author: Teaming, V. C.

text:
    Ventnor Investment and Realty Company v. Record Development Company et al.
    [Submitted June 19th, 1911.
    Determined July 14th, 1911.]
    1. A second mortgage provided that parts of the premises might be released from the mortgage upon payment to the mortgagee of $50 for every lot so released, and all sums paid for such releases should be applied to the mortgage debt and to another prior mortgage, and further recited that, whereas the prior mortgagee had agreed to release any lots from its mortgage for $40 for each lot released, it was thereby agreed that upon payment of $40 for each lot released from the first mortgage the second mortgagee would release such lots for the sum of $10 a lot. That sum multiplied by the total number of lots covered by the mortgage would amount to less than the second mortgage debt, but the release of less than one-half of the lots at $40 a lot would discharge the first mortgage. The tract had been laid out into streets and lots, and the mortgage was executed to enable the mortgagor to sell the lots for building purposes.—Held, that the agreement for releases contemplated the execution of releases by the second mortgagee for $10 a lot whenever releases for the same lots were executed by the first mortgagee at $40 a lot, and that the second mortgagee would be entitled to $50 for each lot released after the first mortgage was discharged, though the second mortgagee was not required to execute releases unless similar releases were executed at the same time by the first mortgagee.
    2. The covenant for releases was not personal to the mortgagor, but ran with the land for the benefit of a grantee of the mortgagor, even though it was not expressly so stated.
    3. Where a second mortgage contained a covenant to release the mortgaged lots from the lien for the benefit of the mortgagor and his grantees to enable him to sell the mortgaged property for building lots, the right of his grantees to releases for lots sold in good faith before default continues after default and even after foreclosure proceedings are begun; a purchaser from the mortgagor prior to default being entitled to redeem.

      4. First and second mortgagees could, as against third mortgage bondholders, extend the time of payment upon promises that payments would be made from time to time from the proceeds of the sale of third mortgage bonds, as there was no express or implied engagement on the part of the prior mortgagees that the third mortgagee should share in the lien of the prior mortgages in the event of the sale of third mortgage bonds in amounts less than sufficient to discharge the prior mortgages.
    5. As a rule bonds and the mortgage securing them must be considered together, and holders of bonds referring to the mortgage are charged with notice of its contents, and where third mortgage bonds referred to the mortgage, which, in turn, referred to prior mortgages, and also stated that a part of the proceeds of such bonds should be used to pay for releases of the liens of the prior mortgages from lots covered by them, which were to be conveyed to the bondholders, and the prior mortgagees had no knowledge that the third mortgage bonds were designated “first mortgage bonds” or of any misrepresentations by the mortgagor to the third mortgage bondholders as to the status of the bonds, the latter were not entitled to any relief as against the first and second mortgagees because of any misrepresentations by the mortgagor..
    On bill, &C.

      Messrs. Godfrey & Godfrey (Mr. H. Starr Giddings, of counsel), for the complainant.

      Mr. John 8. Wesicott, for the Record Development Company and receiver.

      Messrs. Gaslcill & Gaslcill, for the Camden Safe Deposit and Trust Company.

      Messrs. Bourgeois & Coulomb, for Wade and others.

      Mr. Ulysses G. Styron, for Shaw and others:

      Mr. Terry Parlcer, lor Archibald Parker and others.

      Mr. James M. Sheen, for Birmingham and others.

      Mr. Morris M. Gorson, for Gorson and others.
   Teaming, V. C.

1 am convinced tliat the several cross-complainants, who, as purchasers of lots forming part of the mortgaged premises, seek to avail themselves of the benefit of the covenant touching releases contained in complainant’s mortgage, are entitled to the relief sought b3r them.

In reaching this conclusion, I think it unnecessary to attempt to define any general rule to control cases of this class. As it is clearly within the power of a mortgagor and mortgagee to covenant that releases may be procured by the vendees of the mortgagor and that such releases may be procured by purchasers after default in the payment of the mortgage has occurred, it necessarily follows that the result of every controversy of this nature must be largely dependent upon the special circumstances of the ease.

In the present case, the covenant contained in the mortgage is as follows:

“It is hereby expressly agreed that portions of the above-described premises shall and may be released from the operation of this mortgage upon the payment to said party of the second part the sum of fifty dollars for each and every lot so released; said lots being designated on a certain map or plan of said above-described premises entitled ‘Map of building lots in Ventnor City, N. J., owned by Wheelock Company, by E. D. Rightmire, City Engineer, Ventnor City, N. J.,’ which said map is duly filed in the clerk’s office of said Atlantic county, or intended so to be.
“All sums paid for said releases shall be applied on account of the aforesaid debt of forty-one thousand three hundred dollars, and a certain mortgage owned by Camden, Atlantic and Ventnor Land Company to secure the payment of fifty-eight thousand seven hundred dollars and deducted therefrom.
“Whereas the Camden, Atlantic and Ventnor Land Company holds a mortgage of fifty-eight thousand seven hundred dollars, which is a prior lien to this mortgage, and whereas the holder of said mortgage has agreed to release any lot or lots from the lien of said mortgage at any time for the sum of forty dollars, for each lot so released, it is agreed rhat upon the payment of the sum of forty dollars for each lot released from the lien of said first mortgage that the holder of this mortgage will release such lots for the sum of ten dollars per lot.”

This covenant can be adequately understood only when considered in connection with the circumstances surrounding the transaction at the time the mortgage ivas executed. Ten dollars per lot, when, multiplied by the total number of lots covered by the mortgage, would amount to a sum less than the amount of the mortgage debt. There was, however, a prior mortgage, the holder of which was to receive $40 per lot for releases, and the release money from less than one-half of the lots at $40 per lot would have discharged the first mortgage. It is, therefore, manifest that the covenant contemplates the execution of releases by complainant for $10 per lot, simultaneously with the execution of releases of the same lots by the first mortgagee at $40 per lot, and that when the first mortgage should be discharged complainant would become entitled to $50 per lot for each lot released. The evidence also clearly discloses that complainant’s mortgage was executed in the manner stated for the primary purpose of enabling the mortgagor to make sale of the lots comprising the mortgaged premises. The entire tract was laid out into streets and lots and the mortgagor was to embark upon the enterprise of improving the tract and procuring purchasers for the several lots, and the covenant was manifestly designed to facilitate that work. Lots were accordingly sold by the mortgagor in great numbers and releases were from time to time executed. For such releases from the two mortgages $40 was paid to the first mortgagee and $10 to complainant. The releases executed by complainant were sometimes made to mortgagor and were frequently made to mortgagor’s grantees, and not infrequently to the grantees of the grantees of mortgagor, as will fully appear by the averment of the bill. Under these circumstances, it is impossible to conclude that the covenant was regarded by the parties as a covenant personal to the mortgagor; on the contrary, it seems entirely manifest that the covenant was to facilitate sales and thus benefit the land, and was so intended and regarded by the parties to it. The benefits of such a covenant should be regarded as running with the land and passing with the land to a grantee of the mortgagor, even though in the covenant it is not expressly stated that it is for the benefit of the assigns of the mortgagor. I am not prepared to saj' that when a release covenant can reasonably be said to have been made merely to enable a mortgagor to relieve a portion of the mortgaged premises from the lien of the mortgage by payment of a substantial part of the mortgage debt, and not to facilitate sales, such a covenant may not be regarded as personal to the mortgagor and not for the benefit of grantees of part of the mortgaged premises; but where, as here, it is manifest that the covenant was intended to facilitate the operations of the mortgagor in selling lots to 'the general public, 1 think it clear that the benefits of the covenant should equitably inure to the purchasers of the lots.

It will also be observed that the covenant in question is not limited as to time. 1 think it clear that when a covenant of that nature and for that purpose is not restricted as to time, the right to releases for lots sold in good faith prior to default in reliance by the mortgagor upon the covenant will continue after default or even after foreclosure proceedings are begun. It may well be doubted whether such a covenant could be properly held to eonteinplate sales made after foreclosure proceedings had been instituted, or even after default, but I see no reason why redemption cannot be properly made by a purchaser whose purchase was made prior to default. I think the views here expressed may be said to be in harmony with the decisions which have been brought to my attention. See Vawler v. Craft, 41 Minn. 14; Gammel v. Goode, 103 Iowa 301; Lane v. Allen, 162 Ill. 426; Bartlett Estate Co. v. Fairhaven Land Co., 94 Pac. Rep. 900; Baldwin v. Benedict, 111 Iowa 741; Pierce v. Kneeland, 16 Wis. 706; Squire v. Shepard, 38 N. J. Eq. (11 Stew.) 331; Hall v. Home Building Co., 56 N. J. Eq. (11 Dick.) 304; Avon-by-the-Sea Co. v. Finn, 56 N. J. Eq. (11 Dick.) 805; Americm Net and Twine Co. v. Githens, 57 N. 3. Eq. (12 Dick.) 539; 27 Cyc. 1415, 1416. All of the sales of lots here in question were made prior to the time when the mortgage became due.

