text:
    Cumberland National Bank of Bridgeton v. Theodore F. D. Baker et al.
    [Filed July 27th, 1898.]
    1. A chattel mortgage made upon any personalty in which the mortgagor has either an actual or a potential property will be recognized at law, but equity will support mortgages or assignments of contingent interests and expectations and of things which rest in possibility only.
    2. Where two chattel mortgages are about to be made, and all the parties are acquainted with the considerations of both mortgages, and with this knowledge it is agreed that one shall have priority, it does not lie with the mortgagee who has agreed to the priority of the other, to dispute its validity because it was given to secure a pre-existing debt.
    3. A chattel mortgage upon all “seeds and crops of whatever kind or description, now in the ground or hereafter to be planted, upon the farm where we now reside,” given by a farmer and seed-raiser residing on his farm, where in the ordinary course of husbandry he raises crops, duly verified and recorded, is a valid lien upon an after-planted crop grown upon that farm, as against mortgages thereon, created after the crop was severed.
    On bill, answer and testimony.
    The bill in this ease was filed by the complainant, the Cumberland National Bank of Bridgeton, to foreclose a chattel mortgage given to it by the defendants Baker and wife, to secure the payment of a pre-existing debt owing by Baker to the bank, not yet due, and also several notes not yet due, upon which Baker was bound as endorser and which were held by the bank. The mortgagor was a farmer and seed-raiser, and lived on his farm in Cumberland county, New Jersey, where the mortgaged property was recited in the chattel mortgage to be located.
    The mortgage of the complainant was dated on the 5th day of March, 1895, and set forth the schedule of the chattels mortgaged, and, among other things, the articles giving rise to this dispute, in the following words: “And also all the seeds and •crops of whatever kind and description, now in the ground or hereafter to be planted, upon the farm where we now reside.”
    The chattel mortgage in question was duly acknowledged and verified, and was recorded on the day of its date, in the Cumberland county clerk’s office, in the mode prescribed for chattel mortgages.
    It contained a clause whereby Baker agreed that it should, upon the property therein mortgaged, be a prior lien to the mortgage given the same day to Garrison & Minch.
    Afterwards, but on the same March 5th, 1895, the mortgagors made to the defendants Garrison & Minch, trading, &c., another chattel mortgage upon the same goods and chattels, describing them in the same manner, but adding several lots of fertilizers in the warehouse of the mortgagee. This mortgage was also duly acknowledged, verified and recorded as required by law. The consideration of this second mortgage was in part the securing the payment of an antecedent debt owing by Baker to the mortgagees, and in part the securing the payment of the purchase-money for the fertilizers named in the mortgage and sold by the mortgagees to the mortgagor, eoineidently with the making óf the mortgage. This later mortgage contained this clause:
    “ It is hereby expressly covenanted and agreed, by and between the parties to this instrument, that this chattel mortgage is executed and delivered as a lien, subject to the priority of a chattel mortgage upon the same property bearing even date herewith, and executed and delivered by the mortgagors herein named to the Cumberland National Bank of Bridgeton.”
    At the time when these mortgages were given the mortgagor was in financial difficulty by reason that he had endorsed commercial paper which was about being forced to judgment. He continued in possession of his farm and in the conduct of his business as a farmer and seedsman during the seasons of 1895 and 1896, and raised, severed and disposed of the crops of those years without any interference from the mortgagees. He also continued in possession during the season of 1897, and had planted seeds and crops upon the farm where he had resided, named in the chattel mortgage of the complainant, and was then in the conduct, on his farm, of his business as a farmer and seed-raiser, and had partly harvested his crop for the season of 1897. He had paid nothing on either of the mortgages.
    On the 30th day of August, 1897, he executed a chattel mortgage to the defendant William O. Garrison, to secure him for a previous indebtedness arising from money loaned and goods sold, and on the same day executed to the defendants Garrison & Minch, trading, &c., an additional chattel mortgage to secure them for the indebtedness outstanding on their above-mentioned mortgage, which yet remained wholly unpaid.
    These two mortgages were dated, acknowledged, verified as to consideration, &c., and recorded on August 30th, 1895, and each had annexed the same schedule of property mortgaged, including the following clause, which is the basis of the claims of the defendants Garrison & Minch, trading, &c., and of William O. Garrison (who is a member of the firm of Garrison & Minch) of their right of priority to the complainant in the property in dispute:
    “All my crops, seeds, products of the soil, whether the same be now growing or which I have grown and harvested in the course of my business as aforesaid and are now in my possession.
    “All manure and fertilizers, and generally all personal property except household furniture owned by me in connection with my business aforesaid.”
    The complainant filed its bill to foreclose and a receiver was appointed, who sold the crops grown in the year 1897, and the whole question in dispute is based substantially upon the contention of the defendants Garrison & Minch, trading, &c., and William O. Garrison, that their mortgages given on August 30th, 1897, are liens upon the crops grown in 1897, and that the complainant’s mortgage was not a lien on those crops; that the proceeds of the sale of them in the receiver’s hands in this suit should not be paid in satisfaction of the complainant’s prior mortgage, but to them on their later mortgages.

      Mr. William A. Logue, for the complainant.

      Mr. Walter H. Baeon, for the defendants Garrison & Minch and William O. Garrison.
   Grey, V. C.

The defendants suggest that the complainant’s mortgage was intended to hinder creditors because the mortgagor disclosed his threatened financial embarrassment to the complainant and proposed giving the mortgage, and that the delay in foreclosing suffered the mortgagor to sell off crops of large value, and that this operated as a fraud upon creditors. The evidence did not lead me to believe there was any fraudulent purpose either in the inception of the complainant’s mortgage or in its omission to foreclose it. So far as there was any delay in its foreclosure, the defendants themselves were in the same position as the complainant — they took their mortgage of March 5th, 1895, at the same time, on the same property, and might themselves have foreclosed had they chosen to do so. It is no answer to say that the complainant’s mortgage was paramount. The defendants, if they recognized the complainant’s mortgage, could have redeemed it, and thus forced a realization, or if they disputed it, could have contested it with the same result. In my view there is no showing of a fraudulent intent on the part of the complainant to hinder or defraud creditors of the mortgagor, but that the delay was rather for the purpose of giving the mortgagor a chance to pay off his indebtedness without legal steps, if that were possible. The testimony of the defendant Garrison, stated that the defendants Garrison & Minch took their mortgage of March 5th, 1895, in order that the mortgagor might not be annoyed by his endorsements of Ely & Company paper, and might continue his business. This does have a color of hindering creditors of the mortgagor, but it is the defendants’ mortgage and not the complainant’s which is thus impugned. Any creditor who chose might have forced a sale, and neither mortgage appears to have been used to prevent others from proceeding against the defendant. Fraud is not shown merely by the fact that the debtor voluntarily secured the claims, and that the secured creditor did not sue as soon as he might, there being no proof of collusive action between the secured creditor and the debtor for the purpose of hindering or preventing other creditors.

The defendants contend that the complainant’s mortgage, because taken to secure a pre-existing indebtedness, is invalid as against the Garrison & Minch mortgage, which was given in part to secure a presently-passing consideration, and Milton v. Boyd, 4 Dick. Ch. Rep. 142, is cited in support of this contention.

In that case Vice-Chancellor Pitney made an elaborate examination of previous eases on this subject and determined that a chattel mortgagee whose mortgage was given to secure a preexisting debt is not a mortgagee in good faith, under the fourth section of the Chattel Mortgage act, as against creditors, as to whom an unrecorded prior mortgage is void by the terms of that section. The line of the earlier decisions is somewhat in conflict upon the point. The supreme court in a recent opinion (Knowles Works v. Vacher, 28 Vr. 500) reviews the same cases quoted by the learned vice-chancellor and takes the opposite view, holding that it is only under those statutes which require a mortgage to have been given for a valuable consideration, as well as in good faith, that a recorded mortgage securing an antecedent debt cannot supplant a prior unrecorded mortgage; that the Chattel Mortgage act only requires the mortgage to have been given in good faith in order to bring its holder into the class as against which the unrecorded mortgage is void, and that a mortgage to secure a pre-existing debt is in good faith and within the protection of the statute.

Neither construction of the fourth section of the statute is of any avail to give a preference to the defendants’ mortgages.

Milton v. Boyd, so far as it has application to the case under consideration, is against the defendants’ contention. Boyd’s chattel mortgage, which was held to be supplanted by Milton’s, was last in delivery and was postponed, though first recorded, because held not to be within the class of subsequent mortgages in good faith, as against which an unrecorded mortgage was declared by the statute to be void. In the case in hand the complainant’s mortgage was not only first recorded, but was also first delivered, so that, being untainted by fraud, it was a precedent lien to the mortgage of the defendants, under the doctrine expounded in Runyon v. Groshon and other cases (ubi post), irrespective of the record under the statute.

