author: Swaxze, J.

text:
    Taylor Iron and Steel Company, complainant-respondent, v. Wesley G. Nichols et al., defendants-appellants.
    [Argued December 9th, 1907.
    Decided March 13th, 1908.]
    1. A contract in restraint of trade will not be enforced unless the restraint is no more extensive than is reasonably required to protect the interests of the party in favor of whom it is given, and not so large as to interfere with the interests of the public.
    2. A contract for personal services which forbids the employe to divulge any information known to him or acquired by him during his employment relating to the process of manufacture, and to hold inviolate the treatment, processes and secrets known to or used by him in the works of the employer, which is unlimited as to time and place, will not be enforced.
    3. Where the bill avers and the answer denies that the complainant has secret processes, and the secrecy of the process is an issue in the cause, it is erroneous to exclude evidence as to the details of the alleged secret processes.
    4. In order to protect the complainant from an unnecessary disclosure of a secret process, the evidence may be taken in camera and sealed.
    5. An agreement by an employe to serve for five years and during that time to devote his entire time, skill, labor and attention to the service of the employer, though valid, is not enforceable under the circumstances of this case, even if the court of chancery will ever enforce by injunction a contract for ordinary personal services.
    On appeal from a-decree of the court of chancery, advised by Vice-Chancellor Bergen, whose opinion is reported in 70 N. J. Eq. (4 Robb.) 541-

      Mr. John R. Hardin, for the respondents (Mr. Richard V. Lindabury, on the brief).

      Mr. Gilbert Collins, for the appellants (Mr. Charles L. Corbin, on the brief).
   The opinion of the court was delivered by

Swaxze, J.

The bill seeks to enjoin Nichols from divulging to anyone other than the complainant any information known to him at the time of the agreement hereafter to be mentioned, or acquired by him during the term of the agreement relating to the making of steel, that may have been used in the complainant’s works, and from divulging treatments, processes and secrets known to or used by him in the complainant’s works, and from devoting during the term of said agreement any part of his time, skill, labor and attention to the service of anyone except the complainant. It also seeks to enjoin the other defendant from employing Nichols or using any information acquired from him relating to the process of steel making that may have been used in the complainant’s works.

The complainant has been engaged since 1891 in making steel under what is known as the l-Iadfield process and patents. Had-field, in 1891, had licensed Howe and others to use his processes, and they had agreed to keep the same secret until January 1st, 1902. Subsequently the complainant succeeded to the rights of the licensees. In 1892 liadfield granted another license to the complainant covering projectiles, and they agreed to keep the process secret until December 31st, .1903. Afterwards, in 1901, the agreement for secrecy was extended to July 1st, 1908. Meantime on March 16th, 1896, the complainant had employed the defendant, and he had agreed in writing that he would not, before January 1st, 1902, make known to any person any information which lie should receive at the complainant’s works. Nichols continued in plaintiff’s employ from 1896 to July, 1905. On March 15th, 1905, he entered into a new agreement, in writing, for the term of five years from March 1st, 1905. It is this agreement which the complainant’s bill seeks to enforce. The important paragraph reads as follows:

“(2.) The said Wesley 6. Nichols agrees that he will devote his entire time, skill, labor and attention during the term of this agreement to the service of the Taylor Iron and Steel Company, and that he will at all times faithfully perform the duties that may be assigned to him by the management of the said Taylor Iron and Steel Company to the best of his skill and ability for the compensation aforesaid, and that he will not at any time, directly or indirectly, during the term of this agreement or afterwards, divulge to any person, firm or corporation, except to the Taylor Iron and Steel Company and its officers, any information of any nature now known to him, or hereafter acquired by him during the term of this agreement, relating to or regarding any process of steel making or moulding or treating steel that may have been, is now, or may be hereafter during the term of this agreement, used in the works of the Taylor Iron and Steel Company, and that he will at all times hold inviolate the treatments, processes and secrets known to or used by him in the works of the said Taylor Iron and Steel Company.”

The validity of this agreement is assailed by the defendant on several grounds. We think it is necessary to consider only the objection that it is invalid because it constitutes an excessive restraint of trade.

The rule of this state is that a contract in restraint of trade will not be enforced unless the restraint is no more extensive than is reasonably required to protect the interests of the party in favor of whom it is given, and not so large as to interfere with the interests of the public.

Mandeville v. Harman, 42 N. J. Eq. (15 Stew.) 185 Sternberg v. O’Brien, 48 N. J. Eq. (3 Dick) 370, both of which were cited with approval by this court in Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. (13 Dick.) 507. Where the contract relates to personal services of a special, unique or extraordinary character which can be performed by no one else and there is a negative covenant, the court sometimes enforces the negative covenant by injunction, as in Lumley v. Wagner, 1 DeG. M. & G. 604. But the jurisdiction of equity rests upon the inadequacy of the legal remedy (Pom. Eq. Jur. § 1344), and the courts of other jurisdictions, as well as our own courts in the cases cited, have shown a reluctance to extend the jurisdiction. Whitwood Chemical Co. v. Hardman, 2 Ch. 416 (1891); 60 L. J. Ch. 428; Rice v. D’Arville, 162 Mass. 559. The present case does not even show that Nichols’ services were of so special, unique or extraordinary character that an injunction should issue.

The contract not only forbids Nichols to disclose any secret ■of the complainant, but also any knowledge he might have relating to the process of making steel that may have been used in the complainant’s works, whether matter of common knowledge or not, whether known to him before he entered their employment or not; and it also requires him to hold inviolate, not only the secrets of the complainant, but his own secrets, if he had any, and treatments or processes, whether secret or not. The necessary result of the enforcement of the contract would be that Nichols must either work for the complainant or remain idle; and since the restraint is unlimited in point of time or place, he might, at the option of the complainant after the ■expiration of five years, he without employment for the rest of his life at the only trade he knows. Such a restraint savors ■of servitude, unrelieved by an obligation of support on the part of the master. The courts have refused to enforce similar ■contracts. Alger v. Thacher, 19 Pick. 51; Albright v. Teas, 37 N. J. Eq. (10 Stew.) 171.

The learned vice-chancellor perceived the difficulty we have mentioned, but held that the agreement was limited to processes in use by the complainant which were not known to Nichols until they were disclosed to him by- the complainant. If we were able to adopt this restricted meaning, we should still think the covenant an unreasonable restraint. Some of the secret processes were those known as the Hadfield processes, which had been communicated to the defendant under the contract of 1896. That contract bound him to secrecy only until January 1st, 1902, the same time fixed by Hadfield’s original license to Howe. By necessary inference, after that time he was no longer bound. "Expressio unius exclusio alterius.” On the vice-chancellor’s construction of the agreement of 1905, he bound himself forever not to disclose secrets learned under the contract of 1896. There is nothing to show that circumstances had so changed as to require a perpetual restraint in 1905, when a restraint for six years only had been adequate in 1896, or that reasonable protection of the complainant required a perpetual restraint of the defendant from disclosing what by agreement he had been entitled to disclose for the three years preceding. The complainant itself is restrained only until July 1st, 1908. In our judgment the complainants’ case fails, as far as it rests upon the written contract.

The complainants’ right does not rest on the contract alone. We-have held that a contract for secrecy may be implied from a confidential relation between employe and employer, and the divulging of a secret be enjoined. Stone v. Graselli Chemical Co., 65 N. J. Eq. (20 Dick.) 756. The circumstances of this case require such a contract to be implied as to all secrets not covered by the special contract of 1896. As to those secrets, that written contract controls. Our difficulty in this respect arises out of the manner in which the case was tried. The bill avers, and the answer denies, that the complainant has secret processes. This was' the very issue to be determined. The vice-chancellor, however, refused to admit evidence as to the details of the alleged secret processes, or cross-examination with reference thereto. The decree awards an injunction restraining Nichols from divulging the secret methods and processes used by the complainant in making manganese steel, taught to or acquired by him while in their employment.

The difficulty which arises in this class of cases is that of affording adequate protection to a secret, if any disclosure of it is required. The court, in a proper case where the details of the secret are known to all the parties and no doubt arises as to its secret character) may well refuse to compel a disclosure. Such a case was Eastman v. Reichenbach, 20 N. Y . Supp. 110. But in the ordinary case, a disclosure to the court is necessary, and that for two reasons — first, that the court may determine the issue of fact, and second, that the terms of the injunction may be so specific that the question of a violation may be determined. In the present case, the evidence is convincing that the complainant made a product of peculiar excellence, which had obtained high repute in the market, and quite persuasive that it has special methods of manufacture; but it is impossible to tell, from the evidence, whether the results achieved were due to skill in manipulation acquired by experience, or to some secret process, or whether, if there was a secret process, it was more than the Iiadfield process which the defendant Nichols had agreed not to disclose before January, 1902, or different from the process described in the Brinton patent which was taken out after the bill was -filed and before the decree. Mr. Brinton himself testified that the process was essentially the Hadfield process with such modifications as the complainant had made. A careful reading of the testimony has not enabled us to determine exactly what the complainant claims as a secret process.

The terms of the injunction are very broad. It restrains the defendant from divulging secret methods and processes, as if there was more than one, as, indeed, there may be, and it contains nothing by which it can be hereafter determined what are the methods and what are the processes, or whether the two are to be distinguished. The difficulty was thus' expressed by Lord Eldon in an early case: “The only way by which a specific performance could be effected would be by perpetual injunction, but this would be of no avail, unless a disclosure were made io enable the court to ascertain whether it was or was not infringed; for, if a party comes here to complain of a breach of injunction, it is incumbent on him first to show that the injunction has-been violated.” Newbery v. James, 2 Meriv. 446, 451.

