text:
    James A. Simmons v. Lima Oil Company et al.
    [Decided February 24th, 1906.]
    1. Under a contract whereby complainant was to receive one-third of the profits that came to a firm from a mining venture, a bill to compel a corporation, to which the firm transferred its interest, subject to the rights of the complainant, to transfer to him one-third of the interest received by it from the firm, was insufficient where it failed to show that the venture had resulted in a profit, or that it had been completed.
    2. A bill to compel an accounting by a joint adventurer with the complainant, under a contract by.which the complainant was to receive one-third of the profit of the adventure, must show that ihe joint venture had reached determination and profit had been made, or that the venture had reached a point where the defendant had been reimbursed its outlay, so that a profit was being currently made, or that defendant was misconducting itself with respect to the business and could be held to have legally perpetrated a fraud on complainant.
    3. Whore, on a joint venture by complainant and a firm, stock in certain corporations was acquired, and complainant became a general manager thereof, where the firm transfers its interest in the corporations to another corporation, the fact that the latter so voted the stock as to eliminate the complainant as director and general manager of the original corporations, is not such misconduct as entitles the complainant to an accounting.
    On demurrer to bill of complaint. Heard on bill and demurrer.

      This is a bill filed by James A. Simmons against the Lima Oil Company and David J. Kelly, its president.
    Briefly stated, the bill charges that Brown & Wells, who had interests in oil lands in Indian territory, agreed with Simmons to give him one-third of all the profits in cash and in stock that came to Brown & Wells for his co-operation in financing and managing the interests in the oil properties above mentioned. That Brown & Wells, in furtherance of the plans for the development of the oil lands controlled by them, caused to be incorporated, under the laws of New York, a corporation known as the New York and Osage Oil Company, and further caused to be incorporated, under the laws of South Dakota, a corporation called the Beservation Oil Company, and that to these two companies, respectively, there was conveyed by Brown & Wells all of their interests in the oil lands alluded to* and as part of the consideration for said conveyances Brown & Wells received $700,000 of the capital stock of each of the two companies above named. It appears that some part of each of these two blocks of stock was to be returned to the companies for sale to furnish working capital, but how much is not shown.
    The bill further charges that subsequently the Lima Oil Company was incorporated in the State of New Jersey, and
    “negotiations were had between the said Brown & Wells and the Lima Oil Company looking to the taking over, directly or indirectly, by said company of the said New York and Osage Oil Company, and the Reservation Oil Company, or the capital stocks thereof, by said Lima Oil Company, and the continuation of the said enterprise in which Brown & Wells and your orator and said corporations had been theretofore engaged by said Lima Oil Company and under its direction and control.”
    On the 39th of June, 1904, the complainant wrote a letter to Brown & Wells, which they transmitted to the Lima Oil Comp an j, in which he said:
    “Referring to the agreement which I have with your firm concerning the profits * * * in connection with the New York and Osage and the Reservation Oil companies operating in the Osage reservation, I would.say that I am willing that the Lima Oil Company, or any other responsible company or individual, may be substituted for Brown & Wells to carry out the terms of our agreement, so long as my interests in the two companies are in no way affected as to the division of profits, * * * as called for in our agreement.”
    hi transmitting this letter to the Lima Oil Company, Brown & Wells agreed to dispose of all their interests in the corporations named,
    “on the understanding that you will take our place in the transaction and will carry out all of our obligations in guaranteeing the return of money for sale of stock, also the contract with Mr. Simmons and others, of all which you have knowledge.”
    In transmitting the stock to the Lima Oil Company, Brown & Wells state, in the letters accompanying the same, that it is turned over “subject to the claims of Mr. Simmons,” and “with the understanding that you will protect the interests of Mr. Simmons in the remainder.”
    The complainant subsequently demanded of the Lima Oil Company that it transfer to him the one-third of the $700,000 of stock of each of the two companies, namely, the New York and Osage company and the Reservation company.
    The prayer is for an injunction preventing the Lima Oil Company from transferring or in any way disposing of the $700,000 of the capital stock of each of the two companies just named “until they shall have assigned, transferred and set over unto your orator the one-third portion” thereof, and that the said defendant “be further decreed to account your orator for any and all profits derived by them during their holding of the aforesaid capital stocks of the said two corporations.”
    To this bill the defendant, the Lima Oil Company, filed a demurrer.

      Messrs. Northrop & Griffiths, for the complainant.

      Mr. Gilbert Collins (with whom was Mr. Julian C. Harrison, of the New York bar), for the defendant Lima Oil Company.
   Garrison, Y. C.

(after stating facts).

The complainant must charge in his bill all those f acts which are essential to entitle him to relief, and such charges must be certain, clear and positive. Brokaw v. Brokaw’s Executors, 41 N. J. Eq. (14. Stew.) 215 (Vice-Chancellor Van Fleet, 1886). Although, the bill in this suit is not so drawn as to make it clearly appear, I think it fairly inferable from the charges in the bill that the complainant seeks relief upon one of two> theories :

I. One claim to relief would seem to be that because of his contract with Brown & Wells, and the facts attending the carrying out thereof, he became entitled to one-third of the capital stock of the New York company and of the Reservation company issued to Brown & Wells, and has the right to demand and receive such one-third of such stock from the Lima Oil Company, the defendant, to which company Brown & Wells transferred the stocks of the New York and Reservation companies, subject to complainant’s rights.

II. The second theory is that complainant and Brown & Wells were engaged in a joint venture in the exploitation of these oil properties owned by Brown & Wells, for assisting in the financing and managing of which complainant was to receive one-third of any profit accruing therefrom; that at a certain stage in the carrjdng out of this undertaking Brown & Wells, with the concurrence of the complainant, retired from the joint venture, and the Lima Oil Company became substituted in their place; that the complainant thereafter continued as a joint adventurer, with respect to this subject-matter, with the Lima Oil Company, and as such is entitled to call that company to account for his interest therein.

It becomes necessary to examine the charges of the bill to determine whether essential facts appear to' support either of these two theories.

I. By virtue of the agreement between the complainant and Brown & Wells he became entitled to one-third of any profit in cash and in stock that came to Brown & Wells in this matter. If the complainant shows that the joint venture, as carried on by him and Brown & Wells, had resulted in a profit, and that the Lima Oil Company took over the assets of the joint venture subject to complainant’s rights therein, he undoubtedly would be entitled to demand and receive from the Lima Oil Company one-third of any such profit.

The bill; however, does not charge that the joint venture, at the time that Brown & Wells retired therefrom, had resulted in a profit. It appears from the bill that Brown & Wells purchased certain interests in oil lands, but at what price is not stated; that thereafter they incorporated the New York company and the Reservation company; that they received certain moneys from purchasers of the stock of these two. companies, but were under obligation to these purchasers to return their money to them under certain undisclosed conditions. From these two companies Brown & Wells received seven thousand shares of stock, respectively, for the transfer of their oil interests to said companies, but it also appears that they were not to retain for their own use these fourteen thousand shares of stock, since it was understood that a large proportion of these shares was to be returned to the treasury of each company for sale for the company’s benefit.

It may also< be gathered from the bill that each of these companies was actively engaged in producing oil, which necessarily implies the use of machinery and equipment, but it does not appear from what source the money to purchase the same came.

At the time that Brown & Wells retired from the joint venture they received from the Lima Oil Company $6,000, or security for the payment to them of $6,000, together with one thousand shares of stock of each of the two before-mentioned companies. For lack of proper data it is utterly impossible to determine whether at that stage of the transaction Brown & Wells had profited or had lost by the venture. The Lima Oil Company is shown to have either paid $6,000, or obligated itself so to do, ■and to have received six thousand shares of stock of each of tire two companies formed by Brown & Wells. It also assumed the obligation of Brown & Wells to return to purchasers of stock of the two underlying companies their purchase-money under undisclosed conditions. Here, likewise, it is impossible, for lack of facts, to determine whether, thus far, the Lima Oil Company has made a profit or suffered a loss.

The complainant in his bill charges that he

“* * * under his contract with Brown & Wells, herein set forth, was entitled at any and all times to demand, ask for and receive a transfer of one-third thereof [all the stock received by Brown & Wells from the two underlying companies] for his own use and benefit.”

This, obviously, is a conclusion of law by the pleader, and is an incorrect conclusion, because, by the terms of the contract, he was only entitled to one-third of any profit, and was not entitled to one-third of any gross amount received by Brown & Wells.

Furthermore, it does not appear from any charges in the bill that this joint venture had reached a completion at the time of the retirement of Brown & Wells therefrom, and if it had not, then, of course, the complainant was not entitled to the transfer of. any of the capital of the joint venture, but only to one-third of any current profits.

So far from the facts alleged in the bill showing a completed undertaking at the time mentioned, I think it quite clearly appears that the contrary was the case, and that the undertaking originally begun by Brown & Wells and the complainant was intended to be carried on by the Lima Oil Company and the complainant. If this latter view of the facts is the correct one—and I shall deal with it more at length under the next head—then, of course, the complainant is not entitled to do more than call for an accounting with respect to current profits to which he may be entitled.

For these reasons, I find that the bill cannot be sustained upon the first theory suggested above.

