text:
    Eugene C. Pomeroy et al., appellants, v. Josephine Pomeroy et al., respondent.
    Partition of land will not be delayed until the éstablishment, on an accounting in a pending suit in equity, of the amount of a possible lien in favor of one of the co-owners upon the shares of the others. Such lien will attach to the divided shares, and rights acquired pendente lite will be subject thereto.

      ' On appeal from an order of the chancellor confirming partition of lands under a decree advised May 20th, 1895, by the late ’Vice-Chancellor Green, who delivered the following opinion :
    . This bill is filed to partition the real estate of which George Pomeroy died seized.
    Mr. Pomeroy died in the year 1880, owning very large tracts of laud in Morris, Union and Hudson counties, including a homestead at Madison, enclosed by a park with a stone wall around it, called !ithe Homestead lot or tract.”
    His family and heirs-at-law consisted of his wife and his four children, George P., Edward, Julia and Josephine.
    His will was duly probated in Morris county and letters testamentary issued to Edward Pomeroy and Alfred Mills, who were appointed in the will as his executors. The provisions of the will were substantially—

      First. The executors were authorized to deliver to the New York Life Insurance and Trust Company securities to the amount of $50,000, to be held in trust for the benefit of his wife during her life, and upon her death to divide the securities and proceeds equally among his children Edward, Julia and Josephine. (His widow died February, 1883.)

      Second. Securities to the amount of $30,000 were directed to be deposited with the same company, to be held in trust for the benefit of his son George P. during his life, and at his death such securities and the proceeds thereof were also to be divided among the said children Edward, Julia and Josephine.

      Third. The testator directed that no partition or sale of his real estate should be" made until his executors should have sold real estate to the amount of at least $100,000, and directed the proceeds of the first of such sales to be deposited with the same company until the amounts should reach that sum, which was to be held and invested for the benefit of his daughters, Julia and Josephine, with instructions to collect and pay to each of them the interest on $50,000, with certain directions in the case of the death of either of them.

      Fourth. The residue of the estate, aside from some immaterial legacies, was devised to his three younger children, Edward, Julia and Josephine, in equal parts. It was provided that the homestead at Madison, New Jersey, should be kept up by the three younger children as long as they and the widow could live harmoniously &c.
    The son George P. Pomeroy was living in Europe. Edward Pomery took upon himself the main management of the estate and the sale of the real estate to procure the trust funds of $100,000 for the daughters and of $30,000 for George P. Pomeroy.
    Disputes arose between Edward Pomery and sisters some time about 1884, the sisters claiming that he had not paid over to them their proper share of the estate, and they commenced suit in New York against him, pending which suit he died, leaving a will by which he gave all his property of every kind and nature, real as well as personal, to his brother George P. Pomeroy.
    George P. Pomeroy, who had been cut off from the residuary estate of his father by his father’s will, was thus, by the will of his brother Edward, put in Edward’s place.
    In 1887 an agreement was entered into with reference to the estate between George P. Pomeroy and his two sisters, Julia and Josephine.
    George P. Pomery died in November, 1887, leaving all his property in the first instance to his son, Eugene C. Pomeroy, an infant, who is made a party to this suit, the estate being limited over to other persons, who are also made parties. Mrs. George P. Pomeroy died before her husband.
    The sisters, Josephine and Julia, subsequently claimed that the agreement referred to had been signed by them under a misapprehension and in fraud, and declined to carry it out, and Frank R. Chandler, who had been appointed administrator de bonis non of Edward Pomeroy’s estate and who was also the executor of George P. Pomeroy’s estate, filed a bill in the United States circuit court for the district of New Jersey to enforce that agreement. Julia Pomeroy having, after her father’s death, married "William Foster Morrison, the defendants to the suit were Josephine Pomeroy, Julia P. Morrison and William F. Morrison. While that suit was pending Miss Josephine Pomeroy filed her bill in this court for the partition of the real estate in New Jersey of which her father died seized, and, as I understand, similar actions were commenced in .the courts of New York and Missouri, in which states her father had died seized of real estate. After the partition bill was filed in this suit, pending the suit by Chandler to enforce the agreement, Judge Bradley granted therein a temporary injunction or stay of these partition suits pending the argument in that court. The cause was subsequently tried before Judge Bradley, who set the agreement aside. The case then went, by appeal, to the supreme court of the United States and the decree of Judge Bradley was reversed and the agreement held to be a valid agreement. 11$ U. S. §18. After the injunction had been granted by Judge Bradley, Mr. Chandler appeared in the New Jersey suit with a plea setting up the proceedings in the United States court and also that the injunction had been granted therein. That plea remained without hearing or decision until after the decision of the United States supreme court sending back the original suit to the circuit court. Once, the case being remitted to the circuit court by the supreme court of the United States to enforce the agreement, the case came on for hearing before Judge Green, and a decree was entered in compliance with the decision of the supreme court. The matter was referred to William L. Dayton, Esq., as master, to take and state the account of the transactions between the parties, and the master has since that time gone on with the accounting, which, it was represented on the argument, was practically completed. After the remission of the cause to the circuit court, counsel of Miss Pomeroy moved to dissolve the injunction restraining her from proceeding with the partition suits in the New Jersey, New York and Missouri courts. On this motion Judge Green filed this memorandum :
    “On motion to dissolve injunction restraining prosecution of suits for partition &c. Memorandum.
    “When Mr. Justice Bradley allowed an injunction to go against the defendants, restraining them from prosecuting certain suits for the partition of real estate in which the complainants and defendants were interested as tenants in common, and which were pending in the courts of New Jersey, New York and Missouri, he stated in effect that such injunction was to be temporary only, and was intended rather to prevent an embarrassment which might arise from a conflict of jurisdiction during the pending litigation seeking the specific performance of the agreement which has now been upheld by the supreme court as a good and valid agreement. He expressly said that in enjoining those partition proceedings at that time, it was not the intention of the court to permit the suit then under consideration by him to be converted into a suit for the partition of the lands in question. To these remarks of the learned justice I only add that I am unable to understand how lands situate in New York and Missouri can be legally partitioned by a court which has no jurisdiction over them.
    “ The parties complainant and defendant are, it is admitted, tenants in common of large estates, situate in those different states. Some of these tenants in common desire a partition of these lands in accordance with law. This is an undoubted right of a tenant in common, and no reason has been presented to the court of sufficient weight to cause any interference with such right, now the object of the injunction granted by Mr. Justice Bradley has been fully attained. It was avowedly to be temporary only in its duration. It ought not longer to be held over the heads of the defendants, barring them from asserting and enforcing their clear rights. No good purpose could be thereby accomplished, and the causes which warranted its original issue no longer exist. The motion to dissolve is granted.”
    And an order was entered April 3d, 1894, in accordance therewith, dissolving the injunction.
    Julia P. Morrison, having been divorced from her husband, "William Foster Morrison, was subsequently married to George P. Newell, who was made a party to the suit, and the plea heretofore mentioned, filed by Mr. Chandler, was withdrawn.
    Mr. Chandler was then appointed guardian for the infant defendant, and filed an answer, substantially, after admitting the undisputed facts of the case, setting out the will of George Pomeroy and also of Edward Pomeroy, and also setting out the agreement executed between the two sisters and their brother, and the proceedings in the circuit court of the United States, and the suggestion that this suit in partition of New Jersey property ought to be stayed because of the pendency of the suit in the United States court. The case was then set down for hearing on bill and answer.
    There is practically no dispute between the parties as to the facts of the case, viz., that there is real estate in this state, as well as in New York and Missouri, of which they are tenants in common. Counsel for the guardian of the infant, however, now applies to the court on behalf of the infant to have the proceedings in this case further stayed, on the ground that it is for the interests of all the parties, and especially of the infant, that all of the real estate in the three states should be partitioned in one proceeding. What that proceeding was to be, what court has jurisdiction to that extent, or how it was to be effectively accomplished, was not very clearly developed. The supreme court of the United States, in the case of Chandler v. Pomeroy, 143 U. S. 318, expressly avoided the expression of an opinion whether in that suit the court might proceed to a partition of the real estate. And on remitting it to the circuit court, Judge Green remarked that he was unable to understand how lands situated in New York and Missouri could be legally partitioned by a court which had no jurisdiction over them.
    It would appear to be the right of one tenant in common, in the absence of any restrictions upon the title, to have partition of the real estate, and this right should not be denied or postponed in enjoyment simply because the interests of some one or more of the other tenants in common might be advanced or improved by delay. The only suggestion made by counsel upon this point, which is entitled to consideration as a reason, was that the accounting before the master had not proceeded to a report, and it was not known as yet how the indebtedness between the parties would stand. But as suggested on the argument, this furnishes no obstacle to the court proceeding in partition, for if the amount due from one tenant in common to the other, is a claim or lien upon such daughter’s share in the real estate, the decree of the court can, and in fact always does, transfer, so to speak, the lien from the undivided shares to the share of the party as set off.
    The next ground urged for the postponement is that, by a fair construction of the agreement made between George P. Pomeroy and his sisters, the real estate is not to be partitioned until a settlement of the accounts between them.
    Confessedly the agreement does not expressly contain any such provision, nor does it seem to me that it is open to that construction on a fair reading of it.
    It is dated April 13th, 1887, after reciting in substance that Edward, at the time of his death, was indebted to Julia, Josephine and George P., or some one or more of them, to an unknown amount; that the parties desire to settle the estate of their father and their brother Edward without litigation, and to adjust the claims of the parties against Edward’s estate, suppressing and terminating the suits brought against him and pending when he died, and that they desired to vacate the provisions of their father’s will, in order to be equally charged with and equally to share in the estates of both George Pomeroy and Edwin Pomeroy, and to settle said estates and determine the value of the shares of each of said heirs, they agreed, in substance, as follows: (1) The remainder of the estate of George Pomeroy, the father, Avas to be equally divided among the three living children— Julia, Josephine and George P. (2) This division to be made as of the date of the death of the father. (3) To arrive at the interest to Avhich each should .be entitled at the date of the agreement, each was to be charged with the amount he or she had received, with six per cent, interest from the date of the receipt to the date of the document, payable annually. (4) The estate of Edward was to be divided and distributed equally between George P. and his two sisters, after payment of his just debts and the specific legacies of $6,500. (5) In case it should be found that the personal property of said George or Edward could not be equally distributed in kind, then so much as might be necessary be sold and the proceeds divided. (6) The real estate of said George and of said Edward, wherever situated and by whomsoever held, to be conveyed by good and sufficient deeds, so that each of the three parties should hold an undivided third thereof as a tenant in common with the others. (7) In the division of the said estate, the proceeds or revenue to be derived from the trust funds for the benefit of George P., Julia and Josephine, created by the avíII of their father, to be treated as a general fund and divided equally between them, and, so far as it lay in their power, the parties agreed that the said funds should be considered and be the general fund of the parties.

