text:
    The National Docks and New Jersey Junction Connecting Railway Company v. The Pennsylvania Railroad Company and The United New Jersey Railroad and Canal Company.
    1. Where the aid of the court of chancery is invoked to effect the crossing of one railroad by another, and it appears that the right to cross has been duly condemned, and that the damages in condemnation have been based upon a manner of constructing the crossing proposed by the junior road, which is claimed to be unlawful or at least unfair, this court will, incidentally to the exercise of its jurisdiction in the premises, determine the legality of the proposed manner of crossing.
    2. A preliminary injunction will not issue where the right of the complainant is in doubt.
    3. An order which finally disposes of all matters involved in the cause will ordinarily not be made until final hearing.
    On order to show cause why injunction shall not issue.
    Heard on bill, affidavits and schedules thereto'annexed and affidavits in reply.

      Mr. Gilbert Collins, Mr. Charles L. Corbin and Mr. Charles D. Thompson, for the motion.

      Mr. James B. Vredenburgh and Mr. Richard V. Lindabury, contra.

   The Chancellor.

The complainant insists that it , acquired, a right of railroad crossing under a car yard of the defendants by means of an arched passageway of masonry, which cannot be constructed without temporarily cutting the railway tracks in the yard, and the object of the present application is to secure an injunction which will require the defendants to, from time to time, as the work of building the passage progresses, remove cars they may store upon their tracks in the line of crossing, and keep them removed, while the construction at each point of removal continues in accordance with a manner of construction declared by the complainant in its condemnation proceedings.

The complainant is a railroad corporation organized under the General Railway law (Rev. p. 925) and its supplements. As its name indicates, it will serve as a connection between the National Docks and New Jersey Junction railroads, which will be about half a mile in length, entirely within the limits of the city of Jersey City. Commencing at the southerly end of its route and ruuning northerly, the road starts at a point in the line of the National Docks railway, and crossing meadow lands and public streets for some one thousand five hundred feet, reaches the car yard of the defendants, which has its southerly boundary upon the northerly side of a public street of Jersey City called Railroad avenue, and is constructed upon an elevated plateau some twenty-three feet above the grade of the street. This yard is about five hundred feet wide. North of it the land is again low until the line of the New Jersey Junction railway is reached. The complainant proposes to cross this car yard by the passageway already indicated, the construction of which will necessitate the temporary opening of the surface of the yard, a portion at a time, for its entire width, and thereby the disturbance at different times, but in all, of twenty-one railroad tracks of the defendant, located and used over the line of the passageway.

Upon the trial of the appeal from the report of commissioners in the proceedings for the condemnation of the right to cross, the method of crossing the yard was, by an amendment to the petition, defined to be by the arched masonry passageway through a strip of land fifty-five feet wide, over which passageway, as the same should be completed, the ear yard might be maintained and operated.

The proposed manner of constructing that passageway was also defined at that trial. It was declared by a writing filed with the clerk of the court to which the appeal was taken, that the complainant would commence work at the southerly side of the ear yard and progress in building northerly by sections, proceeding, as the language of the declaration states, as follows:

“Second. The connecting company will remove from their right of way the three southerly yard tracks of said owners, being tracks one, two and three, upon the commencement of their work, and thereafter will keep open during the progress of their work across the said yard tracks, three of the yard tracks of the said owners crossing the route of connecting' company, which tracks shall be adjacent to each other, and the connecting company will complete their arch in sections, so that when yard tracks of the owners in excess of three in number shall be removed from the route in the course of construction, an opportunity shall be afforded concurrently therewith to the owners to relay and restore therewith to use a like number of those previously removed across the complete section of the arch, so that said owners, during the construction of said arch, may at all times have the opportunity to maintain and use all their yard tracks except three.
“Third,. The connecting company will support the sides and the north end of each section of their excavation-and for the further protection of the yard track next north of and adjacent to each section excavated, will, upon beginning excavation in such section, place stringers' under such track across the route of the connecting company, commencing with yard track four (4), and when that track is taken up will shift the stringers to the track crossing the route next north of the second section excavated, and so on across the yard; such stringers to be placed in the manner usual in such construction and so that trains may be run over the track until such track shall be removed by the connecting company as above set forth; which stringers will be placed under each track in such manner as to leave it substantially at the elevation at which it may be found at the time the stringers are put in place.
“Fourth. The connecting company will locate the northerly line of the most northerly section but one of their excavation,' at least sixteen feet southwesterly from the nearest point of the southwesterly rail of the westbound engine track, so that the eastbound engine track may be operated over said space left between the excavation and the westbound engine track; the centre line of the eastbound engine- track to be located not more than fourteen feet distant from the centre line of the westbound engine track across the route of the connecting company during the progress of the excavation in said section, and the connecting company will not remove said eastbound engine track over said location until the arch shall be constructed so far northerly that the eastbound engine track can be shifted and used by the owners across the completed part of the arch if they desire so to do.”

During the trial in the circuit court the defendants insisted that the proposed manner of constructing the crossing, by cutting their tracks, would unnecessarily and unreasonably interfere .with the use of their car yard while the work progressed, and they suggested a manner of construction which would involve the support of the tracks at all times and urged that their plan is feasible and, though perhaps more expensive to the' complainant, will be attended with less damage and inconvenience to themselves. Their insistment was that the complainant must adopt that manner of construction which, being reasonable under all circumstances, will cause the least possible damage and inconvenience to them. They offered to prove the utility of the manner of construction thus suggested, but the court overruled the offer upon its conclusion that the complainant has the right to declare the manner of constructing the crossing for the purposes of the condemnation, and that the question whether that manner of crossing would be enforced would properly arise in this court, if its aid should be invoked by either party. The trial their proceeded upon the complainant’s plan of crossing and prescribed manner of execution, and the damages were accordingly assessed by the jury. The amount found by the verdict of the jury has been tendered to the defendants and they have refused to accept it, and it has been duly paid into court. The complainant has entered into possession and executed part of the work of construction of its crossing, and, upon coming to the first of the defendants’ tracks, has been stopped by cars stored there and by other obstructions.

The jurisdiction of this court in the premises rests in the existence of mutual- rights in the complainant and defendants in the use or easement of the strip of land in which the crossing is to be constructed, the appropriate enjoyment of which rights equity will control and regulate, upon being satisfied that the parties cannot agree with respect to the same. National Docks &c. Railroad Co. v. United Companies, 24 Vroom 217.

The complainant insists that the easement it has acquired is a crossing which has been defined in the condemnation proceedings, not only as to the character and location of its structure, but also as to the manner in which it is to .be constructed, and that both the character of the crossing and the manner of its construction are wholly within its discretion and b.eyond question by the defendants.

I do not agree with this proposition. In National Docks &c. Co. v. United Companies, supra, the court of errors and appeals held that a railway company condemning a crossing over another railroad might determine by specification in its petition where it would cross and, “within lawful bounds,” how it would cross the senior road, the legality of the proposed crossing being by such specification made reviewable by certiorari prior to the conclusion of the condemnation, and the court took the precaution to add that if when the easement of crossing should be acquired, conflict should arise as to its use, the intervention of this court could be invoked. That case recognizes the law to be in accord with the public benefit; that railroads, as quasi-public institutions, designed to develop the country through facility in transportation, may be multiplied and maintained, to accomplish which result a new or junior railroad is permitted to cross its established senior, provided the crossing shall not destroy the ability of the senior to fully, fairly and freely exercise its franchises; that by this is meant not an ability of the senior to continue with the same appliances exactly located as theretofore, but an ability in it to freely and fairly exercise its franchises substantially as theretofore, yielding to such reasonable changes and such reasonable temporary disturbance and consequent inconvenience as the necessities of the crossing and the work of its construction may occasion. The question, what is a reasonable temporary disturbance and inconvenience, arises upon the suggestion of the manner in which the work of building the crossing may be accomplished. If it is not raised by the petition in the condemnation proceedings so that its legality may be considered upon certiorari, this court will determine it when it is appealed to by either party to regulate the use of the mutual easement, as a matter incident to the exercise of its jurisdiction in the premises.

The complainant now seeks the aid of this court to enforce its proposed manner of crossing. That manner will deprive the defendants of the use of three or more of their tracks at one time for an indefinite period. Is such deprivation reasonably necessary? "Will its enforcement amount to destruction or unlawful impairment of the ability of the defendants to fairly enjoy and exercise their franchises? These questions challenge the legality of the proposed manner of construction. National Docks &c. Co. v. United Companies, supra. The defendants offer affidavits to show that the proposed manner of construction will be so far destructive of the reasonably fair enjoyment of their car yard as to be unlawful, or, though it be within legal bounds, it is yet so unreasonable and unfair that equity will not lend its aid to the enforcement of it, and they insist that the court will not require the defendants to submit to it until, after final hearing upon proofs regularly taken, it shall with full deliberation have passed upon these questions.

