author: Magie, Chancellor.

text:
    William H. Laird et al. v. Atlantic Coast Sanitary Company of Long Branch.
    [Argued September 17th, 1907.
    Decided October 8th, 1907.]
    1. The provisions of section 112 of the Chancery act of 1902 do not repeal or modify the effect of Rules 118 and 150, which forbid the issue of process of injunction upon a final decree until after the expiration of ten days from the filing of the decree.

      2. During said ten days no process of injunction on a final decree can issue except on an order of the court.
    3. After appeal taken from such a decree no process of injunction can issue except on an order of the court.
    4. On application for an order directing such process to issue, if it appears on the face of the proceedings, or is otherwise made to appear, that such process would destroy the subject-matter of the litigation and leave nothing but an abstract question to be passed upon by the court of errors and appeals, the order should be refused.
    5. If, after any such order directing the issue of such process, the defendant conceives that it would have the effect above mentioned, he may apply for an order to suspend or modify the operation of the process, under section 112 of the Chancery act of 1902.
    On motion to vacate order.
    A final decree for an injunction was filed in the above cause on August 3d, 1907.
    On August 13th, 1907,- an injunction was sealed and issued from the clerk’s office. No direction or order for the writ had been made, either under Rule 118 ot Rule ISO. On August 13th, 1907, a notice of appeal from the decree was filed, of which due notice was afterward given to defendant.
    It having been represented to the -court that the writ of injunction had been inadvertently issued (being issued before the expiration of ten days from the filing of the decree), an order was made on August 33d, 1907, vacating and setting aside the writ.

      Mr. Frederick Parker, for the motion.

      Mr. Thomas F. Fay, contra.

   Magie, Chancellor.

The motion now made is in the alternative. It applies (1) for an order either to vacate or modify the order of August 33d, 1907, vacating the injunction issued on August 13th, 1907, or (3) to direct that an injunction now issue according to the decree.

Unless the contention of complainants’ counsel as to the effect of the legislation contained in section 112 of the Chancery act (Acts l&OJB p. 6b[8 c. 168) is well founded, the order of August 22d ought not to be disturbed. The writ of injunction was issued in violation of Eules 118 and 150. The complainants ought not to gain any advantage because the clerk’s office inadvertently sealed and issued the writ.

The contention for the complainants is that the legislation above referred to has repealed or modified Eules 118 and 150, so that an injunction directed by a decree may be sealed and issued before the expiration of ten days from the filing of the decree and without any order or direction of the court.

I am unable to agree with that view of the scope and effect of the legislation in question. By its terms it does not apply to the issuing of writs of injunction, but only to the effect to be given to an appeal taken from a decree or a writ issued thereon. It would be applicable to an injunction issued by the order of the court during the ten days’ period provided for by the rules, or to one issued after the expiration of the period. It provides that an appeal shall not suspend or modify the operation of an injunction without the order of this court or the court of errors and appeals, and prescribes that such suspension shall extend only so far as is necessary to preserve the subject-matter of the appeal.

As the rules in question remain unaffected by the legislation referred to, the writ of injunction was improperly issued on August 12th and its vacation will not be set aside.

It remains to consider the other part of the application.

The practice with respect to issuing process on a final decree after an appeal has been filed, has been well recognized in this court, and is laid down by that distinguished equity judge, Chancellor Green, in Schenck v. Conover, 13 N. J. Eq. (2 Beas.) 31. The rule is that after-an appeal is taken, no such process can issue until after the order of the court.

Counsel for defendant insists that the power of the chancellor to direct the issue of process of injunction upon a decree for that purpose, after the filing of an appeal, has been declared to be improper by the court of errors and appeals in Pennsylvania Railroad Co. v. National Docks Railway Co., 54 N. J. Eq. (9 Dick.) 647. Such a view of the decision in that case frequently has been indicated by the bar. It has been conceived that the decision indicated that the filing of an appeal deprived this court of the power of proceeding with the case before it, and even where the appeal has been taken from some interlocutory order or decree. In my judgment, there are no expressions in the opinion delivered by Chief-Justice Beaslej-, speaking for the court of errors and appeals, that' ever justified such an inference, and I think that the court has expressly repudiated such a construction in Morton v. Beach, 56 N. J. Eq. (11 Dick.) 791, where the taking of an account directed by an order of the court which had been appealed from, was held not to be erroneous, and a decree made upon the report upon the accounting was declared to be unimpeachable.

At the same time, there are expressions in that opinion which seem to be broader than were required by the case presented. The case presented to the court related to a decree which required the Pennsylvania railroad to remove certain ears which were impediments to the building of the tunnel which this court had found that the National Docks company had a right to build, and also restraining it from interfering with the National Docks company in the construction of the tunnel. The railroad disregarded the mandatory part of the decree and practically the restraining part also. Thereupon this court found the railroad company guilty of contempt and was about to ehforce obedience to its decree. It was quite obvious that if the railroad company should have been compelled to immediately obey the decree, the effect of the appeal would have been nullified, for the tunnel would have been constructed before the appeal could have been brought to hearing and a determination thereon could have been reached. This result was deemed by the court of errors and appeals to be erroneous in view of the constitutional attributes and functions of the court as a court of review of the judgments and decrees of the court of chancery. In this view a large majority of the court concurred, and as one of the judges who then sat, I have never been able to perceive how any other result could have been reached without destroying the appellate jurisdiction of that court in this class of cases.

But it was never intended to extend the action in that case beyond the class of cases then presented, viz., where the decree of this court, or the process issued thereon, would, if not affected by the appeal, absolutely destroy the subject-matter of the litigation and leave nothing except an abstraction to be passed upon by the reviewing court. This, I am sure, was the view of the judges who took part in that decision, and if there are expressions in the opinion of the learned chief-justice which can properly be deemed of broader import, I think they would not have met the views of the majority taking part in the decision. At all events, they were not called for by the case presented or the determination arrived at.

Since that time, I apprehend that this court is limited in its issuing of process upon a decree appealed from to this extent. It ought not to direct the issuing of such process if it appears to it that the effect would be to substantially destroy the subject-matter of the litigation and prevent the effectiveness of an appeal, and if it should issue the writ where such clearly appears to be the effect, it would be reversible error, and an attempt to enforce the process so issued and having such effect, by proceedings for contempt, would also be reversible error.

Applying the doctrine of that case as I understand it, I see no reason why the issuing of a process of injunction to enforce this decree will destroy the subject-matter of the litigation between the parties. The decree is upon a bill filed to abate a nuisance affecting the persons and property of the complainants. It does not direct the destruction of the building from1 which the noxious and injurious odors come, which are held to cause the nuisance, nor does it direct the cessation of the use of the plant for the cremation of garbage used by the defendant company. All that it does is to enjoin that company from using the plant so as to produce a nuisance. This only states a proposition which must be recognized as declaring the liability of the defendant.

The decree has been made upon the advice of an advisory master. Prima facie, it justifies and requires the issuing of process to enforce it, unless it is made to appear that enforcing the decree pending the appeal will fall within the National Docks ease as I have interpreted it. There is nothing produced on the part of the defendant to indicate such a result. That in directing the issue of the writ under these circumstances I am following the correct practice, I think may be considered to be intimated, by the legislative mandate contained in section 113 of the Chancery act. By that section the appeal is not to suspend the operation of the decree if the enforcement of the decree will not destroy the subject-matter of the suit. But if that is shown to be the case, in whole or in part, the injunction may be either suspended or modified for that purpose.

I shall therefore direct the issue of this process, and if the defendant company conceives that its effect will be to destroy, in whole or in any substantial part, the subject-matter of the appeal, it may apply, upon notice, for a suspension or modification.


source: Caselaw Access Project

license: Public Domain

text:
    William G. Halkett v. Leonard Young et al.
    [Argued July, 1907.
    Decided October 8th, 1907.]
    1. In a contest between mortgagees in foreclosure proceedings a junior encumbrancer is entitled to enforce the rule as to marshaling securities as against a prior encumbrancer to a building and loan association holding in addition to its real estate mortgages certain shares of its own stock assigned to it as collateral security simultaneously with the making of its said mortgages, where it is clear from the evidence that the sole purpose of the assignments of such shares of stock at the time of the making thereof was to protect and secure the repayment of the loans then made.
    2. In such case the mortgages held by the association must be treated as building and loan association mortgages, as between the mortgagor and anyone claiming under him and the association, although not made in the ordinary form in which mortgages to such associations are usually drawn, but in such form as mortgages would be made by one person to another for an ordinary loan.

      On exceptions to master’s report.

      Mr. William M. Clevenger, for the complainant.

      Messrs. Godfrey & Godfrey, for the Mutual Building and Loan Association of Atlantic City, defendant.
   Magie, Chancellor.

