author: Van Syckel, J.

text:
    Samuel H. Grey, attorney-general, ex rel. Henry P. Simmons et al., complainants and respondents, v. The Mayor and Aldermen of the City of Paterson, defendants and appellants.
    [Filed March 19th, 1900.]
    1. The city of Paterson had legislative authority to construct its system of sewers, discharging their contents into the Passaic river, and is not, therefore, subject to the charge of maintaining a public nuisance.
    2. The title of riparian owners along Passaic river, where the tide ebbs and flows, extends only to high-water mark, the state is the absolute owner of the bed of the stream. Such riparian owners having no title to the bed of the stream are not entitled to an injunction against the city on account of the pollution of the stream.
    3. The title of riparian owners above the ebb and flow of tide extends to the middle of the stream, subject only to a servitude to the public for purposes of navigation. The pollution of the river by sewage constituted the taking of the property of such owners, which the legislature cannot authorize except upon just compensation,
    4. Jersey City has no rights in the waters of the Passaic river distinct from the rights of the general public, either by reason of the location of its water works or in virtue of the act of 1852. P. L. of 1858 p. 419.

    5. By reason of the great injury which would fall upon the city by restraining the continuous use of its sewerage system, and the acquiescence of these riparian owners above where the tide flows, their injury being comparatively small, it would be inequitable to grant them an injunction.
    6. They may obtain redress by amending their bill, or by filing a new bill praying for an injunction, unless the city of Paterson will consent to make such compensation to them as shall be-ascertained to be just; or tLey may, if they elect, sue at law for their damages.
    On appeal from a decree of the chancellor, whose opinion is reported in Attorney-General v. Paterson, 13 Dick. Ch. Rep. 1.

      Mr. Thomas C. Simonton, Jr., and Mr. Eugene Stevenson, for the appellants.

      Mr. Samuel II. Grey, attorney-general, McEwan & McEwan, Mr. James B. Vredenburgh and Mr. J ohn P. Stock Ion, for the respondents.
   The opinion of the court was delivered by

Van Syckel, J.

The information and bill of complaint in this case was filed by the attorney-general, on behalf of the state at the relation of owners and possessors of lands along the banks of the Passaic river, to restrain the city of Paterson from depositing or discharging its sewage through its drains or sewers into the Passaic river and from constructing new sewers to discharge into said river and from enlarging or increasing its present sewage system with outlets into said river.

Thereupon an order to show cause was granted why an inj unction should not issue as prayed for in said information and bill.

Upon the hearing of this order affidavits were presented by the defendants.

To the information and bill the city interposed a demurrer.

Upon the 28th day of March, 1899, the chancellor overruled the demurrer and ordered an injunction, in which order it is recited “that upon reading the information and bill of complaint and the affidavits annexed thereto, and upon reading the demurrer of the defendants to the said information and bill and the affidavits presented by the defendants upon said order to show cause, the chancellor being of opinion that the defendants’ acts in discharging sewage into the Passaic river in the manner set forth in said information and affidavits constituted a public nuisance: it is ordered that an injunction do issue enjoining and restraining the mayor and aldermen of the city of Paterson, until the further order of said court, from discharging sewage or permitting sewage to be discharged, directly or indirectly, into the Passaic river, above tide water through any public sewer or sewers of said defendants, constructed or to be constructed, which do not now discharge directly or indirectly into said river.”

From the order overruling the demurrer and also from the order for injunction an appeal was taken to this court.

The affidavits therefore which were considered by the chancellor in making the order for injunction are part of the case as presented by the appeal to this court.

In 1867 the legislature passed a supplement to the charter of the city of Paterson, by the seventeenth section of which it is provided:

“That the mayor and aldermen of the city of Paterson are hereby authorized to cause such surveys, maps and returns to be made, as may be necessary to enable them to prescribe and adopt, either for the whole or any part of said city, the location of streets and sewers, or either, and the width thereof, hereafter to be opened or constructed therein, and when such location, width and grade shall be adopted, the surveys, maps and returns, prescribing and defining the same shall be recorded in the clerk’s office of the county of Passaic, and thereupon no street or sewer shall thereafter within the district comprised in any such survey, map or return be opened or constructed, except in conformity therewith as to location, width and grade, and fully to accomplish the purposes contemplated by this section, the said mayor and aldermen may employ such engineers, surveyors and other persons, and provide for their compensation and pass such ordinances as they may deem to be proper, and may enter upon any land for making surveys and examinations.” P. L. of 1867 p. 658 § 17.

It appears by tbe affidavits that in. January,. 1868, Gen. Viele presented a map and report of the city for a general system of sewerage. The map and report were referred to a joint committee of streets and finance to ascertain what legislation would be necessary to enable the city to proceed with the work.

Thereupon, under the direction of the public authorities, an act was drafted to enable the city to construct its sewers.

On the 26th of Eebruary, 1868, an act of the legislature was passed entitled “An act to authorize the construction of sewers and drains in the city of Pater son.”

The second section of this act provides:

“That all such sewers and drains shall be constructed in conformity with the plans thereof adopted, or which shall be adopted by said mayor and aldermen, pursuant to the 17th section of the act approved April 4th, 1867, entitled ‘A further supplement to the act entitled “An act amending and revising the act to incorporate the city of Paterson.” ’ ”

By the said act the city was authorized to enter upon any lands for the purpose of making surveys and examinations, and to use the ground and soil under any street, highway, railroad, lane, alley or court within the city for the purpose of constructing the works contemplated by the said act.

By the last section of the said act it was declared that it should take effect immediately and be deemed to be a public act. P. L. of 1868 p. 126.

Under the sanction of this legislation a number of sewers, which are now part of the sewer system of the city, were constructed.

By an act passed in 1871 (P. L. of 1871 p. 80S), the city charter was revised and therein the power to construct sewers was continued. By the said affidavits it appears that all the sewers constructed under this legislation discharged into the Passaic river, and that at least up to the year 1872 the only system of constructing sewers which had been adopted in this country was by building them underground, with the outlet into the natural water course on the banks of which the city was built.

From this recital I think it sufficiently appears that the city of Paterson had legislative authority to construct the system of sewers the use of which the complainants seek by their information and bill to restrain. Full power was conferred by this legislation upon the city of Paterson to adopt and execute its own plan of sewerage so far as the rights of the state were concerned.

If the power inhered in the legislature to bestow such authority upon the city, it is the settled law of this state that the municipal corporation is not responsible for those incidental damages that result from the proper exercise of their functions, and such exercise will not subject it to the charge of maintaining a public nuisance. Beseman v. Pennsylvania Railroad Co., 21 Vr. 235; same ease affirmed, 23 Vr. 221.

