text:
    Moses E. Reeves v. John H. McCracken et al.
    [Filed March 18th, 1905.]
    1. The Bankrupt act of 1S98 provides that “a discharge in bankruptcy shall release a bankrupt from all of his provable debts except such as * * * were created by his fraud, embezzlement, misappropriation or defalcation while acting as an officer or in any fiduciary capacity.”—Held, (1) that the words “fiduciary capacity” having reference only to téch• nical trusts, a debt arising out of an implied understanding, bad on a conveyance in the ordinary form of an absolute deed, from R. to M., of certain parts of R.’s real estate, no trust being expressly declared, was not excepted from the operation of a discharge; (2) that the fair inference from the facts stated was that the conveyance was intended to hinder and delay creditors, and that the grantee therein did not, for that reason also, hold in a fiduciary capacity within the meaning of the act.
    2. R. executed to M. a chattel mortgage to secure certain notes of a firm of which he was a member. These notes were fully paid. The allegation of the bill was that M. claimed to hold the mortgage by assignment for a debt due from R. to him.—Held, that the defence being of a character plain and palpable, and within the command of the party at any time, in the absence of any allegation that there was any agreement that the mortgage should stand as security for money due from R. personally to M., a case for the affirmative remedy of cancellation had not been made out.
    3. A debtor may, in a case situated like the present, plead his discharge in bankruptcy after answer filed, such plea being in the nature of a plea puis darrein continuance.

      Mr. Frank E. Bradner, for the complainant.

      Mr. Conover English ancl Mr. Robert H. McCarter, for the defendants.
   Stevens, V. C.

This bill is filed against John H. McCracken and liis wife, Selena A. McCracken, mainly for an account. There are three other defendants, but it is admitted that they are bona fide purchasers for value and that no decree can be made against them.

Briefly summarized, the bill states:

1. That complainant conveyed to John IT. McCracken 157, 157% and 159 Boyd street, 223 Belmont avenue, 67 and 69 Astor street, and 580 Clinton avenue, and that tins conveyance was subsequently fortified by a conveyance by the sheriff. These properties have since been sold, either by McCracken or by the sheriff, so that McCracken no longer has title to any of them: The relief asked in respect of them is an account of the proceeds of sale and an account of the rents.

2. That there were sold by the sheriff to John IT. McCracken other lands of the complainant, viz., a vacant lot on Chestnut street and some lots on Peshine avenue. These lands, too, have been sold by McCracken, and the same relief is asked in respect of them.

3. That there were sold by the sheriff, under judgments obtained against complainant, to Selena A. McCracken, the following .lots which belonged to complainant, viz., 102 and 102% Pennington street, 305, 307, 809 Ferry street, and some lots on Peshine avenue. The lots on Peshine avenue have been sold by Mrs. McCracken. The other lots are still held by her. The relief asked in respect of these is an account of tire property as far as sold, an account of the rents and a declaration that Mrs. McCracken holds what remains unsold in trust for complainant.

4. That complainant executed a chattel mortgage to John II. McCracken; that it has been paid, and that McCracken refuses to cancel or surrender it.

5. That there exist two judgments against complainant which were assigned to J ohn II. McCracken, and which McCracken still holds. The bill prays that McCracken may be required to assign them to complainant.

Mr. and Mrs. McCracken answered separately, but pending-suit Mr. McCracken became bankrupt, and leave was given to him to plead his discharge. lie has done so, and the question now before the court respects the sufficiency of the plea. It is contended bjr plaintiff that McCracken occupied the position of trustee, and that trustees are excepted from the operation of a discharge under the Bankrupt act. It is contended by Mc-Cracken that, not being a trustee of an express or technical trust, the plea is, under that act, a bar.

The act of 1898 provides as follows (§ 17) :

“A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as * * * (4) were created by his fraud, embezzlement, misappropriation or defalcation while acting as an officer or in any fiduciary capacity.”

Chapman v. Forsyth, 2 How. 202, is the leading case 'on this subject. It was there held that by the words “fiduciary capacity” were intended technical trusts and not those which the 'law implies from contract.. A cotton factor had sold his principal’s cotton, and had failed to account for the proceeds. The judg-. rnent was that he had not acted in a fiduciary capacity within the meaning of the act. In Hennequin v. Clews, 111 U. S. 676, a ease arising under the act of 1867, it was likewise so held in the case of one who, to secure a debt due from himself, had hypothecated securities which had been pledged to him to secure the obligations of another. In Palmer v. Hussey, 119 U. S. 96, it appeared that bonds had been placed in the hands of one H., who had bound himself by waiting to hold them subject to the order of P. and to allowr him (P.) two per cent, interest thereon. H. having thereafter fraudulently sold them, it vras decided that they had not been'held in a fiduciary capacity. In Noble v. Hammond, 129 U. S. 65, the case was that A had asked B to collect money for him, without compensation, and to keep it until called for. B collected the money and without fraudulent intent deposited the proceeds to his own credit with his own funds, and subsequently became bankrupt. Here, too, it wras decided that B was not acting in a fiduciary capacity. In Upshur v. Briscoe, 188 U. S. 365, by the paper which, it was alleged, evidenced the trust, B agreed (inter alia) to pay interest on a fund of $10,000 to A during her life, and at her death to pay it to her legal issue. It was held, nevertheless, that B was not a technical trustee within the meaning of the act; that he did not sustain a fiduciary relation to the money, because he had the right, for the time being, to use the principal in any way that he thought proper. In Crawford v. Burke, 195 U. S. 176, a case under the act of 1898, it was held that a commission merchant and factor who sold for others and withheld the money received wras not indebted in a fiduciary capacity within the meaning of that act. The court accorded to the words “fiduciary capacity” the same limited signification that had been given to them under the prior acts of 1841 and 1867. It declared that they were further limited by the words “fraud,” “misappropriation,” &c., which extended to them as well as to the word “officer.”

In Gibson v. Gorman, 44 N. J. Law (15 Vr.) 325, Justice Depue reviewed the cases and said that the words “fiduciary character” in the act of 1867 referred to technical trusts only, and not to such trusts as are implied by law from mere contracts of agency or baihnent. He refers with approval to a case in Massachusetts (Woodward v. Towne, 127 Mass, 41) which bears strongly upon the case in hand. There the plaintiff had executed to defendant a power of attorney to sell land. Defendant sold the land and, contrary to his duty, lent the proceeds to one who failed to pay and who died insolvent. It was held by Chief-Justice Gray that defendant was not a technical trustee under the act of 186?.

It would be superfluous to refer to the other numerous and' conflicting cases on this subject, for those above referred to are controlling. Tested by them, the plea must be held to be good. The allegations of the bill are lacking in precision and somewhat involved, and this must militate against complainant. Taken altogether, they do not disclose a technical trust. What they do show is this: That the complainant was, on January 3d, 1896, threatened with the entry of two judgments against him; that he sought advice from Mr. McCracken, who had on different occasions acted as his legal adviser; that McCracken told him that his “creditors would not malee any valid objection” to the conveyance, and “that-he would make arrangements for an extension of time” to pay the claims against complainant, and would raise money tO' pay them; that he then conveyed to him a considerable portion of his real estate, the conveyance being, as far as appears, in the ordinary form, and the consideration stated, $3,500; that complainant at the same time executed a due bill to McCracken whereby he acknowledged himself indebted to complainant in the sum of $3,49?, although, so the allegation is, “said McCracken did not pay any consideration,” and complainant was not indebted to him “in any sum of money whatsoever;” that on the same day (January 3d, 1896) Mc-Cracken leased the homestead property (part of that conveyed) to Reeves, “because,” as it is alleged, “it would look better for him to hold a lease which he could show to your orator’s creditors;” that while this lease, in terms, provided that Reeves should pay rent, the verbal agreement was that he should not. It is further alleged that a judgment for $2,1?5.05 was actually entered on the day following the conveyance.

The bill is a-s noteworthy for what it fails to state as for what it states. So far as the land conveyed on January 23d is concerned, it fails to state any express trust, either written or verbal, contemporaneous or subsequent. What McCracken was to do with the property conveyed to him is left to conjecture. In the absence of other facts giving rise to some other inference, it must be inferred, from the facts stated, that the object of the convejrance was to hinder and delay creditors. It is impossible to contend that such a conveyance was a technical trust. It may be conjectured that the complainant had such confidence in McCracken that he was willing to give him the legal title to his property, in the expectation that he would make an advantageous bargain with his creditors and return to him what remained of it or of its proceeds. But this confidence was not a technical trust. The statute declares that, except in the case of trusts resulting by implication of law (which this was not), all declarations and creations of-trust in land shall be manifested and proved by some writing, signed by the party enabled by law to declare it. Here there was no such declaration of trust. Not only so, but if I have made the proper inference as to the purpose of the parties, the implied understanding would, if it had been reduced to writing, have been illegal. A device to hinder creditors could not be deemed a technical trust, within the meaning of the act. It is plain, therefore, that in any aspect of the matter, the transfer and any liability consequent thereon does not come within the exception to the discharge in bankruptcy.

In addition to the lands conveyed, certain other lands were sold by the sheriff under executions and bought in by Mc-Cracken. I do not find in the bill any allegation of any express trust in reference to these lands. If there was any it was not declared in writing. Any claim in respect of them does not, therefore, come within the exception to the discharge.

The third ground of complaint relates to the conveyances to Mrs. McCracken. As the plea does not extend to her, I need not consider it.

An account is also asked in respect of the rents collected. So far as these rents came from the properties already referred to, they are subject to tiro considerations already mentioned. But the bill alleges that shortly after the judgment sale had taken place McCracken went to complainant and represented that it would be to his advantage to permit him (McCracken) to collect the rents of all his property, and that he consented to his doing so by reason of McCracken’s statement that his creditors could cause him, a great deal of trouble unless he (McCracken) “should have possession of all the properties and should actually receive the rents.” Here it is plain that, apart from the objection that this was merely a continuation of the scheme to hinder creditors, McCracken was acting merely as an agent, as to whom the foregoing eases show that the discharge in bankruptcy was a perfect bar.

