text:
    The New York and Long Branch Railroad Company and The Pennsylvania Railroad Company, appellants, v. The Atlantic Highlands, Red Bank and Long Branch Electric Railway Company et al., respondents.
    Under the act of March 22d, 1895 {Gen. Stat. p. 2717), the chancellor cannot impose upon the company whose steam railroad is to be crossed at grade by an electric railroad, the duty and responsibility of operating a derailing switch in the line of the electric railroad.

      On appeal from a decree of the chancellor in the matter of the Atlantic Highlands, Bed Bank and Long Branch Electric Bailway Company, who delivered the following opinion :
    The statute (P. L. of 1895 p. 1/.6S) contemplates that where the route of a steam or electric railway shall cross an established steam railway outside of a city, the intended crossing shall be constructed so as to inflict as little injury as possible to the rights of the existing railway, and so as to afford proper protection to the public; also that before the crossing shall be constructed the new railway company shall apply to the chancellor to define the mode of crossing, whereupon the chancellor shall cause notice of the application to be given to the municipality in which the crossing is to be located and to the company whose railway is to be crossed, and then proceed, by his decree, to define the mode in which the crossing is to be made. He is expressly enjoined to avoid a grade crossing, if, in his judgment, it be reasonably practicable to do so and the public safety so requires.
    Under this statute, application has been made to me in behalf of the Atlantic Highlands, Bed Bank and Long Branch Electric Bailway Company, to define the mode of its crossing the railway of the New York and Long Branch Bailroad Company, where, on grade, the latter railway intersects the junction of Bridge avenue and Monmouth street, in the town of Bed Bank.
    It is proved that more than ninety trains daily pass over the New York and Long Branch railroad at that point, several of them at high rates of speed and without stopping, and also that immediately southeast of this crossing the railroad depot of Bed Bank, used by the New York and Long Branch and New Jersey Southern railroads, to which, every day through the summer months, a large number of carriages and wagons are driven, is situated. The depot is the third in importance on the New York and Long Branch railroad. The centre is undoubtedly a busy one, and the proposed crossing at grade, if insufficiently safeguarded and managed, will unquestionably, when subjected to additional use by an electric railway, be one of considerable danger.

      Regarding these conditions, I am satisfied that public safety will be best subserved by a crossing constructed either over or under the New York and Long Branch railroad, because either of those methods of crossing will afford practically absolute security, principally for the reason that their safe use will depend only in the slight measure which timely repairs may require upon human agency.
    The question which has occasioned me some perplexity, and the answer to which controls my conclusion, is whether an overhead or undergrade crossing is “ reasonably practicable,” in view of the expense it will occasion and the injurious' encumbrance the first named of them, if adopted, will be to the town.
    The plans of engineers show that the overhead crossing will be an unsightly affair and, unless built at a very considerable expense, will dangerously obstruct the street on which it will be erected, and, whether expensively or otherwise constructed, will almost impassably encumber that street at the termini of the required structure.
    An undergrade crossing will require change in grades of two streets and involve not only an expenditure of between sixty and seventy thousand dollars in the work, but also the payment of damages to the owners of the property which borders upon these streets. Besides a depression of the streets at this point will materially interfere with facility of approach from the street to- the steam railroad depot and will- thereby work considerable inconvenience to the public.
    The representatives of the steam railroad call my attention to the fact that a short distance from the Monmouth street crossing the steam railroad now crosses Front street, a highway which is parallel to Monmouth street and a short distance north of it, by an overhead bridge, and that by changes of grade and the acquirement of a little property for additional right of way at inconsiderable expense, a perfectly safe undergrade crossing for the electric railway can be had there. The steam railroad offers to make substantial contribution towards the expense of grading if crossing be had at this point and to build a new bridge- for its road which will amply accommodate the proposed electric railway crossing. I have studied the plan proposed for this crossing and am satisfied that it is not only entirely feasible, but also is most desirable for public safety. The objection to my adopting it is that it is not within the.chosen route of the electric railway, the route which the municipal authorities of Red Bank have deliberately sanctioned by ordinance after having their attention called to Front street as the safest crossing. Now I am confronted not only with the establishment of this route by the concurrent action of the town and the electric railway company, but also by the opinion and judgment of the authorities of the town, evinced by their ordinance, that the electric railway crossing over the steam railroad should be made at grade. Of course, such expression of opinion does not bind me, but its influence as the mature judgment of the municipal authorities, who must be assumed to be familiar with the location and to have acted in sincerity for the welfare and safety of the public, cannot be without weight in my consideration; yet I am so strongly convinced that the crossing should have been located at Front street that I am satisfied that I would fix it there if I had the power to do so. But I have not that power. It is true, I perhaps might indirectly accomplish the change by deciding upon the most expensive method of crossing, as was suggested by one of the counsel of the steam road, but it is remembered that the determination which is required of me is, first, whether an under-grade or an overhead crossing within the route selected is “reasonably practicable” and required for public safety, and second, what method and safeguards in crossing shall be observed. The statute does not contemplate that I shall prescribe any change in the route of an electric road. The answer to the proposition of counsel is that it would be a sacrifice of the integrity of my judgment upon the questions submitted to use it in any manner to secure by indirection a preferable crossing outside of the established route of the electric railway. If I were called upon to assent to the route, as were the municipal authorities, I could enforce the Front street crossing.
    The question of expense as an element in the definition of the reasonable practicability of the undergrade or overhead crossing is dependent, in some measure, upon public safety, for if no other crossing will subserve that safety, expense becomes an insignificant element in the definition. And so, on the other baud, if public safety may be secured in a crossing at grade, the reasonable practicability of the other crossings is in a considerable measure determined by a comparison of their expense with the expense of a safe grade crossing.
    It is in testimony that there is an invention by which an operator in a tower, by mechanical signals, can warn the electric car of the approach of a steam train and, at the same time, raise upon the electric railway track an impediment called a “scotch-block,” which will stop the electric car, or turn a switch which will derail it, if its motorman disobeys the signals, and, at the same time, also will deprive the motor of the electric current which furnishes its motive power. The mechanism is so arranged that when the way for the electric car is open, danger signals, at proper distances, are exhibited on the steam railway.-
    In the hands of a careful operator this contrivance appears to afford abundant security. The main objection to it is the watchful care it requires of human agency.
    It is insisted that risk of accident may be reduced still further by the additional requirement that no electric car shall cross the steam road before it shall have first stopped some seconds, and until its conductor shall have gone upon the steam tracks and have ascertained that the car may safely proceed. It may be doubted whether this additional precaution is not objectionable in that it may lead to carelessness between the conductor and signalman in the tower, by encouraging the one to be dependent upon the other, or by opening the door to accident by taking the conductor from the care of the trolley which runs upon the power wire, which, by jolting on the rails of the steam road, may be thrown from the power wire, as was lately the case in this state, and leave the electric car upon the steam railway tracks without motive power. The electric railway company offers this double precaution, and I, however, incline to adopt it, provided the towerman be the employe of the steam road, subject to its control and discipline. I think that it presents a fairly safe scheme for crossing at grade, and, in view of it, I am constrained to adjudge that if it be adopted the overhead and undergrade crossings which are available at the point in question, costing $100,000 or thereabouts, should be deemed, reasonably speaking, as impracticable.
    I will order that if, before it constructs a crossing, the electric railway company shall give bond to the steam railway company, with sufficient surety or sureties, in the penal sum of $5,000, conditioned to pay at stated periods the reasonable salaries of competent towermen employed by the steam road, and such other expenses as shall be necessary to the efficient maintenance and management of the signals and cut-offs mentioned, during the continuance of said crossing, and shall completely erect the “Gibbs” signal system, including the power cut-off and the scotchblock or derailing switch, and place it in control of the steam railway, it shall be permitted, when it shall have complied with all other legal and lawfully-required conditions precedent to give it the right to cross, to cross at grade by proper crossings put in place at such time of the day or night, and in such manner as the steam road may designate as least injurious to it, and thereafter to use said crossing in the exercise of the double precautions referred to. The steam railroad now maintains gates at this crossing. Those gates will, of course, remain, and will be a third safeguard. The electric company must bear whatever expense shall be necessary to adapt those gates for continued use after their wires shall be erected.
    On March 22d, 1895, the following statute was enacted :
    “CHABTEE CCXLI.
    “An act to regulate the crossing at points not within the limits of cities of this state, of steam railroads by steam or electric railroads hereafter to be constructed.

