Van Hook v. Somerville Manufacturing Co.

The act incorporating the Somerville Manufacturing Company provides, that the stock, properly and concerns of the company shall be managed and conducted by five directors, one of whom shall be president; and that the president and directors, or a majority of then), shall and may appoint such officers, superintendents and agents as they may think proper; and that the president and directors, or a majority of them, shall have power to call in installments on the stock. Can two of three directors assembled make a mortgage of the lands of the company ? Can two of three directors assembled make a mortgage to the third? The book of minutes of a corporation is only prima facie evidence of tbs correctness of the entries made in it. The appearance of the minutes may, of itself, raise so strong a suspicion against the regularity of the proceedings, that no weight will be given to them.- The corporate seal may be affixed by a less number of directors than is ñecos, sary to constitute a, board, If it be done by the direction of a legal board. If, on a notice to all the directors, a meeting bo held at which some of them do not attend, and an adjournment is made to a subsequent day; is the meeting on the subsequent day a meeting on due notice to all the diree. tors ? The consent of a director not sitting in a legal board is nugatory. if a mortgage bo given, even by a competent board of directors, to one of their number who is the financial agent of the company, to enable him to raise money for the company, on his representation that the money needed by the company could not be raised on the bond and mortgage of the company giyen directly to any lender; orjafier failure so to raise money for the company, and on his representation that ho could raise the money on a bond and mortgage of the company executed to him, by an assignment of it, allowing a greater rate of interest than the legal interest; it would be a fraud on the company to enforce the mortgage against them as a mortgage to him for his own use and benefit; and if he attempt to do scs, he will be held to have procured it by fraud. In general, fraud in the obligee in obtaining a bond is a good defence against an assignee of the bond, though he be a bona fide purchaser of it without notice of the fraud. But it was held, that a bona fide assignee without notice, of a bond and mortgage given under the circumstances and for the ob. ject before stated, might enforce them against the company. Certain certificates of the director who was president, one, signed by him as an individual, stating that the bond and mortgage was executed by him as president, by order of the board, “ as said amount was due the obligee as' agent of the company,” and the other, signed by him as president, stating that the board, having examined the account of the obligee against the company, did pass the same and acknowledge a balance duo the obligee, of $9638 17; and'a copy, signed by the secretary of the company, of what purported to be a resolution of tire board, that the bond and mortgage was a legal and subsisting liability of thd company, and that they had uo de. fence to' make to' the same; which writings wore procured by the obligee, to aid him,' as he said, in negotiating-the bond and mortgage; 'were exhi. bited.on the'part of the complainant, to show good faith in taking the as. signment; Before the complainant took the assignment, he was told by the president, that lie, the president, considered the property would be worth $20,000 when in- operation; that if ho, the complainant, had the money to spare, he could not put it out more safely; that they were anxious to get the money and have the works in operation, and that if they could obtain the money on'the bond and mortgage, they would bo able to put the works in operation'/ After this, the complainant took the assignment of the bond and mortgage," and in exchange or alleged exchange therefor, made a deed of leasehold property in New-York to a son of the obligee; and the complainant produced in evidence a certified copy of a mortgage made by the son to one ■ Morgan, dated August 23d, 1842. There was no evidence given to show when the assignment to the complainant was delivered, or the deed to the' son ; whether on the same day the mortgage was made by the son or not; but it appeared that an 'assignment of the bond and mortgago was loft, by the obligee, in the office of the clerk of Somerset, on the 1st of August, 1842, and recorded after the 9th of August, 1842. No account'was given of the mortgage made by the son, except that the witness of'the complainant who produced the certified copy of it, stated, that he had seen it in New-York the morning of the day of his ex-, amination, in-the hands of one Edward P. Clark, and that “ ho could not get the original out' of the-office, they'refused to let him have it.” Held, that thecomplainant oould not be considered a bona fide purchaser of the bond and mortgage for consideration paid; and held, further, that the information he received from the president was sufficient notice to overcome the evidence-he-offered of bona fides, if that had been sufficient to show it.

On the- 1'Ofch of January, 1842, a bond for $9600, and a mortgage on- the real estate of the Somerville Manufacturing Company to secure the payment thereof on or before January 5th, 1845, were, or purported to have been executed by the said company to Jared N. Stebbins, a director of the company. They are signed “ John I. Gaston, president of the Somerville Manufacturing Company,” with an- ordinary seal annexed. The concluding clause of each runs thus-: “ In testimony whereof, John I. Gaston, president of said company, hath hereunto set his hand and affixed the seal of the said company, by order of the said company.” The certificate of the officer who took the acknowledgment'of the mortgage, states, that said Gaston, known to him as president of the said company, appeared before him, and, he being satisfied that the said company are the grantors mentioned in the deed, and having made known to the said Gaston the contents thereof, lie did acknowledge that he signed, sealed and delivered the said instrument as his voluntary act and deed for the uses and purposes therein expressed, and that he sealed the same with the seal adopted by the said company, and by the order and direction of the board of directors of the said company. This instrument was recorded in the clerk’s office of the county of Somerset, on the 26th March, 1842. Stebbins, on the 25th of July, 1842, executed a separate instrument under seal, in the presence of a subscribing witness, and acknowledged before a judge of the common pleas of Somerset county on the 26th of that month, assigning the said bond and mortgage to William Tan Hook, the complainant. This assignment was delivered in the clerk’s office of Somerset, by Stebbins, on tbe 1st of August, 1842, and recorded after the mortgages left in said office for record on the 8th and 9th of August, 1842; and was delivered to Mr. Blauvelt, the complainant’s solicitor, on the 10th of May, 1843. Van Hook exhibited his bill for .the foreclosure of the said mortgage, and made the Somerville Manufacturing Company, and liUther Loomis and Samuel P. Lyman, who claim the property under a deed from the company, and certain judgment creditors of the company, defendants. A decree pro confesso has been entered against the company and the judgment creditors. The defence arises under the answer of Loomis and Lyman and the proofs in the cause. The nature of the defence will sufficiently appear, in the opinion of the chancellor. The testimony in the cause is as follows:— George H. Brown, for complainant. On being shown the bond, he says, he is the subscribing witness, and saw it executed by John I. Gaston, president of the company, and who was then reputed president. The seal annexed was then adopted by the board of directors for the express purpose. He is also subscribing witness to the mortgage; it was executed in his presence by said Gaston, president as aforesaid. On cross-examination, he says, Stebbins called on him and requested him .to prepare according to Jaw the said bond and mortgage. He suggested to.Stebbins that the board must adopt a seal. On reflection, he cannot say he was .present when the seal was adopted ; or whether l}e was afterwards told that the seal had been adopted. Does not know that notice was given of the time and place of meeting when the bond and mortgage were executed, or seal adopted. ,He has no