author: GiurrjcnVV. C.

text:
    In re estate of F. Augustus Heinze, deceased.
    [Submitted July 2d, 1921.
    Decided July 22d, 1921.]
    1. In the administration of an estate by an ancillary administrator, involving the passing of a report and account, and the determination of the bona tides of certain claims, and the ending of long litigation, such matters afford special reasons to the court of chancery for assuming jurisdiction which would ordinarily be exercised by the orphans court.
    2. A decision by the court of errors and appeals on a bill by an ancillary administrator to impress a trust upon assets pledged to a New Jersey corporation is conclusive on claimants whose claims were there considered.
    3. This court may, on petition by an ancillary administrator for the passing of his account, sustain exceptions to all claims but one that was in litigation, and as to which an appeal was pending, and reserve decision as to this one, in order to expedite settlement by permitting a prompt appeal from such decision.

      4.. Where, after such petition was filed, a creditor filed a claim and. was allowed to file exceptions, but on the hearing it appeared that such creditor was a corporation of another state, and the claim was not reported by the administrator, and no prayer is in his petition for discharge in reference thereto, the court, on the consideration of such exceptions, need not pass upon such claim.
    Oil petition, &c.

      Messrs. Wall, Haight, Carey & Hartpence and Mr. Albert Chandler Wall, for Mr. Wall, substitutionary ancillary administrator in. New Jersey.

      Messrs. Collins & Corbin and Mr. Robert J. Bain (Mr. Royall, of the New York bar), for Mr. Fullerton, domiciliary administrator.

      Messrs. Treacy & Milton and Mr. John J. Treacy (Mr. Thatcher, of the New York bar), for the American Smelting and Refining Company.

      Mr. John Nolan, for the Assets Development Company.

      Mr. Arthur P. Heinze (of the New York bar), first vice-president of the United Copper Company and president of the West- . ern Development Compan}', for said corporations.
   GiurrjcnVV. C.

Mr. Wall, as substitution a ry administrator (ancillary) of the estate of F. Augustus Heinze, deceased, filed his petition, report and account, asking that the account be passed and he be discharged. His petition is not filed under section 146, Orphans-Court act (3 Comp. Stat. p. 3868), which applies to a discharge prior to the termination of the trust.

In the petition it is set forth under the caption—

“10: Tlie names and addresses of all persons interested in said accounting are as follows:
CLAIMANTS.
Union Bank of Brooklyn, c/o Joseph G. Dean, New York City (filed March 15, 1020)....... •870,832.91 with int.
United Copper Co., 51 Newark Street, Hoboken, N. J. (filed Dec. 22. 1010, with Arthur P. Heinze. Administrator) .................... 250.000.00
United Copper Co., 51 Newark St., Hoboken, N. J. (filed Dec. 22, 1016, with Arthur P. Heinze, Administrator) ..................... 200,000.00
Calvin P. Geer, East Orange, N. J. (salary; filed June 21. 1918)........................ 250.00
Assets Development Co., Englewood, N. J. (filed July 22, 1918)....................... 2,500.00 with int.
Assets Development Co., Englewood, N. J. (filed July 22,' 1918) ............................ 8.000.00
Luther Marlin. Jr., receiver United Copper Co.. c/o Geo. D. Hendrickson, 75 Montgomery St., Jersey City (filed Aug. 20, 1918)........... 000,000.00
George D. Hendrickson and Luther Martin, .Tr., (Receivers, United Copper Co., 75 Montgomery St., Jersey City (filed Aug. 20, 1018)...... 483,023.05
81,021,505. OG"

To this account and report exceptions were filed by Mr. Fullerton as domiciliary administrator, Assets Development Company, United Copper Company and, since the petition was filed, by the Western. Development. Company, who filed its claim with Mr. Wall since his petition was filed. ' ' .

On. the day. set for the hearing the Assets Development Coni-.' pany filed supplementary exceptions, dealing with the situation . which arose after its original exceptions had been, filed, viz., the setting aside of the judgment which will be hereafter referred to.

The exceptions of all the parties, except Mr. Fullerton’s, are substantially addressed to the question of jurisdiction, the point being that "no special reason appears for interfering with the ordinary jurisdiction of the orphans court.”

I quite disagree with the views of these exceptants. The history of the litigation in this estate, and the things to be accomplished to make an end of it, present an appropriate case to be heard and determined in this court. Filley v. Van Dyke, 74 N. J. Eq. 219; reversed, 75 Idem. 571; Wyckoff v. O’Niel, 71 N. J. Eq. 681.

The exceptions of Mr. Fullerton, among other things, go to the point that none of the claimants above named are bona fide creditors in the State of New Jersey, and, therefore, their several claims should be rejected, and the account passed, to the end that the exceptant might take and receive the assets and administer them in the State cf New York. ■

In the absence of the judgment of the Assets Development Company on the claim cf Geer for two thousand fi,ve hundred dollars ($2,500), with interest, assigned by Geer to it, it seems perfectly plain that the presenting of these claims should not defeat the passing of the account, and on proper application to direct the substitutionary administrator to pay or turn over to the domiciliary administrator assets in his hands or claims to assets in this state, in view of the opinion of this court in Wall, Substitutionary Administrator, v. American Smelting and Refining Co., reported in 90 N. J. Eq. 469, and the reasons given for affirmance by the court of errors and appeals in the opinion by Mr. Justice Kalisc-h, reported in 91 Idem. 131. The only assets which can be said to be in this state are the royalties payable under the Silver Iving agreement referred to in said opinions. The other properly, consisting of stocks and bonds which, with said agreement, were pledged with the American Smelting and Refining Company to secure a debt of the deceased, did not have their siti in this state. The bill in the suit in which the above opinions were filed, and decrees in accordance with said opinions were entered, sought to establish the right of the accountant to the royalties after the pledgee was paid, as w'ell as the title to the other properties above referred to. All of the claims above referred to, excepting that of the Union Bank of Brooklyn, were dealt with in the case, and Mr. Justice Kalisell in conclusion said:

“It cannot successfully escape notice that at the time of decedent’s death and of the appointment of an administrator in this state, there were no bona fide New Jersey creditors, and that the artificial process which has been resorted to for the creation of New Jersey creditors fails of its purpose.

“For the reason that there were no bona fide New Jersey creditors the decree below will be affirmed.”

In the face of this judicial determination, I must hold that the claimants under the claims 'above passed upon were not bona fide New Jersey creditors; and as to the claim of the Union Bank, its claim, which was filed. March 15th, 1920, after the decision of the comt of errors and appeals, and, therefore, was not considered, should not be allowed, because the bank is not a New Jersey creditor.

This decision went to the very root of the ease, and, in effect, held that the appointment of an administrator in this state was wholly unnecessary and improvident. This, if rendered in the suit originating in the orphans court, could only have resulted in vacating the appointment and thus ending all litigation in this state.

A circumstance, however, has arisen since the above case was decided, which leads me to pause in carrying into effect this conclusion as to the claim of the Assets Development Company (on the claim assigned by Geer) for two thousand five hundred dollars ($2,500), with interest.

On January 31st, 1920, the Assets Development Company (after the decision of our court of last resort had been announced) began, suit in tlie Hudson circuit court against Mr. Wall as substitutionary administrator upon the note of ten thousand dollars ($10,000) upon which it is claimed there was due two thousand five hundred dollars ($2,500), with interest, being the claim (assigned by Geer) in that amount above referred to. The defendant pleaded, omitting, however, to plead the decree of the orphans court barring creditors, and on a trial of the cause a verdict was rendered on May 4th, 1920, in favor of the plaintiff and against the defendant for six thousand sixty dollars and eighty-three cents ($6,060.83) and costs, and judgment was accordingly entered.

Thereafter such proceedings were had in said cause, that on May 13th, 1921, said court set aside the judgment, gave leave to the defendant to amend by setting up the decree barring creditors, limiting the retrial to the issue framed on the amendment.

Upon the issue thus framed, without going into details as to formal procedure, the court entered judgment on June 6th, 1921, in favor of the defendant and against the plaintiff. Thereupon the plaintiff, on June 6th, 1921, appealed to the court of errors and appeals, which appeal is new pending.

Shortly after the rule to show cause was entered why the judgment should not be set aside, the plaintiff took cut execution on 'February 3d, 192-1, and served a copy of the same on the American Smelting and Refining Compan}1.

.The American Smelting and Refining Company opposes the application of Mr. Wall at this time because if the court of last/ resort should reverse the circuit court, there would be a judgment which it might be compelled to pay and for which it might not receive credit at the suit of the domiciliary administrator— thus, as an innocent stakeholder, it might he compelled to pay twice.

