text:
    John Murphy et al., complainants, v. William Henry Markis, defendant.
    [Decided October 30th, 1925.]
    Where a woman made a will leaving the residue of her property to her husband and making him her executor, and afterwards obtained a divorce from him on the ground of adultery, and later died without revoking the will, the words “my beloved husband’- in the will are mere words of description, and the devise and appointment as executor are good.

      On bill, &c. On final hearing.

      Messrs. Cole £ Cole, for the complainants.

      Messrs. Bourgeois £ Coulomb, for the defendant.
   On September 19th, 1899, the defendant, William Henry Markis, married one Sarah Mnrphy.

On April 13th, 1909, the said Sarah Markis, the wife of said defendant, made, published and declared her last will and testament, which will contained the following:

“Third. I give, devise and bequeath unto my beloved husband, William Henry Markis, all the remainder and residue of my estate, real, personal and mixed, absolutely, of whatsoever 'kind and wheresoever situate, including all insurance money or moneys that my death may produce.
“And, fifth. I hereby constitute and appoint my beloved husband, William Henry Markis, sole executor, without bond, of this my last will and testament.”

A number of years after the making of said will, Sarah Markis filed her petition in this court against her husband praying a dissolution of their said marriage, on the ground of adultery, and final decree was entered in said cause, bearing date November 8th, 1916, by which the said parties were divorced from the bonds of matrimony for said cause, and the said marriage was dissolved.

On September 14th, 1923, the said Sarah E. Markis, departed this life unmarried and without issue, but leaving her surviving the complainants, her sisters, nephews and a grandniece, respectively.

After the death of Sarah Markis, said William Markis produced before the surrogate of Atlantic county said last will and testament, which was duly probated, and the said William Henry Markis qualified as executor, and has taken upon himself the burden of the administration of the estate of the said Sarah Markis.

The only questions for determination are: Does William Henry Markis take under the provisions of section 3 of said will, and is he appointed executor thereof under'clause 5.

In some jurisdictions, facts such as are here presented are sufficient upon which to presume an implied revocation of the will. In re McGraw Mich. 1924; 199 N. W. Rep. 686; 37 A. L. R. 308.

This question is quite thoroughly annotated in 25 A. L. R. 49. This annotation carefully distinguishes the cases of revocation of the will, or of the legacy or devise, or the lapse of the legacy or devise.

In this state, however, “no devise or bequest in writing * * * or any clause thereof shall be revocable, otherwise than by some other will or codicil in writing, or other writing declaring the same, or by burning, canceling, tearing or obliterating the same by the testator himself or in his presence, and by his direction and consent; but all devises and bequests * * * shall remain and continue in force until the same be burnt, canceled, torn or obliterated as aforesaid, or by some other will, codicil or other writing duly executed.” 4 Comp. Stat. pp. 5861, 5810.

No claim is made that the will was revoked.

Chancellor Yroom, in Bullock v. Zilley, 1 N. J. Eq. 489, said: “The only question that can be raised is this: whether the words ffiis wife/ as applied to the complainant in the bequest, are to be taken as mere words of description; if so taken, the rights of the complainant are not affected by the divorce; but if the person taking must, necessarily, be the wife of Thomas Bullock, and take in that capacity, then her interest is at an end.”

This has been the law for nearly a century. Steen v. Steen, 68 N. J. Eq. 472; Bell v. Smalley, 45 N. J. Eq. 478.

The chancellor, in Bullock v. Zilley, supra, further said: “Upon what grounds the parties were divorced, or which complained of the other, I am not informed. The bill simply alleges the fact of the divorce. The demurrer admits it as stated, and the court can look no further than the pleadings. I am not aware, however, that any development of facts can change the legal rights of the parties. Considering the case, then, simply upon the intention of the testator, as collected from the will itself, my conclusion is, for the reasons above stated, that the complainant is entitled to relief.”

In Van Syckel v. Van Syckel, 51 N. J. Eq. 194, “a devise to A., and, at his death, to his wife, applies only to the person who was his wife at the date of the execution of the will, and does not extend to a wife taken subsequently thereto.” Vice-Chancellor Green distinguishes this case from the cases therein cited and Swallow v. Swallow, 27 N. J. Eq. 278.

In Jones Estate, 211 Pa. 364, the opinions of the auditing judge, and of the judge on exceptions and of the opinion of Mr. Justice Potter, are very illuminating.

The court said: “What is there in the facts of this case to support the claim that the legacy has lapsed P The person named as legatee did not die in the lifetime of the testator, nor did any other event occur in the lifetime of the testator, which, under the language of the will, would render the testamentary gift inoperative. The donee survived the testator and is alive, and has both capacity and willingness to take under the will, but it is suggested in the argument that, while not physically dead, the donee, by her own act in obtaining the decree of divorce, ended the marital relations as absolutely as death would have done. This consequence did follow the divorce, in so far as the duties, rights and claims accruing to her by reason of the marriage are concerned. * * * What the law gave it took away, nothing more. The beneficiary * * * is here only as a legatee, and is asking for that only which testator gave to her of his free grace, and as a matter of bounty. That which he gave to her in his will was his own, to give or to withhold as he saw fit. A bequest needs no consideration to support it. As a legatee she stands upon the same footing as any other individual, and her relation to the testator has nothing to do with the case, unless he chose to make it an element in the bestowal of the gift. * * * The testator intended the gift for the individual, Mary Brown Jones, who was at that time his wife, and identified by him as such. We think the bequest is unrestrictive, and that the words ‘my wife’ are, as we said above, only descriptive, and do not import a condition that the beneficiary shall remain his wife. Nor do we doubt that as to the object of the legacy the will speaks from its date.”

Mr. Justice Potter stated the law to be:

“The mere fact that a gift is made to a named legatee in certain character, as, for instance, to my wife, A, does not avoid the legacy, if the legatee does not happen to fill the character.
“The relationship, however, could not have been the sole motive since the gift is to the individual by name, and not to him simply as husband, nor is there, as in Bell v. Smalley, 45 N. J. Eq. 478, the evidence offered by the restriction of the bounty to the time during which the beneficiary remains unmarried. We have no right to say that the gift was subject to the condition that the donee should at the time it took effect be the husband of the daughter.
“In Brown v. A. O. U. W., 208 Pa. 101, where a certificate was payable at the death of John Brown to his wife, Mattie Brown, we held that it was for the individual, Mattie Brown, without regard to the fact of her continuing to be the wife of the member, and sxxbsequent divorce did not forfeit her right. The husband there had the power to change the beneficiary at any time, and we held that the fact that he did not do so, during a period of eight years between the divorce and his death, made evident his intention not to deprive his first wife of the benefit of the policy. Where a man retains a revocable instrument with full opportunity of revoking it, and does not revoke it, there is a strong presumption that he wishes it to stand.” Chief-Justice Tilghman in Irish v. Smith, 8 S. & R. 573.

In the Brown Case he had, after his divorce, married Anna Z. Whealer, xvho survived him as his widoxv.

Mrs. Markis lived nearly seven years' after the divorce was' graixted. She did not, during these years, cancel or revoke hex will, xxor did she attempt to make axxy other testamentary dispositioix of her property. This sitxxation must be considered as a strong presumption that she desired no revocation or change in her will.

An analysis of the cases in the courts of this state indicates clearly that the law is as before stated, and that that rule always held unless there is contained in the will other qualifications or statements indicating that the gift was not to the person, but conditioned they should take in the character designated.

In Bell v. Smalley, supra, the court held that the use of the words “during her widowhood” made it perfectly clear that the testatrix meant that Hannah should only take while she remained the widow of Erancis, and that having been divorced she never became the widow of Erancis, and, therefore, she could not take. Vice-Chancellor Van Eleet, however, repeats the law and cites Bullock v. Zilley, supra.

The reporter in a footnote to Bell v. Smalley annotates many cases, in all of which, where the question arises, the same distinction is noted.

In Steen v. Steen, 68 N. J. Eq. 472, Vice-Chancellor Bergen cites Bullock v. Zilley, supra, as expressing the law, but said: “My construction of the devise under consideration is that the words used by the testatrix were intended to describe the character or capacity in which the legatee should take.”

Vice-Chancellor Bergeu, in Collard v. Collard, 67 Atl. Rep. 190, where the will read, “to my said wife, Emily M. Collard, for the term of her natural life, or so long as she remains my widow,” said: “The testator uses the words Tor the term of her natural life so long as she remains my widow.’ At the death of the testator, when the will became effective, the devisee of the prior estate was not, and could not be, his widow, for she had never been his lawful wife, and the estate given was void because the conditions upon which it rested did not and could not exist. There was no wife, nor one who could be his widow. * * * Again, the gift to the supposed wife was void because the gift was not to her as a person. She could only take in the character of the wife of the testator. * * * The words ‘my wife,’ as used here, are not words of description to designate the legatee, but rather to indicate the character or capacity in which alone she could take, and, failing to answer that description at the time the will took effect, the gift to her failed.”

There can be no question but that at the time of the making of the will the testatrix meant to, and did, devise and bequeath unto William Henry Markis all the remainder and residue of her estate, and appointed him executor of the will.