The difficult]' felt by the vice-chancellor is not removed by the procedure he adopted. It is merely postponed to the time when it may become necessary to take proceedings in contempt for violation of the injunction. We think orderly procedure requires that before the defendant is enjoined, he should be definitely informed what it is he is forbidden to do. In no other way could the judge in the court of first instance, or this court on appeal, determine hereafter whether there had been a violation of the injunction, in case of proceedings for contempt. For the protection of the complainant, the usual course is to take the evidence as to the secret in camera, as was done in Stone v. Grasselli Chemical Co. Everyone may be excluded, except the parties, both of whom must already know the secret, and their counsel, who must have been apprised thereof. When, as in this case, a third person, to whom the secret has not yet been disclosed, is a party, he may well be excluded without injustice. It is not necessary to embody the description of the secret in the injunction itself. The testimony .taken in camera may be sealed and used only when it becomes necessary to determine whether there has been a violation. It is true that the procedure involves a risk to the complainant of his secret becoming public; but that difficulty is inherent in the subject. It is a difficulty to which the complainant must submit if he seeks to retain the benefit of his secret for an indefinite time, and is not content with the more effective protection for a shorter period which is offered by our copyright and patent laws.

We have examined the cases cited to the contrary by the complainant, but, with the exception of the Reichenbach Case, they fail to sustain the contention, and in that case the opinion shows that the existence of the secret process was not squarely put in issue.

The decree must be reversed to the extent that it enjoins Nichols from divulging or disclosing, directly or indirectly, to any person, firm or corporation, the secret methods and processes used by the complainant, and enjoins the American Brake Shoe and Foundry Company from disclosing or making use of any information relating to the secret methods and processes communicated to it by Nichols,

This determination does not dispose of the case. By the contract Nichols also agreed that he would devote his entire time, skill, labor and attention during the term of his agreement to the service of the Taylor Iron and Steel Company and to faithfully perform the duties that might be assigned to him. This portion of the agreement is severable from the agreement not to divulge secrets, and is in itself valid. We see no objection to an agreement to serve an employer to the exclusion of all others for a term of five years. A similar agreement has been sustained in the English courts. William Robinson & Co., Limited, v. Heuer, 2 Ch. 451 (1898). Assuming that if this portion of the agreement stood alone, we could, upon proper pleadings, sustain that portion of the decree which restrains the American Brake Shoe and Foundry Company from employing Nichols during the term of the agreement, such an injunction would necessarily rest upon the fact that both the obligation and opportunity of service under the agreement were still subsisting. The agreement itself, however, provides that it shall be terminated “by the failure of the said Wesley to faithfully observe and keep the terms and conditions by him to be kept and performed.” The complainant, indeed, charges that Nichols’ resignation was not accepted, but its whole ease rests upon the theory that he had failed to faithfully observe and keep the terms of the agreement. The further provision that no termination of the agreement shall deprive the complainant of any remedy it might have had during the continuation of the agreement, or at any other time, for violation of its terms, is not sufficient to entitle the complainant to this injunction; for such a decree is in effect a decree for specific performance, and the complainant can hardly claim specific performance of a contract by virtue of a clause giving a remedy for breach of its terms, even if we assume that the court of chancery will ever enforce, by injunction, a contract for ordinary personal services. As is said in the brief for the defendant,

“the complainant lias the choice to claim damages for breach or to claim performance under the terms of the contract, in which case he must offer to perform on his part. The complainant in the bill does not offer to continue to employ Nichols, and the decree does not impose on the complainant any terms that such employment shall be offered."

The decree must therefore be reversed, but as this results as to the important question involved, because of the rejection of evidence, the reversal should be without'prejudice to further proceedings in the court of chancery (Charlton v. Columbia Real Estate Co., 67 N. J. Eq. (1 Robb.) 629), or to the filing of a new bill, if the complainant prefers that course.

For affirmance — None.

For reversal — Tiie Chibe-Justice, Garrison, S'wayze, Heed, Trenci-iard, Bogert, Vroom, Green, Gray, D'iel — 10.


source: Caselaw Access Project

author: Swats®, J.

license: Public Domain

text:
    William Nelson Goodnow, appellant, v. American Writing Paper Company, respondent.
    [Argued January 8th, 1908.
    Decided June 15th, 1908.]
    Under section 30 of the-act concerning corporations as amended in 1904 (P. L. 1904 V• 275), a dividend may be declared where the company has profits over and above the actual assets with which it began business, although the total assets may not exceed the debts and the nominal share capital., .
    On appeal-from a decree of the court of chancery advised by Vice-Chancel lor Bergen, whose opinion, is reported in 72 N. J. Eq. {2 Buck.) 646.

      Mr. William II. Corbin, for the appellant.

      Mr. Richard V. Lindabury, for’ the respondent.
   The opinion of the court was delivered by

Swats®, J.

The appellant filed his bill to have a resolution for the payment of a dividend upon the preferred stock of the defendant declared unlawful, null and void, and to restrain payment thereof. The bill charges that the capital stock of the company was for the most part issued for property purchased, which included trade-marks and good will taken at a grossly excessive valuation, .jmd that whatever the value of the property given in exchange for the stock may have been at the time of purchase, it now falls short of the aggregate of the debts and the par value of the stock; that the operations of the company have been successful, ' and to some extent profitable, a considerable sum of money having been earned in excess of the interest upon the mortgage, and of the $100,000 required annually to be set aside as a sinking fund for the mortgage bonds, and of the cost of operating the company and keeping up its manufacturing plant; that the net annual gains as reported by the directors to. the stockholders prior' to 1906 were used in part to purchase the company’s own bonds for its treasury and for the sinking fund, and in part were set aside for working capital; and that on. July 1st, 1906, the balance sheet of the company showed accumulated profits to an amount several times, the amount required to pay the proposed dividend; that the dividend was authorized by resolution of October 2d, 1906 (1905 in the printed case seems to be a clerical error), which, directed the treasurer, to pay the dividend out of net profits on April 1st, 1907. The. gravamen of the bill is that the payment of this dividend would constitute a division and withdrawal and payment to. the .holders of preferred shares of a part of the capital stock of the company, and would constitute an unlawful reduction of. the capital sto.ck in violation, of the Corporation act. - ,. , •

To this bill the defendant demurred, and the court.,of chancery allowed the demurrer. ... • .. . , ... ,

We think it unnecessary to discuss the. question.dealt with by the learned-vice-chancellor, as to the right of the stockholders to. raise this question, or the question so thoroughly discussed at the bar as to the meaning of net profits under our Corporation act as it stood prior to the enactment of chapter 143 of the laws of 1904. The question seems to us to involve only the construction of that act, and to turn upon the change introduced thereby. Cases cited from other jurisdictions are therefore of little assistance.

The material language in the act of 1896 (P. L. 1896 p. 286) is as follows:

“No corporation shall make dividends, except from the surplus or net profits arising from its business, nor divide, withdraw, or in any way pay to the stockholders, or any of them, any part of its capital stock, or reduce its capital stock, except according to this act.”

In the act of 1.904 this section is changed so as to read as follows:

“The directors of a corporation shall not make dividends except from its surplus, or.from the net profits arising from the business of such corporation, nor shall it divide, withdraw; or in any way pay to the stockholders, or any of them, any part of the capital stock of such corporation, or reduce its.capital stock except as authorized by law.”

Under the act of 1896 there was room to contend that the words “net profits” were intended to be synonymous with the word “surplus;” the language used was “from the surplus or net profits.” Under the act of 1904, this contention is no longer possible; the language used is “from its surplus, or from the net profits.” The evident intent of the change is to point out two funds, from which dividends may be made. '

Although the change m language indicates that the legislature made a distinction between surplus and net profits, it does not necessarily follow that net profits mean the difference between gross earnings and what may be called operating expenses. Such profits may be called annual profits, and it may be that by net profits the legislature meant the net profits upon the whole of the company’s business from its organization. If either of these meanings is adopted, the declaration of the present dividend is justified. There was an excess of gross earnings over the operating expenses of the current year, andjhe value of the present assets exceeded the value of the actual assets with which the company began business. The complainant contends, however, that the term “net profits” is used in neither of these senses, but in the sense of jn excess of the value of the present assets over the p ar. valu e of - -the - cap ital stock issued and outstanding; and the claim is that since that stock was issued for property at a gross overvaluation, there can be no dividend until the difference between the actual value of the property and the value at which it was taken over is made up. The argument is that the intent of section 30 is to prevent the capital stock being distributed in the form of dividends, and the words “capital stock” are supposed to be used in that section as _ synonymous^ with “share capital.”

The ambiguity in the term “capital stock” was noticed by this court in Wetherbee v. Baker, 35 N. J. Eq. (8 Stew.) 501. It may mean either the capital subscribed (the share capital) or the capital paid in, the actual assets with which the company does business. It seems to be used in both senses in this very section. When the legislature forbids the dividing, withdrawing or paying to the stockholders any part of the capital stock it means the capital actually invested; when it forbids the reduction of capital stock it means the share capital subscribed, or the authorized capital.

We are led to the conclusion that the words “capital stock” in the first instance mean capital actually invested, by the fact that it is only actual assets that can be divided, withdrawn, or paid over. These words are not apt words to apply to nominal or share capital, which may be reduced, but can hardly be withdrawn, divided, or paid over. This capital actually invested does not include net profits arising from the business of the company, for the reasons- that the language of the section itself makes a distinction between the declaration of dividends and of profits and the withdrawing of capital; that another method of securing payment of the par value of the stock is provided in other sections of the act; that the policy to be served by the prohibition of section 30 is to prevent the frittering away of the actual assets with which the company is to do business, not the nominal assets which it has never received and for which it still has a claim against the subscribers for unpaid stock. The section distinguishes between surplus and net profits; but if the complainant is correct in his contention that net profits mean only the excess above the share capital, we see no distinction in fact, but only in bookkeeping entries.