So far as the authority of the state can avail for that purpose the legislative consent furnishes ample protection to the city for the appropriate exercise of granted power.

Since the decision of Stevens v. Paterson and Newark Railroad Co., in this court, reported in 5 Vr. 532, it has been the conceded law that the title of the riparian owner on the navigable waters of the state, where the tide ebbs and flows, extends only to high-water mark and that the state is the absolute owner of the bed of the waters beyond high-water mark.

This adjudication leaves the riparian owners of lands on the Passaic river where the tide ebbs and flows without the right to relief.

• This question is discussed and settled in the opinion of this court in the case of Sayre v. City of Newark, decided at the present term, and it is therefore unnecessary to refer to other authorities.

But in that case the alleged injury affected only owners on tide water; the rights of.those above the.flow of the tide are in nowise involved in the decision of the Sayre Case.

In Cobb v. Davenport, in our supreme court, 3 Vr. 368, Mr. Justice Depue says: “That by the common law all waters are divided into public waters and private waters. In the former, the proprietorship is in the sovereign; in the latter, in the individual proprietor.

, “The title of the individual being personal to him, is exclusive, subject only to a servitude to the public for purposes of navigation, if the waters are navigable in fact. The test by which to determine whether waters are -public or private is the ebb and flow of the tide. Waters in which the tide ebbs and flows, so far only as the sea flows and reflows; are public waters; and those in which there is no ebb and flow of the tide are private waters.”

In the case of Attorney-General v. Delaware and Bound Brook Railroad Co., 12 C. E. Gr. 631, the case of Cobb v. Davenport is cited with approbation. In pronouncing the opinion of this court, Mr. Justice Dixon said that the bed of the Delaware river above tide water is private property, subject to the paramount public right to use the river as a common highway, in which is included the right to préserve and improve the navigability of the water. No other qualification or restriction of the private ownership was intimated.

The English cases sustaining the right to sewer into freshwater streams, under license from parliament, are not authority here. Our legislature has not like unlimited power to legalize a grant which is hostile to the interest of the riparian owner, without providing compensation as enjoined by our state constitution. There is no such limitation upon the power of the British parliament.

The learned justice who delivered. the opinion in the case of Attorney-General v. Delaware and Bound Brook Railroad Co., supra, is too accurate in his statement of legal principles to have omitted to mention the right of a city above tide water to make the river an outlet for its sewers, if such a right in his judgment existed. It would be a barren title if the owner could not invoke the aid of the law to preserve it from destruction.

It must therefore be concluded that the riparian owners on the Passaic river, above the point where the tide ebbs and flows, have title to the bed of the stream to the middle thereof, subject only to the right of the state to regulate navigation, so far as the water may be navigable.

The relators, in the information of the attorney-general, who are riparian owners above the flow of the tide, have a right of property in the river, and in that respect the legal rule applicable to them differs essentially from that which pertains to those below them, where the tide ebbs and flows.

In Merrifield v. Worcester, 110 Mass. 216, and in the more recent ease of Valparaiso v. Hagen, 153 Ind. 337, in opinions of much force, it is held, that where sewers emptying into freshwater streams are constructed under legislative authority, the riparian proprietor cannot recover for the pollution of the stream, so far as it is attributable to tfie authorized plan of sewerage adopted by the city, but only in case the injury results from improper construction or unreasonable use of sewers, or negligence of the city in the care of them.

Assent cannot be given to the correctness of these decisions, as they are not in harmony with the adjudications of our own legal tribunals.

In Beach v. Sterling Iron and Zinc Co., 9 Dick. Ch. Rep. 65, Vice-Chancellor Pitney, in his able review of the authorities, criticised the case of Merrifield v. Wooster, and said that so far as the expressions there'used favor the notion that a city or town may collect and discharge sewage matter into a fresh-water stream to the injury of a riparian owner, and without liability to action, they are contrary to the law as held in England for centuries.

The decree in that case recognizing the right of the riparian owner was unanimously affirmed in this court upon the opinion of the vice-chancellor in 10 Dick. Ch. Rep. 324.

Riparian owners above tide own ad medium filum ague, and have a property right in the water flowing along and over their land.

This property right cannot be impaired except by the lawful use of the waters by riparian owners higher up the stream.

Lower owners must submit to such pollution as results from the natural or reasonable use of the owners above, produced by the surface drainage or by the percolation of offensive matter through the soil.

But the higher owners cannot lawfully combine and by construction of artificial conduits collect foul matter and pour it in mass into the stream. Such a scheme, when put into operation constitutes the taking of private property which the legislature cannot authorize except upon just compensation to the party injured.

The rights of such riparian owners are clearly stated in the opinion of Mr. Justice Lippincott, in this court, in the case of East Jersey Water Co. v. Bigelow, 31 Vr. 201.

By reason of the location of the J ersey City water works upon the tidal stream, the mayor and common council of J ersey City, complainants in this suit, have no' rights in the waters of the stream distinct from the rights of the general public therein, nor are they endowed with superior rights by the legislature of 1852. P. L. of 1852 p. U9.

That legislation did not guarantee or assure to Jersey City the purity of the water, nor did it vest in Jersey City any part of the state’s title in the tidal waters, upon which its present claim can be established and enforced.

It was simply the consent of the state that J ersey City might withdraw such quantity of water from the Passaic as might be required to furnish a supply of pure and wholesome water. This provision was intended to qualify and limit the extent of the grant so that the implication could not arise, that Jersey City might without further legislation divert the water for other purposes than a water-supply for domestic and other like purposes.

At the time of the legislative grants to the city of Paterson in 1867-1868 and 1871, it would have been competent for the legislature to pass a law prohibiting' the further use of the Passaic water in Jersey City, and compelling the city to procure its water elsewhere.

Therefore the grant to Paterson must be regarded as a repeal by implication of the previous grant'to Jersey City, if it was an impairment of that grant, which cannot be conceded. Newark Aqueduct Board v. Passaic, 18 Stew. Eq. 393.

Jersey City is without a standing to invoke the injunction power in this ease.

Ordinarily where the riparian owner is injured by an unlawful diminution of the quantity of water, or by its excessive pollution, when his legal right is established, he is entitled to fKé exercise of the injunction power of a court of equity.

Whether in this case the restraining order of the court should be interposed for the protection of the riparian owners above tide water, is the remaining question to be considered.

■ That question must be solved by determining whether in the situation of the parties here there is the presence of such circumstances and such equities as may justify this court in withholding its restraining arm.

On the one hand, the riparian owner is entitled to redress in respect of the deprivation of his property.

On the other hand, the city of Paterson, at an enormous expense, has put into operation under legislative authority, and for a long series of years has used and enjoyed, a system of sewerage which accommodates a population of over one hundred thousand people.

