text:
    In re account of New Jersey Title Guarantee and Trust Company.
    [Argued July 2d, 1909.
    Decided November 15th, 1909.]
    1. Under Orphans Court act (P. L. 1898 p. 762 § 180), authorizing the allowance to a trustee of such commission upon the income as the court deems just, provided that such allowance shall not exceed five per cent., the commission allowed may be less than five per cent., and ordinarily where the annual income is large the circumstances must be unusual in order to justify the allowance of that rate, though it may be properly allowed where the income is small.
    2. Where a trustee has only administered an estate for seven years, during which time his only services had been to receive and disburse the income of investments already made, and the trust will probably continue for thirty or forty years longer, a commission will not be allowed the trustee on the corpus of the estate upon an accounting.
    On the appeal of Addie Estelle Acer from a decree of the prerogative court.

      Mr. William A. Smith (Messrs. Coult & Smith on the brief), for the appellant.

      Mr. Gilbert Collins (Messrs. Collins & Corbin on the brief), for the respondent.
   The opinion of the court was delivered by

Swayze, J.

So far as concerns the commissions allowed the trustee upon the income of the estate, which were at the rate of five per cent., we think the circumstances of this case are sufficient to warrant the allowance of that amount, particularly in view of the fact that Mrs. Acer and her husband, who was a lawyer, both permitted the deduction of commissions at that rate without objection, and that a very large proportion of the estate was invested in the stock of a manufacturing corporation subject to the hazards of business and necessarily involving some risk to the trustee. In approving this allowance, however, we are not to be understood as approving the custom, if it be a custom, as suggested, of allowing a trustee five per cent, on the income in all cases. It is quite evident that a different test of the propriety of the allowance is prescribed by section 130 of the Orphans Court act. P. L. 1898 p. 762. The act authorizes the allowance of such commission upon the interest or income as the court shall deem fair and just, considering the actual pains, trouble and risk of the accountant. It then provides that the allowance shall not exceed five per cent.-—a sufiL eiently plain intimation that it may well be less. Eo doubt in the case of estates where the income is small, five per cent, may be properly allowed in order to give the trustee compensation sufficient to induce proper men to assume the responsibility, but in a case like this, where the annual income is large, it must require unusual circumstances to justify the allowance of the full rate of commission, and we are not to be understood as holding that, even in this case, so large an allowance would be proper in the future.

As to the allowance of a commission upon the corpus of the estate, we think that the trustee has administered the trust for so short a time, and has had so little to do with making or changing investments, that no commission on the corpus ought to have been allowed. The cestui que trust is of such an age that it may fairly be expected that the trust will continue for thirty or forty years longer, and if the present commission were allowed to a trustee who has served some seven years only, and has practically done nothing but receive and disburse the income of investments already made, it might result in leaving too small a fund available for the payment of future commissions.

We think the decree should be reversed and the record remitted, in order that a decree may be entered disallowing the commission on the corpus.

For affirmance—Yoori-iees, Yroom—2.

For reversal—The Chief-Justice, Garrison, Swayze, Eeed, Trenohard, Parker, Bergen, Minturn, Bogert, Yredenburgh, Gray, Congdon—12.


source: Caselaw Access Project

author: Trenchard, J.

license: Public Domain

text:
    Merchantville Field Club, respondent, complainant, v. Jane Wells et al., appellants, defendants.
    [Submitted July 5th, 1909.
    Decided November 15th, 1909.]
    1. Under the act of March 2d, 1870 (Gen. Stat. p. 3486). a party who is in peaceable possession of lands, claiming to own the same, where his title is disputed, may maintain a suit in chancery to settle the title, where no suit to test the validity of the title is pending', notwithstanding it appears on the preliminary hearing as to jurisdiction that he claims under a conveyance from the executors under a will of one to whom, before the conveyance, he bore the relation of tenant.
    2. A party claiming to be in peaceable possession of lands, claiming to own the same by virtue of a conveyance to him from, the executors under a will, is not l-equired to prove the due execution of the will in order to confer jurisdiction upon the court of chancery to retain his suit under the act of March 2d, 1870. Gen. Stat. p. 3486.

    On appeal from an order of the conrt of chancery advised by Vice-Chancellor Learning.

      Mr. David II. Goff and Messrs. French & Bicharás, for the appellants.

      Mr. Lewis Starr and Mr. Frederick A. Bex, for the respondent.
   The opinion of the conrt was delivered by

Trenchard, J.

The bill in-this canse was filed by the Merchantville Eield' Club to quiet the title to a tract of land in Camden county pursuant to the provisions of the act of March 2d, 1870, entitled “An act to compel the determination of claims to real estate in certain eases, and to quiet the title to the same.” P. L. 1870 p. 20; Gen. Stat. p. 84-86.

The bill avers that the complainant, a corporation of New Jersey, purchased of William IT. Alden and M. Mabel Smith, executors and trustees under the last will and testament of Clara P. Cazier, deceased, dated June 5th, 1902, for full consideration, and the trustees conveyed to the complainant in fee-simple the lands and premises described therein; that subsequently, when some question arose as to the proper execution of that will of Miss Cazier, the complainant, for the purpose of perfecting its title, obtained a deed from one William L. Worcester, surviving executor and trustee named in a former will of the same testator, dated October 16th, 1890, by which the executor in the last named will convejred all the right, title and interest of Miss Cazier in the same lands; that by virtue of such conveyances the complainant became and is the owner of such lands and at once assumed possession thereof, since which time it has been in the peaceable possession of the lands, claiming to own the same; that the heirs of Miss Cazier claim that her wills were not executed as required by law; that her heirs dispute and deny the title of the complainant, and that no suit is now pending to enforce or test the validity of such claims.

The defendants, heirs-at-law of Clara P. Cazier, answering, denied that the complainant became seized and possessed of the lands and premises, as claimed in the bill, but on the contrary alleged that Miss Cazier died intestate and that the title to the lands descended to her heirs-at-law; they admit that the lands are in the possession of the complainant, but aver that such possession is bjr virtue of a lease made by Clara P. Cazier in her lifetime; and they also deny that the complainant is in possession of the lands claiming to own the same.

Upon the issue thus framed the complainant submitted its proof for tire purpose of establishing the jurisdiction of the court under the statute, whereupon the vice-chancellor found that the essential jurisdictional facts had been established and that the complainant was entitled to maintain its suit, but awarded an issue at law to try the validity of such claim, in accordance with the application of the defendants.

The defendants appeal from that part of the order which finds jurisdictional facts sufficient to enable tlie complainant to maintain its suit.

Section 1 of the act of March 3d, 1870 (Gen. Stat. ¶. 8486), gives a party who is in peaceable possession of land, claiming to own the same, where his title thereto is disputed, a right to maintain a suit in chancery to settle the title, where no suit to test the validity of the title is pending.

In the present case it is not disputed that the vice-chancellor was justified by the pleadings and proofs before him in finding that—first, the title to the lands in question was in dispute, and second, that there was no suit pending to test the validity of the title.

The sole contention of the defendants is that the record before the vice-chancellor did not justify him in finding that the complainant was in peaceable possession of the locus in quo, claiming to own the same.

We think there is no merit in the contention.

At the hearing for the purpose of establishing the jurisdiction of the court the complainant offered in evidence the deed from the executors under the will of Miss Cazier, dated June 5th, 1903, which recites the seisin of John E. Cazier, the latter’s will, dated October 16th, 1890, devising all his property to his sister Clara, her death and the execution and probate of her last will and testament devising all the property to the grantors as executors and trustees, and the conveyance by such executors and trustees to the complainant of the locus in quo for a consideration of $3,800, which was paid by the complainant. The complainant also proved actual physical possession of the lands in question. Moreover, such possession is admitted by the answer.

But the defendants contend that complainant’s possession was not under a claim of ownership for the reason that its possession originally was that of a tenant under Miss Cazier in her lifetime, and that such claim cannot be made in view of the well established doctrine that a tenant cannot dispute his landlord’s title.

The fallacy of this contention is in the lack of foundation for the premise upon which it rests. While it is true that the evideuce disclosed that the complainant at one time was in possession of the premises in question as a tenant, under Miss Cazier’s brother, and subsequently under her, yet it conclusively showed that, at the time the bill was filed and for a considerable period prior thereto, it was in possession by virtue of a deed from the executors of Miss Cazier for which it paid full consideration. Certainly, under such conditions, the complainant is not precluded from claiming ownership of the land.

The defendants further insist that there was no proof that the title to the land in question was transmitted from Miss Cazier to the complainant. But we have already pointed out that this was shown by the deed from her executors to the complainant. The argument of the defendants seems to be that it was necessary for the complainant to prove the due execution of the will of Miss Cazier. We think not. To require the complainant to establish, in this initial stage of the proceedings, the due execution of the will, would impose upon the court the obligation then to pass upon the real question in dispute, not the jurisdictional facts. No such duty rested upon the court in this preliminary proceeding. In the first instance it was concerned only with jurisdictional facts. These were shown by proof of peaceable possession of the lands under claim of ownership by virtue of the deed and that no suit was pending to settle the basis of the defendants’ assertion of title.

The result is that the order of the court below is affirmed.

For affirmance-—The Chief-Justice, Garrison, Swayze, Reed, Trenci-iard, Parker, Bergen, Yoorhees, Minturn, Bogert, Yhedenburgi-i, Yroom, Gray, Dill, Congdon—15.

For reversal—None.


author: Parker, J.

text:
    Nathan Worth, complainant, respondent, v. Ernest Watts, executor, &c., of Firman Dubel, deceased, defendant, appellant.
    [Submitted June 17th, 1909.
    Decided November 15th, 1909.]
    A.court of equity, when asked to decree the specific performance of a contract, will examine not only the contract itself, but the relations of the parties and the surrounding circumstances; and if by reason of inadequacy of consideration and the other circumstances of the case, there is reason to suspect fraud, specific performance will be denied, and the complainant left to his remedy at law.
    On appeal from a decree advised by Vice-Chancellor Learning, whose opinion is reported in 70 Atl. Rep. S57.