      The partition of this real estate cannot, in any way, interfere with the carrying out of this agreement, unless it might be that the indebtedness of one to the other should be a charge upon that other’s undivided interest, which can and will be protected as before suggested. It would seem that a partition of the real estate between these tenants in common would be carrying the terms of the agreement into effect, rather than interposing any obstacle thereto.
    The other ground urged by the counsel is that this court should not proceed to partition this estate in obedience to the rule that he who seeks equity must do equity, and that it will be inequitable to permit two sisters to have partition of their real estate until all the terms of the agreement shall have been carried into effect by the report of the master and a compliance with the decree of the court thereon.
    As was very forcibly and clearly stated by the opposing counsel, this rule applies only to acts of the party with reference to the subject-matter of the suit, and that it does not apply to what has been done, or what has not been done, by the party with reference to some outside matter, but, independent of that position, I see no merit whatever in the objection. As stated before, there is nothing in the agreement which, in law, equity or morals, would interfere with these parties instituting and proceeding with this suit to have partition of the real estate.
    In my judgment, no good ground has been shown why the complainant and her sister should be further delayed in their proceedings to have their respective shares of their real estate in New Jersey set off to them. And the testimony having been taken which clearly establishes that these are now held by these parties as tenants in common, I will advise the usual decree for the appointment of commissioners.

      Mr. William, B. Guild, for the appellants.

      Mr. Abram Q. Garretson, for the respondents.
   The opinion of the court was delivered by

Collins, J.

The partition reported by the commissioners has not, in the judgment of any member of this court, been successfully impugned; but some of my brethren think that any partition should be stayed until final determination on the accounting in the suit in the federal court referred to by Vice-Chancellor Green. If a majority of the court held that opinion, it would be matter of regret that the objection had not been presented in limine by an appeal from the decree appointing commissioners. It savors of disingenuousness to experiment with a partition at very considerable cost to the co-owners and then press the objection to having auy partition at all, especially in the light of the offer made in the brief filed for appellants, to waive all objections upon condition that the allotment reported be changed so as to give the appellants the share awarded to another owner.

The facts of the case were clearly stated by the vice-chancellor, and his reasons for not delaying partition seem to me conclusive. In this connection also, the opinion of the late Mr. Justice Bradley may be profitably read. Chandler v. Pomeroy, 46 Fed. Rep. 533, 545. His decision that the agreement was not valid was reversed, but the remarks on the subject of partition were not criticised in the supreme court. That tribunal left the matter to be settled by the circuit court after remittitur, and when we find that court decliniug jurisdiction and dissolving its injunction against the chancery partition, it would seem proper that such partition should proceed.

The only reason suggested for delay in severing the common ownership of the parties, and the only reason possible to suggest, is that the accounting of the personal estate may show something due appellants from the other owners, which, under the agreement, may be chargeable on the real estate. The parties have voluntarily divided about $500,000 worth of personal estate. They could very easily have withheld a fund sufficient to make the necessary adjustment, for the margin of difference was well known to all of them. The master’s report to the federal court shows a small balance in favor of appellants, but both sides have excepted and no one can tell when the contest will end. It is not even hinted that the respondents are pecuniarily irresponsible;, indeed, it is perfectly clear that they are possessed of large means. If the appellants have a lien, either legal or equitable,, upon the real estate, it will attach to the divided shares. Gen. Stat. p. 2430 § 36; Speer v. Speer, 1 McCart. 240.

There will be no more danger from bona fide purchasers after partition than before, for in either case any purchase will be pendente lite. Partition simply permits each owner to enjoy his- or her share in severalty instead of in common, and I can see no-objection to the exercise now of that undoubted right. The decree and partition thereunder should be affirmed.

For affirmance — The Chief-Justice, Collins, Gaeeison, Lippincott, Ludlow, Bogeet — 6.

For reversal — Depue, Dixon, Gummebe, Van Syokel, Hendeickson, Nixon — 6.


source: Caselaw Access Project

author: Collins, J.

license: Public Domain

text:
    Lillie E. Yearance, appellant, v. Anna Powell, respondent.
    1. A father m extremis, being about to execute a will making his three children his residuary devisees, stayed such execution in order to add a bequest to another person. One of the children, without the knowledge of the others, assured him that if he should execute the will without change, his wish with regard to the intended bequest would be fulfilled. On this assurance he did so execute the document. — Held, that the share in the estate of the child giving the assurance must contribute a third only toward making good the intended bequest.
    2. Qurnre. Can like contribution be compelled from the shares of the other-children ?
    On appeal from a decree advised by Vice-Chancellor Reed.

      Mr. Howard, W. Hayes, for the appellant.

      Mr. Frederic W. Ward, for the respondent.
   The opinion of the court was delivered by

Collins, J.

In 1855, George D. Randell, of Newark, took into his family the respondent, who was the motherless niece of his wife. She was then about fifteen years of age. She had outside employment and paid board at a low rate. About 1862, Mrs. Randell died, leaving two children — Lillie E., aged eight years, and Frederick L., aged four years. At Mr. Randell’s request, the respondent abandoned her employment and took charge of the children. She received no stated wages and paid no board. In 1867, she married, but remained in the household until the next year, when Mr. Randell married the second time. Her relations with the family continued close, and in times of sickness she was called in to assist. One child, Edith, was born of Mr. Randell’s second marriage, in the year 1869. Even she seems accustomed to call the respondent “Aunt Anna,” and in the light of the relations of the parties the occurrences at Mr. Randell’s deathbed, hereafter to be stated, seem very natural.

In March, 1889, Mr. Randell was stricken with a fatal illness, and essayed to make his will. He was then a widower, with the same three children. Lillie had been married. Her married name is Yearance. She is and was then childless. Frederick was married, and had and still has infant children. Edith was a girl of twenty. She has married pending this litigation. Her married name is Hopping. A draft for a will had been prepared for Mr. Randell in the lifetime of his wife, but he had never executed it. He gave instructions to counsel to prepare a redraft, simply omitting the provisions in iavor of his deceased wife, and to bring it to him at once for execution. Counsel presented such redraft at his bedside the same evening. By its terms, after giving the use of his residence to Lillie and Edith, at their option, the entire estate was, with the intervention of trustees, to go to the three children in equal parts. Lillie was to take an estate for life, with remainder to her issue, or, in default of issue, to Edith and to Frederick’s children. Frederick was to take an estate for life, no provision being made for remainder, and Edith was to take an absolute estate on reaching -the age of twenty-four years. Pending the preparation of the will, Mr. Randell determined to bestow something upon Mrs. Powell, and, when the draft was brought to him, he asked to have added a clause devising to her a house and lot on Brunswick street, in the rear of his residence. He had already conveyed that property to Mrs. Yearance, and, on being reminded of that fact, which had escaped his enfeebled memory, he directed that the clause in Mrs. Powell’s favor should take the form of a money bequest of $4,500, fixed by him as the equivalent in value of the property. Counsel was about to redraw the will, but the attending physician expressed the opinion that there ought to be no delay. Mrs. Yearance was the only one of the testator’s children present. She at once said, “ Papa, that will be all right; just as you wish,” and Mr. Randell responded, “All right; if that is so, I will execute the will as it is,” and he did so execute it. He died in the afternoon of the next day.

Mrs. Yearance has always been ready to carry out her father’swish, either by permitting $4,500 to be paid to Mrs. Powell from the residuary personalty of his estate or by conveying to her the Brunswick street property, on receiving $1,500 from -each of the shares thereof bequeathed to her brother and sister respectively. The matter was held in abeyance until Edith should reach the age of twenty-four years. When that time arrived Edith made her consent to any settlement dependent on Frederick’s concurrence, and he refused to have his share of the estate in any way diminished. In this posture of affairs Mrs. Powell filed her bill against the trustees of the will, the three .children of the testator and the children of Frederick L. Randell. The bill prays decree for the payment by the trustees of $4,500 from the testator’s residuary estate. The decree made charges the whole $4,500 on Mrs. Yearance alone, giving her .the option to convey the Brunswick street property instead of paying that sum. From this decree she has appealed, making the complainant the sole respondent.

