga river, and that the location was founded on military class-rights *or certificates and transfers duly owned by him, and duly delivered into the office; and that, as the right of one of the soldiers failed, the valid class-rights so located on, amounted to 5,000 acres of land. This location was afterwards, on the 19th of February, 1787, transferred by Hart to Van Rensselaer, with authority to Van Rensselaer to take out the patent in his own name. This conveyance, as the answer admits, was in trust, by way of security for some debts due to Van Rensselaer; and there is a sufficient proof of the trust without the answer, for it is admitted' by a certificate of Van Rensselaer, of the date of the 21st of October, 1788; (see exhibit No. 10;) and it is admitted also, by the accept anee of the order of Hart, of the 21st of February, 1788, (see exhibit No. 9.) in which Hart orders him to convey to Ten Eyck 400 acres out of the Sacondaga lands, for which he (Van Rensselaer) had obtained a patent for him, (Hart,) on the 26th of May, 1787.
That the lands were conveyed to Van Rensselaer in trust, is thus in proof; but that they were conveyed in trust, to pay debts due to him, is without any proof, except the asser
| * 99 ]
*Van Rensselaer was, undoubtedly, bound to show and establish his debts ; his answer is not competent proof. The debts so secured amounted, as he says, to about 6891. 9s. Id.; but if we recur to his account, which contains all his demands against Hart, back to the year 1784, it will be seen that there were no debts due when he received the class-rights for 5,000 acres in trust, except upon the certificates, which he charges as paid in error, or paid twice, or lent or included in the balance of the note due; and all these certificates and the balance together, at their nominal price, or par, and with interest on that nominal price from the time charged, and the small draft on Tapp, as mentioned in the account, included, will not all, scarcely, exceed 5001. at the time the transfers were made. The pretension, therefore, that the class-rights were deposited to secure so large a debt as 6891., is false, even upon the face of his own accounts; and if those claims founded on certificates are reduced dowfi to the real market value of certificates at the time, then, even, admitting that they were all duly proved, and admitting even that they were not included in the note, Van Rensselaer’s debt, when he received the class-rights, could not have exceeded 200 dollars. A more unfounded pretext for wasting all these Sacondaga lands could not well have been contrived.
But admitting that the deposit of these class-rights, with authority to sue out a patent, was truly by way of pledge, or mortgage, for the security of a debt, still, I apprehend, that Van Rensselaer had no authority to sell those rights, while they remained in their original shape of certificates, without a previous notice to the party to redeem, nor after they were converted into real estate, without first applying to this Court for a decree or order of sale. The title to the bona fide purchaser may be good, but a sale, without these previ
[ * 100 ]
*Van Rensselaer says, that soon after he received the class-rights, Hart gave him verbal instructions to dispose of and manage them as he should think best. This very loose authority applied strictly to the class-rights only, and could not have followed them after they were changed into real estate, under the authority given in the transfer itself, to take out a patent in Van Rensselaer’s name. And, whatever might have been the nature or extent of this verbal authority, there is not a particle of proof that any such authority was ever given. We have only the allegation of Van Rensselaer, which, of itself, is no evidence to such a fact. Then, by what right were the lands sold, even admitting they were held as security for a debt?
