author: I-Iowell, Y. C.

text:
    Frank Arnold et al. v. City of Orange et al.
    [Submitted May 15th, 1907.
    Decided May 25th, 1907.]
    1. A mere dedication without acceptance is insufficient to charge the dedicated land with a public use and with, public liability.
    2. The erection of a street light by a private corporation within the limits of a street dedicated to a village, the maintenance of which was paid for by the village, is not sufficient to show an acceptance by the village of the street dedicated.
    8. The construction of a public sewer by proper municipal authority at the expense of the municipality in a dedicated street connected with the municipality’s general system of sewers is an acceptance of the dedication of the street through which the sewer was constructed.

      4. An agreement by a village with a city granting the latter the right to lay water pipes through certain of the village streets for a valuable consideration, to which was attached a map showing the location and boundaries of a dedicated street included among those in which the pipes were to be laid, was an express recognition of the public character of the dedicated street, and sufficient to show an acceptance of the dédication.
    5. The fact that a village charter prescribes for the acceptance of a dedicated street by an ordinance especially devised, drawn and adopted, does not exclude the common-law methods of acceptance.
    On final hearing on pleading and proofs.

      Mr. Albert G. Wall and Messrs. Smith ■& Dugan, for the complainants.

      Mr. William A. Lord, for the defendants.
   I-Iowell, Y. C.

This suit is brought to restrain the city of Orange from laying water pipes through a strip of land lying in the village of South Orange, called Clark street, the title to a portion of which, to the middle of the strip, is claimed to be owned by the complainants.

The water pipes in question are parcel of the water-supply system of the city of Orange, but in order to reach that municipality it was deemed necessary to construct the line through the village of South Orange. Permission was granted for this purpose by the village to the city and the work was begun. The permission given by the village to the city included a right to lay the pipe line through the so-called Clark street. The complainants conceiving that this so-called street was a private roadway, and that the village had no authority to grant permission to use it for any purpose, bring this suit to restrain the city and its contractor from infringing upon their private rights by the construction aforesaid.

The city claims that Clark street is a public highway and as such is subject to the legislative permission contained in the statutes under which it is laying its pipe line. Indeed it was admitted on the argument that in 1870, two years before the organization of the present South Orange village government, the land now lying within the boundaries of Clark street was dedicated to public uses as a public highway by an agreement between Haskell and Page, under whom the complainants derive their title, and it appeared by the testimony of the surveyor who did it that the street was actually laid out on the ground in the year 1871.

I think there is no question but that there was a dedication as is claimed by the city, but a mere dedication without acceptance is insufficient to charge the dedicated land with a public use and with public liability.

Mr. Justice Lippincott, in New York and Long Branch Railroad Co. v. South Amboy, 57 N. J. Law (28 Vr.) 252, says: irWhilst the fact of dedication may be clear as against the owner or those claiming under him, yet there must exist on the part of the public a ratification or acceptance evidenced by some authorized formal municipal act or a public user. The public acquired no rights, nor is it subject to any burdens by reason of the dedication unless it be by some formal act of acceptance or by unequivocal public user.” Trustees v. Hoboken, 33 N. J. Law (4 Vr.) 13; Holmes v. Jersey City, 12 N. J. Eq. (1 Beas.) 299; Booraem v. North Hudson Railroad Co., 39 N. J. Eq. (12 Stew.) 465.

The city claims that the village did exercise unequivocal municipal authority by formal municipal acts over the property in question to a sufficient extent to warrant the finding of an acceptance, in short, that there was an acceptance of the dedication.

In one ease a private corporation erected a street light within the limits of the street, the maintenance of which was paid for by the village. This, however, under the opinion of Vice-Chancellor Emery, in Robertson v. Meyer, 59 N. J. Eq. (14 Dich.) 370, would not be sufficient to justify the conclusion of an acceptance. Neither do I think that the failure of the village to tax the land as private property is any evidence of acceptance, because it may well be, as was said by the complainants’ counsel on the argument, that the valuation of the abutting land for purposes of taxation included the value of the land within the lines of the so-called street; nor is the somewhat limited user by the public, standing alone, a sufficient fact from which to infer an acceptance which would bind the municipality. Its public use resembles very much the use of Henry street in South Amboy described in Mr. Justice Lippincott’s opinion above referred to, which was thought by the supreme court to be insufficient evidence of an acceptance.

But it appears that in the year 1902 the village, in the exercise of its municipal power, constructed a sewer through the so-called street which extended from West Turrell avenue northerly to the Orange city'line and in front of the lands of the complainants, which was paid for by the village, and was laid in connection with similar sewers in other streets in pursuance of a general plan for the drainage of-the village, and that a majority of the owners of property along the so-called Clark street have connected their properties with the sewer, and that sewage therefrom is now being discharged into it. The ordinance under which this work was done is in part as follows:

“An -ordinance to construct pipe sewers in certain of the streets and highways of the village of South Orange, in the county of Essex, to be connected with the joint trunk or outlet sewer. Sec. 1. That there shall be constructed and laid public sewers in the village of South Orange in accordance with the maps, profiles, plans and specifications submitted, by Alexander Potter, which plans have been heretofore adopted and were filed in the office of the village clerk on the 30th day of July, 1902, such sewers to be of the dimensions and in the streets and highways between the points following.”

Then follows a list of the streets to be sewered, including “Clark street, from West Tnrrell avenue to Montrose avenue, 8 and 10-inch.”

This action appears to me to be a most complete and efficient acceptance of the dedication of the lands in question, and while it may possibly be argued that this holding may not affect the rights of the village of South Orange in other litigations, because it is not a party to this suit, it can be made the foundation of a decree which shall be decisive of the rights of the parties now before the court. It is useless to speculate in regard to the position that the village might have taken if the complainant had made it a party to this suit. It might, and I think probably would, have admitted that the act in question was an acceptance of the dedication.

The question as to what particular municipal action will be sufficient to evince an acceptance of a dedication has not often been decided in our state. I think, however, that so important a municipal act as the construction of a public sewer by proper municipal authority at the expense of the municipality in a dedicated street connected with the municipality’s general system of sewers, must be held to be an acceptance of the dedication of the street through which it is constructed. In People’s Traction Co. v. Atlantic City, 71 N. J. Law (42 Vr.) 134 it was claimed that Atlantic City had no right to grant permission to a street railway to lay its tracks and maintain its overhead construction in certain streets within its boundaries because the streets were not dedicated and accepted streets.

Mr. Justice Garretson, speaking for the supreme court, says: “We think the evidence shows that the streets were dedicated by the filing of maps and sales of lots upon them and were accepted by the city by resolution accepting them, and also by the passage of this very ordinance, in which provision is made for their improvement by paving.” If the paving of a dedicated street as a condition of permission to a street railway company to use the street for its purposes is sufficient evidence of an acceptance, then certainly the paving of the street directly by the city would be still stronger evidence; and I fail to see any distinction in the character of the municipal use between the paving of a street and the construction of a sewer in it. If one would be an acceptance, the other would be likewise.

The particular subject-matter was decided by the New York court of appeals In re Hunter, 163 N. Y. 542. There Hunter in his lifetime dedicated Rawson street; the tender of the dedication was open for many years and was not accepted by the city. On May 16th, 1898, upwards of twenty years after the dedication had been tendered, the city passed an ordinance providing for the construction of a sewer through certain streets, and, among others, along the centre of Rawson street, the particular phrases in the ordinance relating to that street being “along the centre of Rawson street,” “from centre line of Raw-son street,” “thence southerly along Rawson street,” “the continuation of Rawson street,” “for that portion in Rawson street and its northerly continuation.”

In relation to this state of facts Judge Vann says: “We think the ordinance was an acceptance of the street, and that upon its approval by the mayor two days after its passage Rawson street became a public highway, even if it had not become so before. We do not pass upon the effect of the first map prepared and filed by Mr. Hunter, his numerous conveyances of land with reference to it, the action of the city authorities in naming the street and constructing a crosswalk in it, the public user, the change in 1875, and the acquiescence of all concerned therein; we place our decision upon the tender of dedication by Mr. Hunter in his lifetime, continued without interruption by the present owner for years after his death, and the acceptance of that tender when still in full force by the ordinance of May 16th, 1898. Without reference to the earlier history of the street, we think this tender and acceptance were sufficient of themselves, independent of any other fact, to make Rawson street a lawful and irrevocable highway.” To the same effect is Philadelphia v. Thomas, 152 Pa. St. 494. There the court said: “The proper city authorities entered upon the land dedicated to the public use as aforesaid, constructed the sewer therein and filed the liens. Those unequivocal acts were clearly an acceptance of the dedication and an unqualified recognition of Eeed street as an open highway of the city. They were just as effectual and conclusive as if an ordinance to open had been passed and damages had been assessed and paid. While the city was not bound to accept the dedication and forthwith take charge of the street as a regularly opened highway, it had an undoubted right to do so whenever, in the judgment of councils, the public interests would be thereby promoted; the action that was taken necessarily implied an acceptance of the dedication. It was not susceptible of any other construction.” See, also, People v. Loehfelm, 102 N. Y. 1.