personal knowledge of a resolution of the' board .to give this bond and mortgage.; hut at the time it .was done, a .resolution .was produced, and thp secretary, Joseph A. Gaston, was present, directing or authorizing said bond and mortgage to ,be given. Witness supposes this was the original resolution which had passed the board for that purpose. T.he resolution was shown deponent, and the bond and mortgage were executed at the house of Joseph A. Gaston, secretary, in Somerville. The persons present were John I. Gaston, president, Jared N. S.tebbins, a director, Joseph A. Gaston, secretary, and. he thinks, William Packer, another director. The meeting was for the purpose of executing thp bond and mortgage, and the said resolution was produced to satisfy witness that it was correct. The secretary kept a book ,of minutes. A paper writing, purporting to be a true qopy of a resolution from the minutes of the said Somerville Manufacturing Company, signed “ J. A. Gaston, secretary,” dated 28th June, 1842, is produced, and marked Exhibit C. on the part of the complainant. The witness says it is in the hand-writing of Joseph A. ¡Gaston, secretary. The assignment of the bond and mortgage by Stebbins to the complainant, .marked Exhibit D. on .the .part of the' complainant, is admitted by Thomson, solicitor for the defendant? Loomis and Lyman. William Packer, for the defendants. He was a manager (i. e. director) on the 10th of January, 1842, and for the year preceding. Ibbotson and Tan Renselaer lived out of the state. The company were then engaged in putting up the screw factory, foundry and blacksmith shop, and getting other machinery. There was a log for the shaft which had laid there six months, partly dressed, and they could not get along any further, for the want of money. At (his time, he had received for work he liad done, between $3000 and $0000, on the notes of Wall and Nevius, given to him by Slebbins; he never got any money from Stebbins. Stebbins, who was agent of the company, at a meeting of the board, slated that there was a debt of about $2000 against the company, and that they could start the works if they could raise $5000 or $0000, besides paying the debt. Through the six mouths prior 1o the 10th of January, Stebbins held out inducements io him to go on with the work, and said he could raise money by a loan on a bond and mortgage of the company. At the time he called us together, about the 1st of January, 18d2, he said he could not raise the money in this way, and that lie would have to give, a higher interest, or pay a premium to raise the money; and then proposed a plan how he could raise the money to complete the works. This plan was, to give him a valid mortgage for the amount they would want. Witness objected to it, on the ground that the company owed him a great deal of money, and that he did not know that they owed Slebbins a cent. Witness did not think it safe to give Stebbins a mortgage. Stebbins assured them it was the only way they could ever got the works going. Through Mr. Van Renselaor, witness was induced to agree to the plan. Van Renselaer said he knew Stebbins could not raise the money the-oilier way, i. e. by a mortgage from the company to the lender, because he would have to give a premium on it; and therefore proposed that the mortgage should he given to Stebbins in his own name, and stated that in that way the money could be obtained. This was Stebbins’s plan, and advocated by Van Renselaer. This was about the 1st of January. John I. Gaston, Stebbins and he, were the only managers present when the mortgage was given, on the 10th of January. Either Stebbins or John I. Gaston called on him, and requested him to meet at Mr. Brown’s office or house, in the evening, at the time the mortgage was given. Witness does not. know that other members of the board were notified to meet. He never had a thought but that this mortgage was given to , "aise money to pay the debts of the company and start the works. Stebbins said the money was wanted to pay $2000 the company owed, and to start the works; and that it would take about $5000 or $6000 to-complete the works. John I. Gaston suggested, that it would take more than $2000 to pay the debts, and therefore the mortgage was made for more than $8000. It was made for $9600. Witness was contractor for building the works, and .a great deal of money was due him. Stebbins -said he wanted to pay Theodore Young some money, and some at New Hope for castings; also a debt due the State Bank .at Elizabeth. Witness never knew there was any money rais.ed on the bond and mortgage to pay the debts of the company. He never got any of it. Not one of the debts named by Stebbins has. ever been paid: they stand just as they were. Through the inducements held out to witness by Stebbins, and letters he wrote to Gaston, he went on with the works and nearly completed them- The inducements named by Stebbins were, that ■he was negociating the mortgage, and would get the money and pay witness for his work. He was finally compelled to suspend his work. The foundry was still unfinished. The millwright came, with four or five hands, .and worked at the mill -two months; they were induced to come by Stebbins. They then stopped, and would not work another stroke. They told witness . they were going to be deceived by Stebbins. They got nothing but about $80, in trade, from Mr. Steéle’s store. This he understood from Mr. Young. The castings were left at .Bound Brook, and Stebbins could not get them up, as he could -get no one to work for him ; and there they laid till the next ’October. During the time he was negociating in New-York for the money, he said, frequently, there would be gentlemen up to see the works, and wanted us to show them as much as w-e could, and make things as favorable as possible. After this he «told us there must be one more thing done; there must be ■some resolutions passed to suit Mr. Blauvelt. These resolutions ■were passed, but whether witness was present or not, he cannot say. He wrote to John I. Gaston, that he wanted a certificate from the president of the company, to show that the company owed him the money. At the time the mortgage was executed, witness wanted Stebbins to give him a writing to show to the other persons interested why they had acted as they did, and that the mortgage was given only to raise money to pay the debts and start the works, and not to pay Stebbins ; for witness never knew that the company owed him any thing. Witness insisted on this at both of the meetings. Stebhins assured him it was not necessary; that he was the agent of the company,- and that what, he did weald be right, lie said he did not want it known that he had taken the mortgage in-his own name; and if he gave a writing he was fearful it would get out. He said ho was the agent of the company, and if it got out among the people that, the money was not' coming to him, he would be censured, and then he would not be able to get along ; but that he wished it kept, still till he got the works started. Witness told him that he, witness, had told Judge Nevius all they had done. Stebbins said he had done wrong, and that he was afraid witness would defeat him in getting the money. Witness-told General Wall, when he saw- him, what they had dons; that the mortgage was given to Stebbins to raise money to pay the debts and start the works. Witness was present at a meeting of the Water Power Company, when Stebbins applied for a lease of water for the Manufacturing Company, and stated that he could not negociate his loan till he got the lease. This was;in June or July, 1842. At the time the mortgage was given, (Stebbins had received from Wall and Nevius $10,500 in notes. He got out of Steele’s store more than $500: so Steele told witness. He received from Gaston between $600 and $700. There is still remaining, debts of the company contracted by Stebbins while he was agent, over $7000. Witness received from Stebhins, as agent of the company, about $4100, in the notes of Wall and Nevius. Stebbins never pretended to witness at the time the bond and mortgage were given, that there was any thing due him from the company, and that there had been any settlement of any account between him and the company. On cross-examination, he says, la January, 1842. and before, John I. Gaston was president of the company. The board of managers, at, their meeting about the 1st of January, 1842, directed that the president should give the bond and mortgage. The amount of it, he thinks, was fixed at, that, meeting; but he cannot say