The principle recognized by this court in Williams v. Vreeland, 5 Stew. Eq. 734, and the precedents therein approved warrant a decree in Mrs. Powell’s favor, but not the one made. It is not necessary to recite the testimony in the case. It is well summarized by the vice-chancellor, and we differ in but one respect from his conclusion on the facts. We think that the testator could not have supposed that Mrs. Yearance meant to agree that his wishes should be fulfilled, even if it were necessary to that end that the whole of the bequest he contemplated should have to come from her share of his estate. He accepted her assurance as binding the three devisees and remaindermen, and not herself alone. The decree is wrong to the extent that it charges her with more than her share of the $4,500.

We have not considered the very interesting question of the right to compel payment of the residue of the intended bequest from the shares represented by Mrs. Hopping and Frederick L. Randell. The learned vice-chancellor assumes that this is impossible, in the absence of promises by them respectively. There are decisions holding otherwise in cases like the present. They proceed on the theory that one of several devisees of a class represents all, and that where a testator executes his will on the faith of a promise that some trust will be performed, made by one of the class in behalf of all, it is fraud for the others to claim the devise without sharing its burdens. We are precluded from examining and determining the question because the other devisees are not before this court on the appeal of Mrs. Yearance. Should the court of chancery adhere to the view of the vice-chancellor, the question may be presented by Mrs. Powell by appeal.

The present decree must be reversed and a decree must be made in conformity with this opinion, so far as the respective rights of appellant and respondent are concerned.

For reversal — The Chief-Justice, Collins, Depue, Dixon, Garrison, Gummere, Ludlow, Van Syckel, Dayton, Hendrickson, Nixon — 11.

For affirmance — None.


author: Dayton, J.

text:
    Rodman Ellison et al., partners &c., appellants, v. George R. Gray, receiver of the United States Credit System Company, respondent.
    1. An order of the chancellor, on appeal from the determination of the receiver of an insolvent corporation, under the eighty-second section of “An act concerning corporations,” is final and not interlocutory.
    2. Written contracts, in the absence of fraud or mistake, cannot be varied by parol testimony.
    On petition &c.

      Mr. Edivard A. Day, for the appellants.

      Mr. Howard W. Hayes, for the respondent.
   The opinion of the court was delivered by

Dayton, J.

The receiver of the United States Credit System Company having disallowed the claim of John B. Ellison & Sons, an appeal was taken to the chancellor, whose order sustaining the determination of the receiver was made January 14th, 1896. From this order the appellants filed their petition of appeal February 1st, 1897. The respondent moves to dismiss this appeal, upon the ground that the chancellor’s order was, in its nature, interlocutory, and the appeal was not taken within the forty days limited by law.

The motion cannot prevail. The order of the chancellor, on appeal from the decision of the receiver, as provided for in the eighty-second section of the “Act concerning corporations,” is in the nature of a final decree. It has all its attributes and characteristics. The statute conferring the right of appeal from the decision of the receiver, primarily clothed with power to decide, manifestly contemplated that the result should be conclusive» It is final in its nature, disposing of the whole merits of the case, leaving nothing for further examination or judgment.

An order which determines the whole controversy between the parties, without reserving anything for further consideration, is a final order. In this case the claim of the appellants was definitely disallowed, and the party thereby dismissed from the case. Newark Plank Road Co. v. Elmer, 1 Stock. 754, 787; Central Trust Co. v. Grant Locomotive Works, 135 U. S. 207.

The motion to dismiss the appeal being refused, it remains to consider the case appealed to this court upon its merits.

It seems to be undisputed that Mr. Tissot, of the firm of J. B. Ellison & Sons, the appellants, on November 2d, 1893, inquired of Mr. Whittick, the agent of the United States Credit System Company, whether the failure to pay the premium on that policy before the expiration of the preceding policy, October 30th, 1893, would have the effect of depriving the insured of the benefit of the renewal as to losses for goods shipped during the life of the preceding policy, notwithstanding the provision in the renewal certificate 'that, in order to secure such benefit, the premium must be paid before the expiration of the term of the prior policy. To this inquiry Mr. Marx, the special agent of the credit company, in the presence of Mr. Whittick, the general agent of the company, said, “it was all right; it would not lessen their protection in the slightest; that the contract would hold just the same as though it had been paid for prior to the expiration of the contract.” The contract was 'then entered into and a certificate accepted containing the clause referred to. John B. Ellison & Sons knew of the existence of this limitation clause in their new contract, and nevertheless, relying solely upon the parol assurance of the credit company’s agents that it was nugatory or would not be enforced — “ that it was all right ” — accepted the certificate of insurance. It is upon'this policy their claim is founded. They are bound by its terms. If they have any means of relief from the hardship imposed upon them, it could only be by a reformation of the contract, and there is no prayer for such action, if any could be introduced in these proceedings. The rule of law is well settled in this state that a written contract, in the absence of fraud or mistake, cannot be varied by mere parol testimony. So long as the contract, unmistakable in its meaning, stands unaltered by decree of the court, its effect cannot be changed by parol evidence of a different agreement. Dewees v. Manhattan Insurance Co., 6 Vr. 366; Franklin Fire Insurance Co. v. Martin, 11 Vr. 568.

For affirmance — The Chief-Justice, Collins, Depue, Dixon, Garrison, Lippincott, Ludlow, Van Syokel, Bogert, Dayton, Hendrickson, Nixon — 12.

For reversal — None.


author: Per Curiam.

text:
    John K. Holloway, appellant, v. Adrain S. Appelget, respondent.
    1. An owner of municipal bonds agreed to pay an attorney a percentage for collecting them. The bonds were to be left in the hands of the owner until needed by the attorney. The bankruptcy of the city rendered it impossible to collect the bonds for several years. The owner, without the knowledge of the attorney, and for the purpose of evading the payment of the percentage, sold the bonds and concealed that fact from the attorney.
    2. When the attorney long afterwards discovered that the bonds had been sold, he sued the owner for breach of his contract, to which action the owner pleaded the statute of limitations. — Held, that he will be enjoined in equity from using the statute as a defence.
    On appeal from a decree advised by Vice-Chancellor Reed, wbo delivered the following opinion :
    This bill is filed to restrain the defendant from setting up the statute of limitations in an action at law brought by the complainant against the defendant and now pending in the Mercer circuit. On March 5th, 1884, the defendant was the owner of four bonds of the city of Rahway. On that date he consulted Mr. A. S. Appelget, an attorney-at-law, concerning the collection of the said bonds. The result of the consultation was that they entered into a contract in the following terms:
    “ In consideration of the services and expenditures to be rendered by A. S. Appelget, attorney-at-law, in collecting amounts due me on bonds of the city of Eahway, I hereby agree to allow him, as compensation therefor, ten per .cent, of the net amount he may be paid thereon, hereby requiring him not to settle for a less sum than the face value of said bonds and interest, without my consent, he to save me from all costs of suit.
    “ Dated March 5th, 1884. (Signed)
    “John K. Holloway,
    “A. S. Appelget.”
    One of the bonds was then due, and upon one of the other three there were coupons due. The four bonds were by Mr. Appelget, he having no safe, deposited in the Hightstown Bank. Afterwards Mr. Holloway obtained an order from Mr. Appelget, by which he got the bonds from the bank. Mr. Appelget says that Mr. Holloway promised to return them, for the purpose of bringing suit, when the principal' upon them became due. Mr. Appelget brought suit on the bond that was due, and, in June, 1884, recovered judgment.
    On June 18th, 1884, Mr. Appelget wrote to Holloway the following letter:
    “Deab Sib — I have entered up judgment for you against the city of Eahway, for 512,832.34, and you will be entitled to interest on this sum from June 16th,' 1884, until 'it is paid. A law was passed March 25th, 1884, and made to take effect immediately, requiring all persons holding claims against Eahway, to file with the city clerk a dissent to receive the sum they offer by compromise within three months, and it must be on a form or blank prepared by their city clerk. A most scoundrelly and outrageous law, but you will have to look out for it and file the dissent before June 25th instant, or they may get the best of you on the sly.
    “ Eespectfully yours,
    “A. S. Appelget.”
    Upon the receipt of this letter, Mr. Holloway, instead of visiting Mr. Appelget, secured the services of another attorney to file the dissent. There appears to have been no other communication between the complainant and the defendant for several years, during which time the financial affairs of the city of Rahway were in a bankrupt condition.
    On December 31st, 1885, Mr. Holloway sold the four bonds to N. B. Conklin for the sum of $1,500. Mr. Holloway says that he was induced to open communication with Mr. Conklin through an advertisement which he saw in a local newspaper, in which advertisement Conklin offered to purchase Rahway bonds. The bonds so purchased by Conklin were turned into the city of Rahway and paid. Mr. Appelget first discovered that the bonds had been paid, when, in 1894, the attorney of the city of Rahway requested him to have the judgment which he had obtained against the city, for Mr. Holloway, satisfied upon the record. Afterwards Appelget brought his action against Holloway,
    The question is whether, in equity, Mr. Holloway is entitled to invoke the statute of limitations in bar of Appelget’s action at law. In most of the cases the bar has been set up in suits in equity instituted for the purposes of obtaining relief in instances of fraud. There, however, is no reason why a court of equity should not, by the use of its injunctive power, disarm a defendant from using the statute fraudulently in an action at law. In the case of Freeholders of Somerset v. Veghte, 15 Vr. 509, where it was held that a fraudulent concealment of a cause of action was no answer to the statute in an action at law, it was admitted that relief could be successfully sought in equity.
    It also appears that the equitable relief here invoked has been granted mostly in cases where the act out of which the cause of action arose was a fraudulent act, in its nature self-concealing, such as embezzlements or thefts carried out by the falsification of accounts or vouchers. But it seems clear that a court of equity will interfere, although the cause of action may not have arisen out of a technically fraudulent act, if the defendant has employed any means to mislead the plaintiff, or to hide from him the fact that a cause of action has arisen.

