author: Lippincott, J.

text:
    Rodman M. Price et al., appellants, v. Anna M. Forrest, administratrix of Samuel Forrest, deceased, et al., respondents.
    1. A statute of the United States which authorizes and directs the secretary of the treasury of the United States to adjust the accounts of a former purser in the navy, upon principles of equity and justice, and credit him with a sum of money paid over to and receipted for by his successor in office, although such payment was without governmental authority, and directing the payment of the sum that may be found due him, upon such adjustment, to him “or his heirs,” is not a statute which bestows a mere gratuity or bounty, but it is the restitution of property which once belonged to him as assets for the liquidation of his pecuniary obligations, and upon its restoration it cannot be held to have assumed any new character. The words “ or his heirs ” are simply words of succession and descriptive of his estate in the money found to be due him, and used in the statute in the sense of personal representatives, and intended to secure the moneys to his estate, in the event of his death before they were paid.
    2. The assignment of a claim against the United States, ordered by the court of chancery to be made by a debtor, or his representatives, if he be deceased, to a receiver in aid of proceedings in said court by a creditor, to obtain satisfaction of a judgment at law recovered against the debtor, is not prohibited by and is not a nullity under the provisions of section 3477 of the revised statutes of the United States.
    3. Such an assignment to the receiver or an assignment to him by operation of law in such proceedings, by virtue of his appointment as receiver, vesting in him, under the powers with which he is clothed, the right to take, receive, sue for and distribute according to law, and the orders of the court from which he derives his appointment, is an exception to the provisions of section 3477 of the revised statutes of the United States, requiring assignments of such claims, or powers of attorney to receive the same, to be acknowledged by the persons executing them, and to be certified by the officer taking such acknowledgments.
    4. The objects of section 3477 of the revised statutes of the United States are that the government may not be harassed by multiplying the number of persons with whom it has to deal, and that it might always know with whom it was dealing, until a contract is completed and an adjustment and settlement made; and none of these evils can happen upon an assignment for the benefit of the creditors of a claimant, either expressly ordered to be made by a court having jurisdiction or resulting by operation of law.
    5. The court of chancery has jurisdiction to determine the right of the distribution of such claim in payment and satisfaction of a judgment debt due from the claimant to his creditors, whenever the proper parties are before the court and the point decided be within the issues made by the pleadings.
    On appeal from the order of the chancellor, overruling the pleas of the appellants.
    The bill of complaint in this case is filed by Anna M. Forrest, administratrix of Samuel Forrest, deceased, and Charles Borcherling, receiver of the goods and chattels, rights, credits, property and effects of Rodman M. Price, deceased, against Rodman M. Price and others, the children of the said Rodman M. Price, deceased, as defendants. To this , bill of complaint-, two joint and several pleas have been filed, alike in form and substance, setting up in each precisely the same defence to. this suit in equity.
    This bill of complaint was filed July 5th, 1894.
    It states that it is filed, by permission of the court, as a ■ bill of revivor and original bill, in the nature of a supplement to a' bill which was filed on the 30th day of May, 1874, by the complainant, against Rodman M. Price, of Bergen county, in the State of New Jersey, now deceased, jointly with his wife, Matilda C. S. Price, and Francis Price. It is alleged that by such former bill of complaint it was set forth that on the 2d day of June, A. D. 1857, in the supreme court of New Jersey, the said Samuel Forrest, in his lifetime, recovered a judgment against Rodman M. Price, now deceased, for the sum of $17,000 debt, and $78.04 costs of action, and that upon said judgment a fieri facias was sued out and returned unpaid and unsatisfied; that on November 7th, 1860, the said Forrest died intestate, with the said judgment still remaining unpaid and unsatisfied; that on or about January 2d, 1874, administration of the goods and chattels, rights and credits which were- of the said Forrest, deceased, was granted to the said Anna M. Forrest by the ordinary of .the State of New Jersey; that shortly afterwards said judgment was revived by a writ of scire facias, and. that on or. about April 14th, 1874, another writ of fieri, facias was duly and regularly issued upon said revived judgment, which also was returned unpaid and unsatisfied, and that thereupon the former bill of complaint by said Anna M. Forrest, as administratrix aforesaid, was filed, alleging that the said Rodman -M. Price, since deceased, was possessed of certain moneys, property and things in action, either in his own possession or held in trust for him by the other defendants, and praying for the appointment of .a receiver of such property and things in action, and that the same be appropriated to the payment of the judgment aforesaid and costs thereof, therein set forth, with the appropriate prayer for injunction and process.
    The bill of complaint in this case further states that on or about December 4th, 1874, the defendants in said former bill filed their answer thereto, in which the recovery and force of the judgment against Rodman M. Price, at the suit of said Forrest,, was admitted, but denying, circumstantially, that the said Rod-man M. Price was possessed of any of the property as claimed in such bill of complaint, or that any property whatever was held by him, or in trust for him, by the other defendants, and charging that the said Price had no title to or interest in any of the property then standing in the names of the other defendants. The bill further states that after the filing of this answer the cause slept until August 9th, 1892, when the said Anna M. Forrest, administratrix aforesaid, and one of the complainants in this cause, filed a petition supplementary to the bill, reciting that several writs of fieri facias de bonis et terris had been issued upon the judgment aforesaid, all of which had been returned unsatisfied for want of any goods or lands whereof to make a levy out of which to make the debt and costs. By this petition, as it appears by the bill of complaint, it was charged that the sum of $45,000 was about to be paid to the said Price by the officers of the treasury of the United States, being the sum found to be due him by an accounting between the said Price and the government of the United States, and that such sum was to be paid by the delivery to Price, or his attorney, of a draft of the treasurer of the United States or some other negotiable security, made and issued by the financial officers of the government of the United States, payable to the order of said Price, and that said draft or other negotiable security was to be made, and the transaction closed upon the 15th of the then month of August. By this petition, it was charged that said Price, if he received such money, would put the same beyond the reach of his creditors, and that the same would not be available to satisfy said judgment, and she, therefore, prayed that an injunction might issue to prevent said Price from endorsing such drafts to anyone but the complainant in payment of said judgment, and that a receiver of such fund or draft or negotiable security be appointed, and that said Price be directed, immediately upon the receipt of the same by him, to endorse the same to said receiver, to the end that the amount thereof might be taken by such receiver as an officer of the court of chancery, to be disposed of according to law and the direction of that court. The bill further recites that upon such petition being filed on August 8th, 1892, an order to show cause on that day was made, why the prayer of the petition should not be granted, and why an injunction should not issue and a receiver be appointed according to the tenor of the prayer of said petition, and further directed that the said Price be restrained and enjoined from making any endorsement of any such draft, drafts or other negotiable security of the United States as was set forth in said petition. This order was' made returnable on September 12th, 1892.
    The bill of revivor further states that a certified copy of sucb order, under the seal of the court of chancery, was served om August 10th, 1892, on the said Price, yet on the 5th day of’ September, 1892, he received from the assistant treasurer of the' United States, four several drafts — one for the sum of $2,704.08, one for $13,500, one for $20,000, and a fourth for $9,000 — and that on different dates between the date of the reception by him of the drafts and the 3d day of October, 1892, he endorsed such drafts and collected the proceeds thereof and devoted the same to his own use, and that on the 3d day of October he filed an answer'to the petition, which, without admitting the endorsement of said drafts, alleged that the judgment of Forrest against him had been paid, and further, that there was a sum of money due him from the United States, voted to him or his’ heirs by congress, and that about $45,000 of it was paid or about to be paid, but that even if the said judgment was still unpaid and valid against him, yet this sum of money so voted to him was not amenable to the payment of such judgment, and could not be lawfully paid to any receiver or otherwise appropriated to that purpose.
    The bill further alleges that such proceedings were had upon the former bill and the petition aforesaid, that after the hearing on said order to show cause, on October 10th, 1892, Charles Borcherling was duly appointed receiver of the property and things in action belonging to, or due to, or held in trust for said Price at the time of the issuing of the executions on such judgment or at any time afterwards, and especially of the four drafts aforesaid, with authority to the receiver to possess, receive, and, in his own name, to sue for such property and things in action, and to hold such drafts subject to the further order of the court; that such receiver was required to give bonds, in the sum of $40,000, for the faithful performance of his duties, and that in and by said order the said Price was enjoined and restrained from intei> meddling with said receiver in regard to said drafts, and to put the same in the possession of the receiver, if the same were in the possession of said Price or under his control, provided that if said drafts, excepting the one for $13,500, should be delivered, with the endorsement of said Price, to the clerk of the court of chancery, on or before October 13th, then the order should be void. He was also enjoined and restrained from any endorsement or appropriation of said drafts otherwise than to said receiver or to the clerk as aforesaid. The receiver gave the bond required, and filed his official oath and entered upon his duties. The drafts were not so delivered by Price, whereby the order remained in full force. This order was served upon Price, with a written'demand that if the drafts or either of them were not in his physical possession, but were held by him or subject to his control, whether alone or jointly with any other person, that he give his consent and order in writing for their delivery to the receiver or to his order, and that he do all things necessary within his power to put the receiver in possession and control thereof. The copy of the order and the demand were served upon Price shortly after the order was made, elsewhere than in the State of New Jersey, which was the place of his abode and residence, for the reason that he was not to be found within that state until May 28th, 1894, when it was served upon him again. On the 16th day of January, 1893, an attachment was issued against Price for contempt of court, in disobeying the order of August 8th, 1892, and after due proceedings he was convicted of such contempt, and, by order dated May 18th, 1894, he was ordered to pay to the receiver the sum of over $30,000 of this fund aforesaid, together with a small fine, and that, upon failure to comply with such order, he be imprisoned until said order was performed.
    The bill further alleges that the amount of such drafts was a part of a certain debt of $76,000 or thereabouts awarded to the said Eodman M. Price by the officers of the treasury department of the United States, under an act of congress passed February 23d, 1891, and agreed to be paid to him in conformity with the directions contained in such act; and that the balance of said $76,000, after the drafts were delivered to Price, was to be retained to answer a counterclaim of the United States for a debt alleged to be due by Price to the United States, but after investigation such determination to retain such balance was reconsidered, and that the treasury department were about to pay unto the said Price the sum of $31,000, the balance of said fund, and that said Price and his agents were actively seeking to obtain payment of the same; and that pending the proceedings to compel the said Price to consent that the treasurer of the United States pay to said receiver such balance, the said Price, on the 8th day of June, 1894, departed this life intestate, and that no letters of administration have ever been granted to anyone upon his estate.
    The bill further alleges a further payment of $9,000 was made out of said fund to said Price, thus reducing the balance of said fund apparent on the books of the treasury department of the United States to the sum of about $22,000, and that demand had been made by the receiver upon the treasurer of the United States for the payment to him of said balance; that the treasurer neither consents nor refuses to make such payment, but is willing to abide the determination of some lawful tribunal of the rights of the receiver in the premises, and is willing to pay over the balance of such fund in accordance with such determination ; and it is believed by the complainants that on the decree of the court of chancery being made that the receiver is entitled to said balance, and notice thereof duly given, that the treasury department will respect such decree and pay over to the receiver the-balance of said fund.
    The bill further alleges that the children of said Price, as Ins' heirs-at-law, are endeavoring, upon their construction of the provisions of the act of 1891, to obtain the payment of this balance to them personally, on the ground that under the act of congress awarding this amount to Price or “his heirs,” the money belongs to them as his heirs-at-law and not as representatives of his estate, and that the receiver has no right in law thereto, and that they have authorized John C. Fay, of Washington City, by power of attorney, to apply for and receive such balance in their behalf, and that they are now pressing their claim as aforesaid with the secretary of the treasury for such payment. Administration ad prosequendum of the estate of Price has been granted to Allan L. McDermott, the clerk of the court of chancery, who is joined as a defendant simply for the purpose of this suit, to subject this fund to the payment of the debts of the intestate.
    Prayer is made that injunction issue against the defendants receiving any moneys of the officers of the treasury of the United States, that the defendants be decreed to pay to the receiver any part of said money which they respectively have received or hereafter may receive.
    The defendants have not answered this bill, but have filed two pleas thereto, one the joint and several plea of Madeline Price and Governeur Price, children of Rodman M. Price, deceased; the other is the joint and several plea of Francis Price, Rodman M. Price and Trenchard Price, other children of Rodman M. Price, deceased, and Matilda Price, his widow. These pleas are alike in form and substance. The act of congress, approved February 23d, 1891, is set out, and under it these defendants, as the heirs-at-law of Rodman M. Price, deceased, contend that they are entitled to the balance of this fund.
    The facts set out by the defendants in these pleas are, substantially, that the said Rodman M. Price had no real or personal estate or property at the time of his death, and that they have not had nor do they now have the possession, ownership or control of any personal estate from their said father, and that they have not received any moneys from the government of the United States through their said father or otherwise, under the act of congress of February 23d, 1891.