By the restraint prayed for, this sewerage system will be suddenly destroyed, and the homes of this multitude of people will be rendered perilous to health and life, and unfit for occupancy.

While the city cannot, upon this continued acquiescence of these riparian owners, predicate the right to deprive them of their property in the stream, yet in view of such acquiescence, and the magnitude of the injury which would fall upon the public by prohibiting the use of the sewers, it would be inequitable to enjoin, if relief can otherwise be afforded. The relators are here asking equity and they must do equity.

A substituted remedy by giving them adequate compensation for their injury would be a just disposition of the controversy.

The granting or refusing of an injunction is a matter resting in the sound discretion of the court. Where it would cause great injury to the defendants and might be of serious detriment to the public, without corresponding advantage to the complainant, it will not be granted.

The authorities are collected in Stew. Dig. 620 §§ 7, 10.

In Morris and Essex Railroad Co. v. Prudden, 5 C. E. Gr. 531, Mr. Justice Depue, in delivering the opinion of this court, said “that an injunction ought not to be granted when the benefit secured by it to one party is of little importance, while it will operate oppressively, and to the great annoyance and injury of the other party, unless the wrong complained of is so wanton and unprovoked in its character as properly to deprive the wrongdoer of the benefit of any consideration as to its injurious consequences;” and he recognized the fact of acquiescence as a consideration of importance in determining whether the defendants should be restrained.

In the case before us the injury to the defendants would be so great that an injunction should not be granted to these complainants whose injury is incidental and comparatively small.

If these complainants amend their bill, or file a new bill asking for an injunction, unless the city will consent to make such compensation for1 the diminution in the value of their lands as shall be ascertained to be just, such equitable relief can be given to them.

A court of equity will, to effectuate justice, settle unliquidated damages. Coster v. Monroe Manufacturing Co., 1 Gr. Ch. 467; Ingersoll v. Town of Newton, 15 Dick. Ch. Rep. 399.

Those riparian owners above the flow of the tide have the right, if they so elect, to pursue their remedy at law, by instituting suits for damages.

In that event the city would be driven to file its bill to restrain the suits, offering to make just compensation.

That procedure was taken in Paterson and Newark Railroad Co. v. Kamlah, 15 Stew. Eq. 93, and approved in this court, the decree being unanimously affirmed. Paterson and Newark Railroad Co. v. Kamlah, 2 Dick. Ch. Rep. 331.

The injunction should be vacated and the record remitted to the' court of chancery, and the case proceeded with in accordance with the views herein expressed.

For reversal — The Chief-Justice, Depue, Van Syokel, Dixon, Garrison, Gummere, Ludlow, Collins, Bogert, Hendrickson, Adams, Vredenburgh — 12.

For affimance — Lippincott—1.'


source: Caselaw Access Project

author: Dixon, J.

license: Public Domain

text:
    Charles Minzesheimer et al., complainants and respondents, v. Elmer E. Doolittle and Ellen I. Doolittle, his wife, defendants and appellants.
    [Filed March 5th, 1900.]
    1. Contracts to pay differences on the rise and fall of the price of cotton in the New York Cotton Exchange, are wagering contracts, although they are made in the form of purchases and sales of cotton for future delivery.
    2. A New Jersey court of equity will not aid judgment creditors to enforce a judgment for debts growing out of wagering contracts, although the contracts were made in another state, where they were legal, and although the defendants in the bill were non-residents of. New Jersey and have not in their answer set up the character of the contracts as a defence.
    On appeal from a decree advised by Vice-Chancellor Emery, whose opinion is reported in 11 Dick. Ch. Rep. 206.

      Mr. Frank Bergen, for the defendants, appellants.

      Mr. Maklon Pitney, for the complainants, respondents.
   The opinion of the court was delivered by

Dixon, J.

On November 15th, 1887, Elmer E. Doolittle conveyed to his wife, by a deed to his brother and a second deed from the brother to Mrs. Doolittle, a tract of land in Montclair, New Jersey, where they then resided. At that time Doolittle was engaged in so-called purchases and sales of cotton on margin with Charles Minzesheimer & Company, brokers on the cotton exchange in New York City, the result of which was that on March 27th, 1888, when the transactions were closed, a balance appeared against Doolittle amounting to $3,295.21. Shortly afterwards Minzesheimer & Company sued Doolittle in the supreme court of New York for said balance, and recovered a judgment, on which they then brought suit against him in the supreme court of New Jersey, and on August 20th, 1888, obtained a judgment for $3,427.62. By fieri facias on that judgment, levy was made on the Montclair property, and then a bill was filed in the court of chancery by Minzesheimer & Company against Mr. and Mrs. Doolittle, to set aside the above-mentioned conveyance, as one contrived in fraud, with intent to hinder, delay or defraud creditors, and thus to secure the sale of the property in order to satisfy the complainants’ judgment. On this bill the court of chancery decreed according to the prayer, and thereupon the defendants appealed.

Before entering upon an investigation as to the bond fides of the conveyance to Mrs. Doolittle, a preliminary question is presented respecting the standing of the complainants.

The testimony makes it clear that what are called purchases and sales of cotton on margin were not in fact purchases and sales at all, but were mere speculations on the rise and fall of the price of cotton on the New York Cotton Exchange. This is evident from the enormous disproportion between the cash furnished by Doolittle to the complainants and the amount of the nominal sales and purchases made by them on his account, and from the fact that the transactions always provided for nominal deliveries several months in the future, while it was expected and intended that, before the time for delivery should arrive, each transaction should be covered, so far as it could be, by a counter transaction, that is, a purchase by a sale, and a sale by a purchase, and only the differences should be paid or adjusted by debits and credits. The transactions were precisely of that character which, in Flagg v. Baldwin, 11 Stew. Fq. 219, this court declared would mark them as wagers, so that they would, if occurring in New Jersey, be unlawful and void. In that case it was also decided that when the courts of this state are asked to enforce such transactions, or obligations founded upon such transactions, they will refuse, although the transactions took place in another state where they were not unlawful.

Plainly, that decision bars these complainants at the threshold of the case, unless it is obviated by matters now to be considered.

First. The complainants contend that the refusal of our courts to aid such transactions arises solely out of a purpose to protect our own citizens, and, as Mrs. Doolittle was a citizen of Connecticut when the present bill was filed, she cannot profit by it.

Whether such a purpose would accord with the letter and spirit of the federal constitution, which guarantees to the- citizens of each state all privileges and immunities of citizens in the several states, need not be decided, for, when Mrs. Doolittle acquired the rights which are now assailed, and when the complainants’ claim as creditors accrued, Mrs. Doolittle and her husband were citizens of New Jersey, and entitled to whatever protection the courts of their state could afford them. Mrs. Doolittle’s estate was their indefeasible by any wagers which her husband had made or might make anywhere, and we know of no principle by which her removal to another state could render her title to land in New Jersey less secure against such attack.

