author: Per Curiam.

text:
    Miles Morris, administrator, &c., appellant, v. Margaret Kettle, respondent.
    1. It is a fundamental doctrine that equity does not assist the recovery of a penalty or forfeiture, or anything in the nature of a forfeiture.
    2. Courts of equity have power to reform deeds and other instruments for the correction of mistakes, but to warrant the exercise of the power, the proof, in demonstration of mistakes, must be clear and satisfactory. The courts will not change what is written upon loose, doubtful or equivocal evidence.
    3. The proofs in this case fail to show satisfactorily a mutual mistake as to the nature or contents of the deed sought to he reformed.
    On appeal from a decree advised by Vice-Chancellor Emery, who delivered the following opinion :

      The bill in this case is filed by a lessee against a lessor to reform the description of the leased premises made in a lease under seal. The leased premises, as described in the lease, are
    “the house and premises lying- and situate in the city of Jersey City, known or designated as No. 264 Johnson avenue, and all the buildings, outhouses and premises of said place, with the appurtenances.”
    As appears by the pleadings and proofs, 264 Johnson avenue was a lot about twenty-five feet front and forty feet deep, upon which a house had been built, covering nearly or quite the whole of the lot No. 264. The lower part of the building was occupied as a store or saloon, the two upper stories for dwelling purposes. At the time of the lease Mrs. Kettle owned the lot immediately adjoining No. 264 and on the west of it, which was about twenty feet front by forty feet, and upon which there were then outhouses and buildings which were used by the occupants of the dwellings above the store in No. 264. These outhouses and buildings did not cover the whole of the west lot. Defendant also owned a smaller lot immediately adjoining No. 264 on the east, and about fifteen feet front by fifteen feet deep, and this last lot was, at the time of executing the lease, a v.aeant lot, unfenced, and, so far as appears by the evidence, not then used by any of the tenants in connection with No. 264. The complainant alleges thát he leased from the defendant the.whole tract of land and premises, consisting of the house and lot No. 264, the lot to the west containing the buildings and outhouses, and the small lot to the east, and that by an error and mistake of the scrivener who drew the lease the description of the leased premises was, as above stated,
    “ the house and premises, lying, &c., known and designated as 264 Johnson avenue, and all the buildings, outhouses and premises of said place, with the appurtenances.”
    The lease was to run for five years from February 1st, 1891, for the yearly rent of $780, payable monthly, and the complainant, who had for some time previous been the lessee of the store or saloon in No. 264, took possession under the lease of the whole of the house No. 264, and of the lot to the west with the buildings. He alleges, also, that he at once took possession of the lot to the east, but this the defendant denies. I think the evidence establishes that at some time after procuring the lease he closed up the gate leading into the lot on the west of No. 264, and thereafter the access over the lot to the east was substituted for the use of the tenants. The complainant also removed a portion of the surface of the east lot, but it does not appear that the defendant knew of this, or of the use of this lot after the lease by the defendant. The complainant himself occupied the store in No. 264 only two or three months, when he moved into a building of his own, No. 266 Johnson avenue, where he continued to carry on his saloon, renting the building No. 264 to one Mrs. McGuire, but the lease to her, if any was made, is not in evidence.
    In February, 1892, the defendant entered into possession of the small lot and put up a small building thereon, which she rented for a saloon. The complainant continued paying the monthly rent ($65) after the erection of this building, until June, 1892, when, as he says, he told her she had broken the lease and he would not pay her any more rent. At this time Mrs. McGuire was the complainant’s tenant, and she continued in possession until thirteen months or more afterwards; but the defendant did not accept Mrs. McGuire as her tenant, nor is there any evidence in the case which would justify the conclusion that there was, up to October, 1893, any surrender of the premises agreed on or carried out between the parties to the lease under the doctrine of our courts relating to surrender of leases. Hunt v. Gardner, 10 Vr. 530; Wallace v. Kennelly, 18 Vr. 242; Creveling v. De Hart, 25 Vr. 338.

    In the meantime and up to October 1st, 1893, the complainant paid no rent, and about October 1st, 1893, the defendant, as alleged in the bill, took possession of the entire premises. This allegation, not being denied or referred to by the answer, must, under the rule laid down in Sanborn v. Adair, 2 Stew. Eq. 338, 345, be considered as admitted for the purposes of this case, and it appears by her evidence that defendant is now in possession. In an action at law brought to recover the rent from September 1st, 1892, to October 1st, 1893, the defendant set up the eviction from the small lot as a defence, and in this action parol evidence was introduced without objection, to show that, by the bargain for the lease, the property to be leased was all the property owned there by the defendant. Upon a verdict for defendant herein (the landlord) being rendered for the whole rent, the supreme court, on the application of the present complainant, construed the terms of the lease, describing the leased premises, and held (Morris v. Kettle, 28 Vr. 218, 221) that, by construction, the words “buildings, outhouses and premises of said place ” would embrace the lot on the west side, but that there was nothing in the circumstances or condition of the strip on the east that would make the description in the least apply to that strip. Parol evidence was therefore held inadmissible to affect this construction of the lease by making it extend to all the property defendant owned there. This construction excluding, as matter of law upon the case as then presented, the lot on the east side of No. 264 from the lease, the lessor, by building on it, did not oust the lessee from any portion of the leased premises, and the lessee’s defence to the action for rent based on this ground failed. But, inasmuch as the parol evidence had been received without objection, and the lessee therefore had no opportunity of raising on the record the question of the correctness of this decision of the supreme court as to the admissibility of this parol evidence, a new trial was ordered to give him that opportunity. The action at law being again noticed for trial, the complainant filed this bill to reform the deed, asking, in the meantime, an injunction against the suit at law until the lease should be reformed.
    The application is based upon parol evidence of the same general character as the evidence held inadmissible by the supreme court. On the rule the supreme court also decided that an eviction from any portion of the premises leased suspended the whole rent until the tenant was restored to the whole possession, even though he still remain in possession of the remainder of the premises leased, following in this respect the decision in Hunter v. Reiley, 14 Vr. 480, and also declaring that the lease is not avoided by such eviction but the estate in the leased premises continues. This forfeiture of the whole rent was imposed by the inflexible rule of the common law, and as Chief Baron Gilbert says, “ in order that no man be encouraged to injure or disturb his tenant in his possession.” Gilb. Rents, 173. No apportionment of the rent was therefore allowed at the common law, on an eviction by the landlord, no matter what the circumstances of the eviction were, whether undér bona fide claim of right, under the lease by the lessor or otherwise, and without regard to the proportionate value of the property still retained by the tenant. On the other hand, where the eviction is by others than the lessor, and under claim of superior right, the rent is apportioned according to the respective value of the premises severed. Van Rensellaer v. Bradley, 3 Denio 144, 145.

