author: Backus, Vice-Ordinary.

text:
    In the matter of the estate of August F. Eckert.
    [Decided April 20th, 1922.]
    1. Where an executor delayed over four years in filing his inventory and final account, he is liable for depreciation in the value of bonds, notwithstanding- the act (2 Comp. Stat. p. 2211 § SJ/), this statute not applying to cases of negligent delay in settlement.
    2. Where an executor withdrew cash of an estate from a bank in which it earned four per cent, interest, and deposited it in his own bank at two per cent, interest, he is liable for the interest it would have earned if it had been left in the first bank.
    3. Where there was no testimony before the orphans court to warrant a higher estimate than $100 for the value of furniture belonging to an estate, overruling an exception to the executor’s final account putting its value at $800 was proper.
    On appeal from an order of the orphans court of Essex county overruling exceptions to the executor’s account.

      Messrs. RiTcer .& RiTcer, for the appellants.

      Mr. Edward R. McGlynn, for the respondent-executor.
   Backus, Vice-Ordinary.

Annetta E. Maxwell, a daughter and one of the legatees under the last will and testament of August E. Eckert, deceased, filed thirty-two exceptions to the final account of the executor of the will, of which fifteen were overruled. This appeal is from so much of the order overruling exceptions 1, 3, 4, 11, 17 and 18.

The testator died in October, 1914. The executor filed his inventory September 4th, 1918, and his final account March 27th,- 1919. Between the time of filing the inventory and filing the account certain traction company bonds which came to the hands of the executor as part of the estate depreciated in value and for this depreciation, amounting to $553.78, $1,100 and $360 respectively, the executor praj'ed allowances which were granted by the orphans court over exceptions. I am of the opinion that the exceptions should have been sustained, fo-r the reason that as the executor was grossly delinquent in settling the estate, and as the losses occurred during- the period of his delinquency, they should fall upon him, not upon the estate.

The testator was survived by a widow and two adult daughters. He left a simple will, in which he gave a house to his two daughters, or, in lieu, $1,500 to each in case he did not own it at the time of his death; a piano to one of the daughters; and the rest of hist estate to Inis widow and two children in equal shares. His personal estate of $26,000 consisted of cash in bank, mortgages, traction company bonds, and the stock in trade of a small paint business appraised at less than $400. There was some real estate as to which the executor had no official concern, although he took it in charge, by arrangement with the family, and has accounted for the rents, and the sales prices of two pieces. The orphans court made the allowance for the depreciation (exceptions 1, 3 and 4) on the theory that as the securities had been the investments of the testator and as the executor continued the investments in the exercise of a reasonable discretion and in good faith, he was protected by the statute (Comp. Stat. p. 2271), which reads:

“ * * Whenever any testator shall have made, in his lifetime, any investment of money in municipal bonds or on bond secured by mortgage, or in the bonds or stock shares of any corporation, and the same bonds, mortgages or stock shares shall come or shall have come into the hands of the executor of, or trustee under, the will of such testator or of the administrator with the will annexed, to be administered, and such executor, administrator or trustee may, in the exercise of good faith and reasonable discretion, have continued such investment, or may hereafter continue the same, he shall not be accountable for any loss by reason of such continuance.”

Rather, the court put its decision on the ground that, as it was not shown that the executor failed to exercise reasonable discretion, and as there was no evidence of the absence of good faith, the statute protected him. It would seem to me that in the absence of this statute the executor would be liable and that the burden is upon him to show that be exercised reasonable discretion and acted in good faith, to avail himself of its protection. But that may remain a moot question. The statute invoked is intended to protect executors lawfully and diligently discharging the duties of their office. The Brown Case (72 N. J. Eq. 667), cited by counsel, is an illustration, as where, under the terms of a will, the estate is to be held beyond the statutory period for distribution. And it also applies where there arc valid reasons for not promptly accounting, as, for instance, where the estate is in' litigation and as a result distribution cannot be made. But the statute does not and was never intended to protect a derelict executor where a loss is suffered during the period of his delinquency. Had the executor discharged his duty according to law, the loss to the estate could not have occurred.

The Orphans Court act requires an' executor to "state and settle his account within one year after his appointment unless the court, for good cause shown, allows further time;” and if be fails he may be cited by any person in interest, and if he neglects for two years, it becomes the duty of the surrogate to cite him, and failure, after citation, is cause for removal. Here the executor was in default nearly four year’s, and then filed his account only under pressure of citation. He gave various excuses for tire delay which seem to have found favor with the court below. He says, for one thing, that he was held up by the closing out of the paint business. It is all nonsense to say that it took him four years and more to wind up a little three or four hundred dollar affair, to sell a few old brushes and ladders, and to collect a few dollars of accounts, and it is perfectly absurd as an excuse for delaying the settlement of a $25,000 estate. Another reason is that he was delayed by the sale of the real estate. That is not true, for it appears by the account that the real estate was sold in 1915 andl 1916. His other excuse for not accounting earlier is that he was trying to make a settlement ■with the exceptant. This is pitiably weak and unworthy. Early in 191Ushe urged him to account and settle with her, and she persisted without success until she obtained the compulsory process of the court. He negotiated with her, and théy could not come to an agreement as to her share, but his negotiations were always under pressure of her demand for an official accounting. His failure to come to a settlement, obviously, does not relieve him of the charge of neglect. If he chose to bargain with her instead of following the plain line of statutory duty, he must suffer the consequence. It was not his privilege as executor to negotiate settlements with the beneficiaries. The performance of his trust-called him to account in the orphans court and to make distribution, as the testator directed, under the watchful eye and all-round protection of the court,- and that, in this case, was simple and easy of compliance. In the discharge of these duties, he was inexcusably and grossly negligent. No case has come under my notice recently where an executor (one who has not gained by his neglect, and this one has not) has abused his trust as this one has. The exceptant was entitled to the gifts from her deceased parent six years ago, and, withholding them until now, is not only a legal but a moral wrong. It is just that, when an executor has neglected his duty, and during the period of neglect there is a depreciation in the securities of the estate, the loss should fall upon him. Here the executor has no reason for complaint or any one to blame but himself, for, bad he turned over the estate within the time fixed by law, or reasonable leeway (and it was his right to distribute in kind), he would not have found himself in his present predicament, and the estate would have been saved the loss he now seeks to impose upon it.

There is another good reason for disapproving the allowances. The court below determined the amounts by the fluctuating stock market quotations. These, as we all know, are up one day and down the next. At the present time, as I am informed by counsel, the bonds have recovered and the present stock market quotations are nearly equal to the inventory appraisal.

The orphans court refused to charge the executor with interest that he should have secured by investment of cash on hand (exception 11). The cash amounted to upwards of three thousand dollars. The deceased had it on deposit in a savings bank where it drew 'interest at the rate of four per cent. In 1917 or 1918, the executor withdrew the money from the savings bank and put it in his own bank. By that I mean a bank of which he was the president, where it drew but two per cent. His motive for doing this cannot be characterized otherwise than as gross misconduct. Being in default in the settlement of his account, he ought to be charged with legal interest, but, unquestionably, he is liable at the rate the sum would have earned had he left the deposit with the savings institution.

Exceptions 17 and 18 were property overruled. The first was as to the value of the household furniture. The exception alleges it was worth $900. The orphans court found it to he worth $150. There was no- testimony before the court to warrant any higher figure. Ity the second the executor was sought to be charged with the value of a diamond ring alleged to be worth $200. The testimony shows it to be worth about $30. It never came to the notice of the executor nor could it have with i easonable diligence.

The order of the orphans court sustaining exceptions 1, 3. 4 and 11 will be overruled. In overruling exceptions 17 and 18 it will be affirmed. There was a counter-appeal taken by the executor which was abandoned at the hearing. As to this there will be an affirmance.

I regret that the allowance made to counsel'for the executor, which was charged to the estate, is not before me for review. They were incurred in defending the misconduct of the executor and. it seems unfair that they should be paid by the beneficiaries.


source: Caselaw Access Project

author: GUMMERE, CllIEE-JuSTICE.

license: Public Domain

text:
    Mary L. O’Connell v. Cornelius P. O’Connell.
    [Decided June 19th, 1922.]
    1. Where a husband and wife own property as tenants by the entirftty the wife is entitled to an accounting of the rents and profits collected by the husband from the common property, but the husband is not required to account for the rental value of the portion of the premises which he occupies as their home when the wife has deserted him without just cause, and has refused to return at the solicitation of the husband.
    2. Grounds of appeal that are not argued before the appellate court will be considered to have been abandoned.
    On appeal from a decree of the court of chancery.

      Mr. Ralph E. Lum, for the appellant.

      Mr. Arthur T. Vanderbilt, for the respondent.
   The opinion of the court was delivered by

GUMMERE, CllIEE-JuSTICE.

The parties to this suit are husband and wife. The bill in the case was filed’ by the latter, and has a double aspect. By it she seeks a decree compelling her husband to provide her with suitable support and maintenance under the statute, her claim in that regard being that he, without anjy justifiable cause, abandoned her and separated himself from her. She further prays a decree directing her husband to account for the.rents, issues and profits of certain premises in Morristown, the title to which stands in their joint names; and for the appointment of a receiver for the collection of rents which might thereafter accrue from the premises, and the payment of interest, taxes and other carrying charges thereon.

Upon the final hearing in the court of chancery the conclusion reached was that the proofs failed to support the wife’s contention that her husband had abandoned her or separated himself from her, but showed that she had voluntarily left his home and had neither returned nor offered to return to it. Her application for a decree ordering support and maintenance was consequently denied and the bill dismissed so far as that phase of the relief sought by her is concerned.

