text:
    Anton Felin, complainant, v. Arrow Motor Machine Co., a corporation, defendant.
    [Decided April 26th, 1924.]
    1. A chattel mortgage is void as against a receiver of an insolvent corporation if the affidavit annexed falsely states the consideration.
    2. A real estate mortgage given by a corporation to a bona fide holder is not invalid because it was authorized by a board of only two directors.
    3. A corporation cannot plead usury.
    4. Fixtures, which ordinarily pass under a mortgage as real estate, are personal property when the parties elect to treat them as such.
    On motion for directions to receiver.

      Mr. Edward B. McQlynn,'for the motion.

      Messrs. Stamler, S.iamler & Koestler, for the receiver.
   Backes, V. C.

The defendant is an insolvent corporation. In October, 1922, it executed a real estate mortgage on its factory building, and a chattel mortgage on its machinery, fixtures and personal property contained therein, to Anton Eelin, its president, to secure $20,000. The mortgages were assigned to Robert J. Metzler, Inc., for a loan of $15,000 and a bonus of $5,000. The mortgages were made to Eelin as a dummy for the Metzler company. The receiver sold the land and personal property as a unit for $34,000 subject to real estate mortgages of $21,000, but free and clear of the two mortgages of the Metzler company, and a subsequent real estate mortgage of the Elizabeth Trust Company, under an order of the court, consented to in open court, in writing, by the solicitor of the Metzler company. The present application is by the Metzler company to direct the receiver to pay its mortgage debt out of the proceeds. The receiver resists and sets up that the affidavit annexed to the chattel mortgage is untrue. It is sworn to by Anton Felin, the mortgagee, who says “that the true consideration of said mortgage is the sum of $20,000 cash money this day advanced to the Arrow Motor Machine Company.” That statement is false. Only $15,000 was paid. The chattel mortgage is invalid. Hunt v. Ludwig, 93 N. J. Eq. 314; affirmed, 94 N. J. Eq. 158.

The receiver attacks the realty mortgage on the ground that the resolution authorizing it was passed at a meeting of only two directors of the insolvent company. Conceding this to be true it does not invalidate the mortgage. The court of errors and appeals in the case of Kuser v. Wright, 52 N. J. Eq. 825, in a similar case, held that a mortgage authorized at a meeting of two of three directors, the third one having no notice of the meeting, was valid, and that it was a subject into which those who are dealing with the corporation was not bound to inquire. The Metzler company had no notice. Felin, the nominal mortgagee, knew, but he was a mere figurehead for the convenience of the insolvent company and the Metzler company, and notice to him is not imputable to the latter.

The mortgage is a lien on the proceeds of the sale of the land for $20,000, less $3,000 paid on account, with interest. The Metzler company is entitled to the bonus. The insolvent company cannot plead usury. Ovsiovitch v. Federal Tool and Manufacturing Co., 94 N. J. Eq. 85; affirmed, ibid. 744.

The mortgage debt, however, is to be made out of only so much of the proceeds of the sale as represents the land, to wit, in the proportion as the fair value of the land and the personal property respectively bear to the proceeds of sale. I find the value of the'land to be $35,000 and the personal property $29,069.50, the amount at which it was appraised for the receiver by Mr. Metzler of the Metzler company.

It was suggested that as the machinery and other fixtures were appropriately annexed to the land with intent, they are subject to the real estate mortgage. Chancellor v. Cruse, 83 N. J. Eq. 232. The parties having treated as personal property what otherwise might be.real estate are bound by their election. Zeller v. Adam, 30 N. J. Eq. 421.


source: Caselaw Access Project

author: Backes, V. C.

license: Public Domain

text:
    James H. Toothe, complainant, v. Walter J. Dozier et al., defendants.
    [Decided April 15th, 1924.]
    1. A suit to recover corporate funds, misappropriated by a director, with the approval of the board of directors, must be brought by and in the name of the company, unless it is made to appear that the directors refuse to bring the action, or, if brought by them, it will not be honestly prosecuted, in which event a stockholder may sue.
    2. Held, suit properly brought by stockholder.
    On motion to dismiss bill.

      Messrs. McCarter & English (Mr. Conover English), for the motion.

      Messrs. Lum, Tamhlyn & Colyer (Mr. Ralph Lum), for the complainant.
   Backes, V. C.

The bill shows that the board of directors of Charles R. Hedden Company, a corporation, on August 15th, 1922, re- . solved:

“That should the treasurer at any future time and at his pleasure withdraw from active management of the company’s affairs, his stockholdings in the company shall be purchased by the Charles E. Hedden Company at the book value per share at the closing of business for the fiscal year ending December 31st preceding his intention to withdraw and date of resignation.”

At that time there were three directors, Charles E. Hedden, Walter J. Dozier and Harold E. Eisher. Complainant was a stockholder. The directors and the complainant held all the capital stock. Later the board was increased to four and the complainant was added as a member. At a meeting of the directors held January 15th, 1924, Mr. Dozier, treasurer, moved that the company purchase his stock pursuant to the cited resolution, at the book value as of the preceding December 31st, as shown by the treasury report then submitted, $65,209. The motion was lost, two directors voting for and two against it—the complainant voting no. Mr. Dozier resigned as director, vice-president and treasurer, and immediately after the meeting surrendered the certificate of his shares of stock, drew the company’s check to his order for $65,209 on the company’s bank and withdrew that amount, presumably by virtue of the resolution of August 15th, 1922, and presumably conformably therewith. „ There is an allegation that the sum withdrawn is greatly in excess of the actual book value of the shares. The prayer is to void the resolution and the return of the money.

The illegality of Dozier’s conduct is not questioned, the only objection to the bill being that the complainant cannot, as stockholder, on behalf of the company bring the action; that only the company can sue. Nor is there any controversy as to the rule that in order to maintain a suit in a representative capacity, such as a stockholders’ suit, it is essential to the complainant’s case that he allege and prove either a request upon, and a refusal by, the corporation to sue, or such a situation as would make certain that such request, if made, would be denied, or, if granted, that the litigation would be under the direction of persons opposed to its success. 3 Pom. Eq. Jur. (3d ed.) §§ 1094, 1095; Willoughby v. Chicago Junction Railways Co., 50 N. J. Eq. 656; Appleton v. American Malting Co., 65 N. J. Eq. 375; Groel v. United Electric Co., 70 N. J. Eq. 616; Goodbody v. Delaney, 80 N. J. Eq. 417; Hitchcock v. American Pipe and Construction Co., 89 N. J. Eq.440. Complainant claims that the bill meets the requirement of the rule by the showing that the board of directors (of which he was not a member) approved the resolution for the unlawful diversion of the corporate funds. This cannot be seriously disputed unless countervailing inferences are permissible from the later action of the board of directors of January 15th, 1924, refusing assent to the execution of the earlier resolution. The moving defendant argues that it is to be presumed that of the two negative votes his was not one, and that, consequently, he having resigned, it is to be presumed that a majority of the directors remaining are1 opposed to his conduct complained of. While that may be, it is not to- be inferred that they will authorize suit, or, if authorizing, will prosecute it seriously. It does not follow that having for the time being interrupted the execution of the unlawful resolution they will pursue and destroy it. They did not repudiate or attempt to rescind or abrogate it, but merely refused to yield their assent to■ its performance at that time. The resolution was self-operative, in that the terms were fixed, and all that was needed for its accomplishment was the will of Dozier. No further consent of the directors was required, and, presumably, he acted accordingly. ^ The presumption arising from the action of the board in the resolution of August 15th, 1922, is not, in my judgment, overcome by the later action in January, 1924.

Counsel for the moving defendant professes that his motive for the present motion is that his client will be in a more advantageous position to' retain the diverted funds if the action be prosecuted by the corporation; how he has not divulged; but if this be so, and the corporate funds have been illicitly abstracted, then all the more reason why the bill should be sustained, for, after all, though, in legal contemplation, the company as a legal entity is the injured party, the real sufferers are the stockholders.

Motion denied.


text:
    Christella Scotland, complainant, v. Joseph H. E. Scotland, defendant.
    [Decided May 9th, 1924.]
    1. A decree for maintenance will not be vacated unless the husband’s efforts to terminate the separation are appropriately and sincerely made.
    2. Qutrre. Is such an effort made more than two years after the decree of separation legally available?
    On petition to vacate final decree.

      Mr. George A. Douglass, for the petitioner.

      Mr. Theodore G. Hindenlang, for the respondent.
   Backes, V. C.

This aged colored couple were married in 1888 and have a family of grown children. The husband deserted his wife and home in 1915. A few days after, they entered into a separation agreement by which she was allowed $40 a month. In January, 1919, the wife filed her bill for maintenance, in which she charged a course of cruel and abusive treatment, assaults, the desertion, and his defaults in the payment of the allow’ance. The case was undefended, and a decree wras entered w’hich recites that the husband, without justifiable cause, abandons his wife, and fails and neglects to support her, and ordered him to pay her $40 a month. The husband nowr wants to vacate the decree and to dismiss the bill because, as he alleges, he has made an honest effort to become reconciled with his wife, and that she refuses his advances. He. called upon her once in February, 1922. Personally he made no effort before and none since. He sent some friends to intercede, and to him and them she gave the same answer, in substance, that she did not want to live with him again. In July, 1920, shortly after the maintenance decree, he filed a petition for divorce, alleging desertion in April, 1917. The case was contested, and dismissed in December, 1921. Within two months he called on his wife, with a white man, and I repeat what he said occurred. “I said, ‘Good evening, Mrs. Scotland—Christella, I have. come to see you on an important matter of interest to us both. We are both getting older. We have been living apart, and I think we ought to forget our differences and bury them, and let us get back together and live.’ She then said to me, ‘Not until you pay me what you owe me, you and that rascal of an attorney of yours has robbed me. When you pay me I will talk to you.’ I said, ‘It isn’t a matter of money now,’ I said, ‘This is my home,’ and I said, ‘I am alone and I need the comfort of a wife,’ and I said, ‘We can forget our differences.’ She says, ‘No;’ she is getting along well and she is doing well, and from all appearances, she says, I am being taken care of. I said, ‘Nothing of the kind;’ I said, ‘I want to make a home here, and if this is not satisfactory to you we can get a home somewhere and live the balance of our days,’ and she said, ‘No;’ and I spoke to her several times with reference to it, and then she said no several times, and I said, ‘Well, is it final?’ She said, ‘Yes;’ she sa3rs, ‘You haven’t come to1 me in the proper attitude.’ I said, ‘What do you mean?’. I suppose it is because she can say there was a friend with me.”