    In the present case, if an apportionment should be made on this basis,'the proportion of the rent for the lot on the "east would be small if not nominal. The lease having been, so far as the case shows, abandoned by both parties since October 1st, 1893, when the defendant took possession of the entire premises, the only question now at issue between the parties under the lease is the one raised in the action now pending for rent due to October 1st, 1893, and the whole relief which could be given to the complainant in this case, if his claim for reformation of the lease were clear, would be that of restraining' the defendant in the action at law from setting up that the premises leased did not comprise the east lot. See Firmstone v. De Camp, 2 C. E. Gr. 317, 323, where this was the form of relief adopted in an action on a contract which was reformed. The result of granting this relief would thus be simply to relieve the complainant from paying any rent whatever under his' lease,, even for the portion which he occupied or leased to. tenants during the time he was out of possession of the small lot, and up to October 1st, 1893. '
    . The bill itself plainly puts the complainant’s ease for relief on the sole ground of aiding' this defence in the suit at law, and looking to what seems to be the sole practical result of granting this reformation of the contract, the case must be treated not simply as one involving the question of reformation of contract by a court of equity, but as raising at the outset the preliminary question whether the case does not come within the reason and application of the rule that a court of equity will not give any assistance in aid of enforcing a forfeiture. In reference to forfeitures the settled doctrine of equity is, to use the language of Chancellor Kent, in Livingston v. Tompkins, 4 Johns. Ch. 415, 431, that “ it may be laid down as a fundamental doctrine of the court that equity does not assist the recovery of a penalty or forfeiture, or anything in the nature of a forfeiture.” See, also, 1 Pom. Eq. Jur. § 459, and cases cited. The general doctrine is unquestionable, and the only question is as to its application to this ease.
    The complainant seeks an equitable relief — that of reforming the description of the premises in a lease — not for the purpose of continuing, or as connected with the continuance of the leasehold estate in the premises, now included or to be included in the lease for the bill, and the evidence shows that as long ago as October 1st, 1893, the lessor took possession of the entire premises and the term of the lease has now expired. The bill does not dispute the complainant’s acquiescence in this possession from October 1st, 1893, up to the filing of his bill, March l3th, 1895,- or make any claim that it is wrongful or against the-complainant’s will. Under these circumstances, on this bill no decree should be made reforming the lease, on the basis that the leasehold is a continuing estate, in any portion of the premises, nor was it filed in that view! It was- filed solely in aid of the defence at law, and in order to secure an amendment of the lease, which will clearly include the small lot from which he claims to have been evicted, and enable him thus to make out the defence of eviction at law, under which he may be released from the payment of any rent whatever for the remainder of the premises during the time he occupied them, or would otherwise be responsible for their rent. He is defendant in the action at' law, it is true, but he is a defendant setting up a defence which is, under the circumstances of this case, practically the enforcement of a forfeiture, and in applying to this court for its aid in reforming the lease, the substantial rather than the formal situation of the complainant should be regarded.
    The bill in this case makes no offer to pay any portion of the rent, neither does it allege any facts showing any equitable grounds for relieving complainant from the payment of rent for the premises actually occupied by him or his tenants. As compared with the residue of the premises, the small lot was but an insignificant or very small portion of the whole premises, and the evidence of the complainant shows that his objection to paying rent was not because this alleged eviction from the small lot interfered with the enjoyment of the leased premises, but because it was occupied for saloon purposes, and this injured his own business carried on on other premises owned by him. The complainant says, it is true, that his reason for taking the defendant’s property was that he might control it and prevent the location of another saloon on any portion of it, but although he now says this was his idea in leasing, there is no evidence that he said anything to defendant about those reasons, or that they formed as between the parties any basis upon which the contract of lease was made, so that there is nothing in the bill or evidence to show that the defendant was not equitably entitled to at least an apportionment of the rent. The case seems to me to be'one where this court should not, by now changing the actual -lease signed, assist the complainant in making out his defence of forfeiture of the whole rent by eviction. The rent for the portion occupied by the complainant or his tenants during the time sued for appears to be equitably due to the defendant, and this court, therefore, in the absence of any offer in the bill to pay this amount (1) and in the absence of any allegations or proofs relieving him from this equitable obligation, will leave complainant to his legal remedies and defences; (2) if this application of the principle relating to forfeitures and penalties should be erroneous and the case be considered on the merits, the complainant’s case is still not such as to entitle him to a reformation of the lease.

      The evidence of the complainant and of the scrivener tends to show that the words “ and premises ” were inserted in the deed after the word “ outhouses ” at the instance of complainant, and after consultation between him and the scrivener, and that these words were selected because they both then thought, as they now say,- that these words would include all the property there of the defendant. The defendant was an ignorant woman, unable either to read or write, and had nothing to do with the selection of the phrase, nor does it appear clearly that she was consulted about it. There is no question upon complainant’s own evidence that the real mistake sought to be relieved against is not that the lease as drawn did not contain in this particular the precise agreement which the parties intended it should contain for the purpose of carrying out their alleged previous parol agreement, but that the expression or phrase in the written contract intentionally adopted for the purpose of carrying this alleged previous intention did not do so. Such a mistake would seem to be a clear mistake of law as to the construction of a written contract, and therefore to come within the class of cases which the court of equity does not generally relieve against. Chancellor Kent, in Gillespie v. Moon, 2 Johns. Ch. 585, 596, thus limits the jurisdiction in equity: “ It has been the constant language of the courts of equity that parties can have relief on a contract founded in mistake as well as in fraud. The rule in the courts of law is that the written instrument does, in contemplation of law, contain the true agreement of the parties, and that the writing furnishes better evidence of the sense of the-parties than any that can be supplied by parol. But equity has a broader jurisdiction, and will open the written contract to let in an equity arising from facts perfectly distinct from the sense- and construction of the instrument itself. ‘ It must be an essential ingredient,’ says Lord Thurlow (1 Bro. Ch. C. 350), ‘ to-any relief under this head, that it should be an accident perfectly distinct from the sense of the instrument;”’ I have not been referred by counsel to any case in our courts or elsewhere in which such mistake in law, in reference to the sense or construction of the written agreement as is here alleged, has been corrected by parol evidence of the previous intention of the parties. To reform a contract in this respect is clearly to make a new written contract, and to do this in the present case would seem fo extend the jurisdiction for reformation to any case in which the sense or construction of the contract is disputed by parol evidence of the construction the parties intend to put on the contract. This would clearly be the effect unless a mistake in law as to the description of the premises conveyed is to be considered as an exception to the general rule above stated.
    Upon the question of the admissibility of parol evidence to give the complainant an interest in the lands not covered by the written lease, it must be further observed that such evidence is expressly excluded by the statute for the prevention of fraud and perjuries. Rev. p. 444. Fraud on the part of defendant, or some other equitable ground, must be alleged and clearly proved in order to bring the case within any of the exceptions to the statute recognized by courts of equity. No such equitable grounds are shown here, and the case seems therefore to come within the rule laid down in the court of errors and appeals, in Conover v. Wardell, 7 C. E. Gr. 492, that parol evidence of the intention of the parties is inadmissible. This was a case in equity, on a bill filed to correct a deed for an alleged mistake in the construction put on the terms used to describe the lands conveyed (see p. 499). But, without disposing of this case upon either of the above objections relating to the admission of parol evidence to correct a mistake of the character here alleged, and on the basis of admitting the parol evidence relating to the alleged mistake, I am satisfied relief must be denied because the fact of mistake by both parties has not been made out so clearly and conclusively as is required by our courts on application to correct written instruments. That a high grade of evidence is required is recognized in all our decisions upon the subject; and, as was said by Vice-Chancellor Van Fleet, the courts will not change what is written upon loose, doubtful or equivocal evidence. Hendrickson v. Wallace, 4 Stew. Eq. 607.

    The words “ and premises,” as used, have a clear application to the west lot upon which the buildings and outhouses were situate, and this west lot, or the whole of it, might not have passed merely by the words “ buildings ” or “ outhouses,” so that the addition of these words would be appropriate, if nothing more than the west lot was in contemplation. But whether they were intended by the defendant at least, to include the east lot also, would depend largely, as it seems to me, on the question whether this east lot was at the time expressly called to her attention during the negotiation. It appears from the testimony of all the witnesses, including complainant, that the east lot was not expressly mentioned and the complainant’s claim that it was included is based only on his statement that the defendant agreed to lease him all her property. But as the complainant was, at the time of the negotiations, occupying a portion of the house No. 264, the leasing of the whole place or property or even of all defendant’s property might well, in the negotiation, be understood by the defendant to refer to the whole of. No. 264, which was used with it, which would include the west lot but not the east. And inasmuch as the east lot was not then used with No. 264 and the lot on the west, the defendant ought not to be compelled by the court of equity now to include it in the lease (if it was not in fact included), except upon clear proof that the leasing of this lot was specially brought to her attention and was in her mind, as well as that of- the complainant, at the time of the execution of the lease. The mere proof of general expressions during the negotiations as to leasing all her property, or all her property there, is not, under the circumstances of this ease, and in view of the defendant’s denials under oath in her answer, sufficient basis for changing this written lease so as to include any property not within the description.
    I will advise a decree dismissing the bill, with costs.

      Mr. James J. Murphy, for the appellant.

      Mr. Marshal Van Winkle, for the respondent.
   Per Curiam.

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

For affirmance — Depue, Dixon, Garrison, Gummere, Lippincott, Magie, Van Syckel, Barkalow, Bogert, Dayton, Hendrickson, Krueger, Nixon — 13.

