text:
    Agnes Devine v. Thomas A. Devine.
    [Submitted April 16th, 1918.
    Determined June 5th, 1918.]
    Adultery of a wife, committed after the execution of a separation agreement providing that the husband shall make regular stipulated payments to her, will defeat the recovery by her of the stipulated payments failing due after the act of adultery.
    On final hearing on bill to recover balance due on an agreement of separation.
    This is a suit brought by a wife against her husband to recover money claimed as due by the terms of a written agreement wherein the parties agreed to live separate and apart from each other, and the husband agreed to pay to the wife $15 per week. The following is a copy of the agreement:
    “This agreement made and by and between Mr. Thomas A. Devine, Plumber, known as the party of the first part. Mrs. Tho’mas A. Devine, wife, known as the party of the second part.

      “It is mutually agreed that the said' Thomas A. Devine, husband, party of the first part, will pay to his wife, Mrs. Thomas A. Devine, the party of the second part, the sum of $15.00, fifteen, dollars per week.
    “Also the party of the first part must pay to the landlord the sum of $15.00, fifteen,, dollars for the rent of house No. 20- S. Georgia Ave. due on September 10th, ’15. It is also agreed that this shall be the last payment of rent by the party of the first part.
    “It is also mutually agreed that the party of the first part will begin the payments of the $15.00 weekly on September 18th, T5, and the weekly payment shall continue to be paid on every Saturday following.
    “It is further understood that the'party of the second’ part shall remain away from the party of the first part place of business, also shall not by any means annoy or otherwise interfere with the party of the first part.
    “If this agreement is violated by the party of the second part the weekly payments shall cease.
    “Thomas A. Devine, Husband.
    “Mbs. Thomas A. Devine, Wife.
    “Harry H. Freed, Witness.”
    At the hearing it was conclusively established by way of defence that the wife committed adultery in August, 1916. The primary inquiry herein is whether the wife’s adultery was operative to defeat her recovery of the stipulated weekly payments falling due by the terms of the agreement .subsequent to her adultery.

      Mr. John F. X. Ries (by Mr. Elwood C. Weeks), for the complainant.

      Messrs. Bolte, Sooy & Gill (by Mr. H. Walter Gill), for the defendant.
   Leaming, V. C.

It is urged in behalf of complainant that an equitable defence cannot be entertained in a suit of this nature; that the suit being solely for the recovery of money due under a contract and being brought in this court because the law courts cannot entertain an action by a wife against her husband, this court is restricted to the same defences that a law court could entertain had there been a trastee to prosecute the action in a court of law in behalf of the wife. This view is suggested in Buttlar v. Buttlar, 57 N. J. Eq. 645 (at p. 654), but is not made the basis of decision in that ease. In a subsequent suit between the same parties (Buttlar v. Buttlar, 71 N. J. Eq. 671), the same question arose and was necessary to the decision of the case. It was there pointed out that it is not the incapacity of one spouse to sue the other at law which denies jurisdiction to a law court, but their incapacity at law to make a contract; that at law agreements between husband and wife are void, but in equity they will be recognized and enforced if fair and fairly obtained. Accordingly, it was there held that equitable defences must be entertained in this court in suits of this nature. The same view was adopted in Halstead v. Halstead, 74 N. J. Eq. 596, 598. It seems impossible to doubt the soundness of the view that where a spouse comes into a court of equity to invoke its established equitable powers to give recognition to a contract which is classed as void at law, such appeal for equitable relief necessarily calls into activity every recognized equitable consideration entering into the controversy that may aid a just determination of the rights of the parties. It is this enforcement of the rights of the parties in accordance with the inherent justice of the case which courts of equity are constantly striving to attain through the enforcement of the established rules of equity jurisprudence. But I think a solution of the present controversy may be reached without the aid of any rules which are classed as obtaining in courts of equity exclusively.

What effect upon the legal rights of complainant arising from this agreement is to be given to her adultery committed after the execution of the agreement ?

In England the adjudications from an early date have been to the effect that the adultery of the wife committed after the execution of a separation agreement will not deny to her the right of recovery of the stipulated periodical payments for her support falling due after her adultery, unless the agreement expressly provides that the payments shall continue to be made only so long as she remains chaste; that in the absence of such dum. casta clause in the agreement no such clause will be implied.

Those adjudications cannot be appropriately disregarded unless conditions are found to exist in this jurisdiction which deny to them the force they would otherwise possess. In that view a consideration, of the English cases seems necessary.

The English authorities touching the question here propounded are the following: Sidney v. Sidney, 3 P. W. 269; Winter v. Blount, note to 3 P. W. 277; Field v. Serves, 4 B. & P. (1 B. & P., N. R.) 121; Seagrave v. Seagrave, 13 Ves. Jr. 439; Scholey v. Goodman, 1 Bing. 349; Jee v. Thurlow, 2 B. & C. 547; Baynon v. Batley, 8 Bing. 256; Evans v. Carrington, 2 De G. F. & J. 481; Gandy v. Gandy, L. R., 7 Pro. Div. 168; Bradley v. Bradley, 7 Pro. Div. 237; Fearon v. The Earle of Aylesford, L. R., 14 Q. B. Div. 792; Sweet v. Sweet (1895), L. R., 1 Q. B. 12.

21 Cyc. 1597; 9 Rul. Cas. L. 632, and 12 Eng. Rul. Cas. 814, note, are to the same effect, but are wholly based upon some of the cases above cited.

An examination of these cases will disclose that one of the controlling circumstances on which the learned judges have based their conclusions is the fact, repeatedly stated, that in England the preparation of separation agreements has long been in the hands of skilled solicitors who have thought it expedient to embody dum casta clauses in such agreements; from that circumstance the inference is drawn that in the absence of that clause in a separation agreement, so prepared, an implied condition that the wife shall remain chaste will not be inferred. The inference is not drawn that the parties intended that the wife should be privileged to commit adultery, for a provision in the agreement to that effect, or even an ascertained purpose of the parties to that effect, was held to render the whole agreement void (Evans v. Carrington, 2 De G. F. & J. 481, 492), but by reason of the customary use of the dum casta clause by skilled draftsmen, its absence was deemed measurably operative to repel an implied condition which might otherwise have been thought necessarily present in agreements of that nature. The agreement here under consideration clearly dispels all force that has been given to considerations ’ of the nature stated, for this agreement obviously has been drawn by the parties or by some person wholly unskilled in drafting agreements of any kind. So far as the English cases can be said to rest upon the inferences to be drawn from the custom of skilled draftsmen of separation agreements, it seems clear that their force is lost in the present controversy.

But an important radical difference is to be found between the English law and that of this jurisdiction which appears to invade the very foundation of the decisions above cited and further renders them inapplicable to our conditions. In England the contract of a husband and wife to live apart is not restricted by law to the period of their mutual assent, and the contract can be specifically enforced; either spouse, if without wrong, may, by force of the contract, maintain a bill to restrain the other from an action for the restitution of conjugal rights. See Besant v. Wood, L. R., 12 Ch. Div. 605, and cases there cited. In New Jersey separation agreements have no such force. Here married persons may agree to live separate and apart from each other because it is their privilege to live in that manner so long as they mutually desire to do so, and the husband’s agreement to support his wife during that period of time is in harmony with his lawful duty; but an agreement of separation cannot confer on either party the right to live away from the other against the will of the other. Aspinwall v. Aspinwall, 49 N. J. Eq. 302; Mockridge v. Mockridge, 62 N. J. Eq. 570. By policy of the law the period for which they thus contract touching their separation is limited to the period of their future mutual assent to live apart. Accordingly, in the absence of wrong-doing on the husband’s part, he may require his wife’s return to his bed and board, and her refusal will not only constitute her an obstinate deserter, but will deny to her any right to support from him, notwithstanding the existence of an agreement wherein they have mutually stipulated to live apart. Moores v. Moores, 16 N. J. Eq. 275; Power v. Power, 65 N. J. Eq. 93; S. C., 66 N. J. Eq. 320. The wife’s act of adultery while living separate from her husband, pursuant to the terms of a separation agreement, is thus operative to deny to her husband the right to require her return to him — a right preserved to him by our law — unless he condones an act jvliich he is under no legal or moral obligation to condone. And the legal obligation of a husband to support his wife exists only so long as she shall remain chaste (Bradbury v. Bradbury (Court of Chancery), 74 Atl. Rep. 150), unless it shall be held that the burden of the agreement for support contained in a separation agreement survives that period.

It thus appears that in this jurisdiction, unlike England, the period of operation of the stipulation to live apart, however broadly expressed, cannot lawfully be extended, or contemplated as intended, to extend beyond the time when either party shall withdraw assent; that the husband's withdrawal of assent to the separation brings into existence the duty of the wife's return; that her failure to return denies to her the right to further support, so far as the stipulations of the agreement touching her right to live away from her husband are concerned; that her adultery in like manner denies to her the right to further support, so far as the stipulations of the agreement touching her right to live apart from her husband are concerned. Accordingly, the absence of a limitation as to time or event in the provisions of the agreement touching support, if held to entitle the wife to support, notwithstanding her unlawful refusal to return or notwithstanding her adultery which denies to her the right to return, must be deemed to relate to and include circumstances and conditions which the law does not permit the parties to contemplate in their stipulations touching their right to live apart. As the agreement to live apart necessarily reserved to both parties the right to withdraw from that engagement at any time, without such right being expressed in the agreement, it would seem that the stipulation touching support, contained in the same agreement (which stipulation in such circumstances clearly contemplates separate domiciles which render the stipulated periodical payments for support necessary), must be understood as operative only within the legitimate field of operation of the primary stipulations of the agreement touching separation. So closely related are the engagements for living apart and for support that any appropriate recognition of established rules of construction appears to require that in a single instrument they should be read together and understood as dependent and coextensive in their operation and force; the termination of the contractual force of the engagement for separate domiciles should thus terminate the obligation contemplating and based upon the existence of that condition. The absence in the English law of this limitation upon the rights of the spouses to contract, touching the period of their separation, appears to impel the conclusion that the decisions of that jurisdiction are inapplicable to conditions here present. Moreover, any assumed contemplation of the parties that a virtuous wife may fall from virtue attributes to a virtuous woman an almost impossible and wholly unreasonable conception, and attributes to the husband a contemplation so unnatural and so at variance with the field of privilege which the law extends that the implied condition of chastity seems necessarily present in such agreements.