      “ 1. Be it enacted by the Senate and General Assembly of the State of New Jersey, That whenever the route of any steam or electric railroad hereafter to be constructed shall cross at points outside of the limits of cities the line of any steam railroad in this state, such crossing shall be made in such away as will inflict the least injury upon the rights of the company owning or operating the railroad to be crossed, and as will afford proper protection to the public; and no company shall hereafter construct any steam or electric railroad across the line of any steam railroad, except within the limits of a city, until it shall have first made application to the chancellor of this state to define the mode in which such crossing shall be made; and it shall thereupon be the duty of the chancellor, after causing reasonable notice of such application to be given to the municipal authorities, and also to the corporation owning or operating the railroad intended to be crossed, to define by his decree the mode in which such crossing shall be made; and if, in his judgment, it is reasonably practicable and public safety so requires to avoid a grade crossing, he may, in his discretion, by his decree define and regulate the mode and manner of such crossing, and thereupon such crossing shall be made in the mode defined by such decree, and in no other way.”
    In July, 1896, the Atlantic Highlands, Red Bank and Long Branch Electric Railway Company, claiming that the route of its electric railroad crossed the line of the steam railroad of the New York and Long Branch Railroad Company within the lines of Monmouth street, in the town’of Red Bank, presented to the chancellor a petition, praying that, in accordance with the statute above recited, he would “define the mode in which such crossing should be made.” On filing the petition notice was given to the appellants, and, after the taking of testimony, the chancellor decreed that a grade crossing must be made in the mode pointed out in the decree, and therein further ordered as follows:
    “ Sixth. And for the better assurance of safety in the grade crossing aforesaid, the electric company shall, at its own expense, provide and completely erect at the crossing in question a tower suitable for the construction and operation of the system known as the ‘ Gibbs ’ signal system, and equip such tower with the said ‘Gibbs’ signal system, which system shall include .the power cut-off and the derailing switch for the purpose of depriving the electric cars of motive power and bringing them to a standstill while cars are passing on or about to pass upon said steam railroad. The mechanism of such system shall be so arranged that when the way for the electric car is open, danger signals at one thousand feet in each direction from said crossing shall be exhibited on said steam railroad, which signals shall be so maintained until the electric car shall have passed over such crossing, such system to be constructed according to the plans hereto annexed and made a part hereof. After the construction and completion of said tower and signal system, and as a condition precedent to the right of said electric company to cross the tracks of said steam railroad, the electric company shall place said tower and signal system in the control of said steam railroad, and shall also, before it constructs1 such crossing and annually thereafter, give bond to the said steam railroad, with sufficient surety or sureties, in the penal sum of five thousand dollars,, conditioned to pay at stated periods the reasonable salaries of such competent, men as the steam railroad may employ in the operation of said system, and such other expenses as shall be necessary to the efficient maintenance and: management of the signals and cut-off hereinbefore mentioned, during the continuance of said crossing.”
    The appellants insist (inter alia) that so much of the decree as-places upon the steam railroad company the duty and consequent responsibility of operating the “ Gibbs signal system,” is beyond the authority conferred by this statute upon the chancellor.

      Mr. Alan H. Strong, for the appellants.

      Mr. James E. Eegnán and Mr. Charles L. Corbin, for the respondents.
   The opinion of the court was delivered by

Dixon, J.

It is unnecessary now to consider whether the legislature, in the exercise of its police power, could impose upon the steam railroad company the duty of taking any precautions for the safety of the electric cars and their occupants while crossing the-steam railroad within the limits of the public highway, beyond1 such precautions as were required for the safety of travelers-using the highway in customary modes, without making compensation to the steam railroad company for the additional expense. It is also unnecessary now to consider whether, if such compensation be constitutionally required, the electric railroad company possesses legislative authority to have its amount determined and paid, against the will of the steam railroad company.

At present it is enough to say that we can discover in this; statute, which, with regard to a grade crossing, empowers the-chancellor only “ to define the mode in which such crossing shall be made,” no warrant for imposing upon the steam railroad company the duty of operating the electric railroad in any particular.

If this decree should be enforced, the steam railroad company would become responsible to the electric railroad company, its employes and passengers and to all other travelers, for injury happening to them through the negligence of the persons in charge of the derailing switch, for those persons are to be employes of the steam railroad company, and yet that switch is a part of the electric railroad and not of the steam railroad. The right to impose such a responsibility upon the company whose railroad is to be crossed cannot fairly be brought within the terms or intendment of this statute.

In this respect the decree is illegal, and as the scheme devised by the chancellor is an entirety, the decree must be wholly reversed.

For reversal — The Chief-Justice, Dixon, Garrison, Gummere, Van Syokel, Hendrickson, Nixon — 7.

For affirmance — Depue, Lippincott, Ludlow, Bogert — 4.


source: Caselaw Access Project

author: Lippincott, J.

license: Public Domain

text:
    John Steller, Jr., and Ida Steller, his wife, appellants, v. S. Elizabeth Sell, respondent.
    An agreement made between a creditor and Ms debtor, that if the debtor would procure Ms life to be insured, in order to secure the payment of the indebtedness, in an insurance association, naming the sister of the debtor, who •was the wife of the creditor, and who had knowledge at the time of the purpose of the insurance, as beneficiary, in order to comply with the laws of the insurance association, which required that insurance could only be had for the benefit of a blood relative of the insured, and that the creditor would pay the assessments on such insurance, and that, after the death of the debtor, the •creditor, upon receiving the proceeds of insurance, would pay over to the wife •of the debtor whatever balance remained after deducting the indebtedness and interest, and the assessments paid and interest thereon, is an agreement founded upon a good consideration and created a trust in favor of the wife of the debtor, enforceable in equity against the creditor, and the beneficiary named in the certificates of insurance, who received the proceeds of such insurance.

      Mr. Cortlandt Parlcer and Mr. George F. Tuttle, for the appellants.

      Mr. Thomas Anderson and Mr. Amzi D. Taylor, for the respondent.

      Brief of Appellants. — After stating the facts, says: Upon these undisputed facts, is not the decree evidently wrong ?
    What was the transaction ? What did Sell do ? Nothing but •consent to have his life insured for the benefit of his sister, his •creditor’s wife. He paid nothing then or ever. Steller, through the insurances, acquired the chance of getting his debt paid if he outlived Sell, and his wife (Steller’s wife) was willing to give that chance to him. His payment of premiums was making a present of so much money to his wife, a mode of preserving to her his property, which was hers. Did he mean to advance these premiums or assessments as long as Sell lived, in order to benefit Mrs. Sell ? Why ? Where stands the equity of the case upon the papers ? Steller’s wife, through the wish of her brother to pay the debt he owed her husband, and through natural love and affection on her brother’s part to her, and through the generosity of her husband, gets the money for which he paid.
    Another motive besides these so far mentioned may probably have influenced Sell. He was one of three children. His father had advanced to him $8,000, for which judgment had been entered in the same year, 1884, when this life insurance matter •occurred. Justice to his sister, whose patrimony was reduced by his indebtedness and failure, might have strengthened the love and affection which prompted making her the beneficiary in this insurance which her husband was to protect.
    Whatever the motive, the transaction made the policy Ida’s •property, and no change in it could be made by which the contract between her and the company could be annulled or its-benefit conferred upon another person without her consent. Even if Sell and Steller meant to do this, they could not, in law or in equity. They jointly arranged for and completed a gift to-Mrs. Steller of a valuable property, an interest through insurance-in the life, or rather death, of George W. Sell. If they proposed that when Sell died, if he died, the insurance money should be-used by Mrs. Steller, first, to pay the debt and the premiums, aud then to go to the wife of Mr. Sell, it was of no consequence unless Mrs. Steller agreed and did it. They could make no such-agreement for her. They do not pretend that she made any such. She denies it fully and emphatically.
    The theory of the vice-chancellor is that these two men could,, by their agreement, impress a trust upon a contract made by an ' insurance corporation, in express language, with a beneficiary,, and negative and alter it. If that were so, the insurance company could be made to respect that new trust. If the trust was-created at all, it was when the policy was issued. Will anyone seriously contend that this could be done ? Could Mrs. Steller be made to become trustee for Mrs. Sell without her so agreeing?' If she was a mere figurehead, could she be such without herself so agreeing?
    The vice-chancellor agrees to the insistment that the trust must have been impressed at the time when the insurances were-effected. His view is “ that the wife was a mere figurehead in the transaction, knowing its terms and purpose, but having no equitable interest whatever in the proceeds of the policies.” And yet the wife declares the contrary of all this; the husband corroborates her. The evidence of the other witnesses is of a statement alleged to have been made by the husband, out of the-presence of his wife, and therefore in nowise binding upon her, and which, if made, might have proceeded from an uninstructed belief that the control of these policies was his, and that their proceeds did not belong to the person to whom they were paid.
    An important circumstance as to the subjecting the policies, when made, to this trust in favor of Mrs. Sell, is that she was-not present at the time and knew nothing of it at any time ex•cept afterwards. Her husband, she says, told her that there were policies on her husband’s life amounting to $8,500, but that was all her knowledge.
    Steller swears that he and Sell were the only ones together at the time of taking out this insurance. .
    And the two letters are conclusive evidence that Sell had no idea of any such trust. The man had taken out other insurances for his wife — $5,100 worth.
    . And she unites with her husband in promising, by the second letter, payment of the $20 borrowed, after his death, out of' this insurance, showing that at that time she never knew of her beneficiary right in the insurances now claimed; but referring to policies of which she did know the premiums of which her husband paid, and wanted this money to pay, she signs the agreement with him.
    Is it possible that George Sell at that time knew that his wife was interested in policies so large, and so soon to fall in — for he was very sick at the time — and did not tell her of her right, nor say to Steller, you know that the policies you hold are soon to fall in, and so the $20 I ask for is sure soon to come to my wife?
    Read the letters; they are very convincing.
    The principle for which I have contended, that in the case of ¡a policy payable to a beneficiary, he or she cannot be divested of the right conferred by any act of the insured without her or his consent, is supported by many cases collected in 13 Am. & Eng. Encycl. L. 655 note 1 tit. “Life Insurance.” Some of these eases relate to beneficiaries who were children of the insured. Ricker v. Charter Oak Life Insurance Co. is a strong •case. The beneficiaries were the insured’s wife and children; the wife died leaving children; the husband married again, and had one child by the second wife. Having paid all the premiums required, the husband surrendered the policy and took a paid-up policy in the name of the second wife. — Held, that this was invalid as against his children, and that the child of the second marriage was entitled to share with those of the first.