      Mr. Rchard P. Budd and Mr. Joseph PL. Qashill, for the appellant.

      Mr. John W. Wescoti and Mr. Alexander J. Brian (of Pennsylvania) , for the respondent.
   The opinion of the court was delivered, by

Parker, J.

The bill was filed by the vendee named in an alleged contract to sell real estate against the executor of the vendor named therein, for a decree that the executor make a deed of the real estate in performance of the contract.

■ A preliminary question was mooted at the argument in this court, whether in view of the death of the vendor, the language of his will, and the fact that the beneficiaries thereunder were not parties defendants, an effective decree of specific performance could be made. The point having been made for the first time in this court, and then upon the oral argument, we deem it inadvisable to pass upon it, as the ease may be disposed of on its merits.

The basis of the suit is a paper-writing dated February 2d, 1904, purporting to be an agreement by Firman Dubel, and of which the following is a copy:

“Office of Nathan Worth, Dealer in General Merchandise, 303-303 High street. Telephone Call No. 49, Burlington, N. J., Feb. 2/1904.” (Then in writing) “Received from Nathan Worth twenty-five hundred dollars ($2500.00) on account of purchase price for houses and lots 303 and 305 High street, and 20 and 22 Union street, Burlington, N. J., which I agree to sell to him clear of all encumbrances for four thousand dollars ($4,000.00), deed to he delivered on payment of the balance of money, ho to continue payment rent as before until balance paid. Firman Dubel.”

There were also six other papers in the form of receipts for various amounts, dated between June 17th and November 1st, 1904, and amounting in all to $1,300. They are precisely alike except as to date and amount, and the absence from one or two of the printed heading; and only the first is copied here:

“Office of Nathan Worth, Dealer in General Merchandise, 303 and 305 High street. Telephone Call No. 49, Burlington, N. J. June 17, 1904.
“Received of Nathan Worth Two Hundred and Fifty Dollars ($250.00) as payment for properties 303 and 305 High street and 20 and 22 Union street, Burlington, N. J., agreed to be sold by me to him as per receipt of February 2, 1904. Firman Dubel.”

The signatures to all these papers are admittedly in the handwriting of .Firman Dubel; the body of them all, admittedly in the handwriting of Worth, the complainant. It was established by a number of reputable witnesses and found as a fact by the vice-chancellor, that the property comprised in the agreement was worth in the market between eight and ten thousand dollars, and in all probability in excess of nine thousand dollars. The contract price was therefore so inadequate that standing alone it would raise grave suspicion of fraud in the procurement of the contract. This feature of the case appealed strongly to the vice-chancellor, but seems to have been overcome by what he evidently found to be a fact, viz., that after the date of the contract the six other receipts for payments on account were signed, all referring to the agreement of Eebruary 2d, 1904, and therefore in the vice-chancellor’s opinion reaffirming the original .paper as a contract; and the force of these receipts was not overcome in his mind by the other testimony in the case tending to discredit them. In view of these receipts and. of other considerations appearing in his opinion, he concluded that the defendant had failed to show that the paper of Eebruary 2d, 1904, was not the intelligent and deliberate act of the testator, and accordingly decreed specific performance of it. That decree is now before us for review.

The evidence is voluminous, but the facts are not complicated. Eirman Dubel died December 28th, 1904. Eor some time previous to his death he was an habitual drinker, and during the last year or so of his life was a heavy drinker, increasingly under the influence of liquor as the day wore on, and frequently intoxicated in the afternoon. He was a bachelor and regarded as a miser. •He owned a number of properties in Burlington, among which was the property 303 and 305 High street, rented by complainant, Worth, and occupied by him for stores and dwelling at a rent of $40 per month.

In the spring of 1904, according to Watts’ testimony, while Dubel was ill and could not collect Ms own rents, and Watts was therefore managing the property, Worth came to him and pleaded for a reduction of rent, on the ground that he could not afford to continue at the rent he was paying, and offered to compensate Watts if he would use his influence with Dubel to get a reduction to $35. It does not appear that any reduction was made, but in August considerable repairs to the plumbing were made, and paid for by Dubel, and in December, just before his death, some further repairs were made. The first notice to Watts that Worth had any claim as purchaser of the property was on the day after Dubel’s death, when Worth called at Watts’ office and informed himn of his claim under contract of purchase. He subsequently submitted the papers to Watts and intimated that he would pay him for helping the matter through, which Watts declined to do.

The story of the signing of the agreement and subsequent receipts as related for the complainant mainly by his wife and daughter, is that there was a sort of social intimacy between Worth and his family, and Dubel; that Dubel was sometimes their guest at meals, had to some extent the run of the house, made little presents to the children, and so on; that on the occasion when the agreement of sale was signed by Dubel, according to Mrs. Yforth’s testimony, the parties were in Worth’s apartments and there agreed orally on all the terms, and Dubel said he did not wish anyone to know until the deed was made; that Worth said Mr. Watts would have to draw the “bill of sale” and Dubel said no and told Mr. Worth to draw it himself. Worth objected, saying he had never done anything like it, but being urged by his wife, “went into the store and took paper and pen and ink and a dictionary and drew this bill of sale * * . *” (meaning the agreement and receipt for $2,500). Mrs. Worth says she saw the money paid in bills and the agreement signed, and was also a witness to the signing of the six additional receipts and saw the money paid also when they were signed.

Bearing this evidence in mind as we examine the form and contents of the papers on which the complainant’s claim is based, the first thing noticeable is the legal sufficiency and precision of the so-called contract, combined with brevity and terseness. It contains, exclusive of date and signatures, less than seventy words, but is absolutely complete in itself, with names of parties, description of property, price, and terms as to encumbrances, delivery of deed, and status of the parties as landlord and tenant until the transaction be closed. It is a document to evoke appreciation from a lawyer. Yet the testimony of complainant’s wife is to the effect that this admirably drawn paper was prepared on the spur of the moment by her husband, a small tradesman of but limited education, with the aid of a dictionary, and that he was willing to risk $2,500 in cash on its legal sufficiency or on his personal confidence in Dubel, or both. The receipts also are very full and specific and apparently the production of at least a well educated business man. The clause in the agreement providing for delivery of deed may also be significant. Deed is to be delivered on payment of balance of the purchase-money, thus enabling Worth to choose his own time for completing the transaction, and to wait, if this was his intention, and if there was any fraud in the agreement, until Dubel’s lips were sealed by death and the obligation could be asserted with less danger of successful challenge. These features of the agreement tend, in our judgment, seriously to impeach Mrs. Worth’s testimony as to its preparation and execption.

The gross inadequacy of the consideration has. already been mentioned. Its importance as a badge of fraud is emphasized by the fact that the property was subject to a mortgage of $2,000, so that by agreeing to convey a $9,000 property for $4,000, Dubel was in fact agreeing to sell a $7,000 equity for $2,000, plainly a more grossly inadequate consideration than ever, and one more likely to satisfy a court that Dubel must have been deceived into signing such a paper.

Again, Worth’s delay in completing his purchase is worthy of note. Irrespective of the fact that in view of the $2,000 mortgage, he had paid for the property and $500 over on delivery of the agreement, unless Dubel paid off the mortgage (which he did not do), it is evident that so long as Worth delayed taking his deed he was losing the use of the money paid by him while at the same time paying rent. It would have been a simple matter to raise the $1,500 remaining to be paid by negotiating a mortgage, and this course would at once have stopped the payment of rent. That a man of Worth’s characteristics, claiming to be too poor to pay $40 rent, and yet wealthy enough to pay $2,500 in cash on short notice, or no notice, should have permitted the rent to run on month after month under such circumstances, unless he had some ulterior motive, is almost inconceivable.

There are other facts in the case, not so important, but worthy of consideration: The petty amount of Worth’s bank deposits as shown by his bank account; the fact that not one of the alleged payments on the contract was made by check, though Dubel received many checks from other debtors; the evidence that Dubel was accustomed to sign receipts without reading them, especially when intoxicated; the repairs and improvements made by Dubel on the building after the date of the contract—all these support the suspicion aroused by the inadequacy of price and the circumstances surrounding the alleged original transaction. Taking all together, the low price, the form of the agreement, the fact that Worth wrote it and the receipts, the secrecy observed during Dubel’s lifetime and its immediate assertion after his death, Worth’s apparent poverty as contrasted with the considerable payments recited in the papers, his apparently intentional omission to secure a deed in Dnbel’s lifetime, and his attempt to secure the executor’s aid in consummating the sale, we think a strong case of fraud was made out. The court below laid great stress on the existence of six receipts apparently affirming the contract of February 2d. These papers were undoubtedly signed by Dnbel; if his signature was not procured by fraud, they are cogent evidence that some agreement of sale was in fact made on February 2d. Some suspicion is cast on them also by the evidence, but even if genuine and Iona fide, they affirm nothing more than that Dnbel had agreed to sell the property to Worth. As to the price they are silent. Dubel may well have agreed to sell for $10,000 and received $2,500 or some other sum, on account, and been induced to sign an agreement stating the purchase price as $4,000, believing it to state the true figure. So that if the receipts are genuine they are still not proof that the purchase price was truly stated in the contract.

The question then is, whether in view of the evidence in this case, a court of equity should decree specific performance. The law is well settled. In Crane v. DeCamp, 21 N. J. Eq. (6 C. E. Gr.) (at p. 418) Justice Scudder, speaking for this court, said: “This is an application addressed to the sound legal discretion of the court. There is no rule in equity more clearly established, than that upon application for a specific performance of a contract, the court must be satisfied that the claim is fair, reasonable and just, and the contract equal in all its parts. If these points are not established by the complainant he will be left to his remedy at law (citing authorities). In judging of the fairness of a contract, the court will look not merely at the terms of the agreement itself, but at the relations of the parties and all the surrounding circumstances” (citing Fry Spec. Perf. § 239). In 1831 Chancellor Vroom said, in Rodman v. Zilley, 1 N. J. Eq. (Saxt.) 320, 324: “Courts of equity seldom interfere to set aside sales and contracts on the ground of inadequacy of price. They leave the parties to their legal remedies. But when they are called on for extraordinary aid to enforce a contract, they take the liberty to examine into the consideration to be given, its fairness and equality, and all the circumstances connected with it. And if anything manifestly inequitable appears in that part of the transaction, they will never lend their power to carry the contract into execution.”