■If there could be any doubt about the efficiency of the acceptr anee of the dedication by the construction of the sewer, I think the question is -set at rest by the agreement between the city and village of July 2d, 1906, by which the village gave to the city permission to lay its water pipes through the village streets. This agreement recites a request made by the city for consent to the laying of a water-pipe line through certain streets in the village according to a plan therewith submitted; it grants the consent and provides in detail for the manner in which the work shall be done. Attached thereto is a map which shows the location and boundaries of Clark street, the line of the water pipes in front of the land of the complainants therein, and on that side of the street nearest to their premises the whole length of Clark street from West Turrell avenue northward to the Orange city line.

The agreement provided that the city shall pay to the village the sum of $1,500 for the privilege of using the streets and highwaj^s delineated on the map for the construction of its pipe line. We must assume that this agreement was made upon due consideration by the properly constituted -municipal authorities in accordance with the statute (P. L. 1906 p. 612), and that the same is a binding agreement on both corporations. It contemplates a single consent to the laying of an uninterrupted line of water pipes through undoubted public places for a valuable money consideration.

In my opinion it is an express recognition of the public character of Clark street and irrefutable evidence of an acceptance of the dedication. People’s Traction Co. v. Atlantic City, supra.

The village claims that under its charter (P. L. 1872 p. 1203 §§ 43, 44)> ^his street cannot be foisted upon it except by an ordinance specially devised, drawn and adopted for the acceptance of the dedication. It is, indeed, true that these sections provided for acceptance of dedication in a particular manner, but I find nothing in them which excludes the common-law methods. If, however, the common-law methods are excluded, the Atlantic City and Hunter Gases, above cited, would be authority for holding that the ordinance for the construction of the sewer, and the municipal permission to lay the water pipe, would meet the requirements of the above-mentioned sections of the charter. See the motion to reargue the Hunter Case in 164 N. Y. 365.

I will therefore advise a decree dismissing the bill.


source: Caselaw Access Project

author: Howell, Y. C.

license: Public Domain

text:
    Henry W. Catlin et al. v. Vichachi Mining Company.
    [Submitted May 28th, 1907.
    Decided June 4th, 1907.]
    1. Where a corporation is losing money in the carrying on of its business, and is seriously embarrassed for want of funds to cany out the project for which it was organized, and is without available assets to pay its present indebtedness, notwithstanding there may not have been a complete suspension of its business, it is insolvent within the meaning of the Corporation act of 1896 (P. L. 1896 p. 298 oh. 185 § 65), providing that when any corporation shall become insolvent, or suspend its ordinary business for want of funds to carry on the same, any creditor may apply to the court for an injunction and the appointment of a receiver, and that, if upon the hearing it shall appear that the corporation has become insolvent and is not about to resume its business, the injunction may-issue and the receiver be appointed, and hence is subject .to the issuance of an injunction and the appointment of a receiver.

      2. That creditors of an insolvent corporation may have instituted the proceedings for the appointment of a receiver authorized by the Corporation act of 1896 (P. L. 1896 p. 298 eh. 185 § 65),'with the ulterior purpose of securing control of the affairs of the corporation, will not defeat the same.
    On bill to wind np the affairs of a corporation and motion for injunction and receiver.

      Mr. Edward A. Bay, for the motion.

      Mr. Arthur A. Bissell, contra.

   Howell, Y. C.

The bill in this case is filed by several persons claiming to be respectively stockholders and creditors of the Yichachi Mining Company, alleging insolvency of the company and praying for the appointment of a receiver to wind up its affairs. Although other relief is prayed, the bill is the ordinary bill for the administration of the affairs of an insolvent corporation. The usual order to show cause why an injunction should not issue and a receiver be appointed was made, and upon its return defendant appeared and filed affidavits, the object and purpose of which was to deny the allegations of insolvency in the bill.

The case then proceeded to a hearing in a summary way on the affidavits, proofs and allegations offered on behalf of both parties, in accordance with the practice laid down in Pierce v. Old Dominion Co., 67 N. J. Eq. (1 Robb.) 399, the question at issue being whether the corporation was insolvent within the meaning of the sixty-fifth section of the Corporation act of 189.6.

The corporation was organized under the General Corporation law of New Jersey, in the year 1904, and shortly-after its organization it became the owner of a mining property in the State of Oaxaca, in the Republic of Mexico; it has been engaged for three years or thereabouts in developing the property and has spent therein about $40,000. Its debts and obligations, including the annual franchise tax, which is presently to become due, amount to about $8,000; its assets are the mining property itself, concerning "the value of which there is little or no evidence; cash, $1,200; building, $3,000; machinery, $3,000; wood, $150; stock of tools, steel, &e., $1,000. In -addition thereto there are some piles of ore which have been taken from the mine, mention of which will be made further on. There is also a claim for $1,500, Mexican, or $150 gold, against the complainant Catlin, which is disputed and seems to be of doubtful validity.

As I have stated, there was no evidence on the part of either complainants or defendant as to the value of the mining property itself. This I cannot help thinking is a very serious omission on the part of the defendant, and it can only be explained upon the theory that in its present condition of development it has little or no value. Indeed, the evidence on both sides was to the effect that it would require an expenditure of from $25,000 to $30,000 to put it upon any sort of a paying basis.

As to the piles of ore “on the dumps,” as they were described, which were represented on the part of the defendant to be of the value of upwards of $22,000, gold, we have the testimony of a mining engineer, who is also one of the complainants, to the effect that in their present situation, counting the distance from milling and smelting works and incidental expenses, these piles have little or no value. The buildings are constructed of adobe bricks and cannot be moved. Originally they are said to have cost $12,000. It is quite evident that unless the use of the mine continues these buildings are of little or no value.

In my opinion it therefore appears that on a fair collation of the assets and liabilities the corporation is not in a condition to meet its ordinary accruing liabilities, and that in case its operations shall be stopped and its affairs wound up it could pay only a fraction of its debts.

On the other hand the indebtedness of the corporation is of the most pressing character. There is first a call loan, made by Rickards and Elliot, aggregating $5,000, gold. Mr. Elliot, one of the creditors, admitted on the stand that it would not be for his interest as a creditor to call this loan, the natural inference being that it would be injurious to the company. The company^ ordinary current monthly accounts are from $100 to $150; the salary of the superintendent remains unpaid to the extent of $850, and lastly, a judgment was recovered against the company in the Hudson county circuit court, on April 12th, 1907, in favor of the complainant Hamilton, for upwards of $1,400, on which execution has been issued, which the bill alleges is unsatisfied and is about to be so returned by the sheriff of Hudson county. It was admitted on the argument by counsel for the defendant that the corporation owned no property in New Jersey.

The management, appreciating the perilous condition in which the property is, some time in February or March, 1907, projected a scheme for raising $30,000 by mortgaging the Mexican property to secure issue of bonds of that amount. In the circular that was sent to the stockholders, under date of April 8th, 1907, the treasurer stated the immediate necessity for $25,000 in gold, at once, to meet present indebtedness and needed development, and stated that the company was at that time losing or would lose $100 a week in what he called the “extra development” of the mine. The meeting of the stockholders which was called for the purpose of considering' the proposition -to mortgage the property was stopped by injunction in this suit and the project has not proceeded any further.

The management at the hearing admitted the inadvisability of attempting to mortgage the property as was thus proposed. They had then in mind a substitute plan, viz., the making of the company’s unsecured notes to the aggregate amount of $30,000, payable in five years, drawing six per cent, interest, which they hoped to sell to the present shareholders at ninety per cent, of their face value, thus producing $27,000, but no arrangements have been made with the stockholders to take these notes, and it is quite evident that the complainants, who are nineteen per cent, and who represent thirty per cent, of all the body of the shareholders, will not aid in this scheme because they think that the corporation is now insolvent. It must be manifest that a corporation on the eve of insolvency, to take the most charitable view of the situation, could not 'float a note issue of this character.

There remain in the treasury a few shares of stock, which the management attempted to sell to the present shareholders, and concerning which the president sent out a circular dated March 18th, 1907, in which he says less than one-third of the stockholders have complied with the request for a subscription of two per cent, on their stock, but eight have sent money to date. This indicates an indisposition on the part of the shareholders to put any more money into the enterprise.

Under date of April 8th, the president sent out a circular in which he said:

“The mine is carrying- itself to a very small extent, really running behind about one hundred dollars a week if we do any extra development-work. We must have at least twenty thousand dollars gold at once, beside paying back the loan and some bills amounting to about five thousand dollars more, that or quit. The details are being worked out, and suggestion will be submitted when the proxies are sent out.”

If this statement is true, and the testimony adduced at the hearing seems to support it, there can be no question but that the affairs of the corporation are in a very precarious condition.

