text:
    Eugene V. Connett et al. v. United Hatters of North America et al.
    [Submitted June 30th, 1909.
    Decided July 19th, 1909.]
    1. ' A court cannot pretend to be ignorant of facts in relation to a strike of employes in a large city within its jurisdiction, which are common to the knowledge of every intelligent person within the county.
    2. False statements in affidavits on behalf of defendant opposing a preliminary injunction must be held to weaken very much their evidence in other respects.
    3. The undoubted principle of law that every man is bound by the consequences of his own acts applies to the acts of labor unions in ordering a strike and encouraging its continuance, and they must be held accountable for all the results that can property be traced to their original action.
    4. Acts of violence, intimidation, and coercion chargeable to local labor unions, consisting of assaults on employes by strikers and their sympathizers, assembling of mobs of such persons resulting in riots, turbulent affrays in the streets, and the organization of a system qf picketing, for the purpose of annoying employes not participating in the strike, are unlawful.
    5. Unless bound by contract, employes may, singly or in a body, leave their employment whenever they choose, and for any reason, or for no reason at all, but when they go they have no right to interfere in the slightest degree with the efforts of the employer to fill their places; and, in like manner, the employer may discharge one or all of his employes, and, having done so, he cannot interfere in any degree with their efforts to obtain employment elsewhere.
    6. The employer and employe have correlative rights which appear in our constitution in' the clause “among which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property, and of pursuing and obtaining safety and happiness,” and there is no law applicable to the one that does not apply to the other with equal force.
    7. The action of local labor unions in calling meetings, and in the most public and formal manner expelling members refusing to join in a strike, without according them a hearing, where they were guilty of no moral turpitude, and where, according to the by-laws, they had already lost their membership, must be regarded, in passing on the right to an injunction against intimidation of employes desiring to work pending a strike, as action taken to stand in terrorem as to the remaining members.
    8. Act of February 14th, 1883 (P. L. 1883 p. 36), providing “that it shall not be unlawful for any two or more persons to unite, combine or bind themselves by oath, covenant, agreement, alliance or otherwise to persuade, advise or encourage, by peaceable means, any person or persons to enter into any combination for or against leaving or entering the employment of any person, persons or corporation,” has no relevancy to a civil suit to enjoin labor unions and their officers and members from unlawful acts intended to intimidate and interfere with the employes of complainants pending a strike.
    9. Without proof that a national association of employes as a body encouraged the unlawful acts of local unions in connection with a strike ordered by them, injunction will not lie against it, but its president should be enjoined when, notwithstanding his public utterances against unlawful disturbances in connection therewith, he has encouraged the same, and is in fact in charge of the strike, and his utterances have also been at variance with those in which he counseled peace.
    On motion for preliminary injunction.

      Messrs. Sommer, Colby •<& Whiting, for the complainants.

      Mr. Samuel Kalisch and Mr. Edward M. Colie, for the defendants.
   Howell, Y. C.

The complainants in this case comprise the firm of E. Y. Connett & Company, hat manufacturers, doing business in Orange. The defendants are the Hnited Hatters of Forth America and four local unions affiliated with it, all of which are unincorporated associations, and many individuals who are members of these locals.

The bill alleges that the members of these unions who were formerly employes of the complainants .are on a strike, and that they and the unions to1 which they belong have been and are interfering with the conduct of the complainants’ business, and are attempting to deprive them of the free flow of labor to their factory by unlawful means and by a series of unlawful acts.

These unlawful acts, as charged in the bill, consist of three classes, the general object of all three being the intimidation and coercion of workmen who would be and are willing to work for the complainants in the place and stead of the strikers. The classes of acts of intimidation and coercion complained of are— first, actual violence, including assaults, disorderly and turbulent conduct on the streets, the assembling of mobs of strikers and their sympathizers, and the destruction of property by the mobs; second, picketing, by which certain persons have been assigned by the local unions to watch the people who approach the complainants’ factory for the purpose of procuring work, and assemble about the railway stations in Orange to make overtures to people who they think may be seeking employment from the complainants, and threatening them or attempting against their wishes to persuade them to refrain from entering the complainants’ employ; third, the penalizing of members of the union who disregard the action of the local unions and either remain in or re-enter the employ of the complainants, the particular charge being that members of the union thereby lose their right of membership and may not be restored except upon the payment of some inordinate fine the amount of which is fixed by the unions in general meeting. These are claimed by the complainants to be unlawful and unjustifiable proceedings. They, say that these acts have had the effect of intimidating persons from entering their employment and of coercing others to leave and remain out of their employment, and they pray that the defendants may be enjoined from further acts of this character.

I may say at the outset that the situation is a very serious one and has been so since January 15th of this year, on which day the strike began. Eor six months the hatting district in Orange, and in some parts of Newark, have been in a state of continual uproar and riot. At times the mobs appear to have been entirely unmanageable by the ordinary peace officers of the city. This is common knowledge, and while it does not appear in the affidavits that an appeal was made to the sheriff of the county to assist the local authorities, or that the disturbance attracted the notice of the criminal courts of the county, or that the matter was investigated by the grand jury, it is nevertheless a fact which has come to the knowledge of every person of intelligence in the county and the court certainly could not pretend to be in ignorance of facts which are so universally known.

The complainants are large manufacturers; their normal number of employes is about seven hundred and fifty; they have employed in their business a very large amount of capital; their annual business amounts to over a million and a half of dollars,, and their annual pay roll to upwards of $600,000.

The strike left them practically without employes. At the time of bringing of the suit they had succeeded in employing enough men to keep their factory running, but a large proportion of these employes were and are yet obliged to actually live in the factory and refrain from going on the streets in order to escape the violence with which they were and are threatened. The complainants have been obliged to transfer their hat trimming department to the city of New York, and they have been compelled further to protect their property from the assaults of mobs by employing a large number of private watchmen. In short, the situation is one which ought not to be tolerated in any civilized community and is one of the situations which is intended to be taken care of by the ordinary common-law methods. These acts of violence and disorder which are so fully testified to in the complainants’ affidavits and which everybody of ordinary intelligence knows about, are denied by a large number of the affiants on behalf of the defendants. These affidavits, in so far as tliejr deny the acts of turbulence and rioting and other public affrays in the streets, are undoubtedly false. I must reject their statements on these points and do so with the remark that their evidence on other points, and in fact the whole of the defendants’ case, is thereby very much weakened. It is inconceivable that the complainants and their witnesses should testify to such uniform and continuous course of outrage if there were not a foundation of fact for it.

I will first discuss the acts of violence which are charged against the defendants. On April 13th, 1909, a most brutal and almost murderous assault was made upon John Miller. He was rendered insensible and had to be carried to the hospital and was on the following day sent back to his home in Yonkers. This assault is traced to James Brennan, an Italian named Cappania and two other men, all of whom are identified as strikers or their sympathizers and some of them as members of one of the local hatters’ unions. On March 15th, Michael Straub was assaulted by a member of the hatters’ union near the Highland avenue railway station in Orange. On March 13th a somewhat similar assault was made upon Frank Straub. These assaults seem to have been unprovoked. T'o some extent they are denied, but the denials are not clear and convincing, and I am led to believe that the facts are as are stated in the affidavits of the three men who were assaulted. There could have been but one cause for it, viz., to intimidate these men, who were actually working for the complainants, and others who might desire to do so, and thus embarrass the complainants in their attempt to carry on their business. Another form of intimidation was that of shouting at the employes, calling them offensive names, following them about in large bodies. Stories of acts of this character are told by Frank Allen, Frank Baker, Walter H. Griffith and Franklin Doty, and similar stories of happenings at the railway station and on the railway are told by Mrs. McChesney and Mrs. Hennion.

As to picketing and thereby attempting to influence the employes of the complainants, it seems very clear that there was picketing and that some or all of the four local unions involved in the strike paid men for the purpose of performing this service. It appears by the affidavit of Willis Glazier that an executive ■committee was appointed from Local 13, consisting of Charles Collin, Fred. Schmalz, Stringer White and Thomas Donavan, ■and from Local Wo. 14, Eichard Lowe, Hugh Glover, James Byrne and Henry II. Jeffreys, to superintend the picketing. These men unite in an affidavit which is intended to deny the allegation on the part of the complainants in that behalf, but .a reading of the affidavit shows that instead of a denial it is rather a confession of the fact charged against them. Their affidavit is a joint one, and I quote this from it as showing the sort of denial upon which they rely:

“I am a member of said executive' committee and say that these charges and allegations are each and all of them false and untrue. The executive committee in question has been in existence for a number of years and was not specially appointed at the beginning- of this strike or for the purpose named.”

