author: Magie, Chawoellob.

text:
    John Dallett et al. v. Staten Island Clay Company et al.
    [Filed January 22d, 1901.]
    1. If moneys in the hands of a trustee are paid out by it upon the order of the court of chancery, made on the consent of the persons interested in the trust, the court will not, upon the application of those persons, compel the trustee to accept the moneys from those to whose hands they have come, or to assume any duty in respect thereto, without its consent.

      2. Buildings on lands of a corporation, mortgaged to a trustee for the security of bondholders, were burned while the company was in the hands of receivers, who were continuing its business. The trustee received moneys from insurance companies for loss, the policies being payable to the trustee. Afterwards the court, with the consent of the complainants, who were bondholders, ordered the trustee to pay the insurance moneys so received to the receivers. They afterwards conveyed the assets of the insolvent corporation, with the sanction of this court, to a new corporation, and paid to the latter the said insurance moneys. The new cox-poration expended part of such moneys in rebuilding the buildings destroyed by fire. They failed to complete the buildings because the banks in which they had deposited those moneys in special accounts had appropriated them to the company’s indebtedness. In the absence of allegations of any express contract made by the new company with the receivers in respect to the insurance moneys, or of any facts from which an implied contract would be inferred—Held, (1) that a ■decree that the new company should account for the unexpended moneys and pay them over to the original trustee would not be warranted; (2) that a decree that the new company should specifically apply those moneys to the rebuilding woxxld be equally unwarranted.
    On demurrer.
    The bill demurred to was filed by holders of twenty-five bonds of the Staten Island Terra Cotta Lumber Company, which bonds are part of an issue of three hundred and fifty bonds of $1,000 each, issued by the said company and secured by a first mortgage on real and personal property of the said company, made by it to the Fidelity Title and Deposit Company.
    The bill charges that the terra cotta company was incorporated under the laws of this state and purchased real estate and a manufacturing plant in Middlesex county, and engaged in manufacture there; that about March 30th, 1895, John V. Bacot and J.. Edward Addicks were appointed by this court receivers of the said company and carried- on its business under the direction of this court until October 9th, 1897; that about July 2d, 1897, said Addicks submitted to this court an offer to buy all the property and assets of the company in the hands •of the receivers, and on July 3d, 1897, the court ordered the acceptance of the offer and the conveyance by the receivers of the assets of the terra cotta company to him; that abopt August 19th, 1897, part of the factory property was destroyed by fire; that policies of insurance were in force covering the said loss by fire, and payable to the Fidelity Title and Deposit Company as trustee; that there was paid on December —, 1897, to the said trustee, for the loss by the said fire, $58,000; that the said Addicks caused the Staten Island Clay Company to be incorporated under the laws of this state on September 9th, 1897, for the purpose of taking over the assets of the terra cotta company and conducting' the business before carried on by the receivers; that on September 9th, 1897, he assigned to the said clay company all his rights under his offer to purchase and this court’s order of acceptance thereof ;■ that pending the arrangement to transfer the property and assets'of the terra cotta company to the clay company, Bacot, one of the receivers •of the terra cotta company, Record, counsel for the receivers, and- one John A. Miller, made representations to the complainants to the effect that the sum of $58,000 paid by the insurers to the Fidelity Title and Deposit Company as trustee would be used, under the terms of the'mortgage, in rebuilding the portion of the plant destroyed by fire and that the money, if expended by the clay company under their direction, would be more economically expended than would be done by the trustee under the mortgage, jvhich induced complainants to agree with the receivers and the clay company in securing the payment to the receivers, and by .them to the clay company, of the insurance moneys to be expended in such rebuilding; that •on September 23d, 1897, said receivers petitioned this court for an order directing the Fidelity Title and Deposit Company as trustee to pay them the insurance moneys in the said company’s possession, and notice of that application having been given to the complainants, they, relying on the representations •of Bacot, Record and Miller, .consented in writing, by consents produced in open court, to an order directing such payment, which order was thereupon made, and in pursuance thereof, on December —, 1897, said insurance moneys were paid by the 'Fidelity Title and Deposit Company tó the said Bacot and Addicks, receivers, and by them immediately paid to the •clay company; that at the time said money was received by the ■clay company, Bacot, Record and .Miller were three of the ■directors of that company; that .the said insurance moneys were deposited by the clay company in different banks in separate accounts and not mingled with its other funds on deposit; that the said company applied some of the moneys so deposited, to the reconstruction of the buildings destroyed by fire, and continued such reconstruction until it had expended some $12,000 out of the same, and thereafter, for reasons set forth in the bill and not necessary to detail, the bardes applied the said insurance moneys remaining on deposit with them to the payment of promissory notes of the clay company held by them,, and refused to further honor the drafts of the clay company thereon; and that the said clay company has failed to complete the said buildings, which remain unfinished.
    The prayer of the bill is that the clay company and the Fidelity Title and Deposit Company, trustee, may answer; that the clay company may be ordered-and directed to account for the said insurance moneys given into its hands, and may be decreed to pay all such moneys, unexpended’in the rebuilding of the burned portion of the plant, to the Fidelity Title and Deposit Company, and there is a prayer for general relief.

      Mr. Sherrerd Depue, for the demurrer.

      Mr. Albert G. Wall, contra.

   Magie, Chawoellob.

The /first question presented by this demurrer is whether,, upon the facts charged in the bill, the special relief demanded by the prayer be granted.

It is first to be observed that the bill discloses no claim for such relief under the Fidelity Title and'Deposit Company, the original trustee, holding the mortgage securing complainants’ bonds.

It is assumed by the argument that the trustee, upon the-receipt of the insurance moneys in question, was bound in duty to the bondholders to expend them in rebuilding the portion of the plant which had been destroyed by fire. I find no express-statement in the bill, that by the terms of the mortgage a duty so to do was east upon the trustee. In the absence of such, terms in the mortgage it mny be questionable whether it can be asserted that the duty of rebuilding necessarily followed the receipt of the insurance money.

But the bill has not been framed in a manner to assert any original right or to enforce any original duty, whatever it might have been, of the trustee, under the mortgage. It is not asserted that the trustee has been requested to take any steps in the performance of such duty, nor have other bondholders been called into the case. They may not consent to the assertion of duty made by the complainants, and they are equally interested in the disposition of the fund in question.

Moreover the bill discloses that the right of the trustee to these funds has ceased by the consent of the complainants. There is no' charge that the court lacked jurisdiction to make the order directing the trustee to pay over the funds to the receivers, and the bill discloses an express assent not only to the order which directed such payment, but to the subsequent actual payment of the fund to the receivers. It is obvious that when the trustee made such a payment, with the express consent of the complainants, it instantly became discharged of any duty with respect to the funds.

If, therefore, the'relief specially prayed for may be granted, it must be because the facts disclose some relation between complainants as holders of their bonds and the clay company, which relation would entitle them to require the clay company to account for the insurance moneys which were paid to them by the receivers, and to pay over such part of them as have not been expended in rebuilding to the original trustees. In this respect, it is to be noticed that there is no allegation that the trustee is ready or willing to assume any duty in respect to the funds in question. In the absence of its consent to accept those funds and become charged with some duty in respect thereto, I know of no power in this court to compel the trustee to do so.

I am unable to discover in the charges of the bill the existence of any relation between the complainants and the clay company which will justify the special relief applied for as to it. No such relation arose by reason of the complainants consent to the payment of the insurance moneys to the receivers, being induced by the representations or promises in respect to its future use, made by Bacot, Record or Miller, unless it is made to appear that in making such representations or promises, they were acting- for the company, or by its authority. The charge that those persons afterward appeared as three of the directors of the company would not support an inference that their action was that of the company, or authorized or permitted by it. Nor did any obligation on the part of the clay company arise out of the mere receipt of the insurance money from the hands of the receivers. By the statements of the bill, the clay company became entitled to take the assets of the terra cotta company from the receivers, under the offer of Addicbs and the order of the court. The insurance moneys, when paid by the receivers under a like order of this court, were apparently discharged of the trust. The receivers, in paying those moneys to the clay company, might perhaps have required the company to obligate itself to expend them in rebuilding. But the bill discloses no obligation then entered into by the company. If any such obligation could be inferred, it is impossible to discover any ground for ■compelling that company to account for and pay over to the other defendant the moneys unexpended by it in rebuilding.