The exceptions to the master’s report were brought to hearing-before Yice-Ohancellor Grey upon the last day on which he sat at chambers. lie immediately dictated an opinion indicating his view that the exceptions should be sustained. This opinion was never revised, nor was any order sustaining, the exceptions advised. The matter was brought to my attention after the death of the vice-chancellor, and has been re-argued before me.

The situation of the case is this: Complainant' filed his bill to foreclose a mortgage given to him by Leonard Young and wife, upon property in Atlantic City. There were, at that time, three previous encumbrances upon the property. The first was a mortgage held by Mrs. Hand, who, being a party to this bill, consents to its being included in the decree. The second was a mortgage for $900 to the Mutual Building and Loan Association of Atlantic City.1 The third was a mortgage for $300 to the same- association.

The contested question in this case relates to the association mortgages. At the time they were made, Young took out shares of stock of the association and assigned the same to it as collateral security for the moneys loaned to him. The contention of'the complainant is that3he is entitled in equity to have the value of those shares credited upon the sums due to the association upon the bonds of Young secured by both the mortgages and the assignments of stock. There is no contest but that Halkett, as a junior encumbrancer, has a right to require the prior encumbrancer, holding security upon two funds, to have the funds marshaled so that the superior lien should be satisfied, so far as may be, out of the fund upon which Halkett has no claim. Unless the evidence discloses that the association, before it had actual notice of Halketfs mortgage, had acquired some legal or equitable title to the shares so assigned to it other than the title acquired as security for their two mortgages, I think the settled rule should be applied, and the sole question is whether, upon the proofs, it appears that the association has acquired any title to those shares which will prevent the operation of the doctrine.

The two mortgages to the association were not made in the form in which mortgages to such associations are usually drawn. They were such mortgages as would be made by one person to- another for an ordinary loan. They were payable at a definite time and required the payment of interest half yearly. Notwithstanding their form, I think the evidence requires that they be considered as loans made by the associations under the power conferred by the legislation creating such associations. The evidence discloses that Young was required by the association to become a shareholder therein and to assign to it the shares taken as security, that on the books of the association Young was monthly charged with dues and fines on the shares, and also with monthly interest and premiums on the loans. The premiums required to be paid upon the loans amounted to- eight per cent, thereon, which would make the transactions usurious unless these mortgages are treated as building and loan association mortgages. As between Young and anyone claiming under him and the association, I think they must be so treated.

The evidence further discloses that, at the time the loan of $900 was made by the association to Young, he was required to take out, and did take out, seven shares of the stock of the association. Upon the plan of organization, shares of the association became of the value of $300 each at maturity.

The first mortgage upon the property on which the $900 loan was secured was $1,200. The seven shares of stock, it appears by the evidence, were required not only to secure the loan of $900, hut to save the association from loss upon the first mortgage of $1,200. When the loan of $300 was made by the association, Young was required to take out, and did take out, an additional share of stock of the association. At the time of each loan Young assigned the shares of stock which he had been required to take out to the association. The assignments in each case were absolute on their face. There was no indication in the assignments 'that they were made as collateral security to the respective loans. But the evidence renders it perfectly clear that the sole purpose of the assignments at the time they were respectively made, was to protect and secure the repayments of the loans simultaneously made.

Afterward, and before Young made the mortgage to the complainant, the association loaned to Young $2,250, upon a mortgage upon other land than that on which Halkett took his mortgage; and at the time of that loan, Young took out and assigned to the association eight additional shares of its stock as collateral thereto. The association contends that the shares of stock previously assigned to it to secure the $900 and $300 loans are held by it to further secure the loan of $2,250.

It having appeared that the first two assignments of seven shares and one share were, in equity, made to secure the respective loans the owner thereof had a right to assign them absolutely or to secure the subsequent loan of $2,250, but in my judgment, there is no evidence that any assignment of those shares to secure the later mortgage ever took place. Mr. Young evidently did not contemplate the last mortgage at the time of the two' first loans. There is nothing to indicate that when the last loan was procured, Young agreed that any shares of stock should be held by the association to secure that loan other than those which were simultaneously taken out and assigned. In Young’s application for the loan of $2,250 he proposes to assign to the association, as collateral security therefor, eight shares of its stock in another series than those in which the previous shares were held by him. There is evidence from the secretary of the association, that the association understands that the stock assigned to it may be held by it to secure any indebtedness, present or future, of the assignor. This claim cannot be supported except upon proof that the assignor, subsequent to the first assignment for a particular purpose, has knowingly assented to the association holding the stock for a new loan. In the absence of such proof I think the assignments to the association to secure'the $900 and $300 loans have impressed the stock with the function of securing those respective loans and no others, and that Halkett is entitled in equity to have the value of that stock credited upon the amounts due upon the association’s two mortgages, to the exoneration of the real property upon which Halkett”s mortgage has been made.

■ This seems to be adverse to the opinion of Yice-Chancellor Orey, but I am satisfied that had he come to revise and correct that opinion he would not have advised a decree to sustain the exceptions.

In my judgment the exceptions must be overruled and the report confirmed.


author: Pitney, Y. C. Pitney, Y. C. Pitney, V. C.

text:
    Emily Schultze v. Frederick A. G. Schultze.
    [Decided May 28th, 1907.]
    Defendant, after divorce because of his adultery, married his paramour, and his three children were awarded to the custody of the mother, defendant being directed to pay her alimony, which he did intermittently.— Held, that while the order might be modified to allow a boy, after arriving at the age of sixteen, at his request, to go with his father, the other two children, a girl of fourteen and a boy of ten, would be allowed to remain in the care of the mother.
    On petition of defendant for custody of children and order to show cause and affidavits on each side.

      Mr. James D. Carton, for the complainant.

      Mr. James W. Miller, for the defendant, petitioner.
   Pitney, Y. C.

(orally).

The girl is fifteen years old; she is of an age to choose for herself. I have talked with her privately; I have seen her, and I shall decline positively to make any order with regard to her. That ends that. If she chooses to go with her father she can go. I know about the case. I think that it is very likely that the second Mrs. Schultze is a very decent woman, in a way, as decent as such a woman can be with the history that I know of her. I mean the second Mrs. Schultze. But I shall positively decline to make any order with regard to the girl.

I will hear you farther, if you, Mr. Miller, have anything to suggest about the boy. I have examined him privately and find he does not wish to leave his mother and go with his father. The affidavits of the defendant show that — if there is any reliance upon human evidence — this woman is bringing up her children property, as well as she can on the scanty means she has, and the children both go to school. Their teachers say they stand high in their classes. You have read the affidavits, I suppose. The court looks entirety to the welfare of the children. That is as thoroughly settled as anything in the State of New Jersey can be. When it comes to ordering as to the custody of a girl fifteen years old you come into a different atmosphere and a different line of law entirely. When a child passes fourteen the general rule is they have a choice as to the guardianship and custody, and I positively decline to make any order now, once for all, with regard to the girl.

I will hear you about the boy. If the girl chooses to go with her father I have nothing to say; but she don’t, doesn’t want to go with him; she doesn’t want to go and be under the control of his wife, and I certainty honor her for it.

(Mr. Miller, on behalf of the defendant, petitioner, was here heard at length.)

Pitney, Y. C.

This ease stands in this wise. The petitioner, Mrs. Schultze, Mrs. Emily Schultze, and the defendant were married a great many years ago, and had three children. They were then very poor. They are all foreigners. I believe the husband was unable, at one time, to earn anything for his living, for at the. trial of this cause the petitioner produced letters from her husband to her in which he begged her to sing in ordinary saloons or anywhere, to get money to pay living expenses, to pay money to him in order to live. She was a devoted wife. I do not say that he was not an industrious man, trying to do the best he could. But she was a devoted wife. They had three children; a boy, a girl and a boy. Finally he got a position as immigrant agent for the New York Central railroad, or some other railroad, whose business was at Hoboken. He went to live there.

Now, the present Mrs. Schultze was not, at that time, a good housewife. She did the best she could. She was a musical character, and she was not what you call a business man’s wife, and, perhaps, she didn’t keep things as tidy about the house and her children as she would desire to do. But, be that as it may, about that time the husband became infatuated with Miss Meyer, and neglected his wife, and stayed away and ran with this Miss Meyer, lived with her in an apartment over in New York City until, his wife hunted him up and ran him down, and caught him in the act, so to speak.

He was spending his money on this other woman and was neglecting his family. These are solid facts that were proven before me at the hearing on the merits.

She then brought a suit for divorce against him on the ground of adultery, and the case was proven beyond all peradventure, although both the defendants, Mr. Schultze and Miss Meyer, swore point blank that there never had been any improper conduct between them. Well, that is quite usual, but it doesn’t show a very high moral tone on the part of either.