The words “my beloved husband” were clearly mere words of description. Nothing appears in the will to indicate the contrary. No case has been presented to me, nor have I been able to find one, which indicates that the use of such words, without other limitations or qualifications, make void such a bequest.

As this will has never been revoked or canceled, and no new will or codicil has been executed changing its terms, I will advise a decree that William Henry Markis, the defendant, is entitled to “receive” all the remainder and residue of the estate of said Sarah Markis, and that he is the executor under the provisions of said will.


source: Caselaw Access Project

author: IisTGEKSOLL, V. C.

license: Public Domain

text:
    Ida Singer et al., complainants, v. Fleurette B. Cavanna et al., defendants.
    [Determined November 9th, 1925.
    Filed November 13th, 1925.]
    ■Where time was made of the essence of a contract to sell real estate such provision cannot he ignored and on vendee’s failure to close at the required time, and when the time for settlement was not extended or waived, the bill of the proposed vendee to compel conveyance must be dismissed.
    On bill for specific performance. On final hearing.

      Messrs. Gole £ Cole, for the complainants.

      Mr. W. Elmer Brown, Jr., for the defendants.
   IisTGEKSOLL, V. C.

The complainants endeavor to compel the defendants to convey to them certain premises situate in Atlantic City, New Jersey, together with certain goods and chattels enumerated in the bill.

The parties, on or about January 25th, 1925, entered into an agreement, in which they recited that the parties had theretofore, on September 3d, 1924, entered into an agreement respecting the sale of the said premises; that the parties of the second part thereto (the complainants) had undertaken and agreed to make certain payments, which they had failed to make; that there remained due and unpaid upon said agreement the sum of $3,750 on account of the purchase price, and, in addition thereto, carrying charges and adjustments; that the parties of the second part had applied for an extension of time within which to fulfill their part of the agreement, and had agreed to pay to the parties of the first part the sum of $500 as consideration for entering into the agreement, and the payment of the sum of $3,750, together with certain carrying charges and installments therein specified.

It was also agreed that the last payment should be on the 1st day of September, 1925, and to be the amount of the balance then to be found due.

The parties of the first part agreed to accept as a part of the consideration for said premises a purchase-money mortgage of $8,500, and further agreed upon the terms and conditions of the agreement being performed by the said parties of the second part, to execute and deliver to the said parties of the second part a good and sufficient conveyance of the premises.

It was also agreed that the said agreement was supplemental to the said first-mentioned agreement, to be attached to and form a part thereof, all of the terms thereof to remain in force except as supplemented or altered.

Settlement was “to be made at the office of the Chelsea Title and Guaranty Company, Atlantic City, New Jersey, on September 1st, 1925, at the hour of three o’clock in the afternoon,” and time was to be of the essence of the contract.

The agreement of September 3d, 1924, provided that the consideration for the premises therein described, and the goods and chattels therein enumerated, was to be the sum of $55,000, payable as therein set forth. A part of the consideration was the assumption of a first mortgage of $15,000, a second mortgage of $19,000 and the payment of a third mortgage of $4,500.

The parties attended at the office of the Chelsea Title and Guaranty Company of Atlantic City, at ten o’clock in the forenoon of Sepember 1st, 1925, with all the parties present excepting Isaac Singer, together with counsel and real estate brokers interested. A recess was taken for lunch and parties returned at one o’clock. The title company’s clerk made up a statement for settlement, showing that there was due from the buyers to the sellers the sum of $4,260.63, in addition to the amount of the purchase-money mortgage to be executed.

The sellers presented a duly executed deed and bill of sale to the buyers. After discussion concerning the name of the grantees therein, it was agreed that Mr. Charlton, attorney of the buyer’s, would prepare a deed conveying to Mrs. Singer, alone, the premises. This was done and the new deed duly-executed by the sellers.

It was disclosed that Mrs. Singer was unable to deliver the purchase-money mortgage as her husband was not present and could not be reached, and that she did not have sufficient money to make the final settlement.

The parties separated, and the only question for consideration is the claim on the part of the complainants that the defendants (the sellers) extended the time for settlement to some later and unfixed time.

I am convinced that this contention must fail, and that the defendant at all times insisted that settlement must be made that day in accordance with the contract. The testimony of Mr. Gardner, the assistant secretary of the title company, whcwas the clerk making the settlement, was “that the parties left the office of the title company with the understanding that Mrs. Singer was to prepare herself to complete said settlement before the close of that day, and, when so prepared, that she would deposit with the title company the money due, together with such legal papers as she was obligated to execute and deliver.”

This was the testimony also of other witnesses for the complainants. No bond and mortgage was deposited on that day, nor was the amount due deposited, although later, on the same day, one Stern presented himself at the title company’s office with $500 in cash, stating that he was making that deposit on account of the money due in said settlement, and that he would be back later in the day with the balance of said money.

This money was refused as a deposit, but, at Mr. Charlton’s request, Gardiner placed it in an envelope, sealed it and placed it in the safe of the company, where it remained until October 7th, 1925, when it was returned to Mrs. Singer. No other money was deposited, nor was any bond and mortgage presented to the title company, to be used in making settlement.

Later, at some period not before September 8th, 1925, the said Ida Singer was prepared to make settlement. Upon being notified then, or later, of such fact, the defendants refused to deliver the deed.

The contract between the parties expressly stated that time was of the essence, and cannot be ignored. Collins v. Delaney, 71 N. J. Eq. 320, and cases therein cited.

Finding that the defendants did not waive such right, and did not extend the time for making such settlement, the bill must be dismissed.

The complainants were in possession of the premises by virtue of á lease between the parties, and-1 granted an order restraining the defendants from further proceedings in the district court of Atlantic City for the purpose of dispossessing them.

This order must now be vacated.


author: Bentley, Y. C.

text:
    Genevieve G. Beattie et al., complainants, v. Willis K. Howell and Willis Washburne Howell, defendants.
    [Decided July 8th, 1925.]
    1. Where a bill asks for an injunction against violation of a restrictive covenant concerning land, and no such covenant exists, the prayer will be denied.
    2. A subsequent grantee can enforce a restrictive covenant concerning land against a prior grantee of another lot, but a prior grantee cannot, excepting where the purpose of the covenant is to carry out a general plan or scheme for the development of all of the original grantor’s property.
    3. Scull v. Eilenburg, 94 N. J. Eq. 759, distinguished.
    On bill, &c. On order to show cause why a preliminary injunction should not issue.

      Mr. Frederic B. Scott, for the complainants.

      Mr. Raymond G. Matthews, for the defendants.
   Bentley, Y. C.

In or about the year 1913 a development company acquired a small tract of land in the borough of Chatham and proceeded to divide it hito parcels for sale to the public. There was laid out, among others, a thoroughfare called Minton avenue, which, at its northerly end, was intercepted by an old existing highway called Main street, a short distance east of the business centre of the borough. It is upon this street that the property of the complainants is located. Some, if not all, of the complainants' have erected homes. In every instance the original grantor inserted in the deeds held by some of the complainants,, and through which the others took title, a restrictive covenant in which the grantee agreed, among other things, not to use “the said premises for any other purpose than a single or double dwelling.” Long afterward, namely, in 1921, the development company entered into a contract to convey three other lots to one Wulff. These last-mentioned lots do not face upon Minton avenue, but have a frontage on Main street, and only the most easterly of them abuts on Minton avenue; but they are very close to the lots owned by the different complainants. The contract provided for the payment of the purchase price by Wulff in installments, upon which he fell into arrears and finally escaped from his difficulty by securing a contract from the defendant Willis K. Howell to purchase the three lots which he was under contract to buy from the development company. Thereupon, the said company conveyed to Wulff, on December 20, 1924, and Wulff, in turn, conveyed to the defendant just named, who intends to erect upon the premises so obtained a building and the necessary equipment for the sale of fuel and oil to owners of automobiles and the performance of such ordinary service as a car may, from time to time, require, while being driven along the highway. In the two last-mentioned conveyances whereby this defendant acquired title, no restrictive covenant was included of the kind inserted in the deeds by or through which the complainants took from the common grantor.

