Court Opinion

ID: 5550672
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:34:54.612905+00
Date Added: 2024-06-11T08:35:05.192475
License: Public Domain

The Assistant Vice-Chancellor.
The complainants object preliminarily, to the consideration of Mowatt’s claim in this suit, because his remedy is upon the agreement, by a suit at law, or by a cross bill, if he be deemed entitled to relief here.
I think that the objection, in either view of it, is unfounded.
By the agreement, the parties compromised their respective claims, and combined all the outstanding liens. These were to be carried forward to a sale, and the proceeds distributed in specified proportions. The old foreclosure suits, though abated, were not dismissed, and were actually revived and used to effect the final sale. The agreement was in substance, though not in form, a stipulation in those foreclosure suits and the creditors suit, uniting the rights of these parties and providing for the ultimate disposal of the fund. The question is now for the first time presented between them, and I am not sure but that this agreement, if it had been produced at the hearing, without being set forth in the answer, would have entitled Mowatt to a reference upon the distribution of the fund.
Be that as it may, I entertain no doubt but that the court is bound to consider it in this stage of the suit. We are now upon the disposition of the fund created by this stipulation, and the question is, whether the complainants shall be permitted to take out of it the interest on their claims, and the charges on the property beyond a certain period. They obtain the principal of those claims, and the interest conceded to them, by force of this stipulation. And by force of the same instrument, Mowatt insists that this disputed interest and those charges, shall not be paid out of the fund, to diminish the share which the stipulation reserved to him. It appears to me that as between these parties, Mowatt’s right to raise the question and claim the fund here, stands on the same footing that sustains the complainants right *113to that part of the fund which is undisputed. As to them, the former decree settles nothing and forecloses nothing, on this subject.
This is not an attempt to set up damages, or to make a set off, as was suggested by the learned counsel for the complainants. The simple point is, to what extent shall the complainants receive interest and charges under a stipulation for the division of the fund in litigation.
I now come to the ground upon which Mowatt insists that the complainants shall not receive the interest in question. It is, that they took upon themselves to carry on the foreclosure, they were bound to do it with diligence ; and if they had proceeded with diligence, the fund would have been realized more than four years sooner than it was.
1. The agreement is explicit that the complainants shall foreclose the mortgages.
2. It is a consequence, that they were to do it with reasonable diligence.
The agreement does not enable the defendant to move in the matter. Not only that, but he thereby relinquished his claims and standing in the creditors suit, where he was an actor, and could have urged forward the proceedings. His rights and interests were all merged in the stipulation. He was powerless, and wholly dependent upon the diligence of the complainants. It may be conceded, for the sake of the argument, that there was no such relation as that of principal and agent created by the stipulation ; and it is clear that the foreclosure was to be prosecuted for the joint benefit. Yet it does not follow that the complainants were at liberty to proceed or not, at their option ; much less that there was an adequate remedy open for Mowatt by filing his own bill.
A recent case in England before the Vice-Chancellor, Sir James Wigram, is a commanding authority on this point. (Sowerby v. Clayton, March 26, 1844, 8 Lond. Jurist Rep. 597.)(a) There W. Sowerby, an administrator, with the will *114annexed, filed a bill for the administration and settlement of the estate in 1823. In July, 1824, an order was made for the sale of certain reduced annuities, old and new four per cent, stocks, and bank and East India stocks, and for the investment of the proceeds in bank £3 per cent, consols. The complainant did not sell out those funds, nor prosecute the order during his life, and he died in August, 1838. The legatees under the will of his testator (who were parties defendant in his administration suit,) claimed to charge his representatives with the loss which they had sustained by his omission to sell out and invest in bank consols pursuant to the order. The Vice-Chancellor sustained the claim, and decided that W. Sowerby was bound to have prosecuted the order of July, 1824, obtained by himself; and it was no excuse for his having omitted to do so, that the defendants in the administration suit might themselves have applied to have the order carried into effect.
Next, are the complainants chargeable with the xvant of reasonable diligence? The stipulation was made June 28th, 1838. Their bill was filed December 4th, 1841. They seek to account for this long delay on two grounds ; viz. the inherent difficulty and perplexity of the case, and the acquiescence of Mowatt.
In regard to the first, I shall be sufficiently liberal, if I take the estimate of their own counsel, Mr. Marvin. He testifies that in his opinion, if the proceedings had been commenced immediately after the execution of the stipulation, it would have taken at least a year and a half to have made the necessary inquiries and searches, prepared and filed the bill, served process, advertised the absent defendants, procured the appearance, &c. of the infant defendants, obtained a decree and procured a sale of the mortgaged premises.
With this allowance, the sale ought to have taken place the first of January, 1840. Proceeding from the date of Suckley’s assignment, it would be the 24th of January; but as the payment of the $13,579 42 was made on the 28th June, 1838, it must be inferred that his assignment had then been negotiated.
Then as to Mowatt’s acquiescence. The whole proof of this consists in his request when leaving for Europe, after the time when the decree should have been had, that a sale might not *115Sake place during his absence. The same testimony shows that up to the time of his departure, he had been urging that the proceedings should be brought to a completion, to a decree, so as to be ready to sell at any time when deemed advantageous. I am sure that such a request not to sell, made at that period of the affair, is no acquiescence in the precedent delay to institute the proceedings.
It was agreed by the counsel, that about seven-eighths in value of the premises sold, were vacant lots ; and they also concurred in their deductions from the testimony, that the premises were worth as much in January, 1840, as the actual sales in 1844, and would have produced the same aggregate.
The result is, that if the complainants had proceeded with that diligence for which they had contracted, and which their duty to the defendant enjoined upon them; the fund arising from the sale would have been realized in January, 1840. Allowing a reasonable time to complete the sale, I will assume the first of February, 1840, as the period when it ought to have been in the hands of the master.
It would be manifestly wrong and inequitable, to allow them interest during the time that has since elapsed; and in the distribution, the interest on their claims must cease on the 1st day of February, 1840.
From the gross proceeds of the sale, the master’s bill and the costs of the infant defendants are to be deducted; but the $216 14, paid by the master for the taxes of 1842 and 1843, are not to be allowed out of the proceeds. From the net proceeds thus obtained, the complainants are entitled to retain the respective sums mentioned in the stipulation, with the interest to February 1, 1840, at the rate agreed upon.
The residue is to be divided equally between them and James Mowatt, they retaining from his half the $500, for expenses.
To this residue, before its division, there is to be added the $200 received by the complainants from the release of the William-street lot, and the rents received from the same lot which accrued prior to February, 1840. Also such other net income as accrued prior to that day, as exhibited by the receiver’s account and other papers in the cause.
*116This is all susceptible of a ready computation, and I perceive no necessity for a reference.
I cannot allow Mowatt’s claim for interest since February, 1840, on the balance due to him. That is a distinct substantive claim for positive relief, which is not covered by the stipulation, and is thus beyond the scope of the suit as now constituted.
There must be a decree according to the foregoing directions.

 Now reported in 3 Hare, 430.