      Now, the facts displayed in this case are such that I do not see how the defendant could honestly have taken the course he did. He could not have forgotten, when he sold the bonds, that he had entered into a written contract with Mr. Appelget to pay him ten per cent, of the amount collected. He had been informed, by the letter already set out, that Mr. Appelget had entered up a judgment for a portion of the amount represented by the four bonds. Upon receipt of that letter, instead of going to Mr. Appelget and consulting him, he employed another attorney to file his dissent to the proposition of the city of Rahway. He never thereafter visited Appelget, but instead opened a correspondence with a broker, which resulted in the sale of the bonds unknown to Appelget. The whole affair has the unmistakable appearance of an attempt to deprive Mr. Appelget of his percentage by dealing with a broker, on Holloway’s own account, surreptitiously. It is within the range of possibility that Holloway may have believed that Mr. Appelget had abandoned all hope of collecting the money, but in the face of Appelget’s letter informing him of the entry of the judgment, and the passage of the statute affecting his claim, I do not see how he could have formed such an opinion.
    • Nor do I see in what way Mr. Appelget was in laches in failing to discover that the bonds had been sold. During all the time intervening between the date of the contract between him and the defendant and the date of the sale of the bonds, the desperate financial condition of Rahway wás notorious. There was at the time no prospect of realizing any substantial part of the debt, and it was natural that Appelget should wait, hoping for a change in the condition of affairs.
    Nor was the sale of the bonds discoverable except by accident. No inquiry about their custody was called for until a time should arrive when further litigation would be advisable. There was no act required by Mr. Appelget in the exercise of due diligence, which, if performed, would have led to a discovery of thé sale, which he left unperformed. .
    I will advise a decree that the injunction be made perpetual.
   Per Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — The Chiee-Justice, Depue, Garrison, Gummere, Lippincott, Van Syckel, Dayton, Hendrickson, Nixon — 9.

For reversal — Collins, Dixon, Ludlow, Bogert — 4.


text:
    John Read, administrator &c. of Wilson Read et al., appellants, v. Emma H. Bennett et al., respondents.
    1. Where a suit is brought to determine the ownership of a fund in the hands of the trustee of an intestate decedent, an administrator of such decedent’s estate is a necessary party, and the conflicting claims of other parties to the fund could not be litigated in the absence of a legal representative of the deceased.
    2. It is error to decree that the fund be paid “to such person as may hereafter be appointed administrator.”

      Mr. Halstead H. Wainright, for the appellants.

      Mr. Robert Allen, Jr., and Mr. William Pintará, for the respondents
   Per Curiam.

The controversy in this case is over the sum of $1,647.73, in the hands of William T. Read, one of the appellants, who was trustee of William L. Bennett, an idiot. William L. Bennett, the cestui que trust, died before the commencement of this suit, intestate. No administrator has been appointed to administer upon his estate. John Read, administrator with the will annexed of Wilson Read, deceased, makes claim' to this fund as part of the assets of the estate of Wilson Read, deceased. John Read, administrator &c., has also appealed. The decree adjudges that the said trustee pay the balance in his hands, after deducting taxed costs and counsel fees, “ to such person as may hereafter be appointed administrator of William L. Bennett, deceased.” Both the appellants in the petitions of appeal challenge -the form of this decree, and John Read, in his petition of appeal, renews his. claim to this fund as administrator of Wilson Read.

An administrator of William L. Bennett, deceased, was a necessary party to this litigation while it was pending in the court of chancery. The conflicting claims of other parties to this fund could not be litigated in the absence of a legal representative of the deceased. ...

The decree cannot be sustained. It should be reversed and the record remitted.

For reversal — Depue, Dixon, Garrison, Gummere, Lippincott, Magie, Van S yokel, Barkalow, Bogert, Dayton, Hendrickson, Krueger, Nixon — 13.

For affirmance — None.


text:
    Mary A. McTague, appellant, v. Austin Finnegan et al., respondents.
    On appeal from a decree of the chancellor, whose opinion is reported in McTague v. Finnegan, 9 Dick. Ch. Rep. 454.

   Per Curiam.

Decree affirmed, for the reasons given by the chancellor.

For affirmance — Ti-ie Chief-Justice, Collins, Depul, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Bogert.,- Dayton, Hendrickson, Nixon — 13.

For reversal — None.


text:
    Charles Borcherling, administrator, appellant, v. John Ruckelshaus, respondent.
    On appeal from a decree advised by Vice-Chancellor Reed, whose opinion is reported in Ruckelshaus v. Borcherling, 9 Dick. Ch. Rep. 344.

   Per Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Collins, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Bogert, Dayton, Hendrickson, Nixon — 12.

For reversal — None.


text:
    Celine M. Duvale, appellant, v. Charles L. Duvale, respondent.
    On appeal from a decree advised by Vice-Chancellor Reed, whose opinion is reported in Duvale v. Duvale, 9 Dick. Ch. Rep. 581.

   Per Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Depue, Garrison, Gummere, Ludlow, Van Syckel, Bogert, Dayton — 8.

For reversal — Hendrickson, Nixon — 2.


text:
    The National Shoe and Leather Bank of the City of New York, appellant, v. Jacob S. August et al., respondents.
    On appeal from a decree advised by Vice-Chancellor Pitney^ whose opinion is reported in National Shoe and Leather Bank v. August, 9 Dick. Ch. Rep. 182.

   Per Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Collins, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Bogert, Dayton, Hendrickson, Nixon — 13.

For reversal — None.


text:
    Julia G. Brooks et al., appellants, v. Albert J. Vreeland, administrator of Albert Ackerman, deceased, respondent.
    On appeal from a decree of the chancellor, whose opinion is reported in Brooks v. Kip, 9 Dick. Ch. Rep. 462.

   Per Curiam.

Decree affirmed, for the reasons given by the chancellor.

For affirmance — The Chief-Justice,' Collins, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Bogert, Dayton, Hendrickson, Nixon — 12.

For reversal — None.


text:
    Charles W. Lynde, appellant, v. Mary W. Lynde, respondent.
    On appeal from an order of the chancellor, whose opinion is reported in Lynde v. Lynde, 9 Dick. Ch. Rep. 473.

   Per Curiam.

Decree affirmed, for the reasons given by the chancellor.

1 For affirmance — The Chief-Justice, Collins, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Bogert, Dayton, Hendrickson, Nixon — 13.

For reversal — None.


text:
    The Morris and Essex Railroad Company et al. v. The State, ex rel. The State Board of Health.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in State v. Jersey City, 10 Dick. Ch. Rep. 116.

   Per Curiam.

Decree affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Depue, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Bogert, ’ Dayton, Hendrickson, Nixon — 11.

For reversal — None.


author: Per Cijriam.

text:
    Huldah H. Stillman, appellant, v. Henry W. Johnson, executor of Peter P. Conover, deceased, respondent. Jacob Pierre Freshmuth &c., appellant, v. Henry W. Johnson, executor, respondent.
    Appeals from a decree advised by Vice-Chancellor Reed,, whose opinion is reported in Johnson v. Conover, 9 Dick. Ch. Rep. 333.

   Per Cijriam.

Decree affirmed, for the reasons given in the court of chancery.

Stillman v. Johnson—

For affirmance — The Chief-Justice, Collins, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Bogert, Dayton, Hendrickson, Nixon — 13.

For reversal — None.

Freshmuth v. Johnson—

For affirmance — The Chief-Justice, Collins, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Bogert, Dayton, Hendrickson, Nixon — 13.

For reversal — None.


author: Ludlow, J.

text:
    Henry J. Houpt et ux., appellants, v. Lillian M. Turner, respondent.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in Turner v. Houpt, 8 Dick. Ch. Rep. 526.

   The opinion of the court was delivered by

Ludlow, J.

On review of this case, the court of errors and appeals are of the opinion that the conclusions and findings of the learned vice-chancellor on which the decree in said case; as advised by him, is made, are not warranted by the evidence and the law. The decree of the court of chancery is reversed, and the bill should be dismissed, with costs.

For reversal — Garrison, Lippincott, Ludlow, Magie, Van Syckel, Bogert, Dayton, Hendrickson, Nixon — 9.

For affirmance — Dixon, Barkalow — 2.


text:
    Delaware, Lackawanna and Western Railroad Company, appellant, v. Henry L. Breckinridge et al., respondents.
    On appeal from an order advised by Vice-Chancellor Emery, whose opinion is reported in Delaware, Lackawanna and Western Railroad Co. v. Breckinridge, 10 Dick. Ch. Rep. 141.

