author: Beret, V. C.

text:
    Standard Realty Company, body corporate, complainant, v. Herbert Gates et al., defendants.
    [Decided March 1st, 1926.]
    1. At common law neither a tenant at sufferance nor a tenant at w-ill was entitled to notice to quit; but by statute both are now entitled to such notice.
    2. The sufficiency of notice to quit is governed by the Landlord and Tenant act and not by the District Court act, the provisions of the latter laict with respect to notice being jurisdictional requirements.
    3. A mere demand for possession is sufficient notice to. a tenant at sufferance, hiut it must be served in the manner provided by section 109, subdivision ISa of the Landlord and Tenant act, prior to issuance of summons.
    4. A tenant at will, being considered as a tenant from year to year, is entitled toy statute to three months’ notice to quit, but this notice need not be sewed .personally. Notice by mail is sufficient.
    5. Specific performance of a contract for the sale of land will not be decreed against an unwilling vendee where there is a debatable question of law or fact affecting the title to the land the subject of the sale, and which question is likely to involve the vendee in a law suit in defense of his title.
    6. Where, however, the refusal of the purchaser to perform is based upon the alleged existence of an encumbrance in the nature of a lease, which the court finds in fact does not exist, specific performance will be decreed.

      7. Impending litigation, which, will excuse a vendee from performance of a contract for the sale of land, must be litigation which has some possibility of success. A mere threat of litigation, based upon a misconception of the law or upon an alleged state of facts, which, the court finds does not exist, is insufficient.
    On bill for specific performance. On pleadings and proofs.

      Mr. Ward Kremer and Mr. Joseph, K. Striclcer, for the complainant.

      Messrs. Andreius & Turnen, for the defendants.
   Beret, V. C.

This bill prays the specific performance of a contract for the sale of land and an office building erected thereon, located in the city of Asbury Park. The complainant is the vendor and the defendant the vendee. The terms of the contract are not in dispute. The purchase price of the property was'$150,000. The contract contained the following clause:

“This sale is made subject to the following leases now on the building:
S. S. Adams & Company, lease expires April 1st, 1932.
May Epstein, lease expires April 1st, 1930.
Max Eisenberg, lease expires April 1st, 1926.
Calogers Aguiliano, lease expires April 1st, 1926.
Sam Lee, lease expires April 1st, 1926.
G. Ered Beegle, lease expires April 1st, 1926.
City of Asbury Park, lease expires Apirdl 1st, 1926.
This agreement is also made subject to a lease executed by the Standard Realty Company and T. Frank Appleby, said lease expiring April 1st, 1932.”

The agreement is dated April 8th, 1925, and provides for settlement on October 1st, 1925. Fifteen thousand dollars was paid by the defendant to the complainant on account of the purchase price. At the time fixed for settlement the defendant refused to perform, alleging that the vendor had misrepresented the facts concerning the lease of the city of Asbury Park, in that that lease did not expire on April 1st, 192.6, but there was a three-year lease expiring April 1st, 1928; that this representation was a material inducement to the contract and that the alleged longer term lease constituted a defect in the title or an encumbrance on the property subject to which he was not obliged to and would not take title. The defendant has also counter-claimed for loss alleged to have been sustained by him because of the complainant’s inability to comply with the terms of the contract of sale, which the defendant alleges, prevented a resale of the premises by the defendant at an advance of $30,000. Defendant demands this sum as damages as well as the return of the $15,000 paid under the terms of the contract. It is undisputed that the defendant did have a contract of resale at the advanced price stated, and settlement thereunder was to have been made at the same time that settlement under the contract, the subject of this suit, was to have been made. None of the facts in this cause are in dispute except as to the existence of a lease with the city of Asbury'Park, the contention of the complainant being that the city had no lease, or, if it did have a lease, that that lease expired on April 1st, 1926, and the defendant contending that the city’s lease was a three-year lease expiring April 1st, 1938. The facts with reference to the city’s tenancy, as I find them from the testimony, are as follows: The city of Asbury Park had been a tenant of a portion of this building for six years prior to April 1st, 1925, under three-year leases. Before the expiration of the last lease the complainant notified the city that the rent for the ensuing year would be $2,750, and if it desired to continue its tenancy for another three-year term the rental would be increased $250 each year. The city clerk then communicated to an officer of the complainant company the fact that the current appropriation would not permit of an increased rental for 1925, and as the result of this the complainant agreed to a modification of the rent for 1925 and offered a one-year lease at the adjusted rental. This one-year lease was prepared by the agent of the complainant and forwarded to the city clerk on April 16th, 1925. It was never executed by either party and no rent was ever paid by the city for 1925. There is no record on the minutes of the city commission of any action on this lease. There is a record on the minutes of the city commissioners’ meeting, held on April 7th, 1925, of a resolution authorizing the mayor and city clerk to execute a three-year lease with the complainant for $2,500 for the first year, $3,000 for the second and $3,250 for the third, but such a lease had never been offered to the city.

