author: Leaming, V. C.

text:
    Israel Stein v. Henry B. Francis and Mary E. Francis, his wife.
    [Submitted December 10th, 1919.
    Determined December 18th, 1919.]
    1. The general rule is, that where specific performance of a contract to convey lands is sought where the wife of the vendee has not signed the contract of sale and refuses to sign the deed, neither abatement of the purchase price nor indemnity against the inchoate dower of the wife will be decreed unless the wife’s refusal to release has been induced by the husband.
    2. But where the wife was present at the time the contract was signed and acquiesced therein, and gave encouragement to the transaction, and where irreparable injury will result to the vendee if the contract for sale is not specifically performed, this general rule does not apply, and a decree for specific performance will be made, with order for a bond of indemnity against the wife’s inchoate dower,-if she still refuses to execute the deed, or if that is not given, an abatement of price of the value of the dower as if consummate.
    3. A bill for specific performance of a contract for sale of lands may be maintained if filed before the date named therein for performance when the contract has been repudiated, and performance refused.
    On final hearing on bill for specific performance.

      Mr. Harry C. Kramer (with whom was associated Mr. Louis B. LeDuc), for the complainant.

      Mr. William T. Boyle, for the defendants.
   Leaming, V. C.

In this suit complainant, as vendee in a written contract 'of sale of real estate, seeks to enforce specific performance of the contract by his vendor. The wife of vendor has not signed the contract; complainant, accordingly, seeks no decree against her, bnt seeks a decree compelling the husband to convey the fee subject to his wife’s inchoate right of dower with either an abatement of the purchase price or indemnity against the future assertion of a claim of dower bjr the wife.

The contract is clear in its terms, is apparently fair and reasonable in its provisions and was agreed upon intelligently and deliberately and after fair and open negotiation by the respective parties to it. All considerations of justice and fair dealing appear to demand its enforcement.

The suit is defended upon two' grounds — f\rst, it is urged that a decree of specific performance of a contract of this nature will not be made against a husband with either abatement of the purchase price for the value of the dower right of the wife or with indemnity against the claim of dower unless the refusal of the wife to join in the conveyance is brought about by the husband;' second, it is urged that the suit has been prematurely brought.

1. There is no doubt of the general power of this court to enforce specific performance of contracts to convey land and to decree that the purchase-money be applied to pay outstanding liens which are by the contract to be satisfied to clear tire title, or, if necessary, require compensation to be made for any part of the land to which the vendor may be unable to make title, or to require indemnity from the vendor against outstanding liens or rights which cannot be satisfied.

But where the outstanding right or claim has been the inchoate right of dower of the wife of the vendor who refuses to join vendor in the conveyance, the view has been frequently expressed in this state that neither abatement of the purchase price nor indemnity against the dower right should be decreed unless it should be shown that the vendor husband has induced his wife to refuse to release. See cases collected in Bateman v. Riley, 72 N. J. Eq. 316 (at p. 318). The possibility that a decree against the husband for abatement or indemnity might occasion such a coercive influence on the wife as to induce her to release against her will has been thought a sufficient reason for denying relief of that nature, unless her refusal to release has been tire result of her husband’s procurement. In Borden v. Curtis, 48 N. J. Eq. 120 (at p. 129), it is pointed out that the rule above stated in denying a decree for indemnity or for an' abatement of the purchase price is not recognized in some states and its reasonableness under modem conditions is there doubted. The view suggested in Borden v. Curtis, supra, is also that expressed by Professor Pomeroy in his work on Specific Performance (at §§ 1/.60, J¡.6%). In the present case, it does not ajopear that any refusal of the wife to release has been brought about by her husband.

But another important circumstance exists in this case which is absent in nearly all of the reported cases in this state. The evidence disclosed that at the time the contract, was executed the wife of the vendor was present and fully understood the contract which was being executed by her husband and complainant, and that she not only made no protest but in fact gave encouragement to the transaction. Her conduct was more than silent acquiescence. She has testified that she did not want her husband to sell, but refrained from saying so because of her husband’s ill-health; but her conduct on that occasion clearly indicated a wholly different frame of mind. At the time the contract was signed she not only arranged with complainant for him to send his son to her that she could instruct him in the heating arrangements of the house, but her husband testified, apparently somewhat unwittingly, that complainant’s offer of a price less than that asked was accepted because of Ms wife’s wish for Mm to do so. Indeed, the evidence impels the conclusion that at the time the contract of sale was made, it was wholly satisfactory to the wife and in accord with her wishes, and that complainant was fully justified from her words and acts in so understanding. Another importánt circumstance in this case is the fact that by the terms of the contract of sale the conveyance was not to be made and the property was not to be delivered to complainant until a 3rear from its date, and, in reliance upon the contract, complainant thereafter contracted to'sell a nearby property in which he conducted his business, and in that contract arranged for delivery to the purchaser shortly after the date he was to receive possession of defendants’ property, to the end that his business could.be moved to the property here in question without its interruption. Defendants’ failure to perform will, accordingly, leave complainant without a house or business. In all this complainant was necessarily influenced by the attitude of vendor’s wife, which clearly indicated her sanction of the contract made by her husband.

But vendor’s wife has now changed her mind. She has now determined not to release her dower right. Her reason for mental change is too- obvious to be easily mistaken. The recent advance in real estate values is the reason, and only reason, in my judgment. Accordingly, the- question now presented is whether a just decree-,for performance by the husband with abatement or indemnity must be refused complainant by reason of the danger that a decree of that nature may be operative to coerce the wife to change her mind again and cause her to do that which she originally intended to- do- and induced complainant to believe she would do.

There appears to be but two- adjudicated cases in this state in which the element of the wife’s acquiescence in the execution of the contract by her husband has been present — Young v. Paul and Reilly v. Smith.

In Young v. Paul, 10 N. J. Eq. 401, the wife- assented to the sale, but her refusal to release her dower was found to be due to the procurement of her husband. Chancellor Williamson decreed specific performance with indemnity because of the husband’s procurement of his wife’s refusal. In the court of errors and appeals Mr. Justice Potts, in his opinion of affirmance, said: “There is no doubt Ms wife assented to- the sale in the first instance. It was not until some' time afterwards- that she changed her mind and determined not to execute the deed; whether this was of her own volition, or brought about by the influence of her husband, makes no- difference. The decree in no way impairs or affects her rights.” In the concurring opinion of Mr. Justice Ryerson no suggestion is made by him toucMng what his views would have been had the wife changed hex mind without having been influenced to do so by her husband.

In Reilly v. Smith, 25 N. J. Eq. 158, the sale was at auction and the wife of the owner was present and appears to have expressed her willingness that the property be sold. She, subsequently, refused to join in a conveyance, without any fraud on the part of her husband. Chancellor Runyon denied the purchaser indemnity against the wife’s inchoate dower. No specific consideration is given in the reported opinion touching any possible effect of the wife’s acquiescence in the sale.

The other reported cases collected in Bateman v. Riley, supra, deal with situations in which a wife’s refusal to join in a conveyance has or has not been brought about by the husband’s influence, and cannot properly be deemed authorities to the effect that circumstances may not exist in which abatement or indemnity may be properly ordered in the absence of fraud on the part of the husband.

In Cooke v. Watson, 30 N. J. Eq. 345, Chancellor Runyon decreed a conveyance by a husband with indemnity against his wife’s dower, although there was neither consent of the wife to the contract of sale nor connivance by the husband to prevent her joining in a conveyance. The circumstances of that case appeared to him to justify a decree of that nature.

In Farrell v. Bork, I found as a fact that defendant’s wife’s refusal to join in a conveyance was wholly due to her desire to spite complainant, and, accordingly, advised a decree of specific performance by the husband with indemnity. On appeal, the decree was affirmed. 76 N. J. Eq. 615. The opinion filed by me in that case does not appear to have been reported. Whether sanction of the appellate court 'was given to that specific view cannot be stated with certainty.

Erom the foregoing I think it is apparent that it is not in conflict with the authorities in this state to hold that circumstances may exist other than the husband’s procurement of his wife’s refusal to release her dower which will justify a decree of specific performance by the husband with abatement or indemnity. In my judgment, such circumstances must be said to exist when, as here, the wife was satisfied-with the contract of sale at the time of its execution and was present at that time and acquiesced in its execution, and her conduct at the time induced and appropriately induced the vendee to believe and rely upon tire fact that she approved the execution of the contract and proposed to aid its consummation, and the vendee thereafter in reliance upon the contract placed himself in a position from which he cannot extricate himself without irreparable injury. ■ Any possible coercive influence of the decree in such circumstances would do no more than incline the wife to conduct in strict accordance with the accepted rules of equity and good conscience.

It may also be noted that in refusing decrees of the nature here sought the courts have heretofore laid stress upon the care taken bjr our legislature to guard against coercive influence of a husband by reason of our statute touching acknowledgments of a married woman to conveyances made by her. That legislation has since been changed (P. L. 1918 p. 119) and a marked progressive tendency has existed for some- time toward equal lights of spouses,

2. The date for the final payment of the contract price and for delivery of a conveyance and possession of the property has not yet arrived. But, in my judgment, the evidence justifies the conclusion that defendants have repudiated the contract of sale, in that the wife has determined to refuse to join in a conveyance and the husband has determined to neither convey and supply indemnity against his wife’s dower right nor convey and accept less than the full amount of the purchase-money; indeed, I am convinced that the statements and conduct of both defendants have justified complainant in the- belief that they do not intend to attempt to carry out the contract for a conveyance of an unencumbered title. It is true that both the wife and her husband may again change their minds on the day named in the contract for performance; but, in the circumstances referred to, must complainant defer filing his bill for relief until that day and thereby suffer the destruction of his business by reason of the delay which will necessarily ensue before a hearing and decree can be had? Obviously, every consideration looking to the effectiveness of remedial justice favors a negative conclusion to the question here presented.

