author: Pee Cueiam.

text:
    American Mechanical Improvement Company, complainant, v. Des Lauriers Aircraft Corporation et al., defendants.
    [Decided September 22d, 1922.]
    On appeal of Des Lauriers Aircraft Corporation et al.
    On appeal from a decree or order of the court of chancery advised hy Vice-Chancellor Fielder, who filed the following opinion:

      “A written agreement, dated April 3d, 1918, between Des Lauriers Aircraft Corporation, of the first part, and complainant of the second part, contains the following recitals and provisions:
    “The Des Lauriers Corporation, owning and controlling valuable manufacturing capital and facilities, agrees to furnish such necessary capital and facilities to manufacture all propellers of the type known as the Slate patents for variable pitch propellers, said type of propeller being covered by patents which are the property of the complainant, granted to Thomas B. Slate, and by him assigned to complainant. •The complainant grants to the Des Lauriers Corporation the exclusive right to manufacture, use and vend all propellers of said type and design and covered by the Slate patents, and also the exclusive use of such further improvements, patented or otherwise, as Slate or his assignees, or the complainant, may invent or patent, such exclusive rights to extend to the United States and all other countries. The complainant shall receive from the Des Lauriers Corporation as a royalty twelve and one-half per cent, of the selling price of each propeller sold by the Des Lauriers Corporation. The executive board shall have power to fix a scale of prices for the various sizes and types of propellers. In addition to the royalties, complainant shall receive one-half of all net profits remaining after the payment of the expenses of production, including salaries, manufacturing and wage costs, a percentage allowed for depreciation and royalties. The Des Lauriers Corporation agrees to employ, during the period said company is actually engaged in producing propellers, Henry A. Pablen as president and treasurer, at a salary of $100' per week; Thomas B. Slate as general superintendent of the manufacturing, at a salary of $100 per week and necessary expenses; H. D. King as general manager of sales, at a salary of $100 per week and necessary expenses. That Slate, because of his skill and knowledge as inventor of the design, shall have sole supervision of the construction of propellers' and the right to select assistants and workmen. None of the officers mentioned may be removed from his position, or have his salary reduced, except by action of the executive board. A book of account shall be kept by the president-treasurer, showing the daily business transacted, which record shall be open to inspection of all parties to the agreement. An executive board is created, consisting of Thomas B. Slate, H. D. King, Walter S. Josephson, George Lanzius and Henry A. Dahlen, which board, in addition to the powers before mentioned, shall consider future contracts, future fields of operation, filing of patents and generally all matters relating to the welfare of the business and reach conclusions thereon. Any improvements upon the Slate'patented propeller shall inure to the benefit of the parties to the agreement and be subject to the provisions of the agreement and exclusive manufacturing rights therein shall be controlled by the terms of the agreement.
    “The bill of complaint, filed November 6th, 1918, alleges that after the making of the agreement the Des Lauriers Corporation undertook the manufacture of the design, but failed to furnish the necessary machinery or help to proceed with the work; that on or about the time the agreement was executed the United States government, after a test of propellers of the Slate type, gave an order for one thousand thereof; that Dahlen, the president-treasurer of the Des Lauriers Corporation, employed a draftsman to design a different propeller and endeavored to have it accepted by the United States government and that the expense incurred by the Des Lauriers Corporation in experimenting on such propeller was charged to the expense of manufacturing the Slate propeller; that Dahlen discharged Slate as superintendent of the factory; that the Des Lauriers Corporation sold one thousand of the propellers for $50,000 and has contracts for three thousand more for the sum of $130,000; but refuses to pay complainant any royalties or to permit complainant to examine its books; that Dahlen claims to have made large advances to the Des Lauriers Corporation and received checks from the United States government on the sale of propellers, which he deposited to his own credit, claiming to reimburse himself for such advances; that Dahlen, for himself, or another corporation, carried on other work at the Des Lauriers plant and the workmen were intermingled, working part of the time on the Slate propeller and part of the time on other work, and that a large,- amount of the expense claimed by Dahlen to have been incurred on the propellers was really incurred on other work and fraudulently charged to complainant; that the United States government is greatly in need of propellers of the type in question and if the contract with the Des Lauriers Corporation is abrogated complainant could procure other concerns to manufacture ; but so long as the contract remains in force no other concern will manufacture for fear of suits by Des Lauriers Corporation for infringement of the patent. The Des Lauriers Corporation and Dahlen are made defendants and the bill prays that an account may be taken of the amount due complainant under the agreement; that Dahlen account for money received by him for the corporation and of the money advanced by him; that upon final hearing the contract be declared to be null and void and canceled and that defendants be required to account for and pay to complainant the moneys alleged to be due it.
    “The defendants’ answer admits that complainant is the owner of a device known as a variable-pitch-governor controlled propeller, covered by an United States patent, but that it was anticipated by prior inventions and by prior patents; that the device was originally invented for a driving propeller and that Slate did not attempt to adapt it to a regulating air fan until some time after the patent was issued, and they deny any breach of the agreement of their part. By way of counter-claim they allege that the negotiations leading up to the making of the agreement were for the manufacture of a device known as a regulating air fan; that Slate, for complainant, represented that complainant was the owner of letters patent for such air fan and had detailed working drawings of the invention and that models thereof had been manufactured, all of which would be delivered to defendants; that relying on such representations the defendant company entered into the contract, believing it was securing the right to manufacture air fans under existing letters patent; that when the defendant company called on complainant for drawings and model complainant failed to furnish same and defendant was required to make its own and conduct experimental work, which caused delay and prevented it from manufacturing fans at a profit; that defendant attempted to manufacture fans of the type and character of the model presented by complainant; but after a number of fans so manufactured had been rejected by the government defendant abandoned the attempt and thereafter no fans of that type were manufactured, because the device was impracticable and also because defendant discovered that the patent which complainant owned did not cover the fans and that the fans manufactured were infringements on prior patents; that the representations that complainant had such patent and had working drawings and a model of the fan were false and made with intent to deceive defendants; that the contract is void as against public policy, because the price to be charged the government for the fans was fixed at an exorbitant figure through the control of the executive board therein provided for. The defendants pray that the agreement be declared null and void because of complainant’s fraud and misrepresentations and that complainant be compelled to surrender and cancel the same.
    “Having stated the agreement that the issues raised by the pleadings, I shall proceed to discuss the facts as gathered from the testimony taken on final hearing.
    “September 4th, 1917, letters patent were granted by the United States to Thomas B. Slate for a device therein described as an improvement in air propellers, the general object or principle of the invention being particularly described in the specification annexed to the letters patent and which letters patent were assigned to complainant. The idea or principle of the invention came to the attention of the chief signal officer of the United States army and by letter from his office, dated February 15th, 1918, Slate was requested to furnish information concerning his invention. Upon doing so Slate was further requested to construct a small model of a self-regulating air fan, embodying the principle of his propeller patent, to be attached to airplanes for ihe purpose of generating power for radio telegraphy or telephone, by which the operator of an airplane could communicate with the earth, or with other planes. Slate thereupon constructed five models, all of which were tested under the supervision of signal corps officers, and the fifth model was approved and accepted by the signal corps and designated ‘Model F. A. 4.’ Shortly thereafter, on April 3d, 1918, Slate was introduced to Henry A. Dahlen in Washington, D. C., and negotiations between them resulted in the preparation and execution that day of the agreement which is the foundation of this suit. Slate contends that Dahlen represented that his company had a factory well equipped with machinery and appliances necessary for immediate manufacture of the. fan accepted by the government, when in fact the machinery was wholly inadequate for the purpose, while Dahlen contends that' Slate represented that he had a working model and working drawings of the fan which could be used immediately for the production of fans in quantities, when in fact he had no such model or drawings. I do not find in such negotiations that there was fraud or willful misrepresentation on the part of Slate or Dahlen. Each failed to exercise ordinary business judgment and precaution to examine what the other had to offer before entering into an agreement, which, had the war continued instead of coming to an end within seven or eight months thereafter, would have involved many hundreds of thousands of dollars. Slate denies representing that he had a working model and working drawings of the fan and I cannot credit Dahlen’s assertion to the contrary. A model of the device as applied to air propellers was exhibited at the conference which preceded the execution of the agreement, but no model of the air fan was produced. Slate had prepared five models of the device as applied to an air fan, in his own shop with his own hands, in three weeks’ time and had but recently submitted them to the government. The adaptation of the principle of his patent to air fans was new, but the device was the creature of his own hrain, and for the purpose of constructing the air fan models for the government tests, he had not needed working drawings and between the acceptance of his model and the execution of the agreement too short a time had elapsed to prepare such drawings. It seems reasonable that he should have believed, as he testified he did, that if unaided he could construct five models in three weeks he could turn one out with the aid of the defendant’s company’s machinery, workmen and financial backing, in much less time and that while the model was being constructed under his direction a set of working drawings could be prepared also. Dahlen knew that Slate’s model had been accepted by the government and it is reasonable to believe that he would therefore not be insistent upon the actual existence of another working model and plans, but would assume that they could be prepared speedily under Slate’s supervision. At the time the agreement was executed no order for fans had been obtained from the government, so that no immediate need was apparent for a model and drawings. Had Slate stated at the conference preceding the execution of the agreement that he had a model and working drawings of the device as applied to h fan, Dahlen would not have been content with being shown only the letters patent, specification and model of the device as applied to a propeller; but he would have requested the production of the fan model and drawings when they met to sign the agreement. I conclude that the circumstances do not bear out Dahlen’s testimony on this point. There was certain machinery at the defendant company’s plant and from Slate’s description of the article to be manufactured, Dahlen may have believed such machinery sufficient for starting the business in which they were about to engage and I shall -assume that such was his honest belief.
    “The day after the agreement was signed Slate and Dahlen went to the office of the chief signal officer and then and there received an order for one thousand fans, deliveries to start April 22d, and a day or two later Slate came to the defendant company’s plant in Newark and for the first time saw for himself what manufacturing facilities it had. He made no objection to the conditions he found there, but started to prepare a model of his fan. About the same time Dahlen returned to Newark and he saw Slate at his factory April 9th or 10th and talked with him about the model, learned he did not have one, but cannot recall whether they discussed working drawings. In any event, he did not protest that Slate had assured him of the possession of these things, and although he knew that delivery was to commence on the government order April 22d he did not come to the factory again until April 18th. Both model and drawings were then discussed and finding that Slate had not produced either Dahlen called in Bunk, who was in charge of the factory and of his interests and told Bunk to take charge of getting out the model and drawings. This act supplanted Slate as general superintendent of manufacturing and at least divided the responsibility for future progress of the 'work between Slate and Dahlen's representative up to May 8th, on which date Dahlen placed Bunk in sole' charge of the factory and Slate was excluded from any control over manufacturing operations. It will be noted that this procedure was contrary to the provisions of the agreement which, placed the control over and power to remove Slate in the executive board. The working drawings were completed May 13th. It has not been shown to my satisfaction that the delay up to April 18th in producing the model and drawings can be attributed wholly to Slate. Slate claims that other work was being carried on at the'defendant company's factory; that he was not given a sufficient number of men to assist him and that the machinery was inadequate for the work on which he was engaged. By May 10th Dahlen, or his company, had expended a considerable sum of money for new machinery, which would indicate that when the agreement was executed the machinery on hand was insufficient or unsuited for the business, and I call attention again to the fact that in his shop at Washington Slate had, with his own hands, constructed five models in three weeks. By May 16th the defendant company was producing at the rate of ten fans a day, but it was some time in August before production was placed on a quantity basis. Dahlen claims to have expended $90,000 to $100,000 for labor, machinery and material before quantity production was reached. This seems incredible, and as he has made it impossible to substantiate his statement by a reference to his company’s records, I cannot accept it as true.- Shortly after the bill of complaint was filed this court directed the defendant company to retain all its books and records within this state, subject at any time to production and inspection by complainant; yet Dahlen refused permission to complainant’s representative to examine these records and removed them from the company’s factory in Newark to a building owned by him in an isolated section of Jersey City, occupied only by a caretaker, who- received no wages- and who paid no rent, and when the caretaker had been away sevqral days the building was entered by thieves and all records which would be of any value in this case were stolen and have not been recovered. I shall add that I regard the whole of Dahlen’s testimony as unconvincing, because he was evasive, suffered a loss of memory on matters of importance and contradicted himself frequently, and also because a few weeks after the agreement in question had been signed another man was secretly employed under his direction 'to design an air fan (called the Pinaud fan), using Slate’s idea as the basis for such design, which other fan Dahlen caused to be submitted to the government with the purpose of securing a contract for its manufacture and thus supplant the 'Slate fan. My conclusion is that the delay in preparation of the model and drawings and in producing the fan cannot be charged to Slate.
    “The defendants claim that they rescinded the agreement May 10th, 1918, and thereafter did not manufacture under it. Neither their answer nor the counter-claim set up this defence, but, on the contrary, the counter-claim prays - that the agreement may now be declared void. This claim grows out of what transpired at a meeting called by Dahlen on the date mentioned, at which several persons, including Slate> were present, but this did not purport to me a meeting of the executive board created by the agreement. Dahlen testified that at this meeting he told Slate he was dissatisfied with the lack of progress and with Slate’s failure to produce a model and drawings; that he had expended $14,000 on the proposition and had made no headway; that he must rescind the contract with’ complainant and go ahead and get out to the best of his ability; that Slate replied that he did not blame Dahlen and that he would take matters up with his people in Washington so that a new contract could be presented ; that a new contract was presented but not signed by Dahlen. Slate testified that the meeting in question discussed an entirely different subject and that Dahlen said nothing about rescinding the agreement. Whether this conversation as stated by Dahlen occurred or not, what Dahlen claims to have said to Slate was not notice to the complainant of a rescission of the agreement, and the defendant company continued to manufacture the fan up to the following December, and Slate continued on experimental work under defendants’ direction. Thus we find that on July 19th, 1918, Dahlen wrote Slate instructing him not to speak to or interfere with the workmen, but that he could go through the factory, inspect the work and report anything he had to say to Funk; that they (defendants) could not get production without Slate’s co-operation and that he should make any suggestions he had to Funk. On August 10th, 1918, Dahlen wrote King that he thought they should continue to manufacture the Slate fan rather than another fan and that Slate should spend his time developing designs for a larger propeller. September 17th, 1918, Dahlen told Captain Couant of the signal corps that he expected to pay royalties and half profits to complainant, as provided in the agreement, and about the same time he took a second order from the government for the Slate fan. In an affidavit made November 18th, 1918, and filed in this cause, Dahlen denies that he ever said he did not intend to carry out the agreement and pay royalties. If Dahlen or his co-defendant considered rescinding the agreement May 10th, 1918, their subsequent conduct shows conclusively that they abandoned such intention.
    “The next defence.presented is that if complainant contends that the fans manufactured are within the claims on which the Slate patent is based, then complainant ought not be entitled to relief in this court because the Slate patent is an infringement on prior inventions and patents. There has been no eviction or threatened eviction of defendants from the patent rights, but, assuming that the fans were manufactured under the patent, they have continued to enjoy those rights. This defence will not avail, because the licensee cannot set up the invalidity of a patent, the right to use which he holds by license, unless there has been something equivalent to an eviction of the licensee. Macon Knitting Co. v. Leicester Mills Co., 65 N. J. Eq. 138; Ferry-Hallock Co. v. Progressive Paper Box Co., 76 N. J. Eq. 1.

