text:
    Waterworks Equipment Company, complainant, v. Patrick McGovern and Mayor and Aldermen of Jersey City, defendants.
    [Submitted August 4th, 1924.
    Decided October 9th, 1924.]
    1. In a suit to enforce a municipal lien claim under the act of 1018, page 1041, a counter-claim is not a proper pleading although tlie subject-matter may be proper in the answer.
    2. Prior to the Chancery act of 1915, page 184, the court of chancery could not entertain claims for unliquidated damages in determining the amount of the lien; where such claims arise, the fund was retained in court, and the cause allowed to stand over until the damages arising from a breach of the contract were assessed in a court of law. Since the act of 1915, supra, section 8, provides that if a jury trial is required it may be ordered but shall be deemed to be waived unless demanded in the pleadings. Under the Lien act of 1918, supra, section 9, where it is made to appear that any of the parties has a valid defense at law which cannot be set up in equity, the court will stay the proceedings/ until the determination of the suit at law. Held, that under the foregoing acts the party desiring the suit stayed must take the affirmative in asking for a reference to the court of law for trial.

      3. Where the city desired to duplicate its existing- seventy-two-inch water main and connect the two pipes with cross-overs so that the water might be flowed from one pipe to the other with dry connections, i. e., while both pipes! were empty, and after the laying of the new pipe, agreed with the contractor to change the cross-over that there would be a dry connection on the new pipe and a wet connection on the old, i. e., that the same should be made with the water flowing through the pipe, and the contractor agreed with complainant to furnish and put on sleeves to support the valves and cut the opening in the old pipe, the contractor’s duty being to attach the valves to these sleeves, insert the cross-overs with leaded joints to make them flexible and connect the same with the valves on the dry connection on the new pipe and connect the valves to the new pipe. No defect was shown in the workmanship or materials done and furnished by the complainant. After the whole work of making the wet and dry connections was completed, and while the water was flowing in both pipes, one of the five sleeves broke above the valve, rendering it necessary to replace the valve with a dry connection. Various theories were advanced to account for the break, one of which seems plausible, in that the new pipe sagged, putting a weight upon the sleeve that it was not intended to bear, and the sleeve broke because the lead joints in the cross-over were not sufficiently flexible. Held, that the burden of proof being on the contractor to show that the complainant’s work was defective, tha1- failing in this the decree should be for complainant.
    4. AATiere a party by his own contract creates a duty or charge upon himself, he is bound to make it good if he may, notwithstanding any accident by inevitable necessity, because he might have provided against it by his contract, and if any casualty shall occur which shall increase the labors and expenditures of the' contractor, the loss must fall on him who engages to do the work.
    5. Evidence examined and held, that the contractor cannot recover from the city the amount of the expenditures by bun which were made necessary by the break in work which he had contracted with the city to do.
    0. After the break, os the old water main was out of commission for a time, the city was compelled to buy water and was put to other expense—'Held, the damage it thus sustained, it may deduct from the balance due the contractor.
    On bill, &c.

      Mr. Aaron A. Melniher, for the complainant.

      Messrs. Treacy & Milton, for the defendant McGovern.

      Mr. Thomas J. Brogan, for the defendant Jersey City,
   Griffin, V. C.

The bill in this cause is filed under an act of the legislature of the State of New Jersey entitled “An act to secure the payment to laborers, mechanics, merchants, traders and persons employed upon or furnishing materials towards the performance of any work in cities, towns, townships and other municipalities of this state (Revision of 1918), and supplements. thereto and amendments thereof.”

The pleadings consist of a bill and answer, as well as counter-claim filed by the city of Jersey City against McGovern, its contractor, for damages, and by McGovern against the complainant for damages. A counter-claim is not a proper pleading in this suit, although the subject-matter is proper in the answer. Norton v. Sinkhon, 63 N. J. Eq. 313, 320. In the answer of Jersey City the same matter is set out as in the counter-claim. To some extent the answer of the defendant McGovern sets out substantially the same matter set out in the counter-claim. If the defendants deem it necessary they may amend their answers, in view of the fact that the counter-claims will be stricken out. These answers, in addition to. answering the bill, set up claims for unliquidated damages, as will appear from the statement of facts following.

Prior to the Chancery act of 1915 (P. L. p. 184 ) the court could not entertain these claims for unliquidated damages (Norton v. Sinkhorn, supra), the court there saying that “the fund should be retained in the court of chancery and the cause allowed to- stand over until the defendants shall have their damages arising from the breach of contract by the complainant set out in the answer assessed in a court of law, within such time and in such manner as the court of chancery may direct.” By the act of 1915, page 186, section 8, it is provided as follows:

“Jury trial. If any question ordinarily determinable at law and requiring a jury trial arise in a suit of which the court of chancery has jurisdiction, a jury trial, if required, may be ordered, but shall be deemed to be'waived unless demanded in the pleadings. In case of such demand, if the issue be one requiring a jury trial, the court will send such issue of fact to a court of law for trial, according to the existing practice.”

Under the Lien act of 1918, page 1041, section 9, provision is substantially made for staying the suit until the determination of a suit at law, where it is made to appear by the contractor, subcontractor, municipality or other defendant that such party has a valid defense at law which cannot be set up in defense in a court of equity.

Under both of the foregoing acts it appears that the party • desiring the suit stayed must take the affirmative in asking for a reference to a court of law for trial.

In Renwick v. Hay, 90 N. J. Eq. 148, 157, Vice-Chancellor Lane construed section 8, as well as sections 7 and 9, of the Chancery act of 1915; and in Shaw v. Beaumont Co., 88 N. J. Eq. 333, Mr. Justice Black, after saying that the court of chancery cannot retain jurisdiction for the purpose of granting a purely legal remedy, or to try a claim for unliquidated damages, said: “The bill of complaint in this suit was filed April 22d, 1915. The present Chancery act (P. L. 1915 p. 184 pl. S) by which a jury trial shall be deemed to be waived, unless demanded in the pleadings, does not apply to this case.” Ibid. pl. 12. The act of 1915 went into effect July 4th, 1915. In the present case no demand was made in the pleadings for a jury trial under the Chancery act of 1915; nor was it made to appear to the court, as required by section 9 of the Lien act, that any party had a valid defense at law which could not be set up in equity; and, in fact, all the parties desired that all of the issues in this cause be determined in this court.

The facts are as follows: The city of Jersey City, having a single seventy-two-inch pipe line for supplying Jersey City with water, and desiring to duplicate the same, on the 19th of August, 1919, entered into a contract with the defendant Patrick McGovern to construct the' same for a sum in excess of $2,000,000. It was contemplated by the parties to connect the new and old water mains with “cross-overs” so that the water could be flowed from one pipe to the other. The crossover so contemplated was to be what is termed a “dry connection,” which could only be made when there was no water in either pipe. The method of construction was to bore a sixteen-incli hole in each pipe and place over the opening thus made what is called a “hat,” which, at the point of contact with the pipe, conformed to- its shape, and is riveted thereto', forming a tight joint. To these “hats” are attached valves. Connecting these valves is a “cross-over,” the ends of which being inserted in the valves, the joints are leaded for two purposes—one, to malee them tight, and the other, to form a flexible joint so that if either pipe.should sag the lead joint would yield. During the course of construction, by reason of the shortage of water in Jersey City, the city determined that it would put in, on the old pipe (which was then tilled with water), what is called a “wet connection,” in order that the supply of water during the operation would not be cut off. This wet connection is made in the following manner: A sleeve is placed around the pipe, the ends of which are riveted to the valve. In order to cut the opening in the pipe a tapping machine is inserted into' the valve and brought in contact with the side of the pipe. There is a pilot drill in the centre which first bores through the pipe, and the cutter is then brought in contact with the pipe and revolves until it has cut the opening in the pipe. It is. then withdrawn, carrying with it the circular piece of pipe; the valve closes, and there is then inserted in the valve the crossover connecting with the valve on the other pipe.

In order to make this change the city, on the advice of Clyde Potts, the engineer in charge, on February 3d, 1921, passed the following resolution:

“Whereas, It appears from a communication addressed to the board by the director of the department of streets and public improvements, dated February 1st, 1921, that certain changes in the contract between the city and Patrick McGovern are necessary and advisable, which changes are as follows:
“Extra Work Order ‘L.’
“The furnishing and delivering on the ground of five complete 72" x 16" split tees and tapping valves; the use of the tapping machine, five valves, and the tapping sleeves, together with the services of a superintendent operating the machine; the furnishing of all lead and labor necessary for the caulking of sleeves in place, and also labor to assist the superintendent in making the cuts, and the doing of all work incident to the making of such connections in good, workmanlike manner, The cost of the above not ;o exceed the sum of nine thousand dollars ($9,000,00).
“All work shall be done in strict accordance with the directions of the engineer in charge, and subject to his apprpoval, and payment for the same will be made in accordance with section M of said contract.
“Now, therefore, he it resolved, That the contract be and the same is hereby changed and amended accordingly, and the contractor be and he is hereby authorized to proceed to make such changes;
“Further resolved, That a certified copy of this resolution be signed by the contractor and -filed with the city clerk as evidence of its assent thereto.”

This resolution and its acceptance form the contract between the city and the defendant McGovern as extra work under the main contract.

The defendant McGovern apparently was not equipped to install wet connections, and, after several communications and conferences, entered into' a contract with the complainant, which is contained in a letter from McGovern to the complainant, dated March lGth, 1921, a copy of which is as follows:

“March 16th, 1921.
Water Works Equipment Co.,
50 Church street,
New York City.
Gentlemen:
Attention Mr. Van Winkle.
Confirming telephone conversation of even date, kindly enter my order as follows:
Five (5) seventy-two (72") inch by sixteen (16") inch connections, consisting of tapping sleeves and valves for use on steel riveted pipe; use of tapping machine to make the five (5) sixteen (16") connections to seventy-two (72") inch steel main and the services of a man to superintend the operation of the tapping machine when connections are being made.
All for the sum of $1,400.00 per connection, F. O. B. cars, Jersey City
Total seven thousand ($7,000.00) dollars.
The materials furnished to be acceptable to the legally constituted authorities of the city of Jersey City or their representatives.
Payment will be made you in full on acceptance and payment being made to me by the city of Jersey City or partial payment made to you on receipt of any partial payment made to me by the city of Jersey City.
I understand you will commence work immediately on this order.
Please sign and return the enclosed copy of this letter for my files.
Yours truly,
Patrick McGovern.
Accepted:
Water Works Equipment Company,
By Walter H. Yan Winkle.
H. W.
CC: M. O.
cc: C. P.”

