text:
    James B. Nixon v. James Henry Haslett et ux.
    [Decided October 17th, 1908.]
    1. A mortgagor is estopped, in a foreclosure suit by the mortgagee’s assignee, to claim a rescission on the ground of the mortgagee’s fraud, where at the time of the assignment he declared in writing that he had no claim, set-off, &e., against the mortgagee.
    2. Oral as well as written statements by a mortgagor that he has no defences or set-off against the mortgage will estop him to assert one against the mortgagee’s assignee.
    3. Payment by a mortgagor of interest and his promise to pay the principal after assignment of the mortgage and after he discovered fraud by the mortgagee in obtaining the mortgage would not estop the mortgagor to assert such fraud, since the assignment was made without consideration passing from the assignee to him, and since the payment and promise referred to the original debt, but such conduct warrants an inference that the mortgagor’s attempt to rescind the mortgage results solely from an attempt to defeat foreclosure.
    4. If, on a mortgagee’s assignee’s suit to foreclose, the mortgage should be rescinded for the mortgagee’s fraud, the assignee would be entitled to a sale of the land as the mortgagee’s land to reimburse him for the price of the assignment.
    5. In a foreclosure suit by a mortgagee’s assignee, no decree could be had against the mortgagee on the ground of his fraud, where he was not before the court, and no cross-bill had been filed.
    6. The question of the sufficiency of a mortgagee’s misrepresentations as ground for rescinding as to the mortgagor can be tried in a suit by his assignee to foreclose, on an application for the surplus money, if any be raised by a sale of the land or by other appropriate action.

      Mr. Horace F. Nixon, for the complainant.

      Mr. Marlin V. Bergen, Jr., for the defendants.
   Walker, V. C.

This is a foreclosure suit. The bill charges that on July 28th, 1906, the defendant Haslett was indebted to Oliver Bright in the sum of $5,500 and gave his bond and mortgage (his wife joining him in the mortgage) to Bright on two tracts of land in the borough of Holly Beach, Cape May county, to secure the sum mentioned; that the mortgage was duly acknowledged and after-wards on August 1st, 1906, was recorded; that afterwards and on January 27th, 1907, Bright assigned the bond and mortgage to the complainant Nixon; that the whole amount secured by the mortgage, with interest from July 28th, 1907, remains due, whereby, &c.

The defendants answered, admitting the execution of the bond and mortgage, and setting up> that Bright on July 10th, 1906, and for many years previous, had represented the defendant Haslett, and in several real estate transactions in Holly Beach acting as his confidential adviser; that at the time of the purchase by Haslett from Bright of the .property in question (July 10th, 1906) and immediately before that time, as a means to arrive at the value thereof, Bright informed Haslett that one of the properties was rented for $350 a year and the other for $500 a year; that based principally on these statements, Haslett arrived at an estimate of the value of the premises at $11,000; that subsequently Haslett ascertained that the premises were not rented at those amounts, but at the following amounts, one for $250 and the other for $350; that Haslett paid to Bright the purchase price of $11,000, as follows: $5,500 in cash and a purchase-money mortgage for $5,500 (the mortgage being foreclosed); that the property was not worth $11,000 at the time of the purchase (actually made July 28th, 1906), and the mortgage was obtained by fraudulent representations of facts relied upon by Haslett, which led him to overestimate the value of the property.

The answer then proceeds to assert that the defendants deny that the complainant is a bona fide purchaser of the mortgage for value, and that he had full knowledge of the transaction, and is the holder of the mortgage for Bright and is foreclosing it for him.

A replication was filed and on the hearing of the cause the defendants, Haslett and wife, presented a petition for leave to file a cross-bill, and by consent the petition was filed, and leave to file a cross-bill was given. The hearing then proceeded as though the cross-bill were filed. The cross-bill has not yet been filed, and if it were, its prayer would doubtless follow the last averment in the petition, which is that the defendants desire to 'rescind, revoke and set aside the contract of sale on tire ground of the fraudulent representations mentioned, and they assert that such a rescission would set aside the bond and mortgage and would require Bright to refund to Haslett the moneys paid by him to Bright as the consideration of the properties, Bright to be made a party.

The facts developed upon the hearing show conclusively that the complainant is a purchaser of the mortgage for value. In this posture of the case I confess that I do not understand exactly what position the defendants would place the complainant with reference to the mortgage security. Neither by pleading nor by argument have they informed the court on this score.

The bill prayed for an answer without oath, and the answer, very properl}', is not sworn to. The petition for leave to file a cross-bill, avers that the petitioners are informed and believe that the complainant was fully informed of the fraud which had been practiced on them at the time of accepting the assignment, and that he did not purchase the mortgage for any consideration passing from him but is the holder of the same for Bright. This petition is sworn to, and, by consent, was treated as the testimony of the defendant on the subject.

On this question of fraud so far as the complainant, the assignee of the mortgage is concerned, we have the defendant Haslett testifying that he is informed and believes that the complainant was cognizant of it, without stating the source of his information, while the complainant testified that he paid $5,500 for the mortgage and took from Haslett, the owner of the equity of redemption and mortgagor, a declaration that he had no offset against the mortgage debt, which paper was in his hands before he paid the money for the mortgage; that he did not personally examine into the value of the property nor have any consultation with Mr. Bright upon the subject, but became satisfied that the property was worth the amount of the mortgage by accepting the word of Mr. Horace F. Nixon, his solicitor. Mr. Horace F. Nixon was sworn as a witness and said that at the time Bright applied to him to sell the mortgage he represented to him that the properties were rented at $350 and $500, respectively ; that he went to examine the property and found out that the rents were $250 and $300, and also $150 for still another building on the premises. This was before the loan was made, and, notwithstanding the properties were not rented for as high a figure as Bright said they were, he was satisfied with the security and took the mortgage. Besides testifying that he invested $5,500 in the mortgage the complainant- put in evidence the check of his solicitor (for that amount less the solicitor’s charges for searches, &c.), which went to Bright.

It is admitted that the property is not worth the $11,000, the price at which Haslett bought it from Bright, but that it is worth about $8,000, and that the sale went through on the basis that the rent be paid a year in advance, and that Haslett did not discover the true amount of rents until the spring of 1907, which was after the assignment of the mortgage to the complainant.

In Magie v. Reynolds, 51 N. J. Eq. (6 Dick.) 113, a mortgage was procured to be given by fraud and without any consideration. It was assigned for a consideration, and upon foreclosure under a cross-bill by the mortgagors, and owners of the equity of redemption to have it canceled, Vice-Chancellor Pitney held that the complainant’s bill should be dismissed as to them, and that they were entitled to have the bond and mortgage delivered up to be canceled. This upon the ground that the assignee of a mortgage takes the same subject to all defences which the mortgagor had to the debt which the mortgage was given to secure. He held, however, that it is the duty of a person about to take the assignment of a bond and mortgage to inquire of the obligor and mortgagor as to his liability thereon. It will be remembered that this inquiry was made in the case at bar, and that the defendant and mortgagor gave to the complainant a declaration in writing that he had no charge, claim, demand, plea or set-off upon, for or against the mortgage in any way or manner, the declaration commencing with the recital that the very mortgage in question was about to be assigned from the holder to the assignee, who is the complainant, and notice of which assignment had been received by the mortgagor who made the declaration. To allow the defendant’s claim in the face of Ms solemn declaration in writing would be to overthrow the whole doctrine of estoppel with reference to the assignment of mortgages made after inquiry of the mortgagor or person owning the equity of redemption as to whether the mortgage is due so that the intending purchaser can safely take an assignment of it as a valid and existing security.

In Woodruff v. Morris Institute for Savings, 34 N. J. Eq. (7 Stew.) 174, Vice-Chancellor Van Fleet held: “Where one person, by either words or conduct, induces another to believe that he may safely purchase certain property, or take a certain security, and, subsequently, relying on such representations, acquires the property or security, the former will never be permitted, in a court of equity, to overthrow the title so acquired.”

In Magie v. Reynolds, ubi supra, Vice-Chancellor Pitney (6 Dick. 116) remarked that Chancellor Vroom in Shannon v. Marselis, 1 N. J. Eq. (Sax.) 413 (at p. 424), examined the authorities in England and New York and quoted with approbation the language of Chancellor Kent in which he stated that it is the duty of the assignee to make inquiries of the obligor or mortgagor or person owning the equity of redemption before taking an assignment of a bond and mortgage. He cites also Matthew v. Wallwyn, 4 Ves. 118, in which Lord-Chancellor Loughborough observed (at p. 127) : “Persons most conversant in conveyancing hold it extremely unfit and very rash, and a very indifferent security, to take an assignment of a mortgage without the privity of the mortgagor as to the sum really due; that in fact it does happen that assignments of mortgages are taken without calling upon the mortgagor; * * * but no conveyancer of established practice would recommend it as a good title to take an assignment of a mortgage without making the mortgagor a party, and being satisfied that the money was really due.”

It appears that this estoppel will arise not only where a certificate in writing that there are no defences or set-offs against the mortgage is given, but even where oral statements are made to that effect. 20 Am. & Eng. Encycl. L. (2d ed.) 1042.

