text:
    Durward B. Kennedy, complainant-appellant, v. Adela J. Smith and Alma L. Smith, defendants-respondents.
    [Decided November 20th, 1922.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Backes, who rendered the following opinion:
    “I do not think that further consideration will change the views I entertain and the conclusion I have reached. The bill is filed to recover so-called secret profits alleged to have been made by the defendants while acting as agents for the complainant in the sale of his property.
    “In 1910 or 1911 the defendants, the Smith sisters, owned the tract of land upon which the Smith academy, in Passaic, was later erected. They bad some money—very little—■ 'that went into the building. Their brother-m-law, Kennedy, the complainant, advanced them sufficient to complete it—$31,196.68. To secure him the Smith sisters made an absolute conveyance of the land to him, and he, either contemporaneously with the execution of the deed,, or shortly afterwards, gave them a declaration whereby he agreed to convey to them the property if they repaid in installments as set out in the agreement, the money he had advanced, and interest, and the carrying charges of the real estate, taxes, assessments, &c. None of the principal has been repaid. The interest was paid up to 1916.. The first few years of the operation of. the academy by the Smith sisters were not prosperous, but the receipts were sufficient, at least, to hold down the carrying charges. They had had an established business in a nearby place—the Passaic club—and had taken it from there to their new building. The war came on and entertainments such as they carried on fell off, and' they had quite a struggle to keep afloat. When I speak of the period of the war I mean from the time the Germans started in 1914. During the war entertainments were intermittent, and the business was carried on at a loss. It revived to some extent after the boys came back. The complainant and defendants were intimately friendly when .the complainant advanced the money. He had their prosperity at heart, and they were properly appreciative of what he was doing for them, but, withal, while he advanced the money he was also careful to see to it that he was assured of its return with six per cent, interest. He was not a benefactor without a sense of self-preservation. So long as the Smith sisters were'able.to pay the interest he was apparently content, and their relations, while not perhaps as cordial as. they had been when he loaned the money, continued friendly enough until his ‘dear’'sisters stopped paying in 1916. From then on he was insistent for his money, and they were unable to pay—not even the interest. By 1919 or 1920 their friendship had come to an end—decidedly. The feeling between them was the very antithesis of the spirit of 1911, and ivas marked by Kennedy’s bringing an action to eject them from the academy, and a suit to foreclose the mortgage on their home. Judgment was entered in the ejectment suit, and pending an appeal to the court of errors and appeals he filed a bill in this court for the appointment of a receiver. I speak of these things simply to show that there was no love and affection between them, and whatever of confidence there had been had vanished. I think nothing emphasizes this better than the foreclosure of the mortgage on their home. . Now, it was while the parties were in that antagonistic mood that Mr. and Mrs. Drosness came on the scene. They wanted a business such as the Smith sisters had, and in Passaic, and they made them an offer of $42,000—$27,000 for the building and $15,000 for the equipment of the academy—the fixtures and appliances— and good-will. Kennedy had no interest or lien on the equipment. While the negotiations were carried on on the basis of $42,000 for the entire plant, the oiler was made and entertained as so much for the building and so much for the business, and the figures were as I have just given them. The Smiths submitted the offer of $27,000 to Kennedy, and he said, using his own language, ‘Nothing doing/ He says that immediately Miss Alma Smith raised the figure to $30,000. I doubt that the raise was at that time. I think, and the indications are, it was in a later talk over the ’phone; but be that as it may, Kennedy expressed a willingness to take his principal, $31,196.68, after the offer was raised from $27,000 to $30,000. The raise was not by the Drosnesses. All they would give was $42,000 for the place, and they were not interested in its distribution. The Smith sisters raised the figure to $30,000, and they eventually met his demand of $31,196.68 by offering to pay the additional $1,196.68 out of their own clothes to get the deal over with the Drosnesses. Kennedy was to get .the principal he had advanced and forego his interest for 1916. Kennedy says he was suspicious that they were getting more than $30,000. I think he knew they were, for he knew they had valuable paraphernalia and that it went with the sale. He says he put-them on their honor that $30,000 was all they were getting and that they abused his confidence. There was no trust or confidence in fact—that is plain enough. He placed no trust and he had no confidence in them. His conduct, his demeanor, his letters, all indicate that he had no faith in them, did not trust, and did not confide in them. If there was no confidence reposed, in fact, I fail to see how, in the circumstances, a trust relation can be raised in law. Kennedy was awake to the fact that they were selling out and that they were driving a bargain with him for the least he would take. The fact that they offered to pay Kennedy $1,196.68 out of their own pockets to meet his demand, shows to my mind that he understood that they were dealing with him, not acting for him.
    “Putting them on honor did not create a relation of trust and confidence. Not in this case, where the parties were at daggers’ points and ready to chew each other up, figuratively speaking. The negotiations with the Drosnesses were pressing and had to be closed, and Kennedy was holding out. Now, whatever Kennedy may have thought about agency or confidential relationship before Sunday, November 6th, he must have been completely disillusioned by what then occurred. That Sunday afternoon the Smiths and their lawyer, Mr. Eoulds, 'met, by appointment, Mr. Heine, Kennedy’s counsel. Prior to that time Mr. Heine and Mr. Eoulds had been trying for a settlement. They were both tired of the long drawn-out litigation. At that meeting the Smith’s presented an agreement for Kennedy’s signature, that he sell to them or their appointees, I do -not recall which, the academy property for $31,196.68. They refused to tell Mr. Heine from whom they had the offer, or what the offer was. They claimed that on previous occasions Kennedy had mixed in and destroyed their prospects. They said to him, in effect, ‘We will give Kennedy $31,196.68; we will not tell who the purchaser is, nor how much we are getting. It is none of your affairs. We make no representations of any kind. Here is the contract. Sign it for your client or let it alone. If you do not sell, well and good, we will quit, and you may take the building under your judgment.’ They say they had in mind to remove the paraphernalia, I think, back to their old. stand, the Passaic club. Mr. Heine, not willing to assume the responsibility, talked with his client over the phone, and the proposition was put up to Kennedy, as it had been put up to ]\Ir. Heine, by one of the Smith sisters or Mr. Heine, or possibly by both, substantially in the words I have just given, and Mr. Kennedy directed his counsel to take the offer, and, under instructions, Mr. Heine executed the contract. Counsel says, procured under pressure! Well, maybe so, but certainly that cannot be said of the one Mr. Kennedy executed later, for a duplicate was sent to him and he signed it later in the week. He had plenty of time to reflect. Yes! There may have been agency in the sense that the Smiths were conducting the sale of Kennedy’s property, but not as brokers for Kennedy, and assuredly there was no relation of trust and confidence, or any evidence of breach of faith or honor. They stood at arms’ length— antagonistic. I fail to see any concealment in the statement to Kennedy that they would make no representation, that they would not tell who the purchaser was, or how much they were getting. They revealed to him that they were concealing from him certain facts and they gave him, frankly, information of their attitude. He-had his choice. He did not have to sell. And with a full realization and appreciation of their attitude he made the bargain, and. later on it w'as carried out by the Smiths with the Drosnesses, and Mr. Kennedy joined in the deed and got his money.
    “Now, let us look further to see whether the Smith sisters, assuming they were made the agents of Kennedy in the sale of this property, made a secret profit. The law is well settled that an agent cannot make a secret profit and retain it against the claim of his principal. The law jealously guards any relation of trust and confidence. The party in whom the confidence is reposed must dischargé his duty zealously and with the utmost fidelity. Suppose, I say, we take the view that the complainant had made out his claim that the Smith sisters were his agents. Is there any evidence that they made a profit? Is there anything to show that the Smith academy was worth more than $30,000, or that $12,000 is more than the value of their equipment, their paraphernalia? We must not overlook the fact that the purchasers appraised the academy at $27,000. I cannot agree with counsel’s argument that Mr. Kennedy, when informed by the Smiths that they had a purchaser for Smiths’ academy, understood and believed that he was to get whatever the purchasér paid for the academy as it stood, equipment and all. He had no lien upon the personal property, as' I have said, and he, of course, had no rights to the proceeds, and I am quite satisfied that he did not. believe he was entitled to, or was to receive, any part of it. The testimony is that the equipment was worth $10,500 plus. That is the value placed on it by Miss Adella Smith, a competent judge, albeit her judgment may be biased. She says that was the market value of the property that they turned over to the Drosnesses. There is no testimony to refute it—none to show that it was worth less. There was a witness from the Spaulding company who informed us of what we all know, that articles of this kind depreciate from use, and who also told us that sporting goods articles have increased over ante-war prices fifty to sixty per cent., so that the depreciation is more than counterbalanced by the advance in cost. But, be that as it may, there is the testimony, and the only testimony in the case, that the things were worth $10,500. That leaves but $1,500 for the good-will, which was an important factor in the sale. The Smiths have been for years engaged in the enterprise and have an established business and an enviable reputation in Passaic as 'entertainers. Before the Smith academy was built they carried on, for some ten years, at the nearby Passaic club. Their clientele, built up year by year, until thrown out of joint .by the war, was renewed after the war, and was of the best. At any rate, the purchaser regarded the good-will as an asset of considerable value. My opinion is that $12,000 was but a fair price for the tangible personal property and the good-will of this going concern, crippled as it was. There is nothing in evidence contrary.
    “The complainant has failed to make out his case and the bill will be dismissed.”