The four local unions which are affiliated with the United Hatters of Worth America which are implicated in this strike are known as Local Wo. 4, Local Wo. 13, Local Wo. 14 and Local Wo. 17. It is stated by the defendants’ affidavits that the strike now in progress was not ordered or promoted by the national body, the United Hatters of Worth America, as is charged in the bill, but was ordered and fomented by these four local unions. From other circumstances in the papers I think that this is a statement of fact. It is an undoubted principle of law that every man is bound by the consequences of his own acts, and this rule applies to the case in hand. These four local unions having -ordered the strike and having encouraged it by the payment of wages to individuals to carry it on, must be held accountable for all the results that can properly be traced to their original action. It was so held in Franklin Union. No. 4 v. People, 220 Ill. 355; 77 N. E. Rep. 176. The following is from the opinion: “It appears that the strike was inaugurated by Franklin Union Wo. 4, that it provided a place in which the strikers might congregate near the business place of the members of the Chicago Typothetse; that it raised a fund by assessing members of the union that did not go out upon the strike; that the said fund was used by it to maintain its members who did go out while they were engaged in the strike; that its regular committee actively sought to induce persons in the employ of the Chicago Typothetae, or who sought employment from them, not to remain in their employ, or not to accept employment from them, and that many of its members are actually engaged in picketing and in the use of force and intimidation against the employes of the association or persons seeking employment from them. It is clear that the violence, force, threats, intimidation and coercion which immediately followed the inauguration of the strike * * * was the direct result of the action of Franklin Union Fo. 4 * * * and the results which followed were those which Franklin Union Fo. 4 and its officers are bound in law to know would likely follow their action in inaugurating and carrying on what counsel characterized as an industrial war, and Franklin Union Fo. 4 having set in motion the affairs which produced the results pointed out cannot excuse itself for the part it took in the conspiracy by the statement of its officers that they advised the members of the union to be orderly and obey the law.” Similar language was used by the United States circuit court for the western district of Tennessee in Southern Railway Co. v. Machinists’ Local No. 14, 111 Fed. Rep. 49, and in Union Pacific Railroad Co. v. Ruef, 120 Fed. Rep. 102 and in the opinion of Vice-Chancellor Bergen in Jonas Glass Co. v. United Glass Blowers Association, 72 N. J. Eq. (2 Buch.) 653. I therefore feel bound to charge the four local unions with the acts of violence, intimidation and coercion complained of and of having organized a system of picketing for the purpose of annoying the complainants’ employes. It does not need the citation of authorities to show that these acts are unlawful; they have been the subject of frequent adjudication in this state and elsewhere. Unless bound by contract, employes may singly or in a body leave their employment whenever they choose, and for any reason, or for no reason at all, but when they go they have no right to interfere in the slightest degree with the efforts of the employer to fill their places. In like manner the employer may discharge one or all of his employes, and having discharged them he has no right to interfere to any degree with their efforts to obtain employment elsewhere. The employer and the employe have correlative rights; they appear in our constitution in the clause

“among- which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property, and of pursuing and obtaining safety and happiness.”

And there is no law applicable to the one that does not with equal force apply to the other.

There remains to be discussed the question which relates to the penalizing of members for disobeying the rules of the association and the imposition oE fines, so called, for violation of the union rules. This branch of the case was discussed by counsel for the defendants with great learning and ability, and in a most valuable brief they seem to have collected all the precedents bearing upon the subject; but when I come to a consideration of the ease I find that I cannot decide the point that was so elaborately argued. The fact complained of on this branch of the case is that one or more of the local unions have actually expelled members of the union for the professed cause that they did not join in the strike and so violated the commands of the union. The by-laws of the four local unions contain provisions relating to this subject which are substantially the same. Taking the bylaws of Local No. 4 as an example, it appears in article four, section six, that

“Any journeyman who may have gone foul, or who may hereafter go foul in this district, shall make application as provided for in sec. 5 of art. 1, but in no case shall he receive a card for a less sum than thirty dollars cash, and no fine remitted unless by a unanimous consent of the Association.”

It was stated in the argument, and in fact the argument proceeded upon the idea that any member of Local No. 4 who remained in or returned to the complainants’ employment had gone “foul” and that he thereby ipso facto lost his membership in the union, and that it was necessary before he could be entitled to a union card again to make application for membership under article one, section five, which provides that

“applications for membership to this association shall be made in writing to the secretary, and the same be accompanied with a deposit of fifty dollars; the name of the applicant shall be placed on notice of regular meeting. All applications shall be referred to a committee of seven according to National law, who shall report at next regular meeting, and if applicant is rejected the deposit shall be returned.”

I find nothing in these by-laws which gives to the association the right to impose any enormous fine upon an applicant for membership or for reinstatement, excepting in the by-laws of Local No. 13, which provides that if a journeyman shall go “foul” he may afterwards be admitted to membership by application to the vigilance committee and complying with their decision. I take it to be the law of each of these local associations that if a member goes “foul” he thereby ipso fado loses his membership and that no action by the association is necessary to cut him off from the benefits of the union.

In this case the local went far beyond what was required in order to relieve the union of the incubus of recalcitrant members. They appear to have called a meeting or meetings of the association and then and there, in the most public and formal manner, expelled certain members who were guilty of disobedience to the decrees of the union. These men who were so formally and publicly expelled had, according to all the theories of the defendants prior to that time, lost their membership, and hence it was unnecessary to take any action whatever. Of course, there is but one conclusion to be drawn from such conduct. It was done for the purpose of exhibiting to the other members the penal effect of remaining peaceably in the employ of the complainants. I do not discuss the right of the union under ordinary circumstances to expel its members if its rules and regulations are violated, but here the circumstances are extraordinary. The expelled members were guilty of no moral turpitude; there was no hearing accorded to them, and if the contention of the defendants is correct it was a useless form, but in the storm and stress of a strike it was undoubtedly expected that the action so taken would stand in terrorem as to the remaining members of the association.

I do not think that the act of 1883 (P. L. 1883 p. 36) has any relevancy to the facts in this case. If it is to receive the interpretation given to it by Vice-Chancellor Pitney in Frank v. Herold, 63 N. J. Eq. (18 Dick.) 443, it does not affect a civil controversy at all. If it does apply to civil remedies it is taken wholly out of this case by the use of the phrase “by peaceable means,” for, surely, no one can say that the acts of violence above referred to, for which I hold the local unions responsible, are peaceable.

I do not find in the affidavits any proof that the national association, as a body, engaged in encouraging the unlawful action of the local unions, and hence no injunction can run against that body. I do find, however, that John A. Moffitt, the presi-, dent of the association, notwithstanding his public utterances against disturbances, has encouraged the same, and, in fact, is in charge of the strike. His utterances on February 12th are entirely inconsistent with those in which he counsels peace and are sufficient in my opinion to make him liable to be enjoined.

I will therefore advise an injunction against John A. Moffitt, the four local unions above mentioned and those of the defendants who are members thereof and who have been served with the order to show cause herein, and also against those defendants who have been served who have made no denial of the allegations against them. The writ should operate as a restraint upon these classes of defendants to prevent them from further commission of the unlawful acts hereinabove mentioned.


source: Caselaw Access Project

author: Howell, Y. 0.

license: Public Domain

text:
    The Borough of Spring Lake v. Karl T. Polak et al.
    [Submitted June 25th, 1909.
    Decided July 17th, 1909.]
    1. Evidence held to show a dedication to public use of certain property marked on a plat.
    2. Evidence held to show an acceptance by a borough of a dedication of property to public use.
    3. The bringing by a municipality of a suit to enjoin defendants from using certain property, and the allegation in the bill of a dedication of the property to public use, and an acceptance thereof, was of itself an acceptance.
    4. But little affirmative action is required to indicate an intention to accept a dedication of property to public use.
    On final hearing on bill, answer, replication and proofs.

      Messrs. Durand, Ivins & Carton, for the complainant.

      Mr. Aaron E. Johnston and Mr. William C. Johnson (of the Washington bar), for the defendants.
   Howell, Y. 0.

Prior to 1877 Cephas M. Woodruff and Erederick H. Smith, Jr., acquired a tract of land in Wall township, Monmouth county, having the Atlantic ocean for its easterly boundary. The tract consisted of upwards of seventy-three acres. They caused a map of the property to be made upon which they delineated streets and avenues and divided the property into two hundred and forty-two building lots. Along the ocean front, and a short distance therefrom, they laid out on the map a street one hundred feet wide which is denominated Ocean avenue. The map shows that easterly of .Ocean avenue, and between it and the ocean, there is a strip of land which was testified to be about fifty to sixty feet wide denominated “bluff,” and in front of the “bluff” and between it and low-water mark of the ocean there is a strip of land of a varying width which is represented by the word “beach.” This map was called “Map of the Brighton Land Association,” and it was under that name that Woodruff and Smith made sale of the lots comprised in the tract. It was filed in the office of the county clerk of Monmouth county on April 10th,. 1880. Smith and Woodruff eventually sold all the lots, and in every deed made by them was contained a clause written at the end of the description of the land conveyed, of which the following is a cop}*- :

“The above descriptions are intended to conform to the relative location of said lots as they appear on said map; and so much of the land lying easterly of the streets running to Ocean avenue as would constitute such streets if they were extended to the sea, in common with all the owners of lots on said tract, as a free foot-passage way to the sea, and so much of the land of the streets to the middle thereof as constitute the streets which bound directly on the lots hereby conveyed, and so much of the land lying easterly of the lots fronting on Ocean avenue to the line of low-water mark of the ocean as would be comprised between the most northerly and most southerly lines of the lots on Ocean avenue hereby conveyed, if said lines were extended to the sea. And it is hereby expressly agreed between the parties hereto, their heirs and assigns, that all the streets as laid on said map shall remain and continue as public streets never to be closed, without the written consent of all the owners of lots as laid down on said map, and that all the land designated ‘bluff’ on said map lying easterly of Ocean avenue shall remain open and free as a park or promenade for all the owners of lots as laid down on said map, and no buildings or structures of any kind shall be erected thereon without the written consent of all said lot owners, except light, open and neat summer houses, which will not materially obstruct the view of the sea from any point of the lots on said map. And such summer houses may be built only by those owning lots on Ocean avenue, and by them only in front of their respective lots, and that all the land designated on said map as ‘beach’ shall be open and free to the use of all the owners of lots on said map, but no buildings except neat bath houses shall be erected thereon, and such bath houses may be erected only by owners of lots fronting on Ocean avenue in front of their respective lots.”

The “bluff” appears from the case to he a series of sand dunes of the width of fifty to sixty feet and to be elevated some ten feet in places above the level of Ocean avenue. The strip marked “beach” is the shingle that extends from the “bluff” to low-water mark and is nearly if not quite covered with water at high tide.

