text:
    Ella A. Randolph, complainant, v. General Investors Company and Frank B. Colton, defendants.
    [Decided May 29th, 1924.]
    1. On a suit for specific performance of a contract to sell lands, there must be something more than a provision for liquidated damages to show that payment of the amount fixed is to be equivalent to performance in order to defeat a claim for specific performance, on the ground that the party has an adequate remedy at law. n
    2. A claim for specific performance of a contract to sell lands will not be defeated because of the existence of a small judgment against the vendor.
    3. A suit for specific performance of a contract to sell lands is analogous to a real or mixed action for land, and may be brought at any time within twenty years.
    4. A grant for the erection of telephone poles and wires on a property is not an encumbrance sufficient to defeat a bill for specific performance where the vendee took possession of the lands knowing of the existence of this grant. He thereby waived the encroachment.
    On bill, &c.

      Messrs. R. E. & A. D. Watson (by Mr. Russell E. Watson), far the complainant.

      Mr. Absalom P. Bachman, for the defendants.
   Church, V. C.

The bill in this case was filed for the specific performance of a contract for the sale of lands, dated July 31st, 1916, which was made between the complainant, Ella A. Randolph, and the defendant the General Investors Company.

The defendants rely upon five grounds for the dismissal of the bill as to both defendants, and one ground for dismissal as to Frank B. Colton.

The first ground is that, because of the provision in the contract for liquidated damages, the complainant is not entitled to a decree of specific performance, but should be left to her action at law. The clause in question reads as follows:

“And for the performance of all and singular the covenants and agreements aforesaid the said parties do bind themselves and their heirs, executors, administrators and successors, respectively, and they hereby agree to pay, upon failure to perform the same, the sum of two thousand dollars, which they hereby fix and settle as liquidated damages therefor, but any payment made by the second party on account of the purchase price hereunder shall not be construed or taken as part of said sum so agreed upon as liquidated damages.”

There must be something more than a provision for liquidated damages to show that payment of the amount fixed is to be equivalent to performance. The alternative engagement should appear with reasonable clearness and certainty. Rittenhouse v. Swiecicki, 94 N. J. Eq. 36; see, also, Crane v. Peer, 43 N. J. Eq. 553; Brown v. Norcross, 59 N. J. Eq. 427.

Secondly, the defendant claims that specific performance should not be decreed, because at the time fixed for the passing of title the property was encumbered by a judgment of $55.05. This contention is disposed of in the case of Gerba v. Mitruske, 84 B. J. Eq. 141.

Third. Defendants claim that the complainant has been guilty of laches. I cannot agree with this contention, as the testimony clearly shows that complainant made every effort .to consummate the contract, and the delay was largely the fault of the defendant.

Fourth. The defendants say that complainant is barred by the statute of limitations. The defendant made a payment on account within six years, as appears by the testimony of the complainant, and also the testimony of Frank B. Colton. Moreover, a suit for specific performance is analogous to a real or mixed action for land, which may be brought within twenty years.

Fifth. The defendants insist that the title is not marketable because of the grant to erect and maintain a line of telephone poles and wires on the property. ' The General Investors Company, the defendant, went into possession of the property and received rent for it. Mr. Colton, acting for the defendant, made a search of the title and disclosed this grant to the telephone company. The vendee took possession with knowledge of this grant and remained in possession without objection. Therefore, in my opinion, it waived this encroachment.

Sixth. The defendant Erank B. Colton alleges the bill should be dismissed as to him because he is not a party to the contract, which is under seal. I think there is no merit in this objection, and it is unnecessary to discuss it in detail.

Therefore, the legal objections raised by the defendant having, in my opinion, no merit, I will grant the prayer of the complainant for specific performance.


source: Caselaw Access Project

author: Church, V. C.

license: Public Domain

text:
    Meyer M. Semel, complainant, v. Henry C. Schnering, Walter A. Cross and Newark Asbestos Products Company, defendants.
    [Decided June 18th, 1924.]
    1. Where one asserts that certain resolutions were passed by a corporation, and the other members of the corporation deny then-passage, these facts do not justify the court in assuming that the resolutions were passed, when they do not appear upon the minute book of the corporation.
    2. Where one acted as secretary and counsel for a company and gave his best efforts in these capacities to the corporation, the question of his compensation, in the absence of a specific agreement, is a matter of law, and can be decided on a quantum meruit therein.
    On bill, &e.

      Mr. Charles B. Clwncy, fox the complainant.

      Mr. Atwood C. Wolf, for the defendants.
   Church, V. C.

This is an action' brought by Meyer M. Semel against the defendant to compel the specific performance of an alleged contract which complainant says was created by the passage of two resolutions of the company fixing his salary at $2,500 a 3-ear as secretary, and another one retaining him as general counsel at a salary of $2,500 a year, which salary was to be paid in the form of common stock, said stock to be issued at a par value of $100 per share. The passage of these resolutions is denied by the defendants. The admitted minutes seem to show that Mr. Semel was duly elected secretary of the company and that he was appointed the “agent of this corporation.” Mr. SemeTs claim is that the resolution fixing his salary as secretary and counsel were duly passed by the corporation, and that he is entitled to receive his compensation in stock. In support of this he produces typewritten papers which,- he says, were adopted on certain dates. .They are not signed and axe dated in lead pencil.

The question, therefore, in the first place, is one of fact: Were these resolutions passed by the corporation ? The defendants deny this, and the only evidence in support of the so-called resolutions is that of Semel himself. In my opinion, the facts, without quoting them in extenso, do not justify me in assuming that these resolutions were passed.

Se cond. It appears, however, that Mr. Semel acted as secretary and counsel for the corporation, and I have no- reason to doubt that he gave his best efforts in these capacities to the corporation. It seems to me that, in the absence of a specific agreement between the complainant and the defendant, the question of his compensation as secretary and counsel is a matter of law and can be decided in a quantum, meruit therein.

On the incorporation of the company Mr. Semel was given two shares of stock, and the counter-claim is that he should be required to return this stock, because it was only given to him as a matter of convenience. However, it appears thai he voted the stock by prox}r, which at any time can be revoked, and I think that the counter-claim should be denied, and it should .be decreed that he is the absolute owner of these two shares of stock.

The testimony in this case is rather voluminous, and I have not thought it wise to summarize it here because it deals almost entirely with matters of fact. I shall therefore deny the application of the complainant for a decree for specific performance, and shall deny the counter-claim directing that Mr. Seme-1 pay back to the corporation the two- shares which-he held at the incorporation of the company and still holds subject to- proxies.


text:
    East Jersey Water Company, complainant, v. The City of Newark and The Town of Nutley, defendants. East Jersey Water Company, complainant, v. The City of Newark and The Town of Kearny, defendants.
    [Decided July 12th, 1924.]
    1. Where a contract in restraint of trade is injurious to the public interest it will not be sustained, although it is reasonable between the parties.
    2. A contract limiting the power of a city to sell its excess water is an illegal restraint of trade.
    3. Where a water works and water supply was transferred absolutely to a city, that city has an absolute legal right to do what it pleases with any excess of its water supply.
    4. If a water company has a claim against a municipality by reason of the fact that it is not supplying the municipality with water, but another is, such claim can be settled by an action at law, and equity mil not interfere.

      5. A matter is not res adjwdioa-ta unless the parties are the same in Doth suits.
    C. The doctrine of impairment of a contract does not apply to a contract that was bad at its inception.
    On bill, &C.

      Messrs. Humphreys & Sumner (by Mr. William M. Wherry), for the East Jersey Water Company.

      Mr. Eugene T. Sharkey and Mr. Mark A. Sullivan, for .the city of Bayonne.

      Mr. Merrill Lane and Mr. Frank II. Sommer, of counsel with the defendant municipalities. ,

      Mr. Jerome T. Congleion and Mr. Joseph G. Wolber, for the city of Newark.

      Mr. J. Harry Hull, for the town of Nutley.

      Mr. John H. Cooper, for the town of Kearny.
   Church, V. C.

This is a motion to strike out bills of complaint brought by the East Jersey Water Comp’apy against the city of Newark and others, and involves a contract made by Newark to supply water to the town of Kearny, and another contract to supply water to1 the town of Nutley.

The complainants set up a contract made between the Newark aqueduct board and the mayor and common council of the city of Newark, the Lehigh Valley Railroad Company and the East Jersey Water Company, on September 24th, 1889, providing that the East Jersey should construct and turn over to the city of Newark a system, of water works. The fifteenth clause of the contract reads as follows:

“It is further covenanted and agreed by and between the parties to this contract that the party of the third part—Newark—‘in the use of the water to be delivered or rpurchased under this contract may supply, not only the inhabitants within the present or any future corporate limits of the city of Newark, but also the inhabitants of the townships of Belleville, South Orange, East Orange and Clinton; but will not supply public or private corporations or persons, for use outside of the territory aforesaid. And it is also understood and agreed that from and after the completion of the works hereby contracted for and while the city of Newark shall be supplied thereby, neither the party of the first part nor of the second part’—that is the Lehigh Valley and the East Jersey—‘nor the Morris 'Canal and Banking Company, nor the successors or assigns of said corporation, or either of them, shall or will furnish or supply any water, or sell or assign any water rights to any person or corporation, for use within any part of the territory aforesaid.’ ”

Nutley and Kearny are outside of the territory which, under the terms of the contract, Newark has a right to supply. One of the reasons for striking out the bill is that this provision in the contract is void because in unreasonable restraint of trade. It is concerned with the use of a necessity of life, to wit, water. The contract restricts Newark from supplying water outside of the city of Newark, with the exception of Belleville, South Orange', East Orange and Clinton absolutely, but it does not require the East Jersey Water Company to furnish water to any other municipality. There is no duty laid upon the water company to furnish water anywhere. Nqwark is not to supply outside of a limited territory whether the East Jersey is, in fact, supplying outside of the territory, or whether it is in a position to so supply. In other words, a condition might arise in which the territories outside of those specifically mentioned in the contract would be bone dry. It should be noticed that since the making of the contract Newark has supplied water to Bloomfield and Glen Ridge, both of which are outside the territory allotted to Newark by the fifteenth clause of this contract. The supply to Bloomfield was with the express consent, of the complainant, which Newark obtained for a valuable consideration. The supply to Glen Ridge was with the consent of the complainant, and was furnished from January 24th, 1918, to March 12th, 1919, to meet an emergency arising during the late war. There was, therefore, an emergency recognized in these pleadings, under which the city of Newark was authorized to go outside of the contract.

