author: Kalisch, J.

text:
    Leon F. Blanchard et al., complainants-respondents, v. The Prudential Insurance Company of America et al., defendants-appellants.
    [Argued November 29th, 1911.
    Decided April 26th, 1912.]
    1. P. L. 1907 p. 11)0 § It, required domestic insurance companies to elect whether they would conduct a participating or non-participating policy business. A domestic insurance company, which was issuing ordinary policies entitling the holder to participation in profits, and which had put nearly all of its industrial non-participating policies on a basis of participation in profits by means of cash dividends and surrender values, elected to carry on a non-participating- business and to discontinue the issuance of participating policies, and thereafter its directors in good faith made a concession to all holders of industrial policies, including policies issued after the statute, by adding about ten per cent, to the amount of insurance the same premium would pay, claiming that such concession was only a return of excessive premiums, or- a cost or expense necessarily incurred in preserving its business.—Held, that the sole intention of the legislature was to separate the two forms of insurance without reference to the methods adopted by companies in the conduct of their business, and that the concession did not constitute the doing of a participating policy business in violation of the statute.
    2. P. L. 1907 p. ISt § 1, required insurance companies conducted on the mutual plan, or in which the policyholders were entitled to share in the profits or surplus, to annually ascertain the amount of surplus to which participating policies were entitled, and to apportion to such policies as a class the surplus so ascertained, and carry such amount as a distinct liability to such class of policies on and for which it was accumulated. Directors of a domestic, insurance company, in compliance with the .statute, in February, 1908, ascertained the earnings on participating policies prior to December 81st, 1907, and apportioned a profit of about $2,500,000 to the stockholders, and by resolution not affected with fraud or bad faith placed that amount to its contingent surplus, and deferred its payment until future action by the directors.—Held, in view of the contingencies and liabilities of the company, that then-refusal to make a present distribution of such stockholders’ dividends was a matter of business discretion, and that equity would not interfere by injunction to compel a present distribution.
    8. In cases where the power of the directors of a corporation is without limitation and free from restraint, they may reserve such profits as may be necessary or judicious for repairs or improvements and to
      meet contingencies both present and prospective, and thereby defer the distribution of dividends, and their determination to do so, if made in good faith, is final and not subject to judicial revision.
    On appeal from a decree advised by Vice-Chancellor Howell, whose opinion is reported in 78 N. J. Bq. (8 Buch.) 471.

      Mr. John R. Ilarclin and Mr. Robert II. McCarter, for the complainants.

      Mr. Bdiuard J). Dujfield'tmi Mr. Richard V. Lindabury, for the defendants.
   The opinion of the court was delivered by

Kalisch, J.

A bill of complaint was filed in the court-of chancery against the Prudential Insurance Company by Leon E. Blanchard in behalf of himself and other stockholders of said company who might come in, to compel a distribution to them, by way of dividend,' of an equitable portion of the surplus from accumulated profits amounting to $2,500,000, which had been alleged to he available for the purpose by the directors of said company and arbitrarily and illegally “in a way fraudulent in law and subversive of the rights of the stockholders not assenting thereto,” withheld by them from the stockholders entitled thereto.

As incidental to tins relief the hill praj^ed-the aid of the court to prevent the company from making any payments and granting-any benefits out of the surplus profits to policyholders in excess of their contractual rights.

The decree of the court of chancery directed a mandatory injunction to the directors of said company to declare a dividend to the complainants, and all other stockholders of that company, pro rata to their several ’stockholdings, of $2,500,000 from the surplus of the company. It denied to the complainants all other relief; and directed the payment 'of complainants’ costs and counsel fee by the defendant company.

.Erom that part of the decree directing the declaring of the dividend and to distribute the same to stockholders and the payment of complainants’ counsel fees and costs by the defendant company, the defendants appealed to this court, upon the ground that the court of chancery should have dismissed the complainants’ bill, with costs.

Erom that part of the decree denying all other relief to the complainants, the complainants appealed to this court, on the ground that the court should also have decreed that additional benefits applied to the policies issued by the defendant insurance company after the beginning of the year 1907, and before July 1st, 1909, made the policyholders holding said policies on the last-mentioned date participate, to the extent of such additional benefits, in the profits of the company’s business contrary to the provisions of the act of the legislature of Hew Jersey (supplemental to the general law for the regulation and incorporation of insurance companies), approved April 15th, 1907; and that in determining 'the surplus of the company as a stock corporation the amount of such additional benefits should have been included in the profits of the company’s business and added to said surplus as part thereof; and that an injunction should have been directed restraining and enjoining the defendant company from further payments to any policyholder holding a policy issued after the beginning of the year 1907, and before July 1st, 1909, in force on July 1st, 1907, to which said policyholder may not be entitled by the terms of the policy contract; and from in any way enlarging or changing the policy contracts issued within the period aforesaid, or at any time, in such way as to authorize or require the payment to a policyholder of any sum of money to which such policyholder would not be entitled under the terms of the policy contract, and from thereafter diverting further sums from the profits of said corporation by the payment of any sum or sums to which policyholders holding policies issued within the period aforesaid may not be entitled by the terms of their contract, and from further payment to policyholders of any sum or sums on policies issued prior to the beginning of 1907 by way of additional benefits to which the policyholders may not he entitled by the terms of the policy contracts beyond additional benefits announced to such policies prior to the first day of July, 1909.

It developed upon the hearing that the company from the timé of its inception until 1886, a period of nine years, issued what is generally known in the life insurance business as non-participating industrial policies only. These were plain ordinary policies of a fixed amount which required the payment of a fixed premium, and the holders thereof under their contracts with the company were not entitled to any rebates or dividends by reason of any profits'the company might make in the transaction of the business, or to any participation in such profits.

In 1886 the company inaugurated a change in its business respecting the issuance of policies of insurance and began issuing what is termed ordinary policies, the greater number of which by their terms entitled the holders thereof to such dividends or participation in the company’s profits as the directors might determine upon. This course of business was pursued until January, 1897, when the company adopted a scheme by which it granted concessions to the holders of industrial policies by giving to them a post-mortem dividend after five years, a cash dividend after fifteen years, and establishing a surrender value after twenty years. This in effect made all the.industrial policies outstanding at that time participants in the profits of the business, and thus nearly all the policies outstanding at that time, both ordinary and industrial, on a participating basis.

This situation remained unchanged until by virtue of section 12 of an act of the legislature of 1907, page 133, the company was put to its election of conducting its business either as participating or non-participating. And in pursuance of this section the company passed a resolution July 8th, 1907, electing to carry on the non-participating business and to discontinue the issuing of participating policies August 1st, 1907. On June-14th, 1909, the board of directors, by resolution, made a concession to the holders of all industrial policies issued on and after July 5th, 1909, not by reducing the premium, but by adding about ten per cent, to the amount of insurance that the same premium would thereafter purchase.

A similar concession was likewise extended to the holders of all industrial policies which were issued after January 1st, 1907, and in force on July 1st, 1909. Such concessions appeared to have been made by 'the company in 1880, 1885, 1891, 1897 and 1906.

Complainants insisted in the court'below and now urge that the action of the board of directors by extending these increased benefits to all industrial policies issued since the beginning of the year 1907 and in force on July 1st, 1909, was- and is in contravention of the act of 1907 under which the company had elected to do a non-participating business, and violative of the contractual rights of policyholders, who, by their policies are entitled to participate in the profits of the company, as well as of the rights of the stockholders, in that it diverts large sums of money from the profits of the company by making the concessions to its policyholders not entitled thereto, and the effect of which is to reduce the profits of the company, in which the participating policyholders and the stockholders are entitled to share. And it is further claimed that these concessions on the part of the company are tantamount to the doing of a participating business and therefore are wholly unauthorized.

The defendant company meets this charge with the claim that it had been its practice to make such concessions as are now for the first time being objected to, at irregular intervals (the years in which they have been made has been before siated), and they justify it upon an apparently sound and substantial basis, the main reason for such action, on the part of the company, being, that in fixing the premiums to be paid for insurance such fixed premiums had to he in their very nature experimental in order to guard against any possible loss and to protect the fund accumulated for the benefit of the policyholders, in, that, in ease of an emergency, it would be able to meet the demands which should be made upon it, i. e., policies becoming payable, to meet the expenses and costs not only of conducting hut also extending the business. The premiums were therefore fixed high enough to insure against anjr possible loss.

As a result, the company necessarily from a business point of view and intentionally charged the industrial policyholder more for his insurance than it was worth—that is, more than it cost to carry it. The main cause for this was that it was impossible to foresee how much it would cost. Business caution rendered it necessary to take into account the fluctuation in the rates of interest which was likely to occur, the uncertainty as to the number of policies which would lapse from one causé or another, and above all the uncertainty of the extent of mortality among its policyholders. An estimate of-what a fair premium should be based upon such contingencies is, in its very nature, largely speculative. Besides, another important element which entered into the fixing of the premium was the cost of obtaining the business and preserving it. The business, as it developed, demonstrated that the premiums charged and paid were excessive. Plow, it is this excess of premium, this ascertained overcharge, which the company claims it returns to the policyholders by the methods which have already been adverted to. It is further claimed by the defendant company that these excess of premiums are not to be regarded in any sense as profits, because unless policyholders were relieved from paying the excessive premiums and were put upon the same basis with.other policyholders who had been carrying and were carrying like sums of insurance, for a lower rate they would allow their policies to lapse and seek other companies for insurance, and that therefore these concessions were to be considered rather in the nature of cost and expense necessarily incurred in preserving its business and meeting competition, than a participation by policyholders in the profits of the business. In effect, it is contended that it is a business method adopted by the company as conducive to the well being and prosperity of the company and its policyholders, and that in making these concessions the directors were acting in good faith.

