text:
      Alexander Rubinstein, respondent, v. William Kasprzak et al., appellants.
    [Decided April 17th, 1924.]
    On appeal from a. decree of the court of chancery advised by Vice-Chancellor Fielder, who filed the following opinion:

      “Complainant claims to be the owner of forty shares of the Stanley Silk Dyeing Co. by purchase from former owners thereof, which stock he presented to the proper officers of the company for transfer to his name, and transfer was refused. He filed his bill against the company and its officers (who are the only other stockholders), praying that the secretary be directed to transfer said shares to his name on the company’s books, and that pending this suit the stockholders and directors be restrained from holding meetings. The defense is that the shares in question were purchased by the company and retired, and that the certificates of stock are held by complainant as custodian for the company.
    “This is a close corporation, all stock issued being held by Stanley Kasprzak, who is treasurer; William Kasprzak, who is secretary; Veronica Kasprzak and complainant, who is president. Stanley and William Kasprzak and complainant constitute the present board of directors. If the shares in question belong to complainant and are added to other shares he owns, he has a majority of the capital stock, but if the shares were' purchased by the company and should be retired, the Kasprzak family has the stock control, so that the Ivasprzaks are the persons realty interested in resisting complainant’s claim.
    “The admitted facts are that prior to August, 1918, the forty shares in question were owned by Albert Walzak, John Lingelbach, Stanley Olterzcwski and John Harsche; that such shares were purchased from the owners and paid for by the company’s checks and notes dated August 5th, 1918, to the order of the owners, for a total of $7,200; that the certificates were assigned by the owners thereof and delivered to complainant, who held them in his possession until August, 1922, when he presented them to the company’s officers with the request that they be transferred on the company’s books to his name as owner, and a new certificate delivered to him, which request was refused on the ground that the shares belonged to the company. As to practically everything else of importance in the case alleged by the one side, there is a flat denial by the other, and it is difficult to determine where the truth lies, but relying largely on the minutes of the company and on its books of account, all being records kept at a time when the relations between the parties were harmonious and when it does not seem probable that complainant was laying a foundation for a claim which he waited four years to assert, I have reached the conclusion that the complainant’s story of the transaction is the true one and that he is entitled to the relief he seeks.
    “The company was incorporated October, 1916, Rubinstein, the complainant, Stanley Kasprzak, Iíarsche, Lingelbach, Walzak and William Kasprzak were on its first board of directors, which was completed by the election of Olterzcwski, December, 1916. Rubinstein was elected president and Stanley Kasprzak treasurer, and by agreement with the company Kasprzak was employed as superintendent and manager of the business, and Rubinstein was employed as its soliciting agent. As early as April, 1917, the other stockholders and directors were complaining of the management of Kasprzak and Rubinstein, and at a meeting of the board, held April 30th, 1917, four dissatisfied stickholders expressed a desire to dispose of their shares and were informed that the company would not buy because it did not have the money. At fire directors’ meetings prior to June 24th, 1918, the subject of the sale of this stock to the company was discussed and it was reiterated that the company had not the money and would not buy. From the minutes of six other directors’ meetings, during the same period, it appears that the company’s business was poor; that many repairs to, and replacements of, machinery were required, and that because of lack of funds a frequently discussed dividend could not be paid. At the meeting of June 24th, J.91S, William Kasprzak informed the board that he had sold his shares to Rubinstein, and the secretary asked why he had sold his shares without notice to the company. Rubinstein replied that the company had not the money and that because certain shareholders had stated they proposed to buy he, Rubinstein, had bought the shares from William Kasprzak. Eor some undisclosed reason this sale of stock did not go through. About this time the four dissatisfied stockholders took their troubles to Attorney Benson, who, after several interviews with Rubinstein, arranged with Rubinstein for a sale of the stock. In the minutes of a directors’ meeting, held July 29th, 1918, it is recorded that Rubinstein, upon being asked about these stockholders, stated that he had been called to Benson’s office July 20th with Olterzcwski, Walzak and Stanley Kasprzak had made arrangements to purchase the stock. Rubinstein testified that after his first meeting with Benson, he consulted Stanley Kasprzak, who told him that the company could not take the stock, and that he then asked Kasprzak if he, Kasprzak, would buy, and Kasprzak said he would not, and told Rubinstein to purchase it; that Rubinstein then asked Kasprzak if he could borrow the necessary money from the company, and that Kasprzak consented, and thereupon Rubinstein informed Benson that he would buy. This is denied by Kasprzak, but because at the directors’ meetings it had been uniformly officially decided that the company was not in funds and could not buy, and because of other circumstances to which I shall refer, I feel that Rubinstein’s story is corroborated.
    “The sale was consummated August 5th, 1918, at Benson’s office. Harsche, one of the stockholders who sold, had previously signed the form of transfer endorsed on his certificate and had given his certificate to Walzak to deliver for him, and was not present at the transfer. Walzak, Lingelbach and Olterzcwski, who were at Benson’s office when the sale was closed, testified that they signed the assignments of their certificates in blank and delivered the certificates to Benson in exchange for their checks and notes. Benson had not known Rubinstein prior to this transaction and he was acting in the matter for Walzak; Lingelbach, Olterzcwski and Harsche. He is a disinterested witness and he testified that the body of each assignment, including Rubinstein’s name as assignee, is in his (Benson’s) handwriting, and that he is quite sure that the assignments were filled in as they now appear, before the assignors signed. Rubinstein’s testimony is to the same effect. Whether Benson filled in the assignments before or after the assignors signed., it is apparent from his testimony that his understanding of the transaction was that Rubinstein was purchasing the stock, and hence he named Rubinstein as the assignee in the assignments, and this in spite of the fact that the checks and notes which were delivered at his office in payment for the stock were made by the company. The certificates of stock were then delivered to Rubinstein, who has had them ever since.
    “The checks and notes which paid for the stock were prepared by Veronica Kasprzak, daughter of Stanley Pasprzak, who was then the company’s bookkeeper. These disbursements of company’s funds were entered in the cash book by Veronica Kasprzak under date of August 5th, 1918, as payments to the respective stockholders who sold, with the amount paid each opposite his name, the total being $7,200, and the four entries were bracketed by her, and outside the bracket she wrote the words ‘a loan.’ Rubinstein repaid the money to the company in three installments, as follows: October • 21st, 1918, $3,500; November 23d, 1918, $2,000, and May 3d, 1919, $1,700, each of which payments is credited to Rubinstein in the company’s cash book in the handwriting of Veronica Kasprzak and to each of which she added the words 'return of loan.’ Veronica Kasprzak says that when she made the entry of August 5th, 1918, she knew that the transaction was a purchase of the stock in question, but that she did not know Rubinstein to be the purchaser, and that she made all the entries in the cash book, including the words 'a loan’ and 'return of loan’ under Rubinstein’s direction, without understanding the reason for or meaning of such entries. This Rubinstein denies, and he says she was with her father when he and Kasprzak discussed the proposed loan to Rubinstein.
    “Miss Kasprzak gradúated!'(from a, Paterson grammar school in 1914, and after being employed in a mill, went to work as bookkeeper for the company in July, 1918, when she was about seventeen years old. She is an intelligent young woman, speaking and writing the English language perfectly, and throughout the trial of this case she sat with defendant’s counsel and was frequently consulted by, and she advised with, him in connection with the trial. Before and' after the purchase of the stock she resided with her father. It seems improbable -that the purchase of this stock was not discussed in her presence in the home and in the office, and that she did not understand the whole transaction and did not know that the first entry she made in the cash book indicated that the company was loaning $7,200 to Rubinstein to pay for the stock purchased from the four stockholders, nor does it seem probable that when she made the'first entry of repayment by Rubinstein and added the words ‘return of loan’ October 21st, 1918, after she had kept the company’s books nearly four months, she did not know that Rubinstein was returning part of the money loaned him by the company to' purchase the stock in question.