As already stated, the covenant of release contemplates that $40 per lot shall be paid to the first mortgagee at the time releases are exacted from complainant. That part of the covenant is of importance to complainant, as it reduces the amount of the prior encumbrance. It necessarily follows that releases cannot be exacted of complainant unless similar releases can at the same time be procured from the first mortgagee by the payment of the amount named.

Cross-complainants, Archibald E. Parker and Edwina A. Parker, as bondholders under a third mortgage, claim relief by reason of alleged false representations and fraud. The claim of these cross-complainants cannot be sustained. The evidence fails to disclose any misrepresentation or fraud upon the part of either the Camden Safe Deposit and Trust Company, third mortgage trustee, or the first or second mortgagees. If any false representations were, in fact, made to these cross-complainants, they were made by agents of the Wheelock Land Company. The first and second mortgagees were in no way responsible for the third mortgage or for the manner in which the bonds which it secured were sold. It was purely within their privilege to extend the time for the payment of their respective mortgages upon the promise that payments would be made to them from time to time from moneys to be received by the sale of the third mortgage bonds. The evidence wholly fails to disclose any improper conduct or purpose on their part. The third mortgage trustee is also free from any imputation of misconduct. That company strictly performed the duties imposed upon it as trustee under the terms of the trust set forth in the mortgage, and the duties there prescribed are duties proper to be performed by a mortgage trustee. The grievance asserted by these cross-complainants arises by reason of their failure to ascertain the terms of the mortgage which secured the bonds by them purchased. The bonds which they purchased specifically referred to the mortgage which secured them, and a reference to that mortgage, as well as a reference to the public records, would have disclosed the existence of the two prior mortgages. In the mortgage which secured the bonds purchased by cross-complainants it was specifically set forth that seventy-five per cent, of the proceeds of each bond sold should be paid to the trustee—that is, $450 for each bond, and from that amount $50 should be used to pay for releases of the liens of the two prior mortgages from lots which were to be conveyed to purchasers of bonds, and the remainder paid to the two prior mortgagees equally from time to time as the fund reached $10,000 in amount. These proceeds from the sale of bonds were, in fact, so applied by the trustee in strict accordance with the requirements of the mortgage, and the mortgage accordingly affords a complete justification to the trustee for the acts so performed. The bonds in question were designated “First Mortgage Gold Bonds,” but a reference to the mortgage to which the bonds refer discloses that the plan was to devote seventy-five per cent, of the proceeds of sales of bond to the discharge of the prior mortgages “until said mortgages are paid in full and the same are canceled and discharged of record, and this mortgage becomes thereby the first lien on said premises.” There is no evidence of a purpose upon the part of the mortgagor or the trustee company to deceive purchasers of bonds by the use of the designation referred to. If misrepresentations were, in fact, made by the agent of mortgagor to the Parkers, as is claimed, a remedy by rescission and restitution is now impossible, for the proceeds have been paid by the trustee to the prior mortgagees, and these mortgagees are in no way responsible for any alleged misrepresentations; it does not even appear that these prior mortgagees knew that the bonds were designated in the manner stated. I am unable to discern any theory on which relief can be extended to the cross-complainants named. The general rule is that bonds, and the mortgage securing them, must be considered together, and- that all holders of bonds which refer to the mortgage which secures them must take notice of the contents of such mortgage. If the claim here were for relief against the mortgagor by reason of misrepresentations touching the bonds sold, I am not prepared to say that the claim would be without merit; although Caylus v. New York, &c., Railway Co., 10 Hun 295; affirmed in 76 N. Y. 609, may be regarded as an authority to the contrary.

The cross-bill of the Camden Safe Deposit and Trust Company, as trustee under the third mortgage, seeks the procurement of releases of lots at the rate of $10 per lot from the lien of complainant’s mortgage by reason of the payment of $5,000 made to complainant pursuant to the terms of the third mortgage already referred to. I think it clear that releases cannot be required by reason of that payment. Under- the provisions of the release covenant complainant cannot be required to release a lot for $10 unless $4-0 are at the same time paid to the first mortgagee for a release of the lot. There was paid to the first mortgagee of this cross-complainant but $5,000. This would, at most, make but $1,250 of the $5,000 paid to complainant applicable to releases. But it is entirely clear that the payment of $5,000 to complainant by tbis cross-complainant was in no sense made for the procurement of releases of specific lots from the lien of complainant’s mortgage. On the contraiy, this payment was made pursuant to the stipulation contained in the third mortgage. That stipulation created a fund known as the “Improvement Account,” to which account $450 were to be paid from the proceeds of sale of each third mortgage bond; from that fund $50 of the $450 were to be devoted to the procurement of releases, and the remaining $400 were to he equally divided between the first and second mortgagees in reduction of their respective mortgages.

I will advise a decree in accordance with the views herein expressed.


source: Caselaw Access Project

author: Leaking, Y. C.

license: Public Domain

text:
    Mary H. Jones v. Empson K. Haines et al.
    [Heard July 12th, 1911.
    Determined July 19th, 1911.]
    1. Where a trustee under a will procured no release from a beueiiciary, and there was no direct or presumptive evidence to justify the conclusion that the acts of the trustee, though in the interest of the beneficiary, were performed by him and accepted by the beneficiar}' in discharge of the trust, the trust must be deemed to have continued, since against an express and subsisting trust the statute of limitations affords no bar.
    2. The termination or satisfaction of a trust may be presumed from lapse of time or gross laches in its enforcement amounting to acquiescence.
    3. Where a beneficiary under a will delayed in demanding from the trustee the payment to her of her share of the estate because of her belief that a larger amount was to be received by her under the will of the trustee, and the trustee’s statements to her son fully justified that belief, such delay will not deprive the beneficiary of relief by suit.

      4. Where a beneficiary entitled to a share of a trust estate neglected for over twenty-eight years to bring suit to enforce payment by the trustee, interest, which if recoverable would be as damages, will not be allowed.
    On bill, &e.

      Messrs. Wilson & Carr, for the complainant.

      Mr. Ernest Watts and Mr. Joseph, H. Gashill, for Carrie L. Haines and others.

      Mr. Horace F. Nixon, for Empson Jv. Haines.
   Leaking, Y. C.

It was clearly the duty of Nathan Haines, at the decease of his •mother in January, 1883, to distribute the estate of Ms father, then in his hands, to his brothers and sisters pursuant to the terms of his father's will. At the foreclosure sale, later in the same year, it was his duty to distribute in like manner the amount realized at that sale upon the second mortgage. Instead of adopting that course he determined upon a plan which he manifestly believed to be of greater service to complainant than the payment to her of her share. It is difficult to contemplate the course adopted by him without being deeply' impressed that what he did was in fact of much greater benefit to complainant than the benefits she would have received had he permitted her home to be sold to strangers and then paid to her in cash the portion of the estate she was entitled to receive. Her share of the estate, exclusive of the mortgage made by her husband, appears to have been about $1,500; her share of the mortgage would have been about $500, making in all, approximately, $&,- 000 as her total share of the estate. The course adopted by Mr. Haines enabled complainant and her husband and their large family of children, ranging in ages from seven to twenty-one years, not only to retain their home but to do so at what was manifestly a small rental, as the annual rent and taxes paid represented but about five per cent, of the price at which the farm was purchased at the foreclosure sale. That the conduct of Mr. Haines was prompted by motives of magnanimity there can be little doubt. But however generous his motives and conduct may have been, the law imposed upon him the duties already referred to which he was not at liberty to disregard without the sanction of his cestui que trust. Had he procured from complainant a release similar to that procured from the other beneficiaries under the will, so that relief to complainant at this time would necessitate an affirmative decree setting aside the executed instrument, Lutjen v. Lutjen, 64 N. J. .Eq. (19 Dick.) 773, might be relied upon as an authority for the denial of relief by reason of laches; but in the absence of such release or evidence, either direct or presumptive, sufficient to justify the conclusion that the acts performed by Mr. Haines in the interest of complainant as his cestui que trust were performed by him and accepted by her in discharge of the trust, the trust must be deemed to have continued. As against an express and subsisting trust the statute of limitations affords no bar.' In Kane v. Bloodgood, 7 Johns. Ch. 90, Chancellor Kent reached the conclusion that where a concurrent legal remedy existed through a statute authorizing a suit at law for a legacy or distributive share, the statute of limitations would be enforced in equity; but that view has been expressly repudiated in this state. Hedges v. Norris, 32 N. J. Eq. (5 Stew.) 192. The termination or satisfaction of a trust may also be presumed from lapse of time or gross laches in its enforcement amounting to acquiescence (Starkey v. Fox, 52 N. J. Eq. (7 Dick.) 758), but such presumptions may be rebutted. In the present ease, satisfactory evidence exists to the effect that complainant’s delay in demanding the payment to her of her share of the estate was by reason of her belief that a larger amount was to be received by her through the will of Mr. Haines, and that Mr. 'Haines’s statements to complainant’s son fully justified that belief upon her part. I am fully convinced that under the law as defined by the decisions of the courts of this state the long expiration of time cannot be deemed operative to deny relief to complainant, and that such favors as complainant has received, including the legacy of $1,000, must be regarded as gratuities.