      In Brockhaus v. Keane, 10 Biss. 33O, insurance was effected for three daughters of the insured, who were minors; with their consent, the insured exchanged the three policies for paid-up-policies. It was also consented before the original policies were surrendered that the proceeds of all the policies should be held by a trustee for all in equal shares. The original policies were-for different amounts. — Held, that being minors the daughters were not bound, and that one of them, on reaching majority, could demand the proceeds of the paid-up policy taken-in her name, although the amount exceeded one-third of the sum of all the policies. “ Much less can one who has effected insurance on the life of another for the benefit of another, control the same, although he may have retained the policy and paid the premiums” (13 Am. & Eng. Encycl. L. 656 tit. “Stranger to Contract”), referring to five adjudged cases.
    A change can only be made as provided for in the contract. See, among other cases (13 Am. & Eng. Encycl. L. 655), American Legion of Honor v. Smith, 17 Atl. Rep. 770.

    The vice-chancellor says truly that “ the object of the complainant is to impress a trust upon this fund in favor of herself, a trust springing out of the agreement entered into between Mrs. Steller and her husband at the time when the insurances [there were three] were effected.”
    Such a trust could not be unless the two parties agreeing then-held, together or singly, the policies in trust for Ida Steller, or, if you please, for Ida and her husband. If so, does not our statute of frauds apply ? Rev. p. 445 § 4 reads thus:
    “All grants and assignments of any trust or confidence shall be in -writing, signed by the party granting or assigning the same or by his or her last will, or else shall be utterly void and of no effect.”
    As already suggested, the case for the complainant stands entirely upon parol evidence of the alleged declarations of John Steller, all which were stated to be made out of the presence of Mrs. Steller, were not with her consent nor as her agent, and are, therefore, of no avail.

      Hote then, further, that the complainant states in her bill one single conversation only with John Steller, and one single declaration by him that he had received said insurance money, and that he woul<J come to see her “ within a few days about settling the matter,” but that he did not fulfill his promise, and yet, when sworn as a witness, she says he did come after receiving the certificates from Chicago, and that then and there, in answer to her searching question, ending with “ what is left is to come to me,” she says he gave full assent.
    At that time, too, her daughter was conveniently near. It looks extremely like arrangement; why had she not asked Steller previously, if she had any idea of such a windfall for herself? Then comes a third witness, apparently disinterested, with a story singularly like that of the others, beginning with the question “Do I understand this matter?” &c.; that is the way the others did. He tells the story through, and needs the question at the end, “ What, if anything, was said about the residue ? ” a leading question, the answer so far given being to one which called for the whole conversation, word for word. To this he gives the answer which has so impressed the vice-chancellor.
    This gentleman is a very great friend of the widow, meeting her often for some few weeks after the funeral, and the conversation then was on the possibility of Mr. Steller carrying out the agreement.
    And, it seems to me, there is a strong contrast between the witness’ first account of his conversation with Mrs. Steller and that subsequently given.
    In opposition to all this, read the evidence of Mr. Steller, and after that, of Mrs. Steller, denying the material allegations of these witnesses and stating positively, first, that the material words as to the surplus put into Mr. Steller’s mouth were never said by him, and second, that Mrs. Steller knew of the insurances when projected, and of their having been made with herself as beneficiary, immediately after their issue; that she had the policies, and never consented to the payment of anything to Mrs. Sell; that at one time she proposed to give the latter something, but changed her mind when it was found that she was not penniless but had insurances herself to a considerable amount.
    The evidence of these alleged declarations seems of so little consequence that I forbear to expend more time upon it, and my associate, who took the testimony, can best handle it.
    On appeal from a decree advised by Vice-Chancellor Reed, who delivered the following opinion :
    The bill in this case is filed for the purpose of compelling the defendant to pay to the complainant the residue, a part of the money received upon three policies of insurance written upon the life of complainant’s husband.
    The facts seem to be these: Mr. Sell, the husband of complainant, in 1884, was indebted to the defendant in a sum of cither $800 or $1,300. Sell had failed in business. Steller desired to secure himself for the amount of Sell’s indebtedness to him. Steller suggested to Sell that he, Sell, should assent to an insurance upon his life for the purpose of such security. Sell consented to this and three policies were written, one for $1,000, another for $2,500, and still another for $5,000. The assessments upon these policies were paid by Steller until 1894, in April of which year Sell, the insured, died. The policies were written in the name of Mrs. Steller, who was a sister of Mr. Sell. This was obviously done because the by-laws of the insurance association appear to have required that the policies should be taken out for the benefit of a blood relative qf the insured. The money due upon these policies was paid by the company, after proof of death, by a check to Mrs. Steller, which check was endorsed by her and given to her husband and put by him in the bank and the proceeds of which have since been controlled entirely by him.
    ■ The question in the case is, who is entitled to the proceeds of these policies? the complainant insisting that she, after the payment of the debt due to Steller by her husband and the amount of assessments paid by Steller and interest, is so entitled; the defendants insisting that it does not belong to the complainant, but does belong to the wife of Steller.

      . The agreement entered into between Mr. Sell and Mr. Steller, at the time the policies were taken out, is testified to by Mr. Steller. His account is that he applied to Mr. Sell, in 1884, requesting that insurance should be taken out for his own benefit, and that Stell assented. There was a difference between them, at first, in respect to the amount of insurance. Mr. Steller says that he only desired to take out an amount sufficient to secure him, and he mentioned, as the extent of the insurance he had in mind, that he was willing to take the $1,000 and the $2,500 policies. He says that Mr. Sell insisted that he should take out insurance to an amount up to the limit which the company would write upon one life. Steller demurred to this, on account of the amount of the assessments. He says that Sell then said that he would in the future be able to pay off the debt and “ take the insurance off your hands.” Steller says that he insisted that Sell should fix a time within which he would do this, and that Sell agreed to do so within two years.
    After the policies were written, Steller paid the assessments for a period of ten years, until the death of Mr. Sell, when the •amounts of the policies were paid as already stated.
    It is perceived that the question involved is not in respect to the right to recover from the insurance company, for inasmuch as the money was paid by the insurance company, it is to be assumed that, under the terms of the contract with the insurance company, the legal right to recover was in Mrs. Steller. The object of the complainant is to impress a trust upon this fund in favor of herself, a trust springing out of the agreement entered into between Mr. Steller and her husband at the time when the insurances were effected. To reach the fund it must, in the first place, appear that this insurance was for the security of the husband, and that it was taken out as such with the knowledge of the wife, who, upon the face of the policy, was legally entitled to the proceeds of the policy. This, I think, clearly appears. The evidence is convincing that the wife was a mere figurehead in the transaction, knowing its terms and purpose, but having no equitable interest whatever in the proceeds of the policies. The question therefore is, what are the rights of Steller, the husband, as between him and the complainant?

      Accepting Steller’s statement of the contract, it is obvious that had Sell died before the expiration of the two years within which he was to pay his debt and reimburse Steller for his assessments, his estate or his wife would have been entitled to the surplus.
    Now Steller does not say that it was agreed that if Sell failed to pay in two years he should forfeit all right to the policies, and that thereafter he or his wife was to be the only beneficiary.
    Now, at the end of two years, Sell had not paid his debt and the assessments, and Steller had his choice to continue payment of the assessments upon all or a part or none of the policies. If he ceased to pay the installments or assessments, he lost the benefit of his past payments and the security of the policy; if he continued to pay, he retained the security of the policies, but kept alive Sell’s residuary interest. He was entitled to be reimbursed for what he lost by reason of Sell’s breach of his contract, but inasmuch as he paid, and so lost nothing but what he paid, and interest, that is the measure of his compensation. All the payments during the two years are to be regarded as made by Steller for Sell, and so must, I think, all payments subsequent thereto which Steller chose to make.
    The breach of Sell’s promise did not forfeit his interest, which was so kept alive.
    This seems to be the result flowing from Steller’s own account of his agreement with Sell.
    But aside from Steller’s own story of the contract, it seems quite clear that he could not have regarded Sell’s rights as extinct after the expiration of the two years. His statements subsequent to the death of Sell are opposed to the existence of any such notion. While the repetition of alleged admissions is always to be received with circumspection, because of the difficulty of repeating, with precision, language which has been used at a former period, yet it is impossible to doubt that Steller did, on more than one occasion, acknowledge that Sell had an interest in the surplus remaining after the payment of the debt and the assessments.
    Aside from the testimony of Mrs. Sell and her daughter, there is the testimony of Mr. Hager, an intelligent gentleman, and a witness who certainly could not he entirely mistaken as to the substance of Mr. Steller’s conversation. To this witness he admitted that Mrs. Sell had an interest in these moneys. Now, if it had been true that Sell fixed the period of two years within which he should have the right to take these policies upon the condition named, and if it be true that it was understood by that agreement that upon his failure to take the policies within the period named, all his right in them should cease, why should Steller thereafter have admitted, in any form, the right of anyone other than his wife Or himself, to receive any portion of the entire amount ?
    It is, however, said that Sell’s letter, written to Steller in' 1894, requesting a small loan and saying that his wife would repay it out of the money she would receive from other insurance in her favor upon his life, is opposed to the idea that he supposed he had interest in the present policies. There is force in this suggestion. But ten years had elapsed since these policies were written. He had paid nothing on the debt nor any. assessments. He probably did not know whether they had been kept alive and was ashamed to inquire. He may not have realized what the right of his wife was in them after this lapse of time.
    The evidence of-Mr. Sell himself is lost by his death, but, taking all the facts of the case, I think that the complainant has so far proved her case it must be concluded that Sell at any time, upon the payment of the debt and assessments, had the right to redeem these policies, and that the payments made by Steller were made on the condition that he was to have a lien upon the amount of the policies as security for such payment in addition to this debt.
    The next question is, if there was a trust, was it in favor of Sell or his wife? If the former, then this surplus goes to his estate, and the complainant must fail; if to the latter, then she is entitled to a decree.
    Mr. Hager says that Steller admitted to him that by the arrangement with Sell the surplus was to go to Mrs. Sell. This is a most explicit statement. The other instances in which Mr. •Steller speaks of the interest of Mrs. Sell might be referred to either Mrs. Sell as administratrix of her husband or to herself individually, but the remark to Mr. Hager meant Mrs. Sell individually, and the remarks throughout the case in respect to the taking out of insurances to secure their wives, afforded an additional probability that if the agreement between Sell and Steller impressed upon these policies a trust at all, it was in favor of the wife of the insured. I therefore conclude that the complainant is entitled to a decree for the surplus, after the payment of the debt, assessments and interest.
    In respect to the debt there is a contested item of $500. Steller says he loaned this amount to Mr. Sell on a train of cars going to New York, on the day after Thanksgiving, 1883. In respect to this loan, he has no evidence of indebtedness; none was taken, he says. The existence of the loan stands, therefore, upon the testimony of Steller alone. The fact that there are evidences of the other loans and none of this, is a circumstance (not conclusive, however) against the probability of this loan having been made. But the strongest objections to the recognition of this alleged loan as a debt, are in the admissions of the defendant himself. He admitted that he told Mr. Hager, in his first conversation with him, that the amount of the debt was $800. It was not until a conversation occurring some time afterwards that he said he had omitted an item of $500, and the reason he gave for omitting it was that he did not want his family to know anything about it. His statement on other occasions of the amount owing as about $2,500, would exclude the $500, because the interest upon the $800 admittedly owing, and upon the assessments, would have amounted to about the sum of $2,500. So I am constrained to the conclusion that the probabilities are strongly against the existence of this $500 indebtedness.
    I will advise a decree in accordance with the prayer of the bill, upon the lines above indicated.
   The opinion of the court was delivered by