Without passing on this question, this fear of the American Smelting and Refining Company is not fanciful, as, by reason of its dual residence, it is liable to be sued in both states.

Tn this situation, ordinarily, no decision would be herein rendered prior to the decision of the appeal in the case at law. If, however, this course were pursued, further and unnecessary delay in disposing of this controversy would follow. The law ap"peal may now be argued at the November term, 1921, and decided on or before the March term, 1922. Immediately thereafter an appeal might be taken from the decision of this court in this cause, which, ordinarily, would be arguable at the June term, 1922, and be decided on or before the November term, 1922. But'in this case the court shoxild strenuously endeavor to end this long-drawn out litigation, which has been denounced by the court' of last resort. To that end, I propose to decide the case as far as .it may now be disposed of, so that an appeal may be taken from the decree of this court at once, and both cases argued at the November term, 1921. I will, therefore, advise a decree sustaining the exceptions of the domiciliary administrator to> all the claims above set forth, excepting that of the Assets Development Company, for $2,500, with interest, which was the subject of the suit at law; and, as to this claim, I will withhold advising a decree until its status is settled by the court of errors and appeals.

The Western Development Company, from statements made at the hearing, filed a claim with Mr. Wall after bis application for discharge was filed, and it was allowed to file exceptions. Near the close of the testimony it appeared that it is a corporation of Arizona. As its claim is not reported by thé administrator, and there is noi prayer in his petition for discharge with reference thereto, I have not considered nor passed upon the claim in this proceeding.

I have not deemed it necessary to encumber this memorandum with the many recitals of facts which plainly appear in the above-cited opinions and in the record of the case in which the opinions were filed, as such records are in evidence, and reference may be made thereto.


source: Caselaw Access Project

author: Gkieein, Y. C.

license: Public Domain

text:
    Henry Siebold et al. v. Ernest Zieboldt and Anna M. Zieboldt.
    [Submitted June 17th, 1921.
    Decided July 27th, 1921.]
    1. The gift by an aged and infirm person to one in a position to exercise influence over him is void unless the donor knew the nature of the act, and that it was not made through the influence of the donee, and the burden of p.roof is on the d'onee to negative these inferences.
    2. An improvident gift made by an aged and infirm person, acting without independent advice, to donees in a position to exercise influence over him, and which failed to contain an agreement reserving the right of support and lodging during the life of the donor, which was a part of the transaction, will not be upheld.
    On bill to have it declared that lands .standing' in the name of defendants are Held by them as trustees for complainants, and for a decree that the defendants should convey to the complainants, &c.

      Mr. John J. Fallon, for the complainants.

      Mr. William B. Stites, for the defendants.
   Gkieein, Y. C.

On the 20th of May, 1920, Matthias Siebold, since deceased, entered into a contract with Leo R. Warren ánd wife for the purchase of the premises in question for the- sum of $10,000, payment to be .made as follows: On the execution of the agreement, $300; on the delivery of the deed, $7,700, and by the assumption of a mortgage of $2,000 then oil the-property. On July 2d', 1920, Matthias signed a memorandum which was intended to assign the contract to the defendants; and on the same day the deed was delivered by the Warrens directly to the defendants.

At the time of the passing of the title there were two accounts standing in the name of Matthias Siebold and Helena Siebold “as joint tenants, and not as tenants in common, and to- the survivor.” In one there was a balance of-$3,000; in the other, $-1,944.62. With the defendant Anna M. Zieboldt Matthias went to the respective banks, drew the $3,000 from one, which closed the account, and $1,700 from tire other, which left a balance of $244.62. These moneys so withdrawn, aggregating $7,700, were ■paid by Matthias to the Warrens, which, together with the $300 theretofore paid by him as a deposit, constituted all the cash which was to be paid under the contract.

At the time of this transaction the defendants were strong and in vigorous health, and were aged thirty-two and thirty-six years respectively. Matthias Siebold and his wife were aged, about seventy-seven years, and were weak and feeble. They had had five children, two of whom died in infancy; the remaining three were married, living in homes apart from their parents. Their relations were friendly. Prior to the making of the deed in question the parents had conveyed their real estate to their children, reserving an income of $80 a month, with rent free for an apartment, charged in the settlement at $15 a month. This sum, in March, 1920, prior to the making of the deed in question, no-t being considered by Matthias sufficient for the support of himself and his wife, he, with the defendant Anna M. Zieboldt. called on Miss Smyth, a member of the bar of this state, to secure from his children an additional sum of $10 a month.

At the time -of the delivery of the deeds by the Warrens to the Zieboldts the only property which Matthias and his wife had, in addition, to the monthly income above referred to (and such additional voluntary increase as the children may have made pursuant to the above request, which I need not consider), was $8,244.62, and household furniture of little value. They had no other income, and were possessed of no other property. Thus, when the $8,000 was paid for’the purchase of this property, this old gentleman and his wife had, in addition to the monthly income above referred to, the sum of $244.62 in cash.

The defendants for a long time were tenants in a building owned by one of the children of Matthias, and in which Matthias and his wife both resided; and the relations between-Matthias and the defendants were quite friendly, and. the defendants appeared to have considerable influence over him. The particular things which the defendant Anna did which required favorable consideration, are that she nursed the old lady and did household chores for her to some extent, but such only as ordinary persons in their, walk of life would do under similar circumstances. There is evidence that she was paid for this work, although she denies it. The old folks are now dead and the defendants’ testimony, where accepted, should be received with great caution, because it might be given without fear of contradiction.

The defendants were about to be dispossessed from the premises after the intercession of the father, Matthias, had failed to further stay their removal. At this juncture the father made a contract in his own name to purchase the premises in question. The testimony indicates that while the contract is in his name, he was buying' for Anna for the purpose of providing her with a home, but took it in his name SO' that his family might not hear of it and make trouble before it was consummated, and, apparently, to this end the deed was kept off record for about two weeks after delivery. There is nothing in the ease to justify the inference that if the deceased was possessed of ordinary mentality he would have made this gift. I will advise a decree for the complainant on the following grounds:

First. The deceased being aged and infirm, the gift being voluntary, the persons who were the recipients of the gift being in a position to exercise influence 'over the deceased, the gift is void, unless the donor knew the! nature of the act and that' it was not made through the influence of the; donee, and tire burden of proof is on the defendants to negative these inferences. Haydock v. Haydock, 34 N. J. Eq. 570, and numerous other cases of like import. Here the defendants have not sustained the burden of proof.

Second. The gift was improvident and made without independent advice. Pearce v. Stines, 79 N. J. Eq. 51; Slack v. Rees, 66 N. J. Eq. 447; Post v. Hagen, 71 N. J. Eq. 234; Hunt v. Naylor, 84 N. J. Eq. 646; Fritz v. Fritz. 80 N. J Eq. 56; Grimminger v. Alderton, 85 N. J. Eq. 425; affirmed, 86 Idem. 247.

Third. It is plain from the testimony (page 389 et seq.) that there was an agreement reserving the right of lodging and support during the life of the deceased which was not incorporated in the deed or any other agreement for his protection. Collins v. Collins, 63 N. J. Eq. 602; White v. White, 60 N. J. Eq. 104; Mulock v. Mulock, 31 N. J. Eq. 594; Soper v. Cisco, 85 N. J. Eq. 165.


author: Grirrin,"V. C.

text:
    August A. Schlegel v. Charles J. Bott.
    [Submitted March 27th, 1921.
    Decided July 9th, 1921.]
    1. A clause in a lease providing that the lessee should deposit with the lessor “before this lease becomes operative” $1,500 to secure the surrender of the premises at the expiration of the term in a state and condition as agreed in the lease, was intended to secure a deposit before the term began, and should be construed as meaning that the deposit was to be made before the first day of the term, and not to postpone the operation of the lease and an option to purchase until the deposit was made.
    2. Failure by the lessor to secure the return of the premises in good condition from the lessee according to the lease, in view of the acceptance of rent by the lessor, does not avoid the lease and option to purchase contained therein, and is no defence in a suit for specific performance of the option to purchase by the lessee.
    On bill, &c.

      Mr. Emil Walscheid, for the complainant.

      1 Mr. William Q. ITille and Mr. Harlan Besson, for the defendant.
   Grirrin,"V. C.

The complainant aslis that defendant be decreed to specifically perform an option agreement contained in two instruments, a lease and an agreement, both dated April 17th, 1917, to convey certain premises described in the bill, and the case turns on whether, at the.time the complainant declared his option, the lease was valid and subsisting.