It becomes of vital importance, in order to ascertain the true meaning of the act, to keep in view the real nature of the business conducted by domestic life insurance companies doing business in this state prior to its passage. For it may be safely assumed that the legislature intended to differentiate between what are termed participating and non-.participating business. As has already been observed, the defendant company had issued policies by which its policyholders paying a fixed premium were entitled to participate in the profits and were what is known as dividend-paying policies, and straight out or ordinary policies, by which its policyholders paid a fixed and stated premium.' without any regard to the profits made by the company. To this latter class of policyholders, however, as has been already stated, the company had, prior to the act of 1907, made concessions at irregular intervals as the business conducted b3r it warranted and to meet competition with other companies which the future stability and prosperity of the company demanded.

In order to ascertain the true meaning and spirit of the act of 1907, we must have recourse to what the business conditions and methods of doing business by' domestic life .insurance companies doing business.in this state actually were up to the time of the passage of said act. This information is sufficiently gleaned from the history of the defendant company, of its life and progress, from its Inception to the present time. The salient features of its business were the issuing of two classes of policies—participating and non-partieipating. Both classes of policies were the creatures of' express contracts made between the company and the policyholders. Those policyholders who, by their policies, were entitled to participate in the profits were not dependent upon any bounty or gracious act of the company, but were solely entitled to do so by virtue of the contractual relation which existed between them and the company. The right to share in the profits' of the company by the participating policyholders was not affected by any fluctuation of the profits, for if there was any profit, they were entitled to share in it. It appears that the concessions were infrequently made. Erom the time of the company’s organization up to 1907, five such concessions, as are complained of, were made bv the company to the policyholders. The first four concessions were'made at intervals of five and six years, and it appears that none was made from 1897 until 1906.

It is, therefore, extremely unlikely that this feature of the company’s method of conducting its business was within the contemplation of the legislature when the act was passed. The twelfth section of the act requires the board of directors by resolution “to elect whether it will carry on its business in the form of participating business or non-participating business,” and then concludes, “and it shall not be lawful for such company to thereafter conduct both the participating and non-participating forms of life insurance/'

What the legislature manifestly had in view was the character of the business conducted by domestic insurance companies, and not the business methods adopted by them in the conduct of such business.

It was the business of participating and non-particiating forms of life insurance with which the legislature dealt. Both forms of Jiff insurance constituted the business wbicli the company conducted and both kinds of insurance were subjects of contractual relations between the company and the takers of policies. Nothing can be clearer than that it was the sole design of the legislature to separate the two forms of life insurance business and to compel such life insurance companies to elect to conduct either form^ but not to conduct both.

The defendant eompanjr concedes that it having elected to do a non-participating business, it is, therefore, not authorized to conduct a participating form of insurance business. The complainants maintain that the concessions made by the company to its policyholders, though made at irregular intervals, is practically the doing of a participating business. We cannot accede to this for the reasons already pointed out. It was not in any sense a participation in the profits. Participation in the profits by the contractual relation imports a right to and a certainty of participation in the profits, if there are any, and in nowise is made dej>endent upon an act of grace. The concessions made appear to have been a necessary outlay from the earnings of the company which must be considered as entering into the cost of conducting the business, and though, as a result, the profits are diminished and policyholders receive the benefit of such concessions, it is not tantamount to a participation in the profits. Net profit is the gain which remains after all the costs and expenses of the business have been paid. Whether the company should have made or make these concessions involves a purely business proposition. Upon what business basis the company has made these concessions has already been amply shown. While these transactions may be the subject of legislative control they are clearly not amenable to judicial supervision. Judicial interference can only be invoked when it appears that some clear statutory policy or some legal rule has been violated. Ho claim has been made that the directors in making these concessions acted fraudulently or in bad faith. It seems to us that the making of these concessions was purely a business matter which called for the exercise of the sound discretion of the directors of the company. They have exercised it and there is nothing before us to show that they ha've not fairly exercised such discretion. It seems to us that it would have been unconscionable on the part of the directors when, from statistics and from actual experience, they had ascertained that the premiums which had .been fixed and paid by policyholders of straight-out policies were unreasonably excessive, for the insurance which they carried, for them to have converted such excess of premiums into profits and continued to exact the same, instead of returning such excess of premium in some shape or other, to the policyholders who had paid them. It seems rather more consonant with business probity, equitable principles, fairness and justness that those who have overpaid and who are overpaying for the insurance which they are carrying, should be made whole than that such excess of premium should be retained by the company to swell its profits for the benefit of the stockholders and for policyholders because contractual relations with the company entitle them to participate in the profits.

It is not in violation of the contractual rights of policyholders holding dividend paying policies, because their contracts are subject to the fair business methods adopted by the company to maintain its business, to expand it, and to use all other legitimate business means adopted by it to increase its stability and prosperity.

Eox the reasons given the decree denying the relief prayed for by the complainants is affirmed.

We now turn to a consideration of the appeal of the defendant company from that part of the.decree directing it to distribute $2,500,000, by way of dividend, The fact has already been adverted to that prior to 1907, the company issued both participating an4 non-participating policies, and up to that period no apportionment was required by law, the surplus earnings of the company being carried in its general surplus until the dividend period of the participating policy arrived. It has also been commented upon how in the course of the conduct of its business, the defendant designedly charged a high rate of premium for insurance, in order to meet every possible emergency that may arise, and how it had become the custom of the company at irregular intervals to return the excess of premium charged by it, to the policyholders. It is self-evident that in order to determine the cost of insurance it was necessary in the case of a stock company to determine how much should be paid to the stockholders for their investment, and very large profits were paid, until the $93,000, originally .contributed, had increased to $2,000,000. The company subsequently adopted the policy of taking only ten per cent, of $2,000,000’ each year, as representing the share of the stockholders. By section . 1 of the laws of 1907 (P. L. 1907 p. 132), it is required that domestic insurance companies doing business in this state, conducted on the mutual plan or in which policyholders are by the terms of their policies entitled to share in the profits or surplus to annually ascertain the amount of surplus to which all such policies (participating policies), as a separate class are entitled and to

“annually apportion to such policies, as a class, the amount of surplus so ascertained and carry the amount of such apportioned surplus, plus the actual interest earnings of such fund, as a distinct and separate liability to such class of policies on and for which the same was accumulated.”

It appears that in compliance with the provisions of the act, ■the defendant company on February 10th, 1908, made an apportionment of the surplus earnings which had accrued upon the participating policies prior to December 31st, 1907; and it further appears that the total earnings on such policies to the end of the year 1909, amounted to $40,765,214. The division made of this sum by the company was to set aside about $22,-000,000 to meet what were' called deferred dividends on participating policies, nearly $5,000,000 to policyholders .in the form of dividends and concessions; $10,000,000 was set aside for a contingenc3r surplus, and over $3,000,000 went for the benefit of the stockholders. It appears that the exact total amount of the earnings which was assigned to the stockholders during the three years out of the earnings of the deferred dividend policies, as their portion, was $2,429,655.95, which with interest on the investment amounted at the time of the decree to $2,536,722.69. It is in regard to this sum set aside for the stockholders and the refusal to distribute the same among them by way of dividend that has given rise to this controversy. The directors, it further appears, in setting aside these earnings for the benefit of the stockholders, accompanied it with a resolution that the same be added to the contingency surplus and not to be paid to the stockholder except by future action of the board. The comjilainants hold about twenty per cent, of the stock and insist that their share of $2,500,000 should now be distributed to them in the form of dividends. Since the capital stock of the company is 'only $2,000,000 this would amount to a dividend of over one hundred and twenty-five per cent. The defendant company claims that it is necessary to retain this fund in order that the solvency of the company may be amply secured. This at once gives rise to a question which appertains to the wisdom of business management and foresight and does not call for the interference of the court. The complainants are practically seeking to have the business management of a life insurance company put into the hands of the court. Upon what basic legal' principle the court is asked to substitute its judicial sense for the business sense and discretion which must rest with the directors of the company, has not been made clear. The complainants do not claim that the- directors, in their action, were actuated by a fraudulent or improper purpose. They do not seriously attack the good faith of the directors in passing the resolutions adding the earnings assigned to the stockholders to the surplus contingency fund. The burden of their complaint is that the directors are unnecessarily overcautious, because they say there is ample safety in the amount reserved and in the contingency surplus to guarantee the future solvency of the company. In the judgment of the directors it is not deemed sufficient. Out of more than $200,000,000, more than $150,-000,000, called the reserve, is held by the company in trust for the policyholders and is money held by it for the purpose of meeting tlie contracts it has made as they mature by death. This fund is a sacred one for the benefit of its policyholders, and is not subject to be diverted from the purpose for which it was established, without a breach of trust on the part of the company. These large sums being represented in the shape of securities for the moneys received by the company must be invested, and it is a matter derived from every day observation that there are and will be fluctuations in value of securities and property in the market. And, therefore, the company for the protection of its policyholders and to ensure the meeting of its contractual obligations, retains more 'than this actual reserve, for securities may go down, property may decrease in value, and consequently how much this contingency surplus should be is a matter for the good judgment of the directors of the company. The directors in this case seem to have thought, and we cannot say unjustifiably so, that the nature of the company’s business subjected it to additional hazards from earthquake, plague, war and other similar disasters. But it is claimed xhat the directors have exercised their judgment when they have set apart $2,500,-000 for the stockholders. We think not. The resolutions assigning the several sums to the stockholders, which aggregate the sum of $2,500,000, are conditional. The resolution must be read as a whole. Each resolution, where the assignment to the stockholders was made, reads thus:

“Resolved, further, that the amount so apportioned to the stockholders be held and added to the contingency surplus of the company and be not paid out to the stockholders in the form of dividends, or otherwise, except by the further action of the board.”

