text:
    Egg Harbor Building and Loan Association v. Charles Baake et al.
    [Decided February 16th, 1907.]
    1. Since the right of a building association to impose fines against a defaulting stockholder is statutory, the legislature may control enforcements of fines, and P. L. 1903 p. 473 § 43, limiting the amount of fines that may be imposed against a defaulting stockholder, and section 56 (¡p. 477), providing that the provision shall apply to all associations, prevents a building association from imposing further fines, though the defaulting member’s bond and mortgage were executed before the passage of the act.
    2. The bond of a member of a building association did not provide for the payment of fines. The mortgage securing it recited that it conveyed real estate subject to the right of redemption on the member paying the principal sum, together with interest, monthly dues and fines, without referring to the by-laws of the association.—Held, that a decree foreclosing the mortgage could not include therein fines.
    3. The by-law of a building association providing that every stockholder neglecting to pay his monthly dues, interest, &c., shall forfeit and pay the additional sum of two per cent, per month is ambiguous for failing to specify the principal sum on which the two per cent, is to be calculated, and will not be enforced.
    On bill to foreclose. Hearing on order to show cause wby final decree should not be opened and corrected as to amount due complainant.

      Mr. Ulysses G. Styron, for the applicant.

      Mr. William M. Clevenger, for the respondent.
   Bergen, Y. C.

The complainant in this cause filed its bill of complaint against the defendants for the purpose of foreclosing a building and loan mortgage given to secure the principal sum of $3,000. The date of the bond, as well as the mortgage given to secure its payment, is December 18th, 1902. No interest was paid after February, 1903, and the master reported as due the complainant the principal sum of $3,000, with interest from February 10th, 1903, to December 10th, 1906, making a total of $3,690, upon which report the decree complained of was made. It is admitted that after the foreclosure proceedings were instituted, and in March, 1906, the defendants paid to the solicitor of record $500 without, so far as appears, any application of the payment, whereupon the solicitor of the complainant paid the money to his client, who appropriated $442.04 in payment of fines which it had charged against the stock of the corporation held by the defendants and assigned to the complainant as a collateral to the payment of the loan in the manner usually followed by building and loan associations, and $57.96 on account of monthly premiums due and unpaid on account of such stock. The defendants insist that such application was erroneous because the payment was made after the complainant had elected to consider the principal and interest of its mortgage due, and therefore the payment to the solicitor who was employed to enforce the collection of the principal and interest could only be applied towards the liquidation of the particular claim, the payment of which he was then enforcing by foreclosure proceedings. The defendants also insist that the complainant is not entitled to charge them with any fines, or if such right existed, it did not reach the extent claimed by the complainant. The method adopted by the complainant in charging fines was cumulative. The account began in April, 1903, at sixtjr-seven cents, and amounted in March, 1906, to $442.04. This result was reached by charging each month two per cent, on the total amount of the arrearage, each item of which making up the total having been previously charged a fine at the same rate.

'Passing for the present the question of the right of this complainant to charge any fines under its constitution and by-laws, it is perfectly clear that every fine charged after October, 1903, is erroneous, if the act of the legislature of this state concerning building and loan associations, approved April 8th, 1903 (P. L. 1903 p. 457), has any application. Section 43 of that act declares that

“if a member of any such association of the state, or doing business therein, shall fail, for six successive months, to pay his periodical installment, his membership in such association shall, at the option of the board of directors, thereupon cease and determine, hut in no case shall further fines or penalties he charged against his account.”

It is urged on behalf of the complainant that as this bond and mortgage were executed before the act was approved it cannot affect this loan. Section 56 of the same act provides that its provisions relating to building and loan associations of this state shall apply to all such associations-organized under any law of this state, and manifestly includes, so far as the legislature had the power to do it, the complainant corporation. The right to impose fines against a defaulting stockholder is entirely statutory, and in its nature penal. In my opinion, the legislature has the right to control the enforcement of the penalty, and certainly a court of equity will not give aid to a penalty which the lawmaking power has discountenanced and from which it has withdrawn its support. Therefore this complainant was not entitled to charge fines for a longer period than six months after April 8th, 1903, and having applied defendants’ payment in satisfaction of an unlawful claim, the decree which recognizes, through a mistake of the master, this erroneous application should be corrected.

These foreclosure proceedings are directed towards the collection of the principal sum of the bond, with interest. The bonA does not provide for the payment of any fines, and a satisfaction of the bond, according to its condition, would not require the defendants to pay them. The mortgage, after reciting the bond, conveys the real estate, subject to the right of redemption if the defendants pay the principal sum

“on the day and time hereinbefore mentioned and appointed for the payment thereof, together with interest for the same, * * * and shall pay all monthly dues on stock, installments of premium, interest and fines.”

The word “hereinbefore” manifestly refers to the bond as recited in the mortgage, for in no other place therein is there any time mentioned as the payday. While the word “fines” appears in the proviso of the mortgage, there is nothing in the instrument which fixes their amount or authorizes their imposition, nor does the redemption clause in the mortgage refer to the by-laws or constitution of the complainant association, or undertake to make either of them a part of the obligation. The by-law on this subject, to which I shall refer, merely provides that shareholders shall pay fines for defaults. It does, not declare that fines may be collected out of the proceeds of sale of property pledged to secure a loan made to the member in default, and is subject to the criticism made by Mr. Justice Dixon, speaking for the court of errors and appeals, in Bowen v. Lincoln Building,and Loan Association, 51 N. J. Eq. (6 Dick.) 272, 280.

After carefully considering the question whether the complainant is entitled, under its constitution and by-laws, to charge fines, I have reached the conclusion that the power does not exist. The only by-law of the complainant corporation on this subject is to be found under article 9, section 2, which reads as follows:

“Each and every stockholder, for neglecting to pay his monthly dues, interest, premium and other charges, shall forfeit and pay the additional sum of two per cent, per month.”

This by-law establishes a forfeiture which must be strictly construed, and will not be aided by a liberal interpretation. It will be observed that it does not state upon what principal sum the two per cent, is to be calculated. The complainant interprets it to mean two per cent., not only upon the monthly dues, but upon the monthly total of all arrearages, upon the separate items of which the fines had been already levied, but we can, with equal propriety, read it to mean a fine to the extent of two per cent, per month upon the sum in default for the month, and not upon the aggregate sum of all defaults, and it would not be unreasonable to argue'that under this by-law the penalty could be levied upon the principal sum of the debt, the expression “the additional sum of two per cent, per month” means a per centum charge upon some uncertain principal sum. ■ This by-law is so uncertain as to- which item or items the forfeiture shall attach that it deserves no assistance from a court of equity, and in my judgment it is too ambiguous to afford any support to the charges made by the complainant against the defendants’ stock on account of fines.

As the complainant has made a misapplication of the sum of $442.04, I think the defendants are entitled to have it applied where they now demand it shall be, and where I am strongly inclined to believe, considering the circumstances under which it was paid, it was first intended to 'be applied, and that is towards the reduction of the interest due on the mortgage.

The. final decree will be opened, permitting this correction to be made, and at the same time another objection to the decree, which the complainant admitted on the argument was well founded, can also be made.


source: Caselaw Access Project

author: Bergen, Y. C.

license: Public Domain

text:
    Martha F. Wahl v. Franklin P. Stoy.
    [Submitted February 5th, 1907.
    Decided March 5th, 1907.]
    1. A husband and wife owned adjoining lots in severalty. As a part of a sale of the husband’s lot he and his wife executed an agreement reciting that one of the considerations of the conveyance was that no building should at any time be erected on the wife’s lot nearer than five feet of the dividing line. The contract was originally intended to be signed by the husband alone, but the wife’s name was subsequently interlined in ink as a party of the first part, though the other changes necessary to make the agreement conform to such change were not made, so that the covenants as written appeared only to bind the husband.—Held, that the contract, construed in accordance with the intent of the parties, was sufficient to bind the wife.
    2. Where a husband and wife owned adjoining lots in severalty, and, as part of a sale of the husband’s lot, the wife joined in a contract restricting the use of her lot by. prohibiting an erection thereon less than five feet from the division line, her dower interest in her husband’s lot constituted a sufficient consideration for her agréement, and was sufficient to bind' her property by such restriction.

      3. Where an agreement imposed a building restriction on defendant’s vendor, such restriction might be enforced by injunction against defendant who took with notice,, though the agreement was not recorded.
    4. At the time defendant purchased his lot, which adjoined plaintiff’s, property, the vendor’s husband informed him that there was a restriction on the lot covering about five feet. Defendant then asked if the restriction prevented him from building a bay-window, and was informed that it related only to the body or wall of defendant’s house. Defendant took no steps to ascertain the nature of the restriction from complainant,, which in fact prohibited the construction of any part of a building nearer than five feet of complainant’s west line.—Held,, that defendant was. charged with notice of the restriction as it in fact existed.
    5. Where defendant had notice of a covenant binding his lot, prohibiting the erection of a building within five feet of complainant’s line, a new deed procured by defendant from his vendor for the purpose of curing an. alleged mistake as to such restriction in the original deed, reciting that the restriction only restrained the erection of the main wall of defendant’s building nearer than five feet from the line, was ineffective to alter-the original restriction.
    On bill for injunction to restrain defendant from violating restriction contained in deed. Final hearing on pleadings and proofs.

