author: BERGEN, Vice-Ordinary.

text:
    In the matter of the estate of Charles A. Woolsey, deceased.
    [Filed November 21st, 1904.]
    Testator bad standing to his credit on the books of a corporation a large sum as accumulations of surplus income, which was increased by dividends after his death. By his will he directed the payment of legacies and annuities, which, if paid, would necessitate the use of the fund. The executors used part of the fund to pay the annuities without having fully paid the legacies, the fund used having been made by the will subject to the payment of the annuities if the other income from the estate was not sufficient, which appeared. — lJchl, that the payment of the annuities was not an improper use of the fund which rendered the executors as accountants personally liable therefor, the annuitants and legatees being, with one exception, the same persons.
    On appeal from the orphans eouri of Hudson county.

      Messrs. Garrick & Wortendyke, for Frank Woolsey.

      Messrs. Northrop .<& Griffiths, for James P. Northrop, the appellant.

      Messrs. Grouse é Perkins, for the respondents.
   BERGEN, Vice-Ordinary.

The appeal in this case challenges the correctness of a decree of the orphans court of the county of Hudson, which adjudges the appellants, who are the accountants, personally liable for over $27,000 which it is admitted never came into their hands, and also refuses credit to the accountants for other items, which will he hereinafter particularly mentioned and considered. The record also shows a second appeal from a decree in the same court, requiring the accountants to give a bond in the sum of $30,000 to the ordinary of the state, conditioned for the faithful performance by them of their duties as executors. As both appeals grow out of the same subject-matter, they will he considered and disposed of together.

Charles A. Woolsey died July 4th, 1895, leaving a last will and testament, of which Frank Woolsey, Eobert A. Simpson and James P. Northrop were appointed executors. The will was admitted to probate and the executors named duly qualified and took upon themselves the burden of executing the duties of their office.

The hulk of the testator’s estate was invested in the capital stock of the C. A. Woolsey Paint and Color Company, in a credit to him on the books of the company, and in two life insurance policies. Ho was the holder of nearly the whole of the capital stock of the company, and it was to all intents and purposes his private business, conducted by him under a corporate name. The executor Simpson is dead, and the account is filed by the appellants as surviving executors.

The will directed the payment of two legacies — orre of $5,000 to his sister, Mary B. Newell, who. has filed no exceptions, and another of $10,000 to his daughter-in-law, Victoria M. Woolsey —and then gave the residue of his estate to his executors, to be held upon the following trusts: (1) To set apart $20,000 and

pay the annual income therefrom io his daughter, Alice; (2) out of the income from the remaining portion of his estate, to pay to his daughter, Alice, $1,000; to his daughter-in-law, Mrs. Woolsey7, $2,000 annually; (3) to apply not more than $1,000 a year toward the support and education of his grandson, Herbert. The testator then directed that, with the exception of the funds necessary to pay legacies and create the trust estates provided for, all surplus dividends, and all other moneys left by him at his death in the C. A. Woolsey Company, should remain therein as a surplus fund for the benefit of said business until the division of his estate, and that so far as practicable the amounts to be paid annually to his daughter and daughter-in-law, and for the benefit of his grandson, should be paid out of the income from his estate, other than the income derived from the company, or his accumulations remaining therein, and that only so much should be taken from the company as might be necessary to make up any deficiency, and that all the surplus accruing should remain in the business as working capital, but that any such deficiency should be drawn “from the accumulation of surplus income left by me or my executors in said company.” The testator further directed that during the minority of his grandson the shares of stock owned by him in the paint company should not be disposed of, but held by the trustees as a part of his estate, and then provided that his executors and trustees should not be held responsible for any diminution in his estate by reason of continuing his investment in and holding the Stock of the company as a portion of their trust property and of his estate.

It thus appears that with the exception of the two legacies to the daughter and daughter-in-law the whole of the testator’s estate was placed at the risk of the business venture he had established, for it abundantly appears that the trust of $20,000 in favor of the daughter could not be established as a distinct fund without selling the stock of the company, a proceeding he had forbidden, and in continuing the investment of trust funds in this company the trustees were indemnified against loss.

The questions presented on this appeal grow out of the method of accounting, and, it is charged, negligent conduct on the part of the accountants. Many questions were discussed on the argument outside of the matters appealed from, but in determining this matter I must be bound by the record and limit myself to the alleged errors appealed from.

The accountants having filed their account in the orphans court, showing a balance in their hands of $5,986.85, numerous exceptions were filed, and the orphans court directed an account to be taken by a master, who reported that the accountants should be charged with $27,016.85 more than was shown by the account of the executors to be the balance. The account, as reported, was approved by the orphans court by the decree which is now questioned, for the following reasons’ — first, because it sustained an exception to an item on the discharging side of the account amounting to $507.35. The testimony shows that before the executors were in funds, pressing bills for this amount against the estate were paid by the paint compa^, at the request of the executors, and as soon as any money came to the executors’ hands it was repaid. .The allowance should have been asked for only on showing to whom the different payments making up this amount were made, rather than in the manner adopted, but as it was admitted that this sum represented items of expenditure on behalf of the estate it would be a proper credit, unless some other valid objection is presented.

The master disallows this item, giving as reasons therefor— first, that because the company was then indebted to the estate the executors should not have refunded the money. In adopting this' theory I think the orphans court fell into an error, and I do not agree with, the conclusion reached. To me, the evidence shows that this money was advanced to aid the executors, with the understanding that it should be returned, and that it had no connection with the indebtedness of the company to the testator, for that indebtedness was a fund which, except for certain purposes, the testator did not want disturbed. The second reason given was that the accountants had not charged themselves with having received this money from the company, and therefore they were not entitled to a credit when they repaid it. This reason is without the slightest merit, for if the accountants had charged themselves with receiving the money from the company, and taken a credit when they repaid it, they would stand just where they did when they started, and would have had no. credit for the money paid the creditors. They have charged themselves with all money received by them as executors from decedent’s estate, from which the payment was made. The accountants are entitled to a credit for this item.

The second, third and fourth grounds of appeal all relate to credits asked for and disallowed, and as they are of the same nature will be considered together. In addition to his holdings of the capital stock, the testator had, at the time of his death, standing to his credit on the books of the company, $14,2-1-6.48, which I find were “accumulations of surplus income,” left by the testator in the company. Shortly after the testator’s death two dividends were declared on the capital stock and credited to the same account, amounting to $9,568.07, making the total amount of accumulations and surplus $23,814.55. The executors drew from this fund, to pay the annuities provided for in the will, all but $5,492.26, which last amount stood to the credit of the account of accumulations and surplus, when the company was declared insolvent. Of this, $2,336.52 has been received as dividends from the assets of the company, with the prospect of future dividends, estimated to amount, together with the payment made, to sixty per cent, of the claim. From the fund above mentioned and other property of the estate the trustees have paid on account of the annuities directed to be paid by the will, as follows: To Victoria M. Woolsey, $14.832.82; to- Alice Woolsey, $7,499.72; to the guardian of the grandson, $4,4-50.00, a total of $26,831.54, for which payments allowance was prayed. ■ The orphans court disallowed all these items, and by its decree makes the accountants personally liable for the whole sum. The master justifies this conclusion which was adopted by the orphans court upon the theory that all of the accumulations left by the testator were a part of the corpus of the estate, and that in using it to pay annuities an improper diversion was made, rendering the accountants liable for it. This conclusion is manifestly erroneous. There is not the slightest justification for the result reached, for this particular fund was, by the testator’s will, made subject to these very payments, if the other income from the estate was not sufficient; that it was insufficient clearly appears from the record. It is insisted that a portion of this fund was required to provide for the two legacies, amounting to $15,000. That may be true to a certain extent, but $4,000 has been paid and about $6,000 is in hand. for that purpose, so that, at best, only $5,000 should have been taken from the fund for that purpose, and if that had been done, certainly the residue of this sum, amounting to nearly $21,000, was properly to be applied to the payment of these annuities; and to say, as the orphans court -has said, that these accountants should be liable personally for that large sum paid to the persons entitled to it out of the fund provided by the testator for that purpose, is manifestly incorrect.

. In my judgment, the error of these accountants, if any, is confined to their neglect in not providing for the payment of the legacies at the end of the year after the testator’s death. All of the residue of the estate has been adniinistered according to the will of the testator. If it has been lost through the failure of the company, that was a risk the testator directed them to take, declaring that they should be protected in so doing.

Whether these accountants were negligent in not providing for these legacies can only be settled when that question is raised in the proper court. The orphans court has no jurisdiction; the appropriate remedy is by a bill in equity. Suydam v. Bastedo, 40 N. J. Eq. (13 Stew.) 433; Duncan v. Davison, Executor, 40 N. J. Eq. (13 Stew.) 535. The persons entitled to the legacies are the same, with one exception — that of the grandson — as those to whom the annuities were paid. They have received, in one form or another, all of tire estate for which the accountants are liable, with the possible exception of a balance due on the surplus account lost through the insolvency of the company. If they have had as annuities money that should have been paid to them as legacies, it can be adjusted when the question of how far the executors .have neglected their duty in not providing for the legacies is before the court.

It should also be borne in mind that it is not alleged that these accountants have not charged themselves with all the money that came to their hands. Every dollar is accounted for, and the principal contest is over the question whether they had the right to pay annuities from the surplus fund. In my judgment, they had the right to use this surplus fund toward the payment of these annuities, at least so far as the payment of the legacies would permit.

The account which by the decree of the orphans court is approved is radically defective, and the decree should be reversed.

