author: Bergen, V. C.

text:
    Josephine D. McClave et al. v. Austen H. McGregor et al.
    [Decided November 2d, 1906.]
    A bill reciting an agreement between the parties for the sale of real estate and charging that defendant has failed to comply with his contract of purchase, and that he has, by recording the agreement, cast a cloud over complainant’s title, and praying for its removal does not state a case within 8 &en. Stat. p. 8486, relating to suits to quiet title, and providing that where a person is in peaceable possession of lands, claiming to own the same, ánd his title thereto is denied, it shall be lawful for him to bring a suit to settle the title, &c., for complainant has an adequate remedy either by a suit for specific performance or for rescission.
    On demurrer to a bill to quiet title.

      Messrs. Guild •& Martin, for the complainants.

      Mr. Thomas P. McKenna, for the defendants.
   Bergen, V. C.

It is sought to support the bill filed in this cause under an “Act to compel the determination of claims to real estate in certain causes and to quiet the title to the same” (3 Gen. Stat. p. 3486), and the effort is challenged by a demurrer. The stating part of the bill of complaint is not confined to those matters required in a bill of this character; on the contrary, it recites an agreement between the parties for the sale and purchase of real estate, and charges that the defendant has neglected to comply with his written agreement in that behalf, beyond the payment of $2,500, made by him when the contract was executed, on account of the purchase price, which was $20,000. The gravamen of the complainant is that the defendant McGregor, by recording the agreement in the register’s office in the county wherein the lands are situate, has cast a cloud over complainant’s title, to dispel which this bill was filed.

Numerous reasons were specified by the -demurrant, but we are met at the threshold with the question whether the subject-matter of this bill of complaint falls within the class of cases for which the statute intended to provide a remedy.

The encumbrance or cloud upon this title, set out in the bill of complaint, was one created in part by the act of the complainant, and manifestly the issue to be tried is whether the defendant has so conducted himself as to deprive him of the right to have his contract with the complainant specifically performed, or the consequent loss by forfeiture of the large payment made by him on account of the purchase price, if such relief were denied him. If the complainant does not desire specific performance, but rather a rescission of his contract, he has a right to come into this court, and, upon presenting an equitable case, ask to have the contract rescinded and given up to be canceled of record, in the same manner as if the encumbrance was a mortgage without consideration, or fraudulently obtained, and registered in the proper office. An ample equitable remedy to remove this cloud on his title being at hand, I do not consider that the complainant is justified in an attempt to obtain a rescission of his contract under the statute which he now invokes, and I aim of the opinion that his proceeding falls under the condemnation of the rule adopted by Vice-Chancellor Stevenson, in Van Houten v. Van Houten, 68 N. J. Eq. (2 Robb.) 358. The limitations attending a bill of this character are clearly analyzed and expressed by the late Chief-Justice Beasley, speaking for the court of errors and appeals, in Jersey City v. Lembeck, 31 N. J. Eq. (4 Stew.) 255, where he says: “The inequity that was designed to be remedied grew out of the situation of a person in the possession of land as owner, in which land another person claimed an interest which he would not- enforce, and the hardship was that the person so in posses'sion could not force his adversary to sue, and thus put the claim to the test. * * * In the present instance the complainant had it in his power, by one of the customary processes of the law, to bring to judgment the claim he wished to control, and it would therefore seem to be going out of the way to maintain that this statute is applicable in aid of his inaction. If a party in possession of land can throw the hostile claim into a course of law, and thus get rid of the cloud overhanging his estate, why should he not do it P And what reason is there to say that this act was designed to help a party who was in no strait, but of his own choosing ?”

In the case now under consideration- the complainant may proceed to enforce the specific performance of his contract, or he may return the money he has received, and ask that the contract be rescinded and given up to he canceled.

Under the view which I entertain, and have here expressed, this demurrer should be sustained, and a consideration and determination of the other causes of demurrer will serve no useful purpose.

The case of Austen H. McGregor v. Hilman O. Carriere et al., in which the same question arose and which was argued by counsel at the same time, is controlled by the determination of this cause, and the demurrer in that case will also be sustained, with costs in each case.


source: Caselaw Access Project

author: Bergen, Y. C.

license: Public Domain

text:
    Emma W. Cook et al., executors, &c., v. William W. Weigley et al.
    [Decided November 24th, 1906.]
    The agreement of 1833, between the commissioners representing the States of New Jersey and New York, fixing the boundaries between such states, article 2, provides that the State of New York shall retain its present jurisdiction of and over the islands lying in the waters of the bay of New York.—Held, that such agreement did not deprive the State of New Jersey of that element of state sovereignty which permits the 'determination of the status and ownership of lands within the state limits, and hence the court of chancery has jurisdiction to enforce its decree of foreclosure of mortgage and sale of islands in the harbor of New York, but within the New Jersey boundary.
    On demurrer to bill of review.

      Messrs. Vroom, Dickinson & Scammell, for the complainants.

      Mr. Frank Durand, for the demurrants.
   Bergen, Y. C.

The decree which it is now sought to review and annul was made in the above-entitled cause adjudging the foreclosure of the equity of redemption in, and directing the sale of, certain lands for the purpose of paying a debt, to secure which the premises in dispute were mortgaged. The lands lie within the boundaries of the State of New Jersey, but within the harbor of the State of New York, and are islands surrounded by the waters of the Hudson river and the bay of New York, shortly described as “Robbins Reef” and “Oyster Island.” The charge in the bill of review is that since the decree complained of was made, William W. Weigley, one of the defendants in the foreclosure suit, has discovered that under the terms of the compact or treaty made between the Slates of New York and New Jersey in 1833, which was afterwards ratified and confirmed by the legislature of each state, and approved by the congress of the United States, it was agreed that the State of New York should retain its exclusive jurisdiction of and over Robbins Reef and Oyster Island, and that by virtue of such treaty this court had no jurisdiction over the subject-matter, and is without authority to enforce its decree of foreclosure and sale, and for that reason he is entitled to have the decree reversed and made void. To this bill a demurrer has been interposed, and as the principal issue relates to the construction of article 2 as expressed in said treaty in the following words:

“The State of New York shall retain its present jurisdiction of and over Bedlow’s and Ellis’ Islands, and shall also retain exclusive jurisdiction of and over the other islands lying in the waters above mentioned and now under the jurisdiction of that state,-’

I shall not consider the other questions raised by counsel on the argument, because the conclusion to which I have arrived on the main point will dispose of the whole question. The situation presented is this: Weigley, as the owner of Robbins Reef and Oyster Island, mortgaged them to the complainant. These islands lie within the territorial limits of New Jersey, and the right to enforce the payment, at maturity, of the mortgage in the courts of this state is questioned, because by the terms of the treaty exclusive jurisdiction was retained by New York over certain islands, among which are those in question. The only foundation for this bill of review is the claim that the retention of exclusive jurisdiction, as expressed in said treaty, deprives the State of New Jersey of that element of state sovereignty which permits the determination of the status and ownership of lands within the limits of such state.