      Messrs. Thompson •& Dole, for the complainant.

      Messrs. Godfrey •<& Godfrey, for the defendant.
   Bergen, Y. C.

Alfred C. McClellan was the owner of a lot of land fifty feet in width fronting on Pacific avenue, in the city of Atlantic City,, and his wife Mary of a lot forty feet in width, adjoining on the-west of her husband’s lot. By their deed dated February 2d, 1904, in consideration of the sum of $35,000, they conveyed to-the complainant the husband’s lot. On the same day an agreement was drawn, signed and acknowledged in due form by McClellan and his wife as parties of the first part, by the terms of' which after, among other matters, reciting the conveyance to the-complainant, and that one of the considerations of that purchase-was that no building should at any time be erected nearer than five feet of the westerly line of the lot that day conveyed to complainant, the party of the first part, agreed that no building to-be thereafter erected on the adjoining lot should be erected nearer than five feet from the westerly line of complainant’s lot.

On September 1st, 1904, Mary A. McClellan and her husband conveyed her lot to the defendant. This deed contained the following stipulation,

“subject nevertheless to the condition and restriction that no building, or any part of a building, shall be erected within five feet of the easterly line of the above-described premises.”

And on the 13th day of June, 1905, a deed was executed by the grantors last named to the defendant, which after reciting that the above restriction was inserted in the former deed by inadvertence and mistake, and declaring that it was not the purpose and intention to restrict the five feet mentioned as to the eaves, bay-window or similar projections of any building to be erected on said land, granted, conveyed, released and confirmed to the defendant the premises described in the former deed subject to the restriction “that the main wall of no building shall be erected within five feet of the easterly line of the above-described premises.”

The defendant has so placed his building that the eaves and a bay-window occupy a part of the five feet which the complainant insists her agreement forbids, and this bill is filed to compel the defendant to remove these encumbrances.

The first point raised by the defendant is that the covenants in the contract restricting the use of the wife’s land all run in the name of the husband, and cannot bind the wife, the owner of the property sought to be restricted, even if it was an effective agreement in other respects. As the agreement is the foundation of complainant’s claim, this question must be first met and disposed of. The original contract has been put in evidence, and an examination of it shows that the draughtsman, at the time of its preparation, must have been under the impression that the title to the land sought to be restricted by the agreement was in the husband, and that he alone was to execute it, for the paper is typewritten, and the name'of the wife, as a party of the first part interlined in ink, while other changes necessary to make the agreement conform to the change in the first clause were not made, and the executed contract stands precisely as it was first drafted, with the exception that the name of the wife is inserted as one of the parties of the first part.

There was but one purpose sought to be accomplished by this agreement, and that was a covenant that the owner of the lot referred to in it would not erect on it any building nearer than five feet of the westerly line of the lot sold to the complainant, and it is a rule of construction that if the court, with knowledge of the situation in which the contracting parties stood at the time of executing the agreement, and with a full understanding of the force and import of the words, can ascertain the meaning and intention of the parties from the language of the instrument, it is its duty to determine the right of the parties in accordance therewith. Culver v. Culver, 39 N. J. Law (10 Vr.) 574.

The contract, in which the wife is one of the parties of the first part, recites that Alfred C. McClellan and Mary A., his wife, had conveyed to the complainant a lot of land fifty feet-front, located at the northwesterly corner of Pacific and States avenues, and that one of the considerations which induced the complainant to purchase that lot was that no building should at any time thereafter be erected nearer than five feet of the westerly line of the lot so conveyed to her, and also that the party of the first part was the owner of the land immediately adjoining such westerly line for a distance of forty feet along Pacific avenue. Following these recitals,

“tlie party of the first part, for himself, his heirs and assigns, in consideration of the premises, and of the sum of one dollar, to him duly paid hy the party of the second part, and also for the benefit of the land retained by him, as well as that conveyed as aforesaid, hereby covenants and agrees to and with the party of the second part, her heirs and assigns, that no building to be hereafter erected on the lot adjoining on the west the lot hereinabove and in said deed described shall be erected nearer than five feet from the westerly line of said described lot, and that said restriction shall attach to and run with the land, and bind all future owners of the lot immediately adjoining on the west to lands so as aforesaid conveyed; and the said Alfred 0. McClellan, for himself and his heirs and assigns, covenants and agrees to and with the said Martha F. Wahl, her heirs and assigns, that he and they shall, in every deed of conveyance of said adjoining lot hereafter to be made by him, them, or any of them, insert and include a covenant, condition, agreement and restriction in all respects the same as the above.”

The reasonable interpretation of the agreement is that it was intended by the parties that the owner of the adjoining lot, the title to which was vested in the wife, should be bound as stipulated therein, and it is the duty of this court to give effect to that intention. The words, “himself, his heirs and assigns,” cannot be permitted to overcome the intention of the parties, to be fairly gathered from the agreement, that the wife should be bound by its covenants, for if the contract admits of two inferences it is to be interpreted in the sense in which the promisor had reason to suppose it was understood by the promisee. Potter v. Berthelet, 20 Fed. Rep. 240.

Cerdainly the complainant understood that the wife as owner was binding herself according to the terms of the agreement, and that it was the intention of the wife, as one of the parties to the agreement, to contract with reference to the land which she owned, is strengthened by the fact that otherwise no reason is apparent why she should be a party to a party to a contract which had no purpose other than the placing of a restriction on her land for the benefit of the adjoining landowner in part consideration of the purchase price for the land sold by the husband and wife to complainant. The construction of an agreement should “be favorable, and as near the minds and apparent intents of the parties as it possibly may be and the law will permit.” Shep. Touch. 85 ch. 5; Sisson v. Donnelly, 30 N. J. Law (7 Vr.) 432; Rue v. Meirs, 43 N. J. Eq. (16 Stew.) 377, 383.

I am satisfied that this written agreement is the contract of the wife, according to which there was not to be erected on her land any building within five feet of the westerly line of the lot conveyed by her and her husband to the complainant, a stipulation which the defendant has disregarded.

The next objection is that the contract is not binding on the wife because she was not the owner of the land, for the benefit of which the agreement was made, and also that it was without consideration. I take it to be well settled that equity will compel the observance of a covenant, founded upon a valuable consideration, by which the owner of land imposes upon it limitations as to its use which are reasonable in character, and shall hold that the wife, having an interest in both parcels, could legally impose upon her land for the benefit of the land sold, the restriction contained in her agreement, if there was a valuable consideration to sustain it.

It appears by the testimony and the recitals in the agreement that the husband, by a deed in which the wife joined, had conveyed to the complainant a lot of land on which there was then erected a dwelling, the westerly side line of which, including the eaves of the building, extended to the boundary line between the lot conveyed and that owned by the wife, and for a part of the consideration paid, the wife and her husband agreed in a writing separate from the deed, executed at the same time and as a part of the transaction, that no building should be erected on the wife’s lot within five feet of the westerly line of the lot conveyed to the complainant. The interest of the wife in the lands conveyed to the complainant was an inchoate dower which our courts have recognized to be a valuable interest. Wheeler v. Kirtland, 27 N. J. Eq. (12 C. E. Gr.) 534. It follows, therefore, that if the covenant which she entered into with the complainant tended to enhance the purchase price, and the presumption is that it did, her inchoate dower was increased in value thereb)^ and such increase undoubtedly is a sufficient consideration for the agreement sought to be enforced, and, in my judgment, if the wife was erecting'the building complained of, it would be the duty of this court to require her to stand by her bargain.