I decline to vacate the decree because I am not convinced that the advances were sincere, and if they were made in earnest they were not such as the circumstances and law require.

The offer was studied, stilted and stupid. It came from the lips, not the heart; from a recreant, not a penitent. He had left her cold several years before to shift for herself on a mere pittance. During all that time he ignored her, was insensible to her existence and indifferent to her distress. He had just been defeated in an effort to be rid of her, and on grounds he knew were false. He brought with him a white man to bear witness to his tender, barren of repentance or contrition or promise—just words, in which, he doubtless had been tutored in the then recent divorce litigation. The wife, a woman of experience and spunk, and justly bitter, sensed his spirit and motive and insincerity, and resentfully and rightly spurned his abrupt and hollow offer, not as a finalitjq but, as she accurately and exquisitely summed up the whole situation, “You haven’t come to me in the proper attitude.” He has'not availed himself of the implied invitation. He need not bend the knee but he must, at least, bow the head before he can hope for relief there or here. Sending friends to sound her out is poor taste. She was not called upon to disclose to them her true feeling, and her replies count for little or nothing.

The husband’s conduct does not indicate that he had experienced a change of heart. The acute attack smatters of the purpose of laying a foundation for another divorce action. In fact a second petition to that end was filed and recently dismissed.

The wife’s offer to negotiate if he would pay her what he owed her, refutes the idea of unwillingness to return to him, and the condition was not unreasonable. She had been dependent upon the allowance of $10 a week and her own labors for existence. She did not get all the allowance, through his default or misappropriation by her lawyer. She claimed there was due her $500. A shortage of $246 is admitted. He could have made up the deficiency, he was well able to give her a larger allowance. A more generous spirit and thoughtful consideration in the past might have made the way back easier.

The point was not made at the hearing, but it suggests itself, that the wife was not obliged to entertain his offer. Oertel v. Oertel, 92 N. J. Eq. 327. He willfully and obstinately deserted her in 1915, and the desertion continued for more than two years. Her right of action to a divorce was vested (Gordon v. Gordon, 89 N. J. Eq. 535) unless the separation agreement interrupted the continuity. A desertion may be willful and obstinate notwithstanding such an agreement. Power w Power, 66 N. J. Eq. 320.


text:
      Simon Goldstein, complainant, v. Samuel T. Ehrlick and Tillie Ehrlick, defendants.
    [Decided May 28th, 1924.]
    1. Where a contract for the sale of land provided that the buildings on said premises are all within the boundary lines of the property described in the deed, and the proofs show that they are not, the vendee is entitled to rescind and a return of his money paid, and may have a decree making it a lien on the premises.
    2. Padlock proceedings under the National Prohibition act are a cloud on the title sufficient to prevent the enforcement of a contract of sale.
    3. The act of 1915 (P. L. p. 316) gives a right of recovery for search fees in actions for breach of contract against the vendor upon failure of title, but such right is not a specific lien on the land involved in the suit, but equity will award them as incidental to other equitable relief.
    On final hearing.

      Mr. Nathan II. Barger, for the complainant.

      Mr. Philip J. Schoiland, for the defendants.
   Backes, V. C.

The defendants agreed to sell to the complainant properties facing on Halsey, Court and Nevada streets, Newark, in the business section. The contract provided “that the buildings upon said premises are all within the boundary lines of the property as described in the deed.” The proofs show they are not. They encroach on Halsey street one and a half inches, on Court street two and five-eighths inches and on Nevada street one inch. Padlock proceedings under the “National Prohibition act” also are pending in the federal court against one of the properties, a saloon, and the tenant is under injunction to refrain from violating the act. Eor these reasons the complainant refuses to take title and sues for the return of his down money, $1,000, and $30 laid out for searching the title, and prays that these sums be declared a lien upon the properties.

The complainant is entitled to rescind and a return of his money. He is not obliged to take the title with the encroachments. They are slight, but, neverthless, substantial, and specific performance would not be decreed against him. Doutney v. Lambie, 78 N. J. Eq. 277; Herring v. Esposito, 119 Atl. Rep. 765. The padlock proceedings are a cloud upon the title sufficient to prevent the enforcement of the contract. Dobbs v. Norcross, 24 N. J. Eq. 327; Van Riper v. Rickersham, 77 N. J. Eq. 232; Kohlrepp v. Ram, 79 N. J. Eq. 386. A valid reason for refusing specific performance, such as a defect in the title, warrants a rescission of the contract.

There were negotiations, and it was arranged that the complainant would take title upon the defendants giving an indemnity bond. The complainant claims that the defendants refused to give the bond, while the defendants insist that the complainant refused to 'take it. I need not decide this issue of fact. The complainant was entitled to the property according to the terms of the contract. He was not bound to take the bond. If he, in fact, consented to take it in lieu of a good title, he had the right to change his mind.

The complainant is entitled to a decree for $1,030, and a lien upon the premises for $1,000. The act of 1915 (P. L. p. 316; 1st. Supp. Comp. Stat. p. 472) gives a right of recovery for search fees in actions for breach of contract against the vendor upon failure of title, but not a specific lien therefor on the lands. Ordinarily, the fees would have to be recovered at law, but equity will award them as incidental to other equitable relief.


text:
    The Evening Journal Association, complainant, v. Jersey Publishing Company et al., defendants.
    [Decided May 28th, 1924.]
    1. A geographical name is not the subject of exclusive appropriation, but an established trade, of which it is the badge, will be protected against unfair competition by the use of the name, and if such a name, so used as a 'badge of trade, be taken by another with intent to mislead the public, to the injury of the complainant, equity will enjoin, even though, otherwise, he would have the right to use it.
    2. If no fraudulent intent in the adoption of a trade name appears, equity will relieve if the use of such name by another confuses and misleads the buying public to the injury of the complainant. Diversion of a complainant’s trade by the use of the name is fraudulent; neither actual confusion nor actual fraudulent intent need be shown where’ the necessary. and probable tendency of the defendant’s conduct is to ■ deceive the public and pass off his goods or business for that of the complainant.
    8. Where a newspaper called the “Hudson Observer” changed its name to the “Jersey Observer,” there being at that time another newspaper in the same locality called the “Jersey Journal,” such change of name is not an infringement on the rights of the “Jersey Journal.”
    On final hearing.

      Mr. Robert Carey and Mr. Harry Lane, for the complainant.

      Mr. John J. Fallon and Mr. Joseph Kahrs, for the defendant.
   Backes, V. C.

This litigation is between owners of two afternoon newspapers published in Jersey Gityr, and the object of the bill is to restrain unfair competition.

The “Jersey Journal” is an old-established, prosperous newspaper, and the “Jersey Observer,” lately the “Hudson Observer” and formerly the “Hoboken Observer,” is of no less standing and success. They have about the same circulation and in the same territory, in Hudson county and New York City, at the tubes, railroad stations and ferries. The “Jersey Journal” is popularly known as the “Jersey,” so dubbed by the public after the “New York Evening Journal” came into prominence some years ago-. Its title was at that time changed from “Evening- Journal” to “Jersey Journal,” to distinguish it from that newspaper. The “Jersey Observer” is popularly known as the “Observer.” The owner of the “Jersey Journal” objects to the use of the prefix “Jersey” by the “Observer,” which the latter recently adopted, claiming that “Jersey” is a. valuable asset in the publication and circulation of its newspaper, and charging that the sole intent of the owner of the “Observer” in changing “the name of its newspaper from that of ‘Hudson Observer’ to ‘Jersey Observer’ is for the purpose of defrauding complainant and the public, and with the deliberate intent to mislead, defraud and deceive the public into 'believing that it was purchasing the newspaper of complainant instead of the newspaper of the defendant, and for the deliberate and sole purpose of, and the putting into execution of, a plan, design or scheme to cut and curtail the circulation of the newspaper published by complainant, to defraud and mislead and deceive the public, and to induce the piiblic to believe when they ask for the ‘Jersey’ into buying the newspaper of the defendant instead of the newspaper of complainant, and to injure and curtail the circulation of complainant’s newspaper.”