Under the prayer for general relief complainants ask for a decree for specific performance of an obligation on the part of the clay company to appropriate the insurance moneys to the rebuilding of the burned portion of the plant. If such relief can be deemed germane and appropriate under the allegations of the bill, I do not think it can be granted, for the reason that upon those allegations no obligation of that sort is disclosed or to be inferred.

The result is that the demurrer must be sustained and the bill dismissed.


source: Caselaw Access Project

author: Pitney, Y. C.

license: Public Domain

text:
    Joseph G. Bryan, Jane Bryan and Mary M. Gulick v. John Bryan et ux., Adam W. Crevelling et al.
    [Decided January 3d, 1896.
    Filed June 4th, 1901.]
    1. Testator devised a life estate to his widow, and “the remainder that may be left after the death” of his wife in- equal remainders to his children. At testator’s death the children were young, ranging from two to eleven years of age, and unable to care .for themselves. After the testator’s death his widow sold some of the land to various purchasers, the proceeds of which were used for her support and maintenance. One of the four heirs had mortgaged his undivided interest in the property before the sale of the lots.—Held, in partition between the heirs, that under the will the widow took a life estate, with power of alienation for her necessities, and hence the mortgage lien did not attach to the land sold by her.
    2. Testator’s widow was aged, feeble and unable to take care of herself, and lived with a daughter who was a seamstress. Their land did not produce enough to pay the taxes, and it became necessary to build a new dwelling-house, costing $1,200. During a period of at least five years land was sold and the proceeds devoted to the support and maintenance of the widow and to payments on the house. The entire sum received from 'such sales and used for such purposes was $1,847.66.— Held, in partition between the heirs, that such sum was no more than was sufficient for the proper support and maintenance of the widow, and hence the conveyances were valid.
    3. Testator’s widow took a life estate in realty with the power of alienation, and the remainder in fee was devised to the four children. The widow sold lots to various parties during her life, the heirs joining' in the deeds with warranty. One of the heirs mortgaged his undivided interest in the property before any sale of the property.—Held, in partition between the heirs after the widow’s death, that the question as to whether the mortgage lien was a cloud on the title to the property sold by the widow could be determined in the action, though the owners of the lots were not parties, since, the heirs being liable to their grantees on their covenants of warranty, they were entitled to the same standing as such grantees.
    4. 'Where a widow took a life estate in property with the power of alienation and sold parts of it to various parties, a bill for partition between the heirs to remove a cloud, occasioned by one of the heirs mortgaging his undivided interest, on 'the title in the property sold by the widow, was properly filed in equity, since the heirs, as grantors, not having the title, could not be relieved in an action at law.
    5. Where several parties had purchased land from a widow who took a life estate with the power of alienation, and one of the children who took a fourth interest in the remainder, had mortgaged his undivided interest, a court of equity had jurisdiction of a partition suit between the heirs to remove a cloud from the title of the property conveyed by the widow, the legal title being in a number of people, to prevent a multiplicity of suits.
    On final hearing on pleadings and proofs.

      Mr. Oscar Jeffery, for the complainants.

      Mr. William A. Stryher, for the defendant Crevelling.
   Pitney, Y. C.

The bill has a twofold aspect and object:

First. It is a bill by three tenants in common against a fourth and his mortgagee for a partition of certain lands, the title to which the tenants derived by devise from their father, John Bryan the elder. As to this part of the case there is no room for dispute. There is none as to the title, and the right, to partition is clear.

Second. The bill shows, and it is proven, that certain portions of the lands so derived from their ancestor have been sold for full consideration to divers purchasers, and conveyed by deeds containing full covenants of warranty and against encumbrances, executed by the four tenants in common, subsequent in date to the registry of a mortgage given by the defendant John Bryan upon his undivided share therein to the defendant Crevelling and now held by him. The prayer is that .this mortgage may be declared not to be a lien upon the parcels so conveyed.

In the same line is an allegation, also sustained by the proofs, that the four tenants in common made a partial partition among themselves of a small portion of the premises, by which one small lot was conveyed to each of the complainants and one to thé daughter’ and by her to the wife of John Bryan the •defendant; and the prayer is that those so conveyed to the .complainants may be decreed to be free and clear from the lien of the Crevelling mortgage.

In support of these contentions the complainants rely upon the language of the will of their father, John Bryan, who died seized of the premises about the 1st of January, 1844, testate ■of a will executed in 1837, which, after providing for the payment of his debts, &c., proceeds as follows:

“Item.—I give and bequeath to my beloved' wife Rachel all my estate I now own and possess, after paying debts and expenses, as long as she remains my widow and to her children that she may have by me; should she marry again she is to have no more of my estate than the law gives her; as for my son, Aaron Bryan, and my daughter, Elizabeth Mitchel, they have their shares in advance, so that they are to have no more of my estate, but the remainder that may be left after the death or marriage of my wife to be equally divided between her children share and share alike as the law directs, and for the fulfilling of this my last will and testament, I appoint my beloved wife Rachel Bryan, my executrix, in whom I put my whole trust.” ■

The three complainants and defendant John Bryan are the children of Rachel. She, Rachel, never xe-married, and joined in the several conveyances above referred to, and, shortly before the filing of the bill, died intestate in her ninety-seventh year.

Complainants’ contention is that by the true construction of the will Rachel had the power' to dispose of at least so much of the land as was necessary for her support and maintenance, and that the several conveyances above mentioned produced no more than sufficient for that purpose.

Considerable evidence was adduced upon this question of fact, with the result that I conclude that the complainants’ allegation in that behalf is proven.

Eor the last ton or fifteen years of her life the widow was unable to do anything for her own support. The land did not produce enough to pay the taxes, the homestead dwelling became dilapidated and unfit for occupation, and a new dwelling became necessary. The care and maintenance of the mother fell upon the complainant Jane. She was a seamstress, who was employed by persons desiring her services in their homes. This business she was obliged to abandon for several years and to-devote her time and attention to the care and support of her mother.

The partial partition among the four children above referred to was made in 1890; and shortly before that date, to wit, in the fall of 1889, a new house was erected upon the lot conveyed to Jane. This house cost about $1,200, of which $100 was ■ contributed by Jane, and part of the balance came from cotemporaneous sales of lots, and the remainder was borrowed and afterwards paid by the proceeds of later sales of lots.

At the time of the erection of this house the old lady was ninety-one years old. The last lot was sold in 1893. The proceeds of these' sales were all given, directly or indirectly, to-the complainant Jane in pursuance of a family arrangement and agreement to the effect that she should have the proceeds- and the house for the care and maintenance of her mother. The total receipts from lots were $1,995; the cost of surveying’ and conveyances, $61.25; taxes paid on undivided lands, $86.09; total deductions, $147.34, leaving the net amount received by Jane, under this arrangement, $1,847.66, from which must be • deducted the funeral expenses and so forth.

I think this is a liberal allowance for people living in’ the ■ style these appear to have lived, and yet I cannot say that, under all the circumstances, it is either unfair or extravagant.

Two questions remain—first, is the complainants’ construction of the will the true one; second, if so, are they entitled to the relief prayed, viz., a declaration and decree that Crevelling’s mortgage is not a lien upon the lands conveyed by deeds in which the widow joined?

And first, as to the construction of the will. It is proper here to premise that the question for solution is not whether ’ the widow took a fee which descended to her children as her heirs-at-law. The authorities are decidedly against any such - result (Downey v. Borden, 7 Vr. 460, at pp. 466, 467), and the parties make no such claim. But the question is simply whether she took a life estate with a power of disposition.

The character and condition of the estate of the testator should also be considered. The will was made in 1837, seven years before his death, when his oldest child was but four years old, and one or two of his children were born after the making of the will. The personal property was insufficient to pay the debts and a portion of the land was sold for that purpose.

Upon a reading of the clause in question there can be no doubt that under the first part of it the widow took an estate for life only, Avith the remainder to her children, and that the remainder Avas vested. If we omit the words “as long as she remains my widow” the estate would, under that part of the clause, still probably be one for life only under the authorities cited in Theob. Wills pp. 200, 208. The use of the words “children that she may have by me,” have been held to turn Avhat would otherwise have been a joint estate in the mother and her children into an estate for life in the mother with the remainder to her children.