After the contract was made, and along in August, 1925, a- controversy arose between the city and the complainant as to the city’s lease, the officials claiming that the city had a three-year lease and the complainant alleging that the lease was for one year only. The whole basis of the city’s claim that it had a three-year lease is a telephone conversation which the city clerk alleges she had with an officer of the complainant, which that officer, called as the defendants’ own witness, denies. It is quite clear that the city was in possession of a portion of this building' without any leasé at all, .The complainant had refused the three-year lease and the city had failed to act on the one-year lease which the complainant had submitted. The minds of the parties had, therefore, never met on the subject of a new lease. The city was therefore a hold-over tenant, a mere tenant at sufferance, or, at the most, a tenant at will. The city has given notice, however, that it intends to remain in possession of said premises under the claim of a three-year lease until ousted by a court of competent jurisdiction.

■ On December 16th, 1925, the complainant gave the city ¡of Asbury Park written notice to vacate the portion of the building of which it was in possession, on April 1st, 1926. •This notice was sent to the city commissioners by registered mail, duly received by them, and on December 17th, 1925, the usual registry receipt card, signed for the commissioners, was returned to the complainant. Under these circumstances defendant claims that if he were obliged to accept title to the premises, the subject of this contract, he would be purchasing a law suit, and this, he claims, he is not obliged to do.

The first question which presents itself is as to the -nature of the tenancy of the city of Asbury Park. As already stated, this tenancy must be either one at sufferance or at will.

A tenant at sufferance is one who comes into possession of land by lawful title, usually by virtue of a lease for a definite period, and after the expiration of the period of the lease, holds over without any fresh leave from the owner. 2 Bl. (Lewis’' ed.) 160; 1 Washb. Real Prop. 383; Poole v. Engelke, 61 N. J. Law 124.

A tenant at will is one who enters into possession by virtue of permission of the owner or pursuant to a lease for an indefinite time, holding during the joint wills of the parties, either party having the right to terminate the tenancy at any time. 2 Bl. 145; 1 Washb. Real Prop. 870; McEowen v. Drake, 14 N. J. Law 523.

It would seem to be perfectly clear, therefore, that the city of Asbury Park was a tenant at sufferance unless the landlord, -the complainant here, after the expiration of the city’s three-year lease, either expressly or impliedly consented to a continued occupation of the premises, in which case a tenancy at will or from year to year would arise. Yetter v. King Confectionery Co., 66 N. J. Law 491.

Estates from year to year have been developed gradually from estates at will by judicial legislation. 1 Washb. Real Prop. 382; McEowen v. Drake, supra.

In my judgment, however, the character of the city’s tenancy was one at sufferance. It was certainly that immediately after the termination of the city’s three-year lease, and the fact that the complainant refused thereafter to- accept any rent from the city, indicates a refusal on the -landlord’s.part to consent to the creation of a new tenancy.

The next question which arises is whether or not the complainant, since October 1st, 1925, has done anything to change the character of the city’s tenancy or in any way extend the term of that tenancy beyond April 1st, 1926. This involves the question of what notice to vacate is required to be given to the city under the circumstances of this case, the sufficiency of the notice already given or whether or not the tenancy may still he terminated on April 1st, 1926, by a proper notice to the tenant.

A tenant at sufferance holds by laches of the landlord, is not in privity with the landlord, and the tenancy could, at common law, be terminated at any time without notice. At common law neither a tenant at sufferance nor at will was entitled to notice to quit. 1 Washb. Real Prop. 394; Moore v. Moore, 41 N. J. Law 515; Moore v. Smith, 56 N. J. Law 446; Gouvernator v. Kenin, 66 N. J. Law 114.