The complainant says it was; the defendant urges to the contrary, basing his contention, on- a clause in the lease, hereinafter set forth, that the complainant agreed to deposit $1,500 as security for the restoration of the premises in good condition, &c., at the end of the term, which clause complainant failed to comply with.

In the first clause, after the words “of letting and hiring and description of the premises,” the lease provides that the term símil run from September 1st, 1917, for the term of five years and eight months, the rent reserved to be at the rate of $250 a month, for the first two years and eight months (to- May 1st, 1920), and $275 a month for the remaining three years. ■

The second clause is in the usual form, giving the right of reentry for non-payment of rent and breach of covenants therein contained.

In the third clause the complainant covenants to pay in advance the rent above reserved on the fust day of each month.

The fourth clause provides for the surrender at the end of the term or determination of the lease in the common form.

The fifth clause is as follows:

“And the party of the first part covenants, that the said party of the second part, on paying the said rent, and performing the covenants aforesaid, shall and may peaceably and quietly have, hold and enjoy the said demised premises for the term aforesaid.”

The seventh clause deals with repairs, &c.

The eighth clause is as follows:

“It is hereby mutually understood and -agreed that this indenture is subject to the provisions of an agreement entered into between the parties hereto of even date herewith, giving said lessee an option- to purchase the demised premises.”

Tbe ninth clause gives complainant an option of renewal for five years at an increase of $25 a month rent.

The tenth clause, under which the complainant claims the ■ lease was and is void, is as follows:

“And the party of the second part hereby agrees before this lease becomes operative to deposit with the party of the first part the sum of fifteen hundred ($1,500) dollars as security for the surrender at the expiration of the term or terms hereunder of said premises in the state and condition as hereinabove agreed, which sum the lessor agrees to repay said lessee with interest at four per cent, per annum upon such restoration of said premises, or in the event that the lessee shall exercise the option to purchase, the said sum with interest shall be allowed on said purchase price.”

The remaining clauses need not be referred to.

The agreement, after reciting the foregoing lease, states that in consideration of its execution and one dollar, interchanged, the defendant, for himself, &e., agrees to convey in fee, free from encumbrances, the premises described in the lease to the complainant on demand for $-16,000, to be paid as therein provided “at any time during the life of the said indenture of lease above referred to, or the renewal thereof.”

Provision is also made for crediting the $1,500 deposit referred to in the lease, with interest, on the purchase price.

At the time the lease was signed there was on the premises one Ton jes, occupying a portion, and paying $125 a mouth; a butcher and a boot-black, occupying other portions, paying $40 and $25 a month respectively. T'onjes, as I recall it, moved about the 1st of May, and the complainant entered into possession of the part vacated, paying rent at the rate of $250 a month for the whole of the premises, and collecting the rents from the butcher and the hoot-black. My recollection of the testimony is that Mr. Schlegel was employed by some large hardware establishment in Union Hill, and it was suggested by Mr. Bott, or someone, that he rent the premises in question and start in business for himself. Whether this he so or not, Mr. Bott knew that the purpose of Mr. Schlegel was to enter into this line of business, which required a long lease, and thus a clause allowing him to make alterations and changes in the premises was inserted.

The complainant, upon entering into possession, commenced the making of very extensive alterations at considerable expense, which were completed about the middle of June. He laid in a large stock of hardware, which greatly depleted his capital, so that, on the 1st of September, 1917, he could not conveniently make the deposit of $1,500 required by the agreement, and it was not paid at that time or any other time. It was, as I recall it, discussed, but defendant did not insist upon payment, nor assert the invalidity of the lease by reason thereof. The complainant continued paying his rent under the terms of the lease, and, apparently, living up- to all the terms contained therein, excepting the payment of $1,500 down to the 1st day of July, 1920, after he had declared his option. This, the complainant contends, with other circumstances, shows not only the defendant’s interpretation of the contract, but also that he waived his claim to the $1,500 deposit.

The complainant, thinking that the two years and eight months’ period for the payment of the $250 a month commenced in April, 1917, and terminated on the 1st day of December, 1919, on the last-mentioned date drew his cheek for $.275, which was the sum payable under the terms- of the lease for the last three years’ period, and delivered the same to the defendant. The defendant told complainant that he had not read his lease; that the $275 period did not begin until the 1st of next May, and that his- rent was still $250. This cheek for $2.75 was returned to the complainant, and the complainant thereupon drew a cheek for $250, delivered the same to the defendant, and it was accepted.

On May 1st, 1920, the rent, by the terms of the lease, became $275 a month. This sum the complainant paid to- the defendant, which was accepted, and down to this- date there was not a word said by the defendant to the complainant that the lease was non-existent, or that their relations were governed by anything other than the terms of tire lease and agreement.

On May 12th, 1920, the complainant, with his attorney, called on the defendant and told him that he then desired to- exercise his'option, and at that time the defendant refused to make the conveyance, saying that the complainant had not kept his agreement by making the deposit of $1,500.

On May 2'Stli, 1920) the complainant tendered the $1,500 to the defendant, which tender was refused.

■ This was followed by the defendant serving a notice on May 29th, 1920, on the complainant, which required him to quit the premises (stating that said premises were occupied by complainant-as a tenant at will) on the- 1st of September, 1920, and requiring him to deliver possession thereof on or before that date. The complainant, after the service of said notice, again paid to the defendant $275 rent for the month of June, and on the 12th of June served a formal notice declaring his option and demanding" a deed.

The foregoing are the substantial facts in the case.

The principal point made by the defendant is that under the tenth clause of the lease, the deposit of the $1,500 was a condition precedent to the lease talcing effect, and, therefore, as the sum was not paid, complainant became a tenant at will.

In passing on this question, the lease and agreement should be examined in their entirety and be construed together.

In exploring the intent of the parties as expressed in the lease, it will be sufficient to compare the fifth and tenth clauses in the light of the previous demise. If the defendant’s views are accepted, they are in opposition — irreconcilable; if construed in the light of reason and the interpretation of the parties as shown by their words, acts and conduct, the two clauses harmonize. After the words of demise, the defendant covenants, in the fifth clause, that if the complainant pays the rent and performs the covenants aforesaid, he “shall and inaj'- peaceably and quietly have, hold and enjoy the demised premises for the term aforesaid.” This is a plain covenant of peaceable possession, to which the complainant was entitled because he had paid the rent and performed the prior covenants in the lease.

The tenth clause, being subsequent to the fifth, the agreement therein is not a covenant to be kept and performed to entitle complainant to this peaceable possession under the fifth clause.

Turning to the tenth clause, the question arises how may it be reconciled with the positive demise and covenant for peaceable possession?

The clause is ambiguous, in that inapt language was used in the selection of the words “before this -lease becomes operative.” The fair meaning of these words is “before September 1st, 1917;” and the clause itself merely contains an agreement, independent of the letting, that before September 1st, 1917, the date from which the lease speaks, he would deposit $1,500 with the defendant to secure a restoration, which gave to the defendant an independent suit to enforce this agreement without avoiding the lease.

This construction not only makes the entire lease congruous, but is in- accord with the speech and course of conduct of the parties down to the breach between the parties, who were friends of long standing.

In passing on the case it is well to consider it from every angle. Suppose, between April 1st -and September 1st, 1917, great depression had happened in real estate, and the complainant could rent, with an option of purchase, lands just as desirable at much less cost, and refused to make the deposit and enter into possession on September 1st, and defendant sued complainant for rent under this lease, could the complainant plead,' saying, “Yes, I made the lease, and agreed that on September 1st, 1917, I would make a deposit of $1,500, but I declined to make the deposit which I agreed to make, -but such deposit is a condition precedent to the validity of the lease, and not being made, the lease is void,” how long would it' take a court of justice to dispose of a, plea of such character?

The complainant agreed to make the deposit; if he failed to do so the defendant had his remedy, and this he might waive.

