author: Pee Cueiam.

text:
    New York, Susquehanna and Western Railroad Company, appellant, v. Charles W. Bell, receiver of the Traders Paper Board Company, appellee.
    [Argued November 20th, 1912.
    Decided March 3d, 1913.]
    On appeal from a decree of the court of chancery advised by ATce-Chancellor Howell, -who filed the following opinion:
    This is a suit for the administration of the affairs of an insolvent corporation. The New York, Susquehanna and AVestern Railroad Company made claim to the receiver for $1,673 for demurrage on freight cars containing freight consigned to the receiver during the months of January, February, March, April and May, 1908. The receiver disallowed the claim; whereupon, on the railroad company’s application it was referred to a special master to ascertain whether the receiver was indebted to the railroad company in the amounts set forth in the petition, or other amount, and, if so, the amount of the indebtedness and the facts and circumstances under which it arose or was claimed to have arisen, and such other matters touching the controverted indebtedness as the master might think relevant and proper, together with his opinion thereon. He was given authority to take such depositions and other evidence as might be offered by the parties concerning the matters in controversy. A large amount -of testimony was taken, and the master has reported in favor of the receiver’s denial of indebtedness. To this report exceptions were filed, and the matter comes on for hearing on the master’s report and the exceptions thereto.
    The railroad company, at its Bogota station, had m> platform on which freight could be unloaded from its cars. The receiver, however, had such a platform, and the arrangement was that when cars came to that station consigned to the receiver they were shunted alongside the receiver’s platform, which was long-enough to hold ten or a dozen cars, and there unloaded. An agreement in relation to this car -service was entered into by the insolvent corporation prior to the appointment of the receiver, and subsequently the receiver adopted the contract as. his own, and under his authority to operate the mill he was in receipt almost daily of consignments over the railroad of raw material for the paper mill. It is claimed on the part of the railroad company that the receiver did not promptly unload the cars which were placed upon his siding, and that by reason thereof under the terms of the agreement between him and the railroad company the railroad company was unable to discharge its freight promptly and in accordance with the agreement, and that therefore demurrage charges sought to be collected accrued against the receiver. Under these circumstances it became incumbent upon the railroad company to prove that the delay in making actual deliveries at the receiver’s platform was due to the negligence of the receiver or his inability to empty the cars so as to make way for other loaded cars which were waiting on the railroad company’s tracks to be unloaded. The evidence on this point is -voluminous, contradictory, uncertain and very unsatisfactory. I have perused it carefully with the purpose of ascertaining the fact touching this point, and I am obliged to say that I have not been able to find clear and plain statements on the part of the railroad company which satisfy me that the situation is any different from tliat which the master has reported. The master, who is an experienced lawyer, had the advantage of seeing the witnesses, of observing their manner on the witness-stand, and of examining in detail with the aid of counsel and witnesses the books, vouchers and other records upon which the rights of the parties depend. Tie was therefore in a better position to judge of the character and weight of the evidence than anyone else could be.
    Under the circumstance therefore I ought not to disturb the report of the master.

      Messrs. CorilancU & Wayne Parker, for the appellant.

      Mí'. J oseph .4. Duffy, for the appellee.-
   Pee Cueiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Howell.

For affirmance — Ti-ie Chancellor, Chiee-Justioe, Garrison, Swayze, Trenchard, Bergen, Minturn, Kalisoh, Bogeet, Vbedenburgi-l, Conguon, Teeaoy — 12.

For reversal — None.


source: Caselaw Access Project

author: Pee Ctjeiam.

license: Public Domain

text:
    Philip J. Bowers, appellant, v. City of East Orange, respondent.
    [Argued November 21st, 1912.
    Decided March 3d, 1913.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Emery, whose opinion is reported in 80 N. J. Eq. (10 Buch.) 1.

      Mr. Ralph E. Lum (Messrs. Lum, Tamblyn &• Golyer on the brief), for the appellant.

      Mr. Borden D. Whiting, for the respondent.
   Pee Ctjeiam.

The decree is affirmed, with costs, for the reasons stated in the opinion in Bowers v. Bloomfield, just decided, ante p. 168.

For affirmance — Ti-ie Chief-Justice, Garrison, Swaxze, Trenchard, Bergen,- Mjnturn, Kalisoh, Bogbrt, Vredenburgi-i, Congdon, TRBACX — 11.

For reversal — None.


author: Per Curiam.

text:
    Louis Giusto, respondent, v. Anna Giusto, appellant.
    [Argued November 22d, 1912.
    Decided March 5th, 1913.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Garrison, whose opinion is reported in SO' N. J. Eq. (10 Buch.) 355.

      Mr. Amedeus Valente (Mr. Leon Abbett, of counsel), for the respondent.

      Mr. John J. Fallon (Mr. Maurice J. Breen with him), for the appellant.
   Per Curiam.

The decree appealed from will'be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Garrison.

For affirmance — The Ci-itef-Justioe, Garrison, Swaxze, Trenchard, Bergen, Minturn, Kalisci-i, ‘Bogbrt, Vredenburgi-i, .Congdon, Tbeacx — 11.

For reversal — None.


text:
    Anna Giusto, appellant, v. Louis Giusto, respondent.
    [Argued November 22d, 1912.
    Decided March 5th, 1913.]
    On appeal from a decree of the court of chancery advised by •Vice-Chancellor Garrison, whose opinion is reported in SO N. J. Eq. (10 Buch.) 356.

      Mr. Amedeus Vdiente (Mr..Leon Abbett, of counsel), for the respondent..

      Mr. John J. Fallon (Mr. Maurice J. Breen with him), for the appellanr
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Garrison.

For affirmance — Tiie Ciiiee-Justioe, Garrison, Swayze, Trenchard, Bergen, Minturn, Kalisch, Bogert, VredenBURGH, CONGDON, TREAO'Y — 11.

For reversal — None.


text:
    Richard B. Meaney et ux., appellants, v. Frederick C. Stork, respondent.
    [Argued November 22d and 25th, 1912.
    Decided March 3d, 1913.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Garrison, whose opinion is reported in 80 N. J. Eq. (10 Such.) 60.

      Mr. -John I. Weller (Messrs. Weller & Lichtenstein on the brief)., for the appellants.

      Mr. John H. Sheridan, for the respondent.
   Per Curiam.

We agree with the vice-chancellor except as to the views expressed by him with reference to the porch as a violation of the restrictions. We think it unnecessary to express an opinion upon his reasoning in that regard, since the other buildings on the tract have porches as wide as or wider than the defendant’s, and no objection is shown to have been made thereto. This fact establishes either a contemporary construction by the parties concerned adverse to the complainant’s contention or an abandonment of the restriction in that respect. Upon either view, the complainant is not entitled to an injunction. The decree is affirmed, with costs.

For affirmance — The Ci-iiee-Justice, Garrison, Swayze, Trenchard, Bergen, Minturn, Kalisch, Bogert, Vreden-BURGIí, CONGDON, TREAOY--11.

For reversal — Uone.


text:
    Charles S. Ross et al., appellants, v. Amelia Ross Sparks et al., respondents.
    [Argued November 22d, 1912.
    Decided March 5th, 1913.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, whose opinion is reported ante p. 117.

      Mr. John J. Grandall and Mr. Timothy J. Middleton, for the appellants.

      Mr. Thomas E. French, for the respondents.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Learning.

For affirmance — The Chiee-Justice, Garrison, Swayze, Trenchard, Bergen, Minturn, Kalisch, Bogert, Vreden-BURGI-I, ÜONGDON, TrEACY — 11.

For reversal — None.


author: Per Curt am.

text:
    Sophia Howell, administratrix, respondent, v. Andrew G. Steelman et al., appellants.
    [Argued November 25th, 1912.
    Decided March 3d, 1913.]
    On appeal from a decree of the court of chancery advised by Advisory Master McDermott.

      Mr. John M.- Dickinson, for the appellants.
    . Messrs. Melosh & Morten, for the respondent.
   Per Curt am.

The question which this case presents for determination is whether certain funds which came into the hands of the complainant, as administratrix of her mother, Hannah C. Godfrey, are legally distributable among the next of kin of the decedent, or should he transferred to herself, as the administratrix cum testamento annexo of her father, Andrew S. Godfrey, deceased, and then distributed under his will. The following are the material facts: Andrew S. Godfrey died in 1889, leaving a will by which, after providing for the payment of his debts, he gave to each one of his children the sum of one .dollar, and gave the whole balance of his estate to his wife, Hannah, during her natural life or widowhood, and then to his surviving heirs, and made his wife his sole executrix. She, as such executrix, filed an inventory • and a partial account, by which she charged herself with $10,245.05. She died in 1907, and Sophia Howell, the complainant, was appointed her administratrix. She filed an inventory of Hannah’s estate, showing property in her hands to the extent of $12,263.46; and in 1908 filed her account, showing a balane'e on hand of $10,151.68. Subsequently, she was appointed as administratrix cum testamento annexo of the estate of her father, and proposed to turn over from her mother’s estate to herself, as the representative of her father’s estate, the amount which appeared to be due the father’s estate from the mother’s, ’ as executrix, as shown by the account filed by the mother. Objection being made to her doing so by the next of kin of the mother, she thereupon brought this suit, for the purpose qf having it determined whether such a course of conduct by her was proper. We have no doubt that it was. The proofs showed that the inventory and account of Hannah, as the executrix. of her husband, fairly represented the amount of the estate which she received in that capacity. Her personal right to its enjoyment was limited to the income of the estate during her life, and her personal representative is bound after her death to account to the estate of her husband for the corpus. The fact that the same individual represents both estates is, of course, immaterial. The situation is the same as if A had been appointed an administrator of the mother and N the administrator cum testamento annexo of the father.

