text:
    Charles Fritz, Jr., v. Marguerita Fritz.
    [Decided February 29th, 1912.]
    Where a son, who had only shortly reached his majority, conveyed all o£ his property, which consisted of a tract of land, by way of gift to his father, who was a masterful man,-the conveyance is invalid, it appearing that the son had no competent disinterested advice.
    Heard on bill, amended bill, answer, replication and proofs in open court.

      Messrs. Tennant & Haight, fox the complainant.

      Mr. J. Emil Walscheid, for the defendant.
   Garrison, V. C.

The object of the hill in this suit is to have it decreed that a piece of property in the township of Union, Hudson county, Hew Jersc}r, belongs to the complainant.

The facts necessary to he considered in arriving at a decision are as follows: Charles Fritz, Jr., was the son of Charles Fritz, Sr., and his wife Agnes. The parents came to this country, leaving the boy with his grandparents at Darmstadt, Germany. He lived there with his father’s people until 1897, at which time he was about fourteen years of age. The father was engaged in the manufacture of trusses. The boy had broken his arm, and it had not mended properly. The father sent for the boy to come over here to receive export surgical treatment and because he had a place for him in his own business. Relatives and friends of the hoy raised a sum of money, approximating $460, and gave it to him, and he had this sum with him when he came to this country. His father had left his wife, the boy’s mother, and was living with Marguerita Stock, whom he subsequently married, and who is the defendant in this suit.

When the boy reached this country he had his arm examined by some surgeons selected by the father, and had an X-ray picture taken, and this is all that ever was done concerning the arm. The total expense could not have been more than fifty or sixty dollars; so that the father, out of the money which the boy brought to this' country and gave him, had about four hundred dollars left. The boy worked at various employments. In the early part of April, 1903, the land in question was purchased from a man named Limouze. Limouze testifies that the father •told him that he feared trouble with his wife since he had gone to live with this other woman, and that he suggested putting the title in the name of the boy, but that when Limouze, the real estate agent, learned that the boy was under age he suggested that it be taken in the name of the father as trustee for the boy. It is the fact that the title was made to Charles Fritz, Sr., as trustee for Charles Fritz, Jr. The money paid down was $100, and the balance of the $1,300 consideration money was represented by an $800 mortgage which was already on the property. There is testimony of impartial witnesses that the father at variotis times said that he had put the boy’s money into this property, and said that the property was the boy’s, and, when the boy was working upon the property, remarked that he was "working upon his own property.”

The father and the woman with whom he was living and the son (although the latter perhaps not continuously) lived upon the property in question down to the death of the father on the 31th of September, 1908, the boy working and giving his wages to his father.

On the 39th of October, 1907, Charles Fritz, Sr., as trustee for Charles Fiitz, Jr., and Marguerita Fritz, the defendant (who had married him in the preceding February) made a deed to one Geitze; who acted as a conduit, and who made a deed to Charles Fritz, Sr., and Marguerita Fritz, his wife, and at the same time Charles Fritz, Jr., made a deed to Charles Fritz, Si’., and Marguerita Fritz, his wife. The effect of these transactions, so far as their legal significance -was concerned, was to vest an estate by the entireties in Charles Fritz,.Sr., and Marguelita, his wife.

It appears from the testimony of Mr. Walscheid that he was engaged by Charles Fritz, Sr., to draw the deeds in question, and that he did so, and that lie explained to Charles Fritz, Jr., the contents of the deed from Charles Fritz, Jr., to Charles Fritz,-Sr., and wife.

The complainant, at the time that this deed was made, was twenty-four years of age, and had no property excepting this.

His explanation of his signature to the deed is that lie thought lie was taking pait in a transaction which resulted in money being raised on the property to pay assessments then due. I shall found no decree'in his favor upon this contention. He signed the deed and acknowledged it, and the uncontradicted evidence convinces me that he had the same explained to him and that lie read it.

I find as a fact that the father was a masterful man who dominated his son throughout the entire life of the father; that the son’s money was the consideration money used in the purchase of the land in question; that the title which was taken in the name of Charles Fritz, Sr., as trustee for Charles Fritz, Jr., correctly represented the legal and equitable situation at the time that the property was purchased; that either by the doctrine of resulting trusts, or by the acceptance of this deed by Charles Fritz, Sr., made to him as trustee, or by the effect of his signing the subsequent deed which recites that lie was trustee, the case is fiee from any violation of the statute of frauds, and the trust is clearly proven, manifested and legally enforceable.

At the time that the deeds were made which vested the legal title in Charles Fritz, Sr., and Marguei ita, his wife, the situation was that Charles Fritz, Sr., was the tiustee for Chai les Fritz, Jr., of the land in question; that the money which had gone into that property was the son’s; that the father dominated the son;, that the son liad no independent advice concerning the making of the deed by him to his father, or, if given effect, transferred as a gift to his father all that he possessed in the way of properly.

Tinder these circumstances and the findings of fact in this case, the doctrine of Slack v. Rees (Court of Errors and Appeals, 1903), 66 N. J. Eq. (21 Dick.) 447, clearly applies. In that ease it was laid down that where a relation of trust and confidence exists between a donor and a donee, a deed of gift of all of the donor’s property which contains no power of revocation will be set aside if it appears that the donor did not have the benefit of competent and independent advice as to the effect of the deed. The purpose of the rule, as stated in that case, is not so much to afford jorotection to the donor against the consequences of undue influence exercised over him by the donee as it is to afford him protection against the consequences of voluntary action on Ms pari induced by the existence of the relationship between them, the effect of which upon Ms own interests he may only partially understand or appreciate. And in the later case of Post v. Hagen (Court of Errors and Appeals, 1906), 71 N. J. Eq. (1 Buch.) 234, which reaffirms and applies the same doctrine, it is pointed out (at p. 248) that “proper independent advice in this connection means that the donor had the preliminaiy benefit of conferring fully and privately upon the subject of his intended gift with a person who was not only competent to inform him. correctly as to its legal effect, but who was, furthermore, so disassociated from the interests of the donee as to be in a position to advise with the donor impartially and confidently as to the consequences to himself of his proposed benefaction.”

The principle applied in Slack v. Rees, supra, is, as therein shown, of ancient origin, and has since been applied and enforced in the following cases in the court of errors and appeals and in the court of chancery: Albert v. Haeberly (Court of Errors and Appeals, 1905), 68 N. J. Eq. (2 Robb.) 664; Post v. Hagan (Court of Errors and Appeals, 1906), 71 N. J. Eq. (1 Buch.) 234; Walsh v. Harkey, (Vice-Chancellor Emery, 1908), 69 Atl. Rep. 726; Monoghan v. Collins (Vice-Chancellor Walker, 1908), 71 Atl. Rep. 617.

To the suggestion that. the doctrine in question has been changed, modified or weakened by the same court as shown in the case of Fretz v. Roth (Court of Errors and Appeals, 1905), 70 N. J. Eq. (4 Robb.) 764, I can only reply that the later cases, above cited, in the court of errors and appeals and in the court of chancery, do not consider that such is the fact.. It is true that in Fretz v. Both the same elements were supposed to be present—-that, the court of chancery in that case found that a wife who vras the dominant partner in the matrimonial relation, between whom and her husband of course a relation of confidence existed, had secured a lawyer to cause a conveyance to be made from her husband to her of all of his property, and that he did not have the benefit of independent advice and did not understand the effect of what he was doing, and that there was ino power of revocation, and that the deed should therefore be set aside. This decision of the court of chancery was reversed in the court of errors and appeals, but I think it must be assumed that the reversal was based upon a different finding of fact rather than upon an overruling of previous decisions announcing well settled principles.

Every factor which was found to be necessary to apply the principle in question is present in the case at bar.

The deed by the complainant will be avoided; the deed by the trustee to the defendant will be found to vest in her such title as the trustee had; and, since the trust is a dry one, and the cestui que trust is now of age, I see no reason why the legal title should not be vested in him at once.

The form of the decree, however, will be settled upon notice.


source: Caselaw Access Project

author: Garrison, V. C.

license: Public Domain

text:
    Richard B. Meaney et ux. v. Frederick B. Stork.
    [Decided May 9th, 1912.]
    1. One who seeks to enjoin the violation of a building restriction must act promptly upon being advised of that which he asserts does or will constitute the violation.