positively. The board of managers, on the day' the bond and morí gage were given, adopted a seal for the com pany. He thinks Joseph A. Gaston was present at the meeting’ when the bond and mortgage were 'given. He thinks it was about April court, or at a time that Stebbins stated to him that Mr. Blauvelt was at Somerville to examine the records, that Stebbins wished to get the resolutions passed by the hoard. He does not know that Blauvelt was ever up to examine the records ; but only what Stebbins told him. The resblutions required by Stebbins were passed by the board. Joseph A. Gas-ton was secretary of the board. Thinks it was within, two weeks after the bond and mortgage were executed, that he told Judge Nevius it was done, and stated to him why it' was done. Thinks it was in-the June following that he told General Wall the bond and mortgage had been given. General Wall said very little about it. Judge Nevius was a good deal dissatisfied. General Wall said they had got enough alreadjr in the hands of Stebbins. Wall and Nevius were then large stockholders, and had paid in, between theni, between $10,000 and $11,000 on their stock. No effort was made, to his knowledge, by any one of the company, to recover back the bond and mortgage from Stebbins. We never had an official meeting of the board after the bond and. mortgage were given, till after we found he had used them. He had used them a long time before any of us knew about it. I only knew the debts of the company from acknowledgments and statements made at the meetings of the board, and by the statements of the managers and the president. On re-examination. After they bad found out that Stebbins had assigned the bond and mortgage to Van Hook, he, Stebbins, denied to witness and John I. Gaston that he had ever made use of the bond and mortgage, and said he could make no use of them till he could g*et a lease from the Water Power Company. Witness does not know that Wall or Nevius was ever informed that Stebbins intended to use or had used the bond and mortgage for any other purpose than what it was intended for: Witness was present at a meeting when Stebbins applied for a lease of water, when Stebbins blamed General Wall for his not getting the. lease. Stebbins said he could not raise the money on the bond and mortgage without the lease. General Wall then said he could not have the lease, and that he must return the bond and mortgage. The company frequently told Stebbins that he was largely indebted to them, and if he had any claims he must present them ; and he would say he was ready for a settlement, that his books were in JNew-York; and when in New-York, he would say they were'in Somerville; and, we never could nor did get a settlement while Stebbins was in the board. John I. Gaston, for the defendants. He was president of tho company. Wliat Packer has testified as'to the situation of the buildings and the property generally, is correct. The first he knew of the bond and mortgage, was on the evening the company resolved to give them.. There had been some talk about giving them some time before, for the purpose of raising money for the company. Then he found they had all agreed on giving the bond and mortgage. He was opposed to it himself. He did not wish to incumber the property without giving the stockholders notice. Stebbins then said,- that all we bad done would be lost unless we raised money on bond and mortgage; and that there were many debts that were pressing and must be paid. He then produced a memorandum showing that the company owed him about §10,000 for services, houseurent, &c., and' considerable interest on it; and therefore there would be no danger in giving him the bond and mortgage. The reason he gave why a bond and mortgage should be given to him was, that he could not negocíate a bond and mortgage to the lender. He said he would be compelled to give a premium on it; but if it was given to him, he could assign it, to some one and give some further security and make it an individual transaction of his own. He said it would enable him to pay the pressing debts of the company and complete the works. That was the purpose, entirely, for which the bond and mortgage were given *s- and not to pay any debt the company owed him: 1 did not, Id.' giving the bond and mortgage, recognize that the company owed Stebbins any thing ; yet at the same time, if he had not made some show that the company owed him. witness would not have consented to give the bond and mortgage. As it ulti - mately turned out, I believe, the company did not owe him one' dollar. In the statement exhibited by Stebbins, he thinks there was no credit given ; the account was nearly all for salary. M© knows there was no credit given- for the notes received from General Wall or Judge Nevius. There never was a settlement with Stebbins and the company; and we could never get a statement of what he had received. He thinks Stebbins had received, in notes of Wall and Nevius, $10,000. The indebtedness of the company at the time the bond and mortgage were given was about $6000; He does riot know what Stebbins had paid out. The whole of the expenditures at that time ought not to have? exceeded $6000. At the time the bond and mortgage were given, Stebbins said the-"object of the mortgage was to raise money to pay the pressing debts and complete the works. There never' was one dollar raised on the bond and mortgage that came into the hands of the "company; and I did not, until within a year past, know that1'it had been assigned away by Stebbins. The letters shown" him, and marked Exhibits A. and B., are in the hand-writing of Stebbins; and were received by witness from Stebbins, during the time he pretended he was negociating the loan. The $1500 mentioned in the letter of January 17th, 1842, is a prior debt against the company, as security for liabilities incurred for the company. Mr. Packer, whose name is- mentioned in the letter marked B., is the William Packer who was contractor on the works. Stebbins said he must raise the money to "complete the-works, for that he had $30,000, all he had in the world, in the company; and he would be ruined unless he got the works completed. The property mortgaged, being in an unfinished state, and without the use of the water, - and if subject to the mortgage of $9600, was not worth any thing to the stockholders; neither would-it pay the mortgage. Stebbins brought'Yan Hook out to look at the property, sometime during the spring or summer of 1842. Yan Hook stopped at witness’s door, and told witness he had come out to see about loaning Stebbins the "money on the bond and mortgage. I told him we wanted about $10,000 to set the property going and pay the debts, and that"Stebbins said that sum would do it; that I considered the property would be worth $20,000 when in operation. I told him the amount of expenses we had been at, about $180,000;. that if he had the money to spare, he could not put it out more safely; that we were anxious to get the money and have-the works in operation.- Yan Hook said he could furnish the money if he was satisfied with the security; hut that he did not wish to run any risk, as he liad already lost some money on loans made for other persons, lie made several inquiries respecting the value of the property. That is all that passed between us that 1 know. I never made the least intimation to Van Hook, or any other person, that the money was to be raised for the benefit of Stebbins; but always supposed it was for the benefit of the company. Van Hook did not inquire as to the means of the company for completing the works; but I told him, that if we could obtain the money on the bond and mortgage, we would be able to put the works in operation, and that then the property would be valuable. My impression is, that the resolutions offered in evidence were passed before the conversation took place with Van Hook, hut am not positive. By the information witness received from Stebbins, there was no negociation of the bond and mortgage at the time the resolutions were passed. I gave Stebbins such a certificate as he asked for to enable him ¡to effect a loan. It was given him for the same purpose the bond and mortgage were given for: to enable Stebbins to make the loan. 1 gave the certificate to aid him in making the loan, and that the bond and mortgage were valid. I never gave Stebbins a certificate that the company had given him the bond and mortgage for any debt due him from the comparry. Cross-examined. He does not recollect whether he was present at the meeting of the