The complainant had the first of these sleeves made, which sleeve was tested and approved by Mr. Potts before the remaining four were either manufactured or shipped. This first sleeve (being the most westerly one) is the sleeve that broke. It was installed June 15th, 1921, and the last one of the other four was installed July 25th, 1921.

The work to be done by the complainant under his contract with McGovern was substantially to install these sleeves and cut the openings. The work to be done by McGovern consisted in attaching the valves to the sleeves, inserting the cross-overs, with leaded joints, in these valves, and connecting them with the “hats” riveted to the empty pipe. When the connection was completed the water flowed from the old pipe into the new through these cross-overs, and was so flowing for a week, when, on September 5th, 1921 (forty-two days after the work on the last wet valve was completed and eighty-two. days after work on the first sleeve was completéd), the first sleeve installed broke at a point slightly above the top of the valve, allowing the water to escape in large quantities, which flow continued until the following Saturday, when the water then being removed from old pipe, McGovern replaced the sleeve with the “hat” connection. Thus, both pipes had one dry connection, as originally contemplated. This work cost McGovern upwards of $1,800, and the city of Jersey City rendered to McGovern a hill for upwards of $4,200 for water purchased and labor expense.

McGovern concedes that, if the city prevails, it has the right to deduct its ascertained damages from the amount clue from the city to him, hut both the complainant and McGovern contend that neither is liable to the city, and that the city must suffer the loss and pay the balance due the contractor, including the sum paid for repairing the break. But, as between themselves, McGovern insists that if he is held liable the loss must fall on the complainant because of the break.

As between McGovern and the complainant, the complainant was to furnish the five connections, the tapping sleeves, &c., and the services of a man to superintend the operation of the tapping machine when the connections were made. The materials so furnished were to be acceptable to the city or its representatives. Mr. Potts was the representative of the city, and accepted the complainant’s work after inspection. The contract between McGovern and the complainant was not tied up to the contract between McGovern and Jersey City—it was independent of the latter contract.

There is no clear and positive evidence as to the cause-of the break; it is left wholly to conjecture. The testimony of the experts is to the effect that the greatest strain on this sleeve is while the tapping machine is in the valve cutting the opening; that this strain was greater during this tapping process than after the connections were made to' the other pipe -with the water flowing through the same. The valve weighs upwards of four hundred pounds, and the tapping machine likewise weighs upwards of four hundred pounds; thus there was over eight hundred pounds weight on this sleeve during the period of tapping. This sleeve, according to the testimony, is capable of carrying ten times the weight of this valve. Eor eightv-two days after this first valve was completed the sleeve bore the pressure of the water on the valve—thirty-five pounds per square inch—and it was also in use for a week before the break, under service conditions. After the break the broken portion of the sleeve was under water for about a week, during which interval the face of the break became somewhat discolored, but, the witnesses say, not to such an extent as that a visual inspection would disclose a defect in the metal, if any such there was; that their examination of the sleeve showed that there was no defect in the metal. The testimony of the experts makes it perfectly clear that the sleeves were of a size amply sufficient for the purpose, and, in fact, that the same sized sleeves were used to support valves where the pressure of water was four or five times as great.

From the testimony I find that the sleeves were suitable and proper for the purpose, and that it has not been proven that the workmanship or metal in the sleeve were defective.

Other theories are suggested as to the cause of the break. •The complainant’s witnesses say that they believe that the break was caused by the sagging of the new pipe; that the lead joints in the cross-overs were rigid and not sufficiently ■flexible to take up the sagging; that this put a great weight on the sleeve, which it was not intended to carry, and the sleeve broke; and the fact that the break was, as above indicated, in the upper part of the sleeve, justifies this inference. But McGovern asks why, if this sleeve broke, did not the other four sleeves, or some of them, break? The answer to this is that the lead joints at those points may have been flexible and yielded sufficiently to the sagging so as not to put pressure' on the sleeves. And I think that all—certainly, most of tire witnesses—agree that if this sagging happened, it was sufficient to cause the break unless the lead'joints yielded.

To account for this sagging, some of the witnesses say that the foundation under the new pipe was not- sufficiently firm to support" the weight placed upon it 'when the water was turned into the pipe, and it appears that, since the 'break, the pipe at this point is supported by a saddle of concrete.

If the contract with the complainant had been to install both the -wet and dry connections and do all the1' work, it would be in a different position. ITere the complainant did the work in a good and workmanlike manner, from all that appears in the case, and the work stood up under conditions which, if the sleeve was defective, a break would have occurred before McGovern put in Ms cross-over. The burden of proof is on McGovern to show that the work of complainant was defective. This he has not sustained. After McGovern completed the repairs occasioned by the break the city accepted the work and paid him $8,485 on September 13th, 3921; thus the amount due to complainant fell due and payable. A decree, therefore, will be advised in favor of the complainant.

Turning to the controversy between McGovern and the city of Jersey City, McGovern entered into a contract on the 19th of August, 1919, for the construction of a pipe line in the city of Jersey City. Annexed to the contract are instructions to bidders. Under section H all bidders for work are required, before submitting bids, to examine the site of the work and the adjacent premises, and the various means of approach to the site1, and make all necessary investigation in order to inform themselves thoroughly as to the char aeter and magnitude of all work involved in the; complete execution of the contract, “and no plea of ignorance of conditions that exist, or that may hereafter exist, or of difficulties that will he encountered in the execution of the work hereunder, as a result of failure to make necessary examinations and investigations, will be accepted as sufficient excuse for any failure or omission on the part of the contractor to fulfill every detail of the requirements of this contract, or will be accepted as a basis for any claims whatsoever for extra compensation.” In his proposal, McGovern states “undersigned also declares that he has examined and fully understands the attached ‘Instructions to Bidders/ the form of contract specifications and this form of proposal and the drawings referred to herein;” and that he “hereby proposes to furnish all the seventy-two-inch steel water pipe and appurtenances required, and all labor, machinery, tools, materials and incidentals necessary to furnish, install and complete the pipe line for Jersey City in accordance with the prices named in this proposal, at his own proper cost and expense, and in a. first-class manner and in accordance with the advertisements, plans, specifications and foregoing ‘Instructions to Bidders/ all of which are part of the contract hereto annexed, to such an extent as they relate to or govern the obligations herein proposed to be assumed, and in accordance with such detailed directions and plans, showing approximately the extent and character of the contract; also sudh drawings or instructions as may be furnished from time to time during the progress of the construction of the. work by the' engineer acting for the board of commissioners, or the board of commissioners.” In the contract, McGovern, as party of the first part, “does, for himself and his executors' or assigns, covenant, promise and agree to and with the said mayor and aldermen of Jersey City, Few Jersey, its successors and assigns, party of the first part, that they, the party of the second part, their heirs, executors, administrators and assigns, shall and will furnish all the seventy-two-inch steel water pipe and appurtenances required, and all labor, machinery, tools, materials and incidentals necessary to furnish and complete the pipe line for Jersey City as appears in the body of this contract under the head of ‘Items’ at their own proper cost and expense, in a first-class, workmanlike manner and according to- the best of his ability, and in accordance with the general specifications and conditions herein contained and made part of this agreement, and in accordance with such detailed directions, plans, drawing and instructions as may be furnished and given by the director acting for the board of commissioners, or their engineer, during the progress of the construction of the work, which directions, plans, drawings and instructions are hereby made part of this agreement.”

The items comprised in the bid and contract are- thirty-seven in number, totaling, in price, upwards of $2,000,000. In section 39 it is provided that “all other work not enumerated in this schedule, but required by order of the board of commissioners, shall be considered as extra work. All extra work will be estimated by the engineer and paid for in accordance with section M of this contract. Section D provides that the board may make changes in the plans, and if the changes render work necessary which is of a. class not included in the schedule of prices, the same shall be paid for as extra work.” Section M provides that “the contractor shall do all extra work in connection with this contract as the board of commissioners may direct in writing. It shall be clone in first-class, workmanlike manner, and under the same requirements as other work contemplated in this contract; and the contractor agrees to accept as full compensation for such extra work the reasonable cost of the work as determined by the engineer, plus fifteen per cent, of such cost.” Then follows an elimination from the cost of certain items of expense of the contractor.

Under the head “Responsibility of Contractor’, section P,” it is provided that “the contractor, party of the second part, further agrees to be responsible for the entire work embraced in this contract until its completion and final acceptance, and that ány unfaithful or imperfect work, or work that may become damaged from any cause, either by act of commission or omission to properly guard and protect the work that may be discovered at any time before-the completion and ac eeptanee, shall, be removed and replaced by good and satisfactory work, without charge, immediately on the requirement of the engineer, notwithstanding it may have been overlooked by the proper inspector and have been estimated upon. It is fully understood by the contractor that the inspection of the work shall not relieve him of any obligation to do sound and reliable work as herein provided; and that any omission to disapprove of any work by the engineer at or before the time of the monthly estimate, or other estimate, shall not be construed to be an acceptance of any defective work.”

Under the head “Final Estimate,” the contract reads as follows:

“Two months after the time of completion and acceptance of the work as specified and contracted for the board will cause its engineer to make a final estimate of all the work done, and the full amount of said final estimate will be paid, less any amounts retained to complete the work, according to the provisions of the accompanying specifications, and less damage or money paid by the city by reason of said contractor having failed to carry out completely and faithfully all the obligations and requirements herein contained. Upon final settlement according to the conditions herein specified, and not until such settlement shall have been made, will the contractor be relieved from the obligation assumed in the contract.”