In this country, Babcock v. Smith, 22 Pick. 61, and Galusha v. Galusha, 116 N. Y. 635, may be cited as indirectly bearing upon the question here involved. The former was a bill in equity... for relief against the provisions of a marriage settlement because of the adultery of the husband. The view is there adopted that the conventional disposition of property in a deed of marriage settlement will not be disturbed. In the latter case it was held that the annual allowance for the wife’s support as fixed in a separation agreement would limit and control the amount of alimony which the court could award the wife in her divorce decree against her husband. See dissenting opinion of the chief-justice in this ease, reported at end of Clark v. Fosdick, 118 N. Y. 18.

In this state, in Dixon v. Dixon, 23 N. J. Eq. 316, a bill was filed by the husband to set aside a conveyance which had been made by the husband to his wife’s trustee, in settlement of her suit for maintenance. The ground for relief was the wife’s adultery. On the motion for a preliminary injunction the wife’s adultery subsequent to the conveyance was treated as admitted. It was there held by Chancellor Zabriskie that a deed of settlement of that kind, if good at its execution and delivery, would not be set aside for adultery or any misconduct of the wife afterwards. Some of the English cases above cited are there referred to in support of that view. The same view was adopted by Vice-Chancellor Dodd, to whom the case was referred for final hearing. Dixon v. Dixon, 24 N. J. Eq. 133. In Lister v. Lister, 35 N. J. Eq. 49, the bill, filed by a husband, sought to set aside conveyances which he had made, or caused to be made, to his wife, the ground of relief in part being the wife’s subsequent adultery. No separation .agreement was there involved. The court found the conveyances to have been gifts to the wife and held that her subsequent adultery afforded no ground for setting aside the conveyances. The same authorities cited in Dixon v. Dixon, supra, are there partially reviewed. In these New Jersey cases the effect of the subsequent adultery of the wife on executory stipulations for the wife’s support contained in a separation agreement was in no way involved or considered. The conveyance Avhich was sought to be set aside in Dixon v. Dixon was made long before the adultery was committed; there was clearly no total failure of consideration and no basis for relief against the deed pro tanto.

I am convinced that the engagements of defendant for weekly payments to his wife for her support can only be understood in this jurisdiction as relating to such period of time as the parties should reside separate and apart from each other pursuant to and by reason of their mutual agreement for that purpose; that the engagements of defendant for weekly payments for his wife’s support while so living apart from him must also be understood as accompanied by an implied condition that she remain chaste during that period of time.


source: Caselaw Access Project

author: Lewis, V. C.

license: Public Domain

text:
    Paul Beardsley, executor, &c., v. Lucy Howard Wright et al.
    [Decided April 2d, 1918.]
    Where testator has given a legacy to a brother who predeceased him, leaving a widow and' two children, his sole descendants, who survived the testator, the widow takes- no share in the legacy, and no part of the legacy can go to the residuary legatee.

      On bill, &c. Heard on bill and answei*.

      Mr. Gilbert Collins, for the residuary estate.

      Mr. Edward A. Markley, for the children of legatee.

      Mr. Frank W. Hastings, for the widow of legatee.
   Lewis, V. C.

Testator gives a legacy of $50,000 to a brother who predeceases the testator, leaving a widow and two children his sole descendants, all three of which last-mentioned persons survive the testator. There is a residuary clause in the usual form in favor of testator’s children.

Query. Does the widow take any share of the legacy, or does a share pass under the residuary clause, or do the children of the brother, the legatee, take the whole amount ($50,000) ?

1. The solution of the problem involves a construction of section 22 of our act concerning wills. 4- Oomp. Stat. p. 5866. This statute deals with and provides for the following situation:

(1) - There is a devisee or legatee who is either a descendant of the.testator or a brother or sister of the testator, or a descendant of such brother or sister of the testator.

(2) The statute only applies where we have a devisee or legatee who comes within one or the other of the three classes enumerated above.

(3) Devisee or legatee must predecease the testator.

(4) The devisee or legatee must leave “a child or children, or one or more descendants of a child or children who shall survive” the testator.

It is worth while to note that the original statute saving devises, &c., from lapse was passed in. 1824. Elm. Dig. 601 § 32; Rev. Stat. 1847 p. 369 § 22. This act did not extend to brothers or sisters or descendants of brothers or sisters of the testator. Devises or legacies to these collaterals still lapsed if the devisee or legatee predeceased the testator. Our present statute which extends protection against lapsing to the cases where the devisee or legatee is the brother or sister, or descendant of a brother or sister of the testator, was enacted in 1887. P. L. 1887 p. 63 ch. 47.

2. The widow takes no interest whatever. The reasons which compel a construction of the statute so as to exclude the widow are, in my judgment, plain and cogent.

(1) In the first place, the widow is not named. The takers under this statute, i. the descendants of the legatee, who predeceased the testator, take their' shares solely by force of the statute.

(2) This statute, like the one providing for afterborn children, is based -upon a presumed intention of the testator. If a man leaves each of his two sons $50,000, and one son dies leaving children before the testator can make a new will, the statute comes in and recognizes a presumption that the testator, if his attention had been called to the matter and he had had the opportunity, would not have allowed his grandchildren to be unprovided for. There is no such presumed intention in the case of a son’s widow or a brother’s widow. These widows are not of the blood of the testator. They may remarry and have other children.

(3) It seems to me to be a fatal objection to the widow’s claim that if-the legatee leaves no descendant, but leaves a widow, the statute does not apply and a lapse occurs and the widow gets nothing. To give the widow a share in case the legatee left a child or children, while she taires nothing in case there was no child of the legatee, seems to me to make the statute almost absurd. Whether the widow takes a share or not depends upon an accident. Why should the statute establish a presumption that a testator desired a legacy to his brother to go in part to his brother’s widow, if the brother had a child or children, but entertained no such desire in case there was no child.

(4) To emphasize the last point let us consider that the descendants of the brother whose existence prevents the lapse, may. not be children of the widow but children of the legatee’s former wife.

(5) It must be borne in mind that this statute preventing lapse in certain cases applies equally to a devise and a legacy. Let us suppose the testator devises valuable improved lands which have large rentals to the brother who predeceased him leaving a widow and children by that widow or by a former wife. Is it possible that by implication an estate of dower can be vested in this widow? Is not the mere statement of this question its complete answer?

(6) Last of all, the statute expressly says that the estate so devised or bequeathed shall vest in such child or children, &c. It is not a part of the estate but the whole of it which is to vest in the children. This point, however, can more satisfactorily be considered a little later.

(7) My conclusion is that to give a widow a share of the legacy or an estate of dower in the devised land by implication would be a violent wrenching of the words and the spirit of this statute.

Lord Halsbury has sharply criticised the tendency of some courts to read into a will provisions which the court thinks the testator would have inserted if his attention had been called to the matter. Statutes, like the one we are considering, illustrate a correct and altogether justifiable juridical process. The difference in respect of this matter between the court’s action in inserting provisions in a will, and the action of the legislature in making a law governing the devolution of property, is too plain to call for discussion.

3. No part of the legacy can go to the residuary legatee. Nor, we may add, in the absence of a residuary clause could any part of it go as in case of intestacy. The following are the reasons which support this view:

(1) Such a construction malees a lapse and nullifies the express words of the statute. The statute, as quoted above, is absolute and positive that in the situation with which the statute deals, “such devise or legacy to such person,” &c., shall not lapse. Lapsed devises and legacies, of course, go under the residuary clause. The only way the residuary legatee can get any interest in the legacy or devise of land is by a lapse.

(2) ’ lYe again note that it is the whole estate so devised or bequeathed which the statute says shall vest in the descendants of the devisee or legatee who had the misfortune to predecease the testator.

(3) The consideration of the case of a devise of land, I think, will show that a violent stretching of the meaning of words,' and what an extension of a law by implication are necessary to pass any interest under a residuary clause.

The widow, we have seen, gets no dower. The children, however, upon the theory which we are considering, only take the devised land subject to a life estate which is exactly equivalent to the widow’s dower. This life estate created somehow — a sort of left over or undisposed of part of the land devised — is supposed to go under the residuary olause. This is a clear case of lapse. The residuary devisee cannot possibly get this life estate in the land on any theory but that of lapse. This life estate was a part of the devise to the brother.

4. In my opinion, the whole of the legacy, or of the devise, as the case may be, is saved from lapse by the express terms of the statute and is vested in the descendants of the devisee or legatee.

The only argument that I have been able to think of against this construction which leaves the widow out, whether she is the mother of the children of the deceased devisee or legatee, or a second wife of the legatee and a stranger in blood to all parties concerned, and also denies that any share of the devise or legacy can go under a residuary clause, is based upon the words of the statute which provide that the “estate so devised or bequeathed shall vest” in the descendants, &c., “in the same manner as if such legatee or devisee had survived the testator or testatrix and had died intestate.”