      The pleas set out the act of congress as follows, to wit:
    “An Act for the Belief of Bodman M. Price.
    “Be it enacted, by the senate and house of representatives of the United States of America in congress assembled, That the secretary of the treasury of the United States be and he is hereby authorized and directed to adjust upon principles of equity and justice the accounts of Bodman M. Price, late purser in the United States navy, and acting navy agent at San Francisco, California, crediting him with the sum paid over to and receipted for by his successor, A. M. Van Nostrand, acting purser, January fourteenth,- eighteen hundred and fifty, and pay to said Bodman M. Price, or his heirs, out of any money in the treasury not otherwise appropriated, any sum that may be found due to him upon such adjustment.
    “ Approved February 23d, 1891.”
    The pleas further set forth that on or about the 6th day of December, 1848, iu the early settlement and development of California, the said Rodman M. Price, deceased, was assigned to duty upon the Pacific coast at California, as purser and fiscal agent of the government of the United States, for the navy department of the United States, he then being a purser in the United States navy, and acting as such up to about December, 1849, or January, 1850, when he was detached by the government of the United States from such duty and ordered to transfer all public money and public property remaining in his hands, to his successor or to such other disbursing officer of the navy as might be designated by the commanding officer of the naval station of California, and immediately after transfer to report to the city of Washington for the purpose of settling his accounts. Afterwards, in the month of December, 1849, A. M. Van Nostraud, referred to in the said act of congress, became the successor of the said Rodman M. Price, deceased, in California aforesaid, as acting purser in the navy of the United States. Afterwards, on or about the 31st day of December, 1849, Commodore Jones, of the United States navy, commanding the United States squadron at San Francisco, California, on behalf of the government of the United States, directed Acting Purser Van Nostrand aforesaid to call on Purser R. M. Price aforesaid, and receive from him all books, papers, office furniture and funds and anything belonging to the purser’s department at San Francisco. In accordance therewith and with the instruction aforesaid to the said Purser. Price, he paid over on the 31st day of December, 1849, to the said Van Nostrand, acting purser of the United States navy at San Francisco station, in California, the sum of $45,000, being all the public moneys of the United States in the hands of said Purser Price. Afterward, on the 14th day of January, 1850, the said Rodman M. Price, out of his private moneys alone, and not of the government of the United States, advanced to the said Van Nostrand $75,000, and took his receipt therefor as follows :
    “San Fbancisco, January 14, 1850.

      “ Received from Rodman M. Price, purser U. S. navy, §75,000 for which I hold myself responsible to the United States treasury department.
    “§75,000. (Duplicate) A. M. Van Nostband,

      “Acting Purser”

    Which advance was without the approval and signature of said Commodore Jones, commanding officer of the said acting purser, A. M. Van Nostrand, although the said Rodman M. Price regarded the advance as an accommodation to and made for the benefit of the government of the United States, to be used by the said Van Nostrand, as acting purser of the United States navy, for the payment of the expenses of the navy at that station. The pleas fully exhibit the difficulties and embarrassments of the United States in obtaining funds for these purposes on the Pacific coast at this period of the history of California. The said A. M. Van Nostrand never returned or paid the said sum of money, or any part, thereof, to the said Rodman M. Price; neither did he account for this sum to the government of the United States.
    In the settlement of the accounts of the said Rodman M. Price he made claim on the treasury department for a credit or allowance for the said sum of $75,000, and has continued ever since to make such claim. In the year 1854 the then attorney-general of the United States, acting under instructions from the secretary of the navy to investigate the claim of said Rodman M. Price for the reimbursement or payment to him of said $75,000, gave an opinion that the government of the United States was not responsible for and could not be charged with the private fund paid by Eodman M. Price aforesaid to the said Van Nostrand, and which was so paid without the written approval of the said commanding officer, Commodore Jones. Annexed to the pleas is a copy of this opinion, with all other proceedings taken in this matter of the claim of the said Eodman M. Price against the government of the United States, by Avhich it is shown that the said sum of $75,000 was paid and advanced by the said Eodman M. Price in the belief that it would be an accommodation to the government in the condition of things that existed in the history of California at that time, and that the same was advanced and paid to his successor' in office, in good faith, for the use of the government of the United States and the United States navy, and that apart from the lawfulness of the claim it was one equitable and just to be allowed in the settlement of his accounts. The pleas further allege that in accordance with the said act of congress the secretary of the treasury of the United States, in August, 1892, adjusted these accounts of the said Eodman M. Price, as late purser in the United States navy and acting navy agent in San Francisco, California, in accordance with the act of 1891, and credited him with the said sum of $75,000 paid over as aforesaid and receipted for by his successor, A. M. Van Nostrand, acting purser, January 14th, 1850, leaving the sum of $76,204.08 found due him, and admits that he received four drafts from the government of the United States and the money therefor, amounting to $45,204.08; and that the balance thereof of $31,000, which was part of the said $75,000, after deducting any other sum actually paid to the said Eodman M. Price thereon, in his lifetime, by the government of the United States, the defendants in said pleas named claim that they are entitled to payment thereof to them under and by virtue of the said act of congress and the adjustment aforesaid.
    Argument was had before the chancellor on the bill and pleas, and on July 29th, 1895, by order of the chancellor, the pleas were overruled, with costs, from which order an appeal has been taken to this court.

      Mr. J. Flavel McGee, for the appellants.

      Mr. Gortlandt Parker, for the respondents.
   The opinion of the court was delivered by

Lippincott, J.