II. The other theory available to the complainant is that the Lima Oil Company, having taken Brown & Wells’ place in the joint venture, is accountable to the complainant, as Brown & Wells would have' been had they remained in their original position.

I think the facts charged bear out the theory that there was not a winding up and disposition of the joint assets to the Lima Oil Company, but a substitution of that company in the place of Brown & Wells in the original undertaking. The complainant, in a letter to Brown & Wells, dated June 29th, 1904, says:

“I am willing that the Lima Oil Company * * * may be substituted for Brown & Wells to carry out the terms of our agreement, so long as my interests in the two companies are in no way affected as to the division of profits, * * * as called for in our agreement.”

A copy of this letter is contained in a letter written by Brown & Wells to the Lima Oil Company, in the course of which they say:

“We will dispose of all our interest in the New York and Osage Oil Company, and the Reservation company, on the understanding that you will take our place in the transaction and will carry out all of our obligations in guaranteeing return of money for sale of stock, also the contract with Hr. Simmons and others, of all which you have knowledge.”

That the complainant understood that this was the effect of the transaction is apparent from the charge in his bill that the purpose of the negotiations between Brown & Wells and the Lima Oil Company was to provide for

“the continuation of the said enterprise in which Brown & Wells and your orator and said corporations had been theretofore engaged, by said Lima Oil Company, and under its direction and control.”

The bill further sets forth that after the retirement of Brown & Wells the complainant continued to co-operate in the management of the enterprise as a director and general manager of each of tire underlying companies.

The legal effect of the facts charged is that the complainant and the Lima Oil Company are joint adventurers with respect to this enterprise.

Since it is not shown that the complainant has contributed any money whatever, or has any interest in the capital employed, his rights are solely those of a joint adventurer in tire profits arising out of the exploitation of the properties of the other parties. His rights with respect to this matter would appear to be any one of three things, dependent upon conditions:

If the joint venture had reached a termination and a profit had been made, he would be entitled to one-third of the profit; if the joint venture had reached a point where the other parties who put in the money had been reimbursed their outlay, so that a profit was being currently made, he would be entitled at reasonable times (since there is no specified time in the contract) to his one-third of the current .profit; if neither of these two contingencies had happened, but the other party was misconducting himself with respect to this business, and could be held to be legally perpetrating a fraud upon the complainant, the latter would have a right to have the court intervene and -wind up the business, and if a profit resulted therefrom decree the complainants share thereof.

A careful analysis of the bill does not disclose any allegations sufficient to sustain complainants right to relief under any one of the three contingencies stated. As has been before pointed out, there is nothing in the bill to show that the joint venture has been completed, and, in fact, every charge in the bill seems to refute such a conclusion. There are no facts charged in the hill from which it may be properly inferred that those who put the money into this business have been repaid, so that the business is now earning a profit. There is the following charge in the bill:

“That the said corporations [the New York company and the Reservation company] were being profitably managed and conducted, and producing oil in good quantities, and developing their plants and properties in a manner to greatly enhance the value of their capital stock and to the profit and benefit of their stockholders.”

But this does not cast any light upon the essential inquiry as to whether those who financed the enterprise—namely, in the first place, Brown & Wells, and afterwards the Lima Oil Company—had been repaid or had been secured for their investment, so that what is now being made is a profit.

It is very often the case that a concern is making more money than it is expending, and so, considering income and outgo> is profitable; but it would not be proper to therefore determine that to those who originally financed it a profit had necessarily accrued, because unless enough profit on operation has been made to repay the original investment no profit in this sense of the w'ord has accrued upon the investment.

In default of charges of fact, it cannot be learned from this bill whether the Lima Oil Company has received from this enterprise more than it has paid or obligated itself to pay with respect thereto'. It appears from the bill that it has paid or obligated itself to pay $6,000 in cash and some sums of money, amount not disclosed, to stockholders upon certain conditions which are undisclosed. It certainly cannot, therefore, be said that there is any charge in this bill to sustain a finding that there is any current profit in tire joint' venture for which the complainant is entitled to call the defendant to account.

The third, contingency suggested as one entitling the complainant to relief, if the facts justify it, was that the joint adventurer .with the complainant was so conducting tire business as toi deprive the complainant of some rights, or endanger Iris rights therein, or defraud him with respect thereto'. I do not find any charges in tire bill sufficient to sustain the complainant's right to relief upon this contingency. He does not charge that the defendant is mismanaging tire enterprise, or is doing any act in fraud of the complainant. He does not even charge that he has been prevented from obtaining full information concerning the financial conditions surrounding this operation. He does charge that shortly before tire filing of the bill the defendant so voted the stock of the two underlying companies as to eliminate the complainant as director and general manager thereof. While tire complainant, by reason of his contract, was under obligation to' co-operate in the management, I do not think that the defendant is bound to avail itself of complainant's services if it does not see fit to do so. All that the complainant may insist upon is that the enterprise be honestly and properly managed and conducted by its owner, the defendant. The complainant, as has heretofore been pointed out, was not an owner of any part of tire assets of this enterprise; he was merely entitled, in consideration of co-operation, to a share of the profits.

While, as I have before suggested, I think the court would intervene on behalf of this complainant if he showed that the defendant had excluded him from the management and was so managing the property as to defraud the complainant of his rights, it should not interfere unless facts are charged which clearly make it appear that this is the case. I find no such facts charged in this bill.

If the complainant has not shown that the enterprise has reached completion at a profit, or is being currently operated at a profit, or is being managed in fraud of his rights, I do not think he has made out a case entitling him to the relief of account.

The general principles applicable will be found in tire case of Warwick v. Stockton; 55 N. J. Eq. (10 Dick.) 61, which is dissimilar with respect to the matter of accounting, because the contract in that case provided for accounts at stated intervals.

Since I do not find that this bill sufficiently states any facts entitling complainant to relief in equity, the demurrer must be sustained, and I will so advise.


source: Caselaw Access Project

author: ■Garrison, Y. C.

license: Public Domain

text:
    Eugenia S. Graham v. Sarah Spence et al., executors of Gaven Spence, deceased.
    [Decided March 14th. 1906.]
    A bill by a donee to establish a gift alleged that she was a sister of the donor, who was a partner with his father, and that the donor, being conscious of approaching death, verbally gave to the donee his interest in the firm, and that the father, after the donor’s death, and in consideration of the donee refraining from seeking to establish the gift, agreed that the interest of the donor in the firm should become the property of the donee. It did not appear whether the donor died testate or intestate, nor to whom his property passed at his death.—Held, (1) that those who would have been the owners of the property, but for the gift, are necessary parties; (2) in default of proof that the property of the donor passed to his father, the complainant did not show that the father had any property of the decedent which was impressed with a trust in her favor; (3) the contract between the father and the donee was not supported by a consideration, and was not enforceable as a family settlement,

      Tiearcl on bill and demurrer.
    This is a bill filed by Eugenia S. Graham against the executors of Gaven Spence, her father.
    She charges that she was the sister of Millard Spence, and that he was in partnership with his father and one Rutan, trading under the name of Gaven Spence & Company; that Millard Spence, on the day of his death, March 4th, 1886,
    “in full consciousness of his approaching death, gave, by word of mouth, to your oratrix, all his personal property of whatsoever kind, and specifically mentioned his interest in the said partnership of Gaven Spence & Oo. * ® * That Gaven Spence proceeded to act in accordance with and in acquiescence of said gift,”
    and, together with her uncle, Andrew D. Bloodgood, acting on her behalf, computed the interest of Millard Spence in the firm of Gaven Spence & Company", and found that it “was $2,893.23, which was the amount determined by the said Gaven Spence and the said Andrew D. Bloodgood as belonging to your oratrix.”
    She charges that thereupon, •
    “the said Gaven Spence proposed * * * that he would pay to .your oratrix the sum of ninety-three dollars and twenty-three cents immediately, and that he would keep invested the remaining sum of two thousand eight hundred dollars in the partnership of Gaven Spence & Co., and that he would pay to your oratrix, upon the said amount of two thousand eight hundred dollars, at the rate of five per cent, per annum, payable quarterly, which said agreement was accepted by your oratrix,
    and that up to and including November, 1903, Gaven Spence paid her interest in accordance with the agreement, excepting that he did not pay her the full amount of interest agreed upon.
    She charges that Gaven Spence died on the 31st of January, 1904, and that the defendants are his executors. She filed -her claim with the executors, and they served a notice upon her that her claim was disputed.
    The ninth and tenth paragraphs of the bill axe as follows:
    “9. And your oratrix further shows that while it was the intention and desire of the said Millard Spence that all his property should belong to your oratrix, yet your oratrix does not believe that said intention and desire was carried out by the said Millard Spence in such a manner and way as will permit your oratrix to establish a devise of his said property to your oratrix. And no effort has been made by your oratrix to so establish such devise. Tour oratrix, however, insists and charges that the said Gaven Spence, knowing full well the desire of his said son, Millard Spence, to give to your oratrix all his personal property, and feeling the moral obligation on his part to comply with such desire and to carry out to the fullest extent the details of such gift, and in consideration of your oratrix refraining from establishing a devise by the said Millard Spence to your oratrix, did acquiesce and agree that the said property of the said Millard Spence should become the property of your oratrix.
    “10. And your oratrix insists and charges that the said Gaven Spence, influenced by the said moral obligation and the said consideration, did act and conduct himself in such a manner as to bind himself, not only morally, but also legally, to in no. way dispute the rights of your oratrix in and to the property so as aforesaid given by the said Millard Spence to your oratrix.”
    Her prayer is that the executors be decreed to pay her “the sum of two thousand eight hundred dollars, and account for the investment of the said sum of two thousand eight hundred dollars since the fourth .of March, 1889.”