This language, it seems to me, simply provides the manner in which a class shall take the whole estate. The important function of these words, I think, was to provide that the devise or legacy should be distributed per capita or per stirpes, according to circumstances under a definite specified rule. The respective shares or proportions inter sese in the devise or legacy which the descendants of the devisee or legatee would take in case such devisee or legatee died intestate owning the property, are made the measure with which to accomplish the distribution of the whole estate.

If the devisee or legatee dies intestate, it does not follow that his widow has dower or takes a distributive share of his personal estate. There may be a jointure — a marriage settlement. In such ease we may ask at this point, Would it not be amazing to give a life estate in one-third of the land to a residuary devisee, or one-third of the legacy of $5,000 to a residuary legatee in case there was no jointure or marriage settlement, and to give the residuary devisee or legatee nothing in ease there was a jointure or marriage settlement excluding the widow from all participation in her deceased husband’s estate ?

The statute does not say that “the estate so devised or bequeathed” shall vest in the descendants to- the same extent or in such shares, &e. The plain mandate of the statute is that the whole estate which the brother would have taken if he had survived the testator shall vest in the descendants of the brother, but as between and among themselves the estate is to vest “in the same manner,” i. e., per capita or per stirpes, as they would take inter sese if their ancestor had died the owner of the property in question.

Eestating the argument in a somewhat different form, it may stand as follows:

Descendants of a deceased brother may consist of children and grandchildren, the grandchildren being children of a deceased child or deceased children of the brother. These descendants of different generations take in very different shares inter sese. Each of two children may take a quarter of the $50,000. A set of four grandchildren may each take a sixteenth, and a set of two grandchildren may each take an eighth. The statute in providing that there should be no lapse, but that the whole estate devised or bequeathed should vest in the descendants of the devisee or legatee, properly and naturally provides a test by which in all sorts of cases it may be determined precisely what the relative interests of the different descendants are — in what “manner” the whole devise or the whole legacy is to be divided among them.

An ancient and familiar rule of construction makes it necessary that force be given, if possible, to every portion of this statute. In this case we have an unqualified declaration, to the effect that when a certain situation exists, a devise or legacy to a dead person “shall not lapse, but the estate so devised or bequeathed,” i. e., the whole estate, the entire subject-matter of the . devise or bequest, shall vest in the descendant or descendants of the deceased intended devisee or legatee. But the counsel for the residuary devisee or legatee says that when the situation described exists, and there is a widow of the deceased devisee or legatee, there shall be a lapse for the benefit of the residuary devisee or legatee. This nullification of the statute in the particular case which must often occur, is reached by attributing a very wide and potent meaning to the words “in the same manner,” &c. But under the principle above referred to, if we can give a reasonable meaning and effect to this phraseology, “in the same manner,” &c., without radically modifying the positive declaration of the statute that there shall be no lapse, &c., surely we ought to do so. I am firmly of opinion that such reasonable meaning and effect are attributed to the words in question when they are restricted to the definition of the reciprocal rights of the descendants inter sese. I may go further. If the statute had not intended by these words “in the same manner,” &c., merely to define how the class should take mier sese the estate which their ancestor would have taken if he had survived the testator, the draftsman of the statute and the legislature could by the use of two or three words have made the matter perfectly plain. It is unreasonable to suppose that this unqualified language preventing a lapse would have been employed if it was in the legislative mind that there would be in many cases a very important implied modification permitting a lapse.

In dealing with the claim on behalf of the residuary devisee or legatee, I do not think that I have made quite enough of one situation to which this statute applies. It will be observed that the lapse is saved on behalf of all the descendants who may take, as we have seen, per capitabut often will take per stirpes. The widow of tire deceased intended devisee or legatee is ignored and takes nothing, and I do not care to further argue the case against her. The point that I am trying to elucidate is this, that this statement preventing lapses necessarily applies in large number of instances to the wills of testators who die in old age, leaving married children and different sets of grandchildren, and brothers and sisters and nephews and great nephews. In case the deceased devisee or legatee, if we may use that phrase for convenience, has a descendant, or number of descendants, in many cases he, she or they will have a step-mother or step-grandmother whom the testator may never have known. Now', is it not a most extraordinary construction of this statute to make a devolution of a large amount of property under a residuary clause to depend on a pure accident?

In the case in hand, let us suppose, whatever the fact may be, that the widow of the brother who predeceased the testator was a second wife or a third wife by whom the brother had no child. The lhere fact, however, that the brother in his later years remarried, and that the wife survived him and survived the testator, does not give her anything, but gives $16,666.66 to the residuary legatee. This residuary legatee would not take any part of this money if the intended legatee had not married the last time, or if the wife had not survived the testator, or if there was a jointure or marriage settlement which expressly operated to prevent her from taking any part of the personal estate of her husband in case he died intestate.

In the case supposed we have a widow who is not of the same blood as the testator or the descendants of the intended legatee. The survivorship of this widow gives her absolutely nothing. She does not take such portion of the legacy or the devised land as she would have taken if her deceased husband had been the owner of the property when he died intestate. And yet the mere fact of the existence of this woman who is utterly unrelated to any possible transactions or situations contemplated by this statute, has the effect to cut down the shares which the descendants of the legatee, her step-children or step-grandchildren, otherwise would take. In the case under consideration, the second or third wife by surviving the testator does not get-the $16,666.66, or any part thereof, but in some mysterious way by her survivor-ship effects the taking of that much money from her stepchildren and the transfer of this substantial sum to the residuary legatee.

My view is that no part of the legacy shall lapse, but it shall wholly vest in the children.


author: Backes, V. C.

text:
    Mary F. Pierson v. Annie N. Chardavoyne et al.
    [Argued February 13th, 1918.
    Decided February 26th, 1918.]
    1. Power to amerce a sheriff under 1 Comp. Stat. p. J/28 § 1¡9 is independent of amercement under sections 48 and 50, and penalty thereunder cannot be inflicted unless the sheriff has adjourned the sale more than twice, or exceeding one month for each adjournment; and other derelictions, .such as failure v to advertise, must be prosecuted under other sections.
    2. Under section 49 the sheriff is not liable to amercement for wrongful adjournment of an execution sale where he made two adjournments of one month each, by adjourning from week to week, to preserve the integrity of the published notice of sale, and avoid readvertisement, such weekly adjournments being subservient to the two monthly adjournments.
    3. Even if the sheriff’s adjournments were excessive, he should not be amerced on motion on the day preceding the sale without opportunity to make the sale and' be credited with the proceeds by bringing them into court before entry of judgment of amercement, especially where the plaintiff suffered no injury but delay, and the defendants were making efforts to pay the debt before sale.
    On motion to amerce.

      Mr. Ellis L. Pierson, for the complainant.

      Mr. William Nelson Runyon and Mr. William R. Wilson, for the respondents.
   Backes, V. C.

Motion is made to amerce the sheriff of Middlesex county on the ground that he adjourned the sale of land “more than twice without the consent of the complainant or her solicitor.”

Section 49 of the Chancery act (Comp. Stat. p. 428) provides:

“If the sheriff or other officer shall neglect or refuse to execute any writ of fieri fados to him directed or delivered, for the space of two months, or shall adjourn the sale or vendue of the lands, tenements, hereditaments and real estate by himi levied upon by virtue of such writ of fieri, facias, more than twice or exceeding one month for each adjournment, he shall be and is hereby made liable to the amount of the debt or damages and costs, or sum or sums of money mentioned in the said writ, with interest, and for the recovery thereof may be amerced and proceeded against in the manner prescribed in and by the last preceding section of this act; provided, if the said sheriff or other officer shall, at any time' before the entry of such amercement against him as aforesaid, sell the property levied upon, and bring the whole amount of the product of such sale (after deducting his lawful fees) into court, the said sheriff or other officer shall be exonerated from all liability on account of said amercement.”

Tlie sheriff advertised the sale to take place on January 2d, 1918, and on that day adjourned it for four weeks to January 30th, and thence for another four weeks to February 27th. He did not advertise the adjournments. In adjourning the sale twice, and each adjournment being for less than a month, the sheriff acted within his authority, and if he had advertised the adjournments there could have been no criticism of the legality of his acts. Paragraph 3 of the Sale of Land act vests in sheriffs the power to make adjournments from time to time, within limits, and by paragraph 5 he is limited to two, each not to exceed one month. Comp. Stat. p. 4666. These provisions have been part of our statutes since 1799. P. L. 1799 ¶. 485. Publication of the adjournments were not required (Coxe v. Halsted, 2 N. J. Eq. 311) until 1867, when what is now section 6 of our Sales of Land act was enacted. P. L. 1867 p. 762. Sections 48 and 50 of our Chancery act relating to amercement of sheriffs were a part of the Chancery act of 1799 (P. L. 1799 p. 604), while section 49, under which these proceedings were instituted, was introduced into the act in 1820. P. L. 1820 p. 103. The power to amerce under this section is exclusive and independent of the remedies provided by the-other two, and under it the penalty cannot be inflicted unless the sheriff adjourned the sale “more than twice or exceeding one month for each adjournment.” Other derelictions, such as failing to advertise adjournments, must be prosecuted under other sections, and upon notice specifying the derelictions, and if the case rested here the complainant would he without standing on this motion as framed, the ground of which is, as already stated, and upon which she must stand or fall, that the sheriff adjourned the sale "more than twice without the consent of the complainant or her solicitor.” Stryker v. Merseles, 24 N. J. Law 542.

