text:
    The Fort Wayne Electric Corporation v. The Franklin Electric Light Company.
    [Filed October 27th, 1898.]
    1. Where a party desires to question a decree which has not been enrolled, upon new facts, the establishment of which depends upon conflicting proofs and inferences, he should apply to the court for leave to file- a bill in the nature of a bill of review, upon proof that the new matter could not, by reasonable diligence, be produced or used by him in the original cause.
    2. He will be held to this practice where the decree binds and benefits a class the members of which are not all before the court, so that the court, in according the leave sought, may impose terms as to their notification of the proceeding.
    3. That one creditor of an insolvent corporation, not about to resume its business with safety to the public and advantage to its stockholders, institutes proceedings to have the insolvency, &c., adjudged and a receiver appointed, with ulterior purpose of self-advantage, will not defeat the proceedings.
    4. One who holds the legal title to, and a beneficial interest in, a debt due from an insolvent corporation is a creditor within the meaning of the statute, capable of instituting and prosecuting proceedings in insolvency.
    On petition and affidavits seeking to set aside a decree of insolvency, and affidavits in reply.

      Mr. Robert H. McCarter, for the petitioner.

      Mr. Samuel H. Grey, for Thomas and William Oscar Robb.

      Mr. David J. Panaoast, for the complainant.
   The Chancellor.

The petition alleges as new facts, first, that when the bill was filed and the decree was made the complainant was not a creditor of the defendant because of a previous assignment of its claim, and second, that its assignee purchased the claim with motive to so prosecute the same as to compass the ruin of the defendant and acquire for itself the defendant’s electric light plant. At the same time it attacks the personnel of the receiver appointed by the decree. Its prayer is

“that the order adjudging your petitioner insolvent and appointing said Joseph Q. Williams receiver thereof may be annulled, set aside and for nothing holden, and that said Joseph Q. Williams may be restrained from further acting or assuming to act as receiver of your petitioner, and that the bill of complaint whereon said order was founded may be dismissed, with costs,” .

and that other relief may be given the petitioner as may be agreeable to equity.

As the decree is not yet enrolled the immediate office of the petition should have been to obtain leave to the defendant to file a bill in the nature of a bill of review. The necessity of pursuing the regular practice in this ease is emphasized when it is remembered that the decree, if valid; binds all creditors as a class, and that the class should have an opportunity to be heard before the decree is lost, upon such terms as the leave to file the bill desired may prescribe.

The representation is that the defendant has .just discovered that on the 10th of August, 1897, the complainant assigned its claim to the Cape Island Gas Company, a rival of the defendant, for the sum of $8,500, represented by twenty-four notes of $354.17 each, six payable in one year, six payable in sixteen months, six payable in twenty months and six payable in two years from that date, each note being endorsed by one of the six stockholders of the Cape Island Gas Company, and upon this representation and other evidential circumstances alleged, it infers and charges that the said six stockholders purchased and hold the claim for the purpose of acquiring the defendant’s plant or ruining it.

The bill in this case was filed on the 27th of June, 1898, and the petition now considered was filed on the 23d of September, 1898, about a week after the decree attacked was made.' In support of the petition’s allegation that the assignment of the complainant’s claim was recently discovered, two affidavits are annexed to the petition, one by Thomas Robb and the other by Logan M. Bullitt. The first-named- affiant states that in the spring of 1898 one John Henry Edmunds, who is one of the six stockholders of the Cape Island Gas Company and an endorser of several of the notes above mentioned, told him, Thomas Robb, that he, Edmunds, with others, had purchased the claim of the complainant against the defendant and had given notes therefor, and that he and those others were then the owners of the claim, and that it was understood that all litigation in reference to the claim was to be conducted in the complainant’s name for the use of the purchasers of the claim. Mr. Bullitt’s affidavit is quite general and indefinite; but, as I understand him, his suspicions as to an assignment of the complainant’s claim were in some way aroused in June, 1898, but it was not until the 20th of August last, after the hearing herein, that a newspaper article led him to an investigation that apprised him of the assignment.

It is remembered that there are five directors of the defendant, one of whom is an employe of Mr. Bullitt and another is Mr. Bullitt himself, and that they two have lately managed the affairs of the company under the virtual protection of Thomas Robb and his brother, William Oscar Robb, to the practical exclusion of the other three directors, and that the protection of the Bullitt management by Robb is shown by these circumstances. In July, 1893, the defendant mortgaged its realty, plant and chattels existing and to be acquired in the future to Thomas Robb, to secure the payment of upwards of $13,500 and two mortgages were taken that were later assigned by Thomas Robb to William Oscar Robb. In June, 1896, two judgments were recovered by one Warren against the defendant, aggregating upwards of $1,700. In December, 1897, another judgment was recovered by one Tunis against the defendant for upwards of $2,000. Thomas Robb purchased the Warren and Tunis judgments and had them assigned to his attorney-at-law for his (Robb’s) use and benefit, and caused executions to be issued on them and levies on the property of the defendant to be made. A portion of the defendant’s plant is erected upon land which now belongs to William Oscar Robb. The judgments and mortgages with arrears of interest upon them have lately been held capable of immediate enforcement, in threatening attitude, as the complainant’s efforts to collect its judgment of upwards of $12,000 progressed, and it was not until the court had announced that the decree herein would be made that the Robbs gave instructions for the actual enforcement of their encumbrances.

It is also remembered that the complainant’s claim is for the erection of a large portion of the machinery of the defendant’s plant, which, so far as the title may have gone to the defendant, is now subject to the mortgages stated, because, in terms, they cover future-acquired property.

Now, all these circumstances — reference to prior affidavits in the cause and the fact that Thomas Robb participates in the present application by his affidavit annexed to the petition — most strongly tend to justify the conclusion that Thomas Robb is in' sympathy with and in protection of the Bullitt management of the defendant corporation. As has been seen, he admits that, before the bill in this case was filed he had been told of the assignment of the complainant’s claim to the Cape Island Gas Company, and it seems to me hardly probable that he did not communicate the information he had received to Mr. Bullitt.

It may be possible that that very communication was the means by which Mr. Bullitt’s suspicions were aroused in June, 1898, at about the time of the filing of the bill. However that may be, I am not satisfied that what is called the assignment of the complainant’s claim was not known to the defendant throughout the entire controversy under the present bill, or at least so far known as to invite an inquiry which, pursued with reasonable diligence, would have brought the assignment to light in ample time to have enabled the defendant to urge it at the hearing had herein. It is well settled that a bill of review,because of the discovery of new matter, cannot be filed without leave of the court first had upon proof that it could not, by the use of reasonable diligence, be produced or used in the original cause by the party claiming the benefit of it. Story Eq. Pl. §§ 412, 414.

Passing to the second insistence for the defendant, that the motive of the Cape Island Gas Company in purchasing the claim of the Fort Wayne Company, is to ruin the defendant and acquire its plant, and that the Port Wayne Company is subserviently prosecuting this suit to that end, I find that Mr. Burleigh swears that the step taken to purchase the Port Wayne Company’s claim was for the purpose of making money, the object being to buy it for one-half of its face value and collect the whole of it, and was not to ruin the defendant or to gain possession of its plant.

It is perceived that both the questions of fact commented on, namely, whether the alleged assignment of the complainant, should have been put in proof before the decree was made and whether the bill was filed with bad motive on the part of the-complainant, are yet so far open and unsettled that, if I stop at this point, my action must be to grant leave to file a bill that, upon issues framed, proofs may be taken.

But my further consideration of this application determines me not to adopt that course. The newly-discovered matter, to-justify leave to file a bill of review, must appear to be decisive of the controversy or to present a case of so much nicety or difficulty as to be the fit subject of a judgment in the cause. Quick v. Lilly, 2 Gr. Ch. 255; Traphagen v. Voorhees, 18 Stew. Eq. 44.

Assuming that the purpose of the Cape Island Gas Company was to crash its rival and succeed to its plant, would that motive,, if known, justify the refusal of the present decree? The court is satisfied of the defendant’s insolvency, and that the defendant is not within a short time about to resume its business with safety to the public and advantage to its stockholders. The bill was not presented for the speculative gas company alone. Its object was to assist the complainant in the recovery of the amounts due upon the notes it took for an assignment of its claim and as well to benefit the creditors of the defendant as a class, and it clearly appears that there are members of that class other than the Fort Wayne Company and the Cape Island Gas Company. All of that class, as I have said, are bound by the decree and are interested in upholding it. Willoughby v. Chicago Junction Railway, &c., Co., 5 Dick. Ch. Rep. 656.

The proceeding here involved does not invoke the exercise of judicial discretion. It demands a remedy to be administered upon prescribed conditions to be ascertained from evidence. It is more nearly like the case of Davis v. Flagg, 8 Stew. Eq. 491, where the foreclosure of a mortgage was sought with intent to oppress, than the case of Bray v. Ocean City Railroad Co., 10 Dick. Ch. Rep. 101, where an injunction was asked to stay a taking of lands in advance of condemnation by one who deliberately purchased the land for the purpose of impeding by litigation the building of a railway in interest of a rival road. It is true that completion of the remedy involves the issuance of an injunction, but such injunction is expressly contemplated and authorized by the statute as an incident to the efficient enforcement of the remedy. In such case as this, bad motive in the complainant will not defeat the relief. At best it will arouse a suspicious scrutiny of the proofs as to the existence of the conditions upon which the remedy is given. If a sufficient case clearly appears, the right of a complainant acting with bad motive whatever it may be, and the rights of all others of the classes affected and of the defendant, will be brought into and bound by a common administration which will conserve rather than ruthlessly destroy the assets of the defendant, to the end thht they may be most profitably disposed of or may be restored to the defendant if it shall duly become rehabilitated in strength and returned to self-control. The complainant in such a proceeding merely invokes a public administration for the benefit of creditors, stockholders and the public, and, a proper case being made, the fact that he took the initiative with bad motive will not stay the court in the performance of so public a duty.