The pleadings also show that Newark now has an amount of water in excess of its needs, which, if it cannot dispose of, must go absolutely to waste.

The contention of the complainant is that, no matter how much extra water Newark has, it cannot sell except as specified by contract. In other words, if Newark should give up its present water works, it cannot use them for any purpose whatever. The fact that Newark has already disposed of property which, in its opinion, was not necessary for its water supply system, was not alluded to by counsel on the argument or in the briefs, but it is the fact that property owned by the city of Newark for water purposes was so disposed of.

See Astley v. Board of Commissioners of the City of Newark, 119 Atl. Rep. 187, 188.

This property was used as a reservoir by the city from some time in the seventies until 1912, when its use as a reservoir in connection with the water supply, which was then being received from the East Jersey, was abandoned. On December 16th, 1889, the Newark aqueduct board adopted a resolution, under the terms of which certain properties, which had been acquired by the city were set apart and dedicated for use as a public park, subject to the right of the city to use, construct and maintain reservoirs and pumping stations. The resolution, in part, is as follows:

“liesoVeed, That the land herein described is not required for the purpose for which it is purchased, and that the common council do hereby assume’ control 'of said land and prepare and allow the same to be used by the public as a park or place of recreation, subject, however, to the right of the Newark aqueduct board or the city to use, construct and maintain on said- land, or any part thereof, reservoirs and pumping stations for supplying the city with water.”

When the Essex county park commission was created under chapter 91 of the pamphlet laws of 1895, and, under the authority of that act, the city of Newark transferred this •property to the park commission. This act of 1895 was attacked in the courts as unconstitutional, not, however, specifically on this ground. The court of errors and appeals in a unanimous decision, recorded in Ross v. Freeholders, 69 N. J. Law 291, sustained the constitutionality, the last'clause reading, “the County Park act of March 5th, 1895, is constitutional.”

In 1912 the use of the reservoir was abandoned for water supply purposes, and the city attempted to use the reservoir site for a public swimming pool. • The park commission objected and ceriioraried the ordinance, and in the case of Astley v. Board of Commissioners, supra, the court of errors and appeals sustained the validity of the control of the park commission over this property. It will therefore be seen that, with the consent of the courts, assets of the city of Newark for water purposes have been diverted, notwithstanding the contract in question.

Originally, any restraint of trade was void, but gradually limited restraint of trade began to be recognized. The theory seems to be that the exception to the old rule is that there must be a public policy requiring the restraint which outweighs the public policy forbidding it.

We, therefore, come to the question as to whether a restraint in the use of a commodity, which is vital to the life and health of the community, can he restrained by any contract, and it must be noted that this contract was made by representatives of the city of Newark, a public municipality, and that the East Jersey is a public utility. The general rule is stated in 13 Corp. Jur., tit. “Contracts,” 478 § 422, as follows:

“Where a contract in restraint of trade is injurious to the public interest, it will not be sustained, although it is reasonable as between the parties. This is particularly true of contracts affecting business of giiKSi-public character, such as that of railroads, telegraph, telephone, gas, electric and other public service corporations.”

It should be noted that water is a commodity, the restraint of which would be more injurious to the public than any of those mentioned. This rule has been applied with respect to illuminating gas.

In Gibbs v. Consolidated Gas. Co. of Baltimore, 130 U. S. 396; 32 L. Ed. (at p. 979), the supreme court of the United States, speaking through Chief-Justice Fuller, said: “The supplying of illuminating gas. is a business of a public nature to meet a public necessity. It is not a business like that of an ordinary corporation engaged in the manufacture of articles that may be furnished by individual effort. New Orleans Gas Co. v. Louisiana Light and Heat Co., 115 U. S. 650 (29, 516); Louisville Gas Co. v. Citizens Gas Light Co. 115 U. S. 683 (29, 510) ; Shepard v. Milwaukee Gas Light Co., 6 Wis. 539; Chicago Gas Light and Coke Co. v. Peoples Gas Light and Coke Co., 121 Ill. 530; West. Rep. 63; St. Louis v. St. Louis Gas Light Co., 70 Mo. 69. Hence, while it is justly urged that those rules which say that a given contract is against public policy, should not be arbitrarily offended so as to interfere with the freedom of contract (Printing Co. v. Sampson, L. R. 19 Eq. 462), yet, in the absence of business of such character that it presumably cannot be restrained to any extent whatever without prejudice to the public interest, courts decline to enforce or sustain contracts imposing such restraint, however partial, because in contravention of public policy. This subject "is much considered, and the authorities cited in West Virginia Transportation Co. v. Ohio River Pipe Line Co., 22 W. Va. 600; Chicago Gas Light and Coke Co. v. Peoples Gas Light Co., 121 Ill. 530; 11 West. Rep. 63; Western Union Telegraph Co. v. American Union Telegraph Co., 65 Ga. 160.”

In West Virginia Transportation Co. v. Ohio River Pipe Line Co., 46 Am. Rep. 527 (at p. 535), the court said: “From the principles, which underlie all the cases, the inference must be necessarily drawn, that if there by any sort of business, which from its peculiar character can be restrained to no extent whatever without prejudice to the public interest, then the courts would be compelled to hold void any contract imposing any restraint, however 'partial, on this peculiar business, provided, of course, it be shown clearly that the peculiar business thus attempted to be restrained is of such a character that any restraint upon it, however partial, must be regarded by the court as prejudicial to the public interest.

“Are there any sorts of.business of this peculiar character? It seems to me that there are, and that they have been recognized as possessing this peculiar character both by the statute law and by the decisions of the court.”

And, again, on page 538:

“If I am right in the views which I have expressed, it would be contrary to public policy for the owner of a water drift mill to contract with another person, the owner of a mill site in the neighborhood, that he would not erect on it a water drift mill, because the business of grinding com, like that of railroading, is regulated by the statute law as one in which the public has a direct interest, and the necessary land may be condemned for the erection of such water drift mill.”

In Charleston National Gas Co. v. Kanawha National Gas, &c., Co., 6 Am. & Eng. Anno. Cas. 154, the court said:

“These two corporations were chartered by the state for public service and benefit. The supply of illuminating gas is a business of a public nature to meet a public necessity. It is not a business like that of an ordinary corporation engaged in the manufacture of articles that may be furnished by individual efforts. Hence, while it is justly urged that those public rules which say that a given contract is against public policy, should not be arbitrarily extended so as to interfere with the freedom of contract, yet in the instance of business of such character that it presumably cannot be restrained to any extent whatever, without prejudice to the public interest, courts decline to enforce or sustain contracts imposing such restraint, however partial, because in contravention of public policy. The subject is much considered, and the authorities cited in West Virginia Transportation Co. v. Ohio River Pipe Line Co., 22 W. Va. 600; Chicago Gas Light Co., &c., v. Peoples Gas Light Co., 121 Ill. 580; 13 N. E. Rep. 169; Western Union Telegraph Co. v. American Union Telegraph Co., 65 Ga. 160.” And on page 156:

“A combination of two coal companies to give a monopoly on coal was involved in Arnot v. Pittston, &c., Coal Co., 68 N. Y. 558. The court said: ‘A combination to effect such a purpose is inimical to the interests of the public, and all contracts designed to effect such an end are contrary to public policy, and therefore illegal.’ Ht is no> answer to say that competition in the salt trade was not in fact destroyed, or that the price of the commodity was not unreasonably advanced. Courts will not stop to inquire as to the degree of injury inflicted on the public; it is enough to know that the inevitable tendency of such contracts is injurious to the public.’ ”

East Newark v. New York and New Jersey Water Supply Co., 67 N. J. Eq. 265. “If a. municipality has a water of its own, and this supply is more than sufficient for its needs, there is a very good reason for investing it with the power to sell this water to neighboring municipalities, Both are obviously benefited. The statutes referred to (P. L. 1885; Gen. Stat. p. 655 § 950; P. L. 1884; Gen. Stat. p 2206 §§ 385, 389) do this * * * ”

I am of the opinion, therefore; that this contract, limiting the power of the city of Newark-to sell its excess water supply is an illegal restraint of trade.

Attention should also be called to the ninth paragraph of the contract between Newark and the East Jersey Water Company, wherein it is specifically provided that after the works had been delivered and constructed Newark should-have the right—

“To terminate that part of this contract which provides for the purchase of water by the party of the third part from the party of the second part by the party of the second part by the million gallons, by exercising the option hereinafter given, and to become the owner absolutely in its own right of the water, water rights, dams, reservoirs and works constructed by the party of the second part, for the purpose of this contract, with all their appurtenances.”