    “The defendants further contend that the air fan it manufactured and sold is not a fan of the same model as that which Slate constructed and as was accepted by the government, or, stating the proposition another way, that the fan it manufactured and sold was not the patented invention for which the defendant company agreed to pay royalties. The defendants claim that Slate’s patent was for an improvement in air propellers and that the agreement between complainant and defendant company .was for the exclusive right to defendant company To manufacture, use and vend all propellers of the type and design hertofore described and covered’ by said patent. The complainant contends that all the negotiations leading up to the execution of the agreement had to. do with the manufacture and sale of an air fan, embodying in its operation the idea and principle involved in the construction of the propeller. Slate’s model of the air fan had but recently been accepted by the government, and the probability of securing a contract for its manufacture was under discussion during the negotiations preceding the execution of the agreement, in fact, the order for the fans was secured the following day. In the same discussion the question was raised as to whether the Slate patent was broad enough to cover the fan and it was agreed that it was sufficiently broad. At the same time Dahlen saw the letters patent and read the specification covering the invention. There was no consideration given to the manufacture of the propeller and no order for it was ever sought or obtained and none were manufactured under the agreement. The fan was the important article when the agreement was executed and the whole efforts of the parties were directed thereafter to producing the Slate fan. Besides the words which I have quoted from the agreement a few lines above, the agreement further gives to the defendant company the ‘exclusive use of such further improvements, patented or otherwise, as said Slate or his assignees, or the party of the second part [defendant company] may invent or patent during the life of this contract/ and the agreement further provides that ‘any improvements upon the Slate patented propeller herein described, when made by any party to this agreement, shall inure to the benefit of the parties to this agreement and be subject to the provisions of this agreement and the exclusive manufacturing rights therein shall be controlled by the terms of this agreement.’ The only changes that appear to have been made in Model F. A. 4 were mechanical in detail of design and were made with the consent of the government to make manufacturing more economical, but had nothing to do with the principle of device, and the fans manufactured by defendant company and accepted by the government were comparable, if not identical, with the Model F. A. 4, and they had stamped thereon ‘Signal Corps, U S. Army, Amico Air Fans, Model F. A. 4, made by Des Lauriers Air Craft Co.’ It should be noted here that the ‘Pinaud fan/ which the defendants attempted to develop, had not been accepted by the government, and, so far • as appears from the evidence, no fans of that design were sold by defendant company. I conclude that the article the defendant company manufactured and sold was the thing they had in mind when the agreement was signed and which they intended to describe therein, namely, an article of the type and design of the Slate fan, and if the article manufactured and sold varied in any respect from Model E. A. 4-, the changes or improvements made by the defendants, patented or otherwise, inured to the benefit of complainant and became subject to the terms of the agreement.
    “The final defence presented by defendants is that the agreement should be declared void as against public policy because it provided for an executive board which should have power to fix a scale of prices for the various sizes and types of propellers, the defendants’ argument being that the intent of this provision was to exact an exhorbitant price from the government in the war emergency which confronted it. One answer to this contention is that the patent itself creates a monopoly and against the patentee there can be no competition ; he may fix any price he chooses for his article and the provision attacked merely passes on to an executive board the right the patentee had. Another answer is that the executive board never fixed a selling price. The price on the first government order appears to have been made by Dahlen and Slate and on subseqent orders or order, by the defendant company or Dahlen. After the defendants have joined in fixing the selling price and have received the same, it would be unconscionable to permit them to avoid the agreement on the ground here urged and retain the whole profit to themselves. Since there is no proof of the purpose of this provision, it may be fairly argued that it was intended to give complainant some measure of control over the selling price, rather than place the right to fix the price wholly with defendants. When the royalties to complainant were discussed and fixed, it may be assumed that the amount of royalties bore some relation to profits and selling price and that the percentage of royalty as fixed by the agreement was to produce a sum which the parties considered just compensation to complainant for its patent rights. If the defendant company had the sole right to fix the sale price, the complainant’s compensation could be greatly reduced because the percentage for royalty would remain stationary, while the selling price could be lowered.