This was substantially the view expressed by the advisory master, and the decree advised by him should be affirmed.

For affirmance — Ti-ie Chiee-Justice, Swayze, Trenohard, Bergen, Minturn, Kalisch, Bogert, Vredenburgi-i, Cong-' don, Treacy — 10.

For reversal — None.


text:
    Charles A. Coppinger et al., appellants, v. Herbert Clark Gilson et al., respondents.
    [Argued November 27th, 1912.
    Decided March 5th, 1913.]
    On appeal from a decree of the court of chancery advised hy Vice-Chancellor Garrison, who filed the following opinion:
    After hearing Mr. Duffjr, Mr. Lane, Mr. Hartshorne and Mr.' Gilson, 1 see no reason to change my mind, and I will adhere to my previous ruling.
    It seems to me that in the uncertain event of Mr. Duffy's client being able to recover, it is not equitable of him to ask this, without assuring the court by a proper bond that if he does go on with this suit the creditors will be no worse off than they are now. This will give him an opportunity to test out the question which he thinks exists in his favor to recover as much money as he thinks the defendants are responsible for,, and it does not enable him to do that with somebody else’s money.
    If you will give a bond which will assure this court that the present offer of $10,000 or thereabouts, will be paid, in any event, with interest up to the time that you get through litigating, then I will let you go 'on. If you won't give such a bond, then I will grant the order asked. Are you willing to give a bond which will indemnify the court against loss?
    Broadly speaking, the condition of the bond must be that in the event of the litigation which is to be carried on by Mr. Duffy in behalf of his clients, is not to bring any cash into the hands of the receiver, at least the sum of the present settlement, with interest to the date of the final determination of that suit, then the obligor will pay any difference between what may be recovered in that suit and the ten thousand and odd dollars, which under the present settlement would be paid to the receiver; otherwise the obligation would be void. Will you accept such a bond as that ?
    The bond must be framed and presented to Mr. Duffy within twenty-four hours, if possible; and Mr. Duffy may have one week after that bond has been presented to him to have it executed and lodged with counsel for the solicitor. If at the end of one week from the time that Mr. Duffy has received the bond he has not returned it duly executed, then the receiver may ask an order accepting this settlement. If, on the other hand, Mr. Duffy has presented such bond, then notice should be served on everybody. Serve the bond on Mr. Duffy and take exact memorandum of the time. He is to have exactly seven days to execute that bond.

      Mr. Joseph A. Duffy, for the appellants.

      Mr. Herbert Ciarle Gilson, for the respondents.
   Per Curiam.

The order appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Garrison.

F.or affirmance — The Chief-Justice, Garrison, Swayze, Trenci-iard, Bergen, Minturn, Kalisch, Bogert, Vreden-BURGI-I, CONGDON, TREACY-11.

For reversal — Hone.


author: Per Curtam.

text:
    Adelaide Bender, respondent, v. John H. Dialogue, Jr., et al., appellants.
    [Submitted December 9th, 1912.
    Decided March 5th, 1913.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, whose opinion is reported in 80 N. J. Eq. {10 Buck.) 408.

      Messrs. French & Richards, for the appellants.

      Mr. Lewis Siarr, for the respondent.
   Per Curtam.

The order appealed from will be affirmed, for the reasons stated in the opinion 'filed in the court below by Vice-Chancellor. Learning.

For affirmance — The Chiee-Justioe, Garrison, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Bogert, - Vredenburgh, Congdon, Treacy — 12.

For reversal — None.


author: Per Curtail

text:
    Frederick Conrad, administrator, &c., appellant, v. Charles A. Conrad et ux., respondents.
    [Submitted December 9th, 1912.
    Decided March 5th, 1913.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevens, whose opinion is reported mte p. ¡¡If.

      Messrs. Peirce & Hoover, for the appellant.

      Mr. Edward Nvgeni and Mr. Alan II. Strong, for the respondents.
   Per Curtail

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Stevens.

For .affirmance — The Chiee-Justice, Garrison, Sway,ze, Trenchard, Parker, Bergen, Minturn, Kalisoh, Bogert, Vkedenburgh, Congdon, Treact — 12.

For reversal — None.


text:
    Mary Ella Miller, respondent, v. Gordon D. Miller, appellant.
    [Submitted December 9th, 1912.
    Decided March 3d, 1913.]
    On appeal from an order of the court of chancery advised by Vice-Chancellor Garrison, whose opinion is reported in 80 N. J. Eq. (10 Buck.) R7.

      Messrs. Roe & Runyon, for the appellant.

      Mr. Randolph Perhins, for the respondent.
   Per Curiam.

The order appealed from is affirmed, for the reasons stated in the opinion of Vice-Chancellor Garrison.

It was suggested in the briefs submitted on behalf of the appellant that a vital change in the relationship of the parties .has occurred since the making of the order appealed from by reason of a decision of the appellate division of the New York supreme court, which would affect the status of the parties and require a different solution of the question at issue than that reached by the learned vice-chancellor. But this court, in Black v. Delaware and Raritan Canal Co., 24 N. J. Eq. (9 C. E. Gr.) 455, held that in the court of last resort no new facts can be introduced by testimony; that such court will not presume that the circumstances of the case have changed in any respect since the decision in the court below, and that the contest must be decided in the court above upon the case made in the court below. It is therefore apparent that we cannot notice the asserted change in the situation of the parties.

For affirmance — The Chancellor, Chiee-Justice, Garrison, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisci-i, Bogert, Yredenburgh, Congdon, Treaoy — 13.

For reversal — Hone.


text:
    Seton Hall College, complainant, v. Calumet Construction Company et al., defendants.
    [Submitted December 9th, 1912.
    Decided March 5th, 1913.]
    Appeal of J. E. Glasby Lumber Company.
    ■ On appeal from a decree of the court of chancery advised by Vice-Chancellor Howell, whose opinion is reported ante p. 11¡£.

    Dfessrs. Guild & Martin, for the appellant.

      Messrs. Yredenburgh, Wall & Garey and Messrs. Herrmann & Steelman and Mr. Gilbert Collins, for the respondent.
   Per Curiam.

The decree’ appealed from' will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Howell.

For affirmance — The Chiee-Justioe, Garrison, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Bogert, Yredenburgh, Congdon, Treacy — 12. •

For reversal — Hone.


text:
    Seton Hall College, complainant, v. Calumet Construction Company et al., defendants.
    [Submitted December 9th, 1912.
    Decided March 5th, 1913.]
    Appeal of Browe Company.
    On appeal from a decree of the .court of chancery advised by Vice-Chancellor Howell, whose opinion is reported ante p. US.

      Mr. George H. Peirce, for the appellant.

      Mr. Gilbert Collins, for the respondent.
   Per Curtam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Howell.

For affirmance — The Chief-Justice, Garrison, Swayze, Trenci-iard, Parker, Bergen, Minturn,- Ealisoh, Bogert, Vredbnburgi-i, Congdon, Treaoy — 12.

For reversal-^-HTone.


text:
    Seton Hall College v. Calumet Construction Company et al.
    [Submitted December 9th, 1912.
    Decided March 6th, 1913.]
    Appeal of Hatlian Bilder, trustee in bankruptcy.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Howell, whose opinion is reported ante ¶. 1^8.

      Messrs. Peirce & Hoover, for the appellant.

      Mr. Gilbert Collins, for the respondent.
   Per Curiam.

The portion of the decree brought under review by the present appeal will be affirmed, for the reasons set out in the opinion delivered in the court below by Vice-Chancellor Howell.

For affirmance — The ■ Ci-iiee-Justice, Garrison, Swayze, Parker, Bergen, Kalisci-i, Bogert, Vredenburgi-i, Cong-don — 9.

For reversal — Hone.


text:
    Sarah L. Remer, complainant-respondent, v. Frances J. Benedict et al., defendants-respondents, and James C. Bioren, defendant-appellant.
    [Submitted January 3d, 1912.
    Decided March 5th, 1913.]
    On appeal from a decree of the court of chancery advised by ■Vice-Chancellor Emery, whose opinion is reported ante p. 21.

      Messrs. Coult & Smith and Mr.. Arthur B. Denman, solicitors for and of counsel with James C. Bioren, appellant.

      Mr. Charles C. Pilgrim, solicitor for and of counsel with Sarah-L. Remer, respondent.

      Messrs. Lum, Tambyln & Colyer, solicitors for and of counsel with Frances J. Benedict and others, respondents.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Emery.

For affirmance — The Chief-Justice,- Garrison, Swayze, Trenohard, Parker, Bergen, Minturn, Kalis oh, Bogert, Vredenburgh, Congdon, Treacy — 12.