Lippincott, J.

Originally the bill of complaint in this matter was filed in> the court of chancery by the respondent, S. Elizabeth Sell,, against John Steller, Jr., who is one of the appellants.

To this bill of complaint a demurrer was filed by John Steller, Jr., which, upon hearing, was overruled by the chancellor.

His opinion is reported in 8 Dick. Ch. Rep. 397.

After the demurrer was overruled an answer by John Steller,. Jr., was filed. After this answer an amended bill was filed, in which Ida Steller, the wife of John Steller, Jr., was made a party defendant to the bill of complaint. To this amended bill Ida Steller filed a separate answer. Some portion of this answer' was expunged, after which the cause came to final hearing upon the bill, amended bill, answers and proofs, and a decree advised by Vice-Chancellor Reed in favor of the respondent against the-appellants, from which decree this appeal was taken.

The contest in this case arises over the question who is entitled to certain excess insurance upon three policies which were taken-out on the life of George W. Sell, the husband of the respondent..

The facts, briefly stated, appear to be that in March, 1884, George W. Sell, the husband of the respondent, obtained on his life three certificates of insurance in the Northwestern Masonic-Aid Association. These certificates of insurance were for $2,500,. $5,000 and $1,000, each certificate naming Ida Steller, his sister, as beneficiary. These certificates were taken out under the following circumstances : Sell became indebted to John Steller, Jr., the husband of Ida Steller, and she is the beneficiary named in each of the certificates of insurance. Steller proposed to Sell this insurance to secure his indebtedness. Steller, to obtain this insurance, proposed to keep the premiums or assessments thereon paid. After some negotiations between Sell and Steller, Sell assented to this method of insurance and the certificates were-taken out in the sums named, which aggregated a much larger sum than the indebtedness. It further appears that it was agreed between Sell and Steller that on the death of Sell and upon the-payment of the insurance money to Idá Steller, his sister, that-she should pay the money to Steller, and Steller then should retain the indebtedness and interest thereon and all assessments and premiums paid on the insurance and interest thereon, and then pay the balance to the respondent, the widow of Sell. It also further appears that Sell promised that, within the space of two years, he would pay the indebtedness to Steller and also such "assessments as had been advanced by Steller on the insurance, and interest thereon, and take the life insurance to himself.

Under the articles of incorporation of the aid society, only a blood relative of the insured could be made a beneficiary. The insurance was received by Ida Steller, paid over to John Steller, Jr., and now Mrs. Sell seeks to have a trust declared in her favor for the excess of insurance after the payment of the indebtedness and the assessments and interest, and asks for an accounting and payment over to her. Steller paid the assessments on the insurance for ten years, when Sell, in 1894, died, and the amount of the certificates was paid by check of the aid society to the order of Mrs. Steller, which check was by her endorsed and delivered to her husband on June 21st, 1894, who collected the money thereon and has since controlled the proceeds of the certificates of insurance.

The indebtedness of Sell at the time the insurances were taken out, according to the statement of Steller, was $1,300. The respondent understood that it was only $800. The facts are very fully stated in the opinion of the learned vice-chancellor and need not be repeated.

Only such facts are here stated as reveal the questions raised and argued in this court.

The respondent insisted in the court of chancery that after the payment of the debt due Steller by her husband, and the amount of the premiums or assessments, and all interest thereon, she was entitled to the balance of the policies; the appellants claimed that the balance belonged to Mrs. Steller.

The decree in the court of chancery, as advised by the vice-chancellor, was that the appellant Ida Steller had no equitable interest in the proceeds of the insurance, and that a trust was impressed upon the certificates in favor of the respondent, and that after the receipt by John Steller, Jr., of the proceeds, of the insurance on June 21st, 1894, he was bound to pay the same, less the assessments paid by him and interest, and less also the indebtedness of Sell to Steller and interest, to the respondent.

The conclusion reached by the court is that so far this decree of the court of chancery should be affirmed.

By the decree, upon the accounting, as stated by the learned vice-chancellor, between the respondent and Steller, he was allowed the amount of the assessments paid by him, with an average interest thereon, to the 21st day of June, 1894, and so far again the decree is affirmed.

By the decree there was also allowed to Steller an indebtedness of $800 loaned to Sell prior to September 1st, 1883, and interest thereon from the latter date to June 21st, 1894, and that there was due from Steller to the respondent, as the excess proceeds of the certificates, the sum of $5,916.66.

Upon a consideration of the facts of the case, I have reached the conclusion that the part of the decree allowing to Steller only an indebtedness of $800 and interest thereon, and fixing the amount as due from Steller to the respondent at the sum of $5,916.66, is erroneous.

Steller swears distinctly and emphatically that at the time the policies were taken out, Sell was indebted to him in the sum of $1,300. The indebtedness of $800 was admitted by the respondent. Steller declares circumstantially that in November, 1883, he thinks it was the 29th or 30th of the month, the day after Thanksgiving, a further loan of $500 was made by him to Sell. It was to be but a temporary loan for a week or two, but Sell being unable to repay it, the indebtedness continued and existed at the time of the issuance of the certificates of insurance and has never been repaid. It is true that Steller admitted in his evidence that he had told others of the loan of $800, but had omitted to mention the fact of the loan of $500. His explanation of this omission is that he did not wish his wife to know of it at the time. It is true that he at other times stated that the indebtedness of Sell to him amounted to about $2,500, which would be about the amount of the assessments and interest, and $800 and interest. While these are circumstances of suspicion as to the correctness of his claim for the additional sum of $500, yet it is not sufficient to overcome his positive evidence as to the loan of this amount and the detail of facts and circumstances under which it was made.

The conclusion reached upon the proof is that this additional loan of $500 was made, and that in the accounting Steller should have been allowed that additional sum and interest thereon from November 30th, 1893, the date of its advancement to Sell, to June 21st, 1894, and that the decree, in so far as it omitted this allowance, should be reversed, and the cause remanded to the court below to the end that such additional allowance of $500 and interest be made, and the decree of that court, so modified and corrected, carried into execution.

I shall, therefore, vote for such modified reversal of this decree.

For reversal — Collins, Depue, Dixon, Garrison, Gum-mere, Lippincott, Ludlow, Van S yokel, Bogert, Dayton, Hendrickson, Nixon — 12.

For affirmance — None.