This is an entire contract providing for the doing of all work and furnishing of all materials necessary to complete the pipe line. The case, as to the main contract, comes within the rule laid down in School Trustees of Trenton v. Bennett, 27 N. J. Law 513. In that case Mr. Justice Whelpley, speaking for the supreme court, said (at p. 517) : “No rule of law is more firmly established by a long train of decisions than this—that where a party, by his own contract, creates a duty or charge upon himself, he is bound to make it good, if he may, notwithstanding any accident by inevitable necessity, because he might have provided against it by his contract.” The court further said: “If a party, for a sufficient consideration, agrees to erect and complete a building upon a particular spot, and find all the materials and do all the labor, he must erect and complete it because he has agreed to do so.” There, while the contractor was erecting the building in a good and workmanlike manner, the building fell by reason of some latent defect in the soil. The contractor was held liable. This ease has been approved in a great number of cases, which may be found cited in Shep. N. J. Citations.

In Boyle v. Agawam Canal Co., 22 Pick. 381, the plaintiff made a contract with the defendant for excavations and embankments to he paid for at twenty cents for each cubic yard of excavation and like sum for each cubic yard of embankment. An, unusual freshet occurred which increased the cost -to the contractor. Eor this increased cost he sued the canal company as for extra, work. The court said that “the contract must be considered as a contract to pay for so< many cubic yards of embankment, as the same, when finished, would measure, and to pay for so many cubic yards of excavation as would be required to make the canal as stipulated, calculating upón the amount of each to be removed in the state of things as they were at the date of the contract,” and held that the increased cost was not chargeable against the defendant. The court stated: “The general rule undoubtedly is that in the case of contracts for the construction of an entire work at a stipulated sum to1 be paid for the same, if any casualty shall occur, which shall increase the labors and expenditures of the contractors, the loss must fall on him who engages to- do- the work.”

In Horgan v. Mayor, &c., of City of New York, 160 N. Y. 516; 55 N. E. Rep. 204, the plaintiff made a contract with the city of New York to- provide all the necessary materials and labor, and excavate-, remove and dispose o-f all silt, sediment and other materials deposited in the bottom o-f the pond near Fifty-ninth street and Fifth and Sixth avenues, and to construct a concrete bottom over the same. The area of the pond was about six acres, filled with water, which water could be drained from a circular gate, twenty inches in diameter, resting upon the bottom, the water flowing therefrom into an outlet pipe and from thence into- a sewer. When the water was drained down to a depth of fourteen inches the outlet pipe ceased to work; it was then discovered that the sewer was so- obstructed that, unless the- same was cleared out, no further water could be drawn from the pond. The engineer insisted that the plaintiff should pump the water out. The plaintiff denied that this was part of his contract, but, on the insistence of tile engineer, pumped out the- pond, and then sued for damages. The contract was quite similar to the one in the present case. The court said that “it would be a strange and unjust construction to require the plaintiff, under the provisions, to remove, if necessary, the entire body of the pond. This latter work is a subject o-n which the minds of the parties could not have met, and the plaintiff, in his estimate, did not consider that he was called upon to pump out this great body of water lying upon an area of six acres. It was proper for plaintiff to assume that the water of the lake could be discharged into the sewer through the outlet the city had constructed for that purpose.” The city urged that, under subdivision 33 of the specifications, which provided that “all loss or damage arising out of the nature of the work to be- done under this contract, or from any unforeseen obstructions or difficulties which may be encountered in the prosecution of the same, or from the action of the elements, or from encumbrances on the line of the work, or from any act or omission on the part of the contractor, or any person or agent employed by him not authorized by this agreement, shall be sustained by said contractor,” the city was not liable. The court said: “When this provision is reasonably construed, it does not operate against the plaintiff as contended. It must be held to apply to the work to be done and the unforeseen obstructions or difficulties which may be encountered under the agreement. The unforeseen obstruction that was encountered, and that subjected this plaintiff to a large amount of extra work, was entirely outside of the contract, and stands unaffected by this provision.”

The above case is not in conflict with the views herein expressed; because here the thing which caused the damage was entirely within the line of the work and within the terms of the contract.

The contract in the present case does not provide against contingencies. Here McGovern agreed to furnish the materials and complete the pipe line and appurtenances on lines shown on the plans. If the cross-overs were constructed as dry connections, as originally planned, McGovern could hardly contend that he would not be liable, but, because the city changed the plans so as to put wet connections on one pipe and dry on the other, he claims that he is not responsible, because he did not guarantee the result of a change from a wet to a dry connection—that the change was made at ■the instance of the city, and that it should bear the full responsibility for the result. I cannot accede to this conten tion. There was. no defect in the plans for the wet connection. Wet connections were srdtable and proper for the; pur.pose, and are in common use.

A decree will be advised that the city be allowed to deduct from the contract price of McGovern the damage which it sustained by reason of the break.

The city has presented a. bill for damages for work and labor, and also for water purchased. These questions have not been argued. If the parties are content with taking the figures proven by the city, without argument, the sums so proven will be the amount deducted.

The parties have deemed it unnecessary to prove the amount of moneys in the hands of the city, because all agree that it is ample to satisfy the claim of the complainant after deducting any sum chargeable against McGovern.


source: Caselaw Access Project

author: Foster, V. C.

license: Public Domain

text:
    Thomas T. Barr, Jr., executor, &c., of Laura E. Steele, deceased, complainant, v. Louis P. Booz, Jr., and Peter Rasmussin, defendants.
    [Submitted July 15th, 1924.
    Decided July 19th, 1924.]
    1. Where no express power to sell lands is given in a will to an .executor, such power will not arise by implication unless the implication is clear from the terms of the entire will, and it must be found that some duty has been imposed upon the executor which necessarily carries with it a power of sale in order to enable him to perform the duty.
    2. Where a will directed an executor to use principal or income for the support, maintenance and education of the testator’s niece, and there was no income or principal in the estate to be used for such purposes, the entire estate being real estate, a power of sale in the executor of the real estate is necessarily implied.
    On bill, &C.

      Mr. Wesley Benner, for the complainant.

      Mr. Thomas L. Hanson, for the defendants.
   Foster, V. C.

This is a suit for the specific performance of a contract which the parties made for the sale and purchase of certain real estate on High street, in Perth Amboy, of which complainant’s testatrix died seized on August 3d, 1922.

The case has been submitted on the pleadings and an agreed state of facts, and from these it appears that the only question in controversy is the right and authority of complainant, as executor and trustee, to make a valid sale and conveyance of decedent’s real estate.

It is admitted that decedent died testate, seized of the premises in question, which constitutes her' entire estate; that these lands are subject to mortgages amounting to $5,000; that the premises are unrented and unoccupied; that the estate has no income from which the interest; taxes and other fixed charges can be paid.

It is further admitted that the will has been admitted to probate and that complainant has duly qualified and is acting as the executor of and trustee under it, and that as such he made the contract in question with the defendants.

Defendants refuse to- perform the contract, claiming that complainant, under the will, is without the power and authority, express or implied, to sell testator’s lands and to give- a good title thereto.

The will first directs the payment of the debts and funeral expenses of tlie testatrix, and it then reads:

“Third. I give, devise, bequeath and appoint all the property and estate, ■ real and personal, ol whatsoever nature and wheresoever situate, of which I may die seized' or possessed or to which I shall then be entitled or over which I shall (hen have any power of appointment, unto my trustee hereinafter named, in trust nevertheless, to apply the income, together with so much of the principal thereof as my said trustee shall in his uncontrolled discretion see fit, for the support, maintenance and education of my beloved niece, Eleanor Steele, of the Oily, County and- State of New York, until my said niece shall reach the age of twenty-one years, and at that time to pay the remaining principal and income of my said estate to my said niece, her heirs, executors, administrators and assigns, to be here absolutely and forever.”

By the fourth item of the will, complainant is appointed executor and trustee without bond or other securitj1'.

It will be noted that by the third clause of the will the entire estate, after the1 payment of debts and funeral expenses, is bequeathed and devised to the trustee; that the trustee is therein directed, in the performance of his trust, to perform certain specific duties, • viz.: He is to apply the income, from the estate bequeathed and devised to- him, together with so much of the principal as he sees fit “in his uncontrolled discretion,” to the support, maintenance and education of the niece of testatrix, until she reaches the age of twenty-one years, and at that time he is to pay to her the remaining principal and income of the estate.

In the present condition of the estate there is neither income nor principal which the trustee can use, or apply, as the testatrix has directed. It may be that the premises can be rented and sufficient income be obtained thereform, not only to pay the interest, taxes and other fixed charges, but also to support, maintain and educate testatrix’s niece; but if the income should not be sufficient for all of these purposes, then, in the absence of a sale of the real estate, there is no principal of the estate to which the trustee can resort, as testatrix has directed, and which may be used and applied by him, in connection with this possible net income, to the support, maintenance and education of testatrix’s niece.

To obtain the pxxincipal of the estate for such purposes, the real estate must be sold, as there is no other property in the estate.

If the real estate is not sold to produce a principal of the estate to which the trustee may resort, and if the net income proves insufficient, as it is admitted it will, to support and educate testatrix’s niece, then the intentions and purpose-of the testatrix as expressed in her will must be defeated.

To avoid the result, and to give effect to the intention'; and directions of the testatrix as expressed in her will, there must, of necessity, be found in the will an implied power and authority to her executor and trustee to make a valid and effectxxal sale and conveyance of her lands.

Authority for finding an implied power of sale under the circumstances present in this case, is found in the rxxle stated in the controlling case of Chandler v. Thompson, 62 N. J. Eq. 723, where the court of errors and appeals held that:

“Where no express power to sell lands is. given in a will to the executor, such power will not arise by implication, unless the implication is clear from the terms of the entire will, and it must be found that some duty has been imposed by the testator upon the executor which necessarily carries with it a power of sale in order to enable him to perform the duty.” See, also, Lindley v. O’Reilly, 50 N. J. Law 649.

