text:
    The Trenton Trust and Safe Deposit Company v. William G. Cook et al.
    [Submitted January 30th, 1918.
    Decided February 18th, 1918.]
    1. A gift of the income of a fund to testator’s children for life, with survivorship among them if any child should die without issue — Held, that the surviving- share was an independent bequest and did not again survive, but upon the death of the survivor passed to his personal representative.
    2. A gift of the principal of the fund to the children of such of the testator’s children as shall die leaving children — Held, to be contingent; vesting, however, under'the rules at the earliest possible period, upon the death of a child leaving- children, or, perhaps, sooner, as children were born to sons or daughters, and varying from time to time by divestiture or investiture as grandchildren were born or died before their parents.
    3. A gift of the principal of the fund to the children of such of testar tor’s children as shall die leaving children — Held, that upon the death of a child of the testator leaving no children, but leaving grandchildren,, the gift vested in the grandchildren.
    On bill, &C.

      Mr. Malcolm G. Buchanan, for the complainant.

      Mr. Peter Baches, Mr. William J. Baches, Mr. Chauncey G. Parker, Mr. Frank H. Hall and Mr. J. Albert Homan, for the defendants severally.
   Backes, V. C.

This is a trustee’s bill for directions, -which involves the construction of the instrument creating the trust.

Elias Cook died in 1879, leaving a last will and testament by which he bequeathed to his widow, Anna T. Cook, his household furniture, and devised to her his residence for life or widowhood. To liis sons Henry T., Frank D. and William G. he gave $15,-000 each; to the latter two when they attained their majority. To liis two daughters Anna and Mary he gave $1,500 each, at one and twenty, or sooner upon marriage. The fifth and sixth clauses read:

“5. I give and bequeath, to my Executors the sum of seventy thousand dollars, this fund to be composed of mortgages, bonds and securities in my hands at the time of my decease, which may be selected by them; and when paid in or collected by them to be reinvested and kept invested on bonds and first mortgages on lands in Mercer County aforesaid, either without improvement or if improved, then only upon brick or stone houses, with fire insurance thereon as collateral, said mortgages not to be for more than half the value of said lands and improvements. In trust nevertheless to pay the interest of said fund annually, or semiannually, if the same can be so invested, to my wife Anna T. Cook during her life or widowhood, the said interest to be used by her, in her discretion, for the support of herself and such of our children as may remain at home unmanned.
“6. At the death of my said wife, or end of her widowhood, I will and direct that the said interest of the above fund of seventy thousand dollars be paid to my children, respectively, in the following proportions; to each of my daughters Anna and Mary, two sevenths parts thereof, and to each of my sons I-Ienry, Prank and William one seventh part thereof; with survivorship between them if either should die without leaving a child or children, or d'escedents (sic) of a child or children; and when either shall die leaving children the whole principal in the respective proportions aforesaid to 'be paid to such children or child representing the parent; together with the accruing interest thereon.”

He directed liis executors to hold all of his property “not hereinbefore specifically disposed of” until the times for the payment of the legacies to his children and to pay the net income of the remainder to his widow for life or widowhood. At death, or termination of the widowhood, he gave “all the balance and residue of my estate and property wheresoever and whatsoever the same may be to my children, Henry, Frank, Anna, Mary and William, or to their children.” The legacies were charged upon the realty in this language: “I do charge all of the above-specific legacies upon both my personal and real estate.” The executors were empowered to sell the real estate.

The widow, Anna T. Cook, qualified as sole executrix and trustee and continued in office until her death in January, 1916, whereupon the somplainant was substituted. Only one of the children, William O. Cook, survives the widow, having a child and grandchildren. Frank D. died in 1887, leaving a son; Anna childless in 1883; Mary in 1895, leaving a daughter, and Henry T. in 1915, without issue. The testator left an estate, real and personal, of the value of, approximately, $150,000, of which only $34,500 was turned over to the complainant. The pecuniary legacies were all paid, presumably, but what became of the rest is unknown now. No part of the estate was ever set aside and appropriated by the executrix and trustee to the trust fund of $70,000, so far as appears, and, consequently, the depletion was not of the legacy, but of the estate, which includes the proceeds of the real estate, all of which was sold; and'as the specific legacies are expressly charged upon all of the personal and real property (the trust fund is a specific legacy, Allen v. Allen, 76 N. J. Eq. 245), which follows also from a blending of the real and personal property in the disposition of the residue(Corwine v. Corwine, 24. N. J. Eq. 579), the remnant of the estate must be devoted to the trust created by the fifth clause (Paterson Hospital v. Blauvelt, 72 N. J. Eq. 725) and disposed of as provided'by the sixth. There is as much variety of opinion as to the meaning of the latter clause as there are counsel in the case, each of whom pressed his view, sanguinely, with forceful argument and elaborate brief, amply supported by authorities, and, considered singljq none is without merit and some so persuasive as to cause me much discomfort; but, after viewing the clause from all angles presented, and others, and giving to each expression its meaning aud function in its relation to others, and in complete harmony with the whole, I have reached the conclusion that the true construction is:

The income: Each child bad a vested estate for life in the whole of the income, divisible into sevenths, the enjoyment of which was postponed until the marriage or death of the widow. The trust continued active until the death of the last survivor. Upon the death of a child without a descendant, its share survived to the remaining brothers and sisters, equally and absolutely, the accruing interest in the surviving share passing to the personal representative. Dying, leaving issue, the parent’s share (original) vested in the descendant, to accrue and to be- paid when the principal is distributable.'

The principal: Upon the death of a child, leaving issue, the principal in the respective proportions — as one-seventh bears to two-sevenths — of the whole fund, to be calculated at the death of the testator’s' last child (one-seventh descendants of sons to two-sevenths of daughters) passed to the descendants per stirpes, payable at the death of the last life tenant, together with the deemed interest thereon, viz., on the fraction of the income the ancestor enjoyed.

The complainant will be directed to hold the corpus until the death of William G. Cook, paying of the net income eight-twenty-firsts to him, two-twenty-firsts to Mary’s administrator and two-twenty-firsts to Henry’s and retaining and crediting tliree-twentyfilrsts to the estate of Frank’s son, who died recently, and six twenty-firsts to the daughter of Mary. This is as far as the decree may go. Stewart v. Stewart, 61 N. J. Eq. 25.

The advisability of construing wills, without writing opinions, has often been suggested — a boon to the judge and less confusion to the bar — but I feel that because of the great diversity of views, counsel are entitled to know how the result has been reached.

As to the income: The thing, the scheme the testator had in mind, as laid out in the sixth clause, although inartificially set down by the scrivener, manifestly was that the $70,000 fund, put aside primarily for his widow and her household, should remain intact after her demise and until the death of his last surviving child. The fact that the gifts to the children are of fractional parts of the whole income, whatever it might be from year to year, and not of the income of fractional portions of the fund, is a powerful indication that the fund was not to be distributed pro tanto upon the death of a child, as later language would, at first blush, seem to indicate was to be done. It is clear that the income only was to be enjoyed by the children and the principal by succeeding generations. In providing cross-remainders of survivorship among his children, upon the death of a child without issue, the testator dealt only with the income apportioned to that child, and while the general rule is that a gift of income, without limit of time, carries with it a gift of the principal, there was here no apportionment of the principal to the income upon which the rule could operate. To apply the rale that a gift of the income, indeterminate, is a bequest of the principal, would be destructive of the testator’s plainly expressed intention that only the descendants of his children should take the “whole” fund. The gift to a child leaving issue passed to the descendants and the gifts by way of survivorship were independent gifts of the shares to all surviving brothers and sisters equally and absoluto (3 Jarm. (R. T.) 568), and upon the death of such survivor voted in his personal representative. 3 Jarm. (R. & T.) 565; Boggs v. Boggs, 69 N. J. Eq. 497; see, also, Bonnell v. Bonnell, 47 N. J. Eq. 540 (at p. 546). Therefore, upon the death of Frank, one-seventh equals three-twenty-firsts passed to .his son. Anna, dying childless, her two-sevenths equals six-twenty-firsts passed to Mary, Henry and William, equally; two-twenty-firsts to each. Upon the death of Mary, her two-sevenths equals six-twenty-firsts passed to her daughter; the survivorship interest of two-twentv-firsts from Anna to her administrator. Upon the death of Henry his one-seventh equals three-twenty-firsts interest passed to William and liis two twenty-firsts survivorship from Anna to his administrator. The’summation, therefore, as already stated, and presently payable, is: To William G-. Cook, eight-twenty-firsts; administrator of Mary, two-twenty-firsts; administrator of Henry, two-twenty-firsts. Applicable, but to he held, three-twenty-firsts to the estate of Frank’s son and six-twenty-firsts for the daughter of Mary.

Having done with the income, what of the principal? It is disposed of in these words:

“And when either shall die leaving children the whole principal in the respective proportions aforesaid to be paid to such children or child representing "the parent; together with the accruing interest thereon.”

It is the insistence of one of the counsel that under this language the fund vested in the testator’s children upon the death of the first child, leaving a child, and is now distributable as of that period; and the contention of another is that the testator failed to provide for the contingency of children dying childless, and as a consequence three-sevenths of the fund (to Mary’s and Henry’s possible descendants) are undisposed of and fall into the residue. Still another argues that the gift is to children of testator’s children, living at the death of their parent, and excludes grandchildren. Let its see.