      “I conclude that the defendants’ counter-claim should be dismissed and that complainant is entitled to recover royalties and half profits according to the agreement, and that an account should be taken of the number of fans manufactured and sold, the price received therefor and the net profits made on sales, for the purpose of determining the amount due complainant.
    “If there are other items which complainant believes should be covered by the account, I will determine the question when the decree in conformity with my views is presented to me for signature. Since the agreement vests the exclusive patent rights in the defendant company for the life of the patent and provides for no method of revocation, and since the defendant company has failed to perform its part of the agreement and has ceased manufacturing and has apparently abandoned its rights thereunder, it would be inequitable to further deprive complainant of the use of the patent and there should be a decree that the agreement is null and void and is canceled; in fact both complainant and defendants pray for such a decree. The defendant company should also be required to execute and deliver to complainant sirch assignment or transfer as will vest in complainant the title it had in the patent prior to giving to defendant company rights therein.
    “By consent of complainant and defendants, Hugh D. King was admitted as a party defendant and filed a cross-bill against Dahlen and Des Lauriers Corporation, setting up an interest under the agreement, which is the subject-matter of this suit, and under a supplemental agreement subsequently entered into between complainant and defendant company. King alleges that he was employed as general manager of sales for the Des Lauriers Corporation and was to receive as compensation $100 per week and his necessary expenses and five per cent, on the gross selling price of all propellers produced under said agreement; that the defendant company refused to permit him to perform his duties and also refused to pay his compensation or to account for the number of propellers sold. He prays for an account as to the amount he is entitled to receive under the agreement. King might not be able to obtain full, adequate and complete remedy at law, because the agreement was not made directly with him and also because under the strict working of the agreement he was to be paid for selling ‘propellers,’ whereas ‘fans’ were sold. This court having assumed jurisdiction of the bill of complaint, has power to give relief to all parties having an interest in the agreement which is the subject-matter of the suit and thus prevent a multiplicity of suits, and the cross-bill will therefore be retained. The merits of King’s claim were not considered at the final hearing because it was desired to first determine whether complainant would be able to maintain its bill. On proper motion, I will fix a day to take proofs on the question whether or not King has a valid claim against the defendant company.”

      Mr. Philemon Woodruff, for the complainant.

      Messrs. Treacy & Milton and Mr. Nathan H. Berger, for the defendants.
   Pee Cueiam.

The decree order appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Eielder.

For affirmance — The Chief-Justice, Swayzb, Teenchaed, Paekeb, Beegbn, MintueH, Black, Katzbhbach, White, Heppehheimee, Williams, Ackebsoh, Van Buskiek—13.

For reversal—None.


source: Caselaw Access Project

author: Pee Cubiam.

license: Public Domain

text:
    Sarah H. Wilson, respondent, v. Wilson Hotel Company et al., appellants.
    [Decided October 5th, 1922.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Fielder, whn filed the following opinion:
    “On April 9th, 1918, the defendant John W. Wilson was the owner of the premises described in the bill of complaint. By deed bearing that date, in which his wife, the defendant Irene W. Wilson, joined, he conveyed an undivided one-half of the premises to the complainant. The deed was acknowledged the day it bears date and was recorded June 27th, 1919. By deed bearing date September 23d, 1918, the defendants John W. Wilson and wife purported to convey the entire interest in the same premises to the defendant Wilson Hotel Company. This deed was acknowledged October 14th, 1918, and was recorded October 16th, 1918. Complainant contends that although the deed to the Wilson Hotel Company was recorded before she placed her deed on record, the company accepted its deed with notice of the prior conveyance of the undivided one-half interest to her. She alleges that the defendants have been in possession and occupation of the whole of the premises since the conveyance to the company and have excluded 'her from the enjoyment therof, and she prays that the defendant company be enjoined from transferring or encumbering her interest in the premises and that it be decreed that the company owns but a half interest therein and that the defendants account for and pay over to complainant such sum of money as may be found due her for the use and occupation by them of the whole premises. The defendants insist that the deed to complainant was given as security for money loaned by complainant to, John W. Wilson and that it was never delivered to complainant, but that she fraudulently obtained possession of it and recorded it.
    “Prior to the conveyance to complainant John W. Wilson operated the hotel on the land in question and his brother, James A. Wilson, husband of complainant, was associated with him in connection with that business. Complainant contends that she and her husband loaned John W. Wilson money with which to purchase furniture for the hotel, to pay interest on mortgage, taxes and various other expenses in connection with the business and the real estate, and that her husband gave his time to the conduct of the business from the time John W. Wilson bought the property to the organization of the Wilson Hotel Company. She further contends that her husband became a partner in the hotel business with John W. Wilson and that in connection with the partnership John W. Wilson proposed to convey to James A. Wilson an undivided half interest in the real estate, and that by her husband’s direction, he being then very sick, the conveyance of such interest was made to complainant as a gift from her husband to her. He died May 3d, 1919. The proofs seem to bear out complainant’s contention as to the existence of such partnership; but whether or not that business relation existed between the brothers, the fact is that a deed was executed by John W. Wilson and wife to complainant, which on its face is an absolute deed. I am satisfied from the evidence that after it was executed and acknowledged it was at once, at the grantors’ direction, delivered to complainant and that thereafter she gave it to her husband to keep for her. He probably placed it in the hotel safe, where complainant found it after his death and she then recorded it. The deed was unaccompanied by any written agreement to show that it was to be considered as security for money which complainant or her husband had loaned John W. Wilson or that a reconveyance would be made to the grantor upon the performance of certain conditions. The burden of proving that the conveyance was not intended-to be absolute rests on the defendants and their proof must be clear and convincing. I do not think that they have sustained such burden.
    “The facts surrounding the conveyance by John W. Wilson to the hotel company are as follows: In September, 1918, that company was incorporated under the laws of this state. John W. Wilson and James A. Wilson were the real incorporators and at the stockholders’ meeting they and their sister, Jennie Harrigan, were elected its first directors. At the first’ meeting of the directors John W. Wilson made a formal offer to sell the premises with the contents of the hotel to the corporation for the whole amount of the capital stock of $20,000, which offer was accepted by the directors and the stock therefor was directed to be issued to John W. Wilson or his nominees. John W. Wilson instructed the company to issue three shares to himself, ninety-five shares to his wife, Irene, and ninety-nine shares to James A. Wilson, the remaining three shares being held by Jennie Harrigan. James A. Wilson, to whom a certificate for ninety-nine shares was issued, surrendered that certificate and in lieu thereof a certificate for fifty-nine shares was issued in his name and a certificate for forty shares in the name of complainant. The deed from John W. Wilson and wife to the corporation was shortly thereafter executed, delivered and recorded. All the stockholders and directors of the corporation knew of the deed from John W. Wilson to complainant. John W. Wilson, his wife and Jennie Harrigan testified that James A. Wilson produced it at the directors’ meeting, surrendered it to the company and accepted stock for himself and his wife in lieu thereof. The complainant insists that she did not know of the organization of the company until her husband handed her forty shares of stock in December, 1918, and that he then informed her that the company was formed solely for the purpose of running the hotel business and that she did not know that the real estate had been conveyed to it until after her husband’s death. In any event, she was not an incorporator, nor a director, nor was she present at any meeting of stockholders or directors, and she denies that her husband surrendered her deed at the directors’ meeting and agreed to accept stock in the company in exchange for her interest in the land, and she testified that after the company had been organized her husband told her he still held the deed for her. She further testified that if he did surrender it to the company he acted without her knowledge or authority. I think that after complainant's deed had been delivered to her and she had given it to her husband to keep for her, the defendants must show that James A. Wilson had authority to surrender the deed in exchange for stock in the company and, failing to produce any proof to show such authority, he could not bind her if he did what the defendants say he did. ' .
    “I find, therefore, that the deed to complainant was not given as security for or in satisfaction of any money which she may have loaned the defendants, but that it was an absolute conveyance and that the defendant Wilson Hotel Company should be enjoined from conveying or encumbering her undivided one-half interest in the premises thereby conveyed. The occupation of the premises by the company was a denial of the right of the complainant as co-tenant and an exclusion of her from the enjoyment thereof, and I will therefore direct that an account be taken of the value of the use and occupation by that defendant since the date of the deed to it and that on such accounting complainant be charged with her proportionate share of such payments as the company may have made on account of the real estate since the date of its ownership, by way of taxes, interest on mortgage, repairs and the like.”