But the complete answer to the complainants is that the court’s refusal to act does not rest upon regard for the defendants. It is based on the unwillingness of the court to use the powers which were granted for the furtherance of lawful ends, in aiding schemes the nature of which is condemned by the public policy of the state, a policy which holds a prominent place even in our constitution. Hope v. Linden Park Association, 29 Vr. 627.

Secondly. The complainants insist that, as the answer of the defendants does not set up or suggest any impropriety in the origin of the indebtedness from Doolittle to the complainants, such impropriety should not be noticed by the court.

While it is desirable that in every case such an obstacle to the complainant’s success should be alleged in the pleadings, so that the complainant may not through lack of warning permit a partial disclosure of the truth to misrepresent his claim, and while the absence of such an allegation will induce the court to piit on. the testimony any reasonable construction that favors the complainant in this respect, yet when the court is sure that the real character of the transaction appears, and that it is one the enforcement of which would violate public policy, the court will not, for any delinquency of the defendant, lend its assistance to such violation.

Thirdly. It is urged that if the conveyance to Mrs. Doolittle was contrived in fraud to hinder, delay or defraud creditors and others, she is in no better position than her grantor; that he is precluded by the judgments of the law courts from showing the original character of the debts which are merged in the judgments, and therefore she is also estopped.

This reasoning likewise ignores the basis of the court’s refusal to act.

But, even from the personal standpoint of the defendant, it is unsound.

The grantee in such a conveyance is not a trustee for the grantor, but holds a title perfectly good in law and equity against the latter. Only against those whom in fact or in legal contemplation it was intended to injure, is the title bad. The mere circumstance that after the conveyance a third person instituted suit and recovered judgment against the grantor cannot preclude the grantee from showing any condition of things which renders the pre-existing title valid against that judgment. The judgment, of course, fixes against all the world the status of the plaintiff as a judgment creditor of the defendant, but whether, as a judgment creditor of the defendant,' he is able to defeat a title which that defendant could not overthrow, is a question not decided by the judgment and not capable of being 'judicially settled until the owner of the title has had his day in court. This is the question which, viewing the suit merely as a controversy between the parties, Mrs. Doolittle had in this cause for the first time an opportunity to raise, and she was at liberty to contest the complainants’ claim, notwithstanding the judgments against her husband in New York and New Jersey; she was at' liberty to insist that the debts merged in those judgments, and therefore the judgments themselves do not deserve the aid of this court. Had she set up this defence by pleading, we should have been obliged to concede to her the right to establish it; for courts of equity do not always assist judgment creditors to' enforce collection of their judgments. The complainant must come into a court of equity with a cause essentially equitable; it is not enough that his cause is unquestionably legal. Rich v. Sydenham, 1 Ch. Cas. 202; Mississippi and Missouri Railroad Co. v. Cromwell, 91 U. S. 643; Randolph v. Quidnick Co., 135 U. S. 457; De Graw v. Mechan, 3 Dick. Ch. Rep. 219; Brinkerhoff v. Ransom, 12 Dick. Ch. Rep. 312.

But, as said before, no failure on the part of the defendant to claim her personal rights, can blind the court to the intrinsic impropriety, for the court’s sake, of the step which it is asked to take.

Our conclusion is that in the present instance these complainants are not entitled to the aid of a court of equity in New Jersey, and therefore the decree below should be reversed and the bill dismissed.

For reversal — The Chiee-Justice, Depue, Yan Stckel, Dixon, Garrison, Lippincott, Gummere, Ludlow, Collins, Bogert, Nixon, Hendrickson, Adams, Yredenburgh — 14.

For affirmance — None.


text:
    The Sparks Manufacturing Company, complainant and respondent, v. The Town of Newton, defendant and appellant. Washington H. Ingersoll, complainant and respondent, v. The Town of Newton, defendant and appellant.
    [Filed March 5th, 1900.]
    1. When a riparian proprietor seeks the aid of a court of equity to restrain the diversion of water b37 a municipal corporation for public purposes, and offers to forego his right to an injunction on receiving just compensation, which he asks the court to determine, and the defendant in its answer consents to pay such compensation so to be determined by the court, in case the court considers the complainant entitled to an injunction, the court has jurisdiction to ascertain the amount of such compensation.
    2. A municipality which buys a piece of land on a private stream several miles distant from its corporate limits, does not thereby become entitled as riparian owner to draw from the stream a supply of water for the inhabitants of the town.
    3. The town of Newton has no authority to divert water from private streams, to the detriment of lower riparian owners, on condition that it will store storm water and give it out into the streams in dry times, and thus confer a compensatory benefit on those owners, they not consenting thereto.
    4. In ascertaining just compensation for the diversion of water from a mill, the difference between the market value of the mill before the diversion and its market value afterwards, is usually a simpler and safer criterion than estimates of the probable cost of producing by steam at the mill the power which the diverted water would supply, and than estimates of the probable value of the water power at the mill, based on the rental value of power at other places more or less distant and dissimilar.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in 12 Dick. Gh. Hep. 867.

      Mr. Thomas Kays, for the defendant, appellant.

      Mr. William II. Corbin, for the complainants, respondents.
   The opinion of the court was delivered by

Dixon, J.

The circumstances of these cases are very fully stated in the preface and opinion of Vice-Chancellor Pitney, 12 Diclc. Ch. Rep. 367. With the conclusion there expressed touching the power and duty of the court, on the pleadings and evidence, to fix the compensation that the defendant ought to pay to the complainants, as a condition of withholding the injunctions to which they would otherwise be entitled, this court agrees — only with respect to the amounts awarded do we find reason for dissent.

The right to be obtained by the defendant under these decrees is the right to abstract from one of the tributaries of the Wall-kill river a definite quantity of water, which in its natural course would flow past the complainants’ mills. The opinion of the vice-chancellor deals with the right to divert eight hundred thousand gallons per day, and this quantity of water is shown by him to be capable of producing two and fifty-four hundredths continuous horse power at the Sparks Company’s mill, and two and sixty-five hundredths continuous horse power at Ingersoll’s mill. On this basis the learned vice-chancellor proceeds with two calculations — first, to ascertain the probable annual cost of producing the same power by steam at these mill sites, and second, to ascertain the probable annual value of the power at these localities, in view of the rental price of such power in other places more or less distant and dissimilar. Having thus formed an estimate of the annual value of the power, he compounds that value at four per cent, for forty years and finds the present value to be $3,302 at the Sparks mill, and $2,650 at the Ingersoll mill, and therefore awards those sums.