But I think that the Fort Wayne Electric Corporation, notwithstanding that which it has done, is yet to be classed as a creditor of the defendant. It is disclosed that on the 12th of August, 1897, it took from the Cape Island Gas Company twenty-four notes and gave this receipt:

“Received from X X Burleigh, Cape Island Gas Co., notes aggregating §8,500 — 1/4 at. 12 mos., 1/4 at 16 mos., 1/4 at 20 mos., and 1/4 at 24 mos. Consideration for assignment of Fort Wayne Electric Corporation claim against Franklin Electric Light Company.”

An unexecuted assignment dated in June, 1897, states the terms of a proposed assignment at that time. It recites the consideration to be $8,500 in money, not in notes. The fact that the unexecuted assignment of June, calling for a cash consideration, antedates the receipt for notes in August, indicates a readjustment of the consideration so as to involve the credit for which ordinary business prudence would suggest security, and for this reason it is possible that an assignment of the legal title to the claim was not perfected. However that may be, the matter of assignment was permitted to rest in equitable right in the Cape Island Gas Company to enforce that for which it had given consideration. The legal title remained in the Fort Wayne Company when the existing decree was made, together with such a substantial interest as equity will afford by way of requiring notes to be paid before it will enforce a conveyance of the legal title.- The fact that in subsequent litigation the Fort Wayne Company retained its legal title and control of the collection of its claim, indicates that it was intended that the legal title should not pass out of it.

Lastly, the attack upon the character of the gentleman selected as receiver has very clearly been shown to be unjust and wholly untrue. The event of the issue offered by the petition in this behalf proves that the court can rightly repose confidence in him.

Upon my consideration of these several questions, I have concluded to not only deny the relief specifically prayed for in the petition, but also to refiise permission to file a bill in the nature of a bill of review.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    David A. Brown and George H. Brown v. William V. Carpenter.
    [Filed November 1st, 1898.]
    G. mortgaged his lands to C., “to [in the language of the bill] secure ana preserve the said property (to the amount of said mortgage) from any losses which said G. might thereafter incur,” and thereafter conveyed them to B. O. refuses to cancel the mortgage, and B. seeks to have the mortgage canceled by the decree of this court. — Held, that if the language of the bill means that the purpose of making the mortgage was to defraud the creditors of G., B. taking conveyance from him and succeeding to his rights only, will not be aided by the decree of this court, and if such be not the meaning of the language of the bill, that the language is uncertain, vague and indeterminate in its statement of a material fact upon which the right to relief depends, and that in either case the bill is bad upon demurrer.
    On demurrer to bill.

      Mr. Benjamin A. Vail, for the complainants.

      Mr. Alan H. Strong, for the demurrant.
   The Chancellor.

The bill states this ease: That on the 9th day of November, 1897, the complainants purchased from Charles H. Gardner and Mary, his wife, certain lands in Woodbridge township, Middle-sex county, subject to a mortgage of $800 held by the Perth Amboy Savings Bank, which lands were on that day conveyed by Gardner and wife to them by deed with covenant of warranty, subject to the $800 mortgage; that before then, in 1894, Gardner and wife had executed and delivered to William Y. Carpenter a mortgage for $3,500 upon the same lands, conditioned for the payment of the $3,500 on the 19th of December, 1899, with interest at six per cent, per annum, payable semi-annually, and that mortgage was recorded before the conveyance of 1897 to the complainants; that the mortgage was given to Carpenter to secure him against any obligations he might thereafter incur or become liable for in behalf of Gardner, for any money Carpenter might from time to time advance to Gardner at his request, “ and,” in the language of the bill, “ to secure and preserve the said property,” to the amount of said mortgage, “ from any losses which the said Gardner might thereafter incur;” that no obligations were ever incurred by Carpenter for Gardner, and no money was ever paid or advanced by Carpenter upon the mortgage; that, the mortgage was not intended as a gift, and that no consideration ever passed from Carpenter to Gardner therefor; that the complainants had no actual knowledge of the mortgage at the time of the conveyance of the lands to them, and that Carpenter will not surrender the mortgage to be canceled. The prayer is that he be compelled to do so.

It is objected by the demurrer, in the first place, that Gardner and his wife should be parties to the suit, and in the second place, that the allegation that the mortgage was given to Carpenter to “ secure and preserve the said property (to the amount of said mortgage) from any losses which the said Gardner might thereafter incur,” imports that the mortgage was intended between the parties to it as a fraudulent cover or shield of the property mortgaged against the claims of prospective creditors of Gardner to its amount, and being so intended by both mortgagors and mortgagee, will not be relieved against in equity at the instance of Gardner or at the instance of those who may hold under him.

It is not perceived that Gardner and his wife are necessary parties in the suit. They have parted with all interest in the property. It does not appear that any personal obligation attends the mortgage, and it is not suggested that a decree of any kind can be made against them or either of them.

The principal insistence has been upon the second ground of demurrer. The mortgage was not a gift by Gardner and wife to Carpenter. No consideration was paid for it. It was executed and delivered to answer three purposes — -first, to secure Carpenter against obligations to be assumed for Gardner; second, to secure Carpenter for money to be advanced for Gardner, and third, to secure and preserve the property covered by the mortgage to the value of $3,500 from losses that Gardner might thereafter incur. The first inquiry is as to the meaning of the language in which the purpose (third) is expressed in the bill. The demurrant claims that its meaning is that the mortgage was ■designed by the mortgagors and mortgagee to be a protection for Gardner against his creditors, upon the argument that it anticipates losses by Gardner which can come over on the mortgaged land so as to take it, and is designed to defeat the collection of such losses to the extent of the amount of the mortgage, •or, in plainer language, it means that the mortgage was a contrivance to defeat the recovery of claims of future creditors. • If ■this be not the proper construction of the language, I am at loss to give it other meaning. The complainants’ counsel has not been able to suggest another meaning. If it has other meaning it is at least too vague and indeterminate to manifest that ■meaning, which must be understood before relief can be given, and the bill is demurrable to upon the ground that it is uncertain and vague in this respect. But if the construction of the language is as the defendant contends, what is the situation? Grantees of a mortgagor with fraudulent intent, who have purchased the land without actual knowledge of the mortgage, for a consideration not stated, ask that the mortgage be canceled. A court of equity would not afford to the mortgagors the relief they ask, because of the principle which underlies the maxim in pari delicto, potior est conditio possidentis (Schenck v. Hart, 5 Stew. Eq. 774, 782), and I do not think that they stand in better position. Pillsbury v. Kingon, 6 Stew. Eq. 287, 291; Bump Fraud. Conv. (3d ed.) 446. As grantees of Gardner they are his representatives and succeed only to his rights.

The demurrer will be sustained, with costs.


text:
    S. Meredith Dickinson, executor of the last will and testament of Mary W. Clymer, deceased, v. G. Bleasdale Overton et al.
    [Filed December 16th, 1896.]
    1. Where two legacies are given simpliciter to the same legatee by different instruments, the presumption is that the later is cumulative, whether its amount be equal or unequal to the former.— Held, in this case, that six legacies given by tbe fifth codicil to the will are not substitutional for six legacies given to the same legatees by previous codicils, both because of the rule of. interpretation stated and because of a manifest intention in keeping therewith.
    2. Two legacies of money equal in amount, bequeathed to the same legatee in one and the same instrument, are considered as mere repetition of each other, and the legatee will take only one. — -Held, in this case, the rule stated is applied where five legacies of §1,000 each to the same persons are given, without explanation of the duplication, by both the fourteenth and seventeenth clauses of the fifth codicil to the will, it appearing, from the fashion in which the codicil was framed, that confusion and forgetfulness may have existed.
    On bill to construe will.

      Mr. Hugh H. Hamill, for the complainant.

      Mr. Garret JD. W. Vroom, for James R. Macfarlane and Eugenia H. Macfarlane.

      Mr. 8. D. Oliphant, Jr., and Mr. R. A. Mereur (of Pennsylvania), for Mary W. Mereur and others, children of Louisa O. Ward.

      Mr. William M. Lanning and Mr. Charles E. Gummere, for Rose N. De Bryas and others.
   The Chancellor.

Mary W. Clymer died on the 22d of July, 1893, at Trenton, leaving a will with five codicils thereto. The will and codicils were admitted to probate by the surrogate of Mercer county on the 9th of August in the same year. The will bears date on the 18th of October, 1872, and the codicils are respectively dated October 18th, 1872; October 23d, 1872; May 24th, 1882; June 29th, 1882, and May 10th, 1893. By the last codicil the complainant is substituted and appointed the executor of the will.

The will bequeaths a number of legacies, specific and general, and some by way of annuity. The several codicils, covering the succeeding twenty-one years, deal with these legacies, revoking or modifying them and creating others of similar chara'cter. The disposition of the residuary estate is effected by the tenth paragraph of the will, by which the residue is given to the executors in trust, to divide the same into three equal parts and to assign and convey one of the parts to George Clymer, a brother of the testatrix, one to her brother William Bingham Clymer, and one to such of the children of her late sister Eliza Overton, as should survive her, and to the descendants then living of any child of the sister who then might be dead, each set of descendants taking only such share as their parent would have taken if living. In case she should survive her brother George, the one-third share intended for him was to be divided equally amongst his children then living and the descendants of children then dead, such descendants taking together,- however, such share only as their parent would have taken if living. And in case she should survive her brother William, the one-third share intended for him was to be divided equally amongst his children then living and the descendants of children then dead, as in case of the brother George, in like contingency.