This precise question does not appear to have heretofore arisen in this state in a suit for specific performance; but in O’Neill v. Supreme Council, 70 N. J. Law 410, it was determined by our supreme court after an exhaustive review of the authorities that such a repudiation of a contract of sale is operative to mature a cause of action for damages. O’Neill v. Supreme Council was approved and followed by the same court in Samel v. Super, 85 N. J. Law 101.

In other states the same question has arisen in suits for specific performance, and the text adopted in 36 Cyc. 771, tit. “Specific Performance,” is as follows:

“An action by the vendor before the time fixed for payment is premature; and where conveyance is not to be made until payment, the vendee usually cannot maintain his bill until payment is made; but where the vendor has repudiated the contract, the purchaser is entitled to sue at once, although the time fixed for complete performance has not yet arrived.”

The authorities cited in support of the text above quoted, and the cases which have since arisen, as found in the supplemental annotations, are the following:

Belanewasky v. Gallagher, 105 N. Y. Supp. 77. In that case a bill filed by a vendee for specific performance averred that the vendor had repudiated his contract. On demurrer it was held that such an averment supported a bill filed before the date for performance.

Payne v. Melton, 67 S. C. 233; 45 S. E. Rep. 154. There a bill filed by a vendee for specific performance-before the time for performance alleged repudiation of the contract by the vendor and also that vendor had, by a fraudulent conve3rance to another, rendered his performance impossible until the fraudulent conveyance should be set aside. On demurrer alleging the suit prematurely brought it was held, in analogy to the right to sue for damages when repudiation occurred, that the cause of action was matured by the act of repudiation accompanied by the fraudulent transfer which necessitated the court’s intervention.

Miller v. Jones, 68 W. Va. 526. This was a vendee bill filed before the day for performance because of vendor’s repudiation of the contract. It was held that the cause of action was matured in analogy to the decisions of the law courts in actions for damages in like circumstances; the decree directed performance at the future date pursuant to the terms of the contract.

Bear v. Fletcher, 252 Ill. 206. There the vendee before the time of performance clearly disclosed his purpose not to pay. Held, that the suit for specific performance was1 properly brought before the time for performance.

Parks v. Munroe, 99 Kans. 368. The bill in that case was to enforce a contract for exchange.of land, the bill being filed before the time for performance, but alleging defendant’s repudiation of the contract. A demurrer to the bill on the ground that it was prematurely filed was overruled.

In Crosby v. Georgia Realty Co., 138 Ga. 746, the court below had awarded a decree of specific performance against a vendor before the time for performance on tire ground that the vendor had repudiated the contract, the decree directing immediate performance instead of performance at the future day named in the contract. The decree was reversed on review without an opinion being filed.

The view thus appears to have been almost uniformly adopted that when it is clear that a vendor either cannot or will not perform his contract in accordance with its terms, the vendee need not await the stipulated date for performance before filing his bill, but may before that time procure a decree defining the rights and obligations of the parties and directing performance on the future date in the manner found by the court to be proper in the circumstances of the case. That view is not only in harmony with the rule adopted in this state, touching actions for damages in case of repudiation of the contract by one of the parties to it before the day for performance, but is clearly beneficial to both the vendor and vendee, ¡since it is operative to save either from serious losses that may otherwise ensue.

3. I will advise, a decree herein directing the vendor to perform his contract in accordance with its terms upon the date specified therein for that purpose, provided his wife joins in the conveyance, upon the payment by vendee on that date of the balance of the contract price, and further directing a conveyance by vendor to vendee on that date, subject to the inchoate right of dower of his wife, in the event of a refusal of his wife at that time to join in the conveyance, and in the latter event directing the vendor to at that time deliver to vendee a bond of indemnity with security approved by a special master to be named when the decree is signed for an amount to be determined at that time to indemnify vendee against any claim of dower by the vendor’s wife, npon vendee’s paying at that time the balance of the contract price. The decree may further provide that upon failure of the vendor to provide the indemnity the vendee may retain in his hands out of the purchase price the amount of the value of the dower right of the vendor’s wife, that amount to he ascertained at the time the decree is signed in accordance with our mortality tables upon the basis of the right of dower being consummate at that time.


source: Caselaw Access Project

author: Lewis, V. C.

license: Public Domain

text:
    Flora Delling v. John Bill et al.
    [Decided December 10th, 1919.]
    1. Legal title to land affected by a trust is not in abeyance pending the appointment of a new trustee in the place of the original trustee who renounced.
    2. In partition by one claiming title under a ¡sheriff’s deed given pursuant to a judicial sale in a suit at law by the complainant against an administrator own testamento amiexo, the eestuis que trustent and the heir of the decedent on a claim existing against the decedent in his lifetime, the chancellor is bound to accept and give effect to the prior adjudications and proceedings, of the supreme court, ¡and their validity and effect cannot be collaterally impeached in this court in a partition suit.
    3. The rights of a co-tenant are not affected by judgments against the interests of the other tenants in common.
    4. A co-tenant is always subject to partition at the hands of the other tenants in common, and always has the right to enforce partition himself, if he desires to do so.

      On bill for partition.

      Mr. Joseph A. Furrey, for the complainant.

      Mr. William G. IJille, for the defendants.
   Lewis, V. C.

On the facts as1 submitted it is contended by defendants that the legal title is not so clearly established in complainant as to permit her to maintain partition. Indeed, this issue is specifically raised by an appropriate pleading which denies complainant’s legal title. Complainant claims title by virtue of a sheriff’s deed given pursuant to a judgment, levy and sale in a suit at law brought by complainant against the administrator cum testamento annexo, the cestuis que trustent, and the heir on a claim existing against the decedent in his lifetime.

The additional brief of complainant sets forth a' number -of facts and proceedings with regard to the recovery of the judgment at law, and it appears from it that the issues were raised by appropriate answer in behalf of an infant defendant, and that Mr. Clifford L. Newman, supreme court commissioner, to whom the matter was referred by Mr. Justice Mintum, made a report with respect to the situation upon which the judgment was entered.

The matters set forth in this brief appear in the pleadings, in the present case, upon which the issues involved were submitted for determination. No proofs were taken.

The contention of complainant’s- counsel is, that title is complete in complainant through the sheriff’s deeds, and that the title is unassailable collaterally in this court in the present proceeding.

On the other hand, counsel for the defendants contends that the judgment obtained by the present complainant against the parties in both of her suits at law, did not become liens against the premises- described in the bill of complaint. Consequently, when executions were issued on those judgments, and a sale of the premises was effected thereunder, no legal title passed by virtue of the deeds given by the sheriff. His contention is based upon the theory that legal title vested in the trustee by the terms of the testator’s will; and that when the trustee therein named renounced, the legal title was in abeyance until a new trustee should be appointed; and that, therefore, the judgments recovered against the other parties named in nowise affected the legal title, and hence, complainant acquired no legal title to the premises in question under the sheriff’s deeds referred to; which purported to convey only the right, title and interest, legal and equitable, of tire parties involved, in the premises in question. He, therefore, denies the1 complainant’s right to partition.

But, whatever doubt there may be regarding the legal title resolves itself into what seem® clearly to be a question of law, rather than of facts, to be disposed of, not by a jury at law, but by this court, in giving effect to the judgments of the supreme court so long as they remain unchallenged in the court where rendered and the sheriff’s deeds, which are the complainant’s muniments of title. Walton v. American Baptist Publishing Society, 78 N. J. Eq. 263.

In my opinion, the legal title waisi not in abeyance pending the appointment of a new trustee in the place of Mr. Hermans, who renounced; and, without entering into a discussion of the technical niceties of the situation in an effort to determine just where legal, title reposed, it is sufficient for our purposes to hold that the judgments recovered against the various parties in the supreme court, and the successive steps taken thereunder, were effective in seizing and conveying that legal title. I feel that I am bound to thus accept and give effect to the adjudications and proceedings of the supreme court; and that their validity and effect cannot be collaterally impeached in this court in this proceeding. Walton v. American Baptist Publishing Society, supra.

It follows* therefore, that complainant is entitled to maintain her present bill for partition.

It may not be inappropriate to say that the co-tenant’s rights are not affected by the judgments against the interests of the other tenants in common. Persons who might have a status to complain if the judgments were irregularly obtained are the beneficiaries under the will of Theodore A. Schneider, the testator, or the new trustee when appointed. The defendant’s co-tenant is always subject to partition at the hands of whoever holds the associate interest; and he always has the right to force partition himself if he so desires.

In the present case, the defendant might well include in his answer a cross-bill himself asking for partition, and name as defendants therein the present complainant and all the other parties in whom the legal title to the undivided interest in the premises in question might have vested pending the appointment and qualifications of a new trustee. He might also petition this court for the appointment of a new trustee in the place of Mr. Hermans, and implead him when so appointed as a party defendant in his cross-bill. As to the issues that thereby might be raised, the coiirt at this time expresses no opinion.