But the whole story has not been told. Two days before the day advertised for the sale, the sheriff wrote to the complainant’s solicitor that he would adjourn the sale "for one month, week by week.” To this there was no protest. At the time the adjournments were made the sheriff announced that the sale would be adjourned for four weeks, week by week, and weekly thereafter he made public proclamation of the continuances. On January 12th the solicitor informed the sheriff that as he had made two adjournments he would insist upon the sale taking place on January 16th, the second intermediate adjourned day, and at that time the solicitor appeared and insisted that the sale be called, which the sheriff declined to do. The defendants were not present, nor anyone representing them. On the next continuance day, January 23 d, a, similar demand was made and refused, and on the following day notice of this motion was given and brought on for hearing on affidavit and proofs taken in open court. It has been for many years the practice with sheriffs— an old custom — to adjourn sales for a longer period than a week, by adjourning them from week to week to the fixed date within the month. This is done to save the costs of publishing the adjournments and is an unobjectionable procedure in the conduct of the sale, but upon proceedings to amerce for adjourning oftener than permitted by the statute, the question presented is whether the intermediate adjournments enter into the calculation. I am of the opinion that they do not. The adjournments proper were for four weeks each, and the intermediate adjournments were subordinate and subservient, serving to preserve the integrity of the publication of the notice of sale and to promote the title to be made thereunder.

If I have erred in this view, there is a further consideration why there should be no amercement, at least, not at this time. The sale is to take place to-morrow and the sheriff ought to be allowed to avail himself of the benefit of the proviso of section 49 to sell the property and bring the proceeds into court to exonerate himself of liability, if any exists. For a violation of this section the infliction of the penalty is imperative, subject to the proviso under which it is possible for the sheriff to discharge himself by selling the property and bringing the proceeds into court before the entry of judgment, and where the time is not sufficient to enable him to accomplish this, he ought not to be foreclosed by the action of the court, unless it appears that he acted fraudulently or in wanton disregard of the rights of the complainant. The testimony discloses no abuse of authority on the part of the. sheriff. The circumstances under which he exercised his discretion warranted his course. The mortgage under foreclosure was dated January 23d, 1917, payable in one year, with the usual thirty-day interest accelerating clause. The time for the payment of the first installment of interest expired on the 22d of August. The next day — one day too late — the defendants tendered the interest, but it was refused, and on the same day the bill was filed. This appears from the answer, which was properly stricken out as offering no defence to the complainant’s right to prompt payment. The reason for filing the bill so promptly, as explained, was that the complainant regarded the land as scant security and feared loss by delay. No explanation, of course, was necessary; she was strictly within her rights, and it is only mentioned here to show the predicament in which it suddenly put the defendants. The solicitor who represented the defendants in the cause, a gentleman of high standing at the bar, applied to the sheriff for the adjournments, informing him of the efforts being made to raise the money to satisfy the fi. fa. and assuring him, or, perhaps, expressing his belief, that if the sheriff exercised his discretion and granted the adjournments for two months, the matter would be settled, at the same time giving it as his opinion that the property was ample security for the mortgage debt. Having full confidence in the solicitor, which I am sure was not misplaced, and feeling that a short extension would do the complainant no harm, and would help the defendants out of their difficulty, he promised to make the adjournments. The defendants, an aged couple, were striving hard to. save their property, which is said to be worth considerably'more than the amount of the mortgage, and they are confident of raising it before the sale. They have sufficient funds to bid the amount of the fi. fa. and to pay ten per cent, of the bid, and if they cannot place the loan elsewhere they have reasonable prospects of obtaining the money from a near relative. In open court they offered the complainant, as I recall, $1,500 or $2,000 if she would extend the time for six months, which she declined to do and which, of course, was her right. The value of the complainant’s security remains unimpaired and she has suffered no injury except the inconvenience caused by the two months’ delay in obtaining her money. Even if.I had held that the sheriff was amerceable, I still would feel it my. duty, under the circumstances, to await -the outcome of the sale and to give him the opportunity to exonerate himself by bringing the product into court.

The motion will be denied, without costs.


author: Backes, Y. C.

text:
    James A. Thompson, petitioner, v. Ethel Prince Thompson.
    [Submitted March 15th, 1918.
    Decided April 5th, 1918.]
    1. A foreign decree of divorce is not entitled to recognition under the full faith and credit clause of the federal constitution, unless the court had jurisdiction over the subject-matter and both parties. Service of process within the state is necessary to obtain jurisdiction over the defendant, unless the matrimonial domicile is in the state, when jurisdiction may be had' by substituted service.
    2. A foreign decree of divorce is not entitled to enforcement on the principles of comity, unless the court obtained jurisdiction in the manner. and in substantial conformity with the requirements, for acquiring jurisdiction in such cases in this state, i. e., the plaintiff for the two years next preceding the commencement of the action must have been a tona fide resident of the state in which the divorce was obtained, except in causes for adultery.
    3. A foreign decree of divorce granted for a cause which occurred while the parties resided in this state and the defendant went "into another in order to obtain it, is without force or effect.
    4. The rule of public policy established by the Divorce act is applicable to foreign divorces either a mnoalo or a mensa et thoro.

    5. The jurisdiction of a foreign court over the parties or subject-matter may be inquired into and determined by the court in which the judgment is sought to be enforced. An adjudication by a foreign court that it has such jurisdiction is of no evidential force in determining whether such jurisdiction existed.
    G. A husband’s domicile, in legal contemplation, is the domicile of the wife, and. is unchangeable by her, except with his acquiescence or consent, or for such misconduct on his part, inimical to the union, as justifies her in selecting another. Whether such justifying cause existed is to 'be determined, upon evidence, by the tribunal in which a foreign judgment of divorce is offered.
    On petition for divorce a vinculo for desertion.

      Mr. Nelson B. Gaskill and Mr. Henry Crofut White, for the petitioner.

      Mr. John W. Ockford, for the defendant.
   Backes, Y. C.

The parties were married at Peekskill, Yew York, April 19th, 1913, and went to Montreal to live. In February, 1914, they moved to Trenton, where they set np housekeeping, and where the petitioner engaged in business. Tn May the defendant-visited her former home in Poughkeepsie to consult her family physician regarding her pregnancy. It was understood that the visit was to be of short duration, but by mutual understanding it was extended from time to time and finally it was arranged that she should stay until after the baby was born. Tn the meanwhile, the petitioner spent week-ends with her and was con-' stantly in communication by mail and telephone. After she recovered from childbirth the defendant showed no inclination to rejoin her husband, although frequently importuned to do so, and she did not yield until December 20th, when she returned with him to their apartment in Trenton. After getting supper together they retired to separate bedrooms for the night. In the morning the petitioner found that his wife had fled with the baby and luggage. She returned to Peeksldll, and, immediately, through her attorneys, made overtures for a separation. These being rejected, she, on January 15th, began an action in the supreme court of the State of New York, for the county of Westchester, for a separation from bed and board, on the grounds of creel and inhuman treatment. Service of process within the state being unobtainable, substituted service, conformable to the code and pursuant to an order of the court, was made upon the petitioner, personalty, in this state. The suit was undefended, and on July 24th, 1915, the court, upon a finding that the defendant “has cruelty and inhumanly treated his wife,” decreed that “the said plaintiff and defendant be separated from bed and board forever.” After the defendant left so suddenly, and up until long after she had brought her suit, the petitioner made strenuous efforts to reconcile her and to bring her to a sense of duty, but she remained obdurate. ' The separation decree was based upon the unsupported testimony of the defendant, which discloses not even a modicum of proof of the charge, and the only way to account for the defendant’s conduct is that she had been reared in luxury, was highly temperamental, and could not, or would not, accommodate herself to the modest, though comfoi table, surroundings her husband’s moderate income provided, and that the duties of wife and the environments of housekeeping were uncongenial and distasteful. The evidence shows a clear case of willful, continued and obstinate desertion for the statutory period, and the petitioner is entitled to a divorce unless the desertion was tolled by the New York decree.

In the answer to the petition, after admitting the marriage, it is alleged that before the commencement of this suit the defendant brought her action as above stated; that the court had jurisdiction over the subject-matter, and that the defendant was then, and had been for upwards of six months next preceding, a bona fifte resident of the State of New York; and that service was made and that judgment was entered as hereinbefore related. A duly exemplified copy of the judgment roll was offered in evidence, and the sole contention is that it is plenary proof of the plea, under article 4, section 1 of the constitution of the United States, and upon principles of interstate comity. I am of the opinion that it has not the support of either.

1. The judgment is manifestly not entitled to recognition under the full faith and credit clause of the federal constitution, because the foreign court had not jurisdiction over both of the parties, nor over the matrimonial domicile. Service of process upon the defendant within the confines of the state is an essential requisite (Haddock v. Haddock, 201 U. S. 562) unless the matrimonial domicile is in that state, when jurisdiction may be had by substituted service. Atherton v. Atherton, 181 U. S. 155: Thompson v. Thompson, 226 U. S. 551. The rule is recognized in this state in Doughty v. Doughty, 28 N. J. Eq. 581; Wallace v. Wallace, 62 N. J. Eq. 509; reversed on facts, 65 N. J. Eq. 359; Watkinson v. Watkinson, 67 N. J. Eq. 142; reversed on facts, 68 N. J. Eq. 632. In the Atherton Case the husband sued his wife for divorce on the ground of desertion in the jurisdiction of the matrimonial domicile, and judgment was entered upon constructive service. The supreme court held the clause to be binding and precluded the wife from asserting that she left her husband on account of his cruel treatment and from setting up that she was enabled to acquire, and had in fact acquired, a separate domicile. It is still open to debate whether the rule would apply if the wife brought the action in the matrimonial domicile, in view of the husband’s ability to establish a domicile elsewhere, at will, although it is strongly intimated in the opinion that it would. In the case of Harding v. Harding, 198 U. S. 317, cited by the defendant in support of the proposition that a divorce a mensa et thoro is an absolute bar to an action for divorce a vinculo on the ground of desertion, the supreme court held the clause to be operative because the court whose judgment was interposed as a bar had jurisdiction over the subject-matter and the parties. So much as to the conclusiveness of the judgment strictly under the constitution.

