text:
    Jacob A. Feit v. Anna M. Richards et al.
    [Filed December 28th, 1902.]
    A father, by will, devised to his son and three daughters separate tracts of landl. The devise to the son was by name and without words of perpetuity or inheritance.—Held, (1) that under the provisions -of the act entitled “An act to pass estates in fee-simple by certain devises in wills and testaments and to limit estates in tail,” passed August 27th, 1784 (Gen. Stat. p. 3763), the son took an absolute estate in fee-simple in the lands devised, unless the will disclosed an intent to convey only an estate for life, or contained a devise over upon his death; (2) a provision that in case his son died without issue, his wife, Lydia, should not have any interest in the lands devised to the son, does not disclose an intent to pass to him only an estate for life. The will further provided that none of the real estate devised to his children should be sold by any of them without first obtaining a full written consent of all the children or the remainder of them.—Held, further, (3) a, that if that provision is to be construed as imposing an unlimited restraint upon alienation, it is void as repugnant to the estate devised, and 6, that if construed as imposing a partial restraint upon alienation, limited to the period of the life of the last surviving sister, in the absence of a devise over, or a declaration of a forfeiture of the son’s estate in case of sale without consent, the devise to him must be held to pass to him an absolute estate in fee-simple.

      Mr. Irwin W. Schultz, for the complainant.
   Magie, Chancellor.

The bill in this cause is filed under the provisions of the act entitled “An act to compel the determination of claims to real estate in certain cases and to quiet the title to the same,” approved March 2d, 1870. Gen. Stat. p. 3486.

It discloses that the complainant is in possession of a certain farm and buildings thereon, claiming to be the owner thereof under the provisions of the will of his father, John Eeit, deceased, who died March 3d, 1892. The defendants are two of the sisters of complainant, and the husband and three children of a deceased sister; of these children, one is of age, the others are minors. All the adult defendants have failed to appear or answer the charges of the hill,, and a decree pro confesso has been made against them. Upon their default, the court is bound by the provisions of section 3 of the act above cited, without further proof, to decree that they have no estate or interest in or any encumbrance upon, the lands described in the bill, or any part thereof.

The infant defendants, however, having been brought into the suit, a guardian ad liiem was appointed, who has filed a formal answer. No demand has been made by any party for an issue at law. Testimony has, however, been taken by 'the complainant under an order for proofs to suppqrt the allegations of his bill. It appears thereby that the adult defendants, or some of them, have claimed that the title of complainant to the lands in question is not a title in fee-simple.

As all claims on the part of the adult defendants will be disposed of by the decree which the act requires the court to make upon their default, it at first appeared questionable whether the court should pronounce a decree with respect to the infant defendants. But, upon reflection, it has seemed to me that a ease within the act has been made out. While the infant defendants are not shown to have denied or disputed complainant’s title, it is apparent that the claim of the adult defendants was that, by the will in question, a fee-simple in the lands did not pass to complainant, but only some less estate, so that an interest therein was not disposed .of by the will, but descended to the heirs-at-law—an interest which would be shared by the defendants. It can therefore be said that they are persons who are claimed to own an interest in said lands. Although the act gives to the infants the right to open the decree at any time within two years after they become of age, I think it requires a decree to be made, if the interest which the infants are claimed to own does not, in fact, exist.

John Eeit, the deceased, died leaving a will which bore date the 5th day of November, 1885, and a codicil thereto which bore date the 9th day of March, 1888. Both the will and codicil were duly admitted to joróbate in the comity of Warren, in which testator resided, on March 22d, 1892.

As the defendants have not appeared by counsel and made known the precise grounds upon which it has been claimed that the complainant has not a title in fee-simple to the lands in question, I have been obliged to rely upon the conjectures suggested by the brief filed in behalf of complainant and those which have arisen from my own examinations of the will under which complainant claims title.

By the fourth section of the will of John Eeit, deceased, father of complainant, testator devised to his son, Jacob Alfred Eeit, the complainant, the lands in question. The devise is to him by name, but without words of perpetuity or inheritance. The words “heirs and assigns,” or “heirs and assigns forever,” formerly deemed necessary to j)ass a fee-simple, are omitted from this devise. The case therefore falls within the provisions of the act entitled “An act to pass estates in fee-simple by certain devises in wills and testaments and to limit estates in tail,” passed August 26th, 1784. Gen. Stat. p. 3763. It is not open to doubt that under that legislation the devise in question has passed to complainant the absolute estate in fee-simple in the lands devised, unless there are found expressions in the will which disclose that the devise was intended to convey only an estate for life, or there is contained in the will a further devise of the premises after the decease of the complainant. Den v. Snitcher, 2 Gr. 53; Bolton v. Bowne, 3 Harr. 210; Hance v. West, 3 Vr. 233.

A careful examination of the will has disclosed only two portions, the language of which is adapted to raise any question as to the title of the complainant to the lands devised by the fourth section of said will.

The first portion is that contained in the last clause of the fourth section, which is in these words:

“In case my son, Jacob Alfred Feit, should die without issue, then and in such case his wife, Lydia, shall not have an interest in any portion of real estate herein bequeathed to my son, Jacob Alfred Feit.”

The suggestion is that the intent of the testátor is thereby disclosed to be that the lands should not pass under the devise if complainant shall die without issue. In that ease they would descend to the other children of testator. But this is a wholly inadmissible construction of the clause. Its plain intent is to prevent the wife of his son, in ease his son died without issue, from having a right of dower in the lands. Since dower and curtesy are incidents of estates in fee-simple, it may’ well be doubted whether this clause would be effective in preventing the dower of complainant’s widow from attaching to the lands. Mullany v. Mullany, 3 Gr. Ch. 16; 2 Jarm. Wills (R. & T. ed.) 528.

But this question is not involved in the present inquiry. •Complainant’s wife is not a party to this suit, 'and the complainant is still living. But the clause in question is plainly limited to an attempt to bar the son’s widow from an interest in the real estate which it admits is devised to the son, in case of the event mentioned happening. It has no other or greater effect upon the title. The purpose being thus expressed, there is' no ground for an implication of a purpose to limit the estate of complainant to the period of his life.

The only other portion of the will which suggests a question as to the quantity of the estate devised to complainant is that contained in the ninth section of the will, which reads as follows:

“It is my will that none of the real estate shall be sold by any of my children, that I have herein devised to them, without first obtaining a full written consent of all the children or the remainder of them.”

This clause is evidently intended to impose a restraint upon the alienation by sale of any -of the lands devised by the will to any of his children, and it consequently affects the lands in ■question if it is a valid restraint.

• Since the power of alienation is a necessary and inseparable incident to an estate in fee-simple, a condition annexed to a devise of such an estate, that the devisee shall not alien the lands devised, has always been held to be void, as repugnant to the nature of the estate. 2 Jarm. Wills (R & T. ed.) 528; Trumbull v. Gibbons, 2 Zab. 155; Cornelius v. Ivins, 2 Dutch. 376; Bac. Abr. tit. “Conditions” (L.); 13 Am. & Eng. Encycl. L. (1st ed.) 794.

If, therefore, the clause now under consideration is properly construed as forbidding any alienation by complainant not consented to by his sisters or by those who represent them, it is a condition wholly void and of no effect upon the estate devised to complainant. But such is not a permissible construction of its language. The consent of; all the sisters is not required, but only of such as remain. This admits of no other meaning than those who survive. The consent of the survivors or survivor of the three sisters is all that is contemplated by the testator. It follows, I think, that on the death of the last surviving sister the attempted restraint ceases, and the power to alien would be unrestrained.

While an absolute restraint upon such alienation will be of no effect on the estate devised, it may be otherwise in respect to a restraint which is limited or partial. The subject was discussed by Sir G. Jessel, master of rolls, in In re Macleay, L. R. 20 Eq. Cas. 186, and he indicated the various modes in which a partial restraint upon alienation could be imposed on a devise of lands. He makes it clear, I think, that upon reason and authority, a restraint limited to a reasonable period of time will not be void. If it were necessary to decide the question thus suggested, I should be inclined to the. conclusion that the intended restraint on alienation in this case is not an absolute restraint, but one limited to a period of time, viz., the life of the longest liver of complainant’s sisters, and that during that period, complainant is restrained from selling without the consent of the sisters then surviving.

But the- question is not necessarily involved. If the ninth section imposes an absolute restraint upon alienation it is absolutely void, and complainant’s devise is a fee-simple absolute. If, however, the condition imposed is of a restraint partial and limited and therefore not void, but effective upon complainant’s right to sell, the clause so construed does not indicate any- intent to otherwise diminish the estate devised to complainant. There is no devise over in case complainant should sell without the required consent. There is no declaration that complainant, hy such a 'sale, would forfeit the estate devised to him. At the most the sale would he ineffective to pass complainant’s title without the consent required. Whether it would do so or not would be a question between complainant and his grantee. Neither his sisters nor the representatives of any of them would have any right to contest such a sale.