At the time Woodruff and Smith acquired the land in question and made the map and began the sale of lots according to it, the land was subject to the township government of Wall township.' In May, 1884, a borough commission was incorporated which included the Woodruff and Smith tract and other lands, which borough commission on January 4th, 1893, was incorporated under .the Borough act of 1891 by the name of The Mayor and Council of the Borough of North Spring Lake. The borough of Spring Lake had been incorporated as a borough in March, 1892, and these two boroughs were consolidated under the name of The Mayor and Council of the Borough of Spring Lake in 1904. This borough is the complainant; it claims the right to regulate that portion of the land appearing upon the Woodruff and Smith map which is included within the street lines and within the lines of the parcels marked “bluff” and “beach” upon the theory that these parcels have been dedicated to public uses. The bill,alleges that the defendants Polak and Johnson have made a bathing place in front of two of the lots abutting on Ocean avenue by setting posts in the sand of the “beach” and of the “bluff,” and other posts in the ocean below low-water mark, and have connected the same by means of life lines which are used by people who bathe in the ocean at that point; that they have done this without the consent or permission of the complainant borough and without any right on their part to maintain the same; and it prays that the defendants may be compelled to remove their bathing fixtures and be restrained from erecting others. Their right depends upon the question of the dedication to public use of the lands lying between Ocean avenue and high-water mark of the ocean.

The complainant claims that a dedication to public uses of the two strips denominated on the map “bluff” and “beach” must be implied from the circumstances, if not from the deeds themselves. 1 am of opinion that a dedication cannot arise from the clause in the deeds which relates to the lands easterly of Ocean avenue, but the deeds, the map, the conduct of the lot owners and of the municipality, taken together, in my opinion, manifest an intention on the part of all concerned to consider the property as property devoted to public uses. The delineation of the “bluff” and the “beach” upon the map without explanatory words would lead one to think that this portion of the property was intended to be treated quite differently from the portion which was divided into lots. Similar facts have been taken in other cases to mean an absolute dedication. In Methodist Church v. Hoboken, 33 N. J. Law (4 Vr.) 13, a map was made, called the Loss map, in 1804, on which was delineated a plot marked with the word “square.” Concerning this, Mr. Justice Depue, in 1868, says: “The word ‘square,’ as a term of dedication, imported a complete and unrestricted abandonment to the public uses above indicated.” In Price v. Plainfield, 40 N. J. Law (11 Vr.) 608, a map was made upon which there was a plot of about three acres represented on the map by a space in which -was written the word “park.” This was held by our court of errors and appeals to be a dedication of the plot to public uses as a public park. In Bayonne v. Ford, 43 N. J. Law (14 Vr.) 292, a map was made on which was laid out an open space which was marked “Annette Park, now belonging to E. Graves.” It was held that the property represented by this section of the map was devoted to public uses as a public park. In Weger v. Delran, 61 N. J. Law (32 Vr.) 224, a map was made which was entitled, “Plan of Beehtold’s 4th Addition to the Town of Progress,” on which all the blocks, except the locus in quo, were divided into numbered lots. The property in dispute was .distinguished from the other blocks by a different coloring, by the delineation of trees and paths and by a rough representation of a fountain in the centre. The court of errors and appeals held that the property so marked was devoted to public uses. In Fessler v. Town of Union, 67 N. J. Eq. (1 Robb.) 14, a map was made indicating an open space one hundred and fifty feet wide and between two and three hundred feet long marked “Liberty Place,” in which there was laid down a small lake shaped like an elongated egg marked “Indian Pond.” The map-showed also within the open space some flower beds and representations of trees. It was held that the property comprised in the open space was dedicated to public uses. In all these cases the maps had been published and lots had been sold in accordance with them, and all the requirements for dedication had been complied with.

In my opinion, the delineation of the “bluff” and of the “beach” upon the map in evidence in this case, amounted to a tender of dedication to public uses on behalf of the owners of the fee, and in order to complete and finally confirm the title of the public to the easement for public uses nothing was required except an acceptance by the municipal body having jurisdiction over it. I do not find in the case any evidence that the proffered dedication was accepted by Wall township, but immediately upon the organization of the borough commission in May, 1884, there is in the minutes of the commission very early reference to the property and very early action with respect to it. In May, 1884, the council authorized the construction of culverts under the “bluff” to carry off storm water from the streets to the ocean, and thereafter the municipal government did many other things which indicated their acceptance of the dedication. There was a boardwalk constructed partly on the beach and partly on the bluff with money that was raised by private subscription, but the municipality insisted upon supervising the work of laying it, and it was done under the supervision of the officer known as superintendent of the borough. This boardwalk has been renewed three or four times, and has been kept in repair and been maintained all at the expense of the municipality. The bluff and beach have been lighted, policed, cleaned, superintended and watched over by the municipality at its own expense, and since the shore in front of the Woodraff and Smith tract became a part of the complainant corporation the complainant has borrowed money on a bond issue to be used in improving it, including the property in question in this suit. In fact, the bringing of this suit and the allegation in the bill of a dedication and acceptance is ol itself an acceptance. Atlantic City v. Snee, 68 N. J. Law(39 Vr.) 39. It takes but little affirmative action to indicate an intention to accept a dedication. In Arnold v. Orange, 73 N. J. Eq. (3 Buch.) 280, it was held the construction by the municipality of a public sewer in a dedicated street was an acceptance, and in Peoples Traction Co. v. Atlantic City, 71 N. J. Law (42 Vr.) 134, an ordinance providing for the paving of a dedicated street was lield to be an acceptance. Besides these affirmative acts on the part of the municipality, it is very clear that the public generally has used the land in question as a public walk and promenade and for the purposes of bathing and taking the air, for a period of upwards of twenty years. Tn fact, the defendant Polak, when he constructed his-bathing place" in the manner above mentioned, was careful to notify the public of the public character of the bathing place that he had erected by putting up a painted sign advertising the fact that his bathing place was open to the public. The case of Riverside v. Pennsylvania Railroad Co., 74 N. J. Law (45 Vr.) 476, maintains this proposition, and is also authority for the right of the municipality to maintain this suit.

There will be a decree for a mandatory injunction to compel the defendants to remove their bathing fixtures from the bluff and beach and restraining them from erecting other or similar ones in the future.


author: Howell. V. G.

text:
    Aaron E. Johnston, executor, v. Thomas P. McKenna et al.
    [Submitted June 11th, 1909.
    Decided July 21st, 1909.]
    1. "Where defendants in a suit fail to produce one of the defendants as a witness, or his deposition, and his testimony under the circumstances of the case is of the last importance to the other defendants, and the failure to produce him is not explained, the court will expect from the remaining defendants evidence of a character that is clear and convincing to sustain their defence, and any uncertainties in the evidence which he might have cleared up will be resolved in favor of the complainant.
    2. Where a transfer of an equity of redemption of great value for a totally inadequate consideration and on an understanding that it was being taken for the benefit of the mortgagor is procured, the burden of proof, in an action to compel the transferees to account to the mortgagor, is shifted to the transferees, who are called upon to give the utmost explanation and the freest and most open disclosures of all the facts.
    3. In a suit to reach the surplus arising from a mortgage foreclosure sale, evidence held to show that defendants procured a transfer of the equity of redemption at a totally inadequate consideration, and under an understanding that the mortgagor’s interests would be protected so as to render them liable to the mortgagor for the loss sustained.
    4. Where, in a suit to reach the surplus arising from a foreclosure 'sale, it is shown that defendants, transferees of the equity of redemption, obtained the transfer through fraud, a decree for the loss occasioned to the mortgagor by the actions of the transferees may be had against them personally, and it is not necessary to follow the property.
    5. Laches which does not prejudice the defendant, but injures only the complainant, cannot defeat the suit.
    On final hearing on bill, answers, replication and proofs.

      Mr. Aaron E. Johnston and Mr. Frank P. McDermott, for the complainant.

      Mr. Charles J. Roe, for the defendant Hugh E. O’Reilly.

      Mr. Joseph Couli, for the defendant Thomas P. McKenna.
   Howell. V. G.

This bill is filed by the administrator of the estate of Mary E. Throckmorton to recover the sum of $8,000 or thereabouts, being the surplus money arising from the foreclosure of a mortgage on lands owned by Ms intestate in Monmouth county, and which it is alleged was wrongly diverted from her by the joint action of Patrick J. Reilly, Hugh E. O’Reilly, Jr., and Thomas P. McKenna. The property is known as the Rockwell Hotel. It was purchased by Mrs. Throckmorton on May 4th, 1882, from a firm of liquor dealers in New York named O’Reilly, Skelly & Eogarty. Their deed to her is dated on that day. On the same day she gave back to the firm a purchase-money mortgage for $4,900.

On account of the death of Eogarty the firm went into liquidation. He left a will by which he appointed the surviving partners to be executors thereof.

On February 23d, 1892, Mrs. Throckmorton made a second mortgage on her hotel property to the O’Reilly, Skelly & Fogarty Company to secure a loan of $2,000. This mortgage was subsequently transferred to the executors, Hugh O’Reilly and Skelly, and thus these executors, as executors and as individuals, held title to both mortgages.

On December 18th, 1899, C. A. Spalding recovered a judgment against Mrs. Throckmorton for $283. On March 22d, 1899, M. Wooley recovered one for $24, and on July 8th, 1899, Clarence Yan Note recovered one for $339, on all of which executions were issued under which levies were made on the mortgaged premises. The property was advertised for sale by the sheriff of Monmouth county for July 30th, 1900, and was sold on that day to Yan Note, who meantime had taken an assignment of the Spalding judgment. A sheriff’s deed was made to Yan Note for the property on August 2d, 1900, from which time forward he claimed to be the owner of the fee therein. Meantime taxes for several years remained unpaid. Thomas R. McKenna, one of the defendants, took title under tax sales for 1898, 1899 and 1900, which he transferred to Howard Green; Van Note therefore held title subject to the two mortgages and the tax liens.