Unless I misinterpret the opinion of Mr. Justice Garrison in Central Railroad Co. v. Jersey City, 71 N. J. Law (41 Vr.) 81, it effectively disposes of the question here raised in favor of the demurrant. In this opinion the learned jurist distinguishes with clearness and accuracy the distinctive meaning to be accorded to “exclusive jurisdiction” and “sovereignty,” respectivety, in construing the treaty between the states. On this subject he said: “This expectation is fully justified by the terms of the compáct. Article 1, in clear and explicit language, fixed the boundary line between the states as the middle of the Hudson river and the bay of New York. This disposed of the question of territorial limits, and had this been the only matter submitted to the commissioners would have exhausted their authority in the premises. They were, however, empowered to deal also with jurisdiction. Hence the qualification with which article 1 concluded—‘except as hereinafter otherwise particularly mentioned/ To fulfill the conditions of this clause, the matters to be particularly mentioned must be ‘otherwise’—that is, must alter or modify what has gone before, and secondly, must be capable of exception—that is, of subtraction from it, hence must be less than what had preceded. Articles 2 and 3 fulfill with precision each of these conditions, and from their position and context admit of no other rational interpretation than that they are the excepted matters to be particularly mentioned, by which the otherwise unqualified concession of territorial limits was to be modified and abridged. This was affected in article 2 by providing that New York should retain its jurisdiction over certain islands lying in the waters mentioned in article 1, while article 3 continued the subtracting process by stipulating that New York should enjoy exclusive jurisdiction over all the waters included in the territorial limits of New Jersey up to low-water mark on the New Jersey shore.” It is difficult to conceive why, if the ceding of exclusive jurisdiction over waters included within the territorial limits ceded confers only an extraterritorial jurisdiction, and does not destroy such governmental powers as sovereignty implies, why the retention of exclusive jurisdiction over a part of the land declared .to be within the limits of the State of New Jersey should have any greater force. By article 2 of the treaty the lands in question are declared to be within the boundary of the State of New Jersey, and subject to the sovereignty of that state, encumbered, however, with the right of New York to exercise jurisdiction over it. This, in my opinion, does not change the territorial location of the land, for the reservation of jurisdiction thereover did not have the effect of retaining the land as a part of the territory of the State of New York, and the jurisdiction which the State of New York retained, and may exercise, is no greater than the “exclusive jurisdiction” granted to New York over all the waters of the bav of New York, and does not have, the effect, here contended for, of depriving this court of the jurisdiction necessary to determine the legal status of these islands to the same extent that it may do with regard to all other lands within its boundaries.

In the extremely able and interesting opinion read by Mr. Justice Garrison in Central Railroad Co. v. Jersey City, supra, he sums up the conclusions reached by the courts of New York on this question in the following words: “Indubitably, there-

fore, the State of New York, through its highest judicial tribunal, has expressly disowned any interpretation of the compact in question by which the sovereignty of New Jersey over the territorial limits granted by the compact of 1833 is to be in anywise impugned.”

The conclusion which I have reached is that the demurrei should be sustained, with costs.


text:
    Edward R. Thomas v. International Silver Company et al.
    [Decided January 11th, 1907.]
    1. A corporation, by pledging its own stock as collateral to another corporation, cannot empower the pledgee corporation to exercise a power or incident of ownership which the real owner does not possess.
    2. Evidence examined, and held to show a pledging of stock, not made in good faith for the purpose of affording additional security for loans, but for the purpose of placing- the stock in the hands of those friendly to the existing management, in order that it might be voted on to retain them in power, and thus avoid the letter and spirit of the prohibition contained in the thirty-eighth section of the General Corporation act of this state. P. L. 1898 p. 277. ■ , .

      Mr. Robert H. McCarter, attorney-general, and Mr. Otto Hess (of the New York bar), for the complainant.

      Mr. John IT. Griggs and Mr. Graham Sumner (of the New York bar), for the defendants.
   Bergen, Y. C.

The United States Silver Company is the owner of ninety-three thousand shares of the common and five thousand shares of the preferred stock of the International Silver Company, and the latter company owns all of the capital stock of the United States Silver Company, and controls, through such ownership, its management. The direct result intended by this arrangement is the voting of the shares of the International company, registered in the name of the United States company by the officers of the International company for such persons as they may desire to continue in, or appoint to, the management of their company, the directors of the United States company being also directors of the International company. The testimony shows that all of the capital stock of the United States Silver Company was purchased by, and now belongs to, the International company, although some of the shares stand in the names of the officers of the International company for the purpose of qualifying them as directors. That the International company is the real owner of the stock, and that its officers should not be allowed to exercise the voting power usually incident to stock ownership, either directly as owners, or indirectly through its control of the United States company, seems to me •very clear, and their right to vote the stock was not seriously pressed on behalf of the defendants on the argument. No substantial change in the situation upon this branch of the case has occurred since the matter was passed upon by the court of errors and appeals in O’Connor v. International Silver Co., 68 N. J. Eq. (2 Robb.) 680, and the argument for the defendants was based upon the assumption that, in equity, the International company was the owner of the stock. The present controversy arises over the right claimed by certain pledgees, to whom the stock has been assigned in pledge as collateral for the debts of the International company, to vote at the next annual meeting of that company for the election of officers. The evidence shows that just previous to the filing of the bill of complaint by O’Connor, the stock owned by the United States company was transferred to several banks and trust companies as collateral security, in some cases for loans already made to, and in others for loans expected by, the International company. The present proceeding looks to an injunction preventing the pledgees from vo'ting on the hypothecated stock held by them respectively, which in each case was regularly transferred to them on the books of the International company, the transfer expressly empowering each pledgee to vote thereon.