Now, I granted a divorce. In the meantime these children were in the custody of the father, with the privilege to the mother to see them. That privilege was exercised in such a manner, on the piart of the husband, that she did not get a fair chance to see them. But he went out to East Orange, or somewhere there, or South Orange, somewhere there, and rented a house and lived with this Miss Meyer, and had his three children there in the same house with her. And poor Mrs. Schultze went and took board or rooms in a house, the rear of which backed up on the rear of the house in which her husband was living, so that she could see and watch her children playing in the back yard.

Now, that was all proved to my satisfaction; his sister’s house, I believe, was the place where, by order of the court, she should go and see her children once a week. It was a mere mockery, the chance she had to see them, unless she went to this house and saw them there in the custody of her husband’s mistress.

This was pending suit.

Now, after I pronounced a decree of divorce in favor of Mrs. Schultze, against her husband, the question arose as to the custody of those children. They were much younger than they are now. That was seven years or more ago. The oldest boy, I think, was but nine years old then, the girl seven, then the little fellow there was a boy two or three years old.

I had an interview with them. They didn’t want to go with their mother;' they wanted to stay with their father. There, of course, was a case of influence. But I made up my mind I would never commit those children to the care of a man who was living in open adultery with a woman, and I didn’t. I committed them to the care of the mother, and made the father pay the keep of them, and I have never done a thing in my life that I look back upon with more satisfaction than upon that order.

Shortly afterwards, the father married his paramour, and she is his wife to-day. And it is to that home, composed of that father and his former paramour, that I am asked to send these children.

Now, about four years ago, I think it is, an application was made by the father to have the custody of these children taken away from the wife. She went, immediately after the divorce, to live in Ocean Grove; she has been living there ever since, and if there is one place in the State of New Jersey above another, where the children would be brought up in a clean- atmosphere, it is Ocean Grove. It is a religious comnmnity, no liquor sold there, I believe, or anything of that kind, all good pious Methodists, Sunday schools and public schools, and . everything of the best character. I honored her choice going there.

Well, on the father’s application, on that occasion, the children were brought before me at Jersey City and a crowd of witnesses on each side were sworn as to how the mother was taking care- of them.

One difficulty that she labored under all the while was that her husband would not pay her alimony regularly; held back her alimony, and she had these three children to support, and that difficulty has been continued ever since, and I will speak of it in a moment.

On that occasion I saw the oldest boy was getting too big for his mother to control, and I gave him to the father. He was then, I think, twelve years old. He was willing to go, and I gave him to the father. I think, probably, I did right then. I have no kind of doubt about it. ' .

You see the situation is such that it is incurable. When a husband and wife are separated in that way the case is one that the court cannot cure. They have only to choose the lesser of the two evils. They cannot put those children where they ought to be, with the care of their own father and mother, living together as man and wife?, according to the laws of God and man. It is impossible for the court to cure that disease, and that disease is due to the improper actions of the father. He is •the man that is to blame for the present situation, and for the situation as.it has been ever since he became infatuated with this Miss Meyer. He is the one that is to blame.

I gave the boy to the father. Probably I did right. I hope I did. But I left the little girl and the other little boy with the mother, and at that time the girl was only eleven years old. I found that she knew enough to know that, her father- was committing a crime; she knew enough to know- that. He was living with the very woman that he lived with in ojoen adultery and that she had lived in the house with, and she did not want to go with her father and gave that as a reason:

They have lived at Ocean Grove ever since, and the father has an'order that he should have access to those .children. The trouble has been he has not paid his alimony. Time and again that poor -woman has come to me here and has written to me that her husband was behind in his payment. Well, the moment she employed a lawyer she had to pay out money. So in order to save that I undertook myself to try and force that man to be prompt in his payments. He made all sorts of excuses, wanted the amount cut down, and all that sort of thing. I reduced the alimony, though, from twelve, I believe, to ten dollars, something like that, at the time I took the oldest boy away. And it has been one struggle from that time to this to have, that man pay his alimony. .1 have written him, and then he would pay up in part — never would pay up in full. The poor woman would be behind, in debt to the groceryman, doctor, and all that sort of thing, and he all the while refusing to pay. No reason in the world that I could see except puye ugliness. A man that does that kind of thing does not commend himself to the court as the proper person to have the care of a boy to bring up.

Finally, abotit six months ago, I wrote her to make up a statement, as well as she could, of the arrears, and also a statement of the amount of debts she owed for want of this money. She made it up the best she could and I ordered my clerk to make up affidavits and statements, and. he made them up and sent them to her and she swore to them, and then I sent them to a lawyer, Mr. Cook Colliding, near -where the defendant lived, to prosecute, and he compelled the defendant to pay what the defendant admitted he owed; it was not as much as the petitioner claimed, and she says, now, she has not been paid in full, but I take it for granted she has.

Now then, in the face of all that he comes in and wants the ■custody of these children. Now, reading between the lines, I should say the reason why he was behind in paying his alimony was to torment his wife into giving up the children or something like that or of that kind. I cannot think' of anything else.

Now, he says he has been denied access to the children, and the wife says in reply that he did not go there very often, went so seldom — Saturday was the day, Í think, fixed for seeing the ■children — they did not think of staying home because the father did not come. He says he went there and was prohibited from seeing them. The wife says that is not so; they did not stay home because he did not come regularly. But unless he paid his alimony regularly he was not entitled to see those children. It is only when he paid his alimony regularly that he was entitled to see the children; I think Mrs. Schultze might have said, “I won’t let you see the children because you don’t pay me my alimony; I am starving here for food because you don’t send me my ten dollars a week.”

Now, that is the situation at this time, and when I made this order to show cause on the husband’s petition it was on condition that he should pay all arrears up to that date and should furnish Mrs. Schultze with money to pay counsel and to pay her fare up here to Newark to meet this petition.

Now, as I remarked before, it is impossible for the court to make an order that is satisfactory to the court or to anybody else, and the reason is because this man has deserted his wife and gone off with another woman and rendered himself liable to an action for divorce, and then married his paramour. -Now, in that situation there is a sore that the court cannot heal. It-must do the best it can.

Now, the girl is fifteen years old. I have examined her, and the affidavits show her to be a good scholar and steady student; she has an ambition to become a teacher, and she wants to live with her mother. It. is a good community; it is a good neighborhood,' and she is well liked by her teachers and they speak well of her in their affidavits. Why it is simply impossible to think for a moment of ordering that girl into the custody of her father, under the control of a woman who lived in open adultery with her father before he was divorced.

Now, with regard to the boy, the same thing may be said of him. He ought to have a father, of course; it is time he had a father, but how is he going to have one ? Whose fault is it that he has not got a father, right along side of his mother, to look after him every day? No fault but his father; the father is the man to blame for that. If the boy was older (I thought he was about twelve years old), but if the boy was older I would seriously consider whether he had not got too big for his mother to control, and would seriously think of turning him over to his father.' But he is not; he is not old enough to commence'to-learn business lie is not old enough to need the particular kind of instruction that Mr. Miller has very forcibly and very properly urged upon the court, and I am very much obliged to him for it. He has not attained those years yet. He is less than eleven years old; he has not got through his schooling and is not fit to go to work, so to speak. I do not think he ought to be taken away from his mother. There is nothing that can compensate or equal the love of a mother, and when it appears, as in this case, that the mother was first a devoted and true wife and is now a devoted and true mother — she may not be a model mother; she may not be a woman you would set up and say “there, copy her,” but so far as she has the capacity she is a true mother of these children, and she is their own mother; she has a mother’s affection and a mother’s solicitude such as nobody else, except in very exceptional cases, can possibly have.

Now, under these circumstances, I am .not ready to-day to make an order that that child should be taken from its. mother. He is well situated, he is going on in school, he has his schoolmates, is surrounded by a moral community where he is not exposed to temptation, and, take it altogether, I decline to make an order that the boy should be taken away from his mother.

Memorandum. — The father and older brother at once, and in view of the court, interviewed the younger boy and apparently coaxed him to go with them, but without success.

Pitney, V. C.

Shortly after I had refused, on July 10th, 1906, the application of the defendant for the custody of the two children remaining in the hands of their mother, the defendant applied to me, orally and personally, and, as he said, on new grounds, to renew the application.

I instructed him to take ex parte affidavits before any special master of the facts which he said arose since the previous refusal just mentioned, and submit them to me with copies to be served on Mrs. Schultze.

This he did.

The copies were duly served and Mrs. Sehultze was directed to take answering affidavits and submit therh to me.

This she did and I have considered them all and will file them with the papers in the 'cause.

It is proper to say that I made personal inquiries of a special master residing in the neighborhood and acquainted with the character of Mrs. Rogers, the principal affiant upon which the defendant relies to sustain his application, and learned from him that she was not a person upon whose unsupported evidence, without, an opportunity to cross-examine, it would be safe to rely.