. On the other hand, if the rule laid down by the supreme court in Knowles Works v. Vacher, ubi supra, be followed, the complainant’s mortgage, though given to secure a pre-existing debt, was yet in good faith and was thus entitled, on being recorded, to receive the priority which is given by the statute.

But in my view the case in hand does not call for the consideration of the construction of the fourth section of the statute. The mortgagor expressly covenanted that the complainant’s mortgage should be prior to the mortgage given to the defendants Garrison & Minch on the same day, March 5th, 1895, and the latter’s own mortgage contained a like provision. Both the complainant’s and defendants’ mortgages of that date were drawn at the same time and under an agreement of all the parties that the complainant’s should be the prior lien. The complainant’s mortgage was in fact the first one delivered and recorded. The defendants had, therefore, not only actual and constructive notice of the existence of the prior mortgage of the complainant, but they had actually agreed by the clause in their own mortgage that the complainant’s mortgage should have priority, and if by any mishap the defendants’ mortgage had been first recorded, the complainant would have had an equity to have its mortgage put in its proper place of priority.

It is no answer to this to say that the complainant parted with nothing for its mortgage, while the defendants gave a presently-passing consideration for their mortgage. All the parties were informed of the whole transaction, and it was on the faith of their agreement that the complainant’s mortgage should be prior to the defendants’, that the latter obtained their mortgage. It would be inequitable to permit them to retain their own mortgage thus secured, and to dispute the priority of the complainant’s mortgage which they had agreed should be first.

The mortgage of the complainant and those taken by the defendants on August 30th, 1897, stand to each other on this point in the same position as do those dated March 5th, 1895. Those taken on August 30th, 1897, were both received as securities for pre-existing debts. That of Garrison & Minch was given for precisely the same debt as was secured by their previous mortgage of March 5th, 1895; that of the defendant William O. Garrison for an outstanding indebtedness of Baker, the mortgagor, to him personally. The defendants, both Garrison and Minch, knew of the previous mortgage of the complainant when they took their mortgages of August 30th, 1897. Under the rule as stated in Milton v. Boyd, ubi supra, if the prior record of the complainant’s mortgage did not protect it, because that mortgage was given to secure a precedent debt, the absence of the aid of the record did not avail the defendants, because both of their mortgages taken on August 30th, 1897, had the same infirmity; they, also, were both taken to secure debts pre-existing their creation, and, under the doctrine in Milton v. Boyd, their holders were not subsequent mortgagees in good faith, and the precedent mortgage of the complainant, whether recorded or not, was not void as to them. They knew of its priority when they took their mortgages, and were bound by it, when it is shown to have been honestly given with no purpose to defraud creditors. If the rule declared in Knowles Works v. Vacher be applied, the mortgage of the complainant being in good faith, they were bound by its previous record.

I also think that as far as the later mortgage of the defendants Garrison & Minch covered only the same goods as were included in their previous mortgage, those defendants were bound by their covenant to recognize the complainant’s mortgage as prior to their own. The complainant’s mortgage was not illegal in any sense, and they could not avoid their agreement that the complainant’s mortgage should have priority over theirs, by taking another mortgage upon the same property.

The defendants further claim that the complainant’s mortgage is invalid so far as it is asserted to be a lien upon the crops raised in the year 1897, which have been sold by the receiver, the proceeds of which sale await distribution in this cause, contending that an unplanted crop cannot be made the subject of a chattel mortgage.

This question turns upon the extent and validity of the lien of the complainant’s mortgage. The clause in the complain■ant’s mortgage which is claimed to include the crops raised in 1897 is: “And also all the seeds and crops, of whatever kind and description now in the ground or hereafter to be planted upon the farm where we now- reside.”

At the time this mortgage was given, the mortgagor, Baker, •was in the actual possession and cultivation of the farm on which the seeds and crops uamed in the mortgage were in the ground or to be planted. At the date of the mortgage — March 5th, 1895 — it is probable that no crops were growing on the farm, certainly those now in question were yet to be planted, for it is the proceeds of the sale by the receiver of the crops (largely onion seed) raised in 1897 which are in dispute.

The defendants insist that the mortgagor had neither right nor power to mortgage an unplanted crop, a thing not yet in existence.

In order that a vendor may make a sale either conditional or absolute, it is necessary that he shall have a present, property in the thing sold. This property may be either actual or potential —that is,-the vendor may actually have the subject-matter of the sale at the time when the contract is made, or he may at that time occupy such a position to the property dealt with that it is reasonably certain to come into being, subject to his disposition, and in such case the sale transfers the property as soon as it is extant, though in the later cases some act of possession seems, at law, to be required. Such a sale was sustained at law as long ago as the case of Grantham v. Hawley, Hob. 132, which was a grant by a lessor of such corn as should be growing upon the leased ground at the end of the term of twenty-one years. It was objected that it was a mere contingency whether there should be a crop of corn growing at the end of the term, and that the lessor never had any property in the corn, and, therefore, could not grant it, yet it was held that the right to the corn standing at the end of the term being certain, accrued with the land to the lessor, and he might lawfully dispose of it. What may be potential property, capable of being dealt with by a sale, is well illustrated by the discussion in the case of Petch v. Tutin, 15 Mees. & W. 115. In that case a tenant, in order to secure an indebtedness, assigned a large amount of property, “and also all the tenant right and interest yet to come and unexpired,” and the question debated was whether the crops not sown at the time of the assignment passed by it. The trial judge thought they did not, but, on'rule to show cause, it was argued that they did, because the tenant in possession of the farm had a potential interest in the after-planted crop. Chief-Baron Pollock accepted the argument, and stated the principle to counsel thus : “ Your distinction seems to be this, the party cannot grant the next year’s crop of wool of sheep he has not got, but he may grant the next year’s wool of the sheep he has got; ” and the whole court agreed that the trial judge was in error, and directed a verdict for the assignee of the after-planted crop.

This doctrine has been enforced in the law courts upon the ground of the potential existence of the subject-matter of the conveyance. A mortgage by a lessee of crops yet to be planted on the land of which he is in possession w'as held, in an action of replevin, to be a disposition of things which had a potential existence when dealt with by the lessee, a farmer in possession of the land in which the crops were to be planted in the ordinary course of husbandry. Arques v. Wasson, 51 Cal. 622. Professor Dwight, sitting as a commissioner of appeal, held, in an action of trover, that a clause in a lease of a farm creating a lien securing the payment of rent “ on all goods * * * and other personal property which may be put upon said premises,” covered crops subsequently raised on the farm, and operated in equity to transfer the interest of the tenant immediately that the new property came into existence. McCaffrey v. Woodin, 65 N. Y. 459. The reasoning of the courts of-law in the later cases proceeds upon the idea that the contract is a continuous agreement, operating as a power, and perfecting the interest of the creditor as soon as any act is done in the nature of an execution of the power. A very clear statement of the general rule as to the operation of a transfer of after-acquired property may be found in the opinion of Lord Chelmsford in Holroyd v. Marshall, 10 H. L. Cas. 220, where he declared that at law a disposition of after-acquired property passes no title until possession is taken, or by some equivalent novus actus interveniens, dominion over it is assumed by the assignee;' but in equity the moment the property comes into existence the agrees rnent operates upon it.

Under this view, one in the ownership of lands may assign an interest in crops thereafter to be planted on those lands which, being of a potential property, would pass the interest conveyed even at law. In the case in hand the mortgagor, Baker, was the possessor of the lands in which the after-planted crop was mortgaged ; he was personally engaged in the production of the crops of the very character in dispute (onion seeds) in the usual course of husbandry, and, applying the doctrine above stated, he appears to have had such a potential interest in after-planted crops that he might, in the consideration of a court of law, convey it.

If there be any question of the status of a mortgage made by a tenant or owner of lands on after-planted crops in the view of a court of law, there is little doubt that such an agreement will be sustained in a court of equity. While the rule at law requires an actual or potential ownership, equity will support assignments of contingent interests and expectations, and of things which have no actual or potential existence and which rest in mere possibility only. Smithurst v. Edmunds, 1 McCart. 418, where an assignment by way of security of articles (furniture of a hotel) yet to be purchased, was held to be an equitable mortgage. It will be noted that in this case the articles charged were actually non-existent when the mortgage was given, and in order to bring them in relation to it, the mortgagor was obliged to purchase them and bring them upon the property. The distinction between the rule at law and in equity declaring that the equitable title to things not in actual existence may pass by assignment is elaborated by Chancellor Green in the case last cited, which is approvingly referred to by the court of errors in McFarland v. Stanton Manufacturing Co., 8 Dick. Ch. Rep. 650.