Hp to the point of the above quotation of the clause, the testator dealt only with the income and he made complete disposition of it, if we give the concluding words “together with the accruing interest thereon” their appropriate meaning. He then proceeded to dispose of the principal, to be distributed as of the time when it would be no longer needed to produce the income. As to when and in what lots it was to go, there is little obscurity, if -we keep in mind that it was not to be touched until it had fully served the primary purposes for which it was created. His children were not to-have it in any event. Their children, or lineal descendants living at their death, were to be the recipients of his bounty. To them he gave “the whole principal in the respective proportions aforesaid,” viz., by the formula of two to one, based on the division of the income by the fractions of two-sevenths to daughters’ issue to one-seventh to sons’. At the time the testator made his will, and at his death, his children were unmarried and manifestly the gifts were contingent (Beatty v. Montgomery, 21 N. J. Eq. 324; Howell v. Green, 31 N. J. Law 570), vesting, however, under the rules a.t the earliest possible period, upon the death of a child leaving children, or, perhaps, sooner, as children were born to sons or daughters and varying from time to time by divestiture or investiture as grandchildren were born or died before their parents (Herbert v. Post, 26 N. J. Eq. 278; Hopper v. Demarest, 21 N. J. Law 525; Male v. Williams, 48 N. J. Eq. 33); and to be eventually enjoyed “in the respective proportions aforesaid;” which, while in disposing of the income the testator employed definite fractions, means not the definite fractions, but the relation between the respective number of the fractional parts. The reason, as complainant's counsel suggests, for inserting “seventh” in the forepart of the clause, was to indicate that collectively the five shares of interest were to exhaust the total income; and. that “seventh” was used because it required a division into seven parts to effectuate the “proportion” the testator had in mind, of two to one as between daughters’ and sons’ descendants. “When,” as used in connection with “to be paid,” would ordinarily denote the point of time when the gift Was to take effect in possession, but considering that the enjoyment of the prior outstanding estates — in the widow for life, in the children for life — forbids this, and, further, that the sum of the legacy would be impossible of ascertainment at that time, it becomes at once apparent that the adverb of time “when” was inaptly used in the sense of “if” or “in case that,” and “to be paid” as words of gift, vesting the estate immediately, postponed as to payment for the convenience of the estate. Herbert v. Post, supra. By adopting this construction, effect is given to every presently conceivable expression of intent, and the income, as well as the principal of fund, is completely disposed of. While the testator’s intent is awkwardly expressed, it can be perceived, and in the language of Lord Mansfield, in Chapman v. Brown, 3 Burr. 1634; 97 English Reprint 1015: “In order to attain the intent, words of limitation shall operate as words of purchase; implications shall supply verbal omissions; the letter shall give way; every inaccuracy of grammar, every impropriety of terms shall be corrected by the general meaning, if that be clear and manifest.”

As the principal, then, stands, the estate of Frank Cook’s deceased son is vested of a quarter interest; the daughter of Mary of a half, and the daughter of William a quarter ; the first two liable to be increased by the death of William’s child and grandchildren in his lifetime.

I cannot agree with the contention of counsel that if William’s daughter predeceases him, his grandchildren will not take. Although it is true that the gift is upon the stated contingency of any of the testator’s children dying leaving children, it seems to me that the contingency is impliedly enlarged by the immediately preceding and complementary contingency of survivorship “if either should die without leaving a child or children or descendants” and by the words of the gift themselves “to such children or child representing the parent,” meaning, I take it, the great grandchildren. Baldwin v. Tucker, 61 N. J. Eq. 412. However, as William is living, this question is not ripe for decision, and an expression of opinion is gratuitous.

A decree will be advised in accordance with the directions.


source: Caselaw Access Project

author: Backes, V. C.

license: Public Domain

text:
    Karl Schaffer, petitioner, v. Maika (also known as Marie) Krestovnikow, otherwise Mary Schaffer.
    [Submitted March 9th, 1918.
    Decided March 22d, 1918.]
    1. Copies of parish records of births, marriages and deaths, kept in pursuance of the law of a foreign country, and admissible in evidence in that country, are admissible here when, duly certified by the legal custodian and duly authenticated under the hand and. seal of the accredited representative of the United States to that country.
    2. Such copies will not be received in evidence unless precisely certified and authenticated according to the rules of the common law and the usages of nations.
    3. Copies of church records of baptism, not kept in pursuance of law, of a foreign country, are not admissible in evidence upon the certificate of the custodian and authentication 'by the United States representative, but may be admitted in evidence upon establishing the authenticity of the record by competent testimony and by proving- the copies to be true.
    On motion -to receive a record in evidence.

      Mr. Abe J. David and Mr. James C. Connolly, for the petitioner.

      Mr. Benjamin M. Weinberg, for the defendant.
   Backes, V. C.

After deciding this case (ante p. 192) it was reopened to enable the complainant to introduce records, not available at the time of the hearing, tending to show that the defendant had been baptized in the Greek Orthodox church previous to her alleged first marriage. The paper now offered is entitled “Extract from the Metrical Record, Part 1, of Births for the year 1889, Issued by the Parish of the Church of the Holy Conception of Our Lady, Village Vodytchek, Proskurov District, Podolia Province,” and its contents certified to in the following manner:

“The foregoing Metrical Record is a correct cops' of the original records in the Parish of the Church of the Holy Conception, Village Vodytchek, Proskurov District, Podolia Province ;
“In Witness Whereof, we have attached hereto our hands and the Church Seal.
“Parish Priest of Village Vodytchek.
“(Sgd.) Alexander Yarosiievitch:.
“Deacon (Sgd.) Alexander Leontov.”

The United States consul at Odessa, Russia, attested by his consular seal that—

“Alexander Yaroshevich, Vicar of the Oh arch of the Virgin in the village of Vodichki, District of Proskurof, Government of Podolia, Russia, is an official authorized to keep records of baptisms performed in his church .and that his hand and seal affixed to the foregoing instrument is worthy of all due faith and credit.”

Parish records of births, marriages* and deaths are kept in pursuance of law in Russia, and copies thereof, when duty certified by the parish priest, who is a ^-iwyi-public official, are received in evidence by the courts of that country. Copies of such records, so attested, are admitted in evidence by our courts when duly authenticated under the hand and seal of the accredited representative of the United States government to that country. Barber v. International Company of Mexico, 73 Conn. 587. The fundamental infirmity in the document before me is that it does not appear that the priest and deacon who certified to its correctness are tlie legal custodians of the original record or that they bear any relation to the church of the “Holy Conception of Our Lady,” whose records they presume to certify. The authentication of the - American consul is, it will he observed, that the certifying priest is the vicar of the “Church of the Virgin,” in the village of Vodytchek, and “is an official authorized' to keep records of baptisms performed in Ms church.” This would indicate that there are two parishes in the village. What jurisdiction, if any, the vicar of one had over the other and its records, is not apparent, and upon this we are not allowed to speculate, nor as to whether the discrepancy is due to a confusion of names. “The object of any such authentication (by the consulates) is to afford satisfactory evidence that the document offered is in fact certified by the official custodian of the original of which it purports to be a copy, having due authority to make such certification. Any evidence is sufficient for this purpose which is calculated to give reasonable assurance of the facts in question. Of this nature, is whatever legitimately tends to prove that the ddeu-ment was obtained from the office where the original is kept; that the signature of the certificate was made by the individual whose name is thus subscribed; that he held, at the time, the official position indicated by his subscription; and that it is one of the functions of those holding that position to certify to such copies.” Barber v. International Company of Mexico, supra. The authentication falls short of these essentials. As such method of proof permits of no inquiry into the genuineness of the record certified, in the making of which the parties sought to be bound had no hand, litigants must be held to a rigid compliance. Copies of non-judicial records of our own public institutions, although attested by the legal custodian under his official seal, are not receivable in evidence unless commanded by statute (Traction Company, v. Board of Works, 57 N. J. Law 313), and a fortiori copies of foreign records ought not to be accepted unless by an exact and compelling vouching according to the rules of the common law and the usages of nations, upon which their admissibility exclusively depends.

■ It. was testified by a Russian lawyer, attached to the Russian consulate in New York, that the seal of the church affixed by the priest to his certification, raised a presumption in Russia that he was the legal custodian of the record. This does not meet the point. The presumption has no extraterritorial influence. The competency of the record, all subsidiary fQrmalities having been complied with, depends upon the authentication-by the consul, the sufficiency of which is to be adjudged by the tribunal in which it is offered as evidence.

There is another reason for rejecting the document. The statutes of Russia make it the duty of the parish priest to record all hi rths, marriages and deaths. There is no provision requiring him to record baptisms, although records of births are to be entered immediately after the performance of the baptismal ceremony, and moreover there is no provision for the keeping of a record of the baptism of adults who change their religion to that of the Christian faith. In practice, the entries of births and baptisms are combined in the church record, and while state and church are inseparable, yet the only duty imposed by statute upon the department of church is to record births; the baptismal entries, in connection therewith, constituting the record of ecclesiastical procedure, not reejuired by law to be kept, so far, at least, as has been shown by the evidence. Considered in this twofold aspect, the record is provable in evidence in this jurisdiction for the purpose of establishing the birth of an individual by a duly authenticated copy, but for the purpose of proving baptism it is not admissible unless its authenticity is established by competent testimony, as in Supreme Assembly v. McDonald, 59 N. J. Law 248; Hancock v. Catholic Benevolent Legion, 67 N. J. Law 614; Lewis v. Marshall et al., 5 Pet. 470; Blackburn v. Crawfords, 70 U. S. 175; Huntly v. Compstock, 2 Root 99; Weaver v. Leimam, 52 Md. 708; Kennedy v. Doyle, 92 Mass. 161; Succession of Hebert, 33 La. Ann. 1099; Succession of Justus, 48 La. Ann. 1096.