      Messi's. Gongleton, Stallman & Hoover, for the respondent.

      Mr. Thomas P. Fay, for the appellants.
   Pee Cubiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Fielder.

For affirmance-—'The Chief-Justice, Swayze, Teenchabd, Pariceb, Beegen, Mintueh, Black, Katzenbach, White, Williams, Gaedneii, Aokeeson—12.

For reversal—None.


author: Per Curiam.

text:
    William F. Redmond et al., complainants, v. Mary S. Gummere et al., defendants.
    [Decided November 20th, 1922.]
    Appeal of Bobert C. B. Parker.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Buchanan, who filed the following-opinion :
    “The bill is filed for construction of the will of Elizabeth D. Gummere, deceased, and directions to the substituted trustees of a certain trust therein and thereby created. None of the facts are in dispute.
    “Testatrix died December 21st, 1874. By the third clause of her will she gave to her trustees certain real estate in Philadelphia, upon' the following trusts:

      “ ‘To pay the net income thereirom “to my said two daughters, Anna M. and'Ellen E., for their joint use as long as they remain living and unmarried, and to the survivor of them so long as she remains unmarried for her sole use. Should either of them marry; to pay the same to thei other so long as she lives unmarried, and upon her marriage or death to sell * * * and to pay over and divide the proceeds of such sale among my children, Maria M. Parker, Barker Gummere, Charles J. Gummere, Anna M. Gummere and Ellen E. Gummere, in equal shares, in all cases the children of a deceased parent to receive said parent’s share.” ’
    “By the fourth clause of the will a gift was made of $2,000 to the trustees to be invested and held upon the same trusts.
    “Neither of the equitable life tenants married. Anna died January 20th, 1905, and Ellen died May 3d, 1920. The present trustees have sold the real estate and have in their hands for distribution to those entitled thereto a fund of upwards of $30,000, being the aggregate principal of the two trust funds (plus some income accumulated since the death of Ellen). The issue is as to who are the ‘equitable remaindermen’ under the terms of the will, and the circumstances which have occurred.
    “The two trust funds may of course be considered as one, for the trusts are identical and are in reality both of personal property, because of the direction to sell the real estate. Cool v. Cook, 20 N. J. Eq. 375; Crane v. Bolles, 49 N. J. Eq. 373; Camden Safe Deposit Co. v. Guerin, 89 N. J. Eq. 556 (at p. 558); Cranstoun v. Westendoorf, 91 N. J. Eq. 34 (at p. 36); Triplett v. Ivins, 112 Atl. Rep. 509 (at p. 510).

    “The only words of gift to the five named as ‘equitable remaindermen’ are in the direction to pay and divide. Ordinarily the vesting of such gift would not-take place until the arrival of the time for distribution, but where the time of payment is postponed only for the purpose of letting in a life interest, the remainder interests vest immediately on the death of the testator. Post v. Herbert, 27 N. J. Eq. 540, followed by a long line of subsequent cases, among the more recent of which may be mentioned Cranstoun v. Westendoorf, supra (at p. 37); Freund v. Freund, 91 N. J. Eq. 80; Shepherd v. Davis, 91 N. J. Eq. 468 (at p. 471).

      “This, is precisely the situation in the case at bar. The distribution to the ultimate beneficiaries is postponed to a time subsequent to the death of the testator, only for the purpose of letting in the intermediate estate. This intermediate estate is, at maximum, an estate of two lives. It is tire tjqsieal case of a remainder after a life estate, and subject to no uncertainty except the precise time of the certain termination of the preceding life estate.
    “Although the remaindermen in fact constitute a class, yet the gift is to them by their respective names, and with the further qualifying clause fin equal shares.’ There can be no doubt, therefore, that the gift is in severalty and not as joint tenants. Dildine v. Dildine, 32 N. J. Eq. 78; Pennsylvania Co. v. Riley, 89 N. J. Eq. 252 (at p. 255).

    “All five remaindermen survived testatrix, and each of them therefore became immediately vested of an undivided one-fifth share in the equitable remainder.
    “The meaning and effect of the concluding clause of the trust or gift, fin all cases the children of a deceased parent to receive said parent’s share’ is of course perfectly clear, to this extent: that as to each of the five named remaindermen, if he or she dies before the arrival of the distribution period, leaving children, the share or interest theretofore vested in him or her shall become thereby divested and shall vest in such children. Security Trust Co. v. Lovett, 78 N. J. Eq. 445; Trenton Trust Co. v. Moore, 83 N. J. Eq. 584 (at p. 587); affirmed, 84 N. J. Eq. 194; Hicks v. Hicks, 84 N. J. Eq. 515 (at p. 518); Miers v. Persons, 92 N. J. Eq. 17.

    “Since the divesting is to occur only in favor of children of a remainderman predeceasing the distribution period, there is no divesting in the case of a remainderman dying without children, and in such case the vested share or interest passes to the personal representative of the one so dying. Brown v. Fidelity Trust Co., 82 N. J. Eq. 323 (at p. 326); Trenton Trust Co. v. Moore, supra.

    “The word. Children’ in a will does not ordinarily mean anj'tbing other than its natural and usual meaning in everyday language. There is nothing in this will to indicate that its meaning was intended to be more extensive.
    “The contingent substitutionary gift is to The children’ of the deceased parent. This is a gift to a class, the ascertainment of which class is to be made at the death of the parent. The children surviving the deceased parent become immediately vested in. the interest, in substitution for the parent. The gift, however, being to them as a class, without words of severance or any other indication of a contrary intent, they take as joint tenants, and hence with the right of survivorship. Crane v. Bolles, 49 N. J. Eq. 373; Harris v. Tichenor, 28 N. J. Eq. 328.

    “At the oral argument the contention was made by counsel for Eobert Parker that testatrix could not have intended her daughters Anna and Ellen to take immediate vested one-fifth interests in the remainder, since they were the life tenants, and if such had been the intention of testatrix she would have given each a one-fifth share outright and applied the trust provisions only to the -three remaining shares. Eeference to the language of the trust, however, shows that this argument is without sound basis, for the life estate is not unqualified—it is an estate for life and spinsterhood. If either life tenant marries the termination of her life interest is thereby accelerated; if the other is still living and single, the entire interest of the first, except as to the remainder, passes to the second. Testatrix could not give to either an absolute share outright without interfering with this design.
    “It remains only to apply the principles hereinbefore set forth to the facts of the case at bar. Of the five remainder-men, Charles J. Gummere died first (in 1880) intestate, unmarried, and, of course, without children. No administration was ever issued on his estate. His four brothers and sisters became entitled in equal shares to his oné-fifth interest, subject to his debts. There was no collateral inheritance tax at that time upon such intestate succession, and at this late date there can be no debts.
    “Anna M. Gummere died without children, leaving a will of which William E. Eedmond is substituted administrator
      cum testamento annexo. The latter is entitled to one-fourth of the trust fund: Anna’s original one-fifth plus the one-fourth of Charles’ one-fifth.
    “Ellen E. Gummere likewise died testate and without children. William F. Redmond as her executor is similarity entitled to one-fourth of the trust fund.
    “Maria M. Parker had four children, Elizabeth, Helen, Charles J. and Frederick. She died in 1900, intestate, survived by her two sons only. They took jointly their mother’s original one-fifth share, and severally, as her next of kin, the one-twentieth which came to her from Charles J. Gum-mere. Frederick died in 1907, leaving a will of which Mary H. B. Parker is executrix. The latter is therefore ■ entitled to one-fortieth of the fund. Charles J. Parker died testate in 1917. Alida M. Parker, as his executrix, is entitled to one-fifth plus one-fortieth of the fund, or nine-fortieths.
    “Barker Gummere died in 1895, leaving eight children, who took, as joint tenants, his one-fifth share. Two are now dead; the remaining six, Mary S. Gummere, William S. Gummere, Elizabeth G. Hamill, Isabelle Gummere, Gertrude M. Gummere and Charles E. Gummere, are jointly entitled to one-fifth of the fund. As to the one-twentieth which came to Barker Gummere from Charles J. Gummere, that passed by Barker Gummere’s will to his widow, Elizabeth S. Gum-mere, as his executrix and sole beneficiary. The latter died in 1898, leaving a will whereby she gave her entire estate to her eight children in equal shares. Barker Gummere, Jr., the executor thereof, is dead. The six children of Barker Gummere already named take each a one-one hundred and sixtieth of the fund, and so also does Trenton Trust Company, as executor of Samuel R. Gummere, deceased, and Truston Trust Company, as substituted administrator cum testamento annexo of Barker Gummere, Jr., deceased.”
    Black, J. (dissenting).
    The hill of complaint was filed in this case to obtain a construction of the third clause in the will of Elizabeth D. Gummere, deceased. She died December 21st, 1874. The will was dated August 30th, 1872. The last equitable life tenant died May 3d, 1920. The facts are sufficiently and clearly stated in the opinion of the learned vice-chancellor, who heard and advised a decree in the case. The decree of the court of chancery was affirmed by this court. The only appeal taken was by Eobert C. B. Parker, a great grandson of the testatrix. He and.his brother, Edward D. G. Parker, were two surviving children of Frederick Parker, who died August 17th, 1907. Frederick Parker and his brother, Charles J. Parker, who died March 26th, 1917, were the surviving children of Maria M. Parker, one of the children mentioned in the third clause of the will of the testatrix. She died in the year 1900. The court of chancery, by its final decree, held the children of Maria M. Parker, Frederick and Charles J., took as joint tenants, with the incident of survivorship. The result being the interest of Frederick Parker, at his death, went to his brother, Charles J. Parker, and not to his children, one of whom is the apellant. The words in the will which give rise to the controversy are these: “to pay over and divide the proceeds of such sale among my children, Maria M. Parker, Barker Gummere, Charles J. Gummere, Anna M. Gummere and Ellen E. Gummere, in equal shares, in all cases the children of a deceased parent to receive said parent’s share.” The learned vice-chancellor, all the children named in the will being dead, applied the rule (the gift being to the children of the testatrix, after a life estate, with a substitutionary gift over to the children of any deceased child). Such children took as a class, as joint tenants with the incident of survivorship. The court finding the will contained no words of severance or any other indication of a contrary intent. The word “children” being used in its literal or restricted sense. But it is a cardinal rule for the construction of wills that all the words must be given a meaning. The fundamental principle underlying all construction and interpretation of wills is to carry out the intention of the testatrix, as ascertained from the will. The words "in equal shares,” “in all cases” excludes the .rule applied by the learned vice-chancellor. The result reached by him, would have been the same if the words in the will “in'equal shares,” “in all cases” the children of a deceased parent, &c., had not been used, under Crane v. Bolles, 49 N. J. Eq. 373. In that case the clause of the will construed contained no words of severance or other expression of intention, which would take it out of the rule, that a bequest to a class, without more creates a joint tenancy—with the incident of susvivorship. The words of the will in that case are, “It is my will that the issue of any child who may hereafter decease shall receive the share or portion to which their parents would be entitled if living.” In Post v. Herbert, 27 N. J. Eq. 547, Chief-Justice Beasley, speaking for this court, said, where a division is directed to be made between legatees, the words: "share and share alike” are clear words of severance, denoting the plurality of interest among the objects of the gift, and therefore the rule invoked is excluded, viz., that a joint tenancy was created.
    So, in this case, the words “in equal shares, in all cases the children of a deceased parent to receive said parent’s share,” is clear and apt language to express the testatrix’s will, that her bequest should be given to those who stood in the place of the deceased parent, the word “children” was not used in its limited or restricted sense. So, the division is directed to be made between the legatees in equal shares denoting a plurality of interest among the objects of the gift, therefore the rule invoked should be excluded.
    I think Frederick Parker’s interest went by law to his children and not to this brother, Charles J. Parker, under the will of the testatrix; to that extent the decree of the court of chancery should be reversed.
    Judge White requests me to add that he is in accord with the above views.