    “A bookkeeper not regularly employed by the company, but-called in from time to time to keep the company’s ledger, posted the entries*from the cash book. He testified that in posting the first entries to which I ha,ve referred, he charged Rubinstein’s loan account with the $7,200 paid the stockholders, because Miss Ivasprzak told him that the amount should be so charged and that he credited the loan account with the three payments made by Riubinstein, because the cash book entries showed they should be so credited. The ledger was kept in the office of the company and Miss Ivasprzak had access to it, and it does not seem probable that she did not know of Rubinstein’s loan account and the entries therein.
    “The minute record of a directors’ meeting of August 26th, 1918, shows Stanley Ivasprzak, Rubinstein and Bieszczad as the only persons present, the latter being then secretary and a director, but having since sold his stock to Veronica Ivasprzak. ‘ At this meeting Rubinstein reported that on Angust 5th, 1918, he had paid the four stockholders $7,200 for their shares, whereupon Bieszczad asked Rubinstein who paid for the shares. Kasprzak answered the question by saying that the stock had been paid for ‘with the company’s money.’ Rubinstein then stated ‘to the company’ that he would like to have the forty shares divided equally between Kasprzak and himself, and Bieszezad asked Kasprzak if he agreed to this, and the minutes show that Kasprzak replied ‘that he isn’t.’ It is contended by Kasprzak that the word last quoted as originally written in the minutes was ‘is’ and that it has been changed by some person, who, it is inferred, is Rubinstein, to ‘isn’t.’ Rubinstein, who signed the minutes-, says that it was originally written ‘isn’t.’ while- Bieszezad, who took the minutes in Polish and whose son afterward translated them into English and wrote them in the minute hook, says that the word was originally ‘is.’ The disputed word has a different appearance from the other words in the sentence, hut I am not convinced that the handwriting is different, but rather that the difference in appearance is due to a greater quantity of ink having been used in writing the word.
    “Kasprzak, by his filed answer and by Ms testimony, contends that the stock was not purchased by or for the benefit of any individual, but by the company, ancl was retired, notwithstanding that, up- to the time of the purchase, the minutes show that the board- of directors had refused several times to purchase for the company, and that the company apparently did not have the money with which to purchase. It therefore seems to me that at the meeting of August 26th, 1918, after Kasprzak had stated that the stock had been paid for ‘with the company money,’ and Rubinstein, speaking as though he had the right to dispose of the shares, had stated ‘to the company’ that he would like to have- Kasprzak take half of them, Kasprzak could' not have said he was willing, ancl the secretary who took the minutes could not have noted that Kasprzak said ‘that he is/ because Kasprzak’s- natural reply to Rubinstein’s proposition would be a statement to the effect that Rubinstein was not the- owner of the- stock and could not make any disposition of the shares. The books of account show that the money used for the purchase of the stock was loaned to Rubinstein and that the loan was repaid b}r him. The certificates for the forty shares have always been in Rubinstein’s possession. The fact that Kasprzak never paid, or offered to pay, Rubinstein for twenty shares, and never made demand on Rubinstein for any shares, also negatives his claim that at the meeting in question he agreed to take half of them. If, however, at this meeting, Kasprzak did agree to an equal division of the forty shares between Rubinstein and himself, it must have been his understanding that Rubinstein and not the company had purchased, because if he believed the company to be the owner of the stock, he must have known that he and Rubinstein could not take the stock purchased with company funds and for the company, to the exclusion of the other two stockholders, William Kasprzak and Bieszezad.
    “Defendants call attention to a dividend amounting to $2,050, which was paid by the company November 21st, 1918. At that date the stock outside of the forty shares was held as follows: Rubinstein, ten shares; Stanley Kasprzak, seventeen share; Bieszezad, ten shares, and William Kasprzak, five shares. Of this dividend Rubinstein and Stanley Kasprzak received equal amounts, and the defendants argue that if Rubinstein was then the owner of the forty shares in question, he would not have consented to share equally in this dividend with Kasprzak. Rubinstein’s explanation is that he and Kasprzak were friends when they formed the company, and that they then agreed to share equally in all amounts drawn from the company, whether for salaries or profits, regardless of their stock holdings. They did share equally in salaries and in other amounts drawn by them from the company under resolutions passed by the board of directors, and while his explanation of an equal sharing of dividends, when, as he claims, he owned fifty shares and Kasprzak owned seventeen, appears on its face improbable, yet if the situation was as Kasprzak claims, namely, that the forty shares had been retired, and he owned seventeen shares and Rubinstein owned ten, he, Kasprzak, was consenting to an equal apportionment of the dividend between Rubinstein and himself, notwithstanding the difference in the number of shares held by each, so that the manner in which the dividend was paid out does not affect my opinion as to the merits of Rubinstein’s claim.
    “In explanation of his holding the certificates purchased, from August 5th, 1918, to August, 1922, and failing to present them to the secretary for transfer, Rubinstein says he did not know it was necessary to have the shares transferred, and that his ignorance continued until lie learned that Veronica Kasprzak had purchased Bieszczad’s shares and had presented them for transfer in August, 1922, whereupon he presented his shares. None of the stockholders had had any experience with corporations or with stock ownership and all were more or less ignorant of business methods, so that Rubinstein’s explanation appears to me to he reasonable.
    “Section 48 of the Corporation act (Comp. Stat. p. 1630) provides:
    “ 'Xothing but money shall be considered as payment of any part of the capital stock of any corporation organized under this act, except as hereinbefore provided, in the case of the purchase of property, and no loan of money shall be made to a stockholder or officer thereof; and if any such loan be made the officers who made it, or assent thereto, «hall be jointly and severally liable, to the extent of such-loan and interest, for all the debts of the corporation until the repayment of the sum so loaned.’
    “The connection in which the prohibition against a loan to a stockholder or officer is placed in this section would indicate that it bears some relation to the requirement that only cash shall be considered as payment for stock, hut, however that may he, the statute seems to have been enacted for the benefit of creditors to secure them for their debts as against the dissipation of corporate funds through loans to stockholders and officers, by making the officers, who assent to such a loan, liable for the repayment thereof in case the borrower fails to pay. If such a loan he made and be repaid no creditor can complain, and the penalty prescribed by the statute is ended. The defendants insist that a loan, sucli as the one in question, is prohibited by the statute, and, if it was made, Rubinstein became trustee for the company, not only of the money borrowed, but of the stock purchased by the loan as well. 'The company’ in this case is Stanley Kasprzak, William Kasprzak and Veronica Kasprzak, and they and not the artificial person, the corporation, will benefit by the position they assume. There is no doubt but that Rubinstein returned the money which they say he held in trust, and the individuals mentioned, representing The company,’ say they also want the benefit of the stock he purchased. That is, that The company’ having refused to buy the stock and having permitted Rubinstein to purchase and assume the risk of loss, m.ay not change its position and for the advantage of individuals, two of whom actively participated in the transaction, and the other of whom probably knew of it and did not disavow it until four years later, demand the stock for The company/ It, is my view of the testimony that, in borrowing from the Compaq and purchasing the stock, Rubinstein acted in good faith, and that Stanley Kasprzak and Veronica Kasprzak knew that Rubinstein was borrowing the money for such purpose on his own account. William Kasprzak was in the employ of the company and was at its place of business daily. While he was not at the meeting of August 26th, 1918, at which the sale of the stock was reported, he was a director of the company and knew that Walzak, Lingelbach, Olterzcwski and Tiarsche had been endeavoring to sell their stock, and that, having been directors, they ceased to hold such office, and he, himself, had been negotiating with Rubinstein for the sale of his own stock. He attended the annual meeting October 28th, 1918, at which he was elected a director and secretary, and as such secretary the minute book came into his possession. It does not seem probable that as an employe, stockholder, director and secretary, and as a brother of Stanley Kasprzak, he was not familiar with the proceedings of the directors and the minute record thereof, and did not know of the loan to Rubinstein, its purpose and its repayment. Under these circumstances, I do not consider it equitable for Stanley Kasprzak, William, Kasprzak and Veronica Kasprzak to insist that Rubinstein holds this stock as trustee for the company.”