A geographical name is not the subject of exclusive appropriation, but an established trade of which it is the badge, will be protected against unfair competition by the use of the name. VanHorn v. Coogan, 52 N. J. Eq. 380. If such a name so used as a badge of trade be taken by another with intent to mislead the public to the injury of the complainant, equity will enjoin, even though, otherwise, he would have the right to use it. International Silver Co. v. William A. Rogers, 67 N. J. Eq. 646; Eureka Fire Hose Co. v. Eureka Rubber Co., 69 N. J. Eq. 159; Cape May Yacht Club v. Cape May Yacht and Country Club, 81 N. J. Eq. 454. If no fraudulent intent in the adoption of the name appears equity will relieve, if the use of sueli name by another confuses and misleads the buying public to the injury of the complainant. Diversion of complainant’s trade by the use of the name is fraudulent. Wirtz v. Eagle Bottling Co., 50 N. J. Eq. 164; Johnson v. Seabury, 69 N. J. Eq. 696; Rubber and Celluloid Harness Trimming Co. v. Rubber Bound Brush Co., 81 N. J. Eq. 419; National Biscuit Co. v. Pacific Coast Biscuit Co., 83 N. J. Eq. 369. Neither actual confusion nor actual fraudulent intent need be shown where the necessary and probable tendency of the defendant’s conduct is to deceive the public and pass off his goods or business as and for that of the complainant. Hilton v. Hilton, 90 N. J. Eq. 564.

Proof of any express intention to pirate the complainant’s trade is, of course, not at hand, and, ordinarily, is not to be expected. Is intentional fraud inferable from the circumstances? The outstanding facts refute such an inference. To deduce the intention to mislead the public into believing that the defendant’s newspaper is the complainant’s sheet, for that is, essentially, the accusation, would be to assume that the “Observer” concedes it is inferior and is outclassed, and aims to forsake its individuality and identity and parade as the “Journal;” in fine, that it admits it is an imitation. Such an attitude on the part of the “Observer”-—quite as popular and influential as the “Journal,” and as justly proud and jealous of its own good name and reputation—is altogether out of the question. Powerful and successful and well established, its predominant care is, it would seem, to be sustained by its own past achievements, and to thrive and extend its activities and influence as the “Observer”—not as the “Journal.” The explanation of the defendant for the change of name from the “Hudson Observer” to the “Jersey Observer” is in harmony. It sought to raise itself in the eyes of the public, and, particularly, of its New York and other adA^ertisers, from what might appear to be a burg or provincial organ to one of the city or state-wide sphere, i. e.. eclat.

The other question is whether because of “Jersey” the “Observer” is apt to bo mistaken by readers for the “Jersey Journal;” or, in other words, whether the use of the name “Jersey Observer” is likely to deceive ordinarily cautious purchasers, buying with such care as would usually be exercised in such transactions, leading them to believe that they were buying the “Jersey Journal.” This is highly improbable except in isolated instances, and then only momentarily or accidentally. The chances are infinitely less than in the case of imitations in merchandise, involving a less cultured and discriminating public. Readers, as a rule, are keen for their accustomed newspaper, and are as intimately familiar with it as men are with their particular brand of cigars, or as ladies with their favorite perfume, and sorely disappointed if it fails them. It is inconceivable that a reader of the “Journal” could be lured into believing that it was the “Observer,” and vice versa-. A glance at either would be enough. Their makeups are, radically different; their names are prominently displayed and in type that bears no resemblance, and while they are both known to be independent politically, with opposite partisan leanings, the political sentiment of one could hardly be mistaken for the other, and, for additional identification, the “Observer” carries its title at the head of each page.

It is not seriously claimed, nor could it be, that the reader is deceived, but the “Journal” complains that its patrons are likely to be led into buying the “Observer” by the manner of its display at' news-stands, folded as the “Journal” is, and alongside of it, with only “Jersey” exposed, and- more likely at the rush hours at the tubes, railroad stations and ferries when the commuter helps himself, or, asking for the “Jersey” is given the “Observer.” Pine discrimination is not expected of purchasers, but ordinary caution is, and in such circumstances the fault would lie with the newsdealer or the commuter, and may be easily remedied by spreading both papers, or by the most casual inspection, and, no doubt, would be corrected after a once happening and a “kick.” Equity affords protection against injurious deception, not mishap, nor where ordinary care would avert confusion.

Another source of complaint is that newsboj^s, carrying both papers, crjr out their ware as of old “Jersey-Observer,” and so pronounce the full name of the “Observer” and obscure the “Journal.” This is unfortunate, but how chargeable to the “Observer,” if it has the right to use “Jersey?” If the complainant truly interprets the newsboys’ call, there is no confusion, and unless it be shown, and it is not, that the “Observer’s” forename was purposely selected to usurp the “Journal’s” nickname in the street, I fail to see how the name can be denied the “Observer.” Jessel, M. R., said of the complainant in Cowen v. Hulton, 46 L. T. R. (N. S.) 897: “He has a right to the name by which he sells his paper, but not the name by which people choose to call it.” Moreover, in view of the “Journal’s” previous and admitted notoriety as the “Jersey,” it seems a strange assertion that those to whom it is so well known by that cognomen would not recognize it in the newsboys’ call.

Again, it is claimed that “Jersey” facilitates newsdealers and newsboys palming off the “Observer” for the “Journal.” A complete answer is that any unscrupulous handler can impose upon an unsuspecting buyer, not only the “Observer,” but any other newspaper as readily. Ordinary care—a squint at the paper—would frustrate it.

That “Jersey Observer” is not an infringement upon “Jersey Journal” is illustrated by the following authorities in litigations over newspaper names, the first mentioned being the name sought to be protected:

“The New Castle Chronicle” and “Sporting Chronicle.” Cowen v. Hulton, 46 L. T. R. (N. S.) 897.

“Morning Post” and “Evening Post.” Borthwick v. Evening Post, 37 Ch. Div. 449.

“Evening Express” and “North Express.” Wilcox v. Pearson, 18 T. L. R. 220.

“The Mail” and “The Morning Mail.” Walter v. Emmot, 54 L. J. Ch. (N. S.) 1059 (1885).

“National Advocate” and New York National Advocate.” Snowden v. Noah, 1 Hopk. Ch. 347 (N. Y.); 14 Am. Dec. 547.

“The Commercial Advertiser” and “New York Commercial.” Commercial Advertiser Assn. v. Haynes, 49 N. Y. Supp. 938.

“Our Young Polks” and “Our Young Polks Illustrated Paper.” Osgood v. Allen, 18 Fed. Cas. 871.

The bill will be dismissed.


text:
    Mabel A. Smith, petitioner, v. Joseph E. Smith, Jr., defendant.
    [Decided May 29th, 1924.]
    1. The law of divorce requires corroboration of the petitioner’s testimony, even if the court believes it to be true without corroboration.
    2. Corroboration in suwh cases may be slight, and may be furnished by surrounding circumstances, adequately established, to justify a decree.
    On exceptions to master’s report.

      Mr. Charles S. Smith, for the exceptant.
   Backes, V. C.

This is a suit for divorce on the ground of extreme cruelty, under chapter 187 of the act of 1923. P. L. 1923 p. 494. The petitioner sets forth a course of cruel and brutal treatment, categorically and in detail, beginning shortly after the marriage in 1915 and continuing until the wife separated in 1923. The suit was begun November 30th, 1923. The allegations are proved by the testimon}^ of the wife, and of the truth of it I have no doubt, and of the fact of extreme cruelty there can be no question. The failure of the husband to deny the charges (few self-respecting innocent husbands would let them go unchallenged) is an implied confession of their truth. But the law demands more proof in divorce cases. It requires corroboration of the petitioner’s testimony, though it be believed without corroboration. Belief in the truth of the charges must rest in part upon other evidence tending to prove the offense.

The master felt that the corroborating testimony was not adequate and reported against a divorce. The corroboration is meagre, but it is enough, in my judgment, to satisfy the rule. The appearance of the wife, flushed, excited and in tears, crying out the reason therefor instantly after some of the assaults, and as part of them, testified to by three or four witnesses, support what she says took place behind doors; the husband’s one-time artful explanation of an assault that “we were only fooling;” his long spells of surliness after assaults; his promise after an assault, and being chided for his conduct, to mend his ways; his wife’s hasty retreat from her home and her return to her father’s after the last assault and the husband’s admissions that he was responsible for the separation; his failure to make amends; his public denunciation of his wife and his threats to rid himself of her, all testified to by dependable witnesses, bear out the petitioner’s story of flagrant abuse. The rule of corroboration required no more, if nothing more can be produced, and it rarely can in cases of this sort of marital misconduct, usually committed under cover and suffered in silence. Chancellor Walker, in Lasker v. Lasker, 91 N. J. Eq. 352, says; “The doctrine that corroboration of petitioner’s testimony need not be by witnesses to every fact, but that if sufficient corroboration exists as to certain facts the testimony may be accepted throughout, is made to relieve petitioner in a case of hardship, where she would be defeated for want of corroboration of facts which it is impossible to obtain.” And, in Meek v. Meek, 92 N. J. Eq. 23, he declared “that the corroboration of the testimony of a petitioner, reqinred by law in order that a divorce may be granted, need not be that given by another or other witnesses, trat may be furnished by surrounding circumstances adequately established.”

The exceptions will be sustained and a decree advised.


text:
    Dorothy Nagle, complainant, v. Harry Conard et al., defendants.
    [Decided June 2d, 1924.]
    1. Where there are existing uncompleted trusteeships in land the land cannot be partitioned.
    2. The rule of res judicata was invented to promote peace, not to deny justice, and docs not apply to a second suit between the parties for a different cause of ac-tion as to issues not heard and decide’dl.
    3. Where trusteeships are completed, the land concerned in them may he partitioned, if no contrary reason exists.
    On motion for a decree for partition.

      Mr. Merritt Lane, for Dorothy Nagle; Mr. Joseph E. Strieker, for Eleanor Lynch, for the motion.

      Mr. Adrian Lyon, for Harry Conard et al.
   Backes, V. C.