The prayer of the bill is for an injunction to prevent the said defendant from erecting the proposed improvement or any other except “a single or double dwelling-house.” It is impossible to conceive of any theory upon which the prayer can be granted. In a nutshell, the difficulty may be expressed by saying- that the bill is framed to' enjoin the violation of a restrictive covenant when no such covenant exists. The complainants rely upon the pronouncement of the court of errors and appeals in Scull v. Eilenberg, 94 N. J. Eq. 759. In that case, however, both parties took title under deeds, each of which contained the agreement that was the basis of the suit, while here, as just pointed out, no such covenant appeared, either in the defendant’s deed or that through which he took. Without retracing the history of the rule, as was clone so elaborately by Vice-Cchancellor Green in De Gray v. Monmouth Beach Club House Co., 50 N. J. Eq. 329, it is sufficient to say that if the original grantor does not bind himself b3r a covenant such as the one under consideration, then his grantee, having no right of action against the grantor, cannot pursue any other grantee to whom the latter may subsequently convey the remaining land, either in whole or in part. A subsequent grantee can enforce such a covenant against a prior grantee of another lot, but a prior grantee cannot enforce the covenant against a subsequent grantee. Leaver v. Gorman, 73 N. J. Eq. 129. To this rule there is, however, an exception too well established in this state to be questioned, which permits a prior grantee to enforce the covenant against a subsequent grantee where the purpose of including the condition in the defendant’s deed, or one through which he takes with notice, is to carry out a general plan or scheme for the development of all of the original grantor’s property thus to be sold. It is within this exception that the complainants seek to bring themselves. The trouble is, however, that the exception is only applicable to those cases where the defendant takes title subject to a restrictive covenant in his deed, or with notice of such a covenant in the deed from the original grantor through whom he acquires title by mesne conveyances. In Scull v. Eilenberg, supra, the language of Mr. Justice Katzenbach (at p. 761) shows that the defendant’s as well as the complainants’ title was encumbered by similar restrictions. Eurthermore,. as Judge White pointed out in the concurring opinion, the covenant in that case expressly conferred the power to enforce the restriction by grantees, inter sese, by “the owner or owners of any lot or lots adjoining in the neighborhood of the premises hereby granted, deriving title from or through the said Chelsea Beach Compaq” (the common grantor). There is a sharp distinction in all the cases following Tulk v. Moxhay, 11 Beav. 571, such as Winfield, v. Henning, 21 N. J. Eq. 188, where there was a covenant for the benefit of the grantor (not grantee), and subsequent purchasers took i- the very same land, with notice thereof. In De Gray v. Monmouth Beach Club House Co., supra; Mulligan v. Jordan, 50 N. J. Eq. 363; McNichol v. Townsend, 73 N. J. Eq. 276; Leaver v. Gorman, supra; Henderson v. Champion, 83 N. J. Eq. 554, and a host of others, the difference between them and the case at bar is the same that renders inapplicable the decision in Scull v. Eilenberg, supra, namely, that there was a restrictive covenant in the deed or the chain of title through which the defendant took. There being no such restriction upon the defendant Willis K. Howell’s dominion over his property, an injunction should not go.

This makes it unnecessary to deal at length with the points advanced by the complainants as evidence of a general scheme having existed at the time they and each of them purchased. It may be that a gross fraud was practiced upon them by others, but there is nothing in the bill to show that the defendants, or either of them, even had any knowledge thereof, not to mention part therein. They are not responsible for fraudulent inducements held out by others to persuade the complainants to buy their land, even though the others were the officers and agents of the common grantor of all the parties, but respecting lands other than those purchased by the defendant Willis H. Howell.

The determination above expressed renders it unnecessary to discuss any other points advanced upon the argument by the defendants, or the allegations 'by the complainants of representations of “reasonable residential restrictions,” or collusion in the conveyance to Wulff.

The order.to show cause should be discharged and the restraint dissolved.


text:
    Samuel B. Feld, complainant, v. Reuben B. Kantrowitz et al., defendants.
    [Submitted July 24th, 1925.
    Decided July 31st, 1925.]
    1. As between an unrecorded instrument in favor of a tenant in an office building and a subsequent purchaser of the building without either knowledge or notice, for a valuable consideration, the mere fact of possession and occupancy of offices in the building does not put the subsequent purchaser on inquiry.
    2. Where one of two innocent people must suffer as the result of the wrongful act of a third party, and one of such persons has his own carelessness to thank for the situation in which he finds himself while the other is blameless, the position of the latter is the stronger.
    3. Where a contract of sale of real estate is made subject to a tenant’s lease, that fact, in the absence of anything to the contrary, warrants the assumption by the purchaser that the lease was the extent of the tenant’s interest in ihe real estate.
    On motion for temporary injunction made upon bill, answer and affidavits.

      Mr. Edward A. Weiss (Messrs. Ward & McGinnis, of counsel), for the complainant.

      Mr. Jacob A. Newman, for the defendant Rose Zueker.
   Bentley, Y. C.

On March 19th, 1925, the owners of a small office building in the city of Passaic contracted, in writing,- to sell the same to defendant ICantrowitz for the sum of $206,500. The complainant, together with Kantrowitz, one Weinberger, and three others, had previously, or at the time,' entered into an agreement to purchase the property, and pursuant thereto the contract mentioned had been taken in Kantrowitz’s name. Each of the beneficial owners was to pay one-sixth of the purchase price and incidental expenses, and each was to become the owner of an undivided one-sixth interest. Subsequently, on the 3d day of April, 1925, Kantrowitz assigned the contract to Weinberger, who thereupon purchased from each of the joint venturers, except the complainant, his respective share or interest in the contract. The complainant at that time paid to Weinberger his share of the deposit which had already been given to the owners and received from Weinberger an assignment of an undivided one-sixth' interest in and to the premises. Later on, Weinberger reassigned the five-sixth interest remaining in him to the defendant Kantrowitz, and the latter, on June 1st, 1925, without any warning to the complainant, assigned the contract for the entire property to the defendant Rose Zucker without any reservation of the assignment of the above-mentioned one-sixth to the complainant. Thus the complainant finds himself in the position where Mrs. Zucker claims the entire property subject to no rights of the complainant therein. Complainant now prays a temporary injunction restraining the present holders of the legal title from conveying, and Mrs. Zucker from accepting, title.

Inasmuch as the complainant never recorded his assignment, and Mrs. Zucker had no actual notice or knowledge thereof, her rights under the assignment of June 1st cannot be impeached, unless she is' chargeable with constructive notice by reason of the fact that the complainant, together with his partners, occupied offices in the premises under consideration. The complainant’s tenancy appears to have commenced about a year and a half ago, and, so far as the moving papers show, was the ordinary occupation of offices by a law firm. Other offices were occupied by others, and some stores on the first floor by merchants.

The rule of constructive notice created by possession of real property grew up at a time prior to the developing of the rather perfect recording statute that now exists in this state. It was said that fraud is the true ground in cases involving the doctrine of notice. LeNeve v. LeNeve, 1 Ves. 64. The same authority lays down the rule that it is fraudulent to get in the legal estate when it is known that the right was in another. So it has come to be the settled rule that ■open, notorious, visible, unequivocal, exclusive and uninterrupted possession is notice, and puts a purchaser dealing with the record owner under a duty of inquiry and constitutes constructive notice of everything he would have learned by inquiry from the person in possession. Wood v. Price, 79 N. J. Eq. 620. The authority just named, I think, puts New Jersey in the category of jurisdictions that have carried the notice implied from possession and occupation of 'land to its logical conclusion. But this rule, like any other, is to be applied, not blindly, but according to the surrounding circumstances affecting the rationale of the doctrine of notice.

In the case at bar there is not the simple transaction of the purchase of a dwelling-house or a farm or a piece of woodland with someone in visible occupation or possession thereof, but presents the case of a building constructed to .accommodate a considerable number of tenants, and which, in fact, was so occupied. The very purpose of the building is to permit the leasing of suites or stores to a number of 'independent persons and from the rent so acquired to establish an income for the owner. Under these circumstances to ■charge a prospective purchaser with notice of any right, title ■or interest of one of the tenants, beyond the right of tenancy would be absurd. While not so large or occupied by so many, I think that it might as well be said that one contemplating the purchase of one of the great office buildings 'in the metropolitan district would be under a duty to personally interview every one of the hundreds of tenants occupying the offices thereof. Can it be said that the rule should be extended to cover the purchase of a large hotel?

The correct statement of the doctrine under consideration ■discloses that by the authorities, as well as common sense, it was never intended that the rule should be extended to cover a situation such as the present one. Professor Pomeroy, in 'his Eq. Jur. § 620, says that for one to successfully impute notice to a subsequent grantee or encumbrancer “his possession must be an actual, open, distinct, notorious and. exclusive occupancy of the land in question. No mere occupation of the premises in common or in connection with a third person, and no mere exercise of acts of ownership equivocal in their nature over the land will then suffice.” Every author and every well-written opinion accentuates the fact that only exclusive and unequivocal possession will satisfy the rule. To like effect is Coleman v. Barklew, 27 N. J. Law 357, where it is said that the possession “must be actual, distinct and unequivocal. It must, moreover, be visible and manifested by notorious acts of ownership. Holmes v. Stout, 3 Gr. Ch. 492," and other authorities. In Cox v. Devinney, 65 N. J. Law 389, the chief-justice, in dealing with the present subject, said as follows:

“While the general rule is that possession of land is notice to a purchaser of the possessor’s right therein, nevertheless such possession, to be effectual as notice, must be not only exclusive and uninterrupted, it must also be open, notorious and visible.”

In Rankin v. Coar, 46 N. J. Eq. 566, the owner of an ordinary dwelling-house died intestate, and, subsequently, his widow released her dower to the only heir, and the same was recorded. Contemporaneously, the heir entered into an agreement with his mother, in writing, that she should have the use and occupation for life of the rooms then occupied by her in the premises aforesaid. This agreement was not recorded. Subsequently, the son executed a mortgage upon the property, and the mortgagee foreclosed. At the sale, under the fi. fa., the widow gave notice of her claim, and, subsequently, she filed a petition in the cause to have the rooms so occupied by her declared to be hers during her life by force of the agreement mentioned. The court of errors and appeals, unanimously reversing this court, held that her possession of the rooms then in question did not come within the true meaning of the doctrine:

“Possession, to give notice or to make inquiry a duty, must be open, notorious and unequivocal. There must be such an occupation of the premises as a man of ordinary prudence, treating for the acquisiton of some interest therein, would observe, and, observing, would perceive to be inconsistent with the right of him with whom he was treating, and so be led to inquiry.”