      Messrs. McDermott, Enright & Carpenter, for the appellants.

      Mr. Aaron V. Dawes and Mr. Charles E. Gummere, for the respondents.
   Per Curiam.

The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Buchanan.

For affirmance—Sway.ze, Trhnchard, Parker, Bergen, Minturn, Kalis ch, Katzenbach, Williams, Gardner, Ackerson—10.

For reversal—Black, White, Van Buskirk—3.


author: Pee Cukiam.

text:
    Lillian Coleman, by next friend, respondent, v. William Graff et al., appellants.
    [Decided September 22d, 1922.]
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Buchanan, who filed the following opinion:
    (Orally, after argument.)
    “The bill is filed by the holder of a judgment of record in the supreme court, which judgment remains unsatisfied, against the defendant William Graff, who was formerly the record title holder of premises known as 705 Chestnut avenue, in the city of Trenton, and the defendant Mrs. Jurich, to whom Graff conveyed the property in question, and Mrs. Juricffis. husband, as the holder of the possible interest by the curtesy.
    “The proofs are entirely convincing to my mind that the conveyance of the property by Graff to his mother was made after there had been a conversation between Graff and the complainants, and others representing her, as to Graffs liability- upon his promise of marriage to the complainant. The complainant’s testimony is to the effect that on the 31st day of August, 1920, there was a conversation in the office of Mr. Eraemer, by Mr. Eraemer, Miss Coleman and her mother, on the one side, and Graff on the other, in which Graff was asked as to his promise of marriage and as to his intention of fulfilling it. He said he would not fulfill it-— he would not marry her. There is a conflict in the testimony of the three witnesses of the complainant and Graff upon certain points, but taking it at its weakest for the complainant, it is perfectly obvious that at that conversation the subject was brought rip, and there was sufficient at any rate that took place to make Graff, or any other reasonable man, understand that the complainant intended to take legal action against him if he did not marry her. What other explanation could there be, for instance, for the conference having been had in the lawyer’s office ? There is no serious attempt to deny it. And the denial of Graff wnnt simply to this extent: he denied that at that conference he admitted he had promised to marry the complainant. He did not deny on the witness-stand that he had promised to marry her; he did not deny that at that conference he had said he had given her'the diamond ring or that he had seduced her; he did not deny that at that conference he had said he was not going to marry her. There was some slight attempt in the defendant’s testimony to deny that this conference took' place on August 31st. I am satisfied, however, that it took place either on August 31st or September 1st, that it took place prior to the conveyance. The weight of the evidence is, of course, that it took place on August 31st.
    “Now, with those- facts established, and the fact that the conveyance was thereafter made, on September 2d, and that no consideration—-that is, no then presently moving consideration in the shape of material consideration—was paid for the conveyance to the mother, a case is established which throws upon the defendants the burden of proof.