It may not infrequently- happen that stock is issued on which avowedly only a partial payment is made of the amount subscribed, which is therefore subject to further calls. We cannot think that in such a case, where the company prospers, there are no net profits available for dividends until the earnings accumulate to an amount equal to the par value of the shares. The complainant's brief concedes this, and the concession seems quite fatal to his argument.

The language of section 47 supports this view. It requires the directors, after reserving over and above its capital stock paid in such sum as shall have been fixed as a working capital, to declare a dividend of the whole accumulated profits. Here the profits are clearly to be ascertained by reference to the capital stock paid in, and not to the nominal share capital. It would be quite inconsistent to require by section 47 a dividend out of profits to be ascertained with reference to capital stock paid in, and to forbid by section 30 a dividend, unless there were net profits over and above the amount of the nominal share capital.

The complainant argued that the preferred stock issued by the company was not authorized because it exceeded two-thirds of the capital .stock paid for in cash or property. It is quite enough to say that the complainant filed this bill as a holder of preferred as. well as common stock, and does not pray for a decree adjudging the preferred stock invalid: The prayer is only that the resolution for a dividend may be- decreed to be unlawful, null and void, and for an injunction. There is not even the usual prayer for general relief. It is therefore unnecessary to consider the question whether the issue of the preferred stock is not -within the rule established in Hackensack Water Co. v. DeKay, 36 N. J. Eq. (9 Stew.) 548.

The decree is affirmed, with costs.

For affirmance — Ti-ie Chancellor,' Chiee-Justice, Garrison, Swayze, Reed, Parker, Bergen, Voorhees, Minturn, Bogert, Vredenburgi-i, Vroom, Green, Gray, Dill — 15.

For reversal — None.


author: Swayze, J.

text:
    Melford N. Roll et al., executors, respondents, v. Abraham Everett et al., appellants.
    [Argued January 9th, 1908.
    Decided November 16th, 1908.]
    1. Secondary evidence of documents out of the jurisdiction of the court is not admissible merely upon proof of that fact, even though the documents are the papers of a third party not interested in the pending controversy.
    2. Where one tenant in common acquires a tax title or redeems land from a tax sale, his act inures to the benefit of his co-tenants upon their reimbursing him for their proportionate share of the amount paid by him.
    3. A tenant in common who discharges a lien upon the common property, has a right to contribution from'his co-tenant, and as security is entitled to a lien upon his co-tenant’s share of the property. The lien may be enforced in equity by treating the tax deed as valid and subsisting for that purpose.
    4. A tenant in common who has been disseized is not entitled to partition, but to prevent a tenant in common from having, partition there must be an actual ouster.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in 72 N. J. Fq. (2 Buch.) 20..

      Mr. Alan II. Strong■, for the appellants.

      Mr. Frederick M: P. Pearce, for the respondents..
   The opinion of the court was delivered by

Swayze, J.

This was a bill for partition. The property was conveyed by one Cotheal to Mary Jane Roll and Sarah E. Dey by deed, dated April 16th, 1874, which purported to convey three tracts of land, including the land now in question. The complainants are the successors in title of Mary J. Roll, but it is unnecessary to state in detail the devolution of title to the share claimed by them. Sarah E. Dey’s share was conveyed by the sheriff in 1877 to Ward C. Perrine and Abraham Everett, who subsequently acquired a tax title.

The first difficulty in the case arises out of the following clause in the deed:

“It is agreed by and between the parties to these presents, that this indenture shall not conflict with the title of any part of the aforesaid premises previously sold and conveyed by said Alexander I. Cotheal and James I). Thomas, to any party or parties, and this deed is subject to any such conveyances.”

The defendants contend that the property in question had been conveyed by Cotheal and Thomas in 1835 to Peter G. Taylor, and that therefore no title passed by the deed to Roll and Dey. They also claim a title paramount to the complainant by virtue of a tax deed from the collector of taxes, dated June 4th, 1877, to Ward C. Perrine and Abraham Everett. The interest of Everett under this tax deed was conveyed after his death by commissioners appointed in partition proceedings to Ward O. Perrine, George L. Everett and John R. Everett. The share of George L. Everett subsequently passed by his will to his sons Abraham and William C., two of the defendants. The share of Ward C. Perrine subsequently passed by his will to other defendants.

The proof offered of the alleged conveyance from Cotheal and Thomas to Taylor consisted of copies of books of account of Cotheal and Thomas, as trustees, containing record of sales of lots, part of the tracts in question. It was the same proof that was resorted to in the case of Roll v. Rea, 50 N. J. Law (21 Vr.) 264, and there held sufficient to carry the case to the jury. This ruling was subsequently approved by this court in Roll v. Rea, 57 N. J. Law (28 Vr.) 647. In that case, however, the copies taken from the trustees’ books had been introduced by consent, and the question presented was whether such a reasonable search had been made for the deed to Lary, which was the one there in question, that secondary evidence of its contents was permissible. In the present case the defendants seek to go further, and, without having the consent of their adversaries, they seek to prove the existence of a similar deed to Taylor, not by the secondary evidence of the original books of the trustees, but by a copy of that secondary evidence. If we assume that the books themselves would be admissible evidence, it does not follow that a copy thereof is admissible, because they are out of our jurisdiction. On this question the authorities are at variance. In the last edition of Greenleaf on Evidence § 568e, and in Wigmore on Evidence § 1218, cases are cited on either side. Thus, in Boyle v. Wiseman, 10 Exch. 647, it was held that the contents of a letter written by Cardinal Wiseman and in the possession of a resident of France, which was alleged by the plaintiff to be libelous, could not be proved by secondary evidence, merely because the person who had possession of it was beyond the jurisdiction of the court, and had refused to deliver it up at the request of a third person, who did not disclose the purpose for which it was wanted; and in Turner v. Yates, 16 How. 14, secondary evidence of an invoice, which was presumed to have been sent to London, was rejected, upon the ground that the deposition of the party in London, having possession in that way, should have been taken, or some proper attempt made to obtain it. On the other hand, in Bruce v. Nicolopulo, 11 Exch. 129, where it became necessary to prove that the failure to load a vessel in accordance with a charter party was due to the restraint of princes, it was held that evidence of the contents of printed placards purporting to be signed by Prince Gortschakoff and posted at a Black sea port, was admissible; and in Burton v. Driggs, 20 Wall. 125, the court in Vermont admitted secondary evidence of the contents of the books of a bank in New York state. Although in the opinion in this case it was said that the books, being out of the state and beyond the jurisdiction of the court, secondary evidence to prove their contents was admissible, it must be noted that the plaintiff had endeavored to obtain them for use on the trial, and that the custodian refused to permit them to go, and the deposition of the cashiers of the bank during' the period covered by the controversy was taken. We think it would be quite unsafe, in view of the grounds'upon which the rule forbidding the introduction of secondary evidence rests, to lay it down broadly that secondary evidence of documents out of the jurisdiction of the court is admissible when that fact alone appears, even though the documents are the papers of a third party not interested in the pending controversy. It ought at least to appear that some effort had been made to secure the original documents. We are not prepared to say that such an effort ought not to include the taking of depositions 'within the foreign jurisdiction. In the present case the defendants did nothing to secure the original documents and contented themselves with proving the death of Cotheal, and the fact that he had resided outside of the jurisdiction of New Jersey. No effort seems to have been made to ascertain whether the documents were still in existence, and, if so, in whose 'custody they were to be found. We think, therefore, that the vice-chancellor was quite right in disregarding the claim of the defendants that the title to the land in question was in Taylor.

With reference to the tax title, the -vice-chancellor held, upon an examination of the tax deed, that it was void because it failed to comply with the law then in force; but he felt constrained by our decision in Slockbower v. Kanouse, 50 N. J. Eq. (5 Dick.) 481, not to-determine that question, regarding it as a question of pure- law. He, therefore, held the case to enable the defendants to establish their title- under that deed, and required them to take proceedings for that purpose within thirty days. Upon their failure to take such proceedings, he advised a decree that' the premises described in the-bill are'free and clear of any lien' or encumbrance under and by virtue of the tax deed.

' We do: not find 'it - necessary to- determine whether the court of chancery had- the right to impose upon the defendants in a partition suit the burden of establishing a-title adverse to that of the complainant. That question was not involved in the case. At the time the tax title was acquired, Ward C. Perrine and Abraham Everett were tenants in common with Mrs. Roll, by virtue of the sheriffs deed conveying the Dey title to them. The law is well settled that where one tenant in common acquires a tax title or redeems land from a tax sale, his act inures to the benefit of his co-tenant upon their reimbursing him for their proportionate share of the amount paid by him. The principle is in some of the cases put upon the ground of a confidential relationship between the tenants in common. 1 Lead. Cas. Eq. (4th Am. ed.) 68. Other cases rest the doctrine upon the principle that one cannot be allowed to acquire a right by his own default. This principle would be violated if a tenant in common, who is equally obligated to pay all the taxes upon the joint property, were allowed to acquire rights superior to his co-tenant by defaulting in his obligation, and forcing the public authorities -to take proceedings for the collection of the tax. Other cases seem to rest the doctrine upon the view that one who has title to land cannot acquire a superior title by means of a tax deed. In the view of these cases, the acquisition of the tax title amounts to nothing more than a redemption of the purchaser’s own land from a lien.