The two brothers of the testatrix predeceased her, each leaving two children who survived the testatrix. Five children of Eliza Overton survive the testatrix, and two have predeceased her. One of those two who predeceased her died without issue, and the other, Mary O. Macfarlane, died leaving six children, all of whom survive.

By the last codicil to her will, the testatrix gave $5,000 each to seven of these nine surviving nephews and nieces, and $10,000 each to two of them. She had previously, by the codicil of May 24th, 1882, given $1,000 to her niece, Rose De Bryas, daughter of her brother William, who, as one of the seven nephews and nieces, is given, as stated, $5,000 by the last codicil. The testatrix did not give anything to the children of her deceased niece, Mary Macfarlane, as an equivalent for a similar legacy of $5,000 to their deceased mother. By the same last codicil, by several clauses thereof, the testatrix gave $1,000 each to twenty-eight children of her nephews and nieces, including the children of Mary Macfarlane, and $500 each to twenty-three of her great-grandnephews and nieces. By the eleventh clause of the last codicil she gave $10,000 each, as above indicated, to her nephew, G. Bleasdale Overton, and her niece, Louisa Ward. By the fourteenth clause of the same instrument she gave $1,000 each to the children of that nephew and niece, and again, by the seventeenth paragraph of the same codicil, gave $1,000 each to the five children of the same niece, naming them. By previous codicils she had given two of her great-nephews, James R. Macfarlane and Edward Overton Ward, $500 each, and two of her great-nieces, Eliza Ward Lynch and Eugenia H. Macfarlane, $1,000 each. It is perceived in this statement of legacies bequeathed that $9,000 was given in legacies outside the apparent scheme of the last codicil, that by that codicil seven of the living nephews and nieces should each have $5,000 and two double that sum, and that each living grandnephew and niece should have $1,000, and that certain great-grandnephews and nieces should each have $500, and that if the legacies under that scheme should be held to be substitutes for the prior legacies the $9,000 would go to the residuary estate and be divided so that each of the children of the deceased brothers, George and William, will take $1,500 of it, and each of the five living children of the deceased sister, Eliza Overton, will take $500 of it, and the six children of Mary Macfarlane, the deceased daughter of Eliza Overton, will each take $83.33|-. This situation has led to the question that has actuated the complainant to bring this suit, to have it determined whether the legacies are all payable, the later being cumulative upon the earlier, or whether a later legacy in any case shall be regarded as a substitute for an earlier legacy to the same person.

It is perceived that eight legatees were given more than one legacy each, and that six of those eight were given legacies prior to the making of the codicil of May 10th, 1893, and that three of those six and the remaining two legatees were given duplicate legacies of $1,000 each by the same instrument — the codicil of May 10th, 1893. These eight legatees are all kin of the testatrix. By the will, one of them, the niece, Rose M. Clymer, now Mrs. De Buyas, was given a watch and also $200 as a token of her aunt’s affection, and, by the third codicil, specific legacies and the bequest of $1,000 here in question. Another, Eugenia Macfarlane, a great-niece, was so considered by the testatrix that the fourth codicil was made solely for the purpose of giving her $1,000. By the third codicil also two grandnephews, James R. Macfarlane and Edward Overton Ward, were bequeathed $500 each, and two great-nieces, Louisa W. Milliken and Eliza Ward Lynch, were bequeathed $1,000 each.

When the testatrix came to make the fifth codicil these six bequests, with eight others to other persons, stood unrevoked. By the fifth codicil the eight other pecuniary legacies were revoked, but the six were suffered to remain. After such revocation, by the same codicil the testatrix proceeded to make special bequests of nearly $100,000 to about sixty of her kin, among whom she included the six of her kin above mentioned, who then had unrevoked legacies. It appears to me that the scheme of the fifth codicil was merely a general recognition of kin and that the failure to revoke the legacies to the six favored by previous codicils, in view of the fact that eight other similar legacies to previously-favored kin were by that very instrument revoked, emphasizes an intention that the special bounty to the six, for undisclosed reasons satisfactory to the testatrix, evidenced by their unrevoked legacies, was to remain unaffected by the general distribution to kin contemplated, and in which they, merely as kin, participated.

The last codicil does not profess to prescribe equality in the bequests to the several degrees of kin. It expressly gives to a nephew and niece double that which is given to others of their degree and fails to make up to the children .of a dead niece the $5,000 their mother probably would have taken had she lived. Hence it is an untenable insistence that, the six legacies, not expressly revoked by the fifth codicil, are impliedly revoked under its language, “ and I hereby ratify and confirm my said will and codicils thereto in every respect save so far as any pari of it is inconsistent with this codicil,” because they are inconsistent with a scheme of equality it is claimed to evince. It does not evince such a scheme. Equality exists in fact only where there is no reason or wish to the contrary.

But if the failure to revoke the six legacies, amidst other revocations by the fifth codicil, does not afford satisfactory evidence of the intention of the testatrix, it is proper to resort to the settled rule of construction, that where two legacies are given simpliciter to the same legatee by different instruments, the presumption is that the later is cumulative, whether its amount be equal or unequal to the former. 2 Wms. Ex. (R. & T. ed.) 602; Theob. Wills. 114; De Witt v. Yates, 10 Johns. 156.

The tenth clause of the third codicil, dated May 24th, 1882, by which Mrs. De Bryas is given $1,000, is as follows: “ I give to my niece, Bose Clymer, and my great-nieces, Louisa Ward and Bessie Ward, I give one thousand dollars each,” and the eighth clause of the fifth codicil, dated May 10th, 1893, by which the same legatee is given $5,000, is as follows : “I give to my two nieces, Mary and Bose N., children of my deceased brother, William Bingham Clymer, each the sum of five thousand dollars.”

I regard these legacies as having both been given simpliciter. The phrase “children of my deceased brother, William Bingham Clymer,” I account as mere description. But if I am to regard it as a reason for the gift, to wit, because they constitute a certain class of the kin of the testatrix, I am confronted with a distinct reason for each of the bequests to Bose Clymer — for the first, that the testatrix pleased to make this particular niece an object of her bounty, and for the second, that in pursuance of a general scheme of bounty to classes of kin, this niece is within one of the classes. The effect of the different purpose for making each legacy only strengthens the 'presumption that they are intended to be cumulative. 2 Wims. Ex. (R. & T. ed.) 605.

Precisely the same comment is applicable to the bequest to Eugenia Macfarlane and her brother James. By the fourth codicil of June 29th, 1882, the bequest to Eugenia Macfarlane •is : “ I give to my great-niece, Eugenia H. Macfarlane, the sum of one thousand dollars ($1,000), clear of all taxes of every kind,” and by the twelfth clause of the third codicil the bequest to James R. Macfarlane is: “ To Edward Overton and James R. Macfarlane, my two great-nephews, I give $500 each,” and by the fifteenth clause of the fifth codicil of May 10th, 1893, the bequest 'by which both James and Eugenia are given $1,000, is:

“I give to the children of my niece, Mary Macfarlane (who is deceased), viz., EllaM. Little, Mary C. Angle, Edward Macfarlane, James Macfarlane, Eugenia Macfarlane and Graham Macfarlane, each the sum of one thousand dollars.”

The three others of the six legatees who have legacies by codicils prior to the last — Eliza Ward Lynch, Louisa W. Milliken and Edward Overton Ward — it will be remembered, are given not only legacies by earlier codicils than the last, but two legacies each by the last codicil. Eliza Ward Lynch and Louisa W. Milliken are the great-nieces styled Louisa Ward and Bessie Ward, in the tenth clause of the third codicil above quoted, and Edward Overton Ward is the great-nephew named in the twelfth clause of the third codicil, with James R. Macfarlane, as appears above.

By the fourteenth paragraph of the fifth codicil the testatrix provides as follows:

“I give to the children of my nephews and nieces named and mentioned in the tenth and eleventh clauses of this codicil each the sum of one thousand dollars.”

By reference to the tenth and eleventh clauses of the fifth codicil it appears that all the living children of Eliza Overton, the deceased sister of the testatrix, are named, and that among them, in the eleventh clause, Louisa Ward, the mother of these last-named legatees and of Mary Ward Mercur and Thomas Clymer Ward, is named. Stopping at this point the comment' applied to the legacies to Mrs. De Bryas is applicable so far as Mrs. Lynch, Mrs. Milliken and Edward Overton Ward are concerned.

But here another question, as to all the five of the children of Louisa Ward, arises. Not only does the language of the fifth codicil, by its fourteenth clause, give each of them $1,000, but by its seventeenth clause also it repeats to the five children of Louisa Ward bequests of the same amount, to wit:

“I give to the children of my niece, Louisa Ward, viz., Mary Mercur, Edward O. Ward, Thomas C. Ward, Louisa Milliken and Louisa Meredith Ward each the sum of one thousand dollars.”

Are they substitutional bequests for the bequests of the fourteenth clause?

The rule of construction is that, in absence of anything to manifest a contrary intent, two legacies of a quantity of equal amount bequeathed to the same legatee in one and the same instrument are considered as mere repetition of each other, and the legatee will take only one. 2 Wms. Ex. (R. & T. ed.) 602; Theob. Wills 114; De Witt v. Yates, 10 Johns. 156; Creveling’s Executors v. Jones, 1 Zab. 573. In the last cited of these cases the testator’s granddaughters took either $400 or $800 each by the following bequest:

“I do give and bequeath unto my two granddaughters, Christiana Jones and Deborah Jones, each §400, to be paid to them by my executors. If they are not of age at my decease, I order my executors to pay each of them yearly and every year the interest of §400 until they shall arrive of age. I further order my executors to pay out of my estate to Christiana Jones §400 one year after my decease, and to pay Deborah Jones §400 two years after my decease, in full of their legacies bequeathed to them.”