The corporation is still running its business. It has not suspended the same for want of funds, and it was argued that inasmuch as this condition did not exist there could be no adjudication of insolvency or appointment of a receiver. I think the defendant’s argument is not sound. A corporation may be insolvent and yet not have suspended its business for want of funds to carry on the same. It likewise may have suspended its1 business; for want of funds and still be able to pay its debts if properly wound up. If either fact, insolvency or suspension exists without the other, the court may entertain the bill and proceed in a summary way to hear the affidavits, proofs and allegations which majr be offered on behalf of the parties. The inquiry then goes to the questions “insolvency” and “resumption,” and the query is, what is meant by resumption in the second part of the section under which this action is taken. The query is fully answered by Chancellor McGill in Fort Wayne Electric Corporation v. Franklin Electric Light Co., 57 N. J. Eg. (12 Dick.) 7. It is here contended, as it was in that case, that the second requirement of the section defines insolvency so broadly as to necessarily include a suspension of business, because principally of the conjunctive construction of the sentence, and that inasmuch as the' company had not entirely supended its business the word “resumption” puts this case out of the statute. The plain, logical and satisfactory interpretation of the language of the section given by Chancellor McGill, in the case just cited, makes it include the very situation disclosed by the testimony at bar. He says: “I agree that the word ‘resume’ as used in the statute, predicates some interruption of the insolvent’s business, but I do not understand that it contemplates an entire suspension of all its workings. Such has been the practical interpretation the bar and the courts have given it for manufacturing and other companies with plants in operation,have constantly been adjudged tq be insolvent and put in the hands of receivers, and in so doing large values have been saved to creditors and stockholders because of the salable condition of a live plant as compared with one that is dead. Insolvency carries with it inability to presently pay indebtedness and suspension of that function, and the word ‘resume,’ used in the statute, is, I think, to be taken in the sense of taking up again that suspended function, so that payment of indebtedness as well as the operation of the work of the corporation, after temporary, partial or complete paralysis, may be resumed with safety to the public and advantage to its stockholders.”

The facts resemble quite closely those adduced in Reinhardt v. Interstate Telephone Co., 71 N. J. Eq. (1 Buch.) 70, in the opinion in which Vice-Chancellor Pitney says: “Of late years numerous corporations have been adjudged insolvent and receivers appointed therefor without any interruption of their business and before any debt has actually matured without payment, on proof merely that the corporation would be unable to meet its immediately maturing obligations, and that a scramble would ensue among its creditors, resulting in. inequality of distribution of its assets. It is common practice to declare railroad, gas and water companies, and other public service corporations, insolvent and appoint a receiver without the least interruption of their public functions.”

The court of errors and appeals has defined the condition of insolvency contemplated by our statute. In construing section 64, which contains the same phrase as is contained in the first portion of section 65, “Whenever any corporation shall become insolvent or shall suspend its ordinary business for want of funds to carry on the same,” Mr. Justice Dixon says, in Empire State Trust Co. v. Fisher, 67 N. J. Eq. (1 Robb.) 602: “Insolvency denotes a general inability to meet pecuniary liabilities as they mature by means of available assets or an honest use of credit.”

Applying these definitions to the case in hand, we find (1) a going business which is losing money by its operation; (2) that it is seriously embarrassed for want of funds to carry out the project for which the corporation was organized; (3) a call loan, which the company has no means of satisfying; (4) an unsatisfied judgment pressing for payment, which it does not have sufficient funds to meet; (5) an admission of its perilous condition contained in the scheme for financing and continuing the company’s operations; (6) an inability to convert its assets into cash, and, indeed, according to the defendant’s own showing, a total lack of available assets with which to carry on the business and pay its present debts.

These circumstances convince me that the company is brought directly within the section of the statute referred to, and that it is insolvent, and its affairs should .Ije wound up by a receiver. It was argued that the case showed that the litigation was merely an attempt on the part of the complainants to obtain control of the company’s affairs. I do not think this appears in the case, nor do I see bow nineteen per cent, or even thirty per cent, of the shareholders could control the remainder; but suppose the fact existed that the complainants were acting from ulterior motives, this would be no defence. Fort Wayne Electric Corporation v. Franklin Electric Light Co., 57 N. J. Eq. (12 Dick.) 16, 20.


text:
    Trustees of the Methodist Episcopal Church in the Township of Deptford, in the County of Gloucester, v. Charles Hammell et ux. et al.
    [Submitted June 12th, 1907.
    Decided August 30th, 1907.]
    1. A legacy is chargeable upon lands devised by the same will where the personal estate has been exhausted.
    2. On a bill to charge a legacy upon devised lands the executor is a necessary party.
    3. Where, on a bill to charge a legacy upon devised lands, no objection was made until all the testimony was taken upon final hearing that the executor was not made a party, complainant will be allowed to amend the bill by adding the executor as a party defendant, it appearing that the amendment was necessary to the ends of justice, and will in no way em-. barrass defendant’s right of defence.
    On final hearing on pleadings and proof.

      Mr. Joseph J. Summerill, for the complainant.

      Mr. Ernest Redfield, Mr. Robert Sparks and Mr. Robert S. Glymer, for the defendants.
   Howell, Y. C.

I am satisfied .of the justice of the claim made in the complainant’s bill, and if the case were in proper condition as to parties I would be willing now to advise a decree in accordance with the prayer of the bill.

The bill is filed by a legatee under the will of Mary G. Young to charge its legacy on lands devised to the defendant Hammell by the same will. The testimony satisfies me that the personal estate has been exhausted, and the case of Corwine v. Corwine, 24 N. J. Eq. (9 C. E. Gr.) 579, and other cases cited by complainant are authority for charging complainant’s legacy on defendant’s lands.'

Yet a decree cannot be made for complainant in the absence of Mrs. Young’s personal representative who is not a party t'o the suit. He is a necessary party. Congregational Church of White River v. Benedict, 59 N. J. Eq. (14 Dick.) 136; affirmed, 62 N. J. Eq. (17 Dick.) 812. No objection was made to this defect in the cause until after all the testimony had been taken on the final hearing. The objection having been sustained complainant’s counsel then moved to amend the bill by adding the executor as a party defendant.

I think that the amendment- should be made and that the hearing should stand over until the executor shall have been brought in and had opportunity to answer.

Defendant’s counsel objected on the ground that it was too late to make the application; that having gone to final hearing there was no remedy except to dismiss the bill, as was done in the White River Church Case, above cited. There were so many reasons for dismissing the bill in that case that could not be obviated by amendment, that it is no wonder that a motion was not made to amend on the ground of absence of the personal representative. If that had been the only ground of defence available, I have no doubt but that the court would have considered such a motion.

I think if I were compelled to dismiss the bill in this ease that I should do it “without prejudice,” but I do not think I am compelled to do so. The complainant has moved to perfect his bill by amendment. In my opinion the amendment asked for is necessary to the ends of justice, and will in no way abridge or even embarrass the defendants’ right of defence, and, therefore, it should be made.

The authorities for this course are numerous. Midmer v. Midmer, 26 N. J. Eq. (11 C. E. Gr.) 299; affirmed, 27 N. J. Eq. (12 C. E. Gr.) 548; Ogden v. Thornton, 30 N. J. Eq. (3 Stew.) 569; reversed on other grounds, 32 N. J. Eq. (5 Stew.) 723.

The amendment must, however, be on terms. The complainant should pay all the taxed costs of the defendants after the filing of their answer, and the amendment should be perfected and subpoena issued for the new defendant within five days from the date of the order.


text:
    John R. Hegeman v. Atlantic Rubber Shoe Company.
    [Submitted July 3d, 1907.
    Decided July 10th, 1907.]
    A receiver of a corporation will not be appointed under sections 50 and 57 of the General Corporation act empowering the court of chancery to appoint a receiver of a corporation which has been dissolved, where it appears that the corporation was being dissolved by the stockholders, in accordance with the provisions of section 31 of the same act, and that the bill was filed-eleven days after the stockholders’ meeting held for that purpose, but before the stockholders’ consent and statutory certificate had been filed in the office of the secretary of state, there being no allegation of the insolvency of the corporation or maladministration on the part of its directors.
    On motion for the appointment of a receiver for the Atlantic Eubber Shoe Company. On bill, answer and affidavits.

      Mr. Frank P. McDermott and Mr. Eldon Bisbee (of the New York bar), for the complainant.

      Mr Sherrerd Depue and Mr. J. Frederick Eagle (of the New York bar), for the defendants.
   Howell, Y. C.

The bill in this ease is filed by a stockholder of the Atlantic Eubber Shoe Company, who sues on behalf of himself and all other stockholders who are similarly situated; he prays for the appointment of a receiver for that corporation which is now being dissolved by the stockholders in accordance with the provisions of section 31 of the Corporation act of 1896.

On April 8th, 1907, the board of directors adopted a resolution in the usual form declaring that it was advisable that the corporation should be dissolved, and calling a meeting of the stockholders to consider the same, which meeting was held on May 8th, 1907. Thereat more than two-thirds in interest of the stockholders appeared and consented that a dissolution might take place, and signified their consent thereto in writing. Eleven days thereafter the bill was filed. It was stated on the argument that the stockholders’ consent and the statutory certificate had not been filed in the office of the secretary of state, and it is alleged in the bill that the remaining proceedings after the stockholders’ meeting were being taken by the officers and directors of the corporation; in other words, it appears not only by the bill, but also by the statements of counsel on the argument that the bill was filed shortly after the stockholders’ meeting and before any other proceedings looking to the dissolution of the corporation had been taken.