[ * 101 ]
A bill in chancery to redeem stock, bonds, plate, or other securities, or personal property, pledged for the payment of debts, has frequently been sustained. (Kemp v. Westbrook, 1 Vesey, 278. Demendary v. Metcalf, Prec. in Ch. 149. Wanderzee v. Willis, 3 Bro. 21.) But, on the other hand, it seems now to be admitted, (though Lord Ch. Harcourt once held otherwise,) that the creditor who holds the stock in mortgage is not bound to wait for a bill of foreclosure and decree of sale, as in the case of a mortgage of land, but may sell on reasonable previous notice to the debtor to redeem. This was so decided finally, in the cases of Tucker v. Wilson, (1 P. Wms. 161. 1 Bro. P. C. 494.) and of Lockwood v. Ewer, (2 Atk. 303.) The notice to the party, in such cases, is, however, indispensable. This seemed to be conceded in the case of Tucker v. Wilson, and has been so held in other cases. (De Lisle v. Priestman, Brown’s Pennsylvania Reports, 176.) It was the rule of the civil law, that a pledge could never be sold, where there was no special agreement to the contrary, except under a judicial sentence; and this appears to be the law, at this day, in many countries in Europe; and it was the rule in the old English law, in the time of Glanvil, (lib. 10. ch., 6. and 8. p. 159. 163.) as I took occasion *once to show in the case of Lansing and Cortelyou. (2 Caines’s Cases in Error, 200.) But if a freehold estate be held by way of mortgage for a debt, then it may be laid down as an invariable rule, that the creditor must first obtain a decree for a sale under a bill of foreclosure. There never was an instance in which the creditor, holding land in pledge, was allowed to sell at his own will and pleasure. It would open a door to the most shameful imposition and abuse.
The defendant Van Rensselaer thought proper, however,
He sold 1,497 acres in August, 1791, at public auction, toe city of Albany, and the auctioneer (Ev. of A. G. Lansing, and exhibit No. 11.) says, he has no doubt public notice was given in the city papers. This is all the evidence we have of a notice. The principal purchaser was EUcanah Watson; and we find by the testimony of Alexander St. John, that the sales were at an enormous undervalue, and that six of the lots, which produced the total sum of 138Z. 12s. 9d., were, within a year thereafter, sold by Van Rensselaer for the sum of 274Z. 10s. This fact is decisive proof that most of these sales were merely colorable, and intended only to extinguish the equitable title of Hart, by transferring it to himself. The other lots, which were disposed of at private sale, were, generally, sacrificed at less than half of their then value, according to the testimony of the same witness, who had frequently surveyed in the tract, and had lived near it for 20 years. If these lands had been kept and- nurtured, until the infant had come to maturity, they would have afforded a large and independent estate to the plaintiff. Instead of this, the whole tract has been swept away on the most groundless pretences, without leaving scarcely “ a wreck behind.”
[ * 102 ]
*I think there can be no doubt that the plaintiff is entitled to receive from the estate of Van Rensselaer an ample indemnity.
The class-rights, on which the Sacondaga location was made, entitled the holder to 5,000 acres of land, and to that extent the location was intended to have been made by Hart, in July, 1783, as appears from the location itself. But the patent which was afterwards taken out by Van Rensselaer, was only for 3,880 acres ; and a very important question has arisen in the case, whether Van Rensselaer be responsible for the 1,120 acres not embraced by the patent, though covered by the class-rights.
Van Rensselaer says, in his answer, that the patent comprehended the quantity of land due for the class-rights which Hart had deposited with him; and in his account annexed to the answer, he says, that the 3,880 acres were “ equal to class-right certificates received.” This answer is shown to be incorrect; for it is incontestably proved that the class-rights deposited amounted to 5,000 acres; yet it may be true, notwithstanding, that the surplus of acres were never patented by Van Rensselaer, or came, in any way, to his possession or use. There is a difficulty in accounting for the non-appearance, in any shape, of the unsatisfied part of the class-
[ * 103 ]
All the proof we have on the subject is, that when Hart located on the Sacondaga lands, in July, 1783, he did it in consequence of certificates and transfers then delivered, and which, after rejecting one of the rights as bad, entitled him to locate on 5,000 acres. He then, on the 19th February, 1787, transferred these certificates or class-rights, “ with the benefit of deposit on the aforesaid lands and premises,” to Van Rensselaer, with authority to take letters patent “for the premises aforesaid.” We have, lastly, the certificate of Van Rensselaer, of October, 1788, that a grant *for the lands, nearly as described in the location of Hart, was obtained for 3,880 acres, and no more, and which he held in trust.