The first question presented is, can a corporation, by pledging its own stock as collateral to another corporation, empower the pledgee corporation to exercise a power or incident of ownership which the real owner does not possess? Section 38 of the Corporation act of this state declares “shares of stock of a corporation belonging to said corporation shall not be voted on directly or indirectly,” and if by pledging stock as collateral security the directors of a corporation can endow the stock with a virtue it does not possess in the hands of the real owner, and the disqualification of the pledgor to vote the stock does not extend to the pledgee, it would appear that in .every case where a corporation is the owner of its own stock a ready method is provided by which the officers of a corporation desiring to perpetuate themselves in office can bring about that result, and it should not be allowed unless the law plainly requires it, because it is in effect an indirect way of voting the stock. According to section 37 of the same act the pledgor may represent his stock at all meetings and vote thereon as a stockholder, “unless in the transfer to the pledgee on the books of the company he shall have expressly empowered the pledgee to vote thereon.” The right to vote on stock pledged as collateral remains, under our law, with the pledgor, unless by his act he shall empower the pledgee to vote thereon. The transaction is a contract between the parties, settling as between them who shall exercise the voting power incident to the ownership of the stock. It is in its natufe a proxy given by the pledgor to the pledgee to represent the voting power of the owner, and may be revoked by the pledgor at any time by redeeming his pledge. That the directors may sell the stock and thereby restore its voting power, does not meet the question, for an absolute sale of the stock deprives the pledgor of any right in, or control over, the stock, it is not subject to redemption, and the real owner in such case takes the voting power, not by way of contract or proxy, but as a right incident to his ownership. To interpret our statute otherwise would open the door to a constant evasion of the law which prohibits directors from voting, directly or indirectly, on the stock of their own company, because temporary loans could always be made by them just prior to the annual election, and the stock pledged with a voting power to persons known by the directors to be friendly to their aspirations.

My conclusion is, that under our law whenever the owner of stock is disqualified to vote it, that disqualification is not removed by simply hypothecating the stock as collateral for a loan, and that the right which the law gives to the pledgor to empower “the pledgee to vote thereon” is limited to such pledgors as are themselves possessed of the right to vote on the stock which they own, and that the pledgees in this case hold the stock of the International company subject to the same disqualification, so far as the power to vote thereon is concerned, as that which the statute imposes on the pledgor.

The second question presented is whether the pledging of this stock was made in good faith for the purpose of affording additional security for loans made to the International company, or for the purpose of placing the stock in the hands of those friendly to the existing management in order that it might be voted to retain them in power, and thus avoid the letter and spirit of the prohibition contained in our law. The evidence convinces me that the directors pledged this stock, not as security, but simply for the purpose of restoring to it a voting power that the pledgees might exercise in their interest. It was a palpable attempt to evade the law and to secure the benefit of the votes which the stock would represent in the hands of a duly-qualified owner. This stock had only a nominal value, and was intrinsically worthless as security independent of the fact that it could have no possible value until the very debts it was given to secure had been liquidated, for all of the assets of the company which supported the stock would be first liable for the debts of the company, and if the assets would not so far extend then the stock would be absolutely worthless either to pledgor or pledgee.

We do not have to look very far to ascertain the motive of these directors. In March, 1904, a circular letter was mailed to all of the stockholders of the International company by three of its stockholders who claimed to be the largest individual holders of the stock of the International company, one of them being the complainant in this cause, requesting the attendance of stockholders at the next annual meeting, for the purpose of securing representation on the board of directors for such stockholders as were not either officers or managers of the company. A careful reading of the letter shows that there is nothing improper or unfair in its statements, nor does it indicate any motive other than a desire to bring about what they esteemed to be a more economical management of the company. Whether they were justified in their claim that the business could be conducted with greater economy than was then being exercised, I am not called upon to determine, but the right of stockholders largely interested, to appeal to their fellow-members of the company to attend the annual meeting and urge reforms and retrenchments in the management of the company, or if unable to attend the meeting to send a proxy that others might represent them, is not an act which the officers of a well-managed company ought to complain of or discountenance, and I cannot find in it any cause for the alarm which Mr. Rockwell, the president of the First National Bank of Meriden, Connecticut, said induced him to start a concerted movement by the banks to secure from the company a pledge of its own stock as collateral for its debts, existent and anticipated. It is not denied that up to this time the International company kept large balances in the institution to which the stock was afterwards pledged, and that its credit was sufficient for it to procure all necessary funds to carry on its business without giving any collateral, and as an effort by stockholders to reduce the expense of conducting the business was not likely to injuriously affect its credit, I do not deem it necessary to analyze in detail the large amount of testimony taken in this cause. It is sufficient to say that it convinces me that the movement started by Mr. Rockwell, which resulted in the pledging of the stock in question, had but one real purpose, and that was to have the stock transferred with a voting power, to friendly parties who would exercise it in the interest of the directors of the International company, and thereby continue them in its management, and is 'but a thinly disguised scheme to have stock owned by the corporation voted upon indirectly. The evidence shows that Mr. Rockwell was a very intimate friend of Mr. Dodd, the president of the International company, and a brother of the secretary of that company; that upon the receipt of the circular letter to which I have referred, he went to New York City from Meriden, where the general office of the International company is located, and visited the officers of the American National Exchange Bank, the National City Bank, both of New York City, and of the Hackensack Trust Company, and arranged that those institutions should make a demand upon the International company for a pledge of its stock, being the banks and trust company which he knew were at times loaners of money to the International company, and told them that the bank he represented, as well as the Home National Bank, of Meriden, intended to demand a pledge of the stock of the International company, and suggested that they pursue the same course, in order, as he said, that they might be represented at the stockholders’ meetings with a right to vote on the stock to be transferred to them. At the time of his visit to New York the American Exchange Bank had no claim against the International company, while the company then had on deposit with that bank a large balance, nor was there any debt owing at that time to the Hackensack Trust Company, but, on the contrary, the trust company was indebted to the International company for a considerable deposit balance. It is true that the International company was then a borrower from the National City Bank, and also from the two banks in Meriden, for which accommodation, however, the International company carried large balances. The transfer of this stock took place about the lfth of March, 1904, at which time the indebtedness of the company to the National City Bank was $50,000, while its credit balance there was nearly $46,000; its indebtedness to the Home National Bank was $40,000, while its credit balance was nearly $63,000; its indebtedness to the First National Bank being $20,000, while its credit balance was $15,000. Under these circumstances, coupled with the fact that the International company had, up to that time, been considered by all these financial institutions as solvent and entitled to a very liberal credit, at the same time keeping generous balances with each of them, and no change in their financial condition being asserted, it is impossible to come to the conclusion that these institutions were at all alarmed about the financial condition of the company, and had no real desire to have the stock of the International company pledged as security, beyond a willingness to aid the persons in control of a profitable customer to continue in power. The stock was taken, not because it was a collateral of any value or as security, but in order, as it was expected, to restore a suspended voting power to be exercised on behalf of the officers of the company making the pledge. That the officers, representing the pledgor and pledgee corporations, testify that no bargain was made regarding the persons for whom the votes should be cast, and that the power of the pledgee to vote as it pleased was not restricted by any agreement, I am justified in inferring from the evidence that there was a well-founded expectation on the part of the officers of the International company that the pledgee would vote the stock in their interest, and I have, no doubt, from the various efforts made by the directors of the International company, as disclosed in this case, to control the voting power of this stock, that if they were at all doubtful as to the intention of either of these pledgees, the pledge would have been promptly redeemed and hypothecated with a more steadfast friend.