   Per Curiam.

Order affirmed, for the reasons given in the court of chancery.

For affirmance — The Chief-Justice, Depue, Dixon, Gaeeison, Gummeee, Lippincott, Ludlow, Yan Syckel, Bogeet, Dayton, Hendkickson, Nixon — 12.

For reversal — None.


author: Pitney, V. C.

text:
    Eugene F. Daly v. The New York and Greenwood Lake Railway Company et al.
    1. The transfer of a bond and mortgage belonging to an estate, when made, in pursuance of an order of court, by the executor removed by the court to a new executor appointed in his place, is sufficient to convey the equitable title thereto, although the transfer was a mere delivery, without formal assignment.

      2. A mortgage on land given by the purchaser to secure the price conveys a legal title, superior to the interest acquired through previous mortgages given by the purchaser, and covering after-acquired property.
    3. This superiority is not lost by neglect to record the purchase-money mortgage, for the statute requiring recording is for the protection of subsequent mortgagees only.
    Heard on pleadings and proofs.
    The object of the bill is to foreclose a mortgage on land given by Henry C. Spaulding to John Sands Howell, dated June 17th, 1872, to secure the sum of $4,650 in four years, further secured by the bond of the mortgagor. The complainant claims to be the assignee of this bond and mortgage. They were given as part of the consideration money of the conveyance by Howell, the mortgagee, and others to Spaulding of the tract covered by the mortgage, containing ten and twenty-five hundredths acres of land situate at Secaucus, in Hudson county.
    By deed of the same date, June 17th, 1872, Spaulding conveyed nine hundred and four thousandths of an acre, part of the premises, to the Montclair Railway Company. This was a narrow strip upon which it was proposed to build, and upon which a section of the railway of that company was afterwards built.
    The deed to Spaulding was acknowledged by a part of the grantors on the 17th of June, by another part on the 19th and by another part on the 21st of June, 1872.
    The mortgage was acknowledged by Spaulding on the 28th of June and the deed for the strip to the railway company was acknowledged on the same day.
    The two deeds were recorded on the 2d of July, 1872.
    The mortgage from Spaulding to Howell sought to be foreclosed was not recorded until the 10th of July, eight days after the record of the deed from Spaulding to the railway company.
    Spaulding was one of the directors of the railway company, was its superintendent and purchasing agent, and in the purchase acted entirely as the agent and trustee of the railway company. He held the title to the nine acres and a fraction of-the whole tract not conveyed to the railway company, in trust for it. The whole transaction was carried through with the full knowledge and consent, previously obtained, of all the officers of the railway company, so that the railway company had full and complete notice of the mortgage to Howell for part of the con- v sideration money.
    At the time of this transaction the railway was under a first mortgage to Marcus L. Ward and Abram S. Hewitt, as trustees for certain bondholders. That mortgage was dated the 1st of September, 1870, and recorded on the 2d of September, 1870, in book of deeds for Hudson county. The description of the premises covered by it is as follows:
    ‘ ‘All and singular the line of railway known and to be known as the Montclair railway, as the same is being and shall be constructed from the line of the State of Yew York, at or near Greenwood lake, to the Hudson river, also the branches thereof, * * * including all the railways, ways, rights of way and depot grounds or other lands, all tracks, bridges, viaducts, culverts, fences and other structures &e., * * * and all real and personal property held or acquired or hereafter to be held or acquired by the said company, its successors or assigns, for use in connection with the aforesaid railway and branches of the party of the first part, or with any part thereof, or with the business of the same, * * * and also all franchises connected with or relating to the aforesaid railway and branches or to the construction, maintenance or use of the same.”
    A second mortgage was given by the railway company to Mr. Hewitt alone, as trustee, using the same description of the premises as above set out, on the 1st of November, 1871, and recorded on the 15th of January, 1872, to secure another issue of bonds.
    The second mortgage was duly foreclosed and the property purchased by and conveyed to Mr. Hewitt, as trustee, by master’s deed dated January 7th, 1875.
    The first mortgage was duly foreclosed and conveyed by master’s deed to Marcus L. Ward and Abram S. Hewitt, trustees, September 27th, 1875. Ward and Hewitt conveyed by deed dated November 29th, 1875, to the Montclair and Greenwood Lake Eailway Company, a new organization, and this second railway company mortgaged to George Walker and Amzi Dodd, trustees, by deed of trust dated December 1st, 1875, all its lands and property of every kind. This mortgage was foreclosed and the property purchased by and conveyed to Abram S. Hewitt, Cyrus W. Field and John B. Dumont by master's deed dated October 5th, 1878, and Hewitt, Field and Dumont .conveyed by deed dated November 5th, 1878, to the New York and Greenwood Lake Railway Company, the defendant herein. Neither Howell nor his personal representatives were made parties to either of these foreclosure proceedings.
    Receivers were also appointed of this railway company, after the conveyance of Spaulding to it and before the first foreclosure, and they also conveyed to Hewitt as trustee; but their conveyance did not cover any land in Hudson county, and counsel for the railway company relied entirely upon the mortgages of 1870 and 1871.
    The principal question is whether the foreclosure of the mortgages of 1870 and 1871 had the effect of divesting the lien of the complainant's mortgage upon the strip of nine hundred and four thousandths acres constituting a part of the railroad bed.
    Another question was raised as to the standing of the complainant, Daly, in this court. Howell, the mortgagee, died not long after the giving of this mortgage, leaving a will which was offered and admitted to probate in the city of New York, on the 28th of January, 1873. Letters testamentary were issued by the surrogate of New York city to Henry K. Van Siclen and William Joyce, executors named therein, both of the State of New York. Subsequently, in 1879, proceedings were had to remove both these executors, with the result that both executors were removed by decree of the surrogate, dated October 13th, 1879, and their letters testamentary were superseded. Subsequently an order was made in the supreme court of the city and State of New York, on the 17th of October, 1879, appointing Edward C. Sheehy trustee under the will of Howell, in the place and stead of Van Siclen and Joyce, and it was ordered that upon service of a copy of the order upon Van Siclen and Joyce they should pay over, assign, transfer and deliver to Sheehy all the money, securities, assets and property of every kind and description in their hands or possession belonging to the estate of Howell. Under that order demand was made by Sheehy upon Van Siclen and Joyce for the assets of the Howell estate, and as a part of those assets Van Siclen and Joyce handed to Sheehy the bond and mortgage here in question, but did not execute any formal assignment of it. Sheehy then duly assigned the mortgage to the complainant, Daly.

      Mr. Joseph Anderson, for the complainant.

      Mr. Cortlandt Parker, Jr., for the New York and Greenwood Lake Railway Company.
   Pitney, V. C.

The first question is as to whether the complainant has standing in equity as the owner of this bond and mortgage.

There can be no doubt that the interest in and control of them by the original executors of the mortgagee were divested and ended by the decree of the surrogate of New York superseding them. And it is equally clear that Mr. Sheehy, the new trustee, was entitled to the possession and control and vested with the equitable interest in them in trust for the beneficiaries under the will, by the decree of the New York supreme court. And it seems to be well settled at this day in New Jersey — in fact, familiar and common learning — that a mere delivery of a bond and mortgage, with intention to pass the title, upon a proper consideration, will vest the equitable interest in the person to whom it is so delivered. This is the substance of the ruling by Mr. Justice Drake, speaking for the supreme court, in the case of Hutchings v. Lowe, 1 Gr. 246; and in the same direction is what wms said by Master Wilson in Morris Canal Co. v. Fisher, 1 Stock. 667 (at p. 686). The same doctrine was declared by Chancellor Runyon in Kamena v. Huelbig, 8 C. E. Gr. 78 (at p. 80), where he says: “ This assignment was in writing, but had it been by the mere handing over of the bond and mortgage, it would have been sufficient.” And Master Weart, in Galway v. Fullerton, 2 C. E. Gr. 389 (at p. 394), states the same doctrine, citing authorities from New York and elsewhere. Chancellor Runyon reiterates it in Harris v. Cook, 1 Stew. Eq. 345, and again in Denton v. Cole, 3 Stew. Eq. 244, citing with approval Galway v. Fullerton, supra.

It has always been held that a mortgage will, in equity, follow the debt which it was given to secure, wherever that debt is well assigned or transferred, without any formal assignment of the mortgage. Green v. Hart, 1 Johns. 580, on appeal from the chancellor.

I think the equitable title of the complainant in the bond and mortgage here in question is fully established.

The next question is as to whether or not the present railway company’s claim of title under mortgages prior in date to that of the complainant, gives it the better standing in this court.

It is to be observed that at the time the two mortgages under which the railway company claims, to wit, in 1870 and 1871, were executed and recorded, the title in this land had not been vested in the railway company, and it must claim under the description of land “ thereafter to he acquired.” There can be no doubt that, under that clause, a title in equity, of greater or less value, was made to the purchasing trustees, and by them to the present defendant corporation, of this after-acquired property. The question is whether the railway company took it free and clear of the encumbrance of complainant’s mortgage.