In the supreme court it was held by a closely-divided court that the testator’s intention was that each granddaughter should take $800 (4 Harr. 127), and in the court of errors and appeals, by a divided vote, that the intention of the testator was that they should each take $400. The rule of construction above stated was not invoked in the decision of either court, because it was thought that the peculiar language of the testator and its arrangement indicated his intention. However, in writing the opinion of the court of errors and appeals, Judge Randolph said : “ Whether the granddaughters were to have a legacy of $400 eacli or two legacies of $400 each, all agree is a question of intention ; and occupying as the bequest does but ten consecutive lines, the testator must be presumed to have understood what that intention was and whether he was carrying it out. No inference of forgetfulness or confusion can arise, as there might if the sums were in different parts of the will, or will and codicil, or involved with other bequests or devises.” And thus-recognizes the reason of the rule, which he says is inapplicable to that case.

The present case differs from Creveling v. Jones in that the two bequests are not given by the same paragraph. By the eleventh clause of the last codicil the last bequests to nephews and nieces are given. By the twelfth clause bequests to grandnephews and nieces are commenced. By the twelfth and thirteenth clauses the children of the children of the brothers of the testatrix are provided for, and by the fourteenth clause the children of the five living children of the testatrix’s sister are provided for, not by name, but as “the children of my nephews and nieces named and mentioned in the tenth and eleventh clauses of this codicil.” This is an indirect ascertainment of the objects of her bounty, predicated upon her remembrance of the contents of the clauses of the codicil called tenth and eleventh. Passing on, the testatrix made provision for the children of her deceased niece, Mary Macfarlane, and in the sixteenth clause she gave to the children of those children. Then, without explanation, she proceeded by the seventeenth clause to again give the children of Louisa Ward each $1,000, and by the eighteenth clause to give to each child of those children $500. It is a fair inference, I think, that confusion resulted from the reference in the fourteenth clause to previous clauses, and that when the eighteenth clause was prepared the testatrix for the time being lost sight of the first gift. It may be that when she resolved to give to the grandchildren of Mrs. Macfarlane $500 each, she thought that she should do the same for the grandchildren of Mrs. Ward, and that in undertaking to accomplish that purpose, forgetful of the fourteenth clause, she unwittingly adopted the formula used in case of Mrs. Macfarlane. There certainly is room, in the obscurity of the fourteenth clause, for confusion and mistake. I think that, by the seventeenth and eighteenth clauses the testatrix simply intended to put the Wards and Macfarlanes, as classes, upon the same footing, and that in absence of explanation of the repetition, the bequests by the seventeenth clause must be considered to be substitutional.

My conclusion upon the whole case is that the legacies in question are cumulative and not substitutional except in case of the legacies given to the children of Louisa Ward by the fourteenth and seventeenth clauses of the fifth codicil, and that in that case only one legacy of $1,000 to each child should be paid.


author: Pitney, V. C.

text:
    Alice Jane Stoddard, administratrix de bonis non cum testamento annexo of Albert R. Terhune, deceased, v. John Van Bussum.
    [Decided March 30th, 1898.
    Filed January 4th, 1899.]
    1. A decree for foreclosure and sale of mortgaged premises which contains a declaration of the liability of the mortgagor defendant to pay any deficiency which may arise in the sale, is not a decree for the payment of money against which the statute of limitations begins to run.
    2. The statute begins to run from the date of the order based on the sheriff’s return of the sale showing the deficiency and directing execution for the decree.
    Heard on bill, answer and proofs.

      The object of the bill is to revive and enforce a decree for the payment of money. The defence is the statute of limitations. The question is as to the actual date of the decree. The facts are undisputed.
    In October, 1876, James E. Stoutenburgh, administrator with the will annexed of Albert R. Terhune, filed his bill against the defendant, Van Bussum, and wife and others to foreclose a mortgage securing a bond made by Van Bussum to Terhune. Van Bussum was duly served with process, and made no defence. Such proceedings were had in the cause that, on the 6th day of March, 1877, a decree was made in the usual form for the foreclosure and sale of the mortgaged premises by execution to raise the amount due the complainant, with the usual directions to the sheriff to make return to the writ. To this complete decree of foreclosure and sale, the following clause was added:
    “And in case the proceeds of such, sale shall be insufficient to satisfy and discharge the said mortgage debt, then it is'hereby further ordered, adjudged and decreed that said deficiency shall be made of the lands and tenements, goods, and chattels of the said defendant, John Van Bussum, as specifically prayed in the bill of complaint filed in this cause; it appearing to the court that notice that such relief was sought by said bill, had been duly served and given to said defendant according to law and rules and practice of this court, and that a writ of fieri facias therefor do issue accordingly, out of this court, against said defendant for that purpose, payment of the said deficiency being hereby decreed to be made by the said defendant, and that the sheriff make return to this court of his proceedings by virtue of the said writ.”
    An execution for the sale of the mortgaged premises was duly issued, which was originally tested in March, with a blank for the date, in which the word “ March ” is erased and the word “ May ” is interlined, and the date “ seventh ■’ written in its proper place (not in the handwriting of Mr. Stoutenburgh, who prepared the writ), returnable on the third Tuesday of May instant. Why its issue was delayed from March to May does not appear. By virtue of that writ the sheriff of Bergen county, on the 19th of September, 1877, sold the mortgaged premises for the sum of $5,955, and by his statement annexed to the writ showed a deficiency of $10,633.03 to satisfy the amount of the decree. The return made by the sheriff does not show when the writ was actually returned, nor is the date of its filing marked upon it. But on the 16th of October — the word “ October ” being written over (not in the handwriting of the solicitor) the erasure of the word “ September ” — the chancellor made an order reciting the previous decree fixing the liability of the defendant to pay the deficiency, and the issuance of execution, and the return of the sheriff showing the deficiency above mentioned, directing that a writ of fieri facias issue pursuant to said final decree to levy and make said deficiency, to wit, the sum of $10,633.03, together with interest from the 19th of September, of the goods and lands of the said John Van Bussum, together with the costs of the order and writ.
    Under that order an execution was issued against Van Bus-sum, which produced no results.
    An abstract of the order of October 16th was duly docketed in the supreme court on the 17th of October.
    Stoutenburgh died on the 6th of March, 1891.
    Letters of administration de bonis non cum testamento annexo upon the estate of Terhune were duly issued to the complainant on the 17th of May, 1897, and the bill herein was filed on the 23d of August, 1897, more than twenty years after the date of the original decree of foreclosure fixing the liability of Van Bussum to pay the deficiency, but less than twenty years since-the actual sale of the premises and the order for fieri facias.

    Nothing has ever been paid on account of the amount so-found to be due.

      Mr. John B. Humphreys, for the complainant.

      Mr. John Griffin, for the defendant.
   Pitney, V. C.

The question raised on the case made is somewhat nice, and its solution depends in part upon the construction of certain statutes which I will state.

The fourteenth section of the Limitation act (Gen. Stat. p. 1975) provides as follows:

“ That judgments in any court of record in this state may be revived by scire facias, or any action of debt may be brought thereon within twenty years next after the date of such judgment, and not after.”

The fifty-sixth section of the Chancery act (Gen. Stat. p. 382) provides as follows:

“ That the decree of the court of chancery shall, from the time of its being signed, have the force, operation and effect of a judgment at law in the supreme court from the time of the actual entry of such judgment, and all decrees and orders of the court of chancery whereby any sum of money shall be ordered to be paid by one person to another shall have the force, operation and effect of a judgment at law in the supreme court from the time of the actual entry of such judgment, and the chancellor may order such executions thereon as in other cases.”

Then follows a provision that it shall not become a lien upon and bind any lands other than those mentioned in the decree until an abstract is filed in the supreme court.

The seventy-sixth section of the Chancery act (Gen. Stat. p. 386) provides as follows :

“ That it shall be lawful for the chancellor, in any suit for the foreclosure or sale of mortgaged premises, to decree the payment of any excess of the mortgage debt, above the net proceeds of the sales, by any of the parties to such suit who may be liable, either at law or in equity, for the payment of the same; provided, that there be a prayer to that effect in the bill of complaint.”

Section 110 of the Chancery act (Gen. Stat. p. 394) provides as follows:

“That execution may issue, without a revival of the decree, at any time within twenty year's from the date of such decree; provided, the parties to the decree, or those of them during whose lives execution may now issue without a revival, be then living,” &c.

So far as the fourteenth section of the Limitation act bears upon the question to be dealt with it acts only by analogy. The only difference between that section and the one hundred and tenth section of the Chancery act is that the latter does not, by express language, forbid the issuing of execution after twenty years from the date of the decree; but the force and effect of the Chancery clause is precisely the same, and, in my judgment, prevents by implication and without the aid of the fourteenth section of the Limitation act the issuing of an execution after twenty years have elapsed.

The character of the decree upon which an execution against the goods and chattels and lands of the defendant may issue is fixed by the fifty-sixth section of the Chancery act, which, in my judgment, limits it to a decree by which an ascertained and fixed sum of money is ordered to be paid by one person to another. Such a decree is declared to have the effect of a judgment at law, and that execution may issue upon it against the property generally of the defendant.