For reversal — None.


source: Caselaw Access Project

license: Public Domain

text:
    Paulina Raphael et al., appellants, v. Magdalena Zehner, respondent.
    [Filed October 15th, 1898.]
    A court of equity will set aside a sheriff’s sale on proper terms, even if there has been no fraud, where there is gross inadequacy of price, and the party, by reason of mistake or misapprehension, did not attend the sale or protect her interests at the sale, and the sacrifice was caused by such mistake or misapprehension.
    On appeal from a decree advised by Vice-Chancellor Emery, who delivered the following opinion :
    Upon the consideration of the pleadings and proofs in this case, I reach the conclusion that the proceedings on the judgment in ejectment must be enjoined, and the sheriff’s deed to the defendant Paulina Baphael be set aside, upon proper equitable terms. These terms will be that the complainant, within forty days from the entry of decree, pay to the defendant the amount paid by her at the sheriff’s sale for the deed, with interest, and also the entire amount due on the mortgage given by complainant to Paulina Baphael, and which mortgage was subject to the judgment. I will also hear counsel for defendants, if he desires, as to whether payment on the overdue interest on the Gugenham mortgage assigned to defendants shall be included as part of the terms, and as to whether the defendants’ costs in the ejectment suit should also be paid by complainant as part of the terms.

      The ground upon which I reach this conclusion, stated generally, is that I think the entire evidence in the case sufficiently establishes that there was a gross inadequacy of price at the sale, and that, by reason of mistake or misapprehension, the complainant did not attend the sale or protect her interests at the sale, and that the sacrifice of the property was the result of this mistake or misapprehension. The case is within reach of equitable relief upon the principles declared by Chancellor Zabriskie in Kloepping v. Stellmacher, 6 C. E. Gr. 328, 330. While I do not think that, in view of the evidence produced by defendant, the complainant has established that her husband did not know that a judgment had been entered against his wife, yet I think it is entirely clear, from the evidence, that the sale on the judgment and transfer of her property under it was an entire surprise to complainant. The dealings of the judgment creditor with her husband, and the delays and accommodation given to him, had been such as fairly to entitle complainant to notice from this judgment creditor that the sale would be made under execution,' if he intended to take that step for the satisfaction of the judgment. Failure by the judgment creditor himself to give such notice under the circumstances of this case, and after his leniency, had, to some extent, if not altogether, lulled any apprehension that extreme measures would be taken, without notification, left the creditor subject to an application to set aside the sale, if, in fact, the debtor did not appear and was surprised thereby. It also appears, I think, that the judgment creditor’s failure to give this notice to the debtor was due to the arrangement he had made with the defendant that sale under the judgment should be made on the terms that defendant would bid enough to pay the judgment.
    The notice of the sale proved to have been given by defendant to the husband of complainant by the reading of defendant’s attorney’s letter was not such a notice as prevents complainant’s relief against the sale, if she was in fact surprised. The evidence is that the husband never told his wife about the letter, so that, in fact, she received no notice and knew nothing of the sale, and as I look at the evidence, the notice itself as given was, under the situation of the parties as then understood by Mr. Zehner, rather calculated to throw the latter off his guard about the sale than to warn him. Raphael notified Zehner as if the Breidt company were urging the sale, concealing altogether the fact that the sale was made on his (Raphael’s) urging, and that Raphael had an arrangement with the Breidt company. As given to Zehner, the latter would have been justified in supposing that no one but the Breidt company and himself were interested about the judgment, and his answer, according to Raphael, “that this was his [Zehner’s] business,” shows that Zehner did not suppose or even suspect that Raphael was behind the proceedings for sale. The notice given under the above circumstances was not such as to deprive the complainant of relief against surprise and non-attendance at the sale, even if her husband had told her. But the evidence is that he did not tell her. His failure may have resulted from his intoxication at the time of the notice, as Raphael says, and even if he was sober and failed to' tell his wife about it, his failure, joined with actual surprise and inadequacy of price, is sufficient basis for relief.

      Mr. Adrian Riker, for the appellants.

      Mr. Frederick C. Marsh, for the respondent.
   Per Curiam.

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

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

For reversal — None.


text:
    Michael Herron, appellant, v. Thomas Mullen, respondent.
    1. Courts of equity have power to reform deeds for the correction of mistakes, but to warrant reformation there must be a mutual mistake — that is, a mistake shared in by both parties.
    2. Green v. Stone, 9 Dick. Ch. Rep. 387, followed.
    On appeal from a decree advised by Vice-Chancellor Stevens, who delivered the following opinion :
    On August 23d, 1894, the complainant, Mullen, executed to the defendant, Herron, a deed for land in Trenton for the consideration of $4,000. The deed declared that the premises were conveyed subject to two mortgages, the first for $1,600 and the second for $2,000, which mortgages, it was stipulated, “theparty of the second part hereby agrees ” to assume and pay, together with all interest now due thereon, “ as part of the consideration for this conveyance.” On June 10th, 1895, the grantee, Herron, sold the property to one Phillips, but in this deed there was no clause of assumption.
    Shortly after a foreclosure suit was instituted by the first mortgagee on the $1,600 mortgage, the second mortgagee being made a party, and on a decree of sale therein the property was sold to a stranger for $1,000.
    Mullen now brings this suit against Herron to compel him to perform his agreement of assumption and joins the first and second mortgagees as parties. Herron defends on the ground that the assumption claim was inserted by mistake.

      Marsh v. Pike, 10 Paige 595, and Cubberly v. Yager, 15 Stew. Eq. 289, are precedents justifying the form.of action. The only question is whether the defendant is bound. On the authority of Green v. Stone, 9 Dick. Ch. Rep. 387, I think he is and that the complainant is clearly entitled to the relief he prays. There is not the least evidence that the mistake was mutual, consequently there can be no reformation. The weight of the evidence is that even if Herron did not know that the deed contained the clause of assumption when he accepted it (and it is not clear on the evidence that he did not), he knew of it before he conveyed to Phillips. He is not entitled to the remedy of rescission because he has incapacitated himself from returning the property.

      Mr. Clarence Atkinson, for the appellant.

      Mr. Aaron V. Dawes, for the respondent.
   Per Curiam.

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

For affirmance — Collins, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Adams, Bogert, Hendrickson, Krueger, Nixon, Vredenburgh — 14.

For reversal — None.