That the mortgagor, the original Montclair Railway Company, took the property with full notice .of complainant’s mortgage, there can be no doubt. As between complainant and the first railway company, the complainant’s right- is indisputable. Notwithstanding that the first railway company had notice of the complainant’s mortgage, it was competent for it, under our recording acts, to give a title to the premises free and clear of complainant’s mortgage. As to that portion of it, nine hundred and four thousandths of an acre, which was actually conveyed by Spaulding to the railway company by deed recorded prior to the recording of complainant’s mortgage, no conveyance was made by that railway company subsequent to the making of complainant’s mortgage. Such conveyance was made by mortgages prior to the date of the complainant’s mortgage.

Now, the language of the recording act then and still in force, which applies to the present case, is as follows:

“ Every deed of mortgage &e. which shall have been made and executed after the first day of January, 1821, or shall hereafter be made and executed, shall be void and of no effect against a subsequent judgment creditor, or bona fide purchaser or mortgagee for a valuable consideration, not having notice thereof, unless such mortgage shall be acknowledged and proved according to law &c. and recorded or lodged for that purpose with the clerk of the -county” &c.

It thus appears that the recording act operates entirely in favor of subsequent mortgagees and bona fide purchasers. The case abundantly shows that the mortgages under which the defendants claim were given before the railroad was built, and presumably before all of the money was advanced upon the bonds secured by those mortgages.

The case does not show how much, if any, money was so advanced prior to the conveyance by Spaulding to the railway company, but it may be presumed that some of the bonds were negotiated prior to that time.

Counsel for complainant contended, with much ingenuity and strength, that his mortgage must be a subsisting lien, for the simple reason that the prior mortgages were not within the terms of the recording act, and that there were no conveyances by the railway company, grantee of Spaulding, after the conveyance to it, and so there was not, and could not be, any person occupying the position, as against him, of a bona fide purchaser for value without notice.

But, without relying upon that point alone, I think that, according to the first principles of justice as administered in a court of equity, the complainant’s mortgage must be accorded priority over the Hewitt mortgages.

The general rule seems to be that the holder of a mortgage, who claims by its terms that it is a lien upon after-acquired property, takes such property subject to all liens upon it between the parties.

This was distinctly decided by the supreme court of the United States in the case of United States v. New Orleans Railroad Co., 12 Wall. 362, where Mr. Justice Bradley, speaking for the court, uses this language: “ This, we apprehend, is an erroneous view of the doctrine by which after-acquired property is made to serve the uses of a mortgage. That doctrine is intended to subserve the purposes of justice, and not injustice. Such an application of it as is sought by the appellants would often result in gross injustice. A mortgage intended to cover after-acquired property can only attach itself to such property in the condition in which it comes into the mortgagor’s hands. If that property is already subject to mortgages or other liens, the general mortgage does not displace them, though they may be junior to it in point of time. It only attaches to such interest as the mortgagor acquired, and if he purchase property and give a mortgage for the purchase-money, the deed which he receives and the mortgage which he gives are regarded as one transaction, and no general lien impending over him, whether in the shape of a general mortgage, or judgment, or recognizance, can displace such mortgage for purchase-money. And in such cases a failure to register the mortgage for purchase-money makes no difference. It does not come within the reason of the registry laws. These laws are intended for the protection of subsequent, not prior, purchasers and creditors.”

The doctrine of this case was adopted and applied by the court of errors and appeals in Williamson v. New Jersey Southern Railroad Co., 2 Stew. Eq. 311 (at p. 317), where the case last cited was cited with approval.

Both of these cases I deem to be in point. In the case in 12 Wall. 362, the railroad company had made a mortgage which covered all the company’s property of every kind with a stipulation to include all future-acquired property, and had purchased a lot of rolling stock subsequent to the date of the mortgage, and given back a consideration mortgage for it to the vendor which had not been recorded, and the fact of its existence was unknown to the bondholders under the first mortgage. In deciding it Mr. Justice Bradley calls attention to the distinction between that case and Galveston Railroad Co. v. Cowdrey, 11 Wall. 459, much relied upon by defendant’s counsel in this cause.

In Williamson v. New Jersey Southern Railroad Co., lands came to a railway company which were subject to a mechanics’ lien which had not yet been filed or recorded, so that the title of the mortgagees intervened between the time when the occurrences out of which the mechanics’ lien arose took place and the time that the lien itself was filed and perfected, and it was held that the mechanics’ lien prevailed over the mortgage.

The legal title to these premises has never been dealt with and never passed to the present railway company. It is familiar learning, found in all the cases, that a mortgage upon after-acquired property cannot rise higher than a contract to convey the title to that property when acquired, and a suit for its enforcement is, in effect, a suit for the specific performance of a contract. Holroyd v. Marshall, 10 H. L. Cas. 191; Pennock v. Coe, 23. How. 117; Smithurst v. Edmunds, 1 McCart. 408, which is the leading case in New Jersey on that subject, and has been followed in numerous cases since, including Williamson v. New Jersey Southern Railroad Co., supra.

The title, then, of the railway company in this case is purely an equitable one. The title of the complainant herein is a legal title. It was an actual reconveyance of the property to Mr. Howell. That legal title was not disturbed by the prior record of the conveyance by Spaulding to the Montclair Railway Company, because its officers had notice of it, and that company was really itself the mortgagor, being in equity a purchaser from Howell and his co-grantors. Garves v. Coutant, 4 Stew. Eq. 763. Howell, then, not only held the legal title, but his equity was prior, in point of time, to' that of the railway company, and, on plain principles, must prevail.

I will adyise a decree accordingly.


text:
    Lewis Pattberg et al. v. Lewis Pattberg & Brothers, a corporation.
    1. Certain secured bondholders of an insolvent corporation were not notified by mail, with the other creditors, of the time limited for the presentation of claims against the corporation, although the order of limitation was published. The time expired, and the bondholders found their security insufficient to pay them in full, and applied to be admitted as creditors for the balance. Applicants had paid value for their bonds. — Held, that the application should be granted.
    2. They were also entitled to a preferential dividend to put them on equality with the other creditors, who had already received a dividend on their claims.

    3. A creditor of an insolvent corporation, who holds as collateral secured bonds of the corporation, the security for which is insufficient to pay in full either the bonds or the debt, cannot be admitted as a creditor for the balance due on the bonds as well as for the debt.
    Application to be admitted as creditors of an insolvent corporation, after the expiration of the time limited by an order, of the court.

      Mr. William II. Corbin, for the applicants.

      Mr. Joseph A. McCreery, contra.

   Pitney, V. C.

The situation of the affairs of the corporation is, briefly, as follows: A receiver was appointed by this court, and it was declared insolvent on the 31st day of December, 1894. The assets consisted, in part, of personal property, consisting of merchandise, machinery and fixtures, and accounts and bills receivable, and, in part, of real estate subject to a mortgage of $75,000.

The personal property was sold and the accounts and bills receivable collected and produced a considerable sum of money, part of which has been distributed among the creditors who presented their claims within the time limited by the order.

A considerable sum of money still remains to be divided.

The usual rule limiting creditors was made and published and •has long since expired.

Charles Pfeiff and Louisa Austin now apply to be admitted as creditors.

The mortgage of $75,000 on the real estate was given to ■trustees to secure seventy-five $1,000 bonds. Thirty of these are held by the applicant Charles Pfeiff, twenty by the applicant Louisa Austin and twenty-five are held by George Borgfeldt & Company, a corporation, as collateral to a claim against •the insolvent corporation for fifty-eight thousand and odd dollars, which latter it has duly proven and received a dividend ■upon.

No sworn claim was presented on any of these bonds to the receiver, but their existence and ownership were known, and the ■receiver” early applied for an order to pay the interest due on itliose held by Pfeiff and Austin out of funds in his hands. This was done, either on the supposition that the mortgaged property •was worth more than the amount of the bonds, or because the •receiver was using the mortgaged property, a factory, in finishing goods and closing up the business.

Subsequently, the real estate was sold by an order of this court, free of the mortgage, and produced only about $11,000, which was distributed among the bondholders, and of course fell far short of paying their debt. Pfeiff and Austin now apply to •be admitted as creditors for the balance due upon their bonds.

This application is opposed by Borgfeldt & Company, which ■is the principal creditor of the corporation, on the ground that the claim was not presented within the time limited by the order of the court.

"With regard to this part of the case, I find, annexed to the affidavit of the service of the order limiting creditors by mailing, el list of the creditors to whom it was mailed, and Pfeiff and Austin are not among them, although their names are on the list of creditors to whom the order to show cause why the temporary receiver should not be made permanent was mailed. This affidavit was made on January 21st, 1895, and the order limiting creditors was made January 28th, 1895. Why the names of Pfeiff and Austin, as creditors, were dropped from the earlier list does not appear, unless it was by' reason of the supposition that the mortgaged property was sufficient to pay their bonds. Suffice it to say that their names are not on the list of creditors to whom notice of the rule limiting creditors was sent, and they both swear that they received no notice and had no-knowledge of such an order being made.

It is well known that, although these orders in these insolvent corporation cases are published in the newspapers, little or no reliance is had upon that publication, but the court is particular to see to it that they are all mailed to the creditors of the corporation so far as they can be ascertained, and reliance is had principally upon the mailing of the notices.

The general rule is that failure to make application within the time limited by the order, in these cases of insolvent corporations, is not conclusive against creditors. This was so held distinctly by Chancellor Green in Grinnell v. Insurance Company, 1 C. E. Gr. 283. He there declared that those creditors-who do present within the time do not thereby obtain a vested right to a certain dividend to the exclusion of others. (In fact,, this court had no power, except by implication, previous to the corporation revision taking effect July 4th, 1896, to make any order absolutely barring creditors.)