And it is further provided that under the exercise of this option and the payment of the consideration there should be transferred to Newark—

.“The dams, reservoirs, reservoir sites, conduit or conduits, and all the works of every nature and kind built and constructed by. the party of the second part * * * with all their appurtenances, together with water rights aforesaid, sufficient to supply fifty million gallons of said water daily forever,”

I think, therefore, that the fact that the water works and water supply was transferred absolutely, under this contract, gives the city of Newark the legal right to do what it pleases with any excess of its water supply. It bought the plant, and, under this paragraph, it also bought the water, because, as is obvious, the plant would be useless without the water. The same absolute title given to the plant, it seems to me, gives absolute title to the water.

It is also contended that there is an adequate remedy at law, and, therefore, the bills should be stricken out.

In the case of Sperry & Hutchinson Co. v. Vine Brothers, 66 N. J. Eq. 339, a bill was filed to- enforce a negative covenant. The covenant provided that the defendants would not use any other- coupons, trading stamps or similar device than that of complainant during the life of the contract. The court of errors and appeals, speaking through Mr. Justice Swayze, said (at p. 340):

“The question whether it is equitable to enforce specific performance against the defendants involves considerations aside from the question whether there has been a breach of contract by the complainant for which an action would lie. The jurisdiction to decree specific performance is based upon the inability of courts to give adequate relief. Brown v. Brown, 6 Stew. Eq. 650, 654; Blake v. Flatley, 17 Stew. Eq. 228; Rothholz v. Schwarts, 1 Dick. Ch. Rep. 477. * * *. In the present case, the injury to the complainant is the loss of a market for its stamps and consequent' loss of profit. There can be no difficulty in ascertaining how many of the complainant’s green stamps would have been required if their place had not been supplied by their competitors red star stamps, and the complainant’s profit thereon must be a matter of calculation. Assuming that the complainant has a legal right, the remedy a.t law is adequate.”

In the present case, if the complainants are injured, a suit at law, it seems to me, could be maintained, which would determine the actual monetary loss, if there be one, to the East Jersey Water Company, by reason of the fact that it is not supplying water to Kearny and Nutley, and Newark is.

Iii the cases .of Bloomfield and Sien Ridge, mentioned above, the East Jersey agreed with the city, as to what the city should pay it per gallon, and so-, it seems to me; that if the East Jersey be injured, the amount of gallons delivered by Newark to Kearny and Nutley can be ascertained, and the value of the water per gallon can also be ascertained.

.1, therefore, find that there is in this case an adequate remedy at law.

It is also contended that the provisions of the fifteenth clause of the contract under - discussion . have been adjudicated, and, therefore, the matter is res acijudicala. The doctrine of res adjudícala is that. • the parties .must be the same in both cases. In the eases-before me, there is an additional party in each case, to wit, the town of Kearny and the town of Nutley; neither of these Municipal ties is. party to the suit, mentioned in'-the argument. The doctrine of res adjudicaba was thoroughly, discussed in a case to which counsel have not called my attention, but which, perhaps, is the leading case on that point in this state. I refer to 8. Barbero v. Miller, 72 N. J. Eq. 248, the opinion by Vice-Chancellor Garrison, which was unanimously sustained by the court of errors and appeals in a per curiam, decision adopting the vice-chancellor’s reasoning.

It is also contended that there is a constitutional point involved, to wit, that any alteration in this contract would constitute an impairment of the contract and would be violating the decision laid down in the Dartmoulh College Case as to impairment of the obligation of -the contract. - '

Having decided that the contract in its inception was improper, I cannot see that there is anything in this contention, because, if there was no- proper contract, there is nothing to violate.

I am therefore of -the ppinion, for the reasons above stated, that the motion to- dismiss the bills be granted.


text:
    Hoffman Builders Supply, a corporation, complainant, v. Alfred A. Stein, receiver, &c., et al., defendants.
    [Decided July 17th, 1924.]
    1. The filing ol' notices under a contract for street improvements between a municipality and an individual, after the appointment of a receiver for the individual, is inoperative. By the terms ’ of the Municipal Lien act this court must determine the validity of the liens filed.
    2. The lien of laborers or contractors takes precedence over ány assignment.
    3. Mechanics’ liens are not void if filed within four months prior to the filing of a bill in insolvency.
    4. Interest should be paid from the time that the work was accepted by the municipality.
    Oil bill, &C.

      Messrs. Biker & Biker (by Mr. Theodore McCurdy Marsh), for the complainant.

      Mr. Alfred Stein, receiver.

      Mr. Louis If. Schenck, for the borough of Somerville.

      Mr. By man Ilerr, for the Somerville Trust Company-.
   Church, V. C.

The first questioh that should be decided is as to whether the contract is one with the state highway commission. The contract itself is on the last few pages of a very elaborate set of specifications prepared by the state highway department, but the contract is between the mayor and common council of the borough of Somerville and the' contractor, and the bond filed in the case is between the mayor and common council of the borough of Somerville and the contractor. The contract -is approved, however, by the chairman of the state highway commission.

If the contract could be construed to be between the state or any of its commissions, no liens could attach, but in this case the contract seems to be directly between Somerville and the contractor. The borough alone signed it and the contractor could only recover from the borough. If the state has reimbursed the borough, this must be some collateral agreement which does not appear in the case and which, it seems to me, cannot affect the main contract.

•Under P. L. 1921 ch. 246, the state can take over the entire highway and pay the full amount thereof. This would place the borough of Somerville in the position of acting as agent for the state highway commission. This has not béen done.

It is also contended that the state, having paid thirty per cent, of the expense of this highway, the rights of the four claimants, wrho filed liens prior to the insolvency, should only receive seventy per cent, of the fund because thirty per cent, is state money.

I cannot agree with this contention because, I think, as the case is now before me, it is a direct contract between the borough of Somerville and the contractor.

As will be noticed in the state of facts, there were claims filed before the appointment of the receiver and others after the appointment of the receiver.

Section 10 of the Municipal- Lien act provides that the court of chancery shall determine the validity of the liens filed and “shall make a decree directing the municipality, out of the moneys due from it to the contractor, to pay over to the several claimants the sums found to be due to them respectively, with interest and costs upon claims adjudged to be valid * * * but if the amount due from the municipality to the contractor is not sufficient to make such payments in full, then distribution shall be made ratably without regard to priority in filing claim.”

The claims filed after the receiver was appointed are, in my opinion, void. Mack Manufacturing Co. v. Citizens Construction Co., 85 N. J. Eq. 333.

I, therefore, find that the filing of the claimants’ notices after the appointment of the receiver was inoperative for all purposes, and the receiver cannot expect that the invalid claims could be revived or pro-rated.'

The Somerville Trust Company claims priority over lien claims by virtue of an assignment. The act of 1915, chapter 86, which is incorporated m toto in the net of 1918 (P. L. p. 1041), says, in effect, that the lien of any laborer or contractor shall have priority over any assignment. I believe that it was the intention of the legislature, in the act of 1918, to continue the provisions of the earlier act. I, therefore, find that the liens filed before the appointment of £he receiver take priority over the other claims and the assignment.

It has been suggested that the lien claims of the laborers. and materialmen are invalid because they were signed within four months of insolvency. The act under which this claim is made is P. L. 1919 ch. 208. I shall quote section 2:

“All levies, judgments, attachment or other liens obtained through legal proceedings against a corporation, if at any time such levy, judgment, attachment or other lien was obtained the said corporation be insolvent, at any time within four months prior to the filing of a bill or petition against it for the appointment of a receiver, * * * shall be deemed null and void * *

Mechanics’ liens are not obtained by legal procedure but, of course, they must be enforceable by court action. I do not think that these liens are affected by the statute referred to.

The only question yet remaining is as to the interest which should be paid by the borough of Somerville on the money still in its hands. Having decided that this was not a contract with the state highway department, I am of the opinion that interest should be charged on this amount from the time that the work was accepted by the borough, which was on January 25th, 1923. The interest should be at the rate of six per cent.

I will hear counsel on the fixing of the terms of the decree as to counsel fee.


author: Ingersoll, V. C.

text:
    Bertha Emma Flett, complainant, v. South Jersey Title and Finance Company, &c., et al, defendants.
    [Decided March 31st, 1924.]
    1. J. H. Flett died testate, leaving all his estate to his wife and two sons by name, in equal parts, naming his wife as executrix. At the time of his death he was the holder of an option to purchase certain land. The widow exercised the option in her individual capacity and purchased the property, afterwards selling it at a profit.
    2. Shortly' after the death of Flett a son was born to his wife. Said, that the profits arising from the exercise of the option accrued to the estate and that the posthumous child, being entitled to a share of his father’s estate, had an interest in the option and of the profits arising therefrom.
    On bill for relief.

      Messrs. Cole & Cole, for the complainant.

      Mr. Charles C. Babcock, for the defendants.
   Ingersoll, V. C.

At the time of his death, one John H. Flett held an option to purchase certain property in Atlantic City. Flett died on May 14th, 1905, testate. By his will, which was probated May 25th, 1905, his property was given to his wife, Bertha Emma Flett, and his sons, John H. Flett,'Jr., and William John Flett, in equal parts, and Mrs. Flett was named as executrix of .the will and guardian of the two children. Charles Flett, the infant defendant, was born shortly after his father’s death.

On March 10th 1909, Mrs. Flett, in her individual capacity, exercised the option and purchased the property in question, taking the title thereto in her own name.