It is apparent, if I now grant the injunction desired, that the complainant will proceed to complete its crossing pending final hearing and do the very injury which the defendants deny its right to do. In such a situation a preliminary injunction should not issue. Citizens' Coach Co. v. Camden Horse Railroad Co., 3 Stew. Eq. 304; Haggerty v. Lee, 18 Stew. Eq. 256. In a former application for injunction in this matter upon a preliminary hearing, after argument upon facts presented by ex parte affidavits, following the precedent in Jersey City, Newark and Western Railroad Co. v. Central Railroad of New Jersey, 3 Dick. Ch. Rep. 379, I granted an injunction which, in effect, prescribed a method for the construction of this very crossing— no method having been declared in the condemnation proceedings — and my action was reversed by the court of errors and appeals, upon the point being made in that court, that I had anticipated that which should not have been determined until after final hearing. Mr. Justice Gummere, who wrote the opinion of the court of errors and appeals in that matter, said upon this point: Moreover, the order appealed from, although it purports to be a mere preliminary order, made in the inception of the case, and upon ex parte affidavits, is, in reality, nothing more nor less than a final decree, for it disposes absolutely and finally of every matter which is involved in this suit. An order or decree of this character can only be made upon final hearing-had upon pleadings and proofs taken upon due notice and in accordance with the rules and practice of the court.”

While I doubt not that the court of errors and appeals intended to decide that the order considered in the case before it wrongly anticipated that which should have been held undetermined until final decree, I am persuaded that it could not have meant to broadly hold, as the language of the opinion appears to imply, that cases may not arise in which a preliminary injunction may be allowed, which, in effect, will decide all questions involved in the suit. An instance of the kind is suggested by Mr. Justice Magie, in the opinion of the court of errors and appeals, in Delaware, Lackawanna and Western Railroad Co. v. Central Stock Yard Co., 16 Stew. Eq. 605, 612, in this language:

“Circumstances may be presented of so extraordinary a character as to justify the issue of a mandatory injunction in limine. If the whole case be before the court and the right to the injunction clear, and if no injury is done to the party enjoined by its issue, but, by its refusal, irreparable injury is done to the applicant, then it would not savor of equity to deny the injunction.”

My understanding is that our courts have always recognized the right of a court of equity, in a proper case, to grant a mandatory injunction after preliminary hearing, even though that be the whole relief sought in the case. Rogers Locomotive &c. Works v. Erie Railway Co., 5 C. E. Gr. 379; Thropp v. Field, 11 C. E. Gr. 83; Longwood Valley Railroad Co. v. Baker, 12 C. E. Gr. 166; Shivers v. Shivers, 5 Stew. Eq. 578; Wakeman v. New York, Lake Erie and Western Railroad Co., 8 Stew. Eq. 496; Whitecar v. Michenor, 10 Stew. Eq. 6; Lord v. Carbon Iron Co., 11 Stew. Eq. 452; Delaware, Lackawanna and Western Railroad Co. v. Central Stock Yard Co., 16 Stew. Eq. 75; S. C. on appeal, 16 Stew. Eq. 605; Hodge v. Giese, 16 Stew. Eq. 342, 350; Bailey v. Schintzius, 18 Stew. Eq. 178.

I apprehend, then, that the court of errors and appeals meant to decide that the ease considered, which in effect was designed to permit the removal of an obstruction to the enjoyment of an easement, did not present such features, including clear right and great hardship, as would justify the anticipation of final decree. So understood, I think it rules the present case.

I will deny the injunction so far as it is desired to put in force the complainant’s declared manner of crossing the tracks of the defendants, but will grant it so far as it is necessary to protect the complainant’s possession of the place of crossing up to the first track in the defendants’ ear yard, restricting such possession in use so that it will not disturb that first track.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Christopher Stimis, administrator de bonis non cum testamento annexo of John Stimis, deceased, v. John B. Stimis et al.
    1. A lapse of twenty years after a mortgage has become due, within which there has not been either payment or demand of the principal or interest, or part thereof, or entry by the mortgagee into possession of the mortgaged premises, will raise a presumption that the mortgage has been satisfied, though in fact it be not paid.
    2. Such presumption may be taken advantage of by demurrer to a bill which alleges the facts raising it without averring circumstances which will rebut it.
    3. Lapse of time will not be allowed to defeat an express trust, cognizable in equity alone, which continues to be acknowledged and acted upon by the parties.
    4. When the relation of trustee and eestui que trust is no longer admitted to exist, or gross laches in enforcing a known right or long acquiescence in the alleged breach of trust, is shown, and lapse of time has obscured the nature and character of the trust, or the acts of the parties or other circumstances give rise to presumption unfavorable to its continuance, a court of equity, even in case of an express trust, will refuse relief upon the ground of lapse of time and its inability to do certain and complete justice.
    5. A mortgagor became the executor of the will of his father, .the mortgagee, before his mortgage was paid, the beneficiaries under the father’s will being his mother for her life, and his brothers, sisters, two nephews and himself, in remainder. After the mortgage became due and his mother died, he retained possession of the mortgaged premises, and failed to pay interest upon the mortgage or to pay any part of the principal thereof, for fifteen years, within which time he sold a portion of the premises, and then, never having accounted as executor, executed a satisfaction of the mortgage, and thereafter, continuing in possession of the mortgaged premises, sold other portions thereof, and yet failing to pay either principal or interest, lived four years and died. Three years after his death,' no part of the principal or interest of the mortgage having yet been paid, the administrator de bonis non &c. of the estate of the father filed his bill to foreclose the mortgage. Upon demurrer to the bill on the ground that more than twenty years had elapsed since the making of •the mortgage,within which neither principal nor interest had been paid — Held, that the presumption arising from such- lapse of time without the payment indicated, was rebutted by the implication arising from the executor’s failure to account, his execution of the satisfaction and the near relationship between him and the other beneficiaries of his father’s estate.
    On demurrer to bill.
    The bill, which was filed in February, 1894, alleges that in 1851 Henry Stimis mortgaged about two acres of land, situate at Belleville in Essex county, to his father, John Stimis, to secure the payment of $500, with interest, one year after date, which mortgage was duly registered; that later in the same year John Stimis died testate, leaving him surviving his widow, Anne, three sons, Henry, Christopher and "William, two grandsons, the sons of a deceased son, and four daughters; that by his will he gave his estate to his widow for her life, “ but not to commit waste,” and at her death to his children and the sons of his deceased son, they taking one share, and appointed his widow the executrix and his son Henry the executor, of the will; that the will was duly admitted to probate and both the executor and executrix named in it qualified; that in February, 1852, the executrix and executor filed an inventory in which, among other properties, they enumerated this: “Henry Stimis bond and mortgage $500;” that in 1872 the widow died, and in 1891 Henry, the executor and mortgagor, also died; that the executrix and executor never accounted, nor did either of them ever account; that in 1866 Henry sold a strip of the mortgaged land to the Paterson and Newark Railroad Co., for part of its right of way (that company is not a party to this suit); that in 1887, as executor, he executed and recorded a satisfaction of the mortgage, as follows:

      “I, Henry Stimis, do hereby certify that a certain mortgage, bearing date the thirtieth day of June in the year of our Lord one thousand eight hundred and fifty-one, made and executed by Henry Stimis to John Stimis, to secure the sum of five hundred dollars, and registered in the office of the Register of the county of Essex in Book X 2 of Mortgages, page 231 &c., on the eighteenth day of February, 1852, at-o’clock, — M., is paid and satisfied and
    I do hereby consent that the same may be discharged of record. Dated the eleventh day of July, 1887.
    “Witness—
    Henry Stimis, [l. s.]
    “ J. E. Howell.

      Executor."

    that in fact the mortgage had never been paid and satisfied by-Henry Stimis nor by anyone in his behalf; that at the time of the execution and record of the satisfaction, the whole of the principal of the mortgage, with large arrears of interest, remained due and owing by Henry to himself as executor of his father’s will; that no part of the principal of the mortgage was ever paid, and no interest was paid after the death of Anne Stimis; that the execution and record of the said satisfaction was without consideration and in fraud of the estate of John Stimis, deceased, and of the legatees under his will; that in 1891, some three months before he died, Henry conveyed two portions of the mortgaged property to his daughter, Susan E. Burling, who knew that the mortgage had not, in fact, been paid; that by his will he gave the residue of his estate to his five children; that the complainant was appointed administrator de bonis non cum testamento annexo of John Stimis in May, 1892; that the complainant has obtained possession of the mortgage, and that since the execution of the mortgage, the mortgagor and his devisees and assigns have retained possession of the mortgaged premises. The bill prays that the satisfaction of the mortgage shall be decreed to be void and of no effect, and that the mortgage shall be decreed to be valid and that the equity of redemption in the mortgaged premises may be foreclosed.
    The defendants demur on the ground that more than twenty years have elapsed since the maturity of the mortgage, within which neither principal nor interest has been paid, and that therefore they are entitled to the presumption that it has been satisfied.