The power of disposition in the life tenant must arise, if at all, by implication from the use of the words “bub the remainder that may be left after the death or marriage of my wife to be equally divided,” Ike. Here it is to be observed that the will contains no bequests or devises of any kind to persons other than the widoAV which could diminish the estate in her lifetime, and there was no personal estate to be spent or consumed in its use. So that the words quoted cannot be satisfied by any consumption of personalty or payments of intermediate legacies. There was nothing to dispose of but land.

Uoav the familiar and cardinal rule is that force and effect must, if practicable, and in the absence of repugnancy, be given to every word in the will. Bearing this rule in mind it is impossible not to conclude that when the testator used the words just quoted he had in mind that his wife might, during the period of her possession under his will, make use and disposition of some part of his estate in such a manner as to diminish its quantity; and that such use and disposition must be authorized by the language he had- just used, for he is presumed to have known, that, as doweress, she would have no such right. Hence, he must have thought that he had given her the power to make such disposition by the words previously used.

How the words, “I give and bequeath to my beloved wife Eachel all my estate I now own and possess after paying debts and expenses,” are quite ample for that purpose; and it is not difficult to conceive that the testator used them in that sense, and then, having got so far in his disposition of his estate, he thought of the possibility of his widow’s marrying again, and added—“as long as she remains my widow”—without supposing that he thereby detracted from the power given her in the previous words. Then in the words, “the remainder that may be left after the death,” &c., we have the testator’s own interpretation of his own language, to the effect that he expected that his wife would consume, by use, some part of the property given to her for life. Of course, such consumption could only be effected by a conveyance.

This view is materially strengthened, by the concluding words of the clause, viz., “And for the fulfilling of this my last will and testament I appoint my beloved wife, Eachel Bryan, my executrix, in whom I put my whole trust.” Unless she had some power of disposition over the estate there was nothing to entrust to her.

I think the clause may be properly read (omitting members which do not affect its construction for present purposes) thus:

“Hem. I give and bequeath to my beloved wife Rachel and to her children that she may have by me, as long as she remains my widow, all my estate I now possess, but the remainder that may be left after the death or marriage of my wife to be equally divided between her children share and share alike as the law directs, and for the fulfilling of this my last will and testament I appoint my beloved wife Rachel Bryan, my executrix, in whom I put my whole trust

and, so read, I find it difficult to escape the conclusion that the testator intended that his wife and children should have the right to use some part of the body of his estate, as well as its income, as their necessities might require, and that his wife should determine the necessity and its extent. He put his whole trust in her..

Looking at the authorities, the case most nearly in point that I have been able to find is one in this court arising under the will of Adam Rienaker. The verbiage of that will was this:

“My will and desire is that all my property, both real and personal, shall be for the sole use and benefit of my wife Julianna after my decease, .and in- the event of her death then what shall remain to be disposed of in the manner following,” &c.

It first came before the late Chancellor Runyon, in Naundorf v. Schumann, 14 Stew. Eq. 14. On page 15 that learned judge uses this language: “The will gives to the widow no power, ■express or implied, to dispose of the property or any part of it in any way. At her death the whole of it is to be converted into cash and divided among the other legatees. The ■testator, indeed, used the qualifying words, fwhal shall remain/ but he probably used them in view of the fact that some of the personal property was of a consumable character.” Here it will be observed that he does not deny that the force of those ■words must be taken into account in giving a construction to the will.

The bill in that case was filed for instructions by the administrator with the will annexed, after the death of the widow. The will came again before the present Chancellor (McGill) in Rodenfels v. Schumann, 18 Stew. Eg. 383, where the question .•arose (as'here) between a person to whom the widow had conveyed a portion of the landed estate of her husband, and the persons interested under the will of Rienaker; and the learned chancellor there held that the conveyance made by the widow was efficient to pass the title. At page 387 he -uses this language : “In the absence of the words ‘what shall remain,’ the direction for the disposition of the estate at the death of the wife, by implication, determines that the estate to her was ■for life. But upon the authority above cited [Downey v. Borden, 7 Vr. 460] if the words ‘whal shall remain,’ in the connection in which they are used, create a power of disposition in the widow, the bequest over is void, and she tools a fee. The question, then, is narrowed to this, Did they create such a power ? I cannot resist the conclusion that they did. In making provision for Ms wife, the testator made use of most- liberal terms. All his-property, real and personal, was to be for her sole use and benefit. That use and benefit was unrestricted and uncontrolled. It was not limited to consumption of income, or to mere physical enjoyment. It was to be something more than mere usufruct,, for it was not to survive the use intact. It was contemplated that some part of it was lo be consumed in the wife’s use and' benefit. The remainder alone was thereafter to be dealt with. In the disposition of that remainder the wife’s next of kin was-placed on equality with the testator’s own, and thereby some right of the wife in the property superior to that which would admit of his giving her the mere usufruct of it during her life was recognized. I think that a broader meaning should be given to the words what shall remain’ than to say they refer merely to personal chattels consumable by use. To my mind, they plainly imply a power of alienation in the widow. ' This being so, she took a fee in her husband’s property, and that fee passed to the complainant, Mrs. Rodenfels, by her deed.”

In the case in hand it appears, as before stated, that the-personal estate was insufficient to pay the debts, so that the probability that the testator had chattels only in view in using-the language in- question is very slight. And in addition we have the circumstance that the children were all young, their ages varying from two to eleven at their father’s death, and the burden of their education and maintenance during their minority naturally fell on the mother. Such conditions render it the more easy to believe that the testator intended his wife-should have something more than a bare life estate.-

The testamentary disposition in Rodenfels v. Schumann differed from that here under consideration in that the immediate-words of devise to the widow in that case were indeterminate in expression as to the amount of the estate, whether in fee- or for life, and therefore would have given her a fee by implication. Downey v. Borden, 7 Vr. 460. That implication, however, was rebutted by a devise over after the death of the first-taker, and the estate was, in the absence of other expressions-of a power of disposition, reduced to one for life. There was-no express power of disposition given, and the question propounded and considered by the chancellor was whether such power should be implied from the use of the words “what shall remain.” That learned judge held, as above quoted, that such implication did arise from those words, and a conveyance by the life tenant was upheld.

Briefly stated, there was, in Rodenfels v. Schumann, an estate in fee cut down by implication from a devise over to one for life, without express power of disposition, and such power was implied from the use of the words “what shall remain” after the devise over. In the case in hand we have an estate for life without express power of disposition, with a devise over of the “remainder that may be left” after the determination of the life estate. I am unable to distinguish the two cases in principle, and therefore must hold that the conveyances by the widow were effective to pass the title, not because she took a fee, as in Bodenfels v. Schumann, but as the proper exercise of a power entrusted to her by the testator.

Among the numerous English cases arising out of inartificial wills resembling this I find none precisely in point.

That there is no repugnancy in the gift of a life estate with an indefinite power of disposition and a devise over of what shall remain, was held in Surman v. Surman, 5 Madd. *122, the substance of which case is as follows:

“Bequest of household goods, &c., after payments of debts, &c., to testator’s wife for her life, or widowhood, with power to her to sell the same as she should think proper, for her own benefit and the maintenance of testator’s nephew and daughter-in-law, during their minority, with a bequest over, upon the death or second marriage of the wife of the same, or so much as should then remain to such nephew and daughter-in-law.— Held, that the widow was entitled to the residue for her life or widowhood, with a power to apply any part of the capital for: her own benefit and the proper maintenance of the nephew and daughter-in-law during their minorities; and thsrt on the death or marriage of the widow, the remainder of the capital unapplied was well limited over.”

And, again, in Doe v. Glover, 1 Man., G. & S. 448 (50 Eng. Com. L. 447), the question was between the devisee of a tenant for life and a remainderman. The original devise was of lands—•

“Unto my son, Mordecai Glover, and his heirs and assigns forever; to-hold to him and to his heirs and assigns forever; but, in case my said son, Mordecai Glover, shall happen to depart this life without leaving any issue of his body lawfully begotten then living, or being no such issue, and he my said son shall not have disposed and parted with his interest of, in and to the aforesaid copyhold estate and premises, then and in such case, I give and devise the same customary or copyhold messuages, cottages, lands, tenements, hereditaments and real estates unto, and to the use of, my illegitimate daughter Ann Stevenson.”