For reversal — None.


author: Walker, Chancellor.

text:
    John T. Cook et ux. v. Mason M. Cook et al.
    [Decided March 8th, 1913.]
    1. In a suit for partition, a plea setting up that it is not true that the deceased ancestor died seized of the premises described in the bill, or that they descended to the complainant and the defendants as the children and heirs-at-law of the deceased, or that the complainants and defendants ai'e seized of the premises as the heirs-at-law of the decedent, is clearly bad, and will be overruled, because it does not say why or wherefore the complainant and other parties are not seized of the premises in question, but simply states that they are not.-
    2. Matter relied upon in a plea to a bill in equity must be accompanied by such averments as are necessary to support it.
    3. While there is no such practice as a motion to strike out a plea unless it be sham and frivolons, yet a motion to. strike out an insufficient piea may be considered as if the plea had been set down for argument.
    On motion to strike out plea.

      Mr. William J. Baches, for the motion.

      Messrs. Wicoff & Banning, contra.

   Walker, Chancellor.

The bill is one for partition. It alleges that Allison Ely Cook was, at the time of his death, seized in fee-simple of a certain farm or tract of land (describing it), being the same premises conveyed to him by Hugh H. Hamill, administrator, &c., pursuant to an order of the orphans court, &c., which deed bears date April 1st, 1893, and is recorded, &c.; that the said Allison Ely Cook died intestate April 1st, 1911, leaving the complainant and certain brothers and sisters, his only children and heirs-at-law, him surviving; and that by his death intestate said farm and premises descended to his children who became seized 'thereof as tenants in common in fee-simple absolute. After setting out the undivided interests of the tenants in common, the bill prays for a partition or sale of the lands in the usual form, and prays that the defendants may full, true, direct and perfect answer make to all and singular the charges and matters contained in the bill, as fully and particularly as if the same were again repeated and they thereunto- particularly interrogated, &c.

A plea has been interposed by certain defendants which sets up that it is not true that Allison Ely Cook died seized of the premises described in the bill, or that they descended to the complainant and the defendants as the children and heirs-at-law of the deceased, or that thle complainants and defendants are seized of the premises as the heirs-at-law of the decedent.

The present motion is to strike ont the plea as sham and frivolous.

The plea is clearly' bad. It does not say why or wherefore the complainant and other parties are not seized of the premises in question, but simply states that they are not. In Corlies v. Gorlies’ Exrs., 23 N. J. Eq. (8 C. E. Gr.) 197, a plea that complainant was incapable of taking care of herself or her property was held to be bad, because it did not set up idiocy, lunacy or imbecility of mind or inquisition found. The plea under consideration in this case is bad for the same reason. Matter relied upon in a plea to a bill in equity must be accompanied by such averments as are necessary to support it. 1 Dan. Gh. Pr. & Pr. (6th Am. ed.) 682. The plea in Moss v. Lane, 50 N. J. Eq. (5 Dick.) 295, was overruled upon substantive grounds, but doubtless it would have been overruled as insufficient if it had merely averred that the will under which the complainant claimed was not thle last will of the decedent without going on, as it did, to show that there was another and later will.

Furthermore, it may be that the plea is bad because not accompanied by an answer with regard to the matters alleged in the bill showing the title in the parties to the premises. Undoubtedly this would be so if the bill had prayed discovery and propounded interrogatories as to the title. While there was no prayer for discovery and n'o specific interrogatories, nevertheless there is a prayer for answer to every charge and matter contained in the bill, and that may require an answer to enable the complainant to make out his claim of title by means of any admissions the defendants might make. In the ease of a bill alleging a partnership and averring that its existence is made out by certain documents, a plea merely denying the existence of the partnership would be bad, the defendant being required to go further and answer as to all the circumstances insisted upon as evidence of the partnership. 1 Dan., supra,, 619 et seep. In the ease at bar the bill alleges title in the ancestor of the parties in virtue of a conveyance to him of the lands in question, which, conveyance is set out and described. This would seem to be tantamount to the averment of a partnership made out by documentary evidence. However, this question was not raised.

While there is no such practice as a motion to strike out a plea (Wilson v. American Palace Car Co., 63 N. J. Eq. (18 Dick.) 507), unless it be sham and frivolous (Moore v. Moore, 74 N. J. Eq. (4 Buch.) 733), yet, under Corlies v. Corlies, supra, a motion to strike out an insufficient plea may be considered as if the plea had been set down for argument. The plea before me will, therefore, be overruled.


text:
    Lewis Nelson et al. v. Carl P. Errickson, executor of the last will and testament of Augustus Nelson, deceased.
    [Decided March 22d, 1913.]
    While it is a well-settled rule that a court of equity will not assume jurisdiction of a decedent’s estate, where the orphans court has entertained an'accounting, unless special circumstances are shown, yet the following causes,' singly or in the aggregate, amply supply the special reasons, which make it not only the right, but the duty of this court, to interfere with the jurisdiction of the orphans court in the settlement of this account, viz.:
    (а) That at the time of the testator’s death, the executor was indebted to him in the sum of $33,000 upon a bond, secured by a mortgage upon a hotel property, which mortgage debt had matured; that a large amount of interest has accrued, and that the executor has not shown a disposition to .pay the.bonded debt, or to convert the security into cash, nor has he taken steps to foreclose the mortgage, it being manifest that the mortgaged premises are scant security for the debt.
    (б) That the testator bequeathed $15,000 to the defendant, which he, instead of applying to the reduction of the mortgage debt just mentioned, ■appropriated to his and another use.

      (e) That the executor fraudulently compromised a claim of the testator’s housekeeper by paying her $6,000, he well knowing that no moneys were due to her, and that the compromise and settlement was for an ulterior and corrupt purpose.

      (d) That the defendant is indebted to the estate on three bonds of $1,000 each, and in the sum of $5,000, the balance of the purchase price of the hotel property above mentioned, and in other large sums of money upon promissory notes and other evidences of indebtedness, which, presumably, are in the possession of the defendant.
    (e) That $10,000 was bequeathed to the executor in trust, the income whereof was to be paid to Bengta Miller for life, with remainder over to the residuary legatees, and that the defendant has invested the principal of this sum in a mortgage made by him on the estate on lands at Holly Beach, worth not more than ten per cent, above the mortgage.
    On motion to strike out bill of complaint.

      Mr. Harrison H. Yoorhees and Messrs. Wescott & Wescott, for the motion.

      Messrs. Hartshorns, Insley & Leake, contra.

   Walker, Chancellor.

The bill (amended) is filed to compel the defendant, executor of the last will and testament of Augustus Nelson, deceased, admitted to probate by the surrogate of Cape May county, to settle his account as such executor, and for .a discovery of assets. An inventory and appraisement of the personal estate was filed in the surrogate’s office, and on September 17th, 1912, the executor filed a final account in the same office, to which exceptions were filed by the complainant Nelson. Pending a hearing thereof by the orphans court of Cape May county this bill was filed.

It is now moved to dismiss the bill because, it is urged, no special reason is shown why this court should intervene in the settlement of the estate, and because it is a well-settled rule that a court of equity will not assume jurisdiction of a decedent’s estate where the orphans court has entertained an accounting, unless special circumstances are shown. I find in the bill abundant causes for intervention. The bill alleges inter alia:

(a) That at the time of the testator’s death the executor was indebted to him in the sum of $33,000 upon a bond, secured by a mortgage upon a hotel property at Holly Beach, in Cape May county, which mortgage debt matured October 2d, 1912; that a large amount of interest has accrued, and that the executor has not shown, a disposition to pay the bonded debt, or to convert the security into cash, nor has he taken steps to foreclose the mortgage. That the mortgaged premises is scant security for the debt is manifest. It was purchased by the defendant from the testator at an agreed price of $40,000. The mortgage for $35,000 was given in part payment. The balance of the purchase price, $5,-000, remains unpaid.

(6) That the testator bequeathed $15,000 to the defendant which he, instead of applying to the reduction of the mortgage debt just mentioned, appropriated to his and another use.

(c) That the executor fraudulently compromised a claim of ..Bengta Miller, the testator’s housekeeper, by paying her $6,000, he well knowing that no moneys were due to her, and that the compromise and settlement was for an ulterior and corrupt purpose.

(d) That the defendant is indebted to the estate on three bonds .of $1,000 each, and in the sum of $5,000, the balance of the purchase price of the hotel property aforementioned, and in other large sums of money upon promissory notes and other evidences of indebtedness, which, presumably, are in the possession of the defendant.

(&) That $10,000 was bequeathed to the executor in trust, the income whereof was to be paid to Bengta Miller for life, with remainder over to the residuary legatees, and that the defendant has invested the principal of this sum in a mortgage made by him on the estate on lands at Holly Beach, worth not more than ten per cent, above the mortgage.

The right of the residuary legatees (of which the complainant Nelson is one) to have the $15,000 legacy--of the defendant set off against his $35,000 bonded and other debt, and to have a discovery and full disclosure of the circumstances and considerations which influenced the defendant to dissipate $6,000 of the estate, in the settlement of a fraudulent claim, and also a discovery of the indebtedness of the defendant to the decedent, and as well to have conserved their estate in the residnnm, by a foreclosure of the $35,000 mortgage, and by investment in safe security the Miller trust, if their allegations be true, is obvious. In my judgment, the causes for complaint above noted, singly or in the aggregate, amply supply the special reasons, which make it not only the right but the duty of this court to interfere with the jurisdiction of the orphans court in the settlement of this account. Filley v. VanDyke, 75 N. J. Eq. (5 Buch.) 571. The motion to dismiss is denied, with costs.