      Mr. James E. Howell, for the demurrants.

      Mr. Herbert Boggs, for the complainant.
   The Chancellor.

It is settled by the adjudications of this court that a lapse of twenty years after a mortgage has become due, within which there has not been either payment or demand of the principal or interest, or part thereof, or entry by the mortgagee into possession of the mortgaged premises, will raise a presumption that the mortgage has been satisfied, though in fact it be not paid. Wanmaker v. Van Buskirk, Sax. 685; Evans v. Huffman, 1 Halst. Ch. 354; Barned v. Barned, 6 C. E. Gr. 245; Murphy v. Coates, 6 Stew. Eq. 424. And this presumption may be taken advantage of by demurrer to a bill which alleges the facts raising it, without averring circumstances which will rebut it. Olden v. Hubbard, 7 Stew. Eq. 85. The formal averment in a foreclosure bill, that the principal and interest of the mortgage are now due and owing, manifestly a mere conclusion argumentatively insisted upon, is not admitted by demurrer. Olden v. Hubbard, supra; Redmond v. Dickerson, 1 Stock. 507, 516.

The allegations of the bill considered show that no payment of either principal or interest of the mortgage in question has been made since the year 1872, that is, for a period of twenty-two years prior to the filing of the bill, during which time the mortgagor, his assigns and devisees have been in possession of all parts of the mortgaged premises, and it fails to show that within that time any demand has been made for the payment of principal or interest, or any part thereof. From these facts the presumption invoked clearly arises, and the principal question of the case becomes, whether other circumstances averred are sufficient to rebut the presumption.

It appeal’s that in 1852 the mortgagor became one of the executors of the will of th°e mortgagee, which will devised and bequeathed all the testator’s estate to his widow during her life or widowhood with this addendum, “ but not to commit waste,” and at her death to his children, of whom the mortgagor was one. As executor of that will it became the mortgagor’s duty, together with his mother, to collect the assets of the estate, pay the testator’s debts, account for the executorship in a year and transfer the residue of the estate to the life tenant, who thereafter would become accountable for it to those who were to take it in remainder. The estate was not given to the executors in trust for the widow for life and then to distribute it to those taking in remainder, but was given directly to the life tenant, and hence the trust confided to the mortgagor through the executorship, so far at least as the mortgage in question is concerned, would, in regular course, terminate with the accounting, which became due in the year 1853, and his transfer of it at that time to the life tenant. It appears that there never was, in fact, an accounting, and because of this circumstance, coupled with the official action of the executor in 1887, when he satisfied the mortgage of record, it is claimed that the trust of the executor-ship, an express trust, continued until the mortgagor died, in 1891, and, this being so, that lapse of time will not avail to defeat the relief sought by the complainant, or, in other words, that the presumption already referred to is rebutted.

It is the rule that lapse of time will not be allowed to defeat an express trust cognizable in equity alone, which continues to be acknowledged and acted upon by the parties. Kane v. Bloodgood, 7 Johns. Ch. 111; Conover’s Executor v. Conover, Saxt. 403 ; Wanmaker v. Van Buskirk, supra; Allen v. Woolley, 1 Gr. Ch. 209; Stark v. Hunton, 2 Gr. Ch. 311; Dean v. Dean, 1 Stock. 425 ; McClane’s Administrator v. Shepherd’s Executor, 6 C. E. Gr. 76; Marsh’s Executor v. Oliver’s Executors, 1 McCart. 259; Lindsley v. Dodd, 30 Atl. Rep. 896.

The reason is, that the possession of the trustee, while the relation of trustee and cestui que trust is admitted to exist, is deemed to be possession for the cestui que trust and coincident with the title of the cestui que trust. But when the trustee denies the right of the cestui que trust and his possession of the property becomes adverse, lapse of time from that period may constitute a bar in equity. Kane v. Bloodgood, supra; Dean v. Dean, supra; Young v. Young, 18 Stew. Eq. 40; Starkey v. Fox, 7 Dick. Ch. Rep. 758; S. C. affirmed on appeal, 8 Dick. Ch. Rep. 239.

And even if the proof be satisfactory that possession and the relationship of trustee and cestui que trust was at one time coincident, there may be certain conditions which will prevent the application of the rule that time does not run against an express trust, for when the relationship is no longer admitted to exist or gross laches in enforcing a known right, or long acquiescence in the alleged breach of trust, is shown, and lapse of time has obscured the nature and character of the trust, or the acts of the parties or other circumstances give rise to presumption unfavorable to its continuance, a court of equity, even in a case of express trust, will refuse relief upon the ground of lapse of time and its inability to do certain and complete justice. Starkey v. Fox, supra. Vice-Chancellor Green, who wrote the opinion in the case just cited, which opinion was adopted by the court of errors and appeals, said: “This doctrine is not an exception to the rule, but proceeds on an inference from facts other than, but in connection with, the lapse of time; that the trust has been executed and in some way extinguished, as is said by the master of the rolls in Pickering v. Stamford, 2 Ves. Jr. 583: ‘ Every presumption that can fairly be made shall be made against a stale demand. It may arise from the acts of the parties, or the very forbearance to make the demand affords a presumption either that the claimant is conscious it was satisfied or intended to relinquish it.’ ” In Starkey v. Fox, an administrator who had prosecuted a suit for the foreclosure of a mortgage belonging to his intestate to sale, bought the mortgaged premises at the foreclosure sale in his own name as administrator, and subsequently, in the year 1841, accounted for it as an asset remaining in his name undisposed of, in trust for the intestate’s estate. It was made to appear that, a year or two later, through proceedings in ejectment, he secured possession of the mortgaged premises, and that, later, he exercised acts of ownership over that property, building thereon and clearing, tilling and improving the soil, paying all taxes and taking all income, without accounting, and that thus he lived in the enjoyment of the property until the year 1891, when he died. After his death persons entitled to shares of the intestate’s estate filed a bill to enforce the trust in the property, and it was held, among other things, that a presumption had arisen that the trust was extinguished, which presumption had not been rebutted.

In the case in hand the executors could have been compelled to account in the year 1853, and thus the estate which was to go to the life tenant could have been ascertained, and security for its safe preservation, upon proof that it was in danger in the hands of the life tenant, if need be, might have been exacted, but those who were to take in remainder, who then, for aught that appears to the contrary, arid from thence to the present time, save in the case of Henry Stimis himself, were living and sui juris, remained inactive. After twenty years the life tenant died, and then those in remainder became entitled to possession, and yet thereafter for nineteen years, until Henry Stimis died, they stood by, witnessing the possession of the mortgaged lands by him and his grantees, and acquiescing all that time in his failure to pay them interest upon the mortgage. For three years after his death the same conditions continued, and then the present action, was begun. Thus, for upwards of forty years, the remaindermen were silent when they might have spoken, and for more than twenty years they acquiesced in the attitude of the mortgagor so far adverse to his holding the mortgage in trust as withholding interest and failure to acknowledge the mortgage as a valid obligation establishes. Besides, during such acquiescent inaction and laches, the lapse of time carried with it lives of both life tenant and mortgagor, who could have spoken as witnesses, and we know not what other evidences. Did the defendant’s claim of rebuttal rest alone upon the mortgagor’s failure to account as executor, I think I would feel constrained, notwithstanding the importance of his due discharge from his trust (Bank v. Heiron, 5 Ex. Div. 319), to decide that the presumption of the satisfaction of the mortgage has been rebutted. Phillippi v. Phillippe, 115 U. S. 151. But not only did the mortgagor fail to terminate his trusteeship of the mortgage by accounting as executor, but, on the contrary, he affirmed the continuance thereof in the year 1887, seven years before the filing of the bill, when, by deliberate writing executed in virtue of a still existing executorship and continued dominion over the mortgage in that fiduciary character, he declared it to be satisfied and paid. This declaration does not say when the payment was in fact made, but,, standing alone, it will not be assumed to speak of a condition prior to its date. The instrument appears to me to amount to an acknowledgment of the existence of the mortgage and continuance of the executorship in control of that instrument to the date of the satisfaction in 1887. The satisfaction is consistent with the executor’s failure to account and, by that means, to throw off his fiduciary character and place himself in the position of a stranger to the beneficiaries, and, considered in connection with that fact and the near family relationship between the executor and the beneficiaries, I deem it sufficient, at least while it remains unexplained, to rebut the presumption invoked by the demurrants.