Upon a careful consideration of all these depositions, including my personal familiarity with the parties and the history of the cause from the beginning, I have concluded to make no order. In support of that conclusion I need only say that the allegations of the defendant are not, in my judgment, sustained. The witness' in question took advantage of a fortuitous and entirely innocent circumstance to magnify it far beyond reasonable limits.

I will add that I have received one' or two letters’ from the daughter, which show her to’ be an intelligent and well educated young lady, and disproves any allegation that she has been subjected to improper or noxious influences.


author: Pitney, Advisory Master.

text:
    Lizzie E. Wooster v. Crane & Company, a corporation.
    [Decided May 31st, 1907.]
    ■ 1. Contracts to publish, school books between. the author and a New Jersey corporation, providing that they should extend during the continuance of the copyrights and of any renewals thereof, and' that the publisher was to keep an account of the sales and render the same every six months and pay to the author a certain percentage of the sales, were not assignable, without the consent of the author, to an Arizona corporation, though the personnel of the latter corporation was the same as that of the former, with the exception of the local stockholder and director whom the statute of New Jersey requires to live in that state.
    2. Contracts to publish school books between the author and a corporation engaged in the publication of books, its successors and assigns, providing that the corporation should have the exclusive right to publish the books, that the corporation, its representatives and assigns, should in good faith keep their agreement therein contained, and that it should publish the books and pay the publisher a stated percentage of the receipts as royalties, were not, by their terms, assignable.
    On final hearing on bill, answer and proofs.

      Mr. Frank P. McDermott and Mr. William B. Spooner (of New York), for the complainant.

      Mr. Osiris D. McConnell and Mr. Quinton (of Kansas), for the defendant.
   Pitney, Advisory Master.

The object of this bill is to rescind certain contracts entered into in the early part of the year 1900, between the complainant, Miss Wooster, the author of certain school books, and the defendant, Crane & Company, a corporation of New Jersey, a publishing and printing company of Topeka, Kansas, and also for an accounting between the parties and for other relief.

The ground on which the rescission is asked is threefold.

First. That the contracts themselves were ultra vires the corporation, because not within the scope of its powers as stated in its articles of association.

Second. Because the corporation has itself, of its own motion, been dissolved strictly in accordance with our statute providing for dissolution and thereby became incapable of fulfilling the contracts, which by their terms and in their nature were continuous and extended over the life of the copyright of the complainant in the school books of which she was the authoress.

The defence denies that the publishing of school books was not within the scope of its articles of incorporation. I have not found it necessary to consider that point.

As to the second point made by complainant, defendant admits that it was, in the year 1905, duly dissolved by proper and sufficient proceedings under our statute for that purpose. But it avers that the same stockholders who owned and controlled the stock in the New Jersey corporation were, .at or about the date of its dissolution, organized into a corporation bearing the same name under the laws' of Arizona, and all its property, plant and contracts, including those between the complainant and the defendant, were assigned and transferred to the new company, which thereby succeeded to all the rights of the old company under the contracts with the complainant and which is ready and willing to carry out and perform the same.

The complainant sets up a third cause for rescission in an alleged non-performance by the defendant of its part of the contracts in failing to print and publish a part of the works therein mentioned as by its contract it had undertaken to do.

To this part of the complainant’s case the defendant sets up that the non-performance by the defendant was due to non-performance by the complainant in failure to furnish copy for the printer. And it alleges in its answer that this question was litigated between the parties in a suit in the Kansas courts, brought by the present complainant against the present defendant in 1902, in which-the same grounds the complainant takes herein for rescission (with the exception of that of the dissolution of the defendant) were taken and put in issue, and decided against the complainant and an accounting between the parties was had up to April 15th, 1903, and a judgment rendered in favor of the defendant against the complainant for $1,252.

Turning, now, to the second ground of complainant’s relief of rescission, based on the dissolution of the defendant, we find that the fifty-third section of the Corporation act of 1902, which is a re-enactment of the previous statute (Gen. Stal. p. 9IS § i5i9), provides that when corporations are dissolved by any means, they are continued bodies corporate for the purpose of prosecuting and defending suits and of enabling them to settle and close their affairs, to dispose of and convey their property and to divide their capital, “but not for the purpose of continuing the business for which they were established.”

The defendant herein is a New Jersey corporation, and jurisdiction was obtained over it as such by service in that state, and this suit was prosecuted under that section of the act.

The power, then, of the defendant to assign these contracts to the Arizona corporation is undoubted. But the question is whether, from the nature of the contracts themselves, the defendant could empower the new corporation to take its place in the contracts against the will and without the consent of the complainant, the other party to the contract.

That question depends upon the character of the contracts themselves. Mr. Pollock, in his work on Contracts, says, at page 411:

“Bights arising out of a contract cannot be transferred if they are coupled with liabilities or if they involve a relation of personal confidence, such as that the party whose agreement conferred those rights must have intended them to be exercised only by him in whom he actually confided,”

and he cites the case of

“a partner who ¡has no power to force a new partner on the other members of the firm without their consent; all he can give to an assignee is a right to receive what may be due to the assignor on a balance of the partnership accounts.”

These are familiar and fundamental principles, and, independent of the question of personal character, qualification, &c., of the proposed substituted contractor, there intervenes the qualification mentioned by Mr. Pollock, namely, the question of liability, where the question of financial responsibility alone is involved. Thus if A agrees to deliver to B, at a certain point, a certain quantity of any commodity, at a certain price at stated times in the future, and to take B’s promissory note at three months for the price, manifestly B cannot assign that contract to C and compel A to take C’s promissory note instead of B’s, for which he had contracted.

Noav, if we turn to the contracts here in question we find that they provide for the publication of certain school books by the defendant, on certain terms, among which is that the contracts extend during the life of the copyright not yet expired and of any renewal thereof, and that the defendant is to keep an account of the sales and render such account every six months during that period and to pay the complainant a certain percentage of the sales every six months. Here, then, comes in directly the question of pecuniary responsibility.

The defendant, by its answer, sets up that the personnel of the new company (with the exception of the local stockholder and director which, by our statute, it is obliged to keep in New Jersey) is precisely the same as that of the present defendant and that the new company is- performing the contracts in all respects and is able and willing to continue to perform them, and it asserts that condition as a complete answer to the cases cited by the complainant. But does that condition cover the question of pecuniary responsibility? The complainant contracted with a corporation organized under the laws of the State of New Jersey, whose solvency and pecuniary responsibility is protected and maintained by all the safeguards found in our statute for that purpose, and she is entitled, both at law'and in equity, to the benefit of the continuation of those safeguards. We are not shown what the provisions iii that respect, are'as found in the Arizona statute. But it is significant that the defendant in its answer gives as a reason for its dissolution and reorganization in Arizona, among other things, that the laws of Arizona do not require that one of the directors should reside within Arizona, nor are corporations organized there required to make annual reports to the extent required in this state, and it avers that it is' more convenient and less expensive to carry on business under an Arizona corporation than under a New Jersey corporation.

Another consideration comes in here. Complainant is entitled, under her contracts with this defendant, to have, in a measure, the protection of the courts of New Jersey, and she may have and probably has more confidence in those courts, to say nothing of a greater convenience in access than in the courts of Arizona.

It cannot, of course, be and was not contended that the Arizona corporation was the same legal entity as the New Jersey corporation. The mere fact that the ultimate property rights rest in the same stockholders cannot, for present purposes, make the legal entity identical.

The authorities on this, the main question, are uniform and clear. Stevens v. Benning, 1 Kay & J. 168 (1865), and on appeal, 6 De G. M. & G. 223; 24. L. J. Ch. 153; 1 Jur. (N. S.) 74; where the opinion of Vice-Chancellor Wood in the lower court is given.

That was the case of the publication of Forsyth on the Law of Composition with Creditors, and the language used by Vice-Chancellor Wood in determining the case is important. I will not repeat it here. The effort of the counsel for the assignee in that case was to show that the result of the original contract was to assign the copyright of the book, and it was hardly contended that if it was not so assigned the assignment by the original publisher to the assignee gave the latter any legal standing.

Another case is Humble v. Hunter, 12 Adol. & E. (Q. B.) 310 (1848). That was an action by the owner of a vessel on a charter party which was signed on behalf of the owner and plaintiff by her son, calling himself “the owner.” And it was held that she could not recover because the son had represented himself as the owner. Lord Denman, in delivering judgment, said: “Yon have a right to the benefit yon contemplate from the character and credit and substance of the party with whom you contract.”

Stevens v. Benning, supra, was followed and adhered to by Justice Fry, in Hole v. Bradbury, 12 Ch. Div. 886 (1879).