The accountants also appeal from a decree of the same court which adjudges that the accountants, as executors, be required to give a bond to the ordinary, in the sum of $30,000, for the faithful performance of their duties as executors. As it nowhere appears that the financial condition of these executors, since they were appointed by the testator, has changed, nor that they have not accounted for all the money that has come to their hands, I can find no legal justification for this decree. Even if the orphans court were correct in requiring a bond, the amount at which it has been fixed is excessive and beyond all reason. In my judgment, the commands of the testator have been carried out in every particular the condition of the estate permitted, with the one exception of paying over the legacies of $15,000. Of this, $4,000 has already been paid and the executors have in hand $6,000 to apply toward the satisfaction thereof. What, if anything, remains due on the legacies, can only be ascertained upon an accounting to be had between the executors and the legatees.

The only other matter appealed from is the allowance of counsel fees to the exceptants. The allowance’ was a proper one, under the circumstances, and the decree of the orphans court should be sustained in this particular.

The errors in the decree, set out in the answer of the respondents, and from which they appeal, have been considered, and as to them the decree below will be affirmed.

The decree of the orphans court should be reversed as to the matters set forth in the petition of appeal of the appellants, other than the objection to the allowance of counsel fees, and Í will so advise.


source: Caselaw Access Project

author: Gummere, Chief-Justice.

license: Public Domain

text:
    DeWitt C. Blair, individually and as executor of John I. Blair, deceased, respondent, v. Charles Scribner et al., appellants.
    [Argued March 11th and 14th, 1904.
    Decided March 6th, 1905.]
    J. I. B., by his will, bequeathed to his son, D. (who was also named in the will as sole, executor), a specified number of bonds and shares of stock, in named corporations, in trust, for the benefit of his grandchildren, and then provided as follows: “And it is my further meaning that if I should not leave at my decease all of the bonds or stocks mentioned in my said will, and given to my said son D. in trus.t, he shall not be required to supply said bonds and stocks, but only take such as X may leave.” — Held, that the “further meaning” clause of the will did not operate to change the character of these bequests from general to specific legacies; held further, that the purpose of the testator expressed in the “further meaning” cl'ause of his will was that his executor, instead of supplying the very securities named by him in the trust bequests, in case they were not found in his estate at his death, should take from such other bonds and stocks as he might leave a sufficient quantity to supply the deficiency in value.
    On appeal from a decree advised by Vice-Chancellor Emery, whose opinion is reported in 65 N. J. Eq. (20 Dick.) 498.

      Mr. Richard V. Lmdabury and Mr. John E. Parsons and Mr. John P. Wilson (of the New York bar), for the appellants.

      Mr. George M'. Shipman .and'Mr. John W. Griggs and Mr. William B. Homblower and Mr. James Byrne (of the New York bar), for the respondent. . ...
   The opinion of the court was delivered'by

Gummere, Chief-Justice.

John I. Blair died December 22d, 1899. ITe left a will which bears date March 5th, 1878, and was probated December 28th, 1899. He left surviving him one son, DeWitt Clinton Blair, the respondent, and five grandchildren, Charles Scribner, Arthur IT. Scribner, Emma Scribner Darned, Isabel Scribner Fitzhugh and Clara Blair Mitchell, descendants of his two deceased daughters, Emma Elizabeth Scribner and Amelia A. Mitchell. At the time of making his will, he had one other grandchild, John Blair Scribner, who predeceased him. At the date of the will the estate of Mr. Blair, taking his securities at par, amounted to $8,155,801.52; his debts amounted to $254,603.06. In the first twenty paragraphs of his will the testator gave sundry legacies to sixteen, different persons and institutions, most of them in trust, amounting in all to $305,000, and in addition an annuity to his widow. ITe then proceeded to establish six different trusts for the benefit of his grandchildren and their descendants, amounting in the aggregate to $2,952,000. The balance of his estate he gave to his son, the respondent, whom he also created sole executor of his will. The several trust funds were practically equal in amount, allowing for the deduction of certain advancements made to some of the grandchildren; the words used by the testator in creating them were in each case almost identical, and a recital of the provisions of one is, therefore, sufficient to show their form. The John Blair Scribner trust, which comes first in the will, may be taken as an example. It is in the following words:

“I give and bequeath unto my son, DeWitt Clinton Blair, twenty-five thousand dollars in the bonds of the Sioux City and Pacific Railroad Company, seven thousand dollars in the bonds of the Green Bay and Lake Pepin second mortgage bonds, one thousand dollars in the bonds of the West Point Precinct Company, five thousand dollars in the bonds of the Fremont, Elkhorn & Missouri Valley' Railroad Company second mortgage bonds, fifteen thousand dollars in the bonds of the Fremont, Elkhorn & Missouri Railroad Company first mortgage bonds, one thousand dollars in the bonds of the Burlington, Cedar Rapids & Northern Railroad Company, one thousand dollars in the bonds of the Maple River Railroad Company, one thousand dollars in the bonds of the Minneapolis and St. Louis Railroad Company. I also give & bequeath unto my said son, DeWitt C. Blair, fifty shares of the capital stock of the Chicago, Iowa and Nebraska Railroad Company, one thousand shares of the capital stock of the Cedar Rapids & Missouri River Railroad Company, fifty shares of the preferred capital stock of the Cedar Rapids and Missouri River Railroad Company, one thousand shares of the capital stock of the Iowa Railroad Land Company, two hundred and fifty shares of the Iowa Falls & Sioux City Railroad Company, one hundred & sixty shares of the capital stock of the Delaware, Lackawanna & Western Railroad Company, forty shares of the capital stóck of the Warren Railroad Company, forty shares of the capital stock of the Sussex Railroad Company, two hundred shares of the capital stock of the Lackawanna Iron & Coal Company, two hundred shares of the capital stock of the Blairstown Lot & Land Company, sixty shares of the Sioux City & Iowa Falls Town Lot and Land Company’s capital stock, two hundred shares of the capital stock of the Sioux City & Pacific Railroad Company, twenty shares of the preferred capital stock of the Sioux City & Pacific Railroad Company, thirty shares of the capital stock of the Moingona Coal Company, fifty shares of the capital stock of ‘The Silver Peak Mines Co.,’ one hundred shares of the capital stock of the Belvidere National Bank, twenty shares of the capital stock of the First National Bank of Cedar Rapids, forty shares of the capital stock of the Missouri Valley Land Company, seventy shares of the capital stock of the Houston and Texas Central Railroad Company, one hundred & thirty shares of the capital stock of the Fremont, Elkhorn & Missouri Valley Railroad Company, one hundred shares of the Green Bay & Lake Pepin Railroad Company’s capital stock, twenty shares of the capital stock of the Burlington, Cedar Rapids & Northern Railway Company. Fifty shares of the capital stock of the Maple River Railroad Company, one hundred shares of the capital stock of the Blairstown Railway Company, & ten shares of the capital stock of the People’s Street Railway Company of Luzerne county (Pa.), the said bonds to be taken at their face value; m trust, nevertheless, that he will hold the said bonds & stocks, or such other as he may take in place thereof, & pay the interest arising therefrom, in semi-annual payments to my grandson, the said .1. Blair Scribner, during the period of his natural life, and after his death to pay the income or interest arising therefrom to his children, until the youngest child shall arrive at the age of twenty-one years, and then to divide the said bonds & stocks, or any substituted in the place thereof, or the moneys arising from the sale thereof, in equal proportions & values between the children of the said J. Blair Scribner, or their legal representatives, and if the said J. Blair Scribner shall die without issue him surviving, or any legal representative or representatives of such issue, then I order & direct my said trustee to divide the said bonds & stocks, or the substituted securities therefor, or the moneys arising from the sale thereof, between the brothers & sisters of the said J. Blair Scribner, in equal proportions, and in case any brother or sister of the said J. Blair Scribner should be dead at that time, then to give such deceased brother’s or sister’s share to his children or legal representatives, but if such brother or sister should leave no child or children him or her surviving, then to divide it equally among such brothers & sisters of the said J. Blair Scribner as may be then living.”

After creating these trusts and providing for the ultimate distribution of the funds thereby bequeathed, the testator then added this clause to Ms will:

“And it is my further meaning that if I should not leave at my decease all of the bonds or stocks mentioned in my said will and given to my said son DeWitt Clinton Blair in trust, he shall not be required to supply said bonds and stocks, but only take such as I may leave.”

At the time of making his will the testator was possessed of all of the bonds and stocks mentioned in the trust provisions of the instrument and in quantities much greater than therein designated. At his death, however, there remained in the estate only about $425,000 of these securities at their par value. Of the remainder some had been sold by the testator, some had been exchanged by Mm for other securities, and still others (bonds) had matured and were paid. Upon discovering these facts, DeWitt Clinton Blair, the respondent, individually and as executor, filed his bill in this cause to obtain a construction of the testator’s will in order to have it judicially determined whether, as executor, he should deliver to himself, as trustee, under the trusts created for the benefit of the testator’s grandchildren, only such of the stocks and bonds mentioned in the trust provisions as the testator left at his death, or whether he should deliver to himself, as trustee, other securities or moneys in addition thereto, and if the latter, to what extent.

