text:
    Phœbe Hyland v. John Hyland
    In estimating the time during which a willful and obstinate desertion shall continue, where, during such desertion and before its completion, the deserter shall be imprisoned upon due conviction of a crime non-political, the term of his imprisonment, in virtue of the supplement to the Divorce act, approved April 1st, 1887 (Gen. Stat. p. 1273 & 37), must be excluded.
    On petition for divorce, master’s report and proofs.

      Mr. William J. St. Lawrencer for the petitioner.
   The Chancellor.

The petitioner sues her husband for divorce a vinculo matrimonii, because of his willful, continued and obstinate desertion of her for two years prior to the commencement of this suit in February, 1896.

The proof is that he separated himself from her on January 18th, 1894, and that on the 27th of December, 1895, while he was yet separated from her, upon being convicted of assault and battery, he was duly committed to prison for a term which had not expired when this suit was commenced.

The proofs satisfy me that the separation constituted a willful and obstinate desertion upon the part of the defendant. It was testified that, after the citation and certified copy of the petition in this suit were served upon him in prison, he declared that he was glad that the petitioner had brought suit; that he was through with her and would not live with her again.

If it were not for the supplement to the Divorce act, approved April 1st, 1887 (Gen. Stat. p. 1273 § 37), which enacts,

“that willful and obstinate desertion shall be regarded, held and construed by the courts of this state having cognizance of causes of divorce to be ‘ continued within the meaning of the third section of the act to which this act is a supplement, notwithstanding that after such desertion has or shall have begun, the deserting party has or shall have been in prison in this or any other state or country, upon conviction by due process of law for a crime, misdemeanor or offence, not political, committed in this or any other state or country; provided, that such desertion has continued or shall have continued without interruption a sufficient length of time after such deserting party’s discharge from such imprisonment, to make up, when added to the period of uninterrupted desertion prior to such imprisonment, the full period of three years,”

I would have no difficulty in reaching the conclusion of the master, that the divorce should be granted.

The gravamen of the desertion contemplated by the third section of our Divorce act, is not the mere physical absence' of one of the married couple from the other, but such absence in a prescribed condition of mind — a willful and obstinate absence. The continuance of the offence, if the indicated condition of mind continues to exist in the deserter, is not interrupted by his deprivation of physical freedom.

The decision in the case of Wolf v. Wolf 11 Stew. Eq. 128, is entirely in accord with this view. In that case it was held that the desertion terminated while the deserter was in prison, even though he could not go to his wife, because his mental attitude, while he was in prison, so changed that his absence from her was no longer willful and obstinate.

But effect must be given to the act of 1887. It, in short, prescribes that desertion once commenced shall be held to continue in.spite of imprisonment of the deserter, provided its continuance prior to such imprisonment, added to its continuance after discharge from such imprisonment, shall be three years in the aggregate.

. If it should be held that this statute is not intended to be applicable to a case where the willful and obstinate intent continues during imprisonment, I am at a loss to know its purpose or office. It cannot apply where such intent ceases during imprisonment and a desire, in the deserter, to return to the deserted party arises, for there the mental condition which distinguishes desertion, under the statute, from mere physical separation, is absent, and no desertion such as the third section contemplates exists to continue after the imprisonment.

The act, I.think, plainly contemplates a desertion under the third section, commenced before imprisonment which continues through and after the imprisonment. It appears to me to have had its origin in a misconception that it was the meaning of the third section, which was in force at its enactment, that depriva- ■ tion of freedom to the deserter’s body would destroy the continuity of a desertion previously commenced. It is upon the assumption that such was the meaning of the third section, it seems, that it proceeded to prescribe a rule which requires the exclusion of a term of imprisonment, of the character it defines, which may happen during desertion, and permits the tacking together of the two ends of the desertion, which may be outside such imprisonment. The statute, I think, enacts a new rule, exceptional from the general rule of the third section of the Divorce act, which is applicable to the case under consideration.

It is obvious, under this view, that when the petition in this ease was filed the petitioner had no cause of action.

The petition will be dismissed.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Edward M. Davis v. Henry L. Davis and Edward H. Murphy.
    1. The rule is that, in pleading fraud, the facts which are relied on as constituting the fraud, must be stated with sufficient particularity to enable the person charged to deny and disprove or explain them.
    2. Where, in the pleading, the existence of a confidential relation between the parties is alleged from which a presumption against the validity of the instrument or transaction complained of arises, it is not necessary to particularize acts of bad faith or imposition, for the burden rests upon the other side to allege and prove circumstances which will overcome the presumption.
    3. Where, however, such relation is alleged, and at the same time other allegations in the pleading show that its influence terminated prior to the transaction complained of, the rule first stated applies.
    On demurrer to bill.
    The bill alleges that the complainant is the child of George Davis, Jr., and Sarah, his wife, and was born November 20th, 1868; that his father died in 1874, and his mother died in 1877, both intestate; that his paternal grandfather became his guardian, and also the administrator of his mother’s estate, but died in July, 1879, before the mother’s estate was settled; that in August, 1881, the defendant Henry L. Davis, an uncle, became the complainant’s guardian by appointment of the surrogate of Kings county, New York, and in September, the same year, by appointment by the . same authority, also became administrator of the father’s estate, and in August, 1884, by appointment of the surrogate of "Westchester county, New York, became the administrator de bonis non of the mother’s estate; that in May, 1894, being more than twenty-five years of age, the complainant, through the instrumentality of the defendant Edward H. Murphy, a lawyer practicing in the State of New York, compelled an accounting by Henry L. Davis, as administrator of his father’s estate, before the surrogate of Kings county, thereby ascertaining him to be chargeable with a balance of $628, in the complainant’s favor, and in a similar proceeding before the surrogate of Westchester county, ascertained him to be chargeable as administrator de bonis non of the mother’s estate, with a balance of $5,080, also in his favor; that after these accountings, in November, 1894, the complainant proposed to commence further legal proceedings to compel the defendant Davis to account for his guardianship and pay whatever balance there might be in his hands; that in furtherance of this project, in November, 1894, ■he entered into an agreement with the defendant Murphy to pay him forty per cent, of any money that might be recovered from the defendant Davis in the proposed litigation; that at this juncture in the proceedings, the defendant Davis sought the complainant and offered to amicably account with him and satisfy his just demand with respect to the guardianship; that without the knowledge of Murphy, who is recited in the agreement presently mentioned to be opposed to any amicable- settlement to the guardianship accounts, the complainant entered into an accounting with the defendant Davis, who, using the language of the bill,
    “displayed unto your orator certain accounts and statements of vai'ious amounts, which he claims to be true, just and accurate accounts and items covering and embracing the management of the estate in his trust and as guardian of your orator; ”

      that relying upon such statements and assurances, the complainant agreed with Davis upon the sum of $565 as the amount due to him, and thereupon, by writing under his hand and seal, agreed to take payment of the same as follows, to wit, $200 in cash, and $10 each month until the balance of $565 should be paid, provided that Murphy should approve of the settlement, and if he should not, the sixty per cent, of so much of the $565 as should remain unpaid, and also that he would not sue Davis, and would forfeit any unpaid balance at any time he might do so; that the $200 was paid to him upon the execution of the agreement; that Murphy did not approve the settlement; that the complainant and Davis were sued by Murphy, and that upon such suit being brought, the complainant, using the language of the bill,
    “ caused inquiries to be made into tbe truth of the statements made unto him by the said defendant Henry L. Davis; * * * that he ascertained the said statement to be wholly and entirely inaccurate, untruthful and false; that instead of the sum of $565 being the amount due unto him by said defendant Henry L. Davis as general guardian, that there is a larger amount, to wit, the amount of §4,000 and upwards due unto him, by the said defendant Henry L. Davis, and that the agreement of February 16th, 1895, was obtained from him by false and fraudulent statements” &e.;

    that thereupon the complainant demanded of Davis that the agreement of settlement be canceled, but that the bill did not allege that the complainant offered to repay him the $200 he had received. The bill .prays that the agreement of settlement may be decreed to be fraudulently obtained and to be void, and that the complainant may have discovery and an accounting.
    The demurrer challenges the sufficiency of the allegations in the bill to properly charge fraud in the agreement of settlement.

      Mr. Isaac S. Taylor, for the demurrant.

      Mr. John J. Joyce, for the complainant.
   The Chancellor.