It is true that the investigation made by the complainant’s solicitor when he was inquiring into the title and value of the property disclosed the fact that the rentals were $750 instead of $850 per annum. But that did not necessarily show that the property was worth less than the defendant gave for it. The complainant, as prospective assignee of the mortgage, was not so much interested in the rental value as in the intrinsic value of the property. The solicitor satisfied himself that the property was well worth an investment of $5,500 on a mortgage, and so 'reported to his principal. Then to make sure of the availability of the security he procured from the mortgagor and owner of the equity of redemption a solemn declaration in writing under seal, that the whole amount for which the mortgage was given was still due and owing and that he had no defence whatever against the payment of the moneys secured by the mortgage. More than this, the defendant Haslett paid the complainant an installment of interest on the mortgage in July, 1907,' which was six months after the complainant had purchased the mortgage on the strength of his declaration of no set-off. Further, on September 10th, 1907, the defendant wrote the complainant’s solicitor as follows: “In reference to paying that $1,000 on account of mortgage, am not able as yet to do so.” Later, and on October 19th, 1907, he wrote again to the solicitor as follows:

“In reply to your letter, of the 18th would say, I expected to have been able to take up the whole mortgage before this and feel confident that I shall do so very soon. Trusting you will show me some leniency in the matter, I remain,” &c.

These letters refer to the mortgage under foreclosure.

The defendants set up that it was not until late in the spring of 1907 that they learned of the fraud that had been practiced on them. It will be remembered that they purchased the property July 10th, and took title July 28th, 1906, and gave the declaration of no set-off January 21st, 1907. The installment of interest was paid to the complainant two or three months after the .discovery of the.fraud, and the letters excusing payment of principal were written some time after that. Of course, the payment of interest and the promise to pay the principal after the discovery of fraud would not work an estoppel, for the assignment had been made without any consideration passing from the complainant to the defendant Haslett, and the payment and promises had reference to the original debt, but, the conduct of Haslett in paying the interest, and promising, as it appears, to pay to the complainant part, if not the whole, of the principal, are circumstances from which it is inferable that the attempt to rescind the contract and throw the property back on Bright and secure a return of the consideration actually paid him, is borne solely of an attempt to defeat the foreclosure of the mortgage. Anyhow, in this posture of the affair, the complainant would still be entitled to have a decree for the sale of the property to satisfy his mortgage out of the land, as against Bright, if not as against Haslett. A somewhat similar situation arose in Magie v. Reynolds, ubi supra. In that case the mortgage was given by Reynolds and wife to one Sumner, who assigned it to one Bloss, and Bloss assigned it to the complainant. As already stated, it was ascertained that the mortgage in its inception was without consideration. The complainant made the fatal mistake of not inquiring of the mortgagor and obligor as to whether or not the mortgage was a valid and subsisting security and what was due upon it, and it was held that the defendants as against the complainant were entitled to a dismissal of the bill and to have the bond and mortgage delivered up for cancellation. Not so with reference to the defendant Bloss, who in his assignment to the complainant covenanted and agreed to guarantee the payment of the bond and mortgage. The complainant was allowed to amend the bill by inserting a prayer for payment by Bloss, and a decree for payment by him was made.

Now, surely, if it were to be decreed that the transaction was fraudulent and should be rescinded and Haslett and Bright restored to their former status, the decree would be, further, that the mortgaged premises be sold as the property of Bright to raise and pay the money due to the complainant, for Bright, having received the mortgage from Haslett, and having sold it to Nixon, could not defeat Nixon’s claim for the money which he, Bright, got from Nixon upon the strength of the mortgage securit}^.

I say, “if” it were to be decreed that the transaction be declared to be fraudulent, because the cross-bill is not in and Bright is not represented before the court by any solicitor, and therefore no decree can be made against him. If Bright’s misrepresentations, 'for such on this record they appear to be, are sufficient in law to rescind the transaction and restore the status in behalf of Haslett, the question can be tried on an application for the surplus money, if any be raised by the sale of the mortgaged premises or by other appropriate action.

There will be a final decree of foreclosure in favor of the complainant against the defendants, with costs.

CASES ADJUDGED IN THE PREROGATIVE COURT OE THE STATE OF NEW JERSEY. MAY TERM, 1908.


source: Caselaw Access Project

author: Pitney, Ordinary.

license: Public Domain

text:
    Mahlon Pitney, Ordinary.
    Edwin Robert Walker, Vice-Ordinary.
    In the matter of the estate of Ann C. Morton, deceased. Stephen C. Barnum, trustee of the estate of Ann C. Morton, deceased, appellant, v. Thomas E. Morton, Fannie Barnum Manning and William Henry Manning, respondents.
    [Decided July 13th, 1908.]
    1. Where lands are conveyed to a trustee with directions to pay the income to one for life, with remainder over, the one entitled to the income is the equitable tenant for life, subject to the duties of life tenant, in-eluding the payment of annual taxes and interest on encumbrances, and, where the trust estate consists in .part of improved property, productive of revenue, and in part of unimproved property producing no revenue, the life tenant must pay the taxes on the unimproved property from the income derived from the revenue producing property, so far as such income extends. .
    2. Testatrix devised unimproved and improved real estate to a trustee to pay the income to a daughter for life, with remainder over; declared that the provisions respecting the payment of rents derived from the unimproved property and respecting the vesting of such property if unsold or the proceeds thereof if sold should be subject to the payment of all encumbrances existing on such property; and authorized the trustee to pay such encumbrances either from the proceeds of such property or from the income thereof. — Held, that the person entitled to the income for life must pay out of the income derived from the improved realty the taxes assessed against the unimproved realty and the interest on the encumbrances thereon.
    3. A trustee under a will whereby testatrix devised her improved and unimproved realty to the trustee to pay the income to his wife for life, with remainder over, and whereby she declared that the rents from the unimproved property and the proceeds thereof, if sold, should be subject to the payment of encumbrances, filed his account as trustee and credited himself with the payment of interest on the encumbrances on the unimproved property and taxes thereon accruing after the death of testatrix. The remaindermen excepted to such items on the ground that it was incumbent on the life tenant to pay such interest and taxes. — Held, that the costs incurred by the remaindermen in the orphans court were properly payable out of the estate, but the estate should not be burdened with the costs of the appeal by the trustee from the decree sustaining the exceptions to the account, for such appeal was in the interest of the trustee individually or in the interest of his wife.
    On appeal from tbe Essex county orphans court.

      Mr. Elvin W. Crane and Mr. William T. Bead (of the New York bar), for tire appellants.

      Mr. John W. Queen, for the respondents.
   Pitney, Ordinary.

Ann C. Morton, late of Glen Ridge, Essex county, New Jersey, died on April 29th, 1901, leaving a will and two codicils thereto, which were admitted to probate by the surrogate of Essex county. She appears to have owned — first, her dwelling-house at Glen Ridge, which, after her death, was sold for the payment of her debts; secondly, an apartment-house in New York City, known as the Third avenue property, situate upon leased land, and thirdly, a tract of unimproved property at Middle ATllage, Long Island, consisting of twenty-six or twenty-seven acres laid out for sale in building plots. The Third avenue property'produces a net income of from $3,300 to $3,500 per annum.

By the second paragraph of the will, testatrix devised all her real estate to trustees for purposes specified in the succeeding paragraphs, and in this paragraph defined the powers and duties of the trustees with respect to collecting and receiving the rents, managing, repairing, building, rebuilding and improving the property, selling and conveying the real estate and leasing the same at their discretion, and investing and reinvesting the proceeds of sale. At the conclusion of the paragraph is the following clause:

“It is my will that any provisions herein made respecting- the payment of the rents derived from my property situated at Middle Village, in the Town of Newtown, County of Queens and State of New York, and respecting the vesting of such property if unsold, or the proceeds thereof if sold, shall be subject to the payment of all encumbrances which may exist upon such property, and I hereby authorize my executors, and trustees to pay off such encumbrances either from the proceeds of such property or from the income thereof as they shall deem best, one-half of such encumbrances to be borne by the principal of the trust hereinafter created for the benefit of the children of my son Thomas S. Morton, and the other one-half to be borne by the principal of the trust created out of the residue of my said estate.”

The third paragraph of the will establishes a trust with respect to “net- rents, income and profits” of tire Middle Village pfoperty. Its provisions are long and involved, and it is not necessary now to quote them. The will in this and other respects was modified by the codicil, with the result that by the provisions of the will and codicils taken together the trustee is directed to pay the net income arising from all the property of the testatrix to- her daughter Amelia A. Barnum, during her life; after her death the Third avenue property and five-eighths of the Middle Village property goes to her children, and the remaining three-eighths of the Middle Village property, upon the death of Mrs. Barnum, goes to the children of Thomas S. Morton, who was a son of the testatrix.

Stephen C. Barnum, son-in-law of the testatrix, was constituted an executor and trustee, and he now’remains sole trustee under the will.

On May 20th, 1907, he filed in the Essex county orphans court his account as trustee under paragraph 3 of the will, to which exceptions were filed by the present respondents. The account and exceptions were referred to Charles F. ICocher, Esquire, master, to hear the same for the court and advise what order or decree should be made therein. After testimony upon the exceptions had been taken, and on June 29th, 1907, the accountant, with permission of the court, filed a supplemental account, which met some of the objections raised by the exceptions to the first account. The master sustained certain other exceptions, and a decree was thereupon made as advised by him.

From this decree Stephen C. Barnum, the trustee, appeals to this court.

Upon the argument here the appellant expressly waived ail questions raised by his petition of appeal except the two following.