The learned vice-chancellor before whom the case was heard expressed the opinion that if those clauses of the will which created the several trusts were alone to be considered, the legacies given thereb3r must be held to be general. (He considered them, so far as the gifts of bonds were concerned, to be demonstrative — • that is, legacies primarily payable from designated securities pointed out by the testator and part of his estate, but payable in any event, even though the designated source should fail.) But he found in the language of the "further meaning” clause of the will, read in the light of the fact that at the time of the execution of that instrument the testator had in his possession stocks and bonds of the various kinds, specified in the several trust clauses, in quantities greater than therein mentioned, what seemed to him satisfactory evidence that the testator intended these legacies to be specific and not general or demonstrative. He therefore held that the trustee was entitled to receive, for the purposes of the several trusts, only such of the bonds and stocks mentioned in the trust clauses of the will as remained in the testator’s estate at his death, and that the rule of ademption applied to such of the bonds and stocks as had been disposed of by the testator in his lifetime.

We concur in the opinion expressed by the learned vice-chancellor that, according to well-settled rules of construction, the legacies given for the benefit of the grandchildren must be held to be general and not specific if the trust clauses of the will alone are considered. The authorities cited by him in support of this view are convincing of its soundness. But the fact that the testator had in his possession at the time of making his will stocks and bonds of the various kinds mentioned in these trust clauses, and in excess of the amounts named therein, does not seem to us, either taken alone or in conjunction with the other parts of the will, to throw any light upon the character of these legacies. The authorities cited in the opinion of the learned vice-chancellor, and just referred to, show that it is only in cases where the testator has property of the kind mentioned in the legacy that the question ever arises whether the legacy is general or specific; and in those cases it is held that, notwithstanding such possession, a bequest in the form used in the present case creates a general -and not a specific legacy.

Does the “further meaning” clause of the will operate to change the character of these legacies from general to specific ? It is to be borne in mind that the testator, by these legacies, was providing for his own flesh and blood — for those whose claim upon his bounty was second only to that of his son. His expressed purpose was to benefit them to the extent disclosed by the provision of the trust clauses, and that purpose must prevail unless the testator has shown by clear language his intention to make its taking effect turn upon the contingency of his property remaining unchanged until his death. The true construction of the “further meaning” clause is, concodedly, doubtful; and this fact alone goes far to defeat the claim that by it the testator intended to revoke the gifts made for the benefit of his grandchildren in the event of his subsequently converting the stocks and bonds mentioned in the trust provisions of his will, for it is a primary rule in the construction of wills that a clear intention on the part of the testator must appear in order to make a legacy specific. In ascertaining the true meaning of this clause, it is to be remembered that the testator’s son, DeWitt Clinton Blair, occupies the position both of sole executor and of trustee for the several grandchildren. The clause does not expressly state whether the instructions contained in it are given to him in the one capacity or the other, but the character of those instructions makes it clear that they are given to him as executor. The trust clauses of the will had created general legacies. Being general legacies, it would have been the duty of the executor, if the stocks and bonds mentioned in the bequests to the trustee were not found in the estate of the testator at his death, to go into the market and purchase sufficient of the different kinds to make up the deficiency and turn them over to the trustee. The “further meaning” clause absolves the executor from this duty by providing that “lie shall not be required to supply said bonds and stocks.” It then imposes upon him, as executor, a substituted duty, namely, that he shall “only take such as I may leave.” That this last-recited clause is an instruction to the executor is apparent from the fact that this clause, and the one which precedes it, have but a single nominative. Did the testator, by this last provision, mean that his executor should, in distributing his estate, turn over to the trustee, in satisfaction of the trust legacies, only such of the bonds and stocks specifically mentioned in those provisions of the will by which the trusts were created as remained in his estate at his death, or did he mean that his executor should take from such other bonds and stocks as he should-leave a sufficient quantity to fill up these bequests in case of a deficiency? In determining this question, the use of the word “further” is significant. Its purport is to amplify, to add to, not to negative, what has preceded it. The testator had already plainly expressed Iris meaning that these legacies should be general, not specific > in other words, that they should not be adeemed by his failure to leave the designated stocks and bonds at his decease. lie then proceeded to show, not that he had a different meaning; not that he had, after making these bequests, changed his mind with regard to their character, but that he had a “further,” an additional, intention with regard to them, and that was that his executor, instead of pursuing the usual course of supplying the securities named by him in the trust bequests,- in case they were not found in his estate at his death, should take such other bonds and stocks as he might leave in order to supply the deficiency. In other words, that he preferred the particular method which he specified rather than that which the law, in the absence of such specification, would provide, for preventing a partial failure of these legacies.

The learned vice-chancellor expressed the opinion that even if, by the true construction of the “further meaning” clause, the executor was required to fill up any deficiency in the trust bequest from other bonds and stocks of the testator, the bequests, as to the stock, must fail for uncertainty, because no value was fixed by the testator’s will upon the stocks bequeathed, and no reference was made therein as to the sums intended to be bequeathed in stocks. This conclusion does not seem to us to be sound. What the testator did was to provide his own method of supplying deficiencies in the place of the method which the law would otherwise have provided. The method provided by law would have exactly made up the deficiency by requiring the executor to supply the identical stock. The testator provided for making it up by requiring the executor to supply other stock; not necessarily stock of an equal value per share, but stock of a value, in the aggregate, sufficient, nevertheless, to make up the deficiency; either a greater number of shares of less valuable stock or an equal number of shares of equally, valuable stock, or a less number'of shares of more valuable stock; but in either event shares of stock the total value of which should equal that of the shares for which they were substituted. The duty of taking from the stocks and bonds left by the testator a sufficient amount to make up deficiencies is charged by the will upon the executor. Upon him, primarily, therefore, rests the duty of making the selection, and it is to be presumed that he will perform that duty fairly, with a due regard to the rights of the cestuis que trust. Any failure on his part in this regard would entitle the cestuis que trust to the interference of a court of equity.

The conclusion reached by us as to the true construction of the trust clauses of the will leads to a reversal of the decree.

For affirmance — None.

For reversal — The Chief-Justice, Dixon, Garrison, Fort, Pitney, Swayze, Bogert, Yredenburgi-i, Yroom, Green, Gray — 11.


text:
    DeWitt C. Blair, executor, &c., appellant, v. Charles Scribner, respondent.
    [Argued March 14th, 1904.
    Decided March 23d, 1905.]
    Testator, by his will, bequeathed to his grandson $50,000, and directed the legacy to be paid within a year after his death, “unless I shall advance him that sum during my lifetime and take his notes therefor, in which case I direct my executor to deliver over to him any notes or obligations I may hold against him to that amount.” Subsequent to the making of the will testator advanced to his grandson, from time to time, sums of money aggregating much more than the amount of the legacy, and took his notes for the various advances. A certain part of the moneys advanced was afterwards repaid by the grandson, and the testator-then delivered up to him all of his notes in satisfaction or surrender of the obligations which they evidenced. — Held, that by the terms of the bequest the right of the grandson to be paid the legacy was made to depend, not upon the subsequent making of loans to him by the testator and the taking of his notes therefor, but upon the existence of the debt at the testator’s death evidenced by the fact that the notes still remained in his possession.
    On cross appeal taken by DeWitt C. Blair, executor, from decree advised by Vice-Chancellor Emery.

      Mr. George M. Shipman and Mr. John W. Griggs and Mr. William B. Hornblower and Mr! James Byrne (of the New York bar), for the appellant.

      Mr. Richard V. Lindabury and Mr. John E. Parsons and Mr. John P. Wilson (of the New York bar), for the respondent.
   The opinion of the court was delivered by

Gummere, Chief-Justice.

This appeal presents for decision the true' construction of the following legacy contained in the will of John I. Blair, deceased:

“I give and bequeath to my grandson, Charles Scribner, fifty thousand dollars, to be paid to him by my executor within - year after my death, unless X shall advance him that sum during my lifetime and take his notes therefor, in which case I direct my executor to deliver over to him any notes or obligations I may hold against him to that amount.”

By the'agreed state of facts submitted on the hearing in the court of chancery it appears that within three years after the making of his will Mr. Blair advanced to Charles Scribner, at different times and in different amounts, moneys aggregating $158,616, and took his notes therefor; that about a year after the making of the will Mr. Scribner, in discharge of an obligation due from him to the estate of one J. Blair Scribner, another grandson of the testator, took up a note of J. Blair Scribner’s for $150,000, held by Mr. Blair, and gave to the latter his own note in its place; that from the time of giving tírese several notes down to June, 1892, Mr. Charles Scribner paid interest on them to Mr. Blair, and that on the latter date he paid to Mr. Blair the sum'of $149,524 ($145,000 in notes of one Arthur Scribner and $4,524 in cash), and that Mr. Blair then delivered up to him all of his notes, in satisfaction or surrender of the obligation which they evidenced.

On these facts the conclusion reached by the court below was that Charles Scribner was entitled to receive from the executor, out of the assets of the testator’s estate, the sum of $50,000, notwithstanding that the testator had advanced to him that amount during his (testator’s) lifetime, and had taken his notes therefor, because, as the court concluded, the moneys so advanced were repaid by Charles Scribner during the lifetime of the testator, and the notes were thereupon surrendered.

It is contended, on behalf of the executor, that this conclusion is unwarranted; that Charles Scribner, by receiving a loan from the testator equal in amount to the sum named in tire legacy, and giving to him notes therefor, lost his claim to the $50,000 in cash thereby bequeathed, and was entitled to nothing except the surrender of the notes; and that their delivery to him by the testator, in the latter’s lifetime, was a satisfaction of the legacy.