Now, when we look into the document, we find further reason for not receiving it in evidence. For a clearer understanding, the pertinent parts are reproduced:

As a record of births for the year 1889, it is not, of course, descriptive of the defendant, for it is an admitted fact that at that time she was eighteen years of age. And, as a baptismal entry, obviously, it is imperfect. We may gather from it, that on November 2d of that year, an infant, of the name of Maria, was baptized, and that her godparents and the officiating clergymen were as stated, and that there were no witnesses present. But, who this Maria was is, as a matter of record, undisclosed. The officially prescribed method of identification, by a statement of the “vocation, first name patronymic and surname of parents and what religion,” was entirely ignored, unless it be that the words “Greek Orthodox” described the religious faith of the parents, which surely was not the case in this instance. The substituted and gratuitous identification of “Maika Aizikova Rosenblitt, a former Jewess, who at Holy Baptism received the name of Maria and Vasilieva, after her godparent, a resident of Village Tcherno-Ostrov,” must be disregarded as purely hearsay. Competent records are evidential only of that which is lawfully entered.

A decree may be entered as heretofore advised.


author: Griffin, V. C.

text:
    Allen W. Moore et al. v. West Ridgelawn Cemetery et al.
    [Decided January 3d, 1918.]

    Application to open a decree pro eonfesso entered ete parte may be made to a vice-chancellor under chancery rule No. 130, § 5.
    On application to open decree entered ex parte.

      Messrs. Edwards & Smith, for the complainants.

      Mr. Robert Qarey, for tlie defendants.
   Griffin, V. C.

The complainants’ bill was taken as confessed against the defendants, with the usual order that the .complainants take depositions and other evidence to substantiate and prove the allegations of the bill and to bring on the hearing of the cause ex parte. Upon the submission of such proofs the advisory master advised a final decree, which was signed by the chancellor. Application is now made to a vice-chancellor to open the decrees witli leave to answer.

At the threshold the complainants make the point that these decrees, having been advised by an advisory master, the application should be made to him, and the vice-chancellor is without power to hear the motion, citing rules 121, 128 and 134 of this court, which rules are as follows:

“123. When a cause shall be referred to a vice-chancellor, or advisory master, ¿11 proceedings in it to final decree shall be had before him.
“328. Application for re-liearing of causes heard by a vice-chancellor or advisory master shall be made to the vice-chancellor or advisory master who shall have heard the cause; and, if granted, the re-liearing shall be before him.
“134. All applications to amend orders or decrees shall be made to the chancellor, except where the order or decree was advised by a vice-chancellor or advisory master, in which case the application shall be made to die officer who advised the same.”

Rules Nos. 120 to 129 (both inclusive) are placed under the heading “NIV. — Of Hearings Before the Yice-Ciiancellors and Advisory Masters.” Rule No. 120 treats of applications for orders of reference and the notice thereof to be given adverse parties. Rules 122 to 129 regulate tlie practice before the vice-chancellors and advisory masters in litigated cases, where the cause has been referred. Considering rule 121 in connection with the rules under tlie above caption, it is quite apparent that it applies to litigated cases only. The same may he said of rule 128, with the additional remark that this is not an application for a rehearing.

As to rule 134, the language is unequivocal, and has inference only to applications to amend orders or decrees. This is not .such an application. The present application is one to open a decree entered ex parte, to the end that a hearing may be had, in which situation tbe motion may be made to a vice-cbanccllor, under rule 130 (tlie rule of general reference), subdivision 5, which authorizes applications to be made for orders or decrees, excepting only decrees pro confesso•, final decrees and certain orders of reference named.

Entertaining the foregoing views, I will hear tbe application.


author: Foster, V. C.

text:
    Robert E. Lockward v. Isaac L. Evans and Lane & Lockward Co.
    [Submitted June 28th, 1917.
    Decided July 25th, 1917.]
    1. Where one of three stockholders executed a written agreement providing that he would not transfer his shares to an outsider until he had first offered them to defendant at the price offered him for them, it was complete compliance with his contract for the stockholder to offer his shares to defendant at the same price offered by complainant without disclosing from' whom the other offer came.
    2. Under above stated circumstances, held that where defendant had an- opportunity to exercise his option and failed to do so within a reasonable time, he cannot subject such stock to a constructive trust in his favor 'by attempting to exercise the option thereafter, as he would have a complete remedy at law for any injury thereby done to him.
    3. A court of equity has power to compel the transfer of stock on the theory that the one seeking the transfer is the equitable owner and is entitled to perfect his legal title to the shares.
    On bill, &c.

      Messrs. Raymond, Mountain, Van Blarcom & Marsh, for tbe complainant.

      Messrs. Church & Harrison, for tbe defendants.
   Foster, V. C.

This bill is filed to compel the transfer of shares of stock on the books of the defendant company and the issuance to complainant of a new certificate therefor. The answer for the company presents no defence to the action. The answer of the defendant John C. Moore in effect admits complainant’s right to the relief sought, and the defendant Isaac L Evans by his- answer denies complainant’s right to this relief, and by his counter-claim asks that the shares of stock may be transferred to him.

Tlie controversy is between Lockward and Evans and arises out of the following circumstances:

The Lane & Lockward Co., which was organized by. complainant's father over twenty-five years ago, is engaged in the manufacture of tobacco at Caldwell in this state; it has a capital of $100,000, divided into one thousand shares, of which six hundred and fifty have been issued and of which Evans owns three hundred and five shares; complainant and his wife two hundred and ninety-five shares, and the fifty shares in question stand in the name of Moore, who has been a salesman of the company for many years, and who purchased these shares years ago from complainant’s father for their par value of $5,000. The company is a very prosperous' one and for years has earned dividends of about twenty per cent.

Evans is the president and treasurer, and complainant is the secretary of the company, and these two and Moore were its directors.

In the spring of 1913 complainant and Evans had some trouble over the unsuccessful efforts of complainant to have his brother-in-law employed by the company. This matter was not entirely adjusted when complainant left for his vacation. During litó absence, and on June 14th, 1913, Evans obtained from Moore an agreement in writing, by which Moore gave Evans the first privilege of purchasing his fifty shares of stock, and he agreed

“not at any time to transfer or assign my said shares to any person, persons or corporations, until after I have first in writing offered them for sale to the said Isaac L. Evans at the same price which outside parties may in writing have offered for the same.”

Moore further agreed for the period of five years to vote for such officers of the company as Evans should suggest, and also agreed to give Evans his proxy to vote on the stock at any meetings of the company which Moore was unable to attend. Evans, in consideration of these matters agreed to reserve for Moore from his holdings of stock, fifty shares, “until after I have first in writing offered them for sale to said John C. Moore at the same price which outside parties may in writing have offered for the same.”

On complainant’s return from his vacation he and Evans renewecl their disputes, and Evans informed complainant of his agreement with Moore.

Some time in the fall of 1915 one Tansy undertook the promotion of a concern called the Mutual Tobacco Company, which was to purchase the property or stock of a number of companies including the Lane & Lockward Company. Evans, complainant and Moore each gave Tansy an option to purchase their stock at a uniform price. At the same time, Evans made with Tansy,, without the knowledge of complainant or Moore, what has been termed ‘‘a side agreement,” by which he was to receive five thousand shares of stock in the Mutual company, and was elected a vice-president of it; and in consideration was to identify himself with it and perforin such duties as its directors might require, at a salary to be mutually agreed upon. This agreement is dated December 8th, 1915, but it does not appear when complainant and Moore first learned of it.

On November 1st, 1915, Moore delivered to Evans a letter in which he notified him that he had an offer of $50,000 for his fifty shares of stock, and he requested Evans to exercise his option^ to purchase the stock under the agreement of June 11th, 1913, within twenty-four hours. At a conference the following day, complainant acknowledged to Evans that he had made the offer, and that it was a fictitious one and he withdrew it; and they then talked over what they called a “gentleman’s agreement,”' under which they were to divide the stock of the company between them and place qualifying shares in the name of a dummy. Complainant and Moore say that on November 1st,-1915, when-the bogus offer of $50,000 was made, complainant also made an-offer, which was tona fide, of $10,000 to Moore for his stock, hut this fact was not made known to Evans.

On November 22d, 1915, Evans wrote Moore that he had been requested to give an option on his stock, and offered Moore, presumably in accordance with the agreement of June 14th, 1913, fifty shares for the same price as that for which he was to give-the option. Moore was unable to buy the stock and in return offered his shares of stock to Evans, who, under date of November 27th, notified Moore that he was not complying with.the June 14th, 1913, agreement. Two days later Moore wrote Evans that he hart received an offer in writing for liis stock at a price of ■'$10,000, without disclosing it was an offer from complainant, adding “and in accordance with the terms of our agreement of June 11th, 1913, I am giving you the first privilege of purchasing these shares.” On December 2d Evans wrote Moore, claiming the right to inspect the offer before giving his decision, but he never inspected or asked to inspect the offer. Moore states he accepted this offer of $10,000 at the time that he gave an option on the stock for four months, at complainant’s direction, to Tansy for the Mutual company. This appears to have been about December '8 th.