Mordecai Glover was admitted as tenant of the copyhold, and died without issue and without having conveyed the premises, testate of a will by which he attempted to dispose of the land-It was held that the father’s devise over was good of all that the son had not conveyed in his lifetime. Chief-Justice Tindal (at p. 459) said: “The testator, in the first place, gives the estate to his son and to his heirs, should he have any; and he-gives him full power to dispose of it in his lifetime. But he goes on to evince, in the event of his son dying and having no issue, a natural desire that the estate should go to his illegitimate daughter, provided his son's wants should not have made it necessary for him to part with it in his lifetime. And this was by no means an unreasonable mode of dealing with the property. Eor these reasons, I am of opinion that the-plaintiff is entitled to judgment.”

To the same effect is Upwell v. Halsey, 1 P. Wms. 651. There-the testator, being possessed of personal estate, and having a wife and sister, who was the plaintiff, but no issue, by will gives ten pounds to his sister and directs that such part of his estate as his wife should leave for her subsistence should return to his sister and the heir of his body, and appointed his wife-executrix. The wife married the defendant and afterwards died, upon which the sister sued the defendant, the second husband, for an account of this personal estate. The court said: “It is now established that a personal thing or money may be devised to one for life, and remainder over; and as to what has been insisted on, that the wife had a power over the capital or principal sum, that is true, provided it had been necessary for her subsistence, not otherwise; so that her marriage was not a gift in law of this trust money.”

The case of Constable v. Bull, 3 De G. & Sm. 411, 18 L. J. (N. S.) Eq. 302; S. C., 13 Jur. 619 (which is the better report), was as follows:

“I give, devise and bequeath unto my dear wife, Mary Ann Constable, all and every nay estate and effects, -goods, chattels, houses, lands, moneys, securities for money due or growing due, every matter and thing whatsoever, and wheresoever the same may be at the time of my decease, for her sole, separate use and benefit. I further give, will and direct that, at the decease of my said wife, whatever remains of my said estate and effects shall go to and be equally divided, share and share alike, between the following persons hereinafter named, or so many of them as may be then living.”

The estate consisted of copyhold estates which he had contracted to sell, and long leaseholds and government annuities. She possessed herself of the money, and spent considerable of of it, but did not pay all the debts, and died intestate. The dispute related to personalty and was between her administrator and an administrator with the willx annexed of her husband. The question was whether the widow was entitled to the whole, so that it passed to her administrator, or whether what remained went over to the-persons named in the will. It was suggested by Mr. GifEard, in argument, that the words ""whatever remains” might be explained in two ways: first, that they might be applicable to what remained after payment of debts, funeral and testamentary expenses; and secondly, that they might refer to the perishable nature of some of the property, and to what might be left of that which was perishable. In delivering judgment Vice-Chancellor Knight Bruce said: ""There is a difficulty, rather critical than substantial, in the way of adopting the suggestion of Mr. GifEard, and which had before occurred to my mind; it is this, thát it is impossible to attribute to the testator the notion that the payment of the debts, funeral and testamentary expenses, was to be postponed until after the decease of his widow. The gift to the wife is universal in the first instance, and then follow the ulterior gifts, with the words "whatever remains of.’ I have already said that the only question is, whether the use of these three words, "whatever remains of,’ have the effect of preventing the gift to the widow being construed as a life interest. It is quite clear that, if those three words were omitted, the terms of the gift, subsequent to the gift to the widow, would cut down her estate to a life interest. Of that no one can doubt. The question is, whether, in the present state of the authorities, I am bound to put such a construction on the words here used as to destroy the intention of the will. As at present advised, I think the state of the authorities is not such as to require me to do so. There are several theories which might be attributed to these words, either of which would be inconsistent with construing them so as to give the widow the power to spend, or give away, or dispose of the property in question. I think, as at present advised, that the other legatees have a substantial interest under the words used by the testator and that such of them as were living at the death of the widow will be entitled.”

It will be observed that the question was not as to the validity of any disposition which the widow had made in her lifetime, but as to whether the use of the words “what remains” would not give an absolute interest to the widow, notwithstanding there was a bequest over, and that the learned judge did not deny, but that the words in question did, by implication, give the life tenant a limited power of disposition.

This renders it unnecessary to consider another proposition started by complainants, namely, that even if the conveyance by the widow did not convey a good title, yet, as a portion of the proceeds of the sales of land was used to erect a house on Jane’s lot, Crevelling should not be permitted to have the benefit of the increased value in her lot and also of a share in the lots which produced the increase.

The remaining question is as to the right of the complainants to a decree that the Crevelling mortgage is not a lien upon the lots so convejred by the widow. Their right is put upon the ground that they entered into covenants of general warranty in those conveyances and are entitled to be relieved from any liability thereon.

The mortgage in question constitutes a cloud upon the title, and, in that respect, the bill resembles that in Rodenfels v. Schumann, supra. It is, however, not filed expressly under the statute authorizing bills to determine claims to real estate .and to quiet title, and must rather be classed as a bill to remove .a cloud from the title which may be entertained without the aid of the statute.

The only objection made by the defendant Crevelling to this part of the bill was that the several grantees of the lots, other than the complainants and defendant, were not before the court. Ho objection was made on account of misjoinder or multifariousness. At first I was inclined to think that the objection of want of parties was fatal, but, upon further consideration, I think it cannot avail. It is true that if the opinion and determination of the court herein be adverse to the grantees of the parties to this suit they will not be bound by it, and, vice versa, it may well be that they cannot take advantage of a determination adverse to Mr. Crevelling. Dpon this point I express no ■opinion; but the question remains whether the complainants have not a right to have the question determined as between them and Mr. Crevelling. Being liable to the several owners -of the lots conveyed upon their covenants of general warranty .and against encumbrances, they are, in my judgment, entitled in this court to the same standing that any of such grantees would have, and it may be added that their standing in equity is greater than that of the present holders of the legal title, in this, that if it be admitted that the latter have a remedy at law against the mortgage in question,-or by bill filed under the act .above referred to, the complainants have no such remedy, and ■ can only be relieved in this court.

The circumstances, also, are such as to render the intervention ■ of this court desirable. The bond and mortgage in question was given on January 25th, 1876. Ho bill has ever been filed or other proceedings taken to enforce it. How lately the payments have been made on it does -not clearly appear. The property conveyed is held by several owners, and if they desire •to remove the cloud each must bring a separate suit. This shows the element of multiplicity of suits.

Again, if a bill were" filed to foreclose the mortgage, or an .action of ejectment brought upon it, the holder would make out a prima facie case by proving the seizin of John Bryan the elder, his death, and that the mortgagor, John Bryan the second, was one of his children. This would throw u|3on the holder of the title the burden of proving the will of John Bryan the first, and the conveyances by the widow and her right to convey.

Under these circumstances it seems to me that a proper case is made for the action of the court.

The general principle that this court has jurisdiction to remove clouds from title is undisputed. But a distinction has been taken between those cases where the instrument which produces the cloud is void upon its face, and those in which it is prima facie good and some extrinsic evidence is necessary to show its invalidity. I think this case falls under the latter class.

Chancellor Runyon, in Shotwell v. Shotwell, 9 C. E. Gr. 378 (at p. 380), quotes, with approbation, the language of the court in Martin v. Graves, 5 Allen 601, as follows: “Whenever a deed or other instrument exists, which may be vexatiously or injuriously used against a party after the evidence to impeach or invalidate it is lost, or which may throw a cloud or suspicion over his title or interest, and he cannot immediately protect or maintain his right by any course of proceedings at law, a court of equity will afford relief by directing the instrument to be delivered up and cancelled, or by making any other decree which justice and the rights of the parties may require.”

The whole subject is discussed with great clearness and learning by Mr. Justice Seldon in the case of Ward v. Dewey, 16 N. Y. 519 (at p. 525). He there reviews all the authorities and shows that they clearly hold that where a deed or mortgage constitutes-a cloud upon title the party affected thereby has a right to come into a court of equity to have it removed, although he has a perfect defence at law, unless the invalidity of the deed appears upon the face of it.

To the same effect is Sherman v. Fitch, 98 Mass. 59; and Clouston v. Shearer, 99 Mass. 209; and Chipman v. City of Hartford, 21 Conn, 488, where there is also an elaborate-examination of the authorities.