It is true that courts of equity will not interfere with bargains on the ground of inequality alone, unless it be so extreme as to shock the conscience, and so amount to evidence of fraud. The cases of Wintermute v. Snyder, 3 N. J. Eq. (2 Gr. Ch.) 489; Shaddle v. Disborough, 30 N. J. Eq. (3 Stew.) 370, and Phillips v. Pullen, 45 N. J. Eq. (18 Stew.) 5, cited by the vice-chancellor, so hold.

But in both Wintermute v. Snyder and Phillips v. Pullen, there was a direct attack on the instrument itself, and the court was asked to set it aside, which is a very different thing from refusing its specific enforcement. In Shaddle v. Disborough the court decreed specific performance, but on a finding that there was no fraud and no inadequacy of price. It was remarked by the chancellor in that case, that “unless the inadequacy is such as to shock the conscience of this court and in itself to amount to conclusive and decisive evidence of fraud in the transaction, a defence to such an action as this, based on that alone, will not avail.” We need not pass on the accuracy of this proposition because 'the present case does not fall within it. Taking, in connection with the inadequacy of consideration, the other circumstances of the ease as detailed above, we are of opinion that such an atmosphere of suspicion surrounds and permeates the whole case that a court of equity, governed by the principles laid down in Rodman v. Zilley and Crane v. DeCamp, should refuse the relief by way of specific performance as prayed for in the present bill.

It may be that some contract of sale was made, and that moneys were paid thereon by Worth. If he can establish such facts in a court of law, he may have his remedy there by way of damages or a return of the moneys paid; but specific performance of the alleged contract set up in the bill should be denied. The decree of the court of chancery will accordingly be reversed, and its record remitted with directions to dismiss the bill of complaint.

For affirmance—None.

For reversal—The Ci-iiee-Justice, Garrisor, Swayze, Reed, Trenoi-iard, Parker, Berger, Voorhees, Mirturr, Bogert, Vrederburgi-i, Vroom, Gray, Dill, Corgdor—-15. '


author: Bergen-, J.

text:
    Noah C. Rogers, appellant, v. Helen Fountain Genung et al., respondents.
    [Submitted June 25th, 1909.
    Decided November 15th, 1909.]
    Where one engages to conduct, and enters into, negotiations for the purchase of lands for another, and is informed by his principal that he desires to purchase two adjoining tracts in order to make one property of them, a confidential relation arises, and the agent cannot, in equity, purchase on his own account one of the tracts and hold it against the interest of his principal, for one who undertakes to act for another may not, in the same matter, act for himself, and this rule extends 'to all cases in which confidence has been reposed, and applies as strongly to those who have gratuitously undertaken the trust, as to those who are to bo paid for it. It is sufficient that the party undertaking the negotiations accepted and held a situation of trust in reference to procuring the land, and every man has a trust to whom a business is committed by another where his business is to advise or operate, not for himself, but for others.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevens, whose opinion is reported in 71 Ail. Rep. 230.

      Mr. Alfred Elmer Mills and Messrs. Collins & Corbin, for the appellant.

      Mr. Charles A. Raihbun and Mr. Richard V. Lindabury, for the respondents.
   Tlie opinion of the court was delivered by

Bergen-, J.

Tlie bill charges that Harvey J. Genung, while acting as a confidential agent or broker for the complainant in negotiating the purchase of two tracts of land known respectively as the “Murphy” and “Conkling” properties, betrayed his trust by buying for himself, in the name of his wife, the Conkling tracts When the bill was filed a contract had been entered into by the vendors and the wife, by the terms of which a conveyance of the Conkling tract was to be subsequently executed and delivered, and the prayer of the bill is that the wife be decreed to assign the contract to complainant. The vice-chancellor dismissed the bill, and from that decree this appeal is taken. The confidential relation which is alleged to have existed between Genung, the husband, and the complainant, rests upon the following facts, viz.: The complainant, desiring to purchase the two tracts, wrote a letter to Genung, who was a real estate broker, for a list of “small places that you have for sale, with prices, near Madison, Convent, -or Morristown Station.” This letter was dated May 14th, 1907, and three days later Genung wrote to complainant, mentioning several properties, among them tlie Murphy and Conkling tracts, stating as to the former, “price $15,000,” and as to the latter, “offered at $8,000.” To this -the complainant replied that these tracts would be of the most interest to him, and that he would be glad if Genung would ascertain the lowest prices, and what amount could remain on mortgage, and rate of interest.

The next step in the proceedings was an interview between Genung and complainant, during which complainant told Genung that he wanted both plots, and therefore the negotiations should run together, and Genung advised him to 'offer $13,000 for the Murphy tract, and $7,000 for the other, as $6,500 had been refused. The sale of the Murphy tract to complainant was accomplished, and that part of the negotiations has no relation to the present controversy, beyond the fact that Genung knew that the purpose of the complainant was to purchase both tracts, as a part of a scheme to make them one property, an intention which complainant had disclosed to him at the opening of the negotiations for the purchases. The instructions, as testified to by complainant, were:

“Conduct the negotiations as one, because if I buy one I want to buy both, I want to buy them for a plot, and I want them pushed along simultaneously. * * * I don’t want the information that I bought one to get to the owner of the other plots, because they might recede from their asking price.”

The defendant Genung testifies on this point that complainant said he would take up “the negotiations of the properties independently and get whichever one he could, or both.” We are not disposed to accept this as a denial of complainant’s testimony, for the conduct of both parties indicates that at the outset it was understood that complainant wished to purchase both tracts, and are of opinion that the independent negotiations which Genung speaks of only referred to separate dealings with different owners.

With respect to the Conkling tract it appears that on June 4th, Genung reported that the Conkling property could probably be bought for $7,000 if Mr. Conkling was allowed to remain in the house and on part of the property for his life, but complainant, thinking it more desirable to have possession, authorized Genung to find out whether possession could not be had for a greater price, which he agreed to do. Complainant also requested Genung to go to Mr. H. C. Pitney, Jr., his attorney, after the negotiations had reached a point when the sale was likely to be accomplished, and have the contract drawn so that it could be promptly executed when an agreement was reached.

Mr. Pitney testifies that during the forenoon of June 5th, 1907, Genung came to his office and told him that the complainant was negotiating through him for the purchase of a piece of property, and had directed him to come to Mr. Pitney and have him prepare a form of agreement which he, Genung, could take with his report to the complainant on the evening of that day. Genung was unable to give the names of all the owners or a precise description of the land, and it was arranged that Mr. Pitney should get the description of the land from the records of Morris county, and that Genung should get the correct names of the owners. Genung called at Mr. Pitney’s office a few minutes before six o’clock on the afternoon of June 5th, and asked for the agreement, but Mr. Pitney told him it was not ready, and that he could either wait for it or have it sent to him later, but Genung said that he could not wait because he must meet the complainant a very few minutes after six at the Morristown Inn, and that he could get along without it that evening. As Genung did not come for the agreement during the next day, Mr. Pitney telephoned him on the 7th, in response to which he came to the office, and Mr. Pitney showed him the draft of the agreement, and thereupon Genung said that the agreement would not be used; that the complainant was out of the negotiation, and that he, Genung, would like to take the papers. To this Mr. Pitney demurred, but upon the assurance that Mr. Eogers was out of it, he finally gave him the agreement, and all of the papers except a short memorandum which Genung had brought to him on the 5th day of June. This memorandum was partly in the handwriting of Genung, and partly in that of Mr. Pitney, that written by Mr. Pitney being instructions from Genung. The following is a copy of the material part of the memorandum:

“Present absolute title and possession of the whole, $8,000. Reservation of possession of the lower part during life of W. H. Conkling, $1,000. This in option of purchaser. Consideration $8,000. Title one month after agreement. 10 per cent, or $S00 on ex-agreement, balance on taking-deed.”

It thus appears that on the 5th of June, Genung, acting for the complainant, had gone to his counsel and told him that the complainant was negotiating through him for the Conkling property, and requested him to draw a contract according to the memorandum, part of which he had prepared, and part of which was prepared in his presence and under his direction by counsel, and that counsel did prepare the contract as instructed by Genung. On the same night the complainant, on his way from the train to his home, called upon Genung, who then stated that the Conklings “probably” would not sell at all except subject to a life interest. The interview was somewhat hurried, as the complainant had a dinner engagement, but he told Genung that he wanted him to increase the price to $7,250, or $7,500, and, if necessary, to $8,000, if Conkling would give up his possession, and Genung agreed to do this, and said that he would report the next evening. On the evening of the next day, June 6th, complainant again' stopped at the inn to see Genung and learn whether the Conklings would accept the higher price for the land with immediate possession, and Genung said:

“One thing is sure, they have decided that they won’t sell except subject to a life lease, they won’t take a higher figure, and they will sell only subject to.a life lease.”

To this the complainant replied:

“Very likely I will take it; anyhow I will telephone you, but very likely I will take it, but I would very much rather give a higher price and eliminate the life lease.”

"" To this Genung replied: “I don’t think that is possible,” and complainant replied, “then I will let you know to-morrow whether I will take it with the life lease or not; I will communicate with you from New York.”