The complainant’s mortgage is also criticised because it did not specify the year when the after-planted crop was to be raised, which it is claimed was essential as against the claims of third persons. This objection is based upon the argument that the designation of the subject-matter of the contract is so uncertain that subsequent creditors may not be notified of the extent of the claim of the mortgagee unless the year in which the after-planted crop was to be raised was named in the mortgage. The mortgage in substance notifies all who read it that all crops raised after March 5th, 1895, on the farm where the mortgagor then resided were included in the mortgage. The designation is entirely free from doubt or confusion. The mortgagor resided on the farm and was engaged in the business of planting and raising the crops referred to, and had as much right to mortgage all of them as those of a specified year, and parties interested were just as effectually warned by a description of all crops planted after the named date as they would have been had those of a particular year been named. It suited the purposes of the parties to mortgage all that should be subsequently planted, and if the contract fairly described all, it cannot be said to be either misleading or non-informing. I can readily see that the financial situation of a mortgagor might be such that his necessities could only be satisfied by conveying all, rather than some part, of such uncertain values as crops yet to be grown, as security to those who might be willing to aid him. All who dealt with him after record of such a mortgage were fairly advised that his after-raised crops were charged by it.

The defendant also contends that under our recording act neither at law nor in equity can a valid chattel mortgage be made upon property not capable of immediate delivery and continued change of possession, and that an after-planted crop cannot be so delivered or possessed; that as only the severed crop can be so possessed, it is only the severed crop which can be mortgaged.

The defendant assumes that it is the Chattel Mortgage act which grants the power to deal with property by way of chattel mortgage, and that this power can only be exercised in relation to such chattels as are within the purview of that act, namely, such as are capable of immediate and continued possession. But this is an error. The power to assign and transfer property by way of chattel mortgage was exercised and recognized by our courts before there was any statute relating to chattel mortgages. Runyon v. Groshon, 1 Beas. 86; Miller v. Shreve, 5 Dutch. 250. But the mortgagee was then obliged to carry the burden of showing as 'against creditors of the mortgagor, that his mortgage was taken without fraud, and that the possession of the chattels by the mortgagor was not contrived or permitted for any fraudulent purpose. See instructive history of the origin of the Chattel Mortgage act in the opinion of Vice-Chancellor Pitney, Roe v. Meding, 8 Dick. Ch. Rep. 355, &c. To relieve the mortgagee of this burden, and to warn all persons who might deal with the mortgagor in possession of the goods and give him credit on that account, the original Chattel Mortgage act of 1864 and its various amendments were passed. These acts did not confer a power to make chattel mortgages; that power had been in existence before the statutes, and the exercise of it was the occasion of the passage of those acts. They declared that mortgages of goods which were not accompanied by an immediate delivery, and followed by an actual and continued change of possession of the things mortgaged, should be void as against creditors and subsequent purchasers and mortgagees, &c., unless verified and recorded in the mode prescribed by those statutes. The reason and spirit, and indeed the language of these acts, seem to apply only when the goods mortgaged are capable of such open and visible possession that their holding by a mortgagor who had given a secret mortgage might tempt some one to deal with him as the absolute owner, and it has been held that mortgages of choses in action, or other personal property which is not of a visible character, are not within the operation of those acts. Williamson v. Railroad Co., 11 C. E. Gr. 403; Bacon v. Bonham, 12 C. E. Gr. 212; Bleakley v. Nelson, 11 Dick. Ch. Rep. 674. But achattel mortgage of goods other than those of the class to which the chattel mortgage statute applies, might lawfully have been made before the statute, and may still be made, and it will be effectual to protect the mortgagee, but in such cases he is not obliged to conform to the requirements of the chattel mortgage statute in order to make his mortgage a valid contract. See cases last cited, all of which were valid, equitable assignments to secure debts, or mortgages of personal property, not within the operation of the chattel mortgage statutes.

If the complainant’s mortgage upon after-planted crops- is not within the purview of the Chattel Mortgage act as the defendants insist, then the result is, not that it is invalid because of those acts, but that they had no application, and the complainant was not compelled to comply with the conditions prescribed by those acts in order that his mortgage might be valid. I have, however, considered it as if within the operation oí the requirements of the Chattel Mortgage act.

So far as the relations of the defendants to the mortgaged property and to the mortgagor and the complainant are concerned they have, in the view of a court of equity, no claim whatever to superior consideration. They stand as to their mortgage of March 5th, 1895, as actual convenantors that the complainant’s mortgage should be the first lien, and as to both their mortgages of August 30th, 1897, as holders of liens received as securities for pre-existing debts, with full knowledge that the complainant was already the holder of a previous charge thereon; and if a record notice to them be required under the Chattel Mortgage acts, they also had this constructive notice. The effort of the defendants to defeat the complainant’s preference is not that of a creditor who has been misled into dealing with a mortgagor who had given a secret mortgage now sought to be enforced to the creditors’ injury, but it is that of mortgagees who in receiving their mortgage agreed that the complainant’s mortgage should have a preference, who now seek to avoid the effect of their own undertaking.

Some suggestion has been made that when the defendants took their mortgage of August 30th, 1897, there had been a severance of the crops of that year, and that for this reason their mortgages are entitled to a preference on the severed crops.

When the complainant’s mortgage is held good as above indicated, as a lien on the crops thereafter to be planted, the efficiency of the mortgage continues until the crop is applied to the satisfaction of the mortgage. No change in a crop of onion seed, which is an annual product, the result in, a peculiar degree of the labor and skill of man, such as severing from the earth, separating from the chaff, packing for market, makes it any less the same crop which was mortgaged. All these incidents may. fairly be considered to be steps in raising, cultivating and preparing the onion seed to be a crop.

The complainant’s chattel mortgage should be held to be a lien upon the crops raised in the year 1897, and prior to the liens of the defendants’ mortgages thereon. I will advise a decree accordingly, with costs in favor of the complainant.


source: Caselaw Access Project

author: Grey, V. C.

license: Public Domain

text:
    Emanuel Levi v. Louis Schoenthal.
    [Filed August 22d, 1898.]
    1. A preliminary injunction will not be allowed where the complainant knowingly suffers the supposed injury to continue for two years without applying for relief, where the effect of the writ if granted as applied for, will practically be to .take away from the defendant a business largely created during the two years and to give it to the complainant.
    2. Qucsre. Should an injunction issue to restrain the use of an adjective describing the excellence of a business ?
    On bill and affidavits. Order to show cause.

      Mr. Olarence L. Cole (of Thompson & Cole), for the complainant.

      Mr. James L. Van Syehel, for the defendánt.
   Grey, V. C.

(orally).

This matter comes to a hearing upon the bill and affidavits and the answering affidavits filed by the defendant. The restraining order stays the conduct of the defendant’s business. The case ought, therefore, to be disposed of now, if possible, and in order to do justice between the parties I will consider the matter at once. The whole of the remedy prayed for is that the defendant may be enjoined from the use of the words “ Incomparable Laundry” in the conduct of his business.

The bill shows that the complainant has been for many years in the use of the words “Incomparable Laundry” as applied to the business of the laundry which he carried on in Philadelphia. He employed the defendant to gather together laundry work in Atlantic City and send it up to the complainant in Philadelphia. In doing this work the defendant was, by the direct order of the complainant, to advertise or collect it in the name of the “ Incomparable Laundry,” with the name of the complainant added, “ E. Levi & Son,” and he so conducted that business for two years.

In 1895 the complainant and the defendant parted, and the latter engaged in this gathering of laundry work for himself. He then became a direct competitor of the complainant. Neither at the time they came together nor at the time they parted was there any agreement or pretence of an agreement that the defendant should be in any way restrained from competing in the laundry business for any period of time or over any district of territory, after he parted from the complainant. After he left the complainant’s employment the defendant had, so far as competition was concerned, all the rights which he had before he and the complainant came together. Under these circumstances the defendant engaged in a competitive business of precisely the same character as that pursued under the complainant’s employment. The bill does not seek to restrain the defendant from fraudulently representing that he is still taking laundry work to be done by the complainant, although an intimation of such conduct is alleged. The relief prayed is based solely upon the claim of a right to restrain the defendant from using the words “ Incomparable Laundry.”

