text:
    Henry McGee v. Mary J. McGee et al.
    [Submitted February 3d, 1911.
    Decided February 21st, 1911.]
    1. In determining -whether money delivered by husband to wife was a gift or mere deposit, the intelligent intent of the parties controls if it can be ascertained.
    2. An absolute gift by husband to wife can be established by presumptive evidence.
    3. Evidence held to show that a husband placed money in his wife’s hands as a deposit, and not as a gift.
    On final hearing on bill, answer, replication and proofs.

      Messrs. Gaskill & Gaskill, for the complainant.

      Messrs. Godfrey & Godfrey, for Henry J. McGee, Jr., and Sarah May McGee.

      Mr. William J. Kraft, for Samuel K. Robbins, guardian ad litem of Mary J. McGee, a lunatic.
   Leaming, V. C.

A great number and variety of adjudicated cases exist in this state in which a husband or father has sought to recover real or personal property the legal title to which has passed from him to a member of his family without a valuable consideration to support the transfer. If time would permit a classification of these cases into the several groups to which they belong, I am convinced that confusion, which is sometimes thought to exist, would be dissipated. In Post v. Hagan, 71 N. J. Eq. (1 Buch.) 234, Mr. Justice Garrison ably points out the force which should be given to a single element which may exist in one class of cases and not- in another almost similar class. If, in a conveyance from a father to a son or from a husband to a wife through an intermediary, the elements of improvidence and undue influence be removed, as in Fretz v. Roth, 70 N. J. Eq. (4 Robb.) 764, another class of cases is presented. But in all the adjudicated cases it will be found that the single element of intent is the paramount inquiry. The intent may be presumed and the presumption may, ordinarily, be rebutted. Even the rule requiring independent advice is measurably based upon the presumption that a donor in that class of cases cannot reasonably be assumed to have intended the extreme consequence of his act. Post v. Hagan, supra. If, therefore, the intelligent intention of the parties can be accurately and satisfactorily ascertained, either through presumptions or other competent means, effect will be given to the intention.

In the present case the properties in question were not conveyed by the husband to the wife; neither were the properties purchased by the husband and the title by him placed in the name of the wife. Considerations peculiarly applicable to those classes of cases may therefore be eliminated. The properties here in question were purchased by the wife with money in her possession and deeds were made to her in her own name. This circumstance necessitates the inquiry whether the money with which the wife purchased the properties in question was her own or was the money of her husband.

The evidence in this case clearly discloses that the money with which the properties were purchased was money which the husband had earned in his business and had from time to time turned over to his wife. The wife is now the owner of certain other real estate, in her own right which she has inherited from her mother; but the evidence discloses that the mother died about the time or shortly after the time the properties in question were purchased, and prior to that time the wife had no income of her own from any source. If this money so earned by the husband was by him intentionally and intelligently turned over to his wife as a gift to her, the bill must be dismissed; if, on the other hand, it was clearly the intention of the husband and wife that she should be made simply a depository of the husband’s earnings and that the money should remain the property of the husband to the same extent as though he had kept it, it necessarily follows that the mere act of placing the money in her hands for safe-keeping was inoperative to vest in her any proprietary rights.

The evidence discloses that during the entire married lives of these parties prior to the transaction now in question, the husband had been prosperous in business and had made a large amount of money as a saloon-keeper. At one time he simultaneously operated as many as four saloons. His wife shared none of the labors of his business, and at no time conducted any business of her own. The surplus money accumulating from day to day at the husband’s saloon or saloons was carried by him to his home and handed to his wife and by her deposited in banks in her own name. From circumstances of this nature, unaccompanied by satisfactory extrinsic evidence of intent, various presumptions may arise. The presumption of an absolute gift may arise and may prevail, if not satisfactorily rebutted. In Beck v. Beck (Court of Chancery), 77 N. J. Eq. (7 Buch.) 51, the husband, and wife were both money makers and the wife handled and commingled all earnings of both as a common fund; under the circumstances present in that case, an intention was ascertained upon the part of the husband and wife to accumulate a joint hoard which should belong to the survivor; and real estate purchased by the wife in her own name from the joint hoard was adjudged to be vested in the husband and wife by an estate equivalent to an estate by entirety.

But in the present case there has been no joint hoard. All of the money in question was earned by the husband and by him placed in the hands of his wife, and I am unable to find any circumstance connected with the habits or training or station in life of the parties which lead me to the conclusion that the principles defined in Beck v. Beck, supra, can be properly applied in this case. On the other hand, the evidence to my mind clearly and satisfactorily establishes the fact that the money of the husband was placed in the hands of his wife as a mere depository and solely as a matter of convenience and without any intention or purpose on his part to relinquish dominion or control over it, and that the wife received the money with the same understanding and purpose. The purchase of the real estate by the wife was, no doubt, with the husband’s knowledge and consent; but I am entirely satisfied that in that purchase there was no intent upon the part of either to diminish the rights of the husband as those rights were then understood by both parties.

It is unnecessary to here review the testimony which I hold sufficient to fully rebut the presumption of gift which may exist. The testimony clearly discloses that the wife repeatedly stated that the money belonged to her husband and that the property belonged to him; that she habitually referred to the money as her husband’s money, and to the property as her husband’s property; that she has stated that the money was handed to her by her husband because he was too busy to look after it, and that she took care of it because he hadn’t time to do so. The real estate agent from whom the property was purchased testified that she told him that the money with which she was purchasing the property .was her husband’s money, and she took the receipt for the first payment in his name, but later had the deed made in her own name. The only witness whose testimony in any degree indicated that the wife might have had a beneficial interest in the money or in the property purchased with it, was that of the son Harry, who is making a defence to the suit; but two witnesses whose veracity I am unable to doubt have testified that Harry told them when the suit was about to be brought that he knew that the money with which the property was bought belonged to his father, and that he had heard his mother say that the property belonged to his father, and that she simply had the title in her own name for him.

It is my conclusion that the presumption of gift arising from the possession of the consideration money by the wife and from title taken in her name are fully overcome by the evidence.

I will accordingly advise a decree pursuant to the prayer of the bill.


source: Caselaw Access Project

author: Leaming, V. C.

license: Public Domain

text:
    Higbee Fishing Club v. Atlantic City Electric Company.
    [Submitted January 13th, 1911.
    Decided February 24th, 1911.]
    1. A way of necessity over a grantor’s land arises by implication, when the grantor sells land wholly surrounded by land retained by him or by his land and by that of a stranger, over which there is no right of access.
    2. A grantor’s sale of land over which another grantee had a way of necessity did not extinguish that way in favor of the second grantee as an innocent purchaser, where it had constructive notice from the records of the fact that the land of the first was surrounded on three sides by the land of the grantor and on the fourth by that of a stranger, with no right of'way reaching him, and also had the lands in question surveyed and knew the physical characteristics of the place.
    3. The court of chancery has jurisdiction to determine a controversy as to the existence of a way of necessity and locate the part of defendant’s land over which the way may be exercised.
    4. In a suit to establish a way of necessity to part of a salt marsh the physical characteristics of which showed that at the time of the grant a way for vehicles could not have been contemplated as necessary, and it appeared that at the present there was no necessity for such a way, a way only 'to the extent of a footpath will be decreed.
    5. One whose land is bordered by that of a railroad has no right to use its property as a way unless he has acquired the right by grant or prescription.
    On final hearing on bill, pleadings and proofs.
    Complainant is the owner of a rectangular lot of land the dimensions of which are sixty feet by one hundred feet. The land is not adjacent to a highway and no means exists for travel to or from complainant’s lot without the'necessity of passing over the land of others. The bill seeks to establish a way of necessity across the land of defendant. Complainant purchased the lot referred to in the year 1897 from the executors of Jonas Higbee, deceased. The deed to complainant conveys the lot by metes and bounds, together with the "tenements, hereditaments and appurtenances thereto belonging or in any wise appertaining,” but makes no express provision touching any easement of way over any adjoining land. The lot of land when purchased was vacant salt meadow; a clubhouse has since been erected on it. At the date of the sale the vendors owned the land adjacent to the lot sold on three sides thereof; the West Jersey and Seashore Railroad Company owned the adjacent land on the fourth side. In the year 1910 the same grantors who sold to complainant conveyed the land which has been referred to as adjacent to complainant’s lot on the three sides thereof, to defendant.

      Messrs. Bolte & Sooy, for the complainant.

      Messrs. Thompson & Cole, for the defendant.
   Leaming, V. C.

1. It is well settled that a right of way ovei a grantor’s land arises when such grantor sells land wholly surrounded by other land which he retains, or when the part sold is surrounded in part by the land retained and in part by that of a stranger, over which there is no right of access. In such cases the way is a necessary incident to the grant, for without it the grant would be useless; the grant is necessarily for the beneficial use of the grantee and the way is necessary to the use. Stuyvesant v. Woodruff, 21 N. J. Law (1 Zab.) 133, 155; Lore v. Stiles, 25 N. J. Eq. (10 C. E. Gr.) 381, 383; French v. Smith, 40 N. J. Eq. (13 Stew.) 361, 362; 3 Kent Com. *420; 14 Cyc. 1174 note 33. By the grant to complainant a way of necessity over the remaining lands of grantor was undoubtedly created in favor of complainant.