The cases are carefully staled by Mr, Justice Holmes, in Hurley v. Hurley, 148 Mass. 444 19 N. E. Rep. 545. The rule has been held applicable where the tenant in common became such after the tax-title was acquired. DuBois v. Campau, 24 Mich. 360. Flinn v. McKinley, 44 Iowa 68, a casé where -one tenant in common had become the assignee of a tax certificate, and afterwards became a tenant -in common before he received the tax deed;. and to cases where the tenant in common had acquired the tax title .from a third person, who had purchased at the tax sale. Lloyd v. Lynch, 28 Pa. St. 419-423.

The extent to which the courts go is well illustrated by Burns v. Byrne, 45 Iowa 285; Busch v. Huston, 75 Ill. 343; Chace v. Durfee (R. I.), 16 R. I. 248; 14 Atl. Rep. 919, where it-was hold that a-purchase by the husband-of a tenant in common would inure to the benefit of all the co-tenants of the wife. The cases are collected in a note to Hoyt v. Lightbody, 8 Ann. Cas. 984; 98 Minn. 189.

In the present case the taxes were assessed prior to the acquisition of title by Perrine and Everett under the sheriff’s deed. If the lien of the municipality for the taxes had not then expired, Perrine and Everett could only secure the release of their undivided interest by payment of the whole tax, and in making such payment were only discharging their obligation to the public on account of their land. Upon the principles above stated they could not acquire any title to the land against their co-tenant by their own default. If, however, the lien had then expired, the collector of taxes was without power, and the tax deed conveyed no title.

The right of a tenant in common who discharges a lien upon the common property, is to contribution from his co-tenant, and as security he is entitled to a lien upon his co-tenant’s share of the property. That lien may be en torced in equity by treating the tax deed as valid and subsisting for that purpose; and in Hurley v. Hurley it was held that until the amount had been paid the co-tenant had no right to the possession of any part of the land, in equity or at law; it was accordingly held in that case that the petition for partition was rightly dismissed. In the Hurley Case, however, the tenant who had paid the taxes actually took possession of the property. In the present case the land is unoccupied land, of which neither complainants nor defendants have the actual possession. At common law a tenant in common who had been disseized could not have the writ of partition; and the reason is that given by Co. Liti. 167, in discussing the right of partition as between coparceners: “They no longer hold the estate together.” But, in order to prevent one tenant in common from having a partition, there must be an actual ouster. In the absence of such ouster the ordinary rule prevails that the possession of one tenant in common is the possession of all. Foulke v. Bond, 41 N. J. Law (12 Vr.) 527.

The fact that the statute authorizing the sale of land for taxes as it existed when the tax deed was made (Gen. Stat. p. 8851 pi. 822) authorized the purchaser at the tax sale to hold and enjoy real estate during the term for which he purchased the same, does not prevent the operation of this rule. The tax deed inures to the benefit of ail tenants in common; and if kept alive at ail, is only kept alive in equity for the purpose of enforcing the right to contribution. Such right is no bar to a bill in equity for partition.

The result is that we reach the same conclusion reached by the vice-chancellor, except so far. as he decreed that the premises were free and clear of any lien or any encumbrance, under or by virtue of the tax deed, l'n this respect the decree is erroneous .and must be reversed, and the record remitted to the court of chancery, and a decree entered for partition, which shall provide that the defendants have a lien upon the complainants’ share for the proportionate part of the taxes upon the property in •question paid by the defendants or their predecessors in title, with interest from the date of payment. This will necessitate the taking of further proofs.

For affirmance — The Chancellor, Trenchard, Vroom- — 3.

For reversal — The Chibe-Justice, Garrison, Swayze, Parser, Bergen, Bogert, Green, Gray, Dill — 9.


author:
Trbnohard, J. Pitney, Chancellor.
      Swatze, J.
      Garrison, J.

text:
    Robert H. McCarter, attorney-general, complainant and respondent, v. Vineland Light and Power Company, defendant and appellant.
    [Argued December 9th, 1907.
    Decided June 22d, 1908.]
    Á purchaser at a receiver’s sale, held pursuant to what is now section '•82 of the General Corporation act (P. L. 1896 p. 80S), of all the fran•chises of a gas company (including a franchise to lay gas pipes in the streets), holds such franchises, in view of the act of February 17th, 1881 (P. L. 1881 p. S3), as a body politic and corporate and has no power as an individual to convey such franchises to another person; and, when a corporation, the lessee of the person to whom such franchises were attempted to be conveyed, and with no other .right, proceeds to exercise such franchises by opening and occupying the streets, it will be restrained on the information of the attorney-general.
    On appeal from an order of the court of chancery advised by Vice-Chancellor Learning, whose conclusions are reported in 72 N. J. Eq. (2 Buch.) 767.

      Messrs. French & Richards, for the appellant.

      Mr. Edwin F. Flitter, Mr. Louis H. Miller and Messrs. Gashill & Gashill, for the respondent.
   The opinion,of the court was delivered by

Trbnohard, J.

This is an appeal from an order of the court of chancery granting a preliminary injunction.

The information seeks to restrain the Vineland Light and Power Company from extending its gas mains through the highways of the borough of Vineland and township of Landis.

The defendant company was incorporated in the year 1900 under the General Corporation act of this state (P. L. 1896 p. 277), having for its object, among others, as stated, in its certificate of incorporation, the making, sale and distribution of gas in the borough of Vineland and the township of Landis.

No permission has been granted the defendant company by either of the municipalities named to open and occupy the highways. It claims the right to do so as lessee of the franchises granted by the legislature to the Vineland Gaslight Company, by act approved March 15th, 1870. P. L. 1870 p. 577. That act granted to the company last named the right to lay gas pipes in the highways now in dispute. The defendant company claims title to the franchise of the earlier company in the following manner: In the year 1884- the Vineland Gaslight Company became insolvent and a receiver was appointed by the court of chaneery. Pursuant to an order of the court the receiver made public sale of all the property and all the franchises belonging to the company and-appertaining to the principal work for the construction whereof the company was incorporated, and John R. Farnum became the purchaser at that sale, which was duly confirmed by the court. Earnum operated the works until March 37th, 1900, when he and his wife conveyed the same to Arthur A. Holbrook. The conveyance included all the real and personal property purchased by Earnum at the receiver’s sale and specifically included the franchises sold by the receiver to Earnum. On March 31st, 1900, Holbrook and his wife conveyed the same property, except .the franchises, to the defendant company, and, by a separate instrument, leased the franchises to the defendant company for the term of ninety-nine years. Since that date the defendant has operated the works and has made some extensions. At the time the information was filed the defendant was engaged in making further extensions and the information was filed to enjoin this new work.

The learned vice-chancellor held that while the purchaser at the judicial sale acquired, under what is now section 83 of the General Corporation act (P. L. 1896 p. 808), all the property, rights, powers, privileges and franchises of the insolvent corporation, yet his title, possession and enjoyment were impaired or wholly destroyed by his failure to comply with the provisions of the act of February 17th, 1881 (P. L. 1881 p. 88j Gen. Slat. p. 869^ §§ 8^, 85), by completing the organization of the company as authorized by that act.

While we have not found it necessary to decide that precise question, yet we are of the opinion that the preliminary injunction was properly granted for the reasons we will now state.

The rule must be considered settled that ho person or corporation can acquire a right to make a special or exceptional use of a public highway, not common to all the citizens of the state, except by grant from the sovereign power. Jersey City Gas Co. v. Dwight, 29 N. J. Eq. (2 Stew.) 242.

We think the defendant company had acquired no right to make the extensions enjoined, because it had no grant from the state.

We have pointed ont that it was organized under the 'General Corporation act and claims its right to use the streets as lessee of the franchises of the Vineland Gaslight Company, acquired by the latter company by P. L. 1870 p. 577.

Although, technically speaking, franchises are property, they are property of a peculiar character, arising only from legislative grant, and are not subject to sale and transfer without the authority of. the legislature. Stockton v. Central Railroad Co., 50 N. J. Eq. (5 Dick.) 52; Randolph v. Larned, 27 N. J. Eq. (12 C. E. Gr.) 557; Black v. Delaware and Raritan Canal Co., 22 N. J. Eq. (7 C. E. Gr.) 130.

We find no legislative authority for the conveyance of the franchises by Earnum to Holbrook, from the latter of whom the defendant claims title.

Section 82 of the General Corporation act (P. L. W96 p. SOS) provides:

“Whenever a receiver of a corporation shall have charge of a canal, railroad, turnpike or other work of a public nature, in which the value of the work is dependent upon the franchise, and in the continuance of which the public as well as the stockholders and creditors have an interest, the receiver may sell or lease the principal work for the construction whereof the said corporation was organized, together with all the chartered rights, privileges and franchises belonging to it and appertaining to such principal work; and the purchaser or purchasers, lessee or lessees of such principal work, chartered rights, privileges and franchises, shall thereafter hold, use and enjoy the same during the whole of the residue of the term limited in the charter iof said corporation, or during the term in such lease specified, in as full and ample a manner as such corporations could or might have used and enjoyed the same; subject, however, to all the restrictions, limitations and conditions contained in such charter; provided, that nothing in this section contained shall.be so construed as to apply to or in anywise affect any corporation authorized by law to exercise banking privileges.”

This legislation, in substance, was originally enacted March 11th, 1842 (P. L. 18Jp2 p. 16L) and with minor changes has been preserved (Rev. Stat. 181^6 p. 136 tit. 5 ch. 3 § 20; Rev. p. 192 § 85; P. L. 1896 p. 303 § 82), and is relied upon by the defendant to protect it in the enjoyment of the franchises originally granted to the Vineland Gaslight Company and sold by the receiver to Earnum.