The authority of the court of chancery to make a decree for deficiency against a bondsman in a foreclosure suit like the present — mortgagee against mortgagor — as a part of that proceeding, is found in the seventy-sixth section of the Chancery act enacted March 29th, 1866 (Nix. Dig. (4th ed.) p. 119), of which the present section is a transcript, with the added provision “that there be a prayer to that effect in the bill of complaint.” This act worked a decided change in the practice, and, it seems to me, added to the power of the court and enabled it to combine and administer a purely legal with an equitable right. ■ Chancellor Kent, in Dunkley v. Van Buren, 3 Johns. Ch. 331, refused, in the absence of statutory aid, to make such a decree j and Chancellor Green, in Klapworth v. Dressler, 2 Beas. 62 (at p. 65), recognized the soundness of that decision, and based the right to relief there given on the ground of the absence of legal remedy. The power of the chancellor to make a decree in personam was .therefore plainly limited by the act to a decree for a duly ascertained deficiency; and, strictly speaking, as it seems to me, it could not be made until after that deficiency had been ascertained. For non constat that there would be a deficiency, and until one appeared the court could not give any judgment or decree. The utmost it could do in anticipation of a deficiency was to simply declare the right of the complainant as against the bondsman defendant, and to that office, as it seems to me, must the addendum to the decree for foreclosure and sale in this case be confined. Tbe decree made use of in this case, which follows the form found in “Dickinson’s Forms” and is the usual one, not only declares the liability but attempts to go further by directing that a fieri facias issue for the purpose of enforcing the liability of the defendant to pay a deficiency which might never arise, and the amount of which could not as yet be ascertained, and directs the sheriff to make his return of the proceedings under that fieri facias. It seems to me that that part of the decree was expletive and quite unwarranted by the seventy-sixth section of the Chancery act.

This view of the law seems to put the true character and essential quality of the decree of March 6th beyond all dispute. It must be held to be purely interlocutory, inchoate and contingent in its character. It resembles the interlocutory judgment at common law under the old practice, where, after reciting that the defendant, though duly summoned, says nothing in bar or preclusion of the action, whereby the plaintiff remains entirely undefended against him, proceeds:

Wherefore the said plaintiff ought to recover against the said defendant his damages on occasion of the premises, but because it is unknown to the court what damages the said plaintiff has sustained by reason thereof, the sheriff is commanded that, by the oath of twelve men, &c., he diligently inquire what damages the plaintiff hath sustained by reason of the premises, and that he send the inquisition which he will take thereon to our court,” &c.,

after the return of which inquisition ascertaining the damages, follows the judgment: “Theretofore it is considered that the said plaintiff do recover against the said defendant his damages, costs and charges so found,” &c.

This has been the character allotted to such a decree by the decisions in this state. Bell v. Gilmore, 10 C. E. Gr. 104 where the chancellor (near the top of p. 106) says of a like decree that it was merely a contingent decree, and quotes with approbation the language of a California judge in treating of a similar decree, where he says: “ There was no personal judgment for this amount, nor was there anything in the nature of a personal judgment beyond the mere direction for the issuance of the execution in the event of the insufficiency of the mortgaged properfcy to pay the debt. The whole matter was contingent, indefinite and uncertain, and so long as this continued to be the case no effect whatever could be given to it.”

And again, in Mutual Life Insurance Co. v. Southard, 10 C. E. Gr. 337, in which the same view is taken (at p. 339); and he says that the first decree was, in fact, an inchoate decree merely, and that until the excess, if any, of the mortgage debt over the net proceeds of sale had been ascertained, it could not have the force, effect or operation of a judgment at law; that the power of the court which the statute confers is to make a personal decree for the excess.

The same view is taken by Vice-Chancellor Van Fleet in Newark Savings Institution v. Forman, 6 Stew. Eq. 436 (at top of p. 441), and by Mr. Justice Depue in Dawes v. Wheeler, 16 Vr. 67, where he holds that a decree like that of March 6th, 1877, in this case was not a decree for the payment of money; and again by Vice-Chancellor Van Fleet in Mutual Life Insurance Co. of New York v. Hopper, 16 Stew. Eq. 387 (at p. 390).

But the question is not so much as to the character of the decree of March 6th, 1877, as it is to that of the order or decree of October 16th, 1877. That order recites at length that part of the previous decree of March 6th which declares the liability of the defendant to pay the deficiency, and also recites and adopts the ascertainment by the sheriff of the precise amount of the deficiency and directs that execution issue for that amount. It does not, indeed, in express language, direct or order a certain sum of money to be paid by the defendant to the complainant in accordance with the language of the fifty-sixth section of the Chancery act, but it directs that a fieri facias do issue, pursuant to the first decree, to levy and make the sum ascertained as the deficiency. That, it seems to me, should be held to be, in effect, a decree that the defendant pay to the complainant so much money. The order should be read and construed as if the previous direction that the defendant do pay the deficiency when ascertained had been actually written in the decretal part of the order instead of being merely recited. Such was the view taken of a similar decree by the court of errors and appeals in Roll v. Rea, 28 Vr. 647. The facts in that case appear more fully in 21 Vr. 264. There the plaintiff’s title depended upon a sale by virtue of an execution issued out of the court of chancery upon a decree for deficiency like that of October 16th, 1877, in this case, an abstract of which decree had never been filed in the supreme court according to the statute, and the question was whether the title thereby acquired was good against a person who had not actual notice of the decree, which had not been docketed in the supreme court. And in answer to that point the counsel for the plaintiff took the ground that the order in question was not a decree for the payment of money such as required that it should be docketed in the supreme court.

In answer to that the learned judge deals with the question thus (at p. 650): “ Counsel contends that the proviso [requiring decrees to be docketed in the supreme court] is not applicable because the so-called decree is not really a decree, but is only an order, ascertaining the amount of the deficiency for which Sarah E. Dey was responsible after the sale of the mortgaged premises had failed to realize the mortgage debt. But a sufficient answer to this is that section 76 of the same statute, which confers upon the chancellor the authority to make such an adjudication, speaks of his judgment as a decree, and it is reasonable to conclude, in the absence of clear indications to the contrary, that the same terms express the same sense throughout the statute. In substance, also, the adjudication is a final decree, settling definitely and conclusively the obligation of the defendant.”

Such order was also held to have the force and effect of a judgment by the supreme court in the case of Mutual Life Insurance Co. of New York v. Newton, 21 Vroom 571, and to be a bar to an action at law on the bond, on the ground that it was merged therein.

My conclusion is that the order of the 16th of October, 1877, was in effect an order for the payment of a specific sum of money, and as such fixed for the first time the rights of the parties ; that upon general principles the statute of limitations did not commence to run until it was signed.

There is nothing in the case to indicate that the proceeding was unduly delayed, or that the last decree was not obtained as soon as practicable. It is well known that the sheriff could not, in the ordinary course of business, receive the purchase price until several days after the sale, and could not properly report the deficiency until he had received it.

I will advise a decree that the defendant do pay to the complainant the amount of the deficiency fixed by the order of October 16th, 1877, with interest to be added to the date of the decree, with the costs of this suit, and that a fieri facias do .issue to levy and make the money.


text:
    The Franklin Trust Company v. The Rutherford, Boiling Springs and Carlstadt Electric Company and Charles C. Southard.
    [Decided April 9th, 1898.
    Filed January 4th, 1899.]
    1. A by-law of a corporation provided that five-eighths of its stock should be represented at every stockholders’ meeting. The stock was divided into three thousand shares. At such a meeting only four of the stockholders were present, who represented four hundred and sixty-nine shares. The wives of two of such stockholders held one thousand shares each, but the minutes did not show that they were present, or that any proxies were presented for them. The proof showed' that the husbands did present proxies for their wives, and voted on their stock. — Held, that bonds issued at such meeting were valid.
    2. In an action of foreclosure it appeared that the mortgagor was a New Jersey corporation, but the mortgage was executed in New York. The answer set up usury under the New Jersey law, but made no affirmation as to the laws of New York. — Held, that being a New York contract, its validity should be determined by the laws of that state, and, there being no allegation as to those laws, defendant was cut off from the defence of usury.
    3. A corporation agreed to sell §40,000 of its bonds and §5,000 of its stock for §33,000, the purchaser to take up §15,000 of bonds of a prior issue, and pay the balance in money. He obtained the latter bonds for $14,000, and received the receipt of the president of the company for §15,000. — Held, that for the purpose of carrying out his contract he was entitled to the §15,000 as a payment.

      4. Upon foreclosure of a mortgage given to secure an issue of bonds by a corporation, it was contended that the loan was extortionate. Evidence showed that §40,000 of the bonds secured by the mortgage and §5,000 of the stock of the company were given for §33,000; that the security for the loan was of doubtful value; that the money was advanced at times of financial stringency, and that the present stockholders had purchased the great majority of the stock with notice of the mortgage, and that subsequently and before suit began the company, under their management, entered into an agreement of compromise with the bondholders and their trustee, settling the amount due upon an equitable basis and had since defaulted in payment. It was held that complainant was entitled to a decree of foreclosure, and that the computation of the amount due should be based upon the compromise agreement.
    Heard on bill, answer and proofs.

      Mr. William H. Corbin, for the complainant.

      Mr. Addison Ely, for the defendant company.
   Pitney, V. C.

This is a bill to foreclose a mortgage given by the defendant corporation to the complainant corporation to secure an issue of fifty bonds of $1,000 each.