A different rule exists, however, touching interest on the amount which was clue complainant as her share of the estate of her father. To require the estate of Mr. Haines to pay interest on that amount for the long period of time that has elapsed since the amount was first payable, now over twenty-eight years, would be not only extremely unjust under the circumstances of this case, but contrary to the rule adopted in cases of this nature. If interest should be here recovered, it would necessarily be as damages and not by reason of any contract therefor; in such cases interest will not be allowed where the delay in the payment of the principal is the result of neglect of the claimant to enforce payment for so long a time. Redfield v. Ystalyfera Iron Co., 110 U. S. 174; Sanborn v. U. S., 135 U. S. 271. See, also, 22 Cyc. 1485, and eases there collected.

I am obliged to advise a decree in favor of complainant for her share of the estate of her father which came to the hands of Mr. Haines without interest. As the amount which was distributed to the other heirs is known, and the amount applicable to the payment of the second mortgage at the foreclosure sale is easily ascertained, the ascertainment of the total amount is scarcely more than a matter of calculation. I will, however, make reference to a master for ascertainment of the exact amount if either party desires.


author: Leaminü, V. C.

text:
    James J. Leyden v. Elijah W. Lawrence et al.
    [Submitted September 11th, 1911.
    Decided September 15th, 1911.]
    1. A mortgagee of real estate has an insurable interest therein, and when he insures the property at his own expense and solely for his own benefit, the insurer, if obliged to pay a loss occasioned by injury to the property, may be subrogated pro tanto to the rights of the mortgagee under the mortgage.

      2. Where insurance has been taken by the mortgagee of real estate at the expense and for the benefit of the mortgagor, as well as for his own protection, the mortgagor in case of loss is entitled to have the avails of the policy applied for his benefit toward the discharge of the indebtedness.
    3. Where an insurance clause in a mortgage gave the mortgagee the option to take out insurance at the expense of the mortgagor, but did not compel him to do so, the mortgagee was at liberty to insure at his own expense and solely for his own benefit; and, in the absence of proof that the insurance effected was for the joint benefit of the mortgagor and mortgagee, or at the mortgagor’s expense, except the fact that the insurance, in amount, was in excess of the amount due on the mortgage, it could not be held that the mortgagor was entitled to have the amount of the loss credited on the mortgage, in view of the fact that the insurance expected by the mortgagee was, by its terms, solely upon his interest as mortgagee; and hence the insurer, having paid such loss, was entitled to be subrogated to the rights of the mortgagee.
    On final hearing on bill, &c.

      Messrs. French ■& Richards, for the complainant.

      Mr. Austin E. Swachhamer, for the defendants.
   Leaminü, V. C.

At a former hearing touching tire sufficiency of a plea which had been filed by complainant to the cross-bill of defendant, I held as follows: “It is settled in this state that a mortgagee of real estate has an insurable interest therein, and when such mortgagee, at his own expense and solely in his own behalf, procures insurance on the mortgaged property for the better security of his debt, the insurer, if obliged to pay a loss occasioned by injury to such property, may be subrogated pro ■ tanto to the rights of the mortgagee under the mortgage. Sussex County Mutual Insurance Co. v. Woodruff, 26 N. J. Law (2 Dutch.) 541; Nelson v. Bound Brook Insurance Co., 43 N. J. Eq. (16 Stew.) 256; Lawrence v. Union Insurance Co. (New Jersey Supreme Court), 76 Atl. Rep. 1053. It may be said to be equally well settled that if the insurance has been taken by the mortgagee at the expense and for the benefit of the mortgagor, as well as for his own protection, the mortgagor will have the right, in case of a loss, to have the avails of the policy applied for his benefit toward the discharge of his indebtedness. Pearman v. Gould, 42 N. J. Eq. (15 Stew.) 4." I further held at that time that with the fact established by the mortgagor that the insurance in question had been taken by the mortgagee at the expense and for the benefit of the mortgagor as well as for his own protection, pursuant to the clause in the mortgage which authorized the mortgagee so to do, the mortgagor would be entitled to have the avails of the policy applied for his benefit toward the discharge of his indebtedness. A further examination of the subject at the conclusion of the final hearing on an answer filed to the cross-bill assures me that the above statement of the law, as recognized in this state, is accurate.

At the final hearing no evidence was introduced in behalf of cross-complainant, in support of the averment of the cross-bill to the effect that the insurance in question had been effected by the mortgagee in pursuance of the agreement contained in the mortgage, and no evidence was introduced in behalf of the defendants to the cross-bill upon that subject. There is, therefore, an entire absence of any evidence to establish the fact that the insurance was effected by the mortgagee for the joint benefit of himself and his mortgagor, or at the mortgagor’s expense, except the fact that the insurance was, in amount, in excess of the amount due on the mortgage, and that the mortgage authorized the mortgagee to effect insurance at the expense of the mortgagor in ihe event of the failure of the mortgagor to keep the premises insured. I am entirely satisfied, under this condition of the evidence, that the claim of cross-complainant that the insurance was effected pursuant to the clause in the mortgage cannot be sustained. The clause in the mortgage gave to the mortgagee the option to take out insurance at the expense of the mortgagor, but did not compel him to do so. The mortgagee was at liberty to insure for the joint benefit of himself and his mortgagor at the expense of the mortgagor, or to insure at his own expense solely for his own benefit, and it is impossible to indulge the inference that the mortgagee did insure at the expense or for the benefit of the mortgagor, in view of the fact that the insurance effected by the mortgagee was, by its terins, solely for his “mortgagee interest.”

It was urged in behalf of cross-complainant, however, that as the clause in the mortgage authorized the mortgagee to insure at the expense of the mortgagor, the mortgagee was denied the privilege of insuring in any other manner, and a line of cases decided by the New York court of appeals was cited in support of that view; but I find nothing in the eases cited to support that proposition. On the contrary, in Foster v. Van Reed, 70 N. Y. 19, it is held that such a provision in a mortgage does not prohibit or prevent an insurance by the mortgagee on his interest as mortgagee, at his own expense and in his own behalf.

I entertain the view, therefore, that the failure on the part of the cross-complainant to establish as a fact that the insurance in question was placed by the mortgagee at the expense of the mortgagor, or for the benefit of the mortgagor, or in‘any manner or for any purpose other than that which appears upon the face of the insurance policies, is operative to defeat the relief sought by cross-complainant. It follows that the insurance companies, in whose behalf this suit for the foreclosure of the mortgage is brought, are entitled under the assignment of the mortgage from the mortgagee to enforce the mortgage lien. I reach this conclusion independently of the fact that the policies of insurance contained a clause providing for subrogation in behalf of the insurance companies in case of loss. It is, therefore, unnecessary to here determine whether these provisions for subrogations, which were annexed to the policies some days after the policies were issued, are effective.

I will advise a decree pursuant to the prayer of the bill.


author: Teaming, Y. C.

text:
    Lizzie Smith et al. v. Albert C. Abbott.
    [Submitted September 14th, 1911.
    Decided September 21st, 1911.]
    2 Gen. Stat. 1895 p. 1J$9 § 21, provides that any deed by an administrator with the will annexed, for land sold pursuant to a power or direction in the will vested in the executor, shall be as valid as if it had been executed by the executor named in the will; and such administrator shall have the same powers as to the sale of testator’s land as were vested in the executor. Orphans Court act (P. L. 1898 p. 725 § 29) provides that if any non-resident die possessed of lands within the state, the surrogate of the county shall, upon proof of death, issue letters of administration; and if any executor or administrator of a non-resident neglects for sixty days to apply for letters testamentary, or of administration, the surrogate may issue letters of administration to any person he selects, either with the will annexed or otherwise.-—-Held, that, while a testamentary power of sale given an executor does not cease upon the death or removal of the executor, as at common law, but now passes to an administrator with the will annexed, a power of sale of realty situated in New Jersey, given to foreign executors named in a non-resident’s will, cannot be exercised by an ancillary administrator with the will annexed, appointed by the orphans court of the county in which the realty is situate, where the executors are acting- as such in the jurisdiction of testator’s domicile.
    On bill, &C.

      Mr. Isaac II. Nutter, for the complainants.

      Mr. John J. Crandall, for the defendant.
   Teaming, Y. C.

The bill is filed for the purpose, ostensibly, of procuring the construction of a will. I am unable to find any provision of the will which needs construction. The power of sale given by the will to the executors, to which the bill especially refers, is susceptible of but one meaning, and does not admit of construction; it specifically directs the executors to make sale of the real estate therein referred to. I apprehend, however, that the real purpose of the bill is to have this court determine whether, as a matter of law, a power of sale of real estate situate in New Jersey, which power is given to executors named in the will of a non-resident, can be exercised by an ancillary administrator cum testamento annexo appointed by the orphans court of the county in which the real estate is situate, in a case in which the executors named in the will, or the survivors of them, are acting as such in the jurisdiction of the domicile of the testator. While the answer to this inquiry would seem to belong to the orphans court on application for confirmation of any sale which may be made, I am not entirely clear but that, under the issues as framed, this court should give the matter its consideration pursuant to the prayer of the bill.