The charges admitted by the accountant in the account consisted entirely of the proceeds of sales of portions of the Middle Village property, the gross amount whereof was $54,334.72. Against this he prayed allowance not only for disbursements incident to the sale of the property, such as agent’s commissions, counsel fees and the like, but also for the sum of $6,369.35 for interest paid by him upon a mortgage of $27,500 that had been placed by the testatrix upon the property, the interest thus paid having accrued after her death, and he also' prayed allowance for sums aggregating $2,643.50 paid by him on account of taxes upon the same property that accrued subsequent to the death of the testatrix. To these items, among others, the respondents excepted on the ground that it was incumbent upon Amelia A. Barnum, as life tenant of the entire trust estate created by the will, to pay the interest which accrued upon the mortgage subsequent to the death of the testatrix and also' the taxes accruing upon the property subsequent to the same event, from the income derived by her as life tenant of the entire trust estate created by the will.

The master sustained this contention, and the decree of the orphans court accordingly struck out the credit items of $6,-395.35 and $2,643.50 just mentioned. These two matters are the only ones pressed upon this appeal, all others being expressly waived.

The learned master relied upon the well-settled rule that where lands are conveyed to a trustee, with directions to pay the income to one for life, with remainder over, the person entitled to the income becomes the equitable tenant for life, subject to all the duties of a life tenant, including the payment of annual taxes and interest upon encumbrances, and that where the trust estate to whose income the life tenant is entitled consists in part of improved property, productive of revenue, and in part of unimproved property producing no revenue, the life tenant is bound to pay the taxes on the unimproved property from the income derived by him from the revenue producing property, so far as such income extends. Tie cited Perry Trusts § 552; Combes v. Cadmus, 36 N. J. Eq. (9 Stew.) 382; S. C., 37 N. J. Eq. (10 Stew.) 264; Schulting v. Schulting, 41 N. J. Eq. (14 Stew.) 130; Tuttle's Case, 49 N. J. Eq. (4 Dick.) 259; Murch v. Smith Manufacturing Co., 47 N. J. Eq. (2 Dick.) 193; Brearley v. Molten, 62 N. J. Eq. (17 Dick.) 345.

Counsel for the appellant concede that the general rule is well established, but contend that this case does not come within it, because of the provision above quoted from the second paragraph of the will, which, it is insisted, set apart the proceeds of the sale of the Middle Village property as a specific fund out of which all encumbrances, including future interest upon existing mortgages and future taxes, must be paid in exoneration of the residue of the estate. I agree with the learned master that this clause has not the effect of exonerating the life tenant, Mrs. Barnum, from paying out of the income producing property on Third avenue the annual charges accruing after testatrix’s death upon the unimproved property at Middle Village.

The decree under review awarded a counsel fee to counsel of the exceptants, and ordered that this fee, together with the costs of the proceeding, be paid out of the estate. Respondents in their answer to the petition of appeal set up, under rule 2 of this court, that this portion of the decree is erroneous, and pray that it may be reversed, to the end that the costs below may be charged against the accountant. I think the court was well justified in ordering tire costs and counsel fee to be paid out of the estate.

But I do not think the estate should' be burdened with the costs of the present appeal, which seems to have been taken in the interest of Mrs. Barnum, the wife of the trustee, or else in the trustee’s individual interest.

The decree under review will be affirmed, with costs to be paid by the appellant out of his own estate.


author: Walker, Vice-Ordinary.

text:
    In the matter of the final accounting of Aaron Shedaker, administrator of E. Budd Heisler, deceased.
    [Decided July 17th, 1908.]
    1. The surplusage of the goods, chattels and personal estate of one dying intestate on August 30th, 1902, leaving him surviving a widow and certain uncles and aunts and the descendants of deceased uncles and aunts, is to be distributed — one moiety to the widow and the residue to the surviving uncles and aunts per capita and to the descendants of deceased uncles and aunts per stirpes, under the statute of distribution {P. L. 1899 p. 204 § 169 subd. II.) then in force.
    2. A surviving aunt and certain first cousins of an intestate decedent appealed from an erroneous decree of the orphans court awarding distribution of a moiety of the intestate’s personal property to grandnephews, with the result that distribution will be made to four surviving uncles and aunts and the representatives of fourteen deceased uncles and aunts, and the grandnephews will be excluded. — Held, that as the services of counsel in overthrowing the decree of the orphans court and establishing the right to participate in the distribution of the decedent’s estate by this large class of kindred, were rendered for the benefit of them all, his compensation should not fall upon the few who have sustained the issue for the benefit of the many, but that his fee should be paid out of the fund.
    On appeal from a decree of distribution made by tile Burlington county orphans court.

      Mr. George Gilbert, for the appellants.

      Mr. Ernest Watts, for the respondents.
   Walker, Vice-Ordinary.

On June 5th, 1903, the Burlington county orphans court made a decree for distribution of the balance in> the hands of Aaron Shedaker, the administrator of the estate of E. Budd Heisler, who died intestate August 30th, 1902, which balance was the sum of $2,921.69, and ordered that it be distributed, one-half to Jeanette L. Heisler, the widow; and the other one-half in equal portions of one-fourth each to the guardian of William Heal and Clifford Heal, grandnephews of the decedent.

From this decree Eebecca Sampson, an aunt, and William L. Heisler, Peter K. Heisler, Elizabeth Praul, John H. Adams, George H. Adams and Elizabeth Cooper, first cousins and representatives of next of kin of the decedent, E. Budd Heisler, appealed to this court, and asked that the decree of distribution be reversed, and that they may have relief in the premises.

The decedent, E. Budd Heisler, had ten uncles and aunts on his father’s side, one of whom is living and nine of whom died in his lifetime, and he had eight uncles and aunts on his mother’s side, three of whom are living and five of whom died in his lifetime.

The Heal children to whom distribution was ordered to be made by the decree of the orphans court were grandnephews, children of Charles Hanna Heal, a niece of the decedent, she being a daughter of Charles Heisler, his deceased brother. The nearest relatives of E. Budd Heisler living at the time of his death were his aunts, Eebecca Sampson and Hope E. Adams, and his uncles, Micajah Marter and Edwin K. Marter.

According to our statute of distributions, as it existed when Mr. Heisler died and when the order of distribution was made, being an amendment to the Orphans Court act, approved March 22d, 1899 (P. L. 1899 p. '&04 § 169 subd. II.), in case there be no children, nor any legal representatives of them (and there is not in this case), one moiety of the estate would go to the widow of the intestate (and there is a widow), and the residue equally to every of the next of kindred, who are in equal degree, and those who represent them. According to our present statute upon the subject, being an amendment to the Orphans Court act, approved April 16th, 1908 (P. L. 1908 p. 618 § 169 subd. II.), in this case (there being a widow and no children nor any legal representative of them), the whole surplus fund would be allotted to the widow of the intestate. But this statute does not apply.

The act of 1899 was construed in the Essex orphans court (In re estate of Cornelia B. Halsey, 28 N. J. L. J. 114), and in this court (S. C., sub nom., Smith v. McDonald, 69 N. J. Eq. (3 Robb.) 765), and in the court of errors and appeals (S. C., 71 N. J. Eq. (1 Buch.) 261), the decision of this court being an affirmance of the Essex orphans court, and that of the court of errors and appeals being an affirmance of this court.

The act of 1899, as construed in Smith v. McDonald, gives, in a case such as the one under consideration, one moiety to the wife, and the other to the living next of kin of equal degree and the legal representative of deceased kindred of the same class. The stock entitled to representation are the descendants of the first ancestor in the ascending line common to the intestate and all the surviving next of kin, the next of kin being of equal degree taking per capita), and the descendants of deceased members of the same class taking per stirpes.

Now, in the case under consideration, the surviving uncles and aunts of the deceased intestate are his living next of kin in equal degree, being related in the third degree; whereas, the grandnephews to whom the Burlington county orphans court ordered distribution to be made are related in the fourth degree.

The relationship, of the next of kin to the deceased is, as is-well known, to be traced from the deceased to a common ancestor in the ascending line, and thence in the descending line from that common ancestor to the kindred. Thus, from E. Budd Heisler, the decedent, to his father, is one degree; from his father to his grandfather, is two degrees, and from the grandfather to his children (the brothers and sisters of the decedent’s father), who are the decedent’s uncles and aunts, is three degrees; therefore, as said, the uncles and aunts of the deceased are his next of kin in the third degree. The kinship of the grandnephews to the decedent, to whom the orphans court ordered distribution to be made, is thus ascertained: From E. Budd Heisler, the decedent, to his father, is one degree; from his father to his (decedent’s) brother Charles, is two degrees; from his brother Charles to his (Charles’s) daughter, who was the niece of the decedent, is three degrees, and from her to her children (decedent’s grandnephews), the distributees named in the decree of the orphans court, is four degrees. Therefore, as said, the grandnephews of the deceased are his next of kin in the fourth degree.

Having ascertained that the living next of kin in equal degree to the decedent are his uncles and aunts, it follows under the statute and decisions referred to that distribution is to be made to the uncles and aunts per capita,, and to the descendants of those of them who are deceased per stirpes, and that the grandnephews are to be excluded.

The decree of the orphans court will be reversed and the cause remitted to that court for the making of a decree in conformity with these views.