The common law rule respecting notice to tenants at sufferance and at will has been changed by statute in this state so that now both tenants at sufferance and at will are entitled to notice to quit. Landlord and Tenant act, 3 Comp. Stat. pp. 3072, 8077 §§ 18c, 29; 1 Cum. Supp. Comp. Stat. p. 1778 § 109 subdiv. 18a.

Considerable uncertainty and confusion with respect to the required notice to tenants at will and at sufferance has been caused by attempts by the legislature to engraft on the Landlord and Tenant law some restrictions and requirements through the medium of the District Court act; but the sufficiency of notice is governed by the Landlord and Tenant act and not by the District Court act. Van Vlannderen Machine Co. v. Fox, 95 N. J. Law 40.

The provisions for notice in landlord and tenant cases, as contained in the District Court act, are merely jurisdictional .requirements. An examination of our statutes will disclose the fact that there has never been any requirement in the Landlord and Tenant act that a notice to quit be given to a tenant at sufferance any particular length of time before the date, on which such tenant was required to surrender possession.

In Moore v. Moore, supra, it was held that a tenant at sufferance is not entitled to notice at common law, and under the Landlord and Tenant act a previous demand of possession only is required as a condition upon which a summons may issue. Citing P. L. 1876 p. 76 1 (Rev. p. 576).

The provisions of the Landlord and Tenant act requiring notice to tenants at sufferance in force to-day will be found in 1 Cum. Supp. Comp. Stat. p. 1778 § 109 subd'kx 18a, and it will be noted that that act requires no more than a demand for possession, and that such demand would be sufficient if made immediately preceding the issuance of summons.

Sections 107 and 109 of the District Court act of 1898 provide for certain notices to quit in cases. of tenancy at sufferance or at will as jurisdictional requirements for ouster of a tenant in possession by the processes of that court. Section 109, as originally drafted, required three month notice to both tenants at sufferance and at will. Gouvernator v. Kenin, supra. What is now section 107 of the District Court act was section 123 of the first general District Court act of 1877, and the present section 109 was section 126 of the original act. The jurisdictional requirements of three months notice to tenants at sufferance and at will was contained in that act. Rev. 1877 p. 1800. In the case last cited Mr. Justice Fort held that, notwithstanding the provisions of section 107 of the District Court act requiring notice to tenants at sufferance to be in writing and served in the manner specified by that section, section 109 modified this requirement as to tenants at sufferance and at will, and there said:

“The drafter of section 109 should have left out the words ‘at sufferance5 if the three months5 notice was not intended to be given in such cases. To require such a notice is clearly a hardship and useless, but the statute requires it in tenancies ‘at sufferance,5 and the facts proven in this case show tenancy ‘at sufferance.5 55

He then held, however, that a verbal notice given to a tenant at sufferance was sufficient. That case was decided February, 1901, and at the then session of the legislature section 109 of the District Court act was amended so as to leave out the words “or at sufferance,55 evidently because of this decision. This section of the District Court act as it appeared in the original act of 1877, and as was continued until 1901, is the only statutory requirement of notice for any specified time in tenancies at sufferance which my examination of the authorities has disclosed. At the time this act was in force there was no similar provision in the Landlord and Tenant act, nor has any such provision since been inserted in that act by the legislature; but in 1903 the legislature amended the Landlord and Tenant act by requiring three months' notice to quit in tenancies at will and from year to year. 8 Comp. Stab. p. 8072 § 18c. At no time in the history of this state, therefore, either at eommon law or by statute, has there been any requirement of any notice for any particular length of time to tenants at sufferance except during the period when section 126 (now section-109) of the District Court act, as originally enacted, was in force; and this was merely a jurisdictional requirement in that court. In my judgment, therefore, the notice requiring the city of Asbury Park to terminate its tenancy on April 1st, 1926, may be given on any day prior to that date, even up to the 31st day of March. There is some mention in the books of a three days' notice in tenancies at sufferance, but I find no statutory or common law authority for this sort of notice, except for non-payment of rent. Nix. Dig. (1868) 422; Schuyler v. Trefren, 26 N. J. Law 213; Fowler v. Roe, 25 N. J. Law 549. The notice required in tenancies at sufferance, however, must be in writing, and must be served “either personally upon the tenant or such person in possession by giving him a copy thereof or by leaving a copy thereof at his usual place of abode, with some member of his family above the age of fourteen years; or where, for any reason, such service cannot be had, then the same may be served by affixing a copy of such notice to the door of any dwelling on such demised premises occupied by such tenant." 1 Cum. Supp. Comp. Stab. p. 1774, §§ 109, 18a subdiv. 1; Van Vlannderen Machine Co. v. Fox, supra.