If this agreement binds the wife, it will be enforced against any other person into whose hands the land passes, with notice of the covenants, although not recorded. The complainant insists that the defendant, before taking title to the land, had notice of the covenant, or sufficient notice thereof to put him on inquiry. The defendant testifies that on the day he agreed to purchase the lot he had an understanding with Mr. McClellan, who was acting for his wife in the negotiations of sale, that there was a restriction on five feet to the land, but was not told about it until he had paid $100 on account of his contract of purchase. The pertinent evidence on this point is as follows :

“Q. You had an understanding about a restriction on the five feet?
“A. Yes.
“Q. When did you have that?
“A. On the day I purchased the lot; let me see, it was after I had paid my first money.
“Q. After you paid your first money?
“A. Yes.
“Q. Then he told you that there would have to be a restriction?
“A. Mr. McClellan, after receiving my money and writing me a receipt, which I have brought here, came back to me and said, ‘By the way, there is some little restriction on this lot; it is about five feet;’ and he said, ‘Of course, I don’t suppose that you want to build closer than five feet;’ X said to him, ‘Mr. McClellan, I am a little surprised at this; if you had told me that before I paid you, we might have considered the matter a little differently,’ but I said, ‘However, I would like to know what these restrictions are, and whether they prevent me from building a bay-window;’ he said, ‘They do not; it is simply the five feet from Mr. Wahl’s line to your house—that is, the body of your house or wall.’ ”

It further appears that at that time defendant knew that the complainant was in possession of the adjoining property, but did not go and see her with reference to this restriction. The defendant paid the consideration for his lot to a title company in Atlantic City, with the expectation that the company would get the deed and put it on record, which it did. This deed contained a restrictive covenant in the precise words of the agreement between Mrs. McClellan and the complainant, and is dated the 1st day of September, 1904. On the 13th day of June, 1905, Mary A. McClellan and her husband executed a new deed to the defendant reciting that the restrictive covenant was inserted in the original deed by “inadvertence and mistake,” and contained a modification of the restriction in the words hereinbefore set out, but the later deed can have no effect upon this controversy if, as a matter of fact, the defendant, before he completed his purchase, knew, or was chargeable with notice, of the character of the contract between his vendor and the complainant. The recital in the second deed does not conform to the truth, because the vendor knew the character and nature of her covenant, and was careful to have it inserted in the earlier deed, and it is incredible that by “inadvertence and mistake” she inserted in her deed a covenant which she had so solemnly agreed to insert. Nor am I disposed to accept the statement of the defendant that the first deed as drawn and recorded did not conform to his understanding, for a long time after the deed came to his possession, and after he was aware of the nature of the restriction, he went to the husband of the complainant and stated that he had gone to considerable expense preparing his plans and specifications, and found that there were restrictions covering five feet, which would require him to build nearer Pacific avenue than he wished to, and desired that the complainant should by deed relieve three feet of the five of the restriction, which he would hardly have done if he thought the restriction claimed to have been improperly inserted could be removed by the explanatory deed of his vendor, which he afterwards procured.

As to actual notice not proved by direct evidence, but to be inferred in part from circumstances, the rule is laid down in Pom. Eq. Jur. § 597 that if the party obtains knowledge or information of facts tending to show the existence of a prior right in conflict with the interest which he is seeking to obtain, and which are sufficient to put a reasonably prudent man upon inquiry, then it may be a legitimate inference that he acquired the further information which constitutes actual notice. This inference is not a conclusive presumption of law. It may be defeated by proper evidence. Yet, if it appears that the party obtains knowledge or information of such facts which are sufficient to put a prudent man upon inquiry, and which are of such a nature that the inquiry, if prosecuted with reasonable diligence, would certainly lead to a discovery of the conflicting claim, then the inference that he acquired the information constituting actual notice is necessary and absolute, for this is only another mode of stating that the party was put upon inquiry, that he made the inquiry and arrived at the truth. And the same result follows if the party has sufficient knowledge to require him to make the inquiry if he neglects to do it, or, having begun it, fails to prosecute it in a reasonable manner. The information need not be so full and detailed as to communicate a complete description of the opposing interest. It is sufficient if it asserts the existence of a right or interest as a fact. If a vendor informs the vendee that the subject-matter is subject to an outstanding lien or equitable claim, such information is sufficient. It need not state all the particulars or impart complete knowledge. It is enough if he has reasonable ground to believe that a conflicting right exists as a fact. Whenever the information given by the grantor would constitute notice, the same information communicated by the representative of the vendor will operate with equal force, provided the party represented was prevented by absence or disability from making the communication on his own behalf. To what extent the purchaser is charged with notice of the encumbrance and its character is regulated by the interest of the person making the communication. Information given by a third person having no interest in the matter, who, after stating the charge upon the subject-matter, also declares that it has been abandoned or no longer exists, the purchaser may generally rely upon the whole communication, and unless there is some special reason for believing the statement regarding the encumbrance and rejecting that which relates to its discharge, the purchaser may rely upon the whole statement. But a different rule prevails where the representation is made by the vendor or person parting with an interest in the subject-matter, and where such person admits some outstanding claim upon or equity in the property, his further declaration that the defect has been cured or the equity destroyed will not warrant the purchaser in relying upon this explanation or contradiction, for the informant is under a strong-personal interest to misrepresent or conceal the real facts.

The testimony in this case shows that at the conclusion of the negotiations between the McClellans and the defendant he was informed by the vendor that there was some little restriction on the lot, covering above five feet, and the defendant testified that the vendor said, “Of course, I don’t suppose that you want to build closer than five feet,” to which the defendant replied that he would like to know what the restrictions were and whether they prevented him from building a bay-window, and was informed, “They do not; it is simply the five feet from Mr. Wahl’s line to your house—that is, the body of your house or wall.” In my judgment, it then became the duty of the defendant to inquire, from the person in whose favor the restriction was made, regarding its character and extent, and is chargeable with notice of all the facts which an inquiry, properly pursued, would have revealed. The defendant knew that the complainant was in possession of the adjoining lot; that there was a building standing on that lot substantially on the boundary line between complainant’s lot and the lot which the defendant was purchasing, and he knew that the restriction related to his right to build some part of his dwelling within five feet of complainant’s line. This was sufficient information regarding a restriction or an equity in favor of the complainant attached to the vendor’s title to charge him with the duty of inquiring regarding it from the person for whose benefit it had been created. In addition to this, I am not disposed to credit the testimony of the defendant that the vendor made the statement in the language used by defendant, for it is entirely at variance with the agreement imposing the restriction and as set out in the deed which was afterwards executed and delivered to the defendant.

I am satisfied from the evidence in this case that when the defendant purchased this lot he was informed by the vendor that the deed to him would contain a covenant preventing him from building upon his lot within five feet of the complainant’s line, and that the deed to him originally made by the vendor contained the restrictive covenant precisely as he had understood it should. But if I am wrong about this, I am very clear that he had sufficient • notice to put him upon inquiry, and that he is chargeable with the knowledge which he would have obtained if he had applied to the person in whose favor the restrictive contract was made, and that upon inquiry of the complainant—-an inquiry, in my judgment, he was bound to make—the contents of the written agreement would have been disclosed to him. This case falls within the first rule laid down by Vice-Chancellor Wigram, in Jones v. Smith, 1 Hare 43, which is that where the party charged has had actual notice that the property in dispute was in fact charged, encumbered, or in some way affected, the court binds him with constructive notice of facts and instruments, to the knowledge of which he would have been led by an inquiry relating to the charge, encumbrance or other circumstances affecting the property of which he has had notice. See, also, Hoy v. Bramhall, 19 N. J. Eq. (1 C. E. Gr.) 563.

The. conclusion which I have reached is that the complainant is entitled to the relief prayed for in her bill of complaint, with costs, and I will so advise.


text:
    Mary E. Heer, petitioner, v. Henry Heer.
    [Submitted March 7th, 1907.
    Decided March 8th, 1907.]
    1. Evidence in a suit for divorce considered, and held sufficient to show a bona iide residence in the state by petitioner.
    2. Evidence in a suit for divorce held sufficient to show desertion by husband.
    On petition for divorce. On exceptions to master’s report.

      Messrs. Potts ■<& Higgins, for the exceptants.
   Bergen, Y. C.

The report of the special master is adverse to the application of the petitioner for a divorce from the defendant upon the ground of desertion. The master reports that there is not “sufficient legal proof of the petitioner’s bona fi\des in acquiring a residence in this state, nor is there sufficient proof of her animus manendi ’’ and also that there is not sufficient proof as to the causes of the desertion, to which report the petitioner has filed exceptions.

The petitioner testifies that she and the defendant were married in 1891; that they lived together as husband and wife until the 16th day of March, 1903, when the defendant left her in their residence on Eighth street in New York City, where they had been living for eleven years, since which time he has not returned to her, nor contributed to her support; that immediately after the marriage petitioner returned to her father’s home at 367 Eighth street, New York City, where she resided separate from her husband until the month of October, in the year 1892, when her husband rented rooms on Eighth street in which they lived until the husband left, shortly after which she went to live with her sister in West Hoboken, New Jersey, spending part of the time with her sister and part of the time at her home in New York City, waiting before making up her mind what to do until her father, who was then a resident of West Hoboken, should return from Htica, where he was temporarily employed as a constructing engineer; that upon her father’s return, which was about the 1st of June, 1903, he paid the rent for the rooms which she had occupied in New York City, and advised her to remove to West Hoboken, where he rented rooms for her near where her three sisters and brother lived, since which time she has continuously lived in West Hoboken in the rooms rented for her by her father; that the house which her father rented for her is at No. 925 Hoboken street, West Hoboken, and that her father lives with her part of the time and the other part of the time with her sister. She further testified that she did not remove to New Jersey with any idea of getting a divorce, and knew nothing about the divorce laws when she came here, but removed to New Jersey'because she wanted to be where her father and sisters were; that she has one child, a son thirteen years of age, who lives with her. The father testified that when the defendant left the petitioner he was superintending the construction of a land digging machine for the Hayward Company in Htica; that he returned home about the 1st of June, 1903, and found his daughter, the petitioner, at her house on Eighth street; that he at once gave her $100 to pay a mortgage on her furniture and

“told her to move her things over to New Jersey, where my other daughters live, and that I would hire a house for her and make my home with her there. She consented to this, and the very next day or two days afterwards she moved her things over to West Hoboken, New Jersey, to the place where we are now living. I think this was in June that she moved to New Jersey, and she has lived in New Jersey ever since that time. I had lived in New Jersey before this time with one of my other daughters. I have lived in New Jersey now for about four years. I know that I have voted three times here. I make my home first with one daughter and then with the other, except when I am away on business.”