In his brief the counsel for the defendant supported his argument against the acquisition of jurisdiction by this court largely by denying the allegations of the bill. The falsity of the allegations is of no moment. On this motion I have, as I must, treated the allegations as true.

There was no objection made to the form or structure of the bill. It ought to be amended by adding the remaining residuary legatees as parties. Wyckoff v. O’Niel, 71. N. J. Eq. (1 Buch.) 681.

The bill erroneously recites that annexed to is a copy of the testator’s will. This ought to be added.


text:
    John R. Brown v. Agnes H. Pinniger.
    [Decided March 27th, 1913.]
    1. A bill of complaint alleged that defendant’s husband died intestate, seized of the land in controversy, and that complainant submitted to defendant through an agent an offer to buy the land, provided defendant would consent to the opening of a street in front of the lot and across adjoining lands and would donate sufficient land for the street, which offer defendant accepted, whereupon complainant paid to her agent the full price, and the agent gave complainant the receipt set out in the complaint, under the agreement, took possession of the land and laid out the street and erected a dwelling, and has since been in possession thereof. —Held, that the complaint was based upon the parol agreement of sale, accompanied by a complete performance by complainant and part performance by defendant, and not upon the writing executed by defendant’s agent, receipting for the purchase price, and the statute of frauds was no bar.
    2. The taking of possession of premises under a parol agreement to convey, accompanied by payment of the full price, is such a part performance as to take the case out of the statute of frauds.
    3. Though a vendor only had a dower estate in the premises which she contracted to convey, the contract will be specifically enforced where the vendor subsequently acquired the fee and the vendee entered into possession under the contract with the vendor’s acquiescence.
    On demurrer to bill of complaint.

      Messrs. Durand, Ivins S. Carton, for the demurrant.

      Messrs. Johnston & Conover, for the complainant.
   Walker, Chancellor.

This cause is presented on a demurrer to a bill for a specific performance of a parol agreement for the sale of land.

The bill of complaint alleges that Charles N. Pinniger died intestate, seized of the land which is the subject of this suit, located at Belmar, New Jersey. It was part of a larger tract of land which he owned at the time of his death. He left surviving him the defendant, his widow, and Henry C. Pinniger, a son, who died in infancy. Before the latter’s death the complainant, through a real estate agent representing the defendant, submitted to her an offer to buy the land and to pay therefor the sum of fifty dollars, provided the defendant would consent to the opening of a street in front of the lot and across adjoining lands, and would donate land sufficient for the street and authorize the complainant to do the work of laying it out. The defendant accepted the offer, and thereupon the complainant paid to the agent the full purchase price which, or the benefit of which, the defendant received and retained. The agent gave to the complainant a receipt for the money, which reads as follows:

“Received from John R. Brown, fifty and 00/100 dollars, for purchase money, for triangular plot of ground of Mrs. A. H. Pinniger, on the south side of 13th Ave. near 3T Street, the same to be convoyed free and clear.”

Immediately after concluding the bargain and paying the purchase price, the complainant, in consequence of the agreement and with the defendant’s consent, entered into possession of the land, laid out a street in front of it, and erected a dwelling-house thereon and on other lands adjacent belonging to thef complainant. He has been in possession ever since. After the making of the agreement the son, Henry H. C. Pinniger, died, and the inheritance went to his mother for life, with remainder to his aunt, his father’s sister. Descent act, Comp. Stat. p. 1919 § 4. See also Hickey v. Morrissey, 50 Atl. Rep. 183. The aunt then conveyed the premises to the defendant, who is now the owner thereof in fee-simple. The prayer of the bill is that the defendant be decreed to convey to the complainant the land in compliance with her agreement.

The assigned causes of demurrer are — (a) want of equity; (6) that there is no contract; (c) the contract is within the statute of frauds and perjuries; (d) the defendant’s possession was acquired under an unenforceable contract and without the knowledge and consent of the defendant; (e) the complainant did not lawfully acquire possession and is not now' in possession; (/) the possession is not sufficient to take the contract out of the statute of frauds; (g) the conduct of the com1 plainant is inequitable.

In the argument the counsel of the demurrant relied upon Schenck v. Spring Lake Beach Improvement Co., 47 N. J. Eq. (2 Dick.) 44; Clement v. Young-McShea Amusement Co., 70 N. J. Eq. (4 Robb.) 677; Stengel v. Sergeant, 74 N. J. Eq. (4 Buch.) 20, to sustain his contention. The counsel’s argument is predicated upon the proposition that the bill counts solely upon the writing of the real estate agent acknowledging the payment of the consideration price, as the contract sought to be enforced. If the contract between the parties were circumscribed by and inclusive of the receipt signed by Hudnut, the agent, as counsel insists it is, I might concede that the doctrine of the cases cited were apposite. But I do not read the bill in so restricted a sense. Its purport, although, somewhat obscurely stated, is that the defendant (not Hudnut, her agent) agreed to sell to the complainant the premises for fifty dollars; that the consideration price was paid to the agent and appropriated by the defendant; that the agent gave a receipt for the money, whereupon the complainant, in pursuance of the contract and by the permission of the defendant, went into' possession of the lands, which he has ever since held and upon which he has made substantial improvements.

The "complainant’s right to relief. is founded upon a parol agreement of sale, accompanied by a complete performance on his part and part performance by the defendant. The written acknowledgment of the payment of the purchase price is not the contract, but merely some evidence of it. Under "these circumstances the statute of frauds is of no avail as a bar. It has been repeatedly held by the courts of this state that taking possession of the premises under a parol agreement for their conveyance is such-part performance as will take the case-out of the statute of frauds and support the suit on the agreement. Green v. Richards, 23 N. J. Eq. (8 C. E. Gr.) 32; Cramer v. Mooney, 59 N. J. Eq. (14 Dick.) 164; Krah v. Wassmer et al., 75 N. J. Eq. (5 Buch.) 109; affirmed in 78 N. J. Eq. (8 Buch.) 305.

Much stronger must be the position of an equitable vendee, when it appears, as it does in this case,-that the full consideration price has been paid.

It is further urged by the demurrant that at the time the defendant made the contract to convey the fee, she was possessed only of an estate in dower in the lands, and that the entry into- possession by the complainant thereunder was not such a part performance as to take the agreement out of the statute. The answer to this is that the complainant entered into possession of the land in pursuance of the. defendant’s contract of sale, and not in virtue of her supposed freehold estate. So far as she was concerned, it was a lawful entry and possession. The subsequent acquisition by the defendant of the fee in the premises accrued to the complainant, and enlarged his right of possession, and this having been acquiesced in by the defendant, and she having situated herself so that she could, if willing, carry out the terms of her contract, a court of equity will decree a specific performance. Fry Spec. Perf, § 1SU-

The demurrer will be overruled, with costs.


author: Walkee, Chanceldoe.

text:
    Thomas Maddock Sons' Company et al. v. Ernest Biardot.
    [Decided March 28th, 1913.]
    1. A preliminary injunction will not be granted, on the facts of this case, restraining the defendant trustee from voting in person or by proxy and the company from receiving such vote, on ten thousand shares of stock belonging to stockholders who had paid for the same and for whom the defendant holds them in trust, as such action would work a separation of the voting power of the questioned stock from the ownership.
    2. No rule of law or equity entitles the complainants in this case to divorce from the ownership of the stock the voting power which inheres in that ownership as a matter of right; at least not on any facts shown, nor any law arising upon those facts.
    On application for preliminary injunction.

      Mr. Frank S. Katz‘enbach_, Jr., fox the complainants.

      Mr. Conover English, for the defendant.
   Walkee, Chanceldoe.

After the organization of the “Manufacturers’ Association of New Jersey,” J. B. R.- Smith, Esq., who was counsel for the company, subscribed for ten thousand shares of its capital stock, amounting to $100,000 par value, and paid for the same, and certificates therefor were issued to him. He raised the money wherewith to purchase the stock by a loan on his note and hypothecated the shares as security. The payment of the note was guaranteed by A. B. Williamson, Victor Garrett, Samuel L. Moore, Milton J. Schloss, Henry Amner, Willis L. Brownell, Harry S. Maddoek and D. L. Webster. Afterwards A. B. Williamson and D. L. Webster called at the bank where the note was lying under discount, paid the $100,000 and took it up, and procured, along with it, the certificates for the ten thousand shares of stock. Mr. Smith was not a party to- this transaction, and, upon learning of it, filed a bill in chancery for the recovery of the capital stock. Afterwards negotiations were had between him and Messrs. Williamson and Webster and the company, which resulted in the dismissal of the bill by consent. One of the terms of settlement which, however, is at least of doubtful efficacy in this suit, was that the particular shares of stock should be put in the hands of a trustee and that this trustee should not vote it at any stockholders’ meeting until it had been surrendered for value to bona, fide subscribers who should have paid the par value of $100,000, and also $50,000 surplus called for by subscribers’ agreements then in use. Another term of the settlement was that Mr. Smith should be paid $5,000 in full settlement and compromise of every item of indebtedness or difference between him and the company. When the loan was paid and the stock taken up it was transferred to E. B. Martin. After the settlement with Mr. Smith, who thereby parted with all interest in the stock, and who has, therefore, no interest in the subject-matter of the present suit, Messrs. Moore, Schloss, Garrett and Williamson purchased the stock from Martin in blocks of two .thousand five hundred shares each, for which they each paid $37,-500, being $25,000 foj; each block of stock and $12,500 for the surplus account as required. Their interests being joint they afterwards transferred their stock to Ernest Biardot, who holds the same in trust for them. That they transferred their stock to Biardot is a matter which does not concern the complainants. The only question is, Does the. stock belong to Messrs. Moore, Schloss, Garrett and Williamson? Prima facie it does. They paid for and got it, and paid the premium required to go to the surplus account. They are the beneficial owners.