If it be said, however, that the tenancy of the city of Asbury Park is one at will, in view of Yetter v. King Confectionery Co., supra, then and in such case no further notice is required to be given to the city than that which was given on December 16th, 1925. In tenancies at will, or . from year to year, the statute requires, as above stated, a three months’ notice, but that notice is not required to be served in the same manner as notice in cases of tenancies at sufferance. A notice served by mail, or even a verbal notice, is sufficient. Gouvernator v. Kenin, supra. Whether, there-, fore, the tenancy of the city be one at sufferance, at will, or from year to year, that tenancy may be terminated on April 1st, 1926, which is the date of expiration of the city’s tenancy given by the complainant in the contract of sale. Ther.e has been, therefore, no misrepresentation by the complainant as to the city’s tenancy.

If the defendant now takes title he may terminate the city’s tenancy at sufferance by service of the required notice. If the tenancy is- at will, then, in my judgment, the notice already given on December 16th last is sufficient. The foregoing remarks are not, of course, intended to apply to notices required under recent emergency legislation respecting dwellings, as those acts are not here involved.

But it is contended that, because of the city’s contention that its tenancy does not expire until April 1st, 1928, the acceptance of title by the defendant will force upon him a lawsuit, and that he is not obliged to purchase a lawsuit. That statement, as a general proposition, is correct, but, in the language of Vice-Chancellor Stevenson, in Barger v. Gery, 64 N. J. Eq. 263: “When the authorities speak of the hazard of litigation, to which the purchaser must not be subjected * * * they must refer to a hazard which is to be determined by the chance of successful attack, as viewed by the court in the suit of specific performance.”

Considerable space is taken up in the brief of counsel for defendant by the argument on the question of the right of the complainant in a specific performance suit to force a defective title upon an unwilling defendant. But here there is no defect in title. There is not even a suggestion anywhere that the complainant’s title is not perfect. The only objection which has been made is based upon the existence of a lease held by the city of Asbury Park for a longer term of years than that specified in the contract. I have already determined that the city’s lease does not extend beyond the time mentioned in the contract; but even if it did, it would constitute merely an encumbrance upon the property, and not a defect in the title, and an encumbrance for which there might, under the circumstances of this case, be compensation to the vendee for deficiency. Van Blarcom v. Hopkins, 63 N. J. Eq. 466. This is the contention of complainant; that if the city’s lease is for a longer term than that specified in the agreement of sale, as that lease covers only a small por-'’ tion of the building which is the subject of the sale, compensation may be made to the vendee on the decree for specific performance. But as no such encumbrance exists, it is unnecessary to discuss this question further.

Any impending litigation which might excuse the vendee from performance, it seems to me, must be litigation which has some possibility of success. The fact that the city of Asbury Park has indicated that it desires to indulge itself in a lawsuit at the expense of its taxpayers' does not necessarily excuse the defendant from performance, especially when it is so clearly apparent that the city’s ’ claim is without any basis either in fact or law. Professor Pomeroy, in his work on Spec. Perf. Coni, (at p. 52B) § 20U, has this to say .on this subject:

“Whatever be the cause from, which the doubt arises, whether from an unsettled principle of the general law, or from the difficulty of construing instruments, or from past facts and events, it must be something more than a mere speculation, theory or possibility. A court of justice, in all its investigations, deals with arguments more or less based upon a balance of probabilities, -and in rendering its decisions must be satisfied if it reaches a conclusion which, is morally certain. To admit of objections which were purely speculative, or mere possibilities, would destroy the practical efiicacy of all judicial proceedings. A doubt covering the vendor’s title, therefore, which can avail to defeat' his remedy of .specific performance, must be reasonable, and, so far as it depends upon contingent events or uncertain facts, their occurrence or existence miust be fairly probable.”

