text:
    John A. Kennedy et al. v. The American Tanning Company.
    [Decided January 28th, 1913.]
    After an adjudication of bankruptcy, all the rights, liens and claims alleged against the property or the bankrupt must be determined by the bankruptcy court; and as soon as a proper custodian is designated by that court, and an application is made to the court of chancery to have the assets in receivership or in custodia legis turned over to that court, the receiver should be ordered to turn over all that he has received, less his compensation, including- any expenditures actually ■ made or incurred to that end.
    TJpon report of receiver, and motion to turn assets over to a trustee in bankruptcy.

      Mr. Elmer H. Geran, receiver, pro se.

      Mr. Wilfred G. Rozel, for the trustee in bankruptcy.

      Messrs. Pitney, Hardin & Slcinner, for Junius Beebe.
   Garrison, V. C.

The facts necessary to be considered are as follows: The defendant corporation was incorporated under the laws of the State of New Jersey. An application under the Corporation act was made for an injunction and a receiver, and Elmer H. Geran was appointed receiver on the 2d day of February, 1911. The company occupied premises owned by Junius Beebe, and the receiver and Mr. Beebe made some arrangement about-compensation for the use of the premises during the time that the property of the defendant company occupied the same after the receivership. The receiver disposed of all of the assets of the company excepting a secret formula.

With things in this situation a petition in bankruptcy was filed on the 23d day of April, 1911, and The American Tanning Company was adjudicated a bankrupt on the 13th day of November, 1911, and thereupon one Paul M. Eisher was ajopointed as trustee in bankruptcy.

The trustee in bankruptcy has applied to the receiver of this court to turn, over to him all of the assets in his hands, and the receiver of this court has presented his report and requested an allowance, and has requested that the obligations incurred by him for earing for and preserving the property during the time that it was in his possession as receiver shall be allowed. The trustee in bankruptcy opposes the receiver in these requests, and insists that this court shall turn over to such trustee in bankruptcy all of the property in the possession of the receiver, without passing upon his accounts and making any allowances for his services or for any expenses incurred by him in caring for and preserving the property.

A full consideration of all the possible questions arising out of this situation would entail much time and would result in an extended review of many decisions. In view of certain settled principles, and of a previous ruling in this court, I do not purpose at this time to make any such extended review or exposition.

In the case of Singer v. National Bedstead Manufacturing Co. (Vice-Chancellor Stevenson, 1903), 65 N. J. Eq. (20 Dick.) 290, the court decided that where there was no opposition insisting that this court should keep all of the assets in its possession under some claim of jurisdiction, the proper order would be to direct that the receiver of this court should forthwith present his account and report, and that proper allowances thereout should be made, and the residue of the assets in the receiver’s hands should be turned over to the trustee in bankruptcy. The conclusion reached by the vice-chancellor in that case is sustained not only by the reasons advanced by him therein but also by authority. The following cases clearly indicate, in my view, that the course pursued is the proper one. Mauran v. Crown Carpet Lining Co., 50 A. R. 387; 6 A. B. R. 740; Wilson v. Parr, 115 Ga. 629; 8 A. B. R. 230; Hanson v. Stephens, 116 Ga. 722; 42 S. E. Rep. 1028; 11 A. B. R. 172; Loveless v. Southern Grocery Co., 159 Fed. Rep. 415; 20 A. B. R. 180; Re Watts & Sachs, 190 U. S. 1; 47 L. Ed. 933; 10 A. B. R. 113.

To the extent that it is necessary for me to do anything more than to cite the precedent established in this state, and supported, as I view it, by authorities elsewhere, I may thus briefly summarize it. Since it is not suggested in this case that the jurisdiction being exercised in this case was not one which was. superseded by the bankruptcy proceeding, I concede, for the purpose of further consideration, that the effect of the proceeding in bankruptcy was to supersede the existing proceeding in this court. I understand the law to be that all liens, rights, obligations and claims alleged to exist against the properly, or the bankrupt, must therefore be adjudicated and determined by the bankruptcy court. I understand that, so soon as a proper custodian is designated by the bankruptcy court, and application is made to this court to have the assets in custodia legis turned over to the bankruptcy court, an order to that end should be made. In my view, what should be turned over is all that the custodian appointed by this court received, less that which it has taken to compensate the receiver or custodian for taking care of the property. This would necessarily include his expenses in that respect, compensation for such care and preservation, and any expenditures actually made or incurred to that end.

Without going deeply into the. matter, I cannot conceive it possible that the bankruptcy court would contend that it was entitled to taire over the property which had been in custodia legis in this court until this court should have reimbursed those who had, under its direction or with its sanction, expended moneys for the preservation of the property in question. Very different questions arise where moneys are to be paid out for any other purposes, and I shall not herein discuss those other questions. In the case at bar, it will be recalled that the receiver herein was appointed on the 2d of February, 1911; that the application in the bankruptcy case was filed on or about the 23d of April, and the adjudication was not until November, during all of which time the property, of necessity, was in the custodianship of the receiver appointed by this court; and all the expenses intended to be allowed are for actual preservation and care.

The order herein will be that the receiver’s account shall be settled; that all expenditures actually made for the preservation of the property shall be reimbursed to him; 'that any obligation that he undertook for the purpose of caring for and preserving the property shall be made; and that the balance of the money, after deducting the amount necessary to meet the items above mentioned, shall be turned over to the trustee in bankruptcy. The secret formula has already been turned .over.

An order in accordance herewith may be settled on notice.


source: Caselaw Access Project

author: Leamjstg, V. C.

license: Public Domain

text:
    Harry Minck et al., trustees, &c., v. Mary Jane Walker et al.
    [Submitted September 16th, 1912.
    Determined October 23d, 1912.]
    A bill by complainants as trustees under a void trust contained in a will, which bill sets forth the provisions of such trust, the acts done by the complainants, in the performance thereof, whereby they realized certain moneys, and which bill seeks a settlement in this court of such a nature that proper allowances may be made to the complainants for their services and expenditures, and asks that the funds then remaining in their hands may be distributed by decree of this court amongst the. persons entitled thereto, and that an injunction be issued restraining the testator’s heirs-at-law from disturbing the grantees of the complainants by actions of ejectment or otherwise, exhibits no ground of equitable jurisdiction, and will be dismissed for want of equity, upon motion.
    The bill discloses that Joshua W. Bishop, deceased, devised and bequeathed certain real and personal éstate to complainants in trust, and that complainants, in the performance of the trust duties imposed by the will, in good faith sold and conveyed certain real estate so devised and in like manner conveyed certain other real estate in fulfillment of contracts made by testator in his lifetime, and also collected rents of other real estate covered by the trust provisions of the will. The provisions of the will which so devised and bequeathed the property to complainants in trust have since been by the supreme court of this state declared void because violative of the law against the creation of perpetuities. The moneys received by complainants as rents and proceeds of sale of real estate are still in complainants’ hands, and complainants now by their bill seek a settlement in this court of such a nature that proper allowances may be made to them for their services and expenditures, and that the funds then remaining in their hands be distributed by decree of this court to the persons who are entitled to the same; an injunction is also sought to restrain the heirs-at-law from disturbing the grantees of complainants by actions of ejectment against them or otherwise. The heirs-at-law and administrator cum testamento annexo of testator and also the several grantees of. complainants are made defendants. Motions are now made by the administrator cum testamento annexo of testator and by his heirs-at-law to dismiss the bill for want of equity and for other reasons specified in the motions.

      Mr. Charles I.. Wooster, for the complainants.

      Mr. Adam B. Sloan, opposed.
   Leamjstg, V. C.

I am unable to discern any theory upon which the bill can be maintained. The conveyances made by complainants cannot vest a title'in their grantees; as against the heirs-at-law these conveyances are clearly void. The heir or heirs-at-law to whom the real estate descended, as land of which testator died intestate^ cannot be brought into this court to litigate their claim of title or possession of the land conveyed by complainants or their claims to the rents collected by complainants, nor can the grantees of complainants be brought into this court to here assert their claim against complainants for a return of the purchasemoiiey by them paid to complainants, unless some branch of equitable jurisdiction can be found to enable complainants to compel these defendants to submit to the adjudication of these purely legal rights in this court. The bill calls complainants de facto trustees and claims equitable jurisdiction by reason of the analogy of a trusteeship; the motion to dismiss the bill calls complainants executors de son tort, and claims that as such they are entitled to no equitable relief. Complainants are neither de facto trustees nor executors de son tort. There was no trusteeship, and there can be no de facto officer without a de jure office. So far as the bill discloses, the only assets which complainants have received were either real estate or its revenues; such assets go to heirs; a person becomes an executor de son tort only when intermeddling with assets which affect the administration. The right of the grantees of complainant to come into a court of equity in an effort to impress a trust upon the purchase-money paid by them, if such right can be said to exist, affords no support to the present bill. Nor is the bill in form or substance a bill of interpleader. Nor can the jurisdiction of this court over the settlement of estates of deceased persons be here invoked; such settlements belong primarily to another court, and the bill does not seek such a settlement. It might serve convenience if the heirs-at-law, administrator cum testamento annexo and the grantees of complainant could be brought in and compelled to submit to a decree directing the complainants to restore to the several purchasers their purchase-money and to the heirs the rents collected and to the administrator any personal assets which conrplainants maj' have received, and directing the purchasers to restore to the heirs the possession of the real estate by them purchased and adjudicating and apportioning equitable allowances for services performed and expenditures made by complainants ; but I find no warrant for the assumption of such ]jower or authority by this court, and no precedent has been cited to sustain such a jurisdiction. The rights of the respective parties are such that the remedies afforded by the law courts must be deemed adequate, even though they may not be found entirely convenient.