2. I think it also clear that the sale of the remaining land from complainant’s grantor to defendant was not operative to extinguish complainant’s rights. Defendant does not occupy the position of an innocent purchaser without notice of complainant’s rights. An examination of the record title of defendant’s grantors woiild have disclosed not only the conveyance to complainant but also the prior conveyance to the railroad company. The physical conditions then apparent disclosed complainant’s isolated lot with no highway as a means of access to it. Not only were these conditions reasonably apparent but defendant, before purchasing, had a survey of the entire premises made and the four corners of complainant’s property were staked by defendant as well as the several corners of the tract which defendant was about to purchase. These physical conditions thus actually ascertained by defendant, in connection with the information disclosed by the record, were clearly operative to charge defendant with notice of complainant’s rights.

3. The jurisdiction of this court to determine complainant’s rights and to locate the part of defendant’s land over which said rights may be exercised has been recognized and acted upon in Camp v. Whitman, 51 N. J. Eq. (6 Dick.) 467. See, also, Pearne v. Coal Creek Co. (Tennessee), 18 S. W. Rep. 402.

4. In Camp v. Whitman, supra, it was found as a fact that at the time of the grant the parties actually contemplated a use of the premises granted which required a way for vehicles, and accordingly it was there held that the way should be suitable for such use. In the present case, however, no evidence of that nature exists. On the contrary, the physical conditions surrounding complainant’s lot were of such a nature that a way for vehicles could not well be deemed to have been contemplated by the parties at the time of the grant, and indeed such a way does not seem to have become at any time necessary to the use to which the lot has been devoted. In view of the principles defined in London v. Riggs (1880), L. R. 13 Ch. Div. 798, I am unable to find justification for a right of way -of necessity in extent more than a footway.

5. The claim on behalf of defendant that complainant is entitled to use the property of the railroad company for access to his lot is clearly untenable. A right of that nature could only be acquired by grant or adverse user for twenty years.

If the parties can agree upon the route of a footway I will advise a decree accordingly, otherwise there may be a reference to a master to determine it.


text:
    Hannah E. Kelley v. Eugene I. Schwinghammer.
    [Submitted December 10th, 1910.
    Determined February 23d, 1911.]
    Where a note was given by a client to an attorney in settlement of legal services, and an action was brought by the attorney thereon — Held, that a bill for injunction would lie to restrain further proceedings and to determine the amount justly due from the client to the attorney.
    On bill for injunction. Hearing at return of order to show cause.

      Mr. Olysses G. Styron, for the complainant.

      Messrs. Thompson & Cole, for the defendant.
   Leaming, V. C.

Defendant is an attorney and counselor-at-law and solicitor in chancery, and is payee in a certain promissory note made by complainant. The note was given to defendant by complainant in settlement for legal services which defendant had performed for complainant as his client. An action at law has been brought by defendant against complainant to recover the amount of the note; that action is now pending. The present bill seeks to restrain further proceedings in the action at law and prays that an accounting may be had to determine the amount justly due from complainant to defendant. The note, of which the present note is a renewal, appears to have been executed at a time when the relation of attorney and client existed between the parties.

I am unable to doubt the jurisdiction of this court in a case of this nature. The existence of a trust relationship, between an attorney and client has been recognized from the earliest times, and in all the adjudicated cases touching transactions through which, attorneys have acquired property- of or from a client, the courts appear to have not only given recognition to the trust relationship referred to, but also to have administered remedies with especial reference to the existence of such trust relationships. See 1 Story Eq. Jur. § 310 et seq.; Pom. Eq. Jur. § 960; Strong v. Mundy, 52 N. J. Eq. (7 Dick.) 833.

In an agreement between an attorney and his client, pending the relation of attorney and client, touching the quantity and reasonable value of services performed or being performed by an attorney for his client, the client, in my judgment, in the absence of independent counsel, is frequently, if not uniformly, almost as dependent upon the attorney as in other matters entrusted to the attorney’s care; although this view does not appear to have received uniform recognition.

In this court, however, it has been expressly determined that where, pending the relation of attorney and client, a bond or other security is given by the client to his attorney as compensation for his services, the transaction will be regarded as constructively fraudulent, in consequence of the confidential relations subsisting and the means of undue influence which the attorney may exert over his client. In such case the burden is thrown on the attorney of showing its fairness, adequacy and propriety. Brown v. Bulkley, 14 N. J. Eq. (1 McCart.) 451, 458. The note now in question clearly falls within the principles of that case. See, also, Porter v. Bergen, 54 N. J. Eq. (9 Dick.) 405.

I think it clear that a court of law cannot, without embarrassment, adequately administer the relief to which complainant in this case is entitled, and that this court is the appropriate court for that purpose.

I will advise an order for an injunction restraining the further prosecution of the action at law until final hearing of this suit. If there is real danger that a judgment against complainant for the amount alleged to be due on the note will be of less value at a later time than now, I will entertain a motion on behalf of defendant to make the injunction conditioned on proper security being given against such loss.


text:
    Philander E. Lane et al. v. The J. E. Roach’s Banda Mexicana Company.
    [Submitted January 3d, 1911.
    Decided February 25th, 1911.]
    1. A conditional sale of musical instruments was made in Indiana, by the law of which state the contract was valid. When the sale was made, the parties contemplated the transitory use of the instruments in this and other states, but the contract was not recorded in this .state. While the instruments were in this state and before performance of the conditions, the buyer executed a chattel mortgage to a resident of Colorado, who was a tona fide purchaser, and this mortgage was at once recorded. —Held, that the title to the instruments was to be determined by the law of the situs at the time the contract was made, and that as against the conditional seller the mortgagee had no title.
    2. The conditional buyer of goods, who was not a resident of this state and whose contract was made in Indiana, brought them into this state before performance of the conditions. P. L. 1898 p. 700 §§ 71, 72, provide that contracts for a conditional sale of goods shall be recorded "in the office of the clerk of the court of common pleas of the county wherein the party contracting to buy, if a resident of this state, shall reside at the time of the execution thereof; and if not a resident of this state, then in the said clerk’s office of the county where the property so conditionally bought shall be at the time of the execution of the instrument.” — Held, that, as neither of these conditions existed, the statute was inoperative, and the contract of conditional sale remained valid as at common law, as to third persons claiming under the buyer, though the contract was not recorded in this state.
    3. The conditional buyer of goods sent a note to the seller for the amount of his claim, but the note was given to and received by the seller with the full understanding that it should not release his claim of title to the goods. — Held, that there was no waiver of the condition as to title.
    4. Conditional sales are valid in this state, and in the absence of fraud the title of the conditional vendor will be protected according to his contract.
    5. Courts of this state will not enforce the law of the place of contract, where a statute of this state inconsistent with the law of the place of contract is invoked by a resident of this state. Qucere. Will they, where the local statute is invoked by a resident of another state?

      On petition to determine right of parties in chattels in possession of receiver.
    In September, 1909, a written conditional sale agreement was made between Charles G. Conn, a manufacturer of musical instruments in Indiana, and the Roach’s Banda Mexicana Company, a corporation of Colorado, whereby Conn agreed to sell to that corporation certain musical instruments upon condition that the corporation would pay for the same in certain specified installments, it being stipulated in the agreement that title should remain in the vendor until the installments were fully paid. The contract was made in the State of Indiana and the musical instruments were at that time in the possession of Conn at his factory ip that state. The contract was signed by the corporation in the State of Colorado, but with the understanding that it should not be operative until it was received by Conn in Indiana and there approved by him. The corporation maintained an organization of musicians commonly known as a brass band, and its business was that of supplying musical concerts at such places as the band should be engaged for that purpose. As soon as the contract was received by Conn and by him approved the instruments were shipped, by order of the corporation, to the band; which was in Mexico. The band thereafter performed •at various places in Mexico and the United States, and in the summer of 1910 performed at Atlantic City, in this state. While there a chattel mortgage covering the musical instruments was executed by the corporation to John C. Talbott, a resident of the State of Colorado, which mortgage was promptly recorded in this state, in Atlantic county. Talbott had no knowledge of the existence of the conditional sale agreement and believed the corporation to be the owner of the instruments. The agreement has not been recorded in this state. Since the execution of the chattel mortgage a receiver of the corporation has been appointed by this court by reason of its insolvency, and the instruments are now in the possession of the receiver. The present proceeding is to determine whether the conditional sale agreement is valid as against the mortgagee.

      At the time the conditional sale agreement was executed -it was contemplated by the parties to that agreement that the musical instruments were to be used by the band in the various states of the United States in which it should be engaged to perform. It was also known to the parties that the band had made an engagement to perform at Atlantic City in the summer of 1910, for a clause in the agreement made provision for an order in favor of Conn, on the party in Atlantic City who was to employ the services of the band, for a specified percentage of the money to be earned by the band under that engagement.

      Mr. Clarence L. Goldenberg, for the petitioner, Conn.

