text:
    Samuel B. Illingworth et al. v. Henry J. Bloemecke et al.
    [Filed July 25th, 1904.]
    A court of equity will not decree specific performance nor order an accounting which will serve only to aid the complainants to secure the proceeds of Sunday racing, an unlawful business, prohibited by law.
    On bill for accounting and receiver.

      Messrs. Leber ■& Scotland, for the complainants.

      Messrs. Biker & Biker, for the defendants.
   Bergen, V. C.

The complainants are some of the stockholders of the New Jersey Bicycle Track Company and exhibit their bill for the purpose of compelling the Essex County Amusement Company, Henry J. Bloemecke and Charles B. Bloemecke, to account for moneys received for the New Jersey Bicycle Track Company since May 7th, 1897, and for the appointment of a receiver to manage the affairs of the New Jersey Bicycle Track Company, with power to collect all moneys received by the Essex county company from rentals paid by the lessees of the property in the possession of the New Jersey company during the bicycle racing seasons of the years 1900 and 1901. The testimony shows that the Newark Amusement Company were the lessees of a considerable tract of land at Yailsburg, near the city of Newark, held by it as tenant under a dease for .the term of ñve years from October 1st, 1895, with the right of a renewal for a like period; that the complainants, together with Henry J. and Charles B. Bloemecke, organized a corporation under the laws of this state called “New Jersey Bicycle Track Company” for the purpose mainly of owning and controlling bicycle tracks and the carrying on the business of holding bicycle racing meets. After the incorporation of this company an arrangement was made, the terms of which are in dispute between the bicycle company and the amusement company, the complainants insisting that Henry J. Bloemecke and his brother Charles, who were the principal owners and in absolute control of the Newark Amusement Companj;-, had agreed, for the amusement company, to sublet to the bicycle company a portion of the land above mentioned. Exactly what took place during the negotiations it is very difficult to determine owing to the great conflict in the testimony; it is certain, however, that while there was no written lease it was understood by the persons interested that the amusement company was to lease to the bicycle company a sufficient portion of its leasehold property to afford the bicycle company an opportunity to build a proper track for bicycle racing and that the term of such lease was to cover the period named in the lease to the amusement company; the only written evidence was an agreement by the amusement company that it would execute a lease to the bicycle company, the term to be for the period covered by its lease, the rent-to be $1 a year “and other privileges;” this agreement was signed by Charles B. Bloemecke as manager of the amusement company, and on the hearing it was contended that his position as manager did not imply the power to execute a lease, and that, on the contrary, it appeared that he had no such power. I am of the opinion, however, that his action was sufficiently ratified to make it binding; the agreement for the lease was executed and delivered at the urgent request of some of the stockholders of the bicycle company, and it was presumably under this agreement that the officers of the amusement company permitted the bicycle company to take possession of and expend about $8,000 in the construction upon the land of permanent improvements, necessary to carry on the proposed enterprise. Henry J. Bloemecke was an officer of the bicycle company and chargeable with notice of the character of the agreement under which it was expending money; he was also an officer of the amusement company, and, knowing ,of the agreement made by his brother, it was his duty to warn the bicycle company that they were expending their money on the land of the amusement company without such a written consent as would justify their entry on the land. The real controversy in this cause arises over the construction of this agreement, which is in the following words:

“This is to certify -that the Essex County Amusement Company do bind themselves to have a lease executed to the New Jersey Bicycle Track Company, same to be drawn by McCarter, Williamson & McCarter, for grounds to be occupied by them located adjoining shooting park, in the borough of Vailsburg, New Jersey, term of lease to be same as held by them from G. Kreuger, owner, consideration being one dollar, and other privileges agreed upon.”

The complainants claim that their company is entitled to the use, every day in the week, of the property leased to it, while the defendants insist that it was not contemplated nor agreed that the bicycle company could have the use or possession of the property on Sunday, and that when the agreement was made, Sunday racing was forbidden by the rules of the League of American Wheelmen, under whose auspices alone all such racing was carried on, and that the words “other privileges” contained in the agreement • for a lease were intended to mean, among other things, that the amusement company should have the right to make such use as it chose on Sunday of the lands used by the bicycle company on the other six days of the week. Before fully considering this question, I will take up and dispose of certain other charges set out in the bill of complaint, as follows: (1) That a chattel mortgage was made by the bicycle company to Henry J. Bloemecke for $6,492.48, for which the company received no consideration. The testimony very clearly shows that the complainants are mistaken and that the money, the payment of which was secured by this chattel mortgage, was paid out for the benefit of the company. (2) That in January, 1902, the officers of the bicycle company paid to Henry J. Bloemecke $1,767.67 for repairs to the track and for interest on mone3rs borrowed. The complainants insist that this pa3rment was improperly made, but the evidence shows to my satisfaction that the money was paid out for the benefit of the bicycle company, and that it was proper that it should be returned to the person who advanced it. (3) That the officers of the company improperly paid $1,000 as a yearly salary to the manager of the Compaq. I cannot find from the evidence that this was an improper expense; it was shown that services had been rendered, and it does not appear to me that the officers of the company were exercising their discretion in an improper or unlawful manner when they made this payment. (4) That $125 was paid to counsel in January, 1902¿ for services rendered the company during the previous year. No serious attempt was made on the hearing to show that the compensation to counsel was improper or excessive. I therefore find against the complainants on the four several matters last mentioned.

There remains to be considered two questions which arise under the first branch of the case, viz., should a specific performance of the agreement for a lease be decreed and are the complainants entitled to an accounting? In considering the first proposition, we should bear in mind that specific performance is not a matter of right, but of sound judicial discretion, and will be allowed or refused, as the equities of the parties in each case require. Ten Eyck v. Manning, 52 N. J. Eq. (7 Dick.) 47. The agreement, performance of which is here sought, binds the amusement company to have a lease executed to the bicycle company of lands sufficiently described, for a definite term, at a yearly rent of $1, and “other privileges agreed upon.” Under this agreement, the bicycle company entered upon the possession of the land, expended a large sum of money in building a racing track, and has continued in possession since 1897 until, at least, May, 1902, when the bill of complaint was filed in this cause. What the complainants here complain of is not that the company of which they are stockholders is not in possession as fully and effectively as if the lease provided for had been executed, but that the officers of their company do not claim and exercise the full benefit of tire contract, which by its terms covers every day in the week, for, in my judgment, the words “other privileges” cannot be interpreted to mean a reservation of a portion of the term granted, but rather some rights in the nature of rent. The bicycle company entered under a written agreement for a lease for a definite term, for a specified rent, and, to the knowledge of the lessor, have laid out considerable sums of money in improving the property. These acts, in my opinion, constitute the agreement to lease — a valid lease between the parties for the term therein named. If the officers of the company will not, as the complainants allege, enforce its rights under these circumstances against its lessor, a decree for specific performance would in no way urge these delinquent officers to a more active performance of their duties. It is very clear, from the testimony in this cause, that what these complainants seek is not the aid of this court so far as the secular days of the week are concerned, but to be afforded an opportunity, by a, decree of this court, to- participate in the profits from Sunday racing — in fact, there is nothing* else in dispute between these parties. The amusement company admits the right of the bicycle company during six days of the week, but insists that according to the agreement Sundays were reserved. In this contention they are supported, fraudulently, it is said, by the officers. in charge of the company in which these complainants are stockholders, and as the decree of this court would serve no purpose other than aiding the complainants in their effort to avail themselves of the proceeds of an unlawful business, namely, Sunday racing, a case is not presented in which a court of equity should interfere. If the officers of the complainants’ company1', in refusing to retain for the benefit of their corporation all the proceeds of the Sunday racing, are committing a wrong to the injury of these complainants, they can be compelled to account, if legally or equitably responsible, to the complainants in the premises.

The remaining question to bo determined is, are the complainants entitled to an accounting ? It appears that* when the agreement was first made and the track built the rules of the American League of Wheelmen proscribed Sunday racing, in consequence of which persons wlm were engaged in the public exhibition of racing with bicycles were not allowed, under threatened disbarment, to engage in the display of their acquirements on Sundays, and that this condition of affairs continued until some time in the year 1899, when another association was created, which permitted Sunday racing; that previous to this time the business of the bicycle company was a failure, and after that date, Sunday racing being permitted, the business became remunerative. About this time the Bloemeckes, being in control of both companies, demanded from the bicycle company, on behalf of the amusement company, a certain percentage of the Sunday earnings, claiming that the rent reserved in the original agreement did not cover the use of the grounds on Sunday. In this demand the persons in control of the bicycle company acquiesced, and on the hearing it was admitted that the sole accounting required by the complainants is of the money derived from Sunday racing’which was paid over to the amusement company. The question thus presented is, will this court reach out its hand and divide the money derived from an unlawful business between a.party of wrong-doers? The answer to this question must be in the negative. The business out of which this money arose is prohibited by the law of this state, and the penalty is a fine, and if the fine be not paid, imprisonment. On the argument it was insisted that the court was not being asked to enforce the contract, but only to compel a distribution of the profits. This proposition has been disposed of, against the contention of these complainants, in Watson v. Murray, 23 N. J. Eq. (8 C. E. Gr.) 257, 261. ISTo court will lend its aid to one who founds his cause of action upon an illegal act. Pennington v. Todd, 47 N. J. Eq. (2 Dick.) 569. This cause of action is based upon the transgression of a positive law of the state, and the policy of our courts lias been to render such transactions as precarious and difficult as possible. In the cause under consideration no question of innocent parties arises. The complainants are stockholders in a company engaged in Sunday racing exhibitions for profit; the dispute is over the distribution of these profits, the result of an illegal business carried on by these complainants through their officers and agents, and an effort by these complainants to prevent a violation of the law, of this state by their officers would be more commendable than this attempt to secure, a portion of the proceeds of an unlawful business, and would, we have a right to presume, result in the suppression of the business and the removal of the cause of dispute.