text:
    Henry Lauer et al., partners as Stern, Lauer, Shol & Company, appellants, v. George R. Gray, receiver of the United States Credit System Company, respondent.
    1. Where a party was the holder of a certificate of guarantee or policy of insurance against the loss of credits for goods shipped, and loss occurring between the commencement and expiration thereof, and which contained a provision that “ If this certificate is renewed by the said above-named party on or before the date of its expiration, at the regular terms of the company, in force at the time of such renewal, then, in that case, losses occurring after, the expiration of this certificate, on goods shipped between the commencement- and the expiration thereof, shall be provable under the renewal, in the same' manner as if losses occurred on goods shipped after the commencement of the renewal,” upon which original policy losses occurred, in accordance with its terms and conditions, and which, upon adjustment and allowance by the insurer*?, were not paid to the insured, but retained by the insurers, and under an agreement made subsequent to the expiration of the policy that, upon the cancellation thereof, such losses should answer the payment of a premium for a renewal policy — HeM, that the retention of these losses under such an agreement, constituted payment “on or before the date of the expiration” of the original policy, of the guarantee fee or premium of the renewal policy, and was a compliance with the condition therein that “If this certificate has been paid for on or before the date of the expiration of the certificate held by the above-named party last prior to this one, then, in that case, losses occurring during the life of this certificate, on goods shipped during the term of the last prior one, shall be included in the calculation of losses under this certificate, in the same manner as if the goods had been shipped and the loss had occurred during the life of this certificate,” although the adjustment of the losses under the prior certificate, and the cancellation thereof, and the execution and delivery of the renewal, did not take place until after the expiration of the original certificate. The two certificates or policies of insurance were connected together, and had reference to each other, and the adjustment of loss, cancellation, agreement aforesaid, and the execution and delivery of the renewal had relation to the life of the prior certificate, the losses upon which, by virtue of the agreement, constituted the payment of the premium of the renewal, by reason of the situation which existed before the expiration of the prior one, and to which the renewal had reference, and it was immaterial, under such circumstances, that the execution and delivery of the renewal were postponed until the adjustment of the losses and cancellation of the former policy could be accomplished.
    2. The obligation of the insurer to issue and deliver the certificate of renewal, accepting as payment of the premium therefor the losses owing to the insured upon the prior policy, when adjusted, and the policy canceled, being established, the payment related back to the life of the prior policy and was of the time during which such losses occurred, and the mere delay, during negotiations of putting the obligation into a written agreement or contract, or embodying it in a formal certificate of renewal, did not alter or extinguish such obligation; equity will impute the intention to fulfill the obligation, and if necessary to protect and enforce the just rights of the parties, it will assume the obligation to have been fulfilled in accordance with the principle or maxim that equity looks upon that as done which ought to be done.
    On appeal from decrees advised by Vice-Chancellor Reed.
    The appellants are the holders of a certificate of guarantee or policy of insurance for the sum of $20,000, issued and delivered to them June 12th, 1893, by the United States Credit System Company, guaranteeing or insuring them against losses upon credits given by them to their customers in business on sales and shipments made by the appellants between June 1st, 1893, and May 31st, 1894. This certificate also contained the following clause of insurance, to wit:

      “ If this certificate has been paid for on or before the date of expiration of the certificate held by the above-named party last prior to this one, then in that case losses occurring, during the life of this certificate, on goods shipped during the term of the last prior one, shall be included in the calculation of the losses under this certificate, in the same manner as if the goods had been shipped and the loss had occurred during the life of this certificate.”
    The appellants had been the holders of a prior certificate of guarantee against losses of this character, dated June 12th, 1892, to run until May 31st,' 1893, as the date of its expiration. This prior certificate contained the following clause, to wit:
    “ If this certificate is renewed by the above-named party on or before the day of its expiration, at the regular terms of the company in force at the time of such renewal, then in that case the losses occurring after the expiration of this certificate, on goods shipped between the commencement and expiration thereof, shall be provable under the renewal in the same manner as if the losses had occurred on goods shipped after the commencement of the renewal.”
    Under the terms of this prior policy, and before its expiration, losses, upon adjustment, to the amount of $580 had occurred. When the adjustment of these losses had been made, on June 10th, 1893, it was agreed that this policy should be canceled and this amount of losses should be devoted to the payment of the guarantee fee or premium for a renewal certificate. The losses and the cancellation was agreed should stand as the consideration or payment for the renewal certificate.
    Under this arrangement between the appellants and the credit system company, the appellants, on June 10th, 1893, endorsed upon the original or prior certificate the following receipt, to wit:
    Cincinnati, O., 6-10, ’93.
    “Keeeived from U. S. Credit System Co., five hundred and eighty 00/100 dollars (§580) in full and complete satisfaction of all claims and demands of whatever kind or nature of within certificate.
    “ Stern, Lauer, Shoe & Co.”

      This sum of |580 was not paid to appellants but retained by the United States Credit SystenrCompany, and at the same time, contemporaneously with the receipt, on June 10th, 1893, the following agreement was delivered to the appellants:
    “ Cincinnati, O., 6-10,1893.
    “It is agreed and understood that the U. S. Credit System Company will issue to Stern, Lauer, Shol & Co., a renewal certificate on terms as follows:
    “ Own loss to be If per cent., Class D 2, If per cent., Class D 1, limit of single accounts 55,000; absconding debtor special, also special allowing S. L. S. & Co. to renew certificate for 510,000 instead of 520,000 should they desire. This certificate to be gratis in consideration of cancelling certificate No. 470.5 having expired May 31, 1893.
    “U. S. Credit System Co.,
    “Oscar Ising, Inspector.”

    The delivery of the certificate of renewal to which reference is made in this agreement, was made by the secretary of the company, by mail, with an accompanying letter, to wit:
    “Newark, N. J., June 12th, 1893.
    “ Messrs. Stern, Lauer, Shol & Go., Oineinnati, Ohio :

      “ Enclosed we hand you 520,000 guarantee in accordance with arrangements made with an application submitted by our inspector, Mr. Oscar Ising.
    “ Yours respectfully,
    “Frank M. Wheeler, Sedy.”

    To this letter and enclosure the following reply was made by Stern, Lauer, Shol & Company :■
    “Cincinnati, June 16th, 1893.

      11 United States Credit System Co., Newark, N. J.:

      “ Dear Sirs — We are in receipt of your 520,000 guarantee policy in accordance with arrangements made with your Mr. Ising.
    “ Kespectfully yours,
    “Stern, Latter, Shol & Co.”

    On June 16th, 1893, the following letter was sent to the appellants:
    “Newark, N. J., June 16th, 1893.
    “ Messrs. Stern, Lauer, Shol & Co.:

    “ Gentlemen — Enclosed we hand you special for attachment to your certificate No. 1414, which you will please substitute for the one now attached to your certificate; as we notice that the amount of 510,000 mentioned in the second paragraph of the special reads 51,000, the last naught of the 510,000 being quite indistinct.
    “Yours very truly,
    “Frank M. Wheeler,

      “Secretary.”

      Under these facts and circumstances the appellants became the holders of the renewal certificate, which contained the clause to which reference has been made.
    Certain losses amounting, as computed according to the terms of the renewal, to the sum of $15,256.83, were ascertained, on goods shipped between June 15th, 1892, and May 31st, 1893, during the life of the prior policy, the losses occurring after the expiration thereof, and the same were presented to the receiver of the United States Credit System Company as provable under the certificate of renewal issued June 12th, 1893.
    These losses were disallowed by the receiver, on the single ground that the guarantee fee or premium of the renewal certificate had not been paid on or before the expiration of the prior certificate, that date being May 31st, 1893, and that, therefore, the certificate under which the claim was presented was not a renewal. It is agreed that if the claim of the appellants does not include losses occurring during the year ending May 31st, 1894, on shipments made during the year ending May 31st, 1893, then there are no losses provable against the receiver under the conditions of the policy.
    The appellants filed in the court of chancery a petition of appeal from the disallowance of losses by the receiver, claiming that the last certificate was a renewal of the prior policy, on the ground that the guarantee fee or premium for the renewal had been paid before the expiration of the prior certificate, and also that the respondent was estopped by reason of the issuance of the renewal certificate under the circumstances from denying the effectiveness of this particular clause of the renewal certificate to cover losses upon goods shipped during the life of the prior one. The petition also prayed a reformation of the certificate in case it was found in contradiction of the agreement between the credit system company and the appellants, so that the claims for losses sustained during the period covered by the prior certificate might be lawfully made. Subsequently, the appellants also presented a petition, to obtain permission to bring suit against the receiver, if it should be found necessary, to reform the certificate of renewal so as to include such losses.

      The vice-chancellor, after hearing, approved the disallowance of the losses by the receiver upon the ground that the renewal certificate had not been paid for before the expiration of the prior certificate and that, therefore, the clause in the renewal policy intended to cover losses during the life of the prior policy never had any force or effect, and besides that there existed no waiver by the credit system company of the condition of such clause; that, in order to have effect, it should have been renewed and paid for before the expiration of the prior certificate. The vice-chancellor, therefore, advised that the petition of appeal from the disallowance of losses by the receiver be dismissed and decree was accordingly made. At the sáme time a decree was advised denying permission to sue for reformation of the certificate. From both these orders and decrees an appeal has been taken.

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

      Mr. Howard W. Hayes, for the respondent.
   The opinion of the court was delivered by

Lippincott, J.

Ho question has been or could be made against the validity of the issuance of the certificate of guarantee or -policy of insurance to the appellants on June 12th, 1893. It is only assailed upon the ground that the condition of the clause under which the appellants seek to establish liability was never complied with. The certificate was in form a renewal certificate, as distinguished from an original certificate. It is clear from the terms of the renewal that it had relation to a prior certificate, and besides that the agreement to renew was made in view of the fact that a prior policy existed upon which, and in accordance with the terms thereof, a liability for losses had arisen. The original policy, by its terms, only insured losses on credits for merchandise sold and delivered where the sales had been made and the losses incurred before or on the date of its expiration, but it contemplated specifically a renewal which would cover and include losses for goods shipped before its expiration where such losses did not actually occur until after its expiration.

Under this renewal certificate not only losses occurring before its expiration on goods shipped during its life were provided for, but it also, by this special clause, covered losses incurred during the same period on sales and shipments of merchandise during the life of the prior certificate. That the renewal certificate succeeded a prior certificate is conceded, and the only defence to its effectiveness in the respect claimed is that the premium or guarantee fee for which this renewal was made was not paid before the expiration of the original or prior certificate.

The conclusion reached is that no such defence has been sustained by the evidence presented to the court. The losses sustained by the appellants under the prior certificate were sustained before its expiration on May 31st, 1893. These losses were subject to adjustment, payable to the appellants on or before that time. These losses, amounting to the sum of $580, retained by the insurer, and the cancellation of the certificate, related to the date of its expiration, and thus all of the benefits which could ever arise to the appellants from it were surrendered to the insurer as of the date of its expiration. The amount of losses was not only retained, but the policy, perhaps covering other losses than those which had been adjusted, was extinguished by the assent of the appellants, upon the condition that they were to receive from the insurer a renewal policy, and which was duly and formally issued and delivered. The negotiations, which resulted in the agreement which accomplished these ends, continued over a period of ten days after the expiration of the prior certificate, but all the benefits and considerations of the renewal were in the hands of the insured before the expiration of the prior certificate and related to a period prior to that date, and must upon every process of reasoning be held to have been a fair and substantial compliance with the condition of the clause in question, which required that certificate must be paid for on or before the expiration of the original certificate, and if this be true it would matter little when the renewal certificate was actually issued and delivered.