On April 10th, 1916, two days after the expiration of the option to the Mutual company, complainant under his offer had transferred to him from Moore the fifty shares of stock for $10,000, paying for the same by his promissory note, on which payments have since been made, including a payment of $750-received by Moore as dividends on the stock, and credited by him on the note. Complainant as secretary of the company made out a new certificate to himself for the fifty shares and asked Evans to sign it as president and treasurer. 'This Evans promised to do on the following day, and the next morning he refused to sign the new certificate, giving as his reason that he didn’t think the court of chancery would allow him to sign it; and some time later the bill was filed.

Prom what has been stated, it is apparent that there has been since 1913 an effort on the part of Evans and complainant to secure control of the company; that they have not acted in good faith towards each other, or towards Moore; and that the latter lias shifted his allegiance from time to time from one to the other- Evans was the first- to attempt to secretly secure the Moore stock, and through it, or through Moore’s agreement, to vote as Evans suggested, to obtain control of the company. Complainant on learning of this and of the secret bargain that Evans had made with the Mutual company for a large block of stock and a salary for himself, then secretly undertook to acquire Moore’s stock. Moore at this time was apparently under complainant’s influence and willingly assisted him in his scheme and enabled him to acquire the stock on easy terms of payment.

Tire contention that Evans, after Moore by his letter of November 29th, had notified him of the offer of $10,000, was justified in taking no action because Moore had not disclosed the name of the part3 making the offer, or submitted the offer to Evans for inspection, is not supported by anything in the agreement of June 14th, 1913, on which Evans bases his claim. In fact, it'is very doubtful if the terms of this agreement relate in any wa3~ to any offer made by complainant or his wife to Moore for the purchase of his stock. They are both stockholders of the comparo, and this agreement, admittedly prepared at Evans’ instance, reqirires Moore not to transfer his stock until he has first given Evans the privilege of buying it “at the same price which outside parties may in writing have offered for the same.” Who were meant by the expression “outside parties,” is not stated. If this means parties outside of the company, i. not stockholders, its purpose can be readily understood. If it was intended’to apply to anyone making an offer for the stock, I do not see why it was used. It may have been employed to satisfy Moore, who was under some obligations to the Lockward family, that the option to Evans would not prevent him from dealing about the stock with complainant who was an “insider” of the company as a stockholder and officer. Whatever the reason for the use of this expression was, I am satisfied that Moore by his letter to Evans of November 29th, performed all that the agreement of June 14th, 1913, required him to do; that Evans after the receipt of this notice did not, within a reasonable time, exercise his privilege of purchasing the stock, and in fact made no attempt to do so until the day of the hearing in open court — long after the sale and transfer of the stock by Moore to complainant had been consummated.

If Evans’ construction of the agreement between himself and Moore is correct, he has an ample remedy at law, for the breach of contract which he claims Moore committed by the sale and transfer of the stock to complainant, and I am unable to adopt the view strongly urged on behalf of Evans, ’that when complainant purchased the stock, with knowledge of the agreement between Evans and Moore, he thereby became a constructive trustee of the stock for Evans and should be compelled to perform his trust by transferring the stock to Evans. There might be some force in this contention, if Evans had attempted to exercise his rights under the contract within a reasonable time after Moore’s notice to him of the offer he had received for the stock.

The power of the court to compel a transfer of stock on the books of a corporation in a case of this nature has been recognized, and rests on the theory that complainant is the equitable owner of the stock and seeks by the transfer to consummate a legal title. Archer v. American Water Works Co., 50 N. J. Eq. 33-50; Reilly v. Absecon Land Co., 75 N. J. Eq. 71; Morris v. Hussong Dyeing Machine Co., 81 N. J. Eq. 256.

I will advise a decree pursuant to the prayer of the bill.


text:
    Thompson’s Express and Storage Company v. John Whitemore et al.
    [Decided December 13th, 1917.]
    1. A railroad company may contract with an express company for the exclusive right to use the station platform for the business of the express company.
    2. Such contract does not create a monopoly.
    3. Under such contract the express company is entitled to an injunction against others soliciting such - business, when actual damage could not be ascertained, and a denial of the injunctive relief would tend to-promote a multiplicity of suits.
    On bill, &c.

      Mr. Wilfred H. Jayne, Jr., for the complainant.

      Mr. Harry E. Newman, for the defendants.
   Foster, V. C.

The testimony in this case was taken before me last spring and a time fixed for the filing of briefs. , Because of the illness of Mr. Newman, and the destruction of his office and records by fire, I have from time to time extended the date for the filing of his brief until the present time, and although he has recovered his health and is again in active practice, and was notified by me some weeks ago that I would decide the case at the first opportunity, he has not answered my letter or filed his brief, nor has he requested further time in which to do so. I feel under all the circumstances that the court and complainant have granted counsel and his clients all the delay they can reasonably expect, and that the matter should now be decided.

The hill is filed to have defendants restrained from soliciting trade, for the transportation of passengers and baggage, on the platform of the railroad station at Lakewood, Ocean county.

On the hearing the following facts were established:

Prior to September 1st, 1914, passengers arriving at the railroad station were annoyed; their comfort, convenience and safety interfered with, and their passage obstructed in alighting from trains, by the occupancy of the station platform by large numbers of solicitors and by their importunate solicitations for the transportation of such passengers and their baggage. The railroad company made repeated efforts to stop this annoyance and to regulate such solicitation, hut without success, and in order to inore effectually accomplish these objects, the company, on September 1st, 1914, entered into a contract with complainant, by which, for an annual payment of $500, it gave complainant the exclusive privilege of soliciting such business on the station platform for the term of five years. This contract is still in force and complainant is operating under it.' The terms of the contract require that complainant use all proper efforts to prevent others from soliciting such business on the platform and to keep all other solicitors therefrom. Complainant apparently has a complete equipment for the business and, except when interfered with hv the defendants, and other solicitors, it has performed its contract to the satisfaction of, the public and the railroad company.

Defendants were duly informed of the terms of this contract, but, notwithstanding this information, and against the protest •of the complainant and of the railroad company, they have ignored complainant’s rights thereunder and have continued to solicit such trade upon the station platform, and have thereby taken from complainant a substantial part of its business. During the winter season, from twelve to fourteen passenger trains arrive at the station daily, carrying a great many passengers and a considerable quantity of baggage.

These facts are not seriously disputed by the defendants; but they claim, notwithstanding them, that they have the right to solicit such business on a railroad platform, which they contend is, for such purpose, to be regarded as public property; and, further, because they claim the contract between the railroad companj'' and complainant is illegal, in that it creates a monopoly •of such business in favor of complainant, and that if they are wrong in these contentions, complainant should not prevail, because it has a remedy at law and should not obtain relief in a court of equity.

The platform of the railroad station is legally regarded as private property between the railroad company and those of the general public who have no occasion to use it for the purposes of transportation; and I do not know of anything to justify the defendants’ assumption that they have the right to use the property of the railroad company, without compensation, and against the company’s protest, for the prosecution of their business for their personal gain. Contracts relating to the use of railroad propertj, similar, in effect, to the one under consideration, have been quite uniformly sustained, upon the theory that the grant by a railroad company to a single corporation or individual of the exclusive privilege of soliciting on its property the transportation of passengers and baggage, upon terms that do not interfere with the reasonable accommodations of its patrons, is regarded as a means devised for the convenience of the passengers and the company, which will conduce to the comfort and safety of the former and be an aid to the latter in the proper performance of its public duties; and because such an arrangement does not-interfere with defendants’ right to deliver passengers and baggage at the station, and to take therefrom such as they have previous orders for. Such an arrangement is not regarded as creating a monopoly, in the odious sense of that word, or as involving an improper use by the railroad company of its property. Donovan v. Pennsylvania Railroad Co., 199 U. S. 295; Old Colony Railroad Co. v. Tripp, 147 Mass. 35; New York Railway Co. v. Scovill, 71 Conn. 136; Heading v. Gallagher, 57 Atl. Rep. 225.

Assuming, as defendants claim, that complainant has a remedy at law, and that it can sue defendants for damages, it must be apparent that in any such action complainant could only recover nominal damages, because of the impossibility of accurately ascertaining its actual damage, and every trespass would give a new right of action, with the like result. The vexation and expenses of such actions, and the great multiplicity of suits resort to this remedy would produce, show that the rjbmedy at law is not adequate, complete or satisfactory. These considerations and the facts of the case justify this court in granting complainant the relief it seeks, and a decree will be advised in accordance with the prayer of the bill.


author: Garrison, J.

text:
    Ellen Wholey, complainant-respondent, v. Jeremiah Sullivan, defendant-appellant.
    [Submitted December 10th, 1917.
    Decided March 4th, 1918.]
    A deed of conveyance made by an aged, infirm and. ignorant grantor under an erroneous impression- as to its legal effect created by independent advice, upon which she was entitled to and did in fact rely, will be set aside if such facts are established by convincing proof.
    On appeal from a decree of the court of chancery advised by Advisory Master Fielder.