The prayer of the bill is that Biardot be enjoined from voting this stock in person or by proxy, and that the company be enjoined from receiving such vote.

The complainants rely upon a letter written to Mr. Smith by Mr. Webster, secretary of the insurance company, in its name, September 10th, 1912, in which, among other things, he says:

“In addition to the statement contained in your letter, we are willing that t)he stock standing in the name of B. B. Martin, namely 10,000 shares now held as collateral b'y the Mechanics Trust Company of New Jersey, shall be put in the hands of a trustee, and that this trustee shall not vote the stock at any stockholders’ meeting until it has been surrendered for value to ~bona fide subscribers for the stock of the company who shall have paid in the par value of the stock and paid into the. treasury of the company the extra fifty per cent, over par value, called for by the subscription blanks now in use by the company.”

This letter was sent iu reply to one from Mr. Smith under date of September 7th, 1912, making his offer of settlement, which was afterwards accepted and consummated. As already remarked, he thereupon ceased to have any interest in the company or its affairs, because no longer a stockholder. Assuming that the letter of September 10th, 1912, sent by Mr. Webster in the name of the insurance company became, when accepted, a contract made by one person, Mr. Smith, in favor of other persons, Harry S. Maddock and the Thomas Maddock Sons’ Company, complainants, who are stockholders of the company, and that they may sue on such contract under P. L. 1908 p. 541 § 28, which is doubtful (Styles v. Long Company, 70 N. J. Law (41 Vr.) 301, 305), nevertheless, it cannot be predicated of a certainty that Messrs. Moore, Schloss, Garrett and Williamson, who purchased this stock from E. B. Martin at par and paid into the treasury of the company the required premium, and who, by the way, are already stockholders and directors, are not bona> fide holders of the stock. In view of the facts, the question is only doubtful, and to doubt is to deny. Suydam v. Suydam, 79 N. J. Eq. (9 Buch.) 144 (bottom of p. 149).

In Bache v. Central Leather Co., 78 N. J. Eq. (8 Buch.) 484, a controversy for the control of a corporation, in which a preliminary injunction was sought to restrain certain persons from voting certain shares of stock at a stockholders’ meeting, Vice-Chancellor Howell (at p. Jj.86) said:

“I am of the opinion that it is unlawful, and a gross violation of the public policy of this state, to permit or contract for a separation of the voting power of corporate stock from its ownership.”

The stock in controversy was issued by the company for cash at par. The company it would seem cannot question its validity as an outstanding issue of stock. The only complainants who have any interest in the present controversy are stockholders, and therefore integral parts of the company. The fifty per cent, premium for surplus account has also been paid in. This being so, no rule of law or equity, of which I am aware, entitles tire complainants in this case to divorce from the ownership of the stock the voting power which inheres in that ownership as a matter of right; at least not on any facts shown, nor any law ■arising upon those facts.

The preliminary injunction prayed for must be denied, and the order to show canse discharged, and the stay therein vacated.


text:
    Adolph Weinstein v. Philip Herman et ux. et al.
    [Decided April 14th, 1913.]
    1. Rule No. 166 of this court which provides, amongst other things, that “in cases of sale the master shall be allowed the same fees that by law are allowed to a sheriff on sale by execution,” is equivalent to writing into the rule the entire provision of the statute with reference to a sheriff’s fees or commissions on the proceeds of. a sale conducted by ■him; so that where the property was duly advertised, but before the day of sale the case was settled, the master is entitled to the same percentage on the value of the property which he was about to sell as a sheriff is entitled to, on the amount of his levy or the sum paid on an execution in his hands which is settled without sale.
    2. When, therefore, the parties to a partition suit settle and adjust the matters in controversy, by exchanging conveyances between themselves or going back to the enjoyment of the premises as tenants in common, or otherwise, “and such settlement is made manifest to the officer (master), the one-half of the amount of percentage allowed in cases of sale” should be allowed to the master.
    8. A decree for sale in the hands of a master is equivalent to an exe- ■ cution in the hands of a sheriff. Each is a “process.” We speak familiarly of “process of execution.” An order or decree of this court directing one of its officers to sell property of any of the parties to a suit is equally “process” to all intents and purposes.
    On application to fix master’s fees.

      Messrs. Weinberger & VaneceTc, for the complainant.
   Walker, Chancellor.

This is a suit for partition. On December 26th, 1912, a decree adjudging the respective rights and interests of the parties and ordering a sale of the premises sought to be partitioned, in the presence and under the direction of Eobert I. Hopper,Esq., one of the special masters of this court, was made and filed. The property was duly advertised, but before the day of sale, as the complainant’s solicitors have given the court to be informed, the litigation was amicably adjusted, that, is, the ease was settled. Thereupon the master was ordered to discontinue proceedings under the decree for sale.

A dispute has arisen between the complainant and the master as to the amount to which he is entitled to be paid in the present posture of the case. He has made disbursements for advertising, &c., amounting to $7.1.56, which are not disputed. He claims that he is entitled to the same percentage on the value of the property which he was «about to sell as a sheriff is entitled to on the amount of his levy, or the sum paid on an execution in his hands which is settled without sale, and I think, in this contention, he is right.

The fee bill, sub-title “Sheriff’s,” Comp. Stat. p. respecting the fees of such officer on execution sales provides:

“When a sale is made by virtue of an execution, on all sums not over one thousand dollars,- two per centum on the amount of sales; if over one thousand dollars, and not exceeding three thousand dollars, one per centum on such excess; and if over three thousand dollars, one-half of one per centum on such excess; when the execution is settled without actual sale, and such settlement is made manifest to the officer, the one-half of the amount of percentage allowed in cases of sale.”

The master avers, and it is not disputed, that the property he was about to sell is worth $50,000, and he figures his commissions thus:

Commissions on $50,000:
2% on $1,000 ..................... $20
1% on $2,000 ..................... 20
%% on $47,000 .................... 235
% of .............................. $275...$137.50

By rule Eo. 166 of this court, entitled “Partition,” it is, among other things, provided:

“In cases of sale the master shall be allowed the' same fees that by law are allowed to a sheriff on sale'by execution.”

This, in my judgment, is equivalent to writing into the rule the entire provision in the statute with reference to sheriffs’ fees or commissions on the proceeds of a sale conducted by him. In that enactment, as we have seen, is a proviso that:

“When the execution is settled without actual sale, and such settlement is made manifest to the officer, the one-half of the amount of percentage allowed in cases of sale”

is the commission of the sheriff.

It may be argued that, as the rule in partition abové referred to says, “in cases of sale the master shall be allowed the same ■fees,” &c., there is no intention to give the master anything unless he actually malíes sale. Not so, I take it, for if that is the interpretation to be given to the rule, then if the parties make settlement and the sale is thereby obviated, the master will receive nothing at all, except his actual disbursements. Now, it is perfectly obvious that the master does a great deal of his Work prior to the sale. He has one or more consultations with the solicitor of the complainant, and perhaps other parties, as to the time and place of sale; has-to get np his advertisements and have them posted in certain public places and advertised in certain newspapers. He is required to draw the conditions of sale and make arrangements with reference to his own business for attendance upon the sale. These, and perhaps other performances, are undoubtedly part and parcel of the services for which the percentage of the proceeds of sale are intended to compensate. When, therefore, the parties to a partition suit settle and adjust the matters in controversy, by exchanging conveyances between themselves or going back to the enjoyment of the premises as tenants in common, or how otherwise, “and such settlement is made manifest to the officer (master), the one-half of the amount of percentage allowed in cases of sale” should be allowed to the master. He is as much entitled to it as the sheriff in similar circumstances, and I am of opinion that the law gives it to him.