text:
    Elizabeth Ashhurst, appellant, v. J. Dundas Lippincott, executor, respondent.
    1. In a suit instituted, by Alice Lippincott (and others), in which her husband was also a party complainant, for an accounting and the settlement of the estate of Thomas F. Potter, and its division into four equal shares under his will for the benefit of the testator’s surviving children, the final decree (made June 6th, 1877) provided, in respect to the fund in question, as follows: "and that said trustee do further set aside and retain as trustee under said will, for Alice Lippincott, another daughter of said testator, the following cash and securities,” &c. Such division included the share of the estate which had been given absolutely to one of the children (James) under the will of his father, but which had not been accounted for. The accounting and division of the estate were based upon the assumption that James died in the lifetime of his father. Subsequently, and in these proceedings, it was admitted that he died two years after the death of his father, therefore the share of James belonged absolutely to all his surviving brothers and sisters equally. — Held, that Alice Lippincott was not estopped by said decree, so far as the parties to that suit were concerned, from showing, in an action against the remainder-men of this share, that a portion of the one-fourth paid over in trust for her under her father’s will, was, in fact, her absolute property as next of kin of her brother.
    2. Estoppels by decree against asserting admitted rights should appear clearly.
    On appeal from a decree advised by Vice-Chancellor Emery, who delivered the following opinion :
    At the hearing of the cause the questions raised by the'answer to the cross-bill were disposed of orally, except the main question as to the effect on Mr. Lippincott’s rights of the decree made in this court on June 6th, 1877, in the suit to which Mr. Lippincott was a party complainant as the husband of Alice Lippincott, formerly Alice Potter, who was also a complainant. I have examined the record in this cause, and considered it with the aid of the very full briefs of counsel, and reach the conclusion that the decree in question cannot be held to be a bar to the right now set up by the defendant in his cross-bill. The reasons, shortly stated, are as follows: The object of that suit, as appears by the bill, was to obtain an accounting and the settlement of the estate of Thomas P. Potter, and its division (after providing for his widow) into four equal shares under his will for the benefit of Thomas F. Potter’s surviving children who were living at the time of filing the bill. Such division, of course, included the share of the estate still in the administrator’s hands which had been given to James under the will of his father, but which had not been paid over or accounted for. The share of James belonged absolutely to all the surviving brothers and sisters equally in case James survived his father; in case he did not, then the shares of the two daughters therein were, as part of their father’s residuary estate, to be held in trust for their respective lives with remainder over, as directed by the will. But, so far as related to the settlement and distribution of the entire estate in the hands of Thomas F. Potter’s executor (including James’ undivided estate), this was fully accomplished, as between the parties complainant and defendant in that suit, by the division of this entire estate, in the first instance, into four shares between the surviving children, after providing for the widow. The question as to the rights of the daughters who held the income for life, and those entitled in remainder after their deaths in the one-fourth which Was set aside for their respective trustees, or any portion thereof, could not in that suit have been finally decided against the remaindermen. Until the death of Mrs. Lippineott it was uncertain who would be entitled to any of the principal of the fund, and final decision upon the question of the right of any portion of the principal would not have been within the jurisdiction of the court, it seems to me, until, the question of their rights had actually arisen for determination after the death of the life tenant,'and in a suit to which the remaindermen were parties in that capacity and upon issues distinctly' raised between the parties claiming to be entitled. Mrs. Lippineott, being undoubtedly entitled to.the interest upon all of the one-fourth share (subject to the widow’s right), the question as.to whether she was entitled to any portion of this one-fourth as succeeding to the property of her brother James, or whether it was all the estate of her father, was not necessary to be then determined on the accounting between the parties to that suit, in order to make a division of the estate in the hands of defendant administrator between the legatees of Thomas F. Potter, and to pay over to trustees the funds of the Lippineott and Ashhurst trusts.
    So far as this distribution was concerned, the administrator of Thomas F. Potter’s executor was discharged by the payment of the one-fourth of the entire estate to the trustees who held for Mrs. Lippincott as directed by the decree, and no further adjudication was necessary or required in order to protect them, nor was any decree either necessary to be made or in fact made as to the disposition of the principal. And inasmuch as the entire object of that suit, so far as the accounting defendants and Mrs. Lippincott were concerned, was accomplished by the payment of or accounting for one-fourth of the entire estate in the accountant’s hands, including James’ property (subject to provision for the widow), and as Mrs. Lippincott was certainly entitled to the income of this entire one-fourth, the direction of payment to a trustee of this one-fourth ended the litigation between the accounting defendants and Mrs. Lippincott. . But so far as these accounting defendants and the parties to the suit were concerned, it seems to me that this direction for payment of the whole principal of the one-fourth to trustees for Mrs. Lippincott under her father’s will, should not be held to estop her, or those claiming under her, from afterwards showing in an action against the remaindermen of this share so paid over, and who were not and could not have been parties to the original suit in that capacity, that k portion of this one-fourth paid over in trust for her under her father’s will was in fact her absolute property under that will. To hold that the decree in that cause had this collateral effect in favor of the remaindermen, would, as the facts now appear, compel her, out of her own property, to increase the Thomas F. Potter’s residuary estate. By the pleadings in this cause it appears, and it is now admitted by the parties, that James F. Potter, the brother, died in 1855, two years after the death of his father. Consequently, the adjudication that James died before the death of his father, if it was in fact made in the former cause, was based on an admitted mistake of fact, and any adjudication as to payments for Mrs. Lippincott’s benefit founded thereon detracted from her real rights on the facts as they now appear. But, so far as the accountants then directed to make payments to trustees for her were concerned, this detraction from her rights was of no importance and to them made no difference, and in view of this actual status of the final decree for payment and its effect and purpose, the decree for payment to a trustee should not, in my judgment, be held to operate as such a, final settlement between Mrs. Lippincott and the remaindermen of her share of the residuary estate, as to prevent those claiming under her from showing that the estate paid over to the trustee included in fact property to which she was absolutely entitled as next of .kin of her brother, one of the legatees under her father’s will, and was under that will held in trust for her as such next of kin. Treating, therefore, the decree in the former cause as in fact adjudicating that James F. Potter died during the lifetime of his father, I do not think it is to be taken as conclusive for the purposes of this suit, and as between the present parties. In the present suit and on the cross-bill the issue is direct as to the extent to which this Alice Lippincott trust fund paid over under the former decree was principal belonging to the Thomas F. Potter residuary estate of which Mrs. Lippincott had the income, and to what extent it was Mrs. Lippincott’s absolute estate, as succeeding to her brother, James Potter, and his interests under the will. This issue now arises directly by reason of Mrs. Lippincott’s death; the parties claiming undér her absolutely and under her father’s will as remaindermen, are now before the court for the decision of this question for the first time, and the decision’ must be made between these parties, and on this direct issue, according to their real rights as they exist upon the facts which now appear. It is admitted by the pleadings in this case that the brother, James, in fact died in 1855, two years after his father, and by reason thereof Mrs. Lippincott was therefore entitled absolutely to one-fourth of his estate in the hands of his father’s executors or their representatives, and to so much of the principal of the fund paid over to the trustee for the benefit of Alice Lippincott as may be found to consist of this one-fourth.
    In reference to the right of the present complainant, Mrs. Ashhurst, who was a co-complainant with Mrs. Lippincott, now to set up in her favor the finality, for the purposes of the present suit, the supposed adjudication in the former suit that James Potter died in his father lifetime, or of a decree based on such adjudication, it must be further noticed that in her present bill she expressly alleges that James survived his father, and that this is admitted by the answer, cross-bill and again by the complainant in her replication. So that it would seem that the benefit of any estoppel in reference to this point, so far as any direct adjudication as to the time of James’ death is relied on, is waived by the record in this suit, and complainant’s rights by estoppel, arising under the former decree, must therefore depend wholly upon the adjudication made in the final decree as to the fund now in question. This decree as to the fund now in question was as follows: “And that said trustee do further set aside and retain as trustee under said will for Alice Lippincott, another daughter of said testator, the following cash and securities, viz.,” &c. It is claimed that this was an adjudication that this entire fund so directed to be set aside belonged to the residuary estate of Thomas Potter. But this is not clear, for this decree makes no express characterization of this fund except that it is held in trust under said will for Alice Lippincott, and even if any portion of this sum set apart in fact belonged to her as next of kin of her brother, James, this portion would, when paid over to’ the trustee, as directed by the decree, be still held in trust for her under her father’s will. The decree failed to adjudicate distinctly and in terms the character of the trust or that it was in trust to pay the income only, so that this decree for payment to the trustee of the fund in question does not seem, in point of fact, to bear the construction that no trust other than that to pay the income to her would afterwards be shown. The funds of the entire estate of Thomas F. Potter, which originally came from and which were held by the accounting defendants at the time of filing the bill, could be accurately and legally described as funds held in trust under his will, for all the parties entitled thereto, whether to principal or income, and the direction of the payment of the fund in question to a trustee as trustee under said will for Alice Lippincott, without further directions expressly specifying the trust, may fairly be said, I think, to leave it open to Mrs. Lippincott (or those succeeding to her rights), on the face of the decree to show that, under her father’s will and in virtue of the facts as they exist applicable to the division of his estate under this will, a portion of the fund is, under the will, held by the trustee in trust to pay over to her absolutely as her share of the estate in the trustee’s hands, which her brother, James, was entitled to under this will. Estoppels by decree against asserting admitted rights should appear clearly. This construction of the decree would seem to be exactly in line with the prayer of the original bill, which prayed only an accounting and settlement of the estate of Thomas F. Potter, and the only question is whether, in view of the subsequent orders and proceedings in the cause, the object of the suit was not extended to the declaration and settlement of the entire interest of Alice Lippincott in the entire estate in the hands of the accountants. I think the decree does not make such declaration, but even if the terms of the final decree, as actually made, should, in the light of these subsequent orders and proceedings, be construed as declaring and settling that the only trust for Alice Lippincott on which the funds were held was a trust to pay her the interest during her life, and that on her death the entire principal fund was then divisible among her surviving brothers and sister, yet, for the reasons above given, I do not think the decree should be taken as finally settling that question between the present parties. And inasmuch as there has never been any final division of this residuary fund, known as the Alice Lippincott trust, or decree as to the parties entitled to it on her death, and it is still under the control of this court, I think there is no obstacle to the disposition of the principal of the fund as between the executor of the life tenant, Mrs. Lippincott, and the remaindermen according to their actual rights therein on the facts as now admitted. Such division, according to the real rights and equities, should, in my opinion, be made unless it is entirely clear that in the former suit the rights now in controversy were, as between the life tenant and the remaindermen, issues to be adjudged and were in fact conclusively settled by the former decree. Decree will be advised in favor of the defendant, Lippincott, upon his cross-bill. If counsel differ as to the amount in the trust fund which should be held to belong to the James Potter estate, the differences can probably be settled by me without reference, and I will hear counsel further on this point, if necessary.

