Albany City Bank v. Steevens.

the coming in of the Master's report of sale and also of the amount due on such reference, the complainants moved for a confirmation of the report, and at the same time presented their petition, a copy of which had been served on the solicitors of the mortgagor, stating that the whole amount of the principal sum secured by the bond and mortgage had become due, and that there was then due, as appeared by the report of the Master, the sum of $26,670.50 as principal and interest since the decree, and asked for a future or supplemental order to sell so much of the mortgaged premises remaining unsold, as should be necessary to pay the amount then due.

Barstow & Lockwood, in support of the motion.

A. D. Fraser, contra

THE CHANCELLOR. The Revised Statutes (page 378, § 117) provide, where there is a default subsequent to the decree in the payment of any portion or installment of the principal, or of the interest due upon the mortgage, the Court may, on the petition of the complainant, by a further order founded upon the first decree, direct a sale of so much of the mortgaged premises to be made, under the decree, as will be sufficient to satisfy the amount so due, with the costs of such petition and the subsequent proceedings thereon; and that the same proceedings may be had as often as a default should happen. The petition under this statute should set forth briefly all the facts necessary to enable the mortgagor, as well as the Court,

to *understand its object. It should state when the bill [*8] was filed the date of the decree, and the amount that had become due upon the mortgage since that time; and that the whole or some part thereof remained unpaid.

A copy of the petition, with a notice of the time it will be presented to the Court, should be served on the mortgagor, in order to afford him an opportunity to show cause why the prayer of the petition should not be granted; and if no cause is shown, the petitioner will be entitled to an order of reference to a Master to compute the amount due, and on the coming in of

Michigan State Bank v. Hastings.

the Master's report, to such further order as the case may require. Where service cannot be made on the mortgagor, by reason of his absence from the State, it may be made on his solicitor. A copy of the petition need not be served on subsequent incumbrancers who are made parties to the suit. Decrees in this class of cases are analogous to judgments at law for the penalty of a bond, where the plaintiff is required to proceed by scire facias to have damages assessed on a breach occurring after the rendition of the judgment. The reference to the Master in this case to compute the amount which had become due since the decree, was irregular, as it was made without a special order of the Court for that purpose, and the petition should have been served on the mortgagor instead of the solic itor.

So much of the Master's report as relates to the reference made on the 6th instant, cannot be confirmed, and the prayer of the petitioners must be denied. But that part of the report · which relates to the sale of a part of the mortgaged premises, may be confirmed.

1w 9 1d 534 62 412

[*9] *THE PRESIDENT, DIRECTORS AND COMPANY OF THE MICHIGAN STATE BANK v. EUROTAS P. HASTINGS.1

On a motion for an injunction, the statements in the bill must be taken as
true; and the relief sought must be consistent with the case made by the
bill.

The possession of State property by the authorized agents and officers of the
State, is the possession of the State.

A State may sue, but it cannot be sued in its own courts; and, where the
nominal defendant was the late Auditor-General of the State, and the com-
plainants' bill sought to reach property conveyed to, and held by him, in
his official capacity, it was held, that the State was the real party defend-
ant, and that the Court had no jurisdiction of the case.'

1S. C., 1 Doug., 225. See, also, id., 527.

The rule that a State cannot be sued in its own courts is applicable only

Michigan State Bank v. Hastings.

THIS was an application for an injunction. The bill stated that, in 1839, and previous thereto, the complainants were indebted to the State of Michigan, in the sum of $500,000, or thereabouts; and that, in February of that year, the bank became embarrassed, and stopped payment. That in February, 1840, the legislature passed an act authorizing the Auditor General, State Treasurer, and Secretary of State, to settle with the bank, and appointing them commissioners for that purpose. That the bank refused to settle until the forfeiture of their charter should be remitted; and that, on the twenty-eighth day of March, 1841, an act was passed by the legislature, declaring that if the bank should settle with the commissioners under the law before mentioned, and should resume specie payments on or before the first day of April, 1841, then nothing done or suffered by the bank previous to that act, should in any way affect their chartered privileges. That, on the first day of May, 1841, the bank settled with the commissioners, agreeably to the provisions of the act of February of that year, and assigned, transferred, delivered, *and set [*10] over to them, in payment of the debt due to the State, bills, notes, accounts, lands, and other property, amounting to $633,567.98. That an instrument by which the assignment was made, and which set forth the terms or conditions of the settlement, was executed by the commissioners on the part of the State, and by the president of the bank on behalf of the corporation, whereby the commissioners acquitted and discharged the complainants from all claims, dues and demands, which the State had against the bank; and the assignment of the property and effects contained in the schedule annexed to said. instrument, was stated to be made upon the express condition, that the State should indemnify and save harmless the complainants and their grantors, immediate and remote, from and against the several liabilities stated in said agreement. That,