The petitioner removed to New Jersey about the 1st of June, 1903, and filed her petition in this cause September 29th, 1905, nearly four months after the statutory period of two years had elapsed. The master relies upon Hunter v. Hunter, 61 N. J. Eq. (19 Dick.) 277, as supporting his conclusion. But I am of opinion that the case referred to is not applicable to the facts presented in this cause. In the Hunter Case the petitioner remained a resident of New York for two years and a half after the separation, and filed her petition within two weeks after the expiration of the statutory period, which the court held was not sufficient to justify the inference that she had maintained such a residence in New Jersey as is necessary under our statute to give the court of chancery jurisdiction of her matrimonial status, and that her testimony, even if it had been more ample, would have required corroboration. In the case we are considering the petitioner removed to New Jersey very shortly after her husband left her, and it was natural that she should do so, her father and three sisters and her brother all living in West Hoboken. She was left alone in New York City, but took no step towards obtaining a residence in New Jersey until she had consulted her father, and acting on his advice she removed to this state in order to be near her sisters and where her father could live with her part of the time. Her testimony on this subject is corroborated by the father, and there is nothing in this evidence to justify the inference that the residence thus created was intended to be transient, or was established for the purpose of obtaining the benefit of a more liberal divorce law than existed in the foreign jurisdiction from which she removed. I am entirely satisfied from this evidence that the petitioner came to this state to make her residence near her relatives, and where her father might conveniently look after her interests, and the evidence on this point given by the petitioner and corroborated by the father does not, as was said by the court of errors and appeals in Tracy v. Tracy, 62 N. J. Eq. (17 Dick.) 807, “bear any intrinsic evidence of improbability,” and, in my judgment, it is sufficient to establish the residence of the petitioner to be in this state.

On the question of the corroboration of the petitioner as to the causes of the desertion, I am of the opinion that she has made out her case. She testifies that for some time before her husband left he was cruel and abusive; that he often said to her “you will not live until morning,” and that “I will put a pill in the boy’s mouth and will turn the gas on,” and that she was so afraid of him that she had to watch him all the time. The father testifies that he had lived with the petitioner and the defendant in New York, but left about a year before'the desertion; that the defendant had been arrested and sent to prison while he was living there, and after he was released he used such vulgar language and quarreled so about the house that he could not stand it and left them, and that he acted as if he did not care anything for his wife and child, from which we are justified in inferring that the defendant had lost all affection for his wife and child, and indicates a disposition towards them which would lead him to act as he did. The testimony of the wife shows that her husband had ceased to care for her and her child, a sufficient explanation of the reason why he left her as he did on the anniversary of their wedding with the remark, “I will say good-bye, and that is what I will give you for your wedding anniversary.” There was no justifiable cause for his leaving his wife, but the cause which actuated the defendant, according to the testimony, was his loss of' affection for his family and an indisposition to be further burdened with them. In this the wife is corroborated by the testimony of her father, not only as to his cruelty to his wife, but as to his determination to be rid of contributing towards their support, for petitioner’s father met the defendant in Hobo-ken, New Jersey, in the month of August following the time when he deserted his wife, and defendant then told the father that he had just come back from Canada, and when the father said to him, “what is the matter you don’t go home and take care of your wife and child,” he replied, “I have got enough to do to take care of myself, and I.don’t want to have anything to do with them,” and in further corroboration of the petitioner on this point is the testimony of her solicitor, which is, that after he had written a letter to a woman supposed to be acquainted with the defendant, the defendant called at Ms office in Jersey City, and when the solicitor said that his wife wanted some support from him, he replied that he would not support her and that “he didn’t care to have anything to do with her, and she could do' as she pleased.”

In Alward v. Alward, 65 N. J. Eq. (20 Dick.) 28, the husband '-eft his wife at the place of her residence as if to go to work and did not indicate by any word or act that he did not intend to return, and he was never heard of afterwards, upon proof made to the chancellor,' that a search was made by the friends of both parties, which was conducted and persisted in in good faith for a reasonable time, the court held that the evidence justified the inference that the defendant was alive, and the case showing that the defendant was last seen in a locality in this state not far from his residence, in his ordinary condition of health, the further inference was justified that he was free and able to return to his wife if he desired to do so, and that his conduct and unexplained absence thereafter brought the case within the doctrine laid down in Sergent v. Sergent, 33 N. J. Eq. (6 Stew.) 204, to the effect that a husband, who had left his wife without any word or act indicating intent to desert her, was shown to have entertained that intent, by proof that he was alive and able to return to her if he chose, but that he had continuously remained away from her. In the case we are considering the defendant was seen in West Hoboken not far from where his wife lived where he had a conversation with her father in which he declined to go to her, or render her any assistance, and if he had any doubt about her place of residence he could easily have ascertained it by asking her father.

The desertion is abundantly proven, and the petitioner is entitled to a decree. It therefore follows that the exceptions must be sustained.


author: Bergen, V. C.

text:
    William B. Reed v. Benzine-ated Soap Company et al.
    [Submitted March 5th, 1907.
    Decided March 8th, 1907.]
    1. An answer by way of cross-bill, filed under chancery rule 206, is a pleading in the original cause, and costs taxed thereon are costs for which the solicitor filing a bill for a non-resident complainant is responsible, if the complainant has not given the security required by the statute.
    2. The power to hold a solicitor for costs, when the complainant is a non-resident, is purely statutory, and will only be enforced where the complainant is required to give security, and if the right to such security is waived, as to the complainant, by the defendant, the waiver inures to the benefit of the solicitor.
    3. If the defendant proceeds with the cause on his own behalf after obtaining an order requiring the complainant to give security, it amounts to a waiver of the right to security.
    On application for order requiring solicitor to pay costs.

      Mr. William T. Reed, for the applicant.

      Mr. Thomas B. Hall, for the respondent.
   Bergen, V. C.

This is an application for a rule requiring-the solicitor of the complainant to pay costs adjudged to the applicants, upon the ground that security for costs was not filed by the complainant, 'a non-resident, before the issuing of process, as required by section 8 of “An act respecting the court of chancery.” Rev. 1902; P. L. 1902 p. 540.

The bill of complaint was filed February 25th, 1905, charging that the complainant was a stockholder and one of the officers of the defendant corporation; that complainant, Oliver Smith and Alfred Lowry constituted all the officers and stockholders of the corporation, and that the latter were undertaking to improperly dissolve the corporation, refusing complainant access to its books, and concealing from him the status of the company. The prayer was that Smith and Lowry should exhibit such books to the complainant, and, until they had done so, be restrained from further steps having for their object such dissolution.

The defendants answered, denying that they had refused complainant a proper examination of the books, or that the intention to dissolve was fraudulent, and charged that the company was largely involved, and that its business could not be conducted at a profit. The defendants then, answering by way of cross-bill, charged that they were induced by complainant to enter into a contract, under which the corporation was formed, by false representations made by the complainant as to the nature of the business intended to be carried on by the proposed company and the amount of profits to be made, with a prayer for process, and that the contract be declared void, the complainant’s stock transferred to them, and that it be decreed that the complainant was not a stockholder.

No further proceedings were taken under the original bill, but the process prayed for under the cross-bill was duly issued and served upon the complainant, who has not answered. Thereupon, in due time, a decree pro confesso was entered against him and an order taken to bring on the hearing on the cross-bill ex parte, resulting in a decree for the defendants as prayed therein, and “that the complainant pay to the said cross-complainants the costs of this suit to be taxed.” The answer and cross-bill were filed April 7th, 1905, and on May 9th following an order was made, on the application of the complainants in the cross-bill, requiring the complainant to file security for costs within ten days thereafter, “and that all proceedings in this cause be stayed until this order be complied with.” The order never was complied with, notwithstanding which the complainants in the cross-bill proceeded thereunder to the final decree, as above mentioned. It was admitted by counsel that all of the costs now sought to be recovered were taxed on account of the proceedings under the cross-bill, and that the original cause remains undetermined, except so far as the decree on the cross-bill works that result.