      Mr. William M. Lanning, for the appellant.

      Mr. Garret D. W. Vroom and Mr. Edwin Robert Walker, for the respondent.
   Per Curiam.

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

For affirmance — Collins, Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Adams, Bogert, Hendrickson, Krueger, Nixon, Vredenburgh — 14.

For reversal — None.


text:
    John R. Miller et al., and John P. Stockton, appellants, v. The American Tobacco Company, respondent.
    On appeal from a decree advised by Vice-Chancellor Reed, whose opinion is reported in Attorney-General et al. v. American Tobacco Co., 10 Dick. Ch. Rep. 352.

      Mr. Thomas N. McCarter, and Mr. Thomas N. McCarter, Jr., for the appellants.

      Mr. Richard V. Lindabury, and Mr. W. W. Fuller (of New York), for the respondent.
   Per Curiam.

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

For affirmance — Depue, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Hendrickson, Krueger, Nixon, Vredenburgh — 11.

For reversal — None.


text:
    James Craig, executor of John A. Young, deceased, appellant, v. Waters B. Parret, administrator of Catherine Craig, respondent.
    On appeal from a decree advised by Vice-Chancellor Stevens, whose opinion is reported in Parret v. Craig, 11 Dick. Ch. Rep. 280.

      Mr. Earle Insley, for the appellant.

      Mr. Charles H. Hartshorne, for the respondent.
   Per Curiam.

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

For affirmance — Collins, Garrison, Lippincott, Ludlow, Van Syckel, Adams, Bogert, Hendrickson, Nixon, Vredenburgh — 10.

For reversal — Dixon—1.


text:
    Catherine McCormick, appellant, v. Henry Hickey et al., respondents.
    The practice as to the enforcement of a final decree, in case stated, defined.
    On appeal from an order advised by Vice-Chancellor Grey, who delivered the following opinion : This is a petition filed by Henry Hickey and others, complainants, against Catherine McCormick, defendant, praying an order requiring the defendant to make conveyance of land to the petitioners, in accordance with the final decree which has been already made. This decree was made on the 23d day of [November, 1897, in favor of the complainants, and it directed that if the complainants should, within thirty days from the date thereof, pay or tender to the defendant, Catherine McCormick, $3,242.07, with interest from May 22d, 1897, then the defendant should convey to the complainants the lands and premises in the bill described. The decree contains a further direction that unless the complainants should pay or tender as aforesaid within thirty days from the date of the decree, their bill should be dismissed, &c.
    The petitioners, who are the complainants in this suit, now ask for an order to compel the defendant to perform the decree by making conveyance, professing themselves ready to pay the necessary money to the defendant, and that they were prevented from making any tender by the refusal of the defendant, within the period of thirty days after the decree was made, to accept the moneys, because she claimed that the time had gone by when, by the decree, she was required to make a conveyance, and also because her counsel was absent, and she was unwilling to make any arrangement without his presence.
    On the hearing of the petition the defendant gives notice of and makes a motion to dismiss the bill for want of performance of the terms of the decree.
    The testimony on the part of the complainant and petitioners, shows that they had taken steps to raise the necessary funds to satisfy the complainants, and were preparing on the 23d of December, 1897, to complete them and tender her the money. They had made known to her the existence of these circumstances. This took place in the office of the solicitor of the complainants, and is proved by his affidavit. He further says that she refused to accept the money and refused to make any conveyance pursuant to the decree of the court. By her own testimony 'she admits that she was present on the day named in the office of the complainants’ solicitor, and. that she was informed that the complainants or their representatives were talking of meeting there that day to arrange for a settlement, but she says that nothing was said to her about complying with the decree, and no tender of money was made to her. It further appears, however, by her own testimony, that she told the solicitor for the complainants that the time had gone by when, by order of the court, she was required to make a conveyance, and that she would make no arrangement concerning the premises in the absence of her counsel, who at that time was in Washington.
    . The terms of the decree obliged the complainants to pay or tender the money within thirty days from the 23d day of November, 1897. In computing the time within which a rule or order of this character is to be complied with, the day of the date of the order or decree is to be excluded. Thorne v. Mosher, 5 C. E. Gr. 261; Serrell v. Rothstein, 4 Dick. Ch. Rep. 384, 387; In re probate will of Edward Evans, 2 Stew. Eq. 574; McCulloch v. Hopper, 18 Vr. 189. The words of the decree as expressed would themselves carry this meaning. They require the act to be done “ within thirty days from the date of the decree.” To give these words the meaning claimed for them by the defendant, it must be held that the first day expired on the day of the making of the decree, whereas a fair and reasonable construction of the language would be that the first day expired not on the day in which the decree was made, but on the following day, and so the whole period was completed, computing the next day after the date of the decree as the first, by counting the remainder of the thirty days. This would make the time expire, according to the terms of the decree, on the expiration of December 23d, 1897, including that day as the last of the thirty days fixed by the decree. On that day, when the matter was called to the attention of the defendant (however she may deny the actual tender,- or a declaration of a purpose to pay the money then made to her), it is quite apparent that it was disclosed to her by the solicitor of the complainants that the parties were preparing for a payment to be made that day to her, and that on receiving that information, she declared to the solicitor of the complainants that she would make no arrangement for a settlement in the absence of her .counsel, and further declared that in her. view the time within which a payment •could be made under the decree had expired.
    Under these circumstances, what would it have availed the complainants in an effort to perform the decree had they actually shown her the money required by the decree to be paid. Her counsel was absent and she declared she would make no settlement ; by her contention, the period of time within which she was required to accept the payment had already expired, and her declarations to the solicitor of the complainants, under these circumstances, in my view, relieved them from any obligation to make to her an actual tender of the money.
    The defendant contends that the bill in this case is in the nature of a bill to redeem, and that the time allowed to redeem, once fixed, will not afterwards be enlarged, and I am referred to the case of Perine v. Dunn, 4 Johns. Ch. 140. In the view I take of the circumstances in the case before me, the relief sought by the petitioners is not an enlargement of the time within which they may redeem. The defendant herself, by her own actions and declarations, prevented the performance on the part of the complainants, within the time prescribed by the decree, and the giving of a further day within which the performance may be tendered on the part of the complainants, and may be required from the defendant, is not an extension of favor to the complainants, but the fixing of a day certain by which the defendant shall be required to perform the decree, she having, by her own act, prevented performance upon the last day given by the final decree.
    For these reasons I do not think the complainants’ bill should be dismissed, as moved by the defendant.
    The defendant appears to have been an ignorant woman, acting hastily in the absence of her counsel, and I think a further opportunity should be given to her to comply with the terms of the decree under such circumstances that she should be absolutely secure in the receipt of the moneys adjudged to be due to her.
    I will advise an order that if the complainants shall, within ten days from the date of the order, pay the amounts directed to-be paid by them in the final decree into the hands of Thomas E. French, a special master of this court, the defendant shall,, within ten days after the notification of such payment and of this order given to her or to her solicitor, execute to the complainants the conveyance directed by the final decree in this cause and deliver the same to the said master, receiving therefor the moneys so as aforesaid deposited with him by said .complainants; and that if the complainants fail to make payment as aforesaid, the bill shall be dismissed as directed by the said final decree; and if the defendant fails to make conveyance as re-quired by the order, the complainants shall be at liberty to apply' to this court for further relief.

      Mr. John F. Harned, for the appellant.

      Mr. David J. Pancoast, for the respondents.
   Per Curiam.

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

For affirmance — Collins, Dixon, Garrison, Gummere, Lippincott, Ludlow, Van Syckel, Adams, Hendrickson, Nixon, Vredenburgh — 11.