The first insistment of the defendants below, and appellants in this court, is that as heirs-at-law of Rodman M. Price, deceased, they are entitled, under the act of congress of 1891, to the balance of the moneys in the treasury of the United States, amounting to about $22,000, as admitted by the pleas in this suit; that congress, by this act, was bestowing a gratuity and was at liberty to select its beneficiaries, and that in so doing it directed certain specific persons to whom it should go, and that by the directions of this statute, in his lifetime, it was a gratuity to Price, and, in case of his death before payment, then with the same qualities the gift devolved upon the persons who, at the time of his death, were his heirs.

The facts set forth in the pleas, giving rise to the act of congress, effectually dispose of this insistment, and, in the consideration of the pleas, the act must be construed to some extent with reference to those facts, especially so far as there may exist in the statute any reference to them.

The facts in these pleas exhibit a great pertinacity on the part of Mr. Price, continued through a lifetime almost, in pressing his claim for money believed by him to be due from the government of the United States. They were moneys which, indisputably, were paid out for the benefit of the United States, so admitted upon all sides and in all proceedings, but which, because of the want of the technical approval of his superior officer before the advance was made by him, became unallowable in the adjustment and settlement of his accounts with the government, but the justice of which, as a due to him, was distinctly recognized in the act of congress directing its adjustment and payment, either in whole or in part, upon principles of equity and justice.

The act of congress directs the secretary of the treasury

■“to adjust, upon principles of equity and justice, the accounts of Eodman M. Price, late purser in the United States navy, and acting navy agent at San Francisco, crediting him with the sum paid over to and receipted for by his successor, January 14, 1850, and to pay to said Eodman M. Price or his heirs, out of any money in the treasury not otherwise appropriated, any sum that may he found due to him upon such adjustment.”

It was upon these “principles of equity and justice” that the secretary of the treasury of the United States adjusted his accounts as an officer of the United States having accounts with the government.

A reading of this statute at once indicates that congress was not dealing with one upon whom a mere gift for honorable services was to be conferred. It was dealing with a claim of one who had expended his private moneys for the benefit of the government in an emergency which demanded or justified this expenditure. Under this act, couched in the language in which it is, it cannot, as it seems to me, be contended that the government of the United States was conferring upon Price a bounty. It was restitution to him of moneys which he had advanced, and which he believed, at the time the advance was made, would be at once repaid, in the settlement of his accounts as a disbursing officer of the United States navy. I think that the act of 1891 was based upon the idea that the claim was a moral and equitable obligation, if not a legal one, on the part of the government, for money “found to be due him,” upon an adjustment of his accounts, according to.principles of “equity and justice,” and not upon any considerations that a gift or gratuity was being conferred upon him.

The learned chancellor, in his opinion in Forrest v. Price, 7 Rich. Ch. Rep. 16, 26, after reviewing the facts in that case, which are precisely the same in substance as those set forth in the pleas herein, says: “I do not find in this situation even the bounty of a grateful government partaking of the character of a pension or reward for a meritorious deed, but simply the restitution of property which had once belonged to the defendant as assets for the liquidation of his pecuniary obligations; and I fail to understand how, upon its restoration to the defendant, it can be held to assume a new character.” In that case this question was elaborately discussed by the chancellor, and his views of the nature of the obligation of the government of the United States, which was the foundation of this statute, can be fully approved.

So far as the devolution of this money is concerned, upon the facts set up in the pleas and the situation as there expressed, the statute of 1891 cannot well bear any other construction than that the payment was intended to benefit the estate of Price, and to be within the reach of his creditors. The, heirs of Price were in no sense personally intended to be the beneficiaries of the United States by way of gift or gratuity to them as such. The language of the act could only be fulfilled by a payment to Price. If it could be called a gift it occurred at the passage of the act, and the act in no sense intended that the heirs.of Price were to be included in the gratuity. But the reason of the act is such as to reveal the intention of congress to recognize an obligation on the párt of the government, and upon its ascertainment to pay it to Price or his representatives in the same manner as a debt is paid to anyone. In his accounts with the government upon such ascertainment, he was credited with the amount found to be due. The act in its terms speaks of the application of the principles of equity and justice in the adjustment of his accounts as “late purser of the United States navy and acting naval agent at San Francisco.” The meaning of this statute is to be gathered from the construction of the whole statute in view of the circumstances which led to its enactment and the object to be accomplished.

The chancellor, in his opinion in the case in 7 Dick. Ch. Rep. 16, to which reference has been made, says : “ But it affirmatively appears that the money of which the statute authorizes payment, though not a legal claim, is not a pure governmental bounty. The provision in the act for the relief of the defendant Price, that payment should be made to him or his heirs, has been urged as indicative of the legislative intention that the payment was not intended to benefit creditors. I do not so understand the act. The expression ‘or his heirs' was undoubtedly a provision against death before the day of payment, and there can be no substantial doubt that it is used in the sense of personal representatives, the thing dealt with being personalty, and appears in the act to secure the moneys to his estate in the event of his death before they are paid.”

The same holding was made by the comptroller of the United States in his written opinion on this question, of date of July 11th, 1894, in the determination that the word “or” in the words “or his heirs” should be construed to mean “and.” Whilst this is the fair interpretation of this statute, taken as a whole, yet it seems to me to be immaterial whether such meaning be given to the word “ or ” or not, for it must be that a fair and reasonable construction of this act, that the moneys were to be paid to Price in his lifetime, and after his death, to his heirs-at-law, and these words “ his heirs ” are simply words of succession and description of his estate in the money, and they are in this statute as representative of his estate only. Holcomb v. Lake, 1 Dutch. 605 ; S. C., 4 Zab. 688; Den v. English, 2 Harr. 280 ; Den v. Allaire, Spenc. 19 ; Engelfried v. Woelpart, 1 Yeates 41, 56 ; Winterfield v. Stauss, 24 Wis. 394.

These cases illustrate the construction of the word “ or” into “ and,” to give effect to the fair intention of the legislator. The many cases cited in 17 Am. & Eng. Encycl. L., tit. Or,” 218— 222, fully illustrate the instances of this construction.

It will be noticed that in the case of Emerson v. Hall, 13 Pet. 409, which is a case relied on by the defendants, the gift under the statute was, by the express terms of the act of congress, payable to the legal representative of Emerson and Lorraine, respectively, and the title of the act was “An act for the relief of Beverly Chew, and the heirs of William Emerson, deceased, and the heirs of Edward Lorraine, deceased.” 6 U. S. Stat. 464 The body of the act expressly directs that it shall be paid to their “legal representatives.” An examination of the case shows that the moneys could' never, under the law, be paid to Emerson and Lorraine, and that, as to their heirs, it was a gratuity conferred upon them by congress. The court in that case held that the act evinced a purpose of congress to make a gift to these heirs; that there was no debt of the government, and that the act was simply a bounty, and that under statute, the money had reached its proper destination when it was withheld from the creditors of Emerson; and this is founded in the fact that the institution by Emerson and Lorraine as officers of the United States navy of the proceedings of condemnation of the slave-trading vessel, and the slaves therein captured, was one purely voluntary on their part, and not at all in the line of their duty towards the government.

The advance of money by Price was a benefit to the government, and necessary to be made for the expenditures of the United States navy.

This fund and the part remaining unpaid, therefore, became a part of the general estate of Price, and thus was liable for his debts, to be distributed according to the laws of the State of New Jersey, the place of his domicil at the time of his death.

Another question has been made as to the jurisdiction of the court of chancery over the parties and the subject-matter involved. The pleas set up the claim of the defendants to this fund in preference to the creditors of Price, and the bill avers and the pleas admit that the defendants are endeavoring to secure payment of this fund to. them, and to hinder, delay and finally obstruct the complainants from recovering the same, to be appropriated to the payment of the debts of Price. It must be remembered that the suit is not against the United States nor directly against the fund, but it is a proceeding against the parties, and operating upon them to compel them to an assent to the proper distribution of the fund according to the laws of the domicil of the intestate, and to give effect to the assignment by operation of law to the receiver for this purpose. The decree of the court cannot operate upon the fund to any greater extent than may be permitted by the authorities of the United States treasury, but that furnishes no reason, if the proper parties are before the court, why the court should not decide upon the issues raised by the pleadings. Besides, the previous discussion and decision of the merits of this matter fully answer the insistments of the defendants. The defendants have applied to the officials of the treasury to have this money paid over to them as the heirs of Price. The comptroller of the treasury has refused this application, and awaits the decision of the court of chancery, which has assumed jurisdiction of the case as between the defendants and the complainants representing the judgment creditor of Price.

So far as this suit is concerned, as soon as the United States treasury passed to his credit, in the accounting, the moneys, the sum thereof became a debt due to him or a legal obligation in his favor, and which he had the legal right at once to reduce to his possession, and which possession he could not deny in a suit against him by the receiver. This money was held by Price without authority to controvert the proposition that, in law, he had assigned it to the receiver. If the money were in private hands instead of in the hands of the government, the receiver could bring suit for it, and neither Price nor his personal representatives could deny that it had been legally assigned to the receiver and had passed to him, and as to the balance of the $23,000 still remaining to his credit in the United States treasury, it is not the right of the defendants, as his personal representatives, to deny that it has been legally assigned to the receiver. The effect of the statute was to render this money to the estate of Price, and the defendants in suit here set up a distinct claim to it, and the court can treat them as if they were in its possession in order to compel them to assign it to the receiver, or to give effect to the assignment to him by operation of law. Harrison v. Maxwell, 15 Vr. 319; Wilkinson v. Rutherford, 20 [¶] Vr. 245; Williams v. Heard, 140 U. S. 529.