Reading the resolution as a whole, the meaning is unequivocal to the effect that the amount set apart will eventually, if everything goes well, belong to the stockholders, but, in view of possible contingencies it should not be paid out to the stockholders now but should be retained for the purpose of making; more secure the payment of the company’s contracts with its policyholders, which may run from fifty to seventy-five years yet. And the reason that the directors may do this with propriety is that the company is handling for profit the money of the policyholders, and they are bound to see that the policyholders axe protected. This sum of $2,500,000 belongs to the stockholders, only provisionally, in that it'is subject to the risk of the business. The complainants’ proposition contemplated the actual withdrawal from the company and from future possibility of its being reached for the protection of the policyholders, this whole sum of $2,500,000. It -became, therefore, a matter of pure business policy, and the conservation of the sacred trust reposed in the directors, which called for the exercise of their highest and wisest discretion in dealing with the matter. The directors having exercised their discretion in the matter, their judgment is hot op.en to a successful attack, unless it appears that it was the result of fraud or bad faith on their part. It was not seriously contended, on the part of the complainants, that the directors were actuated by fraud or bad faith. The vice-chancellor did not find that there was any fraudulent conduct or bad faith on the part of these directors. From the evidence before us, we do not find any fraud or bad faith on the part of the directors in refusing to distribute now the $2,500,000 among the stockholders. On the contrary, it seems to us that the directors, in order to protect the policyholders have exercised no more than that degree of wisdom, eautiou and foresight which was incumbent upon them in dealing with a fund in which thousands of poor persons and of limited means are vitally interested.

As to when and under what circumstances the court of this state will interfere with the exercise of the discretion of a board of directors in the conduct or managing of a business is not an open question.

The rule of law is well stated by Vice-Chancellor Van Fleet in Park v. Grant Locomotive Works, 40 N. J. Eq. (13 Stew.) 114; affirmed on opinion, by this court, in 45 N. J. Eq. (18 Stew.) 244, as follows: “In cases where the power of the directors of a corporation is without limitation, and free from restraint, they are at liberty to exercise a very liberal discretion as what disposition shall be made of the gains of the business of the corporation. Their power over them is absolute so long as they act in the exercise of their honest judgment. They may reserve of them whatever their judgment approves as necessary or judicious for repairs or improvements, and to meet contingencies, both present and prospective. And their determination in respect to these matters, if made in good faith and for honest ends, though the result may show that it was injudicious, is final, and not subject to judicial revision.” The same subject received consideration by this court in Laurel Springs Land Co. v. Fougeray, 50 N. J. Eq. (5 Dick.) 756, in an opinion by Mr. Justice Garrison, in which he clearly and tersely states the legal rule to be “that the authority of the directors is absolute so long as they act in the exercise of an honest judgment.” This rule was followed with approval, by this court, in Murray et al. v. Beatty, 79 N. J. Eq. (9 Buch.) 604, at the last term, in an opinion by Mr: Justice Swayze.

We do not find that the conduct of the directors was not in the exercise of an honest judgment, and, therefore, that part of the decree directing the declaring of the dividend of $2,500,000 and to distribute the same to the complainants and other stockholders of the defendant company and to pay to the said complainants their costs and counsel fee of $5,000 each, should be reversed, with costs.

No. 66 (appeal of Prudential company) —

For affirmance—None.

For reversal—The Ciiibe-Justioe, Garrison, Swayze, Parker, Bergen, Yoo'rt-iees, Kali soft, Bogert, Yredenburgh, Ykooiu, Congdon, White—12.

No. 67 (appeal of Blanchard) —

For affirmance—Tiie Ciiiee-Justioe, Garrison, Swayze, Parker, Bergen, Yooriiees, Kalisoh, Bogert, Yredenburgh, Yroom, Congdon, White—12.

For reversal—None.


source: Caselaw Access Project

author:
Yredenburgi-i, J. Garrison, J.
     White, J.

license: Public Domain

text:
    The Chancellor of New Jersey v. Joseph Towell et al.
    [Argued December 1st, 1911.
    Decided March 5th, 1912.]
    1. Where a purchaser of a part of,mortgaged premises assumes the payment of all of the mortgage on the whole of such premises, the land so purchased is liable for the mortgage debt before the portion of the mortgaged premises remaining unconveyed by the mortgagor or his estate can be sold in satisfaction of the mortgage debt.
    2. In such cases the rule in equity that the aliened portions shall be sold in the inverse order of their alienation does not apply.
    3. One of the cogent reasons for denying the application of this rule in such cases (beyond that of enforcement of the performance of the contract of assumption) is the anxiety of a court of equity to avoid: the circuity of action which would necessarily result from the sale on foreclosure of the mortgage of the mortgagor’s remaining lands, before those of the defaulting- purchaser have been applied toward the satisfaction of the mortgage debt.
    I. The fact that the defendant Towell became an- alienee of the second and third tracts, conveyed to him expressly subject to the mortgage which he had previously covenanted to pay, must be regarded as decisive against him of the question of his equity which he has raised upon this appeal.
    ] On appeal from a decree of the court of chancery. Bill of foreclosure in equity by the chancellor of New Jersey against Joseph Towell and others, and the executors of Absalom B. Woodruff, deceased, defendants. Prom a part of the decree for complainant defendants appeal. I

      Mr. William L. Lewis, for the appellants.

      Mr. George S. 'HUton, for the respondent.
   The opinion of the court was delivered by

Yredenburgi-i, J.

- ' This controversy concerns the order of sale of parcels of mortgaged premises under foreclosure, and involves the correctness of the decree below in directing certain of the parcels which remain unconveyed by the mortgagor and his executors, to be sold before resort be liad to certain previously-conveyed parcels called in the decree the “Second and Third Tracts/^/

In December, 1870, Absalom B. Woodruff, being seized of a tract of land in Paterson, New Jersey, became indebted to the chancellor of New Jersey in the sum of $13,000, and gave his bond for double that s.um1 in the usual form to the Chancellor, conditioned to be void if he, Woodruff, should pay that sum, with interest, upon the happening óf the deaths of two-named persons (then living, but who have since died), and to secure such pa}fment executed at the same time a deed of mortgage, covering his said land, containing the same conditions as the bond.

Woodruff died October 11th, 1886, but before that event conveyed by deed of warranty two separate parcels of the land embraced in the mortgage, on the dates following: First, on July 5th, 1882, a parcel described in the master’s report as the “First Tract,” containing four acres, to the defendant Joseph Towell; second, on March 5th, 1885, another parcel—in lots numbered on a map as,lots 142, 144 (part of lot 146), 171, 173 and part of lot No. 175—described in the master’s report as the “Second Tract,” to the said Joseph Towell.

After WTiodruff’s death his executors, by an executors’ deed, drawn in the usual form and without covenants of warrant}’’, thirdly, conveyed on February 16th, 1887, another parcel of said mortgaged land, described in the master’s report as the third tract, being composed of lots Nos. 140 and 169, in block A, as laid down on a map, to the said Joseph Towell. There was then left unconve3i'ed in the estate of Woodruff lots 139, 141, 143, 145, 149, 151 and part of 153, on the west side of Lilly street, as indicated on said map.

The appellants urge that the above-designated second and third tracts should have been decreed to be sold next after the sale of the said first tract to pay any deficiency (there being no dispute as to its priority of liability) of the proceeds of sale necessary to satisfy the mortgage debt remaining after the sale of said first tract, and before resort be had to the said unconveyed lots still owned by the appellants. The decree complained of, on the contraiy, orders these unconveyed lots to be sold before the said second and third tracts are exposed to sale, and hence the dispute which is the subject of the present appeal. \

In the sale from Woodruff to Joseph Towell, dated July oth, 1882, the latter, in consideration of that conveyance to him, entered into an absolute agreement and covenant therein set forth (next to the description of the parcels conveyed by it), as follows, viz.:

“And which is hereby sold subject to a mortgage executed by said Woodruff to the chancellor of New Jersey, to secure the payment of $13,000 to the said chancellor, with interest, as in said mortgage stated, which mortgage was dated December 16th, 1870, or about that time, and the payment of which said sum of $13,000, with interest, as in said mortgage stated-, the said Joseph Towell hereby assumes and covenants for himself, his heirs, executors and administrators, to and with the said Absalom Woodruff, his executors, administrators' and assigns, to 'pay off and discharge according to- the terms and conditions in said mortgage mentioned including the buildings, plants, trees and flowers thereon.”

On tlie same date (July 5th, 1882), said Towell, with his wife, executed au indemnifying mortgage to said Woodruff, covering the same land and premises conveyed to Towell by the last-mentioned deed, stating in said mortgage

“that the premises thereby mortgaged were the same conveyed by said Woodruff to said Towell by said deed subject to said $13,000 and the payment of which said sum of $13,000 secured by said mortgage of $13,000, with interest, was by said Towell assumed; provided always, and said mortgage from said Towell to said Woodruff was therein declared to be, upon the express condition, that if the said Towell, his executors or administrators, did and should well and truly pay or cause to be paid to the chancellor the sum of money and interest secured by said $13,000 mortgage to said chancellor and indemnify and .save harmless the said Woodruff from any payment thereon, according to the condition of a certain bond bearing even date with said mortgage to said Woodruff, executed by said Towell to said Woodruff, then said bond and mortgage of said Towell should be void.”

The explicit terms of this mortgage from Towell to Woodruff make assurance doubly sure that the' intent of the respective parties executing and accepting these sealed instruments was, that Towell assumed thereby, as a part consideration for the land conveyed to Mm, to pay and discharge all of Woodruff’s said mortgage debt to the Chancellor, and indemnify Woodruff against its payment.