For reversal — None.


text:
    Joseph Kaighn, appellant, v. William M. Burgin, trustee, respondent.
    On appeal from a decree advised by Vice-Chancellor Grey, whose opinion is reported in Burgin v. Rutherford, 11 Dick. Ch. Rep. 666.

      Mr. Samuel H. Richards, for the appellant.

      Mr. Martin V. Bergen, for the respondent.
   Per Curiam.

Decree affirmed, for the reason given in the court of chancery .as to the jurisdiction of the court over the case and the right of the mortgagee to redeem the interest of the appellant in the property acquired under a tax sale under the Martin act, and reversed as to costs, which were adjudged against the appellant in the court of chancery.

For concurrence — Depue, Lippincott, Ludlow, Van Syckel, Hendrickson, Nixon, Vredenburgh — 7.

Far non-concurrence — Collins, Dixon, Adams, Bogert — 4.


author: The Chancellor.

text:
    Alexander T. McGill, Chancellor.
    Henry C. Pitney, John R. Emery, Alfred Reed, Frederic W. Stevens and Martin P. Grey, Vice-Chancellors.
    Sarah F. Skillman v. William J. Smatheurst and Jane, his wife.
    [Filed July 19th, 1898.]
    Under the circumstances of the case considered, a covenant between vendor and vendee that there shall not be erected upon land sold and purchased “any building other than for the use or purpose of a private dwelling,’’ is broken by the erection of a flat-house adapted for the separate residences of three several families.

      Oil motion to strike out a portion of a bill to enforce the observance of a covenant, under rule 213, in lieu of demurrer.

      Mr. Allan L. McDermott, for the motion.

      Mr. William A. Lewis, contra.

   The Chancellor.

The allegation of the bill is that, on the 13th of April, 1895, Charles E. Stiger, being the owner of a plot of land in the city of Jersey City, made up of four city lots, numbered 32, 34, 36 and 38, in block A, on a map described, agreed to sell two of these lots, 32 and 34, to the complainant, and thereupon, for valuable consideration, covenanted with her in writing, under seal and duly acknowledged and recorded, first reciting therein that the complainant has been induced to purchase the two lots, 32 and 34, through an understanding with Stiger that he would sell the balance of the four lots, to wit, lots 36 and 38, subject to restrictions as to the class of improvements to be placed thereon and as to the front line of the buildings, in this language:

“ Thai the vacant property fronting on the southerly side of Brinkerhoff street, known as lots numbers 36 and 38, by me owned, shall not be sold for any other purpose than of a private dwelling or private dwellings, and that in improving said land and in erecting said dwelling or dwellings, the front line of the building or buildings shall be kept back on a line uniform with the building now erected on lots Nos. 32 and 34, next adjoining on the west. And it is provided and agreed that in making conveyance of said lots 36 and 38, or either of them, the said restrictions as to building and improvements shall be fully incorporated in the deed or deeds which may be given therefor."

That on the 16th day of January, 1896, Stiger and wife, by their deed, conveyed lot number 36 to one Jackson, in which deed Jackson covenanted for himself, his heirs and assigns, that he would not thereafter erect any building upon the land conveyed to him the front line of w'hich should project any nearer to the line of Brinkerhoff street than the front line of the building then erected upon said lot No. 32 next adjoining, and that the building to be erected upon said land should be used for private residence purposes only, which said deed to Jackson was duly recorded on the 18th of January, 1896; also that, after-wards, Jackson erected upon the land so purchased a private dwelling-house within the terms of the covenant upon his part, contained in the deed to him, that on the 9th day of April, 1896, Stiger and wife conveyed lot 38 to the defendants,

“subject [using the language of the bill] to the restrictions that there should not be erected upon the premises therein described any building other than for the use or purpose of a private dwelling, or any building the front line whereof should extend nearer to the southerly side or line of Brinkerhoff street than the present front line of the house erected on the premises next adjoining westerly thereto.”

That the defendants are erecting or causing to be erected a building on lot 38, which the complainant is informed and believes is to be a three-story frame flat-house, with five rooms on a floor, suitable for three families, and that it will not be a private dwelling within the terms of the restrictions above stated in the deed to Smatheurst and wife and in the agreement between the complainant and Stiger, and that it will be erected nearer the street than the restriction permits, also that the building referred to in the covenant as erected upon the complainant’s lots, at the time of the conveyance thereof by Stiger, was and yet is a dwelling-house.

The object of the bill is not only to restrain the defendants from erecting their building as near the street as they propose, but also to restrain them from building on their lot a flat-house of the character indicated.

The present motion challenges the complainant’s right to relief against the erection of the flat-house upon lot 38, upon the ground that such an erection is not a breach of the agreement with Stiger.

The argument has assumed the fact charged to be that the purpose of the defendants is to erect a three-story frame flat-house, with five rooms on a floor, suitable for three families, although the fact charged really- is that the Complainant has been so informed and so believes. It is obvious that the fact material to the relief sought is not the complainant’s information and belief, but the fact assumed to be charged. It is the fact and not information and belief of a complainant as to the fact, that induces judicial action. But as the bill may be amended in this respect, so as to charge the fact, the defendants have proceeded upon the assumption above stated, in order to raise and have at once determined the single question whether the flat-house instanced is a private dwelling within the meaning of the covenant between Stiger and the complainant and the restriction contained in the deed from Stiger to the defendant ensuing in consequence thereof.

In ascertaining the meaning to be given to the language of the instruments considered, we may look not only at the instruments themselves, but also the situation of the parties under circumstances existing when the instruments were made.

The complainant proposed to purchase two lots upon which, a dwelling-house was then erected a satisfactory distance back from Brinkerhoff street.' The owner of the lots was also the owner of two vacant lots adjoining the property she proposed to-buy. It was evidently his purpose to sell them. In view of this purpose upon his part, coupled with the fact that the lots-were in a city, where they could be put to a variety of uses, and vacant, she stipulated that they should not be sold for any other-purpose than a private dwelling-house or private dwellings, which should be erected back from the street on a line uniform with the front of the dwelling then erected upon the lots she would purchase from him. It is manifest that her purpose was to preserve the privacy and residential character of the property. The two outlying lots were disposed of by Stiger — one to Jackson for private residential purposes, to which he duly devoted it, and the other to the defendants, restricted so that they should not erect upon it a building for other use or purpose than a private dwelling.

Not only does the term a private dwelling,” by force of the word “ dwelling,” restrict the character of building by eliminating all buildings for business purposes, such as stores, livery stables, factories and the like, but it also, by force of the word “ private,” excludes buildings for residential purposes of public character, such as hotels or general public boarding or community houses.

At the argument, counsel for the defendants characterized a flat as a number of private dwellings built one upon another. If this be a true definition, such a building is objectionable to the restriction, because but a single private dwelling is contemplated, not a bunch of private dwellings. The restriction is to “ a private dwelling,” in the singular, not to a building of private dwellings, in the plural.

I think, also, that the flat cannot be deemed a private dwelling. It is really a community house, designed for the accommodation of more than an individual and his household, which I consider to be the sense in which the word “private ” is to be taken. If it should be conceded that the flat here in question, consisting of three sets of apartments, is a private dwelling, upon the reasoning that each set of apartments is designed for that purpose, it must also be conceded that a flat twenty stories high, with its forty or eighty sets of apartments, is a private dwelling. This extension of the application emphasizes the destruction of individuality by multiplication that creates community, marks the line between privacy and publicity and makes conspicuous the fallacy of the reason suggested.

I have not been referred to, nor do I find, cases which directly define the meaning of the term “ a private dwelling.” I, however, find two cases in which the meaning of the term single dwelling-house” has come in question. The first is Gillis v. Bailey, 21 N. H. 149, decided in 1850. There the condition of the deed was that there might be re-entry if other than “ a single dwelling-house” with outbuildings should be erected. The preamble to the conditions recited that whereas the grantor was induced to dispose of its land in larger parcels in order that the buildings erected thereon might not be crowded together, but might each be surrounded by a space of open ground, and that for that purpose it had been agreed between the parties to the deed that only one single dwelling-house with outbuildings should be erected on the land. The court deemed that the intent gathered from this preamble was to prevent density of population and that the meaning of the term “a single dwelling-house,” especially when considered in light of the intention manifested by the preamble, was that “the defendant had the right of erecting a dwelling-house only intended and calculated for the convenient accommodation of one family, with the usual apartments and suitably constructed for such a purpose,” and not a building designed for the separate residence of three several families, even though all apartments were connected by doors in the separating walls.