Section 24 of the Orphans Court act (P. L. 1898 p. 722) expressly authorizes an executor of the domicile of a non-resident to make sale of land in this state pursuant to a power contained in the will of testator for that purpose, providing the will has been executed in accordance with the laws of this state and an exemplified copy of the will and foreign letters have been duly filed and recorded in this state. Hnder the facts stated in the bill, and admitted in the answer, a power of sale clearly resides in the surviving Pennsylvania executors.

At common law a testamentary power of sale of an executor was treated as a personal trust; with the death, resignation or removal of the executor the power died; an administrator cum testamento annexo could not, in consequence, exercise the power. Den, ex dem. M'Donald, v. King, 1 N. J. Law (Coxe) 432. This has been changed by our statute; the power now passes to an administrator cum testamento annexo, except in certain cases specifically referred to in the statute. 2 Gen. Stat. p. 1429 § 21. But this statute clearly has reference to the survival of the power of sale where the executorship has become vacant and an administrator cum testamento annexo has been appointed as the successor in office of the person or persons named in the will; it does not relate to an ancillary administrator in this state where the executor named in the will of a non-resident is acting as such in the state of the domicile of the testator; this is manifest not only from the language, but also from the general purpose of the act. The only other statute which has been brought to my attention which could possibly confer the power on an ancillary administrator with the will annexed, in a case of the nature already stated, is section 29 of our Orphans Court act, under which section letters cum, testamento annexo may be issued on the estate of a deceased non-resident on the application of a creditor of the testator. An examination of this section will disclose that it nowhere confers upon the administrator cum testamento annexo .so appointed, either expressly or by implication, the power of sale which the will gives to the executors of the foreign jurisdiction. In the absence of a statute conferring the power, the common law rule must be recognized.

I am convinced that under the facts stated in the bill the local administrator cannot exercise the power of sale contained in the will.


author: Beaming, V. C.

text:
    Mount Holly Safe Deposit and Trust Company and John P. Lippincott, administrators with will annexed of Sarah H. Woolston, deceased, v. Benjamin H. Deacon et ux., et al. Annie H. D. Lippincott et vir. v. Benjamin H. Deacon et ux., et al.
    [Submitted September 22d, 1911.
    Decided October 3d, 1911.]
    Testatrix, after making bequests, gave the remainder of her estate to her sister B., and then provided that if B. predeceased her, half of all “moneys” belonging to her estate should be paid to a society, and the other half should be divided among certain persons, who included all who wotild have taken under the intestacy laws.—Held, that the word “moneys” was used in the sense of property, of whatever nature, without which meaning there would be a partial intestacy.
    On bill, &e.
    The will of Sarah H. Woolston, dated September 29th, 1879, provided as follows:
    “Know all men by these presents, that I, Sarah H. Woolston, of the city of Trenton, in the county of Mercer and State of 'New Jersey, missionary to the Chinese at Foochow, China, considering the uncertainty of this mortal life, and being of sound mind and memory, do make and publish this my last will and testament in manner and form following:

      “First. I do hereby constitute and appoint my youngest sister, Beulah Woolston, to be solo executrix of this my last will and testament, providing she is in the United States of America at the time of my decease, but if my said sister, Beulah Woolston, is not in the United States of America at that time, then I do constitute and appoint Wilson Stokes of Medford, in the county of Burlington, and State of New Jersey, to be the executor of this my last will and testament, directing my said executor to pay all my just debts, and the bequests hereinafter named, out of my estate.

      “Second. I give and bequeath to my sister Rebecca Ann H. Deacon, to her and her heirs, the sum of one hundred dollar's.

      “Third. I give and bequeath to my sister Beulah Woolston, the sum of one hundred dollars.

      “Fourth. I give and bequeath to each one of the ten children of my deceased sister Caroline B. Chew, to them and their heirs, the sum of twenty-five dollars. The shares of the younger children to remain in the hands of my executrix or executor until each one comes to the age of twenty-one years when it shall be paid to him with interest from the time of my decease.

      “Fifth. As to all the rest, residue and remainder of my estate, and effects, real and personal, of what kind and nature soever, I give and bequeath the same to my said sister Beulah Woolston to be for her sole use.

      “Sixth. But if my sister, the said Beulah Woolston, should not be my survivor, then I will and direct that cne-half of all moneys belonging to my estate shall be paid to the American Bible Society to be used in printing the Holy Bible in the Chinese language.

      “Seventh. And I will and direct that the other half of all moneys belonging to my estate shall be divided into twelve equal parts, two of these parts shall be given to my sister Rebecca Ann H. Deacon, to her and her heirs, and the other ten parts shall be given to the ten children, to them and their heirs, of my deceased sister- Caroline B. Chew. And I do further will and direct that the shares of such of these children as are minors shall remain in the hands of my executor until each one is twenty-one years of age when it shall be paid to him with interest from the time of my decease. And I do especially direct that my executor shall see that each one of these children receives his and her full part without any diminution whatever.

      “Eighth. In case the father, Ezekiel Cooper Chew, of the ten children of my deceased sister Caroline B. Chew, under any pretences wliatsover, claim any part or portion of the share or shares of any one or more of these children, then I do will and direct that they receive only twenty-five dollars each, and the remainder of these ten shares shall be given to the American Bible Society to be used in printing the Holy Scriptures in the Chinese language.
    “In testimony whereof, I hereunto set my hand and seal, and publish and declare this to be my last will and testament in the presence of the witnesses named below, this twenty-ninth day of September, in the year of our Lord one thousand eight hundred and seventy-nine.
    “Sarah H. Woolston, (Seal).
    “Signed, published and declared by the said Sarah H. Woolston to be her last will and testament in the presence of us who were present at the same time and subscribed our names as witnesses in the presence of the testatrix.
    “William Hall, Trenton, N. J.
    “Eugene Emley, Trenton, N. J.”

      Testatrix died June 11th, 1910. At the date of her death she owned a small amount of real estate and owned personal estate of the value of about twelve thousand dollars. The personal estate consisted of mortgages, bank stock and railway stock, except as to certain household goods in value about three hundred dollars, and cash in hand and in bank in amount $378.03.
    Beulah, the sister of testatrix, died, unmarried, prior to the decease of testatrix; Rebecca, sister of testatrix, died prior to the decease of testatrix, leaving two children. At the date of the decease of testatrix all of the ten children of Caroline B. Chew were alive save one, who died before testatrix, leaving nine children.

      Mr. Samuel A. Atkinson, for Mount Holly Safe Deposit and Trust Company and John P. Lippincott, administrators, &c.

      Mr. Charles Ewan Merritt, for the Farmers’ National Bank of New Jersey, at Mount Holly.

      Mr. Richard B. Eckman, for Benjamin W. Zelley.

      Mr. George M. Hillman, for Annie H. D. Lippincott.

      Mr. William P. Mcurtim,, for the American Bible Society.
   Beaming, V. C.

The controversy in these two suits, which have been heard together, is determined by the ascertainment of the intention of testatrix in the use of the expression “one-half of all moneys belonging to my estate.”

A great number and variety of adjudicated cases are reported in which courts have been called upon to define the meaning of the term “moneys” as used in wills. An extended review of these cases seems unnecessary. It will be found that the word may be appropriately used to mean cash only, it may also be used as the equivalent of personal estate, and it may also be used as the equivalent of property and thus include real and personal property. In the ascertainment of the intention of a testator in the use of a word of this degree of flexibility in its popular meaning, the context of the will is of peculiar force; if it clearly appears from the context that testator used the word in either of the meanings above suggested, that meaning must be adopted.

At the date of the execution of the will here in question, testatrix had a spinster sister named Beulah, who was engaged in missionary work among the Chinese, in which work testatrix had also been engaged for a number of years. Another sister of testatrix, named Rebecca, was then alive and married; another sister, named Caroline, was deceased, and had left ten children. After making bequests to Beulah, Rebecca and each of the ten children of the deceased sister Caroline, testatrix gives the remainder of her estate to her sister Beulah. She then provides that if her sister Beulah should not survive her that “one-half of all moneys belonging to my estate shall be paid to the American Bible Society, to be used in printing the Holy Bible in the Chinese language,” and that

“the other half of all moneys belonging to my estate shall be divided into twelve equal parts, two of these parts shall be given to my sister Rebecca Ann H. Deacon, to her and her heirs, and the other ten parts shall be given to the ten children, to them and their heirs, of my deceased sister Caroline B. Chew.”

It will be observed that if testatrix used the word “moneys” in the restricted sense of cash, she necessarily intended to die intestate as to the remaining part of her estate. The presumption is against such an intent. In Leigh v. Savidge, 14 N. J. Eq. (1 McCart.) 124, 134, it is said: “A will ought not to be so construed as to produce such intestacy. The natural and reasonable presumption is, that when a will is executed the testator designs to dispose of his entire estate, and does not intend to die intestate as to any part of his property.” This presumption against partial intestacy is greatly strengthened in this case by the fact that the persons to whom the “other half” was given included all of the persons who would have taken under the intestacy laws of this state. Under these conditions, it seems reasonably certain that it was not the intention of testatrix, in the event of the death of 'Beulah, prior to the death of testatrix, to leave to the persons named all of such cash as testatrix might possess at her decease, other than that disposed of by the prior provisions of the will, and to die intestate as to the remaining part of her property, and in that manner have the very same persons to whom the cash was given take the remaining portion of her estate under the intestacy laws; such a purpose is so far inconsistent with the purpose which would naturally exist in the mind of one similarly circumstanced that its existence cannot be easily assumed. In this view I think it reasonably certain that the sixth and seventh items of the will were intended by testatrix as a continuation of the fifth item, dealing with the residue of her estate, with the added contingency of the predecease of Beulah, and that the word “moneys,” as used by testatrix, was intended by her as the equivalent of property, and was intended to include all property belonging to her at the date of her decease.