On this branch of the case my conclusion is, that these pledgees are not bona fide holders of this stock as collateral for loans made by them, but took it for the sole purpose of aiding in the indirect voting of the stock of a corporation owned by the corporation itself, and that the pledgees hold this stock in equity, in trust for the International company, and without any real interest therein, and that to permit them to vote it would effect the very evil which the law intended to prohibit when it forbade the voting by the corporation of its own stock either directly or indirectly.

I will advise an injunction preventing the defendant pledgees from voting on the stock held in pledge.


author: Garrison, T. C.

text:
    Mary Sharp v. William H. Sharp.
    [Decided October 26th, 1906.]
    1. Where the only evidence of the desertion of petitioner’s husband, which was alleged to have occurred in St. Louis, Missouri, in 1892, was that of petitioner herself, and the only other testimony in the case was given by persons residing in New Jersey, that the husband had not visited his wife since her return to her father’s house in 1895, there was not sufficient corroboration as to the fact of desertion to entitle petitioner to a divorce.
    2. Where, in a suit for divorce for desertion, the original separation was not shown to have been a desertion, evidence proving its continuance was insufficient to entitle the wife to a divorce.
    On petition for divorce.

      Mr. Blanchard II. White, for the petitioner.
   Garrison, T. C.

This is an undefended divorce case. The allegation is desertion. The master reported in favor of a decree for the petitioner. I cannot concur therein, and I find that the petitioner has not made out a case entitling her to a decree.

Briefly stated, the facts are that she was married in 1883, and went shortly thereafter to live with her husband in St. Louis, Missouri. He was a machinist, employed by a firm in that city. They lived there for nine years, having two children born to them. They lived in entire amity. She testified that on the 15th day of March, 1892, her husband arose, breakfasted, and went to his work as usual, kissing her and the children good-bye; that later in the morning he came back and told her that he was going to repair some machinery in a near-by factory, and would be through about dinner time, and would be home for dinner; that she ascertained that he did go back to the shop of his employers and left there to come home to his dinner; that he did not come home, and that she has never seen him since, and has never heard from or of him since. She testifies that she made inquiries about him, but could learn nothing; that she consulted the police, requesting them to institute a search, and also advertised his disappearance, asking for information; that she inserted such advertisements for over two weeks, but never-learned anything concerning him; that she continued to live in St. Louis for about three years, and then returned to her father’s house at Retreat, in Burlington county, in this state, in the year 1895, and has since continued to live there. She testifies that she cannot conceive of any reason why her husband left her, nor of any reason why he acted as he did, and why he did not return.

The only other testimony in the case is given by persons who live in Burlington county, New Jersey, and who testify that they know that the husband has not visited the wife since her return to her father’s house in 1895.

I do not see how a divorce can be granted to the petitioner in this suit without violating the inflexible rule that the testimony of the party seeking the divorce must be corroborated as to the fact of desertion, and that testimony proving the continuance oC the separation is not sufficient unless it shows that the original separation was a desertion. Corder v. Corder, 69 Atl. Rep. 309 (Vice-Chancellor Emery, 1904).

This disposes of the case without the necessity of considering the questions which would arise if the petitioner’s evidence was corroborated as to the facts attending the origin of the separation.

I will advise a decree dismissing the petition.


author: Garrison, V. C.

text:
    Catherine W. Lignot et al., executors, &c., v. J. Edward Jaekle.
    [Decided November 18th, 1906.]
    1. On a bill by grantors against grantees in a deed to enforce a restric tion contained in the deed against the construction of a flat or tenement-house, evidence considered, and held to show no waiver of. the restriction.
    2. Any building consisting of more than one story, in which building there are one or more suites of rooms on each floor equipped for separate housekeeping purposes, is a “flat,” within the meaning of a restriction in a deed that the grantee shall not permit to be erected on the premises any building which shall be used or occupied as a flat.
    3. If what is known as a “flat” becomes an “auartment-house” when higher rental is charged, the payment of a rental of from $35 to $40 per month does not turn what is otherwise a “flat” into an “apartment,” so as to take it out of a building restriction binding the grantee not to erect a flat on the premises.
    4. Where a grantor, retaining a portion of the land, enters into a written understanding with the grantee restricting the enjoyment in order to benefit the portion retained, and the restriction is reasonable, it will be enforced in equity against the grantee.
    5. If a grantee claims that his deliberate disregard of a building restriction written in a grant does not damage the grantor, he must make his position clear beyond the possibility of doubt.
    6. In an action by grantors against grantees to enforce a building restriction contained in a deed, evidence held to show that complainants were not guilty of laches.
    On pleadings and proofs.

      Messrs. Hudspeth & Garey, for the complainants.

      Mr. I. Faerber G-oldenhorn, for the defendant.
   Garrison, V. C.