As such a duty has been imposed by the testatrix upon her executor and trustee, it follows that he has an implied power of sale of her lands in order to enable him to perform this duty.

A decree will therefore be advised for complainant.


text:
    Ruth Morris and Irving Morris, complainants, v. Samuel Eisner, defendant.
    [Submitted July 22d, 1924.

      Decided July 31st, 1924.]
    Where a contract for sale of land was fairly procured without fraud, misrepresentation or the suppression of any material fact, and its enforcement will work no injustice or hardship, its performance will be enforced, even though there may be a possible encroachment of a driveway ten years old, the existence of which was known to the parties at the time the contract was made.
    On bill, &c.

      Mr. Jacob Joselson, for the complainants.

      Mr. George J. 1 filler, for the defendant.
   Foster, V. C.

Complainant seeks a decree .for the specific performance of a contract by which defendant agreed to purchase the premises known as No. 161 New Brunswick avenue, in Perth Amboy.

The case has been submitted on the pleadings and a stipulation of facts, and from these it appears that the contract was originally made on January 4th, 1924, with one Harry Breslow, who assigned the contract to defendant with complainant’s consent, on 'April 2d. By the terms of a supplemental contract, made on April 2d, between complainants and defendant, an additional payment of $1,000 was made by defendant, on account of the purchase price. The date for closing and passing title was extended to May 2d, 1924, and this time was expressly made of the essence of the' contract.

On April 6th the defendant, with the consent of Mr. Morris, one of the complainants, was given the keys and locked’ up the premises and entered into possession, to the extent, at least, of renting the apartment on the second floor, and’ he collected two months’ rent from the tenant and has retained this money.

On May 2d, when the parties met to close the title, defendant refused to perform the contract and to accept the deed complainants tendered him, claiming the premises were subject to an encroachment by the adjoining property owner-on the south.

This property on the south is known as No>. 159 New Brunswick avenue; it is owned by one Frank Van Syclde,. who erected a garage and automobile salesroom building thereon, about ten years ago. In connection with the use of this building, Van Syclde built at, and in front of, the northerly end of the building, across the sidewalk on New Brunswick avenue, and at right angles to the curb line thereof,, a driveway, which is slightly sunken or depressed at the curb, for the use of himself and his patrons who use the-same daily. This driveway is clearly shown and defined on the ground, and is visible to anyone on or near the premises in question, and to anyone using the sidewalk in front of the same.

The property lines on New Brunswick avenue are not at right angles to the line of the street, and defendant’s contention is that under the contract he is entitled to have the sido lines of the property run not only to the side of the street; but under the authority of Winter v. Peterson, 24 N. J. Law 524; Salter v. Jonas, 39 N. J. Law 469, and later cases, he is entitled to have, by implication of law, the lines of the property extend to the centre line of the street, subject only to the easement of public use; and his claim is that, by reason of the existence of the Van Syclde driveway, he would be unable to- extend or prolong to the centre of the street the sidelines of the property on the same acute or obtuse angle which they bear to the lines of the street, although admittedly such extension or prolongation could be’ made, at right angles to the street lines, without any interference from the Van Syclde driveway.

Counsel have argued extensively in favor of a right angle or an obtuse angle prolongation of the side lines of the lot, but in the present situation I consider such a discussion without merit, because, for all practical purposes, defendant has, at least, two courses open to him to insure the title and full enjoyment of the property, if he cares to adopt them.

Admittedly, the Van Syclde driveway does not in any way interfere with the use and enjoyment of the property, and in its present location it never will, until the street is vacated, and the owner of the premises attempts to make use of his share of the vacated street, and to extend the side lines of his lot to that point.

It is further admitted that the Van Syclde driveway is only about ten years old, and there is therefore no prescriptive right or lawful easement for it in any way affecting the title to, or to- the enjoyment of, the premises in question; furthermore, if defendant’s contention is correct, then Van Sickle, in maintaining the driveway, is a mere trespasser, and his trespass would not constitute an encroachment nor affect the title to the property in any way, as the covenants in the contract are against paramount and lawful claims only. Ratkewicz v. Kara, 89 N. J. Eq. 203.

It is well settled that the owner of the premises in question has no special rights in the use of the street and sidewalk in front of the property that are -paramount to the rights of the public. Clausen v. DeMedina, 82 N. J. Law 491; Kennelly v. Jersey City, 57 N. J. Law 293.

The defendant is a resident of Perth Amboy; he is well acquainted with the fact, which is a matter of common knowledge, that New Brunswick avenue is a much-traveled highway. He knew of the existence of the Van Syclde driveway before he made this contract. This contract was fairly procured, without fraud, misrepresentation or the suppression of any material fact, and its enforcement will work no injustice or hardship. Plummer v. Keppler, 26 N. J. Eq. 481; Hummer v. Buerk, 90 N. J. Eq. 102.

The facts do not show this driveway to be an encroachment upon the property, and if it were, it is so unimportant, and its effect and consequences are so remote, that equity will not permit the defendant to break his contract for such an immaterial defect. Herring v. Eposito, 94 N. J. Eq. 348; Scheinman v. Bloch, 117 Atl. Rep. 389; affirmed, 119 Atl. Rep. 926.

A decree will be advised for complainants.


text:
    Frederick Faas, complainant, v. James Wallwork, defendant.
    [Submitted October 24th, 1924.
    Decided October 30th, 1924.]
    1. A man cannot by mere user of part of his property create an easement therein for benefit of the rest of his property. Such user could not be adverse.
    2. After severance of the title to property, there must be adverse, uninterrupted use for twenty years by the complainant, or those under whom he claims, to establish an easement by prescription.
    3. A mere right of way which is not apparent and continuous, and which is enjoyed at intervals, leaving no visible sign in the interim of its existence is not such an easement as will be included in and pass under the term “appurtenances” in a deed, unless the grantor uses language sufficient to create the easement de novo.

    '1. Upon severance of title, an easement for a right of way will not arise by implication unless necessary to the beneficial enjoyment of the land granted or retained.
    On bill, &c.

      Mr. 0. Bancroft Gould, for the complainant.

      Messrs. Schwartz <& Schwartz, for the defendant.
   Foster, V. C.

Complainant’s bill is filed to- establish a right of way across defendant’s lands and to- have defendant enjoined from closing or obstructing it in any way.

Complainant is the owner of a lot of land facing on Highland avenue, a public street, in Montclair, and his lot is about eighty-five feet from Claremont avenue, another public street. The bill alleges that complainant is entitled to a right of way to- and from his property to Claremont avenue over the adjoining lot owned by the defendant on the corner of Claremont and Highland avenues.

The alleged right of way is claimed to be about eight or ten feet in width, and runs in a diagonal direction from complainant’s property across the middle of defendant’s lot to Claremont avenue. Defendant’s lot is about eighty-five feet in width and about one hundred and fifty feet deep.

At the conclusion of the hearing counsel for complainant insisted that he had shown that the way in question was a public thoroughfare, and rested his case on that contention. Notwithstanding this contention, which is without the slightest evidence to- support it, I find from the pleadings and proofs that complainant also- bases his claim for relief on the allegation that the right of way is an easement by necessity, and, also, by prescription.

The proofs do not show -any necessity for the way such as complainant claims; aside from his personal preference, the way claimed does not appear to be any more desirable than the present access, which complainant has to and from his lot by way of Highland avenue, and tire way now claimed is certainly not as short, nor as convenient as would be complainant’s use of Highland avenue, for the use of the way now claimed would require complainant to travel over an unimproved land for a distance of about ninety feet to reach Claremont avenue, while he can reach Claremont avenue from any part of his lot by going through the improved street known as Highland avenue and traveling but about eighty-five feet.

The remaining claim of complainant that the right of way is a prescriptive easement is based upon the following circumstances :

The lots called in the record A and B are owned, respectively, by complainant and defendant, and they, together with two other lots called C and D, were owned as one tract by the Parkhurst estate from 1859 to 1901. In 1901 lots A, B and C, as part of the Parkhurst tract, wrere purchased bv Margaret Cooper, who owned and used them as one tract until her death. Her daughter, Prances Cooper, inherited the three lots intact, and she conveyed them in 1911 to the Roseville Construction Company. This company, in 1912. laid out the tract and other property into lots, including the lots in question, and conveyed the lot it had designated as A, nowr owned by complainant, to a Mrs. Gaylord, and thereby, for the first time since 1859, a severance wras produced in the ownership of the title to the lots called A, B and C.

The proofs further showr that for more than thirty years there has been a large dvrelling-house, sometimes used as a boarding-house, on that part of the tract which is now complainant’s lot; that the owners of this .tract of land and the occupants of this house, visitors to it, and tradesmen in making deliveries to it, crossed that part of the tract that is now defendant’s lot B, to and from Claremont avenue, and that such persons crossed this lot on foot and in vehicles at about the point where the lane is now located and the right of way is claimed, as did others occasionally who desired to reach those parts of the tract which are now designated as lots C or D. The proofs further show that for some years the surface of the roadway or lane- has been covered with broken stone or ashes, and that a boardwalk about two> feet in width has been built along one side of it.

This is the extent of the use to which lot B, now owned by defendant, has been subject.

In support of complainant’s contention for a prescriptive easement, emphasis is laid upon the following provision contained in the deed to complainant for lot A, and, presumably, contained in the deeds of his pedecessors in title, viz.: “Together with all and singular the houses, buildings, trees, ways, waters, profits, privileges and advantages with the appurtenances to the same belonging or in any way appertaining.”

From what has been stated, it is apparent that complainant’s claim rests upon the contention that prior to the severance of title the several owners of the tract from which lots A, B and C have' been sold, in crossing that part of the tract now called lot A to get to lot B from Claremont avenue, made an adverse use 'of lot A; that this use during thirty or more years ripened into a prescriptive easement that has continued to the present time, and that has inured to complainant’s benefit, and entitles him to the relief he now seeks.