Fraud is a conclusion of law upon facts. In pleading it, the rule is, that it is not sufficient to charge it in general terms. The pleadings must point out and state the facts which are relied on as constituting it with enough particularity to enable the person charged to deny and disprove or explain those facts. He has the right to know in advance of his answer and the production of his proofs just what he will be required to meet. Story’s Eq. Pl. § 251; Smith v. Wood, 15 Stew. Eq. 567. But the principle which underlies this rule is inapplicable where a presumption against the instrument or transaction complained of arises from the existence of a confidential relation between the parties, under the influence of which relation the agreement, gift, release or settlement was made, for such presumption will throw the burthen upon the defendant to affirmatively show that the dealing and its outcome were free from every species of imposition. The presumption alluded to conspicuously arises where the transaction is between a guardian and his ward under the influence which usually attends that relation. Professor Pomeroy (2 Pom. Eq. Jur. § 961) says of dealings in such a relation:

“ The relation is so intimate, the dependence so complete, the influence so great, that any transaction between the two parties or by the guardian alone, through which the guardian obtained a benefit, entered into while the relation exists, are in the highest degree suspicious, and the presumption against them is so strong that it is hardly possible for them to be sustained. * * * This influence is presumed to last while the guardian’s functions are to any extent still performed, while the property is still at all under his control, and until the accounts have been finally settled. It follows, therefore, that any conveyance, purchase, sale, contract and especially gift, by which the guardian derives the benefit, made after the termination of the legal relation but while the influence lasts, is presumed to be invalid and voidable. The burthen rests heavily upon the guardian to prove all the circumstances of knowledge, free consent, good faith, absence of influence which alone can overcome the presumption.”

It would appear, then, where fraud is charged in a dealing which appears to have been between a guardian and ward, in which dealing the guardian has profited, if it does not affirmatively appear by the bill that the influence of the relationship has been broken or is lost, that the presumption which arises against the negotiation should relieve the ward from the necessity of particularizing the facts which exhibit the fraud, for the burthen is upon the guardian to affirmatively show that the transaction was, in all its particulars, just and right.

The substance of the case presented by the bill here is that, after the complainant had arrived at mature age, and had become emancipated from all personal control of his guardian, and ' had assumed a hostile attitude towards that guardian by twice successfully taking legal proceedings against him to enforce his rights, and, at the very time of making the settlement and agreement complained of, was threatening another litigation with him, he met his guardian and proceeded to amicably negotiate upon the subject of the proposed litigation.

It is not asserted that the influence of the old relationship still existed. The case made is, that one of mataré years, capable of self-protection, as is evidenced by past litigation with the guardian, and who dealt in a hostile attitude, threatening another litigation, was deceived by false statements and accounts which he does not identify or particularize.

His complaint is not that there was undue influence or fraud in the execution of the agreement, but' that the defendant deceived him by false accounts and statements. He alleges that-since the negotiation he has ascertained by inquiry that the accounts and statements so vaguely complained of were wholly and entirely inaccurate and untruthful, and that instead of $565 a much larger amount is due, which he hazards the guess may be more than $4,000. I think that he should at least be required to identify the accounts and statements which he claims to have discovered to be wholly false. There is no assertion of his inability to make such an identification. On the contrary, his allegation that he has ascertained that they were entirely and wholly false, predicates a knowledge of them. To require him to identify them under such circumstances will not be the exaction of an impossibility which may deprive him of justice, but will be obedience to a dictate of common justice to the defendant, who should be fairly apprised of thát which he is to explain or deny or, admitting, deny the falsity of.

I will sustain the demurrer, with costs. The bill may be amended, if the complainant so desires.


author: Pitney, V. C.

text:
    Elizabeth Adams v. Clement J. Adams, administrator cum testamento annexo of James Stokes, deceased. Anna Belle Robinson Clement J. Adams, administrator cum testamento annexo of James Stokes, deceased. Alice Weeks May v. Clement J. Adams, administrator cum testamento annexo of James Stokes, deceased. Jennie Weeks v. Clement J. Adams, administrator cum testamento annexo of James Stokes, deceased.
    1. Where no demand for payment of legacies is made till after the death of the life tenant, who is also executrix, interest on the legacies cannot be had against the remaindermen.
    2. A bequest to a creditor of testator of a sum equal to or greater than the debt, contracted before the making of the bequest, is deemed a satisfaction of the debt, the will not showing- a contrary intention, and no motive being assigned for the gift.
    3. A promissory note fixing no time of payment is a demand note, and, containing no promise of interest, bears none till demand.
    Heard together on bills, answers and statement of facts.

      The object of these bills is to recover four several legacies given to the four several complainants respectively by the will of James Stokes, late of the county of Atlantic, deceased.
    He died January 31st, 1891, testate of a will made two days previously, the effective parts of which are as follows :

      “First. I give, devise and bequeath unto my wife, Mary J. Stokes, all my estate, both real and personal, in trust, wherever the same may be, to have, hold, receive, use and enjoy the rents, interest, issues and profits thereof, during the term of her natural life, except as hereinafter provided for.

      “Second. I give, devise and bequeath the sum of five hundred dollars to my wife’s sister, Elizabeth Adams, and the sum of two hundred dollars to each of my nieces, Alice Weeks, Jennie Weeks and Anna Belle Bobinson.

      “ Third. I give to my executrix hereinafter named full power and authority to grant, bargain, sell and convey all my said real and personal estate to any person or persons, in fee-simple, at public or private sale, upon such terms as she shall think fit.

      “Fourth. I direct that my real estate shall be sold as soon after my decease as shall seem meet, and the proceeds of said sale after paying the legacies above specified to be invested on bond and mortgage upon real estate.

      “Fifth. I give, devise and bequeath, after the death of my said wife, the balance of my said real estate remaining in her hands, to my lawful heirs.

      “Sixth. I do hereby constitute my said wife, Mary J. Stokes, executrix of this my last will and testament.”
    The testator left no personal estate, but died seized of a boarding-house or hotel in Atlantic City, known as the “Arlington,” which had considerable value.
    The widow duly proved the will, took possession of the real estate and enjoyed it with the rents and profits until her death on the 10th of October, 1894, without having sold the real estate or paid the legacies or any interest thereon.
    After her death, letters of administration, de bonis non cum testamento annexo, were granted to the defendant, Clement J. Adams, who sold the real estate on the 25th of March, 1895, and has in hand sufficient proceeds to pay the legacies.
    After the death of the widow and the appointment of defendant as administrator, the complainant' Elizabeth Adams produced and made a sworn demand against the estate, based upon a promissory note in these words:

      “Atlantic City, New Jersey, March .23, 1888.
    “ For value received, I promise to pay to the order of Elizabeth Adams four hundred and fifty dollars (§450.00).
    “§450.00. (Signed) James Stokes.”
    At the time when these causes were submitted a suit by complainant against defendant, on that note, was pending in a court of law. No demand was made upon the executrix named in the will by either of the complainants for the payment of their legacies or any interest thereon, and the same is true as to the promissory note held by the complainant Elizabeth Adams.

      Mr. George A. Bourgeois, Jr., for the complainants.

      Mr. Carlton Godfrey, for the defendant.
   Pitney, V. C.

Two questions were submitted — first, are the complainants entitled to interest on their several legacies commencing from the statutory period of one year after the death of the testator ? and second, was the amount due on the promissory note held by Elizabeth Adams paid and satisfied by the bequest to her of $500, found in the second clause of the will ?

With regard to the question of interest on the legacies, it is argued by the defendant that, reading the second clause of the will in connection with the third, which gives power of sale, and the fourth, which directs that the real estate shall be sold and the legacies paid out of it, the time for the payment of the legacies was after the sale of the real estate, and that they were not due and therefore did not bear interest until such sale took place.

I am unable to adopt that view. It is manifest from the language used that the testator did not contemplate any great delay in selling the land and paying the legacies; and it is not probable that he would subject the legatees to the risk of having the payment of their legacies indefinitely postponed, at the discretion of the executrix, who was also tenant for life and thereby directly interested in the postponement of the sale and payment of the legacies, and the consequent diminution of the?body of the estate and the income to which she was entitled.

I am of the opinion that if the legatees had pressed their claims for payment with proper diligence, as they had a perfect right to do and as they might have done, they would have been entitled to interest after one year from the testator’s death.

But they did not press their claims and rested quietly for upwards of three years, during which period the executrix, who had the power of sale, was enjoying the income of the property without diminution from the payment of these legacies.

Now, it seems to me that this failure to act and collect their demands, on the part of the legatees, must be held, as against the persons entitled in remainder, to be a waiver on their part of the interest on their legacies. They had the power to enforce their claims and refrained from doing so, to the benefit of the tenant for life and at the expense of the tenants in remainder, if they are compelled to pay interest.

I conclude, then, that the complainants ought not to. recover against this administrator any interest on their legacies. It appears that he acted promptly in the sale of the property, and that he was ready and willing to pay the face of the legacies as soon as the estate could be liquidated.

Whatever claim the legatees may have for interest ought to be pressed against the estate of the widow, who enjoyed the benefit of the use of the property out of which the legacies ought to have been paid when due.

With regard to the second question, I doubt whether it is properly before the court, and intimated my doubts to counsel at the argument. Nevertheless, they requested me to express an opinion upon it, and I have examined it with the following result:

The settled rule of construction is that a bequest by a debtor to a creditor of a sum of money equal to or greater than the debt, where the debt was contracted before the bequest was. made, and no motive was assigned for the gift, and in the absence of any contrary intention discoverable on the face of the will, shall be deemed a satisfaction of the debt.

■ In this case there is no direction in the will that the testator’s debts shall be paid, nor any other expressions to prevent the application of the rule of construction above stated, and the only question that remains is as to whether or not the bequest was as great or greater than the amount of the debt. The face of the debt in this case is $450, and it is evidenced by a promissory note, dated March 23d, 1888, but fixing no time for payment and containing no provision for interest.