      Messrs. Ward & McGinnis, for the respondent.

      Mr. William I. Lewis, for the appellants.
   Pee Curiam.

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

For affirmance—The Chiee-Justice, Trehciiard, Parker, Mikturk, Black, Katzenbach, Campbell, Lloyd, White, Uaedree, Vak Buskirk, Clark, Kays—13.

For reversal—None.


source: Caselaw Access Project

author: Pee Curiam.

license: Public Domain

text:
    William S. DeLisle, administrator, appellant, v. Samuel A. Reeves, respondent.
    [Decided May 19th, 1924.]
    On appeal from an order of the prerogative court advised by Vice-Ordinary Foster, who filed the following opinion:
    “This is an. appeal from an order of the orphans court of Monmouth county opening the decree made therein approving appellant’s account as administrator of his wife’s estate sustaining exceptions to the account, and directing appellant to restate or to further account for decedent’s estate.
    “Freni a stipulation entered into by counsel for1 the respective parties it appears that Mary E. DeLisle, the wife of the appellant, died intestate, at Allaire, in Monmouth county, on April 20th, 1919, and that the appellant was duly appointed and has acted as administrator of her estate, which consisted of $1,152.69 on deposit with a trust company, and $1,000 received from a policy of insurance upon her life.
    “On November 14th, 1913, one Olive M. Thomson recovered judgment against Mrs. DeLisle for $729.50 In 1915 this judgment was assigned to- Reeves, the appellee. On September 19th, 1919, Reeves filed with Lhe administrator his claim against Mrs. DeLisle’s estate for the amount then due on this judgment.
    ■ “On December 23d, 1919, appellant, as administrator, filed his account and his petition for its allowance, after duly advertising that the account would he presented on this date 'for settlement, and, no objection being made thereto, the account was settled and allowed by an order of the orphans court entered on January 15th, 1920. Some time in February, 1920, Reeves learned that the administrator has secured this settlement and allowance of his acoeunt without having included therein the claim filed by Reeves on his judgment, and without retaining any -funds of the estate for the payment of the same in whole or in part; thereupon Reeves, through his attorney, demanded the payment of his claim, and this led to prolonged and unsuccessful negotiations between the attorneys of the parties. In August, 1920, Reeves precented his petition to the orphans court reciting this situation, and asking that the- decree ap proving the administrator’s accounts be opened, a.nd that his claim, based on the judgment be paid as a preferred claim from decedent’s estate. A rule to show cause was issued, and on September 11th, and also' on September 18th, 1920, the orphans court made orders directing the opening of the decree approving the account, directing that the account bo restated so that it would include Reeves’ claim.
    “To these proceedings the administrator filed an answer, in which the jurisdiction of the orphans court to- open the decree approving his accounts was denied, and in which it. was further claimed that Reeves’ only remedy for the omission of his claim from the account and for its non-payment was by an appeal to this court from the decree of the orphans ' court.
    “In January, 1921, the administrator having failed to obey the order of the orphans court to restate his account, Reeves presented his petition to that court to have the administrator adjudged in contempt and such proceedings were had thereon, that on January 11th, 1922, an order was made by the orphans court sustaining exceptions to certain items for which the administrator claimed allowance: and directing the administrator to restate his account within fifteen days and to include therein the claim filed with him by Mr. Reeves. Thereupon this appeal was taken.
    “From the record it appears that the estate amounts to $2,152.69, and, in addition, the administrator appears to have advanced from his own funds $544.20, making the total estate for which he accounts $2,696.89, and this entire amount he claims to have disbursed, and insists he has nothing left from decedent’s estate from which the Reeves 'claim can be paid.
    “In a memorandum filed by Judge Lawrence in the or phans court, in connection with the order entered on January 11th, 1922, he sustains exceptioars taken by Mr. Reeves to certain items of the administrator’s disbursements aggregating $1,823.81. These items include undertakers’ bills of $818.81; board of nurse, $100; drugs and rubber goods, $80; 'automobile hire, $50; monument, $600; requiem masses, $175. Most of these expenses were disallowed because of Mr. De.Lisle not being insolvent was primarily liable for their payment, and particularly for the payment of his wife’s funeral expenses, and especially so where, as here, the decedent’s estate would be rendered insolvent by the allowance of these expenses. Authority for this determination is found in Gould v. Moulahan, 53 N. J. Eq. 341, and in the recent decision of Mr. Justice Trenchard, speaking- for the court of errors and appeals in Watt v. Atlantic Safe Deposit Co., 112 Atl. Rep. 186, and the; disallowance of the cost of the monument is supported by the doctrine of Griggs v. Veight, 47 N. J. Eq. 179.