I will advise a decree in accordance with the views herein expressed.


author: Howell, Y. C.

text:
    Dorothea Nagle v. Harry Conard et al. Dorothea Nagle v. Jeppe Sondergaard et al.
    [Submitted January 16th, 1911.
    Decided February 7th, 1911.
    1. Upon a bill for the construction of a will, and directions to trustees —Held, that the testator disposed of the income from his property only, and that as to the corpus thereof he died intestate.

      2. But certain provisions of tlie will prevent the heirs-at-law from taking' immediate possession of the properties, inasmuch as between the present time and the period of the distribution there stands a valid, active trust by virtue of which the executors and trustees have the right, and are in duty bound, to administer the income therefrom until the youngest of the testator’s children shall arrive at the age of twenty-one years.
    3. This trust cannot be disturbed, nor c.an the executors and trustees be deprived of the property until the termination thereof according to the terms of the will, and consequently there can be no partition.
    4. In the foreclosure suit it being necessary that the same will shall be construed in order to determine the rights of the parties because of the contention that inasmuch as the testator at one time held the mortgage in question, and also had title to the fee in remainder, his equitable right merged in the legal right and extinguished the mortgage.-—Held, that the well-settled rule is that merger is not favored in equity, and is never allowed, unless for special reasons and to promote the intentions of the party; and that where the equities are subserved by keeping the mortgage alive and no injury or injustice is thereby wrought, it is not extinguished.
    5. To this rule should be added this qualification, namely, if there is an intervening estate, encumbrance or equity, that of itself would be sufficient to prevent a merger of the mortgage with the equity of redemption, provided the encumbrance be not one which the owner has assumed to pay, or one against which he is estopped from defending.
    6. The testator in the clause of his will bequeathing the mortgage in question, speaking of this particular mortgage says, “as it is not my intention that there shall be any merger of said mortgage by reason - of my holding an estate in remainder in said properties”—Held, that the mortgage in question is a subsisting and valid lien upon the premises in question in the hands of the testator’s widow, the original legatee thereof.
    7. In making the bequest of the mortgage to his wife, the testator had a right to impose on her and upon the gift, such conditions as he chose, provided the same were not in themselves illegal.
    8. By his will the testator directed his executors, of whom his widow (the original legatee of the mortgage) is one, to pay and satisfy the mortgage out of the income of the property. Upon the question whether the widow or her assignee will be permitted to foreclose the mortgage in face of her obligation as executor and legatee to see to it that its principal and interest, shall be satisfied to her out of the net income of the premises—Held, (1) that the instrument of transfer to the complainant operates as a mere assignment of the mortgage, subject to all equities so far as the complainant is concerned,-’and that the testator’s granddaughter (a legatee under another clause of the will) can make no claim under such assignment; and (2) that although the complainant will not be permitted to foreclose the mortgage -against the remainder or the equity of redemption, there is no reason why the foreclosure of it should not be permitted against the life estate of the defendant whose duty it was to pay the mortgage, the bond being. his, and he having joined in the mortgage.

      9. Another reason why the foreclosure of this mortgage, as against the remainder, ought to be held up, is the settled doctrine of courts of equity, that no man shall be-allowed to disappoint a will under which he takes a benefit, or to accept the benefits which a will confers unless he also performs the duties which it imposes.
    10. Upon the question whether the testator’s daughter aud granddaughter (being two of his heirs-at-law and next of kin) can share in the residuary fund of which the testator died intestate, it being claimed that neither of them can so participate for the reason that they are excluded therefrom by particular and specific words of the will itself—. Held, after examination of such words, that for the purposes of the foreclosure suit, both these persons are entitled to participate in the intestate property, as tenants in common, with the other interested parties.
    11. No directions can now be given in the suit for the construction of the will, as to the eventual distribution of the residuary property so undisposed of, in view of the settled rule that this court will not give directions concerning the distribution of a fund until the time for distribution arrives.
    On final hearing on bills, answers, replications and proofs.
    The above cases were heard together and are to be decided upon the same proofs.
    The first bill is filed for the construction of a will and directions to trustees; the second is a foreclosure suit in which it is necessary that the same will shall be construed in order to determine the rights of the parties.
    Peter Nelson died in November, 1908, leaving a will dated April 16th, 1908, which was admitted to probate in Middlesex county. After a devise to his widow of some real estate in Florida and considerable personal property, he made the following provisions concerning his estate in Perth Amboy:

      “Third. I devise to my executors hereinafter named, or to such as may qualify, and to his or their successors in the trust, the properties at present numbered three hundred and five, three hundred and seven, three hundred and nine, three hundred and eleven, and three hundred and thirteen, on State street in the city of Perth Amboy, New Jersey, together with all the fixtures therein, in trust however for the following uses and purposes: To collect the income therefrom and to pay all
    taxes, water rates, insurance and other charges, against the same, including reasonable and just charges for their services, and to keep said property in good repair, and to keep the same rented to good tenants, and out of the income therefrom to pay to my wife Caroline Nelson, the sum of two hundred dollars each and every month during the term of her natural life. They are directed to devote the remainder of the net income from said properties to the payment of the interest and principal of the mortgage standing against the same. Any surplus after the application of the income as above directed shall belong to my wife Caroline Nelson and my children by my said wife Caroline Nelson, and shall be invested by my executors for their use and benefit, and when such children shall all come of age the fund last mentioned, if any, derived from said properties shall be turned over to them in equal parts share and share alike. No property shall be deeded to anyone as long as my wife or one of my children is living.

      “Fourth. I devise to my said executors or to the one who shall qualify and to their or his successors in the trust, the properties at present numbered three hundred and thirty-five, three hundred and thirty-seven, three hundred and thirty-nine, three hundred and forty-one, and three hundred and forty-three, on State street in the city of Perth Amboy, New Jersey, together with all fixtures therein, in trust-however for the following uses and purposes: To collect the incomes therefrom, and pay all taxes, water rates, insurance and other charges against the same, including reasonable and just compensation for their services, and to keep said properties in good repair, and to keep the same rented to good tenants. All rents from this property shall be put out at interest in good securities or in bank, my said -wife Caroline Nelson to receive the interest of the same, semi-annually. When all the children are of age, then this sum, if any, shall be equally divided between my said wife and the children, share and share alike. No deed to be made as long as my wife or one of the children lives.

      “Fifth. I direct that my wife Caroline Nelson, or her administrators or executors, out of the income received from the properties described in paragraph ‘Four’ shall pay to my grand-daughter Elanor Lynch, upon her becoming of age, or upon her marriage before her attaining her majority, the sum of two thousand dollars, or if said Elanor Lynch shall die before she becomes of age or marries, the said sum shall be paid to my children in equal proportions, or to the heirs of their bodies, such heirs taking the portion of their ancestor. If my said wife should die before receiving the full sum of two thousand dollars from the properties described in paragraph ‘Four,’ then this bequest to Elanor Lynch shall be payable out of any other property received by my wife from me, but the sum of two thousand dollars hereby bequeathed to said Elanor Lynch shall be in lieu of all interest to which she may be entitled in my estate by virtue of this will or otherwise, and when any property is herein devised or bequeathed to my children or heirs, or their heirs, the words children and heirs shall not be construed to include said Eianor Lynch, my intention being that said Elanor Lynch shall not receive more than two thousand dollars of my estate under any circumstances.

      “Sixth. I own an estate in remainder in the properties at present numbered three hundred and forty-five and three hundred and forty-seven State street, and numbered at present one hundred and nine, one hundred and eleven, one hundred and thirteen, one hundred and fifteen and one hundred and seventeen Fayette street, in the city of Perth Amboy, New Jersey, and my son-in-law, Jeppe Sondergaard, owns an estate for life therein, and has the revenue therefrom during his life, out of which he is obliged to pay the taxes, water rates, insurance and other charges against said properties, and keep the same in good repair, and also to pay the interest on a mortgage of ten thousand dollars which I hold on said properties, and which is bequeathed to my wife Caroline Nelson in this will. I give and devise my estate in remainder in these properties, with the fixtures therein, to my executors, and their successors or successor, and the survivor or survivors of them in trust for the following uses and purposes: After the death of my said son-in-law Jeppe Sondergaard they shall manage said properties and collect the incomes therefrom, out of which they shall pay all current expenses for taxes, water rates, insurance, repairs, and a fair and reasonable compensation for their services, and the net income derived therefrom they shall apply to the payment of the said mortgage of ten thousand dollars, until the same is extinguished, as it is not my intention that there shall be any merger of said mortgage by reason of my holding an estate in remainder in said properties. After the payment of said mortgage I direct that the net income of said properties be divided into three equal parts, one part to be paid semi-annually to Emilie Sondergaard, the wife of Jeppe Sondergaard, if she survives her husband, the remainder to be put at interest for my children until they become of age, when it shall be turned over to them. If at any time the Fayette street properties have to be renovated or rebuilt, then the interest of said Emilie Sondergaard ends as well in the State street properties as in the Fayette street properties.