The defendant used for a period of time and until the complainant objected, not only the name “Incomparable Laundry” but also added the name of the complainant’s firm, “ E. Levi & Son,” but on objection the latter name was rémoved. The complainant says he has frequently objected to the continued use of the words “ Incomparable Laundry.” But this allegation is fully met and denied by two or three affidavits of all those who were actively engaged in the business on the part of the defendant, to the effect that they never heard of any such objection nor had any such made to them, nor knew of any during the whole of the last two years that the business has been conducted, and until the filing of the bill in this cause. '

I cannot say which of these allegations is correct, but the complainant’s own statement, if true, destroys one of the elements upon which his equity depends, viz., diligent application for his remedy. If he suffered an injury he was bound, if he sought a remedy by injunction, to bring his application before this court within such reasonable period as would inflict the least injury upon the defendant. He could not stand by, even complaining, until the defendant had by diligence and labor largely built up and increased the business, taking no legal steps whatever, and then demand the interference of this court to take it away and practically to give it to the complainant.

The affidavits of the defendant being directly responsive and contradictory of the complainant’s affidavits, I am bound to take them at least as equal to the complainant’s, and they leave the complainant in this position: that as to his showing of the performance of his equitable duty of diligent application for his remedy, so far from being diligent, there have been two whole years during which the complainant knew of this wrong, if it were a wrong, and did nothing. For these two years the defendant was engaged in the prosecution of this business in the name of the “ Incomparable Laundry,” increasing its scope and profit, and no legal steps were taken by the complainant to interfere or obtain redress.

The defendant says that whatever value the business now has lie has given it by his diligence and attention during these two years. The defendant also says that during those two years there was an abundance of time for the complainant to have applied for the remedy by injunction, when it would not have done any serious injury to the defendant, whilst the application made now after two years’ delay and just exactly at the height of the season in which the business is being conducted, will if granted, practically destroy the defendant’s business.

Under the circumstances it seems to me that such laches is successfully imputed to the complainant that this court would be doing an injustice by granting a preliminary injunction.

In addition to this condition of affairs as indicated by the facts of the case, I have very grave doubts whether the complainant is entitled to any remedy in respect to the supposed injury which he may have received by the use of the words “Incomparable Laundry” by the defendant, which is the only injury for which relief is prayed.

The cases on the question are not altogether one way. In the English court of chancery, in the case of Raggett v. Findlater (I have not. the opportunity on this summary hearing to examine the report of the case, but it is quite fully quoted in 7 Chit. Eq. Dig. 6774, under the head of “Trade Marks”), the court held that the use of an adjective merely describing the quality of the manufactured article would not be protected by the court as a trade-mark. So in the case of Humphrey’s Specific Homeopathic, &c., Co. v. Wenz, 6 N. J. L. J. 43, Judge Nixon, in the United States District Court of this state, held substantially the same thing, that an advertisement or declaration that a man was selling a “ homeopathic ” remedy was not, because of the use of that word, capable of protection as a trade-mark.

It seems to me a strong argument may be made in support of that holding, because the establishment of a right to the exclusive use of such a descriptive word would enable one person to select an adjective which would be definitive of the excellence of his productions, and to restrain all other competing persons from asserting that their production of a like or similar article was as good as his. In short, it would be a prohibition of the use of the English language. It is not the use of the word “ laundry ” which is resisted. The exclusive right of the complainant is asserted in the use of the word “ incomparable ” as applied to a laundry. Why should any person be allowed to obtain so exclusive a use of the English language that he should have the right to assert the excellence of his production, and to stop all other persons who compete with him from claiming in the same language that their owii article has the same quality of superiority ? That is the very essence of competition, and in these days when advertising has become so potent a force in the conduct of business, it seems to me it would be doing a great injustice to prohibit anyone from using an adjective descriptive of the excellence of his business, because someone else had previously so described his own like business.

I do not pass upon that question, however. It will probably be fully argued on final hearing. As the case now stands, I do not feel justified in continuing the restraining order, and I put it on the denial of the complainant’s equity, in that the affidavits show, as by the weight of the proof I am bound to recognize, that there has been no such diligence on the part of the complainant in enforcing his remedy, if he has any, as would justify a preliminary injunction, and the matter will have to stand in that shape until final hearing.

If the complainant has of his own choice waited two years to apply for that remedy, I think he can wait two months longer, until final hearing, to see if he has any right to it.

I will advise the dismissal of the order to show cause and the restraining order, with costs.


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    Harriet Margarum v. Henry Margarum.
    [Filed October 15th, 1898.]
    1. This court has no jurisdiction, under its general equity powers, to make a decree for the support of a wife because of her husband’s failure to maintain her.
    2. To give this court jurisdiction to decree such 'support, under section 20 of the Divorce act (Gen. Stat. p. 1270), there must be an abandonment of the wife by the husband, or separation from her by his voluntary act, or circumstances equivalent thereto, and also a neglect or refusal on his part to support her. Both these conditions must exist to give this court jurisdiction.
    On bill, answer and proofs.

      Mr. John Meirs, for the complainant.

      Mr. Samuel A. Atldnson and Mr. Charles E. Hendrickson, for the defendant.
   Grey, V. C.

The bill is filed by a wife, alleging abandonment and nonsupport by the defendant husband.

In order to vest this court with jurisdiction it must be shown, first, that the husband abandoned or separated himself from the wife, and secondly, that he refused or neglected to support her.

Both of these conditions must exist under section 20 of the Divorce act (which alone vests this court with jurisdiction in cases of this character) to justify an application to compel the husband to pay an allowance for the support of the wife.

The condition of abandonment must necessarily be the husband’s act; the wife cannot abandon the husband and then invoke the aid of the statute to secure support from him.

If his conduct is so violent as to endanger her life and he thus compels her to go away, that is in law an abandonment by him. In such a case, so far as there is a separation of the husband and wife, it is his act, and consequently the decisions hold that in cases of that character, when the husband compels the wife to leave by cruel treatment, that is his abandonment. Maas v. Maas, 7 Stew. Eq. 113. It is his own separation, and his conduct is such that it is clear that he had a mental purpose or willingness to separate, or he would not have driven her away. In that case jurisdiction was taken notwithstanding the husband did not go away from the place of residence. So abandonment may be effected even if the parties lived in the same house, where the husband excluded the wife from his room and persistently refused her access to him. Anshutz v. Anshutz, 1 C. E. Gr. 164.

A wife is entitled to share her husband’s bed and room, and if he refuses to allow her to come to his bed and room, or treats her with such cruelty that she reasonably fears to go there, that is abandonment on his part, because he is the creator of the condition of separation.

In addition to the allegation and proof of abandonment the statute requires as a jurisdictional fact that the husband must refuse or neglect to support the wife. But if he never so wrongly refuses or neglects to support her, unless he also abandons her, jurisdiction under this statute does not attach. A husband who is a loafer and a good-for-nothing, may, if lie chooses, make himself a burden upon his wife, and refuse to leave her, and refuse also to support her, but under this statute there is no relief for the wife. The statute does not contemplate relief upon mere refusal to support, and even if this is actually established, there must also be abandonment or separation by the husband as above stated, in order to meet the requirement of the act.

In this case this husband undertakes to show (and there is a great deal of evidence to support his testimony) that he was financially quite incapable, and that he never had much earning power. He was accepted by this woman for better, for worse. It happens to have been for worse, and he is unable to support her; but that is no reason why she should have a compulsory order upon him to force him to support her. Nor does his poverty deprive him of any of the rights of a husband, and one of those is, if the wife lives in a house, to share it with her. He has a right to live with her, and if she compels him to live somewhere else by driving him away, she cannot enforce as against him any of the marital rights which are secured to her by section 20 of the Divorce act.

The testimony as to abandonment, even of the wife herself, seems to be very clear that there was no abandonment or separation by the husband, at all. It is quite plain that this man wanted to live with the woman, and that she did not want him, because he did not support her, and she had no regard for him, and if he could not do as she thought he ought, namely, earn enough money to support her and take care of her, she did not want him. She flatly swears that she told him to “get out.” He states that she reinforced this order with a broomstick. But the husband had a right to live with her, even if he did not support her!

The statute does not contemplate a situation where the wife drives the husband away, and then applies under its provisions for support. The marital relation secures to each party a right to the society, aid, comfort and services, of the other. We all know of thousands of instances where the wife has undertaken and carried the husband through many difficulties, and in this she is simply fulfilling her wifely duty. No wife may say to her husband, “ if you do not support me you shall not live in my house — get out; I will then file a bill against you and compel you to support me or go to jail.” That is not the law.

The statute which this woman has invoked requires a mental condition of the husband of willingness to separate from the wife, resulting in some act, on his part, of abandonment or separation from his wife. If he does no act of abandonment and separates from his wife unwillingly, and by her direction and because of her act, there is no jurisdiction in this court to compel him to support his wife, either under section 20 of the Divorce act, or under its general equity powers.

I will advise a decree dismissing the bill.