I will advise a decree in accordance with these views.


text:
    The Beacon Lamp Company and Aaron Moses, its trustee in bankruptcy. v. The Travellers Insurance Company and Mary Bardzik.
    [Submitted September 19th, 1900.
    Decided November 7th, 1900.
    Filed June 4th, 1901.]
    1. A contract by an insurance company to indemnify against loss from liability for damages on account of personal injuries to employes caused by the negligence of. assured, is not a contract of indemnity merely, on which suit could not be brought until.the assured paid a judgment against it for personal injuries to an employe, but in equity the insurer becomes the principal debtor to an injured employe, and the assured the surety, so that a bill would lie by the latter to establish the principal’s liability and compel it to perform its contract of indemnity.
    2. An insurance company contracted before the Bankrupt law to indemnify against loss from liability for damages on account of personal injuries to employes caused by the negligence of the assured; provided, however, that no action should lie thereunder respecting any loss unless brought by the assured himself to reimburse him for loss actually sustained, and paid in satisfaction of a judgmsnt.—Held, the proviso did not apply where the assured was forced into bankruptcy, and payments of judgments against it enjoined.
    3. Where an insurance company contracted to indemnify against loss from liability for damages on account of personal injuries to employes, caused by the negligence of the assured, an injured employe, who has recovered judgment against the assured, may sue the insurer in equity, as principal debtor, to compel payment of the full amount of the judgment, notwithstanding the insolvency of the assured.
    On demurrers by the insurance company to the complainants’ bill, and to the answer by way of cross-bill of Mary Bardzik.

      Mr. Freeman Woodbridge, for the complainants.

      Mr. Alan II. Strong, for the defendant Mary Bardzik.

      Mr. Charles C. Black and Mr. George Holmes, for the Travellers Insurance Company.
   Pitney, Y. C.

The complainant and its trustee in bankruptcy claim to occupy the position of a surety for the defendant insurance company which, they claim, occupies the position of principal debtor to the defendant Mary Bardzik.

The object of the original bill is to enforce the payment by the insurance company to the other defendant, Bardzik, of the debt so due, in exoneration of the bankrupt’s assets. The cross-bill of Miss Bardzik is aimed at the insurance companj’-, and is based not upon any privity of contract between her and the insurance company, but upon the fact that she has a demand by judgment against the complainant, against which demand complainant is indemnified by the insurance company, and she claims that out of these facts arises an equity on her part to demand payment directly from the insurance company. The prayers of the original bill and of the cross-bill are substantially the same.

The right of the complainant, if it occupies the position of surety for the insurance company, to enforce such a demand by a suit in chancery framed as is this, seems to be well settled. Chancellor Kent, speaking of the 'right of a surety against the principal, in King v. Baldwin, 2 Johns. Ch. 554, says (at p. 560) : “The surety is entitled to pay the debt when it becomes due and sue the principal debtor, or he may call upon the creditor by the aid of this court to enforce his demand against the principal.”

Chancellor Green, in Irick v. Black, 2 C. E. Gr. (at p. 195), says: “As soon as the debt has become payable, he [the surety] may file a bill to compel payment by the principal, in order that the surety may be relieved from responsibility.”

Mr. Justice Depue, speaking for the court of errors and appeals, in Railroad Co. v. Little, 14 Stew. Eq. 519 (at p. 529), says: “In equity the surety’s remedy is not necessarily confined, as at law, to obtaining indemnity after payment of the debt. Under special circumstances, where his equitable right to have the debt paid by the principal, or out of the latter’s property, can be enforced without injury or prejudice to the creditor’s rights, he may compel the creditor to resort to securities in his hands, or under his control, the property of the principal, in satisfaction of the debt, before coming upon the surety; as, for instance, where the creditor is fully indemnified and will be subjected to no delay, and exposed to no risk of, loss if he is compelled to resort first to the property of the principal.” And this-right, he says, on the same page, does not depend upon or require any contract for support, but results from the relation of surety and principal, independent of contract, and is founded upon the-principle of natural justice of placing the charge where in equity it belongs.

And see Herron v. Mullen, 11 Dick. Ch. Rep. 839, in the court of errors and appeals; Wooldridge v. Norris, L. R. 6 Eg. Cas. 410, where several English authorities are collected; Nisbet v. Smith, 2 Bro. Ch. C. *579, and cases cited in note; Champion v. Brown, 6 Johns. Ch. 398 (at p. 405); 1 Story Eq. § 730; Mitf. Pl. *148; and see the principal American cases collected-in the American notes to Dering v. Winchelsea, 1 White & T. Lead. Gas. *114; and Brandt S. & G. §§ 191, 192, 204, 205, 206.

The principle upon which these authorities rest is that it is-inequitable to compel a surety to first pay the money to the-creditor as a prerequisite to a remedy against the principal.

The proceeding is in effect a suit by the surety against the-principal to compel him to pay his debt to the creditor; and the objections to the suit have generally been raised by a creditor who 'happened to be unwilling to enforce his claim against the principal. But where it appears, as here, that there is no-contest between the surety and the debtor, but both desire the payment of the debt, the right to proceed seems to be unquestioned. In fact, it seems to have been held by Chancellor Kent in Champion v. Brown, supra, that they were properly joined as-complainants in that case.

It is equally well settled that a creditor has a right of subrogation to any choses in action or other property which the surety has received from the principal to indemnify him, and included' in that category is any covenant which the debtor has given the-surety to pay the debt. The leading case in New Jersey is Klapworth v. Dressler, 2 Beas. 62 (the head-note of this case states the doctrine erroneously in saying that the grantee becomes the surety for the grantor. "The opinion says the grantor becomes the surety for the grantee (see p. 68, bottom), followed by a line of eases whose citation is not necessary.

The whole subject was thoroughly discussed by Mr. Justice C-ray in Keller v. Ashford, 133 U. S. 610, where, after citing with approval Klapworth v. Dressler, and commenting on many other cases, he says: “In short, if one person agrees with another to be primarily liable for a debt due from that other to a third person, so that as between the parties to the agreement the first is the principal and the second the surety, the creditor of such surety is entitled, in equity, to be substituted in his place for the purpose of compelling such principal to pay the debt.”

With this preliminary statement of the rules of equity.governing the question, let us see how far the facts admitted by the demurrers bring the present case within them.

The lamp company, complainant, being engaged in carrying on a factory, purchased from the insurance company, defendant, a policy of insurance by which it agreed to indemnify the lamp company, for the term mentioned, against loss from common law or statutory liability for damages on account of bodily injury accidentally suffered by any employe caused by the negligence of the assured, to the extent of not more than $5,000 incurred and suffered by one individual, and subject to certain enumerated conditions and exceptions not necessary here to be stated, except the fifteenth, which provides that

“No action shall lie against the company as respects any loss under this policy unless it shall be brought by the assured himself to reimburse him for loss actually sustained and paid by him in satisfaction of a judgment after trial of the issue.”

During the life of this policy Miss Bardzik was employed by the lamp company in its factor, and suffered personal injury under such circumstances as to render the lamp company liable to her for damages, and upon a recovery by her against the lamp company to render the insurance company liable to indemnify' the lamp company to the extent of not more than $5,000. This is admitted by counsel of the insurance company. Miss Bardzik brought suit against the lamp company, the defence of which was conducted by the insurance company, and resulted in a verdict for $6,000.

The facts show, and it is admitted by the counsel of the insurance company, that if the lamp company had paid Miss Bardzik this judgment, a cause of action at common law would have arisen at once in its favor against the insurance company. What actually occurred was this: on the day that judgment was entered, and before execution was levied, the lamp company was thrown into bankruptcy on the petition of one of its creditors, and enjoined from paying Miss Bardzik, and she was enjoined from enforcing her judgment against it. The complainant Moses was duly appointed trustee in bankruptcy.