On October 4th, 1900, the mortgagees filed their bill to foreclose the two mortgages. Mrs. Throckmorton and Yan Note were parties. Mrs. Throckmorton could not be found to be served, and an attempt was made to bring her in by publication. She filed no answer, and a decree pro confesso was taken against her on March 23d, 1901. There was a final decree on May 20th, 1901, and fi. fa. issued on June ,12th, 1901. The sheriff advertised the premises for sale and they were sold on August 5th, 1901, to the defendant Patrick J. Reilly for $16,300. The sum due for liens on that day was $8,263.92; this included $353.35 due to Howard Green for his tax lien. It left a surplus of $8,036.08, which is the subject-matter of this suit.

Yan Note held title until the day of the sale. On that day, and just before the sale, he made a conveyance of the premises to Patrick J. Reilly. This conveyance is important and will be mentioned later on. This deed to Patrick J. Reilly gave him on the face of the papers the title to the fee-simple of the land, and it consequently gave him a presumptive right to the surplus money. On August 14th, Patrick J. Beilly (Thomas P. McKenna acting as his solicitor) presented to this court a petition setting out the proceedings in the foreclosure suit, his purchase at the sheriff’s sale, the conveyance of the fee to Patrick J. Beilly by Van Note, and his claim to the surplus money, and praying that an order might be made directing the sheriff to accept his receipt as payment of the balance of the purchase-money. On that day an order was made referring the matter to a special master to ascertain the truth of the allegations, and also whether the petitioner was entitled to have the sheriff accept his receipt for the surplus money. A report was made upon this reference on August 16th in accordance with the prayer of the petition, which was confirmed on August 20th by an order that directed the sheriff to accept the receipt of Patrick J. Beilly as payment to the extent of the balance of the purchase-money arising from the sale over and above the amount directed to be raised by the execution. It was by this means that the surplus money was diverted from Mr. Van Note and Mrs. Throckmorton to Patrick J. Beilly.

At the time of the sheriff’s sale the property was in the actual possession of one Vaugoine, who held under a lease from Nathanson, who held under Mrs. Throckmorton. Vaugoine attorned to Van Note, and Nathanson’s attempt to assert title failed. Vaugoine paid Van Note rent at the rate of $1,500 a year, besides sower and water rents and repairs.

The event which led up to this suit1 occurred a few days before the foreclosure sale. There is no doubt but that McKenna and Hugh E. O’Beilly, or certainly McKenna, attempted to purchase Mrs. Throckmorton’s interest in the property some time before the foreclosure sale. This is shown by the testimony of Mr. and Mrs. Childs, at whose house Mrs. Throckmorton was living. They state that Mr. McKenna and another gentleman came there to see Mrs. Throckmorton and that they attempted a ne-. gotiation with her about this property, but that she refused to sell them her interest. This statement of these two witnesses is partially denied, although both O’Beilly and McKenna admit that they went to the Childs’ house on at least one occasion for the purpose of seeing Mrs. Throckmorton. Yan Tote says that he met Mrs. Throckmorton in McKenna’s office about a week before this sale, and that McKenna then and there said to him, Van Tote, that he, McKenna, represented Mrs. Throckmorton, and that an agreement had been made that the O’Eeilly firm, mortgagees, would protect Mrs. Throckmorton, and that Hugh E. O’Eeilly became a party to the arrangement a couple of days before the sheriff’s sale. Van Tote says the agreement was that he was to receive $1,250 and make a conveyance of the property to Mrs. Throckmorton or to someone that she and the mortgagees together might designate, and that the property was to be held by the grantee for her benefit; or, on the other hand, if it might be so agreed, the third person might receive the rents, pay Mrs. Throckmorton a small amount for her support and use the balance to reduce the claims, and that when the claims had been reduced to a figure somewhere near the face of the original mortgages, a conveyance was to be made back to Mrs. Throckmorton, and that in the meantime, if a sale could be made, it was to be by consent of the mortgagees and Mrs. Throckmorton, and any sum received above the amount which the mortgagees had in the property and their necessary expenses was to go to Mrs. Throckmorton. He further says that in pursuance of this agreement he, on the Saturday preceding the sale, drew a deed for the premises in question to the defendant Hugh E. O’Eeilly; that the defendant McKenna took the acknowledgment of Van Tote and his wife, and that the defendant O’Eeilly then offered him his personal check for $1,250. Van Tote declined to take it until he had a consent from Mrs. Throckmorton. The defendants O’Eeilly and McKenna then stated that they would not use the deed for any purpose until they had the proper authority from Mrs. Throckmorton, but desired to take the deed, leaving the check and stating they would be .back later in the day. He says that they did come back about seven or eight o’clock in the evening and stated that they could not find Mrs. Throckmorton; that they were very anxious to have the sheriff’s sale come off on the following Monday, and sought to obtain Van Tote’s release and a final delivery of the deed; that Yan Note finally consented to deliver the deed and accept a check upon the defendants’ promise that they would get Mrs. Throckmorton’s consent before the sale or as soon as possible afterwards. On Monday morning, the day of the sale, Yan Note says that O’Reilly and McKenna came to him and asked him if he would make a deed for the premises to Patrick J. Reilly. His recollection is that a new deed was prepared by himself early Monday morning before the parties went to Freehold to attend the foreclosure sale, and that McKenna came again and took the acknowledgments, and that the old deed was destroyed. I may pause here to say that the deed in question, a certified copy of which was put in evidence, shows that it was dated and acknowledged on Saturday, August 3d, 1901. The check for $1,250, drawn by Hugh E. O’Reilly, which was delivered to Yan Note on Saturday, was deposited by him on Monday morning to his credit in the Long Branch bank. Payment of that check was stopped by the drawer, and either Tuesday evening or Wednesday morning O’Reilly delivered to Yan Note the check of Patrick J. Reilly for $1,250, which was deposited on Wednesday, August 7th, and was paid in regular course. The sum and substance of Mr. Yan Note’s testimony is that when he transferred the property to Reilly he did it at the request of O’Reilly and McKenna, and wholly for the advantage of Mrs. Throckmorton, and in order that she might have the benefit of the large equity which would remain after satisfaction of the mortgages and the tax liens. It is quite apparent that if this statement is true, or substantially true, or if there was any engagement or understanding between these parties that Mrs. Throckmorton was to have the ultimate benéfit of her own property, there must, in justice, be a decree in favor of the complainant.

I do not regard the testimony as to what took place between Mr. McKenna, Mr. O’Reilly, Mr. Duffy and Mr. Yan Note on the beach after the sheriff’s sale as of much importance in the case, for the reason that at that time Mr. Yan Note does not appear to have been convinced or to have had any notice of the fact that McKenna and O’Reilly did not intend to deal with Mrs. Throckmorton in accordance with his, Yan Note’s, agreement with them, concerning her. This conversation took place in August of 1901, after the sale but prior to its confirmation and the delivery of the deed, and whatever Mr. Van Note said at that time seems to me to be entirely consistent with his idea that ultimately Mrs. Throckmorton was to get the benefit of the transaction.

The same course of reasoning applies to the efforts made by Mr. Van Note to procure a discharge of the notice of Us pendens which accompanied the suit against him and his efforts to aid McKenna and O’Reilly to get in the tax title which was outstanding-in the name of Green; he does not appear at that time to have suspected that there was any disposition to deprive Mrs. Throckmorton of the benefit of the contract which he claims to have made qn her behalf.

The foreclosure sale took place at Freehold on Monday afternoon, August 5th. The sale was confirmed on September 3d. The deed made to Patrick J. Reilly in pursuance thereof was dated, acknowledged and recorded on September 5th, 1901. Nothing was paid to the sheriff on the day of the sale on account of the purchase-money. Mr. Duffy, who was the mortgagees’ solicitor, acted at the sale fox the purchaser Reilly. He says that he waived the payment of the percentage. Meantime, and before the execution and delivery of the sheriff’s deed, and on August 10th, 1901, P. J. Reilly made a mortgage for $2,000 on the property to Hugh E. O’Reilly. This was made, as Hugh E. O’Reilly says, to secure three loans, one for $1,250, the date of which O’Reilly does not know, one for $250 a few days later, and another for $500, the date of which is not given.

I have no difficulty in believing that the $1,250 loan was the money paid to Van Note for the conveyance just prior to the foreclosure sale, and that the other amounts were for other payments connected with the transaction. The tax title of Howard Green footed up about $375, and there were doubtless other necessary expenses. The manner of securing this debt is a novel one; it was by a mortgage on the lands sold, the title to which had not yet passed to the purchaser. O’Reilly explains this by saying that he had full confidence in Reilly because they had been partners in business. This mortgage was canceled November 2d, 1901.