      “Seventh. In case of the death of a child by my marriage with my present wife, before reaching the age of twenty-one years, or before marriage, the part of the deceased shall go to the surviving child or children by my second marriage. In case of marriage the part shall go to the surviving spouse, or, if there be children of the marriage, then to them, but in case of the death of all of my children by my present wife before reaching the age of twenty-one years, their mother surviving, the part herein given to them shall go to their mother for and during her natural life, and after her death to such of my children or their heirs as my said wife shall by will direct.

      “Eighth. In case of the death of all my children and their heirs before my decease, then I direct that the properties herein devised to them shall be held in trust by my executors for my sons-in-law Jeppe Sondergaard and Michael Henry Nagle, and the children of my brother Hans Henry Nelson, in equal parts.

      “Ninth. As I have deeded the old homestead to my daughter Dorothea Nagle, and she has had the full revenue or rents of the same for a number of years, I consider she has received all she is entitled to, as I consider her share is equal to the other children.”
    The testator appointed Harry Conard and his widow, Catherine Nelson, to be the executors of the will and gave them full power to dispose of any real estate, the sale of which might be necessary to carry out its provisions.

      On August 3d, 1901, the testator owned the premises in Perth Amboy now covered by the mortgage which is sought to be foreclosed in the second suit. On that day he made a conveyance thereof to his daughter Andrea Sondergaard. Mrs. Sondergaard and her husband, by way of satisfying the consideration money, joined in a bond to Nelson for $10,000, payable in one year with four per cent, interest. To secure this bond they likewise joined in the execution of the mortgage in question. This transaction put the title in Mrs. Sondergaard, subject to the mortgage, and subject also to a prior mortgage for $10,000, concerning which there is no controversy. Mrs. Sondergaard died in 1902, leaving a will by which she gave all her property to her surviving husband, who, on August 26th, 1902, conveyed the mortgaged premises to Nelson, reserving to himself (Sondergaard) “the use and occupation of the said above-described premises for and during the time of the natural life of the said Jeppe Sondergaard.” By the first item of the will this mortgage was bequeathed to Mrs. Nelson, the widow. After the testator’s death, Mrs. Nelson and her co-executor joined in an instrument, in writing, by which the mortgage was assigned to Mrs. Nelson, and a few days later she assigned it to the complainant, who is now attempting to foreclose it. The particular provisions of the will touching said mortgage are found in item 6.

      Mr. Frank J. Higgins and Mr. Merritt Lane, for the complainant.

      Mr. Thomas Brown aM Mr. Freeman Woodbridge, for the defendant Elanor Lynch.

      Mr. Adrian Lyon, for the exéeutors and Caroline Nelson, individually, and her children.
   Howell, Y. C.

It was claimed that the testator made no final disposition of his Perth Amboy real estate, and that if he did the same was void as contravening the rule against perpetuities. I do not find it necessary to discuss the question whether, under the terms of the will, the period of the vesting of the estate is so remote as to violate the rule, for the reason that I deem it very plain from a careful reading of the instrument that he disposed of the income from his property only, and made no final disposition of the corpus.

The third item directs the executors to collect the income from the properties therein described; to make such disbursements as are necessary; and out of the remainder to pay the wife $200 per month; and to devote the remainder of the income to the payment of the interest and principal of the mortgage against the same. The testator then continuing his directions as to the income orders that the surplus thereof shall go to his wife, Catherine, and her two children, and shall be invested by the executors for their use and benefit; and that when these children come of age the fund so accumulated shall go to them in equal shares. It is quite manifest that in that item of the will there is no residuary devise. The fourth item deals with another block of property. It makes due provision for the collection of the rents and for disbursements incident to the ownership of the land, orders an investment of the income so that his wife, Caroline, may receive the interest of the accumulated income semiannually, and finally directs the division of this income accumulation to his wife and children when the children come of age. It is quite as manifest that there is no residuary devise of that property. The sixth item of the will deals with an estate in remainder, his son-in-law, Jeppe Sondergaard, holding the intervening life estate. There is in that ilem also distinct and particular directions about the income and an appropriation of it not only to the expenses of maintaining the property but to the payment of the mortgage which is sought to be foreclosed by the second bill. After all those' payments out of the income the remainder thereof is to be accumulated for his children and to be paid to them when they c-ome of age. Neither does that item contain any residuary devise. It was argued that there was a devise by implication to the testator’s “children” of the residuary estate, but I am not able to find in the will any words which lead to any such result. I therefore come to the conclusion that the testator meant to and did deal only with the income from these three pieces of property, and that as to the corpus thereof he died intestate.

But there are provisions in the will which prevent the heirs-at-law from taking immediate possession of the properties. Between the present time and period of distribution there stands a valid, aclive trust by virtue of which the executors and trustees have the right, and are in duty bound, to administer the income therefrom until the youngest of the testator’s children shall arrive at the age of twenty-one years. This trust cannot be disturbed, nor can the executors and trustees be deprived of the possession of the property until the termination thereof according to the terms of the will, and, consequently, there can be no partition. Smith v. Gaines, 39 N. J. Eq. (12 Stew.) 545; Roarty v. Smith, 53 N. J. Eq. (8 Dick.) 253.

In Simmons v. Hadley, 63 N. J. Law (34 Vr.) 227, trustees under a -will were in the possession of lands; they were sued in •ejectment by one of the heirs-at-law who insisted that some of the purposes of the trust were void within the rule against perpetuities. There were, however, active trusts which were in course of execution, which were undoubtedly good, and it was held that ejectment could not be maintained until the determination of the valid trusts.

It is said that because Peter Nelson at one time held the mortgage and also had title to the fee in remainder, his equitable right merged in the legal right and extinguished the mortgage. It is a thoroughly well-settled rule that merger is not favored in equity and is never allowed unless for special reasons and to promote the intention of the party; and that where the equities are subserved by keeping the mortgage alive, and no injury or injustice is thereby wrought, it is not extinguished. Clos v. Boppe, 23 N. J. Eq. (8 C. E. Gr.) 270; Hoppock v. Ramsey, 28 N. J. Eq. (1 Stew.) 413; Andrus v. Vreeland, 29 N. J. Eq. (2 Stew.) 394; Swayze v. Schuyler, 59 N. J. Eq. (14 Dick.) 75; Harron v. DuBois, 64 N. J. Eq. (19 Dick.) 657. Practically the same rule exists in controversies in the common law courts where merger is favored. Woodhull v. Reid, 1 Harr. 128; Thompson v. Boyd, 21 N. J. Law (1 Zab.) 58; affirmed, 22 N. J. Law (2 Zab.) 543; Duncan v. Smith, 31 N. J. Lato (2 Vr.) 325; Mulford v. Peterson, 35 N. J. Law (6 Vr.) 127; New Jersey Insurance Co. v. Meeker, 40 N. J. Law (11 Vr.) 18. It seems that there should be added to the rule this qualification: If there is an intervening estate, encumbrance or equity, that of itself would be sufficient to prevent a merger of the mortgage with the equity of redemption, provided the encumbrance be not one which the owner has assumed to pay or one against which he is estopped from defending. Jones Mort. § 84-8. This qualification was applied in the case of judgment liens in Denzler v. O’Keefe, 34 N. J. Eq. (7 Stew.) 961. There is, however, in the will evidence that the testator never meant that the estates should merge. Speaking of this particular mortgage he says: “As it is not my intention that there shall be any merger of said mortgage by reason of my holding an estate in remainder in said properties.” Although this declaration was made six years after the conveyance of the equity of redemption to Nelson, it is held that the party in whom the assets legally and equitably are so united is-not required to make his election that there should or should not be a merger immediately. He may wait until some other person is about to acquire an interest, and if he then does any act which clearly shows that he regards the equitable title as still subsisting, this is almost conclusive evidence that he did not intend that there should be a merger. Clift v. White, 12 N.Y. 525; Security Title Co. v. Schlender, 190 Ill. 609; Jones Mort. § 855. I must hold therefore that the mortgage in question is a subsisting and valid lien upon the premises in question in the hands of Caroline Nelson, the original legatee thereof; but in making the bequest of the mortgage to his wife, the testator had a right to impose upon her and upon the gift such conditions as he chose, provided the same were not in themselves illegal. By the will he directs his executors, of whom his widow is one, to pay and satisfy the mortgage money out of the income of the property. The direction is this:

“After the death of my son-in-law, Jeppe Sondergaard, they (the executors) shall manage said properties and collect the income therefrom out of which they shall pay all current expenses for taxes, water rates, insurance, repairs and a fair and reasonable compensation for their services, and the net income derived therefrom they shall apply to the payment of the said mortgage of $10,000 until the same is extinguished."