Incontestably, the consequence, in equity, of such an assumption was, that Towell became thereafter, as between himself and his vendor, the principal debtor, and the liability of the vendor, Woodruff, in respect to the mortgage debt, was that of surety. This relationship established by the covenant of Towell in the deed was reinforced by the terms of his bond and mortgage just quoted.

the acceptance of this title the clause of assumption by Towell in the deed to him became his covenant, and he thereby became bound in law to his grantor to pay the mortgage (Finley v. Simpson, 22 N. J. Law (2 Zab.) 311), and liable to him for any deficiency which might exist upon a sale of the mortgaged premises. ]

In Weatherby v. Slack, 16 N. J. Eq. (1 C. E. Gr.) 493, Chancellor Green said: “The real question in such eases must always be, Who, in equity, is bound io pay ihe debt? The debt is due from the mortgagor to the encumbrancers, and his (the mortgagor) portion of 'the mortgaged premises must primarily bear the burden, ‘unless U be shown that it has, by some means, been, shifted upon the portion of ihe alienees.’ ”

j~~ As soon as the debt in question became payable, Woodruff, the ‘ surety, bad the right to file a -bill to compel payment by Towell, the principal debtor, in order that he, the surety, might be relieved from responsibility; and the court will interfere “to compel payment by the principal rather than the surety, in order to enforce the performance of the obvious duty of the principal to protect the surety from a needless burden, and io prevent circuity of action.” Irick v. Black, 17 N. J. Eq. (2 C. E. Gr.) 189, 197. “The court will interfere though the principal is perfectly able to respond in damages, and there is no clanger of eventual loss.” Ibid. 197.

In Shannon v. Marselis, 1 N. J. Eq. (Saxt.), at p. 424, Chancellor Vroom said: “It is the policy and duly of this court to settle, and adjust all claims between the parties in one suit, if possible. * * * There can be no good reason assigned why there should be this circuity of action, hut a very good one why there should not; which is, that the money might be lost (to Carrick) altogether.”

The rule in equity that where mortgaged' premises are sold in separate parcels successively to different purchasers with covenants against encumbrances, the parcels are liable to sale to 'satisfy the mortgage, in the inverse order of their sale, "will nolle applied in any case where Us application would work injustice.” Hill's Administrator v. McCarter, 27 N. J. Eq. (12 C. E. Gr.) 41; Hoy v. Bramhall, 19 N. J. Eq. (12 C. E. Gr.) 563; Hanes v. Denby, 28 Atl. Rep. 798.

Professor Pomeroy, in his “Equity Jurisprudence” (at p. 215 1224 vol. 3), states the general rule in equity in this form:

“Whenever the mortgagor has conveyed separate parcels of the mortgaged premises by warranty deeds to successive grantees and there was no special provisions in any of their deeds, and no other dealings between themselves or with the mortgagor, which disturb the equities otherwise existing, a priority results depending upon the order of conveyance.”

But, in his next paragraph (1225), ho proceeds to consider the dealings between the grantee anbthe mortgagor which “disturb” those equities, and defeat the rule, and says:

“The doctrine stated in the foregoing paragraph is one of purely equitable origin, and is not an absolute rule of law, and if the peculiar equitable reasons on which it rests are wanting, it ceases to operate. ® ® * The equities among successive 'grantees as determined by the general doctrine of the preceding paragraph will therefore be disturbed in the following instances: (1) Whenever a grantee of any parcel either expressly assumes the payment of the mortgage, or his deed is of such a form that he takes the parcel conveyed to himself subject to the mortgage as a part of the consideration, then, as has already been shown, the parcel thus purchased becomes, in the hands of himself and of those holding under him primarily chargeable with the mortgage debt as against the mortgagor grantor, and consequently as against all subsequent grantees of other parcels from “the mortgagor. By such an express or implied assumption, the doctrine of liability in the inverse order of alienation, and all its consequences are defeated with respect to the mortgagor and the subsequent grantees. (2) In like manner when the deeds to the successive grantees are not warranty or equivalent thereto, but simply purport to convey the mortgagor’s right, title and interest in the parcels, the intention is clear, that the grantees respectively assume their portions of the burdens. Their several parcels are all liable ratably and not in the inverse order.”

The record brought up on this appeal shows that, in the said deed of March 5fch, 1885, from Woodruff to Towell, conveying the second tract, there is a clause reading:

“Subject, however, to a mortgage of $13,000 to the chancellor by said Woodruff, on or about December 19th, 1870, which said Towell has heretofore assumed and agreed to pay, and that the said Woodruff will warrant, secure aud forever defend the said land and premises unto the said Joseph Towell (except the said mortgage) and his heirs and assigns forever,”

and that in the said deed of February 16th, 1887, from the executors of Woodruff to Towell, conveying the Hard tract, there is a clause reciting the terms of a lease given by Woodruff to Towell, and reading in the deed as follows :

“Free from ail encumbrance except a mortgage of $13,000 given by said Woodruff to the chancellor of New Jersey and which said mortgage said Towell has already assumed and agreed to pay.”

But quite irrespective of the form of these admissions of Towell, in these deeds to him, of his assumption of the mortgage, his obligation to pay 1he $13,000 mortgage debt already existed and could not thereby be enlarged, and when these second and third tracts were conveyed to him) subject to the mortgage, the rule as to sale in the inverse order of alienation ceased, as we have seen by the authorities, to be applicable. The fact that Towell himself became an,alienee of the second and third tracts conveyed to him expressly subject to the mortgage which he had covenanted to pay, is decisive .against him upon this question. The holders of the subsequent mortgages from Towell ($5,000 to the Chancellor, dated August 29th, 1896, and $2,000 to Zabriskie, dated January 31st, 1900)' can stand certainly in no better position than Towell; when they took their mortgages the public records then showed them that the lands included in their mortgages were subject to the $13,000 mortgage, and they thus had full notice that those lands must bear the same equitable proportion of the mortgage burden upon the whole tract which Towell was bound to bear._,

The decision in the case of Thompson v. Bird, 57 N. J. Eq. (12 Dick.) 175, is pointed authority in this state in support of the position that the rule as to sale in the inverse order of alienation is inapplicable to eases like the present. It was there held, as to the mortgagor’s lands remaining in him after his conveyance of a part, that “where a purchaser of a part of the mortgaged premises assumes the payment of all, or a portion of the mortgage on the 'whole of such'premises, the land so purchased is liable for the mortgage debt, or such portion of it assumed bjr the purchaser, before the remaining portion of the mortgaged premises held by tlie mortgagor can be sold in satisfaction of the mortgage debt.”

Justice Reed, sitting as Vice-Chancellor in that case, thus defines (at p. 177) the true rule, and its reason, in characteristically clear language, as follows: “But if any purchaser of a part of mortgaged premises instead of bargaining for a clear title, chooses to assume the payment of all or a part of an encumbrance upon the whole of such premises, such purchaser cannot equitably ask that the remaining portion shall be first sold to answer the mortgage debt, for it is apparent that after such person gets the land from a mortgagor at a less price on account of the encumbrances, the payment of which he assumes, he cannot ask that the land of the mortgagor shall be sold to relieve his own land of the debt which he has promised to pay as a part of the consideration for his purchase.”

The decree there was that the mortgagor’s remaining land .should be sold last. The eases cited on page 178 of the opinion fully sustain its conclusions: among them are the very early decisions in this state of Engle v. Haines, 5 N. J. Eq. (1 Halst.) 186; Wikoff v. Davis, 4 N. J. Eq. (3 Gr. Ch.) and others which have been followed to the present time as leading authorities upon the subject.

Both reason and authority lead us therefore to hold that the defendant Towell, having agreed, as part consideration for the purchase of the first tract, to relieve Woodruff from liability to pay either the whole or any part of the mortgage debt himself, Woodruff’s estate is entitled to compel him to perform that contract. It is plain that if it should in the future be necessary to sell that part of the mortgaged premises still remaining in the Woodruff estate for the purpose of satisfying any part of the mortgage debt, that that estate would be entitled to call upon Towell to.make good the loss which would have fallen upon it by reason of his breach of his contract of assumption. Towell has therefore no right to have any part of the Woodruff lands sold to satisfy the $13,000 mortgage, and, consequently, all the property which ho holds by conveyance from Woodruff, or from Wood-ruff’s estate, which is subject to the mortgage, should be first exhausted for the purpose of satisfying the mortgage debt.

This course would avoid circuity of action, and this, the court, for obvious reasons, regards as a duty which it is always anxious to accomplish.

The decree below should be reversed to the extent required to conform to these views.

Garrison, J.

(concurring).

My vote to reverse is based solely upon the equitable rule stated by Professor Pomeroy in the concluding paragraph of section 1225 of his work oil Equity Jurisprudence and quoted at length by Judge Yredenburgh in his opinion.

The deeds on record at the time the second mortgage was taken gave notice by their terms of the equities subsisting between the mortgagor and his grantee by which the direct and not the reverse order of alienation obtained. This was notice that the second mortgagee would have no right to marshal securities as against the land not included in his mortgage. The decree giving such right to the second mortgagee, who was also the holder of the first mortgage, was therefor erroneous.

White, J.

(concurring).

The equitable doctrine of “inverse order of alienation,” as applied to the order of sale of several parcels of a tract of land covered by a foreclosing encumbrance, is, as I view it, dependent upon the payment of the consideration for the parcels conveyed, and arises because it would be inequitable for the mortgagor-grantor, who had already received.the full consideration for the parcel conveyed, to call upon such parcel to contribute towards the payment of his mortgage debt until his remaining mortgaged land had been first exhausted. Of course, there may be other reasons than non-payment of consideration for the express assumption by the eonvej’ed parcel of a part or all of the mortgage debt, but, in the absence of such express assumption, the payment or non-payment of the consideration furnishes, in my judgment, the real underlying and substantial basis for the application or non-application of this equity rather than the presence or absence of a covenant warranting title. Of course, a warranty of title against the mortgage will give rise to the application of the equity, but obviously there would be no warranty of title if a part of the consideration was to be the payment by the conveyed parcels of the mortgage debt, and, on the other hand, the mere absence of an express warranty of title against the mortgage encumbrance, if there had in fact been a payment of the full consideration for the conveyed parcel, would not defeat the real reason for the equity, and, consequently, as it seems to me, would not defeát the application of the equitable doctrine under consideration. In other words, if the grantee of the conveyed parcel expressly assumes the payment of the mortgage debt, such assumption obviously enters into the consideration for the conveying and defeats the application of the rule or equity of inverse order of alienation. So, if it appears in anjr other way that the consideration in whole or in part was not paid because of the parcel being conveyed subject to the lien of the mortgage debt, the rule is also defeated to the extent of such non-payment of consideration. But if it appears that the full consideration for the conveyed parcel was actually paid to the mortgagor-grantor, the grantee is entitled to call upon the remaining mortgaged land owned by the mortgagor-grantor to pay the mortgage debt before the conveyed parcel shall be attacked, and this quite irrespective of the nonexistence of any express covenant of warranty of title.

