author: Garrison, Y. C.

text:
    Herbert T. B. Jacquelin et al. v. The Erie Railroad Company.
    [Filed May 8th, 1905.]
    1. The right, if any, which a private individual has acquired by implied contract or otherwise, to compel a railroad company to maintain a station at a certain point will not be enforced by injunction restraining the discontinuance of the station, but the party will be remitted to a suit for damages.
    2. The right, if any, of the public to compel a railroad to maintain a station at a certain point is a legal one, enforceable by mandamus, and not by injunction to prevent the discontinuance of the station.
    3. An injunction to prevent the discontinuance of a railroad station is so far mandatory that it should not issue preliminarily except under such circumstances as justify the issuance of a mandatory injunction.
    4. The authority of the courts to compel a railroad company to maintain a station where not required by charter or statute is not so clear as to justify the granting of a preliminary injunction restraining the discontinuance of such a station.
    5. Mandamus to compel a railroad company to maintain a station at a certain point is an adequate remedy where the company threatens to discontinue the station, and a preliminary injunction will not issue to keep the matter in statu quo pending the determination of the mandamus proceeding.
    On motion for preliminary injunction. Heard on bill and affidavits and answering affidavits.
    The bill in this suit was filed on the 30th of March, 190'5. In it the complainant Jacquelin sets out that, beginning with the year 1903, he has invested in property, in what is now the borough of Orvil, an aggregate of $40,000; that the borough of Orvil was formed during the month of March, 1905; that the purpose of the complainant Jacquelin in buying the property aforesaid was to make for himself a permanent residence, and that he has many acquaintances who have indicated their intention of purchasing property in the said borough and becoming citizens thereof, and that one of the inducing reasons is its proximity to the cities of New York and Brooklyn, and the railroad communication between it and those places; that the station used by the inhabitants of said borough is Hohokus, on the main line of the Erie railroad, about twenty-four miles from New York, which station has been in permanent use for about sixty years, and at which station there is passenger, freight and express service; that said Hohokus is the only railroad station within the limits of the borough of Orvil; that the nearest stations thereto are at Undercliff, which, by road or street, is about four-fifths- of a mile distant from Hohokus, and Waldwick, which is similarly 'distant one and a half miles therefrom; that the complainant Jacquelin has large quantities of freight, consisting of coal, fertilizers, feed and the like, delivered to his residence from New York and other places, which can be easily obtained by him from the station at Hohokus, and cannot be obtained, without the use of poor roads and bad facilities, at Waldwick, while at Undercliff there is no freight station, and, on account of the topography of the ground, no likelihood of there being one; that the defendant company posted a notice in its railroad station at Hohokus to the effect that on and after April 1st, 1905, said station and train service and freight facilities thereat would be discontinued.
    It is also stated that the assessed valuation of the borough of Orvil is about $220,000, and it is charged that if the station is discontinued, the value of the land within the borough will be greatly decreased. It is charged that the withdrawal of the freight and passenger service at the station at Hohokus will be an irreparable injury to complainant Jacquelin, and to the others who use said station.
    The prayer of the bill is that a permanent injunction be issued restraining the Erie Railroad Company from discontinuing the use of the said Hohokus station, and discontinuing the train and freight service as now existing thereat, or as may hereafter be regulated by the said Erie Railroad Company, and requiring the company to maintain a station at Hohokus where said station is now located, and to continue the stopping of a-reasonable number of trains daily thereat, and the maintenance of a freight service of the same character as is now maintained at said point, together with a prayer for a preliminary injunction along the same lines.
    Upon the filing of this bill and affidavits, an order to show cause was made, with ad interim restraint against discontinuing the train service until tire further order of the court.
    Subsequently other parties were admitted with the complainant Jacquelin as parties complainant, among them the borough of Orvil, the New Jersey Agricultural and Driving Association, the Brookdale Bleachery, Isaac E. Hutton, Edwin West, Jr.; Mary E. Staples, Rebecca W. Hawes, Elizabeth M. Blauvelt, Harold R. Miller and Joel E. Miller.
    The general situation of each of these complainants, excepting the borough, is that of one who has invested money at or near the Hohokus station, either in business or in residence property, and that this was .done in reliance upon the belief that the Erie Railroad Company would continue the station where it now is, and that it will be an irreparable .injury if the same is removed.
    The defendants did not file an answer upon the return of the order to show cause, but did file affidavits. In these affidavits they set up that when the station at Hohokus was established there had been little or no development of the region through which the railroad ran; that no settlement grew up around the station, and the small population served by it extends, generally •speaking, north and south along the turnpike road which runs parallel with the railroad some distance to the east of it; that there is no one, excepting the Brookdale Bleachery, on the west side of the railroad at this point; that to the south, in extension of the town of Ridgewood, a large population has gathered, and a station called Undercliff was established about fifteen years ago; that to the north a still larger population has gathered, leading to the establishment, about the same time, of k station called Waldwick; that the passenger service at Undercliff and Waldwick has constantly increased, while that of Hohokus has been at a standstill.

      Relative figures are given with respect to the sale of commutation tickets at the three stations which show that at Hohokus the greatest number sold during any one month, from December to March, 1905, was eighteen, as against fifty-four at Undercliff and fifty-five at Waldwick, and that the least number was four at Hohokus as against forty-six at Undercliff and fifty-three at Waldwick.
    The amount of passenger receipts to and from the three stations for the fiscal year ending June 30th, 1904, is given, which shows that at Hohokus these were $2,583.30; at Undercliff, $7,001.16, and at Waldwick, $9,123.74.
    The answering affidavits further set up that the hotel, post-office and stores along the turnpike road are nearer to the Under-cliff station than to the Hohokus station; that the main freight service at Hohokus is for the Brookdale Bleachery, which has a private siding for carload freight, and that there is good freight service at Waldwick, where the company maintains a freight-yard; that the reason the company determined to discontinue the passenger station at Hohokus was because it was annoying to through passengers to maintain two stations as near together as Undercliff and Hohokus, and upon the score of' economy it. was determined, since Undercliff was the more important for passenger service and Waldwick for freight service, to discontinue the Hohokus station, making reasonable arrangements for the accommodation of the traffic.
    It is also shown that an arrangement was offered the Brook-dale Bleachery and the other business men mentioned in the bill with respect to handling their freight, and that the amount of freight handled for the complainant Jacquelin was trifling.
    There are other allegations in the affidavits which it is not necessary now to detail.

      Mr. Cornelius Dorem/Us and Mr.. Charles D. Thompson, for the complainants.

      Messrs. Collins & Corbin, for the defendant.
   Garrison, Y. C.

The precise question which is raised upon 'this motion is whether a court of equity in New Jersey should grant a preliminary injunction requiring- a railroad company to continue to furnish railroad facilities at a station which the company desires to abandon, there being no charter or statutory requirement with respect thereto.

There is no provision in the charter under which the defendant company is operating this part of its road which makes it a duty of the company to establish or maintain this or any other station.

My attention has not been directed to any provision of our statutory law which in any way declares or defines the duties of railroad companies with respect to the establishment or maintenance of stations.

I do not use the word “station” in its narrower meaning, or a building or place prepared for the reception and discharge of passengers and freight, but I am using the word to include a place at which the company habitually stops its trains.

If it is held to be the duty of a railroad company to continue to maintain railroad facilities at a station, it must be a common law duty.

The right which the complainants seek to have enforced against the defendant in this case must correspond with what is found to be the duty of the defendant. The right, therefore, is purely legal.

Of course, if the complainants’ rights were primarily equitable and not legal, entirely different principles would be applicable.

The complainants, for the purpose of inducing the court to grant this motion, insisted that they were entitled to the relief upon either one of two theories, i. e., that, they had a legal right which, under the circumstances, the court of equity would protect, or that they had an equitable right which the court would enforce. They sought to make out this equitable right by claiming that the company, by its conduct in locating a station at the point in question, had induced people to come there and settle, and, by its time-tables and advertising matter, had indicated that this station was one of its regular stopping places at which the public would continue to be served, and that it would be inequitable to permit the company to discontinue service at this place.

It seems to me, however, with respect to the claim that, by establishing the station and inducing people to come there, rights arose against the company, and a duty was enjoined upon the company, that such right, if it exists, and such duty, if it has been imposed, is the legal right or the legal duty. In other words, if common carriers, under obligation to serve the public, so conduct themselves as to give rise to rights in the public with respect to the operation of the road, such rights are public, and are not with respect to the particular individual or individuals who are affected more nearly than others of the public by a default upon the part of tire company.

To hold that there is an implied contract—for that is what it amounts to—between a common carrier and each person who lives along the line of the road, or who uses the road for purposes of transportation, would be, I think, an entirely defenseless ■ judgment.

If, however, it should be held that the railroad, by its conduct toward one or many individuals, had obligated itself by implied contract to continue a service at a particular place, I do not think a court of equity should enforce specifically such implied contract in all cases, if at all.

In eases where a railroad, by positive agreement, engaged to establish and maintain a station, the courts have refused to givceffect to such, agreement by'specifically enforcing it, for the reason that such agreement is against public policy, and even where it will not be disregarded for that reason, it is better to permit the railroad to serve the public unfettered by hampering contracts and to leave the injured party to his suit for damages for what he may have suffered by reason of the breach on the part of the railroad. Florida Central, &c., Co. v. Florida, 20 L. R. A. 419; Conger v. Railroad Co., 120 N. Y. 29; 23 N. E. 983; Texas and Pacific Railway Co. v. Marshall, 136 U. S. 393; 34 L. Ed. 385; Texas and Pacific Railway Co. v. Scott, 41 U. S. App. 624; 37 L. R. A. 94; Mobile and Ohio Railroad Co. v. People, 132 Ill. 559; 24 N. E. Rep. 643; 22 Am. St. Rep. 556.