In the note to this section he quotes Alderson, B., in Cottell v. Corrall, 4 Y. & C. Ex. 237, as saying: “There must be a reasonable, decent probability of litigation.”

Further quoting from cases therein cited:

“But a threat, or even the possibility of a contest, will not be sufficient. The doubt must be considerable and rational, such as would or ought to induce a prudent man to pause and hesitate, and not based upon captious, frivolous and astute niceties, but such as to produce real bona fide hesitation in the mind of the chancellor.”

As stated before, there is here no claim of defective title, but merely a claim of the existence of an additional encumbrance in the form of a lease. The possibility of successful litigation establishing this lease as claimed by the city, and, indeed, the probability of any litigation at all, is, to my mind, so remote that any further consideration of the ■question is unnecessary.

With respect to the counter-claim of the defendant, this, of course, must be denied. The testimony, pleadings and evidence indicate that the defendant voluntarily canceled his agreement of resale and returned to the vendee the down money, so that he is not in any position to claim damages from the complainant on account of his loss on that contract of resale. The Vendee’s refusal to accept title being based on the same reason as the defendant’s refusal to take title from the complainant, specific performance of that contract might have been had if it had not been canceled.

I will therefore advise a decree in favor of the complainant, in accordance with the prayer of the bill, and a dismissal of the counter-claim.


source: Caselaw Access Project

author: Berry, V. C.

license: Public Domain

text:
    Walter Reade, complainant, v. Broadway Theatre Company of Long Branch, a corporation, et al., defendants. Walter Reade, complainant, v. Savoy Theatre Company, Limited, of Asbury Park, a corporation, defendant. Walter Reade, complainant, St. James Theatre Company, Incorporated, defendant.
    [Heard January 32th, 1926.
    Submitted March 2d, 1926.
    Decided March 3d, 1926.
    Filed March 8th. 1926.]
    1. A court of equity will not permit the dissolution of a corporation, even on application of a majority of the stockholders, where such dissolution would constitute a fraud on the minority stockholders.
    2. Where the manager of a corporation who was a stockholder therein permitted the -corporation to be dissolved by proclamation of the governor for non-payment of its franchise tax, such action is not a proper basis for the appointment of a receiver on the application of the defaulting stockholder where such appointment would result in a fraud on the remaining stockholders, and where the corporation was not insolvent, and could have paid its taxes.
    On bill, &c. On order to show cause.

      Messrs. Stein, Stein & Hannoch, for the complainant.

      Messrs. Pitney, Hardin & Skinner for the defendants.
   Berry, V. C.

These three suits were consolidated by order of this court entered January 12th, 1925. The parties are the same in each suit and the suits have a common object, namely, the appointment of a receiver for the defendant corporation. On the return of the rule to show cause the defendants Alice Oppenheim and George J. Baumann, surviving executors and trustees, &e., filed answers and counter-claims in each suit. The defendant corporations have not answered. The complainant has also moved to strike out the counter-claims on the ground that they present legal and not equitable claims.