This is my understanding- of the doctrine laid down by Pomeroy (paragraphs 1224 and 1225) and by Mr. Justice Reed in Thompson v. Bird, 57 N. J. Eq. (12 Dick.) 175.

Assuming that the language of these conveyances sufficiently establishes the payment of the full consideration, this view would lead, it seems to me, to an affirmance of the vice-chancellor’s decision if there were no express assumption of. the mortgage debt in the conveyances of tracts “second” and “third” in this case, because I cannot see how the doctrine of “avoidance of circuity of action.” could have tile effect against the second mortgagee of interposing before his lien the personal obligation of Towell upon the collateral bond which the latter gave when ho purchased tract "first.” As was said by Mr. Justice Garrison in Brewing Company v. Clement, 71 N. J. Eq. (2 Buch.) 224, 229: “Avoidance of circuity of action is at best a doctrine of convenience—a secondary equity, so to speak—and not to'be resorted to in the face of either legal rule or substantial right.”

If, therefore, the ease were bare of other circumstance than the fact that Towell is the same person who assumed the payment of the mortgage debt as part of the consideration for the “first tract” conveyed to him and gave a personal collateral bond conditioned upon his paying such debt, I should think the payment by him to the mortgagor-grantor of the full consideration for the “second” and “third” tracts would entitle his second mortgagee to require the sale.of the mortgagor-grantor’s remaining land before said tracts were called upon.

There was, however, another important circumstance connected with the conveyances of these two tracts. They were not only conveyed subject to the lien of the mortgage, but it was expressly stated in the conveyances that this was done purposely because the grantee, Towell, had already assumed the payment of the mortgage debt. This statement, it seems to me, in view of the fact that the mortgage was a lien upon the tracts, constituted an express extension of the previous assumption upon the “first” tract to the “second” and “third” tracts.' It was in effect an as-, sertion by the mortgagor-grantor, “I will not remove the lien of the mortgage debt from these two tracts as my acceptance of the full consideration would otherwise oblige me to do because -the buiden is upon yon .to do so as a result of our previous transactions,” and it was an agreement by the grantee that the mortgagor-grantor should not be called upon to so remove it, but, on the contrary, he, the grantee, should be subject to the burden of either doing so or holding these two tracts also in addition to the "first” tract subject to the burden of the whole mortgage debt.

This being so, of course the second mortgagee took with full , notice and can no more invoke an equity expressly bargained away than his mortgagor, who bargained it away, could invoke it.

I concur in the reversal, therefore, but for the reasons above stated.

For affirmance-*—None.

For reversal—The Chief-Justice, Garrison, Swayze, Trenci-iard, Parker, Bergen, Yoori-iees, Minturn, Kalisci-i, Bogert, Vrtsdenburgh, Yroom, Congdon, Wi-iite—14.


author: Yroom, J.

text:
    Howard E. Greims, petitioner below, appellee and cross-appellant, v. Jennie E. Stanney Greims, defendant below, appellant and cross-appellee.
    [Argued March 8th, 1912.
    Decided June 20th, 1912.]
    1. A husband condones his wife’s adultery by continuing marital intercourse with her after knowing of her offence.
    2. On a bill for divorce for adultery, condonation is a conclusion of fact, if not of law, and must be proved by defendant, upon whom lies the burden of proof.
    3. Evidence held insufficient to show condonation of a wife’s adultery.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevens, whose opinion is reported post p. SSI.

      Mr. Oortlandt Parker, for the appellant.

      Mr. James R. Mulligan, for the respondent.
   The opinion of the court was delivered by

Yroom, J.

The bill in this case was filed by the husband, charging his wife with adultery committed with one David Young, Jr., at York* in the State of Pennsylvania, on the 39th day of January, 1908, and at divers other times between January 34th and February 16th of that year at No. 55 Beaver street, in York, and at various other places in that town. The YiSe-Chancellor held that the evidence established the guilt of the defendant, that the only debatable question was that of condonation, and that it had been condoned, and therefore advised the dismissal of the petition of the husband. The wife appealed from so much of the decree as adjudged her guilty of adultery, and the husband appealed from so much as decreed that he had condoned his wife’s defence and directed a dismissal of his petition. "We agree with the conclusion of the Vice-Chancellor as to the adultery of the wife, leaving only for consideration the condonation on the part of the husband. ■

Condonation, as stated by 2 Bish. Mar. & D. § 36, is

“where the husband comes into possession of the fact and proof that his wife has committed adultery, then if he has marital intercourse with her, the law presumes that he condones the offence and refuses him divorce.”

It is well settled that condonation is a conclusion of fact and not of law and must be proved by the defendant, and the burden of proof is upon the defendant. Graham v. Graham, 50 N. J. Eq. (5 Dick.) 701, 706; Goeger v. Goeger, 59 N. J. Eq. (14 Dick.) 15, 16; Hann v. Hann, 58 N. J. Eq. (13 Dick.) 211; Bornstein v. Bornstein (1893), L. R B. Prob Div. 292, 302.

The learned Vice-Chancellor bases his conclusion upon his belief that from the weight of the evidence the husband had marital intercourse with the defendant after he came into possession of the fact and proof, as he says, or to use the expression in Marsh v. Marsh, 13 N. J. Eq. (2 Beas.) 281, “reasonable knowledge.” .

In using the term “reasonable knowledge” in the case of Marsh v. Marsh, there can be no doubt but that Chancellor Green was considering merely legal proof, for he says, “reasonable knowledge may be said to have been when information' of a fact is given by credible persons, speaking of their own knowledge, particularly if the same facts be afterwards proved and they become instrumental in the proof.”

If then the evidence in this cause had shown that the petitioner had produced any facts in evidence proving the guilt of the defendant and of which he was aware before he ceased having marital relations with her, admittedly there would be ground for the position of the court below that such marital intercourse was a condonation of the guilt of the wife.

The evidence in this case established the fact that the parties were married in September, 1904. After their marriage they "lived in several cities before coming to York, Pennsylvania, where the acts of adultery complained of were committed—some of these acts rvere committed during the absence of the complainant from his home. The complainant’s business was that of a railroad accountant or auditor, and while at York was employed by a Hew York firm to examine the accounts of a trolley system in that city. He became acquainted there with David Young, Jr., who is named as co-respondent, who was the superintendent of said trolley system, and Young and his wife and the complainant and his wife were much together. About the 24th of Jammy, 1908, the complainant went on business to Yew York and remained for about a month and a half. It ivas during this absence that the adultery was committed. On complainant’s return to York he found lying on the bureau in his wife’s room a letter from David Young, of a character certainly calculated to arouse his suspicions, and it evidently did, for he demanded an explanation of it from her; she said it was only some of Young’s foolishness. She denied any guilt, he believed her and they became reconciled and lived together, and he continued marital relations with her up to about the time he loft her on August 1st, 1909. He occupied the same bed with his wife until the separation and admits that earli'er 'in the week, on up to Thursday night, he may have had sexual intercourse with her.

Eight days before he left his wife, that is, the Sunday beginning the last week in July, 1909, complainant stated that he was told by his brother Morton that David Young’s wife had gone to York to obtain a legal residence there in order to sue her husband fox divorce, and that she was going to name his wife as corespondent in the case. Although complainant says he “didn’t take any stock in what Morton had to say,” the next day, meeting his wife’s mother, Mrs. Davis, he asked her whether he couldn’t have a little talk with her. On her assenting, while walking on the street with her he told her he had been informed that his wife had been unfaithful to him for a year and a half, and that Mrs. Young had been in York maintaining a legal residence and was going to name Mrs. Greims as co-respondent. Mrs. Davis asked him whether he was crazy or not and said there is no truth in this and said she didn’t see how I could believe that Jennie (the defendant) ever cared anything for Mr. Young.

On. returning from the walk Mrs. Davis told the defendant what her husband had said and that evening, as the defendant testified, she talked the matter over with her husband; he replied that the little baby didn’t look a terrible lot like him; that, “he had been wise” and that she had been unfaithful to him for a year and a half. Then she added, “I was very nervous and excited and he harassed me and talked awhile and said everything would be all right, and that is all that was said that night.”

The next dajq Tuesday, the petitioner went to the office of Charles W. Mercier, an uncle of his wife. Mr. Mercier testified that the petitioner said to him, “Uncle Charlie, I .am going to leave Jennie. Would you see her and have her walk quietly out.” Then he (Mercier) asked what the trouble was and petitioner replied, “Jennie had been crooked for a year and a half and I have known it.” The uncle says he told him if that was the case, he, the petitioner, was a fool to live with a woman that long, knowing that she was unfaithful to him, to which the petitioner replied, “Well, I thought I would give her a chance.” The petitioner denies saying to Mr. Mercier that he had known his wife was unfaithful to him.

On the same day, while returning home in company with his brother he met Mrs. Young and she said to him “that she wasn’t going to bring an action for divorce against her husband, that she was just back from York and was living with Dave again.”

On Friday of the same week the solicitor with whom Greims had conferred met him and one Clader, who was then living with tlie petitioner, and it was then that Clader told him that he was carrying notes back and forth from Mrs. Greims to Mr. Young, and that Mrs. Greims had made a confession to him about the child not being a legitimate child, and had told him that you would be willing to tell Howard (the petitioner) everything except that she put it to Dave and had went the limit down to York, Pennsylvania. While the petitioner testified that lie didn’t believe Clader’s statement, he couldn’t see why a woman should talk to him of those things; he did, however, determine apon a decided step; he says,

“I decided to leave Mrs. Greims and to make an investigation and to find ont if what they said was true. In fact I didn’t know anything about it myself and would have to go down to York to find out whether what they did tell me was trug.”