      Messrs. Heine, Boslwiclc & Braclner, for the complainant-appellant.

      Mr. Andrew Foulds, Jr., for the defendants-respondents.
   Pee Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion rendered in the court below by Vice-Chancellor Backes.

For affirmance — The Chiee-Justice, Swayze, Tren-OHARD, BERGEN, MlNTURN, KALISCH, BLACK, KaTZENBACH, White, Williams, Ackerson, Gardner, Van Buskirk— 13.

For reversal—None.


source: Caselaw Access Project

author: Walker, Chancellor.

license: Public Domain

text:
    Joseph Clinton Edwards, complainant, v. Joseph Stein et al., defendants.
    [Decided January 3d, 1923.]
    1. As a purchaser at a judicial sale, not a party to the suit, is made such by his purchase so far as questions arising from the sale are concerned, so also an assignee from him, mediately or immediately, thereby becomes a party for the same purpose, and is entitled to intervene without special application to be made a party to the suit.

      2. The sergeant-at-arms of the district court of Atlantic City, on a sale under an execution out of that court at the suit of E. L. J. against J. C. E., made a bill of sale to W. L. .J., his executors, administrators and assigns, of a decree in chancery obtained by said J. C. E. against J. S. in the above case, and W. L. J. assigned that, decree, so purchased by him at said sale, to W. I. S., who has requested the clerk in chancery to enter an acknowledgment of satisfaction upon the record of the decree, delivering to him a warrant in writing therefor. W. I. S. relies upon the supplement to the act respecting executions (P. L. 1915 p. 182), which provides, inter alia, that rights and credits of a defendant in execution may he levied upon, taken and sold, by virtue of such a writ; and that the term rights and credits includes all such as may he attached, hy -writ of attachment against non-resident debtors, and that such rights and credits shall be levied upon and taken in the manner in which property is attached under writs of attachment, and no sale shall be made of such rights and credits, unless by leave of the court or a judge.—Held, the clerk in chancery,-when requestéd to mark a decree “satisfied” by an assignee of the same, must be assured that it has been lawfully assigned, and he is entitled to be directed to do so by order of the court, to the end that he may' be afforded plenary protection with respect to the dis- , charge • of such an unusual and extraordinary duty. Except in the performance of merely routine duties, such as filing and docketing papers, enrolling proceedings and decrees, making- certified copies, &c., the clerk is entitled for his protection to an order directing him.
    8. In the bill of sale from the sergeant-at-arms to W. L. J. it does not appear that any levy was made or attempted to be made upon the decree in chancery, nor could any have been made except under section 2 of P. L. 1915 p. 182. The Attachment act {.Comp. Stat. p. 137 § ?') prescribes the mode of executing a writ of attachment, in pursuance of which the officer must go to the garnishee and give him notice.
    4. A garnishee is one who has property or money in his possession belonging to a defendant; and is so called because he has warning or notice of the attachment.
    5. Besides notice to' the garnishee, potice must be given to the debtor in an attachment suit, to-the end that he may have an opportunity to appear and defend himself; and while it does not appear that all of the proceedings requisite to obtaining judgment in attachment against a debtor whose rights and credits have been levied on under an execution out of a court of law, in virtue of P. L. 1915 p. 182, have to be taken in order to subject those rights and credits to sale under execution, pursuant to the statute, nevertheless, the owner of such rights and credits is entitled to notice of their seizure through levy or attachment, so that he may take proceedings and have an opportunity to show either that such rights and credits were not the subject of levy at all or that the levy was irregularly and unlawfully made, &c., so that, if levy be properly made on such rights and credits as could be lawfully, sold, their owner, the judgment debtor, having notice, would have an .opportunity to protect himself at the sale. Not only that but the necessity for notice arises upon the face of the supplement to the act concerning executions. Eor it is therein provided in section 10 that after rights and credits shall have been levied upon and taken, then, upon application of the’ plaintiif or defendant (and the defendant here was J. O. E., whose decree was attempted to be sold away from him apparently without notice), a judge of the court out of which the execution issued may in his discretion appoint a receiver of the same (rights and credits). It is made the duty of such a receiver to liquidate the same by collection or otherwise, and after paying the amount due on the execution to pay the balance into court. .1. O. E. was presumably deprived of his right to apply for a receiver to protect his rights in and to his decree, for want of notice of the levy on and proceedings to sell it under the district court execution.
    6. District courts are special statutory tribunals, whose procedure is prescribed by act of the legislature, and they are given power to enforce their judgments by executions, and they are also given the power to issue writs of attachment and enforce them by judgments, &c., and those .proceedings are to be strictly pursued in such courts in accordance with their own statutory provisions. Qumre: Does P. L. 1915 p. 182, which is a supplement to the act respecting executions (and a supplement is a mere addition to an original act), apply to district courts?
    7. Neither a decree in chancery nor judgment at law nor money due on such a decree or judgment is subject to attachment; but moneys in the hands of a sheriff raised in pursuance of such a decree or judgment, or paid into court on behalf of a party to a suit, are liable to attachment.
    8. (1) Because it does not appear that the requisite proceedings were taken to authorize and empower the sergeant-at-arms of the district court to sell the chancery decree, and (2) because a decree in chancery is not subject to levy and attachment in satisfaction of an execution, the clerk in chancery will be directed not to satisfy the decree herein, but to return the warrant or satisfaction .piece to the applicant.
    On application to mark decree satisfied.

      Mr. Albert 0. Abbott, for the application.
   Walker, Chancellor.