hoard when the resolutions were passed: but he recollects something about the resolutions, and probably he was present at the time they were passed. He presumes the original minutes are in the hands of the company in New-York. Jbbotson got them of his son, and took them to New-York. He did not convey the idea to Van Hook, or any other person, that the bond and mortgage were given to Stebbins for a debt due from the company to Stebbins. Van Hook made no inquiry about its being for a debt due Stebbins. There was no conversation on that subject. In chief. The resolutions were to aid Stebbins in -the negociation in raising the money on the bond and mortgage for the use of the company. He applied to witness for the resolutions, and said he wanted them to assist him in got-ting the money on the bond and mortgage; and they were passed for that purpose; and if any certificate was given by me as president of the company, it was given for the same purpose. He does not know that Stebbins ever paid any money out of his own funds for the use of the company. The company'have never expended any thing at Somerville, except for building and some castings. The expenditure he before alluded •to is $180,000 in stock. The scrip ro be delivered for the Poughkeepsie machinery and patents, depending on them to fulfil. Cross-examined. Witness is not a stockholder, and has no interest in this suit. Stebbins was employed by the Somerville Manufacturing Company as their 'agent, at $3000 a year salary and a-house. Thinks it was three .years from the time ■he was engaged as agent till he was dismissed; but he does not know .that he was .engaged in the business of the company more than a third of t.he time. The first year he "does not think there was much done. There never was any agreement ■between the company and Stebbins varying the first bargain made. There never was a settlement by the company with Stebbins: they never could get 'him to a settlement, or to make a statement. There never was a formal account rendered by him to the company as agent. At the time the bond and mortgage were given, Stebbins presented a statement on a small piece of paper, showing that the company was indebted to him between $9000 and $10,000 for services. There was a minute made in the books of the company ,of the bargain of the company with Stebbins. Yan Renselaer was present when the statement was produced by Stebbins, and it was talked about.; but he does not .recollect that Yan Renselaer said any thing about fit. Witness did not .take the statement as a settlement; but merely to show -that the company were in no danger in giving him the bond and mortgage. He does not know that Yan Renselaer recognized the statement .as a just claim of Stebbins against the .company. In chief. At a meeting of the company in New-York, the company .told Stebbins they were unwilling to pay him $3000 a year, because he had .not been engaged in the business of the company the whole time. Stebbins said he had been engaged ¿a considerable part off he time for the 'Water ..Company, and he was willing that whatever that company paid him, might come out of his wages. The company never admitted that they owed Stebbins any thing ; but we did not know whether we owed him, or he owed us. At the time the bond and mortgage were given, it was proposed by Stebbins, and agreed to by the company, that it should be given to him to raise money to pay the debts of the company and to enable them to complete the works, and for no other purpose, and not for any debt due him from the company, or pretended to be due. James Taylor, for defendants. The assignment of the bond and mortgage was .acknowledged before him. He does not know who brought it to him. He has never seen Yan Hook to his knowledge. Stebbins appeared before him and made the acknowledgment. Thinks he heard Stebbins say, that the object of giving the bond and mortgage was to raise money for the cofnpany to-complete the works; that is his impression, but lie is not certain of it. Edward F. Loomis, for .-the defendants. He served a subpmiiaon Henry L. Stebbins to appear at this place this day ; served it last evening about, half-past four o’clock, and paid him one dollar. "When witness handed him -t-he. subpoena, he said, what •is this ? He read it, and said he did not know what it was; he said he did not know any thing about it, that he did not know Mr. Yan Hook. Henry L. Stebbins is .the reputed son of Jared N. Stebbins. Allan Clark, for the defendants. I now reside in Somerville■: -in 1842 I resided in New-York. The paper marked Exhibit C. on the part of the defendants, is in my hand-writing. I saw-it executed by all the parties except Mr. Gaston. It was executed by Stebbins on the 11th of September, 1842; and was finally executed by all the parties on the 1st of October, 1842. It was to take effect as soon as a majority had signed it. The paper marked Exhibit D. is in my hand-writing, and was executed on the 2d of September, 1842. It was modified in part on the 11th of September, 1842, and referred to in the agreement signed that day. The paper marked Exhibit E. is in my hand-writing, and was executed in part on the 11th of September, 1842. It was signed by Van Renselaer, Loomis and Lyman and Jared N. Stebbins on that day; it was afterwards signed by General Wall, not in my presence, but I know his signature; and also by Lyman for Judge Nevius. I saw the authority in the hand-writing of Judge Nevius to •Mr. Lyman for'him ¡to sign his name to.that writing. The .date of this writing -was altered from September 11th to October 3d, at the request qf Stebbins. He stated that it was ,for the purpose of securing a small debt.of the Manufacturing •Company to Mr. Steele, ,of about $500-; that he had promised •Steele there should ¡be.-no-prior lien to his. He said the property was clear of all incumbrances. I ‘-have heard him represent .this more than once. The first I heard of the .negotiations which resulted in the above agreement, was a .conversation between Stebbins and 'Lyman. Stebbins represented all the debts of the company not to exceed $3000; ;he never claimed any debt that the company owed him. I have seen him make a list of the debts. He always represented that the co'mpany were unable to go on any further for the want of money, and ■ that was the reason he applied to Mr. Lyman to make the negotiation. I was present when the agreement was signed by ..some of the parties. I knew the property which Stebbins said he had bought of Tan Hook. I-had a,conversation with Steb■bins in April last.about this property. I have known the property for .ten or fifteen years; it is .leasehold property, and the .term has about ten years to run. At the time Stebbins got this .property it was worth .about $4000. Stebbins has always claim.ed this property ¡as his own. Cross-examined. There are buildings on .this property, of 'brick, about twelve and a half feet front and three stories high ; I think there are five separate entrances to the building in ¡front. I do not know what is the rent of the property. I lived fin the neighborhood of the property sixteen or eighteen years ; i now own ¡property in the same neighborhood. I am now in •the employ of Lyman and Loomis, who are partners in business. William Thomson, for the defendants. I saw the paper ■marked Exhibit E. executed by John I. Gaston. A deed from the Somerville Manufacturing Company to ■Loomis and Lyman, dated October 18th, 1842, was exhibited .on the part of the defendants. The Master states, that it was admitted by the parties, that the assignment of the bond and mortgage by Jared N. Stebbins to the complainant, was delivered in the clerk’s office of Somerset county, on the 1st of August, 1842,- by said Stebbins, and recorded after the mortgages left in the office for record olí the 8th and 9th of August, 1.842, and delivered to Mr. Bíáuvelt, the complainant’s solicitor, on the 18th of May, 1843; and that it was agreed by the parties; that the paper marked Exhibit CL on the part of the complainant, is a true copy of the resolutions passed by the board of managers of the Somerville Manufacturing Company, duly certified by the secretary. John M. Mann, for the complainant. He is acquainted with Loomis and Lyman, two of the defendants : is acquainted witii the property of the Somerville Manufacturing Company contained in the mortgage in controversy. Sometime prior to June 25th, 1842, the precise time he cannot say, lie was employed on behalf of Mr. Van Hook, to examine into the title of the property belonging to the Somerville