In both aspects of this ease, it appears 'that complainant acquired, hy the devise of his father, an estate in fee-simple in the lands in question, and that the defendants have no estate or interest therein. Complainant is entitled to a decree to that effect.


source: Caselaw Access Project

author: Magie, Chancellor.

license: Public Domain

text:
    William B. Rossell v. Ellen Rossell.
    [Filed January 7th, 1903.]
    Under proceedings invoking the general power of the chancellor over the affairs of infants and their custody during minority, or upon habeas corpus, under the provisions of section 12 of the “Act concerning minors, their adoption, custody and maintenance” [Revision of 1902] (P. L. of 1902 p. 259), the chancellor may, by decree or order, award the custody of an infant child of parents living in a state of separation without being divorced, to one of them, and incidentally jn’ovide for the access of the other parent to the child under proper restrictions. A bill filed by the father of such a child against the mother having the child in her custody, not seeking a decree fixing such custody or making the child a party, but only asking a mandatory injunction requiring the mother to permit the father to have access to the child, does riot properly invoke the jurisdiction of the chancellor.

      Mr. William T. Boyle, for the complainant.
   Magie, Chancellor.

The bill in this ease was filed on July 31st, 1901. The complainant therein states that he was married to the defendant, and that a child was born of the marriage on the 31st of July, 1900. He further states that his wife had separated herself from him, talcing the child with her, and is now living in this state apart from him, and denies him any access to the child. The prayer is for a decree requiring the wife to permit the husband to see the child at such reasonable times and places and upon such terms, conditions and restrictions as should seem fit to the court.

No answer was filed to the bill, and the cause remained without any steps taken, until, on June 3d, 1902, an order for proofs was made. Proofs were taken under the order, and upon them the case was set down for hearing.

The proceedings are not initiated by a writ of habeas corpus, bringing before the court the child in question. If the matter had been thus brought to the attention of the chancellor, it would have been governed by the legislation in force at the time the bill was filed, viz., the “Act concerning the custody of infants,” approved March 20th, 1860, as amended by an amending act approved March 22d, 1892. Gen. Stat. p. 1722. As the child was within the age of seven years, the discretion of the chancellor, if invoked by the writ of habeas corpus, has been held to be limited by the provisions of the act so far as to require him to commit to the mother the custody of a child, the parents of which live in a state of separation without being divorced, unless the' mother is of such character and habits as to render her an improper guardian for such child. Bennet v. Bennet, 2 Beas. 114; Landis v. Landis, 10 Vr. 274.

Where the chancellor’s jurisdiction is invoked by habeas corpus, but the pleadings and proofs presented make an issue as to the right to the permanent custody of infants, the matter is before the chancellor under his general power to superintend the, affairs of infants and to provide who shall permanently have the custody of them during minority. Baird v. Baird, 4 C. E. Gr. 481; Buckley v. Perrine, 9 Dick. Ch. Rep. 285; S. G., 10 Dick. Ch. Rep. 515.

It may be incidentally stated that the act above cited, which was in force at the time this bill was filed, was repealed by an act approved April 2d, 1902. P. L. of 1902 p. 270. The provisions of the act thus repealed have been modified, and, as modified, continued in force by the twelfth section of the act entitled “An act concerning minors,'their adoption, custody and maintenance” [Revision of 1902], approved April 2d, 1902. P. L. of 1902 p. 259. By the provisions of that section the chancellor is empowered to award the custody of any minor child of a husband and wife living in a state of separation without being divorced, upon the child being brought before him upon habeas corpus, and may also make order for the access of either parent to such child, at such times and under such circumstances as he may decree expedient.

Except as the legislation above mentioned may have limited the discretion of the chancellor respecting the custody of. an'infant within the age of seven years, it is undoubtedly true that, in dealing with the custody of an infant of tender years, especially if the infant be a daughter, under the general jurisdiction of the court, the chancellor would, in general, award the custody to the mother (if not restrained by proofs of unfitness), at least temporarily, and might also, as an incident to such decree, require the mother’to permit the father reasonable access to the child, under proper conditions and restrictions. 2 Story Eq. Jur. § 1341 a.

But the question remains whether the undoubted jurisdiction of the court is properly invoked by the bill filéd in this cause.

In early English eases it was made a question whether the judgment of the lord-chancellor could properly be exercised upon a petition or should be invoked by bill. Ex parte Hopkins, 3 P. Wms. 152; Eyre v. Countess Shaftsbury, 2 P. Wms. 103. ■ Mr. Pomeroy asserts that the acquisition of jurisdiction' depends on the infant being made a ward of the court, and that such status arises from the infant being brought-, before the court, as ■ a party, in some suit or proceeding. Pom. Eq. Jur. § 1305.

The present bill does not make the infant a party. It' does not seek a decree fixing the custody of the infant during minority. It impliedly admits that the defendant, the infant’s mother, is a proper person to have and retain its custody. It seeks a mandatory decree, operative upon the defendant alone, regulating her conduct in respect to such custody.

I have not been referred to, nor have I been able to discover, any precedent for such a bill. The relief sought is properly a mere incident to a decree fixing the custody of infants, and so appears in precedents of decrees. 3 Dan. Ch. Pr. app. 2296; 2 Seton Dec. 714. Upon a petition or bill bringing the infant into court, or upon a habeas corpus under the act of 1902, above cited, I have no doubt that, if I discovered that this child should be committed to the custody of the mother, I might require her to permit the father to have access to the child at proper times and under proper restrictions. But as my power to act depends upon the infant being before me, I think that tire incidental relief sought by this bill cannot be granted.

The bill must be dismissed.


author: Pitney, Y. C.

text:
    John Whitehead et al. v. The Commercial Building and Loan Association.
    [Filed January 26th, 1903.]
    1. Where a building association becomes insolvent before maturity of the stock of a borrower, who has given it a mortgage conditioned for payment of the principal by the accumulation of funds of the association making the stock equal to the mortgage, the mortgagor is not entitled to credit on the mortgage for all premiums and dues paid by her, the assets not being sufficient to'allow each stockholder and mortgagor to be thus treated.
    2. One whose mortgage is held by an insolvent building and loan association is entitled to credit thereon for interest she has paid it, to be paid to the holder of a prior mortgage, and which it has not so paid, where allowance of such credit will not produce any inequality in the final distribution of its assets.

      On petition for instructions.

      Mr. Frederick F. Guild, receiver, pro se.

      Mr. Jaim S. McMaster, conlra.

   Pitney, Y. C.

(orally).

Petition is filed by the receiver of the Commercial Building and Loan Association, the insolvent corporation, for instructions as to what credits are to be allowed to a mortgagor of the association, who applies to the receiver to pay off a mortgage held by the association.

The mortgagor is a stockholder in the association for twenty shares of stock, and is also a borrower. The class of shares of stock of which he is a stockholder have not matured, and were subscribed for in order to qualify the holder to become a borrower; and the mortgage, in the usual form, is conditioned for the payment of the principal by the accumulation of the funds of the association to such a point as to make the stock equal to the mortgage itself.

At the time the mortgage to the association was made there was already a mortgage on the premises for $3,500, held by a third party, and the additional sum of $1,500 was advanced in full by the association, and a mortgage was given for $4,000 to secure both sums—that is, the amount due on the first mortgage and the amount actually advanced by the association. On that $4,000 the interest has been paid monthly, amounting to $30; in addition, fifty cents a month on twenty shares of stock, amounting to $10 per month; and besides this there was paid a premium, or, in common language, a shave, of $16 a month from the time the loan was made.

The association became insolvent long before the time when, according to the theory of the enterprise, the stock would have been worth enough to pay the mortgage. The value of the shares of stock held by the mortgagor depends upon the amount of accumulated assets due to the payment of the monthly dues on the shares of stock, ancl the monthly premiums, over and above the interest; from which accumulation must be deducted the expenses of managing the association and the losses due to bad loans.

íhe mortgagor, in ascertaining the amount due on her .mortgage, claims a credit for the whole amount of premiums and dues which she has paid. In answer to this demand the receiver states that the assets are not sufficient to enable him to deal with each mortgagor and stockholder on that basis; that the result of so doing would be to work inequality among the stockholders. In other words, the result would be an unequal division of the assets among the stockholders.

In support of her claim the mortgagor refers to the case of Weir v. Granite State Provident Association, 11 Dick. Ch. Rep. 234, decided by Vice-Chancellor Reed. That case is apparently precisely in point, except that there the bonus, or shave, was deducted at the time the loan was made, instead of being paid monthly, as in this case. But nevertheless I am of the opinion that the point here raised was apparently not involved in the Weir Case. It certainly was not considered by the vice-chancellor. He does not consider the case of a deficiency of assets to enable the receiver to treat all the mortgagors and stockholders in the way there adopted. Eor that reason I think that I am not bound to follow that case in the present instance. The true rule to be applied in a case like this, as I think, is to allow the mortgage to be redeemed only upon paying the whole amount of principal and the few dollars of interest that may be in arrears, reserving to the mortgagor and stockholder the right to share in the surplus assets of the association, when they shall be finally ascertained, upon equitable principles.