      2. Where complainants and defendant owned adjoining lots acquired from a common source of title under a restrictive covenant providing that no building should be erected within ten feet of the street line, and where the complainants, observing that a building which was being erected by the defendant projected over the ten-foot line with its eaves and with bay windows for which sills had, been laid, notified the defendant that they would consider the bay windows a violation of the covenant, but made no mention of the eaves, they were not entitled to an injunction as to the eaves, especially where almost every other house on the street on lots encumbered with the same restriction projected over the ten-foot line; the defendant being warranted in concluding that the projection of the eaves was unobjectionable to the complainants.
    3. Restrictive covenants are strictly construed against the person seeking to enforce them.
    4. Restrictive covenants will not be enforced by injunction when they are vague or uncertain, or where the right to relief is doubtful.
    5. Restrictive covenants, to be enforceable in equity, must be reasonable.
    6. The meaning of a restrictive covenant must be ascertained not only from its language, but also from the circumstances of its creation and its obvious purpose.
    7. A restrictive covenant, providing that no building should be erected upon the lot within ten feet of the street line, and that the ten-foot strip should be kept open and unencumbered, except that light, open fences, noi more than six feet in height, might be built to enclose a yard, did not prohibit the projection of steps from the front of the house over upon the ten-foot strip.
    Heard on bill and supplemental bill, answers, replication and proofs in open court.

      Messrs. Weller & Lichtensteinfor the complainants.

      Mr. Frederick N. Eberhard, for the defendant.
   Garrison, V. C.

This is a bill filed to enforce a building restriction. The lands in question lie in a place named Eldorado, at Weehawken, Hudson county, this state.

The complainants and the defendant are owners of adjacent lots at that place, claiming through a common source of title, the complainants’ title having left the common grantor first.

The restriction in question reads as follows:

“That neither he nor they will erect or permit to be erected on any lot any building within ten feet of the line of the street, avenue or place upon which said lots front, but shall keep said strip of land open and unencumbered, except that light, open fences, not more than six feet in height, may be built to enclose said strip as a court-yard, if so desired.”

The complainants’ lots are unimproved. Upon the defendant’s lots he has erected a house. The street or avenue in question is called Liberty place, and I am assuming, in favor of the complainants, that the restriction in question obtains throughout Liberty place. T am also assuming that there was a common scheme for building improvement with similar restrictions imposed upon the land by the common grantor, and that the same is enforceable by the complainants b}r reason of the circumstances and the principles of law applicable to the situation.

The proofs show that od Liberty place, to the west of the lots of the complainants, there are other houses, built since they acquired their title, and that in almost, if not every instance, some part of the ten feet back from the street line has projecting over it, or resting on it, eaves of. a house, or a porch, or steps or porticos. To the east of the complainants’ lots there is, I think, at the present time, the proofs show, only the house of the defendant; and the eaves of his house, as completed, project from the front of the house, which is ten feet from the street line, about three feet and eight inches, and the steps that lead up to the front door of his house occupy several feet of the teu-foot strip.

The object of the bill and the supplemental bill is to restrain the continuance of these two alleged violations of the above-quoted covenant.

It appears from the proof that the defendant planned a house with a hay window projecting from the front of it, and that when the male complainant observed this in the course of the building he consulted his counsel, who sent a notice to the defendant notifying the defendant that the erection of this hay window was a violation of the restriction, and if continued would result in the complainants applying for relief. ■

The defendant,, after the receipt of this communication, contemplated moving his house farther hack than it then was (it then being, as above statéd, just a little over ten feet from the street line), so as to he able to erect the bay window and still he at least ten feet from the street line. Subseqirently, however, he changed his mind, ancl eliminated the bay window, and continued with the erection of the house.

Since I propose to concede, in behalf of the complainants, for the purposes of this case, all of the principles of law for which they contend, it does not seem to me to he necessary or proper to burden this opinion with citations of authority. I propose, for the purposes of this case, to consider it settled that there was a common building scheme applicable to the lands on Liberty place, and that among the restrictions was the one contained in the above-quoted covenant, and that the complainants were entitled to enforce that covenant against the defendant.

'The defendant argued that the court should find that the complainants were not entitled to relief because of the facts concerning the other alleged violations of the same covenant on the same street. It is the fact, as above mentioned, that on this same street almost every other house had something projecting from it which hangs over the ten feet in question—that is, the ten feet between the front of the house and the street line—or has a porch or steps resting upon part of the ten feet. The answer of the complainants to this argument is that such projections or encroachments of the other houses on the street did not affect him, as they were all to the west of Mm; whereas, the view of the Hudson river and the boulevard from his lots was the desirable and valuable view, and the defendant’s lots lie between the complainants’ property and the Hudson river, and anything erected upon the defendant’s lots which interfered with or obstructed the view was injurious.

The complainants, in respect to the law applicable to this situation, cited those cases which hold that slight and immaterial violations by others in the same neighborhood will not be lield to deprive a complainant peculiarly injured by the violation he is attempting to restrain from being accorded the protection • to which it is found he is entitled with respect to the injurious violation. Under all the circumstances, therefore, I am not content to find, as against the complainants, that their conduct with respect to the alleged violation by others of the same covenant deprives them of the right to enforce it as against the'.defendant. I take it to he perfectly settled in such cases that one who seeks the aid of equity must act promptly upon being advised of that which he asserts is or will be a violation of the restriction; and, therefore, I am of opinion that even if the covenant should be construed as prohibiting the projection of the eaves of the defendant’s house over the ten feet mentioned in the covenant, the complainant may not have accorded to him, in a court of equity, injunctive relief under the circumstances disclosed by the proofs in this suit. The bill in this case charges that

“when the cornice (and by this the complainants mean the eaves) was placed on said building, your orators noticed that the same was over the said building line * * * ; that thereafter bay window frames were put up * * * and that on the 11th day of August, 1910, their said solicitor served upon the said (defendant) the notice.”

The notice, as will be recalled, confined itself specifically to the bay window. After receiving this notice the defendant, as I have already stated, seriously contemplated digging a new cellar, or making a new foundation and moving his whole house back a certain distance, so as to be able to preserve the front of it with the bay window, and still not in any way encroach upon or project over the disputed ten feet; but subsequently determined to simply eliminate the hay window to which the complainants had objected, and completed his house in that way.

I am entirely clear that under these circumstances it would be unjust to the defendant for a court of equity by injunction to prevent the'maintenance of the said cornice or e'aves. It appears from the bill and proofs that when the defendant had so far progressed with his building as to show that he intended to place bay windows in ihe front'and to have a cornice or eaves projecting from the said front some three feet and a half, the complainants observed this situation and communicated to the defendant ■their objections to the existing plan of the defendant, and warned him that the hay windows were a violation of the covenant. They did not warn him with respect to, nor in any way call his attention to, the cornice or eaves.

- Under these circumstances, I think the defendant was entirely justified in determining that the complainants did not object to anything in the existing situation other , than that which they specifically pointed out and stated as their objection. And I think that the defendant was entirely justified then in acting upon that determination, and leaving the rest of the building as it was originally planned, eliminating the feature to which the complainants had objected.

Furthermore, the defendant, by reason of existing conditions, upon that street, was entirely justified in reaching the conclusion he did, because almost every other house on the street in some way or other projected over the ten feet in front of it; and when the complainants were advised by the physical situation of what the defendant contemplated doing, and only objected to the bay windows, he clearly, in my view, led the defendant to the conclusion that whatever other projection there was, was unobjectionable to the complainants.

With respect to the matter contained in the supplemental bill, what has just been said is not applicable, because at the time of the filing of the bill the steps leading up from the ground to the front entrance were not in place and were placed subsequent to the filing of the original bill, and became the subject-matter of the supplemental bill.

