text:
    Thomas F. McCran, attorney-general, in behalf of the State of New Jersey, informant, v. Western Union Telegraph Company, defendant.
    [Decided March 23d, 1923.]
    1. Mandamus, and not mandatory injunction, is the proper remedy to compel the performance of a public duty enjoined upon a quasipublie corporation by statute.
    2. On hearing upon bill (or information) and answer the facts well pleaded in the answer are to be taken as true.
    3. Defendant in an answer in chancery may aver want of jurisdiction of the court, but proper pleading requires that he pray the same benefit of such averment as he would have been entitled to on demurrer.
    4. On objection made, or of the court’s, own motion, relief will be denied if the court be without jurisdiction of the subject-matter of the suit.
    5. Where complainant’s claim is legal in its nature equity has power to maintain the status quo by injunction pending suit at law to establish such right.
    On final hearing on information and answer.

      Mr. Thomas F. McOran, attorney-general, and Mr. William Nemcorn, assistant attorney-general, for the State of Kew Jersey.

      Messrs. Lindabury, Depue & Faulks and Mr. Josiah Stryker, for the defendant.
   Walker, Chancellor.

So much of the pleadings as are necessary to an understanding of the questions decided, are as follows:

The information sets out that by virtue of an act of the-legislature entitled “An act to incorporate the American Telegraph Company,” approved March 23d, 1859, that company was created a body corporate, subject to the general restrictions and liabilities set forth in “An act concerning corporations,” approved February 14th, 1846, so far as the same were applicable; that the capital stock should represent the telegraph lines, patent rights and other property owned by the companies' called the American Telegraph Company and the Few York and Washington Printing Telegraph Company, each of which companies had a telegraph line running through this and other states; that the company was empowered to construct or purchase, hold, use and maintain any line or lines of electric telegraph, -with the appurtenances, whether -wholly within, or wholly beyond, or partly ■within or partly beyond, the limits of this state, or to purchase or t.o take any lease of or other interest, -legal or equitable, in such line or lines, in whole or in part, of the stocks of any telegraph company, and from time to time to discontinue such line or lines or any part thereof, or to change the routes thereof, or a^ part thereof, to- purchase any patent or patents, or any share thereof, or interest therein * * *, sell, assign, convey, mortgage, lease or otherwise dispose of any of the property held by the company, as the board of directors might from time to time determine; that the company -was authorized to take, hold, use and maintain the lines of telegraph then existing in this state and worked by the said companies named in the second section of the act, and was authorized to erect, construct and maintain, from time to time, the necessary fixtures for the same or any other lines of telegraph over or under any of the public roads, streets and highways, and through, across or under any of the waters within the limits of this state. By the ninth section of the act it was provided:

“That it shall be the duty of the said company, at all proper times, without charge, on the request of any public officer of this state, to transmit (confidentially, if required) messages relating to the public business thereof, and also at all times to assist the public officers of the state by the transmission of intelligence.”

The information further shows that after the incorporation of the American Company it continued to operate lines already existing in this state and owned by the corporations set forth in the second paragraph of its act of incorporation, and extended its lines on the authority thus conferred; and, in compliance with the provision contained in the ninth section, received public messages from public officers and transmitted them over its lines; that the Western Union Telegraph Company, the defendant, incorporated by that name by the legislature of the State of New York in 1856, prior to July 25th, 1866, consolidated with the United States and the American Telegraph Compaines, under which consolidation the Western Union operated the lines of the American Company within the State of New Jersey, receiving and transmitting messages both intrastate and interstate, and assumed the contractual relationship existing between the American Company and the State of New Jersey, under the provisions of section 9 of the act under which it was incorporated, and issued its franks to the public officers of the state for the transmission of messages relating to the public business thereof, not only in the State of New Jersey but also between the points over which the lines of the company were extended, to wit, Boston and Washington, until- on or about the 7th day of November, 1913, when the corporation, without authority therefor, limited its franks thereafter issued, until the 1st day of January, 1922, to messages to be transmitted within -the State of New Jersey; that on November 5th, 1921, the American Telegraph Company filed its certificate, under the provisions of “An act concerning corporations” (Revision of 1896), whereby it dissolved its corporate existence and a certificate of dissolution was issued by the secretary of the state on that date; that notwithstanding such dissolution the Western Union continues to exercise the franchises, privileges and other powers acquired bj'-.it at the time when it consolidated with or absorbed the privileges and franchises and assumed the duties of the American Company, continuing to have, hold, use, exercise and enjoy- the franchise, and other property, of the American Company without legal warrant or authority from this state, and refusing to carry out the contractual obligation entered into by the American Company at the time of its corporation, and assumed by the Western Union, to transmit public messages from public officers, as in the act of its incorporation provided;' that notwithstanding the statutory duty placed upon the American Company, which was absorbed by or consolidated into the Western Union, and assumed by it, the Western Union since January 1st, 1922, has refused to transmit without charge messages delivered by public officers relating to the public business of the state, and still refuses so to do; that the Western Union by the acquisition of the stock of the American Company became obligated to perform the duty imposed upon the American Company and that the refusal upon the part of the former to carry out the terms of- the obligation imposed upon the American Company is contrary to law, equity.and good conscience; that on February 7th, 1922, the attorney-general filed an information of quo warranto in the office of the clerk of the supreme court, praying for an inquiry by what right the Western Union continues to exercise the franchises, privileges and other powers acquired by it at the time when it consolidated or absorbed the privileges and franchises and duties of the American Company, and by what right they refuse to carry out the contractual obligation entered into by the American Company, and that during the pendency of said suit, and, until the determination thereof, the Western Union should be restrained from refusing to receive and transmit public messages from public officers without charge therefor.

The prayer of the information is for a mandatory injunction to compel the Western Union to continue, the service to the state officers which it assumed and carried on as above set out.

The answer of the Western Union admits that the American Company, after its incorporation and until, June 14th, 1866, continued to operate the telegraph lines previously owned by the corporation mentioned in the second paragraph of the original act of incorporation, and that between those-dates the lines of the American Company were extended on the authority conferred by the act; that it has no knowledge or information sufficient to form a belief as to whether the American Company received public messages from public officials and transmitted them over its lines in compliance with the provisions contained in section 9 of said act and in accordance with the contract entered • into between the state and the corporation at the time of the passage of the act; that on February 27th, 1866, it consolidated with the United States Telegraph Company, a corporation organized under the laws of New York by authority of the legislature of that state; that the American Company was in no way involved in, or connected with, that consolidation; that on June 12th, 1866, it made an agreement with the American Company (a copy of which is annexed to the answer), under and by virtue of which the American Company granted, leased and conveyed to the Western Union the right to take the possession, use, management and control of all the lines of telegraph, owned, leased, operated or controlled by the American Company, wherever situated, also all wires, materials, grants, property and right to property of every description, to which the American Company was then or might thereafter be entitled, and also all franchises so far as they could be lawfully transferred, and to use, operate and enjoy the same as the Western Union might deem to be for tne benefit of the interests involved, it to assume and be responsible for all the debts, liabilities and legal obligations whatsoever of the American Company, it being the purpose and intention of the agreement to substitute the Western Union for tho American Company in the control and management of all of the 'property, rights and interests of the American Company, and as to any and all legal obligations then existing or which might thereafter exist from any contract to which the American" Company was a party; that stipulation to be deemed for the benefit of any and all parties to legal contracts with the American Company, who might elect to accept performance byi the Western Union as a substituted party thereto.

The answer further admits that the Western Union assumed the contractual obligations of the American Company in the manner and to the extent stated in said agreement; that it issued its franks to the public officers of this state for the transmission of messages relating to the public business thereof, not only in the State of New Jersey, but also between the points over which the lines of the American Company had been extended previous to June 14th, 1866, to wit, between Boston and Washington, and that the franks issued subsequent to November 7th, 1913, were limited to public messages within the State, of New Jersey; that on November 5th, 1921, the American Company filed its certificate of dissolution and receiyed a certificate thereof issued by the Secretary of State; that since said dissolution the Western Union has continued in possession and operation of the property therein, the privileges, powers and franchises of the American Company; that since January 1st, 1922, and until February 7th, 1923, it refused to- transmit without charge messages delivered by public officers relating to- the public business of the State of New Jersey, and that since that date it has transmitted such messages within the state without charge solely because of the restraining order of this court.

Here follows the averment of divers and sundry matters by way of defence to the information, but which are not necessary to be set out because the decision at which I have arrived is not affected by them. And the answer concludes with the averment that the defendant conducts its business in this state under the rights and privileges granted by the post roads act of congress of the United States of 1866, and not under or pursuant to any rights or privileges granted by this state in the charter of the American Company; and that all of those rights, privileges and franchises expired upon the dissolution of the American Company, and- that the Western Union is under no obligation to transmit messages for officers of New Jersey without charge, and that to compel it so to do would be to deprive it of its property without due process of law.

Here follows an averment that such compulsion would be violative of certain provisions of the constitution of the United States and of this state, naming them.

By amendment the attorney-general has added to paragraph 12 of the information an allegation that the proceedings to dissolve the American Company were an attempt on the part of that company and the Western Union to relieve the latter of its obligation under the contract between the State of New Jersey and the American Company, thereby depriving this state of its property right in the contract, and he prays that the certificate of dissolution be vacated. ■ To this the Western Union answering, avers that the result of the dissolution of the American Company is to release it from any further obligation to transmit messages for officers of the State of New Jersey free of charge, and that such dissolution occurred in all respects in accordance with tire requirements of law and is valid and legal and did not deprive this state of any property, right.