She afterwards sold the premises to parties by the name of James, at a very much higher valuation than paid for bv her. After examination of the records, the defendant title company set forth in its certificate of search as an exception the possible interests of the infant son of the complainant, the two other sons having previously quit-claimed to the mother “all their right, title and interest in the premises.”

At the time of the settlement with James, Mrs. Elett assigned to the title .company a mortgage of $45,000, which she received from James, as security against loss, and the company issued its policy insuring the title to said property without excepting the possible “interest of the infant son.”

The bill is filed praying for a decree “that said Charles Elett has not now nor ever had any interest in the premises described herein or in the mortgage referred to-, and that the South Jersey Title and Einance Company be required to reassign to her the bond and mortgage herein referred tp, and that she may have such other and further relief as may be agreeable to equity.”

There is no contention that the posthumous child was not entitled to his share in the estate of his father.

The only question to be determined isj Has the estate of Elett any equitable interest in the results obtained by Mrs. Elett’s exercise of the option above referred to in her individual capacity ?

An unexercised option to purchase goes primarily to the executor of the lessee and afterwards to' his legatee. McCormick v. Stephany, 57 N. J. Eq. 257.

It is unnecessary to cite authorities, that one who holds property in a fiduciary capacity cannot purchase that property at his own sale. Certainly an executor cannot refrain from selling a valuable right—in this case an option to purchase—or exercising that right in her fiduciary capacity, and then in her individual capacity exercise the same to her personal advantage.

The complainant insists that at no time was the estate in financial position to exercise the option. I am unable to now determine this question, even if it were necessary so to do.

This option remained an asset of the estate. The executor exercised it, and the advantage or profits arising therefrom must be held as profits accruing to the estate.

The infant child has an interest therein, and the defendant title company, having insured against such interest, is entitled to hold the mortgage assigned as security to it against loss by reason of such insurance.

A decree will be advised dismissing the bill.


text:
    Matilda T. Landis, complainant, v. Vineland Historical and Antiquarian Society et al., defendants.
    [Decided April 7th, 1924.]
    1. A court which granted letters testamentary or of administration is generally the proper court to exercise jurisdiction in the settling of the accounts of the executor or administrator.
    2. After a proceeding has been begun in the orphans court, this court will not disturb it in its jurisdiction unless there exists some good, equitable reason why it should do so.
    3. No good, equitable reason for so doing proven to exist in present case.
    On motion to strike out bill of complaint.
    ... Mr. Walter H. Bacon, for the motion.

      Mr. Herbert C. Bartlett and Mr. Charles K. Landis, con$ra.

   Ingersoll, V. C.

The complainant, executor of the estate of Charles K. Landis, who died in 1900, files a bill of accounting in this court, attaching a summary of her account from December 31st, 19.16, to January 1st, 1924.

She recites that she is the surviving executrix of the estate, and is now acting as such executrix as well as trustee under the said last will and testament. That she has filed two intermediate accounts as such executrix in the office of the surrogate of Cumberland county-—first, for the period prior to November 1st, 1902, and the second from that date to December 31st, 1916.

That the said estate consisted largely of real estate holdings, and that she was compelled to conduct the management of said estate as a business and sell the lands owned by the estate at such times as the market was favorable. That such sales have, between the years 1900 and 1924, aggregated the sum of $281,118.40, and that she has distributed the sum of $220,000 among the legatees of said estate.

That at the present time there is due said estate upon land contracts the sum of $23,227.24, and upon mortgage given in part payment of land purchased, $25,820.

She further alleges that the devisees have, by common consent, and without objection, participated in the profits' of the conduct of said estate thus establishing a constructive trust in which each devisee owes a duty to the other accordingly, she desires to file, in this court, her account of the administration of said estate from the 31st day of December, 1916, to January 1st, 1924.

Application is made by one of the defendants for an order striking out the bill of complaint. Complainant relies upon Gilligan v. Daly, 79 N. J. Eq. 36. That case, however, was a bill for an accounting, filed by legatees of decedent against the executor of the estate.

In this estate an application was made to this court many years ago by one of the legatees under the will “to remove the administration of the estate to the chancery court and for an accounting.”

The application to remove was denied. See Vineland Historical, &c., Society v. Landis et al. (April 10th, 1907), 66 Atl. Rep. 946.

Counsel frankly states that the conditions .and situation of the estate has not been changed since the last acocunting.

This court has concurrent jurisdiction with the orphans court of all matters pertaining to the administration and settlement of the estate of the decedents. Van Maler v. Sickler, 9 N. J. Eq. 483; Frey v. Demarest, 16 N. J. Eq. 236; Search v. Search, 27 N. J. Eq. 137.

“The orphans court is invested by statute with full jurisdiction over the accounts of executors, administrators, guardians and trustees, with all incidental powers necessary to effectuate this jurisdiction.” P. L. 1898 p. 715 § 2; p. 757 §§ 114, 134; p. 765 § 138; p. 767 § 140, &.; p. 782 § 174, &c.

“It is established that the jurisdiction of that court over the subjects committed by statute to its cognizance is a general jurisdiction, similar to that of the chancery and prerogative courts, and that its authority over the accounts of trustees under wills is as ample as that of the court of chancery.” Pyatt v. Pyatt, 46 N. J. Eq. 285, 288; Dunham v. Marsh, 52 N. J. Eq. 256, 261; affirmed, 52 N. J. Eq. 831.

“It goes'without saying that the accounts of a trustee under a will must be stated and settled on equitable principles, according to the truth and substance of the matter in controversy, and without regard to matters of form.” Woolsey v. Woolsey, 72 N. J. Eq. 898, 900.

The chancellor, In re Walker, 95 N. J. Eq. 619, quotes 24 C. J. 940, note 60 p. 941, as stating:

“A court which granted letters testamentary or of administration is generally the proper court to exercise jurisdiction in the settling of the accounts of the executor or administrator.”

After a proceeding has been begun in the orphans court, this court will not disturb it in its jurisdiction unless there exists some good, equitablé reason why it should do so. McCartie v. Murphy, 83 N. J. Eq. 195.

An order' to strike out the bill will be advised.


text:
    Coleman F. Leaming et al., complainants, v. Sarah Ann Huffman et al., defendants.
    [Argued May 8th, 1924.
    Decided May 15th, 1924.]
    Where a will provides that a legatee shall have a life estate in certain personalty, with a power of disposal during his lifetime for his “comfort, convenience, pleasure and happiness,” and the legatee does not dispose of it during his lifetime, such personalty, after the death of the legatee, should be distributed by the executors of the testatrix in accordance with the terms of the will, the legatee’s interest therein having terminated at his death.
    On bill for construction. On final hearing.

      Messrs. Bleakly, Stockwell & Burling, for the complainants.

      Mr. J. Spicer Learning and Mr. Harry S. Douglass, for the defendants.
   Ingersoll, V. C.

Jane S. Huffman died in January, 1906, testate. Her will was duly probated in the surrogate’s office of Cape May county, and her husband, John B. Huffman, qualified as executor.

Clauses six, seven and eight of said will read as follows:

“Sixth. I do also give, will and bequeath and devise unto John E. Huffman aforesaid in case he shall survive me, all the residue of my property real and personal of every kind and description to him to have and to hold the same during his natural life and then I do will and bequeath Eleven Hundred Dollars thereof to the Baptist Church of Cape May Court House, New Jersey, incorporated as the First Baptist Church of Cape Mlay; and I do bequeath and direct that six hundred ($600) Dollars of the said eleven hundred dollars shall be put out at interest on first Bond and Mortgage on land worth double that amount by the Trustees of said church in the name of the said church and that the interest thereof be used exclusively to put and keep in good order and repairs and to- continue to put and keep in order ’and repair the cemetery lot and every thing therein and the fence around the same where my dear son Newton Swain is buried and where I have directed in this will I shall be buried; I direct that said lot and all things therein shall be kept in as nice order in every respect as the whole of the interest of the said Six Hundred Dollars will keep the same and the other Five Hundred dollars of the said Eleven Hundred Dollars, I do will, bequeath and direct shall be put -out at interest in the name of the said Church on first Bond and Mortgage on land worth double that amount and the interest used exclusively to assist in paying the salary of the Pastor of the said Church; the said Five Hundred Dollars of the said Eleven Hundred Dollars, being given in consideration of my confidence in the said Church through their Trustees to attend to and 1-ook after the said Cemetery lot aforesaid as directed in this will after I and my said husband are both dead; this eleven hundred dollars is subject to thé' right of my husband to have and to hold the same during his natural life as before stated. ’
“Seventh. I do also give, will and bequeath unto John B. Huffman my beloved husband in case he shall survive me in addition to what I have willed to him, his heirs and assigns forever absolutely, and in addition to what I have willed to him during his natural life the right and power to sell and conyey and assign and use for whatever he choses any part or all of my real estate and personal property including the principal of Bonds and Mortgages, notes and other obligations bank stock or shares, Railroad stock or shares and land and houses and buildings and any other property real and, personal whatever as in his judgment may be necessary for his comfort, convenience and pleasure and happiness except the Six Hundred Dollars ¡of the Eleven Hundred Dollars willed to the Church aforesaid, the interest of which is to be used exclusively to keep in order the Cemetery lot aforesaid after my husband’s death. And as to the said Six Hundred Dollars he is to have the same his natural life and T do give, will, bequeath and devise and direct that the said John.B. Huffman shall have the full and unlimited right and power to do so according to his own judgment and choice in every way except -only by his last will and testament, without any restraint or control dictation or direction from any person or persons Court or Courts, and in order to- carry out this part of my will he may sell and convey any part or all my real estate by public or private sale and make a ‘good title for the same to the purchaser or purchasers and the said purchaser or purchasers shall not be held in any liable for the application of the purchase money; he the said John B. Huffman may mortgage any part or all of my real estate and assign any bonds and mortgages sell any bank stock or shares, railroad stock or shares and make a good title to the person or persons to whom he sells or assigns the same, the object of this section of my will is that my said husband shall be made and be as comfortable and happy all his life as my property can cause him to be even though it may take all my property real and personal to accomplish this end except the Six Hundred Dollars of the Eleven Hundred Dollars willed to the church aforesaid, the interest of which is to be used exclusively to keep the Cemetery lot aforesaid in order after my husband’s death.
“Eighth. I do will and bequeath that on the death of my said husband that whatever my remain of my property not including anything for rents interest, dividends or anything of that kind whatever, those being willed to my said husband absolutely and not including any which he may sell, convey, assign or mortgage or in any way be disposed of by virtue of the seventh section of this will, shall be sold and after the church aforesaid has been first paid the said Six Hundred Dollars to l^e put out at interest to be used exclusively to keep the cemetery lot in order as hereinbefore directed the said church shall then be paid the said Eive Hundred Dollars before mentioned and Violet Armour if she shall survive us shall be paid the sum of Eight Hundred Dollars which payment shall 'be in the order aforesaid then the balance whatever it may be shall he equally divided in four equal shares and go as follows, one fourth part to my niece, Eliza Cresse and to her heirs and assigns forever, and in case she survives me, and if not then to my sister Rubamah W. Cresse and to her heirs and assigns forever; and one fourth part thereof to my niece, Leonora Bennett, and to her and to her heirs and assigns forever in case she survives me; and one fourth part thereof to my nephew Frederick W. Bennett and to his heirs and assigns forever in case he survives me; and one fourth part to my nephew Coleman F. Learning and to his heirs and assigns forever in case he survives . me; and in case any one or more of them that is mentioned above shall not he living at the death of my husband, John B. Huffman, then to those that are living share and share alike.”