This leads .us to a consideration of the language and meaning of the covenant. In this connection it should be recalled that courts of equity do not aid one to restrict another in the uses to-which the latter may lawfully put his property unless the right of the former to such aid is clear; that restrictive covenants are. strictly construed against the person claiming the right to enforce them; and that such covenants must not be vague or uncertain. Where the right of a complainant to relief by the enforcement of a restrictive covenant is doubtful, his right to such relief must be denied. For a late expression of these principles, see Fortesque v. Carroll (Court of Errors and Appeals, 1910), 76 N. J. Eq. (6 Buch.) 583; applied in Goater v. Ely (Vice-Chancellor Garrison, 1912), 82 Atl. Rep. 611.

I take it as-firmly settled that a restrictive covenant, to be enforceable in equity, must be reasonable, and that the meaning to be attributed to it must be ascertained not only by a consideration of its language, but also by a consideration of the circumstances existing at the time of the creation of the covenant and its obvious purpose. It will be recalled that the language of the covenant with which we are dealing prohibits the erection

“oii any lot of any building within ten feet of the line of the street * * * but shall keep said strip of land open and unencumbered, except that light, open fences,' not more than six feet in height, may be built to enclose said strip as a court-yard, if so desired.”

In che case of Brigham v. Mulock (Vice-Chancellor Leaming, 1908), 74 N. J. Eq. (4 Buch.) 290, the court said (at p. 289): "The covenants in question provided that no building -shall be erected within twenty feet of the property line of any street * * * and in that case (at p. 290) the court entertained grave doubts whether open porches and bay windows, not extending to the ground, were within the language of the covenant.

The complainant in this suit seeks to escape this construction of the covenant in question in this suit by referring to the subsequent language in the covenant in question with respect to keeping the said strip of land open and unencumbered.

"Open” in one sense unquestionably nieans absolutely without obstruction; and "unencumbered” may be properly used, in some connections, as meaning absolutely without anything resting on or projecting over land. But when this whole covenant is read together, I think its meaning is reasonably plain, and, further, that it is entirely plain that it cannot be given, the broad construction contended for by the complainants. The obvious purpose of ibis covenant was to prevent the erection of a building withirf the ten feet. Every house was to have in front of it— that is, in front of its front line—ten feet of unbuilt-on property. It cannot be successfully argued that any such absurd result should be attributed to a construction of this covenant as to prevent that ten feet from having placed upon it anything. Surely "walks could be built through it, and to that extent the land would not be unencumbered. Little copings along the side of the walks to protect flower beds bordering the walks would surely not be within any reasonable construction of this covenant. And yet, if broadly construed, the walk itself and the coping or projection along the side of it, put there for protection, would be an “encumbrance” in some use of that word, and probably would also cause the land not to he “open”—that is, absolutely free of obstruction, within a broad and in some senses proper use of the word “open.”

I am of the opinion, on the one hand, that if the front of the building was ten feet from the line of the street and then a covered porch projected from it on to the ten feet, that would be part of the erection of the building, and would violate the covenant. On the other hand, I am of opinion that it is within the meaning of this covenant to permit an approach by way of steps to rest on the said ten feet; and I do not think that, in the proper sense of this covenant, such steps cause the said strip of land to be unopen and encumbered—that is, violate the provisions of the covenant that the said strip of land should be open and unencumbered. In other words, I incline to the opinion that the obvious purpose of the covenant was to have in front of each house a strip of land ten feet wide across which the vision of the neighbors would be unobstructed, and that the prohibition was against the erection of anything 1133011 or within the said ten feet which should prevent free observation across it. Eead in this wai’, the restriction is entirely reasonable; the obvious purpose of it is served, and the owner of each lot is not deprived unreasonably of a perfectly proper use of bis property. Eead in the broad way that the complainants insist it should be read, giving the most extreme meaning to each word of which each word is capable, the said strip of land would have to be left absolutely unimproved in any wajr, because anything placed upon it which nature had not placed there would then “encumber” it, in the broadest sense of the word, and this is so entirely unreasonable that we discard.it and search for the more reasonable construction.

In conclusion, I can only, by way of summarization, say that 1 cannot believe it proper to construe this covenant so as to prevent the building of walks across this strip, or the resting of steps upon a portion of this strip; and I am also inclined to think that the projection of the eaves from the roof of a house, or. a “cornice,” as the complainants call it, was not within a reasonable construction of the covenant. However, I do not decide that in this case, because I think the complainants are remediless in equity with respect to that, for the reasons previously pointed out.

Under the circumstances of this case, and the law which I find applicable thereto, I have determined that the bill should be dismissed ; but since it was entirely proper for the complainants to obtain a judicial construction of this covenant, and there was nothing unreasonable in their bringing the defendant before the court for that purpose, I will exercise the discretion vested in the court with respect to costs and shall make the said dismissal without costs as against the complainants.


author: Leaming, V. C.

text:
    Matilda Down, by next friend, v. Everett M. Down.
    [Submitted January 2d, 1912.
    Decided February 7th, 1912.]
    1. A resulting trust cannot arise in favor of a husband, in the absence of fraud, under conveyances by him to his wife, through an intermediary, of property already owned by him; the deeds expressing a money consideration and declaration to use of the grantee; the wife being the real grantee, and the intermediary being a mere conduit of title and enjoying no beneficial estate.
    2. Where defendant as president of a building and loan association received from it various sums of money to pay to borrowers on the completion of various transactions, he being chargeable therewith as a trustee, the burden was on him to show that the money was either paid over to the borrowers as contemplated or returned to the association, and, in case of his inability to do so. he was personally liable therefor.
    3. A, recital in a deed of a pecuniary, though a nominal, consideration raises a conclusive presumption of an intention that the grantee is to take the beneficial estate, and destroys the possibility of a trust resulting to the grantor, and no extrinsic evidence is admissible to contradict the recital, except in the case of fraud or mistake; hut this rule does not apply where property is purchased by one person, and title is taken by him in the name of another.
    4. Where the deeds from a husband to his wife, through an intermediary, of property previously owned by him, express a money consideration, as paid by the grantees, in the deeds, and a declaration to the use of the grantees, parol evidence of a promise of the wife to reconvey to the husband, when required by him, is inadmissible to establish a trust in favor of the husband.
    5. Where a husband conveyed, through an intermediary, property to his wife, who did not, through false promises, procure the conveyance with intent to deceive her husband, her mere failure to perform a parol promise, originally made in good faith, to reconvey to the husband when required was not fraud sufficient to establish a constructive trust in favor of the husband..
    On bill, &c., of wife, by next friend, to enjoin husband from interfering with her possession of certain real estate.

      Mr. Lewis Starr, .for the complainant.

      Messrs. Garrison & Toorhees, for the defendant.
   Leaming, V. C.

The present controversy involves, the ascertainment whether certain real estate is owned by Matilda Down, complainant herein by her next friend, or by her husband, Everett M. Down, defendant and cross-complainant herein. The legal title to the real estate in question now stands in the name of complainant; her husband claims to be the equitable owner and by his cross-bill seeks to compel a conveyance to him of the legal title.

On and prior to July 12th, 1905, the husband was the absolute owner of the property in dispute; on that day, by deed of conveyance in which his wife joined, he conveyed the same to one Percy E. Conner. The deed to Conner is in form an absolute deed of conveyance with an expressed money consideration, full covenants, and declaration to the use of the grantee; but it is admitted that the deed was made to Conner without consideration and for the sole purpose of enabling Conner to hold the naked, legal title, and that the equitable title was undisturbed by that conveyance. It is also admitted that Conner held the legal title under the deed referred to until April 8th, 1910, on which date he conveyed the property to complainant, at the request of. defendant, her husband. The present suit is. to determine whether this last named conveyance vested in Matilda an absolute estate, or whether she holds title in trust for Everett, her husband.

The conveyance from Conner to Matilda was, in form, an absolute deed of conveyance with full covenants and declaration to the use of tire grantee and an expressed money consideration. The deed was prepared by the husband and executed by Conner at his request. No writing exists which manifests a trust. Any trust that may exist in favor of the husband of complainant must exist, if at all, by operation of law, either as a resulting trust arising from his having supplied the consideration of the convej^ance to his wife without intending a gift, or as a constructive trust arising through fraud, actual or constructive.