The rights, if any, acquired by the defendant, are derived from the deed of Farnum to Holbrook, as affected by the provisions of the Corporation act and the independent statute of 1881, hereinafter particularly referred to, which establishes a mode of procedure when the property and franchises of a gas company are sold pursuant to a process or decree of the courts.

That act of February 17th, 1881 (P. L. 1\831 p. S3; Gen. Stat. p. 369k §§ 3k, 3-5), in relation to the sale and reorganization of turnpike, gas and other companies, provides that upon the sale of the property, rights, powers, privileges and franchises of any turnpike or gas company under any process of decree of any court of this state, or of the circuit court of the United States—

“The person or persons for or on whose account such property, rights, powers, immunities, privileges and franchises may be purchased shall be and they are hereby constituted a body politic and corporate, and shall be and they are vested with all the rights, title, interest, property, possession, claim and demand in law and equity of, in and to such * * * company, with its appurtenances and with all the rights, powers, immunities, privileges and franchises of the corporation as whose the same may have been sold.”

The act further provides that such persons, for or on whose account any such property, rights, powers, immunities, privileges and franchises of such corporation may or shall have been purchased, “may organize said new corporation, elect directors and officers, issue stock, create and issue preferred stock and issue and secure bonds.”

We have pointed out that Farnum, in 1884, properly acquired title at the receiver’s sale to the property of the Vineland Gaslight Company, including all the chartered franchises belonging to the Vineland Gaslight Company. Instead of availing himself of the provisions of the act of 1881, above referred to, Farnum continued to maintain and operate the gas works as an individual in his own name and as sole owner, until on or about March 27th, 1900, when he conveyed all the property and franchises which he had acquired at the receiver’s sale to Holbrook, who, on the 31st of March, 1900, conveyed the property, real and personal, to the defendant company, a new corporation, just organized under the General Corporation act, and leased to the same company all the chartered franchises granted to the original Vineland Gaslight Company by the legislature.

It will be seen, therefore,, that a construction of what is now section 82 of the General Corporation act, as modified by the act of 1881, is necessary to a determination of this case.

It is a rule of construction, well established, that all acts in pari materia are to be taken together as if they were one law. Perth Amboy v. Piscataway, 19 N. J. Law (4 Harr.) 173; Jersey v. Demurest, 27 N. J. Eq. (12 C. E. Gr.) 301; Mickle v. Matlack, 17 N. J. Law (2 Parr.) 93; Newark City Bank v. Assessors, 30 N. J. Law (1 Vr.) 22.

Construing the acts in question together, viz.: Eighty-two of the Corporation act and the act of 1881, we find a definite disposition of the title to the chartered rights, privileges and franchises of the insolvent corporation.

Under section 82 of the act concerning corporations, Farnum’s rights as a purchaser would seem to be absolute. The title tó the chartered rights, privileges and franchises of the corporation passed to the purchaser, who became entitled to hold, use and enjoy the same during the whole of the residue of the term limited in the charter of said corporation in as full and ample a manner as such corporation could or might have used and enjoyed the same, subject, however, to all the restrictions, limitations and conditions contained in such charter.

If this statute stood alone, Farnum might well claim that he acquired these franchises, although of a public nature, as an individual with the right of perpetual succession, analogous to an indefeasible estate in fee-simple of lands, including not only jus in re but jus disponendi. But in 1881 (P. L. 1SS1 p. 33), before Farnum’s purchase at the receiver’s sale, the legislature, in exercising control of gas companies and others, modified the character and conditions of the title of purchasers of public franchises at a judicial sale.

The state did not take away or abridge the rights and franchises acquired under the receiver’s sale, but prescribed a mode of procedure whereby such rights and franchises, together with die right of perpetual succession, should be thereafter held and enjoyed.

The legislative intent seems to be clear to create a new corporation and not to permit public franchises to pass to an individual to be used and enjoyed, sold and transferred, bequeathed and devised in the same manner as ordinary real or personal property.

Accordingly, the act of 1881 created a corporation in which the title to the franchises in question was ipso facto vested. The effect of this enactment is the same, whether or not the purchaser exercised his right to organize “the new corporation” already created by the election of directors and officers and the issue of stock and the securing of bonds. The act effectually transferred the title and the right of perpetual succession to a corporation sole, and the purchaser, as an individual, ceased to have any title which he could convey or lease in his lifetime or transmit by testamentary disposition.

It is quite probable that the legislature, in formulating the provisions of the act of 1881 concerning the sale and reorganization of turnpike, gas and other companies, used as a guide the act of March 25th, 1875, concerning the sale of railroads, canal«, turnpikes, bridges and plank roads. Rev. of 1877 p. 946.

It is true that this court had before it for construction this latter act, in the case of Boylan v. Kelly, 36 N. J. Eq. (9 Stew.) 331. But it is a misapprehension of the language of that opinion to consider that it decided that the purchaser at a sale had under that act — or a person for whose account the purchase was made— was not by the express provision of the act made a body corporate. In the cited case, one Kelly was the purchaser. He conveyed to Boylan, who, “in due time, proceeded to effect a corporate organization,” under the statute.

Chancellor Eunyon, in the court below, 82 N. J. Eq. (6 Stew.) 581, held that Boylan (the person on whose account the purchase was made), was by force of the statute, a body corporate. Whether the statute had this effect, or whether it permitted Boylan to hold as an individual, or as a corporation, as he might elect, was a question, the decision of which the case did not require. Certainly if it did not expréssly make the purcháser a body corporate, it authorized him to hold as á corporation, if he wished to do so, and that he did so wish was conclusively shown by his proceeding to effect a corporate organization under the act.

The question which the court of errors and appeals was called upon to determine was whether parties having judgments against Boylan personally could reach the property and franchises acquired by him through the sale made under the act of 1875. If he held them as an individual they were subject to levy under the judgments against him; if he held them in a corporate capacity, they were not.

Dealing with this question, the court uses this language: “The chancellor, following the case of Commonwealth v. Central Passenger Railroad Co., 52 Pa. St. 506, considered the act of purchase by Boylan as creating him a corporation under the statute. The act certainly does confer upon such purchaser the right, at his election, to take and hold and exercise such property and franchises in a corporate capacity, to the full measure in which they were enjoyed by the corporation sold out, with power to organize for its management in the usual mode of controlling such interests. The purchaser, Boylan, left it in no doubt as to the character in which his purchase was designed to be held, for he proceeded in due time to effect a corporate organization.”

Nothing more than this is said by the court as to the meaning of the act. No declaration that the chancellor’s construction is erroneous; no pointing out where the error lies; no citation of the language of the statute; nothing to suggest that the court differs with the chancellor, except' the use of the word “certainly.”

As we read the opinion of Mr. Justice Knapp, he says in effect that the act at least gives Boylan the right to become a corporation, and that right he has exercised; it is therefore not necessary for us to go as far as the chancellor, and say that under the statute his purchase made him a corporation nolens volens.

To hold that he meant anything more than this, is to say that he deliberately overrode what seems to us to be the plain declaration of the statute without a word of explanation by way of showing why that declaration was not to be accepted as it reads. The language of the statute is that

“The person or persons for or on whose account such railroad, canal, turnpike or plank road may be purchased, shall (be) and are hereby constituted a body politic and corporate.”

It seems to us that the words could not be plainer. We should require something more than the words used by the learned justice in the cited case to convince us that he, and the other judges who sat with him, intended to declare that the word “shall” was not mandatory, but permissive only, and that the expression “are hereby constituted a body politic and corporate” did not create a corporation in prcesenti, but merely conferred the privilege of becoming a corporation in futuro, should the purchaser or purchasers so desire.

It should be noted, also, that the act of 1881 differs from somewhat similar acts in New York and North Carolina, which have been discussed in leading cases and which confer the privilege of applying for a charter for a new corporation, but do not require the purchasers to form a corporation.

Accordingly, it was held in People v. Brooklyn, Flatbush and Coney Island Railroad Co., 89 N. Y. 75, that, although a purchaser at a foreclosure sale of a railroad was authorized to create a new corporation for the purposes of the transfer, it was not essential to do so, for he might transfer the property and franchises to a corporation already existing and capable under the law of its creation of holding the property and exercising the franchises which passed to the purchaser by the mortgage sale.

So, in the case of Julian v. Central Trust Co., 198 U. S. 93, the Railroad act of North Carolina was discussed, in a suit to enjoin a sale of property under execution against the Western North Carolina Eailroad Company, the property and franchises of which had been sold under foreclosure and purchased by the Southern Eailroad Company, a foreign corporation.

In support of the right to enforce the executions upon the judgments against the old company, it was claimed that unless the purchaser should, under the Eailroad law of North Carolina, organize a new domestic corporation to take the place of the old one, the property continues liable, though in the hands of the purchaser, to claims and judgments against the old corporation.

The United States supreme court said: “It is true the sections of the North Carolina code herewith given clothe the purchaser with the right and privilege of organizing a corporation to operate the purchased property, but we find no requirement that he shall do so.”

After quoting the provisions of the act, which provides that the purchasers may file articles of association and such purchasers and associates shall thereupon become a new corporation, the court continues: “This confers a privilege, but does not prevent the purchaser from transferring the property to a company already formed and authorized to purchase and operate a railroad.”

The court therefore held that the judgments could not be enforced against the Southern Bailroad Company, and that the purchaser at the foreclosure sale without re-incorporation had the capacity to acquire the title to the property and franchises free from the judgments against the former company.

The act of 1881 created a new corporation when the purchase is consummated. There is, we think, no room for argument or difference of opinion as to the meaning of the act.