      Mr. Charles T. Glen, for the demurrants.

      Mr. George IT. IT. Porter, for the complainant.
   ■Garrison, Y. C.

(after stating facts).

Certain of the causes of demurrer deny facts charged in the bill or allege facts not charged in the bill. This is improper pleading, constituting a speaking demurrer, which cannot be sustained. Teeter v. Veitch, 66 N. J. Eq. (21 Dick.) 162 (at p. 171) (Vice-Chancellor Grey, 1904). Such improper causes of demurrer will therefore not be considered.

There are, however, in the demurrer causes properly stated which duly raise issues to be herein decided.

The complainant must charge in his bill all those facts which are essential to entitle him to relief, and such charges must be certain, clear and positive. Brokaw v. Brokaw's Executors, 41 N. J. Eq. (14 Stew.) 215 (Vice-Chancellor Van Fleet, 1886).

I have failed to find in this bill any certain, clear and positive charges of fact which make out a case of equitable jurisdiction. The parties to this suit are Eugenia S. Graham and the executors of Gaven Spence, deceased. The complainant charges that Millard Spence, her brother, on the day of his death, March 4th, 1886, “in full consciousness of his approaching death, gave, by word of mouth, to your oratrix all his personal property of whatever land,” and specifically mentioned “his interest” in a certain partnership named Gaven Spence & Company, which partnership was composed of her brother, Millard Spence; her father, Gaven Spence, and one Rutan. The bill traces back the origin of whatever claim she may have to this transaction.

If her claim is that the facts charged constitute a good gift inter vivos, or a valid donatio mortis causa, and she has not received, as she should have received, the subject-matter of the gift, then she must establish the same as against those who, but for the gift, would in law be the owners of the property. Such parties, at least, must be defendants in any suit brought for such a purpose. Since the subject-matter of the gift was wholly personal property, and the giver is dead, the title to such personal property would, but for the gift, have passed to his executor, if he made a will, or to his administrator, if he did not. Therefore, if she claimed a valid gift of either description, and was not vested with possession of the subject-matter of the gift, she must seek to obtain the same by appropriate proceedings against the personal representatives of the deceased donor alone, or in conjunction with the persons having physical possession of the property alleged to have been given.

Whether the alleged donor in this case died testate or intestate does not appear in the bill. Who his beneficiaries were, if he constituted such by will, does not appear-. To whom the property would pass in law if he failed to make a will does not appear, because there is no statement of his living relatives at the time of his death. For aught that appears, he may have left a widow and children. It is quite clear, therefore, that, apart from any other considerations, there is not sufficient data set forth in this bill to permit the complainant to seek to establish a gift, with respect to this subject-matter, as against these defendants alone, without joining those who, but for the alleged gift, would have been the owners of the subject-matter given.

Another difficulty in this respect will be found in those charges of the bill which set forth that the complainant, who must be supposed to know more about the situation than anyone else, does not herself believe that the alleged donor did make a valid gift of either description to her.

If the purpose of the pleader was not to set forth a valid gift of either character from Millard Spence to the complainant, but was to set forth such facts as would charge that the property of a decedent passed under circumstances such as would impress the property with a trust in favor of another—namely, in this case, this complainant—there are not sufficient allegations to establish such a situation.

I will not stop to cite or analyze the cases which hold that, under certain circumstances, those to whom the property of a dead man has passed by will, and perhaps by operation of law, take the same subject to certain expressed agreements or contracts which constitute them trustees with respect to such property. I shall not stop to determine whether the cases go far enough to impress such a trust upon personal property passing by operation of law. I shall assume, for the purpose of this consideration, that the law is most favorable to the contention of the complainant. But, even so, the complainant has not alleged such facts as bring her within the rule. There is nothing in the bill to show that the property owned by Millard Spence at the time of his death went by operation of law to his father. As has been before stated, for aught that appears, he may have left a widow and children, and the father may mot have had any interest whatever in his property, or, for anything that appears in the bill, he may have left a will, under the terms of which this property was disposed of. So that, even if it be conceded that by the expressions used by the dying donor, in the presence of his father, and the silence of the father, and his subsequent conduct with respect to the property, some rights were vested in the complainant, if it were shown that the father was the next of kin of the son, and that no will was made by the son, the complainant has entirely failed to set forth a basis for the application of the suggested rule. She has entirely failed to show that the father was the next of kin of the son, and that the son left no will.

In default of charges that the property of the son, which is claimed to have had a trust imposed upon it, passed by operation of law to the father, the complainant has not shown herself entitled to relief in this suit, even if the law be as alie asserts that it is.

Eor similar reasons it is impossible to support the complainant’s argument that this bill sets out a good cause of action upon tire theory of a “family arrangement” or “family settlement.” Equity will undoubtedly go a long way to effectuate such an arrangement or settlement;, and seizes upon very slight consideration as sufficient to support such.

1 shall here again assume the law to be most favorable to the complainant, but I do not find any charges in this bill sufficient to sustain it upon this theory. The nearest approach to any such charge is that contained in the tenth paragraph, as follows:

“That Gaven Spence, * * * in consideration of your oratrix refraining from establishing a devise by the said Millard Spence to your oratrix, did acquiesce and agree that the said property of the said Millard Spence should become the property of your oratrix.”

As has been before pointed out, there are no charges in the bill showing that Gaven Spence had any right, title-or interest in the property of Millard Spence. In default of such charges there is an entire absence in this bill of anything to show that Gaven Spence had any right to dispose, by contract or otherwise, of the property of Millard Spence, and that any rights could arise in favor of-this complainant by Gaven Spence’s acquiescence and agreement that the property of Millard Spence should become her property.

She nowhere charges that, because of any claim she might have against the estate of Millard Spence, or against Millard Spence, or with respect to his property, Gaven Spence agreed to pay her any sum of money, or to keep any sum of money invested for her, if she would forbear to press such claim against the estate of Millard Spence.

Without some such charge as this, the contract which she pleads, and which has been set out in full, as made between her and Gaven Spence, is not shown by this bill to have any consideratiori whatever to support it. Such contract appears to be a nudum pactum, a bare promise to pay her $2,800, or to keep $2,800 invested for her, and presumably to account to her for and pay her the principal.

Whether her rights under such contract, if there were consideration, should be enforced at law or in equity, I do not stop to consider.

T do not think it useful to further elaborate upon this branch of the case since I fail to find any proper charges in this bill of any consideration to support the agreement pleaded.

I do not think that proper practice in the administration of equity would be conserved by requiring a defendant to answer a bill such as this one. There is such an entire lack of certain, clear and positive charges of fact making out a case in behalf of the complainant that the defendant may truthfully claim not to know what case she is called upon to meet.

The demurrer must be sustained, and I will so advise.


author: Garrison, V. C.

text:
    Annie Osiel v. Semah Osiel.
    [Decided March 30th, 1906.]
    1. Where, in a suit for divorce, there is no evidence that the petitioner ever resided in this state, and it appears that after the defendant had committed bigamy in this state, and while he was stopping here with the second woman petitioner came from England, where she had been living with her parents, to aid in the prosecution of her husband for bigamy, the New Jersey courts have no jurisdiction of her 'action for divorce, neither party being a resident of this state.
    2. It is the duty of all solicitors making applications in cases in forma pauperis to see to it that applicants, so far as they are able by investigation to determine, are entitled to favorable consideration, and that all of the 'facts calling for the exercise of discretion in behalf of such applicants exist.

      On petition for divorce.

      Messrs, llampson cG Parry, for the petitioner.
   Garrison, V. C.

This is an ex parle divorce case, and the only question in it is as to jurisdiction.

The petitioner, at the time of the institution of the proceedings', although she states in her petition that she was a resident of New Jersey, does not show by any proofs that she ever resided in New Jersey. The only evidence concerning her is by one of the witnesses, who quotes the defendant as having said that he had called upon her in Brooklyn, N. Y., after he had contracted the second marriage, next alluded to.

The proofs show that the defendant was residing in Brooklyn, N. Y., apparently with his wife, the petitioner, although this is not definitely proven. He came to New Jersey and on the 14th day of August, 1899, went through a ceremony of marriage with another woman. He represented to the justice of the peace in Newark, N. J., where the second marriage was contracted, That he was a resident of the State of New Jersey, but tire proofs utterly fail to show that he had, up to that time, resided here, and tire other proofs concerning residence fail to show that he ever intended to reside here.