As to the second ground of relief, the main issue raised by the pleadings was whether the husband and wife -were tenants by the entirety of the premises in dispute or whether the title of the wife was vested in her merely as security for an advancement by her of a part of the purchase-money, which, as the husband claimed, was to be repaid by him to her from time to time under an agreement that when the last payment should be made her interest in the land should cease. After a consideration of the proofs upon this issue, the court determined that the husband had failed to overcome the legal presumption which the deed itself had created, namely, that the grantees therein were tenants by the entirety. Having reached this conclusion, the court then decreed that the husband should account to the wife for the rents already received by him from certain portions of the property which were occupied by the tenants, and for the rental value of that portion thereof which was occupied by himself; and, further, that a receiver be appointed to collect rents thereafter accruing, and out of the same to pay interest, taxes and repairs.

Neither party appeals from the portion of the decree dismissing the bill so far as it relates to the question of maintenance and support. The husband, however, appeals from the portion thereof which adjudges that the parties are tenants b3r the entirety and compels him to account for rents received by him and to pay the rental value of that portion of the premises in which he has his residence.

So far as the question of title is concerned, our examination of the proofs satisfies us of the correctness of the vice-chancellor’s conclusion that these parties held these premises as tenants by the entirety. Reaching this conclusion, we also concur in his view that the wife is entitled to an accounting from her husband of the rents actually collected b}r him and to share in such rents as may accrue in tire future. In the case of Buttlar v. Rosenblath, 42 N. J. Eq. 651, this court declared that, where the title to land rests in a husband and wife as tenants by the entirety, the wife holds in her possession during their joint lives one-lialf of the estate in common, with her husband; and in the later case of Schulz v. Ziegler, 80 N. J. Eq. 199, we held that the respective rights of the parties as between themselves during their joint lives were those of tenants in common; and one of the rights of a tenant in common as against his co-tenant, who lias collected rents from lessees in possession of the premises, is to have an accounting of the rents so collected. This right is so thoroughly established that a citation of authorities is hardly necessary. Among the cases in which it has been recognized and enforced are Hanneman v. Richter, 63 N. J. Eq. 753; Cole v. Cole, 69 N. J. Eq. 3; Lloyd v. Turner, 70 N. J. Eq. 425.

The principle upon which the rule rests is that a tenant in common, in leasing the common property and in collecting the rents from the lessee, acts not only in his own right but as the representative of his co-tenants, and that, consequently, to the extent that the moneys so collected represent the rental value of the interest of Ms co-tenants, it is held in trust by him for their use.

But the rale above recited has no application in determining the question whether a tenant in common who is himself in the possession and enjoyment of the premises held in- common is obliged to account to Ms co-tenants for the rental value of the property so occupied. In order to render one co-tenant liable to another for the use and occupation of the jointly-owned premises, there must be something more than a mere occupation thereof by tire former and a forbearance to occupy by the latter. Sailer v. Sailer, 41 N. J. Eq. 398. To hold him responsible to his co-tenant for the value of the use and occupation, it must not only appear that the latter is out of possession, but that he is actually excluded from the enjoyment of Ms right of possession by his fellow-tenant. Buckelew v. Snedeker; 27 N. J. Eq. 82.

In the present case the proofs show that these parties occupied the third floor of the common property as their residence; that the wife deserted her home without just cause-, and that she refused to return to it at the solicitation of her husband. Since her desertion of him he has continued Ms occupation of their home, and the proofs justify the conclusion that she is at liberty to return thereto and to resume the occupation thereof with her husband whenever she shall see fit to do so. On this state of facts it is apparent that there is no just ground for her assertion- that her husband is in exclusive possession of the third floor of these premises — that is, that he actually excludes her from the joint occupation thereof. She is not entitled, therefore, to call upon him as a co-tenant to account to her for the value of his user and occupation of the home, which belongs to them jointly. The decree, eonsequentty, should be modified, to the extent that it requires the appellant to account to his wife- for the rental value of that portion of the premises actually occupied by him.

Tli.e question of the propriety of ■ appointing a receiver of these premises is presented by the grounds of appeal. It has not, however, been argued before us, and we assume, therefore, that it has been abandoned by the appellant. We are not to be understood, however, in affirming this portion of the decree, as foreclosing the appellant from a right to appty to the court of chancery for the discharge of the receiver, if he shall deem it advisable to do so.

With the modification indicated the decree under review will be affirmed.

For affirmance — None.

For reversal — None.

For modification — The Chiee-Justice, Swayize, Trenci-iard, Parker, Bergen, Minturn, Black, Katzenbach, White, Heppeni-ieimer, Williams, Gardner, Ackerson, Van Bus-kirk — 14.


author: Gummeee, Chiee-Justice.

text:
    August Schlegel v. Charles J. Bott.
    [Decided June 19th, 1922.]
    1. Where a lease contained a clause requiring a tenant to make a deposit, and an option was granted therein to a tenant to purchase which provided that upon the exercise of the option the deposit should be applied upon the purchase price, the landlord, by letting the tenant into possession without requiring the deposit to be made, and receiving rent from the tenant in accordance with the terms of the lease, cannot l'efuse to convey in pursuance of an exercise by the tenant of the option to purchase on the ground that the contract was broken by failure to make the deposit.

      2. .Failure to perform a particular provision of a contract does not render the contract void as a whole, but merely voidable at the option of the parts' for whose benefit the condition wras inserted, and if such party does not manifest his intention to annul the contract by some act done or notice given within, a reasonable time after the failure occurs, he is presumed to have elected to consider the contract in force.
    On appeal from a decree in chancery advised by Vice-Chancellor Griffin, whose opinion is reported in 93 N. J. Bq. 330.

      Mr. Harlan Besson, for the appellant.

      Mr. J. Emil Walscheicl, for the respondent.
   The opinion of the court was delivered by

Gummeee, Chiee-Justice.

The bill in this case was filed by Schlegel to compel the execution of an agreement for the sale of land in the town of Union. The case came on to- be heard before the vice-chancellor upon the bill, answer and proofs, and a decree for specific performance was advised in accordance with the prayer of complainant’s bill. From this decree the defendant has appealed.

On the 17thi day of April, 1917, Bott, being the owner of the premises involved in the present litigation, executed an indenture of lease to Schlegel for a term of five years, to commence on the 1st day of September then next, at a yearly rent of $3,000 for the first two years and $3,300 for the remainder of the term, to be paid in monthly installments. The lease also provided that during the continuance thereof the lessee should pay the taxes assessed against the property. It also contained a further provision that the lessee should have the privilege of making alterations and changes in and about the demised premises; and, further, that before the lease should become operative .he should deposit with the lessor the sum of $1,500 as security for the surrender of the premises at the expiration of the lease in the state and condition provided therein, unless, during the running thereof, he should exercise an option to purchase the premises in accordance with the terms of a written agreement entered into between the parties on the same day upon which the lease was executed, in which case this sum of $1,500 should be credited upon the purchase price.

The agreement for sale just referred to required the lessor to convey ihe premises in fee-simple to the lessee a.t any time during the life of the indenture of lease that such conveyance might be demanded by the latter, the consideration, for the conveyance being $46,000, to be paid in accordance with the terms specified in the agreement.

Upon the day on which these two instruments were executed a portion of the premises was in the possession of one Tonjes, who conducted a saloon business there; another portion was occupied by a man who was carrying on a. butcher business therein, and the remaining part of the premises was in the possession of a bootblack. These three parties were in occupation as tenants of Bott.

■ Shortly after the execution of the lease and agreement for sale, and some months before the beginning of the term of the lease, the complainant, by arrangement with Tonjes and with the consent of the defendant, entered into possession of the part of the premises occupied as a saloon a,nd proceeded to make alterations therein for the purpose of adapting it to the carrying on of a hardware business which he proposed to establish there; and during the time of his occupation thereof, and up to the beginning of the term of the lease, he paid Bott $125 per month for the same. On September 1st, 1917, the complainant began the payment of the monthly installments of the rent called for by the lease, and at the same time the defendant instructed the other tenants — that is, the butcher and the bootblack — to pay the rent which aeciued under their respective leases to the complainant, and this was done each month until June, 1920. During all of this time the complainant continued to pay the monthly installments called for by the lease, and also paid the annual taxes assessed against the property. On the 1st of June, 1920, in the exercise of the right t which he conceived was vested in him under the contract for sale, the complainant demanded a conveyance of the property from the defendant, tendering himself ready to pay the purchase-money upon the delivery of the deed. The defendant refused to comply with this demand upon the ground that the lease which was executed in 1917 had never become operative, because of the fact that the complainant had not deposited with him the sum of $1,500, as required thereby; that, consequently, he, the complainant, was in possession, not under the lease but as a mere tenant from month to month; and that, as the agreement for the sale was only binding in case the lease had become operative, defendant was under no obligation to make the conveyance.

The requirement of the lease appealed to by the defendant was inserted therein solely for his benefit. He had a right, if he had seen fit, to insist upon its performance as a condition precedent to the entry upon the premises by the complainant under the lease; but he also had a right to waive that performance and to accept the complainant as a tenant under the lease, notwithstanding the failure of the latter to deposit the $1,500. He made no objection to the entry of the complainant upon the whole premises as a tenant, notwithstanding his failure to make the deposit. He permitted him as tenant to make the changes and alterations in the premises which the lease authorized. He instructed the parties in possession of the butcher shop' and the bootbladring establishment to recognize the complainant as their landlord. He for two years accepted from him the monthly installments of rent called for by tire lease, and permitted him to-pay the annual taxes upon the demised premises in accordance with the requirement of that instrument. All this he did without even a suggestion to the complainant that the rights which he was enjoying as tenant were not those granted by the written lease.