One other small matter is submitted. It appears by a statement of the receiver that the association never became the owner of the first mortgage, but, as the interest was paid by the mortgagor, the association paid the same to the holder of the first mortgage; that that payment of interest stops at the last semiannual payment due on the first mortgage, which was in June last, and that the monthly payments of interest to the association have continued up to about the time the association failed, so that the association has actually received from the mortgagor interest properly applicable to the first mortgage, which it has not paid over; and the receiver asks for instructions as to whether he should pay these few dollars of interest on the first mortgage out of the funds of the association, or, in other words, allow the mortgagor that much. He says the doing of that will not, in his judgment, produce any inequality in the final distribution of the assets of the association.

I therefore authorize him to include in his credits to the mortgagor the amount of interest which she has paid over and above what the association has paid on the first mortgage.


text:
    Louis Gilbough and Alfred P. Vredenburgh v. West Side Amusement Company.
    [Submitted November 10th, 1902.
    Decided November 15th, 1902.
    Filed January 26th, 1903.]
    The noise caused by the shouts, cheers and stamping of feet of spectators at Sunday ball games, even though constituting a public nuisance, which may be dealt with as such, will be enjoined at the suit of individuals living in the neighborhood; it being such as to appreciably disturb their rest and quiet.
    On motion for injunction. Heard on bill and affidavits and answering affidavits.

      Mr. Elmer W. Demarest, for the complainants.

      Mr. William II. Speer, for the defendant.
   Pitney, Y. C.

This is an application for an injunction to restrain the making of noise, which it is alleged renders the dwellings of the complainants, at certain times, uncomfortable to an unlawful degree.

Before going into the facts of the case it may be well to allude briefly to the state of the law on the subject.

That mere noise may be so great at certain times and under certain circumstances as to amount to an actionable nuisance and entitle the party subjected to it to the preventive remedy of the court of equity is thoroughly established. The reason why a certain amount of noise is or may be a nuisance is that it is not only disagreeable, but it also wears upon the nervous system, and produces that feeling which we call “tired.” That the subjection of a human b.eing to a continued hearing of loud noises tends to shorten life is, I think, beyond all doubt. Another reason is that mankind needs rest and sleep, and noise tends to prevent both.

But then noise is one of the necessary accompaniments of modern civilization, and men as social beings must of necessity subject themselves to whatever annoyance reasonably arises out of all these necessary and useful operations of society, which do, necessarily, produce more or less noise. The ordinary hum of machinery, the noise of vehicles propelled along the public highways, and the like, are examples of this noise. And in considering whether a noise amounts to a nuisance, the question whether or not it is made for-a necessary or useful purpose is always taken into consideration. Sometimes the language is “lawful or unlawful purpose;” and a noise which, if made to answer some useful purpose, might be held to be not a nuisance, will, if used for an unlawful or unnecessary purpose, be held to be a nuisance.

So the time when a noise is made is also to be taken into account. Mankind needs sleep for a succession of several hours once in every twenty-four hours, and nature has provided a time for that purpose, to wit, the nighttime, and by common consent of civilized man the night is devoted to rest and sleep, and noises which would not be adjudged nuisances, under the circumstances, if made in the daytime, will be declared to be nuisances if made at night and during the hours which are usually devoted by the inhabitants of that neighborhood to sleep.

Then, again, the experience of mankind has shown that in addition to the ordinary rest which the workingman—whatever may be the nature of his work, mental or physical, or both—is supposed to obtain'each night, he needs occasionally a whole day of complete rest, and this day, by common consent, has been fixed by Christian people to be Sunday, or the first day of the week. In order to maintain that Sunday is a day of rest we need not go into the question of its divine origin or rely upon the truth of the inspiration of the Bible. The fact is that there is abundant ground to believe that the rest of one day in seven may have arisen out of the actual wants of mankind, irrespective of any divine command. Therefore, by. common consent, quite independent of any statutory regulation, it may be considered as settled that mankind is entitled to one day in seven for rest and quiet.

But, in addition to that, we have the sanction of what are called the Sunday laws of this state and of many other states, which positively prohibit all work and labor and amusements on that day. To that, again, an exception was made as to all those occupations which are deemed necessary, sometimes called works of necessity and mercy. People travel about on Sunday, and, of late, railroad trains are permitted to run on Sunday; domestic animals have to be provided for, and food for the use of man must also be provided on that day. These, however, are exceptions to the general rule that all business must cease on Sunday. In obedience to this legislation all ordinary business, including all public business, actually does cease on Sunday.

Eor these reasons it may be properly held that noises which would not be declared to be nuisances on a week-day are held to be nuisances if made on a Sunday, because they have the effect of disturbing that quiet and rest which the citizen, wearied with six days of labor, is entitled to have for his rest and recuperation; and he is entitled to it not because the Sunday laws have declared the making of such noises to be unlawful, but because they ■do substantially interfere with his quiet enjoyment of the Sunday as a day of rest. But, on the other hand, the fact that such noise not only does not tend to any useful purpose such as I have mentioned, but is, in fact, forbidden by the laws of the land, takes away from the producer of the noise any excuse whatever therefor.

Turning now to the facts in the present case. The complainants, Gilbough and Vredenburgh, are residents of the city of Bayonne, in the county of Hudson. Their dwellings are situate near each other, in the residential portion of that city, near Newark bay, at its junction with New York harbor, and the bill is filed on behalf of themselves and other residents of the city.

The defendant is a corporation under the name of the West Side Amusement Company, and its objects, which are set out at great length in its articles of incorporation, are indicated by its title.

In the month of August last the defendant purchased several lots of land lying in a body and making a block about four hundred and fifty feet square, and situate from ten to twelve hundred feet from complainants’ residences, and enclosed the same by a high board fence, and erected in one comer thereof a grandstand containing seating accommodation for several thousand spectators. On each successive Sunday in September and October it procured to be assembled there a large number of young j>ersons, not only from the immediate neighborhood, but from, the adjoining towns and cities, for whose admission it charged twenty-five cents each, and as an attraction for the assembling of these persons, procured to be played base-ball games. The persons who assembled were young, hilarious and enthusiastic, and when excited by witnessing the base-ball games, indulged in loud shouts and stamping on the steps of the grand-stand, thereby irrodueing a noise so loud that it was heard at the complainants’ houses, and at other parts of the city much more distant than those houses from 'the defendant’s grounds.

That the noises so produced, if loud enough to appreciably disturb complainants’ rest; constitutes a nuisance against which the complainants are entitled to relief in this court, follows necessarily from the principles above laid down.

Some of the authorities applying more directly to the case are Walker v. Brewster, L. R. 5 Eq. Cas. 25 (1867). There Vice-Chancellor Wood (afterwards Lord Hatherly) reviews the earlier English cases up to that time, including Soltau v. De Held, 2 Sim. (N. S.) 133. Another case is Inchbald v. Barrington, L. R. 4 Ch. App. 388 (1868). The court there said: “We have now before us evidence of the plaintiff and his wife, corroborated by 'that of seven independent witnesses, showing that the noise of the performances was heard inside the houses to such a degree as materially to interfere with the comfort of the inhabitants, according to ordinary habits of life. This evidence is uneontradieted, and I am of opinion that it establishes a case of nuisance calling for the interference of this court. * * * It is clear, however, from the evidence before us, which was not before Lord Cairns, that the music and noises in the circus were heard distinctly all over the plaintiff's house for several hours every night. This was something materially interfering with the comfort of the inhabitants, according to ordinary habits of life; and I am of opinion that the injunction in the suit of Inchbald v. Barrington was rightly granted."

In this country we have Tanner v. Trustees, &c., 5 Hill 121. There Judge Cowan reviews all the authorities up to that date, and holds that a bowling-alley is a nuisance per se, by reason of its tendency to attract and accumulate a large number of disorderly persons. Snyder v. Cabell, 29 W. Va. 48, held that a skating-rink was a nuisance

These were all cases of noises made on week-days.

The latest case on the subject of base-ball games in New Jersey is Cronin v. Bloemecke, 13 Dick. Ch. Rep. 313, decided by Vice-Chancellor Emery.

The general subject is dealt with by Chancellor Williamson in Davidson v. Isham, 1 Stock. 186, and by Chancellor Zabriskie in Ross v. Butler, 4 C. E. Gr. 294, and again in Cleveland v. Citizens Gas Light Co., 5 C. E. Gr. 201.

The only remaining question is whether the affidavits presented by the complainants on this motion establish the proposition that the noise from the amusement grounds reached the complainants' houses in such volume as to disturb their rest and quiet.