To the extent, therefore, that the rights of individual complainants are not part of and are not merged into the public right, but are peculiar to each of said complainants, this court, upon the facts in this case, would not feel justified in granting the relief asked for.

But, in my view, the right which these complainants are seeking to have enforced against the defendant is, as I have heretofore said, legal and not equitable.

By reason of my conclusions in this case, I have not considered and do not decide whether these complainants are the proper persons to seek the enforcement of the public right in the premises. I have not, therefore, considered whether the attorney-general, on behalf of the people of the state, is the necessary party complainant to enforce the right of the complainants and the duty of the defendant.

The form in which the complainants ask for relief is phrased as if to restrain by prevention, but in effect it is to compel performance. The railroad company having given notice that it intended to discontinue the station, the complainants ask that it be compelled to continue its service at the station.

While there may be some doubt as to whether an injunction to prevent the discontinuance of an existing service is mandatory or not (Ex parte Lennon, 166 U. S. 548; 41, L. Ed. 1110), I think it so far partakes of the nature of a mandatory injunction that it should not issue preliminarily except under such circumstances as our courts have approved with respect to mandatory injunctions.

The case is one of groat importance in respect to the principles involved. While in this particular case the number of persons affected is not very large, and the amount of property at and near the station in question is not great, it will be readily perceived that the principles which are held to be applicable to this case will apply equally to cases in which a vast number of persons is affected and property interests of great magnitude are involved.

The whole subject-matter of the relationship of these common carriers to the public, and of what the duties of such carriers are, and whether they must be defined by the -legislature or may be inferred by the courts, is of great and growing importance.

Some of the most important of these questions are:

1. How far the legislature has committed to the discretion of the directors of these companies the determination of the kind, quality and amount of service that they will render to the public.

2. How far the courts may interfere and control the discretion of the directors and the operation of the road in matters that are not regulated by positive enactment in charter or statute.

3. How far the matter of regulating the kind, quality and amount of service is administrative and not judicial, and must proceed from legislation and not from judicial decision.

No citation of authority is necessary to establish the principle that a railroad is a gwasi-public corporation. As such quasi-public corporation it may be compelled by the courts to perform to the fullest extent all duties enjoined upon it. The'difficulty arises when we are called upon to determine whether any duty may properly be said to be enjoined upon it which is not contained in its charter or in some statutory provision. If it were a public corporation in the fullest sense of the word, as a municipality is, we find that the court will not require such public corporation to do anything except that which is enjoined upon it by charter or legislative enactment. A railroad corporation, it is frequently said, is chartered to serve the public with transportation facilities just as we may properly say that a municipality is chartered to furnish the public with certain governmental facilities. In the case of a municipal corporation, however, a mandamus will only be issued where the corporation has refused or neglected to perform a duty clearly enjoined upon it by charter or statute or law. I do not think it will be contended that a court would hold that, in the absence of a plain provision of charter or statute, it had the power to determine what was governmentally necessary, and enjoin its performance upon the municipality.

The supreme court of the United States has suggested that this subject of the regulation of the operation of carriers, in the matter of stations, frequency of trains and the like, is one for legislation and administration, and that the courts should not originate provisions with respect thereto, but should confine themselves to interpreting and applying them. Northern Pacific Railroad Co. v. Washington, ex rel. Dustin, 142 U. S. 492; 35 L. Ed. 1092; and similar reasoning will be found in the ease of Delaware, Lackawanna and Western Railroad Co. v. Central Stockyard, &c., Co., 45 N. J. Eq. (18 Stew.) 50 (at p. 65 et seq.) (Vice-Chancellor Van Fleet, 1889); S. C. on appeal, 46 N. J. Eq. (1 Dick.) 280.

It is, of course, conceded by all courts that where there is a positive enactment specifying that which the company must or must not do, the courts are the proper tribunals to enforce this positive duty, or to restrain action in excess of the power granted. But there are numerous cases, of which the present one is an example, in which there is no positive enactment, and in which the question must be squarely met as to the power of the court to interfere with the management and operation of a railroad upon the ground that it is not, in the court’s view, properly serving the public.

The dependency of our population upon railroads is so great, and the business interests of the country are so interwoven with the transportation facilities, that there is practically no end to the questions which may arise in this connection. The places where trains shall be stopped, the number and speed of trains, the character of services rendered, are general heads which each contain innumerable examples.

I do not decide, because it is not-within the province of a court of equity to originate legal principles, whether these questions are legislative or administrative, or whether they are judicial.

It is, however, of course, true that because they are difficult it is no reason why they should not be undertaken by a court if it be the duty of the court.

In a large number of our sister states it has been recognized that these questions can, at least, be much better dealt with by boards or commissions especially erected for this purpose, and such, states have, by legislation, so provided. For this reason there is not the bulk of law upon this subject-matter which one would expect. So many of the questions which arise between those who use the railroads and the companies are settled by these administrative bodies that the courts have not been appealed to so frequently, and there is not so much discussion of the power of the court as there otherwise would have been.

In this state, where we have no such administrative body, and where hardships and injuries may ensue to citizens and properties if railroads are allowed unrestrainedly to conduct their operations in a way to injure the citizen and his property, it is natural that applications should be made to courts of equity to restrain such invasions of what the citizen esteems to be his rights.

If the court could, without violating certain principles which I find to be absolutely settled in this state, grant to the complainants herein a preliminary injunction to hold matters in statu quo until the legal questions could be settled, I would find much reason for adopting that course, especially as by balancing the conveniences, as the court does in the matter of granting or withholding preliminary relief, the weight is all in favor of the complainants, because the injury which will ensue will surely affect them, while the defendant would merely be required to continue temporarily that which it has been voluntarily doing for some sixty years. But if the complainants have any right at all which a court may enforce', it is, as I have heretofore stated, a legal right, and the legal remedy is by mandamus.

The remedy by mandamus, however, is only effective to command the doing of an act which it is the corporate or official duty of the defendant to perform. It is not the equivalent of an injunction, and the court which has power to issue it has no means under its procedure to grant temporary relief pending the hearing and final disposition of the application for the writ. As a result there are many cases, of which this one may be an example, in which injury claimed to be irreparable will take place before the common-law court can decide the legal rights of the parties. Since, however, the hands of a court of equity are tied until such legal right is settled, or, to speak more exactly, the legal principle has been settled, there is in the existing state of the law no provision for such a situation.

I think that it is a subject which should receive careful consideration by those who have the power to alter it, and that the rigidity of the present rules respecting the granting of preliminary injunctions to protect' legal rights might well be. relaxed in many cases so as to permit a court of equity to hold matters in staiu quo until the rights of the parties may be settled at law.

Since this was a course which was urged upon me as a proper one to adopt in this case, so that the ends of justice might be served, I gave it the fullest consideration; but, in view of the decisions of the courts of this state bearing upon the questions which arise in this case, I reach the conclusion that, under our decisions, this course is not only unauthorized but would be directly in the face of the precedents.

The Erie Railroad Company, the defendant, is operating this part of its railroad under the provisions of the charter of the Paterson and Ramapo Railroad Company. This latter company was incorporated by an act passed on the 10th day of March, 1841. P. L. 1841 p. 97. It is not necessary to refer to this charter in detail further than to point out that there is no provision therein requiring the company to operate the road or to establish stations at any points.

My attention has not been directed to any legislation of this state respecting the location or maintenance of stopping places by railroads, and my own research has not resulted in finding any such statute.

To justify the court in granting the motion in this case the complainants must clearly establish the following principles:

1. That they have a right, equitable or legal, and, if legal, that it is clear and undisputed.

2. That irreparable injury will ensue if the preliminary injunction is not issued.

3. That this is a proper case for an injunction, at least partaking of a mandatory nature, to be issued upon preliminary hearing.

4.. That tire complainants have the right to compel the defendant to perform its legal duty in the premises by injunction out of equity and not by mandamus at law.

1. I have already sufficiently stated my conclusions .with respect to the character of the primary or fundamental right of the complainants, and have decided that such right is legal in its nature and not equitable.

The decisions in this state are numerous and positive that if the right of the complainant is legal and is not clear and undisputed, a preliminary injunction must not issue. Morris and Essex Railroad v. Attorney-General and Prudden, 20 N. J. Eq. (5 C. E. Gr.) 530 (Court of Errors and Appeals, 1869); Stevens v. Paterson and Newark Railroad Co., 20 N. J. Eq. (5 C. E. Gr.) 126 (Chancellor Zabriskie, 1869); Hackensack Improvement Co. v. New Jersey Midland Railway Co., 22 N. J. Eq. (7 C. E. Gr.) 94 (Chancellor Zabriskie, 1871); Citizens Coach Co. v. Camden Horse Railroad Co., 29 N. J. Eq. (2 Stew.) 299 (Court of Errors and Appeals, 1878); Delaware, Lackawanna and Western Railroad Co. v. Central Stockyard, &c., Co., 43 N. J. Eq. (16 Stew.) 77 (Vice-Chancellor Van Fleet, 1887); affirmed, Idem 605; Dodge v. Pennsylvania Railroad Co., 43 N. J. Eq. (16 Stew.) 351 (Vice-Chancellor Van Fleet, 1887); affirmed, 45 N. J. Eq. (18 Stew.) 366; Pennsylvania Railroad Co. v. National Docks, &c., Railway Co., 53 N. J. Eq. (8 Dick.) 178 (Court of Errors and Appeals, 1895).