John B. Huffman died on November 18th, 1923, testate. His widow (he having remarried), Sarah Ann Huffman and Harry S. Douglass, qualified as executrix and executor.

At the time of the death of said John B. Huffman, he had in his possession the securities named in the bill of complaint. These securities constituted the residue of the securities, which had come into his possession as executor of the estate of Jane S. Huffman, he having sold others, and were, after his death, found among his personal papers, tied in one bundle with some of the envelopes endorsed in'the name of Jane S. Huffman.

Huffman, in March, 1915, filed in the said surrogate’s office what he termed a “first account of the estate of Jane S. Huffman,-” in which he charged himself with the securities in question and the income rising therefrom, crediting himself as executor, with the interest and dividends paid to himself as legatee.

He also attached a list of the assets of the estate of Jane S. Huffman remaining in his hands. This list included the securities set forth in the bill of complaint, together with the few small mortgages which were afterwards paid and canceled of record. I have not found it necessary to consider as evidence the testimony of Huffman’s statements as to his interests in his wife’s estate.

The bill is filed praying that a decree may be entered to the effect "that the said John B. Huffman under the said will did not become the absolute owner of the residue, of his wife’s estate, but that he took therein only a life interest with a power of disposal; and further, that said John B. Huffman did not exercise said power of disposal at any time during his lifetime, and did not convert to- his own use by sale-, conveyance, transfer or other means said property, and that complainants Coleman F. Learning, Eliza C. Peirce, Leonora Bennett Howard are the owners of and now entitled to receive from the said defendants Sarah Ann Huffman and Harry S. Douglass, executors of John B. Huffman, deceased, all of said property hereinabove enumerated, and any other property forming a part of the residue of the estate of Jane S. Huffman, deceased, with the exception of the sum of $1,100, mentioned in the eighth clause of said will, and the sum of $800, bequeathed to Violet Armour, if the said Violet Armour survived the said John B. Huffman.”

It is undisputed that Huffman, with the exception of the collection of the few small mortgages above referred to, never attempted to exercise the power of disposal given him by his wife’s will.

All endorsements showing payment of interest made by him upon the securities were signed as executor. He also endorsed upon the note made by him to- his wife the payments of interest as they became due, signing them also- as executor. In the case of the change in capital stock of the First National State Bank of. Camden, he received and accepted the new certificate in the name of the estate of Jane S. Huffman.

This practice of signing as executor continued until he became unable to attend to his affairs personally, and thereafter the receipts Avere signed by his wife without-the use of the title “executor.”

The poAver to dispose was as expressed in clause seven above quoted.

It is evident that John B. Huffman did not exercise the right and power to dispose of these securities, and that it Avas not necessary so to do for his “comfort, convenience and pleasure and happiness” is clearly shown by the inventory filed in his estate. This inventory, in addition to the items in issue, amounting to $19,715.75, shows a personal estate of over $50,000.

The statement of facts recited by Vice-Chancellor Poster, as quoted by the court of errors and appeals in McDermott v. Zimmerman, 89 N. J. Eq. 215, are strikingly similar to the facts in the present case, and that case is dispositive of the question now under consideration.

I, therefore, find that Huffman did not exercise the power of disposal of the stocks, securities and mortgages set forth and described in the complainants’ bill (being a portion of the property given him by the Avill of the said Jane S. Huffman), and that Huffman’s estate in them was not absolute, but Avas limited to his life, and should now be distributed in accordance with the terms of her will.

A decree will be advised that the said stocks, securities and mortgages be delivered to the executor of the estate of Jane S. Huffman, to be by him properly distributed and accounted for.

My attention has been called to the opinion of Mr. Justice Swayze in McCloskey v. Thorpe, 74 N. J. Eq. 413, in which he states:

“The principle underlying the case is thus stated by Chancellor Green in Annin's Executors v. Van Doren’s Administrator, 14 N. J. Eq. 135: “The cases rest upon the principle that if the testator, either expressly or by implication, manifests an intent to vest in the first legatee the uncontrolled poAver of disposing of.the property, such power involves the idea of absolute ownership, and the limitation .over' is void, as inconsistent with the rights of the first legatee. The uncontrolled power of expenditure necessarily implies absolute ownership as fully as the power of disposing of it. And tills difficulty can only be overcome by limiting the right of expenditure to so much as may be necessary for the support of the legatee.’ ” In the present case the limitation is specific.


author: Bentley, V. C.

text:
    Jemma Corsi, petitioner, v. New Jersey State Board of Children’s Guardians, defendants.
    [Submitted December 27th, 1923.
    Decided January 16th, 1924.]
    1. In a controversy over the possession of a child, its welfare will be the paramount consideration in controlling the discretion of the court. The strict right of the parent will be passed by if a judgment in observance of such right would substitute a worse for .a better custodian.
    2. Where a young unmarried woman gave birth to a child, and her father, and others, took the child, and after attempting unsuccessfully to leave it at an institution, later abandoned it on a doorstep, and later it was taken by the New Jersey state board of children’s guardians, who placed it in the h.cuse of a man and wife to -be taken care of, who lavished upon the child the wealth of affection that they would bestow upon their own children, and are financially able to take care of it, the welfare is the court’s main consideration, and the court will not return it to its mother, who remains a resident of her father’s house and under his influence.
    3. Where the mother of the child removes from her father’s house, and takes up her abode with a respectable and worthy family, this court, in the interest of the welfare of the child, will permit the New Jersey state board of children’s guardians to place the child in the custody of its mother, under the observation and direction of the society. ''

      Oil petition, &c.

      Mr. Frank A. Rizzolo, for the petitioner.

      Mr. John J. Solan, for the respondent.
   Bentley, V. C.

This is a proceeding founded upon a writ of habeas corpus by a natural mother, a young woman twenty-nine years of age, against the state board of children’s guardians.

The petitioner and her family emigrated from Italy upon the invitation of one Yanterini and his wife, and appear to have lived with the latter, down to the time of the happenings out of which this suit grows. During the night of the 1st of February, 1922, the petitioner, who was and still is unmarried, gave birth to the child for whose custody she now asks. She was unattended by anyone, and appears to have actually delivered herself before her father learned of her condition or the birth. He was greatly excited thereby and called in the wife of Vanterini, who was his landlady and resided in an upper floor of the same building, and sought her assistance. Subsequently, on the same night, or early the following morning, a third party, a man named Tamburelli, was taken into the secret, and, as a result of the deliberation of these three, they prevailed upon her to have the baby placed in a home devoted to the care of children in their neighborhood. Due to a rule of such places, the admission of so young a child was refused, and thereupon the petitioner’s father, Mrs. Yanterini and Tamburelli secured a taxicab and drove to West Hoboken to the home of another member of the family. From this place the petitioner’s father and Tamburelli took the child, leaving the Yanterini woman for the time being, and went to an apartment-house in the same town, where they abandoned the child in the doorway.

Proceedings were thereupon taken under the act, and the child was committed to the almshouse of Hudson county, where it was subsequently claimed by the respondent, and, eventually, placed by it in the home of a man and his wife in the city of "Bayonne to be cared for. In the following summer the petitioner, her father, Tamburelli and Mrs. Vanterini were apprehended and indicted for conspiracy, and, subsequently, each pleaded non vull thereto. More than six months elapsed between-the time of the disappearance of the child and the arrest of the petitioner, during all of which time no efficient effort was made by her, or anyone upon her behalf, to learn of the whereabouts of her child. Repeatedly upon the witness-stand, both in the original hearing and afterwards in the rehearing, I called upon this young woman to explain why she did not complain to the police or seek the services of a lawyer; and she attempted to excuse her inactivity behind an allegation of ignorance. I also1 repeatedly asked her father why he did not take steps to learn what had become of the child, and he pretended that he had sent his son to find out from Tamburelli where the baby was, although he knew and admitted that he was present when the child was abandoned, as I have described. It is, of course, incredible that this man, no matter how ignorant he may be, could have supposed that Tamburelli was acting properly when, in the dead of night and in the winter time, he left this infant upon a doorstep.