It must be recalled that the terms of the renewal certificate must govern in its construction and the effect to be given to its different provisions. In order to make every clause effective it only required the payment prior to the expiration of the original certificate. The renewal policy not only included this special clause but also others covering the different losses which might be incurred. The prior certificate may have contained terms antagonistic to the validity of this clause of the renewal, but the renewal being the legally-substituted contract, liability must be determined by it. The only condition of the renewal, in order to make every provision, including the one in question, effective, was that whatever was considered and agreed upon as the premium for the renewal must be paid or satisfied before or on the date of the expiration of the prior certificate. If this was done, the renewal became the right and due of the appellants in such form as would cover the losses contemplated. The satisfaction or payment, if that term is to be chosen, being found in the existence of the liability of the insurer to the appellants, during the life of the prior policy and before its expiration, under the agreement to renew, the obligation of the insurer arose to carry out the intention of the parties to so devote this previously-existent liability to the purpose of this renewal. The nature of the transactions between the insurer and the appellants not only exhibited the intention of the parties that this was to be so, but I think indicated conclusively that the renewal was based upon the benefit of the retention of the losses occurring under the old policy during its life, and the extinguishment of liability of the insurer under it on the day of its expiration.

It is difficult to perceive upon what course of reasoning or upon what principle of equity it can be contended that the letter as well as the spirit of this contract of insurance have not been complied with, or upon what ground liability can be equitably and honestly avoided. It can be fairly concluded that in order to arrive at this conclusion, there exists no need of construction or interpretation of the agreement between the parties for the renewal policy. It has direct reference to the satisfaction or payment of premiums, by applying the losses arising out of the prior policy incurred before its expiration, and upon such express reference, it is discovered that under it, and during its life and before its expiration, the full premium for a renewal had been retained, and by express agreement these considerations are made to answer for the payment of the premium for the renewal policy. This is conceded by the insurer, but the answer is made that the agreement making this application was not made until after the prior policy had expired. Under the renewal policy it may be a question when the expiration of the prior policy occurred, but conceding that it expired at the time claimed by the insurer, the mere delay of embodying the renewal agreement in a formal certificate did not alter or extinguish the obligation, for the obligation once being established, the application of equitable principles imputes an intention to fulfill it, and if necessary to protect the parties in their just rights and enforce them, equity will assume, the obligation to have been fulfilled in accordance with the doctrine that equity looks upon that as done which ought to be done.

It is therefore concluded that according to the terms of the contract between the insured and the insurer, there was a satisfaction and payment of the premium or guarantee fee of the renewal certificate during the life and before the expiration of the prior policy.

It is not necessary to consider the other grounds urged to establish the liability of the insurers upon this clause of the renewal.

The receiver, therefore, was bound, under the terms of this renewal policy, to make allowance for the losses of the appellants, upon merchandise shipped during the term of the prior certificate where the losses occurred after its expiration and during the life of the renewal certificate, and include the same in the calculation of losses under the renewal certificate, for a pro rata distribution of the assets of the United States Credit Sytem Company.

The decree dismissing the appeal from the disallowance by the receiver must be reversed, with costs.

For reversal — Dixon, Garrison, Lippincott, Magie, Van Syckel, Barkalow, Bogert, Dayton, Hendrickson, Nixon — 10.

For affirmance — Depue, Gummere — 2.

With this result the petition for permission to bring suit against the receiver for a reformation of the renewal certificate becomes unnecessary, and therefore the decree denying the permission to bring such suit must be affirmed, without costs.

For affirmance — Depue, Dixon, Garrison, Gummere, Lippincott, Magie, Van Syckel, Barkalow, Bogert, Dayton, Hendrickson, Nixon — 12.

For reversal — None.


text:
    George R. Gray, receiver of the United States Credit System Company, appellant, v. Alfred Blum and Lucas Toch, respondents.
    1. A receiver of a credit system insurance company stands in tlie place of the company as to the allowance or disallowance of the claims against it, and when he acquires knowledge of loss whilst the company was solvent, and does some act that implies that he will not insist upon proper and correct proofs of loss being made, he cannot thereafter set up this omission against an allowance of the claims for pro rata distribution.
    2. Where the notice and proof of loss are defective, and the insured negotiates as to proper notice and proof, and the proofs are offered and unohjected to by the receiver, and the insured is led to believe, by some act of the receiver, that no defect exists, or that an existing defect is immaterial, the defect is waived and the claim must be allowed.
    On an appeal from a decree advised by Vice-Chancellor Reed.

      For the appellant, Messrs. Hayes & Lambert.

    For the respondents, Mr. Charles E. Hill.

   The opinion of the court was delivered by

Lippincott, J.

On the 15th day of June, 1894, the United States Credit System Company issued a certificate of guarantee to the respondents, by which the credit system company agreed to pay to them such sum not exceeding $5,000, according to the conditions of the certificate, on the total gross sales and shipments of merchandise which they might make between March 15th, 1894, and March 14th, 1895, to their customers, as they might actually lose on such shipments to legally-ascertained insolvent debtors, of whom the United States Credit System Company had been notified on its notice of failure blanks, with all questions thereon answered, within ten days after information to them of such insolvency. The other provisions of the certificate need not be referred to, as they are immaterial to the decision of this case.

The respondents, during the period of the insurance, had made sales and shipments of merchandise to the Saloon Fixture Company of the city of Chicago, to the amount of $2,414.46. On this sum there was a credit to the fixture company of the sum of $198.96, leaving a balance due of $2,215.50. The Saloon Fixture Company failed on August 13th, 1894, with this balance still due the respondents, and on the same day they received notice of such failure. According to the terms of the certificate, the respondents’ own loss would be $1,000, and therefore the insurance held good only for $1,215.50, an allowance of which is sought against the receiver in the distribution of the assets of the United States Credit System Company.

The respondents received notice of the insolvency of their debtor, the Saloon Fixture Company, on August 13th, 1894. Mr. Blum testifies that on that day he mailed to the United States Credit System Company notice of this insolvency, along with statement of the loss sustained. Some time between that date and August 24th, the United States Credit System Company failed, and on August 23d a temporary receiver of that concern was appointed. The claim was presented to the receiver, and on November 15th, 1894, he disallowed the same, on the ground that, according to the conditions of the certificate, notice of loss had not been sent to the company within the ten days. From that disallowance an appeal was taken to the court of chancery. In that court an order was made that the claim be allowed by the receiver, as duly proved, and entitled to a pro rata payment with the other debts of the United States Credit System Company, with costs of appeal.

The learned vice-chancellor founded this order upon the finding of the fact that the notice of insolvency, with statement of loss, was on August 13th, 1894, mailed to the company. Whether the notice mailed was a sufficient proof of loss under the conditions of the certificate, is exceedingly doubtful. The certificate required that the notice' should be on the failure blanks of the company, with the questions thereon answered. This letter and statement was not on such failure blanks, and neither the letter nor statement contained all the items of information required. There exists much doubt also whether the letter and statement, such as it was, was ever mailed or received by the company.

But the conclusion reached is that the order of the court of chancery should be affirmed and the claim allowed by the receiver for a pro rata distribution, upon the ground that the receiver has waived the want of presentation to the company, during its insolvency, of the formal proof of loss, as required by the certificate.

The facts, as they appear to be in the case, are that at the time of the information of the failure of the Saloon Fixture Company to the respondents, on August 13th, 1894, the United States Credit System Company was on the eve of insolvency itself. The fact also may be taken, as found by the vice-chancellor, that some sort of notice and statement of loss was sent by the respondents to the credit system company on that day, and, at the same time, the respondents issued an attachment for their claim, so that it was in a state of litigation. The exact date of actual failure of the credit system company does not appear. The respondents say that it was about August 13th, 1894. The receiver was appointed August 23d, 1894, just ten days after the information of the failure of the Saloon Fixture Company had been received by the respondents. There is also evidence that the respondents after notice that their proof of loss was informally sent, on August 24th, 1894, to the company and to the receiver, a formal statement of loss on the failure blanks, in accordance with the condition of the certificate. The secretary of the credit system company, who remained in the service of the receiver, claims no such letter and statement was received, but the fact is, that on September 5th, 1894, the respondents mailed to the receiver a letter enclosing the account of the respondents against the Saloon Fixture Company. This was noted by the secretary as having been received on September 7th, 1894, and so marked on the notice. They were notified by the receiver that their proof of loss was informal, apparently by postal card from the receiver. Again, on September 26th, 1894, they enclosed a certified copy of their statement of loss to the receiver. On September 28th, 1894, this statement was returned because it was wrongly made out, and directions were given the respondents by the receiver that they must make out and verify their claim under oath, stating the amount they claimed the Saloon Fixture Company owed them. In accordance with these directions the respondents sent to the receiver a statement under oath of their .claim against the Saloon Fixture Company. On October 17th, 1894, the receiver again informed them that their affidavit was faulty, and directed them to send in the claim against the Saloon Fixture Company under oath. On October 18th, 1894, such statement was sent to the receiver. These facts fully appear by the correspondence between the receiver and the respondents. On November 15th, 1894, the receiver disallowed the claim upon the ground that the respondents never filed any notice of loss with the United States Credit System Company whilst it was solvent, and that no notice was filed with him until September 7th, 1894, and claiming that the condition of the policy which required such notice within ten days after information of failure of the debtor had not been complied with, and that, therefore, the respondents had no claim for an excess loss against the credit system company.