On filing the information an order was made on the Western Union to show, cause why an injunction should not issue' as prayed for, and, in the meantime, an ad interim stay was granted. On the hearing of the order to show cause it was made absolute upon the ground that the situation bore a strong analogy to the doctrine that where rights which have been established at. law before being protected in equity, have been .enjoyed without interruption for a long period of years, the complainant is entitled to an injunction. 22 Cyc. 820. It is to be noted that the right asserted had been enjoyed continuously for about fifty-six years when it was interrupted by the Western Union’s action. The status being thus preserved on interlocutory proceedings, the case came on for final hearing on information and answer, by stipulation of the parties signed and filed in the cause. And on a hearing upon bill (or information) and answer the facts well pleaded in the answer are to be taken as true. See Doremus v. Cameron, 49 N. J. Eq. 1; Neptune Fisheries Co. v. Cape May R. E. Co., 89 N. J. Eq. 552.

It is argued on behalf of the Western Union that the answer denies the allegation that the informant is without remedy at law. This is true. And while it may be insufficient as a pleading because it does not claim or pray the benefit of a demurrer, the informant makes no objection on that particular score, while insisting that this court has jurisdiction. Proper pleading requires the defendant to pray the same benefit of the averment of want of jurisdiction as he would have been entitled to on demurrer. Reed v. Cumberland Insurance Co., 36 N. J. Eq. 147; Redrow v. Sparks, 75 N. J. Eq. 396. The point will now be considered.

This question is important and fundamental. The claim made on behalf of the Western Union is, that the remedy, if any,- is not equitable, and consists in the assertion that mandamus, and not injunction, is the proper remedy, assuming that the complainant is entitled to relief. The informant answers this by the assertion that the liability of the Western Union arises out of its contract with the American Company to assume and be responsible for all the debts, liabilities and legal obligations whatsoever of the American Company, it being the purpose and intention of the agreement to substitute the Western Union for the American Company in the control and management of all the property, rights and interests of the American Company then subsisting or which might thereafter arise from any contract to which the American Company was a party. This contract is one between the Western Union and the American Company, but, in my opinion, as between the Western Union and the State of New Jersey, the duty is one enjoined by statute, for the statute laid it upon the American Company, and the Western Union continued to perform it because in taking over the assets of the American, it, along with the benefits received, necessarily assumed the obligations, one of which was to the state under the statute mentioned. And it is doubtless also a contract in the sense that there was a contract between the state and the American Company, the obligations of which were assumed by the Western Union, but that,, nevertheless, does not take from the service due the element of statutory obligation. This is not a question of the assignment and conveyance of a franchise by one corporation to another, but is the obligation by one corporation taking over the entire property of another, to perform, the duties of that other, especially one enjoined by statute. There is a line of cases which hold that a corporation in debt cannot by alienating its property prevent the application of it to the satisfaction of the company’s obligations, and that payment of such debts by'the alienee will be decreed to be made out of the transferred property. There is an analogy between a service due and money due.

In Hamilton Township v. Mercer County Traction Co., 90 N. J. Law 531, Mr. Justice Swayze, speaking for the court of errors and appeals, said (at p. 534) that the writ of mandamus is used to enforce a public duty which may sometimes grow.out of a contract as-well as out of a statute, citing eases. The duty in the case at bar is a public one because it required the American Company to transmit messages of any public officer of the state relating to the public business thereof, without charge.

In Board of Railroad Commissioners v. Delaware, Lackawanna and Western Railroad Co., 79 N. J. Law 219, the board of railroad commissioners made an order directing the Delaware, Lackawanna and Western Bailroad Company to re-establish an abandoned station, and sought to enforce it by mandamus. The act provided inter alia that upon failure of the company to comply with the order of the board the attorney-general should institute proceedings to enforce the order in equity, mandamus, injunction, receivership, or other civil remedy. And Chief-Justice Gummere, speaking for the supreme court, observed (at p. 222) that the proper proceedings for compelling a gwusi-publie corporation to perform duties imposed upon it by statute, is mandamus; and the case holds that to deny the remedy by mandamus would be to take away from the supreme court one of its prerogative powers—its control of such writs. Vice-Chancellor Backes cites this case in his opinion in State v. Elizabethtown Water Co., 83 N. J. Eq. 216, in which he held that unless mandamus is inadequate for the purpose; equity has no jurisdiction to compel the performance of a statutory duty by mandatory injunction. It seems hardly necessary to mention the fact that defendant here is a gmsi-public corporation.

In this last case the attorney-general sought information by petition, under P. L. 1912 p. 557, amended, P. L. 1913 p. 206, as to whether it would be advisable in the conservation of the potable waters of the state to acquire by condemnation the water plant of the respondent, demanding of the respondent permission to enter upon its property in order to make a physical examination and to get access to its books, and accounts, which was refused. The act in question gave a right to the information sought and provided that compliance might be compelled in a court of competent jurisdiction, but relief was denied and the petition dismissed because the proper remedy was mandamus.

The informant contends that this court having assumed jurisdiction, and the defendant having submitted the case to the court on its merits by answer filed, is estopped from questioning the jurisdiction.

In Lehigh Zinc and Iron Co. v. Trotter, 43 N. J. Eq. 185, the court of errors and appeals held (at p. 204.) that the bill was not demurred to, and no objection was taken in the answer to the jurisdiction of the court, and, after depositions were taken, objection that the complainant had an adequate remedy at law came too late; that the court, on its own motion, may dismiss a bill at any stage of the cause on the ground that the complainant has an adequate remedy at law; but where defendant has not raised the objection until after testimony on the merits has been taken, the court, in its discretion, will retain the cause if ii is competent to grant the relief prayed for and has jurisdiction of ihe subject-matter, citing cases. It is true that the court of errors and appeals afterwards, in the case of Polhemus v. Holland Trust Co., 61 N. J. Eq. 654, held that answering fully on the merits submits the defendant to the jurisdiction of the court, notwithstanding any objection to jurisdiction over the defendant reserved in the answer. The case of Lehigh Zinc and Iron Co. v. Trotter was not mentioned, and it is plain that tlie Polhemus Case is to be distinguished from it, for in the latter case the only question was as to whether jurisdiction had been acquired over the person of the defendant. The case at bar falls within the doctrine enunciated in the case of Lehigh Zinc and Iron Co. v. Trotter, because here, as 1 view it, mandamus would be the remedy, and, if I am right, then this court lacks jurisdiction of the subject matter and is incompetent to grant the relief prayed. In this case it is not á question of jurisdiction over the defendant, but over the subject matter of the suit.

I am not unmindful of the fact that the informant has commenced quo warranlo proceedings in the supreme court against the Western Union to ascertain by what right it exercises its corporate franchises, and that he had not commenced a suit by mandamus to compel tire performance of the service claimed to be due by the Western Union. This sijit is for an injunction stated to be in aid of the informant’s suit at law and to preserve the status quo pendente lite.

In Borough of Washington v. Washington Water Co., 70 N. J. Eq. 254, Vice-Chancellor Emery observed (at p. 255) : “The claim for water heretofore supplied is altogether legal in its nature, and an action brought solely for the purpose of recovering a reasonable sum for past services, or of determining what is such reasonable sum, is not within the equity jurisdiction. But such jurisdiction exists to maintain the status quo and require the continuance of the supply pending the settlement of the question of reasonable price for past supply.”

While the views above expressed lead to the conclusion that the informant is not entitled to- a mandatory injunction compelling the service mentioned, because it appears that there is an adequate remedy at law, nevertheless, I think that the existing injunction should be continued to preserve the status pending the quo warranto suit at law; for, it seems to me, the status should be preserved pendente lite no matter what the character of the lawsuit, provided it touches vitally the duty claimed and denied, and which, but for injunction, would not be performed during the litigation over it.

Decree accordingly.


source: Caselaw Access Project

author: Leaming, V. C.

license: Public Domain

text:
    Samuel G. Cattell, complainant, v. J. Frank Rehrer, defendant.
    [Submitted December 22d, 1922.
    Determined December 29th, 1922.]
    1. The lien of a garage for services or materials is superior to the lien of a prior chattel mortgage under P. L. 1915 p. 556.

    2, Under that act an assigned garage! lien is superior to the lien of a prior chattel mortgage.
    On bill, &c. On hearing at return of order to show cause for injunction to restrain sale.

      Mr. Frank S. McKee, Jr., for the complainant.

      Mr. Russell S. Henderson, for the defendant.
   Leaming, V. C.

The issue here presented involves a determination of the priority of liens.

Defendant holds and claims a lien upon a certain automobile, which automobile is subject to the lien of a certain chattel mortgage in which mortgage complainant is) mortgagee.

Complainant’s mortgage was executed December 5th, 1921, was promp-tfy recorded, and is due and payable. Defendant is a garage keeper and automobile repairman; his lien is claimed for repairs made to the mortgaged automobile in May, 1922, at the request of the owner who- is the mortgagor. The present controversy is as to the priority of tire respective liens of complainant and defendant.