If counsel so desire, I will entertain an application for the appropriate amendment to the pleadings in this respect, following the appointment of the new trustees. Otherwise, I will decree that the partition proceed. ■


author: Backes, V. C.

text:
    McClung Drug Company, a corporation, v. City Realty and Investment Company, a corporation, et al.
    [Submitted October 17th, 1919.
    Decided October 28th, 1919.]
    1. A purchaser of premises in the possession of a lessee, having knowledge of the lease, is chargeable with notice of an option of purchase therein.
    2. An option to buy, in a lease, is unenforceable if the price is not named, and no standard is established by which -the price may be determined with certainty.

      On bill, &c.

      Messrs. Wight, Wight .<& Golenbock (Mr. Merritt Lane of counsel), for the complainant.

      Mr. Thomas Brown and Mr. Leo Goldberger, for the defendants.
   Backes, V. C.

This bill is for the specific performance of an option contained in a lease to purchase land. The struggle for the property is due chiefly to its recent increase in value. The City Realty and Investment Company leased to the McClung Drug Company’s assignor the ground floor of No. 198 Smith street, Perth Amboy, to be occupied as a general drug store, for the term of six years from the 1st day of August, 1915, and stipulated:-

“That should the party of the first part decide to place this property on the market for sale, then the said party of the second -part shall he given thirty (30) days’ notice; in writing, of such intention with -the privilege of purchasing same within said' thirty days.”

The realty company decided to sell, and to that end its board of directors formally resolved “that Jefferson Building be placed on the market' for $32,000.” Thereafter a real estate agent retained by it tried to negotiate a sale with the drug company,'but it was not ready-to buy. The drug company had no knowledge of the resolution.

On May 2d, 1919, the realty company sold the property to the defendants Greenspan and Borak for $34,000, and three days later it sent a letter to the drug company saying: “If you care to buy the Jefferson Building, No. 198 Smith street, kindly advise us at once, as we have an offer.” Within thirty days the drug company verbally notified the realty company that it exercised its option and would give $34,000, which was ignored, and the property was conveyed to Greenspan and Borak. They had knowledge of the lease but not of the option. They are, however, chargeable with notice of all the lease contains; and further, as the drug company was in possession, reasonable inquiry would have brought forth the information. Hoy v. Bramhall, 19 N. J. Eq. 563; Vredenburgh v. Burnet, 31 N. J. Eq. 229.

The question for decision is, Is the option a complete contract and enforceable in view of the statute of frauds? It seems to me the answer must be in tire negative, as there was no price stipulated and no method provided for its ascertainment.

It is familiar law that equity will not specifically enforce a contract for the sale of lands unless it is conclusive and certain as to parties, tire subject-matter, the -price and the terms. Some of the cases in this state are: McKibbin v. Brown, 14 N. J. Eq. 13; Welsh v. Bayaud, 21 N. J. Eq. 186; Domestic Telegraph Co. v. Metropolitan Telephone Co., 39 N. J. Eq. 160; Woodruff v. Woodruff, 44 N. J. Eq. 349; Schenck v. Spring Lake Beach Improvement Co., 47 N. J. Eq. 44. It is not necessary that the price be specified in figures or words at length. It is sufficient if a standard is established by which the price may be determined with certainty; as, for instance, the “fair value” or “market value” (VanDoren v. Robinson, 16 N. J. Eq. 256), or at a price offered by another upon a certain event, and accepted (Race v. Groves, 43 N. J. Eq. 284; Hayes v. O’Brien, 149 Ill. 403), or the appraisal of arbitrators. Woodruff v. Woodruff, supra. Complainant’s counsel rely for authority altogether upon the remark of Vice-Chancellor Bird in Race v. Gh'oves, and the opinion of the supreme court of Illinois in Hayes v. O’Brien. I think the options in those cases are easily distinguishable in principle, in that each of them defined the price to be the amount of a future accepted offer from another. No provision of that kind is contained in tire complainant’s option. All the drag company got by it was the exclusive privilege, for thirty days, of buying if the realty conrpan3r decided to sell. It is not implied that the realty company was to fix a price at which it would sell to the drug company, for it is common practice to put property on the market awaiting proposals. Nor can it be read into the option that upon the realty company’s determination to sell, and a. price being fixed, it was to be unalterable and final; nor that the price was to be the accepted offer of another; nor that it was to be the reasonable value, as the complainant’s counsel contend. Any of these factors of definiteness, properly stipulated upon the contingency of an offer of sale, would have supplied the required certainty, according to the authorities. A simple illustration of the incompleteness of the contract is, that the option would be spent, by the giving of a notice that the property was for sale, without more, and the lapse of thirty days.

It is not the privilege of the court to piece out the option into a complete contract by seizing upon the resolution to sell for $32,000, or the selling price to Greenspan and Borak of $34,000, as the sum for which the realty company were, or ought, to sell to the complainant. That would be a juridical interpolation of an essential of the contract upon which the minds. of the parties had not met, at least not at the .time the option was granted; and it is of that period that it must speak. In Fogg v. Price, 145 Mass. 513, the supreme court of Massachusetts had before it an option substantially like the one in this suit. I. quote at length from the opinion of Judge Holmes for the better expression of my views. He says:

“The covenant is: ‘If the premises are for sale at any time, the lessee shall have the refusal of them.’ This is simply an agreement to give the lessee the first chance to make a contract —an agreement to sell if the parties can agree, but not otherwise. It neither fixes the price nor provides any way in which it can be fixed. Suppose that the premises had been advertised for sale, and that the tenant had brought his bill at once, it is plain that the court could not have named any sum at which the lessor should be compelled to sell. Considered, therefore, in the light of a contract to sell, as it is treated by the bill, it does not satisfy the statute of frauds, and, apart from the statute, it is not such a contract as equity can specifically enforce. Pray v. Clark, 113 Mass. 283; Grace v. Denison, 114 Mass. 16; Gelston v. Sigmund, 27 Md. 334; Abeel v. Radcliff, 13 Johns. 297; Bromley v. Jefferies, 2 Vern. 415.

“It may be that the contract does mean that the lessor will deal with the lessee, on the same terms as with anyone else, or at least will not discriminate against him; that the lessor has now fixed his price by a sale; and that, as the purchaser had notice of the contract, the defendants have removed the difficulties in the way of specific performance by their own conduct. It might be that tire remedy would do substantial justice as against the lessor, but, in order to do it, a term would have to be added which is not in the contract. The contract certainly does not contemplate a sale to somebody else as a mode of ascertaining the price at which the lessor will sell to the lessee. Bromley v. Jefferies, ubi supra. The statute of frauds remains unsatisfied, notwithstanding what has happened. It is not the event but the nature of the contract which is to be considered, and that must be determined by looking at it as it stood at the time it was made. See Stapilton v. Stapilton, 1 Atl. Rep. 12, 10; Walton v. Coulson, 1 McLean 120; Moore v. FitzRandolph, 6 Leigh 175, 186.”

The bill will be dismissed, with costs.


text:
    Blackwood Improvement Company v. Public Service Corporation of New Jersey et al.
    [Submitted October 27th, 1919.
    Decided December 17th, 1919.]
    1. A suit to quiet title is an equitable action of ejectment, and the rights of the parties are to be treated and adjudicated according to the strict rules of common law, one of which .is that conditions working a forfeiture are to be construed strictly.
    2. Where land was conveyed to a proposed railway company with the condition in the deed expressed that the premises shall revert to the grantor if the grantee “for any reason whatever shall permanently cease to operate and maintain its street railway thereon after having commenced the operation thereof,”' such premises do not revert when the railroad was never built or operated over the land described in the bill, though it had been built and operated over other lands described in the same conveyance. The recovery of the unused portion by the complainant can only be predicated upon adverse possession for the statutory period.

      On bill, &e.

      Mr. Bdtoard T. Gurry, for the complainant.

      Mr. Frank Bergen, for the defendants.
   Backes, V. C.

The complainant owns a large tract of land near the village of Blackwood, Gloucester county, which it acquired from the devisee of the late J. Willard Morgan. Morgan had granted, in fee, to- the Camden, Gloucester and Woodbury Railway Company, of which he was promoter and president, a strip across the tract thirty feet wide and of fourteen courses, for the purpose of using the same in the building, construction, operation and maintenance of its railway. The deed, after limiting the use to railway purposes, contains this condition:

“It being clearly understood and agreed, however, that this conveyance is made by the said party of the first part and accepted by the said party of the second part upon the express condition, stipulation and agreement that the same is made in consideration of the said party of the second part building, constructing, operating and maintaining its railway in, upon and along the said premises, and if at any time hereafter the said party of the second part, its successors or assigns, for any reason whatever shall permanently cease to operate and maintain its street railway thereon after having commenced the operation thereof, that then and in such ease this conveyance and the estate hereby granted shall cease and determine, and the said premises shall revert to the said party of the first part and the heirs and assigns of the said party of the first part as though these presents had never been made.”

The railway was duly constructed and has been in operation over eleven of the courses for upwards of ten years. It is, at present, the southerly terminus of the Blackwood extension. Courses 12, 13 and 14, and the further right of way of the company into the village of Blackwood, have not as yet been utilized because it has not been expedient financially. The complainant is about to subdivide its tract into building lots, and the outstanding title in courses 12, 13 and 14 interferes with its plans— that is, the land could be plotted to better advantage if the right of way were out of the way. To rid itself of this obstacle the complainant filed this bill to quiet the title to the entire tract, especially against the outstanding title of the defendants, upon the theory that the condition upon which the strip is held has been breached and that a forfeiture has resulted. The defendants are: Camden, Gloucester and Woodbury Railway Company, the owner of the fee; South Jersey Gas, Electric and Traction Company, the lessee of the road for nine hundred and ninety-nine years; Public Service Corporation of New Jersey, assignee of the lease; and Public Sendee Railway Company, the present holder of the lease by assignment, now operating the line as a part of its state-wide system.