2. The judgment is not entitled to enforcement on the ground ' of interstate comity. Before the present Divorce act was passed, the judicially declared policy of this state was to give full faith and credit to decrees of divorce pronounced by a court of another state, in which the complainant was domiciled and which had jurisdiction of the subject-matter of the suit, notwithstanding that the defendant did not reside within the jurisdiction of the court which pronounced the decree and had not been served with process therein, provided that a substituted service had been made in accordance with the provisions of the statute of that state and that actual notice of the pendency of the suit had been given to the defendant and a reasonable opportunity afforded to put in a defence thereto; and provided further, that the ground upon which the decree rested was one which the public policy of this state recognized as a sufficient cause for divorce. Felt v. Felt (1899), 59 N. J. Eq. 606. But in adopting the Uniform Divorce law in 1907 (Comp. Stat. p. 2021) the legislature established an entirely different rule of public policy regarding the force to he given to such foreign decrees. Section 33 provides:

“Full faith and credit shall be given in all courts of this state to a decree of annulment of marriage or divorce by a court of competent jurisdiction in another state, territory or possession of the United States when the jurisdiction of such court was obtained in the manner and in substantial conformity with the conditions prescribed in sections five, six and seven of this act. Nothing herein contained shall be construed to limit the power of any court to give such effect to a decree of annulment or divorce by a court of a foreign country as may be justified by the rules of international comity; provided, that if any inhabitant of this state shall go into another state, territory or country, in order to obtain, a decree of divorce for a cause which occurred while the parties resided in this state, or for a cause which is not ground for divorce under the laws of this state, a decree so obtained shall be of no force or-effect in this state.”

Section 7, which is the pertinent one, provides that jurisdiction for the purpose of divorce, whether absolute or from bed and board, may be acquired by substituted service:

“(a) When at the time the cause of action arose, the petitioner was a bona fide resident of this state, and has continued so to be down to the time of the commencement of the action, except that no action for absolute divorce shall be commenced for any cause other than adultery, unless the petitioner has- been for the two years next preceding the commencement of the action a bona fide resident of this state.”

This new mile was adopted to put a check upon “migratory divorces” and controls the present situation absolutely.

That a foreign court assumes jurisdiction over the subject-matter within its state, under the provision of its laws, and that its adjudication is there valid and effectual, are matters wholly irrelevant to the test fixed by our statute, which necessarily limits the inquiry to the ascertainment of whether the foreign jurisdiction was obtained in the manner and in substantial conformity with the requirements imposed by the legislature upon this court in acquiring jurisdiction in such cases, of which the principal and governing one is, except in causes for adultery, that the petitioner “has been for the two years next preceding the commencement of the action a bona fide resident of this state.” The defendant was, admittedly, not a resident of New York for that period, and, consequently, the judgment is impotent here. It is possible to suppose a case where the rigidity of the statutory rule of comity would be relaxed, but this is not one of them.

Furthermore, the statute bars the decree from recognition because the divorce from bed and hoard was granted for a cause which occurred while the parties resided in this state, and the defendant went into New York in order to obtain it. If the charge of cruel and inhuman treatment had been well founded, full redress would have been available to the defendant in this court, but instead of seeking relief here, she forthwith, after separating from her husband, instituted her action in New York. That her program at the time of the separation was to be rid of him and to bring an action to that end, if necessary, there can be little doubt. While it is true that she returned to the place where she had been previously harbored for seven months, it is a fair inference that she was bent upon a divorce and that her return to' New York was incidental to its accomplishment. Her conduct was in fraud of our law. The case is within the statute. The term “in order to obtain a divorce” is not quite so limited to a case of actual intent and purpose as if the phrase had been “for the purpose of obtaining a divorce.” Lyon v. Lyon, 68 Mass. (2 Gray) 367. It is within the power of the state to forbid the enforcement of such a decree. Andrews v. Andrews, 188 U. S. 14.

It is argued that the rule is not applicable to foreign divorces from bed and board and that the legislation was intended to thwart convenient methods to absolute divorces only, but I can see no merit in this contention, and, indeed, the language of the statute, which in the jurisdictional feature embraces both kinds of divorce, is a complete answer. The mischief aimed at by the legislature is as potential and baneful in the one as in the other, differing only in degree and results. Both strike at the very vitals of that holy institution which is the foundation of the family and of society and whose influence has been so profound upon the morals and civilization of the people, in that one as effectually releases the couple from their solemn undertakings to dwell in unity and to faithfully discharge their marital duties and obligations as the other, differing only in the added quality in the one, whereby the parties are free to form other alliances, which in some instances may be an aggravation, while in others a blessing. It is of far greater concern to the welfare of the state, it seems to me, that the parties'be held to a strict accountability in regard to their duties and obligations arising out of the union, than is the mere adjustment of their status in its relation to society and property, and it indeed would be strange that the legislature, in its effort to -regulate the important subject of marriage, should include one form of divorce and not the other. See Ditson v. Ditson, 4 R. I. 87.

3. The decree is invalid, because the court did not have jurisdiction over the subject-matter upon which it pronounced judgment. In passing, it may be said that the judgment was not obtained by any actual fraud practiced upon the court, because all the facts attending her domicile in 'this state and her departure therefrom and her then abode were fully and truthfully set forth by the defendant in her complaint, so that the single question is whether the court rightfully assumed jurisdiction. It is a fundamental principle of general jurisprudence that a divorce can be granted only in the state wherein the status on which it operates has a situs. And it is also entirely settled that the jurisdiction of the adjudging court, whether over the parties or the subject-matter, may be inquired into and determined by the court in which the judgment is sought to be enforced. Fairchild v. Fairchild, 53 N. J. Eq. 678; Thompson v. Whitman, 18 Wall. 457; Wisconsin v. Pelican Ins. Co., 127 U. S. 265; Andrews v. Andrews, supra; German Savings Society v. Dormitzer, 192 U. S. 125; National Bank v. Wiley, 195 U. S. 257; Wallace v. Wallace, supra; Watkinson v. Watkinson, supra. Under the New York code a. separation may be granted from bed and board forever for cruel and inhuman treatment (section 1762) where the parties were married within the state and the plaintiff is a resident thereof when the action is commenced (section 1763), and a married woman is deemed a resident if she dwells within the state, although her husband resides elsewhere. Section 1768. And it is there held that the "residence” required of the plaintiff is synonymous with "domicile,” and that "dwells,” as used in section 1768, neither adds to nor subtracts from that meaning. Barber v. Barber, 89 Misc. 519; DeMeli v. DeMeli, 120 N. Y. 485.

The inquiry then resolves itself into whether the defendant acquired a new domicile in New York, by which she carried the res, or a part of it, with her. The husband’s domicile undeniably was in this state, which, in legal contemplation, was also that of the wife, and was unchangeable by her, except with his acquiescence or consent, or for such misconduct on his part, inimical to the union, as justified her in selecting another. Tracy v. Tracy, 62 N. J. Eq. 807; In re Geiser Will, 82 N. J. Eq. 311; Cheever v. Wilson, 9 Wall. 108; Hunt v. Hunt, 72 N. Y. 217. Whether there was such justification is purely a question of fact to be passed upon by the trial court, in which the judgment is offered, in determining whether a separate domicile had been acquired, and in this determination the foreign adjudication that the petitioner had been guilty of cruel and inhuman treatment and that the defendant was justified in the separation and that she acquired a domicile within the state, and that the court had jurisdiction over the subject-matter, has no evidential force whatever. Such, in effect, is the ruling of the supreme court of the United States, in the cases hereinbefore cited; and it was so declared by this court in the Watkinson Case. Chief-Justice Marshall, speaking for the supreme court, in Rose v. Himely, 4 Cranch 241 (269), said: “Upon principle, it would seem that the operation of every judgment must depend on the power of the court to render that judgment; or, in other words, on its jurisdiction over the subject-matter which it has determined. In some cases that jurisdiction unquestionably depends as well on the state of the thing as on the constitution of the court. If by any means whatever a prize court should be induced to condemn, as prize of war, a vessel which was never captured, it could not be contended that this condemnation operated a change of property. Upon principle, then, it would seem that, to a certain extent, the capacity of the court to act upon the thing condemned, arising from its being within or without their jurisdiction, as well as the constitution of the court, may be considered by that tribunal which is to decide on the effect of the sentence.” The rule laid down in Fairchild v. Fairchild, supra, is not in conflict with this principle. In that case a Kansas divorce was offered in bar to a bill for maintenance, and the learned chief-justice, in delivering the opinion of the court, used this language : “By the statute of that state the plaintiff in -an action of divorce is required to have been an actual resident in good faith of the state for one year next preceding the filing of his petition. It was, therefore, necessary for the Kansas court, before taking up the consideration of appellant’s case upon the merits, to determine whether he had been an actual resident of the state in good faith for at least a year next preceding the commencement of his action, and that decision, unless procured by fraud, is conclusive, not only in Kansas but in every other jurisdiction where the validity of the judgment comes in question.” The Kansas court had jurisdiction over the parties and over the subject-matter of the litigation; the defendant, although not a resident of that state, having voluntarily appeared and defended the action. In disposing of two grounds of attack upon the jurisdiction, one of which is mentioned in the quotation, the court held that they were defences which should have been interposed in the Kansas suit, and that the defendant having failed to plead them, the question of jurisdiction was res judicata.