Defendant’s lien is claimed under the provisions of the legislative act of April 14th, 1915. P. L. 1915 p. 556. The first section of that act provides:

“All persons or corporations engaged in the business of keeping a garage or place for the storage, maintenance, keeping or repair of motor vehicles and in connection therewith stores, maintains, keeps or repairs any motor vehicle or furnishes gasoline, accessories or other supplies therefor at the request or with the consent of the owner or his representative, whether such owner be a conditional vendee or a mortgagor remaining in possession or otherwise, has a lien upon such motor vehicle or any part thereof for the sum due for such storing, maintaining, keeping or repairing of such motor vehicle or for furnishing gasoline, accessories or other supplies therefor, and may without process of law detain such motor vehicle at any time it is lawfully in his possession until such sum is paid.”

The act further provides for the sale of the automobile so held at public auction, certain prescribed notices of sale to be first given, and that the proceeds of sale shall be applied to the payment of the lien and the expenses of the sale, and the balance, if any, paid to the owner or his representative.

The great number and variety of decisions in controversies of this general nature will be disclosed by reference to an extended editorial note in L. R. A. 1915 D1149. In this state the only adjudications in cases of this general nature which have been brought to my attention are White v. Smith, 44 N. J. Law 105; Sullivan v. Clifton, 55 N. J. Law 324, and Ruppert v. Zang, 73 N. J. Law 216; Crucible Steel Co. v. Polack Tyre & Rubber Co. 92 N. J. Law 221; Stern v. Ward, 94 N. J. Law 279, and Lanterman v. Luby (New Jersey Court of Errors and Appeals), 114 Atl. Rep. 325. White v. Smith involved an artificer’s claim of common law lien for repairs made to a carriage. A wife was the owner of the carriage and had allowed her husband to use it in his business and become its apparent owner; the husband had it repaired. The claim of lien was sustained, in analogy to claims of shipwrights as exemplified in Williams v. Allscup, 10 C. B. (N. S.) 417, as of a class adding to the value of the chattel, and the consent of the owner was deemed implied from the husband’s possession of the chattel. Sullivan v. Clifton involved ithe priority of liens of a chattel mortgage and a subsequent statutory lien of a stable keeper for keeping a horse. The lien of the mortgage was held superior. It is there pointed out as a general rule that while a common law artificer’s or innkeeper’s lien; upon considerations of justice and policy attach to the property without reference to ownership and override' all other rights in the property, a statutory lien is subordinate to- all prior existing rights in the property. This latter statement, of course, is to be understood as applicable* only in cases where the statutory lien is not by the statute given priority over a lien prior in time. Ruppert v. Zang was between a prior chattel mortgage lien and a common law! lien for repairs. Following White v. Smith, supra, it was held that the artificer’s lien was superior to that of the prior chattel mortgage. In Crucible Steel Co. v. Polack Tyre & Rubber Co., ithe constitutionality of the automobile lien act here in question was sustained. Stern v. Wan'd involved only the power of a lessee to confer the statutory lien. Lanterman v. Luby involved only ithe validity of a lien-under the automobile lien act as against an innocent purchaser for value after the automobile had left the possession of the lienor.

In the present case defendant specifically asserts his lien, and is about to sell, under tire statute of 1915 above referred to. Accordingly, it will not be here, considered whether Iris claim could be sustained as an artificer’s common law lien superior to- the lien of the mortgage.

Where, as here, the liens asserted are both statutory liens, all decisions appear to be uniform to- the effect -that the primary inquiry is one of legislative intent. Nor can there be any doubt touching the power of the legislature to- create a lien of the nature here asserted by defendant superior to the lien of a prior chattel mortgage as against a - mortgage made after the passage of ithe act. Manjr authorities to that effect are to be found in the note' above referred to; and the Crucible Steel Co. Case above cited is specifically to that effect.

The act of 1915 above cited does not specifically declare that the lien therein authorized shall be a lien superior in rank to the lien of. a prior chattel mortgage. But it appears to me to be impossible to give any other import to the provisions of that act. The lien is specificalty- given for the service rendered “at the request or with the consent of the owner or his representative, whether such owner be a conditional vendee or a mortgagor remaining in possession or otherwise.” The act ithen authorizes a sale to raise the amount due. These provisions, especially the reference to the owner as' a possible conditional vendee or mortgagor remaining in possession, in connection with the authority to sell and apply the proceeds, cannot be easily understood as relating to a lien of any other nature. This view is adopted in the recent case of Mortgage Security Co. v. Pfaffmann (Cal.), 169 Pac. Rep. 1033, where somewhat similar provisions of the statute giving liens for repairs to automobiles is construed. This view, I think, also may be said to be approved by our court of appeals in Sullivan v. Clifton, supra. There the case of Smith v. Stevens, 36 Minn. 303, is reviewed with approval. In the Minnesota case the statute gave liverymen a lien for the keep of horses “at the request of the owner or lawful possessor thereof.” This language was held to clearly import a lien superior to that of a prior chattel mortgage. Commenting on that decision, Justice Van Syckel, speaking for the count, said: “Under that statute no other view could reasonably be taken.” The provisions of the statute of 1915 here in question must be held to clearly import á legislative intent to authorize a lien superior in rank to the lien of a chattel mortgage prior in time of creation.

Defendant also holds by assignment a lien against the same automobile which, lien arose in precisely the same manner: as the lien hereinabove considered. I can see no reason why, under the liberal provisions of our law touching assignable claims, defendant may not be privileged to enforce the two liens together by a sale in the manner contemplated by the act.

No suggestion has been made by complainant to the effect that the amounts claimed by defendant are not justly due or that the indebtedness claimed by defendant has not arisen for services performed pursuant to the provisions of the statute. If any doubts of that nature exist this court could appropriately preserve intact the proceeds of sale until final hearing. In the absence of such claim on the part of complainant the order to show cause for restraint of the proposed sale will be discharged.

I have given no1 consideration herein to the circumstance, which has been urged by defendant as of importance, that the automobile against •which the lien is claimed by defendant was, at the time the service was performed by defendant, out of the county in which the chattel mortgage of complainant was recorded.

An. order will be advised discharging the order to show cause.


author: Leaking, Y. C.

text:
    Philadelphia and Camden Ferry Company, complainant, v. Christian N. Johnson et al., defendants.
    [Submitted February 5th, 1923.
    Determined March 2d, 1923.]
    1. A ferry company must provide adequate facilities at its ferry to afford its patrons reasonable access to it in their chosen and appropriate means of conveyance. This is a public duty and cannot be overthrown under the guise of regulation, and a bill seeking an injunction excluding all public auto buses from the plaza tract, the only means of access to¡ the ferry, will be dismissed.
    2. Public Service Railway Co. v. Weehawken, 94 N. J. Eq. 88, approved,1 and followed.
    On final hearing on bill for injunction.

      Messrs. Bourgeois & Coulomb, for the complainant.

      Mr. William B. Knight, with whom appeared Mr. 8. Huntley Beckett, for the defendants.
   Leaking, Y. C.

This case does not fall within the principles defined in Thompson’s Express & Storage Co. v. Mount (New Jersey Court of Errors and Appeals), 91 N. J. Eq. 497. In that case the railroad company was under no legal duty to allow hackmen to operate on the railroad property there in question. It is there also suggested that had that duty existed the contract might have been sustained, as in the Pullman Case, by the railroad company assuming to render the service by employing an agent for that purpose. Neither of these two material circumstances exist in this case. In each of the cases cited in the opinion filed in the Thompson Express & Storage Company Case the carrier had assumed to render the service by establishing an agency for the delivery of passengers or baggage. The same is also true as to the numerous additional cases cited by complainant herein.

The present case falls within the rules stated in Public Service Railway Co. v. Weehawken (New Jersey Court of Chancery), 94 N. J. Eq. 88. There it is specifically held that it is the duty for its patrons to approach the ferry in their chosen means of conveyance, and that in the absence of the company assuming to furnish adequate means of conveyance to and from the ferry it could not 'exclude local carriers from entering the plaza to discharge their passengers at the ferry. In the absence of any decision in this state to the contrary the Weehawken Case commits this court to that view.

That it is the duty of complainant ferry company to provide adequate facilities at its ferry to afford its patrons reasonable access to it in their chosen and appropriate means of conveyance does not seem to admit of serious doubt. Nor is the right of the ferry company to control its own property and to adopt and execute reasonable regulative measures questioned. But the public duty is first and paramount and at all times qualifies the exercise of proprietary acts; that duty cannot be overthrown under thej guise of regulation. The only substantial justification suggested by the testimony for the measure which wholly excludes buses from the plaza—others are suggested by the bill—is the fact that the public patronage of buses as a means of transportation has become so great that the large number of buses bringing passengers to the ferry causes over-congestion of the terminal grounds. The suggestion that the remedy consistent with the discharge of the public duty of complainant company would appear to be to use more of its ground for conveyances and less for stores, is not without force'. Be that as it may, it seems obvious that it is not a remedy which is consistent with public duty to- reduce the congestion occasioned by vehicles by excluding all jitney buses from reasonable access to the ferry and allowing the privilege to all other conveyances, both public and private. The measure is'in no sense analogous to that of assigning stands or parking places to vehicles to avoid confusion by the attainment of orderly arrangement. There is inherently no distinction between the vehicles excluded and those admitted, since those which are admitted are in no way protected by contractual rights with complainant.