When this last conversation took place Genung knew that his wife had made a contract with the Conklings .to take the property for $7,000, subject to the life estate, which had been secured under the following circumstances: Genung, although he had directed Mr. .Pitney to draw a contract in the interest of the complainant, and had agreed to submit complainant’s offer of $8,000 for immediate possession, and to report the result to him that evening, took his wife with him to the Conkling place with a blank contract ready to be filled up, and a blank check to be signed by his wife, and after reaching the Conkling farm Genung asked the owners, according to the testimony of Mr. Fairchild, “If they would consider $8,000 and get out of the place in six months, or something like that, or at a stated time to be agreed upon,” which the Conklings declined, and then Genung said: “Well, then, we will give you the $7,000 with the life right,” and thereupon the contract under consideration was executed.

It appears that on the 4th or 5th of June, during an interview between them, Genung asked complainant whether he had a right to represent any other person than complainant, in the negotiation, and in reply was told, “Decidedly no, while you are representing me confidentially and submitting my offers I don’t consider you have a right to represent anybody else or go into it with anjdiody else,” and that if Genung did not want to conduct the negotiations for complainant he would get another broker. To this Genung made no reply, but as he continued to conduct the negotiations, it is presumed he did so upon the conditions thus stated.

We have no hesitation in finding from the evidence in this cause, that Mr. Genung engaged to act for the complainant in the negotiations for the purchase on complainant’s behalf, of the Conkling property, from whom a duty arose on his part to act with entire good faith and loyalty for the furtherance and advancement of the interest of the complainant in the subject-matter of his agreement. That he understood that he was act-. ing for the complainant in this particular matter is demonstrated, not only by his conduct towards the complainant, but by his statement to Mr. Pitney that the complainant was negotiating through him, that is, that he was acting for the complainant and in his behalf in the matter, and equity requires that where there exists, as in this case, a relation of trust and confidence between the parties, *the agent be prohibited from acquiring rights antagonistic to his principal.

In this case Mr. Genung knew that the complainant was anxious to purchase the two tracts for the purpose of consolidating them into a single plot, and he undertook to negotiate for . the complainant and agreed to ascertain the price, and report to him the conditions upon which the purchase could be consummated, and after he had obtained the confidence of the complainant and learned that he wished to buy both properties, and that he was so anxious to do it that he was willing to advance the price of one of them in order to secure immediate possession, he took advantage of that knowledge and contracted for the purchase in the name of his wife. The testimony shows that after Genung had opened the negotiations he suspected that complainant was acting for an adjoining landowner named, Jenkins, and the fair inference is that he obtained control of the title for the purpose of making complainant pay a largely increased price, for when he told the complainant that the land was sold he said: “It is going to be held for a long time, and they want a very large price.” It seems to us that it is a clear case of bad faith and disloyalty to the interest of one for whom he engaged to'act, and it does not matter in such case that the agent is a mere volunteer, or acts gratuitously. 31 Gy c.. 1^.32, llfSS.

— ■ The genera] rule is that he who undertakes to act for another in any matter of trust or confidence shall not in the same matter act for himself against the interest of one relying upon his in—tegrity. Gardner v. Ogden, 22 N. Y. 327, and cases there cited. Davoue v. Fanning, 2 Johns. Ch. 260. “So if an agent employed to purchase for another, purchases for himself, he will be considered as the trustee of his employer.” Story Eq. Jur. § 316.

As was said by Yice-Chancellor Dodd, in Wright v. Smith, 23 N. J. Eq. (8 C. E. Gr.) 106: “The rule extends to all cases in which confidence has been reposed, and applies as strongly to those who have gratuitously or officiously undertaken the management of another’s property, as to those who are engaged for \that purpose and paid for it.” In that case the complainant was anxious to purchase an interest’ in certain mineral lands’, and the fee of other lands, and made known his wishes to Smith, ■the defendant, and told him what sums he would be willing, if necessary, to pay. Smith undertook as a friend to negotiate for their purchase, because it was thought he could buy to a better advantage than the complainant, who was to take title through Smith if he purchased. Smith purchased at a much less price than Wright had said he was willing to pay if necessary, but led Wright to believe that he had paid the highest sum he had intimated he was willing to give, and the bill was filed to bring Smith to an account. In holding the defendant to an accounting the vice-chancellor said, that the fact that Smith was not formally constituted an agent with authority to bind the complainant, or that his agreement to act for him was not formally made, “are points, which, if true, are of no sort of importance, nor is it important that no agreement was made to compensate him for his services. It is sufficient that he accepted and held ■a situation of trust in reference to procuring the lands. Every man has a trust to whom a business is committed by another. Every man is a trustee whose office is to advise or to operate, not for himself, but for others.” Therefore, if Genung had made the contract in his own name, his relations with the complainant were such that complainant had a right either to affirm or repudiate the contract, and if he manifests his desire to affirm, his agent cannot refuse to transfer it to him.

It is urged, however, that as Genung had the property for sale he was the agent of the vendor, and if he became the agent of the ■complainant in the purchase of the property, he was disloyal to his earlier employment.

We find nothing in the case upon which to base such an agency; there was none created by’any writing which authorized Genung to sell, or to pay him commissions. The only promise he had was an oral one by Mr. Fairchild, which was, “if he could sell the place, why we would give him1 commissions.” No price or terms were named; it amounted to nothing more than saying to a real estate broker, “if you produce a purchaser, and he and the owners can agree upon terms, and a sale is effected, we will pay yon commissions.” This imposed on Genung no duty to be observed towards the seller regarding the price; he was only a broker without any authority to offer terms; all that was expected from him was the production of a person ready to enter into negotiations with the owner, and the limit of his interest in the matter was to produce a purchaser with whom the seller might negotiate. The vendors in this case realized Genung’s position, and with him suspected that Jenkins was the real purchaser and regulated their price accordingly. They accepted his offer, and made the contract with his wife, with full knowledge •that he was acting for the purchaser, and in every respect treated him as a bidder for the land. Certainly they could not have understood that he was acting in their interest as against himself or his wife. The entire negotiations were conducted between them at arms length. The relation disclosed between the vendors, and Genung is no answer to the fraud perpetrated by him in his dealings with the complainant, and he cannot be allowed to escape with the fruits of his wrong doing.

The defendants also urge that even if Genung was the agent of the complainant and was disloyal to his principal, nevertheless that does not affect the right of his wife to purchase even if she had knowledge of all the circumstances. We do not consider that we are required to pass upon this claim, because we are satisfied from the evidence that the purchase was, in truth and in fact, made by Genung, and that the wife was used by him as a cover to protect him against being required to account to his principal.

Equity looks at the substance, and not at the form of a doubtful transaction. What the husband knew was, that his principal was very anxious to purchase this property, and he had reason to believe that he would take the property at $7,000, subject to the retention of possession by Conkling, during life, of a part of the premises if he could do no better. He also knew that the complainant was willing to pay $1,000 more if the property could be had with immediate possession, and he had been engaged to make such offer. He had a very strong suspicion that Jenldns wished to buy the property, through the complainant, and if he could defeat the complainant and have the title vested in his wife, he would be in a position to exact a very large price. All of this, it is admitted, the wife knew, and it is fair to infer that she knew the purpose which her husband had in mind, because when they left home for the pretended purpose of making the offer for the complainant, they carried with them a contract ready to be filled up and executed, and also a check which the wife afterwards signed in payment of the percentage required, from which a presumption arises that he did not intend to submit the offer of the complainant fairly, and Mr. Fairchild, who seems to be a disinterested witness, testified that Mr. Genung was the spokesman, and his wife took no part in the negotia- > tions; that Genung said, “We will give you $7,000,” thus in-cheating that he had some interest in the purchase. It is manifest from this testimony that Genung, when he left home, intended to buy the property, and also that the contract was made in the name of the wife, not as a bona fide purchaser, but under the direction of the husband for the very purpose of setting up the claim which he now urges in order to escape the fulfilling of his duty to the complainant, and while the marital relation would not perhaps prevent the wife from purchasing in her own right if she chose to do so, still that relation is an element to be considered in determining which of the two is the real purchaser. All transactions in which a wife claims to hold property in her own right, where it is the interest of her husband that she should do so to protect him against the claim of another, are always scrutinized with the utmost care when questioned, because of the relation of confidence and trust which is presumed to exist between them, and we are of opinion that the evidence in this case warrants the conclusion that the wife took the title for her husband, for the reason that if the contract was made with him the fraud would be so manifest that he could not support it, and that she acted for him, in order to aid him in carrying out his fraudulent intention. This property had been in the market for some time; the wife knew of it and had offered $6,000 for it, and that being refused had abandoned the purchase, and the testimony does not show any further interest in the matter on her part until her husband had determined to defraud his principal, when she went with him, prepared to carry out his purpose. We find no reason to believe that the wife holds this contract as her own, but, on the contrary, that she joined her husband in the commission of a fraud upon the complainant and holds the contract for her husband subject to his direction and control.

The defendants also insist that if it be true that the transaction was carried out for the express purpose of defrauding the complainant, still he is without remedy, because the trust, not being declared in writing, is subject to the statute of frauds. But the statute does not apply where the “trust or confidence shall or may arise or result by implication or construction of law.” No trust was created in this case by any agreement of the parties; it arose by implication or construction of law out of the confidential relations of the parties. Genung was not authorized to buy and hold in trust; his duty was to aid his principal in purchasing, and having been engaged to do this, he cannot, by any fraudulent act, during the period of his engagement, thwart his principal by making it impossible for him to accomplish his purpose, and if in carrying out such disloyal intent, he makes a contract of purchase in his own name, it is the contract of his principal.

The case shows that on the day the answer was filed an order was made by the chancellor permitting the defendants to execute the contract according to the terms, but restraining the defendants Genung from making any disposition of the land until the further order of the court. She and her husband will therefore be decreed to convey to the complainant, upon payment, to them, of the money paid as a consideration, for the conveyance according to the terms of the contract.

The decree appealed from is reversed, with costs.

For affirmance—The Ci-iiee-Justice, Beed, Bogert—3.