This is a bill filed by the executors of Peter Joseph Jules Lignot against J. Edward Jaekle to enforce against the latter a restriction contained in a deed from the complainants to the defendant.

The complainants are executors and trustees under the will oi Peter Joseph Jules Lignot, with power of disposition of his property.

Peter Joseph Jules Lignot died in 1887 seized of a large tract of land in the Greenville section of Jersey City. At the time of his death this property consisted of a mansion-house or homestead and the usual buildings in connection with such, the rest of the land being orchard or meadow land. The complainants have retained the mansion-house and its appurtenances, and continue to live therein.

In 1888 the executors had the rest of the property surveyed, laid out in building lots, and cut two courts through from Linden avenue. The property is bounded by Linden avenue on the west, the property late of Lembeek on the east, Ocean avenue on the south, and Garñeld avenue on the north. The property on Ocean avenue was sold for any purpose for which such land might be used, so that stores, flat buildings and other business structures might be there located. The conveyances so far made of the rest of the property contain practically the restriction contained in the Jaelde deed. I say “practical^,” because, from an inspection of certain of the deeds put in evidence, it appears that the cost of the houses to be put upon the property varied, those on Linden avenue to be of a higher cost than those on the courts. But each were restricted, as to the character of the building, as in the Jaelde deed. That restriction, so far as we are concerned with it, is contained in the following language:

“That the said party of the second part Twhich is the defendant, J. Edward Jaekle], his heirs or assigns, shall not at any time hereafter erect, or cause, procure, permit or suffer to be erected, on said premises, or any part thereof ® * * any building that shall be used or occupied as a flat or tenement-house.”

The deed to Jaekle is dated January 9th, 1903. The deed was delivered and the consideration paid at the home of the complainants on the day that the deed was acknowledged, January 14-th, 1903. There were present at that time Dr. Lignot, the complainant; his mother, Mrs. Catherine W. Lignot, the other complainant; a brother of Dr. Lignot, named Paul; C. W. Venner, the master; J. Edward Jaekle, the defendant, and his attorney, I. E. Goldenhorn. The two latter witnesses testify that at that time Mr. Goldenhorn, after the deed had been delivered, in the course of a general conversation, stated that it was the intention of Mr. Jaekle to erect a two-family house upon the property, and that he (Jaekle) and his father intended to live in the same. They testify that Mrs. Lignot responded by saying that she had no objection to them as neighbors. This is the consent which the defendants allege was given at that time to the defendant’s erection of the building subsequently planned and erected.

This conversation is specifically and in ioto denied by the other four parties present.

In February the plans for the structure were exhibited by the defendant to Dr. Lignot, and some negotiations or conversations concerning the matter of erecting that kind of a house upon this property were had between Mr. Hudspeth, the attorney of the Lignots, and Mr. Goldenhorn, the attorney of the defendant.

On the 1st of March, 1906, Mr. Goldenhorn addressed a letter to Mrs. Lignot, in which he states that his client is about to erect a two-family apartment-house upon the lots, and that if the Lignots have any objection they should at once take proceedings to make the same effective, or the defendant will assume that they are willing and consent to the erection of such a house upon the lots. This letter was mailed on Saturday, the 3d day of March, and was presumably received by Mrs. Lignot on Monda3r, the 5th, and was then taken by Dr. Lignot to Mr. Hudspeth, who, on the 10th of March, responds to the same. The reply informs Mr. Goldenhorn that the Lignots do not consent ; that they hold that such a structure violates the covenant, and that, if persisted in, suit for damages, or other proper proceedings, will be taken to protect the interests of the grantors.

Thereafter there were conversations at various times between the attorneys of the parties, the general purpose of each of the attorne3rs being to arrive at some sort of an understanding between the clients so that Jaekle could proceed with the erection without interference by the grantors. It was the general understanding between them that Jaekle should endeavor to get the consents of the other grantees-of the complainants whose properties were adjacent to Jaekle, and that Hudspeth would then endeavor to get the consent of the Lignots, the idea being that if the other grantees acquiesced the Lignots would not feel under pressure or obligation to continue their objection.

Since all the lots on Linden avenue were subject to this same restriction it was assumed by the parties that the other grantees of Linden avenue lots had some rights with respect to the character of the building to be placed on any lot.

The defendant testifies that some time in the early part of July of 1906 he met Dr. Lignot on the street and informed him that he was about to erect the house, and that Dr. Lignot stated he had no objections. Dr. Lignot denies this specifically.

In the latter part of July (probably upon the last day thereof) the defendant broke ground and proceeded with his excavation.

Mr. Hudspeth, shortly after this, left for his summer vacation, leaving his managing clerk in charge of this matter, and at an interview held in the early part of August between Mr. Goldenhorn and the managing clerk of Mr. Hudspeth, it was the understanding that Mr. Jaekle should not erect his house without obtaining the consent of the Lignots, and that he should, in any event, await the return of Mr. Carey, a partner of Mr. Hudspeth, who was to return before the latter.

Upon Mr. Carey’s return further interviews were held along the same lines. On the 24th of August, 1906, Mr. Goldenhorn and the defendant visited Mr. Carey, having with them the plans of the building. They spoke of the consents of the adjacent owners that they had, or assumed that they had, and wanted Mr. Carey to- inspect the plans so as to see that the building would not be a detriment to the neighborhood. Mr. Carey stated that he was not interested in the plans, that his sole interest was to protect his clients, and that he-would like to see the matter amicably arranged for every reason, and that if the defendant would get the consent of the complainants there would be no further difficulty, and he suggested that they go to the complainants and endeavor to obtain their consent.

On the night of that day the defendant and Mr. Goldenhorn went to the residence of the complainants and ascertained that the doctor was not at home, and that Mrs. Lignot was not able to see them, whereupon they delivered their message and plans to a daughter of Mrs. Lignot, who promised to let them hear from her mother in a few days.

At the interview with Carey last mentioned it was the understanding that the parties were to await the return of Mr. Hudspeth if they did not obtain the consent of the grantors. Mr. Hudspeth returned some time after Labor day (September 3d, 1906), and found that the framework of this building was up, and thereupon filed the bill in this suit on the 17th of September, 1906.