It is urged that the injunction sought is not against the passengersi who enjoy the buses as a means of conveyance to or from the ferry, but is against the buses only, and that no passenger is here complaining. The public duty of the ferry company is not to the buses or to their owners as such; it -is to the buses as a modern and recognized means of conveyance of the patrons of the ferry when employed by such patrons for that purpose. ’The status of the bus is in no essential way distinguishable from that of the taxicab and the private car. Nor is this case a suit by the bus owners to establish their rights; on the contrary it is a suit by the ferry company to exclude the buses from the plaza. A court of equity when asked to award affirmative equitable relief of that nature to the ferry company cannot properly ignore the consequences of the decree sought and so far disregard its sense of justice and right as to ignore the patent fact that to exclude the buses excludes a large portion of the traveling public who are patrons of the ferry and who have contracted with the buses to enable such patrons to reach the ferry with reasonable corn-font and expedition, and that by a recognized means of transportation.

A different case might arise if the buses .were parking at the terminal soliciting patronage and awaiting the arrival of passengers and by that means unreasonably appropriating space and unnecessarily interfering with the patrons of the ferry company. But the evidence discloses that these buses .as a rule form a continuous line in approaching the ferry and only pause at the ferry long enough to discharge their passengers and take on such passengers as are waiting. There appears to have been individual cases in which inconsiderate bus drivers have more or less delayed moving on after discharging passengers- in order to await the arrival of additional outgoing passengers, and thus unnecessarily delayed the buses behind them which were approaching the terminal with passengers. Instances of that nature may infringe both the rights of other buses and the traveling public in general; but the bill seeks to wholly exclude all buses from the plaza tract. There appears to be no justification for relief of that nature.

This view renders it unnecessary and inappropriate to here determine, whether defendants have disclosed by the evidence such substantial doubts touching the title of complainants to the terminal grounds as to deny a court of equity jurisdiction to grant relief based upon complainant’s title without that title being first established at law, under the principles defined in Hart v. Leonard, 42 N. J. Eq. 416. Nor is it here necessary or appropriate to consider the force of defendants’ contention that the driveways within -the plaza have been dedicated to public use as public highways. . It is sufficient here to say that these driveways and the space adjacent to the ferry afford the only means by which the ferry can be reached by vehicles. No testimony has been introduced tb show whether another place outside the plaza, which was at one time suggested for the use of the buses, affords adequate space or a practicable plan of operation.

I will advise a decree dismissing the bill.


author: Lewis, V. C.

text:
    Metropolitan Life Insurance Company, complainant, v. Mary Zgliczenski and Boleslaw Wisniewski, defendants.
    [Decided December 6th, 1922.]
    1. In order to effectuate a change of beneficiary, or an assignment of a policy, or any part thereof, the terms and conditions imposed by the policy to accomplish such ends must be complied with.
    2. Where a policy provided that a change of beneficiary should take effect on the endorsement of the policy by the insurer, and that no assignment should bind the insurer unless'filed with the insurer at its home office, an assignment of a specified sum “collectible from my insurance” made shortly before the insured’s death, not filed with the insurer, is not valid.
    On bill of interpleader. On pleadings and proofs.

      Mr. Randolph Perkins, for the complainant.

      Mr. Charles M. Egan, for the defendant Mary Zgliczenski.

      Mr. Edward B. Twardus and Mr. Richard Hartshorne, for the defendant Boleslaw Wisniewski.
   Lewis, V. C.

On March 30th, 1910, 'the Metropolitan Life Insurance Company issued a twenty year life endowment policy of life insurance for $3,000, in which it promised

“to Anton Zgliczenski of Jersey City, State of New Jersey, herein called the insured, .on the thirtieth day of March, nineteen hundred and thirty, if the insured be then living, or upon receipt at said home office of due proof of the prior death of the insured, to- Mary Zgliczenski, wife of the insured, beneficiary, with the right of revocation, three thousand dollars, less any indebtedness hereon to the company and any unpaid portion of the premium for the then current policy year upon surrender of this policy properly receipted.”

The policy also contained the following provision with regard to the change of beneficiary:

“Change of Beneficiary—When the right of revocation has been reserved, the insured, if there be .no existing assignment of the policy, made as herein provided, may, while the policy is in force, designate a new beneficiary with or without reserving right of revocation by filing written notice thereof at the home oflice of the company, accompanied by the policy for suitáble endorsement thereon. Such change shall take effect upon the endorsement of the same upon the policy by the company. If any beneficiary, under either a revocable or irrevocable designation, shall die before the insured, the interest of such beneficiary shall vest in the insured.”

The policy further provided, with regard to the right of assignment, as follows:

“Assignment—No assignment of this policy shall be binding upon the company unless it be filed with the company at its said home office. The company assumes no responsibility as to the validity of any assignment.”

After the policy had been in force for three years, provision was made for loan and cash surrender options, upon certain terms and conditions specified. The loans were to be made “on sole security of this policy, and on proper assignment thereof.” The cash value fixed at the end of a policy year could be obtained during such policy year if all premiums to the end off such year had been paid. In ease of surrender or lapse, after the policy had been in force three years, it was provided that “The owner thereof, within three months after any default, may elect (a) to accept the cash value of this policy, or,” &c.

Anton Zgliezenski died on May 7th,'1921. By the table contained in the policy the cash or loan value, after tne policy had been in force eleven years, was twelve hundred and forty-two dollars ($1,242).

On August 17th, 1912, the insured, with the; knowledge and assent of the beneficiary, borrowed $246 from the insurance company, on the security of the policy, and the policy was duly assigned to the company- in accordance with its terms.

On April 13th, 1921, the insured gave to Boleslaw Wisniewski a promissory note for $1,000 payable in ninety days, containing this provision: “Debt collectible from Metropolitan Life Insurance Company, where I am insured.”

Two days before the insured died he executed the following instrument:

“May 5, 1921.
For and in consideration of the sum oí $1.00 and other valuable consideration to me in hand paid by Boleslaw Wisniewski, I Hereby assign to him $1,000, which sum is collecUble from my insurance at the Metropolitan Insurance Company.
I hereby acknowledge that the sum of $1,000 has been borrowed by me and is due to Boleslaw Wisniewski.
(Signed) Anton Zgliczenski.
Witness:
J. Dabrowski. ■
S. SUGOLSKI
J. F. Wisniewski.”

Ho notice of this assignment was given to the insurance company until after the death of the insured, Anton Zgliczenski. There is nothing in the case to show that Mary Zgliczenski, the beneficiary mentioned in the policy, knew_ of or consented to the assignment prior to the death of her husband.

Upon the death of Anton Zgliczenski, the insured, the insurance company was confronted with the claim of Mary Zgliczenski, the beneficiary named in the policy, for the amount due thereon; and with the claim of the assignee, Boleslaw Wisniewski, for the amount which he claimed had been assigned to him by the insured. The widow brought an action against the company; and the assignee threatened to likewise commence suit. Thereupon, the company filed its present bill of interpleader and paid the fund into this court. The beneficiary and the assignee are made defendants in this bill and are the contending parties for the fund. The complainant, by the interlocutory decree, has been dismissed. Meantime, the suit brought by the beneficiary in the Hudson county court of common pleas against the insurance company was restrained.

It is well settled in this state, in cases of this kind, that in order to effect a change of beneficiary or an assignment of the policy, or any part thereof, the terms and conditions imposed by the policy to accomplish those ends must be strictly complied with. Sullivan v. Maroney, 76 N. J. Eq. 104; affirmed, 77 N. J. Eq. 565; Anderson v. Broad Street National Bank, 90 N. J. Eq. 78; affirmed, 91 N. J. Eq. 331; Pennsylvania Railroad Co. v. Warren, 69 N. J. Eq. 706.

It is perfectly plain in this case that the requirements for the change of beneficiary or the assignment of' the policy to Wisniewski were not complied with. If Wisniewsld had filed his assignment with the company before the death of the insured, and in accordance with the provisions of the policy, then a different question might have arisen; for at the time of ¡the assignment to Wisniewski the policy appears to have had al clear cash surrender value (after deducting the previous loan made by the company to the insured) about equal to the amount of the assignment; but this the assignee failed to do.

I will advise a decree that the fund he paid to the beneficiary, Mary Zgliczenski, and that the suit in the Hudson county circuit court be permanently restrained.


author: Backes, V. C.

text:
    Mary Orcutt, petitioner, v. Kenneth B. Orcutt, defendant.
    [Decided January 11th, 1923.]
    1. Proof of the date of the commencement of a desertion is unimportant if two years of willful, continued and obstinate desertion is established.

      2. Corroboration of a petitioner for divorce means that the chancellor must be satisfied that the petitioner’s testimony is true from what others say, whether of immediate verification or of supporting circumstances, and may be by letters of the defendant evincing desertion proved by the petitioner and the surrounding circumstances adequately established.
    In divorce. On exceptions to master’s report.

      Mr. John P. Manning, for the exceptant.
   Backes, V. C.