    “The disallowance of these items is further justified on the ground that they were, as Judge Lawrence determined, unreasonable in amount, in view of the amount of the estate and of its possible insolvency, for, as stated in Griggs v. Veight, supra, so far as the record discloses, the monument was not suitable to the station in life and circumstances of the deceased, and reasonable with reference to the means of her estate.
    “Counsel have stipulated that the whole matter in controversy, including all collateral questions pertaining to this appeal and the accounting, and to the matters before the orphans court, are submitted to the jurisdiction of this court for decision.
    “The only questions presented for determination aro laches on the part of Eeeves in not more diligently pressing for payment of his claim, and I find nothing in the record to show any want of diligence on his part in this respect and the further question of the power of the orphans court to open its decree and to> direct appellant to re-estate his account.
    “This power of the orphans court is questioned, because Eeeves, in his petition to have the decree opened, does not allege that it was entered through fraud or mistake.
    “Tt is elementary that a court of record has sufficient control over its records to prevent them from working an injustice; it is also clear that it is the duty of the court to correct any-mistake of law or fact, both of commission and omission, and which is necessary to protect and enforce the rights of parties properly before it. Such was the situation before the orphans court when the order appealed from was made. Appellant’s account omitted, or suppressed, all reference to the claim of Eeeves. In ignorance of this fact, the orphans court in the ordinary course approved it. Reeves had no reason to bring his claim to the attention of the court; he had filed his claim with the administrator, and, in the absence of notice that it was disallowed or disputed, he was entitled to assume it would be allowed and paid on the final settlement of the estate.
    ■'‘When the administrator’s failure to include the Reeve» claim in his account was brought to the attention of the court, the order in question was then properly made to cure the mistake in the account occasioned by the omission at Reeves’ claim, and also for the disallowance of the items for funeral expenses and other disbursements mentioned therein.
    I have no doubt of the power of the orphans court, under the circumstances mentioned, to make the order appealed from, and I will advise that it be affirmed.”

      Mr. Thomas P. Fay, for the. appellant.

      Mr. Ward Kremer, for the respondent.
   Pee Curiam.

The order appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Ordinary Foster.

For affirmance—The Chief-Justice, Trek chard, Parker, Mihturn, Kalisch, Black, Katzenbach, Campbell, Lloyd, White, Gardher, Vah Buskirk, Clark, McGlehkon, Kays—-lñ.

For reversal—None.


author: Walker, Chancellor.

text:
    Edwin Bobert Walker, Chancellor.
    Edmund B. Leaming, Vivian M. Lewis, John H. Bacices, John Grieein, John E. Poster, Malcolm G. Buchanan, James P. Pielder, Alonzo Church, Bobert H. Ingersoll and John Bentley, Vice-Chancellors.
    Eugenie S. Smith, complainant, v. L. Roberts Walton et al., defendants.
    [Decided August 7th, 1924.]
    1. The time for filing an appeal from a decree cannot be extended by the chancellor after the expiration of the time limited by law for taking such appeal, because upon the expiration of that time the rights of the successful party to the litigation become vested, and an act of the legislature which would permit the chancellor to extend the time after it has expired is, to that extent, unconstitutional.
    2. Affidavits should state facts only, and not characterizations and conclusions.
    On application to extend time for taking and filing appeal.

      Messrs. King & Yogi, for the applicant.

      Mr. Samuel C. Meyerson and Mr. Charles A. Rathbun, contra.

   Walker, Chancellor.

This was a suit for specific performance of contract to convey land acquired by the defendant L. Roberts Walton, at sheriffs sale on foreclosure, the complainant, Mrs. Smith, claiming right to a conveyance from defendant under a certain contract. After hearing, the bill was dismissed by decree made January 17th, and filed January 19th, 1924. The time for appealing, a Us pendens being filed, expired three months afterwards—that is, on April 18th, 1924. No appeal having been filed within the six months, the -complainant now applies to this court -to- extend the time for appealing.

The Chancery act (Comp. Stat. p. 450 § 111) provides that an appeal from a decree shall be made within one year of making such decree unless a notice of lis pendens has been filed, in which case appeal from the final decree shall be made within three months after the filing of the same. Identically the same provision as to appeals is to be found in the Lis Pendens act. Comp. Stat. p. 3175 § 8. In 1914 the legislature passed an amendment to the Chancery act, wherein a proviso was added to section 111, that in cases where final decree had theretofore been filed,' or might thereafter be filed, the chancellor may, in his discretion, by order made not more than ■ six months after the time therein limited for making 'an appeal, extend the time of the appellant for making his appeal, for a period not exceeding six months from the expiration of the time so limited. P. L. 1914 p. 133. This act was construed by the court of errors and appeals in Plahn v. Givernaud, 85 N. J. Eq. 143, wherein Chief-Justice Gummere, writing the opinion,. said., (at p. 146): “We are not to be understood as denying the power of the legislature to extend the time of appeal before . that right had expired by limitation. What we do determine is that a statute like that, which we have been discussing, is unconstitutional, so far as it operates to revive a right of appeal after it has expired under then existing law, and property rights have thereby become vested.”

It is true that the act of 1914 was passed after the time,, for appealing had expired in the Plahn Case, which statute was by express words made retroactive; but, simply because , this statute was in force when the decree in the case at bar was made, it is, nevertheless, to be said, that the decision referred to is applicable here, because the right of the defendant as against the complainant under the final decree in this cause became a vested right in him upon the expiration of the time limited for appeal, and no appeal taken.

Counsel for defendant in their brief concede the right of the chancellor in the exercise of discretion to permit of an extension of time in which the complainant may appeal, but they object to the granting of the extension in this case-upon factual grounds. While it may be'that the leave requested should not be extended because of the facts adverted to in the brief, nevertheless, I am of the opinion that leave-should be withheld because of the existence of defendant’s vested rights, as an act of the legislature which would permit the chancellor to extend the time after it has expired is, to-that extent, at least, unconstitutional.

Another thing, an affidavit by the defendant L. Eoberts Walton, is submitted on this motion, and it abounds in characterizations and conclusions. He says inter alia ■" “The only reason she [complainant] is prosecuting this appeal is an attempt to get an extra $6,000 out of the people-to whom she has sold the pro-perty, and not because she thinks she has any just right of appeal whatsoever.” And again:, “The petitioner allowed me to go- ahead and spend all my .money', leading me to believe that she knew she had' no ■claim ,npon me, but after I had spent thousands of dollars in improving, property, then she thought she would -try to take this away,” &c. It is hard to conceive how a man can bring himseljC to swear as a fact what the thought and motives ■of another person are, or, more properly speaking, may be. Such speculations may be properly indulged in by counsel in the way of argument to be deduced from the facts, but affidavits. should concern themselves only with actual facts and not with speculation. See In re McCraven. 87 N. J. Eq. 28.