For reversal—Garrison, Swayze, Trenchard, Parker, Bergen, Vooriiees, Minturn, Vredenburgh, Gray, Dill, Congdon—11.


author: Vooehees, J.

text:
    The Mayor and Common Council of the City of Newark et al., respondents, v. The Erie Railroad Company and The New York and Greenwood Lake Railroad Company, appellants. The Mayor and Common Council of the City of Newark et al., appellants, v. The Erie Railroad Company and The New York and Greenwood Lake Railroad Company, respondents.
    (No. 65.
    On appeal of the railroad companies.)
    (No. 81.
    On appeal of the city.)
    [Argued June 30th, 1909.
    Decided November 15th, 1909.]
    1. On a bill filed by a city against a railroad company to compel it to effect the crossing of its present tracks across a public highway in a city in some other manner than at the grade of said street, and for this purpose to construct and keep in repair good and sufficient bridges or passages over or under the said railroad tracks as at present constructed across said highway so that the passage of carriages, horses and cattle upon the street shall not be impeded thereby, and for further relief— Held, that the court of chancery correctly decided that the facts of the case did not warrant so drastic a remedy as track elevation or depression, but that it was unnecessary to determine whether the court of chancery had jurisdiction to order tracks to be elevated or depressed, and therefore that question is not passed upon or decided.
    2. The relief afforded by a decree must conform to the case made out by the pleadings as well as the proofs, and that granted under the general prayer must be secundum allegata et probata.

    3. Whether the court of chancery has jurisdiction or power to order railroad tracks crossing a highway to be removed therefrom, if they render the highway crossing dangerous for public use, on the ground that they have been illegally laid in such highway, is not passed upon or decided.

      On cross-appeals from a decree of the court of chancery advised by Vice-Chancellor Stevens, whose opinion is reported in 75 N. J. Bq. (5 Buck.) 20.

      Mr. James B. Nugeni and Mr. Herbert Boggs, for the city of Newark.

      Messrs. Cortlandt & Wayne Parker (Mr. Charles L. Corbin, on the brief), for the railroad companies.
   The opinion of the court was delivered by

Vooehees, J.

These cases come into this court upon cross-appeals; that of the city of Newark from so much of the decree of the chancellor as denies a mandatory injunction, directing the defendants to effect their grade crossing over Summer avenue, in the city of Newark, in some other manner than at the grade of said avenue; that of the defendants, the railroad companies, from that part of the decree that adjudges that the two most northerly and the most southerly tracks laid across said avenue at grade are unlawful structures and impede the traffic upon the highway and interfere with its safe and convenient use by the public, and from that part of the decree that adjudges that the use, except as for a passing siding made by the defendants of the track lying between the most southerly track across said avenue, and known as Heller’s switch track, and the eastbound main line track, impedes public travel on said avenue and unlawfully interferes with and impedes the passage of people, &c., using said avenue and renders the crossing unsafe, and that said use be prohibited, and commands the defendants to remove so much of said two most northerly tracks and the most southerly track as are laid within the lines of Summer avenue, and from using the remaining track above mentioned for any use whatever except for a passing siding for the sole purpose of shifting cars or trains of cars to and from the main line tracks so as to permit one car or train of cars to pass another car or train of cars while traveling on the main line tracks.

The appeals have been argued together in this court.

The facts of the case have been so clearly and with such careful detail set forth in the opinion of the learned vice-chancellor, reported in 75 N. J. Eq. (5 Buch.) 20, that it is needless to recount them here. Taking up the appeal of the city, we agree with the learned vipe-ehancellor in his conclusion that the facts of the case do not warrant so drastic a remedy as track elevation or depression, and that therefore on the merits of the case the appeal of the city should be dismissed, and the decree affirmed so far as that appeal has questioned it. But in placing our decision upon the grounds above stated, it becomes unnecessary to determine whether the court of chancery had jurisdiction to order the tracks to be elevated or depressed, and we therefore do not pass upon or decide that question.

In examining the appeal of the railroad companies, it will be necessary to consider the allegations and the prayer of the bill.

The prayer is for a mandatory injunction compelling the defendants to effect the crossing of the present tracks across Summer avenue in* some other manner than at grade of said street, and for this purpose to construct, &c., bridges or passages over or under the said railroad tracks as at present constructed so that the passage of carriages, &c., shall not be impeded, and for general relief.

The opinion of the court below frankly states that "the allegations of the bill are so general that they present little more than the abstract question whether under any circumstances this court would compel a railroad company to elevate or depress its tracks,” and later in the opinion the vice-chancellor states: "The bill, although primarily designed to enforce track elevation, is broad enough in its statements to warrant the giving of the relief indicated. There is a prayer, not only for depression or elevation of the tracks, but also for general relief.”

■The allegations of the bill succinctly stated are as follows: After setting out the charters or certificates of incorporation of the New York and Greenwood Lake Eailroad Company, and its several predecessors, and the lease of the railroad company to the Erie Eailroad Company, the bill alleges that there are two main tracks operated by the Erie Eailroad Company, and also four additional tracks, two of which are sidings, making a total of six tracks where the railroad crosses said avenue, which form a serious impediment to travel upon the highway,.and that the defendants do not keep in repair good and sufficient bridges or passages over or under the railroad; that the crossing of the tracks as now laid out at grade of the said street is difficult and dangerous; that passenger and freight trains cross with great frequency at high rates of speed, and that travelers are frequently held up and detained at the crossing; that the crossing of the street is attended with great inconvenience and danger and that a different method of crossing which will be safe to the public is imperatively demanded. Section 29 of the General Railroad law (P. L. 1903 p. 660) is then set out, followed by the charge that it is the duty of the railroads to have the crossing by their trains made in such manner as not to impede the public travel, and that for this purpose the railroads should have some other crossing than the grade crossing, either by depressing or elevating the tracks or by making necessary changes in the grade of the street, and that as to the right of the public to use the highway and the right of the companies to operate their railroads across a public highway with safety, the court of chancery has power to regulate and direct the manner in which the crossing shall be effected. Then follows the prayer for relief, as above set forth.

These statements give scarcely an intimation of any other relief being sought than elevation or depression, and there is certainly no semblance of a claim that any of the tracks as laid are illegal structures and should be taken up or their use interfered with.

The answer of the railroad companies to the bill was confined to a denial that the tracks formed an impediment and to a denial of the non-repair of bridges over them, and that the defendants had not performed their duty in that regard. Their answer further extends to a denial of the power of the court to compel them to eliminate the crossing as a level crossing. The answer seems to cover the entire bill, and yet in no way touches the question of the illegality of the tracks at the crossing.

At the trial it was indeed remarked by the court that it was possible that an order might be made that if the defendants desired to maintain six tracks they must elevate them, but if willing to put four tracks somewhere else, the road might still be safe and convenient. This was merely by way of suggestion by the court and in any aspect seemed primarily dependent upon a consent of the companies to a change of location of some of the tracks to avoid the alternative of elevating six tracks. So during the whole hearing it seems not to have been intimated that an injunction would issue grounded upon the illegal character of the de facto crossing. Aside from the consideration that ordinarily an injunction cannot be granted under a prayer for general relief, but must be the subject of a special prayer (African M. E. Church v. Conover, 27 N. J. Eq. (12 C. E. Gr.) 161), and it may be incidentally remarked that here we have no special prayer for an injunction of the character of that granted by the decree, the familiar rule must govern that the relief afforded by the decree must conform to the case made out by the pleadings as well as the proofs, and that granted under the general prayer must be secundum allegata el probata. Jordan v. Ciarle, 16 N. J. Eq. (1 C. E. Gr.) 243; Francis v. Bertrand, 26 N. J. Eq. (11 C. E. Gr.) 213. “In order to entitle the plaintiff to a decree under the general prayer different from that specifically prayed, the allegations relied upon must not only be such as to afford a ground for the relief sought, but they must have been introduced into the bill for the purpose of showing a claim to relief, and not for the mere purpose of corroborating the plaintiff’s right to the specific relief prayed; otherwise the court would take the defendant by surprise, which is contrary to its principles.” 1 Dan. Ch. Pl. & Pr. 381.

The purpose of the statement in the bill that there were two main tracks and four additional tracks, seems to have been corroborative merely of the right to relief by means of elevation, by showing one of the elements of danger at the crossing. The statement did not have for its purpose a claim that any of such tracks were unwarranted by law.

The vice-ehadcellor alludes to this ease as oue of novel jurisdiction and the first suit of its kind ever brought in this state. It may be added that its importance is as great and far reaching as its novelty. In such a case it behooves us not to settle the important principles involved on grounds outside the issues, scantily supported by the proofs, and which at best seem to have been inadequately argued in the court below.

That part of the decree, therefore, appealed from by the railroad companies, must be reversed, because not within the scope of the bill but rested upon grounds not disclosed by the bill.

Here, again, it must be understood that no opinion is expressed as to the jurisdiction or power of the court to grant such relief upon a bill properly framed for that purpose.

The cause will be remitted to the court of chancery to the end that a decree be entered in accordance with the views above expressed.

No. 65. On appeal of the railroad companies—•

For affirmance—Minturn, Vroom:—-2.

For reversal—Tiie Ci-iiee-Justice, Garrison, Swayze, Reed, Trenchard, Parker, Bergen, Voorhees, Bogert, Gray, Dill, Congdon—-12.

No. 81. On appeal of the city—

For affirmance—The Chief-Justice, Garrison, Swayze. Reed, Trenchard, Parker, Bergen, Voori-iees, Minturn, Bogert, Vroom, Gray, Dill, Congdon—14.

For reversal—None.


author: Dill, J.

text:
    Robert H. McCarter, attorney-general, ex rel. Board of Railroad Commissioners, informant, respondent, v. The United New Jersey Railroad and Canal Company et al., defendants-appellants.
    [Submitted July 3d, 1909.
    Decided November 15th, 1909.]
    1. The specification of grounds of demurrer as prescribed by chancery rule 209 is, in effect, a statement in advance of the points of law intended to be argued thereunder.
    2. A motion to strike out assigned causes of demurrer is unwarranted.
    3. History of chancery rule 209.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Walker, whose opinion is reported in 75 N. J. Eq. (5 Buch.) 158.