And the heirs-at-law, under their claim to these moneys, are just as much subject to the jurisdiction of this court as Price would have been in his lifetime. The discussion and the principles laid down, and the conclusion to which the learned chancellor arrived in the suit of Forrest v. Price, 7 Dick. Ch. Rep. 16, in these respects are distinctly approved.

These conclusions would seem to dispose of the case. But it may be well to expressly notice a further insistment by the defendants, and that is that the receiver appointed by the proceedings under the original bill can have no standing to take and receive these moneys; that any assignment of a claim made contrary to the provisions of section 3477 of the revised statutes of the United States, which requires the assignment to be clothed with certain formalities, is void. Whilst this is true as to assignments of claims between the parties made under that statute, the receiver appointed in this suit in equity takes title from Price or the defendants by operation of law, assisted by such actual assignment as may be decreed by the court, and of such assignments the statute to which reference is made is not prohibitive. The receiver is an officer, an assignee, receiving his power from a court of competent authority and jurisdiction, and the title of Price or the defendants is vested in him by operation of law, to take, have and possess the property and things in action of Price to satisfy the judgment and decrees of the court from which he derives his authority. It is entirely within the power of the court of chancery, in order to render effective its decree of appropriation of the fund to the payment of debts, to order the defendants to actually make and execute a formal assignment to fully accomplish the object of the decree.

These classes of assignments to claims against the government of the United States have been upheld and sustained whenever the questiou has been fairly before the court of claims or in the supreme court of the United States.

Thus, full effect is given as well to assignments ordered by courts of competent jurisdiction, as to those assignments which result by operation of law by reason of the appointment of a receiver for the purposes contemplated by the present suit.

Under the authorities a receiver appointed by a court of competent jurisdiction will be sustained in asserting the same title to choses in action which might, as against the government, be asserted by assignees in bankruptcy under deeds of general assignment.

It may be well, in the light of authority, to consider the effect of section 3477 of the revised statutes of the United States, so long as it is contended under it that the court is without any jurisdiction to compel the defendants to execute an assignment or to give effect to any assignment by operation of law.

The statute is entitled “An act to prevent fraud upon the treasurer of the United States,” approved February 26th, 1853 (10 U. S. Stat. 170), and is in the following language:

“All transfers and assignments made of any claim upon the United States, or any part or share thereof or interest therein, whether absolute or conditional, and whatever may be the consideration thereto, and all powers of attorney, orders or other authorities for receiving payment of any such claims or any part or share thereof, shall be absolutely null and void unless they are freely made and executed in the presence of at least two attesting witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof. Such transfers, assignments and powers of attorney must recite the warrant for payment and must be acknowledged by the person making it before an officer having authority to take acknowledgment of deeds, and shall be certified by the officer; and it must appear by the certificate that the officer, at the time of the acknowledgment, read and fully explained the transfer, assignment or warrant of attorney to the person acknowledging the same.”

Tbe true meaning and purpose of congress in this enactment was passed upon by Mr. Justice Woods in Hobbs v. McLean, 117 U. S. 576, who says that tbe object of the statute was “ that the government might not be harassed by multiplying the number of persons with whom it has to deal and might always know with whom it was dealing until the contract was completed and settlement made.”

In the case of United States v. Gillis, 95 U. S. 416, Mr. Justice Strong distinctly recognized that certain claims under this statute were assignable and might be sued in the court of claims in the name of the assignee, without undertaking to determine what claims might be assigned, and says: “ That there may be such claims is clearly stated in the act of 1853, and their devolutions of title, by force of law, without any act of parties or voluntary assignments, compelled by law, which may have been in view.”

In the case of Erwin v. United States, 97 U. S. 392, the court said : “ The act of congress of February 26th, 1853, to prevent frauds upon the treasury of the United States, which was the subject of consideration in the Gillis Case, applies only to cases of voluntary assignments of demands against the government, and does not embrace cases where there has been a transfer of title by operation of law. The passing of claims of heirs, devisees or assignees in bankruptcy is not within the evil at which the statute aimed, nor does the construction given by this court deny to such parties a standing in the court of claims.”

The supreme court of the United States has sustained partial payments made at the treasury to an assignee. McKnight v. United States, 98 U. S. 179.

It has been held that a general assignment made for the benefit of creditors, including all rights, credits, effects and property of every description, covered what might be due to the assignor under a contract with the government for carrying the mail.

In Goodman v. Niblack, 102 U. S. 556, Mr. Justice Miller, in view of the language of the opinion in Spofford v. Kirk, 97 U. S. 484, says: “ We held it did not include a transfer by operation of law, or in bankruptcy, and we said it did not include one by will. The obvious reason of this is that there can be no purpose in such cases to harass the government by multiplying the number of persons with whom it has to deal, nor any danger of enlisting improper influences in advocacy of the claim, and that the exigencies of the party who held it justified and required the transfer that was made. In what respect does the voluntary assignment for the benefit of his creditors, which is made by an insolvent debtor of all his effects, which must, if it be honest, include a claim against the government, differ from the assignment which is made in bankruptcy? There can here be no intent to bring improper means to bear in establishing the claim, and it is not perceived how the government can be .embarrassed by such an assignment. The claim is not specifically mentioned, and is obviously included only for the just and proper purpose of appropriating the whole of his effects to the payment of all his debts. We cannot believe that such a meritorious act as this comes within the evil which congress sought to suppress by the act of 1853.”

Assignments of moneys due from the treasury department to receivers appointed under supplementary proceedings for the benefit of a creditor, have been upheld by the court of claims. I think it may be said that the cases show that they have been uniformly sustained by that court as well as by the supreme court of the United States. Redfield, Receiver, v. United States, 27 Ct. of Cl. 393. In this latter case the plaintiff was a receiver,, appointed by the supreme court of the State of New York, city and county of New York. He also had the additional claim of being the assignee of all demands against the United States on the part of one Mitchell, the assignment being executed by Mitchell for the purpose of enabling the claimant to more effectually perform the duties of his receivership under his appointment by the supreme court of New York. Mr. Justice Weldon, delivering the opinion in the court .of claims, says: “ It may be that the personal assignment by Mitchell to claimant, it being for the indebtedness of the United States only, would not have the effect to transfer the claim to him, but his appointment as receiver under the order of the court has, in our opinion, that effect. It was held in the case of Erwin v. United States, 97 U S. 392, that the act of congress of February 26th, 1853, to prevent frauds upon the treasury of the United States, which was the subject of consideration in the Gillis Case, applies only to the voluntary assignment of demands against the government. It does not embrace cases where there has been a transfer of title by operation of law. The passing of claims to heirs and devisees, or assignees in bankruptcy, is not within the evils at which the statute aimed; nor does the construction given by this court deny to such parties a standing in the court of claims.”

The conclusion reached from these authorities is that the statute does not prohibit assignments in bankruptcy, nor general assignments for the benefit of creditors, nor assignments decreed by a court of competent jurisdiction, between parties, for the benefit of the creditors of the person or estate of the claimant; nor assignments by operation of law, as now recognized and enforced by the various courts of competent jurisdiction in the several states of the Union. Besides, this interpretation of the statute is entirely consonant and in furtherance of justice. The only case relied upon by defendants is that of St. Paul and Duluth Railroad Co. v. United States, 112 U. S. 733. An examination of the case will show that all that was decided in that case was that the voluntary transfer of a claim against the United States for compensation to a railroad company for carrying the mail, made to another company by way •of mortgage, does not fall within the exceptions of the statute, such as an assignment by operation of law or a voluntary assignment for the benefit of creditors. The court said in that case, in effect, that the fact that the mortgage was foreclosed by judicial action, did not constitute an assignment by operation of law. This case is no authority to sustain the point that the receiver of the property and things in action of a debtor, for appropriation to the payment of debts, deriving his authority from a court of competent jurisdiction, does not take, by virtue ■of an assignment by operation of law, a claim against the United States.

The conclusion reached is that the order of the chancellor, overruling the pleas, must be affirmed, with costs.

For affirmance — The Chief-Justice, Depue, Gummere, Lippincott, Ludlow, Magie, Van Syokel, Brown, Sims, Talman — 10.

For reversal — None.


source: Caselaw Access Project

author: Ludlow, J.

license: Public Domain

text:
    Samuel G. Stone, Anna Stone and John R. Jackson, appellants, v. Harry Newell and Charles S. Ridgeway, partners, respondents.
    When a party comes into the court of chancery to obtain satisfaction of a judgment, he must present himself under some head of equity jurisdiction; he must show that the debtor has made some fraudulent disposition of his property or that the case stands affected with some trust collusion or injustice against which it is the province of the court to give relief.

      On appeal from a decree advised by Vice-Chancellor Bird in Newell v. Stone. (Not reported.)

      Mr. Albert he Unger, for the appellants.

      Mr. Alfred Hugg, for the respondents.
   The opinion of the court was delivered by

Ludlow, J.

The bill in this cause was filed by Newell & Ridgeway, as judgment creditors of Samuel G. Stone, to annul a deed of land in Camden county, New Jersey, referred to in bill made by said debtor Stone, January 15th, 1894, and prior to said judgment, to John R. Jackson, alleging that said conveyance was made to hinder, delay and defraud the creditors of said Stone.