The complainant corporation is organized under the laws of •the State of New York, and located at Brooklyn, in said state. The defendant corporation is located in Bergen county, in the State of New Jersey. The mortgage covers the defendant corporation’s electrical plant, situate in the neighborhood of Rutherford, in said county. It bears date May 1st, 1893, acknowledged June 26th, 1893, by the mortgagor, and by the mortgagee, complainant, on June 27th, 1893, and was recorded on June 28th, 1893. The bonds are payable in twenty years after date, with sémi-annual interest coupons annexed, at three per cent, each, and the mortgage and the bonds also provide that each year thereafter the defendant corporation shall pay to the complainant, in addition to the interest, the sum of $2,000, with which it shall purchase and cancel two of the bonds; and it also contains a provision that, in ease of failure for three months so to do, the whole of the bonds shall become due and payable.

The complainant, by its bill, alleges that all the $50,000 of bonds were issued and negotiated by the defendant corporation and came to the hands of the defendant Charles C. Southard; that the sinking fund for the spring of 1894 and of 1895 was provided, and that four of the bonds were paid therewith, leaving forty-six outstanding, all in the hands of the defendant Southard; that the sinking fund for 1896 and 1897 was not provided; that the interest for May 1st, 1897, was not paid in full, and that the interest for November 1st, 1895; May 1st, 1896, and November 1st, 1896, was only paid in part; whereupon, at the request of the defendant Southard, the holder of the bonds, the complainant declared the whole mortgage due and filed its bill to foreclose on the 14th of June, 1897. After-wards, on July 28th, 1897, interest to the extent of $1,080 was deposited with it by the defendant corporation, but whether accepted by Mr. Southard does not appear.

The defence by the defendant corporation is — first, that the bonds and mortgage were executed and delivered in pursuance of a written contract entered into between the defendant corporation and one George H. Southard, by which said Southard agreed to advance certain sums of money on account thereof at certain specified times, and that said contract and the mortgage, though executed by the officers of the company, never received the sanction of a proper meeting of the board of directors or a proper meeting of the stockholders of the corporation, as required by law, and are therefore void; second, usury, in that the bonds were sold by the defendant corporation at a usurious rate to George H. Southard, who is the brother of Charles C. Southard, and who was, at the time, the president of the complainant corporation, and that Charles C. Southard is not a bona fide holder of the bonds; third, that if the bonds are not usurious, then that Southard never did, in fact, advance the money according to his contract, and that the contract was, in its terms, so grossly unfair and extortionate on the part of Southard as to be a fraud upon the stockholders in general of the company, and that Southard is not entitled to declare the bonds to be due at this time, because, after charging him with the amount that he actually extorted from the company at the start, there is no default in the letter of the contract.

There is little dispute as to the actual facts in the case. The circumstances are these: On the 1st of May, 1893, the Electric company’s affairs were in this condition: it had, nominally, $30,000 of stock, divided into three thousand shares, of $10 each. The books do not show, distinctly, how that stock was held, as no stock ledger was kept, but as to five hundred of the three thousand shares, there can be no doubt that they were held as follows : By a Mr. Brunner, one share; Mr. Alyea, five shares; Mr. Mada, ten shares; Mr. Soley, fifteen shares; in all, thirty-one shares, of the par value of $310, which were held by parties not in the management of the company. The other shares actually issued at that time were — to a Mr. Appleton, one hundred and eighty-two shares; to a Mr. Jordan, one hundred and eighty-two shares; to a Mr. Burrows, fifty shares, and to a Mr. Buys, fifty-five shares, making four hundred and sixty-nine, and with the thirty-one before mentioned, five hundred shares. Appleton and Jordan were, respectively, the president and treasurer, and Burrows and Buys were employes of the company. On May 15th, 1893, one thousand shares were issued to the wife of Jordan and one thousand shares to the wife of Appleton. Whether they had been previously regularly allotted to them, so that they were the substantial owners at any time prior to the 15th of May, does not appear. Adding those, we have the total stock issued $25,000. In addition, there was, on the 15th of May, 1893, a certificate made out to Mr. George H. Southard for five hundred shares, making up the whole three thousand. But, as will appear hereafter, Mr. Southard was not at that time entitled to the issue of that stock to him, and for present purposes I shall hold that he was not the holder of it at that time.

The plant of the company was then subject to a previous mortgage given to a New Jersey trustee to secure fifteen bonds of $1,000 each, which were held by various persons in different parts of the United States. Appleton, as we have seen, was the president, Jordan the secretary and treasurer, and Buys and Burrows employes. Those four constituted the whole or a majority of the directors.

Mr. Appleton, the president, claimed that the company was indebted to him for cash advanced to the extent of $14,000. Of this alleged claim there is no proof.

In that situation, Mr. Appleton, who, as well as Mr. Jordan, lived in Brooklyn, applied to Mr. George H. Southard, the president of the complainant company, who also lived in Brooklyn, to advance some money to the company, and the result was an agreement in writing dated the 3d-of May, 1893, purporting to be between the defendant corporation, executed by its president, Mr. R. Ross Appleton, and Mr. George H. Southard as an individual, which witnessed that the defendant corporation agreed to sell to Mr. Southard $40,000, being part of an issue of $50,000 of first mortgage six per cent, gold bonds, secured by a first mortgage to the Franklin Trust Company, complainant, upon all the plant of the defendant company, and also to sell to him $5,000 at par of fully-paid stock of said company, all for the sum of $33,000, payable as follows: May 9th, $6,000; July 1st, $6,000; July 15th, $6,000; August 15th, $5,000; September 1st, $5,000, and October 1st, $5,000, the bonds to be dated May 1st, 1893, payable twenty years after date; the mortgage to provide for a sinking fund of $2,000 annually, to be paid to the trustee and used by it in redeeming $2,000 of the bonds in each year, providing for the drawing of the bonds to be canceled by lot if the same could not be purchased at par, the remaining $10,000 of bonds to be issued only for extensions and betterments; and the defendant corporation agreed that part of the proceeds of the sale of the $40,000 of bonds should pay off and cancel the $15,000 of mortgage bonds outstanding against the property. The contract also provided that the corporation should submit, within ten days of the date of the contract, a resolution to the action of its board of directors, approving the contract and authorizing the issue of the bonds, and also a similar resolution to the vote of its stockholders at its annual meeting to be held May 16th, 1893. The mortgage and bonds were to be ready for delivery on or before the 1st of July, 1893, and Southard agreed to make the stipulated payments for the $40,000 of bonds and $5,000 fully-paid stock upon delivery to him of $7,000 of the old issue on May 9th, and $8,000 of the old issue on July 1st, 1893, together with the whple $40,000 of the new bonds; and the defendant corporation agreed to deliver to Southard for cancellation all of the old issue of $15,000 on or before the 1st of July, 1893.

That agreement was submitted to a meeting of the board of directors, on the 16th of May, 1893, and unanimously approved, and also to a meeting of the stockholders on that day with a like result.

The proofs do not show how the meeting of stockholders was called. They do show that the four stockholders — Appleton, Jordan, Burrows and Buys, representing in their own right four hundred and sixty-nine shares of the stock — were present. The minutes do not show that their wives were present or that any proxies were present for them. The proofs tend to show that Messrs. Appleton and Jordan represented their wives, and Mr. Buys, who acted as secretary, swears that they did present the proxies of their wives and voted on their stock.

The validity of this meeting is attacked on the ground that the by-laws require that five-eighths of the stock should be represented at every stockholders’ meeting, and that the proxies are not produced.

It appears that, in the summer of 1894 or 1895, Appleton and Jordan, and, I believe, Burrows and Buys, sold out their stock to a Mr. Ferree, who at present owns most of the stock of the concern and is promoting this defence, and all their books and papers were passed over into his possession. The proxies in question were not produced when called for by the complainant, and the counsel of defendant corporation denies all knowledge of them.

I hold upon the evidence that if the issue of the shares of stock to Mrs. Appleton and Mrs. Jordan on the day before this annual meeting of stockholders constituted them stockholders, then that the evidence satisfies me that they were present by their husbands, who acted as their agents and as their proxies. Besides, before the Appletons and Jordans and Mr. Burrows and Mr. Buys assigned their stock to Eerree, the contract of May 3d, as ratified by the directors and stockholders on May 16th, was many times recognized and ratified.

So much for the lack of authority of the officers of the corporation to execute the mortgage and the bonds.

The next question is as to the defence of usury.

The answer sets up usury under the laws of New Jersey, and makes no affirmation as to the laws of New York. The proofs show that all the negotiations were had between Appleton, as president of the corporation, and George H. Southard, as proposed purchaser of the bonds, and that those negotiations took place in the State of New York. There is no proof that Mr. Southard was present at either the directors’ or stockholders’ meetings in New Jersey, or that he ever was in New Jersey, except once to examine the plant. The mortgage and bonds were all executed in the State of New York, and I am constrained to hold that this is a New York contract, and that its validity must be determined by the laws of the State of New York. As there was no allegation of those laws in the answer, the defendant corporation is cut off from the defence of usury. But had it been set up in the answer, it would not have availed as a defence, because it was admitted substantially at the hearing that by the laws of New York a corporation cannot set up the defence of usury, and if that statute had been proven it is well settled that this court must apply it.