The purchaser is constituted a body politic and corporate by the express language of the act, and vested with all the property of the company and all its rights, powers, immunities, privileges and franchises.

Under the act of 1881, there is no option to the purchaser to apply for a charter or not, as he pleases. There is no privilege conferred upon the purchaser to accept or reject at his will. The act itself confers the charter and creates the corporation, which comes into existence at the completion of the purchase. Whether the organization of the corporate body by election of directors and officers is required may be in question, but the legislative intent is unmistakable to prevent the anomaly of public franchises passing by assignment or devolution by operation of law or by last will and testament.

It is against the policy of the state to have public franchises operated by individuals, by executors, administrators, guardians of infants, or trustees in bankruptcy.

If the claim of Farnum to exercise the jus disponendi is sound, and his title as an individual is absolute, the transfer of the franchises to an alien or a foreign corporation might be sustained and the anomaly would be presented of public franchises operated .in some parts of the state by individuals, in other parts by foreign corporations or foreign executors or trustees or assignees who claim title by purchase, and in still other parts by companies organized under laws regulating public service corporations.

The policy of uniform legislation must be adhered to and public corporations should be amenable to a fixed code of laws, regulating and controlling their operations and defining the duties and obligations of their officers and agents in the interest of the public.

A strict construction of similar legislation was made in Snell v. City of Chicago, 152 U. S. 191, where the president of a plank road company was authorized by statute to sell to the county of Cook the franchise, property and immunities of the company, or to any other party, and the right was exercised by the execution of a deed, conveying all the property of the company, consisting of the charter and its amendments and franchises, the right of way, grading, planking, ditches, bridges and drainages, toll houses, &c., to one Snell, who went into actual possession and control of the property and franchises and continued to exercise them until his death eighteen years later. The city of Chicago commenced proceedings to remove a toll gate maintained by the heirs of Snell, who thereupon filed a bill for an injunction. The court of Illinois dismissed the bill and the appeal was dismissed by the United States supreme court. While the supreme court did not expressly decide that the strict construction given by the court below was correct, and decided that no federal question was involved, yet the court said: “The mere grant of franchises to a corporation carries with it no power of alienation and many cases have arisen in which an attempted alienation by the corporation has been declared by the courts to be void, as divesting it of the power to discharge the duties imposed by the charter.”

The supreme court of Illinois, in the same case below (Snell v. Chicago, 133 Ill. 413), declared that the person who was to enjoy the rights and privileges of the corporation was the pur-' clyiser of the franchise and road, and this did not include his heirs and assigns. It was stated that at most Snell had merely the “right to organize as a corporation.” The court used this language: “If Snell in Ms lifetime was the owner of such franchise by express legislative grant, he could not assign it, and it could not descend to his heirs. He failed to use it for the purpose of effecting any corporate organization and it died with him.”

We point out that the act of March 24th, 1899, entitled “An act concerning corporations” (P. L. 1899 p. S'S4), has no application to the present case, for the reason that it only provides for a transfer of franchises by lease or assignment, by one corporation to another corporation, and does not refer to a conveyance by an individual to another individual, or to a lease by an individual to a corporation, such as are in the chain of title of the defendant.

It is a well settled rule that a corporation, created by statute, possesses no rights and can exercise no powers which are not expressly given or to be necessarily implied. Stockton v. Central Railroad Co., 50 N. J. Eq. (5 Dick.) 52 Northwestern Fertilizing Co. v. Hyde Park, 97 U. S. 659.

In accordance with these principles, Farnum, the purchaser at the receiver’s sale, held the franchise as a body politic and corporate and had no power as an individual to convey them to Holbrook. Since the defendant claims the franchises as the lessee of Holbrook, it follows that the defendant was not possessed of them.

This being so, there can be no doubt of the power of the court to restrain the act complained of at the instance of the attorney-general. Stockton v. Central Railroad Co., 50 N. J. Eq. (5 Dick.) 152.

The order of the court below granting the preliminary injunction is therefore affirmed, with costs.

Pitney, Chancellor.

My vote for affirmance is based substantially upon the grounds expressed by Vice-Chancellor Learning in his opinion delivered in the court below, and reported in 65 All. Rep. lOlpl.

Swatze, J.

(dissenting).

The opinion of the court rests upon the view that the act of 1881 superseded section 85 of the General Corporation act of 1875 (Rev. p. 192) so far as it was applicable. I think differently. The act of 1881 was modeled after section 1 of an act concerning the sale of railroads, canals, turnpikes, bridges and plank roads, approved March 25th, 1875. P. L. 1875 p. 1¡.1. It follows that act so closely in its essential features that it was evidently copied therefrom. Prior to the sale of the gas works of the old Vineland company, the act of 1875 had been before this court in Boylan v. Kelly, 36 N. J. Eq. (9 Stew.) 331. In that case (at p. 885), we referred to the opinion of Chancellor Runyon that the act of purchase constituted the purchaser a corporation, but did not approve of that opinion which would have been decisive of the case. On the contrary, we distinctly said that the act conferred upon the purchaser the right, at his election, to take and hold and exercise the property and franchises in a corporate capacity, and we pointed out that the conduct of the purchaser in that case sufficiently evinced his purpose to receive and hold the property and rights in a corporate relation, and not as a natural person. The reasoning of this court was quite unnecessary if the view of the majority in the present case is correct. Thq fact that we decided the Boylan Case upon the ground that the purchaser had evinced.an election to hold as a corporation, and not as a natural person, amounted to a disapproval of the view expressed by Chancellor Runyon and now adopted by us. With that decision upon a similar statute, Earnum evinced his election to take as a natural person under section 85 of the Corporation act. All the orders of court and the conveyance to him are couched in language taken from that section. He had a right to rely on what we said in the Boylan Case, and it is too late for us, after property rights have been acquired in reliance upon that ruling, to change our position. When the legislature in 1896 revised the Corporation act it had before it not only the act of 1881, but the act of 1875, and it then reenacted section 85 as section 82 (P. L. 1896 p. 808), and repealed all inconsistent acts. Section 82 of the act of 1896 mentions by name railroads, canals and turnpikes, so that it cannot be said that the legislature did not have in mind the very classes of corporations mentioned in the acts of 1875 and 1881. I do not think these acts were repealed by the act of 1896, for the reason that I think there is no necessary inconsistency. The reenactment of section 85 by the legislature is an indication that the revisers, experts as they were in our corporation law, were of opinion that it had not been superseded either by the Railroad and Canal act of 1875 or the so-called Turnpike act of 1881; and the legislature adopted that view, which was the same view expressed by us in the Boylan Qase.

The object of section 85 was not the advantage of the corporation or its creditors. It was to preserve for the benefit of the public the right to continue the operations of corporations having charge of a work of a public nature in which the value of the work was dependent upon the franchise, and in the continuance of which the public, as well as the corporators and creditors of the company, had an interest. The legislature recognized the fact that there was a public interest to be served by the continuance of the operations of the company, and that this end could not be accomplished if the physical property was to be severed from the right to use and operate the same. The present case illustrates the difficulty. It follows logically from the view of the court that the present defendant is without power to conduct the business of supplying Yineland with gas, and, since Farnum has died without organizing a corporation under the act of 1881, no one has the legal right to supply this important municipality with one of the necessities of modern life.

My view, I think, harmonizes with other well-established legal principles. Before a corporation can actually exist there must not only be a charter, but an acceptance of that charter. Far-mum, instead of accepting the corporate powers conferred by the act of 1881, did all in Ms power to show that he did not accept them. By our present decision the purchaser becomes a corporation nolens volens, and is at once, by the act of purchase, constituted a corporation sole — a corporation quite anomalous in our law. Upon this anomaly is ingrafted another, for the corporation sole is empowered by the act to organize “said new corporation” by the election of officers and directors, the issuing of certificates of stock, and the creation of preferred stock. A corporation sole with attributes of this character is a legal novelty; yet what other view can be taken? The words “said new corporation” point necessarily to the former language of the section, which, the opinion holds, create a corporation sole. The only other view possible is that the corporation sole created by the mere act of purchase can at once proceed to convert itself into a corporation aggregate, a legal novelty hardly less striking than the former. These difficulties are enough to lead me to conclude that we took the correct view in Boylan v. Kelly, that the purchaser does not become a corporation by the mere act of purchase, but has his election to hold as an individual or to organize a corporation aggregate under the act of 1881.

There is no insuperable difficulty in an individual exercising such franchises as those now in question. He must have express legislative authority, but that is given by section 85 of the old Corporation act. The charter of the old Yineland company gave it express authority to borrow money upon a mortgage of its lands, works, property and franchises. At the date of the charter, and for many years thereafter, such mortgages were usually given to individuals, and the mortgage upon the franchises or even upon the property could be of little value to the mortgagee, unless in case of foreclosure he might purchase the mortgaged property and exercise the franchises. New Orleans, &c., Railroad Co. v. Delamore, 114 U. S. 501; 5 Sup. Ct. 1009; 29 L. Ed. 244. The franchise to maintain and operate the works may be exercised by natural persons. Memphis, &c., Railroad Co. v. Berry, 112 U. S. 609; 5 Sup. Ct. 299; 28 L. Ed. 831. Our statute is careful' to define the right acquired by the purchaser. It is the right to exercise the franchise “during the whole of the residue of the term limited in the charter of said company.” In this respect the case differs from Snell v. Chicago, 133 Ill. 413; 24 N. E. Rep. 532; 8 L. R. A. 858, and on appeal, 152 U. S. 191; 14 Sup. Ct. 489; 38 L. Ed. 408. The term limited in the charter of the Yineland company was perpetual, and a right to exercise the franchises for the whole of the residue of the term necessarily includes a right which shall outlast the life of a natural person, and, to be available at all, must therefore involve the right to convey. In the absence of legislation forbidding the exercise of such a franchise by a natural person as grantee, I see no reason why one natural person who is by statute authorized to exercise the franchises may not convey them with the works to another natural person. This was done in the case of Boylan v. Kelly.