I will advise an order dismissing the bill.


author: Beaming, V. C.

text:
    Realty Title and Mortgage Company v. Mattie Schaaf et al.
    [Submitted December 17th, 1912.
    Determined December 24th, 1912.]
    When the husband did not join in a mortgage of the separate estate of the wife, it was not valid as a mortgage or a specific lien, but was effective to show that the debt was contracted on the credit of the married woman’s separate estate, and equity will declare and enforce a lien against it.

      Mr. 6-. Dore Cogswell, for the complainant.

      Mr. Frederick 4. Bex, for the defendants.
   Beaming, V. C.

The bill is filed to foreclose a mortgage made by Annie Horner to George H. Briggs. The mortgage is now owned by complainant, and defendants are the heirs-at-law of the mortgagor.

Annie Horner, the mortgagor, was a married woman at the time the mortgage was made by her. Her husband (now deceased) did not join in the mortgage. The mortgage does not disclose that the mortgagor was a married woman, and the acknowledgment to the mortgage does not certify that she was examined by the acknowledging officer separate and apart from 'her husband.

The evidence discloses that the real estate described in the mortgage was the separate estate of the mortgagor and that the mortgage was executed by the mortgagor for money loaned to her by the mortgagee on the credit of her separate estate, the loan having been made at the time the mortgage was executed.

It is well settled in this state that under the circumstances stated, the instrument intended as a mortgage is not valid as a mortgage or specific lien; the failure to comply with the statutory requirements is fatal to the mortgage as such. It is, however, equally well settled that under the circumstances stated, a court of equity will declare and enforce a lien against the separate estate for the debt intended to be secured by the mortgage. While the mortgage is not effective as a lien, it is effective to show that the debt was contracted on the credit of the married woman’s separate estate, and that she intended it to be chargeable thereon. Wilson v. Brown, 13 N. J. Eq. (2 Beas.) 277; Harrison v. Stewart, 18 N. J. Eq. (3 C. E. Gr.) 451; Armstrong v. Ross, 20 N. J. Eq. (5 C. E. Gr.) 109; Homœpathic Mutual Life Insurance Co. v. Marshall, 32 N. J. Eq. (5 Stew.) 103, 112. No equitable principle can find more perfect justification than this in its inherent quality of justice and fairness; it is merely operative to restore that which is due in conscience. An exemplification of the principle is to be found in those cases in which a married woman has contracted to sell separate estate under an agreement which cannot be specifically enforced against her, and has received a portion'of the purchase price; in such cases courts of equity have declared liens for the amounts paid and thus 'enforced restitution. Pentz v. Simonson, 13 N. J. Eq. (2 Beas.) 232, 235; Pierson v. Lum, 25 N. J. Eq. (10 C. E. Gr.) 390.

It also appeared at- the hearing that at the time the mortgage was executed the mortgagor and her husband were living separate and apart from each other. In view of the power and duty of this court to declare and enforce a lien under the circumstances first above stated, I think it unnecessary to here inquire whether the separation was of a nature to render tire mortgage here in question valid as such.

The bill is silent touching the nature of the indebtedness for which the mortgage was given. While the prayer is probably adequate for appropriate relief, I think the bill should be amended to conform to the proofs before a decree is signed. Upon such amendment being made I will advise a decree declaring a lien for the amount of the debt and directing its enforcement by a sale of the premises described in the bill.


author: Leamifg, V. C.

text:
    Charles Ross et al. v. Amelia Ross Sparks et al.
    [Submitted May 9th, 1912.
    Determined May 25th, 1912.]
    1. Where the single issue pfesented in two successive suits between the same parties is the same, and both suits are heard and determined upon the same evidence, the determination of such issue reached in the earlier suit is considered conclusive in the later one.
    2. Evidence touching a ceremonial marriage examined and held, sufficient to establish a valid marriage, whether the ordained minister who conducted the marriage ceremony was “stated” or not.
    On bill for accounting. Einal hearing on bill, answers, replications and proofs.
    in this suit complainants seek an accounting as to a certain bequest of $6,000 made by the will of Samuel Ross to certain trustees, and also seek to hare the bequest declared a lien on the real estate of which the said testator died seized. The present claim of complainants is made under the same clause of the will of Samuel Ross, which is the basis of litigation in Sparks v. Ross, the last report of which is contained in 79 N. J. JEq. (9 Buck.) 99, which decision has since been affirmed by the court of errors and appeals, for the reasons stated in the opinion filed in this court. In Sparks v. Boss the bill was filed by residuary devisees to quiet title to the real estate named in the clause of the will referred to; in the present suit the bill is filed for the recovery of the personal property referred to in the same clause of the same will. The present suit has been submitted on the testimony taken at the last trial of Sparks v. Ross, above referred to, except as to the testimony of Maria Prehl, whose depositions were again taken for use in this suit. It was also stipulated that the record in Sparks v. Ross, and the depositions of Maria Prehl, should be here received subject to all objections.

      Mr. John J. Crandall and Mr. Timothy J. Middleton, for the complainants.

      Mr. Thomas E. French, for the defendants.
   Leamifg, V. C.

The record upon which this suit is submitted is essentially the same record which was before this court in Sparks v. Ross, 79 N. J. Eq. (9 Buch.) 99, which record has since been before the court of errors and appeals on an appeal from the decree entered in this court, the appeal having resulted in an affirmance of the decree. In each suit the single issue presented is whether the persons who are complainants in this suit are children of Edmund Ross, born to him in lawful wedlock. The conclusion reached in the former suit, both here and in the appellate court, was that the evidence did not justify an affirmative finding on that issue. TSTo new evidence having been presented, this court is now required to determine the same issue upon the same evidence. Under these conditions it is clearly unnecessary, if not, indeed, inappropriate.; to here- attempt an amplification of the views already expressed in Sparks v. Ross, supra; views adopted by the court of errors and appeals should be here considered conclusive.

Complainants’ counsel now contends, however, with great earnestness, that Jacob Loundenslager, the minister of the gospel who performed the marriage ceremony between Edmund Ross and Maria Moose (now Maria Prehl), was not a “stated” minister of the gospel, and that the documentary evidence of that marriage, as well as certain other evidence relating to it, should be excluded, and urges that this aspect of his claim has at no time been directly passed upon. As to the claim of counsel that this contention has not been heretofore considered he is clearly in error. In Sparks v. Ross, 75 N. J. Eq. (5 Buch.) 550, Mr. Justice Swayze, in delivering the opinion of the court of errors and appeals, upon the same record now present touching the ceremonial marriage referred to, stated with reference to the same claim now made by counsel, as follows: “Some question was raised as to the proof of a ceremonial marriage to Maria Moose, but in the view we take of the case, that question becomes comparatively unimportant, for we think the evidence is sufficient to establish a valid marriage between Edmund Boss' and Maria Moose at that time, provided they were both then free and capable of contracting marriage.” Counsel for complainants appears to persistently overlook the fact that even though it should be conceded that the clergyman who performed the marriage ceremony in question was not a “stated” minister and was not authorized by our statute to celebrate marriages, and that the marriage records should for that or any other reason be excluded, there yet remains the testimony of Maria to the effect that she and Edmund, in the home and in the presence of her parents, stood before the clergyman in question for the purpose of being married while the marriage ceremony was performed, and immediately thereafter lived together as husband and wife in the home of her parents. If this marriage ceremony occurred, as stated by Maria —and it cannot properly be doubted — Maria and Edmund thereby became husband and wife, if they were both at that time capable of contracting marriage, whether the ordained minister who conducted the marriage ceremony was “stated” or not.' Atlantic City Railroad Co. v. Goodin, 62 N. J. Law (33 Vr.) 394; Stevens v. Stevens, 56 N. J. Eq. (11 Dick.) 488. The competency of this testimony cannot be doubted; Maria was one of the parties to the marriage contract concerning which she has testified. Bish. M., D. & S. §§ 1047, 1056.

■ For the reasons stated in Sparks v. Ross, supra, I will advise a decree dismissing the bill.


author: Howell, V. C.

text:
    William Koch, Jr., v. Bertha E. Feick, executrix, &c. William A. Smith, administrator, &c., v. Bertha E. Feick, executrix, &c.
    [Submitted October 22d, 1912.
    Decided October 28th, 1912.]
    1. A bill alleged an express trust in complainant’s favor existing against defendant’s testator created by complainant having delivered a sum to testator for investment, and also alleged that testator had in his custody certain money as an- executor of complainant’s intestate, and prayed for an accounting thereof, and also moved for an injunction to prevent defendant executrix from having the estate declared insolvent by the orphans court. — Held, that complainant was not entitled to move for the injunction, the statute giving jurisdiction to award such relief merely giving it in favor of “creditors,” meaning'thereby persons to whom decedent owed an obligation to pay money for which an action would lie.
    2. A decree of insolvency in the orphans court operates only in favor of creditors, and only against property which is applicable to pay their debts, so that such a decree would not apply to trust funds held by a decedent at the time of his death so as to deprive the eestui quo trust of the property therein.
    3. The orphans court has no jurisdiction to declare a trust; only the chancery court having jurisdiction to follow trust funds.
    On motion for preliminar}' injunction and receiver.

      Mr. Ernesi E. Keer, for William Koch, Jr.

      Mr. Maximilian T. Rosenberg, for William A. Smith, administrator.

      21r. William L. Morgan and Mr. John R. Ilardin, for Bertha E. Eeick, executrix.
   Howell, V. C.