The case was heard on bill, answer and proofs before Vice-Chancellor Bird, who held the deed to be void as to the complainants and other judgment creditors of Stone, on the said grounds as stated in the bill, and advised decree accordingly.

The facts, as shown in the case before this court and which have been carefully considered, do not, in our judgment, sustain or warrant the conclusion of the learned vice-chancellor who heard and decided the cause.

In our opinion, the sale and conveyance of the premises referred to in the bill made by Stone and wife to Jackson, were fair and in good faith. The consideration which was paid to Stone therefor by Jackson ($10,000) was the full and fair value of the property. There is nothing in the case which satisfactorily indicates that the defendant Stone made said sale or deed with any fraudulent intent or purpose as charged in the bill; and there is no evidence, and nothing from which any reasonable inference can be drawn, that if any such fraudulent intent or purpose did exist in the mind of Stone, in the said transaction, that the defendant Jackson had, or could be chargeable with, any knowledge of or participation in any such intent or purpose.

The decree of the court of chancery should be reversed.

For reversal — The Chief-Justice, Garrison, Gummere, Lippincott, Ludlow, Mague, Van Syokel, Bogert, Brown, Sims, Smith, Talman — 12.

For affirmance — None.


author: Barkalow, J. Dixon, J.

text:
    Benjamin Middleton, appellant, v. Ellen J. Middleton, respondent.
    1. An act permitting a limited divorce for adultery or desertion, attended by special consequences with regard to property rights, on the application of a person holding conscientious scruples against absolute divorce, and not otherwise, is contrary to the spirit of the constitution of this state and of the United States.
    2. A classification defined only by inquiry into the private opinions of an offended party is not such as the principles of constitutional construction will sustain.
    On appeal from a decree advised by Vice-Chancellor Pitney, who delivered the following conclusions:
    The husband, the complainant, sues his wife, the defendant, for a divorce from the bonds of matrimony, on the ground of desertion by her for the statutory period.
    By her answer she admits the desertion and justifies it on the ground of extreme cruelty, and, by her cross-bill, asks for a decree of divorce from bed and board, with a provision for her separate support and maintenance on the same ground.
    The cause was tried upon this issue, viz., cruelty, until near its close, all parties being apparently ignorant of the act of March 4th, 1891 (P. L. of 1891 p. 76), which provides that a party who has conscientious scruples against applying for a divorce from the bonds of matrimony may have the relief of divorce from bed and board for the cause of adultery.

      After the issue above stated had been tried, the defendant applied for and obtained leave to amend her cross-bill by inserting an allegation of adultery.
    The answer and cross-bill, as originally framed, contained incidental charges of adultery by the complainant with a woman named Spothelfer, and it was frankly admitted by the complainant, in his answer and during the hearing, that he had maintained illicit relations with this woman during the greater part of the period that he was living with the defendant as his wife, and that he had had two children by her. The amendment allowed alleges adulterous intercourse with a Mrs. Gilbert after the defendant had finally left the complainant, which was in the fall of the year 1890.
    This state of the pleadings resulted in the following issues being tried:

      First. Did the complainant treat the defendant with such extreme cruelty as justified her in leaving him in the fall of 1890, and entitle her to a separate maintenance?

      Second. Had the complainant been guilty of adultery with the woman Spothelfer, which was not condoned by his wife by voluntary connubial intercourse?

      Third. Did he have adulterous intercourse with Mrs. Gilbert ?
    The vice-chancellor, after discussing the evidence, found in favor of the complainant in the cross-bill on all these issues. It seems that the constitutionality of the act of 1891, above referred to, was not raised or in any way discussed in the court below.
    Thereupon, a decree was made, which adjudged as follows:
    “ That the complainant’s bill be and the same is hereby dismissed, and the said chancellor, by virtue of the power and authority of this court and of the statute in such case made and provided, doth hereby further order, adjudge and decree that the said complainant and defendant be divorced from bed and board forever; provided, however, that the said parties may, at any time hereafter, by their joint petition, apply to this court to have this decree modified or discharged.
    “And it is further ordered, adjudged and decreed that the said complainant, Benjamin Middleton, forfeit all right to curtesy and administration of or participation. in the property or estate of the said defendant, Ellen J. Middleton.
    “And it is further ordered, adjudged and decreed that the said complainant pay to the said defendant the sum of §7 per week, at the termination of each and every week, from the date of this decree, for her support and maintenance.
    “And it is further ordered, adjudged and decreed that this decree shall, from the date thereof, be a lien upon the personal and real estate of said complainant in the State of New Jersey, and that a copy thereof shall be forthwith served upon the said complainant or his solicitor, and that either party be at liberty to apply upon a future change of circumstances in the parties, or either of them, for such variation or modification of this order or decree touching the said allowance for alimony and maintenance, as such future circumstances may dictate to be just and equitable.”
    From that decree the complainant has taken the appeal now before this court. This appeal has been twice argued here, the second time by order of the court upon the question of the constitutionality of the act of the legislature referred to in the vice-chancellor’s conclusions.

      Mr. John J. Crandall, for the appellant.

      Mr. Samuel K. Robbins, for the respondent.
   The opinion of the court was delivered by

Barkalow, J.

The principal and governing question in this case is the constitutionality of the act of March 4th, 1891, which provides that

“ for desertion, adultery or extreme cruelty in either of the parties, the court of chancery may decree a divorce from bed and board forever thereafter, or in the case of extreme cruelty for a limited time, as shall seem just and reasonable ; but in every such case, except for extreme cruelty, the party applying shall prove that he or she has conscientious scruples against applying for a divorce from the bond of matrimony; when such proof has been made, the court, in case it shall deem it just to do so, may also decree that the guilty party shall forfeit all right to dower, curtesy and administration of or participation in the property or estate of the party in whose favor the decree is entered.”

The wisdom of this enactment is not a question for the court. The legality of it is all that we are to determiné.

In this state both parties in the case of a divorce from the bond of matrimony may marry again; in the case of a limited divorce neither can.

The parties to a marriage contract, whoever they may be and whatever their opinions or beliefs, have, in all cases, until the passage of the law under consideration, incurred the same obligations and acquired the same rights.

The legislature may prescribe those rights and obligations, but it must do so within the limits fixed by the constitution of this state and of the United States; and those limits are to be ascertained by reference to the language of those instruments and to the spirit indicated by their expressions.

It cannot be denied that the legislature has power to pass an act giving to all petitioners for divorce the right to apply for an absolute or a limited divorce as each may elect; for such an act would operate equally upon all persons and would impose no special consequence and confer no exclusive privilege upon any.

The act of 1891 is, however, not of this character, in thát it does confer upon certain petitioners rights and impose upon certain offenders consequences not shared by all and which are determined not by the character of the offence, but by the opinions of the injured party.

While it is not declared that the constitution of this state, in terms, prohibits such legislation, it seems clear that this law is contrary to the whole spirit of that instrument.

It is therein provided that “no person shall be denied the enjoyment of any civil right merely on account of his religious principles,” and surely the spirit of that provision cannot permit the religious or moral scruples of another person to deny to an offender, however culpable, the right to remarry after his offence, by reserving for him a form of divorce not applicable to other wrongdoers of the same kind, and one, too, which carries with it a special possibility in relation to property.

The constitution of the United States forbids any state to “ deny to any persou within its jurisdiction the equal protection of the laws,” and it certainly seems to be a true construction of that prohibition to hold that the laws which are operative should be laws which impress -themselves equally upon all without regard to the individual opinions of any.

Accepted authorities, in treating of constitutional limitations, have laid it down that

a statute would not be constitutional * * * which would select individuals from a class * * * and subject them to peculiar rules or impose upon them special obligations or burdens from which others in the same class are exempt.” Cooley Const. Lhm. (5th ed.) S91,

and the case of Ho Ah Kow v. Nunan, 5 Sawy. 552, 562, sustains this doctrine.

The law under consideration selects individuals from a class of married offenders and subjects them to “ peculiar rules ” and imposes upon them “special burdens.” It singles out those whose consorts happen to hold certain scruples, subjects them to a peculiar rule of accountability and imposes upon them consequences from which all other equal offenders are free.

Where a different result is provided for dereliction on the part of one person from that which is attached to the same dereliction on the part of another, there is a discrimination applied to that offender which is contrary to the spirit of the constitution of this state and of the United States.

Such discrimination can only, if at all, escape from that position of repugnance, by being made to apply to a class so large, so consciously entered into and so certainly defined that the classification is either originally patent or deliberately accepted by the members of it.

A class which is only to be ascertained by inquiry into the private opinions of another than the person operated upon by the discrimination, does not seem to be such as the principles of constitutional construction can approve.

A law which imposes upon one person a kind of divorce which for the same offence it cannot apply to another, because the consort of the former holds certain opinions which the consort of the latter does not, is a law which does not classify in conformity with the requirements just enumerated; and the fact that the person who suffers from such discrimination is an offender does not change the character of such legislation nor justify an infraction of constitutional principles.

The classifications which have been sustained by the courts of this state, in the interpretation of the laws concerning taxes, have been defined by political or municipal lines of boundary or population, and not by the existence of opinions or beliefs.