The other case is Hutchinson v. Ulrich, 145 Ill. 336, decided in 1883, where the provision of the deed for a lot fifty feet wide was “ that the purchaser is to erect on the premises described herein a single dwelling, costing not less than $7,500,” and that the seller should dispose of his eleven remaining lots “ to parties who will cause to be erected single dwellings only on each lot of fifty feet.”

The court thought that the intention of the owner was to prohibit the erection of several small dwellings on each fifty-foot lot and to secure the erection of large structures on the property and to require the property to be used for residential purposes. It appeared in the ease that apartment houses were then existent near the property. The court remarked, in view of this material circumstance: “ If, therefore, it was the intention to prohibit the erection of a flat on the property, why did not the parties say so in the deed? or if they intended that only a building such as is usually built for a private residence of a family should be erected, why not say that in the deed ? ” It added: There can be no doubt in regard to the fact that the parties knew the difference between a flat and an ordinary dwelling-house erected as a private residence, and it is unreasonable to believe that the language incorporated in the deed would have been used if the intention Was to prohibit the erection of a flat.”

It is observed that in both these cases the term used was “ a single dwelling ” or “ a single dwelling-house.” The later case attempts to reconcile its differeuce from the earlier by attributing the conclusion of the New Hampshire court entirely to the intent evinced in the preamble to the condition imposed. But, at the same time, it rests the conclusion reached by it largely upon the fact that when the provision of the deed it considered was made, flat-houses existed near the land in question and were known to the parties, and yet were not expressly excluded. In its argument it substantially states that there is a difference between “a flat” and “an ordinary dwelling-house erected as a private residence,” and that the latter is sufficiently described by the term “ building such as is usually built for a private residence of a family.”

It is quite obvious that the reasoning in Hutchinson v. Ulrich makes strongly for the meaning I attribute to the term “ a private dwelling.” The case is not a precedent for the defendants.

I-will deny the motion, with costs.


text:
    Fort Wayne Electric Corporation v. Franklin Electric Light Company.
    [Filed September 13th, 1898.]
    1. Upon -proper application, where the proofs clearly exhibit that a corporation is insolvent and that there is no reasonable prospect that, if let alone, it will soon become safely solvent, a receiver will be appointed.
    2. The requirement of the statute that proof shall be made that an insolvent corporation will not be able to “ resume” its business with safety to the public and advantage to its stockholders within a short time does not predicate a complete suspension of business before a receiver can be appointed, but the taking up again and performing such functions or duties as shall have been suspended because of the insolvency, such as the payment of its current obligations.
    On bill for a receiver, answer and proofs.

      Mr. David J. Panooast, for the complainant.

      Mr. Samuel H. Grey and Mr. Robert H. MoOarter, for the defendant.
   The Chancellor.

The complainant recovered judgment against the defendant on the 15th of January, 1898, for $12,443.04, and, as a creditor of that company, asks that it be adjudged to be insolvent and that a receiver be appointed for it. In March, 1898, it made similar application, which was determined by decree dismissing its bill, dated on the 9th of June, 1898, upon the opinion and advice of Vice-Chancellor Reed, filed May 28th, 1898. The present bill was filed June 27th, 1898, eighteen days after the dismissal decree was made and about a month after the opinion in the former suit was filed.

Upon the previous application, as upon the present, it was made to appear that the defendant was engaged in the business of electric lighting at Cape May, where it has a contract for lighting the public streets and places extending some four years into the future; that it then had a completed plant consisting not only of the boilers, engines, dynamos and other apparatus appropriate thereto, but also poles and wires throughout the highways and country adjoining it; that upon the plant something approximating $60,000 had been expended; that a large part pf the machinery had been erected upon the land of one William O. Robb, who held a mortgage upon it and also a mortgage upon lands belonging to the light company, together securing to him the payment of $13,500; that a judgment had been recovered against the company in April, 1892, for about $1,200, in favor of Russell & Company, which antedates the mortgages, but is said by the defendant to have been paid, but is not satisfied of record ; that, subsequent to the mortgages, in June, 1896, one Warren recovered two judgments against the company, aggregating about $1,650, which appear to have been purchased for Thomas Robb, who has caused executions to be issued and levies made, so that he may sell the properties levied upon at pleasure; that in December, 1897, one Tunis recovered a judgment against the company for about $2,100, upon which execution issued and levy was made, and in February, 1898, the complainant recovered judgment against the company for about $12,500. It did not then appear what the value of the defendant’s property was nor that it was not worth all that had been expended upon it, and, by reason of its contract with the municipality and entry upon the actual use of its franchises, perhaps more than that sum. In absence of such proof, Vice-Chancellor Reed thought, that, while technical insolvency was exhibited by proof of a mortgage under foreclosure, unpaid judgments under which levies had been made and the existence of taxes and unsecured indebtedness unsatisfied, which the defendant could not pay, yet it was not a case for the appointment of a receiver, because the attitude of the creditors, except the complainant, indicated a forbearance that would admit of the continuance of the operation of the plant by the defendant and the execution of a then proposed scheme, which appeared to the vice-chancellor to be feasible, to retire the entire outstanding indebtedness by the issue of bonds, and because it did not appear that advantage could result to either the creditors or the stockholders of the company in the appointment of a receiver.

Upon the present application the opinion of a witness is offered to show that the value of the defendant’s property is not equal to the amount of the levies upon it, exclusive of the complainant’s judgment. If this opinion should be held to establish the value, a doubtful proposition with reference to so special a property, the matter is not new. The proof shows that the same conditions upon which the opinion is based existed at the time of the former litigation. The same proof might have been offered on the former suit. A new case cannot be made out of omitted facts then available.*

The material fact urged upon this application, that has come into existence since the case was adjudicated, is charged in the bill to be that the defendant

"has arranged a fraudulent sale of all its property of every sort, including its franchises, to the said William Oscar Eobb for the pretended sum of fifteen hundred dollars above his said mortgage claims against the company.”

This allegation offers a very material fact upon the inquiry whether a receiver should be appointed. The vice-chancellor’s conclusion was based upon his confidence in the integrity of the real managers of the company and their fidelity to the interest of the company’s creditors. He believed that their purpose was, as they represented it to him, to execute a scheme to issue bonds to liquidate the outstanding indebtedness of the defendant, and that the affairs of the company were being managed with economy and in the interest of creditors. If it had appeared to him that the purpose of those managers was, by a secret and contrived sale, for an inadequate price, to completely cut off and defeat the claims of creditors and stockholders, the case he considered would have presented an entirely different aspect.

By its answer the defendant denies, using its language,

“that it has any purpose or expectation of selling or disposing of its property, including its franchises, for the pretended sum of fifteen hundred dollars above the claims of the said Robb against this defendant or for any other sum,”

but at the same time admits that at an informal meeting of three out of the five directors of the defendant, of which meeting no notice to the absent directors had been given, discussion as to the advisability of making some disposition of the defendant’s property for the purpose of raising cash to pay all its indebtedness arose, but the suggestion was abandoned.