      “The judgment in the supreme court is, of course, res adjudicaba that there was this liability, that there was this promise and breach of promise from which the liability arose, which was reduced in that suit to a judgment for damages, and therefore that that liability existed at the time the conveyance was made. Now, to avoid the conclusion that that deed of conveyance was made with intent to hinder, delay and defraud creditors, the defendants say the deed was made not with any such intent, but because of circumstances utterly irrespective of anything to do with the liability of the defendant Graff to Miss Coleman. They say that title to the property, when originally taken in Graff’s name, was taken upon an understanding or agreement between himself and his mother that he would pay to her the cash which she paid for the property and also the moneys which she advanced for him upon that property; that she was the one who paid all the consideration for the purchase of the property; and that she had under that agreement a vendor’s lien upon the property until the purchase price was paid; that in the middle of the summer of 1921 it was found that Graff whuld not be able to keep up his payments, and that therefore there should be a rescission of the agreement and conveyance of the property back to the mother, and the whole thing called off. Now, that is, in brief, the substance of the testimony from the standpoint of the defendants. If that were so, and if the consideration were adequate, then there could be no-setting aside of the conveyance in this suit.
    “I confess that the case has given me a great deal of difficulty. To take the testimony and sift out the actual truth from the mass of testimony and evidence that has been offered has not been easy. It is, however, clear that as a matter of law the consideration for this property was not paid by the-mother at the time of the purchase of 705 Chestnut avenue. The proofs show that as far back as 1914, I think it was, the mother (who was then a widow) and the son entered into an agreement for the purchase of a property upon- Emory avenue, and a deed of conveyance was made to them as tenants in common; that shortly after-wards (being also soon after the marriage of the mother to Jurich) the Emory avenue property was sold, and the proceeds used to purchase a property on Beatty street; that young Graff was a party to the contract of sale of the Emory avenue house and a party to the contract of purchase of the Beatty street property, and the deed to the Beatty street property was taken in their names as tenants in common. Thereafter that property was sold and a property similarly bought at 711 Chestnut avenue, and finally the property at 711 Chestnut avenue was sold and with the proceeds of sale of that property, which was some $2,975, ás I recall it, in cash, two properties were purchased at 705 and 707 Chestnut avenue. The title, instead of being taken in the names of the two as tenants in common, was taken in the name of Graff alone as to 705, and in the name of Mrs.-Jurich alone as to 707; as a matter of fact, the deed was made not to Mrs. Jurich herself, but to Antonio Marolda as trustee for Mrs. Jurich, a fact which I will comment on a little later.
    “Now, it is said Graff never had any money in these properties. In the first place, I am by no means convinced of that. I think the proofs show that he did have some money, actually, in these properties. He was working and earning money from 1911 on, and from a time two or three months after he commenced work in 1911 he was earning somewhere around $8 or $9 a week. Now, the uncontradicted testimony is that ,he paid to his mother $5 a week board at or about that time, and some time later $10 a week board, and continued that on up to practically the present time. I think he testified that he was at the present time paying $10 a week board. At any rate, he was paying $10 a week board in 1916 and 1917, during all this time when other people in the same house were paying to his mother board at the rate of only $3.50 a week. Hp until 1917 my recollection is that the testimony was that the boarders were paying $14 a month, and yet the son was paying $10 a week. That was not contradicted ; so that the mother did have funds of his. Of course, the testimony is not clear nor complete as to the actual and complete financial relationship and dealings between the mother and son, but I am satisfied that there were moneys earned by the son which went into that property.
    “However, whether there were or not, he certainly had made himself liable on the contract of purchase,, and also on the assumption of the mortgage indebtedness. (I am not sure that he was quite of age at that time, but he never disaffirmed those obligations ;• on the contrary, he ratified them by participating in the subsequent sale and sharing in the proceeds). There is no slightest evidence of anjr agreement between himself and his mother that she should save him harmless on these obligations, that as between the two the liability was to be wholly hers:
    “And even disregarding all question of consideration by the son, and taking the testimony of defendants at its strongest, there is shown a completed gift of the undivided half interest. The mother says she put the first property in the names of the two as tenants in common in case she got married or anything happened to her. She did get married; so that if there was any condition attached, in her mind, to the gift, that condition was fulfilled. Furthermore, the proofs as to the acts and dealings of the mother and son together in the entire chain of title, shows that there was an ownership and dominion exercised by the son, to a greater or less extent • over each of the properties in succession. It was claimed that the husband, Jurich, had some interest in these properties; that he had put in work in making improvements on the properties, and that he was responsible for some of the enhanced value that was obtained. • That may have been so, but there was not the slightest testimony that there was any agreement between the parties that he was to have a lien on, or any interest in, the properties for what he had done. Neither was there any testimony that might indicate in any definite manner the amount of the value of the improvements he had put in.
    “So that upon the testimony I am bound to conclude that the son was a purchaser and paid the consideration himself for this property at 705 Chestnut avenue. The entire purchase price of the two properties was $7,000, of which the original agreement was that $3,000 'should be paid in cash and the balance by a $2,000 mortgage upon- each property. In fact, when the time came to conclude the matter, the vendors insisted upon having $4,000 in cash and taking only a $1,500 mortgage on each property. Now, as to 705 Chestnut avenue, Graff was the one who executed, and was liable upon, the bond and mortgage. An additional $1,000 was obtained by Mrs. Jurich by borrowing that amount from Antonio Marolda. There is nothing to show that Graff was liable for that debt at all. I assume froih the testimony that Mrs. Jurich was the only one liable to Marolda, although there is nothing to show, on the other hand, that Graff was not responsible. However, that is not material, because (three or four months later that $1,000 was put into the shape of the original proposition by the cancellation of the two $1,500 mortgages and the creation of two $2,000 mortgages, one upon each of the respective properties, and Graff was the obligor on No. 705. Marolda was paid off o.it of the additional $1,000 thus raised. That put the proposition back as originally planned, with the result that the son paid for No. 705 by his bond and mortgage for $2J)00 and the one-half of the $3,000 cash, which was derived from the sale of 711 in which he was a half owner.
    “Now, the testimony of Graff and his mother is, as I have said, to the general effect that prior to the purchase of this property at 705 and 707 Chestnut avenue it had been agreed between them—and the husband, Mr. Jurich, was in some sense a party to that agreement—that because of trouble which had occurred between Mr. and Mrs. Jurich, due to the fact that the son had an interest in this property and was not furnishing as much money to the household as the husband, it was agreed that he was to pay to his mother the purchase price óf No. 705 and also for the improvements that were put on it and that were to be put on, and that this payment was to be made at the rate of $25 a month. I am satisfied that that is not so. I am satisfied both from what I have already said and also from further contradictions and improbabilities in the testimony of Graff and his mother. There was nothing in what was testified to or in the manner of testifying of Graff and his mother to impress me of the credibility of the story as it was told in that behalf. It is not necessary for me to go into detail as to all of the items in that testimony. Graff particularly impressed me in the first part of his testimony as testifying to a story which had been agreed upon and memorized. ‘Later on in his testimony I recall, for instance, he said that this arrangement had been made, that this property at; No. 705 should be paid for by him in this way, at that time when No. 711 was sold. He had a few minutes before that expressly stated that at the time 711 Chestnut avenue was sold there was no idea on the part of any of them that there was to be a purchase of 705 Chestnut avenue, that that was not decided until two or three months afterwards. And there were a number of other instances of conflict of testimony. I recall, for instance, in another part of his testimony, he said that this deed back to his mother had been agreed upon in the middle of the summer. The impression sought to be given was "that the arrangement had been made with the attorneys, that the instructions had been given to have the deed executed at that time, and something had delajed the matter, so that it actually was executed on September 2d. But he afterwards stated, when pinned down, that he never had seen a lawyer or anybody else about the draft of the deed" until the day of its actual drafting and execution. He said he had tried to see a lawyer and had been to the office several times, but had not been able to see him.
    “There was, however, a considerable amount of testimony of, I think, four witnesses at least, which was a thing that gave me some pause, which seemed to corroborate the story as to this agreement for the payment of money. These witnesses said that they had heard conversations in the middle of the summer indicating that there had been an agreement by Graff to pay, and that Graif had failed to keep that agreement, and that therefore the property was to be conveyed back to the mother. Nowr, -when that testimony is analyzed it will be noticed that the only actual facts testified to are these: That there was a conversation at which Mr. Jurich complained' that Graff was not making the payments, and that he ought, therefore, to convey the property to his mother, and that the mother agreed; that' Graff said nothing; nor was there anything said as to the amount of the payments or as to what the payments were to have been made for. There is a question in my mind as to why those particular conversations should have been overheard by these persons; but taking it at its face value, there is no evidence from that testimony of such an agreement as was testified to by the defendant Graff and his mother, namely, that the payments were to be $25 a month and that they were for the consideration price of the property, $1,500.
    ■ “There is another feature that is not without significance,^ and that is that the allegation of the answer is simply that the mother’s interest in the property was under this agreement, which is recited as an agreement to repay $1,500 consideration. The answer does not say that it was an -agreament to pay for money's spent for improvements at that time. The answer says that -the moneys were spent for the conveyance. Counsel has asked leave to amend to conform to the proofs. That does not change the fact that the defence originally set up by these defendants in the answer is different from the story now told by them. The proofs show also that ’Graff himself ordered these improvements made, and that he himself paid for some of them, and that he obligated himself to pay for others.
    “The situation is, of course, complicated by the fact that all three of them lived in the house, and by the fact that, as I say, Graff paid $10 a week board. But it is also significant that in spite of the fact of Graff’s alleged indebtedness as testified by all three of them, and the fact that the mother advanced him further moneys in and about the defence of the suit at law (amounting to some $600 or $700, I think), there has never been the slightest effort on his part to pay any of that back, down to the present time.
    “I am satisfied, therefore, that there was no agreement on the part of Graff at the time of the purchase of this property to pay his mother $1,500 for the property, or any other sum. He had paid legal consideration .for that property, and the property was his, and that leaves, therefore, the conveyance to the mother without consideration, as far as the testimony in this case goes.
    “The claim is made that the conveyance should be considered as repayment, pursuant to the contract, of the moneys loaned by the mother or advanced by her for improvements. As I have said, that was not the original claim. It may have been that the son agreed to pay to the mother payments of $25 a month, or some other sum; that may have been in respect to the $1,000 that was borrowed from Marolda or moneys she had loaned him for the improvements, but I am satisfied that there was no contract and no such situation as has been claimed, which would put the equitable title to that property, either by way oí contract or vendor’s lien, in the mother at the time of purchase.
    “Perhaps the strongest hit of testimony is that of Mr. Satterthwaite, a member of the bar, of unimpeachable standing and veracity. He testified that immediately prior to the purchase of thesé two properties Mrs. Jurich and Mr. Marolda came to his office, and that Mrs. Jurich wanted to know if she could have the deed for that part of the property which was to be hers made to someone as trustee for her, and if that would keep her husband from having any thing to do with the property and do away with the necessity of the husband joining in the deed if and when she wanted to sell it. Now, that; of course, is convincing and conclusive evidence, to my mind, that there was no idea on her part of acquiescing in what they say was the demand of the husband at that time as to the properties. The husband had wanted to have the properties put in the names of himself and his wife, jointly, or' in his wife’s name alone; and she was taking steps to see that he did not have any interest in the property. Mr. Satterthwaite’s testimony thus discredits the entire story of the defendants as to the agreement of the son to pay, which they said was entered into because of the husband’s desires and insistments.

      “As to the monej's paid for the improvements (the claim is that these amounted to between $1,000 and $1,300). I am satisfied that the proof has been insufficient to show the creation of an equitable lien upon the property, for the reasons I have already indicated. Furthermore, even if such a condition existed as would warrant the protection of Mrs. Jurich by a lien upon the property to the extent of these moneys so paid, I think that has been forfeited by the participation which she had in this conveyance made for the purpose (as necessarily follows from what I have said), of hindering and delaying the judgment creditor in the collection of that judgment debt. Iier story is that it was taken as satisfaction for a $1,500 purchase price debt. That I find not to be the fact, and it follows, therefore, that she knew she was getting property worth $1,500 to $3,000 for a claim which, at most, could not exceed $1,300. She knew—she could not help knowing—the situation as to the liability to Miss Coleman. This is certain not only from the evidence as to the nature of the circumstances that existed between herself and her son, but is further corroborated by the testimony of several witnesses as to the remarks made by her at or shortly after the time of conveyance.
    “Upon the whole case, therefore, I am compelled to find that the conveyance should be set aside and the prayer of the bill granted.
    “Costs, including an allowance of $300 for counsel fee, will be awarded against the defendants Grab! and Mrs. Jurich,

      Mr. Maxwell A. Kraemer, for the respondent.