It is urged that in ascertaining whether the bequest is or is not as great as the debt, the interest, if any, which has accrued on the debt at the death of the testator must be added to the principal and the same taken as the debt.

No authority was cited in support of this proposition, but without admitting its soundness I will adopt it for present purposes. As before stated, the note in question does not mention interest, nor does it fix any time of payment. It promises simply to pay so much money.

It is well settled that such a note has precisely the same effect as if it had been drawn payable on demand. Story Prom. N. § 29; Byles Bills and N. 79, 210; Chitty Bills 151; 1 Rand. Com. Pap. § 119.

The authorities go the length of holding that the insertion in such a note by the holder, with the consent of the maker, of the words “on demand” is not such an alteration as to render it void.

The law is equally well settled that on a promissory note, payable on demand, which does not mention interest, it does not begin to run until after demand is made, either especially or by the commencement of an action. Mayne Dam. 172; Byles Bills 305; Chitty Bills 679, 681, 682.

The reason of this rule is that where there is no expressed promise to pay interest, it can be and is given only by way of damages for a default in the performance of duty. It is not a part of the contract and recoverable as such.

If one promises to pay money on a date named in a contract, he is in default if he does not pay on that date, and is at once liable to pay interest by way of damages for his default.

But upon a promissory note which fixes no date of payment he cannot be said to be in default until demand is made upon him to pay, and hence is not liable for damages until such demand.

This result is not inconsistent with the existence all the while of a present right of action in the holder of such a promissory note. The mere fact that he has the present right to sue and recover a sum certain does not give him the right to recover damages for non-payment of that sum before he demands payment.

It follows that the statute of limitations may and does run against a promissory note payable on demand from its date, although interest does not run until its actual demand unless so expressed in the note. Ang. Lim. § 95; Wood Lim. § 124.

It thus appears that if the statute was pleaded to the action at law brought upon the promissory note here in question, the action will probably fail; but that question was not submitted to me.

I think the note was satisfied by the legacy and will advise a decree iu accordance with the above views. I will hear counsel further as to costs, and merely say upon that subject that I see no occasion for the bringing of four suits to recover these small legacies.


text:
    Catharine Fletcher v. Newark Telephone Company.
    1. A corporation was organized to take over the business and assets of another older corporation, and contracted with the older corporation and its stockholders, in consideration of receiving such business and assets, to issue to each of the old stockholders certificates of stock in the new company upon surrender of those in the old, share for share. In a suit by a holder of a certificate of stock in the old company against the new company for specific performance of this agreement — Held, that the suit could be maintained by a single stockholder without making the old company or either of its stockholders parties defendant, or declaring that the suit was brought for the benefit of such of the old stockholders as might come in and be made parties.

      2. The general language, often used in this connection, to the effect that all persons having an interest in the subject-matter of the suit should be made, parties, is not accurate. The true rule seems to be that all persons who are parties to the interest involved in the issue, and who must necessarily be affected by the decree, should be made parties.
    3. Where a certain sum of money or other thing is due to a party, and no other person has any right or interest in that particular sum of money or thing, it is not necessary to make any other person a party to a suit to recover it, nor to declare that the suit is brought for the benefit of the complainant and other persons having similar claims, although there may be such other persons.
    On demurrer to bill.

      Mr. George Biller, for the demurrant.

      Mr. William P. Martin, in support of the bill.
   Pitney, V. C.

The bill, though inartística]ly drawn and framed, states with sufficient clearness and precision the following facts:

That the complainant is the holder of seven hundred and thirty shares in the capital stock of the Newark Mutual Telephone Company, which was organized in the year 1895, and became possessed of certain contracts, franchises and properties, and that later on, owing to some doubt as to the strict legality of the organization of that company, the defendant, the Newark Telephone Company, was organized for the purpose of carrying on the same business which had been within the grasp of the Mutual company, and entered into “ a certain agreement with the Newark Mutual Telephone Company, and with the stockholders thereof,” whereby the defendant agreed to take and absorb the entire business of the Newark Mutual Telephone Company and its contracts with its subscribers for telephone service, and assume all of its contracts for such service, and its other contracts, franchises, properties &c., and also agreed

“to pay and deliver therefor to the stockholders of the said Mutual Tele phone Company the stock of the Newark Telephone Company, share for share, and issue the same to the stockholders of the said Mutual Telephone Company upon surrender of their certificates of stock in the said Newark Mutual Telephone Company to the defendant.”

Though this language indicates a contract made by the defendant with the stockholders ” of the Newark Mutual Telephone Company, jointly or as a body, yet I construe it to mean not a joint contract, but a contract with each one of the stockholders of the old company severally in their individual capacity. The contract was to issue stock to the stockholders of the old company, share for share, upon the surrender of their certificates of stock, which I construe to mean their certificates of stock severally. The contract could not well be made with the stockholders collectively or jointly for the exchange of certificates of stock with each individually. Such was the construction put upon the language of the contract by counsel for demurrant in his argument.

The bill alleges, further, that the old company transferred, assigned, granted and set over unto the defendant all of its properties, contracts, rights, choses in action and other assets, and fully performed the agreement before mentioned - and that the defendant company has issued and exchanged its stock — which I construe to mean certificates of its capital stock — to and with the stockholders of the old company, share for share, with the exception of the seven hundred and thirty shares held by the complainant, and about one thousand in addition. The total number of shares of capital stock issued is not stated, nor are the names of any other stockholders given.

It alleges a tender of the certificate of stock held by the complainant to the defendant, and a demand of the issue of stock to her prior to the filing of the bill.

The prayer is that the defendant may specifically perform its contract by issuing the certificate of stock to the complainant.

The demurrer is, generally, for want of equity, and especially for want of parties.

The ground of want of equity was not pressed at the argument, but reliance was had entirely upon the want of parties.

The contention was that all the stockholders of the old company must be made parties, either complainants or defendants or that the complainant must sue on behalf of herself and all other stockholders who choose to come in.

I think that the point is not well taken, and not supported by the authorities cited.

The bill has only a faint resemblance to one where a suit is brought by creditors for a distribution of a fund held by defendant either in trust or otherwise for their benefit. In such case it is usually necessary to ascertain, first, the amount of the fund, and next, the total amount due the creditors or other cestuis que trusteni among whom it is to be divided. Hence, such a suit must be brought for the benefit of all the creditors. That was the case in Wetherbee v. Baker, 8 Stew. Eq. 501, which was a suit by a creditor of a corporation against its stockholders to compel them to pay their subscriptions to its capital stock in order to create a fund out of which the complainant could be paid his debt.

Clearly, the complainant could get no preference by bringing his suit, but must share with all the creditors, and the amount to be contributed by the defendants was limited to the amount necessary to pay the outstanding debts, not exceeding, however, the amount of their unpaid subscriptions, so that it was necessary to determine the amount of outstanding debts and take an account of the other assets of the corporation, in order to ascertain how much should be contributed by the stockholders and what percentage should be paid to each creditor if the resultant fund should prove insufficient to pay in full. The language used by the learned judge (at pp. 506, 507) clearly does not reach and cover the case here in hand.

In Cutler v. Tuttle, 4 C. E. Gr. 549, Mr. Cutler bought property in trust for certain persons to be ascertained, and the complainant, Miss Tuttle, sued him, claiming that she was entitled to the whole of the property because she had furnished the whole of the purchase-money. On the other hand, Daniel L. Tuttle claimed that he was entitled to an interest in it and was one of the cestuis que trustent. It was held that Daniel L. Tuttle should have been made a party because his rights were liable to be affected by the decree. The language used (at p. 555) is this : “ In the decision' of the question upon which the suit must hinge, Daniel L. Tuttle’s rights are involved and must be passed upon by the court. His interests, to a certain extent, are also liable to be affected by the decree made in this suit.” And in view of those facts the learned judge used the general expression that “ the rule requiring ail persons interested in the subject of the controversy to be made parties to the suit, grows out of the constitution of a court of equity” &c. The statement of the interest which Daniel L. Tuttle had in it shows that he referred to persons whose interest in the subject-matter would be affected by the controversy.

So with the other case relied upon by the demurrant, Heath v. Ellis, 12 Cush. 601. There the bill was by a stockholder of a corporation, and its object was to recover from certain defendants the value of the assets of the corporation which had been taken possession of by them and converted to their own use under such circumstances as would compel them to account as trustees to the stockholders of the corporation as cestuis que trustent, and it was held that the suit must be brought in behalf of the complainant and the other stockholders, and it was put on the ground that it was a suit to enforce a trust for a class of persons. The learned judge said that it was a familiar rule of equity pleading “ that all persons having a common interest and common object in the subject-matter of a bill ought to be made parties, or if they are too numerous to render the joinder of all of them practicable, the bill should be brought by some in behalf of all, so that the rights of all may be duly adjudicated in the final decree,” and, of course, the ascertainment of the number of shares of stock and how and by whom held, was necessary in order to determine the rights of the parties.