Coming to the United States we find the very important case of Arkansas Smelting Co. v. The Beldon Company, 127 U. S. 379, which was argued with great ability and fullness and complete examination of the authorities on the side which corresponds to that of the defendant .here.

In that case the Beldon company had agreed to sell and deliver to a firm of Billing & Eilers, at their smelting works in Leadville, Colorado, ten thousand tons of lead ore from its mines, delivered at the rate of fifty tons a day, with'a clause — “all ore so delivered shall at once upon delivering become the property of the party of the second part, Billing & Eilers.” Then there was a provision for ascertaining by assay of samples the value of the ore so delivered and the price to be fixed after the sampling by the price of lead in New York. Billing & Eilers dissolved and their smelting works, where delivery was to be made, and their contract, was assigned and conveyed to the plaintiff. Beldon & Company thereafter refused to deliver ore to the assignee, whereupon the plaintiff brought suit. Defendants demurred; the demurrer was sustained and the plaintiffs brought a writ of error. No one appeared for defendant at the hearing in the supreme court and the judgment below was sustained in an opinion by Mr. Justice Gray, on the ground that the original vendors of the ore were not obliged to take the successors of Billing & Eilers as their debtors, although they had succeeded to the very same smelting works and business which Billing & Eilers originally carried on.

One of the cases cited by Mr. Justice Gray is Winchester v. Howard, 97 Mass. 203. There the owner of a pair of oxen put them in the hands of an agent for sale. The agent sold them to a purchaser upon the representation that the oxen belonged to him, and they were delivered to the purchaser. When he ascertained that they belonged to another party, he refused to complete the contract. The court held he was justified therein, and after citing the language of Lord Denman, above quoted, the court proceeds: “There may be good reasons why one should be unwilling to buy a pair of oxen that had been owned or used or were trained by a particular person or why he should be unwilling to have any dealings with that person.”

Another important case is Boston Ice Co. v. Potter, 123 Mass. 28 (1877). The headnote is this:

“A, who had bought ice of B, ceased to take it on account of dissatisfaction with B and contracted for ice with O. Subsequently B bought C’s business and delivered ice to A, without notifying him of his purchase until after the delivery and consumption of the ice. Held, that B could not maintain an action for the price of the ice against A.”

The time during which the plaintiff had supplied ice to defendant was a whole year. In delivering judgment, Justice,Endicott said: “A party has a right to-select and determine with whom he will contract and cannot have another person-thrust upon him without his consent.” The opinion contains quite a full citation of authorities.

In Randall v. Chubb, 46 Mich. 311, and Lewis v. Sheldon, 103 Mich. 102, a lessee of a farm on shares attempted to assign the lease and failed. There evidently the lessor relied on the personal quality and character of the lessee on shares.

In Lansden v. McCarthy, 45 Mo. 106, a coach maker, who_ had a secret partner unknown to the other party, contracted to furnish McCarthy a carriage for use for the term of five years a given price per year, payable in advance. At the end of years the coach maker assigned the contract to his secret It was held that McCarthy was not obliged to continue the tract with the assignee. In other words, he was not obliged to pay a stranger in advance for the use of the carriage, nor was he obliged to deal with the stranger in any way.

It seems to me that these principles, thus illustrated by adjudged cases, are conclusive in favor of the complainant and I must advise a decree rescinding the contract, unless another point made by the defendant has some substance, viz., that the contracts in question by their terms are made assignable.

One contract, dated the 19th day of February, 1900, is expressed to be between Lizzie E. Wooster and Crane & Company and their successors and assigns, a corporation, Shawnee county, State of Kansas. Then after recitals is this clause:

“therefore this agreement witnesseth that the said Lizzie E. Wooster, having full power to make this grant, hereby agrees that the said Crane & Company have the exclusive right to publish and print the said books or any revised edition thereof during the full term of copyright thereof and during the full term or terms of any renewals of said copyright.”

Then Miss Wooster agrees to defend the copyright and to bear the cost of illustration and metal plates, and Crane & Company have the right to sell editions or duplicate plates in foreign countries and the contract proceeds:

“The above agreements are made with the understanding that the said Crane & Company and their representatives and assigns shall in substantial good faith- keep and perform their agreement Hereinafter contained.”

Then follows the covenants on the part of Crane & Compaq that they will publish the books and pay Miss Wooster ten per cent, of the cash receipts as royalties and will render semi-annual statements.

The next agreement is that of the 15th of March, -1900, in which the parties are described as in the previous contract, and tiren, after a recital of the books, Miss Wooster agrees that Crane & Company shall have the exclusive right to publish and print the said books or any revised edition thereof during the full term of the copj'right thereof, and during the full term and terms of any and all renewals of said copyright. Then like the previously recited agreement, there is a clause that these agreements are made with the understanding that Crane & Company and their legal representative and assigns shall keep and perform that agreement. Then comes the contract by Crane & Company to publish and pay royalties, &c.

Upon careful consideration I am unable to give to the presence of the word “assigns,” as above quoted, the force the defendant claims for it. I am unable to construe it as a contract on the part of Miss Wooster to deal with anybody to whom Crane & Cqmpany may assign-that contract and to accept such assignee as pa3unaster. It will be observed that wherever there is a covenant on the. part of Crane & Company to do anything on its part, the weight of the covenant is- placed entirely upon Crane & Compaq. Upon the whole I am of the opinion that the only effect of the word “assigns” is to give the right, which Crane & Company have without that word, viz., that their assignee would take whatever interest they had in the contract up to the time of the assignment, precisely as in the case of one partner selling out his interest in the partnership.

■ The result is that I think that the complainant is entitled to a decree of rescission.-

It is unnecessary at this time to inquire how far the new corporation, Crane & Compaq, which is not a party to this suit, is bound by this decree.

I have so far assumed that such new corporation has a legal existence. But' such existence was earnestly denied by complainant. The defendant, by its answer and as a part of its defence, alleged its legal existence, and hence the burthen was on the defendant to prove it by competent evidence. The case is not one where the mere fact that it is acting as such is sufficient. The de facto doctrine does not apply. In support of this burthen the defendant introduced a properly attested copy of articles of association of the stockholders of the defendant corporation (excepting the New Jersey director), on file in a public office in Arizona, but did not offer any proof of the laws of Arizona entitling such filing or declaring that the result thereof was to create a corporation. Seasonable objection was taken to the document without such proof. I have grave doubts whether the proof thus made was sufficient to establish the legal existence of the new corporation. Of course every corporation owes its existence to statutory law. But I do not find - it necessary to determine this question here. The result is the- same whatever may be the proper view of the question.

The other prayer of the bill is for an accounting. The accounting is prayed for only from the month of April, 1903. The defendant has annexed to its answer what it affirms is an account of the profits and royalties due to Miss Wooster since that time, amounting-to $1,203.28, up to October 1st, 1906, the answer having been filed on the 23d of October, 1906. Complainant complains that the account is not complete. As the complainant is entitled to have the account brought clown to date, and as the matter must go before a master, an opportunity will there be given to except to the account and have it thoroughly examined.

The important question is as to that part of the answer which sets up that in a litigation between the parties in a Kansas court the defendant here obtained a decree against the complainant for the sum of $1,252.39, besides costs, and it claims the right to apply all royalties due to the complainant under the contract between them to the payment of that judgment.

At the hearing the defendant attempted to sustain that decree by what purported to be a copy of certain enrolled proceedings in the Kansas court. The complainant’s counsel objected to the certification of that document for certain reasons not necessary now to be stated. I have examined the certificate and the objections made and come to the conclusion that I ought not to rely upon it or admit it in evidence, and I at once notified the parties that they might correct that defect or at least apply for leave for that purpose.

The result is that the reference to the master should preserve leave to the defendant to make proper proof of the judgment before the master.

It may be well to add that, as I have stated above, the complainant relied as one ground upon which she based her prayer for rescission that defendant had failed to perform its contract by printing and publishing two volumes of her reader.

The defendant set up that by this litigation before mentioned that very question had been involved and passed upon by the court, and that it had been decided that the complainant and not the defendant was at fault that the last volumes were not printed. A large amount of evidence was gone into on both sides on this question, but I have not considered it, since I found the point of change of party to the contract a clear ground for rescission.