Can it be said that the legal right of the complainants in this ease is clear ?

I understand that what is meant by this rule is not that the precise question ^has ever been settled by the courts of law of this state, but that the precise principle has been thus settled.

The broad general principle has undoubtedly been settled in this state that common carriers are under a legal duty to serve the public, and in cases where, under their charters or under the statutes, a duty is manifested, the courts will compel them to perform such duty. New York and Greenwood Lake Railroad Co. v. Montclair, 47 N. J. Eq. (2 Dick.) 591 (Court of Errors and Appeals, 1890); City of Bridgeton v. Bridgeton and Millville Traction Co., 62 N. J. Law (33 Vr.) 592 (Supreme Court, 1898).

But the complainants in this ease must go much further than this, and must demonstrate that the courts in this state have established the principle that at common law and in default of legislation a court of law will hold it to be the duty of a common carrier to locate stations at such points as the court shall determine, or at least not to discontinue stations at points where the court shall determine that they should remain. The complainants must show that our courts have established a principle which does not stop short of holding that the whole matter of regulating the method, manner, kind and quantity of service that common carriers shall render the public has, in cases in which the legislature has made no provision, been committed to the courts for determination and decision.

I am clearly of opinion that the principle contended for by the complainants must have the scope above indicated, if such principle exists at all.

No cases in New Jersey holding any such principle have been cited to me, nor have I found any.

I cannot see upon what ground a court may logically exert power to compel railroads to stop at certain places unless the court holds that it has power in every instance to determine, as between the public and the corporation, what tire corporation must do to fulfill its legal duty to the public. If the discretion of the directors with respect to these unregulated matters has not been controlled or hampered by statute or charter, it seems to me that the court must either hold that such discretion is reviewable by the courts in every instance or that it is not reviewable at all.

Courts will compel the completion of a road if the charter clearly imposes that duty upon the company. They will also compel the operation of the road, and any other clear duty enjoined upon the corporation. Spell. Inj. & Extr. Rem. (2d ed.) p. 1377 1593 et seq.; see also note to L. R. A. 564.

The strongest argument which the complainants could malee would be founded upon the decisions and opinions of the supreme court of the United States in the so-called “Granger Cases," beginning with Munn v. Illinois, 94 U. S. 113; 24 L. Ed. 77. A long and instructive note, with all the subsequent decisions, will be found in 9 Rose’s Notes on U. S. Reports, p. 21. From what is said by the court in the Munn Case, one might be led to conclude that the court was the proper power to determine the measure of duty of common carriers even where there was no statutory or charter provision in respect to the subject-matter. But in subsequent cases in the same court it clearly appears that such was not the opinion of the court, and it did not so decide when that precise question and other analogous questions were raised and determined. Texas and Pacific Railway Co. v. Marshall, 136 U. S. 393; 34 L. Ed. 385; Northern Pacific Railroad Co. v. Washington, ex rel. Dustin, 142 U. S. 492; 35 L. Ed. 1092; Jones v. Newport News, &c., Co., 65 Fed. Rep. 738; 31 U. S. App. 92; Cleveland, Cincinnati, Chicago and St. Louis Railway Co. v. People, 177 U. S. 514; 44 L. Ed. 868; Lake Shore and Michigan Southern Railway Co. v. Ohio, 173 U. S. 285; 43 L. Ed. 702; Inter-State Commerce Commission v. Cincinnati, New Orleans and Texas Pacific Railway Co., 162 U. S. 184; 40 L. Ed. 935; 167 U. S. 479; 42 L. Ed. 243.

In some jurisdictions there seems to be an inclination, in default of positive legislation, to draw to the court power to regulate and enforce the duties of common carriers in these unregulated matters. State v. Republican Valley Railroad Co., 17 Neb. 647; State, ex rel. Grinsfelder, v. Spokane, &c., Railway Co. (Wash.), 19 Wash. 518; 41 L. R. A. 515; Railroad Commissioners v. P. & O. C. R. R. Co., 63 Me. 269; 18 Am. Rep. 208; State v. H. & N. H. R. R. Co., 29 Conn. 538; Concord and Montreal Railroad v. Boston and Maine Railroad, 67 N. H. 464; 41 Atl. Rep. 263.

In Illinois the courts have not been consistent, in my view. In some eases they have held that, although the subject was not regulated by charter or statute, the court had power to determine what the company should do and enforce its determination, while in other cases, which I cannot distinguish, they have held that it was entirely beyond the power of the court and must be left either to the discretion of the directors or must be remedied by legislation. Ohio and Mississippi Railway Co. v. People, 120 Ill. 200; People, ex rel. Hunt, v. C. & A. R. Co., 130 Ill. 175; 152 Ill. 230; 26 L. R. A. 224; People, ex rel. Cantrell, v. St. L., &c., R. Co., 176 Ill. 512; 35 L. R. A. 656.

A territorial court in Washington (Northern Pacific Railway Co. v. Territory, 3 Wash. T. 303) affirmed the power of the court, hut this case was reversed in the United States supreme court. Northern Pacific Railroad Co. v. Washington Territory, ex rel. Dustin, 142 U. S. 492; 35 L. Ed. 1092.

In other jurisdictions an opposite view is taken, and the power or authority of the court is denied. Northern Pacific Railway Co. v. Territory, ex rel. Dustin, supra; Texas and Pacific Railroad Co. v. Marshall, 136 U. S. 393; 34 L. Ed. 385; State, ex rel. Knight, v. Helena P. & L. Co. (Montana), 44 L. R. A. 692; People v. Albany and Vermont Railway Co., 24 N. Y. 261; People v. New York, Lake Erie and Western Railroad Co., 104 N. Y. 58; 21 Lawy. Ed. 784 (see note); People v. Brooklyn Heights Railroad Co., 172 N. Y. 90; 35 Lawy. Ed. 304 (see note to this case); Florida Central, &c., Railroad Co. v. Florida, 20 L. R. A. 419; San Antonio Street Railway Co. v. Texas, 35 L. R. A. 662; State, ex rel. Smart, v. Kansas City, &c., Railroad Co., 51 La. Ann. 205; 25 So. 129; Jones v. Newport News, &c., Co., 65 Fed. Rep. 738; 31 U. S. App. 92; Commonwealth v. Fitchburg Railroad Co., 78 Mass. 180; Whiting v. Sheboygan, &c., Railroad Co., 25 Wis. 167; 3 Am. Rep. 47.

It therefore is evident that it has not been settled at law that the complainants havé the right they claim, and certainly it has not been settled that such right is clear and undisputed.

2. The complainants contend that irreparable injury will ensue if the preliminary mandatory injunction is not issued, and there is considerable force in the argument that harm which cannot be repaired will certainly happen to this community if it does not continue to have reasonable railroad facilities.

•The company insists that it has and will continue to have reasonable railroad facilities because of tire existence of the two stations nearest Hohokus, the one at Undercliff and that at W aldwiek.

There is no village at the station of Hohokus, and the people who use that station dwell, as it were, on the rim of the arc of a circle which radiates towards the station, and the other, adjacent stations can be reached by them with varying degrees of convenience or inconvenience. Were there no other obstacle in the way of the complainants, I should be inclined to hold that the injury was shown to be sufficiently irreparable to authorize the issuance of the injunction, in view of the slight inconvenience to the defendant in continuing the operation of the road as heretofore. But in view of my decision upon other points of the case, I do not reach any decision upon this point.

3. My conclusion with respect to the unsettled principle upon which the complainants must rest their right, and my conclusion next to be stated with respect to the remedy, if any, which the complainants have, makes it unnecessary for me to determine whether this would otherwise be a proper case for a preliminary mandatory injunction.

But apart from the principle that such relief is, under our cases, granted only in rare instances and then apparently only to remove obstructions to easements and the like, it would seem that there is no authority for holding a case in equity until the rights can be settled at law, except where there is necessity for equitable relief after the common law courts shall have settled the legal rights. Outcalt v. Helme Company, 42 N. J. Eq. (15 Stew.) 665 (at p. 676) (Court of Errors and Appeals, 1887).

There is no such need in this suit, because the ultimate relief at law and in equity is identical.

4. If the right which the complainants claim exists it is based upon the duty of the defendant, and this duty is enforceable by a court of law by mandamus. Whether the existence of the remedy by mandamus is effectual to disentitle the complainants to remedy in equity by injunction is the next consideration.

Since the final relief in either forum is identical, can it be said that in this case the remedy at law is not adequate ?

I have pointed out in an earlier part of this opinion that in many eases the complainants’ remedy would be entirely unavailing and useless if it could only be secured at the hands of a court of law which has not power to. protect the situation pending the final decision. A remedy hardly seems to me to be entitled to be termed “adequate” if at the time that it is applied the rights of the complainant have so suffered that there may bo nothing of value left to him in the remedy. But this feature of the inadequacy of the legal remedy, owing to the lack of power in the common law courts to protect the situation pending decision, has been directly passed upon by our court of errors and appeals in an analogous case.