Under the ruling of this court distribution will be made to the two aunts and two uncles and the representatives of the fourteen deceased uncles and aunts. The appeal in this cause was taken by one of the aunts and seven first cousins of the decedent, the latter being representatives of certain deceased uncles and aunts of the intestate. The services of counsel in overthrowing the decree of the orphans court and establishing the right to participate in the distribution of the decedent’s estate by this large class of kindred, were rendered for the benefit of them all, and his compensation should not fall upon the few who have sustained the issue for the benefit of the many. Therefore a counsel fee, as well as the costs of these proceedings, will be allowed the appellants to be paid out of the fund. Smith v. McDonald, 61 Atl. Rep. 453 (at p. 455), is a direct authority for such allowance. The amount of the counsel fee will be fixed upon application.


author: Garrison, J.

text:
    In the matter of State Mutual Building and Loan Association of New Jersey, in liquidation.
    [Argued June 24th, 1908.
    Decided November 16th, 1908.]
    The rule laid down in the case of Weir v. Granite State Provident Association, 56 H. J. Eq. {11 Dich.) 884, approved by this court in Harris, Receiver, v. Hevins, 68 N. J. Eq. (3 Robb.) 684, does not apply to mortgage debts of borrowing' shareholders of building and loan associations that became due not by the insolvency of such association but according to the terms of such mortgages and under the by-laws of the association by the default of the borrower himself prior to the insolvency of the association. As to debts thus due and collectible by the association as a going concern a receiver afterward appointed proceeds in like manner as the directors of the association might have done if insolvency had not supervened.
    On appeal from a decree advised by Vice-Chancellor Learning, whose opinion is reported in SS Atl. Rep. W8.

      Mr. Harvey F. Carr, for the appellants, the receivers of the association.

      Mr. William N. Clevenger, Mr. Eli II. Chandler and Mr. William S. Casselman, for the several respondents.
   The opinion of the court was delivered by

Garrison, J.

In Fitzgerald v. State Mutual Building and Loan Association, 69 Atl. Rep. 564, we held that trustees elected by stockholders under the provisions of chapter 24 of the laws of 1904 (P. L. 1904 p. 44) were not the proper officers to wind up an insolvent building and loan association and that a receiver for the defendant should forthwith be appointed. This decision was carried into effect in the court of chancery by the appointment of three receivers, who are the appellants in tire proceeding that is now before us, which was instituted by the trustees while engaged de facto in winding up the affairs of the insolvent association. In that capacity the trustees filed a petition, which is the basis of the present proceeding, and before being displaced they also took an appeal from the order made by the court of chancery on th,eir said petition. This appeal the receivers upon assuming the duties of their office adopted and hence they now appear, and properly so, as appellants in the proceeding thus set on foot by the petition of tire late trustees. The petition! was filed by the trustees to obtain the direction of the court of chancery with respect to what credits upon the principal sum secured by mortgages should be allowed for premiums paid by the shareholding mortgagors — first, in cases called in the petition class No. 1, where the borrowing shareholder had fully paid all dues, interest and premiums up to and including those for the month of April, 1901, that being the date of liquidation stated in the petition, and secondly, in cases called class No. 2, where the borrowing shareholders prior to such date of liquidation had defaulted in the payment of said dues, interest and premiums, so that by the conditions of their mortgages and under the by-laws of the association the principal sum of said mortgages had become due and payable. The petition further set out the facts of three concrete cases, one falling under class No. 1, and two falling under class No. 2, with respect to which latter cases the petition states that “under the terms of said bonds and mortgages the association has exercised its option of declaring the full principal sums of the said mortgages as due and payable.” By a stipulation all of the facts stated in the petition are admitted to be true, which includes the date of liquidation. There is, furthermore, a general statement that a large part of the assets of the association consists of mortgages that fall within one or the other of the two classes, and the brief of counsel for the appellants contains the unchallenged statement that mortgages aggregating $125,000 fall within class No. 2, and that as to these mortgages, the item of premium alone amounts to $45,000. But whether the concrete facts respecting these mortgages are identical with those of the two specified cases set forth in the petition we are not informed, nor are the shareholding mortgagors other than those in the two specified cases brought info court as parties defendant.

It is evident, therefore, that apart from the two specified cases the direction sought by the petition was of a general character and "it is equally evident that what the petition sought to ascertain was whether the rule laid down in the court of chanceiy in the case of Weir v. Granite State Provident Association, 56 N. J. Eq. (11 Dick.) 234, and approved by this court in Harris v. Nevins, 68 N. J. Eq. (2 Robb.) 684, was applicable to class No. 1, where liquidation other than by insolvency was being enforced, but chiefly whether this rule, if applicable to class No. 1, was also to be applied to class No. 2.

The first of these questions} which was answered by the court below to the effect that class No. 1 came within the rule laid down by Harris v. Nevins, is not now before us, the appellants having expressly abandoned their appeal as to that part of the order. Mortgages coming within this class are therefore to be allowed credits in conformity with the rule laid down by the cases that have been cited.

Upon the second question, which was the chief one and is the onty one before us on this appeal, the learned vice-chancellor reached the conclusion that the rule applicable to class No. 1 should also be applied to class No1. 2; that is, mortgages that by the non-payment of dues, interest and premiums had before the date of liquidation become due and payable according to the conditions of the said mortgages and the by-laws of the association, and the conclusion thus reached is embodied in the order appealed from, which in its direction makes no distinction between the two classes of mortgage debts. In reaching this conclusion we think that the learned vice-chancellor fell into error and that his error consists in his failure to observe that the two classes of mortgages were clearly to be distinguished upon the essential features that constituted the basis of the equitable rule laid down in Weir v. Granite State Provident Association and Harris v. Nevins. The equitable considerations that gave rise to the rule laid down in these cases were, as stated by Vice-Chancellor Reed in the earlier decision, that the premiums had been paid by the borrowing shareholder in consideration of the complete execution of a contract that permitted him to pay his debts by the application of Iris matured shares, and when the premature termination of tire existence of the company prevented the borrower from thus liquidating his debt, the contract in consideration of which he had paid his premiums had failed. The gist of this equity of the borrowing shareholder, therefore, was that his debt had become not only prematurely collectible in invitum, and by the effect of insolvency, but that it had thus become collectible in a way and at a time entirely different from that for which he had paid the consideration represented by his premiums. The contractual relations of the parties as evidenced by their mortgages and by the by-laws of the association affording no legal rule applicable to this juncture, recourse to some equitable mode of adjustment was manifestly proper, and the rule laid down in the two cases cited was the result. But in the case of a borrowing shareholder whose debt has become due not in invitum by the effect of insolvency, but according to its own terrqs and solely by the act of the borrower himself there is nothing to call for the application of any rule other than that provided by the contract of the parties for just such a contingency. In such cases the fact that enforced liquidation or insolvency supervened, after the borrower’s debt had by its own terms and by his default become due, no more gives him a standing in equity than would the breakdown of a train before reaching its destination create a legal right in a passenger, who had voluntarily left the tfain before the breakdown occurred. The two classes of cases are, therefore, distinguishable upon the precise feature that invokes the equitable rule in class No-. 1, while relegating class No. 2 to the terms of its legal contracts. As to mortgage debts, therefore, that were thus due by the default of the debtor and collectible by the association while it was a going concern, the appellants as receivers stand in precisely the same situation as the directors of the association stood when the debts fell due. As to such cases no equitable rule is to be applied, for the simple reason that the mere breach of a legal contract, nothing more appearing, gives rise to no- equitable considerations of any sort. If circumstances other than tiróse stated in the petition before us should call for equitable treatment, such eases must be dealt with as they arise and upon their own peculiar facts and when the parties in interest are before the court. Upon the only question now before us tire receiver should be directed to proceed to tire collection of all mortgage debts that were due from borrowers prior to the date of liquidation precisely as if enforced- liquidation or proceedings in insolvency had not supervened. Specific direction in such cases is not within the purview or prayer of the petition and is not presented by this appeal. If foreclosure proceedings are defended, or if a mortgagor files his bill to redeem, as was done in the Weir Case, the facts constituting such defence or such suit to redeem may be dealt with as they arise, for, as was observed by Vice-Chancellor Eeed in the Weir Case, the right to foreclose and the right to redeem are so far reciprocal that questions material to the ascertainment of the debt due on the mortgage may be as well settled in one form of action as in the other.

The order of the court of chancery should therefore be reversed to the end that it may be modified so as to apply in its present form only to mortgages that had not, while the association was a going concern, become due and payable by the mortgagor’s default in the payment of dues, interest and premiums. As to mortgages that had thus become due by the default of the shareholder as aforesaid, the receivers should be directed that in collecting or computing the amounts of such mortgages they should proceed in like manner as the directors of the association might have done if enforced liquidation or insolvency had not supervened.

For affirmance — None.

For reversal — Tins Chancellor, Chiee-Justice, Garrison, Swayze, Reed, Trenci-iard, Parker, Bergen, Voorhees, Mjnturn, Bogert, Yredenburgh, Yroom, Green, Gray, Dill — 16.


author: Swayze, J.

text:
    Edmund J. Parker, trustee in bankruptcy, complainant, v. Annie E. Travers et al., defendants.
    [Submitted June, 1908.
    Decided November 16th, 1908.]
    1. When to a life estate, with remainder over of what may be undisposed of, the will adds a power of disposition, the property right of interest of the life tenant is not thereby enlarged, but the devisee takes the life estate only with a power of disposal, to be exercised by her during the continuance of the life estate, and for her benefit.
    2. Testator devised and bequeathed all his property not disposed of to his widow, with power of disposition, the remainder as to all property not disposed of by the widow to testator’s daughter in case she survived the widow, and in the event of the widow marrying again she should have only one-third of the property remaining, the balance to be invested for, and to be' paid to, the daughter on her attaining majority. The widow conveyed all the real estate devised "by the will to B., to whom she was afterwards married, and he, immediately after the conveyance, conveyed to his son, who reconveyed to the widow. — 3eld, that, on the widow’s remarriage, the daughter acquired an absolute estate in two-thirds of the land, and that the widow’s subsequent deed to the daughter was only effective to transfer an undivided one-third thereof.