Upon this petition, on the ground of desertion, the master reports that the petitioner has not made out her case because her testimony is not corroborated. I think it is. The petitioner testified that her husband deserted her January 17th, 1920, and continued to do so down to the filing of the petition, February 16th, 1922. The petitioner’s mother corroborates her story. Though she does not give the date of the desertion she says it began in the month of January, 1920. Proof of the date of the commencement of the desertion is unimportant if two years of willful, continued and obstinate desertion is established. Corroboration means that the chancellor must be satisfied that petitioner’s testimony is true from what others say, be it immediate verification or of supporting circumstances. Bissell v. Bissell, 93 N. J. Eq. 537. Letters of the defendant evincing desertion, proved by the petitioner, and the surrounding circumstances adequately established, meet this test. Meek v. Meek 92 N. J. Eq. 23.

The master’s observation that the testimony of the mother was hearsay is not warranted. She testified that the defendant deserted the petitioner in January, 1920, and that from that time he had no°t lived with her, and that if he had come to visit her she would have known it. It appears that she was always in close touch with her daughter and her affairs. The master’s reason for holding that her testimony was hearsay was her answer given to the only question put to her by the master. “You stated that the husband of your daughter left her iu January, 1920, and that she'had not seen him since. How do you know that?” To which she answered “Only by what she told me.” In view ot what the witness had already testified to of her own knowledge, and her apparent capacity to so testify without having been informed by her daughter, I take it that the wituess had in mind the second part of the question (which incorrectly states the testimony) and meant that the daughter had told her that she had not seen her husband since the desertion. It seems to me the master could have made this clear had he searched a hit further. The answer, of such uncertain meaning, should not be permitted to overthrow! that which the witness had already testified to explicitly of her own knowledge.

There will he a decree.


text:
    James R. Nugent, complainant, v. William M. Hayes et al., defendants.
    [Decided March 1st, 1923.]
    1. Where it is alleged in a bill in equity that a defendant's tax title is worthless because of irregularity in the proceedings under which the circuit court made an order directing the making of his deed, and where the remedy by certiorari is lost by reason of the statute of limitations, such loss .of remedy at law does not give jux-isdiction in equity.
    2. Where it is alleged that such tax title was obtained by fraud, there can be no question that equity can and will relieve, regardless of the correctness of the legal formality.
    3. Where a bill in equity alleges no more than that the proofs offered to the circuit court were untrue, that is not enough to invoke equity jurisdiction. To impeach and overthrow legal proceedings, it must he shown that the proofs were knowingly false and intended to deceive the court.

      On motion to strike out the bill.

      Mr. Herbert Boggs, for the motion.
    Complainant, pro se, contra.

   Backes, V. C.

This bill is for the partition of waste lands in the great meadows at Newark. The fee was in Samuel Whittaker in 1818. The complainant acquired and owns one hundred and sixty-five two hundred tenths undivided parts. The defendants, other than Stewart Lindsley and John Erancis Cahill and wife, own the rest. Stewart Lindsley claims title to the tract under a tax deed executed by the comptroller of Newark to Mrs. Cahill (Lindsley’s grantor) by virtue of the Martin act. Comp. Stat. p. 5205. The property was sold for taxes in 1906. The comptroller conveyed to Cahill in 1909 upon an order of the Essex circuit court after proceedings against “unknown owners,” as provided by section 3 of the supplement of 1887. Comp. Stat. p. 5218. The bill attacks Lindsley’s deed on the ground that the proceedings upon which the order was made were irregular, in that the lands were not described by metes and bounds, as required by the statute; and on the further ground that the circuit court was imposed upon, in that the proofs to establish that the owners were rinknown were false. If the complainant should succeed in his efforts to set aside the deed, Lindsley would have but a tax lien, which would be redeemable in this suit. Culver v. Watson, 28 N. J. Eq. 548; Devine v. Frank, 47 Atl. Rep. 228; Clift v. Frenche, 91 Atl. Rep. 817.

On the first ground, of irregularity in the proceedings, it is settled that the supreme court has exclusive jurisdiction by certiorari. Sutton v. Maurice River Township in Cumberland County, 93 N. J. Eq. 484. That remedy is lost to the complainant because the statute limits the time for review by certiorari to three years, and more than three years have elapsed since the sale (1 Comp. Stat. p. 407 § 14; DeRaismes v. Cahill, 117 Atl. Rep. 30), and his loss of his remedy at law dne to the statutory limitations does not give equity jurisdiction. Equity relieves where law cannot, not where law can but will not. A suitor who had a legal remedy and lost it by his default, unless that default is brought about by fraudulent imposition, cannot appeal to equity because he has no remedy at law, viz., because his remedy at law is gone. Goodwin v. Millville, 75 N. J. Eq. 270.

On the second ground, that the tax title deed under which Lindsley claims ownership was procured by fraud, there can be no question that equity can and will relieve if it appears that the ordér of the circuit court to the comptroller to execute the tax deed to the purchaser was obtained by fraudulent representations that the “unknown owners” were unknown to the purchaser, and, in consequence, that the owners were without notice of the foreclosure proceedings. It is the peculiar province of equity to relieve against fraud regardless of correctness of legal formality. Tomkins v. Tomkins, 11 N. J. Eq. 512; Herbert v. Herbert, 47 N. J. Eq. 11; affirmed, 49 N. J. Eq. 565; S. C., 49 N. J. Eq. 70; Kirkhuff v. Kerr, 57 N. J. Eq. 623; Truiit v. Darnell, 65 N. J. Eq. 221. The eases cited gave relief to defendants in foreign attachment suits because the judgments were surreptitiously obtained on claims that were false. The principle upon which equity jurisdiction was sustained there is applicable here. But the bill alleges no more than that the proofs upon which the circuit court made its order to the comptroller to execute the tax deed were untrue. That is not enough to invoke equity jurisdiction. True or not, the judgment of the truthfulness of the proofs was for the law court. To impeach and overthrow the legal proceedings it must be shown that the proofs were knowingly false and intended to deceive the court; in other words, that the purchaser when he applied to the circuit court for his order for the deed represented that the “unknown owners” were not known to him when in fact he knew who they were, or could have known who they w. ere if he had made reasonable inquiry. The bill does not show this and the motion to dismiss will prevail.

Erom what was said at the hearing to strike the original bill, it appeared that there was actual fraud imposed upon the circuit court, and I gave leave to file an amended bill setting that up. That has not been done. It may have been due to the pleader’s faulty knowledge of pleading, or it may be that the facts do not warrant the allegation. The complainant is given leave to file a further amended bill in twenty days if he desires. In default the bill will be dismissed. .


text:
    James H. Griswold and Otto H. Jobski, as special co-administrators of the estate of Richard S. Bryant, deceased, v. Kelly-Springfield Tire Company et al.
    [Submitted July 26th, 1916.
    Decided August 22d, 1916.]
    1. Where a resident of Ohio executed his will in New York and died there, and the will was offered for probate in New York, and contested there, upon which a temporary administrator was appointed in New York, and the probate court of Ohio also appointed administrators, who filed their bill in this court to obtain certain certificates of stock in a New Jersey corporation,- owned by the testator, but physically in New York, and to procure their transfer by the New Jersey corporation, the ownership of the stock not being in dispute, this court will not interfere between the rival claimants and settle the lawful right of possession.
    2. It must be assumed that courts of sister states will try issues according to the rules of law, and will decide them upon the facts, applying correct principles, and the courts of New Jersey ought not to assume, directly or by indirection, any appellate jurisdiction over the courts of another state.
    3. Personal property in a foreign jurisdiction will devolve according to the laws of the domicile.
    On bill, &c.
    Note.—This case was omitted by inadvertence from the New Jersey Equity Reports at the time the opinion was rendered.—Rep.

      Mr. William E. Wurts and Mr. Nash Loclmood (of the New York bar), for the complainants.

      Messrs. McCarter & English, Messrs. Stem, Stein & Eannoch and Mr. Lewis M. Scheuer (of the New York bar), for the defendants.
   Backes, V. C.

Richard S. Bryant at the time of his death was a citizen of and domiciled in Cleveland, Cuyahoga county, Ohio. He died at the Post Graduate Hospital in New York city January 23 d last, where he had gone for treatment. Shortly before his death, and while in New York, he executed a last will and testament wherein he appointed Arnold L. Scheuer and Otis R. Cook his executors. He left a mother and three brothers as his next of kin, who are dissatisfied with the provisions of the will. The executors' offered the will for probate in the surrogate’s court of the county of New York, and pending contest by the next of kin the surrogate appointed Arnold L. Scheuer, one of the executors, temporary administrator. Later the domiciliary court, the probate court of Cuyahoga county, Ohio, appointed the complainants special administrators. At the time of his death Mr. Bryant was the owner of five hundred and fifty shares of the common stock of the Kelly-Springfield Tire Company, a New Jersey corporation. The certificates for these shares, six in all, were made out in the name of H. P. Goldschmidt & Company and endorsed on them was a blank power of attorney for their transfer, executed by Goldschmidt & Company. The certificates were found in Mr. Bryant’s strong-box at the Plaza Hotel, New York city, where he had been stopping, and were taken charge of by the New York administrator, who has been ordered by the surrogate to sell them at not less than their appraised value. The probate court of Ohio has ordered the special administrators to demand the certificates and to take whatever legal action may be necessary to secure the transfer of the stock to them upon the books of the company. Hpon a demand and refusal, this bill was filed to compel the Kelly-Springfield Tire Company to make the transfer, the New York administrator being joined as a party.