In the case of West Jersey Title and Guaranty Co. v. Barber, 49 N. J. Eq. (4 Dick.) 475 (Vice-Chancellor Pitney, 1892), in the court of chancery, the vice-chancellor pointed out that the legal right of the complainant, which was found to be clear, called for immediate protection, if protection was to be of any avail. In that case the complainant was one whose business it was to search titles. The entire income-producing value of the business depended upon its ability to obtain daily access to the records for the purpose of informing its clients of the state of such records. An interruption of this right must have caused irreparable injury, and the delay incident to appealing by mandamus to a law court must have resulted in practically putting tire complainant out of business for the months which elapsed before the court could enforce upon the defendant the duty he owed to the complainant. A court of equity, by compelling the official to render to the complainant the legal duty which it found he owed the complainant, gave adequate remedy; the finding by the common law court, after months of delay, that the complainant had, at the time that he applied, a right to inspect the records, and the issuance' of a mandamus to enforce that right, afforded almost no remedy of any value to the complainant. Eor these reasons the vice-chancellor held that mandamus was not an adequate remedy, and that the case called for and was a proper case in which to issue a mandatory injunction. The court of errors and appeals reversed this decree, and held that mandamus was the proper remedy, and that there was not therefore any remedy by mandatory injunction. Barber v. West Jersey Title and Guaranty Co., 53 N. J. Eq. (8 Dick.) 158 (Court of Errors and Appeals, 1895).

In the case of Atwater v. Delaware, Lackawanna and Western Railroad Co., 48 N. J. Law (19 Vr.) 55 (Supreme Court, 1886), the plaintiff was refused a commutation ticket for the particular month for which he applied, and many months after-wards the court held that the company should have issued the ticket, and granted a mamdamus that it should do so.

If mandamus was the proper remedy in this case, and such remedy is exclusive of a mandatory injunction, it will be seen that here again it is settled that, however apparently inadequate the remedy by mandamus is, it is the only remedy to enforce a clear legal duty of a corporate or official quality. And it was so held in the case of New York and Greenwood Lake Railway Co. v. Montclair, 47 N. J. Eq. (2 Dick.) 591 (Court of Errors and Appeals, 1890).

In the case of Bridgeton v. Bridgeton and Millville Traction Co., 62 N. J. Law (33 Vr.) 592 (Supreme Court, 1898), the supreme court held that the public duty which a street railroad company owed to operate a portion of its road, which it had previously operated and which it had abandoned, was enforceable “only” by mandamus.

And in the early case of Rogers Locomotive and Machine Works v. Erie Railway Co., 20 N. J. Eq. (5 C. E. Gr.) 379 (Chancellor Zabriskie, 1869), it was held that an injunction would not be granted to compel a common carrier to transport goods at the rates fixed by law. I presume that this was upon -the ground that mandamus was the proper remedy.

The courts of New York likewise deny the power of a court of equity to interfere by injunction. People v. Albany and Vermont Railway Co., 24 N. Y. 261.

Under the law as I find it I am constrained to deny the application for a preliminary injunction, and will so advise.


source: Caselaw Access Project

author: Gabeisoit, Y. C.

license: Public Domain

text:
    Gustav W. Lembeck v. Jarvis Terminal Cold Storage Company.
    [Filed May 13th, 1905.]
    Where a mortgagee of the property of a corporation released her mortgage in consideration of a promise to issue to her certain bonds of the company, and later, on the statement of a representative of the corporation that the bonds were not at that time available, accepted in lieu of bonds the company’s stock, and retained it without objection for two years, during which time the corporation incurred debts to others on the faith of her not being a bondholder, she was estopped, on the corporation becoming insolvent before her objection was raised, to claim a priority over those who had extended credit to the corporation without knowledge of the transaction.
    The main case was a proceeding under the Corporation act to have the defendant, corporation declared insolvent, and to have an injunction issued against it and a receiver appointed for it.
    The result of this suit was, among other things, the appointment of receivers on the 28th day of March, 1904.
    The property of the defendant corporation was encumbered by mortgage and other liens, and was, by_ order of this court, dated May 23d, 1904-, ordered to be spld by the receivers free and clear of all liens.
    It was so sold, and by an order dated October 17th, 1904, it was ascertained and ordered that the net amount remaining in the hands of the receivers, namely $7,668.28, should be paid into this-court, subject to the same liens and equities as before the sale.
    On the 5th of December, 1904-, Nathalie Jarvis filed her petition in this cause, praying that she might receive a portion of this money, and to that petition answers and cross-petitions have been filed by the Commercial Trust Company of New Jersey, the trustee under one of the mortgages, by John Alvin Young and Richard Irvin, by the Union Terminal Cold Storage Company and by the Erie Railroad Company.
    The case was heard upon the pleadings and proofs taken in open court.

      Messrs. Grey, McDermott & Enright. (with whom was Mr. Benjamin F. Tusha of the Few York bar), for Nathalie Jarvis.

      Mr. William Brmlcerhoff and Mr. Willard G. Fish, for the Commercial Trust Company of Few Jersey.

      Mr. Pierre F. Gooh (with whom was Mr. Alfred A. Wheat of the Few York bar), for John Alvin Young and Richard Irvin and the Union Terminal Cold Storage Company.

      Messrs. Collins & Gorlin, for the Erie Railroad Company.
   Gabeisoit, Y. C.

It will be necessary to state facts before it can- be made to appear what the issues are and what conclusion is reached respecting them.

The Jarvis Terminal Cold Storage Company was a corporation of this state organized on the 2d day of October, 1902.

It was promoted by Robert M. Jarvis. Prior to its incorporation he held an option upon land owned by Nathalie Jarvis, who was the widow of the nephew of Robert M. Jarvis. This option provided that he might purchase the property for $22,-500. After the incorporation of the company it took over this option and paid $8,000 in cash and gave a purchase-money mortgage to- Nathalie Jarvis for $14,000, dated December 1st, 1902, due December 1st, 1903. It does not appear what became of the difference between this cash payment plus the mortgage and the $22,500 agreed to be paid.

All of Mrs. Jarvis’ business, with this company at least, was transacted by a Few York stockbroker named Samuel M. Schafer.

Almost immediately after the conveyance and mortgaging of this property, as above described, the company expressed its desire to have the property freed from the lien of her mortgage so that a trust mortgage might be placed upon this property to include the real estate of which it then consisted and the largo storage plant to be erected thereon, this trust mortgage to be for $150,000.

In pursuance of this purpose Robert M. Jarvis, on behalf of the company, negotiated with Mr. Schafer, who acted for Mrs. Nathalie Jarvis. Mr. Schafer’s testimony is that in these negotiations, which were held in Januaiy of 1903, he reached an agreement with Mr. Jarvis by which Schafer agreed that he would release or satisfy the mortgage held by Mrs. Jarvis upon the real estate for $14,000, of which $7,000 was to be paid in cash and the other $7,000 was to he represented by a note of the company at sixty days, secured by $7,000 of the bonds out of the contemplated issue of $150,000 of bonds to be secured by the trust mortgage before mentioned.

While the other parties to this proceeding seek to cast doubt upon this version of the agreement, there does not appear to be any good reason for refusing to believe the only testimony that there is in the case concerning it.

The bargain, as stated above, was testified to by Samuel M. Schafer, and is to some extent corroborated by his son’s testimony and by letters of Robert M. Jarvis written to Mr. Schafer after the date of the negotiations, the contents of which letters concern the terms of the negotiation.

This testimony was all given upon the first day of the trial of this suit and while Mr. Robert M. Jarvis was in the courtroom. Subsequently Mr. Jarvis was sworn, was examined at length, left the stand, and, after other witnesses had been sworn, was recalled to tire stand and examined again.

The court, upon Mr. Jarvis requesting leave to depart, stated that he should remain because it had been suggested by other counsel that they desired to' call him.

After this and at the afternoon session, Mr. Jarvis returned and was again put upon the stand and examined.

At the close of the first day’s session counsel announced that all testimony was in excepting that of an officer of the United States Mortgage and Trust Company, whose testimony they desired to take the next morning, and this was agreed to.

The next morning this officer was produced and sworn, and after his testimony had been given, counsel for the Erie Railroad Company desired again to examine Mr. Jarvis, this time concerning the dealings with Mr. Schafer. At that time the petitioner had none of his witnesses present, and it seemed then, and seems now, to the court that it would have been unjust and improper to permit Mr. Jarvis to testify then, after the close of the case and in the absence of those whom the petitioner had had present to testify concerning this subject-matter. And this was especially so because the Erie Railroad Company had produced Mr. Jarvis as its own witness on the preceding day and had examined him. So that it is the fact that the testimony of Schafer and his son is uncontradicted.

These negotiations, which took place, as has been before stated, in January of 1903, culminated in the sending by Schafer to Mrs. Jarvis, who had gone to Europe, of a satisfaction piece of the mortgage, to be executed by her, and, upon tire return of that instrument, his delivering the same to Mr. Jarvis.

There is no clear testimony as to when this delivery took place. It was either before the 19th day of February, 1903, or on that date.

On that date Mr. Jarvis delivered to Mr. Schafer, for Mrs. Jarvis, a note of $7,000, executed in the name of the company by Jarvis and his son, the president and treasurer of the company, payable in sixty days, and seventy shares of the capital stock of the company. The note recites that these seventy shares are deposited as collateral with it.

Mr. Schafer testifies that Mr. Jarvis explained to him that the bonds of the company were not yet available, and hence he could not deliver them as agreed, and that he delivered the stock as a temporary collateral.