I will advise a decree dismissing the bill of complaint.


source: Caselaw Access Project

author: Bergen, V. C.

license: Public Domain

text:
    Camden Safe Deposit and Trust Company, &c., v. George R. Lord et al.
    [Filed July 25th, 1904.]
    1. The knowledge of an agent is imputable to his principal when it relates to the business which the agent is carrying on for the principal; but if the agent, in the course of the business in which he is employed, commits an independent fraud, for his own benefit, designedly against his principal, and it is essential to the carrying out of the fraud that he should conceal the real facts from his principal, the presumption of constructive notice is destroyed.
    2. Where the president and cashier of a trust company embarked in a partnership undertaking with an executor, who executed a mortgage to the trust company on property of the estate, the proceeds being used in the partnership venture, and not for the benefit of the estate, the knowledge of the president and cashier of the trust company of the fraudulent misapplication of the sum realized by the mortgage was not imputable to the trust company, and the mortgage was enforceable in its hand.
    On bill to foreclose.

      Mr. Lewis Siarr and Messrs. John S. Applegate & Son, for the complainants.

      Mr. Frank Durand, for the defendants.
   Bergen, V. C.

Three cases, each having the same title, were heard and will be disposed of together. In each the relief sought is a decree for the foreclosure of a mortgage and the sale of mortgaged premises. The three mortgages were given by George E. Lord, as executor of Mary E. Lord, to the Monmouth Trust and Safe Deposit Company, and by the receiver of that corporation assigned to the complainant. The power of the executor to make the mortgages is not disputed, and the only defence set up is that the mortgages were given by the executor to secure the payment of money borrowed by the executor, “personally and for his benefit and use in his personal enterprises and undertakings, and was so used by him;” and also that no part was used for the benefit of the estate he represented, and that the power to mortgage could only be exercised for the benefit of the estate, and not for the personal use of the executor. There is no charge of fraud or of knowledge on the part of the mortgagee corporation that the money obtained on the mortgaged security was to be misapplied, but it is sought to avoid the mortgages because the borrower did not, and did not intend, when the loan was made, to apply the proceeds to the carrying out of the trusts established by the instrument which conferred the power to mortgage, to the knowledge of the officers acting for the mortgagee corporation, and that the corporation is to be charged with the knowledge of its agents.

The last will and testament of Mary E. Lord gives to her children all of her estate, in equal shares, to be divided between them whenever her husband, the executor, should think it fit, arid when in his discretion it became necessary and advisable to do so, with full power to the executor to sell her real estate whenever, and in such manner, as to quantity or terms, he chose, and also to mortgage her lands, or any part thereof, the substantial result being that the husband had an absolute control of the property, subject only to an accounting to his children.

The first mortgage was given April 2d, 1901, to secure the payment of $2,000. ETo evidence was offered to sustain the answer filed in the cause of which this mortgage was the subject, and the complainant, having presented and proven its bond, mortgage and deed of assignment, is entitled to a decree, and I will so advise.

The second mortgage was given May 8th, to secure the payment of $2,500, and the third mortgage, June 4th, 1901, to secure the payment of $1,500.

On May 8th, 1901, an agreement, in, writing, was entered into between Albert C. Twining, president of the Monmouth Trust and Safe Deposit Company; David C. Cornell, the cashier of the trust company, and George R. Lord, as executor of Mary E. Lord and also individually, by the terms of which a copartnership was formed for the purpose of buying and selling hogs, the business arrangement to- terminate on the 8th day of October then next, and not more than $2,500 to be expended in the business.

That the capital required for this enterprise was raised on the security of the mortgage of May 8th is beyond dispute, for on that day the mortgage was given, and the sum credited by the officers of the trust company to the account of “George R. Lord, manager,” and, the testimony shows that it was drawn and used in the business venture referred to, and it does not anywhere appear that the consideration for the mortgage ever passed to Lord as executor. He gave a mortgage on lands he held in trust as executor; the amount for which it was given never came to him as executor, but was accounted for to Mm, to his satisfaction, by the credit to his account as manager.

The real condition of afEairs, as revealed by the testimony, was this: The president and cashier of the trust company, and Lord, wanted $2,500 capital for the business. Lord, as executor, owned real estate; his mortgage would answer the trust company as a voucher for the money to be credited to the account of Lord, as manager of the business, and it was never contemplated by any of the parties that the proceeds of the mortgage should in the remotest degree benefit the estate of Mrs. Lord. The misapplication of the trust fund was an illegal transaction, and it could not 'be successfully maintained that if either Twining or Cornell had taken the mortgage as individuals they could enforce it against the estate. Lord was doing a wrong to the knowledge of Twining and Cornell, a wrong in which they actively participated, and from the perpetration of which they expected to reap a benefit.

The only question to be considered is, can the trust company avoid responsibility for the acts of its agents in the premises upon the ground that it had no notice of the illegal transaction ? That actual notice was given to the corporation is not pretended, but it is insisted that it is chargeable with constructive notice of all the facts within the knowledge of its agents, the presumption being that the agent, communicated them to his principal.

That the knowledge of an agent is imputable to the principal, when such information relates to the business which the agent is carrying on for the principal, is a general rule of law well established by judicial determination, and is -based by some authorities upon the presumption of actual communication, and by others upon the legal conception that principal and agent are one. This rule is, however, subject to certain exceptions, an important one being that if the agent, in the course of the business in which he is employed, commits an independent fraud for liis own benefit, designedly against his. principal, and it is essential to the carrying out of the fraud that he should conceal the real facts from his principal, the presumption of constructive notice is destroyed, and the inference is, rather, that no communication was made. Pom. Eq. Jur. 675.

The president and cashier of this corporation had embarked in a joint enterprise with the executor of the estate of Mrs. Lord; the contract of copartnership contemplated a required capital of $2,500, and the case - shows that this capital was to be provided by the mortgaging of the trust estate, for an unlawful purpose, to the knowledge of all the parties, the fraudulent act of the executor being the making of the mortgage for the purpose intended and of the bank officers in accepting it and advancing the money from the funds in their charge, with the intention of aiding in the misapplication of a trust fund to further a transaction in which they were interested, having no connection with the business of their principal. It was a fraud from its inception, not only against the trust estate, but against the trust company. The president and cashier of the trust company, as members of the copartnership, were dealing with the institution of which they were the managing officers. In their own interest they wrere contracting with themselves, as representatives of the trust company, to advance money on a mortgage made by the trustee to the trust company which they intended to misapply, or aid in so doing, and their interest in the matter was so opposed to the interest of their principal that knowledge of their wrong-doing cannot be equitably imputed to their principal. In addition to the general rule that the presumption of constructive notice is overcome when the essential element in the successfully carrying out of the agent’s fraud is the concealment of facts from the principal, the knowledge of which might render the principal liable, we have the rule, well settled in this state, that where an officer deals with a corporation, in a matter in which his interest is opposed to that of the corporation, he does not, in such transaction, represent the corporation so as to impute his knowledge to his principal. 'In De Kay v. Hackensack Company, 38 N. J. Eq. (11 Stew.) 158, and in Barnes v. Trenton Gas Co., 27 N. J. Eq. (12 C. E. Gr.) 33, the court said that “when the agent’s interests are opposed to those of his principal the presumption is, not that he will communicate his knowledge, but that he will conceal it.”

My conclusion is that the infirmities attaching to the mortgage for $2,500 did not come to the knowledge of the trust company, so as to make it chargeable therewith, and that consequently the complainant is entitled to a decree in that suit.

As to the mortgage of June 4th, 1901, for $1,500, the situation is different. In this case it appears that the money went to the credit of Mr. Lord as executor, and that he drew against that account different sums, some of which went into the business of buying hogs; but it was an active account, with entries on each side, many deposits coming from the sales of hogs, so that it is impossible, from the evidence, to say that the $1,500 was, to the knowledge of the president or other officers of the trust company, applied in any other way than the balances in the account had been used and applied for many years.

Mr. Lord had for a long time, and, as far as the evidence shows, since the death of his wife, transacted all his bank business in his name as executor, and I am not satisfied, from the evidence, that the character of the use made of the moneys drawn from this account, if unlawful, was brought to the knowl-. edge of the officers of the trust company.