Attention is called to the inartificial drafting of the bill. The pleader sets out in detail the complainant’s and defendants’ titles, and the alleged default upon which the reversion is based, instead of contenting himself with the bare statements required by the statute (Comp. Siai. p. 5899) and calling upon the defendants to declare their title. Fittichauer v. Metropolitan Fire Proofing Co., 70 N. J. Eq. 429. Then, in his effort to> include these needless things, he forgot to allege the essential jurisdictional fact of peaceable possession of the complainant. No advantage was taken of the omission, presumably, because, the bill was amendable. It will be considered amended. Complainant’s counsel was not the solicitor who drew the bill.

It is suggested, rather than urged, that the complainant had no standing to file this bill, because he was not in possession. While the legal title is in tire defendant Camden, Gloucester and Woodbury Railway Company, and possession is presumed to follow the title, it appears from the evidence and statements of counsel in open court that, in fact, possession of the tract, including tire locus in quo; has always been in the complainant and his predecessors. Thus, in possession, the complainant cannot test his right at law by ejectment, and may avail himself of the statutory bill to quiet title. Oberon Land Co. v. Dunn, 56 N. J. Eq. 749.

The suit is, in effect, an equitable action of ejectment, based upon an alleged reversion resulting from forfeiture. Although it is fundamental doctrine of the court that equity does not assist in the recovery of a forfeiture, and will leave the complainant to whatever remedy the law courts may afford (Woodruff v. Water Power Co., 10 N. J. Eq. 489), the doctrine is not to be applied in its traditional rigor in case the complainant is without legal remedy, nor where a remedy, essentially legal, is imposed by statute upon equity, as it is by the act to quiet titles. But the privilege thus extended, to sue in equity in such circumstances, is not to be carried beyond the jurisdictional function, and the rights of tire parties are to be treated and adjudicated according to the strict rules of the common law. And, at law, forfeitures of vested estates, by breach of conditions subsequent, are no more favored than in equity. There is, however, a difference in treatment. Equity ordinarily, remains passive. The law indulges, but construes such condition strictly, and does not countenance a recovery unless the breach is clearly and unequivocally established.

“Conditions, when they tend to defeat estates, are stricti juris and to be construed strictly.” 1 Shep. Touch. 133 8. “Conditions subsequent, especially when relied upon to work a forfeiture, must be created by express terms or clear implication, and are construed strictly.” Washb. Real Prop. 447.

With this guidance, little difficulty is experienced in disposing . of the problem submitted. The condition attending the vesting of the fee in the Camden, Gloucester and Woodbury Railway Company, as above quoted, recites the consideration of the conveyance to be the'“building, constructing, operating and maintaining its railway in, upon and along the said premises.” Nullification of the grant is limited to the happening of a single event, viz., if the grantee “shall permanently cease to operate and maintain its street railway thereon after having commenced the operation thereof.” That contingency has not arisen. A failure of the consideration — that is, failure to build the road at all, was not to work a forfeiture, nor was the construction of a part only to result in a reversion of the unused portion of the strip. Abandonment after construction was the conception and is the test of forfeiture. Non-user is not a stipulated breach. The grantee of the strip' has not as yet extended the road over the courses in dispute and over its other rights of way into the village of Blackwood because of unprofitableness. That was its privilege, and refraining did not deprive it of its vested rights, to be enjoyed under more propitious circumstances in the future. Gradual extension is the common experience of railroad development.

A recovery by the complainant of the unused portion of the strip can be predicated only on adverse possession for the statutory period, and that time has not elapsed. If the defendants’ title were less in quality than it is, for instance, a mere easement, a recover}’ for non-user could be had only upon a showing of a continued non-user for the full period of twenty years. Horner v. Stillwell, 35 N. J. Law 307, Shields v. Arndt, 4 N. J. Eq. 234; Raritan Water Power Co. v. Veghte, 21 N. J. Eq. 463; Dill v. Board of Education, 47 N. J. Eq. 421.

Considerable stress is laid by complainant’s counsel upon a letter written in 1914 by the second vice-president of the Public Service Railway Company to one of the complainant’s officials, in which he stated that “the Blackwood line is unprofitable. The traffic does not warrant any further extension of that line. Any changes in the layout of your land that you ■ contemplate may, therefore, be made without regard to us.” It is argued that this communication clearly evinces an abandonment of courses 12, 13 and 14. In dismissing the contention, it is enough to say that the document has not the legal force of a deed or release: that it is not a surrender, nor does it operate as an estoppel against the principal of the writer, in the absence of proof of authority; and further, the fee being in the Camden, Gloucester and. Woodbury Railway Company, its vested rights cannot be surrendered either by this official or by his principal, the Public Service Railway Company, for whom he presumed to act.

The bill will be dismissed, with costs.


text:
    Lehigh Valley Railroad Company v. John E. Andrus.
    [Submitted December 1st, 1919.
    Decided February 1st, 1920.]
    1. The court of chancery may enjoin the prosecution .of a foreign suit, but this power ought to be exercised sparingly, and should not be used unless upon a clear showing that the process is being used in an unconscionable manner, or oppressively.
    2. Where the courts of a sister state have complete jurisdiction over the issues raised before it, and of the parties, though the issues there and those raised before this court áre not identical, and a decree in this suit would settle the rights of the parties conclusively, there is no conceivable legal theory upon which the defendant can be enjoined to forego the determination of his claim in the court of his choice, for the more comprehensive remedy of this court.
    3. The filing of a bill and issuing of process not served in an action in pei'sonam against a non-resident do not commence a suit in equity; service is essential.
    On motion for preliminary injunction and counter motion to set aside process.

      Messrs. Collins & Corbin, for the complainant.

      Mr. Edward O. Stanley, Jr. (Messrs. Pitney, I-Iardin & ' Skinner), for.the defendant.
   Backes, V. C.

The complainant is the tenant of lands on the Vater front at Bayonne, under a lease made June 5th, 1889, for the term of sixty years, at‘a rental of $4,250 per annum for the first twenty years, payable quarter-yearly in advance, and for each ten-year period thereafter at a rental to be fixed by arbitrators, landlord and tenant each to select one, and the arbitrators to select an umpire in case they could not agree, and

“If for any causo a valid award fixing rentals shall not be made and delivered at or within the times above limited, then the landlord may recover by action from time to time at law or in equity a fair quarterly compensation for the use and occupation of the demised premises.”

The complainant and defendant duly appointed arbitrators to appraise tire rental of the ten-year period, beginning June 5th, 1919. The arbitrators were unable to agree upon an award or an umpire, and this without fault on the part of either complainant or defendant. The complainant asks this court to determine tire rental.

On June 6th, 1919, after the bill was filed, the defendant sued the complainant in the supreme court of New York for use and occupation for the first quarter year — June 5th to September 5th, 1919 — laying the damages at $17,067.75.' The case was at issue and on the trial list when the defendant here was ordered to show cause why he should not be restrained from further prosecuting his action. Whether this order should be made absolute or discharged is one of the questions to be decided.

• ■ The bill presents a cause for equitable relief. It is not to be likened unto a bill for specific performance of a contract for the sale of land at a price to be fixed by arbitrators. There the contract is executory. The award is of the essence of the contract, and equity will not appoint arbitrators to complete the contract for the purpose of enforcement. That is well settled. McKibbin v. Brown, 14 N. J. Eq. 13; Woodruff v. Woodruff, 44 N. J. Eq. 349; Davila v. United Fruit Co., 88 N. J. Eq. 602. Here the substance of the contract is the demise and the covenant to pay rent; and the tenant has been in possession. The method set up for ascertaining the rental is subsidiary and incidental, of form and not of substance; and having proved abortive the court will substitute itself for the arbitrators. Dinham v. Bradford (1869), 5 L. R. Ch. App. 519, is an illustration. There “it was agreed that one partner should purchase, at the close of the partnership', the share of the other; at 'a valuation by two persons. Trouble arising between the partners, no arbitrators were appointed and a bill was filed for a valuation. The defendant relied on the doctrine that an agreement for sale, price to be fixed by arbitrators, with nothing more, cannot be carried into effect by the court. Lord Hatherley, L. C., said: ‘This case is not like that of the sale of an estate, the price of which is to be settled by arbitration, but is a case in which the whole scope and object of the deed would be entirely frustrated if the court were to apply the well-known doctrine to the present circumstances. In cases of specific performance the matter is very plain and simple. One person agrees to sell his estate in a given way, and no rights are changed by the • circumstance of that method of selling the estate having failed. The estate remains where it was and the money where it was. But here * * * it is much more- like the case of an estate sold and the timber on a part to be taken at a valuation, the adjusting of matters of that sort forming part of the arrangement but being by no means the substance of the agreement. In such cases the court has found no difficulty. If the valuation cannot, be made modo et forma, the court will substitute itself for the arbitrators. It is not the very essence and substance of the contract, so that no contract can be made out except through the medium of arbitrators. Here the property has been had and enjoyed, and the only question now is, What is right and proper to be done with regard to settling the price ?’ ” Other cases adduced in which, the doctrine was applied, some of which in circumstances are peculiarly like the one under consideration, are Grosvenor v. Flint, 20 R. I. 21; 37 Atl. Rep. 804; Cooke v. Miller, 25 R. I. 92; 54 Atl. Rep. 927; Insurance Company v. Stephens, 214 N. Y. 488; 108 N. E. Rep. 856; Kaufman v. Liggett, 209 Pa. 87; 58 Atl. Rep. 129; Springer v. Borden, 154 Ill. 668; 39 N. E. Rep. 603; affirmed, 210 Ill. 518; 71 N. E. Rep. 34; Lowe v. Browne, 22 Ohio St. 463; Tobey Furniture Co. v. Rowe, 18 Ill. App. 293; Kelso v. Kelly, 1 Daly (N. Y.) 419.