      Mr. Harry Heher, for the appellants.
   Pee Cukiam.

The decree order appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Buchanan.

For affirmance — The Chief-J ustioe, Swayze, Trenchard, Parker, Bergen, Minturn, Ivalisch, Black, Katzenbach, White, Heppeniibimer, Gardner, Ackerson, Van Buskirk—14.

For reversal—None.


author: Pee Curiam.

text:
    Fannie M. Jackson et al., respondents, v. Catherine Jackson et al., appellants.
    [Decided September 22d, 1922.]
    On appeal.from a decree of the court of chancery advised by Vice-Chancellor Fielder, who filed the following opinion:
    “The bill of complaint, in the nature of a bill to quiet title to lands of which Charles Jackson died seized, was filed by Fannie M. Jackson and Charles Jackson, Jr., claiming to be the widow and son respectively of said Charles Jackson, and the defendants are Catherine Jackson and Walter Jackson et al., also claiming to be the widow and sons respectively of said Charles Jackson. The complainant Fannie M. Jackson bases her claim on a ‘common law marriage’ with Charles Jackson, and the complainant Charles Jackson, Jr., claims as their son. The defendants deny the common law marriage and set up a subsequent ceremonial marriage between Catherine (Hayes) Jackson and base their claim on that marriage.
    “Charles Jackson and Fannie M. Jackson (then Fannie Wagner, a widow) met September, 1883, in Brooklyn, N. Y., where they both lived. They were negroes, aged respective^ about twenty-eight and twenty-six years. He was a railroad porter and she was a domestic servant. He called on her frequently and in or about June, 1884, be asked her to be his wife, and she consented, and, subsequently, he fixed some time in December, 1884, as the date of a wedding. When 'that day arrived she was ready for the wedding; but he told her that there was trouble about getting a license and they were not married. Upon assuring her that fit would be all right,’ she consented to sexual intercourse with him on that day. He remained in Brooklyn until the spring of 1885 and continued to visit her. He then went west, remaining away from her until August, 1886, during which time he failed to communicate with her (although prior to leaving he had written her several letters) except once, and that by letter dated September 11th, 1885, from Chicago, 111., in which he offered to send her nfoney and giving his address as the post-office at Chicago. He probabty knew of the impending birth of her child, for the complainant Charles Jackson, Jr., was born September 30th, 1885. .The certificate of this birth gives her age as twenty-eight, her name as Fannie Wagner and the father’s name as Charlie Jackson. When Jackson returned from the west he did not communicate with or visit her, but in August, 1886, she saw him, by accident, on a Brooklyn street and ran after him. She had her baby with her. Jackson was still a railroad porter and also operated a saloon in Jersey Citjq and the day of that meeting she came with him to Jersey City, from which place he was to start on his railroad run. He then promised to furnish a home and take her .and the child to live in it. F'our or five days later, upon returning from his run, he came to see her, promised to get a license and a minister, marry her and furnish a home in which the three should live. He came to see her in Brooklyn about once a week from August, 1886, to December of that year, being still employed on the railroad, and frequently promised, to marry -her by a ceremony. He told her that he had actually engaged a clergjunan but could not procure a license. Later he requested her to come to Jersey City to live with, him in a home he would provide for her and the child and told her he had arranged for a marriage ceremony to be performed at this home on December 22d, 1886. She agreed to come to be married and on that date she gave up her position in Brooklyn as a domestic servant and came to the home he had provided and furnished at 86 Greene street, Jersey City; bringing her child and personal belongings, including a wedding dress, expecting he would marry her; but he failed to keep his promise, telling her there was still trouble over a license. She felt she could not return to Brooklyn because she had given up her employment and had left that city, saying she was to be married and had brought all her belongings with her. Notwithstanding his failure to marry her by ceremony, Jackson assured her fit would be all right,’ and he gave her a wedding ring, which she still wears. They then commenced living together at the Greene street home, apparently as husband and wife, and remained there, maintaining their relation seven or eight years. Her mother (now dead) lived with them five or six years, and Jackson’s relatives and friends visited them, and to them he introduced her as his wife. From the time they commenced living together to the present time she has been known by no other name than Jackson. After moving from Greene street they lived together at various places in Jersey Gitjr, in homes he provided for her and for which he paid the rent, and he voted from those homes down to 1918. Jackson owned some race horses and frequently attended the races at Saratoga and elsewhere, and she says that except for the time he was absent at the races he spent most of his time with her and their child, eating and sleeping at home with them, down to the time of his death. He purchased the premises in question, a two-family house at 17 Ege avenue, Jersey City, in June, 1918, and shortly thereafter they moved to it and occupied the second floor, and she or her son collected the rent from the tenant of the first floor for Jackson. After coming to Jersey City in 1886 she continually requested him to have a marriage ceremony performed. He always put her off, saying fit would be all right,’ but he never actually refused.

      “Jackson was married to Catherine Hayes, a white woman, November 26th, 1893, by a priest of the Roman Catholic Church. Catherine Jackson commenced suit for divorce against Jackson October 5th, 1896, alleging adultery with the complainant Fannie Jackson. The suit was not contested and the complainant therein obtained a final decree for divorce June 7th, 1897, but Jackson continued to visit her and she says they went to a priest of her religious faith to be remarried and that the priest told them they could consider themselves still married, because her church did not recognize the divorce and they thereupon resumed living together. One child was bota to them before the divorce and two afterward. Jackson voted from her home, 376 Virginia avenue, Jersey City, in 1918 and 1919, and he died there, suddenly, May 27th, 1920.
    “Fannie learned of Jackson’s marriage to Catherine and on one occasion went to Catherine’s home after him, and, finding him there, took him to her home. She was informed that Catherine had obtained a divorce from Jackson, and thereafter, although she felt she was his wife, she still desired a ceremonial marriage and requested Jackson to marry her; but he again assured her that ‘it would be all right,’ without giving her a reason for not complying with her wish.
    “Before considering the further facts in the ease, let us see what the legal situation is. Marriage is a civil contract and no ceremonial is indispensably requisite to its creation. Voorhees v. Voorhees, 46 N. J. Eq. 411, 414; affirmed, 47 N. J. Eq. 315. Where there is no ceremonial marriage there must be an agreement entered into between the man and the woman, in words of the present tense, to live together as husband and wife. There are probably but few instances of mutual consent,, by which each party in precise or unambiguous terms takes the other as spouse; but no particular words are necessary to declare an intention to enter into a contract of marriage. If from what was said by the parties, aided by the circumstances surrounding their entering upon their relationship, it can be gathered that they proposed to enter into a contract thenceforth to live as husband and wife, it will be sufficient (Stevens v. Stevens, 56 N. J. Eq. 488; Bey v. Bey, 83 N. J. Eq. 239; Schaffer v. Schaffer, 88 N. J. Eq. 192; affirmed, 89 N. J. Eq. 549), an[d where it appears that such relationship is matrimonial, rather than illicit, cohabitation and reputation will justify the presumption that the parties came together under a mutual promise to live as husband and wife. Voorhees v. Voorhees, supra; Wallace’s Case, 49 N. J. Eq. 530; Mullaney v. Mullaney, 65 N. J. Eq. 384.

    “Certain letters alleged to have been written by Jackson to Eannie were admitted in¡ evidence. She identified them as in Jackson’s handwriting, while Catherine denied their authenticity. No other testimony was offered to prove the handwriting, but upon comparing them with Jackson’s admitted handwriting, they appear to me to be genuine and I shall so treat them. Nine of these letters, the first of which bears date October 17th, 1883, and the last January 29th, 1885,. are addressed to ‘My dear Eannie’ (or similar words) and are signed ‘Your friend (or similar words), Charlie Jackson.’ All contain words of love and affection and such expressions as ‘I mean business; if you don’t love me tell me so, and T love but you Eannie; believe me, for some day it will all come true,’ and ‘I long to see the day come that me and you may be as one,’ and ‘You said that some day you would like to be my happy little wife. Eannie, I do long to see that day come when I can call you my own,’ and ‘I do think that you would make a kind little wife,’ and ‘I shall never be contented until you are my dear little wife,’ and ‘I know you think that it is horrid to be put off so long, but it is all for the best; some' day you will not regret it,’ and ‘The days that we look forward I am in hopes that they won’t appear long to you. I am all preparation that my means will allow me to.’ On September 11th, 1885, he wrote her a brief letter: ‘Dear Eannie, If you will send me your address I send you some money. Charles Jackson.’ This letter is dated about two weeks before her child was born.