To the same effect is Holmes v. Stout, 4 N. J. Eq. 492; affirmed, 10 N. J. Eq. 419.

There is another feature of this case that would make it difficult to see how application of the doctrine under consideration could be equitably applied against Mrs. Zucker. When the contract of sale was executed between the record owners and Kantrowitz it was prepared in the office of the complainant’s firm and witnessed by one of the partners thereof and the same partner who now appears as solicitor of record for the complainant. While not appearing in the pleadings and proofs, it was not denied that the acknowledgment of the contract was made before the complainant himself. In that instrument it was recited that the premises were to be conveyed “subject also to the following leases and the terms and conditions therein mentioned.” Among the instruments referred to is the following:

“Lease Leld by Feld, Weiss & Feld for the term of five years covering rooms Nos. 3, 4 and 5 at the yearly rental of $1,200, which has been running for about one year, with privilege of renewals for five years.”

These lessees are the firm of which the complainant is the senior member. When Mrs. Zucker examined, and, finally, purchased the rights of Kantrowitz under this contract, it is fair to assume that any remote doubt there might have been in her mind as to the security of purchasing these premises without inquiry of the complainant, would have been dissipated by the provisions just recited. Her position is analogous to that of a purchaser who finds that the occupant’s possession of the land is not inconsistent with his rights as disclosed in the public records. In Wood v. Price, supra, the lease of which Price had notice had expired, and it was for that reason the court of errors and appeals decided that the exception to the rule did not apply.

I do not wish to put the decision of this case upon any such narrow point as the one just mentioned, but prefer to hold that, as between an unrecorded instrument in favor of a tenant in a building such as this, and a subsequent purchaser without either knowledge or actual notice, for valuable consideration, the mere fact of possession and occupancy does not put the subsequent purchaser on inquiry. It is elementary that when one of two innocent people must suffer as the result of the wrongful act of a third party, and one of such persons has his own carelessness to thank for the situation in which he finds himself while the other is blameless, the position of the latter is the stronger. Of course, it will be borne in mind that it is considered that the different character of the premises in question distinguishes this case, from the properties involved in any of the other cases upon this subject. Neither am I dealing with the right of a tenant as such, even in this kind of a building, that appears in his lease. And, above all things, this case is to be distinguished from any case in which it is shown that in airy other way the subsequent purchaser is not so in good faith and for valuable consideration.

All of the cases cited by complainant’s counsel are authority for the general rule which has been dealt with, but in none of them is there a state of facts similar to those to be found in the case sub judice. It is argued in complainant’s behalf that there was nothing to indicate to Mrs. .Zucker that the complainant had no interest in the property other than a leasehold. With that I have already dealt, and I think it is too clear to require any further argument that she was fully justified in supposing that one who undertakes to preserve his rights in a formal instrument will always be presumed to have protected all of his rights, and certainly has not been at the pains to safeguard the lesser, and leave the entire world in ignorance of the more valuable, Tight.

Complainant further says that, if Mrs. Zucker’s argument is sound, it would necessarily follow that she had the right to assume that Kantrowitz had never assigned the interest he acquired on March 19th, when the contract of sale was executed. In the absence of knowledge or notice she would have exactly that right. When one finds the title in another, and there is nothing to acquaint him with anything that that other has done to alienate or modify his title, the former is at liberty to assume that the title remains in the latter in the condition in which he received it. In the present instance Mrs. Zucker received no knowledge, and there was nothing to put her upon notice of any dealings by Kantrowitz with the subject-matter after he received it.

It is also said that because Mrs. Zucker did not content herself with what was told her about the premises by Kantrowitz, but went further and secured from one of the vendors detailed information as to such matters as the rents and- carrying charges, she should have gone further and inquired of the complainant as a tenant as to his rights. In view of what has already been said, this, of course, begs the question.

Finally, the complainant maintains that Mrs. Zucker is not entitled to take the entire property because she has not yet paid the entire purchase price, citing a paragraph in 39 Cyc. (at p. 1763). The difficulty with that position is that she has, in fact, paid the full purchase price required by her contract with Kantrowitz. She says in her affidavit that, on June 1st, 1925, before she had any notice or knowledge of the complainant’s claim, she repaid Kantrowitz the deposit he had paid to the vendor and “paid him a profit on said contract of $7,500.” In this she is corroborated by her attorney and by Kantrowitz.

The case made out by the complainants bill undoubtedly shows one in which he should be compensated by someone, but it does not show a state of facts in any way impeaching the good faith of Mrs. Zucker, either actually or constructively.

The result is that no interlocutory injunction will be advised, and in order that the views herein expressed may be carried out, the preceding restraint, including the injunctive order of July 27th, 1925, will be vacated.


author: Bentley, V. C.

text:
    The City of Bayonne, complainant, v. Passaic Consolidated Water Company, defendant.
    [Submitted September 30th, 1925.
    Decided October 2d, 1925.]
    1. Contracts with public utilities are upon an entirely different footing than those between individuals, and under the police power of .the state comparative convenience compels a disregard of such private rights in favor of the greater importance of securing to all members of the community fair treatment with regard to rates to be paid for necessary commodities and services dealt in by public utilities.
    2. Where a city contracted with a water company for a supply of water, and later applied to the vice-president of the water company for an assurance that it would continue to sell to the city, and received a written assurance, given after consultation with other officers, to the effect that the water company would be willing to contract with the city for a water supply at the same price it was then receiving, on the strength of which assurance the city expended large sums of money on improvement and development of its water mains, and later a much higher rate for water was fixed by the public utility commission as the rate to be paid to the water company for its water, such assurance in writing does not estop the water company from charging- the city for its water the rate fixed by the public utility commission.
    3. The price of water to be furnished a city by a water company should, ordinarily, be fixed by the public utility commission, and not by this court.
    On bill, &c.

      Mr. James Benny (Mr. Robert II. McCarter, of counsel), for the complainant.
    Messrs. Lindabury, Define & Faulks, for the defendant.
   Bentley, V. C.

In 1894 a firm contracted to supply the city of Bayonne with water for use by its inhabitants over a term of years, renewable for additional terms at the option of the complainant. The contract has been renewed, until now, if it is in force at all it will not expire before 1929, for one purpose, 1944. for another, and not then, the complainant maintains, if it elects to continue it in conformity with 'its provisions. This contract with the complainant was assigned by the above-mentioned firm in 1895 to the New York and New Jersey Water Company, and, subseqxrently, all the rights of the New York and New Jersey Water Company in the contract were assigned by it to the complainant, together with all the plant and other property connected therewith, in consideration of $2,017,000. Under the contract of 1894 it was the city’s right to take so much water as it might require, and pay therefor according to a schedule of prices, decreasing as the quantity consumed daily increased, so that for the quantity of water that Bayonne has purchased for some time ¡past the average rate due the defendant and its predecessor has amounted to about $19.50 per million gallons. This figure is by no means accurate, but has been assumed for the sake of convenience at the final hearing. In 1895 the East Jersey Water Company entered into another contract with the New York and New Jersey Water Company to furnish the latter with water for sale to Bayonne and others, in return for which the East Jersey Water Company was to receive thirty-five per cent, of the gross receipts paid by Bayonne to the New York and New Jersey Water Company for such supply.

The two water companies in 1902 made still another contract, under the terms of which the New York and New Jersey Water Company was permitted to sell the water furnished by the East Jersey Water Company to any customer it could obtain within the territorial limits of Hudson county. For this supply of water delivered to customers other than Bayonne the East Jersey was to be paid by the New York and New Jersey Water Company $30 per million gallons, plus one-half of any amount above that sum charged to the consumer bv the New York and New Jersey Water Company. Under this contract, the New York and New Jersey Water Company entered into relations with a number of corporations doing business outside of Bayonne.

The rights of the New York and New Jersey Water Company, under all of these contracts, passed to Bayonne under the assignment of 1918, so that from that time forward Bayonne stood in the shoes of the New York and New Jersey Water Company for all purposes of this suit.

While the complainant was considering the advisability of purchasing the rights of the last-named water company, and before the execution of the contract of 1918, it occurred to someone that the position of Bayonne would be a sorry one if, after concluding its bargain with the New York and New Jersey Water Company, the East Jersey Water Company, controlling the supply, should decline to do business with the city, or, perhaps, demand an exorbitant price for its water. To guard against such a contingency a gentleman named Reichhelm, who had been officially appointed as an appraiser by the governing body of Bayonne, accompanied by one Annett, who had actively lent his services to the public officers of Bayonne in the serious attempt to improve the service of supplying water to its people, called upon one of the vice-presidents of the East Jersey Water Company and {sought an expression of the intention of that company in regard to the premises .just mentioned. The vice-president felt himself to be unauthorized to bind the corporation, but promised to take the matter up and have an authoritative statement made by someone in authority. Shortly thereafter, on January 6th, 1917, the president of the company wrote to Reichhelm as follows:

“You asked whether the East Jersey Water Company would be willing to sell water to Bayonne, if for any reason they had no contract relations with the New York and New Jersey Water Company.
“We have no desire to in any way interfere with the relations between the New York and New Jersey Water Company and the city of Bayonne, but, of course, we are in the water business, and it would be manifestly against our interest if Bayonne should seek a water-supply elsewhere; and, therefore, I think I am justified in saying that if the relations of Bayonne with the New York and New Jersey Water Company were severed [which would, of course, relieve our company from its obligations to the New York and New Jersey Water Company in respect to the supply of water to the city of Bayonne], the East Jersey Water Company would be willing, in that event, to contract with Bayonne for water at the same price we are now receiving from the New York and New Jersey Water Company; the water to be taken at the same location.
Yours very truly,
Edmund EeB. Gaedneb.”