On Friday and Saturday he remained at the house and both nights occupied the same bed with his wife, but had no marital intercourse with her.

On Sunday, August 1st, 1909, he left the house and taking with him his daughter Marjorie did not return. On that day he sent to his wife the following letter:

"August 1st, 1909.
“Mrs. B. Greims,
17S N. 17th Street,
Bast Orange, N. J.:
“Dear Jenhie—I requested my attorneys to commence legal proceedings against you to secure a divorce and you will be duly advised by them in connection therewith. In accordance with their advice I have taken Marjorie with me and will provide for her. I enclose you my check, No. 607, in the amount of $10, to cover immediate needs. I have arranged with my attorneys, Cortlandt and Wayne Parker, Room 810, Prudential Building, Newark, New Jersey, to provide you with funds for necessities .pending judgment, which money you can procure from time to time by calling on said attorneys. All matters which you desire to take up with me must be done through above attorneys.
“Yours very truly,
“H. E. Gbeims.”

From these facts, and they substantially include all that are essential to the determination of this cause, the Yice-Chancellor concluded that the petitioner was not entitled to a decree of divorce, for the reason that he had condoned the guilt of his wife. Holding that he had “the right to draw such inferences as the whole evidence may warrant,” he thought that Greims did have “reasonable knowledge” of his wife’s guilt as earty as or before Tlrursdaj7, July 39th, and that he may have had sexual intercourse with her up to and including Thursday night.

The fact that the Vice-Chancellor uses the term “reasonable knowledge” as a quotation makes it. certain it is from the opinion of Chancellor Green in Marsh v. Marsh, supra. This leads us to consider whether, in fact, the petitioner had on or before Thursday, July 39th, the reasonable ’knowledge which in Marsh v. Marsh is defined to exist “when information of a fact is given by credible persons, speaking of their own knowledge, particularly if the same facts be afterwards proved'and they become instrumental in the proof.” .

You will search in vain through this record for any evidence produced at the trial of this case which was known to the petitioner when he left his wife, and it was urged, and justly so, that the petitioner had then no legal evidence whatever, unless the alleged confession to Clader was legal evidence.

That the petitioner may have had suspicions as to the guilt of his wife can readily he assumed, and in- looking at the case as presented in the evidence it may seem incredible that he should have continued so long to cohabit with her. But as Bishop says,

“suspicion is not knowledge. It is not belief: Beyond which reason demands that something be conceded—in some instances a great deal—to the special confidence which married parties commonly do and always should have in each other.”

It must be remembered that the petitioner had faith in his wife and gave full credit to her continued assertions of innocence, and as Vice-Chancellor Malins said in Brown v. Brown, L. R. 7 Eq. 185, 193, “husbands are apt to believe what their wives tell them.”

As hereinbefore stated, the burden oí proof to establish con-donation was upon the defendant and this she failed to do. There is no proof whatever that the petitioner had sexual intercourse with his wife after Thursday, July ,39th. The petitioner testified that he had not, and the defendant, although a witness, did not assert that he had. That he occupied the same bed with his wife on Friday. and Saturday night might, if unexplained, warrant a conclusion of forgiveness on the part of the husband, but any presumption of condonation arising therefrom may be rebutted and has been in this case.

We agree with the learned Vice-Chancellor that this case is not without difficulties, but we think most of the difficulties of the court below have arisen when, after decreeing without hesitation the guilt of the wife, it has endeavored to establish con-donation and condemn the petitioner to “a life of , most loathsome bondage.”

The decree below, so far as it finds condonation, should be reversed.

■STo. 56—

For affirmance—ISTone.

For reversal—The Chief-Justice, Garrison, Swayze, Thenchard, Parker, Bergen, Voorhees, Minturn, Bogert, Vredenburgi-i, Vroom, Congdon, Wi-iite, Treagy—14.

STo. 57—

For affirmance—The Chief-Justice, Garrison, Swayze, Trenohard, Parker, Bergen, Voorhees, Minturn, Bogert, Vredenbúrgh, Vroosi, Congdon, White, Treaoy—14.

For reversal—ISTone.


author: White, J.

text:
    Margaret J. Sanford, complainant-appellant, v. Ernest F. Keer, defendant-respondent.
    [Submitted December 11th, 1911.
    Decided April 26th, 1912.]
    1. A restrictive covenant in a conveyance of a part of a tract of land, beneficial to the value or use of the remainder of the tract, will be enforced in equity in favor of the covenantee owning such remainder, against the covenantor’s grantee, with notice of the covenant, of the restricted part.
    2. The right of such covenantee to enforce the unmodified portion of the covenant is not defeated by the fact that it with other like covenants imposed upon neighboring lots, form a general, or- neighborhood scheme which has been modified by the elimination of some of the prohibitive provisions thereof by general consent or acquiescence, in a manner, however, not destroying the essential mutual benefit enjoyed by the lot owners from the general- scheme, nor the benefit to the covenantee’s remaining property to be derived from performance of the covenants of the general scheme as so modified.
    3. Where a tract of land is divided into building lots and a plan exhibited showing to prospective purchasers the streets and lots thereof, and such purchasers are induced to buy the lots by and in reliance upon representations, either public or private, that all conveyances would contain protective restrictions of a designated character and purpose, the restrictive covenants inserted in the conveyances of the lots in accordance with these representations constitute a general or neighborhood scheme and may he enforced between the lot purchasers inter sese.'

      4. In a general or neighborhood scheme the burden follows the benefit, and where by reason of abandonment, acquiesced-in vioiation, change of character of the neighborhood, or other sufficient cause, the benefit to the property owners affected by the scheme is totally or partially destroyed or impaired, the accompanying burden undergoes a corresponding modification.

      5. Where by reason of a change of the character of a neighborhood the enforcement of a restrictive covenant would be a burden upon the restricted property without conferring -any benefit upon the property of the covenantee, equity will refuse relief, but where the change does not conflict with the essential purpose of the covenant and the benefit therefrom remains unimpaired, a violation will be enjoined.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Howell.

      Tlie complainant and her husband (who is now deceased and whose share has passed to her) were the owners, by the entirety, of a tract of land on the north side of Clinton avenue, in the city of Newark, which they laid out into building lots, opening-up streets (Shanley, formerly Sanford, avenue, South Tenth street and South Eleventh street, running north and south, and Madison avenue, running east and west) through it, and of which they prepared a plan showing the streets and the building lots thereon. They sold a very large portion of these lots and conveyed them to the respective purchasers under and subject to express restrictive covenants against their use for other than residential purposes and providing for improvements of a character indicated by the terms of the covenants, which terms varied somewhat in the different sections of the tract, apparently in accordance with the class of improvements intended to be promoted in each section. All the lots sold, however, were restricted for residential purposes and dwelling-house improvements of one class or another. The original mansion-house portion of the tract, where complainant and her husband lived when the sales took place and where she still resides and which she now owns, occupies nearly the entire block on the west side of South Tenth street from Clinton avenue to Madison avenue, and the lots, nine in number, on the opposite (or easterly) side of South Tenth street in this block (including the lot in question now owned by defendant) have all been sold (except one which complainant still owns) and conveyed, subject to the express restrictive covenants that the grantee, his heirs and assigns, will not erect, suffer or permit to he erected thereon within a period of fifty years any building whatsoever other than a private dwelling-house, such private dwelling-house to be used only as and for a private residence and for one family only; that it should set hack from the street line thirty feet to the piazza line, or thirty-nine feet to the main building (except the one on the corner of Madison avenue which had' to set hack forty-two feet), and that it should cost at least $5,000, in all cases except two, one of which, that of the first lot sold, specified $4,500 as the minimum cost, and the other, the corner, $12,000 as the minimum cost of such dwelling-house. In addition to these provisions, which were contained in the deeds for each of the eight Jots sold in this block, and, in the same or a modified form somewhat varying seemingly to suit different sections, were common throughout the entire tract, there appeared in the deed for four of the lots (including that of defendant) in the block in question, an additional restriction against stables or outbuildings of any description, whereas in the deeds for three other of these lots there is coupled with the restriction for the dwelling-house, permission for necessary or appropriate outbuildings, and in the case of the corner lot a private garage is expressly permitted upon the rear end of the lot farthest from South Tenth street. _ The evidence shows that private garages have also been constructed upon tlie rear end of two of the other lots in this block upon which dwelling-houses in accordance with the restrictive covenants had been constructed, and in one of these instances there is evidence that complainant, consented to the insertion of the clause “together with necessary outbuildings” to enable the purchaser to erect a private garage in the rear of his lot for use in connection with his dwelling-house thereon, because he refused to buy unless this were permitted.
    The defendant owns a lot fronting on South Tenth street and directly opposite the mansion-house owned and occupied by complainant as aforesaid and about the middle of the block ip. question, which lot he bought from one Weston, a grantee from complainant and her husband by a conveyance containing the following restrictive covenant:
    “That the said party of the second part, his heirs and assigns, shall and will not at any time prior to the first day of April, 1955, erect, suffer or permit to. be erected on the lands above described and hereby conveyed or on any part thereof any building whatever other than a private dwelling-house, which' said dwelling-house shall be used only as and for a private residence and for one family only and for no other purpose whatsoever ; that no part of said dwelling-house, except the piazza, shall be erected or placed within thirty-nine feet to the curb line of the street in front of said premises above described and hereby conveyed, and that the said party of the second part, his heirs and assigns,. will not erect or permit to be erected on the premises hereby conveyed, prior to April 1st, 1955, any dwelling-house costing less than $5,000, which said dwelling-house shall be erected and completed in a good workmanlike manner. It is also hereby further stipulated and expressly agreed by and between the parties hereto, their heirs and assigns, that no stable or outbuilding at any time hereafter shall be erected or placed on the premises above described and hereby conveyed, and that the grade of said lot shall be made to correspond to the grade of the lots adjoining the lot hereby conveyed on which dwellings are now erected, and that the above restrictions and each of them shall run with the land hereby conveyed, the same having been computed as a part of the consideration of this conveyance.”
    Defendant has constructed a garage, not upon the rear of his . lot, but in substantially the exact location (forty feet from the curb line) thereon, specified by the restrictive covenant for a dwelling-house; he has not constructed any dwelling-house on this lot, but resides in a dwelling-house on another lot which he owns, fronting on Shanley avenue and abutting up to the lot in question in the rear, and he uses the garage in connection with his dwelling-house on said other lot.
    The bill was filed promptly upon the commencement of the building of the garage, a restraining order 'was applied for and refused, and the defendant proceeded with and completed the garage at his peril. Upon final hearing, a decree was entered refusing the injunction prayed for and dismissing the bill, and the present appeal is from that decree.