This note was renewed as it became due from time to time through seven renewals. These renewals took place at intervals of sixty days up to August 19th, 1903, and thereafter at intervals of thirty clays, the last renewal note being dated November 23d, 1903.

No other collateral was ever substituted for the stock, and on the 8th day of June, 1904, there was filed with the receivers a claim on behalf of Mrs. Jarvis, sworn to by her, setting forth her claim. She states therein that

“Belying upon these representations, I consented to discharge said mortgage and to satisfy same of record, and to take in lieu thereof the sum of seven thousand dollars cash and a note of seven thousand dollars, dated February 19, 1903, payable in sixty days, and bearing interest at the rate of five per cent, per annum, with seventy shares of the stock of defendant as collateral, which note given with the said collateral X still hold, and no part of said note has been paid.”

She thereon claimed to be preferred upon the ground that the representations were false, and that she was entitled to be paid before any other creditors excepting the bondholders, whose claims she admitted to the amount actually paid by them for their bonds.

As this claim was filed out of time, application was made to this court, and by order, dated July 18th, 1904, leave was given to her to file the claim as if within time.

The trust mortgage, of which mention has been made, was dated the 2d day of Februaiy, 1903, and was made by the Jarvis compairy to the Commercial Trust Company, as trustee; was for the amount of $150,000, securing one hundred and fifty bonds of $1,000 e‘ach; was proved on February 20th, 1903, and was recorded on the 21st day of February, 1903, at 11:59 a. si.

At exactly the same time and date there was also recorded the satisfaction piece executed by Nathalie Jarvis, as aforesaid, which was dated February 5th, 1903.

Hnder the provisions of the trust mortgage, $125,000 of bonds,, or one hundred and twenty-five bonds, were to be executed, certified by the trustee and delivered to the company for the purpose of building the plant. This was done, and these bonds, as appears from the proofs, were taken by persons who had subscribed to them even before their authorization, and who paid for them at the rate of eighty-eight cents on the dollar.

Hnder this mortgage the remaining twenty-five bonds could be used by the company for additions and extensions, and provision is made for a certain certificate to be executed by the company and sworn to and delivered to the trustee, who must then certify the bonds.

This was done about the 22d day of December, 1903, and these additional twenty-five bonds were issued and delivered to the company.

On the 16th of December, 1903, as a result of negotiations carried on between Mr. Jarvis for the company and representatives of the Erie Railroad Company, a mortgage was executed by the Jarvis company to the Erie Railroad Company for $16,500. This mortgage is made expressly subject to the trust mortgage of $150,000, whether all the bonds were at that time issued or not.

It appears that there were unsatisfied obligations of the Jarvis company arising out of its building and equipping its plant; that money was needed to pay these, and that it was computed how much would be required to pay the existing bills of this nature, and after it was ascertained that $16,500 was the amount required for this purpose, the Erie Railroad Company agreed to advance the money to pay these bills, provided it was secured by the mortgage in question.

The $25,000 of bonds, issued under the addition and extension clause as above described, were taken by Mr. Jarvis to the United States Mortgage and Trust Company of Now York for the purpose, Mr. Jarvis says, of having that company either sell the same, buy them or make a loan upon them.

At that time the relations between the Jarvis company and the trust company were these:' The trust company had advanced, on November 10th and November 20th, 1903, to the Jarvis company, in sums of $10,000 each, a total of $20,000. For this it had received a note of the Jarvis company for $20,000, dated November 10th, 1903, secured by the subscription agreement of those who had agreed to subscribe at par for stock of the Jarvis company.

All told, the United States Mortgage and Trust Company had received from the subscribers to stock the sum of $4,500, leaving $15,500 still due upon this note.

At the United States Mortgage and Trust Compaq, on the date in question, when Mr. Jarvis went there with the twenty-five bonds as aforesaid, he saw Mr. Cumming, the vice-president of the company. Mr. Jarvis testifies that he stated to Mr. Cumming the object of his visit and produced the bonds, and that Mr. Cumming said that he would submit the matter to his committee and let Mr. Jarvis know what the result was.

Subsequently Mr. Jarvis and Mr. Cumming met, and Mr. Cumming informed Mr. Jarvis that since Mr. Jarvis had sent to the trust company and gotten the subscription agreement (it appears for the purpose of having additional names subscribed), and had not returned it, that the trust company would keep the bonds as additional security to the loan.

Jarvis protested, but the company retained the bonds.

'Some time after this, by agreement between Jarvis and the trust company, the latter surrendered five of these bonds to the Crane company, a creditor of the Jarvis company, which first-named company took them as collateral for its debt and after-wards sold the same at auction, after notice, and realized some $2,500 thereon.

Subsequently the executive committee of the Jarvis company —which committee consisted of Mr. Case, Mr. Bumsted and Mr. Jarvis—went to the office of the United States Mortgage and Trust Company and discussed the matter with Mr. Cumming. They protested against the right of the trust company to retain these bonds as additional security, and Mr. Case testifies that they agreed with the trust company to put up $12,500 of their stock with the trust company if that company would, in addition to what it had already advanced, advance sufficient money to enable the Jarvis company to pay its interest on the $125,000 of bonds. The trust company did so advance the money, and it was used to pay the interest due February 1st, 1904.

The total amount of overdraft, including the money used to pay this interest, was in the neighborhood of $4,600.

I think it clear that the net result of the various happenings with respect to these bonds was that it was understood and agreed that the trust company might keep the same as additional collateral to the existing indebtedness if it would advance the additional money needed for coupon interest. This it did, as heretofore stated.

The mortgage company retained the bonds down to the time that Young and Irvin acquired the same from it.

On the 28th of March, 1904, the proceedings in insolvency in this suit were commenced.

In May of that year the receivers reported to the court and requested leave to sell the property, and on the 23d of May, 1904, an order was made for the sale of the property free and clear of the liens. The liens, as at that time appeared, were the $150,000 trust mortgage, the $16,500 Erie railroad mortgage and nine mechanics’ liens which had been filed against the propert)", aggregating $45,000.

In this order of May 23d there was a minimum limit placed upon the property of $190,000.

At the sale, no bid arising to the minimum limit being made, the receivers reported that fact to the court, and on the 20th of June, 1904, the receivers were ordered to sell as aforesaid without restriction as to price.

It was provided in the order of Juno 20th, 1904, that the purchaser must agree to pay of the purchase price at least $25,000 in cash, and that he might secure the pa3unent of the balance by depositing with the receivers bonds and mechanics’ liens to the amount stated in that order.

On the 26th of June, 1904, the sale was had, and the property was purchased by Daniel E. Cleary, Charles E. Cassidy and Gustav W. Lembeck, a committee of the bondholders, for $135,-000. This sale was 'confirmed by an order dated July 5th, 1904.

On the 26th of Juty, 1904, the purchasers deposited with the receivers $75,000 in bonds, and enough cash, together with that which they had already paid, to make $25,000 in cash.

On the 26th of August, 1904, John Alvin Young and Richard Irvin made an agreement with Cleary, Cassidy and Lembeck by which it was agreed that they should pay down $10,000— should thereafter pay $16,989.33 in cash and any excess of expenditures over receipts in the current running of the business, and also accrued interest on the bonds from February, 1904, to September 1st, 1904, and give in exchange, bond for bond, new bonds in the new company called the Union Terminal Cold Storage Company.

Eor this consideration the purchasers at the sale assigned their bid and the bonds deposited with the committee and all their rights in the premises.

On the 13th of September, 1904, Young and Irvin petitioned this court that a deed from the receivers might be made to the Union Terminal Cold Storage Company.

On the 19th of September, 1904, an order was made, consented to by all counsel present, among whom was counsel for Mrs. Jarvis. In this order it is recited that Young and Irvin-held all of the one hundred and fifty bonds and had assignments of all of the mechanics’ claims and> liens aggregating $45,000, and that such bonds, liens and claims were valid and prior liens at least to the extent of tire unpaid part of the purchase-money, namely, $110,000, and might be turned in as such payment.

On the 8th of October, 1904, the final report of the receivers was filed and an order to show cause granted. In this report the amount due upon the one hundred and twenty-five bonds sold for cash and the five pledged with the Crane company is adjudicated and determined to be $135,129.32. The receivers did not allow the claim on the twenty bonds held by the United States Mortgage and Trust Company.

With respect to the claim of Nathalie Jarvis, they adjudicate it to be a general unpreferred claim. No appeal was taken by her from this determination of the receivers.

On the 17th of October, 1904, a hearing was had at which counsel for Nathalie Jarvis was present, the final report was confirmed and certain payments were authorized to be made out of the monej^s in hand and the balance ordered paid into court. It. was ordered that nothing in the receivers’ report or in this order should be deemed to be an adjudication or determination of the rights of the Commercial Trust Company, trustee, Young, Irvin, the ¿Erie Railroad Company and Nathalie Jarvis in the balance, but that they have leave to apply by petition or otherwise to determine their rights in said fund.

It was not until after this, and on December 5th, 1904, in her petition with respect to the fund, that Mrs. Jarvis ever disclosed her claim to be a bondholder or to be considered as a bondholder.

The net amount deposited by the receivers under this order was, as has been before stated, $7,668.28.

Uathalie Jarvis claims that by reason of the negotiations between her agent, Schafer, and Jarvis, an agreement was reached that she should have, as collateral security for the $7,000 unpaid to her, seven of the bonds of this $150,000 issue, and that she is therefore entitled now to be considered as having seven of such bonds and to receive the pro rata distribution thereon.