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    Edward M. Davis v. Henry L. Davis.
    [Filed October 25th, 1898.]
    A plea which sets up as a defence matters which appear upon the face of the bill, will be overruled. The defendant should demur in such case.
    On amended bill and plea thereto.

      Mr. Peter Baclces and Mr. John J. Joyce, for the complainant.

      Mr. Isaac 8. Taylor, for the defendant.
   Grey, V. C.

The complainant in this cause filed his original' bill against the defendant, who had been the administrator of his father’s estate, administrator de bonis non of his mother’s estate, and also guardian of the complainant; all under appointments by the surrogates of Kings county and Westchester county, New York.

In the original bill the complainant alleged that the defendant had been appointed administrator as above stated, and that he had received assets of the estates named, and had, under the compulsion of legal proceedings, accounted as administrator, &c. He further alleged that “ the defendant, Henry L. Davis, was, on the 10th day of August, 1881, duly appointed by the honorable surrogate’s court of Kings county, general guardian of your orator.” And that the defendant in his account as administrator de bonis non of complainant’s mother, filed in the surrogate’s court of Westchester county, New York, had stated that the defendant “ had paid over unto himself as general guardian of your orator on the 20th day of August, 1884, the sum of $5,080, with which sum he then and there charges himself, and then and there states that as general guardian of your orator he is prepared to account at the proper time and place to your orator.” The original bill then alleged that the defendant had not accounted as guardian; that the complainant had come to be of full age; that the defendant had by reason thereof become holder of the complainant’s estate simply as trustee for him, and was bound to pay over to him the residue thereof not lawfully disbursed; that when an accounting was about to be compelled by legal proceedings in New York, the defendant solicited and obtained the complainant to make a voluntary settlement, and by means of false accounts and statements fraudulently procured the complainant to accept a cheating settlement of the guardianship, and fraudulently induced him to give to the defendant a release as guardian, &e. And the complainant prayed that this settlement and release might be set aside; that the defendant might discover assets and evidences of investment, &c., and might account in this court.

This bill the defendant answered in part, and demurred as to the residue. He admitted the granting of letters of administration as stated in the bill, and in express terms answered' and admitted that.he was “on or about the 10th day of August, 1881, duly appointed by the surrogate’s court of Kings county (in the State of New York) general guardian of the complainant,” &c. He demurred to “ all that part of the said bill which seeks an accounting in this court from this defendant of .and concerning his said guardianship, and the setting aside and cancellation of the deed of release,” &c., and to the prayer for the cancellation of the release, and for discovery and accounting as guardian, alleging as cause of demurrer that “the complainant has not made or stated such a case as entitles him in this honorable court to the relief prayed,” '&c.

The demurrer came to a hearing before the chancellor, who filed an opinion on January 11th, 1897 (10 Dick. Ch. Rep. 37), sustaining it upon the ground that the bill did not sufficiently state the particulars wherein the complainant claimed the defendant had defrauded him. Leave was given to the complainant to amend his bill.

The complainant has amended his bill, setting out the circumstances of the fraudulent acts charged, and to the whole amended bill the defendant has now filed his plea, alleging that he had never been appointed guardian of the complainant in any court in New Jersey; that his only appointment as guardian was made by order of the surrogate’s court of the county of Kings, in the State of New York; that he had there qualified and given bond for the performance of his duties as guardian, and that all the assets which came to his hands as such guardian came to his hands in the State of New York, and he avers that this court has no jurisdiction over the subject-matter of this suit or to compel his accounting, and that such jurisdiction pertains and belongs only to the surrogate’s court of the county of Kings, in the State of New York, or such other court in the State of New York as may have concurrent jurisdiction in such matters.

The present hearing is upon the sufficiency of the defendant’s plea. The jurisdiction of .this court over the general subject-matter of accounts and the setting aside of releases fraudulently obtained is not challenged by the plea, but only its assumption of jurisdiction over the defendant touching the. questions here in dispute, because it is claimed that, having been appointed guardian in another state, he can only be called to account for his guardianship in the court which, in that state, has jurisdicdiction over such matters, and it is contended that the alleged fraudulent release recognizing the guardianship settlement is merely collateral to this main question.

The facts of the defendant’s appointment as guardian by the New York court and his receipt of assets there were, as above shown, set out in the original bill, to which he demurred. He was thus afforded the opportunity, had he desired to assert their efficacy to relieve him from discovery, accounting, &c., in this court, to have made an issue upon the point by setting up his present claim as one of the grounds of demurrer to the original bill. Instead of this he answered the original bill in this particular, admitting his appointment as guardian to have been made in a New York court, as alleged, and did not refer to the present contention as a ground of demurrer.

The amended bill and the original bill, as to the allegations of appointment of guardian by the New York court and receipt of assets there, are phrased in precisely the same words. The defendant now restates, by way of plea to the amended bill, facts which were already before the court in both the original and amended bills, and upon this bases his present defence that this court should not take jurisdiction over him touching this matter.

A defendant who has answered an allegation in a bill cannot restate it by way of plea and challenge the jurisdiction of the court over him to which he has thus already submitted. He may demur to one part of the bill, plead to another and answer a third (Story Eq. Pl. 647), but it is an essential requisite of a plea that it .shall be founded upon new matter not apparent in the bill, for if the matter is so apparent the defendant must demur. The plea (unless it is of a purely negative character, denying and thus putting in issue some facts alleged in this bill) must aver facts to which the plaintiff may reply, and cannot, in the nature of a demurrer, rest on facts stated in the bill. Story Eq. Pl. 660; Bicknell v. Gough, 3 Atk. 558. So where a plea set forth a decree of a court which was recited in the bill and brought no new matter upon the record it was overruled (Roberts v. Hartley, 1 Bro. Ch. C. 56), and in Billing, Assignee of Burkitt, v. Flight, 1 Madd. 130, where the objections set up by way of plea appeared on the face of the bill, demurrer was held to be the proper mode of defence and the plea was overruled.

"Whatever force the defence might have if effectually presented rests in the assertion of a personal privilege of the defendant to be called to account only in the jurisdiction where he was appointed. This he may waive by his own act or omission. If he had a right to be called to account only in New York, he must, by the course he has taken in answering in this case as to the facts set up in his plea, be deemed to have submitted himself to the jurisdiction of this court.

This position of the pleadings renders it unnecessary to determine the sufficiency of the matter set up by way of plea, that as guardian appointed in New York he can only there be called to account, or the replying argument of the complainant to the effect that the bill claims that the defendant as to the estate of his ward has, since the latter came of age, ceased to be guardian and holds merely as a naked trustee, clothed with no other authority over his late ward’s estate than mere custody, and liable to be called upon to account anywhere that the jurisdiction of any competent court may be obtained over him.

The plea under consideration does not state that the defendant is now a resident of New York, nor that the assets he received as guardian are now there, nor that any proceeding against him for an accounting is pending in New York. For all that appears by the plea, conceding it to be true, a complainant, formerly a ward, but who has come of age and resides in New Jersey, may be in dispute with the former guardian who was appointed by a New York court but resides in New Jersey, touching the accounting for his guardianship. The personal estate due to the former ward, though received in New York, may now all be within this state and all payable to the late ward, and he may have filed this bill as the only proceeding to compel an accounting. The parties may both be domiciled in New Jersey; the subject-matter of the controversy may be located here, and the right to delivery or payment of the whole of that subject-matter may actually be in the former ward who brings the suit.

Many decisions are referred to by the counsel for the defendant, touching the forum in which executors and administrators, or trustees under a will, may be called to account for personal estate; but the accounting of executors and administrators involves the interests of creditors of the decedent, and that of trustees under a will may require the construction of the will which the testator made in view of the law of his domicile. When such trusts are active, they are usually to be enforced in the state of the domicile of the decedent. They stand in a different position from an accounting by a guardian when the former ward has come of age, where the accounting is wholly between these two, and the entire balance of the property is deliverable or payable to tlie former ward. The suit is in personam against the guardian, and if jurisdiction over him has been obtained by service of process, decree may be enforced without difficulty. That the relation of the parties arose in a foreign state does not of itself deprive this court of jurisdiction. Rosenbaum v. Garret, 41 Atl. Rep. 252.

The plea in this case stands wholly upon the original appointment by a New York court and the receipt of assets there, and asserts as a defence that the former guardian can in such case be called to account for those assets' only in the state in which he was appointed. The sufficiency of such a defence seems to be quite doubtful, but in view of the course of pleading in this case its determination is not necessary.

I will advise an order that the plea be overruled, with costs.