      Messrs. Benny & Cruden, for the appellant.

      Mr. James H. Dougherty, for the respondent.
   The opinion of the court was delivered by

Garrison, J.

The decree set aside a conveyance made by the respondent to the appellant in consideration of board, lodging and care during the grantor’s life. There is no question of fraud or undue influence; the conduct of the appellant throughout was open and fair. There is no question of absence of independent advice. In addition to private conferences with Judge Bobertson, who was her own legal adviser, the respondent was counselled by a Mr. O’Brien, an old friend and business adviser, who was called in for that purpose at the suggestion of Judge Bobertson. The respondent was old, infirm, deaf, unable to read, and incapable of determining for herself the legal effect of her deed taken in connection with a declaration of trust made by the grantee. She swears that her understanding was that the title remained in her until her death. Standing by itself this testimony would be far from convincing. It is, however, corroborated by cogent testimony, notably that of appellant’s witness O’Brien, who says that when asked by Judge Bobertson to explain the deeds to the respondent he did so under the impression that the property could not be sold until she died. This testimony was amplified upon .cross-examination as follows:

“Q. You said that' you were under the impression that Sullivan could not do anything' with the property until after her death?
“A. Yes, sir.
“Q. And isn’t that the way you explained it to Mrs. Wholey?
“A. Yes, sir.
“Q. And that is the only way you could have explained it?
“A. Yes, sir.”

The learned advisory master, with the parties and witnesses before him, accepted this testimony as clear and convincing proof upon which to set aside the deed of conveyance, which he advised upon terms from which neither party has appealed. In the conclusion thus reached we concur.

The decree of the court of chancery in the respects in which it is challenged by the petition of appeal is affirmed, with costs.

For affirmance — Garrison, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.

For reversal — None.


author:
Garrison, J.
     White, J.

text:
    Newark Trust Company, complainant-appellant, v. Lackawanna Investment Company, defendant-respondent.
    [Submitted December 15th, 1917.
    Decided March 4th, 1918.]
    A corporation consisting of Powell and Crocker made a mortgage to Crocker for the sole purpose of having him assign it to' the Newark Trust Company to secure -a loan for the benefit of the mortgagor. The-scheme, which involved the false representation that the mortgage was genuine and that the full amount was due thereon, was successful, and the mortgage was assigned to the trust company by Crocker as collateral to his $5,000 note and any other liability of his to the trust company. Later such other liability arose and the mortgage was foreclosed. — Held,. that the mortgagor had no equity superior to the legal rights of the trust company.
    On appeal from a decree of the court of chancery advised by Yice-Cliancellor Lane, whose opinion is recorded in 102 Ail. Hep. Hi.

    This is a hill to foreclose-,a mortgage made by the LackawannaInvestment Company to Poland D. Crocker and by him assigned to the Newark Trust Company as collateral security for the payment of Crocker’s note of $5,000 and any other liability of hiato the trust company,
    Additional facts found by the vice-chancellor are as follows:
    “The stock of the Lackawanna Investment Company was all owned by Eoland D. Crocker and one Powell. They and one-other, a dummy, constituted its hoard of directors, Powell was a member of the board of directors of the Newark Trust Company. Crocker was also a member of its board of directors and of its executive committee. He was its counsel and was as well the personal counsel of Powell. The Lackawanna Investment Company desired to obtain from the Newark Trust Company $5,000. Crocker represented to Powell that it would be easier to obtain a loan of $5,000 with a mortgage for $8,000 rather than $5,000 as collateral; that there should be this excess was rendered necessary by a rule of the banking institution known to Powell which required that the advance should not exceed eighty per cent, of the value of the collateral. The loan was granted; the mortgage pledged; the $5,000 was advanced and paid to the Lackawanna Investment Company, and this is the only sum that was ever paid on account of the mortgage. On the 12th day of May, 1914, approximately three years after the transaction hereinbefore referred to, the bank loaned $2,500 to one Ackor and took his note endorsed by Crocker. This note was never paid. Protest was waived and the indebtedness is an indebtedness of Crocker. The bank claims to hold the mortgage as collateral, not only to the $5,000 Crocker note, but as collateral to the Ackor note. There is no evidence that the bank advanced the money to Ackor upon the faith of its holding the assignment of the mortgage.” Upon these facts it was held that the equity of the mortgagor was superior to the legal rights of the bank as holder of the Ackor note.

      Messrs. Raymond, Mountain, Van, Blarcom & Marsh, for the appellant.

      Messrs. Lehlbach & Johnson, for the respondent.
   The opinion of the court was delivered by

Garrison, J.

The learned vice-chancellor dealt with this case as if it'had its inception in a debt due to Crocker by the investment company and secured by its mortgage, which, having been assigned to the trust company, was subject to the equities of the mortgagor against the assignor. In fine, he treated the mortgage as a security between the parties to it. The real transaction was far otherwise. There was no debt, and the mortgage purporting to secure one was a contrivance devised to deceive the trust company for the purpose and in the manner disclosed by the testimony. It was of the essence of the scheme thus disclosed that the trust company should be made to believe that the mortgage was genuine, and that the full amount was due thereon., The scheme, therefore, necessarily involved the making of a false representation. This false representation was made by both mortgagor and mortgagee, for this court, sitting as a court of equity, has said: “In order to establish a case of false representation, it is not necessary that-something that is false should have been stated as if it were tine. If the presentation of that which is true creates an impression which is false, it is, as to him, who, seeing the misapprehension, seeks to profit by it, a case of false representation.” Lomerson v. Johnston, 47 N. J. Eq. 312.

If this be true under the passive conditions stated in the text, how much more so must it be true when the misapprehension was actively contrived.

lYith the real nature of the transaction thus laid bare, we are in a position to see in their true light the equitable relations of the parties to this transaction when the mortgage is regarded as a security, which is the only light in which it is regarded by a court of equity. The mortgage was created for the sole purpose of serving as a security to the Newark Trust Company, to which it was to be assigned by Crocker. Hence, until it was so assigned, i. ewhile it was in the hands of Crocker, it was not, in the eye of equity, a mortgage, since it secured nothing. Crocker, while ostensibly mortgagee, was in fact a mere conduit through whom the mortgage was to reach the trust company and have vitality infused in it by securing the loan made upon the strength of it and any other indebtedness of the assignor to the bank.

Out of this situation two highly pertinent considerations arise —first, that the relation of mortgagor and mortgagee never having existed between the respondent and Crocker, no equity based upon that relation came into existence, and second, that as the mortgage became such for the first time in the hands of the trust company, the primary obligation secured b} it was a negotiable promissory note given to the trust company before maturity, and there is excellent authority for the proposition that the assignee of a mortgage under such circumstances holds it free from equities between the parties, although, as we have seen, in the present ease, no such equities existed.

These considerations are mentioned chiefly for the purpose of pointing out the diametrical difference that exists between the normal cases in which the equity of a genuine mortgagor arises and the present case; from which it follows that it is totally inadmissible to assume, by way of analogy, that because an equity arises in those cases it also arises in this case.

Equally inadmissible is it to construct an original equity for this mortgagor out of its conduct in this transaction. An equity has been variously defined, but always in terms of good faith and conscionable conduct. Chicanery, deceit and misrepresentation are not such stuff as equities are made of. To determine this is to decide that the respondent has no equity.

The court below decided that the appellant had no equity, and we now decide that the respondent has none. In this state of equilibrium, the legal rights of the appellant will be enforced by a court of equity under its maxim that where equities are equal the law will prevail, for there can surely be no greater equality between equities, within the meaning of the maxim, than their mutual non-existence. The trust company is entitled to enforce its mortgage as collateral to the Ackor note.

The decree of the court below is reversed and the record remitted for further proceedings in accordance with the views herein expressed.

White, J.

(concurring).

My vote in this case rests solely upon the presumption, in the absence of proof to the contrary, that the trust company being the holder of the contract making the assigned mortgage security for-subsequent obligations of the borrower at the time it accepted him as an endorser, accepted such endorsement on the faith or credit of such contract, and that, consequently, the endorser and the mortgagor who connived witb him axe both estopped by tbeir former misrepresentation from now saying that the mortgage was for a smaller sum than they then said it was for.

For affirmance — Minturn—1.