In that case, the applicant was circumstanced somewhat as-are these applicants. He was an officer of the insolvent corporation, held a bond and mortgage as security for certain moneys-which he advanced for it, and supposed that it was sufficient to pay him, but a foreclosure resulted in a deficiency, and it was-for this deficiency that he asked to be admitted as a creditor after the time limited.

'The fundamental equity at the bottom of the chancellor’s-decision was that equality is equity.

Applying that doctrine here, I think the applicants should boadmitted.

. It is further claimed that they should be'admitted upon the-same basis as the creditors already admitted, and have a preferential dividend out of the assets in hand to such an extent as will put them on an equality with the other creditors, provided there is enough for that purpose. I think, considering that no notice was mailed to them, and that they are not guilty of any laches whatever, that they are so entitled as the logical result of the equitable principle just stated. There is no dispute but that their bonds represent a real indebtedness of the company.

Borgfeldt & Company also presents a claim to be admitted as a creditor on the twenty-five bonds, of $1,000 each, which it received from the company directly and holds as collateral to its claim provided Pfeiff and Austin are admitted.

Borgfeldt & Company has already had a share of the proceeds of the sale of the real estate.

But, beyond a share in the proceeds of the sale of the mortgaged premises, I think that it cannot be admitted as a creditor by reason of its holding these bonds as collateral. To do so would be to increase the debts- of the insolvent corporation beyond what they actually are. The only effect of giving Borgfeldt & Company the bonds as collateral to its debt was to give it a specific lien to that'extent upon the real estate, in common with the other holders of the bonds secured by the trust mortgage, and.it must be content with the proceeds of that lien.

So far as regards the personal obligation of the corporation, the bonds in question had no validity, and their delivery to Borgfeldt & Company did not increase the indebtedness of the insolvent corporation. The attempt by á debtor to increase, in case of insolvency, the security of his creditor by giving him his own personal obligation as collateral, is simply absurd.

The case cited by the counsel of Borgfeldt & Company in support of his application, viz., Duncomb v. Railroad Company, 84 N. Y. 190, is clearly distinguishable. There a party, upon loaning $81,000 to the railroad, received $810,000 of their mortgage bonds as collateral, and the question was whether he should have a dividend in the proceeds of the sale of the mortgaged premises upon the whole sum of $810,000, or whether he should have it only on the sum of $81,000, and it was held that he was entitled to a dividend upon the whole $810,000, provided the dividend did not exceed the whole amount of the actual debt. The distinction between that case and this is apparent at once. There the question was as to a share in a particular fund, and not in the general estate, and it is to be observed that the claimant was not allowed a dividend upon both the $810,000 of bonds and the $81,000 of actual debt. Here Borgfeldt & Company claims a dividend upon both, out of the general fund. The case cited is an authority against their claim, rather than for it.

I will advise an order in accordance with these views.


text:
    John H. Neldon v. James Roof et ux.
    1. Where an answer is prayed under oath, and defendant denies a material', allegation of the bill, complainant must plead further, or offer proof in behalf of the allegation.
    2. An allegation that “defendant now brings the money into court” is-equivalent to an allegation that defendant, either in person or by solicitor, walked into the court with his answer, and brought the money with him, and, with the answer, delivered it to the clerk.
    3. In a bill to foreclose, where defendant has pleaded a tender into court of the amount due, and the case has been on the docket for several years after’ the pleadings were settled, the -record of the moneys paid into court may he • inspected to ascertain whether defendant’s money was actually received and disposed of in accordance with the statute and the court rules.
    4. Where the amount due is voluntarily paid into court by the owner of the-equity of redemption in a bill to foreclose, and the payment itself and its purpose is pleaded in the answer, there need not he a special order of the court by the chancellor on notice to the complainant, rule No. 34 requiring the-clerk to give immediate notice to the chancellor of all moneys paid into court..
    Heard on bill and answer.

      Mr. Charles J. Roe, for the complainant.

      Mr. Charles M. Woodruff, for the defendants.
   Pitney, V. C.

This is an ordinary bill to foreclose, by an assignee of the mortgage against the owner of the equity of redemption by conveyance from the mortgagor. The mortgage is dated November 24th, 1886, payable in one year, with interest from April 1st, 1886. Complainant’s title as assignee accrued October 20th, 1887. Defendant became the purchaser of the equity of redemption about the 1st of March, 1888.

The bill was filed May 25th, 1888, and the answer on the 17th of July, 1888, since which and until the present year the cause has slept, and then was stirred by the defendant.

It is inferable from the statements of the bill and answer that the amount originally in controversy was $2.

The bill alleges that the complainant took an assignment of the mortgage by request of one Taylor, then the owner of the equity of redemption, and that a parol contract was then entered into between him and Taylor by which the payment of the mortgage was extended to the 1st day of April, 1888. Taylor, the party with whom the contract was alleged to be made, was not made a defendant. Answer is prayed for under oath, and the defendants by their answer deny the making of the contract with Taylor and all knowledge thereof on their part. This puts the allegation in issue, and no replication having been filed or proof offered in behalf of the allegation, it must, for present purposes, be held that there was no contract of extension. This renders it unnecessary to consider the question, well argued by defendants’ counsel, whether such a contract, if proven, would have been binding on defendants, who purchased the premises without notice of it.

The bill alleges that the amount due is the principal sum of $600, and interest thereon from the date of the bond and mortgage, which would be from November 24th, 1886. But the bill also alleges that the bond which the mortgage was given to secure provided for the payment of interest from the 1st of April, 1886. This discrepancy is immaterial because defendant in his answer admits that when he purchased the premises about the 1st of March, 1888, the amount due was $600, with interest from April 1st, 1886, amounting on the 10th of March, 1888, to the sum of $70, making $670 in all, and alleges that on the 9th of March, 1888, he offered to pay and tendered the same, to wit, the sum of $670, to the said complainant as and for the payment in full satisfaction of all moneys then due on the said mortgage, and the said complainant then and there wholly refused to receive the same. The answer further sets up that on the 5th of April, 1888, and before the commencement of the suit, the defendant, at the place of business of the complainant, again offered to pay and tendered to the complainant said sum of $670, being the said principal sum of said mortgage and all the interest due thereon to the said 9th day of March, 1888, being the date of the first tender, as and for the payment and full satisfaction of the said mortgage and all money, both principal and interest, due thereon, and the complainant again then and there wholly refused to receive the same. Then follows this allegation:

“And this defendant further says that ever since said 9th day of March, 1888, the time of the said offer to pay and tender, he has at all times been ready to pay the same, and is still ready so to do, and now brings the same into court.”

The allegations of the answer in this respect are not put in issue, and must be taken to be true.

The points made against the defendant’s position are:

First. That the tender was not good because not made by the original mortgagor and obligor.

I am unable to see any point in this. It was made by the owner of the equity of redemption, against whom this foreclosure is sought. It was made for the purpose of freeing and discharging his premises from the lien of the mortgage, and if properly followed up is a clear defence to this action. In cases where the party making the tender has, under the English practice, demanded a reconveyance, the question has sometimes arisen whether he was the party entitled to redeem and have the reconveyance. No such question arises here.

Second. That there is nothing by which it appears that the money has been actually paid into court.

Admitting for present purposes that payment into court is a necessary part of defendant’s case, the question is whether the allegation in the answer above set forth, which for present purposes must be taken to be absolutely true, is sufficient, viz., that “ the defendant now brings the money into court.” The fair construction of that language is that the defendant, either in person or by solicitor, walked into the court with his answer and brought the money with him and delivered it with the answer to the clerk.

The answer could not state that the money was received by the clerk and disposed of according to the rules and practice of the court. That this was done in the regular course of the business of the office seems to me should be presumed. But I think that in the present posture of the case we may and should resort to the record of the moneys paid into court, exhibited in the accounts of the clerk and court’s depositary of its moneys, to ascertain whether in this case the moneys were actually received and disposed of in accordance with the statute (section 102 of the Chancery act) and the standing rules of the court (Nos. 33 and 34). Such inspection shows that the. sum of $670 was actually received by the clerk from the defendant at the filing of the answer, paid in to the court’s appointed depositary for moneys under the statute and credited to the proper account.

It thus appearing that the money was actually paid into court and there remains subject to the power and disposition of the court, the next objection made is that there could be no efficient payment of the money into court without a special order of the court by the chancellor, upon notice to the complainant. This contention raises an important question of practice which has been carefully considered.

In my judgment the object of all of the rules on this subject, as shown by the discussion in National Docks and Junction Railway Co. v. United New Jersey Railroad Co., 7 Dick. Ch. Rep. 366, 555, is, first, to make sure that the money is brought within the power and disposition of the court, and second, that the object and purpose of the payment be clearly defined. It was held by the court of appeals in that case that payment to the clerk was in effect payment into court. In point of fact, in this court, by a long and well-settled practice, the clerk is the cashier of the court in that respect, as shown by the statute and rules above stated.

But it was also said by the court of appeals in that case that there should be, in addition to such simple payment, some other action taken by which the court itself, as distinguished from the clerk, shall be apprised of and sanction ” such payment, and that the uniform procedure was to obtain a rule or order of the court permitting its payment. But it was also said that each court had the power to establish its own rules and practice on this subject, with the result that a special rule or order in each case might be dispensed with.