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    Viola McCormick v. Louise Stephany et al.
    [Filed November 30th, 1898.]
    1. Where, in drawing a contract, an omission of a term intended to be inserted, is made by mistake, the omission may be set up as a defence in a suit for specific performance.
    2. But the utmost effect the proof of the mistake can have, is to require the court to consider the contract as if the omitted words had been inserted in their proper place.
    3. A covenant in a lease, not to use or permit the demised premises to be used for any other purpose than for a saloon, &e., is not broken by ceasing to use it for the purpose of a saloon, provided it is not used for any other purpose.
    4. An option to purchase demised premises, which is one of the clauses in a lease under seal, is not a unilateral contract, nor is it without consideration.
    5. Such an option is a conditional contract, which, when exercised in a manner showing performance of the conditions prescribed, may be enforced in equity.

      6. The residue of the term of an unexpired lease for years, is a chattel, and goes to the executors or administrators, and not to the heir.
    7. A privilege to renew, and an unexercised option to purchase, contained in a lease for years, are also chattel interests, and go primarily to the executor of the lessee, and afterwards to his legatee, and not to the heir.
    8. A bill to enforce a conveyance under the exercise of an option, after the death of thé proposed vendee, should be filed by the executor of his will or by his legatee, and if by the latter, should show the executor’s assent, &c.
    9. Under an agreement made by a married man that his lessee may, upon certain terms .named, buy the demised premises, this court will not, at the instance either of the lessee or his representative, decree a conveyance of the dower right of the lessor’s wife, whether inchoate or complete.
    On bill for injunction, &c., affidavits, Ac., and order to show cause, Ac.
    August Stephany was in his lifetime the owner of a saloon property in Atlantic City, known as the “ Extra Dry.” By a written lease under seal of both parties, dated June, 1897, he demised this property to one George McCormick, who entered into possession. There were in the lease, covenants not to assign, nor underlet, nor to use for any other purpose than a saloon and dwelling, Ac., with a further agreement in these words:
    “And it is further agreed by and between the above parties that in case the said party of the first part should find a purchaser for the said premises, then the said party of the second part shall have the option, during the continuance of this lease, to buy of the said party of the first part the said premises for the sum of twelve thousand dollars; and that in case the said party of the first part has found a purchaser for the said-premises, the said party of the second part should refuse to buy the said premises at the price above mentioned, then the said party of the second part promises and agrees, upon three months’ notice in writing, to quit and yield up the possession of the said premises to the said party of the first part on the first day of June next following the expiration of the said three months’ notice.”
    In October, 1897, McCormick, tbe lessor, died testate, making his wife, the complainant, sole devisee and legatee for life of his estate, with full power of disposition, and a limitation over to others upon his wife’s death. He further directed that upon his death the business that he was carrying on in Atlantic City should be discontinued and wound up by his executors. He appointed his wife and Mr. Stephany, executors. Shortly after Mr. McCormick’s death, Mr. Stephany, by his attorney, served a notice upon Mrs. McCormick claiming that the lease had become null and void, because, as he insisted, the direction in McCormick’s will to discontinue the business was a breach of the covenant not to use the premises for any other purpose than á saloon, &c., and, for this reason, Mr. Stephany demanded possession of the premises.
    The complainant, Mrs. McCormick, on the other hand, contends that Mr. Stephany, in a transaction looking to a sale of the premises, had “found a purchaser” in one Haines, under the terms of the option in the lease above quoted, and that this gave her a right to tender Mr. Stephany the $12,000 purchase-money and have him convey the premises to- her under the above-quoted terms made in the lease. She alleges that she did make such a tender, accompanied by a written notice, a copy whereof is annexed to her bill, in which she denied any breach of the lease, and notified Mr. Stephany that she exercised the option to purchase the property for $12,000, and states “that this sum will be paid upon execution and tender of deed with full covenants.” On May 18th, 1898, a like tender was made demanding a “ deed of conveyance with full covenants, free of all encumbrances.” These demands were refused upon the ground that the complainant was not entitled to any conveyance. In June, 1898, Mr. Stephany demanded payment of the rent, with notice to quit within three days, &c., and, for want of such payment, levied a distress warrant.
    The complainant then filed her bill in this court, seeking to restrain the prosecution of the collection of the rent and to specifically enforce the agreement of sale. Almost immediately upon the filing of the bill, Mr. Stephany died intestate, leaving him- surviving the defendants, his widow, Louise Stephany, and his children and heirs-at-law, Robert E. Stephany, William Stephany, Albert Stephany, Minnie and Ida Stephany, the last three of whom are minors. The widow, Louise Stephany, took out letters of administration upon the estate of the decedent. The complainant, in July, 1898, upon Mr. Stephany’s death, filed a new bill against the widow and heirs, tendering herself ready to pay the $12,000, and praying, answer from the widow and heirs-at-law without oath, and that the defendants may be decreed specifically to perform the agreement upon payment to them of the $12,000 purchase-money, and that meanwhile they may be restrained from proceeding with the distraint, or to interfere with the property or possession of the demised premises by the complainant. On filing the bill and affidavits annexed, an order to show cause was allowed why an injunction should not issue according to the prayer of the bill.
    On the coming in of the order, the defendants’ filed affidavits stating that Mr. Stephany, prior to making the above-quoted lease, had entered into a previous lease for the same premises, containing the following provisions:
    “And it is further agreed by and between the above parties that in case the said party of the first part should find a purchaser for the said premises, then the said party of the second part shall have the option, during the continuance of this lease, to buy of the said party of the first part the said premises for the sum of twelve thousand dollars; and that in case the said party of the second part, on receiving notice that the said party of the first part has found a purchaser for the said premises, should refuse to buy the said premises at the price above mentioned, then the said party of the second part promises and agrees, upon three months’ notice, to quit and yield up the possession of the said premises to the said party of the first part on the first day of June next following the expiration of the said three months’ notice,”
    and that looking to the making of the lease of June 1st, 1897, McCormick and Stephany had agreed that the same provision concerning the sale of the premises should be inserted in the lease of June 1st, 1897 ; that the previous lease was handed to a stenographer for the purpose of copying the option provision, and that in making the copy the stenographer mistakenly omitted from the new lease that line in the old one which is above given in italics; that the parties never in fact agreed for an option upon the terms stated in the lease of June 1st, 1897, if that option is to be construed as vesting in the lessee a right to buy the property at the price named in case the lessor should find a purchaser. The stenographer who wrote the lease testifies that he was instructed to insert the omitted words and by mistake left them out.
    The defendants’ affidavits further state that Mr. Stephany never sold or conveyed the demised premises to Haines or to anyone else, but on the contrary continued seized of them at the time of his death; that no notice was ever given the McCormicks by Stephany that he had found a purchaser according to the terms of the lease.
    The widow of Mr. Stephany also testified that she never made any agreement to convey; that she is unwilling to release her dower and refuses to do so, and that the lease and option were given without her knowledge or consent.

      Mr. Glarenee L. Gole, for the complainant.

      Mr. Robert E. Stephany and Mr. George A, Bourgeois, for the defendants.
   Grey, V. C.

This case is before me upon the coming in of the order to show cause whether an injunction should not issue restraining the defendants from enforcing their distraint for rent, and from interfering with the complainant’s possession of the demised premises and of the goods seized under the distraint. The complainant’s defence to the distraint is based solely upon her claim that by the terms of the lease she is entitled to exercise an option to purchase; that she has done this, and that the defendants, who hold the legal title, are bound to convey to her, and therefore may not equitably enforce the distraint for rent which came to be due since the demand made for a conveyance, for which she proffered herself ready to pay, or take any steps to interfere with her possession of the premises. The defendants deny that the complainant has any right to a conveyance either under the lease or otherwise. The complainant must therefore, in order to maintain her claim to the restraint she seeks, sustain her right to the conveyance demanded by her bill.

That there was a mistaken omission in the option clause of the lease is, I think, fully proven by the uncontradicted affidavits filed by the defendants, and among them of the typewriter who made the omission. This mistake was in the written expression of the contract, the proofs showing that it did not set forth the intent of the parties and also what that intent was. Such a mistake may be set up as a defence' in a suit for specific performance. Hawralty v. Warren, 3 C. E. Gr. 127. But the utmost effect the proof of the mistake can have is to require the-court to consider the contract as if the omitted words were inserted. If this clause be amended by putting in the omitted words, it does not, in the present attitude of the case, affect the complainant’s right of performance. The first part of the paragraph is an absolute agreement that if the lessor finds a purchaser for the premises the lessee shall have the option during the continuance of the lease to buy at the price named. Under this the complainant seeks to enforce a conveyance to herself. The succeeding clause, where the omission occurs, only becomes applicable in case, on notice, the lessee refuses to buy. No such circumstance has occurred, so that neither the mistake nor its correction affects the complainant’s right to relief, save that the omitted words may, when restored, throw some light on the meaning of the previous clause. As the proof of the mistake is undisputed, I shall consider the words as if restored.