I do not question the power of the legislature to control within the constitutional limits the business of supplying gas to a municipality. Section 85 of the Corporation act of 1875 itself enacts that the purchaser shall hold, use, and enjoy the franchises subject to all the restrictions, limitations, and conditions contained in the charter of the insolvent company, and no doubt this would authorize any regulations of the exercise of the rights by Farnum or his grantees which might have been made with reference to their exercise by the Vineland Gaslight Company.

I do not understand whether the court holds that the franchises conveyed to Farnum ceased with his death, or whether they are still in existence. The reference to Snell v. Chicago seems to indicate that the court favors the former alternative. If that view is correct, the effort of the legislature, both by section 85 of the Corporation act of 1875 and by the act of 1881, to preserve these franchises for the public benefit was singularly inefficacious, since it was made to depend upon the uncertain tenure of the purchaser's life.

If these franchises are still subsisting, they must have passed as property of a corporation sole, since the opinion clearly indicates that they could not pass by will or intestacy. If that view is correct it is of considerable importance to know in whom they are now vested. Whoever it may be, it would seem that he holds the franchises separate from the physical property, the works, gas holder, pipes, &c., and no one is at present authorized by law to supply this municipality with gas.

I prefer the more simple but less novel view which I have already indicated.

Bogert and Green, J.J., concur in the views herein expressed.

Garrison, J.

(dissenting).

If it be conceded that the Vineland Light and Power Company is mistaken in its contention that it is the legal owner of the franchises of the yineland Gaslight Company under color of which it has been and still is rendering the public service for which that company was incorporated, I am of opinion that the temporary opening of a street in the performance of that supposed duty and in the public interest is not such an irreparable injury or such a public nuisance as presents a proper case for interference by a court of equity.

“If a mistake has been made by the company,” said Chancellor Vroom in Attorney-General v. Stevens, 1 N. J. Eq. (Sax.) 369-385; 22 Am. Dec. 526, “acting without fraud or corrupt intent but seeking to comply with the requisitions of law, it does not present a proper case for the interference of this court by the extraordinary remedy of injunction.”

In Morris and Essex Railroad Co. v. Attorney-General, 20 N. J. Eq. (5 C. E. Gr.) 530, the chancellor had held that the defendants were not authorized to lay their track upon the street, and granted the injunction applied for by the information. Upon appeal this was reversed. Justice Depue, in delivering the opinion of this court, said: “It must not be overlooked that the defendants are engaged in a public work, by the completion of which the public interests will be greatly advanced. The injunction by which the progress of the work is arrested must not only cause great injury to the defendants, but also is the occasion of great inconvenience to the public.”

In the case of Allen v. Freeholders of Monmouth County, 13 N. J. Eq. (2 Beas.) 68, it was held “that, although a bridge which was being erected over navigable waters without competent authority was technically a nuisance, yet as it was being built in good faith, and for the public benefit, a court of equity would not restrain its erection even on an information by the attorney-general in behalf of the public.” Morris and Essex Railroad Co. v. Attorney-General, 20 N. J. Eq. (5 C. E. Gr.) 530.

In Attorney-General v. Delaware and Bound Brook Railroad Co. the court said: “There is still another consideration constraining me to the conclusion at which I have arrived. The defendants have acted bona fide under what they believed to be sufficient legislative authority. They have expended a very large sum of money in their enterprise. * * * The defendants have been permitted to make their immense expenditure upon their enterprise in the confidence of their convictions that they possessed all requisite legislative authority without even a word of protest or remonstrance. Under such circumstances, equity will refuse to aid even to the state, leaving it to its remedy at law.” Attorney-General v. Delaware and Bound Brook Railroad Co., 27 N. J. Eq. (12 C. E. Gr.) 1.

Conformity to the views thus expressed by chancellors and by equity judges in this court requires that we reverse the decree in the present case, which more than any of those cited is inopportune for interference by the injunction power of the court of chancery. The statute that granted the charter of the original gas company was enacted in the interest of the public. The statutes that were enacted to prevent the lapsing of these public service franchises had the same interest in view. The new corporations that were authorized and capacitated to continue such franchises were conceived in the same spirit. The present corporation is in form and effect identically such a corporation. The technical flaw in its mode of organization is technical merely, and does not appeal to a court of equity. The only matter we are asked to decide is a sharp legal point about which, if mistake was made, it was made upon the advice of conscientious and eminent counsel years ago, and now raises after acquiescence, expenditure of money and years of acceptable performance of a public duty.

The overt act with which the defendant is charged at this late day is that of continuing to serve the public interests that 'all the statutes referred to were enacted to subserve. In its most heinous aspect the defendant’s defence consists in opening up the soil of the highway to lay a gas pipe — a matter of a few inches in point of depth and of a few hours in point of time, by which no substantial injury to the public is done, and by which no member of the public is even pretended to be injured. On the other hand, the injunction we are asked to approve will be a grievous hardship to the very public in whose name alone it is or can be demanded. Its effect will be to deprive an entire community of a convenience of modern life necessary to its comfort, and all but essential to its safety. This must be the result of our decision, unless indeed there be a business competitor of the-defendant waiting to avail itself of our decision of the sharp-legal point involved. The case does not show that there is such a competitor, hence we are not to assume that there is; but,, if there is, it does not constitute a public in whose interest we should disregard the interests of the real public, and depart from the salutary and well-considered declarations with which this memorandum is prefaced. The case is peculiarly one where a court of equity should decline to interfere.

For affirmance- — The Chancellor, Ohiee-Justioe, Reed, Trenci-iard, Bergen, Vredenburgi-i, Vroom, Gray, Dill — 9.

For reversal — Garrison, Swayze, Bogert, Green — 4.


author: Thicncitard, J.

text:
    City of Atlantic City, appellant-complainant, v. Associated Realties Corporation, respondent-defendant.
    [Argued January 6th, 1908.
    Decided June 15th, 1908.]
    1. The predecessors in title of the defendant, by deed, conveyed to the city of Atlantic City, an easement or right of way over a strip of land on the ocean front, which deed contained a clear restriction against placing any building or structure upon the ocean side of the lands conveyed, with a proviso reserving the right to build a pier of a certain kind and length on which the owners shall not permit the sale of any commodities “and be confined to charging only an entrance fee.” The defendant erected a pier of the kind and length permitted and charged visitors thereto an entrance fee of ten cents. In addition it charged such visitors after they had entered upon the pier additional sums for the hire and use of roller skates and for checking garments. — Held, that such charges, other than the entrance fee, were made in violation of the covenant that the pier owner should “be confined to charging only an entrance fee.”
    2. The city of Atlantic City, as trustee for the public, has a right to accept a deed for a grant to the public of a right of way over lands on the ocean' front for the purpose of a boardwalk, the deed containing a negative covenant granting in effect also a right of light, air and view over and across the oceanward land from the boardwalk, notwithstanding this latter right is limited by a reservation to the donors of the privilege of placing thereon a certain kind of structure, when the use to which those structures shall be confined is defined for the purpose of regulating the kind of structure and the number of structures which could, and would likely be, erected.
    3. An acceptance of property dedicated to the public use may be shown by an instrument in writing executed by the proper authorities on behalf of the public, or by the use and improvement of the property dedicated, by the duly authorized authorities.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Bergen, whose opinion is reported in 72 N. J. Eq. '(2 Buck.) 63A

      Mr. Harry Woolion, Messrs. Godfrey & Godfrey and Mr. Gilbert Collins, for the appellant.

      Messrs. Thompson & Cole, for the respondent.
   The opinion of the court was delivered by

Thicncitard, J.

This is an appeal from a decree of the court of chancery dismissing the bill of the complainant, the city of Atlantic City.

The bill seeks to restrain the defendant from charging any fee to visitors to its pier, or any part thereof, except an entrance fee.

The rights of the parties depend upon the legality and construction of an easement deed made by the predecessors in title of the defendant to the complainant.

In 1889 (P. L. 1889 p. 206) an act was passed empowering cities located on or near the ocean, and embracing within their limits or jurisdiction any beach or ocean front, by ordinance to lay out and open streets and drives, and to construct public walks along the beach or ocean front, and to grade and otherwise improve the same and to regulate the use thereof.

Subsequently, several supplements to this act were passed. By a supplement of 1890 (P. L. 1890 p. 159) it was provided that any walk constructed upon any such street so laid out should be elevated above the surface of the ground and be constructed on piling or other supports placed in the street; and when such elevated walk should be constructed, the city could permit approaches to be made to connect with it from contiguous property on the landward side or side most remote from the ocean. By this supplement the city was authorized to accept any dedication of lands or rights which might be made for the purpose of enabling such city to open and lay out such street or for the purpose of constructing any such walk, or for the purpose of making any improvement in or to the same.

By a further supplement of 1896 (P. L. 1896 p. 18) the common council was authorized to relocate, in whole or in part, any public walk or walks which might have been or which might thereafter be constructed or built.

Under the authority thus given the city of Atlantic City laid out a street sixty feet wide along the ocean front and constructed thereon a public boardwalk elevated on posts and, in the year 1896, relocated and laid out a street sixty feet wide along the beach or ocean front, and constructed thereon a new public boardwalk forty feet wide and about four miles long of a more permanent and substantial character, elevated on posts.