      Messrs. Bolte & Sooy, for the mortgagee, Talbott.

      Mr. Oliver T. Rogers, receiver, pro se.

   Leaming, V. C.

Under the law of Indiana the conditional sale agreement was valid, and the title to the chattels remained in the vendor until the conditions of the contract were performed; until that time the vendee coúld not, as against the vendor, confer a title upon an innocent purchaser or mortgagee without notice. Winchester Wagon Works v. Carman, 109 Ind. 31.

In Cooper v. Philadelphia Worsted Co., 68 N. J. Eq. (2 Robb.) 622, it is determined that in cases of this nature it is the law of the situs of the property at the time the contract is made which must control. The conditional sale agreement was made in Indiana and at that time the chattels were in that state. By the law of that state, as already stated, the title of the chattels did not pass from the vendor.

It is urged, however, that as the vendor knew that the chattels were to be used in New Jersey at some future time, the law of New Jersey will now control, and the conditional sale agreement will be treated as void as against the mortgagee without notice because the contract was not recorded in New Jersey. In Knowles Loom Works v. Vacher, 57 N. J. Law (28 Vr.) 490, as is pointed out in Cooper v. Philadelphia Worsted Co., supra (at pp. 628, 629), the parties contemplated that the looms, which were sold in Massachusetts, should be permanently located in New Jersey, and it was there held that, under the circumstances of that case, New Jersey should be regarded as the situs of the looms. But in the present case the use of the goods in New Jersey which was contemplated by the parties was only a transitory use; the contemplation of the parties was that the goods should be used temporarily in any or all of the states of the United States from time to time as the “bookings” of the band should require. I am convinced that that circumstance cannot properly be regarded as operative to impart to the goods a new situs in each successive state in which the band should from time to time perform in filling its various temporary engagements.

It will be also observed that our statute provides for the record of contracts for the conditional sale of goods in only two places — first,

“In the office of the clerk of the court of common pleas of the county wherein the party contracting to buy, if a resident of this state, shall reside at the time of the execution thereof.”

Second,

"If not a resident of this state, then in the said clerk’s office of the county where the property so conditionally bought shall be at the time of the execution of the instrument.” P. L. 1908 p. 670 §§ 71, 72.

As neither of these conditions existed in this case no place of record for the contract in question was designated by our statute. In Woolley v. Geneva Wagon Co., 59 N. J. Law (30 Vr.) 278, it was held that under such conditions the recording statute is inoperative and the conditional sale contract will remain valid as at common law.

It is also urged that a certain promissory note sent to Conn for the amount of his claim and not properly returned by him was operative to release his claim of title to the goods. The evidence sufficiently discloses that the note was given to and received by Conn with the full understanding that it should not be operative to release his claim of title to the goods. In the correspondence leading np to the note Conn stated, in effect, that such favors as he should extend to enable the band to resume its work would be with the understanding that his conditional sale contract should “hold good.” It was clearly the intention of no one that the note should be regarded as operative as a payment.

Another feature is present in this case which should, I think, be referred to. It has already been stated that the contract of conditional sale was made in the state of the domicile of the conditional vendor, with a conditional vendee who was not a resident" of New Jersey, and was made with reference to chattels at that time in the possession of the vendor in the state of his domicile, and by the laws of the state of the contract the title of the chattels remained in the conditional vendor until the conditions of the contract were fully discharged by performance. Assuming that the recording act of this state contemplates a contract of that nature made under the circumstances stated, the question arises whether the forum of the state in which the conditional vendor asserts his rights will enforce the local recording statute in subversion of the law of the place of the contract in behalf of a person who is not a citizen of this state.

As this question had not been argued before me, and the features alreadj' considered are, in my judgment, conclusive, I will do no more than call attention to adjudications which impress me as requiring a negative answer to the question propounded.

As already stated conditional sales are valid in this state, and in the absence of fraud the title of the conditional vendor will be protected according to the terms of the contract. Cole v. Berry, 42 N. J. Law (13 Vr.) 308. If the contract now in question is not to be enforced, it must be solely by reason of the failure to comply with the requirements of our recording act. To what extent, under such conditions, should the state of the remedy recognize the obligations of comity to enforce the contract in accordance with the laws of the foreign jurisdiction?

In some of our states the law of the place of the contract appears to be enforced, notwithstanding the existence of a local statute which would otherwise overthrow the contract; and this irrespective of whether or not the aid of the local statute is invoked in behalf of a resident of the state of the remedy. See Drew v. Smith, 59 Me. 393; Cobb v. Buswell, 37 Vt. 337; Dixon v. Blondin, 58 Vt. 689; Barrett v. Kelley, 66 Vt. 515; Cleveland Machine Works v. Lang, 67 N. H. 348; Baldwin v. Hill, 4 Kan. App. 168; Mershon v. Moors, 76 Wis. 502, 515; Com. of Kentucky v. Bassford, 6 Hill (N. Y.) 526; Thatcher v. Morris, 11 N. Y. 437; McIntyre v. Parks, 3 Met. (Mass.) 207. But in this state, however, the opposite view has been taken, and local statutes have been successfully invoked to subvert the law of the state of the contract, which, but for the local statute, would have been recognized. Varnum v. Camp, 13 N. J. Law (1 Gr.) 326; Marvin Safe Co. v. Norton, 48 N. J. Law (19 Vr.) 410; Knowles Loom Works v. Vacher, 57 N. J. Law (28 Vr.) 490.

But I have found no adjudicated cases in which a local statute or policy of the forum of the remedy has been upheld to overthrow the comity of states except where the local statute is invoked by and in behalf of a citizen of the state where the local statute exists. On the contrary, wherever I have found the subject directly considered the uniform view appears to have been adopted that the law of the contract will be recognized unless the enforcement of the provisions of the local statute are found necessary for the protection of a citizen of the forum of the remedy. In this state the principle referred to was considered in Bentley v. Whittemore, 19 N. J. Eq. (4 C. E. Gr.) 462. The principle of Bentley v. Whittemore is applied in Receiver v. First National Bank, 34 N. J. Eq. (7 Stew.) 450, to the extent of holding that a New Jersey receiver acquires title to Hie personal property of a New Jersey corporation situate in New York in derogation of the laws of New York, except as against citizens of New York. The learned vice-chancellor, at page 454 of the reported opinion, says:

“No state is bound to give effect to the law of a foreign state, when, to do so, will prejudice either the rights of its citizens or the interests of the state; but, on the contrary, each state is bound to give its citizens the full benefit of all the remedies and securities provided by its laws. But where a transfer of property is valid by the lex loci, whether it be effected by the act of the debtor, or by operation of law, no just rule of comity requires the courts of the state where the property happens to be located, to adjudge such transfer to be invalid, at the instance of citizens of other states, simply on the ground that it is incompatible with its laws.”

Bentley v. Whittemore, supra, has been followed in Pemberton v. Klein, 43 N. J. Eq. (16 Stew.) 98, and Green v. Wallis Iron Works, 49 N. J. Eq. (4 Dick.) 48. See, also, Knowles Loom Works v. Vacher, 57 N. J. Law (28 Vr.) 490, 494; Flagg v. Baldwin, 38 N. J. Eq. (11 Stew.) 219, 225; Van Winkle v. Armstrong, 41 N. J. Eq. (14 Stew.) 402, 404. The rule referred to is also applied in permitting a receiver of a foreign jurisdiction to act in a state not of his appointment; the rule of comity being to recognize the right except to the detriment of a citizen. Beach Rec. §§ 682, 683; 20 Am. & Eng. Encycl. L. (1st ed.) 244; Hurd v. City of Elizabeth, 41 N. J. Law (12 Vr.) 1, 4; Bidlack v. Mason, 26 N. J. Eq. (11 C. E. Gr.) 230.

I will advise a decree pursuant to the prayer of the petition.


text:
    Security Trust Company, administrator de bonis non cum testamento annexo of James Kennedy, deceased, v. Mary Ann Lovett et al.
    [Submitted February 21st, 1911.
    Decided March 4th, 1911.]
    1. Testator, after bequeathing his property to his wife for life, ordered a sale at her decease and a division of the proceeds among his eleven children and four named grandchildren, and then declared that if any of the children died, leaving issue, the portion given to such child or children should be equally divided between their issue. — Beld, that the contingency of death of the children would be referred to death of the children prior to the termination of the life estate and the arrival of the time for distribution.