The next allegation is, in substance, that complainant executed a chattel mortgage to McCracken; that this mortgage has been paid, and that McCracken refuses to cancel and deliver it, claiming that he has the right to hold it to secure the payment of other pretended obligations. There is a prayer that Mc-Cracken may be ordered to cancel and surrender it. I do not find anything in the Bankrupt act which would, in express terms, relieve the defendant from the obligation to do so. But if there be any right or claim under the mortgage, it passed to the trustee in bankruptcy and could not be asserted by the bankrupt himself. The court could not now decree a cancellation without bringing in such trustee. Moreover, the law on this subject is thus stated in Chase v. Chase, 50 N. J. Eq. (5 Dick.) 143, 146: “Where the defence is of a character plain and palpable, and within the command of the party at any time, this court ought not to encourage a resort to an expensive litigation in a court of equity. In all eases the court must exercise a sound discretion and be regulated in its action by the propriety of the particular case before it.” Here, as far as the allegations; go, it would seem that the defence would be plain and palpable if made at any time. The mortgage on its face purports to have been given to secure promissory notes of the firm of M. E. Reeves & Son. This being so, in the absence of any allegation that there was an agreement that tire mortgage should stand as security for moneys due McCracken, it is difficult to understand how McCracken’s contention could at any time wear even the semblance of plausibility. Besides, the mortgage would be foreclosed in this court, where every ground of defence could be urged. It would seem that, -even if the relief of cancellation could now be given as against McCracken, sound discretion would require the court to refuse it on the state of facts disclosed by the bill.

I think I must regard tire allegations in reference to this mortgage merely as part of a statement, on which complainant bases his right to an account, and I must hold that tire plea is a bar to all the relief that was, before tire discharge in bankruptcy, properly demandable on that statement.

An objection is taken to the course of practice pursued in this ease. It is said, on the authority of Lowry v. Morrison, 11 Paige 327, that the defendant should have applied for a stay of proceedings and for an order that complainant file a supplemental bill, and so bring in the trustee in bankruptcy. In the case before me the defendant first filed an answer and subsequently applied for leave to plead his discharge. This course of procedure is recognized in Crawford v. Burke, 196 U. S. 176, already cited. It would seem that tire objection, if valid, should have been taken when the order for leave to plead was applied for. But the objection is untenable on another ground. This is not, as was the case of Lowry v. Morrison, an effort to follow specific property, upon which the plaintiff had a lien. As I have already stated, McCracken disposed of all the property to which he had taken title before the bill was filed, and the suit was, as to him, simply for an account and for a money decree. There is nothing to indicate that property of any description passed to the trastee burdened with a specific lien or affected with a trust in his favor. The complainant had the same right to prove his demand before the trustee, and, if allowed, to share in the distribution, that any other creditor had.


source: Caselaw Access Project

author: Stevens, Y. C.

license: Public Domain

text:
    Arthur L. Andrews v. Guayaquil and Quito Railway Company et al.
    [Decided April 7th, 1905.]
    A plea put in by one P. denied, in general terms, that the property concerning which relief was sought was located within the State of New Jersey. It admitted (by not denying) that the property in question was capital stock of a New Jersey corporation.—Held, that inasmuch as the siMs of the stock was in New Jersey, the New Jersey courts had jurisdiction to proceed against P. in respect of it; that he was a necessary party to the proceeding, and that a decree could be made in respect of the res which would, in case he should not appear, bind his interest therein.

      Mr. Edwin B. Williamson, for the defendant Pruyn.

      Mr. Charles L. Corbim, for the receiver of the Ecuador Company.
   Stevens, Y. C.

Robert C. Pruyn, one of the defendants in the cross-bill of the receiver of the Ecuador Company, pleads to- the jurisdiction.

The fourteenth amendment to the constitution of the United States provides that no state shall deprive any person of life, liberty or property “without due process .of law.” In the recent case of Hill v. Henry, 66 N. J. Eq. (21 Dick.) 150, I attempted to summarize the adjudications in the supreme court of- the United States on this provision, so far as they relate to the subject in hand. It was there said that the following propositions had been established;

“First. That a personal judgment is without validity if it be rendered by a state court' in an action upon a money demand against a non-resident, proceeded against by publication, but not personally served with process within the state and not appearing.

“Second. That no validity is imparted to such a judgment by the fact that the defendant has, at the time the action is commenced, property within the state upon which a levy can be made under the judgment.

* * t'fi # tí; $$$$$£

“Fourth. In suits strictly in rem—that is, where the property itself, conceived of as having done the wrong, or as having been the instrument of its commission, is being proceeded against, and in suits quasi in rem—that is, where the suit is against the person in respect of'the res—where, for example, it has for its object partition, or the sale or other disposition of defendant’s property within the jurisdiction, to> satisfy plaintiff’s demand by enforcing a lien upon it—personal service within the jurisdiction or appearance is not necessary. The decree can, however, extend only to the property in controversy. But there is this distinction between these two classes of proceedings. In the former, public citation to the world is all that is necessary, and the decree binds everybody. In the latter, defendant’s interest is alone sought to be affected. He must be cited to appear and the judgment' therein is conclusive only between the parties. Freeman v. Alderson, 119 U. S. 185.” In-this latter class of cases, to use the words of Mr. Justice Brewer, in Arndt v. Griggs, 134 U. S. 316, “the state may provide any reasonable method of imparting notice.”

With these distinction's in view, I proceed to the consideration of the question in hand. The case presented by the pleadings is a complicated one, but the facts material to the decision of the present issue are few and simple. The complainant, Andrews, files his bill to compel a transfer of certain shares of stock of the Guayaquil and Quito Railway Company. This stock, he claims, should be assigned to Mm as collateral security for certain notes made to Pruyn and by Pruyn endorsed to him. He alleges that the railway company and certain other persons are wrongfully refusing to make this transfer. The Ecuador Company, a New Jersey corporation, organized as a construction company to build part of the road of the Guayaquil company, has become insolvent, and Charles C. Black has been appointed its receiver. Black, as such receiver, answers and files a cross-bilL against the complainant and the other defendants, and also against Robert C. Pruyn, not a party to the original bill, but made a party to the cross-bill under the practice referred to in Green v. Stone, 54 N. J. Eq. (9 Dick.) 387, 400. To this cross-bill Pruyn pleads that he is a resident of the State of New York and not of New Jersey; that no process has been served upon him; that no appearance other than the special appearance herein made has been entered for him or on his behalf, and that he has no property and claims no right to any property within the State of New Jersey. The plea then proceeds as follows: ' .

“Nor is the property concerning which relief is sought against this defendant by said answer located within the State of New Jersey; nor can any decree be entered in this suit which is enforceable against this defendant.”

The cross-bill alleges, among other things, that the Ecuador .Company issued to Pruyn three thousand two hundred and fifty shares of its stock, which Pruyn accepted and which he still holds and for which he has made no payment, except certain •cash advances; that, having made default, he procured the directors of the Ecuador Company to direct the appropriation to him, as security for the notes representing such advances, of $664,000 of the preferred stock of the Guayaquil and Quito Railway Company, “and sought thereby to convert the same to his own use in violation of the terms of the Corporation act, which forbids the disposal of property by an insolvent corporation in such manner as to.give preference.” The cross-bill further charges that the complainant, Andrews, is the attorney and counsel of Pruyn, and that Pruyn transferred to him the notes which he had improperly procured (and which form the basis of the present suit) to be used by the said Andrews for the benefit of the said Pruyn, in order to appropriate the assets of the company for his (Pruyn’s) benefit, &c.

On this plea the material allegations of fact contained in the cross-bill, if not denied, must be taken as true. 1 Dan. Ch. Pr. *612. It must, therefore, be deemed to be admitted that this suit is being prosecuted by Andrews for Pruyn’s benefit, and that if Andrews is demanding a transfer of the stock as security for the notes, he is demanding it for Pruyn and not for himself. Pruyn does indeed say, in his plea, that he claims no right to any property within the State of New Jersey, and that the property concerning which relief is sought is not located within this state. By not denying it, he admits, however, that the Guayaquil company is a New Jersey corporation, and this admission is fatal to him. His general denial that the property is located here is the mere statement of an erroneous legal conclusion. If the company is a New Jersey company, then the situs of its stock is in New Jersey, and any question relating to it may be determined here. Such is tire decision of the supreme court of the United States in the recent ease of Jellenik v. Huron Copper Mining Co., 177 U. S. 1. The provisions of our statutes (Execution act, Gen. Stat. 1415 § 4; Corporation act of 1896 p. 280 §§ 7, 18, 20) are substantially similar to the Michigan statutes that were under consideration in that case.

The res demanded by the complainant being locally situate in this state; the demand made being, in fact, made on behalf of Pruyn, who is, if the complainant’s claim be valid, beneficially if not legally entitled to it; the same res being also demanded by the receiver, Black, who claims, in opposition to Pruyn, the case is clearly one of which this court has jurisdiction and Pruyn is a necessary party to the final and effective determination of the controversy. The case is distinguishable from Wilson v. American Palace Car Co., 45 N. J. Eq. (20 Dick.) 730, and Puster v. Parker, 59 Alt. Rep. 232, for there the adjudication rested upon the ground that the res was without the jurisdiction. In the Car Company’s Case, Mr. Justice Dixon expressly says: “No doubt, when the object of a suit is to enforce a specific lien upon property of the defendant within the state, or when the court obtains control over such property * * *, a state court may be authorized, after reasonable effort to notify the absent defendant, to enforce the claim of the plaintiff respecting such property.”