Assuming that this woman’s story is true, and that she did nor know her child was being abandoned, it is impossible for me to escape holding that her father certainly did know what he was doing. She still lives with him in the home that he dominates and which is shared by one of her brothers, and will have to remain therein. She is unmarried, without means to support herself, and, of course, would be doubly handicapped should she move away to live where she would have to devote her time to making a living and. the care of this two-year-old boy. I feel that it would be a perilous thing for the child’s welfare to take it from its present custodians and return it to the influence and power of its grandfather. The people with whom the child now lives are industrious Polish people. The wife, although married many years, is without children, and is lavishing- upon this baby the wealth of affection that she would have bestowed upon her own children if she could have had them.' She is a quiet, well-appearing young woman, who seems to have given the best of care to- the little boy. Her husband is employed by one of the large corporations doing business in Bayonne, at wages of $38 a week, and has been employed by the same company for many years, and seems to be quite as attached to the child as is his wife.

At this late day, it is the well-established policy of courts of equity to give paramount consideration to the welfare of the child under such circumstances as are developed in this proceedings. In the leading case of Richards v. Collins, 45 N. J. Eq. 283, the court of errors and appeals say:

“In a controversy over its [a child’s] possession, its welfare will be the paramount consideration in controlling the discretion of the court. The strict right of the parent will be passed by, if a judgment in observance of- such right would substitute a worse for a better custodian.”

It might be said, in passing, that in the case just quoted much stress was laid by the court upon the fact that the infant in that case, as in this, had grown up without any association with the household and family of its parents. In the instant case, this child has been among strangers since the day of its birth. In the able and earnest brief hied by the petitioner’s solicitor, stress is laid upon Hasselman v. Haas, 71 N. J. Eq. 689; Ex parte Hoines, 112 Atl. Rep. 613, and Ex parte Judge, 91 N. J. Eq. 395. I do not feel that these decisions should influence my judgment in favor of the petitioner, for the reason that they all present different facts. In these cases there was nothing to choose, so far as the welfare of the child was concerned, between the parent seeking a return of his child and the respondent in whose custody it then was. The opinions of Vice-Chancellor Garrison, Vice-Chancellor Stevenson and Vice-Chancellor Backes, respectively, stress the fact that proper conditions would surround the infant if his custody was again given to its parents. In the ease sub judice, on the contrary, while I have nothing to say against the petitioner, I believe that, on past performances, I would be gambling with this little boy’s future should I place him within the reach of the grandfather, who has once attempted to make away with him, and whose sense of shame and hostility to the boy must be quite as keen to-day as at the time the baby was born.

I feel that I am sustained in my present determination by the opinion of Mr. Justice Minturn, in Fischer v. Meader, 95 N. J. Law 59. The circumstances of that case and the instant one are very close, if not parallel, excepting that in the case in hand my fear of the consequences to the child grows, not from the character of the petitioner, hut, as I have said, from the character of her father, as it has been portrayed. Were it not for his influence and the danger that radiates from him, a different situation might exist, and I might say as between the equal qualification of the mother and the present custodian the legal right of the former would prevail, in analogy to the equitable maxim.

ADDITIONAL OPINION PILED MAT 0TH, 1924.

After having prepared the foregoing, and just before I would have filed the-same, I was waited upon by the petitioner and a Mrs. Graf, who is distantly related to her by marriage. The latter is a matronly and very intelligent woman who- is married and lives with her husband and one adopted child, she having no children of her own. She resides, I am informed, in a house containing only her own family, in the suburbs, and I have no doubt that her home is an eminently proper one for any child to occupy. There have been two hearings on the petition in this case, and I learn from these -women that the petitioner had grasped the fact that my disinclination to grant her prayer was hot caused by any feeling against her, but only because of the danger to the child I apprehended would result from again throwing him within the baneful influences of his grandfather. This young woman has, for several months past, taken up her residence with Mrs. Graf, and assures me that she will perpetually maintain her child away from the home of her father if again entrusted with his care and custody. She has secured employment, so that she is now in a position of affluence for one of her circumstances, offers to reimburse the present foster parents of her son, and Mrs. Graff agrees that she will attend to the wants of the little boy while his mother is engaged in her employment. This, of course, places an entirely different light on the situation, and brings the matter within what I had to say in differentiation of this case from those of Hasselman v. Haas, Ex parte Hoines, Ex parte Judge and Fischer v. Meader, supra. If, furthermore, her expression of intention is made bona fide, it contains the strongest proof of the overweening love and affection of this young woman for her offspring. She has been willing to sever and uproot all the ties and tendrils of her entire life to secure the return to her of her child, and manifests an exhibition of devotion that I am unable to withstand, not as a matter of sentiment, but as evidence of her character and the propriety of giving her an opportunity to rear her son, which is a right any court interferes with only in the extremest cases.

However, protestations of intention are so easily made, and promises so frequently broken, that I do not purpose gambling, as I have before intimated, with the infant’s safety. The respondent, through its superintendent, has made a suggestion which, I think, solves my difficulty. It agrees that if the custody of this boy be not disturbed it will place him with the petitioner, there to remain so long, and only so long, as she gives him proper care in proper surroundings. Therefore, I will advise an order in accordance with the plan I have just outlined, and any future application that may be appropriate to carry such a solution of the difficulty into effect may be made.


text:
    In the matter of John E. Lippincott, an infant.
    [Submitted April 1st, 1924.
    Decided May 9th, 1924.]
    1. On an application by one set of■ grandparents of an orphan child for the right of visitation as against the .other grandparents, who are its custodians, both sets being able, morally and financially, to give it the care and attention requisite to its health, happiness and education, the extreme youth of the child and the advanced age of both sets of grandparents, will move the .court, in the interest of the child, ib grant the right of visitation to those grandparents who have not now the custody of the child, to such extent as shall seem most to the child’s interest.
    2. The statutory appointment of a guardian by the father of a child in his lifetime would be controlling in a contest for custody, but is not decisive in deciding the right of visitation.
    On petition.

      Mr. Arthur T. Dear, for the petitioner.

      Mr. Louis G. Morten, for the respondent.
   Bentley, V. C.

This is a petition for the custody of an infant, addressed to this court in the exercise of its general jurisdiction over the interests of infants.

The pleadings are most informal, but all objections thereto have been waived by the respondents, who' consented to. go to final hearing upon them as they then stood and now stand, and to have the rights of the petitioners fixed by a decree herein.

The infant, who was born September 7th, 1917, is named John E. Lippincott. His mother died on Eebruarjr 23d, 1919, and his father died on May 21st, 1923. Prior to the mother’s death the parents, with their son, resided in the city of Brooklyn, New York, where the petitioners then lived and continue to do so. Very shortly thereafter the father took the boy and removed to the home of his parents, the respondents, in the city of Jersey Citjq where he subsequently also died after haying first executed a document delegating to his mother “the care, custody and nurture” of his son, pursuant to the statute. 2 Comp. Stat. p. 2627. Until the time of his mother’s death the infant was in the usual contact and association with all of the parties. After her death a quarrel occurred between the boy’s father and the petitioners, which resulted in a rupture of all relations-, when, as just said, the surviving parent with his child took up his residence with the respondents, and it was in the state of mind created by this quarrel that the instrument just referred to was prepared and signed. At the time of the mother’s death the infant was only about a year and a half o-ld, and ever since has been kept apart and away from them, and, consequently, can hardly be said to- have made their acquaintance or to have formed any attachment for them. There is no allegation or intimation, but that the respondents are eminently proper persons to have the care and custody o-f this little boy, who is now in his seventh year, attending school, being religiously instructed and in every other way securing all necessary material, mental and moral care. Likewise, there is no evidence that the petitioners are not also eminently respectable and proper persons for the same purpose, and, in fact, I was impressed by the fact that all of them are, while not people of wealth, substantial, hard-working and very worthy individuals.

Thus, there is presented an application by o-ne set of grandparents of an orphaned infant for the right of visitation as against the remaining grandparents in whose custody the infant resides, without any charge against the surroundings in which he now lives. On the hearing, the prayer for custody contained in the petition was abandoned, and under the general prayer it was requested that a portion of the boy’s time be awarded the petitioners. I know of no case where a similar request has ever been made of, or decided bjr, any co-urt in any jurisdiction. It must be granted, if at all, under the broad inherent jurisdiction of this court, in analogy to the power of the state as parens patriae. The interest of the state in the children thereof is so broad as to almost defy limitations. In a sound judicial discretion, it has even gone to the extent of refusing custody to the very parents of a child where it was to its better interests on account of the character of those who> above all others, should have been its legal custodians, and placing the ward with a stranger. Richards v. Collins, 45 N. J. Eq. 283; Cunningham's Case, 61 N. J. Eq. 454; Pom. Eq. Jur. § 1307.

The paramount consideration in all such cases is the welfare of the child itself. Richards v. Collins, supra. This ease, as said by Vice-Chancellor Lane in Cole v. Cole, 89 N. J. Eq. 381, has been uniformly cited with approval. It is an opinion by the court of errors and appeals and the leading case on this subject. It is there said:

“In a controversy over its [a child’s] possession, its welfare will be the paramount consideration in controlling the discretion of the court. The strict right of the parent will be passed by, if. a judgment in observance of such right would substitute a worse for a better custodian.”