This state of facts seems to me to clearly place the three parties to this suit in the relations toward each other which the complainant and Miss Bardzik claim that they occupy. As between Miss Bardzik and the lamp company,- and without regard to the policy of insurance, the lamp company is the debtor, and Miss Bardzik is the creditor; and they bear the same relation to each other that the owner of land, who has given a bond and mortgage, does to the holder of the mortgage; but when we introduce the element of the policy of insurance given by the insurance company, the situation of the parties is, in equity, changed, precisely as it is in the case where the giver of a bond and mortgage conveys the land and the grantee assumes the payment of the bond and mortgage as a part of the consideration money. At once, in such a ease, in the view of a court of equity, as between the grantor and grantee of the land, the grantee becomes the principal debtor to the holder of the bond and mortgage, and the bondsman and mortgagor becomes surety for the grantee; and that change of relationship enures to the benefit of the mortgagee. He may still treat his bondsman as his debtor, and sue him at law, or he may treat him as a surety and claim through that relation the benefit of the covenant of the grantee to pay the debt; and this he may do notwithstanding the insolvency of the mortgagor. All that was ■expressly decided in Klapworth v. Dressler, supra.

The demurrers are both general for want of equity, and set •up no special causes.

Fo objection was made in the demurrer, or at the argument to the cross-bill that it could not be properly joined in an answer to the original bill.

The grounds relied upon as against the bill of the lamp company and its trustee, are—

First. That independent of the special condition above set forth, _ the contract is one of indemnity merely, and until the complainant pays the judgment it cannot be said to be damaged.

But I think this position cannot be maintained as against the ■ long line of authorities already cited.

Second. That the lamp company, being insolvent, its trustee will, possibly and probably, be compelled to pay only a dividend on the judgment of Miss Bardzik, and the insurance company' is liable for such sum only as will be so paid by it.

It is not necessary at this stage of the proceeding to determine the extent of the liability of the insurance company so far as the complainant is concerned, and hence, as was held by Chancellor' Kent in Champion v. Brown, supra, it is no cause of demurrer. The bill of the lamp company and its trustee is in the nature of a bill for specific performance to establish the liability of the insurance company, and to compel it to perform its contract to indemnify the lamp company as fast as it shall suffer loss. 1 Story Eq. Jur. § 730. This is the most favorable aspect of it for the insurance company.

But it is proper here to remark that if the defendant’s contention in this behalf is correct it will produce some curious results. If after paying the expenses of managing and winding up the bankrupt estate there remain no assets from which the trustee can make a dividend, then the insurance company will, on the theory of its counsel, be absolved from all liability. Such a result does not commend itself to a court of equity.

Again: if on the winding up of the bankrupt’s estate a dividend of, say, fifty cents on the dollar be paid, and Miss Bardzik thereby receives from the trustee $3,000 on her judgment, then the trustee will have a cause of action against the insurance company for that amount. And, supposing the insurance company pays it, what will the trustee do with it? Must he divide it equally among all the creditors, or must he pay it to • Miss Barclzik? If the latter, then the insurance company will again become liable to pay at least $2,000 more. If, however, the $3,000 paid in the supposed case by the insurance company to the trustee becomes a new fund to be distributed among all the creditors, then Miss Bardzik will bo entitled to another dividend out of it, and upon payment of that second dividend to her a second liability will arise against the insurance company and in favor of the trustee, and another dividend will follow its payment, and so on ad infinitum.

This objection, viz., that the measure of obligation is the actual amount paid by the lamp company to Miss Bardzik, does not, at this moment, seem to me to apply to Miss Bardzik’s cross-bill. .If she is entitled to recover anything it seems to me it is the whole $5,000.

The principal point, however, made by the insurance company against the complainant’s bill, is based upon the severe language found in the condition above recited:

“No action stall lie against the,, company as respects any loss under this policy unless it shall be brought by the assured himself to reimburse him for loss actually sustained and paid by him in satisfaction of a judgment after trial of the issue.”

This language, when strictly construed, does certainly go a long way toward sustaining the defendant’s position. But the effects ascribed to it by counsel are so contrary to the manifest right and justice of the case that the court will not adopt such construction unless clearly compelled thereto.

Counsel of complainant and for Miss Bardzik contend, first, that the complainant’s bill in equity is not such an action as is forbidden by the clause; that an action at law is there com templated resulting in a peremptory judgment for a fixed sum, and that the clause was intended to protect against actions at law being brought before the liability of the insured to the injured party was established by a judgment, and to avoid such actions as Sparkman v. Gove, 15 Vr. 252, and Hoppaugh v. McGrath, 24 Vr. 81; and further, that this suit is not based, strictly speaking, on the contract, but rather on the complainant’s equity arising out of the facts of the ease, as stated by Chancellor Kent in King v. Baldwin, 2 Johns. Ch. (at p. 554), and by Mr. Justice Depue in Railroad Co. v. Little, 14 Stew. Eq. 521, and again, by Chancellor McGill, in Kidd v. Hurley, 9 Dick. Ch. Rep. (at p. 180).

Now, although it is well settled that at law the ordinary contract of insurance is treated as a direct one between the parties, leading to the relation of debtor and creditor, yet this particular form of contract leads to the relation of principal and surety. The real creditor is Miss Bardzik, and the real debtor is the insurance company, and the insured named in the contract—the lamp company—occupies the position of a mere surety. This, as we have seen, is the foundation of the equity in Klapworth v. Dressler, supra, and the line of eases which follow it. Hence, it is argued, the right of the complainant is based upon that relation, and not on contract. In fact, the action is one for the specific performance of the contract by the insurance company to indemnify the complainant, and such actions are so classed by the commentators. Hence, it is argued, the case appears from an equitable standpoint precisely as if there were no contractual relations between the insurance company and the lamp company, and the attitude of principal and surety between those parties arose, as well it might and often does arise, out of the bare facts. I am inclined to think this view is sound. Giving the clause in question its strictest construction, it yet seems to me that a chancellor will not permit it to stay his hand in enforcing a plain equity.

But the complainant takes the further position that where, as here, the complainant is prevented by the superior power of an injunction issued by a court of common jurisdiction from making the payment to Miss Bardzik as a condition precedent to an action at law, such prevention operates as a dispensation to it of the necessity to make such payment, where, as here, such failure to pay works no injury to the insurance company which is visible to the eye of a chancellor.

Thus, but for the restraint of the federal court, the complainant could, in the absence of funds in hand, borrow $5,000 on the strength of a temporary assignment of the policy, with which to pay Miss Bardzik, and with her receipt in his hands at once be entitled at law to sue. And yet such, a formal proceeding would not affect the substantial rights and justice of the case.

It is manifest, counsel for the complainant contends, that the present situation was not in the minds of the parties when the contract was made, and the rule is that a party is held to perform an act that proves to be unlawful or impossible only when it appears that he was aware of such illegality or impossibility at the time he contracted. And the argument is that the performance of a condition precedent which afterwards becomes impossible comes within the letter and spirit of that rule.

The policy of insurance in this case is dated Eebruary 20th, 1897. Miss Bardzik’s injury occurred on January 12th, 1898. The federal Bankrupt act was passed July 1st, 1898, after both the issuing of the policy and the injury suffered by Miss Bardzik, so that the restrictions to which the lamp company might be subjected by the operation of the Bankrupt act could not have been in the minds of the contracting parties, and the lamp company cannot be presumed to have supposed that its ability to perform a condition precedent would become lawful.

I think the present case is within the rule invoked by complainant. It has been held that it extends so far as to relieve a plaintiff from the performance of a condition which, by the contract, is precedent to a right to recover. Jones v. Judd, 4 Comst. 411; Heine v. Meyer, 61 N. Y. 171; and see the instructive case of Baily v. De Crespigny, L. R. 4 Q. B. 180 (1869). In those eases a contractor was prevented from performing his contract by legislation subsequent to making it, which rendered it unlawful for him to proceed further in carrying it out, and it was held that he was excused thereby from completing, and entitled to recover.

The present case is distinguishable from that class of cases of which Croockewit v. Fletcher, 1 Hurlst. & N. 893, is a sample, where the performance of the condition precedent forms or enters into the very consideration of the contract. Eor instance, where, as in that case, the condition is that a ship shall sail on a certain day, or that a horse purchased shall be delivered at a certain time. There time is of the essence of the contract, and the purchaser may refuse to. accept at a later day. Non-performalice at the time and in the manner named in the contract cannot be excused by illegality or impossibility in the performance. In contrast with this line of cases are those of the procuration, by a contractor for the erection of a building, of the architect’s certificate that the building has been finished, which, certificate is required by the contract as a condition precedent to his right to payment. The modern rule, as T understand it, is that if the contractor has actually done the work according to his contract, both as to time and manner, the fact that he is unable for any cause for which lie is not personally responsible to procure the architect’s certificate, will not defeat his right to a recovery. The production of such certificate does-not enter into the actual consideration, and does not aifect the question whether the work is in fact done and finished according to the contract. It is treated as a mere method of proof.