I will advise a decree for the complainant in each of the three cases.


text:
    Sarah R. Fred v. Abram Fred.
    [Filed July 25th, 1904.]
    1. A wife is not bound to return to tlio home of her husband where he is living in open adultery with another woman.
    2. In the absence of proof that under the laws of a sister state alimony can be given in a gross sum, the courts of this state may apply the law prevailing here in interpreting a decree, of a court of such sister state, which simply allows a certain sum for alimony, and hold that such sum is an installment on account of alimony, and that the decree does not adjudge the future rights of the parties.
    On bill for alimony.

      Mr. Edward I. Croll, Mr. Adolph Bloch and Mr. William Mathot, for the complainant.

      Mr. Frank McDermott and Mr. Frank E. Bradner, for the defendant.
   Bergen, V. C.

This bill is filed to compel the defendant to provide suitable support and maintenance for his wife and child, as permitted by section 20 of the Divorce act. P. L. of 1902 p. 502. The testimony establishes to my satisfaction that the parties were lawfully married, April 1st, 1883, in the village of Krasnopel, in the province of Poland, in the empire of Bussia; that the defendant moved to the State of Nevada, in the United States, in the year 1887, and was joined there by the complainant in the month of September, 1891; that they lived in that state, at a mining town called Gold Hill, as husband and wife, from the month of September until the 10th day of January following, at which time the defendant deserted the complainant, and, so far as I can ascertain, without the slightest cause or provocation. He was engaged in a small dry goods business and the stock which he left behind him he conveyed to an agent, who afterward disposed of the goods; what became of the proceeds does not appear. The defendant left his wife without disclosing his intention or leaving any information with her, or any of her family, regarding his destination. It afterwards appeared that he went to Bismarck, in the State of North Dakota, and on the 12th day of April, 1892, began proceedings in the courts of that state against his wife for a divorce, alleging as a cause that his wife was guilty of adultery with two. or three persons named in his complaint; that such proceedings were had in the cause that, on the 20th day of July, 1892, a decree was entered divorcing the defendant herein from the complainant.

An examination of the record, which has been produced and offered in evidence, discloses that the defendant, by perjury, willfully and corruptly deceived the courts of North Dakota for the purpose of procuring the decree. The evidence shows he misled the court as to the residence of this complainant by asserting that she was then a resident of the city of Newark, in the State of Now Jersey, although he had left her at Gold Hill, in the State of Nevada, a few months before that, and in consequence of this misinformation this complainant had no notice of the suit until after the making of the decree therein, and that the fact that such decree had been made did not come to her notice until the year 1895, when she immediately took steps in the North Dakota court for the purpose of having the decree vacated and set aside; that the decree was opened.and set aside and an answer interposed by this complainant, upon which such proceedings were had that the court decreed that the complaint filed by the defendant herein, as the plaintiff in that court, should be dismissed, the decree being in the following words:

“It is hereby ordered, adjudged and decreed that the complaint herein be dismissed and that the defendant have judgment against the plaintiff for the sum of i£5,000, for alimony and for the support of the child, issue of the marriage between the plaintiff and defendant, and for her costs and disbursements in this action, to be taxed by the clerk of this court, together with the sum of $500 as attorney’s fees as part of the taxed costs herein, and that the said Sarah Rebecca Fred, defendant, have and be awarded the sole charge, control and custody of Anna Fred, the child, issue of said marriage and mentioned in said complaint.”

It further appeared that the defendant herein has for many years past been living in open adultery with a woman in the city of Newark, by whom he has had four or five children; that since he deserted his wife, in Gold Hill, Nevada, in 1891, he has neglected and refused to support his wife or child, except under legal compulsion, as hereirafter stated.

The evidence shows that on two occasions — once in New York and once in the city of Newark — he was arrested, charged with refusing to support his family; that in New York City he was required to give a bond to pay his wife $4 a week for one year, and that the condition of the bond was fulfilled; that in the proceeding in the city of Newark he was required to pay the sum of $2.50 a week toward the support of his wife and child, and while it does not distinctly appear in this cause for what period this payment was required, it was not disputed that it is no longer paid. The defendant offered some testimony tending to show that he had requested his wife to come to Newark and live with him, offering to provide for her and her child, but I have no hesitation in saying that if the testimony of the witnesses called on this point is to be credited, such offers were not, in my opinion, made in good faith; each offer related to a time when he was under arrest or seeking to escape from an obligation his wife was endeavoring to enforce, and, if made, was only intended for the purpose of affording a temporary relief from his then present difficulty. In addition to this, the wife was not bound to return to the home of her husband, with her young daughter, when at that time the husband was living in open adultery with another woman, whom he recognized as his wife. Weigand v. Weigand, 41 N. J. Eq. (14 Stew.) 202. I am entirely satisfied that this defendant, without any justifiable cause, has abandoned his wife, and refuses and neglects to maintain or provide for her or his child.

On the argument of the cause it was most strenuously insisted that the decree of the North Dakota court, having awarded to the wife the sum of $5,000 as alimony, that award was to be taken as the allowance of a sum in gross for permanent alimony, and being" the judgment of a court of record of a sister state, with competent jurisdiction, it cannot be here questioned; and that the complainant, having compromised and accepted the sum of $1,000 in satisfaction of that judgment, is now estopped from any other claim or demand in that regard. I have given this question considerable investigation, and am satisfied that it is without merit. In the first place, no proof was made that under the laws of North Dakota alimony can be given in a gross sum, and in the absence of any proof on that subject we have the right to apply the law prevailing in. this state, which is entirely settled that the uniform practice is to give the wife an allowance of money in periodical installments. Calame v. Calame, 25 N. J. Eq. (10 C. E. Gr.) 548. Nor would we be justified in interpreting a decree that simply gives a judgment for the sum of $5,000 for alimony as meaning that such allowance was intended not only for past, but future, support and maintenance. In the second place, the judgment sought to be interposed as a bar cannot, by its very terms, be held to be a final determination of the controversy; it simply dismisses the plaintiff from the court, and does not undertake to adjudge the future rights of the parties. Nor can the amount of the allowance affect the question. This woman and her child had been abandoned in a-strange country, in 1891; the decree was made on the 7th day of December, 1896, after more than five years had elapsed since the desertion, during which time she and her child had depended upon the bounty of others for their support and maintenance, and an allowance of $1,000 a year may have been well justified by the evidence before the court. I will therefore advise a decree for the complainant, and will order a reference to a master to ascertain the financial condition of the defendant to aid the court in fixing a proper allowance.


text:
    Harley Thornton v. Delia M. Thornton.
    [Filed July 26th, 1904.]
    The evidence in a divorce suit held to show both parties guilty of adultery, and that the petitioner connived at defendant’s adultery.
    On petition for divorce and cross-bill.'

      Mr. James C. Connolly, for the petitioner.

      Mr. Abe J. David, for the defendant.
   Bergen, V. C.

The petitioner charges his wife, the defendant, with the crime of adultery, committed with a man by the name of Willis, in Jersey City, on Sunday, March 13th, 1904. The defendant has answered, denying the allegation, and by way of cross-bill charges her husband with adultery, and prays that she may be divorced from him for that cause. Without at this time entering into any analysis of the evidence offered by the petitioner in support of his charge, I have no hesitation in saying that the evidence fully convinces me that the defendant is guilty of the offence charged, and that if the defence set up by the defendant has failed the petitioner is entitled to the decree he prays for.

Having determined that the defendant is guilty of adultery, it follows that she is not entitled to the aid of this court, even if the charge she makes against her husband be established, and it is also well settled that if the husband be convicted of a like offence his petition will be dismissed, notwithstanding the guilt of his wife.