In this court the practice has been not to require any order of leave or sanction to be signed by the chancellor, or rule to that effect to be entered in the minutes, where money is voluntarily paid into court by a party to a suit and the payment itself and its purpose is mentioned in a pleading — bill or answer — of the party paying. The pleading in such case stating the object and purpose of the payment gives notice of the payment to the opposite party, and then rule No. 34 requires that the clerk shall give immediate notice to the chancellor of all moneys paid into court. No other written rule on the subject has ever been found necessary, although the actual payment of money into court under the circumstances above stated are numerous and the aggregate amount large. This provision of rule No. 34 for the notice of payment to be given by the clerk to the chancellor, and the absence of any other rule on the subject, is a clear indication that the money may be effectually paid in and actually received by the clerk without any special order signed by the chancellor.

In bills of interpleader, accompanied by payment into court, in order to obtain an injunction,, or in case of a bill for an injunction to stay execution on a judgment and a payment into court to satisfy the requirement of section 80 of the Chancery act, it has never, as I understand, been the practice to obtain an order by way of sanction giving the complainant leave to pay the money into court. But the money is paid and received by the clerk as a matter of right and of course, and the order for the injunction merely recites such payment, the clerk’s receipt for the money being exhibited to the judge or master granting the injunction; or, if payment has not been made before the application, the order states that an injunction shall issue upon condition that the complainant do pay into court &c. The same practice has prevailed in the case of a bill to redeem by mortgagee against mortgagor, or for specific performance by a vendee against vendor, where the bill alleges the tender of the amount due on the mortgage or contract, and also in the case in hand, where the defence is a tender of the amount.

In all these cases I am informed — and such was my own experience at the bar — that it has not been the practice for the party paying to obtain special leave of the chancellor to make such payment. It is made as a matter of course and so received by the clerk, and, in the regular routine of the business of the office, is credited to a particular account and then mingled with the other funds of the court by deposit in the duly-designated bank. It seems to me that this practice answers all the essential requisites of the canon laid down by the court of errors and appeals. It is difficult to perceive any .reason why litigants, in the class of cases mentioned, should be burdened with the trouble and expense of a special order.

In this connection, I think it worth while to state that I have seen the brief of the . counsel for the appellant in'the case of National Docks and Junction Railway Co. v. United New Jersey Railroad Co., 7 Dick. Ch. Rep. 555, and he there cited numerous instances where moneys had been paid into this court and received by the clerk without any order of the court, in cases arising under different special statutes for condemnation of private property for public purposes. The case reported was one of payment of money into a common-law court having no fixed place, under authority of statute and rule, for the deposit of its moneys, and is, in that respect, in marked contrast with this court.

An examination of the English practice (2 Dan. Ch. Pr. 1770 et seq.) shows why the strict rule there prevailing (2 Dan. Ch. Pr. 1786) can have little or no application here. There, ever •since the act of 12 Geo. I. ch. 32 (1785), establishing the office of accountant-general, moneys are not, in point of fact, paid into court, but are paid into the Bank of England to the credit of the accountant-general, and must be placed to a particular account designated by him. That officer, unlike our clerk, has nothing to do with the actual pleadings and proceedings in court, and acts, and must of necessity act, in the receipt of money, entirely by special directions of. the court. Any other practice would lead to inextricable confusion.

In considering the force and bearing of the authorities on this question of tender and payment of money into court, it is necessary, in my judgment, to consider the particular circumstances of each case; for instance, whether the question is as to the effect of the tender in divesting and destroying a lien upon land or chattels, or whether the effect is to stop the running of interest merely, and whether the question arises at law or in equity. In the majority of the cases in equity, the question has arisen upon either the claim of absolute discharge of a lien, upon a bill to enjoin proceedings in ejectment (see Lozier ads. Shields, 5 Vr. 496, an action of ejectment);- or in the matter of interest and costs on a bill to redeem, as in Shields v. Lozier, 7 C. E. Gr. 488; or, as in National Docks and Junction Railway Co. v. United New Jersey Railroad Co., supra, on a question of the actual divesting of title in condemnation proceedings; or in defence to a simple foreclosure suit, as in Stockton v. Dundee Manufacturing Co., 7 C. E. Gr. 56. In Lozier ads. Shields, supra, the court occupied itself wholly with the question of whether or not a payment or tender of the money due on a mortgage, after the day when, by its terms, it became due, had the effect in New Jersey of discharging the lien of the mortgage. In National Docks and Junction Railway Co. v. United New Jersey Railroad Co., supra, the i’eal question was whether the money had been paid into court in such a manner as to be within the easy reach of the landowner.

With regard to the payment of the money on a bill to redeem, ail examination of the authorities found in 3 Pow. Mort. (by Rand.) 933 et seq. and 2 Jones Mort. § 890, shows that formerly the English chancellors treated a mortgagor coming in to redeem after the day fixed for the payment of the mortgage had passed, as a suppliant to the court to be relieved of the effect oí a forfeiture at law, and therefore properly subjected to equitable terms, and those were that he should not suddenly, in such case, pay off his mortgage, but should give at least six months’ notice, and then, as reconveyances were required, the mortgagee was entitled to know that the person asking to redeem was the proper party to whom a reconveyance should be made; and oftentimes the mortgagee was in possession and bound to account for the rents and profits, so that a variety of matters was required to be settled before the amount to be paid could be fixed and the reconveyance made. In all this the chancellors acted upon the idea that they were granting a mere favor to the complainant who asked to redeem, and imposed strict and somewhat severe terms upon him. These, however, as the authorities show, have been much ameliorated in later days, in accordance with advanced notions of justice and equity.

In ease of tender and payment of money to divest title on condemnation proceedings, constitutional rights are met, and the courts are well justified in requiring that the amount found by the commissioners, or the jury, as the case may be, should be put fully and completely within the control of the landowner before it should be held that compensation has been made to him and the title passed to the condemning corporation.

In a simple case of foreclosure and tender and payment into court by the defendant, it seems to me that the considerations above mentioned do not apply. The question — where, as here, there is no cross-bill asking for the delivery and cancellation of the mortgage, and that question is not before the court — is not whether the lien of the mortgage shall be divested and the debt considered as paid, but simply whether or not the complainant when he came into court had just cause and reason so to do, for, in order to entitle him to come into a court of equity to ask for foreclosure, there must have been a substantial failure of the owner of the equity of redemption to pay the debt. The statement found in bills to foreclose that complainant had demanded payment which was refused, is not, in my judgment, a mere meaningless form. And if, in good faith, the money has been tendered and refused, and the defendant has not been put in default by a subsequent demand of payment, and the amount tendered was, in point of fact, sufficient, and the tender was made at a time and place when and where the complainant should have received it, and no reasonable excuse is made for his not receiving it, it does seem to me that in such a case the defence of tender is a meritorious one, and that a court of equity should not apply to it the strict rules that have been applied in other cases. And, speaking for myself as a judge of a court of equity, I wish to protest against the application in this court of those strict rules of the common law on this subject which drew from Lord Tenterden the remark that “the plea of tender is, in practice, so seldom successful, that I am always sorry to see a plea of tender on the record, because I know from experience that it is very seldom made out.” It seems to me that the severe rule adopted by the English common-law courts on this subject, up to within a comparatively recent period, was a blemish — small, indeed, but quite distinct — upon the symmetry of the English common-law practice.

My conclusion on the case here made is that the complainant had no ground of equitable action when he filed his bill, and that it must be dismissed, with costs, but-without prejudice to his right to apply to the court to have the money in court paid out to him.

Since writing the foregoing my attention has been called to, and I have read, the opinion of Vice-Chancellor Grey in Whittaker v. Belvidere Roller Mill Co., filed since this cause was argued. The learned vice-chancellor there dealt with the case of a tender to the complainant, with the demand of an assignment of the bond held by complainant, made after suit brought, and payment into court without any order of the court or notice to the complainant, and unaccompanied by any pleading. What the allegations of the answer in that behalf were does not appear. In the meantime other persons holding other bonds secured by the same mortgage had been made parties complainant. The original complainant waived the defects, if any, in the tender, by asking — but for some undisclosed reason without success— to have the money paid out to her, and the question seems to have been whether the tender and payment into court terminated the suit so that the- new parties complainant could not proceed with it. The learned vice-chancellor, in speaking of the effect of the attempted tender and payment into court, merely reiterated the rule laid down in National Docks and Junction Railway Co. v. United New Jersey Railroad Co., supra, and held that the tender and payment into court did not affect the proceeding nor stop the interest running to the original complainant.

The case of a tender after suit brought and payment into court, as shown by Wright v. Behrens, 10 Vr. 413, and Levan v. Sternfeld, 26 Vr. 41, stands on an entirely different footing from that of a tender before suit brought. By the well-settled practice in the law courts in such a case there must be a special order of the court made. Besides, in Whittaker v. Belvidere Roller Mill Co. there was no unconditional tender, but an offer of payment with the money produced, accompanied with the demand of an assignment, which the vice-chancellor held, under the circumstances, was inefficient because not made to the proper party, or by a party showing that he had any equity to the assignment. It was eminently a case where the remedy of the party making the tender was to apply to the court, showing his right to subrogation, and ask for an order that the complainant accept the amount due her, with costs, and assign the claim to him, or that he be subrogated to her rights. I see nothing in the case to vary the result I have above stated.