text:
    Elizabeth Ashhurst v. William Hubley Potter et al.
    Testator devised his residuary estate to his executors, to be equally divided among his five children, the shares of the sons to be paid to them respectively when they attained the age of twenty-one, the daughters to receive the interest on their respective shares yearly during their lives; “but if either of them die without issue, her share is to go to her surviving brothers and sister equally to be divided between them.” — Held, that on the death of a daughter without issue after the death of a brother who left children, such children were not. entitled to any part of the daughter’s share, and this share will go to a surviving brother and sister of the deceased daughter.
    On bill, answer and replication.

      Mr. William M. Laming, for the complainant.

      Mr. Charles E. Gummere and Mr. Frauds Rawle (of the Philadelphia bar), for the defendants William H. Potter, Fidelity Insurance Company et al.

      Mr. S. Meredith Dickinson and Mr. A. T. Freedley (of the Philadelphia bar), for the defendants Thomas F. Potter et al.
   Emery, V. C.

This case involves the construction of the residuary clause of the will of Thomas F. Potter, and the disposition of a corpus or principal fund, in which Alice Potter Lippincott, one of the testator’s daughters, had a life interest. She is now deceased, and the precise question is whether the fund in which, by the residuary clause, she had a life interest, is to be equally divided between a brother, William Hubley Potter, and a sister, Elizabeth Ashhurst, the complainant, who survived Alice Lippincott, as the persons solely entitled to the fund, or whether the children of a brother, John Potter, who died after the testator, and before his sister, Alice Lippincott, are also entitled to share in the fund. The fund is now in the court of chancery, which is administering the trust through Hugh H. Hamill, esquire, and the complainant, Mrs. Ashhurst, files this bill, praying payment of one-half of the fund to her, making defendants to the bill William Hubley Potter, the surviving brother, and also the children of John Potter, the deceased brother, who claim one-third of the fund as vested in their father on the death of the testator, and therefore passing to them. The husband of Alice Lippincott and the assignees of William Hubley Potter, are also parties.

The portions of the will which are material to the decision of the case are as follows:

“Fourth. I give and bequeath unto my executors hereafter named, and the survivors or survivor of them, the sum of fifty thousand dollars, in trust nevertheless, and for the use of my son, James Potter, in order to put him upon a footing of equality'with my other children, for whom provision has been made by the will of their grandfather, the said sum of fifty thousand dollars to be paid to him when he arrives at the age of twenty-one; the interest in the meantime, or so much thereof as may be necessary for that purpose, to be applied to his education and support.
. “Fifth. All the rest and residue of my estate real and personal, wherever it may be situated, and of whatever it may consist, I give and devise unto my said executors, and the survivors or survivor of them, in tru'st nevertheless, and for the use of my children John Potter, William Hubley Potter, Elizabeth Potter, Alice Potter and James Potter, and to be equally divided between them, share and share alike; the shares of my said sons to be paid to them respectively as they attain the age of twenty-one, the interest in the meantime, ■or so much thereof as may be necessary for that purpose, to be applied by my ■executors to their education and support; but in the case of my said daughters, ¡my will is, that the interest of their respective shares is to be paid to them yearly during their lives, and in case they should marry, not to be under the control of their husbands or liable for their debts; and upon the death of my said daughters, their respective shares are to be equally divided among their children; but if either of them die without issue, her share is to go to her surviving brothers and sister equally to be divided between them.”

Alice Potter Lippincott, one of the daughters, has died without issue, leaving her surviving one brother and her sister, and also the children of another brother, all claiming under the last clause of the fifth item.

The construction of this will seems to come within the application of the general rule of construction recognized by Chancellor McGill in Dutton v. Pugh, 18 Stew. Eq. 426, 431 (1889), as established by the cases there referred to. This rule is, that where there is a devise or bequest for life, followed by a devise or bequest to “ survivors ” at the termination of the life estate, the word survivors,” in its natural and ordinary meaning, refers to the survivors at the time of distribution; and unless, upon taking the whole will into consideration, the word is plainly used in some other sense, this ordinary and natural construction must prevail.

The special clause in controversy here is this: “ If either of them (my said daughters) die without issue, her share is to go to her surviving brothers and sister equally to be divided between them.” This is the clause indicating, primarily and directly, who is to take a daughter’s share on her death without issue; and, reading this clause alone, it is, I think, impossible to say that the idea of survivorship of his daughters was not in the testator’s mind, and that testator did not intend that any one of the brothers and sister who were to take should survive the sister. If this be so, then, as Lord Selbourne says, in Waite v. Littlewood, L. R, 8 Ch. App. 70, 73 (Court of Appeals, 1872), there is undoubtedly a strong onus probandi cast upon anyone who would do violence to the literal meaning of that word. Counsel for the children of John Potter, admitting the general rule, and also the burden of proof east npon these children, claim that this construction of the word “ survivor ” is negatived by other portions of the will and by the general scheme of the whole will, which, as they claim, clearly establish that the words “ surviving ” brothers and sister, as used here, meant “other” brothers and sister, and that, therefore, the'estate in remainder vested in such “ other ” brother or sister immediately on the testator’s death, without reference to his or her surviving the life tenant, Alice. And many cases have been collected in the very able and exhaustive brief of Mr. Freedley, in which courts have, on a survey of the whole will, construed the word “survivor” as meaning “other.” Smith v. Osborne, 6 H. L. Cas. 375, and Waite v. Littlewood, supra, are illustrations of this class of cases. But these cases, almost, if not entirely, without exception, have been cases where the words “ survivor ” and “ other ” were equally apt and proper words to be used in designating the children or other relatives who were the objects of the gift over. A testator, for example, after a life estate given to one of his children, might well, in a gift over to his “ surviving children,” intend his “ other children,” and they would be properly designated as the children “other” than the life tenant. But in this case the word “ other,” as applied to the brothers and sister of Alice,- would be a misapplication of terms, inasmuch as the previous estate was that of the life tenant herself, and not an estate in one of her brothers or sister. One of her brothers or sister must first be designated by the testator as the life tenant, in order that there may be other “brothers and sister.” To construe “ surviving ” as meaning “ other ” brothers and sister, in this case, would, therefore, impute to the testator not simply the intention to use a word which did not express the idea of survivorship, but the intention to substitute another word, which is, strictly speaking, inappropriate.

In fact, it seems clear in this case that, in order to treat the estates limited over after the death of either daughter without issue as vested in the testator’s other children from the time of the testator’s death, it will be necessary either to strike from the will altogether the word “surviving” or to adopt, in lieu of this word, not the word “ other,” but some form of words such as “ above named,” or “ said,” or their equivalent. Either of these methods of construction altogether eliminate from the direct primary bequest to the surviving brothers and sister, not only the word “ surviving,” but also the whole idea of survivor-ship of his daughter, which seems clearly to have been in the testator’s mind in designating the objects of the gift-over, and neither of them should be adopted in the absence of clear and controlling expressions in other portions of the will.

Counsel urge very strongly that unless this word “surviving” is read as “ other ” or “ other-named ” brothers and sister, there must be an intestacy as to this corpus, because the- bequest over being “ to her surviving brothers and sister,” and there being but one brother surviving her, the clause of the will cannot be literally construed and an intestacy must result. But in the first place, it seems to me that the gift to surviving brothers must naturally be taken as including all or any surviving brother just as a gift to surviving children would naturally include a single surviving child as one of the objects of bounty. I therefore read this clause as certainly reaching a surviving brother and sister. Whether it can also be read surviving brother or sister in order to save what is claimed to be a possible intestacy hereafter as to Mrs. Ashhurst’s share, if a literal intérpretation of the clause is insisted on, need not now be considered. For, as it seems to me, counsel in reference to the occurrence of intestacy under any construction of this clause overlooks the fact that by the order and arrangement of the devises in the residuary clause an intestacy is provided against. The testator first vests in his daughters an absolute ownership of their shares of the same character as the ownership of the sons in their shares, and the subsequent clauses limiting the terms of this gift to a life interest in the daughters, with a bequest over, will take effect only so far as they fairly extend to control the previous gift of absolute ownership. So far as they do not extend or apply, by any fair or reasonable construction of the whole will, then the previous absolute devises or bequests will remain unaffected by the subsequent limitations. In this respect, this will differs from those in which the terms of the limitation over were the only portions of the will applicable to the disposition of the estate. In such cases, the construction of the will rests, to some extent, on the presumption against intestacy.

There remains to be noticed the argument that the general scheme of the will shows an intention to establish equality among the testator’s children, and that a construction of that part of the residuary clause now in question, which excludes the children of a deceased (child) from participation in the estate limited over, is opposed to this idea of equality. This argument, as applied to the present dispute, seems to me to beg the very question in issue. So far as relates to the original share of the residuary estate, the brothers are put on a basis of equality, both as to shares and extent of estate, but the sister’s original share is made unequal in extent by being limited to a life interest. The estate in remainder, in the share given to the sisters, is a new subject of disposition, as to which the testator has disclosed no intention whatever, except by the clause now in dispute. This clause gives the remainder, as he might well have intended to give it, to the surviving brothers and sister of a daughter dying without issue and without reference to the children of a deceased brother. Nowhere in the will have the children of the sons been mentioned as objects of the testator’s bounty, and as the words of the limitation over in their natural construction exclude these children, the theory that they must be so construed as to include them in order to-effectuate a supposed intention of the testator to equalize the brothers and their respective children as to this share, seems to me to be without foundation.

I will therefore advise decree that under the will the surviving brother and sister take equal shares in the funds so limited over, to the exclusion of the children of John Potter.