The next point is the extortionate character of the contract, and that Mr. George H. Southard never advanced the money that he agreed to advance. In the regular course of business he was entitled to have the old issue of $15,000 delivered up and canceled so that the complainant corporation could certify on each of the new bonds that it was secured by a first mortgage. That the new mortgage was intended to be a first mortgage is not open to dispute. Appleton undertook to hunt up these old bonds and to arrange with the holders to send them to the Franklin Trust Company to be redeemed, and Mr. Southard agreed to pay for them as fast as they came in and in advance of his strict legal obligations to do so under the contract of May 3d, 1893. Mr. Appleton did so, and the bonds were sent in in batches from different holders, accompanied with drafts from distant points, through a New York bank, and those drafts were met and paid by Mr. Southard. It may be inferred, although there is no positive proof of that fact, that Mr. Appleton succeeded in getting the whole $15,000 of bonds for the sum of $12,000, that being the amount, approximately, of the drafts accompanying the same which Mr. Southard paid; but he also paid $2,000 directly to Mr. Appleton, making $14,000 in all paid out for the $15,000 of bonds; $6,000 of that were paid some considerable time prior to the date fixed by the contract, and by an arrangement between him and the corporation it allowed him two per cent. — $120—for such prior payment, which, added to the amount paid upon drafts directly to the holders of the bonds and $2,000 paid to Mr. Appleton, amounted to just $14,000. But he holds the receipt of Mr. Appleton, as president of the company, for $15,000 on that account.

This state of facts raised a question at once as to whether or not he was entitled to consider the $14,000 actually paid as a payment of $15,000 on account of his contract to pay $33,000, and that was one of the questions argued.

If he had previously bought all of those bonds and had been the holder of them at the time the contract was entered into, I should say, without hesitation, that he was entitled to the whole face of the bonds; but only $6,000 was paid in advance of his contract, and for that he claimed and received a discount of $120. And his counsel frankly stated that if the court had any doubts about Mr. Southard’s right to claim that extra $1,000 he would submit to a deduction on that account. So I shall hold that, although he had the receipt of the company for $15,000, still, for the purposes of final accounting with the defendant corporation, he is entitled to a credit of only $14,000. But, for the purpose of fulfilling his contract to furnish $33,000 in exchange for the $40,000 of bonds of the company, it must be considered as a payment of $15,000. The remaining $18,000 was paid from time to time, but not in accordance with the terms of the original contract. The stringency of the money market in the summer of 1893 was such that the defendant company, by Mr. Appleton, its president, granted a partial extension of time, running up to the 18th of January, 1894, and that extension is in writing, added to the original agreement. The payments were, in the end, all made.

A portion of those payments was applied to the payment of the coupons falling due on the $40,000 of bonds on the 1st of November, 1893, and by such payment Southard undoubtedly received interest for'moneys he had never advanced.

On the 1st of Majq 1894, by the terms of the mortgage, $2,000 was to be paid on account of principal, and bonds to that amount were to be retired. On that day — May 1st, 1894— the defendant company was unable to meet the payment of $2,000 and the interest due that day, and a new contract in writing was entered into between the parties, by which the defendant company agreed to sell to Mr. Southard — and Mr. Southard agreed to purchase — the remaining $10,000 of the whole issue at the price of $7,000, of which $5,200 was to be paid in cash on that date, $1,500 on the 1st of November, 1894, and $300 on the 1st of May, 1895. The $5,200 to be paid on the date of that agreement was applied as follows: Four thousand dollars was used to retire $4,000 of bonds, two to be paid on that day, under the agreement, and two to be paid in one year from that date, to wit, on May 1st, 1895, and $1,200 was applied toward paying the coupons due that day on the bonds already issued. That left in the hands of Mr. Southard $44,000 of bonds. The remaining $1,800 were subsequently paid and the other two bonds delivered, making him the holder of forty-six bonds, of which foreclosure is sought.

In the fall of 1894 the stock of the company held by Appleton and Jordan and their party was sold to a Mr. Ferree, who, with his son, became the holder of the whole of the stock and took up the management of the plant. Shortly after Ferree came into the control of the company, disputes arose between him and Mr. Southard holding all these bonds, as to the amount •advanced on them, and as to the amount on which interest should be paid, which resulted in a new contract entered into between the defendant company and Southard, on the 4th of February, 1896. By that agreement the electric company agreed to make •certain improvements in, and additions to, their plant, and con•sented to the extension of the lien of Southard’s mortgage upon .such additions; that the interest due on the 1st of November, 1895, should be paid as upon $36,000 of bonds; that the agreement for the extension of the mortgage lien should be ratified .at a formal meeting of the directors of the company and at a regularly-called stockholders’ meeting. Southard, on his part, agreed that the complainant trust company should consent to the selling of some old engines and dynamos, the proceeds of which should be applied toward the improvements; that he ■would accept $1,080 payment of interest, being three per cent, on $36,000, on November 1st, 1895; that upon the plant being improved in the manner provided for, he would surrender and ■deliver up $10,000 of the bonds for cancellation, reducing the amount outstanding to $36,000, but that of the amount so surrendered $5,000 should be considered as full payment for the S5,000 of capital stock which he held, and that upon that being-•done the electric company would execute a certificate that the mortgage and outstanding bonds to the extent of $36,000 were :good and valid and given for value, and that there were no • defences thereto in law or in equity.

That agreement was executed by the two Ferrees, father and son, one as president and the other as treasurer of the company.

That contract was never carried out in full by the electric company. They paid interest on the reduced number of bonds, but did not make the $2,000 sinking fund payment which fell -due on the 1st of May, 1896, nor that which fell due on the 1st ■of May, 1897. The result was that the bill was filed.

This contract of February 4th, 1896, was not set out in the original bill, nor was it set up in the answer, but came out at the hearing, and then the evidence with regard to the perform.ance of it on each side was fully gone into, with the result that I conclude that the electric company was in default, and that Southard, as holder of the bonds, was not in default.

Complainant, at the hearing, offered to abide by the contract of February 4th, 1896, if the electric company would undertake to carry it out, and obtained leave to file an amendment to its bill, by which it sets out that agreement and offers to submit to such terms with regard to it as the court shall think are just and equitable under the circumstances. That contract was, I think, eminently just and fair, and its adoption by the court will eliminate the charges of extortion and unfairness in the original contract. The security for the loan was of doubtful value, and the loan a risky one. The money was advanced at a period of great financial stringency; the actual borrowers — the persons then owning and controlling all the stock of the defendant corporation — were amply able to take care of themselves in the transaction, and are not now complaining of it. The parties now defending purchased the stock with full notice of the mortgage, and hence do not occupy the position of being directly oppressed.

For these reasons, my conclusion is that the complainant is entitled to relief, and that under the circumstances it is just and equitable that it should have a decree for $35,000, viz., $1,000 less than fixed by the compromise agreement, with the arrears of unpaid coupons on thirty-five bonds, and a decree of foreclosure in which a provision shall be made for the extension of the principal according to the terms of the original mortgage, provided the interest and costs are paid.


text:
    Joseph Tate v. Frank S. Field et al.
    [Decided April 27th, 1898.
    Filed January 4th, 1899.]
    1. The purchaser of the equity of redemption is charged with notice of a covenant of the mortgagor to erect on the premises a building; and when he removes such building, it being of a permanent character, and affixed for use with the realty, lie is presumed to have done so as a willful wrongdoer, and will not be permitted to profit thereby.
    2. A tenant who, as a willful wrongdoer, commits waste by removing a building, and fails to show the actual proceeds derived therefrom, is chargeable to the highest probable or speculative value of such building to the reversioner reasonably warranted by the evidence, together with interest from the commission of the waste.
    On hearing to take an account of waste.

      Mr. Samuel J. MacDonald, for the complainant.

      Mr. Francis J. Swayze, for the defendants.
   Pitney, V. C.

This is a bill to foreclose, with an allegation of waste by the •defendants, who are the owners of the equity of redemption by purchase from the receiver of the mortgagor, an insolvent corporation. In addition to the prayer for foreclosure and sale, there is a prayer for compensation for waste committed.

There was a decree of foreclosure and sale, with a declaration that the complainant was entitled to compensation for the wmste, as reported in Tate v. Field, 11 Dick. Ch. Rep. 35.

The sale was made, and the premises brought a less sum than the amount of the decree, leaving a deficiency of $694.24, as of July 12th, 1897. The case was then again brought to hearing for the purpose of ascertaining what sum the defendants should pay by reason of the waste.

The building removed by the defendants was a long, wide, one-story frame shed, thirty by one hundred and fifty feet,, adapted for use in storing material for manufacturing paper felt, and for storing the manufactured article. It was used in connection with a factory near by, then carried on by the original mortgagor, and was of very little use for any other purpose.. After the factory ceased to be operated, there was no demand for any such building in the neighborhood, and its value as a building upon the premises was slight. Its principal value was-in the materials — sawed lumber — of which it was composed. Those materials cost, before being placed in the building, $720,. as shown by the evidence of the contractor who erected the building. They were, of course, somewhat depreciated in value by being cut to fit that building, and had stood in the building some two or three years, but had depreciated by reason of age-very slightly, if any. The principal value of the lumber was-for use in some other building, and such value was uncertain. The evidence indicated that it would depend almost entirely upon the circumstance that a contractor or other person desiring to erect a building or series of buildings might have an opportunity to use the lumber to good advantage for such purpose. The witness for the defendants estimated the value for that purpose at about $100 to $150. The witness for the complainant,, who erected the building and testified to the cost of the material, and who I am satisfied is a gentleman of experience and of good judgment, testified that under favorable circumstances the materials might be worth to a builder or contractor more than one-half the original cost, viz., $360 or upwards.

The allegation of the bill is that the defendants moved the-building from Chatham, where the mortgaged premises are, to-premises of the defendants, Field, Haines and White, near Boonton, in the county of Morris, and “ re-erected the building thereupon.” This allegation was not denied by the answer and must be taken to be an admitted fact in the case.

The defendants gave no evidence and rendered no account as-to Avhat disposition they made of the materials in the building,, or as to what practical value they proved to be to them.