The language there used — “ all persons having a common interest and common object in the subject-matter of a bill ” — seems to me to' be a better general statement of the rule than to say that “all persons having an interest in the subject-matter” should be made parties. Büt I think that neither of them is strictly accurate, as was pointed out by Chancellor Zabriskie in Van Keuren v. McLaughlin, 6 C. E. Gr. 165, where, in commenting upon somewhat similar language used by the court of errors and appeals in the same case (at p. 380), he cites with appro val the language of Mr. Justice Story (Story Eq. Pl. § 78), that “ it is not all persons who have an interest in the subject-matter of the suit, but in general those only who have an interest in the object of the suit, who are ordinarily required to be made parties;” and Mr. Calvert’s language, in his Treatise on Parties (at p. 10), “ the propriety of a person being made a party depends upon his interest, not in the subject-matter, but in the object of the suit.”

A still better definition, perhaps, is that of Mr. Justice Thomas, in Bank v. Gardner, 3 Gray 308, thus: The general doctrine in relation to parties in equity is often stated to be that all persons interested in the subject-matter of the suit should be made plaintiffs or defendants. This statement is too broad. It would be more accurate to say persons interested in the object of the suit must be made parties — that is, persons who are parties to the interest involved in the issue, and who must necessarily be affected by the decree.”

Now the bill here is filed on behalf of an individual who has a contract with the defendant company to issue and deliver to her a certain fixed and definite number of shares of its capital stock. No other individual has any interest in that contract. No account of assets or shares need be taken. The contract was not that a certain number of shares should be delivered in bulk to the stockholders of the old company to be distributed among them. Such a transaction is unthinkable. Shares of stock are evidenced by certificates issued, and where such general language is used in the bill as “ shares of stock,” the context requires us to construe it as certificates of shares of stock.” The contract was to deliver to the complainant a certificate for seven hundred and thirty shares of stock in the defendant company.

The authorities are abundant for holding that where the sum of money or other thing due to the complainant is already ascertained, and no other person has any right or interest in that particular sum of money or thing so due, it is not necessary to make any other person a party. This distinction was referred to and recognized by Chancellor McGill, in Speakman v. Tatem, 18 Stew. Eq. 388, where he holds the result to be that the line of cases referred to hold “ that, where one of several cestuis que trusteni, entitled to a certain share of a certain sum, seeks to recover from the trustee his share of that sum, he need not make the owners of the remaining shares parties to the suit.” He cites Smith v. Snow, 3 Mad. 10; Hutchinson v. Townsend, 2 Keen 675; Perry v. Knott, 5 Beav. 293 ; to which I add Hares v. Stringer, 15 Beav. 206; Hughson v. Cookson, 3 Y. & C. (Exch. in Eq.) 578; Lenaghan v. Smith, 16 L. J. Ch. (N. S.) 376 (1847), Lord Cottenham; Marryatt v. Marryatt, 23 L. J. Eq. (N. S.) 876 (1854), see top of p. 878. That was a hill by one cestui que trust against the trustees to administer the trusts of a will. A motion was made against the trustees to transfer into court certain shares of government stock. The motion was resisted by the trustees, on the ground that the persons beneficially interested in the property of the testator were not made parties to the suit and had not been served with notice of the motion. Vice-Chancellor Kindersley said: If this had been a suit for the administration of trusts under a settlement instead of a will, perhaps these persons might have been proper parties; but they are not so in a case like the present.” There it is to be observed that the complainants had a certain share of a fund. The case goes further than those referred to by the chancellor in Speahman v. Tatem.

The other stockholders in this case may be interested in the principle of the decision in this cause, but they are not shown by the bill to be interested in the result of the cause itself.

The demurrer admits that the complainant is the holder of a certificate for seven hundred and thirty shares of the stock of the old company, and that the defendant promised to issue the same number of shares to her in the new company upon surrender of her certificate.

The present case is somewhat similar to that of Swedesborough Church v. Shivers, 1 C. E. Gr. 453, where a test suit was brought by the church to establish a rent-charge upon a particular piece of land which was part of a larger piece which had been conveyed by the church, reserving a rent-charge. Chancellor Green there says: There is no want of proper parties. The bill seeks to recover only the rent charged upon the land,owned by the defendant. That is defined by strict metes and bounds. The right of no other landowner can be affected by the decree. The bill does not ask an apportionment of the rent among the different owners, nor seek to settle any question of boundary or conflicting right.” , ,

Nor can I perceive any ground for holding that the old corporation is a necessary party to the suit. The bill alleges that it has stripped itself of all its property and franchises by assignment and transfer to the defendant, and that the contract here sued upon was made directly vyith the complainant and the defendant. But if by t.he true construction of the contract, or if the proof should finally be that the contract was made between the two corporations, but for the benefit of the individual stockholders of,the old company, I should still be inclined to the opinion that the old company was not a necessary party, and that each stockholder could sue individually for the stock due to him, basing this right upon the contract made by the old corporation for his or her benefit.

No relief is or can be, upon the,facts, prayed against the old corporation, nor is it at all affected by the result of the suit. Presumably, its stockholders accepted the promise of the new company to issue certificates of stock to them severally as full satisfaction of all claims they held against the old company. And certainly, upon the statement of the facts contained in the bill, the performance of the defendant’s contract with each of the old stockholders is a complete discharge of any claim the old company may have against the new company.

Upon the facts stated in the bill, I think that the complainant is entitled .to specific performance of that agreement, and that the demurrer must be overruled.

I will advise a decree overruling the demurrer, with costs.


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    Henry Binns et ux. v. David H. Slingerland.
    1. A plaintiff at whose instance a court held that a defence presented by the defendant, on an agreed statement of fact, was not available at law, cannot set up, in defence to a bill filed by the defendant to obtain the benefit of the defence in equity, that the agreed statement of facts submitted to the law court was incorrect, a fact being omitted which would have rendered the defence good at law.
    2. The provision of the supplemental Mechanics’ Lien law (P. L. of 1895 p. SIS § 5) that payments made by an owner on a building contract in advance of the terms of the contract shall be no defence to the claim of a subcontractor who serves a “stop notice,” under the statute, does not abridge the right of the contractor to make an equitable assignment to a sub-contractor of money to become due under his contract by giving him an order on the owner; and, the owner being bound to recognize such equitable assignment, the payment of the order in advance of the terms of the contract is immaterial to another sub-contractor serving a notice, and cannot avail him to hold the owner to a liability beyond his contract.
    Heard on bill, answer and replication.
    The object of the bill in this cause is to obtain the benefit of an equitable defence to a judgment at law. The facts which furnish' the equitable defence were set up in defence to the action at law, without success. It was tried by a judge without a jury, and his reasons, given informally, show that it was not considered upon its general merits, but simply in the light of whether or not it furnished a defence at law.
    The circumstances are as follows: The complainants were the owners of a lot of land and entered into a written contract (duly filed) with one Scott for the erection of a building thereon. Payments were agreed to be made in installments, the last payment — $1,400—being due and payable when the building should be completed. On the 12th of September, 1895, and before the building was completed, Scott became indebted to the defendant, Slingerland, in the sum of $450, for work done and materials furnished for the building, which, being demanded and payment refused, Slingerland served upon the complainants a stop notice under the third section of the Mechanics’ Lien law. Previous to the service of that notice, however, Scott had given to divers persons, to whom he was indebted for work done and materials furnished in the building, written orders on the complainants for a considerable sum of money, payable out of the last payment. Those orders were not formally accepted by complainants. Before the building was completed and the last payment due, but when it was so nearly completed as to warrant the complainants therein, they, being advised that those orders operated as equitable assignments, pro tanto, of the amount due from the complainants to Scott, paid-them.
    The question is whether such payment is an equitable discharge, pro tanto, as against the right of the defendant, Slingerland, under his stop notice, the last payment being insufficient to pay all the claims.
    The facts just stated were presented to the judge in the law court in an agreed state of the case, and he held that, in the absence of an acceptance of those orders by the complainants here, who were the defendants in the action at law, they were under no legal obligation to pay the same at the time that the Slingerland stop notice was served upon them, and that the right of the parties at law thereby became fixed, and that complainants’ subsequent recognition of the equitable rights of the holders of the orders by paying the same could not be set up as a defence at law, and rendered judgment in favor of Slingerland and against the complainants.
    Complainants’ bill sets out in full the facts agreed upon in the action at law, and they are admitted by the answer. But the answer further sets up that the state of the case so agreed upon was not complete, and that in point of fact the defendants at law and complainants herein had formally accepted the several orders, and that thereby they had a complete defence at law, and not having set it up at law they cannot now be heard in this court.

      The points argued were:

      First. Did the orders so given by Scott upon the complainants work an equitable assignment, pro tanto, of the several sums assigned ?

      Second. Can the defendant herein have the benefit of the allegation in his answer that the orders were, in fact, accepted by the complainants and thereby rendered obligations at law ?

      Third. And the point principally relied upon by the defendants herein, that those payments were “ advance payments,” and forbidden by the fifth section of the supplement to the Mechanics’ Lien law, approved March 14th, 1895. P. L. of 1895 p. 313; Gen. Stat. p. 2074 § 41.