There is absence of laches with reference to the attack upon the satisfaction, if for no other reason, because it does not appear that the existence of that instrument was known to the cestuis que trustent. Lindsley v. Dodd, supra.

I will overrule the demurrer", with costs.


text:
    Eliza Wall v. Edward F. C. Young and C. Weaver Loper, receiver of the National Cordage Company.
    Where it was made to appear that within the time limited for the presentation of claims to receivers of an insolvent corporation, a claimant made known her demand to the receivers by the commencement of a suit against them, and thereafter, while the suit was pending undetermined, entered into negotiations with a committee of creditors having charge of the reorganization of the business of the insolvent company and adjustment of its affairs, with which committee the receivers were in constant communication and co-operation, for the settlement of the claim, and by reason of her confidence in an outcome of those negotiations which would satisfy her claim, neglected to make formal presentation of it to the receivers, within the time limited as aforesaid, and application having been made to the court to allow the presentation of the claim before distribution was made of the assets in the receivers’ hands, and it having been made to appear that no embarrassment in the administration of the trust, which the receivers could not and should not have provided against, in view of their knowledge of the intention to urge the claim, had occurred, the claimant was permitted to present the claim beyond the time limited; but circumstances appearing which indicate that the claim may not, in whole or in part, he a just and equitable one though possibly in form legal, the presentation was allowed merely for the purpose of having the merits of the claim investigated, the right being reserved to hereafter admit it wholly or partially to a dividend, as justice and equity may require.
    Ou petition for leave to present claim.

      Mr. Richard V. IÁndábury, for the claimant.

      Mr. William H. Corbin, with whom was Mr. John L. Cadwalader (of New York), for the receivers.
   The Chancellor.

The National Cordage Company, incorporated under the laws of this state, was adjudged by this court to be insolvent on the 4th of May, 1893, and Edward F. C. Young and G. Weaver Loper were appointed receivers, to administer its assets according to law. Later, by order of this court, the creditors of the company were required to present their claims and demands to the receivers on or before the 31st day of August, 1893.

In other states, the same gentlemen were appointed ancillary receivers, such ancillary appointment in New York being made by the United States circuit court for the southern district of that state.

The assets and liabilities of the company were very large.

Within a few days after the adjudication of insolvency, certain of the creditors and stockholders of the company agreed upon a Committee of three gentlemen who should look after their interests and endeavor to bring about a reorganization of the business of the insolvent company so that its value' as a going, active concern, which activity gave principal value to its material assets, might be preserved to those who were pecuniarily interested in the company. That committee thoroughly familiarized itself with the affairs of the company by daily conferences with the receivers and an examination of the books, papers and property of the concern. They made industrious efforts to ascertain all the creditors and stockholders and to invite them to participate in a scheme to acquire and reorganize the business for the mutual benefit of all who should thus come in. After the expiration of the time limited by the court within which the claims of creditors should be presented, they were able, as they supposed, to know what creditors entitled to participation in the assets had joined in the scheme of reorganization, and finding that the great majority had united in it, they offered the receivers $5,000,000 — about enough to pay the' creditors one-third of their claims — for the entire assets and good will of the insolvent company, which sum was to be paid partly in the bonds of a new company to be formed to continue the business acquired, and partly in cash, under an arrangement with the creditors who had joined in the reorganization that the dividends .paid by the receivers should go to the reorganization committee and that that committee would make settlements with them, as previously agreed upon, which should be favorable to the future of the new company. Thus, only a small portion of the $5,000,000 bid,, necessary to pay the expenses of the receivership and dividends to a few creditors who refused to join in the new company, would be taken permanently from the reorganization committee. By this means a much larger price was had for the assets of the insolvent company than could be had by any other scheme of disposal, because it was impossible to find another bidder for the entirety, and abandonment of the going business, called good will,” so that the material assets might be sold in small parcels, predicated a much smaller realization, besides, whatever profit was had in that purchase enured to the benefit of those creditors and stockholders who concluded to venture in the scheme of reorganization, which was open to all.

The receivers reported the offer to the court, and, after all parties interested were heard, they were authorized to accept it, and sale was accordingly made.

After this sale, and before distribution of the assets, the petitioner, Eliza Wall, made her present application, which is that she may be allowed to present to the receivers a claim for $554,900, with interest, from the year 1890.

The receivers resist the application because they urge that it disturbs the calculations of the reorganization bidders, which were based upon the definite ascertainment of the creditors of the insolvent company through the instrumentality of the court’s limitation of the presentation of claims, and because they claim that the petitioner, though well aware of the limitation upon the presentation of claims, for the purpose of securing the retirement of commercial paper upon which Mr. Wall’s sons were liable, purposely refrained from presenting her claim until such retirement was had through the influence of the reorganization, regardless of the inconvenience and injury that a prosecution of her claim at the present time will create.

The origin of the claim of Eliza Wall appears, upon examination of the voluminous record, testimony and exhibits, which have been taken and produced, as follows:

Four parties, who theretofore had engaged in the manufacture of cordage and binder twine, by their officers and agents, caused the incorporation of the National Cordage Company, with purpose to effect a consolidation, and practically, a monopoly of the cordage and binder twine business throughout the United States. Those four parties were: The firm, L. Waterbury & Company, which consisted of James A. Waterbury and Chauncey Marshall; the firm, William Wall’s Sons," which then consisted of Frank T. Wall, Eliza Wall and Michael W. Wall, but after April-3d, 1888, of Eliza Wall, Frank T. Wall, and Frank T. Wall and Edwin R. Brinkerhoff, trustees; the corporations, Tucker & Carter Cordage Company, of which John A Tucker was president, Edwin A. Johnson was secretary and William A. Tucker was treasurer, and the Elizabethport Cordage Company, of which Elisha M. Fulton was president, Francis Gilbert was secretary and Willard P. Whitlock was treasurer.

At the organization of the National Cordage Company, its capital stock consisted of fifteen thousand shares, of the par value of $100 each, making the entire capital $1,500,000, which, in 1890, appears to have been held as follows: James A. Waterbury and others, trustees for the several parties interested in the National Syndicate, fourteen thousand nine hundred and fifty-five shares; James M. Waterbury, C. P. Marsh, Frank T. Wall, Edwin R. Brinkerhoff, Elisha M. Fulton, Chauncey Marshall, John A. Tucker, Willard P. Whitlock and William Marshall, five shares each.

The individuals named, or some of them, were the directors of the company. The scheme of procedure, so far as it is- material to the matter now in question, involved the lease of the manufacturing plants of each of the parties and the lease of other cordage manufactories to the National Cordage Company for a term of years, and the operation of these plants by the lessors under sub-leases back from the National Cordage Company to them, for the benefit of both the National Cordage Company and themselves, the latter company supplying the raw material and selling the product or fixing the prices at which it should be sold by the sub-lessees. Thus, the parties to the combination, through the instrumentality of the corporation of which, by means of the leases and sub-leases, they became dependents, bound themselves and others together so that they could not enter into competition as rivals and they would largely control the business in which they were engaged. To give that corporation strength and credit, each of the four firms or corporations thus interested from time to time loaned its liability in some form upon the commercial paper of the National Cordage Company, and thereby became the more firmly identified in interest with it. Extending the scope of the company, still other cordage factories were secured by profit-sharing contracts.

In August, 1890, the management determined to increase the capital stock of the National Cordage Company, and to that end had its assets examined and valued in such a way that the valuation would appear to justify an increase of $13,500,000 in the capital stock. Entering into this valuation was the acquirement of fees of the leased plants, in place of the leases, and covenants from the vendors which would restrain them from engaging in rival manufacturing. The result of the scheme was, that, pursuing the forms of law, they increased the capital stock of the National Cordage Company to $15,000,000 — $5,000,000 of preferred stock, with cumulative eight per cent, annual dividends, and $10,000,000 of common stock. The plan was that the preferred stock should be devoted to securing the fees of the leased manufacturing plants and the new $8,500,000 of common stock should be distributed, by way of dividend, to the then existing stockholders, that is, the four manufacturing concerns mentioned, William Wall’s Sons having a little less than one-seventh interest therein. It was then that the company agreed for the purchase of the plant of William Wall’s Sons for $954,900, payable on delivery of proper instruments of conveyance, and the plants of the other parties at corresponding figures.