      2. Testator directed that after the termination of a life estate his property should be divided among his eleven children and four named grandchildren, children of a deceased child, and that, if either of the children died, leaving issue, the portion given to such child or children should be equally divided between their “issue.” — Meld that, there being nothing in the will to indicate a contrary intention, the word “issue” would be given its ordinary meaning to include children and grandchildren. •
    3. 'On the death of certain of the children after the death of the testator, and before the termination of the life estate by the death of the widow, each leaving issue, some of which (grandchildren of the testator) had living children born prior to the death of the widow, the issue of the testator’s children so dying, were not entitled to partake as one general class, but the interest of each child so dying would be distributed to his or her children and grandchildren in equal shares.
    4. Where testator bequeathed a life estate to his wife, and then directed that on her death the property be sold and the proceeds divided among his eleven children and four named grandchildren, children of a deceased child, and declared that, should either of the children die, leaving issue, the portion given to such child or children should be equally divided between their issue, testator’s several children took vested interests at testator’s death, subject to be divested in favor of their issue, in the event of their death without issue before the death of the widow.
    5. Where testator devised his property to his wife for life and at the termination of the life estate, directed that the same be sold and the proceeds divided among testator’s eleven children and four named grandchildren, it was not optional with the executors whether they would sell or not, and hence there was a conversion of realty into personalty, so that the gifts to the children would be treated as gifts of personalty.
    6. The contingency in such case attached only to the time of payment, and not to the substance of the gift, and the death of a son after testator’s death, but before the death of the life tenant, leaving a widow, but no issue, did not divest the gift to such son.
    7. Testator bequeathed a life estate in his property to his widow, and directed that after the termination thereof the property should be sold and the proceeds divided equally among testator’s eleven children, a one-twelfth part to go to four named grandchildren, children of a deceased daughter. — Meld that, there being no provision in the will for a residue, the children of such deceased daughter would be regarded as taking as a class, so that, on the death of one of such children, intestate and without issue, prior to the death of the testator, the bequest as to the child so dying would be regarded as having lapsed, and the gift distributed among the survivors.
    8. 8 Gen. Stat. 1895 p. 8168 § 81/ provides that when an estate shall be devised by will to any person, being a child or other descendant of .the testator, or a brother or sister, or any descendant of a brother or sister of such testator, and such devisee or legatee should, during the life of such testator, die, testate or intestate, leaving a child or children, or one or more descendants of a child or children, who shall survive the testator, the devise to such person dying in testator’s lifetime shall not lapse, but the estate shall vest in such child or children, or descendant, in the same manner as if the devisee or legatee had survived the testator, and had died intestate. — Held, that such section does not include a case in which the legatee dies without issue, nor where it appears that the testator intended to make a bequest to a class as distinguished from the individuals composing the class at the time the will was made.
    On bill, answer and agreed state of facts.
    Tb.e bill is filed to procure a construction of the will of James Kennedy, deceased.
    The material provisions of the will are as follows:

      “Second Item. — I give, devise and bequeath all my estate both real, personal and mixed, of whatsoever name and nature wheresoever situate or to be found, of which shall belong to or be owned by me at the time of my death unto my beloved wife Margaret, to have and to hold the same during the term of her natural life.

      “Third Item. — That after the decease of my said wife Margaret, it is my will that my executors hereinafter named, shall sell and dispose of the real estate at public or private sale, at such times, and upon such terms, and in such manner as to them shall seem meet, and the proceeds from such sales be divided between my children Mary Ann Lovett, Kosanna Prickett, John Kennedy, William Kennedy, James Kennedy, Martha Allison, Margaret Kaighn, Louisa Graham, Rebecca Cavanaugh, Charles Kennedy and Laura Virginia Carroll, share and share alike, and one-twelfth part or share to be divided between Walter, James, Ralph and Elizabeth Eisley, children of my deceased daughter Sarah Eisley, to which she would be entitled to if living.

      “Fourth Item. — Should either of my above named children die leaving-issue, it is my will that the -portion herein devised or bequeathed to such child or children shall be equally divided between their issue.”

      Mr. J. Charles Winters, for the complainant.

      Mr. Patrick H. Harding, for the defendant May Reed.

      Mr. Oscar B. Redrow, for Wilhelmina Kennedy et al.
   Leaming, V. C.

By the second paragraph of the will the property of testator is given to his wife for life, and' by the third, paragraph a sale of the property is ordered to be made, at the decease of the widow, and the proceeds of the sale divided among testator’s eleven children and four grandchildren, each child taking one share and the four grandchildren taking the share of the deceased child.

The present controversy arises from the circumstance that after unqualifiedly directing payment to be made to his eleven children, testator, by the fourth paragraph of his will, provided that should cither of the children die, leaving issue, the portion given to such child or children should be equally divided between their issue.

This provision, relating to the contingency of the death of the children, will, by the accepted rules of construction in such cases, be understood to refer to the death of the children prior to the period of distribution — that is, prior to the termination of tire life estate by the decease of the widow. Brown v. Lippincott, 49 N. J. Eq. (4 Dick.) 44; Fischer v. Fischer, 75 N. J. Eq. (5 Buch.) 74.

It will be observed that testator has not directed that the share' of any son or daughter who dies leaving issue should go to the children of such son or daughter; the provision is that the share shall be divided between the “issue” of the child or children dying with issue. Three of the children of testator have died since the death of testator and before the death of the widow, and each of the three so dying have left children who are now alive, and some of tírese children now alive (grandchildren of testator) have living children (great grandchildren of testator) who were born prior to the death of the widow of testator.

It is settled in this state that the word “issue,” in its ordinary meaning, embraces grandchildren and remoter descendants, as well as children, and that meaning must be attributed to the word when used in a will as here used, unless from the will it can be clearly ascertained that a more restricted meaning was intended by testator. Unless so restricted it includes children of a living child. Ingliss v. McCook, 68 N. J. Eq. (2 Robb.) 27, 40, 41; Price v. Sisson, 13 N. J. Eq. (2 Beas.) 168, 177, 178; S. C. on appeal, 17 N. J. Eq. (2 C. E. Gr.) 475, 485; Coyle v. Coyle, 73 N. J. Eq. (3 Buch.) 528. I find nothing in the will in question from which it may be properly determined that the word “issue” was used by testator with any meaning other than its ordinary meaning; indeed, the will contains no provision which even suggests that idea. It is plain, therefore, that the grandchildren of testator’s children share in the distribution. The extent of the share which these grandchildren of deceased children of testator take is determined by the language of the will. That provision is clearly to the effect that the share of a child of testator who dies leaving issue shall be divided equally between such issue. Not only is that the clear purport of the language used in the will, but it is also in harmony with the rule adopted in cases in which issue of a given person are referred to in a will as the objects of testator’s bounty in the event of the death of such person with issue. The rule is stated in Jarman on Wills as follows:

“The word issue, though in its popular sense is said to be children, is technically, and when not restrained by the context, co-extensive and synonymous with descendants, comprehending objects of every degree. And here the distribution is per capita, not per stirpes.”

2 Jarm. Wills (5th Am. ed.) 635. This text is approved by our court of errors and appeals in Weehawken v. Sisson, 17 N. J. Eq. (2 C. E. Gr.) 486. The suggestion is made that the issue of the several children of testator who have died before the period of distribution, leaving issue, may take as one general class, and that distribution will accordingly be made among all of them irrespective of the child whose issite they may be. This view is clearly untenable. The general structure of the will, as well as the language of the paragraph here in question, discloses what appears to be a defined purpose on the part of testator to distribute his estate to his several children and their respective lines in such manner that each child and the line of a deceased child shall receive one equal share. "While the interests of the several children of testator may properly be regarded as vested interests at the death of testator, they were, by the terms of the will, to be divested in favor of their issue in the event of death with issue before the death of the life tenant. The manifest plan is that the issue of a deceased child shall take the share of the deceased child by substitution. The result is that the one-twelfth share of Rosanna Prickett, deceased, shruld be distributed to her two daughters and to her two granddaughters in equal shares — that is, one-fourth thereof to each. The one-twelfth share of William Kennedy, deceased, should be distributed to his two sons and four granddaughters in the same manner. The one-twelfth share of Martha Allison, deceased, should be distributed to her four children and three grandchildren in the same manner.