The Erie Railroad Company, the holder of the second mortgage, can only succeed in its claim by diminishing the amount to be paid to the bondholders of the first mortgage.

The Union Terminal Cold Storage Company and Young and Irvin claim that they hold the whole $150,000 of these bonds, and also • hold the mechanics’ liens and claims, and that the money in court is insufficient to meet the prior lien of the bonds, even if only one hundred and thirty thereof are adjudged to be issued and outstanding. They therefore insist that Mrs. Jarvis, in view of the circumstances, is estopped now to claim, as against them, any rights as a bondholder.

There is no occasion for the citation of any authorities since the only principle involved is the thoroughly settled one of estoppel, and the sole question is whether the facts call for the application of that principle.

I find with respect to Mrs. Jarvis, that whatever may be the proper determination with regard to her claim that she was promised seven.of the bonds, and even assuming that she might, by acting promptly, have compelled the company to issue the same to her, she is now estopped, as against the parties herein, to claim to be a bondholder to the extent of seven bonds, or to be treated as if she was such holder.

My reasons for this, briefly stated, are that the bargain, assuming it to be as she now insists it was, was made in February of 1903, and there is no pretence on her part that it was disclosed or stated or insisted upon by her until she filed the petition. herein on the 5th of December, 1904. During that time, as has been stated more in detail above, the new issue of one hundred and' fifty bonds was made, one hundred and twenty-five of such bonds were sold to subscribers, five of such bonds were placed with the Crane company and twenty with the United States Mortgage and Trust Company. These parties either had an absolute right to hold these bonds as collateral security for past advances or for future advances, or, in any event, were so situated with respect to them that they could and did retain possession of the bonds until they were satisfied in some way and were by some consideration induced to relinquish them. Mechanics’ liens, aggregating $45,000, were filed against the real estate, and, either for their face or for little less than their face value, have been paid for and acquired by other parties.

The Erie Bailroad Company advanced its money during'this period.

The persons who bid at the sale and the reorganizers who purchased their bid and took their place had each the right, in any view, to be bound only by that which an examination of the proceedings would show.

Such an examination would show nothing with respect to the claim of Nathalie Jarvis to' bonds. Her filed claim, dated June 6th, 1903, stated the bargain—that she was to have stock and took that as collateral for the money owed her by the company.

I think that the parties in interest had a right to rest secure, with respect to the existing encumbrances, upon anyone of various hypotheses, all of which were exclusive of Mrs. Jarvis as a bondholder.

They had a right either to assume that the only bondholders were those who held tire $125,000 of bonds first issued; or those, plus the $5,000 pledged to the Crane company; or those, plus the $20,000 lodged with the United States Mortgage and Trust Company.

Since they advanced their money and irrevocably changed their position by purchasing all of tírese bonds, and by paying the mechanics’ liens, and by getting rid of the obligations with the United States Mortgage and Trust Company and with Crane & Company, I can see no- equitable view which entitles Mrs. Jarvis after nearly two years of silence, to claim now that she was a bondholder or was entitled to be treated as such.

With Mrs. Jarvis’- claim out of the way, there is no necessity for a specific holding as to the other parties. Because I find that the surplus in court is not sufficient to pay to Irvin and Young or the Union Terminal Cold Storage Company, whichever now owns tire same, the prior liens due them.

The Erie Railroad Company can take nothing because the prior liens to it will not be paid in full, and there is therefore nothing to which its lien attaches.

Hence I find that the sum in court is payable to the Union Terminal Cold Storage Company, or to Young and Irvin, and that the other parties are without claim thereto, excepting the. Commercial Trust Company. That company is entitled to be paid certain sums out of the fund as follows:

Eight hundred and fourteen dollars and twenty-five cents, the aggregate of insurance premiums paid by it as trustee on the mortgaged premises, with interest from the date of payment.

Three hundred dollars compensation fox acting as trustee under the mortgage in accordance with the provision thereof allowing compensation.

One hundred and fifty dollars for certification of bonds, which is a-prior lien under the mortgage.

Two hundred dollars for counsel fee paid by the trust company to its counsel, and made a prior lien in accordance with the terms of the mortgage.

I will advise a decree in accordance with these conclusions.


author: Magee, Ordinary.

text:
    Lawrence A. Van Riper, appellant, v. Jane E. Van Riper et al., respondents.
    [Submitted July 12th, 1904.
    Decided November 14th, 1904.]
    1. Evidence of testator’s widow and son, who caveated against the probate of testator’s will, that at the time of executing- the will testator had become weakened by age and disease, and at times lacked the degree of mental force previously possessed by him, was insufficient to overcome proof showing- testamentary capacity given by those present when the will was signed and by the testamentary witnesses.

      2. Where i estator during his life had managed his own business, accumulating an estate of considerable value, and, though he had been ill for nearly a month, went to the office of his attorney and there consulted concerning a will which had been drawn for him in accordance with previous instructions, after which the will was executed in the presence of witnesses, who testified to testator’s capacity, evidence of his physician that testator was erratic and impulsive, and at some times more rational than at others, but at no time was he capable of any really consecutive, methodical thought or arrangement, but went by fits and starts in all his business, was insufficient to rebut such proof of capacity.
    On appeal from Bergen county orphans court from a decree admitting a will to probate.

      Mr. Robert R. Van Hovenberg and Mr. Michael Dunn, for the appellant.

      Mr. William B. Gov/rley, for the respondents.
   Magee, Ordinary.

This appeal seeks a reversal of a decree of the Bergen county orphans court admitting to probate a paper-writing as the last will and testament of ITartman Yan Riper, deceased, and issuing letters testamentary thereon. The sole ground presented by the argument in this court for the reversal of the decree is that the testator did not possess testamentary capacity at the time he executed the paper in question. The decided weight of evidence is that instructions for the drawing of a last will and testament were given by testator prior to November, 1902, and that a draft of a will in accordance with such instructions was made and discussed by testator with his legal adviser, who made the draft, and Mr. George S. Hilton, whom the testator had selected to be one of the executors and trustees. At the discussion tire terms of the will were definitely settled, with the exception of some details in respect to the street numbers of properties intended to be disposed of. On the 3d of November, 1902, testator became ill, and continued to be so at least until November 21st. He was not, however, confined to tire house for the whole period, but did go out, although contrary to the advice of his physician. On the 20th of November he came to the office of his legal adviser, who had mqde a typewritten will upon the lines of the draft copy previously discussed and considered. They went to the office of Mr. Hilton, where the typewritten cop3r was read to him, and he expressed his satisfaction with its provisions. It was then executed in the precise manner required by the statute.

Upon the contention made, it is obvious that the question is as to the testamentary capacity on November 20th, 1902. The evidence of those who were present at the interview at Mr. Hilton’s office and of the testamentary witnesses affords proof of the possession of testamentary capacity by the deceased, according to the doctrines settled in this state upon that subject. The claim is that there is sufficient proof to overcome the weight of that evidence. Reliance is placed upon evidence given by his widow and by his son, who caveated against the probate. At the most, this evidence showed that the testator had become weakened by age and disease, and at times had lacked the degree of mental force previously possessed by him. Such evidence, however, is insufficient to overcome the testimony above alluded to in respect to the condition of deceased at the time of the execution of the will. Reliance is further placed by the appellant upon the testimony of the physician who attended him during the sickness between November 3d and November 21st, 1902. The gist of that evidence, in my judgment, is expressed in the answer to the following question:

“During that time that you were visiting him from November 3d .to November 21st, was he, in your judgment, in such a condition of mind that he could rationally and intelligently and understanding^ dispose of a large estate, consisting of different pieces of property, bonds and mortgages, and other securities, among different persons, who were his relatives ?”

To which question the following answer was made:

“His condition during all that period was very much as I have seen him in other times. He was erratic and impulsive, and sometimes more rational than others; but at no time was Mr. Van Riper capable of any really consecutive, methodical thought and arrangement. He went by fits and starts in all his business, I understand.”

The opinion of this witness as to his capacity, if designed to be applicable only to the period between November 3d and November 21st, is so opposed to evidence of his condition and conduct on November 20th, to which I have alluded, as not to impress me with the conviction that the deceased lacked capacity to understand and to intelligently declare his intentions respecting the disposition of his property on November 20th, which intentions had been embodied in previous instructions and contained in the previous draft made and discussed some time previous to November 3d. If the witness designed his opinion to apply to deceased during the period of his whole life, it is opposed to a great weight of evidence and the fact that deceased by his management of his own business had accumulated an estate of considerable value.

I have reviewed the evidence with care and am compelled to the conclusion that the court below was required thereby to admit the will to probate. The decree will therefore be affirmed.


author: Magie, Ordinary.

text:
    In the matter of the accounting of Margaret Doland, guardian, &c.
    [Argued December 6th, 1904.
    Decided February 7th, 1905.]
    An order of an orphans court directing a writ of attachment to issue fov an alleged contempt, made after hearing on an order to show cause, is not appealable.
    On motion to dismiss appeal.

      Mr. Freeman Woodbridge, for the motion.

      Mr. Willard F. Voorhees, contra.

   Magie, Ordinary.

Motion is made to dismiss an appeal taken from an order of the orphans court of Middlesex county.

Tlie order appealed from, after reciting the terms of a previous order of said court, commanding appellant as general guardian of two deceased infants to pay over certain moneys to Michael Cahill, one of the heirs-at-law and next of kin of said infants; the issuance of an order to show cause why appellant should not be attached for contempt for refusing to obey said order; the hearing by said court on the evidence of witnesses and the argument of counsel and the determination of the court that appellant had not obeyed the order to pay although served with a copy thereof, directed that appellant should be attached for contempt and that a writ of attachment should forthwith issue.