where the State is made a party defendant, and does not apply where the object of the suit is to reach property held by State officers, in which the State has ceased to have any legal interest. S. C., 1 Doug., 225; Michigan State Bank v. Hammond, id., 527.

Michigan State Bank v. Hastings

among those liabilities was a certain bend and mortgage on their banking-house and lot, executed by the complainants to the Bank of Michigan, (which banking-house and lot were, at the same time, conveyed to the Auditor General, subject to said mortgage,) on which there was then remaining unpaid the principal sum of $11,250.

The bill then charged, that the State had realized a large amount of money from the property so transferred; that this money had gone into the State treasury; that the State had not, by any legislative action, repudiated the settlement, and that it had taken no measures to indemnify and save harmless the complainants from said bond and mortgage, and other liabilities mentioned in the indenture. That, on the seventeenth day of February, 1842, the legislature passed an act constituting the Auditor General, State Treasurer and Secretary of State, trustees, on behalf of the State to take charge of the assets and

property assigned to the State, and sanctioning the agree[*11] ment entered into between the bank and the commis

sioners, except so much thereof as purported to bind the State to indemnify the complainants, or to pay or advance money to discharge incumbrances, or for any other purpose; and these parts of said agreement were expressly rejected. That the act also authorized the trustees to sell or lease said property, and to collect, compromise or extend the time of payment of the debts assigned, in the best manner possible for the interest of the State; and to pay all moneys collected into the State treasury, for the redemption of State scrip. That the State had not paid the bond and mortgage given to the Bank of Michigan, but had permitted the same to be foreclosed, and the mortgaged property to be sold at a great sacrifice for much below its real value; and that it had refused to pay off and satisfy the balance still due on said bond, amounting to $7,000, for which the complainants had been threatened with a suit.

The bill charged, also, that the State was insolvent and unable to pay its debts; that much of the property had been permitted to become worthless through inattention; that the settlement could not be set aside or repudiated by complain

Michigan State Bank v. Hastings.

ants, because it was beyond the power of the State to place the complainants in the situation they were in when the set. tlement was made; and that a large amount of the property so assigned by the complainants, still remained in the hands of the defendant, who was one of the commissioners.

The bill prayed for an injunction against the defendant, to inhibit the delivery of the property in his possession to the trustees of the State; and that the defendant might be declared a trustee for the complainants; and that he might be directed to sell and dispose of the property, and pay off the said bond and mortgage, and other liabilities of the complain

ants.

*Joy & Porter, in support of the motion.

Pratt, Morey and Attorney-General, contra.

[*12]

THE CHANCELLOR. The complainants' bill, for the purpose of the present motion, must be taken to be true; and the relief to which they are entitled, if any, must be consistent with the case made by the bill. Wilkins v. Wilkins, 1 J. C. R., 111. The complainants claim relief on the ground that the settlement made between the bank and State, on the first of May, 1840, is binding on the State; and that the State has not complied with the conditions on which the settlement was made, by paying off the bond and mortgage on the banking house and lot, and the other liabilities of the complainants against which it was to indemnify them by the terms of the settlement. And they allege that the mortgage had been foreclosed, and the property sold at a great sacrifice; and that there is still a balance unpaid of $7,000, for which they have been threatened with a prosecution; that the State has received large sums of money, from the property assigned to it by the complainants, and that such money has gone into the treasury of the State, and been used for other purposes than to pay off the liabilities of the complainants; and that the State is insolvent, and unable to pay its debts.

This is the substance of the complainants' bill; and they ask