I am entirely convinced from all of the testimony that there was no positive, direct agreement, consent or acquiescence on the part of the grantors to permit the grantee to erect the building in question. While there were a great many interviews between the parties in interest, I think it entirely clear, and that the conduct of the defendant demonstrates, that he never secured from the complainants any direct permission, consent or acquiescence to the erection. The impression left upon my mind by the testimony is that the complaintnts did not themselves have any violent or obstinate objection to the erection of the building in question. They feared that if this building, which they deemed a “flat,” was erected, other grantees subject to a similar restriction might erect cheaper houses of the same character, to the detriment of the neighborhood and the injury of the property in the same plot still retained by the complainants. The building that the defendant proposed to erect was to be of good architecture, fine appearing and costly, being much more costly than almost any other house in the neighborhood. I think that the complainants feared also that other grantees whose deeds contained similar restrictions, and who had erected private dwelling-houses there, would come upon them if they were to consent to the erection of the Jaekle building, and that therefore they and their counsel constantly stated to the defendant that they had no objection themselves if the consent of the other grantees could be obtained, but that in default of such consent being obtained, they maintained, in its rigidity, all of their rights, and did object This, I think, explains the apparent contradiction between the parties, and shows that it is not a real contradiction.

The complainants are truthful and correct in their testimony that they did not consent to the erection of this building, did not acquiesce in it, and did always object to it, whereas the defendant is also correct in saying that they stated that they had no objection to it, their objections being not personal, but based upon the failure of the defendant to obtain the consent of the other grantees.

That brings us to the construction of the language of the covenant in relation to the facts.

The language previously quoted is that the grantee is not to erect “a building to be used or occupied as a flat or tenement-house.” The house which the defendant has planned and partially erected is a two-story and attic house, which is to cost about $10,000, with an entrance in front, from which access is obtained both to the first and second floors by separate hallways. Upon the first floor is a complete housekeeping suite, and a similar one upon the second floor.

The exact question to be determined is whether the building in question is one to be used or occupied as a “flat or tenement-house.”

The complainants have not argued that the house in question is a “tenement-house” within the meaning of the restriction. It is, of course, elemental that the word “tenement,” etymologically speaking, would cover airy sort of a house which was of a permanent nature and could be holden, but by the use of the term the parties undoubtedly meant a community-house of a certain kind. I think it clear that those words, as used here, meant a community-house occupied by persons of small means, the distinguishing characteristics of which are the use in common of certain facilities by people crowded into insufficient space and deprived of many of the essentials of privacy, decency and health. This is the meaning given to the phrase in Kitching v. Brown, 180 N. Y. 414. In that case there was a very strong dissent, however, based upon the principle that the court could not, and should not, distinguish between different kinds of tenement or community-houses.

A “flat,” etymologically, is a floor in a building. Later the use of the word became restricted to a floor completely equipped for housekeeping purposes. A building containing such floors, so equipped, each of which is called a “flat,” is itself termed a “flat,” but, more properly speaking, should be termed a “flat-house.”

The question to be decided in this case is, How many such floors must a building have to come within the term of “flat” or “flat-house ?”

It should first be observed that, in my view, the floor completely equipped for housekeeping purposes must be in a building in which there are other floors, because I do not think that a bungalow or ranch building all on one floor has ever properly been termed a “flat,” or the building a “flat-house.” In this country flats or flat-houses have usually been built of many stories, upon each floor of which buildings there has been one or more suites of rooms fitted up for housekeeping purposes. The query is, How many stories, so equipped, must there be to constitute the building a “flat” or “flat-house ?”

In default of any arbitrary definition established either by positive enactment or by decision, I think it must be held that any building consisting of more than one story, in which building there are one or more suites of rooms on each floor equipped for separate housekeeping purposes, is a “flat” or “flat-house.” I do not see how the court can apply any other test that is reasonable. A floor equipped for separate housekeeping is a “flat.” A building containing such “flats” is a “flat-house.” If two such floors do not so constitute it, how many would? There is no answer of which I am aware.

The fact that it has not been customary to erect “flat-houses” of only two stories cannot alter the conclusion.

I do not see upon what one could base a finding that a “flat-house” must consist of more than two stories.

In Skillman v. Smatheurst, 57 N. J. Eq. (12 Dick.) 1 (at p. 5), Chancellor McGill said of a “flat” or “flat-house:” “It is really a community-house, designed for the accommodation of more than an individual and his household.” In that case the building consisted of three stories, upon each floor of which building there were apartments equipped for housekeeping, and the court designated it as a “flat” or “flat-house.”

The defendant contends that this restriction does not limit the character of the building to a private dwelling, and that it does not forbid the erection of what is termed a “two-family house;” 'that is, a house so built that two families may live therein, side by side, separated by a dividing wall, and therefore this house in question, which is built for two families to reside one above the other, is also permitted. This contention seems to me to be without merit. If I am correct in my holding that the house in question is a “flat” or “flat-house,” then it is prohibited by the restriction, and the fact that some other house answering the same purpose could be built without violating the restriction is immaterial and irrelevant. It only serves to show how readily the defendant could accomplish his purpose without violating the covenant.

Nor is the defendant helped by terming this building an “apartment-house,” and claiming that then it is not within the restriction. An “apartment-house” is either a building otherwise termed a “flat” or “flat-house,” or it is a building divided into separate suites of rooms intended for residence, but commonly without facilities for cooking, &c. Kitching v. Brown, supra.

The building in question does not come within the latter pan of the above definition, because each suite in it is to have separate facilities for cooking.

The court in the case just cited finds that the terms “flat-house” or “apartment-house” are used interchangeably, and mean the same thing, the only difference being that when the rent is cheap the building is customarily referred to as a “flat” or “flat-house,” whereas when the rent is higher, the politer term is “apartment” or “apartment-house.” There is no distinction with respect to the nature of the building or its use.

Where the interdicted thing is indicated clearly, as it is in the case at bar, mere nomenclature will not be allowed to prevail in deciding the rights of the parties. The thing intended to be prohibited by this covenant, which was drafted about 1888, was the erection upon this property of community-houses termed “tenement-houses” or “flat-houses.” The fact that the latter character of house as it became more costly has a different name, used interchangeably with its old name, cannot vary or alter the rights of the parties. The only distinction suggested by anyone between an “apartment” and a “flat” is the amount of rent. Highly ornate private dwellings are often -termed “mansions,” but it certainly could not be successfully contended that if land were restricted so that it might not have erected on it a private dwelling one could erect a costly dwelling thereon and, by calling it a “mansion,” prevent the enforcement of the restriction.