The complainants lay claim to 'the capital stock on the legal fiction mobilia sequntur personam, and having filed an exemplified copy of their letters it will be assumed that they are authorized to sue for the same in this state. Comp. Stat. p. 2265 § 21. If the ownership of the stock were involved in this suit—the property having its location in this state—this court, properly, would settle the title. Andrews v. Guayaquil and Quito Railway Co., 69 N. J. Eq. 211; affirmed, 71 N. J. Eq. 768; Sohege v. Singer Manufacturing Co., 73 N. J. Eq. 567; Amparo Mining Co. v. Fidelity Trust Co., 74 N. J. Eq. v97; affirmed, 75 N. J. Eq. 555. Here the title is not in dispute. The ownership of the stock is in the estate of Richard S. Bryant, and the strife between the two sets of administrators is simply for the privilege of administering the stock for the estate. Both claimants are only custodians of the court of their appointment (Davenport v. Davenport, 68 N. J. Eq. 611) and the real issue raised is whether the New York surrogate’s court has jurisdiction to impound the certificates and sell the stock —a problem which, as between the two tribunals, under the circumstances of this case, ought to be left to that court to solve.

The proposition that the situs of capital stock is in the state where the corporation .was created, and that the certificates of stock are generally regarded as mere evidence or muniments of title, is not controverted. Neilson v. Russell, 76 N. J. Law 27; reversed on other grounds, 76 N. J. Law 655; Buck v. Beach, 206 U. S. 392; Kennedy v. Hodges, 215 Mass. 112; Richardson v. Busch, 198 Mo. 174; Gamble v. Dawson, 67 Wash. 72; 29 Ann. Cas. 1913 D 501. But for some purposes the certificates themselves, have many of the qualities and attributes of personal property. They are bought and sold on their face and title passes by delivery. They are deemed personal properly when- pledged to secure debts and may be levied upon by virtue of writs of attachment and of execution. They are thus regarded by the courts of the State of New York. In Simpson v. Jersey City Contracting Co., 165 N. Y. 193, the plaintiff attached capital stock of a foreign corporation, which the defendant had pledged as security for the payment of a note. In its advisory- opinion the court of appeals held that the pledge of the certificate carried with it the owner’s interest and that the owner’s residuary right as against the pledgee was seizable for the debt. Justice Gray in delivering the opinion said: “Did it [the defendant] not, therefore, clearly have property rights, or interests, within this state, which could be impounded by our courts to abide the result of the litigation over the plaintiff’s claim? I think so. The distinctions sought to be drawn are, largely, artificial. The truth is that it did have property here, in the common acceptation of the terms as well as in the eye of the law. Certificates of stock are treated by business men as property for all practical purposes. They are sold in the market and they are transferred as collateral security for loans, and they are used in various ways as property. They pass by- delivery from hand to hand and they are the subject of larceny.” See In re Whiting, 150 N. Y. 27. Commenting on this case, Mr. Cook, in his work on 2 Corp. (6th ed.) 1272, says:

“It must -be admitted that this decision, although apparently a wide departure from the common law:, is a correct decision, in view of the fact that the certificates of stock have gradually -grown to be -more than mere receipts or evidence of stock, and have come to -he the stock itself, practically, in business transactions, especially in America, and, like a promissory note,, a certificate of stock is property in itself and carries title, irrespective of the corporate -books and of transfer on the corporate books. The decisions on this subject may perhaps be reconciled on the ground that where the words of the statute are broad enough to allow an attachment to he levied on certificates of stock such a levy is effective, inasmuch as certificates of stock now represent value in themselves, in very much the same way as promissory notes-.”

In People v. Grifenhagen, 152 N. Y. Supp. 679, the sheriff of New York county was mandamused to sell capital stock of a foreign corporation, the certificates of which he had levied on by virtue of an execution. The certificates had been delivered by the defendant to a local bank for the purpose of having them sold. The court held that the certificates of stock were personal property within the statutory definition contained in section 39 of the General Construction law, hereinafter quoted, and upon the authority of Simpson v. Jersey City Contracting Company, concluded that "If the interest of a non-resident owner, in the capital stock of a foreign corporation, which is pledged as security for a debt within this jurisdiction, is subject to the levy of an attachment, I fail to see upon what principle the stock in question was not subject to the levy of the attachment. Here the bank had no lien, but it had possession, with authority to sell, and by the assignments executed m blank by the owner the purchaser would become entitled to have the stock transferred to his name on the books of the company in the foreign jurisdiction.”

2 Schou. Wills (5th ed.) 901, says:

“Modern kinds of incorporeal personal ¡property furnish disputes as to their locality for such a purpose (probate jurisdiction), which the courts have not as yet clearly settled. But where the personal property consists of a debt.owing upon some security or document of title, which of itself is commonly transferrable as possessing a mercantile value,' the local situation of such security or document of title would, in various instances, be well held to confer a probate jurisdiction, as of bona notaliiUa, apart from the Obligor’s or debtor’s place oí residence; as where, for instance, a savings-bank book, coupon-bond, certificate of stock, or perhaps a promissory note were left lying in another jurisdiction.”

Of course a distinction may be drawn between the two New York cases and the present one, in that in both it may be said the owners of the certificates voluntarily carried their interest in the stock, as well as the certificates, into the 'New York jurisdiction, while here they were there casually. But, there is an element in this case which, perhaps, as effectually attaches the New York probate, jurisdiction. At his death Mr. Bryant was heavily indebted to citizens of that state, and for their, protection its courts undoubtedly have ■the right to sequester property of a deceased non-resident to insure the payment of the debts, and to this extent and for this purpose, at least, it may be held by the New York courts that the deceased brought not only the certificate, but his interest in the stock within their jurisdiction. Under the code of court procedure of New York the * * * surrogate of each county has exclusive jurisdiction to grant letters testamentary or of administration where the decedent not being a resident of the state dies within that county, leaving personal property within the: state. Code Civ. Pro. 2515 (Am'd. 1914). By paragraph 39 of its General Construction law (Cons. L. 1909 c. 27), personal property is defined to include

“chattels, money, things in action and all written instruments themselves, as distinguished from the rights or interests to which they relate, by which any right, interest, lien or encumbrance in, to, or upon the property, or any debt or financial obligation is created, acknowledged, evidenced, transferred, discharged or defeated, wholly or in part, and everything, except real property, which may be the subject of ownership.”

All of the parties in interest—'the executors, devisees and next of kin of the deceased—are now before the surrogate’s court of New York contesting the will and debating the question of jurisdiction. In this situation and the condition of the probate law, it would be manifestly inappropriate to pass judgment upon a matter with which we have no concern—there are no creditors of the deceased in this state— and it is, it seems to me, our duty to permit the surrogate’s court to exercise its judicial functions in respect of the matters before it, unhampered by this suit. Furthermore, the rights of the parties ultimately to be benefited in the distribution of the decedent’s estate, whether it be under Ms will or, as of intestacy, are of paramount' importance and those rights ought not to be jeopardized o-r sacrificed by needless litigation. If the surrogate’s court upholds its own jurisdiction, its admimstration and sale of the capital stock will not be objectionable and the Kelly-Springfield Tire Company would be justified in making a transfer upon" its books to the purchaser; or (the company having a transfer office in the city of New York) as was done in Lockwood v. U. S. Steel Corporation, 209 N. Y. 375, the New York courts could compel such transfer; whereas, if an injunction should go in this case, the procedings in the surrogate’s court might be rendered altogether abortive, or, if it would not have that effect, it would at least put such a cloud on the title of the stock- as to render it unmarketable or salable only at a greatly depressed figure below its market value. The stock is of a fluctuating value, and a sale under the order of the surrogate’s court at this time would result in advantage to the estate, regardless of those who may eventually share in its proceeds, and in view of the fact that both parties assert that an immediate sale ought to be had, there is no reason for our interference with the squabble between the two temporary administrators as to which of them should make the sale.

The grounds for relief and the reasons assigned by the complainants in their bill, why they should primarily control the stock and! be permitted to sell it, are not of a nature sufficient to influence a court of equity to- intervene in their behalf. After stating that the last will and testament of the deceased was obtained by fraud and duress and that its probate is being opposed in the surrogate’s court on the grounds of mental incapacity and undue influence, and that its admission will be contested in the Ohio courts on the same ground if it is offered there for probate, they allege: (1) That in the event of. the will being admitted to- probaté in New York and rejected in Ohio, the executors will distribute the proceeds of the sale of the stock in accordance with the terms of the. will and not to the next of kin entitled to it under the intestate laws of the domicile; and (2) argumentatively,' that if the will is rejected, the distribution would be made according to the intestate laws of the State of New York, and not in accordance with those of Ohio; and, further, that irreparable injury will be done the Ohio administration if the New York administrator and not the Ohio administrator should sell the stock, because in that event (a) the State of New York would exact an inheritance tax, and (i) that the Yew York administrator would be allowed a commission.