The three defendant corporations were organized under the General Corporation act of this state on July 1st, 1916. According to reports on file in the office of the secretary of state the companies organized by the election of three directors — a president, secretary and treasurer. The complainant, Walter Reade (formerly Walter Rosenberg), and his father, Henry Rosenberg, were each owners of one-half of the capital stock of each company. This is the situation at present, except that the stock then owned by Henry Rosenberg is now held by his executors and trustees, he having since died. The companies own valuable lands in the cities of Long Branch and Asbury Park, and operate theatres erected thereon. Prior to April 30th, 1917, the complainant and his father managed these three corporations, and from all that appears in the pleadings the legal requirements respecting corporate management were observed. No directors’ or stockholders’ meetings have, however, been held since April 30th, 1917. On that date these parties, father and son, having disagreed respecting their previous management, entered into a written agreement under the terms of which the 'complainant became the active manager of the three corporation “subject to the approval of the board of directors of said several cor pomtions.” Under this agreement the complainant became entitled to receive all of the net profits of the company and ,all of the dividends earned or declared on all of the stock of the companies issued and outstanding. He agreed to pay to his father, in lieu of dividends, the sum of $10,000 a year in equal monthly installments of $833.33 during the term of the agreement. He further agreed to pay all of the expenses of the operation of the three companies, assume and pay all liabilities incurred by them, pay all debts, assessments, interest on mortgages and other charges, pay all debts and liabilities of the corporations then existing, save his father harmless from any liability thereon and to manage the business of the corporation so “as not to jeopardize the capital stock or interests of the party of the first part” (Henry Rosenberg was the party of the first part). The agreement also provided that the property of the several corporations should not be sold, mortgaged, leased or encumbered by either party to the agreement or by the officers or directors except upon consent and vote of three-fourths of the stock of .each corporation. -This provision of the agreement was valid and binding as between the parties, irrespective of its validity under the Corporation act or the charters of the companies. All improvements or additions to the land and buildings of the companies were to be at the expense of the complainant, except that in the event of a new theatre being erected on a vacant lot of one of the companies in Asbury Park, it was provided that on the termination of the agreement Henry Rosenberg should pay to the complainant one-half of the then value of the building. Other provisions respecting the rights and liabilities of the parties were contained in the agreement but are immaterial to this issue and need not be now mentioned. The agreement provided that it should continue for a term of ten years and that it should be binding upon the heirs, executors, administrators and assigns of the parties.

Henry Rosenberg died on February 11th, 1923, leaving a last will and testament in which he appointed his widow, Anna Rosenberg, since deceased, Alice Oppenheim and George ,J. Baumann, as executors and trustees. The will creates several trusts, refers specifically to the stock in these three corporations and recommends that the trustees retain that stock, but suggests that in the event that a sale of the stock seems advisable, it be sold as a ‘lump sum.” The complainant has, apparently, performed his obligations with respect to management of the corporations, except that he neglected to pay the franchise tax assessed against the various coim ¡pañíes for 1917, 1918 and 1919, and in 1920 all three of the corporations were dissolved by proclamation of the governor for non-payment of the franchise tax for 1917. The bills of complaint in these several suits were filed on October 19th, 1925, and on October 21st, 1925, the franchise taxes assessed against these companies for the years 1917, 1918 and 1919 were paid by the complainant. The bills recite that these taxes “are being paid.” Since the death of Henry ¿Rosenberg there has been no meeting of the stockholders or directors of the corporations and the vacancies in the boards of directors and in the various offices caused by his death have not been filled. The complainant is, apparently, the sole surviving officer and director of the company. The complainant alleges in his bills that he has been advised that under the circumstances above detailed he has become a trustee in dissolution of the corporations. The bills of complaint also each contain the following clause:

“9. That complainant has applied to said surviving executors and trusteees to sell to him their interest in said corporation, but the price which said surviving executors and trustees have fixed is so much in excess of the fair value thereof that complainant is unwilling to pay same. Complainant has suggested that the assets of said corporation be sold, but said surviving executors and trustees refuse to join in a sale.”

The bills pray for the appointment of a receiver to convert the assets of the corporations into cash and wind up their businesses as on dissolution.

It seems to me that this is nothing more nor less than a bald attempt on the part of the complainant to compel the executors and trustees of his father’s estate to sell to him at his own price the capital stock of these various companies owned by the estate under penalty of a receivership for their refusal. The sole ground of this application is the dissolution of these three companies by proclamation of the governor for non-payment of taxes. This dissolution resulted from the complainant’s own default and neglect. Under the terms of the agreement above referred to, it was his duty to pay the franchise taxes and to preserve the corporations and to protect the stockholders in every way, so that their interests would not be injuriously affected by his management. Having defaulted in the payment of the franchise taxes and the corporations having been dissolved by the governor on that account, it became the duty of the complainant to apply, in the manner prescribed by statute (-4 N. J. Comp. Stat. p. 5295 § 518), for reinstatement of the corporations, and .that he may be compelled to do this is one of the objects of the counter-claims. The bills advance both a reason and an excuse for this application. The reason is the dissolution of the corporations by proclamation of the governor, which, to my mind, is no reason at all under the circumstances of this case. It is not every case of dissolution of a corporation which requires the appointment of a receiver. The court of chancery may appoint a receiver in a proper case (2 Comp. Siat. p.' 1686 § 56), but this provision of the statute is not mandatory. Each application must stand on its own bottom. Receivers are appointed in cases of insolvency almost as a matter of course, but here there is no suggestion ,of insolvency. In fact, from all that appears in the pleadings it may be assumed that these corporations are perfectly solvent and have no debts. The excuse for the filing of the bill is that offered in paragraph 9 above quoted, that the executors and trustees of complainant’s father’s estate will pot sell the stock to him at his price. I consider this a poor excuse. In short, the complainant is seeking to take advantage of his own default and by reason'thereof to compel his father’s estate to sell out to him at his own figure.