The answer in this respect is supported by the ex parte affidavit of Logan M. Bullitt, the president and a director of the defendant, in almost the terms of the answer and without further particulars. That charge of the bill is sought to be sustained, upon the other side, by the testimony of James E. Taylor and James M. E. Hildreth, two directors of the defendant. Mr. Taylor testified that there are five directors of the company— Messrs. Hildreth, Melvin and himself, of Cape May, and Messrs. Bullitt and Wilson, of Pennsylvania, the latter of whom is an employe of Mr. Bullitt; that the books of the defendant are kept in the office of Mr. Bullitt, at Philadelphia, and all receipts of moneys are sent to Mr. Bullitt there; that Wilson is the secretary and treasurer of the company, and that he (Taylor) has no information or knowledge as to what is done with the funds received for the company. He further testifies that in June, 1898, after the determination of the cause before Vice-Chancellor Eeed, a meeting of directors was held at Cape May, at the house of Mr. Hildreth, at which Mr. Bullitt proposed to sell the right, title and interest of the defendant, including its franchises, to "William O. Eobb for $1,500. The proposition was opposed by Mr. Hildreth, but, after discussion, Mr. Bullitt said that he would consider Mr. "Wilson present and in favor of it and that the resolution had passed, and boasted that “ they ” had refrained from paying interest on the mortgages and were going to foreclose them; that they had control of the judgments and when they got these things all working together somebody would be cleaned out.” Mr. Hildreth testifies that the meeting of directors, in June, 1898, was the first that had been held in two years, during which time Bullitt had sole control of the company; that Bullitt stated that the object of the meeting was to sell the defendant’s property and franchises to Mr. Eobb for $1,500, subject to what there was against it;” that the witness opposed it as a fraud upon the general creditors; that Bullitt declared it carried, but that subsequently the witness understood that the whole matter had been dropped. Mr. Melvin says that he was notified of the meeting referred to, by telephone, but was unable to attend it, and that he knows nothing of the affairs of the company since Mr. Bullitt has assumed charge of them.

Objection was made to this proof of corporate action upon the contention that the minute-book is the best evidence of it. If the only object of the proof was to show corporate action this would be true, but in this inquiry the disposition of the actual management of the company towards creditors and stockholders is in question, and that is best shown by the acts and utterances of the several members of that management.

This reference to the books itself suggests the pertinent fact that Mr. "Wilson had due notice that the books would be required at the taking of proofs, both by notice and by subpoena duces tecum served upon him in Philadelphia, and not only that but that the defendant, by order of this court, was required to bring the books within the state for use upon this inquiry, yet they were not forthcoming.' Mr. Bullitt is not shown to have been served, with such papers. He was in the South and did not return until just prior to the examination of witnesses, but it is in evidence that he knew that the books were needed. The other directors were notified in a similar way, but had no control over the books. The withholding of the books is a circumstance in this consideration.

The testimony of Messrs. Taylor and Hildreth is not denied.

I think that the proofs clearly establish that, upon the part of Mr. Bullitt, the scheme of bonding to liquidate indebtedness, if it ever really existed, has been abandoned, and that, instead, a strong disposition now exists to avoid the payment of a part, at least, of the unsecured creditors • and to sacrifice the interest of some of the stockholders, but I do not think that either the meeting in June was lawfully called or that the resolution offered by Mr. Bullitt was adopted. Mr. Hildreth voted against the resolution and Mr. Taylor remained silent. Mr. Bullitt could not alone pass it. Besides, it contemplated a virtual surrender of the.business in which the stockholders of the company had ventured their capital without reference to their will.

Before the court can appoint a receiver for this corporation it must appear, first, that the corporation is insolvent, and second, that it will not be able to resume its business with safety to the public and advantage to its stockholders within a short time.

It is a contention of counsel that the second requirement of the statute defines the insolvency intended as one that shall include a suspension of the business, while in the case before me, though there be insolvency, the business of the company has not suspended, the electric lighting continues and receipts therefor come into the treasury. I agree that the word “ resume,” as used in the statute, predicates some interruption of the insolvent’s business, but I do not understand that it contemplates an entire suspension of all its workings. Such has not been the practical interpretation the bar and the courts have given it, for manufacturing and other companies with plants in operation have constantly been adjudged to be insolvent and put in the hands of receivers, and in so doing large values have been saved to creditors and stockholders because of the salable condition of a live plant as compared with one that is dead. Insolvency carries with it inability to presently pay indebtedness and suspension of that function, and the word resume,” used in the statute, is, I think, to be taken in the sense of taking up again that suspended function, so that payment of indebtedness, as well as the operation of the work of the corporation, after temporary, partial or complete paralysis, may be “ resumed ” with safety to the public and advantage to its stockholders.

This point was not involved in Cook v. East Trenton Pottery Co., 8 Dick. Ch. Rep. 29, and I do not understand that that case, even in dictum,, holds the contrary of the view I have expressed.

That the late "Vice-Chancellor Van Fleet understood the statute in the way I have interpreted it, I think is manifest in his course of thought in Atlantic Trust Co. v. Consolidated Electric Storage Co., 4 Dick. Ch. Rep. 402, 407, where he suggests an admirable guide in the appointment of receivers for insolvent corporations. He says: “ The principle which I think should control the court in the exercise of this power is this — never to appoint a receiver unless- the proof of insolvency is clear and satisfactory and unless it also appears that there is no reasonable prospect that the corporation, if let alone, will soon be placed, by the efforts of its managers, in a condition of solvency. To illustrate: "Where the corporation attacked is shown to be insolvent, but it also appears that its managers are honest and capable and that they are striving, to the best of their ability, with fair prospect of success, to relieve the corporation from its embarrassment and to put it in a condition where it may prosecute its business successfully, and the property of the corporation is free from judgment or other lien under which it may be sold speedily, at a sacrifice, the court should not interfere.”

In the present case the corporation is encumbered by mortgage under foreclosure and by judgments and levies'is prepared for immediate sale. Its actual, management is in the hands of a minority of its directors. The receipts from its business are habitually taken from the state and are unaccounted for to its directors. No effort is being made to relieve the company from its perilous condition. On the contrary, at the single but irregular meeting of directors, held in two years, an effort was made to virtually abandon the corporation.

I think that a receiver should be appointed. It may be doubtful whether he can accomplish much for the relief of stockholders, but there appears to be a possibility that creditors may be paid through his instrumentality.


text:
    In re Edward J. Clifford, alleged to be a lunatic.
    [Filed October 10th, 1898.]
    1. The issuance of a commission of lunacy is a matter of judicial discretion.
    2. Such a commission will not be issued in behalf of a man alleged to be a lunatic, who has no estate and who is incarcerated in a well-appointed prison under conviction of murder in the first degree, punishable with death.
    On application for commission of lunacy.

      Mr. Warren Dixon and Mr. John P. StocMon, Jr., for the application.
   The Chancellor.

The object of issuing a commission of lunacy is that the chancellor may ascertain whether the person alleged to be a lunatic shall be allowed to exercise acts of dominion over his person and property, or whether his person and estate shall be taken into custody for the benefit and safety of both. Shelf. Lun. 103.

It is the practice of the chancellor, in entering upon the exercise of his jurisdiction in a matter of this kind, to be first satisfied that the case presented to him is one that merits his interference — that is, one where the alleged lunatic has an estate to be cared for, or is personally, if insane, so situated as to need the intervention sought, for his security and care within the rights he is entitled to under the law, and one in which the affidavits annexed to the petition for the commission, make a prima fade ease of the lunacy necessary to invoke the action sought. The application is to judicial discretion. Those who are interested in the lunatic cannot demand the issuance of the commission as a right. In re Chattin, 1 C. E. Gr. 496. It is obvious to reason that if the lunatic and his property be within safe and lawful custody, as, for instance, where an infant lunatic is well cared for in body and estate by a competent guardian, a commission will not issue. Shelf. Lun. 91.

If a commission issue and lunacy be found, the next step is to put the care of the lunatic and his estate in the hands of a guardian. But the proceedings cannot change the legal status of the lunatic so as to relieve him from imprisonment if he be held for crime. Nor will the finding of lunacy warrant the criminal courts in releasing him from imprisonment into the hands of his guardian. It is obvious — when it is considered that under the commission the inquiry is not as to the entire extent of the lunacy but merely whether it is enough to justify the taking from the subject of the inquisition his power to control himself and his estate — that the result of the inquisition cannot be relied upon in any inquiry as to criminal responsibility. Hale P. C. 33.

In the present case counsel frankly admits that Edward J. Clifford is in prison, under conviction of murder in the first degree. He has no property. His person is well cared for. By the judgment of a lawful and competent court he has lost his right to freedom, and must, for the present at least, remain where he is. If the chancellor enters upon this matter no benefit can result to Clifford, for he has no estate to be cared for and his person must remain where it is, under control of the law. Under such circumstances I perceive no sufficient reason to now exist why this application should be granted. If hereafter the circumstances shall change so that the man shall be discharged from the custody of the law and need the chancellor’s care, the application may be renewed.

I will deny the application.