At the hearing I entertained the view that a resulting trust could arise in favor of a husband by reason of a conveyance made by him to his wife, through an intermedia^, without consideration, although the two conveyances by which the transfer should be affected contained expressed money considerations and full covenants and declarations to the use of the respective grantees. Accordingly, the hearing was conducted upon the theory that proofs could be entertained to rebut the presumption of gift, and if found to be sufficient for that purpose relief could be awarded in behalf of the husband, cross-complainant, to the same extent as in a case in which a husband or father had purchased a property and causes the deed therefor to be made to his wife or son. A further consideration of the subject leads me to the conclusion that I was in error. I am now satisfied that a resulting trust cannot arise in favor of a husband, in the absence of fraud, under a conveyance made by the husband to his wife, through an intermediary, of property already owned by the husband, b3r deeds of com^ance which express money consideration and declaration to use of the grantee. My reasons for this conclusion are—first, because the rule which permits the presumption of a resulting trust to arise from a deed which expresses a money consideration and declares the use to the grantee appears to be confined, in the absence of fraud, to cases in which a property is purchased b3r one person and title -taken in the name of another; second, even though it should be held that the rule referred to is not confined to cases in which property is purchased by one and title taken in the name of another, a resulting trust cannot arise in favor of a grantor, in the absence of fraud, under a deed of conveyance expressing a monejr consideration with declaration to the use of the grantee; and a conveyance from a husband to his .wife, through an intermediary, must be regarded as in substance a deed from the husband to the wife.

My views in amplification of the first proposition may be stated as follows: All true resulting trusts may be reduced to two general types, says Professor Pomeroy in 3 Eq. Jur. § 1031. First: ' :

“Where there is a gift to A, but the intention appears, from the terms of the instrument, that the legal and beneficial estates are to be separated, and that he is either to enjoy no beneficial interest or only a part of it.” “The second type includes the cases where a purchase has been made, and the legal estate is conveyed or transferred to A, but the purchase price is paid by B.”

In explanation of the first type, the learned author says:

“In order that a case of this kind may arise, there mast be a true gift so far as the immediate transferee, A, is concerned; the instrument must not even state a consideration, and no valid complete trust must be declared in favor of A or of any other person.”

In further explanation of the first type referred to the same author says:

“In this and all other forms belonging to the class under present consideration, there must be no pecuniary consideration coming from the grantee, for such a consideration would raise a trust in his own favor, and clothe him with the beneficial interest. Even if the conveyance merely recites a pecuniary consideration, the same effect would be produced.
“Furthermore, the deed or will must contain no declaration of use covering the whole estate in favor of the grantee or devisee; such declaration of use would raise a trust in his favor, vest in him the beneficial estate to its extent, and so far defeat any resulting trust.” ■ Section 1033.

Judge Story’s consideration of resulting trusts in his Equity Jurisprudence is, in effect, the same. Touching the second class of resulting trusts above referred to by Professor Pomeroy, he says:

“Where a man buys land in the name of another and pays the consideration money, the land will be generally held by the grantee in trust for the person who pays the consideration money.” Section 1201.

Aud in' section 1201a, tlie same author states that the doctrine is strictly limited io cases where a purchase has been made in the name of one person and the purchase-money has been paid by another. In section 1203, in speaking of the rule that where the purchase is made by a father and the conveyance made to a son the presumption of gift arising from the relationship may be rebutted, the learned author says: “It is perhaps rather to be lamented that it (the presumption of gift) lias been suffered to be broken in upon by any sort of evidence of a merely circumstantial nature.” In 3 Reed Stat. Fr. § 891, the general classification of trusts by operation of law is stated as follows:

“The classification of trusts which Lord Hardwicke makes is most often quoted: ‘The two classes of resulting trusts are first, when an estate is purchased in the name of one person, but the money or consideration is given by another, or secondly, where a trust is declared only as to part, and nothing said as to the rest. What remains undisposed of results to the heirs-at-law, and they cannot he said to be trustees for the residue. 1 do not know in any other instances besides these two, where the courts have declared resulting trusts by operation of law, unless in cases of fraud.’ (Lloyd v. Spillet, 2 Atk. 150.) Under this classification the subject divides itself into-: A. Resulting Trusts; and B. Constructive, Implied, or eco maleficio Trusts.”

In section 922, the same author, speaking of resulting trusts as arising from a purchase by one and title made to another, says:

“A subsequent advance will not by relation attach a resulting trust to the original purchase, for this trust arises from the fact that the money of the real and not the nominal owner formed at the time the consideration of the purchase, and became converted into land.”

In 1 Lew. Trusts *143, the same classification is made of trusts by operation of law. They are there divided into resulting and constructive trusts. As to resulting trusts the author says:

“Resulting trusts, the subject of the present chapter, may be subdivided into the following classes: First, where an owner or person legally and equitably entitled makes a conveyance, devise or bequest of the legal estate, and there is no ground for the inference that he meant to dispose of the equitable; aud, secondly, where a purchaser of property takes a conveyance of the legal estate in the name of a third person; but there is nothing to indicate an intention of not appropriating to himself the beneficial interest.”

Touching the other class of trusts arising by operation of law, namely, constructive trusts, Professor Pomeroy says:

“An exhaustive analysis would show, I think, that all instances of constructive trusts properly so called may be referred to what equity denominates fraud, either actual or constructive, as an essential element, and as their final source.” Section 1044.

The foregoing citations from the leading text-writers sufficiently disclose that the doctrine of resulting trusts (and by the term resulting trust is here excluded all trusts arising through fraud, either actual or constructive, and in the classification of fraud may be included accident, mistake, incapacity, undue influence, improvidence, and the acquisition of property with trust funds or in violation of trust duties) arising from conveyances which in terms express a money consideration as having been paid by the grantee or declare the whole use to the grantee appears to be confined to cases in which a purchase is made by one person and title is taken by the purchaser in the name of another. I find nothing in the adjudicated cases in this state that appears to justify the extension of the doctrine of true resulting trusts beyond the boundaries as above defined. As.already stated, trusts are sometimes referred to as “resulting trusts’’ which in some measure have fraud for their foundation, either actual or constructive; but these are excluded from present consideration.

But should it be thought that the views above expressed too closely confine the field of operation of resulting trusts, I think it is clear that the accepted doctrine that a resulting trust cannot arise in favor of a grantor,.in the absence of fraud, under a deed of conveyance expressing a money consideration with declaration to the use of the grantee, must be regarded as operative to deny relief to cross-complainant in this suit. This rule of law has been so frequently stated and applied that its amplification is unnecessary. Professor Pomeroy, in S Eq. Jur. § 10S6, states the rule as follows:

“In all the instances belonging to this first form of resulting trust, the intention that the donee is not to enjoy the beneficial interest, but that a trust is to result, or the contrary intention, must appear expressly or by implication from the terms of the instrument itself by which the property is conveyed. If the instrument is a wi1], then no extrinsic evidence is ever admissible to show the testator’s meaning, nor even to' show a mistake. If the instrument is a deed, no extrinsic evidence of the donor’s intention is admissible, unless fraud or mistake is alleged and shown. If, therefore, there is in fact no consideration, but the deed recites a pecuniary consideration, even merely nominal, as paid by the grantee, this statement raises a conclusive presumption of an intention that the grantee is to take the beneficial estate, and destroys the possibility of a trust resulting to the grantor, and no extrinsic evidence would be admitted to contradict the recital, and to show that there is in fact no consideration, except in case of fraud or mistake.”

The text above quoted, and the cases of this state here cited, except from their operation, as already pointed out, instances in which property is purchased by one person and title is taken by him in the name of another. The text above quoted from Pomeroy is supported by the following cases in this state: Baldwin v. Campfield, 8 N. J. Eq. (4 Halst. Ch.) 891, 903; Smith v. Howell, 11 N. J. Eq. (3 Stock.) 349, 359; Whyte v. Arthur, 17 N. J. Eq. (2 CV E. Gr.) 521, 523; Hogan v. Jaques, 19 N. J. Eq. (4 C. E. Gr.) 123; Osborne v. Osborne, 20 N. J. Eq. (2 Stew.) 385; Stucky v. Stucky, 30 N. J. Eq. (3 Stew.) 546, 554; Lovett v. Taylor, 54 N. J. Eq. (9 Dick.) 311; Coffey v. Sullivan, 63 N. J. Eq. (18 Dick.) 296, 303; Aller v.Crouter, 64 N. J. Eq. (18 Dick.) 381; Holten v. Holten, 72 N. J. Eq. (2 Buch.) 312; Ashby v. Yetter, 79 S. J. Eq. (9 Buch.) 196.