A decree for sale in the hands of a master in chancery is equivalent to an execution in the hands of a sheriff. Each is a “process.” We speak familiarly of “process of execution.” An order or decree of this court directing one of its officers to sell property of any of the parties to a suit is equally “process” to all intents and purposes. See Wood v. McCardell, &c., Carriage Co., 49 N. J. Eq. (4 Dick.) 433; 2 Bouv. Dict. (Rawles Rev.) 766.


text:
    Samuel Wood and Ephraim T. Gill et al. v. Haddonfield and Camden Turnpike Company et al.
    [Decided April 14th, 1913.]
    1. On a bill filed by trustees under a mortgage securing an issue of bonds, defendant bondholders will not be permitted by way of cross-bill to set up and -charge the trustee-complainants with dereliction of duty and betrayal of their trust with respect to condemnation proceedings affecting part of the mortgaged premises whereby they were taken at a greatly depreciated .sum, causing loss of mortgage security for which the trustees are asked to account.
    2. The defendants’ cause for complaint, i. e., that the trustee-complainants defaulted in the discharge of their duties and consequently were liable in damage to their cestui que trustent (which liability is attempted to be enforced by the cross-bill), is limited to the scope of a foreclosure bill to collect the trust fund.
    3. The scope of the foreclosure proceedings is restricted to the issues arising between the complainants representing the bondholders on the one hand, and subsequent encumbrancers and the holder of the equity of redemption on the other, relating exclusively to their respective status in the mortgaged lands, and is not comprehensive of a final adjustment and settlement of the trust estate.
    4. The new facts which it is proper for a defendant to introduce into a pending litigation, by means of a cross-bill, are such, and such only, as it is necessary for the court to have before it in deciding the questions raised in the original suit, to enable it to do full and complete justice to all the parties before it in respect to the cause of action on which the complainant rests his right to aid or relief. If a defendant, in filing a cross-bill, attempts to go beyond this, and to introduce new and distinct matter, not essential to the proper determination of the matter put in litigation by the original bill, although he may show a perfect case against either the complainant, or one or more of his co-defendants, his pleading will not be a cross-bill,„ but an original bill.
    5. A cross-bill implies a bill brought by a defendant against the complainant in the same suit, touching the matter in question in the original bill. It is brought either to obtain a discovery of facts in aid of the defence to the original bill, or to obtain full and complete relief to all parties as to the matter charged in the original bill.
    6. A cross-bill should not introduce new and distinct matters not embraced in the original bill, as they cannot be properly examined in that suit, but constitute the subject-matter of air original, independent suit. The cross-bill is auxiliary to the proceeding in the original suit, and a dependency upon it. If its purpose be different from this it is not a cross-bill, though it may have a connection with the same general subject. A cross-bill must be confined to the subject-matter of the original bill. If it introduces new matter not embraced: in the original bill it becomes itself an original bill.
    7. The defendants’ cause for complaint, i. e., that the trustee-complainants defaulted in the discharge of their duties and consequently were liable in damages to their cestui que trustent (which liability is attempted to be enforced by the cross-bill), is foreign to the limited scope of a foreclosure bill to collect a trust fund.
    On motion to strike out cross-bill.

      Mr. George J. Bergen, for the motion.

      Mr. Fdivard A. Armstrong, contra.

   Walker, Chancellor.

On October 1st, 1891, the Haddonfield and Camden Turnpike Company executed eighty bonds of $500 each, payable to bearer in twenty years, with interest. The bonds are all outstanding and unpaid. At the same time the company executed its mortgagee to the trustee-complainants in trust, conveying certain lands and premises, franchises, &c., to secure the payment of the principal and interest of the bonds. Default having been made in the payment of interest, a bill was filed by the trustees (in which they were joined by two of the bondholders) to foreclose the mortgage. The West Jersey Traction Company owns seventy-two and the Public Service Corporation owns two of said bonds. All of the bondholders are parties to the suit except an unknown holder of one bond. After the making of the mortgage, the defendants, the traction company and the Public Service- Corporation, acquired interests in the mortgaged premises. They have answered, and by way of cross-bill set up their bondholdings, and charge the trustee-complainants with dereliction of duty and betrayal of their trust, in fact, as is alleged, they failed to properly resist and defend, and on the contrary gave active counsel and assistance in proceedings instituted by the freeholders of Camden county, whereby the turnpike, part of the mortgaged premises, claimed to be worth upwards of one hundred thousand dollars ($100,000), was condemned and taken for a public, highway at the greatly depreciated figure of twelve thousand dollars ($12,000). This loss of mortgage security is charged against the trustees, and for which they are asked to account. The trustee-complainants move to strike out the cross-bill, contending that the complaint set up is not germane to the subject-matter of the original bill, and that if these defendants are entitled to relief, it must be by means of an independent suit.

The complainants5 bill is in the usual form in foreclosure cases. The action is inrem (Wilt. Mort. Ford. § 31; Dolman v. Cook, 14 N. J. Eq. (1 McCart.) 56), operating only upon the mortgaged premises, barring the defendants of their rights in the land by decree and sale and shifting these rights to the proceeds out of which the complainants and defendants are to be paid in the order of their legal priority. The scope of the proceedings is restricted to the issues arising between the complainants representing the bondholders on the one hand, and subsequent encumbrancers and the holder of the equity of redemption on the other, relating exclusively to their-respective status in the mortgaged lands, and is not comprehensive of a final adjustment and settlement of the trust estate, as the defendants contend. In these circumstances, to intrude a demand of the cestui que truslent for discovery and accounting by the trustees, based on malfeasance or misfeasance in office, would be most inappropriate.

Vice-Chancellor Van Fleet, in Krueger v. Ferry, 41 N. J. Eq. (14 Stew.) 432, speaking of the office of cross-bill, sa3rs:

“The new facts which i t is proper for a defendant to introduce into a pending litigation, by means of a cross-bill, are such, and such only, as it is necessary for the court to have before it in deciding the questions raised in the original suit, to enable it to do full and complete justice to all the parties before it in respect to the cause of action on which the complainant rests his right to aid or relief. If a defendant, in filing, a cross-bill, attempts to go beyond this, and to introduce new and distinct matter, not essential to the proper determination of the matter put in litigation by the original bill, although he may show a perfect case against either the complainant, or one or more of his co-defendants, his pleading will not be a cross-bill, but an original bill.”

In Fidelity Trust and Safety Vault Co. v. Mobile Street Railway Co., 53 Fed. Rep. 850, the court in prescribing the limitations of a cross-bill, adopts the language of the opinion in Stonemetz Printers’ Machine Co. v. Brown Folding Machine Co., 46 Fed. Rep. 851, viz.:

“A cross-bill implies a bill brought by a defendant against the plaintiff in the same suit, touching the matter in question in the original bill. It is brought either to obtain a discovery of facts in aid of the defence to tire original bill, or to obtain full and complete relief to all parties as 'to the matter charged in the original bill. It should not introduce new and distinct matters not embraced in the original bill, as they cannot be properly examined in that suit, but constitute the subject-matter of an original, independent suit. The cross-bill is auxiliary to the proceeding in the original suit, and a dependency upon it. If its purpose be different from this it is not a cross-bill, though it may have a connection with the same general subject. A cross-bill must be confined to the subject-matter of the original bill. If it introduces new matter not embraced in the original bill, it becomes itself an original bill.”

This case was one of mortgage foreclosure by trustees in which bondholders intervened to recover damages from the trustees for improper execution of the trust, and although it was reversed in Gasquet v. Fidelity Trust and Safety Vault Co., 57 Fed. Rep. 80, it will be found that the reversal was due to a conception, based upon the comprehensive proceedings below, that the bill was one for a "final settlement and disposition of a trust fund.” The doctrine of the case has not been questioned. It has been cited with approval in Stuart v. Hayden (Circuit Court). 72 Fed. Rep. 402; Kilbourn v. Hirner (Circuit Court), 163 Fed. Rep. 539.

Haberman v. Kaufer, 60 N. J. Eq. (15 Dick.) 271, cited on the brief of the defendants, is readily distinguishable from the case at bar. In that case the complainant sought to defeat bequests as charges upon land of wchich he claimed to be the equitable owner by virtue of a contract of sale from-the testator, which contract he endeavored to enforce. The legatees answered, denying the contract, and by cross-bill prayed a decree that'the land be sold to pay their legacies. Vice-Chancellor Grey, in refusing to dismiss the cross-bill, points out this situation to be one in which the cross-bill is proper, viz. :

"Where the relief sought by the cross-bill affects the same subject-matter dealt with in the original bill, and the denial of relief to the original complainant will, under the circumstances of the case, be substantially a declaration that the affirmative relief sought by the cross-bill should be adjudged.”

The defendants’ cause for complaint, i. e., that the trustee-complainants defaulted in the discharge of their duties, and, consequently, were liable in damage to their cestui que trustent (■which liability is attempted to be enforced by the cross-bill), is foreign to the limited scope of a foreclosure bill to collect the trust fund.

The motion to strike out is allowed, with costs.


text:
    Sarah S. Aldrich et al. v. The Union Bag and Paper Co. et al.
    [Decided April 19th, 1913.]
    1. A preliminary injunction will not be awarded against a corporation and its officers and directors, nor will a receiver pendente lite be appointed directing them forthwith to hand over to such receiver the management and conduct of the company’s affairs, in a suit prosecuted by complainants as stockholders, of the company and holding a very small proportion of its stock, to wit, six thousand six hundred and seventeen out of a total of two hundred and seventy thousand shares of the par value of $100 each issued' and outstanding, where the directors and officers of the company at the time of the filing of the bill had practically no financial interest in the affairs of the company, the entire hoard, including officers, owning about four per cent, of the capital stock, three of the directors owning none, and the gravamen of the bill is that the directors have been guilty of fraud and gross mismanagement of the company’s affairs, it not appearing that the complainants will suffer irreparable injury unless granted the preliminary relief prayed for, and the condition complained of is a culmination of acts extending over a period of years.
    2. The law is settled that a preliminary injunction should not be awarded unless from the pressure of urgent necessity, and also unless the injury to be prevented pendente lite will be irreparable.
    3. For the same reason that a preliminary injunction will not issue, a receiver pendente lite will not be appointed.
    4. To grant a preliminary injunction and appoint a receiver pendente Ute in this suit would practically amount to giving the complainants the full measure of relief to which they may he entitled on final hearing, and courts do not grant such relief.
    Od. application fox preliminary injunction and appointment of receiver pándenle lile.