      3. Where a suit by a bankrupt’s trustee to set aside a conveyance by the bankrupt to her daughter was based entirely on the charge that the conveyance was to hinder and delay E., who was the only real creditor in the bankruptcy proceedings, E., having accepted from defendant the balance due on a loan for which she held the title to the land, and having thereupon conveyed the land to defendant, was estopped to claim that a conveyance of the bankrupt’s alleged interest in the land to defendant was fraudulent as to her.
    4. Where a bankrupt owned the.equitable title to certain land, subject to an indebtedness, which she paid, and then induced the creditor to convey the property to defendant, her daughter, within four months prior to the filing of the bankruptcy petition, such conveyance was, in effect, a conveyance by the bankrupt, and was voidable at the instance of her trustee.
    o. Where defendant participated with her mother, a bankrupt, in procuring transfers to her' to hinder and delay the mother’s principal and only creditor, the conveyance was voidable, though given in satisfaction of an honest debt.
    C. Where a bankrupt only owned an undivided one-third of certain land, which she fraudulently conveyed to defendant, and the bill of the trustee in bankruptcy to set aside such conveyance, and the answer, admitted that defendant received $6,370 from certain insurance on buildings destroyed by fire, after paying $4,630 in discharge of mortgage liens, for which the policies had been pledged as collateral, defendant was only chargeable with one-tliird of such sum, and not one-third of the entire amount of the insurance, and the error was not cured by the fact that the decree only vacated the conveyance subject to all valid mortgages existing at the time it was made, where the mortgage debts had been discharged and were not reinstated by the decree.
    7. A decree should not bo’ disturbed because it imposed a lien on defendant’s land for the amount found due complainant, where no such objection -was contained in defendant’s reasons for appeal.
    5. Where, complainant, a bankrupt’s trustee, did not appeal from the part of a decree which charged against defendant the value of furniture transferred by the bankrupt, complainant’s objection that the amount so charged was less than the conceded value of the furniture in defendant’s answer would not be reviewed.
    9. Where a bankrupt’s trustee was successful in setting aside a fraudulent conveyance made by the bankrupt to defendant, the trustee was entitled to costs.
    10. Where defendant was obliged to appeal to correct a decree against her which was improper, she was entitled to costs on the appeal, including cost of printing, though complainant was successful in the suit.
    On appeals of complainant-defendant Annie E. Travers, and defendant Sophie V. O’Brien, from a decree of the court of chancery advised by Vice-Chancellor Bergen, who delivered the following opinion:

      “James Travers died November 1st, 1883, testate, leaving him surviving a daughter, Anna E. Travers, and a widow, Sophie Y. Travers, who on August loth, 1889, married William H. O’Brien, how deceased. When he died, J ames Travers was seized of certain real estate, situate at Point Pleasant, in this state, which may be sufficiently described as lots Nos. 4, 5, 289 and 290, on the map of lands of the Point Pleasant Land Company, and also of an equal undivided half part of lots numbered 17 and 18 on said map. He also left personal property, the amount of which is in dispute, but as it, except the portion used by the widow, and not accounted for, about which the complainant raises no question, was used to improve the real estate, and is devised in the same manner as it is, the question of the amount of the personal estate will only become important should it be necessarjr to determine whether a reasonable consideration was paid by the daughter to the mother for the conveyance of the real estate which the present proceeding assails. That portion of the will of James Travers pertinent to the issue devises and bequeaths:
    “ ‘To my wife while she remains my widow, all of my property of every description and character not hereinbefore disposed of, with full power of disposition and alienation provided, however, that in case my daughter survives her, that all the property not disposed of prior to my wife’s decease, shall be and become the property of our said daughter, and in the event of my wife contracting another marriage, then it is my will that she shall possess and enjoy as of her own right, only one-third of the property then remaining, and that the other two-thirds shall be invested and held in trust for my daughter Annie, and paid to her upon attaining her majority, and furthermore should my daughter die without leaving child or children, it is my will that any property which she may be entitled to or enjoy under this will, shall go to my two sisters, Mrs. Sidney Wiginia Mitchell, and Mrs. Mary Wynee, their heirs and assigns, share and share alike.’
    “Tlie widow was appointed -executrix of the will, which she caused to be probated, and took upon herself the execution thereof, but no inventory was ever made by her of the personal estate, nor has she accounted for the same, either in the orphans or prerogative court. In 1884 the defendant Sophie Y. Travers erected a cottage at a cost of $6,000 or $7,000 on lots 289 and 290, manifestly using a portion of the personal estate of her deceased husband for that purpose, as she had no other funds, and on August 13th, 1888, she individually, and not as executrix, conveyed all of the real estate devised by the will of her husband to William H. O’Brien, to whom she was afterwards married, and he, on the day following, conveyed the same lands to his son, Bryan O’Brien, who on August 15th, 1888, as admitted in defendant’s answer, reconveyed the same to her. In 1892 she caused to be erected a building on lots 4 and 5 to be used as a hotel, at a cost which not only exhausted all of the personal property of the Travers’ estate remaining, admitted by Mrs. O’Brien to have been about $18,000 or $20,000, but required the raising of additional funds, which was accomplished by mortgaging the real estate. In 1895 lot 17 was sold by proceedings in chancery, and purchased by Mrs. O’Brien, she thus acquiring the outstanding title which was not vested in her former husband. On February 23d, 1905, Sophie V. O’Brien conveyed to the defendant Annie E. Travers all of her interest in the foregoing lands, as well as in another tract, to be hereinafter referred to. At the time this conveyance was made Mrs. O’Brien was indebted to one Elizabeth O’Brien, a sister of Mr. O’Brien, and judgments had, on February 10th, 1905, been entered against her therefor in the court of common pleas, in the county of Philadelphia, in the State of Pennsylvania, for over $6,000. The judgments were assigned to a Mr. Roney, residing in Camden, New Jersey, who on February 15th, 1905, commenced an action in the supreme court of this state to recover the amount due thereon, which action was defended, and, as stated by counsel on the argument, yet remains undetermined. Having transferred all of the property to her daughter, Mrs. O’Brien, on September 8th, 1905, filed her petition in bankruptcy in the United States district court for the district of New Jersey, from which it appears that the only debts then owing by her, outside of a few traders’ accounts, amounting to $165, and an alleged claim of the daughter, was the debt due on the O’Brien judgments. The judgment indebtedness and the claim of the daughter being presented, proved and allowed in the bankruptcy proceedings, the complainant, as trustee in bankruptcy, filed his bill of complaint in this cause, charging that the conveyance heretofore referred to was contrived and carried out for the purpose of hindering and delaying creditors, and therefore void, upon which a prayer is rested to have the conveyance declared fraudulent and void, and the land decreed to be the property of the debtor, and made subject to the payment of her debts. As to the property now under consideration, the first question to be determined is what was the state of the title which was conveyed to the daughter in 1905, she claiming that on the marriage of her mother two-thirds of the property passed to her, and that she paid full value to her mother for the other one-third. The insistment of the complainant is that, by virtue of the conveyance from Mrs. Travers and the reconveyance to her, the absolute title vested in her, and that any right which the daughter took under the will of her father, in the event of remarriage, was defeated thereby, because that act was a disposition of the property, and under the terms of the will vested an absolute estate in the mother, so that nothing remained of the estate to go to the daughter when she, the mother, remarried.
    “The rule is well established in this state that, when to a life estate, with a remainder over of what may be undisposed of, there is added a power of disposition, the property right or interest of the life tenant is not thereby enlarged, but the devisee takes a life estate only, with a power of disposal to be exercised by the devisee during the continuance of the estate, for his benefit. Robeson v. Shoiwell, 55 N. J. Bq. (10 Dick.) SIS. The interest in the real and personal property of James Travers, which his widow acquired under the devise to her above set out, was a life estate, determinable upon her remarriage, with the power of disposal and alienation during the continuance of the estate, subject to a gift over of what remained undisposed of at her death should she remain unmarried, and also subject to the condition that, in the event of her remarriage, she should take in her own right one-third of the property then remaining, and invest the residue for the benefit of her daughter, to be paid to her when she became of age. It is admitted by the complainant that two-thirds of the personal estate remaining in the hands of the widow when she married immediately became a trust fund for the benefit of the daughter, but he insists that, as to the real estate, the widow, having exercised her power of disposal, thereby became entitled to an absolute estate and title in the lands, thus defeating the gift over to the daughter which was to become effective at the termination of the life estate. I find myself unable to accept this result, for, assuming that the contention of the complainant that the conveyance was executed for the purpose of defeating the gift over is correct, it could not be supported as a bona fide exercise of the power conferred, which must always be executed in good faith, looking to the carrying out of the expressed intention of the party creating the power. By the gift over of what remained undisposed of at the death of the life tenant, and the substituted disposition on the remarriage of the widow of what then remained, the testator plainly indicated that it was his intention that his widow should exercise the power of disposal and alienation to such extent as might be required for the beneficial enjoyment of the property during her tenancy, but clearly a transference of title which did not alter the identity of property or owner, for the purpose of defrauding the remainder-man, was nqt such an exercise of the power of disposal granted as to change a life estate to a fee-simple, nor do I think it would have made any difference in this case if there had been an actual sale and the property converted into money, for the proceeds thereof which remained in her hands undisposed of when the tenancy ended would have been a part of the estate That remains,’ and be subject to the alternative bequest. The purpose for which the conveyances were made does not appear in the deeds, and, although the intention of the grantor must, if possible, be gathered from the writing, parol evidence is admissible to show the object for which the power was exercised, where the deed does not disclose it, and on this subject the life tenant, Mrs. O’Brien, testified that, before her second marriage, Mr. O’Brien, her intended husband, who was a lawyer living in Philadelphia, advised her to alienate the property, before her marriage, “otherwise, if I kept the ground just as it was, in my name, that I would not be able to sell until Annie became of age, and that the property might depreciate.’ She also testified that she was advised that the transfer would not affect Annie’s interest, for by her father’s will she would be entitled to two-thirds of the property as soon as she (the mother) married. This evidence negatives the claim of the complainant that the conveyance was intended to be, and was, an exercise of the power of disposal for tiie purpose of conversion, but, on the contrary, shows that it was an alienation of the property for .other purposes, and was not intended to change the character of the estate then held by the life tenant. I am satisfied that in 1905, when the eonvej'ance was made to the daughter, she was entitled to have two-thirds of the property of which her father died seized, which is described as lots 4, 5, 289 and 290, conveyed to her without consideration, and that her mother was then seized, in her own right, of the one-third part of the same land.
    “In addition to the foregoing other lands, being lots 2 and 3 on -said map, were conveyed by the same deed to Annie E. Travers, the status of which will now be considered. In 1891 these lots were conveyed by a Mr. Lomas to William H. O’Brien, and the consideration was paid with $3,000 borrowed by O’Brien from Elizabeth, his sister, as appears from a paper-writing, in the nature of a declaration of trust or equitable mortgage, by the terms of which he and his wife, Sophie, agreed to convey said lots to Elizabeth upon default in payment of the sum so loaned. William E. O’Brien held the legal title to this land when he died, and by his last will devised it to his sister, Elizabeth. It is claimed by the answer of both defendants that the property belonged, in equity, to Sophie, subject to the payment of the loan; that of this she had paid $2,000, although the legal title was vested in Elizabeth, who, on May 22d, 1905, conveyed the lots to the daughter. As the equity of the present proceeding is based entirely upon the charge that this conveyance was contrived for the purpose of hindering and delaying Elizabeth, who is the only real creditor in the bankruptcy proceedings, in the collection of debts which were then in existence, I am of opinion that, as sire accepted from the daughter the balance that was due on her loan, and conveyed to that daughter this particular land with full knowledge of all the conditions, she is estopped by her deed, and cannot justly complain that a conveyance, which she made with full knowledge of the situation, is a fraud perpetrated by the defendants against her, and shall advise that the bill be dismissed as to lots 2 and 3. As to lots II and 18, of which the testator died seized, it appears from the pleadings that they were sold in partition proceedings, and lot 17 was purchased by the mother, and by her conveyed to one Yan Note in order that he might malee a sale of it, but substantially, as I construe the evidence, for the purpose of securing to him, out of the proceeds of such sale, a debt of $200. This debt the daughter paid, and he conveyed the lot to her August 3d, 1905. It is not denied that the property then belonged equitably to Mrs. O’Brien, and the conveyance by Yan Note was, in effect, a conveyance by Mrs. O’Brien, and, as the transfer to the defendant Annie B. Travers was made within four month's of the filing of the bankruptcy petition, it is clearly void as against the trustee in bankruptcy, under the Bankruptcy act, and if this conveyance is a hindrance to the application of the property to the payment of the bankrupt’s debts, it should only be allowed to stand as a mortgage to secure the amount paid by the daughter, viz., $200. As to lot 18 it is impossible to ascertain, from the pleadings or evidence, what became of it. It was sold in partition proceedings at the same time lot 17 was sold, but who became the purchaser, or where the title is now vested, I am unable to discover, and certainly in the present state of the proceedings no decree can be made regarding it. There yet' remains to be considered a tract of land described in the pleadings as lot No. 1. This lot was purchased November 16th, 1895, by the defendant Sophie O’Brien, and on January 21st, 1905, she conveyed it to her daughter, without any consideration other than an alleged indebtedness from the mother to the daughter on account of her interest in the estate of her deceased father. It also appears by the pleadings that, when the conveyance of the real estate was made, the mother also transferred to the daughter a considerable quantity of furniture, which the daughter admits was of the value of $1,500. The bill charges that it was of much greater value, but no evidence was produced upon which I can base any reliable estimate of its value, and I have concluded to accept the figure admitted by the defendant. It therefore appears that at the time of this conveyance the mother was possessed of an equal undivided one-third interest in lots 4, 5, 289 and 290, and the whole of lot No. 1, and furniture to the value of $1,500, all of which was conveyed to the daughter in satisfaction of what they estimated to be her interest in her father’s estate.
    “I shall not undertake to analyze the evidence for the purpose of ascertaining what would have been due to the daughter on a strict accounting, because, in my judgment, the transfer of the mother’s interest in the real estate last referred to, and also in the furniture, was contrived and carried out for the purpose of hindering and delaying Elizabeth O’Brien, the creditor of the mother, in the collection of her debt. The grantee has been above the age of twenty-one j^ears for a long time, and, although she now testifies that she made repeated demands upon her mother to account, she never took any steps looking to that end until the mother was being pressed for the collection of a debt, whereupon the mother conveyed, and the daughter accepted, all of the property which the mother possessed, without, so far as this case shows, any accounting between them, and the only consideration which the daughter now sets up was an unadjusted claim, which, it was estimated, was more than the value of the property, and, although since that time the state of the alleged account has been reduced to figures, there was no proof that previous to, or at the time of, the conveyance there was any attempt to ascertain the true condition of their respective relations to the estate of the testator. But even if the amount due had been correctly ascertained, and the transfer made in consideration thereof, the fact that the daughter participated with the-mother in procuring the transfers for the express purpose of hindering and delaying the principal and only creditor of the mother in the collection of her debt is sufficient to avoid the conveyance, even if given in satisfaction of an honest debt. That such was the purpose of the daughter is conclusively shown by a letter which the daughter wrote but a short time before the transfer to her attorney, Mr. Peterson, of which the following is important :
    “ T had suggested mother putting her property in my name, and then-having herself declared bankrupt. In that case, if she were forced to-pay the notes, she would be exempt, would she not? I wish you would advise me of the wisdom of this.’