The defendant insists that, assuming her guilt, the petitioner is not entitled to the decree he asks for — first, because her husband had committed adultery with some person unknown to the petitioner; second, because he connived at and aided in the accomplishment of the downfall of his wife. This latter reason was not set up in the pleadings, but the evidence on the point was received, the question thoroughly argued by counsel, and no surprise being alleged it was ordered on the hearing that the defendant have leave to so amend her pleadings as to raise this question. In considering the first reason advanced, we find that it depends entirely upon the fact that on the 15th day of December, 1903, more than four years after his marriage, the petitioner was suffering from a venereal disease, and that the disease was so obstinate it refused to yield to continuous medical treatment until the 1st of April following. The husband denies ever having had sexual intercourse with any other woman than his wife and charges that she communicated the disorder to him, and there is no proof of his being with other women, or of his showing any attention or devotion to them, nor of his frequenting disorderly houses. T'o arrive at the truth on this part of the ease has imposed a most difficult duty and required a very careful examination of the testimony. It fully appears that the associations and temptations surrounding the wife were such as naturally would subject her to evil influences, likely to lead to the surrender of her virtue. No married woman of pure heart would act as she did. She visited, without her husband, a public dancing hall two or three times a week, danced and drank with young men, some of whom were strangers to her, and accepted their escort to her home at midnight (although professedly under the care and protection of Mrs. Sterratt, a married■ woman with whom she was boarding), leaning upon the arm of these voluntary guardians, notwithstanding the fact that the street cars were convenient and ran within a short distance of her home, affording a safe and convenient means of transport. Nor does a woman who has been faithful to her marriage vows make an appointment, as it appears this defendant did, with a total stranger, within at least two hours of their first introduction, to meet him on the following day, being Sunday, for the purpose of going with, him, at night, to a place of entertainment, in the city of New York. The acceptance of such a proposition by a married woman, under the condition proven, can have but one meaning; no virtuous woman would do it, and the fact that this defendant was so ready to compromise her virtue leads irresistibly to the conclusion that her marital duty to her husband had not been theretofore observed. The evidence shows that her morals were of a low grade. She conversed, apparently without a blush, with other men about her husband’s loathsome disease, and her character, as disclosed by the evidence, satisfies me that she was unchaste. Nevertheless, I do not feel justified, giving all of this evidence the weight it is entitled to, in finding that she was afflicted with or communicated to her husband the disorder he admits he suffered from. In my judgment, the presence of this disease places upon the husband the duty of clearly satisfying the court that he contacted it from his wife, if he would avoid the proper inference to be drawn from his condition. The evidence is devoid of the slightest proof that the wife ever showed any evidences of such a disease. If her condition had been such as to communicate to her husband a malady so violent in its nature as to baffle the efforts of his physician to restore him to health for more than three months, it is difficult to believe that, without the slightest evidence of medical treatment, she could, within six days after the condition of her husband was discovered, be so far restored to health as not to disclose, under medical examination, the slightest evidence of the disorder she is charged by her husband to have communicated to him. The physician, whose respectability and competency were not questioned, shows that on the 20th day of December, 1904, he made an examination of the defendant for the express purpose of ascertaining whether any such disease was present, and reported to the defendant, and testified on the hearing, that he could discover no evidence of any such complaint. I have not overlooked the fact that Thomas Wilson and Hayes Thornton, a brother of the petitioner, have testified to admissions made by the defendant tending to show that she was afflicted, but the appearance of Wilson, while a witness, and the character of his testimony, satisfies me that no reliance is to be placed upon his evidence. As to the statements of Hayes Thornton, the brother, they are too indefinite and uncertain on the crucial point to justify me in relying upon them; he does not pretend to state the words used by the defendant, his expression being “she finally admitted that she had it.” This is "his conclusion, but if he had given us the exact words, the admission might have been susceptible of a different interpretation. Wilson, who was in the employ of the petitioner, and Hayes Thornton, the brother of the petitioner, both manifested, during the course of their testimony, a prejudice and bias in favor of the petitioner such as to lead me to give little credit to their statements. In addition to all this, the petitioner himself stated to the witness Smith that while he at first thought he got it from his wife, he said, “I am satisfied, now, that I did not.” Certainly no one knew better than the petitioner the true situation, and it is not to be credited that if he believed his dreadful condition was due to his wife he could, on January 11th, 1904, have written her the letter offered in evidence, in which he addresses her as “Dear Delia” and signs it “lovingly Harley;” or, on the 24th of December, nine days after he had made this discovery, go with his wife to visit their friends in New York State, and after she had remained there about five weeks, receive her back at his home in Elizabeth and treat her in a manner entirely at variance with the idea that she had not only been unfaithful, but had done lrim a most grievous wrong. I am satisfied that the petitioner has not maintained by a preponderance of evidence the charge he makes against his wife, and that the only logical conclusion to be drawn from the testimony is that his condition furnishes evidence of his adultery.

The second point raised by the defence I have resolved against the petitioner. The burden of showing connivance is, of course, on the party setting it up, and the evidence to sustain it should be substantially conclusive and practically admit of no dispute. Yet the court ought not to require such an absolute demonstration as the admission or confession of. the conniver would afford. Conclusiveness should be interpreted to mean that no other logical result could he reached by a fair mind, seeking for the truth, after careful consideration of even- fact and circumstance bearing on the question, and if the facts, circumstantial or otherwise, in combination, show intentional connivance, the bar to the petitioner’s relief becomes effective. It is clearly manifested by the evidence in this cause that the petitioner was aware of the wayward disposition of his wife, for he admits repeated remonstrances to her on the subject. Yet, with this knowledge, he permits his wife to leave the place at which they were boarding, on the 25th day of February, 1904, and to take rooms at the Sterratt house, a place he had previously left because, as he testified, it was not a fit house for a married man to live in. It is important, in this connection, to remember that at this time the husband had under his employ detectives who were watching the movements of his wife, and without the slightest attempt to guard or warn his wife, with his suspicions so strongly aroused, he consents to her leaving his home and making her abode, alone, in a house which had fallen under his condemnation. With affairs in this condition he takes the defendant, with the witness Wilson, on the night of March 11th, to a theatre in Newark, having previously arranged with the Gregory detective agency to have there present the two Gregorys (John and Francis) and a negro named Freeman, for the express purpose of seeing the defendant in order that there might be no mistake as to identification. This was the first step in the plan to' procure the wife’s adultery. On the following night the two Gregorys went to Elizabeth, were present at the dancing hall, and found there, not only the defendant and Mrs. Sterratt, as they had every reason to expect they would — the testimony showing that the defendant went to this dancing hall every Saturday night — but also the mysterious person known as Mr. Willis, who then first appears on the scene, who, having-secured an introduction to the defendant, dances with her, walks home with her about midnight, and arranges to take her the next afternoon to the city of New York to attend the theatre. The defendant testifies that she made this arrangement subject to the approval of her husband, Willis having told her that he was a friend of her husband; that according to the agreement she was to meet Willis at the depot of the Pennsylvania Railroad Company in Elizabeth, at four o’clock Sunday afternoon, if her husband consented to her going, otherwise she would not be there, and that she, did obtain the consent. In support of her testimony on this point, we have the fact that she sent word to him to come down and see her right after dinner, at the Sterratt house, on Sunday, and that he came. What took place at the Sterratt house that afternoon is important. Mrs. Sterratt, Mr. Sterratt and the defendant, all testified that the petitioner said that he was going to Newark that evening and his wife asked him to taire “them along;” that he declined to take them, and that thereupon the defendant said to him, “I have an invitation to go to the theatre in New York this afternoon with Mr. Willis, a friend of yours, if you have no objections;” and that the petitioner said, “All right, go ahead; Mr. Willis is all right.” Mrs. Sterratt corroborates the defendant fully. Mr. Sterratt was not paying so much attention and does not claim to have heard all of the conversation, but he did hear the defendant tell her husband, after his refusal to take her to Newark, that she had an appointment with a gentleman to go to the theatre that night. The petitioner admits being there that Sunday afternoon, but denies being told anything about Willis. I think he is mistaken about this, because the only purpose for sending for him in a hurry, as far as it appears, was to obtain his consent to go to New York. Eliminate this' from the case and there is nothing to show why his wife sent for him in such a hurry. Besides that, both Mrs. Sterratt and the defendant testify that the wife said to her husband, “Don’t be in a hurry; I don’t have to go until four o’clock; come upstairs with me while I comb my hair.” The petitioner admits that he went upstairs with her and stayed up there while she combed her hair. It nowhere appears in this case that previous to this day the defendant went anywhere on Sunday, but by some remarkable coincidence ope of the Gregoiys, and the negro Freeman, who was subsequently to act as a porter, appeared in Elizabeth that Sunday afternoon, just about four o’clock, and saw Mr. Willis on the street near the Pennsylvania railroad station waiting for the defendant, who shortly after that joined him, and after •waiting nearly an hour for a train on the Pennsylvania road, although they could have gone earlier on the Central road, took the train to New York, followed by .Gregory and the negro. When Willis reached Jersey City, instead of crossing over the ferry and going to the theatre, he took the defendant, on the plea of getting something to eat, to a hotel in Jersey City, where he registered as “B. Willis and wife,” after which they were assigned to a bedroom, referred to in tile case as room number three. That the detective Gregory had some confidence that these parties would remain at the hotel for some considerable time, certainly longer than would be required to get a meal, is disclosed by the fact that he telephoned to Newark, to his father, to send over his brother as an additional witness. The telephoning was done before Gregory had ascertained that Willis and the defendant had been assigned to a bed chamber. On the arrival of the second Gregory from Newark, probably an hour after Willis had gone into the hotel, the negro assumed the part of a porter, knocked on the door of room number three, and on his statement that he was the porter, Willis, dressed only in his underwear, opened the door, and the defendant was seen by the three witnesses to be in bed, undressed. Having thus qualified themselves as witnesses to the infidelity of the defendant, they left the hotel and returned home. The subsequent conduct of Willis is explainable upon no other theory than, having compromised the defendant, his service was performed, for instead of attending the theatre, as he started out to do, and as the defendant requested he should do, he made the excuse that it was too late then, and took the defendant back to Elizabeth and left her at her home about nine o’clock. From that moment Willis vanished from sight; neither of the parties to the cause, nor any witness, had ever seen Willis before that ¡Saturday night; nor was he ever seen after that Sunday night. The detectives do not appear to have taken the slightest steps to ascertain who he was, whore he came from or udiat has become of him. Pie appeared Saturday, claiming to be a friend of the petitioner; tlic petitioner is told Sunday afternoon the defendant was going to New York with Willis, a friend of his, and does not disclaim the friendship. It is hardly to be credited that these detectives should appear in Elizabeth that Sunday afternoon, at the precise time and particular spot where these parties had arranged to meet, unless they had liad some information to that effect, and that information could only come from Willis. Why did Willis disappear? There was nothing said or done at the hotel at Jersey City which could give him the slightest cause for alarm, and no reason appears why he should secrete himself. T am forced to the conviction that this mythical person was employed, if not by the petitioner, by the detectives, as his agent, for the purpose of ♦entrapping this woman. It is no excuse to say that her virtue was easily assailed; her very weakness required from her husband a watchful care over her, and a husband who consents to the adultery of his wife is not entitled to a divorce.