The contents of this letter was delivered to Bayonne’s governing body by Reichhelm, and the members thereof were thereby, in large part, persuaded to vote for the execution of the contract of 1918. As a part of the entire transaction, Bayonne found it necessary to construct a new water main vat a cost of approximately $2,000,000, bringing its investment up to $4,000,000, in reliance upon the representation of the foregoing letter.

In 1922, after the last-mentioned contract had been executed, the East Jersey Water Company and four other similar companies filed with the board of public utilities commissioners a schedule of proposed new rates to he charged their customers for water supplied. As the result of the hearing thus precipitated, that board made an order fixing the sum of $78 per million gallons as the rate to be paid by Bayonne to the East Jersey Water Company, notwithstanding the contract under which the city had previously secured its water at an average cost of about $19.50 per million gallons. This order was affirmed on certiorari by the supreme court, and that judgment, in turn, affirmed by the court of errors and appeals.

If such a course of dealing had existed between two private individuals with regard to some ordinary commodity of commerce, it would appear to be a typical case for relief in this court.

“Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both, at law and in equity, from asserting rights which might perhaps have otherwise existed, either of property, of contract, or of remedy, as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who, on his part, acquires some corresponding right, either of property, of contract, or of remedy.” Pom. Eq. Jar. § 80J¡.

It is unquestionably true that Bayonne disbursed $4,000,000 upon a project that would never have been consummated but for the conclusion that the highest officer of the East Jersey Water Company intended should be drawn from his letter of January 6th, 1917. I am not impressed by the argument of defendant’s counsel that Gardner only intended to say and convey to the board of commissioners of Bayonne that the company would be willing to treat or contract with the complainant for the continuation of a supply of water. The strict literal interpretation of the language of the letter might, to some extent, support an argument to that effect, but when the surrounding circumstances are considered, as well as the phrase “same price we are now receiving,” it is apparent that he either intentionally or carelessly led the municipality into a false belief that in considering the financial aspect of the then pending transaction they might count upon a continuing cost for the water necessary at a rate of about $19.50 for a long period .of time, provided they continued to consume not less than 15,000,000 gallons per day; and it is, of course, common knowledge that the consumption of water in all cities such as Bayonne is increasing rapidly, and will probably never be decreased below the amount that was used eight years ago.

Unfortunate and hard as the situation of Bayonne is, however, I do not. see how relief can be afforded it. The elaborate collection of authorities in the brief of defendant’s counsel has convinced me that Bayonne is remediless so far as any constitutional guarantee is concerned. The courts of this state, of the United States and of many of our sister states have repeatedly and consistently placed the consideration of contracts with public utility bodies upon an entirely different footing than those of other contracts protected by section 10, paragraph 1 of article 1 of the United States constitution, or the fourteenth amendment thereof. It appears to be the consensus of the courts, with negligible exceptions, that under the police power of the state comparative convenience compels a disregard of such private rights in favor of the greater importance of securing to all members of the community fair treatment with regard to rates to be paid for necessary com-modifies and services dealt in by public utilities. The establishing and enforcing of a preferential rate in favor of one or more individuals would, of necessity, require the utility, if it is to live, charging correspondingly unfair, higher rates to others to offset the losses so sustained. This defense interposed by the defendant is fortified by innumerable decisions, among which may be mentioned: Chicago, Burl. and Quincy Railroad v. Nebraska, 170 U. S. 57; Louisville and Nashville Railroad Co. v. Mottley, 219 U. S. 467; Producers Transportation Co. v. Railroad Commission, 251 U. S. 228; Union Dry Goods Co. v. Georgia, 248 U. S. 372; Cortelyou v. Anderson, 78 N. J. Law 427; Atlantic Coast, &c., Co. v. Board of Public Utility Commissioners, 89 N. J. Law 407; reversed in 92 N. J. Law 168; Collingswood Sewerage Co. v. Collingswood, 91 N. J. Law 20; affirmed in a per curiam opinion in 92 N. J. Law 509; Edison Storage Battery Co. v. Public Utility Board, 93 N. J. Law 301.

With this position the complainant does not quarrel, but insists that the application of the doctrine of estoppel is a different thing. That avenue, too, appears to have been closed by equally compelling authorities. In Louisville and Nashville Railroad Co. v. Mottley, supra, the plaintiffs were injured by the defendant’s railroad. They subsequently compromised their claim for damages in consideration of an agreement by the railroad company to provide them each with free passes over its road and branches during their lives. This agreement was carried out by the railroad company over a period of years, until the adoption of the Interstate Commerce act by the national congress. Although this contract was made many years before the passage of the act of June 29th, 1906, which makes it very similar to the present situation, nevertheless, Mr. Justice Harlan, delivering the unanimous opinion of the supreme court of the Hnited States, said: “We forbear any further citation of authorities. They are uumerous and are all one way. They support the view that, as the contract in question would have been illegal if made after the passage of the Commerce act, it cannot now be enforced against the railroad company, even though valid when made. If that principle be not sound, the result would be that individuals and corporations could, by contracts between themselves, in anticipation of legislation, render of no avail Ihe exercise by congress, to the full extent authorized by the constitution, of its power to regulate commerce. No- power of congress can be thus restricted. The mischief that would result, from a different interpretation of the constitution will be readily perceived.”

In Manigault v. Springs, 199 U. S. 473, the defendants maintained that the adoption of an act by the legislature of South Carolina impaired a contract into which they had entered several years before. Nevertheless, the court said, at page 480 of the opinion: “It is the settled law of this court that the interdiction of statutes impairing the obligation of contracts does not prevent the state from- exercising such powers as are vested in it for the promotion of the common weal, or axe necessary for the general good of the public, though contracts previously entered into between individuals may thereby be affected. This power, which, in its various ramifications, is known as the police power, is an exercise of the sovereign right of the government to- protect the lives, health, morals, comfort and general welfare of the people, and is paramount to any rights under contracts between individuals. Familiar instances of this are where parties enter into contracts, perfectly lawful at the time, to sell liquor, operate a brewery or distillery, or carry on a lottery, all of which are subject to impairment by a change of policy on the part of the state, prohibiting the establishment or continunnce of such traffic; in other words, that parties, by entering into contracts, may not estop the legislature from enacting laws intended for the public good.”

If the state may pass such laws, I am at a loss to see how this court, with all its broad powers, may nullify such statutes because one party has been misled and thereby finds itself in a worse position than would otherwise have been its lot. When a party embarks upon an undertaking as the result of transactions, contracts or representations with o-r by a public utility, he is bound by the power of the state, whether yet expressed in a statute or not. This policy which, in the language of Mr. Justice Brown in the Manigault Case, “is the settled law” of the United States supreme court, entitled, as Mr. Justice Swayze said in Atlantic Coast, &c., Railway Co. v. Board of Public Utility Commissioners, supra, to speak the last word in causes of this sort, precludes me from advising any relief to the complainant upon this phase of the case.

Some faint argixment is attempted in the complainant’s brief, to the effect that what I have said should not operate in the case at bar, because the East Jersey Water Company was not, in fact, a public utility. I am at a loss to understand how I am to say so, in view of the opinion of the court of errors and appeals to the contrary in East Jersey Water Co. v. Board of Public Utility Commissioners, 98 N. J. Law 449.

The next position taken by the complainant is, that since the order of the public utility board the defendant has disposed of a considerable percentage of its property, and that, consequently, a revision of its rates should now be made. I should have said, in the discussion of the facts, that when the application was made in 1922 to the board of public utility commissioners for an increase in the rates charged to consumers’ by the East Jersey Water Company and four others, these five corporations were co-operating in the service of a large area of northern New Jersey. Subsequently, they were consolidated into the defendant, the Passaic Consolidated Water Company. In the proceedings before the board the position was assumed and argued on behalf of the water companies that by reason of common holdings, such as a pumping station, a filtration plant, storage basin, and transmission system, the system of the combined companies was one entity, as, in fact, it subsequently became upon the consolidation just mentioned. After the decision of the board had been rendered, the defendant sold to the town of Montclair so much of its system as lay therein. For this, it was paid $1,700,000. Of this amount, $500,000 were used for extinguishing bonds that were a lien upon the property sold, and the remaining $1,200,000 divided as a dividend among the stockholders of the defendant company. Consequently, it is argued that there should now be a different rate established becaxtse the utility board based the rate upon the value of the company’s' assets, and those assets have been reduced from $11,500*000 to $9,800,000. Whether this transaction would affect the rate imposed upon Bayonne I cannot, with any confidence, say, because no evidence was given upon the subject. But that inquiry should be made by the board, and not by this court. While it is not to be presumed that the legislature intended to invade the constitutional jurisdiction of this court in the passage of the Public Utility act, consideration must not be lost of the advisability of leaving to the attention of the utility board rate-making proceedings for the conduct and decision of which it has been abundantly and elaborately supplied by appropriations with the necessary assistants. I do not mean to say that there is no inherent jurisdiction in the court of chancery to fix rates under certain circumstances where jurisdiction of a cause is obtained under one or more of the well-established principles of equitable jurisprudence; and it may be that, under our ideas of justice, a case could arise in which a rate for some public utility ought to be made by this court, but in the present instance we have a typical contest between a utility corporation and one of its customers, as to what’ the latter bhould pay for the service performed. It would be a severe burden upon the court of chancery if, in every such dispute where the same could be coupled up with some equitable doctrine, the parties might come into this court with their respective arrays of experts and seek to have the court of chancery exercise the function of a rate-fixing tribunal.