The defendants are the Atlantic Rubber Shoe Company and the persons who compose its board of directors. The relief prayed is that the complainant and the other stockholders and creditors of the company may be paid what is justly due them, and that the company and its officers and directors may be enjoined from exercising any of the company’s rights or franchises, and from receiving any debts due to it, and from paying or transferring any of its money or effects, and from continuing its business in any waj1, and that a receiver may be appointed according to the form of the statute in such case made and provided, and the practice of the court, and for general relief. It will be observed that the prayer is in the form generally used in applications to wind up an insolvent corporation through the agency of the statutory receiver.

The bill contains many allegations which the complainant claims tend to show that the present board of directors are not acting in the interest of the company or its shareholders. These statements are urged as a reason why the present directors should be displaced and the receiver prayed for appointed. There is no specific prayer that any of the acts of the corporation or its directors which are thus complained of may be declared to be fraudulent as to creditors or stockholders, or even injurious to them except in the slightest degree, nor any prayer that any such acts be annulled or abrogated, or that the directors should account therefor. The frame of the bill and the prayer is not proper for an appeal to the general equity powers of the court. There is no allegation of insolvency. On the contrary, the bill shows that the corporation has in the bank much more than enough money to pay the full outstanding debts.

The theory of the bill is that the proceedings already taken by the corporation looking to a destruction of the corporate entity amount to a dissolution, and that such dissolution, so called, ■gives this court authority to unseat the present directors for the reasons stated in the bill, and to appoint an indifferent person receiver to wind up the company’s affairs.

The statute (section 56) prescribes that—

“When auy corporation shall be dissolved in any manner whatever the court of chancery, on application of any creditor or stockholder, at any time may either continue the directors, trustees * * * or appoint one or more persons to be receivers of such corporation to take charge of the estate and effects thereof,” &c. [Section 57] : “The court of chancery shall have jurisdiction of such application and of all questions arising in the proceedings thereon.”

The answer of the defendants (paragraph 4) claims that the company has not been dissolved, and that there can be no dissolution until the filing with the secretary of state of the certificate and consent of the stockholders, the publication of the secretary of state’s statutory certificate, and the filing of an affidavit of such publication according to the statute, and that this court has no power or jurisdiction to appoint a receiver under the bill as framed, which objection they pray they may have the same advantage of as if they had pleaded or demurred on that ground. This objection raises the question of jurisdiction, which must be considered as a preliminary question, because if the court has no jurisdiction of the cause, for the reason stated in the objection, no provisional relief can be awarded to the complainant; yet even this question cannot finally be disposed of on this motion; for its final determination the parties must await the final hearing. If, however, the objection is of such force and weight as to render extremely doubtful the right of the complainant to the provisional relief prayed for, then under well-known principles such relief cannot be granted.

I shall shortly refer to the sections of our Corporation act which relate to the voluntary dissolution of corporations by the acts of the directors, stockholders and officers, and I may say, first, that the proceedings prescribed by our statute for such voluntary dissolution take the place of one of the common-law methods of surrendering corporate franchises, and that the acts required of the state and corporation officers were intended to and do amount to a tender to and acceptance of such surrender by the sovereign power. Section 31 of our Corporation act provides that whenever in the judgment of the board of directors it shall be deemed advisable and most for the benefit of such corporation that it should be dissolved, the board, after adopting a resolution to that effect, shall call a meeting of the stockholders to take action upon the directors’ resolution, and “if at any such meeting two-thirds in interest of all the stockholders shall consent that a dissolution shall take place, and signify their consent in writing, such consent * * * shall be filed in the office of the secretary of state, who * * * shall issue a certificate that such consent has been filed,” which certificate must be published as directed, “and upon filing in the office of the secretary of state of an affidavit that said certificate has been so published the corporation shall be dissolved,” &c. But while this section declares what proceedings shall be taken to effect the dissolution, section 53 provides that such dissolved corporation shall be continued a body corporate for the purpose of prosecuting and defending suits and of enabling it to settle up and close its affairs and dispose of and convey its property and to divide its capital, and (section 54) that upon dissolution in any manner the directors in office at the time of the dissolution shall be trustees of such corporation, with full power to settle the affairs, collect the debts, dispose of the property and divide the assets after payment of its debts. The directors so constituted trustees (section 55) may recover the debts and property in the name of the corporation, and they shall be suable either by the corporate name or in their own name for the corporate debts, and they are jointly and severally responsible for the debts to the amount of the assets which shall come to their hands.

The proceeding prescribed for the voluntary dissolution of corporations is wholly statutory, and, unless strictly followed, serious results may ensue. The various steps are plain and simple. The defendants assert that there can be no dissolution until the last step shall have been taken. The complainant asserts that as soon as a two-thirds majority of the stockholders shall have signed their consent to the dissolution the dissolution is practically effected, so that the court of chancery may take jurisdiction of the proceeding under sections 56 and 57 of the Corporation act.

In the matter of the voluntary dissolution of the Dolgeville Electric Light and Power Co., 160 N. Y. 500, the point was made that the court had no jurisdiction to make the order dissolving the corporation, inasmuch as the petition presented to the court was not verified by a majority of the directors as was required by the statute. Chief-Judge Parker says: “The point was well taken, if it was the fact that the petition had not been verified by a majority of the directors, for this is a purely statutory proceeding, and the court has no power except such as is conferred by the statute, which must be strictly pursued. And section 2419 of the code provides that the petition to be presented to the supreme court praying for a final order dissolving the corporation must be verified by a majority of the directors.”

Manifestly this must be true, because not only are the rights of the assenting stockholders to be considered, but also the rights of the minority and dissenting stockholders and the rights of the creditors; also the relations between the stockholders and the corporation, and the relation between the corporation and the state, and the changes in the rights, powers and duties of directors into those of trustees, because I take it to be true that unless the corporation is dissolved strictly in accordance with the statute there probably can be no valid dissolution, because there would then be no acceptance by the state of the surrender of the corporate franchises. Thus the relations between the state and the corporation might be held to continue. The corporation might be held to be still liable to the state for franchise taxes and for the performance of all the other obligations which it owes to the state.

This argument throws light upon the real question involved in this case, which is, when does the dissolution take effect? When may this court intervene under the authority given to it by section 56 of the Corporation act?

The statute itself says that this may be done “when any corporation shall be dissolved in any manner whatever.” Section 31 provides that the corporation shall be dissolved upon filing in the office of the secretary of state of a certain affidavit. If this court may intervene at the point now reached in these proceedings, why may it not have intervened at an earlier stage, in fact, as soon as the board of directors had passed their resolution, or as soon as the stockholders’ meeting had been called ?

In my view this court cannot avoid or evade the plain words of section 31, which provides, as above stated, that upon filing the affidavit that the certificate of the secretary of state has been published as required by law the corporation shall be dissolved,, and I do not think that the corporation is dissolved until that final step shall have been taken, and this I think is the practical interpretation that has been given to the statute by the bar and by the courts; while there are one or two cases in which it appears that the bill was filed for the appointment of a receiver of a corporation in process of dissolution, there does not appear to have been any adjudication in this state on the exact point.

However, as I stated before, the ultimate settlement of the question must await the final hearing. It is therefore manifest that the right of the complainant to the statutory remedy which he has invoked is extremely doubtful, and that this court in the present stage of the dissolution proceedings ought not to either appoint a receiver, and so displace the present directors, or enjoin the corporation from the transaction of its necessary business or from accomplishing its dissolution.

Inasmuch as I have reached the conclusion indicated, it is not necessary that I should at this time examine or pass upon the merits of the affidavits.


text:
    Caroline E. Condict v. Stephen A. Condict et al.
    [Submitted July 18th, 1907.
    Decided July 26th, 1907.]
    1. By his will a testator gave and devised the residue of his estate to his executors in trust: “Fourth. — After the death of my wife I authorize and empower my surviving executors to sell any and all of my land and property that may remain to the best advantage, and out of the proceeds of such sale to pay off any bonded indebtedness on my homestead and Market street property, if any remains, and when such indebtedness is all paid off and discharged, then I dispose of the residue and remainder of my estate as follows:” (indicating the manner in which the same was to be disposed). Upon a bill filed by one of the testator’s children beneficially interested in his residuary estate, after the payment of all his indebtedness, seeking partition of the testator’s lands still undisposed of, and which were unencumbered; claiming that the complainant was a tenant in common of the legal estate and entitled to an undivided part thereof— Held, that the power of sale still exists; that it extends to the whole of the real estate and all the undivided interest therein, and that the complainant had no standing in court to call for a partition.
    2. The complainant cannot elect to take her share in speeie, and so in effect cancel the power of sale created by the will, the rule being that a power of sale will not be defeated by one or more, less than the whole number of beneficiaries, to the prejudice of any of them.
    On bill for partition. On final hearing, on bill, answer, replication and proofs.

      Mr. Francis Child, for the complainant.

      Mr. William T. Carter, Jr., for the defendants.
   Howell, Y. C.

This is a bill for partition filed by Caroline E. Condict, one of the five children of Stephen H. Condict, now deceased, who died November 1st, 1895.