This is not a proceeding in rem, where a general notice suffices to bind everybody. It is, as to the stock, a proceeding quasi in rem, where, as is said in Hill v. Henry, supra, following Freeman v. Alderson, 119 U. S. 185, the individual to be bound must be specifically named as a party, and where, if he be a non-resident, it is imperative that a reasonable effort be made to notify him, such effort being made pursuant to a “reasonable method provided -by the state for imparting notice.” Arndt v. Griggs, 134 U. S. 316. If this be not done, the proceeding is not due process of law. If it be done, and he does not appear, he is, nevertheless, bound by the adjudication that may be made with respect to his interest in the res, but no further. In the case in hand it follows, therefore, that as the plea is to the whole of the cross-bill it. should be overruled. The pleas to the other cross-bills stand substantially upon the same footing.


text:
    Celina M. Wolters v. Robert Shraft and Wife.
    [Decided April 28th, 1905.]
    1. N. S. I. conveyed to F. R. W. The grantee was designated “trustee for R. M. W.,” and the habendum, clause was “to have and to hold the above-described land and premises, with the appurtenances, unto the said party of the second part (F. R. W.), his heirs and assigns, to the only proper use, benefit and behoof' of M. R. W. aforesaid, her heirs and assigns forever.” The consideration proceeded from F. R. W., who stood in loeo parentis to R. M. W.—Held, that if the statute of uses executed the legal estate in R. M. W., it did not, because the consideration proceeded from F. R. W., make her a trustee for him.
    2. A trust will not be raised in opposition xo the declaration of the person who advances the money, or the obvious purpose and design of the transaction.

      Mr. James R. Nugent and Mr. Samuel F. Bigelow, for the complainant.

      Mr. Elwood G. Harris, for the defendants.
   Stevens, Y. C.

On September 22d, 1882, the Newark Savings Institution conveyed to Frederick R. Wolters a house and lot fronting on Parkhurst street, Newark. The grantee, wherever named, is designated in the deed, “Trustee for Rosa Mary Wolters.” The habendum clause is as follows:

“To have and to hold the above-described land and premises, with the appurtenances, unto the said party of the second part (Frederick R. Wolters), his heirs and assigns, to the only proper use, benefit and behoof of Mary Rosa Wolters aforesaid, her heirs and assigns forever.”

Mary Rosa was born in 1868. She had lost both father and mother before she attained the age of nine years. She was committed to the care of an orphanage in Brooklyn, and when ten years old was given by the mother superior of that institution to Frederick R. Wolters and his wife, who were childless. The evidence demonstrates that Mr. and' Mrs. Wolters treated her in all respects as their child, giving her their own name. She lived with them up to the time of her marriage to Robert Sliraft in April, 1895, a period of sixteen years. There can be no doubt but that they stood to her in loco parentis. Brinkerhoff and Wife v. Merselis’ Executors, 24 N. J. Law (4 Zab.) 680, 683; Powys v. Mansfield, 3 Myl. & C. 367; Roberts’ Appeal, 85 Pa. St. 84. Frederick R. Wolters died in 1900. He gave all his property, then consisting of an estate of about $100,000, to his widow. He made Robert Shraft one of his executors, and calls him “my son-in-law.”

The bill is filed by the widow, who prays that it may be decreed that she has, as against Mary Rosa, a perfect title to the premises deeded by the savings institution.

The complainant produces no evidence showing mistake or misapprehension at the time of the making of the deed. She bases her right on the following train of reasoning: She says that under the operation of the statute of uses, the legal title was, at the time the deed was made, transferred instanter from Wolters, the trustee, to Mary Rosa, the cestui que use; and that thereupon, because the consideration proceeded from Frederick Wolters, she became his trustee under the doctrine of resulting trusts. This argument will not bear a moment's consideration, even if we assume, as I think without warrant from the authorities, that although Wolters stood in loco parentis, the principle of advancement, applied to a wife- or child, (2 Pom. Eq. Jur. § 1039; Dyer v. Dyer, 1 Lead. Cas. Eq. *177; Sayre v. Hughes, L. R. 5 Eq. 380; Read v. Huff, 40 N. J. Eq. (13 Stew.) 234; Hallenback v. Rogers, 57 N. J. Eq. (12 Dick.) 221; 58 N. J. Eq. (13 Dick.) 580) would not have applied to him, had the conveyance of the legal title been directly and in terms to Rosa.

The statute of frauds requires declarations of trust to be manifested and proved by some writing signed by the party, the exception being of those cases in which the trust arises or results by implication of law. It is obvious that while a trust may result in the absence of express declaration, it cannot, under the operation of this rule, prevail against such a declaration. “It will not be raised,” says the author of the American note to Dyer v. Dyer (1 Lead. Cas. Eq. 278, 3d Am. ed.), “in opposition to the declaration of the person who advances the money, nor in opposition to the agreement-of the parties on which the conveyance is founded, or the obvious purpose and design of the transaction.” This would seem to be so obvious as not to require a citation of authority for its support.

In the case at bar the conveyance of the legal title is made, not to Rosa, but to Wolters. The use or trust is expressly declared to be for her benefit. Because under the statute of uses it may have been executed in Rosa, even at law, Melick v. Pidcock, 44 N. J. Eq. (17 Stew.) 538, is this court, without anything in the deed to warrant it, to raise up another trust, the exact opposite of that declared? Should it say that, although the deed declared Wolters to be the trustee and Rosa the beneficiary, Rosa was, in fact, the trustee and Wolters the beneficiary? Such a conclusion would be unsupported by authority and contrary to legal principle.

I think the bill should be dismissed.


author: Gbey, Y. C.

text:
    Annie E. Costell v. Smith Costell.
    [Decided March 2d, 1905.]
    1. In a suit for divorce from bed and board, a motion for leave to file a cross-bill charging adultery, and praying for an absolute divorce, made more than six months after issue joined, and after final hearing had been moved and a witness sworn for complainant, should be denied, where adultery was not pleaded as a recriminatory charge to the bill or supplemental bill, and no facts were shown excusing the delay in presenting the cross-bill.
    2. Where a husband has lost his affection for his wife and has conceived a hatred for her, and there is no probability that his feelings will ever soften, and their further association as husband and wife might be dangerous, a permanent severance from bed and board will be awarded the wife on proof of his extreme cruelty to her.
    On bill for divorce from bed and board. Answer thereto, supplemental bill and answer thereto;, and proofs on final hearing.

      Mr. Howard L. Miller and Mr. Frederick A. Hex, for the complainant.

      Mr. William J. Kraft and Mr. Howard Garrow, for the defendant.
   Gbey, Y. C.

The complainant is the wife of the defendant. They were married in 1875, and have always lived in this state. She brings her suit for a decree of separation from bed and board because of his extreme cruelty, and for alimony. The cause has been brought to a final hearing on the issues joined in the bill of complaint filed in January, 1899, and the supplemental bill filed in 1901, and the defendant’s answers to those bills.

The accusation in the original bill of complaint and in the supplemental bill is extreme cruelty. The defence pleaded in the answers to the bill and supplemental bill is a denial of any cruelty. No recriminatory charge that the defendant was guilty of adultery appears in either of the answers to the bills of complaint.

A recriminatory charge that the complainant had 'committed adultery with one Pitman is set up as a defence to a petition for alimony pendente lite, but no such charge has been pleaded by the defendant, either to the original or supplemental bill of complaint.

No pleading of the defendant presents, as an issue to be tried on this hearing, the recriminatory defence that the complainant had been guilty of an adulterous breach of her marriage vows, and for that reason had no status to aslc the aid of the court by granting her a limited divorce and compelling her husband to observe his marital obligation to provide for her. *

After the final hearing of the cause had been moved, and a witness sworn for the complainant, the defendant, for the first time (more than six months after issue joined), asked leave to file a cross-bill charging the defendant with adultery, with prayer for an absolute divorce. Nothing was exhibited to the court by way of showing of cause for this proposed radical addition (after the cause had been moved) to the issues to be supported or refuted by the evidence. It was thought to be unfair and unjust to the complainant to oblige her to answer at once so serious a charge, without any notice or previous opportunity for preparation to meet it, unless some sufficient reason were exhibited by the defendant in justification of the making of his motion at so late a period in the litigation. No attempt was made by the defendant to support his motion by proving any facts which explained his delay in presenting it to the court in time to enable the complainant'to prepare for hearing on the new issue. For this reason the motion for leave to file a cross-bill charging adultery was, refused.

As the cause progressed it appeared that the defendant sought (without any pleading charging the complainant with adultery) to bring that charge in evidence against her as a defence to his alleged extreme cruelty upon the ground that her adultery was the occasion of his abandonment of her.

Such a defence ought probably to have been made by a recriminatory pleading, but upon the claim that her act of adultery was the reason the husband discarded the wife, evidence as to her alleged crime was admitted.

The testimony satisfies me that the defendant beat and abused his wife, turned her out of doors, and refused to provide for her or to harbor her, and that his conduct was so violent and persistent that it amounted to the extreme cruelty mentioned in the statute. I am strongly inclined to believe that to avoid a decree ■which would oblige him to pay her alimony, he arranged, after the original bill was filed, to have her again live in the same •house with him—-finally casting her off and refusing to provide for her.

The testimony presented by the witnesses offered on the part of the defendant in support of his denial of his cruel treatment of his wife did not impress me as truthful, or in any way reliable, when it was delivered on the stand. His witnesses appeared to be willing to deny everything which imputed to him any dereliction or misconduct of any sort or kind toward his wife, whether they had personal knowledge of the acts of cruelty proven ox not.

It was- claimed that the recriminatory testimony charging the wife with committing adultery with the men Pitman and Appley would show not only that„she did commit that crime, but that her adultery was the occasion of her husband’s abandonment of her.