In the present case the real consideration of the contract is the premium paid by the lamp company tó the insurance company. The real and only meritorious condition precedent of the-liability to payment is the suffering of injury by the employe,, and the recoveiy of judgment therefor after the test of a trial by jury, in which the insurance company shall have the opportunity to conduct the defence. All these have taken place. The-actual payment of the money by the defendant in the judgment to the injured employe has in it nothing meritorious, and does-not .touch the real consideration of the contract.

So much for the right of the complainant to maintain its bill.

As to the cross-bill, I think the objections raised have less force, if possible, than as against the complainant. Miss Bardzik has a claim against the lamp company based upon her judgment. Under the peculiar circumstances of the case that is-really the debt of the insurance company, and on the principles previously stated she is entitled to have the benefit of the insurance company’s covenant, notwithstanding the insolvenc}1, and her inability to realize her judgment against the lamp company. As between her and the insurance company, the question of the amount by which the assets of the lamp company would be diminished by her claim is immaterial, or, rather, that amount will be presumed to be the amount of her judgment, and -conse■quently she is entitled to a decree for the whole $5,000, with interest from the date of her judgment.

I will advise that the demurrers he overruled, upon the usual terms.


author: Pitney, V. C.

text:
    Wendell Andreas v. The Gas and Electric Company of Bergen County.
    [Submitted November 14th, 1900.
    Decided November 17th, 1900.
    Filed June 4th, 1901.]
    1. The placing by a licensee of a municipal corporation, on a public •sidewalk, the fee of which is in an adjoining owner, of poles for furnishing light by electricity for private consumption, is a taking of such owner’s land, for which he is entitled to compensation, since the legislature has not authorized municipal corporations or their licensees to erect poles on sidewalks for conducting electricity for use in private lighting, but has, by act of April 21st, 189G (P. L. of 1896 p. S£g), authorizing the use of the public highways for distribution of electricity, forbidden such erection without the landowner’s consent.
    2. Act of March 24th, 1899 (P. L. of 1899 p. 399 § 67), authorizing the township committee to contract with any private corporation for supplying light for public use in the township, does not authorize the licensee of the township to use the public highway for private lighting without making compensation to the owner of the soil, since the authority given by impli•cation must be confined to lighting the streets within the municipality.
    Heard on bill, answer and affidavits.

      Mr. Charles L. Corbin, for the complainant.

      Mr. Milion Demaresl, for the defendant.
   Pitney, V. C.

The object of the bill is to obtain an injunction from this ■court to prevent the defendant from erecting poles to support ■electric wires in front of the complainant’s land.

The complainant is the owner of a tract of land in the township of Teaneck, in the county of Bergen, which is bisected by a road known as the River road.

The defendant is a corporation whose business is “the furnishing of light and power by electricity throughout a great part of the county of Bergen to private consumers and also for public lighting,” and is actually engaged in the business of lighting the streets of the township of Teaneck.

On the 21st of September, 1900, the defendant entered into a written contract with the municipal authorities of Teaneck by which the defendant agreed to furnish

“sixty or more street lights, with all the appurtenances, posts, wires, &c., necessary for the maintenance and operation of the same, and to light the said lights with their full power every night according to the standard all-night lighting schedule,”

for the term of five years from October 1st, 1900, and the township agreed to pay certain annual compensation therefor. The contract does not locate any of the lights to be so furnished, nor provide, other than as may be implied from what is above stated, for the erection of any poles in any particular street or streets. By a subsequent arrangement the term of the contract was reduced from five years to one j^ear. This was done for the purpose of preventing its being rendered void by reason of a lack of preliminary formalities requisite to authorize a contract for a term of years.

In pursuance of that'contract the defendant proposes to erect several poles on Pine street in front of the complainant’s premises. The street where it crosses complainant’s premises is rather narrow, and he proposes to widen it, and with that view pointed out to the defendant’s workmen where his new street line would be, and the positions where its poles must be placed. The defendant construed this pointing out by the complainant as a permission by him to place its poles, and proceeded to dig holes in the complainant’s fields.

No fault is found by the complainant with the location of the holes, nor was any proof offered as to just where in the line of the street when widened as proposed the poles will stand, but it is to be inferred that they will be placed where such poles are usually placed, namely, in the edge of the sidewalk, and not in any part of the traveled wagon road or gutter.

The defendant brought on the ground the poles which it proposes to erect, and when the complainant saw these he forbade their erection, and applied to this court for an injunction, obtained a restraining order, and the poles have not been erected.

The complainant swears and contends that he has not assented to the erection of any poles, and that the defendant has no right to erect poles in the excavations made for them, without either his consent or condemnation by proper proceedings of the right to erect them.

It was supposed at the argument that the act of May 22d, 189-1 (P. L. of 189k V- k7kJ Gen. Biwb. p. 217k § 2k%)> justified the erection of poles for certain purposes without the consent of the owner. But this act was subsequently found to have been repealed by the act of 1899 (P. L. of 1899 p. k®6), so that there is now in existence no statute which directly authorizes the erection of such poles without the consent of the landowner.

The only other act now in force which deals directly with the subject is the act of April 21st, 1896 (P. L. of 1896 p. 822), and that requires the consent in writing of the owners of the soil.

The defendant relies for its right to act without such consent on the Township Eevision act of March 24th, 1899. P. L. of 1899 p. 899 §§ 67, 68. Section 67 reads as follows:

“The township committee shall have the power to provide for lighting the streets and public places of the township, and for that purpose may contract with any person or private corporation for a supply of light for public use in said township.”

Section 68 provides that no contract shall be made for more than one year, without certain preliminary formalities.

Counsel contends that the sixty-seventh section gives power to the township authorities to make such a contract as was made in this case, and that by implication it is authorized to use the public highways for that purpose without making compensation to the owner of the soil, and relies upon the case of Halsey v. Rapid Transit Street Railway Co., decided by Vice-Chancellor Van Fleet, and reported in £ Dick. Ch. Rep. 880.

There the question was whether poles erected in the center of the street and just on the line of complainant's land, for the purpose of stringing, wires for the conduct of an electrical current which should serve for two purposes, first, in propelling street cars, and second, for lighting the streets, was an additional burden upon the owner of the fee over and above that of a public highway, for which he was entitled to have compensation.

The vice-chancellor sa}rs'(at p. 898) : “The decision in these cases was placed upon this manifestly just principle: that the question whether a new method of using a street for public travel results in the imposition of an additional burthen on the land or not, must be determined by the use which the new method makes of the street, and not by the motive power which it employs in such use. The use is the test and not the motive power. And this principle exhibits in a very clear light the reason why it has been held that the placing of telegraph and telephone poles in the street imposes an additional servitude on the land. They are not placed in the street to aid the public in exercising their right of free passage, nor to facilitate the use of the street as a public way, but to aid in the transmission of intelligence. Although our public highways have always been used for carrying the mails and for the promotion of other like means of communication, yet the use of them for a like purpose, by means of the telegraph and telephone, differs so essentially in every material respect from their general and ordinary uses, that the general current of judicial authority has declared that it was not within the public easement. Massachusetts has, however, by a divided court held otherwise."

And again (at p. 895) he says: “There can, however, be no doubt, I think, that erections may be lawfully made in the streets of a city for the purpose of lighting them. They must be lighted at night to make their use safe and convenient and to prevent lawlessness and crime. Bv the charter of Newark, power is given to its governing body, by. express words, to light the streets, parks and other public places. I have no doubt that in virtue of this power the city has the right to erect poles in the street just where the poles in question are. The poles in question are in fact to be used for the purpose of lighting the street. One of the conditions on which the city gave its consent to the erection of the poles is that the defendant shall place on every other pole a group of 'five incandescent lights of sixteen-candle power each, and furnish such light every night. This use.of the poles .and wires would, in my judgment, legalize their erection, but this is not their primary use. They were erected primarily and principally to facilitate the use of the street and add to its convenience as a public way, and it is upon this ground that I think it should be declared that their presence in the street invades no right of the complainant.”