Another son of testator died intestate in 1895- — -after the death of testator and before the death of the life tenant — leaving no issue, and leaving a widow. By the third paragraph of the will of testator, one-twelfth of the proceeds of sale of testator’s real estate is ordered paid to this son at the decease of testator’s widow. This provision was clearly operative to confer upon this son, at the death of testator, a vested interest in the nature of a remainder in the share named. The gift to the several sons must be treated as legacies of personal estate, as distinguished from devises of real estate; for where land is directed to be sold in any certain event, and it is not optional with the executors whether they will sell, and the proceeds of the sale are given to the objects of testator’s bounty, the land is deemed personal property from the death of testator. Dutton v. Pugh, 45 N. J. Eq. (18 Stew.) 426; Fairly v. Kline, 3 N. J. Law (2 Penn.) 322, 325. The right of the son now in question was a vested right; there was a present right of future enjoyment; the right of future enjoyment was limited on an event- — the death of the widow — which was certain to happen, and the son was capable of talcing at any time the liferight should be spent; the present absolute right and capacity of enjoyment in the son, in the event of the cessation of the life estate, created a vested interest in him, notwithstanding the possi bility of his death with issue before the death of the life tenant; in the event of his death with issue before the death of the life tenant, his interest was, by the terms of the will, to be divested, the enjoyment was merely postponed to let in the enjoyment of the life tenant; but that contingency is attached to the time of payment and not to the substance of the gift; it is the uncertainty of the right of enjoyment, and not the uncertainty of actual enjoyment which prevents a right from vesting and renders it contingent. See Miller v. Worrall, 59 N. J. Eq. (14 Dick.) 134; Price v. Sisson, supra (at p. 177); Weehawken Ferry Co. v. Sisson, supra (at p. 179); Executors of Wintermute v. Executors of Snyder, 3 N. J. Eq. (2 Gr. Ch.) 489, 492; Fairly v. Kline, 3 N. J. Law (2 Penn.) 322, *754; Van Dyke’s Administrator v. Vanderpool’s Administrator, 14 N. J. Eq. (1 McCart.) 198; Thomas’ Executors v. Anderson’s Administrator, 21 N. J. Eq. (6 C. E. Gr.) 22; Beatty’s Administrator v. Montgomery’s Executors, 21 N. J. Eq. (6 C. E. Gr.) 324, 327; Executors of Kearney v. Kearney, 17 N. J. Eq. (2 C. E. Gr.) 59; S. C. on appeal, 17 N. J. Eq. (2 C. E. Gr.) 505; Huber v. Donoghue, 49 N. J. Eq. (4 Dick.) 125. This view in no way conflicts with the rule that where a bequest is limited over after a life estate to several persons and the “survivors,” their interest is contingent, and no rights will vest until the termination of the life estate, as in Van Tilburgh v. Hollingshead, 14 N. J. Eq. (1 McCart.) 32, and Williamson v. Chamberlain, 10 N. J. Eq. (2 Stock.) 373. As has been already stated, the son John Kennedy died intestate in the year 1895, leaving no issue and leaving a widow. As the interest of John Kennedy was a vested interest, the change in the statute of distribution of this state in the year 1908 (P. L. 1908 p. 644) cannot alter the shares to which the widow and the next of kin of John Kennedy were severally entitled in his estate at the time of his death. Van Tilburgh v. Hollingshead, supra. The result is that one-half of the one-twelfth share of John Kennedy should be distributed to his widow.

Another controversy exists touching the force of the provisions of the will in favor of the children of testator’s daughter Elizabeth Eisley. One of these children, James, died intestate and without issue prior to the decease of testator. "Where a gift is to several persons by name, a presumption arises, in the absence of contrary intent apparent on the face of the will, that the persons named are to take in their individual, and not in their collective capacity, even though the persons so named constitute a class. . In such case the bequest lapses as to any one of the persons named who may be dead at the time of the death of testator. Dildine v. Dildine, 32 N. J. Eq. (5 Stew.) 78; Collins v. Bergen, 42 N. J. Eq. (15 Stew.) 57. The provisions of section 34 of our statute concerning wills (3 Gen. Stat. p. 3763) does not include a case in which the legatee dies without issue. The presumption referred to, however, is but a rule of construction to be used in the ascertainment of the intention of testator; the presumption is not conclusive. If it sufficiently appears from the will that it was the intention of testator to make a bequest to a class, as distinguished from the individuals who may compose the class at the time the will was made, the death of one or more of the persons before testator will not cause a lapse of any part of the fund, but the survivors of the class will take the whole; such an intention may be manifest even when the persons comprising the class are named. Jackson v. Roberts, 14 Gray (Mass.) 546; Schaffer v. Kettell, 14 Allen (Mass.) 528; Stedman v. Priest, 103 Mass. 293; Page v. Gilbert, 32 Hun (N. Y.) 301; Hoppock v. Tucker, 59 N. Y. 202. In the present case, I think it apparent that it was the intention of testator to give one-twelfth of his estate to the children of his daughter Elizabeth as a class. By the will he divided his entire estate into twelve equal shares and gave one share to each of his eleven living children, and the other share to the "children of my deceased daughter Sarah Eisley, to which she would be entitled to if living.” No provision was made in, the will for a residuary estate. This general plan discloses a purpose on the part of testator to dispose of his entire estate and to dispose of it in equal shares in such manner that the children of his deceased daughter should represent their mother and take their mother’s share. The mere fact that the children of his deceased daughter were mentioned by name should not, I am convinced, be considered sufficient to overcome the intent which seems otherwise apparent. In Hoppock v. Tucker, supra, the general plan disclosed by, the will was deemed sufficient to indicate a defined intention to give to a class. But another circumstance should not be overlooked. After the decease of James, testator made a codicil to his will and made no provision for any unwilled estate. In Jackson v. Roberts, supra, that circumstance was held to indicate that the original intention of testator was to make the bequest to a class and to disclose that it was the belief of testator that he had done so. I am constrained to hold that at the decease of testator one-twelfth of his estate became vested in his three grandchildren, Elizabeth, Ralph and Walter, equally, to be enjoyed by them in possession at the decease of the widow of testator. As these shares were severally vested in these three grandchildren of testator at his decease, with no conditions subsequent annexed, they severally passed, at their death, according to our statute of distribution as it existed at the time of their several deaths.

I will advise a decree in accordance with the views herein expressed.


text:
    James J. Leyden v. Elijah W. Lawrence et al.
    [Submitted February 9th, 1911.
    Decided March 10th, 1911.]
    The cross-bill of the mortgagor in a suit to foreclose a mortgage seeking a decree that the mortgage was satisfied by payment of insurance money to the mortgagee averred that the mortgage was made to G.; that insurance policies on the mortgaged property were assigned to G. as collateral security; that the mortgage authorized the mortgagee, in case of the mortgagor failing to keep the property insured, to insure it at the mortgagor’s expense, the premium so paid to be added to the obligation secured by the mortgage; that the assigned policies expired, and mortgagor, because unaware thereof, failed to effect new insurance: that mortgagee then effected insurance “in pursuance of said agreement in the mortgage,” in an amount in excess of the amount of the mortgage; that, the property having been burned, the insurer paid the loss to the amount of the mortgage, and took from the mortgagee an assignment of the mortgage to complainant for its benefit. — Held, that the plea to the cross-bill merely that G. “did not take out or effect insurance on the mortgagor’s interest” was insufficient, as its averments cannot be extended by inference, and it can negative the averments of the cross-bill only by positive averments; and the fact that the policy was in form on the mortgagee’s interest alone, which is the effect of the averment, not affecting its having been effected at the mortgagor’s expense, under the provision of the mortgage, in which case it was for the benefit of the mortgagor, as well as the mortgagee, so that payment of its avails to the mortgagee discharged the mortgage, and did not entitle the insurer to be subrogated to the mortgagor’s rights thereunder, as it may be where the mortgagee effects insurance at his own expense and solely in his own behalf.

      On bill, cross-bill and plea.
    Complainant’s bill seeks to foreclose a mortgage against defendants’ real estate. Defendants have answered and have also filed a cross-bill which seeks equitable relief against the mortgage. Complainant has filed a plea in bar to the relief prayed by the cross-bill, and the present inquiry is to determine the sufficiency of the plea.
    The cross-bill sets forth the following facts: The mortgage which is sought to be foreclosed was made by defendant Lawrence to one Godfrey. Insurance policies on the mortgaged premises were assigned by Lawrence to Godfrey as collateral security to the mortgage. The mortgage contained the usual insurance clause whereby the mortgagor agreed to keep the premises insured and assign the insurance to the mortgagee as collateral security, and, failing in that, the mortgagee was authorized to insure the premises at the expense of mortgagor, and
    “the uremium paid for effecting the same shall be a lien on the mortgaged premises, added to the amount of the said bond or obligation and secured by these presents (the mortgage) and payable on demand, with legal interest.”
    The policies which mortgagor had assigned to mortgagee expired and mortgagor failed to effect new insurance by reason of the fact that he was not aware that the policies had expired. Mortgagee then effected insurance on the mortgaged premises “in pursuance of the said agreement contained in the said indenture of mortgage,” in an amount in excess of the amount of the mortgage. A loss by fire then occurred and the insurance company paid the loss to the extent of the mortgage and took from the mortgagee an assignment of the mortgage in the name of complainant, who now holds the mortgage in trust for the insurance company. The cross-bill prays that the payment of the insurance money to the mortgagee may be decreed to operate as a satisfaction of the mortgage.
    The plea is to the whole cross-bill and sets forth a single fact as follows: “Said Lincoln Godfrey (mortgagee) did not take out or effect insurance on the mortgagor’s interest in the buildmgs in said cross-bill mentioned.” No further averments are contained in the plea and no denials of any matters set forth in the cross-bill are contained in the plea except in so' far as the affirmative averment above quoted may be operative as a denial.

      Messrs. French & Richards, for the complainant.

      Mr. Austin H. Swackhamer, for the defendants.
   Leaming, V. C.