This is all the evidence before me on the subject, and it does not appear to be sufficient to charge Van Rensselaer with the surplus acres, because we have nothing but surmise or conjecture to fix upon him the fact of having located at some other time, and upon some other lands, to the amount of the unsatisfied class-rights. Whether they have remained to this day in the surveyor-general’s office unlocated, or whether Van Rensselaer did, in truth, use them afterwards, for his own purposes, is left in obscurity, without any evidence to guide us. The assignment to Van Rensselaer seems, from the language of it, to have been intended to operate only upon the specific location which it mentions, and no -doubt with the impression that it fully absorbed the claim founded upon the class-rights to which it referred. I am not certain how far the then existing laws would admit of any further location on different lands to supply the deficiency in the location in question. The act of 11th May, 1784, (7th sess. chap. 73.) authorizing locations for bounty lands, only provided for the case of the first location being void. It then allowed a fresh location on other unappropriated lands. But if the location was not void, and only contained a greater or less quantity of acres than the person locating' was entitled to, it was the duty of the surveyor-general to reduce or extend the bounds of the tract so located, as the case might require. Whatever might have been the cause, the fact is undoubted, that the patent did not issue for the extent of the rights, but only for 3,880 acres; and I should presume that Hart must have known of this fact when he • gave the order of February, 1788, in favor of Ten Eyck, for he refers to the patent by its date.
[ * 104 ]
I think, therefore, it would be unsafe, and perhaps unjust, to hold the estate • of Van Rensselaer responsible for *any further claim for these class-rights, until more certain and
Before I leave this part of the subject, it ought, however, to be observed, that if the patent, instead of containing only 3,880 acres, did really contain, as St. John testifies, 4,199 acres, Van Rensselaer was responsible for that surplus, and it must now be accounted for. Every advantage of that kind belongs to the cestui que trust, and not to the trustee.
[ * 105 ]
Another objection to the credit side of Van Rensselaer’s account, is the total omission to give credit for the proceeds of class-rights, to the amount of 1,200 acres, which came to the use of Van Rensselaer, and were by him located in St. Laivrence county. It is in evidence that a class-right of Dr. Moses Willard, for 1,000 acres, was by him sold to J. G. Spangle, and by Spangle to Hart, and by him deposited in the surveyor-general’s office, in October, 1784. He also owned and deposited, at the same time, a right for 200 acres, derived from James Walsworth, jun. These two rights were, by an order of Hart upon the surveyor-general, of the 12th of June, 1787, delivered to Van Rensselaer; and it would appear by the order, that a location had been made by virtue of them, at Black creek in Washington county. (See exhibits 9,10,11.) This order was deposited, and the rights specified passed to the credit of Van Rensselaer, who, at different times, made deposits of documents for location, and located at other times to the amount he was entitled, on the general credit of his deposits, without specifying which of the documents were intended for any particular- location. This appears from the testimony of Simeon De Witt, who says, that the location made by Van Rensselaer, next after the deposit of the above order of Hart, was on the 15th of June, 1787, (only three days after the date of the order,) for lots 1, 2, 3, 4, 5, and 6, in Madrid, in St. Lawrence county, containing *3,840 acres, and he believes that the location was partly made on the rights contained in the order. A patent afterwards issued to Van Rensselaer for these lots in Madrid. The location of Van Rensselaer of the above lots, which was dated the 15th, and filed on the 16th of June, 1787, does not refer to any specific class-rights, but is stated in the location itself, to be made “ in consequence of the transfers and certificates deposited in the officeand, in my mind, the evidence is sufficient and decisive, that these rights contained in the order were included in the St. Lawrence location; and the only question is, whether Van Rensselaer received those class-rights as his own rightful property, or in trust for Hart
Van Rensselaer must therefore be adjudged to have taken and held 1,200 acres in the St. Lawrence lands, in trust for Hart, whose representatives must now convey those lands to the plaintiff, or account for their value.
Another, and which is the only remaining item that I shall at. present take notice of, in the credit side of Fcwt Rensselaer’s account, is in the following words: “ By the cost of seven and a half soldiers’ land rights, as pr. agreement, 67., 457.”