Complainant attempts to bring this case within the rule of Jackson v. Hooper, 76 N. J. Eq. 592, bnt, in my judgment, that rule has no application here. In that case there was an agreement between the two stockholders owning all the stock of the corporation that the corporation should be treated and conducted as a partnership and that the directors other than these two parties should be merely nominal directors and have no control whatever of the business of the company. ,The court of errors and appeals held that a court of equity has no power to take corporate property into its control as ■upon the dissolution of a partnership-, but that the rights of the parties must be administered as shareholders in the corporation and not as partners, and that the agreement that the so-called “dummy” directors should have no voice in the management of the company’s affairs was unenforceable. But in the case mb judice there is no suggestion that this is a partnership agreement, nor that the rules applying to partnerships should govern. The agreement between the complainant and his father did not contemplate a disregard of the provisions of the Corporation act with respect to corporate management, nor was the agreement illegal under that act. The management of the various corporations by the complainant was expressly subject to the approval of the boards of directors of the several companies, and it was specifically provided in the agreement that the complainant in such management should do nothing which would “jeopardize” the capital stock or interests of the other stockholders. I think it is clear that the agreement contemplated a maintenance of the corporate organizations by the complainant, and it is not his privilege to use his own default in this regard as a basis for a receivership on his own application. The business of these corporations, notwithstanding their dissolution by proclamation of the governor, has been and still is being conducted as usual under the management of the complainant. The corporations are not dead (Held v. Crosthwaite, 260 Fed. Rep. 613); they merely sleep. They are practically in a state of coma from which it requires the exercise of no miracuIons power to revive them. The procedure for their revival is plainly indicated by the statute. The complainant is now attempting to forestall a revival and to- effectuate a voluntary dissolution of the corporations through the medium of a receivership in the court of chancery. A voluntary dissolution may be had only in the method prescribed by statute, or, if through the courts, where it appears for the best interests of the stockholders and creditors; but a court of equity will not permit the dissolution of a corporation even on application of a majority of the stockholders where such dissolution would constitute a fraud on the minority. Riker v. United Drug Company, 79 N. J. Eq. 580. Here the application for dissolution is by á holder of less than a majority of the stock and it appears that it is a clear attempt to perpetrate a fraud on the remaining stockholders. I feel that under the circumstances I am obliged to deny the appointment of a receiver and also the motion to strike out the counter-claim, and an order will be entered to this effect.


text:
    Floyd Hilsinger et al., complainants, v. Joseph Schwartz, defendant.
    [Submitted April 24th, 1926.
    Decided May 1st, 1926.]
    1. Where the language of a building restriction is not obscure or ambiguous, no room is left for either interpretation or construction.
    2. Where a building restriction prohibited the erection of a stable within one hundred feet of a street, the ez-ection of a gaz-age within the prohibited area is not a violation of the covenant.
    On bill, &c. On final hearing.

      Mr. Aquilla N. Venino, for the complainants.

      Mr. Simeon H. Rollinson, for the defendant.
   Berry, V. C.

This bill prays an injunction restraining the defendant from the alleged violation of a building covenant contained in his deed, which, so1 far as pertinent to this inquiry, reads as follows:

“That the party of the second part * * * will not erect any dwelling-house upon the above-described lot within thirty feet of Mountain View avenue; * * * and no stable to be within one hundred feet of said Mountain View avenue.”

This matter is submitted on the pleadings, an agreed state of facts and briefs.