The answer and the evidence disclose other matters in litigation between the parties, both in the state and the federal courts, which show that it is highly improbable that it is practicable for them to maintain to each other those relations which should exist between author and publisher.


text:
    Theodore F. King et al. v. John P. Muller.
    [Submitted April 12th and June 21st, 1907.
    Decided June 27th, 1907.]
    1. The waters of a lake were so raised by a dam built across its outlet that a swamp about three thousand feet long and from two hundred to five hundred feet wide, which had previously been separated from the lake by a causeway, was flooded to the depth of about three feet at high water. The trees were so thick that the swamp was at first scarcely navigable, even by'small rowboats, but after removal of some of the trees and decay of the stumps it was frequented by small boats and fishermen. Complainants, under an exclusive grant from the owner of the land comprising the swamp of the right to do so, dredged a channel from the lake proper across the causeway and swamp to their property, abutting on the swamp, such channel being about thirty feet wide and three thousand feet in length, built a dock on their own land, and dug a basin, so that boats might be turned. This channel was at all stages of the water navigable, and did not interfere with any improvements looking towards the betterment of the navigability of the swamp which had theretofore' been made, nor were any of such improvements necessary to its use. — • Held, that the right of the public to navigate the lake proper did not extend to the swamp on its being flooded, and that the public was without right to navigate the channel dredged by complainants across it, and might be excluded therefrom.
    2. Where the public is without right to navigate a channel dredged by complainants from the main body of a lake to a point on complainants’ land, an injunction to restrain navigation thereof will lie, that complainants may be afforded adequate relief, and to save a multiplicity of actions.
    On order to show cause upon, bill and affidavits and answer and affidavits.

      Mr. William H. Corbin, Mr. Edward A. Quayle and Mr. Elmer King, for the complainants.

      Mr. Sherrerd Depue, Mr. Thomas M. Kays and Mr. Richard L. Edwards, Jr. (of New York), for the defendant.
   Pitney, Advisory Master.

The questions involved in this cause are important and have been argued on each side with great ability and industry.

The case is developed by bill, answer and affidavits and exhibits on each side. ■

The original order, with restraint, in the cause was made on the 15th day of September, 1906, and the parties seem to have been sufficiently industrious in collecting ex parte affidavits on each side and producing records, maps, &c., so that at the hearing it was not suggested that the case could be seriously changed by a final hearing.

The complainants5 - bill sets forth title to certain lands, and on its presentation there was exhibited record evidence of such title. The defendant, by his answer, formally denied the title, but set up none on his part adverse thereto, and at the hearing I understood counsel for the defendant to substantially admit the title as asserted by the complainants, and to rest his case on other grounds.

The object of the bill is to restrain the defendant from navigating, with a passenger power boat, a certain channel or canal about thirty feet in width and three thousand feet in length, created by the complainants in a shallow arm or bay of Lake Hopatcong, and leading from what may be termed the main body of the lake to a point in the most southeasterly portion of its waters, including the arm, near Hopatcong station, on the Delaware, Lackawanna and Western railroad.

Lake Hopatcong is a -natural lake enlarged by a dam or dams built at various times across its outlet, by which its waters have been raised until it has attained its present size. It is quite irregular in shape, but much longer than it is wide, and in its deeper portions so deep as to indicate what is sustained by tradition that there was in its central portion at one time a natural lake. It lies just to the west of the high mountain ridge, which at that point divides the watersheds of the Delaware and the Raritan rivers at the southerly end of the lake, and those of the Delaware and the Rockaway rivers on the north end of it.

The lake is fed at its upper end by a small brook, and its outlet is the Musconetcong river, leading to the Delaware river.

A short distance south of its natural outlet there is a natural depression, or pass, in this high mountain ridge at an elevation of about nine hundred and ten feet above the sea, and about fifteen or twenty feet below the level of the lake when it is full, which is nine hundred and twenty-six feet above tide level. Through this pass the Morris canal was located and built about the year 1830-1831. By building a navigable feeder from the natural outlet of the lake along that level to the level of this pass the water of the lake is let into a level of the canal at that point, which is about fifteen feet lower than the level of the lake at high water, and from thence the water may be turned, and in point of fact is turned each way in the canal to the waters of the Delaware on the west and to the Hudson on the east.

When the canal was laid out and built, a dam, called the “Bandolph dam,” already existed at the outlet of the lake, and was used to drive a forge.

The name of that place was Brooklyn, and the pond itself was known as “Brooklyn pond,” or, as expressed in the charter of the canal company, the “Great pond,” as well as “Lake Hopatcong.”

The canal company, by its charter, was obliged to file in the clerk’s office of the various counties through which it passed maps showing the amount and description of the lands intended to be taken or flowed by it in that county.

The map showing the land to be taken in the neighborhood of Lake Hopatcong is still in existence, in the clerk’s office of Morris county, and was used, by consent, at the hearing. That map shows the extent of the flow at the time the company made its survey, and the extent to which the flow of the land around the lake was to be increased by its dam. It showed a very little increase of flowage in any direction. Its importance in this connection is that it shows that at what was then the most southerly part of the lake and about five-eighths of a mile southeast of the outlet, there was a causeway by the water’s edge over which passed a mountain road running along the easterly side of the lake, and around what was then the southwesterly end of the lake to the outlet at Brooklyn. The remains of that causeway are still in existence, as shown by the map made for the purpose of this hearing, and proven by abundance of affidavits and not disputed by anyone on the part of the defendant. South of that causeway the canal company’s map shows no flowage, and the canal company did not claim that it desired to acquire the right to flow south of that causeway.

The well-known object of the canal company was to create ■a reservoir for the storage of water to be used in the operation of its canal during the dry season.

The evidence shows that in point of fact there was no flowage ■at that time south of that causeway. But there was a swamp .about three thousand feet long and from two hundred to five hundred feet wide, called the “cedar” or “spruce” swamp, leading in a southerly direction from this causeway and at right angles to the general course of the lake and river, and reaching- to the very edge of the pass or depression in the mountain before mentioned.

Immediately to the south of this swamp the land begins to fall off in a southerly direction toward the headwaters of a branch of the Raritan river, and a small stream rose there leading- down ultimately to that river. No stream or brooklet was running through this swamp.

Later on, and in or about the year 1836, the canal company, finding the storage furnished by the dam and lake, as completed in or about 1830, not sufficient to supply its boats in dry seasons in August and September, raised the dam several feet higher. This raising was proven by one of the old witnesses in this case called by the defendant. The result of this raising was that the causeway before mentioned was flooded with water in the spring of the year and produced the litigation reported in the case of Seward v. Morris Canal and Banking Co., 23 N. J. Law (3 Zab.) 219. (That cause related to land at the northerly end of the lake and was tried twice. The first trial resulted in a verdict for the defendant and was set aside by the supreme court, as against the weight of the evidence. On the second trial a verdict was rendered for the plaintiff, which was sustained by the court on a rule to show cause, as reported, where the reporter has reversed the position of the counsel.)

With the flooding of the causeway before mentioned at the south end the whole cedar swamp was flooded, and the apparent area of the lake increased, and it is laid out on the maps as being an extension or arm of the lake running to the southward.

The road, which formerly crossed the causeway and led to and from Brooklyn, was abandoned at that point, and a substitute road was constructed around this arm and along the southerly bank of it, and so on northwardly to the outlet.

The water stood, according to the evidence, between the trees of this arm, or bay, about three feet deep at high water, but the trees were so thick that it was scarcely navigable, even by small rowboats.

The owners of the land took advantage of the freezing of the waters in the winter to cut off the cedar trees and ship them to market, leaving the stumps, of course, considerably higher than high-water mark. After that, and after the decay of the brush and smaller stumps, this arm became, during high water, navigable in a measure by small rowboats and frequented by fishermen.

Meantime, after the foreclosure of the Dutch mortgage, from the proceeds of which the canal was originally built — 8 Qr. Oh. 881 (1848) — the canal company was reorganized, and it was in some respects, especially as to the machinery of its inclined planes, rebuilt and made much more efficient, and did a great deal more business from that time forward until within a very few years, when the business has very much diminished.

During its period of greatest activity it drew on Lake Hopatcong very largely in the later summer and fall months, reducing its level from five to eight feet each year.

The result of this annual draft was that the bay, or arm, in question was completely drawn out and in the main quite dry, and, of course, entirely incapable of navigation.

Later on, the building of the Lackawanna railroad through this pass and close to the south side of the canal began to attract visitors and summer residents from a distance, and led to a great increase of small fishing and pleasure boats on the lake.

I should have stated that the difference in level between the canal and the lake waters was overcome by a lock at the outlet, and through this lock boats from the canal entered into and departed from the lake and a large trade was conducted from the northern head, or near the head of the lake, in ores mined in that neighborhood, and also in wood cut for market and floated in boats down the canal. These boats were towed by a steam tug through the lake to the outlet. Later on, and in or about the year 1878, a small passenger steamboat was put on the lake to carry passengers from different points to a station established on the railroad, called “Hopatcong Station,” which this boat reached by locking down into the feeder and thence into the canal, and thence along the canal to the railroad station, near which was a canal basin.

Later on other boats of the same kind were put on the lake, all making use of the canal and canal feeder to carry a small load of passengers from different points on the lake to the railroad station. They were limited in size by the lock.