This will not include any portion of the fund which Alice Potter Lippincott was entitled to receive as her one-fifth share in the estate of her brother James Potter, who died after testator’s death and in her lifetime. This one-fifth she held absolutely, and unless otherwise disposed of by her will, goes to her husband, the defendant J. D. Lippincott, as executor of his wife. The terms of this will are not set out in the pleadings, and as a portion of the interest of William H. Potter in the estate now in dispute has been assigned in trust, and the other defendants are interested, the form of decree should be settled on notice.


source: Caselaw Access Project

author: Reed, V. C.

license: Public Domain

text:
    Charles I. Bolles v. The Crescent Drug and Chemical Company.
    A, a corporation, entered into a contract with B, that B should at his own expense erect and operate a soda fountain in the store of A, and that B should receive eighty-five and A fifteen per cent, of the gross receipts, and that the contract should exist for three years. — Held, that the contract was not rescinded by a decree that A was insolvent.
    On appeal from the determination of receiver.
    The Crescent Drug and Chemical Company, on April 25th, 1893, entered 'into an agreement with Jacob and Henry A. Haussaling, executors of Henry Haussaling, by which agreement the said executors contracted to place, on the ground floor and basement of the premises of the Crescent Drug and Chemical Company, in the city of Newark, suitable soda water fountains and appliances for carrying on the soda water business, within thirty days from the date of the agreement, the said plant to remain the property of the executors. All the expense of doing' this was to be borne by the said executors.
    The executors agreed, in lieu of rent for the use of the said premises, to receive fifteen per cent, of the gross receipts of the sales made by them at the fountain. It was agreed, that all the receipts should be turned in daily to the cashier of the Crescent Drug and Chemical Company, and on the Monday morning of each week an account of the sales should be taken, and the amount of such' gross sales, less fifteen per cent., should be paid over to the executors. No cash was to be taken at the fountain, but a system of checks was to be employed, and such checks were to be delivered to the fountain for his or her order. All expenses of running the fountain, except the expense of receiving cash, was to be borne ■ by the executors. ■ It was stipulated that the agreement or lease was to continue in force for a period of five years, unless sooner abrogated by mutual consent, or violated' by the wrongful acts of either of the parties; and in case the lease or agreement should be violated by either of the parties, the party so violating it should be liable in full damages to the other completely. This agreement was signed by the respective parties.
    Subsequently the Crescent Drug and Chemical Company were decreed insolvent and a receiver was appointed. After such insolvency the lease was assigned by the executors to one Lillie I. Bolles, in March, 1894. The receiver terminated the soda water business and excluded the executors when he took possession of the premises of the insolvent corporation.
    Lillie I. Bolles, assignee of the contract, made her claim for damages by reason of such act of the receiver. The receiver interposed an objection to the claim, and the objection is, that the contract did not survive the insolvency of the Crescent Drug and Chemical Company.

      Mr. Edward H. Murphy, for the petitioner.

      Mr. Robert McCarter, for the receiver.
   Reed, V. C.

The single question submitted to me for decision is whether the insolvency of the corporation terminated the lease or agreement, the terms of which are already displayed.

It is, of course, not denied that, as a rule, the fact of insolvency will not rescind the contracts previously entered into by a bankrupt. Nor will the fact that the bankrupt is a corporation affect this general rule. The common-law doctrine that, upon dissolution, the property of the corporation reverted to the crown, has never been recognized in this country. Wait Insolv. Corp. §§ 381, 383; Mumma v. The Potomac Co., 8 Pet. 286; Curran v. Arkansas, 15 How. 304; People v. National Trust Co., 82 N. Y. 283.

And in this state, when the dissolution of a corporation is the result of insolvency, the statute provides that the assets shall be distributed to its creditors. Under the English bankrupt acts, while bankruptcy or insolvency did not discharge the contraéis of the bankrupt or insolvent, yet, in the distribution of the assets, inequality existed between different kinds of claims. The reason for this is pointed out by the chancellor in his opinion in Spader v. Mural Decoration Manufacturing Co., 2 Dick. Ch. Rep. 18. It was because there was no provision for the ascertainment of damages; therefore, all claims that sounded in unliquidated damages were, by judicial construction of the statute, disallowed. The only remedy left was an action against the bankrupt himself. It followed that when a bankrupt was sued, the test of the plaintiff’s right to pursue his action was whether the claim was provable in a bankruptcy proceeding. If it was provable, then that was the appropriate remedy; but if it was not provable, the liability of the bankrupt to the action remained. Boorman v. Nash, 9 Barn. & C. 145; Mills v. Auriol, 1 Hen. Bl. 433. This inequality has been remedied by the later English bankruptcy acts of 1862, 1869 and 1883 in a degree, and also by statute in many states. The English bankruptcy acts yet contain explicit directions in respect to the manner in which the trustee shall deal with creditors, so that many of the bankrupt cases in the English courts deal only with construction of these statutes. These cases are of little value as guides in the equitable distribution of assets under our Corporation act, as there are in our statute no restrictions aside from the primary maxim that equality is equity.

The question then remains whether the fact of the insolvency of this corporation annuls this particular contract. If so, it must be either because it belongs to an exceptionable class of contracts, or else because it contains in itself a provision for its own rescission in the event of insolvency. It would seem obvious that if the insolvency of a corporation is to be held to annul any class of contracts, that class would naturally be those which are dissolved by the death of one of the parties. Indeed, there is an intimation in the opinion in People v. Globe Mutual Life Insurance Co., 91 N. Y. 174, that insolvency is equivalent to death in cases of contracts for skilled personal services.

But the decision was not rested upon that point, but was put upon the ground that the service was interrupted by the act of the state, and that it was not shown that the dissolution was the result of any fault of the corporation. The ground of decision in that case does not seem to be very perspicuous or satisfactory in any view, but the case certainly does not hold that contracts for personal services are rescinded by the insolvency of a corporation.

This is apparent from the fact that the following cases were recognized as authoritative: Yellande’s Case, L. R. 4 Eq. 350; Clark’s Case, L. R. 7 Eq. 550; Logan’s Case, L. R. 9 Eq. 149; Maclure’s Case, L. R. 5 Ch. App. 737; Dean & Gilbert’s Case, L. J. 41 Ch. (N. S.) 476, and that there was only an attempt to distinguish these cases from the one then before the court.

This is the same group of cases properly relied upon by the chancellor in Spader v. Mural Decoration Manufacturing Co., supra, as authorities for fixing the measure of compensation for the loss of a contract for service as salesman and foreman for a term of years, which loss resulted from the insolvency of the employing corporation.

All the cases cited are of -this kind, the last one of them involving a claim for commissions, filed by a commercial traveler for services - rendered in the business of a company which had become insolvent.

But my attention has been called by counsel for the receiver to a line of cases in which it is held • that an assignee or a receiver of an insolvent lessee is not bound to pay subsequently-accruing rent according to the terms of the lessee’s covenant, unless the receiver retains possession of the premises, or by some act adopts the lease. And it is insisted that if we regard the present contract as a lease, and if we concede that the receiver of an insolvent lessee is exempt from any liability for the lessee’s covenants to pay rent, it must follow that the receiver of an insolvent lessor is equally irresponsible for the lessor’s covenants. The cases cited in support of the immunity of the lessee’s receiver, are these: Quincy M. & P. R. R. Co. v. Humphreys, 145 U. S. 82; Commonwealth v. Franklin Insurance Co., 115 Mass. 278; Woodruff v. Erie Railroad Co., 93 N. Y. 624; Stockton v. Mechanics’ &c. Bank, 5 Stew. Eq. 163.

The doctrine announced in these cases is traceable back to the cases of Bourdillon v. Dalton, Peake 238; Turner v. Richardson, 7 East 335; Wheeler v. Bramah, 3 Campb. 340; Copeland v. Stephens, 1 Barn. & Ald. 593.

At the period when the last-mentioned adjudications were pronounced, subsequently-accruing rent was regarded as a contingent claim which was not provable against the bankrupt under the then existing Bankrupt act. The assignee might, for the benefit of the bankrupt’s estate, choose to carry out the terms of the letting. If he did this the lessor got a right, not merely to share in the assets of the bankrupt, but he got a right to the payment of the whole of the rent according to the terms of the lessee’s covenant.

An assignee, after his appointment, has a reasonable time to look over the ground and determine what contracts he regards as beneficial or otherwise to the estate which he is administering. Subject to the control of the court appointing him, he can adopt an advantageous contract and repudiate an unfavorable one. If he concludes to insist upon the completion of the contract'by the contracting party, he must perform his side of the contract in full. If his performance involves the payment of money by him, such'payment he must make; but if he ignores the contract, the only redress of the other party is to ask leave to prove his debt or damages for the purpose of sharing in the assets of the insolvent.

In -instances where the insolvent holds a lease with covenants binding him to pay rent, this rule applies to the assignee in bankruptcy, or the receiver in insolvency. If he chooses to take possession of, or assume the management of, the estate, or do some other act indicating his intention to accept the term, a privity at once arises between him and the landlord and he becomes bound for the rent in full. Unless, however, the assignee or receiver assumed the lease, there was, under the earlier English statútes, no right to prove for subsequent rent. Nevertheless, it was never understood that the contract between the landlord and the lessor was discharged by the failure of the assignee to adopt the lease. Under the earlier acts the bankrupt remained liable for the rent. Tayl. Land. & T. 456; 3 Platt Leas. 354.