Mr. Condict, at his death, left him surviving his widow and five children, and he also left a will, which was admitted to probate in the county of Essex, of which the following are the portions important for the consideration of this case:

“Third. I give, devise and bequeath, all the remainder of my estate, real and personal, to my executors hereinafter named and to the survivor or survivors of them in trust, as follows: To hold the same during the life of my wife, she to have the use of my homestead in Park Place, together with the use of the furniture, household goods, etc., as long as she desires to occupy said house, with sufficient income from my estate (and such amount as she may see fit to contribute) to support the house and family, all taxes, repairs, insurance, water rates, etc., to be paid out of my estate, and any surplus income to be applied to the reduction of any bonded indebtedness that may be on my homestead or Market street property. I also authorize and empower my executors or the survivor of them to sell any of my real estate with the consent of my wife and to apply the receipts from such sale to the reduction of any bonded indebtedness that may be upon my homestead and upon my Market street property.
“Fourth. After the death of my wife I authorize and empower my surviving executors to sell any and all of my landed property that may remain to the best advantage, and out of the proceeds of such sale to pay off any bonded indebtedness on my homestead and Market street property if any remains, and when such indebtedness is all paid off and discharged, then I dispose of the residue and remainder of my estate as follows :
“Fifth. I give and bequeath the one equal fifth part of such residue (less the money advanced to my son, Frederick K. Condict, as shown on my ledger on pages 144 and 145, which sum so shown is to be first deducted) to my executors, in trust, to invest and keep invested said share of one-fifth of my estate and to pay over the income arising from the same as follows: The one equal fourth part of such income to my son, Frederick K. Condict, and the remaining three-fourth parts of said income to pay over to his wife, Mary N. Condict, as trustee, for the use of herself and her children by said Frederick K. Condict for their maintenance, the principal sum of said one-fifth share of my estate to be paid to the children of said Frederick K. Condict and Mary N. Condict in equal shares at any time after they severally arrive at the age of twenty-one years if she sees fit to so have it paid over, and in case of her death the payment and disbursement of said three-fourths of the income is committed to my executors as trustees in her place and stead. And on the death of both Frederick K. Condict and Mary N. Condict said principal sum (if not already divided among their children) shall be divided among said children in equal shares when they shall severally attain the age of twenty-one years.
“Sixth. I give and bequeath the one equal fifth part of such residue (less the money advanced to my son, Stephen A. Condict, as shown on my ledger on pages 130 and 131, which sum so shown is to be first deducted) to my son, Stephen A. Condict, in trust, for his children, he to have the income thereof until all of his children attain the age of twenty-one years, at which time the said Stephen A. Condict is to have the option of equally dividing said principal sum among his children then living, if such division then seems desirable to him, said trustee, however, to have the use of the income until such division is made.
“Seventh. I give and bequeath the one equal fifth part of such residue to my son-in-law, William T. Carter, in trust, for the use of his wife, Sophia A. Carter, and her children, as long as she lives and after her death, the same to be divided equally among her children then living, with the option on the part of said Sophia A. Carter, of dividing said principal sum equally among her said children on arriving at the age of twenty-one years.
“Eighth. I give and bequeath to my daughter, Caroline B. Condict, and to my daughter, Sarah Frances Condict, each the one equal fifth part of said residue absolutely.
“Ninth. X authorize and empower the several trustees named in this my will to safely invest and re-invest the several sums herein bequeathed, and to change the investments from time to time as circumstances in their judgment may demand.”

The testator’s two sons and his daughter, Mrs. Carter, have children; all the parties in interest are of age except Kenneth K. Carter, a son. of Mrs. Carter, who is twelve years old.

The evidence shows that the testator at the time of his death was largely in debt, bis real estate being encumbered by mortgages and some of his personal property pledged as security for tlic pajunent of promissory notes.

During the lifetime of the widow the executors and trustees disposed of the homestead property, and were able, by careful management, to pay off all the indebtedness of the testator and leave the real estate described in the bill entirely unencumbered.

The testator’s widow died on September 13th, 1901, and the estate, now being ready for distribution, Caroline E. Condict, one of tbe devisees, files ber bill seeking partition of the lands of which the testator died seized, which are still undisposed of, upon the theory that she is a tenant in common of the legal estate and entitled to an undivided one-fifth part thereof. She alleges that the executors and trustees named in the will claim that by virtue of the will and their appointment they have the power to sell and convey the premises in question, and she alleges that there is doubt whether, upon a proper construction of the will, the executors have such power, and she says that it would be impossible to make advantageous sale of the property or to divide the same among the parties by conveyances from the executors unless their authority is determined and declared by the decree of this court.

All the other parties in interest have answered. Their answer admits all the material allegations of the-bill, and admits that there is doubt about the power of the executors and trustees therein named to make sale of the real estate, and they join in the prayer .of the bill that this court may decree whether the executors have such power or not.

On the argument the question submitted was whether the power of sale still exists in the executors and trustees, it being conceded by both sides that if the power does exist the bill for partition should be dismissed.

I think it is quite apparent that the testator intended the power of sale, created in paragraph 4 of the will, to be a general and continuing power and not limited to the one purpose of raising money with which to clear the estate of indebtedness.

It will be observed that the legal title to the laird is not vested by the will in the children and ultimate beneficiaries, but is vested in the executors and trustees. They arc not given a mere naked power, but are created active trustees, and they evidently have been hitherto so considered by everyone interested in the estate. The executors have conducted the affairs and business of the estate without objection, and with the consent of the widow; and in her lifetime sold a sufficient amount of the real estate of the deceased to discharge all the indebtedness, and they did discharge it out of the proceeds of such sales.

The legal title being so vested in the trustees there is no method by which they may divest themselves thereof except by a conveyance or by á decree of this court determining and ending the trust.

A similar case is found in Cruikshank v. Parker, 51 N. J. Eq. (6 Dick.) 21; reversed by the court of errors and appeals in 52 N. J. Eq. (7 Dick.) 310. In that case there were two trusts —first, that the trustees sell, dispose of and convey the residuary estate at public or private sale, in their discretion, and second, that they divide the real and personal estate into four equal shares, one for each of the testator’s daughters, and to convey, pay and assign three of such shares to three of his daughters absolutely, and to hold as trustees the remaining fourth share, deducting therefrom what was probably an advancement of nearly $50,000, and pay the income thereof to the fourth daughter during her life and at her death to her issue absolutely.

It will be seen that the facts in the Gruikshmlc Case are almost on all-fours with the facts in the case at bar, and the court there held that the power of sale continued even after the division into the four shares which the will had provided for, and it specifically enforced the performance of an agreement between the trustees and the purchaser for the sale of a portion of the share set aside in trust for the fourth daughter.

A similar question was before the court under the same will in the case of Story v. Palmer, 46 N. J. Eq. (1 Dick.) 1. That was a bill for partition, and was based upon the theory that the ultimate devisees had the right to elect to take the land instead of the proceeds of the sale thereof.

The chancellor determined that the trust under the will was an active one and contemplated that the executors should exercise their discretion in regard to the sale and disposition of the property, and that a partition would defeat that intention, and to that extent override the will and the trust which it had created.

We must attempt to ascertain the intention of the testator in construing the will and follow that intention in the administration of the estate. I think that the double power of sale contained in the will is conclusive of the intention of the testator. By the third paragraph of the will he devised his whole estate to trustees to hold the same during the lifetime of his wife for her support and the support of the family, and authorized the executors to sell real estate with the widow’s consent and apply the proceeds to the reduction of his debts.

Evidently the testator had in mind the plan of keeping his estate together during the lifetime of his widow, and did not desire that any of the real estate should be sold without her consent or for any purpose except to reduce the bonded indebtedness which might be upon his homestead and Market street properties; and it seems probable that during the lifetime of his wife he meant that no more of the estate should be sold than was necessary to pay the debts and so preserve the property in specie so far as was possible, and, therefore, that up to the date of her death the power of sale was limited to this one purpose, but after her death (fourth paragraph) the executors were authorized to sell all his landed property that might then remain, not for the limited purpose of paying the bonded indebtedness, but generally to realize thereon, with the direction that any remainder of indebtedness should be paid “out of the proceeds” of such sale, and with the intention that the executors and trustees should divide among the beneficiaries not the lands themselves but the proceeds of the sale which they were so authorized to make. This power of sale is not limited to any particular time nor for any particular purpose. It is general and ruilimited and quite necessary to carry out the scheme of settlement that the testator had in mind. The executors may, but not till after the death of his wife, sell all his landed property and “out of the proceeds” of the sale pay the bonded indebtedness, if any should remain, and when such debts should have been paid he couples his real and personal estate together as one divisible whole and disposes of it as such, but, manifestly, the division was intended by him to be made by the executors and trustees who held the legal title to the whole of the real and personal estate. In other woi’ds, the testator contemplated the conversion óf his whole estate into cash or its equivalent, and a distribution thereof to be made by the executors.