Neither does it appear that the defendant should be longer enjoined from proceeding with its action at law for the collection of back differences between the rate established in the contract of 1894 and that fixed by the public utility board in 1923. The prosecution of this action has been stayed by an interlocutory injunction which was granted on condition that the defendant therein would withdraw its answer if unsuccessful in this litigation. In 1925, after the court of errors and appeals had affirmed the judgment of the supreme court confirming the order of the public utility board, the complainant filed a petition with the last-mentioned body, praying a rehearing because of the Montclair sale. The decision of the board was that this was not the proper subject for a rehearing, but intimating that the practice requires an original petition, instituting an entirely separate proceeding. This was a clear indication to the complainant to thresh out the question thus presented. This course of action has always been available to the city, and it cannot now complain that it will be placed under a heavier burden than it thinks it should sustain while it seeks the remedy held out to it, and which it has not thus far pursued.

I do not consider the opinion of Vice-Chancellor Lane, in Bayonne v. East Jersey Water Co., 108 Atl. Rep. 121, of any assistance in the case at bar. In the former case the parties ¡jointly submitted to him the contracts underlying the present case, and sought an exposition of their respective rights therein under the seventh section of the Chancery act of 1915. Not a word appears in the opinion to show that the vice-chancellor considered the questions raised in the case sub judice, and it is not to be presumed that he would have disregarded questions of such great moment had they been submitted to him. He, of course, decided only those questions which were presented.

Neither can I follow the complainant in its argument as to the effect of the so-called pumping contract. It contemplated service to it, as a member of the general public, by a public utility corporation, upon which it was entitled to no ¡preference of rates at the expense of other members of the public served by the same concern.

In view of what has been said, other matters argued by the respective counsel call for no determination. I will'advise a decree dismissing the bill, which will necessarily carry with it a dissolution of the temporary injunction; but, of course, I will not leave the citizens of Bayonne at the mercy of the defendant, and will, therefore, stay the effect of the decree pending the determination of the appeal, so far as the threat of the defendant is concerned, in its letter of June 1st, 1925, namely, the discontinuance of Bayonne’s supply of water for non-payment of current charges.


text:
    James Bowen, complainant, v. George A. Pursell et al., defendants.
    [Submitted October 6th, 1925.
    Decided October 16th, 1925.]
    1. Where a contract for the sale of lands is drawn by one of the parties and transmitted to the other party with a check for the down payment and executed by the second party on Sunday, but not delivered -back to the first party until Monday, the contract is completed upon the latter day and is not void on account of the statute.
    2. Where one of several tenants in common, not authorized-by the other tenants in writing, grants a right to fish in a stream, by parol, it is a right at will only, if made for more than three years, by reason of the first section of the statute of frauds.
    On bill, &c. On motion to strike out an answer and counter-claim.

      Mr. Edward P. Sioui, for the complainant.

      Mr. Osiris P. McConnell, fox the defendants.
   Bentley, V. C.

On April 3d, 1925, the defendants were the owners, as tenants in common, of a farm threaded by a trout brook, and entered into an agreement to convey the same to the complainant for the sum of $6,000. On that date the complainant executed and acknowledged a contract for that purpose and remitted the same to the defendants, with his check for amount of deposit agreed upon. On April 5th, which was Sunday, the defendants executed and acknowledged the contract, and on the following day delivered one of the duplicate copies to the complainant’s attorney. The contract, by its terms, was, in all respects, valid and enforceable, except for the effect to be given to the execution of the same upon the Sabbath.

It is argued by the defendants’ counsel that the contract stood complete immediately upon the defendants signing it and the acknowledgment by those of them who were married women. With this reasoning I am unable to agree. It would seem to me that, until they had completed the transaction by delivering back to the complainant a properly-executed copy of the agreement, that they were in no sense bound. The defendants concede that, ordinarily, a contract required to be in writing is not complete until the writing is delivered, but they say that where there is a mutual intention to the contrary the contract is effected immediately upon execution by all the parties, and rely upon Fitzgerald v. Metropolitan Life Insurance Co. (Supreme Court of Vermont), 98 Atl. Rep. 498. The contract under consideration, which, of course, was required to be in writing, provided that the complainant should have possession upon the signing' of the contract, and upon this slim foundation is built the argument that the parties intended the signing to complete the transaction. In ordinary negotiations of this kind the contract is prepared and executed simultaneously by all the parties, in which event each one receives his copy thereof and departs about his business. Under those circumstances, delivery is contemporaneous with the signing, and the contract is complete. But in a ease like the present one, where an understanding is arrived at, and one of the parties is to prepare the formal evidence thereof at a distant place and transmit the same to the other for execution, it is only fair that the former should not be bound by the action of the latter until he is properly apprised thereof by delivery back to him of an executed copy. Otherwise, he would be in ignorance as to the rights or obligations thereunder. He would not know that the other had completed the bargain and bound himself, or whether he had altered it. He would be left in darkness as to all the conditions he would have to meet at the time fixed for passing title. Every dictate of fairness would seem to require delivery of such a contract.

The second point presented arises out of the following facts and circumstances: At the time the negotiations were had for the sale of the farm, one of the defendants informed the complainant that one Green had been granted a right by one of the tenants in common to fish the trout brook for a period of ten years from April 1st, 1923. Thereupon complainant’s counsel, in effect, advised the defendants that the agreement granting such fishing rights was invalid, and thereupon the defendants, relying upon the advice of complainant’s counsel, consented to enter into the contract, which is the basis of this suit.

I am unable to agree with counsel for complainant that a mutual mistake of law is not sufficient ground upon which to annul a contract. The subject is an intricate one, and, for reasons which will become apparent, there is no reason to enter upon a discussion of the doctrine which is accurately set forth in Pom. Fq. Jur. §§ 841 el seq. But the doctrine of mistake is not involved, for the reason that no mistake is made to appear. It is elementary that one tenant in common cannot bind the others by such an agreement as the one under consideration, either oral or written, except when he acts as the duly authorized agent of the others. Boston Franklinite Co. v. Condit & Torrey, 19 N. J. Eq. 394. The first section of the statute of frauds and perjuries (2 Comp. Stal. p. 2610) requires that “any uncertain interest of, in, to or out of any messuages, lands, tenements or hereditaments” shall be in writing, “and signed by the parties so making or creating the same, or their agents thereunto lawfully authorized by writing.” In Cobb v. Davenport, 33 N. J. Law 223, and Albright v. Cortright, 64 N. J. Law 330, it has been decided that the only mode of acquiring a right of taking a profit on another’s soil is by grant or prescription, which, of course, implies a grant. Therefore, the attempted fishing agreement of Green’s falls, by reason of the fact that no grant in writing, signed by the parties, “or their agents thereunto lawfully authorized by writing” (2 Comp. Stat. p. 2610), is pleaded in the answer or counter-claim.

To meet this situation, defendants’ counsel then takes the position that if there was no authorization in accordance with the statute for the execution of the fishing agreement with Green, there was a sufficient ratification by the other tenants in common to take the matter out of the statute. The difficulty with this was dealt with by the court of errors and appeals in Clement v. Young-McShea, Amusement Co., 70 N. J. Eq. 677. The statute of frauds converts any interests in land, not put in writing and signed by the parties or their agents authorized in writing, into leases or estate “at will only.” Therefore, when the co-tenants accepted the benefits of the fishing agreement with Green, they had a right to suppose that his interest did not exceed the quantity circumscribed by the statute, and that he had what he now has, namely, a right, terminable at the will of the grantor or his successor. In Clement v. Young-McShea, supm, a lease was signed for a period of ten years by an agent who was not authorized so to do in writing. The lessees filed a bill to enjoin the agent’s principal from the prosecution of an action of ejectment, and pleaded therein the aforementioned lease. Upon an application of the statute of frauds, the lessees contended that the principal was barred, in the eyes of this court, under the doctrine of notice. The court of errors and appeals (at p. 683) say:

“The company must, undoubtedly, be charged with notice that the complainants were in possession of the premises occupied by them and were paying rent therefor to Young. But this was all consistent with the idea that they had become tenants under the authority actually vested in Young.