In this course of reasoning little, if any, attention was paid to the actual market value of the mill sites; and yet, in Packard v. Bergen Neck Railroad Co., 25 Vr. 553, this court declared that, when only part of a person’s property is taken, just compensation will be made by awarding the difference between the market value of the property before any part was taken and the market value of the property after the taking.

While it may be proper in such cases as the present to take into consideration the matters on which the vice-chancellor’s awards rest, still we deem the difference between market values a simpler and safer criterion; and when it appears that by following other guides a result is reached utterly irreconcilable with this criterion, that result cannot be sustained. That such incompatibility exists in the cases before us will be made manifest by a few considerations now to be stated.

The testimony of witnesses living in the neighborhood of the Ingersoll mill is to the effect that the fair market value of the whole plant in 1896, when these bills of complaint were filed, was five or six thousand dollars. It has a total capacity to use one hundred and thirty-two .horse power of water, which will be furnished by about one thousand one hundred million gallons of water per month. A tabulated statement of the natural flow of the river at Ingersoll’s mill, known in the case as Vermeule’s Table D, which appears to have been accepted as trustworthy by all parties at the trial, shows that during eight months of the average year there is more than a sufficient supply of water for the full capacity of the mill; that during June and September the supply is above five-sixths of the capacity, and that during July and August the supply exceeds five-ninths of the capacity. These data indicate an annual supply equivalent to one hundred and eighteen continuous horse power at this mill.

blow, if, for the abstraction of two and sixty-five hundredths continuous horse power the millowner ought to be paid $2,650, then for the abstraction of the whole power he ought to be paid $118,000. Such an inference proves the extravagance of the award.

In April, 1896, the plant of the Sparks Manufacturing Company was purchased by that company for $75,000. The plant included the water machinery with a total capacity of one hundred and seventy horse power, steam machinery having one hundred horse power, mill buildings and several acres of land.

To' run the water plant to its full capacity the company required about one thousand three hundred and sixty million gallons of water per month, and besides it used about thirty million gallons per month for condensing steam, washing fabrics, &e.

Y ermeule1 s Table D shows that during eight months of the average year there is more than a sufficient supply of water for tire full cajoacity of this water power; that during June and September the supply is about two-thirds of the capacity, and that during July and August the supply is about four-ninths of the capacity. These dala indicate an annual supply equivalent to one hundred and forty-one continuous horse power at this mill.

If for the abstraction of two and fifty-four hundredths continuous horse power of water the company ought to be paid $3,302, then for the abstraction of the whole power it ought to be paid $183,300. This inference proves the extravagance of the Sparks Company’s award.

We think there is another error in the basis on which the present awards are made.

Assuming that the defendant withdraws eight hundred thousand gallons of water per day, i. e., twenty-five million gallons per month, Yermeule’s Table D shows that in an average year, after the 'allowance to the defendant is taken, more water will flow past these mills during eight months than either of the mills can utilize; so that only during four months will the supply available in the mills be perceptibly diminished. During those months the water diverted by the town would furnish three horse power at the mills, and three horse power for four months would be equivalent to one continuous horse power. Thus, even on the assumption that water power at these mills is as valuable as the learned vice-chancellor deemed it to be, allowances for two and fifty-four hundredths and two and sixty-five hundredths continuous horse power are about two and a half times too large.

In our judgment, an award of $500 to Mr. Ingersoll and of $750 to the Sparks Manufacturing Company will afford ample compensation to them for the abstraction by the defendant of eight hundred thousand gallons of water per day. Under the election by the town to abstract twelve hundred and fifty thousand gallons per day, those sums must be proportionally increased.

Let the present decrees be reversed and decrees be rendered in accordance with the judgment above stated.

For reversal — The Chibe-Justice, Van Syckel, Dixon, Garrison, Lippincott, Gummere, Ludlow, Bogert, Nixon, Hendrickson, Adams, Vrddenburgh — 12.

For affirmance — None.


author: Garrison, J.

text:
    Woodbury Heights Land Company, complainant and respondent, v. Henry C. Loudenslager, defendant and appellant.
    [Filed March 5th, 1900.]
    A corporation filed its bill in the court of chancery against a former officer to recover from him the difference between the price he had paid for a tra'ct of land and the price at which he had conveyed it to the corporation. The bill charged that the latter price was $80,000 in money and that the premises were subject to mortgages amounting to $41,100, which were stated in the deed to be part of the consideration money therefor. The answer admitted the correctness of these allegations, and, upon the figures so established, a decree was obtained by the complainant for the difference between the sum so stated and the price paid by the defendant for the land. After decree the defendant filed a petition in chancery showing that the complainant was executing this decree by advertising the property of the defendant without having paid a certain mortgage made by the defendant for $5,000 upon the land conveyed, which mortgage formed part of the consideration of the said deed and had been since assigned to the defendant who had begun an action at law against .the complainant upon its said covenant to pay the said mortgage. The petition also stated that this mortgage was an inadequate security and that the complainant had become practically insolvent. The petitioner prayed that he be permitted to set o££ against the decree the amount due on the covenant, and for further relief. The order appealed from dismissed the petition.- — Held, that under the facts stated in the petition and answer the execution of the decree should be stayed until the determination of the action at law. — Held, also, that the petition should not have been dismissed upon the ground that it was stale or that its merits had been passed upon in liquidating the amount of the decree.
    On-appeal from an order advised by Vice-Chancellor Reed, who filed the following memorandum:
    This petition cannot be regarded as one to set off a judgment to be obtained against the complainant against the subsisting decree standing against the complainant in favor of the complainant.
    To a judgment or decree there can be no s.et-off of a debt not in judgment or decree. Waterm. Set-off § 822. '

    The purpose of the petition is to have the decree modified upon the ground that the defendant was charged with sums which the complainant had covenanted to pay, but never did pay, as a part of the consideration named in the conveyance by defendant to "complainant.
    But it is manifest that this point has been already passed upon. It has been decided not only by this court, but also by the court of appeals.
    The original decree held not only that the defendant should respond for all the profits, but fixed the amount of those profits. That decree was affirmed upon appeal, and upon a petition for a re-hearing was re-heard.
    In the petition for re-hearing the fact that the court in its former decree had not given to the defendant the benefit of the reduction now asked for was one of the principal grounds upon which the re-hearing was invoked.
    Nevertheless, the court of appeals, in its final decree, adjudged that the decree be so modified as to decree that the appellant do pay to the respondent the one-half of the profits ascertained and stated by the court of chancery in its decree.
    There is now no way of attacking this decree except by bill of review.

      The petition is not filed for that purpose and contains nothing upon which an application for leave to file such a bill can rest.
    The petition is dismissed.

      Mr. Norman Grey, for the appellant.