It is settled in this state that a mortgagee of real estate has an insurable interest therein, and when such mortgagee, at his own expense and solely in his own behalf, procures insurance on the mortgaged property for the better security of his debt, the insurer, if obliged to pay a loss occasioned by injury to such property, may be subrogated pro tanto to the rights of the mortgagee under the mortgage. Sussex County Mutual Insurance Co. v. Woodruff, 26 N. J. Law (2 Dutch.) 541; Nelson v. Bound Brook Insurance Co., 43 N. J. Eq. (16 Stew.) 256; Lawrence v. Union Insurance Co. (New Jersey Supreme Court), 76 Atl. Rep. 1053. It may be said to be equally well settled that if the insurance has been taken by the mortgagee at the expense and for the benefit of the mortgagor, as well as for his own protection, the mortgagor will have the right, in case of a loss, to have the avails of the policy applied for his benefit toward the discharge of his indebtedness. Pearman v. Gould, 42 N. J. Eq. (15 Stew.) 4. This right of the mortgagor, under the circumstances last named, has been sustained even where the policy has been in the name of the mortgagee and where the right of the mortgagor in the policy existed under a parol agreement between the mortgagor and mortgagee unknown to the insurer. See Kernochan v. New York Bowery Fire Insurance Co., 17 N. Y. 428; Clinton v. Hope Insurance Co., 45 N. Y. 454; Waring v. Loder, 53 N. Y. 581; Sheld. Subr. §§ 234, 235, 236.

The contending parties do not at this time essentially differ in their views touching the law of subrogation; the present controversy exists more by reason of what may be called technical questions, arising from the fact that complainant has asserted his defence to the cross-bill of defendants by way of a plea.

It is an established rule of equity pleading that a plea, in order to constitute a bar to complainant's whole right of action, must aver every fact essential to make out a complete defence. Mount v. Manhattan Co., 41 N. J. Eq. (14 Stew.) 211. These averments must be direct averments; inferences arising from the averments are not effective as a part of the plea. McEwen v. Broadhead, 11 N. J. Eq. (3 Stock.) 129; Story Eq. Pl. § 662. A pure or affirmative plea, that is, a plea merely stating matters not apparent upon the bill, usually proceeds upon the ground that, admitting the case stated in the bill to be true, the matter suggested by the plea affords a sufficient reason why the complainant should not have the relief he prays. 1 Dan. Ch. Pl. & Pr. *604. Another important rule, well established, is that such pleas must clearly and distinctly aver all facts necessary to render the plea a complete equitable defence to the case made by the bill, so far as the plea extends, so that the complainant may, if he chooses, take issue upon it, and that averments are necessary to exclude intendments which would otherwise be made against the pleader. Story Eq. Pl. § 665.

With these principles in view it seems apparent that the present plea is inadequate as an equitable defence. It will be observed that the cross-bill sets forth that the insurance was for an amount in excess of the mortgage, and that it was not placed by mortgagor because mortgagor was not aware that the former insurance, which had been assigned to mortgagee as collateral security, had expired, and that the insurance now in question was effected by the mortgagee in pursuance of the agreement contained in the mortgage whereby the mortgagee was privileged to effect insurance at the expense of mortgagor, and that the cost thereof should, in such case, be added to the mortgage and become a lien on the mortgaged premises. The equity of this cross-bill is that, under the circumstances stated, a policy of insurance, taken out by mortgagee, pursuant to the recited stipulation contained in the mortgage, will be deemed to have been for the benefit of the mortgagor as well as the mortgagee; for, if in fact taken out pursuant to the provisions of the mortgage, it was necessarily taken out at the expense of the mortgagor in that the premiums would thereby become a part of the mortgage debt. The plea does not deny these averments of the cross-bill except in so far as they may be denied by inference by the statement of the plea that “the said Lincoln Godfrey (mortgagee) did not take out or effect insurance on the mortgagor’s interest in the buildings in said cross-bill mentioned.” As already stated, the averments of the plea cannot be thus extended by inference. If the plea seeks to negative these averments of the cross-bill it should do so by positive averments. Story Eq. Pl. § 665; Allen v. Randolph, 4 Johns. Ch. 693. The plea must, therefore, be considered as merely containing an averment, additional to the averments of the cross-bill, to the effect that the policy was in form on the mortgagee’s interest alone. If it could at this time be properly assumed from the averments of the cross-bill and plea, that the mortgagee did not effect the insurance in question pursuant to the stipulations contained in the mortgage or with reference thereto, but, in fact, effected the insurance on his interest as mortgagee solely in his own behalf and at his own expense, and without reference to the privilege extended to him by the mortgagee, the plea would probably be sufficient under the decisions of this state, already referred to; but considering the plea in the aspect in which I am convinced it must be considered under the established rules of equity pleading, namely, as an averment of a single fact, additional to the facts stated in the bill, to the effect that the policy, when examined, will be found to be in form a policy on mortgagee’s interest alone, I think the plea must be overruled. Cross-complainant is entitled to an ascertainment of the substance, as distinguished from the form, of the entire transaction which culminated in the policy of insurance. That privilege of cross-complainant is the very privilege which is to be found in a court of equity; that privilege is not, in a case of this nature, equally available in a court of law.

.1 will advise an order overruling the plea.


text:
    John L. Bowker v. Mary J. Allethea Cunningham.
    [Heard March 27th, 1911.
    Decided March 31st, 1911.]
    1. Evidence held to show that the purchaser induced the vendor to believe that a residence, and not a store building, would be built upon the land.
    2. Representations by a contract purchaser of land that he would build a residence on the land, whereas he intended to erect a store building, are material, defeating his right to specific performance of the contract where the vendor’s remaining residence property is affected, though a store is needed in that vicinity, and the projected building would cost more than other neighboring buildings.
    3. Specific performance will be decreed only when complete justice is done.
    4. Misrepresentation of a material matter, though unintentional, precludes specific performance in favor of the person making it.
    5. The rule that a statement to amount to a misrepresentation must be a positive affirmation of an existing fact and not a mere opinion, promise, or statement of intention, &e., cannot be invoked against a defence of misrepresentations in a suit for specific performance.
    6. Misrepresentation by a contract purchaser of part of a lot of land concerning the use to which he intended to put it, if material and false, and inducing the vendor to contract to convey when he would not otherwise have so contracted, precludes specific performance in favor of the purchaser.
    On final hearing on bill, &c., for specific performance.
    Complainant seeks to compel defendant to convey to him a certain parcel of land at Ocean City, New Jersejq pursuant to the terms of a written agreement made by the parties. Defendant resists the relief sought by complainant because of certain misrepresentations which she alleges were made to her by complainant prior to the execution of the agreement.
    The specific claim of defendant is that complainant induced her to believe that he was to erect on the property in question a residence building that would be a credit to the neighborhood and benefit to defendant’s remaining property, and that her belief in complainant’s professed purpose induced her to agree to sell for a less amount than she would have done had she known that complainant’s real purpose was to erect a building to be used in part as a store. The asserted importance of this representation lies in the fact that defendant was selling' to complainant approximately one-half of two lots which she owned in a residential portion of the city, and on the oceanward end of these lots, which end she was to retain, were two dwellings, one of which she occupied as a residence in the summer seasons; that she was, in consequence, willing to sell the vacant portion of these lots for the price agreed upon if a creditable residence was to be erected by the purchaser on the part sold, but would not have sold at that price had she known that the building which complainant was to erect was for use by him for commercial purposes. Since the agreement of sale was signed complainant has made a contract with a builder for the erection of a building on the property in question, and defendant having ascertained that the proposed building is designed for and is to be in part for use by complainant as a store, she now refuses to execute a deed to complainant.

      Mr. Albert A. Howell, for the complainant.

      Mr. John Boyd Avis, for the defendant.
   Leaming, V. C.

There can be little doubt touching the facts. The evidence clearly discloses that at the time the contract was entered into it was complainant’s defined purpose to erect upon the land purchased just such a building as he has now arranged to have erected, that is, a building the first story of which is to be a store and the second story of which is to be a residence. Some effort has been made in behalf of complainant to characterize the first story of the proposed building as a basement for use for storage purposes; but the evidence clearly discloses that the first story is to be constructed with special reference to its use as a store and that it is to be used by complainant for the sale of bread, butter, eggs, milk and vegetables. That this was complainant’s purpose from the time he first contemplated the purchase is reasonably free from doubt. It is also entirely clear that at the time the contract was made defendant confidently believed that the building which complainant promised to erect was to be a residence building and not a combined residence and store building, and that this belief upon her part arose from statements made by complainant. It is entirely possible that complainant did not intend to deceive or mislead defendant and did not realize that he had deceived or misled her; but his letter to her of April 20th, 1910, and his subsequent statements to her, taken together, clearly justified her in her belief as to his purpose. While the letter of April 20th does not specifically state that the building which complainant was to erect was not to be a combined store and residence, it clearly justified defendant’s understanding that it was not to be such a structure, but was, on the contrary, to be an attractive residence. Defendant undoubtedly so understood complainant's representations and relied upon them and was impelled to act by reason of the representations so made. The statements made by complainant to defendant, after the letter was written, to the effect that the building would be a credit to the neighborhood and would be a benefit to defendant were, in view of the letter already in defendant’s possession, properly and appropriately understood by defendant to refer to a residence building. It may therefore be said to be entirely certain that complainant induced defendant to believe that the contemplated building was to be a residence and not in any sense a store building; whether complainant intentionally did so or not it is unnecessary to determine, for his statements were such as to reasonably induce and justify that belief upon the part of defendant. I incline to the view that complainant probably did not intend to deceive or mislead defendant and that he probably did not fully realize that his statements were such as to lead defendant to believe that the building which he promised to erect was not to be a building for use as a store; but the fact remains that his statements did create that belief and were such as to naturally and appropriately create that belief upon the part of defendant. In that belief, and by reason of that belief, defendant agreed to sell the property for less than she would have sold it had she not so understood complainant’s representations.