The testimony of the second woman is that immediately after the marriage they went to live with her mother, their intention being to stay there two weeks, and then depart upon a hone3rnroon journey to Spain, upon returning from which they intended to reside in New Jersey. During these two weeks the petitioner learned of her husband’s whereabouts and came to the house of the mother of the second’ woman that he had married, whereupon he fled. He was gone several years, when he was apprehended in the State of New York, extradited to New Jersey, and sentenced to state prison for four years. While in state prison this action was brought.

Since the petitioner utterly fails to show that she was a resident, and since I hold that the above facts do not prove that he was a resident at the time of the filing of the petition, I find that there is no jurisdiction, and the petition must be dismissed.

There is another matter disclosed in this case which should be referred to, although it has had no effect upon the determination thereof. The petitioner in this suit obtained permission to prosecute the same in forma pauperis upon an affidavit sworn to by her, in which she deposes that she is “of the city of Newark, county of Essex and State of New Jersey.” The proofs fail to show that she ever at any time in her life lived in the State of New Jersey, and they do show that at the time -she made the'affidavit she was living with her parents kt or near London, England, and only came to this country at the request of the police officials of Newark, N. J., to aid in the prosecution of her. husband, who had been indicted for bigamy.

It should not be necessary to point out to the bar and to those who seek by means of applications of this sort to litigate their cases in this state without expense to themselves, that the utmost good faith should be observed. I have not considered, and do not think that it is necessary to consider, whether a non-resident would be favored under our laws by permission to sue without expense, or whether—conceding that such would be the case— greater scrutiny of applications of non-residents should be made.

It is sufficient to reiterate the obvious statement that entire openness and honesty should characterize applications calling for the exercise of this discretion. This application was not characterized as such, but, either purposely or through carelessness, contains an untruth.

It is the desire of the court—and I am not now speaking individually-—that all members of the bar who have anything to do with applications in cases in forma pauperis, shall see to it that the applicant, so far as they are able by investigation to determine, is entitled to favorable consideration, and that all of the facts calling for the exercise of discretion in behalf of such applicant exist.

It is for the purpose of bringing this matter to the attention of the bar that this memorandum is published.


author: Garrison, Y. C.

text:
    Manchester Building and Loan Association v. Phillippe Geyer et al.
    [.Decided April 21st, 1906.]
    Where a corporation by its by-laws designates some particular officer as its agent to receive moneys due it, the members of that association are charged with knowledge of such regulation or by-law, and payment to any other officer or person can only bind the corporation if it actually receives the money. If, however, notwithstanding such by-law or regulation, the corporation, by its conduct, authorizes, or, by its action, ratifies, payment to some other than the designated agent, it will be bound. But to thus bind the corporation by estoppel or on the ground that it has authorized or ratified, it must, in each instance, be shown that the directors thereof knew of the conduct of the officers and acquiesced in or ratified it passively or actively.
    Heard on bill, answer, replication and proofs in open court.
    Hnder the above title two other cases, identical as to the points involved and between the same parties, were tried. In disposing of them in this opinion, they will be referred to as if on.e case.
    This is a bill to foreclose a mortgage given by Phillippe Geyer to the Manchester Building and Loan Association. It is charged in the bill that the defendant has defaulted in the payment of dues and interest, in violation of the covenants of the mortgage. The defence, so far as it concerns the matter to be decided, is that there was no default in this respect.

      Mr. Jacob Willard Da Toe, for the complainant.

      Mr. Robert P. Geyer, for Phillippe Geyer.
   Garrison, Y. C.

The sole question to be determined in this ease, at this time, is whether $336 was paid by Phillippe Geyer to the Manchester Building and Loan Association, in February, 1905.

Geyer became a member of this association in the year 1896. The headquarters of the association were at Haledon, N. J. Its by-laws provide (page 11, section 6) : “The board of directors shall meet on the second Monday evening of each and every month, at 8 o’clock, * * * for the purpose of receiving from the shareholders their monthly dues.” Page 10, section 5, relating to the secretary, provides: “He shall receive all moneys from the members and others, and without delay pay the same over to the treasurer, taking his receipt therefor.” It is also provided that the secretary shall give bond.

When Geyer became a member of this association, he went to Haledon upon the meeting nights and paid his dues to the secretary. Afterwards, because he lacked the time to go to Haledon for this purpose, he paid them to William H. Belcher, who was the president of the association. Belcher had an office in Paterson, N. J., and after 1903 the secretary of the association established a Paterson office for the association in Belcher’s suite of offices, and advertised upon the annual statements sent to the members that “tire secretary is always at the Paterson office on the Saturday evening preceding the second Monday of each month.”

Geyer made no payments to anyone from December, 1903, to February, 1905. Geyer had a mortgage on property owned by Belcher, and in February, 1905, Belcher sent for Geyer to come to his office at Paterson to receive the money due upon this mortgage. Geyer at that time, according to his testimony, received from Belcher $600, which was the amount due upon this mortgage. He asked Belcher how much he owed the building-association, and was told $336, whereupon he gave to Belcher, from the money Belcher had just paid him, $336. Belcher absconded and did not pay the money to the building and loan association.

The contention of Geyer is that this money should be credited to him by tire building and loan association!

There is no occasion for the citation of authorities, because the principles are entirely settled. It is merely a matter of the proper application thereof to the facts proven. Without attempting to precisely define the law in this regard, it may be briefly stated to be as follows: Where a corporation by its by-laws designates some particular officer as its agent to receive moneys due it, the members of that association are charged with knowledge of such regulation or by-law, and payment to any other officer or person can only bind the corporation if it actually receives the money. If, however, notwithstanding such by-law or regulation, the corporation, by its conduct, authorizes, or, by its action, ratifies, payment to some other tiran tire designated agent, it will be bound.

A course of conduct pursued for a long time by officers of a corporation, if it is known to the corporation, will bind it, even though such conduct is in violation of the by-laws.

But to thus bind the corporation by estoppel or on the ground that it has authorized or ratified, it must, in each instance, be shown that tire directors thereof knew of the conduct of the officers and acquiesced in or ratified it passively or actively.

In the case at bar there is no evidence of any character to show that the directors of this building and loan association had any knowledge whatever of the conduct of Belcher and Geyer with respect to payments of Geyer’s dues. The only two officers of the association who are shown to have any knowledge whatever concerning the matter are Belcher, the president, and Allee, the secretary. The reason given by Geyer for paying Belcher was that he had not time to go up to Haledon to the monthly meetings to- make his payments.

I think it entirely clear from the proofs in this ease that Belcher was his agent, and was not authorized by the association to act for it in this matter in this way, and that his conduct in so acting was not ratified by the association through its directors.

It is not necessary to dwell upon the necessity of holding that each shareholder in these mutual enterprises must be held to a strict observance of the by-laws in order that every shareholder’s rights may be preserved. Nor is it necessary-to cite authorities for the proposition that where one of two persons must suffer, if they are each equally innocent, that one must be held to endure the loss whose lack of care occasioned it.

In this case the association does not appear to have lacked any care; whereas Geyer, undoubtedly, by paying money to Belcher instead of going to the meetings himself and paying it, or paying it to the secretary, was not careful to observe the rules binding him and all other members of tire association.

A further consideration making against the contention of Geyer is that whatever might be held with respect to monthly dues paid to an officer not authorized by the by-laws to receive the same, it does not follow that the payment of a large sum for back dues would be governed by the same rule. Even in a case where the board of directors might be held to have ratified or approved the payment of monthly dues as they were payable to some officer other than the one designated by their by-laws, it would not follow that such authorization or approval would be effective with respect to a large accumulation of back dues paid to the same person. It might well be that a board of directors were' willing to be responsible for a small sum of monthly dues collected by one of its members or by some officer of the association other than the designated one, without being willing to be responsible for an accumulated amount of dues to be thus collected by such unauthorized person.

. My conclusion, therefore, is that the payment of $336 is not' to be credited to Geyer. There will be a reference to a master to ascertain and report the amount due.