      “He had intercourse with her in December, 1884, and had left her in the spring of 1885, and she did not see him again until August, 1886. They had not lived together as husband and wife and there is no evidence that prior to her coming to Jersey City in December, 1886, he had spoken of her or introduced her as his wife. He did not address her in his letters as his wife nor sign himself as her husband. Only one envelope accompanying these letters was offered m evidence and that is addressed to ‘Mrs. Fannie Wagner/ I cannot find from the evidence that a contract of marriage in words of the present tense was entered into by the parties up to December, 1886, and their child, therefore, was born out of wedlock.
    “We come now to the time when she came to Jersey City, December 22d, 1886. We have her testimony as to what transpired between Jackson and herself on that day and during the preceding years and we have the evidence to be gathered from his letters. Several witnesses of their race were produced. Some of them had an acquaintance with Jackson and Fannie covering a period of thirty years prior to his death. One had boarded with them eight or nine years; another had worked for Jackson twenty-five years, part of the time in a saloon over which they lived, and had also boarded with them a month, and another was married from their home in 1896, and thereafter lived in the same house with them over a 'year. The other witnesses were friends who met the parties frequently. These witnesses cover the life of Jackson and Fannie from the time of their residence on Greene street to his death. They said they knew her as Jackson’s wife; that they lived together as husband and wife during that period; that he spoke of Fannie as his wife and as ‘Mrs. Jackson’ and that they knew her by no other name; that he introduced her to others as his wife; that they and others addressed her as ‘Mrs. Jackson’ in his presence; that he frequently spoke of the boy as his son and that the boy always called him ‘Pop.’ Five letters written by Jackson to Fannie when she was away from home on visits were admitted in evidence, four of them being dated on July and August, 1895, arid • the fifth in 1899. Four are addressed ‘My dear wife’ and the fifth ‘My dear Fannie,’ and all are signed ‘Your husband, Charlie Jackson.’ In these letters he writes of matters pertaining to their home, gives messages for their son and in one he says he expects her to soon return home. Six envelopes addressed in his handwriting, four postmarked 1895, to ‘Mrs. Charles Jackson,’ and two postmarked 1900, to ‘Mrs. Fannie Jackson,’ are also in evidence. Two invitations to attend weddings, one in October, 1887, and the other in January, 1896, contained in envelopes addressed ‘Mr. and Mrs. C. Jackson,’ were produced by Fannie. The person from whom he purchased the Ege avenue house, June 10th, 1918, testified that when he bought it he told her he wanted it for his wife and son. Shortly after he had taken title he moved both complainants to it. On January 14th, 1920, he executed a mortgage on this property in which ‘Charles Jackson and Fannie M. Jackson, his wife,’ rvere named as the mortgagors and Jackson then swore to an affidavit wherein he stated that Fannie was his wife. He gave the attorney who prepared the mortgage and the affidavit the facts therein contained and when he and Fannie executed the mortgage and he swore to the affidavit he introduced Fannie as his wife to the attorney and before swearing to the affidavit he stated to the attorney that he had read it.
    “After Jackson’s marriage to Catherine he apparently maintained two homes and divided his time and attentions between the two women, and to friends and acquaintances of Fannie and himself she was still known as his wife, while to friends and neighbors of Catherine and himself Catherine was known as his wife, which state of affairs existed up to the time of his death.
    “Hone of the evidence on behalf of Fannie is seriously controverted. Ho evidence was offered to show that during her life with Jackson in Jersey City she was known by any name other than ‘Mrs. Jackson,’ except that Catherine says Jackson told her that complainant’s name was Fannie Williams and that he was boarding with her. The only evidence tending to show that Jackson did not consider Fannie his wife'relates to the period after his ceremonial marriage with Catherine in 1893, and consists of the fact of that marriage; that thereafter he lived with both Fannie and Catherine; that Catherine was spoken of by him and was known to certain of their friends and neighbors as his wife; .that in June, 1911, he executed a bond and mortgage with Catherine wherein he was described as her husband; that a letter dated August 14th, 1917, addressed ‘Dear Kate5 and signed ‘C. Jackson5 was enclosed in an envelope addressed by Jackson, to ‘Mrs. Kate Jackson5 and that in 1918 Jackson accepted a deed for the Ege avenue property in which the grantee is named as ‘Charles Jackson, unmarried.5
    “It was argued that Fannie’s story could not be true; that Jackson assigned as his reason for failing to have a marriage ceremony with her that he was unable to obtain a license, because no marriage license was required in New Jersey in 1886. But while the excuse was not a valid reason he may nevertheless have offered it and her statement that he did is uneontradieted.
    “Of course, if Jackson entered into a common law marriage with Fannie in 1886, no marriage that he might thereafter contract could affect Fannie’s right. Upon considering all the evidence, I think the complainants have shown that a contract of marriage in words of the present tense was entered into between Jackson and Fannie December 22d, 1886, and the reasons for my conclusions are that in the letters Jackson wrote her prior to 1886 he stated, in effect, that his attention to her was for an honorable purpose and that he loved her and wanted her to be his wife, and sh& swears that upon' his proposal of marriage she agreed to marry him; that under promise of marriage he betrayed her and became a father; that when he returned from the west in August, 1886, and she met him, he could, had such been her disposition, have maintained illicit relations with her in Brooklyn, instead of bringing her and his child to Jersey City, where he then lived and had a business and friends; that if the only purpose of luis prior association with her had been illicit and he had accomplished that purpose, he would have repudiated her in August, 1886, after having been away from her over a year: that instead of casting her oil or attempting meretricious relations with her in Brooklyn, he agreed to do the thing it was his duty to do, when he requested her to come to Jersey City to marry him' and live with him in a home which he provided for her and their child; that she came in good faith, bringing a wedding dress; that although he then failed to enter into a ceremonial marriage with her, he did not ask her to remain as his mistress, but as his wife whom he promised to publicly acknowledge by a form of ceremony in the presence of witnesses, so soon as the alleged obstacle could be removed; that he then gave her a symbol of marriage, a wedding ring, and told her ‘it would be all right/ which can be construed to mean that if they were both willing to live together as husband and wife, without calling in a clergyman and others to witness their vows, it would be all right in law; that she was not a woman of loose morals and but one act of sexual intercourse is shown to have occurred prior to her coming to Jersey City. Is there anything in her conduct from which it can be said that after coming to Jersey City to be a wife, she remained as a kept woman? She must have been anxious that the father should acknowledge his child and make her his wife, and this desire and the dread of further disgrace can fairly be assigned as her motive for acceding to his solicitations that they live together. If she remained, she was practically assured that he would hold her out to the world as his wife. If she left, she might forever lose the opportunity of being set right before 'her friends and acquaintances and she had no home to which she could go. She merely waived her desire for a ceremonial marriage and consented to live with him under an agreement as understood by her, that from thenceforward they should be husband and wife. I think the facts demonstrate that the intent of the relationship thus established was matrimonial on both sides and that a binding contract of marriage can'be inferred from what was said and done by the parties.

      “Even if their relation was originally illicit without a contract of marriage, a change to matrimonial relations may be shown and a lawful common law marriage established. The change may be established by proof of circumstances excluding that the original relation continued and showing satisfactorily that it was changed to a matrimonial union by mutual consent. Robinson v. Robinson, 83 N. J. Eq. 150, 156; Bey v. Bey, supra; Schaffer v. Schaffer, supra.

    “It is argued that the failure of J ackson to marry Fannie on the date originally fixed in December, 1884, his desertion of her for over a year after inducing her to have intercourse with him, his continued postponement of a ceremonial marriage on the pretence that he was unable to procure a marriage license at a time when no such license was required, and his subsequent evasions of her frequent requests for a marriage ceremony, and his marriage to Catherine, all show that it was not his intention to assume the relation of husband to Fannie but rather that he was deceiving her, and that the purpose of inducing her to live with him was illicit on his part, and therefore there could have been no mutual contract of marriage in 1886. In the interest of morality and decency, I prefer to believe that by his words and acts, followed by his consent to matrimonial repute after December 22d, 1886, he meant to enter into a state of matrimony with Fannie, but if he induced her to live with him, by words and acts which amounted to a statement on his part that she was to be his wife, I do not think that she would be deprived of her matrimonial rights by any mental reservation he may have made, or by any secret intention he may have had not to be her husband, but that the law of estoppel could be invoked to prevent the imposition of so gross a fraud on her. Chamberlain v. Chamberlain, 68 N. J. Eq. 414, 423.

    “The evidence clearly shows that after December 22d, 1886, their cohabitation was connubial in character and not occasional, limited or secret; that they lived together openly as husband and wife; that he acknowledged her as his wife and his son, the complainant, as his son, both by word and in writing; that their matrimonial habit and repute was general among their friends with whom their daily lives were spent, and that their relation as husband and wife and their matrimonial repute continued even after Jackson’s marriage with Catherine. All these facts support the idea that it was their mutual intention to enter into a common law marriage contract.
    “I find therefore that on December 22d, 1886, a lawful and binding contract of marriage was entered into between Charles Jackson and the complainant Fannie M. Jackson, which was in force at his death, and that she is his lawful widow and as such is entitled to dower in his estate. I also find that the premises described in the bill of complaint were conveyed to the said Charles Jackson and that he died seized> thereof.
    “I have said that at the time of the birth of the complainant Charles Jackson, Jr., his parents had not, in my opinion, contracted marriage. Their subsequent marriage and recognition and treatment of him as their child legitimated him, and upon the death of his father, intestate, the said Charles Jackson, Jr., became entitled and seized as ■ heir-at-law to the same share of his father’s real estate as he would have received had his parents been married at the time of his birth. P. L. 1915 p. 333.”

      Mr. Herbert C. Gilson, for the respondents.

      Mr. Charles E. S. Simpson, for the appellants.
   Pee Curiam.

The decree order appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Vice-Chancellor Fielder.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, Katzenbach, White, Heppenheimer, Williams, Gardner, Ackerson, Van Buskirk—15.

For reversal—None.