Again, it will be observed that in the provision made in the fifth and sixth paragraphs for the benefit of his sons he charges up against their fifth shares, respectively, the moneys advanced to his sons, as shown on his ledger. In the ordinary administration of the estate these deductions cannot be made unless the property shall have been first sold, because they must be made not from the property itself, which would be an impossibility, but from the proceeds of the sale; and this is made still more prominent by the provisions of the ninth paragraph of the will, where the trustees are directed to safely invest and re-invest the several sums bequeathed by the will and to change the investments from time to time, as circumstances may demand — a provision which cannot be carried out unless the trustees shall first have realized upon the property and by a sale have created the several sums therein mentioned; in short, this ninth paragraph contemplates that the second set of trustees shall take money or securities, and not the land which the original executors and trustees have the title to and management of. It would be well-nigh impossible to realize upon these three undivided-trusteed shares, and at the same time give the complainant and her sister their shares in specie. To attempt such an administration of the powers declared in this will would create endless confusion and lead to a .sacrifice of the shares realized upon. The testator was a prominent and well-known business man, who had long been a resident of Newark, and a large owner of real estate. It can hardly be supposed that he had in mind any such course of administration as is above indicated.

This court had to deal with this question in the matter of the will of John T'onnele in the two cases of Bacot v. Wetmore, 17 N. J. Eq. (2 C. E. Gr.) 250, and Wetmore v. Midmer, 21 N. J. Eq. (6 C. E. Gr.) 242. There the question was whether a general power of sale extended to lands which the testator had devised to his son for life, as well as to land embraced in certain trusts, and it was held that the general power of sale attached to the whole estate, and that the power prevailed over all the devises. The complainant in this suit is in the same situation with the life tenant under the Tonnele will. She takes her share absolutely, it is true, hut it is subject to the power of sale. Rudderow v. Nield, 27 N. J. Eq. (12 C. E. Gr.) 89; affirmed, 28 N. J. Eq. (1 Stew.) 274; Morse v. Hackensack Savings Bank, 47 N. J. Eq. (2 Dick.) 279.

The complainant cannot elect to take' her share in specie and so in effect cancel the power of sale created by the will. The rule is well settled that a power of sale'will not be defeated by one or more, less than the whole number of beneficiaries, to the prejudice of any of them. If all were sui juris and should elect to take the land, the power might be defeated by their unanimous action, but in the case at bar one of the contingent beneficiaries, a son of Mrs. Carter, is not of age. He cannot elect, and there is no one authorized to elect for him. Fluke v. Fluke, 16 N. J. Eq. (1 C. E. Gr.) 478; Bolton v. Stretch, 30 N. J. Eq. (3 Stew.) 536; Cronan v. Coll, 69 N. J. Eq. (3 Robb.) 694. Nor does it appear that any of the other beneficiaries have in any manner signified their desire to take land instead of the proceeds of the sale thereof; in fact, they seem, by their answer, to stand upon their rights as the court may ascertain them from the will.

I therefore conclude that the power of sale still exists; that it extends to the whole of the real estate and all the undivided interests therein, and that the complainant has no standing in court to call for a partition. The bill must, therefore, be dismissed.


author: Howell, V. C.

text:
    Edward S. Savage v. Port Reading Railroad Company.
    [Submitted August 2d, 1907.
    Decided August 7th, 1907.]
    To warrant a mandatory injunction the invasion of complainant’s rights must be substantial or the damage irreparable, the right thereto must be clear, and there must exist an urgent necessity for the issue of the writ, and an injunction to compel defendant to remove obstructions from a water course will be denied, where the controversy centres about the ownership of land, the affidavits do not set out a title in either party which would support ejectment, defendant has been in possession nearly sixteen years, complainant and his predecessors do not seem ever to have been in possession, the obstructions have been erected fifteen years, no proceedings have been heretofore taken to remove them, they are in daily use in ■’onducting defendant’s business, a bulkhead, one of the obstructions, cost $10,000, it would cost $4,000 to remove it, its removal would hamper defendant in handling seven thousand tons of coal daily, and the land cannot be used for farming or commercial purposes, being a sunken meadow.
    On motion for mandatory in junction. On bill and affidavits.

      Mr. William II. Osborne and Mr. Edward S. Savage, for the complainant.

      Mr. Ephraim Gutter, for the defendant.
   Howell, V. C.

This is a motion for preliminary injunction to compel the Port Beading Bailroad Compaq, the sole defendant, to remove a bulkhead and other obstructions erected by it across the mouth of Thorp’s creek, a small natural water course which empties into Staten Island sound, and also to compel the company to likewise remove a dam which it has built across the same creek a short distance above its mouth and to till up a ditch through which the water of the creek has been diverted from a point above the dam to Staten Island sound.

The controversy centres about the ownership of a piece of land containing about three acres which lies between Thorp’s creek and Staten Island sound and at their point of junction.

The land in question is bounded on the north by Thorp’s creek, and on the south by Staten Island sound; at the east it extends to the junction of the creek with the sound, and at the west it is bounded by Winant’s meadow. A diagram is annexed to the bill showing the general situation.

The complainant claims to own an undivided half interest in this land by virtue of a deed made to him on January 6th, 1906, by Albert Bruns and wife. He states that his title to this half interest is deduced from a deed made by William H. Butan to Israel Oakley, in 1846, but which was not entered for record in the clerk’s office of the proper county until March 27th, 1902. But he does not give any of the intervening conveyances nor in any manner show how Bruns derived title from Oakley.

The defendant claims that it purchased the whole of the tract of land in question on September 30th, 1890, from Lewis N. Meyer, who, on that day, conveyed the same to Cordon Chambers, an employe of the railroad company, who, on December 9th, 1890, conveyed the same to the railroad company. In these deeds from Meyer and Chambers the lands are described as “all that certain lot of salt meadow situate at Sunken Marsh in the said township, bounded by Thorp’s creek on the north, the sound on the east and the meadow of dames J. Winant on the south, containing one and one-half acres, more or less.”

The defendant further claims that by these deeds it took title to the whole of the said premises and that it had no notice of the deed from Rutan to Oakley, the same not having been recorded at the time of the railroad company’s purchase.

The complainant asserts that inasmuch as the deed to the railroad company described the land as containing one and one-half acres it must be inferred that the grantor meant to convey, and the railroad company meant to purchase, an undivided one-half interest in the three acres in which he claims to have the other undivided half interest.

It does not appear that the complainant or his predecessors in title were ever in possession of any portion of the disputed territory or that there was anything on the land at the time of the railroad company’s purchase to indicate either possession or ownership of any character which would amount to notice to the railroad company of the outstanding unrecorded deed. On the contrary, the railroad company claims that it took possession of the land immediately on its purchase in 1890; that it built its terminal adjacent thereto in 1892, and that in 1896 it constructed across the mouth of Thorp’s creek a bulkhead, built of piling, on which it laid a platform, and that on the platform were constructed several offices and storehouses, all of which are used by the railroad company which operates the Port Reading line in connection with the conduct of its business at its Port Reading terminal. The bill admits that the defendant has held possession of the whole tract since 1892.

The relief sought is not merely ¡orohibitive and preventive; the complainant seeks to compel the defendant to forthwith remove its bulkhead and office buildings so as to leave the mouth of the creek unobstructed. The application is, therefore, for a mandatory injunction to coerce the defendant into active and affirmative measures looking to the breaking up of the obstructions complained of and the freeing of the mouth of the creek so that it may be navigated by boats of a size suitable to its capacity.

The law and practice touching the issue of mandatory injunctions in our state is thoroughly well settled.

In Lord v. Carbon Iron Manufacturing Co., 38 N. J. Eq. (11 Stew.) 458, Vice-Chancellor Van Fleet said:

“Injunctions of this nature are rarely granted before final hearing or before the parties have had a full opportunity to present all the facts of the case in such manner as will enable the court to see and judge what the truth is. They are always granted cautiously and are strictly confined to cases where the remedy is plainly inadequate.”

This language was quoted with approval by the court of errors and appeals in the case of Bailey v. Schnitzius, 45 N. J. Eq. (18 Stew.) 184.

To this may be further added the requirements that the invasion of the right must be a material and substantial one, or, in other words, that the damage shall be irreparable, and that the right of the complainant must be clear and unmistakable on the law and the facts, and there must exist an urgent and paramount necessity for the issue of the writ in .order to prevent extreme or other serious damage which would ensue from withholding it. Longwood Valley Railroad Co. v. Baker, 27 N. J. Eq. (12 C. E. Gr.) 166; Hodge v. Giese, 43 N. J. Eq. (16 Stew.) 342.

As an example, the case of Broome v. New York and New Jersey Telephone Co., 42 N. J. Eq. (15 Stew.) 141, may be cited. It was there held that the writ would issue where there was a deliberate, unlawful and inexcusable invasion by one man of another’s land for the purpose of continuing a trespass for the trespasser’s gain or profit and there had been neither acquiescence nor delay in applying to this court for relief.

There the injury was material, the complainant’s right clear, and there was an urgent necessity to prevent that degree of irreparable damage which otherwise would have ensued.

Chancellor McGill has collected the cases on the subject in National Docks Railway Co. v. Pennsylvania Railroad Co., 54 N. J. Eq. (9 Dick.) 10.