      Mr. Howard M. Cooper, for the respondent.
   The opinion of the court was delivered by

Garrison, J.

This is a petition filed in the court of chancery by the defendant in a cause that had been decided by this court and remitted for correction and execution.

The history of the litigation may be gathered from the reported opinions: Woodbury Heights Land Co. v. Loudenslager, 10 Dick. Ch. Rep. 78; Loudenslager v. Woodbury Heights Land Co., 11 Dick. Ch. Rep. 411; Woodbury Heights Land Co. v. Loudenslager, 13 Dick. Ch. Rep. 556.

Briefly restated for present purposes, the case is that Henry C. Loudenslager, while an officer of the Woodbury Heights Land Compaq, sold to it for $81,493.86 a tract of land that had cost him $66,223. The difference, $15,270.86, represented the profit of the transaction, divided between Loudenslager and .another officer of the company. Hpon a bill filed against Loudenslager alone the company obtained a decree for half of said profit, to wit, $7,635.43, with interest, for which execution has been levied upon the property of the defendant.

In the present petition the defendant shows that the said sum of $81,493.86 that formed the basis of the decree against him was made up in part of a mortgage for $5,000 made by him upon a parcel of said land conveyed to the complainant company and, he says, assumed by the company as'part of its purchase-price of the property, but which, irrespective of its assumption, was indubitably included in the said sum of $81,493.86. The petition further shows that this mortgage has not been paid, but is in the hands of the petitioner by assignment, and that he has brought a suit in the supreme court against the complainant corporation for its breach of the said covenant assuming said mortgage, and that the complainant is without property or assets with which to pay such judgment as will be rendered if the petitioner be successful in his said suit at law, and that the mortgage itself has become an inadequate security. The prayer of the petition is that the petitioner be allowed to set off the principal and interest due to him from the complainant upon said covenant against the principal and interest due to the complainant upon the said decree, and that in the meantime the complainant be restrained from advertising and selling the property of the petitioner under said decree or from assigning or transferring the same, and for further relief.

In its answer to this petition the complainant does not deny any of the facts stated, but alleges that the questions sought to be raised have been passed upon in the progress of the cause in chancery, and that the complainant has pleaded issuably to the action at law.

The learned vice-chancellor, to whom these matters were exhibited, dismissed the petition because a mere covenant could not be set off against a decree, and denied further relief because the merits of the petition, in his view, touched only the amount of the profits which had been settled' by the final decree. A bill of review to re-liquidate the amount of the decree was suggested, but not allowed.

None of these conclusions places the petitioner’s application in the light to which the equity of the present situation, as I understand it, entitled him.

As to the first point, while it is clear that the covenant cannot be set off as if it were already a debt of record, I think that the prayer for a stay of execution and for further relief should be so read, in view of the pending litigation at law, as to cover the time reasonably necessary for the termination of that suit. The uneontradicted state of facts is such as to incline a court of equity to hold its hand while the parties are litigating their differences in a court of law. This customary chancery practice would doubtless have obtained had not the vice-chancellor, who had had no personal acquaintance with the litigation in its earlier stages, been impressed with the idea that the defendant’s strait arose from his neglect to press his present claim upon the atte'■* An of the court of chancery as part of his accounting, or else that it had been so pressed and decided against him. No account was taken in the court of chancery, although Vice-Chancellor Pitney tendered a reference which was not ordered, for the obvious reason that the bill and answer agreed upon the figures however much they differed about the facts. As to the former, the decree followed the bill. 1 Indeed the present proceeding might aptly be described as an application by a defendant to compel the enforcement of a decree by the complainant conformably to the equity of the bill upon which it was obtained.

The sole issue upon which the amount of the decree rested was the difference between the price the defendant paid for the land and that at which he conveyed it to the complainant. Testimony was taken with respect to the price paid by the defendant, but with respect to the price at which the property was conveyed to the complainant, which is the matter now stirred, there was no question between the parties and could not have been any upon the issue tendered by the bill of complaint. In the bill itself this price is charged as

“eighty thousand dollars in money, said premises being conveyed subject to mortgages amounting in the aggregate to $41,100.00, which mortgages are stated in said deed to be a part of the consideration money therein mentioned.”

The deed to which the bill of complaint thus refers contains this clause:

“The above premises are conveyed under and subject to the payment of the principal amounts of 'the several mortgages hereinafter mentioned and the interest on the same from the date hereof.”

Among the mortgages that follow is the one for $5,000 above referred to. The answer admitted this charge, and the vice-chancellor took the figures that measured the profits from the bill, and upon it founded a decree for the complainant. It may well be doubted whether he would- have listened to the defendant had he sought to argue that his illicit profit might in the future be computed upon a more favorable basis if the complainant’s allegations as to its own promises were not made good. The defendant was in court to answer by admission or denial the facts stated in the bill, not to foresee equities that might arise if facts that he was compelled to admit were afterward varied by the complainant.'

Even now, when the complainant has not paid $5,000 of the consideration money, and is defending at law against its payment, it is not clear to me how the matter bears upon the issue raised by the bill and settled by the decree. If the decree were opened to-day the proof would, as I see the case, be inadmissible unless the complainant were compelled to amend its bill and withdraw its admission as to the consideration of the deed to it from the defendant — an unheard of proposition. The gravamen of the petition is not that the decree is not right or that it does not bind the defendant, but that it is right and that it binds the complainant. The argument of the petitioner runs somewhat like this: The decree against me is for $7,635.43. That sum is the profit of my sale to the complainant if the consideration of the conveyance to the complainant was $81,493.86. The consideration of the conveyance was $81,493.86, if it included the mortgages subject to which I sold the land, one of which was the $5,000 mortgage I had placed upon it. Hence, when the complainant alleged that the consideration was $81,493.86, and that computed in that sum was the mortgage debt on the land, it admitted that my $5,000 mortgage was part of the consideration. And when it took a decree against me for the difference between $81,493.86, which included my mortgage, and the sum I had paid for the land, it became part of that decree that as to me the complainant was primarily liable to pay that mortgage. So that now when that mortgage is in my hands unpaid, equity will consider that to have been done that should have been done, and will permit the complainant to execute this decree against me only upon the condition that it credit upon the execution the sum so established by the decree to be due to me.

In support of this argument the petitioner might cite the language of Chancellor Haines in Tichenor v. Dodd, 3 Gr. Ch. 457: “By the terms of the deed, the mortgage money was to he taken as a part of the consideration, and hence, the proposition that under such circumstances equity raises upon the conscience of the purchaser an obligation to indemnify the mortgagor is correct. If he withhold the money till the premises are sold away from him, he has no ground of complaint if the mortgagor asks him to pay the amount remaining due.” In Crowell v. Hospital of Saint Barnabas, Mr. Justice Depue, speaking for the court of errors and appeals, summarized the authorities upon such stipulations as follows:

"1. In equity a stipulation of this kind is regarded as a contract to indemnify the grantor against the mortgage debt.