      Mr. Richard V. Lindabury, Mr. Robert E. McCarter-and Mr. James Boyd Potter, fox the complainants.

      Mr. John J. Treacy, Mr. Gilbert Collins and ,Mr. Thomas Thatcher (of the New York har), for the defendants.
   Walker, Chancellor.

Tlie bill in this case was filed by certain stockholders of the defendant company owning and holding, in the aggregate, one thousand five hundred and sixty-two shares of its preferred stock and nine hundred shares of its common stock, on behalf of themselves and such other stockholders as should come in and contribute to the expenses of the suit. On the hearing of the order to show cause hereinafter mentioned, a petition of certain other stockholders owning three thousand eight hundred and nine shares of the preferred stock of the company and three hundred and forty-six shares of its common stock, was preferred, praying that they might be admitted as parties complainant, and allowed to appear in aid of the prosecution of this suit, and an order was made accordingly. It thus appears that this suit is being prosecuted by the owners of five thousand three hundred and seventy-one shares of the preferred stock and one thousand two hundred and forty-six shares of the common stock, in all six thousand six hundred and seventeen shares. The total amount of the authorized capital stock of the corporation is $27,000,000, divided into two hundred and seventy thousand shares, of which $11,000,000 is preferred stock and $16,-000,000 is common stock. By the last annual report of the company (1912) it is shown that all of this stock is actually issued and outstanding. Thus it appears that a. very small proportion of the stockholders of the defendant company are engaged in prosecuting this suit, and while that, in and of itself is, of course, no bar to relief, it is pertinent upon the question of balancing equities, that is, upon the question whether greater inconveniences and loss will come to the complainants or defendants in the granting or withholding of preliminary relief. It is but just to add that such of the defendants as are natural persons, are themselves the holders of a comparatively small number of shares of the company’s stock, but the corporation itself may be said, in a certain sense, to represent, on this application, the other stockholders who have not become personally involved in this controversy, and they are the vast majority. The company certainly represents them in the sense that their holdings represent proportionally the assets of the company. An injunction to preserve a status quo would be for their benefit, but one to disturb such status in the manner sought by the bill would apparently affect them and the company injuriously. There is a very great difference as to whether an application for an injunction is for a preliminary or a permanent one granted only after final hearing.

The company is engaged in the manufacture and sale of paper bags, paper and pulp, and also in the sale of wood on a very extensive scale and over a wide area.

It is alleged that the directors and officers of the company at the present time' have practically no financial interest in the affairs of the company, the entire board, including officers, owning about four per cent', of the capital stock, three of the directors owning no shares whatever, so far as the records disclose. The gravamen of the .bill is that the affairs of the company have been so mismanaged that the dividends on the preferred stock have fallen from seven per cent, cumulative, provided for in the charter, to four per cent., the last dividends having been passed, and no dividend having ever been paid upon the common stock. A salient averment- is that the directors have conducted the business for the benefit of themselves at the expense of the company by dividing up the country into selling districts and creating selling agencies who have the right to sell its products in those districts at exorbitant commissions; and in practically all, if not all, of the cases, the agency is a partnership or corporation, one of whose members is a director of the defendant company. The prayer of the bill is that the management of the corporation may he taken from its present board of directors and put in charge of a receiver until an honest and capable board can be selected and chosen, and that the agent-directors may be compelled to account and pay into the defendant company all moneys and commissions unlawfully and fraudulently received by them in the conduct of the company’s business, and that the agency contracts may be set aside and that an honest and indifferent board of directors may be selected and put in charge of the company’s affairs, or else that it may be wound up and its assets distributed before they are entirely wiped -out, and also for a'n injunction against the company and its officers and directors restraining them from acting as such until the further order of the court, and also directing them forthwith to hand over to a receiver to be appointed the management and conduct of the company’s affairs and for further or other relief.

On the filing of the bill and affidavits and exhibits annexed an order was made on the defendants requiring them to show cause why an injunction should not issue and a receiver be appointed as prayed for in the bill of complaint. On the return of the order to show cause the matter was heard upon quite voluminous affidavits and exhibits presented on both sides, followed by exhaustive arguments by able counsel. Since the hearing I have given the matter much consideration and have arrived at the conclusion that the application for a preliminary injunction and the appointment of a receiver pendente Ute must be denied.

This is not an application for the appointment of a receiver for an insolvent corporation under section 65 of the Corporation act. Comp. 8tat. p. 15 40; amended P. L. 1912 p. 585. It is, on the contrary, an application for the appointment of a receiver of a company whose directors are alleged to have been guilty of fraud and gross mismanagement. I decide nothing on this question, and it would be purposeless to review the evidence on either side. In any aspect of the case it does not appear that the complainants will suffer irreparable injury unless granted the preliminary relief they seek. The condition complained of is the culmination of acts extending over a period of years, and no harm, certainly no serious harm, can come to the complainants by waiting the few months which may-elapse between this time and the time of final hearing.

It has.been decided again and again that a preliminary injunction should not be awarded unless from the pressure of urgent necessity, and unless also the injury to be prevented pendente lite will be irreparable. This court was recently admonished by the court of errors and appeals in McMillan v. Kuehnle, 78 N. J. Eq. (8 Buch.) 251, not to award preliminary injunctions except to prevent irreparable injury. This cause, in its present posture, does not call for extraordinary relief. Eor the same reason that a preliminary injunction will not issue in this case a receiver pendente lite ought not to be appointed.

Another thing: To grant- a preliminary injunction and appoint a receiver pendente Hie in this cause would practically amount to giving the complainants the full measure of relief to which they may be entitled on final hearing, and, as I understand it, courts do not grant such relief. See National Docks Railway Co. v. Pennsylvania Railroad Co., 54 N. J. Eq. (9 Dick.) 10; Pennsylvania Railroad Co. v. National Docks Railway Co., 53 N. J. Eq. (8 Dick.) 178, 194.

The conclusion I have reached is that the interlocutory injunction-and receiver pendente Hie prayed for should be denied and the order to show cause discharged. The matter has been sharply litigated, and under the usual rale the defendants are entitled to costs.


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    Isaac Bacharach v. Armenia L. Bartlett et al.
    [Decided May 2d, 1913.]
    1. In a suit for a stay of execution upon a judgment against a corporation, until a meeting- of its stockholders can be had to elect a new board of directors so that the company may apply to set aside the judgment, the bill was filed by a stockholder against the judgment creditor and the judgment debtor corporation as defendants, alleging that the complainant was the owner of two thousand out of the whole three thousand shares issued by the corporation and that the judgment was collusive and without legal foundation.
    A cross-bill filed by the defendants added as other defendants, one Carlton Godfrey and the Greater Atlantic Development Company, alleging, as respects the complainant and Godfrey, that said two thousand shares of stock were given to the complainant in trust for himself and the defendant Godfrey as collateral security for loans to the said judgment debtor corporation; that such loans had been repaid and that the col-laterals should be surrendered to the judgment creditor defendant which is prayed may be decreed; and further alleging, as respects the development company, that in order to put the judgment debtor in funds the judgment creditor had first mortgaged and then conveyed her own real estate for the judgment debtor’s benefit, the same ultimately passing from the judgment debtor corporation to the development company, and prayed an accounting from the development company of the consideration paid by it for the said conveyance.
    Upon demurrer to suck cross-bill by the development company — Held, that the demurrer -will be sustained upon the ground that a discovery by the demurrant of the consideration price, and to whom and how paid, and an accounting therefor to the judgment creditor cross-complainant, if unpaid, is obviously in nowise germane to the struggle between the complainant in the original bill and the cross-complainant judgment creditor for the said two thousand shares of stock.,
    2. Neither is the cross-bill maintainable against the development company as a bill for discovery only in aid of the cross-bill against the complainant and Godfrey. For a bill for discovery only has its limitations. The person from whom the discovery is demanded must have some interest in, and the facts sought must be material to, the issue involved in the same, and neither of these essentials 'is present.
    On demurrer to cross-hill.

      Messrs. McCarter & English, for the demurrant.

      Mr. William, M. Clevenger, contra.

   Walker, Chancellor.

The bill of complaint sets forth this state of facts. The complainant is the owner of two thousand of three thousand shares of the capital stock of the W. G-. Bartlett Company. He purchased them from the defendant Armenia L. Bartlett in 1906. The remaining shares are owned by Mrs. Bartlett and her two sons, one of whom is the company’s president. The two sons and the complainant constitute the hoard of directors of the company. The stock was purchased by the complainant upon representations made to him by Mrs. Bartlett as to the financial condition of the company, in which she did not disclose an indebtedness to her of upwards of $300,000. In August of 1912 an action was commenced in tire supreme court by Mrs. Bartlett against the company to recover the debt. Service was made upon her son, the president. Judgment was entered by default against the company for $327,292.98. A writ of /?. fa. issued to the sheriff of Atlantic county, by- virtue of which he intends to sell the Bartlett, building and other realty oí the judgment debtor. The claim on which the judgment is founded is without legal basis. The complainant was ignorant of the debt and of the action until after the judgment was entered. The items comprising the debt are outlawed, with the exception of one of $7,500. The judgment is the result of collusion between the judgment creditor and her son, to impair the value of the complainant’s capital stock. Yo corporate action was taken to consider the advisability of a defence. The prayer is for a stay of execution until a meeting of the stockholders can he had to elect a new directorate (proceedings for which have been begun), to the end that the company may apply to the supreme court to open and set aside the judgment. The Bartlett company and the sheriff are joined as defendants.