The question then arises whether Mrs. Nelson (or 'her assignee) will be permitted to foreclose the mortgage in the face of her obligation as executor and legatee to see to it that it, principal and interest, shall be satisfied to her out of the net income of the premises. I pause here to say that the complainant as assignee stands in the shoes of Mrs. Nelson. The instrument of transfer was claimed by the complainant to give her a better position than Mrs. Nelson had and by the defendants to create some equity in favor of Elan or Lynch. 1 find, however, that it operates as a mere assignment of the mortgage, subject to all eeprities so far as the complainant is concerned, and that Elanor Lynch can make no claim under it.

The testator owned the mortgage and he owned the land. In uniting the two estates he could say whether they should merge or not. In separating them ramierged he had a right to say how they should be thereafter treated and Avhat their future relation should be. If he had chosen so to do he might have released the lands in question from the lien of the mortgage, and by his will without other instrument have charged the mortgage debt in suit upon other and different lands. His dominion over the two estates was paramount and predominant. Mrs. Nelson could get only what he gave her. She cannot enlarge her right or abridge the right of other devisees. She takes title to the mortgage debt encumbered by the testator’s peculiar notions as to the manner in which, and the fund from which, the same should be paid to her. And the complainant or transferee takes no other or greater right than Mrs. Nelson had.

While this argument points in the direction of preventing the complainant from foreclosing the mortgage against the remainder or the equity of redemption, I see no reason why foreclosure of it should not be permitted against the life estate of Sondergaard. It was Sondergaarcl’s duty to pay the mortgage; the bond is his; he joined in the mortgage. Primarily, he is the one to pay it. When he created his life estate by the deed of August 26tli, 1902, he assumed the burden, among other things, of paying the interest on the mortgage. He was, therefore, bound at law and in equity to pay both principal and interest of this obligation in the first instance. He certainly cannot evade these payments for the purpose of destroying or otherwise interfering with the remainder. In my opinion, as between the complainant and Sondergaard, the mortgage money was due and payable. By its terms it was due when the life estate was created and Sondergaard has no defence to the suit, nor indeed has he attempted to make any.

In addition to the fact that Mrs. Nelson is an executor of the will, and so stands in a fiduciary relation to all the parties in interest, there is yet another reason why the foreclosure of this mortgage as against the remainder ought to be held up, and that is that it is a settled doctrine of courts of equity and agreed on all sides that no man shall be allowed to disappoint a will under which he takes a benefit, or, as it was put by Vice-Chancellor Grey in Bird v. Hawkins, 58 N. J. Eq. (13 Dick.) 246, “he may not accept the benefits which, a will confers without he also performs the duties which it imposes. This doctrine has been carried to the extent that one who accepted a benefit under a will given upon terms that the beneficiary should convey his own estate to someone else named by the testator, has been obliged so to convey away his own property.” Mrs. Nelson cannot be heard to say that she will take the mortgage bequeathed to her, but will reject the provision for its pajnnent from the income from the mortgaged premises. Her assignee is in the same position. It is clearty her duty to protect the remainder for whom it may concern, and not to give aid or countenance to any proceeding having for its object the destruction of their right.

The next question is whether Elanor Lynch and the complainant Dorothea Nagle can share in the residuary fund of which the testator died intestate. It is claimed that neither of them can so participate for the reason that they are excluded therefrom by particular and specific words of the will itself. As to Elanor Lynch, the testator declares that the demonstrative legacy to her of $2,000

“shall be in lieu oí all interest to which she may be entitled to my estate by virtue of this will or otherwise * * * my intention being that said Elanor Lynch shall not receive more than $2,000 of my estate under any circumstances.”

As to Dorothea Nagle, the words are: “J consider she has received all she is entitled to, as I consider her share is equal to the other children.” Having these words in mind, are they sufficient to exclude these two persons from participation in the residuary fund above mentioned? A recent text-writer on this subject has declared that the courts are nearly unanimous in holding that where the testator does.not by will dispose of the whole of his estate, no negative words of exclusion can prevent the remainder of the property from passing under the statutes of descent and distribution; that it not infrequently happens that the testator by name specifically provides that certain of his relatives shall not receive any part of his estate, and that in such case such a provision is entirely ineffectual as to intestate property. Page Wills § 467. An early case on the subject is Creswell v. Cheslyn (1762), 2 Ed. 124. There the testator by his will gave his residuary personal estate to his three children in equal shares as tenants in common. Subsequently, by a codicil, he declared that C, one of his children, should not be one of his residuary legatees, and he gave to C a pecuniary legacy instead. It was held that as to one-third of his estate he died intestate, and that this share did not go to the other two, but went according to the statute of distributions. Lord Northington, L. C., says that the reason for the decision was that the testator had made no devise over of the share of which he had deprived one of his children, and that therefore the other two could have no greater interest than they had by the original will. He says: “I must therefore declare that the clear residue of the testator’s personal estate, not specifically bequeathed, must be divided into three equal parts.” The decree in this case was affirmed in the house of lords in Cheslyn v. Creswell, 6 Pro. P. C. 1, without an opinion. In Pickering v. Stamford (1797), 3 Ves. Jr. 492, Lord Loughborough declared that neither an heir-at-law, or by parity of reason the next of kin, can be barred by anything but a disposition of the heritable subject or personal estate to some person capable of taking, and that notwithstanding the words of the will he would take what was not disposed of. In Johnson v. Johnson (1841), 4 Beav. 318, Sir Lancelot Shadwell, vice-chancellor, dealt with a will which contained these words: “I direct that my wife, Harriet Johnson, and her child, Harriet (whom I entirely disclaim), shall he cut oil from any part o£ my property and shall not receive any benefit or advantage therefrom.” It was held that these words did not exclude the widow and next of kin from sharing in the intestate property for the reason that there was no devise over of the shares of which the will had deprived them.

In Harris v. Davis (1844), 1 Coll. C. C. 416, Sir J. L. ICnight Bruce, vice-chancellor, had before him a will in which the testator had given personalty to several of his children, including his son Henry; by a codicil he revoked all that part of his will which left a legacy to Henry, but made no devise over of that share. The vice-chancellor held that Henry’s share of the residuary persona] estate lapsed for the benefit of the next of kin, including Henry. In Sykes v. Sykes (1868), L. R. 4 Eq. 200, a testator by a codicil to his will revoked all the provisions in favor of his son Henry, and in lieu thereof placed in the hands of trustees a. large sum .of money upon trust to invest and hold the proceeds for Henry and his wife and children, but made no devise over. The case was heard before the master of the rolls and came before Lord Cairns, L. C., on appeal. He says: “I understand the law with regard to the construction of wills upon this point to be perfectly clear and well settled. If there be a 'devise or a bequest in a will to a number of persons nominalim as tenants in common, and if there be afterwards by codicil a revocation of the devise or bequest made to one of them, the share of the residue, the devise or bequest of which is so revoked, does not again fall into the residue, but becomes undisposed of for the heir-at-law or for the next of kin as the case may be. That was decided, if it had not been decided before, in the case of Cresswell v. Cheslyn, and for upwards of a hundred years it has governed the succession of property in this country.” The same rule was applied in Fitch v. Weber (1848), 6 Hare 145.

In the case of Gallagher v. Crooks, 132 N. Y. 338, the will contained the following clause:

“He (John N. Gallagher) is to have nothing- from my property, and I hereby cut off from inheriting- anything or property of mine his wife (Rebecca) or any person in any way related to her either by blood or by marriage with the exception of himself, and he only in the way I have stated above.”

It was found that the testatbr had died intestate as to some of his property and suit was brought by the widow and children of John N. Gallagher, who had died, to recover a share thereof. Follett, chief judge, says: “The clause in the will above quoted by which the testator attempted to disinherit his brother, his wife and their descendants, does not defeat the light of these plaintiffs to the estate unless the persons to whom the testator attempted to devise the remainder were in existence. In case a testator fails to make a legal devise of his realty, or if having legally devised it, the devise fails for any cause, the heir will inherit, notwithstanding there is an express provision in the will that he shall not take any part of the estate. There must be a legal devise to cut off the right of the heir to inherit. Mere words of disinheritance are insufficient to effect that purpose.” The rule so announced seems to prevail in New Hampshire Wells v. Anderson, 44 Atl. Rep. 103. The two leading English cases above referred to—Cresswell v. Cheslyn and Sykes v. Sykes—were approved of by this court in Burnet v. Burnet (1879), 30 N. J. Eq. (3 Stew.) 595, in an opinion by Vice-Chancellor Van Fleet. In that case a legacy was void for the reason that the legatee was a witness to the execution of the will, and the question was whether that share fell into the residuary estate or whether as to it the will was not entirely inoperative. The vice-chancellor held to the broad principle that the will was inoperative, and that therefore as to that share the testator died intestate.