The history of this litigation leading up to the present motion will.be found in Vice-Chancellor Howell’s opinion. 7.9 N. J. Eq. 124; affirmed, 80 N. J. Eq. 252.

The complainant, daughter of Peter Nelson, deceased, filed the. bill to construe her father’s will in respect of two matters, whether she came within the word “children” in the fourth, fifth, sixth, seventh and eighth paragraphs, and whether the deceased died intestate as to the fee of the lands described in the third, fourth and sixth paragraphs. Pertinent parts of the will are quoted in the opinion. Eleanor Lynch, a grandchild, filed a cross-bill charging that the deceased died intestate of the lands, and prayed a partition. Dorothy Nagle, as assignee, also filed a bill to foreclose the ten-thousand-dollar mortgage mentioned in paragraph 6 of the will. Nagle v. Sondergaard, 79 N. J. Eq. 124.

The cases were heard together, and the vice-chancellor found, and it was accordingly decrepd, that Dorothy Nagle was included in the word “children;” that the deceased died intestate of the fee; that Eleanor Lynch inherited and was entitled to partition; that the heirs were the three children of the deceased and the grandchild, daughter of a deceased child, and that they were seized each of a quarter interest, and that there were outstanding estates in the trustees, and that therefore there could be no partition until the trusts were executed, • and that they would terminate when the youngest child of the deceased reached twenty-one, until which time partition was deferred. It was also held and decreed in the foreclosure, suit that, because of the trust to pay the mortgage out of the income of the property described in the sixth paragraph, it could be made only out of the life estate and the income. The youngest child is now twenty-one, and Eleanor Ljmch moves for a decree of partition and sale. The moving papers include only the lands described in paragraphs 4 and 6, but on the hearing leave was given to add those described in paragraph 3. The trustees and Karl and Ellen Nelson resist the motion, and maintain that the lands are not yet partable, because the trusteeship is not at an end, to which Eleanor Lynch and Dorothy Nagle reply, res judica,la, by the decree. I am of the opinion that the reply is good as to the lands described in paragraph 4 of the will, but not as to those described in paragraphs 3 and 6.

It will be observed that by the third paragraph of the will there are trusts to pay out of the income (a) to the widow $200 monthly for life (she is living); (&) to discharge a mortgage, which has been done,, and (c) to1 accumulate the balance and par- it to the widow and her children (Karl and Ellen) when the youngest is twenty-one. The trust in the fourth paragraph is to accumulate the income and pay the interest thereof to the widow, and the corpus to the widow and the children when the youngest is twenty-one. The sixth paragraph directs the income, after the death of the life tenant (lie is dead), to be used to extinguish the tentliousand-dollar mortgage, the balance to be paid (now in effect) to the children when the youngest is twenty-one. The mortgage is still unpaid.

If the opinion and the decree be accepted at their face value, then the widow’s life right in the income of the land devised in trust by the third paragraph is at an end in spite of the clear language of the gift to the contrary, as is also the lien of the mortgage on the income of the lands devised in trust by the sixth paragraph, but when we read the opinion and the decree in the light of the pleadings and the questions submitted to this court and the court of errors and appeals, it is at once apparent that the life of these two trusts were not within the issues and were not litigated or adjudicated. Eor confirmation, I quote from the brief of counsel for Dorothy Nagle filed in the court of errors and appeals:

“The questions which were presented to the court below for determination were four.

“1. Whether the testator died testate or intestate of the property, real estate, above referred to.

“2. Whether Dorothy Nagle, the-complainant, is included in the word children in the fourth, fifth, sixth, seventh and eighth paragraphs of the will.

“3. Whether Eleanor Lynch, the grandchild, has an interest in the property, and whether that interest, if any, can be enforced by partition.

“4. In case of intestacy as to the whole or any part of the property what the relative rights of the parties are.”

These were the only matters put in issue by the pleadings and considered and decided by this court and the court of errors and appeals.

The defenses now offered to a decree for partition at this time, that the trusts estates, to. pay the widow $200 monthly for li fe, contained in the third paragraph, and to pay off the ten-thousand-dollar mortgage as provided by the sixth paragraph are outstanding, obviously, were not involved. The court was concerned only with the trusts running to children of the deceased, and the decree “that the trusts created by the last will and. testament with respect to these properties [described in paragraphs 3, 4 and 6] are valid and active trusts, and continue until all the children of the said Peter Nelson then living shall arrive at the age of twenty-one years; and said properties are subject to' said trusts," simply marked the time when the trust relations as between the trustees and the children terminated. The trust relations between the trustees and the widow, and between the trustees and the holder of the mortgage, were things apart from the adjudication, and air interpretation of the decree that would include and destroy them upon the theory of res judiada, though its broad language would admit of it, would be indefensible. The rule of res judiada was invented to promote peace, not to deny justice. The principle, is authoritatively settled that a decree or judgment on a matter outside of the issues raised by the pleadings is a nullity and is nowhere entitled to the least respect as a judicial sentence. Jones v. Davenport, 45 N. J. Eq. 77. In a second suit between the.same parties for the same cause of action all triable matters within the issues are res judicata. In a second suit between the same parties for a different cause of action only those matters within the issues actually litigated and determined as res judicata. 15 R. C. L. Judgments, ¶¶ 429, 438, 450, 452. Whether this motion be regarded as within the first or second propositions—I think it comes within tire second—the result is the same. The issues here tendered were not presented.

Moreover, it is perfectly plain that the decree was not intended to affect the trusts now under consideration, for in deferring partition until the trusts were terminated right was reserved to the parties to apply for further construction of the will. It remains to be decided that they are still active, and, in the language of Vice-Chancellor Howell, “this trust [these trusts] cannot be disturbed, nor can the executors or trustees be deprived of the possession of the property until the determination thereof according to the terms of the will, and, consequently, there can be no partition" at this time.

The property described in paragraph 4 is ripe for partition.

The testator conveyed to the complainant, Dorothy Nagle, his homestead, worth, it is agreed, $11,250, which, it is claimed, was an advancement, to be accounted for in the' inheritance. Comp. Stat. p. 1917. The testator refers to it in his will as follows:

“ninth. As I have deeded the old homestead to my daughter Dorothy Nagle, and she has had the full revenue and rents of the same for a number of years, I consider she has received all she is entitled to, as I consider her share is equal to the other children.”

Assuming it to have been an advancement, the testator himself squared it by giving to the other children, Karl and Ellen, what he regarded as an equivalent, viz., two-thirds of the residue of the income of the property described in the third paragraph of the will. He also provided specifically for Eleanor Lynch. See Hattersley v. Bissett, 51 N. J. Eq. 598; Vreeland v. Vreeland, 65 N. J. Eq. 668.


text:
    The New Jersey Zinc Company, complainant, v. Sayre Fancher et al., defendants.
    [Decided June 13th, 1924.]
    1. A decree in a former suit to quiet title to the land involved in a later suit is binding upon the parties, and their successors in title, for the land described in the former suit, and is res judicata where the locus in quo in both suits is identical.
    2. Evidence examined, and held that the locus in quo in both suits is identical.
    On final hearing.

      Messrs. Pitney, Hardin & Skinner (Mr. Alfred F. Skinner), for the complainant.

      Messrs. Morns é Forming (Mr. Boleri H. McCarter, of counsel), for the defendants.
   Backes, V. C.

In Graves v. Fancher et al., 81 N. J. Eq. 407; affirmed, ibid. 517, a bill to quiet title, decided in 1912, the title- to- the land involved in this suit—Wawayanda lake, in Sussex county—was held to be in the- complainant in fee, and it was accordingly decreed that the defendants “have no- title, interest in or encumbrance upon the same o-r any part thereof,” and as against the defendants that “the title of the complainant, in and to the same, and every part thereof, is hereby determined, fixed and settled and declared to be good.” The land involved is described as:

“All the lands lying on the southwest side of the road leading from the Wawayanda furnace to Vernon covered by the waters of the Wawayanda lake at any height of said waters from low to high-water mark, said high-water mark being a straight line cut into the rock near the southern end of the main dam of the Wawayanda lake, and above said line is cut the letters H. W., and also all the lands lying on the northeasterly side of the road leading to- Vernon as aforesaid [said lands being part of the farm known as the Banta farm], covered by the waters of the- Wawayanda lake at any height of said waters from low to high-water mark, said high-water mark being determined as aforesaid.”

In 1871 the Thomas Iron Company owned Wawayanda lake and the lands bordering on it, not including the Banta farm of one hundred and twenty-six acres, owned by John Rutherfo-rd. The lake was dammed and the water used to supply power to the company’s mills. Some time between 1871 and 1875 the company took out the old dam and put in a new one some two- feet higher, the effect of which was to back the water on the Banta farm. To avoid trespassing the company purchased from John Rutherford, by deed dated April 22d, 1871, the right and privilege of flowing with water the lands above described “with the appurtenances and all the estate, title and interest of the said parties of the first part therein.” The deed was held to pass the fee. In 1911, when the Graves-Rancher suit was begun, the title to the Thomas Iron Company property was in Nelson Z. Graves, and that of John Rutherford to the Banta farm was in the Ranchers.

The Graves title is now in the complainant. The Rancher title is in the defendants. The complainant sues to restrain the defendants from trespassing on the lake by fishing, boating-, cutting ice, &c.

It is admitted that the title to the land is settled, but the defendants deny that the location of the land is res jucbicata by the decree in the former suit. The position is not sound. The locus in quo there involved is the one now invaded, and as peaceable possession thereof was sine qua non to the jurisdiction of the court, the decree as conclusively establishes the location as it does the title. The question of location was inherent in the cause and indispensable to- the judgment. The fact that the court decided that the complainant’s title rested in fee was not a limitation of its broader decision that his title to the locus in quo was good as against the defendant. City of Paterson v. Baker, 51 N. J. Eq. 49.