text:
    Sam Barna et al. v. Konstantine Kirczow et al.
    [Decided April 24th, 1906.]
    1, A bill by persons claiming to be trustees of a religious association incorporated under “An act to incorporate associations not for pecuniary profit,” providing that the business of the association shall be conducted by trustees elected by the members, who shall hold office for one year, and until their successors shall be elected, which alleges that other persons claiming to be trustees threaten to refuse to the congregation admission to the church building, states a cause for equitable relief, the members of the association being beneficiaries for whom the property is held in trust.
    2. Where a proceeding, whatever its form, only involves a controversy as to which of two sets of rival officers of a corporation is legally elected, the jurisdiction to determine the controversy is exclusively in a court of law, and quo warranto is the proper remedy to test the question where no other statutory method has been substituted therefor.
    The bill in this suit was filed on the 10th of January, 1906. It alleged, that the complainants, Barna and two others, were members in good, standing of the Little Russian Greek Catholic Church of S.t. Peter and St. Paul of Jersey City, an association incorporated under, an act entitled “An act to incorporate associations not for pecuniary profit;” that the three complainants, together with two others, were elected trustees of said church in the year 1904 to serve for the year 1905, and that the two' other trustees, who were not complainants, had withdrawn from the association and left the State of New Jersey; that the priest of the church had given notice therein, upon certain days preceding December 29th, 1905, of a meeting of the members of the church to be held on the last-named date for the purpose of electing trustees and officers of the church for the year 1906; that upon the evening of December 29th, 1905, this meeting was held, but that there were two factions in the church, and they raised such a disturbance that the police officers broke up the meeting before it had transacted any business.
    The two factions are named from their respective leaders, the Barna faction being represented by the complainants and the Kirczow faction by the defendants. The allegation of the bill is that the Kirczow faction raised the disturbance which resulted in the interference of the police with the meeting of December 29th; that Kirczow and his followers, upon the evening of January 3d, 1906, attempted to hold a meeting in the basement of the church, but since such meeting had not been called in the customary manner, by the announcement of the priest, they were denied admittance to the church and withdrew to a hall in the vicinity and there pretended to hold an election. The bill then charges that the persons voted for at the meeting of January 3d, held by the Kirczow faction, were not legally chosen or elected to their offices; that the meeting was not properly called or held, and that those that attended constituted but a small minority of the congregation, and were not qualified to vote for offices or hold them; that they had not contributed to the support of the association, and were not members of the association; that on Sunday, January 7th, 1906, Kirczow and his adherents, alleging that they had been elected at the meeting held by them on January 3d, forcibly and illegally took possession of the church and collected the moneys therein contributed, and refused on demand to deliver the same to the hold-over officers, as aforesaid; that the persons elected at the Kirczow meeting hold themselves out as officers, and have destroyed and removed the locks and fastenings upon the gateway and entrance to the church, its halls and meeting-rooms, and replaced them with other locks, of which they keep the keys, and are barring out tire members of the association therefrom; that on the 7th of January, 1906, the priest, in accordance with the custom, announced from the pulpit that on Januáry 10th, at eight o’clock in the evening, a meeting of the congregation would be held, in place of the abortive meeting of December 29th, for the purpose of electing trustees and officers of the church, and that Kirczow and the officers elected at his meeting threatened to refuse admission to the congregation on that evening to the hall of the church.
    An injunction was prayed restraining the Kirczow officers or faction from barring the officers and members of the church from the edifice, and commanding them to deliver to the holdover officers the keys to the locks and fastenings placed by them upon tire church.'
    Upon this bill an order to show cause was granted, returnable on the 15th of January, with ad interim restraint against anyone hindering or preventing the access of the priest and the members of the congregation to the church upon any day, dates or occasions when, according to the customary use of the church, it should be open to the aforesaid persons.
    Nothing further was done with respect to this order to show cause, but subsequently the defendants filed their answer, together with a cross-bill. This answer admits that the complainants are members of the church, and that it is an association incorporated under the act to incorporate associations not for pecuniary profit. It denies that the persons elected in 1904 for the year 1905 were the duly elected trustees of the association, and denies that the officiating priest is the regularly appointed priest. It admits that no by-laws or rules of conduct had, up to the 3d of 'January, 1906, been adopted by the association. It admits that the meeting of December 29th was broken up before any action was taken, but places tire blame for the disorder upon the Barn a faction. It recites the happenings of January 3d, and alleges that at a hall in the vicinity of the church an election was duly held, at which duly qualified members of the association. elected tire defendants trustees and officers of the association. It admits that Kirczow changed the locks upon the church and took possession, but recites that, as a trustee and president, duly elected at the meeting held January 3d, he had a right to change the fastenings and to take possession. It admits that the priest, on January 7th, 1906, announced a meeting to be held January 10th for the election of trustees and officers, but insists that he did so contrary to the instructions of ihe defendants, who are the trustees and officers.
    The cross-bill, among other tilings, charges that on the 30th of December tbe priest was requested to call a meeting of the association for January 3d; that he did not do so, and notice was given by circulars of such a meeting, and that on the evening of January 3d members gathered in front of the church, which was locked, and thereupon they went to a hall in the vicinity of the church and held a meeting, at which the persons named (who are those heretofore referred to as of the Kirezow faction) were elected to the various offices in the association; that thereafter, and on Sunday, January 7th, the priest of the church announced that a meeting for the purpose of holding an election of officers and trustees would be held on January 10th; that Kirezow attended this meeting and called it to order, and that a motion at such meeting was made to ratify and approve the minutes of the meeting of January 3d and the election held upon that day, and that this motion was carried, as was a motion to adjourn; that Barna, the leader of the other faction,-was then elected the chairman of the meeting by those remaining, and that those remaining then held an election for all of the said offices and filled each, and that the officers thus elected threatened to eject the officers elected by the Kirezow faction, or to interfere with them in the performance of their duties; that the Barna faction, through its officers, are collecting moneys due the church and interfering with the collector appointed by the Kirezow faction; that tire real estate belonging to the association is of great value, being worth at least $25,000; that there is a mortgage of $12,000 against -it, and several judgments against the church, and that interest on the overdue debts is now accumulating, and the dues and other moneys receivable by the association to pay its debts well be uncollected or diverted, and that this will cause the failure of the purpose, for which the association was formed, to the great detriment of the members of the same; that the two bodies claiming to be trustees have on numerous occasions come into personal conflict in the church edifice, in the presence of the congregation, and that many members, in consequence, have left the church, and others threaten to leave, and that the contributions and regular payment of dues are falling off because of dissatisfaction with the existing situation.

      The prayer of the cross-bill is that the officers and trustees elected at the meeting of January 10th may be restrained from acting and performing the duties of their offices, and may be restrained from interfering with the defendants in the performance of their duties as officers, and from interfering with the property belonging to the association, and with the collecting of the dues and other moneys payable to the association.
    To this answer a replication was filed by the complainants, and to the cross-bill an answer was filed. It is unnecessary to recite the allegations of the answer to the cross-bill in any detail. It denies that the meeting of January 3d, held by the Kirczow faction, was valid, and charges that the meeting of January 10th, in the hall of the church, was regularly called in the customary manner, and was a valid meeting, and that their officers chosen thereat were elected by a majority of the people there present, and that such majority were members of the church or association, and should be so declared.

      Mr. Herbert G. Gilson and Mr. James H. Ha/nill, for the complainants.

      Mr. Harry B. Broclchnrst and Mr. Adolf L. Engellce, for the defendants.
   Garrison, Y. C.

(after stating facts).

Although the purpose of the incorporation of this association was to- maintain a place of religious worship, and the use to which it puts its money and property is religious, it is not incorporated under any act regulating religious bodies, and I know of no statutory law of this state relating to religious corporations, or of any church law of any specific denomination or creed, which bears upon the situation presented in this suit.

The association is incorporated as an association not for pecuniary profit, and is now regulated by the laws of 1898. P. L. 1898 p. b&2. The pertinent provisions of that act are contained in the fourth section (P. L. 1898 p. J2S et seq.), and are as follows:

“The business of the association shall be conducted by the trustees, subject to the by-laws which shall be passed by the members; the trustees shall be elected by the members and shall hold office for one year, or such term as the by-laws provide, and until their successors shall be elected; a majority of the trustees must be residents of this state.”

This association, never passed any by-laws, and never had any written constitution, by-laws or other rules of any kind.

The charges in the bill filed in this suit made a case cognizable in equity. If the defendants were closing this church building against the members of the association, who were cestui que trusteni for whom the property was held in trust, a proper case for the intervention of equity arose. Morgan v. Rose, 22 N. J. Eq. (7 C. E. Gr.) 583; Whitecar v. Michenor, 37 N. J. Eq. (10 Stew.) 6; Everett v. Trustees of Church, 53 N. J. Eq. (8 Dick.) 500.

The proofs, however, fail to sustain the charges-of the bill in respect to any prevention by the defendants of the free use of the church building at all-proper times by the members of the association. The proofs do show that the persons elected at the meeting held on the 3d of January, 1906, denominated the “Kirczow faction,” changed the locks on the building and took possession of the property; and the real purpose of the bill undoubtedly was to attack the validity of the election of these officers.

The allegations of the answer of these officers elected at the meeting of January 3d and the charges in their cross-bill affirm the validity of the election of January 3d, and, in addition, set out the facts concerning the election held on January 10th, and charge that their own election was ratified and confirmed at the meeting of January 10th, and that the action taken at that meeting, which purported to be an election at which adherents of the Barna faction were chosen for the same offices, was invalid.

The replication to this answer and the answer to the cross-bill deny the claims of the Kirczow faction that its officers were elected, and affirm- the validity of the election of the adherents of the Barna faction.

It is thus apparent that the real issue which the pleadings seek to raise, and which each of the two parties is earnestly desirous ,of having this court determine, is which of the two sets of trustees and officers was duly elected.

This corporation has property of considerable value, owning a church building which, with the land, is estimated to be worth in the neighborhood of $30,000. It is encumbered with a mortgage, and there are some judgments against it. The sole source of revenue is from the voluntary contributions. The collection and disbursements of these moneys is under the direction and control of the board of trustees. While there is the doubt at present existing as to which is the legal body of trustees, there is grave danger that these voluntary contributions will diminish greatly, if not entirely cease. , Cessation of income from this source leaves this property entirely without means of being kept up, and will result in its loss to tire association. A situation is therefore presented in which any court having jurisdiction would speedily give relief. I have therefore endeavored to ascertain by careful investigation and consideration whether there is any head of equity jurisdiction which would enable the court. of chancery to decide the real question sought to be settled in this suit.