Mr. Duffy says that about November 1st, 1901, Patrick J. Reilly, the purchaser of the premises, executed a mortgage to a man named Hinds for $8,000. This money was used for the purpose of paying off the complainants in the foreclosure suit. It thus appears that Patrick J. Reilly, or whoever became the real owner of the property, acquired the title thereto without the payment of any money whatever. He had satisfied the mortgages out of the Hinds loan and had satisfied the Hugh E. O’Reilly mortgage by giving him another mortgage for the same amount upon the same premises, and had thus shut out Mrs. Throckmorton from any participation in the proceeds of the sale or any interest in the property itself. The title remained in P. J. Reilly, subject to the two mortgages, until May, 1902; meanwhile it was in the possession of Vangoine as tenant. Mr. Duffy collected the rents, and he finally made sale of the premises to the tenant, Vangoine, by an agreement dated April 30th, 1902, for $14,500. The deed was executed and delivered on May 26th of the same year. Voigoine took the property at $14,500, subject to the $8,000 mortgage only, which left a surplus of $6,500 in Mr. Duffy’s hands to be disposed of; this he did, as follows: He paid to himself for his fees, costs, &c., $500; he paid to Hugh E. O’Reilly, to satisfy his mortgage, the sum of $2,000; he gave his check to the defendant McKenna for $3,000, and the balance, amounting to $1,000, he paid to Hugh E. O’Reilly.

This is the framework of the facts as I find them. There is, however, controversy and denial at each stage of the case. There is, in the first place, a denial of Mr. Van Note’s statement as to what was the original bargain between Mrs. Throckmorton, Mr. McKenna, Mr. O’Reilly and Mr. Van Note—a denial that Mrs. Throckmorton was to have any interest in the premises or its proceeds—a denial that Mr. O’Reilly, and Mr. McKenna profited by the transaction beyond their reasonable fees and necessary expenses, and an assertion that the whole transaction was carried through by them for the benefit of Patrick J. Reilly.

Patrick J. Reilly is a defendant to the suit; he resides and at the time of the hearing resided in the city of New York; his evidence was of the last importance to the other defendants in the case; he could have cleared up many things in the testimony which are now enveloped in a cloud of doubt. He was not produced, nor was his testimony taken by commission; nor is the failure to do either explained by either of the defendants. This is a circumstance which, under the peculiar conditions of this case, must disturb the burden of proof and lead the court to expect from the remaining defendants evidence of a character that is clear and convincing. In his absence, whatever doubts there are in the testimony which it is apparent he might have cleared up if he had been present, must be resolved in favor of the complainant. The funds in this case are finally traced to Hugh E. O’Reilly and Thomas J. McKenna, and I do not think that they have cleared themselves of the receipt thereof. Hugh E. O’Reilly says that the portion of the money that was paid to him was credited by him on account of what P. J. Reilly owed him, but he fails to produce P. J. Reilly or any books of account showing transactions with him or any documents of any nature showing the disposition of the fund or on what account it was credited. Mr. McKenna, to whom $3,000 of the fund was paid, states that out of it he was to have a fee of $1,000, and that the other $2,000 was paid in the purchase of some securities for Patrick J. Reilly, and that those securities were afterwards cashed and Mr. Reilly got his money, principal and interest, but he gives no particulars of the transactions, nor any list of the securities thus dealt in. His whole story is lacking in the details of time, place and circumstance.

I think that the burden of proof on this issue is on Mr. Mc-Kenna, and I am not satisfied with the statements that he makes. I see no reason why both O’Reilly and McKenna should not have corroborated their statements on all these points when it is obvious that it would have been so easy to do it. I cannot help believing that Patrick J. Reilly was a mere dummy in the hands of the other two defendants. He does not appear to have had anything to do personally with the transaction except to give his check for $1,350 to Yan Note. Hugh E. O’Reilly furnished the money for this check which he got back from Duffy in the final distribution in May, 1902. The only other place in which he has personally appeared was before the master on the application for surplus money in the foreclosure suit.

Recurring once more to the events which took place just prior to the sale as detailed in the evidence of Mr. Pay. He says that prior to the foreclosure sale he had conversations with both Hugh E. O’Reilly and Mr. McKenna. He at that time had been retained by Mrs. Throckmorton to pursue Van Note, who held title to the mortgaged premises. In his conversation with Mr. Hugh E. O’Reilly he says that Mr. O’Reilly agreed to do what he could to. allow the loan to remain and to have the sheriff’s sale adjourned and give Mrs. Throckmorton an opportunity to arrange matters so that she could hold her property; that he stated that the mortgagees were willing to do anything for her because they had known her for a long time and she had originally bought the property from them, and that if the mortgagees were eventually compelled to take the property and Mrs. Throckmorton could then make any arrangements to get it at any time thereafter, they would protect her interests. In his conversation with Mc-Kenna just prior to the sale, Mr. Pay says that he told him all the facts concerning the sale of the property under Van Note’s judgment, that Van Note had agreed to make a conveyance back to Mrs. Throckmorton, and that he, Pay, had prepared a bill in Mrs. Throckmorton’s favor to compel a reconveyance to her by Van Note; that he unfolded to him the plan of the suit, and that on one occasion when Mr. Pay was in Mr. McKenna’s office Mrs. Throckmorton was there, and she said to Mr. McKenna: “You agreed to protect 'me in this matter and you were to look after my interests.”

In view of all the testimony in the case, and of the fact that Mr. Pay is entirely disinterested, I am led to believe that these conversations took place, and that these disclosures were made to the defendants by Pay. If it were not true that Van Note was willing to reconvey to Mrs. Throckmorton upon favorable terms, I see no reason why he should have conveyed the property to Reilly for $1,250 unless he expected the conveyance would be used in some way for the benefit of Mrs. Throckmorton. Mr. Pay attended the sheriff’s sale on August 5th, but the proceedings there do not seem to have impressed him very much. On August 12th, he, Pajg filed a bill in favor of Mrs. Throckmorton .against Van Note, P. J. Reilly, Thomas P. McKenna, Hugh O’Reilly and Joseph A. Duffy, charging generally that the property was hers and that she was being cheated out of it. This bill appears to have been prepared before the foreclosure sale as a bill against Yan Note alone, and afterwards was amended so as to bring in the other defendants. Upon the filing of this bill Vice-Chancellor Eeed made an order restraining Yan Note from receiving any ot' the surplus money in the foreclosure suit and directing the sheriff to pay the same into court. This order was filed on August 19th, 1901, and appears by the testimony of Mr. Fay to have been served upon the sheriff, if not upon the other parties. If it was not served on the defendants, I do not see how knowledge of it could have escaped them; there were too many persons interested in the transaction, and there had been too much talk about the situation to permit an important order like the one now mentioned being unobserved. It was two days after the date of this order that the surplus-money petition was filed and the order of reference made to the master. It may be said just here that this bill against Yan Note and others was demurred to, and upon the demurrer being sustained, was dismissed.

It is inconceivable that Yan Note intended by his deed to convey the- large surplus which existed in this property to either Hugh E. O’Reilly, to whom he made the first deed, or to Patrick J. Reilfy, to whom he made the second deed, or that he intended that the3r, or either of them, should take a benefit by the transaction. There seems to be no reason why he should have wished or intended to give them a profit of several thousand dollars, nor is their presence in the transaction at all satisfactorily explained. In fact, the only explanation that was given by either of them for interfering was that Hugh E. O’Reilly had brought the property to the attention of Patrick J. Reilly, who determined that he would like to have the property for hotel purposes, yet although he held the title to the property from September, 1901, to May, 1902, he does not appear to have made any attempt to use it for hotel purposes. There is some evidence that someone attempted to procure a license for the place, but it could not have been Patrick J. Reilty, because he never lived in the premises. Yan Note could probably have retained this surplus for himself; he had given Mrs. Throckmorton a chance to redeem and she had failed; she had employed Mr. Northrop of Jersey City and Mr. Eay of Long Branch to procure loans for her with which to redeem the property from the mortgages, and he appears after her failure to have claimed the property for his own.

I am forced to the conclusion that the decree must go against the defendants upon the grounds hereinabove stated. They appear to me to have procured a transfer of an equity of redemption of great value for a totally inadequate consideration and upon a representation, or at least an understanding that it was being taken for the benefit of Mrs. Throckmorton; that these facts under well-known principles shift the burden of proof and call upon the defendants for the utmost explanation and the freest and most open disclosure of all the facts. This burden has not been met, nor has this disclosure been made, and I must therefore hold them responsible for the loss which has been occasioned to the estate of Mrs. Throckmorton by their action. Indeed, I may go further and say that in my opinion the case made by the bill has been fully proved, and that the complainant is entitled to a decree on his own showing.

I am made the more firm in my conviction of the justice of the complainant’s case by a perusal of the opinion of Yice-Chancellor Pitney in the case of Johnston v. Reilly, 68 N. J. Eq. (2 Robb.) 130, in which the facts are almost identical with the facts in this case. That was a suit originally brought by Mrs. Throckmorton in her lifetime and carried on by Mr. Johnston, her administrator, after her death to a final decree. The bill was filed January 16th, 1903, against Patrick J. Reilly and Hugh O’Reilly and Patrick Skelly, individually, and as executors of Patrick A. Fogarty, deceased. The allegations of the cause of action are substantially the same as those alLeged in this case. At the hearing it was conceded by the complainant that O’Reilly and Skelly could not be made liable either individually or as executors, and a decree passed against Patrick J. Reilly alone, charging him with the whole liability for the surplus money in the said foreclosure suit. At the time of the filing of the bill the present complainant, who was solicitor in that suit for Mrs. Throckmorton, states that he was unaware of the hand that Hugh E. O’Reilly and Thomas P. McKenna had in the affair, and that it was for this reason that they were not included in that bill. Their inclusion in the present bill was made the subject-matter of a demurrer by Hugh E. O’Reilly, which demurrer was overruled by Chancellor Magie. His judgment thereon was sustained by the court of errors and appeals. Johnston v. O’Reilly, 74. N. J. Eq. (4 Buch.) 448. In the Reilly Case, 68 N. J. Eq. (2 Robb.) 130, on the facts therein developed, Vice-Chancellor Pitney held Patrick J. Reilly liable for the whole of the surplus money, estimating the value of the property at the price bid for it at the foreclosure sale. He charged the defendant with $16,300, with interest, from September 5th, 1901, and credited him with the sum of $1,250, with interest, from August 5th, 1901, to September 5th, 1901, and with the amount due on the foreclosure execution on September 5th, 1901, besides the sheriff’s fees. The remainder, with interest to the date of the decree, was the amount for which he directed a decree.