The complainant, Joseph Clinton Edwards, on January 19th, 1920, obtained a final decree in the above-stated cause against the defendant Joseph Stein for the sum of $8,72-1.37, together with costs, &c., which decree was filed January 29th, 1920, as by the record appears. On February 16th, 1921, Enoch. L. Johnson recovered a judgment against Joseph Clinton Edwards, the above-named complainant, in the district court of Atlantic City for $323.54. The clerk in chancery has been handed a warrant of satisfaction of the decree above mentioned, made by William I. Segal, which warrant recites the making and filing of the decree; that it was sold, assigned and transferred on May 31st, 1922, by the sergeant-at-arms of the district court of Atlantic City, by virtue of a sale under execution issued out of the Atlantic City district court, on the judgment above mentioned, to W. Lindley JeEers, who, by bill of sale of August 26th, 1922, sold, assigned and transferred the decree so purchased by him, to William I. Segal, who has received satisfaction for the same and desires and authorizes the clerk to enter an acknowledgment of satisfaction upon the record, the signed warrant being a discharge in that behalf.

As a purchaser at a judicial sale, not a party to the suit, is made one by the purchase so far as questions arising from the sale are concerned (Collins v. Kiederling, 87 N. J. Eq. 12), so an assignee from him, mediately or immediately, thereby becomes a party for the same purpose, and is entitled to intervene without special application to be made a party to the suit.

The cleric in chancery having sought the advice and direction of the court with reference to his duty in the premises, Segal now moves that the clerk be directed to enter satisfaction of record.

The applicant relies upon the supplement to the act respecting executions (P. L. 1915 p. 182), which provides, inter alia,, that rights and credits of a defendant in execution may be levied upon, taken and sold, by virtue of the writ; and that the term “rights and credits” includes all rights and credits which may be attached by writ of attachment against nonresident debtors, and includes rights and credits of an equitable nature; that such rights and. credits shall be levied upon and taken in the manner in which property is attached under writs of attachment, and no sale shall be made of such rights and credits unless by leave of the court or a judge.

Now, the clerk is requested by the present assignee of the purchaser of the decree to enter an acknowledgment of satisfaction upon the record of the decree in this case, and for his protection he must be assured that the decree has been lawfully assigned; and, when the warrant of satisfaction does not emanate from the complainant who obtained the decree, but from one who has obtained an assignment in or through legal proceedings, the clerk is entitled to an order of the court to mark the decree satisfied, if he is to act in execution of the warrant, to the end that he may be afforded plenary protection. Except in the performance of merely routine duties, such as filing and docketing papers, enrolling proceedings and decrees, making certified copies, &e., the clerk is entitled, for his protection, to an order directing him, and this in such cases as paying out moneys from the depository of this court, &e., including the marking of decrees satisfied, at least where there is anything of an extraordinary character on the face of the papers, as in this case.

The applicant has submitted the bill of sale of the decree made by the sergeant-at-arms of the district court. It recites that a certain execution issued out of the district court of Atlantic Cit3r, directed to him, the sergeant-at-arms, commanding him to levy and make of the goods and chattels of Joseph Clinton Edwards, the sum of, &c., by the judgment of that court rendered against Edwards; and that to the end that the sale of the goods and chattels should be made, he, the sergeant-at-arms, by public advertisement set up at three or more public places in Atlantic City, “to wit, one each at (blank),” which notice stated that the goods and chattels of the defendant, Edwards, would be exposed to sale at public vendue, &e.; and at the time and place appointed and advertised, he openly and publicly struck off and sold the final decree in this cause to W. Lindley Jeffers, the highest bidder for the same, giving no notice that the same, as a right and credit, would be offered for sale. In other words, there appears to have been no notice that the decree would be offered for sale under the execution. The bill of sale then proceeds to acknowledge the receipt of $50, the purchase price, and, in form, grants, bargains, sells. assigns, transfers and conveys to Jeffers, his executors, administrators and assigns, the above-described property (decree) to have and to hold, &e.

Levy upon goods under an execution is a prerequisite to the advertising and sale of them b3r the sheriff or other officer.

Now, in the bill of sale from the sergeant-at-arms to Jeffers it does not appear that any levy was made or attempted to be made upon the decree in chancery, nor could a levy have been made except under section 2 of the supplement mentioned, wherein it is provided that the term “rights and credits” includes all those which may he attached by writ of attachment against non-resident debtors, and such rights and credits shall be levied upon and taken in the manner in which property is attached under writs of attachment.

The Attachment act (Comp. Stat. p. 137 § 7) prescribes the mode of executing a writ of attachment. It .is, so far as pertinent, by the officer going to the person or house of the person having the custody or possession of the defendant’s property, and in the presence of at least one credible person then and there- declaring that he attaches the rights and credits, &c., of the defendant, and, with the assistance of a discreet and impartial freeholder, making a just and true inventory. This is the “levy” meant by the supplement to the Execution act provided for in the case of “rights and credits.” In attaching rights and credits the officer must go to the garnishee and give him notice of the attachment. Tomlinson v. Stiles, 29 N. J. Law 426. A garnishee is one who has property or money in his possession belonging to a defendant; and he is so called because he has had- warning or notice of the attachment. Bouv. Law Dic. (Rawle’s rev.) 870.

This is not all. The owner of the goods must have an opportunity to he heard and to contest the plaintiff’s action in seeking to subject his rights and credits to sale. The Attachment act, in section 20, provides that after the return of the writ an order shall be made for publication of notice of the attachment in a newspaper or newspapers, and judgment shall not be entered until proof be made of such publication. And section 16 provides that any defendant in attachment may at aOT time before judgment enter his appearance in the clerk’s book and give notice of his willingness to accept a declaration in the suit, whereby it shall proceed 'in all respects as if commenced by summons, &c. Now, this is a provision that the owner of rights and credits shall have an opportunity to protect himself, and, if possible, to save his property. To wrest it from him without affording him such opportunity would be to take his property without due process of law. I do not say that all of the proceedings requisite to obtaining a judgment in attachment against a debtor whose rights and credits have been levied on under an execution, out of a court of law, in order to subject those rights and credits to sale under the statute, would have to be taken. Nor am I called upon to decide that question. But I do hold that the owner of “rights and credits” is entitled to notice of their seizure through lew or attachment, so that he could take an appropriate proceeding to show either that such rights and credits, as, for instance, a decree of a court of equity or judgment at law, were not the subject of levy at all, or that the levy was iriegularly and unlawfully made, or what not. If, however, the levy or attachment were properly made on such rights and credits as could be. lawfully sold, the judgment debtor who owned the rights and credits, by reason of having notice, would have an opportunity to see tfyat securities of value were not sacrificed for inadequate consideration; in other words, he would at least have an opportunity to protect himself at the sale. Not only that but the necessity for notice arises upon the face of the supplement to the act concerning executions. For it is therein provided, in section 10, that after rights and credits shall have been levied upon and taken, then, upon application of the plaintiff or defendant (and the defendant here was Edwards, whose decree was attempted to be sold away from him apparently without notice), a judge of the court out of which execution issued may in his discretion appoint a receiver of the same (rights and credits). It is made the duty of such receiver to liquidate the same by collection or otherwise, and after paying the amount due on the execution to pay the balance into court. • Edwards was presumably deprived of Ills right to apply for a receiver to protect his rights in and to his decree], for want of notice of the levy on and proceedings to sell it under the district court execution.

