55 N.J. Eq. 175 | New York Court of Chancery | 1896
The discovery sought by complainant’s bill has been obtained by the answer, under oath, to which no exception has been taken, and as the bill, to this extent, must be treated as purely in aid of the complainant’s defence in the action at law against her, that action must now be allowed to proceed unless the relief which the complainant claims entitles her to a continuance of the injunction against the further prosecution of that suit, Henwood v. Jarvis, 12 C. E. Gr. 247, 250 (Chancellor Runyon, 1876), and cases cited. The right to further enjoin the suit at law is based upon the claim that the extent and complications of the accounts require them to be taken in equity instead of at law. Now that the discovery has been granted, and the status of the accounts has been shown by the evidence, I am of the
And if the court of equity has no right'to enforce the liability under the statute, it has no right to interfere with the action, except in aid of the prosecution or defence, by discovery or other ancillary relief. Again, the vital question raised in relation to the account, is its illegality as based on .a gaming or wagering contract, and this is a question of fact peculiarly appropriate in this case for the decision of a jury, and either party has the right to the judgment of that tribunal and of the law court upon the questions involved. So far as a permanent injunction against defendant’s suit at law, against her as devisee, is concerned, the relief to complainant must be denied. But the complainant’s bill is also filed to compel the delivery and return of securities deposited to secure the account, and as this is a purely equitable relief, beyond the power of a court ,pf law to administer, the complainant has the right to call upon this court for an adjudication as to the validity of this claim upon the facts here presented.
And the defendants also, upon the case presented in their cross-bill, and notwithstanding the denials of jurisdiction in their answer to complainant’s bill to enjoin the suit at law, have the right to call upon a court of equity to establish their claim against the decedent’s estate, in order that they may obtain a
The main reliance of the complainant in this case to make out the illegal character of the transaction is the account itself. It began in April, 1888, and up to February 1st, 1889, shows dealings, purchases and sales to the amount of nearly $500,000, and up to this latter date, the account itself, as explained in the evidence, shows the actual delivery to Pratt of a very large proportion of stocks and bonds purchased for him by defendants upon his orders. On February 1st, 1889, the balance due from Pratt to the defendants, as appears by the account, was $120,739.94, and the defendants, to secure this balance, held stocks and bonds to the par value of $168,000, the market value not being proved. From this date up to the time of Pratt’s death, the purchases amounted to $2,400,000, and the proportion of deliveries of stock to Pratt was not larger than five per cent. The account between February 1st, 1889, and January 20th, 1891, also includes the sale of some of the securities held on February 1st, 1889, to secure the balance then due, the validity of which balance cannot, on the mere face of the accounts, be well disputed. I do not understand complainant’s counsel to insist that, up to this date (February 1st, 1889), the account itself justifies the inference that it was an illegal or wagering account. The real question of fact is, what inference as to the legality of the transactions is to be drawn from the subsequent state of the accounts. During February, 1889, the purchases amounted to over $200,000 and the actual deliveries to $47,000. From this time until January 1st, 1890, the purchases were
These deliveries, unexplained by complainant, corroborate the defendants’ claim that the wffiole account, from the beginning, is based upon the legitimate dealings between them and the deceased, as his agent, and were not intended to be mere speculations in differences. The letters of the defendants to Mr. Pratt, of January 17th and January 19th, 1890, relied on by complainant, undoubtedly show that, at that time, Pratt was speculating in the fluctuations of prices in the specially-named stocks, through defendants, but they are not sufficient, in my judgment, to show that it was understood between Pratt and the defendants that, even as to these particular transactions, actual deliveries were excluded by reason of anything in these letters in case the transaction could not be closed out as di
The defendants have in their hands collateral securities for the account, and inasmuch as the complainant as legatee is bound for the payment of debts of deceased only after the exhaustion or application of these securities, the account to be taken therefore will include a statement of these. As to the proceeds of the Arizona mortgage for $5,000, which the defendants held originally as collateral security, the complainant must be charged with this in taking the account. Upon the evidence relating to this, I reach the conclusion that this security was delivered to complainant’s agent for the purpose of converting into money to be credited to the account, and it must therefore be accounted for.
In relation to the claim of the defendants to hold the balance admitted to be due from them to complainant on individual account as security for the payment of the balance due them on the Charles E. Pratt account, I overruled or struck out, at the hearing, the evidence upon which the defendants relied to prove an agreement made by Charles E. Pratt to this effect on opening with them the complainant’s account. Upon further consideration I see no reason to change this ruling, and relief upon the defendants’ cross-bill, so far as it seeks to enjoin the complainant’s suit or set-off at law by reason of the alleged agreement, must be denied. There may be a question, however, whether, independent of any agreement and treating the account of complainant as an independent account recoverable at law, the same should not in this suit, upon proper terms as to security &c., be equitably set off against the balance found which may be due to defendants, on the accounting, from complainant as legatee of Challes E. Pratt. This question was not touched on at the hearing, and before settling decree I desire to hear counsel on this point. The suit against complainant as devisee being allowed to proceed, she would of course be entitled to the benefit of her set-off pleaded in that suit; but the set-off may not be available in that suit, and on the other hand, the defendants here