The law of this state which permits an affirmation instead of an oath acts only upon the person himself who holds the scruple provided for, and is matter of indifference to all others, since the conscience of the one who affirms is bound.

The Sunday laws constitute no precedent contradictory to the views here expressed, for they operate upon all alike.

No law other than this under consideration appears upon our statute book which allows an individual to be judicially dealt with in conformity to the private opinions of another individual.

Upon all of these considerations, we are. of opinion that the act in question is unconstitutional.

The decree below should be reversed so far as it decrees forfeiture of curtesy and of right to administration of or participation in the property of the respondent, as authorized by the act of 1891; and should be affirmed so far as it allows a limited divorce for extreme cruelty under the general laws concerning divorce. Rev. p. 315 % 5.

Dixon, J.

The husband filed a bill in the court of chancery, praying a divorce a vineulo, because of desertion by his wife. The wife answered, denying the desertion, and, by way of cross-bill, she charged her husband with extreme cruelty, and for that cause prayed a divorce a mensa et thoro, with alimony. Subsequently she amended her cross-bill by adding a charge of adultery, but she did not alter her prayer. On trial before a vice-chancellor, he found that the wife was not guilty of desertion, and that the husband was guilty both of extreme cruelty and of adultery, and thereupon a decree was made that the parties be divorced a mensa et thoro forever, that the wife should have alimony, and that the husband should, under the act of March 4th, 1891 (Gen. Stat. p. 1274), forfeit his right of curtesy.

I agree with the vice-chancellor that the testimony proves the extreme cruelty of the husband and does not prove desertion by the wife, and therefore think the decree for divorce and alimony is right. The decree for forfeiture of curtesy cannot, I think, be supported, for the reason that it is not embraced within the prayer of the cross-bill. It is, therefore, in my judgment, unnecessary to consider the evidence of adultery or to pass upon the constitutionality of the act of March 4th, 1891, for whatever conclusion I might reach on those matters, my determination as to this decree must remain the same. Hence, I decline to vote upon the constitutional question.

At the request of three members of the court, the vote was taken separately on these questions, viz.:

1. Is the act entitled “A supplement to an act entitled ‘An act concerning divorces’ (Revision), approved March 27th, 1874,” which supplement was approved March 4th, 1891 (Gen. Stat. p. 1274), unconstitutional?

Affirmative — Depue, Lippincott, Ludlow, Magie, Van Syckel, Barkalow, Bogert, Nixon — 8.

Negative — Gummere, Hendrickson — 2.

2. Shall the decree, so far as it grants a divorce from bed and board forever, and alimony, be reversed ?

For affirmance — Depue, Dixon, Gummere, Lippincott, Ludlow, Magie, Van Syckel, Barkalow, Bogert, Hendrickson, Nixon — 11.

For reversal — None.

3. Shall the decree, so far as it decrees that the appellant shall forfeit all rights to curtesy and administration of or participation in the property or estate of the respondent, be reversed ?

The vote being on the question of affirmance or reversal of that part of the decree — ■

For reversal — Depue, Dixon, Lippincott, Ludlow, Magie, Yan Syckel, Bogert, Dayton, Hendrickson, Nixon — 10.

For affirmance — Gummere—1.


author: Per Curiam.

text:
    Thomas F. Potter et al., appellants, v. Elizabeth Ashhurst et al., respondents.
    On appeal from a decree advised by Yice-Chancellor Emery, whose opinion is reported in Ashhurst v. Potter, 8 Dick. Ch. Pep. 608.

      Mr. S. Meredith Dickinson and Mr. A. T. Freedley (of the Philadelphia bar), for the appellants.

      Mr. William M. Laming, for Elizabeth Ashhurst.

      Mr. Charles F. Gummere and Mr. Francis Pawle (of the Philadelphia bar), for William H. Potter and others.
   Per Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Magie, Yan Syckel, Barkalow, Bogert, Nixon — 12.

For reversal — None.


text:
    Ellen Currie, surviving executrix, appellant, v. The Lehigh Valley Terminal Railway Company, respondent.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in Lehigh Valley Terminal Raihoay Co. v. Came, 9 JDiolc. Ch. Rep. 84-

      Mr. William I). Edwards, for the appellant.

      Mr. Charles L. Corbin, for the respondent.
   Per Curiam.

Decree affirmed, for the reason^ given in the court of chancery.

For affirmance — The Chief-Justice, Depue, Dixon, Garrison,' Gummere, Lippincott, Ludlow, Magie, Tan Syckel, Barkalow, Bogert, Nixon — 12.

For reversal — None.


text:
    Emma B. Hertz, executrix of Isaac Hertz, deceased, and The Newark Bark Company, appellants, v. Martha Carr et al., respondents.
    On appeal from a decree advised by Vice-Chancellor Reed, whose opinion is reported in Carr v. Hertz, 9 Rich. Ch. Rep. 127.

      Mr. Chandler W. Rilcer, for the appellants.

      Mr. James E. Howell, for the respondents.
   Per Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Dixon, Garrison, Lippincott, Ludlow, Magie, Van Syckel, Barkalow, Bogeet, Dayton, Hendrickson. Nixon — 12.

For reversal — None.


text:
    Edward A. Miller et al., appellants, v. James A. Bannister, respondent.
    On appeal from a decree advised by Vice-Chancellor Reed, whose opinion is reported in Bannister v. Miller, 9 JDieh. Ch. Rep. 121.

      Mr. Frederic W. Stevens, for the appellants.

      Mr. Robert H. McCarter, for the respondent.
   Per Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Magie, Van Syckel, Barkalow, Bogert, Dayton, Hendrickson, Nixon — 14.

For reversal — None.


author: Hendrickson, J.

text:
    Patrick Coyne et ux. et al., appellants, v. Marcus Sayre, respondent.
    1. In an action by creditor’s bill to subject lands standing in the name of the wife to a judgment.obtained against her husband when he failed in business about eighteen years before, on the ground that the lands were paid for partly by moneys derived from the profits of a business carried on by the husband and a son as partners, the complainant, to establish his cause, relied mainly upon the testimony of the husband, wife and son, supplemented by some contracts of the firm for work. They testified that after the husband’s failure he worked with another in partnership and later with his eldest son, who is a minor, and that upon the son becoming of age, his mother, with the aid of money from her brother, entered into the partnership in question with the son, without any change in the partnership named, the father retiring and working for the firm for wages. The written contracts produced were signed in the firm name and recited that the firm was composed of the father and son. The court below, relying largely upon the written contracts, determined that the father was the partner throughout, and sustained the bill. — Held, on appeal, that as the written contracts were not brought to the knowledge of the wife in any way, they were as to her res inter alios acta, and were erroneously admitted in evidence against.her; held, also, that the burden of proof rests upon the creditor who assails a transfer for fraud, and that with these contracts eliminated from the evidence, the respondent failed to establish his case by a preponderance of proof.
    2. It also appeared in the cause that the wife, in a few years after her husband’s failure, purchased a lot and erected thereon a dwelling-house, paying for the same partly by money raised thereon by mortgage and partly by her separate earnings and the work and earnings of her three minor sons, and that the husband contributed thereto by his own work and earnings as a journeyman. It further appeared that the wife placed her deed promptly upon record and occupied the house with her family for about twelve years, when she made sale of this property and used the proceeds thereof, after satisfying her mortgage, in part payment for the properties attacked by the respondent’s bill, during which time, a period of fifteen years, the judgment creditor had not challenged her exclusive right to said house and lot and the proceeds of the sale thereof until the filing of this bill, although he had lived during this period in the same city where the wife resided, and knew or ought to have known of the purchase and how the consideration thereof was paid’. — Held, on the appeal, that the wife’s appropriation to the purchase and improvement of her lot, of the work and earnings of her minor children with the husband’s consent, and of the labor and services of the husband, so long as it. did not appear that the latter were beyond the amount necessary for the reasonable support of his family, was not fraudulent as against creditors; held, also, that even if the proceeds of this sale or part thereof would have been within the reach of a diligent creditor, still respondent’s claim thereto would fail by reason of laches.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in Sayre v. Coyne, 33 Atl. Rep. 300.

      Messrs. Colie & Swayze, for the appellants.

      Mr. Robert Ii. McCarter and Mr. Frederick T. Johnson, for the respondent.
   The opinion of the court was delivered by

Hendrickson, J.

This bill was filed by the respondent, a judgment creditor of Patrick Coyne, one of the appellants, seeking to charge therewith two certain houses and lots, situate respectively upon Day and Garfield streets, in the city of Orange, in this state, the title to which stood in the name of one of the appellants, Mary A. Coyne, wife of the judgment debtor, upon the grounds as alleged and charged in the bill that the lands were purchased and the buildings erected thereon with the money of the judgment debtor, subsequent to the recovery of the judgment and while it was still unsatisfied, and that the latter procured said lands to be conveyed to his said wife for the purpose of concealing his said property and defrauding the respondent and preventing his recovery of his said judgment. The joint and several answer of Patrick Coyne and Mary A. Coyne, which were called for in the bill to be made without oath, deny the charges of said bill and declare that the consideration money for the purchase of said lots and the money expended upon the buildings proceeded not from the judgment debtor, but from the personal resources and moneys of the wife.

Under the issue thus made the burden of proof was upon the respondent not only to establish the charges and allegations of his bill, but to establish every circumstance relied upon to support the same.