It is objected by the defendants that this clause giving the privilege to demand the conveyance, is unilateral and without consideration. If this clause is considered separately it does appear to be unilateral and states no specific consideration. But it forms part of the lease which is signed by both parties, and is under their seals, which import a consideration. The later decisions appear to have established the rule that where an option to purchase is proffered in a lease of lands, there is a sufficient consideration, as the privilege must be treated as part of the lease, operating as an inducement to its acceptance by the lessee, and to the agreement to pay the rent reserved. In such cases specific performance will not be refused in equity because the agreement is unilateral or without consideration. Hawralty v. Warren, 3 C. E. Gr. 126; Page v. Martin, 1 Dick. Ch. Rep. 585; Ten Eyck v. Manning, 7 Dick. Ch. Rep. 50; Waters v. Bew, 7 Dick. Ch. Rep. 791.

The defendants call attention to a clause in the lease providing that if any default should be made in any covenant then the lease should be void. That one covenant was “ not to use or permit any part of said premises to be used for any other purpose than a saloon, restaurant or dwelling.” That on McCormick’s death the place was closed, and they claim that this was a breach making void the lease. There is no showing that the demised premises have been “ used for any other purpose than a saloon, restaurant or dwelling.” The covenant is to be construed according to its terms, which are clear — they prohibit a different, use, but they do not compel a continued use for the purpose named. The premises are still plainly occupied if not actually used as a saloon and restaurant This appears from the list of goods distrained for rent, annexed to the bill. The same misconception of this covenant appears in the defendants’ contention that the lease became void, because McCormick in his will directed that the business be discontinued. He had not covenanted to continue it, but only not to use the premises “for any other purpose.”

The defendants also contend that the option to purchase contained in the lease was limited to be exercised by McCormick in his lifetime, and that as he did not demand performance while living, his legatée or devisee cannot do so after his death.

It seems to be settled that the residue of the term of an unexpired lease for years goes to the executor or administrator of the lessee, and not to the heir. Doe v. Porter, 3 T. R. 16; James v. Dean, 15 Ves. 241; Wms. Extr. (9th Am. ed.) 818.

Lord Denman, in Rubery v. Stevens, 4 Barn. & Ad. 244, declared that an executor could not refuse the unexpired term of the lease of his deceased testator lessee. With the lease the right to its renewal contained in it goes to the executor. Wms. Ex. 818. So an unexercised option to purchase, incident to a lease, passes to the administrator or executor of the lessee. Wms. Ex. 809; Re Adams and Kensington Vestry, 24 Ch. Div. 206; S. C. affirmed on appeal, 27 Ch. Div. 394. The unexpired term for years, the privileges of renewal and of purchase are all chattel interests and not real estate. They go primarily to the executors, and afterwards to the legatee, and not to the heir.

In the lease in question there is no express demise to McCormick, his executors and administrators, either of the term, the privilege of renewal or the option, nor is there any express limitation to McCormick during his life ending the term and the privileges of renewal and purchase upon his death. In the absence of such express limitation defeating the term upon the death of the lessee, the unexpired term is an asset in the hands of the executor and administrator. An administrator of a deceased tenant recovered possession even where the tenancy was expressed to be from year to year so long as both parties pleased. Doe v. Porter, 3 T. R. 16.

In the case in hand, by the express terms of the will all the real and personal estate are given to the complainant. But however absolute may be the gift to her, if the thing given be an asset to be administered, the executor primarily takes it, and all rights touching it must, during the period of administration, be asserted by the executor as such, or it must appear that the executor assents to the possession of the legatee. The bill in this case was filed long before the expiration of the year of administration. In all the preliminary steps the complainant made her demand as legatee and devisee, and the bill appears to be filed not as executrix, but in assertion of the individual rights of the complainant as legatee of the term, and contains no allegation that the executrix had assented to the possession by the complainant of the residue of the term and its attendant privileges. This omission to define the complainant’s position was probably occasioned by the fact that the complainant happens to be at one time executrix and general legatee and devisee, nevertheless the defendants are entitled to know in what capacity or capacities the complainant asserts her rights. No objection has been made to the bill by pleading or otherwise because it is filed by a legatee, while the rights sought to be protected vested in the executrix and are not shown to’have passed out of her control. The bill does, however, show that substantially all of the debts have been paid, and therefore the situation of the estate is such that the executrix might properly assent to the possession of the legacy, and the omission of the complainant to appear as executrix, or to show assent to the possession of the complainant as general legatee, is readily curable by amendment.

As the complainant is not only executrix but also general legatee and devisee of Mr. McCormick, the proposed vendee, the vexatious questions which sometimes make difficulty between the executrix and legatee, and the heir or devisee, of such a vendee, as to whether or not the effect of the enforcement of the option is to work a conversion of the purchase-money payable by the vendee into real estate, and to give the purchased lands to the heir or devisee of the deceased contract vendee, are not raised, because the complainant, in one capacity or the other, represented the deceased vendee both as to his personalty and his realty.

The limit for the exercise of the option was not Mr. McCormick’s life, but during the continuance of the lease.

The demand for conveyance having been made upon Mr. Stephany in his lifetime, and that being the alleged exercise of the option on which conveyance is sought to be enforced, his administrator and also his heirs-at-law are properly made parties defendant.

There is another matter, however, which, in the present frame of the bill, stands in the way of the granting of the relief sought.

The bill makes defendants and calls for answer from Louise Stephany (the widow of the lessor) as widow and as administratrix of the deceased lessor, Stephany, and as guardian of his minor children, and also makes all of the children (except Eobert, who is alleged to have conveyed his interest to his mother) defendants as heirs-at-law. The prayer is that Louise Stephany, Louise Stephany, administratrix, Ac., and Louise Stephany, guardian, Ac., and also the ehildren may be decreed to convey, Ac. No suggestion is made that the widow’s dower is not to be affected by the conveyance sought to be compelled from her. The phrasing of the bill indicates a purpose to require a conveyance from Mrs. Stephany of all her interest, including that which he holds as widow, and nowhere is there any disclaimer of such a design, or an offer to accept a conveyance solely of the estate of which Mr. Stephany was seized at the time of making the contract, not including his wife’s dower right. Special decree is asked as against all of the defendants, including the widow, to the effect that the complainant is the legal owner of the property. One of the demands shown to have been made upon Mr. Stephany called for a “ deed with full covenants,” another for a deed of conveyance with full covenants free of all encumbrances.”

The case presented in this and several other incidents, stands very nearly upon the lines of Hawralty v. Warren, 3 C. E. Gr. 124, where the complainant required a marketable title, and was denied a decree for specific performance when it appeared that a wife refused, as does the widow in this case by her affidavit, to release her dower. The case cited is based upon the principle expounded by the court of errors in Young v. Paul, 2 Stock. 418, where that court, though decreeing performance by the husband with an indemnity against the wife’s inchoate right of dower, distinguished that case from one where the wife’s refusal to join in a conveyance which her husband had agreed should be made, was in good faith, and not the result of her husband’s interference. Hawralty v. Warren has been followed in Pinner v. Sharp, 8 C. E. Gr. 282; Reilly v. Smith, 10 C. E. Gr. 159.

In the case in hand nothing appears which bound Mrs. Stephany to convey her dower right. She declares she is unwilling to convey. No bad faith is imputed to her husband or to the heirs touching her refusal, yet the bill makes her defendant in every capacity in which she can be related to Mr. Stephany’s estate, and prays against her a decree for conveyance.

The rule seems to be settled that a husband will not be decreed to procure the release of dower of an' unwilling wife, and several of the cases hold that indemnity will not be awarded against the dower right where the refusal of the wife to release is not procured by the fraudulent contrivance of the husband. Peeler v. Levy, 11 C. E. Gr. 335, and cases there cited. Whatever force the rule had as applied to a husband acting in good faith during the life of his wife, affecting only her inchoate right, is certainly much increased when, after his death, her right has become complete and decree is sought not only against his heirs, but also directly against the widow.

In Hawralty v. Warren, 3 C. E. Gr. 128, upon final hearing, the bill was dismissed because it required the conveyance of a marketable title, and the defendant answered that he could not give such a title, as his wife refused to release her dower. In the present case the bill appears to attack the dower right of the widow directly, and to seek to compel its conveyance. In the present stage of this, cause the complainant may be willing to amend his bill in this particular, and, if this be done, the principal question in the case can be considered.