“2. The mortgage debt does not thereby become a personal debt of the grantee.

“3. The equity is operative between the parties to the deed only.

“4. If the purchaser buy the mere equity of redemption, he may discharge his equity to the mortgagor by releasing the lands.

“5. If by the terms of the purchase the mortgage debt is by agreement taken as part of the consideration money, equity raises upon the conscience of the purchaser an obligation to indemnify the mortgagor against the mortgage debt.”

In other words, the mortgage debt may by agreement, if so stated in the deed, be charged upon the unpaid purchase-money, which is a different thing from the legal assumption of the mortgage debt by the grantee.

If to the circumstances of the above case we add that the grantee has parted with the mortgaged lands and that the debt charged upon the unpaid purchase-money is payable to defendant in execution with respect to a decree based upon such unpaid purchase-money, the general nature of the relief to which the petitioner considers himself entitled is spread before us.

It is not essential to this suppositional argument that the complainant should have assumed the payment of the mortgage subject to which it accepted the conveyance from the defendant. That is the subject of the action at law, and depends upon the language of the deed of conveyance. Let the construction of the covenant be what it may, there is no question upon this' petition that the sum of the mortgages was in fact and by agreement computed in the purchase-price and made the basis of the decree. Hence the equity above suggested is entirely independent of the result of the action upon the covenant or of any other form of legal remedy. Indeed if there be neither legal assumption nor equitable charge, still the fact remains that by enforcing this decree the complainant is bettering itself to the extent of $5,000 beyond the case upon which it got its decree. ' Which sum, in the case last supposed, instead of being credited upon the defendant’s half of the profits, would be deducted from the whole of the profits and the defendant credited with half of the rebate. The deed "will, I suppose, receive its construction in the court of law. If not, the court of chancery may construe it and have before it by adjudication, admission or estoppel the material for a complete administration of any equities that may have arisen by what has either happened or transpired since the making of its decree. Whether this administration should take the form of that equitable control exercised by every court over the.enforcement of its own process or whether it should be by a separate proceeding is not now before us upon this appeal. The vic.echancellor dismissed the present petition not because it was >a petition, but because he considered that it touched only thq amount of the decree and was at best a stale claim. In both of these respects he was, as I have endeavored to point out, in error. If I have succeeded, it is because beyond any answer that could have been made to the bill, aside from any dissatisfaction 'with the amount of the decree, apart even from the question 'of setting off one debt of' record against another, this petition discloses a situation in which inequity will be done under the forms'of law, if the facts be as they are now permitted to appear.

Inasmuch as the order dismissing the petition is to be reversed in order that the court of chancery may stay the execution of its 'decree pending the action at law, the petition thus rehabilitated may stand open for such purposes as the advice of counsel and the practice of that court may admit.

I have not considered whether by a different presentation of the facts the defendant ought to be permitted to file a bill of review. It has not seemed to me that his remedy was to correct a decree of which he does not complain. It is entirely possible that the same situation that brings the enforcement of the decree under judicial scrutiny might lead the court to alter the decree itself. If the sum be established, it may even be optional with a defendant whether it be credited upon the execution or be deducted from the decree'. All that is decided upon this appeal is that the execution should be stayed, that the levy stand as security to the complainant, and that the case presented by the petition is not stale.

For .reversal — The Chief-Justice, Depue, Van Syckel, Dixon, Garrison, Lippincott, Gummere, Ludlow, Colluis, Bogert, Nixon, Hendrickson, Adams, Vredenburgh — 14.

For affirmance — None.


text:
    William B. Kempton, complainant and appellant, v. David H. Bartine et al., defendants and respondents.
    [Filed April 4th, 1900.]
    To a bill in chancery seeking to enjoin an executor in his administration of an estate and praying for a decree that will take from him the title to all of the personal property of which the testatrix was possessed at the time of her death, the executor, eo nomine, is a necessary party.
    On appeal from an order advised by Vice-Chancellor Grey, whose opinion is reported in 14. Dick. Ch. Rep. 149.

      Mr. Martin V. Bergen, Jr., and Mr. Martin V. Bergen, for the appellant.

      Mr. Howard Carrow and Mr. David J. Pancoast, for the respondents.
   The opinion of the court was delivered by

Garrison, J.

The bill in this cause sought to have the chancellor declare that, by reason of a certain agreement made with the complainant by Annie Kempton in her lifetime, no title to any of the personal -property of which she was possessed at the time of her death vested in her executor, David H. Bartine, who by her will was required to pay debts and legacies and administer her estate. To such a bill the executor, eo nomine, was a necessary party. The order of the court of chancery to that effect is affirmed, for the reasons given by Yiee-Chancellor Grey, in so far 'as they are pertinent to the state of facts above indicated.

There is another reason why the court of chancery should have refused to make a final decree in the cause in the absence of the executor of Annie Kempton. The bill alleged that suits had been brought by the said executor as such in the supreme court of this state against the complainant, William B. Kempton, on his three promissory notes aggregating $4,000, the property of Annie Kempton in her lifetime. In this bill, as originally filed, the executor was a party, and against him in that capacity, while he was still a party, an order in the nature of an injunction was obtained staying him from the further prosecution of said suits against the complainant. Afterward, upon the motion of the complainant, the executor was stricken from the bill as a party defendant. It is clear that a final decree cannot be rendered that will either secure to the complainant the relief sought in the bill or that will relieve the executor from the anomalous position of being enjoined under a bill to which he is not a party. In the face of his wish to be a party the cause cannot proceed without him.

In his opinion the learned vice-chancellor discussed and decided an interesting question of evidence that arose upon the hearing before him, but which was not brought to this court by the appeal from his order respecting parties, and hence has not been here considered.

The order of the court of chancery is affirmed, with costs.

For affirmance — The Chief-Justice, Van Syckel, Garrison, Lippincott, Gummere, Ludlow, Collins, Bogert, Hendrickson, Adams, Vredenburgh, Voorhees — 12.