(1) As to the first ground: It is to be assumed that the surrogate’s court will try the issues according to the rules of law and will decide them upon the facts, applying correct legal principles, in the same manner as it is to be assumed the Ohio court would try and decide them. Chancellor Pitney, in Bigelow v. Old Dominion Copper Mining and Smelting Co., 74 N. J. Eq. 457 (at p. 473), expressed the proper sentiment in this manner: “The courts of Yew Jersey ought not to assume, directly or by indirection, any appellate jurisdiction over the courts of Massachusetts, nor proceed in giving judgment here upon the idea that the courts of that commonwealth are in the least degree incompetent or unwilling to do! full and complete justice in all cases that are fairly within their jurisdiction.” If, perchance, however, different conclusions were reached, which is only remotely possible, and a part of the testator’s estate in ease of probate, would pass under his will, and the remainder located in another state would pass by operation of law of that state, while unfortunate, would lead to no confusion or conflict, for the reason that the judgment of the-respective courts would be operative only upon the property found within its own jurisdiction. And, in this respect and upon this aspect of the ease, it must be further assumed that if the capital stock was property in Yew York, upon which the jurisdiction of the surrogate’s court fastened for the purpose of satisfying the claims of its citizens and not such for testamentary purposes generally, the court will so adjudge and will distribute the surplus according to the laws of the domicile or remit it to the domiciliary court for that purpose, as would be done under the laws of this state if a nonresident died testate leaving property in this state, and having resident creditors. Here, unlike the practice in Yew York, our probate courts have not original jurisdiction, and probate is granted only as ancillary to- that of the courts of the domicile (Chadwick’s Case, 80 N. J. Eq. 471), but our courts nevertheless administer regardless of the will, and after satisfying local debts, turn the balance over to the home administrator.

Note.—Chapter 283, laws of 1921 (P. L. p. 831), confers jurisdiction on our courts to probate wills of non-residents, under certain circumstances, where the decedent was seized of land in this state. —Rep.

(2) The feebleness of the second ground is so apparent that little need be said. The law is well settled that in case of intestacy, personal property .in a foreign jurisdiction will devolve according to the laws of the domicile; and it is to be taken for granted that if the surrogate’s court should declare that Mr. Bryant died without leaving a will, it will, after satisfying debts, distribute the estate according to the laws of Ohio or transmit it to the home representative. Whether it will do the one .or the other is a matter not of jurisdiction, but of judicial discretion, depending upon the particular circumstances of each case. Harvey v. Richards, 1 Mas. 380; U. S. Trust Co. v. Wood, 146 App. Div. 751; Normand v. Grognard, 17 N. J. Eq. 425.

(a) There is no basis for relief on the score of irreparable injury. There is nothing before me to show that an inheritance tax can or will be exacted by the State of New York. On the contrary, my understanding is that none can be assessed.

(b) The fact, if it is a fact, that the New York administrator will be allowed commissions is not a cause for eom.plaint. A reasonable compensation awarded by courts to their officers is a necessary incident to the administration of justice, and it may safely be left to the courts to guard against an overburden. If the services in-this case which the complainants desire to render the estate are performed by the New York administrator and the hire is paid to him, the domiciliary court, it is to be assumed, will not grant a second commission unless it is constrained to do so by statute, and in that event the complainants may relieve themselves from their present anxiety by, in a spirit of unselfishness, declining the allowance.

An injunction will be denied and the bill will be dismissed, with costs.


author: Griffin, V. C.

text:
    August F. Theis and Emil H. Theis, complainants, v. Robert Vonderheyden et ux., defendants.
    [Decided December 8th, 1922.]
    1. Where on a sale of land 'owned by a husband and wife and purchase of other land with the proceeds, the husband voluntarily had the title taken in the name of the wife, this was a gift to the wife, and she took the premises free and clear of any interest of the husband, unless he should afterwards become entitled to curtesy.
    2. In a suit to set aside a conveyance made by the' complainants soon after their mother’s death to their step-father, evidence held to show that the step-father did not disclose to the complainants that the property was their mother’s, and that he had ho interest in it, and that the complainants paid little attention to the matter and relied on what he said.
    3. Where the relations between a step-father and step-children were of such character as usually subsists between parent and child, a relation of trust and confidence existed, and where in conveying their deceased mother’s land to the step-father the step-children did not have independent advice, were not informed of their rights, and did not understand the purport of their act, they were entitled to have the deed set aside.
    4. Upon the setting aside of a deed from step-children to their stepfather made as part of a so-called settlement of their mother’s estate, the status quo must be restored by the return by the sons of anything received by them in excess of their distributive shares.
    5. A suit by complainants to • set aside a deed made to their stepfather shortly after their mother’s death in 1919, held not barred by laches where the relation of trust and confidence continued to exist down to 1921.
    On bill, &c.

      Mr. John S. Craven and Mr. L. Edward Herrmann, for the complainants.

      Mr. Louis A. Cowley, for the defendants.
   Griffin, V. C.

The bill in this cause is filed, among other things, to set aside a conveyance made by two step-sons to the step-father under the following circumstances: The mother of the complainants, by her first marriage, had.two sons, who are now twenty-eight and thirty years of age, respectively. The father of these sons died about the year 1902. In 1907 their mother married Mr. Yonderheyden (who will hereafter be called the defendant) and she died in 1919. At the time of the marriage to the defendant these children were aged about thirteen and fifteen years, respectively. The relations between the step-father and the children appear to have been, at all times down to 1921, of such character as usually exists between parent and child. When the defendant married complainants’ mother the mother had a few hundred dollars. It does not appear that the husband had anything. The defendant worked, the children worked, and the earnings were thrown into hotchpot. Certain lands were bought in the name of the husband and wife, which were sold for about $6,000, from which they received about $5,200 net, some $3,700 of which was used to purchase the premises in question, the title to which was taken in the name of the wife, since deceased. This was done voluntarily by the defendant because he had had an auto accident and was advised that it would be well to have the deed made to his wife, so that, in case of future accidents, he would be execution proof. (This is not the. language used, but this is what it means.) Clearly, whatever came from the sale of this property in 1917, which ordinarily would become the share of the husband, constituted a gift to the wife in the purchase of this property, so that she took the premises free and clear of any interest of the husband in the premises (Fretz v. Roth, 70 N. J. Eq. 764), unless he should become entitled to curtesy. This feature is entirely settled, because the wife died without issue by the defendant, born alive. Thus the entire estate at her death vested in fee-simple in the children.

Shortly after the death of the mother the father consulted Mr. Cowley, a member of the bar, and learned from him that he had no estate in the lands, and that, as to personalty, he would be entitled to one-third and the children to two-thirds. He then asked the children to settle up the estate, .and took them to the office of Mr. Cowley, and, the deeds being prepared, the children signed a deed of the property to the defendant. At the same time $1,000 was paid to August, and a deed of lot 516 was made by August and the father to Emil. This was done pursuant to a conversation had prior thereto, wherein it was suggested that the estate be settled up, and the father said that August would get a thousand dollars and Emil would get this lot and the balance of the money in the bank, which then consisted of about $1,800, out of which certain expenses were to be paid which would reduce the amount to about $500. This balance was not paid to Emil.

The father’s version of the story is this: That he told the boys of a conversation he had with their mother prior to her death, ■ in which the mother (apparently recognizing the right of the father 'in the property which was the result of their joint earnings, and also the earnings of the children), said to make division by giving $1,000 to August and giving this lot to Emil. There was nothing said about his retaining the balance. It was evidently assumed by the husband and wife, if the story of the defendant is taken to be true, that the remaining property was to be that of the husband upon her death. He did not, however, ask his wife to make a will; which would be the natural manner of disposing of the property; and he excused his failure to do this upon the ground that his wife was suffering from cancer and did not know that she was so seriously ill, and he did not want to discourage her. I fail to see the force of this story. If the wife made the suggestion of a post-morten division of her property, she was evidently speaking in contemplation of death, and the most natural thing in the world for the husband to have done would have been to say, “Well, why don’t you make a will ?” This was not done.

The story of the sons that they knew nothing about the title to this property at the time when they made the conveyanee is worthy of more credence. At the time that the conveyance was made the defendant knew that he had no interest in law in this property and was only entitled to one-third of the personalty. He asked his step-sons (who reposed implicit trust and confidence in him) to exchange deeds which would enable him to hold lots 514 and 516, with the building thereon, at the lowest estimate worth'about $6,000, while one son got a thousand dollars and the other a lot worth between three hundred and fifty and five hundred dollars. The sons testify that they did not know that the fee-simple was vested in them free from any claim of the defendant; and this, I believe, to be the fact; and they also deny that any such conversation as the defendant testifies to was had between them and the defendant. In the deeds drawn, as I recall it, there is a recital that Mrs. Vonderheyden died intestate, leaving 'her surviving as her heirs-at-law the two sons and the defendant, which might convey the idea that' the defendant had some interest in the property when he had none.

One son was married prior to his mother’s death and lived in the family of his mother and step-father until the world war broke out, when he entered the service and was discharged about May, 1919, a few weeks before his mother died. The other son was unmarried and served about three years in the army on the Mexican border and in the world war,, and came home about the same time - as the other brother. The wife of one son, after the death of the mother, managed the household, and the relations of all the parties were quite pleasant until about .the spring of 1921, when dissensions arose. It seems that the defendant took another wife in, I think, 1921. One of the sons, August, after the marriage of the step-father, resided part of the time in Brooklyn and worked in Passaic. ' Emil resided at the home of the father, with his wife, and they say that the understanding was that Emil was to pay $5 'a week board, and that, there was no charge to be made for his wife’s board, as she was the housekeeper. In April, 1921, Emil, having been out of work, obtained a job painting an adjoining house, for which he got $60, and his wife tendered, either to the defendant or Ms wife, a payment of $35 on account of Emil’s board. Some dispute then arose, whereupon Emil telephoned to •August at the mill, and August came up, and they had rather a! heated conversation, in which August took the deeds to his mother and to Emil from the drawer, and they say then, for the first time, they learned that the property was the mother’s property, although the deed itself recites the fact that it was the property of the mother.