For reversal — Garrison, Swayze, Trenchard, Parker, Bergen, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 12.


author: Swayze, J.

text:
    Four Corners Building and Loan Association, complainant-respondent, v. Frank Schwarzwaelder, defendant-appellant.
    [Decided March 4th, 1918.]
    1. A 'building and loan association loaned money on a mortgage of a city lot; its solicitor certified that the mortgage was a first and valid lien; in fact, there was a prior mortgage held by an estate of which the defendant, one of the directors of the association, was an executor; the property was described by reference to the street lines as the only monument and by a number on a land company map ; the name of the. mortgagor in the mortgage held by the estate was different from the name of the mortgagor in the association’s mortgage; the defendant had nothing to do with making the loan; he had no actual knowledge that the property covered by the two mortgages was identical; he held as executor many .mortgages and in the course of his business examined many properties ; he knew his mortgages by street numbers and not by numbers on a land- company map; the association’s mortgage was accompanied by a regular abstract of title in which defendant’s mortgage was not mentioned, and attached to which was a certificate by the association’s soliei-. tor, then a lawyer in good standing, that the association’s mortgage was a first and valid lien. — Held, that the defendant could not be found guilty of negligence for failing to apprise the association of the existence of the prior mortgage; that the directors had the right to pursue the usual business custom and trust tlie solicitor to close the loan and record the mortgage, and that as the loss did not come until the solicitor turned aside the money from its proper destination — the satisfaction of the first mortgage — the association had already suffered the loss without the defendant having had any opportunity to prevent it, and he cannot be held for negligence.
    2. A building and loan -association loaned money on a mortgage of a city lot; its solicitor certified that the mortgage was a first and valid lien ; in fact, there was a prior mortgage held 'by an estate of which the defendant, one of the directors of the association, was an executor. The defendant had examined and valued the property for the purpose of a loan on the application, of one Wagner and had reported to the .association; the estate’s mortgage was given by Daly; the title was at the time of Wagner’s application in Crocker, the solicitor of the association ; the minutes of a subsequent meeting of the directors at which defendant was not present, recite that Wagner had sold the property (which was untrue) ; that all the committee, including the defendant, reported in favor of a loan to Sims (which was untrue as far as defendant is concerned). The defendant never actually^ had to do with the loan to Sims; his knowledge is claimed to have come from hearing the minutes with these false recitals read over at a later meeting;' this fact was not sufficiently proved, but if the defendant knew .all the facts, he knew the loan was large enough to enable Sims to. satisfy the prior mortgage to the estate, and up to the time the check of the association for the loan was cashed, might anticipate that the estate mortgage would be paid before the solicitor closed the loan with Sims; the defendant had no reason to anticipate that the solicitor would forge a discharge of the estate mortgage; when the check had been cashed and the money turned aside from the satisfaction of the prior mortgage, the loss was already incurred. — Held, the proximate cause of the loss was the rascality of the complainant’s own solicitor, and the defendant cannot be held for negligence.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lane, whose opinion is reported in 88 N. J. Eg. 212.

      Mr. Andrew Van Blarcom, for the complainant-respondent.

      Mr. Thomas S. Henry and Mr. Francis Child, for the defendant-appellant.
   The opinion of the court was delivered by

Swayze, J.

The complainant seeks to recover of the defendant the loss on two mortgages in which it had invested. This loss was caused by Crocker, the complainant’s solicitor, falsely certifying that the mortgages were first liens, when, in fact, there were prior mortgages which he had procured to be canceled of record by false discharges.

The case differs from cases brought by receivers in the interest of creditors or stockholders of which Williams v. McKay, 40 N. J. Eq. 189; 46 N. J. Eq. 25, is the leading instance. It differs also from cases brought by stockholders suing in their own right (Gerhard v. Welsh, 80 N. J. Eq. 203), and from cases where there was habitual neglect of duty, and the loss might have been prevented by proper attention; and from cases where the loan on its face was illegal or forbidden by the by-laws. The present case is more like Citizens Building Association v. Coriell, 34 N. J. Eq. 383. There the defendant was held liable for losses on loans made on personal security, which on their face were in violation of a by-law, but not liable for loss due to a defective acknowledgment of a mortgage because, as the chancellor held, the directors properly relied on the knowledge and attention of the' solicitor for the legality of the mortgages. In the present case, the proximate cause of the loss was the fraud of the solicitor; the complainant is seeking to hold the defendant for the fraud of its own agent, who either paid the money to the mortgagors improperly and without seeing to it that prior liens were lawfully discharged, or more probably embezzled that money himself. To sustain the complainant’s claim, reliance is had upon the fact that the defendant as one of the executors of an estate held a prior mortgage on each property. The real question therefore is whether the defendant was under any duty to the complainant to give actual notice of the existence of the mortgages held by the estate. Mortgages on two properties are involved, one of which may be called the Aschenbach East Orange mortgage, and the other the Sims-South Orange mortgage.

The Aschenbach mortgage was on a city lot on North 18th street, East Orange, described by metes and bounds referring to the street lines as the only monument; the number of the section and lot on a land company’s map is also stated. There are no other identifying marks. The prior mortgage held by the estate of which defendant was an executor was given by William H. Daly. It is not shown'that the defendant had anything to do with making the Aschenbach loan; the appraisement was made by a committee of which the defendant was not a member. It is not claimed that he had any actual knowledge of what property was covered by the Aschenbach mortgage, but it is sought to hold him on the theory that he was negligent in failing to discover that a mortgage given by Aschenbach was on the same property on which the estate held a prior mortgage given by Daly. As there was no similarity in the names of the two mortgagors, he can only be held in case we are prepared to say that he ought to have examined the description in the Aschenbach mortgage and recalled that it was the same description as in the Daly mortgage.

Oases might arise where a director of a building and loan association should be held even to so stringent a liability. It would depend on the circumstances of each case. Here the defendant as executor held many mortgages; in the course of his business he examined many properties; the description in the Aschenbach mortgage contained nothing to excite attention; it must have differed little from the description of adjoining lots; the defendant knew his mortgages by street numbers and not by numbers on a land company map. The name of the mortgagor was different. Above all that, the Aschenbach mortgage was accompanied by a regular abstract of title in which the Daly mortgage was not mentioned, and a certificate by the complainant’s solicitor, then a lawyer in good standing, that the Aschenbach mortgage was a first and valid lien. We think that the most that could be required of defendant by way of care upon an examination of the affairs of the association, would be to ascertain that the usual papers, bond, mortgage, insurance policy and abstract were in hand, and that the solicitor had certified as he had. In most cases this would be more satisfactory even than an actual reading of the mortgage.

But even if the defendant could be found guilty of negligence in this respect, there would still remain an insuperable difficulty in the complainant’s way. It is not claimed that the defendant should have been presbnt when the mortgage was executed and the money paid. As business is done, that would be obviously impracticable. The directors had the right to pursue the usual business custom and trust the solicitor to close the loan and record the mortgage; in fact, such were the solicitor’s duties under the by-laws. He alone could properly attend to paying off prior encumbrances and making sure that complainant’s mortgage was a first lien. The loss did not come until the solicitor turned aside the money from its proper destination, the satisfaction of the first mortgage, and either wrongfully paid it to Aschenbach or embezzled it himself.

When the money was thus turned aside, the association had already suffered the loss without the defendant having had any opportunity to prevent it. He might, indeed, have subsequently made an examination and discovered that the mortgage was not a first lien, but there is nothing in the case to show that this discovery could have made it possible for the complainant to prevent the loss. The solicitor could hardly have been solvent; his dishonesty speaks loud to the contrary; at any rate, in the absence of evidence, we cannot find that he was solvent.

As to Aschenbach, no suggestion is made that recovery could ever have been had of him. If it could, complainant ought not to seek it of defendant. The result is that if we could find negligence on the part of the defendant, it necessarily came too late to be the cause of complainant’s loss, and the decree below was wrong. This is not a punitive proceeding, but an attempt to recover actual damages caused by defendant’s negligence.

The facts as to the Sims-South Orange property are somewhat more complicated. The property belonged, in 1909, to Roland D. Crocker, who was the solicitor of the complainant. He convej'ed to Mabel Daly, by deed dated October 1st, acknowledged October 11th and recorded October 19th, 1909. Mabel Daly and her husband, William H. Daly, mortgaged to the defendant an.d his eoexecutor October 11th, 1909, by a mortgage dated and acknowledged on that day and recorded October 21st, 1909. The property was then reconveyed by the Dalys to Crocker by a deed dated October 11th, acknowledged November 19th, and recorded November 20th, 1909, and the title remained in Crocker until as late as April 1st, 1913, when he conveyed it to Sims. On October 10th, 1912, Louis Wagner applied to the complainant for a loan on this propertjq which, then belonged to Crocker, subject to the defendant’s mortgage. The defendant and two others were appointed a committee to appraise the-property. The defendant alone did so. Thereupon the directors ordered that the committee be continued, and report to the officers who were given power to grant the loan if a satisfactory report was made; and later, the officers were empowered to grant such amount as should be unanimously recommended by the committee. The defendant never formally joined with his fellow-committeemen in recommending a loan. Wagner never owned the property; and proceedings for a loan to him were dropped. It seems probable that both Wágner and Sims were merely tools of Crocker. On April 35th, 1913, the complainant’s minutes "recite that Wagner had sold the property to Sims (which was untrue), that all of the committee (including the defendant) reported in favor of a loan to Sims (which was untrue, as far as the defendant is concerned) ; it was then ordered that the committee’s recommendation be received and granted. The defendant was not present at this meeting. He never actually had to do with the loan to Sims. The effort is to bind him by the acts of the others because at a later meeting on May 33d, at which he is' said to have been present, the minutes of the meeting of April 35th are said to have been approved. The fact is doubtful, since the approval of May 33d seems on its face to relate to a special meeting of April 30th, and not to the regular meeting of April 35th. The secretary, however, testifies that the approval of May 33d covers both the meetings April 35th and April 30th. The defendant denies that he ever heard the resolution of April 35th read. The point is of some importance, since it is all there is to show that the defendant knew anything about a Sims loan. In view of the defendant’s denial, and the secretary’s admission of the careless way in which the minutes were kept, we think the complainant has failed to sustain the burden of proof. This question, however, loses much of its importance in the view we take of the case. If :we assume that the defendant knew that the Sims loan was to be on the same property as the abandoned Wagner loan, and that he ought to have recalled that the estate held a’ mortgage given by Daly on the same property, that would not charge him with knowledge that the Sims mortgage would be a second mortgage. The amount proposed to be loaned was $1,500 more than the mortgage held by him and his coexecntor. He had the right to assume that his mortgage would be paid out of the money loaned by the association on the new mortgage. He must assume that, if he believed that Crocker, the solicitor, was an honest man; the complainant itself so held Crocker out by making him its solicitor. If we assume that the defendant knew all the facts that the most careful investigation would have disclosed, he knew that, although the loan had been authorized in April, the cheek had not been cashed until July 10th. Hp to that time he certainly might anticipate that his mortgage would be paid, and it would serve no useful purpose and would no doubt be regarded by Ms fellow-directors as a foolish intrusion, for him to inform them of the existence of a mortgage of which the law charged them with constructive notice. Their very proper answer to him would be, “our solicitor will find the existing liens when he examines the title and attend to their satisfaction.”

