Court Opinion

ID: 5548861
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:23:57.812618+00
Date Added: 2024-06-11T08:35:00.276602
License: Public Domain

The Chancellor.
The vice chancellor was clearly right in refusing to allow; the amendments asked for in this case. At the time the original bill was filed, the complainants were aware that Leavitt, the receiver, intended to file a bill, to set aside the assignments to the complainants as illegal and unauthorized! And if they supposed they had the right to file an original bill in this court, for the mere purpose of preserving the fund in controversy until he, or some other person, should think proper to commence a suit against them, in the same court, to test the validity of'the assignments to them, they should have framed their bill accordingly, in the first instance; so as to give the defendant an opportunity to oppose the appointment of such a receiver, if the complainants were not entitled thereto upon such a bill, or if the rights of the complainants were not truly stated therein. Here the defendant has consented to the application for a receiver, and to abandon his right to set up his defence in the several foreclosure suits, upon a bill which was framed in such a manner as to enable him to set up the same defences to the claim of the complainants, and with the like effect; and which afforded proper grounds for filing the cross-bill, which has been filed by him in this case, to obtain a decree setting aside those assignments in case the complainants should not succeed in maintaining their validity. It is true, the order and stipulation reserved *393to the complainant the same right to amend his bill, or to dismiss the same, as if the order and stipulation had not been made. But the same order and stipulation reserved the right to the defendant Leavitt to put in his answer to that bill; and to file a cross-bill, if he should be advised to do so, for the purpose of determining the validity of the assignments, and other matters in controversy between him and the complainants and their cestuis que trust. The filing of a cross-bill^ therefore, was perfectly proper, even if it was not absolutely necessary, to settle these matters in controversy; and to bring the litigation to an end within some reasonable time. For, under the reservation contained in the stipulation and order, the complainants, at any time before the hearing of the cause upon pleadings and proofs, might dismiss their bill, if the testimony in the case was not satisfactory to them, upon payment of costs; and might thus compel- the defendant Leavitt to litigate the same matters over again in a new suit instituted by him. The intention of Lea-vitt to file such a cross-bill as was contemplated in the stipulation and order, therefore, furnished no good grounds for allowing the complainants to make an amendment, in this injunction bill, vthich would probably destroy the foundation of the-defendant’s bill, as a cross-bill. For the litigation upon the original bill in this cause, and upon the defendant’s cross-bill, could proceed pari passu, and could be decided upon the same evidence, under the order of the court.
The reservation of the same right to amend as if the stipulation and order had not been made, gave to the complainants no greater or other rights to amend than they would have had, at the same time and in the same stage of the cause, if that stipulation had not been executed. What, then, were the rights of the complainants to amend at the time this application was made 1 They had several months before that filed their bill in this cause, under oath, to establish the validity of the assignments creating the million and the half million trusts; charging the defendant Leavitt with making a false and inequitable claim to the assigned property, and with subjecting them to great delay ¡and expense, as well as endangering the trust fund, by resisting *394their claims in numerous suits which they had been obliged to institute to foreclose the assigned bonds and mortgages; in which suits they had made him a defendant. And in their bill they had asked to have their rights settled in this suit, and to have the trusts declared valid, and that a receiver of a considerable portion of the property should be appointed; and for an injunction against Leavitt, restraining him from interfering with the trust property, or resisting their claims in the foreclosure suits. The bill was also filed with full knowledge that the counsel of the defendant Leavitt had been a long time engaged in preparing an original bill, to be filed by Leavitt, to establish his claim to the property embraced in the million trust, and to set aside the assignment thereof, to the complainants, as illegal and void. The'filing of this bill, therefore, rendered it proper, if not absolutely necessary, that the defendant should change his original bill into a cross-bill, not only to set aside the million trust, but also to set aside the first half million trust; both of which trusts were embraced in the complainants’ injunction bill in this cause. And after the defendant Leavitt and his counsel had been for a long time engaged in preparing an answer in this suit, and a cross-bill, notice of this application was given, to amend the bill in such a manner as necessarily to change the whole structure of the defendant’s cross-bill, if not entirely to destroy its foundation as a cross-bill. Under such circumstances, even if the amendment now asked for was shown to be material to the attainment of justice, the application should only be granted, upon the terms of paying all the costs which the defendant Leavitt had incurred in preparing his cross-bill, and his answer in this suit, with the costs of the proceedings thereon down to the time of the hearing of the motion before the vice chancellor, at least; if not to the time of the final decision upon that application. For, the defendant was not bound to suspend his proceedings, upon a mere notice of such an application to amend; after he had entered into a stipulation to proceed, with all reasonable diligence, to put the matters in controversy in readiness for hearing by the earliest day possible.
I can see no good reason, however, for granting these amend*395ments upon any terms. For instead of diminishing expense, and expediting the decision of the questions in controversy between these parties, the amendments proposed, if allowed, would probably produce both delay and expense. The complainants may indeed dismiss their bill, upon payment of costs; after obtaining an order, upon the cross-bill of the defendant Leavitt, continuing the authority of the special receiver, according to the terms of the stipulation. But that dismissal would not, probably, destroy the foundation of the cross-bill, so as to render the filing of a new original bill by Leavitt necessary; as the amendments asked for in this case unquestionably would do, if granted; the effect of those amendments beiDg to make this a mere bill to preserve the trust fund until some person thinks proper to file a bill, in this court, to ascertain to whom it rightfully belongs.