That question, undoubtedly, is solely one as to tire validity of the election of officers of an incorporated association.

I can find no warrant for a court of equity deciding a case in which this is the sole issue. There are cases in which a court of equity may determine this question when it is incidental to the determination of a case of equitable cognizance. Johnston v. Jones, 23 N. J. Eq. (8 C. E. Gr.) 216.

But where the proceeding—whatever may be its form—-is nothing more nor less than a controversy as to which of two sets of rival officers of a corporation are its legally elected representatives, the jurisdiction to determine the controversy is exclusively in a court of law. Kean v. Union Water Co., 52 N. J. Eq. (7 Dick.) 813 (Court of Errors and Appeals, 1894), and cases therein cited. See, also, Miller v. English, 6 N. J. Eq. (2 Halst.) 304.

If the corporation is one to which the General Corporation act applies, then application may be made to the supreme court under tire forty-second section of the act.

Quo warranto is the proper remedy where no other statutory method has been substituted therefor. State v. Crowell, 9 N. J. Law (4 Halst.) 390.

Legislation which, by its terms, vested jurisdiction in the court of chancery to determine questions concerning the validity of corporate elections, was declared nugatory because unconstitutional. Goldstein v. Ewing, 62 N. J. Eq. (17 Dick.) 69.

And the court of chancery there again affirms the doctrine that the power to adjudicate upon the validity of elections of private corporations is solely in the supreme court.

I feel constrained, therefore, to hold that the court of chancery has no jurisdiction to determine which of the two sets of officers are the duly elected representatives of this incorporated association.

Since I find that the charges of the bill, which, if sustained, would, as above stated, have made out a ease of equitable cognizance, were not sustained by the proofs, the bill must be dismissed, with costs, as must also the cross-bill.

Because, as has before been pointed out, the cestui que trustent of this property will undoubtedly suffer grievously, and may lose the property on account of the warring factions and the rival claimants to office, T hesitated for some time before concluding to dismiss the bill. Neither side will contribute its voluntary offerings to those whom it claims have no title to act as collectors or disbursers of the funds. A sititation has therefore arisen in this corporation bringing it, perhaps, within the principle dealt with in Sternberg v. Wolff, 56 N. J. Eq. (11 Dick.) 389, and the cases cited therein, so that it might be proper to appoint a receiver to collect and disburse the moneys pending a determination of the rival claims to office. But since there is nothing left in this case to decide, and therefore there could not be herein any appointment of a receiver pendente lite, any such application could be better dealt with if originated by a new bill filed by those seeking such relief.

I will advise a decree as above stated.


text:
    Jennie G. Provost v. Winfield Provost.
    [Decided May 5th, 1906.]
    1. Where the original separation between husband and wife was not a desertion on the husband’s part, it could only be turned into desertion by the wife in good faith demanding of the husband a resumption of the marital relationship and the refusal of the husband to accede thereto.
    2. A wife cannot establish desertion on the husband’s part by proof that he refuses to comply with her demands relative to his habits and manner of supporting her, her duty being to accept the situation that her husband is able to maintain.
    On petition for divorce. Heard upon petition, answer and proofs in open court.

      Messrs. Maclcay & Mackay, for the petitioner.

      Mr. George T. Vickers (with whom was Mr. Kellogg, of the New York bar), for the defendant.
   Garrison, Y. C.

This is a petition by Jennie G. Provost against her husband for divorce upon the ground of desertion.

The parties were married October 14th, 1897. This petition was filed June 21st, 1905. The allegation is that the desertion took place on the 7th day of March, 1903. The parties were at that time living at Hackensack, N. J., and upon that day the defendant left Hackensack to go to Darlington, S. C.

The defendant was engaged in the life insurance business and had fallen into dissipated habits, and undoubtedly had frequently been a source of humiliation to his wife. Just before the 7th of March, 1903, his habits led to his discharge from the position which he theretofore had held in the Mutual Life Insurance Company, and the money then due him from that company was paid him. This money, amounting to $400, he divided, giving $200 to his wife and retaining $200.

There is not the slightest evidence that when he left for the south, on this occasion, he intended to desert his wife. The letters which passed between the parties at this time entirely disprove any such contention. They show that the parties were on the most intimate terms; that the wife was sincerely desirous that he should cease his bad habits and resume life with her again, and his communications to her were all along the same line.

I do not think that there was in either of their minds at that time any thought that a desertion or a permanent separation had taken place.

He returned to Hackensack in about a month and constantly saw his wife thereafter for a long period, and undoubtedly endeavored to renew his married life with her. She is a very self-respecting woman, who had always been accustomed to nice surroundings—although not accustomed to luxuries—and she undoubtedly did not wish to take up life with him again until he should have paid all his debts and secured another home as good as the one they had left, and therefore refused to come and live with him under any other conditions.

I do not think it helpful to review the testimony at length or to cite either from it or from the letters. I fail to find anywhere in the case any evidence of any desertion within two years before the filing of the petition in this suit.

If the petitioner, abandoning her original contention of a desertion on the 7th of March, 1903, now contends that the failure of the husband to support her and the children since his return to Hackensack, in April, 1903, constitutes desertion, she cannot succeed in this latter contention. The original separation not being a desertion, it can only be turned into desertion by one party, in good faith, demanding of the other a resumption of the marital relationship and the refusal of the latter to accede thereto. McAllister v. McAllister, 62 Atl. Rep. 1131 (Chancellor Magie, 1906).

So far from tile petitioner showing a demand upon her part for a resumption of the marital relationship and a willingness upon her part to return thereto, all of the evidence shows that she refused to go back to her husband excepting upon the terms formulated by her. No citations are necessary to establish the doctrine that a wife must accept the situation that her husband is able to maintain, and cannot refuse to live with him because of his inability to support her in the way she demands—that is to say, she cannot so do and then claim that he has deserted her because of his non-fulfillment of her demands.

The petition must therefore be dismissed.


author: Magie. Ordinary.

text:
    In the matter of the probate of the will of Martin Nolan, deceased.
    [Argued January 2d, 1906.
    Decided March 27th, 1906.]
    When, in a contest pending in the orphans court, evidence is taken by a master, or by the surrogate, or in open court, and reproduced from stenographer’s notes, a judge of the court, succeeding a predecessor who sat when the evidence was taken, may use it in determining the question presented in the contest.
    On appeal from a decree of the Monmouth county orphans court.

      Mr. Qhauncy H. Beasley, for the appellants.

      Mr. John J. Ely, for the respondents.
   Magie. Ordinary.

This appeal is from a decree of tire Monmonth county orphans court admitting to probate the will of Martin Nolan, deceased, and a codicil thereto. The appellants are Michael M. Nolan and William M. Nolan, two of the heirs-at-law and next of kin of the deceased. The decree below was made after a contest which was inaugurated by a caveat filed by said William M. Nolan.

The transcript discloses that after the return of the citation in the orphans court the matter came on and considerable testimony was taken before Judge Heisley, the judge of the orphans court of Monmouth county. Before the testimony was. completed J udge Heisley resigned, and Judge Foster was appointed in his place. The testimony was completed before him, and he made the decree appealed from.

When the decree came on for hearing before me, counsel for appellants (who was not the counsel for contestant in the court below) moved that I should direct a retrial of the cause in this court. This motion was put on the ground—first, that Judge Foster had considered the proofs which had been taken before Judge Heisley, as well as those taken before him, in determining the question presented, and that there was no1 real trial before the tribunal in which the decree was made.

When a contested case is pending in the orphans court, and testimony has been 'taken by a master, or by the surrogate, and the orphans court judge has died or resigned, it is not open to doubt, in my opinion, that such testimony can be used by his successor in office in disposing of the case. It would be absurd to hold that tire succeeding judge must begin de novo, and direct that all the evidence shall be taken again. When the court, instead of directing the evidence to be taken before a master or before the surrogate, takes it in open court, and the evidence is reproduced from a stenographer’s notes, I have no doubt that. upon the death or resignation of the judge who sat, his successor may use the proofs thus taken in disposing of the issue.

Moreover, it was stated in the argument, and conceded by counsel, that it had been stipulated in open court by the counsel of the contestant and of the proponents, that Judge Foster should read and consider the evidence taken before Judge Heisley, and transcribed from the stenographer’s notes, and use it in determining the contest. It also appears that all the testimony, both that before Judge Heisley and that before Judge Foster, is contained in the transcript sent to this court. The whole matter is before me, and I have no doubt of my power to deal with the appeal upon that evidence. I therefore declined to burden the estate with a retrial for that cause.

The motion was further urged upon the ground that counsel for the contestant in the orphans court (who is one of the appellants) failed, to attend and-cross-examine witnesses on one day. The transcript shows that there was no cross-examination of some witnesses called in rebuttal. If the failure to cross-examine was due to the absence of counsel, and contestant claimed to be injured thereby, he should have sought relief in the orphans court. If it were made to appear in this court that injury to contestant had actually resulted, this court might, perhaps, relieve him by having those witnesses recalled for cross-examination, or otherwise. But there was no ground presented on which it could be adjudged that appellants were in any way injured.