The complainant is entitled to his decree.


author: Griffin, Y. C.

text:
    William B. Aitken, as executor of the last will and testament of Amy Edwards, deceased, for whom have been substituted Frank Brewster and Robert D. Brewer, administrators cum testamento annexo of the estate of Amy Edwards, v. Arthur B. Sharp, as executor, et al.
    [Decided December 30th, 1921.]
    1. A testatrix being possessed on the date of her will of ten P. Water Company bonds of the par value of $1,000 each, bequeathed ten M. water bonds of the par value of $1.000 each, without using language indicating an intention to pass bonds which she then owned, and when, in fact, she never owned any II. water bonds — Held, the legacy is general and not specific.
    2. Where the testatrix divides the residue into four equal portions, dividing her will into paragraphs, and directs that one portion be divided between the several persons mentioned in each paragraph in fixed proportions — Weld, the beneficiaries named take as individuals and not as a class, even though the persons in each paragraph constitute separate branches of testatrix’s relatives.
    3. Whore a legacy or devise is given by the residuary clause and lapses, it does not sink into the residue, but passes to the heir or next of kin, unless a contrary intention appears on the face of the will. .
    4. Where, in the,third paragraph, testatrix directed that “all the rest, residue and remainder of my estate, real and personal, wheresoever situate, thus including lapsed legacies, I wish divided into four equal portions,” and, in the fourth paragraph, she gives one portion to several persons — to some one-tweifth and to other's thx'ee-twelfths — and a legatee of three-twelfths died in testatrix’s lifetime, with the resultant lapse — • Held, that as it plainly appears from the will that testatrix did ixot intend to die intestate as to any part of her property, the words “thus including lapsed legacies” takes the case oxxt of the general x*ule. In such situation tlxe legacy, in strictness, does not lapse or sink into the residue, but, more properly speaking, continues therein.
    5. Where testatrix, in the residuary clause, directed that the residue should be divided into four equal portions, giving to several persons in one paragraph (fourth) one-twelfth and three-twelfths, respectively', and in another paragraph (fifth) another portion to several persons in one-fourths, and, in still .another paragraph (sixth), to her executors in trust for life for two persons each one portion (thus the unit for division is forty-eighths), and one of the legatees (H. B.) in the fourth paragraph dies in the lifetime of the testatrix, her three forty-eighths passes to the other residuary legatees in proportion to their several legacies, viz., by cutting down the number of divisible units from forty-eight to forty-five— thus, those receiving one-half of one-fourth (or one forty-eighth) will receive one forty-fifth of the whole residue.
    G. The remainder mentioned in the sixth paragraph, devised to the parties in the fourth and fifth paragraphs, are vested and not contingent ; in that on the death of the life tenants the remaindermen are entitled to the enjoyment without any collateral contingency concurring.
    7. The remainder in the fifth paragraph, where testatrix devised to her executor in trust to pay the income to M. F. B. during her life, “and at her death, or if she die before me, then at my death to pay the principal to her children, if any, or if she die leaving no issue, then I direct my executor to pay the remaining one-fourth part to J. C. S., A. B. S. and H. S., share and share alike, and their shares, if they then be dead, shall go to their children or issue surviving, or, if none, then to the survivors or children of those dying leaving issue,” is a contingent remainder.
    8. Testatrix, after disposing of her' entire estate, in the last paragraph of her will appointed an executor “hereby giving him full power to make sale of any real estate whereof I may die seized, at public or private sale, and to make sale of any personal property, and upon such terms and at such times as he may think best.” — Held, such language does not operate as an equitable conversion at testatrix’s death but only from the date of the actual sale.
    9. Where testatrix, in hei residuary clause, used the words “thus including lapsed legacies,” and by said- clause disposed of a blended mass of real and personal property, and it plainly appearing that she did not intend to die intestate, and it being determined that the language “lapsed legacies” refers to the personal property included in the legacy of residue which lapsed as well as other lapsed legacies, and it plainly appearing that the testatrix did not intend to differentiate between real and personal property in its disposition — Held, thac the word “legacy” included all-lapsed legacies and devises.
    On bill, &e.

      Messrs. Vredenbvrgh, Wall & Carey (with whom was Mr. Bavid B. Simpson, of the New York bar), for the complainants.

      Messrs. McCarter & English, for Marie E. Brewster and Laura L. Sayles.

      Mr. Peter Ilofsira (with whom was Mr. A. T. Sieher, of the New York bar), for Mary M. Ostrander and Laura J. Edwards.

      Messrs. Qoulb & ¡Smith (with whom were'ilí?'. A. Leslie Harwood, Jr., and Mr. L. 1). Jennings, oí the Massachusetts bar), for J. AY. Brewer, Helen E. Brewer, Millard Saties Brewer, Fannie R. Brewer and Augusta Brewer.

      Mr. Thomas F. McOran, attorney-general, for the state comptroller.
   Griffin, Y. C.

The bill in tin's case is filed for the construction of the will of Anry Edwards, who died, a resident of Elizabeth, New Jersey, on June 12th, 1918, leaving a last will and testament dated December 31st, 1912.

In the first paragraph of her will she directs the payment of all her just debts and funeral expenses. In the second paragraph she gives certain general and specific legacies, one of which requires consideration. It is as follows:

“I also give and bequeath to said Mary Morris Ostrander and Laura J. Edwards ten Middlesex AVater Company bonds, of the par value of one thousand dollars each.”

The remaining paragraphs, all of which require interpretation, are as follows :

“Third. All of the rest, residue and remainder of my estate, real and personal, wheresoever situate, thus including lapsed legacies,, 1 wish divided into four equal portions.
“Fourth. I give a one twelfth part of one of such portions unto John AVilmon Brewer, a one twelfth part of one of such portions unto Augusta Brewer and a one twelfth part of one of such portions unto Helen Francis Brewer, the part given to any of the three persons last mentioned dying before me. to go to their issue, if any. and, if none, to the survivor or survivors, and I give a three twelfths part of such portion to AYillard Sayles brewer and a three twelfths part of such portion to Fanny R. Brewer, and the remaining three twelfths part of such portion to Helen Blackmar.
“Fifth. I give a fourth part of another of such portions to John O. Sharp, a fourth part to Arthur R. Sharp, a fourth part to Helen Sharp, and the remaining fourth part of such portion, thus including any additions thereto which may result from the provisions of this will. I give, devise and bequeath unto my executor hereinafter mentioned to hold in trust and pay over the net income thereof to Marie Francoer Brewster during her lifetime, and at her death, or if she die before me, then at my death to pay the principal to her children, if any, or if she die leaving me issue, then I direct my executor to pay the said remaining fourth part of said portion to John C. Sharp, Arthur R. Sharp and Helen Sharp, share and share alike, and their shares, if they be then dead, shall go to their children or issue surviving, or, if none, then to the survivors or children of those dying leaving issue.
“Sixth. I give each of the two remaining fourth portions to my executor hereinafter mentioned, to be held by him in trust, to pay over the net income of one of such portions to Henry Sayles during his lifetime, and to pay over the net income of the other portion to Laura Larned Sayles during her lifetime, and upon the death of either, such one portion, and upon the death of both, the two portions, thus including accumulations and unpaid income, shall be paid to them to whom-1 have directed the first and second portions to be given, or to such as may then be entitled to receive the same in accordance with the provisions hereof respecting said portions.
“Lastly. I hereby nominate, constitute and appoint as the executor of this my last Will and Testament. William B. Aitken, of New York City, hereby giving him full power to make sale of any real estate whereof I may die seized, at public or private sale and to make sale of any personal property, and upon such terms and at such times as he may think best, and it is my will that my said executor shall not be required to give bonds for the faithful performance of the duties herein imposed on him. It is my wish’ that no sale of property be held upon the homestead premises in the City of Elizabeth, New Jersey.”

1. Tbe first question of doubt arises on tbe gift of ten Middlesex Water Company bonds. Tbe testatrix never owned water bonds, of that name, but, for some years prior to tbe making of tbe will and continuously down to tbe date of her death, owned ten Piscatawav Water Company bonds of tbe par value of $1,000 each. There is nothing in the language of the will which indicated her intention to bequeath -bonds which sh.e then owned, bnt, on the contrary, she gave such bonds generally. Such language makes the legacy general and not specific. In re United States Fidelity and Guaranly Co., 90 N. J. Eq. 254; Blair v. Scribner, 67 N. J. Eq. 583; Mecum v. Stoughton, 81 N. J. Eq. 319).

2. The next question to be considered is whether the gifts and devises in the fourth, fifth and sixth paragraphs are to a class. The cases generally state the rule to be that where an aggregate fund is given to several persons, ■nmiinaiim, to he divided between them in equal shares, if one dies before the testator his-shares lapses, the gift being to them as individuals and not as a class. Clark v. Morehous, 74 N. J. Eq. 658. In this latter case Vice-Chancellor Howell cites with approval the opinion of Judge. O’Brien (In re Russell, 168 N. Y. 169), who said: “A gift to a class has been defined by a recent decision of this court to be a gift of an aggregate sum to a body of persons uncertain in number at the time of the gift, to be determined at a future time, who are all to take in equal or some other definite proportions, the share of each being dependent for its amount upon the actual number.”.