The testimony offered on the part of the defendant seeks to prove that the complainant committed adultery with Pitman- in the years 1896 and 1897. That testimony is evidently inspired by ill feeling and resentment, as in the case of Lillie Cramer, now Mrs. Rudolph, or is dependent upon the defendant’s own evidence, or is utterly unreliable. Wherever any two witnesses attempted to narrate the same incident, their variances in essential particulars of date, place -or actual happening, not only from each other, but from their own earlier affidavits, made their testimony unworthy of belief. I am satisfied that the husband lived with the wife after he knew all about these charges with relation to Pitman, and that he did not believe them himself.

Both the wife and Pitman explicitly .deny every inculpatory act referred to in the proofs. Both of them testified frankly and fully. I could see no indication of falsehood in what they stated. I have therefore felt bound to hold the complainant guiltless of that charge.

The adultery charged to have been committed with Officer Appley is presented by testimony which is even, more unreliable, a woman who is a professional bawdy-housekeeper and an employed watcher being the principal witnesses. Neither of them, when on the stand, appeared to be telling the truth. The good faith and disinterestedness of the woman witness were, I think, successfully challenged. Both the defendant and Officer Appley denied all the charges'against them. Their manner on the stand,_ and their fullness and frankness in making their denials, were satisfactory of the truthfulness of their statements.

It is to be noted that this latter charge of the wife’s offence with Appley is claimed to have been continued during the summer and fall of 1896, and the woman witness testifies that the defendant, in the fall of 1898, told her that he knew his wife was in the habit of coming to her house, and forbade her to receive his wife.

All of the defendant’s answers in this litigation—three in all, one to the original bill, one to the petition for alimony pendente lite, and one to the supplemental bill—were filed since the fall of 1898, yet not one of those answers mentions or in any way refers to his wife’s alleged criminal conduct with Appley. The first time this alleged offence with Appley appeared in this cause was when the bawdy-housekeeper was called to the stand by the defendant on this final hearing.

I am satisfied that the weight and credibility of the testimony overthrows these accusations against the wife. The husband’s own conduct is inconsistent with his own pretended belief in their truth.

The woman, the complainant, is about forty-five years of age. She has been married to the defendant for twenty-six years. Her husband has lost his affection for her and wants to be rid of her. But he never made any charge of unfaithfulness against her by any legal proceeding until she took steps to force him to support her. Even then his charges appear only at the tail end of the litigation by way of evidence without previous allegation or notice to her that he expected to make them.

Upon tire whole case, I am constrained to believe that the defendant has not supported these adultery charges by either the weight or the credibility of the evidence; that his abandonment of and cruelty to his wife were not related to these charges, and that a decree should be made in her favor.

It appears from the husband’s conduct that he hates Iris wife, and at their time of life I see no reason to believe that there is any probability that his feelings will ever soften, and their further association together as husband and wife may be dangerous.

The decree should order a permanent severance from bed and board.

It has been shown that the defendant is a considerable owner of real property. A proper sum of alimony, which accords with his circumstances in life and capacity to pay and her necessities, would be $8 per week. She should also have costs of suit and a counsel fee of $50.

I will advise such a decree.


author: Grey, Y. 0.

text:
    Arthur H. Stiles et al. v. Mary S. Galbreath et al.
    [Decided March 15th, 1905.]
    1. The debt contracted and owing for labbr done or material furnished for the erection and construction of any building, &c., becomes a lien, by virtue of the first section of the Mechanics’ Lien act (P. L. 1898 p. 538), as soon as it becomes a debt.

      2. All liens arising under that act are concurrent. The holders of such liens are entitled to share ratably in the values of the building and land upon which their debts have become liens. This equity continues whether those values are realized by a sale under the Mechanics’ Lien act or under any other proceeding which divests the mechanics’ liens from the building and lands and relegates the holders thereof tg the proceeds of the sale for their remedy.
    3. Section 5S of the Chancery act of 1902, which provides that in any foreclosure suit persons claiming liens on the mortgaged premises which could be, but which are not, recorded at the time the bill to foreclose is filed, shall be bound by the foreclosure suit, &c., is a statute of convenience of procedure only. It binds the holder of the non-recorded lien “so far as the (mortgaged) property is. concerned,” but does not determine his rights in the purchase-money. As the owner of the unrecorded lien is not a party to the foreclosure, has no notice of it and no hearing as to his rights, it would not be “due course of law” if it were held that the foreclosure absolutely destroyed his lien.
    4. When two or more creditors have concurrent liens upon a fund which stands to pay all their claims ratably, no one of those creditors can, by any procedure, equitably take the whole fund and apply it exclusively to the satisfaction of his own debt.
    5. Any creditor who so appropriates a fund or property charged to pay concurrent liens must account therefor to his fellow-lien claimants according to their ratable shares.
    On bill for surplus money, answers and proofs.
    The original bill of complaint in this cause is filed by Arthur Stiles and John McOlay, partners, trading as Stiles & McOlay. It seeks a decree that certain surplus money under the control of this court in a foreclosure' suit, wherein Stiles- &. McOlay were complainants and Mary S. Galbreatli and others were defendants, may be decreed to be paid to the complainants, Stiles & McOlay.
    The original bill filed in this cause made defendants Mary S. Galbreatli, the owner of the equity of redemption, and others her creditors, who claimed interests or rights in the surplus money.
    The bill alleges that in the preceding foreclosure suit in this court there was a sale made, and the surplus money, amounting to $6,749.49, proceeding therefrom was deposited with the clerk of this court: that after the filing of the said bill to foreclose, and before the sale of the mortgaged premises, the complainants acquired a lien against the lands secondly described in the foreclosure bill of complaint, and the buildings thereon erected, under the Mechanics’ Lien law of this state, which Ren was carried to judgment in the Atlantic county circuit court.
    The complainants claim and insist that the said surplus money, while apparently belonging to Mary S. G-albreath, holder of the equity of redemption, is properly and lawfully applicable to the satisfaction of their aforementioned mechanics’ lien judgment obtained by them.
    The complainants further show that the defendant Albertson & Young Company, a corporation of this state, also filed a lien claim on January 27th, 1902, against said land secondly described in said mortgage for the sum of $931.14; that the defendant Charles A. Devlan also filed a lien claim on February 3d, 1902, against said secondly-described lands and buildings for the sum of $3,040; that the defendant David H. Watts, trading as Sharpless & Watts, also filed a lien claim on February 28th, 1902, against said secondly-described lands, for the sum of $2,2152.15; that the defendant Morse Williams Company, a corporation of this state, on or about March 11th, 1902, also filed a lien claim against said secondly-described lot of land, and buildings thereon erected, for the sum of $3,620; that the Thackara Manufacturing Company, a corporation of this state, on the 19th of April, 1902, filed a mechanics’ lien claim against said secondly-described lot and buildings for the sum of $1,328; that Frederick D. Pettet filed a lien claim against said secondly-described lot and buildings on May 10th, 1902, for the sum of $572.65; that David H. Watts, trading as Sharpless & Watts, on May 12th, 1902, filed another mechanics’ lien claim on said land upon said secondly-described lot and buildings for the sum of $864.
    The complainants allege that the lien claims of tire said several defendants set forth in the bill of complaint have been reduced to judgment or are now in process of suit.
    The complainants insist that the complainants and such of said lien claimants as have established their claims to the satisfaction of this court are entitled to be fully paid out of the surplus, if there should be sufficient therefor, and if not sufficient to satisfy them in full, then to be paid pro rata amounts in satisfaction of said claims.