The evidence offered by the respondent in support of his case, in addition to the proof of his judgment, consisted chiefly of the testimony of Charles F. Coyne, a son of the debtor, and the testimony of said Charles F., Patrick and Mrs. Coyne, taken before a supreme court commissioner upon an examination of the judgment debtor by supplementary proceedings under the Execution act, and certain building contracts on file in the clerk’s office of Essex county.

The evidence above submitted established the following facts, which were not disputed:

Patrick Coyne was a mason by trade, residing in the city of Orange, and took contracts for buildings, and was the owner of some property upon which the respondent held a mortgage. In addition to the mortgage the respondent, on October 9th, 1876, recovered in the supreme court of this state the judgment above named, for $610.84, against the said Patrick Coyne, and levied the same on his said property. Foreclosure proceedings followed and the property was sold by the sheriff, but nothing was realized out of the sale upon the judgment.

The bill filed insists and charges that the moneys which went into the houses and lots above named, the title to which is in Mrs. Coyne, were derived either wholly or mainly from the profits of P. Coyne & Company, a firm of masons composed, as it alleges, of the said Patrick Coyne and his son, Charles F. Coyne, and the learned vice-chancellor, in advising the decree in favor of the respondent, from which this appeal is taken, bases his action upon finding these charges of the bill to be true. His words are: “ So that I conclude that the proofs show satisfactorily enough that both of these properties, so far as they were paid for, were paid for with the earnings of the firm of P. Coyne & Company, of which one-half belonged to Patrick Coyne.”

It is insisted on behalf of the appellant Mrs. Coyne that the proofs do not sustain this conclusion, and that the building contracts, which are largely relied on by the learned vice-chancellor to support his conclusions, and which were objected to, were not legal evidence as against her. We are therefore required to review the facts bearing upon the points in controversy.

It appears that the firm of P. Coyne & Company had no existence whatever, and that Patrick Coyne was not a partner with anyone, at or before the time of the recovery of the respondent’s judgment. Upon this point the pleadings and proofs all agree, although, through some inadvertence, the syllabus of the vice-chancellor’s opinion assumes the contrary to be the fact.

The debt upon which the judgment was founded was the individual indebtedness of Patrick Coyne, contracted long before the purchase of the properties in question.

The Day street property above named was conveyed to Mary A. Coyne by deed dated March 19th, 1887, the consideration being $1,050, of which $550 was paid in cash, the balance remaining on mortgage. A dwelling was afterwards erected on this lot at an expense of about $3,000.

In the winter of 1891 a small lot was added to the Day street property, at an expense of $450, which was paid in cash. The Garfield street lot was conveyed to Mary A. Coyne, January 28th, 1891, at a consideration of $625, which was paid in cash. A dwelling was also erected on this lot at an expense of about $3,000. Add to the estimated cost of the houses the cost of the lots, and we find the properties in 1894 represented, all told, an expenditure of about $7,675. Mrs. Coyne insisted that a large part of this money was given or loaned to her, in different sums, by her brother, James Fallon, a Brooklyn plumber, and that he also advanced moneys to her to aid her in the business of P. Coyne & Company, in which she claims to have become a partner with her son, Charles F. Coyne, upon his coming of age in 1882, and in this her brother confirmed her. The learned vice-chancellor, while not giving full credit to all their declarations as to these moneys claimed to be loaned to his sister by Mr. Fallon, evidently thought that some part of said moneys had been so advanced, as the following language in the opinion seems to indicate: “The judgment, principal and interest in this case, will amount to less than $1,500, and the property,is of ample value to pay that sum, and also all that I am able to believe can be honestly due James Fallon on his mortgages.”

The evidence of the respondent, aside from some building contracts offered in evidence, shows that Patrick Coyne, after his failure in business in 1876, worked at his trade in Orange for a short time, and later entered into partnership with one Beck, under the firm name of P. Coyne & Company. Soon afterwards, it does not appear how soon, Beck died, and thereafter Patrick Coyne took some contracts for buildings in the name of P. Coyne & Company, until his eldest son, Charles F. Coyne, came of age in 1882, when it seems the son became a partner in the business; whether with his father, Patrick Coyne, or with his mother, Mary A. Coyne, is the principal matter in dispute in this case and upon which it largely turns.

Before taking up that question in detail it will be well to refer to another matter which was developed by the answer of Mary A. Coyne and her husband and by their evidence at the hearing, and that is this: Shortly after her husband’s failure, Mrs. Coyne contracted with one Elias M. Condit for the purchase of a lot of ground on Lakeside avenue, in said city of Orange, and in pursuance of that contract, said Condit and wife, by deed dated February 19th, 1878, and recorded on June 17th following, in the Essex register’s office, for a consideration of $500, conveyed said Lakeside avenue lot to Mary A. Coyne. Upon this lot a dwelling-house was erected soon after, and the Coyne family moved into it and resided there for a number of years. About the year 1890, the undisputed evidence is that Mrs. Coyne made a sale of this property for $2,000, and, after deducting a ■mortgage thereon of $700, realized the sum of $1,300, which went into the Day street and Garfield street properties.

Presumably, in the absence of any proof to the contrary, this money was the property of the wife, and for the respondent to •reach this part of the consideration of the real estate under attack, •he must satisfy the court that it belonged to or was held in trust •for Patrick Coyne.

The learned vice-chancellor seems to have reached a conclusion to that effect, concerning the proceeds of the sale of the Lakeside avenue property, since no reservation of this contribution to the Day street and Garfield street properties, in favor of Mrs. Coyne, is made in the decree. But I think a fair examination of the testimony shows that the vice-chancellor erred in his conclusion upon this branch of the case. There is no evidence to show that Patrick Coyne contributed any money toward the purchase or improvement of the Lakeside avenue property. The opinion of the vice-chancellor justly says upon this point: ■“ It is admitted that this $500 (referring to the consideration of the deed) was paid by mason work done on other buildings for Mr. Condit, and that the house was erected the same way.” The only witnesses on this subject were Mrs. Coyne and her husband.

Their testimony was given sixteen years after the transaction, and was to the effect, that they were unable to recollect all the particulars, but that Mr. Condit received his pay for the lot in work by Patrick Coyne and the three sons, who were masons, the oldest then eighteen years of age; that at and about that time the mother received the wages of her three sons; that the father did not, at .that time, earn enough money to make a living for the family, but paid his earnings into the hands of his wife for that purpose; that the carpenter work’was done by Mr. Ingling on a contract, and that he accepted the price in other work done by her sons, and in small sums paid by her son Charles.

It did not appear whether Mr. Condit and Mr. Ingling were still living at the time of the hearing, and it does not appear that the respondent made any effort to produce those persons as witnesses in the case, and, as a matter of fact, no witnesses were called by respondent to meet the testimony of Mr. and Mrs. Coyne as to the circumstances relating to the purcháse and improvement of the Lakeside avenue property by Mrs. Coyne. '

The evidence is that Mrs. Coyne alone contracted with Mr. Condit for this Lakeside avenue property, and presumably the mortgage of $700 was one negotiated for and placed upon the lot by her to raise money to-put in the building. It appears also beyond dispute that, after her husband’s, failure and tip to and including the time of her - acquiring and improving the Lakeside avenue property, Mrs. Coyne took boarders and raised chickens, the proceeds of which she used to supplement her husband’s insufficient support; and she says these earnings of hers, with the wages of her husband and of her three boys, who worked at mason work and plumbing, all of which were paid to her, were applied, after paying the expenses of the family, five in number, toward the erection of her Lakeside avenue home.

The evidence fails to show that the earnings of Patrick Coyne during the period named were more than sufficient for the ordinary support of his family. The mere fact, then, that the mother, with the consent of the father, which seems to be established, took the benefit of the labor of her minor children and of her own savings from the keeping of boarders and other small undertakings of hers in acquiring and improving the Lakeside avenue property, even before the passage of the amended Married Woman’s act of 1874, does not create an equity in such property in favor of the creditors of the husband. Johnson v. Vail, 1 McCart. 423; Peterson v. Mulford, 7 Vr. 481.

The act of 1874 (Gen. Stat. p. 2013 § 4) which secures to a married woman her own earnings in any employment carried on separately from her husband and her investments thereof, would seem to leave no doubt that, in this case, the Lakeside avenue property of Mrs. Coyne was beyond the reach of the respondent’s claim. But even granting that a portion of the earnings of Patrick Coyne had gone into this property as a gift to his wife, which could be reached by a diligent creditor, still there is another aspect of this part of the case from which, as it appears to me, the relief asked for as against the proceeds of that property should be denied, and that is this: Mrs; Coyne took her deed for this lot in 1878, and promptly placed the same upon record and proceeded forthwith, partly by borrowed capital, to-erect thereon a dwelling-house and moved into it with her husband and children. The judgment creditor, it seems, resided in the same city, and was well acquainted with the Coyne family, and was, it will be presumed, under the circumstances, in the absence of evidence to the contrary, conversant with this property transaction. And yet, according to the evidence, he stood by while Mrs. Coyne completed the erection of this home and during her occupation of it for fourteen or fifteen years, and until, as we may justly assume, on the faith that this was her' undisputed property, she is induced to sell this -and invest the proceeds of the sale in other real estate, to an extent that caused her to assume additional financial burdens and obligations, in the purehase and improvement of the same, before making any effort to challenge her exclusive, right thereto. This view is sustained by the authorities. "When a complainant, under such circumstances, has, by his delay, induced or suffered a defendant to incur expense or enter into engagements of a burdensome character, á court of equity will consider that the complainant is guilty of such laches as precludes him from obtaining relief. 12 Am. & Eng. Encycl. L. 549. Other authorities in point are Bump Fraud. Conv. 573, and notes; Degrauw v. Meehan, 3 Dick. Ch. Rep. 219; Aldridge v. Muirhead, 101 U. S. 397.