I cannot close my eyes to the fact that the circumstances proven in this cause lead to but one conclusion, and that is that Willis was an accomplice of the petitioner, and I am unwilling to confess to such a want of ordinary perception as to be unable to see through this flimsy scheme. I therefore find that both husband and wife have been guilty of offences which prevent either from justly demanding the recognition of this court, and I will advise a decree accordingly.


text:
    Wilhelmina C. Wieters v. Israel Hart.
    [Filed August 3d, 1904.]
    II. was the physician, confidential friend and adviser of W., from whom he received $15,'000, to be held in trust for her benefit. He used some of the money to pay bills for her; some he appropriated to his own use, and some he invested in a farm, and in machinery, stock and implements for operating it, taking’ title to the farm in the name of W. H. conducted the farm as if it were his own, operating it at a loss. W. also mortgaged the farm for $2,200, H. receiving the proceeds. Finally W. took possession of the farm and sold the stock, implements and machinery, and seeks an accounting from H. — Seld, that 1-1. is chargeable with the original $15,000, with interest, and the $2,200 raised on mortgage, with interest, but not with the income from the farm; and that he is entitled to credit for the cost of the farm and permanent improvements as of the time W. took possession, and for the moneys realized from the sale of the stock, machinery and implements, and also for all moneys paid to W. or for her use, not including any expenses of operating the farm.
    Oil bill lor an accounting.

      Mr. Frederick J. Faulks, lor tlie complainant.

      Mr. John Sykes and Mr. John T. Bird, for'tlie defendant.
   Bergen, V. C.

The bill in this case calls for an accounting by tlie defendant of tlie sum of $15,000, which, in the answer and on the argument it is admitted the defendant held in trust for the complainant. In order to understand the nature of the trust and the disposition of the fund, as well as the relation of the parties, a brief reference to a portion of the testimony is necessary. The complainant’s home was Charleston, South Carolina, until she was seven years of age, when she was placed by her father at the Pennington seminary, in this state, where she remained until she was twenty years old, after which she continued to and still resides in the village of Pennington. Since she first came to the seminary she has been practically among strangers, so far as association with her relatives is concerned; her father, up to the time of his death, in 1890, when the complainant was twenty-five years of age, having visited her only about once in 'every four years, and she saw her brother about as often. When she was eleven years old she was afflicted with a very serious illness, during which her life was despaired of by the physician in charge. At this critical juncture the defendant, a practicing physician residing in Pennington, was called in, and under his treatment the complainant recovered from her then present illness, although it appears that she has since then suffered to a considerable extent from physical ailment. Ascribing her recovery to the defendant’s skill, the complainant was very grateful to him, and thus was laid the foundation for the confidence and trust which the complainant ever after reposed in the defendant, a trust and confidence growing so implicit during the years of her minority, separated as she was from her parents and relatives, the usual source of advice, consolation and sympathy to which a young girl would apply, that her will was entirely subject to the will of the defendant; his advice she followed without question; his act she accepted as the best that could be done.

When the complainant was about twenty years of age she left the seminary, but remained in Pennington, and the confidential relations between the defendant and complainant were so close that nearly all, if not all, of the cost of her maintenance was remitted by her father to the defendant, who attended to the disbursement of it for her use.

In 1890 the complainant’s father died, leaving her a legaéy of $15,000, which was paid to her in May, 189L, by a check for that sum, less $18 cost of exchange; this check was at once endorsed to the defendant in trust for the complainant, and was by him deposited in bank to his individual credit. Within three da3rs, as he testifies, this trustee drew $700 from the fund, of which he used $378 to pay a board bill for the complainant, which had been allowed to accumulate in expectation of the receipt of the legacy; of the residue of this sum he retained $228, which he said was due — $73 for medical services, $50 for a nurse and $105 for going to New York and Philadelphia to see whether more money could not be had from the father’s estate. There is nothing in the case to show that he expended $105 in these trips, and I do not believe he did. Besides these-payments, he claims to have given the complainant $122. This is denied by her, and no voucher was produced to sustain the claim. I mention this for the purpose of showing that from the outset this defendant began to treat this fund as his own, and as indicative of his intended conduct with relation to it.

The next step taken by this trustee was the investment of $2,500 in one mortgage and $300 in another, both securities being taken in the name of the complainant. Following this, and on June 15th, 1901, he purchased with the trust money a farm, located between two and three miles from Pennington, for $6,024.70, and had the same conveyed to the complainant; and although possession of the farm was not to be had until the April following, the defendant began extensive improvements on the farm, the purchase of machinery, stock and other personal property, for the purpose of conducting a farming business, and employed a tenant to work and manage the business, in consideration of one-third of the gross proceeds. In December, 1892, about nine months after the farming operations began, he informed the complainant that he needed more money, and induced her to sell, the mortgage taken for $2,500, he taking the proceeds; and in August, 1893, he represented to the complainant that he needed more money, and procured her to sell the mortgage for $300, he taking the money, so that within fifteen months after he had taken charge of the trust fund all that remained was the farm and its stock. In January, 1894, he was again out of money, and at his solicitation the complainant mortgaged the farm for $2,000, he taking the money, and in 1899 another mortgage on the farm for $200 was executed at the solicitation of the defendant, to pay foreclosure costs and accrued interest on the $2,000 mortgage. It further appears that in January, 1900, the defendant informed the complainant that she was largely in his debt on account of the farm, and induced her to give to liim her note for $275, and, on the same pretence, another note, on March 25th, 1900, for $175, and for the same reason, on May 5th, 1900, another note for $725, a total of $1,175, all of which defendant admits he used for his own purposes; that these notes were renewed from time to time, with small payments, until November, 1902, when the defendant neglected to make further payments and the complainant was obliged to arrange for their payment, the amount then due being $978.

In the autumn of 1902 the condition became apparent to the complainant. The rent of the house she lived in was unpaid, the notes above mentioned were maturing and had to be pro.vided for, and for years she had not received enough from her investment to keep her in comfort, and becoming alarmed, sought the advice of others, which resulted in her taking possession of the' farm and selling the stock, from which she realized $850. In the meantime the defendant was asked to account for the trust estate, and .the accounts furnished being unsatisfactory the bill of complaint in this case was exhibited.

The defendant has annexed to his answer an account which is so involved and intricate that any ordinary examination of it fails to show its true condition, the final figures pretending to show that the defendant has paid out $1,339.52 more than he lias charged himself with. It was, however, disclosed on the hearing that the complainant had assumed the payment of notes amounting to $978, for which no credit was given, being the amount due, in November, 1902, on the notes given by the complainant, amounting to $1,175, the proceeds of which the defendant had appropriated. Even if the defendant had vouchers for all he claims to have paid, the account is not such as he should present; pages are misplaced and accounts so intermingled that it will require a careful accountant to separate the items and place them in an intelligible shape.

The net result of the management of this trust is that this trusting woman lias boon deprived of the patrimony left by her father for her support during life, except a farm mortgaged to the extent of $2,200, and which the testimony shows is not worth over $6,000, or a net of $3,800 remaining of the $15,000. From the proofs and admissions in the answer, we are justified in finding that an obligation rested upon the defendant to deal with the fund which came to his hands according to the confidence reposed in him by the complainant, and that he is subject to the equitable rules usually applied to those who accept the execution of a trust. I am satisfied that this defendant has not faithfully executed- this trust, and that he should reimburse the complainant.

The claim made that the conduct of the defendant met the approval and consent of the complainant, and that she is estopped from now dissenting, does not appeal to my conscience or reason. She was so subject to the dominating will of the defendant that it was only necessary for him to advise and suggest in order to obtain her consent. This he knew, and it is not equitable to now allow him to escape the result of his misfeasance because she was too weak or relied upon his professed superior knowledge too strongly to resist his wishes. It is seldom the court is called upon to consider a case where the confidence of the cestui que trust was greater or where the circumstances required a more watchful care on the part of the trustee than the one under consideration, and all to the knowledge of the defendant.

Ilis management of the trust calls for the severest condemnation. His duty was plain and simple, and that was to invest the fund in safe, interest-bearing securities, and not to put the fund at the risk of a business which all the evidence shows was of a precarious and uncertain character in 1891. If he did not know it, the slightest inquiry of those engaged in a like enterprise at that date would have put him in possession of the situation. All the testimony shows this. Hor do I give any force to the argument that because others had loaned $6,000 on a mortgage security encumbering this land, therefore the investment was a safe one, for common experience teaches us that when the owner of a farm is ready to dispose of it for the mortgage debt, as in this case, it is usually because the debt equals, if not exceeds, the value of the land. This may not be the case in every instance, but when not so the' reason for the exception can be made to appear, and there was no effort made to do so in this case. .