The rule is settled that whenever a party to a contract has consistently acted in such a way as to indicate to his co-contractor that he does not intend to hold the latter to a particular provision in the agreement, he is to be taken to have waived his right to enforce that provision. The whole agreement does not become absolutely void for failure of performance of a particular provision in it. It is merely voidable at the option of the party for whose benefit it has been inserted. If he desires to exercise that right and anna] the contract, he must manifest his intention to do so by some act done or notice given within a reasonable time after the failure occurs; and, in the absence of such manifestation, he is to be presumed to have elected to consider the contract in force. Grigg v. Landis, 21 N. J. Eq. 494, and cases cited.

The defendant, having by his conduct treated the lease as an existing contract between himself and' the complainant, and having thereby waived his right to declare the lease inoperative db initio, cannot thereafter be heard to assert that the lease never had vitality and that the lessee named therein was not 'in occupation of the leasehold estate by virtue of its provisions.

We concur, therefore, in the view of the vice-chancellor that, under the circumstances of this case, the failure of the „ complainant to make the $1,500 deposit called for by the lease, constituted no bar to his right to demand and receive a. conveyance of the premises at any time during the continuance of the term created thereby.

The decree under review will be affirmed.

For affirmance — Ti-ie Chiee-Justice, Savvy,ze, Trbnchard, Parker, Bergen, Minturn, Black, Katzenbaci-i, White, Heppenheimer, Williams, Gardner, Aokerson, Van Bus-kirk — 14.

For reversal — None.


author: Gummere, Ci-iiee Justice.

text:
    Title Guarantee and Trust Company v. Emily B. Goeller et al.
    [Decided June 19th, 1922.]
    1. Neither the purchasei1- at a judicial sale, nor- his assignee, can be arbitrarily deprived, by the officer who conducts such sale, of a fixed and definite legal right which the law vests in the former as such purchaser.
    2. -The act of April 8th, 1919 (P. L. 1919 p. 118), providing for the apportionment of current annual taxes between the seller and purchaser of real estate, does not apply to judicial sales.
    On appeal from an order in chancery.

      Mr. Harlan Besson, for the appellant.

      Mr: Frederick K. Hopkins, for the respondent.
   Gummere, Ci-iiee Justice.

A bill for partition having'been filed, and an actual division of the lands between the several tenants in common not being-feasible, a decree for their sale was made, directed to one of the special masters of the court of chancery. The premises were offered for sale at public auction in due course, and, one Charles Barbash being the highest bidder, they were struck off to him for the sum of $56,000. Before the time fixed for the delivery of the deed arrived Barbash assigned his bid to the Serbarkis Realty Company, and a deed was executed and delivered to the assignee by the special master. At the time of the delivery of the deed, June 3d, 1921, the grantee claimed that there should be deducted from the purchase-money one-half of the current taxes for that year, basing- its alleged right to such deduction upon chapter 67 of the laws of 1919. P. L. 1919 p. 118. The special master refused to recognize the validity of this claim, and insisted upon the payment of the whole amount of the bid as a prerequisite to the delivery of the deed. After some discussion between him and the president of the realty company, the latter agreed to pay the purchase price and accept delivery of the deed under prbtest. The special master refused to close the transaction unless the realty company accepted the deed and paid the amount of the bid unconditionally. The president of the company thereupon paid the purchase price and accepted delivery of the deed. Thereafter, and before the distribution of the purchase-money, the realty company applied to the chancellor for an order compelling the special master to refund to it so much of the purchase-money as represented the one-half of the current taxes for the year 1921. Upon the hearing of the matter it was considered by the court that the statute of 1919 did not entitle the purchaser to the deduction asked for, and the application was denied. The present appeal is from the order of denial.

At the threshold of the inquiry here we are met with the contention of the counsel for respondent that the appellant, by accepting the deed and paying the full amount of the purchase-money as a condition precedent to its delivery, estopped itself from any right to the relief now sought, the theory of the contention being that under the conditions exhibited, the payment of the whole amount of the purchase-money- was voluntary. We consider this contention unsound. A purchaser at an official sale becomes invested with fixed and definite legal rights, of which he cannot be arbitrarily deprived by the officer who conducted the sale. Chamberlain v. Larned, 32 N. J. Eq. 295. And this right of the purchaser passes to his assignee by virtue of the assignment. It follows, therefore, that, if the claim of the realty company to have deducted from the purchase price the one-half of the taxes assessed- upon the premises for the year 1921 was sound — that is to say, that it had a fixed and definite legal right to have this deduction made — the refusal of the special master to recognize that right, and his enforcing the payment of the whole .amount of the purchase-money as a condition precedent td the delivery of the deed, could not operate to destroy that right, nor was the compulsory payment a waiver thereof. Reaching this conclusion, we pass to a consideration of the soundness of the appellant’s contention.

The statute upon which it rests its claim declares that:

“Upon the sale and transfer, for a valuable consideration, of any real estate in this state, unless otherwise provided in a written agreement between the seller and purchaser, or unless otherwise expressly stipulated in the deed of conveyance, the seller shall be liable for tbe payment of such proportion of the taxes for the current year upon tbe property to be conveyed as the time between the first day of January previous and the date of the delivery of the deed by the seller to the purchaser bears to a full calendar j^ear. * * * The liability of the seller herein provided shall exist only between him, his heirs, executors, administrators and assigns, and the purchaser and his heirs, executors, administrators and.assigns,” &c., &c.

We do not stop to consider whether a vendee has a right under this statutory provision to extinguish the vendor’s liability, against the will of the latter, by withholding part of the purchase-money for thatl purpose, preferring to rest our conclusion upon a more fundamental basis. It seems clear to us that the legislature in the enactment of this statute did not intend that it should embrace within its scope judicial sales. The. liability of the seller rests not only upon himself, but also upon his heirs, executors, administrators and assigns. If tbe theory of the appellant is sound,' then the special master who made the sale which is the subject-matter of the appeal is personally liable for the payment of a proportionate part of the taxes, and that liability continues against his heirs, executors, administrators and assigns. Such a purpose on the part of the legislature is not to be attributed to it unless it is made clear by the very language of the statute. To give it this scope is to impose a personal liability upon every judicial officer who- executes the mandate of a court by making sale of real estate either under an execution or under an order for sale. Counsel fox appellant argues that, if it be considered that it was not the purpose of the legislature to impose this personal obligation upon the officer making the sale, then it should be held to rest upon those whom he represents in making it; that is, upon the party to the litigation for whose benefit it is made. Tire conclusive answer to this contention is that such public officer is a representative of the court whose judgment or decree be executes, and is in no sense an agent or representative of the parties to a litigation. He is not selected by them; he cannot be discharged by them; nor is he subject to their control in the performance of his duties. They cannot even protect themselves against his miscarriages, but must apply to the court whose appointee he is for relief against them. Chamberlain v. Larned, supra, 302.

Beaching the conclusion that the statute appealed to has no application to mandatory sales of real estate,, made in pursuance of a judgment at law or a decree or order in chancery, the order under review will be affirmed for that reason.

For affirmance — The Chibe-Justice, Swayze, Trenci-iarb, Parker, Bergen, Minturn, Black, Katzenbach, White, Heppenheimer, Williams, Gardner, Ackerson, Van Bus-kirk — 14.

For reversal — None.


author: Swaxze, J.

text:
    Dymtro Semenowich et al., complainants-appellees, v. Mayk Melnyk et al., defendants-appellants.
    [Decided June 19th, 1922.]
    1. Where both grantor and grantee to a deed acted with intent to defraud the grantor’s creditors, the deed is void.
    2. Proof that a conveyance was made to protect the property from the grantor’s creditors until a more favorable time for selling it, and that the plan was proposed by the' grantee who paid the grantor a sum of money to give apparent validity to the transaction, which sum was subsequently repaid to him to discharge taxes levied upon the land after the conveyance, shows that' the grantee participated in the fraudulent intent, and, therefore, the deed is void.

      8. The fact that the conveyance was intended only to postpone the sale until it could be made to better advantage, does not make the deed valid.
    4. A fraudulent conveyance is void only as against creditors or others who may have lawful actions or demands, and is valid as between the parties.
    O. Equity will not-lend its aid to consummate a fraud, however hard the case may be, and will leave both parties to a fraudulent conveyance where it finds them,
    C. A subsequent grantee of property, previously conveyed to another in fraud of creditors, acquires no greater rights than his grantor had, and equity will give him no relief which it would deny to the grantor because of bis participation in the fraud.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Backes, whose opinion is reported in 93 N. J. Eq. 67.

      Mr. William Greenfield, for the complainants.

      Mr. Theodore McCurdy Marsh, for the defendants.
   The opinion of the court was delivered by

Swaxze, J.