About this time the complainants, the brothers King, purchased land at the southerly end of the cedar swamp bay, or arm, and between that and the canal on the highway before mentioned, and started a mercantile business and procured a post-office to be established, called “Landing.”

In the year 1885 a canal company was formed under the General Canal act, the official map of which showed the laying out of a canal from the main body of the lake, just north of the west end of the causeway previously referred to, along the western boundary of the cedar swamp bay, or arm, to the public road at Landing, all which appears by a copy of the organization certificate. The promoters of this scheme were gentlemen of some means, who were interested in real estate on the borders of the lake, and desired a more expeditious and commodious water connection with the railroad than was offered by the canal, and, also, it may be supposed, wished to avoid the tolls which they were obliged to pay the canal company. One thousand dollars was invested by the promoters in this venture, of which they spent $934 in digging a narrow channel through a point of land called “Clambake Point,” just northwest of the northwesterly end of the causeway, which formed a cape at the junction of the arm of the lake with its main part. Beyond that they did nothing; abandoned the project, stopped paying the state tax, with the usual result.

In 1886, one Captain Cook and a Mr. Edwards brought onto the lake a small flat-bottomed, stern-wheel steamboat, with the propeller SO' arranged that it could be raised and lowered, which w.as supposed to draw twelve inches of water, and attempted to carry passengers by the cedar swamp route from Landing to the north end of the lake at Woodport. They found great difficulty in getting the boat through and over the stumps and were unable to make regular trips, and the enterprise was a failure.

A company was then formed (1890), or, perhaps, had been formed while the canal company’s excavation was being done, called the “Hopateong Steamboat Company,” and a year or two after the complete collapse of the canal company just mentioned, this navigation company undertook to create a channel for a small shallow-draft steamboat which it purchased, and with that view rigged up a crude stump puller and succeeded in pulling out some of the stumps along in the west side of the arm, or bay, over what had been laid out as the bed of the proposed canal, and at high water succeeded in making a few trips with its boat down to the southerly end of the bay, or arm, at Landing, opposite Hopateong station, on the railroad. The few passengers they brought down were taken across the canal in a rowboat to the station. As the navigation of the bay became impossible, as it did by the draft of the water for canal purposes, the navigation company’s boats stopped at a point on the lake just north of the causeway at the mouth of the arm of the lake, and the passengers were carried in wagons around the east side of the bay to the railroad station. •

The land in the greater part of the bay, and far to the east of it, is owned and in the possession of the American Forcite Powder Manufacturing Company, a manufacturer of high explosives. Its land did not, however, extend so far as to reach the site of the old proposed canal.

In. the meantime, in the year 1891, the complainants, King, or the Hopateong Steamboat Company, procured to be brought onto the lake a heavy, expensive and efficient dredging machine, and proceeded, with the consent, and later on under a written contract, with the powder company, to excavate, at great expense, a channel from the deep waters of the lake across the old causeway, near the easterly end thereof, and quite to the east of the route and site of the old proposed but abandoned canal, in a southerly direction towards their property at Landing, extending it quite to Landing, and there excavated a sort of basin, making room to turn boats. They then made an arrangement with the navigation company for the use of this channel by that company, which, as demand warranted, increased their fleet of boats and enlarged their size. The fleet so created was called the "White Line," and those boats, which still used the canal, other than the private boats, were called the "Black Line.”. In the meantime the number of private power boats on the lake increased.

Almost from the start the complainants demanded and re-, ceived tolls for boats desiring to use their channel, and, among others, from the boats owned by the defendant. The complainants retained the dredge which they had used in making the original excavation and found themselves obliged, from year to year, to clean out the channel and to deepen it to accommodate the increased size and draft of the boats which were using it.

They also built a substantial dock on their own land for the use. of boats in landing.

A very small and necessarily cheap dock had been built at the terminus of’ the old proposed canal, located a few feet away and to the west of the new dock built by the complainants. This old dock was built by the defunct canal company and was added to and extended farther out into the lake by the complainants, upon whose land it stands.

A later and apparently accurate map was made from actual survey by Mr. Howell, a civil engineer, in March, 1907, which was used at the hearing, and which shows the whole state of affairs very clearly. It shows both the center line of the canal proposed by the old canal company and the channel dredged by the complainants, and shows that the channel dredged out by the complainants does not interfere with that proposed by the old canal company, and in nowise obstructs the results in the way of promoting navigability of the work done by the navigation company in the way of pulling stumps on the west side of the bay previously referred to.

The result of this dredging was to throw up an embankment above the level of the water on one side or the other of the channel, but the map shows that this embankment did not encroach upon that old so-called channel.

One other matter should be mentioned. The grant or lease from the powder company to the complainants of the right to excavate and maintain the channel across its lands grants to them the exclusive right so to do.

Shortly before the bill was filed the defendant insisted upon using the channel and new dock with his boats against protest by the complainants and without the payment of tolls.

The question presented by the pleadings is whether the complainants have the right to exclude the defendant from the use of this channel.

That the inland waters of. this state are private property is as well settled as anything can be.

That the ground on which the docks and turning point for the steamboats of the complainants are on their property, to which they show title from the proprietors, is perfectly clear was shown by a chain of documentary evidence at the hearing, and was, a» before remarked, admitted by counsel for the defendant in argument.

That where the channel was not covered by the title of the complainants to the soil it was made by the express and exclusive grant of the powder company, who were the actual owners of the soil, was clearly shown and admitted by counsel for the defendant.

The defendant, while in his answer denying formally the title in the complainants, put himself in argument on the ground that all the waters of Lake Hopateong are public waters, in the sense that the public have the right to navigate them, and that the ownership of the soil is subject to this right of public navigation.

His counsel contended that granting that this particular part of the lake was not originally in its natural condition covered with water, yet that when by the increase in height of the dam at the foot of the lake the water was flooded in high-water seasons over this cedar swamp, the admitted navigability of the main part of the lake was extended to this arm of the lake, although the flooding of the same was entirely unlawful and merely acquiesced in by the owners of the soil, and that the same principle applies, although the navigation was confined to small rowboats during only a part of the year; and he further contended that when the complainants expended a large sum of money, nearly or quite ten thousand dollars, in creating this artificial channel, or canal, three thousand feet long and extending from the lake proper to their own village of Landing and excavated it to a depth sufficient to malee it navigable when the rest of the bay was perfectly dry, they at once dedicated it to the public, or that in some way the right of the public in the lake proper extended to this artificial channel.

This proposition is a startling one.

In dealing with it I do not feel called upon to discuss or determine the rights of the public in the lake proper. It may be that the fact that it is in point .of fact navigable for boats large enough for commercial purposes at all stages of the water for some three or four or five miles, measured lengthwise on its surface, and that it has for fifty years or more been used as a navigable body of water in connection with the Morris canal for purposes of commercial navigation, has given the public some rights to use it as a public highway. But, granting all that, I am unable to perceive how it affects the question here involved or helps the defendant in the least.

In order to sustain his position, the defendant must establish an easement on the part of the public in the lands of the complainants. He must show an absolute right on the part of the public to navigate the particular canal which the complainants have created, and which is confessedly in its nature, so to speak, private property.

The case is entirely distinguishable from that of The Moni ella, 20 Wall. 4-80, relied upon by the defendant. That involved only the right of the United States to impose upon the owner of a vessel a license under an act of congress, and did not involve private rights. The discussion covered the history of the navigation, partly natural and partly artificial, created between the Mississippi river and Lake Michigan.

We start here with, for all practical purposes, a perfectly dry piece of land three-quarters of a mile long and less than a quarter of a mile wide. ’ One end of it touched an artificial lake. The other end stopped in a forest. It was not in the line of any commercial route. It was not even a portage made use of by traders, like that in The Monlella Case. It was simply an impenetrable forest. And after the second raising of the lake, when it was flooded in high water, it was decidedly not navigable in the sense in which that word is used in the books. The fact that after the trees had been cut down, and after the smaller trunks had rotted away, fishing boats could work their way through between the stumps, did not make it navigable in the sense just referred to.

Chief-Justice Shaw, in Rowe v. Granite Bridge Corporation, 21 Pick. (Mass.) 344 (at p. 347), expressed himself on this subject. He was there dealing with a small tidewater creek and used this language: “It is not every ditch, in which the salt water ebbs and flows, through the extensive salt marshes along the coast, and which serve to admit and drain off the salt water from the marshes, which can be considered a navigable stream. Nor is it every small creek, in which a fishing skiff or gunning canoe can be made to float, at high water, which is deemed navigable. But in order to have this character it must be navigable to some purpose, useful to trade or agriculture. It is not a mere possibility of being used under some circumstances, as at extraordinary high tides, which will give it the character of a navigable stream, but it must be generally and commonly useful to some purpose of trade or agriculture.”