An analysis of the clause of limitation contained in the bequest under consideration discloses that the testator, at the time of making .this provision for the benefit of the grandson, had it in mind that he might be applied to later by his beneficiary for advances of money, and that if he should comply with such requests the advances might be made by him either as gifts or as loans. The words “advance him that sum during my lifetime and take his notes therefor’’ show this. The clause of limitation further discloses that the testator also had it in mind that if he made advances to his beneficiary by way of loan, and took his notes therefor, the loans might be paid during his (testator’s) lifetime; and, on the other hand, that they might remain unpaid at his death, and the notes be found among his assets by his executor. This is to be gathered from the instruction to the executor to deliver to the beneficiary the notes which the testator might hold against him at his death. And, not only does the clause of limitation disclose that the testator had these matters in mind at the time of making this provision, but also that he' then determined what effect his later action in making advances to his grandson (if he should do so) should have upon the legacy bequeathed to him. His direction to his executor to pay the amount, of the legacy, even though he should afterward advance an equal amount to his grandson, unless he should take the latter’s notes therefor, shows an intention that the legacy should not be deemed to be satisfied by an out and out gift of that sum to the grandson. So, too, his instruction that his executor should deliver over to his grandson any notes of the latter which he might hold at his death (up to the amount of the legacy) shows an intention that advances made by way of loans should satisfy the legacy if the indebtedness should remain unpaid and outstanding at the time of his death. This latter instruction further shows that the testator intended that the legacy should not be deemed to be satisfied by advances -made by him, to the amount named, as temporary loans, which should afterward be repaid to him by his grandson, even though the loans should be evidenced by the notes of the borrower, for such notes would be surrendered by him when the indebtedness was paid, and could not be held by him at his death.

The clause of limitation, in our judgment, also discloses the effect which the testator intended such a transaction as that which is set out in the agreed state of facts should have upon the legacy. That transaction, as it appears to us, was a series of advances made by the testator to his grandson by way of loan, the giving of notes by the latter as evidences of his indebtedness, the payment of a part of the iixdebtedness by him and the cancellation of the unpaid portion thereof by the testator. Although it cannot be gathered from the language of the will that the testator, when he made this bequest, contemplated just such a transaction as this between his grandson and himself, yet he plainly iixtended, as has already beeix poiixted out, to reserve to himself the right to give to his grandson, during his lifetime, such sums of money as he might see fit without impairing the right of the grandson to the legacy at his death. The final clause of the provision indicates that he intended that the method of malting such gifts should be entirely within his own control; that he should be free either to make a present gift or a loan, which, at his option, he might afterward turn into a gift, if he should desire. He therefore made the test of the right of the legatee to the moneys bequeathed to him, ixot the making of a loan to him by the testator and the taking of notes therefor, but the existence of the debt at the testator’s death, evidenced by the fact that the notes still remained in his possession.

The portion of the decree appealed from by the executor should be affirmed.

For affirmance — -The Chief-Justice, Garrison, Fort, Pitney, Bogert, Vredenburgh, Vroom — 7.

For reversal — Dixon, Swíyze, Green- — 3.


text:
    The State Mutual Building and Loan Association, respondent, v. James G. Batterson and William G. Chittick, Jr., appellants.
    [Submitted March 22d, 1904.
    Decided November 14th, 1904.]
    A building and loan association made a loan of $18,000 to B., one of its stockholders, and took from him as security his bond, conditioned for the payment of the sum loaned, “together with interest thereon at the rate of six per cent, per annum, and such premiums, fines and charges as shall accrue thereon,” and also a mortgage, the purpose of which, according to the recital contained therein, was “the better securing the payment of said sum, with interest thereon.” — Held, that on a foreclosure of the mortgage the amount to be made on the foreclosure sale should be limited to the principal and interest of the loan, and that the association must look to the personal obligation of B. for the payment of such premiums, fines and charges as had accrued upon the loan.
    On appeal from a decree advised by Vice-Chancellor Grey, whose opinion is reported in 65 N. J. Eq. (20 Dick.) 610.

      Mr. Francis ScoU, for the appellants.

      Mr. F. Ambler Armstrong, for the respondent.
   The opinion of the court was delivered by

Gummere, Chief-Justice.

The appeal in this case is from a decree of foreclosure upon a mortgage given by the appellants, Batterson and Chittick, to the respondent. The grounds of appeal, as set forth in the appellants’ petition, are that the mortgage is a nullity because the appellant Batterson had no title to or interest in the mortgaged premises at the time of the execution of the instrument; that it was void on the further ground that neither of the appellants was a member of the respondent association at the time of the making of the loan to secure the payment of which the mortgage was given, and the act of the association in loaning the money was therefore ultra viresj that uo loan was, in fact, made to them by the association; and that the amount found to be due by the decree was excessive.

Our examination of the testimony in the cause satisfies us that the appeal is frivolous, except to the extent that it is directed at the amount decreed to be due upon the mortgage; i o that extent it is meritorious.

The situation disclosed by the proofs is this: The appellants desired to obtain from the respondent a loan of $18,000. To accomplish this it was necessary that one of them should become a member of the association, and so Batterson subscribed for one hundred and eighty shares of its stock. The association thereupon loaned them the $18,000, taking as security for its repayment the bond of Batterson, in the penal sum of '$36,000, conditioned for the pa}anent of the sum loaned, “together with interest thereon at the rate of six per centum per annum, and such premiums, fines and charges as shall accrue thereon,” and also the mortgage in suit. This- latter instrument, after setting out the giving of the bond and its condition, recites that it (the mortgage) is given “for the better securing the payment of the aforesaid debt or principal sum of $18,000, with interest as aforesaid, unto the said party of the second part.”

The amount found to be due by the final decree was $25,200.12 made up as follows:

Principal ................................. $18,000 00

Interest................................... 3,369 00

Premiums................................. 3,369 00

Dues ..................................... 3,420 00

Pines..................................... 1,015 80

$29,173 80

Less credits—

Dues paid .......................$3,718 00

Profits............................ 193 68

'--- 3,973 6S

$25,200 12

The inclusion of premiums, clues and fines in the decree was clearly erroneous. Although, by the terms of the bond, Batter-son obligated himself to pay these items, so far as they were legally charged against him the premises embraced in the mortgage were pledged only to secure the payment of the principal and interest of the loan, leaving the association to look to the personal obligation of Batterson, its stockholder, for the payment of the other items. The sum which the respondent was entitled to have raised by a sale of the mortgaged premises was limited to the amounts for the payment of which they were pledged, namely, $18,000 of principal and $3,369 of interest.

This being the situation, the question argued by counsel of the legality of the charges for premiums and fines is one which the case does not present. That question can properly be raised only by suit upon the bond.

The decree appealed from must be reversed.

For affirmance — None.

For reversal — The Chief-Justice, Dixon, Garrison, Fort, Pitney, Swayze, Bogert, Vredenburgi-i, Vroom, Green, Gray —11.


author: Van Syckel, J.

text:
    Adolph Wimpfheimer et al., respondents,
      v. John J. Perrine et al., appellants.
    [Decided November 15th, 1901.]
    1. Under an involuntary assignment the receiver or assignee may set aside a chattel mortgage for fraud, or for the neglect of the mortgagee to have it recorded according to the requirement of the statute.

      2. By virtue of the ninth section of the Chattel Mortgage act of May 2d, 1885, the mortgagee will have priority over all creditors of the mortgagor, where the debt or obligation is incurred after the mortgage is recorded, although it is not recorded immediately.
    3. Where there is a voluntary assignment by the mortgagor for the equal benefit of creditors the assignee may set aside the chattel mortgage given by the mortgagor, when it is fraudulent, to the ext.ent that the property is needed for the payment of debts, but he cannot intervene to set it aside when it is given in good faith for value, because the mortgagee has failed to record it as the statute requires.
    4. Creditors of the mortgagor who have claims in their own right before the chattel mortgage is recorded, or who acquire by assignment claims which accrued before the mortgage is recorded, will be entitled to priority over the mortgagee, and may on recovery of judgment assert their rights, notwithstanding a voluntary assignment by the mortgagor for the equal benefit of creditors.
    On appeal from a decree advised by Vice-Chancellor Emery, whose opinion is reported in 61 N. J. Eq. (16 Dick.) 126.

      Mr. Edward M. Golie, for the appellants.

      Messrs. Goult & Howell, for the respondents.

      This opinion was omitted from its proper place. — Kep.

   The opinion of the court was delivered by

Van Syckel, J.

The complainants, at the time of filing their supplemental bill, held four judgments against John J. Perrine.

The first, recovered March 25th, 1898, upon a promissory note given to them by said Perrine June 23d, 1897, for money loaned.

The second, recovered April 16th, 1898, by Albert Courier upon a debt due Courier before the recording of the chattel mortgages hereafter mentioned, which judgment was assigned to the complainants April 26th, 1898.

The third, recovered April 19th, 1898, upon a debt due from Perrine to complainants for $1,259.35, the balance being upon notes originally given by Perrine to Martin Bates & Company before the recording of said mortgages and by them assigned to the complainants after they were due and after the assignment by Perrine to Stagg, hereafter mentioned.

The fourth judgment was obtained May 3d, 1898, upon an obligation incurred by Perrine to complainants before the mortgages were recorded.

Perrine made three chattel mortgages to Stuart and Charles A. Lindsley, defendants and appellants: the first, dated October 17th, 1896, for $3,000; the second, dated February 10th, 1898, for $1,200; the third, dated February 14th, 1898, for $8,500. All thre.e of these mortgages were recorded March 25th, 1898.

On the 25th of March, 1898, Perrine made a deed of assignment under the statute for the benefit of his creditors to George E. Stagg, one of the defendants and an appellant in this case.