Shortly after the agreement of sale, four thousand shares of the preferred stock, of the par value of $400,000, were transferred to William Wall’s Sons in part payment of the $954,900 which, under the agreement, was to be paid to them. The remaining $554,900 was not paid and, although the four thousand shares of preferred stock were passed over to William Wall’s Sons, no formal conveyances of the plant of the National Cordage Company were delivered. While the machinery and other personal property of the William Wall’s Sons’ plant were owned by the firm, the real estate used by it was the property of Frank T. Wall and the estate of Michael W. Wall, deceased, for which Frank T. Wall and Edwin R. Brinkerhoff were trustees. The present claimant, Eliza Wall, does not appear to have had any interest in the real estate.

By the partnership articles of William Wall’s Sons it was agreed that Frank T. Wall should have general charge of the business of the concern, and the exclusive right to sign the name of the firm, and under that power he appears to have agreed to the sale of the plant. Mrs. Wall did not participate in the management of the business, but from time to time required statements of it to be rendered to her, and appointed agents to examine into the condition of the business. It appears that those agents had difficulty in getting the satisfaction they wished and were obstructed in their inquiries by the imperfect way in which the books of the firm were kept, but nevertheless enough appears to satisfy me that she was apprised of the fact that the firm of which she was a member was in the cordage combination referred to, and that because thereof it had a considerable advantage and profit, and I think that the plant of William Wall’s Sons had been bargained to it, although she may not have known the particulars and full extent of the entanglement of her firm. Exactly how far the profits reconciled her to companionship with the syndicate, presently defined, does not appear with certainty.

The statements rendered to Mrs. Wall show that in 1890 the machinery and personal property agreed to be sold to the National Cordage Company were valued by the firm at less than $200,000, and that her interest in the partnership equaled about fifteen-sixteenths of its assets, which assets appeared to be made up of cash, merchandise, bills receivable, machinery, book accounts, interest in National Cordage Company stock and National Cordage Company indebtedness to the firm.

Early in October, 1891, the four parties (firms and corporations) organized a voluntary association which they called the National Syndicate,” but which operated under the name of L. Waterbury & Company, which is said to have been formed principally for the purpose of dealing in the stocks of the National Cordage Company, and on the 31st of that month, Frank T. Wall, acting- for William Wall’s Sons, .assenting, the syndicate agreed that the National Cordage Company was indebted for unpaid purchase-price of their several plants, as follows: To L. Waterbury & Company, $570,579.90; to William Wall’s Sons, $587,084.20; to the Tucker & Carter Cordage Company, $590,621.07, and to the Elizabethport Cordage Company, $390,947.07. And they also agreed that as they were members of a- syndicate of stockholders of the National Cordage Company, and it was to the interest of all of them to transfer their claims against that company to the “ National Syndicate ” and take therefor obligation, of the syndicate, they would do so. Thereupon, this entry, among other entries, was made in the ledger of the National Cordage Company:

Wk Wall’s Sons — Mill Account.
Dr.
1891.
Jany. 31. To cash paid..................................... $400,000 00
Oct. 31. “ balance transferred to National Syndicate........................................ ' 587,084 20
--$987,084 20
a-.
1891.
Jany. 31. By value of fees, leases, contracts &e..... $954,900 00
Oct. 31. “ interest to date........................... 32,184 20
---- $987,084 20

A few days after the National Cordage Company became insolvent, the firm of William Wall’s Sons was dissolved and went into liquidation. Mrs. Wall assumed to be the liquidating partner, and acted under the advice of Messrs. Martin & Smith, a firm of lawyers in New York city, of which Mr. Pennington Whitehead was a member. William Wall’s Sons appear to have been involved by liability on paper of the National Cordage Company to the extent of more than five hundred thousand dollars, and Mrs. Wall and her lawyers deemed it to be wise, in the liquidation of its affairs, to act harmoniously with the other parties to the National Syndicate and the receivers and reorganization committee of the National Cordage Company, so that the paper on which this liability existed would be retired by the settlements and compromises brought about by those interests. To further this determination and ascertain the extent of the responsibility of William Wall’s Sons and the ability of the National Cordage Company and the purpose of the reorganization committee and the remaining members of the syndicate, Mr. Whitehead was an almost daily visitor at the office of the receivers of the National Cordage Company, and in communication with the counsel of the receivers and the reorganization committee. One of the counsel of the receivers testifies that at one of these visits, early in June, 1893, he handed Mr. Whitehead a notice of the order to limit the presentation of claims of creditors, which notice made known to Mr. Whitehead the time within which his clients might present claims to the receivers.

Mr. Whitehead testifies, on the other hand, that he is quite certain that the counsel referred to did not hand him a copy of the order limiting the presentation of claims, evidently meaning the paper to which counsel referred, which was not a copy of the order, but a notice of the order. It is evident, if the recollection of the receivers’ counsel be correct, that the fact of the receipt of the notice escaped Mr. Whitehead’s attention or recollection. Mr. Whitehead is a member of the bar of this state, and as. such, was aware of the practice of this court in cases of insolvent corporations to make an order to limit the time within which the claims of creditors may be presented to receivers, in order, if allowed, to share in the moneys to be distributed. The likelihood of his expecting and watching for such an order, especially as it appears that he was acting for several other creditors of the insolvent company, is so conspicuous that it is difficult to understand how he failed to take notice of it. He explains his failure by the fact that through the commencement of a suit, he brought about negotiations with reference to a general settlement of the affairs of William Wall’s Sons which included an adjustment of the claim in question.

The proofs demonstrate that he was intent, primarily, upon protecting William Wall’s Sons, his client, Mrs. Eliza Wall, being the person most largely interested in that concern, from loss by reason of its liability upon some $512,000 of the National Cordage Company paper, and, secondly, upon securing her from either syndicate or cordage company whatever he could of the unpaid $554,900.

Looking to the accomplishment of these ends, on the 22d of July, 1893, he commenced suit in the supreme court of New York in behalf of Eliza Wall against the parties composing the National Syndicate, corporations and individuals, and as well the National Cordage Company and the receivers of that company. The cause of action was based upon allegations of the sale of William Wall’s Sons’ plant to the National Cordage Company; of the formation of the National Syndicate, one purpose of which, it is alleged, was the appropriation to its own uses of the $954,900 to be paid for the William Wall’s Sons’ plant; that four thousand shares of preferred stock of the National Cordage Company was never lawfully delivered to William Wall’s Sons, but was diverted to the syndicate, but that the $554,900, with interest, remains due; that an attempt was made to shift that indebtedness from the cordage company to the syndicate, but the proceeding in that respect was unlawful; that the syndicate had some stock-gambling claims against it which are unlawful, but which it nevertheless intended to pay from its assets, and thereby deplete them and endanger Mrs. Wall’s recovery for the four thousand shares of preferred stock which was appropriated by the syndicate to its own uses. The complaint prayed, among other things, for an injunction to prevent any disposition of the. assets of the syndicate; for a receiver of those assets; that the agreement of sale of William Wall’s Sons’ plant to the National Cordage Company may be decreed to be void; but if it should be decreed to be valid, that the receivers of the National Cordage Company might be decreed to pay her the amount to be paid therefor, $954,900 with interest, or a proper dividend on that sum.

The complaint in that suit, a summons and a rule to show cause why a receiver of the assets of the syndicáte should not be appointed, together with a notice that application would be made to the United States circuit court for the southern district of New York for leave to maintain such suit against the receivers, were served upon Mr. Loper, one of the receivers, on the 22d of July, 1893.

Immediately after the commencement of that suit, the reorganization committee of the National Cordage Company and two or three individuals concerned in the National Syndicate, opened negotiations with Mr. Whitehead for a settlement of the suit, which shortly resulted in an agreement to the effect that the assets of the syndicate should be transferred to trustees, who should use them in paying and compromising the debts of that association due to those who were not members of the syndicate, and then the syndicate’s indebtedness to the four manufacturing ■concerns which participated in it, of which indebtedness the balance due for William Wall’s Sons’ plant, $554,900 and interest, should be first paid and go to Mrs. Wall, and, with the remaining indebtedness to the four concerns, $400,000, the par value of the four thousand shares of preferred stock, which was appropriated by the syndicate from William Wall’s Sons, should share pro rata. If there should remain a surplus, it was to be divided so that William Wall’s Sons would get a proportionate share of it. On the execution of such trust, among other things, the suit was to be discontinued and Mrs. Wall was to release the receivers of the National Cordage Company from all claims except those growing out of the commercial paper referred to, and was to confirm to them the title to the William Wall’s Sons’ plant. Among others, the receivers of the National Cordage Company and the reorganization committee were to be parties to a formal agreement of settlement which was to be prepared. Minute of the agreement thus arrived at was made by the counsel for the reorganization committee, who later disagreed and thereafter were unable to come together. The last conference between them was on the 17th of August. During September and October Mr. Whitehead was in Europe. Upon his return, in November, his attention was called to a printed statement by the receivers, which represented among the liabilities of the National Cordage Company this item: “Wm. Wall’s Sons, $512,000.” And thereupon he called upon one of the counsel for the receivers and asked whether that item represented the claim of William Wall’s Sons or only their accommodation endorsements, and was told that it represented the latter. After that there was some further effort at compromise with members of the reorganization committee, but it was unsuccessful.