Hor is the above-quoted provision reserving to the landlord the right to sue quarter-yearly for use and occupation, -in default of an award, a thing apart from the main covenant for a rental based upon a ten-year appraisal. It furnishes no distinct and independent cause of action for use and occupation, but simply gives a right of action in a contingency for a “fair quarterly compensation.” In other words, it is onfy a facilityr for an emergency recovery of a fair quarter-yearly installment of a ten-year valuation, pending substituted proceeding in equity. The breaking down of the arbitration scheme in nowise impairs the overriding contract of rental at a ten-year term ratej and a recovery at law, upon a miscarriage of arbitration, would simply be taken into account as a credit, upon the appraisal when made, as it is to be made;, in this suit. That seems to me to be the single function of the provision, and my view is borne out, to some extent, by the practical construction given it by the landlord by his shit to recover for a quarter year’s use and occupation in advance of such use, an impossible thing extrai the contract.

The power of the court to enjoin the prosecution of a foreign suit is unquestionable and conceded. Margarum v. Moon, 63 N. J. Eq. 586. The point elaborately argued in the briefs is whether the case is one in which the power ought to be exercised. The admonition running through the authorities is to exercise it sparingly. Where the court of a sister state has jurisdiction of the subject-matter and the parties, equity will not interfere unless upon a clear showing that the process is being used in an unconscionable manner- — oppressively—as instanced in Standard Roller Bearing Co. v. Crucible Steel Co., 71 N. J. Eq. 61, or, as was there said, “unless the- case involves some equitable element which it cannot apply.” See Shaw v. Frey, 69 N. J. Eq. 321. Chancellor Pitney, in Bigelow v. Old Dominion Copper Mining and Smelting Co., 74 N. J. Eq. 457, said: “On general principles, equity will not interfere with the right of any person to bring an action for the redress of grievances — the right preservative of all rights — except for grave reasons, and on grounds of comity the power of one state to interfere with a litigant who is in due course pursuing his rights- and remedies in the courts of another state ought to be sparingly exercised. The courts of New Jersey ought not to assume, directly or by indirection, any appellate jurisdiction over the courts of Massachusetts, nor proceed in giving judgment here upon the idea that the courts of that commonwealth are in the least degree incompetent or unwilling to do full and complete justice in all eases that are fairly within their jurisdiction.”

I cannot find in the circumstances of the case an}'' equitable ground for enjoining the suit. That 'the supreme court of New York has complete jurisdiction of the issues raised before it, and of the parties, is undeniable. The issues there and those of this bill are not identical. Though the controversies involve the same subject-matter, and a decree in this suit would settle the rights of the parties conclusively, there is no conceivable legal theory upon which the defendant can be enjoined to forego the determination of his claim for a-quarter year’s rent (either as an integral part, or independent, of the ten-year covenant) in the court of hiis choice, for the more comprehensive remedy of his bill. The selection of that forum by the defendant for the decision of the questions there involved was entirely permissible under the terms of the lease, and, although Hie complainant be put to additional trouble and expense in defending that action, and the judgment be res adjudícala, pro farda, on the final hearing of this cause, the difficulty and dilemma afford no reason for intervention. Whether the views of the New York court will accord with those I entertain as to the construction to be given the contract, and whether it will measure the damages accordingly, or regard the suable period as distinct from the ten-year term and determine the value regardless, we are not concerned with on this motion. Federal Trust Co. v. Conklin, 87 N. J. Eq. 185. The complications induced by the suit at law can be adjusted on the final hearing.

Moreover, the defendant’s action was begun first. The bill here was filed before his suit was started, but process was not served, and jurisdiction of the subject-matter and the parties was not acquired until long afterwards — approximately three months. The defendant is a non-resident. The filing of a bill and the issuing of process, not served, in an action in personam against a non-resident, do not commence a suit in equity. Service is essential. Commencement is marked by the issuance of subpoena after bill filed, provided the subpoena is instrumental, directly or indirectly, in bringing the defendant within the jurisdiction of the court. See Crowell v. Botsford, 16 N. J. Eq. 458; Haughwout v. Murphy, 22 N. J. Eq. 531; Hermann v. Mexican Petroleum Corp., 85 N. J. Eq. 367; Haupt Company v. Board of Education of Edgewater, 87 N. J. Eq. 362; Delaware River Q. & C. Co. v. Mercer Freeholders, 88 N. J. Eq. 506. Being prior in point of time the New York suit has preference. This is generally recognized, and the .authorities are numerous. I need only quote from Peck v. Jenness, 7 How. 624: “It is a doctrine of law too long established to require a citation of authorities that where a court has jurisdiction it has a right to decide every question which occurs in the causey and whether its decision be correct or otherwisej its judgment, till reversed, is regarded as binding in every other court; and that where the jurisdiction of a court, and the right of a plaintiff to prosecute his suit in it, have once attached, that right cannot be arrested or taken away by proceedings in another court. These rules have their foundation, not merely in comitjq but in necessity. For, if the one may enjoin, tire other may retort by injunction, and thus the parties be without remedy, being liable for a process for contempt in one if they dare to proceed in the other.” An ad interim injunction will be denied and the restraining order will be dissolved.

The other question is whether this court has acquired jurisdiction over the person of the defendant.

The bill was filed May 31st, 1919, and the subpeena, attested on that day, was returned non est inventus. The defendant being a resident of New York, substituted service was made, returnable August 25th, 1919. On that day the defendant, upon a conditional appearance, obtained a stay of proceedings and an order that the complainant show cause why the order for substituted service should not be vacated. ' In the meanwhile a second subpeena issued and was served personally on the defendant, in this state, oh August 27th, 1919, and motion is made to set aside the writ and service on the ground that a second subpeena cannot go forth without the order of the court.

The order for substituted service was improvidently entered. The suit is in no sense in rem or quasi' in rem. Kempson v. Kempson, 63 N. J. Eq. 783; Andrews v. Quayaquil and Quito Railway Co., 69 N. J. Eq. 211; 71 N. J. Eq. 768; Amparo Mining Co. v. Fidelity Trust Co., 74 N. J. Eq. 197. The leasehold is in this state, but the yield and not the land constitutes the res. The cause of action is transitory — cognizable in any jurisdiction where the defendant may be found. Equity acts in personam and service, other tiran personal, is nugatory. Statutory or substituted process is a nullity, and a decree based upon it would'be without effect and void. Pennoyer v. Neff, 95 U. S. 714; Stang v. Redden, 28 Fed. Rep. 11. The order for substituted service will be set aside.

' The order for service by publication being vain — no more, in legal effect, than a piece of blank paper — there was then nothing but a subpoena returned “not found” at the time the second one was issued and served. Thére is no rule of procedure in chancery requiring a court order for a second-subpoena after the first has been misspent. The writ, although issued out of and under the seal of the court, is but a notice to the defendant to appear. It is not a mandate to one of the court’s officers, and, until P. L. 1880 p. 74, could be served by any person. West v. Smith, 2 N. J. Eq. 309. Section 3 of' the Chancery act, which has been in our statutes since 1799 (Pat. L. p. 429), empowers the solicitor in a cause to issue it, and the fair implication is, that he may do so toties quo ties until service, viz., until legal notice of the suit be given the defendant. Whatever the procedure may be in other jurisdictions, the practice has grown up in this court, if not by virtue of the statute under its influence, which has been uniformly followed and is now firmly established, that subpoena may issue as often as necessary to bring the defendant into court, and that without an order. Ewald v. Ortynsky, 78 N. J. Eq. 527, is cited as an authority in denial of this view. In that case the sheriff’s return, regular upon its face, was, that service had been made upon the defendant corporation by delivery to one Barna, its president and agent. The corporation, instead of moving to quash the writ and service, filed a plea in har to the- jurisdiction, setting up that Barna was not its president and agent. The complainant joined issue and went to trial on the question of fact, which was found against him. Under the old practice, then prevailing but shortly afterwards changed, a plea found to be true, however deficient in point of law, brought the suit to an end. To prevent a collapse Vice-Chancellor Garrison granted leave to withdraw the replication, struck out the plea as insufficient in law, and added to the order “that the complainant may issue and have served a new subpoena upon the said defendant.” The appeal challenged the vice-chancellor’s course, permitting the withdrawal of the replication, after a hearing on the issue of fact and then determining the sufficiency of the plea as a matter of law, and the appellate court ruled that it was approved by authority, arid affirmed 78 N. J. Eq. 527. The requirement of an order for a new writ was not dealt with. That the taking out of a new writ was formally authorized in an already all-sufficient order, and, thus sanctioned, was approved by the upper court, simply testifies its propriety, not its necessity.

The text in 32 Cyc. 446, that “the court has inherent power to award such further process (alias writ), but the clerk has no such authority to issue it without an order of the court, in the absence of statute,” manifestly, is not applicable. It is based upon, and finds its limitations in, the codes of the states represented by the cases cited in the foot notes.