The later English bankrupt statutes contain provisions for a disclaimer by a trustee of an insolvent lessee of all right in the term, and so leave the landlord his reversion disencumbered of the lease. But by the extension of the right to prove for unliquidated damages arising from breach of contract, the landlord is not restricted to the mere return of the unexpired term. In Ex parte Llynvi Coal & Iron Co. re Hide, 7 L. R. Ch. App. 28, it was held that inasmuch as the effect of sections 23 and 31 of the act of 1869 is to relieve the bankrupt from every liability upon contract which he has ever entered into, and the creditor is so deprived of his right of action against the bankrupt, he can therefore prove against the estate in respect to any claim for which he could have sued the bankrupt if solvent. A landlord, although the trustee had disclaimed a lease, was held to be entitled to prove the difference in value of the term, between what he was to receive by his contract and the present letting value, of the premises for the same period.

To the same purport is the case of Ex parte Blake re McEwan, 11 L. R. Ch. Div. 572.

In this country the doctrine in respect to the right of the landlord to prove for subsequent rent varies. In some jurisdictions, following the earlier English cases already mentioned, no right in the landlord is recognized; • while in other jurisdictions a contrary view has been adopted.

In respect to the matter just mentioned, Chancellor Walworth, in his opinion in the case of Martin v. Black, 9 Paige 641, uses this language: “ If the assignee elects to waive the term and neither enters upon the demised premises nor does any other act signifying his acceptance of the term as assignee, he is not liable for the rent, but he must come in as a general creditor of a bankrupt’s estaté, or may sue the bankrupt for the rent subsequently accruing.”

In the case of People, v. National Trust Co., supra, in which it was held that a lease of a corporation was not terminated by its dissolution, and its covenant to pay rent does not thereupon- cease to be obligatory, the court remarked: “The position of a receiver is analogous to that of an executor. If he waives the term he cannot be charged as assignee of the lease, but if the landlord does not choose to re-enter, the estate of the testator may be liable for the rent in the course of administration.”

In the case of Stockton v. Mechanics’ &c. Bank, supra, Chancellor Runyon, while merely answering the question propounded by a receiver as to whether subsequently-accruing rent should be paid, and apparently be paid in full, seems, by the language of his opinion, to exclude the lessor from any right in the assets at all.' But, regarding that case as definitely denying the lessor’s right to so prove against the insolvent estate of the lessee, yet it is perceived that it, as well as the line of cases of which it is the sequence, deals only with the particular covenant to pay rent, after the landlord is at liberty to resume possession of the leased property.

The liability of the estate of an insolvent lessor for breaches of his covenants was not involved.

Nor can I perceive why the rule which sprang from the causes already mentioned should be applied to any other covenant of any other class of persons. Upon the theory, then, that the insolvent was a lessor, in my judgment its bankruptcy did not annul its liability to its lessee. If the receiver took possession of the estate of the insolvent landlord, he took it ovum onere, subject to the contract of letting entered into by the drug and chemical company. If he did not take possession, yet there is the personal undertaking of the lessor, which was broken by reason of the insolvency of the lessorand there is no technical rule, and no case, which shuts out a lessee from proving his damages arising from such a breach of contract.

But it is not to be conceded that the agreement under discussion, although styled by the parties lease or agreement,” creates any’tenure, or possesses any force other than as a contract for certain privileges in the premises of the drug company. It is perceived that by the terms of the agreement, no specified space and no particular location is assigned to the exclusive possession of the petitioner’s assignor. The privilege contracted for was to have a place assigned to them upon the premises, somewhere in the basement of No. 631 Broad street, and somewhere on the ground floor of No. 629 and 631.' It was an agreement to have the privilege of conducting a line of business in the premises of the defendants for a certain compensation, the amount of which was dependent upon the quantity of business done. This, in my opinion, can be regarded in no sense as a lease.

But as I understand the insistence of counsel, his main point is, that in this contract itself there is to be found an intention that its duration is to be limited to a period of time co-terminous with the continuation of the drug and chemical company’s business. The insistence is this : The drug and chemical company had the right' to terminate the relation between themselves and the executors whenever it pleased by the mere cessation of their business, and by the closing- of their premises; that the insolvency of the-company and the appointment of a receiver, which led to this condition of affairs, operated to produce the same result.

Now, undoubtedly, the parties had the right to so stipulate, but such intent I fail to discover in the contract itself. It is to be observed that there is nothing which indicates that the soda water business was to be a part of the business of the drug and chemical company. It is possible that it was in the mind of the contracting parties that the stand would be more favorable for the trade in soda water because the premises were to be used also for the ordinary business of a drug store. But this inference is only to be drawn from the frequent association of the two kinds of business. There is absolutely nothing to be found in the agreement by which the five years’ duration of its term is to be contingent upon the continuation of the defendant’s business.

Indeed, there is no undertaking on the part of the defendants to transact any particular business upon the premises; there exists no right in the executors to compel them to do so, and there is no condition that upon their ceasing to do so the contract duty of the executors should cease.

All that the drug and chemical company contracted to do was to permit the soda water people to have a space in their premises to put in position and operate a fountain. That, they were bound to do for five years, just as the chemical company was bound to afford them the privilege of doing it for the same length of time.

Nor do I see how the case of Aspdin v. Austin, 5 Ad. & E. (N. S.) 670, in the least supports the receiver’s contention. In that case the plaintiff agreed to manufacture cement for the defendant; the defendant, on condition of the plaintiff’s performing, promised to pay £4 weekly during two years, and £5 weekly during the next year, and also to receive him into partnership at the end of three years. In an action brought by the discharged servant upon an implied covenant to continue the business for three years, the court held that he had mistaken his remedy; that while the defendant was bound by his express covenant to pay during the period the amounts named, there was no implied covenant to continue the business during that period. It was held that although the defendant did not continue the business, yet he was bound to pay according to his promise so long as the plaintiff was ready to perform and was only prevented from so doing by the defendant’s discontinuance of the business. The rule in this case certainly does not aid the receiver’s construction of the contract.

In conclusion, it need hardly be remarked that a liberal view of the scope of the term “creditor” in our statute is absolutely essential in accomplishing an equitable result in the distribution of assets.

This disposition of the property of an insolvent corporation is its death; and if those who could have recovered from it, had it remained solvent and broken its contract, are precluded from proving their claims and sharing in the assets — they are left remediless.

Whether this petitioner should now be permitted to come in, or whether any particular amount of damages, under the circumstances, are provable, is not a question'submitted for my decision. Upon the question submitted I am of the opinion that the insolvency of the corporation did not rescind or terminate the contract now in question.


author: Van Fleet, V. C.

text:
    John H. Albert v. Clarendon Land Investment and Agency Company.

    1. The proceeding against a corporation, whether domestic or foreign, under sections 70 and 72 of the Corporation act (Rot. p. 189), is a proceeding in rem of a summary character, a receiver may be appointed with or without notice, and the corporation cannot, on motion, raise the question whether the court can acquire jurisdiction by publication and notice to make a decree of insolvency.

      2. A motion to dismiss the bill for want of equity is equivalent to filing a demurrer and amounts to such an appearance as confers jurisdiction.
    3. It is not necessary that a bill to appoint a receiver of a foreign corporation should allege that the defendant is doing business in this state at the time of the filing of the bill. It is enough if it is made to appear that the corporation has done business here and has property here at the time of the filing of the bill, even though the business has been entirely suspended.
    On motion to dismiss bill.
    A bill was filed against a foreign corporation by a stockholder thereof residing in New Jersey, asking that the corporation be declared insolvent and that a receiver be appointed. The bill alleges that the company was organized in England with a capital stock of £500,000, and “ that the company has carried on its business in different parts of the United States, including the State of New Jersey, and now has goods and chattels, choses in action and other property in or near Hackettstown, in this state, and that it has become insolvent and largely indebted beyond its ability^to pay and has recently suspended its business,” and has defaulted in the payment of certain debentures ; that certain judgments have been recovered against it in New York and it is hopelessly insolvent, and that its business cannot be carried on so as to pay its debts or yield a profit to its stockholders.
    There was an affidavit verifying the bill on information and belief and stating that the facts.set out were not denied, but were admitted by Alfred Sully, .the general agent of the com- , pany in the United States, and there was another affidavit reciting the judgments recovered in New York.
    On filing the bill and affidavit, a receiver was appointed without notice and an order of publication was made directing the corporation to appear and answer. Before the time for answering had expired,'a motion was made to dismiss the bill for want of equity, on the ground that it did not appear that the company was doing business in this state, and that it was not alleged with any certainty that it had such assets in the state as to warrant the court in assuming jurisdiction over it.

      Mr. Anthony Q. Keasbey, for the motion.

      Mr. John W. Taylor, contra.

      Note. — This, decision was rendered in 1891 and was not printed in its regular place, as no copy of it was furnished the Reporter. — Rep.

   Van Fleet, V. C.

The proceeding against an insolvent corporation, whether domestic or foreign, authorized by sections 70 and 72 of the Corporation act (Rev. p. 189), is a proceeding in rem. It may be commenced by bill or petition, and a receiver may be appointed with or without notice to the corporation, as the chancellor shall decide the exigencies of the case require. And if he orders notice to be given, he may direct that it shall be given either by service or by publication. The proceeding is summary in its character and strictly in rem. Its main object is to put the property of the corporation in the custody of the law, so that its proceeds may be applied in due course of administration to the payment of the debts of the corporation. The order appointing the receiver in this case is unquestionably valid, and I think it is equally indisputable that the receiver has, by force of it, full power to sell and transfer all the property of the defendant corporation in this state.