The prior lien would have been satisfied in the ordinary course; but tbe complainant’s solicitor, instead of taking the ordinary course, undertook to satisfy the record by a forged discharge. The defendant had no reason to anticipate the solicitor’s crime. Until the check had actually been cashed, and sufficient time bad elapsed for Crocker to pay off defendant’s mortgage without bis in fact doing so, tbe defendant might properly trust that the complainant’s own solicitor would protect his client’s interests. A delay of three months is not unusual when prior liens have to he satisfied. When the check was cashed and the money misappropriated, the loss was already incurred, as in the case of the Aschenbacli mortgage. Nothing that the defendant could do would save the complainant from the loss. If there had been proof that by prompt action the money could have been saved, the case would be different; the failure to take prompt action might, he negligence of the defendant intervening between Crocker’s act and the final loss to complainant. In that event, the failure to act promptly might well be the proximate cause; but in the absence of such evidence, the proximate cause, is the rascality of the complainant’s own solicitor.

Tlie decree must be reversed and the record remitted in order that there may be a decree dismissing the bill. The defendant is entitled to costs in both courts.

For affirmance — None.

For reversal — Garrison, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.


text:
    In the matter of the estate of Charles G. Diament.
    [Decided March 4th, 1918.]
    A codicil is not a revocation of a will but a republication thereof except as altered ; and where a testator executed a will and three codicils, and afterward revoked the last codicil, the will and the first two codicils wore -properly admitted to probate and the third codicil properly rejected.
    On appeal from a decree of the prerogative court.

      Mr. Rex A. Donnelly and Mr. John IF. Wescolt, for the appellant.

      Mr. Leroy W. Loder and Mr. James S. Ware, for the respondents.
   The opinion of the court was delivered by

Swayze, J.

The question arises on the offer to probate the will and codicils of Charles G. Diament. The orphans court admitted to probate the will and the two earliest codicils and rejected the last codicil.

The prerogative court affirmed the decree.

The last codicil was not produced. "VVe are satisfied, as the lower courts were, that the testator destroyed this codicil with intent to revoke it. The question presented is what effect this had upon the will and the two earlier codicils. The case was treated in the lower courts and argued here as if it were a case of the revocation of an earlier by a later will and the subsequent cancellation of the latter. Such is not the situation.

A codicil is so far from being a revocation of any existing will and codicils that it is a republication thereof except as altered and frequently, as in the first codicil to the present will, ratifies and confirms the former document except so far as altered. Republication by a codicil was most important before the statute provided that a will might pass real estate acquired after its execution. How important this effect of a codicil still is may be seen by a glance at Jarman’s chapter on Republication. 1 Jarm. (R. & T.) 362.

We have, then, instead of the somewhat difficult question of the effect of the cancellation of a later will upon an earlier one, the comparatively simple question of the construction of a will thrice republished, and codicils republished, one of them once and one of them twice.

We may treat the case as if all three codicils were actually before us with the last duly canceled by the testator. The result is simple. The third codicil must be rejected even as the canceled portions of Erothingham’s will were rejected. Frothingham’s Case, 76 N. J. Eq. 331.

Let the decree be affirmed, with costs.

For affirmance — Garrison, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.

For reversal — None.


text:
    Albert D. Cuskaden et al., complainants-respondents, v. Millard F. Steelman et al., defendants-appellants.
    [Argued November 22d, 1917.
    Decided March 4th, 1918.]
    1. A testator created a trust fund for the benefit of his wife and three children, and directed that on the death of his wife the share (of income) paid to her be equally divided among his children or the survivor or survivors of them during, their lifetime. — Held, following the settled rule that survivor means survivor at the death of the life tenant, and that taking the whole will into consideration the word is plainly used in no other sense. Stout v. Cook, 79 N. J. Eq. 573, followed..
    2. By a codicil to his will a testator revoked a bequest to a son and directed that the share of his estate given and devised in trust to his jSaid son should be held in trust for the son’s children. — Held, that the bequest to the children includes the share held for the widow, which after her death was to be divided among and paid to the testator’s children or the survivor or, survivors of them during their lifetime.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning, whose opinion is reported in ante p. 93.

    The bill is for the construction of the will and codicil of Derestus B. Steelman. The essential parts are as follows:
    “Second It is my will and I do direct that my beloved wife. Marietta Stfeelman, be permitted to occupy my home, known as No. 12, South Ohio Avenue, in said Atlantic City, during her lifetime, and I hereby make a charge upon my estate the cost of the up-keep, carrying charges and all municipal assessments which may be imposed upon my said home during the lifetime of my said wife.
    “Third: I give and devise unto Albert D. Cuskaden and Albert J. Feyl all my property real, personal and mixed, subject to item two hereof, in trust as follows:
    “A. To manage, sell, invest and reinvest the same, and to pay the rents, issues and profits thereof to my said beloved wife, Marietta Steel-man, and my children, John D. Steelman, Annie M. Cuskaden and Millard F. Steelman, during their respective lifetimes, share and share alike, hereby directing my trustees and executors to pay to each, his or her respective share monthly, 'beginning six months after my decease.
    “B. Upon the death of my said wife I direct that the share theretofore paid to her shall be -equally divided among and paid to my said children, or the survivor or survivors of them during their lifetime..
    “C. Upon the death of any or either of my said children, leaving issue him or her surviving, then and- in such event I direct that such share of my estate upon which he or she shall have been receiving the rents, issues and profits, shall become the absolute property of the issue of such deceased child; should either of my said children die without issue, him or her surviving, then and in such event I direct my executors and trustees to pay the share theretofore paid to said deceased child to the survivor or survivors of my said children, share and share alike during the life or lives of said survivor or survivors.
    “D. Should any or either of my said children die without issue leaving him or her surviving a wife or husband then and in such event I direct that one-half of such share of my estate upon which he or she shall have been receiving the rents, issues and profits, shall become the absolute property of such wife or husband, and that the rents, issues and profits arising from the other one-half of said share theretofore paid to said deceased- child to be paid to the survivor or survivors of my said children, share and share alike, during- the life of said- survivor or survivors.
    “First: I do hereby ratify and confirm my said last will and testament in all respects, save so far as any part thereof shall be revoked or altered by this • present codicil, and in. particular, save so far as the same relates to the giving and devising of any part or portion of my estate in trust for my son, John D. Steelman, during his lifetime, as to which particular I do hereby revoke and alter my said will as follows: It is my will and I do direct that the part of share of my estate in and by my said will given and devised- in trust to my said son, John D. Steel-man, shall be held in trust for Edna Feyl and Marion Steelman (children of my said son, John D. Steelman), and the rents, issues and profits thereof paid- to them during the lives of my beloved wife, Marietta Steelman, and my children, Annie M. Cuskaden and Millard F. Steel-man, or the survivor of them, and upon the happening of the last mentioned event the said Edna Feyl and Marion Steelman shall be entitled-to receive the principal so held in trust for them, share and share alike.
    “Second: Should either the said Edna Feyl or Marion Steelman die without issue before receiving her share of said principal, then and in such event the share of said decedent, 'both principal and interest, shall be paid to the survivor in accordance with the terms of my said will and. of this codicil thereto.”
    The will is dated May 24th, 1912; the codicil, February 18th, 1914. Annie M. Cuskaden, the testator’s daughter, died March 30th, 1916; the widow, December 5th, 1916.

      Mr. George A. Bourgeois, for the respondents Millard E. and Fred S. Cuskaden.

      Mr. Lewis Starr, for Edna Feyl, individually, and as guardian of Marion Steelman.

      Mr. Clarence L. Cole and Mr. Millard F. Steelman, pro se, for the appellants.
   The opinion of the court was delivered by

Swayze, J.

The questions now to be determined relate to the distribution of that part of the estate which was given in trust for the widow for life. No question was made or argued as to the devise and bequest relating to the house contained in the second item of the will, and no questions are raised with reference thereto.