There is not a particle of proof of the agreement here referred to; and instead of a credit of 457., the plaintiff is entitled to follow the rights into the land, and to claim of the representatives of Van Rensselaer the land itself, or its value.
Van Rensselaer was a trustee for Hart for a large and valuable interest in the military tract, and to understand the nature and extent of this trust, we must recur to facts.
It appears by an agreement, under the hands of Edward Cumpston, and of Van Rensselaer and Hart, dated the 5th of June, 1786, (see exhibit No. 13,) that Van Rensselaer then had in his hands 63 soldiers’ rights of land, purchased by Hart and Cumpston. That by an agreement between the parties, it was declared, that twelve of those rights belonged to Cumpston, 21 of those rights to Hart, and the remainder, or 30 rights, belonged to Van Rensselaer and *Ten Eyck. The answer says, that soon after that adjustment, and in the same year, he, Van Rensselaer, purchased seven of the 21 rights of Hart, at an advance of 20 per cent., and this allegation is the foundation of the credit to which I have referred. But the answer not being, of itself, evidence of such a purchase, and there being no evidence of it in the case, the whole pretence of the purchase must be rejected as destitute of any foundation. Van Rensselaer is clearly responsible for these rights; but how to identify them and ascertain their value, is the next and the difficult question. Nothing can be involved in more perplexity than the manner in which this whole trust has been conducted; and if we are not able to extricate the truth, the fault is in the trustee, and the cestui que trust must not become the victim of the confusion.
The account says, that seven and a half rights were purchased. The answer says seven; but. as 15 rights are admitted to belong to Hart, there could not have been more than six rights appropriated by Van Rensselaer to himself, under color of a purchase, and he designates 10 lots, out of which he says the seven which he purchased, were taken, but he cannot designate which of the 10 were taken. It turns out in proof, (see schedule D. annexed to Kellogg’s Ev.) that all those 10 specified lots were conveyed by Cumpston to Van Rensselaer. In such extreme inaccuracy and obscurity is the whole of this transaction involved!
[ * 108 ]
Van Rensselaer has not disclosed which were the 30 military lots reserved to Ten Eyck and himself. The answer only specified the 15 lots which fell to Hart, and most of them are represented as bad titles. It may be, that the 30 lots which do not appear, were a selection of the best titles out of the 51 rights which belonged to Hart and the defendants. Van Rensselaer had the control and disposition of all these titles. The answer ought to have contained a full and frank exposition of the whole, so that it might be seen whether there had been a just apportionment *of the good and bad titles. Every intendment is to be made in such a case against the omission. It is in proof, by the testimony of Edward Cumpston, that Van Rensselaer, Ten Eyck, Hart, and himself, were, by agreement, jointly and equally concerned in the purchase of these soldiers’ rights, and that all
[ * 109 ]
In order then to restore to the plaintiff his rights, he is entitled to elect six lots out of any belonging to Van Rensselaer, derived from the adjustment in 1786; and if none such are to be found, he is entitled as a compensation in *damages to the average value of six military lots of a good quality in a wild state, and with a good title. In order to determine whether the 15 lots which were finally designated as belonging to Hart, were fairly apportioned, in respect to quality and title, an inquiry must be made into the whole 51 lots or rights, in reference to these two objects, to the end that the estate of Van Rensselaer may be responsible in damages, for any inequality against the plaintiff which may be found to have existed. Though the titles of the 15 lots specified in the answer, were originally conveyed to Hart, yet all the other titles might equally have been in him or Cumpston, in the first instance, as the purchases were all made by them, though paid for equally and belonging equally to the whole concern.
I have now finished the examination of Van Rensselaer’s and Ten Eyck’s account, as exhibited to the Court of Probates, in 1802, when they applied for leave to sell the whole real estate of Hart; and it appears to be impossible to resist
2. The next head of inquiry, is the sale of the real estate, under the order of the Court of Probates.
I have no hesitation in declaring my conviction, that the order of sale was fraudulently procured. The manner in which it was procured and executed, betrays a carelessness so gross, and a departure so palpable from the ordinary habits of just and correct proceeding, that we are warranted to impute to the administrators intentions the most unjust.