The defendant is not in a position where it can raise the question whether this court can require jurisdiction over a foreign corporation, by a notice pursuant to an order of publication, so as to pronounce a valid decree adjudging it to be insolvent and thereafter proceed to make distribution of its assets. The defendant has made a motion to dismiss the bill for want of equity under a notice given pursuant to paragraph 224 of the rules. This notice is, in all its essential qualities, under our practice, a demurrer. No one, I suppose, will pretend that if the defendant had filed a demurrer, that such act on its part would not have constituted an appearance to the suit for all purposes, and precluded it from denying that it was in court. And yet it has done that which, in all its legal consequences, is equivalent to the filing of a demurrer. The defendant must be held to have appeared to the suit and consequently to be now as completely subject to the jurisdiction of the court as if a formal appearance had been entered by it.

The defendant moves to dismiss the bill because it does not allege that the defendant was doing business in this state at the time the bill was filed. The defendant is a foreign corporation. Our statute concerning corporations declares that foreign corporations doing business in this state shall be subject to its provisions so far as the same can be applied to them. Rev. p. 196 § 103. The bill alleges that the defendant “ has carried on its business in different parts of the United States, including the State of New Jersey, and now has goods and chattels, choses in action and other property in this state, and that it has become insolvent and largely indebted beyond its ability to pay, and has recently suspended its business.” The meaning of that section of the statute which I have quoted seems to me to be clear. It was enacted to give this court the same jurisdiction over foreign corporations doing business in this state, when they become insolvent and have property here, that it exercises over insolvent domestic corporations, so far, at least, as should be necessary for the sequestration of their property here, and converting the same into money. To authorize this court to appoint a receiver of an insolvent foreign corporation, it is not necessary that the corporation should be engaged in carrying on its business in this state on the very day when the bill or petition is filed, but this court may take jurisdiction in any case where it is made to appear that the corporation has done business here, and still has property here, although at the time when the bill or petition was filed, its business here is entirely suspended. The obvious design of the statute is to give the creditors of any foreign corporation which, having done business in this state, becomes insolvent and has property here which should be administered for the benefit of its creditors, the same remedy against the corporation, in respect to its property here, that it gives to the creditors of an insolvent domestic corporation. Any other construction would, as it seems to me, defeat the main object of the statute and render it worthless. Under this construction there can be no doubt that the bill in this case is sufficient.

The motion to dismiss is denied, with costs.


author: The Ordinary.

text:
    Charles H. Burr v. Adele Boyer Burr.

      1. Where, in a cause respecting the probate of a will, the validity of the will is not questioned, but probate is resisted on other grounds and is granted, the costs and expenses of the litigation will not be charged upon the testator’s estate.
    2. Where a contestant resists the probate of a will upon an immaterial issue, under misapprehension of the law, which is not disabused by the court, and is shared in by the proponent, the contest will not be deemed, upon admission of the will to probate, to have been with reasonable cause, so as to justify the charge of the costs and expenses of the litigation to the testator’s estate.

      On appeal from an order of the Camden County Orphans Court, which directs payment of the' costs and expenses of a will contest out of the estate of testator, where the will was admitted to probate.
    Edward E. Burr, who had theretofore been a resident of Camden, in this state, in November, 1890, in pursuit of health, moved to Asheville, North Carolina, where, after a sojourn of a little more than two years, he died. At the time of his death he was the owner of both real and personal estate in Camden. He left a widow and a child by a former wife, surviving him, and also a will, dated in 1889, while he was unquestionably domiciled in Camden, in and by which, after directing the payment of his debts, he provided that his widow should have such interest in his estate, real and personal, as she would be entitled to under the laws of this state were he to die intestate, and then devised and bequeathed the residue of his estate to his mother for her life, and at her death to his brother in fee, and made the brother the executor of the will.
    The will was offered by the executor for probate in Camden county, and the widow there eaveated against its admission to probate, first generally, and later, by a supplemental caveat, which specifically alleged, as a ground for the denial of probate in that county, that the testator was domiciled at his death in Asheville, North Carolina.
    Prior to the filing of the supplemental caveat, the proponent procured the appointment of a commissioner to take the testimony of witnesses in Asheville, and, after giving due notice, proceeded to prove the laws of North Carolina relative to the distribution of personal property and the formalities with which wills must be executed in that state, and to show that the decedent had not, during his sojourn in Asheville, the animus to make that place his domicile. On the conclusion of the taking of those depositions, the caveatrix likewise took depositions at Asheville upon the question of domicile, to show its change from Camden to Asheville, and thereafter the taking of testimony upon that issue was continued without objection that it was immaterial, being sharply and distinctly insisted upon, until just prior to the proponent’s rebuttal, and .the taking of proofs were almost concluded, when the proponent’s counsel raised the objection and expressed the desire to be heard upon it. The taking of testimony, however, having gone so far, the orphans court directed that it should be concluded before the argument offered should be heard.
    Pending the taking of the testimony in Gordon’s Case, 5 Dick. Ch. Rep. 397, it was decided in this court that a will might be proved in this state, even though the testator at his death should be domiciled elsewhere and the will had not been first proved at the place of the domicile. Controlled by the Gordon Case, and there being no other ground of contest, the orphans court admitted the will to probate, and thereafter, by subsequent order, directed that the costs of the contest and a counsel fee to each party thereto be paid out of the decedent’s estate. It is. from the latter order that the appeal now considered is taken.

      Mr. Henry I. Budd, Jr., for the appellant.

      Mr. James R. Hays, for the respondent.
   The Ordinary.

The will appears to have been executed with due formalities and to be a valid instrument, under the laws of both New Jersey and North Carolina, and hence it is difficult to perceive what advantage would have accrued to the respondent if probate in this state had been defeated on the ground urged by her. It is certain that no advantage, which can justify so expensive a litigation as this has been, has been pointed out to me.

It is prescribed by statute (Rev. p. 791 § 177) that in causes respecting the probate of wills, if probate be granted, the court shall order the contesting party to pay the costs and. expense of the litigation, unless it shall appear to it that such party had reasonable cause for contesting the validity of the will, or shall not have offered other testimony than that of the subscribing witnesses, and that if such reasonable cause shall appear, the court may throw the costs and expense of the litigation upon the estate of the testator.

The statute is but an emphatic declaration of the previously-, existing law upon the subject of such costs and expense, save in the particular that it renders it obligatory upon the court, in case of the grant of probate, to order the contestant to pay the costs and expense of the litigation, unless he shall show reasonable ground for disputing the validity of the will or shall have confined his contest to the testimony of the subscribing witnesses. Perrine v. Applegate, 1 McCart. 531. It is observed that the saving clause relating to reasonable cause, is limited to contests where the validity of the will-is drawn in question. It does not apply where the issue made is as to the court’s jurisdiction, which does not deny the validity of the instrument. Such literal construction appears to me to be not only the interpretation of the statute which will harmonize and retain all its language, but also that which accords with the legislative purpose, which was to rebuke a theretofore habitually unjust exercise of judicial discretion, by the several orphans courts. Perrine v. Applegate, supra.

Under this construction, the costs and expense of the contest upon the question of domicile must be charged -to the contestant and not upon the testator’s estate.

But it is not necessary, to the decision of the present matter, that I shall rest alone upon the construction of the saving clause stated. Taking that clause to permit the costs and expense of any contest against probate founded upon reasonable cause to be thrown upon the testator’s estate, I reach the same conclusion. The practical advantage of this contest, looking at it in the light of every possible event, is not apparent. The will was unquestionably valid both in New Jersey and North Carolina. It specified what the contestant should take and disposed ultimately of all other property of the testator.' It is not perceived how the place of probate would affect the contestant’s interest a particle. If, after probate, the contestant should dissent to the provisions of the will in her behalf, the question of the domicile of her husband might become important, but until that event it would be unimportant. Why, then, as a practical question, should she propose and litigate the question of domicile?

But more than this, although, when the will was offered for probate, the question whether it might be admitted to probate in this state in the first instance, the domicile being elsewhere, had not been directly settled by adjudication in Yew Jersey, that question was so well determined by the current of adjudication elsewhere, that it could hardly be considered open even in this state, and it certainly was not a question which would justify a contest from which no substantial benefit could accrue to the contestant.

I find, then, that there was no reasonable, cause for the contest.

The orphans court should have ordered the contestant to pay the costs and expense of the litigation — that is,' of the contested issue in the-case. But the costs and expense so charged should not extend to the petition for probate, nor to the expense of taking the testimony of the subscribing witnesses nor to expense or costs by reason of other matters, if any, not involved in the trial of the contested issue.

Yo counsel fees on either side .should be allowed.

The proponent should not be given a counsel fee from the estate because of the litigation, although he be executor of the will, because, at the outstart, by taking the initiative in the production of evidence concerning domicile, he was instrumental in inviting and encouraging contest on that ground, for which reason it would be unjust, he, as well as the contestant, being a beneficiary of the will, to give him the advantage of having his counsel fees páid out of the estate, which is partly of the contestant’s property, while the contestant, who has been but little more guilty than he, is charged with the whole costs and expense of the litigation, besides her own counsel fees.

Costs not chargeable to the respondent as stated should be paid out of the estate.

The order appealed from will be reversed, with costs.


author: Beasley, C. J.

text:
    James Severs et al., appellants, v. Truman M. Dodson et al., respondents.
    1. A voluntary conveyance is not, per se, void except as against present debts.
    2. An accommodation endorser of a promissory note that is not dishonored is not a present debtor.
    3. Quaere — Can the chancellor decree the sale of land that has been conveyed by way of gift in favor of a creditor at large ?
    On appeal from a decree advised by Vice-Chancellor Bird, whose opinion is reported in Dodson v. Severs, 7 Dick. Ch. Rep. 3

      Mr. Garret D. W. Vroorn and Mr. William M. Banning, for the appellants.

      Mr. John H. Baches, for the respondents.
   The opinion of the court was delivered by

Beasley, C. J.