      “This letter plainly disclosed that the daughter had suggested to her mother the putting of the title of her property in the daughter’s name to avoid the payment of the notes held by Elizabeth O’Brien. There was no pretence that the property was to be conveyed in satisfaction of any debt. On the contrary, it plainly disclosed a scheme by which the property was to be put beyond the reach of the creditor and of bankruptcy proceedings, and could have had no object other than preventing the creditor, then pressing her claim, from obtaining satisfaction out of the property which the mother had held in her own name for a great many years, upon the strength of which she had undoubtedly obtained credit. It was a bald declaration of a fraudulent purpose, which was subsequently carried out, and the parties should not be permitted to enjoy its benefits.
    “I will advise a decree declaring void the transfer so far as the mother’s interest in the property is concerned, subject to the mortgages on the lands when transferred, and also requiring the defendant Annie E. Travers to account for $1,500, the admitted value of the furniture. It appeared during the trial that one of the buildings had been destroyed by fire since the conveyance, and that the defendant Annie E. Travers has collected the insurance. Of this sum she will be decreed to pay one-third to the complainant as representing her mother’s interest therein.”

      Messrs. Wilson, Carr & Stackhouse, for Parker.

      Mr. Frank Durand and Mr. John J-I. Backes, for Annie E. Travers.
   The opinion of the court was delivered by

Swayze, J.

There are cross appeals in this case. As far as concerns the questions presented by the petitions of appeal, we agree with the views expressed by the vice-chancellor. Through inadvertence the decree fails to follow the opinion in some respects, and in others seems to require explanation.

1. It decrees that the deed convejdng lots 4, 5, 289 and 290 be set aside, annulled, and made void. The opinion makes it clear that it is only void as to the equal undivided one-third of Sophie Y. O’Brien. The deed is not printed in the record, but it seems to have conveyed only the undivided interest of Sophie Y. O’Brien. Although she had. on the face of the earlier deeds a paper title to the Whole, it is clear that in equity she was trustee as to two-thirds for Annie E. Travers, even if the conveyances by which the title was conveyed to her in 1888 were efficacious to pass the legal title. If they were not efficacious for that purpose, Mrs. O’Brien had a legal title to one-third only. We regard the deed of January 24th, 1905,' as conveying only one-third, and with this explanation, the decree in this respect is affirmed.

2. The decree adjudges that the complainant is entitled to one-third of $11,000, moneys collected by Miss Travers for insurance on the buildings that were destroyed by fire, and fixes the amount with interest at $3,710. The bill charges and the answer admits that she received (after paying mortgage liens amounting to $4,630, for which a part of the insurance policies had been pledged as collateral security), the sum of $6,370. She should be charged only with one-third of this amount. The mistake in the decree is not cured by the fact that the deed is set aside, subject to the lien of all valid mortgages existing at the time of the conveyance; the mortgage in question seems to have been satisfied and the decree does not attempt to reinstate it, but in so many words adjudges a money liability against Miss Travers for an amount which makes no allowance for what was paid on the mortgage. This mistake requires a reversal of the decree upon the appeal of Annie E. Travers.

3. The decree adjudges that the complainant have a lien, for the amount found due, upon the interest of Annie E. Travers in the land. Her counsel argues that such a lien is not authorized, but in the reasons for reversal stated at the conclusion of her petition of appeal, no such reason is assigned. We think, therefore, that we should not disturb the decree in this respect.

4. The complainant urges that the amount charged against Miss Travers for the value of the furniture is less than its value as conceded in the answer. We think it unnecessary to consider this question, since the complainant does not appeal from this part of the decree.