      Mr. Nelson B. 'Qrasltill, assistant attorney-general, for the respondent.

      Mr. Alan II. Strong, for the appellants.
   The opinion of the court was delivered by

Dill, J.

The attorn ej^-general filed an information on the relation of the board of railroad commissioners to compel the defendant company to abandon an existing crossing .over its tracks at Irving street, in the city of Bahway, and to substitute some other method of crossing, to be determined by the court. The defendants filed a demurrer to the information, and, under the chancery rule 209, specified five causes for the demurrer. The attorney-general then moved to strike out the demurrer, and also to strike out each of the several causes. The vice-chancellor refused to strike out the demurrer. He also refused to strike out the first cause, but ordered that the second, third, fourth and fifth causes be stricken out. From this order the defendant company appeals.

If we were to decide this case upon the question argued before us, namely, the validity of the causes of demurrer stricken out by the order appealed from, we should arrive at a conclusion at variance with that of the learned vice-chancellor below; but there is another and prior question involved, and that is as to the practice adopted by the court below in striking out assigned grounds of demurrer.

The practice of requiring the statement of grounds for demurrer appears to have arisen as early as 1585. Stat. 27 Eliz. ch. 5. In 1654, the court of king’s bench formulated in an order the substantial provisions of that statute, and later (1705) it was made more specific by 4 and 5 Anne ch. 16. In 1833, by Reg. Gen. Hil. Term, 4 William IV., the practice of specifying causes or grounds was extended to every demurrer, and, what is to the point here, the party filing it was required to state in the margin thereof the matters of law intended to be argued thereunder. This order of 1833 was embodied in the Common Law Procedure act of 1852, which in turn was followed by the Judicature act of 1875, and order 28, rule 2, of that act is the source of our chancery rule 209.

As was said by Vice-Chancellor Van Fleet in 1889:

“The new orders in chancery of England contain a clause identical in purpose with our rule. Rule 2d of order 28 requires that a demurrer shall state the specific ground on which it is founded; our rule requires that the particular ground shall be stated; so that it is manifest from their language that the scope and design of both are the same.” Essex Paper Co. v. Greacen, 45 N. J. Eq. (18 Stew.) 504 (at p. 505).

Chancery rule 209 requires the grounds of demurrer to be specified, and these grounds, one or more, are in effect mere announcements in advance of the questions of law intended to be argued. The origin of this requirement is found in Reg. Gen. Hil. Term, 4 William IV., where the party filing the demurrer was required to state in the margin thereof the points of law intended to be argued thereunder.

The reason for requiring a statement of the points of law upon which the demurrant relies is apparent. The adverse party is thus advised at what point his pleading will be attacked, and the court, in passing upon the demurrer, is aided by specific reference to the grounds in support thereof. Essex Paper Co. v. Greacen, supra (at p. 506).

There is, however, nothing in the statute, in the rules of the court or in the history of the law, and there is no precedent to be found, which would warrant the striking out of the causes specified. The demurrer may be stricken out if it is sham or frivolous, but not the causes.

A motion to strike out one or more assigned causes of demurrer, viz., the statement of the points of law intended to be argued in support of the demurrer, is asking the court in advance of the regular trial of the issues of law to hear the case in piecemeal and to limit the scope of the argument upon the trial by eliminating in advance the discussion upon certain points of law. This the court may not do.

A demurrer is wholly good or wholly bad, and it is not necessary that all of the causes of demurrer specified should hold good. If any of the assigned grounds are valid the demurrer should be sustained.

To sanction motions to strike out, either wholly or in part, assigned grounds of demurrer would prolong litigation indefinitely. Such practice should not be allowed.

Eor this reason, therefore, the order appealed from should be reversed.

For affirmance—None.

For reversal—The Chief-Justice, Garrison, Swayze, Eeed, Trenchard, Parker, Bergen, Minturn, Bogert, Vre-DENBURGH, VROOM, GRAY, DlLL, CONGDON—14.


text:
    John P. Clark and Thomas M. O’Brien, complainantsappellees, v. The Board of Education of the City of Bayonne, defendant-appellant.
    [Argued June 24th, 1909.
    Decided November 15th, 1909.]
    1. The court of chancery has no jurisdiction to interfere with a judgment of a court of law except where some well defined independent equitable ground exists for restraining the enforcement thereof.
    2. That an unsuccessful litigant in a court of law has appealed therefrom and is meanwhile unable to secure from any law court a restraint against further proceedings under the judgment below, is not an independent equity which gives the court of chancery jurisdiction to interfere, although such proceedings under the judgment may result in such a change in the status of the subject-matter of the controversy as may make nugatory a judgment of the court of review when pronounced. Overruling People’s Traction Co. v. Central Passenger RaAlway Co., 67 N. J. Eq. (1 Roll.) 370.

    3. An application for a stay is a mere step in procedure to be applied in the exercise of an equitable discretion by the court having control of the law action and by that court only.
    On appeal from two orders of the court of chancery advised by Yiee-Chancellor Garrison.
    The board of education of the city of Bayonne had taken preliminary steps for the erection of a school building. The contract was about to be awarded when the complainants, taxpayers of Bayonne, applied to a justice of the supreme court for a unit of certiorari to test the legality of the proceedings of the board. The rule was granted with a stay, testimony taken, the proceedings affirmed and judgment entered in the supreme court affirming the proceedings and dismissing the writ.
    A writ of error was sued out in this court, removing said judgment here. The prosecutors then filed a bill in chancery, reciting the proceedings at law, alleging that the judgment was erroneous, that the board was about to prosecute the work by entering into a contract for the school building, and that the court of errors and appeals was not then in session, and hence no application could be made to that court for a stay, and prayed for an injunction restraining the board of education from entering into the contract until the determination of the writ of error in this court.
    A rule to show cause was issued by the vice-chancellor, with an interim restraining order, and on its return it was made absolute by a decree reciting that in the proceedings in the supreme court on certiorari judgment was entered against the complainants herein (the prosecutors therein), from which a writ of error was promptly taken out and was being regularly pursued, and that, under the circumstances,’ it was proper for the court of chancery to maintain the status quo until the complainants should have proper opportunity to make application to the court of errors and appeals for a stay pending the argument upon and determination of the writ of error.
    The defendant-appellant herein, having perfected an appeal from the court of chancery to this court, an application was made by the complainants-respondents for a stay against proceedings under the supreme court judgment, which stay this court refused. Thereafter the complainants secured an order in the court of chancery dismissing the bill in that court.

      Mr. J. Merritt Lane, for the complainants-appellees.

      Mr. Elmer IF. Demarest, for the defendant-appellant.
   Upon the case as stated above, the opinion of the court was delivered by

Dill, J.

The dismissal by the court of chancery does not, as the respondent argues, affect the appellant’s 'right to proceed in this court, and accordingly this appeal brings up for review - two chancery orders; the first denying the motion of the defendant herein to dismiss the bill of complaint on the grounds of absence of jurisdiction, want of equity and the insufficiency of the bill; the second restraining the defendant herein from proceeding under the judgment in the supreme court pending an application to this court for stay.

The question is squarely presented as to whether a court of chancery has jurisdiction to interfere in proceedings in a court of law where the ease is one within the jurisdiction of that court and where no independent equity is shown except the claim that the complainant is in good faith seeking to review the judgment of the court of law and has been unable to secure from any law court a stay pending the appeal.

The learned vice-chancellor below was constrained to follow the only equity precedent in this state, where another vice-chancellor allowed an injunction under similar circumstances in order to preserve the status quo of the litigation until the appeal could be heard. People’s Traction Co. v. Central Passenger Railway Co., 67 N. J. Eq. (1 Robb.) 370.

That case we decline to approve and overrule it as unsound.

In the People’s Traction Company Case the court rested upon Hart v. Albany, 3 Paige 381; but Hart v. Albany does not sustain any such doctrine, for there the original bill was filed in chancery and the injunction staying proceedings issued out of the same court.

The control of a court over its own process is not questioned; but it is quite another proposition to say that a court of chancery may issue a stay in a law action pending an appeal from the decision of the law court to a court of last resort. The question as to the stay and the applicant’s right thereto, which is erroneously declared in the People’s Traction Company Case to constitute an independent equity, on the contrary involves but a mere step in procedure in the law action, to be applied in the exercise of an equitable jurisdiction in that court and not in the court of equity.

The court of chancery has no jurisdiction to interfere with a judgment of the supreme court except where some well-defined independent equitable ground exists for restraining the enforcement thereof.

That an unsuccessful litigant in a court of law has appealed therefrom and is unable meanwhile to secure from any law court a restraint against further proceedings under the judgment below, is not, as declared in People’s Traction Co. v. Central Passenger Railway Co., supra, an independent equity which gives the court of chancery jurisdiction to interfere, although such proceedings under the judgment may result in such a change in the status of the subject-matter of the controversy as may make nugatory the judgment of the court of review when pronounced.

This rule dates back to the early days of courts of chancery in England (Montague v. Dudman, 2 Ves. 396, decided in 1751), is restated in the English Judicature act of 1875, and is sustained by a long line of authoritative decisions as against which the People’s Traction Co. v. Central Passenger Railway Co., supra, stands out as the only decision to the contrary. 2 Dan. Ch. Pr. (6th Am. ed.) 1624; Pom. Eq. Jur. § 1365.

The court of chancery in this state follows the practice of the English courts of chancery as stated in Southern National Bank v. Darling, 49 N. J. Eq. (4 Dick.) 398, and Jones v. Davenport, 45 N. J. Eq. (18 Stew.) 77. Similarly this court follows the practice of the house of lords of England, as held in Newark and New York Railroad Co. v. Mayor and Common Council of the City of Newark, 23 N. J. Eq. (8 C. E. Gr.) 515 (at p. 517).