As no testimony was offered to justify a severance of the joint domicile, and as, as a matter of law, the husband’s domicile in New Jersey is the domicile of the wife, it follows that the New York court was without jurisdiction, and that its judgment is void. A decree of divorce' will be advised.


text:
    Agnes M. Starr et al. v. David Wiley, trustee, &c.
    [Submitted March 19th, 1918.
    Decided April 16th, 1918.]
    1. A trustee will not be removed for discord existing between him and the cesiuis que trust, unless it arose out of his behavior.
    2. Where the funds of a trust estate are liable to be jeopardized, the remedy is to require the trustee to give a bond.
    3. On bill for removing a testamentary trustee where the filing of an account was delayed for seventeen years, and therefore the life tenants were delayed in the enjoj'ment of their interests, this complaint is without merit where ali parties were familiar with the situation and were satisfied and acquiescent.
    4. Such trustee was not blamable for loaning trust funds without statutory security where the loans were in fact secured and where he had staked his personal fortune to avert the bankruptcy of the venture on which depended the integrity of the complainants’ trust fund.
    5. The charge that the trustee took excessive commissions was not open to question where his compensation was annually fixed and allowed by the orphans court upon the state of facts disclosed by the accounts, and of which the court and] the parties were fully apprised.
    6. That the trustee failed to obtain interest on his bank balances did not show lack of diligence where the bank, in which the estate was a stockholder, did not allow interest on deposits; and if there was any lack of diligence in this respect, it should have been brought to the attention of the orphans court on exceptions to the trustee’s annual accounts.
    On bill, &c.

      Mr. Joseph Beck Tyler and Mr. Walter L. Sheppard, for the complainants.

      Mr. Thomas G. Hilliard and Mr. J. Forman Sinnickson, for the defendant.
   Backes, V. C.

The object of this bill is to remove a testamentary trustee. Josiah Morris died in 1891, and by his will, admitted to probate by the surrogate of Salem countjq appointed the defendant, Dr. David Wiley as executor thereof and trustee thereunder. The personal estate amounted to upwards of a half million dollars; there was also some real estate. By the will a fund of $75,000 was set aside in trust for his widow for life, and the remainder of the personal estate was bequeathed to the testator’s two sons, William McK. and Edwin J. Morris, and his three daughters, Mrs. Agnes M. Starr, Mrs. Josephine E. Carter and Miss Bessie L. Morris, in equal shares. The real estate was devised in trust, to pay one-third of the net income to the widow for life and the remaining two-thirds equally to the five children. Upon a sale by the trustee, with the consent of the life tenants, one-third of the proceeds was to be added to the widow’s fund and the remainder divided among the children equally. Upon the death of the widow, her trust fund was to be divided equally among the five children. The shares of the two sons were given outright. Those of the daughters were given in trust for life, with remainder to their issue, and in default of issue to the surviving brothers and sisters, in trust to the sisters for life. The executor filed an inventory of the estate shortly after he qualified, and at the expiration of a year, in 1892, he filed his account, at which time he made distribution of the estate, and entered upon the discharge of his duties as trustee. Miss Bessie L. Morris died in 1898, whereupon her share of the trust estate was divided. The widow died in 1914, and a division was made of her fund. The estate held in trust for Mrs. Starr and Mrs. Carter now amounts to over $250,000, made up of fifty-seven bonds and mortgages, three items of corporate stock and a small sum in cash. Neither of them has issue living, and the two brothers will, in all probability, succeed to the estate, if they survive. Mrs. Carter has been incompetent for many years, and in 1912 her brother William McK. Morris and Charles E. Hyatt, two of the complainants, were appointed guardians of her person and property. The cestuis que trust seek the removal of the trustee, and the gravamen of their complaint is that the trustee’s misbehavior has created distrust and has resulted in such a condition of mutual antagonism as to render him unfit to further properly discharge the duties of his office, and in support of .the right to remove they invoke the doctrine laid down in May v. May, 167 U. S. 310, and quoted and applied by Vice-Chancellor Stevens in Lister v. Weeks, 60 N. J. Eq. 215 (228), as follows: “ ‘The power of a court of equity to remove a trustee, and to substitute another in his place, is incidental to its paramount duty to see that trusts are properly executed; and may property be exercised whenever such a state of mutual ill-feeling, growing out of his behavior, exists between the trustees, or between the trustee in question and the beneficiaries, that his continuance in office would be detrimental to the execution of the trust, even if for no other reason than that human infirmity would prevent the co-trustees or the beneficiaries from working-in harmony with him, and although charges of misconduct against him are either not made out or axe greatly exaggerated.’ Of course, .friction or hostility between trustee and beneficiaries is not of itself a reason for the removal of the trustee; but where that hostility has arisen out of the misbehavior of the trustee it may be. Trustees exist for the benefit of those to whom the creator of the trust has given the trust estate. Letterstedt v. Broers, 9 App. Cas. 386.”

By way of a foreword to the discussion of . the specific acts of misconduct alleged against the trustee, it is just to say that the testator’s confidence in him was well reposed and has been sacredly observed, and that he has judiciously and with praisable fidelity managed the estate and scrupulously accounted for its yield. Dr. Wiley has been a lifelong resident of Salem; is a physician of high standing and a gentleman of impeccable character and of enviable reputation, and it is regrettable that his honor and integrity should have been assailed by ill-considered and extravagant charges of malfeasance, none of which finds support in the evidence.

That there is bitter feeling on the part of some of the complainants towards the trustee cannot be denied, and it also cannot be denied that it is not reciprocated on his part. It is also quite apparent that this ill-will has its origin in perfectly upright, but misinterpreted, conduct of the trustee in matters wholly foreign to the trust; and that loss of faith in the trustee, based on his alleged misconduct, is more simulated than real. Some of the history of this family quarrel is necessary. The two brothers, William McK. and Edwin J. Morris, are cotton-duck manufacturers, under the name of Morris & Company, at Groveville, Mercer county, and have been since 1882. They neither harmonized nor did they prosper. In 1908 they were in desperate financial straits and the breach between the two had widened considerably. At that time the trustee held a mortgage on their plant of $50,000, with some $20,000 of accumulated interest, and was also a creditor, personally and as trustee, for more than $30,000. It was in his power to close out their business, and to him William McK. appealed to remove Edwin J. from the co-management and to place him in absolute control. To this Dr. Wiley turned a deaf ear, because, as he said to William: “No, he is your brother and I won’t get in between brothers; you wouldn’t like it;” and this after William had sought to prejudice him against his brother by repeating uncomplimentary remarks alleged to have been made by the latter concerning the doctor. The sincerity of the trustee’s neutrality, and his honesty of purpose, it seems to me, cannot be mistaken, although William unreasoningly chose to misinterpret the decision as a reflection upon his capacity to rescue the firm and as a decided leaning of the trustee towards his brother; and this sentiment he fostered in his sister Mrs. Starr, who also was not well disposed towards Edwin. William’s self-appraisal, that he was the better man of the two to handle the business, maj' have been unexceptionable and he probably acted entirely unselfishly, but it was unfair and inconsiderate of him to accuse the trustee of favoritism for his refusal to do that which he would not have wanted him to do for his brother. The prudence and wisdom of the trustee’s course is not arguable, for had he acceded to the request he would have simply shifted the source of accusations and probably intensified them. However, two year’s later, by arrangement, William succeeded to the management, and has ever since carried on the business alone, and with success, as I understand. In connection with their cotton duck manufactory Morris & Company conducted another trade under the name Hus-song Dyeing Machine Company, a corporation, in which the brothers owned an equal number of shares and Hussong held the’ balance of power, he owning one-fifth of the issue. In August of 1911, Edwin purchased Hussong’s interest without the knowledge of William. Dr. Wiley loaned him part of the purchase price, with the understanding that his brother was to have one-half, and which in fact was later turned over to him. Dr. Wiley-acted in the utmost good faith, his single motive being to help the brothers to the absolute control of a very profitable business. Hpon learning of the purchase, the suspicion of favoritism became a conviction, and without stopping to inquire into and investigate the real situation, Mrs. Starr and William accused the doctor of unfairness, William declaring to him: “Doctor, you are going to regret that; you will probably regret that the longest day you live.” Whether this was a threat or a prophesy, is not clear, but if the latter, William certainly peered into the future with the eyes of a seer, for ever since that time the doctor has experienced round after round of litigation. William, who was treasurer of the Hussong company, refused to transfer the stock on the books of the company until decreed to do so on a bill filed by Edwin March 8th, 1912. Docket p. 570. On October 13th, 1913, William brought suit for a dissolution, and a receiver was appointed for the co-partnership, which was eventually settled by incorporating the business, each partner taking a half interest, with the exception of one share issued to a pacificator. Docket 87 p. 95. And by way of complement to this suit, on October 18th, 1913, Edwin caused the Hussong company to sue William and Morris & Company for an accounting for the unlawful conversion of its funds, and this also was settled out of court. Docket 87 p. 113. In all of these, Dr. Wiley was vitally interested, because of his heavy trust investments in the firm’s plant.. Then the complainant Agnes M. Starr filed a bill on November 12th, 1913, to remove him as trustee, which was dismissed February 20th of the following year. Docket 37 p. 1SS. Proceedings were next taken by her in the orphans court to restate an account filed by the executor in 1909, supplemental to the one of 1892, and of which more will be said hereafter, and after protracted litigation the court refused to disturb it on the ground that it truly stated all charges and discharges. This was affirmed by the prerogative court. Morris Estate, 97 Atl. Rep. 284. The present bill was filed July 25th, 1916. Meanwhile, exceptions were taken to the trustee’s account filed in the orphans court August 30th, 1916, and after a most elaborate and searching examination of the accountant, the court overruled the exceptions, which was affirmed by the prerogative court. Morris Estate, February 26th, 1918. For more than twenty year’s the trustee had annually accounted in the orphans court and always satisfactorily to all concerned, and it was not until William and his sister Mrs. Starr conceived the false idea that Dr. Wiley was partial to one brother to the prejudice of the other, that criticism of them was made, and then, unfortunately, they determined upon a policy of retaliation. Dr. Wiley has defended the attacks calmly and with a patience born of a^resoive to correct tire views his cousins entertain of him, confident that their better judgment will finally prevail and that they will become reconciled. He seems pained and distressed over their lack of confidence, rather than resentful.