Manufacturing Company, at Somerville, included in said mortgage, with the understand - ing that there was a negoeiation going on between Van Hook and Jared N. Stebbins. He made the examination, and gave a certificate to that’effect. He examined the book of minutes of the company, as if was represented to him. He did not know it to be the book of minutes of the company, any more than that it contained the proceedings of the company; he does not know where he found it. He found on this book a resolution of the board of directors of the company, of an indebtedness of the company to Jared N. Stebbins of $9638. There was also in said book, a resolution authorizing the president of the company to execute a bond and mortgage to Jared N. Stebbins for $9600, on the real- estate of the company. All the information he gathered in relation to this property, he gave either to Van Hook, or to’his counsel, Mr. Blauvelt. He had' no knowledge of the bond'and mortgage given to Stebbins, or’ any thing in relation to it, except what he got from the resolution on the book of minutes of the company. He knows the hand-writing of John 1. Gaston; being shown a paper writing marked Exhibit A. on the part of the complainant, he says,the name John I. Gaston, subscribed to said paper, is said Gas-ton’s hand-writing. Cross-examined. He thinks the property of the Somerville' Manufacturing Company would be worth very little without the ’iVater power. Abner Jones, for the complainant/ He resides in Nett-York, and has resided there thirteen-or fourteen years; he has been a real estate' broker for the last'live years, and is now. Being" shown the bond and mortgagte in controversy, he says he has seen them before. The first time he saw them' was in the spring of 1842; the occasion on which he first saw them, was about the time of the completion of the arrangements between Stebbins and Van Hook. He had been applied to prior to that time, by Stebbins, to negocíate the bond and mortgage for him. About the last of March or first of April,' 1842, he was applied to by Stebbins to negocíate the bond and mortgage.- Witness offered it- for dry goods; and offered it to other persons before he offered it to Van- Hook. About the time last mentioned,- he offered the said bond and mortgage to Van Hook for some houses he had-in the third Avenue, New-York. While it was under consideration, he obtained from Van Hook another-offer which Van Hook preferred,- being, some cash and New-York securities. In the fore part of May, witness went and showed Jared N. Stebbins the property contained in Exhibit I., J. M. Mann, master; which resulted in the purchase of the bond and mortgage by Van Hook. Stebbins was to make up the mortgage to $10,000, and make it equal to a ten per cent, mortgage. Van Hook was to give him for it, the five houses and lots contained in said Exhibit I., and the leases, and give him also the benefit of the decree, if the property should not bring as much as the mortgage Van Hook held on the property. The rent which had been kept back for six or nine months in the hands of a receiver, was to go to Stebbins. Van Hook- at this- time held a bond and mortgage on the said property, witness thinks, of $10,000, which was in an advanced state of foreclosure, or had been foreclosed, he does not know which. The sale of the property had not then been made; it was to be sold, and after the sale Stebbins was to get his title through Van Hook. This trade had been agreed upon some weeks before the sale by the master-.- The sale was partly given up once by Van Hook. Stebbins desired the property to be purchased in as low as it could be. 'Witness took a message from Stebbins to Van Hook, for him. Van Hook, to buy in the property at a small price. The reason why Stebbins wished the property bought in at a small sum was, that the smaller the sum for which it cold, the larger would be the amount left due on the decree, which lie, Stebbins, would be enabled to enforce against Bowen, the defendant in said decree; which balance belonged to Stebbins by the terms of the bargain. This whole transaction took place in the city of New-York. Witness was first applied to by Stebbins ; Van Hook never applied to witness; Van Hook paid one half of the commissions, in consequence of some misunderstanding between Stebbins and Van Hook as to the terms of the bargain; this was done by way of settling the difficulty. Witness looked to Stebbins for his commissions; did not think of charging Van Hook, until Stebbins and be agreed that he. Van Hook, should pay one half. Van- Hook refused to part with the five houses and lots for less than the amount of his mortgage, as they were worth that to him. Witness and Stebbins went together to see the- property, and went through two or three of the houses; this was before the bargain was made. At this time Stebbins was willing, and proposed to witness, to give his bond and mortgage for the said property and decree. Previous to the bargain being closed, Stebbins went to see the property once or twice, as he informed witness, and showed him a memorandum of the income. After paying ground-rent and all expenses, the property rented for enough to make it a seven per cent, matter on $10,000, as it strikes witness; he does not speak positively. Stebbins examined about the rents particularly, to know what would be in the hands of the receiver. Van Hook repeatedly said, in the course of the negotiation, that he would not take less than the amount due on his mortgage. Witness says, if he had owned the property when the bargain was made, in May, 1842, he would not have taken less than $10,000 for it. Since this property has been sold by Van Hook, it has been mortgaged for $8000. Witness has seen the mortgage: saw it this morning in the hands of Edward P. Clark; never saw the mortgage in any other place than in the city of New-York. Being shown a paper marked Exhibit B. on the part of the complainant, he says it is a true copy from the original, which he could not get out'of the office; they refused to let him have it. Witness has sold and negotiated for the sale of a large amount of real estate in all parts of the city of New-York. During the last five or six years he has been a.’real estate broker in the city of New-York. He has some knowledge of the value of real estate in the city. During the time of this negotiation, and about the close of it, he learned from Yan Hook and Stebbins that they had been over to Jersey, at Somerville, to look at the property on which the mortgage in controversy is. They said they had seten Gaston, the president of the company. Yan Hook did not see the property; had not time. From the time the first trade of the third Avenue property was talked about/ Yan Hook and Stebbins talked of going over to5 Somerville, and whether they did go before the last'tradé was introduced or shortly after, witness is not able to say with certainty; but feels ■ confident it' was before the 20th of May; 1842. Cross-examined. The property in the" deed contained in Exhibit I., was sold at public sale. Henry L. Stebbins had nothing to do with tlie negotiation with Yan Hook. About the close of the negotiation Stebbins said the property was to be made to his son, Henry L. Stebbins. John S. Blauvelt, for the complainant. In the spring of 1842, he was in the complainant’s office in the city of New-York ; he cannot specify the exact time, but thinks it was the last of April or early in May. Yan Hook stated to witness that Stebbins had offered him a mortgage upon the property of either the Water Power Company or the Somerville Manufacturing Company, and wanted witness to examine the title and ascertain the value of the property. Witness told him he had better-get John M.