Of course, no real injustice may he done to Edwards. He may have had knowledge and his decree may be practically worthless, but that does not appear, as it is not shown that there was any levy on the decree through proceedings tantamount to an attachment or otherwise, or any leave of the district court obtained for the sale of the decree. But this is not all, for, by reason of what is now to be stated, the attempted sale of the decree is void for another and a fundamental reason

There are sections in the act respecting executions which by their terms apply to those writs out of any court, such as section 10, which provides for exemption of personal property to certain debtors, or where district courts are specially mentioned, as in section 23, compelling discovery. The district courts are special statutory tribunals whose procedure is prescribed by act of the legislature, and as those tribunals are given power to enforce their judgments by executions and are also given power to issue writs of attachment and enforce them by judgments, &c., those proceedings are to be strictly pursued in such courts in accordance with their own statutory provisions. The act concerning executions existed long prior to the establishment of district courts and was and is regulative of the practice on writs of execution issuing out of courts of general jurisdiction whose procedure is according to the course of the common law, except where by its terms it may extend to executions issued .out of any statutory tribunal, the act creating which does not legislate on the particular subject or subdivision thereof. As already stated, the act of 1915 is a supplement to the act respecting -executions, and a supplement is a mere addition to the original act. See Bradley, &c., Co. v. Loving, N. J. Law 227, in which Chief - Justice Beasley observed (at p. 228) that supplements to laws from their very nature are designed as complements to their antecedents—the original acts. It is true that the Practice act applies to district courts, but Only in a limited way, and that by virtue of section 68 of the Practice act itself. 2 Comp. Stat. p. 1977. See Rossi v. Benedict, 118 Atl. Rep. 713. It is unnecessary to decide whether the supplement to the Executions act of 1915 applies to district courts, because, even if it does, the requisite proceedings for the sale of the decree in chancery in this cause were not taken, and, for that reason alone, the sale is void.

Quite aside, however, from any non-applicability of the Execution act, original and supplemental, to the district courts, the attempted sale of the decree in this cause is devoid of effect. While the District Court act provides for the issuance and execution of attachments in substantially the same manner as in the act for the issuance of such writs out of superior courts of common law jurisdiction, nevertheless, ,no proceeding required in an attachment case appears to have been taken, nor any leave obtained from the district court to sell the decree. This provision in the statute seems to be meant to protect the defendant from the loss of a valuable right and credit by requiring leave of the court to authorize its sale, which doubtless the judge would not give unless he was shown that the defendant had notice so that he could protect himself at the sale. In this case it is not shown that any service of the writ of execution, which, in effect, would be a levy, has been made; and how could it have been made on the clerk in chancery at Trenton, the custodian of the filed decree, and the record thereof, as garnishee, by the sergeant-at-arms of the Atlantic City district court? I assume that the clerk in chancery would be the garnishee in a case where the decree itself was actually to be levied upon, while the defendant in the decree, owing the money due under it, would be the garnishee if the money so due were attempted to be levied on.

While the proceedings under the execution out of the Atlantic City district court might be shown to this court by amendment, according to the fact, nevertheless, from what has preceded and what is now about to be mentioned, the sale of the décree is totally devoid of legal foundation.

Only rights and credits which are subject to attachment may be sold under the act in question. It so provides in express terms. Now, money due on a decree in chancery is not the subject of an attachment. Black v. Black, 32 N. J. Eq. 74, 75. In Conover v. Ruckman, 32 N. J. Eq. 685, Vice-Chancellor Van Fleet remarked (at p. 687) that this court had recently held that money due on a decree is not the subject of attachment, citing Black v. Black, supra. The court of errors and appeals, in reversing this decree (S. C., 33 N. J. Eq. 303), held that moneys in the hands of a sheriff raised, by him in pursuance of a decree of this court are liable to seizure by virtue of a writ of attachment; and Chancellor Runyon, in another case between-the same parties (Conover v. Ruckman, 34 N. J. Eq. 293, at p. 295), observed that that was the only question decided on the appeal, namely, that money raised on an execution in pursuance of a decree was attachable.

The court of errors and appeals’ decision in Conover v. Ruckman, 33 N. J. Eq. 303, has made and settled the law of this state upon this subject. Mr. Justice Depue, afterwards chief-justice, speaking for the court, said (at p. 310) that in Black v. Black, 32 N. J. Eq. 74, the writ of attachment was served on the defendant in a chancery suit against whom there was a money decree in favor of' the defendant in the attachment, and that service of the writ in that manner directly interfered with the power of the court of chancery to carry into effect one of its own decrees, and the service was declared inefficacious. And (at p. 311) it was held that service of a writ of attachment by the sheriff having the money in hand will have no greater tendency to create embarrassments or interfere with the proceedings on a decree in chancery than a judgment at law, there being no material difference in the nature of either adjudication. Later, Vice-Chancellor Bird, in Trotter v. Lehigh Zinc and Iron Co., 41 N. J. Eq. 229. held that money paid into court on behalf of a party to a suit was liable to attachment; and the decree was affirmed on his opinion. S. C., 42 N. J. Eq. 456. In another case of Conover v. Ruckman, 36 N. J. Eq. 493, Vice-Chancellor Bird held that the writ of attachment may be lawfully served on an officer holding moneys arising from a sale pursuant to a decree of this court, as was settled in the case of Conover v. Ruckman, 33 N. J. Eq. 303.

The reason given in the cases why decrees and judgments are not in and of themselves subject to attachment is that thereby the control of the courts over their own processes would be interfered with and the administration of justice embarrassed. Chief-Justice Green, in Shinn v. Zimmerman, 23 N. J. Law 150 (at p. 152), said that there are cogent considerations founded both on the due administration of justice and on the protection of the rights of the debtor and garnishee, against the liability to attachment of judgment debts; that the garnishee’s property is liable to immediate seizure and sale under the execution upon the judgment, while at the same time he is made liable for the amount of the judgment to the attaching creditor.

Eor the reasons above set out, namely (1), that it does not appear that the requisite proceedings were taken to authorize and empower the sergeant-at-arms of the district court to sell the chancery decree, and (2) because a decree in chancery is not subject to levy and attachment in satisfaction of an execution, the clerk in chancery will be advised that he has no power to enter satisfaction on the record of the decree in question, and he will be directed to refrain from so doing, and to return to the applicant’s solicitor the warrant of satisfaction and other papers delivered to him in this matter.


author: Walker, Ci-ianoellor.

text:
    In the matter of condemnation of lands of Eleanor Biggar Robinson.
    [Decided February 20th, 1923.]
    1. The commissioners of assessment awarded E. >B. It. $4,839, as damages for the taking of land owned by her, for the laying out and opening of a public street. The report was confirmed, the amount tendered and refused, and' the sum paid into this court in pursuance of an order made by virtue of the statute. E. B. R. petitioned for the payment of 'the award out of the depository of this court, without notice to the borough, which payment was made to her, although she in the meantime took an appeal and the jury reduced the damages to $2,500, which facts were not disclosed to this court at the time the award was applied for and withdrawn. The borough now petitions to vacate the order and for repayment to it by E. B. R. of $2,339, the difference between the amount of the award and the amount .of the verdict and judgment.—Held, that under chapter 152, laws of 1917 (P. L. 1917 p. 819), known as the Home Rule act, amended by chapter 195, laws of 1921 (P. L. 1921 p. 511), which provides, inter alia, that the jury, on appeal, shall assess such damages anew, and that the judgment entered on such appeal shall fia the amount to be recovered by the appellant, the borough is entitled to such repayment by E. B. R., with interest and costs.
    2. Jersey City v. Hamilton, 70 N. J. Law 48, distinguished.
    On petition to vacate order for payment of award.

      Mr. Wendell J. Wright, for the borough of Edgewater, petitioner.

      Mr. Louis Ogust, for Eleanor Biggar Robinson, respondent.
   Walker, Ci-ianoellor.

The commissioners of assessment of the borough of Edge-water, by report dated September 28th, 1921, awarded Mrs. Robinson the sum of $4,839 as damages for the talcing of certain lands owned by her, for the laying out and opening of a public street. This report was confirmed by the borough council on November 1st, 1921, and thereafter the amount of the award was tendered to Mrs. Robinson, who refused to accept the same; and on November 26th, 1921, the sum awarded was paid into this court in pursuance of an order made on that day by virtue of the statute. On April 28 th, 1922, Mrs. Robinson presented to this court a petition reciting the making of the award, the payment thereof into court, and praying that it be paid to her; and this without notice, to the borough. In pursuance of such prayer an order for payment of the deposit was duly made on the same date, and the fund was thereupon paid to her out of the depository of this court.