But it is urged that the evidence offered without objection indicates that the testatrix made division of her residue among four classes of her relatives, wlm were first and second cousins, viz., in the fourth paragraph provision is made for the Brewer branch, in the fifth paragraph, for the Sharp branch, and in the sixth paragraph for two branches, of the Sa.yles family, and in her division she gave the equivalent of one-fourth of one-fourth (or one-sixteenth) to the first cousins, and one-twelfth of one-fourth (or one forty-eighth) to the second cousins, and from this it is argued that by separating her relatives in this manner she intended to constitute them as classes and give to them as such. This, however, is not sufficient to justify a finding that the testatrix gave to' the persons mentioned in each paragraph as a class. Dildine v. Dildine, 32 N. J. Eq. 78.

My conclusion, therefore, is that the parties mentioned in the fourth, fifth, and sixth paragraphs did not take as classes, and, therefore, the share of Helen Blackmar did not pass to the remaining persons in the fourth paragraph..

3,4. Helen Blackmar, mentioned in the fourth paragraph, died in the lifetime of the testatrix. The question presented is, What disposition should be made of her share ?

It is contended on the part of certain legatees that, as the legacy and devise is contained in the residue, on the death of the beneficiary her share passed — the personalty to the next of kin, and the real estate to the heirs-at-law; the opposite contention being, in effect, that on her death it continued in the residue by reason of the language, contained in the third paragraph, “thus including lapsed legacie0.”

The rule of law is that a general residuary bequest does not include any part of the residue itself, which fails (Ward v. Dodd, 41 N. J. Eq. 414 Hawk. Wills 42; Garthwait’s Executors v. Lewis, 25 N. J. Eq. 351; Humble v. Shore, 7 Hare 247), and were it not for the words in the third paragraph, “thus-including lapsed legacies,” the share of Helen Blaekmar would not pass as residue, but would be distributable among the next of kin and heirs-at-law. Notwithstanding this language, which evidences an intention that all legacies which might lapse or fail, including those in the residue, should form part of her residue, and be distributed accordingly, vet, in Humble v. Shore, supra, a contrary result was reached. In that case the testatrix, by her codicil, directed that her trustees should stand possessed of certain property upon certain trusts and that the same ultimately should sink into the residue of her estate and be disposed cf accordingly. Vice-Chancellor Wigram held that such language was not sufficient to continue this residue in the residue, but that it went to the next of kin and heirs-at-law. This case was followed in a number of other English cases, with the judges,' however, protesting against its sense and avoiding its effect wherever possible, until 1893, when, in In re Palmer (Palmer v. Answorth) (1893), 3 Ch. Div. 369, it was overruled, Lindley, L. J., saying: “But when a testator revokes a gift of a share of the residue, alters the gift, and subject to that alteration directs that the share fall again into his residue, he does not mean that such share shall be treated as ultimately out of the residue, but as ultimately in it, and to go as part of it to those to whom he leaves it ”

Lepes, L. J., in the same case, speaking of Humble v. Shore, said: “It is difficult to understand the principle of the decision or the reasoning by which it was arrived at,” and after giving several illustrations, he said, “a more obvious and palpable attempt to defeat the intention of the testator it would be difficult to imagine.”

In In re Allan (Dow v. Cassaigne) (1903), 1 Ch. Div 276, where the residuary estate was divided into four shares, one of such shares to be held for the use, &c., of each daughter, with a proviso that “if one or more of my said daughters dies without leaving issue,” &c., “tíre share o-r shares of my said daughter or daughters so dying shall fall into and become part of my residuary estate and be held and distributed upon the same trusts as are hereinbefore declared thereof.” The court below followed Humble v. Shore and held that there was an intestacy. Vaughn Williams, L. J., held that the judgment could not he sustained, and following Li re Palmer, held that the lapsed legacies were divisible between the residuary legatees. See, also, In re Whiting (1913), 2 L. R. Ch. Div. 1, to the same effect.

I think it is therefore quite clear that, under the law of England at the present time upon the death of Helen Blaekmar, the legacy would continue in the residue and he distributed as such. While in -the early English cases the courts proclaimed the duty of the judge to he to ascertain the intent of the testator and then give it effect, yet, in. .their tenderness for the heir-at-law, leaned very strongly to defeat this purpose and create intestacy; and Mr’. Justice Mitchell, in In re Gray’s Estate, 147 Pa. St. 67, 74; 23 Atl. Rep. 205, gives the plain reason for this rule or purpose, where he says: “The rule is in effect a concession to the set policy of the English law, nowhere more severely asserted than in chancery, to keep the devolution of property in the regular channels to the heirs and next of kin whenever it can be done.”

In considering this case, therefore, if the doctrine of Humble v. Shore has-not received the approval of our. courts in such manner as to be binding on this court, it is its duty to adopt such rule in the construction of this will as will he in accord with reason and common sense. Humble v. Shore was cited by Chancellor Runyon in Garthwait’s Executors v. Lewis, supra, and by Vice-Chancellor Van Fleet in Burnet v. Burnet, 30 N. J. Eq. 595, hut for the purpose only of stating the general rule. The cases had not to deal with a. will where the testator provided that a legacy in the residue which lapsed should sink into the residue. And in Ward v. Dodd, supra, the same rule was announced, citing Garthwait’s Executors v. Lewis, as well as Hawk. Wills 42. Hawk. Wills is also cited in the Garthwait Case, hut, by referring to the citation to support the text in Hawkins, reliance is placed on the English cases oí Humble v. Shore, and others which were thereafter overruled in In re Allan and In re Palmer, supra.

Neither the industry of counsel nor my own examination have discovered any case in this state which decides that where a testator, either by express words :or plain implication, provides that gifts of the residue shall not lapse but shall sink into or continue therein, the testator shall be regarded as dying intestate as to such gifts. I feel, therefore, at liberty to give effect to the intent of the testator regardless of the earlier English decisions above referred to. Taking the entire will into consideration, it is quite plain' that the testatrix did not intend to die intestate as to- any portion of her property. She anticipated that some of her beneficiaries might die in her lifetime, and made provision for such event, and, therefore, in the third paragraph, she not only gave to her residuary devisees and legatees all the rest, residue and remainder of her estate, both real and personal, in certain proportions, but she expressly provided that such residue should include lapsed legacies. It is argued that this language is applicable only to the general and specific legacies in the second paragraph mentioned. I think this interpretation is too narrow. She does not say that these words are applicable to the legacies theretofore given, but refers to legacies generally, and this language is broad enough to include all the legacies given in her will.

My conclusion, -therefore, is that upon the death of Helen Blackmar the legacies so given to- her continued in the residue to be distributed in accordance with the fourth, fifth and sixth paragraphs of the will.

5. Having determined that the share of Helen Blackmar continues as part 'of the residue fox distribution, among the- parties mentioned in the fourth, fifth and sixth paragraphs, the next question of doubt is, How should the distribution be made of the personal property ?

Her scheme of division was in forty-eighths — one forty-eighth being to second cousins, and three forty-eighths to the first cousins. On the death of Helen Blackmar, taking the precise shares given by the will, the rem'aining shares amount to forty-five forty-eighths. The question is whether the distribution should be made on the basis of giving to- them forty-five forty-eighths (which would result in an intestacy as to a part) or reduce the shares to forty-fifths and give to the parties the whole residue in the several proportions given by the testatrix. A case quite similar to this is Evans v. Field, 8 L. J. Ch. 264, where testatrix bequeathed the residue of her personal estate “and also- all such and so much of my personal estate the trusts, bequests and dispositions whereof in the will contained shall fail or become incapable of being performed.” in eleven equal parts among different persons. A legacy of one-eleventh part lapsed. It was held that the lapsed legacy fell into the residue, which became divisible into ten parts amongst the remaining residuary legatees. To the like effect is In re Wand (1907), 1 Ch. Div. 391, and In re Allan, supra.

My conclusion, therefore, is that by the death of Helen Black-mar the personal estate contained in the residue should be divided into forty-fifths, and that the first cousins should receive three forty-fifths and the second cousins one forty-fifth, each respectively.

6. The sixth question is, Are the remainders mentioned in the sixth paragraph devised to the parties mentioned in the fourth and fifth paragraphs vested or contingent ?

The distinction between a vested and a contingent remainder is that the former is so limited to- a person in being ánd ascertained that it is capable of taking effect in possession or enjoyment, on. a certain determination of the particular estate without requiring the concurrence of any collateral contingency. The uncertainty as to the remainderman ever enjoying the estate, which is limited to him by way »f remainder, will not render such remainder a contingent one, providing he has, by such limitation, a present absolute right to have the estate the instant the prior estate shall determine; but the absence of such absolute right renders the estate a contingent remainder. Keen v. Plume, 82 N. J. Eq. 526; affirmed, Idem. 645.