Charles A. Eeick died about a year ago and his estate is now being administered by his executrix under the terms of his will. Application has been made to the orphans court for a decree adjudicating the estate to be insolvent. Shortly before the death of Mr. Eeick, the complainant Koch delivered to him the sum of $4,500 to be invested by him upon a bond and first mortgage to be executed by one Ida Meyer, covering property in Mercer street, in the city of Newark. Eeick died without having made the investment. He had on deposit in his own name in various banks and trust companies in Newark at the time of his death a cash balance exceeding $80,000. He had no separate account or deposit of the Koch money. Koch filed his bill to establish a trust in his favor, and hé now moves for an injunction to prevent Eeick’s executrix from proceeding to have the estate declared insolvent by the orphans court; and he prays for a final decree declaring that the money so deposited by him with Eeick is a trust fund entitled to payment out of the cash in Eeick’s bank account at the time of his death, upon the ground that it includes this trust fund.

The complainant Smith is a substituted administrator. He files his bill alleging that one Josephine Eassheimer died in February, 1911, leaving a will by which she appointed the said Charles A. Feick executor thereof, and that Eeick had in his custody as such executor upwards of thirty thousand dollars belonging to the Eassheimer estate which was deposited in his individual name in one or more banks or trust companies in Newark. He prays that Eeick’s executrix-may account for-said moneys and that she may be directed to pay over to him the property belonging to the estate of the said Eassheimer, and that she may be enjoined from further proceeding in the orphans court, that she may account in this court, and that a receiver of the estate of the said Eeick may be appointed.

The motions made in these two causes were heard together. It is manifest that their object is to withdraw all the litigation over the Eeick estate and the accounting by the executrix from the orphans court and to subject it to the jurisdiction and procedure of the court of chancery, and this upon the ground that the affairs of the estate are so complicated, and the claims made thereto of such a varying character, and the rules of law ‘arising therefrom so involved, that the orphans court cannot administer justice between the parties.

I think that a single glance at the situation will make clear the fact that the complainants are in no position to insist upon their motions. The orphans court has jurisdiction of the subject-matter involved in the settlement of the estate and can easily obtain jurisdiction over the parties in interest. The sections of the statute which give this jurisdiction give it on behalf of creditors, and I am inclined to think on behalf of creditors only. By the use of the word “creditors” T mean persons to whom the deceased at the time of his death owed a debt of obligation to pay money for which an action or suit would lie. New Jersey Insurance Co. v. Meeker, 37 N. J. Law (8 Vr.) 300. A close reading of the statute gives no other result nor any'other relief to any other class of persons. The complainants in these two suits do not claim to be creditors, they do not assert a right which is cognizable in the common law courts; they seek to follow trust funds which they allege were in the custody and possession of the deceased at the time of his death as trust funds strictly; in the one case as trust funds under an implied trust, and in the other as trust funds under an express trust; but in either case it is a trust fund which is attempted to be followed. On the argument counsel for both complainants disclaimed any intention whatever of putting themselves upon the footing of creditors.

But they say that a decree of insolvency passed by the orphans court, immediately and by its own force fastens the claims of creditors upon the whole fund in the hands of the executrix, so that it will be impossible for them in case they shall obtain decrees in accordance with the prayers of their respective bills, to procure satisfaction of those decrees out of the fund which the orphans court has so appropriated to persons who stand in the relation of creditors of the deceased. I do not look upon the orphans court decree of insolvency as one having that force and effect. It is a decree in favor of creditors only and can fasten their debts only upon those funds which are applicable to the payment of debts. If the deceased had in his possession at the time of his death any assets which were held by him in trust, I fail to see how a decree of the orphans court can take away from the cestui que trust anjr right which he or she has in those assets. It is well settled that the orphans court has no jurisdiction to declare a trust. It was so held by the prerogative court In re O’Callaghan, 64 N. J. Eq. (19 Dick.) 287, and In re Lippincott, 68 N. J. Eq. (2 Robb.) 578, while on the other hand it is quite as well settled that this court and this court only has jurisdiction to follow trust funds. Smith v. Combs, 49 N. J. Eq. (4 Dick.) 420; Standish v. Babcock, 52 N. J. Eq. (7 Dick.) 628. (This ease was reversed in 53 N. J. Eq. (8 Dick.) 376, not upon the law of the case as applied to the following of trust funds, but as to its application.) Hunt v. Smith, 58 N. J. Eq. (13 Dick.) 34, and Ellicott v. Kuhl, 60 N. J. Eq. (15 Dick.) 333; Knatchbull v. Hallett, 13 C. D. 696; 49 L. J. Ch. 415.

Upon what theory then can the complainants move to change the jurisdiction of the administration of this estate? Having disclaimed the position of creditors, and having elected to pursue a remedy in this court which is entirely adverse to the interests of the creditors, how can they compel an adjudication upon disputed claims and all the other questions that necessarily arise in'the ascertainment and settlement and distribution of an insolvent estate ? To allow them to do this would be to put the control of the litigation into the hands of persons who are not interested in the questions to be decided; they are interested only in following a trust fund, and to make them masters of the whole litigation would be an anomaly indeed. I am, therefore, of the opinion that the complainants are not on any such footing as will justify them in pressing their motions; they are not creditors in any sense in which that word can be used; they claim to have the ownership of a portion of the fund, but they have no interest in the whole fund, becairse the whole fund is not and cannot be included in the trusts sought to be enforced. The scope of their respective hills cannot include the general administration of the estate; they are simply seeking relief for what they claim is a breach of. trust committed by Mr. Eeick in his lifetime. In my opinion the situation disentitles them to any relief 'on this motion. I do not think that the decree of insolvency in the orphans court can affect the substantial rights of the complainants in any degree. If, before distribution of the fund by the executrix, the complainants shall have obtained the decrees which they seek, they will be able to enforce them against the executrix and against the funds in her hands. I do think, however, that the siatus quo of the general fund should be maintained'until the final hearing of these causes. This I understand the counsel for the executrix will agree to, and, in fact, considering the amount of litigation in the orphans court which was foreshadowed by the statements of counsel on the argument, it is quite apparent that final decrees can be reached here quite as early as a decree for distribution can be reached in the orphans court. ■ If the complainants’ counsel are not satisfied with the statement of counsel for the executrix on this point, I will advise an order for an injunction to prevent the distribution by the executrix under any decree of the orphans court until the final decree shall have been passed in these causes.

Otherwise the motions must be denied, with costs.


author: Howell, Y. C.

text:
    Paterson and Ramapo Railroad Company and Erie Railroad Company v. The Mayor and Aldermen of the City of Paterson.
    [Submitted October 30th, 1912.
    Decided November 11th, 1912.]
    The “construction of a highway,” within' the act of April 21st, 1911 (P. L. 1911 p. 888 § 21), providing that no highway shall be constructed across railway tracks at grade without first obtaining permission therefor from the board of public utility commissioners, contemplates such grading, curbing, flagging, planking, or other physical alteration or addition as may be necessary to prepare it for use, and the highway is not constructed by simply laying it out on paper and filing a map, since “construction” implies the performance of work; the fitting of an object for use or occupation in the usual way, and for some distinct purpose; to put together the constituent parts; to build; to fabricate; to form and to make — and hence that section applies to a highway crossing laid out by ordinance, but not physically constructed, prior to its enactment.
    On final hearing on bill, answer, replication and proofs.

      Mr. Charles Bradley, for the complainants.

      Mr. Edward F. Merrey, for the defendant. •
   Howell, Y. C.

In 1841 the complainant the Paterson and Ramapo Railroad Company was incorporated. It constructed a railroad sixty-six feet wide through the city of Paterson and across the plot of land now in controversy. Later, the Erie Railroad Company, the other complainant, acquired land on both sides of the track of the Paterson and Ramapo Company at this point. These rights of way were subsequently covered with railroad tracks; they now comprise a part of the main line of the Erie Railroad Company. Some time prior to May 20th, 1908, the city of Paterson had opened a street called Sixth avenue which extended to the line of the right of way of the railroad on both sides thereof, but until that date no attempt had ever been made.to continue the same across the railroad. On May 18th, 1908, the board of public works of the city passed an ordinance to lay out and open Sixth avenue across the right of way of the complainants, designating the same by the location of the centre line, and providing that this avenue between the points so laid out and established should be opened and an assessment of the benefits and award of damages made in accordance with law. This ordinance was approved by the mayor on May 20th, 1908, but before any proceedings could be taken under it it was attacked by writ of certiorari. The supreme court upheld the validity of the ordinance by its judgment entered on August 24th, 1911. Subsequently the case was reviewed by the court of errors and appeals; the judgment of the supreme court was affirmed in June, 1912. After the decision of the supreme court the city, on September 14th, 1911, served upon the complainant the Erie Railroad Company a notice requiring it to construct a good and sufficient passage across its right of way at Sixth avenue, and to plank the street, pay for the roadway and construct a sidewalk, and further notifying it that in default of doing this work within thirty days the city would do it and charge the cost thereof to the said complainant. This notice was given in pursuance of a resolution or ordinance to that effect passed on September 6th, 1911. After the service of this notice the complainants filed their bill to restrain the city from proceeding to plank the crossing and construct the sidewalk, upon the ground that it would be a violation of the twenty-first section of the act providing for the creation of a board of 'public utility commissioners, approved April 21st, 1911, which provides as follows:

“21. No highway shall be constructed across the tracks of any railroad company at grade, nor shall the tracks of any railroad company, street railway or traction company be laid across any highway so as to make a new crossing at grade, nor shall the tracks of any railroad or street railway or traction company be laid across the tracks of any other railroad or street railway or traction company, without first obtaining therefor permission from the board; provided, however, that this section shall not apply to the replacement of lawfully existing tracks.”