Mr. Justice Mintum, in Fischer v. Meader, 95 N. J. Law 59, and Vice-Chancellor Leaming, in Kapcinski v. Richardson, 94 Atl. Rep. 32, deal at great length with the fact that the day has long since passed when the rights of infants, to be properly nurtured, are subordinate to the strict legal rights of parents or others in and over them, and they regarded as chattels to be disposed of as if title to them passed like any ordinary property.-

But, it is said by the respondents, even conceding the jurisdiction of this court, no proper case has been made out for its exercise, because by the hypothesis, so to speak, the child is now in the custody of grandparents who are morally and •financially able to give it the care and attention requisite to its health, happiness and education. I do not think, it is true, that there is an)"- appreciable difference in the material advantages that the respective parties are able to give him. There was some slight contest as to' the surroundings of the respective homes and financial ability, but there is no such disparity between them, in either respect, as would cause this court to choose' one rather than the other. In fact, as Vice-Chancellor Stevenson pointed out in In re Hoines, 112 Atl. Rep. 613, the home of a millionaire would not be preferred to that of one entitled to the custody of a child, however humble, in which he could be brought up to become a valuable citizen. There is this consideration, however, which I feel is controlling so far as the welfare of this boy is concerned : As I have explained, he is not yet seven years of age. His grandparents are all advanced in years, and probably none of them can rationally expect to live for a great while longer, certainly not until this boy attains his majority. Should the respondents have the misfortune to die first, it will be of inestimable advantage and benefit if there shall have been cemented between him and the. petitioners that devotion and love that is materially fostered by the association of one with those in whose affection he should hold a prominent place. The petitioners have brought up and launched upon the world a generation of children, and now, in their declining years, there is a- fertile field to plant this offshoot of their family where he may flourish in their affection and receive and accentuate the love that will rejuvenate these grandparents. It is common knowledge that one cam not have too many friends, and that there axe no material advantages or wealth, station or power, that compare in advancing the happiness of mankind with true friends.

While in a contest for custody, as distinguished from visitation, under circumstances such as appear in this case, namely, the admitted propriety of character of the custodial grandparents, the statutory appointment of a guardian by the deceased father would be controlling, I do not feel that it should be permitted to stand in the way of what is regarded as necessary for the highest welfare of the infant. It could not have been intended by the legislature to have been binding in all instances on this court, as otherwise an unfortunate selection of a guardian by a surviving parent would result in the inability of the chancellor to remove a child from surroundings most inimical to' his physical, mental and moral welfare, to- say nothing of impairing of the constitutional jurisdiction of this court. Flanigan v. Smelting Co., 63 N. J. Law 647. Therefore, persuasive as the deceased parent’s selection of a guardian might be in a contest for custody, I do not conceive that I should permit it to interfere with my judgment in a suit for the right of visitation, where to disregard it would- result in a greater benefit to- a child.

On these considerations, I have determined that the jurisdiction to grant the prayer of the petitioners exists and should be exercised, upon the single ground that advantageous and proper as the present surroundings of the infant are, it will be to his benefit that he have the further advan*. tage of companionship with the petitioners; and while I will not disturb the permanent custody of the respondents, I will advise that the petitioners have the right to entertain him, under such conditions and at such times as will not interfere with his education. Yisitation at the respondent’s home is out of question, in view of the feeling existing between the parties and the unfortunate difficulties that have arisen among them in the past.

If counsel cannot agree, I will fix the terms with regard to the visits of the infant to the petitioners, as well as the form of bond which I shall require them to- give for the performance of the conditions imposed.


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    William Blancard and Eleanor B. Hewitt, complainants, v. Blancard & Company, Inc., a corporation, et al., defendants.
    [Submitted June 19th, 1924.
    Decided June 23d, 1924.]
    1. The authority of directors of a corporation is absolute so long as they exercise an honest judgment.
    2. Evidence examined and held that the directors of the defendant company have not done anything unfair, unconscionable or inefficient in their management of the company, and the rate of dividend to be declared and the salaries of the managers are subjects within the discretion of the directors, and under the evidence 'Offered in this cause, will not be interfered with by this court.
    On bill, &c.

      Mr. Pierre P. Coolc, for the complainants.

      Mr. George G. Tennant, for the defendants.
   Bentley, V. C.

This is a bill filed by two stockholders against the defendant company and all the remaining stockholders, three in number, to compel the company (a) to declare a dividend; (&) to reduce the respective salaries of the individual defendants, and (c) to compel them to restore to the company any excess of salaries above the value of the services by them each rendered.

Of course, the defendants raise no objection to the right of the complainants to file the bill, for the reasons commented upon by Vice-Chancellor Stevenson in Raynolds v. Diamond Mills Paper Co., 69 N. J. Eq. 299.

During his lifetime, Christian Blancard, the father of all the parties except the corporation, established a business for the manufacturing of settings for jewels, and, before his death, associated with himself therein the defendants Frederick Blancard and Eudolph Blancard (two of his sons) and Thomas A. Mountford. ■ In 1912, upon the death of their father, his two sons, still with Mountford in their employ, continued the business. They caused a corporation to be organized under the laws of New York, and transferred the business and all the assets thereto. From that time to the present the destinies of the enterprise have been in the hands of the individual defendants, the complainants having rendered nothing but the most nominal services. The defendant Eudolph has had the general supervision of the manufacturing plant, has been the financial agent of the company, designed and generally taken care of the designing of its products, fixed prices, and concerned himself in many other activities pertaining to his position. Frederick has discharged the duties of attending to the selling of the company’s manufactures and directing its office in the city of New York, through which the selling has been done. Thus, it will be seen that these men have been, as Vice-Chancellor Stevenson pointed out in the ease just mentioned, more than mere officers, and their activities have made them the agents and guiding spirits of the company. Mountford is a veteran toolmaker and jeweler, and the reliance upon his training, experience and ability, as expressed by the other defendants and their father, is not misplaced.

Originally, and until the year 1920, the entire business of the eompan}'- was carried on in the city of New York. About that time the lease upon the premises where the manufacturing was carried on was about to expire, and it was thought advisable to acquire a plant of their own in the city of Newark, New Jersey, because of a number of reasons, one of which being the enormous rents at that time prevailing in New York and all over the Metropolitan area. This project was carried out and also the incorporation of the present company in this state, and the taking over by the latter of all the assets of the New York company and the assumption of all its liabilities. The stock of the New Jersey company, one thousand one hundred and thirty shares in all, of a par value of $100 each, was divided among the live individual parties hereto in the proportion of fifty shares to Mountford and two hundred and seventy shares to each of the others. While incorporated in New Jersey, in 1920, there seems to have been no organization or corporate activity until a meeting of the incorporators on March 1st, 1922. The auditor’s report for the period ending December 31st, 1922, the last fiscal year before the filing of this bill, showed capital stock of $113,000, surplus of $195,395.17, and a net profit of $25,354.72 for that year.

At the time that Rudolph entered into the business it was not in a prosperous condition, but from the time of the death of the father down to the year 1920 it appears to have flourished, so that over the period covered by the last ten 3rears, lumping the fat with the lean, the stockholders have enjoyed an average annual dividend of eight and one-half per cent. Since 1920 there has been but one dividend declared, and that of only five per cent. Notwithstanding, however, the directors, at a meeting held on March 1st, 1923, voted to, and did, increase their respective salaries as follows: Rudolph from $12,512 to $14,300, and Frederick from $11,300 to $14,300. It was undoubtedly these increases of salaries, at the same time the dividends were reduced, that are the main causes of the complainants’ dissatisfaction.

Two objections are made by the complainants to the failure to declare a dividend of more than five per cent, in 1923, one because it could have been made-much larger out of the net profits of the preceding fiscal year, and the second because it could have been declared out of surplus. Upon the figures it would so appear. But it has been shown that there was then pending a claim against the corporation by the national government of something in excess of $23,000 for deferred income tax payment, and that, subsequently, the company was compelled to actually pay slightly more than $17,000 on this claim, and that to have dissipated any more of the net profits in dividends than was done would have been hazardous to the corporation. Furthermore, a document has been proved under which the New York company was obligated to pay to the widow of Christian Blancard an annuity for her support and maintenance not to exceed the sum of $10,000, and which obligation, of course, was assumed by the present company, as I have indicated above. I think from these facts it is indisputable that no larger dividend could have been safely made out of the profits of 1922.

But the complainants say, in the second place, that at all events a dividend could have been declared and should be now ordered out of what they charge to be an inordinate surplus above the needs of the company for its working capital. I do not see how I can say so, under the language to be found in the opinion of Mr. Justice Swayze, in Murray v. Beattie Manufacturing Co., 79 N. J. Eq. 604, and the authorities therein discussed. There is no question as to- the- jurisdiction of this court so to- do in a proper case, but I do- not feel that the necessary facts have been proved herein. In the case just mentioned, Mr. Justice Swayze reiterates the oft-repeated rule that the authority of the directors is absolute so long as they act in the exercise of an honest judgment. ^ In the present case, the testimony o-f the experts produced was to the effect that a surplus of $195,000, roughly, was not ^ unreasonable for this corporation to hold. The surplus is not composed of cash lying idly in banks, but has been plowed in, and is represented by additions to the business, such, for example, as the manufacturing plant in Newark. It is also significant that, contemporaneously with the establishment of their New Jersey manufactory, there was a change in the business carried on by the company. Prior to that time, it only produced parts of the jewelry into which the same were to go. For example, it did not produce a ring with the setting complete and ready for the jewels to- be incorporated in the ring, but only made the setting proper, which had to be fused upon a ring produced by the jobber from another manufacturer. The present business is steadily getting away from that obsolete method while acquiring, in this new field, customers, for the complete rings or such other ^ articles of jewelry as nra}1' be desired. It was thought prudent to build up a fund sufficient to finance the changes necessary to effectuate manufacturing the new product and tide over losses probable to occur in the transition period. Under these proofs, I cannot say that any dishonesty or fraud has been shown in withholding profits from the stockholders for use as capital. Therefore, under the statute as it exists, I could not substitute my judgment for that of the board, even though it might differ therefrom.