This bill was filed by the respondents, as creditors at large, to set aside a conveyance made by their debtor to his granddaughter.

The grounds taken before the vice-chancellor, on the part of such complainants, was that the transfer of the property was in pursuance of a scheme to defraud and delay creditors, or, failing in that contention, it was insisted that the conveyance was, at all events, without consideration, and was, therefore, constructively fraudulent as against existing debts, to which class it was alleged the claim sought to be enforced belonged.

By way of answering these grounds, the defendants contended that there was no fraud ; that the conveyance was not voluntary, and that if the transaction was a mere gift, nevertheless it was equitable and legal, inasmuch as it was not an arrangement hostile to creditors.

The vice-chancellor’s consideration of the facts led him to the conclusions that the deed was voluntary and that there was no' actual fraud in the affair, but that, as the debt in question was in existence at the time of the gift, such conveyance should be annulled in accordance with the rule established in the case of Haston v. Castner, 4 Stew. Eq. 703.

The result was ■ a decree setting aside the conveyance and ordering the land to be sold, the proceeds to be applied to the payment of the debt due the complainants, the amount of which was ascertained by the court.

With respect to the facts that the conveyance was purely voluntary, and that it was not .tainted with fraud, the opinion of this court is in all respects in accord with that of the vice-chancellor. This part of the case is deemed so plain as to render all discussion of the subject utterly superfluous, but we think that the other essential fact, viz., that the complainants were creditors at the time of the transfer of the property, so • far from being proved, was negatived by the evidence.

On this subject, the uncontested facts were these: The deed of gift was dated the 3d day of April, 1886, and at that time the donor, one James Taylor, was the accommodation endorser for one Davis, who was in debt to the complainants. From time to time these notes were renewed as they fell due, the old ones being regularly taken up and new ones substituted. None of this paper was dishonored before the making of the conveyance in question, the first of them being protested about a year after that event.

The inquiry therefore arises, whether this situation placed this case within the operation of the rule defined in Haston v. Castner, already cited. The doctrine propounded in that authority is this: that if a person be indebted to another at the time of a voluntary settlement made by him, such disposition is presumed to be fraudulent with .respect to such debt, and no circumstances will suffice to repel the legal presumption of fraud.

This doctrine, after full consideration, was established by this court, and' it is not intended, on this occasion, to modify it in any degree. It is true that the propriety of this principle has been much discussed and much doubted, both in England and in this country, and such investigation has exhibited great contrariety in judicial opinion, but, as the question is hot deemed to be an open one in this state, it would be but to supererogate to review that line of authorities.

Accepting, then, as a datum, that the gift now in question is void as respects cotemporaneous creditors, the only interrogatory here apposite is, did the complainants belong to such class ?

This question, we think, must be answered in the negative. At the time in question they were not creditors of the donor. It is readily admitted that they were such in a sense that entitled them to the remedies provided in the act for the prevention of frauds and perjuries. They can, undoubtedly, set aside conveyances and transfers of property made to defeat their just claims. But at present we are not called upon to construe the statute itself, our present function being to construe the rule of evidence that this court has superinduced upon the statute. This discrimination has not always been made, and the omission has confused the subject. - The act invalidates certain transfers of property infected with fraud. The rule now being considered relates to the proof of such fraud, declaring that the cotemporaneousness of the gift and the debt establishes it for certain purposes and to a definite extent.

We have said the complainants’ case does not fall within this evidential rule, the reason being that they were not creditors of the donor. The latter was an accommodation endorser of current notes, and the situation did not constitute him a debtor. His assumptions might not have ripened into debts; whether they would have that effect was altogether contingent. It is obvious that to bring this case within the principle in question it is necessary to amplify, very greatly, its scope, for its terms existing debts ” would have to be metamorphosed into “ existing liabilities.” Such a change would be so fundamental as to deprive the principle itself of all semblance of reason or expediency.' When a man is in debt, especially if such debts be due, it is certainly not irrational to infer, if he give away his property, that the intention was to defeat such claims, but such deduction would seem to be most extravagant if, instead of a present indebtedness, he has incurred a mere liability as a warrantor of title, as a tort-feasor, or as surety on an administrator’s bond. If such responsibilities as these latter, which may, in the long run, be transformed into debts, should have the effect of invalidating voluntary settlements of property, then such settlements would be the most uncertain of legal transactions. It is plain that by force of so absurd a principle all donations would, in a measure, be made contingent, and would many times remain so beyond the lives of the donor and donee.

The result, therefore, is that in order to bring a case within the operation of the rule in question, there must be a present indebtedness, and not a mere probability of future indebtedness.

The question thus considered and disposed of has never heretofore been presented to the courts of this state for decision. There are, indeed, cases that approach it but do not embrace it. What are “ existing debts ” within the meaning of the statute of frauds has been several times sub judice, but what are existing debts within the rule of evidence above defined, has never before been adjudged. It will be observed that it has been already stated that, with respect to the statute, most present liabilities are under its protection against conveyances that are actually fraudulent, but that it is only debts, in the strictest terms, to which the judicial rule that, with respect to them, a voluntary transfer of property shall be void whether such transfers be fraudulent or not, is applicable. It is the former of these principles that has alone been illustrated in our decisions. Thus, in Cook v. Johnson, 1 Beas. 52, the plain case was presented of an endorser of a dishonored note being deemed a debtor after protest. Phelps v. Morrison, 9 C. E. Gr. 196; Schmidt v. Opie, 6 Stew. Eq. 138; Post v. Siger, 2 Stew. Eq. 554, are all cases in which fraud in fact existed, and were each decided on that basis. The judicial expressions used on these occasions are to be received as authority only to the extent that they regulate the class of facts to which they are applied. All that is decided is that a contingent, liability, as that of an accommodation endorser, will lay a ground for a proceeding under the statute to set aside any transfer of property made in fraud of the holder of the claim. None of them decide that a contingent liability will, per se, raise an irrefutable inference of fraud so as to invalidate a conveyance made during the continuance of such a condition of affairs. ■

The case of Dodson v. Taylor, 24 Vr. 200, is not in any wise relevant to our present inquiry. The question then under advisement was, whether an accommodation endorser; before dishonor, was a debtor within the meaning of the statute for the relief of creditors against “heirs and devisees.”- The case presented was plainly within the statute. In the case of New Jersey Insurance Co. v. Meeper, 8 Vr. 282, it was declared that the act embraced within its policy even so uncertain a liability as inhered in a warranty of title to lands. It is true that in the opinion read in Dodson v. Taylor the view is expressed that by the mere act of endorsement a person becomes a present debtor. It is said: But, from the time of the endorsement, he is bound for the payment of the debt, and a person so circumstanced is in both common and legal parlance, a debtor.”

It is hot perceived how this doctrine is to be sustained. So far as is known, no person ever thought or styled himself, or was styled by others, a debtor by reason of his having become an accommodation endorser. If a merchant were called upon to make out a list of his debts, it is not believed that it would ever occur to him to put in such account the moneys called for in the paper that had been gratuitously endorsed by him, •Under the law of this state, the debts of the citizen taxed can, to a certain extent, be deducted from his assessment, and certainly no one can doubt that if any personj for such a purpose, should include, in his sworn statements the amounts secured by his accommodation endorsements, such taxpayer could be convicted of perjury. The hypothesis suggested would, in practice, be fraught with embarrassments. If, by the mere endorsement, the endorser becomes, ipso facto, a debtor of the holder of the note, then, by parity of reasoning, it follows that, from the same cause, the maker of the paper becomes the debtor of the endorser. And indeed it has, on several occasions in legal practice, been attempted to utilize this notion in the entry of judgment on bonds with warrants of attorney. Such was the cause essayed in the case of Blackwell et al. v. Rankin, 3 Halst. Ch. 152, the facts being that the plaintiff had taken judgment on an affidavit showing that he was the endorser on cértain notes of the defendant, and which situation, it was insisted, showed a present debt. This contention is thus met by the chancellor. He says: It is an abuse of language to say that, because I endorse your note to-day, payable three months hence, to be used by you, you are indebted to me to-day for the amount of it, and that it is a debt due and owing to me to-day.” This doctrine is pointedly approved by this court in Clapp v. Ely, 3 Dutch. 592.

But it is to be remembered that, while • the phraseology in question is deemed to be open to this criticism, nevertheless, in the connection in which it was used, it probably embodies the legal rule that the relation which the holder and endorser of a promissory note bear to each other is that of potential debtor and creditor, which is all that is required by the statute giving relief to creditors against devisees or legatees. This construction was the result of a consideration of the lax language of the act as enlightened by its evident policy. It was a remedial measure, and wasj therefore, to be liberally construed.

But the present case demands the application of a rule the most opposite of this. We are not now called upon to ascertain the meaning of statutory language in legislative policy, our entire province being to demarcate the rule of evidence promulgated by ourselves, that makes the existence of fraud in voluntary conveyances, under a certain condition, a mere inference of law, irrespective of the truth. The rule is one of the most rigorous character, having the operation of an estoppel, and is to be kept within the narrowest limits. It is, therefore, enough for this court to say that the contingent liability of an accommodation endorser, before dishonor, does not make him a debtor so that the holder of the paper can invalidate a voluntary conveyance made by him when there was no actual fraud in the transaction.

It is obvious that the case of the complainants, as exhibited in the proofs, will not stand the test of the foregoing exposition of the equitable rule in question; the decree, consequently, must be reversed and the bill dismissed.

Before leaving this case, it seems to me that' there are certain matters which, although they appear to have escaped the attention of counsel, should not be passed in this court sub silentio. They are alluded to only for the purpose of excluding the conclusion ” that the present course of law has our sanction.