The application to extend the time for filing an appeal in this case is denied for the reason above expressed.


text:
    John Goodavage, complainant, v. State Highway Commission, defendant.
    [Decided August 16th, 1924.]
    \vnere the state highway commission appropriates land or rights -therein, incident to the maintenance or improvement of a highway, without first compensating the owner therefor, his remedy is not in equity for injunction to stop the work, but at law for mandamus to ■compel condemnation of the property.
    .On bill, &c. On application for preliminary injunction. ■

      Mr. Frank 8. McKee, for the complainant.

      Mr. ■ Edward L. Katzenbach, attorney-general, and Mr. Harry B. Coulomb, assistant attorney-general, for the defendant.
   Walker, Chancellor.

The complainant is the owner of a tract of farm and meadow land in Millville, binding upon Second street. The state highway commission has been for some time last past engaged in building, grading and paving that' street. At a point in the frontage of complainant’s land, along Second street, the defendant has commenced to build a water catch-basin, and to lay a drain pipe from that basin to collect drainage and surface water from a large area of South Mill-ville. < Complainant alleges that it is the intention of the state highway commission to divert and cast all of said waters in large quantity from the pipe on and over his land, and claims that his private property is intended to be used for the installation of the catch-basin and discharge pipes; that as a result of the grading, building and paving of the road, large quantities of surface water are being allowed to collect and flow on his land, the flowing of water having already caused washouts and displaced earth, &c. And he prays that the state highway commission may be enjoined from constructing any of its works upon his land, and also from casting accumulated water thereon.

Defendant admits that the water collected by this scheme will be discharged upon complainant’s property, and asserts that the question is as to defendant’s right to do that thing. One matter of defense relied upon is that the complainant has given permission for the doing of the work. It is in proof that, in writing, dated March 21st, 1923, and signed by the complainant, he granted the highway department permission to widen the fill on his property in accordance with stakes placed by the highway department. And the defendant argues from this that the complainant is estopped from demanding that the state shall not discharge the water in a pipe laid through the fill on his land. Defendant denies that the consent has any such effect. But what, if any, bearing this particular document may have upon the case at bar need not be decided, because in my judgment the remedy of the complainant is by a suit at law for a mandamus to compel the highway commission to condemn such of his land as it has entered upon and appropriated, if any, and such rights thereon as it proposes to acquire, and not for an injunction in this court.

By P. L. 1919 p. 523 § 12 (e), the state highway commission has power to acquire any lands or mghts Iherewv by condemnation, if necessarjq and has the power to enter upon and take property in advance of making compensation therefor in any case where it cannot acquire land or other prop~ erty by agreement with the owner.

It is true there is no proof in this case showing that the state highway commission endeavored to agree with the owner as to compensation for rights to be acquired in his land, neither was there in the Haycock Case, infra, any such showing. Assuming, as I think I must, that the defendant took possession of complainant’s property without endeavoring to agree with him as to just compensation therefor, nevertheless, the complainant’s remedy is by mandamus, to require defendant to take proper proceedings to condemn. Haycock v. Jannarone (Court of Errors and Appeals), 122 Atl. Rep. 805. See, also, 20 C. J. 1158.

Now, in the Haycock Case, the pdaintiff sued for damages arising from the alleged fact that the state highway commission, in the improvement of a highway on which the lands of the pdaintiff abutted, had encroached upon his private property. That fact was in dispute, but it was pointed out by the court that that question could be tried before the jury on condemnation proceedings. There, as here, there had apparently been no attempt to agree with the owner in advance.

Ward v. Peck, 49 N. J. Law 42, was a suit for damages brought against the defendant for the opening on the property of the plaintiff of a ditch for the purpose of carrying off water from a public roach It was assumed by the supreme court that the defendant was clothed with the power of an overseer of the highways, and did nothing but what he was warranted in doing by section 45 of the General Road law, which authorized him to enter lands adjacent to highways, and to cut,- make, &c., gutters, drains and ditches, sufficient to convey or draw off water from the highway, and the owner was prohibited from filling up or obstructing such gutters,, drains or ditches. Chief-Justice Beasley, speaking for the supreme court, said (at p. 48) that there could be no doubt, that such an appropriation of land was a taking of private property for public use; that by laying the drain, the public acquired a right to a perpetual easement in the property burdened, and the owner pro tanta was deprived of his property. And he said (at p. 44) that under the prevalence of ancient law, compensation was not to be made for such appropriation, but by section 16 of article 1 of the constitution of 1844, the ancient jus publicum, to seize the property of the citizen without rendering to him its value, had been entirely abolished in this state,

Now, the act authorizing the state highway commission to-acquire any land or rights therein is very like the provision of the Road act, except that the Highway Commission act, supra, unlike the Road act reviewed in the Ward Case, provides for making compensation to the owner. And the means-of compelling the taker to inaugurate proceedings for condemnation, which in turn provides for compensation, is as pointed out in Haycock v. Jannarone, supra.

This is not a case in which an unauthorized person proposes, to collect surface water from channels in which it is used to flow, and cast it in unusual quantities upon the complainant’s land to his damage, to prevent which an injunction will go, but it is a case for damages against an agency of the state,, authorized 'by law to make appropriation of lands and rights therein for public purposes, making compensation therefor. And, as the complainant has an adequate remedy at law,, equity will not interfere by injunction to aid him.

The application for preliminary injunction will be denied..


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    Della Brown, petitioner, v. John Brown, defendant.
    [Decided August 25th, 1924.]
    Bor a party to a habeas corpus proceeding to remove the person who is the subject of the writ out of the jurisdiction of the court is an obstruction of the course of justice, and, as such, a criminal contempt (indictable a-t common law) ; and a proceeding to punish such a contempt is not a step in the cause itself, but should be made the subject of an independent proceeding, proper notice of which must be served upon the defendant within the State of New Jersey in order to clothe this court with jurisdiction to try the contempt.
    On petition, &c. On order to show cause why defendant should not be adjudged guilty of contempt of court and punished therefor.

      Mr. Robert Queen, for the motion.
   Walker, Chancellor.

This is a case on habeas corpus concerning the custody of an infant child of the above-named parties (petitioner and defendant), who are husband and wife. The writ was served on the defendant, who appeared and produced the child on the return day. Thereafter its custody was awarded to third persons, who were relatives, and who had been made parties to the suit. Prior to that, defendant apparently became a fugitive from justice, and afterwards had the child removed from this state to his place of abode on Staten Island, Few York, where he was served with a copy of the order to show cause in this ease. I say “apparently” because the affidavits tending to prove the facts recited are principally hearsay, which is not legal evidence. In re McCraven, 87 N. J. Eq. 28. However, the conclusion at which I have arrived permits me to assume that defendant has removed the child beyond the territorial limits of New Jersey.

And I assume, too, and am of opinion, that if the defendant in a criminal contempt case is served with due and proper notice of the proceeding against him within the jurisdiction of the court, and does not appear either in person or by counsel, but makes default, he may be condemned on ex parte affidavits, notwithstanding anything that was said in the Staley Gase, infra, for it was also said in that case, concerning the rights of a defendant charged with criminal contempt (83 N. J. Eq. 305), that one of those rights was that the facts by which his guilt is to be determined shall be established by the oaths of witnesses subject to cross-examination and impeachment, unless the accused either expressly or Toy implication waived the right, as to which point nothing was decided.