The motion to dismiss is urged upon the ground that the order is not appealable.

It is obvious that the appeal is not taken under the provisions of the “Act providing for the review of convictions and judgments for contempt of court,” approved April 17th, 1884. 2 Gen. Stat. 2600. The order attacked is not a conviction or a judgment for contempt from which an appeal may be taken under that act. It is only an order for process in the ordinary course of practice upon a charge of contempt, made after hearing on an order to show cause, and when the accused is brought in by the process ordered interrogatories are to be exhibited, and, when answered, the judgment of the court is to be pronounced. In re Cheeseman, 49 N. J. Law (20 Vr.) 142. The order questioned is, therefore, interlocutory only.

The question presented is whether the order is one from which an appeal is given to the prerogative court by the terms of the Orphans Court act of 1898, section 204. P. L. 1898 p. 793. Such an appeal is given to any person aggrieved by an order of an orphans court.

An appeal to the court of errors and appeals is given by the constitution and by statute from any order or decree of the court of chancery to any person aggrieved thereby. In Coryell v. Holcombe, 9 N. J. Eq. (1 Stock.) 650, the court of errors and appeals had under consideration an appeal from an order of the chancellor- directing an attachment to issue against parties who had refused to obey an order for the payment of money. It was determined that such an order was only to bring in the parties to answer for an alleged contempt and that the parties were not aggrieved thereby so as to maintain an appeal. The appeal was dismissed.

The language of the act giving an appeal to this court from an order of the orphans court of whatever nature is in substantial agreement with that used to confer jurisdiction on the court of errors and appeals to entertain appeals from any order or decree of the court of chancery. In both cases the right to appeal is given to persons aggrieved. If an order by the chancellor for an attachment did not aggrieve the parties against whom it was directed the order of tire orphans court of an identical nature did not aggrieve the present appellant.

In my judgment the order appealed from is not one which may be reviewed on appeal, and the appeal must be dismissed.


text:
    Angelo Podesta, appellant, v. John E. Moody, substituted administrator, respondent.
    [Decided April 4th, 1905.]
    Where an order directed a purchaser of lands at an administrator’s sale to complete the purchase, and also directed the issue of an attachment for contempt on failure to complete the purchase within a given time, the first portion of the order, being appealable, entitled the purchaser to appeal, irrespective of the appealability of the second portion of the order.
    On appeal from Hudson county orphans court.

      Mr. Samuel A. Besson, for the appellant.

      Mr. Leon Albeit, for the respondent.
   Magie, Ordinary.

The motion to dismiss this appeal cannot prevail. The order appealed from contains two distinct adjudications: one, that appellant, as a purchaser of lands at a sale made by a substituted administrator with the will annexed, should complete his purchase within fourteen days from the service of the rule, and the other, that if appellant fail to complete said purchase within the time fixed, that an attachment should issue against him for contempt without further notice.

The first of these adjudications settles the liability of appellant upon his contract to purchase, and directs him to perform the same. It must be assumed from the recitals that this question was decided upon the proofs taken. If aggrieved by the adjudication, the purchaser may challenge its propriety by an appeal.

The second adjudication', which directs the issue of an attachment for contempt for not completing the purchase, if contained in a separate order, made for disobedience to the former order, would probably not be the subject of an appeal. In re Doland, supra, p. 466.

But the combination of the two adjudications in one order cannot deprive a 'person, alleging himself aggrieved by that which fixed his liability on the contract, of his appeal therefrom.

The motion must be denied.


author: Beed, Vice-Ordinary.

text:
    Alfred University, appellant,
      v. William S. Hancock, as comptroller of the State of New Jersey, and George B. Swain, as treasurer of the State of New Jersey, respondents.
    [Decided April 14th, 1900.]
    1. A bequest to a school of learning having academic, collegiate and theological departments open to all of good moral character, there being no charge for instruction in the theological department, and the institution being supported largely by public and private charity, and devoting all its resources to increasing its benefit to the public, is a charitable institution.
    2. The act of 1894, providing for a tax on intestates’ estates, gifts, legacies, devises, and collateral inheritance in certain cases, exempting gifts and bequests to religious, benevolent and charitable institutions and organizations, did not exempt gifts and bequests to charitable institutions located outside the State of New Jersey from such tax.
    3. The supplement of 1898 exempting gifts and bequests to religious institutions, wherever located, from such tax, does not apply to a gift to an educational institution located without the state having academic, collegiate and theological departments, as it is not a religious institution within the meaning of the act.

      Mr. William M. Stillman, for the appellant.

      Mr. Nelson Y. Dungan and Mr. Samuel U. Grey, attorney-general, for the respondents.

      This opinion was omitted from its proper place.—Rep.

   Beed, Vice-Ordinary.

Peter Wooden, a resident of New Jersey, by bis will, left the residue of his estate to Alfred University, an institution located in Allegany county, in the State of New York. The surrogate of Somerset county filed an assessment imposing a tax upon this legacy under the provisions of an act to tax intestates’ estates, gifts, legacies, devises and collateral inheritance in certain cases. P. L. 189^ p. 818. The first section of the act provides that all property which shall pass by bequest, devise or inheritance to any person or persons, or to a body politic or corporate, excepting churches, hospitals and orphan asylums, public libraries, Bible and tract societies, and all religious, benevolent and charitable institutions and organizations, shall be subject to a tax of $5 on every $100.

It is claimed by the appellant that Alfred University is a charitable institution, and so is within the clause excepting such institutions from liability to be taxed.

Alfred University is a school of learning having an academic, a collegiate and theological department. The benefits of the institution are offered to all who are of good moral character. There is no charge for instruction in the theological department, but a moderate charge is made in the other departments for tuition. The corporation has no capital stock and pays no dividends. The institution is principally supported by funds derived from public and private charity, together with tuition fees. Whatever is received is devoted to tire object of sustaining the institution and increasing its benefits to the public by extending and improving its accommodations and diminishing its expenses,

A bequest to such an institution is, in my judgment, a bequest .to a charitable institution. All gifts for the promotion of education are charitable in a legal sense, where the elements of private gain are wanting and where the scheme is, in part, supported by public or private contributions. See cases collected in 5 Encycl. of Law (2d ed.) 929, 930; Taylor v. Bryn Mawr College, 34. N. J. Eq. (7 Stew.) 101.

Conceding the charitable character of the institution, does the exemption apply to institutions 'located without the limits of the State of Yew Jersey?

The overwhelming weight of authority is that where the legislature grants exemption from such a tax to corporations or organizations, it includes in the exemption only domestic corporations and organizations. The collateral inheritance tax of the State of New York (Laws of New York 1887, ch. 713) subjects to its provisions all property which shall pass by will to any body politic or corporate other than societies, corporations and institutions now exempted by law from taxation. It was held that a gift by a resident of New York to Trinity College, located in Connecticut and exempt by the laws of Connecticut from taxation, was not within the exemption clause of the New York act. It was held that the act applied only to those corporations and institutions which were exempt by force of the laws of the State of New York. Catlin v. Trustees of Trinity College, 113 N. Y. 133. In 1890 a subsequent law was passed in New York, to be found in the laws of New York of 1890, chapter 553. The act exempted certain corporations from taxation under the provisions of the Collateral Inheritance Tax act. A resident of New York gave.certain legacies to the Presbyterian Board of Relief, a corporation of the State of Pennsylvania, and the American Board of Missions for Foreign Missions, a Massachusetts corporation, both included within the class of corporations exempt under the New York act as charitable and religious corporations. It was held that they were not included within the exemption clause of the act, because they were corporations and institutions located outside of the State of New York. In re Prime, 136 N. Y. 347. Chief-Justice Andrews, in delivering the opinion of the court of appeals, said: “We are of opinion that a statute of a state granting powers and privileges to corporations must, in the absence of plain indications to the contrary, be held to apply only to corporations created by the state and over which it has the power of visitation and control. Such is the natural interpretation of such legislation in the absence of a contrary intention appearing on the face of the act.

“The legislature, in such cases, is dealing .with its own creations, whose rights and obligations it may limit, define and control. * * * It is the policy of society to encourage benevolence and charity. But it is not the proper function of a state to go outside of its own limits and devote its resources to support the cause of religion, education or missions for the benefit of mankind at large. The argument may have force that the state might consistently, with its proper function, give immunity from taxation to some of the foreign corporations engaged in the work of education or charity. .But however this may be, we are convinced that the statute of 1891 has no application to foreign corporations, and having reached that conclusion, our duty is ended.”

In 1892 an act was passed in New York providing for taxation of inheritances, and reading thus:

“But any property heretofore or hereafter devised or bequeathed to any person who is a bishop, or to any religious corporation, shall be exempt from and not subject to the provisions of this act.”

A resident of-the State of New York divided his residuary estate among certain religious corporations organized and existing under the laws of other states, and it was held, In the matter of Balleis, 144 N. Y. 132, that these bequests were taxable. It was held In the matter of Merriam, 73 Hun 587, that a legacy.to the United States by a resident of Hew York was subject to taxation, and upon error to the supreme court of the United States, the judgment of the court below was affirmed, and in his opinion Mr. Justice Brown remarked : “If the ruling of the court of appeals of Hew York in this particular case be not absolutely binding upon us, we think that, having regard to the purpose of the law to impose a tax generally upon inheritances, the legislature intended to allow an exemption only in favor of such corporations as it had itself created, and which might reasonably be supposed to be the special object of its solicitude and bounty.” United States v. Perkins, 163 U. S. 625.