To what extent this defendant should be hold liable has required the most careful thought, but after fully considering the evidence I have concluded that the account should be taken and the defendant required to indemnify the complainant upon the following principles: He is to be charged with the $15,000, and interest, from the time it came to his hands to the date of the accounting, to be hereafter provided for,' and also with $2,200, the amount procured on the two mortgages on the farm, with interest, from the time it came to his hands; also with $978 assumed by the complainant, with interest from the date of assumption, which was some time in November, 1902. He is to be.credited with the cost of the farm and of the actual permanent improvements in building, fencing and repairs, but this credit is to be made as of November, 1902, when complainant took possession of the farm, and interest from that date only, because up to that time he had the possession of the farm, using it in carrying on the business of farming, in which, in my judgment, he was not authorized to engage, and, if conducted at a loss, he must respond for the amount of the loss.

It is clear, from the testimony in this cause, that the defendant conducted the farming business in the most careless manner, and without the slightest regard to the interest of the trust in his charge; his acts, as disclosed, show that he treated the business practically as his own, buying and selling as he chose; taking the proceeds from the farm, in many instances, for his personal use, and, so far as we can discover, never pretending to account for it. His claim that for the butter and other things taken by him from the farm he handed the money to the complainant, is denied by her; he has no vouchers and I do not give the slightest credit to his story on this subject. From the very outset it was plainly manifest that the business was a losing venture, and even if justified in embarking in the enterprise, it was his duty, as a prudent man, as soon as he discovered the business was being conducted at a loss, to discontinue it and make the loss as small as possible. I therefore determine that as the business was followed at a loss, he is not to be charged with the proceeds from the farm, nor credited with any charges for moneys, paid in carrying on the business, and in these payments shall be included the cost of all stock, implements, machinery and taxes paid, unless the account shall show taxes paid on the trust fund other than the farm. He is to be credited with $850, and interest from date of receipt by the complainant, proceeds of the sale of the machinery, stock and implements. As these were sold at public auction, on usual terms, it is a fair presumption that it represents the value of such articles, after the defendant’s use for a period of at least ten years. In addition to the foregoing, the defendant will be credited with payments made to the complainant or for her account.

The defendant’s account filed with, his answer shows that these disbursements amount to $6,161.70, but the complainant vigorously disputes many of the charges, although the account was too lengthy to be fully considered on the hearing. The defendant will be credited on this branch of the account with all proper payments for which he can produce vouchers, or which are admitted. As to all others, the master will take the .deposition of witnesses and report the same to the court. Interest will be allowed on payments made from date to time of accounting.

There should be a reference to a master to state an account on the foregoing principles and a decree that the defendant account to the complainant for whatever may be adjudged to be due after settlement of the account, and I will advise accordingly.


text:
    Security Trust Company v. Temple Company et al.
    [Filed August 25th, 1904.]
    1. To constitute a-fixture there must be an actual (or constructive) annexation of the chattel to the realty, with an intention of making a permanent accession to the freehold, and the application of the chattel to the use for which the realty, in connection with which it is used, is appropriated ; and in determining the question of annexation more weight is to be given to the intention of the owner than to the method adopted in making the annexation.
    2. Chandeliers used for lighting a building, though only screwed on, are sufficiently attached to the realty to become fixtures.
    8. Stage scenery, used in connection with stage fittings, which are a part of the realty, and when set up, fitting into and held in place by the stage fittings, but, when not in use kept in a storeroom in the building especially provided therefor, is constructively annexed to the realty and a part thereof. '
    4. Furniture used on a theatre stage, and in no way annexed either physically or constructively to the realty, is not a part of the realty.
    5. A portable sectional dance floor, only in place when an auditorium is being used for dancing, and immediately thereafter removed and stored, Is not a fixture.
    6. Where different persons furnish different articles for a building, any right of lien of one of them upon the article furnished by him as against a prior mortgagee and the others, is waived by his receiving a bond in payment, secured by a mortgage on such and other property, made to a trustee to secure the different bondholders.
    On bill to foreclose.

      Mr. Herbert A. Brahe and Mr. J. Willard Morgan, .for the complainant.

      Mr-. Norman Grey, for tlie Penn Mutual Life Insurance Company.

      Mr. Conracl Ott, for M. W. Taylor and M. W. Taylor Amusement Company, defendants.
   Bergen, V. C.

The question to be determined is whether certain property, personal in its character, has been so annexed to the realty as to become a part of it. In 1891 the “Masonic Temple Association, of Camden, Tew Jersey,” was duly incorporated under the laivs of this state, and by two deeds of conveyance — one dated July 20th, 1891, and the other May 9th, 1892 — became the owner of certain real estate on Market street, in the city of- Camden, and caused to be erected thereon a large and substantial building, the portion of it fronting on Market street being finished for stores and shops, with rooms suitable for office purposes on the stories above, and in the rear a large room, capable of seating about one thousand people, was fitted and completed in a manner suitable for public exhibitions, and commonly called a theatre; in this part of the building there was also provided a room, called, in this case, “a banqueting-room.” The partition wall between the store and office part of the building and the theatre was substantially built of brick, in which there was an opening of considerable size, permitting ingress and egress to the theatre from a passageway leading from Market street, between the stores, to this entrance, which could be, and was, closed by doors when the theatre was not in use. The articles over which this controversy has arisen were furnished under separate contracts and by different persons during the construction and finishing of the building, and the various contracts, so far as the articles to be furnished were applicable, related to the whole of the building. During the course of the construction, and on August 15th, 1892, the Masonic Temple Association mortgaged the property to the Penn Mutual Life Insurance Company to secure the payment of $50,000, payments on account of which, it was admitted at the hearing, were advanced as the building progressed until the whole sum had been paid. The description contained in this mortgage described only the real estate, with its appurtenances, in the usual form, and contained no reference to the machinery or other articles in controversy as distinct therefrom. On July 1st, 1893, the Masonic Temple Association mortgaged to the Security Trust and Safe" Deposit Company the same lands, “and also” the furniture, stage fittings and other articles, some of which are the subject of this investigation, to secure the payment of $30>000. On May 21st, 1894, another mortgage was executed between the same parties, describing the same real and personal property, to secure the payment of $8,000, and on July 8th, 1896, the said Security Trust Company filed its bill in this court for the foreclosure of said mortgages, making all persons having interests in said property subsequently acquired parties defendant; that thereafter such proceedings were had in said cause that on the 23d day of September, 1896, a final decree was made therein adjudging the amounts due to the respective parties, and also that an execution should issue to the sheriff of the county of Camden, directing him to sell “the mortgaged premises” for the purpose of raising the sums of money so found to be due. In pursuance of this decree, an execution was issued to said sheriff directing hiin to sell “all that certain lot or piece-of land and premises,” following which appears a description of the land, and also of the furniture and other articles contained in the mortgage. In pursuance of this execution the sheriff of the county of Camden sold the mortgaged premises to the Security Trust Company, the complainant, and delivered a deed therefor. On December 21st, 1896, the “Temple Company” was incorporated, and on January 30th, 1897, in consideration of $1, the Security Trust Company conveyed to the Temple Company the real and personal property, by the same description contained in the sheriff’s deed to it; subject, however, to the mortgage of the Penn Mutual company. On the same day the Temple Company executed and delivered to its grantor, the complainant, a mortgage on the same property, real and personal, to secure the payment of $41,540 of bonds of one class and $22,880 of bonds of another class. Subsequent to the foregoing occurrences the Penn Mutual Life Insurance Company caused its mortgage, which was a prior lien upon the mortgaged premises, to be foreclosed, under which proceedings a sale was had, and on May 26th, 1900, the real estate was conveyed by the sheriff of Camden county to the Penn company, the present owner of the property, the result of this foreclosure being to extinguish all encumbrances and titles acquired after the execution and registry of that mortgage. The title of the Penn company to the real estate is not in dispute, but the complainant insists that all of the property personal in its character, and described in its mortgage of January 30th, 1897, is yet subject to that mortgage as a chattel mortgage, and that the conveyance by the sheriff to the Penn company did not pass this personal estate, although all of these alleged chattels remain in the possession of the Penn company.

Whether a chattel has become a part of the freehold so as to pass with it under a conveyance thereof containing only a description of the land, has been a fruitful source of judicial discussion and determination, with results so various in different jurisdictions as to render hopeless any attempt to reconcile them. Such an effort, however, is not required, so far as this state is concerned, for our court of last resort, in Knickerbocker Trust Co. v. Penn Cordage Co., 66 N. J. Eq. (21 Dick.) 305, has laid down a broad and liberal rule for the protection of freehold rights against technical construction or fanciful distinctions. There must be an actual annexation of the chattel to the realty, with an intention of making a permanent accession to the freehold, and the application of the chattel to the use for which the realty, in connection with which it is used, is appropriated; and in determining the question of annexation, more weight is to be given to the intention of the owner than to the method adopted in making the annexation. The property which the complainant insists is personal is described in the bill of complaint, and the conveyance under which it claims, as follows:

“All the furniture, stage fittings, scenery, electrical and other machinery, boilers, engines, pumps, tanks, tools, and fittings, elevator, chandeliers, electroliers, gas fixtures, carpets and ' other property belonging to said Temple Company, contained in and about the building erected upon said lands heretofore known as the Masonic Temple Company building and auditorium, and the boiler and engine-house connected therewith.”