So, in the case at bar, it must be assumed that the defendants knew that Green was exercising the right of profit a prendre. But this, in the language of Mr. Justice Dixon in the opinion just mentioned, was entirely consistent with the brief that the managing tenant had invested Green with no greater right than he was legally authorized to do.

Eor these reasons, it is inconceivable that the defendants could prevail if this matter should go to final hearing and they were able to prove every allegation of the answer. The counter-claim being based upon a like set of facts, it is equally clear that, as counter-claimants, they could not obtain the relief sought under the completest proofs of the allegation of that instrument. Consequently, the provisions of section 4 of the Chancery act, 1915 (P. L. 1915 p. 185), should be enforced. This, of course, disposes of the subsidiary argument as to the right of the defendants to implead Green as a party. So -far as Green’s rights are concerned, this decision will not bind him.

I will advise an order striking out the answer and counter-claim.


text:
    Charles Muller, complainant, v. Charles P. Cox et al., defendants.
    [Decided October 30th, 1925.]
    Where a will provided' that the executor should convert the estate into cash, and, after paying debts, give the cash to the testatrix’s sister, and there wasl testimony to show that the sister stated that she held the fund in trust for the testatrix’s husband, if or when he should return to his former home, such trust, if it existed, givesi the beneficiary a merely contingent interest, not a vested one, and not subject to the husband’s debts, on a creditor’s bill filed when he was still absent from' his former home.
    On bill, &e.

      Mr. John J. Marnell \Mr. Julius IÁchienstein, of counsel) , for the complainant.

      Messrs. Melosh, Morten & Melosh (by Mr. Louis G. Morlen), for the defendants.
   Bentley, V. C.

This is a creditor’s bill to reach funds in the hands of the defendant, said to be held in trust for the judgment debtor.

In September, 1920, one of the defendants, .Cox, being indebted to the complainant, deserted his wife, Ellen, and disappeared. Neither she nor any of her acquaintances have ever heard from him since. His wife appears to have made very strenuous efforts to find Cox for a considerable period of time after his disappearance. On the 24th day of October, 1920, his wife executed her will. The important paragraph, disposing of all her property, took the following peculiar form:

“I direct my executor, hereinafter named, to convert all my estate, real, personal and mixed, into cash, and after paying my just debts to give said cash to my sister, Mary Cox.
“I nominate and appoint Sidney Jacobs as executor of this will, and I give to my executor full power and authority to grant, bargain, sell and convey, in fee-simple or otherwise, any or all of my real estate to any person or persons ait public or private sale, at such times and upon such terms as he shall think fit.”

The testatrix died in August, 1924. She never bore any children. Three witnesses were sworn by the complainant, who testified that they had on various occasions heard the testatrix say that Mary Cox, who will hereafter be called the defendant, had promised that she would turn the proceeds of the former’s estate over to Cox if or when he should return. The first of these witnesses was a Mrs. Bliss, who is a sister of Cox. The other witnesses were, like Mrs. Bliss, intimate 'friends of the decedent, and thej’' all testified to substantially similar statements, all of which were made in the presence of the defendant, who was the sister of the testatrix. These sisters had married two brothers, and thus the identity of their surnames is explained. The defendant denies that she was the recipient of her sister’s bounty, upon the condition just described, but maintains that the legacy from her sister was unconditional, except that she was requested if Cox ever returned to supply him with the neeessaries of life, but under no circumstances to permit him to lay his hands upon any property so left by the testatrix because of his incompetence, and his desertion and apparent disregard of her feelings. Without going into a detailed statement of the reasons for it, many circumstances lead me to believe that the witnesses for the complainant are accurate in the facts to which they swear. Admissions made by the defendant on the stand, her demeanor, the extreme reluctance to appear and clear her name of the gross fraud against her, the discrepancy as to the date of the execution of her will with reference to the execution of Ellen’s will, the documentary contradiction of her testimony concerning who paid the scrivener, and the absence of a copy of her first will, in view of the lawyer’s practice, all combined are so convincing as to meet the rule expressed by Mr. Justice Van Syckel in Williams v. Vreeland, 32 N. J. Eq. 734 (see p. 737). No matter what the state of the law maj^ be elsewhere, it is clear that since the rendition of the foregoing decision such a bill as the one herein will lie.

This brings us to a consideration of the law upon the question raised, as to whether or not .the verbal trust be.stowed upon Cox a vested or a contingent right. If 'Cox, the debtor, has a vested interest in the proceeds of the estate of his wife it is subject to the payment of his debts. 39 Gyc. 237, and authorities there quoted. If, on the contrary, the rights of the debtor are contingent, and the fund may never be enjoyed by him, the rule is otherwise. Bank v. Forney, 37 N. C. 181. I have been unable to find any authority directly in point, and shall determine this question in the manner it has been attacked by counsel for all parties, that is, by analogy to the pertinent rules for the construction of wills, by reason of the fact that the testatrix spoke in contemplation of the distribution of her property after death. In Gifford v. Thorn, 9 N. J. Eq. 702, there was a bequest to one “when he arrives at the age of twenty-one years, to him and his heirs forever.” The chief-justice, writing the opinion of the court of chancery, where he sat for the chancellor, who felt disqualified to decide, said:

“The general rule applicable to this question, adopted both in the ecclesiastical courts and courts of equity, is. well settled. Where the time specified in the bequest is annexed to the payment only, as where the legacy is given, payable or to be paid when the legatee attains the age of twenty-one years, the legacy 'vests immediately upon the death of the testator. It is a present gift. The time of payment only is postponed. But where the time is annexed not to the payment only, but to the gift itself, as when the legacy is given to the legatee at twenty-one, or ‘if* or ‘when* he attains the age of twenty-one, the legacy does not vest until the legatee attains that age. The gift is upon the condition that the legatee shall attain the age specified. His attaining that age is a condition precedent, and if the condition be not fulfilled, the legacy never vests. The cases upon this subject are very numerous, and with few exceptions the rule will be found to have been for more than a century inflexibly maintained.*’

Mr. Justice Potts stated the rule for the court of errors and appeals as follows, at page 129:

“How, it has been repeatedly held, and seems at this day to be the settled law, that where the bequest made to a legatee is in these, or words of similar meaning, without being controlled by the context of the will, they imply a condition precedent, to wit, that the legatee live to that age, and, consequently, the legatee does not take a vested interest in the legacy until twenty-one. I give and bequeath to A. B., ‘at the age of twenty-one* — or, ‘if he arrives at twenty-one* — or, ‘provided he lives to be twenty-one* — or, in case of his arriving at twenty-one’ — or, when he arrives at the age of twenty-one* — have all been held to be contingent legacies.”

Of course, the rule that favors the vesting of a legacy or devise causes the general rule to be circumscribed so that “circumstances, even though but slight, in the context, may be sufficient to show that the specified age was not intended as a condition, but only fix the time of payment, in which case it will be held to be a vested legacy.” Fisher v. Johnson, 38 N. J. Eq. 46. There are no indications in the directions given to. the defendant by Ellen to show the immediate vesting of the trust estate in Cox. There is no provision for the benefit or convenience of the .estate; there is no direction to invest the funds in the defendant’s hands, nor was there any purpose of keeping a family of infants intact. In short, there is nothing to be gathered, either from the injunction laid upon the defendant or any of the surrounding facts and circumstances to bring the case within the exceptions to the rule, as has appeared in all or nearly all of the cases where a vested and not a contingent interest was found to have been established. Therefore, it seems to me that, under the rule “inflexibly maintained,” it must be said that his interest is contingent and may never vest. Taking the testimony of complainant’s own witnesses, the defendant was only to pay over the proceeds of the estate of the testatrix “if” or “when” Cox should return to his former home. I fail to see how this condition could be said to relate to the time of payment. It was clearly connected with the substance of the gift, because Mrs. Bliss said that Ellen wanted the proceeds of her estate given to her sister (the defendant) so that she could give the same to Cox if he returned, “because she was sure he would be found; that she was sure he was alive.” Of course, the witness was paraphrasing the language of Ellen, and it is equally certain that neither Ellen nor anyone connected with the transaction could be sure that he was alive, or that he would ever be found. In the dead woman’s mind “the wish was father to the thought,” as evidenced by her long but fruitless quest. She hoped that he might be alive and well, and some day return to the place of his rightful home, but this was no more than a hope. She had searched at great pains and expense, hither and yon, wherever there appeared the slightest probability he might be found. To say that she delivered her property to the defendant with any assurance in her mind that the latter would be able to carry out her instructions, is ridiculous. To say, under these circumstances, that the contingency she had in mind related to the time of payment and not to the substance of the gift would be equally ridiculous. The use of the words “if” or “when,” of necessity in themselves, indicate a contingency, as pointed ont by the long line of cases cited in Gifford v. Thorn, supra, and the innumerable citatioiis thereof down to, at least, as late as the opinion of Vice-Ordinary Baches in Roberts v. Comptroller, 85 N. J. Eq. 133. The condition upon which enjoyment of such a gift may relate either to the substance of the gift or the time of payment thereof, but for the reason just indicated, I am driven to the belief that Ellen intended that her bounty should eventually be enjoyed by her missing husband, provided he should return from his wandering, otherwise to be the property of the defendant and her assigns.