But it will be observed that the deed now under consideration was not made by cross-complainant to his wife directly, hut through an intermediary to whom cross-complainant had first conveyed the property; the deed immediately in question is not, therefore, a deed in fact executed by cross-complainant. But I think no substantial distinction can be properly made between a conveyance made directly to another and one made through an intermediary where it is ■ admitted. that the intermediary was a mere conduit of title and enjoyed no beneficial estate; in substance, the two transactions are the same; in either case the person from whom the real-title passed to the ultimate grantee should be regarded as the real grantor, if the conveyance was, or the conveyances were, by his direction. This view appears to have received the sanction of this court and also of our court of errors and appeals. In Fretz v. Roth, 68 N. J. Eq. (2 Robb.) 516, the conveyance in question was from a husband to a wife through an intermediary. At p. 627 the learned vice-chancellor says: “The deed in this case, being upon an express consideration, and the use being declared therein for the grantee, there can be no resulting trust in favor of the grantor. Coffey v. Sullivan (Court of Errors and Appeals, 1901), 63 N. J. Eq. (18 Dick.) 296 (at p. 303); to the citation on p. 303 thereof, add Lister v. Lister (Chancellor Runyon, 1882), 35 N. J. Eq. (8 Stew.) 49. The eases which hold that the presumption of a settlement upon a wife, overcomes the presumption of a resulting trust in circumstances where the husband pays for property which is conveyed to his wife, but that this presumption in favor of the wife may be overcome by proof, do not apply. This was a direct conveyance "from the husband through an intermediary.” And on page 524 the following:

“In the first place, there is no testimony of a clear and distinct agreement between the parties made at the time of the conveyance, and if there were it could not be taken advantage of 'it by this complainant because of the statute of frauds and of the canon of evidence, which forbids the reception of oral proofs to vary written instruments.” In the review of Fretz v. Roth, on appeal, 70 N. J. Eq. (4 Robb.) 764, the language of the learned vice-chancellor last above quoted is quoted with approval; and on page 770 of the opinion of the appellate court the following is said: “Even if it be admitted that the complainant did not understand the legal effect of the deed he gave, it, nevertheless, must be held, under long-settled principles, that he is remediless. He was bound to know that a trust, not manifested in writing, could not be implied in his favor. His deed declared, • by its habendum, clause, the use to be for the grantee. Where a use is declared by a deed operating under -the statute of uses, no other use or trust, not expressed in writing, can be shown to result. Coffey v. Sullivan, ubi supra, and authorities there cited.” See also Osborne v. Osborne, supra.

In reaching the conclusion that the present case is one in ■which a trust cannot result to cross-complainant by operation of law, a discussion of the evidence upon which such a trust was claimed in his behalf is rendered unnecessary. The testimony of the promise of the wife to reconvey when required by her husband and of the purpose of cross-complainant in making the conveyance, cannot be considered in view of the conclusions here adopted. It may be said, however, that the wife denied the promises attributed to her, and it is indeed doubtful whether the evidence, if it should be considered, could be said to establish the claim of the husband with that degree of certainty required to rebut the presumption of advancement.

The degree of certainty required is defined in Read v. Huff, 40 N. J. Eq. (13 Stew.) 229, 234 as follows: "The circumstances relied on must be convincing, and leave no reasonable doubt as to the intention of the party.”

A constructive trust cannot arise in this case. No fraud is averred in the cross-bill or established by the evidence. The mere failure or refusal of the wife to perform a parol promise she may have originally made, in good faith, to reconvey the property, is not fraud. Lovett v. Taylor, supra. The evidence does not justify the conclusion that the deed was procured by the wife through false promises, with a view of trapping or deceiving her husband. I place no reliance upon the testimony of the two children touching statements made by the wife some time after the deed was delivered to her, which statements, if true, might indicate that she had planned to get the title in her name with a view of subsequently repudiating an engagement to reconvey. Nor was the property conveyed substantially all of the property of cross-complainant.

I will advise a decree in conformity to the views herein expressed.


text:
    James L. Doctor v. Joseph J. Desmond et al.
    [Decided February 23d, 1912.]
    1. To authorize personal service of process in the state on a director of a foreign corporation within General Corporation act (2 Comp. Stat. 1910 p. 165S § 88), authorizing such service, the foreign corporation must have entered the state to carry on its business.
    2. General Corporation act (2 Comp. Stat. 1910 p. 1653 § 88), authorizing personal service of process in the state on a director of a foreign corporation, does not authorize service on a director of a foreign corporation who is in the state in attendance at a stockholders’ meeting of a domestic corporation to vote stock owned by the foreign corporation in the domestic corporation; no other business of the foreign corporation having been at any time transacted in the state.
    Hearing on return of order to show cause why service of process should not be set aside.

      Messrs. Grey & Archer, for the complainant.

      Mr. William T. Boyle, for the HuBone Corset Company of Hew Jersey and George H. Barlow.

      Messrs. Collins & Corbin, for the HuBone Corset Company of Pennsylvania.
   Leaming, V. C.

The single question for determination at this time is whether this court has jurisdiction over a Pennsylvania corporation in a suit pending in this court, in which service of a subpoena ad respondendum was made on one Barlow, who was, at the time of the service, a director and treasurer of the Pennsylvania corporation, and in this state in attendance at a stockholders’ meeting of a corporation of this state as proxy for the Pennsylvania corporation for the purpose of voting stock owned by the Pennsylvania corporation in the corporation of this state, no other business of the Pennsylvania corporation having been at any time transacted in this state.

Section 88 of our General Corporation act by its terms authorizes personal service of process in this state oh a director of a foreign corporation, and on certain other persons there named as representatives of the corporation. But it is well settled that this section must be read and understood in the light of certain well-defined legal principles. In Moulin v. Insurance Company, 24 N. J. Law (4 Zab.) 222, 234, it was held that: “Where a corporation confines its business operations to the state which has chartered it, a law of another state, which sanctions the service of process upon one of its officers or members accidentally within its jurisdiction is unreasonable, and so contrary to natural justice and to the principles of international law that the courts of other states ought not to sanction it. In such a case, a president or other officer ought not to be considered as carrying his official character along with him.” It is equally well settled that when a corporation transacts business in a state other than the state which has chartered it, and sends its officers or agents into such state for that purpose, it must be regarded as voluntarily subjecting itself to the liability of being brought into the courts of such state by the service of process upon such officers or agents so acting for it. National Condensed Milk Co. v. Brandenburgh, 40 N. J. Law (11 Vr.) 111; Norton, Administrator, v. Berlin Iron Bridge Co., 51 N. J. Law (22 Vr.) 442; Hygea Brewing Co. v. Erie Railroad Co., 76 N. J. Law (47 Vr.) 261; Smallbein v. Erie Railroad Co., 79 N. J. Law (50 Vr.) 593; Mulhearn v. Press Publishing Co., 53 N. J. Law (24 Vr.) 150; Carroll v. New York, New Haven and Hartford Railway Co., 65 N. J. Law (36 Vr.) 124; Erie Railroad Co. v. Van Allen, 76 N. J. Law (47 Vr.) 119.

The. principles to be deduced from the cases above cited, as well as from similar cases in other states, may be briefly stated as follows—first, the foreign corporation must have entered the domesti'c state for the purpose of carrying on its business there; second, the process must have been served upon an agent sustaining such a relation to his corporation that notice to the agent may be deemed notice to the principal, without a violation of the principles of-natural justice. See 19 Cyc. 1328.