Mr. Gilbough swears that on the afternoons of September 7th, 14th and 21st and October 12th

“the noise made by the players and persons attending the games, and apparently caused by the cheers and stamping of feet of the spectators, has been so great as not only to be plainly and distinctly heard at my home, but so great as to disturb the enjoyment of my home by myself and the members of my family and also to cause a physical annoyance.”

He also swears that the continuation of such noises on Sunday afternoons seriously affects the value of his property.

Mr. Vredenburgh swears that on the same afternoons

“the noises caused by the shouts, cheers and stamping of feet by the spectators in attendance at the games have been so great as not only to be heard plainly at my residence, but it annoyed myself and family in the enjoyment and comfort of our home, and in fact became a physical annoyance. While I believe myself to be a person of ordinary temperament and sensibility, these noises have been so great in volume as to have become a nuisance.”

He also swears to the depreciation in value of his property.

Mr. Green swears as to the boisterous and unruly character of the passengers who arrived at the station near the defendant's grounds, saying:

“All the while this crowd was alighting from the train, and until the train started, there was great noise caused by the shouting of these people. From the appearance of the crowd I imagined that either a prize fight or horse race was about to take place.”

Mr. Martin R. Cook swears that he lives near the complainants, and characterizes the noise as follows:

“The noise of which caused by shouts and the stamping of feet has been such as to make, it plainly heard at my residence to such an extent as to disturb the comfort and quiet enjoyment of my home by myself and the members of my family.”

Mrs. Leman swears that she lives in the immediate neighborhood of the complainants, and that

“On Sunday, the 14th day of September, I was confined to my bed by illness and was physically disturbed with tumultuous noises coming from the players and persons attending- the base-ball game at the grounds of the West Side Amusement Company. My residence is opposite that of Martin R. Cook. These noises began at about 3-.45 in the afternoon and continued until 5 :30. o’clock, and had been repeated on other Sundays as well as that above mentioned, during September and October. The noise coming from these grounds has not only been sufficient to disturb me while I was ill and confined to my bed, but have generally disturbed the residents of the neighborhood in which I live.”

Mrs. Ellen Humphreys swears that she owns considerable property in the neighborhood and lives near the complainants. She continues:

“The noise caused by cheers, shouts and the stamping of feet is terrific and almost continuous while the games are in progress, frequently varying in volume and often resembles the sounds of near thunder. Upon the occasions when these games were in progress, the members of my family, as well as myself, have been so disturbed in the enjoyment of the comfort of my home as to make the nuisance become almost a physical annoyance.”

Frank Lindner swears that he lives nearer to the defendant’s grounds than the .complainants, and continues as follows:

“On Sunday afternoons of September 7th, 14th and 21st, and October 12th, games of base-ball were played on the grounds of the above-mentioned company. These games have been attended by large crowds of people estimated from 2,500 to 3,000, and the noises at the times these-games have been in progress have been terrific, and apparently caused by the yelling, cheering and shouting of the crowds and the stamping of feet of persons seated on the grand-stands erected on the grounds. The noise caused has been so great as to destroy the peace, and comfort of those-residing in the vicinity and to prevent my family and myself from the quiet enjoyment of my property.”

Charles E. Spencer, who lives farther away from the defendant’s grounds than the complainants, swears-:

“The noises apparently caused by the shouts, cheers and stamping of feet by the spectators -h-a-s been so great as to be plainly heard at my place of residence and destroy the. comfort of myself and the members of my family.”

Mrs. Hammer lives nearer the defendant’s grounds, and swears:

“These games have been attended by large crowds of people, and the noises at the times these games were being played have been terrific and apparently caused by the yelling, cheering and shouting of the crowds and the stamping of feet of persons seated on the grand-stand erected on the grounds. The noise caused has been so great as to destroy the peace and comfort of those residing in the vicinity, and to prevent my family and many of my boarders from the quiet enjoyment of Sunday. My mother was lying ill on Sunday, September 21st, and these noises distinctly disturbed her and adlded greatly to her suffering. I have found the noise on these occasions to be almost unbearable.”

Frank Thompson lives farther away from the grounds than the complainants, and' swears as follows :

“When these games are in progress the noise heard at my house is terrific, and was so great as to disturb the comfort of my home for myself and the members of my family. The noises coming from these grounds, on the occasions when games are being played, have been so great as to be plainly heard for more than a half mile distant therefrom, and to such extent that people residing within half a mile from the grounds have been greatly disturbed in the enjoyment of their homes.”

The Rev. Mr- MacGregor swears as follows:

“On Sunday, September 14th, while returning from Sunday-school, I heard a great noise. These noises I continued to hear while endeavoring to quietly enjoy rest while sitting on the veranda after returning home. A little later, while going to visit a sick young man and while walking to and from on Fourth street, Avenue D and First street, I continued to hear these noises. I found that the cause was due to a game of base-ball which was being played on the ground of the West Side Amusement Company. On the afternoon of September 21st I was in my study in the Bergen Point Baptist Church, between the hours of four and five-fifteen, great 'noise was again heard which greatly distux-bed me. So great was the noise that I was obliged to close the windows of my study in order to have quietness. Similar noise was also distinctly heard on Sunday, October 12th, which I heard while taking a walk on Fourth stx-eet as well as returning on Fifth street.”

He further swears that a mass-meeting was held, by the citizens of the neighborhood to take measures against the nuisance at defendant’s grounds, and that after the meeting he had a conversation with the manager of the defendant association, a Mr. Ryan, and told him that the meeting had passed a resolution to abate the nuisance, and that Ryan told him that the games would continue; and that he told Ryan that legal steps would be taken, if necessary, to put an end to the nuisance, and that Ryan told him that they would fight it.

Cornelius W. Conover, who resides more than a quarter of a mile distant from the defendant’s grounds, swears that on the afternoons in question

“I was at my home but greatly disturbed with loud noises which were made by the spectators and players attending the game upon the grounds of the West Side Amusement Company. Such noises were caused by cheering, so far as I could determine from their nature, but were so great as to physically annoy me and disturb the enjoyment of my property. I believe I am a person of ordinary sensibility, but these noises were so great as to create a positive annoyance at my home.”

Numerous other witnesses swear to the same effect.

Against these affidavits are several produced by the defendant, made by persons who live near the grounds, to the effect that the noise, although heard by them, does not annoy them. Their general tendency is to minimize the volume and general effect of the noise.

It was said by Vice-Chancellor Knight-Bruce, in Walter v. Selfe, 15 Jur. 416 (at p. 419), who was there dealing with the question of injury from the gases of a brickyard, that the point to be decided was: “Ought this inconvenience to be considered, in fact, as more than fanciful, or as one of mere delicacy or fastidiousness—as an inconvenience materially interfering with the ordinary comfort physically of human existence, not merely according to elegant or dainty modes and habits of living, but according to plain, sober and simple notions among the English people ? And I am of opinion that this point is against the defendant.”

This canon has been adopted by many subsequent judges in that country and in this, and was quoted with approbation by Vice-Chancellor Wood in Soltau v. De Held, supra.

In the class of cases of nuisance arising out of lawful trades the question of degree is one of great importance. Some trades are so noisy as to require their actual prohibition at all times from the. neighborhood of any dwelling. Others, producing less nqi.se, are prohibited only in the nighttime, on the principle that while they do more or less disturb during waking hour's, they are still not intolerable during those hours, and being carried on for a useful purpose, must be endured to.that extent. ';

But I think that the question of degree applies .with very little, if any, force to the case of noises made on Sunday; apd the same may be said of the distinction between an over-sensitive and highly-nervous person and the average person spoken of by Vice-Chancellor Knight-Bruce. As before remarked, there can be no sort of excuse for the noises proven in this case; and if they do appreciably disturb the rest and quiet of an ordinary person, .they must be enjoined when complained of by the imdividual. : '

The fact that they may amount to a public nuisance, and may be liable to be dealt with as such, does not prevent this court from giving a remedy to the individual who is especially injured thereby. Cronin v. Bloemecke, supra.

So with regard to their quasi criminal character. This court does not restrain an action simply because of its character in that regard, nor does it refrain from so doing on that account.

Whenever a private right is invaded and this court is called upon to protect it, and a proper case is made out, this court is bound to give the remedy, without regard to the criminal, or quasi criminal, character of the act complained of.

In fact, the public remedy by punishment for the commission of a criminal act is not a remedy upon which the private citizen can with safety rely, or one upon which he is bound to rely.

A careful reading of the affidavits leads me to the conclusion that the noise in this case does appreciably disturb the rest and quiet of the complainants on Sunday, and of other persons in like situation, and is greater than they arfe bound to endure.