Under the English decisions the rule of non-interference of equity with law is so well recognized that it has been rarely questioned (Mayor of Gloucester v. Wood, 3 Hare 153), and an application similar to the one before us was characterized by Mr. Lord Justice James as a very bold application to induce the court to repeal settled law. Garbutt v. Fawcus, 33 L. T. R. 617.

Courts of equity as such have no revising, controlling or superintending power over the judgments, proceedings or decisions of courts of law. Hood v. N. Y. & N. H. R. Co., 23 Conn. 609; Crim v. Handley, 94 U. S. 652.

In this state in 1844 the court of chancery, after reviewing the American and English decisions, declared for the same doctrine. Executors of Powers v. Administrator of Butler, 4 N. J. Eq. (8 Gr. Ch.) 465.

Equity interferes with judgments at law only where there has been fraud, or mistake, or accident, in procuring the judgment and where the legal remedies are inadequate.

To hold that a court of chancery may grant a stay, as in this case, in legal proceedings, when a court of law, which has all the facts before it, and which has exclusive jurisdiction of the action, has decided the question on its merits, is to hold that a court of equity may set up its judgment in opposition to the judgment of the law court and may virtually take unto itself jurisdiction of a cause over which it had originally no jurisdiction. Such a position is obviously unsound and inconsistent with the history and established principles of equity jurisprudence, and results, as here, in an attempted usurpation of the jurisdiction of the supreme court and of even this’ court by the court of chancery.

Counsel for both appellant and respondent have assumed that the writ of error to this court did not act as a stay, and therefore we have not considered that question.

The orders appealed from are both reversed.

For affirmance—None.

For reversal—Ti-ie Chiee-Justice, Garrison, Swayze, Reed, Trenoi-iard, Parker, Bergen, Yoori-iees, Minturn, Bogert, Yredenburgi-i, Yroom, Gray, Dill, Congdon—15.


author: Per Curiam.

text:
    In the matter of the probate of the will of Howard P. Frothingham, deceased.
    [Submitted June 24th, 1909.
    Decided November 15th, 1909.]
    Lead pencil marks drawn by a testator through certain clauses of his will, with the intent at the time to revoke such clauses, will have that effect given to them notwithstanding the subsequent employment of the instrument so canceled as the text from which a fair copy was to be made.
    On appeal from a decree of the prerogative court advised by the vice-ordinary, whose opinion is reported in 75 N. J. Bq. (5 Buck.) 205.

    The orphans court of Monmouth county, in admitting to probate the will of Howard P. Erotbingham, deceased, filed the following conclusions:
    The writing, which it is dfiie object of these proceedings to have admitted to probate as the last will and testament of Howard P. Erothingham, was executed by him as his will in due form of law on the 10th day of October, 1906. This, is proved by the testimony of the subscribing witnesses to the instrument.
    After the death of the testator on February 2d, 1907, the paper in question was found in his safe, in his New York office, with pencil marks through five of the eleven items, it contained; and the proponent, his widow, now asks to have the will probated with the canceled parts omitted.
    It appears by the proofs that testator, at the time of the execution of the instrument in October, 1906, was engaged in business as a money broker in the city of New York; in the latter part of December, 1906, about two months prior to his death, he had a conversation with Mr. James P. Dodd, his confidential employe, and they talked over his financial conditions; he had lost most of his personal property since the execution of the will in October; he said that he had almost no estate left, outside of what real estate he had, and that he thought he ought to change his will, because he had provided in the will for annuities, and there was no money out of which to pay annuities, and that he was worried about what would become of Mrs. Frothingham. He wanted her to have all she could get out of his estate, which he thought would be very little, and he told Mr. Dodd to call his attention to the matter the next day, so he could get the will out of the safe and make the changes. The next day he asked Mr. Dodd for the will, and then he made the pencil marks now appearing upon it (including the word "sold” written in pencil across the- second paragraph of the fifth item), with the exception of the pencil marks through the names James P.. Dodd, John Olney and John J. Edwards, in the second paragraph of the third item of the will; these marks were made by Mr. Dodd at the same time at the suggestion and in the presence of the testator.
    After making these pencil marks upon the will, Mr. Dodd asked him if he wanted it sent to his lawyer; testator said, "No, send it to the man who engrossed the will and have him make a draft of it, according to the corrections.” The draft was made, but one clause in it did not suit the testator, “and he threw it aside and put the old will in the safe.” He put the 'draft of the new will in his desk. This new draft was found in his desk, after his death, unexecuted, and with a pencil line drawn through the first page of it.
    From an inspection of the will, it appears that the second item, across which testator made pencil marks, provided for the payment of annuities amounting to $6,000 yearly, and made the same a charge upon his residuary estate, which he devised to his wife.
    By the third item, through which he had drawn pencil lines, he gave his business to his friend, James P. Dodd, and by the fourth and fifth items, through which he had also drawn pencil marks, and across the second paragraph of the fifth item had written the word “sold,” he devised certain real estate in East Orange, New York City, and in Passaic and Bergen counties in this state.
    Although not in proof, it was stated by counsel at the hearing that all the real estate devised by these items had been sold by the testator prior to making the pencil marks in December. With the items thus marked in pencil eliminated, the will simply provides for the payment of testator’s debts, names Ms wife his. executrix, and bequeaths and devises to her all his real estate and personal property.
    It was conceded on the argument, that under Gen. Stat. p. S757 § 2, and on the authority of In re Kirlcpairiclc’s Will, 22 N. J. Eq. (7 G. E. Gr.) 1¡.6S, and the recent case of Eilyard v. Wood et ad., 7'1 N. J. Eq. (1 Buck.) 211, a will, or any devise or bequest- in it, can be revoked by canceling the same by the testator himself, or in his presence, and by his direction or consent, and that the canceling can be done with a lead pencil as effectively as if done in ink, providing the canceling was done with intent to revoke the clause canceled.
    The only question for determination in this matter is that of the testator’s intention in making the pencil marks upon the will.
    It is contended, on the part of the proponent, that testator thereby intended to revoke the clauses of the will in question, by canceling the same with the pencil marks, and that this was his intent at the time of making the marks, and that only that portion of the will should be admitted to probate the clauses of which have not been canceled by such marks.
    The caveators claim that testator’s act in making these pencil marks was not final, but that the marks were only placed upon the will as directions or instructions for the draftsman, in preparing a new will, which should eliminate the clauses marked, and which testator intended to execute, in order to give effect to the changes which he desired to make in the disposition of his estate, and they invoked the application of the rule of dependent relative revocation on the facts established.
    Under the proof I do not think this rule applies. There is nothing in the testator’s declarations showing that the cancellation of the clauses in question was conditional, and not final. He realized that he had sustained great losses since the execution of his will, and because of them he desired to change his will. He had provided for annuities, and realized that his estate could not produce the money to pay them. He was naturally worried about what would become of his wife, in the event of his death, in his then present financial condition, and, as he expressed it the day before the cancellation of the clauses,
    "he wanted her to have all she could get out of the estate, which he thought would be very little, and ho wanted his attention called to the matter the next day, so he could get the will out of the safe and make the changes.”
    The next day, without being reminded of the matter, he called for the will and made the changes he desired, by canceling the clauses in question, and, in effect, leaving everything to his wife, hie made no statement about executing a new will, or that would show any intention on his part to have these changes in his will become effective, only on the happening of some other event such as the execution of another will, and did direct the will, after the cancellation of these clauses, to be taken to the draftsman to have a draft made of it, omitting the canceled items; but there is nothing in the proofs but this act to indicate, in any way, an intention on the part of the testator to execute a new will, or to postpone giving effect to the changes made in his will until a new will could be prepared and executed.
    He apparently had no doubt that the will in its canceled form was effective; he did not consider the advice of counsel on it necessary. When the new draft of will was presented to him, he was not satisfied with it. He did not execute it, but placed it in his desk, and put his will with the canceled clauses in his safe, and kept it there without change until he died. He treated the cancellation of the clauses in question as a. completed and final act, and clearly regarded it as in proper form to give effect to his express desires concerning the welfare of his wife. I can find nothing in the proof showing the act of cancellation to be dependent on any other act of the testator, or that it was related in any way to an intent on his part to make the same effective only when some more formal method of revocation had’been adopted by him.
    In the light of his declarations before the cancellations, and of his avowed purpose and reasons for making them, coupled with, his treatment of the new draft of the will, when it was received, and for nearly two months thereafter, I am satisfied that at the time testator made the lead pencil marks through the clauses of his will, he made them with the intent at that time of revoking such clauses by cancellation, and that his act in then making the cancellations was final, and not deliberative or conditional on any other intention or act on his part.
    My conclusion is that the cancellations were made animo revocandi, and the will will be admitted to probate with the canceled parts omitted.
    The decree of the orphans court upon appeal to the prerogative court was reversed for reasons that appear in the opinion of the vice-ordinary. The present appeal is from this decree of the prerogative court.

      Mr. Edmund Wilson, for the appellants.

      Messrs. McDermott & Fish, for the respondents.
   Per Curiam.

We have reached the conclusion that- the decree of the orphans court was right, and should be affirmed for the reasons stated in the opinion filed by Judge Poster in that court, and that to this end the decree of the prerogative court should be reversed.

Our examination of the testimony convinces us of the correctness of the conclusions reached by the orphans court, viz., that at the time the testator made the erasures his sole object was to get rid of the clauses that he so canceled, and that the having of a fair copy made by a penman, and whatever grew out of it, were after thoughts to which controlling significance did not attach. What we wish to emphasize is that in revocations of this nature, there is but one point of time as to which the intent of the testator is to have controlling effect, and that is the time of the doing of the very act that constitutes such revocation. To extend the scope of such inquiry to subsequent periods, however closely related in point of time with the revocatory act, is but to add a new danger to a rule that is already from its inherent nature too much exposed to fraud.