-Mann to-do it, as he lived some distance from Somerville; that Mann had been clerk-of the county, knew the property, and probably knew the title, and he could get more satisfactory information from him than he, witness, could give him. Yan Hook thought that would be the best way. As the conversation closed, he remarked to Yan Hook that the bond and mortgage being made by a corporation, he had best ascertain, before he took it, if it had been properly executed, and he had better also get a recognition- of the bond and mortgage'' by the company as a good and valid bond and mortgage, and that the company had no defence to make against the bond and mortgage, either in law or equity—or something to that effect. Witness.does not recollect that he held any communication with Van. Hook on the subject afterwards, until after the bond and mortgage had been assigned to him ; nor had witness anything todo with the examination of the title or value, or with the negotiation, having referred him to Mr. Mann as his counsel to get the information. Witness was at Somerset court, which is held on the third Tuesday in June in each year, at the term of June, 1842, on the first day ; saw Stebbins there; ho inquired of witness what kind of a resolution of the company Van Hook wanted in relation to the bond and mortgage, so that he, Van Hook, would take it. Witness referred him to Mr. Mann. Stebbins applied again, and may he more than once, and finally witness told him what kind of a resolution be supposed Van Hook wished. Witness may have drawn or dictated a resolution on the subject, but his memory does not entirely serve him. Fie had some conversation, he thinks, but is not certain, with Mr. Mann on the subject of the bond and mortgage. Witness did not then know any thing about the bond and mortgage, or the circumstances under which it was given ; nor did he hear any thing of any difficulty about the said bond and mortgage until several months afterwards, thinks about the middle of the following winter. When witness was at Somerville in June term, 1842, as above stated, he knew the fact that Van Hook had been to Somerville to see and inquire about the mortgaged property; that he had seen Gaston, the president of the company, and that he liad not seen the property, for he told witness so; when or where witness does not recollect. Ft is possible witness may have seen him at Perth Amboy in the latter part of May in that year; he does not recollect to have had any communication with Van Hook about the bond and mortgage, after that above stated as having taken place in his office, for some months afterwards. Dudley Selden, for the complainant. He resides in the city of New-York, and has resided there more than twenty years, and is a lawyer. He says he is acquainted with the New-York property described in Exhibit I.. and has known it since 1836 or 1837, particularly. There were three adjoining lots, of which ¡the premises in said Exhibit is five-sixths, each lot being 25 feet •front by a little.over 1G0 feet deep; they were vacant, and held •under leases from Mr. -Rogers. The agent of the owner of the •leases applied to witness to purchase .them. Witness purchased :his interest in the three lots under said leases, at the rate of $1000 per lot. -The fee simple of the lots at that time were worth from $3000 to $3500 each, free from .all incumbrance. After having .purchased these three lots, witness determined to ■build upon them six houses of twelve and a half feet front, and made an arrangement with the builder, whereby -he, -in connection with Mr. J. Rogers, should build .two of ¡the houses on his own account, substantially corresponding, externally, with the four witness .was to build on his own account; witness advancing some portion of -the money, which was to -be secured by a mortgage on .their respective buildings. Under the arrangements six buildings were put .up, occupying the entire front of the three lots. The cost of the four buildings put up on the two lots retained by him was over $8000. He thinks the contract price was either $2000 apiece, together with certain additions not covered by the .contract, or it was $2200 apiece with certain additions. He took a mortgage from Colburn and from Rogers for advances he made to them in building their houses.; ¡the amount of .the mortgages he does not recollect; they were probably about two-thirds of the cost of the lot and buildings, .perhaps a little more. The titles to Colburn and Rogers’s lots were made to them, either by his surrendering the lease to .them and they taking out new leases, or by his assigning to them the lease for one of the lots which he held. The said Rogers who became interested in the one half of this one lot, .is wholly .unconnected with the Rogers .who is the original lessor of the three lots; the .one who claimed under witness was Rogers .the architect. About á year after witness got the buildings completed, property began .to depreciate in New-York, and gradually declined fo.r about three years. The buildings, he .thinks, were completed in 1837 or 1838; thinks real estate in New-York continued depreciated until the beginning of 1842. He thinks he rented his houses for from $350 to $375, eack j|LQ,Rse.: .thinks he got the first year for some of .these houses $400. Shortly after the buildings were completed, he made an arrangement with a Mr. Bowen, then in Europe, and who at that time had certain funds in the hands of witness, whereby the purchasing the lots, the building, the arrangement made with Colburn and Rogers, the letting of the houses, &c. were all deemed to have been made by the said Bowen. His impression is he originally intended the said property for Bowen, and wrote to him on the subject. Witness foreclosed the Colburn mortgage for non-payment, and became the purchaser under the foreclosure, for the benefit of Bowen. Colburn had become embarrassed, and left the city; this was about a year or eighteen months after the buildings were completed. The Colburn house and the four houses built by witness, are included in Exhibit I. •Before witness transferred the leases under direction of Bowen, witness, at his request, -executed a mortgage upon the premises, collateral to Mr. Bowen’s bond, which witness believes was to Mr. Van Hook: witness thinks it was conditioned for $10,000. Being asked what was the value of the premises in 1840, he says, he should think that in May, 1840, such buildings as were put up on these premises could have been constructed for $1750 apiece: and had the leases for the vacant lots been offered to witness at that time, he would not have been willing to have given more than $500 for the leasehold interest in each •lot of twenty-five feet front. He thinks the entire property would have sold for more in 1842 than in 1840. He received .the rents for several years after the buildings were put up, and up to about the time of the sale under the foreclosure of the mortgage that was given to Van Hook, acting therein as the agent of Bowen. The rents of the buildings fell off considerably, and varied from $225 to $275 or $300 for each of the five houses. There were more houses in New-York during the depression of business than there were tenants who usually occupied such houses, to occupy them ; some of these houses were .occupied by two tenants. The rents, during the depression, were not always collected in full. Perhaps if witness pressed hard, he might have got them. William Packer, for the defendants. I was present at the -time a certain resolution of the board of directors of the company was passed, dismissing Stebbins from their employ, and speaking of the mortgage in ¡this suit, which resolution was .passed in the middle,of October, 1842; which resolution I saw ¿last Monday night, and to .which I will put my name when requested. The resolution is in the hand-writing of John I. Gas-ton, .who was president of the board, and was certified by him. rlbbotson, Gaston and myself, and -I think Van Renselaer, were present at the meeting when the resolution .was passed. Stebbins ;was not present, but had notice. Gross-examined. I am well acquainted .with the -hand-writing,of John I. Ga.ston. The paper marked Exhibit No. 1 on .the part of the complainant, now .shown tome, is in his handwriting. It was agreed by the solicitors of the parties, that .the book ,of minutes of the board of directors, be .used as evidence on the ■hearing of the cause; and that if it be furnished for ¡that purpose, it is to be used for that purpose and no other, and is to be i-returned to the person furnishing it, after being .used for the -purposes of (this cause. Robert Van Renselaer, for the complainant. He was a director of the company in 1841 -.and 1842. Jared N. Stebbins was also a director, and managing agent of the company, at a .salary of $8000 a year. Deponent ivas present at a meeting of the boqrd when the account marked A. on the part of the ¿complainant was presented and passed upon by the board. The signature to said account is that of John I. ¡Gaston, president of ■the board. At a meeting of said board he has no .recollection ¡that an .order was made directing a mortgage to be given to Stebbins, but knows that a mortgage was given, sanctioned by the boards but whether at that meeting or not deponent does not know. He remembers being ’present at a meeting of the directors when a discussion took