We think it was entirely too late for the receiver to disallow this claim. Under the facts and circumstances in proof in this matter, and which were before the receiver, there was a clear waiver of this condition of the certificate. It is manifest here that the deficient proofs were taken by the receiver and explicit instructions given by him to the respondents for their correction.

Under the circumstances, the respondents were led to believe that the receiver had dispensed with this condition of the contract, and upon the faith of that they went on dealing with him. It was very easy, on the 5th or 7th of September, to have said to the respondents that their claim could not be entertained, and that this condition would be insisted upon, but the continued negotiations for the correction of the proofs of loss reveal a state of facts which is only consistent with a waiver of that condition. As was said in City Bank of Louisiana v. First National Bank, 6 Eng. & Ir. App. 360, the law will not allow one to take up the inconsistent position at once approbating and reprobating,” and in this view it is quite immaterial what the real intention of the receiver may have been, for he will be estopped from denying the fact of waiver. His conduct raised a belief in the mind of the respondents that he intended to waive one of the terms of the contract, and it would be quite immaterial what his intention may have been. Roby v. American Central Insurance Co., 120 N. Y. 510; Armstrong v. Agricultural Insurance Co., 130 N. Y. 560; Ronald v. Mutual Reserve Fund Loan Association, 132 N. Y. 378; Everitt v. London &c. Insurance Co., 142 Pa. St. 332; Insurance Company v. Wolff, 95 U. S. 326, 333.

In this, as in kindred cases, the receiver stands in the place of the company as to the allowance or disallowance of claims of this character under the statute which confers this power and imposes this duty upon him. At least no question of this character was made in the argument, and therefore it is presented the same as if the act of waiver, if any existed, was that of a duly-authorized agent or officer having full power to waive this condition of the certificate.

The waiver of notice of loss, or defects in proof of loss, or of the due time of their presentation, are common instances of the application of the general doctrine, and instances are so numerous as to make citation of authorities tedious.

When the insurer acquires knowledge of loss and does some act that implies he will not insist upon notice being given, he cannot thereafter set up the omission to notify, or at least his conduct is evidence of waiver. Weed v. Hamburg-Bremen Fire Insurance Co., 133 N. Y. 394.

Where, on death blanks, forms for proofs are given, and the insured advises and negotiates as to proper proof (Travelers’ Insurance Co. v. Edwards, 122 U. 8. 457), it has been held that when the proofs offered are unobjected to, and the insurer leads the insured, by some overt act; to believe no defect exists, or that an existing defect is immaterial, the defect is waived. Keenan v. Missouri State Mutual Insurance Co., 12 Iowa 126.

It has also been held that a waiver may be inferred when the insurer is the cause of the delay of the insured in presenting proofs of loss, as where the proofs are sent back by' the insurer for correction, and again sent back after the time has expired. German Fire Insurance Co. v. Grunert, 112 Ill. 68; Travelers’ Insurance Co. v. Edwards, 122 U. S. 457. The insurer furnishing blanks to the insured after the time has been considered evidence of waiver. Goodwin v. Massachusetts Mutual Life Insurance Co., 73 N. Y. 480.

Instances of waiver are so numerous that it can well be stated that each case depends upon its own circumstances for a determination of the question.

Upon the ground of implied waiver, I vote to affirm the order of the court of chancery directing the allowance of this claim by the receiver.


author: Gummere, J.

text:
    Industrial Land Development Company et al., appellants, v. Abram S. Post et al., respondents.
    A, being indebted to B, executed a bond and mortgage to secure the payment of the debt. One of the provisions contained therein was that the prin cipal sum secured thereby should, at the option of the mortgagee, become immediately due and payable for failure to pay any installment of interest within thirty days after it had accrued.- — Held, that the fact that the mortgagee did not exercise his option the first time there was a failure to pay an installment of interest within the time limited, did not deprive him of the right to elect that the principal should become immediately due and payable on account of a subsequent default in the payment of interest.
    On appeal from a decree advised by Vice-Chancellor Bird, whose opinion is reported in Post v. Industrial Land Development Co., 34 Atl. Rep. 137.

      Mr. James Parker, for the appellants.

      Mr. Edwin B. Goodell, for the respondents.
   The opinion of the court was delivered by

Gummere, J.

The respondents are the holders of a bond and mortgage given by the Industrial Land Development Company to one William Post, to secure the payment of $150,000 loaned by him to the company. The bond and mortgage each contain a provision to the effect that the principal sum secured thereby shall, at the option of the holder thereof, become immediately due and payable for failure to pay any installment of interest within thirty days after it should fall due.

On. the 3d day of March, 1894, a semi-annual installment of interest fell due and remained unpaid until the 21st of May of that year, a period of more than thirty days. On the 3d day of September another installment of interest fell due; it also remained unpaid for more than thirty days, and, for this second default, the respondents elected that the whole of the principal debt should be immediately due and payable, and brought suit to foreclose the mortgage. A decree was entered for the whole amount of the principal, together with the arrears of interest.

The appellants contend that this decree is erroneous, insisting that the respondents, by failure to exercise their option to have the principal become immediately due and payable on account of the first default in the payment of interest, lost their right to exercise such option on account of any subsequent default.

There is nothing in this contention. By the terms of the bond and mortgage, the right was reserved to the mortgagee to demand immediate payment of the principal debt for any default in the payment of interest thereon. This right recurred as each installment of interest fell due, and his failure to enforce it for one default did not operate to deprive the mortgagee of his option to call for the immediate payment of the principal for a subsequent default in the payment of interest, any more than it operated to relieve the mortgagor from the necessity of paying the subsequent installments as they fell due.

Dumpor’s Case, Sm. Lead. Cas. 119, which is relied upon by counsel for the appellants as supporting his contention, seems to us to have no relevancy to the case in hand.

It is further urged on behalf of the appellants that the decree brought up by this appeal has, in fact, no existence, because, as it is claimed, it was never signed by the chancellor. It is difficult to see, even if this was so, how it could benefit the appellant, for if there was no decree, then there was nothing for this appeal to operate on, and it would have to be dismissed as improvidently taken.

The fact that the decree has been sent up with the other proceedings, by the court of chancery, in pursuance of the appeal, justifies us in assuming that it is an existing judgment of that court.

The decree below should be affirmed, with costs.

For affirmance — The Chief-Justice, Collins, Depue,. Dixon, Garrison, Gummere, Lippincott, Ludlow, Yan Syckel, Bogert, Dayton, Hendrickson, Hixon — 13.

For reversal — Hone.


author: Collins, J.

text:
    Henry J. Barr, appellant, v. John S. Voorhees and Theodore B. Booraem, respondents.
    1. In proceedings in chancery in aid of an unsatisfied judgment and execution (Gen. Slat. p. 889 H 88-94), an interlocutory order for discovery should specify the place for defendant’s appearance.
    2. In such proceedings an interlocutory order forbidding payment or transfer by or to a judgment debtor can only be supported by allegations of a specific debt or trust proved by oath.
    3. An order containing such a prohibition is appealable.
    This appeal is taken by a defendant to a bill in chancery from the following order made ex parte upon the filing of the bill:
    “It appearing to the court that the said complainants have filed their bill of complaint herein, setting forth that they are the owners of a judgment recovered against the defendant, Henry J. Barr, in the inferior court of common pleas of the county of Middlesex, and that an execution against the property of the said defendant has been issued thereon and returned wholly unsatisfied, leaving an amount remaining due exceeding one hundred dollars, exclusive of costs, and praying the aid of this court in the premises; and upon reading the said bill, verified according to law:
    “It is on this twelfth day of December, eighteen hundred and ninety-six, ordered that the said defendant appear and make discovery, on oath, concerning his property and things in action, before James H. Yan Cleef, Esquire, one of the masters of this court, on the seventeenth day of December, instant, at the hour of ten o’clock in the forenoon, and the said Henry J. Barr is hereby restrained from transferring any property, money, or thing in action belonging to him or held in trust for him, except where such trust has proceeded from some person other than the said defendant, and except such property as is now reserved by law, until the further order of the court in the premises.’’

      The only verification of the bill was as follows :
    u John S. Voorhees and Theodore B. Booraem, the above-named complainants, being each duly sworn according to law, on their several and respective oaths say that they have read the foregoing bill of complaint, and that the matters and things therein contained, so far as they relate to their own acts, are true, and, so far as they relate to the acts of others, they believe them to be true.”

      Mr. Alan H. Strong, for the appellant.

      Mr. John S. Voorhees, for the respondents.
   The opinion of the court was delivered by

Collins, J.

The order appealed from can find no support elsewhere than in those provisions of the Chancery act that authorize proceedings in aid of unsatisfied judgments at law. They are sections 88 to 94, Gen. Stat. p. 889. That statute will not sustain the order.

The direction to appear and make discovery is void, because no place is specified for that purpose as required by section 90. It is argued that the order may be helped by the subpoena ad testificandum, authorized for witnesses under section 92, but we hold otherwise. The express provision as to a defendant excludes any inference, by construction, that he is a witness. There is sound reason for the requirement that the order shall name time and place for the defendant’s appearance. The court, and not the complainant, should decide what is reasonable in that regard. A complainant ought not to have the power arbitrarily to compel the defendant to travel to a distant part of the state. Witnesses may safely be left to ordinary subjection to subpoena.