Pending all these negotiations for settlement, Mr. Whitehead refrained from pressing his motion before the United States circuit court for permission to sue the receivers, but in January, 1894, after the negotiation failed, upon a new notice he applied to that court and the receivers defaulting in appearance, obtained the desired permission. A few days later he realized that this court had limited the time within which creditors’ claims should be presented to the receivers, and obtained a copy of the court’s order and finding that the time limited had expired four months or more, he made the present application.

The testimony clearly shows that from the time the suit in the supreme court of New York was commenced until after the sale of the assets of the National Cordage Company, the reorganization committee had continually before it in the shape of the unsettled suit of Mrs. Wall, notice of her purpose to press her claim for the $554,900, with interest, against the National Cordage Company. If the receivers did not know of this purpose, it was because of negligence attributable to them. The complaint in the New York suit was served upon Mr. Loper and by him handed to one of the counsel employed by the receivers. I cannot account for a failure to read and understand it, upon any other hypothesis than negligence. Mr. Whitehead’s fault was not concealment of his purpose, but failure to present a formal claim, upon which the receivers might adjudicate, within the time limited for the presentation of such claims.

It does not appear that this is a case of deliberate disregard of the chancellor’s order in subserviency to an ulterior purpose detrimental to the trust administered, as was Lee v. Green, 1 Dick. Ch. Rep. 1; nor does it appear that the failure to present the claim was the result of careless indifference. While it does appear that during the delay the bulk of the commercial paper upon which William Wall’s Sons were liable was taken up by the reorganization committee, and that thereby an achievement much desired by Mrs. Wall was accomplished, it does not appear that her claim now urged was withheld so that she might secure that event. On the contrary, her complaint in the New York suit made it clear that it was her purpose to urge this claim. Indeed, by that suit she did urge it. The neglect to take the course now sought appears to me rather to have been the outcome of confidence in the efficacy of the negotiations which followed the commencement of the suit in New York, to secure the ends wished for. The application was made before any dividend was paid by the receivers and consequently they retained enough to accord it the same dividend that others have received, if it shall be allowed.

The reorganization committee is not in position to complain that the allowance of the claim will disturb its calculations, for its members have known of the existence of the claim unsettled throughout their entire workings. I think that I should not deny the application, but that I should at present admit the claim, as was done in Watjen v. Green, 3 Dick. Ch. Rep. 331, for the purpose of investigating its merit, not only as an existing legal obligation of the National Cordage Company, but also, if it be found to be a legal obligation, as a just charge for the plant transferred, reserving the- right to hereafter admit it wholly or partially to .a dividend, as justice and equity may require.

The receivers’ inventory exhibits that the present value of the real estate is $157,950, and that the present value of the personal property is $242,575, making the whole $400,525, and this valuation of the personalty I find exceeds the rating of it in the various statements, from time to time rendered by Mrs. Wall’s partners to her, one of which was in the very year of the sale. These indications of the real value of the property, together with the circumstances under which the agreement of sale was made, which, to some extent, I have adverted to, impress me that the price, $954,900, for the fee of a property which the company already had secured by lease for ninety-nine years, may have been so greatly and fraudulently in excess of the true value that it will be inequitable as against other creditors and the corporation itself to permit the unpaid balance of $554,900, in whole or in part, to participate in the receivers’ dividends.

In the claim which shall be presented for investigation, the sale of the plant to the National Cordage Company must be ratified by the claimants, because the attitude assumed in the New York suit is one of hostility to its validity.


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    The Harlem Co-operative Building and Loan Association v. Emily F. Freeburn.
    1. The personal representative of a deceased mortgagor, because by law the mortgage debt is primarily charged on the personal assets, need not be made a party to a suit for the foreclosure of the mortgage.
    2. Where the allegations of, and ends sought by, the bill show ground for a defendant executor, named as an individual, without official designation, in the prayer for process, being in court in a representative capacity, he or. she will be regarded as being there in that capacity, but not otherwise.
    On demurrer to bill.
    The complainant’s bill alleges that on the 2d of May, 1890, Archibald Freeburn, being indebted to the complainant in the sum of $5,500, together with his wife, Sarah, mortgaged to the complainant the fee of certain premises, situate in the city of Bayonne, in this state, to secure to it the payment of that money in manner'specified in the bill; that on the 11th of August, 1892, Sarah, the wife of Freeburn, died; that on the 15th of April, 1895, Freeburn died, having remarried and leaving a widow named Emily F., and a son named William B. Freeburn; that on the 27th of May, in the same year, his will was proved before the surrogate of Hudson county, by which, after directing the payment of his just debts and funeral expenses and certain legacies to his son, he gave and devised the residue of his estate, real and personal, including the mortgaged premises, to his widow, Emily, and constituted her and one Alfred Haynes, executors of the will; that Haynes renounced the executorship and letters testamentary were issued to Emily Freeburn alone. Emily F. Free-burn is the only defendant to the bill, which was filed August 8th, 1895. In the prayer for process she is styled Emily F. Freeburn and is not there designated as the executrix of the estate of her husband. The bill prays for answers from “ said defendants,” and that “ they or some of them ” may be decreed to pay the principal sum due on the bond and mortgage, with interest, and complainant’s costs and charges, and, in default thereof, that the “said defendants” may be foreclosed of and from equity of redemption in the mortgaged premises and may deliver possession thereof &c., and that complainant may have other relief as may be just.
    To this bill Emily F. Freeburn demurs upon the grounds— (1) “that the said complainants have not, in their said bill; prayed for any decree against this defendant;” (2) “neither doth said bill pray any answer from or relief against this defendant,” and (3) “ that Emily F. Freeburn, executrix of Archibald Freeburn, deceased, should be made a party defendant.”

      Mr. Henry Traphagen, for the demurrant.

      Mr. Samuel C. Mount, contra.

   The Chancellor.

It is clear that the first two grounds of demurrer are not well taken. By carelessness, the draughtsman of the bill has used a printed blank, covering the prayers of the bill, which deals in the plural, with defendants to a bill, and has neglected to make the necessary alterations in it to make the prayers treat of a single defendant. It may be possible, for reasons hereafter appearing, that he considered Mrs. Freeburn a defendant in double capacity and therefore to be treated in the plural. However this may be, it is obvious, upon inspection of the bill, that the styling of defendants in the plural was a mistake which, including the single defendant, does not lead to any confusion. Within the plural defendants, the bill does pray a decree against the demurrant and that she may answer.

The third ground of demurrer, that Mrs. Freeburn should be made a party as executrix of her husband’s will, I also think is not well taken.

The personal representative of a deceased mortgagor, because by law the mortgage debt is primarily charged on the personal assets, need not be made a party to the foreclosure of the mortgage. If the heir desires the benefit of having the personal estate applied in exoneration of the real, he must enforce the right by filing a bill. Story Eq. Pl. §§ 175, 196; 1 Dan. Ch. Pr. 283; Duncombe v. Hansley,3 P. Wms. 333 n.; Bradshaw v. Outram, 13 Ves. 234. But the mortgagee need not look to the personal assets of the estate. He may proceed to foreclose the equity of'redemption in the mortgaged premises in which the heir alone is concerned. But it is urged that the executor, as the representative of the creditors of the mortgagor, should be made a party.

The argument is, that for a year after the death of the mortgagor his equity of redemption in the mortgaged premises is subject to the lien of his debts, in virtue of the statute (Den v. Hunt, 6 Halst. 1; Bockover v. Ayres, 7 C. E. Gr. 1; Haston v. Castner, 4 Stew. Eq. 697; Trimmer v. Todd, 7 Dick. Ch. Rep. 426), and, in this case, that the real estate is charged with the payment of debts by the will, because of its provision for their payment and the subsequent disposition of the residue of the estate as blended realty and personalty (Stevens v. Flower, 1 Dick. Ch. Rep. 340), and that this court will not proceed with the foreclosure suit until all existing encumbrancers, subsequent to the mortgage foreclosed, shall be made parties to the suit. Gould v. Wheeler, 1 Stew. Eq. 541; Vanderveer v. Holcomb, 2 C. E. Gr. 87.