The motion to quash the writ and service will be denied. Fo costs.


text:
    Taxi and Yellow Taxi Operating Company v. Harry Martin. Taxi and Yellow Taxi Operating Company v. Stephen Harvey. Taxi and Yellow Taxi Operating Company v. Joseph P. Dunn.
    [Submitted November 2d, 1919.
    Decided November 28th, 1919.]
    It is unfair trade, for which an injunction will issue, for competitors to paint their taxi cabs so that by the ordinary patron they are not distinguished from those of complainant which had earned a patronag'e and good-will under a peculiar and distinctive painting of its cabs, the predominant feature being the conspicuous yellow body. The defendants are barred by their intentional fraud of the plea of common property in color.
    On final hearing, &c.

      Mr. John A. BernharrA (Mr. Merritt'Lane, of counsel), for the complainant.

      Messrs. Biker & Rilcer (Mr. Andrew Van Blwrcom), for the defendants.
   Backes, V. C.

The complainant operates a line of taxi cabs in Newark, and has an established business known as the “Yellow Taxi Cabs” service. It has earned its trade and the good-will of the taxi-riding public by efficient and satisfactory service, and by extensive advertisement. Its taxi cabs are popular, and well known by their peculiar and distinctive dress — black, with yellow body, chassis and wheel spokes trimmed yellow, and are familiarly known as the “Yellow Taxi Cab” or “Yellow Taxis.” The complainant’s principal stations are at the Pennsylvania and. Central railroad depots, in Newark, where it has contractual privileges. The three defendants are competitors, with a station at the Central railroad depot. There they jointly maintain an office and ’phone for receiving and answering calls. Up until last August they operated taxi cabs painted solid black. At that time they each purchased new ones of the same general type, as to structure and design, as the complainant’s, but dark over all in color. Eor the purpose of attracting trade, as they admit, they had the bodies repainted yellow, like those of the complainant’s cabs. There is a shade’s difference; the defendants’ cabs appearing to have faded slightly by longer exposure. This is observable on side-by-side comparison, with good light, but with the cabs apart is not appreciable. I have inspected the two sets of cabs and they are as near alike as the proverbial peas in a pod. The defendants point to certain features in their cars as distinguishing them from the complainant’s. Their emblem on the doors is a circle, while that of the complainant is a keystone, and slightly larger. Their wheel spokes are black. Their cabs carry no meter; the complainant’s do. Their chauffeurs are not in uniform; the complainant’s are. Their head lights differ from those of the complainant’s. One carries a spot, light; the other does not. These are variations, not distinctions. They are, no doubt, recognized by the expert automobilist, but with the ordinary patron and the undiscriminating public they pass unnoticed. The predominant feature that catches the eye and makes the impression is the conspicuous yellow body.

The motive and object of the defendants in adopting the get-up of tire complainant’s cab is palpable, and the conclusion is irresistible that they deliberately set out to annex the complainant’s patronage by palming off their cabs for those of the complainant’s. They had previously intimated their purpose, in confidence, to their friends. Such conduct'in traclp is unfair, unconscionable and fraudulent and, will be enjoined. International Silver Co. v. Rogers, 67 N. J. Eq. 646; L. Martin Co. v. L. Martin & Wilckes Co., 75 N. J. Eq. 257. It is a lame, and obviously false, excuse the defendants naively give for the imitation — that yellow, of approximately the isame hue used by the complainant, was ingenuously chosen because of its more durable quality than other colors — considering that tire paint on their newly-painted cabs would last the average life of a taxi cab. But, even if this excuse were true, it would not avail, for, whether the similarity be calculated or accidental, if it appears that the resemblance necessarily or probably tends to deceive the public into the belief that the taxi cabs of the defendants are those-of the complainant, it would be prohibited as unfair trading. Confusion has, in fact, resulted from the close resemblance. The principles of law on the subject are so familiar to the student of the opinions of this court and the appellate court that-extended citation of authorities would be useless labor. The latest expression of the doctrine concerning unfair trade is to be found in the opinion of the court of errors in Hilton v. Hilton, 90 N. J. Eq. 564, where many of the cases are gathered.

The defendants contend, in justification of their action, that, as color is common property, it cannot be monopolized by the complainant. That is true, as a general proposition, but it begs the question. Eims, in his work on Unfair Competition and Trade Marks 238, succinctly answers the argument in this manner:

“One often sees the rule stated that the use of color or form or shape or any of the characteristics which may he used by all in the making of an article does no-t, of itself, amount to unfair competition. This is true in a sense and untrue in another sense. The effect of imitating a single feature of an -article varies with every case. No definite rule can be laid down. It depends on the conspicuousness of the feature copied. Will its use of this feature cause buyers of the articles to be confused and deceived? If it will, the question then arises, as to the extent to which the court has power to enjoin its use. It can grant no decree which will give to the complainant a monopoly of the use on any particular line of goods of any color, form, size or other common feature of the article. If, however, the plaintiff has used a peculiar form, or shape or size, he will be protected in its use even against one Who copies ihis goods in this one particular only. Seldom does the newcomer in any commercial field have absolute rights as to the use of these common characteristics of the article he sells. 1-Ie must first consider, not himself, but those who entered the field before he did, with whom the public have become acquainted. If he cannot enter the business without confusing himself with one or more of these older concerns, he will be compelled to stay out. Said the Massachusetts court on this point as to the use of an oval loaf in the manufacture of bread: ‘And the defendants would have a right to make and sell bread which has that shape, were it not for the fact that bread of that shape means to the public that it is made by the plaintiff.’ Fox v. Best Baking Co. (1911, Loring, J.), 209 Mass. 251."

See, also, Hopk. Trade Marks § 116; 38 Cyc. 842; Buck’s Stove and Range Co. v. Kiechle; 76 Fed. Rep. 768; Florence Manufacturing Co. v. Dowd & Co., 178 Fed. Rep. 73; Coca Cola Company v. Gay-Ola Company, 200 Fed. Rep. 720; Moxie Company y. Daoust, 206 Fed. Rep. 434; Winterton Gum Co. v. Autosales Gum Co., 211 Fed. Rep. 612; Hiram Walker & Sons v. Grubman, 222 Fed. Rep. 478.

Another answer is, that in this instance the defendants barred themselves of the plea of common property by deliberately planning and executing- their scheme to capture the complainant's patrons by apptying the common color to their cabs in simulation of those of the complainant — intentional fraud. International Silver Co. v. Rogers, supra; L. Martin Co. v. L. Martin & Wilckes Co., supra.

The defendants will be enjoined from operating' their cabs for public hire, in Newark, in, their present garb.

Complainant is entitled to costs.


author: Foster, V. C.

text:
    Abram Meyer v. David P. Reed.
    [Submitted January 6th, 1920.
    Decided January 15th, 1920.]
    A lease perpetually renewable, where the rent reserved is one peppercorn, a release of which may be procured by paying the cost of drawing the necessary papers, is not such a defect of title as will excuse the nonperformance of a contract to purchase lands providing that the property was “to be conveyed by warranty deed by a record marketable title free from all encumbrances.”
    On bill, &c.

      Mr. Isaac Fleischman, for the complainant.

      Mr. Frank IP. Long, for the defendant.
   Foster, V. C.

Complainant seeks a decree to compel the specific performance of a written agreement made on April 25th, 1919, between the parties for the sale of the premises known as No. 517 Orange street, Newark.

The agreement, in substance, provides that, in consideration of $100 paid by complainant to defendant, the former was given “the sole and exclusive option to purchase or sell the premises for $11,000. The option to last until and to include the second day of June, 1919.”

The property was to “be conveyed by warranty deed by a record marketable title free from all encumbrances excepting a lease on the first floor.”

By a letter dated May 10th, 1919, complainant notified defendant that he had sold the property; and, again, on May 17th, 26th and 28th, complainant, or his attorney, notified defendant of the sale of the property and suggested a time and place for closing title; defendant did not reply to any of these communications, although he admits that two of them were received in his office in New York, and it appears that three of them were sent to him by registered mail. Defendant claims he tried unsuccessfully several times, between April 25th and June 2d, to get in touch with complainant about the contract, over the telephone and by calling at his office, but admits he never wrote complainant in regard to the matter.

After the contract was signed complainant had a search of the title made and discovered that the property was subject to various liens, including a perpetually renewable lease made by Trinity Episcopal Church to Caleb Perry, the rent reserved being a peppercorn; the lands in question being part of what was originally known as the parsonage lands of the church.

It appears that the discovery of the existence of this peppercorn lease is the real cause of this litigation. Defendant states he mentioned this peppercorn lease to complainant when the option was drawn, and thought the option was made subject to it; that he read the option hurriedly and signed it without noticing the omission of any reference to this lease. Complainant and his witnesses testify that this lease was not mentioned, although another one referred to in the option was, and he claims he had no knowledge of it until it was disclosed by the search.