I have therefore considered the case as presented in the ■transcript.

There is much proof that testator was accustomed to-drink intoxicating liquor to excess, and frequently to be so affected thereby as to be incapable of doing business. But there is no evidence that at or about the time of the execution of the will, or afterward, at the time of the execution of the codicil, testator was under the influence of intoxicating liquor. On the contrary, the subscribing witnesses to both instruments (and testator’s physician was one of the witnesses to the codicil) agree in declaring testator to have been sober and capable of engaging in the business of making a testamentary disposition of property. The scrivener, who drew both instruments, at the request and on the instruction of testator, states circumstances which entirely justify his inference that testator possessed, on both, occasions, testamentary capacity.

The evidence in favor of the validity of the will and codicil is so overwhelming that I conclude that the decree below must be affirmed, and as I think appellants had no reasonable cause to contest their validity by this'appeal, I am obliged to order that they pay the costs and expenses of the litigation in this court.


author: Mache, Ordinary.

text:
    In the matter of the collateral inheritance tax on the estate of Simon Rothschild, deceased.
    [Decided April 24th, 1906.]
    1. The exemptions in favor of charitable institutions from the tax directed to be imposed by the Collateral Inheritance Tax law of 1894, cannot be claimed by corporations, although of charitable character, which have obtained their corporate existence ■ under the law of other states, unless they are such as are entitled to exemption under the supplement to that act passed in 1898. The decision in this court in Alfred University v. Eaneoeh, 69 N. J. Eq. 1/70, followed.
    2. A bequest to a corporation, of its debenture bonds, passes property (o the legatee, and the bonds may be assessed at their market value.
    3. Whether a corporation of a foreign state may claim exemption from (he tax under the provision of the supplement of 1898 depends upon whether it has actually acquired corporate powers for purposes and objects which entitle to such exemption, that the legislation under which incorporation was obtained permitted the acquisition of corporate powers for objects which would have exempted, will be of no avail.
    4. When a testator, by his will, passes his residuary estate to his brother, and by a codicil directs him to pay O. D. $1,000 á year for life, and to execute to her an obligation to that effect, the annuity to C. L. was a charge on the residue, and property therein passed, which may be (axed at its present worth.
    On appeal from Monmouth county orphans court.

      Mr. John M. Enright, for the appellant.

      Mr. Edward I). Huffield, assistant attorney-general, for the state.
   Mache, Ordinary.

This is an appeal from an order of the orphans court of Monmouth county affirming the appraisal and assessment of the surrogate of that county in respect to certain legacies given by the will of Simon Rothschild, deceased, a resident of that county, under the provisions of the act entitled “An act to tax intestates’ estates, gifts, legacies, devises and collateral inheritances in certain cases,” approved May 16th, 1894. P. L. ,1B9'4 p. 818.

No objection has been interposed to the jurisdiction of this court to review the order of the orphans court, and such orders have been heretofore reviewed on appeal. Alfred University v. Hancock, 69 N. J. Eq. 470; Hoyt v. Hancock, 65 N. J. Eq. (20 Dick.) 668; In re Vineland Historical Society, 66 N. J. Eg. (21 Hick.) 291.

The assessments complained of relate to impositions of the tax in respect to various legacies given by said will, and appellant’s counsel properly admits that the legatees affected thereby may be divided into three classes.

•One class of such legatees consists of corporations to whom legacies of various amounts are bequeathed, and which, by the stipulation of counsel presented to the orphans court, appear to be charitable institutions, which would be the subject of the exemptions specified in section 1 of the Collateral Inheritance Tax law if they were corporations obtaining their corporate existence and functions under the laws of this state. But it is conceded that each one of them is a corporation of the State of New York, and not of this state. They therefore fall within the doctrine declared in this court in Alfred University v. Hancock, 69 N. J. Eq. 470, which construed the exemption in question as applicable only to charitable institutions created by our laws. The argument of appellant’s counsel is, in this respect, directed to questioning the propriety of that decision, Every court may, doubtless, review and overrule its decisions in previons cases. No decision 'should be overruled except upon the clearest establishment of error, and when the overruling may not do serious wrong. But the decision in the case referred to was made ten years ago. Assessments have, doubtless, since been made upon its doctrine. It ought not to be now overruled except on the clearest grounds. The decision follows pertinent decisions in other states under similar laws, and I find no reason to question its entire accuracy. If erroneous, it must be so pronounced in a reviewing court.

One of this group, “The Hebrew- Benevolent and Orphan Asylum/’ was the legatee, under testator’s will, of four of its own debenture bonds, which had been subscribed for and which had been held by testator. Under the evidence before the orphans court the valuation of these bonds was 'held to be excessive and was reduced to an amount found to be the market value thereof.

But it was contended in the orphans court, and the contention is repeated here, that no assessment could -be made upon this gift. It is insisted that such a gift only released to a debtor-evidences of Ms debt held by his creditor.

What may be taxed under tire Collateral Inheritance Tax law is property which passes by will, if not witliin the exemptions therein specified. The debenture bonds in question were the property of testator. AVhen he bequeathed them to the asylum the property passed from him to it. It might cancel the bonds, and so relieve itself of the obligation they evidenced, or it might probably transfer them to anyone who might be willing to pay their value. In my judgment, the tax upon their value was properly imposed.

One other of the legatees is claimed to> be' exempt because of the provisions contained in the supplement to the Collateral Inheritance Tax act, approved May 15th, 1898. P. L. 1\S98 p. 106. By this act, corporations organized for certain specified objects, whether orgamzed under the laws of this or any other state, axe accorded-exemption from this tax.

The legatee in respect to- which this exemption is claimed is shown to have acquired its corporate existence and powers under an act of the State of New York, the terms of which permitted incorporation for various objects. The acquisition of corporate powers for certain of the permitted objects would probably bring the corporation within the exemption of the supplement. The acquisition of corporate powers for other of the permitted objects would not bring the corporation within the exemption. But the obvious test of exemption is not incorporation under an act permitting incorporation for objects that would exempt, but incorporation for objects that entitle to exemption. An examination of the objects and purposes for which this corporation has acquired its powers does not disclose them to be such as exempt under this legislation.

The remaining question is whether ány property passed to Cora Lindhauer, by said will, which may be taxed under said act.

By the testator’s will all his residuary estate was left to his brotliei', William, unless he predeceased testator, in which case it was left to the children of his brother who should survive testator. By tire second codicil to his will, testator directed his brother, William (unless he should predecease him, or, in that event, his children), to pay to Cora' Lindhauer $1,000 a year during her life, and directed him or them to execute to her a written agreement to the foregoing effect.

In my judgment the gift by this codicil was a charge upon the residuary estate given to his brother if he survived testator (as he did), and his provision for a recognition of the indebtedness was collateral to the charge, and was therefore property which passed by his will to Cora Lindhauer. The property thus passed was an annuity for life, and its value may properly be fixed by a determination of its worth at testator’s decease, considered in the light of the legatee’s probability of life.

All the objections having been found insufficient to produce a reversal, the order appealed from is affirmed.


author: Bergen, Vice-Ordinary.

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    Charles A. Hilyard, appellant, v. James Wood et al., respondents.
    [Decided February 28th, 1906.]
    1. Where the will of a testatrix, written in ink, remained in her possession until her death and was then found with certain parts erased by the use of a lead pencil—Held, that the erasures were made by the testatrix animo revooandi, and the will should be probated with the canceled parts omitted.
    2. Where it cannot be said that a will contest is without merit, an allowance of a counsel fee to a party to the contest is proper.
    On appeal from a decree of the orphans court admitting lo probate the will of Annie R. Wood.

      Mr. George Gilbert, for the appellant.

      Mr. Eclcwrd P. Budd, for the respondents.
   Bergen, Vice-Ordinary.

The contested paper was written in ink, and duly executed by' Annie R. Wood, as and for her last will and testament, November 12th, 1898, and thereafter remained in her possession until her death, January 28th, 1905.

Three days before her death, while confined to her bed, she took from under her pillow some keys, which she handed to her maid, and.- directed her to lock up everything and then give the keys to 'her physician for safekeeping. The drawers of the bureau in which the will was afterward found being already locked, the servant locked the closets in the room and gave the keys to the physician, who retained them until two days after Mrs. Wood’s death, when he gave them to a Mr. Craig, a counselor-at-law, who had represented Mrs. Wood in her lifetime. Mr. Craig, with. Mr. Albert McCully, a brother of Mrs. Wood, and Mr. Gilbert, the proctor of the appellant, went to the late residence of Mrs. Wood, and, finding the drawers of the bureau locked, opened the upper one with one of the keys, and there, among other papers of the deceased, found what appeared to be her last will and testament, it being the paper admitted io probate.

Portions of this will had been erased by drawing pencil lines through three paragraphs, and partly through a fourth. The orphans court of Burlington county decided that the erasures did not amount to a revocation and admitted the will to probate as originally drawn, ignoring the erasures; from that determination this appeal was taken,

The clauses of the will which are entirely erased are the following:

(a) “I give and bequeath to my nephew, Frank Shaw, one thousand dollars.” (6) “X. give and bequeath to my waiting maid, Mary Muss, as a token of my appreciation, of her good qualities and kind attentions, my pastel picture, and five hundred dollars.” (c) “I give and bequeath to my friend, Charles Stokes, of Beverly, New Jersey, all my books.”