That language is quoted with approval by Mr. Justice Davis, speaking for the supreme court of the Hnited States in The Montella Case, supra.

The present case is in marked contrast with those of large streams which are navigable for floating logs though obstructed by rifts and rapids, like our own Delaware river and like the Connecticut river, which latter was dealt with in an elaborate opinion with a copious citation of authority in Connecticut River Lumber Co. v. Olcott Falls Co., 21 Atl. Rep. 1090; 65 N. H. 290.

I am unable to find any authority which holds that a piece of land like this, not in the line of any general commercial travel and never used as a portage, can ever become the subject of a public easement of this character. Justice Davis, in The Montella Case, supra, states the criterion to be whether the river in its natural state is such that it affords a channel for useful commerce.

And Mr. Farnham (volume 1, page 100), cited by the defendant, says:

“A navigable body of water is one which the public has a right to use for the purposes of navigation. The term includes all waters which for a period long enough to be of commercial value are of sufficient capacity to float water craft for the purposes of commerce, or to float to market the products of the country through which the water extends, so as to be useful to the population along its banks. * * * The stream must be of some value to trade, commerce or agriculture. And this excludes waters which are merely capable of floating a skiff for pleasure. And to be useful for these purposes the water must connect with other waters or lead from one public place to another, so as to be in the path of commerce. So, a stream is not navigable so as to be a public highway which leads from a public river to a private house, or to which the public have no access except at one point, where a highway approaches it. In order to be public it must have a terminus by which the public can enter it, and another from which it can leave it. But a stream to be public need not lead from one county to another. The rights of the public are entirely dependent on the capacity of the stream for navigation.”

And Mr. Farnham again (volume 3, page 2407), says:

“If a new channel created by the riparian owner becomes obstructed, the public has a right to force a way along the old one, causing no unnecessary injury. The same rule does not apply in case of a mere improvement of the natural channel so as to render it navigable when it was not so before. The public has no right to use a stream which is not navigable in its natural condition, and in case the riparian owner makes it navigable for his own purpose, he may exclude the public from the use of it in its improved condition.”

A ease relied on by both parties is Holden v. Robinson Company, 65 Me. 215. There a stream was made floatable for logs by putting a dam across it. The court said: “The first question is whether the stream is floatable without the dam. If it is not, the plaintiff could not avail himself of the fact that it is made so by defendant’s dam. If the stream was originally private property, exclusively so, any improvements made upon it by the owner would give tire public no rights in it. But if, on the other hand, the stream is by nature floatable, those who have occasion to use it as such may do so, and may also have the benefit of such improvements as may be put upon it, having reasonable regard to the rights of the owner. The character of the stream cannot be changed by the improvements put upon it. A floatable stream may be private property, but its use as such must be subject to the easement of the public.”

Defendant relies upon a class of cases where a stream or river of considerable length at the very point and place where it was previously navigable is rendered more easily navigable by a riparian owner by blasting out rocks or straightening a difficult channel, and where the identity of the channel is not changed. Those cases have no application to the present case, which in its nature is entirely distinct from that class of cases.

In those cases the party spending his money in improving the channel could not have the exclusive benefit of the money he had spent without excluding the general public from their admitted right to pass and repass over the difficult waterway.

The defendant relies upon the fact that a canal was projected from the lake along the western side of the bay here in question to the highway at Landing, as I have before mentioned. But I am unable to draw any inference from that circumstance favorable to the defendant’s claim. In the first place the proposed canal, if it had been constructed, would have been the property of the corporation, and that corporation would have been entitled to charge tolls upon it. The act makes no provision for the amount of tolls. But on familiar principles they must have been reasonable. The language is “to use and let to others to use said canal and to charge tolls;” and further, “to do any other act necessary for the full and free use and enjoyment by any such canal company of the franchises hereby granted.” Rev. Gen. Stat. (1877) 936 § 1. The grant to them of the right to condemn, of course, subjected them to the duty of accommodating the public on reasonable compensation. But it must be remembered that that company never did anything to improve the navigation in the bay here in question. It cut across a piece of land forming a cape between the main body of the lake and the bay in question, and it spent a little money in building a small piece of wharf on the land of the complainants. On the demise of the infant canal company, if not before, that wharf became the property of the complainants, but neither the' wharf nor the little cut across the cape is necessary for the use of the canal here in question, nor is it, in point of fact, used in connection therewith.

The complainants have built an entirely independent and additional wharf for use in connection with their canal, and, as before remarked, Mr. Howell’s survey shows very clearly that' the work they have done has not infringed upon either the territory included within the lines of the proposed canal of 1885, nor has it occupied or obstructed whatever was done in the way of improving the navigation of the westerly side of the bay by the old steamboat company of 1890 or 1891. In short, the complainants’ work is a creation, making at great expense a canal navigable at all stages of the water and not interfering with such improvements in navigation, by whomever made, as had in fact been previously made in the bay in question.

The defendant’s counsel, in his brief, has cited numerous authorities in some of the western and southwestern states, of which I can find none which reach the present case, and therefore it is not necessary for me to criticise any of them further than to say that so far as some of them may appear to favor his very ingenious line of argument, I find myself doubting if their reasoning is sound.

One other observation on the law. The state and the king hold all rights in navigable waters in trust for the people. Hence the king could not extinguish those rights in favor of an individual. Bearing that in mind, I call attention to the case of Juxon v. Thornhill, 3 Cro. (Charles) 132.

That was a suit for tolls brought for the navigation of the river Ouse. It appeared that the plaintiff had made the river navigable by the use of locks and the king had granted him the right to take certain tolls and suit was brought therefor. Verdict went against the defendant, and then a motion was made in arrest of judgment

“because the river Ouse is a common river and it is not lawful for any to make stop upon the river or to take money for the passage through the locks. Bed non allooatur for the locks are upon the plaintiff’s land and at his cost for the exaltation of the water and making the river navigable for vessels of burthen.”

And in Colton v. Smith, Cowp. 47 (1774), before Lord Mansfield, there was an action for tolls for goods landed on plaintiff’s manor not at a wharf, and he was held entitled to recover.

Mr. Gould, in his book on Waters, cites these two cases, and Lord Hale, Wadsworth v. Smith, 11 Me. 278, and Holden v. Robinson, supra, in favor of the proposition—

“If the navigation of the river which was originally navigable, in fact to a greater or less extent, be improved by the act of riparian owners in deepening the channel, the public have the right to use it for all purposes to which it is suited in its improved condition. But if, being originally unnavigable, it is made navigable by the riparian proprietor, the public right does not attach.”

In the present case whatever of navigability had been given to this part of this bay has been given to- it by the riparian owners, the complainants.

I find it impossible to adopt, for a moment, the notion of the learned counsel that the navigability of the main lake, which arose from the Morris Canal Company’s first dam and its connection with the lake by means of its feeder, extended to this little wooded bay when, by the second raising of the canal dam. the water was flooded to and among its trees.

But the defendant asserts that in this case the complainants’ right is so doubtful that it ought not to be sustained on this motion, and the injunction should not be continued, either pendente lite or until final hearing, but the complainants should be put to their suit at law.

As to all this I have to remark, first, the original order was granted in September last with immediate restraint. The defendant came in with his defence and, as I understood at the hearing and as the history of the case indicates, set himself about obtaining ex parte affidavits, and the complainants did the same. There never was any default in the complainants bringing the order to show cause on for hearing. The delays in that respect were due to the conduct of the defendant, and when the hearing was brought on I understood that both parties were content to submit the matter on the affidavits as presented. There appears to have been no effort on the part of the defendant to bring the cause to hearing on a reference and an examination of witnesses in open court.

In the second place, there are no serious contradictions in the evidence. Tire most important evidence consists in documents and surveys and records.

But in the third place the defendant, in my judgment, misconceives the true attitude of the parties. The complainants’ right by the law of the land is perfectly clear prima, facie. The defendant is seeking to justify himself by setting up a public easement over the land of the complainants. Here he assumes the burden of proving that easement which he attempts to-exercise mama forti. If the defendant had filed a bill to enjoin the complainants from interfering with his navigation of the canal in question and from landing at complainants’ dock, then the familiar rule of equity would have applied, and he would not have been entitled to an injunction unless he had shown that his right to the exercise of the easement was clear at law. But that is not the present attitude of the parties. And in attempting to assert and maintain his right to the injury of the complainants, the defendant is at the same disadvantage that he would be if he were a complainant, and the complainants are entitled to the same advantage of having a .perfectly clear prima facie right.

That this is a proper case in its circumstances for the interference by this court in order to give the complainants adequate relief and save a multiplicity of actions is too clear for argument.

I am clearly of the opinion that the complainants are entitled to a continuance of the injunction, and will so advise.