This contention ignores, of course, the fact that a man cannot, by mere user of part of his property, create an easement therein for the benefit of the rest of his property. Such user would not, and, of course, could not, be adverse, or in opposition to the title or right of the owner of the entire property. See Stuyvesant v. Woodruff, 21 N. J. Law 133; Fetters v. Humphreys, 18 N. J. Fq. 260; affirmed, 19 N. J. Eq. 471; Kelly v. Dunning, 43 N. J. Eq. 62; Larsen v. Peterson, 63 N. J. Eq. 88.

In Stuyvesant v. Woodruff, supra, Mr. Justice Whitehead, in delivering the opinion of the supreme court, said:

“I can find no case in which it has been,decided that the grantee of a. part of a tract of land has a right of way over the remaining lands of the grantor merely because the grantor before severance was accustomed to pass over the granted premises to the public highway.” '

As the severance of title to the properties owned, respectively, by the parties did not occur until 1912, there is, of course, no proof of an adverse, uninterrupted use of the way for the required period of twenty years by complainant and those under whom he claims.

Complainant’s contention, which is based on the quoted provision of his deed, also' ignores the fact that the easement of a right of way is not what the law calls an apparent or continuous easement, such as a drain, or ditch, or eaves of a roof, or a water course, or anything which is continuously in service, and is something that can always be seen or may become known on careful inspection, and which passes as appurtenant without the use of the word “appurtenant,” upon the severance of the title to the dominant and servient tenements. A mere right of way which is not apparent and continuous, and which is enjoyed at intervals, leaving no visible sign, in the interim, of its existence, is not such an easement as will be included in and pass under the term appurtenances, unless the grantor uses language sufficient to create the easement de novo. Seymour v. Lewis, 13 N. J. Eq. 439; Fetters v. Humphreys, supra; affirmed, supra; De Luze v. Bradbury, 25 N. J. Eq. 70; Denton v. Leddell, 23 N. J. Eq. 64; C. R. R. v. Valentine, 29 N. J. Law 561.

And the court of errors and appeals, in affirming this court in Fetters v. Humphreys, 19 Eq. 471 (at p. 476). held—

“A way comes within the description of a non-apparent easement. If existent before the seizin of the two tenements is united in the same person, it is extinguished by such unitv of seizin, and whether it was a pre-existent right of way, or is a way opened by the owner and used by him for the convenient occupation and enjoyment of the premises, it has no legal existence during the continuance of the unity of seizin.”

And an easement for a right of way such as complainant now seeks will not arise by implication unless necessary to the beneficial enjoyment of the land granted or retained. And, as stated, such necessity is- hot shown by the record. See, also, Brakely v. Sharp, 9 N. J. Eq. 1, and 10 N. J. Eq. 206; Stuyvesant v. Woodruff, supra; Taylor v. Wright, 76 N. J. Eq. 121.

In Stuyvesant v. Woodruff, supra, it was also held that the general rule was that an ordinary right of way does not pass upon the severance of title and possession, unless the grantor uses language in the conveyance showing that he intended to- create the easement de novo.

And in the absence of such expressed intention the grantor holds the remaining part of his premises discharged from all the easements, except such as arise from the necessity of the ease.

In Whalen v. Manchester Land Co., 65 N. J. Law 206, it was held that an easement that was not apparent and continuous would not pass as appurtenant upon the severance of title, and Vice-Chancellor Stevens, in Hazeldine v, McVey, 67 N. J. Eq. 275, held that it was perfectly well settled that a right of way will not be created or pass by the mere use of the word appurtenances, and, therefore, the provision of complainant’s deed, upon which he relies, does not entitle him to the relief he -seeks. The record in the- case fails to establish any of the essential elements of the easement claimed by complainants, viz.—first the continuous and adverse enjoyment of the right of way in question and its apparent obvious existence for so long as to justify the implication it was intended to- be permanent; or second, the severance of title between the dominant and servient tenements under such terms or conditions as would continue, or would create the easement de novo; orn third, that the easement claimed is necessary for the beneficial enjoyment of complainant’s property.

I will advise that the bill be dismissed.


author: Buchanan, V. C.

text:
    Jennie L. Ripley, complainant, v. Edgar S. Schenck et al., defendants.
    [Filed October 27th, 1924.]
    1. One whose duty it is to pay the taxes on mortgaged premises, will not be permitted to set up in defense of foreclosure of the mortgage a tax title resulting from his default in payment of such taxes, whether such title be acquired by him directly or by mesne conveyance.
    2. A mortgagor, who has covenanted for quiet enjoyment, is es-topped from setting up in defense of foreclosure, a superior title subsequently acquired by him whether such title existed prior to the making of the mortgage or not. ,
    On final hearing.

      Mr. Martin B. Stutsman, for the complainant.

      Mr. Edmund A. Hayes, for the defendants.
   Buchanan, V. C.

Complainant’s bill is to foreclose a mortgage given to secure a bond in the principal sum of two thousand dollars ($2,000), with interest at five per cent. Both bond and mortgage were made by defendant Schenck (his wife, also a defendant, joining in the mortgage) to complainant’s assignor, in 1905, payable one year thereafter.

In 1906 the mortgaged premises were sold for unpaid taxes for the year 1905, and were bought in by the township.. In 1916 complainant took an assignment of the bond and mortgage, and made agreement with defendant mortgagors that the interest rate should thereafter be six per cent, instead of five per cent.

In 1918 the township, by decree in a suit in this court, foreclosed defendants and complainant of the right of redemption from the taz sale.

In 1931 defendant Schenek repurchased the mortgaged premises, and obtained deed of conveyance thereof, from the township.

It is the contention of the defendant mortgagors (the only answering defendants) that it was “the duty” of complainant to answer the township’s foreclosure suit, “and to in all ways protect the mortgage held by her,” and that by reason of the decree in the township’ suit complainant “has lost all lien or claim by virtue of the mortgage.”

I am unable to see any justification for either of these propositions. It would, of course, have been futile for complainant to answer the township’s suit—she could not have denied- their allegations, which we must assume were true. She might have “protected” her mortgage by paying the amount due to the township. It may well be that if she had done so she would have acquired the township’s lien, or a new lien for the same amount, against the mortgaged premises, although there is no stipulation to that effect in the mortgage. Cf. Farmer v. Ward, 75 N. J. Eq. 33. But even so, it was only complainant’s privilege so to do—not her duty. It is not a mortgagee’s duty (unless in possession) to pay the taxes on the mortgaged premises, and there is no evidence nor even allegation of any agreement by the mortgagee to pay them. In short, there is no evidence of any duty on the part of the mortgagee to pay the taxes, or to redeem from the tax sale.

On the contrary, it is the duty of the mortgagor to pay the taxes on the mortgaged premises (Stewart v. Fairchild, Baldwin Co., 90 N. J. Eq. 139 (at ¶. 145), and authorities there cited. It is his duty, from the nature of the mortgage contract, to preserve the property pledged for the purposes of the original security. 27 Cyc. 1154.

It would seem clear; therefore, upon ordinary equitable principles that defendants cannot be allowed to take advantage of their own wrong, and cannot be permitted to set up in defense to the foreclosure of the mortgage made by them the title obtained from the township (which in the ownership of third parties would, of course, be a bar to the complainant’s present suit).

Such is not only the general rule (27 Cyc. 1152, 1153, 1154, and cases cited), but is the rule in this state. “The statute does not, in terms, prevent the owner from acquiring a tax title which will cut off the mortgagee, and yet such a prohibition, it is conceded, actually exists.” Farmer v. Ward, supra (at p. 35). “The mortgagor cannot acquire and hold adversely a tax title against the mortgagee, nor can his grantees, although all that the grantees purchased is the equity of redemption, and there is no assumption of the mortgage debt.” Stewart v. Fairchild, Baldwin Co., supra (at p. 145), citing authorities.

The same result is also reached by considering the effect of the covenant for quiet enjoyment contained in the mortgage now under foreclosure. It is held by the court of errors and appeals, in Tully v. Taylor, 84 N. J. Eq. 459, that a covenant in the same words estops a mortgagor from asserting against the mortgagee a superior title outstanding at the date of the mortgage and subsequently acquired by the mortgagor. In the instant case the superior title was not existent at the date of the mortgage, but that fact is immaterial so far as the principle is concerned.

Other authorities to the same effect may be found in the notes. L. R. A. 1918B (at p. 770).

Complainant is entitled to the usual foreclosure decree, with costs. The amount due is the two thousand dollars ($2,000) principal, with interest at six per cent., from April 11th, 1920.

As to the defendant Elmer J. Mundy, an order to answer will be necessary as against him, under rule 190.


text:
    Elizabeth Trust Company, as substituted administrator, &c., of Amos Clark, deceased, and as trustee, complainant, v. Lincoln R. Clark et al., defendants.
    [Decided October 29th, 1924.]
    1. In testamentary construction the word “and” may be read as “or” where necessary to effectuate the obvious intent of the testator.
    2. A gift to several persons by name, without more, such persons not, in fact, constituting a class, is a gift to them individually, and there is no right of survivorship as amongst them.
    On final hearing.

      Messrs. Biamler, Btamler & Koestler, for the complainant.
   Buchanan, V. C.

The bill is filed by complainant as substituted administrator cum testamento cmnexa, and trustee, under the will of Amos Clark, deceased, praying for construction of the will and directions.

The will gives the trustee a trust fund (originally real estate, sold by the trustee under power of sale in the will), with directions to apply the net income

“to the use of my four sons, Alfred H., Samuel. Arthur, Sigourney E., and Abraham Lincoln Clark, so long as the said Sigourney E. and Abraham Lincoln Clark shall live; and upon the death of the survivor of the said Sigourney E. and Abraham Lincoln Clark I do give and devise [the principal] as follows: An equal undivided fourth part thereof to the said Alfred H. Clark, his heirs and assigns forever ; another equal undivided fourth part, thereof to the said Samuel Arthur Clark his heirs and assigns forever; another equal undivided fourth part thereof to such person or persons living at the death of such survivor as under the present laws of the State -of New York would take the same as the heirs at law of the said Sigourney F. Clark if the same were real estate of which he died seized and possessed and he had died intestate in respect thereto, their heirs and assigns forever; and the remaining equal undivided fourth part thereof to such person or persons living at .the death of such survivor as under the present laws of the State of New York would take the same as the heirs at law of the said Abraham Lincoln Clark if the same were real estate of which he died seized and possessed and he had died intestate in respect thereto, their heirs and assigns forever.”