The allowance of this order is resisted on several grounds, but it is only necessary to consider two of them, the first of which is that the complainant’s solicitor is only responsible for the costs incurred in the suit brought by him, and that as a cross-bill is an affirmative act on the part of the defendants, in which proceeding no process is issued by the complainant, it is a separate proceeding not instituted by the solicitor on behalf of the complainant, and therefore the solicitor is only responsible to defendants for costs arising in the suit commenced for the complainant by the original bill on which process was issued. This objection has, in my judgment, no force under the practice established in this state. The statute of 1902 above referred to, section 87, makes it the duty of the chancellor from time to time to make such rules and orders to regulate practice and pleading as may, in his judgment, render the proceeding more efficient and simple, and prevent unnecessary costs and delay, and by virtue of that power the chancellor has, by rule 206, established the practice with relation to the use of a cross-bill as a pleading by way of answer. By that rule, when a defendant desires relief such as by the existing practice can only be obtained by a cross-bill, it is not necessary for him to file such bill, but he may set up in his answer the proper subject-matter of a cross-bill and obtain relief thereon. Of course, the matter set up by way of answer when affirmative relief is sought by the defendant must be the proper subject-matter of a cross-bill, but under this rule it is set up by way of answer. No process is necessary when, as in this case, the answer by way of cross-bill is exhibited against the complainant. It is to all intents and purposes an answer, and the liability for costs in such a case is cast upon the complainant, and if he be a non-resident, not having filed security, the solicitor who signed the original bill and issued the process for such non-resident complainant becomes responsible therefor under the statute. As was said in Whyte v. Arthur, 17 N. J. Eq. (2 C. E. Gr.) 521, an original and cross-cause in chancery are for many purposes considered as one suit and ordinarily heard together, and the rights of all the parties in respect to the matters litigated are settled by one decree.

The second objection is that even if the solicitor was originally liable, the liability ceased when the defendants obtained the order of May 9th requiring the complainant to file security for costs within ten days and staying all proceedings until it was complied with, except the hearing of the motion for injunction, and directing that, on failure to file the security, application might- be made to dismiss the bill of complaint, because the defendants, after the making of this order, did not stand upon it, but proceeded with the cause under their answer and cross-bill to a decree adjudging their rights thereunder. While the intention of the statute is not entirely clear, I interpret it to mean that if the solicitor of a non-resident complainant issues the initial process in the absence of a proper bond to secure the payment of costs, he assumes the liability, but that the defendant is not required to accept that indemnity, and may take proceedings to compel the complainant to execute a bond with sufficient surety, and prevent further proceedings on the part of the complainant until such bond be filed, and if not filed within the time appointed in the order, the bill shall be dismissed, with costs.

The power to hold a solicitor responsible for costs is purely statutory, and will only be enforced where the complainant can be required to give a bond, and if the right to security is waived as to the complainant by the defendant, the waiver inures to the benefit of the solicitor. The defendants in this cause declined the responsibility of the solicitor and obtained from this court an order that the complainant furnish security for costs, with a stay of all proceedings by him until the order was complied with. Under that order the complainant could not further prosecute his suit, and if the defendants, after obtaining the order, chose to proceed with their cross-bill, which I have held to be a pleading in the original cause, they took a step which amounted to a waiver of their right to security. In Shuttleworth v. Dunlop, 34 N. J. Eq. (7 Stew.) 488, Vice-Chancellor Van Fleet held that if a defendant takes any step in a cause after he has notice that the complainant is a non-resident he waives his right to security for costs, and this rule is not improperly extended if applied to a situation where the defendant has taken an order for security and by his subsequent act abandons the benefit thereof. In Hay v. Power, 2 Edw. Ch. 494 it was held that the setting down of a cause by tbe defendant was a waiver of an order for security, and if the defendant, after such an order, proceeds with his cause, he, in my judgment, waives the right to the security, and having abandoned his claim to such right against the complainant, the solicitor is absolved from any liability as surety.

My conclusion is that the statute only requires the solicitor in the case given to be responsible as surety for the complainant, and that if the defendant by his act relieves the complainant from furnishing security for costs, the suretyship of the solicitor ceases, for he is only made liable in case the complainant fails to furnish security to the defendant, a right which the defendant may manifestly waive, for I take it to be the reasonable interpretation of this act that if the complainant came in at any time and furnished the bond, the solicitor would be relieved, and where the defendant makes the giving of such bond unnecessarjr, the solicitor cannot be made responsible for a default of the complainant which, by the conduct of the defendant, ceases to be a default.

The application will be refused, with costs.


text:
    Daniel Steelman, executor of Philip M. Wheaton, v. Arabella Wheaton.
    [Submitted March 19th, 1907.
    Decided March 23d, 1907.]
    1. Where the pertinent fact alleged in a bill of complaint as ground for relief raises a doubt as to complainant’s right thereto, a general specification of want of equity in a motion to strike from the files the bill of complaint is sufficient.
    2. Where an executor was to invest a sufficient sum to produce $1,200 annually, which was to be paid to the annuitant during her natural life, “in payments quarterly of three hundred dollars each,” such bequest is an annuity.
    3. Where an administrator pendente Ute pays a legacy to a person entitled to it, which the character of his appointment does not authorize him to do, he will nevertheless be allowed such payment in his accounting, if the estate was able and liable to pay-after all prior charges were provided for.
    On motion to strike out bill of complaint.

      Mr. Robert H. McCarter and Mr. Herbert A. Dralce, for the complainant.

      Mr. Gilbert Collins, for the defendant.
   Bergen, Y. C.

The bill in this case seeks an injunction restraining the defendant from prosecuting her action at law for the recovery of the accrued portion of a bequest which appears in the last will and testament of her husband, in the following words:

“I hereby instruct, authorize and empower my executor, hereinafter named, as soon as it is convenient after my decease, to invest a sufficient sum or sums of money of my estate, with good and sufficient security, approved by the orphans court of the county in which this will is probated, which will bear twelve hundred ($1,200) dollars interest annually; and this sum of twelve hundred ($1,200) dollars I give and bequeath to my wife, Arabella Wheaton, during her natural life, and if she again does not marry, which sum of twelve hundred ($1,200) dollars is to be paid annually to my said wife, by my executor, in payments quarterly of three hundred ($300) dollars each, and upon her decease, or upon her again marrying, or upon my decease, if I should survive my said wife, I give and bequeath the sum or sums of money which my executor is authorized to invest for the use of my wife to my daughter, May Steelman, if she be living.”

After the death of the testator this defendant filed a caveat against the probate of the will, and in proceedings had thereon in the orphans court the will was admitted to probate. From this decree she appealed to the prerogative court and to the court of errors and appeals, the result in each of the appellate courts being an affirmance of the decree of the orphans court. During the pendency of the litigation an administrator pendente lite was appointed by the orphans court, and under an order made by that court he paid to the defendant her legacy or annuity of $1,200 from the date of her husband’s death; the whole amount paid by him up to the time the will was established amounted to $4,600; since then three quarterly payments of $300 each have accrued, to recover which the action at law now sought to be enjoined was brought. The complainant alleges that no part of the $1,200 was payable to the defendant until the executor had qualified and invested an amount sufficient to produce it, and that as the delay in making the investment was caused by the litigation instituted by the defendant, she is not entitled to the payments made by the administrator, and that she is not now entitled to further payments until he has recouped out of the income due and to become due a sum sufficient to repay to the estate the sum of $4,600 improperly obtained by her, and that in no event was she entitled to have her income run from the date of the testator’s death. The residuary legatee has notified them that she will contest any further payments until the moneys, which she claims were improperly advanced to the defendant, have been recouped from such accruing income.

The defendant now moves to strike from the files the bill of complaint, alleging as a reason therefor a want of equity. Whether this motion should be allowed depends upon the interpretation to be given the bequeathing clause. The defendant insists that a proper construction of the will, as set up in the bill, does not warrant the granting of an injunctive order, and therefore the bill should be dismissed, this motion being, under our practice, a substitute for a demurrer. The complainant resists the motion on several grounds, the first being that, on a motion of this character, the notice should be as specific as is required in case of a demurrer, and that a notice to strike out, for want of equity, a bill filed by an executor for affirmative relief dependent upon the construction of the will under which he is acting, does not satisfy rule 209, which calls upon every demur-rant to distinctly specify the grounds of a demurrer. The retention of complainant’s bill depends upon the character of the bequest; if there is an annuity, the defendant has only received what she was entitled to, and the complainant would then have no standing in this court; on the other hand, if it is only a gift of the income for life of a principal sum to be invested, with remainder over, then the complainant has anade a case entitling him to an answer, or, in default thereof, a decree upon ax parte proofs. It therefore follows that the only question to be met on this branch of the case is whether the clause in the will, upon which the coanplainant rests his case, entitles him to equitable relief. It seeans to me that the question is clearly presented in the bill of complaint, for an inspection of it shows that the right to relief rests upon the interpretation of the material and only real eleanent of dispute, which is the effect, when properly construed, of the clause of the will upon which the coanplainant founds Jais pa'ayer for injunction. The defect is not latent or obsciare, but the pertinent fact alleged' in the bill as a grouoad for relief raises a doubt as to complainant’s right thereto, and I am of opinion that the general specification of want of equity is sufficieait to justify ane in hearing this motion. Essex Paper Co. v. Greacen, 45 N. J. Eq. (18 Stew.) 504; Parker v. Stevens, 61 N. J. Eq. (16 Dick.) 163.