The defendants claim that no decree can pass against them for the proceeds of the sale of the property in question, but if a fraud has been committed, the only claim the complainant can have is a claim directly against the property. I find no authority in the brief for this contention, while there is abundant authority discoverable upon the slightest search the other way. This argument can be disposed of by simply saying that if it is true all that is necessary to effectuate a fraudulent scheme for obtaining possession of and title to property, real and personal, would be to have it transferred to a bona fide purchaser.

The defendants likewise interpose the defence of laches. I do not see how the delay in bringing this suit has prejudiced the defendants in any particular. The only witness who has died out of the defendants’ case is Hugh O’Reilly, the grandfather of the defendant Plugh E. O’Reilly, and it does not appear that he knew anything about this transaction. On the contrary, the delay has been very prejudicial to the complainant. The real party in interest, Mrs. Throckmorton, has died since the litigation began, and indeed was dead when this suit was started. I must therefore say that I cannot regard the defence of laches.

I will advise a decree in favor of the complainant upon the principles set out Vice-Chancellor Pitney in the Reilly Case above cited. The complainant will be entitled to costs and to a reasonable counsel fee, to be fixed by the chancellor.


text:
    United States Fidelity and Guaranty Company v. City of Newark et al.
    [Submitted July 21st, 1909.
    Decided July 29th, 1909.]
    1. Notice to the city of the assignment of a contractor’s claim against it for money due under the contract was not essential to the validity of the assignment as against a subcontractor’s lien subsequently filed under the Municipalities Lien Law act of March 30th, 1892 (P. L. 1892 p. 869), the statutory lien having only the effect of an attachment lien, and the lienor being in no better position than the debtor.
    2. The board of street and water commissioners of a city of the first class being a joint party with the city to a contract for the construction of a reservoir, and having supervision of its performance, and power to draw upon the city for payment therefor under act of March 2Sth, 1891 (P. L. 1891 p. 2J/9), notice to it of the assignment by the contractor of money due under the contract by its adoption of a resolution permitting the assignment and notice to the mayor who approved such resolution was notice to the city.
    3. The consent of the city to the assignment by a contractor of money due under the contract was not essential to the validity of the assignment as against the subsequent statutory liens of subcontractors, notwithstanding a provision in the contractor’s contract with the city prohibiting an assignment without the city’s consent; such provision being for the city’s protection and not for the benefit of subcontractors, &c.

      4. A provision in a subcontract that it was made with reference to the contractor’s contract with the city, which applied to the subcontract, except where otherwise provided therein, could not be invoked in an action by the subcontractor against the city to enforce a statutory lien; the city not being a party to the subcontract, and its rights not being affected thereby.

      5. When a subcontractor sued a city to establish a statutory lien without knowledge of the contractor’s assignment of the money due it under the contract, costs will only be allowed the intervening assignees from the filing- of the answer upon judgment for them.
    On final hearing. On bill, answer, replication and proofs.

      Messrs. McCarter &. English, for the complainant.

      Mr. Sherrerd Depue, for James C. Stewart et al.

      Mr. Michael Dunn and Mr. Charles B. Dunn, for the Empire Granite Company.

      Mr. Herbert Boggs, for the city of Newark.
   Howell, Y. 0.

The parties to this suit are before the court under the provisions of the Municipalities Lien law. P. L. 1892 p. 869. Stewart & Abbot made a contract with the city of Newark for the construction of the Cedar Grove reservoir. James Seme made a subcontract with Stewart & Abbot for the performance of a portion of the work. The complainant, a corporation engaged in the surety business, became surety to Stewart & Abbot for the performance by Seme of the provisions of his subcontract. The bond or instrument of suretyship contained this clause:

“Second; that in case of such default on the part of the principal, the surety shall have the right, if it so desires, to assume and complete or procure the completion of said contract; and in case of such default, the surety shall be subrogated and entitled to all the rights and properties of the Principal arising out of the said contract and otherwise, including all securities and indemnities theretofore received by the Obligee, and all deferred payments, retained percentages and credits, due to the Principal, at the time of such default, or to become due thereafter by the terms and dates of the contract.”-

Seme failed to perform Ms subcontract, and the same was completed by the surety company. After its completion, and on December 12th, 1904, it filed a lien under the Municipalities Lien law against the fund in the custody of the city of Néwark arising out of the Stewart & Abbot contract for $35,200.21, and on March 9th, 1905, brought suit thereon in this court for the foreclosure thereof.

The Empire State Granite Company, claiming to have furnished materials for the performance of the Stewart & Abbot contract, on March 3d, 1905, filed a similar lien for $2,136.48. Suit was brought thereon by it on May 31st, 1905. I do not find that these two suits were ever consolidated. They were, however, heard together on the question hereinafter discussed. It was admitted by the city of Newark that there were in its treasury sufficient funds to pay both these claims if no other right had intervened.

It now appears that prior to the filing of either of the said liens, and on November 18th, 1904, Stewart & Abbot, the original contractors, by writing, made an assignment to Alexander M. Stewart and James C. Stewart, strangers to the contract, of any and all moneys due and to become due to said Stewart & Abbot from the city of Newark thereunder for work done and materials furnished therefor and in execution of the same. The assignment contained the usual powers relating to the collection of the amount assigned. The controversy relates to the priorities between the said assignment and the said liens, the assignees claiming priority by reason of the prior execution and'delivery of the instrument of assignment. No question is raised as to the consideration for the assignment. It was treated by counsel as a transfer upon full and adequate consideration and without any suspicion of fraud. When the assignment was made permission was sought to the making of it from the city of Newark for the reason that the Stewart & Abbot contract contained the following provisions:

“Subletting.
“The contractor agrees that he will give his personal attention to the fulfillment of this contract; and that he will not assign or sublet the aforesaid work, or any part thereof, but will keep the same under his personal control, and that he will not assign by power of attorney or otherwise, any of the moneys payable under this agreement unless by and with the previous consent in writing of the Board of Street and Water commissioners signified by resolution of said Board.”
“Payments.
“* * * ^ yle en(j 0f one year the said ten per centum or such portion of it as may remain after making said repairs or remedying any ■defects, shall be paid to the contractor, after the party of the second part shall furnish the said Board of Street and Water commissioners with satisfactory evidence that all persons who have done work or furnished materials under this agreement, and who may have therefore given written notice to said Board of any balance unpaid for work or materials furnished or done on said work have been fully paid or satisfactorily se■eured. And in case such evidence is not furnished as aforesaid, such amounts as may be necessary to meet the claims of the persons aforesaid may be retained from the money due the party of the second part under this agreement until the liabilities aforesaid shall be fully discharged or ■such notice withdrawn.”

The city of Newark, by the board of street and water commissioners, the board having charge of the work under the Stewart & Abbot contract, did consent to the said assignment. This consent was contained in a resolution of that board which was adopted on November 17th, 1904, and approved by the mayor of the city on the following day. This resolution was as follows:

“Resolved, That the consent of the Board of Street and Water Commissioners for the city of Newark, be and the same is hereby given to the assignment by Stewart & Abbot, contractors for the construction of the Cedar Grove reservoir, of all the moneys due and to become due under their contract with the city of Newark for work done and materials furnished under the said contract, and in execution of the same, to Alexander M. Stewart and James C. Stewart, upon obtaining and filing with the ■Clerk of this Board the consent in writing of the American Surety Company, surety for the performance by the said Stewart & Abbot of their said contract and further upon their complying fully with such ■other conditions as the city counsel may require to fully protect the interests of the city in the premises.”

On the day on which this resolution was approved by the mayor, viz., November 18th, 1904, Stewart & Abbot joined with the assignees, Alexander M. Stewart and James 0. Stewart, in a bond to the city of Newark to indemnify the city against loss or ■damage for having given such consent; the surety company gave its consent on November 28th, 1904. These various documents were transmitted to the city auditor and he was notified by the ■city counsel by letter on December 14th, 1904, that all the conditions which had been imposed by him in pursuance of the resolution of the board of street and water commissioners had been complied with fully. The defendants Alexander M. Stewart and James C. Stewart, assignees, claim that the assignment of the Stewart & Abbot funds to them took effect on the day of the date and delivery of the instrument of assignment, and that if any notice of the assignment to the city of Newark was necessary, such notice was given prior to the filing of the complainant’s lien, and that notice must be implied from the above recited resolution of the board of street and water commissioners approved by the mayor not later than November 18th, 1904. The complainant claims that notice to the city was essential to the validity of the assignment, and that such notice cannot be said to have been given until December 14th, 1904, that being the date when the city counsel notified the city auditor that all his requirements had been met, this being based upon the complainant’s construction of the provisions of the Stewart & Abbot contract above recited, and such construction being that no valid assignment of the Stewart & Abbot fund could be made without the consent of the city.