place as to the -time when the mortgage should become payable; Stebbins wishing it to be at a short date, and the directors at a longer one. The time was fixed upon, hut deponent does not remember what that time was. Cross-examined. At the time said mortgage was proposed to be given, the company was struggling with pecuniary difficulties which seemed to be insurmountable; the works of the company were suspended at that time for the want of funds; the manufacturing company had'just commenced its operations. Deponent is not aware of any settlement having been made between Stebbiñs and the company, excepting so far as refers to the account marked A. Stebbiñs received a large amount of notes and obligations and morieys for account of the company. He knows that Stebbiñs received $4000 from the Water Power Company, to be applied to the use of ther'Manufacturing Corn-pan y, as appears by the settlement of the Water Power Company at Bunkers. The question was "often discussed by the' company as to the mode of raising monéy, and as to whether any money could be raised by a loan on the company. Gaston was of opinion that any amount could be raised. Deponent was of opinion it could noth The company was indebted, at the' lime, to several persons; who were pressing for their debts. When the mortgage was given to Stebbiñs, he gave the assurance that he could raise a sufficient sum to relieve the company from its embarrassments and go on with the works and complete the manufacturing establishment. Deponent consented to the mortgage, to secure the indebtedness of the company to' Stebbiñs; but would not have consented, bad it not been for the assurance of Stebbiñs that the proceeds would have been-applied for the payment of the" debts and prosecution of the works of the company, fie was’ present when the negotiation1’ was going on between the company and Loomis and Lyman,for the property covered by the mortgage; but cannot remember'' the month. Stebbiñs always represented to deponent that the' mortgage was under bis control. Deponent never knew that' Stebbins’s property in the mortgage had been absolutely transferred, until the present summer. Deponent derived that impression from the assurances of Stebbiñs that he had the control-’ of the mortgage. Deponent knows nothing of the resolutions" of the board, or certificates of the president in relation to the mortgage at the time of the transfer to Yan Hook, or of the' machinery by which said resolutions and certificates were obtained, which resulted in the negotiation of the mortgage; deponent not haviDg been present at any of the meetings of the board '' when the resolutions were passed and the certificates given. In chief. A prior mortgage was given to the State Bank at" Elizabeth, to secure to them the indebtedness of the individual directors; and deponent only consented to the Stebbins mart • gage on condition that said mortgage should be given to said bank to claim priority to the Stebbins mortgage. The following is the writing before referred to, marked Exhibit- C. on the part of the complainant:— At a meeting held June 28th, 1842, the following preamble and resolutions wére passed : “ Whereas a certain bond and mortgage' given by the Somerville Manufacturing Company to Jared N. Stebbins, for the sum of $9600, bearing date' the tenth day of January, 1842; has been this day submitted to the inspection of this board, and the same having been considered and examined, it is “ Resolved, That- the said bond and mortgage is a legal and subsisting liability of the said company, and that they have no defence to make to the same, either in law or equity. “ June 28, 1842/ I certify the above resolution to be a true copy from the minutes of said company. J. A. Gaston; secretary. Exhibit A., L. D. Hardenburgh,. master, on the párt of the complainant, is as follows ; Somerville Manvfacturing Company, To J. N. Stebbtns, Dr.- 1840. Feb. 1. To ain’t balance due, per voucher,' $4517 93 1841. 1. ;£ Interest one year, 271 75 Rent from 1st Feb. to 1st May, 1840, 87 50 líalf month rent to 15th June, 43 74 Rent to 1st April from 15th June, 200 00 Í841. Feb. 1. One year’s salary, 3000 00 interest one year, 487 25 $8608 17 1840. By note of Gen.Wall ahd Judge'Nevius, $1000 3'notes, $500, $278, $222,- 1000 Interest one year; 120 2120 00 $6488 17 Dr:. To one year’s salary,-3000 00 17 1841. Jan. 1. Rent, 150 00 $9638 17 Tlie board of directors having examined the above account, do pass the same, and acknowledge a balance dne J. N. Stebbins of #9628 17. Signed by order of the board, J. I. Gaston, president. A paper marked B., L. D. Hardenbergh, master, on the part of the complainant, is exhibited as a copy of a mortgage mentioned in the testimony of Abner Jones, as given by Henry L. Stebbins to John B. Morgan, dated August 23d, 1842, for §8000, on the leasehold property in New-York. Exhibit I., G. A. froom, master, on the part of complainant, is as follows:— I do hereby certify, that a bond and mortgage for §9600, was given and executed by me to Jared N. Stebbins, as president of the Somerville Manufacturing Company, by order of the board of directors, as said amount was due said Stebbins, as agent of the company, and X know of nothing that could be. brought against said claim in abatement or in any way destroy its validity. Jno. I. Gaston, president. June 28th, 1842. Exhibit A. on the part of the defendants, is a letter from J. N. Stebbins to J. I. Gaston, dated January 17th, 1842, as follows :—■ Dear Sir:' I returned from Mew-York Saturday evening, expecting to have gone back in the nine o’clock train this morning ; but an attack of a violent pain in my head, with sickness at the stomach, has prevented. Should I be able, I intend to go in the morning. I fear X shall not be able to negotiate my mortgage until after the next meeting of the Water Company board, which will probably be on the 1st of February. 1 have found a person who has §10,000 to loan, at seven per cent., and will let me have it on the mortgage, provided the property on which it is a lien is worth §20,000; bpt he objects until I get some certainty for water without any question; he does not like any chance for a law-suit. Xt must be a first mortgage. This can be. got along with, either by paying up the §1500, &¶ keeping it back, as we shall hereafter agree upon. Now it is not possible for' me to get along without money, and I am trying to negotiate some of my stock to raise the wind.' f have sent-' up to youF son’ one of my certificates of fifty-six shares, and he has sent me the three scripts here inclosed, for yaúr signature; this makes thirty-eight shares, including the fifteen I had before, and there is now eighteen more due me upon the fifty-six, when I- come to settle. I would thank you to add yohr signature to-the three scripts, and send them to me. I should like to see' you "before I; gó - to New-York, if you are coming down town. Respectfully''and truly yours, Monday, January 17, 1842. J. -N. Stebbins. P. S. I cannot pay the' five dollars till I retürn. I heard of your being in town, and-sfeht'for youthis morning, but could not find you. Exhibit B.- on; the part'of the defendants, • is a letter from J. N. Stebbiñs tó John I. Gaston, dated New-York, March 29th, 1842, as follow’s:— Dear Sir: I find obstacles in the way of negotiation. I want a certificate from you as-president, that5 the bond and mortgage is a valid one, given me' forthe amount'due me: The best -way is, to copy the resolution on the books,' provided there is nothing else in said resolution. 1'also want a cértificate from the clerk that the title is good and free from iücumbfdnce. Now you know perfectly what I need; - will you get it for me and forward it to the care of - O. Wykoff, • Merchants’ Hotel. 'I want the wall put up and the shingles put on the foundry, and I have written Mr. Packer to do it now. 1 wish you would try to aid him in getting if done,' and I will; pay for the shingles,. &c: just as soon ■ as I get. the money upon the mortgage, which I can do- as soon as-4 ean -satisfy that all is right, and the" property worth double the money; and I think they will send some person-over to look, and I-want fit all right when they get there.