[ * 110 ]
The statement and valuation of the property, as exhibited to the Court of Probates, gave a very unfavorable view of it. It has been shown, by testimony, that the lands in general were extremely undervalued. Thus, for instance, *the lands in Butlersbury were valued short of 2,000 dollars, and they are proved to have been worth, at that time, 6,000 dollars. A lot in the Royal Grant was valued at 200 dollars, when it was worth 1,600 dollars. Two lots at Skenesborough were valued at 1,000 dollars, and were proved to be worth 3,000 dollars. The 15 military lots, which were assigned to Hart, were set down without any specification of the town or lot, and in these general terms, “ 15 military class-rights, 1,000Z.” It seems, as if it had been the predetermined intention of the administrators, not to try the experiment whether part of the property would not raise the requisite funds, but to sweep away, at once, the whole real estate, however widely dispersed or imperfectly known. One single lot, out of the 15 military lots, was worth more, in 1802, than what the administrators thought proper to put down as the value of the whole, and five years before that time, Ten Eyck had valued these 15 military class-rights, at a “ moderate compensation,” as worth 11,250 dollars. (See exhibit No. 4.) But I pass over the subject of the valuation, with applying to the case the solid remark of Lord Eldon, (ex parte Bennett, 10 Vesey, 385.) that “ it is the duty of a trustee not to bring the property to sale, until all information has been acquired by him for the benefit of the cestui que trust, under circumstances likely to make it yield its utmost value.”
[ * 112 ]
But we are not left to inference on this point. We have the testimony of the guardian himself, who says, he was appointed at the request of the administrators; that he was never notified to attend the Court of Probates, nor presented with any account or statement whatever, in respect to the estate or the administrators; that he never made any examination of the accounts or of the estate, and never paid any attention to the proceedings of the Court in relation to the subject, because, he says, he was given to understand that he was to incur no responsibility, and to be at no trouble in the business.
[ * 115 ]
The order for the sale of the rea‘1 estate having been obtained, the administrators gave four weeks’ notice, in one of the Albany newspapers, of the sale to take place at Albany, on the 4th of May, 1802. This was the only notice that was given, though the real estate of Hart lay in the counties of Washington, Scoharie, Montgomery, and the then county of Onondaga, as well as in the city and county of Albany. The ordinary sagacity which a man applies to his own private concerns would have discerned that such a notice was insufficient to bring home the knowledge of the sale to the inhabitants of those counties, who might be acquainted with the lands, and wished to Joe concerned in the purchase. We know that a Mr. Stewart had many years before expressed a wish to buy the Skenesborough lots, and offered security. (See McKinley’s letter, exhibit No. 3.) Nor was this all. The form of the notice was still more defective. Instead of giving any information, even in what counties the lands lay, still less of any description of the particular situation, nature, or quality of the lands, the notice was only that “ all the real estate whereof Henry Hart, late of the town of Kingsbury, in the county of Washington, died seised, would be exposed to sale at auction, at the Tontine Coffee-house, at Albany, on the 4th of May.” I do think that this notice was, in itself, a breach of trust. It was exposing the property to *extreme jeopardy. If information did, in fact, reach any of the inhabitants of the
* 116 ]
I am not forgetful of what was said upon the argument, as to the obscurity and imperfection of these military titles. But why were they hurried to market on such defective or short notice, and before the state of the titles had been skilfully examined and accurately ascertained ? It was the duty of the administrators to have caused the titles to have been previously explored. They had all the means of knowledge. They were concerned in the original purchases, in 1783, or early in 1784, and Van Rensselaer was afterwards made the depository of a great number of military titles, belonging to him, Ten Eyck, and Hart, and from which he had, at his own pleasure, selected the titles now exposed to sale. There never was a case in which *the duty was more clear and pressing on the trustee, to understand the title he was to sell, and not to expose it as clouded and doubtful, to the hazard of speculation. There never was a case, in all the annals of our Courts, surrounded with so many ci rcu imstances to show that the property was rashly and wantonly devoted to destruction. There can be no doubt, therefore, h'om every view of the transaction, that the administrators must answer in damages for all the loss sustained by this unnecessary and unjust sale of the real estate,