The first question is whether the income of the trust fund bequeathed in the third item, clause B, was payable after the widow’s death in three shares, or whether Mrs. Cuskaden’s children failed of any right thereto by reason of the death of their mother before the widow. The words of clause B are plain enough. The testator directs that the share theretofore paid to his wife shall be paid to his children or the survivor or survivors of them during their lifetime. It is settled that in such a case the word "survivor” means survivor at the death of the life tenant. Stout v. Cook, 79 N. J. Eq. 573, had been decided only a few months before this will was made. We there said that this meaning, which is the ordinary and natural one to be given to the words, must prevail unless upon taking the whole will into consideration the words are plainly used in some other sense. The only question open to us now is whether the words are plainly used in some other than the natural and established sense. But for the opinion of the learned vice-chancellor, we should have thought this question no longer open since the decision in Ashurst v. Potter, 53 N. J. Eq. 608; 54 N. J. Eq. 699, and the decision above cited in Stout v. Cook. The argument in those cases for departing from the natural and established sense of the words was quite as strong as it is in the present ease, and we should content ourselves with deciding this case on the authority of those, were it not for the respect we entertain for the opinion of the vice-chancellor. This has induced us to examine the will with greater care, but without any different' result. The only ground for asking us to attribute an unusual meaning to the word “survivor,” is that the obvious scheme of the will is to secure equality, and that this cannot be done by attributing the plain and usual meaning to the words. The premise is not sound. It cannot be claimed that the testator meant to secure equality among his children, since it is apparent upon the face of the will itself that the ordinary sense of the words would not lead to equality among the children in the probable event which has in fact happened — the death, of one child before the mother. To say that the words must be used in an unusual sense to produce an equality which does not appear to have been the testator’s intent until the unusual sense has been adopted, is clearly to argue in a vicious circle. And if we consider will and codicil together, as we must, in ascertaining the testator’s final wish, we at once find that one son is totally disinherited, and the rights of his two children, the testator’s grandchildren, in the fund created by clause B are subject to three life estates — their grandmother, their uncle and their aunt, while the rights of the other grandchildren, children of Mrs. Cuskaden, are subject only to two life estates, their grandmother and their mother.

The respondent seeks to escape from this difficulty by contending that what the testator desired was equality between the different stocks; and that the word “children” should be read “stirpes.” The extraordinary results of this proposition appear if we in fact make the change. Clause B will then direct that after the widow’s death the share (income only) theretofore paid to her “shall be equally divided among and paid to my said stirps” (or, perhaps, we must say “stirpes*”) “or the survivor or survivors of them during their lifetime” (i. necessarily, on this construction the lifetime or the stirps or stirpes). The very statement shows the strain, not to say more, of the construction contended for. But the testator says, “my children.” The construction which would substitute “my stirps” would produce a result which would not correspond with the respondent’s wishes; and the substitution of “my stirpes” would lead to a conflict between the singular pronoun and the plural word; no man can sensibly speak of “my stocks.” The “stock” is all his own.

But to go further: The testator directs that the share be paid “during their lifetime.” It would be a great strain to speak of the lifetime of a stock; if it were permissible, it would lead to the difficulty that there would be no bequest of the corpus. When the stock died, the corpus would escheat. Moreover, the survivor is not by the will declared to be a survivor of a stock but “survivor or survivors of them.” The pronoun can only refer to “children” as its antecedent.

It seems almost a travesty to make, the actual substitution of "stirps” for “children.” We need not dwell on it.

We pass to clause C. That clause directs that upon the death of a child leaving issue, the share upon which the child shall have been receiving the rents, issues and profits shall become the absolute property of the issue. No provision is made for any part of the estate upon which the child has not been receiving the rents, issues and profits. Such portion — in this case the fund in controversy upon which the widow received the rents, issues and profits until after Mrs. Cuskaden’s death — is not provided for, and if the respondent is right, the testator died intestate as to that. One reason of the testator for not having a child who died before his widow share in the fund, probably was that when that child’s share became the absolute property of the issue, it became free from the liability imposed by the first item on the estate to meet the carrying charges of the home. These charges falling on the other shares, the testator naturally thought those shares ought to be rewarded by sharing in the fund provided for the widow.

If we were at liberty to indulge in a guess at the testator’s intent as distinguished from the meaning of the words he used, we think a better guess than the respondent’s would be that he meant to take care of his children as long as they lived by providing a trust fund for their benefit, which might be increased in the case of survivors on the death of the widow, while the portions of grandchildren might vary, depending upon whether their parents survived the testator; and those who failed to profit by an increase-'" of the fund on the death of the widow, would have the advantage of coming into the absolute ownership of their share and escaping the carrying charges of the home, at an earlier date. We are clear that the vice-chancellor fell into error in this respect.

As to the codicil we find little difficulty. It plainly directs that- the trust fund created b3 the will for John D. Steelman be held in trust for his children, and the rents, issues and profits paid to them during the lives of the testator’s widow, Mrs. Cuskaden, and Millard E. Steelman. The only question is whether this trust fund includes a share of the fund held for the widow. We see no difficulty in holding that the part or share of the estate in and by the will given and devised in trust to John D. Steelman includes a share of the fund in which his mother had a life right and he had a contingent remainder. The intent of the codicil was to put liis daughters in his place until the termination of the life estates. In this respect, and as to counsel fees and costs, the decree should be affirmed. In other respects it should be.reversed.

For affirmance — None.

For reversal — Garrison, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams — 11.


author: Trenchard, J.

text:
    Christine Dietrick, petitioner and appellant, v. Arthur C. Dietrick, defendant and respondent.
    [Submitted December 10th, 1917.
    Decided March 4th, 1918.]
    1. Permanent alimony is allowed as a means of enforcing the continuing duty of support which the husband owes to the wife, and of which he is not permitted to absolve himself by his own misconduct, although that misconduct results in a dissolution of the marriage, and the wife, with or after ai decree of divorce in her favor, is entitled to such an allowance of alimony as the circumstances of the parties and the nature of the case renders fit, reasonable and just.
    2. The wife of a dentist with an established practice is entitled with her decree of divorce to an allowance of permanent alimony, notwithstanding the fact that she has a reasonable expectancy of about $5 a week as net income from property owned by her.
    3. No rigid standard can be set up whereby to measure in every case the amount of permanent alimony for the support of the wife, but it is usually about one-third of the husband’s income. The amount is not fixed solely with regard, on the one hand, to the actual needs of the wife, nor, on the other, .to the husband’s actual means. There should be taken into account the physical condition, and social position of the 'parties, the husband’s property and income (including what he could derive from personal attention to 'business), and also the separate property and income of the wife. Considering all these, and any other factors' bearing upon the question, the sum is to be fixed at what the wife would have a right to expect as support, if living with her husband.
    4. Where a husband has no property or income other than a net income of about $45 a week from his practice as a dentist, and the wife lias only a reasonable expectancy of about $5 a week as net income frqm property which her husband gave her during coverture, an allowance of $10 a week as permanent alimony is proper upon a decree of divorce in her favor.
    On appeal from a decree of the court of chancery advised by Advisory Master Charles J. Roe.

      Mr. Alexander Simpson, for the appellant.

      Mr. James A. Butler, for the respondent.
   The opinion of the court was delivered by

Trenchard, J.

This is the appeal of Christine Dietrick from a final decree in her favor in a divorce proceeding which, although granting her a divorce on the ground of the adultery of her husband, denied her permanent alimony.

We are of the opinion that the learned advisory master erred in not awarding alimony.

He declined to do so because the wife was possessed of a house and lot given her by her husband during coverture. But that fact did not justify such refusal in the circumstances of the present case.

An examination of our Divorce act (Comp. Stat. p. 2035 § 25) shows clearly that permanent alimony is allowed as a means of enforcing the continuing duty of support which the husband owes to the wife, and of which he is not permitted to absolve himself by his own misconduct, although that misconduct results in a dissolution of the marriage. It follows, of course, that the wife, with or after a decree of divorce in her .favor, is entitled to such an allowance of alimony as the circumstances of the parties and the nature of the case renders fit, reasonable and just.

In the present ease it appears clearly that the wife’s reasonable expectancy of net' income from her house and lot was about $5 a week, and that she had no other property or income. Her husband was a dentist, with an established practice and fairly prosperous, and it is manifest that justice requires an allowance to her.

No rigid standard can be set up whereby to measure in every case the amount of permanent alimony for the support of the wife, but it is usually about one-third of the husband’s income. The amount is not fixed solely with regard, on the one hand, to the actual needs of the wife, nor, on the other, to the husband’s actual means. There should be taken into account the physical condition and social position of the parties, the husband’s property and income (including what he could derive from personal attention to business), and also the separate property and income of the wife. Considering all these, and any other factors bearing upon the question, the sum is to be fixed at what the wife would have the right to expect as support, if living with her husband. Richmond v. Richmond. 2 N. J. Eq. 90: Boyce v. Boyce, 27 N. J. Eq. 433.

In the case at bar the evidence satisfies us that the husband’s net income from his practice is about $45 a week, and that he has no other property or income. It also satisfies us that the wife has no property or income other than a reasonable expectancy of about $5 a week as net income from the property given to her by her husband during coverture. Taking into consideration these and all the other factors proper to consider under the rule stated, we conclude that an allowance of $10 a week should be made as and for the permanent alimony of the wife.

The decree below will be reversed, with costs, and the record remitted to the court below, to the end that a decree be entered in accordance with this opinion."

■For affirmance — None.

For reversal — Garrison, Swayze, Trenchard, Parker. Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner — 13.