Tlie fact set out iu the bill that the defendants purchased the premises from the receiver appointed by this court, and that they removed the building and “re-erected it on their own premises,” leads naturally to the inference that they had occasion to use the same or a similar building, and hence that they derived from the materials in question the maximum of benefit; that is, they derived as much or more benefit from them than any other person could have done.

Upon these facts the question arises, what rule is to be adopted in fixing the amount for which the defendants are to be charged, and that depends, in a measure at least, on the attitude of the defendants as either willful wrongdoers or innocent trespassers.

The defendant Field, in his answer, alleged:

“And this defendant, Frank S. Field, for himself answering, says that he was present at the removal of the said building, and supposed at the time that he had a perfect right to remove the same, and still insists that the building was rightly removed.”

No proof was offered at any time in favor of that proposition, or any reason, with the least degree of plausibility, upon which he could have based the supposition that the defendants had such right. It was, indeed, placed upon wooden posts, instead of stone pillars, fixed in the earth; but it was a large building and of a permanent character, built for use upon those premises, and, moreover, it was placed there in pursuance of a covenant in the mortgage that the mortgagor would place a building there of a certain value. The defendants are chargeable with notice of the covenant to that effect, and I must therefore hold them responsible as willful wrongdoers.

That being so, the familiar and well-settled rule in equity applies that a wrongdoer shall not be permitted to take any advantage of, or make any gain from, his wrongdoing. That rule has been applied frequently in similar cases. It was applied in the case of Duke of Leeds v. Earl of Amherst, 14. Sim. 357; 2 Phil. 117; 20 Beav. 239. There the Duke of Leeds filed a bill to recover the proceeds of the destruction of Kiveton House, a family mansion, the materials of which were sold and the proceeds received by the late duke, his father, in his lifetime, and it was held that he was entitled to an account. Afterward an accounting was had before a master, who made a report, finding a large sum of money — ¿642,000—due from the estate of the late duke to the present duke. Exceptions to that report came on for hearing before Sir Lancelot Shadwell, master of the rolls, in 1850, and is reported out of place by Mr. Beavan in the twentieth volume of his reports, page 239. Owing to the great length of time which had elapsed since the waste was committed and the fact that no separate account of the proceeds had been kept by the late duke, it rvas impossible for the master to resort to any reliable data to make up an account, and the amount as found was the result, in a great measure, of conjecture. On that subject Sir Lancelot Shadwell (at p. 242) said : I take it that the general wisdom of mankind has acquiesced in this — that the author of a mischief is not the party who is to complain of the result of it, but that he who has doue it must submit to have the effects of it recoil upon himself.” He then goes into an elaborate examination of the law upon the subject, repeating (at p. 246) what he had previously stated as the rule; and he sustained the master’s report on the ground, in substance, that it was the duty of the master to make it large enough to cover the possible profits which the late duke has made from the sale of the materials of the house, the profits actually realized' being the basis upon which the original reference had been granted, as appears by an examination of the reports in 14 Sim. and 2 Phil. Ch.

The same rule was laid down by Sir John Romilly, master of the rolls, in Lushington v. Boldero, 15 Beav. 1. There a party, tenant for life, without impeachment of waste, committed what is called “equitable waste” by cutting down ornamental timber, and the court compelled him to pay into court the amount for which the timber -was sold, and that amount having been in court some time, the question arose as to whether or not the tenant for life who committed the waste was entitled to the interest upon it, or whether that interest should accumulate for the benefit of the reversioner, and the master of the rolls (at p. 5) says: “ The equitable doctrine applicable to this and other similar cases is this, that no person shall obtain any advantage by bis own wrong.” And again (at p. 7): When, however, the tenant for life has committed the wrongful act which produces the fund, the court will not allow him to gain any benefit from it; but the reversioner takes the benefit arising from an accretion of the fund, in lieu of the accretion of the timber.” And he gave the interest to the reversioner instead of to the tenant for life.

The same doctrine was again asserted by Lord Romilly, in Bagot v. Bagot, 9 Jur. (N. S.) 1022. That was a case of both timber and minerals, and (at p. 1024) the master of the rolls reiterated the doctrine that a tenant for life could not derive any benefit from timber cut by him knowingly and willfully, and says that, “ reviewing the authorities, I still retain that opinion.” The question was whether the tenant for life was entitled to interest on the proceeds of timber and minerals improperly cut and won, and it was held that he was chargeable with interest, and was not entitled to the use of it during his .lifetime.

In the case of Morris v. Morris, 3 De G. & J. 323, Lord-Justice Knight Bruce, in delivering judgment, said : “If it had been shown, or were in any degree likely, that any part of the materials of the old house had been sold, probably, notwithstanding the much larger expenditure on the construction of the new mansion-house, the assets of the second baronet would have been held liable to account.” And Lord-Justice Turner (at p. 328) said: “The principle upon which the court proceeds in these cases is that the tenant for life^of an estate is liable to account in equity for profit derived by him from an improjjer user of his legal powers, in committing equitable waste.”

In Seagram v. Knight, L. R. 2 Ch. App. Cas. 628 (1866), the head-note is this: “If a tenant for life, impeachable for waste, cuts timber without the leave of the court, he will never be per-mitted to derive any advantage from his wrongful act.” And Lord Chelmsford (at p. 632) says: “ But whatever may be the course adopted by the court where a tenant for life, impeachable for waste, obtains its leave to cut down timber, I entertain no doubt that if he takes upon himself to cut and sell timber without authority, he does it at his peril, and he can never be permitted to derive any advantage from his wrongful act,” referring to Williams v. Duke of Bolton, 3 P. Wms. 268, note.

And in the much-discussed and thoroughly-considered case of Jegon v. Vivian, L. R. 6 Ch. App. Cas. 742 (1871), the same doctrine is announced. Lord Hatherley, in delivering judgment (at p. 761) says: “ This court never allows a man to make profit by a wrong.” The question there was whether coal wrongfully but innocently taken should be charged for at the value in situ, or at the value after it had been separated, won ” or “ hewn,” as it is called, and he held in that case that what is called “ the milder rule” should be applied. The more severe rule, as is well known, was laid down in Martin v. Porter, 5 M. & W. 351, and is still the law in England in all cases except where there was no intentional wrongdoing. Phillips v. Homfray, L. R. 6 Ch. App. Cas. 770; Llynvi Coal Co. v. Brogden, L. R. 11 Eq. 188.

The case of Duke of Leeds v. Lord Amherst, supra, is the only one which I can find at all parallel to the present one in respect to the uncertainty and speculative character of the value of the materials taken and the profits derived. And in this case the defendants are responsible for that uncertainty, because it was in their power to show what profit they actually derived. Not having done so, they are justly subjected to the rule that all presumptions are against the wrongdoer.

Most of the English cases arose from the cutting of timber and the removal of minerals, and they generally present a very easy mode of ascertaining the actual profit derived by the wrongdoer. In the case of either timber or coal there is a well-known market value, and deducting from that the cost of removing it from the stump or the mine.leaves the value of the timber standing in the ground, and the ore in situ; and the well-settled rule, as we have seen, is not to allow the wrongdoer the cost of cutting down the timber or of hewing or breaking loose the ore or mineral, but to ascertain its value in the manner just stated after the timber has been cut down and the mineral loosened from its site, the rule being not to give the owner of the mineral or timber any benefit from the skill or labor bestowed upon it by the wrongdoer except the cost of separation.

This was the principle adopted in the case of Whorton v. Webster, 56 Wis. 356, cited by counsel for defendants. That was a ease of cutting timber, between mortgagee and mortgagor, and the timber was capable of an exact valuation on the stump. The principle of the decision is contained in these words: “He [the mortgagee] cannot, in this proceeding, appropriate the labor and skill of the Whartons [the wrongdoers] to the payment of his mortgage.”

The principle contended for by the defendants is that the complainant is entitled to recover only the actual depreciation in the value of the premises by the removal of the building, and that is shown by the evidence to be trifling.

But I am unable to give my approval to such a doctrine. It would lead to this — that a man might have on his premises some fixture or object — building, or rock, or tree — which was of no kind of value to him, but which could be sold by his neighbor for a particular purpose and made very valuable, and that the neighbor might commit a trespass, go upon the premises, remove the object and make a large gain out of it by paying nominal damages to the owner. ■

In the case in hand the mortgagor was entitled to the benefit of every chance that the building on the mortgaged premises might be, some time in the future, of great value. The original cost was $1,106, besides the painting, a matter of $40 or $50, and the tarred-paper roof probably as much more, amounting in all to nearly or quite $1,200. The owner of the building thought it worth while to spend that amount of money upon it. If the factory in the neighborhood should ever again be operated the building might again be valuable, or the owner had a right to enjoy his opportunity to sell the materials to some person, who, some day in the future, might possibly need them. He has been deprived of the benefit of these chances, and the defendants are chargeable, under the circumstances, with having derived a large benefit from their wrong. And for these reasons, in the absence of any evidence on their part as to what benefit they actually did derive from the building, I think that they must be charged with the highest value which the proofs will reasonably warrant, not exceeding, of course, the amount of the deficiency.

The proofs taken at the first hearing show that the building was removed about the 1st of December, 1894 (the complainant was a non-resident, and had no notice of it until some time afterwards); and I think that I am safe 'in adjudging that the materials were worth to the defendants at least $400, and that they should be charged with interest on that amount from the 1st of December, 1894, or say $80, making a total of $480.

I will advise a decree that the defendants are jointly and severally liable to pay, and do pay forthwith to the complainant, the sum of $480, together with the costs of this suit.