Testimony was offered as to the location of the bench mark—the "straight line cut into the rock near the southern end of the main dam of the Wawayanda lake and above said line is cut the letters H. W.,” and to prove that the surveyor who located it- in 1911 on the rock near the southern end of the main dam, and by whose testimony the locus in quo was established in the former suit, and which was reiterated here, erred. The purpose was to substantiate the defendants’ claim that the water was at that time and now is higher than the true bench mark which they seek to place at a lower level, and that they have the right to go upon and use so much of the lake as flows their land in excess of that mark.

■The surveyor who located the bench- mark in 1911 on a rock near the dam, after it was shown to him by a witness, who said it had been previously pointed out to him by another as the mark, adopted it for his survey of the lake, which he made when the ice was at the height of the bench mark, and to which, the survey conformed. The survey was used in the former trial and at the hearing here to denote the locus in quo. The surveyor and the witness again located it shortly before this suit was brought, described it as somewhat fainter, and for future identification inserted a brass pin at the point in the rock. Defendants’ witnesses say there was no' such visible markings on the rock, and the state geologist expressed the opinion that if any had been made within the past hundred years it could have been obliterated because of the nature of’ the rock. Other witnesses testified that there had been, or they were told there had been, a stone with such markings in the face of the old dam, at that time some two feet lower than the supposed markings on the rock, but no importance can be attached to it for, manifestly, tire Rutherford fiowage deed of 1871 refers to a new and higher bench mark. None of the defendants’ testimpny is entertainable. Whether the surveyor and the supporting witness found on the rock characters corresponding to the bench mark of the Rutherford fiowage deed, and whether they are in fact those referred to in the deed, is of no consequence at this time. The authenticity of the bench mark as proved in the former suit, and by which the locus' in quo was then established, was there conceded by the defendants, at least they did not dispute its genuineness. They had their day in court and are estopped from again litigating the point.

Shortly after John Rutherford made the fiowage deed, April 22d, 1871, the Thomas Iron Company, September 22d, 1871, conveyed to Rutherford a tract of thirty-nine acres adjoining the Banta farm on the southeasterly side, the title to which is in the defendants, and was in them or their privies when the Graves suit was begun and decided. They claim this tract extends into the lake, and that as there was no reservation of fiowage right in the deed, they are not trespassers to the extent of their title under water. The nineteenth course of this tract is tied into the fourth course of the Banta farm at a point landward of high water fixed by the deed from Rutherford to the Thomas Iron Company, April 22d, 1871. The two courses meet at a sharp angle, and that point is the nearest approach of the tract to the lake. Obviously, there was no reservation of a right of flowage. But if the title of this tract extends into the lake, beyond the high-water mark, the defendants are barred by the decree in the Graves suit. They were called upon by that bill to defend a.11 their rights. They made no claim under their title to the thirty-nine acres, and it is now too late to assert it.

It was suggested but not discussed that the former suit involved only a strip of land between high and low-water mark—a ring around the lake—and that as the defendants’ title extends beyond the strip, they have a right to cross it as of necessity. A way of necessity may be reserved to a grantor by implication. Lewis v. Seymour, 13 N. J. Eq. 439. The bill was plainly to quiet title to all lands covered by Wawayanda lake to high-water mark, and the point, if it had any merit, is now without force.

The complainant is entitled to an injunction.


text:
    Louis Schmeider et al., complainants, v. Clarence D. Meyer et al., defendants.
    [Decided June 13th, 1924.]
    1. A bequest in remainder to children after the death of widow is vested, though grandchildren take by substitution if a child dies before the period of distribution.
    2. The period of distribution may be advanced or accelerated by the widow surrendering her life interest to the remaindermen.
    On final hearing.

      Messrs. Stamler, Stamler & Ko>estler and Mr. Charles L. Morgan, for the complainants.

      Mr. Charles D. Meyer, for the defendants.
   Backes, V. C.

Frank Sehmeider left the residue of his estate to his executors in trust, to' pay one-third of the income to his widow for life, during widowhood, and the balance to his four children, and “after the death of my said wife ray said estate shall be divided equally between my said children, share and share alike; and if any child dies leaving lawful issuer such grandchild or children shall receive the share or portion of the parent.”

The widow, stepmother and the children are at loggerheads, and she has agreed to sell to them her interest in the estate for a lump sum, and the executors-trustees are agreeable and willing to terminate the trust if that may be done lawfully.

The children have a vested estate in the remainder. That has been held repeatedly, and only recently in Sampson v. Sampson, 2 N. J. Adv. R. 946.

Whether the gift over to’ grandchildren relates to the death of a child in the lifetime of the testator, as the complainants contend, and I think correctly; or whether in the event of such death before the period of distribution there would be a divestiture in favor of grandchildren, as claimed by the trustees, in support of which they cite Security Trust Co. v. Lovett, 78 N. J. Eq. 445, and other cases, it is unnecessary to decide. The parties interested may accelerate the date of distribution. They may bring the trust to an end by mutual agreement. The widow may decline, to take under the will and thus terminate the trust, or she may surrender the benefits thereunder to' the remaindermen, which will have the same effect. There can be no legal objection to such action, for she has the right to sell, assign or mortgage her equitable life interest or to forego it altogether. Beideman v. Sparks, 61 N. J. Eq. 226; affirmed, 64-N. J. Eq. 374; In re Woodburn’s Est., 151 Pa. 586; Randall v. Randall, 85 Md. 430; In re Schulz, 113 Mich. 592; Yeaton v. Roberts, 28 N. H. 459; Lawrence Est., 76 N. Y. Supp. 653.

A decree will be advised directing the trustees to convey the estate to the children on satisfactory releases from them and the widow.


text:
    D. Frederick Burnett et al., executors, &c., complainants, v. Elizabeth Lawrenz Witschief et al., defendants.
    [Decided July 15th, 1924.]
    1. Where a testator devised the residue of his real estate to his widow for life, and his executors sold a piece of it, and took back a mortgage, which they subsequently foreclosed and bought back the property at the foreclosure sale, .and later sold it at an increased price, the power of sale given the executors worked no conversion, and the mortgage taken in payment remained realty in the hands of the executors, and the net yield of the premises, whether interest or rents, belonged to the widow, but the increased price of the second sale is principal, not profit.
    2. The widow is also entitled to be relieved of her loss of income from the increased price, to be determined by the average net yearly income during the possession of the life tenant and the executors.
    3. Rent collected by a receiver in a foreclosure suit 'belongs to the life tenant.
    On bill by executors for instructions.

      Messrs. Burnett, Sorg, Murray & Duncan, for the’ complainants.

      Mr. Dclwin G. Gaff rey, for the defendant Elizabeth Lawrenz Witschief.
   Backes, V. C.

The testator gave the residue of his estate to his widow for life. At her death the remander was to be converted into cash and the proceeds divided as directed. The executors were given power of sale. They sold a piece of real estate for which they took in payment a purchase-money mortgage. They foreclosed the mortgage and bought back the property to save themselves. After seven years they again sold it at an increase over the price of the first sale. The widow now claims that the increase should be apportioned between her and the remaindermen based upon the sum of the interest that would have accrued to her on the foreclosed mortgage if it had not been foreclosed and the interest had been paid, upon the principles applied in Parker v. Seely, 56 N. J. Eq. 110; Hagan v. Platt, 48 N. J. Eq. 206; Tuttle’s Case, 49 N. J. Eq. 259, and Park’s Estate, 173 Pa. St. 190. To this she is, obviously, not entitled.

The sale of the land in the first instance, under the power given the executors, worked no conversion. It is a bare power. The mortgage taken in payment remained realty in the hands of the executors in trust for the widow and remindermen. The foreclosure sale simply vested the legal title to the land in the executors upon the same trust. Whatever of the net' yield of the premises, be it of the mortgage or of the possession of the land, belongs to the widow. The widow's estate in the land was, for the time being, limited to the income from the mortgage. During the executors’ possession she was entitled to the net yield, and now, again, she is'limited to the income on the net receipts of the last sale. The increased price of the second sale is principal, not profit. The rule of the cases cited is not applicable.

But the life tenant ought not suffer all the damage sustained by the loss of interest on the mortgage during the possession of the mortgagor. She would have had the rents if the sale had not been made and the mortgage taken. To that extent she is entitled to be relieved out of the increased price. The net income of the land for the period of default will be determined by the average net yearly income during the possession of the life tenant and the executors.

A receiver appointed in the foreclosure suit collected rent which is now in the hands of the executors. The rent was, primarily, applicable to the payment of interest on the mortgage. It belongs to the life tenant. Budd v. Littell, 30 Ky. L. R. 158; Matter of Busch Brewing Co., 41 N. Y. App. Div. 204; Law v. Glenn, L. R. 2 Ch. 634; In re Kearney (1902), 1 L. R. I. 59.


author: Griffin, V. C.

text:
    Anton J. Bohm, complainant, v. Bessie A. G. Hansmann et al., individually and as executors of the estate of Carl A. Hansmann, deceased, defendants.
    [Submitted October 15th, 1923.
    Decided November 27th, 1923.]
    1. At common law, after the delivery of the deed and the payment of purchase-money, the grantee had no right of action except upon some covenant or agreement which still subsisted as an independent and separate cause of action.
    2. Where grantee, complainant, has done nothing which would interfere with his equities accruing from the transaction, equity has jurisdiction.
    3. Where the title was searched by grantee who failed to discover a recorded deed conveying some of the lots described in the deed from defendants to complainant, this negligence is something which interferes with his equities.
    4. Where on a sale of land by executors, who gave an executor’s deed with covenant against grantor’s acts, it was afterwards discovered that some part of the land covered by their deed had been previously sold, Which defect was not discovered by the purchaser or his lawyer who searched the title, there being no fraud or 'misrepresentation of any kind made by the sellers to the buyer, the buyer, seeking equity, must do equity, and when the sellers offer to restore the status quo as nearly as possible by paying back the purchase price, with interest, after deducting therefrom the sums received by the buyer for the sale of some of the lots, and also certain expenses, upon reconveyance to them of the lots unsold, such offer is fair and equitable. Held, if the complainant refuses to accept said offer or otherwise as decreed by the court, his bill should be dismissed.
    On bill, &C.