For these reasons I will advise an order that the defendant, pending the suit and until the further order of the court, be restrained from permitting any noise or noises to be made upon its premises on Sunday which shall disturb the complainants or their families in the manner and to the extent above stated.


author: Pitney, V. C.

text:
    Abraham Leipziger v. Albert Van Saun and Isabel W. Van Saun.
    [Submitted May 19th, 1902.
    Decided September 20th, 1902.
    Filed January 26th, 1903.]
    Bill filed August 3d, 1901, by mortgagee against mortgagor, to foreclose mortgage dated January 2d, 1901, -to secure payment of $24,000 in one year, with interest payable semi-annually, with usual clause giving right to mortgagee to declare principal due on failure to pay the interest within thirty days after maturity. The right to foreclose, based on failure to -pay interest due July 2d, 1901. Defence, usury in taking $1,200 as bonus out of the principal of $24,000 on the .delivery of the mortgage.—Held, (1) on the evidence the defence of usury is established; (2) bill is prematurely filed, because (a) by the terms of the second section of the .act suit on a usurious instrument must be based! upon the instrument itself and subject to its limitations as to maturity,; (6) tlie‘statute forbids the accrual of Interest and renders so much of the contract as provides for it void; (c) the sum of $1,200 retained out ó'f'tbe,’principal at the delivery of the mortgage must be- applied to •'the" payment of interest, if any accrues, hence the mortgagor was under no liability, legal or equitable, to pay Interest on July 2d, 1901; (3) dictum of Chancellor Runyon in Mahn v. Hussey, 1 Stew. Eq. 546, disapproved and not followed.
    Ou bill to foreclose a mortgage on land. On final Rearing on pleadings and proofs taken before a master. Defence, usury, by reason whereof nothing was due at the date of the filing of the bill.

      Messrs. Cohn & Cohn, for the complainant.

      Mr. Henry Smith, fox the defendants.
   Pitney, V. C.

The bill, filed August 3d, 1901, is based upon a bond and mortgage, dated January 2d, 1901, to secure $24,000 in one year, with interest payable semi-annually. The bond contains what is called the thirty-day clause, whereby if the interest is not paid at maturity or within thirty days, thereby the whole principal sum becomes due.

The bill does not set forth this clause in the bond, neither in words nor by its purport and effect. It simply describes, in the usual phraseology, a bond and mortgage to secure $24,000 in one year, with interest payable semi-annually; nor does it allege a default at the end of six months, namely, July 2d, 1901, but simply states, in the language used' in a bill on a mortgage long overdue, that the whole of the principal and interest is due, &c.

The answer takes no notice of this omission in the bill, but, after admitting the execution of the instruments, sets out in detail the facts constituting what is claimed to be a usurious agreement, and insists there was no default at the end of six months, and that the complainant is not entitled to maintain his suit.

The usurious agreement set out may be stated thus: That the deféndant, being desirous of procuring a loan of $24,000 on his real- estate in the city of Paterson, applied to the solicitors of the complainant, Messrs. Maurice and David Cohn, practicing lawyers in Paterson, to procure him such loan; that they undertook to do so from a client in New York City, but stated that the cost to defendant of procuring the loan would be $1,500, of which $1,200 would go to the lender and $300 to themselves for their services and expenses in procuring the loan, making searches, preparing the papers, &c.; that said Cohn & Cohn did procure the loan of $24,000 and deducted therefrom $1,500 for the purposes just stated.

Tlie proofs were adduced before a master, and there the complainant assumed the burden of disproving the defence of usury, without awaiting any proof of it by the defendant. In attempting to make this negative proof the complainant sufficiently exposed, so to speak, his flank as to enable the defendant to bring before the court the true history of the transaction.

The defendant is living upon a rapidly-disappearing remnant of a comfortable inherited fortune and the hope of realizing upon some speculations; which appear not as yet to have borne fruit.

The real estate covered by the mortgage consists of two parcels, one belonging to the husband, the other to the wife, and was already mortgaged for $16,000, with arrearages of interest, and the mortgagee was pressing for his money. The defendants wished to pay this mortgage and several small debts, and to realize some surplus for present and future use.

The husband, in the last week of December, 1900, applied to Messrs. Cohn & Cohn for a loan. They said that they had a client in New York who might loan the amount, but added, according to Mr. Yan Saun’s account—which I adopt as the more reliable'—that the lender would require $1,300 as a bonus on the loan, and they would require $300 for their services in procuring the loan, making the necessary searches, preparing and recording the papers.

On Tuesday, January 2d, 1901, the bond and mortgage were prepared by Cohn & Cohn and executed by the defendants. At the same time Cohn & Cohn prepared and caused Yan Saun to execute an agreement as follows:

“In consideration of legal and other services rendered and to be rendered in negotiating a mortgage loan of $24,000 on Apollo Hall, on Van Houten street, and on my residence, corner 15th avenue and 25th street, I, Albert Van Saun, do hereby expressly promise and agree to and with Oohn & Oohn, attorneys-at-law, to pay them $1,500, said sum to cover fees for professional services, commissions and all expenses incurred l>y them in malmng searches of title of hoth properties, drawing, executing and recording all necessary papers, and placing the proper revenue stamps on same;. said sum of $1,500 to be paid to them upon the receipt by me of the sum of $24,000. The mortgage to be executed by me and wife is to be for one year and at six per cent, per annum.
“Witness my hand and seal the day and year first above written.”

. They swear that the true agreement was.truly set forth in that writing. Nevertheless I believe the testimony of Mr. Yan Saun that the Cohns verbally stated to him that $1,200 of the $1,500 was to go to the mortgagee.

The next day, to wit, the 3d of January, 1901, Cohn & Cohn deposited to their credit in bank in Paterson the check of the complainant, drawn on a New York bank, for $24,000, and out of it paid the old mortgage, the taxes, &c., and, after deducting the sum ol $1,500, gave to Van Saun a check for the remainder. On the same day they deposited to the credit of their father, Marcus Cohn, in his bank in Paterson, the sum of $1,500, thereby paying away every cent of the $24,000 received from the complainant. On the same day—January 3d, 1901—Marcus Cohn made the aggregate of his own two bank accounts in two banks in the city of Paterson up to $24,000, and drew.two checks, one for $10,000 on one of his banks and the other for .$14,000 on the other bank, to the order of Mrs. Pauline Goldstein, of the city of New York, who was the sister-in-law of the complainant, Leipziger, which two checks were deposited on the same day to Mrs. Goldstein's credit in her bank in New York City ;' and on the same day she drew her check on her bank in New York City to the order of the complainant for $24,000, and he, on the same day, deposited that check to his credit in his bank in time to meet the check which he had given to Cohn & Cohn for the same amount.

Mr. Marcus Cohn, the father of the solicitors of the complainant, in order to make his account good, borrowed several thousand dollars from a bank in Paterson oh collaterals.

, It does not appear whether or not the $1,500 deposited by the solicitors of the complainant to their father's credit on the 3d of January was necessary in order to make his account up to $24,000.

The defendant had great difficulty in bringing out these facts before the master. He was obliged to subpoena the officers of the bank and to resist motions made to one of the judges of this court to set aside the subpoenas issued for that purpose. In short, he was embarrassed in every imaginable way in proving the case as above stated, but he did succeed in proving it.

Mrs. Goldstein, Mr. Leipziger and Mr. Marcus Cohn were each piit on the stand, and each -attempted to show that the transactions between them were those of a real loan; that Leipziger applied to Mrs. Goldstein for a loan of $24,000, and gave her his notes for it, and that she applied to Mr. Marcus Cohn, in Paterson, for the loan of $24,000, and that she g'ave her note to him for. it, and that interest was paid upon them, and that some of the principal has been paid; and various facts were stated-tending to show that the transactions were real. But, in my judgment, that attempt has signally failed, and I think it is too clear for argument that the 'whole proceeding ivas a mere makeshift to cover up a usurious loan made by Marcus Cohn to Mr. Van Saun, and that Marcus Cohn received a usurious'bonus upon the loan.

On this pinch of the case an attempt was made by tire three Cohns—father and two sons—to show that the $1,500 were in good faith the money of the two sons;, and that it was deposited by them to their father’s credit for the purpose of enabling him to loan it for them; and various securities were mentioned, and I believe produced, by the father, which he stated represented a loan of this $1,500, or some portion of it, for the benefit of his sons. But a close examination of the testimony satisfies me that all the evidence adduced in that behalf fails to sustain that theory. I do not deem it worth while to go into the details.

I find then; as a matter of fact, that Leipziger was a mere figurehead for the elder Cohn, and that the loan was made by him to Mr. Van Saun at a usurious rate of interest, and that the usury set up by the answer is proven.