The general theory exemplified in the bill before us is, that a creditor, having neglected or refused to present his claim to the executor within the time limited by the court, can, at his will, proceed in equity and levy his debt out of any lands that his deceased debtor has honestly settled on any member of his family, and this without regard to the condition of the assets of his debtor’s estate. Plainly such a rule would be productive of the most flagrant injustice. In the present case, why should this gift to the granddaughter be defeated unless after the exhaustion of the other assets of the estate? The claim is of a right to pass by the primary assets and sequestrate this donation in their stead.

Again, the decree finds the estate of the donor is indebted to the complainants in the amount of several thousand dollars, and yet the personal representative of that estate is not- a party to the suit.

Again, the complainants are creditors at large, and the bill is personal and not in behalf of themselves and other creditors similarly situated.

And lastly, the decree orders the land in question to be sold for the payment of the complainants’ debts.

Does the chancellor possess the power to direct a sale of these premises ? Whence is such power derived ?

The decree for the debt must be construed to be against the executors of the donor, although they are not present, and such decree does not bind the lands of the deceased. Authority is conferred by statute upon the orphans court to order the lands of a decedent sold under certain circumstances, to settle the claims of creditors, but no such jurisdiction is given to the chancellor.

Under such circumstances as are here disclosed, it is entirely unsettled what course is to be taken by the creditors. The subject is both important and difficult; it has not been noticed either by the vice-chancellor nor by counsel, and as this court is not at present called upon to consider it, we leave it as we found it, undecided.

In order to avoid misconception of my own personal views on the subject above discussed, I deem it best to make the remark that in my opinion the inquiry is open to this further consideration, whether or not the rule that a voluntary transfer of property, unattended with fraud, is invalid with respect to existing debts, is applicable, unless such debts be past due at the time of the impeached transaction.

For reversal — The Chief-Justice, Garrison, Gummere, Lippincott, Magie, Van Syokel, Bogert, Brown,, Sims — 9.

For affirmance — None.


text:
    Henry A. V. Post and George Blake, appellants, v. Andrew Kirkpatrick, receiver, respondent.
    1. On a bill calling for a personal decree, an order for publication of the usual notice to non-resident defendants, is not objectionable, even though a decree cannot be taken against such defendants if they fail to appear.
    2. What decree, if any, can be made against such absent defendants is not considered.
    On appeal from an order advised by Vice-Chancellor Emery, whose opinion is reported in Kirkpatrick v. Post, 8 Dick. Ch. Rep. 591.

      Mr. Richard V. Lindabwry, for the appellants.

      Messrs. Coult & Howell, for the respondent.
   The opinion of the court was delivered by

Beasley, C. J.

The purpose of the receiver in filing this bill was to call to account, under the statute of this state, certain of the directors of the insolvent corporation represented by him, for the unlawful payment of dividends out of the capital of the company. The appellant is one of the directors thus arraigned, and as he is a non-resident, the usual order of publication was taken directing

“that the said absent defendants do appear, plead, demur or answer to the complainants’ bill on or before &c., or that, in default thereof, such decree be made against them as the chancellor shall think equitable and just.”

On petition filed, the appellant was permitted to come in and move to discharge this order of publication.

On the motion thus authorized coming on to be heard before his honor, the vice-chancellor, it was urged in behalf of the appellant that as the bill sought a personal decree against him, and as he was a non-resident, he could not, by publication, or by a notice served upon him out of the state, be subjected to the jurisdiction in which the suit was pending. It was insisted with great force and much learning that such a course of law was inconsistent with fundamental principles, and as it was not due process of law,” was prohibited by the fourteenth amendment of the constitution of the United States.

With respect to this argument, this court agrees with the vice-chancellor that it is not relevant to the motion in question. It does not touch the question whether a notice of a pending suit is proper or not. Indeed, if we concede the principles propounded by counsel, all objections to the notice seem to be exploded. Why should the appellant object to a notice that cannot be followed by a decree against him ? Plainly, it is not to be assumed that the court of chancery will pronounce a decree founded on this process that would be illegal and contrary to the federal constitution, as a mere notice to the appellant of the pending litigation, thus affording him an opportunity of coming in and taking part in it if he sees fit; it cannot be a subject of complaint, as it can do him no harm.

The court, therefore, does not feel called upon to speculate with respect to the force, if any, that would be inherent in a personal decree against the appellant founded on this proceeding in question. To do so would be, in the language of an old report, “ to jump before we come to the stile.” All that is at present decided is that the publication of this notice is unobjectionable, and that the vice-chancellor rightly refused to suppress it.

Let the decree be affirmed.

For affirmance — The Chief-Justice, Depue, G-ummere, Lippincott, Ludlow, Magie, Van Syckel, Bogert, Brown, Krueger, Sims, Talman — 12.

For reversal — None.


text:
    The Mutual Reserve Fund Life Association, appellant, v. John Bradbury, respondent.
    1. When a bill is demurred to the case must be decided on the issue thus raised.
    2. The demurrer cannot be defeated by interpolating the bill with certain suggested amendments at the time of the hearing.
    , On appeal from an order advised by Vice-Chancellor Pitney, whose opinion is reported in Bradbury v. Mutual Reserve Fund Life Association, 8 Dick. Ch. Rep. 306.

      Mr. J. Frank Fort, for the appellant.

      Mr. John Ch'iffin, for the respondent.
   The opinion of the court was delivered by

Beasley, C. J.

The bill was filed by the respondent, praying to be restored to membership in the association, which is the appellant in this case. To this bill a demurrer was put in, on the ground that it disclosed no ground for equitable intervention.

The argument for this issue came on for hearing before his honor Vice-Chancellor Pitney, who, at the. hearingj said: The bill is somewhat meagre in its statements, so much so that complainant’s counsel suggested an amendment. "Without determining whether it is sufficient in its present shape, I will consider it as if amended as suggested.”

What such suggested amendments were is not shown, but his honor proceeded forthwith to dispose of the case upon a statement of facts partly derived from the bill and partly, as is conjectured, from the amendments as proposed by the complainant.

The result was that the demurrer was overruled.

This court is of opinion that this procedure is radically wrong. Never before in the legal practice of this state has a demurrer to a bill been defeated by amendments. In the case before us it was defeated by proposed amendments. If a decree can be thus founded, it is plain that it would not be reviewable by this court, for there would be before us no record raising an issue for decision. The course pursued seems abnormal and has no semblance of a precedent.

Let the decree be reversed.

For reversal — The Chief-Justice, Depue, Gummere, Lippincott, Ludlow, Mague, Van Syckel, Bogert, Brown, Smith, Talman — 11.

For affirmance — None.


text:
    The New Jersey Building, Loan and Investment Company, appellant, v. The Cumberland Land and Improvement Company, respondent.
    A second mortgagee making payments on the first mortgage will, under ordinary circumstances, be subrogated under the first mortgage to the extent of such payments, the residue of the claim of the first mortgagee having priority to the lien acquired by such subrogation.

      On appeal from an order advised by Vice-Chancellor Bird, who delivered the following opinion:
    On considering the principal exceptions, the question is whether or not there was a complete agreement or understanding between the parties with respect to the release of an amount of land equal in proportion to the amount of money which should be paid by the exceptants upon the mortgage held by the complainants. I find that there was such an agreement. I also find that it was acted upon by the respective parties, i. e., the exceptants paid different sums of money upon the mortgage held by the complainants. Under the circumstances it was reasonable that they should make such an agreement, and it was especially reasonable that the exceptants should desire such payments to inure to their benefit in a definite way. The exceptants were mortgagees subsequent to the complainants. Of course the discharge in whole or in part of a prior mortgage by a subsequent mortgagee would not directly inure to the benefit of the latter where the premises were of less value than both mortgages, unless it was proposed to the subsequent mortgagee to take the title with the view of retaining it, with the hope that the premises would increase in value. But in this case the agreement was, as stated, entered into with the view of securing a definite advantage to the exceptants, in having a certain proportion of the land exempted from the prior mortgage upon which the ex-ceptants’ mortgage should be the prior lien, at the same time continuing the mortgage of the latter upon the whole premises.
    But under the circumstances of the case a more important question presents itself. Can this agreement be enforced? Very manifestly, if the exceptants had filed a bill for the purpose of compelling performance they would have failed. This follows from the uncertainty of the agreement in that it does not specify any particular piece or parcel of land to be released. There is no location or designation of such parcel.
    But the complainants filed a bill to foreclose such prior mortgage and makes the defendants parties thereto. The defendants answer and set up this agreement. They insist that if the court finds it impossible to enforce the agreement on account of its terms because of uncertainty, that the courts can inquire into the damages which the exceptants will have sustained and make compensation therefor. The principle which is invoked to sustain this view is of very doubtful application. I would hesitate to follow the suggestion; not that there is no such principle or rule, but that this cáse is not within the practice in that regard.
    The only ground upon which' I can rest the case and do what seems to me to be justice between the parties, is to regard this money, which was paid under what I have found to have been an agreement, as so much money paid to the complainants, under an agreement, which, because of its uncertainty, could not be enforced, and that, therefore, is recoverable in an action at law as for money had and received. This being so and it arising out of a contract with respect to the very matter in issue which is brought into this court by the complainant, a court of equity should' deal with the whole case, settle the equities between the parties and not send the exceptants to a court of law. The counsel for the exceptants claim that they are entitled to one-fifth of the consideration money now in the hands of the court, which, as I understand the counsel for the complainants, is the amount that the exceptants are entitled to, if anything. In making distribution of the funds in hand, I will advise that the exceptants be paid the said one-fifth.

      Mr. Barton B. Hutchinson, for the appellant.