Defendant’s objections to performing the contract are: First, that the contract is void for want of consideration. No proof was offered to support this claim, while complainant’s proofs clearly show an adequate and valuable consideration. Secondly, that tender of the purchase price has not been made. If this were a necessary prerequisite for a decree, it is sufficiently answered by the fact that defendant’s own' conduct, in refusing to answer complainant’s request to meet him for the purpose of receiving the balance of the purchase-money and delivering Ms deed, prevented tender being made, and excused complainant from attempting to make tender; and, furthermore, tender is made by the pleadings, which alleged a readiness and willingness on the part of complainant to perform. But a formal tender is not always necessary to be shown in order to justify the court decreeing specific performance, particularly where defendant’s own conduct prevented it from being made. The question of tender being really one of costs. Schreiber v. Menningham, 73 N. J. Eq. 134; Safford v. Barber, 74 N. J. Eq. 352; Roche v. Osborne, 69 Atl. Rep. 176. Defendant’s third objection is, that the court is without jurisdiction because complainant has a remedy at law. This does not require any serious consideration, as it is too well settled that the right to decree specific performance is within the discretionary jurisdiction of a court of equity. It may be well to state, however, that it is questionable if complainant has an adequate remedy at law. Defendant is a nonresident; service on him in this cause was made by publication; and his financiál responsibility has not been shown; complainanfs damages, if any, are unliquidated, and defendant’s property could not be attached to satisfy them; whatever remedy complainant may have at law would have to be sought, probably, in another jurisdiction, and at considerable additional expense and loss of time. Under all the circumstances I am unable to find any merit in any of the objections urged by the defendant against the relief complainant now seeks.

As I have stated, it would appear that defendant’s real reason for his refusal to perform his contract, is the existence of the peppercorn lease; he seems to think it impossible to have this cloud upon the title to the property removed except at great expense, and he has not, apparently, made any effort to ascertain if it is possible to have the rent reserved by the lease released. Complainant has, however, secured definite information on the subject, and it appears from correspondence in December last between complainant’s solicitor and Mr. Chauncey G. Parker, counsel for Trinity Episcopal Church (which has been admitted in evidence), that there are outstanding two classes of leases made by the church — the first class running for one hundred years, with the right to renew for one hundred years more, and the second class being perpetually renewable leases.

For a release of leases under the first class the church asks the payment of ten per cent, of the actual value of that part of the land covered' by the lease, and for a release of leases included in the second class the church, only requires the payment of the cost of drawing the necessary papers.

The fact that a release of the peppercorn lease on this property can be obtained by defendant on the reasonable terms mentioned, disposes of the last excuse or pretence urged by him against the performance of his contract; and a decree will be advised for complainant.


text:
    Baldwin Lumber Company et al. v. Local No. 560, International Brotherhood of Teamsters, Chauffeurs, Stablemen and Helpers of America, et al.
    [Submitted February 19th, 1920.
    Decided February 25th, 1920.]
    1. An injunction to restrain picketing and other coercive measures should not be granted on a preliminary hearing except in a case where the facts clearly establish that the acts and conduct which the complainants apprehend and fear are threatened and will probably be committed.
    2. A brotherhood made a co-defendant in a suit to enjoin picketing, &c., which is paying strike benefits -and is sufficiently within the jurisdiction of the court to offer proofs through one on whom 'the rule to show cause was duly served, will, though its headquarters are not disclosed, be held to be within the jurisdiction of the court.
    3. Since the strike against all the complainants was called and went into effect at the same time, and has been directed and managed in the same way and by the same parties, and the result has been common to all the yards of the complainants, the complainants may join in an action to restrain picketing, &c., in view of the provisions of the rules of this court.
    4. The rules of this court are to be liberally construed.
    5. The provisions of contracts making the yards of the complainants closed shops to all non-union men are against public policy and invalid.
    6. Peaceful picketing engaged in for the purpose of persuation may be enjoined.

      On application for a preliminary injunction on return of rule to show cause.

      Mr. Charles E. Hendrickson, Jr., and Mr. Merritt Lane, for the complainants.

      Mr. Marshall Van Winkle, Mr. Robert 11. McCarter and Mr. Alfred, Brenner, for the defendants.
   Foster, V. C.

This is a strike case in which complainants, fifteen in number, who are associated only for the purpose of this action, and who comprise practically all the dealers in lumber and mason materials in Hudson county, seek injunctive relief against the defendants who are four local labor unions — the International Brotherhood of Teamsters, &c., the Hudson 'County Building Trades Council, the Coal Drivers Union and Messrs. Buckley, Brandle, Hart and Mueller, alleged to represent one or more of the other defendants.

This relief is sought on the grounds that defendants acting jointly have caused a strike of the men employed in the several yards of complainants5, and that they have employed and are resorting to picketing, intimidation and other coercive measures to make the strike a success,, and that such measures unlawfully interrupt, interfere with and irreparably damage the business and property rights of each of the complainants.

From the averments of the bill and from the facts established by the affidavits used on the hearing, it appears that the stiike was called because the 'parties could not, among other things, agree on the terms of wages, hours and working conditions that should affect the employes of the several yards from January 1st, 1920. Shortly before this date defendants jointly submitted to complainants the draft of an agreement embodying the terms under which their employes should work. This draft was substantially similar to joint agreements that had been in force between the parties for the past four years, except for an increase in wages of $10 a week, and making the working day one of nine, instead of ten hours. Complainants expressed their willingness to sign the agreement presented if the increase in wages was limited to $3, and defendants modified their demands to an increase of If, which was unacceptable to complainants, and thereupon by Ihe vote of the members of the unions, cast in joint meeting, the strike was called. Complainants then filed their bill and in addition to the usual averments with respect to tire injury suffered by them from unlawful picketing, intimidation and coercion, they alleged that the defendants combined and conspired and called this strike not only to compel them to accede to defendants’ terms on wages, hours and working conditions, but also to compel them to accept certain provisions of the contract which requires them to make their several yards closed shops to all except union labor, by’ requiring them to compel all new men employed by them to join the union; by compelling, them to hire only carmen who employ members' of the International Brotherhood of Teamsters, &c., and who pay the prevailing rate of wages; and by obligating them to join in a secondary boycott by refusing to deliver materials to anj" building on which a strike has been ordered, and that for refusing to sign the agreement, each of the complainants “shall be deemed as being an unfair firm.”

Although 'these provisions are now objected to, they were in the contracts which complainants, or some of them, jointly made with defendants for the government of their relations during the past four years.

It appears from the moving papers and complainants’ supplemental affidavits, that the strike was called on January 10th last, and that, in obedience to defendants’ orders, the drivers and yard men employed by complainants quit work, and since then these former employes have engaged, with strangers, in picketing the front and rear entrances and the immediate neighborhood of the yards where they were employed, or the yard of some other of the complainants; that this picketing has resulted in the interruption and finally in the stoppage of all business in complainants’ yards; in the interference with and intimidation of tire customers of complainants or some of them; in preventing some of their employes who desired to do so from remaining at or returning to work; in an assault, in one instance, by throwing stones at other men employed by one of the complainants ; in the intimidation of a carman employed by another yard: in preventing the unloading of materials from boats and cars, and has completely stopped the delivery and attempted delivery of materials for much needed work on buildings, lifeboats, etc., and in at least one instance caused the refusal of a stationary engineer to handle material delivered, from the yard of one of the complainants by an independent carman.

It appears that three or four of the yards were not picketed in the beginning of the strike; since 'the rule to show cause was issued, however, and because of the conduct of the pickets and the results to other yards from this picketing, the owners of these yards have felt compelled to close the same, and all the complainants have ceased doing business.

Defendants by their affidavits specifically deny the charges of interference, intimidation and coercion; they admit that some of the former employes of complainants may have engaged in peaceful picketing, hut they insist that complainants’ proof is wholly lacking in identifying any of their former employes as the men who interfered with or intimidated any of their customers or employes; and while it is true that such identification is largely absent from the proof, it does appear in some instances that some of complainants’ former employes were present when others, not identified, interfered with and used threats or intimidation to some of complainants’ customers or employes. And it also significantly appears that some of the employes o£ complainants having made affidavit to the effect that they had no grievance and did not desire to strike, later joined the strike and by other affidavits retracted all they had previously sworn to. And while the affidavits of defendants deny, on the part of many of the former employes of complainants some of the matters charged in the bill and affidavits, they do not dispute or deny the interference and intimidation which complainants’ proof establishes has actually occurred at some of the yards, and to some of the cartmen hired by one or more of the complainants, and there are many of complainants’ former employes who do not join in defendants’ denial, leaving the doubt, if any, about their participation in such coercive acts, in favor of the complainants.

On this branch of the case, the proofs are satisfying that the business and property rights of complainants, except the three hereinafter mentioned, have been and are being seriously interfered with and are threatened with irreparable injury by the picketing, intimidation, and coercion indulged in by their former employes, and others associated1 and acting' in concert with them, under the direction or with the sanction of the defendants or some of them. But the proofs are not satisfying that this threatened irreparable injury is impending over the yards of three of the complainants, for it appears that at the time of filing the bill there was no picketing or interference with the yards of the following named complainants: O’Neill’s Lumber Company, Jersey City Lumber Company, Chas. H. Engler Lumber Company, Oakland Lumber Compan}', Gardner & Meeks and Conlon &■ Company; immediately upon the service of the rules to show cause, picketing and interference with employes and customers of the O’Neill, Jersey City and Oakland yards was instituted. No such conduct is alleged or established against the yards of Engler, Gardner & Meeks or Conlon. These three complainants state, however, that they have ceased business and have closed their yards through the fear that their employes and their customers will be interfered with and intimidated if they re-open their yards and attempt to do business without the 2>rotection afforded by injunction. It may be that their fears are well grounded, and while it is true that the remedy of injunction is preventative and not punitive, it is also' true that this remedy should not be granted on a preliminary hearing, except in a case where the facts clearly establish that the acts and conduct which complainants apprehend and fear are threatened’ and will in all probability be committed. Such does not appear to be the situation at this time at the yards of Engler, Gardner & Meeks and Conlon, and until this situation does arise at those yards the preliminary injunction should not issue to restrain defendants from committing acts which so far they have not threatened or by their conduct indicated the slightest intention of attempting. Meyer v. Somerville Water Co., 79 N. J. Eq. 613, must control, and requires the denial of the injunction these three complainants seek.