The second ground urged by the coanplainant in resisting this application is that the legacy is aaot an annuity payable from the death of the testator, but is a gift of the ioaterest or incoane of a suan to be invested, making it an ordinary legacy, the income froan which begins to run in favor of the legatee, only after the expiration of the year following testator’s death, aaad as the adaniaiistrator pendente Hie has treated it as an aianuity and paid the defendant accordingly, she has received $1,200 more than she should, and ought not to be allowed to press her action at law until she has accounted therefor, or the coanplainant has received sufficient incoane, and returned it to the corpus of the estate, to liquidate the overpayanent.

Whether this beqraest is an annuity is the only question to be considered oar this branch of the case. In Booth v. Ammerman, 4 Bradf. Surr. 129, an annuity is well described as follows: “An annuity is a stated sum per annum, payable annually unless otherwise directed. It is aaot incoane or profits, nor indeterminate in amount, varying according to the incoane or profits, though a certain sum may be provided out of which it is to be payable.” I am of the opinion that the bequest we are considering falls within this definition, for the executor is to invest a sufficient sum to produce $1,200 annually, which is to be paid to the annuitant during her natural life “in payments quarterly of three hundred ($300) dollars each.” It is the gift of a fixed sum, not indeterminate in amount, or varying according to the income or profits, and if the amount set apart by the executor to produce this annual sum should for any reason fail to produce it, the residuary legatee would be required to provide the deficiency.

In Craig v. Craig, 3 Barb. Ch. 76, the gift to a wife was :

“I also give to her an annuity of $1,600 per year, to be paid to her in semi-annual payments, the principal of such annuity to be invested in such manner as she may reasonably require.”

In construing this language the court held that the annuity for the widow began to accrue at the testator’s death.

In Merritt v. Merritt, 43 N. J. Eq. (16 Stew.) 11, the will ordered the executors to invest sufficient money to produce an annual income of $1,000 for testator’s son, to be paid in equal weekly payments. The amount invested proving insufficient, through changes in interest rates, to produce the required annual income, the deficiency was decreed to be paid by the residuary legatees, the court saying: “It was obviously the intention of the testator to provide and secure, out of his estate, an annuity of $1,000.”

In Welsh v. Brown, 43 N. J. Law (14 Vr.) 37, 43, Chief-Justice Depue said: “The distinction between an annuity pure and simple, which is to be paid at all events out of testator’s estate, at the expense of the residuary legatee, and the interest or income for life of a certain sum set apart by the testator for that purpose, and given over in gross to another after the death of the life tenant, has been quite uniformly adhered to,” citing with approval, from Baker v. Baker, 6 H. L. Cas. 623, the following portion of Lord Cranworth’s opinion: “In all these cases arising upon the construction of wills the real question is whether that which is given is given as an annuity or is given as the interest of a fund, and where1 that question is to be considered, what you must look to is this: whether the language of the testator imports thát a sum, at all events, is annually to be paid out of his general estate, or only the interest or a portion of the interest of a capital sum which is to be set apart.”

Turning to the will under consideration, there is no gift of the interest of a capital sum which is to be set apart. It is a gift of a sum which is annually to be paid out of testator’s estate, and is not subject to any diminution resulting from a change in the rate of interest, the payment of taxes, or a failure from any reason of a particular fund to produce the amount.

The only case to which I have been referred as holding a contrary doctrine is that of Cogswell, Executor, v. Cogswell, 2 Edw. Ch. 231, but there the gift was to his executors in trust to set apart a sufficient sum to produce an annual income of $1,000,

“and from time to time, as the same shall become payable, to permit my wife to take such interest moneys, in the whole amounting to the annual interest of one thousand dollars.”

In interpreting this language the court held that “the gross sum to be set apart to produce the yearly income of one thousand dollars is considered in the light of a legacy, payable by law at the end of the year.” It will be observed that in this case the testator fixes the time of payment of the gift to be when the interest or income arising from the investment provided for “shall become payable,” and the court was of opinion that it was the plain meaning of the will that the widow was only entitled to such dividends as were declared after the expiration of the first year, and that as the gift depended upon the proceeds of an investment, to be made in stock, the executor might take one year for the purpose of making the investment, in analogy to the time allowed by law for paying legacies. I apprehend that in determining this cause Yice-Chancellor MeCoun was influenced by the fact that it was not considered an absolute gift of $1,000, to be paid in annual or at other fixed periods, but rather of interest moneys upon investments to be made, to be paid to the wife as the income from such investments became payable, for the authority upon which he relied in reaching his determination, viz., 1 Rop. Leg. 588, does not support the proposition that a gift of a stated sum, payable annually unless otherwise directed, without regard to the income or profits derived from the portion of testator’s estate set aside by his executors to provide it, is not an annuity, for a reference to the authority cited declares :

“But if the disposition be of a sum of money, and the interest of it is given as an annuity to B for life, the first payment will not accrue before the expiration of the second year after the death of the testator,”

and the learned author undoubtedly means that the disposition shall be of a fixed sum upon which the interest is given, and not of a fixed amount to be paid without regard to the amount of the fund required to produce it. If the case just referred to is an authority sustaining a rule that the gift of a fixed sum, to be paid annually, is an ordinary legacy and not an annuity, because the executor is to invest a sufficient portion of the estate to provide for the annuity, without any direction as to the amount of the investment, then it is contrary to the weight of authority on this subject.

It was insisted on the argument that as the will directed the executor to invest a sufficient sum to raise the $1,200 annually, the executor was not required to make the investment until the expiration of one year from testator’s death. The answer to this contention is that the executor is only authorized to do what the law requires and permits him to do. He is alwa3rs justified in setting apart immediately a fund sufficient to indemnify him against the payment of the annuity.

A further contention of the complainant is that, granting the bequest to be an annuity, nevertheless the defendant was improperly paid all that she received, because her opposition to the probate of the will was “unwarranted, dilatory and vexatious,” and that by reason of such conduct the executor was prevented from making the investments required to provide the annuity. I am unable to discover any equitable reason for refusing to the defendant what she is entitled to under the will simply because she contested its probate to an unsuccessful issue. The estate was in the hands of an officer appointed by the court. The presumption is that he clid his duty and kept the money invested, and the contrary is not alleged. Therefore it could make no difference in the status of the estate whether the administrator or the executor collected the income, and I am aware of no equitable rule which visits upon an unsuccessful litigant the penalty of depriving him of that portion of the estate which the courts have determined he is entitled to, notwithstanding his unsuccessful claim that he was unfairly dealt with.

Whether the administrator pendente Hie was justified in paying legacies is a question which cannot be determined in this suit. That is a matter of administration. The funds were placed in his hands by the orphans court to be administered by him as the law directs, and any improper misapplication of the funds committed to his charge must be adjusted in the settlement of his accounts in that court. If this defendant was entitled to the money it would have to be paid to her by the present executor, and the fact that it may have been paid to her by the administrator pendente lite works no injury to the parties interested therein which calls upon a court of equity to interfere, for such an administrator, even if he pays a legacy which the character of his appointment does not authorize him to do, will nevertheless be allowed such payment in his accounting, provided the party who received it was entitled to it, and the estate able and liable to make the same after all prior charges are provided for.

The result which I have reached is that the bill of complaint presents no equity as against this defendant, and the motion should prevail.


text:
    Atlantic City v. Associated Realties Corporation.
    [Argued and decided March 25th, 1907.]
    Where grantors of a shore front at a summer resort reserved the right to build a pier, covenanting not to permit the sale of commodities thereon, and to charge only an entrance fee, their covenant is not broken by charging for the use of roller skates at a rink on the pier, where all who pay the entrance fee may go to every part of the pier, including the rink.
    On final hearing on pleadings and proofs.

      Messrs. Godfrey •& Godfrey, Mr. Harry Wootton and Mr. James E. Howell, for the complainant.

      Messrs. Thompson & Gole, for the defendant.
   Bergen, V. C.

I will dispose of this matter now. It appears that the grantors, or the predecessors in title of this defendant, were the owners of a shore front extending southerly from the boardwalk at Atlantic City, and that they made a deed to the city of Atlantic City, referred to here as the '"Easement Deed,” for the purpose, as I read it, of conveying to the city of Atlantic City practically the control and substantial ownership of all the shore front, reserving, however, to the grantors a right to build a pier on the property conveyed, and to connect it with the boardwalk, 'upon condition that the pier should be at least one thousand feet in length and constructed of iron or steel, and upon the further condition that they should not permit the sale of any commodities upon the pier, "and be confined to charging only an entrance fee.”