The item partially canceled reads as follows:

“I give and bequeath to James Wood, mother Wood’s picture and the gold watch of his brother, my beloved deceased husband.”

The canceling lines of this paragraph begin after the word “picture,” and their effect is to erase all of that part of the paragraph which gave the watch and to leave in force the bequest of the picture.

An examination of the will shows that the erasures were intended to be an effectual cancellation of the parts to which they apply, there being three or more lines drawn through each of the parts intended to be eliminated, and the act to be inferred from the result appearing is an erasure with intent to obliterate the portions subjected to the pencil marks.

The first point raised by the respondents is that it does not appear that the erasures were made by the'testatrix, or in her presence and by her direction and consent, as required by the statute of wills. The testimony shows -that immediately after its execution the will was taken -by Mrs. Wood, and so far as it appears, was never out of her possession nor seen by any other person until after her death, when.it was found, among other papers, in her bureau drawer, locked-with a key kept in her possession while in bed during her last illness, and which, she only committed to the keeping of her physician when approaching death became apparent. This key was given by the physician to the legal adviser of Mrs. Wood, and was never out of his possession until used to open the drawer in which the will was found in its present condition.

Under such circumstances, if a will be found canceled in whole or in part, the presumption is that the alterations were the acts of the testator, done animo camcellcmdi. Smock v Smock, 11 N. J. Eq. (3 Stock.) 156; In re will of Kirkpatrick 22 N. J. Eq. (7 C. E. Gr.) 463; In re will of White, 25 N. J. Eq. (10 C. E. Gr.) 501. There is no evidence in this case which tends in the slightest degree to overthrow ox repel this presumption.

The cancellations being thus chargeable to the testatrix, we must next consider the question, were they made animo revoca/ndi. The respondents insist that as the erasures were made with a pencil instead of ink, they are, prima facie, deliberative, and not final, as would be the presumption if done with ink, and in support of this cite Francis v. Grover, 5 Hare 39. In that case the question arose' on an application for a new trial, the trial court having refused to charge the jury that a pencil line drawn through the words of bequest was, prima, facie, final, and not deliberative. The report of the case throws no light upon, the character of the erasure, and an inspection of it might have justified the court .in submitting the question to a jury. The vice-chancellor hearing the application said that, omitting the case of Mence v. Mence, 18 Ves. 348, it appeared to him that, in certain cases which he mentioned and to which I shall refer, “the learned judges have all considered that a pencil alteration may be final or deliberative, and that from the nature of the act they considered it, prima facie, deliberative, and not final.” The eases cited by the vice-chancellor do not, in. my opinion, warrant so broad a proposition. In Parkin v. Bainbridge, 3 Phillim. 321, parts of the will had been erased with a pencil. ■ The court, in passing upon the question, said: “It is as valid, if it is intended as a cancellation, as if it was in ink, but it is more equivocal as to intention, persons are apt to make pencil marks as memoranda. Till I am better instructed I shall hold them to be equivocal. I shall hold my opinion how I shall decide, if no facts can be alleged on either side.” It did not become necessary for the court to express the opinion thus withheld, because the appearance of the paper justified a presumption that the act was deliberative, and all that was said regarding the prima, facie effect of the pencil marks was obiter. Another case cited was Lavender v. Adams, 1 Add. Ecc. 406, where, after the pencil alterations were made, the testator notified his solicitor that he should have occasion shortly to make some alterations in his will, and the prvma facie force of the pencil alterations was not passed upon, the Gourt holding that from what appeared on the face of the papers, coupled with the testimony, the alterations could not be taken as final. In Edwards v. Astley, 1 Hagg. 493, the alterations were made some in ink and some with pencil, and- the determination was put upon the ground that a presumption was raised that the more durable material would have been used in each case if the act ■was final as to all. While this case approaches closely Francis v. Grover, supra, it is evident that the court was persuaded that the intention of the testator should be gauged in that -ease by the difference in the character of his acts. In Hawkes v. Hawkes, 1 Hagg. 321, the erasures were made partly in ink and partly with a pencil, but the case was controlled by proof of testator’s declarations. Thus in each case to which I have referred, and which was cited in support of the finding in Francis v. Grover, supra, the conclusion was rested upon the character of the act, as shown by the paper, or upon testimony which in each case disclosed the intention of the testator to be deliberative, and not final. ' ' • ■

On the question-whether a pencil erasure is entitled to the same prima facie presumption as if done in ink, Dickinson v. Dickinson, 2 Phillim. 173, is- quite in point. The alterations were in pencil, and on the envelope in which the will was enclosed the testator had written in pencil a bequest to Iris wife. In deciding this case Sir John Nicholl said: “The question is whether probate is tó be given of this paper, as it was originally executed or with the alterations. The alterations being in pencil increases the difficulty. It has been argued from these circumstances that they must be considered as merely deliberative, but there is no doubt that in point of law they must be considered as equally valid as if made in ink, provided the deceased intended them to take effect. Prima facie, it may be supposed, under the circumstances, that the alteration was intended, and as such the paper at least ought to go to proof. I say prima facie because other extrinsic circumstances may hereafter be offered which may show they were only deliberative. * * * The instrument was put away securely in his repository with money and other papers of his concern—it was not at hand as if he was deliberating upon it—his death was not sudden, which confirms the idea that he did mean and intend this paper to operate in its present form.” In Mence v. Mence, supra, the erasures were made with a pencil and their pi’ima facie effect was not questioned on the argument, the court declaring that the cancellation was complete. In Appeal of Tomlinson, 19 Atl. Rep. 482 ; 133 Pa. 245, the court held that “as indicative of the testator’s intent the pencil erasures spoke quite as certainly as if they were in ink.” In re will of White, supra, the seal, as well as a part of the testator’s signature, was torn off; the rest of his signature and the signatures of the witnesses were erased with heavy pencil marks. The ordinary, considering these circumstances, said: “The tearing out of the seal and of part of the signature of the testatrix and the obliteration of the names signed to the will are a cancellation of the will.” This case is the only one reported in this state, so- far as I have been able to discover, which considers the question of cancellation by pencil, but its effect on the precise question is modified by the fact that the seal and a part of the testator’s signature was torn off. In the absence of any positive adjudication of the question-by the courts of this state, I shall hold that if the character of the pencil erasure plainly indicates an intent to obliterate the marked portions, it is, prima facie, as effectual as if done with, ink, and that the difference in the material used creates no stronger presumption in favor of one method than of the other. It is the intent which controls, and in the absence of any evidence other than the paper presented'for probate the testator must be presumed to have intended the pencil erasures to be as final as if done with ink.

The manner in which the erasure is made, whether with ink or pencil, the extent of it, and its effect upon other uncanceled portion's of the will, may prevent the presumption of finality, but such repellant circumstances apply with equal force to ink or pencil cancellations.

In my judgment a clear and distinct erasure made with a pencil is entitled to the same prima, facie consideration as if made with a pen and ink. As was said by Chief-Justice Elliot in Woodfill v. Patton, 76 Ind. 575, “it cannot be any the less a mutilation if the signature is marked out with a pen, pencil or other implement which erases, cancels or obliterates.” In that case the signature was blackened and marked by a common lead pencil.

In the case we are considering the erasures bear every indication of being the final act of the testatrix; repeated lines are drawn through the portions intended to be canceled in a way that clearly indicates an intent to obliterate them. The paper discloses no indication that the act was equivocal, either by marginal notes or interlineations intended to supply the parts erased; omitting the excised portions creates no ambiguity in what remains un canceled, and nothing appears from which a want of finality may be inferred. The prima facie presumption that the acts of the testatrix were final and not deliberative, is strengthened by the testimony from which it appears that Mary Muss, whose legacy was one of those canceled, died more than a year before the testatrix, and as this gift was to a servant as a reward for faithful attentions, and manifestly a personal one, her death removed the object of the bounty and furnishes a good reason for the revocation. The legacy to James Wood was erased in part, so much of .it as gave him the watch of the deceased husband of the testatrix being canceled, while that relating to his mother’s picture was allowed to stand uncanceled, although both gifts were included in the same paragraph. The testimony shows that the watch had been given to another by tire testatrix, and we are justified in the presumption that the testatrix-canceled this gift because-its subject had already-been disposed of by her.

As to the remaining legacies revoked by the cancellations, two in number, it appears that the testatrix had expressed her dissatisfaction with the two legatees, and it is a reasonable inference that she had changed her intentions regarding her bequests to them.

My conclusion is that the erasures were made by the testatrix animo revocandi, and that the decree below should be reversed and the will probated with the canceled parts omitted, it being well settled that the cancellation of a part of a will revokes the legacies canceled, and does not affect the residue of the will.

■ An appeal was also taken ■ from the decree of the orphans court allowing a counsel fee to the respondents. It cannot be said that the contest was without merit, and I am of the opinion that such allowance was proper, and therefore that appeal will be dismissed. ■ ■ .