Furthermore, I do not find that the amount of rent to be charged for these suites (namely, $35 to $40 per month) brings the same within the definition contended for by the defendant. His sole contention on this head is that what is otherwise a “flat-house” becomes an “apartment-house” when a certain amount of rent is charged. It is admitted that there is no standard with respect to what amount of rent converts a “flat” into an “apartment,” but fairness to the defendant does not require from him an absolute definition, provided there is any reasonable method of ascertaining the limits. Undoubtedly, if the distinction be a true one, there are means and extremes about which there could be no question. A suite renting for $10 a month would then undoubtedly be a “flat,” whereas one renting at $1,000 a month would undoubtedly be an “apartment.” Granting, therefore, for the sake of the argument, that there is this distinction, and that it is a real one, I do not find that $35 to $40 a month rent turns what is otherwise a “fiat” into an “apartment.”

It is the settled law of this state that where a grantor, retaining a portion of the land out of which the grant is made, enters into an express written understanding with his grantee which restricts the enjoyment of the portion of the land • conveyed in order to benefit the portion retained, and the restriction is reasonable and consonant with public policy, such restriction will be enforced in equity against the grantee at the instance of the grantor. Hayes v. Waverly & P. R. Co., 51 N. J. Eq. (6 Dick.) 345 (at p. 348) (Chancellor McGill, 1893); Cornish v. Weiss- man, 56 N. J. Eq. (11 Dick.) 610 (at p. 613) (Vice-Chancellor Emery, 1898); Roberts v. Scull, 58 N. J. Eq. (13 Dick.) 396 (Vice-Chancellor Grey, 1899).

And if the defendants rely upon an allegation that the complainants will not be damaged by the defendant's deliberate disregard of the restriction, they must make it clear beyond the possibility of doubt that the complainants cannot be damaged. Cornish v. Weissman, supra; Morrow v. Hasselman, 69 N. J. Eq. (3 Robb.) 612 (Vice-Chancellor Emery, 1905).

There was no proof in this case by the defendant, and nothing from which he could successfully argue, that the complainants suffered no damage by his disregarding the restriction and building a “flat" upon the lot purchased from the complainants.

The complainants in the case in hand do retain a portion of the land out of which this grant was made. There is an express written covenant which does benefit the portion of the land still retained, and the restriction is reasonable and consonant with public policy. The restriction, therefore, will be enforced at the instance of the grantors against the grantee unless the former have in some way forfeited their right to insist on enforcement in equity.

They undoubtedly maj' forfeit such right by consent.

They may also lose it by abandonment or waiver.

If there is a general scheme embracing a large number of separate lots, and they permit others to violate the restriction, they may be held to have waived or abandoned it so as to lose their right to enforce it against a particular defendant. This latter, however, applies more strongly, if not solely, to cases where the right is equitable and not legal, and is most often applicable in cases where either the grantor seeks to enforce the right against someone other than his grantee, or where some other person than the grantor seeks to enforce the restriction.

Lastly, the right may be lost by laches.

It is contended by the defendant in the case at bar that the complainants consented or acquiesced in the erection of the building in question. I have found as a fact that this is not so.

It is next contended that by abandonment or waiver they have forfeited their right to enforce the restriction against the defendant, because upon the tract of land in question there are two other houses, referred to in the testimony as “Kelsey’s house” and “Thorn’s house,” each of which is occupied by two families. The defendant urges that the existence of these two houses, so equipped, shows an abandonment or waiver by the grantors of their rights. As has been before suggested, such a contention has great weight where someone other than the grantor is seeking to enforce a restriction, but is not so weighty when he is the actor. Gamm v. Renner, 59 N. J. Eq. (14 Dick.) 307 (at p. 309) (Vice-Chancellor Pitney, 1900); reversed, but not on this point, sub nom., Walker v. Renner, 60 N. J. Eq. (15 Dick.) 493.

The basis of the principle is that where the scheme has been departed from by acquiescence or consent it is inequitable to enforce it thereafter. But it seems to me that it is elemental that the departure, if one exists, must have been acquiesced in or permitted, and it has been held that it is not every permitted infraction which will preclude the enforcement. Hemsley v. Marlborough Hotel Co., 62 N. J. Eq. (17 Dick.) 164 (at p. 172) (Vice-Chancellor Reed, 1901); affirmed, 63 N. J. Eq. (18 Dick.) 804.

The proofs show that on one of the courts there were erected two houses which exteriorly indicated private dwellings. One was referred to as “Kelsey’s house,” and the other as-“Thorn’s house,” named from the persons who owned them. There was nothing in the appearance of either house to indicate that it was not a private dwelling-house. There is no evidence to overcome the denial on the part of the complainants that they knew that either of these two houses was fitted up for the use of two families living separately, one above the other. There is testimony that the Thorns informed the complainants that they intended to have two families in their house, but there is nothing to show that they informed the complainants that they intended to have these families dwelling in flats or floors separately fitted up for housekeeping, and this is the gist of the matter. All parties seem to agree that this restriction does not prohibit that which is termed a “two-family house,” a house in which the families live under the same roof, side by side, separated by a dividing wall, or share a dwelling-house in common.

In default, therefore, of proof that there was any knowledge on the part of the complainants, or any implication of knowledge, I find that there was no permitted violation of this covenant, even if the law is that by permitting the violation of the covenant by one grantee the grantor loses the right to enforce it against another grantee.

Whether this is the law or not I do not decide, since it is not necessary.