The complainants filed their original bill March 31st, 1898, based on the judgment of March 25th, 1898, 'to set aside the aforesaid chattel mortgages as void as against said judgment. A supplemental bill was filed after the recovery of the other three judgments aforesaid.

Two questions are presented by this appeal — first, whether the complainants, as judgment creditors, have the right to set aside’ the chattel mortgages and appropriate the proceeds of the mortgaged chattels to their judgments to the exclusion of the assignee, Stagg; second, if they have such right, whether it extends to so much of their judgments as was for claims assigned to them after the chattel mortgages were recorded.

The first question will be solved by deciding whether Stagg, the assignee under the voluntary assignment, can successfully attack the chattel mortgages, which are admitted to be 'bona fide for value, because they were not recorded according to the requirement of the statute.

It must be regarded as the settled law of this court that the right to set aside such mortgages for fraud rests in the assignee, under a voluntary assignment to the extent that such property is needed for the payment of debts. Pillsbury v. Kingon, 33 N. J. Eq. (6 Stew.) 287.

But in such case of fraud the title to the chattels mortgaged does not pass out of the assignor; the holder of the mortgage gets no legal title or equitable title to them. Pie retains the property as against the assignor, because the assignor cannot set up his own fraud to regain it; but in equity the assignee will be permitted to set aside the fraudulent transaction for the purpose of applying the property to the payment of the creditors of the fraud-doer, the equity court recognizing an equitable title in the assignee for an equitable purpose in contravention of the fraud.

Where the title to the property, as in this ease, has passed bona fide out of the assignor to the mortgagees, he can convey to the assignee no legal or equitable title to the property; the assignee can acquire under the voluntary assignment n.o better title than the assignor has.

That was the view taken in Shaw v. Glen, 37 N. J. Eq. (10 Stew.) 32, by Chancellor Runyon, and it is entirely consistent with Pillsbury v. Kingon.

In Graham Button Co. v. Spielmann, 50 N. J. Eq. (5 Dick.) 120, Vice-Chancellor Van Pleet held that tire receiver of an insolvent corporation is the representative of its creditors, and as such may, by suit or defence, avoid an3 instrument which is void as against them. This case was affirmed in this court, and we see no reason to question the correctness of that decision.

In an involuntary proceeding, as in case of a receivership, or assignee appointed., by tire court, the proceeding is adverse to the debtor. The law takes the property in the position in which it is with reference to the rights of creditors and appropriates it exclusively and irrevocably to the payment of debts. Anyone claiming a superior right must show his title siricti juris.

The receiver is the embodiment of creditors; he stands as and for them; when he challenges the validity of the mortgage, he does so in the character of creditor, having in virtue of his receivership debts fastened upon the mortgagor’s property. It is then a question strictly between creditors and the mortgagee, and the statute, declaring the mortgage void as to creditors for want of recording, applies as fully as if it was a suit between a single judgment creditor and the1 mortgagee.

In voluntary assignments the assignee, does not in the same sense represent creditors; he stands in the place of his assignor, with all the property which his assignor can pass to him, with a duty to divide it between creditors who may elect to come in. When he challenges the validity of a mortgage, he must do so as the representative of the assignor.

Where the previous liens are honest, although by force of the statute they may be avoided by subsequent judgment creditors, “such assignee takes the estate assigned in the same plight and condition in which his assignor held it.” There is nothing in the procedure of a. voluntary assignment which elevates the assignee to a higher plane than tire assignor himself occupied.

The single exception is where the transaction sought to be set aside is tainted with fraud, in which case, as before stated, equity requires it to be avoided on behalf of creditors.

Under the interpretation given by this court in Roe v. Meding, 53 N. J. Eq. (8 Dick.) 350, to the fourth and ninth sections of the Chattel Mortgage act of May 2d, 1885, the lien of the mortgage is preserved as against all persons who become creditors of the mortgagor after the mortgage is actually recorded, although it is not recorded immediately. If therefore the assignee, under a voluntary assignment, is permitted to take the property from the mortgagee, he must take it for the equal benefit of all creditors whether their claims arose before or after the mortgage was recorded, thus enabling the assignee to do what the latter class of creditors could not do if they proceeded in their own behalf. Notwithstanding the voluntary assignment, creditors of the assignor may proceed in their own behalf and, if creditors before the recording of the mortgage, may establish a paramount claim to the mortgaged property.

Currie v. Knight, 34 N. J. Eq. (7 Stew.) 485, was the case of an insolvent estate. In such case the individual creditor may sue, but judgment recovered has no effect except to fix the amount of the debt; no execution can be issued upon it.

The complainants in this case were creditors of the mortgagor before the mortgages were actually recorded, and under their judgments, by force of the statute, have a lien paramount to the title of the mortgagees and not subject to be displaced by the intervention of Stagg, the assignee of the mortgagor.

As to the second question, whether the protection of the statute extends to all of the claims of the complainants, I also agree to the conclusion reached by Vice-Chancellor Emery, in his able and elaborate opinion in this case.

The decree below should be affirmed, with costs.

i For affirmance — The Ci-iiee-Justice, Van Syckel, Garrison, Gummere, Collins, Port, Garretson, Hendrickson, Bogert, Adams, Vredenburgi-i, Voori-iees, Vroom — 13.

For reversal — None.


author: Dixon, J.

text:
    The Empire State Trust Company, respondent, v. Trustees of William F. Fisher & Company and the Broadway Trust Company, appellants.
    [Argued July 7th, 1904.
    Decided April 8th, 1905.]
    1. Under clause e in section 70 of the Federal Bankrupt act, trustees in bankruptcy may avoid a mortgage made by a New Jersey corporation which the creditors of the corporation might avoid under section 64 of the New Jersey Corporation act. P. L. of 1896 p. 277.

    2. Under section 64 of the New Jersey Corporation act, insolvency denotes a general inability to meet pecuniary liabilities as they mature, by means of either available assets or an honest use of credit.
    8. A mortgage given merely to secure antecedent debts is not given “for value,” within the meaning of clause e in section 70 of the Federal Bankrupt act, or for “a valuable consideration,” within the meaning of section 64 of the New Jersey Corporation act.
    Oil appeal of trustees of William P. Pisher & Company against Broadway Trust Company.

      Mr. Robert Adrain, for the appellants.

      Mr. Sherrerd Depue, for the respondent.
   The opinion of the court was delivered by

Dixon, J.

The leading facts in this case are stated in the opinion of Yice-Chancellor Pitney, on which the decree now appealed from was rendered.

The controversy arises from the claim of the trustees in bankruptcy of a New Jersey corporation styled “William F. Fisher & Company,” that the mortgage made by the corporation to the Broadway Trust Company, on September 10th, 1902, to secure a debt created on May 20th, 1902, was invalid against the creditors of the corporation, and should be so adjudged at the instance of the trustees. The decree complained of sustained the mortgage and the trustees appeal.

The rights of the appellants must be ascertained by the provisions of the Federal Bankrupt act. Dudley v. Easton, 104 U. S. 99.

We agree with the learned vice-chancellor in the opinion that when the mortgage was executed the corporation was not insolvent, within the meaning of that term as defined in the federal statute, and that there is no provision of the statute which, of its own force, would invalidate the mortgage.

But clause e, in section 10 of the act, is as follows:

“The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication.”

This brings up for consideration the question whether the creditors of the Fisher company might have avoided the mortgage.

The sixty-fourth section of the New Jersey Corporation act (P. L. of 1896 p. 277) declares that

“whenever any corporation shall become insolvent, or shall suspend its ordinary business for want of funds to carry on the same, neither the directors nor any officer br agent of the corporation shall sell, convey, assign or transfer any of its estate, effects, choses in action, goods, chattels, rights or credits, lands or tenements; nor shall they, or either of them, make any such sale, conveyance, assignment or transfer in contemplation of insolvency; and every such sale, conveyance, assignment or transfer shall be utterly null and void as against creditors; provided, that a bona fide purchase for a valuable consideration, before the corporation shall have actually suspended its ordinary business, by any person without notice of such insolvency or of the sale being made in contemplation of insolvency, shall not be invalidated or impeached.”

Iii enforcing this statute we are not controlled by the definition of insolvency contained in the Bankrupt act, but must accord to that term the meaning ascribed to it in the courts of this state. Here it denotes a general inability to meet pecuniary liabilities as they mature, by means of either available assets oían honest use of credit. National Bank of Metropolis v. Sprague, 21 N. J. Eq. (6 C. E. Gr.) 530, 538; Skirm v. Eastern Rubber Manufacturing Co., 57 N. J. Eq. (12 Dick.) 179, 184.

In this sense the Fisher company was undoubtedly insolvent when the mortgage was executed. It then owed $12,943.57 of accounts payable; $29,252.26 of promissory notes, of which notes amounting to $8,995 had been protested, and $39,000 of business debts secured by mortgages upon its manufacturing plant. Its available assets were insignificant; its legitimate credit was practically exhausted, and within a month thereafter a petition was filed upon which it was adjudged bankrupt.

Under the circumstances, it is beyond question that the mortgage made by the directors of the Fisher company to the trust company was rendered, by our statute, “utterly null and void as against creditors,” unless it is saved as “a bona fide purchase for a valuable consideration,” within the proviso of section 64.

This saving clause is of the same import as the corresponding clause in the paragraph above quoted from section 70 of the Bankrupt act, as will presently be seen on reference to cited cases. •

I do not think the bona fdies of the trust company has been successfully impugned, but the company does not hold the mortgage for “a valuable consideration.”