The conditions under which, by the terms of the lease, McCormick might purchase the premises are that if Stephany “should find a purchaser for said premises,” McCormick might, during the continuance of the lease, buy the property for $12,000.

Precisely what these words mean is warmly disputed between the parties, the complainant insisting that the circumstances justifying a demand for conveyance arose, when Stephany found some one who was willing to purchase. The defendants by their affidavits, deny any actual conveyance, and insist that only this can be a finding of a purchaser. The-affidavits annexed to the complainant’s bill, of Kumerer, Givens, Ketter, all definitely state that they heard Mr. Stephany in his lifetime declare that he had sold the property to one Haines. The testimony of these witnesses is uncontradicted.

1 do not think it is necessary, however, on this preliminaiy hearing to determine the construction of this phrase or the disputed facts as to the existence of the circumstances which may call the agreement into operation. Enough has, I think, been shown to justify the retention of the premises by the complainant, and her protection from distress for rent, until final hearing.

It is quite evident that the only satisfactory remedy the complainant can have, securing to her the benefits of the exercise of the privilege of purchase, is the specific performance of the agreement. This she can get only by maintaining the present situation and by securing a restraint upon the efforts of the defendants to enforce their legal rights, until the equities of the complainant shall be fully presented and determined on final hearing.

No serious injury will result to the defendants from this course, and so far as rents or purchase-money due to them may come into question, the restraint may be upon such terms that the defendants shall be fully protected.

It may be that the complainant may not be willing to pay the $12,000 purchase-money, and accept a title subject to the widow’s dower.

The complainant should amend her bill by definitely asserting her rights as executrix to exercise and enforce the option, or • if she claims as legatee of the term and option, she should show an assent as executrix to her possession. The bill should also disclaim any right to a decree affecting Mrs. Stephany’s right of dower, and such security should be given as will fully protect the defendants in the premises.

The question of amendment and security may be presented by the complainant upon notice to the defendants’ solicitor. Upon compliance with the terms indicated, I will advise a decree for an injunction restraining the enforcement of the distress and the dispossession of the complainant.


text:
    Ocean City Association v. Samuel Schurch.
    [Filed December 7th, 1898.]
    1. A preliminary injunction will not be granted to a grantor to restrain the violation of a covenant in a deed against doing business on the premises on Sunday, where it has been openly violated for several years by defendant grantee and by other grantees of the same grantor, including his tenants, under a like covenant, and where defendant has expended large sums in improving his property in reliance on the grantor’s apparent abandonment of the restriction.
    2. Laches of a covenantee in seeking to enjoin breaches of the covenant are not excused on the ground that the injunction sought is to prevent the doing of business on Sunday.
    3. An injunction will not be granted to restrain the breach of a covenant on the ground that the acts complained of are criminal.
    On bill, &c., answer, &c., and order to show cause.

      Mr. Charles E. Sheppard, for the complainant.

      Mr. Clarence L. Cole, for the defendant.
   Grey, V. C.

The complainant in this bill is a corporation of this state which has sold land at Ocean City to a person under whom the defendant has possession by a deed containing a restrictive covenant to the effect that “ no business of any kind whatever shall be carried on upon the said premises upon the Lord’s day,” &c. By the deeds passing the title by successive steps to the defendant’s landlord, this and other restrictions were notified to the grantees, and by them accepted. The bill alleges that the defendant, for pay, delivers bathing suits and permits the use of bath-houses on the demised property upon the Lord’s day in breach of the covenant, and prays that he may be enjoined from such breaches.

An order to show cause why a preliminary injunction should not issue, was made, and upon the coming in of the order the defendant answered the bill, substantially admitting the acts alleged, but averring that the deeds imposing the restriction referred to, contained many others which have for years been openly, persistently and numerously violated. As to the particular restriction prohibiting business on Sunday, the defendant states and proves that, for a number of years, he and others have conducted the bathing business upon that day upon lands formerly owned by complainant, and conveyed under like restrictioQS, and that the sale of ice cream and cigars, the butchering business and the hiring of boats have been conducted on Sunday at Ocean City on these lauds, without interference, notwithstanding the restrictions in the deed; that the complainant’s own tenants have, during the past summer and for years before that time, conducted on Sunday a bathing business immediately adjoining the defendant’s place; that defendant has spent $10,000 in building and enlarging his bathing establishment, and has for ten years carried on a Sunday bathing business, and that complainant has never before taken any legal action to enforce the restrictions against defendant, or other bath-house keepers, and if complainant is permitted to stop Sunday bathing now, it will deprive the defendant of all profit from his investment.

The complainant insists that this is matter in confession and avoidance and cannot be considered on this application for a preliminary injunction, and cites Carson v. Coleman, 3 Stock. 109, as sustaining that position. That decision declared that it is the practice of this court, in cases where an injunction has been allowed, not to dissolve it upon an answer setting up new matter not responsive to the bill. Numerous decisions recognize the rule. West Jersey Railroad Co. v. Thomas, 6 C. E. Gr. 205; Johnson v. Corey, 10 C. E. Gr. 315.

The defence here made to the allowance of a preliminary injunction presents, however, the additional question of the laches of the complainant in applying for this remedy. The covenant in question was restrictive of the use which the defendant might make of the property in his possession. Like covenants, imposed by the same grantor, appear to have restrained other grantees of the complainant, and the proof shows that for years there has been such' open, continued and notorious breaches of the restrictions by the defendant and other grantees, including complainant’s own tenants, that it is impossible to believe they escaped the complainant’s notice. No legal steps appear to have been taken to enforce these covenants against defendant and other bath-house keepers, and the defendant has spent large. sums of money in improving his property, relying upon the apparent bandonment of the restrictions by the complainant.

In cases of this character it is the duty of a covenantee, if he desires to invoke the aid of this court to restrain breaches, to make his application with due diligence, else, because of his laches, a restraint will be denied him. Roper v. Williams, 1 Turn. & R. 18, was a case where, under a general plan, a covenant restricting to a certain character of building was imposed upon the grantees of a common grantor. Repeated violations of the covenant were permitted for some four or five months, then a bill was filed against a later offending grantee, seeking to restrain him from building in disregard of the covenant. Lord Eldon declared that in cases of this nature very little is sufficient to show acquiescence, and courts of equity will not interfere unless the most active diligence has been exerted throughout the whole proceeding. In every case of this sort the party injured is bound to make immediate application to the court in the first instance, and cannot permit money to be expended by a grantee, even though he has notice of the covenant, and then apply for an injunction. See, also, Peek v. Matthews, 3 Eq. Cas. L. R. 514.

The complainant insists that it is entitled to special consideration in its effort to restrain a breach of this covenant, because it is seeking to enforce the observance of the religious obligations to keep the Sabbath holy, and its application is in aid of the prohibitions of the Vice and Immorality acts, against the doing of business on Sunday.

This court will aid by its remedies in the enforcement of all lawful covenants where the applicants appear to have an equitable right to their use. But it cannot excuse from the obligation of diligent application because the remedy sought, would if granted, enforce a religious duty, whether of a Christian or a Hebrew.

So far as the complainant seeks the aid of this court because the acts of the defendant are obnoxious to the Vice and Immorality acts and in the nature of a crime, there is the highest authority for the refusal to allow an injunction simply to prevent the commission of a crime. Lord Eldon, in Gee v. Pritchard, 2 Swanst. 413, declared that the court had no jurisdiction to prevent the commission of crimes. This does not deny the preventive jurisdiction of this court to protect property from a threatened act which, if completed, would give a right of action. Emperor of Austria v. Kossuth, 3 De G., F. & J. 240. But if the act to be restrained constitutes a crime only, and is not destructive of property nor of a character which will result in pecuniary damage, an injunction will not be allowed. It is quite obvious, therefore, that the supposed criminal phase of the acts of the defendant cannot be considered by this court as a ground for equitable relief. If the furnishing the means for a Sunday bath is the conducting of business obnoxious to the criminal law, that law affords remedies quite as immediate in their restraint upon the criminal as is the process of this court. This relief has always been at hand and may yet be invoked without liability to the reply that the prosecutor has by delay acquiesced in the wrongdoing.

It may be suggested that the affording the opportunity for a Sunday bath is within the exception in the Vice and Immorality acts, that it is a work of necessity or of charity, but this is a matter which must be left to the determination of another court.

The stated breaches of the covenant do not appear to inflict any pecuniary loss upon the complainant, nor has their public persistent character heretofore led the complainant to apply for a restraint. As a preliminary injunction might be the cause of great pecuniary loss to the defendant, I see no sufficient reason to change the situation, pending the suit, from that in which the complainant has for some years been content to leave it.

I will advise an order dismissing the order to show cause and the ad interim restraint.