      The complainants pray that the surplus money be declared subject to and applicable to the said claim of the complainants, and that the complainants and such other claims as may be adjudged to be valid liens against said mortgaged premises may be decreed to be paid out of said surplus money and for further relief.
    A decree pro confesso was taken against the defendant mortgagor, Mary S.. Galbreath, the holder of the equity of redemption.
    Answers were filed by the other defendants. Uone of these answers raised any disputed questions except that of the defendant, Morse Williams Company.
    The answer of the last-named defendant, Morse Williams Company, avers that that defendant was not a party to the foreclosure bill above mentioned, which was filed on December 13tln 1901; and further alleges that said defendant had filed a mechanics’ lien claim against the premises in question on December 6th, 1901, for a balance due of $7,644.56, and that judgment was entered thereon in Atlantic county circuit court on April 17th, 1902, for $7,681.64.
    The answer of Morse Williams Company also contains clauses setting up new matter as a defence, as follows:
    “And this defendant, further answering said bill, says that it is informed and believes that said mortgage so foreclosed by complainant and said lien claim arose as follows:
    “The said domplainants had a contract with the said Mary S. Gal-breath to erect a building on the land described in said lien claim which was one of the tracts described in said mortgage, for the price of’ forty-two thousand three hundred and eighty-one dollars; that after the commencement of the building they required the said Mary S. Galbreath to give them a mortgage on said lands as collateral security for the payment of the amount to become due them under said contract:
    “That in pursuance of that agreement the said Mary S. Galbreath executed the mortgage so foreclosed, conditioned for the payment of thirty-five thousand dollars within three months from the date of said mortgage, which was dated July first, nineteen hundred and one, acknowledged July twelfth, nineteen hundred and one, and recorded July nineteenth, nineteen hundred and one:
    ■“That the building’ so contracted to be erected was commenced about the fifth day of February, nineteen hundred and one:
    “That the said complainants knew that this defendant was under a contract with the said Mary S. Galbreath to erect an electric passenger elevator in said building, and that other defendants to the bill in this ease were furnishing labor and materials in the erecting and completion of said building, and that ihe building and the lands whereon the same was erected were, by virtue of an act of the legislature of the State of New Jersey, entitled ‘An act to secure to mechanics and others payment for their labor and materials in erecting any building (Revision of one thousand eight hundred and1 ninety-eight), approved June fourteenth, eighteen hundred and ninety-eight,’ liable for the payment of the debt due this defendant, and the debts due other persons; and that said debt due this defendant was a lion on said building' and the lot or curtilage whereon the same was erected; and that this defendant completed its work on the fourteenth day of November, nineteen hundred and one.
    “And this defendant further says that although the said complainant knew of the several liens of this defendant and others upon the said building and lands by virtue of said statute, yet, when the said complainants filed their bill, on December thirteenth, nineteen hundred and one, they did not make parties defendant to said bill any of the persons having liens against the said building and lands; that the complainants were the purchasers of said land upon which said debts were liens at said foreclosure sale; that the said complainants took said mortgage solely as a security collateral to their lien claims given to them on said building by virtue of said act above recited, and not in payment for any labor performed or materials furnished in the construction of said building; that they did not advance any money upon said mortgage; that afterwards, claiming that they had, in addition to the contract price, furnished extra work to the amount of four hundred and eighty-four dollars and fifty-six cents, that there was due them forty-two thousand eight hundred and sixty-four dollars and sixty-four cents from said Mary S. Galbreath; they credited said second mortgage for thirty-five thousand dollars, and refrigerators not put in two hundred and twenty dollars, and filed a lien claim for the balance, seven thousand six hundred and forty-four dollars and fifty-six cents, which is the lien claim mentioned and described in the said bill of complaint, upon which judgment by default was entered on the seventeenth of April, nineteen hundred and two, as above recited.
    “This defendant, further answering, says that in accordance with the act above recited, and for the purpose of perfecting its lien on said building and lands, on the eleventh day of March, nineteen hundred and two, it filed its claim against Mary S. Galbreath, builder and owner, said complainant mortgagee and others, in the office of the clerk of the county of Atlantic, issued a summons on said lien claim and proceeded so far therein that a judgment by default was entered on the second day of June, nineteen hundred and two, against the said Mary S. Galbreath, builder and owner, pleas having been filed by said complainants and by the Guarantee Trust Companj1’, assignee of their said mortgage.
    “And this defendant avers that the complainants and the said several persons, including this defendant, parties to said bill of complaint, had, by virtue of the act above recited, liens on said buildings and land which would be enforced li3' a conve3rance to the purchaser in proceedings on said lien claims of the estate which the owner had in the buildings and lands at the commencement of the building, subject only to all mortgages and other encumbrances created and recorded or registered prior to the commencement of the building- and subject to the lien of mortgages given and recorded under the circumstances contemplated by and in conformity with the provisions of sections 14 and 15 of the act. That the said mortgage so made by the said Mary S. Galbreath to the said complainants was not a mortgage given and recorded under the circumstances contemplated by and in conformity with the provisions of sections 14 and 15 of said act, in that it was not a mortgage for the purchase price, nor was it a mortgage given to secure advances, but was only a mortgage given as collateral with said lien that said complainants had by virtue of said act on the said building and lands, and was in effect of no validity as against the claim of this defendant.”
    The complainants gave notice to strike out the above-quoted clauses (in answer of Morse Williams Company), claiming that the matter so set up as a defence was impertinent, and also to strike out the following matter or allegations set up in said answer by way of cross-bill, the same being entirely separate and distinct from the matter set up in the bill of complaint, and being impertinent thereto, viz.:
    “And this defendant, by way of a cross-claim against said complainants, says:
    “That the mortgage foreclosed by said complainants mentioned in their bill of complaint was given as a collateral security to the lien of said complainants under the act above recited on the lien claim, and covered other lands.
    “That no money was at any time actually advanced and paid by said complainant under the terms of said mortgage.
    “That complainants, knowing of said liens, not making tlie holders parties to said foreclosure bill, and being the purchasers of the building and land upon which said liens are, cannot have any greater right or estate than they had under said mortgage at the time it was created.
    “That this defendant is entitled to participate in the proceeds of the sale'of the lands described in its lien claim with said complainants.
    “That the property described in said mortgage not covered by said lien claims realized at the foreclosure sale five thousand three hundred dollars.
    “That said amount should be appropriated, first, to the payment of the expenses of the foreclosure proceedings, amounting to four hundred and twenty-six dollars and forty-one cents, and the balance, four thousand eight hundred and seventy-three dollars and sixty cents, applied to the lien of said complainants on the building and lands described in said lien claim of this defendant for the whole amount of complainants’ contract price and extra work.
    “That the proceeds of the sale of the lands described in the lien claim of this defendant should be applied pro rata to the several lien claims against said buildings and land.

      “That said complainants, coming into a court of equity must do equity, and equity in this cause requires that the proceeds of the sale of the lands covered by the liens should be apportioned pro rata among the several claimants.
    ' “This defendant therefore prays that a decree may be made against said complainants that said mortgage so foreclosed by them, so far as the lands described in this defendant’s lien claim is concerned, was not a lien on .said lands prior to the lien of this defendant, and that the said complainants account for the money received from said foreclosure sale by them, and be decreed to pay to this defendant its proportionate share thereof.”
    The complainants’ motion was overruled.
    The complainants thereupon amended their bill of complaint b3r consent of parties (except the defendant Galbreath), stating the fact that they entered into a contract in writing with the defendant Galbreath for the erection and construction of the building at the southwest corner of Pacific and New York avenues in Atlantic City (the premises against which the lien claims were filed); that pursuant to the Mechanics’ Lien act they caused a copy of the contract and of the specifications accompanying the same to be filed in the office of the clerk of Atlantic county:
    The complainants further amended the prayer of their bill by striking out the portion which asked that the -claims of other persons than the complainants might be determined to be valid liens against the premises, leaving the bill of complaint to pray only that the complainants’ claim might be decreed to be paid out of the surplus money.
    To the amended bill of complaint all of-the defendants (except the owner of the equity of redemption, Mary S. Galbreath), have filed answers.
    That of Morse Williams Company contains the same averments as are above quoted from the company’s answer to the original bill, and in addition thereto admits that the complainants had a written contract with Mary S. Galbreath for the erection of the building mentioned in the bill of complaint, but denies that the complainants’ contract was for the whole completed building, and avers that the elevator furnished by the Morse Williams Company was a part of said building, necessary to complete it without which it could not he used as designed and intended.
    As part of its cross-bill the Morse Williams Company further avers that it furnished labor and materials in and about the erection and construction of said building; that the said building and lands are liable for the payment of the debt owing the Morse Williams Company for the same, and that the defendant is entitled to participate in the proceeds of the sale of said lands, &c., with the same prayer above quoted, asking that the complainants may account for the moneys received by them from the foreclosure sale of the premises liened upon, and receive only the proportion of the whole purchase-mon.ey which might be due said complainants as lien claimants and not as mortgagees, and that the said defendant may also have its proportionate share thereof, &c.
    The answers and cross-bills of all the other defendants (except Mary S. Galbreath, who files none), present in substance the same claims and defences.
    The complainants join issue upon the defendants’ answers. They answer their cross-bills. All of the replications are substantially to the same effect. The complainants deny that their mortgage was given them as collateral security to their lien. They admit the mortgage covered other land than the premises liened upon. They deny that no money was by them advanced under the terms of the mortgage, and aver that the full consideration named in the mortgage was actually advanced and paid to the mortgagor. They deny all knowledge of the existence of any of the defendants’ liens on the buildings and lands described in the mortgage at the time the foreclosure suit was instituted. They deny that the defendants performed labor or furnished material in the erection of the building, deny that the building and lands are liable for the defendants’ claims and also deny that the defendants are entitled to participate with the complainants in the proceeds of- the sale of the lands described in their lien claim. They admit that the property described in the mortgage not covered by the lien claims realized at the foreclosure sale $5,300. They deny that any part of that sum should be applied to the lien of the complainants for the whole amount of the complainants’ contract price and extra work. They deny that the proceeds of the sale of the lands described in the lien claims and derived from the foreclosure of the complainants’ mortgage, should be applied pro rala to the several lien claims against the building and lands.
    The cause was argued on these pleadings. While it was under consideration the vice-chancellor (in order to avoid a decision which might be controlled by the omission to bring the holder of the equity of redemption in as a party defendant to the amended bill of complaint) called the attention of tire parties to the fact that although a decree pro confesso< had been taken against Mary S. Galbreath (holder of the equity of redemption) on the original bill of complaint, no appearance had been entered for her to the amended bill of complaint, nor was she in any way brought into court as a defendant to- that bill, which asks for a different decree from that sought by the original bill of complaint.
    TJpon this an appointment of solicitor by the defendant Mary S. Galbreath with a consented decree pro confesso against her, •under the amended bill, was filed in the cause, and the matter is now considered with the proceedings thus changed.

      Mr. Eli II. ■ Chandler, for the complainants.

      Mr. Thomas E. French, for the defendant The Morse Williams Company.

      Mr. Robert II. Ingersoll, for the defendant E. S. Pettet.

      Mr. William I. Garrison, for the defendant Charles A. Dcvlan.

      Mr. Allen II. Gangewer, for the defendant Sharpless & Watts.

      Mr. Harry Wootton, for the defendant Thackara Company.

      Mr. Charles C. Babcock, for the defendant Mary S. Galbreath.
   Grey, Y. 0.

As the bill was originally filed, the complainant in this case sought to have the surplus money arising under the foreclosure sale decreed to be subject to and applicable for the payment of the lien claims, not only of the complainants, but also of such other lien claims as might be adjudged to be valid liens against the mortgaged premises, without disputing the validity of thé defendants’ lien claims, or seeking for the complainants any preferential consideration in the application of the surplus money. The original bill dealt with the surplus in the foreclosure suit as if it were the proceeds of a sale under mechanics’ lien, and it asked a pro rata distribution among all the lien claimants such as is contemplated by section 29 of the Mechanics’' Lien act. P. L. 1898 p. 550.

When the answer of the defendants, Morse AVilliams Company, came in, with a cross-bill appended, praying that the complainants, Stiles & McClay, might account for the moneys they received from their foreclosure sale, the complainants changed their position by amending their bill of complaint as above recited.