Was the Pennsylvania corporation in question transacting its business in this state within the meaning of the principles above stated ? It sent its representative here to vote its stock at a stockholders5 meeting of a corporation of this state. The business to be transacted was the business of the Hew Jersey corporation; but that business was transacted in this state through the medium of its stockholders, one of whom was the Pennsylvania corporation; that corporation was here through its representative representing its own stock, and to that extent was engaged in transacting business in this state. But it appears to be well settled that the rule that a corporation by transacting business in a foreign state voluntarily subjects itself to the laws of that state regulating the service of process on foreign corporations has reference to the transaction of some substantial part o'f its ordinary business-by its officers or agents selected for that purpose, and that the transaction of an isolated business act is not carrying on or doing business within the meaning of the rule. This view appears to be uniformly adopted in all of the adjudicated cases which have been brought to my attention. Good Hope Company v. Railway Barb Fencing Co., 22 Fed. Rep. 635; United States v. American Bell Tel. Co., 29 Fed. Rep. 17; 37; Carpenter v. Western Air Brake Co., 32 Fed. Rep. 434; St. Louis Wire Mill Co. v. Cons. Barb Wire Co., 32 Fed. Rep. 802, 805; Clews v. Woodstock Iron Co., 44 Fed. Rep. 31; Doe v. Springfield Boiler Co., 104 Fed. Rep. 684, 687; Cooper Manufacturing Co. v. Ferguson, 113 U. S. 727; Jameson v. Simonds Saw Co. (California Appeals), 84 Pac. Rep. 289, 290. In the case last cited, the language of District Judge Howley, in Doe v. Springfield Boiler Manufacturing Co., supra, is quoted with approval as follows: ‘ILegal service of process-upon a corporation which will give a court jurisdiction over it can be made only in the state where it resides by the law of its creation, or in a state in which it is actually doing business at the time of service, in the manner prescribed by the statutes of that state or of the United States. The question as to what kind of business by a foreign corporation within a state will justify a finding that it is engaged in business therein, and validate a service upon its agent, has been very thoroughly and elaborately discussed in the circuit courts of the United States, and the general consensus of opinion is that the corporation must transact within the state some substantial part of its ordinary business by its officers or agents appointed and selected for that purpose, and that the transaction of an isolated business act is not the carrying on or doing business in a state.” In D. & H. Canal Co. v. Mahlenbrock, 63 N. J. Law (34 Vr.) 281, the provisions of our Corporation act requiring foreign corporations to appoint resident agents in this state and perform certain other duties there named before transacting any business in this state, -is held not to refer to a single isolated transaction. While other provisions of the act measurably 'control the conclusions there stated, the opinion is in harmony with the views stated in the eases above cited.

As already stated, the only question here involved is whether this court has at this time acquired jurisdiction over the foreign corporation by service of subpoena ad respondendum. That question must be answered in the negative.

It is unnecessanr and inappropriate to here consider whether any part of the relief sought by complainant can be finally granted upon the theory that the present suit is a proceeding in rem or quasi m rem, as no proceedings have yet been taken for the purpose of acquiring jurisdiction over the foreign corporation as an absent or non-resident defendant under the rules authorizing that course in proceedings in rem.

The result is that an order must be advised setting aside the service of process on the foreign corporation and revoking the order for the corporation to answer the amended bill.


text:
    Thomas J. Jarman v. Abraham Freeman.
    [Submitted January 22d, 1912.
    Determined March 22d, 1912.]
    1. Where a deed grants the use in common of a passageway extending on one side of the lot granted between the lot granted and the land of the grantor, as a private way for travel and drainage, and the grantor reserves the fee, the grantee cannot enlarge the easement to accommodate land other than that to which it is* appurtenant, and has only the right to enjoy the estate granted, while the grantor, who owns the fee in the way, and whose rights are not founded in grant, may use his property for any purpose consistent with the full enjoyment of the easement, but he cannot extend the use of his way to other lands so as to impair the easement which he has granted.
    2. A use of a way by one under a claim of right at such times as his convenience and business needs require for the purpose of hauling goods to and from a building is' such a continued use as will in time ripen into a prescriptive right, and the use, if unauthorized, invades a clear legal property right calling for the exercise of injunctive relief.
    Final Fearing on pleadings and proof.

      Messrs. Chandler & Robertson, for the complainant.

      Messrs. Bourgeois & Coulomb, for the defendant.
   Leaming, V. C.

The facts of this case, as they appeared at the return of the order to show cause for a preliminary injunction, are set forth in 78 N. J. Eq. (8 Buch.) 464. A preliminary injunction was denied because it was then thought that complainant’s conduct had induced defendant to erect his’ warehouse at the end of a certain alley in the belief that he would be permitted by complainant to use the alley, which use the bill sought to restrain. But for that aspect of the ease a preliminary injunction would have been, issued at that time.

At final hearing it has been established as'a fact that defendant erected his warehouse with full knowledge that complainant- would contest any effort upon defendant’s part to use the alley for the purpose of hauling goods to and from that building.

A further examination of the views expressed by me at the preliminary hearing touching the rights of the parties, in the absence of the equitable bar referred to, confirms the views then expressed. My conclusion then was that the owner of the servient tenement could not, against the owner of the dominant tenement, extend the use of the way to lands other than those for which the way was established hy, the terms of the grant, when such added use should be operative to interfere with the full enjoyment of the easement in behalf of the dominant tenement or to increase the burden of repair which accompanied the easement.

It is now manifest that the continued use of the alley by defendant for the purpose of hauling goods to and from his warehouse will not only interfere with the full enjoyment by complainant of the easement as contemplated by the grant, but will also necessarily increase his burden of- repair. The grant to complainant vests in him the right to use the alley as a way for the benefit-of his adjacent land at any time;' this right is in common with, and is to be exercised in connectipn with, a similar right of use of che alley by the owner of the fee for the benefit of his adjacent land. It follows that the right of use of the alley thus vested 'in complainant is only restricted by the similar right of the owner of the-fee, and any extension of the use of the alley hy the owner of the fee for the benefit of other lands is necessarily operative as a restriction of complainant’s privileges coextensive with the magnitude of the extension, and the burden of repair is in like manner increased by the extended use.

Complainant’s legal title to the easement is not denied, and the nature or extent of the rights incident to such an easement is not in substantial dispute. The answer asserts as a defence acquiescence on the part of complainant and avers that the use ' of the alley by defendant will not interfere with its use by complainant or add to the burden'of its maintenance. The evidence offered to sustain- the defence of acquiescence fails to disclose any acquiescence in the use of the alley for any such purposes as the same is now being used by defendant. The claim that defendant’s use of the alley will not disturb complainant’s use or add to the burden of maintenance also fails. It is clearly unnecessary for the evidence to disclose any specific instance in which defendant has excluded complainant from the, use of the alley at a time when complainant has desired to use it. The evidence discloses that the use which defendant has been making of the alley, and whieh he proposes to continue to make of it, is under claim, of right to use it in such manner and at such times as Ms convenience and business needs shall occasion for the purpose of hauling goods to and from Ms warehouse. Such use is a continuous use and will in time ripen into a prescriptive right. This class of invasions or threatened invasions of & clear legal property right calls for the exercise of the preventive powers of this court.

I will advise that an injunction issue restraining defendant from using the alley in question for the purpose of hauling goods to and from his warehouse.


text:
    William C. Supplee et al. v. Therese Cohen et al.
    [ Submitted March 23d, 1912.
    Determined April 11th, 1912.]
    1. Where a contract for the sale of a city lot provided that the vendors agreed that they would provide that no building should be erected on the lot adjoining the premises sold, on the west, nearer than three feet from the party line, such covenant was not fulfilled by the deed of conveyance, since the vendors’ agreement to “so provide” could only be fulfilled by perpetuating the covenant in any deed of conveyance the vendors should thereafter-make of the lot adjoining on the west.