      Mr. Frank Q. Turner, for the complainant.

      Messrs. Gwrrick & Worlendylce, for the defendants.
   Griffin, V. C.

The complainant sued the defendant at law in what, at common law, is known as an action of deceit, for fraud and misrepresentation in the sale of lands. At the trial it appearing to the court that the complainant’s remedy, if any, was in equity and not at law, the case was transferred to this court under the Transfer of Causes act. P. L. 1912 p. 417.

In order to present a case according to the procedure in equity, complainant filed his bill, and issue was joined, and the case partially tried, when the complainant asked leave to file an amended bill, which leave was granted and the amended bill filed.

In the amended bill it is alleged that on June 19th, 1916, the defendant entered into a contract with one Henry Stipsitz, agreeing, for the consideration of $6,000, to well and sufficiently convey in fee, by executor’s deed, on or before the 1st day of August, 1916, the premises therein described, consisting of twtenty-nine lots in the borough of Cliifside Park, in the county of Bergen; that the defendants then and there represented to the complainant, who carried on the transaction with them, that they'were the owners of the lands and premises in question, and, in the month of June, 1916, Stipsitz assigned the contract to complainant, and complainant took the same, believing the representations of the defendants. That on the 17th of August, 1916, the defendants delivered to the complainant a certain paper in which they represented that they had well and sufficiently conveyed all of the lands and premises therein described, and because of such representations complainant paid the defendants the sum of $6,000; that defendants had their own legal adviser, and were well informed of the state and condition of their title, and that said representations were false and untrue, and that relying upon said representations, and without knowledge of their falsity, and at the request of defendants, complainant paid the defendants the consideration aforesaid. That, as a matter of fact, at the time of the contract and the conveyance, the defendants were not the owners of lots 41, 42, 43, 44, 45 and 46 in block Fo. 22 on the map entitled "Map of GrantWood, in the borough of Cliifside Park, Bergen county, N. J.,” made by Alfred E. Williams, C. E., and duly filed in the Bergen county clerk’s office on May 1st, 1901, as map No. 805. It is also alleged that on the date of the deed the defendants could have acquired the said lands from the owners thereof, and could have conveyed the same; and complainant is ready and -willing to accept such conveyance after defendants should have perfected their title. It also alleges that the defendants refused to convey said lands and premises which, at the time of the making of the contract, were and still are of the value of $5,000. It then alleges that, by reason of said false and untruthful representations, the complainant has suffered loss or damage in large sums of money, to wit, in $200 for fees and expenses, &c., in the sum of $1,000 for loss of profits, and that the value of the lands contracted to be conveyed are abated to the extent of $5,000. The pertinent prayers for relief are as follows:

c<r3. That the defendants execute a deed well and sufficiently conveying said lands and premises.

“4. That the purchase price paid be abated.

“5. That the defendants may be decreed to pay to the complainant his losses and the proportionate value of said lands and premises to which complainant had no title on the 19th day of June, 1916."

The defendants answered the original bill, which answer was allowed to stand as the answer to the amended bill. In this answer all fraud and misrepresentation with which they are charged in the bill defendants deny, and say, generally, that, as executors of the estate, they had no knowledge of the ownership of this property excepting as it appeared in three several sheriff’s deeds; that they believed they were the owners, and so informed the complainant; that the contract covered twenty-nine lots; that complainant had the title searched, and it being reported that the defendants were the owners of the twenty-nine lots mentioned in the contract (which included the six lots in question), the deed was made, and, upon the complainant acquainting them with the fact that they were not the owners of these six lots, the defendants offered to take a reconveyance and pay to the complainant the purchase price, and made a tender as hereinafter stated, but the complainant refused to accept the same.

The facts appearing in evidence are as follows: Carl A. Hansmann, late of the city of New York, died on the 9th day of January, 1916, leaving his will, which was probated in New York county on the 3d day of February, 1916. He owned, at one time, twenty-nine lots at Grantwood, N. J. The complainant, who was a real estate agent, doing business at Grantwood, in the first week in June, 1916, called on Mr. Lowes, a member of the law firm of Rounds, Sherman & Dwight, in New1 York City, and inquired if he represented the Hansmann estate. Mr. Lowes told him that he had been active in straightening out Mr. Hansmann’s cases with relation to the interest of his firm in his cases, but he had not had very much to do with Mr. Hansmann’s personal affairs or personal investments, and asked him what he could do for him. He said he was interested in some lots in Hudson Heights, N. J., and mentioned no other lots. Mr. Lowes told Mr. Bohm that he had found among Mr. Hansmann’s papers some deeds and a memorandum which referred to the ownership by Mr. Hansmann of some lots at Grantwood, N. J.; that he knew nothing about the locality known as “Hudson Heights,” and knew nothing about any other lots belonging to Mr. Hansmann than those at Grantwood. He says he went immediately to the office safe and got three sheriff’s deeds and showted them to Mr. Bohm, saying that he presumed that that was the way Mr. Hansmann got title to those lots, and that he knew nothing further about it. He told him that this memorandum that was found, made by Mr. TTansmann, had put a value on what he called “the Grantwood lots” at $7,500, and that was all the information he had as to the ownership, or value, or identity, or location of the property in New Jersey that belonged to the testator; that the executors were anxious to sell the lots and asked Tiim what he would give for them; that complainant told him he represented a man named Henry Stipsitz, who was a broker in the New York produce exchange, and that he wanted these lots, and that he was willing to give $6,000 for them. Mr. Lowes said he would transmit his offer to the executors, which he did; that he made no statement of any kind as to the ownership of the lots, and reiterated to Mr. Bohm that he would not allowed the executors to make anything but an executor’s deed, and that they would in no sense warrant the title; that he knew nothing about the taxes or assessments, and that he, Bohm, would have to assume all obligations and pay $6,000 net.

It is quite apparent that Mr. Lowes knew absolutely nothing about the ownership, title or prior conveyance of the six lots above referred to; his knowledge was solely derived from the sheriff’s deeds above mentioned.

I may add that the testimony of Mr. Aiken and Mrs. Hansmann, the two executors, indicates that they were unaware of a prior conveyance of these lots. There was evidence to the effect that shortly prior to the making of the contract a mortgage on these six lots, made by the true owner, was paid to the executors through Mr. Lowes, which complainant argues indicates that they had knowledge of the fact that the six lots had been sold prior thereto. Without going into detail, it is perfectly plain to me, from the testimony of the witnesses, that they had no knowledge of the prior conveyance of the six lots; and the testimony of Mr. Lowes makes it clear that the executors would not assume any responsibility for anything that the record of the title might disclose.

After the contract was made the complainant had a search made by a member of the bar of Hudson county of good reputation and considered a careful examiner of titles, who overlooked a conveyance of the six lots described in the bill, made by testator to one Jeremiah W. Davern, of Plattsburg, N. Y., and passed the title on August 17th, 1916, when an ordinary executor’s deed with covenant against grantor’s acts was delivered—there was no other covenants in the deed.

At the time of the delivery of the deed the complainant made a bond and mortgage to secure the funds, or a part thereof, to pay the purchase price, which mortgage, I understand, is of record, covering the whole premises.

In the early part of January, 1917, the complainant applied at the tax office for his tax bills, and then'says he learned that the above six lots were owned by Davern. He at once communicated with Mr. Lowes, who-, during the same month, took the matter up with Mr. Bohm, and, after a discussion with him, believed that $200 would cover his costs and disbursements; and later on, in January, 1917, he discussed with Bohm the idea of .giving him $200 and returning the purchase price, with interest. In the meantime he says he had discussed the matter with .the man who had examined the title, and that accounted for some delay in the matter. The matter seemed to drift, Bohm being unwilling to accept the offer. On April 17th, 1917, the defendants made an offer, in waiting, tendering $6,425 for a retransfer of the premises. The closing language of the tender is as follows: “We know of no other moneys which you can justly or legally demand from us as a condition to the reconveyance of the premises in question to- us; but should there be any other legal demand for which we are liable in the premises, we are ready forthwith, upon yo-ur acquainting us with the nature and particulars of such demand, to comply with and discharge at once.” The tender was made in legal funds.

At the time of the latter offer Mr. Bohm spoke of his having entered into- contracts or made conveyance of some of the lots, which would disable him from conveying back all the lots. Defendants then offered to allow the complainant to carry out the contracts, credit to be given them for the contract price, as well as the proceeds of the sale of lots sold, and allow him a commission as agent.

But it appears from the testimony of Mr. Bohm that he does not desire to restore the status quo as nearly as possible by accepting the return of the purchase price with interest and his expenses, because he considered that he had a good bargain, and that the six lots are worth from $6,000 to $6,500, and the remaining lots are of little or no value. As evidence of the value he borrowed $5,500 on bond and mortgage, and only put $500 of his own money into the transaction, plus his expenses.