      Mr. George P. Rust and Mr. John B. Humphreys, for the complainants.

      Mr. William W. Watson, for the defendant.
   Pitney, V. C.

It was not seriously contended but that the drawing of the orders worked an equitable assignment of so much of the last payment as they covered, and that they thereby gained, in equity, a priority over the notice served by the defendant herein. Superintendent, Trustees Public Schools v. Heath, 2 McCart. 22; Lanigan v. Bradley & Currier Co., 5 Dick. Ch. Rep. 201. And it is equally clear that the rights of such equitable assignees could have been enforced in this court. And if the complainants herein had, as soon as the building was completed and the payment of $1,400 became due from them, deposited the same in this court and filed a bill of interpleader against the several parties, the holders of those orders would have prevaile'd over the defendant, Slingerland, claiming under his stop notice of September 12th. They were first in time, and therefore prior in right. The complainants, however, instead of putting the parties to the expense of an interpleader, saw fit to pay them their money directly, and strictly in accordance with the equitable rights and liabilities arising out of the facts. When, however, that yielding to the superior rights of the holders of those orders was presented by them as a defence in the action at law, the learned judge held that the defence was not there available. The complainants herein were thereupon entitled to accept that ruling as the law of that case, and were not under obligation to test its correctness by taking the opinion of. a higher court. It does not lie in the mouth of the defendant herein to say that the decision of the court of law was erroneous when it was made in his favor and upon his demand. In this respect the case is clearly and entirely within the rule adopted and acted upon in the case of Oehme’s Administrators v. Ruckelshaus, 3 Dick. Ch. Rep. 436; affirmed on appeal, 4 Dick. Ch. Rep. 340.

With regard to the second point taken, namely, that in point of fact the payment of these orders was a legal defence because they, in point of fact, were accepted and turned into legal obligations prior to the service of the notice by the defendant, of September 12th, and therefore available at law, two answers are made — first, that the allegation in that behalf in the answer is new matter which is put in issue by the replication, and as the defendant did not choose to avail himself of his privilege of proving it, he cannot have the benefit of it at the hearing. This point, I think, is well taken.

A second point taken was this: That the defence set up at the hearing of the case at law was purely an equitable defence, and failed for that reason, and its equitable character is not eliminated by an allegation that there was also a legal defence. Or, putting it another way, it does not lie in the mouth of the defendant herein ,to take that point at this time, no matter what the facts may be, since he agreed to a state of facts which omitted in his favor at law the essential element of an acceptance of the orders. Eor both these reasons, I think, that point cannot prevail.

The remaining point is as to the effect of the statute above referred to. If that section of the statute has any application to this case, it must be by way of taking away the right of the contractor to make any preferences among his creditors by giving orders in favor of any of them. If the. contractor has the power to give a written order and thereby make an equitable assignment of a part or the whole of any of his payments, then the owner of the building who owes those payments is bound to recognize those assignments and yield to them, and his payment of them, no matter when made, cannot be considered in any sense as a voluntary “advance payment,” but wholly involuntary. In such case he pays because he cannot ultimately escape payment. The circumstance that he pays sooner than he would be obliged to pay is immaterial, because it does not affect the resultfor if he should defer payment until, by the strict terms of the contract, the money was actually due to the contractor, he would still be obliged to pay the holders of the orders, and nobody can be injured by the payment in advance. In short, such payments lack the essential elements of advance payments from the owner to the contractor; and, .therefore, the simple and only question is, can the enactment in question be construed as forbidding preliminary disposition by the contractor in favor of persons who have furnished materials or done work for the building ?

The language is broad:

“That if the owner or owners of any building or other property which [by law] is made the subject of liens, for or toward the construction, altering, repair or improvement of which labor or services have been performed or materials furnished by contract, duly filed, shall, for the purpose of avoiding the provisions of the act to which this is a supplement, or in advance of the terms of such contract, pay any money or other valuable thing on such contract, and the amount still due to the contractor, after such payment has been made, shall be insufficient to satisfy the notices served in conformity with the provisions of the act of which this is a supplement, such owner or owners shall be liable in the same manner as if no such payment had been made.”

It will be observed that the act does not state to whom the forbidden payment shall be made, but it evidently means a payment to the contractor. Granting that to be the proper construction, still it is argued that a payment to the assignee of the contractor is, in effect, a payment to him. In a sense that is correct. But a determination that it is correct does not meet the question whether or not the contractor is forbidden to exercise his common-law right of preferring creditors and designating which of the persons furnishing him with materials he wishes to be paid in case there is not enough to pay all. If he has that right and exercises it, then the owner has no option, but must observe it, and a payment made in pursuance of such an assignment is, as already observed, in no proper sense a voluntary payment. It is hardly necessary to observe that the act is not aimed against involuntary payments.

The question is not without its difficulties, but the conclusion to which I arrive is this: That the practice of contractors making such preferences by giving orders to materialmen has become so thoroughly familiar to everybody, and has been so frequently before the courts, and their right so to do so thoroughly established, that I must conclude that if the legislature had intended to restrict this right on the part of contractors, they would have done so by express language. Besides, it is pretty plain, reading the whole section together, that the object of the legislature was to prevent such action on the part of the owner as would enable the contractor to divert payments from their proper destination, namely, the hands of the persons who furnished materials and labor as sub-contractors, under, or workmen for, the principal contractor. And I cannot see any indication that it was in the mind of the legislature to prevent the contractor parceling out as he saw fit, and as he has done in this case, among his subcontractors, the moneys which were falling due under the contract. The harshness of placing restrictions upon these advance payments 'was pointed out in the case of Mutual Life Insurance Co. v. Walling, 6 Dick. Ch. Rep. 99, with the result that the section of the statute there under consideration (Gen. Stat. p. 2071 32), was modified by amendment, found in the sixth section of the act of March 14th, 1895, being paragraph 42 of the Mechanics’ Lien law. Gen. Stat. p. 2076. The construction contended for by defendant herein seems to me so harsh that it ought not to be adopted unless the legislative intent is very clear.

For these reasons I decline to adopt it, and conclude that the payments here in question were not forbidden by the section forbidding advance payments; and will advise a decree in favor of the complainants in accordance with the foregoing views.


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    George T. Warwick v. Charles S. Stockton.
    1. Complainant sold defendant the exclusive right to manufacture and sell certain inventions, the agreement providing that defendant should furnish capital and machinery for the enterprise, and pay complainant half the profits after deducting a reasonable rental for the factory. Defendant also agreed to keep books of account, open to complainant’s inspection, and to render accounts periodically. Defendant was given power to manage the business.— Held, that this was an agreement of joint adventure, and not of partnership.
    2. A receiver will not be appointed at the suit of one of the parties to a joint adventure, in the absence of fraud or mismanagement, or actual danger to the joint assets.
    Motion for a receiver pendente lite. Heard on petition and affi davits,

      Mr. George J. MoEwan, for the complainant.

      Mr. Adrian Biker, for the defendant.
   Pitney, V. C.

The object of the bill is to establish ordinary partnership relations between the complainant and defendant, to have an account of the partnership transactions, and a receiver with power to sell the partnership assets. There is no specific prayer for a dissolution, but, of course, a receivership and sale of the assets work a dissolution.

The complainant is an inventor. The defendant is a capitalist, in a moderate way, living in the city of Newark, and at and prior to the 10th of October, 1894, was the owner of a factory building and plant which was idle. Complainant claimed to be the owner of certain patents for the manufacture of certain parts of bicycles, and on that day the parties entered into a partnership agreement as follows:

“This agreement, made the tenth day of October, 1894, between George T. Warwick, of the city of Springfield, in the State of Massachusetts, party of the first part, and Charles S. Stockton, of the township of East Orange, Essex county, New Jersey, party of the second part—
Witnesseth: Whereas, the party of the first part is the owner of certain patented improvements in the manufacture of bicycle saddles, pedals, hubs and other parts; and whereas, the party of the second part is desirous of securing the exclusive right to manufacture and sell the same within the United States of America:
“Now, therefore, in consideration of the premises and the sum of one dollar—
“I. Said party of the first part has agreed to convey, and by these presents does assign, transfer and set over, unto the said party of the second part, the sole and exclusive license to manufacture and sell all parts of bicycles containing inventions covered by patents owned or controlled by party of the first part throughout the United States of America during the continuance of this agreement.
“II. The said party of the second part hereby agrees to furnish all necessary capital, machinery, tools and factory room for the economical manufacture of said articles and to manufacture and sell the same, and at the end of each year to furnish to the party of the first part a statement of the business of the preceding year, and to pay over to him one-half of the net profits shown by such statement. And it is agreed that in estimating the net profits there shall be allowed to the party of the second part, as part of the cost of manufacture, a reasonable rental for the factory room and power devoted to said business; that full and accurate books of acfeount shall be kept of the cost of such manufacture and sale; that the account-books of said business shall be open at all reasonable times for the inspection of the party of the first part or his representatives.
“ It .is further agreed that this agreement shall continue in force for the period of two years from its date; that it may be terminated "at any time by either of the parties for any one of the following causes:
“ I. By the party of the second part ceasing to manufacture for a period of three months.
“ II. If the net profits at the end of the first twelve months shall not amount to five hundred dollars; provided, however, the party desiring to terminate this agreement shall have given to the other party sixty days’ notice, in writing, of 'his intention so to terminate the same; whereupon all rights thereby granted and conveyed shall terminate.
“III. It is further agreed that the party of the first part shall take the supervision of the equipment of the factory and appliances for the construction and manufacture of the said goods, at a salary of §3,600 per year. "If the books show a profit warranting it, it is understood that Mr. Warwick may draw fifty per cent, of his share. It is further agreed that the party of the second part shall conduct the business herein agreed to be conducted under the style of ‘ The Warwick-Stockton Company.’ ” ' □