The only question which has given me any trouble is as to the effect of the usurious contract upon the present suit. The theory of the defendant is that the effect of the statute is to reduce the loan to $22,500, without interest, so that no interest ever became due on it, and that there was no forfeiture by reason of the nonpayment of the interest on the 2d of July, 1901. On the other hand, it is argued that for the purpose of determining when the principal is due the actual terms of the bond must be considered. The instrument itself was destroyed in the great Paterson fire, and we' can only refer to the language found in the record of the mortgage, and that, after providing for the payment of the interest at six per cent, semi-annually, contains this clause:

“And It is hereby expressly agreed that should any default be made in the payment of the said interest, or any part thereof, on any day whereon the same is made payable, as hereinbefore expressed, and should the same remain unpaid and in arrear for the space of thirty days, that then and from, thenceforth, that is to say, after the lapse of the said thirty days, the aforesaid principal sum of money, with all arrearage of interest thereon, shall, at the option of the said Abram Leipziger, his executors, administrators or assigns, become and be due and payable immediately thereafter, although the time above limited for the payment thereof may not then have expired, anything thereinbefore contained to the contrary thereof in any wise notwithstanding, as by the said bond or obligation and the conditions thereof, reference being thereunto had, may more fully appear.”

The presumption is that this is the language of the bond.

The first section of the Usury act (Gen. Stat. p. 3703) declares

“That no person or corporation shall, upon contract, take, directly or indirectly, for loan of any money, above the value of six dollars for the forbearance of one hundred dollars for a year,” &c.

The second section, as it stood until the year 1864, rendered absolutely void all instruments upon which a greater rate than six per cent, is taken or reserved.

In 1864 that section was repealed, and the second section of the present act adopted, which provides that in an action at law or in equity to enforce any usurious instrument (describing them) recovery may be had for the amount originally advanced, without interest or costs.

The amount of money actually advanced here was $22,500, ox, considering $300 as a legitimate fee to the solicitors for their services, $22,800. Now the instrument provides for the payment of. interest at the rate of six per cent, on $24,000. . That, it seems to me, is plainly a contract for the payment of inore than $6 for the forbearance of $100’ for a year. Then $1,200, at least, were “taken,” in the sense in which that word is used in the first section of the act, by the lender from the borrower, as interest over and above that provided for in the contract. The result is that the - whole transaction, so far as the contract for the payment of interest goes, was expressly forbidden and rendered unlawful by the first section of the act.

Now, it is not necessary to cite authority for the position that no right of action of any kind arises out of an illegal contract of that character—that is, a contract declared to be unlaAvful by statute.

Further, if we look at the contract in the aspect, most favorT able for the lender, and treat it as one to pay interest semi-annually on $24,000, the sum of $1,200 retained out of the $24,000 nominally loaned must be credited as a payment in. advance bn account of. interest. ■.. ■ ,

Again, the second section, as we have seen, expressly provided that in any action at law or. in equity brought to enforce any usurious instrument, only the amount actually advanced, without interest, may be recovered. This prevents any interest from accruing on such an instrument.

This view disposes of the possible conception that the effect.of the statute is to entirely destroy the instrument and give the lender the right at once, without regard to the time fixed for payment in the instrument, to bring suit and recover the amount actually advanced. The statute will not bear such a construe^ tion. The only remedy given him is an action on the instrument, and hence it must be subject to the terms of the instrument, except so far as relates to interest.

It follows that the mortgagor was under no obligation,, legal or equitable, to pay the interest which by its terms accrued on the 2d day of July, 1901, on the bond and mortgage here in question. His contract so to do was,.as we have seen,.utterly void.

The effect upon the contract here in question of the two sections of the act just cited, taken together, would seem to be, to reduce it in law and in, equity to a mere contract to pay a sum of money actually advanced, in one year, without interest..

If the foregoing-reasoning is sound, then I am unable to see how the failure of the mortgagor to pay the interest reserved by the contract on the 2d of July can be treated by this court as having the effect of accelerating the time when by its terms the principal sum became due. The part of the contract relied on to produce that effect is absolutely void.

This result is not in accord with what was said by Chancellor Runyon in Mahn v. Hussey, 1 Stew. Eq. 546 (at p. 547, near the bottom). He there -uses this language: “If, in fact, no interest whatever were recoverable on the mortgage, that fact would not relieve the defendants from the consequences of • the default. The default would still exist, notwithstanding the ’fact that the interest is not recovferablc by suit.” But that was a mere-dictum and-not at all necessary to the decision of the'case before him. This will appear by a careful examination of. the opinion. The mortgage there being enforced was; given to secure the aggregate of three separate and distinct loans of different dates; the first two had been secured by separate mortgages; the principal monejr secured by the mortgage in- suit was- made payable in five years from date, with interest • semi-annually, with the usual clause making it mature in ease the interest was not paid promptly. The bill was filed in 1875, more than two years after the date of the mortgage, and ‘was based on the default in the payment of the semi-annual interest secured by it. The first mortgage was given in 1868, five years before the mortgage in suit. Usury was found only in that first mortgage. So that it seems quite probable that the principal of the usurious loan had, by the terms of the usurious mortgage, which are not given in the opinion, been due a long •time beforé the filing of tHe bill before the court. If this be so, then the question which was dealt with by the learned chancellor was not at all involved, and I am not, therefore, bound by the dictum as a decision-. But I am bound to consider the reasoning of the learned chancellor with deference and respect, and in so doing I am unable to adopt it.

The result is that the bill in'this cause was prematurely filed, and should be dismissed, with costs, without prejudice to another suit. I will so advise.


text:
    The New Jersey Title Guarantee and Trust Company v. Cone & Company and Belle Feldmark.
    [Submitted September 29th, 1902.
    Decided October 3d, 1902.
    Filed January 20th, 1903.]
    1. Premises sold under a senior mortgage, subject to two years’ taxes, were purchased by the mortgagee .foreclosing, and did not bring enough to satisfy the mortgage. A receiver appointed at the instance of a junior moftgagee.reported funds in hand, and. asked for discharge.—Held, that the taxes being á lien on the land at the time it was purchased, the purchasing mortgagee'st'ood'in the same relation as any stranger, and was not entitled to have the amount derived from the receivership applied to payment of taxes.
    2. After a senior mortgagee began foreclosure proceedings, a junior-mortgagee applied for and secured the appointment of a receiver, without any order as to the application of funds that might be derived from the receivership. The premises were purchased by the senior mortgagee for less than enough to satisfy his mortgage.—Held, that he was entitled, as against the junior mortgagee, to have funds derived from the receivership applied to the deficiency, and the junior mortgagee was not entitled to any priority as to such fund by securing the appointment.
    On motion to appropriate moneys in the hands of receiver of mortgaged premises.

      Mr. Charles L. Corbin, for the complainant. •

      Mr. Charles E. Hendrickson, Jr., for the defendant Eeldmark.
   Pitney, V. C.

The complainant filed a hill to foreclose a first mortgage on land and made the defendant Mrs. Eeldmark a party as second mortgagee. She applied to the court to appoint a receiver of the mortgaged premises, which was done. The order appointing is the nsnal one adopted in New Jersey, and does not indicate any disposition which shall be made of the moneys collected by the receiver. The defendant Eeldmark did not answer, and no decree was entered in her favor, though it is not disputed that her mortgage is valid and that slie would be entitled to any surplus money over and above the amount due the complainant.

At the time of the sale the premises were subject to two j^ears’ taxes, amounting to a considerable sum, and when sold were purchased by the complainant and failed to produce enough to satisfy the complainant’s mortgage by $80.11?.

The receiver has filed his report, showing a considerable sum in his hands, and asks to be discharged.

Application is now made on behalf of the complainant to pay—first, the deficiency on his mortgage, and second, the taxes in arrear. This motion is resisted by Mrs. Eeldmark, who claims that she is entitled to the whole of the fund in the receiver’s hands.

With regard to that part of the motion which asks that the arrears of taxes be paid out of the fund in the receiver’s hands, I think it must fail. The complainant’s mortgage did not contain any clause authorizing it to pay taxes and add them to the mortgage; and if it had contained such a clause, I do not wish to be understood as intimating that it would have made anjr difference on the present motion. Such a clause would probably be construed as simply authorizing it to increase the amount due on its mortgage by actually paying the taxes, and without such actual payment before decree no allowance can be made therefor. In the present situation the taxes were a lien upon the premises at the time they were purchased, and the complainant stands in the same situation in that regard as would a stranger purchasing the premises. I can perceive no right which the complainant can have to have the amount of that lien reduced at the expense of a junior encumbrancer. The presumption is that if there had been no encumbrance for taxes at the time of the sale the property would have produced just so much more, and that increase in the product would have inured to the benefit of the junior encumbrancer. That part of the motion must be denied.