Sophie Y. O’Brien’s rights do not seem to be affected by the decree, except as to the costs. The controversy was between the complainant and the defendant Travers. Since the complainant prevailed in setting aside the conveyance made by Mrs. O’Brien, he was entitled to costs. The decree, so far as it is involved in her appeal, should be affirmed. The same result follows so far as the complainant’s appeal is concerned.

Miss Travers has been obliged to come to this court to correct the decree, and she should have costs on the appeal, including the costs of printing. The complainant is entitled to costs in the court of chancery as the decree adjudged.

On appeal of Annie E. Travers:

For affirmance — None.

For reversal — The Chancellor, Chief-Justice, Garrison, Swayze, Eeed, Trenci-iard, Parker, Voorhees, Minturn, Bogert, Yredenburgh, Yroom, Green, Gray, Dill — 15.

On appeal of Sophie Y. O’Brien:

For affirmance — The Chancellor, Chief-Justice, Garrison, Swayze, Eeed, Trenci-iard, Parker, Yoorhees, Min-turn, Bogert, Yredenburgh, Yroom, Green, Gray, Dill —15.

For reversal — None.

On appeal of Edmund J. Parker, trustee:

For affirmance — The Chancellor, Chief-Justice, Garrison,' Swayze, Eeed, Trenci-iard, Parker, Yoorhees, Min-turn, Bogert, Yredenburgh, Yroom, Green, Gray, Dill —15.

For reversal — None.


author: Reed, J.

text:
    Florence Maude King, petitioner and appellant, v. Charles Sanford King, defendant and respondent.
    [Argued June 18th, 1908.
    Decided November 16th, 1908.]
    A wife who had been deserted by her husband, came from the State of New York into New Jersey in October, 1904, and filed her petition for divorce here on October 9th, 1907. She first resided at different places here for the purpose of finding an inexpensive place to live, and finally, but not two years before filing her petition, fixed her residence permanently at Asbury Park. Her intention when she first came into New Jersey, and thereafter continued, was to make her future home in this state. — Held, that her residence in this state from the beginning, coupled with her intention to remain here, gave her a domicile in New Jersey within the meaning of the Divorce act, which requires a two 3'ears’ residence here during the time for which the desertion continued, and a residence continued down to the filing of the petition.
    On appeal from a decree of the court of chancery, reported in 71 Ml. Rep. 687.

      Mr. Franklin W. Fort, for the appellant.
   The opinion of the court was delivered by

Reed, J.

This is an ex parte proceeding to procure a divorce on the ground of desertion. On the coming in of the report of the master advising a decree in favor of the petitioner, the court of chancery dismissed the petition. The ground of this dismissal was that there was not sufficient evidence that the petitioner had acquired a residence in this state for two years before her petition was hied; that her declaration that she intended to reside in this state was not accompanied with the selection of any place which she adopted as a residence animo manendi; that she went from place to place within the state and selected no one place as .a residence until after the two years began to run.

The petition was filed on October 9th, 1907. The petitioner came from New York state where her husband had deserted her, to New Jersey, about October 1st, 1904. She first went to Newark for a few weeks, then to Montclair until June, then to Europe until October, 1905, then to Lakewood for three or four months, then to Newark again and afterwards to Montclair. So she moved from place to place remaining for different periods, until she established a residence at Asbury Park.

The evidence convinces us that she left New York with no intention of returning. It clearly convinces us that she came to New Jersey with the intention of making this state her home. In respect to her migrations after coming here, she says:

“I have gone from place to place in New Jersey for the purpose of ■seeing' which place I would like best before establishing a permanent home. I found it too expensive at Lakewood and at Montclair, and I found Newark and Asbury Park cheaper.”

The jurisdictional fact to be established in suits for divorce brought for desertion is that one of the parties shall have been a resident of this state during two years of the time for which the desertion shall have continued, and that such residence shall have continued until the filing of the bill or petition. P. L. 1902 p. 50S.

It is settled that the word “residence” employed in the statute means domicile, and that to confer jurisdiction upon the courts of this state it is essential that one of the parties shall have been domiciled in this state for the statutory period. McShane v. McShane, 45 N. J. Eq. (18 Stew.) 341.

Domicile, of course, means a residence in New Jersey, coupled with an intention to remain in New Jersey. It is undenied that, with the exception of a three months’ absence in Europe, the petitioner was physically present in this state for about three years before filing her petition. As already observed, the testimony leaves no doubt, in our minds, that she lived here with the intention of making her home in this state.

The view which led to the dismissal of the, petition was obviously this: That while the petitioner was a resident here, and intended to remain within the state, she, nevertheless, had no fixed intention of permanently remaining in any one of the places in which she resided, until she finally removed to Asbury Park.

The question of domicile may arise in relation of. a person’s residence in a country, in a state or municipality. The place of residence may mean the house or home which shelters, the persons whose domicile is the subject of inquiry, or it may mean the country or state or subdivision thereof in which the person intends to make his home, and in some part of which he resides.

In moving from one country to another, from one state to another or from one county or town to another county or town in the same state, the person almost universally fixes his new home in some habitation, and the question is whether he did so with the intention of remaining in that habitation. The question, therefore, of his domicile in a particular town, countjr or state, within which he has taken up his abode, is simply a question whether he has fixed his domicile in his habitation.

But an instance is conceivable where a man who has resolved to change his residence permanently from one city to another, in pursuance of such an intention, has broken up his old home and taken his family to his new home. But he has taken them temporarily to a hotel or a boarding-house until such time as he can secure a suitable dwelling in the new city, or, being unable at the-time to get a suitable dwelling, rents an undesirable house until he can procure one more satisfactory in the same city, perhaps in the same street. Now, it is perceived that this man has done, from the first, all that is essential to confer upon him domiciliary rights in the new city. He resided in the city with the intention of making his home there. It is impossible to say that his intention to change from his boarding-house to a private dwelling, or from one dwelling to another, destroyed his domiciliary intent to live in the city, without assenting to the absurd proposition that if he intended to change from one unsatisfactory room in his hotel to a better room when vacated, that fact would also defeat his domiciliary intention.

This is an illustration applicable to a change of municipal domicile.

But the domicile required by the divorce statute seems to be more analogous to what is termed by Mr. Jacobs, in his work on Domicile, a gwim-national domicile. In speaking of the necessity of residence in a particular place within a country or state as a requisite for the acquisition of domicile therein, Mr. Jacobs remarks:

“It is probably not necessary that in order to work a change in domicile from one state or country to another, the person whose domicile is in question should reach the particular spot within the territorial limits of the latter at which he intends fixing his permanent abode; and indeed it may perhaps be said that it is not absolutely necessary for such purpose that the person should ever have, either in fact or in contemplation, a permanent home within any particular municipal division of such state or country. Such cases must necessarily be rare, but it is possible to conceive of a Frenchman coming- to England with the intention of permanently remaining there, but without ever fixing a permanent abode in any particular part of the country. In such case, while it would be doubtless much more difficult to prove the requisite intention than if he had, for example, purchased a dwelling-house, and fixed himself in it in an apparently permanent manner, yet, assuming the requisite intention to be made out by other proofs, there is little doubt that his domicile would be held to be changed.” Jac. Bom. § 1SS.

The same view is held by Mr. Dicey (Dic. Dom. 56), and by Lord Jeffrey, as expressed in Arnott v. Groom, 9 D. Sc. Sess. Cas. (2d series) 142, 145.

We regard these views as sound. Notwithstanding a frequent change of habitation may create a situation, by which the proof of an animus manendi becomes difficult, yet, if proved, this, coupled with residence, although migratory, within the territory of the nation or state, equips the resident with a domiciliary status.

So, assuming that this petitioner, while she resided in Newark, Montclair or Lakewood, had no domicile in either of these places, because of the absence of an intention to permanently remain in any one of them, nevertheless, having an intention to remain in New Jersey, and residing in New Jersey, she was domiciled in New Jersey.

The decree below should be reversed.

For affirmance — Ti-ie Chancellor, Parker, Green — 3.

For reversal — The Chief-Justice, Garrison, Swayze, Eeed, Trenchard, Bergen, Yoorhees, Minturn, Bogert, Yredenburgh, Yroom, Gray, Dill — 13.


author:
Trenchard, J.
      Swayze, J.

text:
    Trenton Street Railway Company, respondent-complainant, v. William T. Lawlor, appellant-defendant.
    [Argued June 19th, 1908.
    Decided November 16th, 1908.]
    1. Where the general manager of a street railway company in charge of its affairs knows of negotiations pending between its attorney and the opposite party for the compromise of a litigation, and orders settlement, making no objections to the terms, and the company accepts the benefit of the settlement by seeking to enforce it, this will be tantamount to a ratification of the compromise by the company.
    2. It is the general rule that an attorney without special authority is not authorized to' compromise his client’s claim. There is, however, no objection to giving an attorney special authority to compromise, in which case the attorney, in agreeing to the compromise, would bind his client.
    3. A special authorization from a client to an attorney to compromise a suit at law is not a privileged communication.
    4. The only elements necessary to a valid agreement of compromise are the reality of the claim made and the iona fides of the compromise. The court will not inquire into the adequacy or inadequacy of the consideration of a compromise fairly and deliberately made.
    5. An accord that is unexecuted is not an available defence at law against the original cause of action, but it may in a proper case become available as an equitable defence thereto.
    6. The parties to a suit at law having entered into an agreement of compromise lawful in character at its inception, by. reason whereof the defendant was induced to change its position by discharging its witnesses and surrendering its right to go to trial at the time when prepared, and the plaintiff thereafter having repudiated the contract, and later having moved the cause for trial, the plaintiff will be enjoined from prosecuting his suit at law upon defendant’s paying into court for the benefit of the plaintiff the money which by the terms of the compromise the plaintiff was bound to accept.
    7. A tender to one who announces in advance that he will not accept it is unnecessary.
    8. Under the circumstances recited in the opinion, the complainant was not in laches in filing his bill.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Bergen, whose opinion is reported in 73 N. J. Eq. (3 Buch.) 203.