The only question raised-is whether the foregoing section applies to the case, and, if so, to what extent, or, in other words, whether the city of Paterson may, to use the wording of the statute, “construct” a highway across the tracks of the railroad company without permission of the board of public utility commissioners.

The operative part of the section appealed to is that “no highway shall be constructed across the tracks of any railroad company at grade,” without first obtaining therefor permission, &c., and the first question that arises is what is meant by the “construction of a highway.” Does it mean simply to lay out the highway on paper and file a map thereof in some public office, or does it contemplate such grading, curbing, flagging, planking or other physical alteration or addition as may be necessary to prepare the crossing for use by horses, wagons and other vehicles, by foot passengers, and by the ordinary traffic of a large manufacturing city? The plain words of the statute indicate to my mind that the latter is tire intention. To survey a piece of land and make a map of it, to designate it as a public street, and to file the map, cannot in any sense be said to be the construction of a highway. To construct a building it is not sufficient to make a drawing of it and file it; it is necessary to make a physical erection which can be used as buildings ordinarily are used, and so I think that a highway cannot be said to be “constructed” until it shall have been made ready for actual use as a highway. The word “construction” implies the performance of work; it implies also the fitting of an object for use or occupation in the usual way, and for some distinct purpose; it means to put together the constituent parts, to build, to fabricate, to form and to make. The use of the word in connection with a highway manifestly means the preparation of the highway for actual ordinary use, and not for mere delineation thereof on paper, or the taking of land for the purpose of a street.

My attention has been called to the case of New York and New England Railroad Co. v. Waterbury, 10 Atl. Rep. 162. There the legislature of Connecticut had passed an act providing • “That hereafter no new highway or portion of a highway shall be constructed across any railroad at grade.” It was held that this statute rendered the construction of 'a grade crossing illegal, although the highway had been laid out and was partially constructed before the passage of the act. In considering the statute the court said: “It (the statute) means that although a highway may have been previously laid out, partially constructed and even built upon if it has not actually been completed for public use across the rails of the railway, such crossing shall not thereafter be made. This peremptory arrest of the completion of a highway lawfully commenced is a seeming interference with the rights of individuals and of the public, but only in seeming; in fact, such crossings are public nuisances dangerous to human life, and no man has a vested interest in the creation or continuance of such a nuisance.” A similar ruling was made by the court of appeals of New York in Railroad v. Buffalo, 200 N. Y. 113. There the city of Buffalo attempted to continue Delavan avenue across the tracks of the plaintiff, the city having many years before obtained the right to do so. In the meantime, however, the legislature passed an act requiring the permission of the public service commission to the construction of crossings over railways. The appellate division held that the city should be enjoined from extending the avenue across the tracks of the railroad company until it had secured the determination by the public service commission as to whether such avenues should be constructed over or under said railroad or at grade and the manner in which such crossing should be constructedj thus declaring the paramount jurisdiction of the public service commission over a situation which had been created before its establishment, and holding that the municipal corporation had not acquired any vested right as against the subsequently declared public policy of the state. This was affirmed by the court of appeals. Incidentally it may be observed that the New York act uses the same word (construct) which is the basis of the controversy in this case, and gives it the same interpretation that is here contended for by the complainants.

On the other hand, the city relies upon the case of Ligonier Valley Railroad Co. v. Latrobe, 65 Atl. Rep. 548. The Pennsylvania statute of 1901 provided that, except as elsewhere in the act prescribed, “All crossings hereafter established,- whether of highways by railroad or of railroad by highways shall * * * be above or below the grade thereof.” In that case the borough of Latrobe opened two streets across the railroad. Two years later it served the railroad company with notice to provide and lay proper crossings at the intersection of the railroad with these streets. The company failed to comply, and the borough took steps to put down the crossing. The bill was then filed to restrain it from making the construction. The court held that inasmuch as the highway, including the crossing, had been laid out before the statute of 1901 was passed, the statute did not and could not apply, and that therefore the borough had the right to construct the crossings, and the injunction was refused. In its facts the case resembles the one in hand, but I am unable to follow its reasoning or reach the conclusion that the court did reach, unless there is a clear distinction between “establishing” a crossing and “constructing” one. I am constrained to follow the reasoning of the Connecticut and New York courts as announcing the more reasonable rule of statutory construction.

As it looks to me the legislature has by the act in question formulated a public policy for the state which cannot be controlled, enlarged, restricted, or varied by the courts; they can only enforce the rule which the legislature has prescribed. It was the manifest intention of the legislature to place the whole question of railway crossings at grade under the control of a central body having administrative functions, for purposes of convenience of safety and of uniformity of procedure,' and for this purpose it has conferred upon the board of public utility commissioners plenary power to act for the protection of the people from such accidents as are liable to happen at railway crossings. This policy appears in the legislation of this state as far back as 1862, and has been continued by a series of legislative declarations tending to the abolition eventually of grade crossings. In what is substantially its present form it appears first in the act of 1909 (now repealed, P. L. 1909 p. 281), section 3 of which forbade the construction of any new street or highway across the tracks of -any railwaj'- company at grade without the permission of -the board of railway commissioners, and it has been enlarged and extended by the act of 1911, the twenty-first section of which is hereinabove quoted at .length, so as to include the construction of highways generally across railways at grade.

I am of the- opinion therefore that the permission of the public utilities commission must be obtained before the crossing can be actually constructed, and that such permission must be sought by the city for the reason that it is the moving party.

I will advise an order for an injunction as prayed.


author: Howell, Y. G.

text:
    The Knickerbocker Trust Company, trustee, &c., v. Carteret Steel Company et al.
    [Submitted November 25th, 1912.
    Decided December 17th, 1912.]
    1. A judicial sale fairly conducted vests in the purchaser an equitable title, which the court must recognize and protect. He becomes practically a party to the suit, submitting himself to the jurisdiction of the court in all matters connected with the sale, and may be compelled to complete the purchase, and may himself compel the court’s officer to convey the premises to him upon -his compliance with the conditions of sale; and the sale may be set aside by a proceeding in the original cause without the filing of a new bill.
    2. While a purchaser at a judicial sale may be deprived of his rights thereunder by proof of what would amount to a fraud, a sale made without irregularity or fraud will not be set aside for mere inadequacy of price, unless the discrepancy between the true value and the amount brought at the sale amounts to a fraud on the parties in interest, and will not be opened on the mere representation that more money may be obtained for the property.
    3. Objectors to the confirmation of a fairly conducted judicial sale have the burden of showing inadequacy of price or some fraud on the part of the purchaser.
    4. Evidence, on motion to set aside a master’s sale of five hundred acres of rough mountain woodland, valuable, if at all, from the presence of. ores, for $42,750, held not sufficient to show inadequacy of price.
    5. Where the judge, in, open court, asked the parties for suggestions as to the name of a master, and made his own selection without objection by any party, the right to object thereto was waived.
    6. The objection that a master appointed to make a judicial sale was nominated by complainant’s counsel cannot be urged against the purchaser.
    On objections to master’s sale and motion to set 'the same aside.

      Mr. Frederick W. Rope, Mr. William J. Leonard and Mr. Charles R. Snyder, for the motion.

      Mr. John W. Harding, contra.

      Mr. John B. Humphreys, for the complainant.
   Howell, Y. G.

The bill in this cause sought the foreclosure of a mortgage made by the Carteret Steel Company to the complainant to secure an issue of bonds. The facts concerning the suit are set out in a report of the case which' will be found in 9 Buch. 501. The final decree, filed March 20th, 1912, directed .an execution for the sale of the mortgaged premises to be issued to John S. Gibson, tire insolvency receiver of the company, and the premises were advertised by him for sale on June 24th, 1912. They were on that day struck off to a bidder for the sum of $36,750. On the coming in of the report of the sale objections were made to its confirmation by the parties who are now objecting, or some of them, and counsel for the complainant conceding that the appointment of the receiver to malee the sale was an irregularity did not object to having the sale set aside, and this was done. Application was then made to amend the decree by ordering the issue of the execution to William I. Lewis, one of the masters of this court; the amendment was made and a new execution was issued, and the premises were advertised for sale by him on October 10th, 1912. On that day he sold the premises to Robert K. Walton for the sum of $42,750, which he reports was the highest and best price that the said property would, at the time of the sale, bring in cash. Objections are now made to the confirmation of this sale, and the matter comes before the court on affidavits which are very voluminous and which apparently set out in detail all the facts in relation to the said sale.

The objectors, instead of filing mere .objections,, included in their papers a petition to set the sale aside upon grounds which they conceived were not within tbé exceptions. At the same time certain other parties, who are likewise objecting to the sale, filed an original bill to set aside the proceeding. I have carefully read and considered all these documents and have come to the conclusion that the sale should be confirmed, the petition dismissed and the motion for an injunction under the original bill be denied, and my reason,? therefor are as follows:

The questions to be decided are two — first, whether the property brought a fair price, and second, whether anything was done at the sale by the complainant or the purchaser or their counsel, or anyone in combination with them, to prevent a fair sale or to prevent the property from bringing a fair price. Let us first consider the position of a purchaser at a judicial sale. A judicial sale fairly conducted, with no fault or fraud on the part of the purchaser, vests in him an equitable title to the lands so purchased by him which this court must recognize, and which it is bound to protect. He becomes practically a party to the suit; he submits himself to the jurisdiction of the court as to all matters connected with the sale which relate to him in the character of purchaser. The sale may be set aside by á proceeding in the original cause without a new bill being filed. The purchaser may appeal from an order made in that proceeding, though he be not a party to the record in the cause. He may be compelled to complete the purchase by a summary order, and he may likewise compel the officer to convey the premises to him upon his complying with the conditions of sale. Townshend v. Simon, 38 N. J. Law (9 Vr.) 239; Conover v. Walling, 15 N. J. Eq. (2 McCart.) 167; Shann v. Jones, 19 N. J. Eq. (4 C. E. Gr.) 251. These cases are selections from a long line of authorities in this state, further citation from which appears to be unnecessary. They are sufficient to demonstrate that the purchaser by virtue of his purchase has, if the sale was fairly conducted, acquired an interest of which he cannot be justly deprived; his equitable right must be recognized and enforced.