Ilis appraiser says that the minimum value of the six lots, is $4,800, and the value of the remaining twenty-three lots about $5,000.

It is perfectly plain, as above stated, that when the defendant executors disposed of these lots the figure which they accepted was about $1,500 less than the testator’s appraisal, but they sold the twenty-nine lots for a lump sum in order to dispose of all their property in New Jersey and settle up the estate. It is also quite plain that if the parties had known that the six lots were not owned by testator at- his death the contract.'would not have been entered into. The defendants, through their counsel, made it quite plain to the complainant—quite as clearly as it might reasonably be expressed—that they did not intend to assume any responsibility on the sale. The complainant did not in any sense rely upon anything said by the defendants or their solicitor to him. He had the title searched, and if the searcher had discovered that the six lots had been sold, then I am inclined to the view that neither party would have desired to cai’ry out the contract.

Under the English cases the complainant would have no right, either at law or in equity, on the case as presented. There was no fraud and aro misrepresentation or representation of any kiaad made by the defendants to the complaiaaant. Aiav injury which the complainant suffered arose out of his own negligeaace. Straus v. Norris, 78 N. J. Eq. 488. laa this latter case Vice-Chancellor Howell, after stating that after the delivery of the deed, at common law, and the payment of the purchase-money, the grantee had no right of action except upon, some covenant or agreement which still subsists as air independent and separate cause of action, arad that while noaae of the New Jersey cases decided reached the question of liability after the consrammation of the contract, says: “The reasoning of Chancellor Pennington in Couse v. Boyles. 4 N. J. Eq. 212, seems to establish the jurisdiction of equity, provided a complainant has done nothing which would interfere with his equities accruing from the transaction.” Here the complainaoat knew he was to receive an executor’s deed with covenant against grantor’s acts, with no covenants upon which he might sue at law. In this posture he claims the right to come into equity to enforce a right growing out of a situation that he brought about clearly by his own neglect, and a situation that never would have beer-created, had he informed the defendants that they did not own the six lots in question. This negligence, I take it, may be regarded as doing something which interferes with his equities, because, as above stated, it was liis neglect, and not any act, conduct or negligence of the defendants. True, the complainant did not actively do- something, but his neglect amounts to the same thing, in that, were it not for his neglect, he would have had actual and not constructive notice. In such a situation the complainant, in seeking equity, musi do equity. The defendants have offered to restore the status quo as nearly as possible by paying back the purchase price, with interest, after deducting therefrom the sums received by the complainant on the sale of lots-, a thing which he persisted in long after the defendants had made known their position and made the tender. The defendants were also willing to pay the complainant certain expenses, and their offer, to my mind, is fair and equitable.

The decree will be that if the complainant will reconvey the unsold lots, the title to which passed by the executor’s deed, excepting those that have been sold, the defendants will be decreed to pay the complainant in accordance with the tender made by the defendants, or if the complainant is unwilling to accept such tender, then the defendants will be decreed to pay to the complainant the sum of $6,000 and interest and the expenses provided by the statute in a ease where the failure of performance is not due to the deceit or fraud of the defendant (P. L. 1915 p. 316; 1st Supp. Comp. Stat. p. 472), in either of which cases the complainant shall credit on account of the sums aforesaid the net receipts derived by him from the lots sold, with interest, which several amounts, if the parties cannot agree upon, will be settled on motion.

If the complainant refuses to make the reconveyance upon the foregoing terms, then the bill will be dismissed.


text:
    John Barbieri, petitioner, v. Margaret Barbieri, defendant.
    [Decided April 8th, 1924.]
    IVlhere in a counter-claim in a divorce suit the affidavit of non-collusion was drawn in the maiden name of the defendant, though signed by her with her married name, such mistake was clearly a clerical error, and the affidavit, having clearly identified the person making it, is sufficient.

      Messrs. Milberg & Milberg, for the counter-claimant.
   Griffin, V. C.

Margaret Barbieri, defendant, in her counter-claim for divorce', alleges that her maiden name is “Margaret Hollinan.”

The affidavit of non-collusion is as follows:

“State oe New Jersey,
County op Hudson,
Margaret Hollman, being duly sworn according to law, on her oath deposes and says: That she is the counter-claimant named in the foregoing counter-claim, and that her counter-claim is not made by any collusion between her and the petitioner herein, but in truth and good faith and for the causes set forth in said petition.
Margaret Barbieri.”
“Subscribed and sworn to before me this 25th day of October, 1920.
Frederick R. Jeese, Attorney-at-Law of New Jersey.”

The' case was tried, and thereafter, on examining the papers, the mistake of inserting the maiden and not the marriage name in the body of the affidavit was discovered. The question then arises, Does this mistake render the affi davit invalid? If it does, then the complainant cannot be heard on her counter-claim.

In the case of Torranse v. Hides, 32 Mich. 307, the affidavit began with a recital that “Fred B. Lee of said county, " ' ' 6 being duly sworn,” &e., it was signed “Charles II. Lee,” Judge Cooley said that “the recital of the name of Ered B. Lee in the beginning of the affidavit is apparently a clerical error, and to be overlooked as such. Charles H. Lee makes the oath, and had the name been omitted in the beginning there would have been no difficulty in holding that the affiiant was applying the facts recited to himself. But this affidavit is, in legal effect, the same we think, that it would have been, if in the body of it there had been no recital of any name as that of an affiant.

In People v. Sutherland, 81 N. Y. 1, the court of appeals held that the name of the affiant need not be inserted in the body of the affidavit, it wjis sufficient if subscribed and sworn to before a proper officer—that the test of a good affidavit was, could perjury be assigned on it, and this called for the identity of the person making oath who “takes on responsibilities and incurs liability to the criminal law if he utters willful falsehood.”. In this opinion are cited Bac. Abr. tit. “Affidavit,” and a number of English cases.

In Pincers v. Robertson, 24 N. J. Eq. 348, Chancellor Runyon said, speaking of the signing of the affidavit by deponent at the foot thereof: “The object is to facilitate identification of the affiant in case of prosecution for perjury.”

In 3 Greenl. Evid. (16th ed.) 194 § 192, the author says: “The rule in these eases seems to be this: that the proof must be sufficient to exclude the hypothesis that the oarh was taken by any other person but the prisoner.”

.In this case the proof is plain that the affidavit was that of Margaret Barbieri. She says in her counter-claim that her maiden name was Margaret Hollinan, which is true; her affidavit begins Margaret Hollinan being duly sworn, &c., which was a clerical error in stating her maiden and not her marriage name; she then signs her marriage name, and the officer in the jurat says that it was “subscribed and sworn to before me,” and, turning to the subscription, the affidavit is correctly signed “Margaret Barbieri.”

Thus her identity is clearly fixed, and if her affidavit p> false, the above facts afford proof of perjury.

My conclusion is that the affidavit is sufficient.


text:
    Clarence D. Costello, complainant, v. Thomas Cusack Company et al., defendants.
    [Submitted September 28th, 1922.
    Decided October 6th, 1922.]
    1. A director of a corporation holds subject to be removed, and if the thing for which he may be removed exists prior to his election, by parity of reason, he may me treated as ineligible.
    2. Every by-law by which the benefit of the corporation is advanced is a good by-law for that reason, that being the true touchstone of all by-laws. The same may be said of amendments to certificates of incorporation.
    3. There are two kinds of disqualification of a director—(1) temporary; (2) total, or permanent. The temporary arises where a person, being a director in two corporations attempting to contract, sits as a member of both boards to form the quorum, and the permanent arises where he is employed in the service of a rival and cannot serve both, but must betray one or the other.
    4. The defendants attempted to amend their certificate of incorporation by disqualifying a great number of persons from election to the office of director, some of whom should properly be treated as disqualified, and others not; in such case the invalid parts of the amendments may be excised, and the valid one permitted to stand.
    0. Where an amendment provides for the immediate removal of a director, which means summarily and without a hearing, it is unreasonable and void.
    6. 'Where amendments are to be construed by the court, without extraneous evidence and a determination made as to their validity, and nothing can be offered on final hearing that is not before the court, a preliminary injunction will issue.
    On bill, &e. On motion for injunction.

      Messrs. Treacy & Milton (with whom were Mr. Lutlein, of the Illinois bar, and Mr. Third, of the New York bar), for the motion.

      Messrs. McDermott, Tinright & Carpenter and Robert IT. McCarter (with whom was Mr. Hummer, of the Illinois bar), contra.

   Griffin, V. C.

The bill in this canse was filed for various purposes, including a prayer that it be decreed that certain amendments to the certificate of incorporation, submitted for adoption by the stockholders be declared ultra vires, null and void, and for an injunction. On the filing of the bill an order to show cause was granted, including a restraint against voting in favor of the passage of a resolution adopting the amendments and executing certificates for the amendments and filing of the same with the secretary of state. The amendments attacked are as follows:

“1. No person shall he eligible to become, or to remain a director of this corporation, if he, or any member of his immediate family, shall be directly or indirectly interested, either as owner, partner, stockholder, officer, director, agent, employe, attorney, lender of money, beneficiary, trustee or otherwise in any business which competes with, or is antagonistic to, the business of this corporation.
“2. No attorney, agent, employe, partner, trustee or member of the immediate family of any such person who is rendered ineligible by. paragraph 1 hereof, shall be eligible to become or remain a director of this corporation.
“3. Any director of this corporation disqualified to continue as such shall be subject to immediate removal from such office by a majority vote of the remaining directors of this corporation.”