As before stated, there is no question but that the $1,300, the proceeds of sale of the Lakeside avenue property, was expended by Mrs. Coyne in the purchase or improvement of the properties sought to be reached by the bill, and, from what has been said, it follows that the hona jides of the transaction, so far as the rights of Mrs. Coyne are concerned, has to that extent been established. It seems to be clear from the testimony also that Mrs. Coyne was, in some degree, aided in the purchase and improvement of these properties by moneys furnished by her brother, Mr. Fallon, and it seems also to be clear that some of the money so used by her came from the bank account of P. Coyne & Company.

But as to whether the moneys that were paid on the properties in question, by the checks of P. Coyne & Company, were from the profits of the partnership business or from the private funds of Mrs. Coyne, advanced to her by her brother and from the private earnings of herself and children, which she says she deposited, through her son Charles, with the account of P. Coyne ■& Company, there is conflict in the testimony.

But the decree advised in this case is based upon the assumption that it is established by the proofs that Patrick Coyne was a partner with his son, Charles F. Coyne, at this time, trading under said firm, name, and that a sufficient part of Patrick’s share of the profits of the firm was paid upon the said properties or the improvements made thereon to pay and satisfy the respondent’s judgment.

This brings us back to the initial question — Was Patrick Coyne, and not Mary A. Coyne, the partner with their son, Charles F. Coyne, after the latter became of age in 1882?

If the respondent has failed to establish the affirmative of this question, then his cause necessarily fails and no inquiry need be made as to what part or proportion of the property was derived from the profits of P. Coyne & Company. The testimony of the Coynes was to the effect that, upon Charles F. Coyne becoming of age, the partnership was formed between Mary A. Coyne, the mother, and Charles F. Coyne, the son, to trade under the old firm name of P. Coyne & Company; that the latter had saved $122 which he put into the business, and that Mary A. Coyne received from her brother, James Fallon, from time to time, several sums, amounting to from one to two thousand dollars, which went into the business. These witnesses all testified that Patrick was not a partner then or afterwards, and took no part of the profits, but that he worked for the firm for wages, the larger part of'which, from week to week, he gave to his wife toward the support of his family; that Mrs. Coyne still took boarders and deposited her surplus earnings with her son Charles, to go into the firm account.

Mr. Fallon also, under oath, corroborated his sister as to advancing her these sums of money. The only'evidence offered, tending to contradict the testimony in any way, was that of certain building contracts made with different builders by the firm of P. Coyne & Company. These contracts described the partners as Patrick Coyne and Charles F. Coyne, or P. Coyne and C. Coyne, trading as P. Coyne & Company, but in every instance save one, the signature, P. Coyne & Company, was attached thereto by Charles F. Coyne, and in the one exceptional instance there was evidence tending to prove that Patrick Coyne signed his own name at the request of the builder, who insisted on the individual names.

There was no evidence that Mrs. Coyne had any knowledge of these written contracts, either as to how they were written, signed or otherwise, or that she had given any authority to any one to sign written contracts on her behalf.

The evidence in the cause was taken before the late Vice-Chancellor Van Fleet, and when the contracts above referred to were offered in evidence, objection was made to their admission, on the ground that they could not bind Mrs. Coyne.

They were admitted by the late vice-chancellor, subject, as he stated, to the objection of appellants’ counsel, the court remarking that, perhaps, the complainant could be required to prove who P. Coyne & Company was.

The learned vice-chancellor who advised the decree; in his opinion notes the objection thus made to the admission of this documentary evidence, and says, “ but it is clearly competent to contradict Charles and Patrick, and I think it is also competent as the contemporaneous acts of the parties.” We think the vice-chancellor erred in thus considering and giving effect to this evidence as against Mrs. Coyne.

The principle upon which such evidence should be excluded is illustrated by what the late vice-chancellor said at the hearing, in overruling the offer, by the respondent’s counsel, of the depositions of Charles F. Coyne, taken in another matter, to be used as admissions of Charles F. Coyne against Mrs. Coyne. The court’s remark was, “ Now, you are going on the theory that Mrs. Coyne was a partner, but that is the very thing you deny. Now, you cannot say she is a partner, for the purpose of getting these admissions in, and then, after getting them in, turn around and say, Oh, she is not a partner.”

It is alike inconsistent to claim, in the absence of any evidence connecting Mrs. Coyne personally with these contracts, that she is a partner, for the purpose of binding her, by the acts of Charles F. Coyne, one of the partners, with regard to these contracts, and then use them as evidence tending to show that Mrs. Coyne was not a partner.

Even if the offer in question had been made with the purpose of binding Mrs. Coyne to some obligation or contract as one of the partners, it is well settled that, before the acts or admissions of one who was an admitted partner could be used- to charge her, evidence must first be given to satisfy the court that such partnership existed between the parties named. Flannagan v. Champion, 1 Gr. Ch. 51; Abb. Tr. Ev. 209; 1 Greenl. Ev. 177.

If this be the law as to admissions of one partner offered to bind another person as a copartner, it is obvious that when the acts and admissions of one partner are offered to prove that a certain other'person is not a partner at all in the alleged partnership, such offer is entirely without support in authority, and at variance with the established legal maxim, “Res inter alios aeta alteri noeere non debit.” Upon the same general principle, the depositions of Patrick Coyne and Charles F. Coyne, taken as they were in a different proceeding, aud offered in evidence in the case as the admissions of the witnesses named, were inadmissible as evidence against Mrs. Coyne, and as such should have been excluded.

Arguing from his view of the facts of the case as stated in the opinion, the vice-chancellor says: I conclude that the written contracts speak the truth, and that Patrick Coyne and Charles Coyne, in name and in fact, composed the firm and were entitled to its earnings &c.

But the written contracts being excluded as above, it is quite clear that the remaining evidence fails to sustain this conclusion.

It may be further observed that among the facts and circumstances indicated by the vice-chancellor as influencing • his mind toward this conclusion were these: That Patrick had conducted the business under the firm name of P. Coyne & Company successfully, from the date of his failure up to the date of the commencement of the alleged partnership; that there was no external change in the partnership name and that Patrick continued to take an active part in it and allowed his name to be used in the written contracts as one of the partners, and that no reason is shown why he should abandon the partnership and work for it as a journeyman. But I think it may justly be said in answer that the parol evidence is all to the- effect that during the period named Patrick Coyne did not do a large and successful business, and in fact did not earn more than sufficient to support his family, if that. The contracts offered during that period of five years aggregate but $2,817 for labor and materials, the profits upon which would of course be considerably less than- that. According to the evidence, upon the formation of the new partnership as alleged in 1882, there was a purchase made of a team and wagon to be used in the business, thus indicating an enlarged effort in its prosecution.

Nor do I think it so strange that a change should be made in the firm by Mrs. Coyne becoming the partner with her son, for Patrick and his wife must have known that the former had this judgment of the respondent standing against him since his failure, so that he could not himself engage extensively in business without its being subject to seizure by the sheriff at any moment. The absence of any writings is also commented on as an indication that there was in fact no change in the partnership.

But there ought not, as it seems to me, to be too much significance attached to that circumstance, for I have observed that business transactions between kindred, though entirely bona fide in character, are often very carelessly done and with little regard to formal or legal requirements.

It is also suggested in the opinion, as a circumstance adverse to the interests of the appellant Mrs. Coyne, that she did not produce the checks and the bank account to corroborate her own evidence as to money she deposited in the firm name, and payments thereout made in the purchase or improvement of the properties, but- it seems to me that in this case it was rather the duty of the respondent, who had the burden of proof, to have called for the production of these checks, if in existence, or to have caused the books of the bank to be produced if they in any way tended to contradict her evidence, and that the failure to do so, unexplained, weakens the case of the respondent.

The bill charges fraud upon the defendants, and it is a well-settled principle, both at law and in equity, that fraud is never presumed and that the burden of proof rests upon the creditors whenever they assail a transfer for fraud. Bump Fraud. Conv, § 611.

After a careful reading of the evidence, and eliminating therefrom the written contracts and other proofs thus erroneously admitted, I fail to find that the charges of fraud set forth in the complainant’s bill as against the defendants, Patrick Coyne and wife, are established by the preponderance of the evidence. Having reached a determination adverse to the claim of the judgment creditor as against the real estate in question, it beT comes of no importance to discuss the question of the bona fides of the Fallon mortgages thereon, either in whole or in part. The result, is that the decree below must be reversed and the bill dismissed.

For reversal — The Chief-Justice, Dixon, Garrison, Gummere, Lippincott, Ludlow, Mag-ie, Van Syokel, Barkalow, Bogert, Dayton, Hendrickson, Nixon — 13.

For affirmance — None.