He may, however, be deprived of this right by proof of what would amount to a fraud; he may not be deprived of it for the reason that he has purchased the property at less than its true value unless there is such a great discrepancy between the true value and the amount that the property brought at the sale as to amount to a fraud on the parties in interest. This branch of the law has been dealt with by the court of final resort in this state .in two notable cases. Morrisse v. Inglis, 46 N. J. Eq. (1 Dick.) 306, declares that it has long been the settled doctrine and practice of the courts of this state that judicial sales made "without irregularity or fraud, and not affected by accident or mistake, will not be set aside for mere inadequacy of price, and that official sales in this state will not be opened on the mere representation that more money may be obtained for the property. The reason given by the court for this position is that it is of the greatest importance to encourage bidding by giving to every bidder the benefit of bids made in good faith and without collusion or misconduct, and at least when the price offered is not unconscionably below the value of the property. As to whether a gross inadequacy of price will itself be considered proof of fraud or justify interference has brought out quite variant views from this court. Kloepping v. Stellmacher, 21 N. J. Eq. (6 C. E. Gr.) 328; Smith v. Duncan, 16 N. J. Eq. (1 C. E. Gr.) 240; Marlatt v. Warwick, 18 N. J. Eq. (3 C. E. Gr.) 108. The above-cited declaration was made in 1889, but as late as 1911 the same court announced the same doctrine in the case of Hoffman v. Godfrey, 79 N. J. Eq. (9 Buch.) 617, the opinion, quoting- from Morrisse v. Inglis, supra, says, “In the absence of fraud, irregularity, accident or mistake, judicial sales will not be set aside for inadequacy of price unless the inadequacy is so gross as to justify an inference of fraud.”

The land in dispute in this case consists of five hundred odd acres of rough mountain woodland in the upper part of Morris county, and an iron furnace and farm near Iiaekettstown, in Warren county. The mountain land has been for many years known as the Copperas Mine tract, and at one time appeared to have been considered of large value. Mining on the tract was long since abandonéd, presumably on account of competition from much richer mines. The tract gets its value, if it has any, from the presence and value of its ores, and if they have ever béen explored and located so that it is possible for an expert mining engineer to come at the value thereof, it does not appear in these affidavits. There are expressions of opinion which run into large values, but when the statements in regard thereto are carefully read it will appear that they are mere guesses made from either superficial examinations or from hearsay reports, or by persons whose opinions are of little value. Therefore, I cannot say that the amount bid for the property was a grossly inadequate price, or that it was inadequate at all. Considering the sale to have been fairly conducted, the burden of proof on the question of inadequacy of price is entirely on the objectors. I think they have failed, and the sale cannot therefore be set aside unless there was some fraud or some action on the part of the purchaser which amounted to fraud to which the objectors can appeal. A careful reading of the affidavits discloses no such situation. Every allegation on this point is denied by affidavits produced on behalf of the purchaser, and inasmuch as the burden of proof-is on the objectors, they must fail on this point also.

On the other hand, however, I am convinced from the whole case that the most scrupulous care was taken by the master to the end that the sale might be conducted not only fairly but in compliance with most technical rules. It may not be amiss to say that the master, who is a well-known member of this bar, has the full confidence of the court.

One other question was raised and argued with considerable vehemence; that related to the manner in which the master was selected, and it is claimed that instead of being selected by the court he was nominated by complainant’s counsel. At the time application was made to amend the decree by inserting the name of a master in place of the receiver, the court asked the parties for suggestions as to the name of the master, which was done openly and in the presence of all the parties, and the selection made by the court alone, without objection on the part of anyone. If the objection were valid it should not now be held to avail, for the reason that it has been withheld until it is too late to be acted upon, and must be held to have been waived. Besides, it is an objection that could not be urged against the purchaser. Simmons v. Vandegrift, Saxt. 55; Inskeep v. Lecony, Coxe 39; Johnson v. Garret, 16 N. J. Eq. (1 C. E. Gr.) 31.

The result is that the sale must be confirmed, and I will advise an order to that effect.

In the same case I have before me the original bill above referred to, filed by Mary E. McClees and others. This seeks the same relief that is sought by the objectors to the confirmation, of the sale, ancl prays for an injunction to prevent its consummation. Eor the reasons above given, I must deny the motion, and in that case will advise an order to that effect.


text:
    In the matter of the application of Alfred C. Baker for writ of habeas corpus v. Helen L. Baker.
    [Submitted January 9th, 1913.
    Decided January 15th, 1913.]
    Where parents live separately, either parent has the right, in a proper case, to see a legitimate child in the custody of the other parent, and the same right exists in case of a bastard child living with its mother, when the father contributes to its support, in' absence of a showing by the mother that such right is detrimental to the child’s best interests; the question of access being considered from the viewpoint of the child’s best interests.
    On petition for custody of children, &c.

      Mr. J. Harry Hull, for the petitioner.

      Mr. Walter L. McDermott, contra.

   Howell, V. C.

The parties to this controversy are husband and wife; they are now living separate from each other; they have two children, one about six years of age, which was born out of wedlock, and is therefore illegitimate, and the other about three years of age, whose legitimacy is not questioned. The father now petitions the court first for the custody of the children, and second, in case the custody shall be denied, for reasonable access to them. The case was heard on petition and answer thereto and a replication. The answer alleges as one reason why the father ought not to have custody’of or access to the children to be that he is not a fit person to exercise those privileges. Before going into the question of fact the parties submitted a question of law, viz., whether the father had a legal right to reasonable access to .his bastard child who is now in the custody of the mother, in the hope that a decision of the question of law might obviate any further inquiry into the facts. On the argument counsel for the father declined to press the claim for the custody of the children. This leaves only the question of reasonable access.

In the case of legitimate children there is no question about the right of access. Where the parents are living separately either has a right to see any child which is in the custody of the other, and if the parties cannot agree the court will make such order in the premises as seems best under all the circumstances; but the books are singularly void of precedents relating to access to illegitimate children, and while this question appears never to have arisen, I see no reason in the nature of things why this court should in a proper case be debarred of a right to give access to illegitimate children as well as to legitimate ones. It is said that chancery is the parens patrios and as such administers its jurisdiction for the benefit of infants. Why this jurisdiction- should be confined to legitimates is not apparent. Rossell v. Rossell, 64 N. J. Eq. (19 Dick.) 21. While the relations between the parents of illegitimates and the rights of inheritance and custody and the duty of maintenance are different from the same rights and duties as appertaining to legitimate children, the state has the same interest in the one as in the other, and it may well be that the right of this court to interfere would be a stronger right in case of illegitimate children of parties living sejoarate -than in- the case of legitimate' children known and acknowledged to be such, who might be expected possibly to have greater care than might be exercised -in the case of the illegitimate. The question is not one of custody; it is widely separated therefrom. It may be that in this case the mother would have a superior right to the custody of her illegitimate child, although even that is doubted. Hesselman v. Haas, 71 N. J. Eq. (1 Buch.) 689; Schoul. Dom. Rel. § 278, and cases cited hereinafter.

It was stated on the argument that the father in this case was making a monthly contribution to the maintenance of the children. Why has he not a right to see the children and determine for himself whether the stipend is being properly administered ? Why has he not an interest to satisfy himself by inspection that the illegitimate child is being properly clothed and nourished and that it has a proper home to live in, that care is being taken of its training, its education and its moral bringing up ?

The statutes of this state relative to the custody, care' and maintenance of children are supposed to relate solely to children born in lawful wedlock. Why the principles thus legislated upon do not apply with equal force to illegitimates I am not able to perceive.

The question is one of new impression and must be decided upon principle .and not upon authority, yet the cases relating to the custody of illegitimates may throw some light upon the obligations which ought to be imposed upon the parties to a controversy like the present one. In the case of Queen v. Nash, 10 Q. B. D. 454; 52 L. J. Q. B. 442, Sir George Jessell said that the question of custody of an illegitimate did not depend upon the mere legal rights upon habeas corpus, but upon equitable doctrines, and that regard was always had to the mother, the putative father and the relations on the mother’s side, that in such case there was that sort of blood relationship which, although not legal, gives the natural relations a right to the custody of the child. In the same case Lord Lindley said the question was not whether the mother is the legal guardian of the child, but whether as between her and strangers the court ought not to have regard to the natural relationship of the mother; and Lord-Justice Bowen said: “It is said that the mother has no legal right, but that is not the question; the question is whether in considering what is for the benefit of the child the court will have regard to the natural relations. As a general rule the mother is the proper person to have the custody of a child.. In this case when we consider what is for the benefit of the child the scale is turned by the respectability of the persons with whom she is to be placed.” The doctrine of this case was affirmed in the house, of lords in the case of Barnardo v. McHugh (1891), A. C. 388; 61 L. J. Q. B. 721. Halsbury, L. C., said: “I doubt very much whether any absolute rule can be laid clown, but in Queen v. Nash, supra,, this very question came for decision before the court of appeal, and Sir George Jessell appears to have pointed out the distinction between strict legal rights as to guardianship and the jurisdiction which a court of equity does and always did exercise in regard to such orders as are now in question. Sir George Jessell pointed out that the court is now governed by equitable rules, and that in equity regard was always had to the mother, the putative father and the relations on the mother’s side. Natural relationship was thus looked to with a view to the benefit of the child. There is in such a case, he says, a sort of blood relationship which, though not legal, gives the natural relations a right to the custody of the child. His lordship, I think, did not mean an absolute right, but such a right as he had already. described to be cpnsidered by a court of equity in making such orders.” The opinions of Lord Herschell and Lord Hannen were to the same effect.