I also entertain the view that there can be no doubt touching the materiality of the representations. The property in question is in a residential district. The more northeasterly part of Asbury avenue is devoted to business purposes, but the evidence disclosed that the district in question is residential. Defendant’s houses are in the immediate vicinity. It may be, as some of the testimony indicates, that a store is needed in that vicinity; but there is material substance in the objection of the owner of a residence property in a residence district to the establishment of a store adjacent to his residence. Defendant seriously objects to a store being erected adjacent to her residence and entered into the agreement in question in the full belief, induced by complainant, that he would erect a residence, and not a store, on the property which she agreed to sell to him. Whether the building which complainant proposes to erect will cost more or less than other buildings in the vicinity I think immaterial, and I think it equally immaterial whether the building will enhance values in .that neighborhood; for the fact remains that defendant does not desire a store for the sale of vegetables adjacent to her residence, and contracted to sell only in the belief induced by complainant’s statements that the adjacent building to be erected by him would be a residence and not a store building.

Under the conditions named complainant is not entitled to the aid of a court of equity in compelling defendant to specifically perform her agreement to sell. It is one of the necessary inherent qualities of a decree for specific performance that it does complete justice. King v. Morford, 1 N. J. Eq. (Saxt.) 274, 282. In suits of this nature this court will grant its aid or not, according to the justice of the case. Miller v. Chetwood, 2 N. J. Eq. (1 Gr. Ch.) 199, 208. A decree for specific performance will never be made, unless substantial justice will be advanced thereby. Ely v. Perrine, 2 N. J. Eq. (1 Gr. Ch.) 396, 402. “This court will not become an instrument of injustice; and if the case presented is such that it would be unconscientious to grant the complainant the relief he seeks, and repugnant to a just sense of right between man and man, the court will refuse its aid. * * * The defendant may be unable to prove any mistake, fraud, or accident, in reference to its execution; and yet the conduct of the complainant may have induced such a state of things in relation to the subject-matter of the agreement as would make it not only proper, but the plain duty of the court to refuse its aid in enforcing its specific performance.” Stoutenburgh v. Tompkins, 9 N. J. Eq. (1 Stock.) 332, 335, 336. “The remedy by specific performance is discretionary. The question in such cases is not what must the court do, but what, in view of all the circumstances of the case in judgment, should it do to further justice.” Johnson v. Somerville, 33 N. J. Eq. (6 Stew.) 152, 153. The foregoing citations, as well as those hereinafter to be made, measurably disclose the extent to which principles of ethics may appropriately be considered in suits of this nature. An unintentional misrepresentation of a material matter will be operative as a bar to a decree for specific performance. Wuesthoff v. Seymour, 22 N. J. Eq. (7 C. E. Gr.) 66, 69. The material inquiry is not whether a complainant intended to mislead defendant, but is, did he mislead him ? Prof. Pomeroy says:

“In maintaining the defence to a suit for specific performance, the knowledge, belief, or intent of the party making the representations is wholly immaterial, and the question is not raised. The point upon which the defence turns is the fact of the other party having been misled by a representation calculated to mislead him, and not the existence of a design to thus mislead.” Pom. Spec. Perf. § 217.

In Baskcomb v. Beckwith, L. R. 8 Eq. Cas. 100, a map was exhibited to the purchaser which was not misleading if examined carefully and which was not intended to mislead, but which was liable to mislead if not carefully examined, and which map did in fact mislead the purchaser; specific performance was accordingly denied.

It is urged in behalf of complainant that a statement, to amount to a misrepresentation, must be the positive affirmation of an existing fact, and not the mere expression of an opinion, or a promise or statement of intention or expectation, or other statement as to the future. That is undoubtedly the rule as applied to certain forms of relief; but the application of that doctrine to the defence of a suit for specific performance would be clearly destructive of the very equitable principles already referred to, for these principles impel a court of equity to deny this extraordinary form of relief to a suitor whose position as a contracting party has been attained only by reason of a misunderstanding on the part of his adversary which has been created or induced by his misconduct. The rule in this class of cases enters the domain of ethics, and when so considered must necessarily be applied alike to all material misrepresentations of a complainant which have been operative to deceive a defendant and which have in that manner induced such defendant to enter into the contract. The decree denying relief does not operate upon the contract or determine it fraudulent or void; it is merely a determination that under the circumstances of the case it is. not in furtherance of substantial justice to extend the extraordinary powers of the court to complainant’s aid. In this view it seems to me that a representation touching the use which a purchaser of a part of a lot of land is to make of the part purchased, if material and false and operative to induce the seller to contract to sell when he would not otherwise have so contracted, must deny to such purchaser the equitable relief to be found in a decree for specific performance. Upon that principle the case of Brown v. Pitcairn, 148 Pa. St. 387, was decided. In that case the purchaser of a lot of land, by causing sketches to be made showing how dwelling-houses could be best located on the lot, induced the seller to believe that he was to erect dwellings on the lot, whereas his real purpose was to erect on the lot a blacksmith shop; specific performance was denied by reason of the misrepresentation.

I will advise a decree dismissing the bill.


text:
    Thomas J. Jarman, executor, v. Abraham Freeman.
    [Submitted and decided April 10th, 1911.]
    1. Where a deed grants the use in common of a passageway extending on one side of the lot granted between the lot granted and the land of the grantor, as a private way for travel and drainage, and the grantor reserves the fee, the grantee cannot enlarge the easement to accommodate land other than that to which it is appurtenant, and has only the right to enjoy the estate granted, while the grantor, who owns the fee in the way, and whose rights are not founded in grant, may use his property for any purpose consistent with the full enjoyment of the easement, but he cannot extend the use of his way to other lands so as to impair the easement which he has granted.
    2. The owner of the fee in a strip of land, who has granted an easement of way therein may suspend structures above the way, or mine under it, if he does not interfere with the easement he has granted.
    3. Where the owner of a lot of land has granted a part of it, with an easement of way in common in an alley extending the whole distance between the part granted and the remaining part of the whole lot, the grantee to pay a proportionate part of the expense of keeping the alley in repair, a reservation by the grantor in a conveyance of the remainder of the original lot, of a common right of way in the alley for the benefit of other land of the grantor adjoining the original lot on the side of the blind end of the alley, and a reservation in a subsequent conveyance of this lot of the same right of way, tend to increase the burden of repair, and are void as against the first grantee in so far as they interfere with the full enjoyment of his easement.
    4. Complainant, who was the grantee of an easement of was' and drainage in common for the benefit of himself and the owners and occupier's of the lots of the grantor laterally adjacent to the way, who stood by during the erection of a warehouse by a grantee of the first grantor on a lot adjacent to the blind end of the way, and who necessarily had knowledge that the owner of the warehouse had no other right of way than the way in use'and that he intended to use it as a means of access, and who himself contributed to the owner’s expenditures by taking a contract for work on the building, is estopped in an action to enjoin the owner’s use of the svay after the building has been completed.
    On bill for injunction. Hearing on return of order to show cause for preliminary injunction.