This is substantially an application for surplus money after a decree setting aside a conveyance as in fraud of creditors and ordering a sale of the property to satisfy the debt. The application. is made in advance of sale in order that the parties entitled to the surplus may know how much they may bid to protect their interests. No objection is made to this procedure. In fact the •first application to) the court for instructions was made by Novak, the present appellant. He raises no objection and we think, therefore, we may properly deal with the substantial merits of the case. The controversy is between Michael Novak and Leonard J. Fruzinski. Novak claims under the fraudulent conveyance from Maylr Melnyk and wife dated November 16th, 1918, recorded November 18th, 1918. Fruzinski claims under a conveyance from Maj'k Melnyk and wife dated April 15th, 1921, recorded May 2d, 1921. There is no conveyance back from Novak to Melnyk and as far a-s the pleadings or proofs show the legal title is still in Novak. Fruzinski, by cross-bill, claims a right to redeem the land. Novak, by answer and cross-bill, avers that by reason of the fraud of Melnyk, Fruzinski and Melnyk have no right or standing in court and no right to ask for a redemption of the lands or for any relief in equity in connection therewith. Obviously this is correct unless the deed of November 16th, 1918, from Melnyk to Novak is void. Otherwise Novak’s title was at most only voidable and Melnyk had nothing to convey to Fruzinski. At the time Fruzinski’s cross-bill and Novak’s answer were filed there was an adjudication made by decree in this suit on January 25th, 1921, that the deed from Melnyk to Novak, was made and executed by them with intent to cheat and defraud the complainants (three creditors of Melnyk). If this adjudication were meant to adjudicate that Novak as well as Melnyk acted fraudulently, it would be an adjudication of fraud participated in by grantor and grantee and the deed would be void. That is not the case and the decree on Fruzinski’s cross-bill expressly so adjudicates byi way of correction of what the vice-chancellor in his opinion of July 25th, 1921, calls an inadvertence in the decree of January 25th. An inadvertence it undoubtedly was since the whole frame of the decree is based on the idea that the convej anee is not void but valid by way of security to Novak for actual bona fide advances to Melnyk and it is sustained as an equitable mortgage under the rule of Demarest v. Terhune, 18 N. J. Eq. 532. But if the deed is sustained as an equitable mortgage, it 'must be good to that extent and there is no legal title in Fruzinski. On the face of the case there is no equitable title since the deed was accompanied by a declaration of trust of even date in favor of Nicholas Yacentj', who as far as the case shows is still the equitable owner. We need not dwell further on this state of the title, since our examination of the cause has led us to the conclusion that we are dealing with a case of fraudulent intent shared by both the grantor Melnyk and the grantee Novak. It is enough to cite Muirheid v. Smith, 35 N. J Eq. 303, 310; New York Fire Insurance Co. v. Tooker, 35 N. J. Eq. 408; affirmed, 36 N. J. Eq. 646; Horton v. Bamford, 79 N. J. Eq. 356 (at p. 374). This malees necessary an examination of the facts.

At the time of the deed to Novak, Melnyk wasi heavily in debt and suits were pending. He consulted Eossback, a lawyer, who told him he must do something, that Novak wanted to-help Mm, to go to Novak and return the next day. He went to see Nóvale that night. Novak told him- he already “knew about,” evidently referring to the talk with Eossback. The three met the next day and Nóvale told Melnyk that if judgments came in, he would lose his property and never get a penny. Novak then said, as testified by Melnyk, “If you turn the property to me I will hold it until you get customer to sell it for better prices and pay up,” to wMch Melnyk says he replied, “Well, I think that will be good,” and he did so, Eossback transacting the business. The form of passing some money from Novak to Melnyk was gone through at Novak’s suggestion because Novak said, accoi'ding to Melnyk’s testimony, “When we make transaction we must have some show; I pay you some money.”- The amount paid by Novak was $800; of which $200 went to Eossback for sendees, $500 to Eossback for a loan afterward repaid, and $100 was used by Melnyk for living expenses. In the following January, Melnyk paid back to Novak the $800 for the purpose of enabling him to pay taxes which were not a lien at the time of the conveyance and were Novak’s obligation if the deed had been genuine. The upshot was that Novak had title to the property and had paid nothing for it. On the same day that Melnyk executed the deed, Novak executed a declaration of trust which, however, was not recorded until June 4th, 1919. It ran in-favor of Nicholas Yacenty, a brother-in-law of Melnyk. The evidence as to Yacenty’s interest is not very convincing but Melnyk says he owed Yacenty $1,000. Yacentj'- was not produced as a witness. We think these combined facts sufficient to prove a fraudulent intent on the part of both Nóvale and Melnyk. Novak planned what he and Melnyk exeexxted. Eossback testified that the deed was given

“for the purpose of conserving the properties to creditors. Creditors were pressing Melnyk very badly and the mortgages and tax claims had been outstanding and the Harrington company had already gone into possession of the Grove street property and started to collect rents.”

Rossback says also the declaration of trust was not put on record because

“it was arranged that time between the parties that the declaration of trust was to remain with me unrecorded so that Novak could handle the property expeditiously if he had occasion to.”

The case presented is a deliberately planned scheme to hinder, delay and defraud creditors and to conceal for more than six months the name even of the ostensible owner of the equitable interest. The scheme is not helped by the pretence that it was meant for the benefit of creditors to make it possible to sell to better advantage. The law does not permit a debtor to choose his own convenience for the payment of his debts. Our statutes, like the statute of Elizabeth, expressly forbid hindering or delaying as well as defrauding creditors of their lawful actions. Comp. Stat. 2618 § 12. The statutes, however, make a fraudulent conveyance void only as against creditors or others who may have lawful actions, debts, damages or demands, and it is well settled that such conveyances are valid as between the parties. The parties arc not hindered, delayed or defrauded of lawful actions, debts, damages or demands, and if they were it is by their own acts and they have themselves to thank for it. Baldwin v. Campfield, 8 N. J. Eq. 891; Schenck v. Hart, 32 N. J. Eq. 774. There is no resulting trust in favor of the fraud-doer who furnishes the money. Cutler v. Tuttle, 19 N. J. Eq. 549; 562; Surye v. Lemberger, 114 Atl. Rep. 454. Equity will not lend its aid to consummate -a fraud however hard the case mlay be. The parties have made their bed; they must lie in it. Chancellor Williamson quotes the well known passage from Justice Story and adds: “We must not be misled by any supposed hardship of the ease. The conduct of the son-in-law,, in this transaction, may justly excite our indignation. Our sympathies are naturally with the old man whom he may have deceived and wronged; and yet we may not violate a single principle, upon which law and equity are administered, to permit the one or vindicate the other.” This court again spoke to the same effect through Justice Magie in Schenck v. Hart, 32 N. J. Eq. 774. Equity leaves fraud-doers where it finds them. In the present ease the creditors seem to have been paid out of the property through Novak as a medium, and Novak holds the property necessary to reimburse him; but if it were necessary for him to have the aid of the court it would be denied him, because of his attempted fraud. So aid must be denied to Melnyk and his grantee Fruzinski; to Melnyk because he participated in the fraud; to Fruzinski because he can acquire no better right than Melnyk, his grantor, had. It wiould be preposterous to allow a fraud-doer to escape the consequence of his fraud by putting some one else in his place. The rights of fraud-doers are not looked at in the light of the wrong they accomplish but of the wrong they plan.

Let the decree be reversed, with, costs, and a decree entered dismissing both cross-bills.

For affirmance — Black, Williams, Aokerson — 3.

For reversal — Ti-ie Cheep-Justice, Sway.ze, Trenchaed, Parker, Bergen, Minturn, Katzenbaci-i, White, Heppeni-ieimer, Gardner, Van Busicirk — 11.


author: Tkenchard, J.

text:
    The Mayor and Aldermen of Jersey City, complainant-respondent, v. Jersey City Water Supply Company et al., defendants-appellants.
    [Argued March 8th, 1922.
    Decided June 19th, 1922.]
    1. The cardinal rule in the construction of contracts is that the court must, if possible, ascertain and give effect to the mutual intention of the parties, as far as that may be done without the violation of legal principles. And while an instrument must be construed according to the intent of the parties as manifested by the instrument itself, yet, where the construction is doubtful, the court may look into the surrounding circumstances, and avail itself of such light as they may afford, in ascertaining the true meaning of the language and terms employed.

      2. AVhere a city retained $500,000 from the sum due a water supply company under a clause in the company’s contract to furnish the city with a water supply system, providing that the sum so retained should be paid to the company vdienever the company should deliver to the city a “valid release” from a certain canal company and its lessee, releasing all their rights to divert the waters 'of the watershed of a certain river above a proposed reservoir site, “the same to take effect upon their abandonment of the navigation of said canal” between certain named points “under legislative sanction,” a so-called release of such rights by the canal company and its lessee, reciting “this release to take effect upon our abandonment of the navigation of the” said canal between the points named in the contract “under legislative sanction,” was not, no legislative sanction being shown, sufficient compliance with the contract to justify payment of the $500,000.
    S. The mere fact that the successful party, in a cause in the court of chancery, is a municipal corporation, does not deprive that court of power to award a counsel fee to such successful party, to be taxed in the costs and to be paid by the unsuccessful party.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lewis, whose opinion is reported in 111 Ail. Rep. M21, and 98 N. J. Eq. 36.

      Mr.-John B. Humphreys, Mr. William A. Sumner and Mr. Richard V. IAndabury, for the appellants. .

      Mr. Tliomas J. Brogan and Mr. John- Milton, for the respondent.
   The opinion of the court was delivered by

Tkenchard, J.

This is another phase of an old litigation.

Briefly, the pertinent facts are these:

Jersey City entered into a contract with Patrick H. Flynn for the construction of a new water supply, by the terms of which Flynn was to supply to the city the whole flow of the .Rockaway river, to the extent of seventy million gallons daily. Flynn became insolvent, and his interest in the contract was assigned to the Jeisey City Water Supply Company, which proceeded with the performance of the contract. During the work of constraetion it was discovered that the Morris Canal and Banking4 Company had a superior right to divert the waters of the Rockaway river for the purposes of its canal. Thereupon, on Juty 8th, 1901, the contract was modified, pursuant to the authority conferred by chapter 207 of laws of 1901. P. L. 1901 p. 416. Subsequently, a litigation ensued between Jersey City and the water supply company based upon the assertion by the city that the works had not been completed according to the contract, and the court of chancery (the suit being one for specific performance) made a decree and therein provided that the city should retain the sum of $500,000 as authorized by the contract, dated July 8th, 1901, until the same should become due under the terms and conditions of the contract. Jersey City v. Flynn, 74 N. J. Eq. 104. That decree, so far as concerns this matter, was affirmed in this court. 76 N. J. Eq. 607.