- Yora% truly. J'¡ N; Stebbins. New-York, March' 29, 1845v Exhibit C. on'the part of the defendants, is an article of agreement between J. N. Stebbins, Robert Yan Renselaer, "WiD liam Packer and Jolm I. Gaston, managers and directors of the company, and Luther Loomis and Samuel P. Lyman, witnessing, that the parties of the first part, in consideration of $3000, the receipt whereof is acknowledged in behalf of the said company, have sold, assigned, transferred and delivered, and do thereby sell, &c., all and singular the letters patent, &c., more particularly described in a deed to the Somerville Manufacturing Company, a copy whereof is hereunto annexed: And do, for the like consideration, sell, assign, transfer and deliver to the said parties of the second part, all the right, title and interest of the said company, and of the parties of the first part, of the property and effects of the said company, described in said deed, consisting of machinery for the manufacturo of screws, stock of materials, tools, chattels and effects, of whatever name or nature, belonging to the said company, free and clear from all incumbrance. This article is -signed and sealed by Yan Ilenselaer, Stebbins, Packer and J. I. Gaston. Exhibit E. on the part of the defendants, is a memorandum of an agreement, dated October 3d, 1842, signed by Loomis and Lyman, Van Renselaer, J. N. Stebbins, Wall and Nevius, reciting that the affairs of the company had long been so embarrassed that the property of the company could not be made productive, and must be .sold to meet the liabilities of the company, and that the parties to the memorandum are holders of a large amount of the stock of the .company, and had already expended large sums to make the property productive, and that it had become necessary that further sums be expended to save what had been laid out from total loss, and that it was the intention of the parties to the memorandum, to afford an opportunity to other parties who claim to have an equitable interest in the property, to make advances, pro rata, which shall be equal to the expenditures made by the parties named in the memorandum, and share with them in the benefits or disadvantages to accrue from what has been undertaken by the sai'd parties; and providing, 1st, That at any sale of the property and effects of the company which may take place under any execution or decree, or at private sale by the managers of the company, the property shall be bought by Loomis and Lyman, for the parties who shall subscribe the memorandum, at the lowest price at which it is possible to purchase the same; provided the price of the whole shall not exceed the sum which Loomis and Lyman may be willing to pay for the same; which property, when purchased, shall he held by them for the benefit of the said Loomis and Lyman, G. D. Wall, J. S. Nevius, Henry Ibbotson, Jared N. Stebbins and Robert Van Renselaer, in case they become parties to the memorandum, in the following proportions: Loomis and Lyman shall have six-twelfths, and Wall, Nevius, Ibbotson, Stebbins and Van Renselaer six-twelfths ; and each one shall pay, fro rata, for the purchase of the said property, according to his interest in the same, to be thereafter declared. 2d, Immediately after the .execution of the memorandum, an accurate inventory and valuation of all the effects of the company shall be made. 3d, As soon as the property and effects of the company can be obtained, and title thereto perfected, for the benefit of the parties named therein, a lease for all the water power required for the use of the said purchasers, is to be obtained from the Somerville Water Power Company, upon the usual terms, at the rate of four dollars per annum for each square inch. 4th, The title to the said property under the sale herein contemplated, shall be acquired as soon as the same can be done, consistent with the interests of the said parties, and without doing violence to the rights of others. 5th, Simultaneously with the steps herein agreed to b.e taken, it is understood that steps shall be taken to clean up and put in order all the machinery and effects of the company, and to prepare the same for use as soon as the circumstances will permit. 6.tb, It is the understanding of the parties, that as soon as the said purchases are made and the value of the same ascertained, articles of agreement more full and defining the rights ¡of the parties more particularly, are to’be made and entered into between the parties; but until then this memorandum is to be binding. (Signed) Loomis & Lyman, J. N. Stebbins, Robt. Van Renselaer, Garret D. Wall, James S. Nevius, by S. P. Lyman for him. Exhibit K. on the part of the defendants, is a deed, dated October 18th, 1842, from the company to Luther Loomis and Samuel P. Lyman, therein stated to have been made by virtue of a resolution of the board, conveying, for $3000, therein acknowledged to have been received, the real estate of the company, (being the same property described in the mortgage assigned to the complainant,) “subject to two certain liens by judgments and executions against the company, to wit: one in favor of Joshua Doughty, and one in favor of the president, directors and company of the State Bank at Elizabeth.” This deed contains covenants by the company, that the properly is not incumbered by any incumbrance whatever, except as before mentioned, and that the company will warrant and defend the premises to the said Loomis and Lyman, freed and discharged from all incumbrances. This deed is signed by the president and sealed; and is acknowledged by him, before George B. Brown, master in chancery, to have been signed, sealed and delivered by him, in the name of, and as the voluntary act and .deed of the company. By an exemplification of tlic proceedings in the court of chancery of New-York, exhibited on the part of the complainant, it appears, that the bond and mortgage from Bowen to Yan Hook, on the property in New-York, spoken of by the witness Selden, were dated May 20th, 1840, and conditioned for the payment, of $1.0,000, in one year, with interest at seven per cent,. This mortgage recited, that George P. Rogers had, by a .lease dated October 14th, 1837, demised to Dudley Selden, all that lot of land, &c., to hold from May 1st, 1837, for the term of seventeen years, at the yearly rent of $31 50; that Selden, with the consent of George P. Rogers, had assigned the lease to Colburn; that to secure part of the consideration of the assignment, Colburn had executed a mortgage to Selden; that afterwards, on the 27th of November, 1839, the interest of Col-burn in the lease had been sold by a master in chancery, to the said Bowen, by deed dated April 6th, 1840; that Bowen mortgaged to Yan Hook the said unexpired term, and the lease and ail the advantages of renewals and buildings and improvements. The said recited mortgage was only of Colburn’s interest in one of the lots. There was -another mortgage of the leasehold interest in two of the.lots,,reciting a lease dated April 26th, 1833, for twenty-one years, yielding for each of the lots the yearly .sum of $63. Dudley-Salden mortgaged the leasehold interest ,in said two lotspo Van Hook. The .property is in Thirteenth Street, Fifteenth Avenue. The bond .and the said two mort•gages were to secure $10,000. The bill .filed in that case states, ¡that Jacob Acker has or claims some interest in or lien upon the .said premises prior fo the said .mortgage of Van Hook, the complainant in .that .cause, and prays, among other things, that after satisfying the.priorliens.on said .premises, if any, the complainant .may be paid out of the residue of -the proceeds. The answer in that case sets up usury, and .states, .among .other things, an assignment by Bowen in trust .for the benefit ,of his creditors, dated June 1st, 1841. On the 14th of December, 1841, an order for proofs was ■.made in that case. The testimony was closed February 21st, ,1842. On the 8th of April, 1842, that cause was brought to hearing on the pleadings and proofs; and it was referred to a •master to compute the amount due Van Hook, the.complainant ;In that cause. A final decree was made on the 9th May, 1842. .On the 8th of September, 1842, the master’s report of sale was confirmed, unless cause to the contrary should be .shown in eight days. A paper writing, purporting to he a copy .of a mortgage giv>en by Henry L. Stebbins to John B. Morgan, dated August ■23d, 1842, was exhibited, and marked Exhibit B. ,o,n the part -of the complainant. Copies of three several deeds from the complainant to Henry L. Stebbins, for the New-York property, were exhibited, and marked Exhibits F., G. and H., on the part of the complainant. A copy of a deed from William Mitchell, master in chancery •of New-York, to the complainant, was exhibited, and marked Exhibit I. The cause came on to be heard on the pleadings and proofs, the term of June, A. D. 1845.