By their amendment to their bill the complainants set up their filed contract for the construction of the building, and assert for themselves the position and preference of such a-contractor under the Mechanics’ Lien act. P. L. 1898 p. 538 § 2. They further insist by their amendment that none of the lien-claimant defendants in this_ cause -are entitled to participate or share in the proceeds of the foreclosure sale, the complainants contending that they only should be decreed to be paid the amount claimed by them to be due on their lien claim.

The fund which the complainants, Stiles & McClay, seek to affect by this suit is the surplus money remaining after satisfying-a decree made in this court in a foreclosure suit wherein they (Stiles & McClay) were complainants, and Mary S. Galbreath, the mortgagor, and other parties, who were mortgagees, were made defendants. None of the lien claimants who are parties defendant to the suit at bar were made defendants in that foreclosure suit, for the reason that on December 13th, 1901, when the complainants, Stiles & McClay, filed their bill to foreclose tlieir mortgage none of the defendants had yet filed their lien claims.

Section 78 of the Chancery act (1 Gen. Stat. p. 387) provides that in any foreclosure suit, persons claiming liens upon the mortgaged premises, which by any provision of law could be recorded, but which are not recorded when the bill to foreclose-was filed, shall be bound by tire proceedings in the foreclosure suit, &c.

The complainants contend that the operation of section 7S (now section 58 of the Chancery act of 1902) is not only to- cut off the unfiled liens as charges on the mortgaged lands, but also absolutely to destroy their claims, so that they cannot be asserted against the surplus purchase-money arising from tire foreclosure sale. Under this construction of that statute the complainants insist that they alone are entitled to the whole of the surplus money of the foreclosure sale and the defendant lien claimants to none of it.

The terms of that statute apply to the situation existent when the bill to foreclose was filed. Materialmen, who, by the statute, then had inchoate liens for material furnished to the building which they had not advanced to the stage of filed claims, are, under the terms of that statute, so bound by the foreclosure decree that they cannot make any further claim against the mortgaged property.

But the claims of the defendants in the present suit are not asserted against the mortgaged premises. The act, by both its terms and its intention, served only to relieve the mortgaged premises from the operation of unrecorded or unfiled liens. It does not deprive the lien claimants of their equitable rights in the proceeds of the sale.

This construction is entirely equitable for the reason that the lien claimants are not parties to the foreclosure suit. For- the convenience of the mortgagee the mortgaged premises are by the statute discharged from their liens, but they have never, as between them and the mortgagee, had their day in court. Whatever disputes might exist or arise between the mortgagee and the lien claimants touching their respective rights, they have never been presented or passed upon by any tribunal. To construe section fS (now section 58 of the Chancery act of 1902) to mean not only the discharge of tire mortgaged land from liens existing but unrecorded when the foreclosure suit is begun, but also as finally destroying the claims of all such lienholders without notice and without a hearing, would, in my view, be to deprive them of their property in their liens without “due process of law.”

The words of the statute also indicate that it is not intended to destroy the equities of the holders of unrecorded lien claims, for it binds them only “so far as the property is concerned,” and while it enables the lien claimants to apply to be admitted as defendants in the foreclosure, it nowhere declares that if they do not so apply their rights in the surplus money shall be forfeited.

This effect of the statute is recognized by our courts. In Raymond v. Post, 25 N. J. Eq. (10 C. E. Gr.) 452, the statute is discussed, and its purpose is plainly indicated to be to enable a proceeding relating to real property to be prosecuted to judgment in a manner to bind, “so far as the property is concerned” (p. 452), all persons whose liens are existent when the bill of complaint is filed, but which are not then registered or recorded.

The statute is one of convenience only, and does not determine ultimate rights. It relieves the complainants from any obligation to make parties of persons holding liens against the mortgaged property not of record, and binds those parties from thereafter asserting claims against that property, but it does not destroy their equitable interest in the proceeds of the sale, nor deprive them of the right thereafter to present them to any competent court for determination.

The defendants, some of them, insist that as the complainants, Stiles & Me Clay, knew when they filed their bill to foreclose, of the defendants’ outstanding but unfiled lien claims, they were bound to have made those lien claimants parties to the foreclosure suit.

I thipk the terms of the statute apply to make the foreclosure decree binding “so far as the property is concerned,” irrespective of the knowledge of the complainants of the existence of the outstanding lien claims, and that all the defendants are bound by the foreclosure suit, but only to the extent indicated by the construction given in Raymond v. Post, only “so far as the property is concerned.”

No other construction can be given to that statute. The foreclosure srtit cannot be held to have adjudicated adversely to the lien claimants their present contention against Stiles & McClay, for in that foreclosure suit no pleading even suggests that there were any lien claims against any part of the mortgaged premises, or that there could be any such charges on it. The complainants in that ■ foreclosure suit did not make the lien claimants defendants to it, nor bring them into court in any way, nor ask any relief against them, nor does the decree in that suit pass on their equities. It is therefore impossible to ascribe to that decree the effect of res adjudícala. The utmost operation that can be given to the statute is to hold that the foreclosure sale removed the unrecorded charges as liens on the land “so far as the property was concerned,” and left them to assert their rights against the proceeds of the sale.

The surplus money affected by this suit arises from the foreclosure sale. The proceedings in that cause are here produced in evidence. They show that the mortgage foreclosed by the complainants, Stiles & McClay, covered two lots of land in Atlantic City, one situate on Pennsylvania avenue, which was sold ijor $5,300 to Caleb James Coatsworth; the other, located at the southwest corner of New York and Pacific avenues (which was sold for $39,000 to Stiles & McClay, complainants in the foreclosure suit), on which stands the Galbreath building.

The first point to be considered, it seems to me, is from which lot did the surplus money here in dispute arise? The admitted facts show that of the two lots included in the mortgage foreclosed the lot situate at the southwest corner of New York and Pacific avenues was the one against which the lien claims were filed, and that the building known as the “Galbreath Apartment House,” thereon erected, was the building, the major part of which was constructed by Stiles & McClay, under their filed contract with Mrs. Galbreath, the owner, and was that building in which were constructed the elevators, plumbing, electric lights and gas fixtures, wall' decorations, &c., which are the subject-matter of the other lien claims.

The defendants in this suit, lien claimants, had no interest in the other lot mortgaged, which fronted on Pennsylvania avenue.

The complainants, Stiles & McClay, holders of the mortgage foreclosed, were therefore in the position of a creditor who has a lien upon two funds of the debtor, upon one only of which other creditors of the same debtor have liens. The rule in such a case is that the assets should be marshaled, and the creditor who has a lien upon two funds shall be primarily related in the making of his money to that fund in which the other creditors have no lien, provided that corxrse is not injurious to ainy other party whose equity is superior to the claimants upon the single fund. Reilly v. Mayer, 12 N. J. Eq. (1 Beas.) 55; Mechanics’ Building and Loan Association v. Conover, 14 N. J. Eq. (1 McCart.) 225.

The surplus in this case must therefore be held to have arisen wholly from the proceeds of the sale of that lot in the mortgage, which was situate at the corner of New York and Pacific avenues, against which the lien claims were filed.

The next question raised is, the complainants claim that they are entitled to the whole surplus money because they axe the only lien creditors of Mrs. Galbreath, whose claim has been established by final judgment, on which execution might issue.

This claim is untrue in point of fact. All of the defendant lien claimants have filed their lien claims, and all except two have entered final judgments thereon. One of them, the Albert-son & Young Company, entered their judgment more than a month before the complainants entered theirs.

It is not necessary, however, that a final judgment be entered on a mechanics’ lien claim in order to make a debt a lien upon the building and lands, &c. The very first section of that act (P. L. 1898 p. 538) declares'that the debt contracted and owing to any person for labor performed or materials furnished for the erection and construction of any building “shall be a lien on such building and on the land whereon.it stands.”

Every debt having the statutory characteristics becomes a lien instantly that it becomes a debt by the express words of the act. The filing of the claim, the suit and judgment thereon, are proceedings to apply the property upon which the debt has already become a lien, to the payment of that debt and of others which have like statutory characteristics. If, pending these proceedings and before final judgment, there be, by foreclosure of a previous mortgage or the like, a sale of the property upon which these debts have become a lien, the lienholders will thereby be relegated to the purchase-money for their remedy, and will have to show their right upon an3r application for it. The procedure upon such antecedent charge, having .already converted the property liened upon into money, I can see no reason for thereafter prosecuting the lien claims to judgment in the law court if they are not disputed as between tire lien claimant and the contractor or owner. The equities of all the parties as claimants upon the fund can be heard and adjusted upon the application for the purchase-money.

Nothing appears or is shown which indicates that the defendants’ claims are disputed as valid lien claims as between any other persons than the several lien claimants themselves and the complainants, Stiles & McClay. All the elements of those disputes have been litigated, presented in evidence and in argument in this suit. When tire questions here mooted are here determined, nothing will remain which affects the rights of the parties. The prosecution of the lien suits to final judgment in the law court would therefore result simply in useless delay and expense.

This court will entertain them as statutory liens, the holders whereof claim to be entitled to share in the surplus monejr, and will pass upon and adjudicate their rights in disposing of that fund.

The complainants, Stiles & McClay, also contend that the surplus fund did not arise from any sale under the Mechanics’ Lien law, and they insist that it is only when proceeds of a sale are so raised that'the liens are concurrent (citing section 29 of the Mechanics’ Lien act).

This arguinent is another contention which would make the words of a statute defeat its purpose and effect. The first section of the act prescribes the circumstances under which the debt shall become a lien. The intent and object, as expressed in all its sections, show that all holders of such debts shall share ratably in the values charged with the statutory liens. If the fund, proceeds of land, &c., subject to liens, comes before this court for ascertainment of the rights of claimants and distribution, this court will recognize the nature of the lien as given by the statute and administer the fund accordingly.