On December 12th, 1922, the borough of Edgewater discovered that the amount so deposited had been withdrawn, although in the meantime Mrs. Robinson had taken an appeal from the award, which had been by a jury reduced to the sum of $2,500. Nor were these facts disclosed to this court at the time that the award of $4,839 was applied for and paid out. The borough now petitions this court to vacate the order for the payment to Mrs. Robinson of the fund, and prays that it may be decreed that she pay it or into this court, the sum of $2,339,'the difference between the amount of the award and the amount of the verdict and judgment thereon, with costs.

The landowner, Mrs. Robinson, seeks to excuse and justify her withdrawal from this court of the award deposited, upon the doctrine of Jersey City v. Hamilton, 70 N. J. Law 48, wherein it was held that, “Under the Eminent Domain act of March 20th, 1900 (P. L. 1900 p. 79), as it stood before the amendment of 1903 (P. L. 1903 p. 342), the payment by the condemning corporation of the amount awarded by the commissioners, whether it was paid into the court of chancery or directly to the landowner, barred any appeal from the award on behalf of the corporation.”

In that case the landowner applied to the circuit court for a dismissal of the city’s appeal because it-had paid the money into the court of chancery, which was claimed to' be a voluntary payment for the purpose of acquiring the right of immediate possession, and, therefore, by the rules of the common law, no return of any part of the money could be exacted. The supreme court, in its opinion, observed that the appellant did not dispute the common law doctrine and properly treated the question as one of statutory construction. So it was, and the statute construed in that pase indicated, said the court (at p. 51), that the legislature regarded the voluntary payment and receipt of the award as normally inconsistent with further litigation between the parties over the sum to be paid. Now, in the case at bar, the award paid into court was not withdrawn pending appeal, but after the appeal was decided and when a different status had been created. And the court, in Jersey City v. Hamilton, also' observed that 'the authority which the statute conferred upon the condemning corporation to take possession of the land on paying the amount of the award to the owners, was given to private and public corporations in the same words; that under our constitution it could not be conferred upon private corporations unless compensation wras first made to the owners.

However, the power to take possession before compensation made can, by the legislature, be constitutionally conferred upon municipal corporations; and by the act under review here the power is given to municipal corporations alone.

In Loweree v. City of Newark, 38 N. J. Law 151, it was held: “It is not necessary that compensation should precede the- actual appropriation of lands for a public use by the state, or by a municipal corporation by state authority. It is sufficient that an adequate remedy is provided, which the party may resort to on his own motion to recover compensation. In this respect there is a distinction between a taring by a public municipal corporation, and by an individual or private corporation.” See, also, Redman v. Phila., M. & M. R. R. Co., 33 N. J. Eq. 165; Wheeler v. Essex Pub. Road Board, 39 N. J. Law 291; Mulligan v. Perth Amboy, 52 N. J. Law 132; Leuly v. West Hoboken, 54 N. J. Law 508, 510; Johnson v. Ocean City, 74 N. J. Law 190.

Now, bearing in mind that the condemnation act construed in Jersey City v. Hamilton placed a municipal corporation on the same footing as a private one, we will examine the provisions of 'the act under which the condemnation proceedings in the case at bar were had, to ascertain whether the municipality was restricted in taking possession until compensation made, and whether, consequently, payment into court of the award of the commissioners precluded the municipality from the benefit of any reduced amount of damages that might be found by the jury on the landowner's appeal.

The act in question is an act concerning municipalities, chapter 152, laws of 1917 (P. L. 1917 p. 319), known as the Home Rule act, amended by chapter 195, laws of 1921 (P. L. 1921 p. 511), which gives an appeal to the landowner only, and noifc to the municipality. ■ It is conceded that these acts apply. Section 23, as amended, provides, inter alia, that when any award made under that section is confirmed by the governing body, the amount thereof shall promptly be tendered to the person or persons entitled thereto, before the commencement of the work, and (so far as this case is concerned), where the person refuses to accept such award the same may be paid into this court, and it shall there be distributed to the person or persons entitled thereto according to law; that upon the acceptance of any such award or payment of the same into court, title to such land and real estate shall vest in the municipality, which may thereupon enter and take possession and remove all persons therefrom; that any owner or owners of lands taken for any such improvement may appeal to the circuit court within thirty days after confirmation of the award, and the court shall order a trial by jury to assess such damages and benefits anew; that no such appeal nor trial shall delay the prosecution or completion of the improvement, but the municipality may proceed as though said appeal had not been taken; that the judgment entered on such appeal shall fi!x the amount to be recovered by the appellant, and such judgment may be enforced in the same manner as other judgments in said court.

There is a vast difference' between the provisions of the statute construed in Jersey City v. Hamilton and that which is before me in this case. In the former the provision was that if the jury, on appeal, should find a greater sum than the commissioners awarded, then judgment, with costs, should be entered against the condemning corporation; and the court observed (at p. 50) that the legislature seemed to have sedulously avoided making any provision for an appeal taken by the condemning corporation which resulted in a verdict less than the amount of 'the award. Not so under the act here in question, for it provides that the jury shall assess the damages anew, and that the judgment entered upon the appeal shall fix the amount to be recovered by the appellant, namely, the landowner, from the condemning corporation. Therefore, as already remarked, the less sum awarded by the'jury under the Home Rule act inures as well to the benefit of the condemning corporation as a greater sum would to the landowner! In view of these dissimilar statutory provisions and the clear and unequivocal enactment that the jury’s finding shall supersede the commissioners’ award (for all purposes, as it is not limited), the case of Jersey City v. Hamilton is not an authority for the appellant landowner in this case. Another thing: the appeal in that case was by the condemning corporation, which was precluded from further prosecuting it after voluntarily pajing the award info court subsequent ta filing the appeal and pending its prosecution; while in this case the appeal is by the landowner, who doubtless would have been barred from further prosecution of her appeal, if, pending its prosecution, she had withdrawn the award from the depository of this court. And in Jersey City v. Hamilton, if the landowner had appealed and the jury had found less damages that would have superseded the award. See 70 N. J. Law 49.

Two things may be postulated from this entire situation— (1) that the landowner has no statutory right to the payment of damages by the condemning municipality prior to that, corporation taking possession of the land condemned and prosecuting its work of improvement, and (2) that when the landowner appeals and demands the verdict of a jury upon the question of damages for the value of the land condemned, he is bound by the verdict and judgment thereon, and cannot claim the benefit of the initial award made by the commissioners of assessment, if it be greater than the damages assessed by the jury. To hold that the respondent, Mrs. Robinson, is entitled to prevail in this ease, that is, keep the entire $4,839, although she was dissatisfied with the award of the commissioners and exercised her right of appeal, on which a jury assessed her damages at $2,500, or $2,339 less than the commissioners awarded, would, to my mind, be a travesty on justice.-

The borough of Edgewater in its petition in this matter avers that the order for the payment of the $4,839 to Mrs. Robinson, obtained by her without disclosing the proceedings on appeal and the jury’s finding, was a fraud upon this court. Counsel for Mrs. Robinson excuses the proceeding on the ground that he was of opinion that under the doctrine of Jersey City v. Hamilton she had an absolute right to the amount awarded, and that, while an increased award by a jury on appeal would have inured to her benefit, the finding of a less amount would not have benefited the borough; and he so advised his client. While I fail to see how he could have taken that view, having regard to the dissimilarity of the statutes above examined, and the fact that the landowner is appellant here, still I acquit him of any deliberate attempt to deceive this court. I am constrained, however, to- say that the application, disingenuous as it was in not informing the court as to the appeal and its result, was what is known as a technical, legal fraud, dissociated from an actual one. Hereafter in this class of cases no payment of an award deposited in this court in condemnation proceedings will be paid out, except upon proof that no appeal has been taken, or, if taken, what proceedings have been had upon it and their result.