The other part of the motion, namely, to pay to the complainant the sum of $80, the deficiency due on its decree, stands upon an entirely different footing. I undertsand the general rule in New Jersey to be that where a receiver of mortgaged premises is appointed in a foreclosure case, to which there are several parties claiming an interest in the premises, it is not usual to determine at the time the order of appointment is made upon what account the money received shall be applied, but to retain it to be applied as each party to the suit shall appear "to be entitled at the final hearing of the cause. The mere fact that the receiver is appointed upon .the application of the second or any subsequent mortgagee, who is a party to the suit, does not give him any superior right to the proceeds of the receivership. This was distinctly stated by Chancellor Williamson in his opinion in the case of Cortleyeu v. Hathaway, 3 Stock. 39 (at p. 42). He there says: “Where, upon the application of a subsequent mortgagee, a receiver is appointed, it is without prejudice to any prior mortgagee or other encumbrancer, and the receiver will be directed to keep down the interest upon the prior encumbrances,” citing authorities.

In opposition to this doctrine the counsel for Mrs. Eeldmark relies on a line of cases in the State of New York, the leader of which is Howell v. Ripley, 10 Paige 43, decided by Chancellor Walworth. But .a careful examination of that case does not sustain the defendant’s contention. In fact, at the outset of his opinion, Chancellor Walworth states the very doctrine'laid down by Chancellor Williamson, in these words: “When a receiver is appointed in a suit he is appointed for the benefit of such of the parties in that suit as it shall afterwards appear were entitled to the fund in controversy, but not for the benefit of strangers to the suit.” . In that case there were several successive mortgages, and a junior mortgagee filed a bill to foreclose his mortgage without making any prior mortgagee a party thereto, and in that suit a receiver was appointed, who collected certain rents and profits. Subsequently the first mortgagee filed a bill to foreclose his mortgage, making the subsequent mortgagees parties, including the one who had filed a previous bill, and obtained an order in his suit appointing the same person receiver of the rents and profits who had been appointed in the prior suit of the sub-, sequent mortgagee. The premises were sold under the decree, of the first mortgagee, and the proceeds of the sale left a deficiency in his mortgage. He moved the court that the money in the receiver’s hands should be applied to the payment of that deficiency. The court held that so much of the rents and profits as had accrued and been collected by the receiver prior to his appointment in the suit by the first mortgagee should go to the mortgagee who first brought suit, but that all that was collected after the receiver was appointed in the suit by the first mortgagee should go to him. He there discusses the rights of parties under such circumstances, and shows that if a second mortgagee gets in possession and receives rents and profits he can hold those rents and profits for his own benefit until he shall be disturbed by a suit brought by the first mortgagee. The reason why the first mortgagee was not awarded the rents and profits which were collected by the receiver prior to the time the receiver was appointed under the first mortgagee’s suit was that the first mortgagee was not a party to the first suit, and therefore not entitled to any benefit under it. •

The doctrine of that opinion was adopted by Vice-Chancellor Van Fleet in Leeds v. Gifford, 14 Stew. Eq. 465. There the second mortgagee, before suit brought, had been let into possession by the tenant, and after foreclosure by the first mortgagee and sale of the premises, leaving a deficiency upon his mortgage, the latter attempted to compel the second mortgagee to pay to him the moneys which he had received. He failed in that attempt for the reasons stated by the learned vice-chancellor.

The case of Howell v. Ripley, supra, was followed in New York by Post v. Dorr, 4 Edw. Ch. 412, where Vice-Chancellor McCoun indulges in some dicta bearing upon the question; but an examination of the case shows that the question now under consideration was not involved.

The next case in New York is Washington Life Insurance Co. v. Fleischauer, reported in 10 Hun 117. That was a contest between two subsequent mortgagees, defendants in a foreclosure case. There a defendant, the holder of a fourth mortgage, in a, suit to foreclose the first mortgage, moved (without notice to the holders of the second mortgage) for and obtained an order for a receiver of the rents and profits of the mortgaged premises “for the benefit of” the mover. After the property was sold and the second mortgagees found that their mortgage was not reached by the sale, they moved the court to strike out the words “for the benefit of” in this order, and that the rents in the hands of the receiver be paid to them as holders of the second mortgage. This motion was denied in the court below and affirmed in the supreme court,„ on the ground that it was within the principle adopted in the decision of Howell v. Ripley, supra, and within the dictum, of Vice-Chancellor McCoun in Post v. Dorr, supra. The reasoning of the court in the case (10 Hun) is not satisfactory to me, and I should decline to follow it if it were precisely in point, which it is not.

The next case from New York is Ranney v. Peyser, reported, first, in the supreme court in 20 Hun 11, and, on appeal, in 83 N. Y. 1. There, as in the case of Howell v. Ripley, supra, the second mortgagee had filed his bill to foreclose without making the first mortgagee a party, and, by the consent of the mortgagor, had obtained an order appointing himself receiver, in these words :

“That as such receiver, he [plaintiff] have power, which is hereby given to him, to rent and manage said buildings and premises, and to rent the same or any part thereof from time to time for terms not exceeding one year; to collect and receive the rents thereof, and out of the same to keep said buildings insured against loss or damage by fire and in repair, and to pay the ground rent and taxes.”

Subsequently- the first mortgagee brought suit to foreclose his mortgage; the property was sold thereunder, the first mortgagee purchasing at the sale, and a deficiency was found, and he then applied to have the money collected go to the payment of the ground rent and taxes. On an appeal to the supreme court, Judge Barrett, speaking for himself and 'Davis, P. J., and Brady, J., held that upon a strict reading of the order appointing the receiver the receivership was obtained by the plaintiff upon a condition that he should apply the rents and profits to the payment of the ground rent and taxes. The decision, therefore, turned distinctly upon the terms of the order. The court of appeals took a view of the effect of the order different from that taken in the court below. As between the two, I am inclined to think that the view of the court below was the sounder one. But it is to be observed that in that case the receiver was appointed in a suit to which the first mortgagee was not a party, and he could have no standing to claim any part of the-fund, except upon the terms of the order appointing the receiver.

This disposes of all the cases cited in behalf of Mrs. Eeldmark, and I feel constrained to advise an order declaring in accordance with the views first above stated, namely, that the amount due the complainant for deficiency on its mortgage shall be paid out of the fund in the receiver’s hands, after settling his compensation and expenses, and the balance to Mrs. Eeldmark, providing it shall appear, after notice served on the other defendants, that she is entitled to it as against them.

As both parties have succeeded in part and failed in part, there will be no costs.


author: Pitktet, Y. C.

text:
    August Klein et al. v. W. A. Gavenesch Company, an insolvent corporation.
    [Submitted November 4th, 1902.
    Decided November 12th, 1902.
    Filed January 26th, 1903.]
    A -lessor in a lease for a term of years, at a designated annual rental, which-gives the lessor the right of re-entry in case of a failure to pay the rent, is not entitled, on the insolvency of the lessee, to demandl from the receiver the rent accruing under the lease after the receiver quits the premises.

      On appeal from the refusal of the receiver to allow.a claim on behalf of Albert I. Drayton.
    The rejected claim was for $2,535 for rent of the stores known as Eos. 548 and 550 Newark avenue, Jersey City, with.frame stable in the rear, from February 1st, 1902; to May 1st, 1905, at $780 a year, according to the terms of a lease made between the parties on the 21st of April, 1900, and a supplement thereto.
    The lease in question lets the premises to the insolvent corporation for five years from the 1st day of May, 1900, at the yearly rental of $720, which, by a supplement, was increased to $780, with an express covenant on the part of the insolvent corporation to pay rent, and a clause giving the lessor the right of reentry in case of a failure to pay or to perform any of the covenants, with a covenant by lessor for quiet enjoyment; also that the lessee should occupy ¡the stores for its business as wholesale grocers and not otherwise; with a further clause preventing the sale of the business or the transferring 'of the lease without the Consent of the lessor.
    The corporation went into the hands of a receiver on March 1st, 1902, and the receiver took and held possession of the business and the leased premises until April 1st, 1902, and paid the rent during that time as a part of the expense of settling the estate, and on the day last named- sent the keys of the stores to the appellant, so that the claim is reduced to the amount accruing and to accrue since April. 1st, 1902.
    The claim was presented on March 24th, 1902, seven days before the receiver quit possession, and was acted on adversely by the receiver on October 15th.
    The written argument of the appellant states that from April 1st to the time of presenting the petition of appeal the premises have stood vacant, because the appellant was unable to rent the same. It was agreed that whatever in the nature of possession the appellant took was not of such a character as to operate as a surrender of the premises or a waiver of his right to demand payment of the rent reserved by the lease and covenanted, to be paid by the insolvent corporation.

      Mr. Charles C. Black, for the appellant.

      Mr. Robert 8. Hudspeth, for the receiver.
   Pitktet, Y. C.