FTothing in the statute declares that the concurrency of the lien claims and the ratable distribution of the proceeds shall occur only when there is a sale of the building and lands, &e., by proceedings under the lien law, and that in all other cases of sale of those lands the liens shall not be concurrent, and the distribution of proceeds shall not be ratably among the lien claims.

It remains to inquire whether the defendants had, as lien claimants, the statutory lien given by tire Mechanics’ Lien law against the building and lands, &c., from which their liens are now discharged, the sale of which has produced the purchase-money in dispute. The complainants insist that they are entitled to the whole surplus money under their lien judgment because of their filed contract for the construction of the Galbreath building on the mortgaged land. The proof shows, substantially without dispute, that neither the contract of Stiles & McClay nor the specifications thereunder included those articles of the equipment and finishing of the building which were supplied by the lien claimants who are defendants in this suit.

Mr. Adams, -the architect, who drew up the complainants’ specifications, plans and agreements, and superintended or inspected the construction of the building, expressly declares (and he is not contradicted) that there were other contracts for parts of the building not provided for in the specifications of Stiles & McClay. lie specifically mentions a hot-water heating plant furnished by the defendant Devlan; the elevator by Morse Williams Company; electric lights and electric bells by the Albert-son & Young Company; tile work and mantels by Sharpless & Watts; wall paper was also not included in the Stiles & McClay contract, and this was furnished by the defendant Pettet. There is no dispute whatever in the testimony that the work done and materials furnished by the defendants above named were not included within the work agreed to be done or materials agreed to be furnished by the complainants, Stiles & McClay, in their contract and specifications.

The declaration in the second section of the Mechanics’ Lien act (P. L. 1898 p. 538), making the building and lands liable to lien by the contractor alone, when he has filed his written contract, is limited to liens which are for work done or materials furnished in pursuance of such filed contract. Stiles & McClay, the complainants, had the exclusive right (having filed their contract) to maintain and enforce their lien on all work done and materials furnished pursuant to that contract. Every other person having a debt contracted and owing to him for labor performed or materials furnished outside of the matter included within the contract of Stiles & McClay is also entitled to file his lien under the terms of section 1 of the statute. The debts arising because of all these separate and independent contributions to the erection of the building become concurrent liens against the whole structure, entitled to', the benefits secured to them under the Mechanics’ Lien act, and to the equities which attend upon the enforcement of any mode of sale of the premises charged with those liens. The equities of the parties remain the same, whether the property liened upon Be sold by the enforcement of the lien claims in the mode prescribed by the statute, or by the foreclosure of a mortgage, as in the present case, which may discharge the liens so far as the property is concerned, and relegate them for their remedy to the purchase-money arising from such a sale.

The issues joined between the complainants on their bill as amended and the answers of the defendant lien claimants thereto must be determined against the complainants’ contention that they alone are entitled to all of the surplus money. The liens of the complainants and also of the defendants, lien claimants, are concurrent charges upon the surplus money entitled to be paid pro rata.

The remaining question arises upon the cross-bills filed by the defendants against the complainants, Stiles & McClay. By their ■cross-bills the defendants insist that the mortgage given by Mrs. G-albreath to Stiles & McClay upon the building under construction, and the lot whereon it stands, was in truth given as collateral to secure the mechanics’ lien debt which Stiles & McClay had acquired against that property for work done and materials furnished under their building contract. They allege that no money was advanced or paid at any time by Stiles & McClay on. that mortgage; that under the Mechanics’ Lien statute (P. L. 1898 p. 550 § 29) all such claims are concurrent liens upon the building and upon the land whereon the same is erected; that so far as the complainants’ mortgage was charged upon the building and lands which was subject to the concurrent liens of all the lien claimants, and has raised money for the complainants from the sale of the property in which all were entitled to share, the complainants must account to and with the other lien claimants for those proceeds, and pay them their ratable shares given them by the Mechanics’ Lien, act.

The complainants, in answer to these cross-bills, deny that their mortgage was taken to secure, as collateral security, their lien claims; they deny that no money was advanced by them, and explicitly aver that the full consideration-money named in the mortgage was actually advanced and paid to the mortgagor; they deny all knowledge of the existence of the defendants’ liens at the time the foreclosure suit was instituted; they deny that the defendants performed labor or furnished materials in the erection of the building; deny that the building and lands are liable for the defendants’ claims, and also deny, that the proceeds of the sale of land derived from the foreclosure of complainants’ mortgage should be applied fro rata to the satisfaction of the several lien claims against the building and lands.

The testimony submitted at the hearing of this cause shows, without contradiction, that no money whatever was advanced or paid at any time by Stiles & McClay upon the mortgage which was given to them by Mrs. Galbreath, which they subsequently foreclosed.

The evidence discloses the transaction to have arisen and to have taken place as follows: Mrs. Galbreath was not able to make the payments on the Stiles & McClay contract at the time when, according to the contract, they came to be due. Mr. McClay obtained the mortgage from her as collateral to secure the payment of the price ior the labor or material furnished by them under their filed contract.

Notwithstanding the complainants, in their answers to the defendants’ cross-bills, assert that the full consideration named in their mortgage was actually advanced and paid to the, mortgagor, they ofiered no testimony in denial or explanation of the evidence of Mrs. Galbreath and her architect, Mr. Adams, showing the mortgage to have been given as a collateral security, nor did they even cross-examine those witnesses on that point.

Section 15 of the Mechanics’ Lien act applies to the taking of such mortgages, and declares that they shall have priority over the lien claims to the extent of the money actually advanced and paid by the mortgagee and applied to- the erection of the building, provided the mortgage be recorded before the filing of such claim.

The mortgage taken by Stiles & McClay from Mrs. Galbreath and foreclosed by them was, it is true, recorded before the filing of the defendants’ lien claim, but the uncontradicted proofs show that no money whatever was either advanced or paid by them on account of the mortgage, and that no such money was applied to tire erection of Mrs. Galbreath’s building. That mortgage was in truth given as a collateral to secure to Stiles & McClay the debt owing to them under their contract to build the Galbreath apartment house. On this building, and the land whereon it is erected, they were entitled to have a'mechanics’ lien which should be concurrent with those filed by the defendant lien claimants, all sharing ratably in the values which might proceed from the application of the building and lands to the payment of all the debts incurred for work and material supplied to the building.

By taking their mortgage on the Galbreath house to secure solely their own debt, Stiles & McClay sought to withdraw that property from its liability to be applied to' pay ratably all the concurrent liens held by themselves and other lienholders, and to appropriate it exclusively to pay their own lien.

When two or more creditors have concurrent liens upon a fund which stands to pay all of their claims ratably, no one of those creditors can, by any procedure, equitably take the whole fund and apply it solely to the satisfaction of his own claim. In such a case the common fund which the one creditor has taken, or its value, must be accounted for to those who1 are ratably with him entitled to have it applied to the payment of their debts. Section 15 of the Mechanics’ Lien act is intended to cut off just such preferential applications of the lienable property to the payment of one lien and tire exclusion of others. The only mortgage preference permitted is to the extent that money is actually advanced and paid by the mortgagee and applied to the erection of the new building, &c. (P. L. 1898 p. 543, and p. 550 § 28; Young v. Haight, 69 N. J. Law (40 Vr.) 455.

In the present case the complainants have prosecuted their wrongfully taken mortgage to a foreclosure sale, have bought in the building and lands under it, have credited the amount of the purchase-money on account of the contract price due them for their work and material in erecting the building, and now ask that the whole of the surplus money be given exclusively to them to satisfy the residue of their contract price.

The mortgage taken by Stiles & McClay was good as between the mortgagor, Mrs. Galbreath, and the complainants, Stiles & McClay, as a security for the payment of the debt, the contract price which Mrs. Galbreath, the mortgagor, owed them for building the Galbreath apartment house.

The complainants have themselves bought in the Galbreath apartment house at their own foreclosure sale, and have held title thereto during this litigation. Their ownership may in the meanwhile have become charged with their 'debts, or by some disposition of the title. It will be much more to the advantage of all the parties interested that the complainants shall be directed to account for the foreclosure purchase-money arising from the sale of the Galbreath apartment house than that their mortgage should be declared subject to the defendants’ liens and the building and lands be directed to be sold again under the foreclosure lien judgments.

The cross-bills claim that the defendants are entitled to participate with the complainants not only in the surplus moneys, but also in the proceeds of the sale, and pray that the complainants may account for the moneys received by them from said foreclosure sale of the Galbreath apartment house, &c., and be decreed to pay -to the defendants their proportionate share thereof.

The complainants by invoking the aid of this court to administer equitable relief have put themselves in a position to be required to do what is equitable to- the defendants regarding the transaction under consideration.

This will oblige the complainants to account for the whole proceeds of the foreclosure sale of the building and lands which 'were liable to the concurrent liens of the complainants and the defendants under the Mechanics Lien law, which the complainants have diverted from their proper application.

The result is that the proceeds of the foreclosure sale of that lot which was not subject to the defendants’ liens should be first applied to the payment of the debt which Mrs. Galbreath owed Stiles & McClay; that the residue arising from the sale of the Galbreath apartment house, &c., against which the complainants and defendants had their concurrent mechanics’ liens, and all of the purchase-money received by or credited to the complainants from the proceeds of the foreclosure of the mortgage on the latter-named property, should be applied to pay and satisfy those liens ratably, according to the equity of the Mechanics’ Lien statute.