The prohibition of transfer of property is unwarranted. Such a prohibition under the statute cannot be general, but must be directed to a specific debt or trust pointed out in the bill and proved by oath to exist. Verification on belief is sufficient for an order for discovery, but not for an order forbidding transfer or payment.

Whether ah order simply requiring a defendant’s appearance for discovery is appealable, we do not decide.

The order appealed from must be wholly reversed.

For reversal — The Chief-Justice, Collins, Depue, Dixon, Garrison, Lippincott, Ludlow, Van Syckel, Barkalow, Dayton, Hendrickson, Nixon — 12.

For affirmance — None.


text:
    Georgiana Manley et al., appellants, v. John J. Mickle, respondent.
    1. Decree was sought to restrain a judgment creditor from executing his judgment on lands alleged to be held by the judgment debtor in trust for the complainants. The bill set up the acknowledgment of the trust by a deed given after the recovery of the judgment. — Held, that a cross-bill, seeking to have the trust deed declared void, might be maintained.
    2. When there is submission to answer, there must be a full answer.
    3. When a case is made for relief and discovery, discovery will be compelled, although answer without oath is prayed.
    4. Qwsre. Is an order for a further answer appealable ?
    On appeal from an order for further answer and discovery advised by Vice-Chancellor Pitney, who delivered the following opinion:
    The object of the bill is to establish a secret trust in real estate and thereby to divest the lien of a judgment against the holder of the legal title. The trust is alleged to result from the investment of trust moneys in lands by a deed which, through mistake and oversight, did not declare the trust. The bill alleges the investment of the trust fund in the land, and that after the recovery of the judgment the mistake was attempted to be corrected by a conveyance in trust to one of the complainants, which recited all the facts out of which the trust resulted.
    I think the bill is defective in not stating in detail the particulars of the sources of the trust moneys and their amounts, and that if defendant had seasonably moved the court for a more specific statement thereof an order would have been made, before answer, compelling complainants, under rule 213, to make a more specific statement in this behalf. This, however, was not done. Defendant answered, denying that any of the trust moneys were used to purchase the lands in question, and denying the existence of any trust fund, and then, by a cross-bill, called upon the complainant to specify the sources and amounts of such trust moneys, if any.
    The cross-bill also attacks the late remedial conveyance made by the judgment debtor, and prays that it may be set aside, so that a sale may be made under his judgment to advantage, and a clear title assured to the purchaser.
    The complainant answered the cross-bill without demurrer or objection to any of its charges so far mentioned, except to that calling on them to specify the particular sources and amounts of trust moneys. To this they except by way of demurrer, and decline to answar, and the motion is to compel them to answer. The prayer of the cross-bill is for answer without oath.
    Complainants resist the motion on the ground that defendant is not entitled to discovery in' his cross-bill because it is not asked for under oath, and relies on Johnson v. Butler, J¡, Stew. Eq. 35.

    I think the cross-bill is maintainable as a defence to the complainant’s bill. It is necessary in order to have a complete adjudication of the rights of the parties, which it seems to me included, from defendant’s standpoint, a decree declaring the trust deed void. At any rate, if the complainants desired to test this question and take the ground they now take, they should have moved to strike out the cross-bill. But having answered, they must answer in full, unless their objection to the particular interrogatories is well taken. The position was taken that under the case just cited (Johnson v. Butler, supra), a party is no longer entitled to discovery unless he asks it under oath. But this I cannot consent to. The well-settled practice is the other way. The decision in Johnson v. Butler went on the ground that the cross-bill was entirely unnecessary unless for the purpose of discovery, and that it was not necessary for that purpose because the defendant had the privilege of administering interrogatories to the complainant. Chancellor Runyon, who decided Johnson v. Butler, subsequently, in Chester Iron Co. v. Beach, 13 Stew. Eq. 63, held that the defendant in a cross-bill there was entitled to have full answer to interrogatories, though not asked under oath.
    The defendant in his cross-bill prays general discovery of other property of the judgment debtor. This he is not entitled to, and the especial objection to answering that part of the bill is well taken, and it should be stricken out.
    There will be no costs on this motion, because the defendant is in error in the matter last alluded to.

      Mr. James II. Van Cleef, for the appellants.

      Mr. Hoisted H. Wainright, for the respondent.
   The opinion of the court was delivered by

Collins, J.

We agree with the vice-chancellor that the cross-bill is maintainable as a bill for relief. The judgment creditor was entitled to seek a decree declaring the trust deed void. The complainants might dismiss their bill and the deed would stand of record a perpetual menace. The cross-bill was in the nature of a bill quia timet.

Even if this were not so, nevertheless the complainants having submitted to answer the cross-bill were bound to answer it fully. Hogencamp v. Ackerman, 2 Stock. 267; Vreeland v. New Jersey Stone Co., 10 C. E. Gr. 140.

But it is urged that discovery will not be compelled where answer without oath is prayed. Originally a complainant was required to pray for answer on oath and was bound by the answer if he could not overcome it by preponderant evidence. It was because a corporation could not make oath and answered only under its common seal that discovery by it had to be secured by the somewhat incongruous course of making its officers co-defendants. In special cases, the chancellor would permit a complainant to waive answer on oath, but would not ordinarily compel affirmative discovery where the defendant could not have the attendant advantages. The subject came to be regulated, in some jurisdictions, by standing rule of court, and in others by statute. Most states now have such statutes, and decisions on the subject, in those states, can only be understood when the statutes are read with them. There must always be borne in mind also the difference, often lost sight of, between bills for discovery only and bills for relief with incidental discovery. I have found no decision questioning the right of a complainant to require discovery in answer to a bill of the class last named, although prayed without oath, except the case of Congdon v. Aylsworth, 16 R. I. 281. This case inferentially is to that effect. The Rhode Island statute is peculiar; it enacts that whenever a complainant shall waive oath, the defendant's answer shall have the same effect as a plea to an action at law. Gen. L. of 1896 p. 826. A plea at law, of course, has no evidential force at all, even against the pleader.

In Massachusetts, the standing rule of court (now Stat. L. of 1883 oh. 223 § 10) excepts from the right to call for answer without oath, bills filed for discovery only, and therefore we are not surprised to find the supreme court of that state deciding that, because it prayed answer without oath, a bill ostensibly for relief as well as for discovery'could not be upheld if no case for relief was presented. Ward v. Peck, 114 Mass. 121; Badger v. McNamara, 123 Mass. 117.

The exception of the statute was not apparent from the report of this last decision, and the supreme court of Rhode Island seems to cite the case as a general precedent in McCulla v. Beadleston, 17 R. I. 20, 26. The Rhode Island statute really controlled, as appears from Harrington v. Harrington, 15 R. I. 341, and Congdon v. Aylsworth, supra.

The supreme court of the United States, however, has held that, notwithstanding the broad general rule of court permitting waiver of oath to answer (Equity Rule No. 41), a bill for discovery only cannot be maintained if it waive answer on oath. At least that was Mr. Justice Miller’s opinion in Huntington v. Saunders, 120 U. S. 78. The decision in that case can be upheld on other grounds. It sustained on appeal a demurrer to a bill filed for relief and discovery where no case for relief was made, and it had already been held that such a bill cannot be maintained for discovery alone. McClanahan v. Davis, 8 How. 170. Such also is the rule in this state. Metler v. Metler, 3 C. E. Gr. 270; affirmed, 4 C. E. Gr. 457.

It is evident that Mr. Justice Miller’s opinion has no bearing on the case of discovery prayed in connection with a proper case for relief. This is recognized in the federal courts, for in the later decision of Uhlmann v. Arnhott Brewing Co., 41 Fed. Rep. 369 (in the Pennsylvania circuit), it was held that a defendant must answer the interrogatories of such a bill, although oath to the answer was waived.

In Tennessee, where the act is general in terms, Chancellor Cooper said that to allow a demurrer to so much of a bill as seeks discovery would be to go in the teeth of the statute. Payne v. Berry, 3 Tenn. Ch. 154, 160.

Of course discovery in an unsworn answer is not available collaterally, but as an admission in a pleading it may be useful to a complainant in a pending cause, and there is no sound reason for denying the right to demand it. Indeed every answer implies some sort of discovery, even if only by way of admission of the allegations of the bill, and the decisions of this state abundantly recognize its evidential force in favor of a complainant. Hyer v. Little, 5 G. E. Gr. 443 ; Symmes v. Strong, 1 Stew. Eq. 131; Reed v. Cumberland Insurance Co., 9 Stew. Eq. 393; Walker v. Hill’s Executors, 7 C. E. Gr. 513, 519, a case decided by this court.

The statute in this state is very broad. It enacts that

“the complainant may in any bill in chancery pray that the defendant answer without oath, in which case the answer need not be sworn to, and the allegations and statements therein, whether responsive or not, shall not be evidence against the complainant, except on a motion to grant or dissolve an injunction, on which motion the statement and denials in an answer duly sworn to shall have the same effect as heretofore.” Gen. Stat. p. 376 § S3.

It is not necessary to decide what is the effect of this statute on a bill, filed for discovery only, where answer is called for without oath. That question may be reserved until someone shall try the fruitless experiment of exhibiting such a bill. The practice with regard to bills for relief with incidental discovery, has been long settled in chancery. It accords with the practice elsewhere in this country. We see no reason to disturb it, even if it be within our province to do so, which also it is not necessary to decide.

The order appealed from is affirmed.

For affirmance — The Chief-Justice, Collins, Depue, Dixon, Gummere, Lippincott, Ludlow, Van Syckel, Bogert, Dayton, Hendrickson, Nixon — 12.

For reversal — None.