This agreement was, at the same time, modified by a contemporaneous agreement'as follows:

“Newark, N. J., Oct. 10th, 1894.
“Mr. G. S. Stockton, Newark, N. J.:
“Dear Sir — In reference to my salary of thirty-six hundred dollars per year, stated in the agreement I have this day made with you, I am willing and will pay you for value received eighteen hundred dollars of my salary as long as the agreement referred to shall last, that is, two years. It is also .agreed, if I understand rightly, that we are to divide all profits derived from the bicycle business equally after all commissions and running expenses have been paid. Commissions in this instance means to include whatever you may pay Mr. Elkins, and it is understood that, according to above agreement, that Mr. Elkins is not to receive over twenty-five per cent, of the net profits.'
“Geo. T. Warwick.”

The parties proceeded to carry out this agreement by the investment by the defendant of over $40,000, in additions to the pre-existing plant, in his factory in the way of new machinery and other appliances for launching and conducting the business, all done under the supervision of the complainant. On the 10th of August, 1895, a further agreement was entered into between them as follows:

“Newark, N. J., August 10th, 1895.
“ It is hereby conceded and agreed that the agreement between the undersigned, dated October 10th, 1894, shall be extended from two (2) years as specified in the said agreement, to the term of five (5) years from the date of said agreement; and it is also agreed that ten (10) per cent', shall be charged off on the cost of the machinery and tools and placed to the expense account.”

Some time in the first part of 1896, and after the plant was entirely completed and considerable manufacturing had been done, the relations between the parties became somewhat strained, and the defendant, as the complainant alleges, substantially excluded him from any participation in the management of the business. He did not, however, exclude him from the factory building or from inspecting the books and an opportunity to observe how the business was being conducted; nor did he refuse to listen to complainant’s suggestions as to the manner in which the business should be conducted.-

There is no allegation that the defendant is insolvent or unable to respond to the complainant for whatever moneys may be due him, nor is the complainant’s right to an account denied or disputed.

Semi-annual inventories were taken and accounts and statements thereon made up, commencing with the calendar year instead of the date of the articles of copartnership. This seems to have been acquiesced in by the complainant. In addition, balance-sheets were taken off from the books from time to time and handed to him. There is no dispute but that all business transactions were entered upon the books in such a manner as to show their true character and enable an accountant to make up a correct account therefrom.

The specific grounds on which the complainant asks for a receiver are: The exclusion of the complainant from the management ; the employment of incompetent and inexperienced persons in his place; the refusal to pay profits shown to have been earned on July 1st, 1896; the refusal of an inventory and account on October 10th, 1896; denial of complainant’s interest in the business; and general mismanagement and bad judgment in the choice of articles to be manufactured.

It may be that the disagreements between the parties have been so severe, and their relations have become so strained, that if this were an ordinary partnership, the successful conduct of which required mutual respect and confidence between the partners, the court might well decree a dissolution. Lind. Part, p. 580; Seighortner v. Weissenborn, 5 C. E. Gr. 172. The character of the relations of the parties in that respect will be considered further on.

With regard to the other complaints above mentioned, they were, as I think, in the main, fully and fairly met by the answering affidavits.

The question of partnership or no partnership must be determined upon the written contract between the parties, and I think it quite plain that the relation of partners, in the ordinary sense of that term, does not exist between the parties. The substance of the agreement is that the complainant agrees to assign to the defendant the exclusive right to manufacture certain patented articles, and the defendant agrees to furnish all the capital, machinery, tools and factory for the manufacture of the same, and to do such manufacturing and to render an account of one-half the profits to the complainant. The only part which the - contract provides that the complainant shall take in the business is that he shall take the supervision of the equipment of the factory and appliances for the construction and manufacture of the goods at a salary of $3,600 a year. This language does not include the management of the business of manufacturing under the patents. So far as the conduct of the business itself goes, the express language used is this, in paragraph II., the defendant agrees to furnish all the necessary capital and so forth for the manufacture of said articles and to “manufacture and sell the same; ” and in the third paragraph are these words:

“It is further agreed that the party of the second part shall conduct the business herein agreed to be conducted under the style of ‘The WarwickStoekton Company.’ ”

All the money was furnished by the defendant, and the license to manufacture with all the plant and machinery of every kind was to be and is his individual property. This is further shown by the extension agreement, which provides for charging against expense account ten per cent, on the cost of machinery and tools each year. There is no provision, expressed or implied, that the complainant should have the usual power of a partner as agent of the firm to bind the partnership and to take part in the details of the management of the business, nor is there anything in the agreement to indicate that he was to become liable for any share of the losses if the business was unsuccessful. He was to have his salary whether the business was successful or not. The express provision for access by complainant to the books of account also indicates that it was not contemplated that he should have an active share and voice in the everyday management of affairs. Such a participation in the business would necessarily give constant access to the books and no special provision therefor would be necessary. These features show that the relations were not those of partners, but of a mere common interest in a joint adventure in which one party took all the risk of loss and the other party had a share of the profits, if any. In my judgment, the defendant continues to be the legal and equitable owner of the whole plant and business, and has the full control thereof, subject to the duty to account to the complainant for the manner in which he conducts it, and for one-half of the profits. He must, of course, conduct it with an honest and faithful endeavor to make it successful and profitable. Wild v. Davenport, 19 Vr. 129 (at p. 132); Nutting v. Colt, 3 Hal. Ch. 539.

But even if this were the case of an ordinary partnership, I am of the opinion that the facts do not warrant the extreme remedy of a receiver. The time limited for the partnership has not expired, and the familiar rule is that the court will not interfere in such a case by the extreme measure of a receiver except for the purpose of the preservation of the assets in the face of a real danger of loss, and I see none in this case.

The authorities on this point in New Jersey are clear and uniform. In Renton v. Chaplain & Carter, 1 Stock. 62, Chancellor Williamson reviewed most of them down to that date. There, so the chancellor found, Carter and Chaplain were actual partners, inter sese, by written contract which provided for a partnership term of five years, and its continuation during that period was provided for in case of the death or physical disability of either of the partners. The business of the partnership was that of manufacturing certain goods with a patent machine, and without that machine the business was not worth carrying on. At the time the bill was filed Carter had withdrawn all the money and more than he had ever contributed to the partnership, and Chaplain was, as between them, the owner of the plant and all the assets. Carter’s interest had been sold out at sheriff’s sale, under a judgment recovered against him individually, and bought by Renton, the complainant. It was claimed that the partnership was absolutely dissolved by the sale by the sheriff of the interest of one partner in the assets, and that a receiver must, therefore be appointed;' but Chancellor Williamson, after a full review of all the authorities up to that time, declined to appoint a receiver, on the ground that he was not satisfied that there was any gross misconduct on the part of Chaplain or such danger of loss as would justify the interference of the "court.

The same disposition was shown by the same learned judge in the case of Birdsall v. Colie, 2 Stock. 63, where he reaffirms his conclusion in Renton v. Chaplain, to the effect that the court ought not to assume the control of partnership affairs unless some necessity for its doing so is manifest, adopting the language of Lord Eldon in saying: I have frequently disavowed, as a principle of this court, that a receiver is to be appointed merely on the ground of a dissolution of partnership. There must be some breach of duty of a partner or of the contract of partnership.”

And the same doctrine was acted upon by the same learned judge in Wilson v. Fitchter, 3 Stock. 71, where he disapproves of two decisions of Chancellor Walworth, in New York, which held the other way.

This principle of action was adopted by Chancellor Green, in Cox v. Peters, 2 Beas. 39. That case resembles this in that the charge was, as here, a violation on the part of the defendant of the articles of partnership, and a combination to exclude the complainant from participation in the business of the firm and from receiving his share of the profits. Chancellor Green approves the cases just cited, decided by Chancellor Williamson, and then says: But admitting the existence of the general rule, it is based on the principle that each partner has an equal right to the possession and control of the partnership effects and business. But, by the articles of partnership between these parties, the whole capital was to be advanced by Peters, the business to be conducted in his name and owned alone by him. The entire capital was in fact advanced by him, and whatever may be the rights or claims of creditors as against the property, as between the partners themselves the entire capital advanced, after the payment of debts, belongs to Peters. The complainant has no interest in the property upon the dissolution of the firm beyond his share of the profits. Under such circumstances, where there is no suggestion of insolvency or irresponsibility, and no proof of fraud, there can be no equity in wresting the management of the property from the hands of the real owner and placing it in the hands of a receiver. As the case now stands, there is no necessity for the appointment of a receiver, and no reason for the continuance of the injunction upon that ground. The partnership still continues, and, upon the case made by the answer, there is no ground for the interference of the court with the management of the concerns of the partnership by the partners themselves.”