The defendant’s final insistment is that the complainants have forfeited the right to insist upon enforcement by reason of their laches. Whether this is so or not depends upon the proven facts. The proofs show that the digging of the cellar began on the 31st of July, 1906. Prior to that time, as I have stated in a previous part of this opinion, there had been numerous interviews between the parties or their counsel in which the question discussed was the erection of this building on this tract. The defendant had sought permission from the grantors, and had, as I find, failed to obtain it, and he thereafter continued to seek permission. The grantors had placed the matter in the hands of their counsel, Hudspeth & Carey. Mr. Hudspeth, of that firm, went away on his vacation just about the time that the excavation was begun, and upon his managing clerk’s learning that the excavation had begun an interview was had between the said managing clerk and the attorney of the defendant, Mr. Goldenhorn, at which ah understanding was reached that nothing in the way of superstructure should be proceeded with until the return of Mr. Carey, the partner of Mr. Hudspeth, who was expected home before Mr. Hudspeth. Hpon Carey’s return he was advised by his client that they were proceeding with the superstructure, and he got into communication with Mr. Goldenhorn and the defendant. It was then understood that they would stop any further work upon the building and not proceed until they had obtained the consent of the grantors, the complainants, and in default of obtaining such consent, would not proceed until Mr. Hudspeth returned. They did, however, proceed within a week, and Mr. Carey called Mr. Goldenhorn’s attention to this, and that it was a violation of their understanding, which'Mr. Goldenhorn admitted, and thereupon Mr. Goldenhorn again agreed that they would not go on with the work without obtaining the permission of the grantors, and would, if such permission was not forthcoming, await the return of Mr. Hudspeth. Immediately after this interview the defendant and his attorney visited the Lignots to obtain consent. Work was continued upon the building, and when Mr. Hudspeth returned about the 10th of September the building was enclosed. Whether any work was done on the interior is uncertain. Mr. Hudspeth then caused the bill in this case to be prepared and filed.

I do not see how it can be said that the complainants are in laches. From the inception of the controversy they always maintained that the restriction forbade the erection of the building in question, and that they should insist upon enforcing the restriction. The defendant always sought consent and permission to erect the building, notwithstanding the restriction, and the defendant’s counsel always advised his client that he had the right to erect the building without permission or consent; in other words, that the restriction did not forbid the erection of this kind of building. I think it clear that the defendant acted upon this view of the law.

The complainants, by promptly consulting counsel and taking the counsel’s advice; by informing counsel of every move that was made upon the ground, which they appear to have done, certainly used all the vigilance that they could. Counsel for the complainants was in constant communication with counsel for the defendant, and rigidly insisted upon the rights of the complainants. If the defendant went on erecting the building in the face of this attitude of the complainants, and in spite of the agreements that he would not so go on, it seems to me that he is utterly without any ground for maintaining that the complainants were in laches. He did not erect the building in any doubt as to the complainants’ attitude, or because the complainants did not promptly object, but he did whatever work was done with absolute knowledge that the complainants objected, and I find that he did it despite the agreements with the attorneys of the complainants that he would not do it. He therefore acted at his peril. Kitching v. Brown, supra (at pp. 418, 419).

I do not find, therefore, that the complainants are in laches.

My conclusion is that the complainants are entitled to an injunction to enforce the restriction.

Since, however, the building itself'—that is to say, the exterior thereof-^does not violate the covenant, there is no necessity for any injunction requiring the taking down of the building. The thing prohibited is a building to be used or occupied as a flat, and the injunction, therefore, will prohibit the use of this building in violation of the restriction.


text:
    Moses Mizorowsky v. Rachel Mizorowsky.
    [Decided December 17th, 1906.]
    1. Where a husband, after removing to New Jersey from Russia, wrote to his wife in March, 1901, to get ready to come over, and she replied that she did not then want to come, and requested him to send her money, which he did, and continued to do, such fact was insufficient to establish the wife’s desertion as of the date of her refusal.
    2. Where a petition for divorce for desertion was filed in February, 1904. and the only desertion proved was in June, 3902, and in September, 1903, it was insufficient, being less than two years prior to the commencement of the suit.
    On petition for divorce.

      Mr. Frederick A. Pope, for the petitioner.
   Garrison, V. C.

This is an undefended divorce suit. The petition is filed for an absolute divorce based upon the charge of desertion. The petition charges that the desertion took place in the month of June, 1900, at Odessa, Russia, when tire defendant informed the petitioner that she was tired of him, and went to live with her mother in that city.

The proofs show that the parties were married at Odessa in 1897 and lived together until December, 1900, that they had two children. The petitioner testifies that his wife was dissatisfied with the small earnings which he could make in his trade of silversmith in Bussia and advised his coming to this country; that he landed in this country in January of 1901; that previous to leaving Enssia his relations with his wife had been amicable, and that they were living together up to the time he left; that two days after he landed in New York he came to Jersey City and has since lived there; that he left with his wife the sum of $20; that after he obtained a position here (which he did almost immediately) he sent his wife every month from $15 to $25, and continued to do this until September, 1903. He testifies that in March of 1901 he wrote to her to get ready to come over, and that she replied that she did not then want to come, and requested him to send her some money, which he did, and continued sending her moneys as above stated. He does not produce any copies of any letters written by him, or the letters received by him from her, so that all of this testimony rests upon his uncorroborated word as to the contents of these written communications. He further testifies that in June of 1902 he sent her steamship tickets for herself and children, together with about $70 in money; that she kept the money but returned the tickets; that in September of 1903 his brother, who was coming to America, was commissioned by him to go to Odessa and bring petitioner’s wife with him, and for this purpose petitioner sent his brother $125. The brother went to the wife and endeavored to get her to come, but she refused. There is other evidence that at or about the time of this latter date she also refused to come with another person who also desired to have her come to America.

The petition, as above stated, charges desertion in June of 1900. There is absolutely no proof of this. The master finds a desertion as of March 1st, 1901. There is, in my opinion, no testimony to support this. There is certainly no uncorroborated testimony, and I do not think that the petitioner’s testimony itself can possibly be construed as showing any desertion as of March 1st, 1901.

The only periods when I think desertion has been proven are as of June, 1902, and September, 1903. The first date named is the time when he sent her the steamship tickets, and she returned them, or they were returned. If this was corroborated, that would undoubtedly show a desertion. But it is not corroborated by any testimony and rests upon his statement alone; and even if it be held that the other testimony in the case sufficiently substantiates his testimony with respect to this matter of the tickets, it does not aid the petitioner in this suit because his petition was filed on the 18th of February, 1904, and the statutory period of two years had not therefore elapsed at the time the suit was brought.

For the reason, therefore, that I do not find in this case any proof of willful, continued and obstinate desertion for two years prior to the filing of the petition, I will advise a decree dismissing the petition.