So far as the propriety of the amounts at which the sala-, ries of the individual defendants have been fixed, they all presented themselves for cross-examination after having outlined the duties incumbent upon them, respectively. There can be no question that they are devoting their entire time to the fortunes of the business, and, without going into a particular description thereof, it may be said that they are carrying on all the affairs of the- company, except the physical work being done by the employes under their supervision. In their own testimony, that they have been fair in fixing the remuneration to be received by each, they are supported by the witnesses Haslett, Levy and Kantzmann, all men who have had experience rendering them familiar with the payment of salaries to others in like positions. There is not the weakness in their defense that was animadverted upon by Vice-Chancellor Stevenson in Raynolds v. Diamond Mills Paper Co., supra (at p. 317). I do not feel that I can sa,y that these defendants are overpaid. It is true, as pointed out in the last-mentioned opinion, that these defendants, having fixed their own salaries,, the burden is upon them to satisfy the court that the same have been earned. It- seems to me, in view of the testimony of their witnesses and themselves, and in the absence of any contrary testimony, that they have completely discharged the burden under which they labored.

I cannot but be sympathetic with the desire of the complainants to receive a regular and sufficient dividend upon their stock, but I think the showing of the company under its present management is rather creditable, when it is recalled that in the ten years of its existence it has passed its dividends but twice, and then during a period of reconstruction, and when it is further borne in mind that, as I have said before, spread over its entire existence, the dividends have averaged eight and one-half per cent, per year, added to which has been the very serious drain of the annuity to Mrs. Blancard, from the payment of which the company is now released forever by her death. Of course, it is to be expected that its condition, under the proofs of the- defendants themselves, ought to improve, and if it does -not it should be a simple matter for the complainants under another bill to show the reason therefor, if it shall be due to any unfair, unconscionable or inefficient conduct on the part of the managing 'officers.

With its answer the defendant corporation filed a counterclaim against the complainant William Blancard for the sum of $2,510, for moneys borrowed by that complainant from the company. This complainant admits that he borrowed the sum of $3,500 on September 9th, 1920, and has paid $1,000 thereof, leaving $2,500 diie, with interest, on' balances from the respective dates. On a preliminary motion to strike out the counter-claim, an order was advised by Vice-Chancellor Fielder, refusing to do so, and leaving the costs of that motion to abide the final event.

I will advise a decree in accordance with the foregoing.


text:
    National Security Bank, a corporation, complainant, v. Jacob Blumberg et al., defendants.
    [Submitted June 30th, 1924.
    Decided July 2d, 1924.]
    1. Strong and cogent 'proofs are required to clear away a very powerful prima faoie case of fraud.
    2. When an existing creditor shows that his debt was existing when a conveyance was made, the law, without further poof, raises a conclusive presumption of fraud, so far as that creditor is concerned; when, however, the conveyance is attacked by a subseqent creditor, he must prove the fraud as a fact.
    3. Where a “subsequent creditor” shows an actual fraudulent intent to defraud some creditor, the relation of debtor and creditor existing at the time when the conveyance was made, such fraud is sufficient to sustain the suit of the subsequent'creditor to set aside a conveyance of the debtor to his wife made before the subsequent creditor’s claim arose.

      On bill, &c.

      Mr. Charles Turndorf, for the complainant.

      Mr. Abram I. Bluestein- (Mr. Addison P. Rosenkrans, of counsel), for the defendants.
   Bentley, V. C.

This is a motion for a preliminary injunction, heard upoii a creditor’s bill and affidavits.

The suit is predicated upon a promissory note, made by the defendant Jacob Blumberg on November 18th, 1922, and due four months thereafter, which was discounted by the complainant. The note was dishonored at maturity and there is said to be due thereon, with accumulated interest, $34,880. The bill alleges that almost four years earlier the said defendant, on October 9th, 1918, delivered to his wife, Bessie Blumberg, another defendant, the sum of $141,940.37, as a voluntary gift, although it is charged that the beneficial interest therein still resides in him, and his wife is, in truth, a mere trustee holding the money for the purpose of defrauding his creditors. The interest upon this fund was credited to the account of the husband at his direction and not, as would be expected in the case of a bona fide gift, to the account of his wife. That his said wife, acting for Blumberg, purchased certain stock in the Washington Piece Dyeing and Einishing Company, in her name but for his benefit, for the sum of $75,000, which price was paid out of the funds delivered by him to her as aforesaid. That she also, under the same arrangement and out of the same fund, purchased for $10,000 stock of the (4. & B. Realty Company. That, subsequently, a stockholder in these same companies purchased the stock so held by the Blumbergs for the sum of $183,000, and, in payment therefor, delivered to Bessie Blumberg three checks, totaling $60,000, and a mortgage on the plant of the Washington Piece Dyeing and Einishing Company for $123,000.

On May 8th, 1924, complainant caused to be' issued out of the Passaic Circuit Court a writ of attachment for $34,880, the amount of the note it holds, with interest, by virtue of which writ there have been attached the said mortgage and checks. A claim of property has-been filed with the sheriff under the said writ by the Old Comfort Building and Loan Association, a corporation of the State of Pennsylvania, as to two of the said checks, and a like claim made as to the remaining check by the Independent Realty Company, also incorporated in Pennsylvania, which claims were made after the attachment aforesaid, and are charged to have been made by the said Blumbergs and to be without consideration. The defendant Bessie Blumberg has made a like claim as to the said mortgage, 'and the sheriff had,set the claims down for trial 'on June 13, 1924, but has been restrained in this suit for holding such trial,

' In the June term of 1919, Jacob Blumberg was indicted in the eastern district of Pennsylvania for defrauding the United States of America on two certain income tax returns for the year ending December 31st, 1917, and which were sworn to by him in March, 1918. Subsequently, he was convicted on the trial of the indictments.

The defendant Jacob denies that the transfer of his funds to his wife was in fraud of creditors, but maintains that a large part thereof was her money which she had earned m the business they carried on by their joint efforts, and undertakes to explain the various suspicious facts that appear, such as the foregoing, his election to the directorate of the companies already mentioned, the salaries'that he drew therefrom, and the reason for the claims of property already mentioned. There are also filed affidavits by officers of those companies as well as Bessie Blumberg, undertaking to substantiate the claim of bona fides in her transactions with her husband and the other defendants. The bill and 'affidavits allege that the defendant Jacob was an officer and director of the claimant companies and' generally active in their behalf, as would be the case of one who had purchased interests therein with his money but in his wife’s name. In fact, he now has a large claim for arrears of salaries in this connection. Withr;. out entering upon a exhaustive analysis of their contents, ■ I think it is sufficient to say that they do not fairly meet -th.e allegations contained in the bill and its supporting affidavits; Strong and cogent proofs are required to clear away the very, powerful prima facie case of fraud made out by the complainant.

The defendants- rely upon the opinion written by Judge Dill in Washington National Bank v. Beatty, 77 N. J. Eq. 252. In that case the defendant, fearing an action for libel, conveyed all his property to his son. The court of errors-and appeals, in reversing the decree of this court dismissing the bill, overruled Vice-Chancellor Van Elect’s application of Hagerman, v. Buchanan, 45 N. J. Eq. 292, in the case of Gardner v. Kleinke, 46 N. J. Eq. 90. They say that when a conveyance is attacked the question to be determined is the same whether the attack he by an existing or a subsequent creditor, the only difference being the method of proof; that when an existing creditor shows his debt was existing when the conveyance was made, “the law, without further proof, raises a conclusive presumption of fraud so far as that creditor is concerned.” When, however, the conveyance is attacked by a subsequent creditor, he must pro-ve the fraud as a fact—that is, “an actual fraudulent intent to defraud some creditor.” By some creditor is meant any creditor, either existing at the time when the conveyance is made or subsequently.

When the federal government secured its conviction of Jacob Blumberg, it conclusively established the fact that he had been indebted to it for income taxes which were due and payable at the time of the transfer of the $143,000 to- his wife in October, 1918. Therefore, applying the language just quoted, I think it is sufficiently proved for the purposes of this motion that, although the complainant is a “subsequent creditor,” he has shown “an actual fraudulent intent to defraud some creditor,” to wit, the United States government, and that the relation of debtor and creditor was “existing at the time when the conveyance” was made. It is trrié that Jacob Blumberg-swears that, at the-time of-the transfer of his money -to- his wife, he had no- existing lawful creditors or creditor, but the proof contained in the affidavit of-Mr. Turndorf is not overcome by the naked oath of the defendant. ' •

No objection was made in the able argument for the defendants of the fact that the complainant is only an attaching, and not a-judgment, creditor, because that question has been settled in Haston v. Castner; 31 N. J. Eq. 697; Bainbridge v. Allen; 70 N. J. Eq. 355, and many other cases.

-I will advise an injunctive order pending the final hearing.