For reversal — None.


author: Collins, J.

text:
    Albert C. Courter, complainant and respondent, v. The Crescent Sewing Machine Company, defendant and appellant.
    [Filed March 6th, 1900.]
    1. By a sealed agreement in writing the holder of letters-patent of the United States made a covenant for himself and his assigns not to permit the use of the invention without affixing to the manufactured article a certain style of label of which the covenantee should have the exclusive sale; which agreement was duly recorded in the patent office. The patent was afterwards assigned by writing referring to and excepting the rights of the covenantee; which assignment wás duly recorded. The assignee gave general licenses to use the patent. — Held, that a court of equity has no jurisdiction to compel the assignee to answer for any loss of profits sustained by reason of failure of licensees to purchase and affix the labels, (a) Because if the assignee was bound by the covenant, so were the licensees who were equally chargeable with notice, and there was no inequity in not expressly obligating them to perform it; (6) because the covenant was collateral only and did not encumber the patent; (e) because even on a direct covenant relating to the use of personal property a court of equity can only give restrictive relief.
    2. A bill for discovery and relief in which no case for relief is made cannot be sustained for discovery alone.
    On appeal from an order advised by Vice-Chancellor Reed, vahóse opinion is reported in 43 Atl. Rep. 570.

      Mr. Charles L. Corbin, for the appellant.

      Mr. James F. Howell, for the respondent.
   The opinion of the court was delivered by'

Collins, J.

This appeal is from an order overruling a demurrer filed by the Crescent Sewing. Machine Company; to a bill exhibited October 24th, 1898, in the court of chancery, against said company and Welcome P. Gammons, Jr., by Albert C. Courter. The demurrer is general for want of equity in the bill.

The bill contains in substance only the following averments of fact that must be taken as admitted by the demurrer: Welcome P. Gammons, Jr., held letters-patent of the United States for a method of sewing sweat-bands into hats. It was necessary in some way to indicate on each hat the date ■ of the patent. Albert C. Courter was a manufacturer of hatter’s supplies, including adhesive paper labels called “size-marks,” designed to be applied to sweat-bands, in order to indicate the size of hat. On December 8th, 1892, Courter and Gammons agreed, in writing and under seal, that Courter should make a size-mark combining the size of hat and date of the Gammons patent and should have the exclusive sale of such size-marks, at five cents per thousand, to users of machines covered by the patent, during its full period, and that Gammons, “his heirs, assigns or lessees,” should not permit anyone to use such machines without applying such size-marks to all hats manufactured, and should protect. Courter in the sale of the size-marks to the users of the patented method and allow and authorize the use of the patent-date and protect against infringement of patents. On January 25th, 1893, this agreement was duly recorded in the patent office. In March, 1893, Gammons organized the Crescent Sewing Machine Company as a New Jersey corporation, and became and still is one of its directors and its president. On March 13th, 1893, Gammons assigned to that company his letters-patent and all his rights in the invention covered thereby and to any improvements thereon, and warranted the title to the patent, invention and improvements against all persons “excepting, however, the rights of one Albert C. Courter, pursuant to an agreement between himself and myself dated December 9th, 1892, and heretofore recorded in the office of the commissioner of patents in Washington.” The company had actual notice of the agreement with Oourter. Since March, 1893, the company has been engaged in the business of licensing manufacturers of hats to use the invention of Gammons and has made and is making profits from its licenses and has in its possession a true record of the number of hats sewed by its licensees. Oourter has 'no information and the company refuses him information as to the number of hats sewed by such licensees and has no means except by inspection of the company’s books of ascertaining who are such licensees and how many hats have been sewed under their licenses!

It is set up in the bill, by way of assertion of right, that, by 'reason of such assignment to it, the company became bound to perform the covenant of Gammons and that it was the duty of Gammons and the company to obligate licensees to purchase and use Courter’s size-marks and pay therefor five cents per thousand; it is averred, on information and belief, that they did not so obligate the licensees, and therefore it is insisted that the complainant is entitled to receive from the company five cents for every thousand size-marks that might have been used by its licensees on hats sewed by them by the patented method, less the cost to him to manufacture the same.

The prayer of the bill is for answer without oath, for the discovery of the names of all licensees of the patented method and of the number of hats sewed by such method and of royalties received, for leave to take copies or abstracts from the books showing the transactions with such licensees, for an account and payment of the amount due the complainant and for general relief.

It is nowhere in the bill allege'd that anyone has ever sewed a band upon a hat by the Gammons patented method without applying one of Courter’s size-marks. Inasmuch as that was the extent of Gammons’ covenant it would seem that no case for equitable aid is presented. If we may infer an allegation that Courter’s size-marks have not been used, still no such case is presented on the complainant’s own contention. That contention, as to the Crescent company, is that notice of Gammons’ covenant bound Ms assignee, the company, to perform it. If that be so then, as in the assignment of the patent, the rights of Courter were referred to and excepted, every licensee under the company was also chargeable with notice of the covenant and so is bound to perform it. Hence the company’s issuing of licenses without expressly obligating the licensees to perform is no inequity. The covenantee has as complete a remedy, legal or equitable, against each licensee as he would have had if the company had, in terms, required performance by the licensee.

Upon another ground also this bill must fall. Gammons’ covenant was collateral only. It did not lessen his right in his patent; he remained sole owner of that and free to use it as he chose. A direct covenant, although relating solely to personal property, may perhaps bind the covenantor’s assigns having notice of the covenant. The case relied on by the learned vice-chancellor — De Mattos v. Gibson, 4 De G. & J. 276 — is to that effect. A vessel had been chartered for a voyage and subsequently mortgaged to one who had notice of the charter party. The lords-justiees of appeal, reversing a vice-chancellor, ordered a preliminary injunction restraining the mortgagee, who had taken possession of the vessel, from interfering with the chartered voyage. On final hearing, because of laches of the complainant, the injunction was dissolved and the bill dismissed, but even if we take the dictum of the provisional ruling for injunction as authoritative, the case presented was not at all analogous to that before us. The charter party was a contract directly involving the vessel itself, not a collateral undertaking. A covenant by the owner of the vessel always to employ the covenantee as outfitter and a failure by the mortgagee to do so, would have presented a parallel to the case in hand. I cannot think that in such a case the English court of chancery would have taken jurisdiction.

But it will be noticed that the jurisdiction that was.entertained was altogether restrictive. The court disavowed any power to compel specific performance of the charter party or to award damages for non-performance. The doctrine of the case, as declared by the head-note of the reporters, is that

“where property either movable or immovable is disposed of with notice of a prior contract, entered into by the person disposing of it, for its use in a particular manner, the person taking it with such notice may be restrained from using it otherwise.”

In the bill before ns the complainant does not seek injunction. He prays, with incidental discovery, for an account and damages for loss of profits. For such relief there is no precedent and no equitable support.

The bill, of course, cannot be maintained for discovery alone, no case for relief having been made. United New Jersey Railroad and Canal Co. v. Hoppock, 1 Stew. Eq. 261, 264, and cases cited.

The demurrer should have been sustained and the order overruling it must be reversed.

For reversal — The Chief-Justice, Dixon, Garrison, Lippincott, Ludlow, Collins, Adams, Nixon, Vredenburgh — 9.

For affirmance — Depue, Gummere, Krueger, Hendrickson — 4.