Testator left him surviving six children, a son William and a daughter Elizabeth, in addition to the four already named..

There is a residuary clause to 'all six children in equal shares. All William’s share in the estate has been assigned to the other five children.

Abraham L. died in 1921 and Alfred H. has recently died. The other three children are still living. •

The question is as to what disposition shall be made by the trustee of the income from the trust fund mentioned.

The words of the will dispose of the income for only as long as Sigourney and Abraham shall live; the corpus is not disposed of until the survivor of them shall die. Termination has already come to their joint lives, but the time for distrbuting the corpus has not arrived. Testator has made no express disposition of the income during the intermediate period, unless by the residuary clause.

Looking at the will as a whole, we find, first, a trust of $10,000 in favor of a sister, a niece and grandchildren; next, the trust fund now in question; next, a' direct devise of income-producing property to the son William; 'a direct devise of income-producing property to the daughter for life and her daughter; a trust of income-producing property fox the benefit of the son Sigourney for his life, then to Sigourney’s wife for life, and to his lineal descendants; then follows the residuary clause, and the appointment of all the children except Sigourney and Abraham, as executors and trustees; closing with a clause revoking all gifts to any who might contest the will.

The values of the several gifts are not in evidence1, but it is clear that they must have been quite substantial. _ The trust for the four sons comprised eight houses and lands at G-reenburgh, New York. The will was executed in 1908, and all six children were then of approximate middle-age, their ages varying by intervals of two to two and a half years.

Complainant’s counsel attaches some significance to the fact that Lincoln and Sigourney were the jmungest of the children. It is true that, mathematically speaking, their expectation of life would be the longest, but as to any individual or small group of individuals this can in nowise be relied upon, and I am unable to believe that testator planned his will upon the belief that he could reasonably expect them to be the last survivors of the four beneficiaries of the trust fund.

It is clear, however, from the fact that they are the only children he omits from the trusteeship, and the fact that he provides in the trust' fund clause that they shall receive only income—no principal—that he had less confidence in their business judgment and experience than that of the others. His intent is clear to provide a substantial income for each of those two during .the whole of their respective lives, amounting to at least a one-fourth share of the income from the devised property. This purpose would have failed in the event that either Lincoln or Sigourney had been the first of the four to die, if the word “and” in the phrase “so long as the said Sigourney F. and Abraham Lincoln Clark shall live,” is construed literally, for this would result in the income passing (under the residuary clause) to the five children, as long as the survivor of Sigourney and Abraham should live, and he had already elsewhere in the will completely provided for William and Elizabeth. It is evident that such was not his intent, and the word “and” is to be read as “or,” in order to effectuate his clear purpose and meaning. Zabriskie v. Huyler, 62 N. J. Eq. 697 (at p. 700); 40 Cyc. 1405; Cf. also Brown v. Mugway, 15 N. J. Law 330 (at p. 331, bottom); Holcomb v. Lake, 25 N. J. Law 605.

The gift of income, then, notwithstanding the death of Abraham L., continues until the death of Sigourney. But to whom should now be paid the shares of income received by Abraham and Alfred? Does the will give the income to the four sons jointly or severally?

“The rule is that a gift by will to individuals described by name, though they may constitute a class, indicates the testator’s intention to give to them only as individuals” (if no contrary intention appear elsewhere in the will). Dildine v. Dildine, 32 N. J. Eq. 78 (at p. 80); Pennsylvania Co. v. Riley, 89 N. J. Eq. 252 (at ¶. 255). The gift here is to the four by name, and they do not constitute a class—at least, there is no evidence thereof. I am unable to find from the will an intention by the testator that they should take jointly rather than as individuals. Moreover, the statute (now section 15 of the Conveyance act) makes express words necessary to create joint tenancy in lands. The gift here is not a devise of a legal estate in lands, but it is of an equitable estate in lands, an equitable estate pur autre vie (for the gift is of the entire net income, not a mere part in the discretion of the trustee. McGill v. Trust Co. of New Jersey, 94 N. J. Eq. 65; affirmed, 96 N. J. Eq. 331. Equitable estates are, in a court of equity, subject to the same incidents and consequences as similar legal estates in a court of law. Beideman v. Sparks, 61 N. J. Eq. 226 (at p. 231). Hence, though the statute mentioned may not strictly apply to an equitable estate, it designates a public policy which this court will apply by analogy.

It is true that the will gives the trustees a power of sale, and that that power has been exercised. But the will specifically provides in the same third clause, that the proceeds of sale shall be held on the same trusts as the lands, so that it matters not in the present case whether the rules of construction as to personal property might differ from those herein-before considered.

The result is that the four brothers took their interests in severalty, and the surviving brothers are not entitled to the shares of the two deceased brothers. The will does not specify the shares of each, but, on the principle that equality is equity, each must be held to have been entitled to a one-fourth share, and that seems to have been recognized and acted on by all parties.

The conversion under the power of sale took place prior to the deaths of Alfred and Abraham. Their respective interests will pass to their personal representatives. A legal estate pur autre vie in lands was not an estate of inheritance, but was an estate of freehold and devisable. Under section 1 of the Wills act, if not devised, it would go. to the executor or administrator and be distributed as personal estate. Alfred died testate; his share will go to. his executor and trustee, to be distributed according to his will. Abraham died intestate ; his share will go. to his administratrix (his widow) for the benefit of herself and the son as next 'of kin.


text:
    Hervey C. Haver, substituted administrator, &c., of Peter T. Haver, deceased, et al., complainants, v. Luella Herder and George Herder, her husband, defendants.
    [Decided November 15th, 1924.]
    Testator, by a will executed and taking effect after the enactment of the statute as to adoption, devised lands to his son for life, with remainder to the son’s “legal heirs,” if he should leave such, otherwise to tile son’s 'brothers. The son was survived by an adopted child only. .Held—(1) prior to the adoption statute testator would have been deemed to have meant by “legal heirs,” the son’s surviving lineal descendants, excluding adopted children; (2) section 10 of the Descent act (2 Oomp. Sta,t. of N. J. p. 1911) does not apply to such a case; (3) section 3 of (he Adoption act (P. L. 1811 p. 128, now P. D. 1902 p. 259 § 1¡) does not apply to such a case; (4) in the absence of evidence to the contrary, either in the will or surrounding circumstances, testator is to be deemed to have intended to include adopted children within the class designated by him as “legal heirs.”
    On final hearing.

      Mr. Willard 0. Parker, for the complainants.

      Mr. Daniel E. Beekman, for the defendants.
   Buchanan, V. C.

The facts in this case are not in dispute. Then only questions involved are of testamentary and statutory interpretation.

Peter T. Haver died in 1909 a resident of New Jersey. He left a will obviously drawn by himself or some scrivener with only a scanty knowledge of the law relative to wills. Under it he gives his homestead farm to his son George for life, and provides further that if at George’s death he “should leave any legal heirs” the farm is to go to them; but if George should die, “without leaving any legal heirs,” then the farm is to be sold by testator’s executors and the proceeds divided among testator’s other three sons, John, Peter and Wilson, “their heirs, equally share and share alike forever.”

All four of testator’s sons survived him. George has recently died; the other three predeceased him, leaving children, who now claim to be entitled to the farm, under the will, as against the defendant Luella Herder, who was legally adopted by George, under our statute, in 1911, bnt who was in no otherwise related to George.

The issue is as to what testator meant by “legal heirs” of George, and whether or not Luella Herder taires as coming within the class so designated.

It is, of course, clear that testator did not use the words “legal heirs” in their legal or literal meaning. He meant a much narrower or more restricted class, which did not include George’s three brothers, because he provides for equitable remainder over to the three brothers if George dies without leaving “legal heirs.”

There are a number of decisions in this state holding that by similar words in a will (“heirs” or “lawful heirs”), and, under similar circumstances, testator meant “issue.” Among these may be mentioned Baldwin v. Taylor, 37 N. J. Eq. 78; affirmed, 38 N. J. Eq. 637 (at p. 641), and Dean v. Nutley, 70 N. J. Law 217 (at p. 219). There are other eases holding that such words are to- be construed as meaning “children.” See^ for instance, Davis v. Davis, 39 N. J. Eq. 13, 14; Eldridge v. Eldridge, 41 N. J. Eq. 89 (at p. 91); Demarest v. Hopper, 22 N. J. Law 599 (at p. 611); Howell v. Steelman, 76 N. J. Eq. 423 (at p. 424); affirmed, 77 N. J. Eq. 586.

In none of these cases (nor in any other, so far as I am aware) was there any question involved, or considered, requiring a differentiation between “children” and “issue,” nor requiring a determination of the precise point in controversy in the present ease, which is, of course, whether by the words “legal heirs” (of a person other than himself) in a will which clearly evidences that testator did not mean such words in their literal sense, and did not mean thereby to include collateral heirs, such as brothers or sisters, testator is, or is not, to be held to mean such a class of persons as would include an> adopted child.

It -was decided by this court in Stout v. Cook, 77 N. J. Eq. 158 (at p. 165), that by the words “child” or “children” the testator did not mean to include an adopted child. That decision was based on the fact that neither at the time of the execution of the will, nor at testator’s death, was there any legislation (either in New Jersey or the state of testator’s domicile) providing for the adoption of children, and that hence the testator could not have had adopted children in mind. The decision further holds that the statute, P. L. 1877 p. 123 (which was enacted between the date of testator’s death and the date of the suit), did not clothe an adopted child with the right to take under a gift in such a will to “children”—in other words, that the legislature had not undertaken by that statute to alter the testamentary provisions of a will executed and probated prior to the statute.