      Mr. James Buchanan, for the respondent.
   The opinion of the court was delivered by

Beasley, C. J.

This bill was filed to foreclose a certain mortgage given by the respondent to the appellant. There was no dispute with respect to the mortgage or of its being the first lien upon the property, and following this encumbrance were mortgages and judgments, all of which were admitted to be valid.

The contested- point was this: The. holder of the second mortgage set up in his answer, and contended, that he had made certain payments on the mortgage of the appellant, who was the complainant in the court of chancery, under a contract by parol with that company that it would release as much of the land embraced in its mortgage in proportion to the amount paid or which should thereafter be paid.”

That certain sums of money were paid by the second mortgagee on the first mortgage seems to be clear in the proofs, and the vice-chancellor who heard the case- decided that the contract above staled had been, as a matter of fact, entered into, but further holding that, as it did not specify any particular part or parcel of land to be released, it was not capable of performance by a court of equity. Notwithstanding this conclusion, it has been decreed that the moneys thus paid by the second mortgagee to the appellant should be deducted from the amount that'shall be realized by a sale under the first mortgage. The theory suggested justifying such a course was that this money had been paid under circumstances that would make ,it recoverable in an action at law as for money had and received.”

But, in the opinion of this court, the decree thus rendered on the ground mentioned cannot be sustained. A money claim of the kind described has not the least connection with the foreclosure, and, therefore, could not enter into that proceeding. It would be a settlement of an independent money account between two defendants in a foreclosure bill, and could not constitute any lien upon the mortgaged premises. If a demand.of this character had been set up in the answer it would have been struck out on motion, for the reason of its irrelevancy to -the matter in litigation.

It may not affect the result to be reached in this case, but it is proper to say that this court has not been able, as his honor the vice-chancellor has done, to find any evidence proving the existence of the contract which is set up in the answer. It will be remembered that such contract was to the' effect that the appellant would release from the lien of his mortgage a quota of the premises proportionate to the amount of the moneys paid to him by the defendant, the holder of the second mortgage. At the trial the effort of the defendant was to show that he had made this contract with the general manager of the appellant. Upon this subject the testimony was conflicting, and this was the ground of the contest, but it seems to have escaped attention that even if such contract had been plainly shown between the parties so negotiating it would have been of no avail, for the reason that the general manager of the corporation had no legal power to enter into it. The board of directors was alone capable to execute that function, and there is nothing to show that the terms of the contract, as claimed by the defendant, were ever communicated to that body.

It seems impracticable, therefore, to rest a decree on the designated grounds.

Nevertheless, it appears to the court that this second mortgagee should have a decree in his favor for the moneys in question. The principle on which such right rests is a familiar one, and its application in the present instance is plain, although it appears heretofore, in the-progress of this suit, to have escaped observation. The moneys in question were paid on the first mortgage by the second mortgagee in order to strengthen his own security. Unless such payments are to be regarded as mere gratuities to the mortgagor, which, conspicuously, was not the intention, they of right should be made to enure to the benefit of him who paid them, and this equitable result can be brought about by a resort to the doctrine of subrogation. This method of redress is so opportune to the enforcement of the undeniable equities of the juncture that the subject needs no explanation or discussion. This measure is to be thus applied: A decree should b.e entered for the first mortgagee for the entire amount of the money due him, without deducting therefrom the sums in question which have been paid by the said second mortgagee, and which decree should be directed to stand as security, in the first place, for the sum due the appellant, minus such payments, and, secondly, as security for the second mortgagee to the extent of said payments made by him. The lien of the appellant will thus have priority, and the lieu of the second mortgagee will be the second one in the premises.

The decree appealed from must be reversed, and a substituted one is to be entered in accordance with the view above expressed.

For reversal — The Chief-Justice, Depue, Lippincott, Ludlow, Mague, Van Syckel, Brown, Krueger, Smith, Talman — 10.

For affirmance — None.


author: Van Syckel, J.

text:
    William McFarland et al., appellants, v. The Stanton Manufacturing Company, respondent.
    1. To constitute a valid sale at law, the vendor must have a present property, either actual or potential, in the thing sold; the rule in equity is different, the equity in the assignee or vendee attaches to the contemplated thing the instant it Comes into being.
    2. In equity the assignment of future improvements upon a formula, or on a patented process, in connection with the assignment of the formula or patent, is valid.
    On appeal from an order advised by Vice-Chancellor Bird, whose opinion is reported in Stanton Manufacturing Co. v. McFarland, 7 Dick. Ch. Rep. 85.

      Messrs. Buchanan & Rellstab, for the appellants.
    ■ Messrs. Lowthorp & Oliphant, for the respondent.
   The opinion of the court was delivered by

Van Syckel, J.

The bill in this case was filed by the Stanton Manufacturing Company to compel McFarland to convey to complainant company a patent granted to him as assignee of E. W. Stanton, the complainant claiming it under an assignment prior to that to McFarland.

By an assignment in writing dated December 1st, 1891, Stanton assigned to the said company

“ all rights and formulas which I had or may have pertaining to or about the combination or article known as ‘Stanton’s Naptha Soap,’ and the making, mixture and combination thereof, and any and all parts thereof, including all letters-patent of the United States now granted or applied for, for the same, or that may hereafter be applied for, including any and all improvements for or about the same or pertaining to the art of ‘ naptha soap making.’ ”

The company soon after the date of this assignment commenced the manufacture of soap under this formula.

On October 31st, 1893, Stanton filed an application for an improvement in his patent or for a patent for an additional discovery, and in May, 1893, a patent was granted to him, which he assigned to McFarland.

The assignment to the company was not recorded when McFarland took the assignment in 1893, but I think that the testimony of Woodruff and of Fels, and the testimony of McFarland himself, show that he had notice of the previous assignment to the company.

The conclusion of the vice-chancellor on this point is supported by the evidence.

Conceding this, the case turns upon the question whether the company, under the contract before set forth, is entitled to an assignment of the patent held by McFarland.

It is common learning in the law that to constitute a valid sale, the vendor must have a present property, either actual or potential, in the thing sold. Looker v. Peckwell, 9 Vr. 253.

The rule as to the equitable title to contingent interests and expectations, and to things not in esse, is different; the equitable title to things not in actual or potential existence, may pass by assignment, the equity in the assignee attaching to the contemplated thing the instant it comes into being.

This distinction between the rule at law and in equity has been clearly recognized in this state in respect to articles not patented. Smithhurst v. Edmunds, 1 McCart. 409.

In the federal courts the same doctrine has been applied to patented inventions. Where the owner of a patent assigns it to another, together with all future improvements which he may make on such patent, the equitable title to any improvements thereafter made by the-assignor vests in the assignee as soon as the improvement is in esse, capable of being identified.

This rule is broadly enunciated by Chief-Justice Waite in Littlefield v. Perry, 21 Wall. 226, and by Mr. Justice Bradley in Aspinwall Manufacturing Co. v. Gill, 32 Fed. Rep. 697.

The assignment of future improvements upon a machine, in connection with the assignment of the patent for such machine, is valid.

A naked agreement to assign in gross a man’s future labors as an inventor is not good.

But where a man purchases a particular invention, secured by a patent which is open to indefinite improvement, he may stipulate for the sale of future improvements he may make upon it.

The subsequent patent, to be within the terms of the contract, must be an improvement upon the original invention.

It appears in the case that the formula assigned to the complainant company was not patented, but that circumstance does not affect the result under the authority of Smithhurst v. Edmunds, supra.

The burden of proof, in the first instance, is upon the complainant company to show that the patent claimed is an improvement upon the formula which it held by prior assignment.

The term improvement ” cannot comprehend every future invention of every possible process for making naphtha soap, however different from, and independent of, the first formula.

No evidence was produced before the vice-chancellor to show what the formula held by complainant was, so that a comparison of it could be made with the subsequent patented process.

The only fact before us to relieve the complainant of the burden cast upon him in this respect is the assignment of the patent by Stanton to McFarland on the 25th day of May, 1893. That assignment recites

“that Stanton has invented certain new and useful improvements in the method of an apparatus for producing naphtha soap, for which he has applied for letters-patent, and he thereby assigns and sets over to McFarland the patent to be issued under such application.”

This recital and assignment are sufficient to shift the burden of proof from the complainant company to McFarland, to show that the patented process assigned to him is not an improvement on the formula held by complainant, within the legal acceptation of that word.

The patent was applied for by Stanton as an “improvement,” and so contracted for and taken by McFarland.

The decree below should be affirmed, with costs.

For affirmance — Gummere, Lippincott, Ludlow, Magie, Van Syokel, Bogert, Brown, Krueger, Sims, Smith, Talman — 11.

For reversal — None.


text:
    Amzi T. Dodd et al., appellants, v. James H. Lindsley, administrator &c., respondent.
    A bill in equity cannot be maintained against a residuary legatee or devisee of an estate, to recover from him an alleged loss by an estate of which his testator was executor, by reason of the neglect of his testator, as such executor, without making the personal representative of his testator a party to the suit, and calling him to account for the unadministered assets of the estate of which such testator was executor.
    On appeal from a decree advised by Vice-Chancellor Pitney, whose opinion is reported in Lindsley v. Dodd, 8 Dick. Ch. Rep. 69.

      Messrs. Whitehead & Condit and Mr. Alfred F. Skinner, for the appellants.

      Messrs. Coult & Howell, for the respondent.
   The opinion of the court was delivered by

Van Syckel, J.

Calvin Dodd, one of the executors of Stephen H. Dodd, deceased, held as part of the estate of said decedent, a mortgage for $1,500, which he failed to have recorded, and which it is alleged was rendered uncollectible and of no value by reason of such neglect.