I will now proceed to a discussion of the various acts of alleged misconduct which, it is contended, eventuated in absolute distrust; and in considering these, it is well to bear in mind that the moving spirit in this litigation is William McK. Morris, guardian, flanked by his sister Mrs. Starr.

1. I will first take up those that centre in the supplemental executor’s account filed in 1909. In this account the executor charged himself with $67,009.61, moneys which came to his hands since the filing of the original account in 1892, when a distribution of 'the estate was made. Of this sum, $49,775.27 represents the proceeds of the sale of what is known as the Wilmington property, sold in 1906-08, and the accumulation of interest thereon;- $9,404.85 represents the principal, and accumulated interest from 1899 to 1909, on the Empson-Atkinson, now known as the Mary A. Wetherby, mortgage; and $5,919.79, the principal and accumulated interest from 1893 to 1909, on the Samuel Oliphant, herein known as the Eobert Porch, mortgage; and the balance of $1,909.70 is made up of thirteen items, one, the proceeds of a small piece of real estate, and the accumulated interest on the purchase-money mortgage from 1893 to 1905, and the others, collections of accounts either not included in the inventory or charged off as doubtful in the original account. The Atkinson-Wetherby mortgage and the OliphantPorch mortgage were also charged off in the original account as doubtful.

One grievance is that in deferring the filing of the account for seventeen years, the life tenants were delayed in the enjoyment of the interest. In other words, accounts should have been filed oftener and distributions made earlier. An accounting of the Wilmington properties was delayed, seemingly for two reasons: The larger piece was sold for $38,000, in payment of which a purchase-money mortgage of $32,000 had to be taken, which was reduced in June of 1907 to $19,500; and the remainder was in litigation until October, 1908. Whatever the cause, all parties were familiar with the situation, satisfied and acquiescent, blow, as to the Oliphant-Porch and the Atkinson-Wetherby mortgages: When the distribution of the estate was made in 1892 they were cast aside as unfit for payment of the legacies, because of their questionable value, and were deducted from and allowed in the account. The trustee foreclosed them, bought in the properties and sold them-, taking purchase-money mortgages, for the full amount on the Wetherby property and on the Porch property, less a cash payment of $500. The securities were scant and the payments-of interest slow, and, as the trustee says, he liad to “nurse them along;” so much so, that when Mrs. Wetherby was two .years in arrears with her interest, and -was threatened with execution on a $1,000 judgment, he advanced her an additional $3,200 to liquidate the interest and to pay off the judgment, taking a third mortgage, which, however, included other property for which she had paid $4,700. This latter transaction is also brought forth as a cause of complaint, notwithstanding that the third mortgage has since been paid off, and that instead of suffering a heavy loss, the trust estate has a marketable $10,000 mortgage lien on property now worth sixteen to eighteen thousand. By the same careful treatment, the Oliphant-Porch mortgage has become marketable: The other moneys came in dribs and were used by the executor to defray current expenses of the estate unadministered, and debts which were overlooked in the 1892 account, as, for instance; the cost of the monument, which the executor personally advanced, and it was not until 1899 that the receipts equaled the disbursements. After that the accumulation of the bits was made to earn, and every penny of principal and interest was accounted for in the supplemental account of 1909. Miss Bessie Morris died before there was any income available for distribution out of this additional estate, and, consequently, the contention that she was affected by the delay fails. The other life tenants reaped the increments of the delay, without thought of complaint on that score, and their outcry at this late day is somewhat tardy.

Another reason for discontent is that the executor withheld knowledge of the funds. Dr. Wiley gave no intimation of his solicitude and thrift until shortly before the account was filed, and it came to the beneficiaries as an agreeable surprise. Mrs. Starr says she was delighted. Pour years later, it would seem she fancied ulterior motives and suffered a loss of faith. Without passing judgment upon her sincerity, it is sufficient to observe that the circumstances should have suggested the utmost rectitude and strengthened her confidence, for the windfall could have been easily “sunk without trace.” Albeit, the account has been submitted to judicial scrutiny twice and found to be unimpeachable, and all concerned received their just dues years ago, and with seeming gratification.

Fault is also found with the form of the account. It is not unlike the trustee’s annual account, with the frame of which there never was a quarrel; it was intelligible to the orphans court, which approved it, and it was understood by counsel, who examined upon it intelligent^, and it certainly is as understandable as are those of professional accountants to the average layman, and while principal and interest were mingled, they were properly adjusted in the distribution.

It is finally asserted that the trustee refused to permit a vouching of his accounts, and it is argued that he thereby confirmed Mrs. Starr’s and William’s suspicions of guilt. The assertion tells but half the story and weakens the argument proportionately It was not until after the two had determined upon strife, and indicated their intention to make things unpleasant, that he was called upon to submit his stewardship of twenty-two years to private audit. Two sets of accountants, retained by the complainants, had investigated, and when the third put in an appearance he wqs refused on the advice of counsel, and, I think, rightly. The trustee was not obliged to furnish ammunition to the complainants with which to distress himself, and if they were entitled to a vouching the law afforded the remedy through its courts, where also the interest of the trustee would have been safeguarded. It is proper in this connection to speak of the transaction relating to the Sharp mortgage, which Mrs. Starr says first aroused her suspicion, and an item of $240 that appeared in the supplemental account as dividend received from the stock of a military academy, which she says added to her anxiety. The mortgage was part of the daughters’ trust estate. In 1903 the United States government took the land in condemnation proceedings, and, through some mishap, the trustee failed to file his claim, and it became foreclosed. After diligent, but unsuccessful, efforts to collect the amount from the government, the executor reimbursed the estate in full in 1914. In the meanwhile the interest had been dropped from the annual accounts, which was noted by Mrs. Starr, who from time to time made inquiry and to whom the situation wa's. fully explained. I fail to see how this occurrence could have created doubt as to the trustee’s probity. The incident, and her protest in two other instances, where aged and impecunious mortgagors were in arrears, however, show Mrs. Starr’s thorough familiarity with the estate and how keenly she scrutinized the accounts. And so with the dividend on the academy stock. The academy was a family institution of the Hyatt’s, cousins of the Morrises. Many years ago the testator bought eight shares for $2,000, but whether he ever had a certificate is not known, and they were not listed among the securities in the inventory of the estate. In December of 1904, the executor received a check for $240, as dividends, with' which he charged himself in the supplemental account of 1909. Why Mrs. Starr should pick out this item from other and much larger items of income, as having aroused her suspicion that there might be other moneys unaccounted for, is inexplicable, and her assertion that it did, is incredible. The utter inconsistency of her after-attitude in relation to this stock, and her bent upon fault-finding, appear by her further complaint that when the beneficiaries were later disposed to hand the stock over, to the Hyatts as a gift, it being regarded as worthless, the executor refused until the beneficiaries agreed to be charged with the full value. This she claims was oppressive, but, upon reflection, in view of the contingency of the remainder, she must acknowledge that the executor only discharged his duty, and that had he complied he'might have been liable to a charge of waste.

2. The trustee is censured for loaning trust funds to Morris & Company without statutory security. In 1896 he loaned them $2,500, and in 1903 he made further advances, bringing their indebtedness up to $16,000. In 1904 he personally endorsed three notes for $5,000 each, and had them discounted at his bank. When distribution was made under the supplemental account, in 1909, the debt and notes were reduced to $10,000 plus, and in ' 1914, upon the death of the widow and the distribution of her trust estate, the balance was paid, the large arrearages of interest on the $50,000 mortgage were settled, and the principal was reduced to $36,550. When the first loan was made, Morris & Company had suffered severe financial reverses, and they were sadly in need' of even that small sum. In 1903 and 1904 they were on the verge of bankruptcy, and had it not been for Dr. Wiley’s good offices at that time they would have collapsed. He staked his personal fortune to save them, and in this he was not single-purposed, for upon this venture depended the integrity of the complainant’s trust fund. The mill property at Groveville was precarious security for the $50.000 mortgage, and the accumulation of more than $30,000 of interest held by the estate, originally invested by the testator, and had the firm failed the shrinkage in value, undoubtedly, would have resulted in great loss. For such generosity, it is painful to witness ingratitude and reproach. The advancement of the trust funds in 1903 was replaced in 1906, after Mrs. Starr mildly protested, with moneys from the widow’s trust estate, and there the incident came to an end. Whenever thereafter there were available funds of the latter trust, or of the estate unadministered, the trustee used them to redeem the notes under discount in bank, so that possibly the whole indebtedness was at some time held by either one or the other, or both, but at no time was there danger of loss, because the doctor was accountable, for he was a man of considerable fortune, which was well known to the complainants. Furthermore, it is not correct to say that these loans were unsecured, because it appears that the debtors were vested remaindermen of the widow’s estate, and contingently so of that of the daughters, and also were owners in fee of one-half of the testator’s real estate.

3. The next stricture involves matters of moral turpitude, in that it charges the trustee with practicing usury. When Dr. Wiley endorsed Morris & Company’s notes and had them discounted in 1904, they were paying a rate of twelve per cent, on their invoices payable. To better their credit in this direction, and to save three per cent., they induced him to make the endorsements and offered and urged upon him a rate of nine per cent, interest, which he at first declined to entertain, but they were persistent, and with the notes and renewals sent checks for the discount at that rate, of which, as to the excess, he kept a careful record. He retained the excess, reasoning, as he says, that i'f a crash came he could use it as salvage. That this was his only motive, is incontrovertible, for it appears that when the debt was reduced to $10,000 in 1909, he tendered them a check for the amount, which William indignantly rejected; and when, in 1914, the balance of the debt was paid, William still resisted, and it was forced upon him only by the doctor’s insistence upon using it as a credit on a note of the Hussong company. The insinuation, in the argument, of moral obliquity, is without the slightest justification.