The general rule is that one who acquires property (outside of commercial paper) as mere security for antecedent debts is not a holder for value. See note to Basset v. Nosworthy, 2 Lead. Cas. Eq. 32.

This rule prevails in New Jersey. Knowles Loom Works v. Vacher, 57 N. J. Law (28 Vr.) 490; affirmed, 59 N. J. Law (30 Vr.) 586; Protection Building and Loan Association v. Knowles, 54 N. J. Eq. (9 Dick.) 519, 528; affirmed, 55 N. J. Eq. (10 Dick.) 822.

The same doctrine is maintained in the United States tribunals. In Morse v. Godfrey (No. 9856 of Federal Cases), 3 Story 364, Justice Story, who, in Swift v. Tyson, 16 Pet. 1, had expressed the opinion that a person taking commercial paper as security for a pre-existing debt, in the usual course of business, became a holder for value, declared that there was a distinction in this respect between commercial paper and other kinds of property, and decided that a bank which had taken a mortgage upon stock in trade and real estate merely as security for old debts, without giving any new consideration upon the faith of it, was not a purchaser for value within the meaning of the Bankrupt law. This decision was followed by the supreme court of the United States, in People’s Savings Bank v. Bates, 120 U. S. 556, where Justice Harlan, delivering the opinion, said: “The rules established in the interests of commerce to facilitate the negotiation of mercantile paper, which for all practical purposes passes by delivery as money, and is the representative of money, ought not, in reason, to embrace instruments conveying or transferring real or personal property as security for the payment of money.”

In the light of these adjudications we must conclude that the trust company is not a “purchaser for a valuable consideration,” or a “holder for value,” within the true intent of the exceptions in section 64 of the New Jersey. Corporation act and section 70, clause e, of the Bankrupt law. Hence the trust company mortgage must be held void as against the trustees in bankruptcy of the Eisher companji, and the decree below must be reversed.

For affirmance — Pitney, Green, Gray — 3.

For reversal — Dixon, Garrison, Fort, Swayze, Bogert, Vkedenbtjrgh, Vroom — 7.


author: Garrison, J.

text:
    Abbie I. Henry et al., respondents, v. William M. Simanton et al., appellants.
    [Submitted December 7th, 1903.
    Decided April 8th, 1905.]
    “An act for winding up voluntary associations and associations wjth partnership liabilities” (P. L. of 1899 p. 1/85) does not clothe the chancellor with power to enforce the payment of debts contracted by such associations, by an assessment against the members thereof, in a case where by a previous proceeding in chancery the business in the course of which such debts were contracted had been wound up and the property and assets of such association got in and distributed.
    On appeal from a decree of tire court of chancer}'' advised by Vice-Chancellor Reed, whose conclusions are reported in 6k N. J. Eq. (19 Diclc.) 57 £.

      ■ Mr. Sylvester G. Smith and Mr. William 27. Morrow, for the appellants.

      Mr. Martin Wyckojf, for the respondents.
   The opinion of the court was delivered by

Garrison, J.

Musconetcong Grange, No. 114, a voluntary association, was instituted a subordinate grange of the Patrons of Husbandry in the month of February, 1893, and during that year carried on a merchandise business of some sort under the firm name of W. Fleming & Company. In January, 1894, the persons so associated elected trustees and filed a certificate of incorporation under the provisions of “An act to enable granges of the order of patrons of husbandry to incorporate” (2 Gen. Stat. p. 1614), after which the same business was continued under the name of the Asbury Mercantile Association.

The complainants sue as creditors of the business so conducted. The circumstance that the debts of some of the complainants arose before and some after the incorporation is not a matter of moment, in view of the fact that the statute conferred no authority to engage in the business in the course of which the complainants’ debts were contracted, so that the legal rights of the complainants against the associated members as gMasi-partners were the same after as before the incorporation. The defendants are or were members of the association before and after its incorporation.

In 1897, upon a bill filed by one of the said trustees, the business so carried on by the incorporated grange under the name of the Asbury Mercantile Association was wound up, and a receiver appointed by the court of chancery, who got in its credits, sold its property, distributed its assets and was finally discharged, after which the business was not resumed.

In 1899 the legislature passed the statute under which the present bill is exhibited, the significant prayer of which is for the enforcement of the payment of the complainants’ debts against the members of the association, under the provisions of the sixth section of this act, viz., by an assessment against them, to be made by the decree of the chancellor.

The procedure authorized by this section of the statute of 1899 is the one feature added by it to the proceeding under which the business of the same association was previously wound up, and is the only particular in which the later statute is of any remedial benefit to the complainants. The injunction and receivership authorized by the later act are mere repetitions of the previous proceeding, and are Obviously futile where there is no business to be enjoined and no property or assets to be collected. Unless, therefore, this added provision of the statute of 1899 is available to the complainants, they can take nothing by their bill.

The answer of the defendants expressly challenged the jurisdiction of the court, in view of the foregoing considerations, and presents, therefore, the question whether the statute of 1899 applies to an association, the business of which had already been wound up, its tangible property sold and all its assets distributed.

The conclusion 1 have reached is that the statute does not contemplate such a situation, and is, from its terms, incapable of being applied to it.

The question is one of construction. The propriety of the earlier proceeding in the court of chancery is not in issue, but the actual situation created by that proceeding has to be dealt with in passing upon the applicability of the later legislation to the situation so brought about. The situation, as has been shown, was that the business, in the course of which the complainants’ debts were contracted had been entirely wound up, and its assets distributed, leaving the creditors, notwithstanding the incorporation of the association, free to proceed at law against the associated members for any debts for which they were legally liable. The statute in question, by its sixth section, authorizes the chancellor to assess against the members of the association to which it applies the sums that otherwise would have been and in the present case still are, recoverable by proceedings at law. By tire terms of the statute this authority is conferred upon the chancellor as ancillary to the winding up of an insolvent business and the distribution of its assets, and in this connection alone does it appear as an expression of the legislative will. This is clearly shown, not only by the title of the act and by its first enacting clause, but also by the sixth section itself, by which the authority of the chancellor to assess the members of the association is made expressly to depend upon a condition that can exist only when, by the report of a receiver appointed in tire cause, it appears that the assets of the association are insufficient to pay its debts and the expenses of winding it up. The scheme of the statute, therefore, is that the authority to assess in chancery the members of a voluntary association for the debts of the concern shall be exercised in the course of a proceeding in which the tangible property and other assets of the association are being administered.

As ancillary to such an administration, this statute, as a whole, may be sustained. But to ascribe to the legislature the intention to clothe the court of chancery with authority to impose an assessment as an isolated power divorced from any remedial proceeding that was within its jurisdiction would be to impute to the legislature the purpose of investing a court of equity with jurisdiction over purely legal rights, with respect to which the remedy at law was both adequate and complete. (Such a construction is never favored, and in the present case is neither the necessary nor the natural force of the language employed.

The act, in its entirety, is incapable of any practical application to the present association because of the previous administration of its assets. The appointment of a receiver and the issuance of an injunction are palpably futile and serve only to impai't a color of jurisdiction to the actual remedy sought by the complainants, which is the enforcement in equity of their legal rights against the defendants.

This power, as has been shown, has not been conferred upon the chancellor as an isolated jurisdiction, which it would be if exercised in the present case.

. The court of chancery being, therefore, without authority to grant the only prayer of the complainants’ bill that was of a remedial nature, the bill itself should have been dismissed.

To this end the decree brought up by this appeal is reversed.

For affirmance — None.

For reversal — The Giiiee-Justice, Dixon, Garrison, Fort, Swayze, Booert, Vredenburgi-i, Vroom, Green, Gray — 10.


text:
    Atlantic City, respondent, v. The New Auditorium Pier Company, appellant.
    [Argued June 22d and 23d, 1904.
    Decided November 14th, 1904.]
    1. On May 9th, 1896, Loper granted, by metes and bounds, a right to Atlantic Gity to maintain on a tract of land above high water a street or highway called the new boardwalk, and in his said deed covenanted not to erect any structure to the ocean side of the way so granted. This deed was recorded on June 16th. In the interval between the execution and record of this deed Loper sold and conveyed to the defendant’s lessors, by one deed, the said tract of land above high water, and by another deed the lands below high water to the ocean side of the new boardwalk, which deeds were recorded on June 10th. Upon a bill filed by Atlantic City to restrain the defendant from erecting a structure on the land to the ocean side of the new boardwalk — Hold, that the defendant’s lessors took Loper’s title to the land below high water without notice of the covenant contained in the complainant’s unrecorded deed for the land above high water ; that the construction of the boardwalk by the complainant did not impute to the defendant’s lessors such notice, and that the defendant’s land was not affected by the restrictive covenant contained in said boardwalk deed.
    2. Mutual covenants restricting the use of land will be enforced against purchasers from such covenantors only when such ali'enees take with notice.
    On appeal from a decree advised by Vice-Chancellor Grey, whose opinion is reported ante p. £8k-

    The controversy in this case is over a covenant made by Richard F. Loper with Atlantic City, in a writing under seal, called the boardwalk deed. This writing, which was dated April 30th, 1896, and was executed by Loper on May 9th, 1896, granted to Atlantic City the right to maintain a street over a strip of land along the Atlantic ocean, above high water. The strip is described in this deed by metes and bounds, and Loper, in addition to his grant as aforesaid, covenanted not to erect any structure on the ocean side of the public way so granted, which covenant was to run with the land. The land to which this covenant related was under the tidal waters of the Atlantic ocean and had been recently granted to Loper by the riparian commissioners. The defendant is now in possession of this land under a lease, which by mesne leases relates to a deed executed by Loper on June 6th, 1896, by which he conveyed to the Mary A. Riddle Company and Joseph A. Brady all of the lands under water that had been granted to him by the riparian commissioners. By another deed of the same date Loper conveyed to the same grantors the land above high water, on which the new boardwalk was in course of construction. The answer sets up that these conveyances were in consummation of a sale of said lands made by said Loper to one William Riddle, on the 4th day of May, 1896, and charges that the said Riddle company and Brady took the lands so conveyed free from any covenants or restrictions contained in the complainant’s deed of dedication, executed by Loper on May 9th, as aforesaid. The object of the complainant’s bill is to have the defendant enjoined from erecting on said lands under water a structure which the bill alleges is in violation of the covenant contained in Loper’s boardwalk deed, which covenant the bill charges was binding upon Loper and his grantees and is binding upon the defendant. A preliminary injunction was allowed upon the conclusions that are reported in 63 N. J. Eq. (18 Dick.) 6hh.