The petitioner is entitled to an order and decree vacating the order for payment of the sum awarded by the commissioners and deposited in court, and also compelling the defendant to repay to the municipality the difference, or $2,339, with interest from the time she withdrew it from the court’s depository, together with the costs of this application.


text:
    Henry Graves, Jr., and George Coe Graves, individually and as trustees, &c., complainants, v. Harriet Isabella Graves et al., defendants.
    [Decided March 2d, 1923.]
    1. The rule against perpetuities is in force in this state. That rule is that a trust which would fetter an estate beyond the period of a life or lives in being and twenty-one years afterwards is void.
    2. It is the possibility that the period covered by a life or lives in being and twenty-one years afterwards may be exceeded, and not the certainty or even the probability that it will be exceeded, in a given trust, which calls for the application of the rule.
    3. Testator by his will provided inter alia that the principal of his estate should remain intact without depletion or distribution for the benefit of his grandchildren and their families, the income remaining, after an annuity to Ms widow for life, to be divided into as many parts as there might be children and grandchildren surviving him, with payment of one such part to each child and grandchild during their natural life; and in the event of there being other cMldren of testatator’s children—that is, grandchildren, born subsequent to testator’s decease, the annual income to be divided into such proportions that each child and grandchild should receive equal shares, and in the event of thd decease of any grandchild leaving lawful issue, the share of the income that would have gone to the deceased grandchild, to be paid to such issue in equal shares; and, upon the death of the last surviving grandchild, to divide the principal of his estate, with all accumulations, to and among, the issue of grandchildren—that is, among great-grandchildren, share and share alike, the issue of any deceased grandchild to receive the share its parent would have received if living.—Held, that the clause “last surviving grandchild” means a grandchild either born during the lifetime or after the death of testator; and, therefore, as a grandchild born after the decease of the testator may be the last survivor of all the class, and as that grandchild may die more than twenty-one years after the death of the last surviving grandchild, who was alive at the death of the testator, the trust created in the latter’s will may not terminate within the period of a life or lives in being and twenty-one years afterwards, as provided in the rule against perpetuities, and the trust is therefore void,
    4. In theory and contemplation of law it is possible for a man or woman of any age to have issue.

      o. A stock dividend is not in the ordinary sense a dividend, which is a cash distribution to stockholders of profits on their investments; but a stock dividend is an increase in the number of shares declared out of profits, the increased number representing exactly the same property as was represented by the smaller number of shares.
    6. Infants’ rights are not superior to those of adults, and the rights of adults are not to be defeated because the adversary parties are infants.
    On final hearing on pleadings and proofs.

      Messrs. Lindabury, Depue & Faulks, for the complainants.

      Messrs. Parker, Emery & Van Piper, for Edward H. Graves.

      Mr. J. H. Thayer Martin, for Duncan H. Graves et ah

      Mr. Norman Grey, for Jesse R. Salmon, clerk in chancery, guardian ad litem of Jean S. Graves et al., infants.
   Walker, Chancellor.

This is a bill for the construction of the will of the late Henry Graves of Orange. He died August 29th and his will was probated September 10th, 1906. The testator left him surviving Harriet Isabella Graves, his widow, and Henry Graves, Jr., Edward H. Graves, George Coe Graves and Daisy S. Smith, his children and only heirs-at-law and next of kin. Henry Graves, Jr., has had four children, as follows: Henry Graves 3d, Duncan Graves, Gwendolyn Graves and George Coe Graves 2d. Henry Graves 3d died since the death of his grandfather, having left his widow, Margaret Dickson Graves, and Mary Dickson Graves, Florence Barbara Graves and Henry Dickson Graves, his children and only next of kin,him surviving. He left a last will and testament appointing his father, Hemy Graves, Jr., executor,- which will has been probated. Edward H. Graves has one child, a daughter, Jean Stevenson Graves, born after the decease of her grandfather. George Coe Graves has no children. Daisy B. Golf (now Smith) has one child, a daughter, Isabella Graves Goff (now Metcalf).

The executors of Henry Graves, deceased, the complainants, filed their final account as executors in June, 1907,. and thereafter a decree allowing the account as stated was made and filed in the orphans court of Essex county, and the balance of the corpus and income of the testator’s estate thereupon passed to themselves as trustees under decedent’s will. See Lyon v. Bird, 79 N. J. Eq. 157. All of the persons interested in the will of the testator are parties to this suit.

Henry Graves, the testator, after making several specific bequests, expressed the wish that the principal of his estate should remain intact without depletion or distribution for the benefit of his grandchildren and their families, and to that end, in item 4, he devised and bequeathed all the residue and remainder of his estate, both real and personal, unto his sons Henry Graves, Jr.,, and George Coe Graves, their heirs and assigns forever in trust, nevertheless, inter alia:

“o. All increase in shares of stock, special and stock dividends, and other increase in value or accumulations to principal, to be added to principal, the regular yearly income or dividends only to be used for distribution in manner thereinafter provided, d. Out of income of the principal the trustees to pay testator’s wife during her natural life, in lieu of dower or further interest in his real estate or claim upon personalty the sum of $20,000 per year. e. To divide the remaining income into as many parts as there may then be children and grandchildren surviving the .testator and pay one of such parts unto each of his children and grandchildren, during their natural life. f. In the event of there being other children of his children—-that is, grandchildren, born subsequent to testator’s decease, the annual income to be divided into such proportions that each child and grandchild shall receive equal shares, g. In the event of the decease of any grandchild leaving lawful issue the share of the income which would have gone to the deceased grandchild to be paid to such issue in equal shares. A. Upon the death of his last surviving grandchild to divide 'the principal of his estate, with all accumulations, to and< among the issue of grandchildren—that is, among great-grandchildren, share and share alike, the issue of any deceased grandchild to receive the share its parent would have received if living.”

Questions of doubt and difficulty having arisen under the will, complainants, Henry Graves, Jr., and George Coe Graves, individually and as trustees, filed the bill for its construction, and for instructions with reference to their duties thereunder; and they submit that the trust provisions are neither wholly good nor wholly had; that the gift over to the testator’s great-grandchildren on the death of the last surviving grandchild, can hardly be supported; but they submit that the direction to pay income to testator’s children and grandchildren, during their lives, creates valid life estates; that there is apparently no objection to the provision for the opening of the trust fund to let in after-horn grandchildren; that the provision for adding special and stock dividends to the principal means dividends out of capital, and that regular yearly income or dividends only to be distributed to the life tenants, means income or dividends from earnings as distinguished from dividends out of capital. The defendant Edward H. Graves contends that the entire trust, except for payment of the annuity to testator’s widow, is void because it violates the rule against perpetuities. The defendants Duncan Graves, Isabella Metcalf, Harriet Isabella Graves and Daisy B. Smith, contend that the English rule against perpetuities, which we have adopted in this state, should be relaxed, either by giving effect to the testator’s intention at such lawful period as may be nearest the time fixed by him, or by holding the gift valid, if it may vest at the end of lives in being; that upon a true construction of the will the whole testament should he sustained. It is argued on behalf of Gwendolyn Graves, George Coe Graves, 2d, and Jean Stevenson Graves, grandchildren, and Mary Dickson Graves, Elorence Barbara Graves and Henry Dickson Graves, great-grandchildren of the testator, infant defendants, that the testator intended that his estate should vest upon the death of the last grandchild surviving him, and that that intention should be given effect.