In addition to the denial of the facts, defendants object on several grounds to the issuance of any injunction. The first of these objections is addressed to the jurisdiction of the court over the International Brotherhood of Teamsters, &c., and over the Coal Drivers’ Union, and counsel appeared specially for these defendants to urgfe this objection.

It developed at the hearing that counsel for complainants and for the defendants, also, did not know if there was such an organization as the Coal Drivers’ Union, and if there were, it does not appear that any of the individual defendants represent it, or was authorized to receive service of a copy of the rule to show cause for it. If there is any such organization — and judging from the special appearance of counsel' for it, it seems, notwithstanding their doubts about it, that there is — it is not only not properly before the court by due service upon it, but there is not a single fact in the case to show why it should be enjoined, or that it has any relation to the present situation; and as to this defendant, the motion to dismiss will be granted.

With respect to the International Brotherhood of Teamsters, &c., it appears from the allegations of the bill, and it is not denied, that this brotherhood is an unincorporated organization, made up of locál unions and joint councils like the defendant, the Teamsters’ Joint Council of Hudson County; that the international is a party to the contract in question; that one of the representatives of the international and the locals is the defendant, the Hudson County Building Trades Council; that the international was represented in the negotiations between complainants and defendants over this contract hv the defendant .Theodore M. Bran die, vice-president of the Hudson County Building Trades Council, who was also the representative. of the unions.

The bill charges and the affidavits establish that the international is paying to some of the strikers while engaged in picketing, strike benefits: and this is not denied. The proof of service shows that the service of the rule to show cause for the international was duly made on Branclle, and that the copy served and accepted by him was prominently marked for the international. Eor all purposes Brandle appears to have been the representative of tlie international through this controversy and neither he nor any one else makes affidavit that he is not.

In the person of Brandle the international was sufficiently within the jurisdiction to execute this contract if complainants had executed it, and it was and still is sufficiently within the jurisdiction to pay strike benefit and to offer proof on other features of the case through Brandle; and I am unwilling to hold that this unincorporated organization, whose headquarters are not disclosed, may for its own purpose he within the jurisdiction of the state, through its representative Brandle when it pleases, and that the court is powerless to say that it is within the jurisdiction when process in these proceedings is duly served upon it through the same representative. Such attempted shifting of representation cannot he permitted to prevent the court from reaching any and all parties to this controversy. This particular defendant, which appears largely responsible for the continuation of the strike through the aid and assistance given by it in the payment of strike benefits, should not be permitted, through the statement of counsel, unsupported by proof, to avoid the jurisdiction of the court, and he at liberty to continue its activities on behalf of this strike. I consider it to be within the jurisdiction, and its motion to he dismissed is denied.

The next objection denies the right of complainants to unite in the prosecution of this action, and the facts pertinent to its consideration are: that the former contracts between tlhle employers and their employes were joint contracts executed by complainants and the defendant organizations; that the contract in question is of the same joint character; that the vote to order the strike was taken at a joint meeting of the unions; that the strike against all the complainants was called and went into effect at the same time, and has been directed and managed in the same way and by the same parties, and the result has been common to all the yards — a complete cessation of business. The rules of court are to be liberally construed (Renwick v. Hay, 90 N. J. Eq. 148, and cases cited), and Rules Nos. 5, 23 and 24 seem clearly to sanction the joinder of complainants in prosecuting ibis action, in which there is a common question of law and fact arising out of the same transactions with the defendants, and. in which they seek to prevent defendants by their joint conduct doing them severally an injury for their joint refusal to comply with defendants’ demand for the execution by them of this joint contract. Their grievances and injuries arise out of the same joint transactions, and are the results of the same joint action and conduct of defendants; and no satisfactory reason has been shown why they should not be permitted to jointly ask for relief.

It is further insisted that an injunction cannot go against any of the defendant organizations because they are not shown to be corporations, and therefore cannot be sued in a court of equity.

This contention is contrary to the result of a large number of cases in this court, including cases against labor unions that have been passed upon by the court of errors and appeals; and if any change in this practice is to be made, it seems proper to leave it to that court to make the change; but for the purposes of the present case, any preliminary injunction that may be advised can be so framed that it will not only restrain the defendant organizations, but also the individual defendants and all others associated with them in committing the acts and conduct enjoined.

Objection is particularly urged against the injunctive relief sought on that branch of the case relating to the execution of the contract containing the provisions for making the yards of complainants closed shops to all non-union men; the insistment being that if such contracts are illegal, complainants need not perform them; and' further, because complainants during the past four years have executed, without objection, contracts containing similar provisions. -

Contracts of this character containing provisions designed to unionize an entire industry in a territory as large as Hudson county, do not appear to have come directly before our courts for consideration, except as hereinafter mentioned. In other jurisdictions where they have been involved, they have uniformly been held to Be illegal as against public policy. Conners v. Connolly (Connecticut Court of Appeals), 86 All. Rep. 604, Berry v. Denoran (Supreme Court of Massachusetts), 188 Mass. 353; Plant v. Woods, 176 Mass. 492; Folsom v. Lewis, 208 Mass. 336; Curran v. Galen (Court of Appeals), 152 N. Y. 33; Auburn Draying Co. v. Wardell, 178 App. Div. 270; affirmed, 227 N. Y. 1. The illegality of such contracts is pronounced upon the fundamental principles of our theory of government, to which monopolies of any kind affecting in any way the utmost freedom of the individual to pursue his lawful trade or business are abhorrent. As was said in Folsom v. Lewis, supra, “The law condemns all combinations, whether in respect of labor or of so-called capital, which seek to become monopolies and thus oppressive to the people.” Any departure from these principles must necessarily result in the preferential recognition under the law of one class of citizens over all others; and the undisputed facts in this action disclose a purpose on the part of the defendants to obtain this, class preference, by the terms of this contract which they expect to secure from complainants through the coercive effect of the strike. The authorities cited hold such contracts to' be violative of public policy; and the past voluntary, or compulsory acquiescence of complainants respecting them does not alter their character, nor does the.fact that, as in this contract, in addition to its unionizing features, there are provisions relating to such legitimate subjects of agreement, as wages, hours of labor and other working conditions. The exception referred to in which any of our courts has had a contract of this nature before it, was in the case of Brennan v. United Hatters, 73 N. J. Law 729, where Mr. Justice Pitney, in delivering the opinion of the court of errors and appeals (at p. 788), said, “its lawfulness admits of question.”

The remaining question to be considered relates to the restraint on peaceful picketing. It is insisted that the restraint imposed under the rule and which is asked to be continued by preliminary injunction, enjoins peaceful picketing- and persuasion, and that in this respect it is beyond the scope of the restraint imposed by Vice-Chancellor Bergen in Jonas v. Glass Assn., 72 N. J. Eq. 653, and approved by the court of errors and appeals in 77 N. J. Eq. 219, in affirming the decree in the case.

A careful consideration of the vice-chancellor’s opinion, and of the opinion of Chancellor Pitney in the court above, and the dissenting opinions therein do not support this insistment. Vice-Chancellor Bergen quoted with approval from the opinion of Judge McPherson in A. T. & St. Fe Ry. Co. v. Gee, 139 Fed. Rep. 582, that, “There is and can be no such thing as peaceful picketing any more than there can be chaste vulgarity or peaceful mobbing or lawful lynching;” and later in his opinion the, vice-chancellor held that such picketing “In its mildest form is a nuisance and to compel a manufacturer to have the natural flow of labor to his emplojement sifted by a self-constituted committee whose very presence upon the highway for such purpose is deterrent, is just as destructive to his property as is a boycott which prevents the sale of his product.” This language was neither criticised nor modified in any of the opinions in the court above. Chancellor Pitney in delivering the prevailing opinion summarized the fen features of the strike to which the restraint advised by Vice-Chancellor Bergen applied, and his comment on No. <3 was: “With respect to other persons not as yet employed but willing to take employment under the complainant, the defendants are restrained from interfering to prevent this coercion or personal molestation and annoyance, bul are hot restrained from using mere persuasion in such a case.” The minority members of the court reached a different conclusion on the nature and extent of the restraint. Mr. Justice Garrison’s dissenting opinion in the case (at p. 232) was as follows; “In so far as the decree appealed from directs that the defendants be enjoined from the peaceful persuasion of persons who are not under any contract to serve complainant, I think the court below was in error and that to that extent the decree should be reversed. I am requested by Justice Swayze and Judge Bogart to state they concur in the foregoing view.”

In the absence of a. positive declaration to the contrary in the majority opinion these dissenting opinions are indicative of the extent to which the injunction in that case extended; and taken in connection with the views expressed by the vice-chancellor, they are authority for the conclusion that in the Jonas Case peaceful picketing engaged in for the purpose of persuasion, regardless of whether the persuasion was addressed to present or prospective employes of complainant, was enjoined.

The restraint-imposed under the rule will be continued (except in the case of Engler, Gardner & Meeks and Conlon) against the defendants, and their representatives and those associated with them in the promotion and management of the strike, and-it will be extended to enjoin the acts and conduct specified in subdivisions A and B of the prayer of the bill.

The application for a reference to a special master to take testimony in aid of complainants’ bill, even if it is the novelty' in our practice defendants’ claim, can await consideration until the answers defining the issues between the parties have been filed.

The terms of the order can be settled on two days’ notice.