The provision of the contract referred to, and which gives rise to the present controversy, is paragraph 4, and reads as follows:

“Fourth — Whenever the contractors shall deliver to Jersey City a valid release from 'the Morris Canal and Banking Company and its lessee, releasing all their rights to divert the waters of the Rockaway river watershed out of said river above said proposed reservoir site, the same to take effect upon their abandonment of .the navigation of said canal between Dover and Montville, under legislative sanction, for a sum therein to be named and to 'be paid upon such abandonment, then there shall be paid over by Jersey City to said contractors all of said sum of five hundred thousand dollars, except the amount named in said release, which last-mentioned amount the contractors authorize Jersey City to pay to said Morris Canal and Banking Company and its lessee upon the actual abandonment aforesaid.”

Ou May 12th, 1909, the Jersey City Water Supply Company obtained from the Morris Canal and Banking Company and its lessee, the Lehigh Yalffiy Railroad Compaq, and delivered to Jersey City an instrument which, after reciting, among other things, the agreement of July 8th, 1901, continued as follow?:

“Now know ye, that we, the said Morris Canal and Banking Company and Lehigh Valley Railroad Company, lessee of the Morris Canal and Banking Company, * * * in consideration of the premises, and of the sum of one dollar ($1.00), to us paid upon the execution of this writing and to be paid to us on such abandonment of navigation, have released, and by these presents do release, unto the mayor and aldermen of Jersey City, their successors and assigns forever, all our rights to divert the waters of the Rockaway river watershed out, of said river above the proposed reservoir site mentioned in said supplemental agreement of July 8th, 1901, upon which site there has since been erected a reservoir below Boonton by the Jersey City Water Supply Company under its contracts with Jersey City. This release to take effect upon our abandonment of the navigation of the Morris canal, between Dover and Montville, under legislative sanction and upon the payment by the mayor and aldermen of Jersey City to us of the sum of one dollar ($1.00) as hereinbefore provided upon such abandonment.”

In the earlier litigation, to which we have referred, the Jersey GEy Water Supply Company sought to have adjudicated by the final decree its right to the present surrender to it of the $500,-000, its contention being' that, by the - delivery of the release aforesaid, its'right to the money had become perfect. This was refused upon the ground, however, that it was not properly embraced in the subject-matter of the litigation, and that the proper way to raise the question wa.s by a supplemental bill to be filed by the water supply company. Jersey City v. Flynn, 78 Atl. Rep. 391. See, also, Jersey City v. Jersey City Water Supply Co., 79 N. J. Eq. 215. That has been done, and the decree made thereon dismissing such supplemental bill is now before us on the present appeal.

On the final hearing, Vice-Chancellor Lewis considered that the delivery of the release did not entitle the water supply company to the present payment of the $500,000, and in this, we think, he was right.

The question at issue is, Has the water supply company, by obtaining and delivering to the city the so-called release of May 12th, 1909, fulfilled the condition of the fourth paragraph of the contract between the water supply company and Jersey City of July 8th, 1901, so as to be entitled to the payment of the $500,000 retained under the decree?

Of course, the determination of that question depends upon the true construction of the language of the contract.

The cardinal, rule in the construction of contracts is that the court must, if possible, ascertain and. give effect to the mutual intention of the parties, as far as that may be done without the violation of legal principles. And while an instrument must be construed according to the intent of the parties as manifested by the instrument itself, yet, where the construction is doubtful, the court may look into the surrounding circumstances and avail itself of such light as they may afford in ascertaining the true meaning of the language and terms employed. Fletcher v. Interstate Chemical Co., 94 N. J. Law 332; affirmed, 95 N. J. Law 543.

So considered the rights of the parties under the contract are quite certain.

The purpose of the retention of the $500,000 was to protect Jersey City against the abstraction of water from the Rockaway river by the canal company and its lessee to such an extent as to reduce its daily supply below the figure fixed by the contract, and that protection could only be afforded by the actual termination of the canal company’s right of diversion under its charter.

As we have seen, the fourth paragraph of the contract provided that the $500,000 retained should be paid whenever the water supply company should

“deliver to Jersey City a valid release from the Morris Canal and Banking Company and its lessee, releasing all their rights to divert the waters of the Rockaway river watershed out of said river above said proposed reservoir site, the same to take effect upon their abandonment of the navigation of said canal 'between Dover and Montville, under legislative sanation.”

Properly construed, that means that the money should be surrendered to the water supply company as soon as a valid release was delivered, which should be presently effective — that is, one which should extinguish any future right of appropriation by the canal company. Now, the so-called release which was executed and delivered, although following the form of the con-ti act, does not comply with the manifest intent and purpose of the contract. By its terms it does not take effect until 'abandonment of the navigation of the canal between Dover and Mont-ville under legislative sanction. Legislative sanction lias not been given. The release, therefore, was not effective when it was delivered; it is not effective to-day, and may never be effective, for the legislature may never release the canal company from its public duty of operating the canal between the points mentioned in the document. Under present conditions, the instrument, while in the form of a release, is not the valid release contemplated by the contract, since it never can become operative in the slightest degree until the provision with relation to abandonment under legislative sanction has been fulfilled.

The supplemental bill of the water supply company was therefore properly dismissed, with costs.

The water supply company further complains of that part of the decree of dismissal which allows-Jersey City a counsel fee to be taxed in the costs and) to be paid by the company.

But we think the allowance was proper. No complaint is made as to the amount of the fee, the sole contention being that it was improper, in view of the fact that the prevailing party is a municipal corporation, the argument being based upon the theory (without any evidence to support it) that the city “had not been put to any additional expense” by the litigation. But the mere fact that the successful party is a municipal corporation does not deprive the court of chancery of power to award a counsel fee to the successful party to be taxed in the costs and to be paid by the unsuccessful party. P. L. 1910 p. 427

The decree below will be affirmed, with costs.

For affirmance — The Chibe-Justice, Swayze, Trenci-iard, Parker, Bergen, Minturn, Black, Katzenbaoi-i, HeppenI-IEIMER, ÁCKERSON, VAN BuSKIRK-11.

For reversal — White, Williams, Gardner — 3.


author: Trenchard, J.

text:
    Charles Scherman and Samuel Feigelson, complainants-respondents. v. Jack Stern and May Stern, defendants-appellants.
    [Submitted March 27th, 1922.
    Decided June 19th, 1922.]
    1. There is a sufficient consideration for a promise if there is any benefit to the promisor or any loss or detriment to the promisee. It is not necessary that a benefit should accrue to the person making the promise; it is sufficient that something valuable flows from the person to whom it is made, or that he suffers some prejudice or inconvenience, and that the promise is the inducement to the transaction.
    2. When a prospective purchaser is induced to buy a business and good-will by the agreement of the manager of the business not to engage in a competing business, and such purchaser agrees to employ such manager for one month at the same salary and to furnish him and his .wife living quarters free for the same period, a sufficient consideration exists for the manager’s promise not to engage in a competing business.
    3. While 'the general rule is that a preliminary injunction will not issue where the material fact in complainant's bill and affidavits, on which the complainant’s right depends, is met by a full, explicit and circumstantial denial under oath, yet, where the denial lacks these essential qualities, and upon the entire showing from both sides it appears reasonably probable that the complainant had the right claimed, the injunction may issue.
    4. In a contract not to engage in a competing business the restraint must be reasonable. The -test to be applied in deciding whether the restraint is reasonable or not is to consider whether it is only such as is necessary to afford a fair protection to the interest of the party in whose favor it is given, and not so large as to interfere with the interests of the public.
    o. It is no objection to an agreement not to compete with a mercantile business that the restraint is unlimited in point of tima when it is reasonably limited in point of space.
    6. Where the complainants declined to purchase a business and goodwill unless the defendants would covenant not to compete therewith, neither the fact that the restraint was unlimited in point of time, nor the fact that the restraint continued after the business should be sold by the complainants, renders the covenant unreasonable.

      7. An injury is irreparable when it cannot be adequately compensated in damages or when there exists no certain pecuniary standard for the measurement of the damages. Inadequacy of damages as a compensation may be due to the nature of the injury itself or the nature of the right or property injured. Acts destroying a complainant’s business, custom and profits do an irreparable injury and authorize the issuance of a preliminary injunction^
    On appeal from an order of the court of chancery advised by Vice-Chancellor Fielder.

      Messrs. Stein, Stein & Hannoch (Herbert J. Hcmnoch on the brief), for the appellants.

      Messrs. Blatt & Lesser (Louis B. Lesser on the brief), for the respondents.
   The opinion of the court was delivered by

Trenchard, J.

Tlris is an appeal from an order of the court of chancery granting a preliminary injunction restraining the defendants, until further order of the court, from engaging, directly or indirectly, in the selling of candy, stationery and tobacco, at the post-office building in Metuehen, in this state, in competition with the complainants.

Without regard to certain particulars hereinafter to be noted, the situation as disclosed by the bill and affidavits was this:

Prior to October, 1921, the defendant Jack Stern was employed by Abraham Miller as manager and salesman in his candy, stationery and tobacco store at Metuehen. He was assisted at intervals by his wife, May Stem, the other defendant. Miller desired to sell the business and] good-will to the complainants. The complainants knew that the defendants had considerable acquaintance in Metuehen, and had personal influence with the local trade, and refused to buy unless both the defendants and Miller would agree not to compete with that business in. Metuehen. After exacting a promise from the complainants to employ Stern for one month at the same salary and to allow him and his wife to live upon the premises, rent and light free for that period, the Sterns, with full knowledge of the complainant’s attitude, signed a contract, under seal, dated October 22d, 1921, covenanting therein, for a stated consideration of one dollar (which was paid) not to open or to be engaged or' employed in,_ directly or indireetfy, any business in Metuchen, New Jersey, similar to the one sold by Miller to the complainants, and further covenanted that this obligation was to “remain in force after the above-mentioned store will be sold to other parties.”

Complainants then paid Miller $8,000 and he conveyed to them, their executors, administrators and assigns, the business and good-will in question, and further covenanted not to engage in competition with the business. The complainants immediately took over the business, retained the services of Mr. Stern for one month, and permitted him and his wife to occupy the apartment on the second floor, rent and light free. At the end of that month, the Sterns opened a cigar, stationery and candy store in the post-office building in Metuchen, within two hundred feet of the business purchased and conducted b3r the complainants.