3. The last point which remains to be considered, is in respect to the rule or measure of damages.
The charges which have been made out against the defendants are all torts and breaches of trust. They differ essentially from cases of damage founded on breaches of
[ * 117 ]
In an action of trover - at law, for the conversion of a chattel, it is admitted, that the jury may give special damages beyond the original value of the chattel. (Fisher v. Prince, 3 Burr. 1363. Whitten v. Fulter, 2 Black. Rep. 902.) In the case of Ivie v. Ivie, (1 Atk. 429.) the defendant was charged with a breach of trust, in concurring in the sale of an annuity to the plaintiff’s prejudice. Lord Hardwicke said, that where a trustee had, in a corrupt or unfair manner, been guilty of a breach of trust, the Court would sometimes compel the trustee to make satisfaction to the utm.ost. But as the defendant in that case had not *acted with unfair motives, he only decreed, that he should, at his own charge, replace the stock by purchasing another annuity of the like nature and value. Indeed, it is a settled principle in this Court, that where a trustee sells stock contrary to his trust, the cestui que trust is entitled, at his election, to have the stock replaced, or the produce of it, with the highest interest. (Bostock v. Blackeney, 2 Bro. 653. Buller, J., Pocock v. Reddington, 5 Vesey, 800, and Long v. Stewart, note ib.)
The principles of the decree, as extracted from this opinion, will, accordingly, be to the following effect:—
1. That Ten Eyck be charged for all the goods and chattels of Hart, (including lumber,) not contained in the inventory, identified and proved by the testimony already taken in the cause, or which may hereafter be given before the master, to have belonged to Hart at the time of his death, and which the said defendant shall not show affirmatively, by proof, to have been lost, or otherwise not to have come to his possession without his default.
2. That he be charged with the following debts, specified in his account of the debts due to the estate of Hart, unless he can discharge himself, by proof, as aforesaid, viz:—
John Doty, ........£755
Henderson Waites,.....11 13 4
JVicholas Han B.ensselaer, .... 83
-- Bloon,....... 8 0
Micajah Etticott,....... 1 12 0
Henry Sherman,....... 13 0
£22 10 0
3. That he be charged with the moneys admitted to have been received by him in the account annexed to his answer, filed in the suit of Aaron Hart, in September, 1799, and not credited in the account annexed to his answer in this suit.
4. That he be charged with all the rents proved to have been received by him, and not credited in his account in this Court, and particularly with the rents received from Balph Schenck, in wheat, from 1789 to 1802, at the market value, when received.
[ * 119 ]
*5. That he be charged with interest on all the goods and chattels for which he shall be charged as aforesaid, to be computed from the first of February, 1790, on the then value; and with interest on all the moneys and wheat for which he shall be charged as aforesaid, from the time they were respectively received.
[ * 120 ]
7. That Van Rensselaer be charged with the value of the lands contained in the Sacondaga patent of the 25th of May, 1787, and not conveyed by him to Ten Eyck and *Wright, in pursuance of the orders of Hart, and including the surplus of acres, if any there be, in the patent, beyond the 3,880 acres specified in the patent, and that the value be ascertained as the same lands are worth, without improvements, in September, 1808, and that his estate be also charged with interest on that value from that time.
8. That the representatives of Van Rensselaer convey to the plaintiff, in fee, 1,200 acres of land, held in his name, at his death, in lots 1, 2, 3, 4, 5 and 6, in Madrid, in the county of St. Lawrence, to be conveyed as so much land in common with the other lands owned by Van Rensselaer, at his death ; but if a good title to those lands cannot now be given by the representatives of Van Rensselaer, that they then account to the plaintiff for the value of an undivided right to twelve hundred acres in those lots, in September, 1808, with interest from that time.