What this defendant is doing, as appears from the evidence produced before me, is to charge an entrance fee of ten cents to their pier, which has a portion of it devoted to roller skating, but, as I understand from the evidence, no person having paid an entrance fee is prohibited from going into this part of the pier; there is a walk or promenade around the room, with galleries from which a view of the floor and of the persons skating may be had, open to everybody, and the skating floor itself is open to everybody willing to take the chance of keeping out of the way of the persons skating. It appears that the witnesses brought here to substantiate the complaint, after paying the entrance fee of ten cents, applied for a pair of skates. They made no application for admission to the room or part of the building used for skaters—that was open to all for the entrance fee paid for admission to the pier-—-they merely asked for the use of a pair of skates, and were told that to get a pair of skates they must go back to the booth at the entrance and get other tickets. I think it makes no difference where they were sent to get the tickets for the skates, or where they were sent to get the skates. That is a convenient method of accounting which the owner adopts. If you want to gain an entrance on the pier you will have to pay ten cents; if you want a pair of skates then you will have to get a ticket, and you will have to deliver that ticket to the man who has charge of the skates, and you may hire the skates for an additional twenty cents, for which two tickets are given, one for checking garments, another for the skates, and does not seem to me to be a violation of the covenant to charge only an entrance fee, for a covenant must be reasonably interpreted, and the covenant confining the charge to “only an entrance fee” means a charge for admission to all parts of the pier, and, in my judgment, is not applicable to a charge for an appliance to enhance the visitor’s enjoyment of the pier. They are not undertaking to sell anything or to prevent any person from admission to all parts of the pier; they merely say, that if you want an opportunity to skate we will provide skates, but you must pay for that convenience. Under these conditions I do not think we are justified in holding that there has been a violation of this covenant, because the people keep on this pier skates which they furnish on application to anyone desiring to use them, providing he is willing to pay for such use. Vice-Chancellor Reed construed a similar covenant in Atlantic City v. Atlantic City Steel Pier Co., 62 N. J. Eq. (17 Dick.) 141, in which he said: “Reading the entire clause, not merely that part directed against the sale of commodities, but including the limitation in respect to what should be charged, the natural construction of the agreement seems to me to be that any additional charge for admission to any part of the pier, after the payment of the entrance fee, conflicts with the restriction which the grantors imposed upon themselves, namely, that they should be confined to charging only an entrance fee.”

This defendant charged an entrance fee of ten cents, and each one of these witnesses testify that upon paying an entrance fee they received a ticket which they surrendered for admission to the pier. They were free to go anywhere on the pier, and were not shut out from the skating floor. When they came to the man in charge of the skates and applied to him for them, in order to join in the skating, they were told that they would have to procure another ticket. Of course, the owner of the. place could not be expected to furnish skates for everyone; that is not a part of the original plan, nor is it contemplated when the entrance fee is paid. The entrance fee entitles a person to go on the pier; when you have paid that you are entitled to go on the pier, to go on every part of it; it entitles you to hear the music, and everything that is provided for the amusement and entertainment of the public who attend and pay an entrance fee. Hiring a pair of skates for a limited period to a person going on to the pier hardly falls within the description of a sale of “any commodities,” nor can it be said to be a charge of an additional entrance fee. This is my construction of this covenant, and it is not in conflict with the case which has been referred to by counsel, which is supposed by them to take a different view of the covenant. I do not consider that that case establishes a different rule, for I understand it to hold only that the fee charged for entrance to this pier entitles one to go to any part of it and to see and hear all that may interest them. These witnesses who paid the entrance fee were entitled to that, but they wanted more, they wanted to participate in the skating. The owner of this place keeps skates, and if you want him to provide you with skates, then }rou must pajr for their use. You are not compelled to skate, and, if you do not, you are not deprived of anything that the entrance fee, which you paid to get on the pier, entitles you to have. Being of this view, I think the bill ought to be dismissed.


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    Charles H. Olden v. Uriah Sassman.
    [Submitted March 26th, 1907.
    Decided April 3d, 1907.]
    1. Where no levy is made under a writ of execution before its return, power to perfect the lien of the writ is lost, and any personalty not levied upon before such return may be subjected to a subsequent judgment creditor’s execution.
    2. A sheriff’s levy upon personalty particularly described, “and all other goods and chattels belonging to” defendant, did not cover a leasehold interest not part of the personalty particularly described, the officer who executed the writ not knowing of the property until he was asked to and did levy upon it under another writ after power to levy under the first writ had expired, and hence the subsequent execution creditor was entitled to the proceeds of the sale of the leasehold interest.
    On application for an order directing the application of moneys raised by the sheriff from the sale of defendant’s property under an execution in favor of complainant.

      Mr. John T. Bird, for the applicant.

      Mr. Edwin Robert Walker, for the respondent.
   Bergen, Y. C.

The sheriff of the county of Mercer had delivered to him November 20th, 1906, an execution issued out of the 'Mercer county circuit court in favor of Charles EL Mather against the defendant. By virtue of this execution the sheriff on the same day levied upon certain personal property, a particular inventory of which is attached to the writ, and concludes as follows: “all other goods and chattels belonging to Newton Uriah Sassman.” This writ was returnable to the January Term, 1907, of the Mercer county circuit court, which opened on the third Tuesday in January, which in the year 1907 fell on the 15th day of the month.

On December 29th, 1906, a writ of execution was issued out of this court in favor of the complainant and against the defendant, returnable to the February Term, 1907, which opened on the first Tuesday of the month. This execution was delivered to the sheriff of Mercer county on January 2d, 1907, and on the same day the sheriff levied upon the same personal property which was subject to the levy already made by him by virtue of the execution placed in his hands in favor of Mather, but on the 16th day of January, 1907, the sheriff made an additional levy upon the leasehold interest of Sassman in and to certain real estate in the county of Mercer. This levy was made after the return of the Mather writ, and unless the chattel interest is included in the closing words of the sheriff’s levy in the Mather case it was not levied upon by the sheriff under that writ, because on the 16th day of January, the Mather writ having been returned on the previous day, the sheriff’s power to further execute it by an additional levy was exhausted. The complainant proceeded with the execution of his writ, and under it the sheriff sold to the complainant whatever rights the defendant had under the lease for the sum of $1,200. The complainant now asks to have the purchase price, less the sheriff’s costs and expenses, applied towards the satisfaction of his writ, which application Mather resists, claiming that as his writ of execution was placed in the sheriff’s hands prior to that of the complainant, it bound all the chattel interest and personal property of the defendant from the time it was delivered to the sheriff, and as such delivery preceded that of the complainant, he is entitled to have the money realized applied towards the liquidation of his writ, insisting—first, that even if no actual levy had been made on the disputed property, nevertheless all the personal estate was made subject to his writ from the moment it reached the sheriff’s hands, and second, that the concluding clause in the sheriff’s levy is a sufficient levy upon all personal property, without a particular statement or inventory.

In support of the first proposition, counsel for Mather relies upon Evans v. Walsh, 41 N. J. Law (12 Vr.) 281, but this case does not go to the extent claimed by counsel, it only determines that the delivery of the writ binds the personal property from that time until its return day, and that the officer holding the writ may levy at any time during that period upon defendant’s property, and that a subsequent execution issued during that period, under which a particular levy is made, does not acquire priority during the life of the previous writ, for under it the sheriff may, at any time before the return day, levy upon defendant’s property, and the levy becomes binding from the time the writ was delivered to the sheriff. The language of Mr. Justice Yan Syekel, in delivering the opinion of the court in the Evans Case, is: “The lien acquired by the delivery is inchoate, and becomes perfected by actual levy. If no levy is made before the return of the writ, the goods of the defendant are free from its burden, either in the hands of a purchaser with notice or as to subsequent execution creditors. But if the levy is made, the lien dates from the delivery of the writ, so as to maintain its rank against all intermediate encumbrances.. Therefore no such title vests in the sheriff by a mere delivery of the writ as will maintain trover, for it may be that he will not pursue and perfect his right by making a levy, but when the levy is duly made, the writ binds the property by the doctrine of relation from its delivery.”

In the case which we are considering the sheriff had the right, at any time before the return of the writ, to levy on the property in dispute to satisfy the prior execution, and in my judgment the lien of the writ must be perfected before its return by a levy, and therefore if no levy was made by the sheriff under the Mather writ before its return, his power to perfect the lien was gone, and any personal property not levied upon before the return of the writ might be disposed of to a purchaser with notice, or subjected to the execution of a subsequent judgment creditor.