But the learned vice-chancellor, in the-previous part of his opinion, clearly distinguishes between an erection of any kind placed in the part of the street devoted to the use of vehicles, and that devoted for the use of a sidewalk. He says (at p. 887) :. “The poles have been placed on that part of the complainant’s land where, if their erection constitutes a legal injury at all, they will do the least possible harm. They have been placed on the edge of his boundary line, at a point where, so long as his land remains subject to the public easement, it is not possible for him to make any use whatever of the land. Had they .been placed on the sidewalk in front of his premises, rights growing out of a duty incumbent upon the abutting owner in respect to that part of the street, might have made it the duty of the .court to consider questions not at all involved in this case.” And then, after citing authorities showing the peculiar rights of the landowner in the sidewalk, he says (at p. 888) : “These utter- . anees show that there is a material distinction between the rights • of an abutting owner in tli§ sidewalk adjacent to his premises .and those which he may exercise over the other part of the street. I entertain no doubt that that part of the street which has been set apart for public use by means of vehicles maj’’ be lawfully applied to uses which would be unlawful as against the adjacent ■ owner if exercised against his will, on the sidewalk which his .money has paid for.”

The counsel of defendant further relies upon the case of Meyers v. Hudson County Electric Co., decided by the court of errors 'and appeals November 27th, 1899, and reported in 34 Vr. 573. There the court dealt with the act of May 22d, 1894, which, as we have seen, has been repealed, and which expressly authorized the erection and maintenance of all necessary and proper posts, poles, lanterns and fixtures on any or all of the public roads, streets, lanes or alleys. And it was held that the ordinance there drawn in question was not invalid because it authorized the erection of poles upon the lands of the prosecutor, presumably in the margin of the sidewalk.

That case was based on the case of Roebling v. Trenton Passenger Railway Co., 29 Vr. 666, which, as well as Meyers v. Hudson County Electric Co., was a certiorari to test the validity of an ordinance which authorized the setting of poles to sustain wires to be used for conducting electricity to propel a street railway. The distinction between the sidewalk and the traveled way, taken by Vice-Chancellor Van Fleet in Halsey v. Rapid Transit Street Railway Co., was not dealt with in either case. In the Roebling Case the ordinance under review provided specially for the setting of certain poles in the edge of the sidewalk on complainant’s property, and the contention of the prosecutrix was that it would result in putting an additional burden on her land. Mr. Justice Depue, in speaking for the court of errors and appeals, says that the fact that the carrying out of the ordinance may work an actionable injury to the prosecutrix’s land was not a reason for setting it aside, but that the prosecutrix should be left to her action at law- He says (at p. 675) : "If any of the privileges granted by this statute are made the occasion for unlawful injuring the owners of abutting property, such-acts of the company are ultra vires and redressible by action at the suit of the injured party. The act of the legislature is a general law for the equipment of street railways throughout the-state, and the ordinance under review is, in those respects which are material to this controversy, similar to the ordinances under; which many street railways have been equipped and operated. A decision that such ordinances and the statute under which they were made were invalid for the reason that, in a particular case before the court, it should appear that these privileges have been made the occasion for unlawfully injuring private property, when such injury was not the direct product of the ordinance, would be disastrous to public interests and not warranted in law. Eor such injuries, the .remedy of the party injured is by action. If the acts done under color of the ordinance, or the statute, be found to be an unlawful invasion of the rights of private property, an action will lie in which neither the ordinance nor the statute would be a justification.” .

But I do not find it necessary to determine the question, if there be any question, of the right of the municipality, under the sixty-seventh section of the Township act, to.erect poles for public lighting purposes on the sidewalk in front of complainant’s land without his consent, for the reason that the complainant’s counsel, at the hearing, and in his written argument, expressly assents to the erection of such poles for the purpose of lighting the streets of the township of Teaneck, .but not for-the purpose of private lighting or the transmission of power, or of carrying electricity over wires to adjacent districts outside of that township. This assent is made upon the express condition that the poles to be erected shall be-no larger and have no more arms than are reasonably necessary for the purpose of public lighting of the township of Teaneck.

The complainant contends that it is manifest from the size and character of the poles and arms to be attached thereto brought upon the ground, that the object is something more than the mere lighting of the streets of Teaneck; that the object is to furnish power and light to individual consumers both in that township and in the adjacent neighborhood, and also to put upon the poles wires to extend through to other townships and territory outside of Teaneck, and that in so doing will put an additional burden upon his land, for which either Ms consent must be observed or compensation.made. .

The proofs show that the poles to be erected are forty feet high and about eighteen inches in diameter at the butt; .that they are notched for four cross-arms, and that the cross-arms brought on the ground are marked for six wires, making in all twenty-four wires to be strung in front of complainant’s land. It was hardly affirmed in the affidavits, or contended in the argumont, that poles of that size, with so many arms upon them, are necessary for simply the purpose of public street lighting in the township of Teaneck. In fact, the affidavits show that they are much larger than those previously used by defendant in Teaneck.

The purpose of the defendant’s incorporation, as stated in the bill and admitted in the answer, is the “supplying of light and power by electricity through the greater part of the county of Bergen to private consumers, and also for public lighting.” And common knowledge leads to the inference that in order to reach one township it may be necessary for it to cross another township. Now here comes in the distinction taken by the court of errors and appeals in the case just cited—Meyers v. Hudson County Electric Co.—between public lighting and private lighting. The act of 1896 was held by that court to apply only-to private lighting—that is, lighting the houses of private individuals; and that act expressly provided for the consent of the landowner. And there is, I think, a clear distinction between the function of providing light for strictly public purposes, and private purposes; precisely as there is a distinction between providing water for municipal purposes, extinguishment of fires and sprinkling of streets, and providing it for private consumers. The municipality may be under air actual or implied obligation to supply water for the extinction of fires, and light for the lighting of streets, while it is under no such obligation to furnish either of those elements for private use. And this position is not inconsistent with the general proposition that the furnishing of .water and light for private use is a public purpose. This is perfectly well settled. But it is also perfectly well settled that private property cannot be taken for such a public use without compensation first made, and I can find nothing in the reported decisions or judicial utterances in this state which warrants the idea that because a municipality may undertake to supply either water or gas or electricity for lighting purposes to private consumers, it is thereby relieved of the constitutional duty of making compensation to persons whose property shall be taken for that purpose. At any rate, there is, so far as I know, no legislation in New Jersey authorizing such action with regard to lighting by electricity. As the law stands at this time any corporation desiring to rise private property tor the purpose of furnishing light by electricity for private consumption must make just compensation wherever it takes, in the sense in which that word is used in that connection, private property for that purpose.

The question, then, is whether the placing on the public sidewalk, the fee of which with the adjoining property is owned by the complainant, poles for that purpose will be a taking of his land. I am of the opinion that it will be, in the sense that it will impose upon it a greater burden than can justly be implied from the laying out of a highway across, or the dedication of a part of his land for the purposes of a highway. As pointed out by Vice-Chancellor Van Eleet in the Halsey Case, the lighting" of streets may be' considered as necessary in order to make them safe for use at night. But this consideration does not reach the lighting of the interior of the houses built along their route.

It is a matter of common knowledge that the larger the pole, and the more numerous its arms and wires, the greater the nuisance to the premises before which it is erected. So that it is impossible to say that it is no greater injury to the owner of the land to erect thereon poles with arms for the purpose of conducting a current of electricity sufficient to be used for the purpose of power and for private lighting in a large district, than the erection of poles for a more restricted purpose.

The result is that I find that the legislature has not only not given authority to a municipality or its licensee to erect poles on the sidewalk to support wires to conduct electricity for use in private lighting or for the transmission of power, but has, by the act of 1896, above referred to, by implication, forbidden such erection without the consent of the landowner; and my impression is that such authority, if given, would probably be held to be unconstitutional, unless given upon terms of making compensation, and that the authority given by implication by the sixty-seventh section of the Township act of 1899 must be confined to the purpose of lighting the streets within the limits of the municipality..

The affidavits tend to show sufficiently for present purposes that the poles with arms and w-ires proposed to be erected upon complainant’s land are larger than is necessary for the purpose for -which the legislature has authorized their erection, and will be a greater nuisance to complainant than that purpose requires. I will therefore advise an injunction against their erection.

The parties will be given a proper opportunity in the course of the suit to obtain a judicial determination upon the question as to what size of poles, and what number of arms thereon and wires to be strung thereon, are necessary for the lighting of the streets of Teaneck.