Finally, our court of errors and appeals, in Graydon v. Graydon, 25 N. J. Eq. (10 C. E. Gr.) 561, decided the point in a case arising under a will which provided that if the testator’s son John should marry a certain person prior to a certain date, then, to use his words,

“my will is and I order that he take no part or share of my estate either of principal or interest, and the provision heretofore made for him is upon condition that he do not marry,” &c. * * * “If he do I hereby declare such provision void and revoked,”

and in case he did so marry then his executors should dispose of his estate as if John were dead, in his lifetime, intestate and without issue. His son violated the provision by contracting the forbidden marriage, and the question was whether his widow and children, he having died, took any portion of the residuary estate. The chancellor held that they did not, but the court of errors and appeals declared that they were entitled to share in the residue upon the principle that the heir-at-law would not be disinherited except upon words free from doubt. No allusion was made to the principle of decision of the English cases, which is not only that the heir will not be disinherited except upon the clearest statement, but also that the failure to make a devise over of the forfeited share is sufficient in itself to show that the testator did not intend to debar the persons whose shares were forfeited from participating in the undisposed of residue. The rule was followed in Canfield v. Canfield, 62 N. J. Eq. (17 Dick.) 578.

No cases are cited in the Qraydon Case as authorities for the conclusion to which the court arrived. It appears, however, from the cases herein above cited that the judgment of Judge Dalrimple, who wrote the opinion, is founded on well-established principles. In accordance with these authorities, I must therefore hold for the purposes of the foreclosure suit that both Mrs. Nagle and Elanor Lynch are entitled to participate in the intestate property, as tenants in common, with the other interested parties. However, no directions can now be given in the suit for the construction of the will as to the eventual distribution of the residuary property so undisposed of. It is a well-settled rule that this court will not give directions concerning the distribution of a fund until the time for distribution arrives. The only directions which can be included in the decree will relate to the disposition of the income, and the interest thereon and the accumulation thereof as directed by the will. Hoagland v. Cooper, 65 N. J. Eq. (20 Dick.) 407. Indeed, the point would not have been considered at this time if it had not been deemed necessary in the foreclosure suit. This view makes it unnecessary to determine presently whether the conveyance to the complainant of the homestead is or is not an advancement under our statute of descents.

The decree in the foreclosure suit may provide for a sale of the life estate of Jeppe Sondergaard, but for reasons herein above stated the sale will not affect the remainder.

Whatever moneys may be raised by a sale of the life estate will be credited upon the mortgage, and eventually it will be satisfied in the manner provided for by the will.


author: Howeld, Y. C.

text:
    Frederick R. Maddock, administrator, &c., v. Progressive Investment Company.
    [Decided June 16th, 1911.]
    A suit for the specific performance of a contract for the sale of real estate by the complainant as the personal representative of a decedent, under a power of sale contained in his will devising such real estate to the residuary devisees, is not maintainable where it appears that all the duties of the personal representatives have been performed, all the debts and legacies have been paid, and there is no trust or other duty devolving on the complainant, and where it appears by the will that the testator has made no equitable conversion of such real estate, and the devisees thereof had the right to elect, and did elect, to take the land instead o£ the proceeds of the sale thereof.
    On final hearing on bill, answer, replication and proofs.

      Mr. Egbert J. Tamblyn, for the complainant.

      Mr. Samuel F. Leber, for the defendant.
   Howeld, Y. C.

This is a bill for the specific performance of a contract for the sale of real estate. The defendant refused to take the title tendered by the complainant for the expressed reason that the complainant as personal representative of the deceased could not make title. The testator died in 1901, leaving a will by which he gave his residuary estate to his grandchildren, Edmund F. Heath and Marjory Heath, and to his nieces, named Heath and Iiaddon. He provided that the shares of the said Edmund F. Heath and Marjory Heath be paid to them when they shall have arrived at the age of twenty-one years. He also created a power of sale in these words:

“I hereby authorize my executrix to sell and dispose of any or all of the property that I die possessed of at such times and upon such terms and in such manner as to her shall seem judicious, and make the necessary conveyances and transfers thereof.”

In 1905 all the residuary devisees attained their majority, and on July 36th, 1906, the persons who are mentioned in the will as the nieces named Heath and Haddon made a conveyance of their interest in the residuary estate including the lands to Edmund F. Heath and Marjory Heath. At the time of that conveyance the said Edmund F. Heath was the personal representative of the testator, appointed as substitute for the widow who was then dead. He has since died, and the complainant is substituted under the statute. On July 6th, 1910, the present personal representative made a contract to sell the lands in question to the defendant. The decision of the case depends upon the question whether the substituted administrator can give title. It appears that all'the duties of the personal representative have been performed, all the debts and legacies have been paid, and there remains nothing for him to do. The title to the lands in question is vested in the residuary legatees. There is no trust or other duty devolving upon the complainant, and it is for this reason that the defendant says that the power of sale contained in the will has been exhausted, and that a title attempted to be made by the complainant would be nugatory.

It is quite apparent from reading the will that the testator made no equitable conversion of the estate in question, and the point is whether the devisees had the right to elect to take the land instead of the proceeds of the sale thereof, and if they had that right whether they have exercised it. In my opinion, they had the right to make such election, and that they have elected in pursuance of such right to take the land. This is evidenced by the deed of July 26th, 1906. All the residuary legatees were parties to this instrument either as grantors or grantees. The grantors must be held to have elected to take the land because they dealt with it as land by making a deed of conveyance of it to the other two legatees; and the other two legatees must be held to have so elected for the reason that they accepted a deed from the grantors, thereby dealing with the subject-matter of the controversy as land; they not only took title to it as land, but paid the consideration money therefor, and the title to all the interests then became vested in them by virtue of a deed of conveyance which treated the property in question as land.

The authority for this is the case of Gest v. Flock, 2 N. J. Eq. (1 Gr. Ch.) 108. I make the following extract from tire opinion in that case: “The giving of the mortgage by Albert was a clear election on his part to take land, and upon no principle can that election be now disturbed. This election it appears was not only made by Albert, but by the whole of the testator’s family, for they all conveyed their shares to the defendant Flock about the same time he purchased. Albert’s share at sheriffs sale. 'If the complainant can defeat the sale of Albert’s share, I see nothing to prevent any other member of the family now from making a similar transfer and thus deprive the defendant of his entire interest in the lands.” See the cases collected by Vice-Chancellor Learning in Doyle v. Blake, 77 N. J. Eq. (7 Buch.) 142; Beideman v. Sparks, 61 N. J. Eq. (16 Dick.) 226.

It will be observed that at the time the residuary estate was convejred to Edmund F. Heath and Marjory Heath the said Edmund F. Heath was the substituted administrator with the will annexed, or, in other words, the personal representative of the testator. This fact gives the argument greater force. He stands as the personal representative, accepting the deed of conveyance which treats the property in question as land, instead of insisting upon an equitable conversion and treating it as personalty. Not only was this a recognition of the real nature of the property in dispute, but an absolute abandonment of any idea that it might be personalty or have any of the incidents of personalty.

Again, if the lands in question are permitted to be sold and conveyed by the complainant, the purchase-money would have to be paid to the present owners of the fee, and it is well settled that a power of sale will not be made effectual in any ease in which the proceeds of the sale would have to be paid to the terre-tenants, if the terre-tenants object.

I must therefore hold that the present complainant not only cannot furnish a marketable title, but can furnish no title at all, and I will advise a decree dismissing the bill.


author: Walker, V. C.

text:
    The Taylor Provision Company v. Andrew H. Edwards.
    [Decided December 17th, 1911.]
    The doctrine that a trader is to be protected from unfair competition is one which fully obtains in this state, and it is upon this principle, and not for the protection of a registered trademark, that a permanent injunction will be issued in this case in favor of the complainant.
    On final hearing on pleadings and proofs.

      Messrs. Vroom, Dicldnson & Scammell, for the complainant.

      Mr. Linton Satterihivait, for the defendant.
   Walker, V. C.

My examination of this case has led me to the conclusion that the complainant is entitled to a permanent injunction against the defendant in the combined form of the preliminary injunctions heretofore issued in this cause, one on the original bill and the other on the supplemental bill.

The following cases are particularly apposite, and, in my judgment, sustain the complainant’s position: American, &c., Watch Co. v. United States Watch Co., 173 Mass. 85; Florence Manufacturing Co. v. J. C. Dowd & Co., 178 Fed. Rep. 73; William Wrigley, Jr., & Co. v. Grove Company (United States Circuit Court, Southern District of New York, April 22d, 1910), 183 Fed. Rep. 99; affirmed, with modification, S. C. (United States Circuit Court of Appeals, Second Circuit), 105 C. C. A. 391.

The doctrine that a trader is to he protected from unfair competition is one which fully obtains in this state, and it is upon this principle and not for the protection of a registered trademark that the injunction will go in this case.

Although the complainant may not have been in the market with its brand labeled “pork roll” for a sufficient length of time, if at all, before the defendant marketed his product as “rolled pork” to entitle it to enjoin the defendant for that reason, nevertheless, the proofs show that the complainant had established a reputation for its “prepared ham” for years before the defendant entered the trade, and, therefore, when the complainant was obliged to change the name of its brand from “prepared ham” to something else, under the Federal Pure Food law, such change was equivalent to putting out a new brand concerning which the trader is entitled to be protected from simulation by another dealer. Florence Manufacturing Co. v. J. C. Dowd & Co., supra (at p. 75).

The complainant is entitled to costs.