The next question to be' considered is whether the disputed property, which was sold under complainant’s execution, was levied upon by the sheriff under the Mather writ by the words contained in this levy, “all other goods and chattels belonging” to the defendant, for it is admitted that although the sheriff made a very detailed and particular levy, the property sold under the complainant’s execution is not specially mentioned, and if subject to the writ it is only because the expression “all other goods and chattels” includes it. I am of opinion that it does not. The deputy sheriff who executed this writ was produced as a witness, and testifies that at the time the levy was made under the first writ, and even when the first levy was made under the second writ on January 2d, 1907, he had no knowledge of the special property which he levied upon under the complainant’s writ on the 26th day of January, on which date it was brought to his attention by the counsel of the complainant, with request that he levy upon it, and that he did so.

It was held by Vice-Chancellor Pitney, in Nelson v. Van Gazelle, 45 N. J. Eq. (18 Stew.) 594, 597, that in order to make a valid levy on chattels the officer having the writ must do some act in relation to them in the way of taking actual possession or asserting dominion over them, and in Lloyd v. Wyckoff, 11 N. J. Law (16 Halst.) 218, Mr. Justice Ford said that it was a well-established principle that if an officer receiving an execution makes a just and true inventory of the debtor’s goods, and files it at the return of the writ, it amounts to a constructive seizure, and in this case, while the officer could not see or perhaps actually seize the chattel interest, an inventory of it attached to the writ before its return would amount to a constructive seizure. That was done under the complainant’s writ, it was not done under the Mather writ, and in the case last cited the entry in the sealing docket was, “levied on the goods and chattels of the defendant to the value of $5,” regarding which Judge Ford said: “This does not specify one item for which the judgment creditor could recover value in case it was lost, consumed, embezzled or wasted. There is no evidence to the debtor of what goods were taken away, nor to the creditors of what goods were left for them. * * * It is not that inventory which, in the decisions of the court (conformably to the meaning of the statute), has been recognized and established as a constructive seizure. They have allowed great efficacy to such an inventory as the statute requires to be made. They have allowed it to avail an officer as much as actual seizure would have availed him, but if he does not comply with the statute, he must show an actual seizure.”

Again, in Watson v. Hoel, 1 N. J. Law (Coxe) 136, the sheriff, instead of endorsing a particular inventory of the articles upon which he had levied, had recited a levy upon one or two specified articles of property, and added, “and upon all the household' goods,” &c. This the court held not to be a sufficient levy to protect the sheriff from amercement, and was held to be a direct breach of his duty.

Mr. Justice Drake, in Lloyd v. Wyckoff, supra, said: “The duty of the sheriff to the plaintiff requires that he should make a sufficient levy, and his duty to the defendant as strongly requires that he should not make an oppressive levy. He ought then, for both these purposes, to have the means of knowing the value of the goods he levies on. He must make the money of the goods and chattels levied on, and he must have them to show to purchasers at the sale, and to deliver when sold. * * * The sheriff should know exactly what he has levied on, and be able to furnish information to parties interested. For this purpose, whenever the sheriff does not take and keep the goods and chattels levied on in his immediate possession, he should take a true list or inventory of them. From what has been said, the requisites to a good levy, in all ordinary cases, may safely be laid down to be—first, that the officer should see the goods and have them in his power, and secondly, that he should, in addition to this, do some act demonstrating his intention from that time forward to appropriate them in obedience to the commands of his writ.”

In the present case, for aught that appears, the goods and chattels actually levied upon by the sheriff under the Mather execution may be more than sufficient to satisfy that writ, and the sheriff may have intended not to levy' on more property, because to have done so would have been oppressive. I am satisfied from the testimony taken in this ease that the sheriff returned the Mather writ without intending to, or in law effectively levying upon the property afterwards particularly levied upon and sold under complainant’s writ; that the power to take further proceedings under the Mather writ expired on the 15th day of January last, and that thereafter the complainant discovered property not included in the levy under the Mather writ, and procured the sheriff to levy upon it under his writ, and that he is entitled to the proceeds of the sale of this special property.


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    Robert H. McCarter, attorney-general of New Jersey, v. Mary Clavin, individually and as administratrix of the estate of John W. Russell.
    [Decided April 4th, 1907.]
    Sufficient ground is shown for the appointment of a receiver to protect decedent’s real property, worth $100,000. claimed by the state to escheat, and also claimed by defendant under an alleged will and by another claiming to be decedent’s only heir-at-law, the lands having been sold for municipal taxes, the rents being collected by the purchasers at the tax sale, a mortgagor having filed foreclosure proceedings, defendant as administratrix having in no way attempted to protect the property,' and it appearing that the conflicting claims will produce prolonged litigation.
    On bill for receiver.

      Mr. Robert E. McCarter, attorney-general, for the complainant.

      Messrs. Raymond, Van Blarcom ■& Anthony, for the defendant.
   Bergen, V. C.

On November 28th, 1905, John W. Russell departed this life seized of certain real estate in the city of East Orange, New Jersey, and at that time he was not supposed to leave any known relatives. The defendant, Mary Clavin, who had lived with him as a servant, claiming to be a creditor, made application for. letters of administration, which were issued to her, it being supposed that Russell had died intestate. The real estate.consisted of four tracts or parcels known as Nos. 15, 19, 21 and 23 South Maple avenue, East Orange, and he left also a small amount of personal property. Three of the four lots were improved and are occupied by tenants who are paying no rent for the reason that no one is now empowered to collect rents. One of the lots is subject to a mortgage for $8,000 upon which interest is in arrears and upon which the taxes for two years have remained unpaid, and the municipal authorities, to enforce the payment of taxes, have sold the lands, and the rents since such tax sale have been collected or claimed by the purchasers at that sale. It also appears that the holder of the mortgage security has instituted foreclosure proceedings, and that as to one lot the property is likely to be absolutely lost to the owner.

Since the granting of administration to the defendant of the personal estate, a paper-writing has been recently produced purporting to be a last will and testament of Russell, which has been offered for probate, and probably would have been probated except for a caveat filed on behalf of the State of New Jersey, and another filed on behalf of Mary Ellen Hyde, who claims that she is the only heir-at-law of the decedent.

The bill of complaint charges that Russell died intestate and left no heirs-at-law, so that the property will escheat to the state, and claims on behalf of the state that the paper offered for probate is not the last will and testament of the decedent, and that Mary Ellen Hyde is not the heir-at-law. The alleged will devises all of this valuable property, estimated to be worth $100,000, to the defendant, and it is quite apparent that the questions involved, and the great value of the property, will produce a litigation likely to cover a considerable period, and it is upon this ground that the complainant files this bill asking that a receiver of the real estate be appointed to hold the property during the litigation, with power to collect the rents and to pay off and discharge taxes, interest and any other proper lien, the removal of which may become necessary in order to preserve the property for the owner when ascertained, and also that the defendant may be restrained by a writ of injunction from interfering with the real estate or with the possession, care or custody of the receiver when appointed.

The situation briefly stated is this: The deceased died seized of real estate estimated to be worth $100,000. At the time of his death it was not known that he had any relatives; the defendant, being appointed administratrix of the personal estate, has not in any way attempted to protect the real property, and in consequence of the want of an owner, or any person representing an owner, the property has all been sold for taxes and purchased by persons who are now taking, or claiming the right to take, all of the rents from this valuable property without offering to protect it from a foreclosure sale, and equity would seem to require that a receiver should be appointed to protect the property from loss, and to hold it for the benefit of those to whom it may be finally determined it belongs.

The counsel for the defendant appeared, and without seriously denying the facts stated, insisted that this court was without power to appoint a receiver, but I am of opinion that such power does exists, and will make an order to that effect.

Under the title “Gases in which a receiver may be appointed” (Pom. Eq. Jur. § 1332), the third subdivision of the first class of cases in which receivers may be appointed is declared to be “estates of decedents.” During the litigation concerning, the admission of a will to probate, and during the interval before an executor or administrator is appointed, a court of equity has power to appoint a receiver of the personal property and of the rents and profits of the real estate where there is any .danger of their loss, misuse or misapplication.

In the present instance there is a controversy over the admission of the alleged will to probate; there is a contest over the question whether the party claiming to be the only heir is such; the property is in great danger of loss owing to tax sales and threatened foreclosure. It is clear that in the absence of an heir, in the absence of an executor or of any lawful appointee entitled to hold the property together, it will be lost, and in any event the rents and profits will be misapplied. It appears to me that if there ever was a case in which the rule I have referred to ought to be applied it is in this case, otherwise a vast amount of property that may belong to the state will, for want of protection, be swept away and pass, without practical consideration, into the hands of strangers to the decedents.

The course which I am adopting is justified, in my judgment, by Flagler v. Blunt, 32 N. J. Eq. (5 Stew.) 518, in which the learned chancellor (at p. 523), speaking of this very question, quoted from High Bee. §§ 9, 11, as follows :

“The principal ground upon which courts of equity grant their extraordinary aid by the appointment of receivers pendente lite are that the person seeking the relief has shown at least a probable interest in the Ijroperty, and that there is danger of its being lost unless a receiver is allowed.”

A receiver will be appointed and the injunction allowed as prayed for in the bill of complaint.