The primary difficulty with this position, and a difficulty which precludes the necessity of discussing the propositions presented, is, that upon demurrer we are confined to the allegations of the bill which are to be taken as true, and that it does not appear among the allegations of the present bill that there will be a deficiency of personal assets to pay debts, or, in fact, that there are any debts to pay. It is true that the will contemplates debts, but it does not follow from that contemplation that there are, in fact, debts.

The complainant argues that the executrix is a party, because Emily F. Freeburn, against whom process is prayed, appears by the allegations of the bill to be both executrix and devisee, and, that appearing, she need not be styled in these several capacities in the. prayer for process; being brought into court in her proper name, she is there for all the purposes of the bill. It is true that she is in court for all the ends obviously sought by the bill. That is, she is in court as devisee, because, as such, she is the owner of the equity of redemption, but she is not there as executrix, because no allegation of the bill discloses a necessity for her being there in that character. As I have said, there is no charge of the existence of debts which the personalty will not satisfy, or of the existence of debts at all. The bill does not intimate a purpose to foreclose redemption by creditors, or by the executrix in their behalf.

Where the allegations of, and ends sought by, the bill show ground for a defendant, named asan individual in the prayer for process, being in court in a representative capacity, he or she will be regarded as being there in that capacity, but not otherwise. Evans v. Evans, 8 C. E. Gr. 71; Ransom v. Geer, 8 Stew. Eq. 249; Plaut v. Plaut, 17 Stew. Eq. 18; White v. Davis, 3 Dick. Ch. Rep. 22.

I will overrule the demurrer, with costs.


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    Luther Kountze v. The Proprietors of the Morris Aqueduct Company, George B. Smith, Carnot B. Meeker and Guy Minton.
    Where, upon an order to show cause why an injunction shall not issue, the facts upon which the equity invoked must rest, are explicitly denied by responsive answers, a preliminary injunction, except in cases of peculiar hardship, will be denied.

      On order to show cause why an injunction shall not issue to stay proceedings in condemnation &c., heard on bill, maps and affidavits, and answers, maps and affidavits.
    The bill alleges that the complainant owns and occupies several hundred acres of land in Morris and Passaic counties, which he designs to improve and use for country residences; that a portion of his land adjoins property of the Proprietors of the Morris Aqueduct Company, and upon it exist springs and streams of water which are capable of being used to beautify his property and enhance its value; that the aqueduct company to aid it in its duty of supplying the town of Morristown with water, desired to acquire the water of those streams and utilize springs upon its own lands by conducting them into the streams of'the complainant and through and by those streams to its settling basins and reservoirs; that, with this object in view, it deliberately entered upon the lands of the complainant, without his permission, and, at points, dug out and completely filled up portions of the beds of his streams, conducting the water through covered tile drains, and thus destroyed the natural appearance of his land, which clearly manifested its fitness for the purposes aforesaid, to which he designed to devote it; that after those trespasses the aqueduct company applied to a justice of the supreme court for the appointment of commissioners in condemnation proceedings under the statute entitled “An act for the construction, maintenance and operation of water works for the purpose of supplying cities, towns and villages of this state with water,” approved April 21st, 1876 (Rev. p. 1S65), to appraise the value of a designated portion of the complainant’s land to be taken, and the damages to other parts of his land which would be occasioned by laying and maintaining a tile drain not more than six inches in diameter, four feet below the surface of the laud, protected by a surface drain on each side of it, designed to prevent surface water from reaching the drain and contaminating the spring water flowing through it; that commissioners were appointed and viewed the premises in obedience to the statutory requirement, before making their award, and found there the changes wrought by the defendant’s trespassers, which were of such character that the commissioners were unable to ascertain the original appearance of the land and the advantages of the natural water-courses to it; that the defendant company denies having made certain changes which the complainant insists that it did make, and that the commissioners cannot, by the testimony of witnesses, obtain a satisfactory conception of the natural appearance of the complainant’s land. Thé bill prays that the defendant company may be enjoined from further prosecution of its condemnation proceedings, and that the commissioners may be restrained from making their award until the complainant’s premises shall be restored, by the defendant company, to their natural condition and be viewed in that condition, and that the defendant company may be restrained from continuing to maintain its pipe drains and the altered streams upon the complainant’s land, which divert the waters from their natural courses.
    ' By its answer, supported by several affidavits, the defendant company avers that the complainant’s land in question lies at an outskirt of his domain a mile and a half from his dwelling-house, a half mile from any other dwelling on his land and a quarter of a mile from a public highway, and that it is a deep hollow and swamp, covered with briers, brush and trees, and has never been put to any beneficial use by the complainant and is at least a mile from any beautifying improvements made by him; that the defendant company is the owner of land on the east, south and west of the land in question; that upon its land to the east there are several springs, which, in state of nature, yielded a small rivulet, which ran upon the complainant’s land for a short distance and then out of its southerly boundary upon the defendant company’s land and then back to the complainant’s land again, and, further on easterly, again upon the defendant’s land; that in order to secure a full flow from its springs on the east, uncontaminated by surface drainage, the defendant company dug down to them, and by means of several covered tile drains, laid four or five feet below.the surface of the earth, conveyed the water to the bed of the rivulet in the complainant’s land and, the drain at that point being some three feet below the surface of the bed of the rivulet, entered upon the complainant’s land and deepened the bed of the rivulet there, which descended as it ran westerly, from three feet at the boundary of complainant’s land to nothing at seventy-five feet westerly from that boundary and, finding that the sides of the excavation, by reason of the depth for the first twenty feet, through the influence of frost or surface wash, were apt in time to fall in, for that distance continued its tile drain upon the complainant’s land and filled in the bed of the stream over it; that for four hundred feet the rivulet, being constantly enlarged by tributaries, ran through the complainant’s land southwesterly in its natural state, until it crossed the boundary into land of the defendant company; that upon its land south of the complainant’s property the defendant company by other drains, from springs upon its land there, increased the volume of the stream, and to facilitate the running of the water, straightened and deepened the channel until in a straight line it again entered the complainant’s land, and by that straightening process it may have cut off from the complainant a few feet of the stream, as the complainant insists, made by a bend, running into his land easterly of the point where the straightened stream now enters it; that at the extreme southwesterly corner of the complainant’s premises a small rivulet from the defendant company’s land, the water of which can be discharged through a pipe one inch in diameter, entered the complainant’s property and ran northerly fifty or sixty feet to the main stream, and by means of a little drain, in part constructed across a corner of the complainant’s land, the rivulet was entirely diverted from the complainant’s property; that otherwise than in the particular stated, the complainant’s property was undisturbed ; that all these changes are readily discernible upon the ground, except perhaps the cutting off of the bend, and whether a bend was in fact cut off the defendant company doubts, but nevertheless admits and, prior to the filing of the bill, at the time of the view by the commissioners, did admit to the commissioners, for the purposes of the condemnation, according to the complainant’s assertion of the fact; that all these changes were made in the summer of 1893, nearly two years prior to the commencement of the condemnation-proceedings, when the relations between the complainant and the defendant company were amicable and they were negotiating for a sale of the rights which the company now seeks by condemnation, and' in the presence of the overseer and workmen of the complainant and not clandestinely; that the changes were not made in contemplation of condemnation proceedings, nor with intent to embarrass those proceedings; that the changes are visible and were readily ascertainable by the commissioners when they viewed the premises, and they have benefited the complainant in the proceedings in condemnation by adding to the volume of the water in the streamthat until the bill in this case was filed, and until after the commissioners’ view was had at the expense of the defendant company,- the complainant failed to indicate any desire that the property should be restored to its former condition; that such restoration would be expensive and would not be productive of any practical use in the condemnation proceedings; that if made in good faith it is doubtful whether the complainant would be satisfied with it and would not dispute its accuracy in a prolonged litigation.
    The three commissioners in condemnation, who are made defendants, answer that their view of the lands was satisfactory to them; that they understood that they were to regard the change in the stream at the bend referred to as having been made by the defendant company in manner insisted upon by the complainant; that the changes in the bed and course of the stream “were very slight and that they had no difficulty in seeing and understanding just how and where the stream ran in its natural condition and the quantity of water naturally running and the natural appearance of the ground; ” that the changes will not create any difficulty in their reaching a proper estimate of the value of the land and rights taken and the damage caused by the proposed works to the complainant.

      Mr. Thomas N. McCarter and Mr. Cortlandt Parker, for the complainant.