The complainant below, who is the respondent here, is the sole legatee of Stephen H. Dodd, and by his bill asks to charge Amzi T. Dodd, the residuary legatee and devisee of Calvin Dodd, with the amount lost on said mortgage.

The administrator of Calvin Dodd is not made a party to this suit.

In the absence of any valid excuse for not recording the mortgage, Calvin Dodd would have been liable for the loss which resulted, but no decree could have been made against him, if living, without making him a party.

Herein lies the error, that the suit is against the residuary legatee of Calvin, and not against his personal representative.

It should have been against the personal representative of Calvin, calling him to account for the unadministered assets, and charging Calvin with the devastavit.

Whether the estate of Calvin can he held to respond for the amount of the alleged loss will depend upon the state of the account; he may have paid out for the estate which he represented, from his own funds, more than that amount in excess of the assets of the estate.

It is not necessary to decide other questions discussed.

For the reason given the decree below should be reversed.

For reversal — The Chief-Justice, Depue, Gummere, Ludlow, Magie, Van Syckel, Brown, Smith, Talman — 9.

For affirmance — None.


text:
    Charles K. Landis, appellant, v. The Sea Isle City Hotel Company, Charles Class and Michael J. Kelly, respondents. Charles Class and Michael J. Kelly, appellants, v. Charles K. Landis, respondent.
    Under a bill filed by a stockholder and creditor of a company on behalf of himself and all other stockholders and creditors, praying that directors of the company may be made to respond to said company for losses sustained by it, by reason of their fraudulent conduct, a decree cannot be made for the sole benefit of the complainant.
    On appeal from a decree in Landis v. Sea Isle City Hotel Company et al., advised by Vice-Chancellor Pitney.

      Mr. Charles K. Landis, Jr., for thé appellant.

      Mr. Samuel W. JBeldon, for the respondents.
   The opinion of the court was delivered by

Van Syckel, J.

These appeals were arguéd together.

The bill filed by Charles K. Landis, as a creditor and stockholder of the Sea Isle City Hotel Company, on behalf of himself and all other creditors and stockholders, prays that Charles Class and Michael J. Kelly, who are directors of said company, may be decreed to pay over to the said company all money and property fraudulently held by them under the allegations' in the bill, and to pay to the company an amount that will compensate said company for the losses sustained by the company and its stockholders by the wrongful acts of the said defendants.

The decree below refuses relief to the creditors, but decrees that two of the defendants, Class and Kelly, shall pay to Charles K. Landis, as a stockholder of said company, the sum of $500.

Class and Kelly have appealed from the decree against them and in favor of Landis, and Landis has appealed from the decree in so far as it refuses relief to the creditors.

The decree is not in accordance with the prayer of the bill, and cannot be maintained.

If there is any evidence to support a decree in accordance with the prayer of the bill, which is at least doubtful, it ought to be that the money which the company lost by the fraud or actionable misconduct of the board of directors or some of them, should be paid to the company for the benefit of all creditors and stockholders.

Landis was not entitled to a decree appropriating the amount recovered exclusively to him.

One complaint is that the directors did not take a valid title for the lots purchased for the erection of the hotel, but they took possession and built upon the lots, and thereby acquired an equitable title as against all subsequent claimants. The company, therefore, was not injured in that respect.

The decree, so far as appealed from by Class and Kelly, should be reversed, and so far as it is appealed from by Landis, should be affirmed.

For affirmance — The- Chief-Justice, Depue, Garrison, Gummere, Lippincott, Ludlow, Mague, Van Syckel, Bogert, Brown, Smith, Talman — 12.

For reversal — None.


author: Magie, J.

text:
    Frank A. Magowan, receiver, appellant, v. Anna W. Baird, respondent.
    A chattel mortgage had annexed thereto an affidavit made in Pennsylvania, before a notary public of that state, but the jurat did not contain a recital that the officer taking the affidavit was a notary public, as provided for in section 5 of the Oaths act. Rev. p. 740. — Held, that the mortgage had annexed thereto an affidavit within the meaning of section 4 of the Chattel Mortgage act (Rev. Sup. p. 491), and was not void as to the creditors of the mortgagor for lack of such recital in the jurat.
    On appeal from a decree advised by Vice-Chancellor Bird, whose opinion is reported in Whitehead v. Hamilton Rubber Co., 8 Dick. Ch. Rep. 454.

      Mr. Garret D. W. Vroom and Mr. James Buchanan, for the appellant.

      Mr. Edwin Robert Walker, for the respondent.
   The opinion of the court was delivered by

Magie, J.

The result reached in this case in the court of chancery is satisfactory, but cannot, in my judgment, be supported upon the ground on which it was there rested.

The contest between the parties related to the validity of a chattel mortgage. Respondent is the holder of the mortgage, which was made to her by a corporation. The corporation afterward becoming insolvent, appellant Was appointed receiver. His contention is that the mortgage is void as to the creditors of the corporation, under the provisions of section 4 of the Chattel Mortgage act of 1885 (Rev. Sup. p. J¡9T), which expressly pronounce any such mortgage (not accompanied by immediate delivery and followed by actual and continued possession of the things mortgaged) to be absolutely void against creditors of the mortgagor, unless the mortgage, having annexed thereto an affidavit or affirmation made and subscribed by the holder, and stating the consideration and the amount due and to grow due thereon, be recorded as required in the following section of the act.

■ As the chattels of the corporation covered by the mortgage did not pass into the possession of the mortgagee, the validity of the mortgage depends upon the compliance of the mortgagee with the provisions of section 4, above set forth.

The only lack of compliance with those provisions claimed by appellant is that the affidavit annexed to the mortgage, and which was taken in the State of Pennsylvania before a notary public, does not contain in its jurat a recital that the officer taking it was a notary public of that state. Upon that sole ground it is contended that respondent’s mortgage had not an “affidavit annexed” within the meaning of the act, and is therefore void as-to the creditors represented by appellant.

The learned vice-chancellor who tried the cause concluded that the affidavit was defective in the respect complained of, but maintained the right of the court to supply its deficiency by proof of the official character of the officer before whom it had been made. Such proof was received.

In this conclusion I think there was error, for if respondent’s mortgage did not have annexed to it an affidavit complying with the provisions of section 4, it was, by express enactment, absolutely void as against creditors, and no court could supply its defects or give it a validity which it did not originally possess.

But in my judgment respondent’s mortgage did have annexed to it an affidavit within the meaning of those provisions and complying therewith.

To comply with those provisions there must be annexed to the mortgage an affidavit, i. e., a written statement made under oath before some person legally empowered to administer an oath and take an affidavit, and such statement must contain the particulars required by section 4, and be made and subscribed by the holder. An examination of the affidavit in dispute discloses that it is in exact compliance with the requirements of that section, unless it was made before a person not legally competent to take it, or, if made before such a person, his taking it was ineffective, because, being made in a foreign state, he failed to recite his official character in the jurat.

' The Chattel Mortgage act does not declare before whom such affidavits may be taken. To ascertain that, resort must be had to the provisions of the “ Act relative to oaths and affidavits.” Rev. p. 740.

It has been strenuously argued that a notary public is an officer of international authority, and that, in addition to the functions which he may admittedly exercise under the law merchant, he is possessed of power to take affidavits to be used in foreign countries and in other states. There are authorities justifying such contention, which, however, does not commend itself to my judgment. But no decisive opinion need be expressed thereon. For, if the Oaths act before cited does not confer power upon notaries public of other countries and states to take affidavits to be-used in this state, it at least regulates the manner of taking and certifying such affidavits.

By section 5 of the Oaths act, it is enacted that any affidavit required to be taken for any lawful purpose, when taken out of this state, may be taken before any notary public of the state in which it shall be taken. Obviously the notary public who took respondent’s affidavit was endowed with power to do so, and, unless other clauses of that section hereafter to be considered forbid, his jurat subscribed by him with his official designation and seal, would, prima facie, establish his right.

The conflict in this case occurs over the following clause of section 5, viz.:

“And. a recital that he is such notary * * * in the jurat or certificate of such * * * affidavit, and his official designation annexed to his signature and attested under his official seal, shall be sufficient proof that the person befdre whom the same is taken is such notary” &c.

The question which arises upon this clause is whether it was intended to limit or restrict the power to take affidavits previously given in the same section, and to render it of no value unless the affidavit taken is accompanied with a certain jurat or certificate. I am aware that the clause has been so construed. Sutherland v. Jersey City and Paterson Railway Co., 8 N. J. L. J. 45; Minford v. Taylor, 12 N. J. L. J. 282. But I am unable to discover such an intent in the clause. If such was the legislative design, the language was singularly ill-chosen. Such a design would naturally be expressed by a prohibition of the use of affidavits taken in a foreign country or state, and not authenticated by such a jurat or certificate. But instead of a prohibition of this sort, the clause in question merely declares that such a jurat will afford sufficient proof of official character. It does not prohibit other proof or deny to the ordinary jurat and certificate its prima facie effect. From these considerations, in my judgment, the better construction of the clause is that it does not make the recital of official character in the jurat or certificate essential to the validity of the affidavit, but permits such recital so certified to afford proof of official character, if challenged, without the expense and delay of proving such character by the official commission issued to the officer.

For this reason I think that the chattel mortgage in this case had annexed to it an affidavit within the meaning of the Chattel Mortgage act, and was not void as to creditors. I shall, therefore, vote to affirm the decree below.

For affirmance — The Chief-Justice, Depue, Gummere, Lippincott, Ludlow, Mague, Van Syckel, Bogart, Brown, Smith, Talman — 11.

For reversal — None.