      2. Where a contract for the sale of a city lot contained a covenant by the vendors that they would provide that no building should be erected on the next west adjoining lot nearer than three feet from the party line, the purchasers were entitled to rely on the vendors’ engagement to protect them against the erection of a building on the adjoining lot, in violation of such restriction, without any new engagement for that purpose being made at the time of the passing of the title, in the absence of any evidence that at the time of settlement either party had understood that the covenant was waived.
    3. Where defendants covenanted that no building should be erected on a lot adjoining the property sold nearer than three feet from the party line, the term “building” was not limited to the main body of the structure erected on such adjoining lot, but included overhanging bay windows and eaves.
    4. Where, in a suit to enforce a building restriction prohibiting the erection of any building nearer than three feet from the party line of the lot 'conveyed, there was no evidence that either of the parties to the covenant knew that a similar covenant, with reference to another tract of land in the city, had received a popular construction that it did not apply to overhanging windows and eaves, or that they knew that any buildings on such other tract had been so located with bay windows and eaves overhanging the restricted space in such tract, which was three-fourths of a mile distant from the property in question, complainants’ right to enforce the covenant was not affected by such popular construction placed on the covenant as to the other property.
    5. Complainants’ rights under a covenant prohibiting the construction of any building on the adjoining property nearer than three feet from the party line, are property rights in the restricted space and enforceable by injunction, without proof of special damage for violation thereof.
    6. Defendants sold to complainants a city lot with a covenant providing that no building should be erected on the next lot adjoining on the west nearer than three feet from the party line. Defendants having commenced the construction of a building on the adjoining lot, notice forbidding encroachment of a hay window and eaves over the line was served before the building was erected, and a bill to enforce the covenant promptly filed. Defendants completed the building and filed a cross-hill to reform the covenant, in which they were not successful.—Held, that complainants should not be deprived of a mandatory injunction, requiring the defendants to remove so much of the bay windows and eaves as extended into the restricted space, on the ground that the damage that would be suffered by them in vacating such space vrould be disproportionate to the benefits accruing to the complainants.
    Final hearing on hill for injunction.
    The bill seeks the enforcement of a restrictive building covenant, The covenant which complainants seek to enforce is found in a written agreement wherein defendants agreed to sell to complainant William C. Supplee a certain house and lot, and among other things covenanted that no building should be erected on vendors’ adjoining lot nearer than three feet from the line which separated the two lots. Pursuant to the agreement of sale defendants subsequently conveyed the lot to complainant Helen E. Supplee, who is the wife of William C. Supplee, the conveyance being made to the wife at the request of her husband. In the deed of conveyance no covenant was inserted touching the engagement of defendants not to build within three feet of the line between the property sold and the property retained. Subsequently defendant Therese Cohen erected a dwelling upon the lot retained by her in such manner that while the foundations and main body of the buildings are three feet distant from the division line between the two lots, an overhanging bay window and the eaves of the house project to a point less than three feet from that line. The decree now sought is to' compel defendants to remove the overhanging bay window and eaves, or to remove the building so that no part of the eaves and bay window will be nearer than three feet from 'the division line between the two lots.

      Mr. James H. Hayes, Jr., and Mr. TJlysses 0. Styron, for the complainants.

      Messrs. Bourgeois & Coulomb, for the defendants.
   Leaming, V. C.

The covenant contained in the agreement of sale, which covenant complainants now seek to enforce, is as follows:

“And further, the parties of the first part do hereby agree to and with the party of the second part that they shall so provide that no building shall be erected upon the lot adjoining said premises on the west, nearer than three feet from the party line between said lots.”

Defendants urge that the deed of .conveyance which was made pursuant to the agreement of sale was necessarily operative to discharge all obligations arising under the agreement of sale. .1 am unable to adopt that view. That effect should only be given to such stipulations in the agreement of sale as could be appropriately discharged by the deed of conveyance. By the agreement of sale defendants agreed to “so provide” that no building should be erected on the adjoining lot in the manner stated. That engagement could not he fulfilled or its fulfillment appropriately secured by a clause to the same effect in the deed of conveyance to complainant. The engagement was, in effect, that defendants would not at any time build upon the adjoining lot contrary to the manner specified, and would prevent their granlees from so doing. A covenant in the deed of conveyance to complainants would not have been operative to prevent a grantee of defendants’ adjoining lot from building contrary to the covenant, for a grantee of that lot would not he charged by the record with notice of a covenant in complainants’ deed. An appropriate method of perpetuating the covenant -contained in the agreement of sale would he by a covenant in any deed of conveyance defendants should thereafter make of the adjoining lot owned by them. I am convinced that complainants were entitled to rely upon defendants’ engagement to protect them against the erection of adjoining buildings without any new engagement for that purpose being made at the time of the settlement, in the absence of any evidence to the effect that at the settlement either party understood that the covenant in question was waived.

B]f a cross-bill defendants seek to have the covenant in question reformed, alleging that the real agreement between the parties touching the location of any building thereafter to be built on defendants’ lot was with reference to the main body of such building and did not include a restriction against an overhanging bajr window or eaves. The evidence is clearly insufficient to justify a decree of reformation.

It is also contended in behalf of defendants that even though the covenant should not he reformed the restriction touching the distance the “building” should be erected'from the line must he understood to refer to the main body of the building and not to overhanging bay windows or eaves. I am unable to adopt that view. The covenant is that no building shall be erected nearer than three feet from the division line. The language used is entirely clear and exact and certain in its meaning, and in the absence of some circumstance sufficient to disclose that the parties used the language adopted.by them in a restricted sense tire covenant must be understood in accordance with the natural import of the language used. When a person covenants that he will not erect a building within a specified distance from the line between his property and the adjoining property he necessarily covenants that he will not erect any part of a building within the distance named; to read into such a covenant a reservation that it shall apply only to the main body of the building and shall not apply to projecting bay windows or eaves is clearly without justification unless circumstances exist to warrant the conclusion that such a reservation was intended by the parties. Covenants of this nature are uniformly recognized as designed to afford a given space for air, light' and view; an occupancy of the restricted space in the manner already stated is necessarily a violation of the terms and spirit of the covenant. As hereinbefore stated the natural import of the language “that no building shall be erected * * * nearer than three feet from the party line” is that no part of a building shall be so erected. That view has heretofore received the sanction of thk court and of the court of errors and appeals in Hemsley v. Marlborough Hotel Co., 65 N. J. Eq. (20 Dick.) 167; S. C., 68 N. J. Eq. (2 Robb.) 596, 601; Wahl v. Stoy, 72 N. J. Eq. (2 Buch.) 607. In these cases bay windows which overhung a restrictive building line were regarded as violations of a covenant that no building should be erected nearer than a specified distance from a given line.

It is also urged in behalf of defendants that circumstances exist which disclose that the parties to the covenant here in question used the term “building” with the mutual understanding that bay windows and eaves projecting over the restricted space were not to be regarded as in violation of the covenant. As already stated, the evidence failed to disclose any mistake of tha parties in the execution of the agreement. But'it is urged that certain other similar covenants in Atlantic City have been heretofore treated as not applying to bay windows and eaves which overhang restricted spaces, and the claim is made that it must now be held that the present parties adopted the language of the covenant here in question with a like purpose in mind. En support of this contention it is shown that a certain tract of land known as the “Chelsea Tract” has been subjected to a covenant requiring all buildings to be located not less than five feet from the side lines of lots, and on that tract there existed at the date of the covenant here in question one hundred and ninety-five buildings; of these ninety-eight had bay windows projecting over the restricted spaces and one hundred and eighty-six had eaves so projecting. There is no evidence in this case that establishes the fact that either of the parties to the present covenant knew that the Chelsea covenant had received a popular construction of the nature referred to, or- even knew that any buildings on that tract were so located that bay windows or eaves overhung the restricted spaces. The part of the Chelsea tract nearest the premises here in question is three-quarters of a mile distant. I think it is entirely clear that the covenant here in question can be in no way affected by any possible popular construction which the Chelsea property holders may have given to a similar covenant. It would seem that the most that can be said touching the Chelsea covenant is that the property holders in that district have not seen fit to enforce it.