      Mr. John O. H. Pitney and Mr. Henry C. Pitney, Jr., for the defendant company.
   The Chancellor.

The relief which the complainant seeks by its bill is "from the effect of deliberate trespasses, which, he claims, is the transformation of the appearance of his land so that it misleads, and will mislead, those who officially view it in course of condemnation proceedings, as to the real value of the property and rights to be taken. The implication from the bill is that the trespasses immediately preceded the proceedings in condemnation, as though designed to prejudice them and give the aqueduct company an undue advantage, but that feature is eliminated by the explicit státement in the company’s answer, that the trespasses preceded the condemnation nearly two years and were committed while friendly negotiations were pending for the purchase of the rights and property desired by the company. The company admits that its trespasses were’deliberate, but it denies that the effect of the trespasses was or is to transform the appearance' of the complainant’s land so that its natural condition and advantages, as discernible by view prior to the trespasses, are not now manifest on view, and, by particular description of the character and extent of the trespasses, demonstrates the probable truth of its denial. In this denial it is also supported by the answer of the defendant commissioners.

It is needless to discuss the merit of the equity claimed, for, by this denial, so far as the present application is concerned, the case is reduced to one of mere trespass, without feature to invoke the interposition of a court of equity.

The facts upon which the equity must rest being explicitly denied by responsive answers, a preliminary injunction will not ordinarily be issued. The exception to that rule is where withholding the injunction will deprive the party of all relief in case he be finally successful, or subject him to some irreparable injury or peculiar hardship. I do not perceive danger of such a result in this case, for if the damages in the condemnation should be affected injuriously to the complainant by fraud of'the defendant company which cannot be defeated in those proceedings, I have little doubt as to the power of this court, on final hearing, to ascertain what the just sum to be paid should be and to compel the defendant company to pay its excess over the commissioners’ award. But the danger of such an event in the present condemnation proceedings is reduced to a minimum by the conditions that the defendant is alert to detect fraud, and the commissioners are empowered by the law under which they act to hear the parties interested and take evidence, and are not required to depend alone upon their view of the premises.

Upon this consideration I will discharge the order to show cause and deny the application for a preliminary injunction.


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    Samuel R. Manning v. The Port Reading Railroad Company.
    1. Where an action at law in tort was brought to recover damages for the obstruction of an easement, and, upon a plea of not guilty, recovery was had, it is held that the plaintiff’s right to the easement at that time was established between the parties to the suit.
    2. Also that such recovery is prima facie evidence of the continuance of the plaintiff’s right.
    3. An easement is not lost by mere cesser of use for two years.
    4. The owner of land subject to an easement of way cannot, without the consent of the person having the easement, change its location.
    5. Where a person having an easement of way stands by, while a railroad company, without knowledge of his right, erects an expensive railway embankment over the place of the way, he will not be allowed a decree for the abatement of the obstruction until the railroad company shall have a reasonable opportunity to condemn the right of way.
    On bill and answer.
    The bill alleges that iu the year 1865 Mefford Runyon conveyed to the complainant the timber growing, and thereafter to grow, upon a piece of land in Middlesex county, and in the year 1867 conveyed to him in fee a parcel of land adjoining the first-mentioned property; that the complainant took possession of the parcels of land and fenced them in one enclosure, and yet retains that possession; that the properties could be reached only by means of a private way running from a public highway over lands lately belonging to one John L. Brewster; that such private way, as a means of access to the lands aforesaid conveyed to the complainant, has existed from time without memory; that it existed when the land of Brewster belonged to Ephraim L. Runyon, who, in 1861, conveyed it to Ephraim D. Boice, who in turn, in 1867, conveyed it to John L. Brewster and Herbert Murphy, Murphy subsequently conveying his interest to Brewster; that in the year 1891 Brewster conveyed a strip of his land which crosses the private way nearly at right angles, to the defendant, in order that that company might construct thereon its railway, the defendant agreeing to take the land by conveyance upon the same terms as it would have it if it had condemned it by proceedings for that purpose under authority of' the General Railroad law; that among other things, the defendant agreed with Brewster to maintain a crossing over the railway between the portions of Brewster’s lands remaining in his ownership and possession; that the defendant fenced the strip purchased of Brewster ou both sides and built its railway upon an embankment erected on the strip it purchased, which, at the point of crossing the private way, is ten feet in height; that in July, 1893, the complainant commenced an action in tort against the defendant, in the Middlesex county circuit court, for damages because of the obstruction of his easement by the railway embankment from the time of the erection thereof to the commencement of that suit, which suit was removed to the court of common pleas for trial, and was there resisted by the defendant, under a plea of not guilty, after notice to Brewster, who had conveyed to it with a covenant of warranty, to the end that he might defend the suit; that the trial of the issue resulted in a verdict of guilty against the defendant and an assessment of the complainant’s damages at $95, besides costs of suit, upon which verdict judgment was duly entered ; that upon such judgment the defendant sued out a writ of error to the supreme court, which was subsequently dismissed. The bill prays, among other things, that the defendant may be required, by decree, to abate and remove the obstruction to the private way, or at its own expense provide and maintain for the complainant’s use a proper and convenient passage through its embankment and under its railway, at the place where it intersects the private way.
    In its answer the defendant denies that the complainant has the right of way claimed by him; alleges that if he ever had it he has lost it by non-user; admits that it erected its embankment in 1891, and that in 1893 the complainant sued it in tort for obstruction of the private way aforesaid, and that it pleaded the general issue in the suit, and that the suit resulted as is alleged in the complainant’s bill. It avers that since the suit at law aforesaid, upon each side of the strip of land purchased by it from Brewster, at the point where the private way crosses the same, it has constructed a gate in its fence, from which, northeasterly, it has built two roadways parallel with each other, one on each side of the railway embankment, running a distance of about two hundred and fifty feet, and gradually rising until a grade crossing of the railway is reached, its purpose being by that means to provide a method of crossing the railway without going through the railway embankment;. that a crossing through the railway embankment would cost $5,000 or $6;000, while the yearly damage to the complainant from the obstruction which the railway embankment occasions will not exceed $25.

      Mr. Alan H. Strong, for the complainant.

      Mr. Robert Adrain, for the defendant.
   The Chancellor.

Two questions present themselves — -first, whether the existence of the right of way claimed by the complainant is established by the pleadings, taking the answer as true; and second, whether the defendant can require the complainant to accept the substitute it offers for the complainant’s original crossing over the strip conveyed to it by Brewster.

First. We have, in the bill and answer, this posture of allegation : The complainant asserts an easement in the private way in himself and the defendant denies it. The complainant adds that in 1893 he sued at law in tort for damages because of the obstruction to the identical easement claimed and, upon issue raised by the defendant’s plea of not guilty, he recovered damages. The defendant admits this to be true.

To so recover the complainant had to show (1) the existence of a right to himself in the easement, and (2) the obstruction of the easement. Failing in either particular, the judgment must have been against him. I think that his recovery in that action against the virtual owner of the land establishes the existence of his right to the easement at the time when that suit was brought, and is prima facie evidence of the continuance thereof. Parker v. Standish, 3 Pick. 288.

blow, the answer avers that if the complainant ever had the easement he has lost it by non-user, the specification of which manner of loss impliedly excluding claim of loss in any other way. If the complainant had the easement in 1893, as his recovery establishes, his loss by non-user must have occurred since that time. , It is not alleged that circumstances indicative of an intention to abandon the easement accompanied the nonuser, so that a presumption of release arises, exist. The allegation is of mere cesser of use, which could not have continued more than two years. The easement cannot be thus easily lost. Godd. Easem. 466. So understanding the allegations of the answer, I think that the complainant’s right is in effect admitted.

Second. I am also satisfied that the defendant is without power to change the location of the complainant’s right of way and substitute another way for it. Jennison v. Walker, 11 Gray 423; Bannon v. Angier, 2 Allen 128; Smith v. Lee, 14 Gray 473; Chandler v. Jamaica Pond Aqueduct, 125 Mass. 550.

Third. In determining what relief the court should afford the complainant, it is considered that he stood by while the defendant, so far as appears, without knowledge of his right, erected its railway embankment and built its railroad thereon, permitting it to make expenditures which a timely assertion of his right might have enabled it to save, and, on the other hand, that his right is established, and unless this court shall interfere, it is apparent that repeated lawsuits must be resorted to in order to secure him from time to time compensation for the damages which he will continually suffer. Under the circumstances it will be equitable, I think, to allow the defendant six months within which to condemn the complainant’s right of way, and if within that time or within such further time as, upon its application, the court may think proper to allow, the right of way shall not be condemned, it will be decreed that the defendant shall remove the obstruction.