The defendant is erecting a three-car private garage on the restricted lot within thirty feet of Mountain Yiew avenue. The sole question to be determined is whether or not the erection of this garage comes within the inhibition against stables. I have no difficulty in reaching the conclusion that it does not.

This covenant had its origin in a deed dated July 34th, 1911, although similar restrictions, of slightly different wording and more strongly opposed to the complainant’s contention here, were imposed on other lots in the same tract as far back as 1897.

The contention of the complainants is that the word “stable,” as used in this covenant, should be read “garage,” because, counsel argues, the garage is the modem substitute for the stable; and from the language of the covenant it is apparent that the intention of the parties in its use was to prevent the erection of outbuildings on this lot within one hundred feet of Mountain Yiew avenue, and that the intention should control in the interpretation and construction of the covenant.

In Polhemus v. DeLisle, 98 N. J. Eq. 256, I said that, “in construing statutes and determining the meaning of ambiguous words or obscure language contained therein, inquiry is always made as to the intention of the legislature in adopting the act, and the object of the statute and the evil to be remedied, are always considered,” and that the same rule was to be observed in 'construing the wording of a restrictive covenant. This language is now cited by the complainants as authority for their contention that the intention- of the framers of the covenant should here control. While, “in construing a covenant entered into in pursuance of a general plan or scheme, the objects and purposes had in view by the original promoters are to be taken into considertion” (DeCray v. Monmouth Beach Club House, 50 N. J. Eq. 329), this familiar rule is applied only where the language, is obscure or ambiguous, and, where the language is unambiguous, clear and specific, no room is left either for interpretation or construction. Lynch v. Commercial Casualty Insurance Co., 93 N. J. Law 425.

It is also an established rule of construction that the words of a private grant, if equally susceptible of two meanings, shall be taken more strongly against him who uses them. Crane v. McMurtrie, 77 N. J. Eq. 545.

But, in my judgment, the meaning of the word “stable,” as used in this covenant, is plain, and is susceptible of but one meaning. At the time this restriction was imposed automobiles were in common use and garages were a common adjunct to the private home. If the parties had intended that garages should be prohibited within the restricted area, no doubt the word “garage” would have been included in the covenant.

It has already been held in this court in a well-considered opinion that a public garage does not come within the prohibition against linery stables as contained in a restrictive covenant. Bourgeois v. Miller, 89 N. J. Eq. 285. There Vice-Chancellor Baekes said:

“The l-ivery or sales stable may have been the commercial predecessor of the public garage, but the covenant against the one is not, therefore, to be extended by implication to the other.”

It seems to me that as a public garage is a modem substitute for a livery stable, and as a private garage may be said to have taken the place of a private stable, it follows under the authority of that case that the word “stable,” as used in the covenant here under consideration, cannot be read to spell “garage.” A stable, strictly speaking, is, undoubtedly, different from a garage, although I am aware that the word “garage” has been defined by the Century Distionary “to be a stable for the storage of automobiles or other horseless vehicles.” My judgment is that the word “stable” is here used in its strict sense, and that the restriction of location of a stable within one hundred feet from the street line was designed to prevent, to a degree, the annoyance of noise, odor and flies usually incident to a stable. The language of the covenant must, of course, be strictly construed as against the grantor and those claiming under him. But if there were any doubt in my mind as to the meaning of the word “stable” as here used, I should still be obliged to deny the relief prayed for, because “to doubt is to deny.” Fortesque v. Oar-roll, 76 N. J. Eq. 583.

It is common knowledge that private garages are to-day often built as an integral part of a dwelling-house, and to give this covenant the construction here claimed for it might prevent the construction on the defendant’s lot of a private garage connected with the dwelling; and this possibility may have been anticipated by the framer of the covenant, and may suggest a reason for not including the word “garage” in the language used.

While my attention has not been called to any New Jersey cases exactly in point, the exact question here presented has already been decided in at least one other jurisdiction. In Riverbank Improvement Co. v. Bancroft, 209 Mass. 217; 95 N. E. Rep. 216; 34 L. R. A. (N. S.) 730, it was held that a restriction against the erection of a stable on the restricted lot was not violated by the erection thereon of a garage.

My conclusion is that the word “stable,” as used in this covenant, does not include “garage,” and I will therefore advise a decree dismissing the bill.