Such being the law and practice of this court with regard to the issue of mandatory injunctions, we are led to inquire, as the first prerequisite, whether the complainant’s right is clear. That an injunction will not issue unless the right is clear and unmistakable is a fundamental rule which applies to the issue of prohibitory injunctions, and a fortiori to injunctions mandatory in their character.

The submitted affidavits do not set out a title in either party which would support an action of ejectment. But inasmuch as the defendant is in actual possession of the premises, so far as its possession can be had by anybody, and that possession has continued since 1890, and the complainant and his predecessors in title do not appear ever to have been in possession of any part of the property, T can hardly say that the complainant’s title under his deed is clear and unmistakable. In fact, it appears to me, from the very meagre facts before me, to be extremely doubtful; at any rate, it is of such a character as that in my mind it is insufficient on which to found a mandatory injunction. Dobleman v. Gately & Hurley Co., 64 N. J. Eq. (19 Dick.) 223.

But supposing, the question of title to have been disposed of in favor of the complainant, is it necessary for his protection in the enjoyment of his inheritance that the mandatory writ should go immediately against the defendant to compel it to remove forthwith what he terms “the obstructions” placed by the defendant in the way of navigating the creek? It must be remembered that the complainant did not get his supposed title until January, 1906; that the defendant, the railroad company, had then been in possession of the land for nearly sixteen years; that nearly all the constructions and obstructions complained of were erected about fifteen years ago ; that none of the predecessors in title of the complainant ever took any proceedings during the whole of this period looking to the opening of the mouth of the creek; that the erections are in daily use by the company which operates the Port Reading line in the conduct of its business; that the bulkhead cost, originally, $10,000, and that it would cost at least $4,000 to remove it; that its removal would hamper the operating company in the handling of about seven thousand tons of coal a day; that the land is of such a character as that it cannot be used for farming or commercial purposes, it being described as sunken meadow, and that the complainant is out of possession. When all these things are considered, it must be quite apparent that there is no immediate necessity for an injunction to protect the complainant’s rights.

If, therefore, the complainant’s right is in doubt, and he can show no immediate necessity for the interposition of the court, he fails in two material points, and the writ must be denied at this time.


text:
    William T. Francisco, petitioner, v. Lillian F. Francisco.
    [Submitted July 30th, 1907.
    Decided August 9th, 1907.]
    1. Laws of 1902 (P. L. 1902 p. 268 § 7) provide that when the court of chancery has jurisdiction over the custody of minor children of parents living separate, and the children are residents of the state, they shall not be removed out of its jurisdiction against their own consent, if of suitable age to signify the same, unless the court on cause shown shall otherwise order. A husband living separate from his wife brought habeas corpus for the custody of his minor children, residents of New Jersey. The husband was a resident of New York. A child fourteen years old testified that she preferred to live with her mother. The other children, aged eleven and nine, and who were intelligent, stated on their examination that they desired to remain with their mother. — Held, that the court could not order the removal of the children from the state in the absence of any special reason therefor.

      2. The court on habeas corpus proceedings by a husband living separate from his wife, for the custody of their minor children, cannot impose on the husband residence in the state as a part of a decree awarding him the custody of the children.
    3. The court on habeas corpus proceedings by a husband living separate from his wife, for the custody of their minor children, may, as authorized by P. L. 1902 p. 264 § 12, decree to the husband the right of access to the children, though he does not specifically pray therefor in his petition.
    4. The court on granting to a non-resident husband the right of access to his children in the custody of his wife, from whom he had separated, would prohibit the mother from taking the children beyond the limits of the state without a special order therefor.
    On habeas corpus concerning the custody of three minor children.

      Mr. Alfred S. Badgley and Mr. Isaac Sargent (of the New York bar), for the petitioner.

      Mr. Wayne Dumont, for the respondent.
   Howell, V. C.

The parties to this litigation are husband and wife.

The subject-matter is the custody of their three children — • Rena, aged fourteen years; Cyrus, aged eleven, and George D., aged nine years. There are two other children of the marriage who are living, Clarence, aged twenty-two years, and William, who is in his twenty-first year.

The parties were married on January 19th, 1884. They lived together in this state and in New York until 1903 or 1904, when they finally separated, the husband going to New York City, where he now resides, and the wife remaining at Upper Montclair, in Essex county, where she now resides.

Since the separation the wife has had the custody of the children and has maintained and supported them without any assistance from the husband. Upon the separation all the five children remained in this state with the mother, and, as to the three younger ones, over whom this controversy is, it is important to observe that they were born at Upper Montclair, in this state, and have always lived there, excepting for short periods of absence in Connecticut. They hence fill the statutory description of natives of this state who have resided five years within its limits. It appears that a few months ago, for some unexplained reasons, the wife gave up housekeeping and went with the three children to live with her mother, who was represented to be a woman of considerable means, and the children are now being supported by their grandmother.

The seventh section of the statute, which authorizes this proceeding (P. L. 1902 p. 259), provides that when the court of chancery has jurisdiction over the custody of minor children of parents living separate, and such children are natives of this state, or have resided five years within its limits, they shall not be removed out of its jurisdiction against their own consent, if of suitable age to signify the same, * * * unless the court, upon cause shown, shall otherwise order.

To grant the prayer of the petition and give the custody of the children to the father, who is a resident of the State of New York, unless by consent of the children, if they are of proper age to express their wishes, would be to fly in the face of the statute and nullify its provisions.

The children were produced in court for a special examination after the case was closed and argued. They were examined with special reference to the statute and their own desires as to their custody and removal from the state. Eena will be fourteen years of age in October. She is, undoubtedly, of sufficient age to determine for herself whether she prefers to live with her father in New York or with her mother in New Jersey, and she quite strongly expressed a preference to remain with her mother. The other two children, Cyrus, aged eleven, and George D., aged nine, were examined in the same manner. They are intelligent boys and understood that they were being questioned for the purpose of ascertaining what their wishes were, and they both declared in favor of remaining with their mother. They were well dressed and appeared to be well taken care of, and they have been regularly sent to a nearby public school and to Sunday-school.

I am of opinion from this test of their understanding that they all are of suitable age to signify their- assent or their dissent to a removal from the state, and, having dissented, I think that in the present situation of affairs they cannot be forcibly taken from the state. I do not mean to say that the power of the court is absolutely limited to the wishes of the children in these circumstances under the statute. The statute gives the court the power, on cause shown, to so remove them, having in mind always their welfare. In this case, however, there was no attempt made to show any special reason for their transportation to another state.

It is true that at the argument the father, through his counsel, announced that if the children were given to him he would be willing to make a home for them in the State of New Jersey, and would remove to the state for that purpose whenever so directed by the court.

I think that the court ought in this case to deal with the situation as it was at the time of the filing of the petition. At that time the petitioner described himself therein as a resident of the borough of Manhattan in the city, county and State of New York, and demanded that the absolute care and custody of the children should be committed to him. I do not think that the court can impose upon him residence in New Jersey as a part of a decree awarding him the custody of the children.

But if this statute did not exist, I should he loath to take the children from the custody of their mother under the circumstances disclosed by the evidence, and for the reasons stated in the petition.

The petition charges the- mother with maintaining improper relations with one Talbot during the short time she was residing in Connecticut, and subsequently at Upper Montclair in this state, and the return to the writ charges the husband with similar improper relations with a young woman who was in his employ during the short time that he resided at Westwood, in Bergen county. Considerable testimony was taken by both sides for the purpose of proving these charges and recriminations. I am not satisfied from the proofs that the mother is not a proper person to retain the custody of these children. I do not think that misconduct was proved against either the husband or the wife.

I shall decline to grant the prayer of the petition, hut the petition will remain on file and the proceedings open, so that application may be made to the court from time to time touching the custody and maintenance of these children in case subsequent events should make it advisable to take action thereon.

■The husband in his petition omits to pray for access to the children in case of his failure to obtain their custody. The twelfth section of the act referred to provides that when husband and wife shall live in a state of separation, without being divorced, the chancellor on habeas corpus may not only award the custody of the minor child of the marriage, but may also make such order relating thereto for the access of either parent to such child at such times and under such circumstances as he may decree expedient. .Belief may be had under this section notwithstanding the omission to specifically seek it by petition.

The father has undoubtedly a right of access to these three children at all proper and convenient times and places, and an order will be made for that purpose in such form and to such extent as counsel for the parties may be able to agree upon. If they are not able to so agree the court will make such an order as may seem expedient and proper.