This is the latest expression of the court of last resort in England, and it is entitled to our best consideration. If no general rule can be laid down respecting the custody of an illegitimate child, but if on the other hand the child’s own best interests are always to be consulted, wiry should not the same equitable doctrine be applied to the question of access?

To find out what is the best thing for the infant must be the object of the present inquiry. Animosities between the parents cannot control, because it may well be that they would be detrimental to the best interests of the infant. I think it is much better for the child to have the father visit it at stated times, not only to learn of its continued welfare, but to infuse into it at an early age the natural love and affection that it should have for a parent who is interested in its well being. In his later years he will be able more lightly to bear the ignominy of his origin if he has the consciousness that he is acknowledged to be on the same affectionate footing as the other child, notwithstanding the disparity between their legal situations.

The question, therefore, resolves itself into this: What is the best- thing for the child ? The reasons which I have herein set out on that subject seem to me to be controlling. The question of access like the question of custody is one that must he considered from the viewpoint of the child’s best, interests, and it is my opinion, therefore, in this case, that unless the mother can prove that the visits of the father to the child will be detrimental to the child’s best interests, or if the personal objection to the father shall be waived, an order should he made giving the father reasonable access to both children.


text:
    The Denver City Waterworks Company et al. v. The American Waterworks Company.
    [Submitted December 16tb, 1912.
    Decided January 31st, 1913.]
    1. A foreign corporation which has brought suit to wind up an insolvent corporation, and bolds shares of stock in the insolvent company, has a standing to petition the chancery court to direct the domestic receiver to discontinue his attack on the sale by a suit in the federal court.
    2. It is the dtity of one who brings a suit to include in it every cause of action available to him, which is consistent with the general purpose of bis bill, and an available claim not therein alleged is forever lost.
    3. The assets of an insolvent corporation were sold on foreclosure, and purchased by a Colorado corporation. Thereafter a person claiming' to be a creditor, stockholder, and officer of the insolvent company procured an order authorizing him to make its domestic receiver a defendant to a proceeding in Colorado to set aside the sale. The .receiver answered, claiming that the foreclosure proceedings were void, but judgment of the Colorado supreme court quieted the purchaser’s title, and enjoined the receiver from asserting any claim thereto. Subsequently the receiver brought suit in the federal court on practically the same grounds as those in the state courts. — Held, that it was the duty of the receiver to have set up in the former attack on the sale every ground which he had, and on his failure so to do, it was forever lost.
    4. The action of the chancery court on report of a referee, refusing to permit or direct its receiver to take proceedings in another state to set aside a foreclosure sale of the assets of the corporation, makes his right to attack the sale res judicata.

    5. A receiver is an officer of the court having certain statutory duties to perform, but at all times subject to the court’s jurisdiction.
    6. Where a domestic receiver, a party to a proceeding in another state attacking a foreclosure sale of the assets of the corporation in receivership, was forever enjoined from claiming title thereto, he will not thereafter be permitted to bring suit attacking the validity of the sale, since to do so would violate the full faith and credit clause of the federal constitution.
    7. Independent of statutory provision and simply as a matter of comity, a court will extend its aid to the receiver of a foreign corporation to enable him to get possession of property which should in equity be applied iu payment of its debts, and hence a receiver, a party to a proceeding in the. courts of another state attacking the validity of a foreclosure sale of the assets of his insolvent, and therein enjoined from claiming any title thereto, has exhausted his right to appeal to state comity, so that the chancery court will not thereafter permit him to attack such injunction order.
    8. Where a suit is a mere speculative one prosecuted as a stock jobbing operation, or for the purpose of extorting money, the chancery court ought not to allow its receiver to have any hand in it.
    9. By a delay of nearly twenty years, a receiver of a corporation whose assets were sold in foreclosure and its affairs wound up, forfeits all right to take affirmative action to have the foreclosure proceeding declared void.
    .10. A domestic receiver will not be discharged pending his suit in another jurisdiction to set aside a sale of the assets of a corporation in receivership.
    On motion, for directions -to tire receiver.
    This is an administration suit, its purpose being to wind up the affairs of the American Waterworks Company as an insolvent corporation. This company was incorporated on March 31st, 1891; on April 9th, 1892, the original bill was' filed in this cause alleging' the insolvency of the company and praying for the appointment of a receiver. On July 20th, 1892, the corporation was adjudged insolvent and one E. Hyde Rust was appointed receiver. Rust qualified and acted as receiver until his death on February 12th, 1901. The present receiver, John S. McMaster, was appointed March 11th, 1901, and he has been acting in that capacity hitherto.
    At the time of the organization of the defendant company certain properties at Denver and Omaha were transferred to it which were subject to mortgages for large amounts, and the defendant having defaulted in the payment of interest on the bonds secured by the mortgages on the property, proceedings were taken to foreclose the same, which resulted in final decrees against the company, and in pursuance thereof the property was sold at public auction and was struck off to one Dnderwood, representing a bondholders’ protective committee. These sales were afterwards confirmed by the proper court on April 23d, 1894; the property was then conveyed to Dnderwood, and thus the defendant corporation lost its title thereto. On February 25th, 1895, one Yenner, claiming to be a creditor, a stockholder and an officer of the defendant company, petitioned this- court for an order directing the receiver to take proceedings in Colorado to set aside the foreclosure sale because of certain alleged irregularities in procedure. This resulted in an order referring the matter to the receiver and directing William H. Corbin, his counsel, to inquire into the facts and report thereon to the court. Mr. Corbin reported adversely to the petition, and this court declined to make the order prayed for. Yenner then procured an order authorizing him to make the receiver a party defendant in his Colorado proceeding. These proceedings were begun on or about April 6th, 1896, by a bill filed in a Colorado state court to set aside the mortgages and the sales thereunder, to which bill the receiver (Rust) filed an answer disclaiming any right, title or interest in the cause of complaint, and protesting that he was not a necessary or proper party to the suit, and that the complainant did not state, facts sufficient to constitute any cause of action against him. After the death of Rust, McMaster filed an amended answer, and answers to cross-petitions which had been filed against him, claiming that the foreclosure decrees and all proceedings thereunder were void as against him and the company which he represented, for lack of jurisdiction of himself and the company, and claiming an avoidance of all the decrees, orders, sales and proceedings in the foreclosure suits upon the ground that it was attempted thereby to deprive him and his company of their interest, title and equity in the property in question, without giving them an opportunity to'have their day in court and without due process of law, and contrary to the constitutions of the State of Colorado and the United States. Issue was joined on these pleadings and a hearing had; on June 3d, 1902, the cause was decided, and subsequently a decree was entered by which it was declared that neither the said McMaster, as receiver, nor his company had any right, title, interest or claim in or to the mortgaged premises, but that the Denver Union Water Company was the owner thereof and had been in possession thereof since October 18th, 1894, and was entitled to have its title thereto quieted and set at rest, and thereupon it was adjudged that the title of the said Denver Union Water Company in and to the said mortgaged premises be and the same was thereby quieted, and that the American Waterworks Company, the defendant herein, and John S. McMaster, its receiver, their successors and assigns, and any and all persons claiming by, through and under them, were forever enjoined and restrained from asserting, setting up or claiming any right, title or interest of any kind or nature whatever in or to the above-described premises. This judgment was affirmed on appeal by the court of last resort of Colorado, and a writ of error was taken to remove the cause into the United States supreme court, upon the ground that there were federal questions involved, which writ was dismissed on February 20th, 1911, for want of jurisdiction.
    Subsequently, and on December 21st, 1911, Mr. McMaster filed an original bill of complaint in the United States district court "for the district of Colorado for what appears to be the same cause of action as that which was litigated in the Colorado state court suit. An examination of the pleadings filed by the receiver in the two cases disclose the fact that they are identical in substance, in purpose and in object.
    Application is now made on behalf of one of the complainants in the administration suit (the Denver City Waterworks Company), claiming to be a stockholder in the defendant corporation, to direct the receiver to discontinue this last-mentioned suit upon the grounds — firsts that there has already been an adjudication against him on the same questions; second, that he in his capacity of an officer of this court is violating an injunctive order añade by a competent court of a sister state and affirmed by its highest court of appeal; third, that state comity does not reach to the ¡joint of permitting any such proceeding on the part of a foreign receiver; fourth, that the receiver is not prosecuting the last suit in good faith on behalf of creditors and stockholders, but is permitting the said Yenner to use his name for the purpose of disturbing titles which vested under the foreclosure suit nearly twenty years ago.

      Mr. Norman Grey and Mr. John M. Enright, for the motion.

      Mr. Pierre P. Goolc, contra.

   Howell, Y. C.