The considerations which prevailed in the cases just cited apply and must prevail here.

The complainant, as I have said, failed to show fraud or actual mismanagement by the defendant, or any disposition to exclude the complainant from a full knowledge of the various transactions under the agreement. I think, also, that he has failed to show a disposition on the defendant’s part to let the business run down and become unprofitable. Complainant is clearly entitled to have an account taken in this court, and there the charges of extravagance in paying salaries and other expenses may be examined, at his risk, of course, as to costs, if he does not succeed in varying the result. But the right to an account does not include the right to stop the enterprise by a receiver.

I will advise that the order to show cause be dissolved and the motion denied, with costs.


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    Adeline Haslett v. August Stephany.
    1. The owner of..adjoining lots, the rear of which had no connection with any street, formed the plan, in selling them, of reserving an alleyway three feet wide across the rear of each lot, and opening on a public alley at one end for the common use of the owners of the interior lots. The deed given a purchaser of one of the interior lots, from whom complainant purchased, contained a reservation of such way, but contained no grant of right of way over the lots intervening between such lot and the alley, which were then owned by the vendor, though such grant was intended. Such deed was duly recorded. All the lots were sold with the verbal understanding that the way was to be reserved, but through oversight the reservation was omitted from the deed given to the purchaser of the one adjoining the alley into which the way opened. The purchaser, in building, however, left a covered way up to the second story, and it was used by complainant and the owners of the other lots at the time such lot was purchased by defendant. — Held, that complainant was entitled to have the deed of her grantor reformed, so as to convey the right to use the way over defendant’s lot, defendant being chargeable with notice of such right by the record of the deed as written, and the use made of the way when he purchased, of which he had actual knowledge.
    2. The reformation of a deed is fairly within a prayer for general relief in a bill in equity.
    Heard on bill and affidavits, answer and affidavits, and agreed state of facts as follows:
    This cause was opened to the court on a motion for an injunction to stay an action at law, and then, upon an agreement of the parties, it was turned into a final hearing upon the following agreed facts: Complainant is the owner of a lot on the south side of Atlantic avenue, in Atlantic City, twenty-five feet front and rear, and eighty feet deep. Defendant is the owner of a lot of the same size, situate on the same side of Atlantic avenue, twenty-five feet farther east, and abutting upon an alley called the “ Mansion House alley,” twenty-five feet wide. The location of the lots is indicated upon the annexed plot.
    Previous to March, 1879, two sisters named Lee were the owners of a plot of land on the southeast corner of North Carolina avenue and Atlantic avenue, on the east side of North Carolina avenue and on the south side of Atlantic avenue, with a frontage of one hundred and fifty-feet on Atlantic avenue, and a frontage of eighty feet on North Carolina avenue, and bounded on its easterly end by the Mansion House alley. Directly to the east of this was the Mansion House, also owned by the Misses Lee, and they also owned some or all of the land to the south of the plot in question. In that situation they divided the plot into six lots, with a frontage of twenty-five feet each on Atlantic avenue and a depth of eighty feet. The lot nearest North Carolina avenue was conveyed in March, 1879, to one Kelly; the lot next east of it was conveyed in October, 1879, to one Caemmerer. The previous sale to Kelly left the lot sold to Caemmerer without any access to the street except through its front, and the Misses Lee devised the plan of reserving from the remaining four lots an alleyway three feet wide, from the rear of the Caemmerer lot and along the rear of the other lots to the Mansion House alley. In February, 1880, they sold to Lippincott, grantor of Mrs. Haslett, the fourth lot from North Carolina avenue, being also the third lot from the Mansion House alley, and in the conveyance thereof to Lippincott (recorded in February, 1880), they inserted this clause:
    “Excepting and reserving, nevertheless, a strip of land gn the rear or back of said lot, three feet wide, for the use and accommodation of the owners or occupants of the two lots adjoining on the east and the two lots adjoining on the west of the lot herein conveyed.”
    The lots referred to on the west are the Caemmerer lot and the lot subsequently conveyed to Galupo, and the lots on the east are the lot conveyed on September 30th, 1880, to one Apple-gate, and by him subsequently conveyed to the defendant, and the one between that and the .Lippincott lot conveyed to one Harkins in June, 1881.
    When, in June, 1881, the Misses Lee sold to Harkins, they inserted this clause in the conveyance, “ and provided that three feet in width and twenty-five feet in length of said lot be kept open and used for the purpose of an alleyway.”
    When the Misses Lee conveyed to Applegate and Galupo, they agreed verbally with the grantees that an alleyway three feet in width should be kept open on the rear of their lots from the southeasterly corner of the Caemmerer lot to Mansion House alley, but they failed, through oversight, to insert in the deeds to Applegate and Galupo a reservation of that right. Mr. Applegate, however, recognized it, and, in building upon his lot, erected a building seventy-seven feet deep only from Atlantic avenue on the ground floor, leaving an alleyway of three feet wide the whole width of his lot, but he erected the other stories of his building the full depth. He subsequently conveyed to the defendant, Stephany. This alleyway was used by the owners of the four lots — Caemmerer, Galupo, Haslett and Harkins — up to some time in the present year, when the defendant, Stephany, who had in the meantime acquired title from Applegate, erected a gate across the alley on the southwest corner of his lot, which gate was broken down by the orders of Mrs. Haslett and Mr. Caemmerer, whereupon Mr. Stephany brought an action of trespass against Mrs. Haslett, to recover of her damages for breaking his close and for demolishing his personal property, the said gate, and this bill is filed to enjoin that suit. Mr. Stephany occupied offices in the building on the Applegate lot for some time before he acquired title, and had full notice that the owners of the lots to the west were using this alleyway, but had not notice of the verbal arrangement made between the Misses Lee and his grantor, Applegate. The deed from the Misses Lee to Lippincott was recorded prior to the conveyance by them to A.pplegate, and the deed from the Misses Lee to Harkins was recorded subsequent to the conveyance by them to Applegate.
    The plan annexed to the foregoing shows that the four lots, including complainant’s, between Kelly’s, on the west, and defendant’s, on the east, have all been built upon to their whole width, leaving no passageway from their several rears to the street, but upon each has been left sufficient space for a three-foot alley along the rear.
    At the argument counsel agreed that the affidavits annexed to the bill and answer respectively should be used in evidence, so far as their contents were relevant and competent, as supplements to the agreed state of the case.
    One of the Misses Lee swears in her affidavit that all of the several sales and conveyances of the five lots in question were made with the understanding with the several grantees that the alleyway in question should be kept open for their mutual benefit, and Caemmerer, whose deed pre-dates that to Lippincott, under whom complainant claims, swears to the same effect.

      The date when complainant’s house was built is not expressly stated, but she states in her sworn bill that since 1880 she has used the alleyway, from the rear of her lot to Mansion House alley, “for the delivery of ashes, garbage” &c., and that .the same is true of the other, owners. The answer admits such use from and after 1881.
    The defendant, who is a lawyer, supervised the taking of title by his immediate grantor, Berges, from Applegate, in December, 1883, and while in his affidavit annexed to his answer he denied that either he or Berges had notice at that time of the verbal arrangement between the Misses Lee and Applegate with regard to the use of the alley in question, he does not deny that both himself and Berges then had actual knowledge of the existence of the passageway'under the house and its use by the adjoining owners, and also of the peculiar clause in the deed from the Misses Lee to Lippincott of the complainant’s lot.

      Mr. Clarence L. Cole, for the complainant.

      Mr. August Stephany and Mr. William E. Potter, for the defendant.
   Pitney, V. C.

The agreed statement of facts does not state, in so many words, that the conveyances to Mr. Caemmerer and to Mr. Lippincott of their lots respectively were made upon the representation and understanding that they were to have the benefit of a passageway along the rear of the several lots to Mansion House alley. But I think that such is the fair inference from the facts, and the cause was argued upon that basis. Besides, it sufficiently appears from the affidavits. So with regard to the time when complainant’s house was built and occupied. That date sufficiently appears from the allegation and admission in the answer as to the date when the use for the removal of ashes, garbage &c. commenced, since such use clearly indicates the existence of a dwelling.