    Upon final hearing the defendant, in proof of the agreement of May 4th, 1896, set up in its answer, offered a written agreement of that date, which the learned vice-chancellor overruled, but directed to be spread upon the record. The agreement so offered was in these words:
    “An agreement, made this fourth day of May, a. d. eighteen hundred and ninety-six, by and between William Riddle, of the first part, and Richard F. Loper, party of the second part, witnesseth: For and in consideration of the sum of one hundred and forty thousand dollars, the party of the second part has hereby sold and agrees to transfer to the party of the first part all that certain piece of land lying shoreward two hundred and fifty feet from the line of the new boardwalk, with all riparian rights in front thereof, with the further option of the purchase of the balance of the lot shoreward, at the rate of two hundred and fifty dollars per foot front, up to one hundred and fifteen feet of the land owned by Mary IC. Loper, one thousand dollars ($1,000) having been paid on account of said purchase, the receipt of which is hereby acknowledged, and the balance being payable upon signing and delivery of the deeds.
    ■ “In witness whereof, the parties hereunto have set their respective hands and seals the day and year first above written. Witness present:
    “J. Bartram Richards, Richard F. Loper, [l. s.]
    “Rejinold Redeord, William Riddle. [l. s.]
    “It is further agreed that the sum of twenty-two thousand and four hundred and ninety-nine dollars and ninety-one cents ($22,499.91) is not to be paid under this sale unless the entire one hundred and fifty feet front upon the boardwalk is used by the purchaser, and thenceforth the said sum is due upon demand. Witness present:
    “J. Bartram Richards, Richard F. Loper, [l. s.J
    “Rejxntold Redeord, William: Riddle.” [l. s.]
    Touching this agreement Loper was permitted to testify, without objection, that $1,000 was paid upon it on May 5th, and that the two deeds made by him to Mary A. Riddle Company and Brady, dated June 6th, 1896, were in consummation of the said agreement. At the close of his case defendant’s counsel renewed the offer of this written agreement and offered to prove that the purchase was without notice of the claim now set up by the complainant in its bill. This offer was overruled by the learned vice-chancellor “upon the ground that there has been nothing to show that the complainant in this suit (Atlantic City) was in any way notified of the agreement, and that it is in any way binding upon the city by way of notice or otherwise.” By the final decree the preliminary injunction was made perpetual. The conclusions of the learned vice-chancellor, which are -reported arde ¶. 28k, are to the effect that the. defendant can derive no benefit from the agreement of May 4th, 1896, because the complainant had no notice of the equitable title that passed- by it, and that the defendant can derive no benefit from the priority of record of its legal title from Loper, because the defendant, when it took its deed from Loper, had implied notice of the restrictive covenant contained in the unrecorded boardwalk deed from Loper to the complainant. Accompanying each of the conclusions filed by the learned vice-chancellor in the court below is a prefatory statement setting out with great fullness all of the matters that are germane to the issue, to which, instead of repeating them here, reference is made.

      Mr. 'Charles D. Thompson, for the appellant'.

      Messrs. Godfrey & Godfrey and Mr. Jay Ten Eyck, for the respondent.
   The opinion of the court was delivered by

Garrison, J.

The decision of the learned vice-chancellor that the defence based upon the agreement of May 4th, 1896, was entitled to no equitable consideration, for the reason that Atlantic City was in no way notified of it, and his refusal to admit the agreement itself in evidence, for the same reason, seem to involve a denial of the peculiar standing in equity of a defendant who has purchased for value without notice. Such defence does not profess to go to the merits of the controversy tendered by the complainant, but only to the propriety of the remedy that the court is asked to enforce. It is new matter in bar of the jurisdiction of equity and proceeds upon the notion that as no consideration can appeal more favorably to a court of equity than that of one who in good faith has paid for a title without notice of any encumbrance, a court of equity will not concern itself with a comparison of equities, but will content itself with a denial of its remedial assistance. “Against such a purchaser,” said Lord Loughborough, in Jerrard v. Saunders, 2 Ves. Jr. 454, “this court will not take the least step imaginable.” Such a purchaser “shall not be annoyed in equity” is the quaint language of Mr. Eonblanque. 2 Fonb. Eq. 151. “It is a general and thoroughly established rule that a purchaser bona -fide for valuable consideration, without notice of any preceding claim at law or in equitjq will not be prevented by the court of chancery from availing himself of any advantage which he has acquired.” 2 Spenc. Eq. Jur. 733. “Eor equity,” says Mr. Sugden, “will not disarm a purchaser, but assist him, and precedents of this nature are very ancient and numerous where the court hath refused to give any assistance against a purchaser, either to an heir or to a vendor, or to the fatherless, or to creditors, or even to -one purchaser against another.” 2 Sugd. Vend. & P. (7th Am. ed.) *1016.

“A purchaser without notice for a valuable consideration is a bar to the jurisdiction of the court,” is the way Lord Northington puts it, in Stanhope v. Earl Verney, 2 Eden 81.

“Hence the doctrine,” said Chief-Justice Beaslejr, “so much favored in a court of equity of the inviolable nature of the defence of a bona fide purchase without, notice for a valuable consideration.” Herbert v. Mechanics’ Building and Loan Association, 17 N. J. Eq. (2 C. E. Gr.) 497, 500.

The leading case upon this doctrine annotated by White and Tudor, in Basset v. Nosworthy, 2 White & T. Lead. Cas. 1.

The defendant had set up its equitable right under this agreement by answer instead of by plea, as it might do when in bar of relief only, and not in bar of discovery. Haughwout v. Murphy, 22 N. J. Eq. (7 C. E. Gr.) 531, 547.

It offered to prove the agreement so set up, which by a comparison of dates was prior to the inception of the right which the plaintiff sought to enforce, and hence necessarily without notice of it, and sufficient evidence was admitted to show the consummation of this agreement by a conveyance of the legal title and the parting with a valuable consideration for the rights so acquired. The refusal of the court below to admit-the agreement in evidence left the case in a somewhat nebulous condition, but enough was proved, or offered to be proved, to establish prima facie the favored status referred to in the above citations. The proof was rejected, not because the facts had been inartificially pleaded, but because the complainant had received no notice of the defendant’s equitable estate, a clearly irrelevant consideration. We think that the agreement should have been admitted in evidence.

The rejected agreement had also a material bearing upon the case upon its merits, namely, the question of notice of the boardwalk deed. Bjr the terms of the agreement, the equitable title that passed under it recognized the new boardwulk as subsisting upon the land. This board-walk was by-lawr a public street. Hence, upon the question of what notice would be imputed to one who sawr the new boardwalk in the course of construction by the city, the fact of acquiescence in its actual location upon the land would be_ a material circumstance. The assertion of a hostile right gives rise to a very different duty from the apparent exercise of a right that has been acquiesced in. The period of time to which the proof of notice should be directed would also have been materially altered by the admission of the contract of sale.

The case has, however, been examined in its entirety upon the proofs that were admitted and dealt with in the court below.

The bill, as has been said, was filed to enforce a restrictive covenant contained in the boardwalk deed from Loper. In proof of the covenant it thus sought to enforce, the complainant offered a copy of the record of the boardwalk deed, certified by the clerk of Atlantic county, in conformity to an act respecting conveyances. Whether such copy should have been received in evidence depended upon whether the original was “such deed, conveyance, lease or other instrument” as is authorized to be recorded, and a transcript of such record received in evidence. The learned vice-chancellor admitted the certified copy offered by the complainant. From this ruling, in which we concur, and upon which the complainant’s entire case rests, it follows that the rights of the complainant under said instrument must consistently be treated as subject to the recording laws contained in the conveyancing act. The documentary evidence upon this point was as follows: The deed to Atlantic City, which I have called the boardwalk deed, was executed by Loper, as found by the vice-chancellor, upon May 9th, 1896. The deed to the defendant’s lessors, which I shall call the Eiddle deed, was executed by Loper on June 6th, 1896. The boardwalk deed was not recorded until June 16th, 1896. The Eiddle deed was recorded six days earlier, namely, June 10th. Looking, therefore, at the documentary evidence alone, it is clear that the complainant’s deed is without the least legal force against the defendant’s title. It is equally clear that the only way in which the complainant can subject the defendant’s land to the covenant contained in its earlier deed is by proving that such subsequent deed was taken with notice of the unrecorded boardwalk deed. The burden of proving such notice rests upon the holder of the unregistered title. Hodge v. A merman, 40 N. J. Eq. (13 Stew.) 99.