' The status of the complainant to move the court on its petition for the relief now sought is questioned in limine upon the ground that it has no interest to protect, and therefore is a mere volunteer. I think it sufficiently appears that the complainant is still the owner or holder of shares of stock in the defendant, the American Waterworks Company, and if so, there can be no question of its right to prosecute this matter. Besides, it is the complainant in the suit in which the receiver .was appointed, and it comes with ill-grace for him to say that the proceeding in which he was so appointed is irregular, because he thus casts a reflection upon his own title. I hold, therefore, that the petitioner may properl}' take the proceeding now pending.

The first ground alleged on behalf of the motion is that there lias already been an adjudication against the receiver on the same question, and this must be true if, as a matter of fact, the remedy now sought in the suit pending in the United States district court is the same sought in the previous Colorado suit. But it is urged that there are new matters alleged in the present suit which were not alleged or dealt with in the first suit. I have-failed to find any such new matter, but if it exists, I do not see how under the rules of law, and the allegations in these pleadings, such new questions can be availed of by the receiver. The rule undoubtedly is that it is the duty of one who brings a suit to include in it every cause of action available to him, which is consistent with the general purpose of his bill, and the same rule must, from the nature of things, apply to defences. It is the duty therefore of every defendant to set up and prove every defence which he may have to the claim, and if either complainant or defendant shall omit to allege or prove any available claim or defence;, such claim and such defence are lost to him forever. I had occasion to examine this question in the case of Rosenstein v. Burr, manuscript opinion filed June 14th, 1912. That was a suit to compel the specific performance of a contract to convey lands. Previously, the defendant brought a suit in this court to cancel the contract on two grounds — first, that it had been obtained by fraud, and second, that it was executed in Connecticut on Sunday, and that it was void because violative of the Connecticut Sunday laws. The bill was eventually dismissed, and its prayer denied. In defending the suit for specific performance the answer denied the due execution of the so-called agreement and the tenders of performance charged in the bill. On the hearing other defences were interposed. One was that the agreement relied upon was invalid for lack of assent, and the other was that there was a stipulation that the agreement should not be binding until it should have been made tire subject-matter of a formal document, to be drawn by a scrivener and formally executed. These new defences were rejected upon the ground that they were available to the defendant as weapons of attack and defence in the first suit, and that having neglected to use them thus they were lost to him forever.

In New York Life Insurance Co. v. Bangs, 103 U. S. 780, the facts were that an action at law was brought against the life insurance company on policies of life insurance in which the plaintiff recovered. Subsequently, the company brought suit in equity to set aside the policies on the ground of fraud, to which the former recovery was pleaded as a defence. The court said: “The judgment in the action at law was a bar to this suit. Its recovery concluded all matters which might have been urged as a defence to the policies. A fraudulent purpose in procuring them, subsequently carried into execution, would have been a good defence. It was, in fact, originally pleaded and afterwards withdrawn. Its' withdrawal did not authorize a suit in another forum for its establishment against tire demand of the plaintiff. When an action at law is brought upon, a contract, the defendant denying its obligation, either from fraud, payment or release, or any other matter affecting its original validity or subsequent discharge, must present his defence for consideration. A recovery is an answer to all future assertions of the invalidity of the contract by reason of any admissible matter which might have been offered to defeat the action.”

The point is likewise well illustrated by the cases of Fourniquet v. Perkins, 7 How. 160; N. P. R. Co. v. Slaght, 205 U. S. 122; United States v. Cal. & O. Land Co., 192 U. S. 355; Beloit v. Morgan, 7 Wall. 619; Cromwell v. Sac County, 94 U. S. 351, which latter case has been followed in this state in Paterson v. Baker, 51 N. J. Eq. (6 Dick.) 49; Clark Thread Co. v. William Clark Co., 55 N. J. Eq. (10 Dick.) 658; Mercer County Traction Co. v. United Railroads, 64 N. J. Eq. (19 Dick.) 588. This point would seem to be decisive of the status of the domestic receiver and to be sufficient to justify granting the motion. It may well be that in the receiver’s present suit the defendant might plead the former adjudication against him, and it would seem that such a plea, under the authorities above cited, would necessarily prevail. What the practice and procedure on such a plea would be in Colorado we do not know, but it certainly would eventuate in some sort of hearing to determine its validity, and 1 see no reason why the parties should be put to the delay, trouble and expense of such a hearing. The remedy now sought by this motion goes to the root'-of the whole matter and obviates the necessity of further expense and delay. *

In addition to the adverse judgment in the Colorado court there is also an adj udication of distinct weight on the same subject-matter in this court. It appears that application was made here in 1895 for an order permitting or directing the receiver to take proceedings to set aside the foreclosure transaction, which proceedings, of course, must have been brought in Colorado, where the property lies ; that the matter was referred to William H. Corbin, who inquired into it, and béfore whom witnesses were sworn.' He made his report to the court; the court refused to make the order sought, which I take to be an adjudication on the exact situation that is now presented.

There are, however, other grounds equally .cogent upon which the decision of this motion may rest. The receiver is an officer of this court; he has certain statutory duties to perform, but he is at all times subject to this court’s jurisdiction. He was. a party to a suit in Colorado in which an injunction was issued against him enjoining him from doing the very thing which he subsequently did. To allow such a proceeding after it has once been brought to the attention of this court is for this court to allow one of its officers to affirmatively violate an injunction order made by a competent court of a sister state and affirmed by its highest court of appeals. There could be no justification for any such action on the part of this court, and it will not permit itself or its officers to be put in a position of antagonism to final decrees made in foreign jurisdictions, thus violating the spirit of the “full faith and credit” clause of the federal constitution, but more especially as the domestic receiver can only obtain admission to the courts, of the foreign state upon the ground of state comity, the extent of which is clearly set forth in National Trust Co. v. Miller 33 N. J. Eq. (6 Stew.) 155; Falk v. Janes, 49 N. J. Eq. (4 Dick.) 484, and Irwin v. Granite State Provident Association, 56 N. J. Eq. (11 Dick.) 244. It is there stated that independent of statutory provision and simply as a matter of comity, the court will extend its aid to the receiver of a foreign corporation for the purpose of enabling him to get possession of property which should in equity be applied in payment of its debts. Such an attempt was made in the Colorado suit. It failed, and I am constrained to hold that upon this point alone the receiver has exhausted his right to appeal to state comity on this question. It may well be that this objection might be urged in the 'present pending suit, but I make the same remark concerning that suggestion that was made in deciding the first point...

Lastly, it is urged that the receiver is not prosecuting his present suit in good faith on behalf of creditors and stockholders, but is merely lending Ms name and authority to a scheme devised by Vernier for speculative purposes. The affidavits on this point are meagre and consist principally of innuendo and argument, so that I am unable to say whether the point is well taken in fact or not. If the suit is indeed a mere speculative one, and is being prosecuted as a mere stock jobbing operation, or for the purpose of extorting money, this court ought not to allow its receiver to have any hand in it.

The proceedings in the foreclosure suit which are attacked were wound up and ended nearly twenty years ago, and if the plea of former recovery were not sufficient to oust the jurisdiction, it might be thought that the domestic receiver by his long delay had forfeited all right to take the affirmative action which he has taken in the present suit.

I am, therefore, of the opinion that the domestic receiver should, with all convenient speed, relieve himself of the burden of the prosecution of his present cause of action and cease to be its magister litis. There can be no objection, however, to his assisting any interested parties in procuring someone to take his place, or in changing the form of the suit to meet the necessity of his retirement, and to take such time therefor as may be reasonably necessary, and to this end he should perhaps render all assistance that may be reasonably required to reach the end in view.

' There is one other branch of the motion which has not yet been mentioned. The petitioner seeks to have the domestic receiver file his account and be discharged from the further performance of his trust. It appears that he has never received any assets, and it would seem useless to continue a receivership which is now over twenty years old and which has not yet brought any benefit or advantage to the company’s creditors. When the receiver shall have discharged himself from all duties and obligations in his present pending suit the question of his discharge will then be taken up.


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    Seton Hall College v. Calumet Construction Company et al.
    [Decided June 25th, 1912.]
    1. Evidence in relation to proof of the proper demand upon the contractor, and its refusal to pay the claimants under the stop notice, examined, and held insufficient.
    2. It is the settled law that a person to be in a position to impound money in the hands of the owner for his benefit by notice under the third section of the Mechanics’ Lien law must be a creditor of the contractor for work done' on or materials furnished for the building; and that his debt must be due, and that he must have demanded payment of the contractor of a sum which the contractor is obliged to pay at once, i. e., the exact sum due, or less.
    3. Where the contracts of certain subcontractors provide that such subcontractors shall be paid monthly on requisitions eighty per cent, of the value of the work done, and that the remaining twenty per cent, shall be withheld by the contractor until either the completion of the building or the completion of the work contracted for, and it appearing that all the demands that were made by these subcontractor claimants included the deferred percentages, all the notices served included the same percentages (these percentages not having come due until long after the demands were made and the notices served), such claimants cannot succeed upon their stop notices.
    4. Tlje contention that when the contractor failed, all the subcontracts must he considered as abandoned and that the subcontractors may then have an action at law for the cost of the labor and materials furnished by them respectively for the building, that the question of the amount of such claim can -be tried in this court, and that this court should then award to the claimant such sum of money as might be found to be owing to him upon that basis is untenable, because the damages in such ease will be unliquidated in their nature and would have to be assessed by a jury.
    5. Section 3 of the Mechanics’ Lien law contemplates a dealing with fixed sums and not with unliquidated amounts, there being no machinery thereby provided by which the owner can be certified as to the amount of unliquidated damages, nor any method provided by which he may be satisfied of the correctness of the demand for damages nor can the demand be made accurate.
    6. The fact that when the contractor failed these subcontractor claimants finished their respective contracts for the new contractor and received from him the remainder of their contract moneys, so that without the consent of the contractor they split up their contracts and causes of action, excludes them from coming within the letter or spirit of the lien law.
    7. Notwithstanding the contractor’s failure to complete the building in accordance with his contract, he still has an interest in the .fund in court for the reason that some portion of it may be paid to him, and his rights must therefore be kept in mind.
    On final hearing on decree of interpleader.