From the foregoing facts I conclude: First, that the assignment took effect from the date of its execution and delivery; second, that no notice to the city was necessary to constitute the assignment a valid transfer of the fund; third, that the lien claimants are not in the position of tona fide purchasers without notice for value, and do not take priority over the assignment; fourth, that the consent of the city to the assignment was not necessary to give it force and validity. The authorities for these propositions are as follows: In Board of Education v. Deparquet, 50 N. J. Eq. (5 Dick.) 234, the facts were similar to those in this case. There the contest was between an assignee of a fund arising out of a building contract and divers creditors of the contractor. The assignment was made in February, 1887. The lienors claimed under an attachment issued out of the Monmouth circuit court in March of the same year. Vice-Chancellor Pitney discusses the question of the priorities at length and with great learning, and decides that the assignment which was prior in point of execution and delivery took precedence over the latter attachment; that notice thereof to the debtor was not necessary to its validity and that the attaching creditor did not occupy the position of a bona fide purchaser without notice, and that he had no better title than the debtor himself had. This ease was mentioned with approval by the court of errors and appeals in Miller v. Stockton, 64 N. J. Law (35 Vr.) 614; and again in Cogan v. Conover Manufacturing Co., 69 N. J. Eq. (3 Robb.) 809, and may, therefore, be taken as an expression of the law of this state. The same doctrine was previously announced by Vice-Chancellor Green in Bank of Harlem v. Bayonne, 48 N. J. Eq. (3 Dick.) 246. In fact, the rule was announced by this court in an opinion by Chancellor Yroom, in 1834, in King v. Berry, 3 N. J. Eq. (2 Gr. Ch.) 44 and by Chancellor Green, sitting as ordinary, in 1864, in the case of Kennedy v. Parke, 17 N. J. Eq. (2 C. E. Gr.) 415. The office of notice of assignment to the debtor or depository is discussed by Mr. Justice Lippincott in Miller v. Stockton, supra.

The conclusion reached is not singular. We find the same rule in Pennsylvania, Noble v. Thompson Oil Co., 79 Pa. St. 354; in New York, Williams v. Ingersoll, 89 N. Y. 508; and in Massachusetts, Thayer v. Daniels, 113 Mass. 129. There appears to be no distinction on principle or in the authorities between the lien created by the statutory action of attachment and the lien created by the statutory provisions of the Municipalities Lien law. Although created by different proceedings the character of the charge upon the property in the hands of the debtor is the same.

While I do not think that notice to the city was essential to the validity of the assignment, yet if such notice were necessary knowledge of all the facts must be implied from the resolution of the board of street and water commissioners of November lfth, 1904. That board was a party to the Stewart & Abbot contract jointly with the city of Newark, and by the law of its creation (P. L. 1891 p. 249), became the executive board having supervision of the performance of the contract. and the power of drawing upon the city treasury for money to pay what was earned thereunder. Surely a notibe to this board would be notice to the city, but the defendants may go further. The resolution was approved by the mayor, who is the chief executive officer of the city, and knowledge communicated to him in the performance of one of his official acts would undoubtedly be notice to the city.

•Nor do I think that the consent of the city was necessary to effectuate the transfer. The contract of the city was obtained by a very formal proceeding, viz., the passage of a resolution by the board of street and water commissioners and its approval by the mayor. This was supposed to be necessary in view of the provisions hereinabove quoted from the Stewart & Abbot contract. It has, however, been held in many cases in' this state that provisions of that character are inserted in contracts, not for the benefit of the contractor, subcontractors or materialmen, but for the protection of the city. Vice-Chancellor Van Eleet so held in Shannon v. Hoboken, 37 N. J. Eq. (10 Stew.) 123; affirmed, Id. 318, and also in Essex Freeholders v. Lindsley, 41 N. J. Eq. (14 Stew.) 189. In Bank v. Bayonne, supra, it was expressly held that a provision of that character did not invalidate an assignment of the money earned under the contract. In Burnett v. Jersey City, 31 N. J. Eq. (4 Stew.) 341, the restrictive words were the same as those in the contract under discussion.

In this case the city of Newark, by the use of the paragraph' referred to, assumed no obligation; it did not agree that it would protect the subcontractors or materialmen; there is no duty cast upon the municipality in favor of any person; it was not a contract for the benefit of anyone upon which an action at law could have been brought. The protection of the municipality was all that was contemplated.

The subcontract between Stewart & Abbot and Seme contains this provision:

“It is also expressly understood that this present contract is made with full knowledge of both the parties hereto with reference to said contract between Stewart & Abbot and the city of Newark, and that a copy of said contract ánd said specifications has been presented to said Seme, and that he has read the same and fully understands all the requirements thereof, and that each and every of the terms and provisions of said last mentioned contract so far as applicable to the work herein contemplated shall apply to and control this contract, except where provision is otherwise made in this agreement.”

It was urged on the part of the complainant that by these words all the terras of the Stewart & Abbot contract, so far as they were applicable to the Seme contract, were imported into the Seme contract and became part thereof, and that thereby Seme’s creditors obtained a footing which they otherwise might not have had. I am not able to perceive that the connection between these contracts in any way affects the status of either debtor or creditor. Whatever design may have actuated the parties in making the Stewart & Abbot contract a part of the Seme contract is not disclosed,' but certainly the city of Newark, the debtor, was not a party to the Seme contract, and its rights are not affected by any provision contained in it.

These views lead to a decree in favor of the assignees, Alexander M. Stewart and James C. Stewart, but inasmuch as the complainant filed its claim and prosecuted it in "ignorance of the assignment, costs will be allowed only after the filing of the answer.


author: Walkeb, V. C.

text:
    In the matter of Percival A. Hannah, found to be a lunatic.
    [Decided June 23d, 1909.]
    1. Since the statute of Edward III., conferring a right to traverse a lunacy inquisition, has never become a part of the law of New Jersey, such traverse will only be allowed in the exercise of judicial discretion.
    2. The son of the subject of a lunacy inquisition has an actual bona fide interest therein entitling him to intervene to protect the parent.
    3. A traverse of a lunacy inquisition is only available on an allegation that lunacy has been untruly found and cannot be availed of so as to obtain the release of a lunatic on the ground that he has recovered sanity.
    4. Under act of April 2d, 1898 (P. L. 1898 pp. 220, 221), as amended by act of June 12th, 1906 (P. L. 1906 pp. 679, 681), providing that insane persons shall be confined until restored to reason or removed or discharged according to law, the authorities in charge of an insane asylum should release a person committed from confinement on his restoration to reason.

      5. Where a person committed to an insane asylum is restored to reason, and the authorities refuse to discharge him, he may be enlarged on habeas corpus sued out of the chancery or common-law court under act of April 2d, 1898. P. L. 1898 p. 881.

    On application for leave to traverse inquisition.

      Mr. John W. Wescoit, for the motion.
   Walkeb, V. C.

On October 17th, 1908, a commission in the nature of a writ de lunatic inquirendo was issued out of this court to inquire into the lunacy of Percival A. Hannah, of the county of Salem. The inquisition was taken on November 2d and returned on November 7th, 1908, the subject, Percival A. Hannah, being found to be a lunatic and of unsound mind and that he did not enjoy lucid intervals, so that he was not capable of the government of himself, his lands, tenements, goods and chattels, and that he had been in the same state of lunacy for the space of one month then last past and upwards.

On December 15th. 1908, a decree was made confirming the proceedings and ordering the transmission of the record to the orphans court of the county o£ Salem.

And now, June, 1909, Norman H. Hannah, of Philadelphia, in the State of Pennsylvania, a son of Percival A. Hannah, the lunatic, petitions and shows that his father has since been áiid still is confined in the Cumberland County Insane Asylum, and avers that his lunacy was acute and that he has now so far recovered that his mental faculties are in healthy and normal condition, and his physical state such as to enable him to attend to his affairs, and he prays that his father may have leave to traverse the inquisition or that an issue may be awarded to try the fact of his lunacy.

By the common law no traverse of the inquisition was allowed, but right to traverse was first granted by statute in the time of Edward III. Shelf. Lun. 113. The statute of Edward never has become a part of. the law of this state. Lindsley’s Case, 46 N. J. Eq. (1 Dick.) 358, 364. With us a traverse will be allowed only u]Don the exercise of sound judicial discretion. Ibid.

By the English practice a lunatic might traverse the inquisition either in person or with the chancellor’s permission by attorney. Shelf. Lun. 118. And where the lunatic was confined in prison for debt, and a petition to traverse had been presented, the lord chancellor ordered a habeas corpus to bring the lunatic before the chancellor at the sitting of the court two days after-wards. Ibid. And the party may apply either in person to the chancellor to be inspected or his friends may sue out a writ returnable in chancery for that purpose. Ibid,. 119.

In the matter of Heli, a lunatic, 8 Atk. 635, Lord Chancellor Iiardwicke had before him the question whether a person could traverse an inquisition of lunacy without bringing the lunatic in propria persona before the court, and he observed that as to an inquisition de idiota, the subject may in person or by his friends come into chancery and show the matter and pray that he may be examined before the chancellor, and if, upon examination, he be found no idiot, then the inquisition shall be taken as void. He held that the same practice obtained with reference to lunacy.

In Covenhowen’s Case, 1 N. J. Eq. (Saxt.) 19, Chancellor Vroom said (at p. M) : “It is clear that a stranger has no right to interfere in a proceeding of this nature. He can neither sue out a commission, nor can he make himself a party to it by any application he may make to this court. I take it to be equally clear, that when a person has actual interests, either equitable or legal, which are affected by the inquisition, he may apply to, this court for relief.” The chancellor was dealing with the case of one who had acted as attorney in fact for the lunatic, and who alleged that by reason of the finding of the jury he was greatly endangered in the matters transacted by him as attorney. The chancellor considered that the attorney’s petition should be dismissed, but remarked (at p. !B8) : “Taking all cases together, it is fairly to be inferred, as I think that applications on the part of third persons, in matters of this nature, are not to be encouraged, yet that they will be listened to and granted when actuál bona fide interests and rights are endangered.” The petitioner for this traverse is certainly a stranger to the proceedings, but, as the son of the subject of the inquisition, he has an actual bona fide interest, filial and sentimental rather than substantial, though it may be, to have the question of his father’s lunacy tried' out.