      Mr. Frank F. Bradner, for the complainant-appellant.

      Messrs. Raymond, Mountain, Van Blarcom & Marsh, for the defendant-respondent.
   The opinion of the court was delivered by

White, J.

The complainant in her bill expressly repudiates any general or neighborhood scheme of restrictive covenants, and bases her praj^er for relief upon the individual and particular covenant (above recited in full) entered into with her by defendant’s vendor and appearing in his chain of title. It is beyond question and is ■ admitted that 'what defendant has done is a clear violation of the terms of this covenant and that, he purchased .with complete notice of these terms. Under these circumstances standing alone, it is too well settled to require discussion, that complainant (whose remaining property still owned by her is, clearly injured bjr the breach) is, entitled in equity to enforce performance of the covenant against the defendant. Tulk v. Moxhay, 2 Phill. 774; Coudert v. Sayre, 46 N. J. Eq. (1 Dick.) 386; Hayes v. Waverly and Passaic Railroad Co., 51 N. J. Eq. (6 Dick.) 345, and other cases too numerous to mention.

The defendant on the other hand invokes in defence two principles, which, if substantiated by the facts, are almost, if not quite, equally well settled.

The first is, that the covenant in question formed part of a general or neighborhood scheme, and that this scheme in so far as it is involved in this violation, has been abandoned by mutual .consent and acquiescence of all parties in, interest, including the complainant, not only by permitted violations of its requirement in several cases where it did appear in the covenants, but by its entire omission from the covenants upon some of the lots and the substitution in place of it of express consent to such violation. This point, if applicable to the facts, is fatal to the relief asked by complainant. In a neighborhood scheme the burden follows the benefit. It is the mutual benefit accruing to all and to each.which makes it inequitable for anyone so benefited to repudiate the burden to the injury of the others. If, therefore, the parties in interest by express act or passive acquiescence permit such violations of the plan or scheme as destroy wholly or partially the benefit therefrom, they have to a corresponding extent absolved each other from its burdens. Thus, in Roper v. Williams, 1 Turn. & R. 18, Lord-Chancellor Eldon said: "Having lived in Gower street, I have often been in the habit of illustrating my view of such cases by reference to the stipulations contained in the Duke of Bedford’s lease. In the .lease of the houses on the east side of that street is contained a covenant that there.shall be no erection behind .them exceeding a certain height.. The landlord in such a case is stipulating, not only for his own benefit, but for the benefit of all the tenants in that neighborhood. If, therefore, the landlord in. some particular instance, lets loose some of his tenants, he cannot come into equity tó restrain others to whom he has not given such license, from infringing the covenant. He may-have a good case for damages at law; but, if he thinks it is right for him to take away the benefit of Ms general plan from some of his tenants, he cannot, with any justice, come into equity for an injunction against those tenants. It is not a question of mere acquiescence; but in every instance in which the grantor suffers grantees to deviate from the general plan intended for the benefit of all, he deprives others of the right which he had given them, to have the general plan enforced for the benefit of all.” In Peek v. Matthews, L. R. 3 Eq. Cas. 515, it was said: “The vendor in such cases, stipulating for the benefit of himself and others, as a quasi-trustee for them, is bound to enforce the covenant as much against one as against the other.” See, also, Ocean City Association v. Headley, 62 N. J. Eq. (17 Dick.) 322, and Trout v. Lucas, 54 N. J. Eq. (9 Dick.) 361.

Turning now to the present case, the vice-chancellor found as a fact that the 'restrictive covenants contained in the deeds from complainant and her husband for the various lots of this tract which were sold, constituted a general or neighborhood scheme, and an examination of the evidence completely confirms this view. There was a plan of the lots with the streets and avenues laid out thereon exhibited to the purchasers, who were induced to buy by representations that the value of their proposed improvements would be protected by the fact that restrictions were placed on all lots as sold, and the nature and provisions of these restrictions were explained to them according to the particular section in which they proposed to purchase. It is difficult to see how these representations could be made for the purpose of inducing the proposed purchasers to pay higher prices for the lots because of their protected condition, unless it was intended that this protection should inure to the benefit of the purchasers of the lots so protected, and that is the exact test which decides in favor of a general or neighborhood scheme. De Gray v. Monmouth Beach Club House Co., 50 N. J. Eq. (5 Dick.) 329, 338.

It is true that these restrictions varied in different sections in accordance with the designs of the promoters for the character of such sections, respectively, but this does not interfere with the integrity of a neighborhood scheme. Hnder such circumstances, the covenants applicable to each section become, to a certain extent, a separate scheme for that section, the various covenants on the different sections forming a general scheme for the whole, only in so far as all contain features common and beneficial to all. Morrow v. Hasselman, 69 N. J. Eq. (3 Robb.) 612.

What, then, was the essential and beneficial' neighborhood scheme for the lots on the east side of South Tenth street between Clinton and Madison avenues which the purchasers of those lots became protected in their right to enjojq and the destmetion of which would deprive them of the benefit in return for which they submit to the reciprocal burdens? We think it was to have those lots used and improved during the time limited by the restriction, for residential purposes, with one dwelling-house for occupation by one family only on one lot, such dwelling-house to set back from the street in accordance with the line established by the restrictions, and to cost at least about $5,000 to build; that as incidental to this general purpose there was also a start made to restrict against outbuildings of any character, but that this part of the restriction where it was imposed has been modified by mutual acquiescence by the insertion, in place of it, in some of the conveyances in connection with the dwelling-house covenants, of the phrase “with necessary or desirable outbuildings,” and by its violation in one or more instances by the erection of a garage on the rear of a lot upon which a dwelling-house was constructed in conformity with the dwelling-house restrictions. We do not think, however, that this modification of this incidental feature is of such a nature as to destroy or impair the mutual benefit to the lot owners of the essential general dwelling-house scheme upon the protection of which they Telied. So far as the modification of what may be called the incidental “no outhouse scheme” is concerned, of course, defendant’s covenant is likewise modified so ihat his burden will correspond with his benefit, but as to the main essential purpose of the neighborhood dwelling-house scheme, we think defendant’s lot continues to participate in its benefit, and, consequently, remains subject to its burden.

This being the case, the question arises, does the construction of the defendant’s garage, not on the rear of his lot behind a dwelling-house constructed thereon in conformity with the covenant, but instead of that, constructed without any dwelling-house on the lot at all, and in the very place fixed oy the covenant for the dwelling-house to go, fall' within the modification of the incidental outhouse covenant so as to be protected by such modification ? We not only think that it does not, but, on the contrary, that it is a violation of the essential and beneficial purpose and effect of the neighborhood dwelling-house scheme. This scheme gave each lot owner wiio paid a higher price for his lot with that in view and constructed his dwelling-hoírse in accordance with the covenant, the right to expect that the improvement upon his neighbor’s lot in close proximity to his own dwelling-house and fronting upon an uniform building line, would be a similar dwelling or one at least of the designated cost. The advantages to him of such an arrangement are too obvious to require discussion. Instead of this, he finds, as the neighboring improvement,, a sheet-iron'garage building of probably comparatively trifling expense as compared with the cost of the improvement -which he had a right to expect, and doubtless of such displeasing appearance as to quite justify the taste of the owner in placing it beside someone else’s dwelling-house instead of beside his own.

While we entirely agree, therefore, with the view of the vice-chancellor that there was in this instance a neighborhood scheme, we think he erred in his conclusion that it had been abandoned in such essential features as to justify its violation in the manner in which defendant has violated it.

■■ The other principle invoked by the defendant to justify his violation of this covenant is that by reason of other similar constructions (garages), in alleged similar locations, with reference to complainant’s remaining property, the violated covenant, in so far as it is violated, has ceased to have any beneficial value to complainant’s property, and, consequently, can form no ground for equitable relief. This principle, if applicable, would also be decisive. The foundation for equitable relief in these cases is that the first vendor, having arranged by the covenant to accept a part of the consideration for his grant in a benefit to accrue to his remaining property by the performance of the covenant, it would be unconscionable to permit the covenantor-vendee’s assignee with notice to cheat the vendor out of this portion of Ms consideration by depriving him of the benefit which he would receive by the performance of the covenant. If, however, there was no benefit, or the benefit lias ceased to exist, there is no basis for equitable intervention. Thus, in Brewer v. Marshall, 19 N. J. Eq. (4 C. E. Gr.) 537, it was held that a covenant not to dig-marl on one tract of land was not a benefit to the use of the adjoining tract (the probable purpose tp prevent competition being unlawful because in restraint of trade), and, consequently, would not be enforced in equity; and, in Trustees of Columbia College v. Thacher, 87 N. Y. 311 (followed in Page v. Murray, 46 N. J. Eq. (1 Dick.) 325, and in numerous other cases), it ivas held that “equity would refuse to enforce a covenant not to devote certain property to business purposes, where there had been such a change in the character of the neighborhood by the building of an elevated railroad and the increase of business houses, as to defeat the object and purpose of the agreement and render it inequitable to deprive such owner of the privilege of using his property as its surroundings required.” Pomeroy states this principle as follows:

'“Specific performance not being an absolute right, the fact that enforcement would be of little or no benefit to the complainant, and a burden upon- the defendant, is sufficient to constitute performance oppressive, and it will not be given.” 6 Pom. Eq. Jur. 1316.