      Mr. George W. Macpherson and Mr. TV. Holt Apgar, for the respondent.

      Mr. Thomas F. Noonan, for the appellant.
   The opinion of the court was delivered by

Trenchard, J.

This is a bill for an injunction filed by the Trenton Street Eailway Company to restrain William T. Lawlor from prosecuting a suit at law against the company for personal injuries and to compel him to perform and carry out an agreement of compromise of the suit alleged to have been entered into by him for a valuable consideration.

The learned vice-chancellor, before whom the case was heard, advised a decree, which was made, granting the relief sought, having found from the evidence that an agreement of compromise had been made whereby the railroad company was to pay and Lawlor was to receive $1,850 in full settlement. From that decree Lawlor appeals to this court.

It appears from the testimony taken before the vice-chancellor that Lawlor brought an action' against the railway company in the supreme court to recover damages for injuries, received while in the act of alighting from one of its cars. That on October 26th, 1906, the suit came up for trial at the Burlington circuit, and on that day the counsel of the railway company, with Mr. Hurley, its general manager, and their witnesses, went to Mount Holly to try the cause. Upon reaching Mount Holly, negotiations looking to settlement were hacl. Mr. Budd, one of the attorneys of Lawlor, said: “They would like to have $1,850, but they would settle for $1,800.” Thereupon Mr. Hurley, speaking to the attorneys of the company, “ordered a settlement,” and they (the attorneys of the company) oilered Mr. Budd $1,800 in settlement of the suit. When this offer was communicated by Mr. Budd to Lawlor, the latter asked Mr. Budd ' to try to get $60 additional to reimburse him for witness’ fees. Mr. Budd returned to counsel for the company, who thereupon agreed to pay, or have the company pay, $50 for witness’ fees in addition to the $1,800 to be paid in settlement. This was communicated by Mr. Budd to Lawlor; who thereupon authorized his attorney to settle for that amount. Whereupon, Mr. Budd, in company with Mr. Hurley and the counsel for the company, went into court and announced that the cause was settled. The parties and their witnesses then departed from the court house.

It was understood between counsel for the company and the attorney of Lawlor that a release was to be prepared by the former, to be executed by Lawlor and the money then paid. The release was immediately prepared and sent to Mr. Budd, but Lawlor repudiated the settlement, refused to sign the release, and engaged other counsel who was later substituted as attorney of record. The new counsel, having caused the plaintiff’s declaration to be amended in a particular of no importance so far as the present inquiry is concerned, the railroad company at first pleaded accord and satisfaction, but later, upon the plaintiff’s again noticing his case for trial, the railroad company filed this bill.

The defendant, Lawlor, on his appeal asserts that the proofs fail to show any agreement of compromise. We think they show an agreement to compromise for $1,850. But the defendant further contends that it does not appear that the agreement actually made by the railroad company’s attorney was made by its authority. We incline to' think it does. It was proved to have been made by the authority of Mr. Huxley, who testified that he was the general manager of the company. The defendant argues that this may have been true at the time the witness testified, but that there was no proof that he held such office at the time the compromise was made. It is sufficient to say by way of answer that Mr. Macpherson, the railroad company’s attorney, testified that Mr. Hurley was general manager at the time of the compromise. It is further contended that even if this is so, it is not within the power of a general manager of a street railway company to authorize the compromise of a suit unless he has special authority for that purpose from the board of directors. We know of no such rule. The implied powers of one who has been appointed general manager of a corporation are generally understood to be co-extensive with the general scope of its business (Thomp. Corp. § 8556), and probably include power to authorize settlement of a claim. But however these things may be, it certainly is true that where, as in this case, the general manager of a corporation, in charge of its affairs, knows of the negotiations pending between its attorney and the opposite party for the compromise of a litigation, and orders settlement,- making no objection to the terms, and the company accepts the benefit of the settlement by seeking to enforce it, this will be tantamount to a ratification of the compromise by the company. Thomp. Corp. § 4943.

It is further contended by the defendant that the defendant did not agree.to the settlement. We think he did.

It is, of course, the general rule that an attorney without special authority is not authorized to compromise his client’s claim. There is, however, no objection to giving an attorney special authority to compromise, in which case the attorney in agreeing to the compromise would bind the client. Phillips v. Pullen, 50 N. J. Law (21 Vr.) 439.

In this case the evidence clearly shows that Lawlor gave Mr. Budd, his attorney, authority to settle for $1,850.-

The contention of Lawlor that he was coerced or otherwise unfairly treated by his attorneys is not supported by the evidence.

But it is contended that the testimony of the authority of Mr. Budd, coming as it does from Mr. Budd and Mr. Atkinson, the attorneys of Lawlor, is not competent proof, -because it was a privileged communication between attorney and client. We think it was competent. The authority given by Lawlor to his attorney to compromise the suit was intended to be communicated to the railroad company. It was necessary that the company should be informed of that fact before dealing with Lawlor’s attorney. 23 Am. & Eng. Encycl. L. (2d ed.) 75, and the cases there cited.

Again it is argued that there was no sufficient consideration for the compromise. We think there is no merit in the argument. The only elements necessary to a valid agreement of compromise ai’e the reality of the claim made and the bona fides of the compromise. The court will not inquire into the adequacy or inadequacy of the consideration of a compromise fairly and deliberately made. Grandin v. Grandin, 49 N. J. Law (20 Vr.) 508. The agreement in question was undoubtedly so' made.

It was further suggested at the argument that this was not a case for equitable relief, it being contended that the agreement of compromise could be set up as a defence under a proper plea in the action at law. We think this is not so. The agreement for compromise remains unexecuted, the defendant having refused to accept the money and repudiated his contract. It is, therefore, an accord unexecuted. An accord that is unexecuted is not an available defence at law against the original cause of action, but it may, in a proper case, become available as an equitable defence thereto. Headley v. Leavitt, 65 N. J. Eq. (20 Dick.) 748. In that ease Mr. Justice Pitnej^, at the trial at circuit, refused to permit such a defence to be interposed, on the ground that the accord was unexecuted and that fact was held by this court to justify the filing of a bill in chancery to restrain the plaintiff from further prosecuting her suit at law until she agreed to permit the defendant to take advantage of the contract which he had subsequently executed, this court thereby recognizing that the unexecuted contract, although it constituted an equitable, did not constitute a legal defence. Headley v. Leavitt, 68 N. J. Eq. (2 Robb.) 591.

We think the present a proper case for equitable relief. The agreement of compromise was lawful in character in its inception, and, as we have pointed out, may be a good defence in equity. It is apparent that, by making the agreement of compromise with the complainant, Lawlor induced the complainant to surrender its right to go to trial when it had its witnesses present and was otherwise prepared. The complainant having, in reliance upon the settlement, changed its position by surrendering such right and discharging its witnesses, it would be inequitable to permit Lawlor to withdraw from his contract and bring on the trial with complainant having a defence which was not available to it in a court of law‘only because Lawlor had refused to accept the money according to the terms of his contract.

Again it is contended that complainant is not entitled to relief because there was no tender of the money. But a tender to one who announces in advance that he will not accept it is unnecessary. Thorne v. Mosher, 20 N. J. Eq. (5 C. E. Gr.) 257.

Nor is there any merit in the suggestion of the defendant that the complainant is in laches by filing a plea of accord and satisfaction to the amended declaration and waiting until notice of trial before filing its bill. The testimony shows that the position of the complainant, with respect to the agreement of compromise and its effect, was consistent throughout, and that it acted with reasonable promptness in filing its bill.

The decree appealed from awards a perpetual injunction restraining Lawlor, the defendant, from prosecuting his suit at law against the complainant, and orders that he perform the agreement of compromise, and accept the sum of $1,850 from the complainant in full settlement of the suit. Such is not the precise form in which the decree should be drafted. It should provide that, upon the complainant paying into court, for the benefit of the defendant, the sum of $1,850, the defendant be perpetually enjoined from prosecuting or proceeding in his suit now pending in the supreme court against the complainant, or any other suit in that or any other court for the same cause of action.

Eor the purpose of such modification the decree must be reversed and the record remitted to the court of chancery.

Swayze, J.

(dissenting).

I agree with the court that the decree in this case should be reversed, but, in my judgment, the opinion does not go far enough in directing a modification. I think the failure of the complainant to tender itself ready to fulfill the contract made by its attorneys, by which the defendant was to receive $1,850, is fatal to its claim for relief. The defendant never contracted that the case should be settled for $1,800 only. If, however, this difficulty could be overcome by imposing terms upon the plaintiff that it should ratify the contract made by the attorneys, I think the decree to be made should be the same as was made in Headley v. Leavitt, 68 N. J. Eq. (2 Robb.) 591, and that the appellant should be restrained unless he will consent that the appellee may set up the alleged contract as a defence by way of accord and satisfaction, leaving it to the jury to determine whether there was such a contract, and depriving the appellant only of the right to object that the accord was not followed by a satisfaction.

For affirmance — None.

For reversal — The Chancellor, Ci-iiee-Justice, Garrison, Swayze, Eeed, Trenohard, Parker, Voori-iees, Minturn, Bogert, Vredenburgh, Vroom, Green, Gray — 14.