The owners, with one or two exceptions, of ocean-front land over which the sixty-foot strip extended, on April 30th, 1896, executed and delivered to the city the right of way agreement or boardwalk dedication deed by which they dedicated over their respective lands the sixty-foot strip and inserted in their deeds covenants protecting the use by the public of the sixty-foot strip and boardwalk, and the lands on the ocean side thereof, and prohibiting the erection of buildings to the oceanward of the walk for the purpose of preserving a continuous ocean view from the boardwalk.

Among such owners who executed such easement deeds were William Bowler, Elias J. Molineaux, George C. Governator and John I-I. Wahl, who were the predecessors in title of the defendant corporation.

In these deeds the grantors covenanted, among other things, as follows:

“The said parties of the first part, their heirs, executors, administrators and assigns, shall not and will not put or erect or allow to be placed or erected on the lands hereby granted or on the oceanside thereof any building or structure, except as provided by ordinance, * * * and that these covenants shall attach to and run with the lands and premises hereby granted and the lands on the ocean side thereof so long as the same shall be used for the purpose of a street and a public steel, board or plank walk, and that the same may be enforced or its breach or non-observance may be restrained or enjoined at any time by the said party of the second part, its successors and assigns; * * * provided, however, that the within grantors shall not be prohibited from building a pier in front of their property and connecting the same to the new walk to be erected, and upon the further condition that the said pier shall be at least one thousand feet in length extending into the ocean beyond the present sixty feet wide strip and constructed of iron or steel, and shall not permit the sale of any commodity upon the same and be confined to charging only an entrance fee.”

The sixty-foot strip so dedicated by the predecessors in title of the defendant ran over the several tracts of land owned by them and constituting a tract of land on the western line of Arkansas avenue, extending southerly two thousand feet to the exterior line fixed by the state board of riparian commissioners, having a frontage of two hundred feet on the ocean front, which several tracts of lands by mesne conveyances became vested in Clement J. Adams, who, together with his wife, by deed of March 1st, 1906, conveyed to the defendant corporation.

The defendant subsequently built a pier upon this property on the ocean side of the sixty-foot strip and attached the same to-the boardwalk.

The testimony shows that the defendant charged visitors to-its pier an entrance fee of ten cents. In addition it charged such visitors after they had entered upon the pier additional sums for the hire and use of roller skates and for checking garments. It is insisted chat these charges, other than the entrance fee, were made in violation of the covenants already recited.

The main question is whether, assuming that the agreement is valid, the defendant has violated its terms by its charge for the hire and use of roller skates and for the checking of garments.

We think that this charge is in violation of the covenant.

The easement deed must be construed so as to effectuate, if possible, the intention of the parties, and to fulfill the common purpose of the grantors, unless inconsistent with settled rules of law. IS Qyc. 601.

The covenants therein contained show that the owners of the beach-front lands were actuated by a common purpose to carry into effect by their joint action a general plan of mutual benefit to themselves and to the public to preserve an open view ocean-ward from the elevated public walk, and to that end to restrict the use of the land, and the business to be conducted, on the ocean side of the walk.

The language of the covenant that the'pier owner “shall 'not permit the sale of any commodity upon the same, and be confined to charging only an entrance fee,” seems plainly to admit of but one construction — namely, that no pecuniary exaction beyond a fee for entrance to the pier is allowable.

Of course, fees charged a visitor, after entering the pier, in addition to a feé paid for entrance to the pier, are not entrance fees, and such charges, not being entrance fees, are in violation of the literal words of the covenant.

In Atlantic City v. Atlantic City Steel Pier Co., 62 N. J. Eq. (17 Dick.) 139, involving a construction of. the same covenant with respect to a charge of an additional fee for reserved seats on the pier and additional fees for entrance to an enclosed hall on the pier, Vice-Chancellor Eeed in disposing of the question said: “I am constrained to the conclusion that these charges are in violation of the terms of the agreement. Beading the entire clause, not merely that part directed against the sale of commodities, but including the limitation in respect to what should be charged, the natural construction of the agreement seems to me to be that any additional charge for admission to any part of the pier, after the payment of the entrance fee, conflicts with the restriction which the grantors imposed upon themselves, namely, that they should be confined to charging only an entrance fee. It seems too obvious for discussion, that the fees charged after the visitor has entered upon the pier are not entrance fees. If not, then the purpose of the agreement, as well as its literal words, forbid this collection. It is said on the part of the defendant that tire covenant contained in the proviso is an enabling and not a restrictive covenant. It is, however, perceived that the agreement itself contains a clear restriction against placing any obstruction upon the ocean side of the boardwalk. The proviso merely modifies the restriction by relieving the grantor from it, so far as to permit the building of a pier, of a certain length upon which certain things shall be done. The restriction is operative, except in so far as the proviso relieves it of its operative force. The grantor, therefore, must show that its structure, in form and in use, comes within the exceptive words of the proviso.”

In the present case the learned vice-chancellor said that the “hiring a pair of skates for a limited period to a person going on the pier hardly falls within the description of a sale of ‘any commodities/ nor can it be said to be a charge of an additional entrance fee,” and concluded, therefore, that the covenant was not violated.

While the charge for hiring skates and cheeking garments on the pier may not be considered as an additional entrance fee, yet it is certainly a charge made in addition to an entrance fee, after a person has entered upon the pier and paid his entrance fee, and is a charge unassociated with the charge for entrance to the pier, and is in direct violation of the language of the covenant that the pier owners “shall be confined to charging only an entrance fee.” If the extra charge cannot be classified as an entrance fee, then it must be an additional charge and such a charge as is forbidden by the language of the covenant.

There is no distinction, from the viewpoint of the covenant, between the character of the charge for the hire of skates and the charge for the hire of reserved seats such as was properly held in Atlantic City v. Atlantic City Steel Pier Co., supra, to be a violation of the covenant.

The fact that in the case sub judice the payment of the entrance fee entitled the visitor to go to any part of the pier and to hear and see everything there provided for the entertainment of visitors does not alter the construction, of the covenant. It will not do, in view of the language of the covenant, to say that, because the visitor is not satisfied with the entertainment provided and desires to hire a pair of skates, he must pay for them. Under such a construction the meaning and operative force of the covenant would be made to depend upon the notion or fancy of the visitor to the pier as to the kind of entertainment he desires. The rights of the parties can rest upon no such basis, but must depend upon a proper construction of the covenant of the easement deed.

But it is insisted by the defendant that the deed is ultra vires and the covenant therefore unenforceable.

Substantially the same objection was raised by the defendant in the case of Atlantic City v. Atlantic City Steel Pier Co., 62 N. J. Eq. (17 Dick.) 139. The vice-chancellor there says: “This insistence is grounded upon the terms of the supplement of 1890, by which the city is authorized to accept any dedication for the purpose of enabling the city to open and lay out a street and build and improve a boardwalk. It is argued that while a dedication of the land upon which a boardwalk is to be built is within the power so granted to the city, an agreement in respect to other lands is entirely aside from the provisions of the act. The language of the act is broad. It does not confine the city to the acceptance of land upon which the walk is to be constructed. It may accept any lands or rights for the purpose of making any improvement in or to the street or walk. But assume that the act is as narrow as the defendant insists, it cannot be successfully contended that Atlantic City, as trustee for the public, would not have the right to accept a dedication of lands for a public purpose without express legislative authority. Such a grant is effectual even without trustees. All the land oceanward of the boardwalk could have been dedicated by its owners as a park or boulevard or public bathing ground, or for any other purpose. Now, the agreement, as I construe it, contains a grant to the public of a right in the nature of an easement. It, indirectly by a negative covenant, grants a right of light, air and view over and across the oceanward land from the boardwalk. This right is limited by a reservation to the donors of the privilege of placing thereon a certain kind of structure. And the uses to which those structures shall be confined is defined, for the purpose of regulating the kind of structure and the number of structures which could be, and would likely be, erected. The owners have themselves limited the uses to which such structures may be put. Such a restricted grant, in my judgment, the city may accept, and, as the representative and trustee of the public, may invoke the judicial arm of the government to protect.”

We think that the city of Atlantic City, as trustee for the public, has the right to accept a deed for a grant to the public of a right of way over lands on the ocean front for the purpose of a boardwalk, the deed containing a negative covenant granting in effect also a right of light, air and view over and across the oceanward land from the boardwalk, notwithstanding this latter right is limited by a reservation to the donors of the privilege of placing thereon a certain kind of structure, when the use to which those structures shall be confined is defined for the purpose of regulating the kind of structure and the number of structures which could, and would likely be, erected. And so are the authorities. 20 Am. & Eng. Encycl. L. (2d ed.) 1186, 1187; 13 Cyc. 459; 460.

It is again insisted that the easement deed was never accepted by the city.

Acceptance may be shown by an instrument in writing executed by the proper authorities on behalf of the public or by the use and improvement of the property dedicated, by thecduly-authorized authorities. Abb. Mun. Oorp. 1767. In the present case acceptance is shown by both.

All other objections raised have been already sufficiently answered.

The complainant is entitled to have an injunction restraining the defendant, its officers, servants, agents and employes, from charging visitors to its pier any fee or sum of money for the hire and use of roller skates, or for checking garments, in addition to an entrance fee to the pier or after entrance to the pier.

The decree must therefore be reversed, and the record remitted to the court of chancery in order that a decree may be made in •accordance with this opinion.

The complainant is entitled to costs in the court of chancery •and in this court.

For affirmance — None.

For reversal — The Chancellor, Chief-Justice, Garrison, ’Swayze, Trenci-iard, Parker, Bogert, Vroom, Green, •Gray, Dill — 11.