On behalf of the infant defendants, who are interested in sustaining the trust, application is made for the admission of extrinsic evidence to aid the court in interpreting the will. The evidence proffered consists of an affidavit made by a member of the bar, who drew the will and advised the testator in its preparation, upon instructions from him. The affidavit is acceptable to all counsel, provided its contents are substantive evidence in the cause. Counsel for the infants concedes that if this evidence is to be admitted it must be to explain a latent ambiguity, and he contends that there is a latent ambiguity, which is as to the meaning of the word “surviving” in the clause which provides that upon the death of testator’s last “surviving grandchild” the principal shall be divided to and among the issue of his grandchildren, &c., it being argued that as the testator has two classes of grandchildren-—those born during his lifetime and one born after his death (and there may yet be others in the latter class) — it cannot be told save by resort to extrinsic facts whether he meant one or both classes.

In Farnum v. Pennsylvania Co. for Insurance, &c., 87 N. J. Eq. 108, Vice-Chancellor Baches, following a long line of decisions, held that parol evidence, of a testator’s declarations to show his intention or understanding of his will different from its legal significance, is incompetent. This case was affirmed on his opinion. Ibid. 652. My judgment is that the proffered testimony residing in -the affidavit is not evidence on this issue, and the affidavit will, therefore, be excluded.

The rule against perpetuities, which is not the creature of statute in our state, but has come to us from the English law, is stated in Theob. Wills 597, as follows:

“A limitation toy way of executory devise is void as too remote, if it is not to take effect until after the determination of one or more lives in being -and upon the expiration of twenty-one years afterwards, as a term in gross and without reference to the infancy of any person who is to take under such limitation, or of any other person, allowance for gestation being made only in those cases where it actually exists. Thellusson v. Woodford, 4 Ves. Jr. 221; 11 Ves. Jr. 112; Cadell v. Palmer, 1 Cl. & F. 372.”

It is argued that this rule has uot been authoritatively adopted in this state, although it is conceded that it has been applied many times in this court. This may be a distinction, but, if so, it is one without a difference. To apply the rule is, to my mind, to adopt it. In re Smisson, 79 N. J. Eq. 233 (at p. 242), Chancellor Pitney held that the rule against perpetuities, adopted by the English courts, obtains in the American states except so far as it may have been changed by statute; and that in this state we have no statute that affects the question. This is the equivalent of a declaration that the rule has been adopted in this state, for it could not obtain here save by adoption. It has been adopted and is in full force. This is recognized by the court of errors and appeals in Camden Safe Deposit and Trust Co. v. Guerm, 89 N. J. Eq. 556.

In re Smisson, supra, it was held that where the vesting of the fee is not postponed beyond the duration of specified lives in being at the time of the death of the testator, any limitations of the estate that may be made to take effect in the meantime are not within the rule because they cannot, by any possibility, postpone a vesting of the fee beyond a period permitted by it.

It is the possibility that the period covered by a life or lives in being and twenty-one years thereafter may be exceeded, and not the certainty or even probability that it will be exceeded, in a given trust, which calls for the application of the rule. See Stout v. Stout, 44 N. J. Eq. 479; Hewitt v. Green, 77 N. J. Eq. 345; In re Smisson, 79 N. J. Eq. 233; Camden Safe Deposit and Trust Co. v. Guerin, 89 N. J. Eq. 556; Kates, Trustee, v. Walker, 82 N. J. L. 157.

In Stout v. Stout, supra, Vice-Chancellor Bird applied the rule, and observed (at p. 486) that it rendered inoperative that portion of the gift which intended that the grandchildren of the -testator’s daughter, Mrs. Dunham, should have the principal, the interest of which was given to her for life. Mrs. Dunham had one child, and although she was fifty years old, the vice-chancellor remarked that the possibility of childbirth is not removed at the age of fifty. This was a correct statement of the law. And it has recently been decided in this court and in the court of errors and appeals that in theory and contemplation of law it is possible for a woman of any age to have issue. See Application of Smith, 94 N. J. Eq. 1, and cases cited. This doctrine is even more cogently applicable to men. Sir William Blackstone says that the possibility of issue is always supposed to- exist unless extinguished by the death of the parties, even though they be each of them one hundred years old. 2 Bl. Com. 125.

Now, in this case four children and five grandchildren were living at -testator’s death, and one grandchild and -three great-grandchildren were born after his decease. Other grandchildren and great-grandchildren may yet be born. The will directs that in the event of there being other children of testator’s children, namely, grandchildren, born subsequent to his death, his trustees are to- divide the annual income in such proportions that each child and grandchild shall receive equal shares. Then, upon the death of the last surviving grandchild, to divide the principal, with all accumulations, to and among the issue of his grandchildren, that is, among his great-grandchildren, share and share alike, &c. It is perfectly obvious that other grandchildren may still be bom and they, upon birth, would be entitled to share in the income, which would cease only upon -the death of the last survivor of them, which might be beyond twenty-one years after the death of all the class living at the time when the will took effect. This probability, or at least possibility, renders void the trust so far as distribution to great-grandchildren at the time of the -death of the last surviving grandchild is concerned, which entails intestacy as to the corpus; but the question still further is: Is the estate distributable now or at a later period, and if later, when ?

And now a word as to- what construction should be given to the word “surviving” in the clause “last surviving grandchild.” To my mind, the meaning of the testator is perfectly clear. He, of course, well knew -that grandchildren might be born to him, so to speak, after his death. That he contemplated it and made provision for them is apparent. In item 4, after providing in paragraph d for the payment of the annuity -to- his wife, he provides in paragraph e that the remaining income shall be divided into as many parts as there may then be children and grandchildren him surviving, and that one of such parts shall be paid unto each of said children and grandchildren during their natural life; and in the event of any grandchild .being under the age of twenty-one, to pay- its share to its guardian; and in paragraph /, that in the event of -there being other children of his children (that is, grandchildren), born subsequent to his decease, he directs his trustees to divide the annual income in such proportions that each child and grandchild should receive equal shares; and in paragraph g, that in -the event of the decease of any one of his grandchildren leaving lawful issue, the portion of the income which would have belonged to that grandchild, in equal shares to his or her issue, &c.; 'and in paragraph h, that upon the death of his last surviving grandchild, to divide the principal of his estate, with all accumulations and increases thereon, to and among the issue of his grandchildren, that is, among his great-grandchildren, share and share alike, the issue of any deceased great-grandchild to receive the share i-ts parent would have received if living. These provisions, to my mind, evince a clear purpose of the testator to provide for grand and great-grandchildren, and for the termination of the trust and distribution of the corpus on the death of his last surviving grandchild, whenever born, whether before or after his death; for, having expressed the wish that the principal of his estate should remain intact for the benefit of his grandchildren and their families, and having provided that after-born grandchildren be let in to enjoy the income of the estate during the continuance of the -trust, he proceeds, as I view it, to direct that upon the death of the last surviving grandchild, not surviving him, but surviving in any event, distribution be made of the corpus among his great-grandchildren. Thus he created by one class of grandchildren, namely, a class including all of them, whenever born, equality among them being apparently of first- importance and solicitude with him.

In Stout v. Stout, Hewitt v. Green and Kates, Trustee, v. Walker, ubi supra, it was held that trusts for grandchildren born after the death of the testators, which might postpone the vesting of the corpus beyond the time permitted by the rule against perpetuities, were void.