Becurring again to the seventh section of the statute, which prohibits the removal of the children out of the jurisdiction of this state without their own consent, I may say that this prohibition applies to the mother as well as to the father. The children are here, and before they are removed by the mother to any other jurisdiction the court must be satisfied that they go freely and by their consent. The father has a right to have them remain here, and cannot, without the order of the court, be compelled to visit them elsewhere. In any order that may be made provision must be included prohibiting the mother from taking the children beyond the limits of the state without a special order of the court for that purpose.


text:
    Elmer A. Darling v. Mayor and Aldermen of Jersey City.
    [Submitted August 7th, 1907.
    Decided August 27th, 1907.]
    1. Complainant was the owner of a tract of land in defendant city, which had its surveyor make an official block and lot map of the city, and thereafter adopted the map so made. Complainant subsequently platted the land and sold a number of lots, some of which fronted on streets delineated on the official map, which was referred to in the deeds. — Held, that neither the making nor the adoption of the map was sufficient to evidence an acceptance of a subsequent tender of dedication, if any, of the Streets.
    . 2. While a tender of -a dedication of streets and alleys on platted land c'annot be revoked, but may be accepted by the municipality at any time, yet, until acceptance, the fee title and control of the property remain in the dedicator.
    3. Until a tender of a dedication of streets on platted property is accepted by the city, the latter has no right to interfere with the use by the dedicator of land lying within the lines of the streets.
    4. The burden of proving acceptance of a dedication of streets on platted land is on a city alleging it.
    5. Where the owner of platted land sought to enjoin a city from interfering with his use of land lying within the lines of streets laid out on a map of the property, an answer, alleging a tender of dedication of the streets and acceptance by defendant, and setting out the acts of acceptance on which defendant relied, did not, of itself, operate as an acceptance of the alleged tender.
    On final hearing. On bill, answer,, replication and proofs.

      Mr. John R. Hardin and Mr. Henry V. Gondict, for the complainant.

      Mr. J. Merritt Lane, for the defendant.
   Howell, Y. C.

The complainant files his bill to enjoin the city of Jersey City from interfering with the erection, by him, of dwelling-houses on seven plots of land lying within the limits 'of that municipality. The city claims that the lands in question were dedicated by the complainant to public uses as public highways, that such dedication has been accepted by it, and that therefore the complainant cannot lawfully encumber the land with dwelling-houses, or use it at this time in any manner inconsistent with its use as a public highway.

The facts are these: In 1889 the complainant became the owner in fee of a large tract of land in the city of Jersey City, which embraces the land in question. At that time it was farming land, over and across which two streets had been laid out and graded. These streets were Duncan avenue and Gautier avenue. Three of the plots of land in question represent twelve city lots fronting on Duncan avenue and an intermediate street called Condict street; two others represent eight city lots lying between Condict street and Gautier avenue, ánd the remaining two represent four city lots fronting on Gautier avenue. The property was used as a farm- until 1895, about which time the complainant plotted the land into lots and streets and began selling the same off in small parcels. It now appears that a considerable portion of the original tract has been sold by the complainant to a large number of people.

In 1894 the city of Jersey City directed the city surveyor, Mr. Fowler, to construct an official block and lot map of the city. This map, when finished, was in the same year ratified and adopted by the various city boards, and it’ wás filed with the custodian of the map department connected with the tax commissioner’s office, and remains there, a public record of the city of Jersey City, and is now called “Fowler’s Official Assessment Map of Jersey City of 1894.”

Of all the deeds of conveyance made by the complainant for lots out of this original tract twelve in number are for lands fronting on streets which are delineated on the Fowler official assessment map, and these twelve refer to this map in the following, or like, words, at the end of the particular description of the lots conveyed:

“Being known as lot numbered six (6) in city block No. 233-1661, on the official assessment map of Jersey City,” using the appropriate descriptive numbers in each case.

The complainant caused a map of his large tract of land to be made, a copy of which is annexed to the bill of complaint. It does not distinctly appear by the evidence when this map was made, but it was probably made about the same time as the Fowler official assessment map, and its lines, so far as the disputed property is concerned, are co-terminous with the lines shown on the Fowler map.

The Fowler map shows that three of the disputed plots lie within the boundaries of Olean avenue, one within the boundaries of Belvidere avenue and three others within the boundaries of Nunda avenue, and to be respectively parts of these streets.

Later on the complainant entered into a contract to sell some portion of the land in dispute to one Thomas Hill. .He objected to the title on the ground that Olean avenue passed through the property for which he had contracted. Thereupon the complainant, conceiving that there might be some force in Mr. Hill’s objection to the title, filed a bill in this court under the act of 1870 to quiet the title to the seven tracts in dispute. The defendants were the city of Jersey City, the twelve grantees whose deeds referred to the Fowler official assessment map, and other persons who it was supposed might have an interest There was neither appearance nor answer in that suit, and on February 3d, 1906, the bill was taken as confessed as against all the defendants, and on the same day, and by the same decree, it was adjudged and decreed by this court that the defendants, and each of them, had no estate, interest in or encumbrance on any part or parcel of said lands and premises, and that in respect to said lands and premises so far as related to any claim thereon by or on behalf of any of the said defendants, the title of the complainant in and to the same and every part thereof was thereby determined, fixed and settled and declared to be good.

In the summer of 1907 the complainant began the erection of a row of houses on the lots fronting on Duncan avenue. These houses, or some of them, cover some portion of three of the lots in question. The city of Jersey City, conceiving that the complainant was trespassing upon dedicated and accepted lands, by its officers, interfered with the work of construction, and thereupon the complainant brings this suit to enjoin the city from interfering with the work. The city, by its answer, admits the commencement of the construction of the houses, and that the proper officers of the city gave instructions that the work should be stopped until the rights of the public in the street should be determined. It alleges that the property upon which the houses mentioned are being constructed are public streets, and that the complainant has no right or title therein.

The complainant claims to own the land. He alleges that he has not dedicated it, but that, if it should be found that there had been a dedication, then that there was no acceptance, and that the decree in the suit to quiet title cut out the rights of the public to whose uses the dedication was, and that he, therefore, should not be interfered with by the building department of the city.

The city, on the other hand, claims that by virtue of the reference contained in the twelve deeds to the Fowler official map there was a tender of dedication by the complainant. The only acceptance alleged is the use of the street by the public and the adoption of the Fowler official assessment map of 1894 by the board of street and water commissioners and by the commissioners of assessment. The making and adoption of this map was prior to the making of the deeds which refer to it, and, while this situation may be evidence of a tender of dedication, it is impossible for me to understand how the making and approval of the map can be any evidence of an acceptance of the later so-called dedication. Neither do I find elsewhere in the case any conclusive evidence of any acceptance of any supposed dedication of the lots in question as public highways of the city. The answer puts it on the making of the deeds, the use of the street by the public, the adoption of the map, and the non-taxation of the property; but, in my opinion, none of these things is sufficient to evidence an acceptance, nor will all of them together have that effect.

Suppose, for the sake of the argument, that the complainant did dedicate these lands to public uses and that such dedication has not been accepted, what, then, is the situation? I understand the law to be that a tender of a dedication cannot be revoked (Hohokus v. Erie Railroad, 65 N. J. Law (36 Vr.) 353); that it may be accepted by the municipality at any time, but that until the tender has been accepted and the dedication has -ripened into a public right and a public obligation the fee-simple title and the control of the property remain in the dedicator and he may use it as he will, provided he does not in any way interfere with the right of the public to accept 'the dedication whenever it sees fit to do so. De Groot v. Jersey City, 55 N. J. Law (26 Vr.) 120; Pease v. Traction Company, 69 N. J. Law (40 Vr.) 165.

The facts above detailed raise several new and interesting questions, all of which are questions that should be heard and decided according to the ordinary course of the common law. Such are (1) Was there a dedication? (2) Was there an acceptance? (3) What is the effect of the decree to quiet title upon the rights of “the public ?” (4) What is the nature and scope of the statute of 1870 to quiet the title, and does it include within its purview suits in which the mere inchoate right of the public may be concerned? (5) If the complainant cannot revoke the supposed dedication after it has once been tendered, can he' call in the aid of the court to do by decree what he is otherwise prohibited from doing, or what is the difference between his application to the court to restore his land to him, and an attempt to retract his dedication in any other way ?

There may be other questions, but these should not be passed upon by this court; they are practically questions of title. In Clark v. Elizabeth, 40 N. J. Law (11 Vr.) 172, the question of dedication came before the law court on an appeal from the award- of commissioners. When the city of Jersey City shall open and regulate the streets, which it is claimed include the lands in dispute, the points now raised can be litigated before the proper tribunal.

It is quite plain, therefore, in any aspect of the case, that the injunction prayed for must issue. If the complainant owns the land in fee-simple there is no public right in it. Then certainly the city of Jersey City has no authority to interfere with the complainant’s use of his own land. If there has been a dedication and no acceptance the case stands much in the same way. The inchoate and uncertain thing which may ripen, but has not yet ripened into a public right, will not justify an interference with the private right of present possession. The burden of convincing the court of the solidity of the city’s assertion of title is on the city; title in the complainant once fixed by the conveyance to him must be presumed to continue in him until the contrary shall be shown affirmatively.

It may be. said that the claim made by the city in its answer is equivalent to or operates as an acceptance of the supposed tender of dedication, just as the bringing of an action of ejectment by a municipality would amount to an acceptance, but in my opinion it is not so. In the first place, this suit must be heard and decided as of the date of its beginning before the answer was put in; and in the second’ place, the answer sets out the acts of acceptance on which it now relies. These acts I have already alluded to, and I have ventured the opinion that they are not sufficient, in themselves, to charge either the landowner or the municipality.