I find it quite impossible to avoid the conclusion that the object of the language contained in the conveyance to Lippincott was to give to each of the five lots remaining after the sale of the westernmost to Kelly a right of way in succession, commencing with the Caemmerer lot, over the rear of each- of the other lots, to Mansion House alley. That was in exact accordance with the plan adopted by the Misses Lee in putting these lots on the market, and when all the facts were presented to me on the argument of a motion to dissolve the injunction, I conceived the notion that it was possible that those words might be properly construed, when applied to the facts, as a grant to Lippincott of a right of way over the rear of the lots lying to the east of his lot to Mansion House alley, and also as reserving a right of way over his lot in favor of Caemmerer’s lot and the other lot between Caemmerer and Lippincott over Lippincott’s and the two lots to the east of it, for it is quite difficult to suppose that the parties could have intended to give to the two lots to the east of Lippincott’s a right of way over the rear of his lot to the Caemmerer lot, which was situate to the west of it. Those lots to the east of Lippincott’s could have no possible use of a right of way across the rear of it. So strong was this notion that I advised that the injunction be dissolved upon terms that Mrs. Haslett should have the privilege of setting up a special plea to the action of trespass which had been enjoined, so that the question of the construction of that clause could be submitted to the proper court. That course was taken, and a plea was filed and stricken out, on motion, upon the merits, to wit, as I understand the opinion, that the clause could not be so construed. By that decision I am bound.

Upon that result Mrs. Haslett, in order to succeed, must establish a right to reform the deed to Lippincott in that respect, so as to make it correspond with the clear intention of the parties.

That the language is a palpable blunder is too clear for argument ; and, as before observed, the real object must have been to give the lots to the west a right of way over the lots to the east to the Mansion House alley. There is no dispute as to that object, as between the Misses Lee and Lippincott; so that it seems to me quite clear that as between the complainant, who succeeds to Lippincott’s rights, and the Misses Lee, complainant is entitled to have the deed reformed accordingly; or, in other words, she is entitled in equity to have the same benefit of it as if it had expressed the exact intention of the parties. Further, I think that the burden of this right was cast upon Mr. Apple-gate by the actual notice which he received of it when he purchased from the Misses Lee, contained in the verbal agreement between them. In other words, Applegate undoubtedly had actual notice of the plan which the Misses Lee had adopted of establishing and maintaining this alleyway for the benefit of the other lots, and he had constructive notice of the attempt to give it in writing, contained in the deed to Lippincott. So that I think the equity might have been enforced against Mr. Applegate.

This, it is to be observed, is not a question of creating an easement by parol, nor yet of a parol license given for a valuable consideration, which has been executed. There is, indeed, a full and valuable consideration, viz., the payment by Lippincott to the Misses Lee of the purchase price for his lot. Here, again, the stated case does not mention any consideration, yet that there was a valuable consideration was a conceded fact, and the omission to state it was an oversight of mine in dictating the agreed ‘facts. It is, however, fairly inferable from the other facts.

The serious question in the cause is whether or not Mr. Stephany is chargeable with notice of this equity.

Let us see of what, precisely, he had notice. He had constructive notice of the several conveyances made by the Misses Lee' prior to that to Applegate, his grantor. These were, first, that to Kelly of the lot next to North Carolina avenue. Next to that conveyance is the one to Caemmerer of a lot adjoiuing Kelly’s on the east. Next is that to Lippincott of the complainant’s lot (and of this the fair inference is that he had actual notice), containing the peculiar reservation above stated, viz.:

. “ Excepting and reserving, nevertheless, a strip of land on the rear or back of the said lot three feet wide for the use and accommodation,of the owners or occupants of the two lots adjoining on the east and the two lots adjoining on the west of the lots herein conveyed.”

A strict construction of this language would indicate that the lot complainant set about to purchase from Applegate had a right of way across the' Lippincott-Haslett lot, and in order to exercise that right, it must also have a right of way across the Harkins lot, and if defendant examined the deed to Harkins, made after that to Applegate, he found that such right was reserved. Now, it seems to me that it must have struck complainant that there was some mistake in the language used, and that it was not the intention to give the Applegate lot a right of way in the rear of complainant’s lot, but that the intention was precisely the converse. Next, he had actual notice, in pais, that Mr. Applegate, when he built on his lot, had, as shown by the plan accompanying the state of the case, covered the wholelot, with his building, but had left a covered alleyway in the rear three feet wide and up to the height of the top of the first story, and he had notice that it opened to the adjoining lots, and was in actual use by their occupants.

Now, it seems to me that it was impossible to escape the inference that such a peculiar and unusual arrangement of a building must have been made for the purpose of leaving a passageway for the benefit of the adjoining property. The location and situation show this. Such a passageway could, so far as appears, be of no use to the Applegate lot, which, as we have seen, abutted on the Mansion House alley, and was entirely covered by the building.

Then defendant had further notice that the occupants of the lots to the west had been in the habit for several years — the bill alleges since 1880, and the answer admits since 1881 — of using this covered passageway to remove the ashes, garbage, kitchen and house waste from their dwellings. For this purpose its use was of great consequence to them. The plot shows that the buildings on these lots cover the whole front, leaving no passageway from the street to the rear for such purpose, and without the outlet here in question they will be compelled to carry out this refuse material through their dwellings to the street in front.

That the situation of the premises conveyed and objects thereon may be sufficient to put a party on inquiry is sustained and illustrated by the adjudged cases. In Hervey v. Smith, 1 K. & J. 389 (on application for injunction), and 22 Beav. 259 (on final hearing), the facts were that A, the owner of a building, sold to B, the owner of the adjoining premises, the right of using two chimneys in A’s wall. The consideration was paid, and the chimneys were used for eleven years, but no grant was executed; C purchased A’s house without notice of the right; but there being fourteen chimney-pots on the wall and only twelve flues in A’s house, held that C was put on inquiry of the right, and was bound by it, and an injunction was granted to restrain him from stopping up the two chimneys. It was held, also, that it was unnecessary that the bill should pray for a specific performance and- that the absence of a grant was immaterial.

In Davies v. Sear, L. R. 7 Eq. Cas. 427 (1869), the defendant purchased a house with an archway under it, wide enough for the use of horses and wagons, leading to a yard in the rear in which certain stables were being erected. It was held that the condition of the premises when he purchased them was notice to him that they were prepared for the purpose of giving access to stables. Lord Romilly, in his opinion (at p. 1$2), uses this language: In the first place, he saw distinctly the archway; he bought the house subject to the archway; for what purpose did he suppose that the archway was made unless as a mode of access? * * * He-could hardly believe that the archway was meant as an ornament, without use to anyone. The foot-pavement was interrupted, the curbstone rounded off on each side and the entrance paved as is usual in entrances into mews. The mews themselves were then in course of erection and one side had been, if not completed, at least sufficiently erected to show the scope and plan of the building.” Further on he says : “A man cannot take the assignment of the lease of a house having an archway and road under it leading to a mews, and abstain from looking at the plan by which the adjoining ground is laid out and intended to be built upon; he cannot stand quiet and see it gradually become covered with houses so that every access or means of communication with the mews is shut out except this one, which he had always known was intended to be used as a means of access, and then say this easement was not reserved, although there was an archway and road under the house/ It does not lie in his mouth to say, I did not understand that you intended to close all other means of access and leave this as the only existing one/ ”

In the case of Raritan Water Co. v. Veghte, 6 C. E. Gr. 463 (at pp. 478, 479), the condition of the premises when the complainants purchased, and the actual diversion of the water, was held to put the complainants upon inquiry.

For these reasons I think that the facts above stated, which were clearly within the defendant’s knowledge, were sufficient to put him upon inquiry. The general doctrine that facts which are sufficient to put a party upon inquiry are sufficient to charge him with all such knowledge as he would have acquired by a proper inquiry in the ordinary course of business, is, as I take it, thoroughly established in this state. It was so held in the court of appeals in the case just cited, and that case followed Hoy v. Bramhall, 4. C. E. Gr. 563, in the same court. The doctrine of those cases has always been followed in New Jersey, and I do not understand that there was any intention to overrule them in the case of Lawrence v. Springer, 4 Dick. Ch. Rep. 289. That was a case of an allegation that a certain party acted upon the strength of the silence of another who had notice of what he was doing. It was held that the facts were not sufficient to charge the party with notice: and further, that there was no contract, verbal or otherwise, and no consideration paid for the right which was set up.

How, coming to the conclusion that the defendant had knowledge of facts which made it his duty to inquire as to the rights of these persons, including the complainant, who were using this passageway in the way described, the next question is, What information would he, in the due course of business, have acquired if he had made proper inquiry ? His first duty was to inquire of those who were using the passageway, to learn from them what their claim was. And, in the second place, to inquire of his own immediate grantor, and, in succession, of his grantor, as to what right the claimants had. Now it seems to me that if he had made that inquiry, it must be presumed that he would have ascertained the truth, which was that Mr. Applegate had bought his premises on the understanding that the owners to the west of it were to have a right of passageway three feet wide, and that he built the passageway in question in express acknowledgment of that right. He would further have learned, as I infer from the admitted facts, that the complainant and other persons in like situation had constructed their houses upon the strength of their supposed right of passage over the rear of the defendant’s lot.

For these reasons, and upon the whole case, I think the complainant is entitled to relief. She not only prays that the suit at law may be enjoined, but that the defendant may be enjoined from obstructing the alleyway or depriving her of the full and complete use and enjoyment of the same as hitherto, and for further relief. I think that a reformation of the deed is fairly within the prayer for other relief. But she is clearly entitled to the injunction against interfering with the right of way, and I am not sure that an actual reformation here is necessary. It was held to be unnecessary in Hervey v. Smith, supra.

I will advise a decree accordingly.