Now, for the court to sit and hear oral testimony, when defendant is absent through default after due and legal notice, and is not represented by counsel, would be but an idle gesture, as there would be no one to cross-examine the witnesses or to impeach their credibility; provided, however, that the affidavits had been duly served upon defendant and were in and of themselves legal evidence. Defendant, being absent, would have a right to reply on being condemned by legal evidence only. In re McCraven, supra. If the affidavits did not, by legal evidence, make a case against him, the defendant could absent himself with confidence that there would be an entire failure of proof. Butts v. French, 42 N. J. Law 397, 400.

This court having jurisdiction of the cause, and of the parties, it was a contempt in the defendant to remove or cause to be removed out of this state the subject-matter of the 1'itigation, namely, the child. 13 Corp. Jur. 9. And-this is a criminal contempt, namely, one against the power, authority and dignity of the court—one which is an offense against organized society itself. Staley v. South Jersey Realty Co., 83 N. J. Eq. 300. If it were a civil contempt, that is, the refusal to obey an act commanded for the benefit of the petitioner, a proceeding remedial in character (Ibid. 304), I think there could be no doubt of the legal efficacy of the service of the order to show cause out of this state. In such ease it would be but a step in the ease, and, defendant being in court, the manner of service, including time and place and whether within or without the state, could be directed by the court, as is the constant practice. This view appears to be supported by the court of 'errors .and appeals in White v. White, 65 N. J. Eq. 741. But, as already remarked, this is a criminal contempt, and the law in such case is that the contempt proceeding is not a step in the private litigation in which it occurs. In re Merrill, 88 N. J. Eq. 261 (at p. 267), I said that it seems that such proceeding should not be framed and treated as part of the civil cause. Upon further consideration I am of opinion that it should be an independent proceeding.

In the case at bar the contempt proceeding has been framed in the cause between the parties, but cannot be so treated, and it should have been entitled In re Brown, &c., as was done in the Merrill Case. Being a separate proceeding it had to be started de novo, and that required a, proper notice, that is, process to compel the defendant’s appearance. Such process need not be a writ, but may be an order to show cause, as in this case. See In re Martin, 86 N. J. Eq. 265, 274 And such process must be served within this state to lawfully initiate a proceeding against a person charged with criminal contempt of court.

In Pennoyer v. Neff, 95 U. S. 714; 24 L. Ed. 565, Mr. Justice Field, speaking for the United States supreme court (24 L. Ed. 572),n observed that since the adoption of the fourteenth amendment to the federal constitution, in legal proceedings, if involving merely a determination of the. personal liability of the defendant, he must be brought within the court’s jurisdiction by service of process within the state, or by his voluntary appearance. And that is this cause—the defendant here is sought to be visited with a penalty either by fine or imprisonment, or both—a purely personal liability. Furthermore, as we have seen, this is a new suit, and not a step in the original proceeding. It, therefore, comes squarely within the rule of Pennoyer v. Neff, above recited. It has been held in this state that a decree for alimony which is one in personam is void unless the defendant was served with process within this state. McGuinness v. McGuinness, 72 N. J. Eq. 381, 386.

An indictment lies at common law for a criminal contempt of court (1 Russ. Cr. (7th ed.) 10, 537), and the criminal character of the act in the ease before me, namely, one obstructing the course of justice, clearly indicates that the proceeding for its punishment is one calling for an independent proceeding, dissociate from the civil proceeding in which the offense was committed. The case of Gompers v. Buck Stove and Range Co., 221 U. S. 418; 55 L. Ed. 797, holds (55 L. Ed. 807) that where the’ sentence for a contempt is wholly punitive it can only be properly imposed in a proceeding’ instituted and tried as for a criminal contempt. See, also, Staley v. South Jersey Realty Co., supra (at pp. 306, 307).

The views above expressed lead to the discharge of the order to show cause.


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    In the matter of the dissolution of the New Jersey Refrigerating Company.
    [Decided September 12th, 1924.]
    1. The J. J. R. S. Co. bid $550,000 at private sale for certain property in the hands of receivers, $25.000 to be paid upon the execution of the agreement for sale, $193,583 on the delivery of the deed, and the balance, $331,417, being the amount outstanding and unpaid on a mortgage, and subject to the lien thereof: real estate broker’s commissions to be paid by the receivers. On order to show cause why that sale should not be confirmed, C. T. B. bid $560,000, without payment of brokerage by receivers, whereupon they Were ordered to advertise the property for sale at public auction, which they did, and C. T. B. bid thereat the sum of $625,000. The cash for the eciuity of redemption in the J. J. R. S. Co.’s bid at private sale being $191,750, after deducting broker’s commissions, and that in C. T. B.’s bid at public sale being $293,000, making a difference of $101,250 in favor of the C. T. B. bid, being over fifty-two percent. excess. Held, that the great dispárity in the bids (over fifty-two per cent.), and the great amount of that disparity, namely, over $100,000, showed that the J. J. R. S. Co.’s bid at the private sale was so grossly inadequate, iconsidering what the property was. worth, as to call for a denial of confirmation of J. J. R. S. Co.’s bid. and to require confirmation of the C. T. B. bid.
    2. On the return of the order to show cause why the .J. J. R. S. Co.’s bid should not be confirmed, a member of a foreign bar-assumed to represent the bidder, but as he was not associated' with any member of the New Jersey bar as solicitor of record, he was not, under our rules, entitled to he introduced pro hae vice, and as he had no audience before this court, the J. J. R. S. Co. was not represented.
    3. On the sale of property in the hands of receivers the intervention of a broker may or -miay not be necessary. In passing upon such employment the test on the question of compensating the agent out of the estate is, Wlas it necessary, or was it to the interest of the estate? If it was, t'he reasonable expenses thus incurred are-allowed ; if not, they are disallowed.
    4. On the facts of this case—Held, that it is neither necessary nor proper to decide whether broker’s commissions should be allowed ;- that question is referred to the receivers. Semble, that if the broker be aggrieved by their determination, the claim being against a corporation which has been dissolved and is in process of being wound up, his remedy would be by suit at law instead of by appeal to the-chancellor.
    On bill, &e. On petition for confirmation of sale tediarles T. Brown.

      Mr. J. Henry Harrison, for the receiver.

      Mr. Edward, Maxson, for Reilly Stevedoring Company, Inc., and Samuel Lesser.

      Messrs. Perkins & Drewen, for Thomas A. Lembeck and Sarah Lembeck, stockholders.

      Messrs. Fisk é Fisk, for Ida L. Bowen, stockholder.

      Mr. Merritt Lane, for certain other stockholders.
   Walker, Chancellor.