From a schedule produced and used on the hearing without objection, it appears that the articles, when specifically enumerated and described, exceed one hundred and fifty in number, but for the purpose of considering the question of their relation to the realty may be classified as follows — first, two engines, steam boilers, dynamos, switchboards, pumps in the engine-room, range in the banqueting-room, elevator, and theatre seats fastened to the floor; second, electroliers, chandeliers and brackets, commonly called combination fixtures, for lighting the building; third, stage fixtures and scenery, including a switchboard connected with the electric wires, for stage use; fourth, chairs not fastened to the realty, combination closet, clock, ticket-boxes, mirrors, tools, wrenches and an oil filter; fiifih, a large portable sectional dance floor, only in place when the auditorium was being used for dancing or other assemblies and immediately thereafter removed and stored.

As to the property described in the first classification I have made, it is unquestionably, under the rule in this state, a part of the realty, and passed with the transfer of the title to the freehold. The status of most of these articles has been passed upon by the supreme court of this state in Temple Company v. Penn Mutual Life Insurance Co., 69 N. J. Law (40 Vr.) 36, and the evidence in this cause amply justifies the conclusion that they were permanently attached to the freehold, and are within the rule established in Feder v. Van Winkle, 53 N. J. Eq. (8 Dick.) 370.

The property embraced within the second classification has in a recent ease been held to be personal property (New York Life Insurance Co. v. Allison, 107 Fed. Rep. 179), but the court, in delivering its judgment, expressly stated that the determination was controlled by the rule in New York state on the subject, and as he interpreted that rule many articles do not become fixtures in that state which under the rule in New Jersey are held to be a part of the realty, so that I do not consider myself justified in accepting that case as an authority to be applied here, and feel supported in this conclusion by the circumstance that in the case last referred to the court was undoubtedly controlled by McKeage v. Hanover Fire Insurance Co., 81 N. Y. 38, in which latter case it was held that gas fixtures were not permanently annexed, because they were simply screwed on projections of the gas pipes from the walls, left for that purpose, and could be detached by unscrewing them, thus giving greater weight to the manner of attachment than to the intention of the owner in making the accession to the freehold.

All of the articles in the class we are now considering were attached to the freehold as firmly and as efficiently as many articles are where their being a part of the realty is not disputed. A modern bathtub is attached to the water-supply fixtures of the dwelling by the simple process of screwing on two couplings, and it may be readily detached in a few moments by unscrewing the couplings, yet it would not be seriously argued that a bathtub so attached was not a part of the realty. I am of the opinion that these articles were sufficiently attached to the freehold to answer one of the requirements necessary to constitute them a part of the realty. The property to which they were attached was a large building, intended to be used for stores, offices, a theatre and a banqueting hall; neither the stores, offices or theatre could be efficiently used for the purposes to which the building was appropriated without the use of the articles so attached, thus furnishing another requisite demanded of a fixture. The remaining question to be considered is, were they attached with the intention of making them a permanent accession to the freehold? In Feder v. Van Winkle, supra,, it was said “the intention must exist to incorporate the chattels with the real estate for the uses to which the real estate is appropriated, and there must be the presence of such facts and circumstances as do not lead to, but repel the inference, that it is intended to be a temporary annexation.” The facts in the present ease, in my judgment, repel the inference that the annexation was to be temporary. The building to which the attachment was made was erected and completed for the purposes of renting the same in parcels to tenants, and for that purpose the modern system was adopted of lighting and heating the entire building from a central plant located on the premises, which plant I have already determined in this case to be a fixture, and without the chandeliers and gas fixtures the lighting system could not be operated. There is not a single fact in this cause leading elsewhere than to the conclusion that these articles were attached for the permanent improvement of the freehold, and my conclusion is that they were annexed by the owner as a part of the means adopted by him to carry out the purposes for which the building was erected, “and with the intention of permanently increasing its value for the use to which it is devoted.” Knickerbocker Trust Co. v. Penn Cordage Co., supra.

The status of the articles embraced within the third class presents a more difficult problem. On the hearing it appeared that a portion of the stage fittings were attached to the building. These I hold to be fixtures. But used in connection with these fittings was certain stage scenery, none of which was physically attached to the building, and when not in use was kept in a storeroom in the theatre building especially provided for the purpose. This scenery consisted of numerous parts; some, being set up, represents a parlor, others a kitchen and others different scenes. So far as the evidence shows, this scenery, when set up, fitted into and was held in place by other parts of the stage fittings, which were a part of the realty. I am of the opinion, and shall so hold, that such part of this scenery as was manufactured and supplied for use in this theatre, to be used in connection with such part of the stage fittings and scenery as are attached to the building, and which has been used in connection therewith, is constructively a part thereof, and was intended to be, and is a permanent accession to the freehold. The stage fittings arc fixtures of which such scenery is a part, temporarily disconnected 'and indispensable to the appropriate use of the fittings and building they are connected with and thus constructively annexed to the freehold, such as hop-poles, taken down and lying in a pile on the land (Bishop v. Bishop, 11 N. Y. 123); or loom-beams, although not fastened to a loom which is permanently attached to the realty. Hopewell Mills v. Taunton Savings Bank, 6 L. R. A. 249.

The fourth and fifth classes, as well as all that part of the furniture used on the stage, and in no way annexed, either physically or constructively, are clearly not fixtures and no part of the realty. Certain of this property is admitted in the answer to be personal, to which no claim is made by the defendants, and as to which we are not called upon to express any determination. The complainant, however, insists that all of this property, even if attached to the realty, falls within the rule established in Campbell v. Roddy, 44 N. J. Eq. (17 Stew.) 244, because some of the bonds secured by its mortgage were taken in the place of bonds formerly held by persons who had accepted them under a previous mortgage in payment for chattels furnished, and other bonds were held by persons who had advanced money for them, the money so advanced being used to pay the debts of the Temple Company, some of which had been incurred in purchasing the property covered by the mortgage. It seems to me that the relation of the parties to the subject-matter is too remote to warrant the application of the principle invoked. It is not pretended that a distinct mortgage was given to each creditor for the articles he furnished; on the contrary, the original mortgage, since foreclosed, was given to a trustee to secure the payment of certain bonds or certificates of indebtedness, with authority to the officers of the mortgagor corporation to negotiate the same, "and with the proceeds thereof to pay the indebtedness of the association,” and if it should be made to appear that some of the debts were paid by the acceptance of some of these bonds by the creditor, those bonds are secured, not only by the goods he furnished, but also by property, real and persona], supplied by others. lie chose to waive any lien or right hi! had on or to the particular articles furnished by him and accepted additional security for his debt, in common with all others who purchased the bonds, and under the circumstances ought, not to now claim or be allowed a preference over other bondholders, and remove his special property from the lien of the mortgage given to secure their bonds .as well as his. It must also be remembered that this mortgage has been foreclosed and all rights under it extinguished by sale of the real, and, it is claimed/of the personal, property, which was purchased by the present complainant and afterwards conveyed to the Temple Company, by which it was again mortgaged under a scheme; of reorganization, which materially changed the original situation.

I cannot perceive how any equity possibly existing in tire original vendor could be administered without injury to oilier innocent persons; still, if it could, it seems to me that any such equity was extinguished by the foreclosure of the first mortgage held by the Penn company, for in that proceeding all subsequent encumbrancers wax; made parties, and if the present complainant had any claim on behalf of the bondholders, such as is now set up, viz., that actual annexations to the freehold were subject to the lien of the certain vendors prior to the right of the first mortgagee, it was its duty to then make the claim, and not wait until after sale and purchase to seek an establishment of it. If such a right exists, it is enforceable against all bondholders, as well as against the purchaser, the present defendant, and if carried out would permit certain bondholders to withdraw the mortgage security to the injury of other holders of like securities.

I will advise a decree in accordance with my conclusions as above expressed.


text:
    Clinton National Bank v John N. Stiger.
    [Filed October 8th, 1904.]
    1. After the loss of three cashier’s cheeks the bank offered to pay the amount due thereon, which was not disputed, on being indemnified against having to pa3' the original checks. The payee afterward began a suit at law on the checks without tendering indemnity. — Held, that equity has jurisdiction to restrain such suit and to adjust tlio rights of the parties.
    2. Quwre. Has a court of law jurisdiction over a suit on a lost check?

      On bill for injunction.

      Messrs. Dungan & Reger, for the complainant.

      Mr. James L. Griggs, for the defendant.
   Bergen, V. C.