Under section 27 of the act concerning corporations, power is given to include in an amendment anything which might be legally contained in the original certificates. No charge of irregularity in the proceedings to amend is made. This leaves to be determined the question whether the amendments proposed are ultra vires the corporation.

This question involves two propositions—1. May a corporation, by its original certificate, or an amendment thereof, disqualify certain stockholders from being directors; or, being directors, remove them? 2. Are the amendments so unreasonable that a court should declare them null and void ?

As to the first question: section 15 of the Corporation • act, in dealing with vacancies, assumes that the power of removal exists, and in In re Griffing Iron Co., 63 N. J. Law 168, Mr. Justice Collins, speaking for the supreme court, said, “If the by-laws so warrant, directors may even be removed during their term,” and this case was affirmed. Idem. 357. It therefore seems plain that a director holds subject to be removed; and if the thing for which he may be removed exists prior to his election, by parity of reasoning, he may be treated as ineligible.

The next questions to be considered are: Do the amendments contravene any property right of a stockholder, and are they so unreasonable that their purpose condemns them? Neither the certificate of incorporation nor the by-laws were produced, nor was there any agreement produced touching the corporate rights of stockholders. There does appear in Mr. Cusack’s affidavit, that in paragraph 5 of the certificate of incorporation there is a provision for cumulative voting for directors to protect the minority stockholders. I must, therefore, assume that the rights of the stockholders are the same as those existing under the common certificate of incorporation containing no special provisions, excepting that con-

tained in said paragraph 5. Counsel for the complainant cites Lowenthal v. Rubber Reclaiming Co., 52 N. J. Eq. 440, to support the theory that the legislature is without power to authorize amendment of either the by-laws or the certificate of organization without the consent of all the stockholders— the theory being that the certificate and by-laws in force at the time of the acquisition of the stock constituted a contract between the corporation and the stockholders, and between the stockholders inter sese. In that case, the bill was filed to restrain a change in the certificate of organization and in the by-laws of the corporation which the individual defendants proposed to make by the vote of a mere majority of the stockholders under the sixth section of the supplement to the Corporation act. P. L. 1893 p. 445. There, four distinct corporations and one mercantile firm associated themselves together for business purposes, under a written agreement prescribing that each corporation or partnership should be entitled to one membership and to one vote at all meetings. After the agreement was signed, a certificate of incorporation was executed and filed. The stock was divided among the corporations and partnership in varying amounts. The by-laws adopted provided for six directors, and one was assigned to each corporation and partnership, excepting the Philadelphia Company, to which, on account of its greater holdings of stock, two directors were assigned. Article 6 of the by-laws provided that the same might be amended, added to, altered or repealed by the affirmative vote of the stockholders representing at least two-thirds of the whole capital stock. It, therefore, appeared that there were contractual relations between the parties, and the thing denounced was the attempt, without the consent of the complainants, to change the system, whereby a mere majority might do that which in the by-laws could only be done by at least two-thirds. In the instant case none of these features, or ones calling for a similar conclusion, are presented. The amendments in question do not disturb the stockholders’ rights under paragraph 5 of the certificate.

With this latter point eliminated, it remains to be determined whether the amendments are so unreasonable as to be null and void.

In London City v. Vanacker, 3 Carth. 480; 90 Full Eng. Rep. 876, Chief-Justice Holt said that “every by-law by which the benefit of the corporation is advanced is a good by-law for that reason, that being the true touchstone of all by-laws.” The same may also be said of an amendment to the certificate of incorporation.

This amendment seeks, among other things, to render ineligible—or, if elected, to subject to removal—a director if he be also a director in a corporation whose business is in competition with or is antagonistic to the defendant corporation. There are two kinds of disqualification of a director— (1) temporary, and (2) total or permanent disqualification.

(1) A temporary disqualification arises, for instance, when two corporations attempt to contract with each other, and a director who is necessary to constitute a quorum in one is a director in the other, the contract thus consummated is voidable. Stewart v. Lehigh Valley Railroad Co., 38 N. J. Law 505 (at p. 522); Metropolitan Tel. & Tel. Co. v. Domestic Tel. Co., N. J. Eq. 568 (at p. 573). This being but a partial disqualification, does not render the director objectionable in other transactions in which he may serve the corporation with that fidelity which is exacted of a trustee.

(2) A total or permanent disqualification is one where the director is so employed in the service of a rival that he cannot serve both, but must betray one or the other. Cross v. West Virginia, &c., Railway Co., 87 W. Va. 342; 16 S. E. Rep. 587. This arises where a man is called upon in the performance of his trust to give his best endeavors for the promotion of both rival companies. Therefore, applying the rule mentioned by Chief-Justice Holt, supra, an amendment to a certificate of incorporation, or by-law, which excludes such a person from the directorate advances the benefit of the corporation, and is good. My conclusion, therefore, is that an amendment which renders ineligible—or, if elected, subjects to removal—a director, if he be also a director in a corporation whose business is in competition with, or is antagonistic to, the defendant corporation, is valid.

I also conclude that the amendment is valid if the director happens to be the owner, partner, officer or trustee in a business which is a competitor of, or antagonistic to, the business of the defendant corporation.

By this first amendment a director is held ineligible if an)7 member of his immediate family shall be directly or indirectly interested as owner, &c. To illustrate: Suppose a son of the director was a director in a rival corporation, and the two corporations desired to enter into an agreement, would the father be disqualified from sitting in his board, as the law now stands ? Would the son be disqualified from sitting in his board? Would not each be entitled to vote on the agreement? How can it be said that the father and son have such interest in both corporations that' neither can be trusted fairly to perform his duty as trustee? And if the son and father could so sit, and there is no partial disqualification on account of their being members of rival corporations, it is unreasonable to wholly disqualify them from being directors by reason of such relationship.

This leads to the conclusion that this portion of the amendment is invalid.

As to the further provision of the first amendment disqualifying the director if he happen to be a stockholder, agent, employe, attorney, lender of money, or beneficiary of a rival concern, this part of the amendment I regard as invalid, for the reason that, having such a relation with the rival concern, he is not its trustee and would not be precluded as a director-from voting to make a contract with the rival concern. Nor can it be said that every person holding such relation to the rival concern must of necessity work against the interests of the corporation of which he is a director.

The second amendment goes one step beyond the first,, in that it excludes from membership an attorney, 'agent, employe, partner, trustee, or member of the immediate family of any such person who is rendered ineligible by paragraph 1.” The “person rendered ineligible by paragraph 1” is the director; and this portion of the second amendment tends to disqualify a person who happens to be counsel to the director—not necessarily counsel of the rival concern. It also disqualifies a member of his immediate family from becoming a director regardless of whether that member of the family happens to have any interest whatsoever in the rival concern. To illustrate: There might be five sons in the family of the director, one son might be a director in the competing corporation, and, under this paragraph, the four disinterested sons, being members of the immediate family of the director, would be ineligible. This, I take it, is an amendment which is unreasonable and beyond the power of the corporation to make.

As to the third amendment, I think it is void, because it provides for the immediate removal of the director, which means summary and without a hearing; for the word “immediate” 'negatives the idea of a hearing, giving the person charged time to prepare. In re Griffing Iron Co., supra, the court said: “The statute recognizes the power of removal” (section 15), “and such power is inherent. * * * If there be a fixed term of office, removal must be for cause.” (At ¶. 175.)

In proceedings to remove a director the board acts judicially, and is without power to remove him for cause without giving him a hearing with reasonable opportunity to prepare. Thomp. Corp. § 820.

In Stanley v. Freeholders of Passaic, 60 N. J. Law 892, it was said that a party whose rights are to be directly affected by official action is entitled to have an opportunity afforded him of being heard in relation thereto before action is taken, whenever such action is judicial in its character.

The third amendment is therefore void.

It was represented by counsel, and it appears from examination of the case, that amendments in substantially the same form were approved in People v. Ittner, 165 Ill. App. 360, and were accordingly adopted by the defendant corporation in preparing these amendments. In the case of Loughlin v. Geer, 121 Ill. App. 534, decided some six j^ears earlier, -the court’s decision was almost diametrically opposite to that expressed in the Ittner Case. In the latter case the court did not cite Loughlin v. Geer; and, therefore, there is presented the situation of the courts of two separate districts, of equal standing, entertaining different views.

In Cross v. West Virgnia, &c., Railway Co., supra, cited by complainant, a b3r-law was held valid which declared that no person who was attorney against the corporation in a suit should be eligible as a director. It will be perceived that the “attorney” mentioned in that case was one who was then actively engaged as attorney against the corporation. Here the provision is that no one who is attorney for anyone in a business which competes with or is antagonistic to the business of the corporation is eligible, although he might never have a suit against the corporation.

. Having reached the conclusion that parts of the amendments are both valid and invalid, the question arises: Must all the amendments be declared invalid, if regularly adopted and filed? This question must be answered in the negative; the invalid may be excised, and the residue stand. Amesbury v. Bowditch Mut. Fire Ins. Co., 6 Gray 596.

As this case is novel and not free from doubt, if the general rule were followed, an injunction would not' be allowed in advance of final hearing. McMillan v. Keuhnle, 78 N. J. Eq. 251; Citizens’ Coach Co. v. Camden Horse Railroad Co., 29 N. J. Eq. 299. This case, however, is an exception to the general rule, in that it calls for a construction of the proposed amendments without extraneous evidence, and a determination as to their validity; nothing could be offered on final hearing that is not now before the court. In such a situation a preliminary injunction may issue. United Cigars Stores v. United Confectioners, 92 N. J. Eq. 56; affirmed, 92 N. J. Eq. 449.

A decree will be advised in accordance with the foregoing views.