The facts in this case, however, fall very far short of bringing it within the operation of this doctrine. It is quite true that complainant, whose interest (aside from what should be her natural desire to- protect the purchasers of her ground in a general scheme of improvements upon which she had induced them to rely) is in the value of the mansion-house property directly opposite the lot in question, and in which she lives, and in the value of her other unsold lots, has permitted the erection of garages upon the rear of the Jots and bade of the dwelling-houses which front toward her property on South Tenth street, and having done so, it would be difficult to see what possible benefit she could have in preventing the defendant from constructing his garage on the rear of his lot and behind a dwelling-house built thereon in conformity with the dwelling-house restrictions. But this, so far as her property is concerned, situate as it is, is a very different proposition from substituting the probably unsightly outhouse garage instead of and in the exact location of a dwelling-house to cost' at least $5,000, for which she stipulated. Her benefit which is invaded by what defendant has done not only equals, but is even greater than that of the neighboring lot owners, because if defendant may lawfully do what he has done, it can only be because both the dwelling-house general scheme and the dwelling-house individual covenants have become inoperative, and in that case all the other dwellings constructed on the east side of South Tenth street may be turned-into factories, or built out to the street line in the shape of stores, and the entire residential character of the neighborhood which, by reason of her larger remaining interests, is obviously more valuable to complainant than to anyone else, may be completely destined.

The suggestion has also been made that because complainant is using as a garage a stable which existed on the mansion-house property before any of the lots in the entire tract were laid out' and sold, she is not in a position to ask relief in a court of equity against the construction of defendant’s garage. We cannot see the relevancy of this suggestion. This building was in existence at the time complainant sold defendant’s lot, and, consequently, at the time the covenant in question was entered into. There Avas no reciprocal covenant either for the removal of this building, or to regulate its use, and its use as a garage does not seem in any Avay to affect either the beneficial result to the complainant of the performance of the covenant in question in particular, or the integrity and beneficial effect of the neighborhood scheme as established by the covenants in general.

Eor the reasons above stated the decree of the court of chancery is reversed and the case is remanded to that court in order that a decree may be entered in accordance Avith the opinion herein expressed.

For affirmance-,—Hone.

For reversal—The Chief-Justice, Garrison, Savayze, Teenchakd, Parker, Bergen, Voorhees, Kalisch, Bogert, Yredenburgh, Yroom, Congdon, White, Treacy—14.


author: Per Curiam.

text:
    James S. Cochran, appellant, v. Robert B. Ludy et al., respondents.
    [Argued March 5th, 1912.
    Decided June 20th, 1912.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning.

      Mr. S. Slanger Iszard, for the appellant.

      Messrs. Thompson £ Smathers, for the respondents.
   Per Curiam.

The decree appealed from will be affirmed for the reasons stated in the opinion filed in the court below by Vice-Chancellor Learning.

For affirmance—The Chief-Justice, Garrison, Swayze, Trenci-iard, Parker, Bergen, Voori-iees, Minturn, Kalisoh, Bogtsrt, Veedenbubgii, Vroom, Congdon, White, Treaoy—15.

For reversal—None.


text:
    Mary A. Maguire, appellant, v. Edward T. Maguire et al., respondents.
    [Argued March 6th, 1912.
    Decided June 20th, 1912.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Learning.

      Mr. TJlysses G-. Sfyron and Mr. Edward A. Armstrong, for the appellant.

      Messrs. Thompson •& Smothers, for the respondents.
   Per Curiam.

The decree appealed from will be affirmed for the reasons stated in the opinion filed in the court below by Vice-Chancellor Learning.

For affirmance—The Chiee-Justioe, Garrison, Swayze, Trenchard, Parker, Bergen, Voorhees, Minturn, Kaliscit, Bogert, Vredenburgi-i, Vroom, Congdon, White, Treaoy—15.

For reversal—None.


author: Per Curiam:.

text:
    Dorothea Nagle, respondent, v. Harry Conard et al., appellants.
    [Argued March 7th, 1912.
    Decided June 20th, 1912.]
    ■ On appeal from a decree of the court of chancery advised by Vice-Chancellor Howell, whose opinion is reported in 79 N. J. Eq. (9 Buch.) 124.

      Mr. Thomas Brown, for the respondent.

      Mr. Adrian Lyon and Mr. Merritt Lane, for the appellants.
   Per Curiam:.

The decree appealed from will be affirmed for the reasons stated in the opinion filed in the court below by Vice-Chancellor Howell.

For affirmance—The Chibe-Justice, Garrison, Swayze, Trenchard, Parker, Bergen, Voorhees, Minturn, Kalisch, Bogert, Vredenburgh, Vroom, Congdon, White, Treacy—15.

For reversal—Eone.


text:
    Dorothea Nagle, respondent, v. Harry Conard et al., appellants.
    [Argued March 7th, 1912.
    Decided June 20th, 1912.]
    On appeal from -a decree of the court of chancery advised by Yiee-Chaneellor Howell, whose opinion is reported in 79 N. J. Eq. (9 Buch.) 124.

      Mr. Frank J. Iliggins, Mr. Thomas Brown and Messrs. Woodbridge & March> for the respondent.

      Mr. Adrian Lyon, for the appellants.
   Per Curiam.

The decree appealed from will be affirmed for the reasons stated in the opinion filed in the court below by Yice-Chancellor Howell.

' For affirmance—The Ci-iiee-Justice, Garrison, Swayze, Trenchard, Parker, Bergen, Voorhees, Minturn, Kalisoh, Bogert, Ykedenburgei, Vroom, Congdon, White, Treacy—15.

For reversal—Hone.


text:
    Emanuel Gerli et al., appellants, v. New Jersey Silk Company, respondent.
    [Argued March 13th, 1912.
    Decided June 20th, 1912.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevenson.

      Messrs. Garrick & Wortendyke, for the appellants.

      Messrs. McDermott & Enright, for the respondent.
   Per Curiam.

The decree appealed from will be affirmed for the reasons stated in the opinion filed in the court below by Vice-Chancellor Stevenson.

For affirmance—Ti-ie Chief-Justice, Garrison, Swayze, Trenoi-iard, Parker, Bergen, Voorhees, Minturn, Kalisch, Bogert, Vredenburgh, Vroom, Congdon, White, Treacy—15.

For reversal—None.


text:
    Emanuel Gerli et al., respondents, v. New Jersey Silk Company, appellant.
    [Argued March 13th, 1912.
    Decided June 20th, 1912.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevenson.

      Messrs. GWrick & Wortendyhe, for the respondents.

      Messrs. McDermott & Enright, for the appellant.
   Per Curiam.

The decree appealed from will be affirmed for the reasons stated in the opinion filed in the court below by Vice-Chancellor Stevenson.

For affirmance—The Chiee-Justice, Garrison, Swayze, Trenchaed, Parker, Bergen, Voorhees, Minturn, Kalisoh, Bogert, Vredenburgh, Vroom, Congdon, White, Treaoy—15.


text:
    Arthur A. Zimmerman, respondent, v. Grace Zimmerman, appellant.
    [Argued March 15th, 1912.
    Decided June 20th, 1912.]
    O’n appeal from a- decree of the court of chancery advised by Vice-Chancellor Emery.

      Mr. Charles E. Cook, for.the respondent.

      Mr. Arthur Lovell, for the appellant.
   Per Curiam.

The decree appealed from will be affirmed for the reasons stated in the opinion filed in tlie court below by Vice-Chancellor Emery.

For affirmance—The Chiee-Justice, Garrison, Swayze, Trenoiiaed, Parker, Bergen, Vooritees, Minturn, Kadisch, BoGERT, VfiEDENBURGH, VROOM, CONGDON, WHITE, TrEACY—15.

For reversal—None.


author: Per Curiam

text:
    Lee R. Johns, appellant, v. Harriet E. Johns, respondent.
    [Submitted March 25th, 1912.
    Decided June 20th, 1912.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Walker.

      Mr. Frank B. Bradner, for the appellant.

      Mr. Frederick F. Guild, for the respondent.
   Per Curiam

■ The decree appealed from will be affirmed for the reasons stated in the opinion filed in the court below by Vice-Chancellor Walker.

For affirmance—Ti-ie’ Ci-itee-Justioe, Garrison, Swayze, Trenoi-iard, Parker, Bergen, Voori-iebs, Minturn, KalischI Bogert, Yredbnburgh, Vroóm, Congdon, White, Treaoy—15

For reversal—None.


text:
    The Oscar Barnett Foundry Company, respondent, v. Paul L. Crowe, appellant.
    [Submitted March 25th, 1912.
    Decided June 20th, 1912.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Iiowell, whose opinion is reported ante p.

      Messrs. Lum, Tamblyn & Golyer, for the respondent.

      Mr. Boyd McLean, for the appellant.
   Per Curiam.

The decree appealed from will be affirmed'for the reasons stated in the opinion filed in the court below by Vice-Chancellor Howell.

For affirmance—The Chancellor, Garrison, Swayze, Trenci-iard, Mint urn, ICalisch, Vroom, Congdon, White —9.

For reversal—The Chief-Justice, Parker, Bergen, Voori-iees,.Bogert, Vredenbukgh, Treacy—1.


text:
    Hamlet Poole, respondent, v. Supreme Circle Brotherhood of America, appellant.
    [Submitted March 25th, 1912.
    Decided June 20th, 1912.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Walker.

      Mr. Frank S. Katzenbach, Jr., for the respondent.

      Mr. John F. Earned, for the appellant.
   Per Curiam.

The decree appealed from will be affirmed for the reasons stated in the opinion filed in the court below by Vice-Chancellor Walker.

For affirmance—The Chiee-Justice, Garrison, Swayze, Trenohard, Parker, Bergen, Voorhees, Minturn, Kalisch, Bogert, Vredenburgh, Vroom, Congdon, White, Treacy—15.

For reversal—Hone.