      Mr. Frederick F. Guild, for the JV E. Glasby Lumber Company.

      Mr. Gilbert Collins, for the receivers of the Calumet Construction Company.

      Messrs. Weller & Lichtenstein, for the Standard Concrete Steel Company and Maxwell & Dempsey.

      Mr. George II. Peirce, for the trustee in bankruptcy of Joseph Bleeker and the Browe Company.

      Mr. William R. Howe, for Spottiswood & Cusac.

      Mr. William II. Carey, for Thomas McCullough.

      Messrs. Lum, Tamblyn .& Colyer, for Gustave A. Kimmerle.

      Mr. Henry Hahn, for Morris Elsberg.

      Messrs. Herrmann & Steelman, for the South Amboy Terra Cotta Company.

      Mr. Gaetano M. Belfatto, for the Adamant Manufacturing Company. ,
   Howell, Y. C.

On June 7th, 1909, the Calumet company made an agreement to erect an addition to the college building of Seton Hall College, under which agreement the work was prosecuted until about February 14th, 1910, when a notice was served upon it requiring it to proceed to supply materials and workmen toward the performance of the contract within three days, else the owner would finish the work and charge the cost thereof to the Calumet company. The Calumet company did not comply, and the owner finished the building; it was completed in June or July of the same year, long after the service of the notices in controversy. There remained in the hands of the college after the completion of the work the sum of $17,280.21, which was paid into court upon a decree of interpleader, which resulted from the filing of the hill herein. Of the thirty defendants only fourteen appeared. At the hearing of these fourteen claims the following were allowed as claimed:

South Amboy Terra Cotta Company......... $800 15
Gustave L. Kimmerle....................... 51 03
Moses ESsberg ............................. 584 73
Spottiswoode Cusae Company............... 363 05
James McCullagh (first notice)............. 1,507 24
' “ “ (second notice)........... 850 57

The following claims are contested:

Glasby Lumber Company................... $4,200 00
Adamant Manufacturing Company........... 1,155 33
. Standard Concrete Steel Company......,.... 6,200 00
Maxwell & Dempsey........................ 2,000 00
Joseph Bleeker ............................ 2,300 00
The Browe Company....................... 904 21

These will be taken up and disposed of in the order named.

1. The Glasby Lumber Company Claim. — The stop notice on which this claim is founded is in proper form and demands that the owner shall pay to it the sum of $4:,000. The validity of the claim depends upon the proof of the proper demand upon the contractor and its refusal to pay. The notice was dated and served on‘January 27th, 1910; the contract between the claimant and the contractor required the claimant to furnish carpenter work and trim for the building for which the contractor agreed to pay the sum of $4,200. This was in the form of an estimate made by the claimant and accepted by the contractor. Mr. Glasby states that on Januarj' 21st and 22d he made a demand upon the contractor for the payment of $4,200, the whole amount of the contract moneto There had then been delivered material of the value of $3,829.75, so that clearly at that time there was a demand of a much larger sum than ivas due from the contractor to the claimant. On January 26th the claimant delivered material of the value of $170.25, bringing up the whole amount of the deliveries to $4,000, and this was made the basis of the stop notice that was served on the following day, but -no further or other demand was proved.' There was an attempt to prove a demand by Mr. Taaffe, the president of the claimant, about January 1st, which of course would have been too early, and again about eight or ten days before the notice was served, which likewise would have been too early, because at that time materials to the amount of not more than $3,829.75 had been delivered. Uo other demand was shown, and the failure in this regard invalidates the claim. It has been held in a long line of cases in this state, of which Reeve v. Elmendorf, 38 N. J. Law (9 Vr.) 125, and Kirtland v. Moore, 40 N. J. Eq. (13 Stew.) 106, are Avell knoAvn examples, that a person to be in a position to impound money in the hands of the OAvner for his benefit by notice under the third section of the Mechanics’ Lien law must be a creditor of the contractor fqr work done on or materials furnished for the building; and that his debt must be due and that he must have demanded payment of the contractor of a sum which the contractor is obliged to pay at once, i. e., the exact sum due, or less.

The doctrine of these cases was approved by the court of errors and appeals in the case of Hall v. Baldwin, 45 N. J. Eq. (18 Stew.) 858, and must be considered as established law in this state. It is true that Vice-Chancellor Eeed, in Evans v. Lower, 67 N. J. Eq. (1 Robb.) 232, allowed a claim as valid where there had been a demand of an excessive amount; but this ease seems to me to be distinguishable from the case in hand; if not distinguishable, it runs counter to the general current of authority in this state, including McPherson v. Walton, 42 N. J. Eq. (15 Stew.) 282, a case Avhich has been generally followed. It is likewise true that recently the legislature has permitted the claimant to demand the amount due to him, “specifying said .amount- as nearly as possible;” but this statute became effective not earlier than April 12th, 1910, some weeks after the notices in this case were served, and therefore is inapplicable to the present situation. The cases on this point are collected by Mr. Justice Pitney in the case of Beckhard v. Rudolph, 68 N. J. Eq. (2 Robb.) 740.

2. The Standard Concrete Steel Company's Claim. — Th'is. company entered into a-contract with the Calumet company for the fireproofing of the building in question. The contract was originally for $20,000; there was an addition to it of $100, making the total contract price $20,100, on account of which $7,000 were paid in cash prior to the failure of the contractor. The contract provided for monthly payments of eighty per cent, of the work done during the previous month, the reserve of twenty per cent, being held back until the completion of the contract. The requisitions for December, 1909, and January, 1910, amounted to $6,200. For this amount two notes were given, one for $1,000, the other for $2,200. They both matured prior to the service of the notice of February 23d, 1910, and, undoubtedly, that portion of the claimant’s contract money was due at the time of the service of that notice. While the evidence of the demand is. not as full and complete as might be wished, still I think it is sufficient to justify the allowance of the claim for $6,200, with interest from February 23d, 1910. The remainder of the claim was not due at the time of the demand and notice.

The Remaining Claims. — There is an objection to all the other disputed claims, and that arises from their respective contracts. Their contracts provide that they shall be paid monthly on requisitions eighty per cent, of the value of the work done, and that the remaining twenty per cent, shall be withheld by the contractor until either the completion of the building or the completion of the work contracted for. All the demands that were made by these claimants included the deferred percentages; all the notices that were served included the same percentages. These percentages not having come due until long after the demands were made and the notices .served, it is quite apparent that the claimants cannot succeed upon their notices. It is argued that when the contractor failed all the subcontracts must be considered as abandoned, and that the subcontractors may then have an action at law for the cost of the labor and materials furnished by them respectively for the building; that the question of the amount of such claim can be tried in this court, and that this court should thereupon award to the claimant such sum of money as might be found to be owing to him upon that basis. This question turns upon another*, viz., whether in a case of that sort the subcontractor’s claim is for liquidated or for unliquidated damages. This question was settled in this state by the cases of Boyd v. Meighan, 48 N. J. Law (19 Vr.) 404 and by Kehoe v. Rutherford, 56 N. J. Law (27 Vr.) 23; Wilson V. Borden, 68 N. J. Law (39 Vr.) 627. Tire damages in such case would be such as could not be readily computed. They axe unliquidated in their nature, and would have to be assessed by a TUT-

Besides the Mechanics’ Lien law does not have 'in view any dealings with unliquidated damages. Section 3 contemplates a dealing with fixed sums and not with unliquidated amounts. There is no machinery provided by which the owner can be certified as to the amount of unliquidated damages, nor 'any method provided by which he may be satisfied of the correctness of the demand; neither can the demand-be made accurate. The claimant would be unable to tell beforehand what the amount of his demand should be, and it would be very unsatisfactory for the owner to make any payments whatever on account of such claims. Everyone would have to be submitted to a jury before it could be paid. The owner would probably be right in refusing to recognize that kind of a demand for the reason that he could not be satisfied that the claim was correct.

The act contemplates that the owner shall pay only for labor and materials which have .been furnished for the building. A stop notice which is for unliquidated damages might include many things between the contractor and subcontractor which did not go into the building at all. Kirtland v. Moore, supra. Besides it appears that when the contractor failed these claimants finished their respective contracts for the new contractor and received from him the remainder of their contract moneys, so that without the. consent of the contractor these claimants split up their contracts and causes of action, doing in this respect what the Glasby company did. This I conceive to be not within the letter or the spirit of the lien law and contracts which come within its purview. I do not see how the claimants can succeed in establishing a portion of their debts against the contractor and another portion against someone else, unless there is a provision in the contract permitting it, or unless it is done with the consent, express or implied, of the contractor. Notwithstanding his failure to complete the building in accordance with his contract, he still has an interest in the fund in court, for the reason that some portion of it may be paid to him, as was done in Hall v. Baldwin, supra, and his rights must therefore be kept in mind. These considerations lead me to disallow the claims of the Adamant Manufacturing Company, Maxwell & Dempsey, Joseph Bleeker and the Browe Company.

The claims which are allowed will be paid in their proper order of priority.