I am inclined to the view that the father did not disclose to these children the fact that the property was their mother’s and that he had no interest in it. I am also satisfied, by reason of the close relations that existed between the parties, that the sons paid very little attention to the matter, relying wholly upon what the defendant said.

Therefore, the question arises, taking the relationship existing, Was the defendant bound to make a full disclosure of the situation to these children,, so that they might judge for themselves whether they would make the conveyance? If, under the law, he was bound to make the disclosure, then he must reconvey, upon terms which will restore the status quo.

In Hail v. Otterson, 52 N. J. Eq. 522; affirmed, 53 N. J. Eq. 695, Vice-Chancellor Green (at p. 528), said: “In all transactions between persons occupying relations, whether legal, natural or conventional, in their origin, in which confidence is naturally inspired, is presumed, or in fact reasonably exists, the burden of proof is thrown upon the person in whom the confidence is reposed and who had acquired an advantage, to show affirmatively not only that no deception was practiced thereon, no undue influence used, and that all was fair, open and voluntary, but that it was well understood.” Citing cases.

The same doctrine was applied in Slack v. Rees, 66 N. J. Eq. 447 (at p. 449).

In view of the doctrine of the law thus enunciated, it being quite plain to me that these children did not have the benefit of independent advice, and that the relation of trust and confidence existed quite as fully between these children and the step-father as between parent and child; that they were not informed as to their rights in the premises, and did not understand the purport of their act; and in view of the fact the burden of proof is cast upon the defendant, and he having failed, the decree should be for the complainants; but the status quo must be restored. This may be done, so far as the children are concerned, by the son August bringing into the personal estate the thousand dollars, with interest, or so much thereof as he would not be entitled to as his distributive share. There may be other features on this point which counsel may point out. This is a mere suggestion of what now occurs to me as to one item in which the defendant may be interested.

T make no point at this time of the conveyance to the other son, Enlil, of the vacant lot, because, as I recall it, that became vested in the two sons on the death of their mother, and the defendant has no interest in it.

On the point of laches I do not find that there is any laches in this case. Hall v. Otterson, 52 N. J. Eq. 534.


author: Foster, V. C.

text:
    John C. Lloyd et al., complainants, v. Joseph Connella et al., defendants.
    [Submitted January 15th, 1923.
    Decided January 20th, 1923.]
    1. Where the attorney for a corporation which loaned the owner of land funds with which to build, held a power of attorney from the owners to disburse the funds, but had never represented them in any other way, he was not authorized to accept or acknowledge service of stop-notices by mechanics’ lien claimants.
    2. The rule that section 3 of the Mechanics’ Lien act shall be liberally construed in favor of claimants, does not require a construction so liberal as to permit a claimant to ignore its explicit direction, particularly where other claimants have complied with its requirements.

      3. Where the first mechanics’ lien stop-notice was served on an agent not authorized to receive or accept service for the owner, the subsequent ratification by the owner of the acceptance of service cannot give that claimant any rights as against other claimants who had served stop-notices upon the owner after the service on the agent and before the owner’s ratification.
    On bill, &e. •

      Mr. Scott German, for the Builders’ Material Supply Company.

      Mr. Simon L. Fisch and Mr. Theodore G. Gottlieb, for the New York Cornice and Skylight Works.

      Mr. Henry H. Fryling, for the Harrison Supply Company.
   Foster, V. C.

This is an interpleader suit under the Mechanics’ Lien act, and the controversy is among the claimants over the fund of $1,529.31 paid into court by complainants.

■ Complainants who are tenants in common are the builders and owners who by a contract in writing dated August 11th, 1919, and duly filed, agreed with the defendant Joseph Connella for, the erection of certain garage buildings on their property on Warren street, Newark.

To finance this building operation complainants borrowed money from! the Prosperity Building and Loan Association, for which Judge Pred G-. Stickel, Jr., was the attorney.

Prior to obtaining this loan complainants had no relations with Judge Stickel and he never represented them nor acted for any of them nor for the! “Lloyd Estate” as they were known. Acting as attorney for the loan association and incidentally for complainants, under a power of attorney from them, Judge Stickel disbursed and applied the. proceeds of the loan in settlement of the payments due under the building contract as they accrued, until trouble arose between the owners and contractor.

While this loan was being handled in the office of Judge Stickel, or of his firm, Stickel & Naughright, the firm had in its employ, Halsey W. Stickel, a brother of Judge Stickel, who attended to most, if not all, the details of the transaction relating to the loan and the disbursement of its proceeds ; and when the contractor defaulted in the completion of his contract, the claimant Harrison Supply Company, on December 20th, 1919, served its claim and stop-notice for $966.27, against complainants, addressed to the “Lloyd Estate, care of Fred Stickel,” on Halsey W. Stickel, as the attorney, agent or representative of the owners, and duly received from him an acknowledgment of the service of the same. On January 20th, 1920, the claimant Builders’ Material Supply Companjr, duly served its claim and stop-notice for $2,636.75 upon Halsey W. Stickel as the representative of “Frederick G. Stickel, who was disbursing the funds for the construction of the building;” and also' upon John C. Lloyd, one of the co-owners; on October 5th, 1920, this claimant also served a like stop-notice on Mrs, Madaline Lloyd Goodrich, another co-owner, and on October 19th, 1920, this claimant served a. like stop-notice on Mrs. Caroline L. Strobell, the remaining co-owner.

On February 3d, 1920, the claimant New York Cornice and Skylight Works served its stop-notice for $597.14 on John C. Lloyd, one of the co-owners.

Complainants thereupon filed their bill and paid the balance of $1,529.31 in their hands, due on the contract, into court, and as this fund is insufficient to satisfy these claims which aggregate over $4,100, a controversy among the claimants, on the question of priority, has arisen out of the manner of service and the person upon whom the stop-notices were served.

The question thus presented for determination is, Was the service of the stop-notice, of the Harrison Supply Company, the first in time, upon Halsey W. Stickel, a compliance with the provisions of section 3 of the Mechanics’ Lien act (Comp. Stat, p. 3294), which requires such stop-notice to be served upon' the owner, or owners ? This claimant contends it was, because it claims Judge Stickel, or his firm, were acting in the entire transaction as the agents or attorneys of the owners, and that Halsey W. Stickel, as an employe of the firm, attended to all matters relating to this building contract and loan.

The proofs do not support 'this contention; but on the contrary, they show that Judge Stickel was strictly limited, in his agency for the owners, by the terms of the power of attorney they gave him, and as he had neither the expressed nor implied authority from them to accept or to acknowledge services of stop-notices for them, he was without power to delegate such authority to Halsey W. Stickel, and the record does not show that he ever did so.

The right of the claimants to serve stop-notices affecting the fund rests upon the provisions of section 3 of the act, and it is not unreasonable to ask from the claimants at least some semblance of a compliance with the statutory requirements.

'The court of errors and appeals in the case of McNab Manufacturing Co. v. Building Co., 72 N. J. Eq. 929, held that the provisions of section 3 should be liberally construed in favor of claimants, but this does not require a construction so liberal as to ignore the explicit directions of the statute, particularly where other claimants have actually and¡ literally complied with its requirements.

It is further contended on behalf of this claimant, if the service of its notice upon Halsey W. Stickel, instead of upon the owners, was for this reason defective, that such defect was cured by the owners’ ratification of his action, in acknowledging service of the notice. There is no proof of such ratification, unless it can be implied from the allegations of the bill of complaint, to the effect that this claimant, among others, claims some part of the fund, but if there had been an expressed ratification, it could not, under the circumstances, have the effect claimed for it, where, as here, there are other claimants 'to the fund, with equal rights under the statute, and who have asserted their rights by the service of their stop-notices, personally, upon the owners, as the statute expressly requires.

My conclusion is that as the service of the stop-notice of this claimant was not made upon the owners as the statute requires, its claim must therefore be disallowed.

The Builders’ Material Supply Company, the second claimant in point of time, made a like defective service of its stop-notice upon Halsey W. Stickel, but cured this service by making, at the same time, actual personal service upon one of the co-owners, and later by maiding personal service of its notice upon the other co-owners. The service upon the first co-owner was made some weeks before similar service of the stop-notice of the remaining claimant was made upon the same co-owner.

The Builders’ Material Supply Company is the only claimant whose stop-notice was served “upon the owner or owners,” as the statute requires.

The third claimant concedes that the stop-notice of the BHiilders’ Material Supply Company was served prior to the service of its own stop-notice, and because of the like service of its own notice, it does not dispute the claim that service upon one of the co-owners was service upon all, and such dispute, under the circumstances, would be futile, because eventually service of the second claimant’s notice was made personally upon all'the owners; and I will therefore advise that the fund be paid on account of the claim of the Builders’ Material Supply Company.