On July 17th, 1924, an order was made in the above-stated cause that Prank J. Bock and Edward H. Wright, receivers of the defendant corporation, be directed, subject to the approval of this, court, to negotiate and enter into a contract for the sale of certain’property of the defendant company (describing it). In pursuance of this order the receivers issued invitations for bids, and in response received sealed bids, one from the John J. Reilly Stevedoring Company, Ine., which appeared to the i eceivers to be the highest, and it was accepted and a contract entered into between them and the company, July 31st, 1924, which contract recited that in consideration of $550,000 they agreed to sell to that company the property, describing it, $25,000 to be paid upon the execution of the agreement, $193,583 on the delivery of the deed, and the balance of $331,417, being the amount outstanding and unpaid on the mortgage, and subject to the lien thereof. The agreement contained a clause that settlement should be made ninety days after the approval by this court of the terms of the contract, and it contained this stipulation:

“It is hereby understood and agreed that Samuel Lesser is the broker who effected this sale, and, said parties of the first part Lthe receiver] hereby agree to pay said broker a commission of five (5) per cent, for the sale of the’plant and a commission of two and one-half (2%) per cent, for the’ sale of the other parcels, or suc-h other commission as may be approved by the court of chancery, if and when this sale is consummated and the purchase price paid.”

And contained this still further provision:

“And it is further agreed that this agreement is made subject to the approval of the court of chancery of New Jersey, and-shall be consummatedi in accordance with the statutes in such case made and provided, and under the direction of the said court of chancery.”

On August 19th, 1924, an order to show cause why the receivers should not consummate the sale of the property in-eluded in the agreement of July 31st with the John J. Reilly Stevedoring Company, Inc., for the gross consideration of $550,000, and why the receivers should not be directed to pay the real estate broker who negotiated the sale the commissions mentioned in the agreement, was returnable, having been served upon the stockholders of the defendant company and the Commercial Trust Company, the mortgagee trustee, and Charles T. Brown, in open court, having offered to pay the sum of $560,000, without brokerage, for the property, an order was entered that the agreement of sale of July 31st, 1924, be not then consummated and that no commissions be then allowed to the broker who effected said contract; and it was further ordered that the receivers advertise for sale at public auction on Thursday, August 28th, 1924, the real estate and personal property-referred to and more particularly described in the petition filed August 2d, 1924, and the above-mentioned order.to show cause made thereon, and that they be directed, subject to the approval of this court, to enter into a contract with the purchaser at that sale, and report the same for confirmation on Tuesday, September 2d, 1924. And now, on the return of the last-mentioned order to show cause, the receivers, on notice to the parties interested, report that pursuant to the order of August 19th, 1924, they offered the property for sale at public vendue, conrprising the plant of the defendant company and other property therein described, and that Charles T. Brown then and there bidding the sum of $625,000 for the premises, and no one bidding so much, or more, for the same, the propeity' was struck off and sold to him for that sum, he being the highest bidder therefor. The conditions of sale were that the property comprisiúg tire plant would be sold subject to the mortgage bond issue, on which there was then due approximately $332,000, that the successful bidder would be required to sign a contract, subject to the approval of this court, which contract was signed and annexed to their report.

The cash for the equity of redemption under the Reilly bid at private sale, reported August 19th, 1924, is $191,750, and that of the Brown bid, at public sale, reported September 2d, 1924, is $293,000, making a, difference of $101,250 in favor of the Brown bid, being over fifty-two per cent, excess.

On August 19th, 1924, on the return of the order to show cause, and when the bid of the John J. Reilly Stevedoring Company, Inc., was reported, that concern was represented by a New York attorney, who was not associated with any solicitor of our state, and, having no audience in our courts, he could not be introduced pro hac vice. The order of that date calling for a resale at public vendue was not opposed by anyone who had standing before the court.

The Reilly Stevedoring Company did not bid at the public sale, but was represented before the court on September '2d, 1924, by counsel on the return of the order to show cause and the report of the' receivers of the sale of August 28th, 1924, and insisted that that company’s bid, reported on August 19th, 1924, should be confirmed, instead of the Brown bid, reported on September 2d, 1924.

Reliance for this position is principally rested upon the doctrine of Morrissee v. Inglis, 46 N. J. Eq. 306; Rogers v. Rogers Locomotive Co., 62 N. J. Eq. 111; Bethlehem Iron Co. v. Philadelphia, Seashore Railroad Co., 49 N. J. Eq. 356, to the effect that mere inadequacy of a bid, if the sale is regular, and made without fraud, and where no accident or mistake has intervened to prevent fair competition, will not warrant the court in setting it aside and ordering a resale, and depriving the bona fide bidder of the advantage of his bid, because it is the policy of the law to encorrrage the attendance of bidders at judicial sales.

Coimsel for the receivers contends that this case does not come within the rule laid down in the eases cited, because those cases refer only to public sales, and not private ones, and because the difference in the price in this case is so far greater than those in the others. The excess offered in Morrissee v. Inglis was approximately ten per cent.; in Rogers v. Rogers Locomotive Co., approximately ten per cent., and in Bethlehem Iron Co. v. Phila. Seashore Railroad Co., app-roximately twenty per cent.,.while here it is approximately fifty-two per cent.

But in Porch v. Agnew Co., 66 N. J. Eq. 232, Vice-Chancellor Grey had before him a sale of property which brought $33,000, when it appeared it was actually worth $60,000 to $100,000, and he ordered a resale, making it a condition that at least $60,000 should be bid at the subsequent sale as an up-set price. This case was affirmed on the opinion of the vice-chancellor. Porch v. Agnew Co., 67 N. J. Eq. 727.

The case in hand is more nearly like that of Porch v. Agnew Go. than it is like Morrissee v. Inglis, Rogers v. Rogers Locomotive Co., or Bethlehem Iron Co. v. Philadelphia Seashore Railroad Co. And the very great disparity in the bids, over fifty-two per cent., would incline me to the opinion that the Reilly Company’s bid at private sale was so grossly inadequate, considering what must be the value of the plant, as to call for a denial of confirmation of the sale to Reilly, and, on the contrary, the confirmation of that to Brown, especially in view of the very great amount of disparity, namely, over $100,000.

Furthermore, the Reilly concern has not been diligent in its own. behalf, in that it did not protect its interests on August 19th, 1924, by appearing and urging confirmation of the sale to, and agreement with it, as reported. Besides, its bid and contract was, by the agreement, expressly made subject to the approval of the court. Upon this phase of the matter I am of opinion that the bid of the Reilly Stevedoring Company, Inc., should be rejected, and that of Charles R. Brown confirmed, and the receivers ordered to make conveyance to him according to the terms of the contract between them and him upon his complying with the terms of sale.

One other matter remains—that concerning the claim of Samuel Lesser for commissions for negotiating the sale to the Reilly Stevedoring Company, Inc. His counsel contends that he rendered laborious, time-consuming and- valuable service to the receivers in bringing about the offer and tentative sale to the Reilly concern, which ultimately resulted in benefit to the estate, citing Dey v. Codman, 39 N. J. Eq. 258, 268.