It was the conduct of that business which was enjoined by the order under review.

We are of the opinion that the injunction should stand until final hearing.

There is no merit in tire first contention of the appellants that the injunction was improper because their agreement not to engage in a competitive business was without a sufficient consideration.

The rule is that there is a sufficient consideration for a promise if there is any benefit to the promisor or any loss or1 detriment to the promisee. W. G. Root Construction Co. v. West Jersey and Seashore. Railroad Co., 85 N. J. Law Burgesser v. Wendell, 73 N. J. Law 286. It is not necessary that a benefit should accrue to the person making the promise; it is sufficient that something valuable flows from the person to whom it is made, or that he suffers some prejudice or inconvenience, and that the promise is the inducement to the transaction. Holt v. United States Security Loan Insurance Co., 74 N. J. Law 795. Accordingly, in the present case, the payment of the $8,000 by complainants -to the owner of the business upon the inducement of the promise of the Sterns not to engage in a similar business, and the agreement of the complainants to employ Stern at the same salary for one month and to furnish him and his wife living quarters free for the same period, was a sufficient consideration for the covenant not to compete.

In this same connection, the appellants further contend that the agreement upon which the complainants’ light to relief is based is invalid because the true consideration on which it was founded has failed. But we see no merit in this contention. It is based solely on the unsupported statement of Jack Stern, in his answering affidavit, that, pending the negotiations for the sale of the business, the complainants agreed to pay him $300 upon the consummation of the sale, and that such payment was not made.

The complainants deny that any such promise was made.

Of course the existence of a right violated is a prerequisite to the granting of an injunction. The general rule is that a preliminary injunction will not issue where the material fact in complainants’ bill and affidavits, on which, the complainants’ right depends, is met by a full, explicit and circumstantial denial under oath. Brunetto v. Montclair, 87 N. J. Eq. 338; Meyer v. Somerville Water Co., 79 N. J. Eq. 613; Citizens’ Coach Co. v. Camden Horse Railway Co., 29 N. J. Eq. 299. But that is not this case. ’ Without regard to what may possibly appear upon final hearing, we think the bare statement of the promise of $300 contained in Stern’s affidavit is no sufficient reason for denying an injunction designed to preserve the status quo until final hearing. The affidavit lacked the essential qualities, and upon the entire showing from both sides it appears reasonably probable that the agreement was upon a sufficient consideration which had not failed, and that the complainants had the right claimed.

The appellants next claim that their agreement not to engage in a competing business is in restraint of trade and therefore unenforceable. We think not.

Of course in a contract not to engage in a competing business the restraint must be reasonable,, and the test to' be applied in deciding whether the restraint is reasonable or not is to consider whether it is only such as is necessary to afford a fair protection to the interest of the party in whose favor it is given, and not so large as to interfere with the interests of the public. Taylor Iron Co. v. Nichols, 73 N. J. Eq. 684.

In the present case the covenant was to refrain from engaging-in or being employed in a business similar to that sold to the respondents, i. e., a cigar, stationery and candy store, in Metuchen, a borough of about three thousand five hundred population. The agreement was, therefore, one where the restraint was reasonably limited in point of space but unlimited in point of time. Whatever may be the rule respecting contracts to desist from the practice of a learned profession (Mandeville v. Harman, 42 N. J. Eq. 185), certainly it is no objection to an agreement not to compete with a mercantile business that the restraint is unlimited in point of time when (as here) it is reasonably limited in point of space. Carll v. Snyder, 26 Atl. Rep. 977; Finger v. Hahn, 42 N. J. Eq. 606; affirmed, 44 N. J. Eq. 604; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507.

Neither the fact that the restraint was unlimited in point of time, nor the fact that the “obligation remains in force after the above-mentioned store will be sold to other persons” renders the covenant unreasonable. The restraint was no greater than was necessary to afford fair protection to the complainants. The Sterns had influence with the trade in that line in the borough of Metuchen and the complainants reasonably desired to avoid the exercise of that influence to their prejudice. In purchasing the good-will of the business they may be fairly supposed to have purchased, not only for their own immediate purpose and benefit, but for the purpose of sale, or, perchance, for the use of their personal representatives. Carll v. Snyder, supra. If the defendants desired to continue in a similar line of business, the whole world outside of Metuchen was open to them. If they desired to engage in another line of business in Metuchen they were at liberty to do so.

It is also clear that the restraint was not so great as to interfere with the interests of the public. It cannot be said that the public suffers an injury in being deprived of the privilege of buying candy, stationery and tobacco of the defendants who, according to the present showing, attempted to carry on the business in violation of their solemn obligation not to do so. There is no great personal skill required in the business in question tending to limit the number of people who may engage in it in Metuchen, and the fact that the defendants are enjoined from engaging in the business there does not indicate that the people of the borough will suffer to any appreciable degree.

Lastly, it is contended that there “was no likelihood of irreparable injury so imminent as to warrant the court in granting the preliminary injunction.”

But that contention is not well founded in fact. According to the affidavit of one of the complainants, the defendant Jack Stem said to him, shortly before opening] up the competing business, “Charlie, you come across with some money ox I will open a store in this town, and in six months’ time your store will be worth $1,000;” that complainant replied, “Wiry- you and your wife have agreed not to- do that,” 'to which Stern responded, “Never mind my agreement.” This was not denied by Stern. The threat seems to have been put in process of execution. The affidavits show that the complainants’ business was greatly injured by the opening up of the competitive business of the defendants. An injury is irreparable when it cannot be adequately compensated in damages or when there exists no certain pecuniary standard for the measurement of the damage. Inadequacy of damages as a compensation may be due to the nature of the injury itself or the nature of the right or property injured. Acts destroying a complainant’s business, custom and profits do] an irreparable injury and authorize the issue of a preliminary injunction. That, according to the present showing, is this ease.

The order under review will be affirmed, with costs.

For affirmance — The Chiee-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Katzenbach, White,, Heppeni-ieimer, Williams, Gardner, Ackerson, Van Buskirk — 13.

For reversal — Black—1.


author: Parker, J.

text:
    James R. Nugent, respondent, v. Hippolyte A. DeRaismes, appellant.
    [Submitted March 27th, 1022.
    Decided June 19th, 1922.]
    When a purchaser at a sale under the “Martin act” fails to serve the required notice on all of the representatives of outstanding interests, but 'by mutual arrangement releases his rights as purchaser to interested parties not served with notice to redeem who thereafter hold their interest free from any claim by virtue of the tax sale, such parties have no standing to redeem the property generally from the sale.
    On appeal from a decree advised by Vice-Chancellor Foster.

      Mr. Gyrus II. Vail, for the appellant.
    Mr. James B. Nugent, pro se, for the respondent.
   The opinion of the court was delivered by

Parker, J.

The appeal is from a decree awarding partition of lands bought in by the city of Newark at a tax sale under the “Martin act,” SO' called (Comp. Stat. p. 5205 et seq.), the certificate of which sale was assigned' to one Rivers, under whom complainant claims. There were two equal outstanding interests in existence at the time of the sale, which may be called the Cooper interest and the Meyer interest. As to the former, the usual proceedings were taken by service of notices, &c., and a comptroller’s deed purporting to convey the full title was made to Rivers. Nothing seems to have been done toward foreclosing the Meyer interest, but the Meyers, apparently, learned of the tax sale and freed their interest therefrom by paying to Rivers one-half of tire sale price with interest' and costs, receiving a deed from Rivers, and thereafter being treated by him and complainant, who was his attorney and succeeded to his rights, as full-owners of an undivided Half interest in the propert]7, paying their share of the taxes each year. Later, after negotiations between tire Meyers and complainant for the sale of their interest failed, complainant brought this suit against them, and filed a notice of lis pendens. More than a month thereafter defendant, DeRaismes, acquired the Meyer interest and undertook to “redeem” the property from the tax sale by tendering at the comptroller’s office, and later in court, the amount required by law in case of a redemption, evidently on the theory that the title of Rivers as to the Cooper interest remained subject to redemption until he had served notice on all the interested parties, including the Meyers, and until the time allowed thereafter for redemption had expired. DeRaismes defended against a partition on the ground that complainant by reason of such tender had no interest which would support the bill, especially as against DeRaismes himself, who claimed to have taken title from the Meyers without notice of equities as between them and Rivers or complainant.

As DeRaismes acquired his interest with full constructive if not actual knowledge of all the claims of the bill, we fail to see that he has an)7) meritorious standing as a Iona- fide purchaser. With respect to the attack on the validity of complainant’s title under the sale and notice to the Cooper interests^ as affected by the attempted “redemption” by ’ DeRaismes, we do not find it necessary to decide whether a purchaser by notice to part but not all of the persons interested, and the delivery of a comptroller’s deed upon the. expiration of the statutory period after such notice; is immune from a subsequent redemption by interested parties not served with, notice, or their assigns, who have remained quiescent in the interim. Assuming, for present purposes, that the Meyers, not having been served with notice, could at any time after the deed was delivered have gone to the comptroller’s office and redeemed the property generally, they did not pursue this course. What they did was to arrange with Rivers, not to redeem the property, but to save their own interests alone, and by paying half the sale price obtain therefor a quitclaim of his rights under the sale as against them, including the right to serve notice on them and perhaps foreclose their interests in that way. The result of this was to change their status from that of interested parties sold out at tax sale and subject to proceedings thereunder to owners of an undivided interest free and clear of the tax' sale; so that their liability under the tax sale being gone, they having no interest that could be foreclosed away from them, their right to redeem ceased with the reason for it.