Of course, the directions which the testator gave the defendant formed no part of her will. An act concerning wills (4 Comp. Stat. p. 5860) renders that out of the question. The theory underlying wills such as the one under consideration is founded upon the single ground of impressing a trust upon the funds in the hands of a legatee. Heinisch v. Pennington, 73 N. J. Eq. 456. Consequently, there is no question of intestacy. We are not faced by that casuistical rule which declares that the law abhors intestacy, and which has worked more hardships and injustice than any other rule of law with which I am familiar. The legacy vested in the defendant immediately charged, however, with the conditions upon which it was given and received and subject to be divested upon the happening of the contingency described.

There being no- question of Ellen’s right to dispose of the property out of which this fund ivas created, or any attempt to prove that it was the property of the judgment debtor at the time the testatrix died, I feel constrained to advise a decree dismissing the bill.


author: Berry, V. C.

text:
    Victor Dellacorte, complainant, v. Jean Gentile, also known as Virginio J. Gentile, and Jeanne Beauty Shoppe, Incorporated, a corporation, defendants.
    [Heard June 9th, 1925.
    Decided June 11th, 1925.]
    Where A made a covenant, on sale of his barber business, that he will not engage in any branch of the barber business within one mile of a certain place, the opening' of a beauty parlor within the restricted territory, part of whose business is the cutting and bobbing of ladies' and children’s hair, is a violation of that covenant not to engage in any branch of the barber business, and will be enjoined.
    On bill, &c. On order to show cause-.

      Mr. Jacob R. Mantel, for the complainant.

      Mr. John Larkin Hughes, for the defendants.
   Berry, V. C.

This is an application for a preliminary injunction restraining the defendants from engaging in any branch of the barber business at No. 390 Springfield avenue, Summit, New Jersey, or at any other place within one mile of No. 13 Maple street, in said city. The matter was heard on the return of ail order to show cause.

The bill and affidavits and answering affidavits show that prior to May 8th, 1922, the defendant Jean Gentile conducted a barber shop at No. 13 Maple avenue, Summit, New Jersey, and on that day sold the barber business, including fixtures and good-will, to one Paula Tally, for the sum of $2,500. The bill of sale by which said business and good-will were transferred by Gentile to Tally, and a copy of which is attached to the complainant’s bill, contained the following covenant :

“The party of the first part hereto hereby agrees that he will not, directly or indirectly, either as employer or employe, engage in any branch of the barber business within a radius of one mile from No. 33 Maple street, Summit, New Jersey, for a period of five years from the date hereof.”

Appropriate provisions extending the rights of the vendee to her executors, administrators and assigns, were also included in the bill of sale.

On May 8th, .1924, Paula Tally, the vendee named in the bill of sale, sold said business, fixtures, good-will, &c., to the complainant, Victor Dellacorte, who thereupon succeeded to all of the rights of Tally under said bill of sale.

On or about February 24th, 1925, the defendant Jeanne Beauty Shoppe, Incorporated, was incorporated under the laws of the State of New Jersey by Jennie Gentile, the wife of the defendant Jean Gentile, Albino Colalillo and Bernardino Gentile, cousins of the defendant Jean Gentile. Of the authorized capital stock of this company there is issued and outstanding a total of fifty-two shares, of which Mrs. Gentile holds fifty shares and the two cousins one share each.

On or about April 1st, 1925, the defendant corporation opened a beauty parlor, so-called, at No. 390 Springfield avenue, Summit, New Jersey, which is a distance of about two hundred and fifty feet from No. 13 Maple street in said city, and installed the defendant Jean Gentile therein as manager, and has since conducted its business there under the supervision and direction of the defendant Jean Gentile. As part of the business conducted in that establishment, it is alleged that ladies’ and children’s hair is cut and bobbed. The answering affidavits admit the cutting and bobbing of ladies’ hair, but deny the operation as applied to children’s hair. The defendants also claim that such cutting and bobbing of hair as is done in the Jeanne Beauty Shoppe is merely a part of the defendants’ business of “beauty specialists,” and is in no sense a branch of the barber business, and is not in violation of the covenant contained in the bill of sale above recited. On the other hand, the complainant claims that the cutting and bobbing of ladies’ hair is a well-recognized branch of the barber business, and that its practice in the defendants’ shop is in violation of said covenant.

At the oral argument on the return of the order to show cause, counsel for defendants cited the Latin root of the word “barber” in support of his argument that the barber business does not include the bobbing of ladies’ and children’s hair. I then stated, and now repeat, that, in my judgment, recourse to the dead language is not necessary to determine if, in this flapper day and generation, the bobbing of ladies’ hair is or is not a branch of the barber business. In my opinion, the bobbing of ladies’ hair is a distinct and important part of the business of a modern barber shop, as much as, or more than, was cupping a branch of that business in ancient times. It is not uncommon to-day to see members of the female sex occupying chairs in barber shops having their hair bobbed in an effort to keep pace with the ever-changing styles. This is a common and ordinary occurrence.

My examination of the authorities discloses that the word “barber” is derived from the Latin root "barba/’ meaning “beard,” and the Standard Dictionary defines the word “barber” as “one who makes a business of shaving and trimming the beard, and cutting and dressing the hair.” “Barbering” is defined in 7 Corp. Jur. (at p. 919) as “the act of one whose occupation is to shape the beard and cut and dress the hair of others.” Apparently, the word “others” applies alike to the long-haired male and the bearded female.

But, it is claimed, that the bobbing of hair in a beauty shop is essentially different from such practice when performed in a barber shop and that when so performed in a beauty shop, and it is merely part and parcel of the modern beautifying process as applied to the weaker and lovelier sex; but whether or not this is so, and whether or not the bobbing of hair is really a beautifying process, or contributes, in any degree, to female beauty, is still, in my judgment, an open question. There are still some old-fashioned people who insist that the hair is woman’s crowning glory, and that as Sampson was divested of his strength when shorn of his locks by Delilah, so is woman robbed of much of her beauty when shorn of her crowning glory, irrespective of whether this operation is performed in an ordinary barber shop or in a modern beauty parlor, even though for the word “parlor” is substituted the more modern appellation “shoppe.”

Counsel for defendant has furnished me with what purport to be copies of opinions of the courts in some of the western states, to the effect that a beauty shop is not a barber shop, and that hair bobbing is not barbering. All of these cases arose under penal statutes relating to the licensing of barber shops or barbers, and have no application to the instant case. Penal statutes are always strictly construed. My attention has not been called to any Xew Jersey case which is in point, nor has my examination of the books disclosed any.

But it is not necessary to the disposition of this case that I decide whether or not a hair bobber is necessarily a barber, and I refrain from such decision. What I am called upon to decide is whether or not ladies’ hair bobbing is a “branch of the barber business.” This I unequivocally hold it to be. Complainant’s affidavits show that for at least six years past the bobbing of ladies’ hair has been practiced in barber shops in the city of Summit. The covenant in question was made about three years ago, and this branch of the barber business must have been in the minds of the parties when the covenant was entered into.

If it be claimed that the defendant Jean Gentile will suffer loss by reason of being restrained from pursuing this branch of the barber business in his wife’s beauty “shoppe,” the answer is that when he sold his business, fixtures and goodwill, and covenanted in the bill of sale not to engage in any branch of the barber business within certain territory, he must have had in mind, as a possible consequence, the very situation that has now arisen, and exacted a higher price from his vendee for that reason. This thought is borne out by the fact, as alleged in the complainant’s affidavit and not denied by the defendant, that prior to the opening of the Jeanne Beauty Shoppe the defendant Jean Gentile applied to his vendee and tried to purchase a release from this covenant. It is therefore quite apparent to me that this defendant went into the new business with his eyes open, and has no right to now complain if the successor of his vendee insists upon compliance with the covenant solemnly entered into. Jean Gentile may have sold his birthright for a mess of pottage, but it is not recorded in Holy Writ that the other Esau was permitted to welch on his agreement, and why should Jean?

On the question of balancing equities or conveniences, I think the facts strongly favor the complainant. The defendant Jean Gentile, according to his wife’s affidavit, is merely an employe of the corporation defendant, and, if prevented by the enforcement of this covenant, from carrying on his trade at 390 Springfield avenue, Summit, New Jersey, may avoid any loss to himself by obtaining employment outside of the restrictive area.

I shall therefore advise a decree restraining the defendant Jean Gentile, also known as Virginio J. Gentile, from directly or indirectly, either as employer or employe, engaging in or conducting any branch of the barber business at 390 Springfield avenue, Summit, New Jersey, or anywhere else within the restricted territory, pending the final hearing in this cause.

It is alleged in the complainant’s bill and affidavits that the Jeanne Beauty Shoppe, Incorporated, is really the defendant Jean Gentile, and that the incorporation of thé defendant company by the wife and cousins of this defendant is a mere subterfuge to evade the restrictive covenant above referred to. This, while not denied by the defendant Jean Gentile, is denied emphatically by his wife, Jennie Gentile, who alleges that it was her money alone that went into the business, and that business is being conducted for her own private and personal gain. Because there is some doubt in my mind as to what the evidence may ultimately show on this point, the order to show cause will therefore be dismissed as to the defendant Jeanne Beauty Shoppe, Incorporated.