It appears from the bill of complaint in this cause that the defendant left with the complainant $1,313.75, for which he received three cashier’s checks, payable to his own order, two dated September 3d and one September 25th, 1903;- that on the 15th day of December, in the same year, the defendant applied to the complainant and demanded new bills of exchange or cashier’s checks in the place of those mentioned, or their equivalent in monejq alleging that the original checks had been lost or stolen; that the complainant offered to immediately give to the defendant new bills of exchange or the money, as he might desire, upon the execution and delivery by the defendant to the complainant of sufficient security to indemnify the complainant against loss, if it should thereafter be required to pay the original checks; that the defendant refused such indemnity, and has commenced a suit against the complainant in the supreme court of this state to recover the amount due upon said cashier’s checks, alleging in his declaration in that suit that the checks were lost or stolen. The complainant seeks to have the suit at law enjoined, upon the ground that it now is and always has been ready and willing to pay to the defendant the moneys represented by such lost checks, or to issue to him new cashier’s checks in the place of those said to be lost, upon being indemnified against being required to pay the original checks, and so tendered itself when knowledge of their loss was first brought to its notice, and that the conduct of the defendant in refusing the indemnity and in bringing the suit, thus casting upon it the burden of pajnng costs, without offering indemnity, is unjust and inequitable. Until the enactment of the law to be found in section 7 of our general act concerning promissory notes, suits for the recovery of money due upon an obligation which was lost were exclusively the subject of equitable jurisdiction,' where indemnity might be required. On the return of the rule allowed in this matter, the defendant resisted the granting of a preliminary injunction restraining his suit at law, upon the ground that under the statute last referred to he is entitled to maintain his action. This section is peculiar in its phraseology; it permits the action at law upon a negotiable instrument which is lost, and then uses the following/ language, “but any court of law shall give judgment in the same manner as if such note was not lost,” leaving it questionable whether it was the intention of the legislatur e to have the .act apply to any negotiable instrument other than a note. The act further provides that any court of law may make the same order as a court of equity would to indemnify the party charged against the repayment thereof.

It has been determined, in Force v. Elizabeth, 27 N. J. Eq. (12 C. E. Gr.) 408, that this court is not deprived of any part of its original jurisdiction in matters of this character because the law courts may exercise the same or a similar jurisdiction. This being so, the question arises, should this court interfere in this case. After careful consideration of all the circumstances, I am of the opinion that this cause should be retained in this court. The instruments sought to be recovered upon are not promissory notes, but bills of exchange, and it is certainly a debatable question whether the use of the word “note,” in the latter clause of the seventh section of the act relating to promissory notes, does not limit the power given in the section to suits upon lost promissory notes. The conduct of the defendant in this matter has certainly been unjust, for the complainant has only asked from him the indemnity which he would be required to give in any court, whether of law or equity, and it is certainty unconscionable to permit him to compel this complainant to pay the costs of a common law judgment when it is in no equitable default. If the defendant had acted as a reasonable man should, and tendered the indemnity he is equitably bound to give, the money would have been paid to him without question. Were the amount due in dispute, it would be quite proper that he should appeal to a court of law to have the amount clue settled and ascertained, but as no such question arises here, and as this court has ample jurisdiction and power to equitably adjust the rights of these parties, I shall advise that a preliminary injunction issue according to the prayer, of the bill. If, upon final hearing, the facts as they now appear remain undisturbed, the amount due to the defendant can be decreed to be paid, upon his furnishing the indemnity necessary to protect the complainant from further loss.

I will advise the proper injunction order.


text:
    Margaret A. Higgins, administratrix, &c., v. The Jamesburg Mutual Building and Loan Association et al.
    [Filed October 11th, 1904.]
    1. The record of an assignment of a mortgage is constructive notice of its existence and contents to one who takes a subsequent mortgage on the premises, and also that the assignor has no authority to procure the cancellation of the assigned mortgage.
    2. The administratrix of a deceased assignee of a mortgage is not estopped to set up the existence of the mortgage, where the assignor obtained possession of it from her by false representations as to his right to it and purpose in obtaining it, and then caused it to be canceled of record and gave a new mortgage on the lands.
    On bill to restore the lien of a canceled mortgage.

      Mr. Freeman Woo ¿¡bridge, for the complainant.

      Mr. John T. Rossell, for the defendants.
   Bergen, V. C.

Martha Dickens executed and delivered to her son, David, a mortgage on lands in Middlesex county, to secure the payment of $600, which the son duly assigned to James S. Higgins, in consideration of $600, advanced in two parcels of $300 each, the second payment being about one jear after the first. When the first payment was made a deed of assignment was executed by David, transferring to Higgins one-half of the mortgage, and when the second payment was made, another deed of assignment was executed, transferring the balance due on the mortgage; both deeds were duly recorded in the office of the clerk of the county of Middlesex. James S. Higgins died, and among his assets were found the mortgage, with the bond it was given to secure and the two deeds of assignment, and all came into the custody of the complainant as his administratrix. In the month of February, 1901, Martha Dickens and her son, David, applied to the defendant the Jamesburg Mutual Building and Loan Association for a loan of $600, to be secured bjr a mortgage upon the same lands. The solicitor of the building and loan association examined the records in the office of the clerk of- the county of Middlesex and discovered of record the complainant’s mortgage, but did not search for any assignment of this mortgage; had he done so, he would have found that the complainant’s mortgage had been duly assigned to James S. Higgins in his lifetime. The solicitor was a witness and testified that he did not examine the records for assignments of mortgages because he had been told by David Dickens of the existence of the mortgage, and also that it had been paid. After preparing a bond and mortgage, the solicitor went to the house of Martha Dickens, near Monmouth Junction, procured the execution thereof by her, and told David that before they could have the money the previous mortgage for $600 must be canceled, whereupon David said that he thought he had the mortgage in the house and left the room to get it, but after a short time returned and said that the mortgage was in a safe at Monmouth Junction; they then drove to Monmouth Junction, and the solicitor waited in a hotel while David went for the bond and'mortgage. After being away a short time he returned with the bond and mortgage, and the solicitor wrote upon the mortgage a receipt for the amount due, with request to the clerk of the county to cancel same of record, which writing was signed by David Dickens, after which the solicitor took the mortgage to the'clerk’s office and procured its cancellation, and, causing the one given to the building and loan association to be recorded, paid over the amount of money it was given to secure. The manner in which th? bond and mortgage were obtained from the complainant was as follows: Dickens went to the house of the complainant and told her that she had some papers that belonged to him, and if she would show him the papers she'had he could point them out; thereupon she produced the bond and mortgage, with the two deeds of assignment, and he called her attention to the fact that the bond and mortgage were made out to him, and said he was entitled to have them, whereupon she complied with his request and allowed him to take the bond and mortgage, she retaining the deeds of assignment; nothing was said at the time by David indicating that the mortgage was to be canceled, or that the debt due to her as administratrix would be in any way affected by his taking the two papers. The complainant is a woman not very familiar with business matters and supposed, as she testified, that David was entitled to have papers which had his name on them, and that the assignments were the only papers she was entitled to hold. David was also sworn as a witness and testified that he had sold the mortgage to the complainant’s husband for $600, and that the amount paid him had never been returned, and was still due, and that it was not his intention to destroy her security when he gave the mortgage to defendants’ solicitor. After taking the bond and mortgage he continued to pay the interest thereon to the complainant, and she endorsed all the payments on one of the deeds of assignment, and never discovered that the mortgage had been canceled of record until some time in March, 1904, when she employed counsel, who filed, in her name as administratrix, the bill in this cause, praying that the cancellation of this mortgage might be annulled and made void and the bond and mortgage restored to her, and decreed to be a valid and subsisting lien against the property as if no such cancellation had ever been made.

I am of the opinion that the complainant is entitled to the relief which she asks for. By the act respecting conveyances (Revision of 1898), assignments of mortgages may be recorded when properly acknowledged, and by section 53 of the same act such record shall thereafter be notice to all subsequent mortgagees of the execution thereof and of its contents, so that by the law of this state the building and loan association, when they accepted their mortgage, was chargeable with notice of the fact that David Dickens was not the owner of the mortgage, nor authorized to direct it's cancellation. They did not find any certificate of cancellation of record, but the mortgage, intact, was placed in the hands of their solicitor by a person who, as the record stood, was not entitled to authorize its satisfaction or cancellation. They are chargeable with the knowledge which they could have obtained by inquiry from the person who held the record title to the mortgage debt. It was insisted, on the argument, that by surrendering the mortgage to David the complainant afforded him an opportunity to mislead the defendant, and that she should now be estopped from making the claim which she sets up in her bill of complaint, but in my judgment such an argument is not of sufficient force to justify its acceptance. The complainant was a mere trustee, holding this security for the benefit of those entitled to it under our act relating to the distribution of personal estates, and the mortgage-was obtained from her by misrepresentation and concealment of the purposes for which its possession was sought; she was not requested to sign any receipt in acknowledgment of its payment, nor to consent to its cancellation, and when David presented the bond and mortgage to the representative of the defendant he h'ad no more title to it than if he had found it, and with the knowledge to be obtained from the record — that David had sold and transferred all of his interest in that mortgage — it was the duty of the defendant to do more in the premises than accept the statement of the assignor. Harrison v. New Jersey R. & T. Co., 19 N. J. Eq. (4 C. E. Gr.) 488; Heyder v. Excelsior Building Loan Association, 42 N. J. Eq. (15 Stew.) 403.

The complainant is entitled to a decree according to the prayer of her bill, and I will so advise.