There is nothing in the sixth paragraph which postpones the period of vesting in the remaindermen: It is merely the time of enjoyment. The language of the third paragraph is sufficient to pass all the estate of the testatrix otherwise undisposed of by the will. My construction of this sixth paragraph, is that the testatrix merely gave to her executor in trust the two remaining fourth portions to pay the income thereon to Henry and Laura during their lifetime. She might readily have stopped at this point; but, in order to close up- her estate, she then directed that upon the death of either, or both, as the case may be, payment should be made to them to whom she had directed the first and second portions to be given, or “to such as might be entitled to receive the same in accordance with the provisions hereof respecting said portions;” in other words, having given the remainder to the parties in the fourth and fifth paragraphs, she merely directed that the personalty be divided among the parties therein named in the same manner as if it had always been there, with no idea of postponing the vesting of the estate.

My conclusion, therefore, is that upon the death of Henry Saylés, which occurred after the death of tire testatrix, his fourth was divisible among the persons mentioned in the fourth and fifth paragraphs in the manner above indicated; and that the only duty enjoined upon the executor with respect thereto is to pay it to them severally in the proportions above stated; and such course may be followed upon the death of Laura Lamed Sajdes.

7. The next question presented is whether the devise and bequest contained in the fifth paragraph to the executor in trust for Marie Francoer Brewster for her life constitutes a vested or contingent remainder.

This is clearly a contingent remainder. Keen v. Plume, supra; Kates, Trustee, v. Walker, 82 N. J. Law 157; Post v. Herbert’s Executors, 27 N. J. Eq. 540.

8. The eighth question propounded is whether there was an equitable conversion of the lands, and, if so, when ?

It is argued on one side that an equitable conversion took place on the death of the testatrix. Others urge, to the contrary, that it took place when and asi the lands were sold, and not before. The rule is laid down by Chancellor Zabriskie in Wurts’ Execu tors v. Page, 19 N. J. Eq. 375, that “when a testator has positively directed his real estate to be sold and distributed as money, it will be considered, for the purpose of succession, as personal,” but where he simply authorizes and empowers the executor to do so, “the real property could not be considered as converted into personal property until actually sold.” See, also, Meeker v. Forbes, 84 N. J. Eq. 271; affirmed, 86 N. J. Eq. 255; Keen v. Plume, 82 N. J. Eq. 645 (in tire court of errors and appeals).

My conclusion', therefore, is that as there was no imperative direction to1 sell, the real estate preserved its character as such until actually sold by the executor, and thereafter assumed, by actual conversion, the character of personalty.

9. One serious question is presented which calls for solution, viz., Ho the words “lapsed legacies”’ in the third paragraph, include lapsed devises?

If this will had been drafted by one without legal learning, the word “legacy” could readily be construed to apply to real as well as personal property, in view of the plain purpose to completely dispose of all her property and not die intestate as to' any part thereof. Hewill v. Green, 77 N. J. Eq. 345 (355); Burwell v. Mandeville’s Executor (1844), 2 How. 560; Hardacre v. Nash, 5 T. R. 716; 101 Eng. Reprint 398; Hope, ex dem. Brown, v. Taylor, 1 Burr. 269; 97 Eng. Reprint 308.

Here, however, the will was drafted by one learned in the law who used a word technically applied to personal property only, but intended thereby to pass real property as well. It was a mere slip in the selection of a word, or in the omission, following the word “legacies,” to add the words, “and devises.” The question, therefore, arises, What difference in treatment should be accorded in a case where a will is drawn by one learned in the law and one unlearned in the law? My judgment is, that it resolves itself into a question of evidence, where the burden is more strongly upon the person seeking to prove that the word was not used in its technical sense where the instrument was drafted by one learned in the law than in the' ease where it was drawn by one unlearned in the law. As above stated, the word “legacy” is considered as applying to all legacies, whether within or without the residuary clause. Her personal estate consists of about three hundred thousand dollars, and her real estate of about fifty thousand dollars, and they were treated as a blended mass in the residue.

There is nothing in the will to indicate that the testatrix intended to. separate the real and personal property in this blended mass for the purpose of her will; on the contrary, it is plainly apparent that as the personalty went so went the realty. She was dealing with the mass, regardless of whether the property was real or personal, and to say that the use of a technical but ina.pt word to express her purpose would prevent the passing of the real estate would be doing violence to her plain intent. This is unlike a case where a situation not contemplated by the testator arose, and no provision was made to meet it, as in Shreve v. Shreve, 17 N. J. Eq. 487. Here the testatrix anticipated the situation and made provision to meet it, but in doing so used an inapt word to express the purpose. In my view, this should not be regarded' as sufficient to- defeat the plain will of the testatrix. My conclusion, therefore, is that the words “thus including lapsed legacies,” in the residuary clause, cover both real and personal property.

The interest of the attorney-general in this- suit is to have it settled upon what principle the collateral inheritance tax should be assessed. Having determined whether the remainders are vested or contingent, I presume the amount of the tax can be automatically assessed without the further order of the court. If, however, I am in error as to this, counsel at the time of the signing of the decree, may present their views.


author: Grteein, V. C.

text:
    William F. Gillies et al. v. Frederick Monroe Dyer et al.
    [Decided May 6th, 1921.]
    1. Where a mortgage entitled the mortgagor to a release of a portion of the property on payment of a, part of the debt secured thereby, an agreement made after the maturity of the mortgage, in consideration of the payment at that time of a part of the mortgage debt, extending the time for payment of the balance without any reference to the provision for giving releases, did not entitle the mortgagor to a release of part of the mortgaged jiremises because of that payment, as his right to demand releases had expired, and he had only an equity of redemption in the property.
    2. Where a bill to foreclose a mortgage contained a paragraph admitting that the mortgagor was entitled to a partial release, but the evidence in "the case, even considering such admission, did not show that the mortgagees, in extending the time for payment after maturity, intended to extend the provision for releases, they will not be held to have lost their rights because of a mere slip in pleading.
    Oil bill, &C.

      Mr. Edwin T. Murdoch, for the complainants.

      Mr. Andrew Foulds, Jr., for the defendants.
   Grteein, V. C.

The bill in this cause was filed to foreclose a mortgage made October 31st, 1911, by Ernest E. Hunter, which, by mesne assignments, became vested in the complainants February 13th, 1919. The mortgage fell due October 31st, 1916. The only question litigated was whether an agreement: made November 22d, 1916, between George M. Gillies, William.F. Gillies and James P. Gillies (the iatter two being the complainants here) and F. Monroe Dyer, defendant (he being then the owner of the land), extending the time of payment to the 9th clay of November, 1921, carried with it a right in the defendant to demand from tire complainants a release of a portion of the mortgaged premises, under a release clause in, the mortgage, by reason of moneys paid by the defendant to the complainants on account of the mortgage debt after the principal debt had fallen due, and at or before the time of the signing of said agreement.

The clauses in the bond and mortgage upon which the defendant claims this right are as follows: The mortgage says:

'‘It is expressly agreed by and between the parties hereto that on the payment of not less than ten thousand dollars of the principal sum secured by this mortgage there, will be released from the lien of this mortgage such an amount of land as shall bear a pro rata to the value of the whole tract covered by this mortgage.”

The clause in the bond reads:

“And it is hereby expressly agreed that the said Ernest II. Hunter shall have the privilege of paying the principal sum secured by this bond at any time after two years from the date hereof. This clause shall not affect the release clause in the mortgage which accompanies this bond.”

On November 22d, 1916, after the bond and. mortgage had become clue according to their terms, the defendant paid on account thereof the sum of $14,800, and a receipt therefor was endorsed on the bond by the complainants, and contained a clause extending the time of the payment of the balance to, the 9th day of November, 1921. On the same day that this payment wa.s made an agreement was entered into between George M. Gillies and the complainants, of the first part, and the defendant, E. Monroe Dyer, of the second part, which, after reciting that there was then clue on said bond the sum of $20,200, with interest, from November 9th, 1916, reads as follows:

“The parties of tbe first part in consideration of one dollar paid by said party of tbe second part, the receipt whereof is hereby acknowledged, do hereby extend payment of the principal indebtedness secured by said bond as reduced by the payment of fourteen thousand eight hundred dollars to twenty thousand two hundred dollars to the 9th day of November, 1921; provided, the party of the second part meanwhile pays interest on said bond as reduced to twenty thousand two hundred dollars, at and after tlie rate of five per cent, per annum, from November 9th, 1910, and semi-annually thereafter on the sixth days of March and September in each year, and 'also complies with the other terms of said bond and mortgage; and the said party • of the second part, in consideration of the above extension and of one dollar paid by said parties of the first part, the receipt whereof is hereby acknowledged, does hereby covenant and agree to pay said principal-sum and interest as above set forth and comply with the other terms of said bond and mortgage.”