      Tbe bill is filed to restrain defendant from making rise of a certain alley for purposes of travel to and from defendant’s land.
    The alley which complainant seeks to protect from use by d¿fendant came into existence in the following manner: In the year 1898 one Kelly owned a lot of land at the southwest corner of Atlantic and New York avenues, Atlantic City. The lot was rectangular in form and extended one hundred feet along Atlantic avenue and one hundred and fifty feet along New York avenue. In the year named, Kelly sold to complainant’s devisor the rear, or southerly, forty feet of the lot. The deed of conveyance from Kelly to complainant’s devisor granted not only the tract above referred to as extending forty feet in frontage on New York avenue, but also the right to use as an alley a strip of land adjacent thereto on the northerly side thereof, said strip of land being ten feet in front, or width, on New York avenue and extending in depth of that uniform width the same distance as the land conveyed — one hundred feet. The language of the deed with reference to the alley is as follows:
    “Together with the free and common use. right, liberty and privilege of an alley ten feet in width, intended to be laid out and opened by the said grantor, parallel with and one hundred feet southward from the south line of Atlantic avenue, and extending westward from said New York avenue one hundred feet in depth, in common with the owners, tenants, and occupiers of the lots of ground of the said grantor and the said grantee, or their assigns, bounding thereon as and for a passageway and water course, at all times hereafter, forever, subject, however, to the payment of a proportionate part of the expense of keeping the said alley in good order and repair at all times hereafter, forever.”
    At the date of this conveyance Kelly owned no land in the vicinity except the lot already referred to, the rear portion of which he conveyed to complainant’s devisor in the manner already stated. After this conveyance was made, Kelly and complainant’s devisor caused the alley to be paved at their joint expense. In the year 1901 Kelly purchased from one Folwell a lot of land adjacent to and westerly of the lot originally owned by him. The lot so purchased extended fifty feet in front on Atlantic avenue and one hundred and fifty feet in depth. It will thus be observed that the rear part of the lot purchased by Kelly from Folwell was adjacent to tbe land then owned by complainant’s devisor, and also adjacent to what is called the “blind end” of the alley. In the year 1908 Kelly sold to the Atlantic Safe Deposit and Trust Company — not parties to this suit- — -the remaining portion of the original corner lot, that is, one hundred feet on Atlantic avenue and one hundred feet on New York avenue. In that deed of conveyance, Kelly’s rights in the alley were conveyed in the following language:
    “Together with all the right, title and interest of the said party of the first part hereto (Kelly) in the ten l'eet wide alley in the rear of said premises, to the depth of one hundred feet westwardly from New York avenue, reserving thereout, however, unto the grantor, his heirs and assigns, the use, right, privilege and liberty of all of said ten feet wide alley, as and for a passageway and water course, and for ingress and egress thereover, at all times hereafter, forever, for the benefit of the land of said grantor adjoining the land herein described on the west side thereof.”
    On January 95th, 1911, Kelly conveyed to defendant the lot which he had theretofore purchased from Folwell, and in the deed of conveyance therefor granted to defendant the use of the alley by the following language:
    “Together with the use, right, privilege and liberty in common with others, of, in and to that certain ten feet wide alley or passageway known as Sherman Place, leading eastwardly from said lands and premises to Now York avenue the northerly line of which runs parallel with and one hundred feet southerly from the southerly line of Atlantic avenue, as and for a passageway and water course, and to have ingress and egress thereover, hereafter forever.”
    About seven years ago, and when Kelly was the owner of the lot now owned by defendant, buildings were by him rebuilt on the front part of the lot. These buildings face on Atlantic avenue and exclude all means of access to the lot from Atlantic avenue, and since their erection the alley has been uniformly used by the occupants of these buildings for egress and ingress without objection from anyone. Defendant has recently erected a large warehouse on the rear of his lot. This warehouse has been constructed with special reference to the use of the alley for the receipt of goods; its only entrance is adjacent to the westerly end of the alley, and goods' cannot be received in it except from the end of the alley. This warehouse now contains about twenty thousand dollars worth of goods which have been received through the alley. The evidence before the court at this time sufficiently discloses that complainant necessarily knew that the warehouse of defendant was being constructed for the purpose of receiving goods through the alley in question, and made no protest against such use until the present bill was filed. It also appears that complainant was employed to install the plumbing in the warehouse and that he performed the work.
    The foregoing facts have been made to appear at the return of an order to show cause for a preliminary injunction to restrain defendant from using the alley pending final hearing of the suit.

      Messrs. Chandler & Robertson, for the complainanl.

      Messrs. Bourgeois & Coulomb, for the defendant.
   Leaming, V. C.

From the above statement of facts it will be observed that the deed from Kelly to complainant’s devisor was operative to create an easement of way and drainage appurtenant to the land conveyed. The terms of the grant sufficiently define the character, extent and purpose of the easement; these terms unmistakably disclose that it was intended as a private way for travel and 'drainage for the benefit of the land laterally adjacent to the alley, with the burden of maintenance equally imposed upon the owners of the lands on either side of the way. The grantor retained the fee of the land over which the way was to pass. The grantee, as owner of the dominant tenement, thus became entitled to the enjoyment of the easement for the benefit of his land, subject to an equal right of enjoyment in behalf of the adjacent land of the grantor. These rights of the grantee have passed to complainant by the devise of the dominant tenement to him.

Under the conditions stated, little doubt can be said to exist touching the respective rights of the owners and the privileges which they may enjoy with reference to the way. It is in entire harmony with both reason and authority that the owner of such dominant tenement should not be privileged to extend or enlarge the easement of way to accommodate land other than that to which it is appurtenant; he is only privileged to enjoy the estate granted, and such extension would be clearly outside the terms of the grant. Davenport v. Lamson, 21 Pick. (Mass.) 72; Hoosier Stone Co. v. Malott, 130 Ind. 21; Louisville, N. A. & C. R. Co. v. Malott, 135 Ind. 113; Albert v. Thomas, 73 Md. 181. The rights of the owner of the servient tenement are necessarily less limited. He is the owner of the fee in the land over which the way passes. His rights are not founded in grant, and he majq in consequence, use his property in any manner and for any purpose, consistent with the full enjoyment of the easement. These rights have been held to include-the right to suspend structures above the way and to mine under the way. But he cannot use his property in a manner to materially impair or interfere with the easement which he has granted, and the owner of the easement may prevent such use. Atkins v. Boardman, 2 Met. (Mass.) 457, 467; Proprietors Locks, &c., v. N. & L. Ry. Co., 104 Mass. 1, 11; Herman v. Roberts, 119 N. Y. 37; Shivers v. Shivers, 32 N. J. Eq. (5 Stew.) 578. It necessarily follows that the owner of the servient tenement cannot lawfully extend the use of the way to other lands when such added use is operative to interfere with the full enjoyment of the easement in behalf of the dominant tenement, or to increase the burden of repair which accompanies the easement.

In the present case, I think it reasonably manifest that the extension of the privilege of use of the way in question to the property now owned 'by defendant is operative to interfere with the full enjoyment by complainant of the easement which is appurtenant to his land; while the injury may be but slight, it, nevertheless, seems apparent that to extend the use of the way for the benefit of the land in question will tend to interfere with the full exercise by complainant of the rights vested in him under his grant, and will also increase his burden of repair. In this view it follows that the reservation in behalf of Kelly’s newly acquired land, contained in the deed from Kelly to the trust company, and that the grant of the right to use the way, contained in the deed from Kelly to defendant, are void as against complainant, in so far as they are operative to interfere with the full enjoyment of complainant’s rights under the easement. The case of Greene v. Canny, 137 Mass. 64, is in point. Touching the effect of such a grant it is there said (at p. 68) : “To grant others than the owner of these lots rights of way would be to grant obstructions of those which he had already granted. It would add to the expense of those who were to keep the way in repair, while their own enjoyment would be less convenient and beneficial, as it might be more or less interfered with by the enjoyment of others.” And on page 70 it is held that the ownership of the fee in the way confers no right to extend the privilege to use the way to persons other than the persons for whose use the way was created.

But I think it here unnecessary to positively determine whether the use of the way by defendant will materially interfere with the full enjoyment by complainant of his easement, for the evidence now before this court discloses sufficient doubt to exist, touching complainant’s right to equitable relief, to necessitate the refusal of a preliminary writ.

It is a familiar equitable maxim that where a man has been silent when in conscience he ought to have spoken, he shall be debarred from speaking when conscience requires him to be silent. In Summer v. Seaton, 47 N. J. Eq. (2 Dick.) 103, 111, Vice-Chancellor Pitney, quoting from Chancellor Kent, applies this maxim as follows:

“There is no principle better established’ in this court, nor one founded on more solid foundations of equity and public utility, than that which declares that if one man, knowingly, though he does it passively, by looking on, suffers another to purchase ox expend money on land, under an erroneous opinion of title, without making known his claim, he shall not afterwards be permitted to exercise his legal right against such person. It would be an act of fraud and injustice, and his conscience is bound by this equitable estoppel.”

In the present case it is manifest that defendant erected his warehouse in the full belief that he would be privileged to use the alley in question. The warehouse is located at the end of the alley and is so constructed that it can only be used from the alley. In observing the building so located and constructed, complainant could not fail to know that it was designed for use from the alley; he was employed to work on the building, and his knowledge in this respect cannot be doubted.

Under such circumstances it was clearly his conscientious duty to apprise defendant of his objection to the use of the alley, and his failure to do so should be operative to deny to him the relief now sought from a court of conscience for the protection of the legal right, the invasion of which his passive acquiescence necessarily encouraged. This passive acquiescence upon the part of complainant in the expenditures so made by defendant, with special reference to the use of the alley, has undoubtedly been measurably instrumental in the' consummation of the present conditions, and in that view it is not in accordance with equitable principles to now extend to complainant the aid of this court in the enforcement against defendant of the legal rights here asserted. It is entirely immaterial that the expenditures were being made by defendant on his own land; the warehouse which defendant was erecting 'was being erected in a manner that made it apparent to anyone that its contemplated use was through the alley in question. Complainant remained silent when duty, candor and fairness required him to speak, and his silence appropriately and necessarily gave encouragement to defendant in the course he was pursuing; complainant not only remained silent but actively contributed to defendant’s expenditures by performing labor upon the building, at a time when the building was so far advanced in its construction that complainant could not fail to fully appreciate that the building was being constructed for the special purpose of utilizing the alley as a means, of access to New York avenue. The acquiescence of complainant in the use of the alley by defendant for several years prior to the time the warehouse was erected, also naturally tended to lead defendant to the belief, which he clearty entertained, that the alley could be used by him.

I will advise an order denying equitable relief.