A decree will be advised, in accordance with the views above expressed. If the parties can agree upon a decree definitely fixing the amounts to be accounted for and the ratable proportions of their distribution, I will advise it. If not, the matter may be referred to a master for ascertainment, statement of account and report.


author: Grey, Y. C.

text:
    Agnes H. Lippincott v. Samuel C. Smith et al.
    [Decided March 15th, 1905.]
    1. The lands of a deceased debtor descend to his heirs-at-law bound for the payment of the ancestor’s debts. The heir receives by descent the estate whereof the ancestor dies seized, subject to all its liens and charges.
    2. The creditor of the heir cannot, by entry of judgment and levy against the heir, acquire a right to payment from the ancestor’s lands in priority to the debts owing by the ancestor, subject to which the defendant heir took his estate.
    3. The judgment creditor of the heir can, under his judgment, levy an execution on all that belonged to his debtor, but he can take nothing more. He simply represents the debtor,and takes the property as the debtor held it.
    4. Glement v. Kmghn, 15 N. J. Bq. (8 MeOart.) 1/7, distinguished.
    In partition. On exceptions to master’s report.
    In this case lands situate in Camden county have been sold and the proceeds of sale distributed by a decree dated the 22d day of December, 1904, except the portion thereof arising from the sale of the share of the defendant Joseph A. Burroughs, which portion by the same decree has been directed to be paid into this court to abide the chancellor’s order as to its further disposition.
    By the master’s report and the testimony thereto' annexed, it appears that Mary Anna Burroughs was seized in fee of an undivided one-fifth part of the premises sold; that on the 2d day of March, 1897, while she was so seized, Rachel Burroughs entered judgment in the supreme court for $2,078.30 against Mary Anna Burroughs, which then became a lien upon Mary Anna’s share.
    Two executions were delivered to the sheriff of the county of Camden, in the lifetime of the defendant Mary Anna Burroughs, but neither of them appears to have been levied upon, the undivided one-fifth part of Mary Anna in the premises sold in this partition suit.
    Mary Anna Burroughs died intestate on December 15th, 1897, and the undivided fifth share of which she was seized in fee descended to her only child and sole heir-at-law, Joseph A. Burroughs.
    Daniel Y. Summerill, Jr., on March 1st, 1904, entered a judgment in the supreme court against Joseph A. Burroughs, apparently for his individual debt for $882, damages, and $30 costs. ■On March 4th, 1904-, an execution issued on this judgment was delivered to the sheriff of Camden county and levied on the estate of the defendant Joseph A. Burroughs in the undivided one-fifth of the premises sold.
    The master has reported that the share of Joseph A. Burroughs is subject to the lien of both the above-mentioned judgments, but that the lien of the Summerill judgment is first in order of priority.
    Exceptions have been filed by Rachel Burroughs to the master’s report in this respect, the exceptant insisting that her judgment (even if the executions issued upon it were not levied on the particular undivided one-fifth) became by mere entry and the delivery of executions to the sheriff a lien upon all the estate of the defendant Mary Anna Burroughs; that the estate which descended to her heir-at-law, Joseph A. Burroughs, came to him charged with the lien of Rachel’s judgment, and that the only interest upon which Summerill’s judgment could become a lien or be levied was that which descended to Joseph A. Burroughs, which interest was subject to the lien of Rachel’s judgment as above stated.
    • On these excejotions the matter was heard.

      ■Mr. Ephraim Tomlinson and Mr. Peter V. Yoorhees, for the exceptant, Rachel Burroughs.

      Mr. Samuel PL. Richards, for the respondent Daniel Y. Summerill, Jr.
   Grey, Y. C.

It appears in proof that Mary A. Burroughs, in 1873, while seized of a fee-simple estate in her share of the lands sold in this suit, conveyed to her mother, Ann W. Smith, an estate therein during her (Ann’s) life. The Rachel Burroughs judgment against Mary A. Burroughs was entered in 1897, and then became a lien upon the fee-simple estate which remained in the defendant in that judgment, Mary A. Burroughs, but subject to the life estate of Ann W. Smith, previously conveyed to her by Mary A. Burroughs. This life estate terminated upon Ann W. Smith’s death in 1902.

There can, I think, be no question that Rachel Burroughs’ judgment became a lien upon the fee-simple estate of Mary A. Burroughs, the defendant in that judgment, in any lands in this state, by its mere entry in the minutes of the supreme court. That is the declaration of section 2 of the act concerning judgments. Revision, approved March 27th, 1874, to be found in 2 Gen. Stat. p. 1841.

After -Rachel’s judgment had been actually entered in the minutes, and thus became a binding lien upon the estate of the defendant Mary Anna Burroughs, the latter had no power by any act of her own, save by payment of that judgment) to discharge its lien. She could not discharge it by either her deed or her will. This situation continued during the whole life of the defendant Mary Anna Burroughs. She did not pay Rachel’s judgment in her lifetime. Upon Mary Anna’s death intestate, her lands descended to her heir-at-law charged with the lien of Rachel’s judgment. The heir took as a volunteer simply that of which the ancestor died seized, no' more no less, subject to all its liens and charges. As his ancestor Mary Anna Burroughs could not in her lifetime divest the lien of Rachel’s judgment (save by payment), neither could her heir-at-law, Joseph A. Burroughs, discharge it in any other way, for all that descended to him, all that he acquired by the descent, was his ancestor’s estate charged with the lien of Rachel’s judgment.

This was the situation which existed in 1904 when Summerill entered his judgment against the heir, Joseph A. Burroughs. As a creditor of Joseph he had the right, by his judgment, to acquire a binding lien upon the estate which Joseph received from his ancestor, Mary A. Burroughs, namely, a fee-simple in the lands in question, charged with the lien of Rachel’s judgment. A judgment creditor may take and apply that estate in his defendant debtor’s property which his defendant debtor owns, subject to all liens and charges existent upon it, but he can take no greater or freer estate or interest in that property than his defendant debtor owns. That is the definition of the judgment creditor’s right, given by our court of errors and appeals in the ease of Herbert v. Mechanics’ Building and Loan Association, 17 N. J. Eq. (2 C. E. Gr.) 500, when it declared that the creditor “can, under his judgment, levy on execution all that belonged to his debtor, but he can take nothing more. He simply represents the debtor, and he taires the property as the debtor held it.”

There is therefore no conflict of lien between these two judgments. That of Rachel became, on March 24th, 1897, 'a lien upon the fee-simple estate which Mary Anna Burroughs then held in the undivided one-fiftli part of the premises in question.

When Mary Anna died on December 15th, 1897, intestate, her estate, subject to Rachel’s judgment, descended to her heir-at-law, Joseph A. Burroughs. Mr. Summerill’s judgment, entered March 1st, 1904, against Joseph, is a lien only upon what Joseph acquired by the descent, i. e., an estate in fee in the said undivided one-fifth part, subject to the lien of Rachel’s judgment.

Counsel for Mr. Summerill insists that under the provisions of section 9 of the act concerning the sale of lands, &c., (3 Gen. Stat. p. 2981), and its construction in this court in the case of Clement v. Kaighn, 15 N. J. Eq. (2 McCart.) 47, by Chancellor Green, it must be held that the plaintiff in a junior judgment, by suing out and actually levying the first execution upon the land, acquires a priority of lien over that of the senior judgment under which no execution has been issued, or, if issued, which has not been executed by levying it on the land. This construction given in the case cited, though one of first instance in fespect to the extent of its application in the case decided by Chancellor Green, lias ever since been accepted as the established law of the state.

The essence of that decision is its interpretation of section 13 of Rev. L. p. 433; which is section 9 (Nix. Dig. p. 724), and now to be found in 3 Gen. Stat. p. 2981, under the title “Sales of Land.” Chancellor Green there held that section to mean that where a judgment- was entered against K., and no execution was issued and levied under it, and subsequently another judgment was entered against the same person, under which an execution was recorded and issued and levied on the lands of K, the purchaser buying under the junior judgment and levy acquired a title prior to the lien of the senior judgment, and that this priority operated to postpone the senior judgment to all liens intermediately imposed on the lands between the senior and junior judgments.

The chancellor placed his decision upon the recital in the preamble of section 9,_ to the effect that the design of the statute is to give the plaintiff in the junior judgment upon which execution is first issued out “the proper fruits and effects thereof.”

In that decision it will be noticed that all the judgments were entered against the same person. They bound the same estate in the lands, and the point to be determined was the effect of the statute upon their priority.

In the present case the judgments are entered against different persons and bind different estates. The judgment of Eachel Burroughs was against Mary A. Burroughs and bound the estate which Mary A. Burroughs had in the lairds at the time it was entered in 1897. The judgment of Daniel Y. Summerill, Jr., was against Joseph A. Burroughs and bound only the estate which Joseph had in the land in 1904. What he had was what descended to him from his mother, Mary A. Burroughs, subject to all liens and charges against her estate.

The “proper fruits and effects” to which Mr. Summerill became entitled by his judgment was to have the estate in the lands whereof his debtor, Joseph A. Burroughs, was seized applied to the payment of his judgment. When this is done Mr. Summerill will have had the full “fruits and effects” to which his judgment and levy against Joseph A. Burroughs entitle him.

That the estate in lands of a deceased debtor is charged with a lien to each of his creditors for the payment of his debts, without their having any judgments, was expressly held by the court of errors and appeals, in Haston v. Castner, 31 N. J. Eq. (4 Stew.) 699, interpreting the effect of the statute (Rev. p. 766 § 70, now P. L. 1898 p. 743 § 81). The court declared that the debt of the ancestor continued to be a lien on his lands after descent and until a bona fide sale thereof had been made by the heir.

In view of this declaration of our highest court that the estate in lands of a deceased debtor is bound for his debts to his creditor without a judgment, it would be absurd indeed to hold that because the creditor of an ancestor had entered a judgment against him in his lifetime, but did not levjr, the creditor should lose his lien for the benefit of the levying- judgment creditors of the heir-at-law.

The trend of the whole policy of all statutory enactments on the subject is to compel the application of the property of decedents to the payment of their debts. The heir takes what is left after the debts of the ancestor have been paid out of his estate. As this is all the heir receives from the ancestor, it is all that the heir’s creditors can seize.

The master erred in holding that the Summerill judgment execution and levy had priority over the Rachel Burroughs judgment, and the exception taken to his report should be sustained.

A decree to that effect will be advised.