At. this juncture I may add that there is nothing in this agreement which carries with it the right to1 the release of any part of the lands on the payment on account of sums of ten thousand dollars or upwards, as provided in the mortgage; and that, without such agreement, considering that the bond and mortgage by their terms were past due when the agreement was entered into', in the absence of a new. agreement, the right to such release of a portion of the lands was a.t an end. Avon-by-the-Sea Land and Improvement Co. v. Finn, 56 N. J. Eq. 805. In that case, Mr. Justice Collins, speaking for the court of errors and appeals, said: “The equity appellant had in the mortgaged premises, after condition broken, was an equity of redemption from the- mortgage debt, not an equity to. compel a release that might impair the mortgagee’s security.”

Here, on default, the right of complainants to foreclose the mortgage was absolute, and the release clause (assuming that it was not personal but enured to the benefit of Mr. Dyer) lost its ■operative effect. The only right the defendant then had was the equity of redemption; and when the agreement was made extending the period of time for payment of the balance of the mortgage it in no. manner revived the right, of the defendant to ask for a release on account of the past payment of $14,800; and this is all that the defendant asks, The most that the defendant could ask would be that the contract should be so construed as to give to him the right to such releases on subsequent payments. I do not say, however, that such right exists because it is unnecessary'' to pass on this question.

The bond and mortgage both contained the usual thirty days’ interest clause giving to the complainant the option to declare the principal due. The defendant failed to pay a portion of the interest which fell due in March, 1919, and paid none of the interest whicli fell cine in September, 1919, and both sums remaining due and unpaid for upwards of thirty days, the complainants declared their option that the whole principal sum should be clue and payable, and filed their bill.

The defendant filed a counter-claim praying that the complainants be decreed to deliver a release under the terms of the mortgage. The complainants moved to strike out the counterclaim, and, upon perusing the bill, it seemed as if the twelfth paragraph of complainants’ bill conceded this right to'relief, -thus rendering the defendant’s counter-claim unnecessary. Counsel for complainants insisted that this twelfth paragraph could not bear such interpretation, but moved to strike out this paragraph, and it was stricken out accordingly. Having thus stricken out the paragraph upon which the defendant might rely, the counterclaim of the defendant was not stricken out. In considering the case, I have regarded the admission in the complainants’ bill as some evidence in favor of the defendant.

There is nothing in the testimony, so far as I have been able to observe, or in the correspondence down to the time of the filing of the bill, which shows that the complainants ever conceded the right of the defendant to this release. There is no evidence that at the time of the payment of the $14,800 the defendant asked for a release, or that there was an understanding had with the owners of the mortgage that the release should be given. The only evidence, therefore, is the admission contained in paragraph 12 of the bill, which, apparently, is a mistake of the pleader; and I am disinclined to'allow a mere slip in pleading to operate against the complainants’ right.

A decree will be advised for the complainants.


author: Porter, Y. C.

text:
    Thomas F. McCran, attorney-general, v. Myrtle Kay et al.
    [Submitted November 12th, 1921.
    Decided December 3d, 1921.]
    1. A testamentary trust for the establishing of a lodging-house for destitute women is a valid charitable trust.
    2. A will providing that, on failure of a trust for the establishment of a lodging-house for destitute women, the trust fund should be used to establish and maintain a hospital for sick animals created a charitable 'rust.
    3. A gift in trust for the establishment of a lodging-house for destitute women, or, if that proved a failure, for a hospital for sick animals —Held, to lapse, and the property to pass to the heirs-at-law and the next of kin because the property was insufficient for either purpose, either by using the testator’s real estate or selling it and investing the proceeds, and the trust could not be administered by contracting with some existing association, as the will, by naming the visitors and matron or manager, and by requiring Protestant management, and by forbidding any payment to any established charity or any association with any humane society, precluded such contractual method of 'administering the trust.
    On bill, &C.

      Messrs. Rilcer & Rilcer, for the complainant.

      Mr. Tilomas B. Fiizsiw mons and Mr. Aaron Marrler, for the defendant Anna E. B. Linnett.
   Porter, Y. C.

Complainant seeks an accounting of the estate of Sophia B. Corey, deceased, and the appointment of a- trustee to carry out the provisions of her will.

Miss Corey, a resident of Newark, died December 2d, 1912, and her last will and testament was duly admitted to- probate, and letters testamentary were issued only to Nancie Kay, as the other named executrix, testatrix’s, niece, Anna E. Baldwin Lin-nett, had bjr her marriage become disqualified as an executrix, mider paragraph 8 of the will.

Testatrix left a peisonal estate that now amounts to about. $4,000, and five parcels of real estate on Quitman street, Newark, valued at about $19,000.

The seventh paragraph of the will reads as follow0:

"I order and direct my executrices to endeavor to establish a house of lodging at night for destitute women, without distinction as to age, color or religious belief, the said house to be under the control and direction of strictly Protestant management, and I order that no money be paid to any already established public charities. After a reasonable time should the establishment of a lodging-house at night for destitute women prove to be, in the judgment of executrices and advisors, with the same, a failure, a hospital for sick animals shall be established, free from all associations or partnership with the so-called “Humane Society,’ or its members.
“One of the houses forming a part of my real estate might, if deemed adequate, be used as a lodging-house for destitute women, or should attempt to maintain such a lodging-house be decided to be a failure, one of my houses might, if deemed adequate, be used, with whatever land belonged to said house, for a hospital for.sick animals.
"Said hospital for sick animals shall be entirely under Protestant management, and for house of lodging at night for destitute women or said hospital for sick animals shall be employed as matron or helpers in any capacity, Protestant only.”

Paragraph 8 of the will appointed the executrices, and directed them “to associate with them as advisory committee Mrs. Benj. Stites and Miss Helen J. Elmer,” and further requested “my executrices to select suitable persons to succeed them as executor or executrices after they, through removal, physical failure, or prospective death, shall he unable longer to perform duties.”

Paragraph 9 reads:

“As matron of .lodging-house at night for destitute women, or if such lodging-house fail of success, 'and hospital for sick animals be established, for either charity, I appoint as matron Elizabeth Haas.”

Nancie Iváy, as executrix, without consulting with, or being advised by, Mrs. Stites or Miss Elmer, attempted to carry out the trust provided for in the will, by using the premises Nos. 109-110" Quitman street as a lodging-house for destitute women, under the management of Mrs. Haas as matron. This proved a failure. largely through lack of patronage and the cost of its maintenance, and it was abandoned; and no attempt was made to establish the hospital for- sick animals.

On May 9th, 1920, Nancie Kay died without exercising the power to appoint her successor, and Myrtle Kay duly qualified as the executor of her will; and on September 25th, 1920, a decree pro confesso was entered herein against her and other defendants.

Upon the filing of the bill a receiver was appointed to care for Miss Corey’s estate, and the receiver appraises its present value 'at about $23,000.

, The defendant Mrs. Lin nett, who is the sole heir-at-law and next of kin of Miss Corey, by her answer and counter-claim, contends that the trusts' provided for by the seventh paragraph of the will are not charitable trusts, and are void under the rule against perpetuities; and she further claims that as these trusts are incapable of execution, either under the terms of the will or under the cy pres doctrine, the property held for the purposes of the trusts should be decreed to belong to her.

A charity in the legal sense has been repeatedly defined by the courts in England and in this country, and, as stated by Chief-Justice Beasley in Thomson’s Executors v. Norris, 20 N. J. Eq. 488 (at p. 522), the doctrine of the English court of chancery with regard to the mere classification of things which are and those which are not charities in the eye of the law, has been very generally recognized in this country.

In Detwiller v. Hartman, 37 N. J. Eq. 347, Chancellor Runyon quotes with approval the definition of a charity in the legal sense given by Mr. Justice Gray in Jackson v. Phillips (Mass.), 14 Allen 556; and under the terms of this definition, the' trust createdl by the will, in the establishment of a lodging for destitute women, is a valid charitable trust. .

And on the authority of the University of London v. Yarrow, 44 Eng. Rep. 649 (1 DeG. J. 72), in which the opinion of the lord-chancellor is directly in point, the provisions of the will directing that upon the failure of the lodging-house for destitute women, the trust fund should be used to establish and maintain a hospital for sick, animals, also created'a charitable trust. .

In this and other states gifts in trust to the Society for the Prevention, of Cruelty to Animals, and to similar organizations, have repeatedly been held to' be gifts for charitable purposes.