This burden, the learned vice-chancellor concluded, had been successfully borne by the complainant, not by proof of actual or constructive notice, but by implied notice; that is, by apparent conditions that charged the defendant’s lessors with the duty of making inquiry, in the course of which the unrecorded deed from Loper to Atlantic City would have been discovered. The fact upon which this conclusion rests is that “during the whole period from April 20th to June, 1896, the construction of the steel boardwalk was openly going on under the direction of Atlantic City workmen and superintendents,” and the considerations that led the vice-chancellor to give to this fact the force of an implied notice to Loper’s grantees of the unrecorded deed of Loper to Atlantic City are: “The work on the new steel boardwalk began on April 20th, 1896, and continued until it was completed, in July of that year. The character of the structure was so permanent from its very beginning, in steel columns and girders .to carry a plank walk forty feet wide, that anyone who approached it was necessarily notified that the parties erecting it were asserting a permanent right of occupation. The structure was also built at the ocean’s edge and was plainly a continuous boardwalk, intended for promenaders, who might, in passing to and fro on it, enjoy the ocean view and breeze. This was erected across the property of Loper between the 20th of April and the 6th day of May, 1896. The boardwalk itself was then in full view. It was plainly a continuous way along the ocean,, not only on Lojper’s property, but also on the property of all of the beach front owners, and just as plainly the main purpose and object of that way was manifest to every onlooker, namely, the enjojanent of the view of the sea, uninterrupted by buildings or other structures on the ocean side of the boardwalk.”

“The landward side of the boardwalk was closely built up along its entire length. The oceanward side of it had at that time no buildings except Young’s pier and the Iron pier. Those two were the only buildings standing oceanward of the boardwalk in 1896. This fact would of itself put anyone interested upon inquiry to ascertain why so remai'kable a condition should exist.”

I am unable to give to this fact either the force or the effect thus ascribed to ii. The situation that the learned vice-chancellor characterized as so remarkable as to constitute in itself implied notice to a prospective purchaser, at least to the extent of putting him on inquiry, seems to- me to be a natural condition that would not, of itself, arrest the attention, still less excite the suspicion of anyone. The boardwalk, as originally located and as relocated, ran along the “ocean’s edge,” hence the land to its west was above high water and in private ownership; while that to its cast or ocean side belonged, normally, to the State of New Jersey, and until granted by the riparian commissioners, of which there is no proof that it was, except as to Loper, did not vest in private ownership. This, which may be characterized as the normal condition of affairs, would account fully for the phenomenon upon which the entire stress of the complainant’s case rests, namely, the presence of buildings upon the landward side of the boardwalk and their comparative absence from the ocean side, save for a few piers. It is the condition that exists at innumerable places along our seacoast where no restrictive covenant is in force; nor is it the general rule that the absence of structures upon land is ordinarily referable to a restrictive covenant that forbids the erection of such structures. Not once in many thousands of instances is such the ease. But while there is no rule that the unimproved state of laird is ordinarily referable to restrictions that forbid its improvement, there is a general rule that acts of possession upon a tract of land that is described by metes and bounds are to be referred to the tract so circumscribed. In the present case all of the apparent acts relied upon as constituting notice were confined to the complainant’s right of way upon the upland described by metes and bounds in one of the two deeds from Loper to the Riddle grantees, which was not the deed by which the land upon which the locus in quo was situated was conveyed to them. So that the affirmative case for the complainant is that the visible condition referable to the upland conveyed by Loper under deed number one was not only not to be confined to the metes and bounds within which it was being exercised, or to the metes and bounds of the larger tract of which the boardwalk was a part, but was notice of a restriction that applied only to other lands conveyed by Loper by another deed. The nature -of this apparent condition does not seem to me, as I have said, to sustain this conclusion. One of the facts found by the court below was that from April 20th Atlantic City was in open and notorious possession of the strip of land upon which the new boardwalk was being erected, which, by force of the statute of 1895, was a street; and a stipulation of counsel shows “that along the property now owned by the defendant's lessors the columns were sunk and the floor beams were being placed on April 29th, 1896.” The boardwalk deed, was dated April 30th, and executed by Loper on May 9th. Obviously, therefore, the city, on April 20th, did not take possession of its street under that deed. How it got possession concerned Loper alone. He could license such use of his land. He could, if he chose, acquiesce in the location of the street. So could a purchaser from him, and so, I take it, must a purchaser from him who bought the land subject to what he actually saw on the ground, which was a continuous and apparent easement of a street of the city. This was the attitude of the Riddle purchasers. Acquiescing, whether by choice or by force of legal rules, in the rights that the city was exercising, they were not required to make inquiry respecting rights in which they acquiesced, still less respecting other rights that the city might claim in other lands of a different character, having a different source of title and conveyed to them by a different conveyance.

In the face of these considerations, I am unable to reach the conclusion that the complainant proved that the purchasers whose deed was first recorded had implied notice of the unrecorded boardwalk deed of the complainant.

The learned vice-chancellor also decided that Loper, by executing the boardwalk deed, became a party to a general scheme from which he could not have withdrawn and of which his restrictive covenant was an essential feature. The grounds upon which this conclusion was reached have not been reviewed, for the reason that such schemes bind purchasers for value from such covenantor’s only when such alienees take with notice. “Such ‘ stipulations,” said Chief-Justice Beasley, in Brewer v. Marshall, 19 N. J. Eq. (4 C. E. Gr.) 537, 543, “have been repeatedly held obligatory, not only upon such owners, but upon their alienees, taking ivith notice.”

In DeGray v. Monmouth Beach Club House Co., 50 N. J. Eq. (5 Dick.) 329, the first head-note of Vice-Chancellor Green’s opinion is: “A covenant restrictive of the use of land will be enforced in equity against subsequent purchasers with notice.” This decree was affirmed by this court upon this opinion. The check-list was filed February 26th, 1894, but I do not find in the reports any mention of the case in this court.

Notice being as essential to this branch of the complainant’s ease as to that which has been considered, nothing further need be added unless it is to say that the case does not show that any other covenantor had acquired the state’s title to lands under water,- and as in the deed itself they are described merely as owners of land fronting on the beach, it would scarcely be equitable to hold Loper, by mere presumption, to that part of the scheme that apparently affects him alone. Equity, which always looks to equality, being in this particular class of cases based also upon reciprocity, or at least upon the capacity to reciprocate.

The conclusion I have reached is that the complainant failed to prove that the legal title that was superior to its own was taken with notice of the right that it now seeks to enforce, and that the decree of the court of chancery should be reversed and the complainant’s bill dismissed.

For affirmance — None.

For reversal — Tim Chief-Justice, Dixon, Garrison, Pitney, Swayze, Bogeet, Veedenbuegh, Vroom, Green, Gray —10.


author: Per Curiam.

text:
    Charles Evans, respondent, v. The New Auditorium Pier Company, appellant.
    [Argued June 22d and 23d, 1904.
    Decided November 14th, 1904.]
    On appeal from the decree advised by Vice-Chancellor Gre]r, whose conclusions are reported ante p. SIS.

      Messrs. Bedle, Edwards & Thompson, for the appellant.

      Messrs. Qoult, Howell & Ten Eyclc, for the respondent.
   Per Curiam.

This case is controlled by the decision rendered at this term in the case of Atlantic City against the same defendant, upon the two points indicated in the head-notes to the opinion delivered in that case.

For affirmance — None.

For reversal — The Ci-iiee-Justice, Dixon, Garrison, Pitney, Swayze, Bogert, Vredenburgh, Vroom, Green, Gray —10.


text:
    City of Atlantic City, appellant-petitioner, v. New Auditorium Pier Company, respondent. Charles Evans, appellant-petitioner, v. New Auditorium Pier Company, respondent.
    [Filed February 9th, 1905.]
    On petition for reargument.

      Messrs. Godfrey .é Godfrey and Mr. Harry Wootton, for the petitioners.
   Per Curiam.

The petitioners ask for a reargument of these appeals for the purpose of presenting more fully their views respecting the effect of the easement deed of 1890 (Evans’ deed) as to land that was above high water in 1895, when Evans conveyed to Loper, and also as to land bought that same year by Loper as riparian land, but which has since become upland, apprehending that the silence of this court upon this point might prejudice or foreclose the petitioners with respect to it.

In the court of chancery, the response of the vice-chancellor to this contention was as follows: “The locus in quo the defendant is driving piling lies wholly below the line of high-water mark as it existed in July, 1895, the time when Loper received the- state’s grant.

“It must be - held that the complainant has no right to a restraint against the defendant’s construction, so far as the complainant’s equity depends upon the restrictions sought to be imposed by the Evans deed, upon the use of lands lying below high-water mark.”

The facts upon which this conclusion of the vice-chancellor rests, viz., that the locus in quo was below high water and that Evans had no title to such land, were not and are not in dispute.

The petitioners’ decree enjoined the defendant from.making use of this locus. Giving to the deed of 1890, therefore, the fullest effect claimed for it by the petitioners (and they argued that matter fully), it affords no support to this decree. The application of the terms of that deed to the case of land that has bo.come upland since Loper, in 1895, united the two titles in himself, is met by the same consideration, viz., that the locus in quo is below the high-water line so established. This fact renders any reargument as to the deed of 1890 useless for the purpose of supporting the present decrees.

What rights the petitioners may successfully assert under the deed of 1890 with respect to land above high water, must wait upon a state of facts to which the covenants of that deed are applicable. Upon that point our opinion was properly silent.

The motions for reargument are denied.