The learned vice-chancellor, therefore, ruled correctly in refusing to recognize any right of redemption in DeRaismes, and in consequence the only attach on the complainant’s right to a partition failed, and the decree for partition was proper and will be affirmed.

For affirmance' — The Chibe-Justice, Swahze, Tkenchard,, Parker, Bergen, Minturn, Black, Katzenbaoh, White, Heppeni-ieimer, Williams, Gardner, Ackerson, Yan Bus-kirk — 14.

For reversal — None.


author: Minturn, J.

text:
    William F. Gillies et al., complainants-respondents, v. Frederick Monroe Dyer et al., defendants-appellants.
    [Argued March term, 1922.
    Decided June term, 1922.]
    1. Where a mortgage provided that on payment of not less than a stated amount the land should be released pro rata, and, after maturity, on the owners paying more than the stated amount, the mortgage was extended, nothing being mentioned in, the extension agreement concerning any release, the owner of the land was not entitled to a pro rata release.
    2. The maxim that one seeking equity ’must do equity applies where a mortgagor’s successor paid part of the debt after maturity, and claimed a partial redemption under a pro rata release provision of the moi'tgage, and his attitude in seeking to lessen the value of the security indicated that he did not intend to pay the residue.
    On appeal from a decree of the court of chancery advised by Yiee-Chancellor Griffin and reported- in 98 N. J. Eq. 8J/8.

      Mr. Edwin T. Murdock, for the complainants-respondents.

      Mr. Andreiu Foulds, Jr., for the defendants-appellants.
   The opinion of the court was delivered by

Minturn, J.

The mortgage under foreclosure contained this provision:

“It is expressly agreed by and between the parties hereto that on the payment of not less than ten thousand dollars of the principal sum secured by this mortgage, there will be released from the lien of this mortgage such an amount of land as shall bear a pro rata to the value of the whole tract covered by this mortgage.”

The clause in the bond reads:

“And it is hereby expressly agreed that the said Ernest R. Hunter shall have the privilege of paying the principal sum secured by this bond at any time after two years from the date hereof. This clause shall not effect the release clause in the mortgage which accompanies this bond.”

The mortgage was in the usual form containing, inter alia, the usual interest and tax clauses. It was executed by- one Ernest R. Hunter on October '31st, 1911, then owner of the premises which subsequently became the property of the defendant. About a month after its maturity and on November 22cl, 1916, the defendant paid on account of the- principal the sum of $14,800. This payment left $20,200 due of the principal sum. An extension agreement was thereupon executed .between the- parties, reciting the partial payment and the extension of time for payment, and it' then proceeded:

“Provided the party of the second part meanwhile pays interest on said bond as reduced to twenty thousand two hundred dollars, at and after the rate of five per cent, per annum, from November 9th, 1916, and semi-annually thereafter on the sixth day of March and September in each year, and also complies with the other terms of said bond and mortgage; and the said party of the second part, in consideration of the above extension and of one dollar paid by said parties of the first part, the receipt whereof is hereby acknowledged, does hereby covenant and agree to pay said principal sum and interest as above set forth, and comply with the other terms of said bond and. mortgage.”

Nothing, it will be observed, is contained in this instrument which refers in any manner to a release of the lands, or any part thereof in consideration of the part payment of principal. The extension manifestly contains the sole conditions upon which it was executed. If the right to release these lands, or any part thereof, was in the minds of the parties at the time of the execution of this extension, it seems to have been entirely ignored in treating of a basis for the new relationship between them. During the life of the mortgage the covenant for a release possessed vitality, but when the mortgage debt became due the reason for the existence of the covenant was at an end, and the status of the parties assumed a new form, due to the changed contractual situation.

The mortgage being due, the complainant under the newly-created situation had a legal right to then and there foreclose, but instead of insisting upon that right, he entered into a written concession for the payment of the balance due,, which concession contained, within itself the sole conditions upon which the parties on the one side extended, and on the other side accepted, the concession which created a new modus operandi.

IJpon a bill filed for the foreclosure of the mortgage under this new status for non-payment of the interest due, the defendant attempts to set up the claim that he is entitled to a release pro tanto of the mortgaged premises covering an area in value equal to the $14,800 paid at the time of the execution of the concession, under the changed conditions. It should suffice to say, that if such a right existed at the time the concession was executed, it should have been incorporated with the other conditions in that instrument, as an existing right within the contemplation of the parties which was not to be considered as waived by the substituted |modus vivendH. The fact that it was not incorporated in the concession affords strong evidence, from which it might be deduced that the defendant did not claim this privilege as his right, and therefore waived it as quid pro quo for the concession. When the mortgage fell due, and the defendant could not meet it as an entirety, the right of the complainant to foreclose was complete, and the only privilege the defendant then possessed was that of a right of redemption by payment of the entire indebtedness of .the bond. Avon-by-the-Sea, &c., v. Finn, 56 N. J. Eq. 805.

The status of the defendant, therefore, in legal effect is that of a mortgagor filing a bill to redeem, and in such a situation the rule is invariable, that a decree of redemption, and, a fortiori, a decree of partial redemption, which lessens the mortgagee’s security pro tanto1, can be obtained only upon payment of the mortgage debt. 19 R. C. L. 506 and cases; Street v. Beal, 16 Ia. 68; Wood v. Goodwin, 49 Me. 260.

This obligation the defendant has not tendered himself as ready to perform; nor does' his attitude in the case indicate that he has in view any other purpose thanj to ignore the plain effect of the concession, and by obtaining a release of a portion of the mortgaged property which was pledged as an entity for the payment of the entire indebtedness, thus lessen the security of the remainder of tlie pledge, as a basis for the payment of the admitted mortgage debt.

In such a situation the maxim that “He who seeks equity must do equity” has its application as we have applied it in a case where the existing equity was equally cogent because the mortgage admittedly covered more property than it was intended to cover as a security for the debt. New Jersey Franklinite Co. v. Ames, 12 N. J. Eq. 66.

The decree appealed from will be affirmed.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Black, Katzenbach, White, Heppeni-ieimer, Williams, Gardner, Ackerson, Van Bus-kirk — 14.

For reversal — None.


text:
    Mary E. McVoy v. Karl Baumann et al.
    [Argued March term, 1922.
    Decided June term, 1922.]
    1. A contract for the sale and prarchase of land, duly recorded in thé register’s office, operates as constructive notice to all subsequent purchasers of the rights of the respective parties under the contract.
    2. Where, on motion to dismiss for want of jurisdiction, the vice-chancellor refused to dismiss, but ordered the defendants to file their answers on the merits, subject to the condition that if on final hearing the motion 'to dismiss was! denied, the answer should stand as a general appearance, and the answers were filed and the defendants actively participated in the trial, the special appearance became a general appearance, and the defendants cannot challenge the jurisdiction of the tribunal whose portals they thus voluntarily entered.

      3. A suit for specific performance of a contract to convey land situated within the jurisdiction of the court, the decree in which suit operates to convey the premises regardless of the action of 'the parties in complying with the decree, is a proceeding in rent within the rule that such proceeding may be maintained as to property within the jurisdiction of the court, though the defendants cannot be personally served within the jurisdiction.
    4. In such a suit, the burden is upon the defendant claiming as purchaser from the vendor to prove that she was a purchaser without notice of the complainant’s rights under the contract, and it is only where the claim of bona fide purchase has been sustained by proof that the burden is shifted to the complainant to establish the contrary status.
    5. Where a contract for sale of lands required the vendor to convey the lands to the purchaser, his heirs and assigns, the contract can be specifically enforced at 'the suit of the assignee.
    6. When specific performance would 'be decreed between the original parties to a contract, it will be decreed between all claiming under them if there are no other intervening equities otherwise controlling the case.
    7. An action at law 'to recover damages for a breach of a contract to convey land is not regarded as an adequate remedy justifying refusal of specific performance of the contract under the equitable conception that the purchaser desired the particular land covered by the contract which may have a peculiar and special value for him.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Buchanan, ivhose opinion is reported in 92 N. J-. Eg. 860.

      Mr. Aiu/uslus G. Nash, for the complainant.

      Mr. Earle A. Merrill, for the defendants.
   The opinion of the court was delivered b3r

Minturn, J.

A valid contract, in writing, was entered into by the defendant on July 19th, 1920, with Herbert C. MeVoy, the husband of the complainant, to convey to him certain lands in Westfield, the deed to be delivered on October 1st, 1920. Prior to the latter date MeV>3r, with the consent of Baumann, assigned the contract to the complainant. The original contract of purchase was duly recorded in the register’s office of Union county, on October 4th, 1920, and thereby operated as constructive notice to all subsequent purchasers of the legal and equitable status of the parties to the contract, and their respective rights under it, as trustees and cestuis que irustent. Hoagland v. Latourette, 2 N. J. Eq. 254.

Upon the day fixed for the passing of title, Baumann was present with a deed duty executed to the complainant, in conformity with the terms of the contract; but an arrangement was then entered into between him and the complainant by which the delivery of the deed was postponed until the next day. Uj)on that dajr the complainant attended, ready to complete the purchase, but Baumann failed to appear. The complainant, on October 3d, called upon him and tendered the balance of the purchase-money, according to the contract. Baumann promised to deliver the deed within a few days, but failed so to' do. Instead of complying with his contract, he, on October 26th, conveyed the premises to his wife, and on the 9th of November, 1920, his wife conveyed the same to the defendant Cooley. The complainant now seeks by this bill for specific performance to compel Baumann, his wife and Cooley, to convey the premises to her, in accordance with the terms of the original contract. No defence upon the merits was interposed, but the case went to trial upon proof of these facts, and' the learned vice-chancellor advised a decree adjudging-, inter alia, that Cooley specifically perform the contract, by executing a conveyance of the premises to the complainant. The main contention upon which the defence is constructed is that the action is one in personam, and that since the defendants are non-residents, and were only constructively served with process under our statute regarding publication against absent defendants, the court of chancery was without jurisdiction. When this contention was urged below, the learned vice-chancellor refused to dismiss the bill, but ordered that the defendants might file answers, upon the merits “subject to the condition that if on final hearing the motion to dismiss for want of jurisdiction is denied, their answer shall stand as a. general appearance.” Answers being filed, the case was tried upon the merits, counsel for the defendants actively participated in the trial, and renewed his motion to dismiss at the close of the ease.