9. That the plaintiff elect six lots out of the military lots held by Van Rensselaer, on the 5th of June, 1786, as derived
10. That an inquiry be made, by the master, into the quality and title of each of the 51 lots, for which the rights, or transfers, were held by Van Rensselaer on the 5tn of June, 1786, so far as the same can now be ascertained.
[ * 121 ]
11. That Ten Eyck, and the representatives of Van Rensselaer, be charged with the difference between the price which the lands sold by them, at auction, in May, 1802, actually produced, and the value of the same lands in September, 1808, independent of any improvements *made between May, 1802, and September, 1808, together with interest on that value, from the time; and that the said defendants be allowed a ratable deduction from this charge, from such parts (if any) of the military lands then sold, as they can show, by satisfactory proof, did not belong to the intestate at his death.
12. That the defendants be charged with the difference between the price which the bonds and mortgages, mentioned in the pleadings, produced at the auction, in May, 1802, and the real value of the same at that time, having reference to the rate of interest and the time of payment; and that they be charged with interest on such difference from that time.
13. That an inquiry be made, whether Van Rensselaer obtained any, and what, grants of land for all, or any part, of the surplus class-right of 1,120 acres, beyond the 3,880 acres in the Sacondaga patent, and whether the representatives of Van Rensselaer can make a good title therefor; and if not, then what was the value of the lands so obtained for these surplus rights in September, 1808, with interest on that value from that time.
14. That a reference be made to a master, to take and state an account between the parties, and to make inquiries on the principles of this decree; and that all the testimonj and exhibits in the cause may be used as testimony on such reference, together with such further testimony as the parties, or either of them, may think proper to furnish; and that the parties, and the master, have leave to apply, at any time during the progress of the reference, for further direc
To the cases on the above point, that the answer is not evidence when it sets up matter affirmatively in avoidance or discharge, the following authorities have been added by the chancellor, as tending further to show that the doctrine in the text is not only well settled in the English jurisprudence, but has been equally recognized in our own.
Sir William Blackstone lays down the rule, in his Commentaries, (Vol. 3. 451.) as one of undisputed admission and practice, at that time, (1768,) that the plaintiff in chancery at the hearing, “ may read such part of the defendant’s answer as he thinks material or convenient,” but that the defendant may not read any part of his answer.”
In Thompson v. Lambe, (7 Vesey, 587.) Lord Eldon said, “ He was clearly of opinion, a person charged by his answer cannot, by his answer, discharge himself; not even by his examination, (before the master.) unless it is in this way: if the answer on examination states, that upon a particular day he received a sum of money, and paid it over, that may discharge him) but if he
The rule admitted in this case was understood and intended to be the rule of the English chancery; for none but English authorities were referred to, and they were generally the same with those mentioned in the text.
In Beckworth v. Butler, (1 Wash. Rep. 224.) a bill was filed in the Court of Chancery, in Virginia, against an administrator, for distributive shares of the intestate’s estate. The answer, among other things, set up a gift from the intestate to the administrator of a bond, which formed the principal part of the personal estate. This allegation in the answer was not supported by proof, and the chancellor directed the administrator to account for the amount of the bond. The defendant appealed to the Court of Appeals, and the decree was affirmed; and the president, in delivering the opinion of the Court, observed, that u the answer of a defendant in chancery is not evidence where it asserts a right affirmatively, in opposition to the plaintiff’s demand. In such a case, lie is as much bound to establish it by indifferent testimony, as the plaintiff is to sustain his bill. It would be monstrous indeed, if an executor, when called upon to account, were permitted to swear himself into a title to part of the testator’s estate.” This same doctrine, and in the language of this very case, was afterwards, in Paynes v. Coles, in the
The defendants entered an appeal from this decree; and the Court for the Correction of Errors, by its decree of the 5th of April, 1817, altered and modified the decree of the chancellor in several essential particulars.