It is also contended in behalf of defendants that complainants are not materially injured by the encroachment complained of. The projecting bay window extends but seventeen inches and the eaves but sixteen inches over the restricted space. The distance from the nearest part of defendants’ building to complainants’ building is thirteen feet eight inches. Under these circumstances, it is obvious that no considerable damage is being suffered by complainants by reason of the encroachments. But in cases of this class it is unnecessary for complainants to prove that damage is sustained by them. Kirkpatrick v. Peshine, 24 N. J. Eq. (9 C. E. Gr.) 206, 216; Morrow v. Hasselman, 69 N. J. Eq. (3 Robb.) 612, 615. The rights which accrue to complainants under a covenant of this nature are property rights in the restricted space. It may be that at this time the space between the two buildings is adequate to afford such light, air and view that complainants suffer no present inconvenience; but complainants may desire at some future time to utilize that part of their lot, now vacant, between their present building and the line which separates the two lots. In such case the present encroachment of defendants’ building over the restricted space would clearly be operative 'to materially lessen the enjoyment by complainants of the light, air and view which they would enjoy with defendants’ building located pursuant to the covenant. The continued occupanej'' by defendants of the restricted space will, in time, ripen into an adverse right. Without the relief afforded by the remedial process of this court complainants could only prevent defendants’ use of the restricted space ripening into a right by successive suits at law for damages essentially nominal in amount. It is for these reasons that a court of equity is obliged to afford relief in a case of this nature even though no considerable damage is presently suffered by complainants.

Nor can it he here appropriately contended by defendants that the damages which will he suffered by them in vacating the part of the restricted space which they now occupy will he disproportionate to the benefits accruing to complainants. Notice forbidding the encroachment was served on defendants by complainants before the building was erected and the present bill was .promptly filed. Defendants have completed their building, wqll imowing of complainants’ claim and in the face of the present bill. A preliminary writ of injunction was refused because of a cross-bill filed by defendants to reform the covenant. Under these circumstances, defendants cannot now reasonably complain of the loss they may sustain in being compelled to com-, ply with their covenant.

At the time -the hill was filed another structure had been erected by defendants upon the festrieted space in the nature of a “spite” fence some ten feet in height. Defendants now concede that that structure-was in violation of the covenant and have removed it. The writ to he issued need not, therefore, have reference to that structure.

I will adtise a decree for a mandatory writ of injunction requiring defendants to remove so much of the hay window and eaves of their house as are less than three feet from the division line which separates the lots of complainants and defendants.


text:
    Louis Rosenthal et al. v. Max Blatt.
    [Submitted April 4th, 1912.
    Decided May 2d, 1912.]
    1. Under equitable principles, the chancery court will not enjoin alleged unfair competition by the nse of a trade-name similar to complainants’ name “London Shop,” so far as complainants seek to benefit from a suggestion by their name that their stores are connected with a London store, which is untrue.
    2. In a suit to restrain the use of the trade-name “I’age of London,” on the ground that its use amounts to unfair competition with complainants’ business conducted under the name “London Shop,” evidence held not to show that the use of its name tended to deceive the public, so as to be unfair competition.
    3. .There can be no exclusive right to the use of the word “London” as a trade-name.
    4. The test of whether the use of a trade-name amounts to unfair competition is whether the public is likely to be deceived thereby.
    On bill, &c., for injunction.

      Mr. Joseph B. Perslcie and Messrs. Bolte cG Sooy, for the complainants.

      Mr. Eugene Bchwinghamrncr and Mr. Clarence Ij. Goklenberg, for the defendant.
   Leaming, V. C.

Complainants are owners of a business conducted by them as partners in three certain stores fronting on the. boardwalk in Atlantic City, the business in each store being conducted imder the trade-name of “London Shop.” The business so conducted is that of retail stores for the sale of gentlemen’s furnishing-goods, bats, caps and ladies’ millinery, ' Since the establishment of complainants’ ’business under the name stated, defendant has established a store, fronting Qn the boardwalk, the business of which is being conducted under the trade-name of “Page of London.” The business conducted by defendant is similar to that of complainants. Complainants now seek an injunction to prevent defendant from using the name “Page of London” in connection with defendant’s business, alleging as a ground for relief that the name “London Shop” used by complainants has become favorably known to the public as complainants’ trade-name, and that the use of the name “Page of London” by defendant is operative to deceive the public as to the identity of the several stores and to lead patrons of complainants’ business to make purchases from defendant’s store under the-belief that that store is one of the stores operated by complainants.

On the application for a preliminary injunction, I summarized my view of the law controlling controversies of this class as follows:

“This court may appropriately protect a.complainant against unfair competition when it is found that the defendant is conducting a business in such manner that there exists upon the part of defendant express or implied representations that the business conducted by defendant is that of complainant. The reputation and good will which á man acquires are property rights which are entitled to protection against wrongful invasion, and the pxrblic is entitled,..to protection against fraud. A'trade-name appropriately used to designate a particular business of certain individuals will, in consequence, be protected. See 28 Am. & Eng. Encycl. L. (2d ed.) 345, 348. The present inquiry is, therefore, whether defendants have adopted a trade-name so nearly resembling the trade-name of complainant as to deceive the public and. injure complainant. It is manifest that the extent of resemblance of the names used is not the sole criterion. A name quite similar may be so used as not to deceive or injure; a name quite dissimilar may be used in such manner as to deceive and injure.”

Preliminary relief was refused because it did not then appear with sufficient certainty that complainants’ rights had been or would be materially invaded to justify this court in granting a preliminary injunction.

It will be observed at once that the names “London Shop” .and “Page of London” bear no resemblance as names except such as arises by the use of the word “London” in each name. It should also be stated that the sign “Page of London” as used on the store of defendant contains no details of form or arrangement in imitation of the signs used on the stores of complainants, and the word “London” is not made more conspicuous in any of the signs used by either party than the remaining words of the signs; nor is there any similarity of design in the small engraving used by defendant and complainants respectively on their stationery and to mark their merchandise.- Such infringement of complainants’ rights as may exist is from the use of the word “London” in the manner already stated. Nor is there any evidence from which it can be properly determined that the trade-name adopted bj' defendant .was by him selected because of any possible resemblance it might bear to the trade-name used by complainants. The common desire of the parties to use the word “London” appears to arise from a belief that its use gives character to the business of a haberdasher through the suggestion that the store is in some way connected with London or is especially equipped with London goods. Neither the stores of complainants nor the store of defendant are in any sense London stores and neither have substantial London connections. Their sole proprietors are residents of Atlantic City. They are, in fact, Atlantic City stores, but handle, in part, goods which have been imported from London. Oh well-established equitable principles it is manifest that to whatever extent complainants may seek to benefit from any suggestion which may be contained in their trade-name to the effect that their stores, are branches of a London store this court can lend them no assistance.

But assuming that the name “London Shop” as used by complainants is wholly free from any criticism of the nature suggested, I am unable to conclude that defendant has entered the field of unfair competition in the use of the name “Page of London.” As already stated, there is no resemblance between the two names used by the respective parties, except such as arises from the common use of the word “London;” and the only danger of confusion from the use of the two names appears to me to arise from the possibility of a person observing the word “London” and paying little or no attention to the remaining part of either trade-name.

Complainants have received telephonic messages and mail relating to purchases made at defendant’s store, and have received by express and otherwise goods which have been purchased at defendant’s store accompanied with requests for their exchange or a return of the purchase price. In one instance a customer at one of the stores of complainants was sent to another store of complainants for a specific article and the customer went to defendant’s store by mistake. These occurrences disclose some confusion which it is urged is to be attributed to a similarity of the two trade-names. It is quite possible that the confusion referred to has arisen from the use of the word “London” as a part of the trade-name of both contending parties; but such Confusion is, in my judgment, to be ’more appropriately attributed to extreme carelessness and inattention upon the part of the customers who have made the specific errors referred to. Complainants have no property right to the exclusive use of the word “London” in connection with their business. The}r are only entitled to protection against unfair competition by defendant ; they are entitled to be protected against defendant passing his goods or business as complainants’ goods or business, and the test is whether or not the public is likely to be deceived. Concrete instances of confusion which can only be appropriately attributed to extreme carelessness or inattention on the part of customers are clearly inadequate to establish a similitude which does not in fact exist. I am unable to believe that the name “Page of London,” used in the manner in which it is being used by defendant, is operative to deceive or mislead any reasonable person by reason of its resemblance to the name “London Shop,” or to improperly divert complainants’ trade.

I will advise an order dismissing the bill.