The collateral inheritance tax of Massachusetts (Laws of Mass. 1891 p. 1028) exempts from its provisions educational or religious societies or institutions the property of which is exempt from taxation.

Legacies were given by a resident of Massachusetts to the Congregational church and an Episcopal church in the State of New York, both exempt from taxation by the laws of New York. It was held in Minot v. Winthrop, 162 Mass. 113, that the exemption found in the first section of the act of 1891'was confined to societies the property of which is exempt from taxation bv the laws of Massachusetts.

The Illinois statute of 1872 exempts from taxation all property of institutions of purely public charity, when actually and exclusively used for such charitable purposes, not leased or otherwise used with a view to profit. Taxes were assessed on two lots in Chicago against the Western .Seaman’s Friend Society, a corporation having for its object the disseminating of moral and religious instruction among sailors and laborers doing business on the western waters. The company was an Ohio corporation. The supreme court of Illinois, in the case of People v. Western Seaman’s Friend Society, 87 Ill. 246, held that the statute must in any event be understood to have exclusive reference to institutions or corporations created by the laws of that state and not to foreign corporations that may choose to locate branches in Illinois.

On the strength of these authorities, I shall hold that the exception in the act of 1894 does not cover the present bequest to Alfred University, a corporation and institution situated in the State of Hew York.

But in 1898 there was an amendment passed to this act. P. L. 1898 p. 106. By this amendatory act it was provided that all gifts, bequests, devises by will, deed or otherwise, of real or personal property, by citizens of this state to any Bible or tract society or religious institution, boards of a church or organization thereof, in trust or otherwise, not confined in their operations and benefactions to local or state purposes, but for the general good of the people interested therein of the United States or of foreign lands, as the board of home and foreign missions of various church denominations, shall not be taxed under said act, whether said societies, religious institutions or boards aforesaid are organized under the laws of this state or incorporated and organized under the laws of some other state.

The provisions of this act fail to confer immunity upon this bequest. Alfred University is, of course, not a Bible or tract society. Hor can it be regarded as a religious institution. It is true it has a theological department which is an adjunct of the principal departments of the institution, which are academic and collegiate. If the theological department is to be regarded as religious, the two others are purely secular. An institution of such, blended secular and religious qualities can in no sense be classed as a religious institution. Charitable institutions are omitted from the benefits of this supplement; and no other kind of an institution mentioned in the supplement will include such an institution as Alfred University.

In my judgment there must be a decree affirming the order of the orphans court of Somerset county.


author: Reed, Yioe-Ordinary.

text:
    In the matter of the probate of a certain writing purporting to be the last will and testament of Philip Dries, deceased.

    [Decided June 30th, 1903.]
    1. If a woman, at or before a marriage ceremony, represents herself to be competent to marry, or conceals the fact that she is not so qualified, and thereafter her supposed husband makes a will in her favor, believing her to be his wife, and she knew she had another husband living when she married the testator, such testamentary disposition will be held void if the representation or concealment was fraudulent, and it induced the execution of the will.
    2. The facts show no fraudulent representation or concealment.
    On appeal from a decree of tlic Essex county orphans court refusing probate of a will.

      Mr. Abner Kalisch and Mr. Bcmuel Kalisch, for the appellants.

      Mr. Frederick G. Preisel, for the respondent.

      This opinion was omitted from its proper place.—Rep.

   Reed, Yioe-Ordinary.

Philip Dries died leaving a will in which he said in Item two:

“I give, bequeath and devise a house and lot of land known as No. 201 Belmont avenue, in the city of Newark, where I now reside, together with the furniture therein contained, to my beloved wife, Louisa Dries, to be used and enjoyed by her during the term of her natural life—that is to say: so long as she remains single. In case she should marry, and from and immediately after her death, I give, bequeath and devise to all my surviving children, their heirs and assigns, forever, both real and personal, to be divided share and share alike.”

This will seems to have been executed on the 20th day of November, 1899.

This will was denied probate in the orphans court because, in the opinion of that court, it was executed by Philip Dries in the belief that Louisa Dries was his legal wife, when, in fact, she had, at the time of her marriage with him, a living husband, known to her to be living, and of which fact she failed to inform the testator.

There can be no doubt that if a woman, at or before a marriage ceremony, represents herself to be competent to marry, or conceals the fact that she was not so qualified, and thereafter her supposed husband makes a will in her favor, because he believes her to be his wife, and- it turns out that she had, and knew she had, another husband living when Fhe married the testator, such testamentary disposition will be held void.

To avoid a will upon this ground, however, the representation or concealment should be fraudulent, and it should appear, not necessarily that they were made to induce the execution of a will, but that they did induce its execution. In Wilkinson v. Joughin, L. R. 2 Eq. Cas. 319, the misrepresentation by' or silence of the supposed wife was willful. In Kennell v. Abbott, 4. Ves. 802, a man had, in the language of the master of the rolls, falsely assumed to be the husband of the testatrix; he having a wife living at the time of his marriage with testatrix, and this alone could be supposed to be the motive of her bounty.

In the present case, I am inclined to believe that the woman herself was deceived, and that she thought she was free to marry Ur. Dries.

It appears that, in 1875 she had married a miserable fellow named Meyers. He abused her, she had him arrested, and before the magistrate it appears they signed separation papers of some kind. When they separated does not appear, but the separation appears to have occurred some time before the year 1888. She thereafter lived alone np to September, 1888. Her first husband was then living with another woman by whom he had had two children. In September, 1888, she married a Mr. Heiberger, who seems to have died in 1893. On August 1st, lSOf, she married Mr. Dries, the testator. She .says that in addition to her knowledge that her first husband was living with a woman as his wife, Meyers himself told her that he had a divorce. Meyers denies that he did so tell her, but he is so entirely _ despicable that his word goes for very little. I incline to the belief that he did tell her that he was divorced. A person with more knowledge of the world would not have relied upon the facts which she details, but would have had the records of the appropriate court searched to ascertain the truth of Meyers’ assertion. But she is an ignorant woman, little acquainted with our language and our customs. The fact that Meyers was living with another woman, by whom he was having children, of which she says she was informed, would not be unlikely to lead her to the belief that she was free to marry.

Again, she says she told Mr. Dries before her marriage with him that she had had a husband who was living.

The learned judge who heard the case before did not believe this, because it was unlikely that Mr. Dries would knowingly become a bigamist. This conclusion rests ripon the assumption thát she told Mr. Dries thp bald fact that 'she had been married to a man named Meyers who was still living.

I think it probable that she not only told Dries that she had been married to a man- still living, but that she told him substantially what she has told the court about her relations with him.

After telling of the trouble which the daughters of Mr. Dries made when they learned of his 'intention to marry her, she says that they (the daughters) told him all kinds of stories about her.

She was asked: “Did they tell him anything about you ?” She said: “They said I got another man. That is what they said. He told them I told him all about it, he know it. I told him right away; he says I was foolish to live so long with a man like this, like he is.”

Again she was asked on cross-examination: “You say you told him you were a married woman at the time he married you, did 3rou?” She said: “Yes, sir; I did.”

“Q. Was that before you married him?
“A. Before I married him I told him all about it.
“Q. (By the Court.) Well, where was it that you told him that, that Meyers had been your husband?
“A. He came over to my house on Sunday to see me.
“Q. This was before you were married?
“A. Yes, sir. Afternoon the youngest one or one that is going on nineteen now, he got her with him on same day. She was over and had been with me, and then after dinner she wanted to go off, and he staid until supper time, and then he go back home.”

Again she says:

“I told him I had a man, Mr. Meyers, and he is married, and then I was a widow, and all. He has children, and then I married Heiberger, and I am now over three years a widow from Heiberger, when he died; he says that it is all right.
“Q. Did you tell him that Meyers was living?
“A. Yes, sir; he knew it; I told him.
“Q. You knew it, then, too?
■‘A. I told him on account—X says he has got a wife and children already ; he knew all about it.”

She does not say that she told Mr. Dries that Meyers had told her that he had a divorce; she does say that she told Mr. Dries “all.”

It is not improbable that the “all” included the story of Meyer’s visit to her and statement that he was divorced. However that may be, I have no doubt that she talked with Mr. Dries about the existence of Meyers, and that Mr. Dries knew that Meyers had been her former husband, and was still living.

The witness says that Mr. Dries told her that his daughters had told him that she had a husband named Meyers living.

One of the daughters admits that she knew it; she says that she cut a scrap from a newspaper. She denies, however, of telling her father about it. But taking into account the inimical feeling towards this witness, it is in the highest degree improbable that if the daughters had knowledge of such a fact they did not promptly communicate it to their father.

The daughter says that she got her information about three years ago—she was speaking in January, 1902. She was so informed, therefore, ten months before the will-was made, and if she communicated her information to her father within that time, testator knew of it, and had probably discussed the matter with his supposed wife before executing his will.

The daughter is not certain of the date when she heard of the existence of Meyers, and it is as likely that she learned of it while her father was proposing to marry as it is that she learned of it afterward.

Mr. Dries was probably little less ignorant than she, and accepted her account as sufficient to entitle her to marry him.

I am constrained to the conclusion that it has not been proved that the will was the product of the woman’s fraud and that the will should be admitted to probate.