The decree of the prerogative court is reversed, and the decree of the Monmouth county orphans court affirmed.

For affirmance—The Chief-Justice, Reed, Trenohard, Voorhees, Minturn, Vroom—6.

For reversal—Garrison, Parker, Bergen, Vredenburgh, Gray, Dill, Congdon—7.


text:
    State Mutual Building and Loan Association of New Jersey, complainant-respondent, v. Millville Improvement Company et al., defendants-appellants.
    [Argued June 23d, 1909.
    Decided November 15th, 1909.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Walker, whose opinion is reported in 7k N. J. Fq. (k Buch.) 721.

      Mr. F. Morse Archer, for the appellants.

      Mr. Solomon S. Iszard, for the respondent.
   Per Curiam.

The decree appealed from is affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Walker.

For affirmance—The Chief-Justice, Garrison, Swayze, Eeed, Trenchard, Parker, Bergen, Voorhees, Minturn, Bogert, Vredenburgh, Gray, Dill, Congdon—14.

For reversal—None.


text:
    Stephen L. Tingley, appellant, v. International Dynelectron Company et al., respondents.
    [Argued June 24th, 1909.
    Decided November 15th, 1909.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Emery, whose opinion is reported in If N. J. Ftj. (f Buck.) 588.

      Mr. Frank F. Bradner, for the appellant.

      Mr. Flwood <7. Harris, for the respondents.
   Per Curiam.

The decree appealed from is affirmed, for the reasons stated in the opinion delivered in the court below by Vice-Chancellor Emery.

For affirmance—The Chief-Justice, Garrison, Swayze, Eeed, Trenchard, Parker, Bergen, Voori-iees, Minturn, Bogert, Vredenburgh, Vroom, Gray, Dill, Congdon—15!

For reversal—None.


text:
    Ferry Hallock Company, complainants-respondents, v. Progressive Paper Box Company, defendants-appellants.
    [Argued June 24th, 1909.
    Decided November 15th, 1909.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Emery.

      Messrs. Howe & Davis, for the complainants-respondents.

      Mr. Philip J. Schotland, for the defendants-appellants.
   Per Curiam.

The decree appealed from is affirmed, for the reasons stated in the opinion delivered in the court below by Vice-Chancellor Emery.

For affirmance—The Chief-Justice, Garrison, Swayze, Reed, Trenci-iard, Parker, Bergen, Voorhees," Minturn, Bogert, Vredenburgh, Vroom, Gray, Dill, Qongdon—15.

For reversal—None.


text:
    Mary L. Swift, complainant-appellee, v. Robert D. Craighead, Jr., individually and as executor of Mary A. Sloan, deceased, defendant-appellant.
    [Argued July 1st, 1909.
    Decided November 15th, 1909.]
    On appeal from an order of the court of chancery advised by Vice-Chancellor Learning.

      Mr. Richard V. Lmdabwry, for the appellant.

      Messrs. Bleakly & Stockwell, for the respondent.
   Per Curiam.

The order appealed from is affirmed, for the reasons stated in the opinion delivered in the court below by Vice-Chancellor Learning.

For affirmance■—The Chief-Justice, Garrison, Beed, Trenohard, Bergen, Voorhees, Minturn, Bogert, Vredenburgh, Vroom, Gray, Congdon—12.

For reversal—Swayze, Parker—-2.


text:
    Robert M. Hattie et al., complainants and appellants, v. Gustave W. Gehin, defendant and respondent.
    [Submitted July 3d, 1909.
    Decided November 15th, 1909.]
    On appeal from an order of the court of chancery advised by Vice-Chancellor Howell.

      Messrs. Edward A. & William T. Day, for the appellants.

      Messrs. Barrett & Barrett, for the respondent.
   Per Curiam.

The order appealed from is affirmed, for the reasons stated in the opinion delivered in the court below by Vice-Chancellor Howell.

For affirmance—The Chief-Justice, Garrison, Swayze, Reed, Trenchard, Parker, Bergen, Voorhees, Minturn, Bogert, Vredenburgh, Vroom, Gray, Dill, Congdon—15.

For reversal—None.


text:
    Ida Wagner, appellant, v. Philip J. Deegan et al., respondents.
    [Argued June 24th, 1909.
    Decided November 15th, 1909.]
    On appeal from a decree of the court of chancery.

      Mr. J. M. Archer and Mr. Frederick A. Bex, for the respondents.

      Mr. J oseph Kaighn, for the appellant.
    Affirmed.
   For affirmance—The Chiee-Justice, Garrison, Swayze, Eeed, Parker, Bergen, Vooehees, Minturn, Bogert, Vre-DENBURGH, VROOM, GRAY, DlLL, CONGDON—14.

For reversal—None.


text:
    Ida E. Collins et al., defendants-appellants, v. William A. Garrigues, complainant-respondent.
    [Argued June 25th, 1909.
    Decided November 15th, 1909.]
    On appeal from a decree of the court of chancery.

      Mr. Timothy J. Middleton, for the appellants.

      Mr. George B. Evans and Mr. Solomon S. Iszard, for the respondent.
    Affirmed.
   For affirmance—The Chiee-Justice, Garrison, Swayze, Reed, Trenchard, Parker, Bergen, Yoorhees, Minturn, Bogert, Yredenburgh, Gray, Dill, Congdon—14.

For reversal—None.


author: Garrison, J.

text:
      Herbert Lloyd et al. v. Pennsylvania Electric Vehicle Company.
    [Argued December 3d and 4th, 1908.
    Decided March 1st, 1909.]

       Omitted from its proper place in 75 N. J. Eq. (5 Buch.) 263.—Rep.

   Garrison, J.

(dissenting).

My vote in this case is determined by two fundamental rules for the construction of statutes, first, that effect be given to all of the language of each section of the act that is under construction, and second, that the re-enactment of a section after a certain force and effect has been placed upon it by judicial construction amounts to a legislative declaration that such is its intended force and effect. I perceive no reason why these elemental rules should not be applied to the construction of sections 18 and 86 of the Eevised Corporation act of 1898, which is the matter presented for determination upon this appeal; if applied the two sections may be harmonized.

Section 86 of the act in question is a re-enactment of section 80 of the act of 1875 after a judicial construction had been placed upon it. This construction was that the provision of section 80 as to distribution of surplus upon dissolution was “a legislative declaration of what are the rights of the holders of preferred stock when the law or contract under which the stock is issued does not in any way limit or restrict them.” McGregor v. Home Insurance Co., 33 N. J. Eq. (6 Stew.) 181.

As the statute law then stood such legislative provision was one that incorporators were apparently without power to escape. Such power is now, however, expressly conferred by section 18 of the revised act of 1898 by a new provision that authorizes the creation of stock with such preferences “as shall be stated and expressed in the certificate of incorporation.” Hence if incorporators do not desire that such legislative provision as to the rights of stockholders upon dissolution (contained in the eighty-sixth section) should be read into their charter-contract all that they have to do is to “state and express in their certificate of incorporation” whatever provision touching the matter they desire to substitute therefor. The power to do this is given in section 18 and the mode of its accomplishment is specifically laid down. It is only when incorporators do not avail themselves of the power thus conferred by section 18 that the legislative provision of section 86 determines the matter as theretofore. Thus the previously construed provision of section 86 and the new provision of section 18 are harmonized consistently with their joint enactment; incorporators having under the new provision of section 18 untrammeled power to define the relative rights of their stockholders upon dissolution provided they do so in the manner specifically pointed out in such section, while the re-enacted legislative provision of section 86 is left in unimpaired force whenever incorporators do not avail themselves of the power conferred upon them by section 18. Thus effect is given to the language of each section without the interpolation of language that is to be found in neither.

The contention of the appellants on the other hand- does violence to both of these fundamental rules. The construction for which they contend would interpolate into section 18 after the word “preferences” the word “only,” making it read “such preferences only as shall be stated and expressed,” whereas the legislative language is that stock shall have “such preferences as shall be, stated and expressed.”' The effect is to alter section 18 diametrically, creating thereby an irreconcilable conflict between such section and section 86, where before none existed. For as the two sections left the hands of the lawmaker the legislative provision of section 8'G was a part of every charter-contract where no different provision was “stated and expressed” in the certificate, whereas after such interpolation such legislative provision was null and void unless “stated and expressed” in the certificate. This is legislation, not construction. Moreover, as construction seeks to avoid discord, not to create it, it is entirely alien to its function to insert in an act words that render the harmonizing of its several sections impossible.

Because of the irreconcilable conflict thus gratuitously created the appellants strip section 86 not only of its judicially established force but of all force whatsoever by making it effective' only when it had become ineffectual. Eor the proposition is that the provision of section 86 is to be given effect only when a like provision has been declared by the incorporators and "stated and expressed” in their certificate of incorporation, in which case of course section 86 is entirely unnecessary and of no effect at all. If this had been the intention of the legislature it is too plain for argument that it would not have re-enacted the judicially construed provision of section 86.

The net result therefore of departing from the elemental rule of giving to the language of the legislature is to legislate into section 18 a provision that is not therein and to legislate out of section 86 a provision that was re-enacted by the legislature in view of its established construction. I cannot agree with the appellants that this is the proper way to deal with legislative language.

In the present case the certificate of incorporation after showing that preferred stock has been created "states and expresses” the rights of such stock while the company is a going, dividend declaring concern, but omits to “state and express” what such rights shall be upon dissolution, which is the very matter expressly provided for by the legislature itself in section 86. Hence under elemental principles such legislative provision is to bo read into the charter-contract just as it was in McGregor v. Home Insurance Co., which case, in view of the creation of preferred stock by the defendant in the present case, is in no respect distinguishable from it. This was the conclusion reached in the court below by Vice-Chancellor Learning, with whose views I am in entire accord. I am requested by Justices Eeed, Trenchard and Voorhees to say that they concur in the views expressed in the foregoing memorandum.