If I properly understand, the report of the case of Stockton v. Mechanics Bank, 5 Stew. Eq. 163, the question presented by this appeal is res judicata in this court. That was a suit to wind up a savings bank, and the receiver asked the direction of the chancellor as to several matters which arose in the course of the administration of the estate, and the questions were argued before him by the receiver himself and by counsel for the creditors of the estate. One of the matters submitted was this: Whether the rent on a lease of a store, &e., the term under which had not expired when the decree in insolvency was made, is payable after the time when the receiver delivered up the premises to the lessor. The report does not distinctly and expressly state that the insolvent corporation in that case was the lessee and covenantor to pay the rent; but I think it fairly to be inferred that it was such lessee. The depositors in the insolvent corporation, which was a savings-bank, were of the nature of stockholders and stood on an equal footing, and were entitled to have divided among them what remained after the ordinary debts of the bank were paid; and the argument before the chancellor seems to have gone on the basis that there were sufficient assets to pay all the ordinary creditors in full and leave something to be divided among the depositors; so that the question was not whether the lessor should receive a dividend on his claim for rent, but whether he should be paid anything; for if he was paid anything, he would be paid in full. See Hannon v. Williams, 7 Stew. Eq. 255 (at p. 260), in the court of errors and appeals, and Una v. Dodd, 12 Stew. Eq. 173 (at pp. 182, 183), in this court.

If I am right in my construction of the report, it would seem that the answer of the chancellor to the question so propounded must be decisive of the present case. That answer was as follows: “The object of the proceedings in insolvency, under the act, is to distribute the estate of a debtor corporation, no longer able to pay its debts in full, equitably among its existing creditors. The covenant to pay rent in the future is, in fact, valueless by reason of the insolvency, for the covenantor will have no property to answer its liability thereon. The Bankrupt law of the United States provides for the proving of rent or other debts falling due at fixed and stated periods up to the timé of the bankruptcy. But whether the covenant be valueless or not, the debt to be proved cannot include rent to become due. The claim, under the covenant in the. lease^ for rent accruing after tlie surrender of the premises to the lessor by the receiver cannot be .maintained.”

That seems to be the view taken of the decision by Vice-Chancellor Reed in Bolles v. Crescent Drug and Chemical Co.; 8 Dick. Ch. Rep. 614 (at p. 620). (At p. 618 et seq. the learned vice-chancellor states clearly and accurately the present condition of the law on this subject.)

But it does not appear that the claimant of the rent in Stockton v. Mechanics Bank was represented by counsel before the chancellor; and the authority which he cites (Burrill Ass. § 374) does not sustain the rule laid down by him in all its length. The learned author did not there have in view a claim made by a lessor upon a covenant made by the insolvent corporation to pay rent in futuro. On the contrary, it is plain that he did have in view something quite distinguishable, namely, a large class of cases which hold that a receiver in insolvency, or an assignee in bankruptcy, does not, as -the result of the making to him, by operation of law or by express words, of an assignment óf a leasehold estate previously vested in the insolvent, become liable by virtue of privity of estate as assignee to pay the rent reserved upon the lease.

There is a long line of cases in England, and also in the United States, sustaining the latter proposition. In the supreme court of the United States: Glenny v. Langdon, 98 U. S. 20 (at p. 30, bottom; p. 31, top); American File Co. v. Garrett, 110 U. S. 288; Sparhawk v. Yerkes, 142 U. S. 1 (at p. 13); Sunflower Oil Co. v. Wilson, 142 U. S. 313 (at p. 322), and Quincy, &c., Railroad Co. v. Humphreys, 145 U. S. 82 (at p. 99), and cases there cited. In Pennsylvania: Pratt v. Levan, 1 Miles 358 (cited by Mr. Burrill), and Bosler v. Kuhn, 8 W. & S. 183. In Massachusetts: Hoyt v. Stoddard, 2 Allen 442, and Commonwealth v. Franklin Insurance Co., 115 Mass. 278. The authorities cited by the learned judge for his conclusions in the last-named cases, besides Hoyt v. Stoddard, supra, were Turner v. Richardson, 7 East 335, and other English cases cited in 2 Platt Leas. 433 et seq. It does, however, appear, as I understand the report of Commonwealth v. Franklin Insurance Co., that the claim was based directly upon the covenant contained in the lease,' but' the circumstances were peculiar. Be that as it may, that is the only. American ease which I can find, beside that in 5 Stew. Eq., which, in appearance even, sustains the latter ease.

Chancellor Walworth, in dealing with the question, in Martin v. Black, 9 Paige 641, alludes to the English cases, and uses this language: “If the assignee elects to waive the term, and neither enters upon the demised premises nor does any other act signifying his acceptance of the term as assignee, he is not liable for the rent; and the lessor must come in as a general creditor of the bankrupt’s estate, dr may sue the bankrupt for the rent subsequently accrued,” citing the cases. But it is proper here to remark that in 'none of the older English cases has any such claim made against the assets of the insolvent been countenanced.

The explanation of this state of the law is found in the terms of the old English Bankrupt law, which discharged the bankrupt from liability only on debts due at the date of the bankruptcy; and left him liable for those accruing subsequently; and the English courts, in applying that provision 'to covenants to pay rent in futuro, refused to classify, such covenants as debitum in prcesenti, solvendum in futuro, on the ground, presumably, that the rent deemed die in -diem, and arose out of the land itself. Hence they held that the rent to accrue upon the bankrupt’s covenant after the act of bankruptcy was not provable against the bankrupt’s estate, and the bankrupt himself was not discharged from his liability thereon. This ruling gave rise to the line of cases cited in 2 Platt Leas., and which were followed by those in this country above cited.

This rule occasioned so much inconvenience and injustice that it was altered by the act of 1869. 32 & 33 Vict. ch. 71 § 23, printed in a note to the case of Ex parte Llynvi Coal and Iron Co., L. R. 7 Ch. App. 28 (1871). That section provided, in substance, inter alia, for the actual surrender of a lease by the trustee in bankruptcy, and against the will of the lessor, at any time, notwithstanding his having taken possession under it, and for the discharge of the bankrupt from liability upon his covenants for rent; and then, by a final clause, provided a remedy as follows:

“Any person injured by the operation of this section shall be deemed a creditor of the bankrupt to the extent of such injury, and may, accordingly prove the same as a debt under the bankruptcy.”

Under that clause the court, in the case just cited, allowed a claim for damages for injury for the loss of a lease of land.

In Pennsylvania the same sort of relief was granted in Sweatman’s Appeal, 150 Pa. 369.

. In New York the ruling has been in accordance with the equity of the English statute. Underhill v. Collins, 132 N. Y. 269 (Court of Appeals); People v. St. Nicholas Bank, 151 N. Y. 592, decided in 1897. There the St. Nicholas Bank failed while it was lessee of an unexpired term of a banking-house on Wall street, for which it was paying a rent of $12,000 a year. After it vacated the premises the landlord, pursuant to a right reserved in the lease, relet it at $9,000 a year, and made a claim against the receiver for the difference in rent—$3,000 a year for three years—and the claim was allowed.

This review of the law leads me to the conclusion that the appellant’s claim, in its present ■ shape, must be rejected—first, on the authority of Stockton v. Mechanics Bank, supra, and second, because, independent of the authority of that case, I can find no principle upon which it can be sustained in its present shape and amount. I cannot assume upon the facts admitted before me that the leasehold is of no'value whatever. The claim, therefore, must be disallowed, without prejudice, however, to the right of the claimant to presenta new claim based upon equitable principles.

Before dismissing the case I desire to refer to a consideration presented by the counsel for the receiver in his written argument. It is this: That the object of the statute governing this proceeding is to make an equal distribution of the estate of tho insolvent among its creditors; that the ordinary creditor is one who has already given full value for his debt, as for money loaned, work'and labor done, or goods sold and delivered. The consideration of the debt has fully passed out of the creditor to the debtor, and the creditor'receives a dividend only upon it; that a claim for rent payable in futuro is, as counsel argues, distinguishable from the ordinary class of debts in that the rent has not been, so to speak, earned; and in this he is supported by the ruling of the English courts in administering their Bankruptcy act, as before stated. He then argues, and with much force, that if the claimant’s claim is to be allowed in full it must be upon the basis that the term is. completely vested in the receiver, and that the rent is all paid up to the end of the term, with the result that the allowing the lessor in this case, or in any such case, to prove his claim and- be allowed a dividend for rent yet to accrue will amount to a satisfaction of the rent, so that the beneficial interest for the whole of the remainder of the term will vest absolutely in the receiver for the benefit of the creditors at large. He argues that this is as it should be; and he calls attention to the circumstance that the lease here in question does not contain a clause, as did that in the 81. Nicholas Bank Case, allowing the lessor to enter and relet the premises and credit the amount which he should receive upon such a letting upon the amount reserved by the original lease; and he argues that the law governing the relation of landlord and tenant is such that the lessor cannot, in the absence of such a clause, reenter and hold the premises as security for the amount to accrue upon the original lease; that such re-entry terminates the estate and the right to rent.

There is great force in this argument; but I do not find it-necessary to arrive at or express any definite conclusion upon it.

I will advise an order to the effect above stated, and that will leave the case in such a condition that my conclusion may be reviewed by. a higher court.