Armenia L. Bartlett and the Bartlett company answer jointly, in which they assert the bona fides of the debt recovered by the judgment,-and deny the fraudulent conduct charged in the bill. They cross-bill against the complainant, to which they add Carlton Godfrey and the Greater Atlantic Development Company as defendants.

The cross-complaint recites at great length the various financial vicissitudes of the W. G. Bartlett Company, extending over a period of more than ten jrears, in which the development company had no part, and much of which is unnecessary to be here given in detail. Pertinent features as against the complainant and Godfrey are, that the two thousand shares of stock of the Bartlett company were given to the complainant in trust for. himself and the defendant Godfrey, as collateral security for loans to he made by them to the Bartlett company; that these loans were made and have been repaid, and that the collaterals should he surrendered to Mrs. Bartlett, which is prayed may he decreed. The development company, it is claimed, is involved, because of the following circumstances: To put the Bartlett company in funds, Mrs. Bartlett joined the company in a mortgage to the Guarantee Trust Company for $175,000, by which she encumbered her own realty located in South Atlantic City and in Longport, in conjunction with the Bartlett building. Later, the Bartlett company again being in distress, and to rehabilitate its treasury, Mrs. Bartlett conveyed her equity of redemption in the mortgaged premises to the Bartlett company, with the understanding that this property was to be sold and the proceeds applied in liquidation of the mortgage encumbrances on the Bartlett building. The Bartlett company then executed a new mortgage of $174,000 to the Guarantee Trust Company, the proceeds of which were used to pay certain named obligations, and $103,000, the unpaid balance of the $175,000 mortgage. Subject to the mortgage of $174,000, and for other consideration, the W. G. Bartlett Company conveyed to the development company the South Atlantic City and Longport real estate. The cross-bill alleges that the development company paid all cash for the land which it received by this deed from the W. G. Bartlett Company aforesaid, but that the W. G. Bartlett Company never received a full accounting therefor. From whom the Bartlett company hoped to receive an accounting does not appear, but it may be assumed that the pleader intended the complainant and Godfrey, who were instrumental in effecting the transfer. In this situation the cross-bill prays an accounting from the development company of the consideration paid by it to the Bartlett company for the conveyance, and that if the full consideration price has been paid to discover the amount, what was paid in cash or otherwise, and if otherwise, how, and to whom payment was made; and whether by check or cash.

To the cross-bill the development company demurs, setting up that it is multifarious and that the matters charged and the relief prayed are not germane to the issue raised by the original bill and answer thereto.

I am at a loss to understand upon what theory the cross-bill complainants regard themselves as entitled to this discovery and relief. The purchase price paid or to be paid by the demurrant for the lands purchased by it from the Bartlett company is manifestly foreign to the issue of ownership of two thousand shares of the stock of that company. A discovery by the demurrant of the consideration price, and to whom and how paid, and an accounting to the Bartlett company, if unpaid, for the real estate conveyed by the Bartlett company to the development company, is obviously in nowise germane to the struggle between the complainant and the defendant Mrs. Bartlett for the stock of the Bartlett company.

The office of a .cross-bill has been frequently stated and its appropriateness illustrated by our courts.

In Doremus v. Paterson, 70 N. J. Eq. (4 Robb.) 296, Vice-Chancellor Stevens, quoting from the case of Stonemetz Printers Co. v. Brown & Company, 46 Fed. Rep. 841, says concerning the use of a cross-bill:

“It should not introduce new and distinct matters not embraced in the original bill, as they cannot be properly examined in that suit, but constitute the subject-matter of an original, independent suit. The cross-bill is auxiliary to the proceeding in fhe original suit and dependency upon it. * * * If its purpose be different from this, it is not a cross-bill, though it may have a connection with the said general subject.”

And from Vice-Chancellor Van Eleet’s opinion in Krueger v. Ferry, 41 N. J. Eq. (14 Stew.) 432, 436, as follows:

“The new facts which it is proper for a defendant to introduce into a pending litigation, by means of a cross-bill, are such, and such only, as it is necessary for the court to have before it in deciding the questions raised in the original suit, to enable it to do' full and complete justice to all the parties before it in respect to the cause of action on which the complainant rests his right to aid or relief. If a defendant in filing a cross-bill attempts to go beyond this, and to introduce new and distinct matter not essential to the proper determination of the matter put in litigation by the original bill, although he may show a perfect case against either the complainant, or one or more of his co-defendants, his pleading will not be a cross-bill, but an original bill.” See United States Fidelity and Guaranty Co. v. Newark, 72 N. J. Eq. (2 Buch.) 841.

The counsel of the cross-bill complainant in his brief argues that even though no accounting may be obtained in this suit against the development company, the nature of the facts alleged in the cross-bill is such as to strongly suggest fraud on the part of the complainant and Godfrey, and that under such circumstances the cross-bill will stand against the development company as a bill for discovery in aid of the cross-bill against the complainant and Godfrey. A bill for discovery only has its limitations. The person from whom the discovery is demanded must have some interest in, and the facts sought must be material to, the issue involved in the cause. Story Eq. PI. §§ Sil, MS. Neither of these essentials are present. The demurrer is sustained, with costs.

The pleader in his cross-bill frequently made reference to averments in affidavits filed in this cause, in lieu of pleading the facts disclosed by these affidavits. This was entirely irregular and no consideration was given to these averments.


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    Isaac Bacharach v. Armenia L. Bartlett et al.
    [Decided May 2d, 1913.]
    1. Defendants having- submitted to answer must answer fully, not only as to their knowledge, but also if they have none, then as to their information and belief, if they have any, of each material statement of the bill.
    2. If they have neither knowledge, information nor belief, they must plead the lack in plain unmistakable words.
    3. If their knowledge of the things alleged is derived solely from the cross-bill, they must say so, in which event they need not express their belief thereof.
    4. That the subjects of which a discovery is asked “are matters of public record and easily ascertained,” is not ground for striking out part of an answer for insufficiency. A defendant is not required to put himself to the trouble of gathering- information for the purpose of answering.
    On motion to strike out parts of answers to cross-bill.

      Mr. William, M. Cleveng\er, for the motion.

      Messrs. McCarter & English, contra.

   Walker, Chancellor.

This matter is up on a motion to strike out parts of the answers of the complainant and Godfrey, defendants to the cross-bill, on the ground of insufficiency.

The defendants having submitted to answer must answer fully, not only as to their knowledge, but also if they have none, then as to their information and belief, if they have any, of each material, statement of the bill. If they have neither knowledge, information nor belief, they must plead the lack in plain and unmistakable words. If their knowledge of the things alleged is derived solely from the cross-bill, they must say so, in which event they need not express their belief thereof., Thompson v. North, 67 N. J. Eq. (1 Robb.) 279. Guided by these rules, there is no difficulty in disposing of this motion.'

Bacharach Answer. — The first motion is sustained. The defendant answers that he has no personal knowledge. He should have discovered his information and belief, or if he had none, he should have pleaded it.

The second motion is sustained. The reason set forth in disposing of the first motion applies. The additional ground for the motion, that the subject of which a discovery is asked, “are matters of public record' and easily ascertained,” is not well founded. A defendant is not required to put himself to the trouble of gathering information for the purpose of answering.

The third motion is sustained. The part of the answer to which it is directed is faulty in the manner pointed out in disposing of the first motion.

The fourth motion is sustained for the same reason.

The fifth motion is sustained. The subject-matter relates to the answering defendant’s personal transactions, and of course, is within his knowledge. He should have answered in detail how and to whom the deficiency of money mentioned in the-cross-bill (denied by the'answer) was paid.

The sixth motion is overruled. The answer denies the existence of an agreement to release the mortgage of $174,000 upon a sale being made of certain lands. If this is true, and it must be so regarded on this motion, the answering defendant obviously cannot be called upon to disclose its supposed terms.

Godfrey Answer. — Motion Ho. 1 is sustained. The answer relates to matters with which the defendant is familiar. He must disclose all that is within his knowledge, adding thereto his information and belief as to those things of which he has no knowledge.

Motion Ho. 2 is sustained. An answering defendant cannot acquit himself regarding material allegations of a bill by denying only so much thereof as applies to him. He must give his knowledge, information and belief as to the entire scope of the statement of the bill, to which his answer is directed.

Motion Ho. 3 is sustained. The defendant undoubtedly has intimate knowledge of the affairs referred to in his answer. He must answer fully.

Motion Ho. 4 is sustained. If the defendant has no knowledge which, to say the least is doubtful, he should have stated his information or belief.

Motion Ho. 5 is sustained. The eleventh paragraph of the answer to which the motion applies is argumentative and evasive and lacks the fullness of disclosure required by proper pleading.

Motion Ho. 6 is overruled, for the reason stated in disposing of the sixth motion to strike out parts of the Bacharach answer.

Both parties prevailing in part, no costs will be allowed.