Notwithstanding that the trusts in question are regarded as charitable, the facts established on the hearing show the impracticability of their execution. This is apparent from the provisions of the will; and it is demonstrated by the fact that the income from the trust estate and from the patrons of the lodging-house was insufficient to maintain the lodging-house, and that in consequence this object of tire trust had to be abandoned: Testatrix, apparently, anticipated that this result was possible and probable, and provided for it by' the creation of the further, or alternative trust, to establish and maintain a hospital for sick animals.

From the provisions of the will it appears that testatrix, with an exaggerated idea of the valrie of her estate, contemplated the establishment and maintenance of the lodging-house, or hospital, on an elaborate and extensive scale, and considered her residence on Quitman street and the grounds surrounding it suitable for her purposes.

Her will was made in 1907 and possibly her estate was then much more valuable than it is now. The real estate now constituting the bulk of the trust fund has no income value, and must be sold and converted into money to provide any income, and also' to avoid the continual drain upon the small personal estate to pay taxes, repairs and other fixed! charges; and such a sale of the realty would, of course, prevent its use for either a lodging-house or a hospital; and if the realty is not sold and the small personal estate is used to repair and equip the buildings for the purpose of a lodging-house or hospital, the trustee, if appointed, will be left practically without income for the mbintenanee and management of the same.

It has been suggested that if the realty were sold and the proceeds invested, with the amount of the personal estate, a possible annual income of $1,000 or $1,200 would be derived therefrom and that this income would enable the trustee to contract with some existing association, or establishment, or with a veterinarian, to maintain a hospital for sick animals, on at least a limited scale.

Aside from other objections to be mentioned, it appears from the testimony that the lodging-house could not be established and maintained in rented premises on $1,200, which is the largest amount ofi income the trust estate is likely to produce; and it also appears that this income, without any deduction for the expenses of administering the trust, would be insufficient to support any establishment entitled to be called a hospital for sick animals.

The evidence is that the wages or salary of an attendant for such a hospital, if the experiment were made to establish it .under contract, would be at least $1,000, and that in addition there would be other expenses connected with such a hospital to be paid out of the income, and that under such an arrangement but very few sick animals could, or would be cared for. And that in addition there would always be expenses to be provided for in connection with change of management and of location, and in the collection and transportation of sick animals.

But such contractual method of administering the trast would be contrary to the wishes and purposes of the testatrix, for she has directed that such a hospital shall be not only maintained but established, and, if possible, that this should be done in one of her houses and on the lands connected with the same; and to. insure both the establishment and maintenance of said hospital, she has selected the visitors as well as the matron, or manager, for it; and she has further directed that the hospital shall be established and maintained “free from all associations or partnership. with the so-called 'Humane Society/ or its members;” and she has further directed that the hospital shall be entirely under Protestant management, and that only Protestants shall be employed as matron or helpers in any capacity.

In view of the present condition and value of the trust estate, and the amount of net income likely toi be received therefrom, coupled with the impracticability of adopting and enforcing, in apparent conflict with the terms of the will, a continuous contractual method of administering tlie trust, that will annually care for any reasonable number of sick animals under Protestant management exclusively and that will always be free from all associations or partnerships of any so-called "Humane Society” ior its members; and in the absence of any proof showing the possibility of executing either trust in any practical way, or in any wai’ that will effectuate the intentions of the donor, it must be concluded that neither trust is possible of execution, in accoi dance with the tenns of the will or under the cy pres doctrine.

As it is impossible to carry out the expressed general charitable put poses of the testatrix by the means specified by her, or by the use of other means or methods, a decree will be advised that the gift lapses, and as no other disposition has been made of the estate, it will go to Mrs. Linnett, as the sole heir-at-law and next of kin of the testatrix. MacKenzie v. Trustees, &c., 67 N. J. Eq. 652; Brown v. Condit. 70 N. J. Eq. 440; Rector, &c. St. James Church v. Wilson, 82 N. J. Eq. 546; affirmed, 83 N. J. Eq. 624.

The costs and allowances, if any, should be paid from the estate.


author: Foster, V. O.

text:
    Mary E. Ringold v. George W. Ringold.
    [Submitted January 13th, 1922.
    Decided January 21st, 1922.]
    1. Where land was purchased and title taken jointly by a husband and wife, on partition after divorce, the husband is not entitled to contribution for payments made, as payments by the husband on purchase of land in his wife’s name, in the absence of proof of a contrary intent, are presumed to be gifts.
    2. Such presumption may be rebutted by proof that they were made with the intention or agreement that they should not be gifts.

      On bill, kc.

      Messrs. Durand-, Ivins & Carton, for the complainant.

      Mr. William L. Edwards, for the defendant.
   Foster, V. O.

In 1911 certain lands in Asbnry Park were conveyed to the parties in this cause, who were then husband and wife, as tenants by the entirety. In January, 1920, complainant obtained a final decree of divorce in this court from defendant; she then filed her bill in this cause for the partition of the property mentioned; defendant in his answer set up that he had made certain payments on the property for which he should be allowed; thereupon reference was made to Walter Taylor, Esq., as special master, to ascertain the nature and amount of these payments and to report what allowance, if any, should be made therefor. The master has filed his report and defendant has filed exceptions to'that part of the report wherein the master refused to allow defendant credit, for all moneys paid by him during coverture for taxes and insurance premiums and for monthly dues to the building and loan association in reduction of the amount of two mortgages held by the association upon the premises in question.

Because the title to the property was in the parties as tenants by the entirety, the bonds and mortgages to the building and loan association were executed by them jointly, and the shares of stock in the association on which the loans were based were in their joint names. By the terms of the loan the parties were required to pay $57 monthly as dues in reduction of the amount of the loans until the mortgages were paid in full under the rules of the association.

Defendant is a Pullman porter, and until they separated his wife kept their home and rented some of the rooms therein to lodgers. From the income thus received she paid part of the household expenses, and! also paid some of the taxes, insurance premiums and building and loan association monthly dues. Defendant to a much.‘larger extent contributed to these expenses, and particularly to the payment of the monthly clues, and these payments made by him amount to about $3,000.

Defendant’s contention is that the payments made by him during coverture for dues, &c., in reduction of the mortgage debts, were paid on their joint and several obligations, and that, as they were both under the common burden and liabilitjr to pay these dues, he is entitled to. contribution from complainant of all moneys necessarily paid by him «ai her behalf.

This doctrine of contribution does not apply, however, as between husband and wife, in a situation like the present one, as it is well settled that the expenditure by a husband of his own moneys in the purchase of lands in the name of his 'wife, or in the improvement of her property, is presumed to be a gift to her, in the absence of proof of a contrary intent. Peer v. Peer, 11 N. J. Eq. 432; Persons v. Persons, 25 N. J. Eq. 250; Black v. Black, 30 N. J. Eq. 215; Lister v. Lister, 35 N. J. Eq. 49; affirmed, 37 N. J. Eq. 331; Read v. Huff, 40 N. J. Eq. 229; Selover v. Selover, 62 N. J. Eq. 761; McGee v. McGee, 81 N. J. Eq. 190; Prisco v. Prisco, 110 Atl. Rep. 111.

The reasons supporting the presumption of a gift, as indicating an intention to make an advancement or settlement upon a wife, apply whether the gift he made in one sum, or if, as here, the gift be made in monthly installments, in the form of monthly dues, paid by defendant, in reduction of the mortgage debt upon the property in their joint names, as these installment payments were in fact and effect payments on the purchase price' of the property.

Tn fact, in the present situation, these reasons apply with greater force, for, by the nature of their estate in the property, the defendant in making such payments was noi only making-advancements or settlements upon his wife, he was also reducing his own liability upon the bonds and mortgages and. was thereby completing the payment of the purchase price of the property, and he would, if he survived her, obtain the exclusive benefits of the payments thus made. And it is not unreasonable to assume that he had this possibility in mind when he made these payments.

The presumption .that these payments were intended as gifts may of course be rebutted by proof that they were made with the intention and understanding or agreement that they should not be presumed or considered as gifts.

The nature and extent of the proof required to “rebut the presumption of a gift or settlement to a child or wife must be cf facts antecedent to, or cotemporaneous with, the purchase, or else immediately aftei wards, so as to be in fact part of the same transaction” (Read v. Huff, supra,), and this proof “must be certain, definite, reliable and convincing, leaving m> reasonable doubt of the intention of the parties.” McGee v. McGee, supra. There is no such proof in this cate relating to the time when any or all of the due? in question were paid, nor to any other timé, and T will advise that the exceptions be overruled.