4. Another charge of malfeasance is that the trustee took excessive commissions. The compensations were annually fixed and allowed by the orphans court upon a state of facts disclosed by the accounts and of which the court and parties were fully apprised, and are not open to question here. The circumstances under which they were allowed are disclosed in the opinion in the prerogative court. In re Morris Estate, February 26th, 1918.

5. The defendant is also accused of nepotism. The trust estate of the widow held a mortgage on property known as the Kean Farm, which was foreclosed. Upon a sale, the trustee became the purchaser in 1901. He managed the farm for that estate until its termination, in 1914, when he sold it to his brother for $10,000. There is no testimony to show that it was worth more; on the contrary, it appears that that sum was $1,000 more than any other person would offer. It is not shown otherwise than that the sale was made in good faith, and at a time when it was necessary to convert it into cash for the purpose of distributing the widow’s estate.

6. The remaining dereliction alleged is that the trustee failed to obtain interest on his bank balances. The Salem National Bank, in which he always kept his account, and in which the. estate is a stockholder, never allowed interest upon deposits. For two years he negotiated, without promise, and then in June of 1917 he changed the depository to another where interest is paid. In the circumstances, there was no lack of diligence, and, besides, if there were any shortcoming in this respect, it should have been brought to the attention of the orphans court on exceptions to the annual accounts.

I have reviewed the testimony at greater length than was, perhaps, necessary for the decision, but have done so purposely, to point out that the alienation of confidence, to whatever extent, was due to unfounded obsessions of the complainants, and that the defection and unhappy estrangement were not of the defendant’s making, and are not to his liking. The case does not come within the principles quoted in the forepart of these conclusions, and the trustee will not be removed. If I had any apprehension that the funds of the estate would be in danger during his continuance in office, he would be required to give a bond. Holcomb v. Coryell, 12 N. J. Eq. 289; Pfefferle v. Herr, 75 N. J. Eq. 219. And, as it appears that the trustee has accounted for all property chargeable to him, the prayer for a further accounting will be denied and the bill dismissed, with costs.


author: Griffin, V. C.

text:
    William Freile et al. v. Joseph H. Rudiger et al.
    [Submitted June 27th, 1917.
    Decided November 22d, 1917.]
    1. The burden is on an endorser of a note to show that the contract is different from that raised by the endorsements.
    2. Where the holder of a note on failure of the maker to pay, applied to the payee, who had a claim against the holder equal to the note, for payment, and it was agreed that the holder would pay such amount if he could collect the note from an intermediate endorser, and the payee wrote “without recourse” after his endorsement, and the holder sued the intermediate endorser, the real party in interest was the payee, and he could be brought in as defendant by the intermediate endorser on a bill of discovery.
    3. Where the payee of a note, on its being presented for payment wrote “without recourse” after his endorsement, failure of the holder to disavow the alteration after knowledge thereof, was a ratification of a material alteration which operated to discharge subsequent endorsers.
    On bill, &c.

      Mr. Randolph Perkins, for the complainants.

      Messrs. Treacy & Milton, for the defendant Joseph H. Rudiger.

      Messrs. McDermott & Enright, for the defendants Solomon M. Schatzkin and Henry A. Oetjen.
   Griffin, V. C.

The bill in this cause is filed for discovery in aid of a suit at law against the complainants William Ereile, Anthony Michel and P. Edward Wisch, upon a promissory note made by Orpheum Amusement Company (upon which the complainants are endorsers subsequent to the defendant Rudiger, who is payee and first endorser), and for a perpetual injunction against the suit at law, and for a decree that the note be delivered up for cancellation, and for other relief. The note, at maturity, was protested for non-payment by Sehatzkin, the holder thereof.

It seems that after the note had been protested, Sehatzkin delivered the same to Rudiger, the payee and first endorser, to hand to his, Schatzkin’s, attorneys for collection, under circumstances hereinafter stated. Rudiger, who was a director and vice president of a bank, knowing the order of liability between endorsers, wrote after his name the words “without recourse” and handed the note to the attorneys of Sehatzkin. The bill contains numerous prayers for discovery, one of which called on the defendants Rudiger, Sehatzkin and Oetjen to discover what interest either of them had in the note, and what interest Schatzkin or Rudiger had in the suit at law. The defendant Rudiger, answering this prayer, denied that “he is the beneficial owner of the note,” or “that neither at this time nor at any other time has he had any interest in said note and the suit instituted thereon by the said Henry A. Oetjen.”

The joint answer of Sehatzkin and Oetjen denies that Rudiger has any right, title or interest in said note, but does not state ivhether he has any interest in the suit at law. These answers, in the respects above stated, are not strictly true, because Mr. Rudiger was the one most vitally interested-in the suit at law.

Sehatzkin and Oetjen also filed an answer by way of cross-bill against the complainants and Rudiger, praying that the words “without recourse” be stricken from the endorsement of Rudiger, and that the complainants and Rudiger be decreed to pay to them the amount due upon the note.

Three questions are presented for consideration: First. Was there an agreement between the complainants and the defendant Rudiger that complainants should be liable on the note prior to Rudiger? Second. Was the suit at law instituted for the benefit of Mr. Schatzkin, or Mr. Rudiger, the payee? Third. Was there such a material alteration made in the note after its delivery to Schatzkin that, under the Negotiable Instruments act, it is void as to the complainants ?

First. Was there an agreement between the endorsers that the liability of the complainants should be prior to that of the defendant Rudiger ?

In Polhemus v. Prudential Realty Corporation, 74 N. J. Law 570, 577, the court of errors and appeals said: “When there are several parties to a bill or note who have become such for the benefit of another, their status, not only as to the holder for value, but inter sese, is, in the absence of relevant proof to the contrary, that which is shown by the paper upon which they have placed their names.” In the present case, the evidence offered for and against an agreement varying the contract raised by the order of endorsement is so vague, indefinite and contradictory that the court cannot find that such contract existed; and, as the burden of proof is on Rudiger to show a contract different from that raised by the endorsements, and as he has not sustained that burden, he fails.

As to the second and third questions: Schatzkin says that when the note was not paid he demanded payment of Rudiger, and then an arrangement was entered into between them, which, in answer to a question of his counsel, Schatzkin explained as follows:

"A. Mr. Rudiger had a claim for an even amount of $2,500 for some insurance, which he came to mo and tried to collect; and I told him, I said, ‘You owe me $2,500 for the note; deduct the amount yon owe me on. the note, $2,500, to cover one amount for the other’; he said, ‘Well, I suppose I will be responsible anyway, if it cannot be collected from them,’ and we had an understanding that if I can’t collect the note from Mr. Wisch or the other endorsers, then I shall deduct it from the amount due him,; and in case I do collect the note, then I shall have to turn him over the $2,500 for the claim he had.
“Q. At any rate, it was a $2,500 debt?
“A. Yes; which nominally I owe him now, and I hold him responsible on the note. That was understood between us, that one should offset the other; if I collect here, I pay him his money, and if not, it should be deducted.”

Pursuant to this agreement the note was delivered to Rudiger to take to Schatzkin’s attorneys for collection. Rudiger thereupon wrote, under his endorsement, the words “without recourse” and delivered it to an attorney connected with Schatzkin’s attorneys, at the same time advising him that he had written the words “without recourse” after his signature.

Schatzkin assigned the note to one Oetjen, a clerk in said attorneys’ office, for the purpose of suit only. Oetjen had no beneficial interest either in the note or the moneys collected thereon.

Oetjen sued on the note in the supreme court. Rudiger was not made a party defendant.

After the commencement of the suit at law Schatzkin learned of the alteration, but did not object until his answer was filed herein.

On the foregoing facts, it is quite apparent that Mr. Schatzkin and Mr. Rudiger, in answering the above prayers for discovery, were untruthful. It is quite plain that Mr. Schatzkin was only nominally interested; that the real plaintiff, and the one for whose benefit the suit was brought, was Rudiger, and that hi_ .purpose in writing the words “without recourse” after his name was to avoid the liability imposed on him by law according to the order of endorsement.

If Schatzkin should be regarded as the person beneficially interested in the suit at law, and he failed, after knowledge of the facts, to disavow the alteration, he-ratified Rudiger’s act; and the alteration being material, changing the rights and liabilities of the endorsers, inter sese, operates as a discharge of the complainants from liability. Bodine v. Berg, 82 N. J. Law 662, 669; Gray v. Williams (Vt.), 99 Atl. Rep. 735; Craw. Ann. Neg. Inst. L. 196 § 120, and cases cited.

The parties having gone to hearing, and having stated on the record that they desired the whole controversy to be decided, the court, in its discretion, will retain jurisdiction and decide the issues. Lehigh Zinc and Iron Co. v. Trotter, 43 N. J. Eq. 185, 204; Van Horn v. Demarest, 76 N. J. Eq. 386, 391; Knikel v. Spitz, 74 N. J. Eq. 581, 584; Varrick v. Hitt, 66 N. J. Eq. 442, 444; Mertens v. Schlemme, 68 N. J. Eq. 544, 548; Coast Company v. Spring Lake, 56 N. J. Eq. 615, 627.

The decree will be for complainants, the form of which may be settled on notice. What decree Mr. Schatzkin may be entitled to against Mr. Rudiger may then be considered.