In Hill v. Hill, 79 N. J. Eq. 521, Judge Rellstab, in the orphans court, whose opinion is printed as an appendix to that of Pitney, Ordinary (at p. 545), said (at p. 546), that “on a sale of the testator’s land the intervention of a broker may or may not be necessary. If not necessary, the brocage paid will not be allowed unless it can be shown that by emplojdng a real estate agent the estate has been benefited in a pecuniary sense to at least the amount of expense incurred by such employment.” And (at p. 547), that “in passing upon such employment, the test on the question of compensating the agent out of the estate is, Was it necessary or was it to the interest of the estate? If it was, the expenses thus incurred are allowed; if not, they will be disallowed. Upon this question the burden of proof is upon the accountants. Por New Jersey cases on this subject see 3 N. J. Dig. Ann., Div. Ex’rx & Ad’mrs 92. And for cases in other states, see 7 Am. & Eng. Encyc. L. 431; 18 Gyc. 272, and cases noted in 64 L. R. A. 554." And Chancellor Pitney, in his opinion in the prerogative court (at p. 542), said that upon the question of broker’s commissions he concurred in the views expressed by Judge Rellstab.

Receivers, like executors, are trustees; the same law generally and in similar circumstances applies equally to all of them. In this case the receivers’ circulars offered to pay a commission to real estate brokers who represented successful bidders, if and when the sale was consummated and the purchase price paid, and the contract of the receivers with the Reilly concern' stipulated that Lesser was the broker who effected the sale, and the receivers agreed to pay him a certain commission named, or such commission as might be approved by the court, if and when the sale was consummated and the purchase price paid. Mr. Lesser was not a party to that contract but it was one made for his benefit, and on which it appears he is entitled to sue. Burt v. Brownstone Real Estate Co., 95 N. J. Law 457. And the supreme court held, in Klipper v. Schlossberg, 96 N. J. Law 397, that unless a broker and his employer have stipulated to the contrary, the broker is entitled to his compensation upon the completing of the negotiations he undertook, irrespective of whether or not the contract negotiated is ever consummated, so long as the failure to carry it through to a successful completion is not due to any fault of the broker. It may be that the broker is entitled to be compensated in this case, but this question it is neither necessary nor proper now to decide. Pie should make his claim to the receivers in the usual way, whose duty it would then become to allow or disallow it. He will be given ten days in which to file his claim with the receivers. If he* should be aggrieved by their determination, the claim being against a. corporation which has been dissolved and isi in process of being wound up, it scejns that his remedy would be by suit a.t law, under P. L. 1921 p. 724 instead of by appeal to the chancellor under Comp. Stat. p. 1640 § 78.

The sale to Brown will be confirmed; Lesser’s claim for compensation in negotiating the Reilly sale will be- referred to the receivers. Order accordingly.


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    Thomas Niland and Katherine Niland, petitioners, v. Eleanor Patricea Niland and William J. Swift, defendants.
    [Decided October 30th, 1924.]
    1. The amendment to the Crimes act (P. L. 1921 p. J/S) is unconstitutional in so far as it makes a marriage void.
    2.. A marriage is not void because it is solemnized without the consent of the parents of one of the parties who is under age.
    3. A suit to annul a marriage may only be brought by one of the spouses.

      4. ,Tlie parents of a child filing a petition for nullity of her marriage will be given an opportunity to show cause why the petition should not be dismissed, because they have no standing to file it or to prosecute such a cause.
    5. Where the court lacks jurisdiction to ¿rant the relief prayed,- the bill or petition may be dismissed at any stage of the proceedings.
    On petition for nullity of marriage.

      Mr. William B. Stiles, for the petitioners.
   Walker, Chancellor.

This is a petition by a father and mother praying for a decree of nullity of marriage between the defendants, their daughter, Eleanor Patricea Niland and William J. Swift. The cause for action is alleged to- be that their daughter went through a pretended ceremony of marriage with Swift at Jersey City, on August 3d, 1924; that at the time thereof the daughter Eleanor was under the age of eighteen years, to wit, was seventeen years and four months old, and that the marriage was against the will of petitioners, her parents, and without their consent, and that Eleanor was taken from their possession, custody and governance by Swift against their will, without their knowledge- or consent, and with intent to contract matrimony with her. It is apparent that the case is brought and sought to he prosecuted under “An act to amend an act entitled ‘An act for the punishment of crimes’ (Revision of 1898), approved June 14th, 1898,” passed March 1st, 1921. P. L. p. 43. But in Robbins v. Lanning, 98 N. J. Eq. 262, I held that so much of that act as provides that every marriage contracted in the circumstances made a misdemeanor by it is void, because violative of article 4-, section 7, paragraph 4 of the constitution, which provides that every law shall embrace but one object, and that shall he expressed in the title. Hence, this action will no-t lie for that reason.

The act of March 1st, 1921 (P. L. p. 43), being unconstitutional in so far as it renders a marriage void, the marriage of these parties is not- void, for the reason asserted by the petitioners—that is, because their daughter was- under the age of eighteen years and the marriage was solemnized without their consent. Formerly, the person authorized to solemnize marriage, who married a minor without the consent of parents or guardians, was liable to a penalty under the statute, but now, as persons cannot be married in this state without a license first had and obtained, the penalty is visited upon an authorized person solemnizing the marriage without the presentation of a license, except in certain cases, in which the instant case is not included. Fodor v. Kunie, 92 N. J. Fq. 301 (at pp. 305, 306).

Furthermore, no third party or parties have any standing to bring a suit to annul a marriage. Such a suit may only be brought by one of the parties thereto. This is the first petition that I have ever encountered in which parents of a married person have assumed to bring a suit for nullity of their child’s marriage. There is absolutely no precedent for such a suit as this. The remedy of divorce (and equally of. nullity) and the right to seek it belong exclusively to one or the other of the spouses. 19 Corp. Jur. 98.

The clerk in chancery has asked me if he shall issue a citation on the petition in this case. I have instructed him not to do so, and am minded to dismiss the petition of my own nmtiom at this stage of the proceedings. Where the court lacks jurisdiction to grant the relief prayed, the bill or petition may be dismissed at any stage of the proceedings. Philadelphia Trust Co. v. Merchantville, 74 N. J. Eq. 330. But, as it is a general principle that no person shall be condemned unheard, I am of opinion that I should give the petitioners an opportunity to show, if they can, why they should be permitted to prosecute this cause, a. right to do which they have asserted by the- filing of the petition. In Hess v. Cole, 23 N. J. Law 116, Chief-Justice Green observed (at p. 124) that it is an inflexible rule of law, as well as the clear dictate of justice, that no man shall be deprived of his rights without an opportunity of being heard. See, also, In re Marlin, 86 N. J. Eq. 265.

The petitioners will be given fifteen days from the filing of this opinion in which to show cause why it should not be dismissed.