Again; the court will not grant an amendment, when the effect of such amendment will be to render the complainants’ bill so defective, either in form or substance, that a demurrer thereto could be sustained. It is not necessary to inquire whether the amendments proposed are so framed as to meet the object thi counsel for the complainants had in view when those amend • ments were asked for. That object appears to be to deprive the defendant Leavitt of the power of litigating any question whatever in this suit, and to leave the fund in the hands of the special receiver forever, unless some one of the parties to this suit should think proper to institute another and independent suit, in this court, to determine who is entitled to the fund; and that in the'meantime the defendant Leavitt may be restrained from making any defence whatever in the foreclosure suits, to which the complainants had made him a party. That, I believe, is an experiment which has never before been tried in this court. And I am unable to discover any principle upon which it can be sustained. This court, it is true, allows a .bill to be filed here for the preservation of property pending a suit in the ecclesiastical court, as to the validity of a will, or during the continuance of a suit there in the case of a contested administration. But the original ground of such jurisdiction was that the ecclesiastical court had the exclusive power to determine *396the question as to who had the right to administer the estate of the decedent; and that until that question was determined there was no person vested with any power, or authority, to sue for and recover the debts or other property of the decedent, so as to prevent its being lost by insolvency or otherwise. For until the decision of the court of king’s bench in Walker v. Woollaston, (2 Peer Wms. Rep. 276,) it was supposed that a grant of letters ad colligendum, or a limited administration, was not sufficient to authorize the special administrator to bring an action to recover the estate of the decedent. Since that decision it appears to have been settled, in England, that the court of chancery will not appoint a receiver to protect the property pending the litigation in the ecclesiastical court, without a suggestion that the property is in danger and cannot be secured by means of an administration pendente lite. (Knight v. Duplessis, 1 Ves. sen. 324. Richards v. Chave, 12 Ves. 461. Jones v. Goodrich, 10 Sim. Sep. 327.) In the case referred to by the counsel for the appellant, on the argument, (Wood v. Hitchings, 2 Beav. Rep. 289,) the administration pendente lite had terminated, by the decision of the prerogative court; and that court being inhibited from proceeding pending the appeal to the privy council, there was no person authorized to collect the property; except by the aid of the court of chancery. And in De Fencheres v. Dawes, (5 Beav. Rep. 110; 6 Lond. Jur. 594,) the question was not raised, by the demurrer, as to the right of the complainant to file the bill for a receiver pending the litigation in the ecclesiastical court, It is probable, therefore, that some sufficient reason was stated in the bill, in that case, for the interference of the court; or that the defendant was willing to allow that part of the bill to stand, for the purpose of preserving the property. The demurrer, to the residue of the bill, was allowed upon the ground that such bill was preriiaturely filed.
In this court, the necessity of having a discovery from the defendant, or of having an injunction or receiver to protect property from waste or destruction pending a suit, has sometimes induced the court to retain the cause here, and to give relief to the complainant in the same suit; to prevent a double litigation of *397the same matter by another suit in a court of law. But I am not aware of any case, in which this court had original jurisdiction over the subject matter of the litigation, as well as the right to give special relief, by the granting of an injunction, or by the appointment of a receiver of the property pending the litigation in the same court, where the complainant has been permitted to file a bill for the special relief merely; and so to frame his prayer that it would be improper for the court to settle the matter.in controversy between the parties, without the commencement of an entirely distinct and independent suit in the same court.
Here the bill upon its face professes to make out a case not only entitling the complainants to an order for the temporary relief, by an injunction and receiver pending the litigation, but also to a final decree settling the rights of the parties to the whole matter in controversy between them; provided a proper prayer for relief, or even the general prayer for relief, is left in the bill. Upon full consideration of the subject, I am satisfied that if the original bill had been framed upon the principle that is proposed by these amendments, the defendant Leavitt might have demurred to it, for want of equity; and that no receiver could have been properly appointed under it. The complainants cannot, therefore, after they have obtained the temporary relief sought for, destroy their whole bill, under pretence of amending it; and where they have no right to amend except upon application to the court, as a favor. And if they now wish to get rid of this suit, and to compel the defendant Leavitt to hold the affirmative upon the questions in litigation between them, they must exercise the right, reserved to them by the stipulation and order, to apply for the necessary order in the cross-suit of the defendant Leavitt for continuing the receivership, and for leave to dismiss their own bill, upon payment of costs, as directed by the statute in such cases. This will leave to the complainant in the cross-bill the same right, to apply for liberty to dismiss his cross-bill, and to leave the fund in the hands of the special receiver until one party or the other chooses to assume the responsibility of filing a new original bill; if there is indeed any advantage in being a defendant instead of a complainant, *398in this litigation, which is at least doubtful. Probably the better course for both parties, is to put the matters both of the original and cross-suits in a situation to be determined without delay, and proceed to a hearing thereon as they now stand; so that neither party will be in a situation to withdraw from the litigation, and thus prevent a final decision of the matters in controversy between them, without the consent of the other.
The order denying the application to amend was not erroneous ; and it must be affirmed with costs.