We deem it manifest, in this situation, that the special appearance of the defendants was tantamount to a general appearance; and that they cannot now after the doors of equity have been thrown open to them, for the express purpose of enabling them to exploit the merits of the controversy, challenge the jurisdiction of'the tribunal whose portals they thus voluntarily entered. Bank of Jasper v. First National Bank (April 1st, 1922), 10 U. S. Sup. Ct. Ad. Op. 254. But aside from that factual consideration, the cause is manifestly not one in personam, but is entirely in rem. The question thus presented is not res nova in this jurisdiction, nor has it been such in the federal courts since the definitive adjudication in Pennoyer v. Neff, 95 U. S. 714, wherein it was declared: “In a strict sense a proceeding in rem is one taken directly against property, and has for its object the disposition of the propeity without reference to the titles of individual claimants; but in a larger and more general sense the terms are applied to actions between parties where the direct object is to reach and dispose of property owned by them or of some interest therein. Such are cases commenced by attachment against the property of debtors, or instituted to partition real estate, foreclose mortgages or enforce a lien. As far as they affect property in the state, they are substantially proceedings in rem in the broader sense which we have mentioned.”

The rule thus laid down has not been since questioned or qualified in the Hnitcd States supreme court, but has been followed and elucidated in numerous cases in the state and federal jurisdictions. Exeniplary of these in this state are Amparo Mining Co. v. Fidelity Trust Co., 74 N. J. Eq. 198, and Lister v. Lister, 86 N. J. Eq. 30; Avhile in other jurisdictions the cases to the same effect are collected and discussed in 20 R. C. L. 203. Manifestly, the purpose and rationale underlying the distinctions thus enunciated, result from the federal constitutional provisions, which are designed to ensure compliance with the constitutional mandate requiring “due process of law,” as necessary modus operandi to the deprivation of an existing legal right. But when, as in this instance, a hearing has been accorded, and the parties have availed themselves of every recognized avenue of procedure incident to a trial upon the merits, the reason for the invocation of these constitutional differentiations in procedure, ex necessitate disappears. Western Life Ind. Co. v. Rupp, 235 U. S. 261; 6 R. C. L. 447, and cases cited; 12 C. J. 1193, and cases cited.

It may also be observed that the resulting decree'in a cause of .this nature, under our legislation; operates, ipso facto, to convey the locus in quo, regardless of the situs of the parties, and their failure to comply with the mandate of the final decree. 1 Comp. Stat. lit. “Chancery” § 45; Weehawken Ferry Co. v. Sisson 17 N. J. Eq. 476.

The remaining objections to this decree are based upon the theory that both Mrs. Baumann and Cooley are innocent purchasers for value of the premises; and are therefore not bound by the covenant of Ba.umann in his written contract. Under our statute the filing of the contract operated as constructive notice to every one dealing with the property of the existing rights of the parties thereto. From the filing of the contract each constructively held his portion of the subject-matter of the contract as trustee for the other. Mrs. Baumann was a parly to the deed to the complainant under that contract, and she was .therefore charged with actual knowledge, regardless of the constructive notice imparted to her by the filing of the contract. If she were actually innocent as a purchaser, for value, the burden was upon her to establish that fact, and not remain mute when she was afforded the opportunity to speak. The same argument becomes dispositive of the claim of Cooley. In the absence of proof by either of these parties, indicating a bona fide purchase for value, the counter-burden of negation was not cast upon the complainant. It is only where the defendant has sustained by proof his claim as a bona fide purchaser for value that the burden is shifted to the complainant to establish the contrary status. Such: was the effect of our determination in Commonwealth Co. v. Schmit, decided at the recent November term.

Nor is there any force in the contention that the contract lacks mutuality as between the parties to the suit. The answer to this contention is furnished by the contract itself, which provides that the vendor would convey the locus in quo to the vendee, "his heirs and assigns.” The assignment of the contract to the complainant, therefore, in nowise destroyed the existing status of the vendor and his assignee, as constructive trustee of the res, for the purpose of legally effectuating compliance with his covenant. Saldutti v. Flynn, 72 N. J. Eq. 157.

And so it is the acknowledged rule that when specific performance would be decreed between the original parties to a contract, it will be decreed between all claiming under them, if there are no intervening equities otherwise controlling the case. Hays v. Hall, 4 Port. 374; Willard Eq. Jur. 269.

Mrs. Baumann is not directly affected by this decree, since its provisions are directed entirely against Cooley, her vendee. It is finally urged that the bill will not lie, because' the remedy at law is complete. The doctrine of specific performance is based upon the equitable conception that the vendee desires the land in specie as sine qua non of Ms contract. The contention of the defendants is based upon the fallacy involved in the argument that the suit is in personam, and not in rem, and that therefore plaintiff’s redress must be at law for damages. But since we have determined the character of the action to be in rem, the rationale undertying the rule of equity applies that “the jurisdiction to enforce performance is universal, not because of the real nature of the land, but because damages a,t law, which must be calculated upon the general money value of land, may not be a complete remedy to a purchaser, to whom the land may have a peculiar and special value.” Willard Eq. Jur. 279; Madd. Ch. Pr. 288; 25 R. C. L. 202, and cases.

The decree will be affirmed.

For affirmance — The Chief-Justice, Swayze, Trenci-iard, Parker, Bergen, Minturn, Black, Katizenbach, White, Heppenheimer, Williams, Gardner, Ackerson, Yan Bus-kirk — 14.

For reversal — None.


author: Black, J.

text:
    George Schweitzer et al., complainants-appellants, v. National House and Farms Association, Inc., defendant-respondent.
    [Submitted March term, 1922.
    Decided June 19th, 1922.]
    1. The bill of complaint filed in this case was founded upon a contract to sell a plot of land and build a bungalow thereon. The prayer of the bill was — first, specific performance; second, rescission of the contract; third, reformation of the contract; fourth, return of the money paid under the contract in installments. The bill was stricken out and dismissed, on notice. — Held, not error.
    2. For a breach of contract and nothing more, the law courts have exclusive jurisdiction.
    On appeal from a decree of the court of chancery.

      Messrs. Trectcy & Milton, for the appellants.

      Mr. John E. Toolm, for the respondent.
   The opinion of the court was delivered by

Black, J.

In this case an amended bill.of complaint was struck out and dismissed, on notice, by an order advised by Vice-Chancellor Griffin. We think the order of the court of chancery should be affirmed. The bill of complaint is founded upon a contract for the sale of a lot or plot of land, known as No. 34 on a “Map of Model Farm Colony.” The land is located in the township of Piscataway, in the county of Middlesex, New Jersey. The plot of land is seventy-five feet front and four hundred and five feet in depth. The contract is dated November 28th, 1919. In addition to providing for the sale, it also' provides, for the completion of a bungalow then being erected similar to the one next door, which the purchaser lias inspected. The payments to be made by installments. The bill of complaint charges fraud in making of the contract; fraud in failing to build a bungalow of the proper material in a workmanlike manner. The bill alleges the complainants were defrauded by the defendant When they were induced to sign the contract without the complainants having the benefit of independent advice. But they are willing that the contract should be rescinded and the moneys paid on account be returned. The prayer of the bill of complaint is, first, the defendant specifically perform its contract; second, the contract be rescinded; third, the contract be reformed; fourth, the true value of the lot and bungalow be ascertained, a sum of money representing the difference between the real value thus ascertained and the contract price be refunded to the complainants. The contract, as stated, was dated on November 28th, 1919. The complainants allege in the bill-they took possession of the premises some time in March, 1920. They made several payments of the installments. Such payments, however, ceased after November, 1920. The bill of complaint was filed October 10th, 1921, while the complainants were still in possession, of the premises.

From the allegations in the bill, the various prayers for relief, which are somewhat inconsistent, and the argument in the appellants’ brief, it is not quite clear to us what form of relief the complainants really want. We think they are not entitled to have any of them. The bill does not state a case for specific performance; the complainants cannot rescind, because they did not act promptly after discovering the alleged fraud and mistake and offer to turn back the property. The facts set forth in the bill of complaint are not sufficient for a reformation of the contract. It would not be equitable to compel the defendant to return the money received and take the property, after an occupancy of the premises by the complainants for nearly a jea,x, without any payments under the terms of the contract. A general charge of fraud is not sufficient, but the facts constituting the fraud must be set forth. Woglom v. Kant, 69 N. J. Eq. 495. The order of the court of chancery was not error. It should be affirmed. The purchasers, as stated, took posses sion. The bungalow was built, although, they allege not according to -the contract. The complainants stopped paying and did nothing except occupy the premises for nearly a year. They cannot delay that long and allow the defendant to go on with the building of the bungalow, then say they are dissatisfied with it. If they have paid money on the contract, it is too late for the complainants to withdraw. The facts set forth in the bill of complaint allege a breach of contract. The appellants had perhaps a remedy by a suit at law, for the breach of a contract, in which damages could be assessed if proved. But for a breach of contract and- nothing more, the law courts have exclusive jurisdiction. Sternberg v. O’Brien, 48 N. J. Eq. 374.

The decree of the court of chancery is affirmed.

For affirmmice — The Chiee-Justioe, Swayze, Trenohard, Parker, Bergen, Minturn, Black, Katzenbach, White, Heppeni-ieimer, Williams, Gardner, Ackerson, Yan Bus-kirk — 14.

For reversal — None.