The decision in Stout v. Cook, supra, however, is neither controlling nor of such assistance in the disposition of the instant ease, because the present testator was domiciled in New Jersey, and at the time the will was executed (1899) the statute of 1877 was in effect (and had been for many years), and at the time of testator’s death (1909) our present statute, P. L. 1902 ¶. 259 (which is essentially similar to the statute of 1877), was in effect. Stout v. Cook assuredly in nowise holds or indicates that if the testator had been a resident of New Jersey and our statute, in effect, “children” would not have been interpreted to include an adopted child.

Neither do I find any decision or dictum, in the case of In re Book, 90 N. J. Eq. 549 (on which defendants’ counsel strongly relies), which indicates the answer to the question now sub judice. That case was one of statutory, not testamentary, interpretation, involving a distinctly different issue. It holds that the effect of the act of 1902 is to require that the legislative meaning of the words “child,” “children” and “issue,” where they appear in the various statutes, such as the acts concerning wills, descent and distribution, be enlarged to include adopted children. The court does not say that a similar interpretation is to be given to these words where they appear in testamentary dispositions.

George Haver had no child, adopted or natural bom, at the time the will was drawn or at testator’s death. It is evident, therefore, that there could have been no intent on the pai-t of testator to benefit persons in being, persons whom he knew, or of whose existence, at least, he knew. In the third paragraph of the will he disposes of another property to the benefit of his four sons, and in this paragraph he provides that the share of one son, Wilson, shall be only a life estate, and the remainder shall go to Wilson’s three children, naming them. There are conflicting 'opinions (see Davis v. Davis, supra—at p. 15) as to the inference to be drawn from the use of the word “heirs” in one place and the use of the word “children” in another, but no valid inference can be drawn' either way in the present case, because in using the word “children” he refers to three particular children who were already existent.

Testator’s use of the word “heirs” in the place where it secondly appears in the second paragraph of the will, is, at least, equally ambiguous as its use in the first instance, and hence affords us no help.

If in making the gift to George’s heirs testator had used the word ‘fiieirs” in its technical sense, there would have been no doubt, I take it, as to the result in the present case, since the statute expressly makes the adopted child an heir— a legal heir—of the adopting parent. But we have already seen that testator did not use it in its technical sense.

Can it be said that, although he did not use the word in its technical sense, since he intended to exclude collateral heirs, he must, nevertheless, be deemed to have meant it technically save for that exception?—in other words, that he meant the persons who by law should constitute George’s direct heirs—his heirs exclusive of collateral heirs ? Such an assumption is possible, but seems to me scarcely warranted, at least, in the case of this particular will.

The available evidence, to my mind, leaves the testator’s intent in this behalf entirety uncertain, and necessitates (since the question must be determined one way or another in order that the case may be decided) the adoption of a rule of construction. Such a rule may be formulated as follows: That where a testator, by a will executed and probated during the existence of our statute as to- adoption, devises property to a class designated as “heirs,” “lawful heirs” or “legal heirs” (in cases where, prior to the statute of adoption, such words would have been held to mean “children” or “children and/or the children of deceased children”), he must be deemed, in the absence of evidence to the contrary elsewhere in the will or surrounding circumstances, to have intended to include within such class children adopted pursuant to' such statute, as well as natural-born children or grandchildren.

(I have not included the word “issue,” because that might, perhaps, fairly be taken to mean “heirs of the body,” under the express exception provided by the statute, to wit, that an adopted child shall not be capable of taking property expressly limited to the heirs of the body of the adopting parent or parents.)

Either this rule or its opposite must needs be adopted, and the adoption of the rule as above stated, rather than its opposite, in my view, is in accord with both the spirit of the legislative policy (as indicated in the adoption statute) and the spirit of the judicial pronouncement in the Booh Case, supra.

I have hereinbefore stated that the Booh Gase did not in terms control the determination of the present issue. Perhaps, in view of the tenth section of the statute of descent and the opinion of the court of errors and appeals in Demarest v. Hopper, supra, some explanation should be added.

In the Demurest Gase there ’was a devise to a daughter, and, at her death, to her heirs in equal shares. The court held that the testator by “heirs” meant “children,” but also were of opinion (shared by the dissenting member of the court) that the rule in Shelley’s Gase would operate were it not for the statute now contained in the Descent act as section 10 thereof.

In this view they were mistaken, as has been made clear in the later opinions of the same court. Martling v. Martling, 55 N. J. Eq. 771; Lippincott v. Davis, 59 N. J. Law 241; Peer v. Hennion, 77 N. J. Law 693, and Shugrue v. Long 82 N. J. Law 717.

But although the later cases determined that where a remainder was given to a life tenant’s heirs, and the word fiheirs” was not used by the testator in its technical sense, and was used as a word of purchase, the rule in Shelley’s Gase would-not come into operation even in the absence of the statute, there ' might have been, until the decision in Shugrue v. Long, supra, uncertainty as to whether the tenth section of the Descent act would apply in such a case—that is to say, in the present case. If it did apply, then the Book Gase (the effect of which is to enlarge the meaning of the word “heirs,” in that section, to include adopted children) would be controlling. ■ But in the last paragraph of Shugrue v. Long (at p. 723), it is determined that the tenth section of the Descent act applies only to such cases as would have been controlled, at common law, by the rule in Shelley’s Case.

The action was, of course, justifiably brought, and the costs of all parties may be paid out of the estate.


author: CHURCH, V. C.

text:
    Minturn H. Tichenor et al., executors, et al., complainants, v. Mechanics and Metals National Bank of the City of New York et al., defendants.
    [Decided June 19th, 1924.]
    1. It is the duty of a life tenant of real estate, under ordinary circumstances, to pay taxes, repairs, &c.
    2. Wlhere a testator, after creating certain trusts, leaves, eventually, his property for “the support of the needy” after first pro-' viding for the upkeep of a graveyard by the income from a fund to be held by his trustee, and also the payment of certain income to certain persons and their children, thus intermingling private charities with those that are not charitable, these provisions violate the rule against perpetuities and the whole scheme is void.
    3. Where there has been an equitable conversion of real estate into personalty for the purposes of the will, and the purposes Hre invalid as a whole or in part, the conversion fails.
    4. Executors are entitled to their commissions for settling an estate, irrespective of any statement in the will.
    5. Chapter 284 (P. L. 19B0) is not applicable to the present case.
    On bill, &e.

      Mr. Henry P. Bedford, for the complainants, and Metals National Bank.

      Mr. Edward C. Pettil, for all the defendants, except Mechanics and Metals National Bank.

      Messrs. Lindabury, Eepue & Ea/wTks, for the Mechanics
   CHURCH, V. C.

This is a biil filed for the construction of the will of Bryan Ward Tichenor, of Essex county, New Jers&3r, which was admitted to probate in the orphans court of that county in January 5th, 1923.

The court is asked to construe the clauses of the will, Avhich are set forth as follows—first, the fourth clause:

“I give and bequeath to my sister Ida, for life, the use and occupation of the house and plot of ground now occupied by her at, No. 14 Bruen avenue. Irvington, New Jersey, rent free, but at her own exjiense for the upkeep thereof.”

Tn paragraph number 2 of the eighth claus.e the trustee is directed to “pair all taxes or other charges upon property held under this trust or otherwise forming part of my estate [except the property No. 14 Bruen avenue, Irvington, so long as the same shall he occupied by my sister under the fourth clause hereof].” The question arises, therefore, as to whether Ida shall he charged with the payment of taxes and other charges against the property.

It is the duty of the life tenant, under ordinary circumstances, to pay for taxes, repairs, &c. I believe it was the intention of the testator to allow his sister to live in his house rent free, with the understanding that she should, during her lifetime, assume all expenses connected therewith in lieu of any rental for the same. See Thomas v. Thomas, 17 N. J. Eq. 356.

The next question is as to the seventh and eighth clauses of the will, which reads as follows:

“Seventh. I wish my executors to sell and convey my veal estate all or any part thereof, so soon as in their judgment may be aclvantageous to my estate, and turn over to my trustees hereinafter named the net proceeds thereof.
“Kighth. All the rest, residue and remainder of my personal estate., including proceeds of sale of real estate or profits arising from operation thereof, I give and bequeath to the Mechanics & Metal National Bank of the Oity of New York, in tru.st, to and for the following purposes, to wit:
“1. To take, hold, invest and reinvest the same in such interest-bearing securities as my said trustee shall elect, without regard to any law or ruling of or in the State of New York or State of New Jersey restricting the investment of trust funds, with full power of purchase, sale and exchange; and, except as hereinafter provided, with any and all other rights, powers and privileges which are or may be exercised by a person owning similar property in his own right.
“2. To collect and receive all income from such investments and therefrom pay all taxes or other charges upon the property held under this trust or otherwise forming part of my estate (except the property No. 14 Bi'uen Avenue, Irvington, so long as the same shall be occupied by my sister under the Fourth clause hereof. .
“3. To contract and pay’ for the upkeep of the burial plot in Raymond Hill Cemetery referred to in the Second Clause hereof.
■‘4. To pay, quarterly, to my sister Ida the sum of One hundred dollars per month so long as she shall live.
“5. To distribute and pay over the entire remaining net income arising from said trust fund, half yearly as follows:
, “(a) One-fourth part thereof, including such accretions as may arise under section (e) of this Clause, to my said sister Ida, for charitable uses in her discretion, and without accounting by her therefor, so long as she shall live; thereafter to her nominee (or if none, then to the nominee of my Trustee) for like use, but subject to accounting to and control of my said Trustee so long as this trust shall continue.
“(b). One-fourth part thereof to my brother Minturn H. Tichenor so long as he shall live; thereafter to his then living child (or children including his son’s widow so long as she shall remain such widow, in equal shares) for life.
“(c) One-fourth part thereof to Jennie, widow of my deceased brother Herbert W. Tichenor, so long as she shall remain such widow; thereafter to his then living child (or children, in equal shares) for life.
■‘(d) One-fourth part thereof to Mrs. Emma L. Moore, sister of my deceased wife, Edith, so long as she shall live thereafter to her then living child (or children, including son’s widow so long as she shall remain unmarried, in .equal shares) for life.
“(e) Upon the falling in of any one or more of these four beneficial interest (including 4 but excluding 5 (a) the same shall thereafter be divided and distributed equally among the then surviving principal beneficiaries (Minturn H. Tichenor, Jennie Tichenor and Mrs. Emma L. Moore) only, and only so long as he or she shall live; thereafter, that is to say upon the death of all said three principal beneficiaries, the share or aliares of those without then living issue or widow of male issue shall be thereafter distributed under the provisions of section (a) of the Fifth clause; my intent and purpose being to limit in every case the benefit to child or children to the one-fourth interest in said trust fund primarily provided for the parent.
“(i. This trust shall continue until the death of the last beneficiary hereunder, when the entire fund then on hand shall be devoted to relief of the needy in the wise, discretion of my said trustee; first however, setting aside a fund sufficient to provide for the upkeep in perpetuity of the burial plot at Carmen aforesaid.
“7. For the guidance of my said trustee, it is my wish that my said beneficiaries shall receive a sure and substantial income from said trust, rather than that the principal sum thereof shall be increased; therefore, any and all increment received by my said Trustee from investments, by way of extraordinary or stock dividend or otherwise howsoever, shall be deemed to be wholly income and distributed accordingly ; likewise, any assessment, subscription or other payment howsoever made to protect a security, and not primarily for augmentation of principal, shall be charged to income; Appreciation or depreciation of .any security from any cause whatever shall not affect the distribution of income when once such income shall have been in hand.
‘‘Further, that in the distributions, intermediate or final, for charitable purposes herein provided regard be bad to the possible need of my relatives.
“Lastly : I nominate, constitute and appoint by brother Min-turn 0. Tichenor and my sister-in-law Mrs. Emma L. Moore executor and executrix of this my last will, without bond, and particularly request them both to qualify and act as such without compensation further than their actual and necessary expenses incurred on and about the administration of my estate.
“It is my wish that no proceedings touching by estate be had in any jurisdiction other than Essex County, New Jersey, further than may be necessary to make record title to the various parcels of real estate of which I may died seized in other states and to render operative the trust herein created.”

It is the contention of the complainant that these clauses violate the doctrine against perpetuities, and, in the ° first place, that they embrace objects not charitable, as well as those that are charitable. It will be observed that the testator, after creating certain trusts, leaves, eventually, his property for “the support of the needy,” after first providing for the upkeep of a graveyard in which his body is to he buried, and that of his family. The provision is not to an incorporated cemetery company but to- the trustees themselves.

It has been decided in this state that the keeping in repair of a burial plot is a private and not a public charity. 76 N. J. Eq. 447.

In VanSickel v. Johnson, 80 N. J. Eq. 117, the present chancellor, then sitting as vice-chancellor, discussed the matter of the intermingling of private charities with those that are not charitable. In that case the testator gave a sum of money for keeping a graveyard in repair, and, if the church failed, to make good the pastor’s salary, the balance of the fund was to be used for that purpose. The chancellor held that the entire bequest was void because it included an object of charity and an object not charitable—that is, the provision for keeping a graveyard in order, which is void as a perpetuity, and the gift being indivisible, the whole is bad.

Besides the upkeep of the graveyard, the trust provides for the payment of income to- certain persons and their children, which is, admittedly, not charitable. The paragraphs in question provide that at the death of the first life tenant the income is given to the living children of the first taker and the widow of any child. However, as has been suggested in the briefs, there might be no widow of the child until more than twenty-one years after the death of the first taker.

It is admitted that the paragraphs in question are void under the New York statute where the real estate is situated, but the trustees contend that, under the will, there is an equitable conversion and the proceeds of the real estate are really personalty, and are to be governed by the law of New Jersey. But there is another legal rule which holds that “where there has been an equitable conversion of real estate into personalty for the purposes of the will, and the purposes are invalid as a whole or in part, the conversion fails.” Moore v. Robbins, 53 N. J. Eq. 137.

I am of the opinion that the clauses in question violate the rule against perpetuities and are. void. It is therefore unnecessary to discuss the question whether or not the bequest to trustees “for the support of the needy” is void for vagueness and uncertainty.

The fourth paragraph of clause eight of the will provides for a payment of $100 a month to the testator’s sister, and the question is as to when the payments of the said annuity should begin. Also, under the fifth paragraph, the question is raised as to when distribution of income should commence.

I agree with the contention of the counsel for the trustees that the first payment of the annuity should be made thirteen months after the death of the testator, and the first payment of income should be made eighteen months after the testator’s death.

As to the provision in the clause entitled “lastly,” nominating the executors, the question is raised whether or not it prevents them, from receiving commissions as executors. I think the cases in this state clearly show that the executors .are entitled to their commissions irrespective of any statement in the will. Heath v. Madock, 83 N. J. Eq. 681.

One other question has been raised, and that is as to whether the executors should dispose of the securities in their hands and turn over the proceeds to the trustees, or whether they should turn over the securities in kind. It is the duty of the executor to collect the assets of the estate, and, after the payment of debts and legacies, to turn over whatever remaining assets there are to the trustee in kind.


author: Church, V. C.

text:
    Anna M. Sandmeyer, complainant, v. Fidelity-Union Trust Co., defendant.
    [Decided September 29th, 1924.]
    Where a corporation made a mortgage to secure the debt ol its president, the corporation receiving1 no money or other consideration therefor, which mortgage covered lands which the corporation had contracted to sell to a bona fide purchaser before the mortgage was executed, such mortgage cannot be enforced equitably against such purchaser, when the purchaser had continued his payments as required by the contract without actual knowledge of the existence of the mortgage.
    On bill, &c.

      Mr. William E. Sandmeyer, for the complainant.

      Mr. Francis Lajferty, for the defendant.
   Church, V. C.

The facts in this case as set forth in the stipulation are as follows:

1. On or about May 1st, 1906, Anna M. Sandmeyer agreed with Greylock Land Company to purchase two' parcels of land designated on the map of Greylock Manor, as lots Nos. 426-427, and to pay the said company therefor the sum of seven hundred ($700) dollars in installments.

2. This agreement was signed and executed by both parties and complainant made her first payment, and continued to make payments under the terms of the agreement until July 1st, 1915.

•3. On or about July, 1912, John B. Scarlett was president and majority stockholder of Greylock Land Company. At that time the said John B. Scarlett was indebted to the Union National Bank for money loaned or advanced to him personally and for his own personal use, and in order to secure his personal loans from the said bank, and as security for his personal indebtedness to the Union National Bank,_ he caused the Greylock Land Company to execute a mortgage on certain of its undeeded property to secure payment of the sum of sixteen thousand ($16,000) dollars. This mortgage was given to Fidelity Trust Company of Newark, New Jersey, as trustee for Union National Bank et al., and the consideration for the said mortgage represented no moneys advanced -to; or due from Greylock Land Company.

4. The mortgage aforesaid covered the lots contracted to be sold by Greylock Land Company to> complainant, Anna M. Sandmeyer, known as lots Nos. 426-427 on map of Grey-lock Manor, and the said mortgage contained a.clause pro viding for the release of any lot or lots from the lien of said mortgage upon the payment to Fidelity Trust Company of one hundred ($100) dollars for each lot so released.

5. Complainant had no notice of the giving and the recording of the mortgage aforesaid to Fidelity Trust Company, nor was she aware that the said mortgage covered the lots contracted to' be sold to her, and upon which she was making payments, and she continued making her payments aforesaid until 1914, when, for certain reasons consented to by Greylock Land Company, payments were suspended until June, 1915, when, upon making a final payment, complainant secured- from Greylock Land Company a deed conveying to her said lots Nos. 426-427 on map of Greylock Manor aforesaid, and more particularly described in the bill.

6. Complainant is still the owner of the lots aforesaid, and the mortgage set out in the foregoing still covers the said lots and forms a cloud upon title thereto1. No interest has been paid on said mortgage since the year 1912, and no claim has been made upon the complainant for interest on the said mortgage or any part thereof, and no notice was ever given to her of the existence of such mortgage (other than the constructive notice of recording the instrument! since the year 1915, when her deed to said lots was recorded.

7. In the year 1921 Union National Bank and Fidelity Trust Company were consolidated into one company, the new title of which is Fidelity-Union Trust Company. All of the assets and liabilities of Union National Bank and Fidelity Trust Company were taken over by Fidelity-Union Trust Company.

8. Complainant, through her solicitor, made a demand upon the Fidelity Trust Company in 1918, and made a demand on Fidelity-Union Trust Company in 1922, for the cancellation of the mortgage aforesaid covering her lots. Fidelity Trust Company and Fidelity-Union Trust Company, through its agent, Francis Lafferty, refused to cancel the mortgage.

It is contended that, in order to attack the validity of the mortgage, in SO1 far as she is affected by it, the complainant must show that she was a creditor at the date of the record.

I am sátisfied that from an equitable standpoint she was a creditor, because she had entered into a contract whereby she was to make .certain payments, and was to receive, after those payments were made, a deed for the lots free and clear of encumbrances. She performed her part of the bargain, and, if she can get no- equitable relief, her lots are useless to her, because they are encumbered by a mortgage which is, presumably, considerably in excess of the purchase price paid by her.

I believe that this situation is one which justifies a court of equity in granting equitable relief.

The defendant says that her rights have not been injuriously affected. I cannot see how this can be, under the facts as set out in the stipulation. And I also think that she has sustained a loss on account of this mortgage from the Grey-lock Land Company to the Union National Bank.

Without deciding whether the mortgage is altogether void, for the reasons stated in the complainant’s brief, I have decided to advise a decree directing that the mortgage, in so far as it affects the lots of the complainant, shall be canceled.