It is conceded by all that the trust for testator’s widow of $20,000 per year is valid; and so it is. Therefore, a sufficient part of the estate will have to be held until her death. The next of kin are presently entitled to distribution of the balance of the corpus under the statute of distribution, and will be entitled to the balance—that is, the portion held to produce the widow’s annuity, on her death.

Now, as to the question concerning all increase in shares of stock, special and stock dividends, and other increase in value or accumulations to principal, and the regular yearly income or dividends. This is important only as it may be involved in the accounting.

In my opinion the meaning of the testator as to accumulations on the one hand, and payment out of income on the other, is plain. A sioclc dividend is not in the ordinary sense a dividend, the latter being a cash distribution of profits to stockholders as income from their investments. A stock dividend is an increase in the number of shares declared out of profits, the increased number representing exactly the same property as was represented by the smaller number of shares. Kaufman v. Charlottesville W. M. Co., 93 Va. 673. The testator, therefore, meant that stock dividends should be added to the principal. He as clearly meant that special—that is, extraordinary, dividends should be added to principal. The words “and other increase in value and accumulations to principal” must, I think, be considered as meaning no more than stock or special dividends. As the words are general in character and specify no particular sort of value or accumulation, they must be limited to the specific kind of increase, namely, stock and special dividends, and can have no application to regular 7/earlv income or dividends. And this view is strengthened by his direction that regular yearly fincóme or dividends only are to be distributed.

Among the assets of testator’s estate are shares of stock of the Delaware, Lackawanna and Western Railroad Company and the Atlas Portland Cement Company. On July 1st, 1909, the Delaware, Lackawanna and Western Railroad Company-declared an extra dividend of fifty per cent, to its stockholders. This is clearly a special dividend and went to increase the corpus of testator’s estate. On July 15th, 1909, a stock dividend of fifteen per cent, was declared, payable in shares-of the capital stock of the company. This, of course, went to increase the corpus. On October 26th, 1911, an extra dividend of thirty-five per cent., payable by distribution of stock of the company, was declared. This likewise went to increase the corpus. Another one hundred -per cent, stock dividend was declared on July 28th, 1921, and went to increase the corpus. The regular yearly dividends on this stock have been twentjr per cent., and these, according to the terms of the will, have been distributed to the life tenants. In December, 1920, a stock dividend of fifty per cent, was declared by the Atlas Portland Cement Company. This went to increase thé corpus. The regular dividends of this company during the continuation of the trust have varied from two and one-half per cent, to eight per cent., and were distributed to the life tenants upon the long-entertained theory of the trustees that the trust was valid.

In leaving the questions, I desire to express my regret that I have been unable to reach the conclusion that this trust in favor of grandchildren and great-grandchildren, so clearly expressed by the testator, must be defeated because of.'the . inexorable operation of a rule of construction firmly established in the law. And it is' all the more regrettable because it compels a decision against the interests of infant defendants.- But, after all, infants’ rights are not superior to those of adults, and the rights of adults are not to be defeated because the adversary parties are infants. In re Shreve, 87 N. J. Eq. 7; affirmed, Ibid. 710. Where an infant defendant is before the court represented by a guardian, as he always must be, the court protects his interests and, in a sense, represents him. And where doubtful and difficult questions are involved, the court will appoint counsel to represent the guardian. Bunting v. Bunting, 87 N. J. Eq. 20. This course was taken in. this case. After the appointment of the clerk in chancery as guardian ad litem for the infants, counsel learned in the law was assigned by the court to represent the guardian, and he has ably and exhaustively, both orally and on brief, advo1 eated the interests of the infants.

Upon this whole matter I am constrained to hold that the trust attempted to be created by the testator is void because it violates the rule against perpetuities; that, consequently, the corpus of the estate vested in the children and next of kin of the testator upon his decease, and that they are entitled to enjoy it in possession, subject to a trust fund to be carved out of it sufficient in amount to produce the widow’s'annuity during the term of her natural life; and the trustees must account. Directions for the accounting will be given on motion and on notice, if such course becomes necessary.


author: IValkee, Chancelloe.

text:
    Johanna White, otherwise known as Johanna Monnard, petitioner, v. Frederick W. White, defendant.
    [Decided March 14th, 1923.]
    Under the supplement to the act respecting executions, chapter 113, laws of 1916, page 242, an installment ewemtion may issue on an order or decree of the court of chancery as well as on a judgment of a court of law.
    On petition for annulment of marriage. On application for installment execution.

      Mr. Jerome J. Dunn, for the petitioner.
   IValkee, Chancelloe.

A decree nisi annulling the ceremony of marriage performed between the parties hereto, was made and entered in this cause August 3d, 1922, with the petitioner’s costs incurred and to be incurred to be taxed, including a counsel fee of $150; and a final decree was made and entered herein February 5th, 1923, wherein, and whereby it was ordered, adjudged and decreed that the decree nisi be made and become absolute, &c. By order made and entered herein February 24th, 1923, it was ordered that execution do forthwith issue out of this court in the above stated cause directed to the sheriff) of the county of Hudson, to make the sum of $264.33, for the aforesaid costs and counsel fee; and execution therefor was thereupon issued and was delivered to the sheriff to whom it was directed, who has returned the, same into court wholly unsatisfied. Proof has been ma-ije by affidavits that the defendant is employed by the Smooth-On Manufacturing Company, Fo. 572 Cummunipaw Avenue, Jersey City1-, and that he is in receipt of wages there-from at and after the rate of $30 per week; that he has no one depending upon him for support, and has other income, and can afford to pay twenty per cent, of his weekly wages toward the -satisfaction of the costs and counsel fee aforesaid. Upon this proof application is made under chapter 113, laws of 1916, page 242, for an installment execution.

That act is a supplement to the act respecting executions. It provides in section 1, that when a judgment has been recovered and where an execution issued thereon-has been wholly or partly unsatisfied, where any wages, &e., are due and owing to the judgment debtor, or shall thereafter become due and owing to him, to the amount of $18 or more per -week, the judgment creditor may apply to the court without notice to the judgment debtor, and upon satisfactory proofs, the court or a justice thereof must grant an order directing that an execution issue against the wages, &e., of the judgment debtor, and on presentation of such execution by the officer to whom delivered for collection, to thej person or persons from whom such wages, &c., are due and owing, or thereafter become due and owing, to the judgment debtor, the execution shall become a lien and a continuing levy upon the wages, &c., of the' judgment debtor to the amount specified therein, which shall not exceed ten per cent., unless the income of the debtor shall exceed the sum of $1,000 per annum, in which case the judge may order a larger percentage, and the levy shall become a continuing levy until the execution and expenses are fully satisfied and paid, &c.

This act, although a supplement to the act respecting executions, and although it provides that when a judgment has been recovered an installment execution, as it is sometimes called, may issue in the circumstances stated above, applies to executions on orders and decrees in chancery as well as judgments in courts of law.

The Chancery act (Comp. Stat. p. 425 § 44) provides that a decree of this court shall, from the time of its being signed, have the force, operation and effect of a judgment at law in the supreme court; and all decrees and order's-of the court of chancery whereby any sum of money shall be ordered to be paid by one person to- another, shall have the force, operation and effect of a judgment at law in the supreme court, and the chancellor may order such execution thereon as in other cases, &c.

A decree in equity! is • a judgment, and, as such, stands equal in rank with a judgment at law. Second National Bank v. Blauvelt, 44 N. J. Eq. 173. Therefore, the act respecting installment executions applies as well to orders and decrees in chancery as to judgments at law, and the petitioner herein is entitled to the issuance of such an execution out of this court in this case. As defendant’s income is shown to exceed $1,000 per annum, let the writ command the payment of twenty per cent, of the defendant’s wages until the execution shall be wholly satisfied, including the costs of this proceeding and of the writ.