It would be an anomaly, indeed, if children could not intervene to protect parents declared to be lunatics in these proceedings on inquisition.

But, assuming the verity of the allegations in the petition under consideration, still, the subject of the inquest is not entitled to traverse the inquisition. That remedy is available only on an allegation that lunacy has been untruly found. Shelf. Lun. 118, lip. Where a party is aggrieved by the finding of an inquisition of lunacy, the proper procedure is by a direct appeal to the court by means of a traverse. 10 Encycl. Pl. & Pr. 1202. As the petition does not deny that lunacy was properly found, but, on the contrary, admits the insanity of the subject at the time of office found by the assertion that the lunacy was acute and that the subject has now recovered, no case for a traverse is presented.

On this application it is not shown whether a guardian was appointed for the lunatic by the orphans court to which the proceedings were transmitted according to the statute, and the application is not one in form to supersede the inquisition under our practice, in which eases it is the usual course to refer the matter to a master to take proofs as to the state of mind of the petitioner, and to report the proofs with his opinion thereon. In re Rogers, 5 N. J. Eq. (1 Hal. Ch.) 46; In re Price, 8 N. J. Eq. (P Hal. Ch.) 533; In re Weis, 16 N. J. Eq. (1 C. E. Gr.) 318; In re Ellis, 62 Atl. Rep. 702.

If, as alleged in the petition, the subject has now recovered from his lunacy, he is entitled to be liberated under the statute. Our act concerning the commitment of insane persons to hospitals provides that such persons shall be confined therein until restored to reason or removed or discharged according to law. P. L. 1898 p. 220 (bottom1 of p. 221); amended, P. L. 1906 pp. 679, 681.

If Mr. Hannah has been restored to reason and the authorities of the institution in which he is confined refuse to discharge him, he may be enlarged on habeas corpus, and the proceedings may be bad before the judge of a common law court, or this court. P. L. 1898 p. 231; In re Lee, 55 Atl. Rep. 107.

Unless the petitioner chooses to pursue the remedy by habeas corpus, an application to supersede the inquisition upon the ground of the restoration to sanity of the subject of the inquest will be entertained. The application for a traverse must be denied.


author: Walkee, Y. C.

text:
    Albert Servis v. John H. Dorn et ux., et al.
    [Decided July 12th, 1909.]
    1. Surplus money arising upon a sale of land under a decree of foreclosure stands in the place of the land itself in respect to liens upon or vested rights therein.
    2. When husband and wife hold lands by an estate in entirety, the wife, during the joint lives of herself and husband, is entitled to her share of the usufruct of the land, and the right of survivorship in the fee still exists as at common law'.
    3. Judgments recovered against a husband, who, together with his wife, ow'ns land by an estate in entirety, are liens against the husband’s interest and are enforceable against the land if he survives his wife, but are subject to be defeated as to that land in the event of her surviving him.
    4. Surplus money, arising upon a sale of land owned by husband and wife by an estate in entirety, will not be paid to the husband and wife upon their petition when there are judgments against either one of them, but will be held under the control of the court to wait the severance of the estate by the death of one of the parties, when the fund will or will not become available in satisfaction of the judgments, accordingly as the judgment debtor survives or dies before the other tenant by entirety.
    On petition for surplus money.

      Mr. Warren B. Schenck, for the petitioners.

      Mr. John A. Goan, for the South River Brick Company.

      Mr. George 8. Silzer, for August Splatter.
   Walkee, Y. C.

The defendants John H. Dorn and Rosie Dorn, his wife, were the owners of an estate hy the entirety in the fee to the mortgaged premises sold in this cause. By the report of the master in the foreclosure proceedings it was certified that the defendant the South River Brick Company had obtained a judgment against the defendant John H. Dorn for principal, interest and costs, amounting to $90.12, and that the defendant August Splatter had obtained a judgment against the defendant John H. Dorn for principal, interest and costs, amounting to $24.78, in the order of priority just mentioned, but that the said two judgments are not at the present time liens upon said mortgaged premises, inasmuch as the said John H. Dorn and Rosie Dorn, his wife, the owners thereof, are seized of said lands and premises by an estate in entirety.

By the final decree it was adjudged that the master’s report and all the matters and things therein contained do stand ratified and confirmed, and that there was due to the complainant on his mortgages the sum of $1,041.09, and to the South River Brick Company on its judgment against John H. Dorn the sum above mentioned, and to the defendant August Splatter, on his judgment, the sum above mentioned; and it was further adjudged that the mortgages of the complainant are first in priority of lien over the respective judgments of the defendant South River Brick Company and August Splatter, and are entitled to be first paid, and that so much of the mortgaged premises as necessary should be sold to pay and satisfy, in the first place, the amount due the complainant with interest and costs, and that a writ of fieri facias issue for the sale of the mortgaged premises, and that out of the money arising from such sale the sheriff, in the first place, pay to the complainant his debt, interest and costs, •and in case more money should be raised by the sale than shall be sufficient to answer such payment, that such surplus be brought into court to abide the further order of the court. The sum of $134.44 has been deposited with the clerk as the surplus money arising upon the sale under the fi. fa.

Surplus money arising upon a sale of land under a decree of foreclosure stands in the place of the land itself in respect to liens upon or vested rights therein. Matthews v. Duryee, 45 Barb. 69; Oberle v. Lerch, 18 N. J. Eq. (3 C. E. Gr.) 346; Learning’s Case, 3 De G. F. J. 43.

The defendants Dorn and wife, the owners of the fee by entirety, have petitioned for the surplus money, and their counsel contends that they are entitled to it because- the matter is res judicata, that is, that it has been adjudicated that the judgments were not liens upon the land, and that, consequently, they are not liens upon the surplus money.

It is true that the master reported that the judgments were not at the time of making the report liens upon the mortgaged premises, but the finding may be said to be somewhat ambiguous, and is not inconsistent with the view that the judgments, while not then enforceable by sale of the premises, were, nevertheless, inchoate liens against the estate of the defendant John II. Dorn which would come to him if he survived his wife.

There can be no doubt whatever but that the judgments were liens upon the interest which the husband (the judgment debtor) had in the land. In Washburn v. Burns, 34 N. J. Law (5 Vr.) 18, a lien claim was filed against premises owned by a husband and wife in entirety, and the question was whether in such a case the husband could burden such an estate with a mechanics’ lien.

Said Chief-Justice Beasley, speaking for the supreme court (at p. 20) :

“The argument was, that as the wife was seized of an indivisible entirety, there was nothing left upon which the grant of the husband could act. This argument is sound only to a limited extent. Its error consists in leaving out of the account an element of the ease. It is true that the husband cannot alien any part of the estate which he holds in the same right with his wife. To do that would be to sever its unity and thus destroy its peculiar characteristics. The reason he cannot do this is because it would convert the estate into a tenancy in common, and defeat the right of survivorship. But the husband has an interest which does not flow from the unity of the estate, and in which the wife has no concern. He is entitled to the use and possession of the property during the joint lives of himself and wife. During this period the wife has no interest in or control over the property. It is no invasion of her rights, therefore, for him to dispose of it at his pleasure. The limit of this right of the husband is, that he cannot do any act to the prejudice of the ulterior rights of the wife.”

That ease (Washburn v. Burns) was decided in 1869 and affected a conveyance made to the husband and wife in 1858. As a matter of fact the estate of the parties was controlled by the Married Woman’s act of 1852 (which appears to have been overlooked), and the wife of McCabe, one of the defendants, was entitled to the enjoyment of her estate or interest in the lands during the joint lives of herself and her husband. Buttlar v. Rosenblath, 42 N. J. Eq. (15 Stew.) 651, 656; Vunk v. Raritan River Railroad Co., 56 N. J. Law (27 Vr.) 395, 398; Collins v. Babbitt, 67 N. J. Eq. (1 Robb.) 165, 175. These cases decide that the wife during the joint lives of herself and husband is entitled to her share of the usufruct of the land, and that the right of survivorship in the fee still exists as at common law. But, under Washbum v. Burns, supra, and the earlier case ,of Den v. Gardner, 20 N. J. Law (Spenc.) 556, the husband’s interest may be encumbered, either voluntarily* by mortgage as in Den v. Gardner, or involuntarily by judgment as in the mechanics’ lien claim case of Washburn v. Burns.

My interpretation of the master’s report in the foreclosure proceedings is, that by certifying that the two judgments were not. then liens upon the mortgaged premises, he meant no more than that they were not' liens on the entirety of the fee in such way that they could be paid and discharged out of the proceeds of the sale of the premises, and this is borne out by the fact that he reported the amounts of the judgments and their order of priority. This leads to the view that the master, to whom was referred the petition of Dorn and wife for the surplus, erred in his conclusion that the judgments of the South River Brick Company and August Splatter are not liens at all against the surplus money or any part thereof, which conclusion he predicates upon the former master’s report, and appears to consider the matter res judicata as against the judgment creditors by reason of the final decree which confirmed the report. True, whatever was reported is a thing adjudicated by the decree, but, as pointed out, the report does not bear the interpretation put upon it.

The result reached by me is, that these judgments are liens upon the interest of the defendant John H. Dorn in the fund in court, which fund must be considered to be held by himself and wife in an estate by entirety, the same as was the land before its sale under foreclosure.

The fund will not be paid to Mr. and Mrs. Dorn upon their petition therefor, but it will be held under the control of the court to wait severance of the estate by the death of one of the parties, when it will or will not become available in satisfaction of the judgments, accordingly as the judgment debtor survives or dies before the other tenant by entirety.

'The petition for surplus will be dismissed.